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PUERTO RICO FEATURED IN THIS ISSUE
LIBRARY
1950
MAR 27
BUS. ADM.
Reg. U. S Pat. Office
Volume 171
Number 4892
New York, N.
Price 30 Cents
Y., Thursday, March 23, 1950
a
Copy
EDITORIAL
ERP
As We See It
versus
Survey of Puerto Rico's
Recovery
By HENRY HAZLITT*
Financial Position
Contributing Editor "Newsweek"
Author "Will Dollars Save The World?"
Pensions and More Pensions—
Certain
Neglected End Results
Economist calls it "an economic and political scandal"
that we are still. subsidizing totalitarian devices like ex¬
Additional and
bigger "pension plans" as con¬
organized labor are being announced
almost daily. Here apparently is ohe of those
"movements" which knows no halting, at least
so
long as times are good and the unions are in
the saddle. On previous occasions we have been
at pains to set forth our own beliefs, and Indeed
what appeared to us and what still appear to us",
to be plain facts about this matter.
There are/'
however, certain consequences and certain prob¬
lems which deserve further analysis at this time.
cessions to
As
basis for such
analysis, it is well, per¬
haps, to bring clearly into focus the more impor¬
tant procedures and
techniques employed in these
programs. One of the common practices is for
the employer who "grants such pensions" to buy
coverage from an insurance company or com¬
panies which assume the liability arising in the
years to come under the contract v/ith the /union.
Another plan rather closely related to tliis one
is to set up a trust fund into which the employer
pays moneys which presumably, along with earn¬
ings therefrom, will meet future obligations
arising under contracts entered into by the em¬
ployer.
5
a
an
employer
In
on
X,
was
corrected.
M
page
Power
■f\.
,
ated
privately owned and
of
our
$209,000,000
a
a year to $550,Puerto Rico has be¬
come the largest per capita consumer
of American goods. Bank assets haVe
been multiplied ten fold; bank debits,
an
But
basically the situation has not
greatly changed.
In January, 1948,
I
decisive factor
stated
that
the
American
the
Henry Hazlitt
value
been
This has been true> in
ernments of Europe themselves.
in the next two.
Continued
on
Hazlitt before the House Committee
page
on
46
of
increased
building
increased
Franklin
the
seven
permits has
times; electric
Foreign
Affairs, March 15, 1950.
preset in this issue, starting on
550 Branches
Custodian
MIIN
«nc.
A Mutual Fund
available
are
across
Municipal
Canada
Bonds
NDS
request.
on
Monthly Commercial Letter
COMMON STOCK FUND
Please
address Dept.
C.
upon request
PREFERRED STOCK FUND
THE
BOND FUND
White,Weld&Co.
Members New York Stock
40
Exchange
Wall Street, New York 5
Chicago
boston
production
changes, therefore, must have taken place in
Continued on page 21
Bulletin.
Copies
EstebanBird
power
12, other special articles and reports pertaining to Puerto Rico's economy.
Funds,
Research
current
four
has been doubled as has motor vehicle registration. The
assessed valiie of property has been increased almost
five times and public indebtedness has been reduced by
over 50%.
The insular debt has been lowered by over
60% and the municipal indebtedness by some 40%. Sig¬
nificant
""Statement by Mr.
been
five
creased
political policies adopted by the gov¬
the last two years, and it will be true
have
bank
loans have been in¬
times; cement produc¬
tion has been multiplied six times;
in
governmental aid, but
the economic and
index of the turnover of bank de¬
posits,
times;
European recovery in the following
four years would not be the amount
of
yfar.
State and
oper¬
hydro-electric systems, is
subject
around
000,000
Company
This Company, one of the country's
largest
day market for American goods, a
$340,000,000
annual
purchaser
of
merchandise shipped from' the main¬
land. The extent and trade of Puerto
Rico has risen in those 15 years from
/'
'
;l5-years, the people of
$18,000,000 to be sold on March 28.\: Many
things have happened an Puerto Rico in that period.!' j
Since then; the Island of Puerto
: 4
Rico has become a million dollar a
.
No Basic Change
in nearly
back: in the New . York market, with' a
are
bond issue of
^
IN ADDITION to Mr. Bird's article on the cover page, we
The Montana
Puerto Rico
'
valuations, I pointed out, increased
Europe's trade deficit and: so-called
"dollar shortage" by stimulating Eu¬
ropean imports and discouraging or
preventing v European exports. The
in great part
recent years:
in
For the first time
a
among
fictitious valuations have now* been,
-
on
progress that has been '
largely with the help of capital*;
from continental U. S.
Cites present sound financial;
position of Insnlar Government, despite large appropria¬
tions for public works, education and health services.
Holds present insular debt extremely low.
made
9.
,v
$1$ million bond issue, to be offered
an
<
Match 2$ recounts financial
,
39
page
ket with
severe food shortage in Europe
others; recommended that special
provision be made. This abnormal food shortage has now
ceased to exist At that time, also, h serious situation was
brought; about by the pegging of
European exchange rates at highly?
m&M
1fictitious;vaidatfons.; These; fictitious
may
Continued
1948 there
for which
estimate for
himself the "present value" of the liability as¬
sumed, charge it against current operations, and
carry his own "insurance" or liability. The "re¬
serves" accumulated under such an arrangement
may be employed in any of several ways, dean
Puerto.Ricao Government Bank executive, hailing return
of die Island's Government in the New York capital mar-
change control, import prohibitions, licenses, quotas, raw
allocation, and other techniques introduced by
Russia and Hitler, which, kill incentives .and strangle
recovery and production. Advises (a) immediate curtail¬
ment of ERP program to end it in equal proportional
cuts by 1952; (b) terminating ECA bureaucracy and
turning aid program over to Export-Import Bank; and/or
(c) forgiving onr loan to British Government in lieu of
j,
farther ERP advances.
Alternative Methods
course,
for Puerto Rico
material
,
Or, of
By ESTEBAN BIRD
Vice-President, Government Development Bank
UTILITIES FUND
.INCOME
THE NATIONAL CITY BANK
CANADIAN BANK
OF NEW YORK
OF COMMERCE
THE CHASE
(BALANCED) FUND
Prospectus on request
Head Offices Toronto
FRANKUN DISTRIBUTORS, Inc.
€4 Wall
Bond Department
Street, New York 5
Bond
Dept. Teletype: N Y 1-708
NATIONAL BANK
OF
New York
THE CITY OF
NEW YORK
Agency: 20 Exchange Pl»
Seattle Portland, Ore. San Fra nciaco Los Angeles
CANADIAN
Bond Fund
Underwriters and
Distributors of
OF
BOSTON
Stocks and
Municipal
and
bonds & stocks
An
Goodbody
(Incorporated )
Ill Devonshire Street
Established
BOSTON
New York
Chicago
Los
Angeles
CLEVELAND
& Co.
ESTABLISHED 189!
1899
Booklet available for
Doxdhox Securities
Grporaxioh
40 Exchange Place, New York 5, N.Y.
New York
Chicago
Denver
Dallas
Cincinnati
Columbus
Toledo
Buffalo-
115 BROADWAY
NEW YORK "
105 W. ADAMS ST.
CHICAGO
IRA HAUPT&CO.
Exchange
Principal Exchanges
Members New York Stock
and other
MEMBERS NEW YORK STOCK EXCH.
~
.
interesting workout situation
Institutions and Dealers
Prospectus from authorised dealers or
OTIS & CO.
England
Public Service Co.
Bonds
Corporate Securities
VANCp;, SANDKHS So CXI.
New
CANADIAN
„
111
Broadway, N. Y. •
Teletype NY 1-27M
Telephone: Enterprise. 1820
WOrth 4-6000.,
Teletype NY 1-702-3
WHitehall 4-8161
Boston
THE
(11941
2
MARKETS
TRADING
The
IN
Pacific G. & E. Rts. & Com.
Cincinnati G. & E. Rts. & Com.
participate and give their
Southern Pacific 3/60 & Rights
AT
NET
GEORGE
Partner,
HANNAHS
York
(Municipal
Corporation
The
1920
like
5
120 Broadway, New York
Ballin
Hannahs,
New
New York Hanseatic
lorem
best
is
faith
t
e s
the
realize
which
on
full
a
obligation of
tit
d
u
an
Rights & Scrip
days
and
frfrC ppNNELL & CO.
sized.
all
A f t
market
e r
120
New
York
Curb
Exchange
tory of the
Exchange
United
BROADWAY, NEW YORK 5
Tel.
REctor
Municipality
■
the
Common
but
has
security is still
of
pay
units
vital
most
)
Public
our
which
function
is
■
1st
ferent
Floor, Kentucky Home Life Bldg.
LOUISVILLE
g,
KENTUCKY
Bell Tele. LS 186
Long Distance 238-9
continue
of
good,
to
whole
our
that many
dif¬
buyers have be¬
types oi
reflected
tial
in
in
wide
a
price.
is
It
savings
s.
bonds
obvious
so
many
pany
the
profit through expanding sales
!
:
:
an
I
and
could
issue.
one
a
never
bond due
>
Ihis
as
certain
are
absurdly
gerated.
can
remember
,
I
was
City
and
interest
"Fads
exag¬
„
when
or
and
have
obligation in
sold at much
rates
prices
than
San Francisco,
Fancies"
in
little
Rich¬
which
women's
hats
influence
in
separated
old
not
help
obsolete
wornout
terested
all, the promise to pay of
Community with
unlimited powers to levy ad va-
1946
in
G. Frederic
I
suspect
this
TVele. RAndolph 6-4696
Tel. CG 451
S.
three
are
C.,
groups
Tallassee, Ala.,
and Baltimore,
dividends
for
when
paid
the
the
to
first
time
that
$1
shares
present
of
in
of
year.
offer
much
I
so
are
Mills
Curb
the
shall
listed
was
about
which
IV2
time
propriate
assume
sympathetic
has
since
ago,
had
very
trading activity and
currently quoted around 25.
Vernon-Woodberry
textile, and
as
the
feeling
to
is
is!
use,
it
as
the
upon
manufacture
"
West Point
by
was
problems
of
and
financial
by
textile
and
an
Mt.
Vernon
old "Duck
millstones
industry. The
of
the
turers of cotton
60
Trust," and
of
years
West
a
'from
under
142
SPECIAL PUTS OFFERED
Northwest Air..
10% Sept. 30 $125.00
General Elec..
46% June 19
162.50
Con. Edison
31% Sept. 30
175.00
South.
is
largest
of
some
Mt.
like
June 14
187.50
200.00
Amer.Tel&Tel. 152% Oct.
225.00
the
2
U.S.Steel
Corp. 33% June 26 225.00
Pan East.
Pipe. 47% June 20 237.50
Park & Til ford.
42% May 27 250.00
Nickel PI. Pfd.139
Sept. 25 550.00
Skelly Oil
June 23
.
..109
on
Puts
and
525.00
Calls
Request
on
Dec.
diyidend
Mt.
"
equivalent to $17.35
Continued
oldest
&
Call
Assn.,
20 Pine Sf., N. Y. 5
Brokers
8t
Inc.
WHifehall 3-9177
Otter Tail Power
Upper Peninsula Power
Harshaw Chemical
Philadelphia Electric Common
Allan Wood Steel Com. & Pfd.
Indiana Gas & Water
Philadelphia Transportation Co.
•
.
;
capital
$8,953,030,
per common
on
Issues
"
Henry B. Warner & Co., Inc.
Members
123
was
Put
Dealers
reserves,
working
1949
Members
Vernon,
share last year. It is
selling around .37. Its
31,
Filer, Schmidt & Co.
the
over
per
Vernon's
similar
are
Railway 34
as
1949, its
latest fiscal year-end, which com¬
pares with a book value of $49.27
manufac-? at
duck and
..
Tex.Pac.Ld.Tr. 58% June 26
result
as a
record of
continuous
Point,
paid $3
company.
products in the world. These
sold
BS
2904
Open End Phone to New York Canal 6-I61M
mills
such
not to be confused with the great i for Mt. Vernon.
one
Tele.
Enterprise
burdened
never
inherited
West Point boasts
a
"in¬
such
as
Mt.
payments.
such suffers from
hasten to note that this is
dustrial"
Me.
indus¬
run-down
with which that
upon
is
of
of antipathy currently
industry is looked book ivalue, including
investors. But let me was $29.17 at Aug. 31,
general
Portland,
one
Vernon's chief competitor and has
likewise built its record primarily
trial duck.
the N. Y.
on
years
it
always
are
respect the tremendously success¬
West Point Mfg.
Co. is ap¬
ful
same
limited
Mt.
HUbbard 2-5500
method of evaluation, and in this
in¬
mind, therefore,
Vernon-Woodberry
as my contribution.
common
This stock
Int.
Hartford, Conn. Enterprise 6800
Booklet
Comparisons
the
objective.
our
Mt.
Tel.
This
followed in 1947 by $2 out of
was
With all this in
I
Dealers
in¬
were
equivalent
the
on
December
Helbig
that
column
mutually
on
as
Securities
the
earnings of $11.72, $4 in 1948 out
from
are
ground
of
page
43
National
Securities
Dealers
South Broad St., Phila.
9, Pa.
Assn.
Phila. Telephone
Bell System Teletype
PEnnypackdr 5-2857
PH 771
New York City Tel.: BOwling Green
•:
*Govt.
~\
American Furniture Co.
Bassett Furniture Ind.
Stix & Co.
Govt.
-
Dan River Mills
INVESTMENT
509
Olive
street
St. Louis I. Mo,
Lynchburg, Va.
MEMBERS
tillllllllllllllUlllllllllllllllllllllilllllU
Request
Employees Life Insurance
Govt.
Employees Corp.
Peter P. McDermott & Co.
Members New Yerk Curb
STOCK
EXCHANGE.
Over-the-Counter
Quotation Services
for 37 Years
ought—Sold—Q uoted
Members New York Stock
MIDWEST
LD 33
on
SECURITIES
Scott, Horner &
Mason, Inc.
Tele. LY 83
Employees Insurance
♦Report
f
44 Wall
Street, New York 5
TeL DIgby 4-7140
National Quotation Bureau
Incorporated
Exchange
Exchange
Tele. NY 1-1817
Established
46 Front Street
CHICAGO
1913
New
SAN
i
9-4818
miiiKiiiiiimiiiiiiiiiiiiiiiiiiimiiiiri
on request
Chicago 4
there
augurated
was
point of view,
we
Nat'l Assn.
75 Federal St., Boston 10, Mass.
outmoded
equip¬
remaining mills, re¬
the
Common
B
298 South La Salle St.,
of
tives.
but
of
J. B. Maguire & Co., Inc.
Members
of
job
number
with approximately 130,000
and over 2,000 looms,
employing around 4,500 opera¬
other securities.
readers
branch offices
to our
TRADING
spindles
opinions,
is
established
i
zippin & company
the
large
a
Md.,
that
Similarly,
Direct wires
and
in
Columbia,
myself,
eventually de¬
most
NY 1-1557
Birmingham, Ala.
Mobile, Ala.
im¬
mills, " replacing
Today,
Trading Market$
Analysis
tackled
out
of mills located in
like
others,
Trust"
"Duck
management
new
mediately
weeding
the
from
tiring heavy 7% debt and 7% pre¬
stock, and writing off al¬
most $3 million of "good-will."
cate¬
conclude
1915
the International Cotton
as
The
ment
in
ill-fated
and
Mills.
several
bulk of its
Aft&r
Mexican Railways
Bought—Sold—Quoted
St., New York 4, N. Y.
HAnover 2-0700
New Orleans, La. -
ferred
gories, i.e., its
degree
of
safety, its de¬
gree of returp,
considered about the
grade
country
an
r*
BONDS
to
.
shall
dozen
due in 1986 of
There
municipal finance.
Teletype BS 259
one
be in any one
%
I
are
the
148 State St., Boston 9, Mass.
Telephone WOrth 4-5000
As
differences
should
7-0425
yield
ous maturities, ratings or current¬
ly popular municipal issues, but it
is quite obvious that some of the
govern
Y.
is¬
practical reasons for
of the prices paid on vari¬
Calif.
N.
to
man,
to buy
mond, Virginia,
Tel. CA.
a
and
lower
w
new
years.
bond
more
same
highest
scriptive analysis
see
we
in forty
1%
Detroit
call for de¬
as
feel
of these differences in price
many
^t
cases
offered
in 1985 than for
indicated for 1950-51.
or
bonds
over-done
are
exceptional opportunity for
as
future market
against
municipal
sound
Write
as
well
as
from % of 1% in one year to 2
pay
THIS iswhose
a new stock
productaffords
com-
•,
Exchange
.
date
textile year.
of
25 Broad
Stock
selling
..
Mills
its
have been, in our respective
less
adequately
ap¬
praised in the open market than
some
Investment
subject
this
the
its
Co.,
of
some
may,
old
A Growth
Halsey
agent..
tant factor in
ort2V2%
GREER HYDRAULICS
Turner
known
a
York
New
through
security enters into the picture.
Maturity also becomes an impor¬
sues
Members
MARKETS
trademarks in the country
of $17.05 earned, and $3 last year
out $3.87 earned in a very bad
protection
V
such
on
of
Co!
Steiner, Rouse &
Security Analyst, Philadelphia, Pa.
cide upon a security whose favor¬
able characteristics, be what they
depreciation and
an
differen¬
Commercial Banks purchase these
bonds, ./marketability
u.
City
its growth
in
State, City,?
County, School District and other possibilities^
Municipal obligations, many ques¬ etc. etc. I can¬
are
Bought—Sold—Quoted
son,
back to 1844, the present company
interested
come
tions have naturally arisen which
buy
life.
series,
must
immediately
qualify
thoughts with considerations
featured
to
are
not
Due to the fact
Incorporated
stock
depressions
security to be
;
involved.
BANKERS BOND E
writing
title
the
as
promise to
Government
system of Democracy is seriously
m
G.
ex¬
Vernon-Woodberry Mills)
When
increased
a
'
,
Preferred
(Mt.
whether
•
5%
—
wars,
and
New York
exceptionally good
so
market
If the unconditional
Kentucky Stone Co.
Mills
Helbig, Partner,
Helbig & Co., New
Keystone Funds—William A. Stin-
was
'
•
Common
from
Partner, Baron G. Helbig & Co.,
factor.
American Turf Association
Louisiana Securities
City.
States Mu¬
learned
G. FREDERIC HELBIG
G. Hannahs
tremendously. Some attribute this
almost entirely to tax exemption
American Air Filter Co.
Han¬
Ballin
Frederick
While
for the eventual pay¬
principal and interest on
its bonds is
has
excesses
years
that
quite
,
\
ment of
interest
the necessities of American
States
fifty
of
absolutely essen¬
tial to its continued operations in
,
in the past
2-7815
equal
that its credit is
Members
York Stock
more
perience through two
his-t
the
George
Hannahs,
Vernon-Woodberry
Baron
-
nicipality
empha¬
-
years
and
more
rates
many
The average United
sometimes
are
for
similar.
which I think
over
tended
the
and
prevalent
ern
Mt.
sewers,
become
to
in these mod¬
Since
—
.
questions that
are
prop¬
G.
has
ties
of
e
Bonds
Partner,
& Lee, New York
are
mul-
a
nahs,
Alabama &
and many other
this
covers
taxable
Municipal
and
Selections
York City.
ordinary services
Standard
Oil Co. of California—
required by our Municipalities
Sidney L.
Schwartz, Partner,
by the public almost everywhere,
Sutro
&
Co., San
Francisco,
and without municipal credit it is
Calif.
quite difficult to see how they
can
be adequately provided.
In
Polaroid Corporation—Allan LoEngland the credit standing of
pato, Allen & Co., New York
the various Cities and Municipali¬
City.
I
pro¬
statement
Specialists in
all
on
Week's
Participants
Their
schools, street /
paving, fire and police protection
b 1 ished
a
taxes
Water,
which
return
most
credit
and
Bond
one
particular security.
a
Thursday, March 23, 1950
This
Forum
security.
Community. I
New
CHRONICLE
erty within its confines is the real
Lee
&
City
Bonds)
Municipal
duces- the
Teletype NY 1-583
BArclay 7-5660
C.
for favoring
reasons
PRICES
Established,
FINANCIAL
A continuous forum in which, each week, a different
group of experts
in the investment and advisory field from all sections of the country
request
on
&
Security I Like Best
*Amerex Holding Corp.
♦Memo
COMMERCIAL
York4,N.Y.
FRANCISCO
Volume 171
Number 4892
THE
COMMERCIAL
INDEX
Page
The
Recovery—Henry Hazlitt
Smother Technique
Cover
(Editorial)
,
Oppor-
tunity—Theodore Prince
Frear Bill:
-
A
4
—
Little Business for Big
Trap to Ensnare
Business—Thomas Graham
Our Asiatic
Policy
6
8.
—Hon. Dean Acheson
:
'___
8
Merchandising Securities at Merrill Lynch—Robert A. Magowan
How America Is Being Socialized—Robert S. Byfield_____
.
9
,
.
9
Investment in Securities and Investment Trusts—Harry L. Sebel 10
-
How Safe Are High Grade
Preferred Stocks?
—Bradley K. Thurlow__
——
—_...
10
Factors in Approaching Depression-—Clinton Davidson, Jr.___ 11
,
Employment Trends in 1950—Herman B. Byer
29
State of Pennsylvania Gets Record Size Check.—________—
30
Why Should
34
a
(Boxed)______
Statement Be Necessary?
High Level of Home Construction Maintained.
*
—___—_
35
No Basic Change in Money Rates, Says Marcus Nadler.
38
Insurance Executives Warn of Inflation Danger
42
Estimates Industrial Stock Prices Now Are 30% Above
Chocolate-Sealed
Normal 44
Fish—Roger W. Babson__
45
Puerto Rico Section
Survey of Puerto Rico's Financial Position—Esteban Bird—Cover
''Reviews
and
Forecast
of
Industrial
Development in
Rico—Rodriguez-Laizaro
Puerto
____'
Rico's Food Bill
Government
Puerto
12
—
14
L
Rehabilitation of Puerto Rico's Coflee Industry in Progress— 14
Achievements
and
Plans
Puerto
of
Water
Rico
Resources
Authority—Antonio Luchetti
16
U. S. OKs New Health Centers in Puerto Rico___
16
..
.Puerto Rican Banks Now in FDIC—A. M. Sakolski
18'
Housing
18
Puerto Rico Building New Air Terminal
*
18
Puerto Rico's Vocational Training Program
Toward Industrialization
Highlights Trend
________3________ 20
-Puerto Rico Wins Sugar Victory
never
For
good prices
prefer us.
Banking Group Offering Puerto Rico Municipal Bonds
___
WALL STREET, NEW YORK
99
Telephone:
\ *
CORP.
i
Bought—~S old—Quoted
Walter J. Connolly
INCORPORATED
30 FEDERAL
_
As We See It (Editorial)
20
was
writers and
aimed at
"free-riding": as
For
WE SUGGEST
RIVERSIDE CEMENT SO.
CLASS B
a
45
Canadian Securities
42
Coming Events in the Investment Field
48
Dealer-Broker Investment Recommendations
leading producer of cement
in
fast-growing
Southern
California.
Analysis of this Company and
a
review of the Cement Indus-
try available on request.
i
26
From Washington Ahead of the News—Carlisle Bargeron
6
Indications of Business Activity
56
Funds
32
16
______________
News About Banks and Bankers.
Wilfred
Our
Reporter's Report
Our
Reporter
"Prospective
on
49
Governments
34.
61
—
Public Utility Securities
24
I
.Railroad Securities
26
Securities Salesman's Corner
36
Securities Now in Registration
58
The Security I
Like Best
LERNER & COu
selling group members have placed
Investment Securities
10 Post Office Square, Boston 9, Mais.
a
Tel. HUbbard 2-1990
1
Published Twice Weekly
48
Gardens,
Drapers'
land c/o Edwards
COMMERCIAL
The
Reg.
U. S. Patent Office
COMPANY, Publishers
25 Park Place, New
REctor 2-9570
ERBERT D.
York 8, N. Y.
to
,
Reentered
ary
25,
York,
E. C., Eng¬
President
WILLIAM D. RIGGS, Business Manager ;
We
at
Y.,
the post office at New
under the Act of March
Subscriptions
in United States, U.
Territories and Members
licago
3,
El.
etc.).'
135
South La Salle St.;
(Telephone:
on
public
page
47
State 0613);
interested in offerings
$42.00 per year.
High Grade Public Utility and Industrial
Quotation Record
$25.00. per year.
in
section*
PAYS DIVIDENDS
because it works harder
Financial
advertising in The New
dividends be¬
it works harder.. .reaches
—
Monthly,
New
York funds.
banking executives, corporation
officials, professional and
tional
Spencer Trask & Co.
York Stock Exchange
25 Broad Street, New
(Foreign postage extra.),
JTcte—On account of the fluctuations in
the Tate -of exchange, -remittances for for¬
eign subscriptions and advertisements must
made
"Securities
institu¬
security buyers — and
individual investors. Are your
Members New
Other Publications
be
our
Registration"
cause
S.
ominion
Bank .and
of
of
San-American
Union, $35.00
perper
year;
in
of
Canada,
$38.00
year.
Other Countries,
Other Offices:.
Continued
PREFERRED STOCKS
Thursday, March 23, 1950
Every ThursdayT general hews^and ad«
irtising issue), and ••every Monday (com-;
ete statistical issue — market quotation
cordA .corporation mews, bank clearings,
are
Subscription Rates
Possessions,
in
second-class matter Febru¬
as
1942,
N.
ing consult
York Times pays
8, 1879.
SEIBERT, Editor & Publisher
ate and city news,*
;
& Smith.
Company
-
9576
WILLIAM DANA SEIBERT,
by purchasing from dealers at prices higher than
specified public offering price instead of supplying
"The effect of such actions is to mislead the
Copyright 1950 by William B. Dana
,
potential corporate financ¬
the specified
and
FINANCIAL CHRONICLE
1LLIAM B. DANA
London,
complete record of
a
the stock from their unsold^ allotment."
39
—
For
price, withheld them for their own accounts. These shares
were within a very short time sold in the Street at higher
prices. (4) Some firms were found who placed their al¬
lotted shares in the firm trading account for resale in the
Street at the same time they were accepting purchase
orders from customers.
They executed the customers'
the
5
(Walter Whyte Says)——-—
Washington and You—
$9*25
orders
2
The State of Trade and Industry
Tomorrow's Markets
..
'
Selling about
to distribute the shares to their customers at
5
_.
Security Offerings
''
group, having acquired shares at the public offering price
less a dealer's concession, without making any attempt
44
May
f
\
-
5
Einzig—"Britain's Increasing Gold Reserve"
Observations—A,
(common) STOCK
A
*
'
substanpartners,
officers and key employees.
In many cases such shares
were almost immediately resold by the partners, officers
and employees at prices higher than the specified public
offering price, frequently before any payments were made
therefor. (2) In other cases members of the selling group
on
the initial date of the offering placed a substantial
portion of their allotted shares in their firm's trading
account. Such shares, instead of being offered at the pub¬
lic offering price, were sold at higher prices in the Street,
i.e., to Other brokers and dealers on a professional trading
basis. (3) Certain dealers who were not members of either
2I1
45
—-
Teletype-BS 128
Large Appreciation Potential
"(1) On the initial public offering date certain under¬
Cover
Stocks.
Business Man's Bookshelf
NSTA Notes
& Co.
1923
STREET, BOSTON II
HUbbard 2-3790
"The^tudy to date discloses the following:
Regular Feature$
Mutual
PRENTICE
Common Stock
tial 'number of shares in the accounts of their
Insurance
WHitehall 4-6551
REED
;
In that release it. said in part:
24
Caribe Hilton Hotel Located in San Juan
and
obsoletes, gen¬
20
House Group Urges Full Social Security for Puerto Ricans
Bank
on
tlemen
change Act df 1934. '
20
Two Puerto Rican Cities Authorized to Increase Debt
bother with stocks that
yield you another dime?
will
•
target. How¬
ever; apparently not content with this determination and
believing that a rule of some kind was necessary to ac¬
complish this purpose, the SEC on April 16, 1946 issued
its release No.
3807ip Connection with the Securities Ex¬
18
:_______
'Reports Puerto Rico Population Rise.
BEST FRIEND
why
-—so
through the underwriters' trading department at
prices in excess of those being accepted by the retail
department of an underwrite): (the fixed public offer¬
ing price) was per se improper because both these
determinations were agencies of the same firm.
This
Federal Government Supplements Puerto Rico's Low Cost
<
DIVIDENDS
ARE A MAN'S
The general effect of Mr. Treanor's position was
that the distribution of the particular debentures
Rico Blazes the
Puerto
for
Way—Leonard Bourne
creating excessive trading."
as
COMPANY
AND
an inept appellation, but a well recog¬
handle, is currently occupying the attention of the
securities field.
^
[ :
The Securities and Exchange Commission in its re¬
lease No. 2955 issued on Nov. 16, 1943,
expressed the
opinion of the Director of its Trading and Exchange Divi¬
sion, James A. Treanor, on this subject affecting the de¬
bentures of "X Corporation." .We quote certain portions
of that opinion which are
self-explanatory:
*.
"When.an underwriter -,or" Selling-group' member is
still engaged in offering the security, he is
inducing the
purchase of that security by others.. Transactions by the
itnderwriter at that time which create excessive trading
activity in the security or which raise the price thereof,
are
illegal, regardless of whether they are characterized
as
'trading' or 'stabilizing' transactions.
"In this connection, I would like to point out that
purchases above the offering price, while the distribution
is going on, would be unlawful, in my opinion, even
though
independent quotations and transactions at a higher price
may be found. Such transactions are obviously not neces¬
sary to facilitate the distribution and would be considered
14
_._
Development Bank
-
3
llCIITfflSTEIII
B. S.
nized
States-Soviet Tension
United
and
Technique
"Free-riding,"
>
The Problem of Old Age Security—Sumner H. Slichter______
*
,
4
_
Securities Business Primer—George F. Shaskan, Jr
The
3
;—
.
Southern Pacific 3s of 1950—Convertible Investment
(1195)
"Free-riding" in underwriting and primary sale of securities a
misnomer. System result of custom, trade practice and usage.
Administrative bodies' attempts at new definitions of fraud.
Usurpation of noh-delegable legislative functions. En camera
activities of SEC. Control of NASD which is hamstrung by
Maloney Act. Need for surbihg SEC powers.
Survey of Puerto Rico's Financial Position—Esteban Bird—Cover
versus
CHRONICLE
The Smother
Articlet and New$
ERP
FINANCIAL
&
HAnover 2-4300
York 4
,
-
Chicago
-
50 Congress Street, Boston 8
JHubbard 2-8200
'
Glens Falls
enough for
you
?
Members New York Curb Exchange
Teletype^NY 1-5
Albany
advertising dollars working hard
-
'
'
.
"
Schenectady
SI)jC jNetot ijork SimejJ
"All the News That's Fit to
-
Worcester
Print"
4
THE
(1196)
COMMERCIAL
$10
Opportunity
bond
a
of Southern Pacific
the
at
have
$55, the inhas
vestor
In
be
to
of
amount
reduced
by
vi
n
cake and
This
eat¬
too."
it
ing
is
be¬
The purpose of
to
used
the issue will be
reimburse
the
treasury
for amounts
heretofore expended
therefrom in
connection with the
__1100.
retirement of outstanding funded
hint A
debt. Also, the 1950 expenditures
Srf^ accTir-Po for road and equipment are estih*
or
,
mated
Theodore Prince
paymenioi nis
investment
,7ear,S-.
x
(2) It offers him
with
in
substance,
terest at 3%
in
10
over
amount
ner
ernwinf?
a
road
at
and
thp
minm
flece than
of thp
enmmon
bond
the
or
obtain
Mnrirv* sairi
nartirinntTnff
of
nf
thp
in
rail-
nrpl
email
a
1(W
nrinai
storks
this
should
in-
nrnsnerons
™«jt
Therefore
the
with
annum
pmiitv
nn
years
invested
pychflnpp thprefor
nerinHi
opportunity
obtain,
an
of risk to
a minimum
same
-x
3°/
be
convertible
compared
at
about
$107
million for
which $30,245,000 of funds from
previous equipment financing are
52
share
Der
45/55
of
share
a
that
92V2
(without
2V4S
Of
on
'81
selling
basis
a
sonable for
call held
a
over
on
Mnnri
the
debentures
will
be
appiied toward this 1950 program
an(j
0ther
corporate purposes.
and
years
right
perpetual
a
not bear
weight in the face
discrepancies and present
a limited period of
of such
operations for
privilege or call is important. In
that connection, emphasis must be
laid on buying the debenture
mSiiim T
*
xC•
a rise of 10%. This conversion
privilege is attractive and could
few are selected
a
tOmmmmmmmmm
1949-50 Low
*Tha
a
p
•
•
counseHor
own-
^Consolidated
Edison
3s.
1960,
tually
Bonds
bond convert,
-
Stocks
102%
21%
125%
32%
23%
11
100
20%
'llO%
34'/8
10%
13%
120%
150%
16
12%
*
American Tel.
at
par
plus $30
$45.18
American
2nd
at
106%
138
1
101
1957
preferred.
through 1957
136%
64
35%
21
99
35%
134%
57%
35%
22%
ap-
conversion of $55 would
1.8181
1.82
or
shares
per
$100 bond which is simplified by
the process of conversion which
representing the difthe
price
at
which he purchases a security and
the price at which he sells such
requires $10
per
share to receive
the bond.
This illustrates the almost 2 to
1 rise from par that would follow
this
Southern
Pacific
bond
is
well illustrated in the above table
these 2 shares of stock. However, where
similar
rises
have
some-
between
taken
- the - counter
firm can at one
broker and at an-
over
a
$108 for the bond; $65 for the time act as a
stock would mean a price of $117; other time act
in
(or
loss)
ference
43
con- par or $100 for the bond; $60 for security.
In
into the the stock would mean a price of tranasctions
semor security, the common
predates more rapidly.
ac-
commission but
a
the form of profit
times
$3.50
$42.50
he
owns
take the form of
is in
bond-
Conv. at
through
Cyanamid
Convertible
of
preferred.
share
per
$100
that
customer
3%s, 1961. Conv.
per
broker in
a
dealer dif-
compensation, therefore, does not
into 30 shs. of stock-
& Tel.
A
the security which a
buys or purchases a secunty from his customer, and his
Appreciation
Stocks
convert-
Me at $25 per share—_
~
Bonds
Westinghouse Electric 2.65, 1973. Each
*
sold to dealers.
as a
dealer; in each
the firm's status in the trans-
case
action
be
must
disclosed
to
its
customer.
The
principal significance of
this
difference between
broker
and .dealer—to the investor at
least—is that where the firm acts
broker it discloses the amount
as a
taxes
and
years, and
for 20 years head of the
Stock Exchange firm which bore his name
-Ed.
was
a fair approximation of
place since about June, 1949 to handling the transaction; on the
the computed rise in the bond, date from the par of bond and of other hand, where it acts as a
from a r*se in the stock, 1.8 shares preferred stock which is intended dealer, the investor has no way
of stock is taken as a base for to be emphasized; namely, a 10% of knowing exactly hovv much
OVery $100 Of bonds; this WOUld to 30% appreciation in a fairly above the market he may be payZ
—
11
.J
_1_
-I
f\
_
...
_
—
1„
-
•
_!_
f
»—
_
A.
—
1
...
1
_
inrliVafp
inaiCate
that
a
the stock would
price
of
$55
for
short
period
securities
mean
a
price of
in
excellent
possessing
senior
conversion
xl/\rvlnv<
ing
+V»/ii
L
1
APi
The
Southern
Pacific is
one
diversified
traffic.
Citrus
ket; he may be receiving.
Stock
The
and
An
SOUTHERN PACIFIC CO.
minerals
ii^hPr^inH
lumber and
products,
are
manufactures
important,
than
convenient
a
where
Memorandum
on
—
miscellaneous
and
.
goods
Due 4/1/60
request
manufactures
47%;
and
.,
.
It
miscellaneous
Passenger busi-
reaches from
_
.
.
Portland, Ore-
.
,
gon to Los
New *
Bell System
YORK
6,
N.
Y.
Teletype NY 1-310
,,
,
Angeles and thence to
Orleans
its busiest year, the New York
Stock Exchange handled some 1,-
126,000,000 shares. A normal day
and
securities
more
market
place
can
be
traded.
buildings,
occupy
dominates
al-
street
—
hence
the
name
of
"Overland
Route"
C,
„
•
ban
I? ranCiSCO
Also,
-.
with
,
•
and
J.
to.:
/S
runs
J
.Ogden,
from
TT,
.
Utah.
ownership of 88%
Continued
on page
Stock
value
today
Luuay
pruuauiy
probably
Exchange
these
of
jt
h
In
the
absence
of
The New York Stock Exchange
iS
voluntary association of indi-
a
vidual members.
1,375
There
some
are
A membership
members.
is
technically known as a "seat" although as you will see on your
visit to the exchange very few of
the members actually have seats
to sit
These seats "that aren't"
on.
have at times been
pensive
1929
extremely exexceeding $500,000 in
—
but
fallen
has
low
as
as
The present price
"seat" is approximately $50,-
$17,000 in 1942.
for
a
000.
Broadly,
gives
"seat"
a
member and his firm the
orders
execute
that
for
is to
the
on
a
right to
exchange;
buy and sell securities
charging them a
customers
commission.
of
member
For
the
a
firm
be
to
York
New
a
Stock
Exchange at least one of its partmust
ners
ever,
the
own
a
"seat."
How-
not all owners of a seat on
New
York
Stock Exchange
operate member firms.
Classes of Exchange Members
More
the
members of
be divided
classes. About
specifically,
exchange may
into
roughly
five
one-half of the members are com-
mission
brokers
who
handle the
public for a
commission.
one-quarter of the mem¬
specialists who restrict
their trading activities to one or a
About
bers
are
Continued
on
page
Royal Bank of Scotland
Incorporated by Royal Charter 1727
HEAD OFFICE—Edinburgh
Branches throughout Scotland
LONDON OFFICES:
an
3
Bishopsgate, E. C. 2
exchange he might find it an ardand costly matter to find a
8 West
prospective seller, but when both
49
uous
bWe" and
security
ca^
their
is
se}le/s ^w
tot a
an exchange
traded on
through
central place.
meet each other
brokers
at
a
of the third lecture of a
"Investment
Planning
for
given under the auspices of
Smithfield, E. C. 1
Charing Cross, S. VT. 1
Burlington Gardens, W. 1
64 New Bond
Street, W. 1
TOTAL ASSETS
£155,175,898
»Transcript
series
on
Women,"
-0*1
38
is
neighbor-
m the
in
i
our
There is at least one securities
With
total
hood of $100 billion,
years some
operated right in the
exchange in every large city ai-
traffic.
York
the
though up until recent
the
Coast
New
and
eral
nothing
Union Pacific it forms part of. the
Pacific
Members New York Stock
Exchange
%
next
.
provided 10% of gross.
ness
McGINNIS 6- COMPANY
.
8%; animal products
mines
3% and l.c.l. 4%.
NEW
while
is
„
second largest exchange, the New
normally contribute about
York Curb Exchange
Any one
one-half
of
freight
revenues.
wjsjjing to purchase a security
Average haul is long and much of
]i ted
Qn
the
exchange
can
traffic
is
in
the
higher-rate
through his broker make a bid for
brackets.
Agricultural
products that
security; and if some one who
provided
21%
of
1948
freight
already owns the security is willrevenues;
forest products 17%;
j
to sell jt at that pricei pur.
,
Convertible Debenture 3$
Tel. DIgby 4-4933
Broad
the
purchase and sales orders on the
floor of the exchange for the gen¬
Exchange
exchange
Exchanges
petroleum
mar-
of
largest railroad systems of
12,485 miles of road with a well
BROADWAY
of
In
shall have the op¬
In
V%A
how much below the
or
privileges of promising stocks.
the
61
we
Exchange
corner
of commission it has charged for
to obtain
„,
ing in corporate practice and
a financial circle
figure for 30
Exchange
portunity of visiting this exchange
and seeing how it operates.
As
previously stated, it is the largest
of all the exchanges, handling ap¬
proximately 85% of the transac¬
tions on all registered exchanges.
the
fers from
1950 High
Stocks
Bonds
/
xv
vesiment
or
Over-the-Counter Transactions
or
1950
receive
mortgage issue of 1951. Also, the
maturity of bonds fall due before
the Southern Pacific 1st
mortgage
customer
set but more likely are bought from
as
These bonds have been under" forth below*
mfltpHaiivdeclines
rate of
xaveridiiy in price.maturity except for regular serial
equipments and a small $622,000
his
which
1
earliest
of
possesses no interest
Note must be taken where
n view ot their
the
risk
Southern Pacific which only needs
™atuflty should
Let us analyze the conversion $70 for the stock would mean a
t °iln
j
>ba se don presen t of the Southern Pacific deben- price of $126 and $75 for the stock
Papifk.
Pr!ml!Veil
S°utbern tures into stock. The holder at would mean a price of $135 for
Furthermore, it is
and
Geo. F. Shaskan, Jr.
to repay.
xlx version is by multiples
'•
an
the
Streets.
few weeks
exe-
and
at
Wall
and
around par for that is the amount
of money the company is bound
e
thpep
is located
Securities
which
are
traded
compare
favorably
with
other over-the-counter
may
also
be
convertible stocks and bonds of bought and sold through a broker
Dow Chemical
<?+
count
Stock
convertible nrivileee is a
years.
To
obtain parity,
Atlas ership in the securities which are now for the Exchange is about
1 he convertible privilege is
1,valuable privilege. In this ap- stock must rise 25% or 2Vz times bought and sold. For his services 000,000 shares. There are approxi¬
Praisal the question of cost of the the rise required in a stock of he charges a commission.
mately 1,400 securities traded on
•
»
as
in
best
The New York Stock
change and
higher premium than $4 ^ above acts
a
exchanges
the
The New York
cuting the orders of a customer. A
broker buys and sells for the ac-
mortgage
has a standing that entitles
price
maintenance even for their de¬
bentures.
cuntiStraded
selling at 24%. The holder of
this call has the privilege of buy- 0 n an
e xing The Atlas Co. at $25 a share change are
that would mean 30J/2 or a six
bought and
point premium above the present sold through
price< This is $6 against $4y2 on a broker who
the Southern Pacific selling at is a member
twice the price of Atlas Corp. or
such
exwhich former should thus require
ity
and
undoubtedly
known, we will use this
Exchange as an example in our
study of exchanges.
on^ an
excnanf ® or
hunter" ' Sel
does
first
a
„
ceeds of
long-term Government bonds. A
company that can command this
even
whlch
Perpetual can of the stock
fs
.
agent
which is almost the yield of U. S.
credit
10-
a
™
HavmS discussed the various though recently several of the extypes of securities, we must de- changes in a number of Midwest^ermine how such securities may ern cities combined to form a new
156 P"rchased and sold. Securities and large single exchange called
*r?d eAthe Mldwest stock Exchange,
Since the New York Stock Ex¬
' ,ls boufkt
change
is the biggest of all secur¬
*,5
s °
10
basisr^
2.62
at
the
exchange listing regulations and inci¬
stated. For the difference between
with
and
Cites
avaiiable. It is expected that pro-
convertible
any
4.97
will
$4% premium at present
priees per share. This is very reamean
debenture 4V2S of '81, selling
&
privilege)
of
stock of Southern Pacific
----------
at
banking functions, and the difference between broker and
dealer activities.
price of $102
$55 and $2 additionally for the
other
an
cause:
mn'th*
.
vear.
his
g
nrice'of
ommon
retired
LilT'oi
102 and 1/4 l6SS eaCh SUCCeeding
of year.
a
sell
may
investors, Mr. Shaskan describes in ele¬
women
mentary fashion the way in which securities are bought and
sold. Explains stock exchange, over-the-counter and investment
raised premium.
a
this
They are re- year period invested in this bond.
deemable (except for operations
For examp]e
AtIas Co
War_
0f the sinking fund) from 1950 at
t
cpiiin® at
have a
■orism)
aphorism)
In lecture to
the
through conversion.
might indulge
"h
at
event,
any
.
debentures
debentures
are
dence of Federal regulation.
2%% annual sinking fund
a
subject
an
opportunity
(if the writer
in
convertible
These
stock
common
is
balance
the
1961 which in a sense protects this
debenture issue.
into the
convertible
and
coupon
By GEORGE F. SHASKAN, JR.*
Partner, Shaskan & Co., Members New York Stock Exchange
of the issue of $37,~
subscribed for by the
stockholders, the bankers
Says it offers
bonds,
of
uuiiua, the
uie $21,405,000 of
uj. 2^ vi
proposed
Securities Business
stock
by the bankers and
selling around 102. If
725,600
Co., cites advantages accruing to investors
of
issuance
ui
$37,725,600 Southern Pacific debentures, due 1960, bearing a 3%
In
of
largest part
opportunity of "having his cake and eating it too."
investor
share
1
released
of convertible bonds
convertibility of bonds into stock.
for
Thursday, March 23, 19-50
through March 31, 1950. Some of
now
because of
CHRONICLE
these bonds have meanwhile been
By THEODORE PRINCE, LL.M.*
Mr. Prince, in discussing the new issue
FINANCIAL
written at par by the bankers,
subject to the stockholders sub¬
scribing for them at the rate of
So. Pac. 3's of 1960—Convertible
Investment
&
Associated Banks:
Williams Deacon's Bank, Ltd.
Glyn, Mills A Co.
publi5hed in ^
36
Volume 171
Number 4892
THE
COMMERCIAL
r
&
FINANCIAL
CHRONICLE
Dealer-Broker Invest¬
Electric
ment
Output
Carloadings
By A. WILFRED MAY
Auto Production
Industry
It
is
understood that the firms
mentioned will be pleased to send
interested parties the following
literature;
Business Failures
J
the key to increased industrial output the past week.
As coal stocks
piled up over-all production for the country as a
whole reflected a slight advance above the level for the similar
Annual Reports—Review of the
1949 annual reports of a
group of
companies in most of the major
week of 1949 for the first time in some months.
industries—Eastman, Dillon
Coal
was
15
The extent of the recovery of the nation's soft coal mines was
quite marked following the setback suffered by the industry in
the recent coal strike.
To
illustrate
the
tion in the week ended
the week before
March
aged
little
a
strike, soft coal output
million tons weekly.
over two
a
little
over
million tons
seven
of
the
mines
operated
full
a
five-day
In
*
rate of 95.5% or the
highest level since the week
from
ment
which
the
coal strike
setback.
well continue into
They
a
see
as
Railroad
cussion,
week
a
as
production
result
a
of
*
In
expansion
the
Overland
market
issue
same
the
contributed
also
to
the
let¬
lists
are
firm
of
considers
In
the
Union, it
week's
Wall
Street, New York 5, N. Y.
•
Pelz
&
Co.,
40
Exchange
Place, New York 5, N. Y.
Amerex
<s
of
matter
pensions
the United
Automobile
76
revealed
in
the
details
of
an
agreement
the
between
123 South Broad
they reached last September. The agree¬
specifically permits Ford to reduce the payment if social
security benefits rise. Earlier last week, the Union signed a con¬
of these plans are readily
on the score of
dreamy idealism
political motivation, a brand-new proposal far and widely sur¬
passing the others in scope, is now being unabashedly put forth
by a sophisticated corporation lawyer, as developed in consultation
with
&
Co.,
Street, Philadel¬
Oil
Co.—Annual
report—Continental
Rockefeller
Co.,
10
Plaze, New York 20,
ysis—Batkin
is
"The
as
&
Co.,
30
Broad
great as it has been for many
Walt
Age," national metalworking
weekly, in its current summary of the steel trade. Although it
was harder to obtain steel during the strike last October or during
coal
to
crisis last
greater than it is
now.
the
of
second
What
true
believed
half
This
the
will probably
pressure
users
ease
was
no
off during
year.
today.
Disney
cular—William
209
■
South
La
Productions—Cir¬
A.
Fuller
Salle
&
Street,
War
during the steel strike last October appears to
During the coal crisis last month steel people
some
orders
on
their
books
were
a
Continued
hedge against
on
page
endorsement
Production Board.
the
United
Nations.
is
It
all
spelled out in detail in
Co.,
cago 4, 111.
—in installments of $20 billion per year
Javits
conceives his
New York:
during the coming half-
and
measure our
our
high
own
credit and the
vast
lending program as an investment
credit," he says, "And we owe in
good society of free enterprise and democracy
"Investment
States has
means
living
standards
to which
uses
been
it has been built
built
on
the
to
invention
have put it. i
we
credit quite
Constitution.
.
on
the
.
as
of 'paper'
Economically the
much
causes
Investment
for
practicality
.
of anarchy, violent revolution and war."
Mr.
Javits
makes
investment for
obeisance
as
productive
to
the
purpose.
need
Our thesis
is:
"Debt
Equitable
only," on which he elaborates
follows: "No great business enterprise has ever
prospered with¬
constantly going into greater and greater debt, even if that
was in the form of common stock or
equity money.
It
is up to us as the only alternative toward chaos and the
probable
'debt'
extinction
of the human
natural resources,
a
invest
to
race
and
invest
again in the
in the human skills, and in the strivings toward
free man's freedom among other peoples.
On a scale hitherto
beyond imagination, we must provide money, machinery,
engineering and managerial talents from Philadelphia to
Paris, from Chicago to Calcutta, from New York to Nanking.
only when we foster industrial development on this massive scale
can we raise living standards both at home
and abroad," concludes
On
major premise that existing plans for helping the
inadequate, Mr. Javits maintains that we must fearlessly
increase in geometric progression our capital-extension in all areas
of the world, to prove to undecided populations that
capitalistic
democracy can provide the means of good living better than can
communism,
Life
i
The Dollar
Assurance
So¬
author.
dollar
But
peace, our
is
the
unless
vs.
the Bacteria Weapons
universal
we
use
monetary
our
economic
unit
today, says
to insure
power
Continued
on
page
Continued
on
page
58
are
pleased to
announce
the association with
us
of
MONTGOMERY
and the opening of a New York office at
49 Wall Street
$150,303,503.98
MR.
22,250,000.00
will be in
J. FRANCIS ECKSTEIN
charge of
174,342,742.98
our
trading department.
Interstate Securities Corporation
TWO
BRANCHES
IN
THE
largest Savings 'Bank
in New
Member Midwest Stock Exchange
CITY
The
ember Federal
;
Deposit
Insurance Corporation
the
the
planet will be dissolved into motes of atomic dust drift-
dent's Report to the Board of Di¬
N.J.
„
the
under his management.
1,
.
world are
rectors—Equitable Life Assurance
Society of the United States, 393
48
Office: 764-768 BROAD ST., NEWARK
by
and
purposes
out
February 28, 1950
xM-ain
politi¬
as,
\
by
of credit in today's world is more than an economic method
for enlarging man's ability to produce. It is also an expression of
faith in his ability to banish want and insecurity, those primary
t
means
Chartered 1857
Total Assets
cur¬
century.
The
Savings institution
Deposits
a
BENJA¬
Dwarfing the McMahon thesis, Mr. Javits wants to buy pros¬
perity and peace everywhere in the world for two trillion dollars
MR. HALE L.
Surplus and Reserves
The
Funk and Wagnails Co., $3.50.
We
T be Moward
of
A United Nations World Book. 242 pp.
Chi-
ciety of the United States—Presi¬
true
was
that
Iron
month, the pressure from steel
the
his credo.
Walt Disney Productions—Anal¬
Street, New York 4, N. Y.
according
carries
lawyer is Benjamin Javits, prominent New York and Washington
attorney; the business man is Charles E. Wilson, President of the
General Electric Company and former executive
head of the
.
Oil
N. Y.
AT
This week steel demand
of the nation's most hard-headed and wise business lead¬
one
and
ers,
almost
Continental
which the company will pay seven
95.5% OF CAPACITY—HIGHEST
SINCE WEEK OF APRIL 11, 1949
months,
Whereas many
and
hour into the pension fund without change during the
life of the agreement.
SET
Corp.—An¬
Colket
phia 9, Pa.
per
OUTPUT
May
.:
Credit-Away Program
...
alysis—Penington,
tation of the settlement
STEEL
Oil Co.—Special
Roland & Stone,
Street, New York 5,
Bingham-IIerbrand
the
company on interpre¬
ment
tract with Nash Motors under
Beaver
being promulgated.
Mr. James Warburg,
"investment" to help all nations, in¬
citing the test of productive
N. Y.
employees' pension fund without change, even if
the benefits provided under Federal social security are increased.
it is
or
Corp., 120
report—Model,
worker into the
United Automobile Workers Union and
Hanseatic
Anglo-Iranian
Workers
was
was
Holding Corp.—Report
Broadway, New York 5, N. Y.
*■
as
town,"
discountable
United
ley
—New York
to
*
Airfleets, Inc.—Analysis—Stan¬
a
learned last week, has for the present suspended its
effort to require the Ford Motor Co. to pay 8% cents an hour per
be
Wilfred
A.
large
above the 53,000 record set last July.
#
Administrator Hoffman, now
merely "odd-lots" in the world in¬
The Newest
operation.
Steel Stocks—Analysis of out¬
look—Distributors Group, Inc., 63
weekly pro¬
duction record could have been achieved the past week had it not
been for the Chrysler strike.
The company's plants, it added,
would have contributed some 35,000 units, bringing the total well
the
national
cally
Reports" points out that
ECA
cluding the Soviet.
specu¬
lation.
»
"Ward's Automotive
cents
Bonds—Dis¬
which
gains.
This
Income
monthly
con¬
But those
rently-issued book:—"PEACE BY INVESTMENT."—By
past
Saturday work in Ford assembly plants and
the various divisions of General
Willys
Corp.
Street,
interesting for income and
further
step-up in daily schedules by
Motors
in
the
stocks
*
showed
Pine
30
ter— Goodbody
&
Co.,
115
Broadway, New York 6, N. Y.
'
*
Automotive
Co.,
the
Loan,
widely-heralded plan calling for our ex¬
penditure of $50 billion during the next five
years in a "stupendous" new program of inter¬
MIN JAVITS.
summer
various directions.
Calls—Booklet—Filer,
&
New York 5, N. Y.
movement
a
by
to be
com¬
industrial
British
his
12
Street, New York 4, N. Y.
Puts and
temporary adjust¬
it
up-to-date
an
extending
the
Bank, aroused
outlay of $9 billion; the Public Affairs Com¬
mittee wants $500 billion spent over 50 years;
and Senator Briem McMahon has broached
1949.
over-the-counter
Schmidt
in view of tighter supply
conditions and expanding requirements of manufacturing industry
may
showing
Front
specifications have spurted.
It also notes that
stronger demand affects virtually all products. Even slow moving
items, such as plates and shapes, are under increased pressure.
Demand improvement has attained a point where some market
trend rather than
Dec. 31,
the
Quo¬
Bureau Averages, both as
yield and market performance
over an eleven-year period—Na¬
tional Quotation Bureau,
Inc., 46
ment, consumer
a
ated
seem
"Going
results
for
to
Commenting on the steel market, "Steel" magazine states that
is definitely bullish, pointing out that in the wake of
the sharp snapback in steelmaking following the coal strike settle¬
as
operating
Stocks
for
as
economist and banker, has proposed the annual
tabulation
a
stocks used in the National
sentiment
regard it
is
tation
April 11, 1949.
authorities
Insurance
five
keeping with higher coal output steel production rose the
over 16 points to 89.8% of capacity and this week it
a
5,
industrial stocks used in the DowJones Averages and the thirty-
10,682,000
past week
is scheduled at
available
such
ability to foot the bills.
over our
parison between the thirty listed
*
.
63
devices
earlier "lavish" programs, as well as the mere
hundreds-of-millions of dollars being negoti¬
1949—Geyer &
Wall Street, New
preliminary
let
tons.
*
misgivings
Over-the-Counter Index—Book¬
week.
week—was
siderable
Analyzer—Tabula¬
months ended
Production of soft coal in the corresponding week last year—
when
Inc.,
for
aver¬
When UMW members
a
Stock
Also
13,200,000 net tons.
Output
The strike ended on March 6.
on
various
the Marshall Plan and even the International
& Co.,
York
the
help abroad,
postwar
of Dec. 31,
as
Co.,
three-day week during the recent coal dispute, output
a
averaged
were
New
inception
States
York 5, N. Y.
bituminous produc¬
at
3,075,000 tons.
was
When UMW members
worked
11
Street,
their
United
vestment market
Bank
tion
scope
Coal Association estimated
Broad
The Credit Crusade Goes Into High Gear
At
N. Y.
of its progress more than 13,000,000
tons of soft coal poured from the pits in the week ended March 11.
The National
Observations...
and Literature
Commodity Wee Index
Food Price Index
and
Recommendations
.
Retail Trade
Stale of Trade
in
5
Steel Production
The
of
(1197)
CHARLOTTE, N. C.
Telephone
Teletype
HAnover 2-8446
NY 1-3544
50
,
6
THE
(1198)
Chairman
The Fieai Bill: A Trap to Ensnare
Little Bnsiness for Big Business
By THOMAS GRAHAM*
i
President, The Bankers Bond Co., Inc., Louisville, Ky.
Chairman, Investment Banking Committee,
Conference
of
American
Asserting there is
Business
Small
unregistered securities
as
.
is for protection of investors in
measure
SEC contends.
pand SEC regulations beyond
Says bill would
of interstate
scope
and is therefore invasion of state control.
ex¬
commerce
merous
confounding to those of
cial,
contributed
spiritual
and
us
finan¬
our
an
physical
support to the Democratic Admin¬
istration
in
"bill
the
is
small
businesses
view
of
declarations
the
of
Administration's
dedication'
of
to the cause of small business and
I
its
ultimate
are
fighting to
from
Wall
considerations.
security holders,
though such securities
not transacted
on
were
the national
se¬
curities exchanges.
Street.
For
small business and
principal
sup¬
porters
are
many
Thomas Graham
that
the New York
Stock Exchange, New York Curb,
and other organizations dominated
the
Frear
will
damage.
ing
and
The
SEC
would
have
the
of life and death
power
We
it
is
This is
not
Bill,
The
in
America
if
enacted,
Senate
Currency
amendments
and
merce
Senate
Committee,
stance
of
and
which do
Organiza¬
tions.
bill
Allen
operating
or
bor¬
assets
on
for example,
actual
expand¬
was
from
company, could
an
in¬
be called
to
accounting by the SEC. Without
actually selling a share of stock on
stock
of
ers
securities.
or
require by statute that it be
furnished, but where it is not so
required,
courts
held that the
the
to
reasonable
however,
uniformly
common
right
to
it,
companies
national
Kentucky,
there
many
are
quate information before he buys.
enterprises formerly exempt
from SEC regulation which would
under
come
would
SEC
burden
control.
them
This
with
addi¬
There is
lation
SEC's
motive
is
furnishing the SEC with informa¬
for
tion
curities.
ability
would
to
weaken
compete
with
their
need for such legis¬
Frear Bill, if the
is
The
pure.
needed
achieve
to
investors
in
Frear, Delaware Democrat,
on
Common Stock
share
Rights, evidenced by Subscription Warrants, to subscribe for these shares have been
issued by the
Company to holders of its Common Stock, which rights
expire April 5,1950, as more fully set forth in the Prospectus.
1
Subscription Price
establishment
against
expected
an
to
defend
Soviet
Could
it
Copies of the Prospectus may be obtainedfrom the undersigned only by persons to whom
undersigned may legally offer these securities under applicable securities laws.
the
are-pure
pretensg?
possible that two mental giants,
be
a
secret agreement
to
country as a means of
holding their own people together? Oi; is it
that the Administration is
just as innocent of
the Republicans'
charges as a new-born babe,
that the Republicans are motivated
by desperate political expediency and
nothing else.
1
CariuiA Rar0pm„
Carlisle
Bargeron
** certainly
seems
set_upg
presented to
eyer
like
one
a
of
share
ourselves
attack
hokum and that the bitter
exchanges between
the
two
governments
are
mere
Truman and Stalin, have
use fear of the
other
to Warrant Holders
per
the
J
■
The fact is that none of these propositions
is true.
It is simply that a.
wierd, almost unbelievable situation
does exist. The
Republicans have plenty of basis for their
charges.
Whether Senator
McCarthy's charges would stand up in
court, if
he were permitted to
develop them, I am not prepared to say.
The truth is that he is
being hamstrung at every turn and
.
The First Boston Corporation
.
Goldman, Sachs & Cc.
Merrill
'
»
Eastman, Dillon & Co.
Glore, Forgan & Co.
Kidder, Peabody & Co..
Lazard Freres & Co.
Lynch,.Pierce, Fenner & Beane
Stone & Webster Securities Corporation
Union Securities Corporation
Brush, Slocumb & Co.
White, Weld & Co.
Elworthv & Co.
First California
,
heaped with denunciation by leftist
commentators'and editors just
as
before
everyone
years
ment
were
charge^
the
has
met
and
the
been
treated.
For
almost.! 15
charges
until
a
communist
involve¬
few years ago the
charges
property
and
of
their
Democrats,
authors
have
with
not
Re¬
invariably
derision.
It is
amazing that even in the face of
the Hiss conviction, the leftist
journalistic chorus
here in Washington and in
New York, never let a man finish
such
things
Schwabacher & Co.
as
Company
Weeden & Co.
Mitchum, Tully & Co.
Shuman, Agnew & Co.
^
"•
"
'
\
W. C. Langley & Co.
Walston, Hoffman & Goodwin
William R. Staats Co.
'
mm
Hemphill, Noyes, Graham, Parsons & Co.
Hallgarten & Co.
m
Lee Higginson Corporation
Davies & Mejia
*
'
•
Hornblower & Weeks
Paine, Webber, Jackson & Curtis
Administration's
have been made and
up
almost exclusively the
publicans,
been
of
him
Harriman Ripley & Co.
Incorporated
Smith, Barney & Co.
screwiest
peQple
Blyth & Co., Inc.
•••'.
y
Dean Witter & Co.
Blair, Rollins & Co.
Central Republic Company
Incorporated
Bateman, Eichler & Co.
Crowell,Weedon&Co.
(Incorporated'
Dominick & Dommick
Hill Richards & Co.
Irving Lundborg & Co.
Lester & Co.
Shields & Company
Davis, Skaggs& Co.
Carl M. Loeb, Rhoades & Co.
Spencer Trask & Co.
Sutro & Co.
his
presentation before
jumping all
over
would be inclined to move
more
istic rewards to.
a
"liberal"
are
him.
You would think
they
cautiously.
high
and
But no, the journal¬
There, is
no
F. S.
There is
no
sham about it.
Continued
He has made
on
page 58
Harris, Hall & Company
r
Moseley & Co.
questioning, though, the Administration's bitter¬
towards Joe Stalin.
Bear, Stearns & Co.
A. G. Becker & Co.
Clark, Dodge & Co.
Incorporated
Drexel & Co.
the urge to attain them
it very strong, indeed.
ness
Wood, Struthers & Co.
March 22.1950.
*
(Incorporated)
Hayden, Stone & Co.
"
Reynolds & Co.
W. E. Hutton & Co.
•
J. Barth & Co.
Pacific
se¬
Courts have held gener-
Continued
larger
safeguards
unregistered
Company
legis¬
SEC
has contended that this legislation
tional expense of maintaining and
and
no
the
as
such
Par Value $25 per
military
recog¬
be
used
unfairly
or
illegally
exchange, or even a against the company by a com¬
exchange, such a small busi¬ petitor. An interested prospective
ness could
be required to submit
purchaser of stocks or securities
to SEC control and regulation.
of a company can always get ade¬
a
by Sen. J.
believe that the spending of billions to "con¬
communism" in Eastern Europe and the
spending of additional billions to maintain a
a
nize the importance of giving out
such information, if it is not to
Pacific Gas and Electric
tain
for
Largely,
purpose.
such
have
law applies
obtain
1,656,156 Shares
The country is
certainly being confronted with a paradox in
the Republicans'
charge that the Administration is harboring com¬
munists and fellow travelers while at the same
time that same
Administration is at ideological or diplomatic war with communists
everywhere else. Is the country to be led to
Most
states
begin to touch -the
is authored
(
operation of such small enter¬
prises is, and always has been,
to prospective- purchas¬
virtual
over
'
local
>
The
three
two or
shareholders which
invest¬
ownership
page
offering of these shares for sale, or an offer to buy, or a solicitation of an offer to buy, any of such shares,
offering is made only by the Prospectus. This advertisement is published on behalf of only such
of the Underwriters as are registered or licensed dealers or brokers in this State.
exemptions
mere
a
only
the
on
would,
•
.
Bank¬
lation.
Mr. Graham's report before the
of Small Business
with
Committee's
real threats inherent in this
Banking and Currency
constituting
the sub¬
Conference
are
not
Thus,
ers.
security hold¬
closely-held business
Louisville
an
The
the."
subcommittee has
been
holding
by New York banking and finan¬
hearings on this bill and some
cial interests; also, the Securities
amendments
have
been
agreed
and Exchange Commission, some
upon
in
principle.
But
these
*A statement filed
by Mr. Graham with
the House Committee on Interstate Com¬
available
In
Control
industry along,
Main Street
a
and
assets, even though that company
might be completely one-family
officer-director
purchases
and
Information
small
Invades Intra-State Field of
"Main Street"
save
Kentucky
ment markets.
among 300 or more
extend
would
small
enterprises
through
dic¬
Those of us who are'
opposed
to the passage of the tating of information required in
Frear Bill, and its companion bill
in the House, the Sadowski Bill,
oppose it not in principle, but in
^B^ji
bur¬
I
legislation
ing
bill
industry.
FTear
and great
The
stock
on
conceivably
This
rowed.
The
sponsored
many
expense
rule
would subject to SEC control any
business with $3,000,000 or more
control.
by the
In brief, the SEC would invade
Securities and Exchange Commis-*
sion,, seems singularly strange in the intra-state field of control.
measure
'
in¬
and
prises having $3,000,000 in assets
goods."
Timeo danaos et dona ferentis.
Such
an
alignment, although
a
for practical purposes, destroy our
great
den to them.
owned, if such a business owed
would •any indebtedness that was spread
It
1933.
-
and 300 or more
sold the Executive Branch of the
government
in
SEC authority over all such enter¬
instru¬
whose membership must have
of
companies.
at
been subject to SEC scrutiny and
even
It is
who have
proxy forms.
It would require
detailed reports from small firms
surance
Sees in bill
capital, and calls
SEC legislation.
for reform of existing
by Represen¬
Sadowski, Michigan
Democrat.
The Frear Bill, and
its
companion
measure,
would
extend and expand the powers of
the SEC far beyond the intent of
the lawmakers when they enacted
tative George
dustries which formerly have not
for strangling arteries of small business
ment
the
bring within the scope of control
and operations of the SEC
nu¬
Louisville investment banker and spokesman for small business
organizations, denies
in
sponsored
legislation
Frear Bill,
as
is
companion
Thursday, March 23, 1950
the so-called "truth-in-securities"
Organizations
need for legislation such
no
House
Its
CHRONICLE
subcom¬
the Senate
of
mittee.
FINANCIAL
&
COMMERCIAL
Company of California
30
Volume
171
THE
Number 4892
COMMERCIAL
FINANCIAL
&
(1199)
CHRONICLE
"
New Issue
$75,000,000
of North Carolina
*
t
'
'
'
'
'
ft
•**<.•
.
'
4
f
Secondary Road
4%, 1 lA% and T/2% Bonds
Dated
-
January I, 1950
Due January I, 1953-70, incl*
.
Principal and semi-annual interest (July 1 and January 1) paj-able at the principal office of The Chase National Bank of the
City of New York
or,
at the option of the holder, at the office
bonds in denomination of
$1,000, registerable
Interest Exempt 'from present
as
of the State Treasurer in Raleigh, North Carolina. Coupon
to principal only or as to both principal and interest.
Federal Income Taxes and Tax Exempt in the State of North Carolina
Legal Investment for Savings Banks and Trust Funds in New York and certain other States and
for Savings Banks in Connecticut and Massachusetts
...
AMOUNTS, COUPON RATES, MATURITIES AND YIELDS OR PRICE
Yield
.
.
$3,700,000
3,600,000
3,700,000
or
•
Price
Amount
Rate
Due
Yield
$4,850,000
l'/2%
1965
1.55%
4,950,000
W2
1966
1.55
.75%.
l'/4%
1959
1954
.85
4,150,000
Wa
I960
1.30% •;
4
1955
.95
4,250,000
Wa
1961
1.35
4,100,000
W2
1967
1.60
4
1956
1.05
4,400,000
Wa
1962
1.40
4,250,000
W2
1968
1.60
Wa
1963
1.45
4,400,000
Wi
1969
1.65
Wa
1964
1.50
4,200,000
Wa
1970
1.70
4
1
Due
Rate
Amount
-,
wmmmmrnti
1953
4%
3,500,000
Yield
Due
Rate
Amount
3,800,000
3,900,000
<
.
$4,050,000
,
l'/4
1957
1.15
4,500,000
l'/4
1958
1.20
4,700,000
@ 100;
-
(Accrued interest to be added)
The above Bonds are
offered when;
as
and. if issued and received by us, and subject to prior sale and approval
of legality by Messrs. Mitchell and Pershing, Attorneys, New York;
Chemical Bank & Trust Company
The Chase National Bank
Philadelphia National Bank
Wachovia Bank and Trust
.
•
'
.
.•
Aubrey G. Lanston & Co.
IraHaupt&Co.
Incorporated
Stranahan, Harris & Company
City National Bank & Trust Company
Incorporated
Kansas City
Laurence M. Marks & Co.
Courts & Co.
W. H. Morton & Co.
National State Bank
Incorporated
Newark
H. M.
«
Ewing & Co.
Mercantile Trust
of
Kansas
\
Provident
of
J. G. White &
Corporation
Mason-Hagan, Inc.
John C. Legg & Company
The
Company, Inc.
Peoples National Bank
of Charlottesville,
Incorporated
Ball, Burge & Kraus
A. Webster Dougherty & Co. *
Company, Inc.
\
Barret, Fitch & Co., Inc.
First Southwest Company
Boland, Saffin & Co,
Paul Frederick & Company
Newman, Brown & Co.
Martin, Burns & Corbett, Inc.
Mackey, Dunn & Co.
Rockland-Atlas National Bank
M. A. Saunders & Co.
Incorporated
of Boston
Incorporated
A. G. Edwards & Sons
Stockton Broome & Co.
Vc.
Starkweather & Ce.
Sills, Fairman & Harris
Schwabacher & Co.
Irx.
Incorporated
Raffensperger, Hughes & Co.
Company
Incorporated
Incorporated
Goodbody & Co.
Glickenhaus & Lembo, Inc.
Clement A. Evans &
Darby & Co.
J. Lee Peeler &
Wood, Gundy & Co.
Company
C. F. Cassell &
Inc.
Minneapolis
Incorporated
Bramhall, Barbour & Co., Inc.
Tripp & Co.
\
Incorporated
Cincinnati
Vance Securities
Dominick
■
Ketcham & Nongard
Kaiser & Co.
Ryan, Sutherland & Co.
Savings Bank & Trust Company
&
*
Northwestern National Bank
Company
Company
Roosevelt & Cross
'
■
Dominick
City
Co., Inc.
•
Burr & Company, Inc.
Folger, Nolan Incorporated
Baltimore
Stifel, Nicolaus & Company
Incorporated
Commerce Trust
•
Allen C.
Hirsch & Co.
Fahey, Clark & Co.
F. S. Smithers & Co.
Wm. E. Pollock &
of Memphis
Andrews & Wells, Inc.
Tucker, Anthony & Co.
Trust Company of Georgia
The Robinson-Humphrey Company
F. W. Craigie & Co.
Byllesby and Company
The First National Bank
Company
Smithfield, N. C.
(Incorporated)
,
Otis
& Co.
(Incorporated)
(Incorporated)
(Incorporat
First-Citizens Bank & Trust
A
,
William Blair & Company
G. H. Walker & Co.
„
Otis & Co.
Carl M. Loeb, Rhoades & Co.
V
■
Harris, Hall & Company
Allyn and Company
Paine, Webber, Jackson & Curtis
The Marine Trust Company of Buffalo
Higginson Corporation
.
Merrill Lynch, Pierce, Fenner & Beane
A. C.
C. J. Devine & Co.
\
Equitable Securities Corporation
•
Winston-Salem, N. C.
.
Lee
'
■
Hemphill, Noyes, Graham, Parsons & Co.
Company
Blyth & Co., Inc.
Harris Trust & Savings Bank
.,
; 1
Union Securities Corporation
Y
The
N. Y,
Ginther & Company
'
~
Hall & Company
Wheelock & Cummins
Security National Bank
Greensboro,
N. C,
Incorporafed
Lyons & Shafto
Granbery, Marache & Co.
Incorporated
D. A. Pincus
Jones B. Shannon
Roe & Company
Reinholdt & Gardner
& Co.
& Company
Shaughnessy & Company
Walter Stokes & Co,
H. V. Sattley & Co., Inc.
Suplee, Yeatman & Company, Inc.
R. C. Schmertz & Company, Inc.
R. S. Hays & Company, Inc.
'
New York,
March 23, 1950.
.
I
i
7
8 ;
(1200)
THE
COMMERCIAL
cil
The Problem of Old Age
made 22 recommendations for
On 20 of these
recommendations the Council
principal parts.
First of all,
wish to explain to the members
of the
Finance Committee
Finance
why
the
Advisory Council believes that
contributory social insurance re¬
contributory social insurance, related to prior earnings without
a means test.
Holds present system is not adequate, due to:
(1) many who need protection are not receiving it; (2) the
average old-age pension is inadequate and has not kept pace
with rise in living costs; and (3) pensions granted are not
adjusted to earnings and living standards of recipients. Points
be
of
means
lated
to
the
prior
earnings ought to
foundation
of
the
coun¬
try's system for old-age security.
In the second place, I wish to ex¬
plain why the Council believes
that the present
third
preventing premature retirement of workers.
plain
why
that
the
Council
improvements
the
along the lines indicated by its 22
of
recommendations
work
day
of the
Advisory Council on
Social Security, appointed by the
Committee
on
Finance of the
United
States
about the
the
1947.
Its
age
recom¬
and
on
and
sur¬
Milliken, the then Chair¬
were
1948.
sent
of
social
related
old-age
insurance
to
prior
That
the
present
Old-Age
Insurance
Act
is
Survivors'
Insurance
Act
is
in
principle, and that its
failure to do the job expected of it
is attributable to three principal
defects in the act, all of them
easily remedied.
Finance,
Between
a
test.
Survivors'
sound
to
De¬
cember, 1947, and April, 1948, the
In order to remedy the defects in
"Statement of Professot Slichter before
the Senate Finance
Committee,
the
Washing¬
ton, D.
reached
concern¬
failing to perform adequately the
job that it was expected to do.
(3) That the present Old-Age
Washington
of the Committee
8,
problem
benefits
(2)
and
coun¬
Senator
April
the^Coun-
Council
conclusions
contributory
with
life and
insurance
on
the
means
vivors'
man
On
earnings and awarded without
in
old
Advisory
basic
ing
the
security:
of
Council
The first full meeting of the
on
Committee.
various walks
of
Dec. 4 and 5,
memo¬
by the staff and
members from
from different parts of
mendations
analyzing
(1) That the foundation of the
y
C., March 20,' 1950.
act
ing of this problem
old-age security.
-
Old-Age
surance
and
Survivors'
country's system of old-age
security?
' 1 •
17 members of the Council
—employer members, labor mem¬
bers, and public members—were
I
going to talk with you to¬
about
ouiv
foreign
policy
Asia.
Since my time is
short, I must stick to the main
am
This is not
country's
system of old-age security.
Fur¬
thermore,
the
same
conclusion
by
advisory
on\
t i
helped
Security
the original
draft
1935
and
the
Council appointed in
Advisory
1939.-
There
four
n
to other
free
^nations
should
reached
the
conclusion
system
that
of
a
old-age
pensions should be the foundation
attitudes
oferi ng of these sharesfor sale, or an offer to buy, or a solicits tion of an offer to
buy, any of such shares.
offering is made only by the Prospectus. This advertisement is p ib isned on
behalf of only such
of the Underwriters as are registered or licensed dealers or brokers in this State.
and
Dean G. Acbeson
are
interested
in
anything
deny them
any
opportunity,
our
them fo
ambitions in
We
want
to
•
■
can
earnestly
to Warrant Holders
must
do.
Copies of the Prospectus may be obtainedfrom the
undersigned only by persons to whom
Ihe undersigned
may legally offer these securities under
applicable securities laws.
we
our
of
(Incorporated)
American Securities
25,1950.
is
McDonald &
out
best
proclaim
intentions.
important that
clear
reflections
It is vitally im¬
muddied
or
emo¬
purposes.
that
thinking should not result
in equivocal and mistaken courses.
may
know that
such
actions
spring from good hearts, but con¬
fused Blinking.
To others they
will be unmistakable proof of ul¬
terior
doubt
Company
we
tional
We
Hallgarten & Co.
are
not
which
pours
our
vitally
actions
our
and
will
always spoken
Today, amid
distortion
actions
we
of
purposes.
And
that there will
be
have
no
no
lack
willing tongues to further that
The end result will be
message.
Corporation
Bacon, W hippie & Co.
March
it
portant
xMerrill Lynch, Pierce, Fenner & Beane
have
propaganda
us,
others
but by what
of
purpose
But
Maynard H. Murch & Co.
the
loss of the priceless asset we
have—the confidence of hundreds
of millions in
Henry Herrman & Co.
our
is
of
tion.
These
address
integrity.
delivered
by Secretary
Acheson,. before the Commonwealth Club
of
California, San Francisco, Calif., on
March
15, 1950; followed by a second
address
made at the University of Cali¬
fornia, .Berkeley, Calif., March 16,1950.
of
The first of
is
second
foreign
ideas
re¬
domina¬
meet
fuse
and
the
positive conception of na¬
tional independence.
This is both
the symbol of
means
by
achieved.
The
aspirations and the
which
desire
pendence
they
for
is
national
the
be
may
most
inde¬
powerful
spontaneous force
in Asia today.
It
tie
is
the
diverse
common
peoples
between
them
of
and
the
among
Asia,
the
free
the
tie
peo¬
ples of other countries, including
the United States.
Since the end
of the war, more than 500 million
people have achieved national in¬
dependence
—in
the
and
self-government
Philippines, India, Paki¬
Ceylon,
Burma,
Korea and Indonesia.
of
Indo-China
along this
with
the
Southern
The people
also
are
a
new
ship expressive of their
tional
moving
road, developing
same
French
relation¬
own
na¬
aspirations and resting se¬
curely
on
sent.
We
ment
and
future
as
basis of mutual
a
this
welcome
shall
con¬
develop¬
continue
in
the
in the past to encourage
it.
In
China the
ings
a
strong long¬
have reached
same
the people
of
different end.
Since before the
overthrow of the Manchu dynasty
in
1912,
the Chinese people
also
have striven for freedom from in¬
fringement
and
for
lives.
on
their sovereignty,
improvement of
their
For
they
years
struggled
with unbelievable courage,
ance,
endur¬
and patience against the ad¬
versities
of
in¬
against
nature;
ternal
division
and
strife;
and
against foreign enemies, until the
end
of
the
seemed
to
bring
the
hopes
for
which they had been striving.
almost
war
within
achievement
Then. the
*An
up
against misery
The
against
-
pow¬
made
the normal condi¬
as
life.
vulsion
in
is
revulsion
poverty
stan,
atti¬
intentions
words.
So
Lehman Brothers
that
our
the
about
they
without
any sort.
say
welter
our
this
say
and
we
and
lives in peace.
louder than
our
we
that this is
Actions
hostile
Blyth & Co., Inc.
free and produc¬
understand
judge us
by what
containing
population of
movement, that
conviction,
tion
not
peoples of
will make
desire
a
our
know
and
the
in which
live out
We
$28.75 per share
Carl M. Loeb, Rhoadcs & Co.
do
any purpose
their
what
qualification of
Ha>den, Miller & Co.
any
owiji way.
this, because we
do
that
tive world
tude
Central Republic Company
to
own.
for the kind of
,
We
.*
for
want
the
believe
Rights, evidenced by Subscription Warrants, to subscribe for these shares have been
issued by the
Company to holders of its Common Stock, which rights expire
March 29,1950, as more
fully set forth in the Prospectus.
Incorporated
not
right.
any
and
Asia
A. G. Becker & Co.
them
do
use
of
contrary, we want to
help them, in any sensible way
we can, to achieve their own
goals
(Without Par Value)
Ilornblower & Weeks
from
We
On
Common Stock
Subscription Price
peoples
ourselves.
want to
The Glidden Company
,
the
we
We want to help
We do not want
people.
as
know that
we
people.
take
to
the
dominant ideas.
these
as
concerned,
of
/.
erful
two
as we
freedom,
178,535 Shares
Now that
of
are
them
region,
half
deep and revolutionary move¬
peoples of Asia.
a
they exist.
as
great
new
a
in Asia. That
course
ment of the
peoples on
sides, and
Asia
New Era
a
change,
both
in the facts
in
the reason the change is irrevoc¬
able, is that it is brought about by
the
fundamental
facts
the world, is changing
profoundly.
The significance of that
be
in
rooted
peoples?
basic
.
than
more
na-
principal reasons why the
Advisory
Council
of
1947-48
the
whole
in rela-
o n
t i o
-
•
Asian
the
are
is in full
era
the
free
a
-
the
'We must understand that
foreign policy
councils—the
Economic
all,
that
you
Asia?
remind
me
what
the fundamental
are
of
Asia in
First of
of
of the
what
And
two
each
Now
attitudes
let
an
The
40
in aggression against
toward
be the foundation of the
reached
must not engage
day
So far
>
page
Nations, and upholds a positive
in dealing with Russian aggression. At University of
California talk, he lays down formula for
ending cold war
with Russia.
thread.
In¬ ^contributory
Plan, the Advisory Coun¬
amount of
on
program
unanimous in believing that con¬
tributory social insurance should
are
the
Continued
within framework of United
of the
of
by
man
diminish
neighboring countries. Says U. S. is aiding in solving problem
of free peoples of Asia, and cites economic and
military assist¬
ance
already given and in process. Commits U. S. to work
the cost of
on
■
Communist China
warns
prior earnings be the foundation
law
A
not
Secy. Acheson, after exposing Soviet Russia's intentions in
denouncing violation of China's integrity by treaty,
should Federal contribu¬
social insurance related to
which
them.
does
self-reliance
discouraging
being thrifty
China and
Why
devious
encourages
thrift instead of
Secretary of State
of workers and to show the bear¬
Council
surance
and
in
become the foundation
to
briefly the problem of pre¬
venting the premature retirement
was
in¬
By HON. DEAN ACHESON*
country's system of social
security.
Finally, I wish to dis¬
The
for
place, old-age in¬
Policy and
enable
the
tory
work,
United States-Soviet Tension
cuss
country's system of old age secur¬
ity ought, to be a Federal system
Advis-
the
of
would
charity
upon
In the second
a tax on payrolls paid
the employer and a tax on
wages paid by the worker.
Hence
Oar Asiatic
of
should be
men
come.
by
11
The
rec¬
amount
of the 17 members at¬
average 15
three
consisted of 17
on
work
prepared
Interim
large
a
ommendations
o r
held
home
randa
did
of the Council.
The
was
of
Council
the
1,
questions
/our
Council
the
cil.
14
full
meetings.
Between meetings the members of
of Senate Res¬
answer
one
Council
tended each meeting of
and to
try.
for
Senate, 8 0th
Congress, un¬
der
authority
olution
Prof. S. H. Slichter
between
met
production
own
lifetime
a
right that
dependent
the form of
act
My purpose in appearing before
you
is to report to you on the
Council
worker's
believes
in
it is not
contributory insur¬
are not charity.
No
is used/ but pensions
shown considera¬
are
After
a
awarded as a matter of right.
Furthermore, the cost is met from
the
ex¬
Council met for two full days each
month and an Interim Committee
the
test
pensions
are
Old-Age and Sur¬
place, I should like to
tion.
the first place, the
means
dignity and the self-respect of
the worker
provided by
ance system
vivors' Insurance Act is not doing
the job expected of it.
In the
-
the
old-age
security.
I
Professor Slichter, reporting conclusions of Advisory Conncil
of Senate Finance Committee, advocates a Federal
system of
out
of the nation's system for
In
four
Security,
Thursday, March 23, 1950
was
My remarks will be divided into
University Professor, Harvard University
on
CHRONICLE
unanimous.
Associate Chairman, Advisory Council on Social
Senate Committee
FINANCIAL
changes in the act.
SUMNER H. SLICHTER*
uy
Lamont
Security
&
their
of
grasp
the
failure
of
their
gov¬
ernment to
its
respond to their needs,
ineptitude and blindness de¬
stroyed
*
all
their
confidence
and
*
Continued
on
page
54
Volume
171
THE
Number 4892
COMMERCIAL
FINANCIAL
&
CHRONICLE
'
'
the
Merchandising Securities
the
rules of
Exchange.
He
expelled
was
later,
At Merrill
Lynch
guilty
of
these
in
By ROBERT A. MAGOWAN *
were
the
same
Both
of
Member, New York Slock Exchange
the latter
that we
Commenting on objectives of the "Welfare State" as expressed
by Senator Hubert Humphrey, Mr. Byfield calls it Socialism
"by the back stairs." Lists as components of its price:
(1) irresistible bias toward inflation; (2) government manip¬
ulation of money market; (3) stifled initiative and govern¬
ment regimentation; and (4) liquidation of local self-government and concentration of power in Washington.
beloved
our
partner here in Philadelphia, Joe
Mr. Magowan, Division Director of Sales, in
ties
Wear.
describing securi¬
of
dealing in
securities, points out value of advertising and sales promotion
in maintaining and enlarging business. Stresses importance of
dissemination of educational literature among public and keep¬
ing them informed of developments in securities. Holds public
desires knowledge regarding investments, and contends adver¬
tising is one of most useful tools in bringing in new customers.
merchandising
as
practiced in largest
concern
about
tion
advertising,
and
the
sales
morning
promo¬
merchandising
of
worthy of
on
business
at
the
outset
In
these
jects
rived
just
in
est
de¬
in
great
realize
that
firm, with;
58
general
and
the
coun¬
try,
has
little
them,
on
Robert A. Magowan
outward
similarity to
not
such
stems
itself, advances."—
Emerson, Journals VII, p. 205.
chain
In
He
stores.
interest in
early
associated
was
he
gained recognition
as
about chant himself. He had
or
in
influence
in¬
so
timately with that industry
,
and
even
downright -failures. - The
most
serious failures, as we look back
all
scattered
over
^
im¬
over-satisfied
frustrations
ments,
offices
100
banker
your
of
establishing
mer¬
chandising policies in several of
these
as a
the
The
ink
firm that
any
may
were
the
human
ones.
hardly dry on
partnership
agreement
first
be represented in
was
when
1940
of
one
we
some
o£ the
have learned, some
—7
,ddress
our
our
in
to
partners
have -violated
Merrill Lynch
of
merger
Pierce
A.
Co.
&
Cassatt
firm
another firm
started
in
have had, are
menced
1820.
in
Mr.
Masowa„
:
Bankers Association of Amer-
ica, Philadelphia, March 8, iSso
will
You
was
dented
were
offering of these securities for sale, or as an
as a solicitation of art offer to buy, any of such securities.
offer is made only by means of the Pr ospectus.
.
circumstances to be construed as an
offer to buy. or
The
that
remember
period of almost
a
volume
low
1939
the
on
losing
money,
The
decade
1940
was
a
was
What
S.
Robert
Byfield
w
between
difficult
1930
one
our
governm
i
of
on
•
nni
fi
There
subtle.
all
a
1
i
_
is
more
in
walks
which
stairs.
State"?
"Welfare
state"
is
new
a
phrase for an old theory of gov-
officials
assume responsibility for
material welfare of the peo,
^
attractive sales ar-
£ument
is lhat it pl0mises peopie
security." It removes
«economjc
from them the necessity of worrying about their personal finanexoiaxn how
The best way to
people live under the
*
i'a/m ^1/vitii oW
L
•
a
the
Is
"welfare
Si; lie™ cial problems.
£
the *socializaLo
__
50 ernment takes
page
people
and the
nt. I
th
our
rendered
The
under which the gov-
incomes
_
Continued
and
modernized
and
for
of
?!?^1?:..a„nd^"k0".^Uar,lgeL„tk
technique of socialism has been
exception.
ones
ernment under which government
uepe
history
Political
foim of
and the firm
no
socialism
small steps up the rear
vmous^forms of soc a
rfimacferistkslvhich
their
Among
known
planneJ
:door"
culiar to the genius
New
labels.
well
in
new
society," "a man¬
aged
economy" or "a
directed
u eeonomy "
We must likewise distiuguish between "front door" so¬
cialism
which
boldly walks
in
under its right name and "back
tain cnaiacteristics whicn are
unprece¬
such
are
"a
as
there
Exchange. Most firms
of E. A. Pierce
no
we
misleading
them
acquired
pre¬
States,
com¬
modern
our
belore
York Stock
This is under
But
and
<"
Germany
war
/r
acts
socialism
with
them have likewise
and the United
Haus¬
Gwathmey which
was
as
and
1886,
which joined
France,
yrelated
be the end rather
;
bottles
The
capitalisms of
the En gland,
course,
actually
Hausman
A.
man
Of
It may
'
the
in
ences
Co.
&
series o(
a
:1 action.
with E. A. Pierce & Co. and with
history dates from 1940.
by
of Jhe Eastern Pennsylvania Group of the
r e investment
,
.
the experiences we
discovered
was
this room.
Still, I believe that
al
Jast of
nr
■i than the beginning of a chain re-
of
o
lessons
i
moves.
or
means
the
means
ThiJ vn^nf cnrHallcm
as^sThis
socialism o
nationalization may be the very
type
which the
the
factories
distribution organiza¬
mass
which
socialism
e
government
owned
there is the classic type
thirdly,
Socialism
or so ago
of national economy in
mer¬
a
generation
would have been defined
that
profound
a
a
decisions
government planning, and
as
textbooks
science
social
for
Ther^ is the so¬
economic
of
I
it
spends
and
others.
cialization
name
the
income
and
you
or
his
from
for any member of my
to .feel
investment
an
"Every reform is only a mask
under cover of which a more
terrible reform which dares
:
my
partners
your
seem
much
great many businesses you
a
anything that tions and it was the knowledge p r oduction.
has happened in the past. For one acquired in that business - which ; Today
this
)thing it is a sobering thought to 'became the foundation for our would be a
<wake
up
in the morning and present policies-at Merrill Lynch, > c o n f u s i» n g
realize that we must take in over Pierce, Fenner & Beane. ■ .•
over-simplifi¬
Our firm as it is presently con¬ cation. Just as
$70,000 each business day just
are
to break even. Furthermore,' we stituted actually commenced op- t t h e r. e
have had our share of disappoint¬ ferating April 1, -1940—with the; great » differ¬
industry. And
I
so
Merrill
complacent» about
firm
one
this
talk
I
reason
firm?
from
experience
if
not
touch
this talk.
to find an _outstanding
personality. In Merrill Lynch that
personality
is
Charlie
Merrill.
Most of you know that his success
MLPF&B. There is not the slight¬
sub¬
are
will
it
later in
examples
will
apt
are
regardless of its size.
hope
modest
that my views
on
I
little
a
Charles
consideration and
possibly be adaptable to
may
securities, I want to make it clear
your
other
are
frustration which I
as
In speaking to you this
There
Being Socialized
By ROBERT S. BYFIELD
page
mourned the death of
Members of the New York Stock Exchange
was
duly recorded
Annual Reports,
on
one
partner
defalcation.
a
events
our
incident
Partner, Merrill Lynch, Pierce, Fenner & Beane
another
How America Is
and
resigned from the firm and,
year
t
Curb
York
New
9
(1201)
Continued
major share of
r\rv\
k /
hrxrt n a
52
on page
March 22, 1950
MEW ISSUE
This is under
no
circumstances to be construed as an
400,000 Shares'
offer to buy,
any
offer to buy, or as a solicitation of an
only by means of the Prospectus.
offering of these securities for sale, or as an
of such securities. The offer is made
1
March 22, 1950
NEW ISSUE
Texas Utilities Company
$60,700,000
Common Stock
Province of Alberta
Without Par Value
(CANADA)
Debentures
Price $25 per
share
Copies of the Prospectus may be obtained from any of the. several under¬
writers only in slates in which such underwriters are qualified to act as
dealers in securities and in which such Prospectus may legally be distributed.
The First Boston
First Southwest
BIyth & Co., Inc.
Corporation
Russ &
Central Republic Company
Company
Principal
Maturity
Interest
Amount
Date
Rate
$4,240,000
4,360,000
4,480,000
4,600,000
1961
2Vs%
2%,
1962
shown below
Yield
Principal
Maturity
Interest
Amount
Date
Rate
Maturity
2.625%
$5,140,000
5,290,000
1968
2 H%
2.80
1969
2Vs
2.825
2.85
Yield
to
2.65
to
Maturity
%
.
*
1963
2H
2.675
5,440,000
1970
2%
1964
2H
2.70
5,600,000
1971
2%
2.875
1965
2H
2.725
5,770,000
1972
2H
2.90
4,730,000
1966
2H
2.75
1,190,000
1973
2n
2.90
4,860,000
S,000,000
1967
2%
2.775
*
(Plus accrued interest)
Dallas Union Trust Company
Rauscher, Pierce 4 Co. Inc.
