Full text of Commercial and Financial Chronicle : March 24, 1949, Vol. 169, No. 4788

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ADM.

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1 5

MAR

ESTABLISHED 1S39

Library

j

an

Chronicle
Reg. U. S. Pat. Office

Volume

Price 30 Cents

York, N. Y., Thursday, March 24, 1949

New

Number 4788

169

The Gentle Art of "Disinflation" Pacific

Truman

By EDWIN G. NOURSE*

Congress Fight

v

Appeasement

■

By MELCHIOR PALYI

President, in speech to Mayors,
blames troublemakers for report¬
ed bad

feeling between Congress

and himself.

lobby

Attacks real estate

and

housing

predicts

and other

of
control,

success

rent

program,

proposed

employs "calculated dissimulation" in using word
"disinflation," Presidents leading economic adviser says "getting
over fever of inflation is healthy process, and nothing to get jittery
about."

President

Harry S. Truman, in

address

Mayors'
ton

before

March

on

Annual

the

Conference

Washing¬

in

Says present problem is

the

81st

Congress

and

attacked

the

news

and

pa pers

business

can

forward.

go

been

had

-

in

still relieve China, if given in proper
China and dangers

told

[I

spoke

our

estate

Socialists of Europe.

Peace Offeusive—At a Price

'

V

The

leaders

excitement

like

Parliaments,

the

over

giving

sured

his

about."

au¬

program

for

went

housing,

rent

comment:

control

and

ways

that

The

would be enacted.

al¬

the risk
in using

word such as

a

full text of the address follows:
I feel very much at home before

'disinflation'
Edwin

this Conference of Mayors.

is

"There

other fair deal

to

on

G.

his

Nourse

action

French and Italian

of respect and peaceful intentions
evaporated. Indeed, there was nothing

assurances

toward the United States, soon

which

<$>about

If

cited.

Cachin

As

M.
does

berate

not

We See It

being

as

It

a

usual

Negative Sort of Way

war

im¬

perialists, etc.,

beyond any reasonable doubt that the
81st Congress has no intention of playing a role of Charley
McCarthy to President Trpman. Conditions have changed
a
good deal since last November, for one thing, and for an¬
other the matriculate politician who is the usual member
of the House or of the Senate, knows very well that most
r

now

of the

appears

current

mandate

talk is stuff and

us

the

mongers,

Encouraging in

'

Collins

Mr.

dience that his

Communist

early January speeches of

Marcel Cachin and Togliatti in the

EDITORIAL

jittery

get

as¬

lose

to become ex-

healthy
and
nothing
for
the public to

lobby and

we may

economic and political set-up with the

newsmen,

real

Concludes

permitting its domination by Russia.

re-

moved. It was,

had]/

unabated and Iron Curtain will not be

Points out vast economic importance of

everything by entangling

Edward Collins made some discriminating
comments in the New York "Times" on my use of
the word "disinflation." He indicated that I used this word to describe
"a situation in which the inflationary (upward) pressure on prices

bitterly
against the

measures

Defends governmental 'v policy¬

and not unfriendly

ers." He

Truman

fashion.

price adjustments by retrenchment.

as

on

material support may

and

•

A short time ago Mr.

"trouble mak¬

President

goes

making, along with "corrective private policy" as important constit¬
uents of national prosperity, and warns against fighting downward

commen-

tators

transition to normal competitive

deficit f
and calls for workable price and income relations, under 1

21, denied that he
is in
a
fight
with

a

war

raised, Dr. Palyi criticizes U. S. policy in China. Says Chinese Com¬
munism is Russian dominated, and a minimum of moral, technical

without external stimulus of government orders and

economy

economy,

measures.

Noting cold

Denying he

which
an

Copy

And Atlantic Alliance

Chairman, Council of Economic Advisers,
Executive Office of the President
r

-

a

and
a

of

word

praise
A

for

erican

m

businessmen
who

try

to

build up trade

with

the

What viets,

nonsense.

has

even

we

So¬
Dr.

need

Melchior

Palyi

become
/
*
of these legislators are not and never have not
suspicious of his intentions.
All
been particularly interested in the "Fair Deal."
the hospitality and courtesy that
Probably
we
need is to realize that it is
so many of you showed me on my
a
majority of them have never had any abiding faith in the
recent tours around the country. in dissimilation, which it was, but
parcel of Communist
sort of philosophy that has for years been preached by the part and
I greatly enjoyed visiting your as a return to the technique of
New Dealists and now, in still more extreme form, by the policy, as has been asserted and
dissimulation
of
the
cities and talking to your citizens. calculated
reasserted by Lenin and Stalin
I hope that someday I shall be Thirties." Now this is playing with President's entourage of crackpots.
On top of all this the
themselves—the putting on and
able to visit you again and to go big words which may be all very President has taken
pains, or so it appears, to irritate and to
well for a financial writer in the
to some of the cities that I missed
taking off of any diplomatic mask
New York "Times," but which I antagonize elements upon whom he has to depend if he is
last fall.
(Continued on page 26)
would not dare to indulge in as a to succeed in persuading Congress to do what he wants it
Another reason for feeling at

One

reason

is that I remember

(Continued

on page

might be con¬
strued—to lean momentarily on
his own prefix—not as an essay

(Continued

32)

30)

on page

is more, many

to do.

How
*An address by Dr. Nourse at a

luncheon

We offer:

meeting

of

more

the Execu¬

encouraging this situation would be if
(Continued

tives' Club, Chicago, 111., March 18,

1,000 Shares

we

had

and better evidence that really constructive and
on page

32)

State and

*

1949.

Empire District
Funds,

5% Cumulative
Preferred

Bonds

inc.

Stock

A Mutual Fund
101

Price

■

y2
COMMON STOCK FUND

yield 4.93%

to

Municipal

Franklsn Custodian

Electric Company

PREFERRED STOCK FUND

Bond Department

BOND FUND

White,Weld&Co.
Members New York Stock Exchange

(BALANCED) FUND

Prospectus

40

THE NATIONAL CITY BANK

UTILITIES FUND

INCOME

on

HART SMITH & CO.
15

OF NEW YORK

request

Philadelphia Providence
Amsterdam
Buenos Aires

Chicago

London

STREET

Bell

Wail Street, New York 5

Boaton

BROAD

Teletype NY

Private

FRANKLIN
64 Wall

DISTRIBUTORS, Inc.

Bond

Wires

1-395

OF

Dept. Teletype: NY 1-708

New York

Montreal

LAMBORN & CO., Inc.
99

the

Government

STREET

Public Service

Underwriters and

NEW YORK 5,

New

BONDS & STOCKS

N. Y.

Hampshire

COMMON

Office:

26, Bishopsgate,
London, E. C.

Head

In India,

Colony,

and

Paid-Up
Reserve

Zanzibar

Capital-.

Capital
Fund

Distributors of

Ceylon, Kenya
Kenya, and Aden

£4,000,000

Corporate Securities

OTIS & CO.

£2,000,000
£2,500,000

Bank

conducts every description
banking and exchange business

Trusteeships and Executorships
also undertaken




Municipal

Prospectus

available

upon

request

and

Burma,

Kericho,

Subscribed

The

WALL

CANADIAN

in

Kenya Colony and Uganda

Branches

CITY OF NEW YORK

THE

Toronto

Street, New York 5

of INDIA. LIMITED
to

NATIONAL BANK

Connect

NATIONAL BANK
Bankers

THE CHASE

HAnover 2-0980

Established

SUGAR
Raw—Refined—Liquid

Dominion Securities
Grporation

Exports—Imports—Futures

1899

40

CLEVELAND
New York

Cincinnati

Chicago

Columbus

Denver

Toledo

Buffalo

DIgby 4-2727

Exchange Place, New York 5, N. Y.

and other Principal

111

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

4-6000

Boston

Telephone: Enterprise 1820
Private

Bell System

Teletype NY 1-702-3

Exchange
Exchanges

Members New York Stock

WOrth

(Incorporated)

of

IRA HAUPT & CO.

Hendricks

&

Wire to:

Eastwood, Inc., Phila.

2

(1282)

THE

COMMERCIAL

&

FINANCIAL

CHRONICLE

Thursday, March 24, 11.149

The EC A and American World Trade Interests

Central Public

r'K'fo

tr

Utility

By WILLIAM S. SWINGLE*
Executive

Amerex

Holding

is to dispose of
Says EGA should not
hamper traditional flow of our exports and sees no validity in extending export controls, the enforce¬
ment of which might throttle American
exports. Upholds reduction in trade barriers and outlines factors
which can favorably affect American participation in international commercial relations.

BOUGHT

—

burdensome American surpluses

request

on

SOLD

—

QUOTED

New York Hanseatic

Corporation
120 Broadway, New York 5
BArclay 7-5660

Teletype NY 1-583

Rights

present

future, of

the

Economic

Corp.

of

ting into
ation

Members

York

Stock

York

Curb

Exchange

Tel.

NEW

YORK

put¬
oper¬

what

is

the

as

or

we

is

William

S.

Swingle

approaching
the

end

of

proposal

United

States.

Without

going into the details of
the developments of the program
the

and

analysis of requirements

;

its first year of oper¬

ation and Congress is presently
considering authorization and sub¬

in which

by

the

Members New

25 Broad

York Stock

carry

could do

HAnovar 2-0700

as

to

the

the dollar area to

and

as

to

the

covery

bring about

plan

by

Congress

dispose

to

American

of

surpluses,

burdensome

to

set

up

made

up

disposal.

for

a

>.

|

Mobile, Ala.
to

our

CORAL
TAX

branch

offices

£

GABLES

PARTICIPATION

re¬

by

NOTES

placing

sustenance

Memo

Request

on

Therefore,

and

for

recovery,

for

means

$

f

and then have the deficit

their

made

«ilf

NewOrleans, La.-Birmingham, Ai,

through self-help outside

both

it out.

Exchange

St., New York 4, N. Y

European

determine what they can supply
maintaining' our high
one
to another and obtain from
production, or to provide
non-dollar areas,
MINING STOCKS
and then look
sequent appropriations to cover a
subsidy to American exporters
the period to June 30, 1950.
The of all types and kinds of goods. to ECA for approval and provision
OIL STOCKS
of dollar aid translated into goods
requests made by the Administra¬
As a matter of fact, most goods
and services.
tion, based on the estimates of re¬
Low Priced Industrials
required under ECA are in de¬
quirements of the participating mand here and
throughout the
No Dollars for Luxury Goods
countries, have been $1,150,000,000
INACTIVE STOCKS
world, and the implementation of
to carry the program- forward un¬
There is no indication in this
the plan is requiring, and will con¬
til June of this year and an addi¬
Stocks Removed from the
concept that dollars would be pro¬
tinue to require, sacrifices on the
vided for non-essential items or
tional $4,280,000,000 for the suc¬
New York Exchanges
part of American business due to
for luxury goods. Shipments paid
ceeding fiscal year.
This latter the
impact on our domestic and
figure does not include China or
for, either from ECA funds or the
overseas, operations..
STEIN & COMPANY
self-created
dollar resources
of
Korea, and compares with $5,055,Members Nat'l Ass'n of Securities Dealers, 'nc.
One
of
the
misconceptions, European nations, must be care¬
000,000 for the first 12 months.
27 William St., N. Y. C. 5, N. Y.
which still remains in spite of re¬
fully checked and restricted to
1 Montgomery St., Jersey City 2, N. J.
We have had an opportunity to
peated clarification, is that ECA only essential items.
Tel. DIgby 4-2190
Develop¬
Tele.: NY 1-1055
note the developments which have
is a new lend-lease procurement ments to build
up intra-European
been brought about through ECA
program
wherein a government trade provide as far as possible
operations to this point and the
organization enters the American for the rebuilding of the economies
recovery which has taken place in
market, buys up supplies, and of these countries with the mini¬
Europe. According to Administra¬
North American Refractories
ships them abroad; all this without mum expenditure of dollars and
tor Hoffman's statements, the pro¬
Common Stock
reference to the ultimate foreign drain on our
economy. Under such
gram to date has brought about
buyer who must pay in local cur¬ a program there is a limited area
reassuring results in the partici¬
HialeaK Race Course
rency into counterpart fund de¬ for free choice of imported com¬
pating countries.
For example,
posits abroad. The real function modities and services from the
factory and mine ouput is about
of ECA, as proposed and approved, dollar area.
American Turf Association
at prewar levels; electric power
is to provide a financing medium
Of serious concern at the pres¬
consumption is 65% above pre¬
for purchases conceived and made
ent time are the restrictions being
war;
freight
traffic
one
third
by buyers in various recipient
above prewar; and gross capital
placed on many American exports
countries.
The relation which it
to Europe.
investment by the recipients is
If the European Re¬
m BANKERS BOND a
has, and will Continue to have, to covery Program is analyzed on
six times the ECA dollar contri¬
our export trade is therefore dif¬
Incorporated
a strictly academic basis, it would
butions.
On the other hand, un¬
ferent from wartime operations,
1st Floor, Kentucky Home Life Bldg.
certainties still overhang the at¬
require as few American exports
LOUISVILLE 2, KENTUCKY
with which w_e are familiar, where;
as possible.
This need not go as
tainment of the long range objec¬
Long Distance 238-9
Bell Tele. LS 186
goods were selected and procured far
as indicated in a recent state¬
tives as indicated in the combined
by. American Government agen¬ ment in "The Economist" that
overall estimates of the partici¬
cies.
iiiHimiiiiiiiiiiiiiiimiiiiiiiiimiiiiir
"American export industry may
pating countries for 1952.
If we recall the original state¬ have to reconcile itself to the
per¬
I shall not attempt to go into all
ment
of
Secretary Marshall .in manent loss of its European mar¬
Trading Markets
of the broad policy and procedure
1947, we realize that it was fun¬ kets; it may have to permit dis¬
of ECA, either current or for the
American Furniture Co.
damentally a question of financ¬ crimination
against
itself."
A
long range. There are some 33 ing dollar deficits and providing
practical approach must always be
Moore-Handley Hdwe. Co.
or
34
specific
responsibilities goods required from our produc¬ kept in mind, not only for the
These deficits represented
which ECA must undertake under tion.
present but also for the future
Dan River Mills
the differential between the selfplace pf American goods in Eu¬
present legislation, and I believe
help brought about by and among ropean markets, particularly when
we could well limit our consider¬
the participating countries and the American business, through taxa¬
ation largely to the effects which total requirements for rebuilding
tion, is helping to provide the
ECA has on our export business. their economies damaged by war funds. On the other hand, without
and the dislocations resulting from ECA
assistance, the imports into
The dollars supplied by ECA to
the war. Western Europe required
Europe,
particularly from
the
Lynchburg, Va.
foreign governments either in the goods and services, which it did
United
States,
would
certainly
Tele. LY 83
LD 33
form of loans or grants are trans- not
have
or
could not quickly

TRADING MARKETS IN

Steiner, Rouse h

which have been made since 1947

dollars at
- it j is
logical that the recipient nations
Contrary to claims made in some
initiate the plans for recovery, de¬
quarters, the program was not a
cide what goods they need both
authorizations

to

The
now

engaged

are

original

European

ECA

the

concept of the program

Marshall Plan

Program.
5

2-7815

REctor

Bought—Sold—Quoted

Direct wires

Recovery

Exchange

New

Louisiana Securitie•8

purpose

program.

nations as to
what they would need to rebuild
up misunderstandings as to just
what ECA was supposed to
do their economies, the basic idea
and how its objectives were to be back of the Marshall Plan was to
the
participating
nations
accomplished. It might be well, have
therefore, to realize clearly the themselves determine what they

the

is

known

New

from

Misunderstandings Regarding
ECA Policies

.

frfC PONNELL & fp.

lend-lease procurement

Unfortunately, there have grown

effective
means

Bought—Sold—Quoted

BROADWAY,

I

ECA,

or

which

120

modities

Cooperation

tion,

Common Stock

new

lated largely into exports of com¬

Administra¬

New York State

a

procedure,
and

General Public Utilities Corp.

is

or

World trade, and American
participation in this trade, are presently affected by many
important developments both here and abroad. I shall refer to certain factors which have
particular significance to American export business.. An influential factor is the policy and
both

Electric & Gas

Alabama &

Vice-President, National Foreign Trade Council, Inc.

Deploring misunderstandings regarding policies of ECA, Mr. S wingle denies its

Corporation
Analyses

' :v,

level of

.

BUCKLEY
Members

BROTHERS

York Stock

New

Exchange

■

'

and Other Principal Exchanges

1420 Walnut St.

Philadelphia 2

120
-

«

Broadway
New York 3

•

PEnnypacker 5-5976
Private

Philadelphia,

BArclay 7-7333

Wire System

New

York

between

and

Allele*

Los

American La France

Bausch and Lomb

Dayton Malleable Iron
Haskelite

Manufacturing

Hydraulic Press Manufacturing
Stromberg-Carlson Co.
*

H. M.

H

Byllesby & Company

PHILADELPHIA

OFFICE

Stock Exchange Bldg., Phila,
Telephone

Telet>>L

RIttenhouse 6-3717

PH 73

NORTHWEST MINING

SECURITIES
For
or

of

Immediate

Execution

of

Quotes call TWX Sp-43

Exchange

A.M.,

Pac.

from
Std.

Orders

to

Time:

Fit

on

10:45

or

lis30

Sp-82

at

other hours.

STANDARD SECUItlTII^
CORPORATION

.

:

Members Standard Stock Exchange
of Spokane

Brokers

-

Dealers

-

Underwriters

Peyton Building, Spokane
Branches at

Kellogg,

Idaho

and Yakima,

Wrv

SECURITIES FROM

——

Scott, Horner &
Mason, Inc.

have

llllllllllllllimilllllllllllllllllllllllllL

be furnished

largely

been

Established

resources

Hemisphere, and paid for in dol¬

cultural

Conference, Chicago, 111., Feb. 28.

1856

to

from the

lars which these nations could not

stricted

1949.

I

produce,
*An address by Mr. Swingle be¬
fore
the
Chicago World Trade

provide through their

now

of the Western

own

efforts.

factured

could

H. Hentz & Co.
We

members

Stock

York

New
New

Curb

Chicago

CANADIAN

Exchange

Exchange

Commodity

Markets

of

For:

CANADIAN

CHICAGO

DETROIT

PITTSBURGH

GENEVA, SWITZERLAND




because

Many

agri¬

of

re¬

OILS

Goodbody & Co.
BROADWAY

Telephone BArclay 7-0100

40 EXCHANGE PLACE,
WHitehall

N.Y. 4, N.Y.

4-5654

shut out of the European market.
Those
who are affected gen¬

Over-the-Countei

Quotation Service

without

imports

115

Palestine

Securities Co.

ECA funds,

the recipient
a posi¬

iff

for 36 Years

tion to buy with dollars or permit

BRITISH SECURITIES

Members N. Y. Stock

American

exporters

countries would not be in

Exchange Bldg.
4, N. Y.

rather than

products
dollars.

cuts

manu¬

Invited

shipping at reduced levels
easily have been completely

though

YORK

in

business because they realize that,

Trade

And other Exchanges

NEW

goods

Severe

made

Inquiries

duction in much of their European

CANADIAN MINING

New Orleans Cotton Exchange

N. Y. Cotton

been

HOUSIRuJjj

DEVELOPMENT COMPANIES

erally appreciate the necessity for,
and are willing to accept, the re¬

/

INDUSTRIALS

Inc.

Exchange,

Board

American

Exchange

Cotton

York
York

New

Maintain

lower.

would have

INDUSTRIALS, BANKS, LAND &

Exchange and Other Principal Exchanges
NEW YORK 6, N. Y.
Teletype NY 1-672

of

many

they might

items

like

to

even

have

them. However, these same Amer¬
ican

National Quotation Bureai
Incorporated

businessmen, while they are

willing

to

temporary

accept

austerity

on

a

basis, do not want to

(Continued

on page

35)

Established

1913

I

46 Front Street
CHICAGO

New York
SAN

4, R Y„

FRANCISCO

Volume 169

Number 4788

THE

COMMERCIAL

INDEX

Stock market technician holds
every
has been followed by two
major

Cover

"Disinflation"—EdwinG.Nourse

Market and Business Panic
Ahead!—GaylordWood

3

Elements of Successful
Salesmanship—J. J. Hensle and II. J. McCrossin

4

Meeting Changed Pattern

to

Taxing Ourselves

Into

faces its
A

;*

depression.

study of past

Cover

National Bank Assets Exceed $88
Billion, Reports Preston Delano...

10

Foreign Investments

on

sion

Security.,,

on

17

Los Angeles Bond Club Hears
Address by George E.
Sokolsky..,....
L. E. Osborne
Says Fear of Higher Taxes Impedes
Expansion.
;.
Hail! (Boxed)

Baruch Warns Against
Over-Regulation

22

NAM Estimates $2 Billion
Investment Abroad After 1952

22

A one-year

.'

23

....

Savings Bank Deposits

Export-Import Bank

Wane

on

OKs Credit

25

31

Insurance Investments Higher in 1948.

47

(Editorial)

Cover
16

—the second

Business Man's Bookshelf
39

15

Dealer-Broker—Investment Recommendations

British

8

7

instead

9

40

Mutual Funds

*,

Prominent Personalities in Mutual
Fund
—Edward C. Johnson, 2nd.

14

Business
14

NSTA Notes
12

10

Observations—A. Wilfred May.

47

Governments.

on

..V.

25

Prospective Security Offerings..........

being

destroyed,

consumed

(2)

are

lead

to

me

will

one

World

But

years.

index

in

the

less

1926

visualize

ran

The

24.

importance

tivity

Tomorrow's Markets

Washington and Y

(Walter Whyte
Says)....-

of

building

ac¬

COMMERCIAL

Reg. U.

S.

t

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

and

1949

CHRONICLE
Patent

as

ary

25

Park

in 1948

Census

in

2-9570

Eng-

ment to

Construction

that

the average

of

(di¬

9576

on

year's full employ¬

man

for

'

/

;

under

the

Dangers

rose

to

169.2,

These

WILLIAM D. RIGOS,
•%>.*.

Thursday, March 24,

records,

Chicago

(general

and
issue

corporation

and

Other

news

every
—

Act. Qi

We

and

ad-.

3,

111.

$25.00

(com¬

quotation

(Telephone:

and
per

$25.00

per

new

rose

loans.

Salle

State




per

$38.00
per

St.,

0613);

Quotation

year.

be

is

which- I

the

sequence

predict

will

lapse will

roughly each

year:

per

recorded.

cause

(Continued

This

Exchange

col¬

Royal Bank of Scotland
Incorporated by Royal Charter 1727

the banks to call
page 24)

on

HEAD

OFFICE—-Edinburgh

LONDON

PREFERRED STOCKS

of
in

OFFICES:

Bishopsgate, E. C. 2

8 West

Smithfield, E. C. 1

Charing Cross, S. W. 1

Burlington Gardens, W. 1
64 New Bond

year

Street, W.

year.

Spencer Trask & Co.

Record—Monthly.
—

York

Louis Stock

All

49

(Foreign postage extra.)
Earnings Record
Monthly,
year.
(Foreign postage extra.)

New

Members St.

com¬

High Grade Public Utility and Industrial
S.

,

Members New

25

Broad

York

Stock

funds.

Exchange

Street, New York 4

HAnover

Members

50

Albany

-

Chicago

-

Glens

York

Curb

Exchange

Hubbard 2-8200

.

Teletype—NY

.

New

Congress Street, Boston 8

2-4300

of

in

St.LouisI.Mo*

of events

occur:

modity price level plunges down
in one of the most overwhelming
ever

street

high.

be well until the high

breaks

olive:

loans

March

account of the
fluctuations in
exchange, remittances for forsuhRcrinHons and
advertisements must

made

509

re¬

above $45,000,000,000,

record

Here

Bank

interested in offerings of

are

Note—On
the rate

Lp

$35.00

Countries, $42.00

Monthly

bank clearings,

S.

Union

Canada,

Co.1

INVESTMENT SECURITIES

3

Other Publications

Monday

market

news,

135

of

1949

city news, etc.).
Offices:

Pan-American
Dominion
Other

&

-

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

Bank

Every Thursday
Tertising issue)
plete statistical
state

Business Manager.

Stix

a

year

inventories

.

HERBERT D. SEIBERT, Editor &
Publisher
WILLIAM DANA SEIBERT,
President

bonds

to

Branches throughout Scotland

...

to

one

the

savings

business

high since the

mercial-bank

1929

made

was

s.

Record level of factory in¬

ventories.

building will

second-class matter Febru¬
at the post office at
New

8, 1879.

Place, New York 8, N. Y.

REctor

25, 1942,
York.
N.
Y.,

C.,

in

by William B. Dana

Company
Reentered

Office

WILLIAM B. DANA
COMPANY, Publishers

6.

u.

ahead.

record

(2)

statement

a

buy

1782.

38

rectly) give

Copyright

FINANCIAL

*■■■

the

ou

Published Twice Weekly

The

,t....

\

"

will

5

chaos

easy

of Labor Statistics index for

new

The

Industry

the

lies

becomes

commodities

48

The State of Trade and

in

it

(1) Historically high commodity
In August, 1948, the Bu¬

a

44

Falls

5

Revolu¬

prices.

prosperity of the
1923-29 business boom (or in any
boom) cannot be underestimated.

*

Exchange Place, New York
Telephone WHitehall 4-2250

cently rose to $31,796,000,000.
(3) Record high level of com¬

Importance of Building Activity

Securities Salesman's Corner
Securities Now in Registration

40

a price drop of
terms of the
inventories
($54

Three Basic

peak—sus¬

activity

Young & Gersten

The basic danger in the present
business picture is threefold:

two

through 1928.

building

Bought—Sold—Quoted

foui

woula

into

and

that

counterbalancing

the

schedule

American

billion),

all

to

5%s

DUMONT LAB. "A"

Translate

severity

reau

1921

the

record

element

from

The

current

I.

was
the steady rise in
estate, and particularly in
building
activity.
Construction
contracts rose steadily in number

CEN. PUB. UTIL.

panic

than

more

(BLS index) will
dropped from the postwar
by 40% to 50% by the end

that

dropped

than

business

severe

never

opinion the depression has

of 1950.

War I, there set in a drastic de¬
cline
in
wholesale
commodity
prices. From mid-1920, the BLS

price

\

SOUTHERN PRODUCTION

1890,

modity prices
have
peak

very

45%

/

vertical ascent—followed in
every
by a drastic collapse in whole¬
sale prices.
I predict that com¬

important un¬
derlying difference in the two
postwar periods.
Following World

commodity

1871,

DIgby 4-2370

case

the

War

1853,

Y. 6

Teletype NY 1-1942

the War of 1812, the Civil
War, and World War I: A sharp,

most

following

is

Broadway, N.

tion,

severe, the
second depression the less
severe.
This is just the reverse of
the

There

SIEGEL & CO.
39

In each and every

during

depres¬

be the

a

after

and

conclusion that this
time, follow¬
War II, the first

ing World

22
41

1836,

Wholesale commodity prices fol¬
lowed the same pattern

First Depression The More Severe

findings

YORK

Maxson Foods

^already started.

the

depres¬

tained

Railroad Securities

in

is my

The

sions.

My

NEW

Petroleum Ht. & Pr.

build¬

therefore call for a severe busi¬
ness panic not later than 1950.
It

in

Wars

STREET,

Phillip Carey Mfg.

building peak
activity oc¬

building

later.

years

—

45

Public Utility Securities

in

curred

real

5

Reporter's Report........
Reporter

Peaks

wartime inflation, fol¬
lowed by postwar deflation.
There
be no doubt that World
War
II will be followed
by two

around

News About Banks and Bankers

Our

of

channels.

of¬

Southern Production

business panic within two tc

a

four years after the

depression appeared
Armistice.

usually financed by inflation.
pattern has invariably been

oattern

Slump Imminent?"....

Indications of Business
Activity

Our

by

I

years later

are

our

ACTIVE MARKETS

Logically

tendency for the peaks in
building activity to be followed

11, 1918. The first

(1) Goods

WALL

to

notable

years after

War

to

Telephone: WHitehall 4-6551

cur¬

appears

194-3.

99

commodity

instance,
followed,

ent ways.

cash.

and

s,

Wars drive industrial
produc¬
tion out of balance in two
differ¬

sion

From Washington Ahead of the
News—Carlisle Rargeron
a

April 9,

n e

1906 and 1925.

20

in the Investment Field..;

in

This time there will

11 years after the

Canadian Securities

Einzig—"Is

11

declared.

World

He

quietly pockets the
Truly, silence is golden!

oc¬

price desteadily lessening
building activity.
Turning to the matter of major
business depressions, there is a

can

Bank and Insurance Stocks

Coming Events

Nov.

on

the

him.

and

activity should lessen,
should reach its worst depres¬

violent

1 i

c

depression fol¬
the second

ended.

war

ceased

same

Regular Features
As We See It

be

immediately;

normal

Mexico

to

started

on

depression started nine
the

in building

occurred

ing activity.

signed;

was

ended

depression started two

John K. West Says Television
Will Account for Sales of
$1 Billion
in 1949

on

1865.

peace

War

•

22

Yield

Civil

lowed

20
21

after

years

The

20

Study Trading Hours...

second, depression

his

cui;se

to

sup¬

treaty

was

the

figure would
In

porting factor of continued

the

peace

16

fice

level in about the
year 1953.
the postwar era this
time lacks the all-important

yea r's

after
Gay lord Wood

who sold them

Therefore

started

four

about

grouse

obsoletes. He doesn't
guy

sion

depres-

QUIET ONE"

doesn't

building

two-

11

Laurence F. Whittemore Sees Railroads
Hampered in Meeting
Competition
Hoi gar J. Johnson Sees
Too Much
Emphasis

the

and

year

15

•

building activity. The

peak

have

War of 1812, a
severe

Selling Success, Says Hugh Bullock

rent

Fol-

lowing

in

curs

de¬

pression.

today.-)

A rather regular rise
and fall

secondary

postwar

Take Lead in Movement Toward

Hard Work the
Key to

de¬

and

the

.

❖

Elisha Friedman Scores
Spain's Attack

primary

pression,

spent.^-(The

brief, fol¬
lowing World War I, the deflation
of
commodity prices was counter¬
balanced by the building boom.

,as

postwar

6

to

be. higher

the

13

Abolishing NASD..

NYSE

$5)800

re¬

"THE
He

......

by two3>——1—

to

COMPANY

.

usually

13

16

:

.

depressions,

12

a

*

different angles, I
At the present
time, America

;

AND

just brings them in
of

shows that every war has
always been fol¬

wars

ferred

❖

and will at least
approach

number

a

.

lowed

Truman Denies Fight With
Congress
to

worst

9

Foreign Trade—Max Winkler....

from

forced to the following conclusion:

am

7 '

.>

Depression—Walter Having
Economic Outlook and the Automobile
Industry—J.R.Davis
Dangers in Farm Support Program—Sen.
George D. Aiken

Urges NSTA

drop below 1942 levels,

Approaching the problem

I,

Policy—MtS.Szymczak...

B. S.

now

6

Government—James A. Fulton
on

are

Predicts

stock prices will

8

United States
Economy Depends

we

1932 lows;

Industry—Paul Raibourn

Judge Them—Phillips Barbour..

of

Declares

faced with 50% collapse in
commodity prices, which in light of
record-high inventories will entail general business
bankruptcy and
chaos, the most drastic in economic: history of the U. S.

2

Revenue Bonds and How

(1283)

since American Revolution

war

depressions.

Cover

The ECA and American World
Trade Interests—William S.
Swingle..

and Motion Picture

CHRONICLE

By GAYLORD WOOD

Page

Pacific Appeasement and Atlantic
Alliance—Melchior Palyi
The Gentle Art of

Television

FINANCIAL

Market and Business Panic Ahead!

Articles and News

The Federal Reserve's Postwar
Monetary

&

1-5
-

-

Ty •

ASSETS

£155,175,898
Associated Banks:

,

Glyn Mills & Co.

~

Schenectady

TOTAL

Worcester

Williams

Deacon's

Bank, Ltd.

3

4

THE

(1284)

COMMERCIAL

FINANCIAL

&

CHRONICLE

Thursday, March 24, 1949

,

Elements of
By J. J. IIENSLE*

around those four words, you will

Manager, Fuller Brush Company

New England

-

be

right.

Progressively

curing

your wares;

be

can

Well,
tion.

these

on

those

draw¬

are

to" start
where' the "mice left off;

co!me figures
t

h;a t. 'y o u

would

need

'

a

customers

this

as

I

to

one

write them

other

read

fother

n

as

busi¬
J.

J.

Hensle

I suggest
into
the selling end of the business.
Of course, that is where the real
money is, and that is where the
ness,

that he go

you

enough about this important

real

facts, and whether f you like
we are through makes
very
little
difference,
but
I
am
going
to
hit
everybody,
opportunity is.
and
I
possibly might hit you
Now;, you have had quite a lot pretty hard. You know, you have
of classes here; I understand, six
to be
really shaken apart and
or eight classes.
Salesmanship has waked up to the fact that sales¬
been fully explained. I might say manship is a science; it is a real
some things tonight that you have
profession, it is something you
heard, and thai; is bound to hap¬ have got to study, learn, practice,
pen. -And
I think after I get apply, not have it handed to you,
through, Mr. McCrossin will say and you don't get it out of a
some things
that I will say, be¬ book, either.
I told men years
after

cause

all.

in this matter of

salesmanship, why, you can't beat
around the bush very much; it is
just one thing, and that is going
to be explained, if I can do it
in the length of time that I have.
,

Now,

this

manship
of

the

and

talking about sales¬
selling reminds me

minister

that

got

up

on

Sunday morning, and this minister
of that

parish had been sick and

These two lectures, by Messrs.
Hensle and McCrossin, are the
sixth

in

series

a

Investment

in

a

course

Salesmanship,

on

spon¬

sored

after

and

when

ago,

years

right

a man

that

from.

I don't

I

now

down¬

some

bought

stocks

buy them from him

He

is

He

has

and he is

and he is

not

losing that

made

we

were

and

10th

in the March 3rd

issues

respectively of
the
"Chronicle."
The
third,
fourth and fifth
lectures, made by
Mr. J. Donovan Emery, are
being
combined into one article by Mr.
Emery and will appear in an early
issue of the

"Chronicle."

sale

in

salesmanship, I

talk

to

about

additional lectures in the
on

se¬

Investment Salesman¬

ship, sponsored by the Boston
Investment Club

the

am

man

in

uct.

am going to talk
ship, which is the prod¬

You

have had

a

number

and Boston

University,
which

transcripts;

of

being published in

are

the CHRONICLE. (The initial

lectures appeared
March

10, respectively.)

Boston
vises

4,

page

on

issues of March 3 and

our

of

Investment

that

The
ad¬

Club

preliminary

in¬

interest

in

Douglas H. Bellemore, Chair¬
man, Economics and Finance

of what salesmanship Department, Boston Univers¬
Well, no matter what ity, Boston, Massachusetts.—
you had, I am going to give you Editor.
my version, and it will be a very

short

one.

But

from what I

un¬

derstand—and I have profited by
it
salesmanship to me is just

tact

four

words,

write

In

them

down, and if

build

clutches,

your

business,

—

or

and

you

you

whether
what

it

can

can

it

is

might

in¬

be,

he

is

you

are

there

forever;

t

Hit y

He

going

to let you get
realizes the value of

keep

on

calling

on

you

them for¬

Now, another man says that
salesmanship is the power or abil¬
ity to influence people to buy at
a

mutual

profit

that

which

you

havp to sell, but which they

may

not

Municipal

you

have

mind.

A

very

fellow

selling

you

personable young
securities for one
houses in

of the oldest brokerage

this country came
"cold"

into

office

my

buying
I thanked him and told

interest

to

me

in

various

parts

and

the

of

Cincinnati, Buf¬

as

falo and New York City. The point
I want to bring out is
that, as I

recall, I worked with these

men

.very diligently with the hope of
resultant benefits.
However, not
one

these

of

succeeded

men

period of time.

a

was

to

some

years

This, of
and it

ago

at that time it

me

over

course,
seems

popular

was

and possible for a smart boy grad¬

uating from
Boston

fine college such

a

University, Harvard

as

or any

other high grade school to go into

type of business, selling se¬
soon becoming "custom¬

curities,
ers"

job

in

and

men

only

was

many

the

cases

sinecure.

They,
were paid a nominal
weekly sal¬
ary which did not encourage in¬
centive, but it seemed to be a sat¬
isfactory goal to them at that time.
In the

majority of cases, these jobs
secured
through influence

were

and

a

family

connections

of

and,

could

not be lasting, and
had given did very little to encourage or
me a good lead.
The fact that a stimulate creative selling or the
young man selling securities would desire to go out on their own and
call
on
a
total
stranger "cold build a personal business. It gives
turkey" gave me something to me pleasure to be able to say that
think
about
and
something
I different conditions exist today. I
thought I might talk about to you. am very fortunate to have in my
I honestly know nothing about employ at this time many young
course,

him that I thought he

securities

how to sell them, but

or

with

men

similar

educational

because of this young

connection, recently I
"Wall Street
Journal" and while it has to do
In

•

their

attention

to

it.

are in when we get into this
direct selling business, and selling
in .your business or my business
we

A.C.ALLYN«® COMPANY
Incorporated

PHILADELPHIA

MILWAUKEE
WATERLOO

is all the same, and I am

try
out.

CHICAGO

selling insurance, it can well
us all here tonight.
A
large group of insurance men de¬
cided upon an unusual experiment
with

apply to

and the entire group
went

FLINT

deliberately

night to sell insur¬
the "cold turkey" ap¬
at

out

ance

on

proach. This meant calling upon
working people who were on a

people who worked in
restaurants and diners,
also gasoline station owners and
attendants and other night work¬
well

as

as

all-night

vance

over

the period I spoke of

previously.
Continuing
I

would

like

I had with
was

■

with
to

cite

a

thought,

discussion

personal friend who

a

presented

problem.

this

with

slmiliar

a

leading

He is, by the way, the
executive of one of the

largest

insurance

Boston.

gether

We

companies

lunching

were

some years ago

in
to¬

and in dis¬

cussing the problem of hiring, de¬
veloping
and
holding
a
good
salesman, he told me that he had
employed a young man from a
very
prominent Boston family.
This young man

astically

I

started

going to
that and bring it

and, prove
' l

's

.^Another-man

manship is the

says,

that sales¬
ability—

power or

(Continued

on page

28)

salesman

a

24

years

quoting the

golden

rule

much, the

was

well

as

a

meant

famed schol-

as

this

their families and personal friends
I claimed that there

and was little to gain even from the
book or prestige of having someone of

ago,

copy

of salesmanship

success

of

training

"good

my

busi¬

this nature

short

in

the business

for

a

time, selling their Aunt Ma¬

hard

and

business

hope

the
you.

following will be
I have mentioned

on

your

committee.

Dean

of

the

School

Administration

of

of
one

Business
of

our

universities asked me
interview the graduating class.

prominent

I

satisfactorily

basis.

I

would

impractical in

my

The "Cold" Approach

As

recent

as

asked how many

salesman

tonight,
times

approached

a
me

I was
security
"cold"

without my being a previous cus¬
tomer of his—and I was obliged

to answer that this happened only
with this request on
twice in my life.
The first man
occasions, following,
had classes of six, seven*
(Continued on page 34)

complied

two different

which

this

business.

It was

in 1930 and 1931 that the Assistant

on

consider it very

this matter to the estimable gen¬
tlemen

be

cannot

conducted

helpful to

I

to

with —what then.

work."
I

addition

aside from being established bel or their Cousin Bill and then
quality product, of necessity, dropping out. A successful selling

ness,
on

as

company

my

without

too

In

As I

ers.

to
MINNEAPOLIS

this

read an article in the

thought of buying until

called

Now, that is the kind of business




me

the

Railroad

CITY

an

to

this blackboard—and you have

dan

Industrial

KANSAS

people
incident that hap¬
recently came to
to

from

local

some

—

country, such

your

ycI did my ut¬
of something that

helpful

and

pened

well out¬

lined.

others

men

athletically.
specific case,
recall, the pleasant re¬ he had others in mind
with similar
securing progressively profitable sult of that unusual night's work
patronage. So you sell this man, was the successful writing up of backgrounds that he anticipated
hiring. At this point I disagreed
and you sell this one and this
$350,000 worth of insurance by the and
pointed out the lack of sin¬
one, and you sell them success¬
group collectively.
cerity in these men and the fact
fully, and they are satisfied—
that when
they had exhausted
which I am going to bring out
Good Training and Hard Work
away.

not

ever.

BOSTON

be

so

of factories at 11 and 12 midnight,

right through to the finish.

other words, if you get in his

those customers forever and

SECURITIES

OMAHA

di¬

is

night shift and were coming out

on

YORK

think

to

securities.

is.

INVESTMENT

NEW

y

here,

give two

we

sell¬
ours,

Hensle

very

McCrossin

.

would

and, accord¬
going ingly, requests that inquiries
sales- in that regard be sent to Dr.

manhip, and I
about the

vestments

Public U

J.

;

most

page

of

rect selling, as

Do You Want Articles

this

your

-which

Hilary

Now, this matter of salesman¬ imum
potential
ship is all in the name. So to¬
such a brochure
night I am going to talk about the

really

series appeared

ing

con-

Under One Cover?

a

and

form

going to make it again,

definitions

8, 1949. The
first and second lectures in this

-tween

once

going to follow that

is

resem-

vb lane e-b e»

con¬

sale

a

perhaps

there
close

Mr.

iri

the

believe

to

that

but there is never a
Christmas goes by that I '? don't
get a Christmas card from that

ries

gentle¬
of

—

eight

or

man's, com¬ backgrounds, but who seem more
ing upon me cold, I got the idea mature, some married with the re¬
that maybe it would help if I were sponsibilities of families, and in
to mention to you in your business all cases, what appears to be a
much firmer purpose and a will¬
about selling, more than you real¬
dustry are interested in ob¬ something that constituted a
"fresh" approach;
ize.
Certainly, to ingness to work for success. The
taining all of the lectures un¬
fact of your being here tonight to
my mind, walking-in "cold" to sell
der one cover.
The Club is
The Sale in "Salesmanship"
somebody something in securities discuss and learn about selling is
anxious to determine the max¬ was a "fresh" approach.
indicative of the change and ad¬

ton,

March

me

year,

On

of

committee led

I have
town

building this Fuller Brush busi¬
quiries indicate that many
ness, that the way to learn how
individuals arid Asso¬
to sell was to go out and sell, and firms,
the customers will teach you a lot ciations in the investment in¬

by Boston University and
the Boston Investment
Club, Bos¬

Mass.,

these
men

means.

every

the<$>-

and

remarks

you

I am not
going to try to be an orator or
anything like that; I am not go¬
ing to try to make a speech, but
I am going to get doyyn vtp some
me

bit,

to

progressively profitable patronage

an¬

subject of salesmanship.

words, to any
man
going
into any

enough,

them

years

selling.

thought at the beginning when this program was first proposed
to me that there was very little resemblance or relation to
investment
selling as compared to our type of selling. However, something actu¬
ally occurred with me recently that caused me to change my mind a

can't
know, or

that

company,

study

on.

with this

years

15 years with

sell

and

;

I

that is what securing

And

come.

tact.

and

make the
sale, hold

often, and sell them for

man.

I can say this much gen¬

company

long

as

kow,.

tlemen, after 30.

blackboard
about

in

going

night. V T am

.

of securities for those who engage in creative

defini¬

one

the

.

that Sunday, -and so he
opened the book and found the
mice had eaten up the pages over¬

is

people,

make

,

mon;:

it

business.

In other words, we want to

call

thrill to see a group of men who are interested in
salesmanship. Now, there must be a reason for that, and the reason
is that, of course, it is the highest paid profession or job in the coun¬
try. Now that, I think, will be very outstanding without mentioning
the names;
; v
®——
he was called on to give the ser¬
men like Pat-

this .business,

that

now,

contacts,

It is always a

in

done

be done in any

can

Holds salesman
should have abilty, reliability, endurance, action, and, above all,
enthusiasm. They also should know where they are going, how to
get there, and be willing to pay the price.

ing down in-

abstention from insincere "smoothie" type of
approach.
Says attitude of salesmen should inspire confidence, and "a nice
i wholesome look," with neat, clean and honest
appearance, are
j among salesman's important assets. Urges thorough
understanding
contacts and

and that is just 'what we
are doing, securing progressively
profitable patronage. Now, if it

interest, and then convincing and satisfying him.

who

Pointing out close resemblance between securities salesmanship and
other forms of selling, Mr. McCrossin recommends use of "cold"

Profitable

years,

(2) know yourself; (3) know your customer; and (4) at close of
sale, take care of yourself. Stresses giving value, getting customer's

tefson and
thpse fellows ;

Director of Sales, New England Division of Electrolux Corporation

Patronage." Now, here is a busi¬
ness I have been in for. over 30

sively profitable patronage." Says a salesman is one who sells a
customer something he didn't expect to buy and lists as fundamen¬

(1) sticking to it and learning

By h. j. McCrossin*

So the very simple
definition of salesmanship is "Se¬

Asserting salesmanship is a science and real profession and there¬
fore must be studied, Mr. Hensle defines it as "securing progres¬

tals of salesmanship:

all

Volume

169

THE

Number 4788

COMMERCIAL

&

Corporation,
>

,

and

•,

Light

Columbia

FINANCIAL

CHRONICLE

(1285)

the
Allied
Power,
Corporation v and the
Electric Com¬

Gas and

From Blue Sky to Cemetery:
PART

'29—'49

dividends

in

and

TWO

share.
In last week's column we cited the contrast between the large
discounts below asset values at which the market is presently valuing
,

the closed-end "investment trusts," and the multiple

premiums freely
illustrating the great oscillations in Wall Street

paid in the 1920s, as
attitudes.
The

<i>

the hair of

public

-utility holding
has

company

ships.
-,
More recently still is
the project of the Northeastern
issued three classes of nopar
stock from top to bottom,
coupled with the minor omission
.

similarly
been

ing

manic

s

of

-

p r e

s

v

investor

the

ment

e

prospectus

of

any

state¬

of income whatsoever—pos¬

inflated before
holding company
was
formed, the public eagerly
ballooned-up the shares of the
new
structure
to
$75—a
price
doubling the inflated asset-value
and representing a price-earnings
ratio over 100-to-l.
That is, that
part of the market elite which
already

was

long term.

joying none.
Under such circum¬
stances, both earnings and stock

fer

i

r

n

bases being equally ethereal, the
charge of overcapitalization can

to

g

holding

com-

a. Wilfred May

manipu¬

pany

lations

of

let

take

us

the

1928-1929

a

look

at

period,
previous

practice in this field.

Already in
1927, Professor W. Z Ripley1 made
this comment

on

the

then

But

danger

and

practice

[in utility finance] -is the double
shuffling and bandying of corpo¬

that

only half. the
story! Here is the epilogue; when
the market really went to town
instead

was

the

of

previous

child's

The

changed its

utter

obfuscation of account,
almost inevitable in these
set-ups,
and the public aspect
of it, eva¬
sion, cannot be overlooked
.

.

.

to think that the pedi¬
of some of the traction com¬
panies in the city of New York
was * a
trifle involved, but this
used

gree

mass

of corporate involution

that

early

achievement

put

entirely

to shame."

in

holding
corporation, christened the Niag¬
ara
Hudson
Power
Company,
formed to acquire stock in the
a

new

son

that the Northeastern
successful

most

a

I find

in 1928,

its

had earned

year,

share, and its stock
selling at an average
price-earnings
ratio
of
25-to-l.

In 1927 the Northeastern Power

later

Buffalo Niagara and

the

and

Mohawk Hud¬

the

Eastern power companies.

had

but

super-super

Northeastern,

exactly $1
192 7

Corporation,

stock for shares

own

then

the

at

relative

apex,

base, of

one

of these

structures, was described
by Professor Ripley as follows: "
"The Northeastern Power Cor¬

poration is indeed an apposite
example of amazingly complicated
involution.
What a gulf th ere is
between the consumer

of gas who
Municipal Gas

is served by the
Company of Albany and the real

But

per

been

this high price-earnings

even

ratio

was

tory

to

apparently

its

owners.

unsatisfac¬
For they

formed the Niagara Hudson Power

Company,
and

which

two-thirds
share

each

of

exchanged
its

of

two

shares

for

for
and

ratio.

Now—in
this

Northeastern

public

about

$25

of the

than 20%

is

pany

Power

All of

concern.

sold

offthe

stock of this com¬

the treasury of the
and
Electric
Securities
in

up

to

30,

Northeastern

our

so

selling

was

eagerly paid by
those "investing" individuals for¬
tunate enough to be included in
the "insiders' preferred lists" of
84-to-l—prices

Corporation.
Then
the
Power the investment bankers.
Corporation of New York in turn
owns all the common stock of the
:'Cy; 194 9
Power

and

Electric

Securities

Corporation, but all of its pre¬
ferred shares were held the other
way

round; that is to

by the

say,

Mohawk Hudson Power Company.
This introduces a slight compli¬
cation.

Nor does the Power Cor¬

poration of New York stand

on

its

own

Now

contrastingly,

in

dog

our

days of '49, instead of the abovedescribed

earlier

multiple-pyra¬

miding the market public is bare¬
ly willing to buy Niagara Hudson
Power

stock,

stantially

40%

representing

similar

discount

sub¬

properties, at

the

from

deflated

prices

of

and

barely 8 times their

Corporation,

ready heavily discounted Niagara

the

top

company.

Then the serpent swallows its own
tail

in

shares
owned
Power

part,

because

of the
by the

some

75,000

Northeastern
Mohawk

Corporation,

are

Hudson

which

has

at

ings.

assets,

Power

other

additional

stock

assets

discount

is

in

selling
of

Company,

a

an

40% under

general

ratio

only 81/2-to-1 in lieu oi

of

in the

only

Corporation,

tion

with

from

assets,

and degree.

ascriboi

Mn

by and yet to

substantial

"MAIN

block

other.

the

It would turn

STREET

STREET"—LITTLE,

of

AND

BROWN

1927.




WALL

&
;

CO.,

the history of the
Corporation.
In January,

1929, very substantial minority in¬
terests in the United Gas Improve¬
ment Company,

Corporation

of

the Public Service
New

Jersey, the
Mohawk Hudson Power Company,
the Commohwealth

now

reason

often

holding
possi¬

the

is

bility of delay in the accomplish¬
ment
of

of

the

lic

of

dissolution—irrespective
accrual :of

uninterrupted

income.

This estimate by the pub¬

removal

liability

from

lieu

in

payment of

assets

as

a

previous

the

of

and Southern

production in the United

mixed trend with advances in

goods and resulting in
continued high output.
the

For

latest

available

an

week

by 8%.

rose

the level

last

States

ending

on

March

!

1

re¬

5,

continued

and initial claims

As for total claims, they approximated 76%

prevailing

week

lines, offsetting declines
encouraging overall picture of
some

claims for unemployment insurance increased 9%

than

more

one year ago.

*

1

*

*

Automotive

producers recorded factory sales of 431,284 motor
vehicles in January of this year, the best start the industry has
made in any year since the end of the war, according to the Auto<mobile

Manufacturers Association.

The

bonuses for

enormous

just such removal and for the

ac¬

month's

output

'

topped

January, 1948, by more than 6%
despite model changeovers by several large producers.
Passenger
cars
accounted for 326,019 units of the total; trucks
104,607 and
motor coaches 658.

Daily production

schedules

in

January were almost equal to
but December's two additional
working days helped to push factory sales to 486,981 units or one
of the best monthly totals since the war.
3\
j
of

the

World
nations

final

dollar

month

in January,

V-

of

1948,

shortages, import permit requirements of foreign

other

and

factors

decline to'only 6.3%

caused exports of American vehicles to
of January production, as compared with 8.7.%

1948. '

-

-

.Xvv-•

The

year

of $8,700,000,000,

according to The American Tariff League's monthly
analysis of the Department of Commerce foreign trade statistics, and

appearing in the March issue of that organization's paper, "Topics,"
U. S. foreign trade in the past year was characterized by a

falling

off of exports, particularly marked during the second and third quar¬
of 1948, but which was interrupted in the last quarter when
October exports rose above the previous month, and aeain in Decem¬

ters

ber when

outgoing shipments increased to

for the year.

■

a

-

record dollar value level

-

-

.

t

,

General imports of foreign goods and raw materials in December
amounted to $721,400,000, representing a 31% inereasfe over the $550,-

100,000 for the previous month, and were 20% higher than the total
$602,900,000 for the corresponding December, 1947, period.
Total

of

U. S. exports totaled

$1,237,900,000, the highest level since May, 1947,
compared with $779,900,000 for November, a 59% rise, and were
above the $1,113,600,000 shipped in December, 1947.

companying corporate obfuscation,

as

furnishes another insistance of the

11%

manic-depressive

processes

*

of the

American investor!

irrelevantly—

not

York

Exchange

Stock

reports the occurrence of a sharp
rise in .the short, interest duriyg
the 30-day period ended Marjch
■15; marking the third successive
"bearish"

month

*

*

*

New
total

S.—and

New

which

in

there

have been substantial increases in
the size of

the short-selling public,
both absolutely and in
relation to the volume of trading.
calculated

production facilities installed by electric companies will
995,368 kilowatts of generating capacity for the first quarter of
Of this amount 292,620 kilowatts represented additions in'Jan¬

1949.
uary

of this

year,

281,736 kilowatts in February with March installa¬

tions due to total 421,012 kilowatts, President Ernest R. Acker of the
Edison Electric Institute revealed on Tuesday of this week.
: \
:
As

1949

moves

into its later

months, installation of new capacity
activity occurring during the last portion
in anticipation of the customary December peak period,
states Mr. Acker. In 1948, electric companies installed 1,556,841 kilo¬
watts of capacity during the last quarter, or over three-and-one-half
will accelerate, the greatest
of the

year

times the 414,815

kilowatts they installed during the first quarter.

It is also

Charles R. O'Donneli Is
With Harris,
(Special

to

The

with

has

Harris,

Chronicle)

ILL. —Charles

CHICAGO,
O'Donneli

Upham Co.

Financial

Upham

R.

worthy of note that capacity -installations, in 1948 broke
all previous records for a single year, with the electric companies
installing about 3,400,000 kilowatts. In 1949, the electric companies
plan to install an unprecedented 5,400,000 kilowatts, about 59% greater
than their record-breaking total last year.
The electric industry's
grand total of new capacity added in 1948 was 4,253,000 kilowatts with
the industry's total added capacity in 1949 expected to be about 6,700,000 kilowatts.

associated

become

135

Co.,

&

•/'i-SV

Increases in

neli

electric

was

1950

when

record is expected in 1951

Mr. O'Don¬

previously in the trading

department of Cruttenden & Co.

at the close of the

to

The

new

in

Putnam

Financial

is

with

F.

L.

high level in

five-year period, 1947-1951, inclusive, the business-

1946.

generating capacity,

or

over

(Continued

Pay son

—

50%

of their installed capacity

1

Ain't II the-Tralli!

on page

31)

&

Putnam

Co., Inc., 97 Exchange Street.

*

Time Inc.

Kingan & Co.

n

Continental Airlines
It should

be

the VOGUE

McGraw

To LOOK in the CHRONICLE
In order to

keep POSTED

—CF.

24

so

a

A

of 5,200,000 scheduled kilowatts and

Chronicle)

PORTLAND, MAINE
Gordon

a

companies plan to install 4,700,000 kilowatts.

managed electric companies plan to have added 20,300,000 kilowatts
of

With F. L.
(Special

T-

generating capacity will continue at

near

South La Salle Street.

on

(F. H.) & Co.

the

Bought—Sold—Quoted

that in TIME

FORTUNE.

FREDERIC H. HATCH & CO., IHG.

stocks

selling below
capital, listed
by M. S. Benjamin in March It

their net working

issue of the CHRONICLE.

.

'

1948 ended with U. S. general imports of merchandise
and raw material reaching an all-time high dollar value of $7,100,000,000 which, with a decline in U. S. total exports during the year
to $11,700,000,000, narrowed the U. S. export-over-import trade gap
to $4,600,000,000, about 47% below the corresponding 1947 margin

time

as

current

discounts

company

distance
to

both

Thus the

for

You'll make

to be owned

investor's

the

the

LIFE stocks

a

com¬

increases the discount in correla¬

is furnished by

own

holding

panies generally, the market

United

shares of the

of United

case

but

Company, etc., each
seems

earnings

an

the former 100-to-l.