Company
Due March 1, as
Dated March 1, 1950
Schoellkopf, Hutton & Pomeroy, Inc.
.
(Incorporated)
Dittmar 4
Rotan, Mosle and Moreland
Company
R. A. Underwood & Co.,
Moroney, Beissner 4 Co.
Sidlo, Simons, Roberts & Co.
The First Boston
4
R. S. Hudson
Robert E. Lery 4 Co.
4 Co., Inc.
William N. Edwards 4
Co.
Lynch, Allen 4 Company,
The
act as
Foster & Marshall
Inc.
Edw. Lowber Stokes Co.
Louis Pauls 4 Co.
Inc.
Ranson-Dayidson Co., Inc.
Moss, Moore & Co.
Elliott 4 Eubank
Frank Miller 4 Co.
Roe 4 Company
of the several underwriters,
including the undersigned, only in Stales in which such underwriters are qualified to .
dealers in securities and in which such Prospectus may legally be distributed.
Schneider, Bernet 4 Hickman
Rowles, Winston 4 Co.
Co.
Copies of the Prospectus may be obtained from any
Fridley 4 Hess
Walker, Austin & Waggener
Uoderwood, Neuhaus 4 Co.
Creston H. Funk 4
Dallas Rupe 4 Son
t
'
Binford 4 Dunlap
Lentz, Newton 4 Co.
J. R. Phillips Investment Co., Inc.
«
Harold S. Stewart 4 Company
Corporation
Smigi, Barney & Co.
Wood, Gundy & Co., Inc.
.
Harriman RIpley & Co.
A. E. Ames & Co.
Incorporated
The Dominion Securities Corporation
McLeod, Young, Weir
Incorporated
Halsey, Stuart & Co. Inc.
■
'
t!
10
THE
(1202)
COMMERCIAL
bonds
ernment
How
the
Midwest Vice-President, Hugh W. Long and Company,
Inc.
do
measure
We
By HARRY L. SEBEL*
1938
"sound
in
preferred stocks today
have
stocks
is
Mr. Sebel
explains various types of investments comprised in,
each of two general groups: (1) Dollars Constant Investments,
and (2) Dollars Variable Investments. Outlines functions and
Companies
the
in
come
investments"
"sound
made
guard and protect investors in Mutual Funds. Calls attention to
fixed
all
forms
to
income
the
and
fixed
is
com¬
extent
will
that
American Can preferred.
Averages
212.50,
the
210V2.
By
In 1946
high
stock
a
preferred
177
to
stock
the
In
made
and
the
selling
was
meantime
in
search
ing
into
common
bring investment buying into high
grade
preferreds
in
pre¬
1946-47
experience
enough
that
seems
face
of
could
decline in price.
of
30%-40%
ferred stock
proof
was
preferred
yield basis would
stocks were a
investment
than
good
common
the
widespread fear of inflation. The
quite clear from this observation
sounder
when
flation. It is not inconceivable that
it might take yields of 6%-7% to
around
$9.21., It
stocks
widespread fear of de¬
paid $7 and the
stock
better
of
was
that
good
of
protection. Recently it has taken
yields of 10%-12% to bring buy¬
there
pre¬
the
them
dated
of
the end of 1947 the
had fallen to 163 and
"Average"
be
of
our
and
Dow-Jones
(common
above mentioned
ferred stock had
being
can
stocks)
166."
cost-of-liv-
objection
securities
-
pensated
relation to investments.
This
against
income
their
on
the
Averages
ferred
inflation
of
event
between
recovered
definition that
doubt
price
Thursday, March 23, 1050
Industrial
Averages
although it
safe,
our
the
some
ing-wise.
of the Investment Company Act which safe¬
pre¬
inability of increasing that in¬
casts
investments,
as
good
on
in
the
standards?
already allowed that
income
dollar
ferred
these
to
up
is clear under
dollar depreciation in
CHRONICLE
investments."
And Investment Trusts
and provisions
bought
and held 10 years were not
Investing in Securities
merits of shares of Mutual Funds
FINANCIAL
&
A 6%-7%
mean
from
stocks
a
decline
today's
pre¬
prices.
preferred stocks during the post¬
a
automatically
war
stock market decline. Should
this
decline
be
it does
that
high
resumed,
No
matter
what
is
going to
happen in tomorrow's stock mar¬
in
value
ments and, in general, they are increase
(purchasing
ket, it seems clear that preferred
not
appear
illogical
the things with which you are power) in the event of deflation.
stocks
at
today's
prices
are
grade preferred stocks might re¬
two basic fundamental investment more familiar because they in- Therefore, as long as the direction
vulnerable to a decline. In our
turn to their prewar levels of 150
considerations.
One has to deal elude such things as savings bank of our economy is in doubt (and
(4.7% yield). This would involve opinion, they are not sound" in¬
with Dollars deposits
which are perhaps the it still appears in doubt today to
vestments
for
individuals
and
a
principal
loss
of over
five
Constant
In- very best type of Dollars Con- many millions), this objection to
should be sold. The holder has the
years' income from present prices.
vestments, and stant Investment that you can preferred
stocks
will
not
be
option of buying Savings Bonds,
Finally,
we
should
consider
the other has make.
A savings account, as you particularly convincing.
which yield only 1% less and are
what might happen if our ideas
to do wi th - know, especially in a bank which
There
is,
however,
another,
guaranteed in price, if he is afraid
Dollars Vari- is a member of the Federal Deexplained
in
the
opening
para¬
more
fundamental
of deflation. If he is afraid of in¬
objection to
a b 1 e
Invest- posit Insurance Corp., provides a
graph
should
prove
correct.
preferred stocks as "sound in¬
flation, he can buy - such sound
Should common stocks rise be¬
ments. Now I government guarantee up to $5,vestments" at today's prices. They
common stocks as General
Motors,
cause of inflation, the holders of
know
what 000 and is repayable on demand,
are by nature neither obligations
Montgomery Ward, Standard Oil
preferred stocks might be doubly
you are thinkwith a small but certain interest nor
of New Jersey, and Youngstown
equities, although they share
penalized. In addition to losing
ing—this fel- rate.
the disadvantages of both. When
Sheet &
Tube
at prices
which
the extra income required to off¬
lowissupNext, we come to a consideracommon
stock
appear
prices fall, pre¬
fantastically ' deflated, if
set a rising cost of living, they
posed to talk tion of insurance annuities. These
ferred stock prices fall too. For
inflation is ahead of us. In either
in
under- provide for the deposit by you
example, witness the recent close might easily lose much of their instance he might be wise to act
standable with an insurance company of a
7v(purely coincidental) correlation principal value as investors liqui¬ while there is still time.
terms and
at certain sum of money and, in turn,
like to start by pointthat there are but
I should
ing out to
you
-
.
Harry L. Sebel
the
very
set
he
duces
mysterious things
as
out-
introsuch
Dollars Con-
the insurance company will-repay
stipulated amount at regu-
you a
intervals
lar
with
small
a
com-
stant
and
I
going to try to explain just
merely to return your money to
what is meant by those terms and
I do hope that I succeed because,
together, with about 2% compounded interest,
Then there are mortgages which
are a lien upon real estate, either
city property, or farm land. These
am
Dollars
Variable.
But
unless these two things are perfectly clear to you, I am afraid
you will miss much of the point
of
this
discussion.
have to do with those investments
which offer
definite repayment
a
in the amount of the sum in-
vested and run
-
date of
a fixed sum of money at a
specified rate of return. They are
period of
a
years
whlc^nowad^is'L'neranv
from
! ® " Pn'y 7™
$7,995,000
Jamaica Water Supply Company
First Mortgage
*
JSnn
nf
and'
thP
lecture
Women's
by
Mr.
Finance
Sebel
Forum
before
of
the
itself.
Finally, we come to the matter
the
Fourth
of bonds. This term includes
National Bank of Wichita, Wichita, Kan.,
6, 1950.
1
Continued
Mar.
on
S
■
Var-
page
/
^'
2%% Bonds, Series C
f
*
''
I
'
,
■
Dated March 1,1950
often^ called fixed income invest- fypeofproperty
•A
offer to sell or a solicitation of an offer to buy these securities«
offering is made only by the Prospectus. ''
an
The
you
are
r.
This announcement is not
pounded
interest accumulation,
An annuity usually provides
'
:
.
'
Due March 1,1975
7
1
-
■
'
.
-
'
Price 102V4% and accrued interest
53
a
Copies of the Prospectus
How Safe Are High
Grade Preferred Stocks?
March 22, 1950.
Contending preferred stocks, at today's prices, because of their
fixed income basis, are vulnerable to decline in market value
in event of further inflation, Mr. Thurlow mentions as another
fundamental objection to preferred stocks as sound invest¬
ments, their tendency to fall in value along with common stocks
We
have
during
that
the
believed
past
going
very
several
stock
common
much
consistently
months
prices
higher
in
next
years
were
the
few
was
to
them
there
put
has
not
tional bullish¬
ness"
on
part.
We
our
do
regard
common
stocks
sp
merely
beneficiara
coming
eculative
boom, but, and this is much more
important, as bona fide invest¬
ments offering the best
presently
available
protection
against
a
further decline in the value of the
dollar which now seems inevita¬
ble!
has,
seemed
fields
vividly
so
vulnerable
to
ferred stocks.
Under
proper
to
survey
of
investment
to
determine whether there 'was any
NEW
ISSUES
yield
if
our
attention to
Affiliated Gas
and
these
conditions
deflation
of
issues
here
have
4.3%
or
sold
and
A
7":
S 1,100,000
•
non-
A% Promissory Notes due February 1, 1964
callable preferred (American Can)
sells at 188 and pays $7 to
yield
■
3.7%.
There
misgivings
the
but
vestment
the
over
dividend
future,
be
can
for
we
serious
no
security
of
immediate
the
question
"soundness"
its
in¬
at
this
200,000 Shares
Common Stock
(Par Value $1.00
per
Share)
price. We have been brought up
regard as "soun.d investments"-
to
those
securities
which
afford
stability of. income and principal.
Under
should
post-1933
be
inclined
to
investment is
state
one
conditions
to
we
amend
that
a
the
sound
which will of¬
fer income and principal
stability
in relation to the cost of
living,
since
it
is
quite clear that
-
to
7.0%.
typical high grade,
a
Equipment, Inc.
..
between
Today
announcement
•
.
-
inflation
abroad
offered for sale and this
unattractive
attack
previous
definition
In coming to this conclusion it
other
one
it. This class is mainly Composed
of prime quality, high grade pre¬
inflation.
been "institu¬
ies of
survey
not
security presented itself
force
This
B. K. Thurlow
and
this
are
In
general theory is correct, that it
going
was
of
being
as
of
course
class
placed privately. They
appears as a matter of record onl'yh
stocks.
common
seemed wise to draw
which
as
the
to
The Securities have been
and that
the
not
alternative
be obtainedfrom the undersigned.
HALSEY, STUART & CO. Inc.
By BRADBURY K. THURLOW
Analyst, Minch, Monell & Co.
Members New York Stock Exchange
may
gov¬
Reynolds & Go.
j
Volume 171'
Number 4892
THE
COMMERCIAL
-/
international
not
causes of depression of 1930s have developed
again, Mr. Davidson furnishes statistical evidence that we are
in
1929.
depression in
clue.
a
■
The following analysis indicates
that the basic causes of the de-
S*
stantially
cause
:
pression
,
veloped again to
^
in
the
ous
degree. If
t h i
s
1930's
a
have
more
de-
danger¬
'
•*
■
will
be
t
i t
of
the
r
s
de-r
a
pression, but
these
r e¬
been
Clinton Davidson
Jr.
-
impaired
by abnormal ex¬
penditures; high tax rates and a
very high debt. This may explain
why
during the past
long-
year
term investors have reduced their
holdings
of
long-term
short
clical"
while
have
come
of
bear.
have
of
stated
the
The
the demand for
on
for
consumer
credit
and
for
an-d
bank
loans,
production
of
by surplus
the
wrong
commodities, and by dislocations
in
international
trade.
It
is
en¬
lightening, though discouraging, to
compare the magnitude of these
maladjustments today with 1929
and
durable
goods
and
as
families
$3,000, spent
of
their
goods
sumer
ing
a
they
Also,
that
mean
durable
result of
extent
the
large
not
high
the
pleting
ly
large
ment
purchases
not
in
sustained
demand in the
the
by
1920's
replace¬
early 1930's.
for
entirely the
live
and
of the Gross Na¬
Most
believe
larger
on
government
consumers
portion
durable
of
goods
economists
must
spend
their
incomes
in
the
a
Producers equipment
machinery
for
has
10-20
The
also
after
the wealthier
fam-
ilies,
instead
of
buying
more
themselves, indirectly lent their
savings to poorer families who
then bought things they could not
afford to pay cash for. Since low-
in the
1930's to
in¬
was
compen¬
for
declining private spend¬
ing. When the government started
anti-depression spending, the
*.
help
address
Club
Continued
;
on
ii"'
38
page
Co.,
on
members of the
Exchange, will
Stock
the
Boston
'
Had to decline.
-
In recent months
at
5:30
p.m.
served.
dinner
and
Mr.
of
Gross
the
fact
profits
National
in
Product
com¬
manu facturing
declining and the ratio
are
liabilities
is
below
prewar,
abnormal expenditures
tion of Financial
Analysts Socie¬
ties.
can
be
ex¬
Exports and Purchasing Power
Net exports (exports minus im¬
ing
measure the
Southern Pacific
Company
on
purchas¬
In 1929 private foreign
power.
investment stimulated net exports
equal
to
Product.
1%
of
Gross
National
Recently (even after
a
60% decline from 1947) they have
constituted 1.6%. Just as the stop¬
ping of foreign investment elimi¬
nated
years
tive
-
net
exports
for
Dated
after 1929, so the prospec¬
decline
Due
.
.
r;
,
April 1,1960
•
.
.•
Rights, evidenced by Subscription TVarrants, to subscribe {or these Debentures at 100%
of their principal amount and copies of the Circular have been mailed by the
Company to its stockholders. The subscription privilege will expire
March 31, 1950, as more fully set forth in the Circular.
The Underwriters have agreed to purchase any Debentures not
subscribed for by the Company's stockholders or their assigns.
Copies of the Circular may be obtained from the undersigned only by persons to whom the undersigned may legally
offer these securities under applicable securities laws.
•
,
•.
4
BIyth & Co., Inc.
Salomon Bros. & Hutzler
Goldman, Sachs & Co.
t
Hornblower & Weeks
-
•
i
'
.
Paine, Webber, Jackson & Curtis
Hayden, Stone & Co.
Dean Witter & Co.
Baker, Weeks & Harden
Clark, Dodge & Co.
W. E. Hutton & Co.
Johnston, Lemon & Co.
Swiss American Corporation
McDonald & Company
Ball, Burge & Kraus
The Illinois Company
Maynard H. Murch & Co. The First Cleveland Corporation J ulien Collins & Company
Cooley & Company
R. S. Dickson &
Fahey, Clark & Co.
Company
Incorporated
..
Emanuel, Deetjen & Co.
Hill Richards & Co.
i
,
I. M. Simon & Co.
Elworthy & Co.
Prescott, Hawley, Shepard & Co., Inc.
Brush, Slocumb & Co.
Roger S. Palmer Co.
*
•
■
Bateman, Eichler & Co.
Butcher & Sherrerd
Sutro & Co,
Byrd Brothers
Granbery, Marache & Co.
1
»-■
■
DeHaven & Townsend,.Crouter & Bodine
FarweH, Chapman & Co.
J. J. B. Hilliard & Son
Kirkpatrick-Pettis Company
Irving Lundborg & Co.
Martin, Burns & Corbett, Inc. " Pacific Northwest Company
in
foreign aid will
reduce net exports in the future.
Sfcott, Horner & Mason, Inc.
C. F. Cassell & Company, Inc.
t
duce employment and investment
■
several
domestic
enjoying
markets.
In
industries
temporary
Stix & Co.
Minsch, Monell & Co.
the
1930's
,
4
*
Henry F. Swift & Co.
Jenks, Kirkland & Co.
■
Zuckerman, Smith & Co.
-
export
chronic
purchases, however, have
engendered by World War I and
i
,
April 1,1950
•.
.
March 21,1950.
'
-
1."
several
dislocations in international trade
sub¬
i
«
3% Convertible Debentures
u
immediate im¬
have bought more on credit. Cash
run
/
.
"
these
pected to decline further.
in
families
be
past
a
President of the National Federa¬
In view of
1929.
that
of manufacturers' cash to current
now
poorer
will
an
$37,727,600
producers
equipment
have
again been abnormally large. Re¬
cently (even after last year's de¬
total purchases of consumer dur¬
because the
is
Hooper
offering of these Debentures for sale, or an offer to buy, or a solicitation oj an
any oj such Debentures. The offering is made only by the Circular. This
advertisement is -published on behalf of
only such of the Underwriters as <
are
registered or licensed dealers or brokers in this State.
of
able goods have run above a year
ago
on
"Solving the Stock Market's Mys¬
The meeting will begin
teries."
tinue
*
Investment
Wednesday, March 29,
the last three years purchases
families could not con¬
indefinitely to increase their |
Export trade also faces substan¬
debts, such purchases inevitably tial readjustments which will re¬
income
spending
creased
the
&
York
•
Government
sate
Hutton
New
in cycles.
The
large purchases in the late 1920's
ports)
1920's
^
offer to buy,
replacement demand
pact of foreign trade
the
by
cor¬
rect, it bodes ill for the building
>
to
Hooper
moved
purchases
In
This is not
pur¬
future
accordingly be
considered a healthy sign. Indeed,
it would be healthy if more durable goods were bought, for cash
by families that can afford then.
taken
countries
(including
trucks) is
and
years
than they did in the past if full
employment is to be sustained. A
rising trend of durable goods
could
being
Plan
O.
means.
pared to 6%
10%
step
their
mally large.
constituted
One
going
beyond
cline) they have constituted 7.4%
tional Product compared to 8% in
1929.
•;
Marshall
indicate marriages in the
be fewer than in the
will
boom.
happen? Nothing pleas¬
a large
people de¬
of
In the last three years such
pur¬
chases have again
been abnor¬
Recently they have
v
L.
cyclical peak/
declining, and
last decade. If this forecast is
pattern.
anyone except Russia.
now
but to
savings
to
statistics
demand
been
wages
their
earn¬
In
were
What will
ing to
workable
new
con¬
also
Consequent¬
a
1940's marriages
.new
about
goods in recent
result
debt
the
percentage
a
durable
These
consumer
has
years
earning
on
did families
as
as
accordingly were not sustained by
replacement demand in the 1930's.
in cycles.
1950's
not
are
in
the
re¬
cycles, their replacement demand
moves
devised
is
group
well
as
large
$5,000.
over
into
as
incomes
chase.
used for 5-15 years after purchase.
Because they
are
purchased in
We
a
are
♦
population,
used
are
present
exports.
1948, the Federal Reserve
reports, families earning less than
$2,500
constituted
40%
of
our
farm
Consumer
of
enough
our
in
BOSTON, MASS. —Lucien O.
population forecasts of the Census
Hooper, market analyst for W. E.
Bureau
markets
for
boom
and
In
1937.
Non-Sustainable Expenditures
for Durable Goods
.reached>
earn
the
building
building. In the
raw
to
of
causes
demand for home furnishings. In
durable
consumer
goods.
families,
goods
pay
.basic
Obviously
displacing. They
prewar
price
'
the 1930's there was a
cyclical de¬
cline in the "marriageable"
popu¬
lation and a low level of home
these
the
-commodities
uneconomic
decline in
of
farm
<
inevitable
severe
20%
debt
.
a
than they earned.
equipment. As these
expenditures declined, the result¬
ing depression was aggravated by
liquidation of excessive mortgage
.
almost
same
expenditures
to
1929.
debt
more
producers
<
in
these
durable
•
4%
spent
large
'
Disposable In¬
to
consumer
late
abnormally
the
taking steps to restore the prewar
pattern of trade, and we have not
credit has
1920's could not be maintained be¬
it was based on
cause
her
her
more rapidly than in 1929
already a greater burden to
sult should be
stock
of
summarize,
enticed
Depressions
prosperity
6%
compared
tempo¬
as
of
some
At Boston Invest. Club
surplus produc¬
wrong
by
residential
durable
constitutes
and is
yields
to
in¬
are
goods purchases
compared to 5.3 %. The amount of
instalment debt outstanding now
rising
economists
the
of
sold
exchange partners and buyers on
"margin" to add to their holdings.
that
13%
"cy¬
Causes
instalment
1929.'
have
industries,
Many
in
leading stocks in
high
in
to
continue
expect
volume
es¬
1.2% ;t of,. Gross Na¬
Product compared to- 0.5%
It has accounted for
tional
To
short-term investors such
can't
dollars
and
speculators
the
rary
stocks
common
imported.
Europe/in
constituted
have
sources
for
families had to reduce their
pur¬
chases
drastically. In the last
three years consumer credit has
increase
goods
substitutes
we
could not
excessively,
net
Hooper to Speak
Construction
United
areas
Lucien
their
During the 1920's the population
reaching marriageable age was
cyclically large. This was one of
raw
goods
agricultural
II
Population Cycles and Residential
developed domestic
materials
and
used
these
areas, and has
ex¬
pecially by families earning less
than $3,000 a year.
Recently the
if
to
sources
used
the
Europe's
in
,
to
the
supports.v-
Western
sold
of
stimulated
greatly reduced, the United States
with Europe in selling
debt got too
consumer
tion
competes
large in relation to income, these
been
sale
Now
vestments
an¬
indicates
was
I
produced
then
manufactured
credit
goods which they
again
e-
^
prevent
consumer credit
afford. As
loyment
emp
following
for
who
Europe.
unhealthy history of the 1920's
able
has
pledged
,
States,
cessively in the late 1920's by lowto purchase dur¬
govern-
e n
The
and
not buy¬
are
War
which
areas,
materials
be¬
ago
income families
to prevent.
m
much.
so
Consumer
diffi-
ily impossible,
Our
year
is being repeated/
cult, though
i not necessar¬
I
ing
the
correct, a
^depress ion
a
World
shortage is the
more
in
of how to correct
Europe sold manufactured goods
to, and invested in, the undevel¬
-
middle-income
high-income families
alysis of
analysis
is
-
below
the
has
financial
some
of
empires to
replace U. S. farm products. This
will aggravate our farm
problem
and
Before
oped
i
production
commodities
far
now
Plan
(1203f
solve their dollar
currency devaluations,
and the worst is
yet to come,
t
Does not set date of downward turn, but advises
watching trend of retail sales of durable goods for
are
Marshall
prevented
crises
condition to weather than
worse
trade
The
worse.
Contending basic
a
CHRONICLE
were
reflected in foreign finan¬
cial crises and
currency devalua¬
tions.
The chronic dislocations in
President, Fiscal Counsel, Inc., New York City
approaching
FINANCIAL
nationalistic economic policies
Factors in Approaching Depression
By CLINTON DAVIDSON, JR.
&
_*
•,
12
(1204)
COMMERCIAL. &
THE
FINANCIAL
CHRONICLE
-Thursday; March 23, 1950
Rican
Review and Forecast of Industrial
people. PRIDCO was re¬ Reed and men's wear, and so on.
to develop this human The big and the small—pioneers
resource,
and the island's eco¬ all!
quested
nomic
Development in Puerto Rico
;
Assistant
Puerto
Rico
to
the
Industrial
big
was
New Plants Established
President
Development Company
Stressing need for further industrialization of
could
reach.
Yet,
wait.
not
recently
to be built from scratch.
sponsored
efforts
Development Company
recounts briefly steps already taken and in
pros¬
pect to foster the Island's economic growth.
beginnings
of
indus¬ ucts it
the
program
Rico sprang
from the vicissitudes
In
war.
in
Puerto
1942, submarine
war¬
was
then and
even
day could be secured from
A
a rock, or
well, but by solid busi¬
thinking and careful sched¬
uling. It is no place for the getrich-quick or the inefficient. The
"prospector"
of
old
will
find
All
Puerto
plant
up
were
mill
followed.
Then
for study:
loomed
a
cot¬
in
the
In
may
local
charts
its
of
"natural."
economists
Then,
it
with
was
the
of
the field of North and South
American
drafting rooms of the company's
is
engineers. In the figures and
source.
Rico
disappointing. The
goodwill, with a
good head on his shoulders, will
find it pregnant with industrial
possibilities.
breaking the icicles
of private capital.
came
a
businessman
core
textile
ton
some¬
a
shoe
textiles
now
buying elsewhere, perhaps
at
around the
by just picking
ness
board, and clay blocks followed
quick succession. The latter had
Puerto Rico Industrial
The
be had
sinking
PRIDCO, there¬
in
trialization
of "boom." It was pure economics.
A frontier whose riches are not to
the challenge
challenge of an increasing
population and disparity between their produc¬
tion capacity and purchasing power, official of
government
:
fore, dug into its own resources
and acquired a cement plant, then
Federal
property. Glass, paper-
Puerto Rico to meet
established
Then, Joyce of California took
the shoe plant..
The march
was on.
A new frontier, indeed.
This time, without the psychology
over
Private capital, then tied up in
the war effort, was beyond Puerto
Rico's
of
A
tackled.
By R. RODRIGUEZ-LA ZARO
•
as-well.
And as suc.r it
resources
job, indeed!
relations.
Puerto
Rico
well be the training ground.
For Puerto Ricans, though Latins
in origin, are Americans in think¬
ing.
a
President Truman's Point IV
has opened a remarkable vista
war
in
coming to a sudden end, the icicie- that direction
a
corollary to
Moreover, the war had brought breaking began to show results. F. D. R.'s "good-neighbor policy,"
systematically
cutting
into
the into sharper focus the
disparity Textron Southern liked the idea indeed, and a field in which Puerto
TEODORO MOSCOSO, JR.
supply lines of the island.
Its between productive
capacity and of a mill on the island. It saw the Rico could undoubtedly excel.
sugar lay dead in mill warehouses
Mr.
Moscoso
is President and
purchasing power, between popu¬ economic reasoning, the logic of
; The old concept of "natural re¬
and
the
much
needed
victuals lation and land.
General Manager of the Puerto
Nowhere in the the thing.
And the first private sources" is facing a serious change
from the North were consistently
Rico Industrial Development
Western Hemisphere was the land¬ mill was
born.
in Puerto Rico. Where it had "peo¬
ending in the sea.
man
ratio
more
Company
<
tipped against
Objective No. 1 had been at¬ ple," it now has "manpower";
The situation called
for belt- man.
On an island
3,500 miles tained. Industrialization through where it had
"distance," it now
Thus, it is being done, and will
buckling, sound thinking, and square,
2,000,000 humans were private enterprise became the key¬ has "location"; where it had "iso¬
continue to be done.
courageous
action. Surely, if faced with possibly the biggest note, and PRIDCO directed its
lation," it now has "understand¬
Puerto Rico was to produce one challenge in their history—indus¬
energies accordingly. Everything ing." In a world that has split the What Puerto Rico's Industrializa¬
crop — sugar — and sell it to the trialize or quit.
it had been training for lay ahead.
tion Means to U. S. Business
"natural
resources"
are
atom,
mainland in exchange for every¬
After Textron came Beacon and where the heart is.
It was, and still is, a stinging
To the mainland manufacturer
thing else: food, clothing, shelter, challenge.
Reality however bleak, blankets, then Plaza and rayons,
Sixty industries, of all sizes, any increase in Puerto Rico's pur¬
living
communications had to was
staring Puerto Rico in the Crane and
adding a potential annual wealth chasing power represents a direct
be maintained at all costs.
dinnerware, Raskins
The face. Puerto Rico
choose to 'Tough
of $50,000,000, have found Puerto
Armed Forces did a noble job, and
and
increase in his sales.
For every
plastics, Nash and .leather- Rico a
it out." And its Industrial Devel¬
good situs for progress in
the islanders did not starve after
dollar added to the island's in¬
ware, Tele-Tone and radios, Gus- the postwar.
Their establishment
opment Program was born.
all, but the die was cast. Puerto
and
entailed
slippers, Beller and has
skillful
The instrument was, and is, the tave
guidance, come, 50% goes for purchases on
Rico, in some manner, had to Puerto Rico Industrial
the mainland.
The island is now
Develop¬ sportswear, St. Regis and paper alert management, precise coordi¬
complement its agriculture with ment Company; but the dynamic, bags,
Claussner
and
hosiery, nation, and plain, old-fashioned buying $1,000,000 a day worth of
industry. And many of the prod¬ germinating force is in the Puerto Charms and
goods here. It is the U. S. largest
candy, Farnsworth- hard work.
fare
in
the
Caribbean
had
—
been
.
.
.
.
Interest exempt in
our
opinion from all present Federal and State Income Taxes
*
v
per
capita customer in the world.
The
ceiling could be the sky.
And
the correlation is inexorable.
His¬
tory has joined
%
the U.
$1,895,000
tinies
S. A.
the
are
Puerto
together.
Rico
and
Their des¬
same.
'
t
'
„
At
Various Puerto Rico
Municipalities
do not
out
Due:
Coupon bonds in denomination
Serially July 1
of
$1,000 registerable as to principal and interest.
Principal and semi-annual interest (January 1 and July 1), payable at the
Chemical Bank & Trust Co., New
York, N. Y.
individual issue will be supplied
upon
of the
island's
latter,
therefore,
lects
the
v
82,000 AGUADA
$ 28,000 DORADO
42,000 GUAYANILLA
80,000 ARECIBO
20,000 BARRANQUITAS
137,000 CAGUAS
125,000 CAMUY
<8,000 COAMO
25,000
46,000
244,000
66,000
17,000
its
the
of
request.
$ 90,000 MANATI
their
20,000 MAUNABO
their faith in its
134,000 YABUCOA
porating
its
1958
1959
1960
-
•
1901
1962
1963
2.10%
2.20%
2.30%
2.40%
2.50%
2.55%
2.60%
1964
YIELD
•
1965
'
1966
1.967
;
1969
all.
2.60%
2.65%
2.65%
This
1962),
the
to revise
it, incor¬
underlying
principle
—
into
a
more
fiscal policy with ex¬
none
means
and sharing for
policy
a
where
"production" will receive the ben¬
efit of incentive taxation,
thereby
compensating for the higher risks
2.70%
involved.
2.70%
2.70%
:
The story of Puerto Rico is but
beginning^to be told.
trial
Haupt & Co.
is
program
Yet its
such
Its
but
indus¬
babe
a
in
physical limitations
that, should
saturated
it
industrywise,
ever
its
be
share
of U. S. production would scarcely
reach
Paul Frederick & i Company
2%
of
the
huge American
industrial establishment. 1 But that
be
o.
Mass..
Seasongood & Mayer
Cincinnati,
Ohio
1
a
proud share in the happiness,
-liberty and standards of
a
people
with whom Puerto Ricans—Amer¬
;;t
I
■U
1
icans all—share
''
>
16, 1950
in
end
industry
emptions for
MATURITY
this be¬
share, however small, would also
F. Brittaii
March
to
to
permanent
are
Bo»ton,
As Governor
LAS PIEDRAS
arms.
Ponce, Puerto Rico
own.
in
for
temporary measure (it's
a
scheduled
Legality approved by Mitchell and Pershing, Attorneys of A'eic York
Banco de Ponce
investment
come
YIELD
ex¬
most
reciprocity
time has
.75%
1.00%
1.25%
1.50%
1.75%
1.90%
2.00%
Ira
in
JUNCOS
1957
1956
sincere
ing but
MATURITY
1955
has
taxes
156,000 SALINAS
50,000 SAN GERMAN
60,000 SAN JUAN
YIELD
1954
Rico
own
a
already in
HATILLO
1950
The
col¬
Borrowing
Munoz indicated recently,
HUMACAO
S.
costs
and
278,000 PONCE
MATURITY
1952
levies
GURABO
MATURITIES AND YIELDS
1953
a
its
future,
—aid
1951
the
industries locating on
new
soil:
in¬
U.
Government.
Puerto
from
im¬
an
the
to
taxes.
own
Union,
empted
its
$ 47,000 ADJUNTAS
territory,
contribute
not
With¬
are
being
not
page from its brethren
This offering of bonds is
composed of the separate obligations of the
following municipalities in the amounts listed. Maturity schedules of
any
the island.
on
Yet,
corporated
does
Jan. 1, 1950
apply
representation, taxes
possible.
Refunding 3% Bonds
Dated:
present, U. S. Federal taxes
«s4« ••
■
7
If-I*
"
so
.
f
many
so many
thoughts, and
hopes.-7 -
:
attitudes,
so
many
;v'::
V
Volume".
171*
•
Number;4892
THE
COMMERCIAL
&
FINANCIAL
CHRONICLE
j
>
/
v ,,~K
v,
.,
&r.*r»:
•.
1,
I'
NO DEFAULTS
—
13
(1205)
' :.l1
■'
-f, -
J! h
I
NO DEL1NQ0ENC1ES
None of the 77
of their
municipalities of Puerto Rico have
defaulted
ever
or
been delinquent in the payment
obligations.
TAX EXEMPTION AS PROVIDED BY
THE ORGANIC ACT OF PUERTO RICO
The bonds and
of
ment
or
the
obligations of the municipalities of Puerto Rico
United
States
municipal sub-division
municipality
States,
or
other
or
of
America,
thereof,
municipal
by
or
are exempt
from taxes by the Govern¬
by the Government of Puerto Rico
or
any
sub-division
by the District of Columbia.
state,
of
any
territory
or
possession,
state, territory
or
or
of
any
by
or
political
any
county,
possession of the United
.
STATUTORY DEBT LIMIT
Municipalities of Puerto Rico
assessed
are
restricted by statute to
property valuation, with the exception of the
These have
a
legal net debt incurring
power
art
a net
debt incurring power of 5% of their
cities of San Juan, Ponce, and Mayaguez.
of 10%.
• ■
FULL FAITH, CREDIT AND TAXING POWER
The
from
bonds and
obligations of the 77 municipalities constitute
general funds, from
of and the interest
from
on
any
unobligated
any
credit and
taxing
special funds which
any
general obligations of said municipality evidenced by its bonds
or notes*
and
of said municipality, and for the payment of which the full faith,
revenues
power
yalid and binding obligations, payable
be available for the payment of the principal
may
of said municipality are irrevocably pledged.
FURTHER CONTROLS ON MUNICIPAL DEBT
Municipal public debt
be authorized only through
may
of the Executive Council of
the
Insular
by the Auditor of Puerto Rico that
of
the
Treasurer
of
Insular Government
own
Rico
municipal ordinance having the approval
upon
certification
on
the
method
of
financing.
No specific surcharge tax is levied and pledved
particular bond issue but the debt service of bonds issued by the municipalities of Puerto Rico
protected by taxes levied for the
purpose
of paying
any
purpose
of creating
a
special redemption fund to be used for the
general obligations of said municipality evidenced by bonds «or notes of said
municipality including the interest and principal thereon and
for their
redemption prior to their maturity.
power at any
hand and
to
approval is contingent
disposable debt incurring margin is avai||ble, and by a report 0
embodying individual reports of the various departments of the
a
recommending the desirability of the projected expenditures, and making his
recommendations
to any
is
Puerto
a
Such
Government.
on
time to exercise
a
ciencies in the
payment of
Moreover, the Treasurer of Puerto Rico is authorized
general funds against uncollected municipal taxes to cover cash defi¬
principal and interest.
GOVERNMENT
for
all premiums that may be required
preferential lien during the rest of the fiscal period against cash on
the balance of uncollected taxes.
make advances from insular
any or
Furthermore, the Treasurer of Puerto Rico has the
4*
DEVELOPMENT
PUERTO
SAN JUAN
t
PUERTO RICO
v
•
i.
t
*
,
J
******** +
fV
:
14
with the
Government Development Bank
FINANCIAL
&
COMMERCIAL
THE
(1206)
CHRONICLE
Agriculture and Interior
to
Departments
018,000 spent
For Puerto Rico Blazes the Way
existing
in
conservation
Federal
resents
soil
programs.
func¬
tions of Government Development Bank for
Puerto Rico, which now serves as Fiscal Agent
for the Insular Government, as well as central
states
has
by-passed the
the field of
government
financing and has
plunged from the ox-cart to the
jet-propelled era.
?
Spearheading this movement is
the
Government
Development
Bank for Puerto Rico, of which
Rafael
Buscaglia,
former Treas¬
Puerto Rico, is President.
of
urer
in
age
initiated opera¬
1943 through appro¬
institution
This
tions late in
priations from the Insular Legis¬
amounting to $20,500,000.
principal objectives, are to
help the industrialization of the
lature
year
through loans to new or
established
industries,
and
to
serve as Fiscal Agent for the Gov¬
ernment
of
Rico
Puerto
and
all
I of its agencies and instrumental¬
It is in this latter role that
ities.
the Bank is
setting a new pattern
financing. It serves
as an excellent example of what
can be
accomplished when gov¬
of behavior in
ernmental fiscal matters
are
cen¬
tralized and administered through
a well integrated
and smoothly
concerning the absolute
proposition.
From there on, the Bank han¬
Rico
Puerto
worth
of
mainland
S.
before.
ending June 30, 1949.
was
of
lower
farm
more
all
of
the year
from
food
to
ran
than half of the
Rican
Puerto
the
of
.
prices,
Sugar,
slightly below the $112,-
and
rum
the
the
to
over
Insular
drive to start
of
to
mainland.
expand
dles all the details.
when and how
floated.
The
an
diversify existing
and
imports and exports.
gap between
of
view is the prime consideration in
setting the Banks criterion in this
phase of the work. By following
this procedure in all cases, the
has
Bank
able
been
to
raise
to
...
unsuspected high levels the cred¬
it of both the government and its
agencies.
The Bank also realizes that the
market is in need of
money
con¬
stant and up-to-date information.
Data covering the financial status
of those
agencies whose bonds
have already been issued is con¬
stantly being supplied uj^pn .re¬
quest. More detailed information
is being supplied in the prepara¬
tion of new prospectuses.
The
Bank welcomes inquiries from in¬
terested parties
concerning any
and all phases of the financial
status, plans and developments of
any governmental agency, whose
or
are
for business - for pleasure
to be
Through its "Operation Boot-> 'sold in the American market.
strap" the Government of Puerto
Rico is helping the people to help
t
themselves
Of
raise
living to
with that of
their
level
a
an
American
National Bank
Puerto
main¬
land community. As an aid to the
industrialization of the Island, the
|ico's Coffee
Industry in Progress
major force
in
raising living
standards, the government has
Created several
agencies aimed at
developing natural resources, such
as the production of hydro-electric
power, and providing services of
a public nature such as transpor¬
tation, water and sewage disposal,
j ! As financial advisor to the In¬
of
Toward
the
the Bank establishes
heeds.
itself.
government
accomplishing
a
this
priority of
Then, when the advisabil¬
ity for capital improvements in
techniques.
branch
bold relief the need
into
Under
Puerto
agency has been determined, the
the number
one
Bank makes
the Island
of
its
exhaustive study
financial situation.
Before
the Bank recommends the float¬
ing of
a
bond issue, it must be
and
re¬
mmlmm
'/r
pro¬
&
Coffee
crop.
.
the * Chase
Juan,
conveniently
now
new,
more
a year
modern
enlarged quarters at the
Tetuan
corner
f
Streets.
Its
officers
and
Cruz
and
staff
in San Juan
>
thoroughly
are
miliar with both the trade
The Chase National Bank
was«
It netted
$12,000,000
ii
members
<
over
in those days,
But with the
be.
v/d/fc
duced 68,000,000 pounds of coffee
and
exported 60,000,000 pounds
Europe.
an
MY]
i **
/
crop
Rico
help
interests
branch in San
a
mmmm
Spain, during the
1897-98*
year
your
Rico^may
located in
("YOWWwwJWWw
for
real
a
capital city of the island. This
habilitating the Puerto Rican cof¬
fee industry.
to Cuba and
an
whatever
has had
The impact of the world coffee
job,
Puerto
For many years,
Government, the Bank is shortage, intensified by the high
charged with the responsibility of prices it has induced, has thrown
those
you,
in
Spurred by world shortage of
commodity, Insular Government
is providing incentives to encour¬
age soil an^i water conservation
sular
studying capital requirements for
all such agencies in addition to
to
Chase
the,
find
X^OU'LL
Rehabilitation of
standards
comparable
and
tivities
,
tourist
fa¬
ac¬
attractions
of Puerto Rico.
change of flags,
the
Puerto Rican coffee growers
lost the tariff protection
they had
from
tariff
Spain.
The United States
policy for coffee was not
protectionists.
a
disastrous
This
You
factor, plus
in
1898,
hurricane
San Juan
plunged the Puerto Rican coffee
industry into, depression.
Since
the
middle
thirties
not covered local needs.
island
was
a
net
branch
Puerto Rico.
the
output has seldom exceeded 30,000,000 pounds, a^ yield which has
the
cordially invited to make the Chase
are
your
banking headquarters in
Every banking service for exporter,
importer arid traveler will be at your disposal
By 1947,
coffee
im¬
porter—consuming about 8,000,000
pounds of foreign coffee a year.
A few weeks ago coffee became
scarce
on
the
island.
Growers
CHASE
THE
NATIONAL
BANK
were
reportedly holding their cof¬
fee back for higher prices.
But
this situation merely highlighted
the
need
coffee
for
farms
rehabilitating
which
occupy
a
program for coffee grow¬
and
in
1946
appropriated
$800,000 to launch
incentives
i
.
Mr.
j
Buscaglia
is
President
of
the Government Development
Bank for Puerto Rico.
to
a
program
encourage
of
needed
soil and water conservation tech¬
RAFAEL BUSCAGLIA
HEAD
OF
OFFICE: Pine Street
NEW
corner
YORK
of Nassau
f*--
«...
.
Member Federal Deposit Insurance Corporation
OVERSEAS BRANCHES
$5,000,000 hurricane in¬
surance
ers
CITY
THE
hill^T
land in southwestern Puerto
Rico,
not adaptable to-other
crops.
The Insular Government in 1945
set up
OF
the
niques. This year it is appropriat¬
ing over $1,000,000 for the job.
Resident Commissioner Antonio
has been
Fernos-Isern
working
London
Havana
Frankfurt/Main
•
•
San Juan
Offices of Representatives: Mexico,
Heidelberg
•
Panama
•
D.F.
THE CHASE BANK:
Paris
•
Stuttgart
•
•
Colon
Buenos Aires
•
Shanghai
*
•
Rome
•
was
Government's
It determines
point
con¬
industries and
new
issue should be
investors'
heavy
is aimed at narrowing the
ones,
ship¬
molasses
This
prices
were
higher
and
prices lower, Puerto Rico
bought $150,664,000 more goods
than it shipped out.
f
83%
sale
deficit.
sugar
The
from
retdrns
products
sugar
trade
a
Island's
farm
goods
before.
The cost of food offset
the
were
$131,392,000 during the past year.
In
fiscal
1948, when mainland
shipped to the mainland. This was
$194,903,000 last year, $186,592,000,
bought
during
tinual
the
to
soundness of the
.bonds have been sold
functioning organization,
U.
Because
satisfied
Its
Island
that
$105,S38,000
the
this
Rico
year
value
development.
Puerto
fiscal
It
The Puerto Rican Trade Council
authority for aiding and promoting industrial
automobile
were
year
Puerto Rico's Food Bill
describes organization and
Bourne
The annual food bill is
contributor
the
mainland.
$326,295,000 the past
and $337,256,000 the
from
These
mainland
during fiscal 1949.
third of the Island's total
purchases
By LEONARD BOURNE
Mr.
a
the
to
worth $130,306,000 to Puerto Rico
bill is big. It rep¬
But the food
participation Puerto Rican coffee
growers
ments
the mainland for
on
food in fiscal 1948.
maximum
get
Thursday, .March,. 23,, 1S50
►
Tokyo
•
Cristobal
•
Cairo
Hong Kong
«
^
Osaka
Balboa
Bombay
Volume 171
Number 4892
THE
COMMERCIAL
FINANCIAL
&
CHRONICLE
(1207)
15
J.
..
THE GOVERNMENT OF PUERTO RICO HAS
CAREFULLY
THE
EXAMINE
AND WHAT MUST
BE
BALANCE
SPENf,
CONTRACTED
BETWEEN
AN
OBLIGATION
WHAT IS NECESSARY
more
wholesale
an
than
integrated
185,000
consumers
is
possible
a
A,
RICO
TO
WATER
by Gov. Luis
before the 17th
Legislature
i
of electric generating stations
system
residential,
growing needs of
PUERTO
~
TO INVEST
the message delivered
Munoz-Marin
serving
-f-
TO INCREASE THE PRODUCTIVITY OF PUERTO RICO
From
Development of
...
<■,
only
commercial,
by
industrial
investments
to
serve
and
the
progressive community
,
'
.
.
<
t-
'
.
RESOURCES
AUTHORITY
#•••''
■
SAN JUAN, PUERTO RICO
+
'
" 5
I
..
'ft
&- FINANCIAL
COMMERCIAL
THE
(1208)
16
It
basin.
Achievements and Plans of Puerto
completed in 1943.
capacity in terms of
electric energy amounts to 2,400,Its
was
storage
its cost may reach
require
plete.
000 kw.
Rico Watei Resources Authority
barrier
now
grows
at average rate
exceeding 10%
kwh.
Puerto
of
per year.
An
in
the
generation
However,
in
the
f
th
o r
the
ern
power-producing
wards
total
principal
units
the
on
rainfall
is
pro¬
west¬
reaches
They point the
ultimate
potential
100
way
realization
hydro
Ponce, the 230-foot high
for
waters
to¬
of
a
production
is
project
of
the
long
This tunnel, driven through
rock,
conveys
waters
by
solid
It
voir and
the
1949
at
Waters
of
and
kwh." San
Rico's
use
is
Juan,
large part of
for indus¬
distributed in
power
being
Ponce
and
where
with the completion of a series of
four more dams.
This undertak¬
in
transmission and distribution sys¬
ing,
tem of the Authority has already
known
the
as
Caonillas
General Leonard A.
the green light to
planning the following projects
under the Federal hospital pro¬
Surgeon
Scheele
industries have
recent
sprung
electrical
the
years,
up
gave
initiated in 1948:
(1) A $156,000 health center in
Camuy, with the Insular Govern¬
paying $52,000 of the cost.
38-bed
A
general hospital
and health center in San
German,
$300,000 cost
with one-third of the
coming out of insular funds.
Mayaguez,
will be added to the Island's total
Service
the building of four
health centers and hospitals
(2)
While at present a
Health
Public
in Puerto Rico.
ment
wells
from
Puerto Rico—
JUAN,
S.
U.
has approved
small
trial
36,000,000
SAN
The
gram
shore,
Puerto
of
Centers in Puerto Rico
where rainfall is
At the present
time, cultivated areas on the south
shore
are
being irrigated with
com¬
$10,000,000.
additional
irrigation of some
30,000 fertile but dry acres on the
water
cost
growth
U.S.OKs New Health
new
impounded by the dams
and then for- the
streams.
were
large
three
will be used for generating power
dam,
a
of
and two small dams.
power-head
reser¬
substantially
to
economic
of
tunnels
of
miles
12
of
building
relatively scanty.
plant
power
in
An
struction
south
a
north
area
Island's south
This Lajas Valley Project,
known, calls for the con¬
additional
The
and
the
-
de¬
the
on
reservoir's
provides
of over 500 feet.
this
for
source
of
pipe
line
to
the
power
house, two and a half miles down¬
stream.
water
the
means
steel
pleted
it is
as
concrete
a
tunnel nearly two miles
and eight feet in diameter.
Alterations of the existing
(3)
health center and construction
a
22-bed
in Vega
hospital
of
Baja.
Insular funds will cover one-third
of the
$180,000 cost.
Extension
extended to all parts
square
making it possible to place new
industries in any convenient loca¬
Hormigueros. Insular funds would
largest hydro-electric proj¬
plans stage.
tion.
make-up $37,500 of the total $112,-
Carl
improvement of its generating fa¬
Project, will add 30.7
miles of drainage area to
the Caonillas system.
The
ect of all is still in the
While
for
neer
A.
tric
Bock, Chief Engi¬
the
Authority,
power
like projects
feature
further
Puerto Rico.
mountainous
and
Ponce,
shore.
Island
the
velopment is located in a rugged
and
pressure
finitive
through
flood
important
of 700,000,000 kw. a year of elec¬
power
San
$25,000,000 and
years' work to com¬
seven
Water
has
Resources
ventured
estimate
of
its
no
de¬
electric
With
cilities
extension
continued
distribution
and
the
Water
sees
itself
of the Island,
and
system,
Resources
in
a
Authority
position to ade¬
quately meet the power need of
capacity, he has stated that
(4)
A
new
health
center
in
500 cost.
These
are
the
among
2,50$
projects expected to be approved
for construction across the nation
during the two years ending June
30, 1951.
in other parts of the Island.
Today,
in
electric
Puerto
produc¬
power
Rico
is
Das Bocas, near
above
a
500,000,000 kilowatt-hours yearly.
This is the output of more than a
score
consumption
annual
iriches.
integrated
the
all
of present elec¬
section of Puerto Rico where
the
resources,
the
over
of
source
in the mountainous central
charged
development of
power
major
by two recently-completed
hydro-electric projects, Das Bocas
and Caonillas.
Both are located
Island.
tion
found
vided
Antonio Luchetti
fullest
taken
operation
electric
has
to supply a substan¬
portion of this demand by
tric-power
A
fM
JB m
agency
Rico's
Puerto
has
/
ity,
government
with
Authority
necessary
A
Water
Resources
u
for
demand
in¬
rapid
the
to
power
imported.
generation.
The new San
plant, with an initial
capacity of 60,000 kw., is being
built to supply this need.
^
1
I
A
for
be
Juan steam
Authority.
a
to
steam
sources
The
due
crease
tial
Re^
Island
must
power,
it
Water
like
would
minimum the generation
electricity by steam since fuel
burned
This
power.
a
between
season.
generating plants.
Rico
Puerto
But
hold to
powerful Argentina and Chile in
per capita production of electric
out
Located
year.
a
stores
Caonillas
tions and steam
PUERTO RICO—
Rico now surpasses Brazil,
JUAN,
SAN
turning
production during the dry
power
produces 500 million kwh. Demand
Island
is
Dam
mountains
the
Juan and
Rico Water Resources Authority
Executive Director, Puerto
50,000,000
in
LUCHETTI
By ANTONIO
The
Caonillas
Thursday, - March. 23, 1950
CHRONICLE
of
hydro-electric
lake five
the
junction
Caonillas
installa-
Arecibo, forms
miles long
of
just below
the Arecibo
Rivers,
and
in the Arecibo
Electric Power to Meet Demands of
Industry
For Your Puerto Rican Trade
COMPLETE BANKING SERVICE
■
v
'
•
'
'
*
^
1
.
-
'
•
\
♦'
*
Import Letters of Credit
Export Letters of Credit
Collection
CAONILLAS
DAM,
shortly
before
completion
and
flooding
of Drafts
of
valley between San Juan and Ponce which it has transformed into
i
reservoir.
The
$10,000,000 project, built by the Puerto Rico Water Resources
Authority, was financed in part by the Government Development
Bank for Puerto Rico.
yearly
power
to
It has added 50,000,000 kwh. of
hydroelectric
Puerto
Rico's
power
resources,
now
Guaranty Trust Company of New York
totaling
Capital Funds, $370,000,000
606,000,000 kwh. yearly.
Plant development is
by
over
now
under way to increase power production
300,000,000 in the next few
years.
This program will add
140
Broadway
Fifth Ave.
at
44th St.
Madison Ave.
•
*
at
Rockefeller Plaza
60th St.
'
*
'
'
'
'
50th St.
at
<
30,000
power
acres
to
irrigated
areas
as
a
by-product
of
hydroelectric
London
Paris
.
Brussels
output.
The Government Development Bank for Puerto Rico is
playing a
vital part in the development of these and other industrial
resources.
Member Federal.
Deposit Insurance Corporation
.
-
j
i
♦
Volume-171
-
Number 4892'
——
THE
.
COMMERCIAL
i
.....
.
'
FINANCIAL
&
CHRONICLE
(1209)
.*
"
"
I
■"
1
■
'■
-
"
i
■"
i
right financial gifts from the Federal Govern-
manent payrolls, improving housing, high-
ment, Puerto Rico is
ways
of living solely
own
improving its standard
its credit and through its
on
efforts.
adding
integral unit of the U. S.
able opportunities
our
power
machinery of world
^
An
and other public services, thereby
economy.
to the smooth running
economy.
Puerto Rico offers innumer¬
for expanding industrial investments.... Sixty
industries have established here since 1945. twenty-ax
new
•
t*-
them in the past
12 months.
•
-
find out
and the
about
more
out
advancing
economy
opportunities for improving industrial
V"
■
...
"
••
>
v.
"
v
investments, write the
PUERTO
RICO
P. O. Box 2672
San Juan, P. R.
^
'
■
-
DEVELOPMENT COMPANY
INDUSTRIAL
'
J
.
*
•
'
'
f
New York Office:
4 West 58th Street
Suite 1301
'
'*
'■
*•«
'
••
.
To
of
Chicago Office:
—120 South LaSalle Street
■
Room 1761
.
■
THE
(1210)
18
COMMERCIAL
&
Pneito Rican Banks Now in FDIC Puer'° Ric°
banks
full
to
integration of Puerto Rico's
R.—A
about
banks,
i!n eluding
tjh
major
ree
full
as
ones,
checking
accounts
and
savings funds.
checking
100,000
accounts and less
savings
accounts.
been
Air
crews
by
the
end
of
1950.
Juan
314,346
the
of
that
have
18
time,
than
more
previous
than
which
San Juan
passengers
since
cleared
crease
in
operation in April, 1949;
million
pounds
handled,
were
100%
increase
over
been
a
1948
in¬
an
15,000
Also,
year.
cargo
operations
over
more
of
air
nearly
when
confined
to a
According to Salvator V. Cam, smaller terminal building nearby.
Banks Get Federal
Rico
Miami-San
and
air routes.
Terminal
went into
were
Deposit Insurance Coverage
than
The
number of accounts increased
i n e d
found
e;x a m
and
quali¬
existed.
A. M. Sakolski
that
institutions
ent
fied for FDIC
The
FDIC
con¬
formerly
membership
membership
will
and, because of this, and because
of their subjection to the super¬
vision and management standards
the public in the banks and accel¬
imposed
on
American
banking
institutions, it is expected that
in Puerto Rico do
will attract a larger share
of savings of the Puerto Rican
population and a larger portion of
the banking business of United
States and foreign countries.
local banks handle, to a large ex¬
they
The
already
construction
0
siderably
during
recent
years.
Many of the branches now oper¬
ated
by Puerto Rican domestic
banks take the place of independ¬
been
fully
the
larger
a
These banks
sound
drive from
Manager of the Puerto
Transportation Authority,
900
flights per month are now
being handled at the Isla Grande;
deposits,
of
a
have
and
-
General
Rico
there
In¬
Corp.
Deposit
surance
$15 mil¬
of land
According to recent estimates,
are something under 50,000
Federal
the
about
amount of
new
tract
third of them
probably
of
members
$300,000,000
has
and
York-San
Juan
Rico and the
step
Puerto
Rican
site
completed
creased air traffic between Puerto
P.
a
a
Rico—Look¬
ing towards the time when present They will accommodate the larger
airport facilities will be unable type passenger planes which are
to
accommodate the greatly in¬ expected to be used on the New
with that
economy
on
filling and leveling areas for
landing strips, expected to be
are
the
mainland, the Puerto
in feature of creating great confi¬
the direction of the integration of dence on the part of the general Rico Transportation Authority is
Puerto Rico's economy with that public in Puerto Rican banks.
The Puerto Rican banking situ¬
Ojf the continental United States
ation can be described simply.
is the recent
In
the
admission
of
principal
commercial
and
seven
Puerto
savings
banks
there
are
now
JUAN,
airport
cleared
SAN JUAN, Puerto
direction of
of the United States.
SAN
constructing
lion
heart of San Juan.
$15,000,000 project to be
completed this year.
membership in organization indi¬
their soundness and is step in
cates
now
The
leading Puerto Rican
seven
Thursday, March 23, 1950
about 20 minutes'
,
New Air Terminal
By DR. A. M. SAKOLSKI
Recent admission of
CHRONICLE
FINANCIAL
of
importance
FDIC
the
guaranty of deposits up to $5,000
of each account, a limit soon to
be increased to $10,000, lies in its
the
increase
confidence
of
erate the use of these institutions.
Though foreign banks operating
a large share of
the
foreign
financing,
trade
the
tent, the financing of home affairs
home-chartered
the
to
as
Credit inquiries
production.
and
have
arisen
doubts
not
to
as
their
banks
much
so
from
stability,
but
simply from lack of knowledge of
business
their
their
and
balance
sheets.
Federal Government
Supplements
Puerto Rico's Low Cost Housing
Puerto Rico Housing
Authority and housing au¬
thority of San Juan and Ponce recipients of initial
assignments by Public Housing Administration.
was
boosted
The
Federal
Public
Housing
assignments to Puerto Rico under
Public Law 171, the Public Hous¬
the program
Under the U. S. Housing Act of
have
4,500 houses, then an additional
3,900 houses to the
municipal
housing authorities of the Island's
where
cities,
San
Juan
and
Ponce.
These
were
initial
Housing
Act's
$1,500,000,000
units of
among
assignments
the
authorization
of
build
810,000
low rent public housing
the nation in six years.
across
in
San
Juan
Home Research and
Rural
clean
The
slums.
the
up
Housing
nation's
and
Home
and
the
Puerto
death
Rico's
35,000 during
grew
of
about $27,-
cline.
The number of
thousand
population
stood
last year, compared to
18
in
at
10
rebuild
their
homes and farm structures.
Until
came
shared
the
Public
along
in
two
Housing
Puerto
Rico
about
per
They provide complete domestic
banking facilities
through
a
July,. 1940
and
increased
had
1,878,000 to 2,220,000.
births
about
widening
and
loans, averaging $5,000 each, have
dustrial
be&rmade in Puerto Rico since
expected
ultimately to
1ROYAL
SAN JUAN
3 branches in Puerto Rico
re¬
level
r \imm
SANTURCE
MAYAGUEZ
OF CANADA
mid-
HEAD OFFICE, MONTREAL
New York
Over
development
1 HE
O
Agency, 68 William Street
between
means
persons for which the
world¬
correspondents the world over.
340,000 —from
gap
deaths
on a
than 730 branches of
more
Royal Bank in Canada and .abroad, and
1949, the Puerto Rican population
reports 740
wide network which extends throughout the whole
thousand people.
Act
The Farmers
40
Between
The
Home Administration
a
During 1949, Janer said, 87,457
births and 23,325 deaths were
principal Federal
housing programs.
the
1940, reported Jose L.
of
or
wide basis
12 in 1948
of
build
Rican businessmen
deaths per
corded. Births maintained
program of loans to help
of
banking service; in addition, they offer Puerto
000,000 to finance the first year
\ its
opened in Mayaguez and Santurce in 1911 and 1941 respectively. These
Caribbean Area and Central and South America.
tics.
search program arid the Farmers'
Administration
PUERTO RICO
in
ing to insular government statis¬
$3,000,000 to finance
housing re¬
cere¬
the Governor.
San Juan branch has been in operation since 1906; other branches
three branches form part
1949, accord¬
Statistics Bureau.
a
the
attended
Royal Bank of Canada has been doing business in Puerto Rico continuously
for 44 years.
23,000
Janer, Chief of the Insular Vital
farmers
The
population
Igpance Agency is seeking about
Home
44 years
were
and
world
v
The death rate continued to de¬
000 for loans and $500,000,000 for
to
in San
Despite the migration of 29,000
programs.
Congress authorized $1,000,000,-
grants
200
and
Reports Puerto Rican
Population Rise
others,
ance,
business
monies at Fortaleza, residence of
occupied.
The program was delayed by war¬
time shortages of materials.
persons
Housing
Rico
Puerto
ing virtually all the assets of banks in this class,
Of these all
and
finished
are
propriations of the funds author¬
ticipate in the Act's Slum, Clear¬
banking laws of the
certificates of admission to
Corporation. Hold¬
1,581 in Ponce,
2,479 else¬
the Island.
on
under other sec¬
tions of the Act are awaiting ap¬
Puerto Rico hopes to par¬
granted
instil
Juan, and
but 280 in Ponce
Assignments
ized.
were
the
totaling about $150,000,000, the Puerto Rico banks
now
become
integral units of the continental
U. S. A. banking system.
Presidents of the banks,
members of the government
as well
as of the
stability
when seven financial
under
the Federal Deposit Insurance
PHA's
the
under
to
units in Mayaguez,
831
Island
greatly
chartered
the Insular
as
Insular and Federal funds
been pooled to
build 800
1937,
ing Housing Act of 1949.
The
PHA
first
assigned
the
Puerto
Rico Housing Authority
principal
of loans to buy farms
began in 1937.
first certificate for the Puerto Rico banks
accepts the
Cook, Director of the Federal Deposit Insurance Company
Treasurer, S. L. Descartes (far right) looks on.
PUERTO RICO'S economic and financial
tutions
Administration recently made two
Munoz-Marin (left)
Luis
Gov.
from H. A.
730
branches
through
Canada,
in
the
West
Indies,
Central
more
Island's in¬
program
ASSETS EXCEED
and
South
America.
Offices in New York,
$2,334,000,000
London and Paris.
I'
.
'
is
create jobs.
•
•
Volume 171
Number 4892
THE
COMMERCIAL
&
FINANCIAL
CHRONICLE
(1211)
r
t
V.J J
*
i
'X-
Exempt From Federal, State and Municipal Taxes
"
Payable From Unlimited Ad Valorem Taxes
American Political Methods and Ideals
,
r
"
.
.
.
Balanced Budget
•
;
a
'
"
"A" Rating
"-i
i
$
'v
i
t
■>k
PUERTO RICO has
never
obligations. Its bonds
are
States of America, or
by the Government of Puerto Rico,
defaulted
municipal sub-division thereof,
county,
municipality
or
nor
been delinquent in the payment of its
exempt-from taxation'by the Government of the United
or
by
any state,
territory
other municipal sub-division of
possession of the United States,
or
American
power
of
any
political and economic system.
an
The
political
possession,
any
state,
by the District of Columbia.
problems of foreign exchange since Puerto Rico is
the
or
or
or
by
territory,
There
are
or
any
or
no
American community within
extent
of its debt incurring
has been limited by law of the Congress of the United States to 10% of its
assessed property
valuation^ while there is
no
limit
on
its
power
of taxation to meet
obligations for which the full faith, credit and taxing power has been pledged.
Methods of budget control,
in accord with the best
BANK
for
auditing, accounting, lax assessment and collection
practices prevalent in mainland United States.
PUERTO
SAN JUAN
PUERTO RICO
are
20
COMMERCIAL
THE
(1212)
&
enrollment
Puerto Rico's
will
of
200
students
be constructed at
CHRONICLE
design
deserves
Training Program Highlights
Trend Toward Industrialization
of
these
special
Puerto Rico Wins Sugar Victory
buildings
mention.
U. S.
Agricultural Department, acting for Eco¬
Cooperation Administration, agrees to
purchase 220,000 tons of raw sugar from the
The
factory type of building construc¬
tion is being used for the shops of
these schools."
designed,
These buildings,
besides
being
nomic
so
cheaper
Island
s
r
schools and
SAN
trade
semble
now
Construction
industrial
and
of
School started
Arts
Industrial
the
in
1947.
Al¬
yet completely fin¬
education program of Puerto Rico
though not
has
ished, the plan at this time con¬
sists of a magnificent administra¬
great responsibility to meet
a
the
in
preparation of adequate
personnel to broaden the base of
Rico's industrial economy.
Puerto
Important steps
taken
have
been
by the Insular Government
this
toward
The
end.
present
comprises, in part,
program
seven
schools at San Juan, Caguas, Hu-
Ponce,
Guayama,
macao,
Maya-
and Arecibo with a total en¬
rollment of 1 093 students, which
tion
is
one-half
about
the
number
of
steel.
The smallest buildings are
60 by
120 feet and
of
area
7,200
plumbing and pipe fitting, mashop, radio, printing and
linotype
operations,
furniture
making,
Industrial
sewing machine operation.
and evening courses
were
offered last year in these
Part-time
schools to 362 students.
Diversified
Occupations
Pro¬
The diversified occupations
gram:
program
was
ordinators
in
offered
by
14
schools
high
18
co¬
of
the Island, with an enrollment of
364 students.
These students are
receiving training in a highly va¬
ried list of occupations including
watch-re¬
pairing, dental mechanics, radio
communication, X-ray technique,
factory
management,
welding, drafting
operation.
*
Veteran's
classes
erans
for
are
vocational
and
§
Training:
the
telephone
Special
training
of
vet¬
being held in the seven
trade schools and
and
and
Aguadille.
Students,
as
of
July *30^ 1949,'numbered 1,776. The
regular
and
include
viding
The
courses are
being offered,
refrigeration
high-grade
Industrial
me-
technical
Arts
School
in-
institution, pro¬
viding high-grade technical in¬
struction for 2,000 students, is a
unit of the
University of Puerto
It is financed by a
revolv¬
supported
International
Rio
Piedras
Piedras
students'
by
of
Function
School:
While
School
Arts
the
the
Rio
at
founded
principally
to
serve
the growing industrial
development of the Island, a sec¬
ond objective was that it should
was
become
nical
a
main reservoir of tech¬
training
established
has
ships
Latin
all
for
The Caribbean Confer¬
America.
ence
Spanish
for
scholar¬
30
stu¬
speaking
dents at the school.
The
techniques
taught
there
methods
continuing
and
are
a
of interest to visitors from
source
Latin
American countries.
Plan folt an
Expanded
Training
tional
order*
trial
and
widen
trade
vocational
education
Voca¬
In
effec¬
the
the
scope
and
the industrial
more
The
floor
of
area
Mayaguez, and
Schools
feet;
shall
the
Ponce
be
build¬
Funds for Vocational Education:
a
crease
in
clear picture of the in¬
funds for
all
look
at
23,
Legislature
fits of the
1931,
the
us
Insular
on accepting the bene¬
Smith-Hughes Act ap¬
propriated the
match
let
get
pertinent figures.
some
April
the
of $113,000 to
sum
program,
the Act.
$105,000
provided
2©f
indus¬
the fol¬
In 1941 this
creased to
$160,000.
the
sum
Three
schools
Regional
will
Arecibo,
These
Act
were
tended to Puerto Rico.
the
ex¬
To match
$280,449.91
provided by this
Insular Legislature ap¬
propriated $292,449.91; this sum
law,
the
being increased in
1941
and
1942
by $30,000 and $25,000 respective¬
ly. On Aug. 1, 1946 the I amount
appropriated
the
Puerto
to
George-Deen
Rico
Act
by
in¬
was
creased by the George-Barden Act
to
$358,575.90. On March 2, 1948
it was again increased to
$402,300.63.
Besides
Insular
Planning
recommended
several
appropriations for
tion
and
trade
Board
has
additional
the
construc¬
equipping of vocational
schools.
On
May
9,
1949
these appropriations amounted to
$3,201,074.
or
be
trade
area
constructed
Mayaguez,
and
at
cities
the
from
Cities Authorized
attend these schools.
and
cafeteria
Transporta¬
facilities
will
A second group
refining.
in
third
at
Aguadilla, Caguas,
group
of schools, with
limit
to finance growing
municipal needs.
The
House of Representatives
unanimously approved legis¬
lation permitting two
Puerto
has
Rican
cities
increase
to
indebtedness from 5%
their
conservative
public
to
10%
property
of
as¬
sessments.
Training to Meet Needs of Industry
Washington, but
by the 135,000
the
man
of
the
this
will
be
persons
and
States,
part
1,600
some
miles south of New York.
Agriculture
The Organic Act limits munici¬
1949
Puerto
of
Rico
har¬
1,277,000
tons.
Hawaii
and
here
all
but
90,000
charged
Department,
The
to increase in¬
—
Department
therefore
was
of her
potential 1,250,000 ton crop
agreed to buy from Puerto Rican
this year.
In order to get rid of the prosective surplus with a minimum
producers 220,000 tons of the raw
shock to the insular economy, the
acting for the Economic Coopera¬
tion
Administration,
needed this
sugar
recently
for
year
army-
To
Puerto Rico the
$20,240,000
sale
means
income, 3.5 mil¬
more
millers
growers,
and
of
selling 220,000 tons to the ECA
at
world
t V
prices.
The Island
got roughly $2,640,employ¬
ment and another year's reprieve 000 less for its sale to ECA than
before it must trim its production it would for the same sale on the
lion
fit
to
man-days
more
1948
the
quota
Federal
The
of
structure
Sugar
of the
Rico's
the
own
for sale in
of
amount
she
sugar
interstate
S.
The
day, however, the
U. S. Supreme Court, in effect,
recognized the right of Congress
limit
U.
Act.
same
Puerto
can
refine
tion
Sugar
Producers'
estimated
that
Interior
—
Chapman
said
in smaller
profits, while the work¬
would
absorb the other $800,-
ers
in
lower
tions be declared unconstitutional,
will
the
Supreme
problems
1948
Sugar Act.
Court
upheld
the
continue
can
fine
J 126,033
tons
of the
This
bring
wages.
of
tons
raw
can
the
sugar
means
an
an
on
the
Island
until
it
is
new
to
only
Offering Puerto Rico
the Sugar
the main¬
Refunding Bonds
annual loss
Ira Haupt &
Co.* Ill Broadway,
New York City, headed a group
agricul-* which is
offering $1,895,000 vari¬
tural economy is based primarily
ous
Puerto
Rico
Municipalities
on sugar, it can neither
grow all
refunding
3%
bonds
maturing
the sugar it is capable of growing
serially July 1, 1950-69, inclusive,
nor refine more than 15% of what
at prices ranging from 0.75% to
it is allowed to grow, because of
2.70%,
according
to
maturity.
the Sugar Act of 1948.
The group was awarded the bonds
This law divides up the U. S. March 15.
sugar bowl. It tells Puerto Rico,
Associated in the offering with
Cuba, Hawaii,
the
Philippines, Ira Haupt & Co. are Banco de
Louisiana, Florida, and the main¬ Ponce of
Ponce,
Puerto Rico;
land sugarbeet growers just what
Paul Frederick & Co.; F. Brittain
portion of the bowl each can fill.
Kennedy & Co. and Seasongood
Only Puerto Rico and Cuba & Mayer.
the
We
own
~
Island's
and offer:
$184,000
PUERTO RICO, U. S. A.
cur¬
Water Resources
rently stand at about 4% of their
assessed
present
Authority
property value. But "the
5%
debt
limitation,"
2.70 Electric Revenue Bonds due 1974-77
he
i
said, "does not provide
(Callable)
necessary
margin which these municipalities
require to meet the increasing
sponsibility for
providing
tial public works.
.
.
■-
According to Chapman,
31, 1949,
valued
MACHINE SHOP in Puerto Rico's School of Industrial Arts where
•
2,000 students
a**e
receiving technical instruction basic to the Island's
program.
The school is entirely* supported by
i
Industrialization
i
students' tuition fee*;. Another 2,000 students are receiving tech¬
nical training in the Department of Education s trade schools.
Arecibo's
at
was
Property in Rio Piedras
sessed at
-
INTEREST EXEMPT, IN THE OPINION OF COUNSEL
FROM
on
property
$19,624,000
bonded indebtedness
Priced to Yield 2.70%
re¬
essen¬
."
and
Oct.;
was
ALL
FEDERAL
AND
STATE
INCOME
was
its
$809,545.
as¬
$29,738,000. while its in-
to
more
re¬
910,000
estimated 4,000
Rio Piedras
debts
sugar
allowed
nearly the amount of
that sugar it is able to grow, and is
tell permitted to refine all of it.
grow
The court's decision means
Secretary Oscar
their
Rican
$960,000 and $880,000 respectively
—Puerto's Rico's fourth and fifth
cities
Associa¬
Puerto
growers and millers would absorb
000
commerce.
market.
A 1950 Puerto Rican sugar cri¬
Denying the Insular Govern¬
ment's appeal that such limita¬ sis has been solved. But each year
In recommending similar treat¬
and
workers
agreed to share the reduced profit
occupied Western Germany.
debtedness up to 10%.
ment of Arecibo
of
prepared to tell Puerto Rico to
harvest only some 1,100,000 tons
San Juan, Ponce
—
Mayaguez
tons
Agriculture Department,
with administering the
ments permitted the Island's three
and
the
permitted the Island to
pal debts to 5%. Previous amend¬
largest cities
on
felt Sugar Act, expects no big domes¬
who tic deficits this year.
(Philippine
cane deficits go to Cuba, under the Act.)
southernmost
United
The
sell
since
her 1949 crop.
place
took
mills
sugar
of
mainland
re¬
upon
quota deficits
areas.
crop
in
But the
most
fields
a
Deficits
of growing
developments
Although
permitted to exceed 5%
of schools, with
enrollment of 300 students will be
Guayama, and Humacao.
Vocational
and
lift
to
is capable
Island
Both
efforts
jobs and $20,000,000 in income.
Arecibo and Rio Piedras
During
vested
the amount of sugar
on
the
land.
men¬
provided.
A
strictions
her
to the Island of
To Increase Debt
each.
tioned and the nearby towns will
in
Act allows her to sell
plan, 1955, will have an
Students
be
balked
fill the
to
war
of the other
income
more
Puerto Rico that she
Two Puerto Rican
the
time, she has been
same
Congress
Ponce.
enrollment of 1,000 students
jobs and
more
At the
to
these
appropriations
made by the Insular Legislature,
schools, at the end of the
six year
tion
vest
consistently met their quotas.
They have been called
from her sugar economy.
by
in¬
was
$130,000 and in 1942 to
In 1937 the benefits of
George-Deen
this
victory in her struggles to har¬
a
the fields
of vocational education
Rico
have
Puerto Ricoyear has won
JUAN,
square
that
To get
SAN
Puerto
of the Aguadilla, Ca¬
Guayama,
and
Humacao
shall be 33,600 square feet and
that of Cayey and Utuado shall
be 17,600 square feet.
On
'
Rico's income.
Arecibo,
guas,
a
f
Germany. Removal of restrictions on production imposed by Congress would increase Puerto
(Special to The Financial Chronicle)
Vocational
100,000
*
requirements of occupied forces
meet
in
re¬
lowing plan has been prepared.
sity of Puerto Rico
the In¬
buildings,
ing in which the trainees will go
to work when
they finish their
training at the vocational schools.
the
Program:
increase
to
tiveness
the
school
,
constructed
sular Legislature.
modern
most
ing fund created by the Univer¬
and
with
at
Eio Piedras: This
Rico.
about
complete schools of this type
mainland.
The school is
entirely
in four veterans' vocational trade
schools at Cayey, Utuado, Farjado
the
in
at
compares
the
on
i chine
valued
and
found
and
is
Industrial
the
at
School
Arts
$15,000,000,
tuition fees.
and
floor
The
a
feet.
This is the machine
Equipment
that
dressmaking
have
square
largest of the shop buildings is 80
by 400 feet.
shop.
applications.
Tuition
is
free.
Training is being given at these
schools in auto mechanics, electrie wiring and electric motors,
carpontry,
as
building and fourteen class
shop buildings of structural
and
guez
•:
ornamented
of diversified occupations
being followed.
JUAN, Puerto Rico—The
vocational
attending trade
now
program
is
'
students
to
cost than the traditional
per area
More than 3,000
Thursday, March 23, 1950
each
Cayey and
Utuado.
The
-
FINANCIAL
'
GOLDMAN, SACHS & CO.
TAXES
THE
Volume 171. Number 4892,
COMMERCIAL
Continued from first page
V'
(1213)
directed principally at
reform, launched the elec- 4
toral campaign of 1940, appealing
directly to labor and the middle *
*
21
Low-Cost Housing Project
eco¬
nomic
Survey oi Puerto Rico's
class ior support. In the elections .i
1940 the Popular Democratic.'
;4'
V' t
FINANCIAL: CHRONICLE
Democratic Party and with a pro- :
gram
■
&
of
iifbdndly r by the ^investroeoi of
transpired? ' What is Ahe picture mainland capital. The island^ totql
today? i Why is Puerto Rico again output; and social income were
in" the money- market?.. What is greatly increased. * In spite of the
the future of those, investments? - roads, new forms of employment
Puerto Rican economy;7What has
■4
During
of!
the
first three decades
American
Puerto
development-in
approximately $120,-
Rico
000,000 flowed into the island and
was
invested
in
the
of commercialized
to
lesser
a
development
agriculture and,
extent, in the
marked
ment
of
by
the
promo¬
wealth
developed.
lation.
The period
1939
in
wide
sugar
agricultural
was
the
develop¬
island,
industry. The
ment,
of
the
island
and
The Insular Gov¬
ernment embarked
during this
prise of Puerto Rico,
tions and
on
an
extensive
public works and
the elec¬
a
the
is
a
tions were created to lay the foun¬
after 1928 and until dations for economic expansion,
development of the and to improve the public services
marked by
reduction in
contraction
Puerto Rico
was
unemploy¬
production
of
and facilities of the economy.
income.
hit with the
same
pe¬
impact as the mainland by the
of
forces of the depression. The value
$50,000,000
of exports fell heavily from over
were spent on the development of
$100,000,000 to $75,000,000 in the
roads, municipal utilities, school
years
1932-33, and as a conse¬
houses, irrigation, and power
quence the island suffered a sub¬
plants—the foundations for eco¬
riod
won
irhmediately began put¬
ting into effect a program directed
and tremendous increase in pro¬ Ut the improvement of the welfare
duction and in exports, the income of the masses. This included land
per capita
and the standard of reform, the development and di¬
of
agriculture and
living, as measured by American versification
standards, remained low as a re¬ industrialization, the development
of
power.
Agencies and corpora¬
sult of the rapid growth of popu¬
tion of manufacturing. This period
is
Party under the vigorous leader¬
ship; of Munoz Marin, to the sur¬
program
some
The
Rico
Land
was
Authority of Puerto
created to carry out the
land reform program.
The Puerto
Rico
Agricultural
Development
Co.
was
established to design and'
develop
and
to
new
commercial
crops,
develop
new techniques
technology in agriculture. The
and
Puerto Rico Water Resources Au¬
stantial
curtailment
in
income. thority was
created to expand
Big sugar mills,
Thus Puerto Rico wound up the electric power.
The Puerto Rico
railroads, tobacco factories and
years known as the 30s.
Aqueduct and Sewer Authority
new lands were
put under cultiva¬
was
created in order to consoli¬
tion. and banking and other credit
Program of Economic
date the municipal systems into
facilities were expanded substan¬
Development
one
efficient organization.
The
tially.
In
the late
30s
Luis Munoz
Industrial Development Co. was
The economic and social pattern Marin, the present Governor of
of Puerto Rico was affected pro- the island, founded the Popular
Continued on page 22
nomic expansion.
SECTION
of
thousand
homes
constructed.
low-cost
$25,000,000
suburbs, built by
project
housing
in
San
Juan
Five
mainland operator wiJh FHA financing.
a
sell
to
at
an
average
of
$5,000
each have
been
Puerto Rican Government funds have built an addi¬
.
tional
7,500
costing
units
housing
over
$35,000,000.
Modern Roads Facilitate Transportation
!i
t"
Puerto Rico Bonds
Corporation and its predecessor organizations have been identified
This
•*
with the
underwriting of Puerto Rico Government, Municipal and Revenue obligations lor
the past twenty-five years. ^7
;; "•7; 7!; v .7-77; <y.-fyv,7:7: 7^7^
J
■
of the underwriting account which offered in JahuaiV 1944
■7 the first public revenueissue of size originating in Puerto Ricq, This issue consisted o£
$20,000,000 Water Resources Authority Electric Revenue Bonds due .1945-1969 of
which $10,200,000 were offered publicly by the underwriting group and $9,800,000
were
placed before the public offering.
7. ';
!•
</
\
;
, •
!
;
-7
We
were
joint
managers
■
,
capacity we offered in March 1947 the new issue of $50,000,000 Water
Resources Authority Electric Revenue Bonds due 1947-1977 and in August 1949 the
new issue of $22,700,000 Aqueduct and Sewer Authority Revenue Bonds* $4,200,000
:
due serially 1952-1958, $18,500,000 Term Bonds due 1979.
7;
c«;
In the
same
We maintain
secondary markets in these issues and are
in
a
QUICK
position to supply
transportation
statistical information.
an
are
$ 43,000 due July 1, 1955 to
requirement
indispensable
a
in
the
stretch of the highway between
San Juan and
offering at present, subject to prior sale, $491,000 Puerto Rico
Resources Authority Electric Revenue 2^% (callable) Bonds, as follows:
We
is
Pictured above is
20th Century.
Ponce.
Water
World's Most Modern Chinaware Factory
yield 1.90%
115,000 due Jan. 1, 1956 to yield 1.95
95,000 due July 1, 1956 to yield 2.00
?
120,000 due Jan. 1, 1957 to yield 2.05
j
118,000 due July 1, 1957 to yield 2.10
f
(yields figured to maturities)
Under the
therefrom
;
provisions of the Acts of Congress now in force, these bonds and the income \
are, in the opinion of counsel, exempt from Federal Income and State taxation.
\
Maximum annual debt service
requirements (principal and interest) on the $48,045,000
outstanding Water Resources Authority Electric Revenue Bonds are covered approxi¬
mately 2.20 times by earnings for the 12 months period ending January 1, 1950.
\.
^
The
FIRST BOSTON
!
i
CORPORATION;
Pittsburgh
Boston
New York
United States Government Securities
•
State, Municipal and Revenue Bonds
Industrial, Public Utility and Railroad Bonds and
Canadian
and
Foreign Bonds
Underwriter
•
•
Chicago
San Erancisco
Cleveland
Philadelphia
!
Bank
and
Stocks
- ^
Insurance Comrany Stocks
Distributor
•
,
Dealer
above
PICTURED
a
section
removed
is
a
general view of the Crane
where the-glazed china is: checked
burrs
the
-
created
pieces during the baking and
by
the
employees
China plant in
Here workers
used to suspend the
"stilts"
glazing process.
facility, the world's most modern chinaware
of
over.'
The new $1,500,000
.factory, has hundreds
and can produce 25,000- doeen
pieces weekly.'ySRe
"
I iV 1
i
Df the factory is Vega
Baja, Puerto, Rico..<- * *
22
(1214*
d
from
21
Pa9e
'V
'
'
m
tion
_B
i
■
■
li lftSVI#11211
■
rilalftlUIl
established in order to foster the
tion and health services have been:
establishment
greatly expanded.
In short, the
Puerto Rican people, in the last
part of the first half of the cen-
of new industries,
Transportation and Com-
and the
were
es-
tablished in order to improve their
respective
The
community
Government
Bank
D
services,
1 cpment
e v e
established
was
in order to
furnish long-term capital for
development and to act
Fiscal
Ag&it of the Insular
ernment.
Large
Government Surpluses
Accumulated During War
as
Gov-
The pr0gram carried
low
cost
housing
undertaken, and educa-
Government
made
of Puerto
possible
invested
were
spent wisely in current operations,
income, $424 million
USed for operating expendiduring the period, plus $22
were
tures
million used in
•
The
by the
ment,
Rico
a
was
in
public
expansion.
disbursed
million,
for
current
ex¬
were
as
works
United
in
of bonds
the
of
made
Enterprises
/
In
times
generally
States
issuance
sale
to
standard of
a
public corporations.
great
a
and
surpluses
ard
living and
social
of
ment that surpasses
ing -the
develop¬
in general all
Argentine,
(countries
effort
by
taxing
Uruguay
finance
the
exten-
times the
Chile
and
with many
of
resources
the
in
The total recurrent
t
1941-
revenues
the
on
island of Puerto
Ricans
determined
are
increase of 3 xk times, which com-
.
pares to an , increase in total in- and to continue in their path
sular
:,
•'
income
net
million
$22o
$650
of
from
land.'
some
to ^approximately
million,
the
people of; Puerto Rico
have
taxed themselves somewhat
more
than
their increase in
How
do
the
of
,
propriations in 1948 to
,
v
•
of tfye
total,
%d $17
education
-
7
of the island at present?
What is
is
the
the burden of the debt service?
The
the
all
Puerto Rico amounted to
000
1950. However,
$5 169,995.61 in the re¬
demption
sperit
$7,546,004.39.
thus
$12,716,-
Feb. 28,
of
as
lent to 23%1hf the total, was spent
the im¬
provement and ^maintenance
the health of
The
improvement
was
funds
leaving
*
govern-
'.rnent services has resulted in in¬
creasing
by-25%
the
children, of school
number
of
attending
age
school; registration at the University has been increased two
v,fold; the' mortality rate has been
decreased
Munoz-Marin's
"Operation
shown
abo
is
still
another
testimonial
Bootstrap,"
to
Governor
the master plan of economic recovery that, in only
years, has resulted in the establishment of more than 50 new
industries in Puerto Rico.
Luis
a
few
46
to
22lk%\ and life
has
tancy
re,
been
expec¬
lengthened
57 years.
from
The police force
-increased
twice; 41 fire sta¬
throughout the
island; municipal rural road mile¬
was
tions
were
built
under conservation
age
was
more
than
TO PUERTO RICO & DOMINICAN REPUBLIC
doubled, and vast programs
of soil conservation and agricul¬
tural
scientific
experimentation
were
of
these
debt
net
a
NEW 11-DAY
CRUISES!
;
There
about
not
cannot
the
fact
Expenditures
be
that
any
question
Puerto
only has conserved
Enjoy a fascinating cruise aboard
new-styled S. S. PUERTO RICO.
Modern
parlor-bedroom state¬
face
rooms
decks
sports
tional
.
..
...
the
sea.
indoor
Promenade
and
outdoor
the
U.
S.
Insular
to'jthe Organization'
Congress
of
Puerto
all
fore,
taxable
The
such
of
$458,219,713
1917) the
legal debt
of the assessed valu¬
Rico.
valuation
The
of
Government's
limit is 10%
ation
in
property
total
assessed
property
was
Jan.
1,
1950.
Government, there¬
on
Insular
could float
securities up to
$45,800,000 at the present time. A
classification
scientific
sessment
and
reas¬
project, with the techni¬
cal advice of the Public Adminis¬
tration
will
Service of Chicago, which
be
pected
completed
to
valuation
partial
is
soon
ex¬
increase the assessed
substantially. The last
assessment
in
made
was
1926.
Revenue
treasury
receipts of the insular
for
amounted
to
the
last
five
years
$382.4 million,
or
a
dining
salon. See historic San
Juan and
Trujillo, too. No repack¬
ing— S. S. PUERTO RICO is
Ciudad
dockside hotel.
■
all facilities for tradi¬
From
shipboard relaxation. Care¬
Alternate
fully trained stewards. Coral Cafe
for cocktail
dancing
superb
Low-Income Housing Provided by Governmen!
<
$297
Thursdays
from New York
...
Consult your travel agent
or
write:
115 Broad St. New York 4, N.Y.
PUERTO RICO
DOMINICAN REPUBLIC
Weekly Sailings
*New York
*New
York
Weekly Sailings
to San Juan
to
San
Juan
-
Ponce
-
-
Ponce
-
Ponce
-
*New York
Mayaguez
Baltimore
to
San
Juan
Mayaguez
f
Ciudad Trujillo
New York to Puerto
Philadelphia to San Juan
-
Mayaguez
Sailing
to
Sailing every two weeks
every
LaRomana, Barahona.
ville to San Juan, Ponce,
Mayaguez.
SOME
Puerto
here
of
the
Rican
are
'Refrigerator Space.
$35,000,000 in low-income housing
Government
moving into
Thirty-seven
three weeks
Charleston, Savannah and Jackson¬
Plata, Macoris,
Mayaguez,
other
Caguas,
a
is
new
housing
Bayamtm
reflected
block
of
projects
and
in
this
other
under
cities.
provided
picture.
apartments
are
by
the
Families
near
San
way
in
Juan.
Ponce,
Construction
is
being financed by loans from Public Housing Administration over
60-year period at 2.75% interest, and by subsidies up to 3% of
cost of each
development.
>
V
" 5
Act'of Puerto Rico (Jones Act of
Rico
its credit
and cash resources but it has been
cuisine in air-conditioned
issues,
of only
general assessment of property in
Puerto Rico was made in 1917. A
undertaken.
Wise Government
According
of
'
in
}
principal amount of
outstanding issues of securi-i
gross
for health service. Therefore, 70%
of the total operating budget is
v
)
ap¬
cover
the^Deople.
'•/
situation
What
.
v
•
financial
-
govern-
on
obliT
again to the market
public works.
was spent for
million, equiva-
education and
v
be-
-
there
on
record
or
to borrow funds to be invested in"
.'operating expenses of the government some $27 million, or almost
.,"27%
spiendid credit
come
-
Puerto
Out of $93 million of
ment?
of
of ^Puerto
people
ing delinquent in their debt
Rico invest their funds in operat-
) ing expenditures of the
a
objective
an
having defaulted
never
gations,
income.
people
the
Rico with
somewhat, less. 0f
or
To reach such
progress,
■yithftt three<times.,- Ift other words,-
plant,
obtain
to
the levels of living of the.-iftain-
•
|||
Manufacturing Co.
Rico
will not stop at the highest level
0f living of Latin America.; Puerto
.
government increased from
Beacon
island)
these two million Americans who
live
initiated
works
-
THE
stand¬
a
economic
Latin American countries except¬
„J# some $25. million to $92 million
^'V^-^een 4980-40 and 1948-49, an
~
were
The effort is not stopping there.
Although Puerto Rico has attained
money
and
reduced
was
public
.
;
char¬
sive program of development and
42.
,
and has conserved its
revenues
saved.
The pe0pie 0f Puerto Rico have
t
themselves
Another of Puerto Rico's Industrial
Corporations
; People Have Taxed Themselves
$107
public
for
Public
sum
follows:
spent
in
the
market
and
This
credit.
from
but conserved for in¬
economic
was
accumula-
$267 million,
saving of the govern¬
used
not
its
vestment
long-term domestic financing and
appropriations and only approximately $60 million were obtained
difference,
penditures
by the
emergency
for a total of current
expenditures of $446 million.
program
vestment
on
war
a
Rico for public works and the in-
for economic expansion has been acterized by heavy borrowing and
lavish spending, Puerto Rico em¬
done overwhelmingly with the
barked on a wide and far-reach¬
island resources.
Out of a total
*1 $337 million of government ap- ing program of development
propriations and long-term fi- backed by wisdom. Not only was
nancing, $277 million pertained to money soundly invested, but debt
this
represents
J
scale
has been
tury, have approached their problems with tremendous energy, imagination and maturity, conforming to the American tradition,
of
eco¬
nomic
works, $16 million
war
$8 million pertained to income received from bond issues.
-
,
munications Authorities
the
Thursday, March 23, 1950
From the fiscal year 1941- in debt service, and $144 million and a considerable, part of the
42 t0 1948_49' the total revenues invested in the government's pub- resources have been invested in
of the government amounted to lie corporations.
agencies designed to foster eco$713 million, of which $705 milThe long-term financing opera- nomic development. Puerto Rico
lion w?re revePues as such and tions of the Government of Puerto has made very judicious use of
l*AC!vflAVi
lllallvlal
1
of surpluses during
CHRONICLE
years.
,
a( DhavIa 1#V/IA'P
UI 1 UClIU XllvU g)
\nn»AVr
tfUIVCy
FINANCIAL
&
COMMERCIAL
THE
Volume
171
THE
Number 4892
yearly
$76.5
million.
insular
treasury
of
average
the
annual
debt
Puerto
Rican
economy
The
debt
net
standing is, therefore,
<
-
l.i%
of
the
a
The
Insular
now
out¬
floating
over
this
of
Insular
Low
little
income
net
the
debt
of
-noting that the U. S. Government
the
23
01 u Operation
million issue!
Boofslrap"
is
If
tp the, net
outstanding the public
now
parable,
worthwhile
(1215)
New Textron Plant Product
Debt
added
is
debt of Puerto
be
CHRONICLE
re¬
Government"
$18
an
amount
island. Although not strictly com-
it might
FINANCIAL
economy.
esti¬
was
revenue
income of the island's
the net
to
mated at $650 million for the year.
.1948-49.
limit, the total
ceipts of the insular treasury and
revenue
receipts are about ten
times the net debt at the present
time.
The
net
income
of
the
&
"
•
Thus
COMMERCIAL
Rico will be 5.7%
assessed
/valuation of the
property, annual
revenue
receipts
debt is 113% of the net income of; will be three times the net public
*the nation's economy.
come
of the U. S.
is :1948-49,
billion
sular
i
of
present
•
The net in¬
debt, and the public debt will only
$223 billion
be 3.9%
compared"
public
debt
was
of
debt.
Puerto
time
is,
island's
$252.8
to
The
Rico
at
therefore,
of the net income of the
What is more
economy.
in¬
important,
the
servicing
the
this
estimated" cost
debt
will
be
of,
only
about 3y2% of the annual revenue
ex¬
tremely low compared to the legal
-V
receipts.