Company, the Connecticut Power
of these

at

and

a

other

man¬

already been described as stand¬ agement investment company, in
ing halfway up this extraordinary whose portofilio it is.
genealogical tree. But that is only
half the story, which is too com¬
United Corporation "THEN"
plicated to be fit to print.' When
one enters upon the ramifications
Another striking instance of the
of the New England Power Asso¬ pendulum-swinging
of
investor
ciation, the New England Power appraisal of a particular security
one

in

turn,
at

the market's appraisal of Niagara

Share

40%

earn¬

Furthermore, this latter al¬

Fiudson
with

underlying

original

its

embodying

a

feet; because a large propor¬
tion of its common
shares are
owned by the Northeastern Power

the

to

and

per

Total industrial
flected

,

share, thereby auto¬
matically marking up Northeast¬
ern
stock to a 67.
Soon Niagara

at

the

to

contrast

blowing-up by the
United Corporation,

the

—

;

assets, is selling on the New York
Stock Exchange at a discount oi

P.

stock

own

NOW"

dramatic

former

Industry

^—

those

"AND

The

its

old friend
at the
the
equivalent of 84; these prices paid
stock
of
the
Gas
Company is
by the public representing • the
owned
by the Mohawk Hudson
fantastic price-earnings ratio
of
Power Corporation.
A little less
head

instrumentality reason
doubling its asset-valuation
quadrupling
the
earnings

public

sold

considered
the
holding-

another

of

Price Index

Auto Production

Business Failures

"preferred

company

play:—
In 1929, Northeastern Power ex¬

the

to

lists,"

"use

mere

Not

from hand to hand
without suitable let or hindrance.

rations about

We

the

admitted

largely
19 2 9

preva¬

lent situation:

"Another

scarcely be substantiated. One is
left, therefore, at liberty to give
free play to the imagination in
deciding what this relationship of
assets to capita I iz at ion actu¬
ally is."

Food

and

grossly

while

and

customer

re¬

Carloadings
Retail Trade

Commodity Price Index

the

this easily calculable asset value,
and the fact that those assets were

tion the project seemed to be en¬

Prelude

of

value

structure, based on the mar¬
prices of the constituent units,
was
$32 per share.
But, despite

sibly because at the time of flota¬

Before

per

ket

be¬

The

book

The

cents

Production

Electric Output

State of Trade

new

over

havior
the

in

de-

i

.

which

supply¬
the focal

point

Philadelphia lawyer

a

to disentangle these relation¬

gray

28

Steel

The

exchanged their holdings for
shares in a new holding company
which
they named the United
Corporation.
The equity of the
new parent, United, in the earn¬
ings of its subsidiaries was at an
annual rate of 56 cents per share,
pany

By A. WILFRED MAY

5

t

.i*

Established
>

!
63

Wall

1888

-

MEMBERS N.

Y. SECURITY DEALERS ASSOCIATION

Street, New York 5, N. Y.

Bell Teletype NY 1-897

j

'

6

THE

(1286)

COMMERCIAL

&

FINANCIAL

CHRONICLE

ized

Television and Motion Picture
£rv;'U'V.

:

Industry

|

By PAUL RAIBOURN*

chronized

medium of

new

a

Th) impressions it leaves on the senses are not
They have been pr educed heretofore in the theatre and through

pictures and sound is not new.

types of impressions.

new

motion

the

that

vision

tele¬

can

pro¬

duce them

in¬

stantaneously
distance

at

a

in

the

But it

success
same

theatre

a

to

sent

ability

reproduce

at

distance

a

Paul Raibourn

has

strange
My raith in mankind and
particularly
in
our
represen¬
results.

tatives

in Washington has been
considerably increased b.y my hav¬
ing known, and only on television,

who

man

a

spent part of his life

was

and

he

carry the

position

to

of his official
public over tele¬

the

have

Never

who

man

a

asked

messages

to

vision.
heard

often

was

I

seen

or

kinder and

was

of

the

In

the

face

Tested

much

of

dubious

comment from many

people, both
the organizations with which I am

hours.

connected and I, have believed for
12 years in the appeal inherent in
television

even

day of men¬
tal, spiritual and physical refresh¬
ment.
Some
of
the
remaining
hours must be spent in traveling
from

One

even

basis,

any

op¬

years

our

foreign problems, or more
correct an aspersion on the

mo¬

tives of others with whom he may
have disagreed, while withal his

years

sibilities have

barely been tested week. They had been that since
by most people have not even time immemorial.
They actually
been surmised. We based our be¬ icame to this
figure because of the

position was carefully and in¬
telligently explained. He died last

lief

portray

on

like the

radio

at

the

of

spoke
it

"I wouldn't have given

second

a

of 77. My wife
when she read of

age

him

his death.

television.

thought
friend."

a

for
though

except

But I do feel

I have lost

as

He

was

Sol

in

television

with
the

experience

or

For

we

tion

of

showed

on

it

in

human

as

Man

a

fact that

could not

man

of

more

his

time

in

por¬

for

lations.

Use

Leisure

of

Time

which
The

put

clearly than long dissertations why
it is that families will buy a tele¬
vision set which, no matter how

no time to be anything but a slave
looking for something more and to his work. The problems of his
thereby lost that physical comfort wife were even worse. After tak¬

when he

The

trayed

them

bread

figures it, is going to cost
$100 a year when original

cost, installation, repairs, electric¬
ity, maintenance and obsolescence
considered.

during

the

vision

This explains

why

has

past

18

months

tele¬

spread through our
large cities like the chain reaction
of an
atomic
explosion.
It* has
rapid that the astounded

so

Federal Communications Commis¬
late

called

year

issuance

of

until

the

to

last

they

licenses

a

halt

broadcasting
could

what the results
with
respect to
the

re¬

appraise

would

be

public

interest

far

as

as

available

radio

frequencies and general economic
effects
The

tion

of

this

condi¬

represents a great change in
for many radio experts

attitude
from

their

1930s

and

opinions

early '40s.

of

fort

the

There

late
were

characteristic

por¬

"Man does not live by
alone, that physical com¬
was

not

was

enough to satisfy
him." The lesson is again taught
and the words repeated in the law
giving of Moses and in the Gospel
story of the temptation of the
Master.
bread
and

"Man

alone,"

the

he did.

life

egg

by
chicken

the

and

puzzle

live

not

does

assumed that

The interesting part of the
man for us
today is that

of

part of his life in which he is not

ing

physical business
living, that is, of attaining his
bread. This is that part of his life
of

which

is often

called

"his

leisure

time," although why it should be
"leisure"

when

most

of

us

hectically busily engaged
spending it seems beyond com¬
prehension.
are

so

in

Leisure

time

individual

is

a

for

the

matter

ordinary
of

recent

who said that television de¬ development, in fact since 1850.
velopment was an impracticable That statement comes from figures
and impossible problem because of the U. S. Department of Labor,
it was a chicken-and-egg problem, and I am going to assume that

first, the set
They
raised the question, how could the

since

manufacturers

ing first endured figures, pitied
them, later embraced them and

namely, which
or

the

came

broadcasters.

extraordinarily

sell

without

sets

appealing

pro¬

who

the
are

that you

ing programs get on the air and
be
paid for unless enough sets

and not

ures.

before

the

Conference

by

Mr.

Central

of

the

States

Group

Investment

Bankers

March

Raibourn

SEC

you

now

married to fig¬

that I

said

"figures"

statistics.).
are

in

individual

un-

the

7

times

week.

24

The

or

-

168

normal

spends eight hours per

or perhaps I should say by
night, in his bed (or a reasonable
facsimile
thereof).
This
is
56
per

week, leaving

112

re-

children

"economic

home

and

they

of

in

up

living

civilization,

few

a

their

as

respects this
problem only too well.
In

as

"'general,' the adult American
18

over

65 has

of

years

about

30

age and below
hours per week

Most surveys indicated that be¬

television

fore

to eight
really atten¬

seven

week for

per

the- radios

came,

from about

were on

hours

sible

to

work

and

began

it

decrease
to

for

leadership

new

m

istic

the

television.

now

fered

the

to

National

Association

of Securities

Dealers, Inc.
Mr. Lichtenstein, in his letter,
asserts there is "too much pussy-

reached

the

pe¬
leisure time avail¬

26

hours

so

or

Many of

To

you

foregoing
to

some

increase
over

the

men

believe that
figures are appli¬

of

may

but

extent

not

to

that is

leisure

last

not

also

learned

for

time

hundred

home-making

long.
that
can

characterized

be

can

pleasure
The cost

as

of the leisure-hour type.
of the automobile

about

was

$400

per year to the family, but how
much - of
that
is
chargeable to

leisure depends on how one in¬
terprets Bernard Baruch's 1942 re¬

port that the American economy
couldn't

biles

function

Certainly
lot

a

away

things

new

ourselves,

automo¬

our

from us.
would have to find

we

of

if

taken

were

to

do

with

c >

The remaining 15 hours are di¬
vided into spectator sports, par-

(Continued

for

The

on

36) *

page

the

be

recently

articles

in

appeared

which
"The

Commercial and Financial Chron¬

icle").

Far from cooperating with

-

NASD

think

I

should

head

organiza¬

our

movement to¬

a

abolishing it and I would be
happy to serve on such a

There

ing in

is

much

too

this

larly in

country

pussyfoot¬

particu¬

and

industry. There is NO

our

leadership in the securities field.
It is probable that this leadership
should

be

assumed

by the New1
Exchange but that
organization, like so many indi-'v
viduals, is working purely for its
York

S.

Lichtenstein

Edward

H.

that

starve

or

text

of Mr.
letter follows:

Lichtenstein's

&

as

ship, why don't

-

<

..

to the pub¬

we go

tendency

inevi¬

must

other

industries

Certainly

Company,

clipping from this
"Times"
shows
what

morning's

deal

vital

more

public than
come

DearEd:

letter and report
dated March 15th, last night, and
I want to compliment you upon
your

the Association's progress.

in

the

the

to

cut

tax

a

people do
out

open

good job and make
for the
the

if

NSTA

we

sary.
your

association in restraint of trade

of

and, furthermore, it has done more

functional-

to hurt the securities business than

awaiting

will provide

is

so

neces¬

you

your

.

and
reply with interest,
every

success

am,

(Signed)
99

do a

good name

„

Wishing
I

liquor.

we can

a

that

leadership

on

great
general
a

hesitate to
with their

not

problems and I think

However, I want to protest vio¬

lently about that portion of

attempting.

are

survival is

our

These

an

„

tably end.

Chicago 4, 111.

read

prosper

lic and show it where this present

231 S. La Salle Street,

f, I

whole.

a

realize

not

must

The enclosed

President,

NSTA,
Sincere

does

And, while speaking of leader¬

socialistic

.

The

and

industry

our

Welch

footing in the securities industry,"
and calls for firm leadership to
combat present socialistic tenden¬
cies.

Stock

benefit

own

R.

ing cooperation to the NASD. In
my humble opinion the NASD is

business

have

sociation's pleasure.

report in which you tell of offer¬

women.

:

committee should that be the As¬

has

Women'have

■

gest you read the

very

men

years

■

,

wards

women.

true.

usually preceded that for
But

,

They spent three to six hours in
an automobile, about half of which

tion

but

has recently been hovering around
the 30-hour mark.

the

about $20
of which they only spent
$10 themselves. • y
v;
' i

per year

the

Mr. Edward H. Welsh,

it reached 32 y2 hours in
period of the late '30s just
prior to the war. During the war
to

They spent about three-quarters
an hour per week reading mag¬

azines which cost them

.

age-old
which the

fact,

receded

of

a copy of a letter, dated
by B. S. Lichtenstein of B. S. Lichtenstein & Co.,
security dealers, New York, to Edward H. Welch, President of the
National Security Traders Association, Inc., in which he protests
against the portion of the la tier's*?;-t,.
——~-r——report in which cooperation is of¬ any other single influence (I sug¬

the

the

it

a cost of .about $40
per year, $20
dollars of which they never knew
about because it was again spent
for them by the advertiser.
f

March 22, written

pos¬
hours
of

able has reached around 30 hours.
In

.

tendencies.

were

when the

•

family
spent
about
iy2
hours per week on newspapers at

The "Chronicle" has been furnished with

became

developed to supply
during them.
We
have the concurrent development
of the vaudeville theatre, of pro¬
fessional baseball, of college foot¬
ball, of the motion picture theatre,
the mass reading of newspapers,
magazines and books, of the auto¬
mobile as a pleasure vehicle and

riod

produce this
and it cost them $35 per

year.

up

entertainment

have

movies, al¬

others to

securities business to combat present social¬

As the hours of work decreased

we

y

,

iy2

members went much

some

than

more

.

about

NASD is an association in restraint of trade
and securities business should head movement to abolish it. Calls

been based.

Now

though

"

;

.

B. S. Lichtenstein says

pro¬

show

to

abolish

the radio and

./

Uiges NSTA Lead Movement
Toward Abolishing NASD

institution of slavery on
leisure time of certain classes had

means

have available.

The family average
hours per week in the

The

sisters. " You who still try to keep
servants in your homes know the

practical situation

These

adventurous

more

associate

surplus of

a

and

facturer

average,

same

free enterprise Western

our

$12. as a hidden charge' in
purchases while the manu¬

their

experts that
leisure

enjoy the

can

duction of materials for the busi¬
ness

which $30 was actually spent
by the family, and they paid the

we

Those

bringing work

women

But around 1850

on

considerably more. They cost the
average family about $42/per year

and trade and government.

are

which they could continue while
they shared the available gossip.

cable

day,

Association, Chicago, 111.,
hours
16, 1949.




are

(Note

There

hours
address

the

lowed the logical sequence of hav¬

grams being on the air and how
could such extraordinarily appeal¬

*An

advent of

gathered here have fol¬

the

available to

were

with other

many

owner

of

care

hours

engaged in the

called

concerned.

were

recognition

banished from Eden.

was

human

anyone

sion

was

he (and his counterpart Eve) went

Instances like this explain more

been

up

time

was

called
it.
advertising.
figures make radio' adver¬
tising the most inexpensive form

and

actually
maintain
his
physical
vigor and mental health.
Opportunity

it

engaged in producing a meas¬
urable ' product
in
manufacture

much

use

work

instru¬

that

nature

when

not,

it

on

electrical

deal

our

could

and

screen

experts,

mechanical
ment.

success

what

ordinary man in 1850 had
Bloom,
late
Chairman
of
the into a Garden of Eden where he little.opportunity to read the
pa¬
House Committee on Foreign Re¬ had
every physical comfort but pers except on Sunday.
He had

are

measui&ble prbd-Uct at home

and

week

own

radio

you

left.

are

hundred

The
tell

by the
a
little

ago
the
ago
and have worked to working hours of the ordinary
bring'it to fruition. We are still laborer and the farmers and their
quick to working at it. We believe the pos¬ wives were just about 70 per

scrupulously fair to his

ponents in the discussions of

more

women

an

now

a

work

On

70 hours

over

programmed

as

and

to

farmer.

listening.

salesman. will

other

large number of
formerly ^ produced

a

who

small

Barely

tive

of

the

from

*

Possibilities

has lived in New York. His
a
fairly well-known public

name

active

indicates should be

here in Chicago but who in recent
years

cock¬

they do with
boy who. was hours per week -is consumed in that
time and what industries and
neighborhood, of the simple business of rebuilding commercial
enterprises are bene¬
Kedzie Avenue and 22nd Street to our physical body and making it.
fited thereby, and what changes
spend the- summer -in the open air presentable and attractive to our are
likely to take place in such
with a philanthropic farmer down social
contacts.
This
leaves
80
use
of time under television you
near
Bloomington.
The farmer's hours for the business of provid¬ can
go back and make your own
wife asked this worldly wise child, ing economic means of physical
predictions ,as to which securities
"In the event you should become living "and for leisure time.
Ap¬
you
should recommend to your
seriously ill here, whom do you proximately ten of these hours are customers.
want us to notify?" He answered, on Sunday, which Biblical injunc¬
"The doctor, who else?"
tion states and human experience
Replacement of Ridio
effect

success.

This

somewhat

,

arts that made
the

of

Eat¬ of
following : the .for seven hours per week.
leisure time, time in which he
although still ing takes anywhere from seven or she exercises their natural
pro¬
trying to turn it off into every to 21 hours per week, depending
pensity for not-living by bread
how
side road which appears along the on
much
social
rites
and
alone.
way. They don't seem to have the palaver go with it, but it seems
:yWhat do they do with that time?
simple, direct sense of cause and fair to assume that 88 of the 168 If we measure what

depends

the

on

all

are

colors, - reluctantly
bandwagon
now,

home.

its

for

published

hours

it. worthwhile maining

make

to

Dressing
for advertisers? Some of the most and undressing, shaving, bathing,
vociferous 1 proponents
orf ~ these getting a haircut, buying clothes
ideas that television growth was and
personal
adornment,
the
impossible were located right here whole process of grooming, of
in * Chicago.
course,
varies
with
the ; sexe.s,
Most of them are,
with
much '• flaunting - of - their but even the males can account

The difference

is

sold

were

picture film.

use

thereby.
national
income

who haven't yet yielded to
the
appeal of a business life will do
syn¬ exactly that unless home life can
be so arranged byv our architects

The art of communicating by

lication.

commu

of

that

apparel, auto business and magazines. Reveals Paramount Pictures participation in television and con^
eludes television will make people want to see motion pictures.
is

freedom

increased

when used for time com¬
parisons because of the situation

'

Commenting on rapid extension of television, Mr. R libourn contends its possibilities have been barely
tested and predicts it will fulfill purpose of utilizing leisure time } of population. Foresees some replacej
ment of radio as television costs decline, but says principal adverse effect would fall on wearing

Television

time

eyed

'

Director, DuMont Laboratories

i

Our

statistics

Vice-President, Paramount Pictures

v'

their

and

leisure

Thursday, March 24, 1949

-B. S. LICHTENSTEIN

Wall Street,

New York

March

5, N. Y.,

22, 1949.

.'

r -

.

Volume 169

Number 4788

THE

COMMERCIAL

Washington ///If
Ahead of the News

Member, Board

and

me

We

the stenographic service agreed to re¬
Saturday afternoon to get out some work for
had finished I graciously invited them for a

on

they

had

two

and they began working on me to
Pyramid Club. All I had to do was to pay
dollar, then the next, night I was to produce

a

a

two more
and
at

vV'-.V;:'vr/'V'

cocktails

join

guests who would pay a dollar apiece
Tuesday I would entertain eight people
home and then all I had to do was to sit

on

my

In my

for

several

the

weeks

highest
I

told

officials

of

has

our

embraced

postwar

some

was

the

had

Since the

monetary pol¬
icy
has
had
to cope
with

o^

government.

become

saturated

more

or

less

I had

much

never

I

the

impression

the

S.

Szymczak

con¬
ex-

available sup¬

collapse before;

letter

craze

came

later.

But if you think what you have been
reading is
to give some thought to our
plans for arming the
Atlantic Pact, an'enterprise that, is to cost around

Consider, too, what this is to entail aside
*

ture.

ought

you

members of the
or

$lJ/4

from the expendi¬

•

initially

were

We have

no

arms

But

equipment to give them.

or

Only

mountains'of trucks, planes,

relatively
of every

a

guns

have successfully gotten rid of this tremendous
surplus of supplies which we had at war's end, through straight out
destruction, through leaving the stuff to rot on the open ground,
through disposal at give-away prices by the |War Assets Adminis¬
tration.
'
we

Having successfully rid ourselves of these supplies,
going to call on industry to manufacture them again.

we

are

now

terminated,

August,
1948,
wholesale
prices rose 50%, consumer prices
and

personal

total

incomes

expanded by 24%.

of

billion.
This huge
expenditures was fi¬

income,

tapped

through

taxation

and sales of securities to the pub¬

lic;

in

and

part

through

expan¬

sion of the money supply brought
about
by
borrowing
banking system.

from

the

to

which

going to be required to convert back to war, and to
what degree of a military
emergency we are moving into.
With a
military emergency of any kind, with the government
demanding
that guns and other war equipment be turned out
quickly, there will

be

for Truman's overall

pressure

scribed
this

the most

as

bill

which

has

complete plan for regimentation

are

of course,

now

spending

so

$15 billion

some

and another billion

this does not look

or

a

a

year

de¬

made

ever

in

billion and

a

large part of this additional

money

quarter

is not to be spent
ceased to

the military,

on

alarming. But the question arises

which industry has pretty generally

aircraft, that is dependent
itable

level.

But

on

a

rounded

to

be

placed

the

upon

money

on

thoughts that

are

men

pn

my

imagination

is

working

too

ceives

does

not

"liquidity"
of the
since the taxpayer re¬
exchange only a tax

in

receipt which

he

cannot

industry,

on

a

present

prof¬

fast,

but

advantage

spending
opposite

assets

that

when the op¬
be readny con¬

can,

portunity arises,
multiple
It

of

not reasonable to expect

expenditures

financed
tion.

for

entirely

war

The

In

loss

other

to

to

The

Edwin (Saltan Appointed
Financial

of

through

F.

Weed has become associated with
The

Reuben

Madison

Securities

Avenue.

Mr.

Co.,

618

Weed

was

absorbing

previously with Cray, McFawn &
Co. in Detroit.

In the past he was
with A. M. Kidder & Co. and was
a

&

partner in
Co.

Weed, Hall, Berndt

■

of

related
tive

tives

problems

of

administra¬

feasibility, equity, and incen¬
become increasingly
diffi¬

cult

to

handle.

More




safeguards

against

widespread evasion
generally
demoralizing

its
fects

have

merous

to

be

special

required

ef¬

devised.

Nu¬

adjustments

maintain

to

and

a

are

general

consistency with the community's
standards
of
fairness,
without
Which no tax system can long sur¬
vive

as

an

effective instrument of

policy. And, finally, a rapid step¬
ping up of the tax bill may, at
in

the

short

effects

verse

a
consequence, then,
wartime financial policies

tered the postwar
period
economy characterized
cessive degree of

have ad¬

run,

effort

on

incentives

and

thereby interfere with achiev¬
ing a maximum wartime output.
Just

where

that

upper

words;

unlike

the

public

results

the

an

economy's

system

is

an

the

outright

securities

*The

has been appointed
supervisor of

SI7

reserves

billion

Mr.

second

Szymczak

public

by com¬
highly liquid

lecture

of

mated

the

that

stock

over

of

the

liquid

Institutions, Chicago University,
Chicago, March 11, 1949. The first

Beane, before that with

Doremus & Co. and the New York

|

lecture appeared in
icle"

of March

"The

17, 1949/

Chron¬
-

- -

period

war

assets—cur¬

rency, bank deposits, and govern¬
ment securities—held

by individ¬

uals and

businesses, including in¬

surance

companies, increased

ap¬

proximately threefold while
the

over

period the gross national
product only about doubled.
same

This greatly increased ratio
of
liquid assets to the value of the

national

product reflected in part

considerable

a

part

of

concerns

well

serves

the

on

and

business

who, for economic as
patriotic reasons, were

as

willing

restraint

consumers

to

accumulate

rather

than

liquid

bid

for

re¬

the

supply of goods that were
available during the war.
And, of
course, the high "liquidity ratio"
that developed over the war re¬
flected the fact that we had
scarce

gen¬

erally effective direct controls

on

prices and materials.
Combined

limit of

log

exacly, but it is safe to

of

with

unsatisfied

a

heavy back¬

real

demands,
liquidity
we fell
short of it by much too
strong inflationary
pressures
would
wide a margin.
inevitably de¬
Less than onehalf of the funds raised by the velop, particularly if the wartime
controls
were
prematurely re¬
Treasury between the middle of
that

say

high

meant

1940

and

the

end

of

1945

came

Further, not only did we rely
much too heavily on borrowing,
but on borrowing of the most in¬
flationary
kind.
Of
the
total
amount borrowed by the Treas¬
ury from mid-1940 to the end of
1945

-more

than

two-fifths

came

from the

ing

banking system, includ¬
commercial banks, Federal

Reserve

Banks

ings banks.
nance

we

take of

and

mutual

sav¬

Thus, in. our war fi¬

made

the twofold mis¬

of

moved.

But

"

degree

that

wartime policy of heavy
borrowing held yet
another implication for the
prob¬
our

reliance

lem

of

on

stabilization

in

the

post¬

national

debt

war

world.

grew

during the war to a peak of
billions, a figure of astro¬

$275

nomical

Our

proportions

by

prewar

standards.

Its
ownership
was
widely distributed and its interest

pattern

had

become

integrated

into the whole asset and
structure of

our

liability

economy.

taxing too little and bor-

Sills, Minton

(Continued

on page

33)

&

Company

i ncoiu'ouaied

announce a

change of

name to

Sills, Fairman

Harris

incorporated

and the election

Fred W.
as

of

Fairman.Jr.

Vice President, Treasurer and Director

Members Chicago Stock Exchange

209 S. La Salle St.

Chicago 4. 111.
Effective March 21, 1949

Confi¬

dence in the market value of the

under

Fenner &

from

grew

—

in

inflation-

auspices of
the Charles R. Walgreen Founda¬
tion for the Study of American

an

ex¬

June 1940 to
$91
by December,-1945.
They
constituted the bulk of total bank
loans and investments. It is esti¬

this

stock

newly-created post.
Mr. Gahan was
formerly associ¬
ated with Merrill
Lynch, Pierce,
a

an

held

ex¬

banking

en¬

billion

taxation is, cannot be determined

liquid assets.
from

our

liquidity. Gov¬

ernment

mercial banks—their

taxation,

in

of
we

with

by

power,

Borrowing

General Telephone Corporation
that Edwin F. Gahan

"Times."

taxa¬

be imposed even in wartime.
As
the tax burden grows,
particularly
when it grows rapidly, the inter¬

current

announces

information,

be

are serious
obstacles,
essentially non-monetary in na¬
ture, that place a definite upper
limit to the tax'burden that can

of

pansion -of

By Oen'l Telephone
Chronicle)

OHIO —William

to

There

issuance of government securities

(Special

private

As

secondary

was

Our

expansion

Excessive Degree of Liquidity

the

convert

but has quite
liquidity
implications.
spending power in¬
volved in lending to the govern¬
ment is not permanent as with
taxation, but may be reclaimed
by the lenders at a future date.

the

analysis. Mr. Truman and his close friend, Leon
Keyserling, may very well know whereof they speak when
they contend
inflation is still the problem rather than
deflation.

TOLEDO,

banking system

the future.

or

Borrowing from the nonbank
public shares with taxation the

is to be spent

occurring to the writer simply reflect the thinking
the Washington scene. The whole
subject needs

F.

rowing from the
too m.uch.

into spending power either in the
an

careful

some

taxation

the

to

economy,

defense, it is not at all unlikely that burdens are
industries now engaged full scale in civilian needs.

that

problems,

equipment

it to keep doing business

Atlantic Pact defense

increased, and current expan¬
sionary
pressures
are
thereby
held to a minimum,
Also, and
perhaps
more
significantly for

on

out

It maybe

many

if

is

add

Of the

When

war.

are

to whether

manufacture.

a

imposed, the spending
power
of the public is reduced
by the amount the government's

our

top of

on

taxes

finance

to

as

$15 billion regular military spending much of it goes to

of

been

country.
We

a

control

of

from tax sources.

Purely from the point of view
of monetary stabilization, taxation
is, of course, the ideal method by

is

of

$320

volume

nanced in part out of our current

Herein lies the question being asked in
many Washington quar¬
ters as to what extent
industry, having been reconverted from war
peace,

expansion

possession

least

Basically, our postwar inflation
the product
of our wartime
financial policies.
The war cost

is

around

few months ago we had

description.

As a result, be¬
mid-1946, when price con¬

and

31%

giddy,

$1 billion

billion.

all too familiar.
trols

1929

chain

ex¬
cur¬

money
supply. Furthermore, as
matters have turned out it leaves
the banking system in

recent¬

ededthe

c e

M.

tween

heard this explanation for the

under

was

no

income, but instead produces

immediate

an

war

absorbs

credit.

demand,

ply of goods
Sunday afternoon, a few hours before I was to show up at some
largely
because
spending from
place I had never been before with two guests, I had
pretty -well current income has been substan¬
despaired of getting them. As a last resort I approached a couple of
fellow? playing gin rummy at a country club. Both have had un¬ tially supplemented by drafts on
accumulated liquid
savings and
limited expense accounts until a few months
ago; one had been
selling window shades to a government at a 200% profit, the other a by rapid expansion of private
device to be attached to typewriters on about the same basis. Both credit. ' This condition of exces¬
sive
demand
has
inevitably
have been the most
pessimistic members of the club since their
placed an upward pressure on
expense accounts were cut and they have been insisting a
depression
prices.
Advancing prices accom¬
was coming.
panied bp expanding money in¬
"Will ,you- two fellows be
my guests at a Pyramid party tonight
come, leading to further price in¬
so I won't break the chain?" I
asked.
creases, is the spiraling process of
They both-exploded at once, exclaiming:
inflation with which we are now

indeed,

financng

It

a

ly, .has
sistently

-

The last depression

of

verted into reserve funds to back

until

everybody I approached was looking for guests
himself, i thought I would get my daughter and
her boy friend, although this would entail three
parties in the same
family. But she belonged to a club and was looking for guests

"That's what is bringing on the depression.
caused by the chain letter craze."

method

aiy

penditures.

tive

'rV

was

very

flation. Effec¬

that

and

K

'

continuous in¬

Carlisle Bargeron

herself. '

:

deflationary forces.

rent

end of the war,

the

situation

to

date.

my

out

ex¬

perience

girls "no" about six times, then
dollar and received an address where I
to go the next night with two guests. Setting
immediately to get my two guests I found

paid

>v

broad terms with the subject of
contemporary
monetary policy in relation to economic stabil.ty.
Today, I have planned a more specific ap¬
proach. 1 propose to discuss the problems of
monetary policy as they have developed in the
context of oui^

the rage in Washington

it

and

Monetary Policy

Governors, Federal Reserve System

previous lecture I dealt in

tight and wait for the "call" about 10 days later.
On this night some 200 people would call me first
on the telephone, and then
appear in person with
$8 each for a total take on my part of $1,600.
This thing has been

of

7

bond-support policy, though
admitting it has nulLlied traditional instruments of Federal Reserve for
influencing money and credit de¬
velopments. Contends, however, Federal Reserve is now better
equipped than ever before to offset

girls operating

when

cocktail.

(1287)

Describing main problem of postwar monetary policy as
coping with continuous inflation, Mr. Szymczak
points out difficulties in endeavoring to control
money and credit expansion that is not inconsistent v/ith
maintaining orderly and stable market for government securities. Defends

<

The two

CHRONICLE

By M. S. SZYMCZAK*

By CARLISLE BARGERON

turn to their office

FINANCIAL

The Federal Reserve's Postwar

From
f

&

52 Wall St.

New York 5, N.Y.

a

THE

(1288)

COMMERCIAL

Revenue Bonds and How to

FINANCIAL

&

CHRONICLE

Judge Them

Thursday, March 24,

1949

Dealer-Broker Investment

By PHILLIPS BARBOUR*

Vice-President, The First Boston Corporation

Recommendations and Literature

Mr. Barbour, after defining and classifying revenue bonds, points out features of their investment value
which should be considered. Warns against use of formulas or slide rule methods in choosing bonds,

It is understood that the
send

to

be given to: (1) how revenue is distributed; (2) provisions for main¬
(3) provisions for issuing additional bonds; (4) remedies in case of default;
(5) publicity of earnings and expenses; (6) the budget of sponsoring community; and (7) the margin
of net earnings above debt service.

firms mentioned will be pleased
the following literature'.

interested parties

and urges particular attention

taining adequate rates;

has caused

none

as

ing, with the revenue pledged, but
which are payable from taxes also.
While many of these are excellent

old-fashioned

general

obli¬

gation,

pay¬

able

valorem taxes

within

the

body,

has

bonds

revenue

are

been

probably
the
most
popular

issued

Chicago,

Seattle, Cleve¬
have financed
the purchase and development oi
their transit systems with rev¬
notably

security

and

land

issued by any
State or mu¬

nicipality and is more widely held
than any issued by those bodies.

Detroit,

bjonds.
Some
cities are
using these bonds to finance mu¬
years, however, and nicipally owned airports, parking
for various reasons, bonds issued garages, golf courses, recreation
to provide publicly-owned rev¬ areas, swimming pools, auditor¬
In

enue

recent

enue

-

grown

producing

facilities
have
in number and popularity.

iums and
which

a

were

particularly of the
bond. -'Some of them, in
fact, are challenging the popular¬
ity of
the
general
obligation,
issued by the same community. It

ties

must

host of other purposes
seldom thought of as

suitable

This

is

true

revenue

a

for municipal ownership
generation ago.

what

matter

No

the

purpose,

however, the fundamental secur¬
ity underlying all well conceived
is estimated that today $13A to $2 and
properly designed bonds of
billion, about 10%, of the securi¬ this character is the same. There
issued

by

States

their

and

be

broad

a

and

continuing
public service which

subdivisions, which are at present
outstanding,
may
be
classified
legitimately as revenue bonds.
I emphasized "classified
legiti¬
mately" because there have been

demand for

a

is

producing—the reve¬
easily and fully col¬

issued from time to time

the

securities

many

which

bonds

revenue

in the

good

a

name

would

of
not

jibe with the generally accepted
definition of the

Some of

term.

these hybrids should never have
been issued at all and others, be¬
cause

revenue

to

nue

be

lected—and, above all, the plan
should provide that the cost of

facility be completely liqui¬
well within

dated

from the

revenue

its

life,

solely

which the facil¬

be

self

are

municipality
of

liquidating

-

am$ political subdivisions for the

Commission, the State of
Maryland, the State Roads Com¬
mission (bridge bonds), the Mys¬
tic
River
Bridge Authority at

mington.

these

financing the construc¬
tion, development or purchase of
revenue-producing, publiclyfacilities

which

render

public services, the cost of which
is paid for by the users of those
services

to

them.

duced,

extent

the

The

that

revenues

in the aggregate,

tended to be sufficient to

expenditures

which

features
think the buyer should

we

when

consider

termine

the

out

the

attempting to de¬

investment

value

all

and

bond,

revenue

would

occur

to

I

shall

the

not

go

experienced

electric

bonds.

revenue

as

the better bonds and their record
has proven the soundness of that

judgment.
issuer

the

Has

This is not

monopoly?

a

present in most cases and
highly desirable. However, we
should not refuse to buy an issue
because of possible competition.
It depends on the conditions in
the community and the kind of
service to be given. We are deal¬
ing with a public body which has
recourse
to means of protecting
itself against harmful competition
no
private corporation ordinarily
is

has.

Look

the

at

Cleveland

where

situation

the

issued

under the Federal Public Housing

Authority's

subsidy contract and
referred to as revenue
bonds will not qualify under the

by

some

above

definition.

thos;e which
poses

which

issued

are

are

Neither

revenue

for

-

will
pur¬

produc¬

general overall manner.
The first thing to consider is the
purpose.
Will it contribute to the
peace, good health and welfare of
the community?
Will the service
rendered be necessary or have
popular appeal?
Will the rev¬
enues be easily collected?
a

What

is

to

be

area

*An

address

uate

by

Alumni

School

of

York City, March

Mr.

Barbour

of the

Banking,

19, 1949.




Grad¬

New

the economy of the
served?
What seems

to be the trend there?
term investor
more

before the

merits

The long-

obviously must give

—

1947

Equipment

Curtiss

Wright

-

Corporation

—

Memorandum—Bendix, Luitweiler
& Co., 52 Wall Street, New York
5,
New York.

Y.>

Dewey and Almy Chemical Co.

Pacific,

Trust.

Market
York

5, N. Y.

New York

the indenture, trust agreement
Have

they had

as

satisfactory
there

Is

an

issues

on

of

ex¬

engi¬

One with

tional reputation

is highly desir¬
It is a must

able

on

a

na¬

come

1948

Bank

Stocks

smaller

jobs

too,

if at all

This feature

importance

19

New York

City

—

the

Counter

-

Index

Industrial

stocks—National

Quotation

Bureau, Inc., 46 Frpnt Street, New
York 4, N. Y.
Pessimism Unfounded—Analysis
of market outlook—Milner, Ross

& Co., 330 Bay Street, Toronto

Opportunities

List

—

of

is

should be by a

to

McGinnis at

meeting of the

a

con¬

New York Railroad Club—McGin¬

nis, Bampton & Sellger, 61 Broad¬
way, New York 5, N. Y.

should

work progress

for

Railroad Equipment Program—

of cost
firm experienced in

Provision

line.

be

estimate

Railroads and America's Future

—Reprints of broadcast by

Am¬

brose W.

ABC

network—A.

being spent and supplying other
pertinent information regarding

70 Pine

construction.

Benkert

bonds guaran¬

W.

over

the

Benkert

&

Co.,
Street, New York §, N. Y.
*

Amerex

there to be

sis—New

*

*

Holding Corp.—Analy¬
York Hanseatic Corp.,

teeing completion of the work?
They should be required by all

120 Broadway, New York 5, N. Y.

means.

the possibilities for Central Public

There should be

expected
it

estimate of

by, preferably,
different
engineer

Also available is

an

analysis of

is usually safe

to accept
engineer's estimates, particu¬
larly if he is one with a wide
reputation in this,work.
A good
engineer is in much better posi¬

the

He has to stake his repu¬

on
them, so he's going to
be careful what he signs his name

Engineers have been making
on
construction
for

estimates

Light

1 Wall

H.

&

Traction—

Walker

&

Co.,

Street, New York 5, N. Y.

Also

available

Armour

&

Co.,

are

circulars

It is almost

Caterpillar Trac¬

tor, Deere & Co., Lehigh Portland

Cement, and
Exploration.

Louisiana

Land

&

services

a

have

been

in

Street,

Pont—

Kidder

&

New York

5,

New York.

Gerber

Products

Co.—Analysis
Co., 120 South
La Salle Street, Chicago 3, 111.
Becker &

G.

Insurance

Home

Company—

Summary—Blair & Co., Inc., 44
Wall Street, New York 5, N. Y.
Also

available

is

Central

on

Service

Co.

a

memoran¬

Illinois

Public

tabulations

and

of

Insurance Stocks.

Furniture

Com¬

pany—Analysis—Straus & Blosser,
135 South La Salle Street, Chi¬
cago 3, 111.
Also
available
is a
study of
Indiana

Northern

Service

Public

.

Ludlow Manufacturing

Sales

&

Co.—Circular—Charles A. Day

&

Co., Washington at Court Street,
Boston 8, Mass.
Also

available

are

data

on

the

Verney Corp.

de¬

mand.

Co.—Analysis
& Co., 209
South La Salle Street, Chicago 4,
Minneapolis

—William

A.

ill.

-*

Bank of Manhattan Co.—Circu¬

lar—Edward

Uriion Trust

Gas

Fuller

•;

Moore, McCormack Lines, Inc.—

Study—Smith, Barney & Co., 14
Street, New York 5, N. Y.

Wall

Northwest

Airlines,

Brockhaus

&

Inc.—Spe¬

cial review—John H. Lewis & Co.,
63 Wall

Street, New York 5, N. Y.
Manufacturing

Co.

—

report—Prescott & Co.,
Guardian Building, Cleveland 14,
Special
Ohio.
Portsmouth

Steel—Analysis—In

current issue of "Securities News"

Russell

—Gottron,

Commerce Building,

Co.,

Building, Cincinnati

2, Ohio.

them and.

their

Wall

1

du

on

science with
they are seldom far out
Brooklyn Union Gas Co.—Spe¬
of line.
Traffic engineers also
cial study—Wood, Walker & Co.,
have built up a good record over
63 Wall Street, New York 5, N. Y.
the last 25 years during which

ages.

Co.,

Osborn

American

Circular—G.

tation

to.

M.

Utility 5V2s of 1952.

revenues

entirely

an

Here

an

vs.

be

reports.

are

Are

Motors

Company.

temporaneous address by Patrick

there

the

General

Memorandum—A.

International

interesting situations—Kiser, Cohn
& Shumaker, Inc., Circle Tower,
Indianapolis 4, Ind.

B

Broad

1,

Ont., Canada.

Financial phases—Reprints of ex¬

be

Fernandina Port Authority, Fla.
Road Revenue Bonds—Cir¬

dum

great

should

"Public

Booklet

recording
10-year performance of 35 indus¬
—

prac¬

is of

and

If

stressed.

struction,

made

on

all projects.

ticable.

the

-

of

Toll

—A.
Over

issue

current

&
Co., 30
Street, New York 4, N. Y.

Laird, Bissell &
Meeds, 120 Broadway, New York
5, N. Y.

those of large size and on the

on

in

Utility Stock Guide"—G. A. Saxton & Co., Inc., 70 Pine Street,
New York 5, N. Y.

cular—Allen

the

neer's estimate?

EI Paso Electric Co.—Memoran¬
dum

City Banks—Break¬

downs of government bond port¬
and sources of growth in¬

Profit

independent

(

folios

trial

resolution?

Survey—Analysis—Ab¬

raham & Co., 120 Broadway, New

Electric Illuminating Co. As is
welt known, the securities of each
are entitled to high
rating.
Who are the attorneys setting
or

Central,

Skelly Oil, Standard Oil of Ohio,
Texas
Co., Texas Pacific Land

Stock

up

Pennsylvania

Charles Pfizer, Phillips Petroleum,

city-owned

buyer.

have .been

N.

electric plant has a certain degree
of competition from the Cleveland

tion to make estimates than is the

which

the

Manual—Supplement $2.00;
manual $3.50 each—Freeman
&
Co., 61 Broadway, New York 6,

in

in

its

with

Trust

but it is

They are issued in various forms
—serial, serial and term4 and term
only.
You will notice that "housing"
bonds

Equipment Trust Certificate
Supplement—For use in conjunc¬
tion

absolute necessity,

an

rather than by its class, all we can
do here is to look at the picture

on

Memorandum

—

Brothers,
1420 Walnut
Street, Philadelphia 2, Pa.

The lat¬

accepted immediately

must

judged

notes

to

rule, these bonus are sufficient,
thfrdebt, is entirely wiped out long
before the scheduled
maturity.

be

Coral Gables, Fla.—Tax partici¬

—

ter were

buyer depending on the purpose
he might have under considera¬

maintenance, build up the custom¬ tion, It is obvious that he would
to
know
certain
ary reserves, provide ample funds want
things
to pay interest and reaeem the about
a
water
bbnd
that
he
debt when due, well within the wouldn't ask about a
bridge bond.
life, of the facility financed.
As a As each issue is tailor-made, and

Landreth Building, St.

—Analysis—May & Gannon, Inc.,
Industrial
Preferred
Stocks
solely out of the earnings
161 Devonshire Street, Boston 10,
Discussion of situation—Goodbody
of the project itself and the credit
Mass.
& Co., 115 Broadway, New York 6',
of the municipality is not pledged.
New York.
Witness the standing of the gen¬
Allen B. Du Mont Laboratories,
Also available are leaflets on
eral obligations of Knoxville and
Inc.—Special analysis—William S.
Central
Foundry,
Eastern
Air
Chattanooga,
for
instance,
ten
Baren
Company, 42 Broadway,
Lines, Magnavox,. Natural
Gas,
years ago, when they issued their
New York 4, N. Y.
New York Central vs. Northern

of

a

in¬

is

cA.,

baum

Louis 2, Mo.

pation

of the manner in which funds are

Considerations

pointing

into all the various details which

cover

operation

lor

Investment
In

pro¬

are

service

Debt

Broad

invaluable in enabling
the underwriters to keep abreast

they

so

bonds.

Co.,
15
5, N. Y.

be paid

They

purpose of

owued

fostering a project
bonds is not
importance in judging

great

Consoli¬

Buckley

kind under consideration?

re¬

payable solely from revenues of Boston and the State of Delaware
the projects they have made pos¬ to finance its Memorial
Bridge
sible.
They are issued by States over the Delaware River at Wil¬

use

The

which have been available in

pike

designed to
obligations,

future

perience in work of this type and
is their opinion generally accepted

faults, have cent months are those of the Los
As they Angeles Department of Water and
bare the revenue bond label, how¬
Power, the Omaha Public Power
ever, they have brought disfavor, District, the City of Chicago for
in the minds of some, on the type its water
department, the Com¬
as a whole.
monwealth of Pennsylvania Turnr

Revenue bonds

the

ity itself produces.
Among the better known and
widely distributed revenue issues

by the wayside.

What Are Revenue Bonds?

but

dark

be very bright.
financial statement of the

may

of fundamental

fallen

been

financed by revenue

provide water,
electric
light and power plants, vehicular
tunnels,
highways and toll
bridges.
Sewerage systems and
sewage treatment plants are also
being financed in this way in
growing volume.
Several cities,

the

of

issuing

bonds

of the term.

to

are

corporate
limits

use

popular purposes for

more

which

property

revenue

are

accepted

The

all taxable

on

them

of

none

in the

ad

from

have

Discussion

of

dated Vultee and Lockheed—East¬

"revenue"

The

—

analyses

of securities issued by States and their political sub¬ man, Dillon &
much discussion nor seems destined to be issued for more dif¬ Street, New York

in more curious and unusual forms, than has the type known as the

ferent purposes, nor
band.

Industry

brief

different types

Of the several

divisions

Aircraft
with

Central Hanover Bank & Trust
Co.
Analytical study — Paine,
Webber, Jackson & Curtis, 25
Broad Street, New York 4, N. Y.

& Co., Union
Cleveland 14,

'."vr

Ohio.

George D. Roper Corp.—Circu¬

lar—Clement,

Curtis

&

West Jackson Boulevard,

4, 111,

Co., 141
Chicago

-

Standard Accident Insurance Co.

—Analysis — The
First
Boston
Corp., 100 Broadway, New York 5,
New York.

—

These estimates of

attention to the future pos¬

revenue

than
the
short - term should cover not only all mini¬
The past is important, of mum requirements, but should be
course, but earnings are coming ample to J$$et; reasonable continout of the future.
The past may
(Continued on page 37)

sibilities

buyer.

,

Chicago

and

memorandum

—

Southern

—

Card

Peltason, Tenen- i

Struthers Wells Corp.—Analysis

—Amott, Baker & Co., Inc., 150
Broadway, New York 7, N. Y.

(Continued

on page

15)

Volume

Is

169

Number 4788

British

a

THE

COMMERCIAL

Slump Imminent?

no

perts,

ernment should not

to which

politicians and

ex¬

well as the general public, have allowed themselves to be
influenced by the movements of the Stock Exchange in their
appre¬
ciation of the

business

all

rwas
;

a

prospects is indeed remarkable.
<S>-

generally
ain

a s

the

-

Vf,-'

that

ble.

P'S

re¬

a

t'\■

W

Ex¬
¥

■;

.the first week
of

would

March,

the

on

of

tion
Dr.

people have

Paul

Einzig

admit its

of

eve

would

larity,

decid¬

turned

to

by restoring rationing.

however, the
.majority

have

the

loss

mean

and

To do

therefore

of

it

:t;

to lie between loss of popu¬

they
our

rather obvious facts.

realistic

the

property.

One

was

a

It

prospectus.
was

romantic

and

glowed

with

o

mism.

imaginative

It

glamorous.

and

changes

I shall deal

coverirlg

the

two

decades from 1929 to 1949.

p

t i-

was

The

larity through

employment

Fact number

one:

Between 1929

and 1949 government has assumed

responsibility

a

nance

ual

for

the

that

has

changed

the

whole

pattern of the relationship of gov¬
ernment

people

and

seem

its

to

citizens.

think

this

Some

is

a

transient situation. A lot of people
seemed to believe that it was all

an

or

.

tion.

in

re-employed

be

trades.
from

is

It

even

one

of finding hous¬

the difficulty

to

accommodation.

ing

their
own
difficult

more

the unemployed to move
town to another, owing

to induce

-

hope that they might

is

there

as

Unemploy-

ment would have to become

much

widespread and prolonged
before these rigidities of adapta¬
more

tion could be overcome.

The government's

disinflationary

largely responsible for
development of unemploy¬

the

Allowing for all this, it would
unduly pessimistic to expect a
slump comparable to that of the

talk

and

act

as

if

be

'thirties
the

of the 'twenties.

or

main

pression

cause

the

was

production

of

in

raw

ducing countries.
demand

terials

for

food

the
state

of

de¬

over¬

material

and

raw

:;!An

pro¬

address

by Mr.

Fulton

at

the Ninth Annual Appraisal Con¬
ference of the New York Society
of

Real

York

At present

Estate Appraisers,
City, March 18, 1949.

should like to go back to a perioc
when I could keep 100 cents out
of every dollar I make.

But con¬

trary to the popular song, "Wish¬
ing Won't Make It So."
There

New

dreamers

are
as

two

types

of

day-

Utopia.

a

•

believe that

government

Equally

back

restore

past

some

period

rosy

recent

fall, and producers

Coolidge, it might be wise to buy
ticket
at

the

see

for

the

and

likely to be in

when
this

the

in

bread

land

We

of

whole prosperous.

mand

for

Their

manufactures

This announcement is not

our

the

lines

formed

plenty,

and

one

era

passed

started.
lines

If

and

we

a

new

have

ever

again, and there is no real
why we should, you and
likely to be in them.

I

are

Fact

number

two:

Most

management in a highly regulated
business does not make me appre¬
hensive

on

telligent
vision

this

and

and

it

score.

Given

competent
be

can

a

remain unsold.

goods

This

setback

would

in
the long
run
blessing in disguise.
employment
resulted
in

the power of trades unions to dic¬
tate costly

controlled goods and of many con¬

form

is beyond the reach
The de-rationing

trolled goods
of most

people.

of woolen clothes has failed to re¬

flood of demand. Indeed,
people who in the past
bought up to. the limit of their

sult in

a

many

prove to be

Full

wasteful

the

employment,, owing

tive factor not

only for the public
generally but for the owners of

business

itself.

that in

large part of American
today management and

a

business

control

even

We

represents

form

of

which

various
an

Fact

number

(Continued

three:
on

page

has

now

ration.
has

to

or

be

wasted.

A

change

in

no

Lack of

resulted

purchasing power
"rationing
by

in

purse."

disinflationary policy
PINEHURST, N. C.—Thomas C.
is every likeli¬
hood of growing unemployment Darst, Jr., has become associated
this year.
For this reason many with Reynolds & Co., Reynolds
checked

members

Prospectus

may be obtained in any State in which this announcement is circulated from
only such
of the undersigned and other dealers as may lawfully offer these securities in such State,

HALSEY, STUART &, CO. INC.
COFFIN & BURR

DICK & MERLE-SMITH

INCORPORATED

HALLGARTEN & CO.

there

the

of

all in favor of

government

are

reversing the policy

pursued by Sir Stafford Cripps.
They would like to increase the

purchasing

The

Thomas C. Darst With

Reynolds & Co.

.

Unless the

is

Price 100}i% and accrued interest

unnecessarily amount of time

it

•

Due March 15,1974

be

longer consider the balance of power in favor of
necessary to buy in a hurry, the employers would go some way
since they are in a position to towards
'introducing
healthier
buy at any time. This is the rea¬ conditions in industry.
son why the government feels it¬
self justified in continuing to de¬
coupons,

Twenty-Five Year 3% Debentures

to

regulations

large number of hands has to
employed for various purposes,
an

England

Telephone and Telegraph Company

unnecessarily

power

of

the




Building,

Winston-Salem,

Mr. Darst

Thomas

was

Darst

public Greensboro

N.

C.

OTIS & CO.

E. H. ROLLINS &, SONS

(INCORPORATED)

INCORPORATED

WM. E. POLLOCK

formerly partner in
and

Company

and Pinehurst.

of

&,CO., INC.

BURR &

COMPANY, INC.

STERN BROTHERS&CO.

WEEDEN &CO.
INCORPORATED

March 24,1949.

some¬

management is clearly indicated.

$35,000,000

Dated March 15,1949

realize

must

thing entirely different from own¬
ership.
Some outside check on

to government. There

terms, not only in the
high wages but also in

of

under

a

in¬

super¬

construc¬

should

partly due to the fact that the
most urgent pent-up wartime de¬
mand for them has been more or
less satisfied. But the main rea¬
son is that the price of most un¬
is

busi¬

and

big business particularly
is going
to be supervised -and
regulated in the public interest.
My own experience as a part of
ness

ment.

hold

one

bread

reason

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

New

in

when

Herbert Hoover organized the Re¬
construction Finance Corporation,

de¬

Spending by the consumers alone go a long way towards pre¬
has fallen off very considerably. venting a real slump.
Moreover,
Restaurants, theatres, cinemas are the teachings of Keynes have not
no longer crowded.
The turnover been forgotten altogether, and, if
of goods in the stores has slowed and when the government should
down considerably. The supply of be faced with a real
slump, the
unsold luxuries is accumulating. policy of disinflation would be re¬
There is not enough money to pay placed by a policy of reflation.
To a large
for them.
Even essential house¬
degree, a moderate

as

econ-

thirties,

an

The

on

your

might

that when

collapsed

omy

go to
Review"

Nineties

mine.

well realize

Mother"
or

back to the world

come

it is and is

times

With

Theater

"Gay

and then
as

"Life

Empire

ma¬

are

of

—

the

exceeds the supply;
high in spite of their

un¬

those who think they
the hands of time

are

turn

some

bring

can

still
are

the

Then

trade

prices

is

policy

businessmen

who

of

probably rosier in
retrospect than it really was.
If
you have a nostalgic yearning for
the days
of.McKinley or even

mainte¬

and welfare of the individ¬

sion of the

<

can

the

increase of un¬ other was an appraisal of the same going to change in the twinkling
through a rever¬ property. It was factual and dull, of an eye shortly after a certain
policy of de-rationing. and led to somewhat different con¬ Tuesday in last November. But
scale unemployment, a deteriora¬
The prospects of export trade clusions. When I ribbed him a bit even if the electorate had ratified
tion of Britain's trade balance and
are- viewed
with
growing con¬ he said, "In one case we are sell¬ the findings of the pollsters in¬
a marked setback in her economic
cern.
It is feared that German ing hopes and dreams that may be stead of
deciding it for themselves,
recovery.
and Japanese competition will ac¬
realized.
In the other we are as¬ it would not have
changed the
Beyond doubt, there is now a celerate the
disappearance of the sembling facts and drawing con¬ fundamental situation.
We have
distinct tendency towards unem¬
sellers' market, and that the over¬ servative conclusions."
that on the authority of the de¬
And, he
ployment in particular branches all balance of visible and invisi¬
said, "Incidentally, you can have feated candidate for the Presi¬
of industries and in particular dis¬
ble foreign trade of Britain which as many copies of the prospectus
dency and also the more influen¬
tricts. While generally speaking has
only just been achieved will as you want for nothing, but the tial of the Republican elder States¬
the demand for labor is still in
give way to a deficit.
What is appraisal costs somebody several man, Senator Vandenburg.
excess of supply, many industries
worse, it is feared that the existing
hundred dollars."
;
The fact is that this change in
are curtailing their activities
and deficit on trade with hard cur¬
I shall dream no dreams with
our
fundamental pattern of life
have to dismiss many thousands
rency
countries
will
increase.
you nor paint ypu any visions,
was the result
of the inexorable
of employees. In theory these un¬
Apart from the direct effect of a shall state
simple facts and on?the march of events. It was not caused
employed could easily be absorbed fall of exports on
employment, basis of those facts make some
by any individual and it is not go¬
-by industries in which scarcity of the need to curtail raw material
suggestions. The facts will be so ing to be changed by any individ¬
labor continues to prevail. In prac¬
imports through lack of foreign obvious that I am sure
Do we like it?
you will ual.
Personally
tice it is not easy to induce people
exchange might also cause further say to yourself:
"Why, I know do not. I dislike the rules, the re¬
to switch over from one kind of curtailment
of industrial produc¬
that."
And
yet
many
sensible strictions— the regulations,
employment to another, so long
slump which will result in large-

a

about

and

Government Responsibility
Expanded

con¬

same

those

are

device

ema¬

cerning

But, then, the choice

Most of

caused not

are

two docu¬

his office

James A. Fulton

not facts at all.

by
ignorance but by the disregard of

nating .from

j

were

difficulties

with

.

ments

be

out.

large

a

estate

I had before
me

popu¬

seems

the

concern.

so

ruled

edly pessimistic about the imme¬
diate prospects.
It is now freely
asserted that we are on the eve of

mine,

real

elec¬

may

friend

a

v-,

mistake

general

fun<£

some

head of
vi-

on

For, if the
purchasing power of the consumers
is increased the supplies of de¬
rationed goods would disappear
very quickly, and the government

mm ^

change during

of

"postwar
loans im¬

this difficult and risky.

the

on

^Stock

■

the

of

(compulsory
taxpayers during the
war) and war damage claims. But
the fact that they have embarked
on a policy of
de-rationing makes
posed

sult of the set-

.back

had

credits"

a

impossi¬
As

repayment

effectively conducted.

subject "An Appraisal." Now an appraisal cannot be oratorical, which
is fortunate because I am no orator.
Appraisals, as I have known them, are collections of
simple rather obvious facts followed by an almost equally obvious conclusion. I
recently
with

slump was
•most unlikely,
-if not

Until quite

compete with private business when

<

I have called
my

but

sumed in Britr

•

9

•Asserting pattern of government in relation to business and individuals has changed in last two decades
and our thoughts and actions must be adjusted to this new
era, Mr. Fulton urges: (1) more supervision
of government; (2) permanent organization to
study how government is spending money; (3) constant
and incessant campaign for clarification of rules
relating to conduct of private business; and (4) gov¬

as

recently it

(1289)

President, Home Life Insurance Co.

depression.

severe

CHRONICLE

By JAMES A. FULTON*

Noting distinct tendency toward unemployment in some British
industries, Dr. Einzig lays it to disinflationary policy of Labor Gov¬
ernment.
Says prospects of British export trade are disturbed by
potential German and Japanese competition, and raw materials
imports are hampered by lack of foreign exchange.- Foresees, how¬
ever,

FINANCIAL

Meeting Changed Pattern of Government

By PAUL EINZIG

LONDON, ENGLAND—The extent

&

Govern-

39)

-

10

COMMERCIAL

THE

(1290)

of

agent
Bank

NEW OFFICERS,

said:

1941, and a class
1939, has beeri
appointed by the governors of the
Federal

York

New

Wil¬

that

..announces

of

Co.

of the bank's of¬

liam P. Morgan

fice at 18th Street and Fifth Ave¬

promoted

been

has

nue

As¬

to

charter, the account—still alive—
amounts

career

Phenix National Bank & Trust Co.
and

Manufacturers

with

came

Trust Co. at the time the two in¬

stitutions

merged in 1932.

were

of

si:

si!

:]:

J.

rated, confirmed on March 22 that
Mr. William A. Mitchell has ac¬

,

cepted

invitation

an

I President

City

depositors

80

on

the Bank for Sav¬

ings, New York's first savngs bank
has grown so that today it serves
over
200,000 depositors through
its three offices.
A fourth office,
to

Trust

Company of Cincinnati on May 1,
and adds that it is with great re¬

later this year, is under

open

construction

Avenue

Second

at

of Mrs.

election

Guarantee
nounced

Co.

Trust

&

Helen

L.

trustee of Title

a

as

an¬

was

March 17 by Barnard

on

change in the

of

Bank

National

Bernardsville

of The

name

Bernardsville, New Jersey, to the

Bank

National

Ilills

Somerset

of

Comptroller of the
Currency. The bulletin also made
bank

known that the

increased its

to

March 9

on

capital from $130,000

by a stock dividend

$325,000

and further increased its common

to

According
available records, the naming

capital

of

Mrs.

Buttenwieser
of

election
of

board

the
the

marks
to

woman

a

prominent New York

a

commercial bank.
Mrs. Buttenwieser is a member
of New York law firm of Lindau,

$325,000 to
$500,000 by sale of riew stock.
from

stock

•

si:

❖

Clark, V.-P. of the
Corn
Exchange
National
Bank
and Trust Company, Philadelphia,
George

will

of

charge

assume

'

all

ti

o n s

opera n d

a

the

bank,

in

f

c

personnel

1936, Mrs. Buttenwieser's legal
has

covered

e

in

i

t

efv

March

considerable

a

involving extensive activi¬
ties in the fields of charity and

philanthropy in addition to her
practice of business and corpora¬
tion law.
She formerly was asso¬
the

H

e

Philio

firm

the

of

member

a

Robbins

Hendricks,

&

and

-

»

V"

'

•

H*-

T.

he

1943

to

in

serve

office

of

Scientific and Research Develop¬

has

been

ment at Washington, D. C/ Re¬
turning to the bank at the close of

appointed assistant general

man¬

the war, he was elected Assistant

the

of

agent

Commerce,

Canadian Bank

New

York

of

of the bank at its head of¬

ager

fice, Toronto, Canada. Ernest H.
Mitchell, V.-P. of the Canadian
of

Bank

will

senior
'

.

Mr.

(California),

Alexander

as

appointed

*

James

!j«

•

•.

7"..

Felt, President of James

Co., Inc., has been elected

of

New

in

*

Kenneth

Edward B.

York, according to

In 1819, when

«jh

H»

■;

for

a

new

the Bank for Sav¬
was

account was opened

born

baby,

John

Only two deposits

Thorne.
ever

an

S.

were

made; $10 in 1819 and $5 in

1820.

month

on

the

Temple, President of

vania

March 12 at his home.

A

was

'

old.

years

He

130th anni¬

77
<"

*■

native of Delaware County,
graduated from Swarth¬

was

College in 1891,
of

the

late

as

a

class¬

William

Gov.

Sproul.
had

He

President

been

of

the

Swarthmore

bank

30

years

and

of the oldest

active

was

one

for

bank

presidents in Pennsylvania,
according to the Philadelphia "En¬
was

taken.

of the Bank for Savings'

versary

The Keystone National Bank of

Pittsburgh,
March

Akron

Life

(Ohio) Sav. & Loan
Ins.

Co. of Virginia

Manhattan Life Insurance Co.

State-Planters

Insurance

Bank

&

Tr.

~

Richmond, Va.

17

Pa.,
its

announced

on

into another
field of commercial banking by
the appointment of R. Kenneth
Gollings as Assistant Cashier, in
charge of : the bank's new time
loan

Rochester American

has.

entry

department.

Mr.

been, associated

Gollings

15

of

Security

Washington,

&

C„

D.

serve as Manager of the
Woodley Park branch to be

new

opened

at Calvert Street and

soon

Connecticut Avenue, N. W.
President Daniel W. Bell, in an¬

nouncing this added that J. Ever?
ett White will succeed

with

the

Earl
tant

W.

Leach

Manager

Park branch.

Birgfeld

tion

at

will

of

He

credit

during the past six
was
previously with
si:

Kenney & Powell

Warren

Springs,
Chairman

F.

*

4=

'

•

Whittier, of Chester

Pa.,
and

has

,

;been

Federal

named
Reserve

No

the

/V

Conroy,

Execu¬

rency.

Com¬

is being trans¬

named

Department

Navy

in charge of Robert P.

Talley as
manager and Horace S. Cammack,
Assistant Manager.

si:

The City

C., has

D.

ton

M.

Blomquist

the

from

started

been

the

of

of directors,

March

12

it

in

Bank

Wash¬

of Directors

of The

Company,

Cincin¬

March 22

on

the

made

fol¬

The Com¬

i

Past

and

sociation
former

Chairman

Southern

of

of

Foreign Trade As¬

Chairman

of

California,
Foreign

the

Commerce section of the Los An¬

geles Chamber of Commerce, and
Vice-Chairman

National

of

the

Harbor,

Foreign Commerce and Shipping

increased

Committee.

$500,-

■

>

were

$627 million under

year ago,

by $2,338 million

or

during

■

The total assets of national banks
than

more

billion,

$88

March 18.

on

27.03

the

of

Currency

Preston

The returns covered 4,997 active national

the United States and

possessions.

billion

The assets

were

nearly

<e>-

than

million, which included loans to

reported
5,004

those

by

Percent¬
was

Dec. 31, 1948 amounted to

on

Comptroller

while net.

11%.

of loans and discounts to total assets at end of year
compared with 24.29% a year previous.

farmers, advances to brokers and
dealers

the

banks

of

as

the

others

and

for

the

pur¬

of purchasing or carrying se¬
curities, and loans to banks, etc;,

pose

were

in the

29%

up

The

year.

call, but were
$300

million

27.03, in comparison with 24.29 in

Du-

less

some

s,

previous

than

1947.jp

responsi¬

The

the

of

i t

esidency,
the
position

s

1
on

3

Dec.

Preston Delano

These investments

has

held

amounted to $81,648

more

than

crease

Board

giv

and

With

an

in¬

$2,648 million since June

en

A

Mitchell

recent

officer

and

as

ad¬

counselor-

Included

1947.

December
William

con¬

executive

viser

of

million

1948, but $627 million less than in

years.

careful

31, 1948 aggregated $34,980 mil¬
lion, which is a decrease of $3,845
million,
or
10%,
in the year.

19 4 8

1,

deposit figures

in

the

demand

are

deposits of individuals, partner¬
ships and corporations of $47,005

which

million,
million

$1,075

increased

since June,

million

in

$1,801

but decreased

the

and

year,

time deposits of individuals, part¬

these

7

banks

nearly $3 million
obligations) on Dec.

guaranteed

the

of

by

tions (including

■

depos-

banks

r

the

in
United States Government obliga¬

as

7

7

1947.

Investments

Dec.. 31,

duties

bilities

December

by the

ported

ago

re¬

of

an

President

the board of the

year

5,011 banks

22

interna¬

percentage of loans and discounts
to total assets on Dec. 31, 1948 was

the

for

an¬

local

loans increased

he be relieved

he

in

known

Deposits at end of 1948

requested that

P

Los

was

14

of

Presit,
Mr.

months

and

March

on

and

depart¬

Bank

W.

n

e

Capital

foreign

tional trade circles* Riedlin is Past

on

'7"7j7

Austin, Texas,

the

California

.

Well

June 30, 1948,
the
date
of

lowing announcement:

pany's

7

of

7 National Bank Assets Exceed $88 Billion 7

$3

nati,

^

its capital on March 10 from

more

Trust

announced

.

the

stock

new

au¬

ington, D. C.

of

16.

"Constitution" of March 13.
;":7;7 77^

Otfice

by Frank L. King, Presi¬
dent, following the regular month¬
ly meeting of the board of direc¬
tors.;,.
777,,;'7';.:.7;*:7 7.
'v ■

Cocke, Presi¬
to the Atlanta

dent,; according

the
":!:

*'

nounced

Erie

by

its

Vice-President

of

of

Angeles,

the

National

Fulton

was

increased

of
K:

Assistant

ment

Bank of Atlanta, Ga., by the board

banks in

Board

bulletin

Manager

Virlyn B. Moore, Jr., Atlanta
lawyer, has been elected a trust

Delano stated

Central

Calif.,

March 4 from $750,000
it is learned from the

Appointment of Gustav Riedlin

1933.

in

Minneapolis "Star" of March

officer

si:

Comptroller of the Currency.

to

was

from

taken

was

Minnesota

p u

the

He

which

1926,

Northwestern

above

by
the
office
of the
Comptroller of the Currency to
open
a
branch office at 3839

E.

on

weekly

Vfith the old Mounds Park
in

Na¬

advances

and

Vice-Presidency.-

Bank

State

thorized

Avenue, N.

Jose,

capital

❖

of Washington,

Bank

Washington,

San

to $850,000,

St.

of

*

stock the First National Bank

new

of the

Bank

elected

Through the sale of $100,COO of

He succeeded the late Fen-

age

d

President

State

been

Mercantile

tional Bank, Dallas, Texas.

of

Paul.

the

of

changes in the official fam¬

has been

si:

has

posi¬

latter office will be

The

Nichols

L.

director

a

77 7■ :7-77 7 7'777;7;77'

Northwestern

>!:

*!«.

H.

..Walter V. Dorle, 41, who started
his banking career as a messenger,

77''

Woodley

$1,000,000, it is learned from
weekly bulletin of the Office
;,the Comptroller of the Cur¬

of

ily, other than those mentioned
above, are being made.

as

Assis¬

be

the

He

the

branch.

objectives in mind
the Board will request the Com¬
pany's shareholders, at a meeting

nerships and corporations of $18,828 million, which were $3 million
less than in June, but $64 million

to be held

more

total
at

assets,

the

end

were

compared
of

1947.

39.69% of

43.90%

to

Other bonds,

securities of $5,248
which included obliga¬
tions of states and political sub¬
divisions of $3,190 million, were
$64 million more than in Decem¬
stocks,

and

million,

ber

1947/

Cash of $1,041

with

Federal

million,

Reserve

reserves

banks

of

$13,382 million, and balances with
other banks

in process of

(including cash items
collection) of $8,601

total of $23,024 million,
increase of $948 mil¬
The unimpaired
the
office of Chairman
of
the ernment* of $1,502
million were
capital stock of the banks at the
Board
of Directors.
When
that $602 million more than at the end
end of
1948 was $1,829
million,
action has been taken, Mr. Dupuis of the previous year; deposits of
including
$24
million
of
pre¬
will
immediately
be
elected states and political subdivisions ferred stock.
Surplus was $2,511
Chairman and will resign from amounting
to
$5,231
million
million, undivided profits $1,009
showed an increase of $505 mil¬
the Presidency.
million and capital reserves $322
lion in the year, and deposits of
Thereupon the Board will elect
million, or a total of $3,842 mil¬
banks of $"7,843 million were $568
as
lion. Total capital accounts of $5',President, Director and Chief
less
than
in
^December 671
Executive Officer, Mr. William A. million
million, which were 6.95% of
1947,
Postal savings deposits of
Mitchell, who is now Director,
total deposits, were $250 million
national banks, which show little
Vice-President and Member of the
more
than at the
end of 1947
Executive
Committee
of
J.
P. change, continue at nearly $3 mil¬
lion, and certified and cashiers when they were 6.59% of total de¬
Morgan & Co'. Incorporated, New
checks, etc. were $1,236 million.
York.
posits.
V 7.
;/.;7.;;/7'7;/v,;^ 7',.
authorize

by them

the

on

April 28, to

Directors

to

create

fice

with

J.

P.

Morgan

&

Co.,

with which institution he has been

identified

since

in

1925, becoming a
1939.
Previously he

connected

Bank of

with

Canada—for

The
a

Royal

time

as

a

senior officer of the Paris, France,
Branch and later at the. head of¬
fice

in

Montreal

in^'the

supervi¬

sion of Branches in South Amer¬

ica, Europe and New York.
of the
ers

most

One

widely known bank¬
of the country, Mr. Mitchell' at

than at the end of 1947.

posits of the United States

7/7/;7;;;i;7^f.

Mitchell will resign his of¬

Mr.

was

department

000 to

Through the sale of $500,000 of

his managerial

from

ferred

partner

consumner

M.

:

a-member of the Executive

mittee.

Secretary of the bank.

Peoples First National Bank and

Colonial Trust Co.




Co.

Trust Co. in its

years.

NEW YORK

March

on

dent of the American

has

quirer" from which the above

.

This

Birgfeld

ing Mr. Dupuis' wishes and of
retaining his valuable services as

mate

ings in the City of New York

chartered,

v

Pa., and a retired
engineer of the Pennsyl¬
Railroad, died suddenly on

more
.

*

Thos.

Mr.

The

*

sideration to the problem of meet¬

bank.
Hv

*

the Swarthmore National Bank of

he

,

❖

,

as

of

Association

elected Assistant Vice-Presi¬

was

The

❖

.

Reginald Roome, President of the
■

January, 1946, and V.-P.

April, 1947.

chief

trustee Of the Excelsior Savings

Bank

V.-P. in

the

City Bankers,

renamed

class C director.

a

Swarthmore,

agent in New York.
//*

Felt &
a

Commerce

succeed

1949.

Sharoles, Chairman of
the Board of Sharpies Corp., was

Chas.

resigned

the

senior

In

1937.

of

HfV.;.v.uHy,

■

of

T.

an

Cashier in

Butten¬

Alexander,

was

Assistant

George R. Clark

William

1934,

elected

wieser.
'

of

Ex¬

Corn

t o b e r,

(formerly
known
as
Cravath,
deGersdorf, Swaine & Wood) and
was
prior to joining her present
firm

staff

change in Oc-

Swaine & Moore

firm of Cravath,

balance

suc¬

21,

joined

e

the

law

downtown

yean

Chair¬

Deputy

as

the

for

man

The

the

with

last

Canby Balderston, dean

ceed. Whittier

1949.

range,

ciated

a

of the

versity of Pennsylvania, will

R.

Robbins, Buttenwieser & Backer.
Since
her
graduation from the
New York University Law School
work

Reserve Board

C.

Dr.

the

Townsend, President.

first

System to fill
Chairman

and will

A

Office of
The

Federal

Trust

and 23rd Street.

gret that J. P. Morgan & Co. In¬ Bernardsville, New Jersey became
corporated accepts Mr. Mitchell's effective on March 9. According
to the March 14 bulletin of the
decision.

Buttenwieser

Reserve

of the Wharton School of the Uni¬

room

in

House

Alms
with

Park

opening day,

become

to

Central

The

of

basement

front

its

Old

the

Hall

of

post left vacant since Thomas B.

oldest

savings account in New York.
in

present time is also serving

President

since

McCabe became

,

George Whitney, President
P. Morgan & Co. Incorpo¬

Mr.

is

Thorne account is the

The

From

Morgan began his banking
in 1925 with the Chatham

this,
$4,295.24,
Of

$4 310.24.

interest

compound

sistant Secretary.
Mr.

to

"7;;V'!';7'-t;VVV7 j

'

;

director

C

Trust

the

tive Vice-President, will continue
to serve in that capacity and as

Chairman since

CAPITALIZATIONS

Manufacturers

Reserve

Whittier, who had been Deputy

Bankers

and

REVISED

Federal

Reserve

also

ETC.

the

Philadelphia for the re-!

Thursday, March 24, 1949

ning Bulletin" of March 19, which

CONSOLIDATIONS
BRANCHES

of

CHRONICLE

FINANCIAL

maining portion of this year ac-1
cording to the Philadelphia "Eve-;

News About Banks
NEW

&

De¬

Gov¬

Loans and discounts at the
of 1948

were

net loans were $2,338 million, or
nearly 11%, over the amount re¬
ported as of the end of 1947.

of

industrial

and

$11,564 million

5%

in

estate

the
of

were up

loans
million

year,

$5,564

loans

nearly
real

on

were

loans to individ¬

uals

million

$3,790

were

lion

in

an

the year.

Kenney & Powell Offices
In New Location
Kenney & Powell announce the
removal
Broad

of

their

offices

to

41

Street, New York City.

Alfred Borden Dead

up

14%, consumer
of

a

showed

end

$23,818 million after

deducting reserves of $234 million
for
possible-, future losses.
The

Commercial

million,

up

21%, and all other loans of $3,134

Alfred

Borden, E. F. Clucas &

Co., died at the age of 73 after a

long illness.

;

Volume

169

Number 4788

THE

COMMERCIAL

'•

"

LETTER TO THE EDITOR:

'

&

FINANCIAL

CHRONICLE

land

of

Span¬
ish
speaking
representative
of
CHADE."
In July, 1947, such a

the

ciete

decree

published, practically
preventing CHADE from function¬
ing in Spain.. According to the
London "Statist," "Juan March or

Spain' and that they should con¬
sult him concerning the terms of
this return.
He
had
previously

his

directors

phoned

Mr.

to

confirm

to

March

Madrid

in

this threat

to

to keep a watchful eye on
meeting. He had previously
told the CHADE representatives

a

-

Spain's Attack on
Foreign Investments
Commenting

agitation for admission of Spain into the United

on

Nations and for financial aid

to

Franco regime, Elisha M. Friedman,

have

spokesman

tacks

the

on

signed

told

enable

to

repre¬

him

control

by

foreign

a

owned

utility, and in fostering attacks on CHADE, an affiliated
utility holding company, largely foreign owned. Holds, before
Spain's admittance to U. N. should be considered or any financial

,

aid
♦

Jan.

tive

be reversed.

*

♦

,

" *

'

.

'

•

utility

them

Juan March Would Seize Foreign

Utility

the

company,

Barcelona

When

March's

would

demands

were

It

refused, he

ration."

Light

the

ports

proceeded to buy up
sterling bonds of Barcelona
Traction, which were greatly de¬
(BTLP).
To pressed in price by government
this
end
he
policies. Though the company had
also
harassed
earnings in
pesetas
practically
the Compania seven times the
charges required
Hispano by these bonds, the company was
and

own

of

Argentine company
from a Spanish to a Luxemburg
holding
corporation
(SODEC).

dustry

and

the

to

this

the

endorsement

f

companies

were

accord with the

the

State."

New

was

last

the

the Minister of
Commerce had

In¬
re¬

jected

the company's extremely
generous proposals.
At the Lux¬
emburg meeting, the stockholders

meeting in

by unanimous vote, put

on

record

the

fact

by the
meeting was

the

company

suspended by court order and by

der

police

proce¬

Yet the Spanish Government now

dure is without precedent in other

tries to take advantage of its own

countries."

arbitrary

on

(ordered

company

the

interference.

Such

Libre"

Cote

("La

of

"The

the

that

its

decree

directors

knew

that

the

dissolution of

CHADE

to

be

by the stockholders.
Therefore, it was clearly useless
to

call

for

another

stockholders'

of

re¬

stockholders

the

and

new

liqui¬

under

on

modern

them

no

the

company

constitutions,
post facto

ex

be passed.

"The Tax Bureau of Madrid in¬

26

both

the Paris
"Agence Economique et Finan¬
ciere," "This Spanish Minister met
in Madrid in May, 1948, with rep¬
resentatives of
the
majority of
says

claims

and

The

taxes

law may

in Spain.
Thereupon,
non-Spanish directors of
CHADE representing a majority,

higher interests of

1947.

Spanish Gov¬
attempt to impose re¬

all

violates

meeting
the

taxes.

troactive

ratified

Spanish

July,

and, in addition, levies

the

ernment's

that all

of

decree

dation

the

of

troactive taxes which are not due,

Spanish authorities did not wish

re¬

dissolution

the

had been imposed
Spanish Government un¬

by the

Brussels.)

to be managed to

Then

Spain

the dissolution

the

and

of

Finance

stockholders'

a

government),

that all corporate actions required

Minister

call

of

"provided

decree

the

Madrid to vote

corpo¬

The London "Statist"

that

of

Taxes- -A

dissolution

This

after

shares

in¬

to

ruse

to

Wrinkle

resort,

which

of

transfer

to

a

to return to

able

Retroactive

CHADE

plot, the
shareholders of
the

share¬

paralyze

action

be

this

decided

been

have

to

as

so

"When the CHADE board decided

rules

made

completely

freedom

Traction,
Power

their

against

holders.

make

way
for
approved by him."

circumvent

CHADE

Higher Interests of the State"

foreign-owned

to

controlling

V
The Spanish Office of Cultural Relations in Washington has been
publishing propaganda pleading for recognition and admission into
The decree of July 17, 1947, reg¬
the U. N. Among the claims made are that "Spain respects foreign ulated
Spanish companies. As "La
property." At the same time Juan March, with the aid of Franco's Cote Libre" of Brussels writes:
;
.Government,^
"This decree states the Nazi prin¬
is
attempting and has contributed greatly to the ciple that a special law is required
to take over a industrial development of Spain. for
Spanish companies to protect
private

persons

;To

the

in

board

"Escape to Freedom" by

of Juan March."

Managed

These promises

trap the for¬
eign investors later. ....7,7
'

other

26,

"Companies

..V '

promises to give favorable treat¬
ment to CHADE.

repre¬

CHADE

.

Editor, Commercial & Financial Chronicle:

,

duce

1949, F. Terlink, "The
decree
of
July 17, 1947, which
compelled
CHADE
to
go
into
liquidation was due to the initia¬

extended, her policy of confiscating foreign investments must

\

Franco Government made solemn

Spanish

particularly

*

Yet, in order to induce CHADE
to return to Spain from Luxem¬
burg after the Civil War, the

present

Traction."

Barcelona

of

to

to

Again, according to the Chairman
of the CHADE annual meeting on

individual of the Barcelona Traction Company,

an

certain

(Luxemburg) or So¬
(London

d'Electricite"

"Statist.")

seem

obtain

to

that
and

return

must

SODEC

11

sentatives of certain Spanish banks
would
have to resign from the

de¬

were

company

'CHADE

demanded

that the at¬

of CHADE

calls attention to action of Spanish Government in allowing seizure

.J

that

was

sentatives

Consulting Economist, and Chairman, Econometric Institute, Inc.,
'

(1291)

*

'

•

formed

the

company

declared to be in

of

a.

that it was

state of disso¬

the
board, called a meeting in lution, pursuant to a decision of
the interest in ster¬
the Cabinet, and the Minister of
Luxemburg
which
unanimously
ling because the Spanish Govern¬
and Commerce stated
ratified the action of the board in Industry
(CHADE), a ment ceased to approve the neces¬
that CHADE was dissolved 'for
foreign-owned sary exchange transfer from pe¬
dissolving
CHADE.
~ For
each
holding company affiliated with setas to sterling. However, thougri CHADE stockholders. Juan March share of stock of CHADE (Spain), tax, purposes.'"
("Journal
de
the same group. These two utility other
(Continued on page 38)
Spanish nationals were sub¬ returned to Madrid from Switzer¬ stockholders received one share
companies and their affiliate, ject to foreign exchange restric¬
Sofina, have widespread interna¬ tions, March still seemed able to
tional
banking connections, in¬ obtain sterling currency and hold
cluding:
Societe
Generale
and sterling bonds.
Banque de Bruxelles in Belgium;
This announcement is neither an offer to sell nor a solicitation of an offer to bun aniJ of these Shares.
Thereupon Barcelona Traction
Banque Internationale de Luxem¬
The offer is made only by the Prospectus.
proposed to its sterling bondhold¬
bourg in Luxemburg; Banque de ers a
plan of compromise which

Americana

de

unable to pay

Electricidad

Elieha M. Friedman

Paris

des

et

Pays-Bas

J.

and

P.

Morgan & Cie, in France; Credit
Suisse

in

Switzerland; Midland
Bank, and J Henry Schroeder &
Co., in England; Bank of London
&

South

Bank

America, First National

of

Boston

Provincia

in

and

Banco

de

la

Argentina; Canadian

Bank of Commerce in Canada and

Guaranty Trust Co. in New York.
The

attacks

these

on

two

for¬

eign-owned utility companies in
Spain has been the subject of ex¬
tensive comment b,y newspapers
and financial journals of Europe—
in London, "The Times" and the
"Statist"; in Brussels, "La Cote
Libre"; in Paris, the "Agence
Quotidienne" and "Agence Economique et Financiere"; in Gene¬
va,
the
"Journal
de
Geneve"
and in Zurich, "Le Bulletin Fi¬
nancier Suisse," "Finanz-Revue"
and

"Finanz-Wirtschaft."

cause

celebre in international in¬
affairs

vestment

has

This

been

hardly

noticed by American financial and

business
But

magazines.

Spain

Confiscates

Foreign

Some spokesmen for Franco now
are

urging

our

government.

ress

can

a

friendly attitude by
Yet

prog¬

be made toward such

operation

while

ministers

follow

and

little

Franco
such

confiscatory

and

Juan

looked

darkest, March seemingly
conceived the idea ; of acquiring
the assets in Spain of the foreignTraction.

He

thereupon notified the controlling
stockholders that he wanted their
company.

:

Barcelona

The

installed

total

capacity,

has

a

was

more

than

$300,000,000.

built up almost

foreign

capital

engineers

over a

and

It

entirely with
by

foreign

period of 30 years




ster¬

a

new

49,850 Shares

Scovill Manufacturing

(owning no stock)
three-fourths
of

•

[par

de¬
the

Foreign

':;77'

share)

June 1,1959

issued by the Company to its holders of Common

Stock, which rights will expire at 3:00 o'clock P.M. Eastern Standard
Time

Attacks

per

Rights, evidenced by subscription warrants, to subscribe for these
shares have been

bonds."

new

value $100

Convertible prior to

equity and three-fifths of the new
bonds,
leaving
to
the
present
shareholders
(owning
all
the
stock) the remaining one-fourth
of the equity and two-fifths of the

March

Company

4.30% Cumulative Preferred Stock

company

on

April 6,1949,

fully set forth in the Prospectus.

as more

Holding

Company
To

obtain

such

control

Subscription Price to Warrant Holders

March

thereupon conceived the idea of
attacking the CHADE Company
in

order

group

to

now

Traction.

the

coerce

$100

affiliated

has

Share

controlling Barcelona

property there,

any

but

The undersigned several underwriters may offer shares of Cumulative
Preferred Stock acquired or to be

and

of

the

CHADE

England,

Canada,
Switzerland,

France,

United States.

Only

a

once

the

underwriting

in twenty-four hours and which will be not less than the sub¬

over-the-counter

Belgium,

dividends and

the

an

market

more

than the highest known

by

other

security

plus

dealers,

accrued

amount

as more

small frac¬

tion of CHADE shares, about
are owned in Spain.

to

price at which the Cumulative Preferred Stock is being offered in the

owned

and

pursuant

scription price set forth above and, not

Barcelona
are

or

agreement, at prices which will not be changed more frequently than

was

of an operating utility
serving Buenos Aires, Argentina.

securities

acquired by them, either through

purchase and exercise of rights,

the owner

in

a

and Accrued Dividends

The Barcelona Traction,

equal to any concessions allowed dealers, all
fully set forth in the Prospectus.

15%.

March's

strategy was carefully
In April and May, 1947,
during
negotiations
concerning
BTLP, he threatened that, unless

planned.

an

agreement

with- him

Copies, of the Prospectus

t

signed

as may

may

be obtained from only such of the under-

■

'

legally offer these Shares in compliance with
respective States.

the securities laws of the

was

reached, the Spanish Government
would pass legislation inimical to
CHADE. The Agence
Economique
et Financiere of

for

MORGAN STANLEY & CO.

Paris stated that

spokesman

called

on

Mr.

March

& CO.

CLARK, DOD

G-E

.FI.SAEC

.OC&.NOTNARCS

rangement

was

reached with Mr.

March

concerning

March

could

not

BTLP,

Mr.

prevent

the

Spanish Government from taking
steps against CHADE. Mr. March's
spokesman in
New
York
tele¬

CO.

Incorporated

the CHADE representa¬

hydro¬ tive in New York in April, 1947,
to say that
unless satisfactory ar¬

electric and steam, of about 420,000
kilowatt.
The
company
is
worth

the

"a

7/

Traction

"In the

■

Traction

the fortunes of the Western Allies

Barcelona

manded

his

principal backer of Franco. Vari¬
ous
news
items, pieced together,
reveal his designs. In 1940, when

owned

Chairman.
Mr. March

co¬

March is reputed to be the richest
man
in Spain and has been the

1

eliminated

foreign exchange burden.
How¬
ever, Juan March, holder of ster¬
ling bonds, opposed"7 this settle¬
ment. He then proposed an alter¬
native settlement, reported at the
annual meeting in Toronto of the
BTLP: by
J.
Donald
Duncan,

The

destructive

policies.

have

ling debt and relieved Spain of

incorporated in Canada, has actual
operating subsidiaries in Spain,
whereas CHADE, incorporated in
Spain, neither does business nor

Investments

*;

would

HORNBLOWER & WEEKS

KIDDER,PEABODYSe CO.

WOOD, STRUTEERS & CO.
V
I

-

PUTNAM & CO.
"*

•
7
,

March 23, 19.'t9.

v

DOMINICK & DOMINICK

'

7.

12

(1292)

THE

COMMERCIAL

FINANCIAL

&

CHRONICLE

Thursday, March 24, 1949

United States Economy Depends on Foreign Trade
By DR. MAX WINKLER*

'v.:.-.'

vJ'V

Bernard Winkler & Co.

;

Holding American prosperity depends directly

,

-f'-V-V'

NSTA Notes

:"r-

foreign trade because of its marginal impact, Dr. Wink¬
ler complains of persistence of economic isolationism.
Warning against regional arrangements in the
economic sphere, he urges worldwide credit pacts for productive uses, based on currency stabilization*
on

Despite opinions in certain restricted quarters to the contrary, the prosperity of the
United States invariably increases or recedes in direct proportion to the expansion or decline

SECURITY TRADERS ASSOCIATION OF NEW YORK

in the

that the

nated

tor

country's foreign
fac-

as a

in

commerce,.
'

ica's

and

isola¬

still

IV2

tween

nation

foreign trade.
figures
the

influence
economic

of

Those V' who
adhere

to

policy of
nomic

Dr.

Max

Winkler

isola-

business, its drastic reduction

or

entire elimination could not
have too adverse an effect on the

country's economy

whole.

In
consequence, they view with skep¬
ticism any serious effort to expand
foreign commerce. They contend
efforts

the

of

pense
.

as a

appreciate

nation's

that

constitutes

.

at

are

refusing

economy,

the

ex¬

domestic

failing

or

expanded

to

trade

corresponding

a

en¬

hancement in the economic status
of the

country.and its people.

The arithmetic of the argument

advanced
ists

is

by

economic

isolation¬

accurate.

Any statistical
study will verify it.
Any book
dealing with the subject will con¬
firm it.
But economics is more
than

lions.

arithmetic.

The

tween
An

a

by foreign trade

profit

of

business

is

at which such
conducted.
If
this

percentage is eliminated

adds to these

number

of

those

or

dras¬

It is apparent that this fig¬

prosperity and depression.

unemployment population

of

Even

the

fare of the nation.

More than any

other factor or combination of fac¬

which have been advanced in

reliably

number

of

of

foreign

trade

are

irrefutable

employed in enterprises directly
identified with foreign commerce

vate

institutions.
were

character;
and

banks

Must

Be

Two-Way

Street

These

institutions

underwrote the loans and private

Attempts

made

were

withholding of
foreign gov¬

any

funding of their old debts.

Expe¬
rience teaches that the American

lending

was

the Harding Administration.

a

the transaction

of

in the view of the

State

whether

Depart¬

involved, foreign trade must be a
ment there should be any objec¬
two-way street.
Nations must
tion.
Little,
if
anything was
buy from each other if they wish
achieved by the ruling.
to sell to each other.
Unfortu¬

After

in

the

realm

of

eco¬

With

of the
way and because of the flexibility
of the Foreign Loan Policy, hun¬
dreds of millions, nay billions of
dollars

November, 1918, the vic¬

the

funding

were

the rest of the world.
of

loans and credits

quished.

or

so

United States

happened that the
was

able and will¬

The flow

was

accompanied

followed by a marked

expan¬

sion in foreign trade and a corre¬

J*An address by Dr. Winkler at

ing to furnish the capital needed

the 29th Annual Get-Together of

for the rehabilitation not alone of

sponding, enhancement in the

the Export Managers Club of New

her European Allies who had won

tion's economic prosperity.

York, March 22, 1949.

the war,

but of the defeated

coun¬

to

gold, that is, the extension of

torious Allies proceeded promptly
to repair the economy of the van¬
It

out

available

made

(Continued

on

Gustave L.

Levy, Goldman,

Ticket

Reservations—Arnold

J.

Wechsler,

Ogden,

Wechsler

&

Co.
Hotel

Reservations—Wellington Hunter, Hunter & Co.

.Auditing Committee—John F. McLaughlin, Chairman, McLaugh-j
lin, -Reuss & Company;-Joseph < J. Kirk; ' Delafield> & Delafield;

page

Worthington, Winckler, Onderdonk & Company; Irving P.
Grace, W. C. Pitfield & Company, Inc.
'
.

By-Laws Committee

na¬

When

42)

.

,

,

Stanley Roggenburg, Chairman, Roggenburg & Company; William K. Porter, Hemphill, Noyes & Company;
John E. Kassebaum, Van
Alstyne, Noel & Company; Walter F.
Saunders, Dominion Securities Corporation; Wilbur R. Wittich, Walston, Hoffman & Goodwin.
.

-

.

—

Employment

Committee
John Gahan, Chairman,
Schoellkopf,
Pomeroy, Inc.; T. Frank Mackessy, Abbott, Proctor &
Paine; Walter V. Kennedy, Coffin & Burr, Inc.

Hutton

—

&

Forum

Committee—Henry Oetjen, Chairman, McGinnis, Bamp& Sellger; D. Frederick Barton, Eastman Dillon &
Company;
Stanley C. Eaton, Bendix, Luitweiler & Company.
ton

Membership Committee—Robert A. Torpie, Chairman, Merrill
Lynch, Pierce, Fenner & Beane; C. Jerome Aal, Aal & Golkin;
Henry S. Bartold, Eastman Dillon & Company; Edward I. Becker,!
Reynolds & Company; William H. Salisbury, Union Securities Cor¬
poration.

Municipal Committee — Paris Scott Russell, Chairman, Glore,
Forgan & Company; Edward N. Ganser, First Michigan
Corporation;
Kenneth C. Ebbitt, Shelby Cullom Davis &
Company; Thomas W.
Gleason, Kirchofer & Arnold Associates, Inc.; Jack B. Hanauer, J. B.

Hanauer &

Company, Newark, N. J.

This

loan must ascertain in ad¬

vance

Kumm, Dunn & Company;

Company; Daniel G. Mullin, Tucker, Anthony & Company;
Charles O'B. Murphy,
Merrill Lynch, Pierce, Fenner & Beane;
Frank J. Orlando, Goodbody & Company; Harry J.
Peiser, Ira Haupt
& Company; Milton
Pinkus, Troster, Currie & Summers; Homer
Wirth, Mabon & Company; Theodore R. Young, Young & Gerston.

Thomas F.

them.

by the
government to regulate the flow
of foreign credits:
In February,
1922, Congress passed an Act pro¬

for

maximum benefit to the countries

William

Sachs &

largely of a pri¬
that is, private

financial

investors bought

Foreign

J.

investors, individuals

as

policy, if indeed it may be called
such, provided that any applicant

However, in order to afford

estimated
Americans

well

as

transactions

also cir¬
cumscribed by the so-called For¬
favor
eign Loan Policy laid down by

and support this thesis,

currences
on

extended large credits ana under¬

J.

Conlon, P. F. Fox & Company; Edward J. Kelly, Carl M.
Loeb, Rhoades & Company; Nathan A. Krumholz, Siegel & Company;

that oi
All required

wrote huge loans which were sold
to American

nard

more

than

former enemies.

our

times while contraction is synony¬
mous with depression. Arguments

nomics and politics.

been

impaired

seriously

much

announced

follows:

are as

& Powell; Clifford K. Channell, First Boston Corporation; Ber¬

ney

European

our

become

tors, foreign trade reflects accu¬ investor and the national
economy
rately
the" economic
state
of as a whole might have fared bet¬
affairs in the country.
Expansion ter if these debts had been for¬
w i t h
synchronizes
prosperous
given altogether.

Unemployment

the

of

matter of fact,

as

Marginal Effect

reduced,

has

had

a

United

rich and resourceful

nately, the normal flow of trade is
often stopped by wars, hot as well
as cold, and other disastrous oc¬

Jit

economy

Allies

As

$25 and $35 ernment which had not previously
States, repaid or refunded obligations
she is, can
received or held by the United
ill afford such gigantic losses.
•
States
Government
or
govern¬
It is abundantly clear that one
mental agencies.
Foreign nations,
cannot underestimate the impor¬
desirous of obtaining accommoda¬
tance of foreign trade to the wel¬
tions, promptly agreed tOfithe re¬
billion.

profit
to
American economy may be elimi¬
nated or cut correspondingly.

that

the

well.

conservatively represent a shrink¬
viding for the
in the purchasing power of financial aid to

the

tically

as

age

in rela¬

business of the nation
whole which constitutes the

margin

tries

the nation of between

economist

tion to the
as

one

in

between 10V2 and 15 millions may

contends that it is the 10% repre¬

sented

If

shrinkage

represents the difference be¬

ure

even

such

serious

or

employment would reach: 15 hiil--

a

eco¬

tionism argue: Since foreign trade
represents only about 10% of the
overall
volume of
the
nation's

that

In

normally unemployed and unem¬
ployable, placed at between 2Vz
and 3 millions, the total of un¬

the nation.

'1

million.

lions in the event of total elimi¬

to

well-being

3V2

and

t

the

mil¬

words, the country would goods and services, but most of
face a total unemployment popu¬ them were unable to pay for them
lation of between 8 and 12 mil¬ out of their own resources.
We

time, seriously
o

8V2

other

manages,

time

and

and that those employed in
enterprises
indirectly identified
with
foreign trade number be¬

persists, to a
certain degree
from

6V2

lions

eco¬

tionism

between

Security Traders Association of New York has

standing Committees for the current year

Arrangements Committee—D. Raymond Kenney, Chairman, Ken-

,

varies

foreign

nomic

Although political isolationism has been largely elimi-

-

Amer¬

policy,

The

Publicity Committee—Ernest N. Robb, Chairman, Paine, Webber,
Curtis; Alfred F. Tisch, Fitzgerald & Company; Roald A.
Morton, Blue List Publishing Company; Herbert D. Seibert, "Com¬

Jackson &

mercial

&

Digest;

Financial

Raymond

Walker, National

Chronicle"; Eliot H. Sharp, Investment Dealers
Trigger,
Investment
Dealers
Digest;
Graham
Quotation Bureau, Inc.; Louis Walker, National

Quotation Bureau, Inc.
Reception Committee—John J. O'Kane, Jr., Chairman, John J.
O'Kane, Jr. & Company; Richard F. Abbe, Richard F. Abbe Company;
E.
deWillers, C. E. deWillers & Company; Michael J.
Heaney, Joseph McManus & Company; John E. Kassebaum, Van
Chester

Alstyne, Noel & Company; B. Winthrop Pizzini, B. W. Pizzini &
Company, Inc.; Stanley Roggenburg,
Roggenburg & Company;
Walter F. Saunders, Dominion Securities
Corporation; Harold B.
Smith, Pershing & Co.; Willis M. Summers, Troster, Currie & Sum¬
mers;

Benjamin H. Van Keegan, Frank C. Masterson & Co.; Wilbur R.

Wittich, Walston, Hoffman &

Goodwin.

Sports Committee—Herman D. Meyer, Chairman, Stern & Com¬
pany; Arthur J. Burian, Strauss Bros., Inc.; Harry D. Casper, John J.
O'Kane, Jr. & Company; James A. Donnelly, Reynolds & Company;
Samuel Gronick, Gilbert J. Postley &
Company; Charles M. Kaiser,
Benyald & Company; Gerald F. X. Kane, Frank C. Moore & Com¬
pany; Lawrence A. Wren, Allen & Company.
Tax

and

Legislation Committee—P. Fred Fox,
Chairman, P. F.
Co.; Murray L. Barysh, Ernst & Company; Oliver A.
Kimberly,
J. K. Rice, Jr. &
Company; Frank E. Mulligan, E. H. Rollins &
Sons, Inc.

Fox &

This announcement is not

an

The

offer

to

sell

or a

solicitation of

an

offer to buy these securities.

offering is made only by the Prospectus,

Transportation Committee—Harold B. Smith, Chairman, Persh¬
ing & Company; Oscar D. Griffin, Louis H. Whitehead Company.
Veterans—William H. Boggs, Chairman,
Schafer, Miller & Co.;
Joseph Schrank, Shaskan & Co.; Sidney Holtzman, Marx & Co.;
George Dedrick, Blair F. Claybaugh & Co.; John E. Demaye, Sutro
Bros. & Co.; A. A. Sikora, Wm. J. Mericka &
Company, Inc.

$2,500,000

Gulf Power
First Mortgage
Dac

.1

April 1, 1949

The

Company

Bonds, 3% Series due 1979
Due

13th

Annual

Dinner

will

be

held

at

bers

are

Astoria

urged to make their reservations for the dinner immediately.

April 1, 1979
(Special

Price 100,56% and accrued interest

to

The

With Merrill Lynch Co.

Chapman

Financial

Chronicle)

(Special

CHICAGO, ILL.—Dan E. Penick
joined Farwell, Chapman &
Co., 208 South La Salle Street,

ST.

has

members

of

the

New

York

and

Chicago Stock Exchanges. He was
formerly with Fred W. Fairman
&

Co.

Day

HALSEY, STUART & CO. INC.

(Special

The

Financial

Chronicle)

Lynch, Pierce, Fenner &

Beane,
many

to

LOUIS, MO. —Morgan C.
has become affiliated with

Merrill

511

Locust
he

years

Street,

was

For

associated

with I. M. Simon & Co.

;

With

Charles A. Day Co, Adds
to

The

BOSTON,

Financial

MASS —George

Schirmer, Atherton

(Special

Chronicle)

A. 7'

to

The

BOSTON,

Ballard has become affiliated with




Waldorf

Dress will be informal.

Joins Far well,

March 24, 1949.

the

Friday evening, April 22, 1949. Dinner tickets will be $12.50 per
person, including all taxes. Ray Kenney and hi? arrangements com¬
mittee have developed plans for a most successful
party and mem¬
on

Schwartz

Chas. A. Day & Co., Inc., Wash¬
ington at Court Street, members

Atherton

of the Boston Stock

and

Financial

Exchange.

is

Chronicle)

MASS. —Robert
now

with

S.

Schirmer,
Congress

&
Co.,
50
Street, members of the New York

Boston Stock

Exchanges.

Volume

169

Number 4788

THE

COMMERCIAL

&

FINANCIAL

CHRONICLE

Taxing Ourselves
^
^ Economic Outlook
Into a Depression
/

and the Automobile
By J. R. DAVIS*

,

Vice-President, Sales

President, Commerce and Industry Association of New York, Inc.

as

business

sup¬

One factor in

and keeping overall tax levies within

expense

to be in the habit in this country, at

seem

This has

excess.

economic field.
in

happened

many

times in

times, of going to
history, notably in the

our

After the first World War in 1919

went to

we

commodity prices. In the late twenties we went to
curity prices^
t~
with

debt

the'con¬

sequent

drawn out de¬

Why did such

pression of the

that

the

of

tax

If

a cor¬

50% of its earnings
in dividends, it must earn $3.24 to

This time it is

pays

$1 in

pay

in the field of

crux

taxation.

able

total

corporate income

poration

of

This is the

dividends.

the

matter.

Is it

reason¬

to

expect investors to invest
equities when one dollar in div¬

in

tax bill—Fed¬

one-quarter times by the

local—exceeds
Hovin*

idends has to be earned three and

eral, state and
Walter

tion?

$65,000,000,000
This

per year.

is

than 30%

more

income and is

that

it

of

out of

so

proportion

is

seriously threatening
economy.
History
demon¬

our

strates

that

such

Some people don't seem to real¬

ize that 38% is too high and there
is

good

a

the

war

But

we

war

and

other

times

stance

load

in¬

when

bankruptcy the

taxes

from

disaster.

either

learn

every

They

can

by recognizing it
doing something about it,
learn it the hard way

can

after the economy collapses.,

/

•

cially evil when it hits the
of

nerve

economic

our

system;
and that is in the production of
new capital.
New capital must be
produced to keep the economy go¬

ing.

Why is this necessary? Let
get out of the realm of figures

us

and

get

down

to

human

beings.

This year, 1949, the net increase of
new

is

workers in the United States

estimated

that

I

mean

to

the

be

1,300,000.

number

By

of

boys
and girls who will be graduating
from or leaving our colleges, high

schools, and grade schools and go¬
ing to work, less those who will
die

retire.

or

Now for every person

employed
in the United States, $8,500 worth
of

plant equipment and tools must
be provided.
Simple arithmetic,
therefore, arrives at a figure of

it

the

to

war

and

it

is

equity

sponsible

It is too high

stopping

money

for

the flow of
and is largely re¬
the fact that only

$1,100,000,000 worth of

new equity
found its way into business

money

last year.
Now what

can

do about it?

we

suggestion

enact

that

is

stock dividends in the

interest.

as

should

we

In

make

climbing
tinually.
I

however, that this thing we call
"a buyer's market" is the set of

been
con¬

a

is

sales
has

force

had

with
think

that

stimu¬

lated
a

the
d

n

de-

J.

R.

for

dictions

goods, America today enjoys the
highest
standard • of
living
throughout the world.
Without

salesmen,

the

this

contribution

free

$15,000,000,000 was in¬
vested by industry in plant and
equipment.
Now
$9,000,000,000
came from debt and only $1,100,000,000 came from preferred and
common stock financing.
The rest
year

plus money for additional working
capital, etc., came out of profits
and depreciation.
In other words
business is going further and fur¬
ther
into debt.
This year with
earnings
tending
to
go
down,
where will the money come from
to put

these new workers to work,
as keep our present work¬
the job? After the first war

well

as

ers

on

over

one-third

trackage

of

bankruptcy.

of

the

America

The

to associate it with

went

*An

address

by Mr. Davis be¬

with, its

Award"

est.

this.

This

There is ample precedent for
Most utility companies are

fore

the

Controller's

Institute

of

America, New York City, March
22, 1949.




their

merely by what is
pocketbooks, but by

reconcile

We

make

is

a

term of every

with

on

them.

more

itself

to

words

tialities

the

develop

more

there is

a

announcement

those
now

than

the

and

up

try's

bound

being handled in this fashion.
preferred stock dividends
are an expense
of doing business
and there is no reason why the
rest of the business community
should be discriminated against in
this regard. If we do this, stocks
will again be in demand and in¬

ever

before

to salesmen.

the

of

country

task

It is

This is

some

wonder

quite
the

an

big

assignment.
boss

(Continued

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

A Massachusetts

First

Second, we must recognize the
principle in the United States that
25%

is

the

within

25%

of

the

national

on

page

to

buy these securities.

Voluntary Association

VA% Series Due 1974
Dated March 1,1949

Due March 1,

1974

in¬

We must keep the govern¬

come.

Price 102.459% and accrued interest

expenditures within this
percentage because if we don't we
will find that the whole economic

machine
the

and

greatly

will go into a slowdown
national income will be

diminished

below

the

The

present level.
I

urge

all businessmen to make

themselves
Then
in

aware

make

your

government

them

so

rected

these

facts.

equally

aware

can

be

of

the

way

will

we

BEAR, STEARNS & CO.

DICK &

EQUITABLE SECURITIES CORPORATION
■

.

HALLGARTEN

With Herrick, Waddell
The

Financial

HILLS,

THE

WILLIAM

BLAIR

&

ROBINSON-HUMPHREY COMPANY

CALIF.

—

Kuykendall is with Her¬
Waddell & Reed, Inc., 8943

Wilshire

;

OTIS &

COMPANY

THE

CO.

ILLINOIS COMPANY

Boulevard.

"BURR

&

COMPANY, INC.
HILL &

Chronicle)

MULLANEY, WELLS & COMPANY

Madge

rick,

CO.

(INCORPORATED)

AUCHINCLOSS, PARKER & REDPATH

to

&

•

STROUD & COMPANY
INCORPORATED

depression.

BEVERLY

MERLE-SMITH

escape

forceable

correction
which will surely come if we per¬
mit ourselves to tax ourselves into
a

HALSEY, STUART & CO. INC.

cor¬

while there is yet time.

Only in this

Prospectus may be obtained in any State in which this announcement is circulatedfrom only such
of the undersigned and other dealers as may lawfully offer these securities in such State.

representatives

that this evil

now

from

of

March 24, 1949.

'

the

No

is

Mortgage and Collateral Trust Bonds,

top ceiling for taxes.

That is, Federal, State and Munic¬

now

politely
saying "Good Morning" and smil¬
ing at his sales chief these days.
Salesmen
are
coming back into

are

Eastern Gas and Fuel Associates

put
their money into business through
equities rather than through debt.

our

to. captain indus¬
force for maintaining

,000,000

will

in

job

now

vestors

met.

balanced economy.

downward trend, and

an

The

pro¬

The work of seeing that
goods are kept moving is

salesman's

regarding the future seemed to be
just the reverse.

is not

stim¬

history.

few months ago public attitudes

a

skill in

our

flowing through this
in
deeper
and
wider

streams

evidence today that
willing to look for the
worst rather than the best.
Just

people

the fulcrum

are

country

gloomy poten¬
are

is

living.
production

Goods

upset this bal¬

we

as

balanced market rests.

power

The

a

to

a

curement challenge have been

the buying public
be stampeded by

and

a

(

standard of

psychological factors

The

allows

take

ulating demand, in making it eas¬
ier for people to buy the things
that
make
up
our
ever-better

tion. The trend is always upward.

ance.

which

This
my

good

to

we

Our power as salesmen can per¬

descriptive
salesman's goal. In

threaten

when

haps be regarded

ourselves

healthy economic climnte;
freely; production
is geared to a high level; con¬
sumption keeps pace with produc¬
Of course,

economics

good look at these factors.

pre¬

flows

often

Deflation

occur
when
people
have
plenty of money but just won't
spend it. Crowd psychology ranks
can

means a

money

people's

what is in their minds.

the

"balanced market," in

deflation

or

not

Their

(Special

*An address by Mr. Hoving be¬

throws

not

trends.

catch

fore the Sales Executives Club of
New York, New York City, March

is

Inflation

caused

in

their
it

greatly inflenced by pub-

is

on the corpo¬
rate level just as we now do inter¬

into

their

fact}'4s,

that

than plain dollar sales. Mar¬

are

lice moods.

free enterprise a balanced market

has

reces¬

a

"loss market." The

do

This

"buyer's market" that both the
public and the businessman have
or

that

opinion,

been written about the inevitable

sion

fact

to

up

than selling tangibles—
market adds up to a lot

dends tax deductible

railroad

reason was

to

again

much

ment's

Let us take a look at the record.

We

The vital fact in every business

come

kets

opinion, adds

my

our

more

dictions off.

of

consideration today is that the socalled
"seller's market"
is
dis¬

so

base

in¬

more

divi¬

preferred

plenish
Last

and

our

pre¬
booms and busts often

the

salesmen

•

once

who

lot

a

ingenuity and vigor of America's

economy

appearing and we face
a buyer's market.

on

overlook

of
ours
could not, in my opinion,
have reached its great fulfillment
—the envy of the whole world.

ipal taxes altogether must be kept

plant.

statisticians

Davis

in

man,

keep the
market in balance with produc¬
tion. In my opinion, our goal for
today and tomorrow is the bal¬
anced market. I also think that

because sales¬
men

of

inherent

The job of the American sales¬

a

national sales force is to

function

the

salesmen.

Without

like

social

great

it,

see

hopeful leadership offers a great
challenge to America's returning

pro¬

than

I

other words,

$11,050,000,000 that will have to be
found just to put these new people
to work.
In addition to this, of
course,
many
billions will also
have to be found to repair and re¬
our present

less

nor

market."

I

distinguished "Applause
in "recognition of out¬
standing salesmanship in intro¬
ducing the 1949 Ford."

cate¬

same

more

The

15. The Club presented Mr. Davis

must

we

our

salesmen,
a
"buyer's
market"
would always be a "loss market."

largely

m

which

this

trend.

to

nothing

"salesman's

great deal to

do

of

was born.
It is, moreover,
the only atmosphere in which we
can flourish. A
"buyer's market"

to

that

great

out

As

stinct of every American to follow

fession

like

think

conditions

I

legislation placing preferred

gory

total

output

The

have two specific suggestions.

first

the

our

has

Unfortunately,

reasonable.

seems

But the fact of the matter is that

;

This high taxation rate is espe¬

contrast

we

it is not reasonable.

it

center

entirely

about

in

saved

and

an

the

of national

they

are

thing than taxes under
deflation.
Thirty-eight per cent

25%. Our poli¬
ticians, both Democratic and Re¬
publican, will have to learn this
if the country's economy is to be

or

great deal higher.
that taxes during

inflation

different

taxload-exceeded

now

was a

forget

During

undermines

it

and

economy

tax

for this.

reason

it

can

only be supported during short
periods of inflation or war.
At

a

bonds and

into

money

mortgages?

national

our

corpora¬

Is it any wonder that people

their

put

of

history has always seemed significant to me. Eighty years
working population made things. Those men worked on farms,
Today less than half of our labor force is devoted to production.

Am erica's

38% is entirely too high.

to ex¬
again.

Our

of

small proportion

a

Yet

1—

sale
The simple reason is

of equities?
we

find ourselves

cess

se¬

of this money come from the

thirties.

going

in

excess

their capitalization.

long

Today

excess

too large a percentage

was

'

and Advertising, Ford Motor Company

economic

our

ago three-quarters of our
in mines and in factories.

25% of national income.
We

'

.

savings backlog on
record; (3) relatively small volume of consumer debt; and (4) large "discretional
spending" funds in
hands of public.
Refers also to "floors" established by consumer from social insurance
benefits, and
forecasts still higher U. S.
living standards.

more

ported without undermining our economy and impeding new capital
production. Urges changing tax laws to allow preferred stock divi¬
dends

■

Stressing a balanced market as "our goal for today and tomorrow," Ford executive
says it can be
obtained by proper and energetic
salesmanship. Cites as factors indicating long-term upward trend of
consumer market:
(1) population and labor force increase; (2) largest individual

By WALTER HOVING*

President, Iloving Corporation

Hoving, estimating nation's total tax bill of $65 billion,
than 30% of national income, holds burden cannot long be

'

•

13

Industry

"

'

.

Mr.

(1293)

THOMAS & COMPANY

CO.

41)

;

-

14

(1294)

THE"'COMMERCIAL

&

FINANCIAL

Prominent Personalities
(Eleventh of

SECURITIES

EDWARD

By HENRY HUNT
■:

your

investment dealer,

NATIONAL
RESEARCH

the

request from
or

SECURITIES

annual

average

reached 6%

from

&

three earlier occasions in

on

or

from

return

I

; v

.....

"Only
upon

Thursday, March 24, 1949

Mutual Funds

■ATIOI
Prospectus

CHRONICLE

President, Fidelity Fund, Inc.

quarter of a century has
Dow-Jones Industrial Average

the

a

Edward C.

It is there again today.

more.

Series)

a

C. JOHNSON, 2nd

Johnson, 2nd is

looks considerably

a man of medium height who
than his 50 years. Whether his

younger

youthful

appearance

question

to

is

asset

an

or

liability is

a

400-

CORPORATION

DOW-JONES

300-

INDUSTRIAL AVERAGE

120 BROADWAY, NEW YORK 5. N. Y.

dissecting

1925- 1948

S

0

100

•0

look out

0

0

0

□

o

with

at

in-

as

he

an

open

too

is

busy

«

eyes

from behind his glasses

you

flattering absorption. Make no mis¬
about it, he is really interested in

take

J"oD°

0

gives no thought;
he comes in con¬

tensely analytical. His friendly blue

200

150

he

everything
He might be described

tact with.
ANNUAL PRICE RANGE,

which

He correlates his understanding of
with his knowledge of the in¬
vestment
business.
That
is
why
his
you.

people

"r-resident's
holders
able

Letter"

of Fidelity
business

to

addressed

to.share¬

Fund is understand¬
housewife

and

man

alike.
Ed

Johnson, as a young man, had
the unusual hobby of
studying securities
and
their markets.
Born in
Milton, a

AVERAGE ANNUAL YIELD

„

suburb

1925

26

i

'27

n
'30"

'29

3 1

'32

33

'34

'35

'36

37

38

'39

40

41

'42

'43

'44

'45

Prospectus
"The above chart shows this

may be obtained

index

from authorized dealers, or

SELECTED INVESTMENTS COMPANY
|

135 South La Salle Street

I

CHICAGO 3, ILLINOIS

of

average

'46

'47

'48

Average—generally accepted

.