Modern: Construction
Typifies Puerto Rico
of 1950
■
■
t
i ■■
h
j
i '4
THE
of
NEW
Textron plant
above, is illustrative
at Ponce, Puerto Rico, pictured
of the
"Operation Bootstrap," the master plan of economic recovery instituted several
achievements
years ago
by Luis
Munoz-Marin, Puerto Rico's first elected Governor,
:
j£.
i
!
f;
«*-
n
new
J
^o tiatfeJ.the program has brought more than 50
industries
the Island.
•
'•}
•
■
#
\
<
T"
X
r
We
are
actively interested in
major underwritings
of Puerto Rico
THE recently
completed Clinica Pereira, pictured above, illustrates
the
of
trend
modern
building in Puerto Rico.;,
Securities
Consultants
A
on
Constructive Service to
As Consultants
structive
on
planning
assistance
in
reorganization
Municipalities
Municipal Finance
service
governmental units.
•
Municipal Finance
This
for
service
development
of
Cities,
of
existing
includes
relations.
SECURITIES.
We
WE
are
cial institutions and
DO
financing,
structures,
NOT
con¬
experienced
new
the financing of self-liquidating projects,
public
a
States and other
plans for
debt
render
we
BUY
and
planning
financial
OR
SELL
pleased to cooperate with finan¬
investment
Lee Higginson Corporation
Underwriters, Distributors and Dealers in Municipal Bonds
and Corporate securities
houses.
NEW YORK
Wainwright, Ramsey & Lancaster
70 Pine Street
New York 5, N. Y.
Telephone WHitehall 4-3540
BOSTON
CHICAGO
• '
•" it
;
(1216)
24
THE
COMMERCIAL
Group Urges Foil Social
Security lor Puerto Ricans
Subcommittee, after tjbreerecommends full Social Security
residents, thereby strengthening
for
Caribe
new
situated
coverage
CHRONICLE
the
at
Hilton
Public Utility Securities
Hotel,
of
crossroaos
By OWEN ELY
tne
Outlook for Electric Utilities
Americas, San Juan, Puerto Rico,
is expected to be the impetus for
Calvin Bullock in
the commercial and tourist growth
of the West Indian island. Since its
Island's economy.
opening
in
December,
For the past 17
the
1949,
charged
living and working conditions in
result
of
Puerto Rico, a special House Sub¬
curity taxes
three-week
a
in
committee
of
February
urged
Security for
Puerto Ricans and Virgin
Island¬
The six-^man
Ways and Means
Subcommittee, headed by Rep. A.
Sidney Camp of Georgia, made
seven
specific recommendations
insular Social Security
coverage in line with the States.
They estimated that their rec¬
bring
to
would extend
ommendations
cov-
to 130,000 Puerto Ricans and
age
Virgin Islanders not
existing legislation.
1,900
cov¬
ered by
The
Committee
urged
to
dependent
Camp
extension
of
aid
articles
inclusion
as
as
Social
of
a
Se¬
cost of produc¬
a
committee
The
recommended
which
provisions
special
Puerto
allow
'I
ers.
for
tion."
Social
Federal
full
survey
Islanders
to
Survivors'
Ricans
and
would
Virgin
Old-Age
earn
Insurance
main
year.
the
being raised to $100
and
the main¬
land.
needle-work
the
in
ers
"These
the
are
work¬
industry.
people who need
these
reforms
estimated
would
that
increase the
from
the
people of both Puerto Rico and
the Virgin Islands do desire to
be brought within the Social Se¬
curity system and that they are
prepared and indeed willing to
pay
the same employment tax
rate imposed in the Mainland."
about
$11,000,000.
"strengthen
the foundations
the economy" and correct its
derlying lack of economic security
majority of Puerto Ricans.
for the
In
recommending inclusion of
Virgin Islands
Puerto Rico and the
in the
present old-age and surviv¬
ors' insurance program which for
a
large number of Americans pro¬
a
pension at 65, the com¬
vides
mittee said:
"It
should
be
borne
in
from
States
all
almost
the
of
their
benefits to
Continental
investment companies
rooms for banquets, busi¬
meetings and social functions.
Co.
opment
as
by the
The architec¬
Corp.
pany
decorating is of
style and considered
10
minutes
time
direction of the
from
ers'
own
the
Sweney Cartwrighf
The Calvin Bullock opinion is
work¬
calls
constributions.
are
Puerto
in
a
bill
for
legis¬
V
Rico's
over-all
LOS
ald
Hughes Opens
James
at
engage
South
in
a
Grand
Avenue
securities business.
to
F.
COLUMBUS
Merkel
with
has
found
OHIO —James
F.
?
Cartwright & Co.,
Building.
Mr.
formerly chief of the
Ohio
Division
prior
thereto
Clark
&
&
Securities
of
Co.,
Inc.
\
;
Co.
this year.
induce
How With Kaiser & Go.
(Special
The
.
SAN
to The Financial Chronicle)
FRANCISCO,
Sherman
Hoelscher
Building,
the
San
Exchange.
'Mr.
-members
Francisco
Stock
Hoelscher
was
of
FRANK
G.
formerly
partner
a
KANSAS
WANGEMAN,
M.
CITY, MO.
—
a
expansion program is expected to reach a peak
Some authorities are fearful that political pressure may
utilities to build up excess capacity, with a burden of
The average electric utility is highly flexible, with a
industry coupled with economies arising from constant technical
progress."
Edward
-
Reed, Inc., 1012
Baltimore Avenue.
."
are
"Actually," the study concludes, "if the industry had not been
subject for a long span of years to constant rate reductions, present
earning power would have been far in excess of the allowable
rate of return. This is illustrative of the dynamic growth of the
Mclntyre has been added to the
staff of Waddell &
one-third in fuel
channel sales and promotional efforts towards
using capacity most profitably. An alert management can also do
much to stabilize earnings by installing fuel clauses and demand
charges.
(Special to The Financial Chronicle)
Hilton Hotel.
GENERAL MANAGER
The great
management can
Waddell & Reed Add
Reservation Office: The Plaza, 5th Ave. & 59th St., New
or any
.
great range of profit between the lowest rate steps in heavy in¬
dustrial sales and the residential rural and commercial rates. Good
Sherman Hoelscher & Co.
in
travel agent, write direct, contact Caribe Hilton
York, Telephone MUrray Hill 8-221*0
.
some
seriously.
become
associated with Kaiser & Co., Russ
in luxurious comfort and modern convenience.
Consult your
.
generating units will have a pro¬
operating ratios."
high fixed charges, depreciation and local taxes which would prove
burdensome in a period of severe depression. However, studies
made by N. A. Lougee & Co., utility consultants and engineers,
indicate that the danger of over-capacity should not be taken too
k
CALIF.—
has
costs and
The utilities'
Sherman Hoelscher
.
be
to
available, since the
pound of coal as
against an average of 1,2 pounds for the industry and up to two
pounds or more for obsolete units. Further savings are made by
equipping plants to convert quickly from one kind of fuel to
another, to take advantage of changing prices or availability.
While little or no progress in fuel economy was made during the
years 1942-48 (partially because of greater use of obsolete plants)
gains have been rapid in 1949-50, and should continue with the
addition of new generating plants.
of
Fahey,
and
on
generators burn only eight-tenths of
newest
and
officer
an
was
effect
Possible savings of
associated I
become
Bank
was
Slayton
magnificent Caribe Hilton ... the newest and
glamorous hotel in the Caribbean .
has
opened ils doors in picturesque San Juan at the
crossroads of the Americas. With its 300 delight¬
fully air-conditioned guest rooms, each with private
balcony overlooking the ocean, beach, pool and
tropical gardens, the Caribe Hilton offers the utmost
appears
fcnaking the most favorable showing.
accounting and carefully selected load building.
of
Merkel
Sweney,
Huntington
Merkel
most
now
thermal efficiencies of the new
J. Hughes has opened
609
earnings
considerable weight. This is reflected in the cur¬
showing made with respect to operating efficiency. "Where
management is skillful," it is pointed out, "the trend [toward in¬
creasing kilowatt output and dollar revenue per unit of labor]
continues, aided by large generating units, remote control, inter¬
connections internally and with other properties, mechanization
(Special to The Financial Chronicle)
CALIF.—Ger¬
offices
ANGELES,
in
rent
ex¬
(Special to The Financial Chronicle)
United
acceleration
should be given
pansion of Social Security.
Gerald
rate of
selecting new and unseasoned securities which represent
operating companies recently separated from holding company
guidance and sponsorship, the caliber of the new management
participation in the Federal Social
Security program.
This was in¬
cluded
still
In
Security protection."
broaden
The
diminish|ng, and it is essential to seek out those companies which
might "force people under
to
con¬
weight should be given to certain unfavorable factors, which
for discriminatory selection and up-grading of utility hold¬
ings.
The House last fall passed
that favorable factors will
outweigh unfavorable influences, with respect to earnings
over the near-term future.
However, it is pointed out that
trends
to
Public Assistance for their Social
lation
objectionable up-stream loans of the past. There¬
strong capital structures because of the inherent advantages of
geographical, industrial and agricultural diversification as well
as the operating economies of large-scale operation with top-flight
management."
James Merkel With
It said it wanted to avoid action
which
the
up
it is not surprising that sophisticated investors have again
been
accumulating the better utility holding companies with
full
from
program of breaking
well along toward completion.
fore,
the San Juan airfield to the hotel. '
ually from outright assistance
derived
now
present-day holding companies," according to the study,
operating properties, reversing the
"Most
tinue to
benefits
com¬
"have become bankers for their
Airlines offer
travel
for
However, the SEC
holding companies is
Eastern Air Lines
American
capital.
equity
superior to other first class hotels
Pan
holding
assets to be sold for cash or distributed, while at the same
operating companies began raising large amounts of new
time the
interior
and
Puerto Rican
Puerto Ricans
many
Another market factor was the large amount of
leased
and
Hotel
earlier date by
and fiduciary institutions, which were the
principal buyers of utilities in the earlier stages of the recovery.
its
that
investor did not realize until then
majority of the state commissions had changed their regu¬
latory policies, and were willing to grant necessary rate increases.
and
The effects of these increases were foreseen at an
and
follows:
that the
snack bar
private
a
possible, but in such a way that
the emphasis would
shift grad¬
goods
already indirectly con¬
tributing to the Social Security
system
because
of
the
higher
said
due to the fact that the average
as
mind
are
fountain,
recommendations aimed at giving
also that these islands which pur¬
chase
including
soda
ture
as
However, market interest in utility stocks did not really re¬
until the second half of 1949. This delay appeared to be
in
ness
present
committee
The
summarize
dining
bill for Puerto Rico
$3,100,000 to
cial Security
of
un¬
the
restaurants
hotel
in Puerto Rico.
committee
The
Federal Government's annual So¬
ommended, the report said, would
five
are
Hilton
home
we
months the class A and B electric utilities have
awaken
There
mestic servants and
testimony submitted to your sub¬
committee," the report said, "it
was
clearly established that the
rec¬
throughout
same
This $6,500,000 hotel was built by
the Puerto Rico Industrial Devel¬
mittee said.
benefits
the
Raising
the
limit in
Puerto
Rico, the committee said, would
make ineligible "substantial num¬
bers
of
people"—especially do¬
ployment compensation, and aid
to the aged in Puerto Rico and
ttfe Virgin
Islands. "From
the
the
rooms and suites
ranging in daily
price from $9 for single, $12 for
and $17 for suites, all on
European plan.
These rates re¬
double
and
children, aid to the blind, unem¬
of
over
though they make as little as $50
every three months.
This limit is
on
from 43 states and
a
dozen
foreign countries.
hotel has single and double
The
recent issue of "Perspective" analyzed the
steadily reported aggregate gains in net income over the corre¬
sponding previous months. The highest gain was 25% recorded
last July, which has now tapered off to 8% for November. For the
12 months ended Nov. 30, 1949, composite net income was $746
million compared with $670 million in 1948, $656 million in 1947,
$650 million in 1946 (when savings from the omission of excess
profits taxes were realized) and $545 million in 1945. In about five
years, therefore, there was a gain of 38% in net income.
booking
credits
the protection the most," the com¬
Extension
ity
a
outlook for the electric utilities, which
Caribe Hilton has received capac¬
prices
After
Thursday, March 23, 1850
.
Located in San Juan
The
Means
weeks survey,
FINANCIAL
Caribe Hilton Hotel
House
Ways and
&
-
Joins
First Cleveland Adds
J
i
■
.
Titus-Miller; !
(Special to The Financial Chronicle)
(Special to The Financi/l Chronicle)
1
With Barrett Herrick
is
DETROIT, MICH. — Robert B.
CLEVELAND, OHIO—Joseph J.
Hadar and Joseph P. O'Boyle have Mill is now with Titus-Miller &
(Special to The Financial Chronicle)
been added to the staff of First Company,
Penobscot
Building,
ST. LOUIS, MO.—Alvin Stern
Cleveland
Corporation, National members of the Detroit and Mid¬
with Barrett Herrick jSt Co:, Inc., City East Sixth Building,- mem¬ west Stock Exchanges.
" j
i
■"
-
418 Locust Street.
1
-
bers
of
the
Midwest
Stock
Ex¬
change.
Brush, Slocumb Adds
SAN
.
FRANCISCO,CALIF.—
San Juan, Puerto Ricn
the staff of
1
Brush, Slocumb & Co.,
Montgomery Street.
;
,
.
.
..
.
v
}
(Special to The Financial Chronicle)
■;
..
Joins Frank Knowlton
(Special to The Financial Chronicle)
Geoffrey G. jLey has been added to
,.
Four With Bache & Co.
j
\
CLEVELAND, OHIO—Robert J.
(SpeciaJ to .The, Financial Chronicle)
Belknap, John W. Bray, Hal A.
OAKLAND, CALIF.^-Frank E.< Fausnaugh, and John L. Sandrene
Keefe is now affiliated with Frank
have
Knowlton &
Bache
Building.
.
Co., Bank of America
become
&
associated
iwith
Co.,- National City East
Sixth Building. ■
Volume 171
THE
Number 4892 ""
CHRONICLE
FINANCIAL
&
COMMERCIAL
(1217)
./
living policyholders. On the business side--from invest¬
figures that constitute the year-end statement of The
at
first
glance
.
.
.
but they readily
come
alive when
con¬
strengthen
their hope
to
on
At the
of economic security; the financial found¬
build for the future; the open door
in life. Thus, the figures
you
see
on
factories, helping
more
For instance... the
The
'
beyond the figures in this annual report and you will
on many levels. But remember,
life insurance in action
it is the human level which is of
health
after all,
which
$115,000,000
were
death
represented
claims,
in
participating
highest living standard known to mankind!
see
protection. In 1949 payments to Equitable Society
members and their beneficiaries totalled $335,000,000
double
are pro¬
al$o financing homes, building
are
improve railroads,
to
a
scores of industries—in short, contributing materially to the
Look
$608,500,000 received in premiums by
Society during 1949 provided life insurance coverage of
$220,000,000
allotted for
nation. While they
our
$14,115,700,000 in addition to annuities and accident and
of
was
time, life insurance funds perform
same
viding protection, they
fhk
than statistical meaning — they project a
picture of what life-insurance-dollars accomplish in pro¬
moting human welfare.
have
$83,800,000
and
reserves
duty in the economic life of
which they can
better things
page
The Society earned
was set aside to
policyholders' dividends.
Simply stated, for more than 4,350,000 Americans, here
ation
insurance operations,
$142,700,000 of which $6,000,000
sidered in terms of the human values they represent.
is
and
ments
Equitable Life Assurance Society may seem overwhelming
greatest
concern to us...
for
only people count
and
payments,' including dividends, to
President
CONDENSED
as
CONDITION
OF
STATEMENT
of
December 31, 1949
Resources
For
detailed statement of The
a more
U. S. Government
i
Society's operations during 1949 write
r
for
a
copy
obligations.
Dominion of Canada
of the President's Report to
Public
utility bonds
Railroad
the Board of Directors.
...
obligations..
obligations
industrial obligations
Other bonds
Preferred and
*
guaranteed stocks.
$
776,988,507
270,576,208
(14.8)
( 5.1)
671,974,696 (12.8)
480,003,566 ( 9.1)
1,633,663,952 (31.0)
158,635,069 ( 3.0)
57,513,967 ( 1.1)
7,258,157
Common stocks.
Obligations
Per
Cent
*Bonds and Stocks
To
future payments
cover
insurance and
under
annuity contracts
$4,327,175,473 (82.2)
in force
Held
on
deposit for policyholders
and beneficiaries
on
deposit with The Society
115,149,568
at interest
( 2.2)
Policy claims in process
23,935,298 (
of payment
Residential and business
Premiums
mortgages
Farm mortgages
,
657,176,355
(12.5)
122,447,952
( 2.3)
7,442,392
( 0.1)
110,776,853
( 2.1)
policyholders
policyholders
.,,
0.4)
paid In advance by
85,297,962
( 1.6)
5,303,863
( 0.1)
68,400,541
( 1.3)
Dividends due and unpaid to
Residential and business
,
5.8)
306,424,344 (
Dividends and annuities left
( 0.1)
Mortgages and Real Estate
properties
Per
Cent
Policyholders* Funds
Allotted
Housing developments and other
as
dividends for
distribution during
1950
real estate purchased
for investment.
.
.
..
.
Home and branch office
buildings
THE
LIFE
EQUITABLE
ASSURANCE
SOCIETY OF THE UNITED
THOMAS L PARKINSON
-
STATES
PRESIDENT
/
Other Assets
92,604,234
Cash
Loans to
policyholders
Premiums in process
SEVENTH
■
AVENUE
•
NEW YORK
I, NEW YO&S;
Taxes—federal, state and other..
8,285,000
( 0.2)
6,883,896
( 0.1)
Expenses accrued, unearned in¬
of collection,
TOTAL.
_ULSl
$5,269,289,168
(100)
♦Including $4,711,208
In accordance with requirements
valued at the market
terest and other
{ 1.8)
133,474,786 ( 2.5)
38,085,589 ( 0.7)
Interest and rentals accrued
and other assets
393
Other Liabilities
10,846,336 ( 0.2)
..
on
obligations...
J•
Surplus Funds
To
cover
I
all contingencies
$5,269,289,168(100)
TOTAL.
rnmm
deposit with public authorities.
of law, all bonds subject to amortization are stated at their
quotations on December 31,1949 as prescribed by
amortized value, ond all other bonds and stocks
the National Association of Insurance Commissioners.
are
Fr
25
26
(1218)
THE
Britain's
COMMERCIAL
&
FINANCIAL
CHRONICLE
Thursday, March 23, 1950
James Keene V.-P.
Increasing Gold Reserve
Of
By PAUL EINZIG
Dr. Einzig ascribes increase in British
gold reserves to settle¬
ment of deferred payments of British debtors, who were await¬
ing devaluation of sterling. Contends increase of sterling area
exports to dollar countries in first quarter of 1950 is also con¬
tributing to the increase, but foresees little hope for a really
substantial rise in British exports to
election
Chesapeake & Ohio
The
United States.
i 11 b
w
—
believe
to
e
a n
means a
-
nounced at ,the
importers
are
believed
now
isfactory in¬
This
ing.
After all,
ling.
it is
bound
however, before the goods bought
take
some
before
to
It
take
may
time
to
the
delivered
some
non-recurrent
and
devaluation of
sterling
half
motion by the
have
their
spent
force.
As is
Dr. Paul
Einzig
and other dollar
were,
area import¬
holding back their pur¬
chases of British and
sterling
1950,
by
factors
sumably
spent
have
time
which
non-recurrent
will
the
on
area
goods during the first three quar¬
ters of 1949,. in anticipation of a
rent
volume
ain
and
as
of
the
The first favorable effect of the
devaluation
the settlement of
sterling f debts. < The
was
amounts
of
overdue
It seems reasonable to assume
that
this factor more than
any Qther
was
responsible for the sharp in¬
crease of the British
gold reserve
between Sept. 18 and Dec.
31,1949.
For
we
now
in
crease
know
the
that
volume
the
of
in¬
British
exports brought about by the dealuation did not add
any gold to
he reserve, for the increase
was
arely sufficient to make good the
of
oss
the
any
reason
in
to
that
suppose
the
volume
of
area
exports to the dollar
rea before the end of
1949 conributed much to the
gold
it
is
onths
bound
before
and
the
are
to
goods
laya, Australia,
reach
the
British
tion
American
tourist
or
Western
paid for.
reserve,
take
some
bought in
West Africa
Hemisphere
rts to the
By
that
reserve
of
the
there
users
be
share,
a
distributed.
was
No action
was
taken in
Joseph
has
ception
as a
Mr.
it
February, which
Of Edward Werle
fill
an
the
dollar
increase
gap,
of
British
these countries.
the
in return for
This
exports
to
largely
was
position before the war,
and
the restoration of the prewar
posi¬
tion is the only reasonable
hope
for
achieving
area
trade
a
more
between
and the dollar
less bal¬
or
the
area.
The members of the New York
Curb
Exchange
were
hosts
March 21st at a dinner tendered
to
sion
of
of
C.
Werle,
the
Board
&
Wood, recently completed his
third
consecutive
in Britain
Chairman
an
a
Curb
American
and
term
his
governor.
as
fifth
His
position
ther
hand, raw materials pro- would inevitably deteriorate after
uced by British Commonwealth
the cessation of Marshall
aid.
Burr,
dent
of
the
Inc.,
regular
office
and
two
of
years
service
war.
as
a
joined
the
indoors
Curb
the
reporter
from
in
to
Assistant
1936
the
In
day
Broad
1923 he was
Chief
Reporter
became Floor Assist¬
Exchange Floor Com¬
Dion, Rogers V.-Ps.
was
Of Gross,
othy
the
ex¬
mittee.
commit¬
MINNEAPOLIS, MINN.
of
since with the
mem¬
Exchange,
dinner
the
ANGELES,
J. Ellis Dion
Dor¬
—
LOS
.
S.
Eldridge has joined the
Johnson-McKendrick Co.,
Syndicate Building.
staff of
and
Rogers
CALIF.—
Jack
B.
Rogers
have been elected vice-presidents
of Gross, Rogers & Co., 458 South
Spring
Los
Street, members of the
Angeles Stock Exchange.
Board
year
as
career
in
Boston,
Investment
the
Curb
1921, after having spent
eight years on the outdoor
made
(Special to The Financial Chronicle)
of
Mr. Werle,
partner in the firm of Johnson
a
Curb
Secretary- Treas¬
ters and Birdsall.
With Johnson-McKendrick
retiring
Curb
in Rockefeller Center.
a
expan¬
the
in
O'Meara
tee.
Governors, at the Rainbow Room
•
concern,
Edward
Chairman
'
It is because of this reason that
Feinstein,
of
Curb
Market as a telephone and
signal clerk for the firm of Wal¬
of the National As¬
Securities Dealers.
Chairman of
sterling
'
ber
the
He had served
Mayer,
ever
moved
ant
of
suc¬
Street in
up until the May meeting but at
that time it is generally
expected that favorable action will be taken. With the
prospect of
earnings of as much as $3 in 1950 it is fairly widely felt
among rail¬
road analysts that a $0.50
quarterly would be justified at that time.
Governor
R.
,
of
Exchange
Curb
Jack
as
ing the recent
some
a
club
with the United States Army dur¬
come
sociation
of
named
was
the
14, 1920.
been
Treasurer
ule
Dinner in Honor
Exchange
of
Jr.,
Treasurer
Assistant
Exchange,
was
elected
Secretary-Treasurer
of the club succeeding Mr.
Henge¬
veld.
Mr. Mayer joined the ex¬
change in November, 1924, and
would have been the normal declaration date under
the new sched¬
announced last year.
It is probable that the matter will not
in
club
succeeds
Hengeveld,
and
Treasurer of the
on
share
the
of
of the club.
urer
year's figures
a
Curb
several terms
no
a charge of
$2,200,000, amounting to $0.28
for prior years' taxes and
contingencies.
it
1921,
J. Keena.
March
on
of bituminous coal.
Last
27,
year,
became associated with
of
not open the full month.
1948.
the
ceeding Mr. O'Meara. Third rank¬
ing employee of the exchange in
terms of service, Mr. Hengeveld
the
profit
past
Vice-President
assump¬
will
,
In
the
Improvement in the road's earnings picture has focused inter¬
the dividend possibilities.
Nothing has been paid on the
shares since last Oct. 1 when a
regular quarterly dividend of $0.75
est
countries of her Commonwealth to
possibility of
time
were
exports to the Wall Street
began in 1919 when
payments for goods Commonwealth
countries. The dol-; he
became a page boy on the floor
elivered before devaluation must
lar import figures of some of the
of the Stock
ave
been effected, but the deExchange.
Dominions are anything but re¬
line of this factor in the British
Among the guests were Robert
assuring
from this point of view.!
old
situation
must
P. Boylan, Chairman of the Stock
have
been It is
feared that a solution of the
argely offset by the increase of
problem of wartime sterling bal-i Exchange Board, Francis Adams
ew exports.
As far as it is possiances
through the United States Truslow, President, and Mortimer
le to judge
by the foreign trade
assuming responsibility for part of Landsberg, Brickman, Landsberg
tatistics available, even now the
& Co., Chairman of the Curb Ex¬
the amount would result in a
very
ncrease in the volume of
British considerable
increase of American change, Commissioners Donald C.
xports is not sufficient to cause
Edward
T.
exports to the Commonwealth, and Cook,
McCormick,
material increase in their dollar
Richard B. McEntire and Paul R.
the definite establishment of mar¬
'eld.
This is
because
British
Rowan of the SEC, Benjamin H.
kets for American
rices have not risen to
goods.
This Griswold,
any subIII, Alex.
Brown
&
tantial extent, so that the
pro- would rule out the filling of the Sons, Baltimore, President of the
eeds of British exports have re¬
British dollar gap
through trian¬ Association of Stock Exchange
amed subject to the cut of dolgular trading operations without Firms, Albert T.
r yield almost to
the full extent
Armitage, Cof¬
which the British
f the 30% devaluation.
fin &
gold
On the
ost
net
a
after
were
rials to the United States.
Britain
will
have
to
look
towards the
dollar area has probthere is much
bly begun to make itself felt on a about
the
bstantial. scale.
had
the
Vice-President
Britain has also its natural limits.
anced
During the first quarter of 1950,
he increase of
sterling area ex-
stock.
common
company
The
Ex¬
on
since
June
on
Christopher
share.
reported last year and $3.72 realized in
goods
traffic
during
major work stoppages affecting large
At least in the case of
steel,
which is the largest consumer of soft
coal, this assumption appears
fully justified. Earnings of $3 would compare with
$1.36 a share
which do not compete with Amer¬
ican goods seems to be limited,
and
that
industrial
American
British
a
exchange
Vice-President
was
Despite the poor start to which the company got off this
year
Tuohy stated that earnings for the full year 1950 should reach
approximately $3 a share. Presumably this is based on the
gold position.
The scope
markets
in
the
for
outstanding
the
that
indoors
Martin
■:
Some improvement may
States
year
Curb
Exchange
Employees'
Quarter
Century Club. Mr. O'Meara, who
Mr.>
establishing
United
the
on
last
considered that the mines
be expected without undue optim¬
ism, but not enough to make a
fundamental
difference
to
the
of
share
a
quarter
York
elected President of the Curb
was
strife in the coal fields for some time to
over the immediate future there should be a dramatic
cents,
the New
of
moved
sharp earnings come¬
back anticipated in March is
particularly noteworthy when it is
The only hope is an increase of the
through the less
exchange rate. Nor is export of sterling area raw mate¬
increase
terling
or
to
staff
recent speech
a
of
change and who has been
operation.
$5,348,682, equivalent* to $0.66
dollars
avorable
*
ere
market.
goods
Thus,
about 8
a
British
floor
volume industry geared to
a
Los
Edwin J. O'Meara,
who is in
charge of personnel on the trading
& Ohio.
recurrence of labor
opening
were
seeking further postponements.
five-day
before the New York Society of Security
Analysts, Mr. Walter Tuohy, President of the C. & O., estimated
that net income for the month of March
might run as high as
$3,500,000. This would compare with a net loss of $2,889,242 in the
preceding month and net income of $698,459 realized in
March,
1949. It would
bring the first quarter net to roughly $800,000 or
really substantial increase of
British exports to the dollar area.
paid as
Up to now the results of the Wash¬
soon as possible after
devaluation,
ington discussic^ns arising from the
the creditors
pocketing the differ¬
September meeting have been dis¬
ence between the rate of
$4.03 and
They did not seem to
$2.80. The amounts falling due at appointing.
have
contributed noticeably to¬
various
dates
after
devaluation
wards facilitating
were paid off on
the export of
maturity instead
outstanding
no
In
sterling was devalued in
September, 194gr
!
,
There seems, to be little hope
for
Railroading is
in
years.
Exchange
Quarter Century Club
change for the better in Chesapeake & Ohio's fortunes.
devaluation.
ported from countries in relation
the country.
financial
business
I
operations. Presumably there will
be
come.
the British worker will
main cause of the
aggravation of have to pay longer hours to pay
the gold position before
Sept. 18 for the same quantity of goods im¬
to which
investment
Heads Curb
The loss of traffic has, in itself, been
bad enough. To this has been added the loss of
efficiency inherent
in widely fluctuating traffic and
so,
trend.
period
peake & Ohio's operations.
cur¬
when the devaluation reversed the
the
Naturally, then, periodic stoppages,
interspersed with three-day weeks, that have plagued the coal in¬
dustry for nearly a year have played particular havoc with Chesa¬
the
result
a
Even
in
broad
a
background having been active in
soft coal from the mines than
any other rail¬
more
around-the-clock
sterling area to the
devaluation of sterling. And
dollar area.
It is only then that
pay¬
ment for such purchases as were we shall be in a position to judge
made during that period was de¬ whether there was any real eco¬
ferred as far as
possible, in the nomic justification for the deval¬
hope of benefiting by a lower uation.
By that time prices in
sterling-dollar rate. This, and not Britain will presumably have risen
the unduly high prices in Britain
and
the
sterling area, was the
One of the major beneficiaries of the
resumption of a
in the bituminous- coal mines will be
Chesapeake
road
exports and imports of Brit¬
have
Angeles for the past 10
This road hauls
pre¬
value of
and
whom
production above the 10 million-ton mark for
extended
the
was
association
Michael J. Flannery, John J.
Dowd, Walter D. Ogden and Wil¬
liam J. Heybrook
as
registered
representatives with the firm, all
of
•
the
this
the
above 13 million tons weekly for
any prolonged period.
This vol¬
ume
includes a substantial amount of inventory replenishment
which will tend to taper off in a matter of weeks.
week
their force.
Thereafter the prospects of the
British gold reserve will depend
well-known, Ameri¬
can
ers
of
Rogers & Co.
with
of
and
Sales
was
of
Home
important traffic factor, is having a spectacular boom.
an
Mr.
circles
post
new
announcement
.
some
investment
Coincident
tween 475 million and 4500 million tons.
Such a weekly volume
would represent very profitable business for the railroads.
'
replenish their stocks have been
time to operate in favor of
the British gold reserve. The real
test will come during the second
expected to be close to record levels this week.
announced.
Manager of Gross,
capacity this week and operations in the
close to 100% of capacity. Automobile pro¬
does not appear as an overly
optimistic expectation. In some quar¬
ters it has been estimated that the full
year's output may run be¬
months
paid for.
So the
temporary factor may continue for
factors set into
an
California
of
are
been
prior to his
Nevertheless,
holding back their purchases
pending the devaluation of ster¬
were
is not surpris¬
was
area
has
nue,
Naturally, and regardless of the level of general business, it
is useless to hope for the maintenance of coal production at levels
to
terials which occurred while they
crease.
duction
building,
sat¬
further
a
Youngstown
in
Keene is well known in Southern
Steel mills in the Pittsburgh area were scheduled
operate at 96.5%
area
have made good more or less the
declines in their stocks of raw ma¬
will show
ure
to
substantial increase in the
dollar yield.
American and other dollar
..
beginning of
April the fig¬
five-day week.
Vice-President
as
charge of sales of Floyd A. Allen
& Co., Inc., 650 South Grand Ave¬
near-term outlook for railroad traffic and profits has
brightened materially with the end of the bituminous coal strike.
In the first full five-day work week in
many months, soft coal
production jumped to roundly 13.2 million tons. This compared
with 10,682,000 tons a year earlier when the miners were also on a
countries
with the noteworthy
that, when the exception of tin—have risen to a
changes in the British gold reserve considerable extent, so that an in¬
during the first quarter of 1950 crease in the volume of exports
LONDON, ENG.—There is rea¬
son
Floyd Allen Go.
LOS ANGELES, CALIF.—Asso¬
ciation of James A. Keene and his
Presi¬
Bankers
J.
C. Warren
ren
Manley, Bennett & Go.
Corp.
BELLMORE, N. Y.—J. C.
War¬
Corporation is engaging in
To Admit Two to Firm
a
securities business from offices at
901 Merrick Road.
James A.
DETROIT MICH.—Frederick J.
Zoellin and Donald I. Creech will
be
admitted
to
partnership in
Maguire Dead
Manley,
Bennett
&
Co.,
Buhl
Building, members of the Detroit
Maguire, James A.
and Midwest Stock
Exchanges, on
Maguire & Co., New York City,
April 1. Mr. Zoellin in the past
died recently.
was with
Baker, Weeks & Harden;
Mr. Creech was with Goodbody
James
A.
Winthrop Mandell Dead
.
& Co.
k
-
of
Winthrop
a
age
Allen
Mandell
heart attack March
of 60.
ciated
He
with
was
the
18 at the
formerly
Tax
asso¬
Foundation,
Inc. of New York and was
er
a
form¬
assistant to the president of
Association, and Francis Kernan, New
York Curb
Exchange.
..
v
,
,
.
,
died
thp
*
With King Merritt Co.
(Special to The Financial
Chronicle)
MINNEAPOLIS, MINN.—Henry
J. Bauman and Lenhart C. Baumgartner
are
with King Merritt &
Co., Inc., Pence Building.
1
Volume
17 T
Number 4892
THE
COMMERCIAL & FINANCIAL CHRONICLE
ADVERTISEMENT
(12191
ADVERTISEMENT
SOUTHERN
27
ADVERTISEMENT
RAILWAY
COMPANY
Fifty-Sixth Annual Report for the Year Ended December 31, 1949
Fixed charges were covered 1.91 times in 1949, as com¬
However, during the latter part of 1949, with the in¬
paredwith 2,51 times in 1948.
creasing deliveries of Diesel locomotives, the .Operating
After dividends of 5% on the Preferred Stock, the /Ratio (which for the entire year was 78.220, as just
balance of Net Income in 1949 was equivalent to $6.86
stated) began to drop sharply.
per share on the Common Stock, as compared with $12.51
Richmond, Va., March 21, 1950.
To the Stockholders of
.
SOUTHERN RAILWAY COMPANY:
,
The
Board
of
Directors submits the
following report
Dieselization
•
of the affairs of the Company for the year ended Decem¬
ber 31,1949, which is the annual report it is contemplated
formally to present to the stockholders of the Company
at the annual meeting due to be held on May 16, 1950.
per
•
share in 1948.
"/
"
Dividends
:■
Dividends of 5%
;
on
■: ■'i
•
"
Continued progress was made in the
\
the Preferred Stock were contin-
*?-*•.
-
Foreword
- -
■*
*
-
*
.
The
1949, in its broadest
sense, was a year of
severe contraction of "revenues and of continuance of the
year
inflationary rises in the bases of expense.
\ Following the near record gross revenues of $245,013,413 received in
1948, the Company's gross for the year
just closed declined to $212,771,708. This severe drop
was occasioned by a serious recession in industrial activ¬
ity in Southern territory during the first half of the year
1949, the textile and furniture industries and the produc¬
tion of coal
being particularly hard hit, while during the
second half of the year there were constant interruptions
in the business of the entire country, attributable to
strikes in the basic industries.
{
,On the.
!
■•/'
\ / ?
side, the Company continued to be
expense
beset by the continually rising
industry,
effective September 1, 1949, of the 40-hour
nonoperating employees.
Despite these handicaps, beyond the control of man¬
agement, the year's operations were conducted with effi¬
ciency and with a resulting net income (after taxes and
all.charges), sharply reduced, however, from the extraor¬
dinary peacetime net earnings of the year 1948.
!
How and why this result was attained will follow in
the year's story.
v/v '.f;--;
J ■
i.
;
v
week for
-
-
•
.
.
,
'
•
*
*
,
•
?
.
,
-
.
$212,771,708, being a decrease of $32,241,705,
the Operating Revenues in 1948 of
$245,013,413 (which latter were the largest peace-time
gross revenues in the Company's experience).
\
The volume of business handled and tl>e receipts there¬
from, compared with the previous year, were:
; ,
13.16%,
under
■
Service Revenue
ice
.
for
As between 1946 and
creased
1949
.
(tons)—, 52,917,266
Average distance moved (miles)—215.13
Freight
moved
miles
Ton
Total
freight
Number
of
passenger
209.09
3,898,036
(miles)—.,——177.20
—————
mile
revenue——«
$207,256,592
The
690,716,630
2.6000
$17,960,923
2.5500
$20,877,905
"
\
*
from the above table, the volume of
business
one
(tons moved one mile, and passengers moved
mile) sharply declined from the previous year, de¬
tember 1,
Railway
Accruals
Tax
amount of taxable
account of the smaller
decreased, the total for the
(on
income)
1949 amounting to $22,149,598, as compared with
$27,721,768 for 1948, a decrease of 20:10%.
Company's
contribution to "Government" was, thus, more than 100
out of each dollar of gross revenue, and the Company's
taxes were. almost double the Company's entire Net
Income (after taxes) for the year.
*
year
*,
Net Railway Operating Income, what is left out of the
Company's Gross Revenue after deducting Operating
two
*
for 1948 of $29,148,740,
decrease
a
'
comparative ratios
The
of the several categories of
Operating Expenses, Taxes and Equipment and Joint
Facility Rents; expressed in the number of cents out of
each dollar of revenue, were as follows:
1949
Transportation
——
Maintenance of Way
Maintenance of
Traffic
^
...
.
Equipment
Expense
5
——.—
——_1—
——
f
•
•
►
_
Grand
^
-
Totals
-
y
—
-
1.990
'
—:
3.340
2.970
0.990
0.900
7*8.220
~
.'
Taxes—
Equipment and Joint Facility Rentsi
„
.*
13.500
17.620
1.720
s.——.i—i—
Expense
Totals
38.640
14.380
19.170
,
1.090
89,720.
.
.
88.100
-
"
~
Operating Expenses, Taxes, and Equipment and
"Joint Facility Rents, there was left for fixed charges and
other corporate needs and for the owners, 10.280 out" of
each dollar of 1949 revenue, as compared with 11.900
After
in 1948.
.
,
-
.
;
,
v
"
Net Income.
"
Net Income.(after taxes and
to
charges) for 1949 amounted
$11,914,308, as compared with $19,248,065 for 1948.
Traffic
and
General
Expenses together
with
-Taxes precede Net Railway Operating Income, for- com¬
,
parison only, that result for 1949 was $21,863,820, as .com¬
pared with $19,311,146 for 1946.
Finally, comparing the results of the two years, 1949
and 1946, the Company was enabled to earn a Net In¬
come, after charges, in 1949 of $11,914,308, which after
-Preferred Dividends was equivalent to $6.86 per share
on its Common
Stock, compared with $9,252,270 or $4.81
per share in 1946.
'
application of materials, the accelerated use of
saving devices, the discontinuance of unprofitable
passenger service, and the further improvement of the
.property through capital expenditures, which latter on
the average were estimated to, and are proving that
they
Will, effect savings of at least 25% a year on their cost.
The benefit from
»
,—
saving of approximately $2,127,000, attributable largely
purchase of new freight cars.
to the
While
having put into the property during
'the past' 10 years nearly $182,000,000 of capital improve^
'ments was a reduction in the Cost of Transportation
; (which is the
relationship of Transportation Expenses to
Operating Revenues) for the year 1949 to 38.350. The
corresponding .resultTor 1948
Again to
compare
Commissions.
*,
"
...
was 38.640, *
.
.
1948 and 1949, the Operating Ratio
'(which: is the proportion of total Operating Revenues
;-consumed by,Operating Expenses, expressed in cents out
of the dollar) increased, of course because of the drastic
drop in revenue, from 75.350 in 1948, to 78.220 in 1949.
'
,
:
f
New Rail
\
:
*
*
'
During 1949 there were laid 17,612 tons of new rail,
compared with 27,204 tons laid in 1948; and orders for
1950 have been placed for 25,000 tons.,
•
There was announced during December 1949 an increase in the price of new rail, bringing the cost of this
r essential
material to an all-time new high figure of
$76.16 per gross ton, f.o.b. mills.
.'
as
-
.
New Equipment
p \
;
During 1949 there were delivered and put into service
(a) 136 units of Diesel power (including the 36 units in
the complement financed in 1948 referred to in last year's
.report and which were actually delivered in January
1949), and (b) 74 new streamlined passenger cars, out of
•the 88 thereof ordered in the year 1946.
,
.
The additional 100 units of Diesel power just referred
.to were included in Southern Railway Equipment Trust,
Series "QQ," to "the extent of approximately 75% of their
cost, such Equipment Trust Certificates having been
issued as of April 1, 1949, in the par value of $11,850,000,
with a 2%% coupon, and which were sold under com¬
petitive bidding on an interest cost basis to the Company
of approximately 2.52%.
;
Approximately 75% of the $10,000,000 estimated cost
of the 88 new streamlined passenger cars was financed by
•the issuance and sale of $7,500,000 par value of Equip-ment Trust Certificates issued under Southern Railway
.
-
•Equipment Trust, Series "RR," these certificates having;
been issued as of June 15, 1949, with a 2^% coupon, and
sold under competitive bidding, on an interest cost basis
to the Company of 2.53%.
3
As of December 31, 1949, as stated above, 74 of the
new streamlined passenger cars had been delivered.- De*livery of the remaining 14 cars is expected during the'
first half of the year 1950.
As of January 1, 1950. the outstanding balance of the
Company's Equipment Trust obligations amounted to
$58,155,880.
.
'
It is not
„
*
1,440
.
Equipment and Joint Facility Rents
$4,447,039 in 1946 to $2,319,686 in 1949,
.labor
11.310
/
.
The management continued its program of more effi¬
75.350
10.410
t
freight f^tes, being ^approximately^
effective
^ Septeinber 1, 1949.
'
Continued but very slow progress has been made in
obtaining corresponding increases in intrastate freight
,
5.50%,. effective January 11, 1949, and 3.50%,
■-
The net debit for
a
Interstate Commerce Commission, in- Ex Parte 168,
awarded increases in
rates before the various State
cient
-
the
' ■
while continuing
-decreased from
1948
38.350
.
General Expense.
Incidental
t
.
;
to maintain the property
.with increasing efficiency, is attributable specifically to
(a) increasingly better methods of operation, (b) the
progress in mechanization made possible by continued
:capital improvements, (c) the purchase of new freight
train cars, and, (d) conspicuously, from the increasing
use of Diesel-electric locomotives.
Expenses, Taxes, and Equipment and Joint Facility Rents,
amounted for the year 194Si to $21,863,820, as compared
with the similar figure
of $7,284,920.
.''
years
by other groups of organized employees are
partial offset to the increased cost of doing business,
control
The overcoming of less traffic volume as between the
*
Demands
In
high maintenance standards.
of
/
Giving
cost of
operating practices. /
The saving in cost of operations in 1949 was not at
the expense of Maintenance of Way, Structures and
Equipment. These expenditures, by reason of the effi¬
ciency in application of materials and the increasing use
of mechanical devices, resulted in the continuation of
effective January 11 and Sep¬
1949) and the decrease in Passenger Revenue
$2,916,982.
Operating Expenses for the year amounted to
$166,438,603, as compared with $184,606,916 for 1948, a
decrease of 9.84%, despite severe increases in certain
categories of the cost of labor and material.
55%.
to
devices and efficient
noting the contraction in general business in the terri¬
Total
decreased
alone, 1949 over 1946, would, have raised the Corhpany^s
".operating expenses by $48,800,000.
The latter named
-amount, however, was reduced by approximately $21r
000,000 due to increased use of diesel power, mechanical
tory. To these decreases in volume, there is attributable
<
,
of expenses in 1949 is demonstrated by
the fact that increased material prices and labor costs
tlie decrease of $28,-386,970 in Freight Revenue (despite
increases in freight rates,
.
1949, freight traffic volilme de¬
passenger
more.
■
173.38
818,891,518
i
seen
while
4,723,038
;
#
As will be
'
1.5030
*
21%
these decreases, had "the Company's
operation been at the same material prices and at the
same wage level for 194-3 as
prevailed in 1949j Operating
Expenses, for 1946 would have been nearly $16,000,000
13,788,904,901
$178,569,622
revenue-————
effect
65,945,658
,
1.5690
passengers-——^—
Average revenue per passenger
Total
i
11,384,053,718
_
Average revenue per ton mile——
Average Journey
Passenger miles
1948
■
last year's
for
1946, Passenger Service Revenue failed
by $11,600,000 tq pay the cost of passenger service.
,
;• ;
as
in
to
du,res, were taken to minimize the cost of this revolu¬
tionary step in railroad operation.
1
yielded over allocated Passenger ServExpenses, net revenue of over $4,500,000, whereas
1949, with an allocation, of Expenses'on the sarrie
formula
:
V
increases in
charges
.
1949
amounted to
or
and
report, pursuant to an!
award of an Emergency Board created by the President J
of the United States, a 40-hour work week became effec¬
tive for non-operating employees on September 1, 1949..
Immediate steps, includmg the closing of offices^ and
agencies on Saturday and other radically changed proce-,
As referred
helps to high-light
in the two periods.
granted after 1946 amounted to
approximately $58,000,000.
.
•
Of significance is the fact that for 1946, Passenger
:
Operation of the railroad in
year
the comparative control of expenses
The contribution to Gross in 1949 from
i
rates
Operating Statistics
.
.
contributing to Gross for each
The Year 1949
The Revenue from
*
,
cost of doing business,
including conspicuously the inauguration in the railroad
'
.
ued, and there was paid on the Common Stock, out of '*
the surplus net earnings for the year 1948, an. aggregate
of $4.00 per share, at the rate of $1.00
per share quarterly in March, June, September and December,' 1949..
A dividend of $0.75 per share on the Common .has been ; but 24.46% of the System's total freight locomotives in
service, were at the end of 1949 handling approximately
paid for the first quarter of 1950, out of the surplus net
"*75.00% of the System's gross ton miles. The System's
earnings for the year 1949.
i
passenger Diesels represented at the year end only1
''
Operations
30.46% of the units of passenger power in service, but
The property .was operated efficiently, was well main¬
these were handling approximately 76.75% of the Sys¬
tained during the year, and at the close of the period was
tem's passenger car miles.
*.
in excellent condition.
Including the 537 units just referred to and C-3 units,
The rising trend of prices of materials climaxed with
on order for System
Companies as of January 1," 1950
the end of 1948, but effective September 1, 1949, there
(delivery of the bulk of which is expected during the
was
first quarter of 1950), Southern Railway System will
imposed- the added cost of the 40-hour week
restricted to non-operating employees.
have acquired an aggregate of 603 units of this modern'
The bperating keynote for 1949 was an over-all cost ; and efficient power (with an aggregate of 811,740- horsei
reduction with a betterment of service and without an
power) at a total aggregate cost of approximately $80,impairment of maintenance; thus further mechanization ; 000,000. Adding to this figure the cost of Diesel facilities
and great progress in Dieselization were a
for servicing and handling this new power, Southern
part of the
>: year's
accomplishments.
:
,
,
..
<
System has thus within the past few years authorized the
It is interesting to compare 1949 operations with those
expenditure of sums in the aggregate approximating
of the first post-war year of 1946.
$100,000,000 for Dieselization and the improvements and
In 1946 the Company had Gross. Revenue of
$212,041,- : changes made necessary thereby, the largest single cate¬
:
gory of expenditure ever made in Southern .SysteniV
109, while 1949 produced approximately the same amount
history.
•/ of Gross, $212,771,708. Since Operations must be accom¬
Wage and Freight Rate Increases
*
modated to traffic volume, a statement of the factors
-
i
-
•
Company's pro-
of Dieselization.
.
: As
Of January 1, 1950, there were in operation by
Southern Railway System Companies, indludihg sub-*
sidiaries, 537 Diesel-electric locomotive units.
Diesel
locomotives used in freight service, while Constituting
grain
*
contemplated that the Company will purchase
additional
equipment for the time being.
1
1950, certain of the Company's system
stated on page 8 (pamphlet report), supra',
new
As of January 1,
•affiliates,
as
had on order 66 units of Diesel-electric power.
Use in 1849 of the Company's Financial Resources
In
such as 1949, with sharply contracting reve¬
maturing for new equipment
^ordered in prior years when cash was more ample/ the
Company's working capital at the end of the year showed,
a substantial decrease under the year before.
;
/
v
After paying its running expenses, taxes payable
during the year and fixed charges, the Company used
mr+
its accumulated cash, as to larger items only,
nues
a
year
and with commitments
.
as
follows:
_
j
28
THE
(1220)
COMMERCIAL
FINANCIAL
&
SOUTHERN RAILWAY
Expended for capital
(1)
improvements to the
prop¬
aggregate of $26,818,366 for the year
(the largest amount in the Company's experience), as
compared with $21,910,464 so expended in 1948, being
an increase in the year 1949, when revenues were shrink¬
ing, of over $4,900,000, as compared with the previous
Equipment,
an
year.
(2)
Expended $1,500,750 in acquiring on April 1, 1949,
Yadkin Railway Company's 4% Bonds,
the Atlantic and
guaranteed by Southern Railway Company, the property
being acquired by the Company, effective
of the former
January 1, 1950.
(3) Paid July 29, 1949, the sum of $3,000,000 in settle¬
ment of its obligations under the expired Lease of the
property of The Atlantic and Danville Railway Company,
which company, as of August 1, 1949, assumed the in¬
dependent operation of its line, thus relieving Southern
of fixed charges theretofore payable with reference to
that property, which were approximating $305,000 an¬
nually, together with large continuing operating losses.
(4) Paid dividends aggregating $8,192,800, being an
increase of $973,650 over the corresponding dividend
payments of 1948.
(5) Expended $323,167 in the acquisition for cancella¬
tion of $347,000 principal
amount of the Company's
Development and General Mortgage Bonds; and
Had left on December 31, 1949: (a) Investments in
United
States
securities
in
the
principal amount of
$28,042,000, which was set aside in reserve for acquisition
of debt or reduction of maturing obligations, subject to
further order of the Board of Directors, and (b) cash of
$16,782,874, as shown in the balance sheet (the latter
being reducible by items which were not cleared through
the banks as of the close of business for the year).
Funded Debt and Fixed Charges
The table of funded
debt
the following comparison
at
with
the
of
end
Equipment Trust Obligations
;
Totals
1
its
2
Includes
$9,415,000 of
subsidiaries since
includes
$9,247,000
its subsidiaries
<
since
Bonds
January
of
1,
Bonds
showed
47,449,320
$297,418,980
$294,689,420
acquired by the Company or
by the Company
or
January 1, 1940.
The Company's net fixed charges, on an annual basis,
defined by the Interstate Commerce
Commission, less
income from securities of its leasehold estates owned by
the Company, were af)prqximately $12,308,000 at'Decem¬
as
ber
31, 1949.
It is interesting to note that ten years ago, in 1939,
the Company's net fixed charges were approximately
$16,500,000 annually, and amounted to approximately
17% of the gross revenues of $99,154,000 for that year,
1939.
The net fixed charges
31, 1949, 10
just mentioned
as
at December
later, and themselves reduced by 25%,
only approximately 6% of the 1949 gross
of $212,772,000.
The intrinsic reduction of over $4,000,000 a year in the
fixed charges payable, as compared with 10 years
ago,
is gratifying; the reduction in the
proportion of gross
revenues required to pay the fixed
charges, from 17%
years
.represented
revenues
,
10 years ago, to 6% of the current
gross,
burden easier..
makes the future
.
The Refunding of the St. Louis Division Bonds
The Company plans to effect
during 1950 (as approved
l?y the Stockholders in 1949) the refunding, after curtail-'
ment, of its St. Louis Division First Mortgage 4% Bonds,
due January 1, 1951, now
outstanding in the principal
amount of $12,474,000, which issue constitutes the
only
inaturity, aside from installments of equipment obliga¬
tions, during the
year.
volves
a
imately
for
1947, the Interstate Commerce Commis¬
ing between the north and south.
This action
taken
was
instance of the northern carriers, which claimed
the divisions previously fixed by the Commission
the
at
that
in 1939
unfair to
them, particularly in the light of
alleged changes in relative transportation conditions
brought about by the war. Only a part of the evidence
in this proceeding has been submitted, and a decision
is not to be expected for some time. The southern lines
are going beyond a defense of their present divisions and
were
will seek affirmative relief also.
The gross annual
rev¬
produced by the traffic for which the rate divisions
is, based on a 1947 traffic test, approxi¬
mately $467,000,000, and the estimated share now accru¬
ing to the southern lines is approximately 59%, or
enue
are
in dispute
$275,000,000.
Under the proposal being sponsored by the
the southern lines' share would be
reduced by about $35,000,000. Among the southern lines,
northern
the
carriers,
Company's
about 25%.
share
in
this
Divisions of rates
coal traffic
nous
are
interterritorial
on
traffic
is
interterritorial bitumi¬
n.
The "Reparation" Cases
1946, the Department of Justice commenced
a series of complaints before the
Interstate
the filing of
Commerce Commission
assailing, on behalf of the United
States, the reasonableness of freight charges
paid by the
Government during World War II. Fifteen
such
com¬
plaints to which this Company is a
party defendant have
been filed, the last of
which, was filed February 26, 1948
Together, the complaints constitute a broad attack on the
railroad rates charged the
Government during the stated
period. Reparation in large amounts is
sought—estimates
of the Government
ranging from two to three billion
dollars from the railroads of the
country as a whole. It
..isk impossible at this time to estimate the
amount this
Company has involved under these estimates made
by
Because
■f
\*
•>'
n.i
,j
!!
-n',1
i
Ridge during the next three
large part of which is to be spent in the area
a
served
by the Company; however, the steam plant in
reserve
is supplanting coal with natural
gas,
thus displacing tonnage on the railroad; but this same
thing is being done by privately owned industries wher¬
this
vast
it is possible—all due to conditions currently ob¬
taining in the production of coal. In other cases private
ever
industries
because
using coal have transferred
costs
and
uncertainty of
of
to
over
fuel
continuing
oil
coal
supply.
During 1949, 125 new traffic-producing industries were
at points served by the Company and its affili¬
ates; 57 new warehouses were established for the as¬
sembly and distribution of numerous commodities, and
located
additions
made to 66 previously existing plants.
agriculture continued to make substantial,
progress during the year. One of the promising develop¬
ments was the ever-increasing practice of diversification.
were
Southern
More and better pastures
mechanization of farms
con¬
tinues rapidly to expand.
of
high construction cost, industrial invest¬
ment in new plant and equipment slowed down during
the year from the postwar peak reached during the
previous year, but there has continued a steady indus¬
trial development in the South served by the Company's
Truck, Water and Air Competition
During the year the Company experienced intensive
competition from trucks and buses on the highways and
from
barge lines
lines.
wise
some
Expansion of existing industries, as well as moderniza¬
rehabilitation programs, has been effected.
Especially has this been true of the textile industry
between
on
the inland rivers.
restoration
the
East
and
of
coastwise
There
was
steamship
ports of the South
like¬
service
Atlantic and
tion and plant
Gulf.
where many expenditures have been made for moderni¬
Dealing first with the trucks: The production of trucks
trailers probably reached an all-time
high during
the year. Each of these vehicles
immediately found its
and
replacement of equipment. For example, a
a total of 220,000 square feet of floor
and
place
on the highways either as a unit of some
organized,
regulated company, or as a contract carrier where cer¬
tificates
$4 million.
carrier.
Announcement has been made by another
company of
having placed an order for textile machinery amounting
to $15 million for delivery over a period of
years, thus
again demonstrating confidence in the forward progress
class
were
traffic
to
Announcement was made by another company that it
has, since the war's end, "spent more than $40 million
on
improving land extending its plants, and has tentative
plans involving spending $40 million more." Many of
these plants are located dt points served by the
Company's
cast
iron
*
Another
corporation
with
twenty mills, many
by the Company, has, during the
year and the preceding postwar years, spent approxi¬
mately $50 million for the erection of new plants and
of
which
are
some
served
modernization and replacement of equipment of existing
plants.
-
v.
finally,
or
as an
industry-owned
competition and the flexibility of the service is effective;
but beyond this, the trucks have
gone after many items
of
tied
lines.
available,
The product of the textile mills and other
highcommodities are particularly susceptible to this
of the South.
which
would
ordinarily be classed as being
example, fruits and vegetables,
pipe, iron and steel commodities, even rough
the
rails.
For
building stone, have been trucked for great distances.
Many of these trucks have violated the load limit laws
of the
various states through which they operate. This
has brought about considerable demand for stricter en¬
forcement of laws in this respect.
Some progress has
been
made, but much remains to be done. Meanwhile,
truck competition has required the revision of
many of
the Company's freight rates because the various truck
operators did not increase their tariffs to the same extent
did the railroads; and trucks have not hesitated to
make special rates in their quest for traffic which would
as
A new plant to produce filament rayon
fabrics, costing
approximately $6 million, including an entire mill vil¬
lage of new brick homes, a church, stores and other
facilities, is expected to go into operation early in 1950
in South Carolina, to be served
by the Company.
Virtually completed at the end of the year, the first
otherwise
mill
competition: The Federal Government has
completed and is maintaining a nine-foot channel on the
in
the
Southeast
to
manufacture
newsprint from
southern pine, built at a cost of $32 million at a
point
served by the Company in Alabama, is a notable event
in the growing industrial activity of the
provides the first
more
than
a
new
decade.
domestic
The
source
territory, as it
of newsprint in
100,000 tons of annual output
production of newsprint
of this mill will lift the South's
to 25%
of its needs.
The South's production of aluminum products has been
increased by an $8 million expansion program at a
point
by the Company in Alabama.
The capacity of the South's pulp and paper
industry
is being increased by the $11 million expansion of a
plant
Alabama.
in
will be
com¬
future industrial development
by the expenditure of millions
generation of electric power by south¬
ern
power companies,—a new steam generating plant
near
Goldsboro, North Carolina, to cost around $10 mil¬
lion; a $6 million plant near Meridian, Mississippi, and
the completion of a third unit of an
existing power plant
near
Hattiesburg, Mississippi; dedication of a new $13
million steam plant at Gadsden, Alabama; first and sec¬
ond units of steam-electric generating station at New
Orleans, Louisiana, completed, and third unit scheduled
for operation
early in 1950; an $8 million steam-electric
generating plant completed at a point on the Company's
lines in Kentucky,—a part of a broad
10-year expansion
the
program; a $15 million electric generating plant on the
Dan River between Leaksville and
Draper, North Caro¬
lina, nearing completion; and the dedication of the first
two units of a steam
generating station, Alexandria,
Virginia, costing $25 million, this being expected ulti¬
mately to consist of five units at a total estimated cost
of $50 million.
Also, major new units completed and
placed in service during the fiscal year 1949 by Ten¬
,
.the Department of Justice representatives. All of
these
.proceedings are being vigorously
contested, and are
believed to be wholly without merit; w.
t'.. :
^
ture of $185 million at Oak
years,
and the electrification and
Industrial and Agricultural Development
Continued faith
possible to state what the final assessment of
additional
tax, if any, will be.
During the year work was under way on an additional
$70 million atomic plant expansion at Oak Ridge, Ten¬
nessee.
The impact of the atom is further reflected in
plans of the Atomic Energy Commission for the expendi¬
and
of dollars for the
answer, discussion with the Bureau, and
possible
review by the courts have been
exhausted, it is not
March 23,, 1950
^
ADVERTISEMENT
and the advantages oLWinter
grazing mean much to the constantly growing livestock
dairy industries. Proper methods of soil conserva¬
tion are being carried on more and more in the
territory,
not involved.
of the South is evidenced
as
Thursday
*+
(Continued)
This project, it is expected,
pleted in the second half of 1950.
indicated by the report, in¬
claim for additional taxes
equivalent to approx¬
14% of the tax already paid. Until opportunities
In June,
-
sion decided to reexamine the propriety of the divisions
of rates applying on interterritorial freight traffic mov¬
in
were paid, have been in
process of audit by representa¬
tives of the Bureau of Internal Revenue. The
revenue
agent's report has now been completed. The Govern¬
position,
k»T» -I
served
Federal Tax Liability for Past Years
As stated in the annual
report for 1948, the Company's
federal income, and excess
profits tax returns for the
years 1941-1946, for which years
$173,878,308 in taxes
ment's present
r
space, installed 50,000 spindles and 600 wide looms with
all complementary equipment, at a cost in excess of
1940.
ocouired
'
■**
large mill added
$194,650,500
52,589,6002
58,155,880
In December,
zation
Dec. 31, 1948
$194,303,500
44,959,600'
Estates
1949
1948:
Dec. 31,1049
Funded Debt
Leasehold
I
Divisions
erty, $8,419,813 for Road and Structures, and $18,398,553
for
CHRONICLE
ADVERTISEMENT
ADVERTISEMENT
nessee
Valley Authority included expansion of generat¬
ing capacity at Wheeler Dam, Fort Loudon Dam and
Douglas Dam, all in territory served by Southern. While
some of these plants will not themselves furnish much
traffic for the railroad, the increased capacity for pro¬
ducing electric energy cannot but be beneficial to the
further industrialization of the South.
be
on
the
railroads.
As to
buses: These operations have become stabilized
well-known to all; however, it is a fact
many
buses were turned out by the manufacturers
during
and
are
new
the
and
year
some
of
them
are
now
in
long-distance
service.
As to water
Tennessee River
as
far east
as
Knoxville, Tennessee, and
this fact has brought about the
operation of barges from
Pittsburgh and intermediate points to both Chattanooga
and Knoxville.
These barges have carried iron and steel
from the Pittsburgh
District, grain from Cincinnati, and
other commodities,
including automobiles which are sub¬
sequently trucked or driven from the river landings to
the interior.
And they invariably
try to take something
back—paper from Kingsport, Tennessee, to Chicago, Illi¬
nois, is an example.
All of this
competition, including that from subsidized
lines, handling passengers, mail, express and freight,
beginning during the year, certainly reached
a
formidable state of development
during that period,
competing for traffic that has heretofore been on the
air
while not
railroads.
The
Company has undertaken
to
necessary,
revise
endeavoring to keep itself in
position, but in many instances this has
impossible of accomplishment.
rates
a
where
competitive
been,
so
far,
III.
Public Relations
Recognizing that actions speak louder than words, the
management constantly endeavors to conduct the affairs
Company in a manner that will deserve-and be
accorded the active
good-will, support and
of the
of the
it
cooperation
people, the communities and the entire territory
serves.
The management also
recognizes its responsibility to
keep the public generally, and
employees, informed as
to the Company's contributions to
the public
welfare, its
progressiveness, its plans and hopes for the future, and
its problems and those of the
part.
To
industry of which it is
a
this
end, informative advertisements were
placed
regularly in locally-circulated newspapers and
maga¬
zines; personal and written contact was maintained with
editors, educators, and other community
leaders; news
releases
and
magazine articles
were
prepared and
dis¬
tributed; a monthly magazine was produced for em¬
ployees; a weekly news-letter was prepared for the offi¬
cial staff; speakers were
supplied to civic and business
Volume 171
FINANCIAL
COMMERCIALS
THE
Number 4S92
'
'••f *
CHRONICLE
(1221) * 29
'
Tl-f
ADVERTISEMENT
SOUTHERN RAILWAY
^
(Concluded)
organizations; students and teachers were furnished with,
appropriate material on request; and tours, "open houses"
and similar activities were
The
South
as
built
attention to
call
to
location
a
South!" for greater
■
•
advertisements
opportunity.
>
\
Conclusion
*
have
been
spelled
...
*
*
■
1
-
recent
the most
conducted
areas
sur¬
in labor
period¬
ically
be
ment of Labor. None of these cities
satisfactory to
levels.
v
.
in
unemployment
of
market
Discussing recent trends in unemployment, Labor Department
official maintains, though unemployment today is too high to
•
.
...
included
vey
it is low when compared with
us,
Holds, with exception of depressed
affected industries, employment is at high
below 1948. Looks to heavy consumer
in
out
Mountain and Pacific States were
.
this Report to the
owners
of the property, the bad things as well as the
good things that have happened in the past year, and
the problems, so far as known, that the Company faces
There
BYER*
U. S. Department of Labor
,
industries, and continued to be
theme of-; "Look Ahead—Look
for
basic
the
around
By HERMAN B.
Assistant Commissioner, Bureau of Labor Statistics,
attractiveness of the
the
Employment Trends in 1950
..
.
nationally-circulated
Company's
continued
conducted.
unemployment has generally been
relatively lighter than elsewhere
in the country.
Fifteen cities and towns in tl^ie
was
level, though slightly
buying to maintain
but warns industrial expansion is essential
of increasing number of working population.
industrial output,
take
to
in 1950.
care
-
put into class "A" as having a
tight or balanced supply of labor,
and only one, Denver, was in the
"B" group with a slight labor sur¬
and strike-
areas
United States EmService of the Depart¬
by the
ployment
prewar
Three cities—Salt Lake City,
plus.
Seattle and Spokane—had a
mod¬
of labor. Nine cities,
including seven in California, had
a
substantial labor surplus and
erate surplus
The
We
Company will continue to strive, as always, despite
tial
confronting pri¬
enterprise in this country, to perform its funda¬
the hindering influences which are now
vate
duties, (1) to furnish the best possible transporta¬
tion service at fair rates without government subsidy,
and
(2) to
just return
pay a
the capital with which its
on
And
Company will also
To all those
have worked
who
well for, and with,
so
H Respectfully submitted, by order of the Board,
ERNEST
E.
NORRIS,
President.
SOUTHERN RAILWAY COMPANY
Year
the
Results for
Financial
In 1948
In 1343
The Company received
miscellaneous
and
rev¬
$212,771,708 $245,013,413
of
cost
Leaving
a
the property and of
maintaining
,,
166,438,603
184,608,915
balance from railroad operations of
$46,333,105
$60,406,498
the raihoad was_^
operating
The
total
a
of
enue
The
from freight, passenger
operations
paid
Company
22,149,599
27,721,768
$24,183,505
$32,684,730
other companies for
use of Joint facilities
to
hire of equipment and
of the amount received
in excess
those
•
sources.
by it from
2,319,686
3,535,990
$21,363,820
$29,148,740
:—
'
Other
derived
income
stocks
bonds
and
in
investments
from
miscellaneous
and
was
„
items
-1
.
a
obligations,
3,112,654
$32,261,334
railroads
for leased
paid
rents
3,298,768
$25,162,538
..
total income of_-___L__-liVInterest on funded debt and equipment trust
Making
•
13,243,280
13,013,329
$11,914,308
$19,248,035
Financial Position-at the End of the Year
,,'•••-V
.
'
\r
"
;
'
;
The
-
7
'
.
31,1949.
3
had.^ investments •.-* 7
tracks, ter~
facilities, shops, locomo-, "vy;
minal
•
freight
cars'
and' -other
addition
Company had
in " stocks, bends
'
-
-of. affiliated
notes
and
•
panies
and
carried
at
"
ment
;
3'
equipment_i_x_3
investments
temporary
And
U.
■-
x
»
'
>; '•
2,101,213
"■ •'
;
.
^
"
.
'
*
.
V
/ An
last
of
^ 3,321,596
$7U,621,646 $683,580.264
$23,041,382
$39,473,087
$19,934,555
4'
M9.543.532
~
Company—^The
on hand fuel,
rails, ties, bridge material and
other, supplies
necessary
for
keeping
road
and
equipment
27,262,262
24.156,228 *
15,883,802
16,325,204
3,106,034 ;
942,402
in
good order
not
other
<■
materials,
and
.
but not yet due-
due—1—
$32,887,148
19,104,203
$36:275.939
$3,388,791
22.138,497
3,034,289
2,756,280
3,049,623
293,348
104,017,247
104,746,423
729,181
.
depreciation of
and
subsequent recovery will
that question.
you
we
In
year
middle • of
and a half ago
the
veteran
cal
job openings
very
10,989.401
1929
climate
even
as
Americans,
come
11,173,905
either
The situation
the Pacific and
mirrors
States
Mountain
the
m
total
credits
these
of
and
:
was—,
184,504
'
the
of
capitalization
.
consisted
of
Debt,
the
-<
•
$7,261,105,
.
$624,096,368 $612,630,241
~
$11,466,127
.
following:
including
trust
•"
the
Company, net assets of—
equipment
-
r •
The capitalization of the Company
Funded
$177,199.893
$169,938,783
bouds,
"...
obligations,
'
;
1—-—-.—
etc
$252359.330 $242,099,820
Stock—J
Preferred
Common
Stock—
60,000,000
60,000,000
L—129,620,000
129,820,000
—
$10,359,560
.
Making
a total
capitalization of
After deducting this
from
a
the
net
assets
surplus,
largely
property,
of
$442,27§,330
remained*
invested
$431,919,820
7
in" "
$10659.560
&
~
capitalization
there
;
"E"
areas,
in
or
1940,
our
years.
the
affected
it did other typi¬
•
'
er
than in the
areas
industrialized
of the east. Similarly, man¬
employment
ufacturing
less
more
this
in
country
as
whole.
a
Because
than
sector
of
the
declined
in
the
•
•
_
"
-
1
'
$181,816,933 $130,710,421
"$1,106,567
importance
of the western states, and
of
the
extremes
of
Activity in the nondur¬
1948.
of
able
in fact, was back to
peak levels/Inventories are at rea¬
sonable levels, in some cases they
sector,
Order
low.
too
are
books
are
nicely filled.
equipment expenditures are level¬
because ling off at a high rate. Trade is ac¬
weather
ex¬
Profits
tive.
and
dividends
are
perienced in most of this region, high.
the seasonal swings in unemploy¬
These facts of readjustment and
ment
much
are
elsewhere.
wider here than
Unemployment
rises
winter
sharply in the fall and
months, and drops in the summer
months when construction, agri¬
culture,
summer
outdoor
resorts
activities
are
all
in
and
their
because
*An address by Mr." Byer before the
American Lertsn Regional Economic Con¬
ference, Spokane, Wash, March 11, 1950.
•''!
seasonal industries in the economy
from all walks of
1
in manufactur¬
ing. ^.
Prices are changing
only very moderately. Residential
of construction is booming. Plant and
This
caused
principally
however, was not very great. The by the fact that the adult popula¬
1949 average was down only 660,- tion
has
increased
much
more
000, or 1%, from the peaks reached rapidly than the local industries
the year before.
In other words, could absorb them. In Washington
employment slipped from an all- and Oregon, on the other hand, the
time record to a level that was rate of unemployment has been
still very high. The decline began below
the
national
average
in
late in 1948, and came to an end summer, and well above it in win¬
in the notably short time of six to ter.
Unemployment in the middle
nine months. The reductions were of January this year was unusual¬
confined almost entirely to manu¬ ly heavy, mainly because of the
facturing, with railroad transpor- very
severe
weather.
Reports
i
time being worked
measure
;
most states the increase was mild¬
who
The actual drop in employment,
these items from
assets there remained,, ■«
the total
for
liabilities,
reserves
After deducting
New
as
the national pic¬
Output is high, except in striketure, though by and Targe the ira^
affected industries. Industrial pro¬
pact of recent developments has
duction in January was only. 4%
been less severe.
Unemployment
below the peak reached in the fall
rose in this region in 1949, but in
large
'
The
City,
was
veterans busiest period.
life—city
In California the rate of unem¬
workers and farm workers, organ¬
ployment has been- consistently
ized and unorganized labor, busi¬
higher than for the nation as a
nessmen and professional men.
whole ever since the end of the
road
defense
in
previous peacetime
economic'
amortiza¬
projects—*
Deferred
liabilities,
including
items
due
to
others, but not
yet adjusted
of
tion
.
•
reserves
for
equipment
.,
,
,
and
dividends
interest,
Operating
balances
of
causes
In 1949, however, the situation
changed radically. ' Jobs became
less plentiful, and unemployment
became a serious problem in many
a community.
This change in the
companies,
Taxes accrued but not
Reserve
best
622,660
and
As
than
$4,205.022
railroad
rents accrued
f
*
5,187,226
supplies,- wages
and
'
1—5,809,836
The Company owed for
to
2,079,120
Company totaled $794,035,156 $789,830,134
Company,———i—
The Assets of the
15.602.125
r
the
to
available
yet
the
had jobs was at the unprecedented
figure?ef 61% million. Nearly 12
million : more
people
had; jobs
unadjusted
'
including items owed to
debits,
but
13,523,005
,_r—
and
assets
of
—the total number of persons
'
Deferred
Mexico—were
with a
substantial labor surplus.
Silver
time that the total
same
placed in the "D" group.
Diego, California, and
were
,
us answer
dream-goals.
1948—only a
,
-
•
lines in preparation'
our
no doubt recall quite
reached economic peaks
in 1948 which previously had been
considered virtually unattainable
■
in.
owed the
Company had
government,
on
number of
analysis
the
help
well,
others
trade,
ture,
At the
year's economic setback and
'
-
and
companies
railroad
ex¬
yet
for further advances?
•,
4.400,348
1,078,752
Government Securities-..
S.
classified
is
it
enough
restore full
rectifying
62,202,319
"
J
r
.
/
.
.
•
cash 'and
special deposits amounting ton*
i
-
*. t..
'••••/
?
;•
Investments—V-J——1—8
Other
sonal fluctuations.
not
cases
You will note that I have used
fall¬
ing off, our working population figures very sparingly in this talk.
was continuing to grow.
The total I have tried instead to draw you
u n e m p 1 oylabor force expanded in 1949 by a verbal picture of the job situa¬
ment
back
800,000. This was to be expected; tion as it existed in 1949. For most
down
to
the
normally, the economy must pro¬ sections of the country, that pic¬
2-million
or
vide between one-half and three- ture is very good, even though it
even the 3quarters of a million new jobs is less rosy than it was in 1948. It
each year in order to take care of shows us that the drop in employ¬
million mark.
the increased supply of workers ment and the rise in unemploy¬
Onthesurresulting from our normal popu¬ ment was orderly and limited; that
face, at least,
lation growth. Adding to the prob¬ the economy was still operating
it appears that
lem currently is the fact that large at41 very high levels; and that the
the economy
was
halted and re¬
numbers of veterans are complet¬ down-trend
has
become
Herman B. Byer
ing their education and are seek¬ versed in remarkably short order.
stabilized
Since the beginning of the year,
ing job opportunities. The econ¬
without
re¬
and
unemployment
omy did not expand enough last employment
gaining the peaks of 1948.
have shown very little change ex¬
Now, obviously enough, there is year to absorb all these new en¬
cept for seasonal fluctuations and
more
than one kind of economic trants.
the impact of the coal strike.
A
Thus, the 1949 employment pic¬
stability. On the one hand, there
number of industries which had
is the stability of atrophy or stag¬ ture may be summarized by say¬
been weak a year ago are con¬
nation.
For
example, a "ghost ing that employment in certain
tinuing to show the strength they
town,"' or a backward and dry- sectors declined from an extreme¬
displayed late in 1949. The lum¬
ing-up economy, may well be ex¬ ly high level, and that the econ¬
ber and paper industries are again
tremely
stable,
showing
little omy failed ot provide job oppor¬
tunities for all the newcomers into at high levels. In the Northwest,
change from year to year. On the
the labor force.
As a result, un¬ the lumber industry suffered from
other hand there is the stability
the effects of January's abnormal
which
results from
action and employment rose byan average of
weather,^ but is now recovering
movement, f, from
balances
and 1,300,000; in 1949 from the low
levels of the two previous years, rapidly, Th§ cotton and rayon tex¬
counterbalances, such as we find
when it had fluctuated around the tiles industries have recently been
in a gyroscope which is stable
holding firm and doing relatively
two-million mark.
only so long as it continues to
well, though the woolen industry
uditrL This is the type of stability
Is 1950 Unemployment Too Higrh? is still rather shaky. The shoe in¬
which results in progress. •.*
While unemployment today is dustry is having a good season.
;!
The question before us is, what
Thfe furniture industry has enough
too high to be satisfactory to us, it
does today's picture of apparent
advance orders to keep business
is still relatively low when com¬
stability really mean? Does it ..in-.
humming for a good part of this
pared
with
our prewar experience.
dicate that we are stymied, that
During the defense boom in 1941, year. The heavy machinery in¬
We are unable to climb further,
100 out of every 1,000 workers dustry, one of the hardest hit of
that we have lost our expansion¬
all manufacturing groups, is~ also
were
unemployed; ; In 1949, . the
ary push? Or is it a sign that, to
increasing its activities. There is
ratio was 55 out of every 1,000.
borrow a military term, we are
still a substantial amount of over--
Company * had
The
is
Business today is
many
.
EquipTi-usts. heid by Ttustees,'
disbursed upon delivery.
be
.
$24,261,763
■
.
,
of
to
cellent. But it
year.
in
,
"
64,303,534
proceeds
-
--
; "
;
,
"
,•
,
com- '
investments
other
of
Total
Decrease
'
*
;
V.'
...
Unexpended
*
,
31,1943
- •
* •
$646,239,300 $021,977,537
property
fixed
the
-
Investments
..
•
.
arid.1 passenger^'-". -.
.tives,
;In
»•"
railroad
Of
,
•
-
Company
io.- land,
>
,
On
,
mining also affected.
Employment in construction,
...
December Y'Increase or .*
December
,
and
employment
and
to
bring
1949, the management is, again, most
Company, in
proudly grateful.
lost
we
tation
Two—San
to
continue to "Serve the South."
the
ground
good
Southern Railway
doing,
so
the
substan¬
a
and agricul¬
the other hand, remained
extremely strong except for sea¬
good;
have entrusted it.
recovered
of
part
early last
mental
owners
have
war.
was
which have
substantial
however.
come
in to
recovery
us
indicate
in February,
In the Mountain States
recovery
are
clean-cut.
these
trends
in themselves fairly
basic
cause
of
The
up-and-down and up-again
was
that, after nine full
of unremitting pressures for
goods and services, supply
has, in most cases, finally caught
years
more
with demand. This has led to
to
buyers' markets —
is the normal situation in
up
return
a
which
an
economy
such
as
ours.
With
buyers
again calling the tune,
industries had to readjust
most
their
output,
methods.
our
economy
result.
and
changes
inevitable and
both
a
costs,
These
is now
selling
were
healthy, and
better off as
The readjustments were
relatively smooth and orderly be¬
cause
our - economy
was strong
and
stable
and
fundamentally
firm.
One
in
the
,
factors
during 1949 and
of the outstanding
economy
the first two months of 1950 was
the strength of consumer demand
Continued
on
page
34
30
(1222)
THE
State of
COMMERCIAL
&
FINANCIAL
CHRONICLE
banks
Pennsylvania Gets Record Size Check
and
Thursday, March 23, 1950
investment
firms
run
ads and make statements and
have
speeches written by their officers
Wall
that
Street
is
part -of
the
it worked out
wagged the dog too long!
were
the
of Wall Street
name
were
propa¬
questionable
people's interests.
good
a
Wall
many
Street financial
our
demo-
Where the; former SEC legisla¬
has been referred to as the
'"death-knell for- holding compa¬
for
warrant
It
Main
Caveat emptor is gone from the
not
scene
legislation
of business.
with
necessary,
this
and " its
It is
pending
odor of its
presence.
The
and
sider,
the
the
Street's
SEC
in
Wash¬
should
implications
con¬
of
Wall
championing of this
meas¬
ure. /It would
give to Wall Street
larger instrument with which
big business could bludgeon little
a
business.
Continued from page 6
000
or
100
The Frear Bill: A Tiap io Ensnare
Little Business (or Big Business
all
enterprises with
even
or
even
$1,000,-
$100,000 in assets, and
10 securities holders,
be subject to SEC control?
It resolves' itself into
question
a
of the limit to which the
scope of
Policy
to
Is
Congress to direct
a
study of all
existing SEC and bank legisla¬
exercising controls over
business, to determine their ade¬
tion
inadequacy, before
or
additional
ered.
legislation
This
should
is
be
at
before further consideration
is given to enactment of the Frear
once,
corpuscle
most other states.
readily available to the small in¬
One of the greatest dangers im¬
plicit
in
this
legislation
is
the
threat it holds to level competition
among
competing
nesses
and
sound
its operations.
small
large enterprises.
Small compa¬
nies Jailing within the scope of
the proposed legislation and con¬
trol of the SEC would be
required
to furnish
quarterly, annual and
financial reports
and to file registration statements.
;hey would be required to give
supplementary
out detailed information
statement.
would be able to
use
and
war
rger
among
basis
small
smaller
a
con-
business,
on
ones
on
these reports, up
unavailable to them, and
y
of
them out
or
more
have
aware
of
for
the business.
You cannot interest
power and
The
SEC
too
delegation of
dangerous.
has
in
plored the effects
ness
and
small
of certain
the
past
de¬
small
busi¬
investment
firms
on
phases of the Securities
encouragement, not
it has nothing to conceal.
Bad
Main Purpose to Expand SEC
Regulations
to
to
to pressure them
and
beyond Wall Street to "Main
It is
control of
doubful
of
us
firms
an
invasion of state
questionable value and
constitutionality.
who
and
Those
supply capital to small
who
solicit
investors
for such support are all too aware
of the dangers in not
furnishing
detailed
Act
to
and
relate
ideology which inspired
the
recent
dealer.
Most ijecent
regulations, such as
competitive
bidding, private
placements, etc., have deprived
rules
and
the small
the
investor everywhere of
chance
to
been
the
by the
companies
big
banks,
and
large
*
Competitive
bidding
rules certainly have worked
very
to
much
"Main
the
detriment
Street"
dealer
investor.
;In
of
the
small
and
:
V
)
the
early securities investi¬
gations, J. P. Morgan had a midget
sitting
still
his, lap.
on
to
seems
Wall
have
its
Street
midget to
work out its purposes in the
person
now of the SEC.
in
with
the
duty in
a
Section
interest
country
about
5
connec¬
governing
know
the
of
letting
the
the
facts
proper
securities
business and
the need for equity capital. Reg¬
ulation "T," regarding extension
of
credit,
to
the
has
worked
interest
vestor,
of
especially
cities
this
in
fact
their
the
in
towns.
and
Reserve and SEC
and
adversely
small
the
The
are
have
Federal
cognizant of
been
derelict
public duty by not
it with a legislative
The
Louisville
in¬
smaller
cor¬
rec¬
Chamber
of
Commerce, under date of March 2,
1950, announced opposition to the
Frear Bill and sent copies of this
resolution
to
Vice - President
Barkley
and
all
Kentucky
mem¬
bers of the Congress.
A
vote
for
the
fundamentally
bureaucracy,
Frear
is
Bill
for selfish
selfish few, as
vote
a
the
the
ception and intent and should not
be
bill
is un-American in its in¬
reported
favorably
by
the
Banking and
Currency
Senate
Committee.
appointed
career staff begin
give convincing indication of a
disposition to work together to¬
D. J.ManFeimer & Co.
to
such
high-
and they all have
investors.
members of the
ward
buy certain
bought
the
perimental laws of the 'Thirties
with the
second-thinking and the
realities of life of a subsequent
Until
of
ex¬
generation.
Alan
quire
D.
to
Schwabacher
New
York
will
Stock
ac¬
Ex¬
belated
objective, all that change membership of the late
report
for
the
the financial world is
likely to
ending June 30, 1949, issued
Sterling S. Beardsley and will be¬
expect
from
the
SEC in the way
publicly March 7, 1950, states that
come
a
of solutions to
partner with DeWitt J.
registered security offerings have
vexing problems is
dropped 17% for that fiscal year, lip service to private enterprise in Manheirner, member of the Ex¬
main
Street."
change
Acts
an
year
management cannot.
The
Securities Act and the Ex¬
administrators of the SEC and the
of the small
firms, but has done
by the sheer weight of
records and reports.
Good man¬ nothing constructive about recti¬
The SEC in its
agement does not want to cover fying these Acts.
up;
of the
venture
as affecting
capital and the activities
vestment
exercise of
It is the real back¬
bone of the nation's economy.
Acts of 1933 and 1934
investors
other
enterprises, constantly
the
need
sales,
atch to buy up small prosperous
nterprises, would be in position
evaluate
the
companies
and
more
is
a
a
ion against each other in
mt
because
vestor
become
information
That is too broad
but still asks Congress for ex¬
purpose in the con¬
general ception of this legislation is to panded authority to police the
Competitors expand the control of SEG regula¬ stock and bond business and, in
this informa- tions beyond interstate commerce particular, asked for enactment of
costs, working capital
financial matters, in
public
on
Such
commerce.
small
informing him,
busi¬ clearly,
concisely,
conclusively
and and honestly on the operations of
smaller
between
in the stream of
Securities
they affect the small
as
ommendation.
discouragement, in the
1
•
:
Roosevelt, who
man, the small firm and small in¬
recting
firms
ally that every shareholder of a would be interested only in
This view is supported
strongly
corporation has a right, by virtue whether there is good manage¬ should or should not be compelled
to
New
furnish
such records and re¬ by! Paul Heffernan of the
of
his
proprietary interest, to ment. And good management to¬
York
"Times"
under
date
of
ports.
The
Frear Bill would give
inspect and examine tne corpora¬ day dictates that this information
March 5, who stated: "The aim
tion's books at reasonable time be made available to the small the SEC final authority to deter¬
mine what constitutes "$3,000,000 would be to clean up the over¬
and place and for
proper 'purpose.
investor, who is the red blood
in assets and 300
These
security holders." lapping thinking and provisions
rights are a matter of basic
corporation law in Kentucky and
the
Bill, in the interest of the general
economy of
this nation.
Small
SEC authority is designed to run,
is to run, for the benefit of a
ques¬
any
consid¬
done
'
advertising, to revise this section
seem to be a far wiser
for the Administration and
quacy
working
tion
It would
and
economy, and not a
of
whether
these
Reform
Existing SEC Regulation
course
'
The SEC has
Wiser
business needs
tion
down
and
up
Street,"
America
1950,
would go the chain reaction of
the submergence of the little man.
T. McKeen
that
And
"Main
a
the
for another Andrew Jack-,
insurance
Administration
ington
to pray
impending grade securities
dangers,-to revive the
for:
The only hope
1934,- certainly would
feel badly about the way
they are
Street
would
strangle the
arteries of small capital and im¬
pede economic progress.
American
regard
of clearing out the government
temples of finance appears to be
sponsored
1933
and
nies," the proposed expanded SEC
might well be called the
business."
any
matter
a
history that presents
Franklin Delano
measure,
-"death
recent
son.
.
tion
Standing, left to right: George S. Munson, of Townsend, Elliott & Munson, attorneys; Brainerd
Whitbeck, Vice-President, The First Boston Corporation;
Thomas
S.
Gates, Jr., Partner of
President, The Philadelphia National Bank; Lawrence N. Murray,
President, Mellon National Bank & Trust Co.; Dr. Edw. B. Logan/Pennsylvania's Budget Secretary.
practically deprived of
part of this program, is
of
the' Kremlin's
and
that small in¬
so
confound
speeches/5;
Drexel & Co.; Frederic A. Potts,
petitive bidding
information.
The
busi¬
the Frear Bill.
behalf of less restrictive laws fol¬
lowed
by
recommendations
to
Congress for
and
by requests for extended
The lack of equity
large degree, the de¬
large number of "Main
power
Street" investment firms in Ken¬
States
capital in
cline of
a
a
tucky and other
and
the
grass roots
increase
in
size
states,
big
of
'
The
the
and
seems
Constitution
has
times.
of
been
cred.
concerns
mission,
This
recalls
and
forget that
the
the
1934
going
back
sentence
to
Manheirner
has
been
active
individual floor broker.
With Candor, Fitzgerald
many
not
the
—
Broadway, New
City, to be formed April 1.
as an
Securities
are
attitude of
this
York
United
amended
Certainly,
Acts of 1933
to
change, in the firm of D. J. Man¬
heirner & Co., 120
Mr.
prerogatives."
SEC
Wall Street banks and investment
are the direct results of
the failure by the
SEC, the Treas¬
restrictive laws
more
BEVERLY
sa¬
Com¬
Latin,
HILLS,
Darvin .M.
Curtis
ated
Cantor,
with
Factum
is
CALIF.
now
—
"associ¬
Fitzgerald
&
to
selling.
It would contribute ness firms themselves are con¬ ury
Co., Inc., 211 South Beverly Drive.
Department,
the
Federal infectum
jeri
nequit
(a
thing
atly to a constant re-shuffling scious of these
dangers. But such Reserve, and other financial agen¬ which has been done, cannot be He was formerly with Marache
re-leveling of competition. information must not be rendered cies of the government to correct undone).
Sims & Co.
Would the general
public, or the up for all to see—competitors in¬ inequitable legislation; and, the
We have seen in
every contro¬
ill investor benefit? Would the
result
has
been
a
serious
cluded—and to seize unfair or
injury versy in the last few
years in¬
With Hamilton Managem't
all investor avail himself of the
illegal advantage, to the detriment to investor and public interest.
volving any phase of the securities
tudy of such voluminous reports of small
(Special to The Financial Chronicle)
All
financial
agencies
of
the
enterprise. This is either
business, the Treasury Depart¬
records of a concern prior
government are presently so filled ment
brazen
and
to, a
DENVER, COLO. —Marion K.
and other financial agencies
unwarranted, or
r after,
making his investment? naive, attempt to extend and ex¬ with Wall Street people and so of the
Ellis, Joseph F. Emmons, Arthur
government
e
think not.
>rds
Such
too
are
reports arid
complicated
for
pand
the jurisdiction of the
to control of all
SEC
business, interstate
average person to read, much
and intra-state alike.
For what is
digest
to prevent the SEC in
a
The public would not
interested.
The small investor
from
returning
with
few years
a
demand
imbued with the selfish ideologies
of
Wall Street that
perhaps a
proper
the
bill would be
name
Street."
one to
change
large
New
York
fighting with
method at their disposal the
"Battle
"Main
of Wall Street to "Main
Many
every
of
Wall
Street."
The
for the benefit of
Street
banks
dominated
by
Street"
against
legislation
few large Wall
and
some
others
a
Wall
Street,
to
,
com¬
vestors and "Main Street" dealers
of
would have to attempt to
write an entirely new line of
H.
the
changed, to Main Street, it would
own
Chidsey, Attorney General of Pennsylvania; Charles R. Barber, State Treasurer; John S.
Linen, Vice-President, Chase National Bank, and Walter H. Steel, Partner of Drexel & Co.
The act
superior
way
coun¬
gogues
by handing Charles R.
Barber, treasurer of Commonwealth of Pennsylvania, a single check for $368,446,875—believed to be
the largest check ever drawn in the history of the country.
This check completes the $375,00u,000
financing jointly managed by The Chase National Bank; The National City Bank of New York; Bank¬
ers Trust Company; Drexel &
Co., and The First Boston Corporation.
Seated, from left to right, Fairfax Leary, Jr., s >ecial counsel to Pennsylvania Attorney General;
recent illustration.
that
agency, Y
ganda
veterans
of
and
the
over
but
If
Pennsylvania
housing
1949, is a
their leadership's selfish
thinking consider themselves 97%
part.
The tail in this instance has
try,
bankers expedite bonus payment to
most
the
low-cost
propaganda
International Bank',
"Main Streets"'all
Investment
underwrite
bonds under the Act of
C.
Harrover, Jr., Ralph J.
lipps and John
D.
Stowers
Philhave
been added to the staff of Hamil¬
ton
Management
Building.
Corp.,
Boston
Volume
171
-
Number 4892
THE
COMMERCIAL
&
FINANCIAL
*
and
i
.
CHRONICLE
*
Subsidiary Companies
STATEMENT OF CONSOLIDATED INCOME
STATEMENT OF CONSOLIDATED EARNED SURPLUS
For the Years Ended December 31. 1949 and 19-18
1949
and
1948
1949
Earned Surplus
services.
.$1,077,270,246
Dividends, interest and other income
•
$1,080,886,431
38,766,810
$1,116,037,056
Operatinc Ch arces
V*<~'
For the Years Ended December 31, 1919 and 1948
Gross Income:
Sales
(1223)
Net Profit
Beginning
at
Year
for the
Year.
of
.
$475,955,448
:..
$370,112,561
132,743,159
165,980,980
$608,698,607
$536,093,541
•
.
1948
41,034,343
$1,121,920,774
"!
'
:
Deduct:
Costs, operating, selling and general
*Taxes
expenses
830,117,530
$
.
(other than Federal income taxes)
$
785,716,568
31,810,494
35,438,351
Intangible development costs (amortization and
dry holes)
32,915,353
38,384,322
Depreciation
46,136,901
38,552,814
Cash
dividends
declared
40,619,469
55,142,428
Stock
dividend—336,528 shares/ of the capital
Company
assigned value
$58 per share.