'

common
stock price levels—from
yield available each year.

1925

to

1948,

'49

an

the

and

-

.

"Tests were run to determine what an investor's
experience
would have been had he purchased the Dow-Jones Industrial
Average
in those periods of
high yields (actually, the Average as such cannot
be bought)—a $1,000 investment at the end of
every year in which
the average .yield rose to 6% or more.

"The yield reached this level in 1948 and

cial

tion,

Fundamental

$59.30

1933

1935
1936

'

'■>

,

63.£)2

t :■

78.43

50.55

90.62

82.15

52.95
52.13

•

.

Incorporated In¬
to

become Treas¬

his

In

time

to

this

browse

in

a

number

of

widely

the

to philosophy.
diverse fields,

theory of popular music, dietetics, and psychol¬
He likes to spend time with his family, which includjs
son, and a married daughter; and he believes that

59.21

85.87

55.35

60.29

96.27

62.06

67.59

one's

family group is the nicest kind

118.22

76.21

83.00

147.62

95.15

103.64

1948

_

Average

84.54

"These tests

were

run

60.10

He insists that

any Easterner needs to sojourn
regularly in order to balance his business and
personal points of view.

in

the

West

69,7£

'buy and hold' basis, although hind>
\
(Continued on page 15)
>y.
on

a

1

*

■

CHICAGO

—^

I—

&—=

*

,

,

Walston, Hoffman Opens
Branch In East Orange

York, San Francisco and Los An¬
geles.
in

15

Offices

are

other cities

W.

also maintained
in

California.

Tabell,
resident
partner in charge of the New York
office

Prospectus

Walston,
members

York

upon request

Exchange,

management

LORD-ABBETT

INVESTMENT

the

&

New

announces

office in East Orange, Now Jersey.
The new office will be under the

mele.

Custodian

Stock

Hoffman
of

that the firm has opened a branch

Shares, Inc.
THE

of

Goodwin,

American Business

:yston<

of

many

Pacific Coast.

Edmund

K

he

1943

Fidelity Fund, Inc., and since 1945 has

friends throughout the country, Mr. John¬
son is one of those Bostonians
who enjoys getting
away from
his desk to make regular
trips to the Middle West and the

56.77

54.36

STREET/NEW YORK 5; N,Y;

AN&MS

of

to

Having

$57.67

80.87
84.33

__

1947

(OS

of

of law

relaxation.

■

1946

48 WAU

Clerk

Vice-President of that company.

doing things with

58.41

62.80

1945

;

became

left his practice

his wife,

1944

iNCOSrORAUO

all

as

ogy.

§41.20

97.43

1943

,

then

loves

such

1942

HUGH W, LONG & CO.

Johnson

extensively, everything from

He

'

1940

Prospectus from your Investment Deoler or

Johnson, 2nd

His special interest since grad¬

publications relating to finance and economics

.'

1941

'IN

-

'

112.70

1939_

C.

investment company, which
has shown a steady growth from about
$3V2 million of assets
to nearly $20 million since his
incumbency.
Ed is a man who reads

'

90.50

1938

Mr.

Later he

devoted

1941-1949|
•

58.40

1937

1935

and

urer

•

•

Ed.

a
study of famous finan¬
personalities of past years and their methods of opera¬
especially in the field of stock market theory and

In

46.98

*■&?':

trustee.

or

became President of

43.64

1934

Investors Inc.

1932

agent

as

vestors.

Income

1937-1949

suc-

teacher

practice.

The results tabulated below show the
annual income received from an investment
made at the end of each
of these years.
1931-1949

vie

to

uating from Law School has been

casions—1931, 1937, and 1941.

Annual

used

mathematics

After

accounts

three previous oc¬

on

he

his

serving in the Navy in
the First World War, he attended Harvard Business and Law
Schools.: Subsequently, for the next 15 years, he was asso¬
ciated with a leading Boston law firm where his
legal prac¬
tice was devoted primarily to
corporate reorganizations ai.d
recapitalizations.
He also
supervised
various
investment

'

as

Boston,

with

chess.

at

'28

of

cessiully

COMPANIES

office

Edward

of

A.

Par-

Opening of the East Orange
in

is

line

with

the

firm's

Gehu

Corp. Adds Two

Charles W. Backhus and Julius
Maier

have

become

associated

with the Cohu Corporation, 1 Wall

Street,

New

retail

distribution

York

City,

in

of

the

Mutual

Funds.

plans for expanding its operations
in the East.

Iilinos

Lord. Abbett & Go.

;•

New York

Certificates of Participation

—

Chicago

—-

New Orleans

Los Angeles

its

New

"The firm established

York

office

last

Decem¬

ber.

Joins
(Special

LOS

Principal

in

Hoffman

INVESTMENT FUNDS
investing tlieir capital

!

offices

&

of

Goodwin

Walston,

are

in New

The

Financial

Chronicle)

ANGELES, CALIF.—Rob¬

ert E. Davidson has become asso¬

ciated
530

SHARES OF CAPITAL STOCK OF

Conrad, Bruce

to

with

W-est

Conrad, Bruce & Co.,

Sixth

Street.

He

was

previously with Lester & Co.

IN

BONDS

An Opportunity

(Series B1-B2-B3-B4)

for

PREFERRED STOCKS

SECURITY SALESMEN

(Series K1-K.2)

COMMON STOCKS
(Series S1-S2-SS-S4)

We

staff
■

~

U

Prospectus f rom

.

your

have
for

curities

openings
several

on

our

sales

experienced

salesmen

to

specialize

INVESTORS MUTUAL,

f|//://■;: INC.
Dividend No. 34

se¬

in

local investment dealer or
OPEN-END INVESTMENT TRUST

The

Board

Mutual,

Tke Keystone Company
of Boston
50

Congress Street

Boston 9,

Massachusetts




SHARES.

Please

write

giving full

ers

qualifications.

Prospectus
\

your

THE

may

on

of
on

Directors

has

fourteen

April 21,

record

as

or

CORPORATION

ONE COURT STREET. BOSTON 8, MASS.

cents

NEWBORG
Members

New

York

30 Broad Street

New York 4

&
Stock

CO.
Exchange

14-A S. Park Ave.

Rockville Centre, N.Y.

Investors

quarterly

a

of

March

31,

19*9.

Crabb, President

Principal Underwriter and
Investment Manager

INVESTORS

share

per

1949, to sharehold¬

E. E.

.

of

declared

be obtained from

local investment dealer,,

PARKER

payable

of

Inc.,

dividend

_

.

SYNDICATE

Minneapolis, Minnesoto

,

Volume

169

v

:Number 4788

v

THE

COMMERCIAL

&

FINANCIAL

•

favorite stock with

i

vestment

Mutual Funds

;

a

the

these

fund

four

on

mutual

CHRONICLE
in¬

basis

of

fundamentals.

(Continued from.page 14)

•

-1

•

'

In

{■'■it-

Ohio,

Cleveland,
could

man

Electric

the

Illuminating Co.,

and outing
Country. Club.

sales¬

Cleveland

compare

day

common

Minn.) V

!■

the

at

Bel-Air

Boynton
Herbert

June 10-12, 1949

•

sight shows that the investor who simply held his investment missed
an
opportunity for substantial profits in each period. After the. pur¬

(1295)

a

15

Director

F.

Boynton, partner in
Laird, Bissell & Meeds, and a past

(Minneapolis,

V "'

Twin City Security Traders As¬
sociation Summer

Party at Gull
stock, with a Fund. First, Safety Lake.
> ■''
through diversification and man¬
June 17, 1949 (Boston,
Mass.)
agement flexibility is better in
the Fund. Second, Yield is slight¬
] Municipal Bond Club of Boston
ly better, for the local utility, but Annual Outing at the Concord
total income is probably not bet¬ Country Club, Concord, Mass.
ter,; Third,'Marketability of the June 21-24, 1949
(Canada)
"Two factors largely control tne movement of
security prices— open-end Fund is definitely su¬
i Investment Dealers Association
the aeiiual and the
psychological.
YYYYvYY Y.
perior, and fourth'," there are vastly of Canada
"At the present time we are
33rd annual meeting at
witnessing a recession in business; improved Appreciation possibili¬
one
Minaki Lodge, Ontario.
which has been long
anticipated and which is,
ties in
chase

at

the

end

of

1931

the

Industrial

Dow-Jones

Average rose
;
149.5%; after 1937, 31%; and after 1941 91.5%, Even so, the Average
today is considerably above the prices at which purchases were
made."—From "Keynotes," published by the Keystone Company of
i;Boston. / f'-f"f'
'L:;:i 'f'
'V-?•:
:-V-?V;:Y ■■rf"l;r' ■ ■'-!
"D. G" Comments on the Market
*

■

\

■

moreover,; a
postwar correction. There are, in addition, developments of
short-term significance which are unfavorable.
(The fact
that the government is
currently collecting about $15 billion for
tax payments
naturally causes a temporary decrease of the nation's

the

natural

of the Fund.

case

June 24,

'purely

Comparisons in other territories

nual

buying

given.
Finally, the most
widely held "blue chip," Ameri¬
can Tel. & Tel. Co., common stock,

analyzed from the standpoint

Oct.

power, and thus affects business

volunie; it is also responsible
selling of securities by taxpayers who need cash.) All this
t-is actual—but public fears are" exaggerating the effects and it is this
psychological factor that is chiefly responsible for the
apathy of
for

some

the

securities

markets

this

at

time.

f

>

'fr

.

."The basic long-term developments are
encouraging. In the first
place, the extent of the recession is modest indeed: business volume
in February was within
3% of its peacetime high; employment is still
above that of a year
ago; national income is close to its

■

high for all

[ time; net savings

j;

are

still gaining impressively.

"Secondly, there

v

two

powerful forces in the making which
may well bring about a clearer
understanding and hence a better
j feeling later in the year. Fear of
commodity price declines is no
^ longer so acute since the major effects are felt to be behind us and
( inventory adjustments are now
taking place without serious dis¬
are

were

was

of

the

four

fundamentals

with

compared

a

fund.

and

should not be to invite trading but
in

explain a Fund's salient points
terms readily recognizable by

the

investor.

This

subject

turbance

to

the

seemed

economic

structure.

Sharp

rises

inevitable three months ago,

in

income

taxes,
appear highly im-

now

i; probable.

The lifting of both of these fears which until now have
j been overhanging business should be reflected both in higher volume
j and in a more realistic valuation of dividend yields in the latter half
of

the

year."—From

Distributors

Group's

monthly

•ji Report."
'

"Investment

things have been

•/

wonder

whether

at variance for

they

have

any

Suffice it to

more.

so
long that one is permitted to
connection with one another any

say, that the investing public seems to be in a
little attention to good news, and to
magnify out of
( all proportion information that is unfavorable.

I

mood

i

"In 1929 conditions were exactly reversed. Bad
news was igr
nored, whereas anything good could put the market
up 10 pointi
We all know what happened finally at that time. Can it be that we
are building up for
something of the same sort, but in the opposite
direction, which will explode on us some day, and regardless of
what may happen to
general business?"—An extract from the
report
of The George Putnam Fund Annual
Meeting.

•J
:

to

pay

.

"D. G." Restores

:

Effective

March

Securities, Inc.

was

21,

the

raised

dealer

from

5%

concession

sales

on

of

Group

to

Kf

;,

-h-

:

;

■

J

\

V

The
in

Sixth speaker in the
course

at

the

New

Bullock, senior executive
The

most

opinion

important

Retail

Salesmanship of
Institute

the

rule

to

work—intelli¬

gent

road

cial

the
This

the

in

his

evangelist

should

sourcefulness and

will

Win¬

or

on

an

something

terized

simple and "corny" to be effective.

consider-to his

on

cessful

sales¬

Hugh

not tech¬
nicians or processors.
are

Bullock

attained

Selling
with

are

re¬

blood,

sweat, tears and toil—but the
wards

re¬

sweet.

Mr. Eullock suggested that sales¬
use

modern ethical merchan¬

dizing methods

read

Bullock

office

British

of

investment

trusts

at

$3,200,000,000 at present. Ob¬
viously, the trusts there occupy
a more important position in the
over

economic and social fabric of the

to

get their ideas

British

The

trusts

are

they

are

and




bers of the

Stock

Ex¬

change and other exchanges,

an¬

nounce
that John M. Berry has
joined their organization at their

branch

office

57

at

tered

57th

West

Street, New York City,

as

regis¬

representative.

(Continued from page 8)
Struthers Wells Corp.—Circular

—Hayden, Stone & Co., 25 Broad
Street, New York 4, N. Y.
United Light and Railways Co.—
Memorandum—Bache & Co., 36
Wall

Street, New York 5, N. Y,

A Also available from the uptown
I

office,

With Harley, Haydon
(Special

to

The

Financial

MADISON,
Beck

is

Co., Inc.,
Building.

York

Chronicle)

WIS. —Robert

with

Harley,
.

Chrysler Building,
New
City, is "News and View," a

leaflet

of

similar widespread
growth and recognition of such
companies in the United States.
to

United

4 This is not

of

an

offer

&
Hickev, 49
Street, New York 5, N. Y.

offer ingof these Shares for sale, or an offer to buy, or a solicitation
buy, any of such Shares. The offering is made only by the Prospectus.

an

to

100,000 Shares

Pacific

Lighting Corporation

COM 3 N G

$4.50 Dividend Preferred Stock

EVENTS

(Cumulative, Without Par Value)

In

prospect's

1

Field

Investment

April 20, 1949 (Washington, D. C.)
V *

National Security Traders Asso¬

ciation

-

Securities

&

Exchange

Price $101.50 per

share

Commission dinner.

"Less,

April 22, 1949 (New York City)

and including April 15, 1949, an amount per share equal to
by which the dividends on such share would have accrued,
daily basis, at the rate of $4.50 per share per annum (1 %c per day)
to and including April 15, 1949, if dividends had been made cumu¬
up to

amount

on a

up

lative from date of

Municipal Dealers

nual cocktail

issuance; and plus, after April 15, 1949, accrued
dividends from that date.

an¬

party.

May 9, 1949
St. Louis

Municipal Dealers an¬
outing
at
Norwood
Hills
Country Club.

Copies of the Prospectus may be obtained from the under¬
signed only by persons to whom the undersigned may legally
offer these securities under applicable securities laws.

May 14-15 (San Francisco, Calif.)
San Francisco

Security Traders

Association Annual Outing at Mt.
Diablo Country Club.

Blyth & Co., Inc.
May 16-17, 1949 (Hot Springs,
Ark.)

Dean Witter & Co.

Spring meeting of NASD Board
Advisory Coun¬

The First Boston Corporation

W. C.

May 18-21, 1949 (White Sulphur

Stone & Webster Securities

Langley & Co.

Bateman, Eichler & Co.

the

Board

of

Hill Richards & Co.

Brush, Slocumb & Co.
Lester & Co.

Investment
of

Canada

(Canada)
Dealers

34th

Seigniory

Association

meeting
Montebello,

Quebec.
June 10, 1949

Bond

(Los Angeles, Calif.)

Club of Los

Angeles field

Weed en & Co.

of California

J. Barth & Co.

annual

Club,

Schwabacher & Co.

Company

Davis, Skaggs & Co.

Mitchum, Tully & Co.

Governors at the Greenbrier.
Pacific

Corporation

William R. Staats Co.

Elworthy & Co.

Investment Bankers Association

Spring Meeting of

ITarriman Ripley & Co.
Incorporated

Smith, Barney & Co.

Crowell, Weedon & Co.

Shuman, Agnew & Co.
March

zjfigpg.

-

Light & Railways—Anal¬

ysis—Vilas

a

at

a

market comment.

C.

Haydon &
National
Bank

First

it is felt that the size, ex¬
perience and qualifications of the
American specialists in investment
company
management point the

ADVANTAGE." For instance, lead
up gradually to the four funda¬

of

New York

mem¬

management

experienced

June 5-8, 1950

comparisons

Personnel Items

Newburger, Loeb Adds

cil at The Homestead.

Safety, Yield, Market¬

been

of
Merritt-Chapman &
Corporation and the Eaton
Paper Corporation.

groups,

interest,

ability and Appreciation by mak¬

has

of the Mengel
Mr. Boynton is also a

Broker-Dealer

Newburger, Loeb & Co.,

operated. by competent

own

to

Dealers,

director

a

highly

respected—based upon their long
and successful history—and while

It was suggested the
"demon¬
stration" portion of the interview
continue the theme of "what's in
it for
the investor—PROSPECT

ing

1

nation.

of Governors and

something he will like

mentals of

Securities

Scott

cablegram

a

England branch
estimating the total assets

Springs, W. Va.)

men,

of

elected

Company.

from, his London,

prospect

Appealing to The Prospect's
Advantage
-

as suc¬

wards

neces¬

in reaching these new people.
Literature and sales talk must be

the

hear.

charac¬

were

work is

sary

others

and

YYYlY'

ties, nevertheless, considerable re¬

"approach" state¬

ment

be opened

at

Convention at the Holly¬

nual

always with

J.

Gen¬

ston Churchill

men

funds

that

sales interview

eral Ike Eisen¬

hower,

retailing

and

Billy Sunday who
had the knack of
"doing the usual
thing in the unusual way." The

to finan¬

Thomas

Hugh

—

the

real

success.

Watson,

in

Mr.

As¬

Investment Bankers Association

Astoria.

organization.

of the Board of Gov¬
of the National Association

director

May 5, 1949 (St. Louis, Mo.)

simple language
of
tne
Peter
Rabbit variety be
employed.
In
merchandising it
might be appropriate to emulate

work,

is

observe

was

Traders

Convention

Dec. 4-9, 1949 (Hollywood, Fla.)

New York dinner at the Waldorf-

con¬

Mutual Investment

Finance

Bullock

across,

work,—

seeing

of

<?>

is

hard

Calvin

Security
Annual

The Broadmoor Hotel.

individual"

'

country presents tremen¬
client possibili¬

St. Louis

York

of

National

sociation

Chairman
ernors

the

on

Springs,

Colo.)

Security Traders Association of

prospect's advantages, under the four fundamentals
of Safety, Yield,
Marketability, and Appreciation.

people!

wealth

dous prospect and

PORTEOUS

Prominent mutual fund distributor also
emphasizes need for

Funds

"new

this

1947, "D. G." paid dealers 6% but reduced its load and
selling commission a couple of years ago.

centrating

(Colorado

>

..

Individual". '

Prior to

As Reported by DOUGLAS K.

i

1949

'

-

Key to
Selling Success—Bullock

an¬

Reaching the "New Wealth

6%. As soon as permission
is granted by the SEC, it is
expected that the selling "load" will be
increased from 7% % to 8% %. At the same
time the company
plans
to reduce its "load" on switches
from one "D. G."
industry group to
another by about one-half.

Hard Work the

15th

Herbert F. Boynton

5-9,

Annual

way

6% Dealer Commission

Toledo

wood Beach Hotel.

■

been

of

outing at Inverness Country

ably presented and completely ac¬

Mr.

"As to the business 'state of the
union,' so called economists have
at their wits'
end trying to explain or rationalize
booming
business with our securities markets in the
doldrums.
These two

v

Club

cepted.

...

Economists Find Present Business Situation
Confusing

V

was

-

Which

1949 (Toledo, Ohio)

Bond

Club.

The pur¬

of making such comparisons

pose

to

•

-

Irving Lundborg & Co.

Wagenseller & Durst, Inc.

Wall
' \

16

(1296)

THE

COMMERCIAL

&

FINANCIAL

CHRONICLE

Thursday, March 24, 1949

Dangers in Farm Support Program

Bank and Insurance Stocks

By HON. GEORGE D. AIKEN*
U. S. Senator from Vermont

By H. E. JOHNSON

This
Another

the

of

Ranking Republican member of Senate Agricultural Committee, urging a farm support program that
will minimize price supports,
points out rigid prices when tied to acreage curbs mean less farmer
income than flexible price guarantees. Predicts
price support of 1949 grain crops will exhaust funds
of Commodity Credit
Corporation, and that rosy promises to farmers are not only beyond power of gov¬
ernment to sustain, but will penalize consumers
by high food and other prices. Warns farmers cannot
get high prices when consumers are unable to pay.

Week—Insurance Stocks
fire

insurance

companies

which

has

issued

interesting and informative annual report for 1948 is the
Insurance Company of San Francisco.

an

Fireman's

Fund

The

has just completed

company

86 years

of successful

opera¬

tions and

some of the highlights of its
history are presented in the
Founded in the early years of San Francisco when eastern
companies would not provide sufficient insurance
coverage, the name

report.

"Fireman's

Fund"

selected

was

because

the

of

company's

pay

San

to

10% of its profits to firemen's charitable funds.

the

offer

Francisco fire

burned, the

After surviving
1906, at which time its home office was

of

has grown and expanded until today it is one
of the country's
leading insurance companies.
The year 1948 from several standpoints was the most successful
company

in the history of the company.
basis reached

Premiums written

high of $109,271,000

a record

on

consolidated

a

with $90,124,-

as compared

000 in

1947. This represented an increase of
approximately 21%.
With the benefit of a significant improvement in the loss
ratio,

underwriting experience

favorable and showed

was

gain of $2,497,000 as compared with a loss of
$2,385,000 for the previous year. The
net investment income for the
group totaled $4,199,000 as against
$3,645,000 in 1947. When combined with the underwriting results,
earnings were also the highest in the history of the company.
a

A summary

presented

of consolidated operations for the past four years is
comparative basis in the following tabulation:

on a

7

.

1948

Underwriting:
Premiums

,,

;

„

premium

reserve

$

$

67,657

58,627

14,781

8,547

5,135

93,813
51,182
40,134

___

expenses

loss._

or

„

75,343

59,110

53,492

46,222

37,144

31,505

24,378

33,426
18,257

2,497 —2,385 —2,412

will

minimize

the

need

1,809

4,695

4,137

3,714

ports.

492

459

415

Con-

t i

Net income from opers. before taxes
Federal income tax provision

3,645

3,256

2,649

1,260

844

4,458

241

6,696
1,630

n u o u s

search

the

and

developm
a

'

'

"

■>''

realized

other

and
'

241

marketing

that

manage¬

render

coordi¬

5,066

unrealized

gains

'

•'

again established

are

on

a

President only one major class of

underwriting loss last
Because

Aiken

formed

603

3,169

tBefore

minority

7;',

have

looking

reached

commodities

It

return

The

the

of

and

underwriting

opera¬

profitable basis.

According to the
underwriting, bodily injury, showed

sharp

expansion

in

premium volume in

go

of

address

records.

in

Frankly, the House and Senate
it

and

Sees Railroads

only

was

see

in

eye

the

into effect

Jan. 1, 1950 and
major provisions
of a new parity formula and a
flexible range of price supports
go

is

based

on

the

on

all

the

commodities.
the

of

These

Senate

enactment

of

J)ill

the

pro¬

were

law

the

levels of support.
Since
at
the
present

time a
strong effort is being made to dis¬
credit

the long range provisions
Act, I welcome the oppor¬
tunity to speak here and hope I
may clear up some of the mis¬
understanding in regard to it.
of

the

Opposing Views
There

are

people who

some

are

Congress that

at all.

gram

Those

to eye

closing

prices

who

believe

in

support

divided into two schools

are

(Continued

a

on page

42)

Hampered in Meeting Competition

Laurence F.

Whittemore, President of the New Haven Railroad, says
rails are no longer monopolies, and therefore should be allowed
more
flexibility in regulation, rates, and practices. Holds, unless re¬
lieved of competitive impediments, rails cannot attract
equity capital

on

1945

$6.49

$1.30

$0.53

$3.54

4.95

1.08

0.32

2.46

more

5.13

3.70

1.07

industry today

service

6.21

4.02

3.53

"f i

a

monopolies.
Mr.

From

review

a

of

the

bonds.

ernment

As

of

Dec.

invested

in these securities

increase

in

the

Total

compared
Common

in

31,

as

in

the

1948,
and

stock

1947

holdings
15.7%

to

in

on

overall basis

an

were

within this classification in such

However, some small
groups as public utilities

were made.
Holdings of preferred stocks
declining from 6.3% in 1947 to 4.6% in 1948.

stocks

<♦>

were

little

Value

Bank of the

Manhattan
Circular

on

Company

now

associated

Members

New

York Stock

Exchange

J20 BROADWAY, NEW YORK 5, N. Y.
Telephone:

BArclay

Teletype—NY

G.lbbs,

7-3500

1-1248-49

Manager Trading Dept.)




W.

Financial

Huberty

has

become

—

Stanley

associated

with Otis & Co., Terminal Tower.
He

was

formerly with Goodbody

& Co. and

Curtiss, House & Co.

railroad
that
persistence
in
requirements
of
payment for work not done will
end

would

It

in

of

destroyer

greatest

jobs.

the

to

seem

railroad

of

sons

me

reductions in service, where total

said

men

not in order and

are

The

New

that

the

President

Haven's

railroads

are

"the

only major transportation agency
which

really fits the private en¬
terprise system in regards to pay¬

missions

ment

it

rendered difficult and almost

has

is still

be¬

evident
rail¬

the

road

industry

lost,

and

aspect
becoming a
giant, beset by several lusty com¬
losing almost
monopoly and is

of

same

every

are

degree, if at all, but
in

fact

subsidized

in

for
reasons,
good, and others doubtful.
ways

whose

position

is

often
im¬

possible by local pressures, under¬
standable, but nevertheless bur¬
densome
to
the
shipper whose
freight rates must be increased to
pay

the

that

a

bill.

There

is

recognition of

evidence

this fact

is

"The railroad industry

finds it¬
only hampered in its ef¬
meet changed conditions

not

forts

to

competition,
otherwise, but in

subsidized or
acknowl¬

that

edged condition cannot attract the

equity capital necessary to mod¬
change fast enough to

ernize and

"It

is

much
mass

a

rate

increase

on

as

the

interstate traffic of the rail¬

roads would be necessary

instances if the railroads

"It
can

to

in

many

were

the

that

me

the

giant

change the character
price of its service, not only
to meet rising costs of wages and
materials, but to meet competitive
can

and

situations

as

well."

Commenting
Mr.

field

cost

of

to

operation

government

service outside such operation."
He urged that

lic,

industry, the pub¬
agencies
and

governmental

railroad

managements, and labor
join in a move towards the
unfettering of the railroad indus¬
all

"Railroad labor," Whittemore
said, "will fulfill its part in the
picture by a willingness to give

try.

up
the
ephemeral
advantages
growing out of working rules and

contracts

based

on

which

no

longer

exist.

stance.

the

of

a

fact

conditions

that the

For

in¬

measure

fair day's work of an engineer

fireman

and

was

based

on

the

discomfort and laborious work in¬
cident to the operation of a handfired steam locomotive, does not

declared

constitute the reasonable

that

of labor is the only

of

a

day's work

diesel

on

a

locomotive.

measure

high powered
Many
other

railroading where mo¬
nopolistic thinking still exists." He

working rules and agreements

are

continued

based

re¬

group

of

that

"there is

people

in

this

no

finer

country

not

than those engaged

opinion

more

total

of

contribution

and

railroad labor,

on

Whittemore

which

performed

to

be safely untied with respect
speed and flexibility with

railroads.

be

important

the

which it

required by public authority to
perform services unprofitably
can

to

seems

"the attitude

questionable whether

of

and

future of the industry.

and

and

Chronicle)

non-competi¬

a

tive position, which in turn is the

interest, are
usually in the hands of State com¬

meet the situation.

The

rules

World War

has

self

are

featherbedding

by

which tend to place their employ¬

becoming truck drivers."

which

With Otis & Co.
to

Com¬

changed,

Herrick,
Waddell & Reed, Inc., 55
Liberty
Street, New York City.

(Special

Interstate

necessary

with

CLEVELAND, OHIO

the

becoming general throughout the
country, and such recognition is

Chronicle)

fited

Commission to allow many
abandonments. However, ordinary

merce

feasible in the public

that
L. F. Whittemore

various

Financial

convenient

highway has been

in the

LINCOLN, NEB. —Walter
Kopf and Clarence E. Pospisil

Request

Laird, Bissell & Meeds

The

for

reason

instances

petitors, which are not! regulated

With Herrick, Waddell Co.
to

the

on

paradox.

come

:

(Special

Among Bank Stocks

efficient and

more

abandonments

a

believe, however, that
they will be bene¬

I

some

An Excellent

those

The
rail

bank

increases
and

"I cannot

in the long run

of

re¬

reduced from

1948.

to

in

elements

Since the close

of the portfolio was
with 55.9% in 1947. Some

bonds constituted 69.6% of all investments at the
year
with 59.2% the year previous.

all

has

transportation

of

63.7%

also

position

which

On the basis

was

perplex¬

a

ing

portfolio it
placed in U. S. Gov¬

municipal bonds

itself

s

efficiently on the highway.
flight of the public from

the

investment

were

d

n

in

company estimates share¬
have been $62.75.

funds

compared

holdings of state

railroad

the

changes
new

Whitte¬

said that

high rale of remu¬

ing companies in

are3>-

longer

no

a

neration.

regulation, rates and practices in meeting competition, because they

outstanding the

would appear that most of the

ognized, by

Boston, President of the New Haven
address before the Western Railway Club in Chicago
March 21 urged that the railroads be allowed more
flexibility in

1946

estimated at $85.92.

regularity, ingenuity and resource¬
fulness should, and must be rec¬

an

5.38

was

their activities requiring sobriety,

Laurence F. Whittemore of

Railroad, in

1947

equity at the end of 1947 would

Bell

few select¬

a

commodities for the

The Senate bill is to

opposed to any farm support pro¬

hours of the 80th

premium

the unearned premium reserve
of the 1,000,000 shares now

A.

that

Committees did not

The report also disclosed that consolidated assets of the
company
amounted to $208,144,000 at the end of the year compared with
$170,472,000 a year earlier. The shareholders equity
including 35% of

(L.

forever

on

by Senator Aiken
before the Minneapolis Chamber
of Commerce,
Minneapolis, Minn.,

10.33

Equity in unearned
reserve, increase at 35%
Adjusted earnings
—

21.4%

new

with the realization that

both houses of

1948

Earnings before Federal income taxes
Earnings after Federal income taxes-

end

1949.

year

all-time

an

of 1948.

recent

given the following per share comparison of
earnings for the past four years adjusted to the capitalization and
ownership of subsidiary companies as of Dec. 31, 1948:

vealed.

90% of parity support

a

supported by the three major farm
organizations, and the U. S. De¬
partment of Agriculture.
Since

national debt.

our

was

1947

perfectly satisfactory prices to the
producer, I prefer to consider the

year.

company has

holders'

The House part of the Act pro¬
for the six basic and

for

July,
Congress au¬
thorized their Committees on Agri¬
culture to make a
study of the
trends and needs of agriculture.
The result of this
study was the
enactment of the Agricultural Act

.

*of providing
for farm

the

to

visions

wartime prices and incomes could

market

and

has

So

price

upon

price support program
be placed on the statutes.

high. Farmers Union has officially shift¬
Industrial profits and the
earnings ed its position in favor of higher

a

means

per¬

per¬

literally

not

a

was

a

sur¬

miracles

healthy agricultural economy.
as

agreement

permitted

1945

wellnigh

of labor have also set

government

years

the

in August,

have

7;7-.'

in order to take advantage of future
opportunities, addi¬
tional funds were obtained during the
year through a recapitalization
program. New capital in the amount of $14,694,000 was obtained and
the outstanding shares increased from
528,210 to 1,000,000.

Add

since

of
production.
perfect growing
conditions farm prices and income

building programs, pro¬
congenial surroundings

home,

Japan

farmers

the

and

war

diet among
American
agriculture
into
the
world picture are all factors that
enter into the programing of a

and

years

D.

high level of
consumers, and fitting

supports

which

ed non-basic

elapsed

of

Under

Rather than

reached

figures are largely self explanatory and. reveal the
made by Fireman's Fund in the past four years.
During this

time premium volume has almost doubled

an

G.

of

for the farm

compromise

above

progress

tions

1,019
assets.

capital

on

-VV'.'

$

Hon.

soil

soil

have

our

servation

and

a

achieving this goal.

During the

coopera¬

motion

and

degree of independence for

mum

g r e e m ents

of

country

more.

the farmer in

1,289

adjustments.

1

i

,

The

and

special

t

con

his

Our goal should be a fair
price
in the market place with a maxi ¬

and

ment,

of

March 10, 1949.

fNet operating income
.♦Excludes

e n

courting disaster if he meets

needs

little bit

marketing

*An

interest

o n

is needed. The

of

indus¬

vides for

not be

of

t i

of

means

and

manent

in

u

a

processors with an adequate
supply of food and fiber, while in¬
suring the farmer that he will

re-

ticularly
distrib

as

consumers

trial

par¬

field

program

providing

the

a

4,199

support

sup¬

3,064

496

"Net investment income

for

price

,r

Investment:

Interest, dividends and rents
Expenses

get the idea that I think

nation

$
90,124

Losses and loss expenses

Underwriting profit

1945

$

Premiums earned 1_1

Underwriting

1946

109,271
15,458

written

Incr. in unearned

1947

Although I will discuss primarily the farm support price program I do not want you
a support price
program in itself constitutes a complete or wellrounded farm program for America. Our aim should be to
work out such aprogram that
to

tive

(000's Omitted)-

-■»

It

that

is

the

sult

on

in

work not

in working

on

practices which

now

the payment of wages for

performed.

The attitude

of labor is the only field of rail¬
considered roading where monopolistic think¬
importance of ing still exists."

my

Volume

169

Number 4788

THE

COMMERCIAL

&

FINANCIAL

CHRONICLE

(1297)

' 17

j,, ■

Emphasis

And

Security

on

United

Harrington, Righter

Sees Too Much
Holgar J. Johnson, President of
Institute of Life Insurance, says
it can choke off ambition, enter¬

Exchange & Trad

g

E. M.

Alfred A. Stern and Bruno Hel-

Parsons

(Special

linger

have

Harrington, Righter & Parsons,
Inc., are engaging in an invest¬

change
with

offices

ment business from offices at 270

New

York

Park Avenue, New York

City.

United

formed

and

Trading
at 30

Ex¬

Company
Street,
in a

Church

City,

to
securities business.

engage

Shields, Jr., Opens
to

The

Financial

Collin & Blood
CANTON,

Chronicle) " "j

OHIO—Leonard H.
Blood and Clifford W. Collin have

CANTON, OHIO—E. M. Shields,
Jr.,

has

offices

opened

at

formed

at

S.

securities business.

a

Collin

offices

2418

Eighth Street, N. W., to engage in

W.,

to

and

4756

engage

business.

Blood,

with

Navarre

in

a

Road,
securities

*

<\

prise and initiative.
Too great emphasis on
choke off the

can

prise

and

been

the

securityambition, enter¬
have

which

initiative

making

America,

of
H

1 g a r

o

J.

Johnson,
New

of

York,

President

of

Institute

the

of Life

Insur¬

ance,
stated
on
March
18
while speak¬
ing before the
Charlotte

(N. C.)

Asso¬

ciation of Life

Underwriters.

Security

is

mind

peace of
Holgar J. Johnson

and

a

to

means

progress

and

not

an

end in itself, Mr. Johnson pointed

out,

remarking,

end

"Security as
over-stressed, just

be

can

security

This

doxical,

sound

may

coming

as

be under-

as a means can

stressed.

an

from

who
represents
an
institution
whose primary purpose is to pro¬

THE EQUITABLE FAMILY

vide personal and family security.

Actually,

it

is

IN THE FAMILY...

ALL

para¬

someone

philosophy

^ound

for every area of activity in Amer¬

ica, life insurance included."

Continuing, Mr. Johnson said:
"Life insurance itself would be

>

doing this country

disservice if

a

it presented

security, even the se¬
curity it provides, as a goal, the
attainment
sulate

of

the

which

the

security, the
family security it

and

providing

with

as

of

provides must be used
of

from

insurance,

medium

personal

in¬

individual

world. With life
every

would

as

means

a

mind to

peace of

re¬

lease the dynamic energies of the

people,

urge individuals on to cre¬
ative efforts and continued prog¬

ress.".
the

is

present tendency on

a

part of some

in terms of

people to think

security

as an end goal,
continued, due in
large part to the fears initiated
during the depression of the '30's
and
revived,
perhaps
in
even
greater degree, in the current pe¬

Johnson

of world-wide crisis and

riod

certainty.
lack

of

un¬

"The tragic results of
adequate security were

the

among

and

'■fJ.

From every

:iv/"'::v,''

■

in the Union—from big cities, from
and from farms—these new members who
joined The Equitable widened its family circle to a total
of 4,150,000 men and women with
Ordinary and Group
insurance amounting to over $13 billions.
state

country towns,

is the thrifty action and self-reliance of this
huge
family banded together for mutual protection that makes
possible the record of accomplishment which The
Equitable brings to you in this annual report.

unpleasant

thoughts

Of the $307,600,000 disbursed last year to
and beneficiaries,

the

year—indicating

insurance

death

Lv-."

It

There

Mr.

During 1948 The Equitable family of policyholders was
increased by thousands of new members who wanted the
security provided by life insurance.

$70,086,000

policyholders

as

a

means

a

continuing trend of utilizing life
of providing living as well as

benefits.

This year The Equitable celebrates its 90th
Anniversary.
That milestone is approached in a difficult economic

period. We have spoken out against the
current

causes of some
economic conditions and will continue to do so,

firm in the belief that the best interests of life insurance

policy owners are concurrently the best interests of the
people in general.
,
We shall be

Report

glad to send you a copy of the President's
the Board of Directors for the year 1948. This
gives in detail The Society's finances, the main
to

report
features of which

are

outlined below.

paid out as dividends,
thus reducing the cost of the insurance coverage; and
$108,500,000 was paid in death benefits. Payments to
living policyholders were approximately 65 per cent of
all disbursements made to The Equitable
family during
was

.

■d

recollections of the great de¬

pression," he said. "Those who

President

saw

these individual and family crises
at close hand, will never forget
them.

that

And

measures

is

why

taken

were

many

during

the

'30's and '40's to put a floor of se¬

THE

curity under

A Mutual

people, as assur¬
that, in any future time of

ance

our

trouble, they

be assured

can

EQUITABLE

must

we

now

watch

care¬

direction

it

as

other. We all want

more

security for ourselves
for the nation
the
to

better

and

the

more

well

as

as

Cash
Bonds

$

(including $5,303,97.1

on

105,440,308

Other Bonds.

.

777,122,362

3,004,749,170

Preferred and Guaranteed Stocks.

.

.

i8,403,896

whole, but at
must be free

Mortgage Loans

656,341,897

Real Estate.....

Reserves for

Loans

124,889,923

still

living, still greater comforts

on

Society's Policies

such

no

plete

security.

some

element

the

limits

We
of

of

thing

as com¬

Policyholders.

must

risk

security

in

accept

life

we

choose must be at such a level that
American individual initiative and

enterprise will not suffer.
ica does not want to
stop
or

its

cease

more

than

progress,
did

two

and

and

think

of

enjoy that

we

if

we

three

had

our

today

Surplus Funds:

Contingency Reserve for Group
Unassigned Funds (Surplus)

our

then."




valued at

Insurance..............

Total Reserves.

of law, all bonds subject to amortization

8,130,000

265,257,043

$4,883,334,447

stated at their amortized value, and all other bonds and
the market quotations furnished by the National Association of Insurance Commissioners.
are

any

of

ago—

we

now

might not have had,

'frozen'

are

63,250,322

4,609,947,404

Amer¬

forebears

things

stocks

,.

Liabilities

34,366,603

$4,883,334,447

In accordance with the requirements

9,449,701

growing

generations

the

Total Admitted Assets

and

which

7,459,000
;

Total Reserves and Other

Life
;

87,556,012

Provisions for 1949 Dividends to

33,797,617

Accrued and Other Assets

-

$4,442,232,369

Reserve for Taxes.

Interest and Rentals Due and

"There is

STATES

Policy and Contract

Miscellaneous Liabilities......

5,245,174

Premiums Receivable

and freedoms.

UNITED

Thomas I. Parkinson, President

Premiums Paid in Advance

112,977,497

to

.

Liabilities.
.

United States Government Bonds.

we

advances

THE

1948

de¬

posit with public authorities)

Common Stocks

our

OF

•

Reserves, Other Liabilities and Surplus

a

as

time,

same

continue

in

was

SOCIETY

DECEMBER 31,
Assets

fully is the natural tendency for
the pendulum to swing as far in
one

ASSURANCE

the

essentials of living.
"What

LIFE

Company incorporated under the Laws of New York State

progress

THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
393 SEVENTH AVENUE

NEW^YORK.1, NEW YORK

j
'

18

COMMERCIAL

THE

(1298)
ADVERTISEMENT

V

CHRONICLE

FINANCIAL

&

Thursday, March 24, 1949

ADVERTISEMENT

,

■ •

.

;

.

Fifty-Fifth Annual Report for the Year Ended December 31, 1948
Richmond, Virginia, March 22, 1949.

-

..

To the Stockholders of

<.

r

other available collateral and reserves, it is contemplated,
'will provide for whatever amount of the Development
and General issue of 1956 which may remain outstanding

;

! ADVERTISEMENT !

'

'

'

-

84%. In other words, the expenditure for shop materials
was

with

$689,427 per billion ton-miles in 1939.
an

equated

expenditure for the

compared

as

same

purpose

in

'

RAILWAY COMPANY:

SOUTHERN

at

~

maturity.

VThe Board of Directors submits the following report
for the year ended Decern31,

plated

facts

the

stating

figures concerning the

mua

Mino

n,ct

Past Nine

,

62, 03,6^

> ties.

$186,185,803

?67°?i
miles

Passenger

Yeais

Average

—

per

revenue

121

-

2.2350

2.5500

1940-1948, inclusive, the Company
Total passenger revenue
$20,877,905
$20,866,952
has acquired, and holds in its Treasury or has cancelled,
As wiU be seen from the above table, total ton-miles
Securities theretofore outstanding in the hands of the
sh0Wed a decrease from those of 1947, and the increase
public, the fixed charges on which it was obligated to
in Gross Freight Revenue is attributable to the recent
service, having a face or par value of over. $85,000,000,
incieases in freight rates.
including $39,456,000 of its Development and General
Passenger Revenue increased slightly, 0.05%, and this
Bonds which would have been due in 1956.
In addition
increase is also attributable to increased passenger rates
it has (a) acquired $2,000,000 principal amount oi Georgia
in effect during 1948, as compared with -the previous
Southern and Florida Railway Company's 5% Bonds,
year
, •
./ matured July 1, 1945, and (b) acquired and cancelled
Total Operating Expenses for the year amounted to
24,604 Southern Railway-Mobile and Ohio Stock Trust
$184,606,916, as compared with $171,673,513 for 1947, an
Certificates, the decrease in miscellaneous income charges
increase of 7.53%, the increase being very largely due
attributable to such cancellation being $98,416 annually.
increased wage rates.
During the same period the Company has made capital
Railway Tax Accruals
(on account of the larger
expenditures on its fixed property at a cost to its Treasam0unt of taxable income) increased substantially, the
ury of approximately $50,000,000, and has bought and
total for the year 1948 amounting to $27,721,768, as comput into service new and modern equipment, including
pare(j with $24,898,426 for 1947, an increase of 11.34%.
over 400 units of efficient and economical Diesel-electric
Government again thus took more than 110 out of each
power, at a total cost of about $93,500,000, of which cost
dollar of the Company's Gross Revenue, and the Comit has paid in cash over $65,000,000.
There has thus been
pany's taxes amounted to $8,473,703 more than the Comput into the property nearly $150,000,000 of capital expany's entire Net Income (after taxes) for the year. .
penditures. The current monetary costs of these capital
/ These increases in expense were in a measure comexpenditures have been higher than the value oi the
pensated for by the increase of $22,179,978 in Gross
items they serve to replace, due to the diminished pur- ^ Revenue, with the result that Net Railway Operating
phasing power of the deflated dollar (roughly 500 in 1948
income amounted for 1948 to $29,148,740, an increase of
vs. $1.00 in 1940), but despite this inflationary result, for
$7/773,727, or ~36.37%, over the comparable operating.
relief should

tax

be

granted, the property is in

on an

A

.

"

Years

.

.

set

be

These

«

Atlantic

Thf

New

The

etv&g

The

Development

or

Yadkin

and

4's

(guaranteed)-.-, 1949

leans' Tehninaf~4's~"iguaranteed) 11

..

and Geni. 4's,

Comoanv

use

2.990;

erection

77.040

75.350

of 1948 revenue, as

income

taxes

(after

and

charges)

will

of the

by

Diesel

lornmntivn

Tennessee

at

af

an

a

were

ens?

rnnX

at-

anorovimaLfv

of

erected at Peeram Shop

tsS^ cS
to

the"

completed

or

S aTi

the Company's

Inman Yard

constating of the

construction 01 additional yard tiacks, changing existing
rac
^
ei"i
Jard ^ J?Ton
system, all at an estimated final
nnn

cost ot $l 929,0U0.

,
. ;
years of legal effort, a Certificate of Public
Convenience and Necessity was finally obtained from

After four

for

1948-

the

Interstate

Commerce

Commission

permitting

the

si2,77o,ooo

for 1947.

$71,877,000

covered 2.51 times in 1948, as compared with 1.93 times in 1947.

track between Rome, Georgia, and Gadsden, Alabama.
In order to provide facilities for certain industries

or

100%

Fixed

pay

on

April

1

were

arounct Kome,

000'

subsidiary into the Company.

the 7 1 miles between Gadsden and Attalla, Alabama,
which.had been operated by The Alabama Great South-

^

.

.

'

ern Railroad Company (with whose lines the segment
Jlas ^
Southern System connection) was sold to

,

the Preferred

Stock were continued, and there was paid on the Common Stock, out
of the surplus net earnings for the year 1947 an aggregate
of $3.25 per share, consisting of 750 per share paid
during each of the first three quarters of 1948, and $1.00
per share paid on December 15, 1948.
J
A dividend of $1.00 per share has been paid for the-

Terminal

first quarter of 1949.

Dividends

(each of which is owned 100%),
important southern segment and the valu-

Company

of 5%

on

1

familiarly known as the "Queen and Crescent
Route"
between
Cincinnati, Ohio, and New Orleans,
Louisiana.
In 1952-1953, when >. the New Orleans and
$7,195,000

•"

,

Uperations

^

}

.

,,

Despite the constantly continuing increases in tne
cost of labor and materials, the property was operated
with efficiency, was well maintained,.and.'ended the year
in good condition.
(
/
So to operate in a time of inflating costs of material
and labor results from long-range planning long since
initiated, combined with resourcefulness and indefatigable supervision. That the problem has been confronted,
and controlled as well as it has, demonstrates the efficacy
of these efforts of management,. as a few examples will
show:
:
In 1939, the Company's purchases for all materials
^

*

?bama Great Southern for $145 000, with approval
0i the Interstate Commerce Commission.
..
v

t

...

S.vs-

tern's line,




only 41 miles of

Stock, as compared with $6.8d

Dividends

are

principal amount .of 4%%
Bonds, and the New Orleans Terminal Company's $14,000,000 principal amount of 4% Bonds, mature, respectively, it is planned that they will be refunded, after
reduction from those Companies' treasury cash, aided
by Southern Railway Company's cash or credit.
Satisfaction of the $12,770,000 principal amount of the
East Tennessee, Virginia and Georgia 5's in 1956 would
make
available to the
Company an equal principal
amount of the Company's First Consolidated 5's of 1994.
This amount, together with $9,513,000 principal amount
of such 5% Bonds, already available in the Company's
treasury, would provide a principal amount of $22,283,000
of valuable first mortgage 5% security.
Such security, plus that released upon satisfaction of
the Development and General Mortgage, together with

to retire

the segment, Coosa, Georgia, to Gadsden, Alabama. The
western end of the Rome-Attalla line, consisting of

Per s*fre on
Common
Per s^are in 1947.
.

referred to, and it is planned

able terminal facilities in New Orleans of Southern

it was decided

After dividends of 5% on the * Preferred Stock the
balance of Net Income in 1948 was equivalent to $12.51

1949

maturing in 1951

'

charges

selling new first mortgage bonds, similarly secured, i
The Company's two subsidiaries, the New Orleans and
Northeastern Railroad Company and the New Orleans

*

modern

a

beingin

now

companies

abandonment of approximately 50 miles of unprofitable

first lien on the valuable mileage between
East St. Louis, Illinois, and New Albany, Indiana, which,
with branches appurtenant thereto,
aggregates 380.95
miles, which Bonds may be refunded by issuing and

-

substantial contribu-

pursuant to the provisions

amounted to $19,248,065, as compared with $11,892,761

secured by a

b.

near

$14,000,000^

the Company.)

The St. Louis Division 4% Bonds

Northeastern's

a

the Tom-

over

1953

e's & GVa's—

acquire

reserve

consolidate this

constitute the

bridge

Division

System

extensive improvements

88 21(,

86 66(,

Net Income
Net

steel

a

Mobile

$1 0oo 000* Diesel facilities

compared with 9.590 in 1947;

,

of

@ Atlanta Georgia,

_

the

Railway

ctf^ttanooia

jm

.

—Totals

progress.
Southern

>

$ 1,500,000

the Atlantic and Yadkin 4's in the amount of $1 500
without

1.750

2.970

Totais

on

1956

5's

^including $50,000 owned

The

18.190

Jtw

River

Of the Truman-Hobbs Act, the work

" 14:290'"

:

1.720

After Operating Expenses, Taxes and Equipment .and
Joint Facility Rents (which latter amounted to 1.440 for
1948), there was left for fixed charges and other corporate needs and the owners, 11.900 out of each dollar

Amount

issue—

basis.
Many large items of permanent improvements were
inaugurated or progressed during the year. Numerous
new steel bridges were erected or contracted for and
.9 miles of trestles were filled. A large project con-

lien, in the aid of navigation,

17.620

Expense

.

Grand

handed debt obligations maturing

Outstanding in
Year Hands of Public

13.500:

—«—

—
~

Taxes

maturities, exclusive of equipment obligations,

The

Equipment

Expense

General..Expense

consist of the following:

to

of

Traffic

inclusive

1951-1956

r

,

,

of 7wa^———I——'

Maintenance

increased f 10m time to time to enable the Company

or

38.800 in 1947.
,
•
The Operating Ratio (which is the amount of total
Operating Revenues consumed by Operating Expenses,
expressed in cents out of the dollar) dropped from 77.040
in 1947, to 75.350 for 1948.
Continued and successful efforts were made during
the year in the difficult program of discontinuing unprofitable passenger trains, with the result that 6 trains
were discontinued during 1948 > with a resulting net
estimated aggregate saving of $275,000 on an annual

J948

It is contemplated that this reserve will

standing* guaranteed

'

Maintenance
"

in United States V
Treasury securities aggregating $24,000,000 as of Decern-

ber. 31. 1948.

of costly materials (and

use

Federal Government is making

investments

Directors,

This decreased

Due primarily to these efforts of management and to
the constantly augmenting deliveries and use of Diesel
power, the Cost of Transportation (which is the relationship of Transportation Expenses to Operating Revenues)
was reduced to 38.640 from the corresponding figure of

comparative

'•

of xorthcoming maturities, there have
in
reserve, subject to further order of

aside

Board .of

time high.

equally costly labor) shows earnest supervision, the
"pay-off" for capital expenditures for mechanization,
and a determined effort to.meet inflation.

Jackson,
Alabama^ was undertaken, the total approximate cost
being estimated at $1,970,000, toward which cost the

anticipation

been

the

of materials and supplies,

bigbee

'

,

-

use

resulting transportation unit of output
is continuing. Prices in December 1948 were at an all-

sisting of the erection of

.

'

...

.

.

foiiOWs:

annual basis.ft

The Coming Eight
.

In

...

The steadily decreasing

ratios of the several categories of
Operating Expenses, and taxes, expressed in the number 0f cents out of each dollar of revenue, were as
The

long-term ob-,
ligations have been reduced in face or par amount by
about $90,000,000, while its net fixed charges have been
$4,446,294

'

rp.

results for 1947.

good and efficient operating condition.
During the same period, the Company s

decreased by

The significance of this will be appreciated when

as related to the

During the period

which

was

? Is remembered that lumber prices went "out of sight"

933,631,924

818,891,518

;

mile

passenger

A foresighted program of using long-life timber

.

inaugurated prior to 1938. As a result, there were
phenomenal decreases between 1939 and 1948 in the
quantities of lumber products required to be bought,
amounting to decreases of 30% in miscellaneous timber,
f iS% in crossties, and of 42% in switch and bridge

-2*8.07

209 09
$207,256,592

-

Number

Vpore

transportation accomplishment.

i947

13,788,904,901^

„

Totai freight revenue

period, 1949 to 1956, inclusive.
The

again a decrease of 30% as measured by the resulting

66,045.102

65,945,658

-

Average distance moved (miles)—

during the period 1940

1948, inclusive, and to discuss the maturities of .debt
the Company and its affiliated companies in

™

1948

in

receipts there-

1948

Freight moved (tons)—

affectin0

the forthcoming

0f business handled and the

^

operations and results for the year 1948, the Board of
desires briefly to call attention to the broad
accomplishments of the Company

use of Diesel-electric locomotives, the corresponding
equated figure, excluding price increases, was $520,243,

i
railroad

the

of

compared with the previous year, were:

from

Directors

to

v0'lume

The

and

Oneration

1948 of $577,726, a decrease of 19%.
Again—the Company spent for fuel in 1939 $696,838
A per billion ton-miles, while in 1948, with the increasing

amounted to $245,013,413, being an increase of $22,179,978,
or 9.95%, over the Operating Revenues in 1947.

Foreword

Before

.

Operating Statistics
f

R

°n

Ue

I7'1949*

w;

*

1948

Year

The

1948, which is the annual report it is contemformally to present to the stockholders of the

^70iTlMSy 31 the an'1Ual meetlng

'

•

I#

of the affairs of the Company
ber

!

-

,

for use in shops cost $5,705,471, and 1948 shows the
dollar volume of the same purchases had nearly trebled,
the 1948 figure being $16,691,789, or a dollar increase of
193%. Eliminating from this increase the amount thereof
attributable to increased price, the use increase of such
materials amounted only to 54%, which compares with
an increase of total ton-miles hauled, 1939 vs. 1948, of

.

Tde stockholders of Southern Railway Company
having, at the annual meeting held in May 1948, approved, an application to the Interstate Commerce Commission has been filed, and is pending, for authority
to acquire the line of The Richmond and Mecklenburg
Railroad Company (a subsidiary of the Company), which
extends from Keysville, Virginia, to Clarksville, Virginia,
31.20 miles in length, and which -has heretofore been
operated by the Company under lease.
•- :
Substantial and successful

progress was made

.Company's program of Dieselization.
As of January 25, 1949, there

:

•

in

were

in the

;

operation

by

/, Southern Railway System companies

423 Diesel-electric
locomotives. Diesel freight locomotives while constituting but 8.18% of the System's total freight locomotives
were

handling

gross

ton-miles.

approximately
On

the

46.93%

passenger

of

the

System's

side,

the

System's

Passenger Diesels represent only 17.37% of the passenger
power, but at the year end these passenger locomotives
were

handling

approximately

60.00%

the

of

System's

passenger car-miles.
•

•

.

'

-...

'

■

.yvage and Freight Rate Increases

"

'

/ v

The demands, referred to in last year's Annual Report, of the Brotherhood of Locomotive Engineers and
the Brotherhood of Locomotive Firemen and Enginemen,

COMMERCIAL

THE

Number 4788

169

Volume

'

finally settled in ,
August 1948, by an award of wage increases of T5%0 \
per hour, retroactively ^effective Noverhber 1, 1947. /
" *
; Effective October 16, 1948, wage increases of.10^ per
hour were agreed upon with the organized operating
groups; while a dispute is now pending with the 16
non-operating labor organizations. In this latter dispute v
an Emergency
Board created by the President of the United States recommended
effective

an

increase of "14 per hour

1, 1948, and a 40-hour work week
effective September 1,1949^ with 48 hours pay, and with
certain changes in rules fb enable the 40-hour week to
be put in operation without pyramiding the cost.
Con¬
ferences are now in progress in an effort to reach a
settlement of this dispute. *
October

The

The estimated increase in pay-roll cost and pay-roll
taxes to the Company for .all employees, based on applyr
1948

awards

as

,

stated, is approximately $20,800,'000 .annually.
Faced with realized inflationary increases in costs of

•

mented by

dustries

Bureau

Internal

of

materials and supplies, .facing these

or

increases, and seeking

While

Revenue.

which is estimated to produce for the Company

mately $10,470,000

,

.

increased

freight

gross

revenue

formal

report

II.