....... .U.
stock of The Texas
Depletion and leases surrendered
13,175,424
of
11,585,460
Earned Surplus
$
957,783,559
19,518,624
—
$
End
at
'
*
$
158,253,497
$
215,871,116
$
3,760,164
$
3,760,164
Year
of
$475,955,448
$553,556,179
.
i
906,049,658
it
Interest Charces:
STATEMENT OF CONSOLIDATED CAPITAL SURPLUS
r-
Other interest charges
1,150,174
For the Years Ended December 31, 1949 and 1948
629,972
$
4,910,338
$
4,390,136
$
153,343,159
$
211,480,980
1949
Capital Surplus
Provision
for
Federal Income Taxes
20,600,000
Becinninc
at
Year
of
1948
$121,997,933
$133,103,357
....
45,500,000
Add:
Net Profit Carried
to
Earned Surplus
$
...
132,743,159
$
165,980,980
Excess of value
assigned to 336,528 shares of the
capital stock of The Texas Company, declared
*In
addition, state and Federal gasoline and oil taxes
the
amounts
of, $186,159,305
or
$170,851,775
1949, and
during
paid
were
accrued in
during
stock dividend, over par
a
as
Capital Surplus
at
End
of
?
value thereof.
Year
11,105,424
—
-
$133,103,357
$133,103,357
.1948^
t
.
-*w~
4'
CONSOLIDATED BALANCE SHEET
ASSETS
DECEMBER 31, 1949 AND 1948
A
1949
LIABILITIES
1948
Current Assets:
Cash
$
,
104,718,904
112,545,797
49,040,000
81,593,000
90,868,884
92,240,762
Notes and contracts
Accounts
U. S. Government short-term securities, at cost,
Accounts
and
notes
receivable, less
reserve
$850,000
1948
Provision for Federal
dise, at cost determined
on
out
the
method,
which
in
merchan-
9,449,919
10,679,021
(less U. S.
taxes
payable January 3, 1950 and 1949
Total current liabilities
r
aggregate
..;
10,332,004
13,781,757
...$
122,397,921
$
124,046,017
$
60,000,000
$
60,000,000
Long-Term Debt:
was
,
176,888,114
163,630,538
22,070,163
31,192,771
supplies, at cost
current
6,081,730
96,953,262
the first-in, first-
lower than market.
Materials and
income
.
1949—$25,000,000; 1948—$45,000,000)
Dividend
Crude and refined oil products and
8,510,759
90,655,486
$
payable
payable and accrued liabilities
Treasury obligations held for payment of taxes:
of
:..
Inventories—
Total
1949
Current Liabilities:
$
assets
443,586,065
$
481,202,868
3% Debentures, due May 15, 1965.
2%% Debentures, due June 1, 1971
Notes of The Texas Pipe
80,000,000
80,000,000
38,333,333
22,100,000
Line Company payable
approximately $1,600,000 dnnually beginning
in 1951 with interest rates of 2.6% to 2.9%.
Other
.
.
1,795,444
long-term debt.
Total long-term
$
debt
180,128,777
2,108,610
$
164,208,610
*
Reserves:
Investments
and
Advances (Note 1)
$
169,708,531
$
158,911,691
Foreign
compensation plan (Note 3)
.......
exchange fluctuations
Properties, Plant
Capital Stock
and
reserves
and
7,909,662
1,826,448
1,930,067
25,000,000
25,000,000
..!....
.
$
34,621,014
$
34,839,729
$
344,940,600
$
344,940,600
Surplus:
Equipment—at Cost:
Capital stock,
Producing
$
615,367,799
Pipe line
$
120,796,460
Manufacturing
Marketing
,...;
326,905,077
76,770,599
171,384,561
157,096,679
6,236,183
5,673,839
$1,379,217,630
n
Authorized
$1,234,529,247
par
value $25—
shares
20,000,000
Issued and outstanding:
13,797,624 shares (in¬
5,308 shares in 1949 and 17,199
1948, respectively, issuable against
scrip outstanding; and 10,000 shares held in
shares in
treasury in 1949)
-
Capital surplus
133,103,357
133,103,357
Earned
553,556,179
475,955,448
surplus
$
,
637,159,375
742,058,255
611,519,445
$
623,009,802
Less—Capital
stock
held
in
:....'
$
.$
12,779,735
$1,368,132,586
The foregoing balance sheet and statements
should be read
Andersen & Co.,
in
are
$
13,969,400
$
953,999,405
$1,030,984,874
$
953,999,405
$1,368,132,586
$1,277,093,761
$1,031,600,136
-
treasury,
10,000
shares, at cost
615,262
Total capital stock and
..;
and
cluding
•
'
1949
in
14,000,000 shares in 1948
101,472,145
89,242,289
Other
.
566,610,908
376,190,338
Marine
Deferred Charges
$
1,892,648
.
Contingencies
Total
5,901,918
.....$
Employes' pension plan (Note 2)
Incentive
Contingent Liabilities
$1,277,093,761
taken from the Annual Report, dated
surplus.
(Note 4)
,
♦
i
'
March 20, 1950, to stockholders of The Texas Company, and
conjunction with such report which contains the Notes to Consolidated Financial Statements and the certificate
Auditors, attached to the financial
statements.
A copy of the report to stockholders may be had
upon
application
of
to
Messrs.
the
Arthur
Company.
The said balance sheet, statements, and report are not intended to constitute an
offer, solicitation of offer, representation, notice, advertisement, or any
a prospectus in
respect of any security of The Texas Company.
'
e
form of
31
32
(1224)
-With Kalman & Co.
CHRONICLE
FINANCIAL
&
COMMERCIAL
THE
""
(Special to Thi Financial Chp.onicle)
Mutual Funds
ST. PAUL, MINN.—Clarence B.
Roberts has become affiliated with
Kalman &
Favor Trusts
"When
ceive
Strongly
the
favor of
overwhelmingly
are
statute in
a
permitting
spective
states
chase
investment
of
their
trust
your
investment dealer,
or
of trust officers and lawyers
vey
from
from
conducted
NATIONAL
SECURITIES
RESEARCH
120
801
the
lawyers
responded
68%
a
20%
voted
in
voted
and
12%
answer.
Proportionately
more
lawyers
trust officers replied "yes" in
and
rule states.
The purpose of the survey was
To determine from the
two-fold:
themselves
trustees
whether
an
all
high-grade common stock
fund, bearing the usual manage¬
ment
fee
sales
"load," would
available without
but
a
in
useful
be
meeting the investment problems
of small trusts, and to seek in¬
formation
■""prospectus from
your
such
investment dealer
for
in
use
investment
an
designing
vehicle
to
make it of greatest value to fidu¬
or
PHILADELPHIA 2, PA.
ciaries.
Report of Survey Findings
Inquire about=
Scudder,
Stevens
&
Clark,
in
recapitulating the seven-page Re¬
port of Findings of their survey,
Diversified
stated
that:
Fiduciaries, both individual
I
and
corporate, are interested in the
investment fund principle and in
the use of investment
company
Fund
shares/ especially for diversifying
the
stock portion of small
common
trusts.
A Series
New
of
York
Stocks, Inc.
Prospectus
and
other
descriptive
available from your local
investment
dealer,
or
operating without the benefit
of
common
a
Company
Wall
Street, New York 5
CHICAGO
LOS
ANGELES
trustees
with
many
limited
vehicle.
Investment
shares
would
be
widely used in trust admin¬
istration
were
INCORPORATED
48
fund, and
by
fiduciaries,
if
they
by statute or
authorized
so
by a sufficient weight of clear
judicial precedent, or by language
in
the
will
but that
trust
or
instrument;
substantial and perhaps
a
increasing number of trustees
are
using investment shares in trusts
1
of modest size without these
per¬
missive
A
provisions.
trend
is
evidenced
toward
wider acceptance of common
stocks
and
of
investment
trust
eystone
shares by fiduciaries
accompany¬
ing, if not accelerating, a trend to
more
Custodian
favorable legislative and
dicial
attitudes
regarding
ju¬
their
Certificates of
Participation in
INVESTMENT FUNDS
investing their capital
acquisition cost factor in the
purchase of investment trust
remove
fiduciaries felt to be
terrent
in
to
the
trust
use
what many
a
major de¬
of such
administration
recommending
them
for
shares
and
to
use
by
their clients.
Sales Load Most Objectionable
Although 48%
CSeriea B1-B2-BS-B4)
and
yers
PREFERRED STOCKS
(Series K 1 -K2)
COMMON STOCKS
(Series S1-S2-SS-S4)
officers
be obtained from
listed
use
trust
Keystone Company
50
tell
us
ol Roston
Congress Street
shares
law¬
381
trust
no
question, "If you
investment trust shares
you
why."
in
order of
importance,
individually mentioned, the
deterrents
to
were
agement
the
the
fees,
of
such
sales load,
man¬
use
delegation
of
au¬
thority,
indifference
to
such
shares and lack of
familiarity.
In
high-grade
or a
common
balanced fund, the
favored
balanced
a
To
supplement and support the
of findings, the Survey
thought that the observations of
two
trust
officers
seemed
misleading.
spends
operate in different
men
parts of the country and under
sharply contrasting conditions of
investment.
One is from the head
small
trust
department in
a
Southern state, where he operates
under the restrictive provisions of
legal-list.
the
prosperous
answer
to
the
question,
as we
which—even
year
than
more
following
"As long
government
a
in the
it
of
1949—
receives
in
staff and of the National Associa¬
are
tion of Securities Dealers and the
the
National
years
ment
Association
Invest¬
of
Companies held
conferences in which
series of
a
a
more
uni¬
form and accurate method of por¬
traying the performance of invest¬
ment companies was
evolved to
guide to the industry in
an attempt to remove
serve as a
general.
In
misleading comparisons from sell¬
ing literature, conferences are now
in
tion
in
companies
known
of
with
that
market
stock
investment
of
well-
averages."
to
Subject to ratification by share¬
a Special General Meet¬
ing to be held on April 3, 1950,
has
agreement
into
with
been
Corporate
entered
Investors
Limited, Toronto, whereby it will
purchase
all
Investors
Corp., Limited, and will
assets
of
to
few
stocks.
Offers Jamaica Water
Supply 2%% Bonds
Halsey Stuart & Co. is offering
$7,995,000 Jamaica Water Supply
first
mortgage
C,
due
2%%
March
bonds,
1,
1975,
at
102.25% and accrued interest. The
holders at
an
a
Halsey Stuart Group
Co.
Sell
soon
levels of
generous
ago."
Series
Canadian Fund
Interest rates
likely to return
common
in respect of charts
graphs purporting to compare
performance
not
more
Currently The Putnam Fund has
slightly less than 60% of its assets
progress
the
remains acute.
bonds
These
a
be
to
have
charts
made
part:
taxes, the danger of serious infla¬
appro¬
priate.
of
these
future
result of this release, repre¬
sentatives
of
the
Commission's
summary
Canadian
tive
awarded
were
sales
(Monday)
at
on
competi¬
a bid of
101.629%.
Proceeds
bonds
the
from
will
the
sale
of
the
be
applied in part to
redemption of the company's
presently outstanding
$5,745,000
principal amount of First Mort¬
gage 3%% Bonds, Series A, and
$1,250,000
principal
amount
of
residing in Canada (ex¬ First Mortgage 3V4%
shares to any appreciable extent
Bonds, Series
cept
Newfoundland) the privilege B.
is due to lack of local, judicial
The remainder will be ap¬
of
reinvesting the proceeds of
and public acceptance.
It is just
plied to the payment of bqnk
their shares in Class "A" shares
a matter of a little more time and
loans, to the defraying of refund¬
of
Corporate Investors, without
a little more experience and edu¬
ing costs, and for gross additions
surcharge.
cation.
The
to utility plant.
prudent-man
rule
Shareholders in Canada accord¬
must first be accepted for a trust
Regular
redemption
prices
ingly
will
have
the
option
of
sur¬
investment medium here."
range from 105.25%
to 100.21%.
The other man is an officer in rendering their shares for cash at
Special
redemption
prices
are
the net asset value or of reinvest¬
a
trust
department in a Mid¬
scaled from 102.25% to 100.12%.
ing in full shares of Corporate
western state, where he has per¬
Jamaica Water Supply Co., in¬
Investors Limited stock at their
missive statute in the use of in¬
corporated in 1887, is an operating
vestment
company
shares.
He liquidating value.
Shareholders residing in New¬ public-utility, owning and oper¬
writes, "As you can see, we think
foundland or outside Canada will ating a water supply system in an
very well of the use of investment
be entitled to receive only cash
area
of approximately 40 square
trust shares in small trusts where
miles in the Borough of Queens
upon surrender of their shares.
they fit the circumstances and the
and
in
part
of the Towns of
investment
instructions.
This
a
reason
do
we
said, "The main
He
not
use
investment
offer to shareholders of Canadian
Investors
,
tions
to tne
as
„
which
of
trusts
have
ours
"To
it has seemed
us,
increas¬
ingly clear that this method of
owning
common
stocks
is not
only
legitimate
like
small
but
so
that
essential
in its
The
for small
individual
use
a
At the recent annual
The Fund, the
elected to
coming
Charles
meeting of
following were re¬
serve as
M.
trustees for the
George
year:
Putnam,
Richard
Osborn, Louis J. Hunter, and Stanley
F.
wide
the
in¬
in Nassau
business
trusts,
investors,
is inevitable."
Hempstead and North Hempstead
Trustees Reelected
expe¬
rienced through the actual use of
investment trust shares.
crease
George Putnam Fund
is
based both upon our
general considera¬
involved, and the results
notion
Werly,
County, New York. The
consists
Putnam,
Chairman
of
board, in commenting on the
the
produc¬
sale of water for domestic, indus¬
trial,
public
and for fire
lation
and
irrigatioi
served
by the
estimated to be in
company
excess
000.
American Business
of some im¬
Mutual
Funds
as
Much discussion
acceptability of
fiduci¬
lacked
the
statistical
Industry today.
concerning the
Shares,Inc.
investment trust shares by
aries
has
basis which this worthwhile Sur¬
vey
Prospectus
THE
upon request
LOBD-ABBETT
contributes.
■
i
■
/
•
•
INVESTMENT
COMPANIES
SEC Issues Annual Report
Securities
Commission
for
1949
companies
1949, 140
Exchange
a
green
cover)
Lord, Abbett & Co.
New York
—
Chicago
—
Atlanta
—
Los Angeles
the 358 investment
of
registered at June 30,
management open-
were
end trusts.
and
its Annual Report
(with
that
stated
in
Total assets of the 358
companies totaled $3,700,000,000.
During the past five
years,
185
management open-end
management closed-end in¬
and
vestment
to
the
companies reported sales
of approximately
$1,5CO,000 of their securities, and
redemptions and retirements of
public
approximately
$800,000,000, leav¬
ing a net investment in such com¬
panies over the period by the pub¬
lic of
approximately $700,000,000.
Discusses Sales Literature
ture and
upon
its regulation under the
Investment
Company Act of 1940,
the SEC noted that "During the
last five years increasing use was
made
in such literature of charts
and schedules
A
sales litera¬
purporting to depict
the performance records of openend companies. Many of these de¬
pictions appeared to be misleading
Diversified Investment Company
Prospectus
may
be obtained from
investment dealer
200
or
your
local
The Parker Corporation,
Berkeley St., Boston 16, Mass.
is
of 4C0,-
Survey, made in the clos¬
ently, is regarded
portance
to
the
uses,
protection. The popu¬
Teele.
George
of
tion, purification, distribution and
ing weeks of 1949, and which
findings were released only pres¬
Commenting
according to the total number of
times
Boston 9, .Massachusetts
the
420
administration, will
Named
Tke
of
the
in answer to the
in
may
17%
of
objection
or
deterrent to investment trust
shares, the remaining two-thirds
of the fiduciaries listed deterrents
do not
Protpectiu
schedules
aspects
upon
deemed
ate
registered
IN
BONDS
no
it
a
and
The
Elimination of the sales "load"
shares would
had
Two Trust Officers' Observations
use.
or
unds
or
fund in the ratio of 5-to-4.
need for this type of investment
a
from
and
trust
investment research facilities, feel
more
Huch W. LonC
who
are
individual
material
trustees
corporate
that
their preference
state
to
all
an
feeling
Many
r.
trust,
or
sell
or
would
indeterminate
were
Asked
legal-list states than in prudentman
in
policy.
of
favor
against it, while
declined to
estate
an
re¬
shares
the
to
in their states and
statute
such
officers
trust
who
survey,
BROADWAY, NEW YORK 5, N. Y.
der
fiduciaries
Of
&
CORPORATION
trust
one-half
stock fund
Clark.
clients
your
hold,
one-fifth would sell; the remain¬
for
by Scudder, Stevens &
of
than
more
pur¬
shares
or
in general hold
replies
indicated
you
them?",
re¬
by trustees, according to a
recently released nationwide sur¬
you
commented
which
As
investment
assets
do
Fiduciaries
in
request
comment in
and
Survey Shows Fiduciaries
upon
trustees' outlook for the immedi¬
Accordingly, during the 1949 fiscal
year, the Commission in a public
in
By ROBERT R. RICH
Prospectus
and inaccurate in material aspects.
release
Company, 136 Endicott
Arcade.
Thursday,*March 23/ 1950
<
Volume
171
,
Number 4892
THE
COMMERCIAL
FINANCIAL
&
LAN E-WE LLS
SUMMARY
SETTING
1949
the
over
record, consolidated
new
a
was
$15,990,908,
$2,273,910,
income for
net
income for
gross
in 1949. The
added
the
of
rate
share. This
motive
net earnings re¬
of Koneshot operations,
costs
levels and
was
increase of
an
field
in
stations
Harvey, Louisiana;
January, 1949, Petro-Tech Service Co., Lane-
Venezuela, acquired the
assets
sales
and
Jacksboro and Colorado City,
been
operating
oilfield service in
an
quired all of the
previously
owned
and
employed
by
chas, Venezuela; and
the Canadian
Seismograph
also enable it
Venezuelan oil
the increased demand
meet
to
and
of the
industry for radioactivity well logging
the
Wells Canadian
1949,
Company,
headquarters
with
Edmonton, Alberta, and
and
operating
base
the
to
facilities
present
California;
Odessa,
were
Alice,
Pampa,
truck
new
buildings
>Four
quarterly dividends
ing $2.00
the main shops
also
addi¬
or
provided
"Victoria and
were
Wichita
paid in 1949 total¬
the end of the year.
at
capital stock is listed
Alberta.
Company's
the New York Stock Ex¬
on
change and the Los Angeles Stock Exchange.
LANE-WELLS
I
■
COMPANY
.
(and subsidiary companies)
CONSOLIDATED
BALANCE
SHEET
AS
OF
DECEMBER
ASSETS
Cash and advances for
Accounts
and
receivable
notes
$125,694.19
accounts)
.
.
.
$
.
.
estimated
1,900,383.25
.
charges
intangibles
.
.
.
.
.
.
.
.
.
.
.
.
.
^
.
.
.
Long term debt
....
Minority interest in subsidiary
Capital stock - Authorized 500,000
shares, par value $1, issued and
outstanding 360,000 shares
Capital surplus
Earned surplus
.
1,176,461.73
other
7,437,181.92
156,522.06
.
.
.
.
.
.
.
.......
389,265.98
$12,075,716.18
A
LANE-WELLS
•
OFFICES
AND
PLANT
53 Branches in
•
•
on
5.636.209.01
Electrologging
Bridging Plugs
5610
SO.
SOTO
ST.
•
subsidiary, 7 branches in Venezuela.
Lane-Wells Canadian Co., a
360,000.00
1.607.714.00
Request
LOS
Principal Oil Fields of the United States.
Petro-Tech Service Co., a
1,359,300.00
2,050,000.00
158,127.89
COMPANY
Radioactivity Well Logging
Packers
GENERAL
225,000.00
$12,075,716.18
of the copy
Annual Report will be sent
Perforating
679,365.28
.
Property, plant and equipment (Less
$3,649,463.68 reserve for depre¬
ciation)
Deferred
payable and other accruals
Note payments due within one year
Federal and foreign income raxes
(Less
Inventories
Patents and
Accounts
1,015,901.24
for doubtful
reserve
1949
31,
LIABILITIES
working fund.
in
Cisco,
Beaumont,
share. Lane-Wells had 2353 stock¬
per
holders of record
in
sales office in Calgary,
a
as
Oklahoma; Great Bend, Kansas; and Cody, Wyo. v
incorporated in July,
was
well
as
Falls, Texas; Hobbs, New Mexico; Oklahoma City,
wholly owned subsidiary, Lane-
a
erected for
to
Longview,
.A
rapidly expanding oil industry in
Canada,
were
and offices in Los Angeles. New
Bakersfield,
n
serve
buildings
new
assembly building and additions
tions
services.
To
new
subsidiary in Edmonton, Alberta. New
California,
Paramount,
perforating business/in Venezuela. This ac¬
quisition should result in an appreciable increase in
perforating business
in
Pacific Coast Division buildings were completed in
and jet
Venezuelan
7
country,
buildings in Anaco,'Jusepin, El Tigre and Las Moro-
ac¬
Corporation of Delaware in its well logging
Petro-Tech's
this
!
and license rights
assets, property,
in
53
During 1949, Petro-Tech Service Co. erected
Eastern
Venezuela. On December 31, 1949, Petro-Tech
stations, including
was
operating 62 service and
now
.Venezuela, and 2 in Canada.
business of Venezuelan Oilfield Service, C. A., which
Western
net
auto¬
homa; and the Santa Maria, California station
Wells affiliate in
Service
other
opened during 1949 in
were
closed. Lane-Wells is
had
$789,439,
Texas; and Elk City, Lindsay, and Fairview, Okla¬
country.
In
were
$616,445 in the
trucks and
service
additions
equipment.
New field
the
of materials in this
costs
there
increase
an
amount, net
buildings and lease improvements
investment
share earned
per
plant and equipment
$7,437,182,
$1,529,804. Of this latter
and
of doing business in Venezuela and
greater expense
wage
$6.71
or
slightly lower
per
the end of the year was
to
to
33
.
1949
FOR
Net investment in property,
at
of
1949 amounted
approximately $6.32
or
with $2,414,330,
compares
higher
REPORT
increase of nearly 17%
an
(1225)
CO M PA
ANNUAL
$13,687,230 reported for 1948.
Consolidated
flects
OF
CHRONICLE
subsidiary, 2 branches in Canada.
ANGELES
'
.
f
i,
34
THE
(1226)
COMMERCIAL
FINANCIAL
&
CHRONICLE
Thursday, March 23, 1950
Texas Utilities Com.
Our
Stock Marketed by
First Boston Group
An underwriting group headed
by The First Boston Corp.; Blyth
&
Co., Inc.; First Southwest Co.;
Rauscher, Pierce & Co., Inc., and
Dallas Union Trust Co.
made
on
March 22
public
offering of 400,000
shares of Texas Utilities Co. com¬
stock
mon
stock
at
at
$25
per
awarded
was
share. The
the
to
group
competitive sale.
Proceeds
added
to
which
the
sale
the
of
will
funds
treasury
will
company
be
from
repay
its
of
stocks
now for many non-bank investors, because of the neareligibility feature and because of the sharp price decline
which they have experienced. While the 2V2S of June and Decem¬
ber 1967/72 have given ground under Federal's selling, they have
nonetheless been well bought by pension funds and savings insti¬
in
The 2»/2s of 1962/67 and
subsidiaries
above
The
gen¬
and rsell elec¬
tricity in an area covering ap¬
proximately 72,650 square miles
in the northern, eastern and west¬
distribute
erate,
served has
$10,084,191.
Giving effect to the sale of the
Texas
Utilities
Co. will have outstanding 4,800,-
shares,
000 shares of
common
company has
outstanding.
no
other securities
Nonetheless, there has been 110 let-up in the offerings by
means ineligible securities are always available
when buyers are looking for restricted issues. About all that
dends
amounting
share
the
on
Feb.
17,
clared
share
a
to
the
paid divi¬
$1.15
per
stock.
On
company
de¬
common
1950
dividend of 32 cents per
payable
on
holders of record
April 1, 1950 to
Feb. 28, 1950.
It is
ing for the immediate future does not
.
MINN. —George M.
Vivian has opened offices in the
Torrey Building to engage in a
securities business.
He
was
form¬
erly with Thomson & McKinnon.
the past he was an officer of
Martin, Vivian Co. of Duluth.
In
Mutual Fund Mart
(Special to The Financial Chronicle)
Stanley R.
Bodine
has
formed
non-bank investors have been
with individual citizens who
vulge personal information.
to offer securities that
mands of investors.
applies
fit
in
with
the
needs
and
They know that nothing succeeds like
to new issues of Treasury obligations.
be if
used to finance the deficit?
astonished
if
in line for such
25-
comes to new issues, but
longer-term tap issue were
a
The market would not be amazed
or
an
be done by not offering restricted issues at this time to
finance the deficit.
slightly
the
so as
to take
buying pressure off -other securities which is being
improve income. This could have some effect as
as fixed-income securities are concerned
but it would probably
not have too fnuch influence upon
equities unless yields of Treas¬
uries went much higher. How far yields of long
tap issues may
rise is anyone's guess, but quite a few in the financial district be¬
lieve the top is not far from current
levels, if not already there
One
the
of the
reasons
tap issues by
*
not
without
considerable
are
term rate.
CERTIFICATES
and the
NOTES
ties.
are
Banks
in
a
as
support
that
higher
long-term
being carried out by the authori¬
Also the fact that
sold and the proceeds
Central
On the other hand, the opinion
ties, in order to bring these yields
BILLS
now.
for the liquidation of
long bonds in the future, when,
on
yields for the tap issues
some
is to put the
and if the occasion should rise.
is
*
given by
Federal,
better position to take
*
more
some
in line with the short-
of the
eligibles
are
being
being used to buy the victory bonds
214s, is not exactly distasteful to the monetary authori¬
It
is
indicated
the
Central
Banks
are
not
supposed
to
have too many of the bank issues which could be used to
keep
BONDS
prices
or
yields of the latter obligations in line.
The 2Y2s due Sept. 15, 1967/72 and the 2%s of 1960/65 have
been
more
been
the
best
acting issues in the eligible list.
Although
a
few
of these bonds have been
no
coming into the market, there has
let-up in demand which has kept prices of these securities
firm to buoyant.
buyers of
the
Both the large and small commercial banks
2%s
of
1956/59
with
the
former
institutions
are
the
St., New York 5, N. y.
Telephone WHitehall
>r
3-1200
Teletype N. Y. 1-3690
before
ever
in
continues at
and
employment
many
construction in
1949
For
the
of the
best
years
So
far
in
holds
than
in
even
boom-time
1950,
the
same
true.
In
effect, then, there has been
"buyers' strike," but the very
no
reverse.
Then, you may well ask,
did employment drop and
unemployment rise in the face of
why
this
unprecedented
volume
of
sales?
I
n
non
much
of
technical
-
the
language,
lies
answer
fact
that
cut.
In late
ness
inventories
inventories
in
the
being
were
1948, non-farm busi¬
being built
up at a rate rapid enough to ac¬
count
for
the
employment
of
roughly llk million factory work¬
in
But
ers.
months,
the
of
of
new
reversed
Sales
this
made
were
inventory rather than out
words,
1948's
nine
to
sharply liquidated its
stocks of goods.
out
six
next
business
process and
to
were
production.
In
substantial
a
peak
output
onto business shelves.
In
happened,
reverse
sales
were
not
was
instead
but
consumers
other
share
of
sold
went
1949, the
and
1949's
made
out
of
It
is
planning
rather
both
population growth and in
in
of
King Merritt Adds
(Special to The Financial Chronicle)
(Special to The Financial Chronicle)
Other
LOS
ANGELES, CALIF.—Her¬
bert C. Hansen has been added to
Vance, Sanders & Co., Ill Devon¬
the
staff
of
shire Street.
Chamber
of
King Merritt & Co.,
Commerce Building.
that
able and
our
economy.
consumers
are
It
still
willing to buy, especially
if business goes after the business.
It also shows that
are
lower than
our
they
inventories
were
a
year
The activity
industry is
other parts of
well.
points today are
high levels of in¬
and the
government
bolster
confi¬
economy,
such as
guarantees of bank deposits and
comes,
in
dence
many
which
programs
the
mortgages.
But
and
,
there
also
are
problems
difficulties
which
cannot
be
overlooked.
One problem has to do
distressed
made
strides
since
have
areas
with our
Our economy has
areas.
great
decades
centers
shows
strong
continued
increased output
became
imperative. Consequently, by the
year's end, inventory liquidation
was being replaced by inventory
rebuilding.
strong points in
living.
many
the economy as
the
making,
are
construction
the
supporting
mining
the
people
of
standards
level at
up
results
our
tries
points
<
enumerate
make-work projects;
from the great
or
it
Among
analysis
to
strides
With
sales exceeding
produc¬
tion, inventories in many, indus¬
which
possible
mid-'20s.
The
strength in this
industry is not due to government
over
a
levels, output
this year will
other strong points as well.
instance, the construction in¬
dustry will probably equal its
1949
accomplishments,
when
physical volume was as high as in
any
peacetime
year
since
the
1948's record output.
eventually fell to
demand
consumer
1949's
have to exceed the 1949 levels.
history.
In addition more
dwelling units were placed under
Strong Points in Our Economy
Vance, Sanders Adds
BOSTON, MASS. —Stuart E.
Cornell has become affiliated with
than
consumers
In fact, if
ago.
our
This
incorporated
■
in
1929,
the
yet
lost
actually
two
many
ground
this
period, because their
industries have declined.
major
these
districts
areas
in
.
and
New
many
are
also
textile
England.
Depressed Areas
While
the
ficulties
are
causes
easy
obvious.
In
the
their
dif¬
far from
are
meantime
already constitute
lem.
of
enough to dis¬
the solutions
cover,
main purchasers of the iy2s.
& Co.
15 Broad
services and housing.
fact, more goods and services
were bought in 1949
by American
record
BEST ACTING ELIGIBLES
Aubrey G. Lanston
goods,
condition
issue of tap bonds is not in the immediate
offing, why
the continued selling of these securities
by Federal to increase the
yields of these securities?
Some hold the belief the monetary
authorities for a time want yields to increase
of
■
In
new
far
TREASURY
for
20s.
WHY FEDERAL PRESSURE ON THE TAPS?
some
.
.
29
page
Employment Trends in 1950
it
a
obligation. The surprise factor will prob¬
ably still be kept in the picture by the authorities, and this
a
.
jrom
success
30-year Zx/z% were offered at 100,
after all the preparation that has been undertaken to get prices
If
■
.
that be like to spring surprises
powers
the government market when
may
t
•
Continued
compelled to di¬
were
even
50 Church
u. s.
de¬
a
be necessary had not the Govern¬
during the past decade or two developed pry¬
ing eyes, and if it had always been on the up and up
rather consistent sellers of
period, this does not in the opinion
market followers, give the market the kind of psy¬
chological attitude that is usually developed for a new issue of
securities.
Also it has generally been the policy of the monetary
the state of things
ment
of some money
done in order to
Street, New York City,
in a securities business.
sad commentary upon
a
the tap issues for a considerable
and this
Truman
It would not
now.
This, despite the fact that the pressure to lower prices*
outstanding obligations could be for the purpose of preparing
the market for just such an offering.
On the other hand, since
Mutual Fund Mart with offices at
to engage
to have many follow¬
ers
or
The Financial Chronicle)
appear
of
authorities
President
that the President finds it
necessary to make such
statement as this.
The feeling that a new issue of restricted bonds is in the mak¬
Nevertheless, the
to
<
NEW ISSUE OF RESTRICTEDS IN OFFING?
where would the surprise
DULUTH,
of his employ¬
reason
"Life and liberty in a free
democracy entail a
variety of cooperative actions for the common good.
The prompt,
complete, and accurate answering of
all official
inquiries made by census officials should
be regarded as one of the
requirements of good citi¬
zenship and an exercise in fundamental democ¬
racy."—President Harry S. Truman.
***
bonds.
on
Own Office in Duluth
fear that dis¬
no
ment.
be done, it seems, is to try and guess what the powers that
on
George M. Vivian Opens
(Special
knowledge by
be might have in mind in pushing down prices of the ineligible
certain
1949 the company
In
stock. The
national,
are
Federal which
can
any
ordinance.
or
information which may come to his
confused, be¬
of subsidiaries for
the year was
400,000
moving into
few
very
authorities
a
income
are
of
local law
or
regarding any
individual person or his affairs. For
the due protection of the
rights and
interests of the persons
furnishing
information, every employee of the
Census Bureau is prohibited, under
heavy penalty, from disclosing any
if any understand exactly what the monetary
aiming at by keeping the pressure on the ineligible
obligations, particularly the victory bonds. Prices of the tap issues,
especially the longest maturities, continue to give ground because
of selling by Federal which at times has not been too substantial.
cause
Operating revenues of
the subsidiaries for the year end¬
ed Dec. 31, 1949 were $60,155,466.
Net equity of Texas Utilities Co.
the
also
note
The government market seems to be pretty well
2,250,000.
in
1 Yi%
new
for
or
closure v/ill be made
MARKET CONFUSED
of Texas.
The area
population of around
parts
ern
eligibles and the
sev¬
used
regulation, or
jury service, the
"There need be
being acquired
taken by all deposit institutions.
Specialized buying is being done in the 2%s due 1960/65, with
a couple
of large swaps being reported into this issue.
The
1956
be
not
of taxation, investigation,
enforcement
state,
fairly sizable amounts by various investors.
strong hands.
000,000 for Texas Electric Service
shares
and
$1,500 000
for
Texas Power & Light Co. shares.
also
are
the
In the bank obligations the longest taxable issue continues
$2,-
Co.
.
to be in demand and is well
subsidiary
shares;
1963/68
will
census
in connection with
military or
compulsion of school attendance, the
regulation of immigration or with
These bonds appear to have
term
tutions.
decennial
purposes
attraction
Power
Co.
enteenth
which is being done through switches is not having an unfavorable
influence upon the 2V4S due 1959/62.
ly as follows: $3,000,000 for Dallas
Light
"Individual information collected under the
Despite the uncertainties that go along with Federal's con¬
tinued liquidation of Treasuries (undoubtedly to keep yields within
desired limits), there is a sizable demand for specific issues in both
the eligibles and tap obligations. Selective buying, a good part of
operating companies approximate¬
&
Why Should Such a
Statement Be Necessaiy?
Governments
on
By JOHN T. CHIPPENDALE, JR.
$1,200,000 of bank borrowings and
purchase
additional
shares
of
common
Reporter
a
they
serious prob¬
For
instance, there are at
present 39 labor market and eco¬
nomic
ment
areas
of
which
Labor
the
classifies
as
that is having at least
of every eight workers
areas,
out
Depart¬
employed.
Of
these
"E"
one
un¬
depressed
Volume
171
areas, 15 are
Number 4892
THE
predominantly textile
are located largely in
England. Another nine are
mainly coal-mining areas located
New
in',;
Pennsylvania,
Illinois,'
/
and
had;
New homes constructed in 1950
virtually
forgotten
about these areas during the war
arid the boom years
following. But
in 83%
it
to
took
strip
only
off
minor
a
their
setback
of
veneer
pros¬
perity and to reveal them
jor problems.
Now that is
with
which
long-term
ma¬
faced.
are
It
is
important
as
boom economy
J
a
normal pace.
There are other problems
a
will
at
the
a
we
least equal
CHRONICLE
lished
estate
New dwellings produced so
they
be sold under $8,000 have be¬
can
come
market survey.
one-third
duction of
dwellings will ex¬
ceed last year's total, the
report¬
ing real estate boards predicted.
of
dwelling
significant portion of na¬
housing
construction
—
roughly one-half of it.
Increas¬
ing volume of "middle income" or
lower-priced dwellings and im¬
pro¬
new
Construction
a
tional
of, the cities
the
country
estab¬
all-time record in 1949.
an
in
mortgage money
supply for home buyers are powprovement
units
to
(1227)
erful forces that
are
steadily and
rapidly normalizing
housing supply.
Despite
throughout
the 1949 mark
of the 470 cities reporting
National
Association
of
Real Estate Boards in its 50th real
In
but it will become
one,
increasingly
swing from
as
type of problem
one
we
to
FINANCIAL
Survey of National Association of Real Estate Boards reveals
1949 record equalled this
year in 83% of cities reporting.
k.
Indiana.
We
&
High Level of Home Construction Maintained
cities, and
•
COMMERCIAL
the
the
of
and
portion
in
the
nation's
construction
is expected to be
ably
slightly
tc
engage
Mutual
in
Shares
to
able^ Another
penditures
is
too.
that
drop in
a
be
to
appears
unavoid¬
capital
ex¬
for
plant and equip¬
to have passed their
ment appear
peak. A third unfavorable possi¬
bility is that farm income may
decline
significantly
addition,
it
1950.
In
apparent that
readjustments have
postwar
yet
in
is
caught
with
up
all
General Reinsurance Group
the
not
of
our
industries,
particularly automo¬
higher-priced housing.
of today's doubts
about
Largest American multiple line market
dealing exclusively in Reinsurance
biles and
Most
»
'<
the
economy
into
the
be
can
combined
question which
I
asked
at the
beginning of this talk: Have
reached, temporarily or per¬
we
manently,
ceiling to
a
our
econ¬
omy?
The conclusion which I present
to you today is
basically optimis¬
tic, though it does not ignore the
potential pitfalls. The weaknesses
in the present situation cannot be
overlooked, but those now on the
horizon are not important enough
to upset
the rest of the
still
have
needs,
and
nessmen
isfied
large
unsat¬
they
operating to prevent any col¬
lapse of farmers' income. Specu¬
lation and private debt are both
relatively small,
and
credit
is
easy—all in sharp contrast to the
conditions
which
prevailed
in
1929. In addition, there can be
such
facts
the
as
McGraw-
Hill statement that expected busi¬
outlays
actual
much below
are very
need.
At
the
Corporation
Corporation
least,
.
no means come to
Bonds
ment
.
Our population
rapid
a
the population
years,
million.
for
is expanding at
In the last four
rate.
This
means
by
grew
8
needs
more
things. Our labor force
is expanding steadily. This means
more
hands
more
seeking
are
Our know-how and
also
are
year.
young men and women
from college in
war
goals, and
ties
huge
corners
as
to
many
graduating
pre¬
standards,
our
increasing. There
waiting
only
not
the
on
90
and
to
in
other
county in
output of
needs
far
are
are
our
560,600.00
1,039,680.00
Common Stocks
.
.
.
1,038,243.36
.
17,010.00
8,662,840.53
be
course ot
collection
(not
over
1,357,076.64
175,972.19
23,401.74
Total Admitted Assets
$53,557,093.55
.
Total
18,273,472.67
Balances due from
days due)
Other Admitted Assets
(not
over
Ceding Companies
90 days due)
Reserve for Claims and Claim
Reserve for
74,651.77
Other Admitted Assets
Expenses
Voluntary Reserve
Surplus
$24,540,269.55
.
7,604,648.44
....
3,188,036.36
.
...
$ 3,224,139.20
Capital
Surplus
46,398.38
Total Admitted Assets
$21,566,894.16
LIABILITIES
Commissions, Taxes and
Other Liabilities
1,157,632.35
Accrued Interest
LIABILITIES
Reserve for Claims and Claim
Expenses
Reserve for Unearned Premiums
side
of
present
factories, and these
capacity,
we
we
to
Policyholders
18,224,139.20
$53,557,093.55
.
Surplus
to
Policyholders
....
may
justifiably
will
the
continue to
sense
sense
of
of
have
our
..
6,158,399.30
.
Total.
$21,566,894.16
c
are
valued in accordance with the
requirements of the New York State Insurance Depart¬
ment.
On
the
hasis of December 31,
tions for bonds and stocks owned
affiliates), Total Admitted Assets
$54,116,615.37
and
deposited
as
Voluntary
at
1949 market quota¬
(other than stocks of
would
Reserve
be
to
increased
to
$3,783,661.02.
$5,039,459.92 in the above
statement
required by law.
Bonds and stocks owned
are
valued in accordance with the
requirements of the New York State Insurance Depart¬
ment. On the basis of December
31, 1949 market quota¬
tions for bonds and stocks
would
be
increased
to
owned, Total Admitted Assets
$21,735,159.93
$5,026,665.07. Securities carried
statement are
deposited
as
at
and
Surplus
Casualty
\
Fidelity
•
Fire
Surety
•
confi¬
economy
be stable,
not in
stagnation, but in the
expansion and progress.
90
john
'
Inland Marine
Ocean Marine
street,
new
york
7
to
$523,847.62 in the above
required by law.
have
willingness to work together.
dence therefore that
i
4,858,399.30
the markets. In addition, we still
We
1,130,121.37
•
Surplus........
10,000,000.00
have
haye the vision to plan ahead and
the
12,588,938.49
the
country.
the
manpower,
$ 1,689,435.00
$1,300,000.00
growing.
skilled
.
....
Reserve for Commissions, Taxes and
Other Liabilities
Capital.
5,000,000.00
Bonds and stocks owned
are
de¬
Mortgage Loan.
neglected
own
above
We have the
the
our
.
Accrued Interest
are
earth, but in virtually every city
Needs
.
48,684,296.00
Securities carried
markets
veloped,
year
world-responsibili¬
our
all
are
work.
1949 than in
Our
years.'.
.
Total
Premiums in
6,297,329.71
Preferred Stocks
Total
twice
were
,/•
Other Common Stocks
$10,360,289.60
....
6,131,727.31
.
Other Preferred Stocks
Bonds
Other Bonds
North Star Reinsurance
efficiency
our
expanding from
There
12,169,003.53
....
Corporation Stock
$ 2,014,738.99
United States Govern¬
$20,681,044.63
.
ment
Other Bonds.
*
Cash in Banks and Office
Investments:
^
Reserve for Unearned Premiums
end.
an
$ 3,316,346.98
United States Govern¬
there¬
from its earliest days has
economy
ASSETS
.
Investments:
fore, cautious optimism seems to
be perfectly justifiable. The ex¬
pansion which has marked our
by
Financial Statement, December 31, 1949
ASSETS
Cash in Ranks and Office
have
to fill
are
cited
North Star Reinsurance
Financial Statement, December 31, 1949
abundant purchasing power
those needs. Government supports
ness
General Reinsurance
economy,
especially when they are stacked
up against our real and significant
strengths. Consumers and busi¬
a
Corp.
securities business.
a
are
provement.One is that
exports
in
securities
has been
Street, New York City, to engage
in
always cropping up
economy of change and im-
an
have
formed with offices at 76 Beaver
more
Problems
Rashman
Mutual Shares Corp.
1950
the NAREB survey.
A.
business.
history.
for
according
more,
vard
great, prob¬
as
Pnilip
offices at 141 West Jackson Boule¬
rental
rental
Financial Chronicle)
formed Max Neirman & Co. with
building and in¬
vestment, rental
production
in
1949 made up 23% of new hous¬
ing construction, the largest pro¬
And
to The
CHICAGO, ILL.—Max Nierman
continued
control, which real estate boards
throughout the nation said was
the
major
deterrent
to
even
greater
Max Nierman & Co.
nation's
(Special
fear
35
M
Continued
from
4
page
act
audits by the Exchange.'"
of
members
allied
customers'
the
Ex¬
few stocks and
as
although they frequently also act
They cannot, of course,
transact business directly on the
who buy and sell
those stocks for their own account,
commission
as
brokers
for
otner
members who have orders to ex¬
in
ecute
stocks.
those
third
A
group—odd-lot brokers—buy and
sell
securities
traders
who trade
the
trading unit.
those members
are
solely for their
fifth
A
count.
than
100-share
standard
Floor
less
in
group
own ac¬
change.
so through the
is a member or
through some other member of
the
exchange.
Allied members
generally
devote
their
efforts
toward dealing
with the public
and administering the affairs of
Members—are not
All firms which are members
the
are
every
which
members
are
in
of
firms
the
ex¬
change. We will discuss the vari¬
functions and roles that each
ous
of
these
when
of members play
to study security
types
we
come
We
have
firm
and
firm
to
of
spoken
be
for
a
member of the New
a
sponsibility. The New York Stock
Exchange also has stringent regu¬
lations with respect to the opera¬
tions
financial
and
of
which
of
primarily
are
de¬
a member
firm in addition to those require¬
For example,
have
York Stock Exchange at least one
ments
must have
we
already discussed
minimum amount of
a
between
ratio
amount of
its capital
and the
business it may trans-
in
share
out
Listing Requirements
will
now
ments
a
the
place,
meet
Exchange.
In
in
must be a going
with substantial assets or
a company
demonstrated
earning power or
emphasis is
Particular
both.
placed by the Exchange
account
on
what he called
and he
advisory basis.
an
He told
me
he didn't
But the real reason the sale wasn't
friend gave me. I'll tell you what he
said and then we'll analyze it together.
do
it
made
told
not the
was
Here
is
why.
me
reason my
what
salesman offered to give my
friend full consultation privileges, and supervision of his account.
happened.
The
For this he wanted to sell him
to time and make a
profit thereon.
dle all listed business
In addition, he offered to han¬
basis of regular commissions plus 50%
a
The investor who said
added.
more
on
unlisted securities from time
some
no
to all this told
me
that he
told the salesman that he wouldn't want to take his information
end then be placed in the
position of being tempted to buy or sell
He also said that when the salesman heard
of his total funds in one company^ that he
wanted him to go to work immediately and start to dispose of this
holding.
*
' ' *'.V"\
<•
through
someone else.
that he had about 30%
The real
why this salesman did not get the account
reason
was
of course, no confidence.
Bad enough when he went right to work
hammer and tongs on his idea without proving to his prospect that
he was first able to handle his account properly; and second, that
he
truly interested in his prospect's welfare.
It is almost, un^
salesmen will go out and try to close business
before they have prepared the way.
A man's money is a mighty
important matter and not to be handled lightly.
You don't make
was
believable- that
easily today —
have to do is to make
money so
you
you
a
the
right
(1)
also lose it mighty quick.
Work
notes.
it.
on
Stress
Discuss
the
Now let
us
All
look at
V
make this sale:.
way to
Make Contact—Your prospect has
Find it.
<Make
can
few wrong moves.
it
an
intelligently.
confidential
investment problem.
Start him talking;
aspects of your discussion.,
are able to do the job by the"
Prove in this first interview that you
way you obtain information, and your attitude toward his problem.'
Take it easy. Offer him an opportunity to do some
thinking.
him
Tell
bit about what your firm does in
building investment pro¬
grams for others. Not too much. Tell him you want to
study over
what you have talked about. Make an
a
further discussion
when you
appointment if possible for
will come back with some specific
suggestions.
(2)
securities
and
You have found his weak spots in the first call.
he started to tell you he had 23 different
as soon as
30%
in
one
company.
You showed him
jeady
to give the matter the consideration which
You went
out
hi
some
black
white.
You
(3)
Clincher—But
You laid
something
beginning to demonstrate that
He is becoming interested.
now
you can perform a service.
were
it warranted.}
back to your office and
you did some work.
weaknesses in his plan. You then showed him
and
you
in
securities
its
Since the
have a place to make a start. So
suggest a correction of one point. Possibly you start with a
partial reduction of the too heavy holding—you suggest a new in¬
dustry in which he now has no representation. He is interested.
Then you offer him a service of
watching his holdings constantlycalling weaknesses to his attention—or making him
up a review
every three or six months and you tell him
why this is
you
necessary.
You tell him you can take his investment
burden off his shoulders
that you are there to consult at
any time. For this work how¬
ever, you must charge him ad£e to compensate
you for the expense
and added work involved. You then discuss
the charges—you sell
Hjht.
*"
How any one could ever
expect to sell securities without build¬
ing confidence is beyond me. But if you want to set yourself un
as an investment advisor
you had better make sure you are one
If so,
think of anything else but the problem before
you
that means first of all an understanding and appreciation of
the extreme importance of the other fellow's
financial welfare
you
won t
He ll pay you whatever you ask—once he thinks
yQu know how to
*
.
? • •
Y
V f ^ ^
help him—not before?
industry
its
and
suffi¬
are
that
adequate
an
purchases and sales of
security are
addition to the
all
located
is
there
no
ed
In
is true of
as
with the Exchange describing its
activities, its officers, its financial
National
status, and the distribution of its
A company must also
prices
its
which
the country,
for all transac¬
listed security.
a
securities
may
by referring to the
Quotation Bureau sheets,
bid
the
report
and
ask
which security dealers all
over the country submit each day
to the Bureau for those securities
security
with
holders
ex¬
obtained
be
securities.
provide
one
However, approximate prices for
payment of listing
fees, a company must file a report
to
any
over
way
over-the-counter
agree
on
tions in that security to be record¬
mar¬
reports on its oper¬
ations at least semi-annually.
be
those
listed
whose
securities
are
will
find that this rule does not always
apply. For example, the securities
of the Joilet & Chicago Railroad
are
on
an
listed
on
exchange,
you
the New York Stock
Exchange but the
company
only 33
miles
road
another
railroad
small
its
of
owns
leased
aside
and
to
from
rentals has
no reported
Moreover,
the
slight
public interest in the
security is shown by the fact that
there are
only 15,000 shares of
income.
of
measure
company's
in the
outstanding
stock
hands of
only 54 different
stockholders.
On the other hand,
the
of
securities
insurance
billions
most
companies,
of
dollars
securities
over-the-counter
are
ciently widely distributed to offer
of
of
banks
with
assets,
as are
well
such
and
their
are
the
known
or the
Corp.
The Joliet & Chicago RR. ex¬
ample used above is, of course,
not typical and such instances of
listed securities are usually a left¬
companies
the
from
over
Exchange.
of
listed
or
small
they
now,
traded
early days of the
the securities
Before
new
a
the
Loft Candy,
as
Minute Maid
new
company
are
are
generally
during
over-the-counter
period
when the company is
growing and proving that it will
remain in business.
They
may
then be listed
er
New
York
of the small¬
on one
exchanges
possibly
or
Curb
on
the
Exchange. After
interested.. In further seasoning and upon the
quotation sheet, for example, evidence that there is widespread
we might see
several firms bid¬ public interest in those securities
ding for Abitibi Paper Co. at ap¬ they will then be listed on the
New York Stock Exchange.
listed on
the
New* York
Stock proximately $20.75 and several of¬
The over-the-counter market is
fering the stock for sale at $21.
Exchange or any other exchange, These
prices are not firm since also subject to the supervision of
this does not mean that the ex¬
the Securities and Exchange Com¬
change has put its stamp of "ap¬ they represent the bids and asks
for the previous day, but through mission.
Dealers, like exchanges,
proval on it as a sound invest¬
these
quotation sheets a dealer must be registered with the Com¬
ment or that the security is neces¬
can determine what other dealers
mission,
although
such registra-sarily 'ofk investment quality. It is
tion does not by any means indi¬
are interested in the security and
simply an indication that in the
at approximately what price : the cate the Commission has approved
opinion of the exchange there is
of the business operations of the
sufficient public ihtferest "in the security may be purchased or sold;
Generally speaking, you will dealer. Regulation of dealers and
security to warrant its -trading on
find that a dealer does not ordi¬ their practices; in fact, is effected
the exchange.
From. the. point of
view of the investing public, the narily handle each and every se¬ through an organization known as
the National 7 Association of Se- listing of a security on an ex¬ curity but tends to specialize in,
the securities of some particular curities
Dealers; " This Associa¬
change has this advantage, name¬
field.' For example, some dealers tion restricts and disciplines its
ly: it provides a greater market¬
dealer members in much the same
ability and assures that certain' specialize in municipal bonds of
basic information ismade available. United States Government bonds; way that an exchange operates
others may specialize in securities with respect to its member firms.
From
a
company's standpoint,
of banks and trust companies; still
We have previously mentioned
considerable prestige is gained and
there is a greater opportunity to others will specialize in railroad the Securities & Exchange Act
securities.
In part* this is the re¬ of 1934 and have noted that the
raise additional capital if needed
sult of the tremendous number of Securities and Exchange Commis¬
through the sale of additional
securities traded over-the-counter. sion provides for Federal super¬
securities.
While
there
are
only
a
few vision
of
both
exchanges
and
<
thousand different securities list¬ over-the-counter dealers. The Act
Federal Supervision
in
which they are
this
; At this
point I think it impor¬
tant that we understand clearly
that simply because a security is
'
'All
security exchanges
sub¬
are
ject to Federal supervision. Under
the Securities & Exchange Act of
it
is
unlawful
effect
any
exchange
un¬
to
ed
on
the exchanges of the coun¬
try, there are many hundreds of
thousands
of
securities
traded
over-the-counter.
No
one
dealer
prohibits security price ma¬
also
false
misleading
or
the unfair
and
Commission.
different securities.
less
the
As
exchange
previously noted, in
exchanges, securities
to
also
traded
counter
market
through
any
or
exchange
dealers
in
the
The
market.
counter
house
registered
is
have
we
addition
are
an
does
not
central
market
over-theover-the-
operate
clearing
place such
as an
but
who
is
made
up
of
within and between
offices establish
a
market for
se¬
curities by individual negotiations.
For example,
assuming that a cus¬
tomer
wished
to
purchase
100
shares of the XYZ company which
is not listed on any security ex¬
change, hp would go to a dealer
who
would
determine
the
best
price at which those shares could
A
second
tion
reason
for specializa¬
is that in identifying one or
more
dealers
interested
in
those
as
one
principally
field of securi¬
most
dealers
tomer's
Even
will
order
in
handle
any
willing to- sell 100
as
we
have
previously noted he
manipulator may
activity in
a
stock and make it appear in a
strong position to deceive buyers
who
might then become suffi¬
ciently interested to purchase the
stock at an artificially high price.
Similarly, under the Act, it is un¬
a
trading
if the dealer does
a
cus¬
thej-counter department.
The
question
are
may
a
security.
Restrictions
not nor¬
mally trade in that particular se¬
curity he will contact one of the
dealers specializing in the issue
and
execute the
order through
such a dealer.
A firm which is a
asked what
such
security.
member of an exchange can and
other
does
handle over-the-counter
dealers like himself who might
transactions also through its overhave
customers
or
who- might
themselves be
of "inside in¬
ties, other dealers can more read¬
to
disseminate
false
or
ily know to whom to turn for- lawful
executing the orders of their cus¬ misleading information which
tomers and thus greater market¬
might affect a security's price—
ability
is
obtained.
However, either upward or downward—and
while specialization is the rule, thus induce the purchase or sale of
be purchased by contacting
shares of the XYZ company. Then,
use
could be expected
with the Securities and Exchange
on
dissemination of
information
nipulation,: the
to know about* formation."
or even follow the price fluctua¬
For example,
tions of such a vast number of not stimulate
transaction
are
you must
rea¬
change but are separate transacactions of individual dealers who
1934
Clarify
You knew them
within
be
not concentrated
whether
a
a
the
traded over-the-counter
will
security
products, its relative stability and
position
security or if there
relatively few shares
security
available,
this
consideration may not be impor¬
tant.
While
generally 1 speaking
the
larger
companies
and
the
more
important companies will
of
the
the character of the market for its
ket for these securities exists.
The other day I had a talk with an investor friend of mine
who told me that just a few days before our conversation, he had a
visit from a securities man who wanted him to turn over his whole
a
in
only
are
the
an
its standing in its field,
assurance
By JOHN BUTTON
of
As
However, if there is little public
interest
competition among dealers
will keep prices near a uniform
level in every issue and the spread
between the price at which a cus¬
tomer may sell a security and that
which he must pay to purchase
degree of national interest in the
1
security.
that
sonable limits.
the
upon
trading
rule,
in
first
the
quotations
combined
all the dealers who are interested
have its securities listed
order to
on
must
company
over-the-
an
security is thus made up
the
by
membership in the
Exchange.
We
examine what require¬
Stock
York
for
market
counter
So much for
purchase
sell such shares.
or
The
company,
Securities Salesman's Corner
knowing in advance whether
he may be called upon to
losses of their customers.
New
announces
to buy shares at
53 and will sell shares at 54 with¬
and
profits
the
he
way
that he is ready
antees to their customers nor may
they
this
In
54.
other activity without the ap¬
proval of the exchange. They are
not permitted to make any guar¬
any
concern
capital, it must maintain a stated
or
those em¬
are
ployees of member firms who by
and large deal with the public, principal and then reselling the
providing information to tne in¬ shares to his customer at a some¬
what higher price.
vestor and taking his orders to
Dealers are said to maintain a
buy or sell securities. The Stock
market for a security when they
Exchange has equally stringent
stand ready to either purchase or
regulations with respect to such
sell shares of that security at spe¬
employees.
They must success¬
cific
prices.
For
example,
a
fully pass an examination given
dealer who maintains a market
by the Exchange after they have
in
the
security
of
the
ABC
com¬
had at least six months of train¬
ing.
They may not engage in pany might quote a market of 53-
its
investing
the
protect
to
public.
of its partners must be a
member
of, that is, hold a seat on, the
Exchange. The member firm may
have
many
other partners and
these we have already described
status
member firms and their partners,
member signed
a
that
noted
have
of
Exchange
Stock
partnerships, that is each and
partner has unlimited re¬
all
market operations.
York
New
scat
partners
who
the member firm.
really members
of the exchange but are the nonowning
but do
exchange
partner
Allied
—
-
brokers
best
the
•
,
representatives
Registered
Securities Business Primer
purchase those shares at dictating that certain securities be
price available, acting listed while the greater mimbef are
either as a broker and charging traded over-the-counter. We have
his customer a
commission, or already seen that a listed security
first purchasing the shares as a enjoys
greater
marketability.
would
is subject to frequent
and it
Thursday, March 23, 1950
FINANCIAL CHRONICLE
&
COMMERCIAL
THE
(1228)
'
well
be
the considerations
Finally,
every
person
directly
any
the
owns
on
"Insiders"
-
Act requires that
who directly or in¬
as
security of
much as 10% of
a company or any
officer or direc¬
file a statement
of his holdings of the securities
of the company and keep such
statement up to date by filing
monthly supplements showing
any change.
Any profits made by
person
tor of
who is
a
an
company
Volume. 171
such
insider
ran
within
six-
a
month
period, moreover, may be
regained by the company for the
benefit of all its security holders.
Federal
legislation to protect
the
investor
is
also
provided
the Securities Act of
this Act,
THE
Number 4892
„
1933.
the issuer of
not acting as an underwriter but
as a
se¬
curity
selling agent and his
is
he
as¬
sumes
but for the efforts and
ex¬
pense
made
not
a
considerable
sold.
new
This type
containing the
pertinent facts in that registration
also used in
statement must be delivered to all
sale
prospectus
purchasers
of
registration
pectus
facts
the
security.
statement
and
contain
must
about the
The
pros¬
pertinent
and the
company
security
being issued including
following: (1) the purpose of
the issue; (2) the price at which
the
to
securities
can
be
to
purchase those
be retained
ing market.
securities at
In this case,
company's
•
taken
by
up
stockholders
present
of the recent
case
investment
underwriters
issuing
common
Consumers
offered
were
Power
the
to
agreed to purchase
unsubscribed shares at this
price
for
ceive
a
Actually,
chased
the
some
company
287
which
they
commission
would
of
90
stockholders
416,208
re¬
cents.
pur¬
shares
and
employees another 21,-
shares,
leaving
the
under¬
writers
in¬
ing only 16,962 shares. The
responsible
for
purchas¬
com¬
we
ing
with
the
with
arrangements
the
then invite
and
company
Stanley
responsible for
pated
investment
banking firm is
for
designated
its
share. Thus, in the case of the re¬
the
group
some
to
3.15%.
will
Some times underwrit¬
a portion of their
selling fee to other brokers and
ers
give
dealers for selling the new
secur¬
Such other brokers and deal¬
ity.
collectively are designated as
"selling group" and should not
be confused with the underwriters
who
collectively,
as we have seen
"purchase group.'
does not assume
are
called
the
The
selling
group
any
risk and is simply
channel
for
a
further
distributing the
securities.
stock
option agreements, if any;
(4) underwriting profits; (5) sal¬
aries of principal officers; (6) de¬
financial
statements
in¬
tailed
cluding
company's
balance
sheets
capitalization,
earnings for
previous years as well as its most
recent statements; (7) names and
addresses and stock ownership of
officers
and
and
and
directors
stockholders
owing
Continental Oil
any
Reports for 1949
than
more
of any security of the com¬
10%
In the event the issuer has
pany.
made any untrue
statement or has
omitted any material facts, a pur¬
chaser of the security may sue to
recover any losses.
The Investment Company Act
of
we shall see when we
discuss investment trusts and mu¬
1940, as
tual
funds, also affords certain
protection to investors by its re¬
quirements with respect to these
investment media.
closing
se¬
curity markets, we should also say
a
word about new
For the
of
companies.
proven
However, from time to time, new
established which
public for financing,
while going concerns also issue
additional securities to pay off
maturing obligations, or provide
funds for expansion.
As we shall
see later, the conservative inves¬
tor will not usually be interested
in the securities of new compa¬
companies
nies
are
the
to
turn
the
but
companies
proven
securities
new
may
of
often be
industry. To
are generally brought
market
through
what
public
The investment banker is
house.
who
middleman
a
to
is
investment banking
an
sets
up
the
sale of these
securities and he is paid a small
machinery for
the
proportion of the sale price of the
security for his efforts.
A few
securities are sold directly by a
public
the
to
company
but this
direct method of sale is not
usual.
Up until relatively recent years,
an
investment
banker handling
a
security
new
it at
to resell
higher price, the
and
selling
a
cost
in
difference
com¬
a
that issue
purchase
would
pany
of
issue
era
of relative
a
large
this meant in most instances
consumers
more
goods at lower
greater
even
1948 with the
growing availability
of
petroleum supplies, slackening
of
demand, and consequent stiffen-,
ing of competition. These factors
became greatly accentuated in 1949.
The oil
industry, however,
can
be
proud of a job well done in creating
a reserve
productive capacity which
by the end of 1949 had reached
about 700,000 barrels per
which would be of vital
to
our
nation's
price representing his profit.
In
other words, the investment bank¬
er
assured the issuing company
day and
importance
oil
reserves
production
are the back¬
Continental's
activities in the
exploration and develop¬
ment
ph&ses of the business have been
maintained at
high levels. At the end of
1949 the
Company's holdings of produc¬
ing and prospective lands totaled 4.2
million acres, 45% above the
prior year.
Expenditures for finding oil and develop¬
ing production in 1949, including both
capital and expense items, amounted to
$43.3 million
compared to $39.5 million
in 1948.
security in periods of
and
bone of an/oil
company,
Earnings surpassed only by 1948
•
record.
Stationary levels of demand, re¬
ductions in crude oil
production which
were
due to stricter conservation
meas¬
ures, and declines in the prices of refined
products had a pronounced effect on the
earnings of oil companies. Continental
Oil Company could not have been im¬
mune to these influences. Net
earnings
for
1949
amounted
$36.1
to
million,
equivalent to $7.48 per share. With the
exception of 1948 these are the highest
earnings in the Company's history and
exceed
by 15% those of 1947. Dividends
were
paid at the rate of $4 per share and
totaled $19.3 million.
tion
measures.
duction
million
Total net crude oil pro¬
by Continental in 1949
barrels,
or
was
35.2
96,529 barrels per day.
Proration restrictions
by state conserva¬
large measure
drop of 13% from the 1948 pro¬
tion authorities account in
for the
duction level. Continental
ever, a
its
remains, how¬
producer of crude oil in
excess
gas
policy fol¬
lowed. As natural
gas has become an
increasingly important factor in the na¬
tion's
economy, an aggressive policy of
development of gas reserves and markets
was followed
throughout the year with
resultant increases in sales and
During 1949 natural
gas
revenues.
operations and
related
Continental's net income calculated be¬
in
public at
use
profit. Hence,
Even
connection.
this
issue
a
of the term underwriting
fully
not
did
sell
if
or
the
was
eventually sold at a lower price,
assured of re¬
ceiving the set amount, and the
the
company
was
underwriter took
recently,
sues
known
This
many
have
as
a
means
the loss.
new
More
security is¬
what is
"best efforts basis."
that the investment
been
sold
sell
agrees
the
from the issuing company so
be assumes no risk if any
ties
are
not
sold.
In
equipment during 1949 amounted
as
compared with $51.3
million in 1948. Of this amount, $33.3
million
or
63%
was
spent for leases,
wells and
equipment; $11.4 million for
refinery facilities; and $8.0 million for
marketing and other facilities.
that
sales
revenues
declined about
5% due
reserves
high level. Because
maintained
adequate crude
to
general decreases in refined products
prices. Late in 1949 Eastern marketing
properties of the Company were leased
or
disposed of in order to achieve a
f urther concentration of
marketing effort
in the Middle West,
the
the Southwest and
Rocky Mountain area.'
contributed
17% to
competition. The year 1950
promises to be a period of even more in¬
tense market
competition. Continental's
management bel ieves, however, that given
the
opportunity to search for oil com¬
petitively and with adequate economic
incentives; Continental will be able to
find crude oil reserves and
develop
favorable
position, to improve its com¬
petitive standing, and to fulfill its respon¬
sibilities within the American
depletion and income taxes.
pro¬
duction sufficient to maintain its present
economy
in
6. New refinery facilities provide im¬
meeting future normal and emergency
demands for petroleum and its products.
proved products. The
Company's post¬
refinery moderniza¬
tion
program has been
largely completed at the
cost of
approximately
CONOCO
war
$27.3 million. New facil¬
ities
at
Ponca
The
are
Company's operations in 1949
reviewed in detail in its Annual
Report to its stockholders. A copy
will be sent without charge, on re¬
quest. Please address Continental
Oil Company, 10 Rock e feller Plaza,
New York 20, New York,
City,
y
securi¬
the latter
banker is
instance, the investment
3. Search for oil
at
fore
activities
$52.7 million
on
to do his best to
securities to the public
but he does not actually buy them
banker
and
to
record
market
5. Aggressive natural
property, plant
the
products in 1949 rose to
high of 1,627 million gallons
although there was a slight decline in the
demand for
petroleum and its products
in the United States
during the year.
Despite the increase in sales volume,
a
!L 1950promisesevenmore intense
1948. Total additions to
the
high. Continental's volume of
sales of refined
of
refining requirements.
2. 1949 capital expenditures above
to
7. Sales of refined products reach
record
4. Production reduced by conserva¬
f
1
year.
'
•
would then resell those securities
the
from
money
barrels for the
:
,
sale of the
securities, taking the risk that he
the
Oklahoma;Billings, Montana; and Den¬
ver, Colorado give Continental greater
manufacturing flexibility, better product
quality, and increased capacity in those
ar^s where the Company has natural
economic
advantages. Refinery runs at
Company plants and by others fdr the*
Company's account totaled 32.5 million
industry this transition had its beginning late in
emergency.
Investment Banking
as
early postwar
condition of generally abundant supply for
efficiency to meet the challenge of increasingly competitive markets.
New securities when sold to the
known
an
prices. To alert business management it signaled the need for
of interest.
the
of transition from
segment of the United States economy and in particular for the petroleum
security issues.
part, investors will
be concerned with the existing se¬
most
curities
a
Within the petroleum
discussion of
our
was one
scarcity of products to
Issues
New
In
THE YEAR 1949
6%
banking firms partici¬
with
obligations ranging
from one-third of 1% of the issue
ers
responsible
was
of the shares while some 78 other
the
Each
examined,
banking firm of
manager
join in the distribution.
The in¬
have just
investment
Morgan
other investment banking firms to
itiating firm is known as the
"originator" or "group manager"
while the selling firms collective¬
ly are called the purchase group.
37
by the Consumers Power
underwriting cost
$15,000. >(We shall
discuss the subject of rights more
fully in next week's lecture deal¬
of only some
ate
the
cent sale
Co. which
the
an
share for each ten shares
held, the
any
a
securities for
company's stockholders at $34.25
per share on the basis of one new
by
which
go¬
an
the
security market opera¬
tions.)
Actually, for most large
sales of securities, no single in¬
vestment
banking firm handles
the entire underwriting by itself.
Usually, one firm will initi¬
Co.
the
relative to the
not
stock
of distribution is
with
(1229)
simply agree pany thus assured itself of the
stated price any' sale of more than $15 million of
a
issue of 454,457 shares of
of a highly speculative se¬
curity, for example, a new gold
mining company or a new "wild
cat" drilling operation.
Sometimes,
a
going
concern
will issue nbw securities and give
its present shareholders the right
favorable price
(3)
as
securities
Thus, in the
when
question
connection
the issue is being offered to the
public and how much of this will
by the company;
made
purchase at
assuring the company of the
sale of its securities.
the market is depressed and there
whether the
and
be
FINANCIAL, CHRONICLE
thus
wilh
connection
will
distribution
mission
statement,
risk
security sales.
Generally a "best efforts basis"
is
registration
in
to
the
issue must file with the
Securities and
Exchange Com¬
a
the
for
&
vestment banker will
compen¬
sation
Under
new
a
by
COMMERCIAL
CONTINENTAL OIL COMPANY
•
u-
•
'-n
new
38
COMMERCIAL
THE
(1230)
Change in Long Money Rates: Nadler
Co., economist
future trend will depend largely
Reserve open market operations.
says
While this is
Addressing officers of the Cen¬
of
Finance
at
present inter¬
should deflationary forces become
est
apparent, then one can ex¬
pect a reversal in the present pol¬
n
i
v e r
sity,
that
basic
no
rate
pat-
is
tern
more
ex¬
icies
pected,
"The
pattern
of
was
rate
the
rates will
extent
set
on
authorities.
Reserve
trend
of
depend to
long-term
a very
large
the open market opera¬
the
Federal
Reserve
term
viewpoint
rather
are
pes¬
simistic.
/
Debit
balances
change
the
Reserve
authorities
and
the
refunding operations of the Treas¬
ury influence the banks?
I be¬
lieve one may state with confi¬
be visualized,
really see any ma¬
terial change in the rate struc¬
ture. At present we are witness¬
ing a moderate firming in shortcannot
cannot
the
months
to the
Spring
before
of
1946
the
stock
few
a
market
that holdings of securities
by the commercial banks in 1950
dence
will increase. They will hold more
Government obligations because
in their stock market transactions.
Continued from page 11
The
Factonin Approaching Depression
short
position
has
risen
steadily to the largest number of
shares in 18 years. Several fslcts
indicate
those
who
have
sold
short, have a sophisticated IpngFederal debt and tax rates were cally feasible to launch additional term
viewpoint. They are not
low. It was accordingly possible spending programs to prevent a scared into
"covering" when their
for
government
purchases
of forthcoming depression?
stocks rise, nor do they "cpver"
goods and services in 1937 to con% :
for quick profits when their stocks
stitute
13%
of
Gross National' Summary of Depression Causes
fall. The 20 largest short posi¬
Product Compared to 9% in 1929.
The foregoing economic malad- tions in terms of market value
Yet this did not achieve full em- justments are brought together for are in stocks which
appear to be
_
chases
comparison
pur-
in
the
following
17% of Gross National
How much more can
table. It is interesting to note that
in 1937 the percent of these mal-
they be increased to compensate
for a prospective decline in private spending? Congress seems to
adjusted expenditures to Gross
National product was about the
are
Product.
are
deterring
both
and investment.
same as
in 1929, and a depression
Factors of Economic
Instability
1937-
Instalment credit
Billion
%
Billion
%
100.0
$90
100.0
$256
100.0
8.3
7
7.8
26
10.0
0.5
0.5
0.4
0.5
3
1.2
6
5.5
5
5.5
19
'7.4
1
0.9
0
0.0
4
9
8.7
12
13.0
44
increase-
Producers' equipment
Net exports
-
Government purchases
Recent Rate
%
Gross national product
$104
9
Consumer durable goods-
'
7% for all listed stocks. The
three largest short positions are
in Chrysler,
Studebaker.
General Motors and
The
remaining
17
1.6
from
page
It is frequently stated that our
solvent.
dicts
Of
such
and
about
the
in
1929.
23.6
3.9
23.6
2.6
20.0
3.9
banks
may
course, no one pre¬
losses will occur, but
act
Mercier,
quickly
diesels
by
Mr.
Marshall
Co.,
in
*
short
position, confirm by their choice
of industries the foregoing eco¬
nomic
1 y s i s
forthcoming
Conclusion
is
There
a
statistical
approaching
condition to
important
evidence that
we are
depression in
worse
weather it than in 1929. Our govr
is
ernment
more
determined
Dunn
"Commercial
end
of
and
of the
of
the
or¬
Financial,
9th
instant, in
appraising the ratio of nine fac¬
tors determining soundness and
efficiency of railroad operation
including maintenance, transpor¬
tation, wage arid operating ratios,
,
indicating. a
decline in the de¬
mand for durable goods.
•
net ton-miles
a n a
the
Wood, Struthers &
exhaustive article.in
an
Chronicle"
their
increased
by
of
the
steadily
Pacific,
to replace all but its newest
and most efficient steam locomo¬
ganization
loaded
per
gross
ton-miles
sales
as
car
train
per
mile,
hour,
measured
by ton-mile
revenue freight, freight
density, coverage of fixed charges
figure and
10'to 20 years, has rated the
over
42 Class I Railroads in the order
to
prevent
a
sources
for
.
indicate
will
how
depression
a
soon
For
example, credit
analysis in 1928 indicated the rise
in slock prices at that time was
come.
based
in
unsound
an
on
stock
market
of credit
use
speculation. Yet
the inevitable crash did not
come
million
lion
of
which about
has
while
has
spent
amount
debt
to
$94 mil¬
stockholders,
approximately $262 million
been
this
paid
the property;
have cut the
on
could
almost
in
half
and
for
11
could approximate $25,800,annually.
This does! not in¬
analysis how indicates the recent
clude depreciation but consists of
rise in consumer durable goods
the writer's "across the boards''
spending is based on an unsound
until October, 1929. Just so, credit
of instalment credit, but no
can predict exactly how far
qse
orie
it
will
come
1939
In
go.
ratio
the
of
credit to disposable in¬
consumer
was
slightly higher than in
1929, but it continued to rise fur¬
ther
until
the
of
retail
trend
sales
(especially
goods
of
end
1940.
of
The
years
000
calculation
should
autos)
The
thus
Southern
to when
a
depression
Pacific
Railroad
evidences the elements of
ritory.
as
income
come.
for
clue
net
We should thus be influenced
by the value of the bond and the
value of the equity and the in¬
growth
a
actual
nually.
accordingly be watched carefully
is imminent.
on
received. No wonder the manage¬
ment felt they should pay $5 an¬
durable
stock
Other
in
a
growth ter¬
income since 1936
a
has
averaged $8% million an¬
nually with a high of $11 million
and a low of $7 million. It has
averaged
cash
working capital
$92 million
annually
through the last eight years as
against $40 million in 1941, $20
million in 1940, $8 million in 1939
and $200,000 in 1938.
around
So. Pac. 3's of 1960—Convertible
Investment
Opportunity
Population gained in the States
of
Washington, Oregon and Cali¬
43%, 49% and 45% respec¬
tively in 8 years to July, 1948
fornia
the prosperous
St. Louis & South¬
Its
growth
is
evidenced
by
receipts of $587 million in
against $225 million in 1937,
$200 million in 1938 and $250
million average in 1939, 1940 and
1941. In 1942 it reached $472 mil¬
lion
and
$597 million in 1943
1948
which
has
been
was
a
against
west it dominates Texas.
17.0
to call
loans when signs of economic dis¬
the facts indicate some financial tress appear, in view of their in¬
conditions are worse than prewar adequate capital.
strong financial condition will pre¬
vent a depression.
Unfortunately
T.
1960.
4
total
Our Unsound Financial Condition
A.
pany
tives
to
Continued
greater.
1929
Billion
Ratio—
cheap in relation to current
earnings and dividends. Most of
them "yield" about 10% compared
very
,»"■
now
,
13.0
6.0
along* Note the percentages are
consumption
Will it be politi-
1949,
of their comparative superiority
depression, but its re¬ in these factors. He also
carefully
doing so have been
compiled the ' increase of their
greatly depleted in recent years.
gross and operating revenue as'of
The depth and length of a depresthe improvement of the period of
about five million shares on bal¬
siori, of course, depend much upon
ance since May, 1949. This means
1944-1949,
1940-1949
and
1949
the decisions made by producers,
those who buy for cash, have
severally over the periods of 1938
consumers and government bodies
arid 1940. In that order of prece¬
been liquidating stocks.
after it starts. If most of these
dence, Southern Pacific was 10th
Open-end investment trusts decisions lead to a speedy cor¬ in
each case except in the' last
of
the
maladjustments
(which invest for small investors rection
instance, 1949,
superiority was
impressed with recent high yields) causing the depression, it may be 13th for Southern Pacific
but was
have
Wrong
decisions
would
bought on balance about mild.
rated 6th in the order of prefer¬
$100 million in stocks during this greatly prolong it. Let us hope
ence for the acquisition of securi¬
period,
but
closed-end
trusts our efforts to correct these mal¬ ties of the 42 Class I
Roads.
(which exercise more judgment) adjustments will be wiser and
The common stock is the only
more effective than they were in
have sold stocks.
stock outstanding. The road has
the 1930's.
Stock
exchange partners (off
The foregoing analysis does not given little to stockholders and
the floor) have bought about six
since 1938 has earned about $356
term rates.
This will continue as there will be more outstanding
long as business activity is on the and they will hold more tax-ex¬
upgrade. Should business activity empt securities.
The increase in
begin to decline, however, one can the holdings of securities by the
banks
will
expect a softening in the short- commercial
bring
term rate.
In my opinion, the about an increase in the volume
degree of fluctuation in the cer¬ of deposits. Hence, at the end of
tificate rate, the most important 1950 the total volume of bank de¬ million shares on balance since
in the short-term money market, posits ought to be larger than at
May, 1949. While they are lyell
will be between 1% and iy*%. the end of 1949."
informed speculators, they have
a relatively short-term viewpoint
ployment. Now Government
27,
consist mostly, of steels and rail¬
ex¬
have
risen
level prevailing
customers
sharply
in
stock
of
5.7
5.6
con¬
that he expected the com¬
roads. Those speculators who have
!
of
crash. While some customers have
during the tions
war}" Dr. Nad¬ Banks. However, no material price bought more stocks on margin,
ler pointed changes are to be expected.
reports to the SEC show that all
direct
relation¬
"How will the credit policy of customers as a whole have sold
between short- and
long-term rates and since a de¬
viation
from
the
2%%
longone
of
future
The
long-term
rates
term
steady rise in stock prices
change from
U
a
Judgment of Investors
long-term
rates brought about
primarily by the sale of Govern¬ analysts into believing investors
are confident about the economic
ment obligations by the Federal
outlook. The following statistics
Reserve Banks.
Should business
indicate investors with the longer
activity
tend
to
decline,
and
asserted
exists
disposable income
capital——.
since June, 1949 has misled some
York
New
Dr. Marcus Nadler
The
The
5.3
3.9
consumer
Residential mtges. outstdg. to
Bank loans to bank
"During the last few weeks, we
witnessed a moderate firming of
Recent
1937
"o
durable goods
Instalment credit outstdg. to disposable income
rates.
Banking and
Aug.
stated
Ratio—
Instalmt. credit incr. to
percentagewise, it actu¬
of New York on "The Outlook for ally is relatively little. The same
Money Rates," Dr. Marcus Nadler, may be said about long-term
Professor
industry, remained
stant.
.
1929
tuation
tral Hanover Bank and Trust Co.
business cycle.
that of the
President of the Southern
considerable fluc¬
a
above with their mag-
Private Debt Ratios
Federal
on
Thursday, March 23, 1950
nitude at previous peaks in the
following table compares
significant financial
ratios
the
"Since
discussed
The
In informal talk to officers of Central Hanover Bank & Trust
ship
CHRONICLE
Summary of Financial Conditions
No Basic
out.
FINANCIAL
&
substantially
were
railroad
1948, when net
poor
almost
50%
as
year
earnings
1949
over
of
which note should be taken.
Notwithstanding
the
stock
sold
its
between
States
earnings,
6%
and
between 1936 and 1944 in
which latter year it sold between
65%
In 1945, the stock sold
23 and 43.
between
62
and
between
38
and
38
in
and
against 7% in New York, 8% in
Pennsylvania; while the Western
1946
as a
whole
Northeastern
gained 34%, the
and
Northcentral
States gained only 9%.
Starting
1
in
1939,
operating
economy
brought about a re¬
covery that has continued to date.
In 1938 gross traffic was $200 mil¬
70, in 1947 be¬
lion with a deficit of»$6.8 million
Exceptions to this statement are were short of cash at the end Of national revenue had risen to tween 50 and 34, in 1948 between
income as against earnings in 1948
the improved financial conditions
1948, according to a special study 6.26% in 1949 from 5.40% in 1940 62% and 43%, in 1949 between 51
of $38.8 million or $10.27
of farmers and railroads. Consum¬
per share
by the SEC. The ability of a cor¬ and from 5% in 1929. It has $568 and 32% and in 1950 between 54%
and gross traffic of $587 million*
ers
and manufacturing corpora¬
poration to pay its current debts million funded indebtedness which and 49%. It is now selling around
tions are in poor condition to with¬ under adverse
This
1
recovery need only mean
business conditions is a reduction in fixed charges 52%.
stand
further
production
or
same
as
declines
in
either
prices.
Manufacturing
corporations
is measured by the ratio of cash
maintained.
from 20%
In
(and equivalent) to current liabil¬
ities. This ratio for manufacturing
corporations was 0.84 at the end
24
The
to 33%
years
road's
share of
since 1932.
1908-31
Southern
Pacific maintained dividends at
debt, as
an annual rate of $6 per share.
shown in
the
table
It
below, is
higher relative to Disposable In¬ of 1948 compared to 1.42 at the earned $12.70 per share in 1929.
come
than
iq 1937 and 1929. end of 1939. It has probably im¬ Little, if anything, was earned
Residential mortgage debt is still proved in the past year as inven¬ until 1941 when it earned $9.21
somewhat
below
tories have been reduced. The per share, then an average of $15
the
prewar
ratios but is
next report from the SEC on this per share annually in the 3 years
approaching them.
through 1942, '43 and '44. There^
Bank
loans
are
dangerously subject should be considered most after in the
years 1945 through
high relative to bank capital, as important. The quarterly reports
1948 it earned $8.77, $6.70, $8.86,
shown in the table below. Loans on working capital from the SEC
conceal the weak financial condi¬ $10.27 respectively per annum and
are now; about four times as
large
in
1949.
To
this should
tion of manufacturing corpora¬ $8.08
as capital—the same as in
1929
tions by throwing them in with be added the undivided profits of
and
Consumer
instalment
50% above 1937. This
25% loss
means
loans would wipe
out capital and make a bank in¬
a
on
the
financially
strong
railroad,
trade and financial "corporations.
St. Louis and Southwestern equal
to
After
dends
a
lapse of 10 years, divi¬
were
resumed in 1942, pay¬
that the Southern Pacific
$5
annually
and
can
pay
maintain
its
ing $1, and paid $2 and $2.50 in. present rate of growth. That would
1943 and 1944 consecutively; $3.25 make it an outstanding
equity
in 1945, $4 each in 1946 and 1947, purchase, which may be expected
but
not
assured. However, the
$4.50 in 1948 and $5 in 1949.
The Southern Pacific has $85,- opportunity to buy the stock in
700,000 working capital which is terms of a sound obligation on a
substantially in cash as of Dec. 31, modest scale of conversion should
1949. The dieselization of the road
is in progress and it
will
continue
to
is expected
completion,
which has been paying substantial
dividends in effective lowering of
not
be overlooked
nor
ignored.'
Waddell & Reed Add
(Special to The Financial Chronicle)
KANSAS
the transportation ratio;
declined
over
%%
this has,
of 1 %
in the
CITY, MO.—Clare M.
Chitty and T. A. Walters: are now
with Waddell & Reed, Inc., 1012
approximately $1.31 or $9.39
of $8.08; that year 1949 first nine months of 1949 ' while Baltimore 'Avenue.
instead
Volume
171
Number 4892
THE
COMMERCIAL
&
FINANCIAL
CHRONICLE
(1231)
Cr
39
Continued from first page
the
to
As
tainly
We See It
owners
need
we
in fixed
would
no
be almost
negligible, and
cer¬
Doody Partner in
Harrington Firm
further incitement to the increase
debt, whether private
public.
cr
But would alterations in the nature of the
investments
j.
-.
1
pending
the choice of the employer. They could be
upon
invested much
as
an
insurance company
pany would invest them
trust com-
or a
which, in this day and time,
would probably be in
large part to buy obligations of the
VUnited States, although certain
types of obligations of
private industry would be in order. They could be emb
ployed as are depreciation reserves or as undistributed
«
earnings are employed — that is, for the most part, merely
—
"invested in the business" in such
r
-
a
to promote,
way as
or
it is hoped at all events, the
efficiency or the volume of
business done. Closely related to this latter
so
John
into which
the basic
fact that
general
an
Gregory
form
one
obligations,
them
are
increase in fixed
enormous
been created.
in
These pension claims
or
no
another
or
in
one
are
obligations has
for the most part,
way or
matter in what form the
reserves
against
has
in
&
New
state,
revenue
bonds.
formerly
a
become
the
in
Harrington
Street,
dealers
another, fixed
Doody
partner
Broad
of
Co.,
25
York
City,
municipal
Mr.
more
aspect of the matter which deserves
attention than it
seems
to be
thereto
getting at this time.
and
Doody
bert J. Sims & Co., Inc.. and
an
a
firm
was
vice-president of Her¬
invested.
Here is
he
associated
was
Ranson-Davidson & Co.,
of han-
way
A.
pension obligations are placed really relieve
situation, which seems to us to be found in the
prior
with
IncV-
-
dling the matter would be the practice of a relatively few
employers who merely assume pension liabilities without
'
:
specific provision for their payment, thus proceeding
managed in
J such a way that it will maximize funds out of which such
any
the assumption that the business will be
3
on
i
charges would be paid when they
due
come
time in
some
/Jjthe future.
iV
Some Observations
Now let
us
view all this
| efrom Olympus who has
j
v
k
it.
i
First of
all,
we are
as
would
informed
some
man
particular personal interest in
no
certain that
suclji
wonder how accurate the determination
of future liabil¬
ities under these
arrangements are or can be in the cir¬
cumstances.
COPPER...
observer would
an
Most useful metal
There are, of course, a substantial number of
"variants in the details of these
ber of instances the
precise
} will be matters of
plans. Doubtless in
meaning of
dispute in the
some
a num¬
known
to
man
of the terms
years to come. But much
imore important for the moment is the fact that experience
ffurnishes very scanty data on which to
compute future
"claims under many of these
In
resembles
contracts—indeed, perhaps,
sunder most of them.
•.to suppose
isituations
and
one
routine.
mere
result is that
imust be
an
It is
no
such
appreciable
thing, of
For
ders for
man
in
But there
analysis will,
.
are
profound problems.
more
believe, reveal
we
to the
Careful
matter how
of the country operates
economy
and
individuals
more
as
are
this movement
grows,
promised fixed
futgre, and business enterprises
-
more
sums
and
more
one
committed themselves to the
payment of these fixed
sums.
by Altered Investment Rules
substantial
part remain
even
if
investment of trust funds and the
practices
like
are
has often been said of late that
with the
and
crease
a
restrict the
is
on
of the
changed.
of
It
in¬
employment to which
now
funds
Industry,
on copper,
since
widely adaptable metals
brass,
an
important alloy
be put
products of its mines
the
task
of
keeping this "Atlas"
metals always ready for its
great
responsibility.
surely
as
and
presently will become all but necessary. To fail
would, it is repeatedly observed, tend to
disrupt
what we regard as normal
investment markets, create a
For just
it has in the past,
world
more
now or
to do
well
count¬
mills, Anaconda is pledged to
the
severely
trust funds
may
as
and
among
account of the increase in the
volume of
liberalization of the laws which
of
more
the
future
so
as
will
depend
upon copper.
so
00359
demand for fixed
obligations disproportionate to that for
equity; investments, and more of the same order. The
result would .be such low
equity capital that
would
,
be
operating
charges—or that
ligations
tation to
more
AnacondA
interest rates and such
costly
more of American
business
and
with
unwarrantedly
large
First in
fixed
artificial market for
government ob¬
would be created which would add to the
an
.
ANACONDA WIRE & CABLE COMPANY
\
INTERNATIONAL SMELTING AND REFINING COMPANY
Now it seems to us that there is a
good deal of
substance in these
arguments, however difficult the
ANDES COPPER MINING COMPANY
.
task of
finding
a
satisfactory solution
to the
problems-
presented. An indefinitely
growing volume of funds
seeking fixed obligations could
scarcely fail to drive
interest rates down to
a
point where the
Copper, Brass and Bronze
THE AMERICAN BRASS COMPANY
temp¬
public borrowing.
net return
.
economical, easily
most
Proud of the
the
enormous
prospective increase in the volume
accumulated
pensions,
about
of homes.
..
carry
.
of copper.
The fact is, moreover, that this state of
affairs will
:
.
protection to
heavily
known is
Not Cured
in
millions
worked and
•
.
give lasting beauty
too, leans
have
copper
For cop¬
ever.
spread electricity
permanent
less
in the
more
than
per now must
as
charges. It is clear that
in industry,
provide communication
basis of fixed
a
wherever
today, the burden of
water...
upon a
always playing
art.
grows greater
the financing of these
pensions is ar¬
ranged, they result, as they grow in aggregate
size,
in a significant increase in the
degree in which the
no
.
.
broad shoul¬
has made
progress
science, in
Yet
observing that
.
own
supporting
strong
ently to suffer financial embarrassment.
its
on
ages
of computation
error
allowed for if someone, somewhere is not
pres¬
has literally carried
copper
the world
course,
copper greatly
mighty Atlas of mythology.
The general public is much too
prone
that "applying the insurance principle" to such
is
many ways,
CHILE COPPER COMPANY
%
wM
GREENE CANANEA COPPER COMPANY
40
THE COMMERCIAL & FINANCIAL CHRONICLE
(1232)
Continued from page
8
v._
_
W|1
M
^
dimply
receives—he
he
oension that
the
monthly wages of each of his retirement?
worker
over
lifetime.
his
Al-
himself of a better
assures
Uvinfin h?s
This
is
lief
based
in
Tin
are
old age
Old-ave
to
contrast
re-
meanstest
a
means
a
himself gets small
benefits' the man who has made
no provision for himself gets the
for
provided
receiving old-age assistance
and about 1.9 million, old-age
pensions.
A second reason for believing
too small and
is considerably less than the averaverage pension is
.
Why does the Advisory Council
believe that improvement of the
act along the lines indicated by
its 22 recommendations would enable the Old-Age and Survivors'
Insurance Act to do the
job exhnenmo
t hr»
payment for old-age assistlargest grant
Such a system is ance. The average pension for a
rmmvalent to a series of rewards single person averages about $26
fc" not being thrifty and self- a montn and the average pension
reliant
Old-age
insurance
bv
of a retired person with one deage
uiauiailt-c
"J
place, old-3§6 in—
which relates benefits in
Furance
prior earn-
to the
measure
Fome
of workers helps protect men
too drastic a drop in their
Fiandard of living on retirement,
•tigs
from
The standard of living of workers
obviously tends to vary with their
earnings.
Since the purpose of
eld-age security is to protect men
against having to make too drastic
in their standard of living
cuts
retire, pensions should
measure with past
when they
in
van
some
Flat benefits, which are
but are the
earnings.
not related to earnings
would assure
only an arbitistrv relationship between men's
for
.same
everyone,
that +here would be
standards of living before retirerner/and their standards after reiirement.^ Under
a
scheme of flat
benefits, the benefits that would
right for some workers
too
small for many
be about
be
would
«>ib
and possibly too
rs
Hard
place,
fourth
the
large for
a
1
group.
In
Federal
a
Fystem of old-age pensions should
be the foundation of the country's
can
be
can
made
be
be-
applied to all
of the, labor force and
it
wembers
as
olcL-gge Security
of
Fystem
cause
,
broad, therefore,
as
problem with which it is
the
.
...
third
fhe
Io
age
t-flU
rutldllb.
a very drastic drop in
the standard of living of retired
though the average worker is survivors' insurance to be the workers. The primary insurance
earning more than twice as much foundation of the country's system benefit for a worker with ten
today as he was earning ten years, of old-age security if large parts years of coverage under the presold-age assistance as are draw- ago, his lower earnings of ten of the population are excluded ent act and witn average monthly"
ing old-age pensions-2.7 million years ago help bring down the'from the plan.
,wages of $200 is less than one-,
monthly average of earnings on
which his pension is computed
All in all, the present methods of
When
test is used
the
computing pensions assure that'
man "who
has been thrifty'and that the Old-Age and Survivors' pensions
will be slow to rise
who has provided for himself gets Insurance Act is not doing
the whenever wages increase.
nothing! the man who has paftly job expected of it was that the
Iv
standard of
Certainly the to prevent
people cannot expect old-age and
1 1
I AlJk Ima CAUHVlhv
lODlC 10 01 WlU XlMv •Jvvilllly
ww
&
j
H
I 116
,
average
Thursday, March 23, 1950
.
supposed to deal. This method of
meeting the problem does not de-
pend upon the willingness of an
employer to grant pensions or
upon
the bargaining power of
unions and their ability to compel
-
.
.
.
^
nootorl
1
under old—age
$44.50. Although the recipients of
old-3ge assistance are h3lf ag3in
as numerous as recipients of oldage pensions, total payments for
assistance are nearly two and a
half times as large as payments
for pensions. The principal reason why pensions are small is that
the benefit formula is too low
even for workers steadily employed in covered industries. It
provides a pension of only 40% of
the first $50 of monthly earnings
plus 10% of the next $200 of
monthly earnings, plus additional
allowances for dependents. In addition, the benefit formula provides that, in computing average
monthly life-time earnings, time
worked in uncovered industries
shall be counted, but makes no
provision for counting the money
earned in uncovered industries.
A third reason for believing that
the Old-Age and Survivors' Insurance Act has not done the job
expected of it was that the average monthly pensions under it
have not kept pace with the rise
in the ,cost of living or the rise
in per capita income.
Average
monthly pensions have increased
14% since 1940 while the cost of
living has risen over 68%, average weekly wages in manufacturing have risen 117%, and the
average per capita income of the
country has increased 132%. During
the
period
that average
monthly pensions were increasing 14%, average monthly old-age
assistance payments more than
doubled.
The purchasing power
of pensions is 32% less today than
it was ten years ago.
it
of
nnH
in
With the present limited cover- fifth of his monthly wage and, if.
liberal he has one dependent, his total
benefits are less than 30% of his.
age, but with the more
eligibility requirements recommended by the Council, it is
estimated that even as late
as 1955 only from 46% to
of 85 wm^llv fnswfd Fuf
of 6a will be fully insured. Fuithermore, even as late as 1955
only from 39% to 44% of the men
of 65 years of age or more in the
population will be fully insured.
This means that under the present
act
half mniiU
of the populafirxrv more than
in 1QW
1-iatro in
nuon
average monthly wage. Obviously
such pensions are far too small,
The Advisory Council has made
°£ ™ommenda«°>/
designed to raise the average ben-;
efit. One recommendation is that
the benefit formula be liberalized
J/66
_that benefits be 50% of the first
$75 0f monthly wages instead of
40% of the first $50, and 15% of
additional
wages up1-1
to ther amount
iL
_
e
.
_
1
, „ ~
In the first place, the recom- insurance.
„
the tax base be raised from $3,000
mendations of the Council would
In the second place, the recom- a year to $4,200. Still other rec-
extend the protection of the act
to virtually ail of the 25 million
jobs not now covered.* Obviously
one cannot expect a program to
give protection to people whom
it does not cover. Consequently,
expansion of coverage of the OldAge and Survivors' Insurance
scheme is of basic importance,
Coverage was originally limited
because of the administrative difficulties in applying the scheme
to such groups as the self-employed and to some kinds of workers, such as domestic workers and
farm laborers. As Mr. Folsom, a
member of the original Advisory
Council to the Committee on
Economic Security in 1935 has
pointed out, it was not the intention to exclude permanently the
uncovered workers from the protection of the scheme. Both the
Bureau of Internal Revenue and
the Social Security Agency have
studied carefully the administrative problems of extending cover* age. Both agencies have had the
benefit of 12 years' experience
administering the present act.
mendations of the Council would commedations pertain to liberali-
liberalize the eligibility require- zations in the benefits payable to
ments for pensions so that older dependents.* The most important
workers who are newly covered ofjhese recommendations is that
by extension of the Old-Age and women may qualify for old-age
Survivors' Insurance Act to new benefits (either primary or sup—
industries will soon become eligi- plementary) at the age of 60 in-j
ble for pensions. Unless the pres- stead of 65. - During 1948 only 196
ent provisions for eligibility are of avery 1,000 married men who
modified, all persons covered for .claimed benefits at age 65 had
the first time in January, 1951, wives who were 65 or over and
who attained age of 59 after 1950, entitled, therefore, to dependents'
would have to have 10 years of benefits under the present law/
coverage before they would be On the other hand, 565 out of
eligible for pensions. Even newly- every 1,000 married men claiming
covered persons who reached benefits at age 65 had wives who
65 years of age in the year were.at least 60 years of age and
1951 would need seven more,,who. would receive dependents'
years of steady employment-benefits if the recommendations
(28 quarters) before they could .at .the Council were adopted. In
receive pensions. It would obvi- other words, the recommendations
ously do little immediate good q£ the Council would increase by
to extend the act to the 25 million ..coves three and a half times the
uncovered workers if the eligi- number of cases in which wives'
bility requirements for new work- benefits are paid when the husers remain as strict as at present, band retires at the age of 65.
H. R. 6000 makes a little improve- t The total effect of the recomment over the present law, but mendations of the Advisory Couneven H. R. 6000 would require 20 cil would be to increase the averquarters of coverage, or five years, age pension paid under the Old-
employees to Age and Survivors' Insurance
insurmountable administrative become eligible for pensions.
scheme by about 100%. This
obstacles to extending the insurThe Council recommends that *would be an important improveance scheme to the 25 million jobs the extension of coverage to new vjnent. Nevertheless, I do not benot now covered.
industries be accompanied by a lieve that the recommendations of
h. R 6000 proposes that about. "new start" in eligibility require-/; the Council go far enough.
To
Both believe that there are today for newly-covered
no
n
million
additional jobs be
brought under the Old-Age and
ments that will require the same begin with, the formula proposed
qualifying periods for older work J'by the Council is not sufficiently
ers as was required for persons liberal, particularly for the workwho were the same age when the oriSi., earning above $75 a month,
system began operation in 1937/ -Th®, Council recommends, as I
The Council believes that a miri-rhave pointed out, that pensions be
iti&t t.irj scheme of old-age secur-
or less constant ratio to the average earnings of persons.
Other-
ily be applicable to the self-empic yet. as well as to employees.
wise they do not give people the
required help in maintaining their
Survivors' Insurance Plan.
This
js a step in the right direction, but
it would bring under the act substantially less than half of the
jobs that are not now covered, imum of six quarters of coverage §0%^ of the first $75 of average
Large and important categories, should be required.
It recomf~ monthly earnings plus only 15%
SUch as farmers, many farm la- mends that requirements for fully- offthe-next $275 of monthly earnborers, and a number of profes- insured status should be one quaP^ 'dngar. ^ This formula would give a
sional groups, would still be de- ter of coverage for every two cal- primary.^ pension of $37,50 for
prived of protection of the scheme, endar quarters elapsing after the workersreaming $75, of $48.75 for
customary standards of living.
^
e exPlanation of why
posed
employers
pensions./
grant
to
Furthermore, a system of old-age
insurance can be applied to the
ecli-employed
well as to em-
as
ployees.
Since about one out of
jfive workers in the United States
is
is
it
seii-employed,
necessary
it*
Pensions ought to bear a more
.
Wn;,t
are
the Reasons
for
be-
Iieving that the present Old-Age
.mid
Survivors
Insurance
Act
is
»ot doing the
job expected of it?
The members of the Advisory
Council
unanimous
were
be-
in
Iieving that the present Old-Age
*
no*,
There
cons lor
•
*nsuranc«
One
in the
increase
sion
has
increase
been
far
the
in
average
pen-
than the
less
average
wage
is
this conclusion.
from $150
a
month
a
at
month in 1940 to $250
present would have
of
re?,ei.ve benefits if re-
increase of only 30% in his pen-
was
that,
even
after
^ncovered gro^ps
u
who
®.gCi
reach
65
years
^meHwboe,need ^ree'efv^i creas
d°Sf67? Th^no^s'the
"ISSw SI 1? l l ll
Sfi tL iI0'
ignores the
^tiing 1^ The principal
which ^ Jk^s
^
vdiv
not iecelvine
recetos bv lfKrfiLr
ymy tney are not leceiving pro- man receives by 1% for each year
Insurance^ ArtHpplfes industryeTnoTher'^a^t^of
iurviyors lnsurance Act applies maustiy ^ no the r p a rt of
jobs
A not her reason "s that e™ in pens^ns has lagged beWnTthe
reason
tnev
are
man
nro
nihility to receive benefits is debv
termined
the
oronortion
of
increase
wages
in
ud
wages
to S3 000
is
a
that
vpar
only
ponnt
/-
covered
by
would get se_
of retire-
years
/
v
f
private
Ap-
parentiy the philosophy of H. R.
600Q therefore, is that the uncovered' groups should either be able
^.ake
charity
care
be
themselves 1
expected to
rely
or
upon
Is it realistic to assume
SaTaTl wilI
mlUeSof^e
uncS
be able to take care
groups
of themselves? For those who are
not' is 4t fair to exPect them to
.
n
cbaritv9
Have we
a
<vUic%
insured by working half the
Plan?
a man
spends in covered
propor-
in computing the average earnings on which pensions are fig-
a
a
one
,
,
reaching the age of 65. By 19^/enoqgR spread between the
mately 66% to 74% Unless a ver^l0w-^earhings-and persons with
hlghu Percentage of persons who higher earnings — though the
reach the retirement age are eligi- CounciFprovides a greater spread
ously cannot do the job expected
Is farmmg so free from
In the third place, the recom-
'
e™™'T,ic. hazards that farmers
sb°uld be :left to take their
^fnce.s
old-age assistance?
Likewise are the professions such
vear
^our among all work-
,
workers wno move back and forth
ers
earned
more
than $3,000. Still
dentists do not need the protection which old-age and survivors'
lexme
CIO, and Mr.
this proportion would be approxi-^pensionltree&Ved by persons with
'he Protection given by the
*
me
,
in the next three years.
Social Security
eligibility requirement, combined" experf *of the AFL, have exwith the extension of old-age and" pressedTagreement with this feasurvivors' insurance to the 25 mif-v fffre of Tff-R;. '6000, and I share
lion jobs now not covered, would : their views. The benefit formula
raise substantially the proportionbfi45^%"-6f wage^ between $75 and
of males who are fully insured otr $35(f g month does not provide a
mendations of the Advisory Council would substantially raise the
lion of time that he is at work. A ured.
As wages have gone up,
average monthly benefits It is
man may be
quite steadily em- more and more workers earn more
plain hat the Old-Age and Suroloved and still not aualifv for
than $3 000
Tn 1Q4R nhniit> secure callings that architects, en- vivors' Insurance Act cannot be
!Son ff he is
of the man? !1
?
1?' ? gineers^ lawyers, doctors, and expected to do an adequate job
time that
employment, not by the
0
timtf^k^^nidii,
Tttfe CrtftksHMfcf the
right to assume that farmers and qG f°F pe™\ons' the O^-Age and
the professional pe0Dle do not Survivors' Insurance Act obyl-
Old-Age and Survivors Insurance
^-A#r
w« CA™ WUi« uc iuur ^-ivir.-meve *oi
pension
negcdiated bv trade unions
sboidd
hi which coverage is ex- workers earning $150 a month,
tended or after the quarter in and of $63.75 a monthrfh'r workers
which he attains the age of 21r'ea*rting $2SQra month.
whichever is later, and before the - II.-R/6000 proposes that the
quarter in which he attains the age primary pension be $50 for the
Year
..
.
plang> initiated by employers or
13years, only about 39% of the male of
vorkers
their
f
/
monthly earnings rise
a month to $250 a m
the
primary
pension
incr
only $10 for each $100 increa
been entitled to a primary pension
$30 a month then and to a
pension of $40 a month now—an
.reason
incomnlete coverage nrojn jj ^ 6000 raises basic
puestions* as
where and how
Tjie
that, as
from $50
Ac) » earnings.
Thus a man whose average life-time earnings had risen
the job expected of it.
were three
principal rea-
doing
the
if the pensions received are less
than the average old-age assist-
than"the formula in the present
law"or that proposed by H. R.
eoflai jf pensions are to protect
®!
L Tairiv
who retire, they must be fairly
closeiy^related to previous earngs. C rta n y a rise of only^$10
or $15 in Pension^ as average
fpon\hly earnings increase $100
does not provide a very close relationship between earnings and
pensions, and is not fair to the
—~rr
,
.,
insurance would give them? Can ance benefit granted after a means pensions^rai be^rrroTUe firsTIsS
covered, and agriculture which is why
pensions
have
inrrpnspH
every
lawyer, every architect, test. Nor can the act do an ade- of monthly wages and io% of wages from
®
«ot
At the
present time
half mom el™/!,,
i.
every engineer count on reaching quate job if the pensions payable *so to $250; h. R. 6000 provides that
'T'r\°re Slowly than wages 13 that the age of 65 or 70 with adequati under it are so small in relation
»a'/. a„d ior
«gam as many peop e ar
aw ng pensions are computed on the savings to provide for the years to average earnings that they fail of wages between $100 and $300 a month.
•between manufacturing, which is
another
part
of
the
explanation
Volume 171" 'Number 4892
skilled
workers.;
pension
The
THE
primary
by
the
recommended
Council is about one-third of the
earnings of a man making
month, a little more than
$150
a
fourth of
making
22.5%
the
earnings
$250
of
a
man
a
month, and only
earnings of a man
the
making $350
of
one-
a month.
Two
mem¬
bers of the
Council, Mr. Rieve and
Cruikshank,
have
recom¬
Mr.
mended that the rise in
pensions
above the basic amount be 20% of
additional earnings. I am in favor
of at least
sions
20% increase in pen¬
each
rise
in
average
a
for
monthly earnings above the basic
amount, but I believe that a 25%
rise would be preferable.
Such a
rise would give a man with aver¬
monthly
age
earnings
of
$200
a
month
a
primary pension of $75
(assuming the formula provides
for
pension of 50%
a
$100
of
the
with
a
man
of
wages
a primary pension
Certainly such a spread
pension
received
difference
a
by
men
$100
in
monthly earnings is not too large.
Finally, I believe that the limit
of $4,200 on the benefit base and
the tax base recommended by the
Council is too. low and is unfair to
skilled workers and to fore¬
many
and others in the lower ranks
men
of
supervision.
The upper limit
$4,200 in the benefit base means
of
that
in
earnings
no
$4,200
many
skilled
bosses,
foremen,
who
men
but
recommendations
these
ing only $4,200
the
a
1948,
year
no
earn¬
Indeed, in
of
the
earned
industries
covered
men
year.
17%
who
the
Council
receive
greater pensions than
workers
are
under
the
of
would
men
There
workers,
straw
assistant fore¬
year,
a
increase
from $5,000, $5,500,
earn
$6,000
than
more
an
worker's pension.
a
to
of
produce
year
a
male
wages
in
in
four
all
quarters earned more than $4,200.
Why refuse to count any of these
earnings over $4,200 in computing
the pension that the man receives?
The
primary
pension
for
a
earning $5,000 a year, if
the pension were 50% of the first
$100 and 15% of the additional
worker
earnings
would
$4,200
to
up
be
It is not
only
$87.50
year,
a
a
month.
satisfactory to expect all
who receive more than
$4,200
individual
savings or ,on company pension
plans. About 22% of persons with
incomes of $5,000 or more in 1949
had liquid assets (bank deposits,
men
a
depend
to
year
government
and
stocks
on
savings
and
bonds,
bonds of private
cor¬
porations) of less than $500 and
45% had liquid assets of less.than
$2,000. Business enterprises them¬
selves do not expect these men to
depend
cause
not
clearly
Nor
seen.
all of
were
problems of
old-age assistance clearly seen.
The
time
has
and
another.
serious
pension
penalize the
from
When
conclusion
and
that
of
old-age
an
is
as
insurance
percentage
a
of
to
only moderate
supplementation by private pen¬
sion plans or public assistance will
rise in
partly
due
be necessary.
which
must
adequate
come,
that
self-employed; in case^the insur¬
plan
ance
extends
employed.
In
be
increase
in
the
the
to
In
adequate pension for
dependent is about half
one
of his average
ard
of
fall
on
worker
a
earnings, his stand¬
living will take
the
terrific
a
day when he retires,
unless he has accumulated at least
moderate
amount of
savings to
supplement his pension.
If
the
Old-Age
and Survivors'
Insurance
Act
were
improved
along the lines recommended by
the Advisory Council with respect
to
and
coverage
eligibility
re¬
quirements and if the benefit for¬
mula
were
than
that
come
the foundation of the
somewhat more liberal
recommended
by the
Council, the plan would really be¬
be
in
expected
and
wages
to
con¬
as in the past.
another 30 years, for
example,
the labor force will increase
by
10
over
million, and, if
rapidly
as
in
as
wages rise
the
past, hourly
earnings will increase between 80
and 90%.
One must expect that
the
paid under the oldinsurance plan will bear a
age
to
less constant
or
monthly earnings.
average
rates rise,
wage
liberalized
order
to
relationship
from
a
more
less
or
earnings and pensions.
That is
why the most realistic and con¬
servative way of estimating costs
is in terms of percentage of
pay¬
rolls and the income of the self-
employed.
consultant of the
Advisory Council
curity prepared a
Social
on
low-cost
Se¬
esti¬
mate and
pensions
age
number
of
would
exceed
recipients of
the
old-age
assistance, total pension payments
would be larger than payments
for
old-age
Federal
able
assistance,
Government
make
to
and
the
would
substantial
be
reduc¬
tions,
in
its
expenditures
for
old-age assistance. As a matter
of fact, the number of
old-age in¬
beneficiaries actually
surance
drawing benefits has
during the last several
years con¬
beneficiaries
increased
932,000 in comparison with
what
some¬
500,000 for old-age as¬
recipients. .It is illumir
over
sistance
nating, however, that the increase
in this monthly amount of old-age
assistance
same
as
payments
period
large
as
was
during
more
the
the
than twice
increase
in
the
total monthly old-age benefit pay¬
ments under the old-age and sur¬
vivor's
insurance
today
—
vivid
evidence of the inadequate benefit
formula in the pension act.
VI
What
would
He estimated that by the year
the expanded program rec¬
ommended
cil
by the Advisory Coun¬
would
9.70%
his
of
from
cost
payrolls.
estimates
of
5.87%
adequate
upon many con¬
1940,
The
range
level
premium
7.27%.
less than
labor
31.5%
even
in
the
force
of
age of
be
of
at
about three
retired
men
contributions
force.
more
than
65.
Furthermore,
would
be
betwqen 65 and 74
65 will purchase much
in the labor
were
of
years
age
force, and only
pension
The
Many large companies have
adopted the rule that everyone
that
will buy a
beginning
is
an
bad
is
for
bad
in
time
has
halt the
to
come
the
from
the
fulness
65
partly
income, but
that his
job
him feel
and
is
gave
that
he
now, on
of
his
health
ments
bad
Government
that
of the aged in the
"has-been"
shelf.
He
the
retire¬
study the broad problem*
community and
should be taken, however,
help workers between the ages
they deprive the com¬
munity of the output that the re¬
tired workers might produce. At
the
present time,
for example,
of 65 and 70 continue in
there
not to
ers
of
of
ment
of
years
age
or
is to
ers
more
They produce about $10
goods.x If the practice
of universal retirement at 65
instead
retire.
about 2.8 million work¬
65
Federal
commis¬
a
steps
to
country
because
are
The
employ¬
being forced to-
of
best
retire
before
to
way
give employers
do
physically fit work¬
the age of
70.
What form might this incentive-
Continued
were
on
page
The
not in
what
more.
j,"
.
yi| ■*""'* •
■
'
■
Fortunately, the cost of old-age
pensions can be substantially re¬
duced
not
retire
physically
work.
workers
fit
is
It
cruel
a
who
perform
to
AND OHIO
BALTIMORE
RAILROAD
by encouraging employers
to
men
THE
COMPANY
v.-,*
are
their
fiction
that
attaining the age of 65
suddenly become unfit to continue
their jobs.
Let me conclude these
remarks by calling to your atten¬
SUMMARY OF
ANNUAL REPORT
1949
on
'•
skilled
the
workmen
not
be
de¬
favor of
.■
.
with 1648
tion
of
an
aspect of the problem
old-age security that has re¬
ceived
all
little
too
attention—
namely, the problem of premature
Prom
transportation
mail,
sengers,
Prom
other
freight,
of
express,
sources
—
pas¬
$356,708,017
etc
interest,
B
*43,482,430
-
divi¬
retirements.
dends,
Many people conceive the prob¬
old-age security as mainly
a result of the aging of the
popu¬
lation—that is, the increase in the
proportion of the population of
cf
years
matter
age
or
of
As
more.
fact, the
security is
problem
a
problem
of
the
aging
of
etc.-—
income
7,007,637
—
—
537,820
I
$303,775,654
.-
D
$42,644,010
"
the
income
purpose
of
Long Island Lighting
EXPENDITURES:
Payrolls,
materials,
fuel,
and
services
1
taxes
$321,865,524
$33,301,182
D
a
as
the
Interest, rents and miscellaneous
serv¬
ices
35,010,303
Expenditures
5,645.040
I
$356,005,827
_
$27,056,142
D
INCOME:
J.
...
.
For
improvements,
other
is
be
pension
sinking
funds,
and
$6,866,827
purposes
$15,288,468
I)
revenues
The onnuol report
base
increased, the tax bas^gtiould
correspondingly increased be¬
the two should be the
As
matter
of fact,
the increase
$4,20p'would
not
produce
much
new
tax
! i
\.,v/
w
was
.
drawn
up
the prevailing
opinion
it
that
and that it should be
ed in various ways.
should
be
supplement-'
It is under¬
standable that back in 1935, when
the idea of a Federal old-age in¬
the coal
steel
industries,
1949 than in 1948.
Passenger
and
$2,670,298 lesS.
40-hour
Gas and
,
week
established
as
it will exist upon completion of its pend¬
Electric
Lighting Company.
The
return
than
to
the
During
,,
at
the
net
Board,
were
investment
of
largely
the
responsible
Company
public transportation in 1949 was 2.77%,
4.3%
in
employees
Sep¬
or
in
for
the
property
1.53 points less
1948.
1949,, outstanding
System
interest-bearing
debt,
including
equipment trusts, was further reduced $15,041,414.
if
you
A
dividend
December
us
on
Emergency
of
both recommended by
Company and Nassau & Suffolk
We shall be pleased to send you a copy
will write to
Presidential
devoted
classes
certain
for
1949, and the increase in rates of pay,
1,
high level of operating expenses in 1949.
Mineola, Long Island, N. Y.
inadequate—that it should provide
only a bare minimum of security
•
in
stoppages
$39,728,935 less in
the
Long Island Lighting
'
about 15 years ago,
was
work
illustrated booklet discusses the
Company
When the present Federal Old-
Age Pension Plan
were
to
were
companies has just been mailed to stockholders. This
ing consolidation with its subsidiaries Queens Borough
.
The
tember
rev¬
enue.
of the Long Island Lighting System
"
same.
in the tax base above
a
principally
freight revenues
fund.
if the benefit
cause
Due
Annual Report
of increasing the
the
Nevertheless,
-J
;
a
of
old-age
as
much
problem of earlier retirement
rents,
Total
lem of
NET
increasing
.1
Comparison
INCOME:
Total
the tax base and the benefit base
for
42
I had suggested would cost some¬
to
pendent to any considerable ex¬
them.
am
this
incentive
an
tent upon
I
ot
the adjustment of aged to retire¬
ment.
I believe that immediate
Often
Earlier
for
is
to
the
establish
is
a
use¬
age
The
sion
the
the
at
growing.
him, and makes
suffers.
are
are
of
years
workers
recommended
fellows
unhappy and maladjusted.
his
remaining
of
Advisory
Council on Social Security pointed
out that the great
majority of re¬
tirements are involuntary, and it
because it cuts him off
contact
the
and
cases,
the
ment is bad for the worker
more
earlier and earlier age.
an
tendency is quite out of place
in a community where health
improving, longevity is increasing;
ear¬
for
most
because it reduces his
at
men
country, and it
increases the problem of
old-age insurance plan. Retire¬
even
age
This
The practice of earlier and
worker
at
tendency for employers to retire
must retire at the age of 65.
retirements
for
the
larger pen¬
sions beginning at age 70.
15.0% of those 75 years of age or
individual
most;
paid
more.
lier
if
Consequently,
years.
given
would
case
less
at
males
labor
age 65.
If most
70, therefore, the
pensions would,
years
paid in the average
be
in
the
retired
men
number
Life expectancy
70 is about three years
at
contribution rate
billion
liberal benefit formula which
voluntary
Among urban groups, on the other
hand, only 46.9% of white males
in
more
to
of
the
country about
Finally, earlier
greatly increase the
a year.
pensions.
at
were
at work.
from
4.90%
and
75
over
to
rose
65
more
a
2000
increased
siderably faster than the number
of old-age
assistance recipients.
Between December, 1946 and Jan¬
uary, 1950, the number of old-age
insurance
cil.
high-cost estimate of
a
cost of
the
cost
retirements
labor force is not
in
were
in
the recommendations of the Coun¬
changes
recipients of old-
age
would
the
retire¬
ments.
It is the result of layoffs
by employers.
For example,
among
rural
farm
population,
69.3% of males 65 to 74 vears of
time
relationship between
The actuarial
result
greatly
the effective date of these
of
the
be
maintain
constant
in
more
benefits will
the
number
or
it
time
65
$10 billion
drop in the proportion of
the population of 65 years of age
As
to
In other words,
general retirement at the age erf
The
benefits
more
coun¬
try's arrangement for old-age se¬
curity. Within three years after
large
force
rise
tinue in the future
an
30
or
very
labor
thrift
always be necessary.
For example, if one accepts as
a rough, but
modest, standard that
a
payrolls—partly due to the
Of course, substan¬
tial supplementation by individual
will
self-
the next 20
there Will
years
the
to
2.8 million men.
company
reaches
one
should
foremen
of'
program
the
general, the country would
deprived of the output of these
be
considers the
one
deficiencies
plans,
costs
estimate
to
way
payrolls and of the income of the
question depends
who
man
employer
one
best
I believe,
for a change in our thinking about
these matters.
It is high time to
adopt the view that the Federal
pension plan should be so close
individual savings be¬
they,
establish
generous
moves
The
41
made
it.
almost all of these tympany pen¬ system of old-age and survivors'
sion plans tie a man to one com-" insurance cost? The answer to this
pany
(1233)
avoid
on
on
pension plans for executives. But
CHRONICLE
was new, many peo¬
to
the developments and
a
of
wished
much reliance
and
month,
a
$100.
in
monthly
average
$300
FINANCIAL
&
ditions: how many persons reach
population. Back in 1890, 68.2% of
placing too the age of retirement; how many all white males were members of
At that time, become eligible for
benefits; how the labor force. By 1930, this per¬
the serious disadvantages of prir many
retire; how long benefits centage had fallen to 54.0.
By 1940,
vate pension plans as devices for
are
paid; how much is paid as only 42.2% of all white males
providing old-age security were retirement benefits.
were in the labor force.
ple
of the first
in H. R. 6000) and
as
with
plan
surance
COMMERCIAL
Long Island Lighting Company
record
21,
of
$1.00
1949,
and
January 3, 1950.
per
share
paid
on
Preferred
January. 25,
Stock
1950,
to
was
declared
of
stockholders
■
.
-R. B.
Whit*, President
t\
Continued
from page 41
take?
or
either a penalty
It might be
I believe that a re¬
reward.
a
is
ward
preferable to
penalty.
a
employer were penalized
for retiring men below the age of
If
the
ployer hired
a
and
kept him until the age of 70,
the
employer would be given a
for the saving made pos¬
rebate
in
pension payments to the
Naturally employers would
hiring older work¬
who showed promise of being
sible
70, he would be discouraged from
man.
hiring older workers—men of 60
or
near
60, whom the employer
be interested in
efficient
the
after
The
65.
age
older
physically fit to work
until they were 70 years of age,
going out of business and by lay¬
offs would find their employment
willing
be
be
would
of
method
The
has
possibilities.
great
order that I
In
be definite and
may
thrown
would
$75 a month,
or $900 a year.
An employer who
kept a man until the man was
70 years of age instead of retir¬
ing him at the age of 65 would
be
saving the pension
system
$4,500 in pensions. The employer
might be rewarded for keeping
men
above 65 by being given a
pension
average
were
rebate of one-third
saving
ing
of the
the
to
result¬
pension
fund.
In the example I have
given, onethird
of
the
saving would be
$1,500.
If the employer had kept
the man until only age 68, the
pension fund would have been
saved
$2,700,
one-third
the
and
would
rebate
have
of
given
the
employer $900.
This rebate would give manage¬
ments an incentive to find
ways
of
keeping
of
65.
beyond the age
instead of
men
Furthermore,
being a deterrent to managements'
hiring older workers, the rebate
would be
incentive.
an
If
an
em¬
now
by
firms
worker.
this
ar¬
problem of the
Nevertheless, it
greatly reduce the serious¬
this particular problem.
of
ness
Thus
we
birds
with
be
that
assert
would
be
killing
We would
stone.
one
two
halting the dangerous tendency
Survivors' Insurance Act of
centive
for
workers
would
employers
beyond
be
an
to
in¬
keep
the
age
of G5
improvement
major
a
in
the country's arrangements for
old-age security. It would open
sions and it would make it possi¬
ble to give much
more
liberal
pensions than
are
available
now
wi^h only a moderate increase in
to
be
to
as
official
while
peril at a more
comprehendible level.
All of us
have
many
demands ' upon our
income.
current
continue
If
to
week
total cost of old-age
security.
affects
is
country
expect, at the same time,
hardly
fulfillment
immediate
the
of
social
our
the
Federal
all
of
With
objectives.
budget: already
un¬
balanced
business
even further and
if persisted in, eventually
destroy the very way of life we
preciate savings
may,
seek to create.
;
.
opinion
to how such objectives
as
no
view of the
logical case in
any
substantiation
of
such
move.
a
Perhaps the only reason for giv¬
are
to
continue
of
Jo enjoy# the
.dynamic
a
free society,
a
self-denial
level that
on
the
the
In
ume.
must
*a
absence
of
however
spectacular
developments in the shape of the
Alberta oil
discoveries, the ex¬
ploitation by U. S. interests of
Quebec
Titanium,
and
greater
realization of the possibilities of
the vast Labrador iron deposits,
the Canadian 'foreign
exchange;
timely advent of
situation would have presented an
entirely different appearance.
Without this opportune bolstering
of
Canadian
the
posi¬
exchange
there is little doubt that the
tion
unofficial
would
in
market
reflected
have
counting of the
York
New
the v dis¬
probability of
further devaluation
of
a
Cana¬
the
dian dollar.
in
Even
•
of
event
con¬
influx
steady
a
the
of
,
of
U. S. investment funds the Cana¬
is
in
economy
severely
tested
likely to
be
the course of
the next few months.
of
devaluation
the
the
and
result
a
the
pound
British Com¬
tightening
monwealth
As
of
trade
restrictions
must observe in our
affairs.
Most
of
and
encourage
cooperate
with those elected to public office
tain
extent
the
been
mitigated
effects
by
have
temporary
a
government deficits may
bring in
its
wake
serious
inflation
that
will
voters."
the
board, and
President
Devereux
the
of
C.
New
York Life Insurance Co., a warn¬
ing is uttered that continuation of
affect
the
whole
nation
ad¬
change in the conditions of Brit¬
versely.
"It
is
sometimes
differentiate
difficult
between
Pacific Gas & Electric
to
prosperity and high business ac¬
tivity artificially stimulated to a
Qfffring Underwritten
point of consequent inflation, be¬
at
cause
the
outset
both
appear
+i
i
plentiful
comes
Devereux C. Joseph; George L. Harrison
brisk,
rise
wages
and
everyone appears to be better off.
T en comes the
pay-off.
costs, which
have
this increasing
rise,
amount
same
of goods
and
the
Living
lagged- behind
affluence, begin to
of
savings
i!Sr?n?u0-rar
part of their
the
past
the
letter
out:
"Because
of
well
for
seek
us
to
serv-
whole is no
before, and people
as
a
living on fixed incomes
siderably worse off.
"During
had
the
to
be
diately,
we
the
costs.
up.
are
accomplished
things
imme-
did not stop to count
Budgets could not be
balanced,
money
borrowed
was
this
deferred to the future.
As
a
result, many of us have forgotten
is that what has been spent must be
points
risk,
to
was
it
determine
Paid for sometime, in
one way or
whether agriculture,
industry and
another, by someone. If government budgets are not balanced
earned natural
expansion, or over too long a period of time,
whether our delicately balanced inflation will
surely follow.
commerce
are
enjoying
a
soundly
eCu!1T0r?y1 is getting out of control.
Unbalanced government
ets
are
"National,
the
inflation
chief
and
state
factor
also
and
budglocal—
in
creating
the
clearest
"To avoid inflation, either
penses must be curbed
income
ernment's
must
be
Sooner
or
from
increased,
or
later
the
ex-
the govtaxation
or
of
Pacific
Gas
&
the second largest
public utility in the country, are
being offered rights to subscribe
to an additional 1,656,156 shares of
common
Co.,
stock of the company at
shares
five
1950.
The
of
March
record
offer
14,
to
purchase the
additional shares, at the subscrip¬
tion price of $30 per share, ex¬
pires April 5, 1950. A nationwide
group of
approximately 200 in¬
vestment
bankers,
headed
by
Co., Inc., will purchase
from
the
company
all unsub¬
scribed shares at the original sub¬
scription price.
Proceeds from the sale of the
Blyth &
common
stock
will
finance,
^
part,
the
program
total
in
company's construction
which it estimates will
$300,000,000
the
in
years
1950-51 inclusive.
drastic
the
circumstances, but pronounced
any
Levy
(Special to The Financial Chronicle)
SAN
FRANCISCO,
Frank M. Wosser is
now
value
the
of
ster-
ECA
procedure. Previously Canada had
benefited to an important degree
in consequence of generous allo¬
cations
of
chases.
Not
CALIF.—
connected
with
ECA
Canadian
"offshore"
Canadian dollar.
"free"
'
■
Although it would appear there¬
fore that in the coming months
Canadian
the
is
rather than
to
range survey
eventual
to
improve,
continued
be based
vast
of
wealth
the
resources,
tenance
Dominion's
the
of
mainr
capa~-
ble
management of.. its financial
and economic affairs, and possibly
greater ' difficulties
in
border
south
controlling
thfe
of
the
infla>~
tionary forces that ultimately J
to currency depreciation. ;V V :;. v
;
:
During the week the feature
the external market
cessful
continued
sucj-
Alberta
new
Activity
refunding .issue.
ternals
the
was
placing of the
in
•
inf
negligible
scale
with
prices <• mostly
un¬
changed. The corporate-arbitrage
steady
was
while
on
at
14%%-14%
funds
free
a
again
firmer at 9%%. Stocks
irregularly higher with the
industrial group index registering
a new 16-year high. Senior golds,
and notably Kerr Addision, were
in
demand
following favorable
>
were
slightly
were
earnings
were
with
leum
Western
oils
slightly firmer
Royalite and Pacific Petro¬
reports.
active
and
particularly prominent.
made little headway
Base-metals
but
Sullivan
East
drilling
reports
favorable
on
actively
was
traded.
Joins Conrad, Bruce
*
The Financial
;
(Special
LOS
D.
to
f
ANGELES, CALIF.—Hugh
has
Purcell
with
Chronicle)
Conrad,
West Sixth
affiliated
become
Bruce
Street.
&
He
Co.,
was
530
form¬
were
ropean
Blyth & Co., Inc.
/
.
•
.
pur¬
CANADIAN BONDS
Government
in U. S. dollars,
further
Provincial
re¬
boosted
by
Municipal
S. purchases within
the scope of the program
for Eu¬
Corporation
economic assistance. Now
embarrassing
surpluses
of
farm products, and British
ingness
to
furnish
U.
U.
S.
unwill¬
dollars
S.
imports from Canada, consti¬
Dominion's
the
economic
principal
problem.) When
Agreement
expires
it
next
July
1
CANADIAN STOCKS
the
U. S.-Canadian Wheat
will
be
difficult to disguise the precarious
position of Canada's markets for
agricultural products.
These
an
on
dynamic exploita¬
Canada's
of
natural
the
with the U. S. dol¬
lar. This view would
tion
good
a
for
Canadiaii
the
of
return
longer
a
advanced
dollar to par
the
situation
deteriorate
suggests that
be
can
case
economic
likely
more
normal
Britain as¬
to
exports
additional U.
tute
exert
the
on
were
Dominion's exchange
the
serves
for
would
market
York
bearish influence
a
governing
only
sured of payment
but
future sterling in the
pressure on
New
erly with Adams-Fastnow Co. and
developments
the
Joins Lawson,
in
cut
since
This situation is further aggra¬
vated in view of the present trend
suggest
both,
government
signal of the danger. Government must replace its
over-expenditures
spending in excess of tax collec- with debt reduction or the
thrifty
tions
puts extra money in the will have to
pay the bill in the
hands of the public without creat- deterioration of
their savings
ing any added supply of goods and
"The difficulty with such an
services.
When
people try to obvious course derives from the
spend this extra money for the fact that it is hard to agree on
Electric
the rate of one new share for each
when
war
con-
yor irretrievably, for immediate needs and payment
buying power."
Continuing,,
and
ices, they tend to drive prices
inflllence is So, the public
stimulating—money is better off than
and
be-
By Blyth & Go. Group
Stockholders
?•
cheap, business
trade
of
the
same," the insurance exec¬
utives state.
"But the greatest
danger of inflation is its insidious
ish-Canadian
ling.
robust
a
sterling will be- permitted to
rate
the
against imports from hard cur¬
im¬ rency
areas,
Canada's
foreign
trade
all, the responsibleposition
has
been
dealt
serious
blow.
To
a
cer¬
policyholder and citizen a
we
personal
own
portant
minded
economy
will have
patience and
governmental
we
still
are
flowing northward in steady vol¬
dian
But if
funds
investment
S.
U.
—national, State and local—to re¬ rise in Canadian exports to this
sist
courageously the pressures- country, as an immediate conse¬
to spend more and tax less.
After quence of the devaluation of the
all, legislative bodies reflect the Canadian dollar. This advantage
political self-indulgence, or the- in trade with this country is off¬
patriotic self-denial, of the set
however,
by
the
adverse
of
Josephs,
that
fall below its present level under
the heels of the official dollar and
lieves to be indispensable.
benefits
accompanying the
105th Annual Report
addressed to
policy holders and signed jointly
by George L. Harrison, Chairman
of
absence
tinuance
and
deficits.
by
surprising in
means
should be accomplished.
Each of
us has one or more which he be¬
to practice the same
possibility of
is
rumors
subject to its undermining influ¬
It is most unlikely however
ences.
.
we
-i*
these
accorded
ing passing consideration to the
a sacrifice.
It can be no different question is the fact that the un¬
official
dollar is'pressing hard on
on the governmental scale.
' v
we
pensions. It would in¬
"Some of the new social objec¬
productivity of the tives now
being discussed are un¬
economy. This increase in produc¬
questionably desirable, although
tivity would alone go far to pay there are of course differences of
the
have
but
to
the
crease
heard
been
appreciable,
reaction. The apathetic reception
We forego
offset a new' con¬
These choices which
make as individuals all entail
luxury
tingency.
a
movement in this direc¬
failed to produce any
more
afford to pay for.
can
During the past
of
an
impending
rumors
have
tion
parity vis-a-vis
to
dollar.
S.
currency
individuals
as
spend
dollar
the U.
the
illustrate
the cost of
letter
a
size
such
during this high level of
activity, we must choose
new
hope and opportunity for between patience in the achieve¬
millions of older workers. It would ment of desirable social
objectives,
greatly reduce the cost of pen¬ and
inflation
which
may
de¬
serious inflation from government
In
reached
"Currently we have large inter¬
In
addition, we would be im¬ national responsibilities—unavoid¬
proving the employment oppor¬ able and expensive.
They are
tunities of older workers. An in¬
part of our even larger outlays
corporation into the Old-Age and for the national defense.. We can
George 4,7 Harrison, Chairman of Board, and Devereux C.
Josephs, President of New York Life Insurance Company, point
which
have
difficult to grasp, it is worth
for earlier and earlier retirements.
*
growing hazard
Canadian Securities
spend¬
ing
which
is
currently
going
forward, but as individuals we
By WILLIAM J. McKAY
enjoy our share of the benefits.
The immediate pleasure of receiv¬
The persistent strength of the kets have now to overcome a 20%
ing the benefit dulls our knowl¬ "free" Canadian dollar market in exchange' disadvantage, Further¬
edge of sthe debt we have be¬ New York has
provoked the cus-, more in the event of the develop¬
queathed our children.
v >
'
V
tomary conjectures concerning the ment of anbthet sterling crisis the
"Because governmental .figures
possibility of the return of the Canadian dollar^ would also be
we
Insurance Executives Warn of Inflation Danger
t
out
As citizens we
properly desire.
selves to be content with what we
not
employment
tive
suggestion.
Let us assume
of illustration, that the
things we
rangement would completely solve
do
concrete, let me venture a tenta¬
sake
of the
the
I
older
for
are
market
the
on
which
and
taxed,
than
our income we eventually become
bankrupt, and so we force our¬
how¬
rewards,
who
workers
opportunities greatly improved.
hire them.
refuse to
he would
ever,
to hire
ers
under
ordinary circumstances.
If the
employer had doubts these men
might
be omitted
'view with alarm' the free
at age of 62
man
shall
so
The Problem oi Old Age Security
be
who
shall
Thursday, March 23, 1950
CHRONICLE
FINANCIAL
&
COMMERCIAL
THE
(1234)
42
considerations
a
further devaluation
Canadian
dollar
rather
of
than
upward revaluation. This would
appear
to be all the
in view of
the
A. E. Ames & Co.
INCORPORATED
therefore
more
fact that
Two Wall Street
New York 5, N. V.
WORTH
4-2400
NY
1-1045
logical
as
a
re¬
Fifty Congress Street
sult of the September
devaluation,
Lawson, Levy & Williams, 1
Montgomery Street, members of
Canadian exports to British Com¬
the San Francisco Stock Exchange.
monwealth and
sterling
area mar¬
Boston 9, Mass.
Volume
171
Number 4892
COMMERCIAL
THE
&
FINANCIAL
CHRONICLE
(1235)
43
rr
,Continued from
2
vaoe
til
n
The
share
providing for call of
prior,
preferred
-"a
,
stock,
compared
"share
of
net
with
$16.36
per
end
working capital for
of
1948,
ment.
amazing
ably
which delivers
camera
it is snapped.
the
to
carried
was
.
,
writer
consider-
was
minute after
man-
However, according
agement. Relations between
man-
one
annual
report,
improve-
.
-J
,
.
agement
.
made and should add to the sales
of this particular item.
the
on
The
impressed with the
calibre and efficiency of the
a
ments in the type of film used, cellent.
and in the camera itself are being
«phe
°
AJ.1C
in the Middle East and Caribbean,
net -«•
investment in companies
operf
ating in foreign countries, at the
Vernon's
think it necessary to describe this
finished picture
Secuity I Like Best
after
Mt.
..
.
'
and
employees
high
are
ex*
single • security
period of time?
any
given
American Tele-
over
phone & Telegraph and Western
Union were both the same class of
security
twenty
some
years ago
both "blue chip" commons. AT&T
in
company,
luiupctiiy,
Annual
"1949
iota
their
llieii
111
Report," shows
current
a
stdl is,
but
Western Union nao
has
—,
~ —vmuu
lonS slnce fallen from the ranks
-—*
ratio of better than 5 to 1. OuU °f the exclusive.
Or, as a more
million, or
The basic substance, from which standing capitalization consists of: recent,
short-term
illustration,
about 10.8% of total net book Polaroid derived: its name, is a
to^n oharp^nf^ mm
ict nrp
let's look at some of the thirty
Of the Mt.
Vernon-Woodberry value of fixed assets. Dividends, light-polarizing
material
sand10>uuu snares ot o/o cum. 1st pre- stocks which make up the Dow!Mills story. Its future looks ex- received in 1948 from associated wiched between two clear plastic
(Jones Industrial Average—most
7 000 ghares $2 50 cum 2nd pre"fceedingly bright in contrast with companies operating in foreign films. This material has been
of them "blue chips." Union Cartl.
."the difficulties which it has now countries were equal to 17% of used, since 1936, by American Opfh„°'V
.. nar
snarpcnTrnmmnn
bide ranked No. 1, Int. Nickel No.
'tiineneofnii,,
*
fntoi
not
Thuo
tical
in
the maniifnntnro
nf
^ut,o/o snares oi common, $1 par.
successfully surmounted. I can- total net profit. Thus, while the tlcal ^ the manufacture of sun
'
'
' 2 and General Foods No. 3 as the
foot help but regard it with tre- current difficulties facing the dis- glasses which do a beautiful job
At its last meeting, March 14, best price performers in 1948. But
"mendous respect as an investment. posal of "dollar oil" in foreign of eliminating reflected glare. An
1 "50, the directors declared 62ias^ year Union Carbide had
markets
may
limit
company's improvement
of
this
original account of arrears, and 62M>0 cur- dropped to 11th place, Int. Nickel
SIDNEY L. SCHWARTZ
profits from such operations in polarizing substance is made into ren' dl^dend on
f*rst pre~ to 16th and General Foods way
the years ahead, they do not basi- filter screens for television sets, ferred. This leaves arrears of $1.25 down
to 28th.
What if you had
Partner, Sutro & Co., San
cally change its earnings poten- These screens circularly polarize Per flfsf preferred and $6.25 per picked these three a year ago on
*
Franciscisco,
ranciscisco, Calif.
Lalit.
tial
Moreoverj the Middle East- light and are the first commercial second preferred share.
the basis of their 1948 record?
1Standard Oil Co. of California) ern reserves will remain a source applications of this
principle. The
*f the present potentialities of
Yet, if we had the multiple ex"X.
T,
.
.
of wealth unless there is war with filter increases image contrast and 'his company are realized, the perience of 50 selected issues of
!West Point. '
These are only the high-lights
books
.
below
at
$75
'
.
*•
~t
•
1
~—
cnn
.
.
.
>
^ ^
iraiinnc
-
seems Russia,
which has become less removes annoying light reflections Prospects for increased earnings this class of securities, we would
likely in view of the destructive from sources outside the picture and appreciation of the capital have an "average" and such an
potentialities
of the H-bomb.
tube.
stock
are easily foreseeable.
"average" would give us a meas:
••
Thf»
ovnroocoH
homin
in
w.
I™
when
be s stock.■■With
to
em brace
narticular. exPe^ed
embraces
..
a
:
•
,
.
Growth?
partieula^stock^with -" hmWth?
h
to designate it
his
vn?ctpd
tick
stick
;
to
«:
-.
favorite "f
tte
:■
:
world
which
in
.
and
economic
economic
con
con-
on
ed to
at
have
time which
a
markets east of
oil
suited to fill
on
^
individual
For
who
investors
the top
Sire
of
needs
not
are
,
security of principal,
and
generous
income,
Oil
Standard
Co.
bled,
of
and
of
are
favorites.
my
If some are
inclined to term this choice rather
"commonplace"
lacking
and
in
originality I do not mind because
I
feel
that
mentioned
funds
the
above should have his
committed
leading
investor
of
type
stocks
preferably
have
which
in
the
prospects and the market support
high caliber equi¬
characterizing
ties.
If,
body
the other hand,
on
some¬
be inclined to raise
may
an
Standard Oil of California, in view of the well-known
eyebrow
on
difficulties with which the oil
in
dustry
general,
international
fular,
are
Iwish
wisn
to
10
jthese
jtrom
look
and
our
in-
big
detract
not
do
.jserves basic needs in
our
modern
Its
istence
rising importance in
the usual co-ex-
and
of natural gas
combine to
far
reserves
capitalization,
84
nroof
of
performance.
not
An
is
in
investor
its.
who
bought Standard Oil of California
at
at
the* 1030
the'1939
has
to show
principal,
nricp.
price
average
average
139%
a
against
as
nf
9.Q
of
29,
gain in
47.5%
a
in the Dow-Jones industrial
age
its
over
recapturing audience from TV.
r>
~
Use*
company
the fine array of talent contribut-
ing to this series of articles about
impressed
•
•
f
maintains
a
the
re-
fact
there
search division, very ably staffed,
a
from the nature of its achieve™ei? f' aPPa^ently very capable,
latest project, completed wider
sponsorship of the office of Naval
in
over,
vestor
these
would
11
by
that
al-
are
received
inal
providing
yield of 7.7%
53V2 %
an
average
on
his orig¬
of
its
profits.
Put differ¬
ently, $1,000 invested at the
age
cash
investment, although com¬
ploughed back an average of
pany
1939
market price
*
.
s" a^f
it
is
expected
for
uses
this
that
other
many
will
be
se-
aver¬
would to-
division
work
needed in
tures
engineers
some
and
out
the
and
'
A
stock
with
,
,
sm much
.
basic
J^e^J^ar^
^±*_ence'
in &ood as well as slack times.
-
.
-
r—- ■ - -—
„
(
the
Allen
&
LOPATO
For
as
Co., New York City
would
be
the
of
stock
the
I
there
like
most
variety known
these,
rather
elimination
as
of
the modern auto-
existed,
causes
of
the
of
one
have
"cures"
to
accidents
been
at
effective
no
overcome
this
killer
with this one possible exception:
the Polaroid Corporation has de-
veloped
a
most
and with
all
serve,
ture prospects?
better
securities
William A. Stinson
ing
and varied opinions.
reviewsov
many
as
system using its polar-
has
ket
as
an
He
average.
should
stir
one's
im¬
agination.
This
is
not
stock for the
a
condi-
might have to be legislated,
steps toward
The first important
meet
his
investment
objective. As soon as we, in serving Mr. Investor, stop thinking in
terms
with
of
averages,
the
myriad
we
faced
are
choices
avail-
able in the market place—and
this series of articles is a testi-
monial to the difficulties involved
Each
has
different
"averages" representing the
legislation
in
such
use.
Here then
are
ten
per-
formance characteristics of practi-
three states.
clusion, considering the fact that
le stock currently is selling at
6V2 times estimated 1949 earnings,
for the first time since 1945, showing the fruits of its latest venture,
cally every section of the securit*es r9arke^., ^from the highest
and has about 400 employees in Srade bonds through other classes
all.
The employees themselves
bonds; income and! appreciab¬
have turned down three attempts t10n. preferreds; the
blue chip,
to unionize them and seem to be tbe income, and the lower-priced
and at about 7 times 1946-49
the
very
Allan
man
Lopato
servative appraisal.
One
arrives
at
the
at
same
con¬
a
age
earnings.
While
the
aver-
bigger
part of estimated oil reserves are
ings
records
investment.
his
per
earn-
criterion
However,
Polaroid-Land
company
$1.63
as
who looks
past
last
for
year,
Camera, the
reported net earnings of
common
share.
I don't
The
corporation
uses
a
Nor
in this
More than 50,000
keystone
in
valued
excess
And these
not confined to the
are
Some
about.
institutional
investors
Certificates
of $200,000,000.
Fund
1,800 fiduciary and
hold
investors
amounts up to
$1,000,000 or more.
of results?
By combin-
What
ing the right combination of the
ten Keystone "averages" into a
such
program
that afforded by
as
$10 000 invested in this
nomenal.
jan. l, 1940 had a capital
on
value
Jan.
on
1,'1950,
an
of $19,000 and
in
average
income
distributions per year of over
on
the
wen
300i%.
0Ver
all
the
precision instruments,
Keystone
take
a
investment.
original
bit
of
Custodian
Funds
understanding
for
application and use. However> when
their use is understood—much as a skilled crafts-
proper
man
knows how to use
ments
they
his instru-
the
provide
means
by which a securities man can
do
Dro£essional job 0f solving his
v
..
.
,,
characteristics as to fluctuation clients' investment problems both
and income. Each has a specific in good times or bad.
If used
investment
of
belief.
in making
this end seem to have been taken
introduction
investor.
be alone
to
seem
7%
In
the same ten years, had all special
an<j regular distributions been reinvested as received, the capital
WOuld have grown to a most impressive $32,500—an increase of
which
with
the
would I
ties
tion
to
a
individual
each
returned
potential
sufficient
investment program
an
precisely tailored to the needs of
then consider only those securi-
appreciation
has
the
pian
mar-
securities.
to
which I refer,
is one which
to
today with which
that he should think of the
sentatiye of ten distinct classes of
my
available
are
man
to fashion
fu-
In my opinion no
the Income and Growth Plan, the
results are little
short of phe-
to be universal and such
is
and
t,
tools
habits
easily *assayable
an
investment objective—
whether to obtain income, to build
capital or some other—and second,
ten separate Mutual Funds, repre-
which
p e
unpredictable
not
after
obstacle to its adoption is that for
full effect, the system would have
poration common, the stock
with
finally arrives
lection of the best security for
investment: a series of ten "averages" with which to meet virtually
any
investment
objective.
These are the Keystone Funds—
Cor*
as
attempting to
heterogeneous mixture of thou-
a
whom
driving completely so
far
as
headlight glare is concerned. This
could be accomplished at a cost
which would be very small indeed
in terms of lives saved. The big
Polaroid
as
advantages
than
where Mr. In-
a selection.
This preamble is important in
arriving at a discussion of my se-
situations."
con¬
the
more
with
select the "best" issue from among
vestor,
izing material in both headlights
and windshields, which could
eliminate the bugaboo of night
"romance
as
an es¬
long
has
greatest
(Polaroid Corporation)
that
of
the
come
polarizing
night has been the blinding glare
of automobile headlights. To date,
Being somewhat of a romanticist
of long standing, it is almost natural
in
not make
vehicle
a
"little" investor you hear so much
automobile headlight glare.
mobile
ALLAN
use
material
use
the way of a security.
If Mr. Investor is not already
aware of two important investment fundamentals, it is my firm
the machinery necessary for performing these processes.
However, all of the foregoing
from
does it
to
build
dous Possibilities that could
period
su-
vestment advantages.
If a real
service, is to be performed for the
investment
da" "be"worth"^aboutC$?39o"'e^" items> as Packed with potential belief that in order to best serve
clusive of the $850
£ dividends earnings as they are, in my opin- his interest he sho^d be taught
paid on that investment in the ion' do not aPProach the tremen- them: first, to recognize that he
1939.1949
diversifi-
pervision, regular and dependable
income, ready marketability, virtual indestructibility and other in-
many
to
wide
offer
fused in what he really wants in
this
processes
help
times
cation, continuous investment
ven-
in
of Polaroid's
design
all
In
ten tools which
are
hold
re-
search division last year exceeded
its direct
operating costs.
The
and
appreciation possibilities.
are
me
tools
income
to
as
it is; what with over 3,000
"listed" and more than 20,000
"over-the-counter" securities
from which to choose. On top of
this, he is too frequently con-
this
of
revenues
investment
habits
addition, there
at
any
as
Mr. Investor has his hands full
gross
to
ondjeringV sands of individual securities—
we
found.
and
sense
has set
characteris^, col-
known
investor,
—-
microscope
as
with which
answer
almost
different
favored
there
orati°fWhile primarily developed for use in cancer research,
scientists
dividends
annual
•
^
expect
investment
problem than ten such averages—
most as many
curities
aver¬
more¬
that in¬
years,
have
rise
•
.
great deal
a
price fluctuations and in¬
solve
with
Pictu.re film known as "Polacolor," "The Security I Like Best." However, I h a v e
f/1 18 ^\irrenRy negotiating with
been far more
* ? "2° !?"* picture industry on
The
to
ten
j„\
I have been most impressed by
The company also has a threecolor process for
printing motion
The
1939 average;
domestic
very
nro
subject
stock
a
its up-to-date refin¬
eries, pipelines, tankers, etc., and
It will be apparent that the cur¬
rent market price of around $64
a
/
(Keystone Funds)
in
weapon
.
could
we
What better
Security Analyst, Philadelphia 9,
Pennsylvania
wicroscope which cgtfse§
ordinarily colorless biological tis-
The
yet
as
per
share constitutes
STINSON
limiting regulations by the State.
is
natural gas,
per
WILLIAM A.
w
where
duction
share of common.
this its large reserves of
reserves,
to
of
effective
.
by which to tell
what
come.
Society, is a new type of ultra-
from
u um California
still
^aiuornia, wnere protomes trom California,
where pro-
and 174 barrels of foreign
reserves,
Add
has
company
most
....
ure
of
future
to
come
cumes
and
barrels
writer.
writers. This
,
timated
Incidentally,
oiitnut
for each dollar of senior
reserves
the. field
domestic
earnings
power are concerned.
After de¬
ducting one barrel of domestic
as
nno
opinions expressed herein
personal views of the
Research and aisu
also supponea
supported by
oy
grants
Cancer
£
T from the American
1
«—;;—
nf
provide above-average growth
,<
This
company
is among t the
strongest in the entire industry,
as
in
,
jeconomy and stability is afforded
through its position and prepon¬
derant use in the consumer goods
chemistry
active
now
60%
the excellent long-range out¬
for this industry.
For oil
field.
production
Several subsidi-
gas.
companies in partic-
currently confronted, I
my cunvicuun
my
conviction that
mat
state
siaie
difficulties
growth
than dou-
more
petro-chemistry.
now
among
County.
company
has the
so
natural
aries
California is
of
the
try's
.
.,
crude sales have
in
long-range
growth
Surry
years,
in
of a rapidly growing industry. In
the past 10 years> its output of
; al '
tHni^d
itc
income brackets and deoptimum combination of
an
in
recent
Rockies.
the
investors
basis of risk diversification,
a
in
reserves
has outpaced the average
over
the
nmn
the
California
interest
an
discoveries
Thus,
really expect¬
are
nf
of
strong
up
a
number of favorites
a
Oil
Oil
and
built
Company; has
facing
nnlitiral
a
has
a
grand scale.
are
colors,
^ar.as this writer knows,
and
reserves
also
or
Second, bankand brokers
ers
natural
commercially, avail2H®^ h^terial which will do so.
relatively short1 tridimensional color movies
Pnlifnrnia ."COUld prOVe to be the film induS-
StanHarrl
Standard
time,
-
or
r
worse"
ditions
Within
'
timp
changes in
technological,
Sidney L. Schwartz
in
one of the
fastest growing areas of the coun-
-
is
movies
are
markets are located in
to-
ex
domestic
The
_i__
sional
prjnc|paj
e
Tl,/,
h
d
first
he0^canri^irbe
b
,
company has had
This Pomnanv
haH ,^ne
The polarizing
Po»™ng material can also
aii that is needpd
be used ln showing three-dimen-
such tervor
fervor as
a.
sucn
they are capable of pro-
pr0perly
ducing remarkable investment resuits.
total of
125,000 square feet of floor space
satisfied with their working
conditions and wages which inelude an incentive bonus arrange-
commons,
Who can depend upon the
ket
price
performance
of
marany
Slayton Co. Adds
(Special
LOS
to The
Financial
ANGELES,
Chronicle)
CALIF.—
Maurice F. Sheldon has been
add-
ed to the staff of Slayton & Com¬
pany,
Inc.
44
COMMERCIAL
THE
(1236)
CHRONICLE
FINANCIAL
&
i
"
-
-
Thursday,; March 23, 1950
*.
'
"
cember.
Estimates industrial Stock Prices
$1,200,000.
News About Banks
Now Are 30% Above Normal
.CONSOLIDATIONS
basis of 10-year average,
highest level in four years. Hold the
L. M. Demarest & Associates, on
bold industrial shares at
*
longer
Bankers
and
NEW OFFICERS, ETC.
decline is postponed, the more abrupt will be the drop.
a
stock
their March report of the
This standard measure
Service."
is
the rate of flow above
level
business
of
"Flo-Dex
based on
ani
trends
below the ten-year average or
or
decad& normal for the correspond¬
ing months.
month
'
-
prices held the dence of the importance of watch¬
spotlight in the economic picture ing stock prices closely," the re¬
"A downturn in
in February, the report stated. "In port concluded.
and
stocks
has
their climb to plus 30% in tne bonds
usually
meant
a
downturn, after some
upswing which began last July
stocks have reached this higa zone months, in other elements of busi¬
for the first time since November,
"There is
Glavin Elected By
First Boston Corp.
of
50%
above
normal.
But
tne
At
history of industrial stock prices,
proves that the longer the decline
is postponed the more abrupt is
the drop.
Also the higher FloHate rises above plus 30%
the
greater the danger."
The report
recalled the extreme high of plus
143% in 1929 and the drop to
Glavin
minus 73%
the
in
1932.
"Four decades of the record of
a
meeting of
directors
Corp.,
City.
The
of
the
board
First
of
Boston
100 Broadway, New York
Charles
C.
Glavin
was
elected
has
in
and
for
business,
whether
or
on
all
was
elected
Mr.
a
He
years.
President
Trust
Co.
for
was an
that
at
past
22
Assistant Viceinstitution
and
sharp1 drop followed.
Charles C. Glavin
the
same
merger
time, it
Charles
Trust
warning > was based on a knowl¬
edge of what had happened to
stocks in the past.
of
New
in
was
V.
at the
1932.
At
announced
Rosicky,
of the
Assist¬
with
Co.
the
in
Bank
1923
and
of Europe
has
been
Manufacturers Trust; since
the former was liquidated in 1931.
"This
rise
of
stocks
to
30%
Gundy Group Offers
above normal isn't something that
Prov. of Albert Debs.
First
March
serves.
The
and
Harvey
Boston
Corp.
and
Wood, Gundy & Co., Inc., headed
investment
Weeks,
Central
Vice-President
Hanover
Trust Company
in
advance
of
Bank
and
of New York* is
voluntarily retiring
the
the
friends
occasion
the
*
of
and
March
of
Rockville
16 an¬
that it had given approval
the Bank
Co.
Trust
on
March 31,
bank's
com¬
McCone's
connections
President
Centre
Rockville
of
Centre,
N.
Appointment of Laird W. Dealaof Plainfield
as
Assistant
man
of
of
Joshua
Mr.
Corp.
Chaffey
is
a
California Bank's founder,
♦
Seven
*
*
members of the
staff
of
Anglo-California National
of
ceived
San
Francisco
have
re¬
promotions,
according to
by Allard A.
Calkins, President. At .the Capital
office,
Sacramento,
Walter
W.
Funk, Frank Hodgson, John E.
announcement
an
Miller and Darrell R. Purcell have
been
appointed
Vice-
Assistant
Presidents and Ralph B. Lane has
been
appointed an Assistant
Cashier. Mr. Funk, who has been
with the bank since 1939, and Mr.
Purcell, who has been connected
with
24
institution for
the
the past
previously Assist¬
years; were
ant Cashiers.
has
was
an¬
corpo¬
that
the late Andrew M. Chaffey.
announced on March 13,
the Newark "Evening News" re¬
if.,
other
include
the
of
Secretary-Treasurer of FranklinWashington Trust Co. of Newark,
N.
of
East
Hendy
Corp. and director of the Curtiss-
his
Banking
on
Far
13, Frank L. King, President,
the
State
York
New
Pacific
of
fey, rancher, were elected to the
Bank
Department
*
Line, Inc., and A. E. Stewart Chaf-
nounced.
*
<-•
*
McCone, Chairman
March 16 at the Arion
on
Club, upon
birthday.
The
A.
Board
rate
officers
fellow
his
by
eon
10.
board of directors of the Califor¬
Schwab, Vice-Presi¬
Comptroller
of
the
E.
Joseph
last
nia Bank of Los Angeles on March
is
*
*
the
on
President of the trust company.
#
is like¬
It
for
the
Townsend
Barnard
17.
Raymond A; Marks,
who started with the bank in 1934,
been
appointed
Assistant
an
Manager of the Market-Jones of¬
ports.
He has been in banking
fice, San
Francisco.
Glenn
K.
since" 1938, with an interruption
Mowry has been named Assistant
for war service in the Pacific.
*
Manager at the East Oakland of¬
*■>',*
v"'
V
fice, Oakland.
The
000
as
Pa.,
increased
,
,
.
. .
Walter Crandell Dead
its
of March 2 from $150,-
$200,000; $25,000 of the
additional capital represented a
stock dividend, while the further
$25,000 increase resulted from the
to
.
Na¬
& Trust Co. of New
Cumberland,
capital
County
Cumberland
tional Bank
of
First Bost. end Wood,
The
which it
that
*
John
a
first regular business day of
drive-in
facilities
occurred
branch
with
:
This
area
nounced
started
Glavift is
As everyone knows, stocks
a
dustrial
and
bank, has been named an
ant Secretary.
Mr. Rosicky
graduate of
in May, 1946,
few blocks from
the
Queensboro Bridge, in the
center of the Long Island City in¬
is stated.
Denver.
Wright
.
zone.
North,
part
Bridge
at
branch
San
he has been President and
Manager of the Midland Federal
Savings and Loan Association of
son
associated with their
was
that
a
reached their crest
Plaza
diive-in is
new
bank's
the
of New
of
years
lyn, N. Y„ was tendered a lunch¬
Manu-
at Fifth Avenue and 43d Street.
the
A
'fBack in November, 1945, in a Harvard Col¬
situation similar to the present lege and tne Harvard Graduate
of Business
Administra¬
one, the then new Flo-Dex warned Scnool
;
\
f
that industrial stocks were'above tion.
safe level.
In April-May. 19-HS
Fio-Dex again pointed out that
the market was in the danger
of
Title
by
Bank
Ruble will take office
stated
dent
the
time of
in stocks, cannot afford native of Esignore what is going on there." camba, Mich.,
JFive Danger Periods in 44 Years
The
York.
Phenix National Bank in 1930 and
terested
to
Maloney
16
March
on
Guarantee and Trust Co.
wise
Roosevelt Savings Bank of Brook¬
joined Manufacturers Trust
a
1945.
ui
opened
"
Y., for an increase of capital
York, announces that Ralph H. from
$400,000, consisting of 4,000
MacKinnon,
formerly
Assistant shares of the par value of $100
Secretary, has been named an each, to $600,000, consisting of
Assistant
Vice-President of the
6,000 shares of the par value of
bank.
Mr. MacKinnon began his
$100 each.
*
*
*
banking career with the Chatham
businessman, vice-president
the
rot he is directly in¬
banking facilities in
Island City were formally
Long
to
joined
firm
Drive-in
Department,
lecturers
Andrew P.
<
March 3, it is learned"
Sam Francisco "Chron¬
Mr;
has b^n with
the
Loan
April 1, it
Banking
Manufacturers Trust Co.
the board. Mr.
of the market
important bearing
aa
t h e
Harvey D. Gibson, President of
that many years
to 30% has been an
above
normal
bears watching," officer in its
de¬
the report stated.
"Inasmuch as buying
He
what happens in the stock market partment.
rise
cia ted
i 'Uh
be
metropolitan
of
industrial stock prices show
any
will
a s s o
a
member
1935
icle."
division of the
ness."
possibility that the
a
who
w
1945.
market may fluctuate above this
level for many months, even if it
doesn't rise to the very high zone
"•
on
the
from
ago.
Industrial stock
Home
Francisco
CAPITALIZATIONS
Rises occurred in
stock prices, bank debits, earn¬
S. Sloan Colt, President of
ings, production of electric powei
by
utilities, exports,
industrial Bankers Trust Co., of New York,
production, durable manufactures, announced the election on March
21 of Andrew
and commodity prices.
Solvency,
P. Maloney as
employment and farmers' sales
Assistant
dropped.
Retail sales are un¬
Vice
Presi¬
changed.
dent
of
the
"Sagging prices
in corporate
bank.
Mr.
bonds, and a slight decline in the
Flo-Rate serve as additional evi¬
Maloney,
a
'
.
Frederick W. Ruble of Denver
elected president of the Fed¬
eral
(J
prices have
risen to 30% above normal for the
first time in over four years, L. M.
Demarest and Associates, business
and industrial consultants, state in
Industrial
"
Jif
*
was
NEW BRANCHES
REVISED
' £
■
'
Regular and special divi¬
paid in 1949 amounted to
dends
,
Walter
Crandell
S.
died
his
at
home at the age of 70 after a six
months' illness.
Mr. Crandell, a
member of
the. New
York
Stock
Exchange since 1909, retired from
pulsory retirement age of 65;
On
his brokerage
business in New
May 12, Mr. and Mrs. Weeks plan sale of new stock.
*
*f
*
York a year ago.
to leave for Europe, where they
will visit England, Holland, the
The capital of the Southern Na¬
Scandinavian countries, Belgium, tional Bank of Orangeburg, S. C.,
With Schwabacher Co.
Switzerland
and
France.
Mr. has been increased from $125,000
(Special to The Financial Chronicle)
banking
group Weeks
expects to do considerable to $187,500, effective Feb. 27. The
SAN FRANCISCO, CAL.—Vic¬
happens every other year.
It is which publicly offered yesterday
writing and will also speak before capital was enlarged as a result
tor
C.
something that has happened five (March 22) a new issue of $60,Bacigalupi and Ramsay
several business and trade group'. of a stock dividend of $12,500 and
times in the past 44 years. It hap¬ 700,000 Province of Alberta
Browne have been added to the
Upon his return to the United the sale of $50,000 of new stock.
staff of Schwabacher & Co., 600
pened at least once prior to 1906; (Canada) serial "debentures due States
next fall, he hopes to spe. d
*
*
if
In July, 1909, stock prices entered March 1, 1961-1973.
Market
Street
at
Montgomery,
The deben¬
part
of his
time
writing
and
the plus 30% zone and continued tures are priced to
Purchase of controlling interest members of the New York and
yield from
(Speaking.
Mr. Weeks was on the in the Grove State Bank at Pleas¬
climbing for two more months. 2.625% to 2.90%.
San Francisco Stock Exchanges.
program at the International
ant Grove, Dallas, Tex., by the
They then dropped 25% in the next
Proceeds of the sale will be
Rotary Convention in , Houston, Dallas National Bank, at Dallas,
year and didn't get back to their
added to general funds of the
Texas, in 1913, and over the years was announced on March 11 by Robert H. Watson With
former high level for nearly six
Province and applied to the re¬ has spoken before National Con¬
Francis I. du Pont & Co.
J. C. Tenison, President of the
years.
The next time they broke
demption on June 1, 1950, of the ventions of American Institute of
into the zone above plus 30% was
Dallas
National.
The
Dallas
(Special to The Financial Chronicle)
$61,067,300 of provincial deben¬ Banking at St. Paul, M:nn.
Fi¬ "Times-Herald"
in September, 1915.
reports that the
They rose tures payable in U. S. dollars and
CHICAGO,
ILL. — Robert
H.
nancial Advertisers Association in
17%
more
then
in
in the next 14 months,
the
next
dropped
30%.
In May, 1919, they again
reached plus 30% and kept on
climbing, and then dropped 40%
In scarcely more than a year.
It
was five years before the market
regained its high level.
In May,
1925. the Flo-Rate again broke
into this high zone. It continued
year
an
maturing
subsequent to Jan. 1, Louisville, Ky., Life Underwriters
19-31, which were issued prior to at Detroit and American Bankers
March 1, 1950, under the Debt in New York City.
In addition,
Reorganization Program of 1945. he has made talks before the New
The
new
debentures
able in United States
or
Jersey Bankers, North Carolina
Canadian Bankers, etc.
He was President
are
pay¬
currency, at the holder's option,
and are direct and general obli¬
gations of the Province. They are
redeemable at varying premiums
upward for four more years, with
at any time on and after March 1,
actual prices rising 193% in that
time, but when the market broke 1954.
prices dropped almost 90%. This
shows that the longer the correc¬
tion is delayed the more severe
it is."
of the Financial Advertisers Asso¬
ciation in New York City in 1937.
J.
Henry Schroder Banking
Corp. and Schroder Trust Co. of
suburban bank will operate as an
Watson
affiliate of the larger
with Francis I, du Pont & Co.,
but
neither
With Barbour, Smith
(Special- to The Financial Chronicle)
as
a
election
of
George A. Braga
director.
President
Mr. Braga is Viceand director of Gzarr
nor
its
be changed
The Grove State Bank was estab¬
lished
in
reports re¬
sources of $2,112,625.
The Dallas
National, the "Times-Herald"
notes, was established in 1903 and
as of last Dec. 31
reported total
resources
1948,
of
La
Salle
Street.
associated
He
200
was
formerly with F. S. Moseley & Co.
for many
was
years and
prior thereto
with Blyth & Co.
s
*
of the
Republic National Bank of Dall? s,
authorizing
a
With C. A. Parcells & Co.
(Special
50 cents
Financial Chronicle)
to The
G.
added to the
staff of Charles A, Parcells & Co.,
Penobscot Building,, members -of
DETROIT,
Penoyer
Action by the. directors
Texas, in
South
become
has
and
$95,206,084.
*
New York announced, on Mtrch 14
the
institution,
location
under the
affiliation, Mr. Tenison said.
name
new
will
its
the
has
Detroit
Exchanges.:
MICH.—William
been
and
Midwest
Stock
:
ANGELES, CALIF. —Wil¬ nikow-Rionda Co., President of quarterly dividend, payable April
With J. Arthur Warner
Manati Sugar Co. and! a director 1 to stockholders of record as of
(Special toifhe Einancja!Chronicle) of various other companies.
;JAa?ch,: 15, has established a new
stocks will continue to rise, or
dividend policy for the Republic
BOSTON/MA&S. —Edward J.
Company,
210
West
Seventh
bow long they may remain at cur¬
Bank.
This quarterly
dividend Modest is with J. Arthur Warner
Street, members of the Los An¬
rent
levels, there is
tentative
geles Stock Exchange.
Appointment of George J. Mof- amounts to $337,500 on the 675,000 & Co., Inc., 89 Devonshire Street.
warning in ,the bond market.
fitt as Assistant Manager of its shares of stock outstanding and is
^Corporate bonds usually precede
Bronx Office was announced on at the rate of $1,350,000 annually.
With EL F. Hutton Co.
industrial stocks in upturns and
With Waddell & Reed, Inc.
March
20
by Walter E. Kolb, Heretofore
quarterly
dividends
downturns.''
(Special .toThe Financial Chronicle)
(Specta! to The Financial Chronicle)
President of the Industrial Bank have been paid at the rate of 40
The report disclosed Relatively
LOS ANGELES, CALIF.-MEarl of Commerce of New York;
Mr. cents per share, and: for the past
KEOKUK, TOWA—Clarence G.
little: change in other basic ele- G. Burr is,with, E. F. Hutton & Moffitt has been with the bank 16 several
years-am extra dividend Dresser, is mow associated with the
'jtoents of business from the levels Company, 623 South
of 40 cents has. been paid in De¬ staff of Waddell & Reed, Ipc. ^;
Spring Street,
The report points out that while
one knows whether industrial
no
-
.
LOS
liam G. Cuppa has been added to
the staff of Barbour, Smith
&
'
.
Volume 171
Number 4892
THE
COMMERCIAL
&
FINANCIAL
CHRONICLE
(1237)
45
-
Chocolate-Sealed Fish
Bank and Insurance Stocks
ft
By ROGER W. BABSON
By H.
E. JOHNSON
Mr. Babson, pointing out we do not
get full nutritive value of
fish unless the whole carcass is
eaten, describes his efforts
This Week—Insurance Stocks
The annual report of the Insurance Company of North America
for the year ending Dec. 31, 1949, was
recently mailed to stock¬
holders. As has been the case for the past several years, this
report is
of the most detailed
one
and
informative of any
insur¬
the industry
ance
company. Because of its prominent position in
few comments about the operating results of the
a
appropriate at this time.
company
are
to
the
process
whole
now
proved
the best in
underwriting
its
158-year history.
this
papers,
have
which
on
arising
showed
Choco lateSealed Fish,
however,
has
A larger volume of funds together with higher
stock
common
increase
holdings
aided
investment
news
of
written
Claims and
Expenses
Total
earned
claims expense
and
$158,940,048.28
$5,043,083.47
12,426,488.23
16,660,201.21
4,233,712.98
$151,556,642.52 $142,279,847.07
$9,276,796.45
claims
and
incurred—
incurred-!
taxes
incurred
expenses
Deer.
$163,933,131.75
unearned premium reserve
Premiums
or
70,354,301.24
76,150,858.78 —5,796,557.54
63,690,431.02
59,480,934.35
4,209,496.67
$134,044,732.26 $135,631,793.13 —$1,587,060.87
Statutory underwriting profit—
$6,648,053.94 $10,863,857.32
$17,511,911.26
Financial—
Interest,
Profit
dividends
loss
or
and
rents
securities
on
earned
$12,513,540.71
—319,632.18
sold-
income
$12,193,908.53
Operating
Federal
Income
income tax
$10,437,774.20
$2,075,766.51
9,449.07
—329,081.25
$10,447,223.27
$29,705,819.79
8,002,000.00
*
incurred
_
I
Operating Income—
$1,746,685.26
3,833,240.00
4,168,760.00
$13,262,037.21
$8,44^782.58
One of the most interesting features of the report, particularly
those interested in securities, is the section concerned with
to
investment activities.
During the
a
$17,095,277.21 $12,610,542.58
$21,703,819.79
tribution of the
These fillets
the
flesh
bones;
preferred stocks, $2,232,000;
the
invested
in
follows: bonds, $16,943,000;
was as
and
public utilities
stocks, $14,788,000.
common
stock additions the largest
common
stocks.
proportion, $8,285,000,
Industrial
and
Of
was
miscellaneous
stocks accounted for $5,670,000, bank stocks $654,000 and
railroad stocks $179,000.
common
The securities portfolio of the company at the year end based
the market values at that time totaled $330,144,950 com¬
pared with $278,095,614 the year before. Common stocks amounted
to 41.4% of the total, bonds 40.9%, and preferred stocks 17.7%.
The year previous the respective percentages were
38.5%, 41.6%,
upon
the
near
factory for
Decline and Fall of British Cap¬
Chocolate
italism,
Preservative
a
But the above is not the whole
story.
odor
In addition to killing the
and
bitterness
of
the
cooked
ground whole fish.
The
chocolate sealing acts as a preser¬
vative for the
fish
the
chocolate
in
cream
as
it does
for
covered
candy.
our
Well,
Surely
my
has
friends
the
no
above is my story.
chocolate-sealed fish
at
but I
dose the sad story with this fore¬
cast: Someday every family—for
health's
sake
ground
whole
sealed.
as
a
will
dish
the
to
be
fish
Whether it
main
leave
—
present;
or
eating
chocolate
will
be
eaten
dessert, I
imagination of my
as
patient readers.
which
are
better
fed
up
biologist
Any
that
you
ground
now
feed.
chickens
are
Nash
The
Instalment
The
F. S. Yanfis & Co.
S.
Government
State, County and
Canadian
Other
bonds
Municipal
—L
_
Government
foreign
Public
utility
all
Total
Preferred
Railroad
___
bonds—
&
The
Our
$115,694,150
41.6%
1.8%
$6,183,462
$6,049,014
-
—
utility
of
vSome
country
the
people of this
have started from
may
ated
—
and
miscellaneous
preferred
Common
stocks
$58,400,667
fishes
which
had
Some
ours.
They
these
gradually
backbones
fishes
these
of
initiative to
land.
Louis
like
•'
A.
$55,345,047
lizards
>
$5,535,000
—
utility
Bank
;
Miscellaneous
1.7%
A' \
(Special to The Financial Chronicle)
had
and
34,144,160
10.3
$5,709,300
18.920,324
27.3
76,687,268
outs:
pleasant
odor,
ILL.—Louis
common
6,793,653
2.1
5,595,485
2.0
144,040
0.1
$136,826,160
41.4%
$330,144,950
$107,056,417
100.0%
$278,095,614
and
slightly
two
a
some¬
38.5%
100.0%
Experiments
but
could not get rid
This
taste.
bitter¬
liver which
one
was
of the
best of the ingredients. So I gave
NATIONAL BANK
of INDIA, LIMITED
and
Bankers
to
the Government
in
Kenya Colony and Uganda
Head
STOCKS
Branches
Office:
26, Bishopsgate,
London, E. C.
,
in
Colony,
India, Burma, Ceylon, Kenya
Kericho. Kenya, and Aden
and
120
York
Stock
Telephone
:
BArelay 7-3500
Bell- Teletype—NY
Paid-up
Exchange
BROADWAY, NEW YORK 5, N. Y.
,
.
New
Reserve
CapitalFund
Florida
this
Winter.
Pricken who has
I
met
Mr.
affili¬
Investors
of
BARBARA,;;
CAL.
—
Robert
McWade
filiated
with E.
He
formerly with Hill Rich¬
has
become
af¬
D.
Baring-Gould
Co., 19 East Canon Perdido Street.
was
ards & Co.
Oliver B. Scott Dead
Oliver B.
&
man
died of
a
heart attack
Mr. Scott
the
of
tion
Scott, Walston, Hoff¬
Los Angeles,
Goodwin,
was
a
on
March 4.
former President
Security Traders Associa¬
of Los Angeles.
Joins
Mann &
Gould
'
MASS. —Warren
K.
Butler has become associated with
Mann
and
Gould, 70
members of
Street,
ANGELES, CALIF.—Mar¬
Stock
Washington
the Boston
Exchange.
Uhrich, Jr., has become af¬
with
Crowell,
Weedon
R. H. Johnson Adds
&
'
650
South
members of the
Spring
Street,
Lbs Angeles Stock
of
Exchange.
(Special to The Financial Chronicle)
_
BOSTON, MASS.—Joseph R. Eid
Worcester and Joseph R. La-
mondra of
With Paine Webber Firm
Derry, N. H., have been
added to the staff of R. H. John¬
&
son
Co., 70 State Street.
(Special to The Financial Chronicle)
ANGELES,
CALIF.
-
Two With Chas.
-
Harry
A.
Cottingham
is
with
(Special
to
The
Financial
A.
Day
Chronicle)
BOSTON, MASS.— James F.
Paine, Webber, Jackson & Curtis,
in Lakeland.
He coats,
Brennan and Thomas E. Roberts
626 South Spring Street.
He was
peel with chocolate; it is
are with Chas. A.
Day & Co., Inc.,
delicious. A thought occurred to formerly with Dean Witter & Co.
Washington at Court Street, mem¬
factory
orange
me
and
I took
over
to him
some
chocolate-sealing
through
his
including the cooler.
Executorships
ha& become
Protected
(Special to The Financial Chronicle)
Crowell, Weedon
modern candy
a
machine
also undertaken
tin B.
LOS
Florida
in
While
£2,000,000
The Bank conducts every description of
banking and exchange business
and
to
£4,000,000
"
Trusteeships
coming
until
—
£2,500,000
1-1248-49
(L. A- Gibhs, Manager Trading Dept.)
up
ground cooked whole fish to run
Zanzibar
Subscribed Capital
Laird, Bissell & Meeds
Members
With
LOS
probably caused by the
was
lresh
we
bitter
Dunn
SALEM,
filiated
the
FRANCISCO, CAL.—Nor¬
with
SANTA
geles Stock Exchange.
My Japanese chef eliminated tne
odor with a few drops of oil of Co.,
of
■
(Special to The Financial Chronicle)
Stoner has become associated with
un¬
eliminate these two handicaps.
to
ness
Grand total
a
repast
bitter taste.
orange;
stocks
one
The
Various experiments were tried
6.8
the
With E. D. Baring-Gould
A.
(Special to The Financial Chronicle)
2.0%
27.6
with
'
CHICAGO,
19.9%
90,237,507
115,840
beach.
two
My
Industrial
United
on
Cooperation
Co.
Stoner
V
crawl up on the
became
Harbor
Stocks—
Railroad
Total
17.7%
Committee
America, 130 Montgomery Street.
He was previously with Colvin &
monkeys; but surely the best of
us-' originally
came
from great
what
Total
Public
40.9%
Europe, The—Declar¬
European Statesmen-
in
R.
man
had
0.8
of
of
SAN
Ancestry
8.0
f.2
Auto¬
Anderson
With Protected In v. ;
22,279,335
472.580
2,398,070
__
American
(Special to The Financial Chronicle)
7.2
0.3
Stocks—
guaranteed
Industrial
0.7
875,000
the
of the fish, in¬
Good
0.1
2,205,770
33d
European Movement,
537
Fifth
Ave., New York 17, N. Y.—paper.
1.0
2.3
East
—Public Affairs Press, 2153 Flor¬
ida Avenue, Washington
Europe
8.7
3.4
6,275,310
51
The—Rudolph
American
for
will
2.2%
9,566,010
2.0
of
mobile,
Union
2,756,000
3.7
Martindell—Har¬
Brothers,
ations
24,126,250
34.9%
6,633,280
$134,918,123
Railroad
Public
1948
$96,982,180
12,234,140
475,433
—
Railroad
December 31,
34.1%
Asso¬
8, D. C.—
7.8
$112,494,500
Ahead*
Bankers
Scientific Appraisal of Manage¬
ment—Jackson
—
U.
31, 1949
Road
Y.—
cloth—$3.75.
0.9
Market Values
DecembT
Bonds—
Fifth
N.
ciation, 12 East 36th Street, New
16, N. Y.—paper.
Story
2,917,500
following table.
Credit
60
11,
York
Louis A. Sloner With
25,587,050
23,847,103
This distribution and the percentage of securities in the vari¬
classifications in each major grouping are summarized in the
Co.,
York
American
—
A—Bradley
Lynde—
Cornelius
Avenue, New
cloth—$3.00.
cluding all the minerals and vita-
the
and
MacMillan
Street, New York 16, N. Y.—$4.00.
now
humans!
than
chickens get 65%
Reform—Henry C.
University of, Chi¬
Hook in Leviathan,
per
certain other valuable products
chicken
New
Hoover Commission Report.
vitamins from the liver;
no
Hutchison—
Sons,
cago
Press, 5750 Ellis Avenue,
Chicago 37, 111.—cloth—$3.50*
A critical interpretation of the
a
the
from
Federal Tax
Simons—The
D.
refrigerator.
Keith
—
Scribner's
York—cloth—$3.50.
The fish so sealed and un¬
frozen kept fresh for some weeks
in
The
Charles
whole
fish, the chocolate also sealed this
developed into
F. S. Yantis & Co. Incorporated,
mammals.
Hence, today, we can
135 South La Salle Street, mem¬
get from fish nearly all we need
bers of the Midwest Stock Ex¬
in order to live—provided we eat
change. Mr. Stoner was formerly
the whole fish.
Sales Manager for Heath & Com¬
Last Summer
I experimented
pany, and prior thereto was Vicewith grinding up and cooking the
President of Hugh W. Long & Co.
whole fish
flesh, bones, skin,
liver and all—with the help of my
friend Captain Frank Favalora. I
Quincy Cass Adds
gave some dinner parties, having
(Special to The Financial Chronicle)
soup, jellied salads, fish balls and
LOS
ANGELES, CALIF.—
lobster (ground up with the shell)
Frank C. Clinton, Maurice F. Shel¬
for the main
courses, with
sea
don, and Beverly J. Watson have
vegetables followed by a de¬ been added to the staff of Quincy
lightful dessert made from sea Cass Associates, 523 West Sixth
moss which I picked up off little
Street, members of the Los An¬
and 19.9%.
ous
calcium
palatable.
oays!
however, are only
of a fish.
They
sides
no
come
it
,
mins.
.
investment
born
was
dustry'— its development and
changes.
Just now it is in the
"quick-freezing" era, when you
buy frozen fillets which are good
tasting and healthful fish.
Insurance Company of North America made
$33,968,000 of securities to its portfolio. The dis¬
new
to
Babson
year
net addition of
rise
I
Gloucester,
Mass.,
the
largest f i s la¬
in g port of the
world.
I have since always spent
my
Summers
there.
Hence,
I
have seen much of the fishing inW.
Roger
tell
Net
t h a t
its defense!1
nor
Gross
t c.,
must
contain
Investment
nists,
o o
in
Incr.
1048
"
e
following tabu¬
' ^4.)
Underwriting—
Increase in
t
c a r
by
papers,
were
These operating results are summarized in the
lation taken from the company's annual report.
Premiums
been
razzed
so
income
approximately 17%.
substantially higher and reflected
the improvement in statutory underwriting.
They increased to
approximately $8 million from $3.8 million in 1948.
an
Federal income taxes
to
space
defend my act i o n s.
My
primarily from lower claims and
contribution to the better show¬
ing. The gain in statutory underwriting profit was from $6.-3
million in 1948 to $17.5 million last year, or 265%.
Investment results were influenced by the conditions existing
dividends
make
to
would
taken
the
Im¬
claim expenses made the
greatest
within that field.
order
in over 400 news¬
is the first time I
appears
-
were
in
During the 27 years I have been
writing tnis weekly column which
The Insurance Company of North America showed operating
results for 1949 which
fish
Explains chocolate-sealed fish.
The
result
to
my
taste
good—no odor and
But according
not
even
the
no
was
very
bitterness.
to the newspapers
cats
of
Lakeland
bers
With Stern, Frank Co.
of
the
Boston
Stock
Ex¬
change.
(Special to The Financial Chronicle)
LOS
Donald
Frank
ANGELES,
P.
Yust
is
& Meyer, 325
CALIF.—
with
Stern,
West Eighth
Herman Pilger Opens
Pilger is engaging is
Street, members of the New York
business
and Los
Avenue.
Angeles Stock Exchanges.
;
SYRACUSE, N. Y.—Herman R
from
office
,
'
a
at
securities
218
RMfci
„
THE COMMERCIAL & FINANCIAL CHRONICLE
(1238)
46
Continued from first page
:
the next three years than to cut it
.
-
?Klf H
KCCOVCIV
versus
m
J
10
x
now and by,
similar amount in the fol-
by the remaining
verse" by giving the most to the
we
especually mention Belgiu
and
have
Italy)
forms
the
m
re-
some
mace
needed
direction
lowing
j
.4
$2,122,000,000 in the third
the committee. I
bilateralisr
from
away
is,
genlraTthL
Butta
been very
It
is
^ been^n
has direction.
economic and
should
retain more
after the end oi
sti
than four years
totalitarian device o
exchange control. This device was
by
introducedl°
13
^»nlrni
«
Slv
usual y
contml
exchantoe
the whole network of impo
goes
prohibitions, licenses, quotas, b
lateralism,
drawing rights,
has
the wrong
Production indexes have
con^
mdueed
dilemma
The
of
Marshall
the
Plan^ the ditoMna of evevyjoV'
^nHitinna
nonconditions
imposes
on
its hand-
tlie mo:n®ys.
wasted
If it does impose conditions, they provoke foreign resentout,
-
tiple^currencies, currency mco - ment.
material/'
government
Planning
ECA's
materials,
government
planning,
countries
year.
that
J.;*,
succeeded
am
going
on
the
conditions, would be at least the
tionary, and known both by themr
assumption that the proposed au- simplest plan that we could adopt, selves and by European govern^
thorization of $2,950,000,000 for It would be least likely to be mis- ments to be so, makes these
ERP fo^ the next^fireal year is imderstood. On purely political
powers ineffective. Mr. Hoffman
fixing, profit hxing and wage
kill
incentives
strangle
and
re-
and production.
am making is that
seriously plan to terminate
we
the ERP Program
sbouid
call
this
But this
The point J
if
shall
purposes.)
even in 1952 we
do it right now
begin to
equal, proportional cuts each
instead of cutting too little
nQW and ieavjng a disproportionby
year>
termination
of the program
lf
Hopeless Dilemma
Jorfere in the internal affairs of
thfSFnrnn^nieJA,rJr^Ln°fc
™r
Setback to Economic Freedom
foregoing figures will do for illus-
trative
Plan
brings
A.
original dilemma,
the
back to
us
which
personal
responsibility
for
withholding such funds, and they
our
is
theref8ore
in.
may
of his
herent in all government-to-gov-
igT10re
reJe7t
^
they have others.
as
Again,'
ernment "loans" and grants. By not all ECA officials want
to be per- ;
grata with the foreign gov-A
putting any conditions on our sona
loans we avoid the charge of in- ernments with which they are
terference or domination; but we dealing; if they are stationed in
are unlikely to get the reforms in any country they want to be liked
<
ately large cut to be made at the
Our ECA officials vacillate befixing
that
together constitute tween the horns of this dilemma.
complete economic regimentation, First
price
covery
vote,
a
ECA Power Only Discretionary"'
wurcSSs trade
wbether in all items these two interfere in the "internal"''affairs a g a i n s t American oil; but^the
unbalanced, ]Europe
trade deficit
def
^
^ ^ exactly comparable of the governments concerned.
British officials may feel that Mr
m each other. But j t
t the
For purposes of identification I Hoffman would not dare to taki
dollar shortage remains.
the war, the
With
brought to
were
political
scandal, for example, that practically every nation in Europe (and
in fact nearly every nation in the
first
/
of
small.
an
world)
but the recovery that
mult,-
progress
them it if
approve
PacV
^
that
and controlism andtowa.d
year, and
Congress would
fin getBut even when ECA officials
n;pt
mnnpv
(I
say parenthetically at ting themselves the biggefct trade insist
on
European
policies of
£ents can pick **this point that the figures I have deficits.
j
which Congress would approve,
reforms. citied above may not correspond
Simply to give checks! to the the mere fact that the power of
don t
have^toexgctly
^ ^
befQre Buropean governments> without such officials is merely di*;
P
1in
Some European governments
may
say, a
i
„
j
each
;
Fund is already supposed — and
has failed—to do. It would actually apply "incentives ? in re-
by only $828,000,000
flfin
Thursday, March 23, 1950
1—
—
—
congress
then
it
around
it
is
is
sure
to
be
latter
comes
told
that
likely to get
the reforms necesto give our aid its maximum
effectiveness.
apon Congress J? mak?
of
withholding funds.