The proceeding is still

pending, wherein the railroads
seeking permanent increases in freight rates of
approximately 13%, including the interim increase of
January 11, 1949; and there are also pending applica¬

r

are

tions for increases in

intrastate freight rates before
various state commissions.
New

'

Rail

During 1948 there were laid 27,204 tons of new rail,
as compared with 36,313 tons laid in 1947; and orders for
1949 have been placed for 33,500 tons.
New

Equipment

During 1948 there were delivered and put into service,
(a) 144 covered hopper cars, 1,000—50-ton hoppers, and
3,041

steel sheathed

train cars)
36

units

and

in

(b)

the

box

1948

(a total of 4 185 freight
(including

cars,

commodities.

units of Diesel power

91

complement which

were

delivered in January 1949)..
Of the 91 units of Diesel

been issued

an

with

of October 15,

as

$8,700,000, with
on

for

a

2^4%

the reaping

spinning machinery in place in the United States. Cotton
consumption in the Southern states in 1948 amounted
to 8.064,629 bales.
Thus, Southern mills, with 77.5% of
the total spindles in place in the United States, worked
84.1% of the total spindle hours, taking 88.6% of the

1948, in the par value of
and which were sold

coupon,

interest cost basis to the Company of 2.36%.

As of January 1. 1949, the Company had

.

on

order 95

part of 1949, and the 88 new streamlined passenger cars,
ordered in the year 1946, which it is hoped will be
delivered during the latter part of
Use

in

After

1948

of

paying

the

its

1949.

at two

Company's Financial Resources

running

.Carolina and

•

follows:

as

-

!

1

,

an

V

L

during the

on

States

for

reserve

the

acquisition

of

or redaction of
maturing obligations, and (b) cash
$38,199,071, as shown in the balance sheet (the latter
being reducible by items whicfc were not cleared through
the banks as of the close of business for the year).

;of

Funded Debt and Fixed Charges

table of funded

debt at the

the following comparison with

end

1947:

of

1948

showed

"

Dec. 31, 1948
Funded Debt
Leasehold

Dec. 31, 1947

$194,650,500

$194,650,500

__

Estates

Equipment
Totals

52,589,600l

Obligations

—

Public

34,663,760
$282,133,860

its

Includes

$9,247,000 of Bonds

subsidiaries

since

January

1,

acquired

by

the

Company

the people it serves.

by the

f as

defined

:

securities

by the Company,
cember 31, 1948.

were

of

its

leasehold

estates

.

a

and

lease expir-

ing July 1, 1949, is awaited.

;

j

approval of the Virginia courts and conditioned

upon

\

sum

of

$3,000,0.00,

as

and

when

relieved from

obligation of continued operation of the line.




has

public authorities, -and

continued

to

be

friendly

the

economic

a

means

to the communities it serves, and its plans

aspirations

for

locally-circulated

the

future,

were

newspapers.

placed

News

and

were

issued to the staff.

t}ie anticipated order of the Interstate Commerce Com¬
mission, has agreed -to pay to The Atlantic and Danville
the

public,

with

regularly
feature
prepared and distributed; special material
was prepared
and sent to educators and students; con¬
ducted tours of the property and "open house" days
were held; background information was supplied to edi¬
tors and other opinion makers; a monthly magazine was
produced for employees; and a weekly news-letter was
in

stories

In compromise of all of
its liabilities of restoration of the leased line and equip¬
ment belonging to the A&D, the
Company, with the

j

the

to

what it

i

ated by Southern Railway Company under

good will of
In general, the Company's relation¬

customers,

whole

its efforts to

well-being of the South, and to
sympathetic understanding of the problems
confronting the Company and the industry.
Advertisements telling what the Company does and

An early approval by the Interstate Commerce Com: mission
of the independent operation of The Atlantic
iand Danville Railway, whose line runs from Norfolk,
Virginia, to Danville, Virginia, and which has been operv

its

bring about

owned

approximately $12,070,000 at De¬
.

the

tions

.by the Interstate -Commerce Commission, less

from

Relations

helpful.
Every 'appropriate means was employed to create a
public awareness of the Company's important contribu¬

The Company's net fixed charges, on an annual basis,

income

miscellaneous

As
.

an

the Year
In 1947

of

enue

freight, passenger

operations

total

a

rev¬

$245,013,413 $222,833,435

__

The

cost of maintaining the properly and of
operating the railroad was_

Leaving

balance from railroad operations of

a

Federal,

state

Leaving

a

The

paid

Company

hire

of

ties

from

companies
of

use

amount

$21,375,013

3,112,654

3,513,276

income

total

a

funded

on

$24,888,289

'

in

and

paid

miscellaneous

Resulting in

of

debt

rents

equipment trust
leased railroads

for

deductions

totaled

1

net income of

a

-

■

items

_______

obligations,
and

$29,148,740

.

■

miscellaneous

___

Interest

4,886,483

it

investments

from

and

bonds

3,535,990

for

by

__

derived

and

24,898,426

$26,261,496

joint facili-

received

income from railway operations of

an

Making

27,721,768

$32,261,394

and

sources

income

stocks

other

to

the

of

excess

those

Other

171,673,513
$51,159,922

$32,684,730

'i

equipment

in

184,606,915^
$60,406,498

and local taxes required

balance of

13,013,329

12,995,528

$19,248,065

I

$11,892,761

Financial Position at the End of the Year
■

On

On

-

,

'

December

Company

in

Increase or

31, 1947

Decrease

investments

had

land,

railroad tracks, ter¬
shops, locomo¬
freight
and
passenger

minal

facilities,

tives,

and

cars

of
In

December

other

fixed

property

$621,977,597 $598,020,958

ment

$29,100,603

$36,677,954

$2,800,133

24,156,228

21,000,000

3,156,228

16,826,204

16,906,479

80,275

15,612,544

10,419

7,856,943

2,669,717

$32,296,553

bonds

affiliated

other

$659,479,661

$789,830,134 $757,533,581

of

and

carried

stocks,

743,616

5,187,226

notes

panies

had

Company

in

61,458,703

15,602,125

the

$23,956,639

$39,478,087

_

addition

com¬

investments

at

62,202,319
proceeds

Trust

Equip¬

of

"OO",

held

Trustee,

to

be

delivery

of

by

equipment

disbursed

upon

4,400,348

4,400,348

Investments

The

Company

special
And

had

deposits

temporary

U.

$688,580,264
cash

Government

S.

Other

railroad

others

to
in

Securities...

and

companies

owed

the

Company

The

Company had on hand fuel,
rails, ties, bridge material and

other
supplies
necessary
for
keeping road
and
equipment
in

good

Deferred

order

assets

debits,
to

and

including

but

not

unadjusted
items

owed

yet available to the

Company
The

Assets

the

of

Company

1

totaled

to

and

~~

^

Operating
Reserve

adver¬
supple¬

but

but

$36,275,939

$37,838,443

$1,562,504

22,138,497

16,247,730

5,890,767

2,611,231

438,397

104,746,428

98,961,730

5,784,898

10,989,401

13,776,184

2,786,783

$177,199,893 $169*435,318

$7,764,575

?

:

balances

companies,

dividends

accrued

accrued

-

3,049,628

railroad

interest,

rents

Taxes

and

wages

other

not

and

yet

due

due

not

reserves

for

and

depreciation of road
equipment and amortiza¬

tion

of

defense

projects
j including
liabilities,
to others,
but not
adjusted

Deferred
items

yet
The

due

total

credits

of

and

these

liabilities,

reserves

was__

After deducting these items from
the total assets there remained,
for

the

capitalization

Company,
The

net

assets

capitalization

of

Funded Debt,

equipment
tions,

Making

tion

a

mained
vested

a

in

net

'

/

—

$612,630,241

$588,098,263

$24,531,978

'

including bonds,
trust

obliga¬

$242,099,820 $229,314,260
60,000,000

this

129,820,000

of $431,919,820 $419,134,260

capitalizathere

$12,785,560

~

re¬

largely

$12,785,560

60,000,000

129,820,000

-

capitalization

in¬

assets

surplus,
the

,=5==* ~

Com-

Stock

total

.

following:

Stock

deducting
from

of

,

the

etc.

Preferred
Common

of

the

pany consisted of the

After

integral part of its advertising and public rela-

tions program, the Company continued, through
tisements in nationally-circulated publications,.

'

"

and

amounting

investments

The Company owed for materials,

and

Company or

its

<

with

with

or

1940.

-Includes $9,189,000 of Bonds acquired
subsidiaries since January 1, 1940.

the Company's lines

The Company continued and intensified
"humanize" the industry and to earn the

ship
1

Results for

111 1948

and

supplies,

52,819,600-'

47,449,320
$294,689,420

Trust

on

war years, the iron and
industry in the South is continuing its moderniza¬
tion and improvement program begun after the close
of the war.
During the year the South's first mill to
fabricate large diameter welded steel pipe for pipe lines
transporting gas and oil products was constructed and
put
in operation at a point in Alabama served by
Southern Railway System.
The growth and increased production in electricity,
aluminum, lumber, woodpulp and paper, furniture, to¬
bacco, and in the myriad products of Southern soil and
factory demonstrated again in 1948 that Southern agri¬
culture and industry are increasingly a factor of funda¬
mental importance in the Country's economy.

jdebt

The

Financial
The Company received from

-

Greatly expanded during the

December 31, 1948:
(a) Investments
in the principal amount of

in

plant

new

,

steel

securities

$24,000,000, set aside

a

President.

SOUTHERN RAILWAY COMPANY

Total

of $21,910,464 for the year, as compared
total of $19,335,467 so expended in 1947.
(2) Paid dividends aggregating $7,219,150; and

Had left

at

year

in Tennessee.

a

United

ERNEST E. NORRIS,

Unexpended

The commercial production of nylon was commenced

-

aggregate

(3)

in

plant is now in the course of con¬
point served by Southern Railway System

rayon yarn
a

South."

the

i

investments

in Tennessee.

in Alabama.

Expended for capital improvements to the prop¬
erty, $5,978,983 for Road and $15,931,481 for Equipment,

with

rew

struction at

1(1)

,

one

"Serve

Respectfully submitted, by order of the Board,

and

A

taxes

expenses,

adequately

The management is again most appreciative of the
effort, and is grateful for the good-will, of the men and
who have, by working for it, accomplished so
much for the Company in the year 1948.

The

previous records. Production was started
plants on the Company's lines, one in South

new

recompense.

women

1948 broke all

payable
during the year and fixed charges, the Company used
part of its accumulated cash, as to larger items only,
\

always

The rayon producing industry continued to expand its
production capacity during the year. The domestic pro¬
duction and shipments of rayon yarn and staple during

additional units of Diesel power for delivery in the early,

modest

31,1948

total consumption of cotton for the country.
y

and

Southern Railway Company has always striven toward
these two objectives, and, continuing so to do, will

was

The cotton textile industry maintained its important
position in the South's economy. At the close of 1948
there were 18,400,000 cotton spindles in place in the
cotton growing states, constituting 77.5% of the cotton-

power just referred to, 16
treasury cash; and 75 units
were
included in Southern Railway Equipment Trust,
Series "QO," to the extent of approximately 75% of
their cost, such Equipment Trust Certificates having

paid

were

deserved

Leaving

The real story of 1948, however, ,is that of
of the harvest of prior years' "plantings."

actually

;

units

fair return, say not less than -6%, on their invested
capital; the recent actions of regulatory authorities and
the- acceptance of higher rates and fares by shippers
and travellers show that Government and the public
are becoming increasingly aware of the necessity of this

Agricultural Development

isting plants and 73 large new distribution warehouses,
the largest industrial growth for any two consecutive
years in the Company's history.
By contrast, tne year 1948 (though a difficult one)
was a year of "fruition" rather than one of marked ac¬
celeration of new industrial development.
Costs rose,
supplies were difficult to obtain and capital hesitated
to make new commitments.
Despite these hindrances,
during 1948 there were established at points served by
the System's lines, 204 new manufacturing plants, 106
additions to existing enterprises and 59 new large ware¬
houses for the assembly and distribution of numerous

the

has been in¬

the

building • of its plant.
■ ;
To accomplish these two simple and fundamental ob¬
jectives, the railroads need only to be allowed to earn

The two prior post-war years 1946 and 1947, told a
dynamic story of industrial development in Southern
territory, there having been established at points served
by Southern Railway System in those two years alone
826 new industries, 220 substantial enlargements of ex¬

on

in

a

taxes and interest for past years.

Industrial and

approxi¬

primary functions, namely, (1) to furnish, in peace and
the safe, adequate, economical and indispensable
transportation service so necessary to the nation, and'
(2) to pay a just return on the capital which the thrift
vested

extent, if any. that his position may be persevered in and
finally sustained the Company would be required to pay
additional

greater

Conclusion

-

of its owners 'has accumulated and which

assessment

substantial

for

-

of deficiency has been made, the
has indicated his disagreement with the
Company's treatment of a number of items and to the

annual basis.

an

actual

South!"

in war,

Revenue Agent

unprecedented wage
on their invested
capital, the railroads in October 1948 sought before the
Interstate Commerce Commission, in the proceeding
known as Ex Parte 168, an increase in rates, which
has resulted in the granting op December 29, 1948, of
an
emergency interim increase averaging about 5V2 %.,
effective January 11, 1949, on interstate traffic, :and
fair return

a

Ahead—Look

"Look

to

;•

:'Vear-s :

no

publicity and related activities, to invite in¬

The railroad industry, one of the best and largest
exponents of private enterprise in the country, has two

liability for the years,

Company's federal tax

19

opportunity.

throqgh 1940 has been settled and closed.
Returns for.
the years; 1941-1946, inclusive, for which years $173,876,308 in federal income and -excess profits taxes were
paid, are now being audited by representatives of the

effected on the bases just

if

(1299)

0
ADVERTISEMENT

With the

Federal Tax liability for Past

(?

ing the

CHRONICLE

ending of the lease of The Atlantic and Dan¬
ville, the Company's fixed charges will be reduced, on
an
annual basis, in the net amount of approximately
$305,000, representing the fixed and contingent rentals
currently payable under the lease, and it will also be
relieved from a substantial and long continuing annual
operating loss.
It is expected that The Atlantic and
Danville will assume separate operation of its own line,
and will become a friendly short line connection of the
Company.
.'J: v." v
,'.V.■, '. ^
\
The acquisition of the line of The Richmond and
Mecklenburg, when effected, will reduce the Company's
fixed Charges by $12,600 on an annual basis.
:
»
,

strike vote, were

a

FINANCIAL

ADVERTISEMENT

ADVERTISEMENT

whiciv resulted in

&

property,

of

$180,710,421 $168,964,003

$11,746,413

20

world

of

its

directors

new

Pipe

Gas

Corporation has been an¬
nounced by Claude A. Williams,
President
of
Transcontinental.

to dwell and think in

They

Schmidt,

C.

Benno

are

a

general partner of J. H. Whitney

no

pride to the vast quantity of goods
exported during 1948 as'proof that
the Canadian dollar is not over¬

war.

was
era

reference

No thought or

valued.

given to the fact that in the
of sellers' markets, now defi--

the

passed,

nitely

for

demand

goods was such, that price was of
secondary consideration.
Mr. Abbott further deprecated

employment

statement

chief British economic problem
no

dered

engen¬

of

removal

the

by

OPA

is

there is still official reluctance

such

countries

which

for

Belgium

as

boldly taken the first

has

step by the abolition of exchange
restrictions to break the Euro¬

the way for the adop¬
tion of the subsequent austerity

devaluation

measures.

'

,

the facts

with

reconcile
Liberal Gov¬

thus difficult to

It is

the

attitude in the
of exchange manipulation.

ernment's present
matter
On the

one

hand the upward re¬

valuation of the dollar to

combat

a

previous economic trend is
staunchly defended; on the other
hand there is a blank refusal to
countenance devaluation, when it

Currency

deadlock.

trade

pean

the part of Sweden

on

imminent. - An in¬
finitely greater service would be
also

appears

the

to

rendered

cause

of

freer

however, by an early
the part of the United

world trade,

decision

on

Sterling and
convertibility. -Iir

&

unless it were decided to
Progressive Conservative
beforehand in

steal the

thunder and move

anticipation of a British move in

in

of

however,

When,

is

attention

to the latest utterances

turned

of

British Board of Trade President

Wilson, the anomalous position of
upholders of the continuance
of wartime restrictions and the
maintenance of artificial exchange
the

levels, is glaringly exposed.
Mr.
Wilson exhorts British manufac¬
turers "to be as

chant

bold as our mer¬

adventurers

centuries

of

past" in order to capture a larger
share of the world's export mar¬
kets.1
Almost
completely
sub¬
merged
by a flood of official
documentation and governmental
red tape,

the British exoorter can

well wonder how he still manages
to keep
be

his head above water. To
to soar to the heights

asked

Inc.

also

Research

Hodges

Trust
r

-

Director

a

Develop¬

&

Co., Standard Perlite Corp.
and Texla Gas Corp.
During the
war he was
on active duty with
States

victories.

the

.

Mr. Anderson is

member of the
of

New

Director of

a

Manufac¬

and

In

Society of Tool Engineers ab
Osborne, senior operating Vicethe Westinghouse Electric Corp., asserted that at the;
tax reduction or "even the simple pledge of government

address before the American

an

Pittsburgh, Pa., on March 12, L. E.
of

President

turers, Inc., United Corp., Dewey
and
Almy
Chemical Co., Saco

present time
that

tax

Lowell

will

be

Shops, and mother corpo¬
rations, and is a trustee of Wellesley College.
:.
,
■

,

..

,

pipe line
to
bring
natural
gas
direct from
Texas to New York City.
longest

rates

ness

activity

and

provide
ate

e

r

national
C

in¬

in¬

prod¬

uctivity

and

only

had

improvement

slight

Vickers

dian

also showed

a

the

but

ter

Cana¬

feature issue.
base-metal group
tendency to do bet¬
Western oils were
the

the

and

Golds

with

in the downside despite
the spectacular showings of Im¬
perial Oil's new Golden Spike
mostly

;

,...L

m e n

vestment banking firm, announces

Osborne

said:

"The

in¬

the

opening

fice

at

of

of¬

York

New

a

Wall Street, under the

52

of Eugene L. DeStaebler, Vice-President in charge
of
the
firm's
municipal
bond

management

DeStaebler

was

formerly

associated with the Chicago
of

S.

F.

Mr.

Moseley & Co.

not

ILL.—McDougal

office
man¬

as

has

It

worker.

from

processes

in

chemical,

coal,

that Carl H.

Oilman, Rob¬
Taaffe, and Fred M. Wolfe

ert

J.

have

become

associated with the

firm.
Mr. Oilman was manager

of the

1942, to
to

that,

the present time.
Prior
he was Municipal Man¬

of the Chicago office of Alex.
Brown
&
Sons
of
Baltimore,

ager

Taaffe

Phillips,

sales

NEW YORK 5,

WORTH

4-2400

N. Y.

NY




1-1045

with

the

1946. His activities there included

service

WALL STREET

been

office of the WhiteCo., Inc., since August,

Chicago

TWO

has

in

and

the

municipal buying,

cashier's departments.

Mr. Wolfe has spent the past 18

with the Modern Woodmen
of America, Rock Island, 111., dur¬
ing the past five of which he
served in the capacity of chief
statistician in the. investment de¬

years

partment.

also

change to the present

Minton

Sills,

&

Co.,

Inc., and the election of Fred W.
Fairman, Jr., former partner of
Fred W. Fairman & Co., as VicePresident, Treasurer and a Directo.

The

one

of

Co.,

Fairman

W.

Fred

the

registered

oldest

se¬

conditions of

than

them,

Sills, Fairman

& Harris or¬

ganization.
William

Harris
the

H.

David

J.

Chairman

as

the

new

will occupy the

fices

at

209

S.

firm,

which

Sills, Minton of¬
LaSalle

Street,

Chicago.

have

to

be

comes

spring out

and they cost
in America
the
roughly from two

has opened

Harvey W. Wilson
at

14

Wall

Street,

York City, to engage

ties business.

~

New

in a securi¬
;

downtown

lot,

From reserves within the

"(1)

current charges
depreciation accounts, and un¬
distributed profits;
business, such

"(2)

as

From sources

outside the

business

itself, such as the bank¬
ing system, insurance companies,
and
of

the savings

from

parking space in
a seat in a bus

trolley car, or even a rowboat
at a resort. But when it comes to
or

machinery which
day to earn their
living, the thinking of many

the

productive

they
own

takes
fail
the

every

use

Then they

curious turn.

a

or

refuse

owners

to

understand why

of that kind of prop¬

erty deserve and must have a

fair

payment for its use.
"You people in this room, how¬
know that the money you
spend on tools or the money
purchase

ever,
can

that is available for the

tools

the

of

upon

of millions

individuals.

you

and

make

depends

the profits that tools earn,
upon the prosperity of busi¬

ness.

When

profits

good and the
and when

are

business outlook is good,

people

are

business,
stall tools.
the

and
not

so

willing

then

to

invest., in

business will

in¬

When markets weaken

prospects

for

profit are

good, then business tends

of

to make its old tools do. Last year,

business earnings finds its
directly back into investment

American corporations made a to¬

"Thus

a

substantial

portion

gross

H. W. Wilson Opens

it is something like a

as

house to live in,

.

built,

Here

long

as

sources:

way

offices

any
.

of the earth for men to use. They

of

and

Sills

continue

of

of

of

to

Board and President, respec¬

tively,

more

;

"But machines do not

money

the

living, and
the peoples

other nation enjoy.

Saturday, March

joined

advancement

ments, home comforts, and better

business at noon,

Several of its members

steady

that
possible for Amer¬
icans to produce for themselves,
with less effort, farm
improve¬

money.

19.

materials.

of course,

"Most Americans are,

perfectly willing to pay for the
use
of somebody else's property

a

it

made

has

Chicago, ceased

firms

industries as
oil, steel, alumi¬

"It is this tremendous and

in

Maryland.
Mr.

a

Harris

&

Fairman

curities

Municipal Department of Kebbon,
McCormick & Co. from March,

bonds.

more,

chip away at

to

profits.

such

semi-finished

our

produce

must

begin

then

and

efficient

more

without realizing that they

themselves

the

from

come

more,

the

of

and other mass producers of

technological

municipal

from

the hide

and

new

of the municipal bond de¬
partment and, more recently, with
the -New -York office in charge
ager

name

&

of

out

come

num,

announced

McDougal & Go.

L. E. Osborne

prod¬
uctivity of the past 50 years has

creased

mechanization of all industry and

department.
Mr.

profits,

increasing

the

for

means

a

population to earn their own keep.
"One of the most serious trou¬
bles arises when people do not
understand productivity and want

and

t

CHICAGO, ILL. — Sills, Fairman
& Harris, Inc., Chicago, in¬

Sills,

Taaffe and Wolfe

vide

capital' invest-

it; and third, to pro¬

increase

to

relation to

its

passing

a

strengthening effect.
The corpo¬
rate-arbitrage rate on the other
hand displayed
continued firm¬
ness.
Stocks for the most part
were
dull and irregular but the
industrials
finally registered
a

nounce

INCORPORATED

ital, new and better tools and
expanded facilities if the people
are—first, to keep up their cur¬
rent standard of living; second,1

o m-

on

snipped off and

be

must

name,

plowed back into the nation's bus¬
iness in the form of working cap¬

r

creased

CHICAGO,

A. E. AMES & CO.

munist

stimulate busi¬

come.

were

Co., 208 South LaSalle Street, an¬

CANADIAN STOCKS

Socialist England,? or Com¬
Russia, some portion of
the national production, whether
it be called profits or by any other
ica,

main¬

tained" would

and the announcement of
the politically minded pre-election

GOVERNMENT

CORPORATION

capital investment.

attract

England- Mutual. Life

Co., and

Merchants

United

and

Director and

a

Finance Commit¬

pressure

,

Expansion

Says Fear of Higher Taxes Impedes

menting

budget

not, lose, but there is the
possibility, that , we may lose by
apathy as well as by force of
arms." ; He maintained that any-one who is not against Communism
or
who is "on the fence"
is a
dare

of

dull and inac¬
tive. Free funds were again under
also

ternals

Join

MUNICIPAL

,*

.

Russia has won most
Today she has

this struggle,

of

PROVINCIAL

:

:■

.

Sokolsky contended that in

Mr.

of

rights.

to deny these

as

so

columnist stated, "we cannot, we

Army

Theatre

European

country's

field.

CANADIAN BONDS

seek¬

ing to establish a total universal
State over the whole of mankind

'

going on," the

"In this war now

in the control over a population of 600,- Communist, as far as he is con¬
L v
v r"
Operations 000,000 people and a land mass cerned.
as m Deputy
General Purchasing
Agent for the European Area and
was discharged with the rank of
Colonel.1 He subsequently served
as General Counsel to the Foreign
'•/•L. E. Osborne, senior operating Vice-President of Westmghouse.
Liquidation Commissoner of the
.Electric Corp.,. points out profits to industry are essential to pro¬
State Department. ,!.i
*
vide more power and better tools to increase productivity
United

the

Transcontinental is building the

During the week there was lit¬
tle change in the external section
of the bond market and the in¬

rights of

the speaker argued,-

in Asia.

are

and Russia, the other,

man,

today,

only powerful

our

war,

on

allies

de¬

one

fending the inalienable

ment

this direction.

reversed.

Schmidt is

Mr.

•.

Insurance

ingly,

Investment--

Consolidated-

O.
of

York, and
President

and of Boston Fund,

tee

would have
little choice except to act accord¬
Canada

event

New

Anderson,

Kingdom to devalue

is

nqw even more obvious than
July, 1946, that the apparent
trend of that time has completely

of

Co.,
Kelley

the

in manpower, re¬
mechanical facilities,

and

carry

George E. Sokolsky

Russia;

and

cost

dependent upon this country to

is

States

United

O'Kelley Anderson

help,

limitations

its

sources

the

States,
Schmidt

C.

Benno

our

would

estimates

he

$1,500 000,000 in the next year.
Since Great Britain, because of

two

tween

without

out

hold

which

the

of conquering

purpose

not

con-

d

universal

restore its full
this

proc-

u e

for

resources

other
regions of that country. Southern
China, Mr. Sokolsky stated, can¬
the

speaker, is be-

longer one of production but of

price ceilings, no "hesitation was
displayed in arbitrarily raising the
value of the Canadian dollar and
thus paving

tin

great

with

China

This

struggle,

selling, it is apparent that there is
now complete awareness in Brit¬
ish official circles of the end of
the sellers' market. Unfortunately,
in the case of Britain and Canada,

to

in

s."

e s

of

the inflationary pressures

that
began during
that period is
still

valuable share of

includes a very

same

struggle

previous
by Mr. Wilson that the

exchange political reasons to recognize the
manipulation as an. alternative to change in
economic conditions
governmental controls... No refer¬ which now favor the abandonment
ence was
made, however, to the of wartime controls and unreal¬
Liberal Administration's master¬ istic currency parities. / < • V,
minding of the economic trend in
/>.. Failure to face the present eco¬
the United States in July, 1946. At
nomic facts can only result in
that time, in order to counteract eventual loss of foreign markets
the

the

that far exceeds,

either Genghis Khan or.
Alexander the Great.
The area
of

that

ended because

a

upon

«

rich in resources

never

,

Following

J

Our minds are still focused toward

World

I

War

agination but also the sanity of
the
bureaucracy-ridden
British
manufacturer.

no

continuance

principal source of his present af¬
flictions, will tax not only the im¬

present value of the Canadian dol¬
lar.
He
moreover
pointed with

and no prospect of peace.

peace

a

of

described by Board of Trade, the

orously defended the maintenance
of his predecessor's policy of re¬
strictions in order to preserve the

ended and there is

never

prospect of peace.

peace or

of the<S>

controls, vig¬

removal of exchange

World War I

George E. Sokolsky, writer, lecturer and columnist, addressed a
luncheon meeting of the Los Angeles Bond Club on March 10 on the
international situation. In his talk, Mr. Sokolsky declared "there is

own,

sition spokesman's advocacy

|

Angeles Bond Club Hears Sokolsky

Writer and lecturer says

Line

wherein wartime controls and sellers' markets
apparently remain the motivating factors. In the Canadian House of
Commons Finance Minister Abbott in reply to a Conservative oppo¬

a

two

Transcontinental

of

By WILLIAM J. McKAY
British and Canadian officialdom continues

of

Election

Canadian Securities

Los

Named Directors J

Two

Thursday, March 24, 1949

CHRONICLE

FINANCIAL

&

COMMERCIAL

THE

(1300)

channels.

These reinvested earn¬

ings, from both internal and,. ex¬
ternal sources,

share

constitute the lion's

of the total

supply of

capital.
"Whether it be Capitalist

jnew

.!{

Amer¬

tal

profit after taxes of

$20 billion.' To
like

the

other

so many

fellow's

more

than

that looks
profit in

which they have no stake, and in
far too many
way

instances this is the

it is told to American people.

"But

corporations

plowed back

THE

Number 4788

169

Volume

COMMERCIAL

into

the nation's -economy* some-?
thing like $22,100,000,000 in'1948;

All the

.

"

be maintained just as they' are,
Will stimulate * business v activity
and

profit and much more was
plowed back into inventories, new

"

thereby
provide
larger national income

year

basis

which* hurt

taxes

—,

FINANCIAL

CHRONICLE

every

citizen because they make it more
difficult for industry 4o operate

even

an

&

for

vjThey

prosperously.

will

realize

'

facilities, and other forms of capi¬
tal assets.
No one tells that from
"If it

Hill' Survey,

McGraw

American
'

get the money, says a

can

recent

industry will carry on

for the next five years

for

equip¬
ment. Plans already made call for
spending about $55 billion. But

:

1

plants and

new

•

plans

show

do

what

not

will

cannot
they

and

if

done

be

hampered by political action.
survey shows that manu¬
facturing industries are shifting
emphasis from expansion to ef¬
ficiency.
Three-quarters of the
are

"The

-

tax

mounting

of >tax upon
people's savings and
people's profits makes it

against

increasingly difficult to replenish

led

to

to

national

::"When:;

Government

greater

and

revenues

rapid

the nation's tool

reduction

debt.

to

come

plore

realize how they themselves bener
fit when profits are thus put to
use,
a

I

lot

taxes

lot
test

taxes

tools

and

everybody

ing business

people will rise in pro¬
they find the tools of
getting slapped with
heavier

for

come

on

when

and

of

profits

who

has

a

his mind

refresh

these

of

some

to

points.

Just

as

the nation must snip off a certain
amount of its national income and

it

plow

every

back

into

nation's

the

all

or

cast

tools

use

of

our

under¬

our

what makes

our jobs
beyond that,

Over and

our

own

influence and

our

possible,

some

improve

should, each in

we

others to do the

"America

economic

these

you

make

time to

standing
possible.

j

stake in the American way of do¬

,

production
heavier

,

because I believe that the time has

glib talk about more
profits. And I believe a

on

with

ramifications

believe that there will be
less

more

•

"I have taken your time to ex¬

people

more

box.

must

so' we

way,

encourage

same.

been

producing

goods to raise its own-standard of

living and that of the entire world
with

an

energy and with a success

that

is

unprecedented

history of mankind.
come

for

to

Study Trading Hours
Emil

Schram, President of the
York Stock
Exchange, with
the approval of the Board of
Gov¬
New

has

ernor

has

in

the

all

The time has

look

years

appointed

up from the Scott \&
Co.; T. Jerrold Bryce,
job of production and reaffirm the Clark,
Dodge & Co.; George A.
economic facts and faiths which
Dixon, Charles B. Harding, Smith,
have made our country great in
Barney & Co.; George R. Kantzler,
the past and will continue to make E. F. Hutton
& Co., and Robert L.

it

even

us

greater in the future."

Stott, Wagner, Stott & Co.

itself in a few years,
equipment must if most com¬

panies
much

,

consider buying it,

to

are

equipment
better

substantial

must

produce

products

savings

make

or

labor

in

and

material.
"The
-•

savings

owners

they

but,

soon

the

form

of

first

go

the

to

they always have,

as

spread

everyone

in

products

to

at

better

lower costs. This program of capi¬
tal

expenditure planned by Amer¬

ican

industry is rightly called one
greatest bargains ever of¬
fered the American people.
:/ "All ;this — American industry
of

,

the

plans to do if it
and

is

will
on

from

come

what

can

The

Congress does

millions

answer

Washington

profits and taxes

of

get the money

encouraged.

of

about

in

taxes

the income

on

Americans

might otherwise invest

who

part of

a

their income in these plans,

v

"It is at this point of providing

..

more

and

power

better

increase

productivity,

agement

comes

lision

with

that

Alexander Smith's

to

man¬

complex

of

A few facts

misunderstandings—the charge of
speed-up,
taxes

threat

the
the

and

cry

of

higher
excessive

of

I

profits.
profits is that they provide

foundation

for

economic

and

Per Share

a

Ans.:

opinion and judgment set
chain reactions, the first mis¬
leading to another and
greater one, until at the end of

$81,727,435

$6,989,732

63,160,588

5,561,384.

1946

,

Net Profits

1947

up

Net Sales

,1948

po¬

of

45,291,993

4,602,404

take

the.

string

have

a

to economic fact.

"These mistaken popular beliefs,
I

What dividends has the

2

contrary

we

think, form much of

the

of Common

is

deserves

careful

"To

begin

sound

dangerous

so

mon

stock?

J

Company paid

per
per

on

share. 1947—$2.70

its

com-

per

share.

share.

reason

believe

to

it

paid

a

dividend in

every

except

year

1930,

with C.

ever

sell

over

a

to

year.

common

stock?

(937,925 shares outstanding)

5 What is the total investment of stockholders in the
at

December 31st, 1948?

Ans.: $50,754,373.20

6 Does

the

Company have

any

funded debt obligation?

Ans.: No

,

every

that

agreement

4 What is the book value per share of

Company

Since incorporation in 1873 the Company has

1931, 1932 and 1938.

there is

selling

Sons, Alexander Smith in 1948

became the first manufacturer

Ans.: $43.66

1946—$1.80

examination.

with,

H. Masland &

ownership of Sloane Blabon

our

*

Ans.: 1948—$3.20

basis

that

our

Corporation and

4.79

*

that taxes be increased. That

proposal

factor is Alexander Smith in the floor

Ans.: By virtue of

5.74
„

a

covering business?

$7.16 ;

for the proposals now before Con¬
gress

3 How big

$100,000,000 of floor coverings in

full-sized

misconception

popular

Company's sales and

earnings?

litical action by large and power¬
ful segments of society.
Such er¬
rors

behind the figures in the Annual Report ofAlexander Smith & Sons Carpet Co.

What has been the trend in the

"The essential evil in the attacks
on

104th and Bi

into head-on col¬
whole

a

tools

the

Federal Government does not and

will not need more money than it
already is collecting through taxes.
Almost certainly, there will be a
cash

surplus

fiscal
well

go

two.

or

the

at

end

of

this

CONDENSED

of $4

billion; it may
higher by another billion

year

"

s

"Those

of

you

who

have

fol¬

Cash and U. S.

lowed the record

know that, ever
ended, the Treasury
Department has persistently and
continuously and by very large
margins underestimated national

since the

war

income and

consequent tax

There is

nue.

no

apnarent

reve¬

than

those

which

have

is every reason
or

there
to believe that no

just

cause

increasing the burden
or

on

individual

by

our

our own

communities and

representatives

in

Con¬

gress?
Shouldn't we go beyond
that and make it clear that tax re¬

duction,

or even

[Total Current Assets

.

5,722,462

market

22,774,134

reserves

cost or

.

$38,632,152

$16,674,794 reserve for depreciation

22,996,946

»

.

.

.

Compensation and other

....

reserves

Minority equity in subsidiary

.

.,

.

>
.

Excess of Company equity in Sloane
Blabon over cost at acquisition .
.

$11,369,730
456,632
r>

519,917
2,389,094

Plant and equipment, net of
:

CAPITAL

Prepaid
\

expenses,

[Total Assets •

and other
$

*

%

■

*

.

.

3,860,648

$65,489,746

.

•

Common Stock
assets

Preferred Stock

•

•

Surplus.....

$ 9,799,000
18,758,500
.' 22,196,873
.

*

Total Liabilities and Capital

.

.

50,754,373
$65,489,746

high time

get these essential facts better

in

lower of

$10,135,556

Total Current Liabilities

business

known, and understood and acted
upon,

!

at

.

taxpayers.

"I wonder if it is not

to

exists for

on

Accounts receivable, net of

Inventories,

LIABILITIES
.

pre¬

ceded them. On the contrary,

adequate

ASSETS

1948

reason

why their latest predictions should
be regarded as being more accu¬
rate

CONSOLIDATED BALANCE SHEET DECEMBER 31,

Treasury Notes

the simple pledge

of Government that tax rates will




A1 exander Smith

Chairman;

Eugene
Barry,
Shields
&
Co.;
Sydney P. Bradshaw, Montgomery,

"To pay for

that

special

Crooks,

Thomson & McKinnon,

ize facilities.

as

a

committee to study the question of
trading hours.
Members of the
committee are: Richard M.

to replace and mo'dern-

are

21

Stock Exchange to

funds to be spent in the next five

•

-

this

that

thing,

tions

of the

"

these

That very

,•

will recall, happened in tne

against

with its un,.

precedented program of expendit
lures

you

1920's when successive tax reduc¬

the soap box.

•

future taxation?
as

to

economy

own

(1301)

& Sons

Carpet Company

Yonkers, New York

22

(1302)

THE

ther

Hail!

Public

Utility Securities

Ohio Public Service

\

Cities Service Company is now generally regarded as
gas

but it

company,

still

has

in

its

treasury the

an

oil and

of

several

stocks

important utility companies which it must eventually dispose of in
Utility Holding Company Act. One of
these is Ohio Public Service Company.
In the near future Cities

order to conform to the Public

.

..

does not

serve

that

city, furnishes electricity to an area of about 3,100
square miles in north central Ohio, with a population of about 526,000.
This area includes large agricultural and industrial
sections, the prin¬
cipal products being steel and iron, machinery and rubber. The prin¬
cipal cities served, in which subdivision offices are located, are
Alliance, Ashland, Elyria,, Lorain, Mansfield, Marion, Massillon, Port
Clinton, Sandusky and Warren.
The

about

company

has

a

construction

which

program

will

require

$26,000,000

during 1949-50. Of this amount about .$7,400,000
provided through depreciation accruals and retained earnipgs^
$10,000,000 from the sale of mortgage bonds in the near future, pos¬
sibly some $2,000,000 through the current sale of common stock (after

will be

repayment of $3,000,000 bank loans)

the

and

remaining

$2,600,000 through sale of debt securities in 1950.
tal structure

The pro forma capi¬

16

16
25

over

$60
'

Preferred Stock

_

Common Stock and Surplus--

their

$101

ings

the

on

common

stock

were

as

"The

100%

forma share

pro

also

follows in recent years:

needs

tions,

2,638,160

1948-.

-

1947-

-

1946-

-

j The coinpany has paid dividends

3,000,000*

$1.71

$1.51,

1.57

"Whether
lowered

1.38

1.18

1.04

-its

on

since 1922, -the annual rate in the past two years being $lr
Beginning with the quarterly payment March 21, the 1949 rate has
apparently been raised to $1.12.
~'

year

| Following

are some of the figures and ratios usually studied by
a utility stock:
The annual revenues approxi¬
mate $30,000,000, • putting the
company in the upper medium-size
bracket. Revenues are entirely electric, the
company having no other
services.
About 21% of revenues are
residential, 8% rural, 16%

machine

producers.
The average revenue per residential kwh. in
1948 approximated 3.30 cents, which was moderately above the na¬
tional average of 3.01 cents; however, average residential kwh. sales
were 1,647 kwh., compared with the U.
S. average of 1,551'.

1' Plant

account

is

carried at original cost since (unlike the
the Ohio Public Utilities Commission does
not require the determination of
original cost; plant account there¬
fore includes an undetermined amount of
intangibles. From a rate

practice in

not

states)

many

point of view this is perhaps not important, in view of the liberal
regulatory standards in Ohio; cost of reproduction is an important
factor in the rate base.

The depreciation

approximates 15%

reserve

oflplant account. In
about

were

1948 depreciation and maintenance expenditures
of gross revenues (after allowance for purchased

15%

power).

ters.

except

"In

.

.

v.'■ -r

.

.

.y

-

■':

■

"there
been
s

the country;

!

is:

are

that

another

'bust'

imminent.

is

These
casts

.

modern

fore¬

are coun¬

tered.

by

re¬

Bernard

assuring state-.

•

that

ments

Barucb

M.

._-A:"v

-

/

3

:

;.

feared.

be

Some
we must act quickly to pre¬
deflation;
others that the

nothing
warn

is

to

Still

still inflation.

combine the 'best features' of both

the

inflation

un¬

too

are

.

.

..

r.

Secretary-General- private U. S. funds can continue
ECA program without serious strain on our capital resources.

Curtis E. Calder, Chairman of the International Relations Com¬

anti-inflation

an

if prices

measures

are

go

down

to become

are

an

It sounds

good deal like the operation of
convertible coupe. Press a but¬
f

ton and up goes

the top to shield
Press-another buttoft

off the rain.
and
us

UN

as

If prices

measures

anti-deflation program.

a

Annually
After 1952 for Foreign Investment ■

these

and

program;

these

which, wills

deflation.

and

high,
used

be

to

measures

.

the

give

down' to

top comes

the advantage of the sun. " /

"Little

nomics.

can

come

I have

from such

eco¬

championed

never

the doctrine of

laissez-faire in the
lie

should

the

presupposes

vestment abroad.

encourage venture investments. It

'regulate everything.' In whatever
action is taken, we must pierce to

also

the

f'Under

optimistic

the

to

as

assumptions
climate

economic

at

home

and
abroad,"
the
report
"private foreign investment
will amount to approximately two
billion dollars per year after the
completion of the European Re¬

states

Program.

covery

"This
on

the

estimate

statistical

is based largely
record of the

to take account
of the rise in the price level, and
1920s,

the

expanded

growth

of

the

economy.




It

presupposes

nomic

conditions

propitious
abroad.

eco¬

Unless

much less than this estimate.

"A

ord, to impose
on

"Today the

our

power or

any

natural

serious strain

resources,

man¬

standards of living or on

the domestic price level."'

problem, "or" be

crux

is that there is

is

much

too

emphasis

reeds is stable

more

all

myth.

a

purchasing powgr.
higher pensions,
unemployment insurance-^.

Increased

{

something

of

are

kg

wages,

no

You

mayors

lion

to

bait

the

avail if the

of

power

are

would prefer your

a

the

need

selfishness

of

race

else.

anyone

frozen,

,to

than

i1

"While your

new

in

understand

r>uvchas^

falls faster.
better posh*

money

incomes

largely
affected

are

quickly
by the need to
do
something about unemploy¬
ment as soon as layoffs start.
In
short, you are the most exposed
you

are

by rising costs

or

of

groups, among the
the squeeze
between

first to feel
taxes and
rising costs; without being able to
seek relief by increasing your in^
New tax

come.

as

sources are

as

rare

of uranium.

sources

"Whatever your cities c~n post¬

Until

should be postponed.

pone

the over-all decisions are made',
pumpkins turned into busesi
"You have seen planners ;of all you
should -hold some of your
sorts in every country—and look
strength in reserve.
Let us all
at
the
mess." Without
America, watch for those last straws which
where would the world be?
of

the

times

worst mistakes

.

'Some

of modern

committed by govern¬

were

planners.- In 1927. the;Bank
of England and the
Federajl Re(serve
decided to reduce interest

ment

|t

rates to stimulate business.
this bit of
started
1928

the

was

credit-loosening which
speculative bo6m ; oif

the

and

bust

1929

of

and

1929,

which

and

tb

led

the

subse

quent evil years of unemployment,
when. the
planners
lacked
the
courage

to stop in time what they

had started.

"Or, take a more receipt ex¬
ample, whicl} helps explain^ some
of our postwar troubles.
All re¬
member the

dire

predictions of

calamitous depression that
when

pressive

"The

the

the

arrays

was

ended.

war

a

to

Im¬

of statistics were

marshalled bv various government

strain

of

upon

-

mental

your

our

structure

nation.

are

feelmg in
cities is a

of the strain being

measure

exerted

to

you

operation

good

whole govern¬
throughout1 the

In your troubles you turn

the

which

State,

for

its

part,

turn's to the Federal Government.

Washington turns back to the cit¬
izens of your communities to get
its relief. Everybody wants to lean

the central government, but

upon

who is the government to lean on
the

but

J

ensue

.

*

break the camel's back. '

may

people?

>

3

'

"I cannot

see

how any economic

can
be soundly drawn
disciplines all segments
society—for the common good
—with special advantage to none.

program

it

unless
of

Nor

I

how any segment
know what it can
expect and what it must give up

of

can

society

until

see

can

we

decide

on

or

arrive

at

no

purchasing
and.

the

terms

form

of

of

our

problem
We must

peace.

vivendi

between

some

of

rrodus~
and

ourselves

others."

\

power—more monev—

additional

incentives

reduced

know, taxes

peace

were

taxes.

in
As

the
you

slashed by-about

$6 billion, the reductions going
mainly to corporations
"F opposed that tax reduction
and the general scuttle-and-run

Clarence F. Averv Onervs
In Battle Creek, Mich.
BATTLE

CREEK,

MICH

—

""

deal with

this first.*

,

1

"It is futile to talk of free enter¬

capital export of two billion

dollars per year would, not appear
in the light of the statistical rec¬

the

of

crux

doomed to failure.

these conditions

are satisfied, for¬
eign investment will probably be

a

,

billion of U. S. private
capital available annually for in¬

economic

unpleasant,

But that is

on the alleged need for more pur-i
chasing power. What the country

will be $2

domestic

are

.

dumbly before the problems con¬ 'agencies to'prove there would be
fronting them and say there is 10 million or more unemployed.
nothing to be'done. Nor do I be¬ To prevent this, these prophets
lieve in the opposite extreme of clamored- there had to be more

conditions Which will permit and

facts

evaded.

"There

raw—that

Manufacturers, has submitted to
Trygve Lie, Secretary-General of the United Nations, a report pre¬
pared by its economists in which it is estimated that when the ECA
program
expires in 1952, there^

not

often/,
they
failing
common
to all humans,, planners
and non-planners.
i

mittee of the National Association of

men

down

mavors

realities,

while realities will not. Too

myth.

a

fit

must

political considerations and
pressures,
for these will change,

With the touch
of
tbrt
magic
'planning' wand
everything is supposed to fall into
place or, as in the story of Cinr
-'ereliav Dumpkins are transformed
into coaches—though I assume you
ning' is

predic-,
ns,

voiced

is

it

means
mere

We will have mo¬
direction.

there

planning is

To
effective, the men doing the
planning must be competent and
the
plan must be right.
That

magical in the idea of 'plan¬

and

economically..
Dire
t io

a

|

"That

how

others talk of

NAi Estimates $2 Billion Available
Informs

eculation
healthy

p

drifting.

tion; without

$25-$50
hereto¬

applying the yardsticks of yield
New York State Electric & Gas, for exam¬
ple, was recently offered to stockholders at 41 and is currently around
43; the yields would be respectively 8.3% and 7.9%.

I

tinue

eh-

average

price-earnings ratio.

,

has

m u

still lack.

we

of true

essence

be

Charts,'but until some port is fixed
as
our
destination, we will! con¬

<

stated,

real- danger is

Electric utility stocks have been
selling recently at an
yield of about 6.8% while stocks with average revenues of
million offer 6.5%.
However, in bidding for new issues not
fore held by the public it is the usual practice to allow for
seasoned character of the
stock, in
and

Baruch

what

thinking in advance of acting.

.

Mr.: '

weeks,"

on

Nothing can have meaning
as it is related to our peace

"The

enterprise needs peace, above all, to function.
>', '■ ;
;V

recent

be

now

hinges

strategy—a strategy

Speaking at a luncheon meeting of the United States Conference
Mayors in Washington on March 21,. Bernard M. Baruch warned
1hat government, planning and controls will not solve nation's
|problems and that free

should

taxes

raised

or

tary establishment and other mat¬

•

vent

" v-':

'

■S

is

forces

terribly.

ment controls, the size of our mili¬

of

analysts in appraising,

commercial, 47%-industrial and 8% wholesale and'miscellaneous; the
proportion of industrial business seems unusually high. Of ^he in¬
dustrial revenues, over half were derived from steel, and affiliated
industries, while a substantial part of the remainder represented

power

aggra-t

in the peacemak¬
That holds for all aspects of
problems—for priues, govern¬

ing,
our

if

planning have been costly and its magical

in each,

and

is decided upon

Elder Statesman tells Conference of Mayors mistakes in government

stock

common

were

weakening

inflationary

the

vating

Baruch Warns Against Over-Regulation

'

billion

which have plagued us so

No. of Shares Assumed

Year

than $20

more

financial position

its

scrutiny than it is getting.

more

tax

expenditures

lost to the government,

valley authority idea" is all of that. The
valley development idea in its other aspects

current

earn¬

worse,

further

a

despite greater

are

According to the preliminary prospectus,

came

armaments, foreign aid, and
summoning of young men to
the colors away from their daily
tasks.
Through these tax reduc¬

affairs.":-

own

there

for

Congress,

25

59%

a

was

the

another

Percentage-

still

matters

make

1948

cut,

"The

follows:

as

Millions

Debt'

"To
in

valley authority idea," he said, "seems to me
example of the' 'creeping socialism' which
confronts the American people and which is slowly
but surely reducing their freedom and their control

(as of Dec. 31, 1948) is approximately

Funded

estimated

than

everyone

hungry to buy everything?

along with State and- local gov¬
ernments, had their proper re¬
sponsibilities under that pro¬
gram, he added.
Giving administrative author¬
ity to an appointed board of
directors, he said, "would be an
improper delegation of Con¬
gressional authority, imposition
Sen. K. S. Wherry
of an all-powerful government
upon an unwilling people, and threaten a slowdown,
if not a breakdown, in the
progress of construction
and development programs now under way and con¬
stantly accelerating."

2,000,000 of the 3,000,000 shares.
Ohio Public Service, with headquarters in
Cleveland, though it

possible

as

which

in

manufac¬

any

get into production

to

quickly

as

souri basin resources.

Service expects to; ask for competitive bids for 638,160 shares, while
at the 'same time the company itself will offer 361,840 shares for
"new money" purposes. After this offering Cities Service will own

need

world

recently called plans
for a Missouri Valley Authority and similar river
basin developments "another example of the'creep¬
ing socialism' which confronts the people."
:
He said that existing Federal;
and local agencies were already
going "full steam ahead" on co¬
ordinated development of Mis¬

did

incentive

turer

Senator Kenneth S. Wherry

By OWEN ELY

1949

Thursday, March 24,

CHRONICLE

& 'FINANCIAL

COMMERCIAL

prise

with

a

threat

of

war

over¬

hanging, for free enterprise needs
peace

to

function.

It

is

equally

futile to talk of planning until we
have determined how to achieve
*

decision

in

the

peacemaking.

The 'planners' can dbaw wondrous

policy. It seemed
of

needed

lated

when

there

during the

mendous
so

nonsense

purchasing

more

many

to talk

Avery & Co. with offices m the
Security National Bank Building,

being

to engage in the investment busi¬

power

had

war

accumu

such

a

tre¬

backlog of demand anc
billions in savings to

satisfy these demands.

Clarence F. Avery isj forming C. F.

What fur¬

Mr.

ness.

ducted
ness,

City.

his

formerly

con¬

investment

busi¬

Avery
own

Avery & Co., in New York

Volume

169

Number 4788

THE
He estimated

Says Television Will

the
on

Account for Sales of

lz%

John K.

West, executive of RCA
Victor, says selling power of vi¬
.

deo will rival mail order
catalog
for phone and mail business.

Speaking at

marketing confer¬
ence of the American
Management
Association in New York City on
Mar. i7, John K.
West, Vice-Presi¬
dent in charge of RCA Victor Pub¬
lic Relations, predicted television
a

activities should account for over
a billion dollars of business activ¬
ity in

1949.

•

Describing
the

impact

of

television

on

marKeting
methods, Mr.
West

later

regions

this

of the families

service

$1 Billion in 1949

air

areas

all

including

even

television

new

the

that,

COMMERCIAL

going

year,

in

plants

the

coun¬

partment

or

using intra-store
this

becomes

an

at

also

the

•

Employ television for
institutional

prac¬

an

state

pos¬

indus¬

fairs,

in

conventions, and

broadcasts to dealers.

William B. Healy Director

advertising,

the1 birth

of

product

a

Be

Co.,

applications of
directions

new

business/Examples of
wired

Falls

to

the

direc¬

new

television

for

B.

was

the

of

and

elected

Waterloo,

Northern

of

a

Railroad

stockholders'

at

meeting

held March 15 at Waterloo, Iowa.

B

,

Cohan

in Sutro & Go,
SAN

ber

the

of

Supervi¬

has

Governor

Exchange since

of

1944

been
the

and

;

not

be

for

open

business

was

formerly an officer
Corporation.

To Acquire N. Y. Stock

The Board
New

York

March

31

Street,

fer

the

of

of

of

admit

Charles

to limited

J.

A.

the

will

will

on

John

Exchange,

Exchange membership

F.

Hughes to Herbert H.

April 1.

termed

television
"neart

a

indus¬

stimulat¬

try

ing flow from
thousands
veins

of

and

;

capillaries

of

prod uction
and
out
John

K.

pumping
economic

lifeblood to

West

as

many arteries
of commerce." He
stressed the im¬
portance of such industries as es¬

sential to the
maintenance of
economic

strength at

fvarious ideologies
ing in competition
and

support of

time when

a

are

perform¬

for

the

the

favor

people of the

world," declaring that "how
cessful

how

will

ours

colossal

of

well

Lion Oil

our

be

in

arenas

suc¬

this

most

depends

American

on

Management

makes American
economy work."

j Citing the industry estimates
an

annual

around

production

5,000,000
television
by 1953, Mr. West

ceivers

mated that the

raw

of

of

rate

re¬

esti¬

material from

ASSETS

v

.:

which

billions of parts are fabri¬
cated for television would
aggre¬

gate annually 200 million pounds
steel, 47 V2 million pounds of

of

40

copper,

aluminum

million

and,

for

pounds

picture

of

tubes

alone, 83 million pounds of glass.
Wood

required

-cabinets

was

for

ability to

at

over

serve

as

a

the

economy,

speaker said. Among the
examples
of television's
selling power which
were

Macy's sales of 10,Howdy Doody dolls, fashioned

000

after

the

popular NBC television

marionette,
Christmas;

at

$9.95

each

last

the
95J/2%
sponsor
identification won by the "Texaco
Star

Theatre"; a candy company
which, with the aid of television,
able

was

in

95%

and

of

to

place

of

a

new

product

New

York's outlets;
Disney hats, in three months
using television, outselling a

rival brand five to
one, where that
ratio was formerly reversed.

Mr.

West

CURRENT LIABILITIES:

X

United States securities
Notes and

accounts

Trade

notes
notes

and

receivable....

accounts

receivable....

$

reported

that

the

number of advertisers
using tele¬
vision had increased 2500% in less
than two years and estimated that
on

Will

result

ume

of retail

"It is

assume

in

via

Crude oil and refined
or

sales

made

Merchandise (lower of

125,570.79

cost or

Materials and supplies (cost

or

market)..

of

the

speed

on

life of officer..

237,865.00

Total Current Assets

§24422,882.09
CAPITAL STOCK AND SURPLUS:

INVESTMENTS AND ADVANCES: (Cost)

Security investments

$

Other investments and advances

Capital stock—•

417,860.30
275,970.91

693,831.21

has

or

par

value:
Shares

Authorized

Property, plant and equipment (cost).... $59,538,793.76
Less—Reserves for depreciation and de-

-

,

pletion

21,447,755.59

38,091,038.17

Issued and
outstanding

Prepaid insurance,
Other deferred

taxes

1,170,365 $12,445,111.69
1,209
24,179.60

Reserved for issue

CHARGES:

Total

and rentals

$

charges

"L171474

$12,469,291.29

322,700.84
345,399.57

~~

Total Assets

,j|\

3.000.000

668,100.41

Earned surplus (see
note)

§63,875,851.88

Total Liabilities

,

23,299,963.41

35,769,254.70
$63,875,851.88

NOTE: By the terms of the indenture
securing the 3,/4% Sinking Fund Debentures Due
1968,
§13,155,475.10 of the earned surplus at December
31,1948, is not available for dividend distribution.

FOR

is

to

have
television
in
of its homes by next
W^shmgton in nearlv 19,

nearly 20%

Angeles
over

in

THE

YEARS

ENDED

DECEMBER

.list:

captured

Philadelphia

in

Without nominal

FIXED ASSETS:

DEFERRED

20,000,000.00

9,473,131.90

with

estimated by next year that over
21.1/2 % of the families there would
have television.

imore

3^4% Sinking Fund Debentures Due 1968

3,612,450.10

Cash value of insurance

LONG-TERM DEBT:

349,481.18

condition

value)

vol¬

already
homes, and

1

2,833,892.71
§ 8,106,597.18

m-VS 5,385,629.83

.

products (cost)

without

lies in the New York area
had television in their

Los

4,292,265.80

products (market

less)

Ammonia

1948

public
acceptance,
Mr.
West
pointed out that 14% of.the fami¬

Jan.