*
V;
disadvantage of this
system of administrative discre-1
sary
Congress
asking Europe to make too
drastic an adjustment in a single
year' Great Pressure wiU then be
fn rltSm SrLticanf put
aMmate
adopts
this
when
1952
cours6j
Europe necessary to make our aid there, and they are afraid to get 1
For effective. Certainly we are un- tough and take the personal onus !
quite
may
prefer to insist
Another
properly
economic and
on
financial reforms in Europe in
stiR change for our aid
tion
is
that it can so easily bediscriminatory, or be
thought discriminatory. Some for-5
come
ex-
In that case eign governments doubtless feel-r
ssrirH sswsr ——
wraswtart*
^T,iby. Kr3,rss.Krasr™™°"iJ
jsaara s-s cs star
its
one
It mating against American motion
Pict"res
for.
hope
supporters
has slowed down the pace of eco-
American oil com-
i
The French repay us by
threatening the sale of Coca-Co:la.
Then our ECA officials talk of
Let us imagine,
for example,
getting tough.
But when
it
that the Marshall Plan had never comes to a showdown they dare
been devised or put into effect, not nsk
he internat.ona resentEuropeans would still have had a ment that would follow their ingreat need for American capital, sistence on reforms that would be
instead of increasmg it.
It has set back economic
freedom instead of promoting it.
nomic
recovery
They could have got it only by
applying for private loans. And
they could have got these only
by restoring the confidence of
American private investors.
Panias-
really
effective.
subs^
>
So we end by
discrimination
industries.
against
our
own
.Government
"loan"
and
gift
If
Congress decides to taper off
should
I
Marshall aid in the simple, equal, here
proportionate
perhaps
to the
as
say
a
word
■■'its-
why it is
reasons
program.
nf
thorize
course,
?indPr Fhl
for
the appropriation both
and tor 1981
The pur-
now
1951
acting ahead of time in
be to give Eurogovernments plenty of ad-
of
pose
this way would
pean
vance
much
from
notice
concerning
to
abolish
the
ECA
bureaucracy that has been set
administer
to
omy.
have
Finallv
up
European
our
holders
the
that
payroll
not
are
needed
the distribution of ECA
Hai,
This would enable them
naa
to
maKe
tneir
r
7"
of the Marshall Plan.
aoiiars.
could
nave
case
or scienttficaUy determined
They
have
had
to
clear my own conviction
or^iS^at°these curr^n8' PUrGi1J
would
francs
irancs
or
lire
tnat
not
cies
that
means
to halt
^n
would
tnese
ri
curren-
depreciate.
This
they would have had
monetary inflation
To do
Ll^npl^
that,
on
administrative
ec0nTiC
froandS'- P ti0^ .uC?nlreSS
Ijarm to terminate rect that the reduced
do
no
ERP when the present appropriation expires on June 30.
But
mous
The time to time, in the name of Con-
economic
gr0Unds
the °nly considerations
simplifica^total
gress, policies which
not only
are
it appropriated should be divided
among
the
individual
that
the
majority
of
di" W°Uldr approve"
man, for
sums
govern-
we
the offk '
tend
'1
X
not° always beVregarded
wholly
nhLPfU/P
regarded as wholly
L
that
we
mv
ihi*
1
a
of-
^
eliminate
at
wv
unnecessary
!flat,^ eliminate unnecessary or
fJection^pon "hher^the^ompetence
or
motives of
official
Manv
anv
the
of
individual
officials
of
j
*
*
unLualTbility
|
highest*T
patriotfc moSvesT am merely \
ECA are men of
anri
arp
artinfr
from
cUcrgesting
the
ECA
general
and
for
nnliev
the
elimination
of
the
organizational 1
f-
^
reasons
'
erly
not
^
Commendation
nerhan<;
ohmild
a
DO
Paul Hoff-
example, has quite propobjected to the practice in
Europe of what is called "double
^
as
Congress
ments in the same ratio as in the pricing" of coal and other1 commust current year. This would take modities. But this is only a minor
are
0?
therefore
plan' aiJd m. favor of apPropri-
■
their
wartimT elcchanaeToltrol8
h^ve made the preceding remarks from the beginning. To recognize dubious in themselves, but may
/ifx
exenange control, chiefly because I wish to make this frankly would lead to enor- not at all represent the policies
(2)
Many
FCA
mony in tavor ot continuing ims
Congress' Own Function
to make their plans accordingly.
amount fixed has been arbitrary
of fine1 *
an
nrnn»*nnrf^
^
th^ Marshall Plan Thefr
funds'can
tTerminati°n
a SO"Called
^xcess" here above disadvantages.
For these officials
I recognize our
own needs can be objectively
then proceed to announce from
Trr^efcoXhave
^at such
would in anyI
iney
bavetestimony
been
quite, futile.
into
the
hold
17
on without such officetesti-1'
holders, it ought to be.
.monvinfavor ofcontinuingthis r *
programf like the Marshall Plan, And it would also forestall what • The second reason is that Conto repeat) do not speed up world would
otherwise
be
constant gress should not leave to bureauspecify the recovery; they slow it down. We propaganda for larger" and con- cratic discretion
the
conditions
reforms
Europeans
would have are subsidizing and prolonging tinuing aid.
.and policies that it is Congress'
had to make to inspire such con- statism and socialism
abroad, and
The truth is that the amount own function and duty to prefidence:
imperiling our own free-enter- set for ERP aid has alwavs been scribe.
(1) They would have had to prise system to do it.
an entirely arbitrary figure. There
The present extremely wide
assure
anybody who put money
But j have not come
before is no way in which a figure of range of administrative discreinto Europe that he c°old get it tbis
distinguished committee to so-called European "needs" or of tion for ECA officials has several
nave
who
corn-
ManV >
bureaucracies
office
nf
ECAr:i
weakness
a
fpa
Z LLo
If
It is not difficult to
wliadgTaVe hLmtoanmake the"
is
neonle
Tn tSt
office-
any
+hP
Weakness >
weakness of the
all
to
m0n
The first reason is, of
that of immediate econObviously we should not
on
a
bureaucracy
aid
how be carried
they could expect to receive
us.
important
Keforms to Satisfy Private
Lenders
at
.wouia
Bureaucratic
Common
that I have just
suggested, it should obviously act
as soon as p0Ssible. I think it is
aiso important that it should auway
*
Turn Program Over to Ex-Imp
1
Bank
"
•
T
'
u
T
n
Lfdrh Won?d
be
abolish
to
the
ECA bureaucracv
and turn our ^
from ECA officials a burden of evil affecting a comparative f^ture Eu^
over"1;
decision that should never have handful of commodities. The con- iriif S Tmnnrt^Rank ^rhJwMf
good reason for our doing SOj we been placed upon them.
tinuance of exchange control, on _V!lpaS?
nref^Hng the Fx- '1!
whfph°hfQVm^made an imPlied promise to con- In fact, the whole ECA bureauc- the other hand, is a major evil. Dort_imDOrt Bank bureaucracv to H
thp naRnnniitpH
tinue our Marshall aid for at least racy was unnecessary from the R is almost the keystone of the fhe ECA bureaucracy but the ExThPvJn^
four years- We would only bring first.
The elaborate
ritual of European control system which th®]
tn
(3) To return to balanced budgets European governments would
take into account.
though there
on
Sd7q a^i nv^grnwn rl7pf
nnH
l£SXl
(4)
They
would
ston threatening
o+f™
+1^11
Llynie
i
had
further
to
na-
lurtner na
expropriation, and
(5V Thev
relax
have
still
«
or
would
abandon
wages
prices
profits
P
have
had
controls
interest
rates
'
3te
to
over
and
3
'
(6) They would have had to
re-
ereessTve taxation
duce
excessive
taxauon.
attract
forms
u
private
would
u
j
ui-
wlS+oi
capital,
such
already have
j
+
re-
gone
"wouM^aveFbroug^^
.more
p^^g^ut0tt
and more balanced
trade, the
Unfortunately,
not the slighest
recriminations and charges of
bad faith if
» now-
we were to terminate
More Drastic Tapering-ofl Needed
A
0n the
other hand,
even
the
and by a second
WaSt-
+
/^a1S
Pa
should be cut to,
say
000 for
fiscal year
the
1951
$2,520,000,-
and
;
dear.
reason
0Jy° ^
^
imply
either
tionate
for their
As long as
futility is
foreign govern-
ments would halt.
at least
as
'oursel've?
ourselves,
/vii
These govern-
present ECA pressure provides..
would
be the
definite
knowl-
edge that the aid was coming to
an
end.
such trade. It atfects not
one or
Irery' expVrt^L^whhtevw
and
Y?t
Mr. Hoffman
to
seems
be
ft L Sle
along
of
handlinfthifnro-
with the
S does® Tnd
°tver'
g,ran?
to
work
it al-
tum the pro-
t0 U W0Ud'd v'Ton ^
eliminate unnecessary duplication
officeholders
nf nraani7ations and
three
value.
Everything
gress.
For example:
•
(D No loan should be made diQKnii
rectly to any government, but only
to some specific productive enterAgain prjse
private or governmental.
that it proposes to do could be far
upftpr
rinnp
R°n
we
uv
exchange control.
surprised
are
to
find
ECA
Each
loan must
be
fully
Such a
to
the
proposed
new
"clearing union" for Europe. This
"union"
would
be
merely one
more futile effort to do what the
perior
existing
1
;
guaran-
expropriation of land, or insisting °fen-
Futility
that Germany impose more con- terprise, private or governmental,
plan woud be far su- trols on its economy and move that enterprise must be currently
years
adjustment at the end of
the second year.
It seems more
reasonable
to
reduce
Marshall
aid by $1,260,000,000 in each of
dubious
very
officials urging Italy toward the teed, however, by the government
"Clearing Union" Just Another
a
^
The
ana
Congress need do is to authorize
Lmramtathfn
^th^.urent TiJ6 men.ts W0Uld prob^ly ftiU ?aVC
appropriation for the current lis- as strong an incentive to reform
the n^im- continuance or require European
^teralism, our
andECA
the ofncmls
integration
governments to make a disproporhave
,^made futile exhortations.
Europeans
Europeans
and
,
now
rency convertibility,
for wmch
prevents the restoration of free-
dorn of trade and the balancing of
funds"
tpotj
to $1,260,000,000 for 1952.
cur-
other
such special earmarked accounts
^ meaningless as a real control,
"counterpart
ECA now talks of terminating aid the Secretary of the Treasury to relatively unconcerned about the
Under Plan B the Export-Imin 1952 an+d of,cutting
7e?r's Pay checks at regular intervals to continuance of exchange control. port Bank shouid be authorized to
aPPraPria^lon
some 22% below the ambassadors of the recipient and assumes that continuance in make loans guaranteed by Eurof.or, e cu£rent yeaJ- But R European governments. The in- all his own plans. This applies, pean governments that conformed
ERP lstut0 ,run f?r on'y two years effective but much-resented in- f
example
to his oroo osed to half a dozen simple but manda- '
morf. the logical way to taper off terferences of the ECA in the eco- '11 a*a™„
P (°.P,
tory requirements of eligibility
would be to cut the appropriation nomic policies of these govern- clearing union, an institution of unequivocally laid down by Con-
by 0ne-third
Our Futile Exhortations
Tf
was
International
toward
t
d
a
controlled economy
f fnward
a
frp_
T
nn.
*
inr.
operating at a profit,
,(3) If the loan is made to start
.
any
new
enterprise,
that
enter-
aA1 tliese policies dubious, and I prise must be private. Native inMonetary think it still more doubtful that vestors must supply equity capi-
!
<y;
Volume
-f,
171
Number 4892
THE
COMMERCIAL
&
FINANCIAL
CHRONICLE
tal
equal to not less than,
third of the total capital.
(4)
say,
a
to have the
borrow
of this
owners
to buy
money
factory
raw
mate¬
The
guaranteeing govern¬ rials, turn these raw materials into
ment must itself be
operating on a finished goods, sell the finished
balanced or over-balanced budget. goods at a
profit, either at home
V('5)
The
borrowing
country's or abroad, and then not repay the
vblume of money and bank credit loan at all out of the proceeds,
000,000.
would
From
save us
in further
would
our
standpoint,
it
about $1,250,000,000
cash
advances.
And
jt
of
recrimination between Britain and
to
of
source
America
for
resentment
many
This
years.
is
the
The
Great
American
In
Dole
.What
Mr.
Hoffman
is
saying
by permitting free now is, in effect, that our Marshall
aid is in fact mere relief, a mere
exchange rates.
The general purpose of these dole, that it is not sound from a
conditions of eligibility would be business point of
view, because
simply, to put pressure on Euro¬ Europe is not in fact currently
then
at
least
•
pean
governments
to
begin to
make, before the expiration of the
Marshall Plan, the reforms that
they would have to make after its
expiration if they hoped to attract
American private investments.
fit may be objected to Plan
producing the goods out of which
it
could
loans.
He is
Europe
should
and
is
the
repay
saying, in effect, that
on
now, and he
will continue
American
an
is
dole
implying that
to be
on
it
Ameri¬
an
conclusion, I wish to
Members of this committee. could
consistencies
in¬
are
not
only
between
the various proposals I have just
made, but between each of these
proposals
and
certain
general
principles that I have put forward.
I
admit these
they
are
inconsistencies; but
inherent in the
ture of government
to
-
very
na¬
govern¬
-
ment "loans" and
gifts. It has been
said, for example, that to put con¬
ditions on our aid to Europe is
B can dole for at least 50 years
both necessary and impossible.
I
European governments more. I can put no other interpre¬
agree with this paradox.
Its ex¬
would be willing to make the re¬ tation than this on Mr. Hoffman's
istence is merely one of the rea¬
forms necessary to qualify for such contention that
Europe ought not sons
why some of us thought that
loans.
But as long as governments to get sound
repayable loans in¬ the so-called
European Recovery
do not make these reforms, our stead of continued handouts in the
Program was ill-conceived in the
aid to them is misdirected and form of gifts.
first place.
wasted
1
that
few
anyway.
Finally, I should like to suggest
Congress might provide that if what I shall call Plan C. This is
months, say, any not a third alternative; it could be
at the end of six
governments
themselves
allotted to
had
of
the
availed" combined with either A
not
funds
loanable
them, these funds could give
available instead,
be made
der Plan C
in the 000
already established ratios, to gov¬ lieu
ernments
that
did
with
conform
the eligibility requirements;
Plan
A
and
Plan
B; are,
'
>
course,
alternatives.
not
in
the
of
Un¬
would offer to for¬
British
further
Government in
advances
government under ERP.
advances
of
B.
or
entire loan of $3,750,000,-
our
to
we
do
to
that
As these
not
promise to be
$1,250,000,000, in
years in any case, the
than about
more
They could the next two
simultaneously. British
Government
should
be
But Congress could, if it wished, greatly tempted to avail itself of
put Plan A into effect for, say, Isix such a choice.
It would be re¬
months or a year to give European lieved
of
$3,750,000,000 in
in¬
governments plenty
of time to debtedness, and it would improve
adopt the reforms necessary to its net position by some $2,250,make themselves eligible as guar¬
be
antors
effect
for
from
loans
the
example:
might
suggested by the ECA for the full
fiscal year 1951, cut it in half, and
authorize the ECA to continue to
distribute these funds until Dec. 31
of this year.
Its legislation might
then provide that on Jan. 1 of 1951
the
Export-Import Bank would
and be authorized not
over,
distribute
;to
gifts,
but
to
make
loans under the conditions of elig¬
ibility
Congress had laid down.
This
would
give the European
governments until the end of this
year to make themselves eligible
as
guarantors for Export-Import
Bank
loans to projects in their
countries.
from
3
page
{-
this
in which he
actually declared that
it would
"an immoral act" for
be
Congress to extend Marshall aid
Europe in the form of repayable
loans.
He went on to say that "it
to
take
come
.
and
us
50
for Europe to
can buy
for what they need from
service already existing
years
to where she
back
and pay
loans."
Now this is the exact
what
we were
Plan
shall
Then
we
„
was
-
first
proposed.
not for "relief" but
and
"recov¬
The supporters of the Mar¬
shall Plan at that time frequently
compared Europe to a factory that
the building and the avail¬
had
able
from
manpower,
us
to
but needed loans
it to put the
enable
machinery in repair, and pay the
wages and
to
buy the raw materials
Now if this analogy
true one, then, just as
get started.
had been
How
we
can
economical
most
once
way
for
our
taxpayers and most likely to
world
recovery?
How
own
promote
can
taper off the
we
such
a
it to
an
that
way
ternational
program
we
recriminations
and
without making the shock of eco¬
nomic
adjustment
in
1953
too
severe?
is
It
the
toward
solution
of
these
problems that I have
ven¬
tured
to
pro¬
place the foregoing
posals before your committee.
•
ikri
'
'
,
■
Technique
only have the underwriters represented that a
were to be publicly offered at a
specified price, but shortly after the commencement of
such offering they have stated that the issue had been
heavily over-subscribed and that the available supply
which follows:
a
or manipulative
practice,' as used in section 15(c)(2) of the Act, is
hereby defined to include any act or practice of a broker
or dealer v/ho receives a concession from the
public offer¬
ing price in connection with any distribution of securities
registered pursuant to the Securities Act of 1933 or ex¬
empted pursuant to Regulation A under that Act, or who
or
otherwise
participates in any such distribution, which act
practice is effected for the purpose of distributing any
of such securities
'fraudulent, deceptive
of this
the
rule,
mails
state
or
no
of
commerce
tually been sound. In fact, if this
analogy had been a true one, what
really would be immoral would be
public offering price
pursuant to the Securities
or
manipulative' in paragraph (a)
such broker
any
to
dealer shall make
or
use
of
means or instrumentality of inter¬
sell
or
to
induce
or
attempt to
induce any person to
buy, otherwise than on a national
exchange, any security comprising an undis¬
tributed part of any such offering unless (1) the sale or
offer is part of a bona fide attempt to distribute the secur¬
ity and is not above the initial public offering price speci¬
fied in the prospectus or letter of notification, or (2) such
broker or dealer has made a bona fide attempt for a rea¬
securities
sonable time to distribute the
where such sale
to be
or
security at
public offering price. No sale
a
part of
a
or
public offering, or (3) to any
security issued by a registered in¬
within the meaning of the Investment
Company Act of 1940."
Now
comes
the
National
Association
of
Securities
Dealers, via its letter of March 15, 1950, to say that in the
Fall of 1946 this matter
(viz., free-riding) ceased to be of
immediate importance.
The NASD in that letter
through the medium of an*
interpretation (our old friend interpretation) gives to its
members the following outline of their
obligations on this
subject:
"(1)
Members
have a moral obligation to make a
public offering of securities acquired in a par¬
ticipation in an initial public offering. It is the consensus
of the Board of Governors and
Advisory Council of this
Association that, the sale of such securities to
any officer,
bona fide
partner, employee
director of
or
a
member
or
to the im¬
mediate
family of such persons, in excess of their normal
investment practices, except as otherwise
provided in a
prospectus, does not
constitute
a
as
far
as
that member is concerned
bona fide
public offering consistent with high
standards of commercial honor and
just and equitable
principles of trade."
(2) Further: The Board concluded that:
"It is contrary to
high standards of commercial honor
just and equitable principles of trade for a member
of an
underwriting and distributing group to sell all or
any part of his participation, during the period of original
distribution, at a price above the public offering price.
and
For
member of such
a
a
group to refuse to
make,
or re¬
frain from
making, a public offering of all or any part of
his participation in order to make an extra
profit, over
and above his normal
compensation as a member of such
a. group, is also
contrary to high standards of commercial
honor and just and
equitable principles of trade.
"Examples of the types of activity which the Board
of Governors and
Advisory Council believe would appear
to constitute
activity in contravention of the principles of
Section 1 of Article III of the Rules of Fair Practice
"(a) Failure of
a
member who
are:
participates in a public
a
genuine effort, for a
distribution of securities to make
reasonable
period of time, to sell its allotment to bona fide
investors at
prices not exceeding the public offering price.
ticipant's allotment from public purchasers, in order that
the securities withheld may be
disposed of at prices above
the initial public offering price,
regardless of whether
such withholding is accomplished
directly in the partici¬
pant's firm account or indirectly by any of the following
means:
"(1) Allotment to the account of any officer, direc¬
tor, partner, employee or agent of the participant;
"(2) In the account of
family of
no more
or
offer is to
a
or
dealer
controlling, controlled by,
or
under
such broker
to
any
dealer
or
a
or
common
control with
account in which such
a
persons
member of the immediate
specified under (1);
interest;
"(4) Sale to another broker-dealer under any ar¬
rangement or reciprocity with the participant; or
"(5) By any other
of the above ends.
means
designed to accomplish
"(c) Representing to prospective purchasers that the
member's allotment has been
wholly disposed of, when, in
portions of it is withheld from public pur¬
chasers as a speculation, either directly in the
participant's
firm account or indirectly by any of the means
specified
in paragraph B.
fact,
some
"For
the
of this
interpretation the term
'period of original distribution'
is intended to mean a sufficient period within which a
bona fide public offering can be and has been made to the
investing public, and investors have had an opportunity
to purchase the issue at the initial public
offering price."
'initial
purposes
public offering'
Let
us
here have
a
or
resume
of the historical sequence.
(1) The decision of Treanor in 1943.
security
to any person
of the
"(3) In any account in which any person specified
than
partner, officer, director,
any
under (1) and (2) has a beneficial
offer shall be deemed
bona fide attempt to distribute
employee of such broker
or
beneficial
a
redeemable
a
vestment company
any
profit left over, so Europe
could have paid off these govern¬
loans had ac¬
sale of
"(b) In order to prevent any act or practice defined
as
has
letter of notification, by
any person named therein
underwriter, or (2) to any sale or offer of a security
acquired by any broker or dealer more than thirty days
the letter of notification filed pursuant to
or
such
ment loans if those
filed
Regulation A.
could easily have paid
off the loans from the proceeds of
the sales of what it manufactured,
a
above the, initial
specified in the prospectus
Act of 1933
person
"(b) The withholding of all or any portion of a par¬
The Commission, pointing out that it was necessary to
clarify doubts in the financial community as to the pro¬
priety of "such practices," proposed "Rule , X-15C2-3,"
or
such
or
exhausted."
was
any
an
in
really bring
1952, without in¬
in
end
a
stated number of shares
the factory
with
at
since not
of
told that the Mar¬
"reconstruction"
ery."
reverse
told when the Mar¬
was
were
shall Plan
for
these.
are
taper off this program in the
"(a) The terms 'fraudulent, deceptive,
point I cannot avoid
commenting
upon
the extraor¬
dinary testimony of Mr. Hoffman
before this committee on Feb. 24,
will
*
The Smother
act
Mr. Hoffman's Candor
At
face
we
-v.
Continued
Congress
take the amount of appropriations
take
we
United
States under Plan B.
For
we have the program, and
have the implied obligation to
continue it.
The
problems that
But
The British Loan
We Must Exert Discipline
or
after the date of the initial
this.
say
easily point out that there
dealer
or
"(c) This rule shall not apply (1) to any sale or offer
security initially retained for investment, pursuant
specific disclosure to that effect made in the prospec¬
a
tus
as
at all times maintain free convert¬
ibility of its currency,' if not by
going on a gold or dollar basis,
broker
what will be other¬
remove
a
growing fast¬ but continue to receive raw ma¬ precisely
the
opposite
of
er
than its physical
volume of terials as gifts while they were
original purpose of the loan.
production.
paid in full for the finished prod¬
£
(6) The borrowing country must uct.
In Conclusion
t
47
interest.
and
wise
must at least not be
[
(1239)
(
(2) The apparent conclusion of the Commission that
this
not enough and that there existed the necessity
promulgation of a rule on the subject.
was
for the
(3) The revival by NA§D of the subject matter in its
Continued
on
page
48
48
THE
(1240)
Continued
COMMERCIAL
FINANCIAL
&
CHRONICLE
Continued
from page 4T
COMING
a
proposed Rule X15C2-3.
(Philadelphia, Pa.)
Luncheon meeting of Philadel¬
phia Securities Association at the
Hotel Adelphia.
March 23, 1950
free-
background of
whole administrative
riding clearly demonstrates how nebulous is the
phrase "high standards of commercial honor and just
and equitable principles of trade."
March 29-30,1950 (Chicago, III.)
York
New
agility of the NASD in by¬
Southeastern
known it would be disclosed that the NASD is
All bunk!
May 4-5,1950 (San Antonio, Tex.)
Texas Group Investment Bank¬
ers
no
made
pulling SEC
Municipal Bond Dealers Group
Spring Party
and Outing at the Kenwood Coun¬
Iron
Club (to be preceded by a
cocktail party and dinner May 25
for out-of-town guests).
of
1950 (Canada)
Investment Dealers Association
The SEC orders its
of Canada 34th Annual
the
Seigniory
Meeting at
Montebello,
Club,
Quebec.
*
¬
Twin
picnic
City Bond Club annual
the White Bear Yacht
16-18,
June
becomes
1950
view
summer
Lodge,
party at Grand-
Gull
Lake,
June 26-27, 1950
(Detroit, Mich)
Security Traders Association of
the NASD) to dictate what may or may not be done.
Sept. 26-30, 1950 (Virginia Beach,
the Commission's
primarily.
In the NASD there
are
statutory and dictatorial
powers, and
constant reaching out for extensions of those
powers
the acquisition of new
its
and
Michigan, Inc., and Bond
joint summer out¬
golf
outing
at
Plum
Va.)
Convention
Security
at
Cavalier
the
of
Traders
the
The all-time high
It
*6-Dec.
1, 1950 (Hollywood,
Investment Bankers Association
convention
at
19 Con¬
gress Street.
of
change.
Bank
the
Building,
Midwest
the
*
that
William
pat
t
King Merritt .Adds
( p
„
;
1 40 the fraanaal Chronicle)
ftaff
o/King^toritt
Chamber
&
Feb.
on
Jan.
on
output reported for the corresponding
period
two
SUBSTANTIALLY
SHIPMENTS
IMPROVED
WEEK
IN
BY
HEAVIER
ENDED MARCH
revenue
cars,
freight for the week
ended
11
March
11,
according to the Association of Ameri¬
This was an increase of' 133,567 cars, or 23.3%
preceding week due principally to the increased ship¬
Coal
0.2%
loading
amounted
191,978
to
cars;
above the corresponding week
cars
of 133,795 cars above the
week's
below
L.
AUTO
total
represented
the corresponding
a
increase
an
of
and an
year ago,
a
,
preceding week this year.
decrease
of
1,364
cars,
or
week in 1949 and 88,524 cars, or
Compa^y
Buildbig.
OUTPUT
SHOWS
motor
vehicle
panded to
an
production in the United
week's total of 124,563
The total output
and
cars
4,746
cars
1949
ager
of
the
His
associated
since 1935.
Minugh
advertising
headquarters
as man¬
departare
in
the
made up of 103,114
a
total of
with 120,741 units produced in the
week.
and
DOWNWARD
industrial
ago,
failures
in the
declined
to
208
in
Dun & Bradstreet, Inc., reports.
exceeded the
below
the
106
similar
in
the
week
similar
of
1939
a
For the second time
1948 week.
prewar
the
preceding week and 210
this year, casualties were below the comparable 1949 level.
Failures
when
298
They
were
30%
businesses
succumbed.
Mr. Minugh has been
with
was
and ly681 trucks built in Canada.
week ended March 16 from 221
ment of Louis E.
ex¬
(revised) units.
for the current week
25,014 trucks built in the United States and
Commercial
year
States and Canada
estimated 134,555 units compared with the previous
BUSINESS FAILURES TURN
is made by the
LATEST
IN
According to "Ward's Automotive Reports" for the past week,
Batt,
First Boston Corp., 100 Broadway,
New York City, of the appoint¬
EXPANSION
FURTHER
WEEK
Of First Boston
New York.
of Commerce
attained
was
of coal.
ments
The
Miniigh Adv. Mgr.
ment.
£ Dean
Witter & Co., Patterson
s*
which
totaled 6,041,158,000 kwh.
The week's total compares
Announcement
*
^Special to The Financial Chronicl#
VT?lTCTvrr>
the
Increase
Ex¬
7
Joins Dean Witter
Electric
Railroads.
can
Holly¬
President of SKF Industries, Inc.,
will be guest soeaker at the As¬
mem¬
Stock
Edison
78,741,000 kwh. higher than the figure reported for the
kwh., or 9.5% above the total output
week ended March
19, 1949, and 869,897,000 kwh. in
of
wood Beach Hotel.
nounces
ST. LOUIS, MO.—-Paul F. Craig
now with Fusz-Schmelzle &
Co.,
bers
the
to
11.1% under the comparable period in 1948.
Heimerdinger Dead
Boatmen's
kwh.
The previous high
above the
Fla.)
annual
according
record output in the industry's history
6,062,095,000
Loadings of
like
is
*
was
the
(Special to The Financial Chronicle)
MASS. — Lucius T.
Hill has been added to the staff of
Co.,
to
COAL
dress.
(Special to The Financial Chhon icle )
ago
years ago.
Fusz-Schmelzle Adds
BOSTON,
t
21, 1950.
Hotel.
sociation's luncheon today at the
BOSTON, MASS.—Avigdor
Morgan is with J. H. Goddard &
Hotel Adelphia.
Heimerdinger, until his retirement
"The United States'
eCo.# Inc., 85 Devonshire Street, in
Stake in
1947, was a partner in Emanuel
members of the Boston Stock Ex¬
the Foreign Economic Situation"
& Co. and its successor.
will be the topic of Mr. Batt's ad¬
change.
Joins Wood, Struthers
kwh.,
6,015,327,000
4, 1950.
Na¬
PHILADELPHIA, PA. — Newlin F. Davis, Jr., Kidder, Peabody
& Co., President of the Philadel¬
phia Securities Association, an¬
Frederick M. Heimerdinger died
M. at his home
at the age of 53. Mr.
•
year
a
<
was
Associa¬
To Hear Bait
grabs?
F. M.
rate
of electrical energy distributed by the electric
industry for the week ended March 18 was esti¬
CARLOADINGS
Annual
Phila. Sees. Assn.
(Special to The Financial Chronicle)!
Wood, Struthers &
at
excess
an
Joins J. H. Goddard
the
ago
Institute.
52,897
indignant industry rise to the dig¬
nity of maturity and make itself heard in opposition
to these power
mated
power
for
and
Hollow.
replace fear
„of reprisal, and
amount
ing
ones.
Where and when will this juggernaut be
stopped?
When will courage in the securities field
f
The
previous week, 519,558.000
Nov.
month
A
ago.
,
% and 1,863,800 tons^ and for the average week
in 1940, highest prewar year, at 1,281,210 tons, y /
;
1950, totaled 707,962
finding themselves hamstrung through
week
one
Club of Detroit
tion
fine elements
tons
*
it stood at 101-1
amounted
Detroit &
some
1,711,800
near
sticky, these participants are ex¬
pected to takfe their losses. However, when there is a sound
market and a chance for real profits, in come the two
policemen working out of the same precinct (the SEC and
We blame the SEC
to
light and
Brainerd. Minn.
lative functions.
this
SET IN WEEK ENDED FEB. 4
City Security Traders As¬
sociation
tional
Institute announced
95.5% of capacity for the week beginning March 20, 1950. This
an advance of 5.7 points from last week's rate of
89.8%.
Output this week will be the highest since the week of
April 11, 1949, when production reached 1,828,800 tons. *
This week's operating rate is equivalent to 1,820,500 tons
of steel Ingots and castings for the entire industry compared
KMinneapolis,
Minn.)
Twin
These administrative groups create new definitions of
fraud, thereby assuming and usurping non-delegable legis¬
Steel
and
rate of steel companies having 93%
capacity for the entire industry will be
Is
•'
,
an
term it,
Iron
that the operating
the steel-making
ELECTRIC OUTPUT APPROACHES ALL-TIME HIGH RECORD
\
underwriter and his partners contract to dispose
issue on a firm basis and that issue goes sour or, as
American
The
week
at
Club.
giving ugly and misleading names to per¬
fectly proper procedures.
The primary distribution of
securities has a long and well known record. Trade cus¬
tom and usage have clearly defined the incident practices.
some
Age" concludes.
88.8% and production amounted to 1,692,800 tons;
June 14, 1950 (Minneapolis,Minn.)
We decrv
an
are
helping keep warehouses cleaned out and snapping
occasional surplus stocks from less active industrial plants.
They report that dealers' stocks of appliances are below normal
for this season and that factory stocks are practically zero, "The
May 26, 1950 (Cincinnati, Ohio)
June 5-8,
the NASD, at will. The Commission gets
pretty much what it wants in the form that it desires,
always remembering that it has life and death powers
over
any
Maloney Association. Therein lies the
viciotisness of the Maloney Act. Because of its struc
ture there can be no independent* securities associa¬
tions under it, but-only subservient ones.
of
up
try
progeny,
When
makers
of Cincinnati Annual
by the Commission's direction.
difference/
Association annual meeting at
the Plaza Hotel.
are
There is
may
trade
,
I
being made to allay the opposition
oi the securities field by declaring that in the absence
of an NASD interpretation there will be an SEC rule,
and that the former is to be preferred to the latter.
Attempts
Association
Inn.
rise to the Tatter's "free-riding" in¬
terpretations circulated March 15, 1950. We believe that
chestnuts out of the fire
big
by
was
undoubtedly fade after June.
disappear completely within the following 60 days, this
authority states.
But the auto makers insist that if this ^
happens it will be because of better supplies from the mills and,
not because of a big reduction in auto production schedules.
The appliance industry's impact on the steel market is out
of proportion to its tonnage requirements because the type. of
steel it needs is the type in shortest supply—sheets.
Appliance
It
the In¬
Group of
Spring Meeting at the Sedgefield
the NASD which gave
were
Until recently most conversion
ing in for tonnage.
•
firms.
Bankers
vestment
Here again we would like to know what inter-official
and other conferences there were between the SEC and
conferences
of
the
April 28-30 (Greensboro, N. C.)
-
camera
at
are
Conversion by auto makers will
again. Contrary to the SEC contention that to over¬
"free-riding" a rule is necessary, the NASD is up
its old hocus pocus which in our belief is SEC inspired.
en
implement builders. They have enough steel to keep.their operations at capacity, but are still scurrying about, making certain
they don't run out.
This week there is more conversion activity than there has
been since the early part of 1949. And it is increasing. A care¬
ful check by "Iron Age" editors in widely separated points shows
that conversion has been on the upgrade for the past several
weeks.
This is due mainly to medium-size and small firms com¬
Waldorf-Astoria.
come
of these
dinner
those people applying pressure to the steel
the auto makers, appliance manufacturers and farmamong
market
(New York City)
annual
' '
.
Foremost
little,
a
clear out of sight, this trade authority points
of
Bond Club of New York annual
April 21, 1950
well stocked, with goods, warehouses
are
full, supply lines clogged and consumer buying slows just
at
dinner at the Waldorf-Astoria.
passing its membership by avoiding a rule and interpreting
its members into the "5% spread yardstick."
Here we
if'the facts
conference
Spcurity Traders Association
You will remember the
to
annual
March 29, 1950 (New York City)
adopt this rule. The NASD through the
interpretation of its Rules of Fair Practice
seeks'to vitalize the abandoned "free-riding" rule of
an
the SEC.
go
Association
Bankers
ment
America
still wary of the market.
To
Bitter experience has-taught them
are
out.
The Drake.
lates but does not
now
when retail stores
that
Central States Group of Invest¬
rehashing of the old legerdemain, "Now you
see it. Now you don't."
First the Commission renders a
decision by the Director of its Trading and Exchange Di¬
vision. Then it thinks a rule is necessary. The SEC circu¬
a
medium of
practically nonexistant.
The steelmakers, however,
them, it is too good to be true.
steel orders can drop
•
Industry
interruption of production, but at present the outlook is for
high rate of uninterrupted steel production with cancellations
an
Field
Investment
of the passage of
letter of March 15, 1950 in the absence
It is
5 '
page
The State of Trade and
EVENTS
In
-
from
^
The Smoihei Technique
The
Thursday, March 23, 1950
Fewer
corporation
The
businesses
failed
than
last
year
in
nearly all
areas.
only district having more failures was the Pacific Region,
Volume 171
"Number 4892
COMMERCIAL
THE
FINANCIAL
&
CHRONICLE
(1241)
while
the
South Atlantic
from 1949.
Mountain
and
States
unchanged
were
■J
don't go up
:
Tomorrow's
WHOLESALE FOOD PRICE INDEX DROPS TO LOWEST
LEVEL IN FOUR WEEK PERIOD
-
.
=
WHOLESALE COMMODITY PRICE INDEX TURNS IRREGULAR
AFTER
REGISTERING
NEW
HIGH
YEAR
FOR
Bankers
EARLY
down
and
movement, the daily wholesale
commodity price index, compiled by Dun & Bradstreet, Inc., closed
at 249.45 on March
14, after touching a new high for the year early
in the week.
The latest figure compared with 249.79 a week earlier
up
and with 256.34 at this time
Wheat
a
year ago.
market
showed
favorable
activity
Electric
ing
«
further
continued
strength
reports from the
crop
to
last
expand
influenced
largely
week.
demand
large
continue for
time.
some
Interest
which
domestic
flour
The coffee
estimates for the Brazil crop
procedure
of
in
called for meet¬
around
a
important points at
of
the
issuing
the
Securities and Exchange
Commission
exempted this
un¬
dertaking from compliance with
Improved demand for lard reflected its relative cheapness
: as compared with competing vegetable oils.
Liberal hog receipts
? exerted a downward pressure on prices in the Chicago livestock
/ market.
Steers were steady to slightly lower for the week. Lambs
bidding, presumably by reason
of its large size, and permitted
Lard prices were
on
the rule calling
hogs.
declined
sharply in late trading after touching
new
for competitive
issuer to "shop around" for
the
seasonal peaks
Five groups were interested and
their bids ranged from a high of
Cotton
prices again moved lower following irregular fluctua¬
during the week.
Weakness was attributed to profit-taking
attracted by previous advances, speculative liquidation influenced
$22.81
a
share
$20.75
a
share.
by easiness in
offering price of 24Vs with
tions
securities
RETAIL
TRADE
IMPROVED
cession
RETURN
buying
return
a
of
seasonal
to
scious
localities, retail
Wednesday of last
many
slightly in the period ended on
week; over-all dollar volume was slightly below the level for the
comparable week in 1949, according to Dun & Bradstreet, Inc., in
Easter
trade
yet.
as
little evidence of
was
The continuance of
some
strikes
a
tion
and
spring hats helped
to
the
is
the
brisk.
be
to
more
bond
con¬
accompanied
for
on
•
has
successive
since
the0 turn
again
became
of
,
is
demon¬
occasions
the
and
year
with
apparent
the
present offering of 400,000 shares
in
of
of
stock
common
Utili¬
Texas
week
previous but
larger
a
unit
volume
than
in
ties Co.
the
Put
increasingly price«conscious.,
were
this
Buying of housewares rose moderately last week, as did floorcoverings and electric appliances with television sets continuing to
be among the largest-selling items. The demand for furniture fre¬
quently increased where it v/as promoted with generally less
interest in
Total
of
day
below
retail
last
of
a
dollar
week
that
levels of
goods than in
case
a
New
estimated
the
to
—1
to
lines.
unchanged to
estimates varied from
Pacific
South
—5;
Coast
+2
Southwest
and
along
0
and
—4,
and
to
There
was
with
buyers
at
below that of
many
a
wholesale
the
a
a
a
*
*
*
At this
country-wide basis,
no
change
was
decline
of
but
it
1%
from
the
as
Potential
year.
11,
this
In
the
year
ago,
a
was
1950,
fell
an
of
Four
with
lower than that for
2%
New
York
from the
advance of 1%
week of 1949.
2%%
City for the weekly period to March 11,
like
period
(revised)
last
was
year.
In
the
was
preceding
of 4% was reported from the like week of last
year.
For the
As I've stated time and
bear.
I'm
profits.
in
a
this
for
bull
the
nor a
thing for
When the chances of
making it lessen I let some¬
to body else do the worrying.
as
such
extra-sensory
[The
time
*
thfo
any
those
They
are
Reynolds & Co. Places
*
-
have little in
*
in
necessarily at
with
of the
presented tm
those of the author only.J
Privately Securities of
AffiL Gas Equipment
There's little doubt that the
much
expressed
not
coincide
powers.
majority opinion at this writ¬
ing favors the bull side. To
this I say, fine.
The more
people there are who are
willing to buy them the
higher the market will go:
Sentiment and realism, how¬
ever,
do
Chronicle.
Anyway I haven't.
:;<
views
article
common.
*
dawdling the
Lyle
C.
Harvey, President of
Equipment, Inc.,
Affiliated
Gas
this month announced that
a
small
of investment trusts and
private investors had purchased
group
»
from
this
sale
corporation
at
private
issue of 200,000 shares of
its common stock (par $1) at the
an
purchase price of $10.65 per share
and that the corporation recently
obtained an additional $1,100^000
familiar averages went up to:
long-term loan from three insur¬
a new
high for the year. So ance companies, viz.: The Massa¬
far so good. It gave the long chusetts Mutual Life Insurance
promise that so many Co., the Penn Mutual Life Insur¬
ance
Co. and
the State Mutual
waiting for. But present Life Assurance Co. This financ¬
markets act differently ing was arranged through Rey¬
awaited
were
day
from
those
of
some
When
us
were
raised
on.
goes up
today and establishes
high for the year, it
market
a
a
new
must have sufficient
momen¬
nolds
The
&
for the
at
Co., investment bankers.
proceeds will be used to pay
plant of the company
new
Indianapolis,
equip¬
its
Ind.,
ment, and for additional working
finance expected
capital to
according
sales
Mr.
follow
through the next and the next
day. If such momentum fails
to
materialize, the whole
expansion,
Harvey.
thing is suspect.
this loan was reduced by
$200,000, thereby leaving a total
balance of $4,900,000 outstanding
tum
stored
up
*
to
At
ories
this
term loan of
point various the¬ in insurance company loans, in¬
paraded to justify cluding the recent addition.
be
can
I
theories.
no
previ¬
granted Affiliated a long$4,000 000. In Febru¬
ously
ary,
*
predetermined belief. I have
a
to
The insurance firms had
have
a
desire
buy them before they go
ride them on the way up
and step out when there are
enough buyers around to let
me out with a profit.
If they
According to Mr. Harvey, "sales
currently is more than
20% ahead of the same period in
volume
1949."
and
in the
case
a
bit
this
new
on
first
a
sought the issue
syndicate
price of 102.4352 for
this
and
•
Per 100 Shares Plus Tax
U. S. Steel
...
a
The spread be¬
the
lowest
bid
•
Youngstown Sh. @87)4
@45)4
Amer. Distilling @ 37
Intl. Harvester. @ 26) £
Homestake Mi. @ 45)4
Kennecott Cop. @ 50)4
Doug. Aircraft. @ 78
6
90
90
85
85
85
60
mos.
days
days
days
days
days
days
Schenley Indus. @ 30) g 66 days
Amer. Woolen
@ 23% 55 days
.
350.00
337.50
375.00
212.50
250.00
337.50
487.50
200.00
175.00
for
reoffering at
Pacific
Members
New
New
York
Stock
York
Curb
Exchange
San
Francisco
Chicago
*
yield about 2.73%, the issue was
'reported to be
•
side.
'
'•
a
little
on
the slow
:'r"
-•-
Members
Put
&
Colls Broker* *
Dealers Attn., Inc
50
Prtvalt
Broadway, New York 4,Tel. BO 9-8470
Trade
Teletype NY 1-M0
to
Principal
..San JRrancise©—Santa
(•
Mssociote)
Exchange
of
New York 5, N. Y.
7-4150
Wires
Exchange
Stock
Board
14 Wall Street
THOMAS, HAAB & BOTTS
•
Coast Exchanges
Schwabacher & Co.
Subject to prior sale or price cnange
102.95 to
Executed on
Orders
@ 33)4 170 days $>12.50
135 days 725.00
Cities Service.. @ 71
J. I. Case
winning
Securities
SPECIAL CALL OFFERINGS
was
of Appa¬
30-year,
Pacific Coast
OOrtlanot
year
'W .VM
time
a
bulls.
again, I'm neither
satisfactory as
happen next.
Unfortunately (or fortunately
—depending on what side of
the
fence
you're
on)
we
haven't been provided with
about $2.11 a bond.
Set
registered from the similar
.to date volume.decreased by 6%. '"zn;
slack
mean
of
issues
been
side
coupon.
tween
For the four weeks ended March 11,
1950, a decrease
have
groups
the
paying
According to the Federal Reserve Board's index, department
week
again
Recent
mortgage bonds.
1949.
store sales in
offerings of top-
new
nature
000,000
but
drop of 4%.
comparative basis dollar volume
up
bonds.
lachian Electric Power Co.'s $25,-
Activity marked retail trade in New York last week, but
on
buyers do not appear
sluggish
true
11, 1950, sales reflected
a
pick
grade
taken from
week ended March
corresponding period
for the year to date show a
quickly.
in any great haste at the moment
was
registered from the like week
For the four weeks ended March
big
*
another pos¬
know what will
share
the
*
still
up,
The number
slightly,
decline of 1% from the like period of last
preceding week
indicated
Reports
buying isn't
the selling
or
that
to
to
on
Reserve Board's index for the
1950, showed
of 1949.
rose
a
50-cent concession to deal¬
a
Appalachian Electric Power
year ago.
Department store sales
the Federal
centers
*
is
pe¬
suspicion
a
higher lev¬ into another period of dull¬
everybody was so ness though at a higher level
Whichever happens it will
long waiting for.
els
share and fixed
a
Scattered trade
ordering.
of
$24.27
block of shares moved out
appreciable change in the dollar volume of
during the week.
However, it was slightly
1949.
the
paid
group
reoffering price of $25
ers.
above the level for the comparable week in
shows helped to account for the sustained
line.
successful
company
no
orders
much
the
fol¬
dull
climb back to the
♦
the
East
bids
pretty
the sale
The
4%
Midwest —2 to —6.
wholsale
thinking
were
a
—2;
to
five
attracted
indicating that the competitors
Wednes¬
on
from
ago.
Regional
by the following percentages:
and
block
Tuesday,
on
with the range of prices offered
.
period ended
be
year
England
Northwest
volume for
was
ago
year
upholstered
for bids
up
turn
signal for the market sibility. Instead of a straight
off its haunches and up move the market will go
,
bought
either
There
long
.
Housewives
that
up on
the
was
in
protracted
the rounds that
This
*
equities
been
a
up
After
gainsaying the fact
no
market
This
strated
the
raise
it.
"backdrop."
proper
There
general level of men's furnishings.
The dollar volume of retail food purchases remained
steady
week.
/
* ;
i *.
\
than
to
appears
that
Shoppers bought slightly more apparel than in the previous
Ready-to-wear dresses were favored, as were women's
sportswear and accessories; the demand for coats and suits was
practically unchanged. Men's shirt sales were greater and the pop¬
neckwear
con¬
a
share
a
Stflcks in Demand
week.
shoes,
cents
re-
momentarily, the distribu¬
the
by
to
served
get
of
a
investors seemingly
sizable
inhibit sales in scattered communities.
ularity of
85
"stock-minded"
weather
There
of
With
VOLUME
DOLLAR
TRADE
rose
its current review of trade.
low
a
SEASONAL
OF
SLIGHTLY ABOVE 1949 WEEK
With
to
The group which
dealers.
BY
WEATHER—WHOLESALE
down
captured the business plans
markets, and continued dullness in the
*<•
goods market.
to
bids.
at mid-week.
cotton
went
was
seldom
The
West African cocoa had been
somewhat firmer despite weakness in
lowered.
this
which
move
strong enough
Immediately the is too strong.
up-side.
stories
distributors with the
cess.
market developed a weaker tone as
for this year were revised upward. ° Cocoa registered further de¬
clines the past week as,the result of liquidation prompted by re¬
ports that the British asking price
huge
the
whooped it
-
*
,
riod, gives rise to
salient facts about the company.
remained slow, while
market
a
lowed
was
and
*
today.
Any hesitation at this point,
particularly when it follows
point I could inject
a
self
congratulatory note
This phase of the operation is
with an 'T told
you so." And
already underway and should go
it isn't modesty that
a
long way toward simplifying
stops me.
the operation and assuring its suc¬ To be
right on the market is
in oats increased
fairly substantial volume.
a
has
these
dealers
officials
iarize
firmer; improvement in the cash market stemmed from
revival of shipping demand from Eastern and Southeastern areas,
together with lessened competition with Canadian oats.
the
an¬
trums
comoration would seek to famil¬
a
Business in
*
Such is the situation
By WALTER WHYTE=
The ink
awaited
case
with
number
with prices
buying for export reached
tak¬
are
which
of
successful
ings
Mid-week strength in the yellow cereal reflected re¬
hedges against export sales and the belief that export
will
firm
several
the latter
Corn prices finished about even with a week ago although the
market tended to drag at times as the result of increased country
of
subsidiary,
from the book of
page
The
export.
offerings.
the
undertakings.
Southwest and the allocation
by the ECA of additional funds for the purchase of wheat for
moval
a
Co.
handled
less
by
handle
to
Philadelphia Co., Standard Gas &
other
Grain
Whyte
hardly dry in
marketing of 2,000,000 shares of
last week's column when the
Equitable Gas Co. of Pittsburgh,
Pa., which are being sold by The market staged one of its tan¬
IN WEEK
Continuing its
slated
quick look
them is
Says—
the like date two years
on
ago.
a
what's
stocks too, then I
step away.
Walter
above the comparable 1949 index of
$5.79, but it represents a de¬
cline of 13.3% from the
I take
to
as
stopping;
them, and if what's stopping
enough to stop other
Markets
The wholesale food
price index, compiled by Dun & Bradstreet, Inc., dropped four cents this week to stand at $5.81 on March
14, the lowest level in four weeks.
The current figure is 0.3%
$6.70 recorded
around
49
Office*
Barbara
-Monterey—Oakland—Sacramenta
Fresno—Santa Rosa
50
THE
(1242)
Thursday, March 23, 1950
CHRONICLE
FINANCIAL
&
COMMERCIAL
'« -
j»r
Continued
jrom
page
5
investment operations a
its
make
to
.
These
.
.
Mr.
Javits contends
it will take
just
must
we
wouldn't be more
on
technical
skills
league")
to achieve a "Pax
trillion-dollar financing job
Our author's thesis holds that our
should
done in
be
every
of the world; first enriching such
area
key industrial nations as the United Kingdom, France, and Italy;
branching through the underdeveloped nations as India and
Brazil; and then flowing through the world in a sort of focal-point
chain reaction.
swer.
parentheses surrounding the United States Treasury above
Mr. Javits'.
But the program's proponents must face the
fact that irrespective of whether such indication of it as ful¬
filling only a minor role in the bill-paying function is justified
or
not, there can be no question that at least the paymentcurrency will be dollars.
Moreover, those dollars cannot be real
money with quantitative backing,
but merely promises-to-pay
whose multiplication to trillions must at least make important
the
question of their continuing stability.
Other currencies'
greater deterioration than the dollar, does not furnish a preven¬
tative against future spoliation of the absolute value of the dollar.
Already the American dollar is not even as hard as the French
franc, whose owner can now ascertain and realize its real value
by exchanging it for gold in his free and open home market.
one
follows his skepticism or not,
at least the view¬
Lawrence should be carefully
point expressed by Joseph Stagg
weighed:*
these
various
of
good
deeds
rather careless with the billions upon which a
have been
happier future
been extremely cautious.
America®, public with what kind
of money these bright castles in the air are to be Jt>uilt
Is
this future to universal peace and prosperity paved with real
money or with Chinese dollars?
The question may denote a
lack of enlightened vision.
It is undeniably pertinent."
they
rests,
in
have
respect
one
None of them has told the
Surely
fundamental
a
element indispensable
nomic recovery is maintenance of the
are
as
world
eco¬
climate
cussions
called "blue¬
well as details
&
Co.,
Lynch & Co.,
to
dis¬
initial
the
that
looking
consolida¬
a
the copy;
back
little
There
great
for
was
little prospect of any
Merrill.
Mr.
And
risks, for it
nished
profit
personal
of
amount
there
were
not
was
investment which
he
make
to
of its
share of any
'
•
leave the im¬
do not want to
I
am
also worried over global programs on the score that
promulgation will divert the public's attention from the truly
pressing problems which are confronting our officials who are
busy defending us against foreign aggression 24 hours-the-day.
TVA projects on the Jordan may be desirable for the future;
situations
now are
like
China
last
the
and
year
the immediate and truly crucial
Battle
for
Berlin
problems.
"Business
of
we had
advertisements
in
his
that
principal motive
that
of view to
firm and
a
belief,
a
an
industry
transfusion.
prodigious personal
Mr.
task
no
serious
few
Merrill
heart
he
attack
this
into
threw
contributed
doubt
years
effort
to
a
suffered
later. While he has
npLfceen^^ivje in the day-to-day
direction of our business for over
fiv^years, he is still consulted on
major policy matter, and we
every
Boss. So many
Merrill
him
thing§*we do today
originated in
realize
to
The
as
Lynch
his mind that I want you
men
of
the
of
is
fortune
good
our
gentle¬
much
that
and
I
'have
been
advertising
since
a
with
concerned
Promotion
Sales
and
1940. For the
past year and
half, I have also been responsi¬
ble
all
for
activities
sales
exclu¬
most
My title is
Division
Director
in
charge of
Sales. It is my job to get as large
one
licenses.
ECA
Administrator
Paul
Hoffman's
commendable
at¬
tempts to get some of these obstructions to recovery eliminated
by bribery have proved largely futile, because of the political con¬
siderations.
Would not the dumping-on of more dollars to the
tune of trillions and without any strings
attached, further sabo¬
tage Mr. Hoffman's, the International Chamber's, and all others'
constructive efforts to restore the
and freedom?
i
world's
sanity, order,
Mr. Hoffman has been working like a beaver to
bring about
million increase in our imports which he feels is
the $300-$500
which
tariff
reductions
domestic labor and
the road to solvency in the face of
in
would
business
this
country's domestic economy
entail.
interests
The
importance
relative to
covery, and the possible use of subsidization
Government to care for local
of
our
worldwide
re¬
by the United States
questions vitally
concerning' Mr. Hoffman and Secretary Acheson. As a means to
establish equilibrium by
1952, they have thrown out the suggestion
that, if lowered tariffs would damage domestic manufacturers too
difficulties,
are
severely, the government might accept the financial responsibility
of aiding transfers in lines of business. Should these
questions not
only occupy the consideration of the Javitses?
Likewise, the conflict of
the
concept and
operations
a
of
as
of
Four
assistants
those
are
partners.
One of
early decisions
our
was
fresh global credit program with
the International Bank and .the
entitled
were
had
fared,
to
how
know
we
so
customers
our
published
we
our
publishhelp
first
objective
business
thinking
stood
can't sell
customers
was
in the
passed
out
to
in-'
our
Balance
Sheet, a
&
Loss
Statement,
and
operating data together with
the statement that we had paid
$140,000 for advertising.
a
Profit
other
Fortunately for
ing
years
But
even
have
hoped
that
It is to be
proponents of "Peace by Investment" do not
want
the
we
succeed¬
profitable.
been
if future years show a
will continue to publish
same
kind
creased, until
do
to
salesman
a
get in to see a prospective client
than it was ten years ago. Advert
tising has contributed
ally to that.
While
of
source
substanti¬
.
all know that the befit
we
in
customers
new
our
kind of business comes from lead*
supplied
by
in
customers,
close
second
mers
who
the
are
come
result of
a
presently satisfied
Merrill Lynch > a
to
custo4
new
directly
us
advertising.
■
under¬
don't.
They
a
Chevrolet
doesn't
automobiles.
of
,
know
or
It's
just as obvious
going to become
customer of Merrill Lynch un¬
no
is
man
he
understands
what
stocks
and bonds are,
how he buys them
them. A good deal of
sells
and
advertising is designed to
provide him with just this simple
our
information.
Perhaps
Some
outstanding
most
effort
we
tion
the publication of a fulladvertisement last year in
have made in this direc¬
was
page
In this advertise¬
newspapers.
took
we
idea
these
open
counts
a
our
some
6,000
the
of
to
words
basic
ques¬
year.
gross
In 1948, one-thir^
income came
customers whose names
Only one-third of our 1948 income
came from
people who had beep
on
books five years or
our
Therefore, I know that
business day, and we rely on
paragraph
offer
the
to
ad
of
send
or
to
a
this adver¬
Buried
in
the
last
the copy was an
either a reprint of
copy
Invest."
of
our
This
booklet,
minimum
offer produced requests at almost
the lowest cost-per-inquiry in our
saying in effect, "Why didn't some¬
body tell me this before?" This is
an
outstanding example of our
campaign,
other
our
dertake
to
but
many
advertisements
explain
un¬
something
of
how the securities business works,
how a broker can and should be of
help to the investor.
Our merchandising ads in
trast
to
our
ad,^
with that jofy,
salesmen are eager to follow
up advertising leads, and I hav$
yet to speak with one who doek
not say they are a constant
atujj
productive source of business. ■
vertising to help
us
Our
At the IBA Convention in Hol-t
a
waif
last December there
advet|
report on a cooperative
tising
venture sponsored
by aj
group of firms here in Philadel¬
phia which was highly provoca¬
tive in the
obtained.
results that had
been;
absolutely
conA
I
am
there
vinced
is
wiant
had.
longer
musft
we
lot of new accounts every
a
open
tions about the securities business.
tisement
hadbeqft
books less than two year§f
our
You would be amazed at the
degree of readership
importance ol
real¬
following figures:
[U|
about 50,000 new ac*
of the people of
high
accounts*
new
the
accounts may be
ized in the
We
open
of
new
lywood
the
'3
firm like
a
simply must strivd
we
constantly to
a
about
that
ours
on
■
Striving for New Accounts
It is fundamental in
of
as
.
great
a
segment
this country who
make. security
to
invest-^
overly sur^
prised that the Philadelphia exTt
periment had proven so successful.!
ments,
I
so
Another
not
was
speaker at the Holly¬
wood Convention
was
Dr.
Likert,
conducted
the
Survey of
Finances for the Fed--
who
Consumer
that 69%
showed
with
incomes
year were
in
reasons
we
of
This Survey
the families
$3,000
over
stocks.
The
for this attitude
stocks
common
that
with"
of
they
them.
have
per;
opposed to investments
common
and
Board.
Reserve
eral
were
were
These
principal
that
were
"not
safe,"
"not familiar
are
the twins
with in broad¬
market: Ignorance and
to
cope
ening
our
Fear.
I don't know how much
can
do
we
about
Fear, but we cer¬
con¬ tainly
can do something to en¬
educational ads, are lighten people about our business..
rlJ
us, our
advertising expenditures have in¬
of that institution
or
axiomatic that you
man
a
he
if
Ford
guilty
everybody
business.
seems
of
included
we
constitution, showing that the basic
purposes
the
educational
been
that
our
it
Now
educational
and
loss,
identical with the investment aims of Point IV.
have
Report,
Export-Import Bank should be taken into account. This .column
has previously cited the preamble to the International Bank's
are
accomplish
are
institutional in nature. We in this
15
ut
and
want
is far easier for
it
our
First Annual Report. I wrote that
formation
them
.
spend some money on adver¬
tising. During the nindA months records. More importantly, how¬
of operations in 1940, we ended
ever,
it produced letters from
up with a loss of $308,000. Mr.* hundreds and hundreds of
people
Merrill decided that
,
second, to make
so through pur
firm.
Perhaps it is true for the
entire industry — certainly
it is
true at Merrill Lynch—that today
securities,
have two
we
objectiv®phaturally is to persuade
them to
|fe ;their investing through
firm|mdvertisements that we
less
a
advertising,
per
objectives. Our first objective is
to sell people on the idea of in¬
vesting jf% securities. The second
"How
to
...
necessary to get Europe on
the "pin-point" dislocations
business
listed
the
possible, and also to inspire the
our 900-odd regis¬
representatives in over-thecounter business, new issues, trad¬
ing, etc. I have five principal
assistants, each in charge of a
Department, which we call OnBoard, Off-Board, Trading, Ad¬
vertising and Sales Promotion.
recovery
Our Tariffs Another Immediate Problem
*
of
advertisement
new
advertising
our
answer
exchange control, bi¬
multiple currencies,
double-pricing, raw material
price fixing, and import quotas, prohibitions, and
share
In
real sense such advertising
accomplishes both our educa¬
tional and our merchandising Ob¬
.
In
ment
a
what
another.
done for
have
very
business day.
commodities.
of
a case
in which we review
study
we
different
288
different layout, which is al¬
tered
lateralism,
allocation,
2,774 separate
119 advertisements in
newspapers,
that
Sales Promotion
Advertising and
sive
worlds—as
copy
30
sorely in need of such
were
that
a
was
em¬
he;could bring a fresh point,
which
a
Merrill
Mr.
sales efforts of
the
full
a
office.
own
our
1949;
communist
shocked
and
assistant, and all of the
is written in
Also adoption, or even merely public consideration, of greater
global give-away at this time seems to be particularly harmful
in pushing back the chance for getting foreigners to adopt the
reforms which are so crucially needed.
I refer to their con¬
tinuing totalitarian techniques—whose introduction by Hitler and
Russia
Week,"
general magazines, and 230 in¬
barked on this adventure in the; sertions in 62 trade publications.
spirit of philanthropy. It is only We used 235 entirely different
different
fair, however, to emphasize that advertisements,
copy,
pression
their
but
alleged "dignity." Today we
Advertising Manager who
time was Managing Editor
an
one
In
deficits which might
occur.
at
time
largest
the
up
the; tombstone advertisment
acquired some mystical ac¬
ceptance usually on the grounds
had
have
be called
that he would
knew
upon
Very
make this offer through
not particularly jectives in one ad.
Merrill
Lynch
are
since
fur¬
principal amount of
capital for the new firm, but also
we
man's
often
any
situation.
investment
is
instance,
Research
our
reviewing
on\ it today. There was so therefore, has the objective;, of
first, making people want to buy
precedent for us to follow,
only
the
Lynch
in
proud of ; that copy when we look
a
I
Division
for
We
we get is from the kind
advertising which we use'itt)
offer the services of
scheduled at the rate of $35,000 a
month, dr $420,000 a year.
In thel early days, Mr. Merrill
and others of us actually wrote
organizations took place.
primarily due to him.
Distraction
of
Pierce
budget,
tion of his interest in these three
credit
Disadvantage
A.
Inc., and Cassatt & Co. It was in
at
in.The
E.
substantial in¬
all continue to regard
strength of the dollar.
As with so many other programs which
prints," this book leaves some crucial elements
still to be filled
to
a
in Merrill
and also
The
authors
had
in
his initial
The
"While
vestment
grave
Dollar Blind-Spot
The
Whether
Merrill
this
this super-spending ex¬
travaganza? "The money should come from private American
financial and industrial corporations (with the aid where neces¬
sary of the United States Treasury), the World Bank and Fund,
the Export-Import Bank, or through
a World Reconstruction
Authority perhaps to he managed by the UN," is the Javits' an¬
"the money" to come for
Whence is
are
Mr.
business.' 1950
securities
the
in
us
seri¬
are
sponse
of
At Merrill
of
who
ously considering the purchase of
them.
The highest quality re¬
Merchandising Secuiilies
Americana."
to
apt
are
the securities mi
own
those companies or
(:
9
page
the world spent two
1939
from
from
hands—not in those
prosperity.
We must use our credit facilities and
on a big-time scale
(not in the Point IV "minor
and
peace
Continued
responses
almost entirely from people
either
who
to 1946; he asks whether it
sensible to spend the same amount in 50 years
slaughter
on
nies— the
come
Quoted with permission.
Empire Trust Letter, March 6, 1950, p. 2.
*From
much money to win the peace as to win a war;
only democracy who can finance either peace or
war; and that the initiative is really in our
of Stalin and the Politburo.
Calculating that
lirm produces such appraisals on
more
than one hundred compa¬
-
as
that we are the
trillions
way
a
face!
around to the view that
come
with sincerity and integrity, are
out of the world's awful dilemma, must
who
planners,
trying to find
which
of the concrete immediate problems
are some
global
our
ing through interstellar space, or with most of its people perishing
from three-seconds-to-infect.-and-three-hours-to-kill germs.
may
existing international institutions.
the
Observations
only a small.portion of theni
be seriously interested in In¬
vesting in that industry. If, on tfte
other hand, we offer reports ph
individual
companies — and our
but
back-door receptacle
bankability by
mere
loans not up to the standard of
for the residue of
of
a
report.
now we are
ing around $400,000
a
Our
spend-
year.
Our
frankly designed to
secure
pros¬
pect names, but here
we are
mak¬
ing
and
a
constant effort to
more
selective,
so
be
more
that
the
Where
Customers
New
Come
Where
come
From
will the
from?
In
new
1929
1
customers
there
were
39,000 individuals who paid taxes
on
incomes in excess of $30,000. <
good propsects. We know that if
After taxes, this group had left
we offer a booklet
on an indus$5 billion, 200 million.
In 1945
names
try?
we
we
get
can
will
get
be
many
those
of
requests
were
42,700
tax
returns
in
the*
.Volume
above
Number 4892
$50,000
after
$1
171
they
income
billion,
750
they
but
had
left.
An
group,
paid. taxes
million
THE
itake-home
'
On
the
there
other
end
of
658,000
the
FINANCIAL
CHRONICLE
trained initially to become 000 a
year to publish and distrib¬
salesmen, and all but 22 of those ute this magazine.
who have stayed with us are still
While most of
in
offices
our
that
are
category. The results of
equipped with- Dow Jones news
training program have ex¬
tickers, we also maintain a private
ceeded our fondest hopes;
news and
this
pay!
were
&
were
Increase of 10% in the number of
returns, and a decline of 66% in
■
COMMERCIAL
scale,
Of the 252 young men who at¬
individuals
tended
*who
paid taxes on incomes from
$5,000 to $10,000, and after taxes
they had $4% billion left. In 1945
school, 208 are still
186 being in straight pro¬
our
quotation service on a
separate wire which supplements
news
and quotations on the DJ
worthwhile
is
also
(1243)
of the
prospects in town, it
that
those
people
true
know him.
Investing
ments in recent years.
days is based on a lot more funda¬
mental considerations than social
By relinquishing his duties as a
the Manager has ele¬
producer,
relations.
vated
I think that every
less of
the
little
not
was
fellow's
business
profitable. :At
least
There
one
Five
is
single
a
in
person
Merrill Lynch
were
to add the "extras" that now
under the heading of ad¬
vertising and sales promotion to
icy I am certain will stand. While1 sales
costs,
our
figure
would
to your house." I can assure you
there are many salesmen who pre¬ probably be as high as that of
Vfe welcome that kind of
business, fer to work on a commission
most firms. We feel that even if
basis,
ind perhaps you will realize this
I am certain that the
salary basis our men end up with fewer per
yhen I tell you that for every
is best for the firm, best for the cents,
they have more dollars in
4100 of round lot business we do
customer, and in the long run, their pockets in the end because
fa the New York
told
man
lot
he
me
customer
sends
"across
the
the
Stock
do
ve
And
$30
in
listed
accounts
odd-
Exchange,
odd-lot
business.
commission
business
for
two-thirds: .ofour
gross income.
dnThere is abundant evidence that
.
people not owning securities at
the moment would like to find out
something
about
first-rate
over
rill
them,
prospects.
55,000
and
are
Last
year
attended Mer¬
women
Lynch Investment Courses in
65 different cities.
working on a com¬
basis, and that is one pol¬
mission
street
Mutual Funds
•
best for the salesmen themselves.
I have mentioned that we
'
of the
-
spend
about $400,000 annually in adver¬
with which
ease
can
who
leave
firm
one
with another find it diffi¬
go
cult to take
their customers with
tising.
We spend almost as much them these days. That is also true
Promotion, and this activ¬ at Merrill Lynch. We have made
ity has put us in the publishing our customers aware of our serv¬
business in a big way.
ices, and this is the major ac¬
and distribute book¬
lets by the hundreds of thousands.
Some of them
advertised and
are
now
few
a
merchandising.
lier
complishment of
tion program.
At the same
sales promo¬
our
time
I
frank
am
offered free to anybody who is in¬ to admit that we take
relatively
being sold to the little people
terested.
Many are printed
in few customers from other firms.
int£ increasing
quantities.
And
color,
and an earnest effort is 1 like to think that our activities
fewer salesmen, I hope, are look¬
made to make them readable and broaden the base not
only for us,
ing down their noses at the cus¬
understandable.
but for our entire industry. Just
tomer with modest means.
We believe this product is evi¬ as the toughest competition for
I have mentioned that1 adver¬
dence of a highly trained Research the A. & P. is not another large
tising is one of the most useful
Department.
It
helps persuade chain, but the well run local in¬
tools in bringing in new custom-'
our
salesmen" and our trustomers dependent, so is'our most aggres¬
ers, and in creating a favorable
to rely on these specialists for fi¬ sive competition the
locally owned
impression for the firm. But the nancial
are
that
make
If you
the
salesmen
But
.
younger
it
with
results
to
is
splendid
opportunity
years
sibilities
of
salesmen
sen¬
been
properly at the point of sale.
We must improve the initial con¬
tact, and the place to start is with
up
the
salesmen,
,-^Ten
y
Inc., and
about
Cassatt
25
men.
& Co., we had
investment sales¬
30
or
and "managed
vey," which is published quarterly
companies
and rates industries and
within
those
industries
in
salesmen express the same opinion
about the same security
at the
did the conventional same time. You can imagine how
retailing new issues of
embarrassing it would be, if our
corporates, municipals and com¬ salesmen in one
part of the coun¬
stocks.
knew
sition
sell
merchandise.
labored
we
that
within
competitive
the fore, we
improve our po¬
syndicates if we could
in
sion
to
could
more
time
With
coming
we
the
that
illu¬
transform
reasonable length of time
a
the 300-odd customer's
Pierce
At
under
could
we
We
in the
men
organization into
salesmen.
thought
retail
the
con¬
solidation of the investment bank¬
ing
function
business
many
with
would
Of
way.
course
in
successes
the
just
that
try were advocating the sale of a
stock, while another group of our
people
advocating
was
chase of the
the
security.
same
securities
firm.
I
the
Drexels, the NewClark Dodges, or the
Dominicks scarcely know we
are
in business.
during
selling
to
were
competition. I wish
only
see
of
more
business. It makes
to
no
it
in
our
to
sense
me
three member firms
in the size of cities like Portland
and
Seattle
when
there
firms
in Charlotte,
Beverly Hills.
in
I
pur¬
believe
that
firms
more
six
and fourteen
there
are
salesmen
more
operating, there are more people
becoming security conscious. Over
and over again I have seen Merrill
firm, and not
merely to the representative serv¬
icing his account. Charlie Merrill
Lynch
individual
instances.
open
an
office
in
a
new
city and become successful with¬
told all of us in 1940 that none of out inflicting hardships on firms
the offices of the new firm would already doing
business in that
be a "headquarters for salesmen." town, but quite the reverse, ac¬
Early in life he had discovered tually improving the investment
how difficult it had been for him of the entire community.
He
discovered
at
the
time
branch offices in these
that 25% of the profits of the Bond
cities, and
always they failed. We have been
Department
in those two cities for about two
by for five hours a day must
have a peculiar fascination after
was
go.
period of
a
We
10
years.
started
out
face-to-face
from
English,
their
we
the
count
per
week
When
request
in
realized
we
of
age
average
Executives
years, we
this
to
We
our
1944
Ac¬
was
determined to do
51
some¬
thing about it.
•
As
embarked
as
on
the
a
series
of
training
courses for young
men.
Through
June of last year we had gradu¬
ated 252 young men averaging in
age 27 plus from eight different
six
month
fewer
courses.
All
of
in
them
Eastman
Dillon
in
percents but a
dollars than the ar¬
and by any measuring stick
haye a successful operation.
years,
we
While
paid him
moment, I feel that
a
salary, plus 10% of the
profits of the Bond Department.
Our
sales
promotion literature
is designed to both help the sales¬
to tie the customer to the
those
we are an
cities
I
that
moment
do
feel
that
fornia.
And
125,000
state.
ual
that obtainable elsewhere.
with
Reader"
which
tributed
free
twice
month.^t4
ways
An
ex¬
to
75,000
is
dis¬
customers
resembles
the Business Section
"Time" f Magazine,
associated
many years.
and
with
its
in
of
editor
"Time"
for
It costs about $200,-
is
point
Many
business think it is
any
of
lived in
staff
open
a
new
office
locally known personnel. It
never
a
whether
or
the
consideration
not
the
salesmen
with
Larry
even
an
office
Manager
have
who
native to those towns.
it
is probably true that
boy knows most of the
in
that
individ¬
makes
up
mind that the merchandise is
suitable
for
his
customers.
his
un¬
He
simply lays down
on the job, and
and I let him get away with
you
it.
This points up the necessity for
you,
of
owners
as
business,
your
either
personally or by delegation
to
that somebody assumes the
see
duties of
Sales
Manager.
We
In
old
the
Producer?
a
days it
a
was
mer¬
exposed
are
<'
good firms in our
have gone on record
that
salesmen
don't
Merrill
into
go
Lynch
Division
new<
any
of the commit¬
approves
Since
deal at
the Sales
any
unless
we
consulted be¬
are
fore the commitment is made, we
responsibility for disposf
purchase.
I imagine*
this is common practice in most
firms ♦regardless1 aF**aize,~ and
I.
think it is very important.
assume
,
ing
of
It
of
is
our
completely natural for alt
to try and put our best foot
forward
when
we
compete for
business.
There
are
assets
and'
us
there
big
liabilities for
are
as
We
ours.
a
firm
emphasize
as
our"
good points, and try to play down
our handicaps.
>
Most of you gentlemen are asso¬
ciated
with
earned
years
munities.
You
for
sage
firms
your
for those
and
which
have
just reputation through
of fair dealing in your com¬
a
have
a
sales
mes¬
present customers,
who may some day
become your customers.
I urge you to tell this story in
paid newspaper advertising and iri
sales
promotion activities.
And'
then
if you
can
convince your
staff, and especially your salesmen
that they are working for a fine
firm,
and
in
fine
a
guide them to do
industry—**
an
even
betteff"
job in their daily contact with in¬
vestors,
Should Manager Be
we
stop
can
about the future of
worrying
business.
our
com¬
practice to appoint the big¬
gest producer in the office to the
job of Manager. Thus, when we
got back into the brokerage busi¬
mon
in
ness
1940,
we
that
found
Managers of the Pierce offices
usually the oldest men in the
office
The
and
largest
true
was
same
Beane
the
producers.
(Special to The Financial Chronicle)
<
MINNEAPOLIS, MINN.—Harry
C.
Hayes
has
become
with Minneapolis
associated
Associates, Inc.,
Rand Tower.
Fenner
when
into the
came
With Minneapolis Assoc.
the
were
organiza¬
John Cutler Dead
dozen
are
of
not
our
situation
more
offices
exists
than
a
where
half
that
have
argued, pleaded, and in some in¬
stances
We
today.
demanded
that
the
Man¬
divorce himself from per¬
production. He has distrib¬
others in
the
office
for service,
removed
himself
as
a
direct
competitor
John
Smith,
City,
Wilson
Cutler, partner ill
Barney
& Co., New York
died
March
18
at
the
age
of 62.
ager
or
ever
sold
Utilities
believe it is the
I
uted his accounts among
community. None of the
who opened our offices in
While
ex¬
Marks
Texas
sonal
a
the local
often
of
us
Charlotte, Phoenix, and only two
in
our
newest
office,
Omaha,
were
it is
factor,
a
shares
salesman
There
about opening new offices.
our
little magazine called
is
land, Tulsa, and Detroit. The larg¬
Company
among our offices was
Detroit.
Dean Witter sold 140,000 shares of
Niagara Mohawk mostly in Cali¬
tion.
"good citizens."
to
was
being in
I would like to make one
a
it
est retailer of Southern
is? that
people in
some
our
help everybody
And I can promwill do our best to
essential
a
"outsider" at the
will
we
a
nationally, and so
have you, stocks in banks of Port¬
&
become
spch
our Pennsylvania offices
usu¬
ally brings up some reference to
the eight mills tax. I don't doubt
in the long run.
We believe the best way to ac¬
complish these objectives is to
make our material different from
"Investor's
war was over we
at
more
rangement he had with Burr, who
ample is
Training Salesmen
soon
lot
conformity. - In plain man and
couldn't get them off firm.
chairs.
that
calls
service
than
more
demanding
Account Executives.
our
lip
got
by
lot
a
same
and
in
to try and take his customers from
the habit of sitting around a
board room and watching the tape
But
Such
be
that
see
issue, special offering, or second¬
ary where we participate as prin¬
cipal, constitutes a recommenda^
tion on our part that the merchan¬
dise is of good quality and fairly
priced.
Lynch,
it from
hear
you
salesmen:
but
deal,
a
the sell~
on
business to
we
our
ment.
Merrill
at
sure
without
where
and
are
Another objective of Sales Pro¬
motion is a frank attempt to tie
the customer to the
it
security can't be sold in m/'territory1. An indifferent performance
a
his men
have
briefed
should
business,
with
our
We have sold
Competition
I believe in
there
I'm
for
with
we
Just like other
1949.
hear
at
conduct
contacted.
the
aggerated.
For
years
Baltimore and St.
George H. Burr when he moved to Louis were noted as the grave¬
work out that what he
thought would be a better yards of New York firms. Many
we
had signal opportunity with Eastman Dillon. attempts were made to operate
didn't
it
brokerage
add
man's bow.
Well,
the
strings to each sales¬
more
bolds,
This Survey has a fur¬
objective
of
helping
our
ther
We
bidding
if
broad
business
mon
doubt
categories:
in Merrill Lynch,
years ago,
information.
Our most important publication
is the "Security and
Industry Sur¬
he
When
are
chandise
.
best advertising in the world will
hot do a job unless it is followed
i
.
that
it his
makes
to expose the pos¬
retail
the
originat¬
ing points which should make the
security
attractive
to
potential
buyers.
And then the Manager
pany, and 440,000 shares of Niag¬
ara Mohawk
during the latter part
your
salesmen
expect that the Manager wilt
hold a special meeting where the
We retailed nearly one milshares of
Southern
Com¬
and
liaison
those customers to whom the
past few
the
mer¬
a
we
a
We
his
programs
meeting
one
each week.
break-up of the public utility
holding companies afforded us a
of
is
the
as
It is his chief task
to
insist
least
The
mion
acts
his staff.
transmit
We
plain statement of fact,
and therefore I hope you won't
think it immodest, when I say that
today we are far and away the
largest retailers of common stocks.
staff.
of
person
who
man
He
ing in New York
achieved.
It
a
the
plans and the
our
have
in
officer between the Sales Division
cus¬
that the most
men
sational
is
have
and
given up
have had some
we
will realize that in each office
we
chandiser.
We haven't
men.
effort, and
success.
of
out
policy,
you
Manager
about
words
have understood the sig¬
nificance of this particular
I mentioned ear¬
thought we could
we
retail
tomers'
accounts.
new
Salesmen
to
they
in Sales
We prepare
The road to a part¬
nership in Merrill Lynch today is
more likely through the
manager¬
ship of a successful office than
any other job in the firm.
come
develop
Distributing Booklets
And
executive.
an
as
his operation.
have become Man¬
not
his status
We have vested the Manager with
almost complete autonomy
over
firm, regard¬
its
size, is capable of de¬
circuit. This frees our regular wireveloping a sales promotion pro¬
system for its primary function—
gram
fitted to its needs. You
agers of offices, and those not in orders and reports.
It affords us know
this same $5,000 to
your customers respect fi¬
$10,000 income production have
key jobs else¬ the opportunity to make a simul¬ nancial
group had increased to 1,800,000
soundness, integrity, busi¬
where in the organization.
taneous
announcement
to
every
and after taxes
ness
judgment, and reasonably
they had $10 ^2
Our Advertising and Sales Pro¬ one of our offices, and deprives
billion left. That is the field we
decent services. We all sell sub¬
the biggest or the nearest office
policies
have
gradually
have attempted to till in our sales motion
stantially the same merchandise
come
to exercise a profound ef¬ to New York of priority.
This is at about the same
promotion activities.. That is the
price. Anything
fect
on
.another
our
$200,000
expense
item
un¬
salesmen.
When
the
field I commend to
you can do to cement the relation¬
you gentlemen
der the supervision of the Sales
going
was tough back in 1940, Mr.
today.
ship between the client and your
Merrill had established a policy of Promotion Department.
How do you go about this?. First
firm will pay dividends. Advertis¬
Our direct sales costs are prob¬
paying
our
salesmen
on
an
annual
1 think there must be a
ing and sales promotion can do a
general
salary basis. We have adhered to ably lower than those generally
recognition
job for the securities firm just as
by
you. and
your
that policy through the years de¬ obtaining
in our industry. jWe
salesmen that the field is worth
it does for every other leading
spite
the
generally
accepted prefer to take these extra per merchant.
cultivating. .1 have heard many
cents
and
put them into advertis¬
practice
of
compensating
pro¬
partners of security firms tell me
ducers. on
a
commission
basis. ing and sales promotion. If we
About Merchandising
that
with us,
duction.
improvement that has taken
in our selling accomplish¬
place
these
money
51
with his men, and concentrated on
the
leading
job of inspiring and
them
to
a
better
all-around
formance.
This
ment
a
full
it
responsible
is
consider
sales
time
per¬
manage¬
and I
for much
job,
William La Croix Dies
William
was
ber,
Paine
associated
Jackson
La
with
&
Croix,
who
Paine, Web¬
Curtis,
Boston,
died at the age of 29 after a long
illness from
injuries received dur¬
ing World War II.
9
Continued from page
would melt away like snow in
the
(3) Closely related to and also
•
r
of
offi¬
government
(except
us
cials; being told what to do, when
to do it and how to do it. Having
done as we were told, We will
then receive food, shelter, cloth¬
would be so
tne; Welfare
score, I doubt they
keen
upon
buying
who
Mr. Norman Thomas,
State.
perhaps better qualified than
anyone in America to judge, said
publicly in a radio debate on Jan.
24, 1950, that there was no dif¬
ference between' "socialism" and
"social welfare."
He maintained,
is
ing, medical care, etc., according
our age and needs, regardless
of how much we have individually
and 1 quote: "In effect, they're
contributed to the total produc¬
tion.
All we need to do, to in¬ synonymous." So, to the extent we
at the present time have a Wel¬
jure our economic security, is to
fare State we already have a like
do as we are told and stay out of
socialism or govern¬
trouble with tne people who give degree of
mental intervention in our eco¬
us our instructions.
to
,
nomic life.
Objectives of Welfare State
don't
I
connection
this
In
-
The Price We Would Pay
be¬
lieve I could db better than quote
Hubert Humpnrey,
Senator
from
President of Americans for Demo¬
cratic
Action,
course
of
in
said
who
Air debate with Senator Brewster
of Maine
couple of months ago
a
comprised
that the Welfare State
.specifically:
for
supports
price
obvious
and
production
decreases
nothing
come.
Adequate social security.
Unemployment compensation.
takes from
of
health
public
it¬
It gives to the poor and
the rich, gives to the
and
takes from
the well,
sick
the old and takes from
the young,
gives to the tenants
and
takes
from
the
landlords.
Adequate distribution of medi¬
conservation.
This is
Development of rivers and har¬
bors.
tried
nothing
it
Minimum
out
wages.
clearance.
of
device for taking money
a
one
set of pockets and put¬
it
into
another.
Kipling
thought it was a machine to "rob
selected Peter to pay collective
ting
public housing.
cost
was
to
Voltaire aptly said that
antiquity.
Cheap electrical power.
and has been
time since
new
time
from
few out, of
He may have left a
the
of
,
not
are
the difference between that figure
only actuating
and an arbitrary "fair" price by
The powerful,
checks for "production
monopolies created issuing
the
forces of inflation.
union
labor
the
unions, if not controlled, may be
faster than
able to force up wages
engineers, inventors, chemists and
raise the output per
man-hour.
If they do this, and
managers can
painful experiences in the
recent
coal
that
show
industries
other
and
are, either prices must
sufficiently to offset labor
or
unemployment will in¬
they
rise
costs
The toleration of labor monopo¬
lies
part and parcel of the so¬
as
cial
gains
has
resulted
which
in
a
State
considerabie
of
featherbedding
of
amount
Welfare
the
of
"make work"
rules
the
on
railroads, in the building industry
in
the
case
of
"standby
and
musicians"
waste of
examples of such
are
productive power. Lenin
Paul."
Beyond
equalize
an
incomes
that
said
has
tinue
label.
like
is
State
comforting, friendly word
upon
Semantically
warm,
home,
family,
"welfare"
94%
subsi¬
by floors, the price to be a
The
dized
wholly
unaware
Standard.
future
portent of this steady
be
as
supported
so-called Price Support
price tag on the
plan but it might run to
4V2 billion dollars or so.
There
is
no
Brannan
3V2
to
As
Welfare
shall I
not
say
astronomy)
unbearably
cost
the
but
statistics
State
taken
this is
than present
more
themselves,
by
functioning
go,
(or
of
the
plan
fireside,
love
Let's go back to Senator Hum-
jshrey
his
and
acts forth
a
definition,
dozen
or
so
which
of social
though they were glit¬
tering trinkets or presents to be
plucked at will from a gigantic
targets
as
payments
are
based
it increases the
of the income which
is derived from legislative action
rather than upon work
accom¬
fare State
and mother.
,
these
grows
percentage
To put it another way,
it separates income from produc¬
tion contributions and by so doing
plished.
every
but
taxes
mostly through indirect
hidden
items
in
taxes
the
on
hundreds
individual
of
budget.
relentless
vate
is
encroachment
TVA,
He
but
pri¬
thinks
only
knows
grip which public
on
our
Pacific
To
little of
him
hovering
the
has
power
Northwest
the proposed CVA
but
on
the
head.
almost*
of the extent and[
enterprise.
the
of
6%.
only
power
citizen
with
over¬
Southwestern:
Power
Administration, the Rural
a network
Electrification Administration, the
regimentation and controls that Central Valley Project in Cali*
socialization of American agricul¬ fornia
and
the Colorado
Rivet
ture, already fairly well advanced, Project are only names.
Central
would be greatly speeded up. Just
Valley is mostly power and will
a
quick look will be convincing. ultimately cost $411,000,000. SPA
Argus Research Corp. in a recent isn't hay either and will finally
analysis points out that the farmer take over $700,000,000 of Federal
would be producing for the U. S. funds to
complete.
The REA co¬
Treasury and not for the market. ops have received or have been
average
or
public
average
of
one of us has on the commodities within our economy.
already been garnisheed If Brannan started with butter,
to the extent of about 311 on each
say, the price drop would curtail
$1.00 by government for its own the demand for lard and other fats
expenses,
some
through
direct and oils which in turn might force
of
and
would necessitate such
or
need ralher than earnings
based on work done. As the Wel¬
com¬
generat¬
or
to
.
a
now
ing
wheat would con¬
modities such
plans
crease.
Publicly owned plants
prise
20%
of
total
capacity,
about
11,000,000
at
payments" out of public funds ob¬ kilowatts
the
end
of
19481
tained through general taxes. The against a total of 56,000,000.
In
non-perisliable or storable com¬ 1930,
private
power
comprised
the
best way to
attempt to
There would be no incentive for
destroy the Capitalist System was
level
down
middlemen or speculators to store
suppose
that even if I were to
to
debauch
the
currency. If prices
hint or by inference or innuendo, wealth it stifles initiative for very
commodities,
even
temporarily,
rise only 2% a year it will cause
indicate that I were against or obvious reasons, and its adminis¬
because fresh supplies would be
the
price
level
to increase 25%
having
lukewarm about any of the fore¬ trative costs are heavy,
coming
on
the
market.
Price
in a decade or double in less than
would lose its function of equating
going objectives I would be sub¬ been estimated at 12% to 15%, a
40 years.
As
the
Spence
Bill
and
kind of brokerage charge. ' Our
ject to instant characterization as
supply and demand. Washington
the Economic Expansion Act of
a
would be forced more than ever
"reactionary" because if I am British friends make no attempt
1949
(S.
281—81st
Congress)
at concealing that a principal so¬
against "welfare" I may be ac¬
before to decide for the consumer
showed last year price changes or
cialist
goal is "fair shares for all."
cused of denying alms to the poor,
what he is going to eat and for
expected price changes are the
In
a free
voluntary
society
the
medicine to the sick or food to
the farmer what he is going to
best possible arguments for so¬
incomes
of
people
are
dependent
the
hungry.
The
very
words
produce. If the proposition is tried
cialistic controls.
"welfare state" constitute a very upon their relative contributions
out in only a few commodities it
(4) The bank account or income overlooks the interplay of those
effective, self-serving propaganda to production, but in a Welfare
but it's quite an array. I
course,
and
sale
...
gives to
cal services.
Low
creates
process.
facilities.
Slum
pe¬
a
it
nothing
produces
or
School lunches.
Soil
over
because
time
of
self, but merely redistributes in¬
It
is
a
give
and
take
farmers.
Development
of the
consequences
State is its irresistible
bias towards inflation. It actually
corn,
of
and
fer¬
,
by
Welfare
29% of the wheat,
dried beans, 35% of
cotton and 80% of the flax¬
the
40%
towards
espousal
its
Federal Government are
doing more than their share. Un¬
(1) One of the most immediate
der conditions of full employment
riod
c.
Eflective
particulars, item by item, in the
catalogue of socialism:
tne
Town Meeting of the
a
of
of
the production, distribution
selling of electric power and
tilizers; operation of railways
ships -and the-smelting and
of
the
metals,, including
the
CCC
inflation
seed., Barring a disaster to this which we have previously menintense social
tionedi
Over
$20,000,000,000 is in¬
year's crop we may have $1,500,pressures from all sides to achieve
000,000 tied up in wheat alone by vested in these enterprises and
full employment or even over¬
there
are
commitments
to supply
February 1951. They are feeding
employment. The chief victim, of
California raisins to hogs, filling $14,000,000,000 more./ This is much
course,
will be the purchasing
Kansas caves with eggs and the more than the value of the British
power of the dollar.
The docu¬
railways,
electric
undertakings,
mentation for this viewpoint is potato scandal is front page news.
The cold war against the Amer¬ road
transport, coal mines and
profuse and at hand. Marriner S.
ican housewife having reached a other nationalized industries over
Eccles, Vice-Chairman of the Fed¬
In addition,
tempo which could only be char¬ there.
the Federal
eral Reserve Board, in a recent
acterized as fantastic has forced Government
guarantees directly
letter to Senator Paul H. Douglas
the dreaming up and espousal of or indirectly about $90 billion ofsaid: "In making a cheap money
the
Brannan plan, under which deposits and mortgages and the
market for the Treasury we can¬
farmer would sell his perishable life insurance written by govern¬
not avoid making it for everybody.
or
non-perishable
products
at ment agencies approaches $40 bil¬
The Federal Reserve becomes
whatever price he could get and lion.
simply an engine of inflation."
the government would make up
Take
electric * power,
though.
But high taxes and low interest
is
rates
with our bill
But let us get on
bias of the
the
to
State
Welfare
•"welfare state" is to think of all
programs held off the
70% of the peanuts, 15%
purchase
market
Summer sun.
J contributing
Thursday, March:23, 1950.
FINANCIAL CHRONICLE
&
COMMERCIAL
THE
(1244),
52
in
hogs, which would bring down
injure cattle
growers and so on.
the price of pork and
promised
$2,375,000,000
These
gress.
show
by Con¬
items alone
few
that the U.
S.
Government,
beginning
with almost a single
power
plant at Muscle Shoals,
Alabama, in 1930 has made enor¬
strides
mous
towards
socializing
•the electric power industry.
Government is not hampered by
conventional
accounting. Govern¬
projects are wholly or
ment
largely tax free and regardless of
how much the U. S. Treasury has
had to borrow to build them they
not
are
as
when
into
government
an
must
sell
generally charged interest
Obviously,
element of cost.
an
power
moves
private ownership
out, be condemned or
area,
get
If the
out.
government was
obliged to keep its books the way
private industry does, there could
Of the
remaining 690 much is
No
wc rider
Allan
B.
Kline.
be no such thing as the "cheap
controlled or irfluenced by gov¬
President of the American Farm
electrical power" to which Sen¬
ernmental intervention, as for ex¬
the
Federal Christmas Tree, just for
Bureau Federation, said last De¬
ator
Humphrey refers.
Senator
the asking. But first, let me give production elements of the econ¬ ample. the price of sugar or milk.
cember, when speaking of overomy,
which can have no result Already then, to the extent of
Bridges of New Hampshire has
you another definition, that of a
subsidizing
agriculture,
"This
is
other than the impairment of the almost a third we have departed
said, "The TVA yardstick rates
very dismal word, Economics.
In
the road to stifled initiative, ex¬
incent've to produce. In addition, from
are a brazen fraud on the public,
a
voluntary
free society,
the light of what has happened in
panded
regimentation
and
a pyra¬
the higher the benefits the less economically speaking, and have
the taxpayer, the consumer and
the first half of the 20th Century,
mided government piled on the
the incentives of the beneficiary. given over control to the state.
the investor."
The General -Ac¬
I would say that "Economics is
the
social
there
is
science
that
tells
thing as a free
lunch." Perhaps, speaking of food,
the Senator's list may rightly be
■compared
to
the
menu
in
a
very
«wank restaurant where there
no
prices opposite
the
balance
that
sets
sheet
are
each
item,
of
business
a
or
forth
greater burdens
upon
(2) At this point it is necessary
you
such
no
places
to
that
observe
absolute
govern¬
ment control
of and the ability to
manipulate money rates and the
money market is an integral but
concealed
and
little
understood
part of the Welfare State.