4,027,792.00

Total Current Liabilities

television

tremendous

a

television

expected

Treasury Tax Sav¬

visiting the store, he
by no means fantastic
that, within the next

Indicative
Which

States

6,861,684.71

Inventories:

few years, television will rival the
mail order catalog in
selling prod¬
ucts by phone or mail."
*
y

338,898.19
§

ings Notes (redemption value)

and

notes

150.000.00

the customer
said.

§ 4,933.806.28

television this year.

Demonstrations

to

Less—United

§ 4,442,265.80

doubtful

$25,000,000 would be spent by ad¬
vertisers

Accounts payable

Payrolls accrued

3,369,689.79
1,072.576.01

;

for

V

Taxes accrued

accounts

Total

Less— Reserve

109,295.90

receivable:"-

and

Other

§10,310,323.49

(redemption value)

accounts

selling and advertising force that
television would make its
greatest
contribution to our

he cited

Cash

television

estimated

103 million board feet."
It is in its

LIA1CRL1TIES
CURRENT ASSETS:

15a*>d

Balt¬

18r Mr. West said.




Amount

Net profit before capital extinguishments and

taxes on

Provision for capital
extinguishments....;..

Provision for Federal and State
Net income after all

charges

taxes on

income..

income

§22,415,649.52

1947
Per Share

on

consider the trans¬

Lawrence.
It is understood that
Mr. Lawrence will act as an indi¬
vidual floor broker.

Fitzsimmons

partnership

of

Governors of the

Stock

<

Exchange,

First

Exchange Membership

Cahill & Bloch Admit

Stock

The

on

the Board of Governors.

York

of

Boston

Saturdays commencing May 28
and through Sept.
24, by action of

Cahill & Bloch, 11 Wall
New York City, members

—

gomery
Street, members of the
New
York
and
San
Francisco
Stock Exchanges. Mr. Harter

mem¬

Outside

The New York Curb Exchange

will

CALIF.

will become a
partner in Sutro & Co., 407 Mont¬

a

Curb

a

FRANCISCO,

Robert L. Harter

Supervision
Committee during that time.

di¬

Cedar

Mr.

Class

Outside

on

23

Harter to Be Partner

in

partner

a

Pershing & Co., has
Exchange

New

annual

Appointed

been appointed
Vice-Chairman of
the
New York Curb-

Healy, Comstock &

Chicago,

rector

alert to

are

William

t

material to final incor¬

raw

firm

Committee

prestige from promoting

commercial

the

sion.

/

■

E. J. Cohan

and

■

television's
tions

attraction

(1303)

Edward J. Cohan,

(5) Weigh the promotional

trade shows and

poration of quality features.

(3)

Ultrafax,

sibilities of television, as

>

showing
from

when

1

tele¬

on

intercom¬

established service, and

services for effective

vision.
(2)
tical

stores

trial

presenting them

etc),

television

(1) Explore television as an ad¬
vertising
medium
and
search
of

visual

CHRONICLE

(4) Plan to cooperate with de¬

grams are:

products

(safety,

munication,

try would have television in their
homes by next New Year's
Day.
Five ways in which he
sug¬
gested that management harness
television to its marketing
pro¬

ways

FINANCIAL

hospital television.

over

television

over

&

Amount

Per Share

$19.15

§15,044,767.17

5,178,780.24

4.42

3,432,185.11

2.93

5,514,437.00

4.71

3,621,294.73

3.09

11,722,432.28

10.02

7,991,287.33

6.83

$12.85

24

(1304)

THE

COMMERCIAL

CHRONICLE

FINANCIAL

&

John McAdams V.-P. of

Securities Salesman's Corner

Adams

By JOHN DUTTON
One

the

of

why

reasons

as

of

John

V.

their

firms

of

tne

successful

are

loans

modity

SELL.

cies.

In other words, they have a plan for
buying merchandise as

Too

often, it

"half-cocked."

to

We get

just put

we

some

our

idle cash

some

prospect cards in

or

what

we

studies

grocer

predict

severe

his

trade,

our

he

watches

for

itefns,

new

a

great

the ' coming

Low

will

be

no

mere

depression,
probably
the panic of 1932.

as

Confirmed

Market

By

Stock

(editor

of the "Wall Street Journal" from

he

arranges his stock

1908-1928) in describing the stock

tises

market

attractively, he buys what is in demand, he adver¬
consistently and promotes his services and his values, and he
KNOWS HIS STOCK if he is successful and expects to
stay that way.
Perhaps
life

better illustration is the

a

insurance salesmen

do

life

insurance

salesman.

John V.

policies, rates, cash values, etc.
They sell retirement income, they cover the mortgage, protect the
family or educate the children.
They have definite solutions for

bert

specific problems.

Mr.

When

securities salesman goes out and offers stocks and bonds

a

and that is all he is

trying to sell, he is doing it the hard way—and it
usually won't pay him any big commissions when he does make an
occasional sale. People want to PRESERVE their
savings and obtain

INCOME from their investments.

And some want to do these things
percentage of their assets to SPECULA¬
TION in the hope of increasing their
capital funds.
Who wants
stocks and bonds?
The answer is nobody.
But people do want what
properly selected stocks and bonds will provide.
and

also

allocate

a

certain

Every salesman should have his selling kit organized
has

sales talk to fit all these needs.

a

that he

so

He should also have securities

that he

•

can offer that meet such requirements.
For those who desire
income and safety, he should have a good mutual
fund, an insurance
stock or two, some good bank
stocks, some industrial, public utility

railroad

or

securities, which he could offer and talk about intelli¬
He should have one or two outstanding situations in this
group that are priced below other comparable situations, or that
offer better yield without sacrifice of
safety. These are his account
gently.

openers, his "aces in the hole," when he goes after the order.
After
all, you can't sell unless you give someone a chance to buy a specific
security—generalities, no matter how intelligently presented, do not
ring the cash register.
He should also have a sales talk on the
type of service his firm
is willing and able to render his
prospect if he becomes a customer.
should be able to
say, "Here is what we are willing to do to
HELP YOU do a better job
with your investments." He could offer

He

Frank-Guenther

has

been

is

McAdam$

Good

sell

not

announced

the

number

a

of

clients—ESPECIALLY

CUSTOMERS

FIND

IF

THAT

HE
IT

SHOW

CAN

PAYS

WITH

HIS FIRM.
These two sales talks
the service approach should be used first.

fit

DO

TO

in

WHY

HIS

BUSINESS

together.

Usually

The proper way

to open
analysis first, but sometimes that is

any account is to make an estate
not possible.
Often it is better to make

a
sale to open the account
try to develop it.
It is the salesman who must use judg¬
ment in this matter, but if he has the right securities to offer and

and

then

the service to back them
up, and he knows these two presentations,
he then has his business

organized

is

concerned.

The
find

He

Jonas C. Andersen

special situations of
have

one

or

be based

merit that have profit possibilities.

unusual

two

his firm's ability to

upon

securities

to

offer

that

fall

into

this

With these three items to offer—service to
help his customers do
a

better job of

preserving principal

and securing

diversified group of good grade securities

special items

as

a

door opener

on

his

included, and

steady income,

a

list,, with

a

two

one

special situation for

a

capital gain and appreciation—a salesman has his merchandise organ¬
ized

so

that he

[On
series

can

go out

page 4 of this

and present it

issue

intelligently and effectively.

give two additional lectures in the

we

on

Jonas

C.

Andersen

maximum

one

potential

cover.

The

interest

in

Club

is

anxious

to

brought

determine

is becoming

a

brochure

the

and," accordingly,

requests that inquiries in that regard be sent to Dr. Douglas H. Bellemore,

Chairman, Economics & Finance Department, Boston Univer¬

sity, Boston, Mass.—EDITOR.]

|

Of Customers Brokers

Begins

of

Luncheon

Following
the
dissolution
of
Miller & Dodge on March 31, Rob¬
ert S. Dodge will form the New

PHILADELPHIA, PA. —Loring
Dam, Eastman, Dillon & Co., Pres¬

York Stock

Exchange firm of R. S.
Dodge & Co. with off ices, at 61
Broadway, New York City; Part¬
ners

will be Mr. Dodge and Frank-

lyn

H.

Vogel,

general

ident

of

the

Meetings
Philadelphia

Club, announced the inauguration
of

1949

began

luncheon

March

the

quiring it from Mr. Dodge.

and Natural Gas

Thelma

J.




Speaker

was

Taylor S. Gay, Vice-President of
Phillips

spoke

on

Petroleum

Co.,

who

"The Outlook for the Oil

Industry.

off
in mid-

has

been able to stop depres¬

sions, nor

it do so In the

can

pres¬

criminal negligence to tell peo¬

ple that

depression will be

a

pre¬

vented, thus keeping businessmen
and investors from taking proper
safeguards and precautions.
In my

opinion, the one and only
in which
business panics
might be ameliorated and softened,

way

would be

schools

the

effort to educate the

an

If it

public.

could be taught in
colleges that the

and

tides in business

inexorable—

are

that

high tide in business abso¬
lutely will be followed by low
tide—perhaps the public would in
some

hold

measure

down

the

booms, by going less into the ex¬
cesses generated
by unwarranted
super-optimism.
7
In terms of

been

retracted.

soon

Such

the

unemployment, there

perhaps three million unem¬
ployed in the United States at the

Dow

brokers and

representatives

,

undertaken

has

by the Associa¬

York

and

the Stock

Brokers

As¬

of

Chicago, it was an¬
by Archie F. Harris,
Merrill Lynch, Pierce. Fenner &
Beane, and
Frank
M.
Collins,
nounced

Hornblower &
of

the

New

Weeks, Presidents

York

and

Chicago

groups, respectively. An organiza¬
tion

meeting of representatives
various, cities is to be held
in New York, April 20.
■
"This organization of employees
will bring in contact the men who
from

millions

of

investors

parts of the country.
be

of the

bring

the

in

all

business

realization

on

public; to
that

Main

Street is Wall Street, and to pre¬
sent
this
point of view to the

government

and

Exchanges."
The

two

have

been

York

and

the

to

national

Mr. Harris stated.

major organizations
existence in New

in

Chicago for ten

years.

planned to encourage similar
independent
groups
throughout
country and bring them to¬
gether in a national federation.
being sent out to regis¬

are

representatives

New York

in

in

office

cities

throughout

the

country.
committee

a

posed of Thomas"B.

duPont &

Co.;

M.

Meek, Francis

Co.. Chairman; Jack

Hayden

Donald

com¬

Ross.

Co.; N. Leonard
Stone
&
Co.;
Dean

Witter

&

C.

Blanke, Eastman
Co., and Armand Fon¬
taine, Merrill, Lynch, Pierce, Fen¬
ner

&

&

Beane

Constitution
the

.April

in

con

group

to

is

drawing

be

meeting

i unction

up

submitted

and

with

a

to

By-Laws
a

was

to speak—the elec¬

the

have

tension..

The

been down,

Republi¬

today predict future business con¬
ditions, just as they did in 1920,
1929 or 1937,
o/ at many other
times in the past half century. 1
recall

never

an

era

such

as

the present, when the clear warn¬

ings of the stock market barome¬
been

universally dis¬

so

regarded.
stated

originally

was

by Sir Isaac

Newton with
physical objects, it
applies to economics as well: "To
reference

to

action there is

every

equal and
A small busi¬

opposite reaction."

an

boom would logically be fol¬

lowed

by

recession.

moderate

a

large-scale boom would log¬

a

ically be followed by a large-scale
depression.
The business boom
during and following World War
the greatest ever recorded.
predict that, the business panic
following this boom will also be
II was

I

the

drastic in

most

economic

the

history of the United States.
Can

business

prevented?

I

am

to

around

spend
defeat

to

But I

and

destroy

Hitler

and his

positive that

am

pay

day for the goods destroyed will
arrive

in

human
ment,

the

of

form

suffering
and

—

want,_ and
unemploy¬

of

lowered

a

standard of

living in this country.
time

-

The

war¬

inflation

merely postponed
the pay day, but could not elimi¬
nate it. Pay day is now about to
arrive.

similar
Business Tides Are

in Chicago.

ingot

well-defined downtrend in

dropping

1949,

probably

below

I predict that in

1950

or

will

drop below 30% of capacity.

1951 steel ingot production

Present

Stock

Prices

High

profits will

Corporate

show

a

marked decrease in 1949 and 1950,
due in

great measure to losses on
Dividend
payments

inventories.
will be

sharply reduced, and divi¬

omissions

dend

will

in¬

become

creasingly numerous. As for com¬
mon stock
prices, it is always true
that when prices are down, no one
ever

visualizes how high they will

And when stock prices are up,
neither
investors
nor
advisory

go.

services

ever

that

levels

.visualize

will
the

At

the /low

eventually

be

time, I
regard the current level of stock
prices as quite high. I think that
stock

present

prices will drop below the
and will at least ap¬

1942

lows,

proach the 1932 stock price lows.
I

do

think

not

bond

prices

reached
In

that

have

their

by

long-term
means

any

lows.

market

bear

believe that all
evidence points to the conclusion
that we
are
now
in the
early
stages of a severe business panic
of

general

will

I

summary,

be

many

of

and

scope,

extended

respects,

think the

I

that

one

duration.

In

com¬

ing business depression will be
as

as

the panic of 1932.

my

we were

$200 billion worth of goods

order

allies.

under

be

emphatic in

well

I predict
production will

60% of capacity.

severe

depressions

approval of the fact that

in

a

reached.

Although the law

ness

start

after election day

down in November, 1948 in an¬
ticipation of the coming business
panic. Stock market movements

can

steel

move

Democrats. Stocks plunged

obliged

In New York

Richard

would

tension

market

to

dropped

that

merely the trigger that

in stock prices
cans or

The

stock

so

up,

released

of

Stock Exchange mem¬

90

the

was

But

It is

tered

wound

Its aim will

securities

results.

in

sev¬

to promote better understand¬

ing

right after election day in
nothing to do with the

spring
tion

oc¬

30% of capacity in 1932.

had

ter have

handling the accounts of

duction

progresses.

curred

Unalterable

Appoint Officers of
Pfiila.-Balt,

Exchange

At the meeting
Governors

of the Board of

the

of

PhiladelphiaExchange, George
E. Snyder, Jr., Geo. E." Snyder &
Co., Philadelphia, was appointed
Vice-President; Merriam B. Barthold was named Secretary, and H.
Gates Lloyd, Drexel & Co., Treas¬
Baltimore Stock

urer.

Appointed for three-year terms
Edward
Hopkinscn,
Jr.,
Co., Philadelphia, Trus¬
tee of the Gratuity Fund, and C.

were

Drexel &

From

meetings which

23.

partners,
Dodge,
limited
partner. Mr. Vogel will hold the
firm's exchange membership ac¬
and

Bond

Oc¬

go

The stock market crash that
1948

national organi¬

a

customers'

registered
been

Dillon

Open: NYSE Finn

in

election

Formation of
zation

Jarvis,

Phila. Bond Club

no

market

a

1949

To Form Nat'! Ass'n

B. Huhn. Bache &

R. S. Dodge & Oo. lo

as

error

in

never

,

I.

<

an

inevi¬

are

has

are

it is

made,

tangent,

if

but

business

in

Government

present time. I predict that un¬
employment will rise substantially
theory bear
in 1949—and that within the next
members of the New York Stock market
signal, which was clearly
Exchange, to supervise underwrit¬ given on Sept. 27, 1948. That this tvjo years the unemployed will
number between 10 and 15 million.
ing
and
trading
in
municipal warning to investors and business¬
Steel
ingot production has ap¬
bonds.
He
was
formerly with men was valid, was demonstrated
Blair
Holdings Corp. and Blair by the post-election stock crash, proached or exceeded capacity op¬
eration for so many years, it is all
& Co.
and by the adverse business news
but forgotten that steel ingot pro¬
that is beginning to appear, as

bers
such

stock

tained

Letters

together under

York

is

retraction, and warning of a
future business panic, was con¬

being published in the "CHRONICLE."

The Boston Investment Club

New

There

the

erratic

an

1948;

Kuhn, Loeb & Co.,
Street, New York City,

the

has received inquiries as to whether the entire series will
be

the

on

that

associated with

INVESTMENT SALESMANSHIP, sponsored
by the Boston
Investment Club and Boston
University, transcripts of which are
on

falls

the

52 William

the part of the general

category—and he should know them backward and forward.

can

mar¬

before,

casionally the market does

With Kuhn, Loeb & Go.

are

sales talk should

"There

does foresee future business.

eral

third

should

far as selling and merchandising

as

/

shadows

Exchange."

question

sociates

and

shadow
Stock

agency.

tion of Customers' Brokers of New

OTHER

their

cast

New

helpfulness and the importance of his service in maintaining steady
income and preserving capital.
This is the approach that wins confi¬
dence

said:

small that it

so

Certainly there is
no business so large
that it dare
disregard it. When coming events

associate copy director
York
advertising

years was

of

for

conditions,

business

no

ket barometer.

Corrigan, Chairman of the Board.
McAdams

indicator of future

an

afford to disregard the stock

Law, Inc.,
by Emmett

complete estate analysis!
He could offer follow-up service when
new
items appearedL concerning a client's holdings.
He could sell
a

as

business

no

ent instance. I think that it verges

Action

William Peter Hamilton

can

the past

extremely

an

can

prevented in business
low tide in the ocean.

tides

table.

Low tide

versa.

be

more

than

as

Conclusions

vice

and

in bankrupt¬

that

panic

A

business, just as there are un¬
changeable tides in the ocean.
High tide is followed by low;tide,

on

pocket and go around to
say "hello."
Quite frankly, I believe this lack of organization re¬
garding the products we propose to sell, is a weakness in the retail
end of the securities business that has
existed for years.
A pro¬
gressive

I

drastic

trade out,

can

Result:

recession—it will be

salesmen are asked to go out
situation, go over our customer files,

me,

new

a

determine who might have
or

prices.

business
seems

on

will augment
circle of falling com¬

and sudden increase

selling it.

as

business

inventories

vicious

today is that they not only have organized their sales efforts, but
also, they are DEFINITE REGARDING THE SECURITIES THEY
well

to

widespread scale. Forced liquida¬

Vice-President of Al-

a

'J

(Continued from page 3)
in

Mc¬

tion

securities

some

election

1949

Maiket and Business Panic Ahead!

Albert Frank Agency
The

Thursday, March 24,

Brown. Harris, Stevens

larly

many

particu¬
have come

sources,

governmental,

observations to the effect that

depression

Sewall Clark.

E.

W. Clark

&

Co.,

no

imminent—or that
it will ber prevented.

is

Exchange Trustee.

Brown, Harris, Stevens, Inc., is
engaging in a securities business

in

from offices at 14 East 47th

Past history shows only too clearly

change will close Saturdays from

that there

May 28 through September.

New York City.

Street,

any

case

are

unalterable tides in

The Philadelphia-Baltimore Ex¬

COMMERCIAL' &

THE

Number 4788

Volume 169

FINANCIAL

By JOHN T. CHIPPENDALE, JR.
The

side, despite
to

bond

government

tight

market

continues

minor backing away from prices at the top, attributed

a

money,

quoting down and

a

that some of the re¬

rumors

stricted issues might be made eligible for purchase by

banks.

tions

..

Nonetheless, funds seeking investment

.

this

are

future.

.

.

yields

of

demand
All

.

will

be

of which

are

not be unfavorable to

.

.

The

.

in

demand

attention

from

securities

appealing most to the latter institutions.

the
in

both

small

and

banks,

quarters that it is only

some

significant

very

It

for

is

the

conditions.

Regulation W
tion

to

easier

of

credit

bank

deflation.

REDUCED

with

The

.

change

to

these

.

retard

put out as loans.

.

EFFECT

will

times

as

,

ket, of

the

on

of

LOWER

the

and

municipal securities rose $27,-

000,000 and U. S. Governments in¬
creased

$7,000,000.

markets
there

and

PURIFIED

HIGHLY

OF

WOOD

CELLULOSE

and

seems

HIGHLIGHTS OF OPERATIONS

to fight

to

a

row,

of

most followers

banks

demand for

a

keep

must

1947

funds

long

as

marked effect not only

four

as

five

or

changes in

system.

1948

assets cannot be

as

LA

is influencing the action

curve

$49,964,041

whole.

a

weeks

.

$63,411,202

NET SALES

the

on
.

.

of receding

requirements

reserve

...

effect,

the

on

security

government

$7,070,000

FEDERAL TAXES

mar¬

ON

in reserve requirements of commercial banks of
The answer seems to be too obvi¬
.

4
INCOME

.

.

available to

are

sources

ED

them.

funds to invest

more

With loans

...

the

on

and

made

by these institutions.

A downward revision

demand

the

enlarge

.

effect

beneficial

upon

$10,287,045

.

NET INCOME

.

in

reserve

requirements, which would

for Treasury obligations, should have a
the price trend of all government secur¬

particularly the longer-term obligations, because of the
larger income that is available in these bonds. . . . Although
there would be continued lengthening of maturities in order to
ities,

$ 1,749,345

(

$2,494,749

DIVIDENDS PAID

*

earnings, there

maintain

would

shorts as well

the

of

ing

.

no

doubt be considerable buy¬

sizable acquisitions of the

as

maturities.

mediate-term

While

.

.

part

greater

the

PREFERRED & COMMON

interof

the

newly available monies would be used in the government mar¬

would probably go into state and munic¬
short and intermediate matur¬
ities.
Purchases of corporate bonds, it is believed, would
account for only a minor amount of any newly investable assets
of the deposit institutions. .
.
ket, some of these funds

especially the

obligations,

ipal

.

.

$9.09

.

EARNED per

SHARE

.

bond

under sizable accumulation.
being made by institutions both

again

are

large financial

the

some

centers.

.

.

.

.

.

in

Purchases of
outside of
being taken by
.

and

Cellulose is

The bank 2V2S are
a short period of inactivity,

out-of-town commercial banks after

.

1952-54

due

2s

are

being

put

.

been

have

1956-59

due

again

by

are now

looking for

they move into the ineligibles.

...

a

.

.

.

.

more

completion.

.

.

Switches

in

a

upon

is

swap

that

is Rayonier's business. Research by
a

number of types

is

going

on

our

scientists has

year.

.

.

Rfl von i e r

.

behind the

N COR

P

3

n

/* T

E

D

scenes

quiet way that will eventually have a very important bearing

q4

the future financial policy of non-bank investors, particularly
The results of these get-togethers will
.

.




.42 nd

.

probably mean that future financial operations of these institutions
will be more in line with the spirit of what the monetary authorities
trying to do.

.»•.

;«

of this

re¬

of wood cellulose, each developed to

from

1

considerable

the insurance companies.

are

source

.

securities at prices above the highs for the

indicated

the most productive

give best results in making the end products for which it is used.

of the gravy

SIGNIFICANT MEETINGS
It

are

sulted in

the longest

to sell these

rayon

material.

processes

.

slower pace, be¬

A sizable

products. .Trees

raw

production of viscose

tire cord, cellophane, photographic film, lacquers,

Supplying highly purified wood cellulose produced by chemical

that

banks

.

basic material for

deposit

2*4% due 1956-58 into the 2%% due 1960-65 is in the process
Non-bank owners of dwindling amounts of
partially-exempts, according to reports, have refused

the

of

from

attention

the taps continue but at

holders

the eligible

before

getting

interested in the taxable 2s.

largely

from bank issues into
cause

are

chemical

.

away

banks in the money centers outside of the metropolitan areas.

2'4s

and related

.

.

The

a

and acetate yarns,

probably attributable to the business of income taxes
The
longer partially-exempts gyrate up and down, but progress continues
to be made because buyers are still moving these obligations out of
the market when they are available.
The 2V4S due 1959-62 are
well liked by more than a few of the savings banks and they continue
to add to their holdings of this security.

The

COMMON

continue to be well bought, with the long¬

World Bank securities

maturity

this

ON

TRENDS

MARKET

est

Corporate

Also acquisition of Treas¬

.

.

.

be

greater

ing February the gain was 17%

;

PRODUCER

economic conditions uncertain, investors are generally
very cautious, which means they will seek the safest haven possible
for funds they will be putting to work.
This would seem to
indicate the channelling of the bulk of any released funds into gov¬
ernment securities because they are the safest investments that could

slide,

-15%

NCORPORAT

in

made

were

employed

because the deposit institutions would have

whatever

in

be

markets

money

the Federal Reserve System?
ous,

was

earlier, whereas dur¬

RESERVES

the

be

decrease

a

year

in hold¬

gain of $56,000,000

ings of mortgage loans.

Rfl VOI1I6R

the continued down-trend in loans

now,

could bring about
banks

would

deposits
a

greater

money

passes,

.

While the loan

.

believed that another

OF

What

-

ular
than

reg¬

policy during Feb¬
marked by a nonseas-

was

bolster faltering

inflation

because commercial

Treasury market, but

loans

deposit

making

The loss of loans has created

.

to protect earnings.

.

and

1948,

m

§ Shelton,

Street,

in

last

3%.

Portfolio

onal

November,

as

month

while the amount withdrawn

up

Between

Christ¬

.

was

regular

when

regular January, 1949, the increase in

other

Clubs, etc.).

months,

year,

three

the

ruary

savings,

in

during

corresponding

the

February

same

FROM THE 1948 ANNUAL REPORT

is quite likely to have a much more

member

mas

(school

repre¬

slackening of the rate of
shown

preceding

PORTENT

the government market

bank

the

in

that

The

.

.

uries by these institutions will continue

-of

$17,000,000

accounts

increase

deposits spurted, Mr. Maude said.

The gain

in

$49,000,000

a

growth

Savings Banks and Pres¬
Howard Savings Insti¬

included
and

sented

The

tution, Newark (N. J.).

February

in

the

However,

.

which has been down for eight weeks in

securities

is

to

order

the

forces

same

important

more

at work in order

It

ident

.

the money markets.

of

.

towards

is

.now

alterations

conditions.

RESERVES

government

.

income

Mutual

practically

question of time before

a

the. trend

credit in

on

.

used

The loan trend,

becoming

highest

The

$66,000,000 to a total of $18,581,000,000,
according to
a
report
just issued by William L, Maude,
President, National Association of

deposited

amounts
were

1

regular de¬

slackening of

to have been the first steps in the direc¬

money

doubt
.

.

the

rose^-

States

The

posit growth reflects the fact that

into the longest-term issues

important

an

.

appear

were

little

be

that

markets,

less restrictions

economic

market

the

United

.

1948.

way.

indicated
money

and

ease

is

large

largest banks will be stepping out

a

distant

prices and

diversified, with the eligible obligations getting

well

it is believed in

the commercial

large and indica¬

supplemented in the not too

should

obligations.

Treasury

to be

appears

constructive

the

on

the

of

banks
v

month of

William L. Maude, President of National Association of Mutual
Savings Banks, reports $66 millioft gain in February, representing a
slackening of rate oL growth in three preceding months.
During February the total savings deposits of the mutual savings

Governments

the-corresponding"

-in

than

less

Savings Bank Deposits Rise Slackens
Our Reporter on

23

(1305)

CHRONICLE

New

Y

|

-

26

(1306)

THE

COMMERCIAL

&

FINANCIAL

CHRONICLE

will

Pacific Appeasement and Atlantic Alliance
(Continued from first page)
that may serve tneir ultimate
pur¬

cushion

pose.

As

later

the

Western

same

They

con¬

'Actually, the Iron
not and

most

uneco-.

tnat

taxpayer's money, it its pur¬
is to relieve tne American

pose

market

from

surpluses,

cotton

might

we

similar

or

well dump

as

glorious occupation policies.

the

ments—and; presumably, we will
have to pay that bill, too, even
though
temporarily
the
Com¬
munists will offer trading chances.

suffice to

The disastrous ramifications and

possible Russo-Japanese alli¬
against us.

a

As

corruption

to

farther

deal

ineffi¬

and

than

ought

19*4—and

to

point

be

Marshall who

much

there

worse

will not be raised, and the

torious

corruption

in

than

Greece. (And what about the

Curtain has

said

be

previous period—it

ciency in Nanking: they could not

be it peace, or be it war.
'

the

tnreat

at

Russia's siae

are on

in

about

them

tradiction of their previous utter¬
ances.

Britain's

investments

be

nomic way of wasting the Amer-,
ican

Sterling Area, another weakening

of

no

will

so

would

the

of its international balance of pay¬

As
a
matter
of fact,
it was
that controls China, unless American "guidance" that has been
should rearm the Nipponese—
essentially instrumental in ruining
the additional and perilous risk Cnina.
Without going back mucn

ance

is

and

billion dollar

the

as

from

off

part of the world. It will be an¬
other blow, in the long run, to tne

ineffective trickle.

an

it

cut

we

with

West—which

to

mainland,

refused

China, in addi¬
restricting our material aid

tion to

financially

lost

ge

Communists

power

Com¬

munist leaders blurted out the ob¬
vious:
that
they would be on
Russia's side in the event of war
the

have

we

ag¬
On the other, end of the

Old World, notning but the ocean
separates us from a Soviet super¬

matter of fact, two months

a

the impact of Soviet

gression.

Thursday, March 24, 1949

that

out

held

no¬

may

it

repercussions

General

was

than

more

a

of

immeasurable.

Truman's envoy

as

for

up

great

a

about

China's

They

fall

are

likely to

are

into

Japan

of

a

end of the Cold War.

the Pnilippines, and
our
Pacific security belt in gen¬
eral. The recent gains of the Com¬

million

slavia,

munists in Japan—the only coun¬

with Poland.

trade

After

deal

with

ciency in some western European
countries?)
Yet, we shall keep
pouring out aid to Greece, en¬

union

Tse-tung.

try, incidentally, outside the Iron

in

vicious and

hanced presumably to $500 million

the

ourtam

tion of Russian trade with

war—Molotov

Molotov

or no

on

vociferous

as

as

ever,

intended primarily for home

sumption.
Abroad,
munists
never
have

the

con¬

a

ceased

times

to

China.

wars.

take

What

makes

offensive

peace

that

fact

Moscow's

it

pedaling

significant is the

coincides

in

moves

At last fall's session

already
American

with

soft-

Washington.
of the .UN

that

evident

was

current

Government

it

the

carefully

avoided

offending Russia by hav¬
ing the Assembly declare the Ber¬
lin blockade
Then

mission

act of aggression.

an

stillborn

the

came

Vinson

populous

more

present themselves as champions
of Peace—and of "peaceful" civil

ably

times

200

We

are

to

mocracy,
while
annual expense

for

Senator

of

out.

President

Roosevelt

Above all, it was

Historians will have quite

tries

like

Poland,

Hungary,

Chinese

ance

handed

Manchuria

over

not

.

trouble in "digesting" China.
In
reality, only highly civilized coun¬

Czechoslovakia offer

to main¬

the

behind

the legitimate
government,
in* effect

and

to

who

the idea that Russia will have

the back of his ally,

Russians,

the Yel¬

still could have

been kept

tolerated

—

notorious

Alger

Hiss

as

armaments

arsenals

his
-

the

that the

vast

in which

the

surrendering

nists' disposal.

While

and were
fort from

latter

Russia,

U N N R A

charities

being

were

armed and supplied,
receiving aid and com¬

those

to

sending
similar

we were

supplies

and
on

side.

our

Abandoned by

the West and hope¬
lessly out-gunned, Nationalist mo¬
rale had

to

break.

The

remark¬

>yhich have lived

millenniums' 'under
the

sense,

tyranny,

never knew
the occidental

living'Standards

or

above

the barest

they

a

are

existense, are a "natu¬
Marxian set-up. Indeed,
the only ones in which

Leninism has

ever

taken

a

genu¬

ine foothold—of a kind,
i

Nor will there? be any

istic

resistance

in;

a

his

—

strategic and economic—that has
the

prise.
is

entire

world

by

sur¬

The dismay of the Occident
to describe as it is

difficult

to

understand

the

The

Chiang

ap¬

has

stood

parent indifference and indolence

the

blows

of

the

American

public.

This

II

fighting

Kai-shek

for 11

up

of

in

full-fledged revolution, the
fire is flickering in
Siam, British Malaya is held down

regime

under
invaders,

years

Japanese

simultaneously

for several months at Nanking in
spite of their numerical and phys¬

is

as

Dutch

Indonesia, when
infected with the
virus, leaving aside In¬

is fully

Burma

Bolshevist

Commu¬
back, with
very little help from the outside.

social course.

moral fiber of the nation.

China

on

Washington's publicity machine
insists on the corruption and in¬

more, and has

nonchalance
tion in the

reveals

a

deteriora¬

political, if not in the

nist

guerrillas
has

The fact is that the Com¬

experts.

by

strong display of force only,

its

at

bled

has

more,

lost

been more demor¬

dia's

unpredictable

China

and

The money we save

will

Enormous

political

cost

us

expenditures

dearly.
will be

ical

armies

have

been

stalled

superiority, in spite of
desertions and

stant

moralization

side, etc.

on

If they,

con¬

signs of de¬

the

Nationalist

were

so

overly

their

goal,

of

course,

to

revolutions—since

population east and south of China. ~
fe
Asiatic empire by some
The truth is that the Commu¬
sort
of
eastern
Marshall
Plan, nists' Superiority over the Na¬
Truman Doctrine, and lend-lease
tionalists diminishes as they move
combined. As a first imstalment, southward.
They'; lack even the
Japan will have to be "policed" personnel to organize and control
indefinitely, and with an enlarged their conquests. Their real strength
garrison at that.
J
is in guerrilla warfare which only
Nor should the global implica¬ the Japanese knew how to handle:
tions of this development be un¬
by burning up and exterminating
derestimated. China is one of the entire villages. The comparatively
world's greatest
coal -reservoirs, sparsely settled ; Northern areas
in
addition
to
containing vast where guerrilla warfare is at its
quantities of other valuable raw- best and where?!, absentee land
materials.
It is our greatest po¬ ownership is at its worst, are the

notion
is

that

Chinese

altogether

Communism

different

Russian.

That

should

from

the

been

have

by

once

self

-

delusion

destroyed at
Yenan
regime's

the

"peace" term to Chiang Kai-shek:
all treaties with the United

that

world.

tion, putting
such

Communist leaders—who

are

notorious Soviet agents—make no
secret

of

their

America.

hostility

toward

That should be proof in

itself that by
do not hand

sacrificing China

liberals

land-reformers.

will

and

her

over

we

native

to

She

fateful to

in

the

was

weak

a

na¬

that

wonder

after

ordeal, coming in a coun¬
try with loose internal, coherence
and

administrative know-how

an

oriental

on

level,

the

strain

has

proved too much.
such

ordeals,

almost

country would collapse.

any

Now,

we

moralize righteously that the Chi¬
their fate.

deserve

nese

ity,

minimum

a

nical

and

may

suffice

of

In real¬

moral, tech¬

material

support

relieve

to

still

China,

provided the support is given in
the
proper
fashion.
Our. help
since

our

little,

satellite, more
security than all the

years!—

an

another

be

fifty
country

it mildly, from the

Small

After

Already at this stage the Chi¬

it

And

outset.

States should be canceled.

nese

other

any

the

war

but

not

was

also

badly

only

too
construed,

others put together.
As a matter
of fact for us, far greater
security
interests are at stake in China

and much for the same reasons of

than in Europe

internal

servers

were

(as European ob¬

fast in recognizing).

just

there

200,000,000
ple

who

always
highly
would

is

a.

block

civilized
resist

of

peo¬

Russia

under all circumstances and would




the

help

so

to

Greece

has

far to be a failure,

weakness

and

(Russian)
Once

system

external

pressure.

On the eastern side nf the Atlan¬

tic,

as

turned out

shaken

provide
and
as

a

up,

it
It

is

well to put

;

fer

Russia

for armed forces.

shevist system

Baltic

not

South

fantastic vistas open.
Russia

of

grow

as

and

her

The prestige

influence

serv¬

U.

S.!)—were it not for Mos¬

blessing.

The

resumption of trade be¬
the satellites and the Mar¬

tween

shall

it
a

Plan

countries, moderate as
is, coincides significantly with
change of Communist Party tac-

tics
in
France and; Italy.
The
Commies have dropped, for the
time being, their immediate revo-;

about-face several

times

before—

of

imminent

the

war—but

often

openly revolting brand.
It

is

apparent that

ropean

scene,

—within the Cold

making.

The

satellites

sources

is

weakens
square

In

an

in

essential factor that

proportion

to

the

of the distance.

other

words,?not everything

the

on

Eu¬

sort of armistice

a

War—is in

economies

the

of

the

threatened with col¬

are

lapse,

lacking
essential
equip¬
ment, which Russia has promised
and is unable to deliver.
Some

concession
if

it

had

benefits

be

to

made

Western

even

Europeans

as

well, who in turn are eager to
grab any such concession, given
their difficult position. The claims
for Marshall funds for the second
of

year

the

Plan's

virtually the
and

E.

same

operation
for the

as

civilization

western

eclipse.

This may sound

like long-term

it

cinct

politicians.

are

But

pre¬

Hongkong

to

Nationalist

strict

exclusion

as

yet.

Of

China,' but
of

course,

.

are

firsth¬

the interim report of the O.
C.
(Organization for Eu¬

Economic

ropean

had to admit that

Co-operation)

Europe still will have
icit

in

its

end

after

even
a

1952,

huge def¬

American

in

sight.

trade

is

to
on

trade, with
In short, Eastbe

in

resumed

very moder¬

a

ate scale.

The
the

insolvency of Europe and
inability of the Marshall Plan

to cure it in foreseeable

time, nat¬
urally burden Washington's "con¬
science."

So does the fact that all

dreams of European union
of close economic
tween

the

tered

the

on

or

even

co-operation be¬
Westerners are shat¬
rocks

of

constant

Anglo-French, Franco-B e 1 g i a n,
etc.,
monetary
frictions,
while
western

Germany's ruthless
ploitation—somewhat relaxed
the

last

-

ex¬

in

*

few

months—pays divi¬
by slowing down European

dends

fading

into

The
a

alliance program.
The

prospective

unity dreams
military
;
!

sheer

Atlantic

al¬

liance with its multi-billion lend-

lease costs, plus the unabated
tinuation of ERP financing,
expose

the

Administration

con¬

will
to

severe

test

of

public

opinion

a

in

under turn, is anxious to offer such ges¬

military help,

*

E.

reconstruction.

of
Russian-controlled
Manchurian arsenals and supply

worries

of

"peace¬
fully" boring Marxists that of tne

are

proximity

afraid

more

true ,.domicile

.,<$? Chinese Com¬
Also, lh the North, the

it

respective governments which

are

the
Jdea jdiscussed in the National this country. All of. which helps
Security Council (Washington) in to explain its receptiveness for
early March (according to news¬ every
gesture
of
peacefulness,
paper
reports)
to
resume
the temporary as it may be, emanat¬
sending of Marshall Plan funds ing from Moscow.
The latter, in

problems of little interest to

This

the

cow's

munists.

will

the symbols of Christian¬

bound to go into

its feet.

Bulgaria have

is lost in China

money, weapons
takes management
on

Seas,

and bounds.
The
sickle will rise in

enough

to

China

"a

with

leaps

ity

and

For the Bol¬

such

deal

and

by

hammer

well

as

reaching from the

the

to

unlimited

slave work

manpower for
as

It will of¬

almost

an

thoroughly

it with

food.

Russia's

Asia

is

date their rule over the whole of

lion

tential market abroad.

to

sizable

consoli¬ Europe, if only

than

of the Nanking (Na¬
regime, deluding the
American public with the foolish

Iron

icing of her external uebt held in
Britain (but not the one held in

West

efficiency

bil¬

the

resumed'simultaneously the

no

toward ^Canton, which is

tionalist)

a

proceeded

Britain—nor could

powerful, they would not hesitate

needed

protect the half

have

comparatively

to sweep

alized by continuous warfares and

to

behind

Poland, of course, could

whenever it suited their strategy.)
by Chinese, and her anti- They suddenly
profess to be use¬
foreign instincts;will be canalized ful citizens and want to collabo¬
against the
West
(Hongkong!). rate. In Italy as well as in
France,
Even the imperialistic longings of this
most recent turn of the ex¬
China—if any .'remain after the treme
left Tielps to allay the fears

munist

a

ma¬

ruled

Communist

The Root of China's Predicament

hard

as

is

:?•

quarrels

badly

and

do with the

controlled China since she will be

present one when Indo-China

riches.

materials

national¬ lutionary plans. (They made much

Communist-

a

Yugo-'

his

of

some

raw

Curtain.

masses

either freedom drt

ral" for

the

constantly

countries-

for

put at the Commu¬

were

ward

who

but also its huge

army,

against totalitarianism. Back¬

successor

only

of

to

and

resist¬

some

1

taken

needed

show,
reduc¬

Tito's turning to

as

for

chinery, have little to

Wishful, thinking in

.

job able thing is that it lasted as long
trying to disentangle the ideas, if as it did. Small wonder that a
"friend," was the next step.
any, underlying Truman's foreign
relentlessly mauled nation dis¬ extermination of her thin middle
Above all, the unblushing readi¬ policy.
It certainly is not an era solves itself, so to
speak, in des¬ class and intelligentsia—will find
ness
to let China go down the in which we economize on foreign
peration. Confusion and corrup¬ an outlet in the direction of IndoCommunist
drain,
spending.
We think nothing of tion become rampant.
scrapping
a
We then China, which is tottering already,
century's investment' in money— $150 million a year spent (with enter
jthe scene with self-assured and beyond. All we will get will
$4 billion since 1937 alone—in much more to come) upon- the
ind^nation over so much corrup¬ be—more refugees to care for.
strategic position, in goodwill^ and Berlin air lift which, incidentally,
The believers in do-nothing-intion, forgetting all about China's
in civilizatory progress, is a ba¬ is totally insufficient to keep the
history, her incomparable sacri¬ China—pretending to ignore the
rometer of the trend in the White economy of its
million popu¬ fices, and our own double-cross¬ problems is a convenient hide-out
lation alive.
House.
(It vegetates pain¬ ing practices and broken promises. for fellow-traveling "pacifists"—
That China would Ipse the Civil fully on smuggling from the Rus¬
argue that the alternative to de¬
in;
For sheer prestige,
War was
to
be expected.
All sian sector.)
serting China would be to drive
The Fruits of Appeasement
strategic advantages of guerrilla we carry on a cold war over a
out the Communists altogether, at
ruined
and
hopelessly
isolated
warfare, plus
Russian
To appreciate the consequences enormous cost over a long period
support,
urban spot, but take no notice of
were on the Communist side.
But
of years,
of China's fall, her immense influ¬
and at the risk of a
that we would desert one of our the loss of prestige in giving up, ence on the rest of
the Asiatic
shooting war with Russia.
This
oldest and most crucified friends, without batting an eye, 460,000,000 continent
should
be
visualized.
all-or-nothing argument is a total
Chinese whose country contains
deliberately lose a most important
Especially so in a restless era like misinterpretation of the situation
some
of the world's greatest
international foothold
even if it stems from Far Eastern
the
political,
the

•

Jehol while they

and

live.
We
Moscow,
behind 300,000,0(M. Chinese
American
know-how
back, and
Truman's provide1
mystifying reference to a "peace and military leadership against
party" in the Kremlin, followed the 25,000 Greek guerrillas, while
by the resignations of Marshall, nothing of the kind has been of¬
Lovett and
Bedell
Smith, who fered against the far better
were
identified with the largely equipped 3,000,000 Chinese Com¬
verbal get-tough-with-Russia pol¬ munists.
But of course, Greece is
the
eastern
Mediter¬
icy of the last two years. Filling vital to
and, therefore
Empire.

fall

>

,

not

to

British

;

her

.

private

Rivaji south of which over Japanese

ranean

Marshall who forced

was

let

to

of

Marshall's

the- top
diplomatic
job
with
America's, one-time Number Two
appeaser, who still proudly claims

It also

determination

That goes to

place, that the

well

as

West

this coun¬
try is illustrated by the prevalence

Nevada) to

Valley

southern China, or even
tain the status quo along

low

stands.

slavia
the

$15

Britain concluded a fivebillion barter agreement

the first

Chiang Kai-shek into letting the

half

Yangtze

or some other reformminded politician down the Kuo-

Tsung-jen,

wnere

Communists enter Manchuria and

may

McCarran

the

(At that time forcing
Vice-President, General Li

$1

year

de¬

a
billion
suffice (to
say nothing of the $800 million
proposed by Bullitt, or the $1,500
million
China
aid
program
of

save

Mao

such

at

years

unholy

they gained votes
lately—speak for themselves. But
fall China must, if our apparent

that it Will

Greece

save

prob¬

important

aware

five

least

at

expense

and

more

an

Communist

the

mintang's throat might have saved
China.)

as against a paltry $180
lately to an at least 75

year,

million

Com¬

with

a

Yugo¬

unabated.
In Russia,
anti-western
propaganda
is
as

cold

•—goes

to force

as

;

More than peace talk is. to some
extent, under way on the European

every

aid to China so
the Generalissimo into

our

iv

ineffi¬

and

new

highlights

Lull in the Cold War

affect Korea,

year

wnere

famine

tures

while

gobbling

up

China.

.

Volume 169

THE

Number 4788

Actually, the Russians may feel
they are "appeasing," too: by
tolerating, without violent inter¬

is

1 that
.

COMMERCIAL. &

Scuttling two principles at once
an accomplishment.
The coin¬
is

cidence

accidental.

not

fore

the. slow

The

luncheon

definite positive aspect of

but

at

trend toward

AH signs from

war.

drim indicate

new

a

in the

Lon-

the British to get into

fresh "con-

direction.

new

turned out to be a

of

readiness

lantic

Pact

is

trick

the

aig will begin
Sunday in
mezzanine. A

noon

the

on

Com¬

Executive

of -the

with:

the

President

Shield

Fred

be held with the

presiding,; will
luncheon.

But the UN

the

E

meeting

activities

of

will

pre-meeting

of

Adjournment

"dud";: the At¬

do

to

of

mittee and State Vice-Presidents,

:

the cold

opening

mee-

o'clock

12

Room

-

"

official

CHRONICLE

meeting.

this drive to
reconstructing West- change, the very foundations of
American foreign policy has to be
ern Germany..
;
•
.
.)
Be that as- it may, the fact is visualized in its broad. political
Entering
that the abandonment of China and economic context.
coincides with an obvious lull in the UN was the first political step

ference,

the

FINANCIAL

be

held

at

4

p.m.

unfail¬ revolutionizing both the geography Sunday. ■■ .v • •
First
and
the
general session will be
history of the
United
ing symptom of diplomatic relent¬
States. ;The process of Europeani- held at 10 a.m. Monday with Wil¬
ing. Another symptom is the-re¬
liam Helis, Jr., Chairman of the
zation has gone far already.
Our
cent

'

versations" in Moscow, an

,

Western

ailing

of

recovery

European currencies, especially of
the Deutsche mark and the French
'

franc:

occurred

not have

it could
it not for

were

relief from acute

a

ternational

with

Following

the

welcome

ad*

featured

at this

session with the

Moriarty, Wichita. The subject of journment of the second session
Moriarty's address will be "The will be at 4:30 p.m. Monday. One
Need For Enlisting Every Inde¬
general session will be held Mon¬
pendent Producer in America in
day with \Y. H. Bird, Wichita,
Our Fight."
Noon luncheon* Monday, will' be
Kansas, presiding.
held in the grand ballroom with
John W. Hancock, Long Beach,
K. D. Owen, Houston, presiding.
California, will preside at the
At 2:00 p.m. the second general
session will begin, with James A. Tuesday luncheon, which will be
Upham, Mt. Vernon, Ohio* presid¬ followed at 2:30 p.m. by a meeting
ing.
A panel discussion by com¬ of the Executive Committee and
mittee

chairmen

on

IPAA's

tional Oil and Gas Policy

Na¬

will be

State Vice-Presidents.

ing will end at 4 p.m.

The meet¬

Monday.

carry the tottering Eu¬
currencies — the
pound
of course, in the first

to

sterling,

Appeasement means * different place—on the back of the dollar.
things at different times. * At the Marshall Plans, Truman Doctrines,
time of the Occident's honeymoon "Bold New Programs" of spend¬

[
:

Arrangements pre¬

on

opening statement key-

27

noting the meet will be given by^ report of the Supply and Demand
President Shield and will be fol¬ Committee, H. B. Fell, Vice-Chairlowed by an address by E.
C. man, delivering the report.
Ad¬

siding.

The
as it be¬
testing of

is,

clearer with the

ropean

Principles at Stake

idea

Committee

Fund.

Monetary

Woods

Bretton

time,

V
The

i

not ours any

longer; it is determined by the In¬

comes

jitters.

war

monetary policy is

dress the

(1307)

When important

people do important things

Soviets, the idea was to ing on a world-wide scale have
win the eternal friendship and in¬ the same implications.
The same
ternational collaboration of that idea
is underlying
the Interna¬
the

"noble

tional

genuinely

Havana

experiment."
It was a
stupid policy, carried
by war-born mass-psychosis. Pres¬
ently, appeasement is a mere se¬
ries of concessions, based on the
desire of the American public to
avoid war, but without
the other side or hope for

trust in
durable

results." It is much the same sitnation as prevailed in Europe in
March of 1939—exactly ten years

.

J

the fail-'
Appeasement,

ago:

disappointment

;

ure

of

t

and further attempts at

the

Grand

over

maintain-

ing the peace by minor concessions, territorial and economic, but
resolution
to
prevent
a
new

v«

,

•

V

Chamberlain's efforts to

Munich.

v.

'

:

V.
•

'

,

they

ments

list

is

and

export

closed.

not

The

regulate our export
prices.
The

to

are

volume

arid
this
major implications

financial,
implications of

monetary,

commercial

process—some
—have

been

succinctly

analyzed

penetrating new book of
Philip -Cortney, Coty's President

in

a

("The Economic Munich,"

Philo¬

sophical Library, New York).
In
ultimate resort, this complex sys¬

exclusive. hoping the Chinese Communists
correlated:
the will kindly consent to do business

are

weakening effects of appeasement
of

near-hysterical

a

urgency

armaments and

fresh

al-

new

•

liances.

.

.

From

the

point

of

view

of

a

balance of power, China
may not be much of an asset in
our. hands.;
However, with China
in Russian hands
the balance is
global

No Atlantic Pact

badly distorted.

could substitute for that loss. What

It
of
the obvious: that the West will
not tolerate Russian expansion by

does that Pact mean anyway?

it

amounts

the

reassertion

the

to

certain limits, it has

force beyond
■

strait-

jackets. Global wheat agreements
and
similar
long-term arrange¬

mutually

be

not

create

[

international

into

policies

by

Nay,
•

put our commercial

to

Congress:

at the expense of

; need

.

not

mc'dus' vivendi

a

Axis

,:

but

with the tem
of
foreign policy and in¬
temporizing concessions ternational planning serves the
China (in favor objective of maintaining and
of Japan) and of Albania (for the
guaranteeing the British type of
benefit of Italy)
went hand in "Planned Democracy,"
which
hand
with
Britain's
accelerated neither has a plan nor is condu¬
rearmament
and
her
offer
of cive to democratic ways of life.
"guarantee pacts" to the smaller We may save very little by wai
nations.
The parallel shows that ing, as we do presently, for
appeasement and war preparation disintegration of China, and by
find

.

Charter, signed in
yet ratified by

Trade

value of

a

verbal demonstra¬

lendlease is not needed; nor would the
Pact
strengthen the probability
:
that
the
lend-leased
material
would be properly used.
If it imV plies new bases (of doubtful strategic importance)
at the front
door of Russia, it merely strength¬
A pretext for a

tion.

with

But

us.

we

may

thing by entangling

lose every

economic

our

and

political setup with the S
cialists of Europe, whose artificial
price and distributive structures,
foreign exchange restrictions, and

domestic

regimentations
to the destruction of
everything our system stands for:
of free international trade, free¬
dom
of
capital flow, free gold
sarily

lead

standard,

disposition

free

individual

choice

of the
fortune, free

his

over

of

occupation at home

or

abroad, freedom from tyranny by
irresponsible majorities and petty
bureaucracies.

new

.

,

.

•

ens

her

argument about our ag-

gressive intentions, and calls for
counter-measures:

•

Russian

more

in Germany, Austria,v and
the neighborhood of Norway*

troops

.

in

•

[ if

occupation

not the1 actual
Finland.""-

!

there

But

cidence

•

of

is

the

abandonment

alliance

China

of

Basic principles

than hits the eye.

•

coin-

the

Atlantic

the

For Mid-Year
TULSA,
tee

have

of America

formation
their

of

19th

19—Commit¬

officials

Petroleum

Independent
tion

Meeting

MARCH

members and

of

the

Associa¬

announced

tentative

plans

for

Mid-Year

meeting to
be held in New Orleans May 2, 3
and 4.

committee v

Advance

to

more

•

with

of

iPAA Rounds Out Pia

will

be held

meetings

Sunday, May 1st.

on

Registrations will begin at 9
in

Sunday

the

which will

be

Roosevelt

a.m.

Hotel,

headquarters dur¬

•

of

U.

so

is

at stake; and
the American system altopolicy

S.

are

"

gether, what is stands for. To begin with, the two moves represent

•

n

•

changes in the very foundations
of our foreign policy.
The Open
Door in the Far East, and NonIntervention
of the

pillars

national
rested

nomic

•

•

•

'

■*

—

in

an

on

which the inter¬

relations

of

this

nation

its external peace,

expansion,

freedom
never

in Europe, were two

as

well.

and
So

domestic
far.

have been discarded

emergency...

eco-

they

ing the meeting.
At

a.m.

the Constitution and

Committee,

W.

icy

Committee,

Chairman;.
1949-1950,
man;

Program

Merle

Well

Earlougher,
Demand

W.

Shield,

Committee,

Becker,

Secondary

Stripper

and

Fred

Chair¬

Chairman;
Committee,

R.

Sir John

one

or

cocktails,

choice

—

Schenley, the

richest of American whiskies.

C.

O.

tions

and forever.

Mueller, Chairman, will meet be¬

Gilbert

A

C.

to be thrown in the ash can—once




only

Supply

Bailey, Chairman; and the Resolu¬

Committee,

there is

and

Recovery

Committee,

finest in highballs

M.

Vaughey, Chairman; Import Pol¬

except

Now, they are

10

By-Laws

For occasions that demand the

J.

AMERICA'S RICHEST BLENDED WHISKEY 86 PROOF. 62'/i% GRAIN
NEUTRAL SPIRITS. COPYRIGHT

1949, SCHENLEY DISTILLERS CORP.,

NEW YORK CITY

Schenley

Mark of Merit

Whiskey

28

(1308)

THE

COMMERCIAL

(Continued from

page 4)

now, I use those two words
and I am going to show

they

mean

little

a

or

later

what

is

on—the

ability to convince

make

is

to

them

gave

a

sells

he

didn't
is

expect

exactly

to

or a

it

here

facts, I1( wonder how some of them

know

is

I

a

powerful

make

what

I

it

I

ing

a

that

talking about: Every
piece of human activity is sales¬
manship.

sells

I

don't

what

care

So

a

is

man

a

it's

out

matter

a

am

this

on

married

piece
was

is

of

nothing

to

else

but

is

the

who

man

will

didn't

back

me

up

into homes where

go

we

Those

think of

even

vac¬

a

in salesmanship the five
play a very important part.
in

men

the

service

got this in the service.

you

feel

the

in to this

Because

..That

is

do about

man,

same

that.

McCrossin

times
the

it

knows

hits

the

top.

steps.

married
a

Whether

it

is

getting

buying this building

or

or

hundred-thousand-dollar bond,

you

through the

go

steps and I
show

let's
to

you

going to try and
what happens.
Well,
am

just exactly what happens
duck
that gets married,

see

this

.

mental

same

know;
Sight

because

I

went

through

that 45
how the

years ago and I forget
thing did happen, but I guess it
happened all right. Well, to give

you a rough estimate how it

hap¬

pens, a fellow meets a girl, takes
her to the
movies, buys her din¬

takes

ner,

her

home, and at the
gate he kind of gives her a kiss
and he gets a
slap. And she says,
"I suppose
you kiss every girl you
take out," and he
says, "Yes, that's

right." And she
get

you

he

lot

a

slaps, too," and
right." And he

"That's

says,

"Well

cays,

I

"And I guess

says,

of

get

lot of kisses,

a

too."

Well, the fact remains
other

they

appointment
out

go

is

that

an¬

made

again to

the

and

movies

have heard it said that the eye is
the window of the soul. Anything

belongs to you; that is
I also say you only remem¬
of the things you hear.
That is why I am going to
put it
you

see

yours.

ber

10%

the

on

blackboard

and

I

hope
that
you
men
coming to these
classes will make as
many notes
as you
possibly can, because you
only remember 10% of the things
hear.

you

And

150

proven

that

years

has

and

ago,

been
more

than

that, 1,000 years ago. People
go to a movie, yet they don't even
the

remember

of

name

the

pic¬
ture.
Yet they see the picture.
They don't remember. You men
are
not going to remember 10%
of the

things I have already said,
unless you get it down.
#

That

used

to

be

great word,
jot it down, jot it down. No mat¬
ter

how

notice

big

a

job

a

it

have,

you

always carry a note¬
book.
Why do we always carry a
note book?
Well, because Emer¬
son
said, "You learn something

thing happens when

same

in to buy

cigar in the cigar
store. I go through the same
steps,
only in about half a second, a good
salesman won't hand me out a
half dozen.

a

He's

out

me

good sugges¬

a

tive salesman.
Sales—A
I

don't

been
are

know

whether

mentioned before,

made in the mind.

pens in the

to make
man.

sale.

on

all

this

know

It all

And there has to be

Now, I

some

this

has

but sales

hap¬

head. And it takes two

ing of the minds
prove

a

is

statements

blackboard.