In the
(I suppose Governor
Dewey will call me a Methuselah
old
days
only the assets
•without the liabilities, or a beau¬ or accuse me of attempting to
tiful, well furnished house with repeal the 20th Century for saying
all the latest gadgets from air- that) it was possible to earn about
conditioning to television, which 5% from
thrift, self-denial or
you
buy with gladness in your savings whether direct or through
heart
onlv
move
in that the
to
find
out
after you
carrying charges
life insurance.
could
not
Welfare economics
exist
without
arti¬
of
One
immediate
the
effects
is
backs of those who
discouragement of saving
taxpayers in
by
the higher brackets
who in the past have provided the
bulk of investment capital for our
industrial
growth.
If
long
con¬
do
the work.
Supposing we were to guar¬
antee hog prices high enough to
get 20 or 25% more hogs; we'd
get 25 to 35% less for the hogs in
.
the
.
of
Office
counting
Federal
the
.
the market and all
would
our
net income
be tied up in
that govern¬
tinued
the
scarcity of venture
ment check.
If I were seeking a
capital can have disastrous effects method for
control, I'd use tnat
upon the vitality of our free en¬
one.
When that time came tne
terprise system and already some farmer would
do as he was told
unpleasant
results
are
making or he would
fold up for lack of
themselves felt.
the subsidy check."
(5) Of course, our bill of par¬
The Government in Business
ticulars would hardly be compiete
without
(6) So far we have mentioned
mentioning
the
steps
which the government has been the direction, controls and regi¬
the mortgage, the taxes and the
overhead make living in it un¬
Government
the
U.
in
hints
S.
The
crucial
cializing
stated.
the
at
to
the
conclu¬
same
more
sedate
importance
of so¬
in
power
I
of
General
Comptroller
sion, though
language.
letter
1945
a
far
1
cannot
think it
was
be
over¬
Lenin who
said "Socialism is state electricity
plus
bookkeeping,"
Thomas
and
Norman
stated, "The TVA exem¬
what Socialism might do
technique it would use in
process."
More recently ad¬
herents of the Welfare State have
plifies
and the
the
on
They reject the
ficially cheap money, which in taking for the welfare of the mentation which follow the Wel¬ become bolder.
reactionary
notion that private
brief, among other things, reduces farmers. For a generation now we fare
State
functional
if
you
the earning power of capital and have had one farm
public
power
companies
bearable.
price support please—but now let's get on with and
.Well, what is the price of the helps transfer income from higher policy after another and sooner or a look at government in business, should compete on their merits,
It makes
it later
Welfare State?
The
price is a to lower brackets.
they all fail.
Only World government in competition with with the same rules in force and
socialized America. Have we got easier for the government to com¬ War II bailed out the Treasury the citizen, the taxpayer—actual governed by the same accounting
the resources to buy it?
It may surprise principles.
Here is Sen. George
We are pete with private lenders. It re¬ ten years ago: now surpluses are nationalization.
a
rich nation, the richest in all duces voluntary saving in favor
piling up again. The Commodity you to learn from the Hoover Aiken's minority statement dis¬
history. If money or wealth were of compulsory saving. It has led Credit Corporation has a borrow¬ Commission on Organization of senting from the Hoover Commis¬
ail that were needed, perhaps we to the virtual control of the port¬ ing power of $4,750,000,000
After the now cus¬
but the Executive Branch of the Fed¬ sion's report.
could pay the bill, but the in¬ folios and lending policies of ^the needs $2,COO,000,000 more and has eral Government that the U. S. tomary
tribute to the existing
sidious part of the transaction is
that mere wealth or productivity
is
or
only one component of the bill
invoice. There are many others
and
ifjjhe American people
given a bill"of particulars
on
were
that
—
15,000
banks
in
banking system.
commercial
our
It
is
a
compli¬
cated subject and I shall not dwell
long
upon
money
it.
Without-
Congress for it.
list
It is pos¬
already
100
is interested in order by saying, "I believe
business
enter¬ strongly in the free enterprise
These concerns engage di¬ system" he continues: "A serious
or
indirectly in lending defect of these reports (Judge'
guaranteeing loans and Roberts and Haskins & Sells) is
owns
or
important
in farm price support opera¬ prises.
rectly
scope of CCC's activities is money,
staggering. Last year's loan and deposits,1 writing
up
tions before 1950 crops are all in.
cheap The
Senator\ Humphrey's
t-s»
asked
sible that $6V2 billion may be tied
j
...
v
•
f-
V-.
♦
.
:
life
insurance,
narrow
a
"
.
conception of accounting
v
;•
:
'
-l
w
I-"
v
Volume
and
171 ~ Number 4892
THE
a failure to realize that there
be public investments
yielding
can
public returns, evaluated and
praised
ap¬
in
terms of a system of
welfare ; accounting."
at last, we have it.
Two
general
Now,
COMMERCIAL
in aid and other handouts, it is
only a question of time* before
they will lose in part their identi¬
ties and powers.
One of the most
partment
Hetch
Hetchy
definite
mean.
effective methods open to the Fed¬
eral Government is the creation of
the
of
Interior
>'
'
in
wrangle
power
illustrations
-
The
CHRONICLE
FINANCIAL
&
the
tors
are
lose money this year. On the other
what:
of
I
\
result upon
particular
governmental structure,
our
type of
five.
Welfare regional authorities like the TV A, with
its
elaborate
and
delicate
indeed.
If
George CVA, the SPA and the MVA checks and balances and its great
.Orwell, author of "1934," were which eventually become more dependence for proper
functioning
alive he would have
appreciated powerful than the states in which upon the capacity for tolerance,that phrase.
they operate and the municipali¬ compromise and
self-government
ties which they serve.
b The extent to which the Federal
The classic of the
American people, will be to
Government is involved in lend¬ cases of Lenoir City, Tennessee,
create a political vacuum.
State
ing, including lending on real versus the TV A and the City of
estate, may be gauged by its huge San Francisco vis-a-vis the De¬ socialism must be the successor.
investment of over $10.5 billion
plus
two
equals
accounting,
in this field.
some
A
these
of
activities
enlightening.
whose
Lustron
to
and
be
may
There is the
loans
of
mention
mere
Waltham
have
recently made the headlines, the
Federal Housing Administration,
the
Federal
National
Mortgage
Association, the Central Bank for
j Cooperatives and many others.
I
cannot catalogue them here.
Per-
| haps the following taken from
a
security circular of a financial
firm commenting on the bright
prospect of building material
will
illustrate
our
kinds
the
is
room,
the
ligations
of
i in
1951.
them
Most
of
of
billion
$1.3
this
in
billion
private
than
private
of
purchasers.
is
By
permissible for
the
agency
ment makes
ume
doubtful
far larger proportion of
a
value
any
money
character too
a
find
lending
the
$1
to
over
is
to buy mortgages, many of
used
to
and
possible
pressing for
the housing
program
dle
group
a
income
large vol¬
a
construction.
govern¬
Now
it
is
law to extend
new
the mid¬
to
for
$2
billion
more."
What Does It Add Up To?
full
it
all add up to?
overall
an
pattern
running through it?
entitled
"On
your
should
In his book,
Our
in
cured
structure."
In
welfare
the
which
by
"a
control of the economic
measured
or
Welfare
only
the
setting
State
is
the
be
to
dispensing of
of
up
sin
a
evil
or
eradicated
is
an
alleged concentration of economic
The
power.
eliminated
or
distribution
imbalance
is
to
alleviated
by
a
be
re¬
reallocation
or
of
wealth and/or income.
are
correct in
Yet, if we
appraisal of the
our
methodology of the Welfare State
it seeks to cure
unhealthy
an
con¬
centration of economic power by
the greatest concentration of po¬
litical power
think
the
the
in
cure
disease
our
history.
be
to
because
worse
it
We
than
inevitably
will:
Destroy
or
traditions of
dull
the
American
individualism;
Undermine the independence of
the American farmer and busi¬
Liquidate
or
least seriously
at
impair the vitality of State
local
governments
their powers and
in Washington.
This
haps
last
the
Laski,
.
,
_
_
who
centering them
named
It
small
with
effect
is
dangerous
most
insidious of all.
ally and in
and
usurping
by
comes
steps.
the
per¬
and
gradu¬
Harold
Webbs
is
generally considered the leading
apologist for British
socialism,
stated over 20 years ago that it
would
be difficult to
socialize
America because "the separation
of powers is a protective rampart
of American individualism."
The
.
growing tendency of the Federal
Government to usurp as large a
measure of
the-, taxing power as
-'possible at the expense of the
states is a case in point.
If the
: states and
municipalities for one
Treason or another, whether it is
for education, construction of hos¬
quite
properly
careful
discuss
should
you
banker
bonds
with
a
con¬
kinds
assuredly
should
your
chase
price.
in
be
of
maturities
current
return
they provide is determined
largely by the length of maturity.
The
longer the bond runs the
higher the yield; the shorter the
lower the
the
runs
yield.
them.
Most
the
seek
you
banker
or
your
Then
there
F
rent
so
which
on
income
is
Series
the
are
Bonds
paid,
no
but
accumulated
for
which
interest
that at the end of the 10
tures
but
for
at
$750
of
result
rather
interest
you
ma¬
increase
is
capital growth,
accumulation
the
the
on
$740
or
This
$1,000.
the
not
12-
or
period the bond which
year
E
cur¬
principal
sum
of
paid
in, for the life of the bond.
Next,
which
are
the obligations of vari¬
political sub¬
divisions
such
as
cities, states,
counties, school districts, road dis¬
ous
governmental
or
tricts, etc. These
ferent
grades
of all dif¬
qualities but,
acres,
$50
$32,000.
or
have
maturity
a
In
broad, general
a
this
Dollar
am
Constant
sure
with
you
topic so
diverse,
so
scratched
Ladies,
way,
field
the
covers
fixed
of
or
Investments.
I
will appreciate that,
broad and a subject
have
we
the
surface
hardly
with
the
preceding remarks.
Dollars
Variable
Investments
Now I would like to go
with
Variable
the
Investments
which, as
implies, and in contrast
name
Dollars
to
offer
Constant
neither
guarantee
definite
the
of
Investments,
promise
a
specific time
any
stipulated
any
nor
of
repayment
at
sum
with
or
further
talk about Dollars
and
you
rate
of
return.
them
and
are
thereon."These taxes
be either general
may
limited
or
in character. One of the outstand¬
ing features of municipal bonds is
that the
interest paid
ernment.
nicipal
them is
on
by the Federal gov¬
Consequently, good
bonds
represent
mu¬
desir¬
a
able form of
this
make
point
clear
to
I
think
I
might
essential
the
you
difference between the two forms
of investment.
When
make
you
a
Dollars Constant Investment, you
become in effect, a creditor of the
maker
owed
of
the
set
a
have
you
security.
of
sum
various
You
are
and
money
means
of
en¬
forcing collection on the due date
and, meanwhile, you are entitled
to
receive
fixed rate of return.
a
make
you
Dollars Vari¬
a
able Investment you
come
part owner
a
in effect be¬
participant
or
in
the
business
itself.
as
the
business
profits; likewise,
lose
you
The
You
leading
examples
latter form of investment
real
as
profit
sibly 4
or
fill
those
all
4V2%, and I must ful¬
terms
if
the
of
are
such
estate, either
city
im¬
the
property loses
too, is yours. As you no doubt
know, after you have bought a
piece of real estate there is no
ligations of industrial enterprises,
railroads, and public utilities com¬
panies, and are of all shades and
complexions ranging from first
mortgage
bonds
secured
prior lien
on
company,
through
secured
gages,
by
general
mort¬
debentures,
and,
and
if
you
decide to sell it you will get back
the amount of money you paid
first instance,
or any
other specified sum. That will de¬
the conditions prevailing
on
the
at
time
there is
no
from
such
more
or
rental
penses,
As
a
the property of the
when
that
assurance
pend
porate
that
money
loss
income tax brackets.
will consider cor¬
bonds. These are the ob¬
or
the
of
sale.
rate of return assured
depending
further
is
precious
know
"Diamonds
what
Are
Friend," and
a
name
that it
investment.
is
of
a
a
bond does not
safe and
secure
illustration
I
how both type of investments
be involved in
Their
not
by
a
Some
I
I
soundness
their
is
name,
determined,
but
by
the
financial strength of the company
section
pay
of
$100
have
a
us
say,
land—640
an
made
acre
a
which
money
ceives from
the sale of
is
in¬
it
re¬
shares, in
approved list of securities
an
un-
the
provisions, regulations,
and safeguards as set forth in the
cer
Investment Company
Act of 1940
passed by the Congress of the
States.
Investment trusts
as
United
federally regulated and are
kept constantly under the watch¬
ful eye of the Securities and Ex¬
are
change Commission.
When you buy shares of an in¬
vesting company you are pooling
your money with that of the other
jewelry.
they
say,
Girl's
Best
with
Not
case.
however, in keeping
lyrics of the currently
the
I
sure
am
the
be
to
proven
need not dwell
the
on
variability of this type of invest¬
ment.
Next,
you
Variable
make
may
Investment
of
chase
Dollars
a
by the
interest
an
in
pur¬
local
a
business
enterprise. You will, of
become a part owner and
investment
may
become
profitable or unprofitable. You
are
the
the
manage
You
trust.
trust
do
and
affairs
those
the
of
not
buy stock in
any particular company but, in¬
stead, your money is spread over
all
the
securities
That
owns.
which
is
"diversification"
big word merely
the
what
is
and
that
means
trust
called
great
spreading
the risk.
It is the practical adap¬
tation of the old adage, "Don't Put
All
Your
Eggs
in
Baskets
One
While you buy shares in only one
investment trust and receive only
a
single
is
invested
certificate,
in
your
money
large number of
a
securities and it is
being carefully
experienced, pro¬
course,
tended
your
fessional managers of the trust.
As I mentioned to you, all pres¬
derive
may
return,
good return
a
depending
ditions
within
business
itself.
that
I
or
the
upon
no
con¬
particular
am
that
sure
it
is clear and understandable to all
of you
ladies that
ent
by
day
the
end
open
function
of
the
under
mutual
the
Securities
funds
watchful
eye
and
Exchange
regulated by
the Investment Company Act of
1940.
Among many other provi¬
sions this Act stipulates that no
Commission and
are
participate
by buy¬
ing an interest in a beauty shop, investment trust my place more
a bakery, or a grocery
store, and, than 5% of its assets in the securi¬
you
in such business ventures
it
not
may
clear
so
to
exactly the same
you make a Dollars
thing when
Variable
be
do
you
you,
Investment
in
the
most
widely used form of such invest¬
ment
—
namely, common stocks.
When you buy common stocks in
corporation, whether it be a
big national company or a small
any
local
on
unlisted and
or
counter
dealt
in
the
over
traded
are
you
owner¬
ship of that company to the
tent of your
profit
investment and
is
loss
or
ex¬
your
according
to
investment.
your
of
these
trust
of the
some
somewhat
a
of stock called Pre¬
Stock
ferred
is
which
features
embodies
of
Constant and Variable
vestment. Dividends
Stock
the
Preferred
payable before those
are
Common
the
both
type of in¬
on
Stock
observation
investment
of
the
in
corporate
applies
on
or
may
tion
have
careful
by you in
your
banker
or
pre¬
and
considera¬
conjunction v/ith
your investment
dealer.
Mutual Funds
would
now
stipulates that the trust
always redeem its shares at
the
prevailing liquidating price
to
on
the day when you offer them for
sale.
The value and importance
of this latter provision cannot be
overemphasized because it assures
purchaser of investment
a
funds of
always being able to get
represented by your
ownership of shares.
Now it is
your money,
true that at the time you
shares
your
more,
they
may
liquidate
be
worth,
less, than the price
or
you
you
be
bring
want
to
paid to
you
of the trust are held by an inde¬
pendent custodian, a bank or trust
company which is a member of
the
Federal
Reserve
System. By
are the
general
provisions of the Investment Com¬
large
these
pany
Act, which safeguard and
protect the investor in all mutual
funds.
We must
now
consider the dif¬
ferent kinds and types of invest-,
ment trusts that are offered to the
Companies
like
except for very few
borrow money.
never
Act which
must
Commons— and
each security
separate
problem
a
should
any
may make
securities—whether
each company,
sents
The
liquidate that must
on demand.' An¬
other thing, all securities and cash
liquidation
or
prevail.
same
which you
Bonds, Preferreds
one
paid but, whatever the value when
distribution of assets. The follow¬
ing
any
on
company—likewise the Preferred
takes precedence in
and,
money
funds,
will
not buy on margin nor
The trust may not lend
may
sell short.
you as
there
hybrid type
two
exchange
any
locally,
participating in the direct
or
outstanding securities of
issueiV and whichever is the lesser
those And, most important to you as an
investor, is the provision of the
whether
company,
are listed
shares
ties of any one company. It may
never hold more than 10% of the
investor
to
as
today.
numerous as
These
are
almost
the different kinds
attention one of the most of bonds and stocks that are avail¬
important
developments
taking able. There are mutual funds for
place in American investment and almost every investment purpose
finance. I refer to the growth and and it is
exceedingly important
development of mutual fund or that, when you buy an investment
your
you
as we say
bonds are gilt
in the business,
Triple A in quality. Others are
highly speculative and uncertain.
edge or,
clear?
frequently that
very
ex¬
can
investor. Let
the
a com¬
who
You
I
should like to pause here to show
same
vesting
It is
business
sole
Investment
that
upon
operating
investing.
whose
pany
invested by the experts
investment. It may be
less
conditions,
taxes, etc.
a
Likewise,
to do their
in
Is
investment trusts. As
mean
equity
plan where¬
funds
farm.
for ex¬
ample, that I go out here and buy
bears the
Dollars
a
a
of people pool their
and hire a group of experts
investors
that
The
security
on
simply
lot
a
Another form of Dollars Variable
investment company
a
farm.
made
single piece
the
that
my
mortgage
of property—not, of course, by
fact
fore¬
Dollars Constant
a
in
finally, down to unsecured notes.
mere
risk
the loss of
and
Finally,
owner of that
property and if the
property makes money it is yours;
for it in the
we
repay¬
date, probably 10 years after
the
date, and it will carry a
stipulated rate of interest, pos¬
the business loses.
as
holding, particularly
by those investors in the higher
Next,
or
ment
while
-
property or farm land —
proved or unimproved. When you
buy a building you become the
taxes levied
mortgage
popular song bearing that title. I
good investment media. They are
secured
by the full faith
and
ing
640
buy.
things
entity creat¬
payable from
That
the
necessarily
generally speaking, represent
credit of the political
for
acre
an
has
are
and
will
mortgage
dealer with regard to
safety and security of any
corporation bonds which you may
When
have municipal bonds
we
pur¬
investment
At
and
my
a'stipulated amounf—
namely
will
That
of
the
of
the coupon
pitals, building.ol roads and other
purposes,- are obliged to come hat against which they, are issuedand
;in hand to-Washington for grants the particular nature of the lien
behind
advice
your
to about thirty
one
the
and
which
—
different
ranging from
years,
with
different
several
are
government bonds
*
-*
mortgage for 50%
in
financial advisor. There
or
non-taxable
nessman;
by
money
Variable Investment in the
collateral
or
constantly and continuously
being offered for sale. An invest¬
hand, Jet us say that when I buy
at $100 an acre I only
a
53
are
have $50 an acre in cash and you
are the seller and you take back
that farm. I have
sideration and is something which
purchase
be
the
by
government securi¬
matter for your most
it
could
the
ties, the percentage however is
provide
in
the
collected
money
be
Way,"
Mr.
referring to the de¬
pression of the 1930s insisted that
Roosevelt
-
payable
•
government. A certain proportion
Has
thread
or
of
from
credit
and
and
taxes
What does all the above mean?
What does it
am
bonds. As
implies, these are ob¬
of the government of
faith
Country,
bond
?
I
and
the United States and secured by
will
grow
known,
government
name
Federal
1950
obligations—
familiar to all of you in this
the government spent
million supporting housing.
This
best
one
sure
fiscal
1949
fixed
of
even
may
this farm
Investment
And Investment Tiusts
ious
I
good,
ment trust is
closure
Investing in Securities
the
! fiscal
10
page
not
are
You have made
feeling toward Federal lending
for- housing - purposes:
"During
$282
from
RFC,
Watch,
Kaiser-Frazer
manufacturers
Continued
(1245)
acres
and
for that farm.
Dollars
Variable
they
said: ""A
Name."
the
shares
or, as
most commonly named,
are
Rose
The
by
investment trust
of
present day is the outgrowth
of earlier
trust you
your
your
select
needs
Shakespeare poses.
Any
Other which
These,
should
banker
which meets
suits your pur¬
one
and
too, are matters
discussed with
be
or
your
investment
dealer.
developments, some of
There
are
investment
trusts
Investment. I have gone into the which were not too good. But we
which
invest only
in common
farming business and if soil and learn only from experience and
stocks and these are of two kinds.
weather conditions are favorable, out of the experience of the previ¬
One places the greatest emphasis
the seed is good, and the price ous years .has come the present
on
capital growth and .apprecia¬
at harvest time is high. 1 will day open end mutual iavestment
tion; the other on income. The rate
make a nice profit from my in¬ fund.u Now the -term ""open end"
vestment this year. If those fac¬ merely means one in which shares : *: J Continued an page 54
'a' ?
THE
(1246)
54
COMMERCIAL
&
CHRONICLE
FINANCIAL
Thursday, March 23, 1955
i
Continued
from
53
page
rise.
Dollars Variable was to be revalued, thus cutting
Investments, under proper circum¬ down the effective aid by onestances, increase in value when fourth, if the new dollar-ruble
should
business is good and provide ex¬ rate
be applied
to
this
Thus the Chinese people
panding income in periods of ris¬ credit.
ing prices. Converse situations re¬ may find Soviet Russia's credit
ing
Investing in Securities
And Investment Trusts
sult when conditions
Consequently, the
reversed.
are
most
best and
good common stock a certain proportion of Dollars prudent course to follow in invest3]/2 to 51/2, or Contant Investments, namely, a ?ng is to own both type of secursavings bank deposit, some gov- lties.
possibly 6%.
ernment
bonds, some municipal
°ne of the most important conDistribution of Income and
bonds, and also some Dollars Vari- siderations confronting the investCapital Gains
able type of investment.
Except or is that of Dollar Depreciation,
return
of
on
varies irom
trusts
We
costs
be
to
no
They
per year.
with
a
vot£d
Congress
loan—of $400
a
the
by
American
t<f, China in the single
%
1948.
year
this
use
China
for other
can
pressing.
China today faces a
going any further on the where you are experienced in a The steadily declining purchasing prospect of 40 million people suf¬
subject of income from invest- business or have a knowledge of power of the dollar in recent years fering from ^hunger between now
ment trusts, I should like to make farming and real estate, the averof course, very familiar to all and the nex&crops. Millions may
And y|t, food moves from
very clear to you tnat investment
age woman would be well advised ot you ladies and especially those die.
of you who are housewives.
You China to
trusts which
qualify under the to place some portion of her Dolthe; Soviet Union.
ou,„_v
definition lars Variable Investments in the
shares of carefully selected mutual
to their stockholders not less than funds of the kind and type best
90%
of all revenue received, suited to her needs,
either from interest earned, diviA„vantages and Disadvantages
dends received, or market profits
Department
Treasury
of
mutual fund must distribute
a
of Each Investment Type
realized.
Consequently, it is very impor¬
tant that one distinguish
latter
in
and
amount,
_
I think we may now
ize the advantages and
A. Dollars Constant Investments
(1)
not in-
are
guarantee
or
wnen
stock
common
talking
income.
need
basket
of
to
me
tell
groceries
you
that a
costs
much
today than it did
more
10 years
ago or that shoes and
a
funds,
country
similar trend of inflation
a
ris¬
or
classification
in the mutual fund field is that of
the
so-called
the
name
made
balanced
fund.
As
R
nAiia^e Van-aiiiB.
Dollars
Variable
Investments
(1) Provide neither
set rate of
a
implies, an attempt is return, repayment date
balance the portfolio of payment amount.
to
a
or
re-
from 1850 to date has been 344%.
Now
this
does
not
mean
that
return
the
stable but which
so
on
There
that
on common
to 5%
or
stock
4^2%.
2% to
also
are
made
curities of
■
t
page
up
is
Government
cure-all
no
for
the
investment
problems which beset us today.
However, it does offer to the aver¬
Policy and
in
China
agreements
investor, particularly to
age
ladies,
for
some
part
of
you
concluded
ardent
supporters
,
that today the Nationalist
exercises
authority
on
the
a
means
islands
of
economy
before,
The
of
the
and
in
an¬
of
the
to
operating expenses
funds ranges from
three-quarters of 1%
average
When
asset value
considers
one
Formosa
and Hainan.
The revolutionary movement in
most
China
may
Soviet economy.
Soviet Russia's Intentions
in
service rendered and the peace of
rseem
.are
as
if
the
cost
and
promise
rehabilitation
leaders |may
this,
.
thoroughly justified.
poLt^uftoVuTgain the'neces-
clear
indication
Russia's intentions
a*e " "
be
content
jit must bring
disillusionment
Chinese
the
revolution
new
obstacles
to
,
to
of
China's
in
Chia:s railroads and
N°w' let us examine these
of
Soviet
in China.
property,
have
We
ftarms f
belated
theft
which
but
admission
deprived
all
of
of
of
some
Asia,
;$2 billion worth of productive
Second,
to
China
credit
at
Soviet Russia
a
an
$300
million
interest
rate
™s works °ut at $60 ™I"
Com¬
of their
to
We do
own.
tell
them
what
form of government
or
We do not in¬
engage
the
future,
the
past,
been in
of / tie
.have
friends
as
we
the
Chinese people.
,
China Warned Against Aggressive
But
they
that,
should
whatever
understand
withfli
happens
country, they can onjy
bring grave trouble on themselves
their
own
and their friends both in Asia and
beyond, if they
led
are
their
by
rulers into aggressive or sufcr
adventures beyond their
new
versive
borders.
violate
Such
not
would
adventures
only
tradition
every
and interest of the Chinese
people*'
they would violate the traditions
and interests of their Asian
neigb-^
aj&d
peoples;.",
bors, of the American people,
indeed
—
They
—
of
Nations
all
free
violate
would
Charter.
the
United
woijld
They
Ch^r-,
£,
violate the peace which the
ter
designed to
was
this
mistake
no
preserve.
that there
so
about the
may
the United
States; no opportunity,
twist it; and, so that,
China
may
know
who
.distort
all
in
would
such
or
be responsible
adventures
for all that
might
bring
Again,
that
so much
Moscow.
and
unstinted
kicks than halfpence in
more
association
with
the
now
as
old- friends
as
people,
the
we
of
thj?)
therp;
to
say
representatives
oujl
of
leaving them not by?
any wish of ours. They are leav^f
ing because the normal and ac-^
cepted standards of international >;
are
conduct
have
by
Chinese
the
offices
could
has
S.
political and
R.
Moscow,
which
which
and
foreign
the
rights in
special
represent
fringement of
in¬
an
China
are
sovereignty
held by no other
It is Soviet Russia
power.
which, despite all the tawdry pre¬
treaty terms, occupies
tence of the
the
role. of
empire
i •
builder
aside
an
Our
on
established
belief
to
the
tory
friendship for
that
interests
We have
and
who
anyone
of
the
50 years
world
a
war
that this belief is not
ter of words.
proved
by
shall stand
the
normal
this
leav¬
Chinese
our
again'
understand
\\\
b I]
responsibility lies.
»
Want
Trade
With
word
about
more
-1
China
China—
here in San Francisco have
played such an important part in
Our policy is the tradi¬
you
tional
American
traded
there
with
was
America.
since
United
have ;
before
States
of
In
fact, our country
discovered by people seeking
was
shorter
a
We
one.
China
a
East.
trade
route
the
to
We have traded with
Far
China
again the decisions do not lie
en¬
tirely with us.:"
Trade
of
requires
certain
stand¬
conduct.
Ships,
planes,
and traders must be
der conditions of
Contracts
cency.
ored.
must
be
There must be. some
of
um
received
un¬
security and de¬
hon¬
medi-
a
J
We
the record.
Under, these
is
government
conditions
entirely
your:'
willing
that
It
mere
mat¬
can
and
i
exchange reasonably regu-
of his¬
prove
J
under many regimes and are will-,!
ing to continue to do so. But here
United
to
'
which;
Americans, in the future as in
past,
should
buy .Chinese
goods, and. sell American goods.
This belief has been
deeds.
on
own
voracious friends., lated.
violates the integrity of China is
the enemy of China, and is hostile
States.
sum-,
the past.
friendship has been founded
the
their
the subject of trade—in
on
ards
the realities that must
new-found and
our
they
been
their
regret
people, but
will
where
at
expense,
are
We
our
friends
aur;
because
and
fulfill
not
ing by
observed
Peiping.
Under such
our
representatives
functions.
One
people fail to observe that, what¬
may be the promises for the
future, under the terms of the
treaty and agreements recently
S.
in
conditions,
Violated
Can the Chinese
U.
been
Communist
.
to the
at
not
have, in effect, even
marily ejected from
t
concluded
to
pas-sv
new
from
be;
attitude
representatives
China
•
the
in any aggressive
adventures
against
them.
Tie
American people will remain in
The
ever
5-year
1%
to
Chinese
received with
gratitude
the agreements.
extends
of
tend
eco¬
territorial assurances contained in
ca-
them.
thorities in their treatment of
now
And
pacity?
part,
own
upon
that
they should have,
clear
would
Integrity of China
a
only
ideologies
We
as"
not
intend
China's
not the industrial be faced by the Chinese people.
equipment robbed by the Red' In facing
them, they can well con¬
Army in 1945. Is this aid?
Is it sider
what
it
means
to
brush
a
choice
not
to
a
but
even
understand
jhave deliberately country
Soviet empire."
-
forced
loan
the
industry. The
un¬
orbit),0*
forthcoming for! a United China
a
far larger'scale and with
fewer strings attached than
the
dependent
wartorn
the
their
on
been
many
who'
development.
of China
These
help
-sity for a -well rounded, carefully
Smo-Soviet Treaty of Friend- lion -each year. This announce."planned, investment program— ship, Alliance and Mutual Assist- ment was made only to be folAat such program should include ance of Feb. 14,1950, and the other lowed by the news that the ruble
but
supported the Communists against
the Kuomintang: in the belief that
are
impoverished economy. They
promise, in particular, assistance
in the repair and
development of
China,
China
Since I spoke in January on the
Far East there has been one new
charges and
Si¬
of
areas
fanatical of the Conn
progressive
of im-
domination.
choice
has
I say
These
tory. is being forced into the Soviet orbit as a dependency of .the
Soviet political system and the
per
mind obtainable through investing
in the proper mutual fund, it does
for
bounty by
turning from Washington to Mos¬
cow, the experiepce of Jugoslavia
might have warned him that there
and
?°m6 °f them f°r ^ ^ time
the
provide
can
materials
raw
industrial
more
tional
of
charge for liquidation,
good
one-half
year.
no
annual
and
new
China's
There is
that it
so
'colonial'
more
Chinese really thought that
Peking could obtain an uncondi¬
your
quriftioTcori°of the'fund J varies
carried
be
official
China, which began a half cen¬ Chinese
people
may
welcome
obtaining diver¬ tury ago as an expression of the these promises and assurances,
sification,
professional
manage¬ aspirations of the
Chinese peo- But they will not
fail, in time, to
ment,
convenience,
and
ready pie, has been captured, for the see
where
they fall short of
marketability that can hardly be present, by the Communists. Their China's real needs
and
desires
secured in any other fashion.
It seizure of power has reversed the And
they will wonder about the
offers these services to you at a
true purposes of the revolution, points
upon which the agreements
reasonable cost and at a moderate For
while1 neighboring peoples, remain silent
funds
program
If any
,
and, on finding it, perialistic
exploiting it to the full. The re¬ agreements
only
resources.
There is,
sign at all of a great
of industrialization
to
no
on
nounced at the same time.
The Soviet Union and its
weakness
sult is
able natural
indeed,
nomic
"
omen
for
and
cut
off their
country from the
possibility of American economic
not by force of arms. It collapsed
from its own inherent weakness
As you can see, there is a
wide choice to be had among in¬
vestment trusts.
The mutual fund
weakness
its vast population and consider¬
away
single industry such and the withdrawal of the peo- have temporary success in
per¬
as oil stocks, merchandise stocks,
pie's support.'
suading the people of China that
etc.
Other trusts invest by classes
The Communists won by de- these agreements refute
the conof securities, that is, there will be fault, not
by what they
I offered, tention of the non-communist
bond portfolios within a certain They
employed the well-known world that alliance with Soviet
price range—stock portfolios like¬ Communist technique of probing Russia holds an evil
,
old
poverty and take a place among
the nations more in keeping with
bitter
8
The Nationalist Govern¬
overthrown
its
from
munist
a
wise.
out
with
United States-Soviet Tension
was
they have been possessed by
of a rapid industriali¬
zation whereby China would break
assistance which would have been
Our Asiatic
ment
many
the dream
rulers
from
for
era;
years
"The
\
present
status within
free
beria.
,
9
liv- of securities.
~~
Continued
support.
funds
of preferred stocks, industry type
trusts which invest only in the se-
pre-industrial
a
the
of return, de- balance between these two kinds
power as
modern-minded Chinese
in the backwardness
foodstuffs
on
plies, investment of those trusts is
made only in bonds.
These, too,
show a rather wide range in qual¬
ity, from very good to somewhat
speculative, and the yields range
There
a lower rate
6%.
several bond funds
are
the market and, as the name im¬
from
offer
cline in purchasing
of
than
One of the most important
vances.
balanced funds is about
same as
funds—from 3V2
'
The true
of
stagnate
China's
can
un¬
munist basis for their government
is similarly not the result of any
the pur¬
because itbeis only
in this way .that
hedged against both
.
much higher yields.
the
25
P?ice declines and price advances.
Since the Dollars Constant Invest-
one
™odeI?tf
inc°T' a0V"} vestments absolutely^ saft Dol- factors in 8afe investment, there-'
balanced funds of vestment is aosoiuteiy saie. uoiand lower quality which la// Constant Investments usually l0^e. ls the maintenance of proper
not nearlv
are
pay
Feb.
through with Russian
aid; the idea seems rather to make
through those
medium
of
...
ments maintain fixed value, they
orakl$, at other times.
its issue
of dol¬
their
the
fully
Adventures
pose
(2) Opportunity for profit and Pr9tect ones assets in a period of
5 it ito bonds sonfe [nprelcrred capital growth, or loss an i capital Price declines. Likewise, Dollars
shrinkage is therefore present: Vanable
Investments are
inBalanced funds range from those <a> Favorable in periods of rising creased in value and pay larger
of high quality which afford a Prices> go°d business; (b) Unfav- income in periods of price adlawer
In
billions
"... it has not been
to
been
the trust bv placing some portion
fairly good degree of stability, and
for development
Moscow:
have
able considerations in this type of Prices have risen each and every
investment.
year m an iminterrupted and ;un(3) Their very stability, how- broken line because they have not
the true income which the trust ever, precludes to a considerable an<* it is for this very reason that
pays without any consideration to extent
any profit or capital
both Dollars Constant
capital gains realized.
growth.
Variable Investments
second major
J
lars.
ing living costs for the past 100
years. As a matter of fact, studies
purchase of any investment trust,
you make it a point to ascertain
The
n^ed
clothing for "London
Economist"
makes
the
family are more expensive
than they used to be. These things following penetrating analysis of
Chinese needs and hopes and the
are well known to you. What may
extent to which they have been
not be so well known to you is
dashed by the agreements with
that we have had in this
that whenever considering the
you
China's
capital runs' into
the
prepared which show
the average increase per decade
dollars at a spefor the past 10 decades has been
date and with a
34% so that the rise in living costs
Promise
rate of return of from 31/2 to 6%
on
summar¬
disadvan¬
tages of each type of investment.
I speak of fixed number of
cified maturity
I am definite rate of return.
only about true earned
(2) The safety of principal and
I should like to caution certainty of income are the favor-
Therefore,
come.
a
and
gains distributions.
The
are
non-recurring, uncer¬
capital
tain
income
investment
net
true
between
don't
we
»jj-
to
say
the Soviet Union is not the result
but
Before
we
that
that
they
'i
exploit.
friends,
derstand
probing
spots which
Chinese people
happy
for
base
a
into and
old
of any
great
are
as
weak
move
As
We
needs
prospect that
may attempt;to
apply another familiar tactic and
and
China's
the
Communists
million
$45
can compare
granjp—not
million
.
than
more
face
now
the
the.
does
cans
not
propose
should sell
that
Ameri-^
goods which
be used to. harm us.
may
Nor does this
government,
its
or
their
propose to give cred¬
gifts to those who declare
hostility to us and all we "
«
Volume
stand
171
for.
Number 4892
We
Americans
THE, COMMERCIAL
should
free
be
willing to trade with China, as
©far forefathers
did, whenever and
in
far
so
it is made possible
as
in
trade
China
from
the
in
position
the
United
to
nor
American assistance
period 1946-1948
States
ollr
aP
of
total exports and
our
purchases
mere
2%
from
of
China
all
were
bought
wo
abroad.
If the present rulers of
China wish to believe that we de¬
pend
on trade with China, we are
entirely willing to leave it to the
tebt
of
experience
to
prove
in
when it
component in la
less
no
complex,
of
results.
lments
They
;new.
no
Truman
belief
that
of
com-
the
has declared
it
must
United
be
States
flow
images of
disruption
trade
directly
from
are
subjugation by
minorities or by outside
and that
peoples
to
must assist
we
work
destinies in their
aid
kind
out
own
extend
we
be
the
the
of
pro-
world.
As
of
Asia
will
be
able
to
equally in
the international community both
politically and economically,
It is encouraging to see grow-
of
or
ample,
in
be
In
throughout this whole area stems
directly' from years of Japanese
we
much
were
statement
on
interested
million
credit
to
These
not
are
principles
new
is the application of
nor
the Far East
them to
I Mr. Spender concluded with
des of the world could avoid
war
new
a
departure.
and
life,
their
preserve
way
of
In
.
of'Industry, of government, with
rbsfulting internal strife.
?It
would
stances
difficult
be
the
under
best
with
and
enough,.
circum¬
of
undivided
the
help of their friends in other con¬
tinents, for these new countries in
Sbutheast Asia to find their feet
and
ample, we have been demonstrating our desire to help where such
help can strengthen the cause of
freedom.
'
It has
^
been
a
not
massive
result
in
make progress
along the dif¬
ficult road
before
them.
It
is,
therefore, tragic that, on the con¬
trary, they find themselves in the
path
of
main
a
subversion
thrust
of
Soviet
and
expansion. They
subject to influences designed
are
to
produce
of
the
division
within
each
against those who might be able
to help.
An important objective of So¬
viet propaganda has been to de¬
ceive and confuse the world
cerning the policy of
ment toward the newly
nations
of
United
States
con¬
our govern¬
established
Southeast
Asia.
The
S
f
recent
sire to
ways
been
the
direction
Head
of
Mr.
of
the
surveys
is
most
which
give
cratic
In
deal-
our
!ngs with nations who had simTar
responsibilities
in
the
realized. '- We
cite
de-
of
Alien
China
groundwork
We
recent
settlement
is
a
example of this pol-
cy.
The
he
people
fact
hreat
heir
ess
to
of Asia
that
today
their
socialr and
is
f Asia
freedom
and
economic
the attempted
to
prog-
penetration
by Soviet-Communist im-
erialism
lich
must face
the major
it
and
by the colonialism
contains.
The
reaction-
ry
character of this effort is
Uustrated by comparing the misrable
fate of
I
been
instructed
the
recognize
"
the
the
There
Philippine
Govern-
ment will accomplish what otherwise
could not be done.
Will Work
Within
-
Framework of
United Nations
have
cannot
to
same
form
of
aggression—that
is,
be¬
people
whom it engulfs the right to work
it
cause
toward
denies
to
the
better life in their
a
own
This is why we must
ceasingly in all we do and
way.
affirm
un¬
the
positive goals of free
peoples.
We are for something
positive, for the most fundamental
urges of the human spirit. We are
not and must not allow ourselves
to
merely negative, even
though that negation is directed
against the most corrupting force
appear
operating in the world.
now
*
*
*
Tensions Between U. S. and
Soviet Union
EDITOR'S
NOTE—On the day
after the foregoing address Secy.
Acheson
talk
delivered
the
at
I wish to make
about
the
United
the
University
Calif.:
report to you
a
tensions
States
following
of
between
the
Soviet
the
and
Union.
Now, the right and obligation
of the Secretary of State to speak
to his fellow citizens, or to the
representatives of other nations,
which makes him
dom
other
right and
people
wrong.
It is de¬
rived from the fact that our fore¬
and
approved a Constitution. This
Constitution,
with the
amend¬
ments and interpretations which
have made it a living and grow¬
the
In' acting
to
strengthen
the
forces of freedom in Asia, we shall
de¬
classes,
and
strug¬
possibility of
Furthermore, the body of doc¬
trine
now professed
by the Mos¬
cow-controlled Communist is
only
tenuously identified with Marx's
writings
with
and
is
Russian
largely overlaid
imperialism.
We
certainly cannot accept the thesis
that such
the
doctrine
a
can
serve
as
justification for the right of a
group
of
individuals
to
small
speak
for
human
the
great
beings
selected them
and
whose
have
never
Now
who
opinions
own
three
of people,
sor, has carried
that
never;
their spokesmen
as
group
of
oi
masses
have
they
consulted.
for
decades
their
or
on
the
as
this
succes¬
rulers
same
great country. They
always, at the same time,
maintained the pretense that
have
they
interpreters of the aspira¬
peoples far beyond their
borders.
In the light of that
pro¬
fessed philosophy
they have con¬
the
are
tions
of
ducted,
as masters of the Russian
state,
foreign policy which
a
now
is the center of the most difficult
and troublesome problems of in¬
ternational
affairs, problems de¬
signed to keep the peoples of the
world
in a state of
deepest ap¬
prehension and doubt. In addition
to
this, they have operated within
the
limits of
the
basis
the
of
There
are
Soviet
state
domestic
a
founded, they
philosphy.
say,
many
the
on
on
policy
same
points in this
philosophy,
the
and particularly in
in which it has already
way
been
applied
in
practice
made
be
before
stressed
in
the
States
is
striving to
the Asian people or to
people
what
economic
their
any
to
halt
other
political
institutions
and
should
be.
opposed to the spread of
are
Communism
because
man
a
but
of-
it
and evil—questions
involving the ultimate moral na¬
the
of
the
of
Senate, appointed
to serve as Secretary of
our
foreign affairs.
This right
behalf results
directly from the constitutional
processes by which the American
people provide a government for
themselves in an orderly, clear
speak
on
your
and democratic manner.
little
A
there
over
-
The Asian peoples for
several
decades
have
dividual
ago
one
That claim was based not on any
Constitutional
procedure,
or
en-
in a revolution in which
they have been trying to throw
off the poverty and oppression of
past centuries.
They have been
striving for independence, better
gaged
education, more widespread ownership of the land and control
over their own destiny,
It is
an(j
no
our
accident that their goals
g0ais
are
the
same.
The
American peopie have been the
leaders in a revolution that has
century and
a half, a revolution by the cornmon
people.
And the basic objective of American foreign polfor
a
icy is to make possible a world in
in
use
of
society values the in¬
as
requires
an
of
end
in
himself. It
him
only that selfdiscipline and self-restraint which
makes the
rights of each individual
with
the
rights
of
other individual. Individual
freedom, therefore, implies indi¬
vidual responsibility not to ex¬
ercise
freedom in ways inconsis¬
tent with the freedom of other in¬
dividuals, and responsibility posi¬
tively to make constructive use of
freedom in the
building of
a
just
society.
In relations between nations, the
prime reliance of the free society
is on the strength and appeal of
its principles, and it feels no com¬
sooner or
later to bring all
societies into conformity with it.
It does not
fear, rather it wel¬
diversity and derives its
strength from freedom of inquiry
comes,
and tolerance even of
antipathetic
ideas.
on
is
the past
been
profoundity
no
gloss over
this conflict
or
view.
pulsion
thirty years
into power in
of
the great countries of the world
a group of people who also claim
the right to speak on your behalf.
came
There is
man.
The free
any expression of the will of those
the means, the tool, by which So- whose representatives they pro¬
viet Russia is attempting to ex- fessed to be.
It was based on a
tend its absolute domination over claim which those men made to a
the widest possible areas of the
world.
of
ture
attempting to ignore
every
has, in accordance
concep¬
of good
sponsibility to direct the foreign
of
too
involving the most basic
tions
compatible
a
not because we want to dictate to
.
numerical
middle
democratic solutions.
say
State to assist him in the conduct
here
stress
We frequently hear that the
been going on
European sat- work in the spirit and within the
llites with the emergence of the framework of tfie United Nations
which
Soviet
our
aid added to energetic meas-
by
I
anticipated*/We
will doubtless be situations where
ures
to Spread
what type of proj- the spread of Communism. That
immediately needed is far too negative a way of putones
might be got ting it.
Of course, we want to
almost immediately, halt the spread of Communism,
for
the
with law and with the advice and
Opposed
like
point
United
by
are
would
ten.
develop their resources.
our
We welcome the
of Soviet Communism
•
ECA Mission,
the gains already made and to
lay out what still needs to be done
to
ex-
From what I have said today
Why We
Deputy
Quirino we are going to send out
regard to Philippine independ- an economic mission to work with
nce.
Our
recent
participation the Philippine Government to dehrough the United Nations in the termine how best to consolidate
re
Communism for
reason that they opposed Naziism,
Japanese Imperialism or any other
consent
Griffin
rf
Utch-Indonesian
aaencies which already
determine
Point Four program.
Far
co¬
statement of them,
mission*
a
record
our
Soviet
an
The President
our
special ties
ast,' we have urged them to do with the Philippines.
There is
ikewise and have given substan- much still to be
repaired in the
ial
and
tangible assistance
in economy of the Islands torn
by
rder dhat such objectives might
war.
At the request of President
e
opportunity fairly
appraise their interests, oppose
to
_
the
institutions.
and we
peoples, when
soundly taken.
R.
has
people,
Asian
have
been
make on their
Pacific, we not only to determine suitable
fostered national independ¬ projects for quick action, but also
and the growth of free demo¬ to
attempt to la,y some of the
ence
they
had
the
of
the
his
profit, his
of
of the increase of the class
a
as
relations of the American people.
formerly
will
Communism
American
the
been-
problems in Asia, it is evident
that we beiieve these points are
dispatch
mission
and
(5)
pSe the values in which
specific and con¬
in Southeast Asia has
late 19th century, when we under way
lirselves first became responsible The mission
in
The
believe
has
about our own attitude toward the
...
California,
that
of
rate
been borne out
by the experience
of the societies of the West.
Marx
did not foresee the
the world since
over
prediction
cline
accumulation,
the
gle: none of these calculations has
P. can only
expression; of
tHq
territories
all
to
as
im¬
fathers by free choice worked out
£onal
composed of technicians under the
of
order
assist in
crete
ects
of
movement
wif
k
A
spot
toward
revolution
capitalistic
law
It is"
Soviet
ing thing, has survived to this day
as
an expression
of the will of
entire people. A President is
duly elected under this Constitu¬
tion with a heavy and solemn re¬
tf° f
,,
_
n
these
the
peoples
did
and
in
houses
maintain- their
nrpD n^pnai^
nf
own oenait.
self-government
and national independence. Since
support
China
peace
!lndPrW^ntdheaPten^enhCfi 14 mere£ I
This
and
to
mestic
ISIZ tllZ: methods of cooperative action in
free! ;^£fa^their vital in"
WP
who seek to
consistently
has
will continue to
supported
wfff"thiT
haydt0honeedCh Thai
.
countries, and subject to
propaganda designed to turn them
or
scale
bringing
own way of
of
of
55
Hfe calls for a sustained and de- about our foreign relations is not Soviet
Union
and
elsewhere,
termined effort in all fields, (3) derived from any claim on his which, are not only deeply re¬
accept the fact that appeasement part to special knowledge ot wis¬ pugnant to us, but raise
questions
a
great disappoint
ment that help which we rendered
on
preservation of theil
tool
world conspiracy
thought of.
an
enumeration
of
six
principles
through which the real democra-
They must (1) understand the
©pupation which broke down Japan, Korea, the Philippines, In- true causes of present internationifiany long-standing habits of life, donesia, and Thailand, for ex- al tension, (2) realize that the
cYen
ocratic
Australian for-
Spender, the Minister for External
Republic of the United States Affairs, on March 9.
$100
Indonesia. In still other
cases,
the need may be for technical assistance.
:
a
eign policy made to the Australian
House of Representatives by Mr.
others,. it
loans, such ds
of
Thirdly, an¬
of
difficulties
%
be grants
recent
the
the
others from the
trade routes and
roup
rest
can
participate fully and
appropriate to the partic-
military assistance.
may
connections.
other/rg
peoples
their
way.
must
which
to
not
perialism perverts the real dem¬
are
stability is achieved, as experience
is accumulated and technical and
financial assistance becomes effective, I have no doubt that the
re-
attempted
armed
the
this
log agreement about the nature
prudent of the probem in Asia. For ex-
war;
of
with
situation; it must be fitted
into the responsibilities of
others,
and it must be within the
dependence of these countries.
Problems come, second, from seriod; economic dislocations.
Some
these
Their
flourishing trade
a
because
before
which
opposed
Communism
only in Asia but elsewhere.
long
on
are
we
of
on
Their countries have rich
resources
why
spread
going
and demonstrated intelli-
basis for
is
the
ele-
gence.
a
That
dis-
responsibilities
won
all peoples, including the
peoples of Asia, can work, in their
own
way,
toward a better life.
be
build.
may
(1247)
which
sound
situation
peoples
natural
to
^.e difficulties of organizing and capabilities of our resources.
In
some
situations it will
idministering the new-found in¬
or
the
are
na-
effort,
energy
vide
the
ular
experiencing
are
is
support free peoples who
a
gov-
governments which
are
There
present.
are
President
The
fact
determination
succeeding if these other
ponents
area.
'
the
for
to
There
in
ments
need
need
trative experience. and training
they need, these can be overcome
by the application of their own
free
largely common to the
iey flow,
first, from< the
hat, except in Thailand, the
which
is
no
structive
own
which,
and
is
couraged.
guaranty that itcan produce those
results, but it has a good chance
added
circumstances
problem
There
there
up enthusiasm, pride and
patriotic support for their own institutions. If they lack,, at the moment, the technical and adminis-
jigether, create these difficulties
re
missing
are
exist, where the people are behind their
government, American
help may be "the indispensable
element required to produce con-
pressures
seem
the
but
newly
calling
will
certainly
come
is
Asia
programs
States and other free
tions.
else-
as
of
their
stability and ecodevelopment aided by the
these
sisting
we
be effec-
can
Asia,
nations
with
political
nomic
the
to the
problems of Southeast Asia, which
lems of China,
Club
might otherwise-be solved. Where
policy
Passing from the difficult prob¬
Southeast
where,
his
iil Problems of Southeast Asia
Press
free
Washington,^. pointed out that United
tive
whether they are right or wrong.
le
for
the
in
exports.
Yet those same
from America were less
than 5%
The
proceeding
over
„
speaking to
it
,
exports
In
is
extort
supplied over
59%
of
China's
imports
and
bought approximately a quarter of
China's
of ^Pakistan,
India, and in cooperation with other free
CeylQt$v Indonesia, and nations which are in a position to
Philippines,'wfth the full con- assist.
them.
thrust
to
China,
upon
a
In
us.
entirely clear
desire
no
CHRONICLE
nations
^
have
we
the
had earlier exercised control
V-I want to make it
that
this
FINANCIAL
Burma,
sent and cooperation of those who
China.
&
No Moral
Compromise with :
International Communism
We
see
can
no
moral
com¬
promise with the contrary theses
monopoly of the knowledge of
of international Communism: that
what was right and
what was
the end justifies the means, that
wrong for human beings.
They
any and all methods are,
there¬
further profess that their claim is
fore, permissible, and that the dig¬
based on a body of thought taken
nity of the human individual is
over in large part from the writ¬
of no importance as against the
ings of a mid-19th Century Ger¬
economist and
man
theorist, Karl
interest of the state.
To
Marx.
I have
the
no
of
errors
of
other
desire to debate here
one
what
version
is
today
or
an¬
called
"Marxism." But I think it must be
recognized in the light of the ex¬
perience of the last hundred years
that
premises on
his thought
have been belled by the known
facts of what has actually hap¬
pened in the decades since Marx
of
many
which
Marx
made v his
the
based
stiudies.
Marx's
law
minds, these principles
our
in their
mean,
practical applica¬
tion, the arrogation to individual
human
leaders, with all their in¬
frailties and limitations,
evitable
of
and
powers
most
of
us
pretenses which
be willing to
would
concede
only to the infinite wis¬
compassion of a Divine
Being. They mean the police state,
dom
and
with all that
tation
of
:
implies; a regimen¬
the
worker
Continued
on
which
is
page
57
56
THE
(1248)
COMMERCIAL
The following statistical
Indications of Current
latest week
week
Business Activity
Latest
(percent of capacity),.
operations
steel
Indicated
<3teel
Condensate
and
oil
Crude
——..Mar. 26
——
Mar.
Mar.
Mar.
Mar.
< bbls. >—
< bbls.»
oil output (bbls.)
fuel oil output (bbls.)
Mar. 11
refineries, at bulk terminals, in transit and in pipe lines—
#3tocks at
Finished
'
(bbls.)
Previous
Year
Month
Ago
$96,231,000
$106,636,000
$89,850,000
$1,414
*$1,496
$1,172
1,078
*1,139
903
600
650
400
246
*252
271
70
69
104
75
77
73
25
•26
27
50
*51
51
101
*106
89
28
29
25
20
22
21
24
*23
11
17
•19
13
12
13
101.1
DEBITS —BOARD
BANK
THE
Month
1,863,800
1,692,800
4.826.950
4,909.250
4,951,250
5,180.700
15,314,000
5,316.000
5,362.000
5,452,000
17,608,000
17,707,000
17.837.000
17,267,000
2,429.000
'2,134.000
2,327.000
2,093,000
6.250.000
7,048.000
6.741,000
7,325.000
8,210,000
8,140.000
8.693.000
8,125,000
of
134,203,000
135,234,000
14,407,000
15,466,000
17.120,000
18,517.000
46,575.000
51.670,000
60.602.000
51,804.000
—.Mar. 11
44,544.000
46,086,000
52,865,000
58,707.000
(bbls.) at
Total
February
construction
Residential
129.362,000
'
CONSTRUCTION
ENGINEERING
—
.
Commercial
Stores,
Other
restaurants
70"/,9G2
$574,395
$568,841
709.326
$313,611
§542,039
621,334
f
Total
U.
Private
Construction
construction
Mar.
—
—Mar.
—.—
Mar.
——Mar.
S.
:
Farm
recreational
and
types
construction
—
Public construction
State
municipal
and
—
$120,047,000
$127,282,000
'
146,597.000
122,135,000
85,034,000
59,823,000
C6,610.000
88,432,000
34,963.000
67,454.000
58.394,000
21,648,000
76,547,000
,
Public
:•
Federal
•
8.216,000
*-r.——Mar, 16
—~ ■————
-
—
29,364,000
tary
•
,
anthracite
Pennsylvania
—i.Maiv 11
(tons>_.——.
Beehive coke (tons),...——;i—
DEPARTMENT
SALES
STORE
AVERAGE
TEM—1936-31)
.
—
2.592,000
3,075.000
-
1,202.000
662.000
701.000
19,300
*2,800
3,900
Mar. 11
—
——.
13,200,000
10,682,000
All
Sewer
143,500
244
238
256
-Mar. 13
G.015.327
5,936,536
5.931.351
5,495,769
(COMMERCIAL
FAILURES
public service
INC.
STREET
INDUSTRIAL)—DUN
—
—
—
BRAD-
&
213
221
203
—
,
n
,
*24
a
142
103
210
(000's
75
77
.6 d
*40
21
25
*25
U.
S.
21
10
55
*70
44
45
7
6
43
12
$530,200
$1,497,400
r
-
5£
">fc
'
3c
.J
,
DE-.
Month
—
of
—
COTTON
SEED
$532,110
PROD¬
COMMERCE—Month
OF
.
REPORTED
—
COMMERCE
AND
9
12
—
omitted)
UCTS—DEPT.
i
40
45
enterprises.-
PUBLICLY
—
OF
SEED
COTTON
,
development——
CORPORATIONS
S.
PARTMENT
January
■
public
DIVIDENDS
U.
—,
water—i—_J
other
153
267
I
—
and
and
BY
AND
■
161
*357
-
facilities
naval
Miscellaneous
CASH
POISON ELECTRIC INSTITUTE:
Electric output (in 000 kwn.;_
•
*
nonresidential.
Conservation
All
253
46
40
1
.
24
140
—
institutional
and
other
Highways
700,000
—Mar. 11
25
'
...
Military and
RESERVE SYS-
INDEX—FEDERAL
100
25
"
MINES):
I—Mar. 11
23
336
building
building (other than mili¬
naval facilities )—+—
or
Hospital
—
10
224
156
...
Educational
•
-
COAL OUTPUT (U. S. BUREAU OF
Bituminous coal and lignite (tons)
17
226
Nonresidential
38.090,000
13,315,000
11,835,000
13
12
220
41
——;
I
construction
Residential
.
-•
Telegraph.
and
Other public utilities..:
_
■
•
—
„—:
Telephone
.
•
•
'■
$210,567,000
—
Public' utilities
>,
$213,207,000
Institutional
and
Remaining
•
16
16
16
16
garages
buildings
Educational
,
'
and
nonresidential
buildings
loft
Religious
NEWS-
ENGINEERING
RECORD:
———
Industrial
Railroad
CIVIL
millions):
(in
—
(nonfarm)——
building (nonfarm) ——
Nonresidential
126,183,000
$587,655
OF
building
Hospital
—Mar. 11
Mar. 11
from connections (number of cars)
freight received
Revenue
Feb.
of
—
DEPT.
S.
construction
new
Private
SYSTEM—
thousands)
(in
CONSTRUCTION—U.
Social
ASSOCIATION OF AMERICAN RAILROADS:
Revenue freight loaded (number of cars)
GOVERNORS
OF
RESERVE
FEDERAL
Warehouses, office and
Mar. 11
Mar. 11
at
and distillate fuel oil
Residual fuel oil (bbls.) at
oil,
Latest
Month
—Mar. 11
gasoline (bbls.) at
unfinished
and
Kerosene
Gas,
11
11
11
11
of that date:
Ago
LABOR—Month
—Mar. II
—
are as
Year
83.8
1,711,300
of quotations,
cases
either for the
Ago
39.3
1,820,500
in
or,
are
Month
of 42
(bbls.
average
Gas, oil, and distillate fuel
Residual
that date,
„
.
Gasoline output (bbls.)
output
on
production and other figures for the
cover
Dates sfrown in first column
month available.
BUILDING
output—daily
gallons each)
——
Crude runs to stills—daily average
Kerosene
95.9
Mar. 2j
INSTITUTE:
PETROLEUM
AMERICAN
Week
tabulations
OF
Equivalent to—
ingots and castings (net tons)
-
Previous
Week
AND STEEL INSTITUTE:
AMERICAN IRON
or
month ended
or
Thursday, March 23, 1950
CHRONICLE
FINANCIAL
&
of
January:
IRON AGE
Cotton Seed—
PRICES:
COMPOSITE
Finished steel (per lb.)_.
Pig Iron (per gross ton)—
Scrap steel (per gross ton)
1—:—Mar. 14
Mar. 14
r
—•
J3.837C
$27.92
Mar. 14
—
$■16.33
3.754c
Received
at
$46.74
Crushed
(tons>
$35.5o
Stocks
$27.25
$27.12
mills
3.837c
$46.38
3.837c
$46.33
———-
;
—
211.813
449,701
178,929
(tons)——
(tonfc) Jan. 31———
654,340
677,438
613,834
1,408,603
1,884,014
1,664,813
188,390,000
Crude Oil—
Stocks
METAL PRICES
Electrolytic
IE. A
J. QUOTATIONS):
N.
Domestic
refinery at.
refinery at
Export
Straits
Lead
tin
York)
Lead
Zinc
———
at
:
1—
'*
'
'
1 '
13.290c
18.200C
23.200c
13.425c
13.425c
23.500c
76.500c
74.500c
74.500c
103.000c
Mar. 15
10.500c
12.000c
12.000c
21.500c
...Mar. 15
10.300c
11.800c
11.800c
10.000c
9.750c
9.750c
...*,—Mar. 15
...—
< '
13.200c
18.425c
—Mar. 15
—T
.
at—
' t "•
H
—
•
—
Louis)
(East St.
—.—...
at-.-
at
Louis)
(St.
Mar. 15
———Mar. 15
—
—
(New York)
(New
(pounds)
Produced
copper—
(pounds) Jan. 31
Produced
Stocks
(tons)
Shipped
;
103.25
"103.44
101.70
11G.41
11G.22
116.41
113.12
Stocks
Mar. 2r
121.25
121.25
121.46
119.00
Produced
Jar. 21
119.82
120.02
120.02
Mar. 21
11G.02
115.32
115.82
112.19
Mar. 21
103.83
108.70
108.70
104.83
103.15
Aa
Baa
,
U.
S.
Aa
BOND
YIELD
Government
DAILY
Mar. 21
111.62
111.62
111.62
108.34
117.40
117.40
117.40
113.89
.vlar. 21
120.22
120.22
120.22
117.40
-
A
-Mar. 21
2.26
2.26
MOODY'S
COMMODITY
INDEX.
NATIONAL PAPERBOARD
Orders
received
2.25
2.38
Mar. 21
2.33
2.34
2.83
3.00
-Mar. 21
2.59
2.50
2.58
2.70
-Mar. 21
2.66
2.65
2.65
2.79
-Mar, 21
2.85
2 36
2.86
3.05
Baa
Mar. 21
3.23
3.24
3.24
-Mar. 21
3.03
3.03
3.03
•
'
OIL,
PAINT
AND
DRUG
AVERAGE = 100
REPORTER
Stocks
Jan.
Produced
Shipped
Hull
2.73
2.73
2.96
2.G4
2.64
2.64
2.78
.Mar. 21
355.9
355.9
355.7
368.9
-Mar. 11
219.523
249,542
201.511
158,333
191,702
195.463
209.827
162.692
39
83
93
80
395,211
371,003
365,243
278,632
121.9
121.3
120.9
137.4
J
THE
FOR
ODD-LOT
ACCOUNT OF
LOT
DEALERS
AND
SPECIALISTS ON THE N. Y.
EXCHANGE—SECURITIES EXCHANGE COMMISSION:
Odd-lot
sales
by dealers (customers'
Dollar
of
As
Number
of
orders—Customers'
Customers'
of
other
Dollar
I.
total
sales
short sales
Customers'
other
III.
sales—
value
Short
sales
Other
sales
.WHOLESALE
1926
All
=
33,790
Banks
159,617
1,628
1,702
915
1,196
1,394
1,314
1,907
1,270
6,759
7,164
12,172
3,482
3,628
3,496
3,887
3,125
1,743
$26,940,800
$27,599,995
$27,579,534
1,763
650,791
1.014,757
491,049
4
$32,8)9,477
$26,303,809
$39,840,155
$18,690,884
4
27,718
23,960
35.523
16,183
DEPT.
(000's omittedi
31
AVERAGE
(125)
,i—
1
(25)
(lOt
STOCK
firms
extended
hand
on
of
value
Market
value
3.33
6.28
6.85
$953,059
$901,211
4.70
of
balances
debit
net
in
banks
in
S
U.
credit
free
listed
U.
on
other
87,576
554,966
77,940,210
128,020,569
94,413
543,041
181,490
176,501
155,286
185,727
180,945
156,013
46,605
51,316
46,484
309,059
669,388
78,638,810
bonds
on
$526,649
57,529
349,532
565,359
65,324,673
131,863,412
111,722
201,486
47,269
306,130
669,089
balances..
shares
listed
of
accounts—
margin
customers
to
and
borrowings
borrowings
Member
3.37
6.24
of
EXCHANGE— As
customers'
Market
Member
3.28
6.05
'
omitted):
carrying
of customers'
Credit
4.55
— ...—
(000's
28
4.32
(200)
YORK
Feb.
8.39
5.35
6.49
——
,.
yield
7.12
7.10
5.33
——
——
(15)
Average
6.50
6.85
—...—
....
(24)
Insurance
SOFTWOOD
4
113
141
317
227
4
27.605
23,319
35,206
15,956
Production
a
782,446
660.535
998,842
426,529
Shipments
4
4.073
5,464
11,036
8,627
4
778.368
655,071
987,806
417,902
4
$27,697,212
$23,227,829
$35,505,730
$14,180,706
4
246,820
204,980
307,570
133,080
4
246,820
2041980
3071570
133,080
4
272,720
206,230
340,560
PLYWOOD
MERCE)—Month of
127,777,276
...
Govt, issues—
collateral
S.
(M
sq.
Stocks
(M
COM¬
equivalent)
3/8-in.
3/s-in.
ft.
sq.
OF
(DEPT.
December:
ft.
and
consumption
equivalent)
%-in.
of
<M
feet.
sq.
equivalent)
at
end
'
Stocks
STEEL
__
NEW
SERIES
—
U.
DEPT.
S.
OF
204,240
}
Textile
i
Fuel and lighting materials
>
Metals
"
products
metal
—III—II
products
.
materials
allied
'
sale
producers'
orders
for
152.2
159.1
164.0
161.1
161.5
BUREAU
Mar. 14
201.0
201.8
202.6
207.1
(000's omitted):
Mar. 14
155.3
156.0
156.8
163.0
Exports
Mar. 14
214.3
215.8
215.5
222.2
Imports
Mar. 14
145.3
145.4
145.3
151.0
136.8
170.9
137.2
144.4
130.1
130.4
134.0
169.3
174.5
193.2
193.2
191.5
199..6
115.8
115.9
115.4
122.3
Mar. 14
Mar. 14
f
effective Sept.
1, 1949.
.
finished
for the
r
'
,*
steel
7
UNITED
UNITED
i"
h
1937 to
sale
STATES
OF
tons)
end
at
EXPORTS
of
AND
CENSUS—Month
84.508
76,437
157,395
53,079
50,685
116,285
31,429
25,752
of
41,110
122,887
117,865
354,458
622,700
$942,900
605,100
$1,104,200
590,300
$256,395,406
$256,892,405
$252,747,393
5,186,077
5.048,918
5,290,704
$251,209,329
$251,843,487
$247,456,689
:
month
IMPORTSof January
-
;■
STATES
GROSS
DEBT
GUARANTEED—(000's
As
Feb.
General
composite was revised for the
years
"
63,683
69,670
343,673
158.5
169.3
■
76,007
230,154
—
(short
use
-
158.0
130.2
month..
COMMERCE)—
OF
tons)
152.0
136.4
of
tons)
own
165.5
reaw^fVdlJte S*1
barreLs
foreign crude runs. tThe weighted
lUTto
liftinifufiveoff!
S®,d on the avera*& product shipments
to, 1948
inclusive.
»Reflects effect of
five-day week
(short
153.7
169.3
77.402
218,287
scale)
tons)
151.9
Net
AjHo
(DEPT.
Mar. 14
14
end
at
December:
(short
Mar. 14
' Mar.
ft. log
<M
scale)
Mar. 14
Mar. 14
IIII—IIIII"
IIIIIIIII I"
products
of
For
Unfilled
Mar. 14
I
~~
log
For
(short
Grains
ft.
CASTINGS
Shipments
LABOR—
commodities
Chemicals and
(M
Month
dealers—
shares
month
Consumption of logs
100:
Building
187,511
179,984
——
11 ^Utilities
17,983
808,763
„_
PRICES
and
202,785
.
Round-lot purchases by
of
218,865
192,703
240,661
YIELD OF
206 COMMON STOCKS—Month of Feb.:
'
Round-lot sales by dealers—
Number
168,878
264,805
sales)-
sales—
sales
shares—Customers'
Customers'
155,648
216,847
———•
—
WEIGHTED
Total
short sales.
Customers'
Number
total
97,957
126,184
pounds)—
(1.000
etc.
31——
January
MOODY'S
purchases)—
Odd-lot purchases by dealers (customers'
143,813
I-.*
—,
—
....
MONEY IN CIRCULATION-TREASURY
Cash
4
—
—
Jan.
Total
value
158,420)
Produced
-
21,774
110,166
152.092
—.—
Shipped
ODD-
27,345
—
grabbots,
Stocks
STOCK
4
106,610
Jan. >31
Member
-STOCK TRANSACTIONS
253,896
(1,000-lb. bales)—
Shipped
Motes,
NEW
.Mar. 17
272.678
290,489
-
31—
—
Fiber
Railroads
INDEX
31
Jan.
__
Industrials
PRICE
309.772
255,146
3.23
2.73
-Mar. H
100,297
288,029
3.46
-Mar. 21
.Mar. li
142,801
(tons)
Shipped
ASSOCIATION:
(tons)
130,378,000
175,684
(tons)
Produced
—
156,949,000
153,830,000
(tons)
Linters—running bales—
AVERAGES:
Bonds
202,869,000
172,940,000
145,547,000
31
Jan.
(tons)
Stocks
MOODY'S
218,210,000
175,927,000
Hulls-
117.20
•Mar. 21
•
255,630,000
(tons)
Mar. 21
—
-—
»*.——
17.500c
•'
Produced
MOODY'S BOND PRICES DAILY AVERAGES:
U. S. Government Bonds
;—
169,804,000
Meal—
and
Cake
195,053,000
190,049,000
(pounds)
Consumption... (pounds)
21.300c
181,587,000
217,619,000
193,539,000
(pounds)
Oil—
Refined
Stocks
171,922,000
210,057,000
—
Jan. 31
(pounds)
Shipped
DIRECT AND
omitted):
!
28
fund
$743,600
balance.
ddbt
Computed annual rate
<
,
2.204%
2.205 %
«-7«
•*
2.225%
1940 Inclusive and
4iKi;
-* *
>
^Revised figure.
'
"VI
'*
-■**
-
Volume 171f
Number .4^92
THE
COMMEHCIAL
&
FINANCIAL
CHRONICLE
Continued from
page 55
>
.
alter the international climate
-
•
,
<r>
_
•
,
"
the
Our Asiatic Policy and
United States-Soviet Tension
all
appear to
living;
the
a
great
Here
is
leaders
joined
Tehran
that
"with confidence of the day when
all peoples of the world may live
moral
a
evaded.
Let
of
issue
It
make
us
in
the
of
the
cannot
be
mistake
no
about it.
and
evil
can
concurrently in the
free
elections
ment in
within
nation, and
every
between
be
indi¬
every
human group.
every
good
confined
That
it
and
to
with
a
basic ele¬
need
recognized
and
will to define the terms of
a
German treaty could be
a
formulated
tending
plex
is
interna¬
acceptable settlement.
an
that
peace,
struggle will go on,
has, in the wider
always
With
evil
govern-
under
observation
The
theater of the human spirit itself.
But it also does not follow from
which, while not
all
solve
to
and
bitter
pre¬
of the
problems
com¬
of the
ours,
German situation, would, never¬
theless, go far toward a relaxation
of a set of major tensions.
With regard to Austria, that un¬
happy country is still under oc¬
exist
cupation because the Soviet lead¬
selves do not find
the
impossibility in
prospect of co-existence with
the soviet system.
However much
t
we
may sympa-
thize with the Soviet citizens who
for
bedded deep in
reasons
history
it, we
attempting to change the
obliged
are
not
are
.
in
tional
exist
will necessarily be able to
concurrently. That will de¬
pend largely on them, for we our¬
to
governmental
of
t
peace
security.
They
this co-existence of good and evil
that the two systems, their and
•
of
give reality to this
pledge and to the interests of all
whole great realm of human life.
as
•
treaties
accept
would
do
ments.
.!
can
and
cannot
s
We
world.
Good
the
under
social
or
Soviet
regime,
live
Union.
structure
The
Soviet
however,
has devoted a
major portion of its energies and
' resources
the
to
attempt
to
im¬
pose
its system
In
attempt it has shown it¬
prepared to resort to any
other peoples.
on
this
self
method
or
subversion, threats and
tary force.
Therefore,
•i
to
are
mili¬
even
I
two
means
must
be found
world
from
the
systems
acceptable
some
to
free
destructive
the
ten¬
sions and anxieties of which it has
been
the
victim
years
and
which
can
in
the
these
past
continuance
hardly be
people.
in
the
of
in¬
terest of any
I
you
which
difference
fied and
must
be
identi¬
it
is
which
international
the
leaders
Communism
more
tolerable to everyone?
There
are
a
number
things
they could do, which, while leav¬
ing much yet to do, would give
world
the
confidence
new
in
the
possibility of peaceful change, in
the
principle and processes of
peaceful settlement as an effec¬
tive
of
means
solutions in
finding workable
of disagreement.
areas
A Formula for Eud of Cold War
Let
us
where
look
we
most
and
closely
first
at
the
points
they are perhaps
in
contact,
and
where the establishment of peace
in
its
narrowest,
most
limited
is
dangerously impeded by
the absence of common ground.
sense
peace
with
tries.
This
define
the
is
the
terms
defeated
of
coun¬
deeply
disturbing fact.
For our part, we
do not intend nor wish, in fact we
do not know how, to create satel¬
lites.
Nor
tlement
can
which
a
grave,
a
accept a set¬
would make Ger¬
we
Japan, or liberated Austria
satellites of the Soviet Union. The
many,
experience in Hungary, Rumania,
has been one of bit¬
and Bulgaria
ter
disappointment and shpgking
of
obstruction
Nations
and
could
if they believe the
United Nations is, as Stalin him¬
self has recently called
it, a se¬
rious
act
as
instrumentality
for
the
maintenance of international
Their
policy
boycott
is
mines
decision.
selves
the
Indeed,
to
in
a
they
last
the
Resolution
restated
and
to
Members
was
when
they
of
which
solemnly
reaffirmed the prin¬
of the United
Charter
pointed
in
Essentials
purposes
Nations
This
fall
against
ciples and
them¬
which
and
practical
should
which
steps
take
to
support
the peace.
A
respect for the expressed will
of the
to
majority is
fundamental
as
international organization
as
it
sleight
Austria.
our
-
.
With
regard to Japan,
we
feel
that the Soviet leaders could
rec¬
ognize the interest which nations
than
other
the
members
of
the
Cduncil of Foreign Ministers have
in
Japanese
a
could
refrain
tions
and
which
from
insisting
block
treaty
peace
taking
and
posi¬
procedures
on
progress
*
toward
a
generally, there
many points where the Soviet
leaders could, if they chose, relax
tensions. They could, for example,
permit the
mission
duties
United Nations' Com¬
in
Korea
to
out its
carry
by
allowing the Commis¬
sion's entry into North Korea and
by accepting its report as the basis
for
peaceful settlement of that
a
could
repatriate
of
oners
war
Japanese
pris¬
from Siberian camps.
They could refrain from subvert¬
ing
Use
(2)
the
to
which
of Force:
whole
we
are
group
With
of
regard
countries
accustomed to think
Satellite areas, the So¬
viet leaders could withdraw their
as
the
military and police force and
frain
from
re¬
using
the shadow of
that force to keep in power per¬
sons
or
regimes which do not
hand
We
The
or
do
which
themselves
we
members
of
have
commended
to
also
the
United
the
of
Nations
themselves
spect
Let
the
Soviet
Union
put for¬
ward in the United Nations genu¬
proposals
work
real
conducive
to
the
of peace, respectful of the
independence of other gov¬
ernments, and appreciative of the
role
which
the
United
could and should
Nations
play in the
doubtless
have
majority
with them.
We
will
rejoice to
see them in such a majority.
We
a
will be pleased to be a member of
it ourselves.
join
in
us
effective
seeking
realistic
and
for
the
arrangements
control of atomic weapons
and the
limitation
in
eral.
for
of
armaments
Ke know that it
them
their
under
contemplate
gen¬
is not easy
system
to
the
functioning on
territory of an authority in
which
people would participate
who are not of their political per¬
their
suasion.
If
an
re¬
atmosphere
is
the
to
conforming
manner,
accepted
codes
of
diplo¬
The standards of conduct of
own
representatives
from
more
than
our
known
are
a
spirit
of respect and confidence
periods of many
decades
over
have
certainly remained
for it.
worse
those
The
the
none
independence of
countries has
been
not
un¬
dermined; their peoples have not
been
corrupted; their economies
have
been
not
scathed
by
sabo¬
When
we
sentatives
treated
we
ganda
find
now
machines
with
danger
that
reiterating
such
them
that
blind
the
plications of such
In
leaders
could
ad¬
we can¬
obvious
im¬
attitude.
an
Distortion
Others:
believe
are
faith, and
to
that
pregnant
cannot
we
—
is
insinuations
vanced in good
(7)
criminals,
as
sinister people and
with
be
repre¬
great official propa¬
see
are
contact
our
of
general,
the
of
Soviet
refrain, I think,
systematically distorting to
from
their
own
peoples the
world
outside
picture of
their
borders,
and of our country, in
particular.
We are not suggesting that they
become
propagandists
for
any
country or system other than their
But
own.
the
Soviet
leaders
know, and the world knows with
In
this
connection
we
do
not
insist that these governments have
particular political or social
What concerns us is
any
complexion.
we
deal
with
these
governments,
that we are dealing with some¬
thing representative of the na¬
such
a
situation would be really
incompatible with the security of
the Soviet Union.
This is
good
spirit
question of elementary
faith, and it is vital to a
of
a
confidence
that
other
treaties and other agreements will
be honored.
Nothing would so
genuine
responsibility
to
mankind
is
widely
present
in
this
world.
Many
able
administrators
and
be
only too
happy, regardless of
complexion, to take an
elevated and enlightened view of
the immense responsibility which
political
would
men
rest upon them.
who would
for
powers
of
the
scorn
There
purpose
intrigue and destruction.
an
established
which
controlled
either
or
are
to use their
negative
believe that
We
authority could be
would
not
be
subject to control by
ourselves
the
or
Soviet
Union.
tional
identity of the peoples in
question. We cannot believe that
of
(5)
Attempts
at
Undermining
Governments:
The
were
the
wartime
from
the
we
to
morbid
conclude
fancies
which
their
propaganda
exudes
of
capitalist
encirclement,
of
a
a
United States craftily and system¬
atically plotting another world
war?
They know, and the world
knows, how foreign is the con¬
cept of aggressive war to our
philosophy and our political sys¬
tem.
They know that
asking
be
to
the
we
are
not
of
any
objects
insincere and effusive demonstra¬
But
of
sentimental
friendship.
feel that the Soviet lead¬
we
ers
other views
the Russian
These
which
leaders
friendship
an
outward
and
respect.
of
some
in
however,
who
which
and
could
do,
will
Soviet
We must
trayed
of
their
system
we
They
are
not
things that go to the
depths of the moral conflict. They
not things that promise the
Kingdom of Heaven. They have
formulated
been
by
moralists
but
ernment,
anxious to
as
not
us,
servants
get
as
of gov¬
with
on
the
practical problems that lie be¬
fore us, and to get on with them
a
kind's deep
from
consistent with
manner
longing for
fear and
ourselves
respite
a
Nor have they been formulated
a one-sided bargain.
A will to
binding,
would
peaceful
settle¬
be
required of all
participants. All would have to
produce unmistakable evidence of
their good
to
accept
faith.
All would have
agreements in
the
ob¬
to
be
be¬
understandably
role
We
tive
in
past
the
loath to
international
of
will
take
future
in
whenever
as
the
seeking
initia¬
have in
we
agreement
there is
any indication
would be a fruit¬
that this
course
ful
What is required is gen¬
one.
uine evidence in
in
words, of
the
an
immediate
the
move
I
us.
conduct, not just
intention to solve
problems and
tensions
see
Soviet
evidence
no
leaders
re¬
divide
which
that
the
will/change
their
conduct until the progress of the
world
convinces
them
that
cannot profit from a
tinuation of these tensions.
So
our
us
is not
It
is
not
the
of
free
and
needs
solve
nation
of
and
that
wisdom
other
which
one
devotion
can
benefit
discussion
be*
assistance
the
have
advice of distinguished
the
re¬
re¬
We have, had and
up.
to
this
in all walks of life.
ers
the
consideration
views
It is
the
and
continue
and
which
without
summoned
in
reality which face*
one
all
con-
that is easily charted.
nations.
quires
action
of
course
one
adopt
of
the
which
great
has
lead¬
We have
public
been
pro¬
ceeding in the democratic way, by
free inquiry and free expressionIt is my purpose
point
to
you
define
to
front
the
us.
in talking with
direction and
a
choices which
the
con¬
We need to stand before
world
and
with
own
our
purpose
position clear.
want
We
but not at any
peace,
ready to negotiate,
the expense of rousing
are
but not at
hopes
which
would
by new failures. We
be
are
equally determined to support all
real
efforts
for
peaceful
ments and to resist
The
times
lomacy
fense
and
kind
call
equal
the
can
tinue
to
for
dip¬
of de¬
Soviet expansion
of building the
in
which
flourish.
press
building of
total
a
task
of world
of life
settle¬
aggression.
the task
to
against
to
a
our
way
We must
con¬
with
the
ahead
free world which ia
strong in its faith and in its
terial
man¬
uncertainty.
by
faith.
good
vague
the
the
ours.
are
in
not, in our yearning for
by
are
play
dashed
and
placed
observed
havior.
We are always ready todiscuss, to negotiate, to agree, bttt
would
peaceful
be
can
be
unsubstantiated by good faith
solidly demonstrated in daily be¬
which
co-existence
through
are
false
and
must
hopes*.
generalities or
beguiling proffers of peace which
things
the
I
lived
leaders
allow
peace,
Soviet
permit the rational
of
the
busi¬
urgently te
that
has
reliance
which
the
that
so
postwar years can be san¬
guine about reaching agreement*
We
feel
re-
these
price.
so
re¬
you not to raise your
one
that
development
ments
of
fear,
No
might be presented to
people.
are
we
achieve
Government stands in
I
collaboration
now
a
and
international
needs
can
trolled by it
state
the
between the peoples of the Soviet
Union and other peoples.
to
means,
established gov¬
ernments with which the Soviet
of
world of hard
as
versive
normal
between the major allies was not
to be the beginning of a
happier
and freer era in the association
are
ten¬
present
anticipate
more
which
warn
they
that
a
be done.
free
Kremlin could refrain from using
the
Communist
apparatus
con¬
throughout the world
attempt to overthrow, by sub¬
to
concern
in
Established
to
the
could
diplomatic atmosphere, and
progress in the transaction of
what genuine
disappointment and
the people of this country
brought to the realization
of
some
sucker.
'
Motives
Soviet
future with greater
We could look forward
We
turn
the
tage.
than
more
the
than the eventual reduc¬
of
sions.
ness
a
scientists could be found to oper¬
ate such an authority who would
spirit
a
tion
some
representatives in
If
the
more
accepted
our
will not be obstacle*
cooperate.
face
such that all countries which have
practice, the declaration to which
they set their signatures at Yalta
concerning liberated Europe.
that
is
ready, a*
always will be, to»
But it takes
security.
laxed
ideas from other countries
the
to
century and a
half of American diplomatic ex¬
perience.
These
standards
are
they as well as we accept
this requirement it is because we
of
States
could join in
doing these
things I have outlined, we coald
to
macy.
believe
confidence
not and
all
helpful
peoples,
freely
ex¬
pressed through orderly represen¬
tative processes. In other words,
they could elect to observe, in
the
respective
United
peace.
one
which these represen¬
tatives could function in a normal
could at least permit access to
the Soviet Union of persons and
command
to
and
tions
have not hesitated to urge
we
that
treated
are
in
What
(4) Effective Control of Atomic
Energy: The Soviet leaders could
The
it has been and
Union
pres¬
ervation of world stability and the
cooperation of nations. They will
then
that
and
created
the
us.
Ready to Cooperate in
Settlement
are
pio-
commended
S.
Peaceful
the
everywhere with decency and
not
that
majority
a
on
any
control.
of
Nations Charter.
any
have
is
have
to
It
of
pressures
not
significant fact
posals
nothing
result
the
satellites whose votes
ine
In the Far East
of
part.
is
letter
U.
con¬
with
the end that the official
represen¬
about this situation.
not
There
the
of
which
all
nation*
have real confidence.
tatives of all countries
been
side.
and
servance
could
cooperate in genuine efforts to
find peaceful settlements.
Our at¬
titude is not
inflexible, our opin¬
ions 'are not
frozen, our position*
is to democracy.
We know that a
majority of the General Assembly
inconsistent
(6) Proper Treatment of Diplo¬
de¬
seem
entrench
Nations.
illustrated
Peace
and
that under¬
of
majority
minority position
United
voted
walk-out
concept
liberately
are
way now.
policy
a
the
of
They
is
to
across
matic Representatives: The Soviet
leaders could cooperate with us to
has
that they should be truly inde¬
Definition
of
Terms
of pendent national regimes, with a
of
their own
and
with
a
Peace: It is now nearly five years will
since the end of hostilities, and decent foundation in popular feel¬
the
victorious
allies
have
We would like to feel, when
been ing.
to
policy
United
spirit
United
artificial
(1)
unable
their
instead
Soviets, camouflaged in tech¬
nicalities, to maitain their forces
and
special interest in Eastern
of
of
United
which
the
of
could
do to make such coexistence
the
the
majority
native leaders to solve their prob¬
lems in their own way.
What
duct
in
efforts
national frontiers—a mode of
they
and
to live to¬
are
ex¬
could cooperate in
prevent,^indirect aggression
selves have generally been on the
political
a
gether, if not with mutual respect,
at least
in
reasonable
security.
later reconciled
be
general, it could desist from,
pendence of Austria is being sab¬
otaged by the determination of
want
the efforts of the newly in¬
dependent states of Asia and their
sooner or
if the two systems
true
In
and
when
not
liberated country's problems. They
wish, therefore, to speak to
about those points of greatest
the
could
as
the
treaty.
The
economic
inde¬
do
ers
are
the
if
co-exist,
in
has generally not agreed with the
Soviet Union, whereas we our¬
including treaty.
stratagem,
people
Obstruction
the
in
consciences."
own
this
struggle
t.
sires and their
With regard to Germany, unifi¬
cation under a government chosen
.within
•
and
in
vidual, within
!
in the pledge at
they looked forward
that
exist
which
lives, untouched by tyranny, peace
and
security.
according to their varying de¬ simply not acting that
which
Yet it does not follow from this
the two systems, theirs arid
ours, cannot exist concurrently in
j;
Soviet
to make
us
religions
nature.
The
embodied
free
clearest
allies.
denial of the
truths
world.
1
(3)
things which
wartime
the
of
drop
the
in
Nations: The Soviet leaders could
betrayal of the solemn pledges by
life worth
i;'
will
elections
of
states
pressed.
hardly distinguishable from slave
labor; a loss to society of those
fundamental
holding
satellite
is
to
progress.
allow
succumb
the
ma¬
The
alternative
free
nations
to
by one to the erosive
and encroaching processes of So¬
viet expansion.
one
We must not
must
slacken, rather
reinvigorate, the kind
we
of
democratic efforts which are rep¬
resented by the European'Recov¬
ery
Program, the North Atlantic
Continued
on
page
5&
58
Continued
from
Continued
57
page
Our Asiatic
world's
in
ance
to
sided
growing,
a
exchange
of
seems
must
national
United
ing
champion
order
Nations and
principles
the
on
of
the
on
abid¬
freedom
society
increasingly torn
structive
by
de¬
rivalries.
recognize that our
achieve our purposes
to
cannot
rest
peace,
but
ported
by
alone
that
the
whatever
desire
a
be
must
strength
tasks
have in store
on
it
guilty
may
us.
in
We must not make the
in
other
conduct
mistake,
of using Soviet
words,
standard for
as a
Our efforts canont
traveler.
and must continue to be the
one
task
of
world
justice
be
This fellow traveler
con¬
in
which
freedom
flourish.
can
turned
aside
this
and
task
by the diversionary thrusts of the
Soviet Union.
And
if it is
neces¬
it sometimes is, to
sary,
as
with
such
thrust
a
the
or
deal
threat
of one, the effort should be under¬
stood
which, though essen¬
tial, is outside the main stream of
policy.
as
one
The
in
and
of
success
on
the
efforts
our
faith in
our
values
for
rests
ourselves
which
this
Republic
stands.
We will need
courage and steadfastness and the
heads and steady nerves of
citizenry which has always faced
cool
a
the
future
"with
with
none;
with
charity
firmness
God
gives
malice
in
the
to
us
the
see
It
all;
right;
•
one's
as
was
the
career.
you've got to
shares of preferred
fashionable
thing to do and the
prove
they
stock.
Price—At par
Proceeds—To buy
Avenue, Sandusky, O.
Proceeds
on
—
For stated
business.
Alumitape Sales Corp., Los Angeles, Calif.
Feb. 28 (letter of notification) 130,000 shares of
to
writer.
blind
offered
be
Proceeds
tape
expenses.
and
at
are
other
par
($1
per
share).
common
No under¬
to promote and advertise Venetian
products
Office—5404
Redpath,
Foremost
sis—Wm.
Dairies,
Mericka
J.
Inc.—Analy¬
& Co., Inc.,
Y.,
Union
Commerce
15th
729
New
England
N. W.,
Service/
Public
available
Co.—Booklet
Bldg.,
insti¬
for
tutions and dealers—Ira Haupt & >
Cleveland 14, Ohio.
Co., Ill Broadway, New York
Govt.
Employees'
Report—Peter
Insurance—
McDermott
P.
N. Y.
&
Olympic
Co., 44 Wall Street, New York 5,
N. Y.
Radio
Television,
&
Inc.—Memorandum—Frederick
^
Robinson
Greer Hydraulics — Descriptive
analysis — Raymond & Co., 148
State Street, Boston 9, Mass.
&
and
Alhambra
Street, New York 5, N. Y.
Public Service Electric and Gas
Machine
Landis
Beaver
Co.—Analysis
—Cohu & Co., 1 Wall Street, New
York
-Lane-Wells
Co.,
5610
Long Island
Co.,
&
10 Post'
Office Square, Boston 9, Mass.
report
Also available is
South
a
brief review/
of the Cement Industry.
Street, Los Angeles 28, Calif.
Southern
Lighting Co.—An¬
nual report—Long
Co.—New.
Cement
analysis—Lerner
Lane-Wells Co.—Annual
Soto
Street, New York 4, N. Y.
Riverside
5, N. Y.
Pacific
Co.—Special
memorandum—McGinnis.
Island Lighting
61
Co., Mineola, L. I., N. Y.
Manufacturers Trust Co.—Anal¬
.
&
Struthers Wells Corp.—Analysis v
Street, New York 4, N. Y.
Broadway, New York 5, N. Y.
Mexican Railways
—
Texas Co.—Annual report—The:
Analysis—
Co.,
135
42d
East
Zippin & Co., 208 South La Salle
Texas
Street, Chicago 4, 111.
New York 17, N. Y.
Street,
Notes
SECURITY
to advance
up
to
for
TRADERS
Joint .Summer
The
of Detroit and
tion
ASSOCIATION
general
Ave.,
Los
OF
AND
DETROIT
Outing of the Security Traders Associa¬
Michigan, Inc. and the Bond Club of Detroit
Golf
outing will be at Plum Hollow.
Registration
March
INDICATES
ADDITIONS
SINCE PREVIOUS ISSUE
Boston
Ampal-American Palestine Trading Corp., N. Y.
3% sinking fund deben¬
tures due 1958 and 200,000 shares ($10 par) class A stock.
Underwriter—Israel Securities Corp. may be underwriter.
Debentures are to be offered at par and the stock at $11
per share.
Proceeds—To be used for economic develop¬
Edison
filed
14
Co.
(4/12)
of first mortgage 30-year
Underwriters—To be deter¬
mined by competitive bidding.
Probable bidders: Halsey, Stuart & Co. Inc.; Lehman Brothers; First Boston
Corp.; Harriman, Ripley & Co., Inc.; White Weld & Co.-
$18,000,000
bonds, series B, due 1980.
Proceeds will be used to pay
Statement effective Dec. 9.
$12,000,000 bank loans and
redemption of $6,000,000 25-year 3% notes due 1970.
Expected about April 12.
selling
Angeles,
•
Armstrong Rubber Co., West Haven, Conn.
March 10 (letter of notification) 1,200 shares of class A
no par value common stock to be sold at $14 per share by
James A. Walsh, President.
Underwriter—F. Eberstadt
& Co., Inc., New York.
Canam 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
Armstrong Rubber Co., West Haven, Conn.
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 & Co., Inc., New York City.
1 -
80 cents per share; the remainder are registered as "bonus
shares."
Underwriter—Reported negotiating with new
March
underwriter.
Proceeds—To
Statement effective
Dec.
9.
develop
mineral
resources.
Indefinite.
....
^
(The)
March
14
• /Capper Publications, Inc.
March 20 filed $2,000,000 of series 6 five-year first mortgage 4% bonds and $2,000,000 of series 7 10-year first
.mortgage 5% bonds. Price—At par, in denominations of
Best Foundation,
Inc., Indianapolis, Inch—1
(letter of notification) $400,000 (sic) worth
——
of series 2-21-50 Investment
Agreements, to be offered 7}
to public at face value in units of $100 and up. Proceeds
to be used
for social welfare purposes.