A

man

right
may

his product, but there
is
step that he muffed the ball

and the sale doesn't
go through.
But you will see it.
I tell you,

gentlemen,

it

(indicating),
meeting of

is

made
up
here
there has to be

and

the

sale to go across;
not

buy, and
you

go

thing,

I don't

for

that

if the minds do

meet, there is

Another

minds

no

will

care

has

it

is,

mental

on

or

a

a

sell

we

brush

thing.

So

you

are

selling
selling

are

are

are

a

the board.

on

get

you

fundamentals
and

once

in your mind
even

put

down

of

you

to

these

salesmanship,

get them imbedded
and

this

same

stuff

bond,

you

in¬

an

are

using

same

principles,

every

piece of human activ¬

because

I

ity is salesmanship.

anyway?"

salesmanship;

only four of
know what they
I do.

they
says

big

But it is

come

Salesmanship

in

them,
are

there

and

just

as

you

well

surprising to

see

and

itself.

what

machine.

thing they

all

sell

bond

a

You

or

so

are

these

the

going to sell what that
thing is going to do. You are go¬
ing to show that man it is going

is

to

customer

50

of

them.

he

doesn't

know

his

product and doesn't know what he
is talking about?
It seems to me
when

a

is

man

selling invest¬
especially, he would have

ments

to know what he is

talking
selling an
gible proposition. Now, my
for instance, when you
put
because

he

fore the

with

automobile.

he

car,

A

just

opens

sees
same

or

an

sells

the

up

a

hood.

Well, I don't know the inside of
of

my

to

change

I wouldn't know how

car,

tire,

a

far

as

as

that is

concerned.

All that guy sold me
hunk of scenery
and fresh air.
"You are going to

beautiful

a

love this,

you

derful."
about

He

the

told

car,

me

but

little

very

he

told

me

going to do for
family. ; "You are go¬

car

and my

going to drive

are

and

was

mountains

to

do,

rather

than

about the automobile

telling
itself.

a

there

car

good

salesman

until he

behind

the

says,

wheel

never

"Get in
and

feel

it," and you sit in there and you
just visualize yourself going hell
bent

75

turnpike
wheel.

miles

as soon

And

senses

hour

an

as

that

come

down

you

is

grab that

where

in, the

the

sense

the

of

feeling, the feeling of ownership.
minute

wheel,
am

you

get hold of that

you say, "Boy,
I guess I
going to buy this thing; this

the

is

man

to

has

culation than

ever

of

the

I

country. ' We

whatever

or

the

old

got

sauerkraut

to

get

it

out

of

we

going

there.

they have got it.
I will
forget when I came to Bos¬

never

I came from New York
orig¬
inally, and they said, "Oh, you're
going to Boston.
That is where
ton.

the Fuller Brush

people

up

brushes

than

up."
all

Co. started. The

there

have

they will

more

ever

use

Well, I said, "That will be
right.

dirt,

As

they

will

long

there

is

brushes.

I

as

need

going to Boston, and
thing is going to happen."
am

some¬

And

when you say
Boston,
and
New
Hampshire

with Maine
and Ver¬
mont, and beating New York, Chi¬
and

cago

ing

the

Philadelphia, and lead¬
world

to

proves

you

for

two

that the

years,

it

money

is

books

I

right here.
One

the

read

ever

greatest

by a minister, a
Bostonian, and it would pay you
was

fellows to get the book, and that
book
is "Acres of Diamonds"—
gave

Dr.

away

Russell

made

$8

a

case

Conwell,

million

of them—by
a

with

man

that

one

talk

just like I am giving you tonight,
$8 million, and gave it away and
died

a

poor

away,

every

lished

a

He gave it all
bit of it, and estab¬

man.

school of education down

in

Philadelphia
with
all
that
money. Money was not what he
wanted., He

wanted only enough
to build these organiza¬
that he left behind him as

money

tions
a

momument for

underprivileged

is

And

here

up

if

I

go

to

a

selling
'

-

the

the

blackboard.
I

are

Now,

said the

in the

mind, so here
it is (drawing circle on the black¬
board). Now, there is the mind of
the salesman and the mind of the
customer. There has got to be ;*
meeting of the minds, or the sale
is
not made.
Now, what is the
first thing, you have got to get?
Well, I put it down like this,
"F.

A.".

Well,

"F. A."

is nothing

but favorable attention.,
I could spend half an hour
that

en

able

just
thing. What is favor¬

one

attention?
is

sale,

the

Favorable

very

atten¬

first step of the

if you don't make it,
through right there. And
the approach, the most

and
are

that

is

important part of the sale. Now,
I

didn't

"attention",

say

There

men.

are

several

gentle¬
kinds

of

attention, you know. There is at¬
tention, just plain, ordinary at¬
tention, getting somebody's at¬
tention.
But
getting somebody's
favorable attention is quite differ¬
ent.

And

there

attention.

But

this

summate
to

have

And
if

I

is

in

sale,

favorable

I

unfavorable

order

to

we

have

con¬

got

attention.

don't

mind telling yoti,
selling insurance or
bonds, and I went into a

were

stocks

or

man's office and

he was dictating
letter, I would say, "Good-bye,
brother, I will see you when you
a

are

of

Even

sight is 85%, and I said

on

you

But

is.

number of years.

a

said

tion

barrel;

it

He

sale.

a

sale is made

we

banks are loaded with it.
Down
here in Boston and New
England
is where we have to take it out

*

.

how is this sale made,
whether it is investments,

how is this sale made?

in cir¬
the

will

I

;v Mh

only remember*: 10% of
things you hear. Now we

didn't

know

you?

you

a

history

"Now,

say,

don't

salesman.

you

And

to

courage

that,

management; I have been

carpen¬

the

ask

still,

Professor

it for

money,

money

in

to

And

priest, rabbi
minister, he is a salesman;
his job is saving souls. Your
job
is
selling investments. Mine is
selling brushes. Now I am selling

So it looks like

money.

more

seen men

buy.

or

You

that

afraid to ask

afraid

church and listen to

day, and
hour, and
day. I won¬

a

of

Emery speaks of
salesmanship he is nothing but a

a

an

know there is

I
a

like

brushes,

of

with

any

these

$2.40

everybody

and

hills," and all that stuff.
telling me what the car is

is

going
me

the

the

see

He

see

about

have any money.

have

she

who

man

hasn't

getting $22

der where

intan¬

brush,
it be¬

cleaner

a vacuum

here

now

of

it and she believes, and the
way

talk

a

about,

is

customer's eye,

who

around

are

actually

when

for

are

time?

your

to fool

painters getting $22

Now, with¬
out trying to make a
speech, or
anything -like that, how in the
world is a man going to be a

they

or

moral

Well,

although
today
you ' could
be
fooled; I understand a man gave
ters

Know your goods.

if

want

electricians

Know Your Goods

success

going to spend
don't

How

sense.

Many

business; I have

anyway,

One

common

with.

that you get it."

see

can

kinds

a

themselves, confidence
They lack con¬
the
people they are

customer

you

is the kind that
has lots of money, and then those
that have some money, and those
that don't have
any money.
That

are

name

in

making

down

three

are

And

me.

they might have the best product
that was ever made, and
they are
afraid to ask. They haven't
got

the

That is the

customers

There

you.

customers.

Yourself
here

over

and

you

business

are

the

men

estimation, I

my

in

had,

product.

business,
that

you.

Well, in
break

investment.

bring him a profit, it is going to
bring him a comfort. You are sell¬
ing needs, wants, comforts, bene¬
fits, all those things. You could

the

for the

Three Kinds of Customers

those

stock

or

on

means

doing

selling, the service,

are

cus¬

(in¬
going to spend a
him, "Yourself";

am

good

and

the

on

fellow

time

fidence

Maybe
they do

But

have

them don't have the
courage, they
don't know how to ask for the

that

get service out of it.

things are
principle of ser¬
vice, as I have already mentioned.
You are selling
comforts, needs,
benefits. Those are the
things you
are
selling, not just going out to

The

turn-over," and

in

thing will do,
they do know what comfort that
woman
is going to get out of
it,
they do know that she is going to

goods. Know your¬

Now,

founded

trying to sell. A man
to me, "I wonder what is the
for the

the

they do, but I don't.
know

.

Know your

in

motor

know

the

to

Confidence

fidence in

out in the

come

don't

Know your customer. And
the close of the sale takes care of

five

reason

sell

thing will do, how
how it
is
trade-

that has to

to
you

great big percentage of men are
turned
over
right, here, and of
course, they lack confidence; con¬

self.

discover what
they know about the things

are

the

of

that

stop

is
made,
marked, and all those things. Be¬

the fundamentals

are

way:

Now,

of these funda¬

some

are

as

custom¬
me

can't

I

steering him and

man,

cause

salesmanship? Well, you know
what they are. I will put it this

a

sale,

a

new

it

of

me

in

the

of

minute.

a

suppose he has 25
know
anything about

or

said

mentals

getting down to
By the way, let

for

a

attention

this

But

the

who

out

are

in

Having

-

lot

It is what

as

letter, you are making
just as in the selling of

These

happens,

got

Study the customer. If I
selling investments, I would
him up
ahead of time; I

look

is

And it has got to be mentioned

what the

apply them,

a'

a

that

I

ing to be able to take the family

or

And

have

doing, and

would find out just what he
if possible.

Now, Mr. McCrossin is here.

letter—of course, when you write

vestment

mind.

this

sale.

through the country and get the
fresh air, it is going to be won¬

get

the
all

to pay

were

hurting."

going to be for the best, the worst,
or
what it is, but it is a
change.

Now, what

their

pay

tomer.

would

teaching him as to the commod¬
ity?
Never mind the price of it.

don't know whether it is

we

we

little




service, you
benefits,
you

Now,

aren't

Now,

tle turn-over at the top. Mr. Molotov is going to do
something else.

was

men

up; I

salesman,

the

a

you

toes

I

You

dicating), I

ers.

here

in governments.
We
saw it happen
right over in Rus¬
sia, they changed their adminis¬
tration, and they are making a lit¬

profit for every¬
body, or the thing is not going to
stand up, as we will
prove when

you

get kind of
warmed up some times.
I
was
asked
the other night,
a

is

investments

your

got to be

when my

is

If

selling comforts.
But through all these
things, there

Well, we are going to show
you all this before I get through
here. This gentleman will tell me

"What

That

And

fast.

got

mind.

man¬

happening

And

couldn't

one

what you are

to the salesmen; it is
right what I don't know.
Why do you
the very top, district
managers,, suppose
the
Fuller
Brush
Co.
sales managers. And I guess it is
spends the amount of time it does

sells

steps.

time is

cleaner-,

sell what that

Fundamentals of

what

same

vacuum

we

do.

with

sale.

whatever

through the

a

life insurance.

brush,

no

going to try and

am

these

your

meet¬

there

or

on

a

a

or

or

needs,

sale, customer and sales¬

a

bond,

your

Process

from

Now, salesmen don't just sell
brush

selling
Mental

something

customers.

a

Single cigar; he will hand

everyone- you

learn

you

The
I go

too

his- old

on

you

meet."
You
dinner, and the first thing you
know they go through these men¬ meet this man, and you meet this
fellow over here, and you meet
tal steps I am
going to put on the
this man here. I am
going to get
board, and the first thing you
know they are saying to one an¬ something from him, and he is go¬
other, "I. guess we ought to get ing to get something from me. I
am going to
jot it down. And so,
married," and there it is.
or

isv in

where

And

we

from

hit

up here (indi¬
There is where you feel;

cating ).

men at the top; some¬
biggest turn-over is at
You don't have to get

the

band."

"Your

say,

way.

sales

would

And he would say,
"Oh, yes, they
are," and he didn't have any toes
at all. He felt them

'',',r.

the

end of the business the

he

beat.- the-

enough to

Mr.

don't

you

stump with his stick and say,
"Gee, that old': toe is hurting to

big thing in turn¬
and that is not only a sales¬
but it hits the managerial

over,

And

who

to college. Eight million dol-*

lars out of

Diamonds."

while

a

not

they

it.'

people
way

you

with

.car.

lecture, "Acres of
your fingers-;,, you feel
.'Well, ..these different
with your mind.
I know that for kinds of customers, you use your
a
fact, because my dad had one •own imagination on that one.
r
of his legs off and
But I can't get away from this
every once in

don't

are

There is where

made,'the tninute

that

feel

turn-over, no matter how you
woman
was a
good salesman or is 85%, hearing is 10%, and touch look at it, and we hope that turn¬
the man
was
a
good
salesman. and smell and taste make up the over is going to be for the best as
They have to go through the men¬ other 5%. Sight is the big one. I far as we are concerned.
tal

Thursday, March 24, 1949

down

McCrossin

senses

a

salesman, either the

going
why he doesn't sell
am

customer

that;

Now,

get

salesmanship; somebody

good

a

Even

I

uum
cleaner, but we come out
with the order, and the same way
in the matter of selling brushes.

of

board.

And

salesman

a

they

on
Sunday,
salesmanship,
going to try to bring that

all

I

for

either

am

board.

a

Mr.
on

ligion, going to church
r

desire

a

something he
didn't expect to buy. And I think

it

is,
doctor, a law¬
yer, or a minister,
or, professors
here selling
education, brushes,
bonds, vacuum cleaners, even re¬
whether

sell.

show you

on

am

create

for

men

come

Why?.

now.

telephone, or even dictat¬ sometimes
letter, and he wonders why agers, the

doesn't

to

know

to

the

class, and their faces

the

he

statement,

because

barges in when I

He

on

profit.

This

and

how

it.

profit, the

a

company has to have a profit, you
have to have a profit.
They pur¬
chase your product at a

r:

reason

that

the sale is.

-

haven't stayed at it long
learn what they should

an

customer has to have
.

big

is

who have

men

very

I have had

vacuum

is

are

what

men come ,in
office, and knowing these

my

CHRONICLE

stay at the thing long enough to
learn anything about it."
There

customer

a

"The

say,

turn-over

very

cleaner, or get by. Some of them do not know
their merchandise, some of them
investment, or
what it might
be—everybody in¬ don't know how to ask for the
volved is entitled to a pVofit. The order, and another fellow doesn't
brush

a

whether

I

"A salesman

who

that

Salesmanship

dozen defi¬

a

I said,

And

happens.

something —it doesn't
difference whether it

any

but I
one.

man

buy."

Now, when

sell

you

a

give

can

something

or

persuade people to purchase
your
product at a profit

,

you

nitions,
simple

lot,

a

you

power

Well,

FINANCIAL

feels wonderful."

Elements of Successful
[

&

not

doing anything." That li
me. Why is it that

unfavorable to
these

men

don't

in

come

of¬

our

fices any more? Because they ran
into too much unfavorable atten¬
tion. The

man

was

busy.

When do they come now? They
come around in the
evening now.
I

home

not

am

in

the

house

10

minutes when the telephone rings,
someone

tate,

or

bonds,
want
Own
me

trying
sell

or
me

me

to

settle

some

something
in

the

my

stocks

else.

comforts

es¬

and

They
of

my

living-room, where they have
at

their

mercy

and

can

put

anything over that they want.
They don't have any interference.
That
is
favorable attention,
no
interference. So when you go in

,

Volume

there,
able

you

have got to have favor¬

attention,

going to

sale

the

or

isn't

go over.

Appreciation of Value.

too

soon."

"Well,

now,

&

COMMERCIAL

THE

Number 4788

169

that

is

perfectly all right. I can bring it
to you
a
week from Saturday,
or I can bring it to you tomorrow
morning.
Which do you prefer?"
"Anything," you say.
All right,

-Now, what is the next thing?
Keep this step in your mind, anything. Well, you see, I have
"Appreciation of value." I go in already closed that sale.
and ask for a cigar, and I like
I wonder if you men ever think
this Blackstone cigar. They have of
shaking your head up and down
quite a story on this Blackstone like this when you are talking to
cigar; before you open the box, a customer. I look up and now
it says, "The cigar of successful
I can see about 50 heads bobbing
men." Whether that is true, or not,
up
and down
like
this.
How
I don't know, but it is a darn good
could you do that (illustrating),
cigar. It used to be XYZ, and they when I am doing this? Mr. Mcwent
down
in
quality, and so Crossin can tell you this is a fact,
forth and so on, and the
sales because he has been at the busi¬
dropped, and that is what hap¬ ness as many years as I have.
pens. I
will show you where it "You like
that, don't you?" (nod¬
happens right here. I can show
ding), and Mr. McCrossin is nod¬
you anything here before I
get ding, too. The minute he nods
through. It also happens to people that head, "That is
perfectly all
that get married, and I will show
right; I will see that you get it."
you
where that breaks . all up,
Now, remember, you can't do that
too.
I
will show you why the
when
I
am
doing
this
(illus¬
divorce
courts are loaded.
You
trating).
Remember, that is a
can't get away from it.
piece of psychology that I know
Here is appreciation of value.
works.
I go into this man. I don't know
too
much
about selling
invest¬
Getting a Satisfied Customer

FINANCIAL

CHRONICLE

I say

is one of the biggest words
salesmanship. So I am going
up there for dinner, and there was
quite a stack of dishes, and this

to

in

that

daughter of mine, who was a Bos¬
ton University graduate, Liberal

men

Arts, she approached me and said,

years

"Well,

have

we

Which

do.

a

lot of dishes to

would you rather do?

Would you rather wash the dishes,
or would you rather put the kids

Which

bed?

to

do

you

And I

not

am

a

put a foot inside

ever

Exeter

Theatre

from

ROTC

with

Boston

about

the dishes, or put the kids
bed?"; that is something for
something, and I wound up wash¬
ing the dishes. I couldn't say No

col¬

i;o

3,000

University, the

"Which do you prefer."

She had
me stopped
right there and then.
I said, "I will wash the dishes."
Well, I heard this statement, and
it, but it is

I don't know who said

true, "I have six serving
men
and they taught me all
I
know, and they are the What, the
pretty

When, the Where, and Why, and
Who, and How." Six serving men,
and you notice all these talks that

thinking. Why? Because
everything happens up here (in¬
dicating),
And
think
straight.
Now, don't take my word for
that.
All you have to do is open
your
Bible, and the Bible says,
"As a man thinketh, so is he."
You

tion

get the greatest demonstra¬

you

lives

he flew

ever!

will,
this

from

your

Odom -when

Honolulu

from

in

get

man

of them.

Mode

to Teter-

N, J. Think straight, and
say, "I am going to make it."
He
tried
it
once
before, -and -it
wrecked him, and he said, "I am
going over," and he went over.
That
is thinking
straight; it is
thinking positive.,V v:
boro,

-

of
1

•

We say

ago,

lesson is

■

one

conduct.

talking to them about
the same things I am talking to
you about.
'
\
So in college they say the first

prefer?"

either

on

whatever you call it, 20

or

29

wash

man

a

lege, but I had Mr. Fuller in the

Well, I said, "I guess I'll wash the
•:
'
-/•••/:' "
' '•/

dishes."

college.

(1309)

::.v,

so

to a man, "You give us
calls a day and you will

many

do

so much business, you will do
$25,. $30, $40, $50 worth of busi¬
ness." Well, that means, say,- 20
calls, we will get $25, $30, $35.

But

he

can't

do

that

in four hours

puts

if

he

day.

only

to
this trianglh, all sides be¬
ing equal, it calls for a full day.
The mode of conduct has got to
be right, or you
don't get the
quality and you don't get the
quantity.
a

So

equal

If the mode of conduct is right
has put in the time, now

•

,

and he

the

responsibility falls

on

or

me

managers. . If he •* has put in
the time seeing the people and he
is not getting the business, then
my

are getting, "When are you
he doesn't know what he is do¬
going to do it," and "Where are
ing, and it is up to' us to find
you going to do it," and "How
So, gentlemen, the right mental out where the hole is.;
; •
are
you
going to do it," and
attitude is just .as-important as
"You're going to do it."
Well, I aavise you men in your
Oh, yes,
what you know.. And- what you
line
of
business, and' I
advise
those six words, powerful instru¬
radiate is just as important as what
ments, but I know there is money
them in my line of business, Plan
-' -•/ '.\ /''*':'!:,":''
Now, this gentleman said a week ments.
'5'' ' /"/ ''M'
being made at it, because I know from
you say. I could get up here and
your work in advance, and then
Saturday will be all right,
talk to you, and they, would say,
this boy that was spoken of has
Ability* Reliability, Endurance
let that plan drive you harder than
so
there we are.
Now, here is
"That guy is dead on his feet, he
made barrels of money, and he
1 i-SV And Action.
you would ever let any man drive
this customer we have sold this
doesn't know what he is talking
is a Boston University boy.
He bond
I am going to talk about you for
you.
And just like Mr. Odom
to, but there is still a step
about."
You have to radiate en¬
graduated here and went to the to be
coming on from Honolulu to Teipade, and it is a big one, a change now. My hour is pretty
thusiasm;
you
have to radiate
Bentley School. He had been a and this is called
terboro, I just want to say here,
"Satisfaction," near up and I will have to hurry
manager under me,
and every¬ a satisfied customer. That is why up. This is supposed to be a square success.
know where you are going, hoio
thing else, r And he got into this the divorce courts are
to get there, and be willing to pay
loaded; (illustrating on blackboard). Well,
Beware of a Mental Slump!
investment business, and I said,
the price: )'
somebody is not satisfied, either I am going to talk about you. I
Another word I want to leave
"Boy, if that is • the- thinjg " you the man or the
woman, and they am going to call you the four¬ with
Now, gentlemen, I said that
you. It happens quite often,
want
to
do, do it.
But if you
got to court and settle it.
The square man. And what is a four¬ because I have handled' thous¬ success has got to be paid for,
want to do it, go into it with a
satisfaction isn't there, no sale, it's square man.. It is Ability, Relia^
and if you don't pay the price,
ands of men over half the United
vengeance."
And I told him the all
it is never going to go over, I just
over, a lost customer, a lost bility, Endurance—you're a sales¬
States in my time. One thing you
various things, and he understood
man—Action.: That is the area of
want you to look at that for a
wife, whatever you call it. And
want to beware of, and that is to
these things, that he would have
that is what happens when a sale a man, Ability, Reliability, Endur¬
"
beware of a mental slump.
The minute,, for your own benefit.
to know all about his stocks or
is not made.
ance, Action.
Follow those over fellow that ever
/v./'1.;/'...
This is many years old (hang¬
gets to the place
bonds
or
investments.
And he
there (indicating) and see what
Now, your companies, whoever
where he feels he knows it all
ing up a drawing).
I wouldn't
studied until he put it over/'All
they are, must have some way of it says. Ability goes right up here. that fellow is slipping. He is slip¬ sell this fori an
awful
lot
of
right, appreciation of value, the
All these
showing the appreciation of value What does he know?
The very thing I have
ping. Even at my age, and I don'n money.
thing you have to get; you have and
getting the interest, I don't things are founded on service that have to do it, but I still read been talking about tonight is right
to bring
that out.
And that is want to tell
you how we get it you have given your customers
I say, plan your work in
everything I can lay my hands on there.
where the benefits and comforts
with the brush, because you know
Oh, yes.
in the way of selling or salesman¬
advance, have some kind of a
come in.
your
wife knows. ; We call and
Reliability—Has he got the con¬ ship. Of course, nobody will ever plan, let that plan'drive you. Now,
'V;i You have the customer here give them the brush and show fidence? When
you say. to a cus¬ know it all.
Any time,, anything this water coming over this wheel
now
face to face on that chair.
them the brush they are getting tomer,, "I will be in your office seems difficult, it proves you are is the enthusiasm and enthusi¬
And I am taking it right through
for nothing, and while we're there, at 9:30," and you walk in at quar¬ going at it in the wrong way.
asm
is
power,
and every talk
between you and him, and while
we
about salesmanship is the power
open up the book and show ter of ten. Do you call that relia¬
Now, that is a broad statement
I take you through, this happens
them this factory and the beauti¬ bility? Oh, no. Your company says
and ability.
any tipie anything seems difficult
////•'
(drawing a circle and writing ful
pictures. "But wait until you you've got to make so many calls it proves you are going at it the
And over here
(indicating), I
the word "Interest").
You have
see the brushes themselves." Now.
a
day, 18, 20, 25 calls a day, and wrong way. You can't get away say you have got to apply your¬
to get him interested in this thing
your real purpose, "I can bring it you try to get by with six or seven. from it.
self, according to this, to equal
you are trying to sell, this bond to
you a week from
Saturday." You can't call that reliability, gen¬
Gentlemen, success has got to that triangle, face to face with
or
stock.
Now, sometimes this "Fine." All
right, there you are. tlemen.
You have got to
be paid for.
As I said, sight is the customer.
happens in a second, or half, a
Endurance—A salesman has got
Now, gentlemen, there is. what
85%, hearing is 10%. Jot it down, have the" right amount of sleep
second, or a minute.
And other
the salesman can't do; there is to have more endurance, he's got write it
and endurance, and you have got
down, tajke it home. Look
times, it takes hours/ And some¬

you

.

.

.

.

times, it
All right,
is

this

That

the

all.
here, and

happensat

never

we come over

called

"Conviction."

where

is

persuading,

the

in,

,per¬

He is afraid of

his

close; he hasn't studied his
proposition well enough, and he
fails to close.

convincing,

comes

where he is weak.

He knows his stocks,

he knows himself

pretty well—we

to

be

able

to

take the

rap.

He's

to be

wonderful, and

and so
coming to

will find out later whether he does
or

not—he

has

some

idea

of

the

full

of

fire,

full

of

What do you think
here for, a man 68

so on

Well, you notice what I have likes to do the things he likes to
doing here. I started closing do, you can't stop him.
tie these up together, and you get this sale
Action—The weakness is right
way around here (indi¬
around here and commence to put
cating). And so I call that the there, one of the weaknesses. Ac¬
the heat on. Now, here is where ABC's of
Ask for the
selling. You know what tion means Close.
the salesman comes in, the real the ABC's of
selling are, "Always business, and don't be afraid to
salesman.
And the trouble with Be
You have
Closing." Right from the start, ask for the business.
a
lot of men is that they don't don't be afraid to start in
early, something to sell. Don't hold on
create this desire; a lot of fellows
always be closing through your to it; get it over to the customer.
lack the enthusiasm and just don't mental steps here. "You are
going That is what it means. Oh, yes.
create enough desire for the cus¬ to like that."
You don't have to
Remember, gentlemen, the door to
tomer to want that stock or bond say,
"Buy it right now."
"Oh, selling is wide open; -it is wide
or brush or vacuum cleaner.
And you're going to like that, I think
open, wide open. So get your ap¬
you have got to sell those bene¬ you
are
going to enjoy that, I proach, the very first step of the
fits and comforts and needs. Well, think you are going to get lots
sale, and then use your Dersonalas .the fellow says, that is not so
of
comfort
from
that,
yes,
I ity. Everybodv has a God-given
easy*
Well, none of this is easy. think you are." Well, always be nersonality.
Why not cash in on
Selling anything is not easy, it closing, the ABC's of selling, close, it?
doesn't make any difference.
close, close as you go along. Some¬
Everybody has initiative. There
All right, a feeling of owner¬ thing for something. Now, get this,
is no law against a man using his
ship.
Finally, I say to this man: something for something. N o t initiative.
And
again I say, be
"Now, Mr. Jones, we have gone something and nothing.
enthusiastic,
have
enthusiasm.
over
this and the return on this
That is a hard thing to explain, Where
do you get the enthusiasm?
thing is going to pay you 6%, something for something, or some¬ You find it right here (indicating).
and I think that this company that thing and nothing. That is why I It
is ability: that is what it is,
I am talking about is pretty well say, "Which do you prefer?" We
ability. That is enthusiasm. It is
rated and their standing is good, say, "I can bring it to you a week what
you know.
Right here in
and so forth, and it might be to from Saturday, would that be soon this
very building, in this school,
your advantage to get it at this enough," or
"Would thatj be all the first lesson they teach in this
time.
Now, I can arrange to get right," or "Which do you prefer." building, what is it? They taught
that for you, well, in a week or That kind "of reminds 'me of a it to my daughter, and she never
so.
Would that be soon enough, story. I went up to see my daugh¬ forgot it. They teach you to think,
And

on.

or

now

would

And

he

you

you

are

want

might say,

been

sooner?" ter, and of course, she heard me
"Well, that's talk a lot about this word which
it




and

think

straight.

That

is

the

first lesson you get when you go

to pay

notes;

your

have

Quality, Quantity and Mode of

the

All

right, I am going to make
another picture for you ^Writing
on
the
blackboard).
You
men
know what that

picture is; that is
equilateral triangle, three sides

an

equal. One of the strongest things
you
could
ever
build is right
there.

the price for

And what does it mean?

got

have

You

to

You

have

to ask for the busi¬
don't get the business.
I guess you will find that in the
Bible, "Ask and you shall re¬
ceive."
You know, the Bible is
one of the greatest books on sales¬
manship you could ever read.
courage

ness or you

Cooperation. Ninety
the

Now, some men in this room
doing a wonderful business;

success.

got to put in the effort and

energy.

Conduct

He's got to eat right, he's

point.

got to sleep right, he's got to be

enthusiasm.
he has me up
years of age,
customer, but I have them right
of this thing you are trying to in the
full of fire and enthusiasm, talk¬
brush
business who
are
sell, convincing a man that it is afraid to ask the customer to buy. ing to you? Why? Because I love
to his advantage to have
it be¬ Why, I don't know.
it, and I could talk for three hours
cause he is going to get the bene¬
on it and never get tired.
Why?
The ABC of Selling
fits from it, the returns are going
Because I love it.
When a man

suading or convincing the people
that they want to be the owner

over

got to watch his health, he's got
to be right from a health stand¬

don't

men

per

even

cent of

cooperate

with

themselves; they don't give
a square deal, or they
give
their
companies
a
square deal.
*

are

themselves

some

don't

are

not doing so well.

find

will

somewhere

it

blackboard.This

this

is

This

Quantity.

on

is Quality.

And

•

You

here

Conduct.

on

the principle of service.

,

All right,
deuce

a

is

these

is

of

based

the

All

this

Mode

fellow

says,

Mode

of

are

"What

Conduct,

anyway?
Well,

ing.
he

What does that mean?
we have a lot of it in sell¬
A fellow knows his goods,

likes

the

company,

and

the

"Well,
look,
brother, if you make 20 calls or
25 calls with these City of Hart¬
ford bonds that are paying 4Vz %,
company

says,

or
4%," and here is Springfield
paying 3V2 %, there you have some¬
thing for something. And you say,

,

Now, I have down here, Loyal¬

Well,

ty.
years
are

gentlemen,

I

learned

and years ago, where there
standards there can be no

no

supervision, and where there is
no
supervision there can be no
respect, and where there is no re¬
spect there can be no loyalty.
Now, I don't mean loyalty to your
company; I mean loyalty to your¬
selves, and that is what I am talk¬
ing about.
If you are loyal to
yourselves, if you are willing to
pay the price, if you know where
you
are
going and how to get
there and you are absolutely loyal
to yourselves, you are going to

"Which do you

make

Hartford bonds

Now, I am not preaching a ser¬
mon, gentleman; I am just tell¬
ing you in my own way, and I will
just stop right now by saying that

prefer, the City of
or the Springfield
bonds?
Which do you prefer?
I
will see that you get it."
Some¬
thing for something, not some¬
thing and nothing. You can't just
go in to a man and say, "Well,
now, I think that is going to be
a
wonderful thing for you." You
have got to give something for
something, something and some¬
thing, not something and noth¬
ing.
Just as my daughter said,
"Which would you rather
do,

-

a

success.

Life is

a

mirror, for King

and
3Tis

slave;
just what

you

are

and do;

Then
the
And

give

to

best you

the

to you.

world
have,

the

best comes

back
p

30

(1310)

THE

COMMERCIAL

&

FINANCIAL

CHRONICLE

find—to

The textile Art of "Disinflation"
(Continued from first page)

disinflation

government reports.

There

first* in¬

The

battles

have

been

the

over

brisk
the

of

use

verbal

tries

such

coal

as

and

?steel,

President

of the few the

one

has

pe

discovered

lins

that

what

Col¬

Mr.

is

saying is that he feared
that, instead of making a useful
distinction, I was employing the
word ^disinflation" to mislead the

public

to disguise the true-char¬

or

acter of government policy. Hence,
I want to begin by saying I had

who say we
ary

of

with any assertion that there were

those

are

built up an inflation¬
potential during the war which

has expressed itself in actual in¬
flation since, manifest both in a
still larger money supply and in

For

myself

view.

take

I

Inflation

the

latter

the

means

actual

harmless

or

means,

the

would dis¬

we

that the remedy was worse
than the disease. As a matter of

period.

war

It

must

to

anyone

cover

fact, I think the year 1949 will
present very sober and serious re¬
sponsibilities to the American peo¬
both in its private business
agencies and in its public policies
ple,

and actions. I think you

with

that

me

fever

of

getting

inflation

that

and

process

will agree

is

I

the

over

healthy

a

right

am

in

fellow citizens not
get jittery about some of the

counseling
to

my

inevitable
lescence.
mal

phenomena

of

Undue alarm

conva¬

over

nor¬

the
process of recovery, while calm¬
ness and courage will promote it.
But the phrase "nothing for the
public to get jittery about" needs
symptoms

impede

will

give

proceed.

we

as

finance

taxation
basis.

rely

Definition of "Disinflation"

War

or

on

undertaking

an

of

out

II

current

"pay-as-you-go"

a

rather

ernment

than

it

took

to

authoritari¬

induce

men

to convert to

and

business

took

from one

business¬

production,
pay what it

to

workers

to

move

industry to another

for

war

out

women

pay

war

had

induce

to

needed

call

production
of

more

to

home

the

or

to

the riveter's post or older people
back from retirement. We had to

deficit financing on

do

ment

of

stupen¬

a

dous

and

of

transition

the

markets

to

from

buyers'

into

drawing

off

storage tank

a

my

The definition of the term

.ascribed to

me

is

es¬

sentially correct, namely a situa¬
tion in which the inflationary up¬
ward pressure on prices has been
removed.
But I think this defini¬

tion

calls

for

elaboration,

some

and this I shall

attempt to give in

the next few minutes.
Let me begin with an analogy.
Suppose that 32 pounds is stand¬
ard recommended pressure for the

tires

on

You have been

your car.

driving at high speed
hot

stretches

road.

It

<of

that

you

up a pressure

that
But

occurs

have built

may

summertime

a

to

you

carries danger of a blowout.

don't

you

anything
The

the

across

to bother

to

it.

want

about

bang!

Then,

do

tire

rips open.
You get a
deflation and go into the

quick

ditch. But
are

now

better

a

careful

let

driver.

conditions

us suppose you

qualified

that

or

more

there

When

make for

are

mount¬

abandonment

of

price

and

estate

productive and competitive

of

econ¬

ed, to

ability of free business enterprise
challenge of real com¬

when

make

of

the

brief aftermath?
I

I

disinflation is

doesn't

a

warding

the

off the

catastrophic
blind

unforeseen

deflation

that would

and

the

and

de¬

forces.

conditions

I

prise
in

the

several

phases of

For

many

of

those

other prices here, and

this.

as

of

had

later,

several

prominent industrial con¬
spiral by resist¬
ing wage advances and cutting
prices or at least holding the price
cerns

line.

to halt the

The

United

States

Steel

Corp., which had raised prices in

earlier

less adequately

or

old

from

their

people out of

because

at

high

re¬

prices;

another pay envelope was needed/'
It led to rapid labor

productivity,
cost.

As

down

ease

we

position

turnover, low1
high training'

and

where

from the-

industries

•

are;

straining to catch up-rwith their

been

and

capacities

American

case

for

well

believe that

one

of free enter¬

free government

as

is

It

the

tirelessly

and voluble salesmen that

how

out

to

see

not

were

Bankers'

than
in

a

year

Association

is

ago

a

good

point. Similar preventive

half

a

double time.

or

reduce

ers

level,

it

prices to

As

suppli-J

competitive

a

lower materials'
And, finally, most manage-'

costs.

means

ments with which I talk admit that,

there

are

head

that

marginal costs on
up in
the
grew

over¬

easy

days when costs could be passed*
in a sellers' market. With the;
lines of cost

reductions;
of:

under the process

accrue

disinflation, that high break-even
point is not so terrifying. Profits
should be
tained

95%

as

over

better main¬

or

pull at 99

or

capacity

as;

theoretical

of

under

well

the long

strained

the

tions of 100%

recent

condi¬

utilization.

This leads to the final point—.

.

timing. If
in

the

one concern or

series

while

justments

back,

we

are

to

held,
trouble..

others

the

all

industry.
ad-,

make

for

in

reminded of the old chanty,.

I am

"A

tried

long heave,

strong heave, a;

a

heave all together."

We must ac-;
proposition that 1949 is:
in which we complete the
catching-up process and that each,

cept

the

the year

find

we

fit

to

er's

Rear guard

price

adiustment

grow

stale

ficed

to

maintain

was

maximum

employment,
production, and purchasing power
on

the

basis

of

"free

competitive

enjoined

enterprise"

in

the

Em¬

cent

Nor

I

am

Testing

difficult

think

to

one

Year

Not

real

difficult in

postwar

too

testing

the voice of
ness

year—1949,

that

derlying conditions
lacking

are

are

credit
not overbuilt or

numbers

Expanding families

situation is that the current sense-

uncertainty might be converted
a feeling of panic that would:
result in progressive reductions of v
into

business

We

or

and

are

wants.

clamoring

Feeling

danger in the present

of

mercial

with
inventory.
Our
population is in a new phase of
in

real

un¬

topheavy
growth

The

and
not

favorable.
We

fight it.

that

says

of the

of downward price adjustment,-

are sound

in liquid funds

reserves.

It is not

Pollyanna but of busi¬

statistics

basically

first

our

sense

Danger of Panicky

an

are.

the

summed un at the
We must lead the proc-!

was

is

assignment for a
smart as we admit we

as

positions:

immensely reassured in a re¬
off-the-record gathering of

meeting

not

this

v/hile

and

executives when

ess

1949—A

actions against

volume is sacri-.
margin will be fatal. I •

end thus:

ployment Act of 1946.

distributor's

to his user's or

or

tion, that we raise standards of
living and believe that we can

people

over-

made within the1*

are

move.

as

that

and renewals

five-day-week without time and

production and
supply to demand and consump¬

too

organizations

concerned

larly, it means lower machine cost'
by the retirement of obsolete, Ob-!
jsolescent,
or - badly
maintainedmachines. More adequate repairs-'

collectively negotiated wage must show fast foot-work to make
bargains, of radio commercials prompt adjustment to his suppli-'

or

expanded, that inventories were
kept down to safe limits and in
good balance, that credit lines
were
not unduly extended.
The
cautionary program begun by the
more

business

the Year of Disinflation.

Executives

sharply from mid-January have
mid-February, 1948. This was plant
or shortly followed
declared efforts of

there,

partial adjustments have already
been made in parts of the econ¬

broke

accompanied
by publicly

more

and

omy.

overreached itself and farm prices
to

housewives
and

but

steps have
already been
by business executives, by
bankers, or by labor union offi¬
here

stresses

of

farmers, they com¬
the "jawbone

essence

America.

taken

cials

and

deride

I

as

of

wagging jawbone of publicly de¬
bated
legislation ' and
privately

and

needs, formulate and
execute policies and programs to
prolong our period of economic

believe

limitations

action

or

that is the

economic

I

the

and labor and

may, through
intelligent diag¬

business

of

should

out of private

responsibilities

plain of
attack."

we

of

process

he

and

nose

on

government

and

result from

impersonal

belief that

my

best

business" and then, when an Eco¬
nomic
Report of the President
comments

tation of Europe boosted farm and

end

know

sponsible and economically sophis¬
ticated persons. It is capable of

audience

crop of 1947, but by the
that year the movement

somewhat puzzled by the
of
business

am

keep his long

of

corn

drew

which

spokesmen who insist that "Papa

its

how this process works are fairly
well known to such a business

the attempt
of hot dollars to catch scarce goods
caused wages and prices to spiral
throughout 1946 and 1947. This
trend was exaggerated by the poor

a year of slight over¬
employment in part cause and in
part" result of the inflation.
It

four thin

contradictoriness

orders

rational and guided action by re¬

wage

profits taxes. The devas¬

ment Act but

on

■

suggest that

pression

va¬

Spokesmen

only

and

to

down

Contradictoriness of Business

external

economy

action

fast-changing local situ¬

busi¬

grade

government

deficit

a

the

have

we

stimulus
and

American

myself as an
I firmly be¬

ations.

to meet the

can

tailor

ried and

tion is: Are

or

do not believe in

prosperity.
But correct private
policy and individual action are
also indispensable and are need¬

a

Now the fundamental ques¬
we gong to show the

omy.

one

conceive

dependable

sellers'

controls, abatement of the patriot¬
ism urge in bond sales, and repeal
excess

many

policy is
important constituent of any
condition of national

one

goods,

nosis

meanwhile

could

in.

lieve that governmental

markets—

the normal

are

I for
or

economic magician.

have called this speech "The Gen¬
tle Art of Disinflation," to express

•

was

visers.
fairies

monetary

power on scarce

scale, had to build up a great
of monetary purchasing
power, and then sit on the safety
valve
through price and wage
pressure

and

easy

magic, engineered! from
Washington and indeed inspired
by the Council of Economic Ad¬

It marks the abate¬

pressure

purchasing

nessmen

anism, the government had to
what

lable disaster.

the methods of free gov¬

on

an

fiscal

mid-January level.

of savings, chiefly through bond
charge that I was fol¬ sales.
lowing " a technic*ue of calculated
After the war, the process of in¬ health.
We may take off some
dissimulation," I shall now proceed
flation in both the monetary and fat, but we shall not die and need
to
explain the; dissimilation or
the price sense continued to gain not really suffer.
contrast that I was trying to draw
between
corrective and orderly momentum, especially after we
Making Needed Adjustments
released the safety valve through
disinflation
and
a
deflationary
"bust."

tem. There has been

I think naive assumption

This is not, to my mind, a pic¬
of unforeseen or uncontrol¬

petition,

soul of any

which

moderaton, of many men an the
myriad
operational
posts of
gigantic business sys¬

below government support
now recovered to

So long as we continued to

all we

Having thus publicly purged

great

so

World

as

not possible to

was

courage and the

loop/

reasonably full employment in.
the contemplation, of the
Employ¬

tirement

by the managerial skill and

America's

January 1,
trifle lower,

controls,

qualification, which I shall

some

today that it

can

ground

a

hot an illustration

was

of

homes

ingenuity, by the

ture

which

obvious

be

business

into

go

quarters that the prolongation .of
they have gone a
backlog of orders, a small reduc-'
while farm prices broke sharply" prosperity was to be accomplished tion in marginal
employees means
of monetary or lower unit cost; of labor.
till the second week of February by some force
Simi¬

about the

perils lurking in the economic
result—a marked rise in prices,
situation by which we are con¬
wages, and profits—the big balloon
fronted today.
Nor was I trying itself—not
merely the issue of soto hold out a hope that these per¬
called bonds and "monetization of
ils were going to be overcome by
the debt" which occurred during

pleasant

Since

year.-

American

or

year

ered

levels—and have
What Inflation Means

no

whereas in the end

the

—even

progressively higher prices.

intention of fooling the public

no

On the other side

which

over

els of production.
How this is to
be accomplished is to be discov¬

than farm and food products lev¬
elled off in the last five months

prices.

our¬

disturb-;* Last

forward at sustained high lev¬

go

word

of Economic

I

among

sharp

conversion, a "new set of work¬
able price and income relations"
on

the

given

out

the

of depression, war, and re¬

ances

troleum, and some lines of iron
The phenomenal ^ceCouncil inflation. On one side are those and steel.
who say inflation occurred during real
crops
and
large crops of
Advisers, was: "Don't
the war, i.e., blowing up of the cotton and oilseeds turned these
bring me any four-dollar words."
And I have gladly lived up to that money supply, and that since then farm prices down from June for¬
we have had the results of infla¬
ward, after a rebound from their
instruction.
tion, that is, marked advances in February lows.
Prices of other
With the .aid of the dictionary,

struction, and

work

selves—after

recessionary defla¬ and luxury lines but in heavy con¬
sumer goods and
in basic indus¬

or

public official and writer of tion.

mere

Thursday, March 24, 1949

spending.

spending and consumer If industrial and com-,

concerns

abandon,

defer,:

seriously curtail their 1949
plans of modernization and ex-,
or

pansion, this would cause disemployment by construction compa--

materials

nies,

related

services.

producers,

and.

That would

add

more and
better homes.
Ex¬ to the uncertainty of the remain--,
panding communities are demand¬ ing workers as to their jobs. Both
somewhat lesser amount in March
ing more public service facilities. they and the actually unemployed
in conjunction with its denial of dragged on the rope while their Automobiles,
rolling stock and would curtail their buying of dur-;
members were quite understand¬
wage increases.
ppwer, and much plant equipment ables or even retrench on current
ably pressing for wage increases are over age. I see nothing in the consumption.
That would force
Getting Inflation Pressures
as
living costs rose.
Organized past history of American business employers to reduce operations,
Under Control
agriculture in general accepted to justify the thought that busi¬ pinch inventories, discbarge more,
This was a conscious policy of changes in price-support legisla¬ ness genius will fail to
exploit workers, and in general give a
that
would
involve
lower these markets.
disinflation or trying to get in¬ tion
• >
■
further push' to
the downward,
flationary pressures under con¬ levels of government guarantees,
h 1 •
But, oh, that bugaboo of a "high spiral." -;:! ' r- '"o;\
trol.
But it was quickly upset by and that provide adjustments in
But why should presently <dis-break-even
point"!
If
volume
the announcement of a new pre¬ prices of individual products in
drops 10% our profits will shrink, cernible factors be maninulated
paredness program, reduction of line with current and prospective
20% and we'll be on our uppers. into such an untoward develop-;
income "taxes, and the granting of conditions of demand and supply.
We know that t^e eco-'30% and we'll be in the red. And ment?
substantial wage advances to coal But these improvements in farm
so
nomic activity of 1949 will reflect'
says the motor cycle rider on
miners
and
electrical
support devices have not yet been
workers,
the race track: "If I weren't going the' results of total - spending In
followed by price raises in coal, made effective, and some volun¬
this fast, I'd take a spill." And so three major categories — govern- ■
steel, electrical equipment, freight teer "friends of the farmer" are he
keeps the speed up.
menf, -business, and consumers.proposing a reconsideration of the
rates, and other utility charges.
W>e have -practical assurance that,
Disinflation Means Deceleration
I shall not go back to analyze disinflationary policy adopted in
casih
disbursements bv
Federal,'
1948, and urging high and rigid
why these and earlier attempts
I do not wish to seem flippant State,-and local governments will:
to
check the inflationary spiral supports as a permanent policy. or to breathe a too easy optimism. be a little
larger than those of
The real testing time for agricul¬
failed or whether they were bad¬
Nor do I wish to suggest that we 1948. The reported pkms by busi¬
tural policy is coming this year.
ly timed or unskillfully executed.
must keep the inflationary speed ness for spending in 1949 for mod¬
The broad objective of disin¬
The point of interest to us now is
of last year.
Disinflation means ernization, for expansion in some

February,

made

reductions

of

a

for

steps were taken by certain labor
unions or by their executives who

,

ing

pressure, you slow down, stop
the next service station, apply

at

the pressure gauge, and carefully
disinflate each tire to the correct

and proceed without de¬

pressure

lay,

danger

Of
on

or

ever

jumps

all fours, but I think this gives

you

notion of
:by disinflation in
deflation by the de¬

correct

a

what

is

contrast

general

meant
to

pression route.
time said

I have not at any

we are

through

go
or

damage.

analogy

course no

1949

corrective

surely going to
with beneficent

disinflation.

That's

the policy line of a few
bellwethers, -and the mere behav¬

up

to

us,

iorism of the

common

herd.

That

the

process—leaders' policies
and followers' behavior—by which
was

got to the inflationary point
1948, and I believe we

we

of

late

should review the major steps in
that
on

to get a perspective
1949 and its question of orderly
process




(

that

signs

by the last

auarter

of

1948

multiplying that sup¬
plies were beginning to catch up
with demand not merely in minor
were

flation

through

adjustment

has

eral

in

of

times

the
■tV

economic

true

stated sev¬
Economic Reports
been

President
; -r-:

as

seeking

■'•-'•••

•

to

v :}

deceleration, but not the kind of
uncontrolled
tion

that

or

clumsy decelera¬

makes

the

plane
1

;

•>

nose
t

and for cost reduction ran

areas,

little below the 194«
not be curtailed

onlv

a

and

should

they

are

•

if.

to keep operating costs

Volume

down

in

;THE

Number 4788

169

competitive days ot
cost-reducing
improvements. With the volume
unsatisfied

wants

to

Americans,

1949

of

show

should

volume

a
It

production even higher, and
prices adjusted to a better struc¬
ture and a level somewhat but not
year,

Roosevelt's

D.

phrase,

a

of

April, 1949,

enterprise
fear

is

the

to

world

government
we have
possible contagion of
free

great thing

a

unwarranted fear."

Export-Import Bank 0Ks
Credit to Mexico
Grants

$1,518,875

finance

ment.
-

the Mexican

financial agency of

a

Government, to assist in financing
the purchase and exportation to
Mexico of United States equip¬
ment, materials, and services re¬

quired for

treatment plant to be

a

with

connection

in

installed

the

of

distribution

and

!a

water

Ciudad

an

the

systems for

cities

of

Tampico and

in

the

of

State

This credit

Tamaulipas, Mexico.
is

supply

Madero

adjoining

April 30, 1947.
of the
Water Board

Management
under

of

a

representatives
the

nicipalities,

system is
comprised

both

of

mu¬

Federal

State,

organiza¬

civic

and

Government,

The contract for the deliv¬

tions.

the present steel pattern
on the Truman
band¬

climbed

this

steel- plants,

steel market this week is normal

The

deals

charging

trade

authority

because the gray

will

third quarter of this year most con¬
thing of the past.
Steel firms that have
than the regular mill prices for items are drop¬

be

more

a

for the
the
Even the present setups for second quarter delivery

quarter but hardly any large company wants them for

may

quarter.
be canceled if they are not needed.

deals

becom¬

are

the case of large gas
pipe line commitments. But the trend, says this trade paper, is seen
in the sale of ingots for $75 to $80 a ton when they brought more
than $100 just a few months ago.
Selling them at all today is be¬
coming

and installation of the equip¬
ment for the water treatment plant
ery

problem.

a

signs indicate that pig iron is easier to get and that it
Some railroads have canceled a small amount
of rail tonnages, wire and wire products are almost in balance with
demand and alloy steel is just as good as off quota with no trouble
at all to obtain.
Some car builders, this trade authority adds, have
Other

is actually being sold.

plates, structural shapes, sheets and bars, and the word
"reciprocity" is being whispered for the first time in years.

canceled

The steel scrap market,

<

a

normal

steel market is

concludes "The Iron Age," assumes that
may be less than normal

is out., The heavy amount of scrap available for steel¬
makers even at the high ingot rate has again depressed prices, and
prices may be forced down too far and later rebound, but there is
evidence of that this week.
The American Iron and Steel Institute announced

this week

94% of the
steel-making capacity of the industry will be 101.1% of capacity
for the week beginning March 21, 1949, as against 102% in the
preceding week. The Institute reports the schedule of operations
down 0.9 point or 1% from the previous week.
the

that

operating rate

of steel companies having

This week's operating rate is

;

week ago,
1,849,000 tons or 100.3% a month ago, and 1,725,000 tons, or 95.7%
of the old capacity one year ago and 1,281,210 tons for the aver¬
age

Company of New York City. The
remainder of the project will be

of
Hydraulic Resources of the Mexi¬

,

Government.

can

port-Import Bank. These will bear
interest at the rate of 3^2% per

in

outstanding

on

annum

amounts

will be repayable
approximately equal semi¬

annual installments beginning Dec.

The credit will be avail¬
able until Dec. 31, 1950.
31, 1951.

Eisele & King Admit

;

King, Libaire, Stout &

Eisele &

Co., 50 Broadway, New York City,
members of the New York Stock

will admit Maurice S
limited
partnership

Exchange,
Bruck

to

power

STRAIGHT WEEK

distributed by the electric light

y

AUTO OUTPUT IN LATEST WEEK AT HIGHEST POINT OF
and trucks in the United States and

YEAR

Canada

Production of

cars

the

Turnure Admitting

L.

&

50

Bonner,

York
York

& Co.-Blyth

Broadway,

New

of the New
Exchange, will admit

City, members
Stock

Post

William

Haring

to

limited

partnership on April 15.

included

factors

purchases by the government.
liberal marketings of wheat

in

let-down in CCC buying, and continued excel¬
lent prospects for the new Winter wheat crop. Trading in corn was
less active.
Prices touched the lowest level in about a month, re¬
the Southwest,

some

flecting slow demand for the cash article, fairly liberal receipts,
relatively small government buying and talk of a lower export goal
for the yellow cereal.
Sales of all grain futures on the Chicago
Board of Trade last week totaled 158,854,000 bushels, or a daily
of 26,500,000 bushels, as against 33,000,000 bushels the pre¬
Flour prices showed further easiness.

vious week.

market

domestic

The

featured by

was

a

wave

of price cut¬

ting which resulted in the heaviest bookings in recent months.
Cocoa

reflecting

under pressure and prices moved slightly downward,
continued absence of demand for actuals.
Meager sup¬

was

a

plies sent lamb prices in the Chicago market to a new all-time high
March price of $28.75 per hundredweight. Hog and cattle prices were
steady to slightly lower.
Trading in spot cotton markets was somewhat more active dur¬
ing the past week although prices continued to fluctuate within a
narrow range, with final quotations
slightly below those of a week
ago.
There was a slight increase in inquiries but domestic mill de¬
mand was mostly for nearby.requirements.
Some

depressing influences in the

the

of

current situation

included the continued weakness in textile mill prices, particu¬

industrial cloth prices, the continued lag in export sales,
over farm price legislation and domestic mill

larly

and uncertainties

;

consumption.

Reported sales of cotton in the ten spot markets totaled 126,800
bales in the latest week, as against 114,100 bales in the previous
week, and 110,800 in the corresponding week a year ago.
RETAIL AND WHOLESALE TRADE

SHOW SLIGHT VARIATIONS

FROM PREVIOUS WEEK AND YEAR AGO

by the approach of Easter and encouraged by many

Stimulated

promotional sales, shoppers bought slightly more than in the previous
week.
Retail dollar volume in the week was slightly below that
of the

comparable week last year, states Dun & Bradstreet, Inc., in
Most shoppers sought good quality mer¬
moderate

at

an

Seasonal merchandise, it

prices.

was

noted,

increased volume.

Reduced

to an estimated 119,674 units, the highest
compared to 114,223 (revised) .units in the week

(

to be very

1

popular and the demand for skirts, blouses, millinery and
hosiery grew larger during the week.
The retail volume of men's
suits remained moderate, but a slight rise in the sales volume of

Housewives

Bright spots in last week's output were the resumption of

was

noted.

bought

more

food

than in

the previous week,

though the total retail food volume did not vary considerably
from that of the comparable week a year ago.

Shoppers continued to purchase a moderate quantity of fur¬
and housewares.
Floor coverings and lamps at reduced

niture

prices

sold in

were

a

substantial volume.

approached, the demand for garden supplies, plant
and hardware rose slightly.
The consumer interest in electrical ap¬
pliances continued to lag behind that of a year ago. The sales volume
of used cars continued to be limited in most parts of the nation.
Retail volume for the country in the period ended on Wednesday
As

of

Spring

last

week

was

estimated

to

be

from

1

to

5%

below

that

of

a

year ago.

The dollar volume of wholesale orders in the week did not vary

that of the previous period, holding moderately
the corresponding week in 1948.
Most orders

appreciably from
below

operations by Kaiser-Frazer and Willys-Overland and gains by
Chrysler divisions following low volume the previous week, the
agency said.
These factors more than offset a decline in pro¬
duction by Hudson resulting from labor

price sales of women's short-length coats in pastel shades
Cotton dresses continued

evoked noticeable response in many areas.

past week rose

of the year,

preceding, according to "Ward's Automotive Reports."

Lawrence Turnure

bearish

Other

industry for the week ended March 19, was estimated at

ago.

for

con¬

considerable liquidation in wheat futures on the

was

marked-down hats

5,495,769,000 kwh., according to the Edison Electric Institute. This
represented a decrease of 34,860,000 kwh. below output in the pre¬
ceding week; 350,339,000 kwh. or 6.8% higher than the figure re¬
ported for the week ended March 20, 1948 and 736,703,000 kwh. in
excess of the output reported for the corresponding period two years

mark

April 1.

OFF FOR SEVENTH

The amount of electrical energy

and

the past Week

generally easier trend visible in most

a

Many shoppers slightly increased their apparel purchases last

15,7% below the similar period in 1947.