Office—7 N.
Meridian Street, Indianapolis, Ind.
Beverly Gas & Electric Co.
20 filed 33,000 shares of capital
Dec.
to be
offered
writer.
notes
San Francisco
Private Wires to all
offices
Chicago
Cleveland
•
of
held
by
the
CO
$25>
(par
ded
shares^
held, at $30 per share. No under¬
The proceeds will be used to pay off $575,000 of
bank loans.
Pittsburgh
80^
«
stock
to stockholders at the rate
for each two shares
Philadelphia
Co.,.'
Broadway, New York 6, N. Y.J
ysis—Laird, Bissell & Meeds, 120 —Hayden, Stone & Co., 25 Broad
Nov. 3 filed $3,250,000 10-year
#
Boston
S.
Co., Inc., 52 William
Co.—Analysis—H. Hentz & Co., 60
Calif.
New York
&,
Parker
Street,
Washington 5, D. C.
150 Broadway, New York 7, N.
and
Container Corp.—Cir¬
Auchincloss,
—
for
Chicago, III.
capital and paid-in surplus to carry
stock
National
cular
•
Now in
(par $1).
share. Underwriter—M. A. Kern, President
will sell the stock.
N. Y.
Special memorandum—
Richman & Co., 37 Wall
Street, New York 5, N. Y.
—
Bond,
will be held June 26 and 27.
Feb. 27 filed 1,000,000 shares of common stock
of company,
way
card carriers, their dues paid
are
ment of Israel.
American Casualty Co.,
per
Corp.
MICHIGAN, INC.
date.
right."
and cooker. Office—534 W. Perkins
Price—$2
&
Co., 40 Wall Street, New York 5,
Foote Brothers Gear & Machine
But to get any of them out of the government now
($100 per share). Underwriter—None.
machinery to make and assemble instantaneous heater
All
re¬
Weld
as
Heater Co., Inc., Sandusky, O.
(letter of notification) 250 shares of common
stock and 250
Co.—Special
bulletin—White,
home front, he favors
Alessandro
16
joins in the tirade against Stalin, for
now
But aside from joining
trouble
Securities
March
Montant Power
1,
search
ing communist front organizations.
toward
toward
guilty and the fellow
organized labor stirring up as
possible; he is for subsidized and co-op housing
and socialized medicine as a way of "stopping communism"—stop
communism by being communistic ourselves!
But.the Administration is made up preponderantly of his type
of mind. To get rid of him would be to lose the support of the
"Liberals" without which it can't remain in office. They were right
in bed with Soviet Russia except for a brief hiatus from late 1939
to mid-summer of 1941, up until Stalin began acting up after the
war and then for several months thereafter.
In the days of the
beautiful association our fellow travelers felt no hesitancy in join¬
much
give practical affirmation
principles by which we live.
finally
light.
On the
Progress is to be gained in the
doing of the constructive tasks
to the
York
New
Stalin's alley.
our
which
be proven
in this tirade and, I assume,
restraining from giving any secrets to Uncle Joe, he has the same
intellectual companionship with the communists as he did in the
days when Mrs. Roosevelt declaimed that "we are all fellow
Democrats moving towards the same goal."
This fellow traveler is against any recognition of Franco,
though we would certainly seem to need him on our side in the
"coming war"; he works at cultivating trouble with Peron; he is
for "democracy" in Indonesia and Greece, et al, where strong
governments that tolerated no nonsense would seem to be better
up our alley; he prefers the continual disorders in France, instead
of the "rightist" De Gaulle.
All of these situations are right up
We must not
from
can
I suppose, because he has put communism in such a
reason,
bad
of
building, in co¬
with others, the kind
operation
means an
carrying communist who
The
structive
a
agent of Stalin. The Administration's trouble
from its squeamishness in drawing the line between a card-
bi-partisan line of
American foreign policy has been
Kremlin.
the board of review, is
The head of the top loyalty board is Seth
by the top level board,
view, if nothing else, of the embarrassment it has been caused.
a fact that it won't hang onto a proven communist, which
comes
re¬
Avenue,
as
nowadays
by the
moves
Seventh
But it is
our own.
be merely
actions to the latest
by Congress to do so, and what still annoys
in a court of law. Amazingly enough the Administration,
even Secretary Acheson, does not seem to feel as strongly about
the proven card-carrying communist as you would think it would
meet
Providence
for
for
sup¬
to
all of them have been gotten
large.
Republican.
On Capitol Hill, among both Republicans and Democrats, the
explanation is believed to rest in the legalistic squirmings which
the suspects are permitted to go through.
If the Administration
finds one that is unquestionably a card-carrying communist it
shows no disposition to protect him. But where it differs with its
critics on the Hill is why it should be necessary to prove him
surprisingly
Richardson,
must
ability
forced
until
and then cleared
and
or accept an international
place; secondly, nearly
Congress is that of the thousands of cases that have gone through
the loyalty boards, such a relatively few have been "convicted."
The ratio between those found guilty at the departmental level
inter¬
an
based
justice,
We
all
at
products.
We
Recommendations and Literature
of, and thirdly, a lot of them were homosexuals rather than
communists. The Department and the Administration never moved
world's
5
page
N. Y.
first
in the
jrom
the
rid
many-
the
Washington Ahead of the News
of
does Truman harbor Stalin's agents in the govern¬
here?
The State Department's defense against McCarthy
to be that it didn't have as many communists as he charges,
ment
workshops and assist¬
creating the conditions
necessary
Continued
6
Then why
new
Thursday, March 23, 1950
CHRONICLE
FINANCIAL
Gcurthi
the
Program, the Point IV
for
developing
the
Program
'page
&
Administration, if nothing else. If it were at
Truman's command he would like to wipe Stalin off the face of
fools
such
Pacts, the Mutual Defense
Assistance
jrom
From
Policy
Discussed by Acbeson
and Rio
COMMERCIAL
THE
(1250)
\$6$
now
New
England
*
ancfv~
Electric System
.
.
...
.
.
:
Me
«ni
DEALERS
yd**-
,"7
Bluegrass Life Insurance Co., Louisville, Ky.
March 10 (letter of notification)
100^0' sharesvof -ca^n^..
mon stock at $2.50 per share.
No underwriter. Uroceeds^
for minimum operation capital. Office—Marion E. Tay¬
lor Bldg., Louisville, Ky.
mWt'Kzxchom"
Stock
BROKERS
AINDiRWRlTERS!
■pHW
,t>tflA
AO**
cago
chv
Volume 171
$100, $500
To
Number 4892
COMMERCIAL
NEW ISSUE CALENDER
March
Noon
40,000
shares
of
cumulative
preferred
Equip. Trust Ctfs.
March
28, 1950
Chicago Burlington & Quincy RR.
11 a.m. (CST)
(par $5)
stock
(par
Price—To
be
Cook
Coffee
Noon
1950, at $28
shares
will
be
'Underwriter—None.
11
record
Bonds & Preferred
previous
share, at rate of one new
(rights to expire April 7) and
sold to officers and
employees.
per
Club
March
Hoffman
com¬
Gundel
Baltimore, Md.
&
•
Co., St. Louis.
Coleman-Pettersen
March
13
(letter
of
Cleveland,
notification)
non-convertible
and 15,000 shares of
Preferred at par and
.
5,000
preferred
common
stock
common
at $3
shares
of
$1).
share.
Ohio
Corp.,
Seattle,
$20)
Price—
Utah Fuel
Common
Co
1950
Common
.Bonds
April 17,
Pacific Power & Light Co
1950
Edison
Co
Co., Cleveland, Ohio
Bonds
May 2,
Un¬
Underwriters—A.
Chicago, and Merrill, Turben &
Price—To be supplied in an amendment.
Business—Coffee roasting. Expected about March 28.
Co., Cleveland.
•
Cuddy Mountain Mining Co., Spokane, Wash.
March 17 (letter of notification) 1,000,000 shares of com¬
stock to be offered at par
(10 cents
per
1950
Public Service Electric & Gas Co
May 22,
Bonds
Iowa
Public Service
Co
Preferred
mines potash in Eddy
County, N. M.
Statement effective
Feb. 14.
Equitable Gas Co.,
share), the
March 2 filed
Pittsburgh,
Pa.
(3/28)
unspecified number of shares of
shares would be publicly offered.
March
mon
17
Beach
Fishing
Pier,
Inc.,
Deerfield
Fla.
(letter of notification)
11,771
stock to be sold at $10 per share.
build a fishing pier.
shares of
com¬
No underwriter.
Proceeds—To
Delaware
Power
&
Light Co.
(4/5)
8 filed 232,520 shares of common
stock
(par
$13.50) to be offered to stockholders of record April 5,
1950, at the rate of
be
150
offered
shares
one
share for each six held, and then
employees with
per
employee.
a
maximum
purchase of
Underwriter—(For
unsub¬
scribed
shares) to be determined by competitive bid¬
Probable bidders: W. C. Langley & Co. and Union
ding.
Securities Corp. (jointly); Harriman, Ripley &
Co., Inc.;
Kidder, Peabody & Co.; White, Weld & Co. and Shields
& Co. (jointly); Lehman Brothers.
Price—To be filed
by amendment.
Proceeds—To
finance
the company and two subsidiaries.
^received
to 11:30
up
a.m.
(EST)
on
construction
for
Bids—Expected to be
April 5.
Dome
Exploration (Western) Ltd.,
Toronto, Canada
$10,000,000 of notes, due 1960, with interest
Jan. 30 filed
at
1%
in
the
Underwriter—None.
Business—To
Proceeds—For general funds.
develop oil and natural gas properties in
Western Canada.
Equitable Securities Co., Indianapolis, Ind.
24 (letter of notification) $100,000 of 5% sinking
fund debentures.
Underwriter—City Securities Corp.,
Indianapolis. Proceeds—For working capital.
•
Farm
Sulphur & Potash Co., Houston, Texas
Dec. 21 filed 375,000 shares of capital stock (no.
par) to
be offered to stockholders at $13.50 per share at the rate
of
%ths of
a
& Home
Insurance Corp.
(Arizona)
March 13 (letter of notification) $225,000 face value of
subscriptions entitling holders to 25-cent par value stock
in the corporation. Underwriters—Company and Farm
& Home Loan & Discount Co., Mesa. Proceeds to be in¬
vested under a trust agreement. Office—46 N. Macdonald, Mesa, Ariz.
Fitzsimmons
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.
at
the
rate
of
seven
share of Roberts.
shares
of
Fitzsimmons
for
each
Any additional shares not needed for
the exchange will be sold at $10 each.
Proceeds—For working capital.
Fitzsimmons
new
share for each share held
on
Feb.
14,
[The United Gas Corp., owner of 373,557 shares,
or
74.71% of the outstanding 550,000 sharr,i of Duval
capital stock, has agreed to purchase at the subscription
price any shares of stock not subscribed for by other
stockholders.] Rights will expire March 9
Underwriter
—None. Proceeds—To be used, along with a
$2,500,000
bank loan, to provide mining and milling facilities to
1950.
Stores,
buy
mining
machinery
and
for
Atlantic
Transportation Co., Jacksonville,
stock and 270,000 shares (25c par)
common
stock.
common
will be offered for
Blair, Rollins & Co., Inc.; John J. Ber¬
Co. and A. M. Kidder & Co. on a "best efforts
&
basis."
Price—Par for common $5 for class A. Proceeds
—To complete an ocean ferry, to finance dock and term¬
inal facilities, to pay current obligations, and to
provide
Hammond
Hastings Manufacturing Co., Hastings, Mich.
March 20 filed 300,000 shares of common stock (par
$2).
Underwriters—F. Eberstadt & Co. of New York and
Watling, Lerchen & Co. of Detroit. Price—To be filed
by amendment. Proceeds—To Aben E. Johnson (Presi¬
dent) and 52 other stockholders.
Herman
Gnewotta, D/B/A/H. Gnewotta Studios
(letter of notification) $25,000 of 10-year 6%
notes at $100 each.
No underwriter.
Proceeds for oper¬
March
ating
Business—Grocery stores.
Products Corp., Littleton, Colo.
(letter of notification) 30,000 shares of com¬
stock (par $1). Price—$3 per share.
Underwriter
16
—None.
Proceeds—To
be
used
in
liquidating
obligations to the RFC and other creditors.
So.
current
Office—4002
Clay Street, Littleton, Colo.
Garfinkel
(Julius) & Co., Inc.
(letter of notification) 5,000 shares of common
stock (par 50c) to be sold by Mrs. Dee M.
Schmid, Wash¬
ington, D. C., at the market price of between $19% and
Feb.
2
17
capital
studio.
and
to
build
commercial
a
advertising
Street, Cleveland, Ohio.
Address—3470 W. 122nd
Hoffman
Radio
Corp.
(3/30)
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
at
$4
share
now
be exercised.)
The 50,000
by Frances E. Hoffman and Jane
Leslie Hoffman, wife and daughter of H. L. Hoffman,
per
block
is
may
being sold
President
the
of
Underwriters—William
company.
R.
Staats
Co., Los Angeles, and Paul H. Davis & Co., Chi¬
cago.
Price
For
—
To be filed
by
amendment.
Proceeds
—
working capital. Expected about March 30.
Howe
Sound
Co.
Feb. 28 filed 76,983 shares of 4%% cumulative preferred
stock, par $50 (convertible into common stock on or be¬
fore April 1, 1955), offered first to commend stockholders
of
record
each six
March 20
common
in
ratio
of
one
preferred share for
shares held. Rights will expire April 4,
1950. Price—At par.
Underwriter—Union Securities Corp.
principal underwriter. Proceeds—To be used to complete
the development of the Blackbird cobalt mine in Idaho.
•
Hydroway, Inc., Philadelphia, Pa.
16 (letter of notification)
1,600 shares of pre¬
ferred stock
(par $100) and 1,200 shares of common
stock
(par $10).
Price—At par.
Underwriter—None.
March
Proceeds—For
of
a
experimentation,
sale
Cohen,
1920, 12 So. 12th Street, Philadelphia 7, Pa.
cleaner.
vacuum
Room
manufacture
and
Address—Care of Cohen &
Hytron Radio & Electronics Corp., Salem, Mass.
common
Fox Metal
mon
(letter of
ible preferred stock ($8 par value) and 440,000 shares of
cumulative convertible
(par $25). Underwriter—Lester & Co.,
Los 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
incurred to buy a subsidiary, Roberts Public Markets,
March
13
March 10 filed 200,000 shares of 6% cumulative convert¬
preferred stock
•
Instrument
Co., Chicago, III.
notification) 2,000 shares of com¬
stock (par $1). Price—$20 per share. Underwriter
—Paul H. Davis & Co. of Chicago.
March
No underwriter.
Ltd.
Feb. 20 filed 40,000 shares of 6%
Inc.
Duval
com¬
Price—To be filed by
amendment (expected at $24.25 per share). Underwriters
—Kidder, Peabody & Co.; Merrill Lynch, Pierce, Fenner
& Beane; and White, Weld & Co.
3%
Co.)
an
mon
first
year, 2% in the second year, and
thereafter, and 249,993 shares of capital stock (par
$1). To be sold to 17 subscribers (including certain part¬
ners of Carl M. Loeb, Rhoades &
Co., State Street Invest¬
ment Corp. and State Street Research &
Management
Proceeds—To
subscription by holders on the basis of one-for-two at
25 cents per share. Underwriters—Names
by amendment
Feb.
March
to
100,000 shares of common non-assessable
(par 50c). Price—35c per share. Underwriter—
Offering—135,000 shares of
•
Emery Air Freight Corp.
March 6 (letter of notification) 600 shares of common
stock
(par 200).
Price—At market (about $2.50 per
share).
Underwriter—Reynolds &
Co.
Proceeds—To
selling stockholder.
Spokane.
Beach,
Columbia,
filed
Gulf
•
1950
stock, to be sold by The Philadelphia Co., Pitts¬
burgh. On March 15 it was announced that 2,000,000
Deerfield
British
mon
proceeds to complete the purchase of Blue Dog Mine A
Weiser, Idaho, and to develop this mine. Underwriter—
Explorers, Inc., Spokane. Office—711 Hutton Building,
•
Ltd.,
working capital.
•
Bonds
(3/28)
101,250 shares of common stock (no par)
by 10 stockholders. 10,000 shares will first be
offered to employees of the company.
G. Becker & Co. Inc.,
Corp.,
working capital.
com¬
March 6 filed
mon
16
gen
Common
Seattle, Wash.
Coffee
Mines
May 27 filed 620,000 shares of class A participating ($1
1950
Boston
director and officer of the company. Proceeds—
To be used in gold
mining development. Office—915
American Building,
to be sold
Feb.
par)
12,
a
Cook
Granville
Preferred
Wash., who
is also
(no par)
stockholders of record March 15 at
share for each 10 held at $28.75
share. Rights expire March 29. Underwriter—Blyth
Co., Inc.; A. G. Becker & Co., Inc.; Central Republic
Co. (Inc.); Merrill Lynch, Pierce, Fenner & Beane. State¬
None.
...Bonds
April 10, 1950
Co., 11 a.m. (EST)
April
Wash.
(letter of notification 990,000 shares of
mon stock
(par 1 cent). Price—25 cents per share.
derwriter—Leverett G. Tallman of Seattle,
new
and may include
Under¬
13
one
Canada
April 6, 1950
Wheeling & Lake Erie RR
6%
(par
(par
per
of
ing capital.
Debentures
April 5,
Ohio.
March
common
rate
Pfd. & Com.
Delaware Power & Light Co.
11:30 a.m. (EST)
Proceeds—To be used for new equip¬
ment, retiring a three-year term bank loan, and other
purposes.
Office—2130 St. Clair Avenue,
Cleveland,
Colorado
Co., Cleveland, Ohio
178,825 shares of common stock
to be offered
per
Common
1, 1950
& Co., Inc...
(J. B.)
writer—None.
•
Glidden
Feb. 24 filed
.Common
Ohio
stock
(3/29-30)
Florida
Filing subsequently with¬
Corp.,
Co.
expand and for working capital.
the
31,
Tennessee Gas Transmission
•
.
bumulative
Corp
Lit Brothers
common
sold at $30 per share by Willard R.
Cox,
Underwriters—G. H. Walker & Co. and Wm.
drawn.
Products
($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
stock
be
Dowdall
Gerber
&
April 4, 1950
Georgia Power Co., 11 a.m. (EST)..
•
Coca-Cola Bottling Co. of St. Louis
March 9 (letter of
notification) 2,000 shares of
Bids
March 10 filed 140,000 shares of common stock
April
Light Street,
F.
Proceeds—To finance construction program.
11 a.m. (EST) April 4.
—To be received up to
Common
1950
1950
Iowa Electric Light & Power Corp
stock. Price—At par ($100 per share). Underwriters
—None.
Proceeds—To be used for acquisition of land
-in Anne Arundel
County, Md. Office—10
to
Radio
March
mon
stock
1950
30,
(4/4)
ment effective March 15. Proceeds—For additional work¬
Inc., Baltimore, Md.
(letter of notification) 2,200 shares of
President.
(EST)__.Bonds
Co
March
Estates,
14
Products
29,
a.m.
Texas Gas Transmission Co
i
•
Preferred
Bonds
March
Gerber
(EST)
Service Co.
(Territory of), 11
Proceeds—For
years.
noon
(CST)
a.m.
Puerto Rico
W. E. Hutton & Co. headed
groups
construction.
State¬
ment effective March 15.
in
Common
Northern Indiana Public
$8.50),
& Co.
Bonds
Co.
(EST)
share for each five held
58,000
Underwriter—Auchincloss, Parker &
by competitive
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
Common
Monongahela Power Co.,
Cincinnati Gas & Electric Co.
Feb. 24 filed
556,666 shares of common stock (par
of which
498,666 will be offered to stockholders of
Capital
.
Co
Equitable Gas Co
Metropolitan Edison
filed
by amendment.
15,
^
27, 1950
Palisades Nepheline Mining
Co., Ltd
Underwriters—First Boston Corp. and Blyth &
.Co., Inc. Proceeds—To pay current construction loans
costs.
1950
March
$50).
further construction
23,
(EST)
•
Central Arizona Light & Power Co.
March 21 filed 125,000 shares of common stock
share.
per
Georgia Power Co.
Seaboard Air Line RR.
Building Addition, Houston, Texas.
March
59
March 3 filed $15,000,000 of
30-year first mortgage bonds
due 1980.
Underwriter—To be decided
17
for
(1251)
Redpath, Washington.
Taylor, Houston, Tex.
(letter of notification) $75,000 of certificates
of participation in
Carter Taylor's oil pool No. 1 at the
rate of
$1,000 for each 1% of interest in any net profits,
No underwriter.
Proceeds to drill well and develop lease
in North
Harris County, Texas. Office—1112 Commerce
and
CHRONICLE
$16%
and Jackson Streets,
Topeka, Kan.
Carter
,and
FINANCIAL
$1,000. Underwriter—None. Proceeds—
outstanding bonds and improve facilities.
Office—Eighth
March
&
and
redeem
•
THE
stock
(par $1), of which 40.000 shares of com¬
stock will be sold by four officers of the company.
Underwriters—Barrett Herrick & Co., Inc., New York,
mon
and
Sills, Fairman
& Harris, Inc., Chicago.
Price—$8
preferred; the common stock price to be filed
by amendment. Proceeds—To finance expansion of Hy¬
tron and its subsidiaries. Expected second or third week
in April.
for
the
•
Illinois
March
1980
21
and
Power
filed
Co.
$10,000,000
first
mortgage
300,000 shares of cumulative
due
bonds
preferred
stock
(par $50).
Underwriters—Merrill Lynch, Pierce, Fenner
preferred not needed to exchange out¬
standing 4.70% preferred stock (on a share-for-share
&
Beane
basis
for
plus cash).
Underwriter for bonds to
mined by competitive
be deter¬
bidding; probable bidders include:
Continued
on
page
60
«0
Continued
from
Weld & Co. and Mer¬
rill Lynch, Pierce, Fenner & Beane (jointly); Harriman
Ripley & Co., Inc., and Glore, Forgan & Co. (jointly);
Union Securities Corp.; Kuhn, Loeb & Co., and Lazard
Freres & Co. (jointly).
Price—For preferred to be filed
by amendment.
Proceeds—To pay short-term bank
loans made for construction.
Expected in April.
Halsey, Stuart & Co. Inc.; White,
•
Telephone Co.
Inter-Mountain
stock.
95,000 shares of $10 par common
filed
March 20
headed by Courts & Co.,
Underwriters—Group of six
Holders of record at close of business on
of outstanding shares of common stock will
Atlanta, Ga.
March
31
rights to subscribe for the 95,000 new shares,
in the ratio of one share for each two shares then held.
be issued
be
Price—To
supplied
amendment.
Proceeds—To
borrowings outstand¬
by
be used to reduce short-term bank
ing.
filed
13
.stock
Light & Power Corp. (3/31-4/3)
shares of cumulative preferred
Electric
Iowa
108,834
and
$50)
(par
shares of common stock
925,000
These new stocks, along with cash, will be
retire 49.290 shares of series A 7% preferred
(par $5).
used
to
stock. 15.605 shares of series B
6%% preferred stock and
43,939 shares of series C 6% preferred stock. All unissued
by underwriters. Underwriters—
shares will be offered
First
The
&
Corp., New York, and G. H. Walker
Boston
Providence, R. I.
Proceeds—Will be used to
unexchanged shares of old preferred stock at
Co.,
redeem
$102.50 per share. Expected March 31 or April 3.
Service
Public
Iowa
(5/22)
Co.
shares of cumulative preferred stock
Feb. 21 filed 50,000
(par $100). Underwriter—To be determined by competi¬
tive bidding.
Probable bidders: A. C. Allyn & Co.;
Harriman Ripley & Co. and Merrill Lynch, Pierce, Fen¬
Kidder, Peabody & Co. and Blyth
(jointly); Equitable Securities Corp.; Lehman
Brothers; White, Weld & Co.
Proceeds—For payment
of bank loans and for construction.
Expected May 22.
ner
&
Power-On Transmission
Johnson
March 10
Corp. of III.
$75,000 of 5% threeyear notes, with purchasers to $1,000 of notes permitted
to buy 1,000 shares of common stock for $10 and Vz of
1% interest in patent royalties for an additional $40.
No
underwriter.
Proceeds for working capital, sales
-capital stock at
($10 per share). No underwriter. Pro¬
par
develop automatic power transmis¬
Office—328 S. Jefferson St., Chicago 6, 111.
ceeds to improve and
sion devices.
•
23
the
on
basis
three
of
shares
of
stock for each five shares of United stock
are
9
to
expire April 20.
City
Kansas
held.
Rights
stock
(par $1) to be issued to creditors to cancel $16,750
e£ indebtedness. No underwriter. Proceeds for working
capital. Office—659 S. Citrus Avenue, Los Angeles, Calif.
Lincoln
Telephone
Telegraph
&
Co.,
Lincoln,
Nebraska
March
2
(letter of notification)
stock
mon
(par $16.66%).
writer—None. Offered—To
ord Jan. 9,
-—For
15,000 shares
Price—$20
common
per
of
share.
com¬
Under¬
stockholders of
rec¬
1950; rights to expire April 3, 1950. Proceeds
working capital and expansion.
Lit
Philadelphia, Pa. (4/4)
March 13 filed $6,000,000 sinking fund debentures (sub¬
ordinated) due 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. Expected about April 4.
Dec.
Electric
filed
30
Offering—To
Light Corp., Lowell, Mass.
shares of capital stock (par $25).
offered at $35 per share to common
55,819
be
stockholders at the rate of
shares held.
bank
one
new
Underwriter—None.
be filed
share for each three
Proceeds—To
offered
of
Lytton
(Henry C.) & Co., Chicago, III.
(letter of notification) 7,000 shares of
Price—$8
per
Straus & Blosser, Chicago, 111.
share.
Motor
filed
17
to
be
pay
Feb.
filed
23
be
filed
offered
plans to
Gas
Electric
helping
25
a
cents
deter¬
mined by competitive bidding.
Probable bidders: Drexel
4c Co.; Harriman Ripley & Co. and Union Securities
Corp.
(jointly); Carl M. Loeb, Rhoades & Co.; Halsey,
Stuart & Co. Inc. (bonds); Kidder,
Peabody & Co.;
White, Weld & Co. (bonds); Lehman Brothers (bonds);
Kuhn, Loeb & Co. (bonds); Smith, Barney & Co. and
Coldman, Sachs & Co. (jointly on preferred); Glore,
Forgan & Co. and W. C. Langley & Co. (jointly on pfd.).
for
construction
and
to
reimburse
treasury
capital
past
pected at
noon
expenditures.
Bids—Tentatively
(EST) on March 28.
ex¬
Feb.
24
mon
stock
at
the
share.
(letter
rate
of
offered
of
one
notification)
to
stockholders
share
for
each
Rights expire March 27.
ceeds for construction.
12,000
shares
of
record
10
held
at
of
No underwriter.
Office—101 W. 2nd Street
7
per-
Pro¬
Ash¬
land, Wis.
Middlesex Water Co., Newark, N. J.
Feb. 9 (letter of notification) 5.200 shares of common
.stock offered to common stockholders of record March 17
at $50 per share on a one-for-five basis.
UnderwriterClark, Podge & Co. Proceeds—To pay notes and foradditional working capital.
South
of 550,041
Nov.
filed
22
&
Co.
Gas
$22,200,000 first and refunding mortgage
bonds, due 1979.
Underwriter—Names by amendment,
(probably Halsey, Stuart & Co. Inc.; Kidder, Peabody &
Co.; The First Boston Corp.; Union Securities Corp.).
Proceeds—To
redeem
a
like amount
of outstanding
first mortgage
•
3%% and 3%% bonds.
Southeastern
Expected in April.
Columbia, S. C.
March 9 (letter of notification) up to $300,000 of collat7
eral trust notes, with not more than half of these to ma¬
shares,
55,004
Proceeds—For
'
Electric
Carolina
ture
Fund,
within nine months.
No underwriter.
Proceeds to
buy additional house trailer sales contracts.
construction.
Southern New
14
Rights will expire April 21,
at
Gas
$30- per share
shares
five
•
Pacific
on
held.
Power
March 9 filed 400,000 shares of common
Electric Co.
&
the basis of one new share for
Rights will expire. April 5.
•
Harris,
Hall
&
Co.
(jointly);
(Inc.)
pay
Carl
M.
Loeb,
Proceeds—To be used
off 2%% promissory notes held by Mellon Na¬
Pacific
Telephone &
one
shares held; rights expire April 21.
Price—At
par..
share for each six
Underwriter—None.
Proceeds—For Construction and to
re¬
bank loans made for construction purposes.
can
standing. and 640,957
shares
of
March
i4.
6%
To
shares,
or
78.17%
preferredstock..
of the 620,000
Statement
be
Telephone
Co.
Republic
supplied by amendment.
Co.,
(par $1).
Chicago.
Price—
Proceeds—From 65,000
remaining shares are being sold for account of Allied Syndicate, Inc. of Wilmington, Bel.
shares go to construction program of company;
•
•
|
|!
j!
Stanwood Oil Corp.,
March
mon
14
stock
New York City
(letter of notification) 5,000 shares of com¬
for account of Joseph J. Steinharter, a direc¬
tor, at the market price (estimated to be $3.25 per
underwriter.
No
State
Ameri¬
Telephone & Telegraph Co., parent, owns 3,732,493
shares, or 91.75% of the 4,068,165 common shares out¬
pay
Underwriter—Central
Telegraph Co.
21, 1950 at the rate of
States
114,828 shares of common stock
Office—420
Lexington
share).
Avenue,
New
York, N. Y.
Feb. 23 filed 814,694 shares of common stock (par $100)
to be offered common and preferred stockholders of rec¬
ord March
Southwestern
March 15 filed
&
Rhoades & Co.: Lehman Brothers.
Underwriter—None!
par.
Proceeds — To repay advances from
Telephone & Telegraph Co. and for further
construction.
Proceeds—To finance in part con¬
(jointly); Blyth & Co., Inc., White, Weld & Co. and
1950.
|;
At
—
American
Statement effective March 14.
Light Co. (4/17)
March 17 filed $9,000,000 of first mortgage bonds due
1980.
Underwriters—To be determined by competitive
bidding. 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
Price
& Co., Inc., heads group of about
Underwriters—Blyth
com¬
$20
owner
(letter of notification)
general corporate purposes.
about April
tional Bank & Trust Co. and payable May 1, 1950.
March
10
Feb. 23 filed 1,656,156 shares of common stock (par $25)
to be offered to common stockholders of record March
to
Michigan Gas & Electric Co., Ashland, Wis.
or
Los Angeles, Calif.
Inc., San Antonio, Texas
$194,000 of 4% convert¬
ible income debentures, due 1957 (non-interest bearing
until March 1, 1952), and 19,400 shares of common stock
(par $10), into which the debentures will be convertible^
Underwriter—Fridley & Hess, Houston. Proceeds—For
stock (par $20) to
on
Finance Co.,
England Telephone Co.
capital stock (par
$25) to be offered common stockholders of record March
28, 1950, at the rate of one new share for each seven held.
Pacific
struction program.
be
to
the
surplus.!
Slick Airways,
shares to which it is
but any NASD
stockholder with a subscription will
per
share.
Price—To be filed by
subscribe to
200 investment firms.
Underwriters—Names
Co.,
company's capital and
Corp.,
19
Feb.
Co.
97,900 shares common
stockholders of record
&
increase
Radio
(letter of notification) 65,000 shares of common,
stock.
Price—Par ($1 each).
Underwriter—Dempsey
Tegeler & Co., Los Angeles.
Proceeds—For working
capital.
Office—607 S. Hill Street, Los Angeles.
Underwriter—No underwriter,
paid
each
(3/28)
$7,000,000 of first mortgage bonds, due 1980,
Proceeds—For
Service
Dec.
5, 1950, at the rate of one for each 10 now held.
Rights
will expire in about 15 days after mailing of warrants.
Standard
held.
(par $1). Price—$6.50 per share. Underwriters—
Sulzbacher, Granger & Co., New York. Proceeds—For
working capital.
<
(3/28)
Co.
and drill test wells. Office
—413 American Fidelity Bldg., Fort Worth, Tex.
to
five
each
j.
Proceeds to pay indebtedness
March 6
for
stock
Service
Electric
share
one
Evanston, III.
Feb. 15 (letter of notification) 40,000 shares of common
Hunters, Inc., Fort Worth, Tex.
(letter of notification) 2,000,000 shares of com¬
stock at par (10 cents per share). No underwriter.
&
stockholders to
of
rate
(par $10)
purchase the&
shares of capital stock
enabling
the
at
Sentinel
Oil
Gas
property.
:
filed 50,000
warrants
Proceeds—To
(par $1).
Price—
Proceeds—To be used
$12,000,000 fifst mprtgage bonds series E,
determined by com¬
Oklahoma
No underwriter. Proceeds
Address—P. O. Box
share).
by amendment. Underwriters—Chas.
W. Scranton & Co. and Day, Stoddard & Williams, Int.
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
Savings Bank, 115 West Monroe Street, Chicago, 111.
mon
per
Price—To be filed
due 1980. Underwriter—Names to be
•
($1
Pedro mines
Security Insurance Co. of New Haven
March 22
petitive bidding.
stock
$100).
Public
Tuscon, Ariz.
par
drill San
and
129,000 shares of capital stock
Indiana
Co.,
stock at
shares
supplied by amendment.
off outstanding loans.
Mines
(letter of notification) 10,000 shares of commor
•
Underwriter—Blyth & Co., Inc., San Francisco.
To
Pedro
San
working capi¬
Street, Newark, N. J.
2086, Tucson, Ariz.
Redwood
Inc.,
(N. J.)
March 9
to
rights to expire, about April
Bearing Co.,
«nd 30,000 shares of $100 par value cumulative
preferred
(par
the rate
City, Calif.
March
Office—45 Downing
tal.
including construction.
National
Chicago, 111.
Inc.
Proceeds for additional
No underwriter.
indebtedness to its parent, American
pay
Beverages,
(letter of notification) $100,000 10-year 5% con¬
vertible income debentures, at par, in New Jersey only
Telephone & Telegraph Co., and for corporate purposes,
common
Underwriter—
Proceeds—To two selling
Metropolitan Edison Co.
March 27 at
'
<
Feb. 17
Price—At par ($100 per share).
Underwriter—None.
amendment.
stockholders.
Jan. 20 filed
of record
stockholders
to
Proceeds—To
be
$1).
Rotella
•
for each five shares;
one
McNally & Co., Chicago
14
fice—536 So. Clark Street,
Telephone & Telegraph Co.
183,918 shares of capital stock, to be
filed
10
effective
(letter of notification) 20,000 shares of com-J
mon stock (par $10). Price—$15 per share.
Underwrite!}
—None. Proceeds—To be added to working capital. Of*
States
Mountain
Statement
drilling.
and
expenses
Rand
March
expenditures.
member
(par
•
(par $100).
entitled.
March 1
istration
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. Langley & Co.
(jointly). Bids—To be received at office of West Penn
Electric Co., 50 Broad Street, New York, N. Y., up to
noon
(EST) on March 28.
Proceeds—For construction
March
Toronto Canada
Ltd.,
June 27.
Monongahela Power Co. (3/28)
Feb. 23 filed 60,000 shares of cumulative preferred stock,
C
j
Petroleum
April 25 filed 1.150,000 shares ($1 par) common of which
1,000,000 on behalf of company and 150,000 by New Yorh
Co., Ltd.
Price—50 cents per share.
Underwriters—
t>. G. Cranwell & Co., New York.
Proceeds—For admin*
struction costs.
series
manufacturing.
Power
Underwriter—Union Securities
by amendment.
repay
provements.
Perfection
cut log
Corp. will head group.
Proceeds—To be used to retire
$7,250,000 bank loans and balance applied toward con¬
loans, for construction and to make further im¬
stock
Seattle, Wash.
,"t
Logs, Inc., Coeur d'Alene, Idaho
March 6 (letter of notification) not more than 75,000
shares of capital stock at $1 per share. No underwriters.
Proceeds to be used for expanding operations of pre-!
March 9
Brothers,
Lowell
Avenue,
•
1950, in the ratio of one share for each four
held; rights to expire April 24, 1950.
Price—To
Northern
Kaye-Halbert Corp., Los Angeles, Calif.
(letter of notification) 6,700 shares of common
Western
Westfield,
Co., Philadelphia.
writer—Bioren &
April 4,
Underwriters—None.
March 16
manufacturing
Co.,
17
stock
mon
River Fuel Corp.
March 21 filed 245,708 shares of common stock (par $10)
to be offered first to common stockholders of record
•
March
acquire
Gas
(letter of notification) 15,761 shares of com¬
at the market (estimated at $4 per share)
for account of R. Gould Morehead, Treasurer.
Under*
March
Mississippi
Kansas
City Power & Light Co.
March 3 filed 1,904,003 shares of common stock (no par)
to be offered by United Light & Rys. Co., Chicago, at
$12 per share to United Light stockholders of record
Office—911
facilities.
to
and
advertising
promotion,
Southern
Pennsylvania &
New Jersey
(letter of notification)
16
March
28.
(letter of notification) 5,000 shares of common
•
(par
Expected March 27.
syenite deposits.
Miracold, Inc., Seattle, Wash.
& Beane (jointly);
Co.
9
9*
21
Canadian
company's common stock.
of
(3/27)!
Ltd.
Mining Co.,
Nepheline
1,000,000 shares of capital stock
funds).
Price—40 cents per share.
filed
$1
Under¬
writer—F. W. Macdonald & Co., Inc., New York . Pro¬
ceeds—For mining costs.
Business—Mining nepheline
Feb.
of
(letter
6
shares
March
Palisades
Co., Inc.
notification) 1,000 shares of 6%
cumulative preferred stock at par ($100 per share). Un¬
derwriter—George D. B. Bonbright & Co., Binghamton,
N. Y. Proceeds—To assist in acquisition of 1216 shares
March
R.)
(Walter
Miller
59
page
Thursday, March 23, 1950
CHRONICLE
FINANCIAL
&
COMMERCIAL
THE
(1252)
effective
Feb.
27
Bond
filed
&
Mortgage Co.,
New Ulm, Minn.
$500,000 of series 1305 investment certifi¬
cates: $1,000,000 of series 1207-A accumulative savings
certificates, and $10,000,000 of Series 1217-A accumula¬
tive
savings certificates.
No underwriter.
An investment
company.
•
State
Loan
& Finance Corp.,
Washington, D. C.
$4,000,000 of 5% 10-year sinking fund
debentures. Underwriter—Johnston, Lemon & Co., Wash¬
March
15
filed
ington. Price—To be filed by amendment. Proceeds—To
off serial notes and for working capital. Business—
Holding company for personal loan subsidiaries.
pay
j
Volume 171
•
Number 4892
Stouffer
THE
Corp.,
Cleveland, Ohio
notification) 8,018 shares of com¬
stock
(par $2.50). Price—$15 per share.
Under¬
writer—None.
Proceeds—To be used as working cap¬
ital. Office—1375 Euclid Avenue, Cleveland, Ohio
.
March
15
(letter
of
COMMERCIAL
&
FINANCIAL
CHRONICLE
Wm. P. Harper & Son & Co.
Proceeds—To be used for
telephone equipment and other corporate needs.
mon
Sudore Gold
Mines
Ltd., Toronto, Canada
June 7 filed 375,000 shares of common stock. Price—$1
per share (U. S. funds). Underwriter — None. Proceeds
—Funds will be
applied to the purchase of equipment,
road construction, exploration and development.
•
Super Electric Products Corp.
(N. J.)
March 20 (letter of notification) 140,000 shares of com¬
mon
stock (par $1) to be offered at the market (ap¬
proximately 70 cents per share for account of Henry
Winston
(President) who will loan the proceeds to the
corporation.
Latter will use the money for working
capital.
No
underwriter.
Office—46
Oliver
Street,
Newark, N. J.
Teco, Inc., Chicago
Nov.
21 filed 100,000 shares ($10 par) common stock.
Offering—These shares are to be offered to holders of
common
stock in
1949, at rate of
Zenith Radio Corp. of record
share for each five held.
one
July 15,
Price—At
Underwriter—None.
Proceeds—For working capi¬
promotion of Zenith's "Phonevision" device,
whereby television users could pay a special fee for
costly television programs by calling the telephone com¬
par.
tal and the
and asking to be plugged in.
pany
Tennessee
March
Transmission Co.
(4/4)
Underwriters—Stone
&
Webster
Securities
Corp. and
Proceeds—To be added
White, Weld & Co., New York.
to
general funds for use in construction.
A.pril 4.
Texas
Gas
Transmission Co.
Expected
(3/29)
debentures
in¬
due
1965; $1,200,000 of°5% junior
income debentures due 1970; 32,000 shares of $5 class A
preferred stock (no par), with no rights to
dividends until 1956; 52,000 shares of $5 class B cumliative .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 a plan of debt adjustment.
Any interest
payable on debentures must first be approved by RFC,
which recently loaned the company $15,100,000. Under¬
writer—None. Business—Oil production.
Treasure
State
Supply Co.,
Houre,
shares of non-assessable
Underwriters
share.
common
Include
—
stock.
M.
Darling
•
per
of
Falls, Mont, and all officers and directors of the
Proceeds—To be used for construction of a
building for corporation headquarters and to maintain
•
Office—415
West
1st
Street,
March
Airlines, Inc., Indianapolis, Ind.
March 10 (letter of notification) 60,000 shares of common
stock (no par). Price—$4 per share. Underwriter—None.
Proceeds—To buy planes, pay overhaul and for working
capital and general corporate purposes. Office — Weir
Cook Municipal Airport, Indianapolis, Ind.
United
March
and
Funds,
filed
17
Inc.,
1,200,000
Kansas City, Mo.
United Income Funds
1,000,000 United Science Fund Shares.
& Reed, Inc., New York and
Price—To
be
determined
twice
daily
Shares
Underwriters
—Waddell
Kansas
City.
basis of
on
net
United
Mines
of
Honduras,
Inc.,
Wilmington,
Delaware
March
16
(letter of notification)
stock
mon
150,000 shares of com¬
Price—$2 per share. Under¬
(par 50 cents).
writer—Willis
Proceeds—To
rate
E.
Burnside
pay
purposes.
&
Co., Inc., New York City.
indebtedness and for general corpo¬
Office—North American
Building, Wil¬
mington, Del.
•
U.
Oil &
S.
Development Corp., Denver, Colo.
March 10 (letter of notification) 160,000 shares of 6%
preferred stock (par 10 cents). Price—25 cents per share.
Underwriter—R. L. Hughes & Co., Denver. Proceeds—To
drill
and
rehabilitate
wells,
Office—429
C.
A.
Johnson
Bldg., Denver, Colo.
U.
S.
Feb. 21
Co.
number of shares to be issued upon exercise of the war¬
rants at $16.75 per share.
Warrants issued to stockhold¬
of record March 13 to
ers
expire March 27, to subscribe
on a l-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, Ltd.,
Vancouver, B. C., Canada
800,000 shares of common capital stock
(par $1). Price—35 cents per share. Underwriter—None.
Proceeds—Exploration
(par $1) to be sold by William Hecht, Minneapolis.
Underwriters—Harris, Upham & Co., Minneapolis, and
Piper, Jaffray & Hopwood.
Price—$3
•
Co.
March
17
mon
Thermo Control
per
share.
(letter of notification)
3,300 shares of
com¬
Green,
Vice-President
and
Secretary.
No
underwriter.
U.
S.
Thermo Control
March
17
(letter of notification)
•
mon
Co.
12,000 shares of com¬
stock (par $1) to be sold to George F. Breen, New
York, at $1.50 per share.
working capital.
No underwriter.
,
•
5%
_■
v
Proceeds for
•
500,000
of
common
stock
(par
company's
Wilcox-Gay Corp.
Underwriter—Gearhart,
York.
Price—To
be
Kinnard
filed
by
&
Otis,
amendment.
Inc.
(par $1).
of
New
Proceeds—
For general operating requirements.
•
Wilson
Brothers, Chicago, III.
(letter of notification) 15,000 shares of com¬
mon
stock (par $1)
to be sold at the market price
($4.37V2 per share) for the account of Sheboygan Chair
Co., Inc.
No underwriter.
Office—Merchandise Mart,
Chicago, 111.
March
17
Prospective Offerings
American
March
3
Can
Co.,
announced
New York, N. Y.
is considering a program
for working capital. Probable
company
of
long-term financing
underwriters:
Morgan Stanley & Co.;
Co.; F. S. Moseley & Co.
American
Gas
March 3 announced
& Electric
Clark, Dodge &
Co.
program,
$24,100,000.
Financing
•
Illinois
Central
Stock
6
reported
company
to
Corp., Vaslion, Wash.
(letter of notification) $49,000 first mortgage
serial and sinking fund bonds at $1,000 per bond,
9
plus accrued interest from Nov. 1, 1949.
Underwriters—
Light Co.
Electric
Williams and associates, would
son
to
buy
a
unit of
Natural
Gas Corp%
unexchanged new 3%% preferred
(issuable in exchange for 6% preferred stock,
share for share, under proposal to
split company into two
units) will be sold publicly.
announced
stock
Brooklyn Union Gas Co.
have
stockholders
on
a
bidders
a
par
value of $40
subscription to
income debentures for a
package price of $2.25 for each
five common shares held.
The issue of new stock
debentures would be underwritten by Darien
Corp. and
banking group headed by Hemphill Noyes, Graham,
Parsons & Co., Shields & Co., Blair, Rollins &
Co., Drexel
& Co. and Sterling Grace Co.
a
Chicago Burlington & Quincy RR. (3/28)
authority to issue $25,000,-
March 21 company asked ICC
000 first and
refunding
mortgage bonds due Feb. 1, 1990.
Underwriters—To be determined by competitive
bidding.
Probable bidders: Halsey, Stuart & Co.
Inc.; Morgan
Stanley & Co.; Lehman Brothers. Proceeds—To retire
$12,460,100 first and refunding mortgage 4J/2%
bonds,
series B
(to be called for redemption Feb.
1, 1952); and
partially finance the laying of new track.
Bids—To be received up to 11 a.m.
(CST) on March 28.
the balance to
Chicago & Western Indiana RR.
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
July 1,
for
Re¬
and refunding
mortgage 4%% bonds^
series A, due Sept. 1,
1962, is also said to be a 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.,Tnc.r
First Boston Corp.; Lehman
Brothers; Paine, Webber,
Jackson
•
&
Curtis; Kidder, Peabody & Co.
Columbus
&
Southern
Ohio
Electric Co.
March
9 reported
planning new equity financing before
the end of the year in the form of common
stock. Pro¬
ceeds will finance a portion of the
company's construc¬
•
Commercial
Credit
Co.
Subject to approval of stockholders
some
plans to
sell
$25,000,000
time next month.
of
A group
on
March 30,
com¬
preferred stock
of underwriters, headed
new
by Kidder, Peabody & Co. and The First Boston Corp.,
expected to offer the stock.
24
Power &
company
Light Co.
reported
planning sale, probably in
$8,500,000 bonds, for new money.
Probable
bidders: Halsey, Stuart & Co.
Inc.; Equitable Securities
Corp.; Lehman Brothers; Salomon Bros. & Hutzler; First
May,
of
Boston
Corp.; Union Securities Corp.; Kidder, Peabody
Co.; Blyth & Co., Inc.; Merrill Lynch, Pierce, Fenner
&
& Beane
(jointly); Harriman, Ripley & Co.
Dayton
7
Power
said
to
be
&
Light Co.
planning sale, probably in May
or
common and preferred stocks.
Probable underwriters: Morgan
Stanley & Co.; Lehman
Brothers; W. E. Hutton & Co.
El Paso Natural Gas Co.
March 2 announced company will issue and sell
(in addi¬
tion
to private financing)
$6,500,000 convertible second
preferred stock, first to stockholders. * Underwriter
White, Weld & Co. Proceeds—For construction purposes.
Expected in April.
•
Inc. and F. S. Moseley & Co.
bonds
1952.
funding of the first
include:
General
per
common
one-for-four basis and may be under¬
by Blyth & Co.,
be offered the right
$1.75 of new
—
March 8 company announced it
plans to issue $8,000,000
of mortgage bonds and sell 186,341 shares of convertible
may
plan
one new common share and
June, of $7,500,000 each of
Co.; Equitable Securities Corp.
Latter will be offered for
amended
$14 principal amount of new 4y2% income de¬
a
package price of $18. The common stock,
except for approximately 4,600,000 shares held by Harri¬
&
share.
an
bentures for
March
Corp.; Smith, Barney
preferred stock which
the New York
Corp.
announced that under
was
Stuart & Co. Inc.; First Boston Corp. and Lazard Freres
& Co. (jointly); Union Securities
6
off
stock and
Dec.
be
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:
Arkansas
or
reorganization it is proposed to issue to holders of all
classes of 6% preferred stock for each old share the
right
to buy a unit
consisting of eight shares of new common
Dallas
Co.
considering offering of
$27,500,000 new first mortgage 3% bonds, the proceeds
to be used to
repay $21,125,000 bank loans and to pro¬
vide additional working capital. The sale of these bonds
Feb.
on
Exchange, its holdings of 7,314 shares of Central
of
are
Feb.
may
Illinois stock.
Proceeds would be used to redeem
$15,162,300 of 4%%
preferred stock and the balance to retire bank loans.
Gas
estimated
period commencing March 20
pany
Louisiana
Electric Co.
to cost approximately
consist of first mortgage
bonds and preferred stock.
Prooable underwriters
bonds: Kidder, Peabody & Co. and Estabrook &
Co.
000,000 of serial notes (to mature either in l-to-15
years
l-to-20 years).
Probable bidders: Halsey, Stuart &
Co. Inc.; Union Securities Corp.; Salomon Bros. & Hutzler; First Boston Corp.; Harriman Ripley & Co., Inc.
Arkansas
&
tion program.
plans in May to sell $27,-
company
Gas
construction
•
Corp.
shares
Blyth &
March
13
Public
Utilities
Corp.
corporation has received SEC authorization to
solicit stockholder approval of a proposed charter amend¬
ment which would permit the public
its
stock
for
cash
without
offering of any of
according the then existing
Co., Inc.
Moseley & Co. (jointly); Merrill Lynch, Pierce,
Fenner & Beane; Lehman Brothers;
Kuhn, Loeb & Co.
and Lazard Freres & Co.
(jointly); Harriman, Ripley
stockholders prior subscription rights to such stock. The
proposal is to be voted upon at the annual meeting to
be held May 1, and must obtain the favorable vote of
& Co., Inc. and First Boston Corp.
(jointly).
retire bank loans of $14,625,000, and to
shares entitled to vote.
and F. S.
Proceeds—
pay
part of
the
cost of conversion from manufactured to natural
gas.
Feb.
4
reported
Georgia
planning sale of $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).
company
Proceeds to pay notes due to Louisville & Nashville RR.
April
12
creation
Corp. of America
stockholders will be asked
holders of two-thirds of
Feb. 21
Carolina, Clinchfield & Ohio RR.
to
authorize
the
of 1,000,000 shares of a new preferred stock
(par $100), 505,000 shares of which can be issued at any
time.
Plans are being formulated for the issuance this
the company's outstanding
Power Co.
company reported
to be planning $6,000,000 ad¬
financing before the end of 1950 (in addition to
$15,000,000 of bonds soon expected to be offered); $19,ditional
000,000
-
more
Green
in 1951 and $16,000,000
Mountain
Power
more
in 1952.
Corp.
March 7 amended plan of reorganization filed with SEC?
provides
for
new common
Celanese
Vashon Telephone
March
filed
development work.
To
stock (par $1) to be sold at more than $3 per share
M.1 B.
by
2
and
Electric
$12.50), to be offered to employees under
employee stock plan. Underwriter—None. Proceeds—
For general corporate purposes.
•
Hudson
15 reported that the
company may issue $19,100,of new securities to provide funds for
its 1950-1952
and
filed
Probable
stock
S.
6
written
Thermo Control
(letter of notification) 20,000 shares of common
U.
Central
Halsey,
asset value.
•
•
March
Central States
28
Probable underwriters:
Dillon, Read & Co. Inc.; Morgan Stanley & Co.
March 1 it
Water Service Co.
(letter of notification) subscription warrants
for 17,647 shares of common stock
(no par) and a like
Feb.
business, including
additional production facilities.
the day.
Virginia
satisfactory, of
initial series of this new preferred stock which
may¬
be convertible into common stock.
Net proceeds would
be used in part for expansion of the
an
Corp. notified SEC
time, during a three months?
March 21 filed 3,000,000 shares of common stock
(par $1).
Underwriter—W. L. Morgan & Co.
Offering Price—To be
determined on the basis of net asset value at the close
of
West
considered
are
61
March 10 Commonwealth & Southern
it will sell from time to
or
Turner
•
Office—Ranke
Wellington Fund, Inc.
company.
inventory requirements.
Houre, Mont.
Proceeds to
stores in Wash¬
ington and Oregon to sell retail jewelry.
Building, Seattle, Wash.
Mont.
Price—$100
Robert
14
if market conditions
year,
000
Seattle, Wash.
(letter of notification), 6,000 shares of capital
stock at $47.50 per share. No
underwriters.
be used in setting up additional branch
8
(letter of notification) 2,000 shares of 6% cu¬
mulative
non-convertible
preferred
stock
and
1,000
Office
Inc.,
March 20 filed 300,000 shares of common stock
cumulative
Great
March
March
Texmass Petroleum Co., Dallas, Texas
Jan. 13 filed $3,000,000 of 4%% senior cumulative
•
Weisfield's,
Westinghouse
DJarch 9 filed 213,306 shares of common stock (par $5),
owned by 10 stockholders.
Underwriter—Dillon, Read
& Co., Inc., New York.
Price—To be filed by amend¬
ment.
Expected March 29.
March
•
100,000 shares of cumulative preferred
$100).
Price—To be filed by amendment.
(par
terest
operated combination television and phonograph.
Avenue, New York, N. Y.
—701—7th
filed
14
Stock
Gas
Videograph Corp., N. Y. City
(letter of notification) 300,000 shares of common
stock
(par 10c). Price—$1 per share.
Underwriter—
George J. Martin Co., New York.
Proceeds—For addi¬
tional
working capital.
Business—Assembles a coin
Feb. 2
(1253)
sale
of
approximately
100,000
shares of
stock for cash to the public
through under¬
writers, subject to prior subscription rights by present
preferred stockholders. Hearing March 28. ExemptkH*
from competitive bidding has been requested.
Proceed^
*
Continued
on
page 62
62
Continued,
from
&
stated
was
that Harriman
Sachs
page
•
61
Co.
Under¬
16
in the "Chronicle" of March
Ripley & Co., Incorporated, and Goldman,
be the probable underwriters.
We
would
officials of both banking houses
dealings whatever or entered into
any commitments, written or otherwise, with the utility
corporation. The names of these two firms were used
without their permission or knowledge.
have been informed by
that they have had no
Idaho Power Co.
President, said company plans to sell
later this year to raise
up to $4,000,000 to finance, in part, its 1950 construction
program.
Traditional underwriters: Blyth & Co., Inc.;
Wegener & Daly Corp., Boise, Idaho.
Feb. 7 T. E. Roach,
additional 4%
Interstate
preferred stock
31
of
Telephone Co.
stockholders
will
new
one
for each
vote
on
approving long-
borrowing of up to $6,000,000, the proceeds to be
used to redeem $2,320,500 first lien collateral 3% bonds
due 1961, $359,000 first mortgage 3Vs% bonds of Platte
Valley Telephone Corp., a subsidiary, and $150,000 of
bank loans, with the remainder added to working capi¬
term
tal.
shares held.
seven
used
be
•
and
March 10 reported that early registration with SEC is
expected of an offering of about $18,000,000 preferred
and common stocks through a negotiated deal. Probable
underwriters: First Boston Corp. and G. H. Walker & Co.
issues.
New York, N. Y.
19 reported company may issue and sell approxin
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;
Omaha, Neb.
Issue
Southern
Feb.
March 20.
r
on
>y ICC)
March 16 by
10,1950,
), of
th^
Hutzler and
associates, awarded the issue on March 9,
coupon and $735,688.20 as underwriting
compensation to be paid by company.
named
3%
a
I
>
instalment notes.
Spencer Chemical Co.
March 10 company
200,000 shares of
Probable bidders
Co. and
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
•
reported planning issue in April of
common
stock with Glore, Forgan &
Kidder, Peabody & Co.
as
underwriters.
Pacific Ry.
March 21 directors approved purchase of 13 additional
Diesel-electric locomotives (to cost approximately $3,
•
shares to prepare for future financing.
It is reported
that stockholders may be given rights to subscribe for
additional stock, the net proceeds to finance a new plant
to be built south of Canton, O. Probable underwriters:
Philip Morris & Co. Ltd.,
which might
largely by equipment trust?
Halsey, Stuart & Co. In
Corp.; Kidder, Peabody & Co.; Salomoi
Bros. & Hutzler; Harriman Ripley & Co., Inc.; Harri;
Hall & Co. (Inc.); Blair & Co., Inc., L. F. Rothschild
Co. and Schoellkopf, Hutton & Pomeroy, Inc. (jointly
Bankers Trust Co., New York.
500,000),
for bonds:
Halsey, Stuart & Co. Inc.; Union Securities
Corp. and Equitable Securities Corp. (jointly); Salomon
Bros. & Hutzler; First Boston Corp.; Otis & Co.; Kidder,
Peabody & Co.; Merrill Lynch, Pierce, Fenner & Beane;
Blair, Rollins & Co., Inc. and Carl M. Loeb, Rhoades &
Co. (jointly); Lehman Brothers.
RR.
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.).
company
announced
(5/2)
20
company
will
be
(Territory of)
received
at
the
(3/28)
office
of
Mitchell
and
Pershing, 120 Broadway, New York, N. Y., until 11 a.m.
(EST), March 28 for the purchase of $18,000,000 Of public
improvement bonds of The People of Puerto Rico dated
Jan. 1, 1950, and to mature serially from 1951 to 1969,
inclusive.
Probable
bidders:
•
Dec. 20 reported the company may issue in a few months
securities, which may
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
include bonds and debentures and
National
Fireproof ing Corp.
April 6 debenture and common stockholders will vote
on a plan to refinance the $2,636,900 5% income deben¬
tures due may 1, 1952, together with interest thereon
amounting to $635,790, and provide additional working
capital, by issuance of evidence of indebtedness not to
exceed $3,500,000. Probable underwriters: Kneeland &
vote
*.
National City Bank;
City of New York.
Rochester Gas & Electric
Corp.
March 17 company reported to be planning issuance
some time this year of about $7,000,000 new securities
(probably bonds and preferred stock). Probable bidders
for both issues: First Boston Corp.; Salomon Bros. &
Hutzler; Harriman Ripley & Co., Inc.; Lehman Brothers;
Carl M. Loeb, Rhoades & Co.; Union Securities Corp. and
Equitable Securities Corp. (jointly). Probable bidders
also for bonds: Halsey, Stuart & Co. Inc.
increasing the authorized common stock froi
500,000 /shares, no par value, to 1,000,000 shares, par $J
provide for a 1.20-to-l split-up and for futuri
financing, acquisition of property and other purposes,
No immediate
financing planned.
Smith, Barney & Co.
Envelope Co.
I
(in addition to approving a 2-for-l
split-up of the common and preferred stocks) increased?
the authorized common stock (par $50) by 80,000 addi¬
tional shares to be retained in treasury for the present,
United States
j
—
Utah Fuel Co.
The referee will offer at public auction at 11 a.m. on
April 10 all of the 100,000 outstanding shares of stock of i
Co. of New York, ;
J 40 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
Feb. 17 it
1950
is pre¬
paring 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 &
(jointly); Merrill Lynch, Pierce, Fenner & Beane;
Kidder, Peabody & Co.; F^Eberstadt & Co.; Allen & Co.
Co.
Seaboard Air Line RR.
(
issue
sell
and
West Coast
Transmission Co., Ltd.
Feb. 10 reported that
Eastman, Dillon & Co. and the First
Corp. were ready to underwrite the financing
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% 5
to bonds and the remainder to preferred and common
stock.
A large 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
Boston
of the
.
Washington, Oregon and California. The completed line,
it was announced, will cost about. $175,000,000.
Wheeling & Lake Erie Ry.
amount of bank loans.
Stuart & Co. Inc.; Kuhn, Loeb & Co.; Lehman Brothers;
by
any
new
shares at
New York Central RR.
Feb. 7 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.
Seaboard Air Line RR.
(3/23)
Bids will be received at office of Willkie, Owen, Farr,
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.;
Salomon Bros. & Hutzler; Harriman Ripley & Co., Inc.
and Lehman Brothers (jointly); Harris, Hall & Co. (Inc.)
and Lee Higginson Corp. (jointly).
on
now
First Boston Corp. and Harriman Ripley & Co.
Union Securities Corp.
It is not planned to issue
stock
000 of first
•
present.
common
outstanding, and to issue and sell $10,000,- ;
mortgage bonds. Probable bidders for bonds: ;
Halsey, Stuart & Co. Inc.; Drexel & Co.; Harriman Rip- 5
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.
y
common
Co.; Glover & MacGregor.
(jointly);
during
\
to
refunding of the approximately $31,800,000 outstand¬
ing first mortgage bonds, provided satisfactory terms
could be arranged.
Probable bidders include Halsey,
National Malleable & Steel Castings Co.
March 29 stockholders will vote on increasing the author¬
ized common stock from 600,000 shares to 1,000,000
Co.
announced that company proposes
basis of one share of new stock for each eight shares of
Feb. 7 directors appointed a committee to proceed with
the
was
the minimum
•
Schering Corp.
(4/10)
this corporation at the Guaranty Trust
San Diego Gas & Electric Co.
Jan. 26 announced the Alien Property Custodian
Probable underwriter:
March 10 stockholders
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.
Ohio
on
in order to
The
The Chase National Bank of the
financed
March 2 announced that stockholders will on March
•
reported planning issuance of $90,-
000.000 new bonds for the purpose of refunding $50,000,000 3Ys% bonds due 1965; $10,000,000 3Ya% bonds due
1968; $15,000,000 3% bonds due 1970 and $15,000,000
bonds due 1972. Stockholders expected to authorize re¬
funding program in near future.
Puerto Rico
be
Probable bidders:
Thompson Products, Inc., Cleveland,
company
of about
Montana Power Co.
approximately $22,000,000 in
be in the form of additional common
Public Service Electric & Gas Co.
•
Probable bidders
7
March
Bids
Missouri-Kansas-Texas
Inc.
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 ZVt% bonds due l966.-Expected about May 2.
•
and the balance from senior securities.
to
Lee Higginson
Public Service Electric & Gas Co.
Feb.
Cobbey, Shively & Co. of Canton.
Mississippi Power Co.
March 8 company estimated that about $5,000,000 will be
required for construction costs for the years through 1952
which will have to be provided from the sale of addi¬
tional securities, of which it is presently planned that
$2,000,000 will be raised from the sale of common stock
Texas &
certificates.
March 20 directors authorized officers to develop plans
for public financing of $25,000,000 to $30,000,000, part
•
Inc.
March 8 stockholders approved an increase in authorized
common stock (par $4) from 300,000 shares to 400,000
(and
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. &
announced company proposes to
on
Pacific Co.
16 directors approved
the offer to stockholders of record March
stock.
Stone & Co. as principal underwriters of a proposed of¬
fering of 100,000 shares of new unissued $5 par common
stock, subject to approval by Stockholders of proposed
plan of recapitalization and change in name to Knott
Hotels Corp. Proceeds will be used to reimburse treas¬
ury for capital expenditures already made and to in¬
crease working
capital.
Proposals were approved on
shares.
of bonds.
Probable bidders:
and Harris, Hall & Co. (Inc.)
Southern California Gas Co.
issue and sell
at competitive bidding $52,000,000 of first mortgage bonds
due 1980 and to issue additional bonds or borrow $4,200,-
of
•
Corp.
Dec.
Ohio Edison Co.
March 2 the directors authorized discussion with Hayden,
Feb. 24 reported
$55,000,000
Boston
(jointly); Halsey, Stuart & Co. Inc.; Blyth & Co., Inc.;
Proceeds would be used to refund $30,000.000 3V4% bonds and for construction costs.
Co.
Keyes Fibre Co.
March 14 company reported planning issuance of a new
preferred stock and redemption of two present preferred
Metropolitan Brick,
First
include:
fowa Electric Co.
•
summer
The
reported that company expects to issue
Shields & Co.
competitive bidding $40,000,000 of 2%%
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 supply from $9,060,000 to
$10,657,500 of new capital. The net proceeds, together
with other funds, will be used to finance the company's
construction program. Probable bidders for the deben¬
tures: Halsey, Stuart & Co. Inc.; Blyth & Co., Inc.; The
First Boston Corp.; Kidder, Peabody & Co. Offering of
stock expected in May and of bonds in June.
000 from banks
Knott Corp.,
this
Edison Co.
California
was
at
sell
Feb. 21
Electric & Gas Co.
reported
Southern
this year's
Gas Co.,
13
March 3 it
Proceeds esti¬
Jan. 20 announced that the company proposes to
South Carolina
that the company may sell in the
Fall $2,000,000 bonds and 30,000 shares of preferred stock
(par $100), the proceeds to be used for expansion.
Groups to compete for the offerings are being formed.
between
finance
to
Thursday, March 23, 1950
March
$6,000,000 and $8,000,000, will be
portion of the construction
program, which, it is estimated, will cost over $55,800,000
in the next three years.
Traditional underwriter: The
First Boston Corp. Other probable bidders for preferred
issue: Kuhn, Loeb & Co.; W. C. Langley & Co.; Lehman
Brothers and Glore, Forgan & Co. (jointly); Harriman
Ripley & Co., Inc.; Salomon Bros. & Hutlzer; Kidder,
Peabody & Co. and Merrill Lynch, Pierce, Fenner &
Beane (jointly).
mated to
Northern Natural
First Boston Corp.
Investors
CHRONICLE
authorize
a two-for-one split-up of the common stock, the sale of
an
additional 800,000 shares of new common stock and
200,000 shares of new serial preferred stock. Company
expects to presently offer 272,380 shares of the increased
common stock to present common stockholders in ratio
Power Co.
May 2 stockholders will vote on authorizing an issue of
500,000 shares of preferred stock (par $25). Company
also planning to issue in May or June $8,000,000 of bonds.
A group headed by Merrill Lynch, Pierce, Fenner &
Beane and Kidder, Peabody & Co. has been formed to
bid on the latter issue. Other probable bidders may in¬
clude: Halsey, Stuart & Co. Inc.; Smith, Barney & Co.;
March
FINANCIAL
Electric & Gas Corp.
York State
New
&
Stockholders today will vote on a proposal to
notes and for working capital.
—To retire
writers—It
COMMERCIAL
THE
(1254)
March
9
announced
$4,000,000
bonds
company
early
next
-
(4/6)
plans to
month to
issue and sell
refund a like
,
Underwriters—To be determined
competitive bidding.
Probable bidders:
Halsey, .
Stuart & Co. Inc.; First Boston Corp. and Kidder, Pea¬
body & Co. (jointly); Salomon Bros. & Hutzler; Lehman
Brothers; Harriman Ripley & Co. Inc. Expected April 6. '
White
(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.
The company plans a 5%
stock dividend, the offering for sale to stockholders of
29,891 shares on a l-for-10 basis, and an offering of
20,000 shares for subscription by employees.
1
•
Volume 171
Number 4892
THE
Secretary and Treasurer of Mont¬
Stone & Peyser.
Interstate Securities
gomery,
Jonathan
Interstate
Securities
Charlotte,
N.
/ooening of
a
C.,
Corp.
New York office at
49 Wall Street, under the
;
•agement
of
of
the
announces
and
man-
be
the
thenewof-
customers
and Mid¬
The
now
Investment
of
sociation
Bankers
Associa¬
Securities
Dealers,
Tele-
Inc., and the Midwest Stock Ex¬
phone number
2-8446;
s' type,
Tele¬
NY
1-
3544.
Mr.
Mont-
$75,000,000 Nor. Carolina Road Bonds Offered
by
writing
H. L. Montgomery
Wall Street
20 years, was
{.Vice-President
of
formerly
Southern
of
from present Federal income taxes
and tax-exempt in the State
of
North
municipal
Robinson-Humphrey Co.; Stranahan, Harris & Co., Inc>; City Na¬
specializing particularly in
the
North
Carolina
&
South
Caro¬
Harris
lina issues.
a
C.
Montgomery,
Stone & Peyser, and prior thereto
SITUATION
National
Among others participating in
offering are: Chemical Bank
Trust Co.; Blyth & Co., Inc.;
bonds
and
w
Trust
J.
&
Devine
uvocxno.ders
j]Joseph
Eckstein
&
Savings
Co.;
Bank;
The Phila¬
State
Bank,
Newark;
F. S. Smithers & Co.; Stifel, Nicolaus & Co., Inc.; G. H. Walker &
Co.; William Blair & Co.; H. M.
Byllesby and Co. (Inc.), and Com¬
Trust
merce
Janareli
&
Co.
and
DIVIDEND NOTICES
.
Twenty
years'
headed
trading
three large
.
Average
IS IT GETTING YOU DOWN?
above
If you are a
producing unit retailing or
trading securities, we can work out an
arrangement that will free your talents
production.
Ample
capital,
well
over
-
the
-
counter
tails
^
If
Chronicle,
25
Commercial
Park
Place,
town
per
of
net. Good
Full
connections.
interview.
&
well
earnings
year
Box
Financial
house.
B
de¬
323,
At
Park
Place,
New
stock
mon
March
record
DIVIDEND No.
National Shares
14
A
has
New York
Wall
dividend
of
erf
the
Company,
March
31,
of
The
Board
Mutual
1950.
dend
H. B. Pierce,
able
Secretary
of
has
of
April
on
record
April
the
of
national shirt shops
OF
DELAWARE, INC.
DIVIDEND
NO.
The Board of Directors
quarterly
common
holders
books
dividend
of
of
will
record
not
be
34
has declared
20
stock, payable
cents
April
March
1950
24,
pay¬
31,
1950.
30
THE DETROIT EDISON CO.
GAS
Rockefeller
New
York
20,
Dividend
Bonds,
The
3'/2%, due September 1, 1966
MINING
have
COMPANY
declared
quarterly
a
has this
the provisions of
the Mortgage and Deed of Trust of The Detroit Edison Company,
dated as of October 1, 1924, and of the Indenture dated as of
September 1, 1936, supplemental thereto, to Bankers Trust Com¬
pany, as Trustee, The Detroit Edison Company has elected to redeem
and pay, and will redeem and pay in lawful money of the United
States of America, on May 15, 1950, all of its General and Refunding
Mortgage Bonds, Series G, issued and outstanding thereunder.
Bonds
presented for redemption should have attached all coupons
maturing after March 1, 1950. The March 1, 1950 coupons apper¬
taining to such bonds should be detached and presented for collec¬
on
the
pany,
to
meeting
a
held
pany,
tive
INVESTORS DIVERSIFIED SERVICES
the
~
of
Company
the
as
Investors
of
Board
cash
of
1950,
a
per
share was
$5.00 Cumula¬
15,
$1.25
the
upon
Stock
payable
April
pany,
Syndicate.
March
Preferred
holders
of
of
on
MORRIS
the
14,
such
close of business
Minneapolis, Minnesota
Com¬
1950,
stock
at
to
the
April 3, 1950.
H.
WRIGHT
Vice President & Treasurer
March
Y.
15, 1950
Cleveland, Ohio
13
a
regular
dividend
($1.00)
of
zT
share
capital stock of the Com¬
payable on May 15, 1950,
per
Call for
PHILIP MORRIS"
stockholders of record at the
close of business April
17, 1950.
E. E. Duvall,
Secretary
New York, N. Y.
March 22,
1950
St
March 20, 1950
Philip Morris & Co.
The
$1.00
clared
rei
of
Ltd., inc.
quarterly dividend of
the Cumulative Pre¬
regular
share
per
41
of
year
on
4%
ferred Stock,
has been de¬
Series,
payable May 1. 1950 to holders
at the close of business on
record
consecutive
April 17, 1950.
There has also been declared a regu¬
FoREmosT Dairies,Int.
lar quarterly dividend of 75^ per share
and
Jacksonville, Florida
The Directors of Foremost Dairies,
extra dividend of 75* per share
Stock ($5 Par), pay¬
an
able April
Inc.,
15,
Stock
mon
of
record
Pursuant to
at
the
of
close
1950.
resolution adopted at
a
the Stockholders' Meeting held on July
1945,
10,
6% PREFERRED STOCK
share
or
Certificate representing a
of Common Stock of
no
SOUTHERN CALIFORNIA
shares
EDISON COMPANY
the par value of $10 each is recognized,
75c Per Share
payments
1950 to holders of Com¬
business on April 3,
following quarterly dividends:
dividend
the Common
on
Jacksonville, Fla., have declared the
for any purpose, until surrendered, and
4% CONVERTIBLE
manner.
a
registered bonds are presented and payment to other than
the registered holder is desired the transfer tax due must be paid
and the bonds must be assigned in blank or accompanied by properly
executed instruments of assignment in blank.
Certificate
each
50c Per Share
such
new
$5
April 1,1950,
been
have
of
for
for
of
shares
Certificates
for
Common Stock of the par value of
share,
on
of business, March 10,1950.
par
PREFERENCE
STOCK
4.4$r, CONVERTIBLE
DIVIDEND
SERIES
NO. 12
PREFERENCE
STOCK
the basis of two shares
value,
for each share of Common Stock of the
new
COMMON DIVIDEND NO. 161
therefor.
issued
Certificates
Certificates,
per
of
Stockholders of record at the close
By Arthur S. Albright, Treasurer.
new
Common Stock of the par value of $10
each are, therefore, urged to exchange
20c Per Share
Each Dividend is payable
shall
Holders
COMMON STOCK
to
for
Certificates
or
Common Stock of the par value of $5
PREFERRED STOCK
case
CO.
Treasurer,
directors
of
day declared
Dollar
One
NOTICE IS HEREBY GIVEN that, pursuant to
Accordingly, on May 15, 1950, there will become and be due and
payable upon each bond of such Series G, upon presentation with
all coupons maturing subsequent to March 1. 1950, at the principal
office of the Trustee, Bankers Trust Company, Corporate Trust
Department, 16 Wall Street, New York 15. N. Y., the principal
amount thereof, together with accrued interest to May
15, 1950,
and a premium of 4^% of the principal amount of each such bond.
From and after May 15, 1950, interest on such bonds will cease to
accrue, the coupons for interest maturing subsequent to that date
will be void and such bonds and coupons will cease to be entitled
to the benefit of the lien of said Mortgage and Deed of Trust.
FRANCIS
FISKE,
'
The Weatherhead
Principal Underwriter and
Investment Manager
Plaza
N.
No.
board
semi-annual
Common
Stock
$5
par
4.56%
CONVERTIBLE SERIES
DIVIDEND
NO. 8
value of $10.
LOUIS KURZ, Secretary
L. G. HANSON, Treasurer.
rmazzmmmmEzsmwBzznmm.
Dated, March 15, 1950
The Board of Directors
authorized the payment
has
of the
following quarterly dividends:
NOTICE
OF
PRIOR
PAYMENT
('worCdamdE banking"
The Detroit Edison Company
50 cents per
DIVIDEND
has instructed Bankers Trust
Company to pay on and after March 15, 1950 the principal of
and premium and accrued interest to May 15, 1950 on any of
said bonds which are presented at the Corporate Trust Department of Bankers Trust Company, 16 Wall Street, New York
15, N. Y. All coupons maturing after March 1, 1950 should
40c per
he attached to the bonds.
the
As
a
convenience
to
of
Detroit,
660
Office of National
Common
28
New
York
has declared
share
on
a
close of business
THE
CHASE
City of
dividend of
tfie 7,400,000 shares of
April 3, 1950.
The transfer books will not be closed
in connection with the
HATI0NAL
BANK
payment of this
dividend.
CITY OF
NEW YORK
on
the
cents
per
share
on
the
vertible Series;
28V2
cents per
Preference
share
on
the
Stock, 4;56% Con¬
vertible Series.
All three dividends
able
April 30, 1950,
holders of record
are
to
pay¬
stock¬
April 5,1950.
T. J. GAMBLE, Secretary
A.
OF THE
share
Stock;
Preference Stock, 4.48% Con¬
capital stock of the Bank, payable
May 1, 1950 to holders of record at the
that if said bonds
Woodward Avenue, Detroit 26,
Michigan, or at the Principal Office of The Manufacturers
National Bank of Detroit, 151 West Fort Street, Detroit
31, Michigan, the holder thereof will receive payment in
Detroit upon the terms above stated.
Bank
NOTICE
The Chase National Bank of the
the bondholders, arrangements have
been made by Bankers Trust Company so
and coupons are presented at the Principal
the
stock¬
Transfer
Directors of the Weatherhead Com¬
NATURAL
EDISON
on
to
closed.
AND
Directors
At
1950.
7.
REDEMPTION
DETROIT
regular
a
share
a
1,
SYLVAN COLE, Chairman of the Board.
Dividend
THE
stock
1950 to
business
of
195,JOSEPH 8' STOPT' Sm"an-
March
shareholders
to
March
divi¬
share
per
1950
H. K. Bradford, President
General and Refunding Mortgage
share
per
15,
close
1950.
COMPANY
In
at
Investors
quarterly
a
cents
21,
as
of
Directors
declared
fourteen
Established 1894
tion in the usual
record
(15c)
the capital
on
°/ the Corporation payable
stockholders
York
cents
day
Dividend Notice No. 38
payable
1950, to stockholders of
the close of business March 22,
CONSOLIDATED
Series G,
this
New
INVESTORS MUTUAL
7.
OF
fifteen
been declared
declared
NOTICE
the
Corporation
Street,
for
L
ie
Incn
March
15, 1950
295
31,
at
Chronicle,
York
at
FOUNTAIN,
Secretary & Treasurer.
March 15, 1950
COMMON
meeting of the Board of Directors,
held this day, a quarterly dividend of
25<t per share was declared on the com'
a
Financial
&
L.
t%% (87)3 cents per share) on
Preferred Capita' Stock
payable on April
15, 1950 to stockholders of record at the close
of business March 27, 1950.
No dividend was
declared on the Common Stock.
on
25
322,
department
stock exchange houses.
$50,000
on
Has
experience.
annual
Commercial
Confidential.
Box
of
out
lor
jstablished,
stock
27, 1950.
the
Packing Company
'\r';;J
BUSINESS OPPORTUNITY
.
such
ot
March
H.
REFINING
DIVIDEND NOTICES
The Garlock
was
AVAILABLE
OVERHEAD
record
on
dividend of
UNUSUAL TRADER
YOUR
CORPORATION
Co., Kansas City.
with
was
of
close of business
The
Mr.
COAL
of
UNITED STATES SMELTING
WANTED
for many years was with Adams &
Peck.
Board
general in¬
a
VALLEY
March 16, 1950.
Directors of this Corporation
has today declared a dividend of
approximately
81.9 cents per share on its
$3. Non-Cumulative
First Preferred 8tock,
payable April 10, 1950,
The
group of 100 underwriters
headed
by The Chase National
Bank.
Salem, N. C.; Hemphill, Noyes,
Graham, Parsons & Co.; A. C.
Allyn and Co., Inc.; Harris, Hall &
The issue, due Jan. 1,
1953-70, Co. (Inc.); Lee Higginson Corp.;
inclusive, is priced to yield from The Marine Trust Co. of Buffalo;
0.75 to 1.70%,
according to ma¬ Paine, Webber, Jackson & Curtis;
turity, with exception of the 1959 Trust
Company of Georgia; Ira
maturity which is offered at a Haupt &
Co.; Aubrey G. Lanston
dollar price of 100.
& Co. Inc.; Carl M. Loeb, Rhoades
The bonds are
interest-exempt & Co.; Otis & Co. (Inc.); The
63
dividend notices
LEHIGH
a
chusetts.
gomery,
who
has been in
over
(1255)
Carolina.
They represent tional Bank & Trust
Co., Kansas
legal investment for savings banks
City; Courts & Co.; F. W. Craigie
vestment business as underwriter, and trust funds in New York and
&
Co.;
Fahey,
Clark
&
Co.;
dealer, distributor and broker and certain other states and for savings Hirsch &
Co.; Laurence M. Marks
banks in Connecticut and Massa¬
has been very active in the under¬
& Co.; W. H. Morton &
Co., Inc.;
change. It conducts
Hanover
for
institutional
tion of America, the National As¬
(.department of
i
company
firm, which has a cap¬
ranking among the
major investment banking houses
of the Southeast, is a member of
charge of
i. t h e
trading
is
to
italization
in
fice.
the
enabling it to offer enlarged
west.
-
I-
of
and dealers in the East
gomery.
J.
Francis
Eck¬
will
CHRONICLE
G.
facilities
service
Hale L. Mont¬
stein
FINANCIAL
Interstate
office
f
o
&
Gullick, President
Public offering is being made
delphia
National
Bank;
Union
Securities, said that today (March 23) of a new issue Securities
Corp.; Merrill Lynch,
the new office represents an ex¬ of
$75,000,000 principal amount of Pierce, Fenner & Beane; Equit¬
pansion of a business established State of North Carolina
secondary able Securities Corp.; Wachovia
in 1928, complementing the home road
4%, 1*4% and 1%% bonds Bank and Trust Co., Winston-
Opens NYC Branch
-
COMMERCIAL
J. EGGER
Vice President and Cashier
March 17, 1950
64
& FINANCIAL CHRONICLE
THE COMMERCIAL
(1256)
Thursday, March 23,. 1950
gJ
/m
or
off
one
from
JL fLflt/
how
that
Mr.
Truman
has refused to
repeal Taft-Hartley, it was safe
Since the Congress
C.—Now
tried
has
out
to
close
the fancy stunt of using the Re¬
organization Act to attempt to
reorganize out 01 existence the
independent counsel of the Na¬
tional
of the
some
Relations
Labor
least
would "veto" the plan to kill
By
of
way
this
smart
all
after
not
the
veto
ert N. Denham
of
of
as a
If
NLRB.
tees
General Coun¬
neither the House
by
60
passes a
stating that
it
dis¬
approve? of this plan, it goes into
effect.
Then
the
independent
counsel goes out of
Mr.
,
by.
Denham
NLRB.
prosecute
;
He
free
as
.
save
There is said
sibiiity
that Mr. Denham's job
court may it please do so.
will be
reorganized
NLRB is * pretty "well
The
stacked
quasi-judicial outfits like NLRB,
;
incidentally,
;
crown prosecutor all rolled in
judge, jury and
are
j one.'
Under
such
set-up, if the
or
Board
decides,
speaking, to hang
^Commission
figuratively
a
ieomebody, it directs, its
open
counsel to
proceedings which
before the
.mission,
whether
h i ch
the
or
or
then
*
victim
is
This
Com-
decides
guilty
as
Commission thought
it must be in the first place or it
would not have instituted the
pro¬
ceeding.
The Board could direct
its counsel by whatever name he
may be called, to go sic 'em.
Conversely, anybody's violation
It would also be
vately, they want him around, as
it were, to cuss him.
In fact,
contend that Truman
some
fire
to, since
was
created in the statute.
The present occupant of that
office, Robert N. Denham, a
Presidential appointee, has in¬
sisted in
unions
so
far
sponsibilities.
crreat
as
fulfill
legal
re¬
This has been
irritation
12?iey
he could, that
their
to
the
a
unions.
uDon Mr. Denham as
being nothing but a doggoned
employer representative within
,
,
*he NLRB which, after all, is
The unions definitely would
like.to have all that Act
but
basis
repealed,
might settle
for
on
law,
and
interim
This
to enforce the
his
cop who in
mob.
an
switching off the beat
the cop who. tries
replacement by a
reality is one of the
was
the
thinking until
the unions
began to appraise the
reality of losing Denham.
Superficially,
the
President's
proposal to reorganize NJr. Denout of his job looked like
bam
good,
routine,
smart
politics.
House and
appropriat ons
from Committee,
times conservative, but who al¬
they
come
to increase them.
board
him
quasi-judicial
a
commission.
or
out
of
Denham's
could be terminated,
really wanted to take
say,
of the
ways
makes himself heard,
officials
Samuel
B.
Jr.,
Stewart,
for Transamerica,
of
the
most
attor¬
which
he
told
Then
that, by gosh, Transamerica had
all
is
set
to
if they didn't.
It
different
was
america
when
Trans¬
did appear,
and with no
timidity, but armed with the most
painstaking details about its busi¬
ness, a most complete willingness
to tell in chapter and verse what
union's hair, sim¬
terrible
evils
which
within
might some day come from bank
holding
companies.
Thus, two
years ago a similar holding com¬
pany regulation bill was reported
out of committee unanimously.
the 60-day period.
If
doesn't, if he tries to stall,
Republicans
'If
he
then Labor
up
will
does
crucify
schedule
gets mad.
it,
Lucas
is:
for election this year.
*
about
willing
are
two. feet;and
*
as
For
some
strange reason there
Senate
temper
your
will get
members
Banking
-
or
some¬
of.. the
Committee
when they for the first time go
the other side, disclosed a rea¬
sonableness to do
some
second
thinking, that they
never
cated
opened
when
they
indi
the*
\
hearings.
(This column is intended to
re¬
flect the "behind the scene" inter¬
pretation from the nation's Capital,
and may or may not coincide with
the "Chronicle's" own views.)
little
gan
differently.
to have
He even
be¬
He let Mr. Stewart, as
it
have
were,
almost
Reserve
amended
a
his
in
head.
It
is
certainty that the
will
bill
Board
Riverside Cement
Spokane Portland Cement
Oregon Portland Cement
Coplay Cement Mfg.
Giant Portland Cement
LERNER & CO.
Investment
10 Post Office
Securities
Square, Boston 9, Mass.
Telephone HUbbard 2-1991
Teletype BS 61
Walt Disney Productions
"The
Cinderella
Analysis
Stock
on
of
1950"
Request
doubts about
some
the bill.
now
Cement Stocks:
several
be
important
Missouri Pacific
General 4s 1975
Convertible
5%s 1949
Common A and Pfd<—'When
Issued
*
scheduled.
reductions
the
to
The
to jstamd
fight it
the Committee
to
proposed
better appear and be subpoenaed
as
him.
you
your
what
Senator
the
about the bill.
felt
in
turned
performances yet seen in this
Capital City on how to handle a
Committee
re¬
craftsmenlike
be up to him to schedule action
the
set, pat statement
the Committee
or
at
a
private
luncheon in which Transamerica
string you up, is convinced of
your "guilt," and wants to hear
ply by firing him. :
If Congress by default let Den¬ just as little of what you have to
ham go, then the Labor Political say as it can get away with.
Action groups would find it even
The Senate Banking Committee
was wrong with the bill.
tougher with their campaign to has been having hearings on the
Senator A. Willis Robertson of
replace with union stooges, those Federal Reserve Board bill to put
Congressmen who have stood up bank holding companies into a Virginia began to feel differently.
He intimated Transamerica
to Big Labor.
regulatory strait-jacket. The mem¬
much time.
He
It will be most embarrassing,
bers of the Senate Banking Com¬ shouldn't take
might limit
if the Senate Expenditures Committee up until recently had heard even suggested he
mitee reports out the resolution
almost nothing of opposition to Mr. Stewart to 10 minutes under
of disapproval.
the Reserve Board bill, but for the rules.
Senator Scott
Lucas, as Majority Leader, will
years had received the benefits
After Mr. Stewart got going,
be right in the middle.
of missionary work by the Board
It will
Mr. Robertson began to feel a
he
Senator.
openly
ported
they
ney
posed
ably the most important objective
involved in repealing Taft-Hart¬
as
one
member
job
ley.
Cain
of
Washington, who
is
sometimes "liberal" and some¬
however, the
dure,
of
dominant influence
White House.
Finally, in this background, the
abolition of Mr, Denham is
prob¬
this possibility is not
As a normal proce¬
the Senate amend
Denham's job
By and large, the House Appro¬
priations Committee turned out a
the
out.
could
owned by the unions through
the holding company device of
over
although
ruled
is not in
the semi-protected status of that
a
hand,
where.
Denham any time he wanted
sion decides to track him down.
NLRB
reversal for
a
strategists
as. well.
'While they sell the dues-paying
members
against Denham, pri¬
a
who has full power
out, don't lose
a
union
the
if Truman
ihe union heel to the
law, the
causes instituted would have been
few indeed:
So the independent
office
of
General
Counsel
of
If
on
ex¬
political calamity for the Truman
If Denham's job
were
wiped out, over half the
argument against Taft-Hartley—
the argument as it appeals to the "I know
you're a new doctor here, Bentley, but you DON'T
unions —would vanish.
Trumari
get patients by dropping a banana peel in front of your door!"
would go into the campaign with
a very weak labor issue.
,
job, they
union conduct, to make their
en¬
forcement somewhat possible.
If
it had been left to NLRB to make
at
something of
the
of
statements
your nerve, you
be
boys
of
catch
catch you up on something
didn't think about when you
prepared .your "brief/' •
:
.
would
of any law may go unprosecuted
unless the governmental commis¬
When the Taft-Hartley Act was
legislated, the 80th Congress had
the elementary
sense, in for the
first time making some rules for
out of
not
your
a man
before
Administration.
tried
are
Board
same
w
the Board
istence..
Most governmental
to be,
as
witness with a
you
status.
members
may
slip them to
make
will
this distance, a dangerous pos-;
half-
any
on the spot
about policy and reveal all factual
information. Do not tie down, your
to
hand to vote to
on
the
bright
the
islation
Mr. Denham's independent
ators to be
to
pull
witness to testify
against prospective punitive, leg¬
primary
of
obeying the law as any prose¬
cuting attorney is free to initiate
hn action without asking a
for Labor.
!
times
these
to
though
Select
of the Sen¬
ators
at
home
campaigning
from time to time, it will be
rather difficult to get 49 Sen¬
existence.
is
will
fights with many
hot directed
is
labor union for dis¬
a
In
try
the staff of the Committee who
disapproval of this move to kill
resolution
probably none of the
the Congress.
Committee
them,
will hear resolutions
or
obse-
get
agencies who are out to crucify
you
wilt slip .the answers to
qff Denham's job, there is always
the
possibility that these pro¬
posals might fail.
days
Senate by a
or
^constitutional majority"
are
reply belligerently,
contrary,
other patent deceptions.
or
Even
the
proposed
reorganization. While both House
and Senate expenditures commit¬
sel
Don't
truth
strategy
proposed
Reorganization Plan, the abolition
of the independent office of Rob¬
as
they are
business of
is, is that it appears to be some
possibility that Congress might
the
background,
President submitted
how
wonder
the
to insulting you
don't let it fluster
the
on
no
members of
the
in
It
the
pro¬
regular
had
been
noised
Committee the
that
around
erroneous
Transamerica
the
notion
might
be
respects
before
it
out
gets
of
BATKIN & CO.
committee.
In
the
process,
Mr.
Stewart
30 Broad
Street, New York 4
Tel. WH 3-3388
afraid to appear.
Senator Harry
showed
some
Tele. NY 1-1965
rules, by his action,
agency and
departmental bills, in
the neighborhood of $1.3
billion,
to which it is tentatively
expected,
there will be
a
cut of
an
additional
HAnover 2-0050
$500 million in EC A, adds up to
a total of just under
$2 billion,
the maximum effort which could
have been expected from the
Ap¬
propriations Committee.
It is too early
to the hopes that the House
or
the Senate will make
severe
cut.
There
is
a
NEW
of
Stromberg Carlson
f-ARL MARKS & flO. INK
Hytron Radio & Electron.
Preferred & Common
eeonomy
move
is
enough to "pare down
payrolls, subsidies, and benefits,
Magnavox Pfd. "A"
FOREIGN SECURITIES
record, particularly among Re¬
publicans. It remains to be seen
strong
S
All Issues
talking along this line for the
whether the
YORK
TELEVISION STOCKS;
a more
lot
Hill, Thompson & Co., Inc.
FOREIGN SECURITIES
to be sanguine
as
Teletype—NY 1-971
Firm Trading Markets
SPECIALISTS
50 Broad Street
Trading Department
New York 4, N. Y.
AFFILIATE: CARL MARKS & CO- Inc. CHICAGO
'
120
,
matteir !
that,
come
if
beginning to make
organized labor crowd
of the
some
to mutter that while
the trick certainly was quick, it
may not prove to be so slick.
*
is
What
Big Union boys are
beginning
case
Come with all the facts, includ
ing the most irrelevant facts even
off
Mr. Denham's job.
Board,
his
quious.
Congress, at
or
the other,
House
one
nor,
the
that
assume
stating
The first rule is
-dis^a' witness,
you.
Neither
D.
disposed
seems
from which there is little
appeal, and which can shut
no
Committee
WASHINGTON,
a
put one out
can
whenever the Committee wants to.
m/r\| m
jTjLIl/U
Capital
along, before
business, almost
to do so,
Washington...
from the Nation's
get
Committee which
of
Behind-the-Scene Interpretations
how. to
on
BUSINESS BUZZ
BROADWAY
Tel. REctor 2-2020
@FedFRASER