ELECTRIC OUTPUT

leading grains during

with

a

week.

ceding week but a decrease of 87,160 cars, or 10.9% under the cor¬
responding week in 1948.
It also represented a decrease of 131,821
cars, or

in

date

•>,_>

■

market to respond to recent heavy

IN

Loadings of revenue freight for the week ended Marcli 12, 1949,
according to the Association of American Rail¬
roads.
This was an increase of 3,774 cars, or 0.5% above the pre¬

principal

20

BELOW LEVEL OF LIKE PERIODS

1948 AND 1947

totaled 709,326 cars,

Obligations of Nacional Finaneiera guaranteed by the Mexican
Government Will be issued to Ex¬

and

There

sold in

RISE MODESTLY IN LATEST WEEK BUT

CONTINUE

corresponding

the

on

Chicago Board of Trade due in large part to the failure of the

chandise

Ministry

the

by

recorded

its current review of trade.

week in 1940, highest prewar year.

CARLOADINGS

FURTHER SLIGHT

grains.

equivalent to 1,863,800 tons of

steel ingots and castings compared with 1,880,400 tons a

has been awarded to The Permutit

undertaken

Price

here and that it

before the year

no

'
fluctuation

tinued to be irregular

average

More and more of the uncancelable conversion

281.22

the

from

8.8%

year ago.

There were still conversion deals being made this week

allocation under the $50 mil¬

lion commitment to Mexico made
on

government-owned

who

tonnage they can take as a precaution.

project for the expansion and im¬
provement

those

ing a burden to some steel users—except in

Export-Import Bank of
Washington announced on March
21 approval of a credit of $1,518,875 to Nacional Financiera, S. A.,
The

good reasons why

for

ping their quotations to that level, while other firms are casting their
eyes at new customers whom they haven't seen for some time. Can¬
cellations are increasing, scrap prices have slipped hard and some
steel companies are thinking seriously of opening books for all the

third

Jan. 4.

Continuing its mildly downward trend, the Dun & Bradstreet

of

several

comfort

for

version
been

year

daily wholesale commodity price index dropped to 256.34 on March 15,
from 258.81 a week earlier.
The current figure represents a decline

market is dead and that by the

,

to

on

at

are

observes.

second

purchase of water supply equip-

high of $6.12

a

RECESSION IN LATEST WEEK

little

wagon

ago.
The current index figure is 2.3% above the
$5.66, but it is down 5.4% as compared with the year's

date

midyear when negotiations for a new United Steel
contract are in progress.
But even allowing for such an

There

holds

Feb. 8 low of

like

COMMODITY PRICE INDEX SHOWS

101.1%.

uled at

to make free

how

and

"The

work,
to

so

know

we

relationships.
magazine declares, that if the coal strike lasts for

impasse it is still clear that the old "wartime-leftovers" in the steel
market have gone by the board. This week the ingot rate is sched¬

the month
critical to us in

demonstration

the
that

the

INl)EX CONTINUES DOWNWARD TREND

PRICE

If not in the near

then

Workers

to say of

much

the war the
disturbed about is

than two weeks it will affect the steel rate.

future

But it might not

application.

be too

has been

one

states "The Iron Age," national metal working weekly, in its
steel trade. The steel market is now acting
normal market for the first time since the late '30s.
Not only

It is true,
more

affairs, and it was per¬
bit overstated for any lit¬

a

eral

every

year ago.

a

Although changes in individual items were small, the general
trend in food prices during the past week continued downward. The
Wholesale Food Price Index, compiled by Dun & Bradstreet, Inc.,
showed a further drop of 2 cents to stand at $5.79 on March 15.
This represents a decline of 13.6% from the $6.70 recorded on the

that, it is competitive in price as well as in customer

to business

haps

FOOD

current summary of the
like

seriously below the peaks of 1948,
"We have nothing to fear but fear
itself" was not coined to apply

which

shortage

16

25 and compared with

RATE

WEEK

clear this week that for the first time since

was

"extreme"
over,

*

SCHEDULED AT MODERATELY LOWER

CURRENT

FOR

,

consumer

spending and hence employment
only very "moderately below last

Franklin

OUTPUT

STEEL

spend shown by steadily employed
sustained

Small failures with liabilities under $5,000 increased to 37 from

The State of Trade and Industry
(Continued from page 5)

31

of this size succumbed in the corresponding week last year.

cerns

con¬

propensity

the

and

sumers

among

(1311)

CHRONICLE

the

disinflation through
of

FINANCIAL

&

COMMERCIAL

the

level

of

replacement. The number of buyers attend¬
ing many wholesale centers rose moderately during the week and
substantially surpassed that of a year ago.
continued to be for stock

Department store sales

on

a

country-wide basis, as taken from

the Federal Reserve Board's index for the week ended March 12, 1949,

difficulties.

a year ago was 115,556 units and
units.
Last week's output consisted of 89,110 cars and 25,454 trucks
built in the United States and 3,048 cars and 2,062 trucks in Canada.

Output in the similar period

in the like week of 1941, 123,805

decreased by
with

a

from the like period of last year. This compared
(revised) in the preceding week. For the four
12, 1949, sales decreased by 8% and for the year

8%

decrease of 8%

weeks ended March

to

date by 3%.
Retail trade here in New York the past week suffered from

Jacobs & Low to Admit
Jacobs

&

Low,

New

York

City,

New

York

29

Broadway,

members of the

Stock

Exchange, wil

admit Robert W. Bull, Jr., to

nership
Feigus
on

on

April

1.




S.
firm

Roland

will retire from the

March 31.

part¬

BUSINESS FAILURES AT POSTWAR PEAK

the

Commercial and industrial failures increased in the week ended
any week since 1942, Dun &
Failures rose from 179 in the preceding
week, were almost double the 106 of a year ago and were four times
as heavy as the 51 in 1947.
They continued below the prewar level,
however; in the same week of 1939, 298 failures were reported.

March

17

to

210, the highest total in

Bradstreet, Inc.,

reports.

Casualties involving liabilities of $5,000 or more rose
from 154, reaching the highest peak in over seven years;

to 173

90 con¬

whims

of

unseasonable

spring

weather

and

resulted

in

a

./• decreased volume of sales.

According

to

the

store sales in New York

Federal

Reserve

Board's index,

department

City for the weekly period to March 12, 1949/,

from the same period last year.
In the preceding
(revised) was registered under the similar
For the four weeks ended March 12, 1949, a decrease

declined by 11%
week

a

decrease of 10%

week of 1948.
of 8%

was

recorded below that of last year and for the year to date

volume decreased by 5%.

32

(1312)

THE

COMMERCIAL

than

As We See It
effective

leadership

them.

fathers.

The notion

traditions

Once it

is

is, of

and

to

course,

the

the

cepted and applied within the framework of

our

individual in the Senate

■'

particulars.

the familiar dictatorships in

•''v

ac¬

gov¬

the

or

the

who combined

House,

year.

is

of such

quences

System

enough to imagine

easy

.....

we

from

are

of affairs at the
present

able situation in which

laid,

independently of Parliament and apart from that
legislative body, should be the real ruler is as alien to

and

AND

it is to the United States.

will

conse¬

usual

to

imagine them

Of course,

the

we

President

anything
are

HGW

to4 electorates
total

HEARTENING

States

you

Encouraging It Would Be

But how much

more

encouraging it would be if

in

the
fast

as

than
the

IT

WOULD

TO

the

with

which

to increase

seem

the population—

as

which is just the
way it is at the
House.

White
As

modern

our

civilization

the ills which the New Deal and its
aftermath have imposed
upon the economy!
Certain fortuitous circumstances have

more

importance—and

ernments

bilities.

face
In

city

greater

many

gov¬

responsi¬

respects,

have failed to adjust

we

thinking
to the increased
importance of our
cities in political and economic

to

It is

I

makers

about

forget

another

a

mistake to act

were

as

if the

inferior administrative
It is a very serious

mistake—because for

most of

that

they

we

Americans,

ration.

our

population, city government is the

express
'
- "■

,

tality

of

parts

of

been

points,

invaded, fought

the

has taken the steam out of the President's
campaign to obtain
controls more or less
comparable to those exercised

during

the war—that is if the movement ever
had any real steam
in it.
The reluctance of consumers has
caused
many in

Washington to take
controls

of

other situations.
there

must

a

radically different view of drastic
Similarly with a number of
is all helpful so far as it
goes—but

credit.

consumer

This

remain in
many

adjusting the differ¬
that arise between people in

their

daily

lives

in

accordance

with the principles of mutual tol¬
erance

and

The

brotherly love.

closely people are
brought together—the more they
more

rub elbows—the more necessary it
is for them to regulate their af¬

minds a question as to what fairs on a democratic
basis.
In
would happen if
presently there comes a sharp return of meeting this need through local
the upward
surge in prices and a restoration of
activity self-government, our cities are
in business in
among our most important demo¬
general.
cratic institutions.

It

likewise raises

some

other

questions.

business continues to decline and
prices

keep

ing for

we

is

a

obviously

what is

now

nonsense
on

good while to

life

as

a

more

or

come—or

on

soften¬

enter what

less major downward

turn

in

commonly termed the business cycle. What

would then be devised
a

that

Suppose

means

ward movement?

that such plans

of

preventing
Already there

are

a

receive

or
are

a

new

lease

limiting the down¬

that

programs

stage in many instances




to

of the sort

more

advanced

the

rule, and the exception in

many

cities

have

over, and

in

And the cities

have been born again.
Mayor Stokke of Oslo

gress

will

essentially
I

am

Conference

glad
of

democratic na¬
to see that the

Mayors

maintains

lot

course

final

score

added

for

-

up,

things than

more

And

on.

this

when

the

Congress

of

some

the

is

selfish

groups are going to be
pretty badly disappointed.
:
As
I
have
already indicated,
one
of the things we can expect
this Congress to do is to pass a
good housing bill.
pressure

I

told

am

that

of the treas¬

one

ured possessions of your organiza¬
tion is a pen with which President

Right now
little promise,
promise to give you the pen with
which I sign the Housing Act of
I

will

make

you

a

I

1949, when
way

we

tion

it is passed.

can

In .this

mayk another mile¬

in the

program

between

the

of coopera¬
and the

cities

Government

tell

can

You

all

realize, of

give to

the

which

was

that
legislation
the tre¬

course,

mendous

past, give proof that they will
surrender

never

time.

our

the

practice

of

The people of Berlin,

after years under the rule
Nazi criminals, with their

ruins,

have

racy

in

dedicated

the

to

anew

the

teeth

of

totali¬

at

home

our

citizens face

terrible

problems.
But
if
America is to fulfill its
promises,
cities must be

healthful, beau¬

tiful and pleasant places in which
to live and to work.
We have
been making real progress toward

One

It

of
us

has

biggest problems
today is that of housing.

been

obvious

of the

housing.

I

war

ever

that

we

since

have

lar^e-scale action
have

repeatedly

recommended such action. In
par¬
ticular, we have needed a fresh
start in the construction of rental

will

dent

that

the

city

limited

be

financial
I

aid
am

and

confi¬

governments

will meet their responsibilities un¬
der this law and make the
pro¬
gram

success.

a

But I

hope

will go even fur¬

you

For the cities

encourage
lower cost.

can

do

much

private building,

at

For example, cities should con¬

tinue

their

efforts

to

their building codes.
cases

existing building codes

obstacle

an

modernize

In too many

to

the

of

use

are
new

methods and materials and to the

spread

of

prefabricated

housing.
housing is still an
infancy.
It can
grow
much faster, and produce
more and better
housing at lower
cost, if codes are modernized and
Prefabricated

industry

the

the

needed bold and
on

But

cities

technical assistance.

to

democ¬

such

-

Government

providing

of

leaguered outpost is proof to the
world of the strength of the dem¬
ocratic spirit.
Here

to

ther.

dictatorship. The courage
they are displaying in their be¬

less

eral

themselves

practice
very

of the

of

your

task
of
planning and
carrying out slum clearance and
public housing projects. The Fed¬

city in

tarian

the end

their

Con¬

will

facing

ture.

But basically the

passage

mocracy.

In foreign countries, as well as
the United States, cities show

con¬

think

the

give the District
self-government and make it,
like our other cities, a local de¬

in

differ¬

I

of the brave spirit of the peo¬
ple of Norway who today, as in

you

soon

real

these

ac¬

some

begun under President Roosevelt.

is the city you are meet¬
ing in to day, the City of Wash¬ achieving those standards.
ington, D. C.
I hope that the Con¬ much remains to be done.
case

the

urge

on -a

Federal

our

As usual, there is an exception

this

reports suggesting

under advisement "if and when"—

although little to indicate
have reached

or

,

where

the

on

important I shall

disagree

vived in the ruins.

of

method of

agree
we

stone

of

a

Congress

together for the good of the
country. We are going to

many cases reduced to rubble. But
the spirit of democracy has sur¬

democratic self-govern¬
ment which is closest to the
peo¬

ences

has

Housing Act of 1937.

democracy for tyranny. Senator
strengthen the opposition to the President's illVinck can tell you of the
vigorous
The country in a sense ple.
democracy of the cities of Bel¬
In
this country democracy is
stiffening of spines in the
gium. And from Dr. Reuter, Lord
not just a slogan—nor is it a
matter of the
prop¬
Taft-Hartley Law. Softening prices here and
Mayor of Berlin, you may hear
aganda smokescreen. It is a prac¬
one of the most
there, and some recession in the rate of
inspiring stories
activity in business, tice, a way of doing things. It is
advised program at several
points.
has Mr. Lewis to thank for a

chorus

Congress

admi¬ Roosevelt signed the United States

In

the

and
are

to

right.

come

Europe,

our

democracy.
Europe

the

of

work

have given
wonderful example of the vi¬

a

gleeful

a

the

ing together and will continue to

They and their cities
us

howl

a

gress and the President are work¬

the

To

start

how

tions

A

strength

country.

up

.

my

almost

we

newspapers

set

gram overboard. :• , :
•
Of course, I differ with

greetings to your
honored guests who are here from
other countries. The mayors from
Canada are such old friends that
from

many

thrown the whole Democratic
pro¬

of peace.

cause

extend

our

subdivisions.

form

for the

added

come

that when¬

seems

that varies at all from my recom¬
mendations,' these same trouble¬

are cre¬

mayors who are here from
re¬

quires people to live and work
together
in
larger and
larger
groups, cities take on more and

cities

will

it

feeling
Congress and

about the President trying to dic¬
the Congress.
And then if
the Congress makes
any decision

Out of the

of

make

bad

tate to

friendship with

which you
the
cities

.

affairs.

ently there became evident within the ranks of
Congress
really constructive leadership directed at correction of

great

recommendation to

columnists

whole

nations.

a

to

is

81st

Congress,

and

ences

of

there

the

I make

the

quickly

BE

that

the President. It
ever

Congress Fight

United

Washington's

duties

charged

are

of

George

And

almost

pres¬

a

tended

larger

population

day.

as

How

year

a

Feeling for 81st Congress

between

it could

stand would be

now

world,

predict precisely the degree to which such an effect will
be realized, or for how
long, but, despite what are now
special efforts by the President to retrieve
ground lost on Capitol Hill, it is evident that an impor¬
tant blockage has
developed there which is not wholly
ephemeral.
•

satisfactory;

troublemakers

appear

would

(Continued from first page)
home here is that
you are a group
strong bonds
of
elected
executives.
As
an
cities in other
elected executive
myself, I know understanding
something about the problems you
ating among
face. Some of you are responsible

encouraging and heartening. But all
do with forms and
practices of government

"Fair Deal" will not find their
way to the statute books
of the nation. It would
hardly be safe at this time to

described

of

is

will

year

Incidentally, I have been much
interested in the attempts of the

that fortunate state

moment.

Tinman Denies

adopted in Washington. In the present juncture it ap¬
pears to have something to do with them—in a negative
sort of way—and is
encouraging in a negative sort of
way. That is to say, what is taking place appears to be
giving some assurances, at least for the time being, that
some
important and dangerous parts of the so-called
•

this

struggle

the enactment of

No Bad

is

itself

do with the nature of the
policies which

enactment

see

tinue

shaping national policy and did so as contem¬
plated in the Constitution of the United States. Any
development which appears to be heading in that direc¬

It may or may not have

unnecessary

of

legislation for the good of
the people. •
:

role in

to

the

v

end

deal of

HESITANT BUSINESS COMMUNITY.

It is time that Congress again assumed its normal

at all

the

housing legislation. J
In fact, I believe that this

be obliged to decide
whether it would be wise to
go into a wholesale business
of vetoing. And what is
fully as important is the fact
that a basis for
going to the people with the real issues
of the day would be laid.

>

elected

in the United States.

and

that

sight, and that this

see

hardly be expected that the President would be
greatly
influenced. The amount of constructive
legislation that
could be expected
immediately would be limited, but
the groundwork for
really getting us out of the vulner- '

ister.
Moreover,
together responsible to the people, and may be voted out
of office at any moment
by Parliament and sustained by
popular vote. The "Government" across the Atlantic is part
and parcel of Parliament.
The thought that some official,

this has to

believe

long

and influence

of the

some

development—and

a

is to realize how far

Parliament, not Parliament to the Min¬
the whole government is directly £ and

of

i

•

I

,

sible first of all to

is

except

the need for the
program
of the job we must

do.

many

saying, that this Wilson-Roosevelt idea is similar to
the British
conception of representative government.
It is
nothing of the kind. The British Prime Minister is respon¬

tion

it

to

the size

and

preferably at least
head, a healthy and

level

a

has favored

lobby, which has
delay it year after
Every year of delay has in¬

creased

in

long favored
fact, nearly

In

estate

managed

or

for American traditions,

have

program.

real

it,

comparable to that exercised (in the wrong direction)
by
Roosevelt in this
country or by Mr. Churchill
(during the war) in England!
•
r
;

It is nonsense, of
course, to say, as some observers are

.■>

cities

a

re¬

building costs.

Franklin

fond of

as

each,

wholesome respect

It

.«;«

Not Like the British

Britain

in

one

ernmental system, the result, in the hands of a vigorous
and grasping leader in the White
House, would be sug¬

gestive of any of

The
such

The trouble,
obviously, is that few in Congress have
given really serious, constructive thought to the needs of
the current situation; that those who have done
so are for
the most part themselves in unfortunate
degree tinged with
New Dealish ideas;'and those who are
really capable of in¬
dependent and dependable judgments about these matters
appear to lack influence.
If only there were to arise some

founding

fully established and generally

the clearance of slums and in
search to reduce

everybody
.

wholly alien to

ideas of

housing for low-income groups, in

course,

Where Is the Leader?

judicial branches of the Federal Government, must be
the real leader of the nation is having to take some real
body blows now. And experience has shown that it de¬
serves

Thursday, March 24, 1949

efforts to impose fiat control of rising
prices.

was

coordinate with (but not superior to) the legislative and

American

CHRONICLE

might expect of the day dreamers. The fact
that as much danger lies in foolish efforts
lift ourselves up by our bootstraps as in ill-conceived

to

forthcoming somewhere in
Congress! It is in a measure heartening in any event,
of course. The doctrine
preached by Wilson and prac¬
ticed ardently by Franklin Roosevelt to the effect that
the President, although by the Constitution
given a place
.

FINANCIAL

one

is, of

(Continued from first page)

&

in

its

conflicts

tween them

and

are

differences
ironed out.

be¬

We cannot discuss the
housing
shortage without mentioning rent
control.
agree

of

I

with

know
me

on

that
the

you

will

necessity

maintaining

those

areas

rent
control
in
where there are still

serious shortages and few
cies.

vacan¬

Volume

The lobbyists who have been
^fighting low-rent housing r and

by

the

slum clearance have also been try¬

ing to destroy rent control. They

their

local

don't

since

grown

want

to

us

to build

us

low-

new

houses, and they don't want
hold

down the

of the

rents

houses that are available.
If we
had let them have their way, they
'would

whole
10

only have pushed the

not

of

cost

living

another

up

to

20%, but they would have
broken up the homes of thousands
of

low-income

terrible

families.

is

It

and

shocking thing
the real estate lobby—which
tends

to

those

for

speak

a

that
pre¬

whose

business is providing houses—has
become

the

real

the

of

enemy

American home.
Attacks Real

for

estate

the

weeks

lobby has made

real

concerted

a

effort to have rent control turned

to the cities and localities.

over

have

doubt

no

that

the

I

elected

officials of city and local govern¬
ments in most large city areas are
as

strongly in favor

rent control

I

as

unemployed

the

we

instruments

ployment and insure a progres¬
sively growing economy.
In this connection, I hope that
you are all familiar with the pro¬
have

recently made to
the
Congress
for
helping
us
achieve economic stability. I hope
posals

I

that you will acquaint yourselves
with the facts of the case, and not

just

the propaganda. I am sure
that you will find that those pro¬
are

The

now.

that

most

old days, we

concentrate

on

to

authority, but
destroy rent control.

author¬

strengthen
in order to

cities

Postwar
public

debt

their

land

Whole

is

been

stable

a

way

developed.
to*

be

schools

and

public

how necessary, and yet how slow

expensive, this job is. Many
today have inadequate fi¬

cities

to

achieve

the

large-scale improvements that
required.
Here

is

are

problem

at the very
of American life.' A solution

core

a

is required not only in the inter¬
est of the

cities, but also in the

interest of the

State and

Governments.

,

Federal

steps is to bring some order out
of the tangle among' cities, States,
and the Federal Government in
the field of taxation and financial
This

question

know, been high

on

for

In

many

years.

I
agenda

your

the

fu¬

near

is inviting representatives of

State

with

local

and

him and

cials in

officials

to

meet

other Federal

offi¬

preliminary conference

a

to work toward

a

program for ac¬

tion in this field.
Wants
I

Local

have

report to
this

work
for

me

work.
out

I

taxation
for

Coordination

the

Secretary to

the

hope

progress

that

we

of

can

guides, not only
policy with regard to

some

Federal

also

on

and
the

related

policy

matters

of the

but

states

and localities. In these matters, as
in

others, the three types
of government — Federal, State,
and local—must act together in a
so

many

spirit of cooperation for the
mon

com¬

good.
financial

The

the

that

sure

the

Conference

continue

will

lead

to

greater

practice

|

democ¬

racy.

health

of

the

into

them

account

complicated the role
policy was called
to play in our postwar econ¬
For it meant that no meas¬

monetary

ures

could be undertaken to

trol

an

the

expansion

of

con¬

credit

and

were in¬
objective of
maintaining an orderly and stable
market for government securities

supply

money

consistent

with

that

the

rediscount
ness

as

lost its

rate

effective¬

instrument

an

credit

of

yy ■ ■:

banks could offset in

some

meas¬

that

pressures

might
be
their reserve

on

a rise in reserve
requirements.
In
consequence,
relatively small changes in re¬
serve
requirements could mot be

relied

to

on

strictive

effect.

variations
be

an

not

have

in

severely

And

while

larger

requirements

effective weapon,
been
a v a i 1 a b 1
Reserve

re¬

could

they have
e

during

'

the

to

most

of

The Bond

postwar period because of
practical exhaustion of statutory

Support Policy

Now, I do not want at this time
to

again the

cover

of

the

support

and

pros

policy

discretion

Thus,

cons

that

the

System has followed since the end

the
war,

I

as

Suffice it to say

war.

have

the

understood

that,

argu¬

ments set forth

by serious critics,
they have always seemed to be
very uncertain as to just what the

vate

effects

such

of

an

the compensating ad¬

Meanwhile, the
pri¬
borrowers during this period

underwent

the

bank
the

port program has been

necessary

and wise.

Nevertheless, it is true that for
Reserve

System to fulfill the

residual

buyer in the
market

securities

government

placed

limitations

severe

on

the

usefulness of traditionally power¬
ful

controlling
the volume of credit and deposit
expansion.
As a residual buyer
techniques

Federal
a

for

Reserve
of

source

System

reserve

be¬

funds

which commercial banks could tap
at

their

volition by

own

offering
for
sale.

securities

government

Banks also received additional

funds

serve

involuntarily

nonbank

ever

curities

to

with

And

investors

industrial

Banks.

positions

the
a

Reserve

fractional

se¬

Banks.
reserve

system,

of

processes

commercial
extensive

stead
the

a

by

reserves

drawing down
had been per¬

deposits that

mitted

to

in the

war

mercial

accumulate
loan

previously

accounts of

com¬

banks.

end

of

1945

to

1948, commercial and
loans

of

all

insured

Agricultural loans of these
banks rose by $1V2 billion over
the same period, while real estate
loans increased by approximately
$6 billion.
Finally, the increase
for the period in the consumer
loan
category of insured banks
amounted to almost $4V2 billion.

from

banks
need

the

war
no

for

finance,

longer had
borrowing

Federal

through

supported

security sales
market. As a

in
re¬

sult, except for whatever psycho¬
logical impact it might have, the

well

as

and

some

taken

do

not

mean

to

suggest that

post-war monetary policy has

been

a

failure.

significant

There have been

elements

of

restraint,

without which the situation would
have been decidedly worse.

The

most

important

factor

of

restraint

in

1947

1948, Treasury receipts

the

postwar period
has been the Treasury cash sur¬
plus. For the calendar years 1946,
and

from taxes and other
ceeded
about

cash

$14

sources

outlays by

a

ex¬

total of

billion.
This surplus
a
powerfully con¬
effect
directly on the

exerted

structive

expenditure-income stream
and
the supply of credit and money.
Without it the upward pressure

.on

on

prices

have

been

would
more

unquestionably
severe.

Moreover, the System has vig¬
orously used its relatively modern
accessories

control

—

credit

market

over

stock

control

and

over

instalment credit. Since

consumer

Further, a substantial portion
the surplus has been used to
retire debt held by the Reserve
Banks.
As I pointed out in my
first
the

lecture, this disposition of
surplus is the one most con¬

the

national

other

the

as

interest,

lenders

similarly

of

prac¬

own

have

enlightened
for

need

self-re¬

straint in lending.
The fact that despite a vigorous
powers

which,

mid-1945,
for exten¬

requirements

margin

sions of credit

listed securities

on

for

loans

Bank

since

billion

a

war—in

the

declined

they have

balances
brokers

slightly

of
and

their

than

These loans have

today.

at

and

securities

about

only

debit

100%.

other

Government
to

increased

ers

of

purchasing

securities

S.

while

level

the

at

were

custom¬
dealers

have also decreased since the end
of

the

and

war

actu¬

today

are

existing cir¬
nevertheless ex¬

we

perienced

considerable

postwar
it seems to me, one
clear implication.
There is

inflation has,
very

basic

a

our

the end of hostilities in

for

need

monetary

Monetary

strengthening

powers.

authorities

should

have at their disposal at all times

adequate
means
for
checking
growth of the money supply with¬
out

endangering the government's

credit.
tem
to

this purpose
be given

To

needs

the Sys¬
authority

to

prevent

restrain

or

credit

ex¬

pansion by an increase in reserve
requirements of banks.
By this
authority the System could absorb
or immobilize additional reserves

acquired

from

flow

return

a

of

currency, from
gold inflow, or
from sales to the Reserve Banks
of government
banks

or

thermore,

securities, either by
by their depositors. Fur¬
on grounds of fairness

ally less than their credit balances; as well as on grounds of making
Credit and
monetary expansion the requirements more
effective,
in the postwar
period has not the authority ought to be ex¬
been
the

due to

speculative credit in

market.

stock

has

in force

been

has also been

since

the war,
influence in re¬

an

straining the increase in this type
of credit.
As you know, Congress,
in mid-1947, terminated this au¬
thority effective Nov.
1,
1947.
Subsequently expansion in this
credit went forward at a sharply
increasing rate.
Since September
of 1948, when the regulation was
reinstated

the basis of author¬

on

ity granted in the special session
of

instalment
credit has increased only moder¬
ately, although prior to that action
it had been expanding at a rate of
nearly $200 million a month. Only
a few days ago, as you know, the
Congress,

consumer

modified

Board

somewhat

September terms of

the

consumer

in¬

The
System
has
also
used
carefully^ its influence over in¬

To raise the cost of

iunds

reserve

the

to

banks, and

also to encourage banks and non-

investors

bank

short-term

to

hold

on

to the

government securities

and to buy more rather
unload them on the Sys¬

they

own

than

to

Federal

Reserve

discount

rates

permitted to rise. Rates
on Treasury bills have risen from
% of 1% in mid-1947 to more

than

1%

year

certificates have increased
%% to 114%, while the Fed¬

from

eral

today.

Yields

on

Banks

Reserve

their

from

one-

raised

have

rates

discount

tive

1%

to

1V2%.
The System has applied more
vigorously than thev banking com¬
munity has desired available stat¬
utory authority to regulate mem¬
ber
bank
reserve
requirements.
Prior to the legislation enacted in

August, increasing member bank
reserves was a possible course of
action only for the New York and
Chicago banks, since for all other
classes
of
banks
requirements
their

limit.
In
January, and again in June of
last
year,
the Federal Reserve
Board
raised
by
2
percentage
points the reserve- requirements
were

on

at

net

legal

demand

York

and

basis

of

deposits at New

Chicago banks.

the

On the

temporary authority

granted by the Congress in Aug¬
ust, the Reserve Board raised re¬

requirements by 2 percent¬
age
points on demand deposits
and
IV2
percentage
points for
time deposits early last Fall.
Finally, the System has used its
informational
upon

supplement

a

controls

resources

to

urge

C<j>ngress and the public the

quantita¬

to

bank

over

reserve

positions,

selective-type controls
need to be developed further to
strengthen the System's influence
over monetary
and credit devel¬
opments.
Experience with con¬
trols

over

stock

market and

con¬

instalment loans has dem¬

sumer

onstrated the helpfulness of oper¬

ating directly
of the

the demand side

on

credit market.

The Board

strongly believes in the continued
usefulness
trols

of

both

of

these

con¬

for

achieving greater eco¬
nomic stability, and has recom¬
mended to
the Congress enact¬
ment of legislation which would
replace the present temporary au¬
thority to regulate consumer in¬
stalment credit with

a

permanent

authority.
The

stalment credit.

terest rates.

tended to all insured banks.
As

Regulation of consumer instal¬
ment
credit, in the periods it

serve

of

in

a

view

♦

.

case

for

lation

of

credit

merits

continuing regu¬

consumer;

instalment

special

comment.

Consumer instalment credit is di¬

rectly associated with the distri¬
bution

and

goods.

In

financing
an

of

durable

advanced and rich

economy such as ours, increases
in our standard of living come

about

and

more

more

in terms of

ownership

and enjoyment of a
greater volume of durable goods.
These

goods,
however, usually
long and variable life of
They are generally itemli
of high unit value and not many
of each are purchased in the av¬
erage consumer's lifetime.
Orig¬
inal purchases and replacements
can
be postponed for indefinite
periods.
Even if their purchase
have

a

service.

were

I
our

Reserve

Adjustments of reserve
could be achieved in¬

by urging bankers to

tice self-restraint in their

cumstances,

have been

lion.

a

Asso¬

could be used- under

tem, short-term market rates and

bil¬

Bankers

application of those

The Credit Curbs

commercial banks almost doubled,
which
represented
an
absolute

when¬

sold

Moreover, because of the abun¬
security holders that the
banking system acquired through

of you know this from
first-hand experience. This organi¬
zation of yours was formed
to
meet the crisis of the great de¬

of

considerable expan¬
the

From

end

has

is sound.

a

re¬

each dollar of
reserve funds provides the
basis
for a manifold expansion of pri¬
vate credit and the money supply.

banking

The Treasury
similar pressure on

increase of approximately $9

the decision to adhere to the sup¬

of

and credit

money

exhaustion.,

sion.

role

Reserve

volume of credit extended to

stability of government security
prices has had, it seems to me that

the

Federal

developments in this country were
either ineffective, inoperative, or

the

uncertain

the

influencing

of suspending sup¬
ports would be.
And in view of
action and

circumstances

during most of

period since the close of the
the traditional instruments

near

consequences

upward side.

the

existed

available to
for

the

on

under

that have

of the

funds




also exerted

not

the

eral economic health of the nation

pression, when the cities were told

commercial banks.

dollars

Monetary Policy

Federal

at all times.

the

Many

on

carrying

ure

no

dant

however,

to bear

freedom

of

American

ciation has cooperated in this pro¬

1947

progressive

The

gram

bringing pressure
the reserve position of

thereby

greater by banks and by brokers and deal¬
ers
have not been below
75%,
and for the year ending January,
for all through the confident and
and

importance of restraint in credit
expansion and of the need for
strong fiscal policy.

well,

achieving

in

way

prosperity

control,

take

is more than a
matter of tax policy. Cities can be
financially sound only if the gen¬
cities,

or¬

problem

to

the

Tax

asked

am

Mayors

Finally, sales from their hold¬
ings of government securities of¬
fered an easy means by which

the

came

;

have

realistic conception
of postwar sta¬
could afford to ignore
these facts about the public debt.

Clearly,

has,

ture, the Secretary of the Treas¬
ury

I

of

vantages which confidence in the

v.,;.-""'.

One of the most important first

relations.

We

position through

put to good uses;

resources

truth.

the

bigger frontiers ahead of us now
—greater possibilities for demo¬
cratic growth—than we have ever
had.
To find practical, realistic
ways to afford a better life for
our people is the great challenge
which
faces
our
Federal,
our
state, and our city governments.

brought to bear

future expansion must be
prop¬
erly guided in the interest of the
whole community.
You all know

nancial

synony¬

financial

bilization

buildings need to be rebuilt; and

and

farther from

that

utilities need to be improved and

rearranged;

and

that

now

end

change.
We
nothing could be

growth

our

know

if that

the

to

come

enormously

need

now

cleared out and

of

had

we

matter

the

haphazard

has

areas

almost

was

with

mous

omy.

the

Frontier in this country, as
meant

(Continued from page 7)

.Many cities are paying now—in
crime, in disease, and in blighted
for

it used to be popular to talk
about the closing of the Western

ago

33

the commercial banking system as

fact,

upon

—

common

The Fedeial Reserve's

mental problem of finances.

areas

way, we

ways

funda¬

serious

very

the

of democracy is to
of doing things for
good.
A few years

spirit

new

Yet

to local

local

our

The
find

U.

of

Another

tended to do.

(1313)

sistent with a policy of monetary
restraint; for it results in a with¬
drawal of funds not only from the
general income stream, but from

amount

rent control

facing

same

pre¬

moving from the idea of cur¬

are

ganization.

order

to

measures

vent disease. In the

The real estate lobby knows this
perfectly well. It wants us to turn
in

sick.

public health

on

cities

successful program of rent control.

ity—not

used to

Mayors know, we

rely increasingly
sanitation

than

the

curing

But now, as you

and

ing depressions after they happen
of preventing them.
That is what my proposals are in¬

medi¬

of preventive

concept

cine. In the

point is,

have
neither the legal authority nor the
financial resources to carry out a

over

radical

more

no

greatly increased if rent controls
removed

by

maintain high em¬

can

CHRONICLE

to the concept

to

democratic

which

FINANCIAL

They know

am.

ing, relief to the needy, crime and
juvenile delinquency, would be

however,

of

have

&

effective

of

that their problems of overcrowd¬

were

out

We

resources.

understand that
is a national as
well as a local problem, but we
still have far to go in perfecting

posals

Estate Lobby

recent

the

unemployment

the

During

Administration

National

then in office that they must pro¬

vide

rent

COMMERCIAL

THE

Number 4788

169

on

a

strictly cash basis, de¬

would

mand

be

unstable

with

changing conditions of unemploy¬
ment, income and buying psy¬
chology. With unrestrained use of
instalment credit

financing, insta¬
bility in the demand for durable
goods tends to be accentuated. In
periods
of
business
expansion
consumers draw heavily on their
income to swell their pur¬

future

chases.

of

these

goods. When a
instalment loans
being paid off and the pay¬
ments reduce further an already
downturn sets in,
are

inadequate volume of consumer
purchasing power. By limiting or
relaxing the terms of instalment
credit, not to stifle its growth but
to spread its growth, much can be
done

to

durable

space

This

time.

our

purchases

goods more
will

add

evenly
to

the

of

over

sta¬

bility of the entire economy.
Recently
terruption
course.

In

we

of
an

have had an in¬
the
inflationaryincreasing number

(Continued

on page

34)

34

(1314)

THE

COMMERCIAL

&

The Federal Reserve's
Postwar
supplies have caught

areas

with, and in

up

lines, ex¬
demand at current prices.

ceeded

numerous

Monetary Policy
tribution

is

create

to

climate favorable

to

a

monetary

business

ex¬

prices, the moderate slackening of
investment

have

tion
.

of

the

are

the

changed situa¬
declining

recent

in

producer's

goods

and

business inventories, and the
increased supplies of goods, many
of

which

in tight supply a
Average wholesale and
prices have been de¬

were

year ago.
consumer

clining from their August peaks.
fact, by mid-February aver¬
age wholesale prices were slightly
In

lower than A year ago,

prices

sumer

close

their levels

to

con¬

of

February,
Prices of farm products in

1948.

mid-February
6%

while

probably very

were

below

8% and foods

were

Average
prices of commodities other than
farm

a

year

products

only

foods

and

3%

above

have

and

ago.

been

a

were

ago,

year

virtually

un¬

changed on
the
average
since
August, with prices of most com¬
modities in their group other than
metals generally either remain¬
ing stable or drifting down. Re¬
tail
sales have
recently shown
substantial

ing

evidence

increas¬

of

resistance.

consumer

When

figures become finally available
on
department
store
sales for
February they will probably show
a decline from a year ago despite
intensified merchandising efforts.
Though

i

employment

has

con¬

tinued at generally very high lev¬
els there have been, recent de¬
clines.

Claims for unemployment

^compensation

increased

more

than seasonally and

by mid-Feb¬
they totaled about 750,000
or
45% higher than a year ago.
Notwithstanding these develop¬
ments I strongly emphasize the
need for making the System's au¬
thority adequate ,to cope with in¬

the full advantage of the
stabilizing potentialities of action
in
the
monetary sphere—about
which I have already indicated
my optimism. It is my conviction
that monetary policy, along with
coordinative

I

certainly

that

hope

there will not be further inflation.

My

emphasis rather
that

concern

reflects

our

whatever

monetary problems
be facing.

may

The

we

Reserve

System today is
far better equipped than ever be¬
fore to help offset deflationary
forces

should

they actually de¬
major
deficiency
of
the banking system that has ag¬
velop.

A

gravated business
the past—the
tral

bank

contractions in

inability of the

to

provide

cen¬

adequate

funds when needed by the market

longer

—-no

exists.

The

System

his

virtually unlimited means of
supplying the market with addi¬

tional
of

through purchase

reserves

securities.

government

billion of gold certificate reserves,
on

the basis of existing legal

reserve

System
its

could

requirements,

the

than

double

and

more

outstanding

deposit

note

liabilities.

Moreover, as a result
of the liberalized lending author¬
ity provided by the Banking Act
of

1935

advances

made

on

banks

that

Reserve
the

Banks

of

be

now

of

member

security. Thus

as

funds

will

not

be

undesirably restricted by the need
to
adhere to
"eligibility" rules.
Further, when other lenders are
not available, the System is em¬
powered to make direct loans to
business firms for working capital

Finally, the System can
contribute
to
monetary

purposes.

always
ease

generally by

reduction in

a

requirements and in
areas vthrough
relaxing

reserve

cial

stalment

credit

and

cope

margin

with

in¬
re¬

expan¬

sive forces in the economy when¬
ever

they

counteract

occur

the

as

it

forces

now

of

is

to

contrac¬

essential

right amount at the right time.

In

conclusion,

I would like to
interest in this gen¬
monetary approach to eco¬

that

eral

is

stabilization

nomic

only

my

based

not

optimism with regard
My interest is also

on my

to its results.
based

is

free com¬
petitive economy.
It calls for no
great expansion of the allocative
powers of government over the
nation's

a

It calls for

resources.

no

proliferation of government direc¬
tives—the mechanism of a regi¬
mented economy. Rather, it prom¬
ises
both
economic
stability—
which

to

dare not give up,

we

of two lectures by Mr. Szymczak,
the first having been published in
the "Chronicle" of March 17.)

Scovill Manufacturing Co. is of¬

fering to the holders of its com¬
mon
stock the right to subscribe
$100

1949, to 49,850 shares of
cumulative
preferred

April 6,
its

share and accrued divi¬
March
1, 1949, to

a

from

dends

4.30%

stock

(par $100) on the basis of
a share of preferred for
of
common
held of

l/24th of

share

each

the

at

record

close

business

of

Such rights will

March 22.

at 3 o'clock p.m.

(EST)

on

was

friend—or

a

friend—and the

a

other, which was definitely "cold
turkey" occurred very recently.
In order to increase your busi¬
ness,

rather get business that

or

does not exist now, you
new

contacts,

that

Mr.

well',

whom you have
I

with

so

expire

April 6.

in

even

turkey,"

the

someone

would

how

inspire
the

will

successful

cite

can

you, but. I am going to
tell you that it made a very, very

in

strong impression upon

ecutive

impress

in

me

my

business and I think that it has

a

place here with you in your busi¬
ness
of
selling.
I am a tele¬
vision

fan, I like television, and

since

had

have

we

television

in

Boston I have watched many box¬

ing bouts.

time I thought
that the only boxing bouts worth¬
while

At

one

the ones that you went

were

much

a

to

shire.

for

specific

a

mind

work

for

capacity
talked

or

some

interested

become

teurs,

I

and

in

the

had

boy there that

weight
—the

champ
of

son

of this

from

this

former

a

section

Governor

State with

good breeding
and
every
opportunity for the
nicer things
in life.
The first
I

time

vision,

him

saw

fight

his opponent

on

tele¬

great
big fellow—a head taller than he
and

with

The

only
his

greater reach.
the local boy could
to get in close

way

bout

was

This he did

advantage

of
do

to

and took

opportunity

every

possible

was

a

much

a

he could

was

whatever

at

damage
time. This

the

to be a crude simile
but the point or moral, I am try¬
may

appear

have

attain

to

unpleasant

at times.

seem

So many
who

men

ing

end, however

our

arduous they may

or

times I have heard of
feel

above

sell¬

comments

whose

and

direct

are:

"Why,
that's calling upon the
home,
house-to-house
selling."
Well, you see, it is like this fellow
in

television

the

to

means

clinch and

fight—it

end.

an

1

is

had

to

create

the

This is in contrast
what I have experienced from

opportunity.
to

ex¬

who

rather

was

He

did

skeptical
strike

not

to

be

on

the

my

much

as

me

man

preferred

stock being offered is

prior to June

convertible
1959, into com¬

1,

stock of the

mon

company,

initi¬

ally at the rate of 31/3 shares of
common
foj each share of pre¬
The

ferred.
at

and

redeemable

is

stock

before June 1, 1950
thereafter at prices decreas¬

$105

on

or

ing to $102
in

1952,

"Well, do you have leads? Do

share after June 1,

a

each

plus

case

accrued

dividends.
from

together with

the

the

stock

proceeds

sale,
of

a

$6,000,000 3% loan due 1974 being
negotiated
with
two
insurance

companies, will be applied by the

loans

bank
war

toward

incurred

construction

program

the

and

payment of
for

and

to

its

post¬

equipment

complete

such

program.

The

company,

which

with

its

predecessors has been in business
for

147

years,

is

engaged

prin¬

turkey"
calling
without

attack;
upon

non-ferrous metals and manufac¬

turing therefrom
of products.

on

in

The

a

wide diversity

company

is

one

largest; brass producers

the Unted States.

in other words,
total
stranger
of

previous

in¬

contact.

and

have worked
thousands

of

if you have hired and trained
them, organized and developed
them, all over New England, 'have
14 main branches (and they are
big branches, at the present time
employing over 800 people) you
are
bound to have gained con¬
siderable
experience. I do not
how

care

enough

other

or

to get
plain "cold

men,

he

and

a

benefit

thousands

processing

brass

you

way

the

If in 24 years you

with

cipally in the melting, casting and
of

is

business

new

troduction

company

The only

develop it.

Proceeds

way

you

dull

works

in

be, if
with
a
lathe
long
his
home,
he
will
a

man

may

finally find out how to work the
thing.
The "Smoothie"

As

you

are

aware,

Type

gentlemen,

business is selling Electrolux
Vacuum
Cleaners,
which
are
our

informed

•

with

-

should

emphasize

what

Before

judgment
I de¬

of

in

you

my

I

as

on

little

a

sales¬

a

fellow.

My

business, and were
constantly by salesmen.

think—and

that

im¬

me.

have learned that I

in

doubly

Through my experi¬
in hiring over the years, I

ence

or¬

not alone

was

desire to become a salesMany men want to become

my

man.

salesmen.

I

find

who

young men

number

a

were

of

in the armed

forces,

during the war, do not
go back to their prewar
jobs of stock clerks, mill workers,
and the like. Many of the veterans

there. I didn't
bring earnings into this
talk tonight, but I must mention
them here, because the fellow was
only 22 years of age when he

want

I

to

interview

they

tell

at

were

while

that

me

the

they

front,

25

determined that when and if they

new.
His
home
is
in Lincoln,
Maine, north of Bangor. He made
more
than $12,000 his first full
year on the job, when he was 22.
1 met him at a banquet in Port¬
land recently and had a chat with
him. He is a clean-cut, fine boy,
with a charming wife and one
baby. I commented on his success
and
the
amount
of
money
he

got home, they would forget their
previous jobs and become sales¬

earned.

I

thought

He

us.

him

asked

brought
He

answer

which

is

almost

a

in

were

pressed

to

with

is

was

—I

of my branches

started

gave

me

is

mine.

selling

experience,

never

us

after

leaving

where he had been

he

a

came

during the
a

nice

lar

to

the
service,
fighter pilot

war.

wholesome

know

must

curities?

I

products.

' don't

think

One

and wa^ts the

must

of

sales¬
ar¬

not

lose

is

product being mar¬

is creative

That

keted.

selling.

It

matter of record, that inside of
five minutes by the clock, cus¬
a

have

tomers

salesmen
Vacuum

paid

for

$70.00

to

our

Electrolux

an

10 minutes

Cleaner, that

previously they had no idea they
going to purchase. I repeat,

were

this

is

creative

might
kind

the

add.

of

one's

America know and understand

boss
a

were

sight of the fact that selling be¬
comes a profession only when the
salesman convinces the unwilling
prospective buyer that he needs

product
thoroughly, in order to bring out
its points forcefully, in order to
properly advise the prospective
customer of its advantages. Here
is an important thought you might
consider. How many people in

one

be

decisions

the selling profession is the
highest paid profession on earth,
that is, the right, kind of selling.
What kind of selling is the right
kind of selling? You cannot make
real money by selling such items
as bread, chewing gum and simi¬

great

because

former

going to

These

expression

own

that

that

sort of
important

sold before. He

to
am

rived at by these young men be¬
cause
it
is
common
knowledge

here. He could not attribute it to

had

their

use

I

man."

some

not

To

men.

—"Nuts

he

what

his

about

selling, and, I
profitable

most

selling.

Salesmen

"Turnover"

One of the

biggest problems en¬
in a selling organiza¬

countered

tion

is

that

"turn-over"

rally all of
ness

se¬

do

ising

many

our

much
in

us

talked

salesmen.

about
Natu¬

in the selling busi¬

utmost to retain prom¬

young

develop, them,
help them to be¬
in
the
selling

men,

people do. I honestly don't myself.

and endeavor to

You

educational

come

successful

program, or what you will, but
I know if you were to call on me,

field.

Earlier this evening it was

you

can

call

could do

it

an

me

an

mentioned,

that

a

great

part

of

this

difficulty is caused by men
like yourselves, who do not stay

awful lot of

good, if you could sit down and
explain to me the laws and re¬

long enough in the business to
gain enough "know how" to learn

quirements that would permit me
to be classified in the capital gains
tax.

what

it

make

Thapis just one part of your

a

is

all

about

in

order

to

good living and go on to

business about

which the public
just a vague understanding. A
great many people stand in awe

greater

has

and

with

is chiefly so because in a ma¬
jority of the cases the new sales¬
men,
or the man who wants to

success.
In my opinion,
through my own personal ex¬
perience with men, I find that this

regard to the "big board,"
so-called, or your own brokerage
offices. If you could discuss your
business

on

a

common

ground

•

deeply impressed by their
dressed, smart appearance.
They
always
seemed
to
have
plenty of money in their pockets

who very well illus¬
trates my point. He is a salesman
in the State of Maine, working in
mean

here

is

well

ganization

one

are.

sale

a new

wanted to be

.

if this is true in
selling a piece of tangible mer¬
chandise, certainly it would be
multiplied, I should think, in what
you are selling.
man

really

salesman

for

you

■

insurance,'

Certainly

own.

man—even

dence in order to sell successfully.

another

insurance

] I always

I must repeat that

have

not you are

or

your

needs

parallel to security selling.

which I consider very important,
that a man must inspire confi¬

I

on

your

the

his

work

analyzing and advising

to whether

through, he has

man

point to

a

companies

successfully. Tney '
with the helpful at- 1

very

of

as

and

understanding that

my

overlapping

cided

say:

Ours is creative sell¬

give loads?"

The 4.30% cumulative

is

titude

proved

the

insurance

this

far less

wiser

for

It

the

He has, however,
look, is neat
appearing, clean and honest look¬
ing. We must make our own op¬
ing, all of which are great assets
portunities.
This is the way Mr.
for the proper approach in any
Hensle and myself have had to get
business. In baseball they say, "if
and develop our business. I think
you can't see them — you can't
that this is the best thought or
hit them"—well,
if we are not
idea I can leave with you tonight.
presentable, we cannot get in, and
Now, this is not original. I have we cannot sell. In my opinion a
heard it said that your clientele
pleasing personal approach is all
is aging and is dying out. If this
important.
is the case and you are to survive,
Following the proper approach,
you must get new business and

Stanley & Co. and

associates.

would

well

ties.

him.
being

later

a

This

part,

about

ten by Morgan

who

man

not

are

approach you

the

weaker

Government,r

—

know, I have had 25 years
selling experience." When he got
through blowing his own horn, I

a

to

purchase

bonds, tnat is. I think this might
be
well
worth
giving
some
thought
to,
and
experimenting;
with,
particularly
with
people1

you

success.

in-fight to succeed and

all he could

he did

He

a

it
■

ing bought bonds

called

one

possibly

i

recently in Lowell, Mass.
was

whom

a

folks

There

to

occurred to

never

the Golden Gloves exhibition held

sort of took my eye. He is heavy¬

myself, but also with

men

share of stock—most of them hav-

upon worked out wonder¬
to. fully well for our business and is
now
very successfully managing
my
branch in Worcester.
This

ama¬

refer specifically

of

regard to the purchase of securi¬

prepossessing.

Now, because of television I have

to

your

length, en¬
deavoring to impress me with his
ability as a super-salesman, and,
among other things said: "Why,

genuine. I selected

fancy prices
the Joe Louis fights
great championship bout.

better able

buy. I think
approach would "pay-off"
in attempting to sell

like

men

very

an

be

only

lot

at

to see,

as

not

Hamp¬

New

comfort- *

more

it would be to him to

have

I

in

me

in

to New York and paid

such

and

me

case.

who wanted

man

He

you are

has

This

prospective

your

feel

business, what'
selling, and the advantage '

such an

rather

confidence,

"smoothie."

think

understand

suc¬

never

would

able and would

to

judgment, based on
directs me towards
sincere
type
who

simple

than

has

type

My

proven

this

contrast

business the insincere

our

"smoothie"

"cold

know

in

I

client

business, the selling of in¬
tangibles, which amounts to sell¬
ing conversation only. However,

upon

had not previous

basis,

your

experience,

know

whatsoever.

not

do

visual

ceeded.

as

contact

something

and

I

will

service—which will do

a

in the language

or,

Hensle

just plain
calling

such

must find

perioral

Salesmanship

which

This offering is being underwrit¬

of the five

(always bearing in mind that
the downside our major con¬

tangibles—something

ing to bring out is that when we
assume
a
job we must take ad¬
vantage of whatever means we

Mfg. Offers

4.30% Preferred Stock
at

me

at least became

and clinch.

(Ed. Note: Foregoing is second

Scovill

approach

win

have

somehow

we

achieve—and economic freedom—

which

to

the conviction that this

on

good approach for

a

tion




it is

but

action be undertaken in

our

say

spe¬

My point, then, is that mone¬
tary policy must be as adequately
to

act,

to

power

quirements.

forearmed

Not only must we have the

that
the

acceptable to the

are

supply

can

assets

any

fiscal

best of available weap¬

the

ons.

The

Reserve Banks at present hold $23

and,
gold

the

my

System at all
be equipped to cope with

times

in

can

even

ruary

flation.

action

contribute a great deal
to curbing the effects of unstab-^
lizing elements in our economic
life.
However, I want to empha¬
size again the essential role that
timing will always play in deter¬
mining the success or failure of
area,

Thursday, March 24, 1949

Elements of Successful

pansion; the forces that generate
expansion lie outside the realm of
monetary policy alone).
Only if
the System is forearmed can we

Indicative

CHRONICLE

'(Continued from page 4)

(Continued from page 33)
of

FINANCIAL

'

become

a

salesman, cannot stand

>

'

1

'

■

/

.

•'

-i

* 11

»

'

,

'

,

.

,

economic

has

man

at

the

little

some

end

Again,

of

being

In

fort

.

,

.

•

business,

my
is

'

*,

M

'

'

H

,

1

"

M

COMMERCIAL

'

-

>•*■-'',

.

FINANCIAL

&

•

'

'

,

•

CHRONICLE

(1315)

plain
a

even
week.

first

this

either

face

starvation

present or ultimate
and permanent shut-

ing out of their goods in markets
they have built up over many

every possible ef-

exerted

by myself and my
management
staff,
toward
this
end, tnereby giving that new man
not only inspiration and encouragement, but good instruction and

caution

to

that government

see

and

substituted

operation
are not export controls; that such controls

control

fundamental

the

for

be held to

that,

claim

time

tnat

outside

of

will be saved.

labor

or

business

the

of

done

of

here,

the

;

Required for Exports

Consideration must therefore be

real help in closing sales, and geting him off to a good stare in our

shipments

products, has been through
private channels although admit¬

dishonest

of

legislative

should

the
investigation

provide

not

un¬

an

shipment,

reason

for

suddenly imposing unwise and

un¬

workable

which

more

here

of

controls, account be taken of,
and provision made
for, uncom¬
pleted
orders
already
on
the

agricul¬

tural

or

fear

absolute minimum;

books; that such controls be ade¬
policed to ensure their
just and effective application; and
given, and some plan worked out,
f.
tedly the private importers abroad that any license application should
the taxpayer will not
business.
Our method of combat¬ whereby
be dealt with promptly in order to
may not have had an equal oppor¬
ing the "tuin-over" bugaboo has be unduly burdened, the indi¬
tunity to participate on the same eliminate or minimize delays in
vidual exchange resources of these
proven to be most effective.
basis. In this connection, it must shipment.
countries will not be seriously en¬
Several years ago on a similar
be recalled that ECA agreements
Further, controls should be sub¬
dangered, and yet American goods
occasion I lectured at Boston Uniand
allocations are
made
with ject to continuing review so that
will be permitted some flow into
versity.
At that time I emphawhose
retention
on
sovereign foreign governments and items
the
traditional markets so that Amer¬
the internal policy of any foreign Positive List is not
sized the fact that a man sincere- ican
absolutely nec¬
exporters will be in a posi¬
ly interested in entering the sellgovernment must be taken into essary may be promptly removed.
tion to extend their trade when
consideration as a factor in de¬ New regulations should be drawn
;
ing profession, must not accept
the recovery envisaged by ECA
just any kind of selling, merely
termining what private or govern¬ in clear and understandable terms,
has taken place.
as; a
ment agencies abroad handle im¬
"stop-gap."
Take time to
after previous consultation with
This was recognized at the Na¬
find out just what you want to
ports. However, the influence of business representatives. Also, li¬
do;
by that I mean, what form of sell- tional Foreign Trade Convention ECA
and
its
missions
abroad censing procedure should take into
ing do you want? There seems to in 1948 when, in the Final Decla¬ should be aggressively directed to account the needs of
American
be a certain amount of
glamour ration, it pointed out that there the utilization of private channels. enterprises established abroad and
!
about automobile salesmen.
They might be involved "a temporary
the desirability of developing re¬
Off-shore purchases for the Eu¬
always have a car in which to diversion of international trade
sources through direct investment
ropean program, as authorized by
>
ride
around.
They look pretty from normal channels to stimulate ECA to the end of
December, of American capital in foreign
smart.
Whether they make much the greater use of productive fa¬
countries.
cover a total of close to $1,500,money or not, I don't know, but cilities abroad, and to relieve un¬
Lastly, export control regula¬
000,000, of which $250 000,000 has
there
drains
on
American
always seems to be that necessary
been in ERP countries and their tions should not be so cumbersome
glamour wnich is so attractive. production." But the Convention
possessions; approximately $350,- and exacting as to stifle America's
There is glamour about
securities, recommended that "the ECA ob¬
000,000 in Latin America; and export trade in the effort to pre¬
stocks
and
bonds also, but my tain assurances from participating
$800,000,000 in other countries, vent abuses by a small number of
; point is, whether it is selling my countries that American producers
chiefly Canada and the Middle exporters.
particular product, or the more will be given the opportunity to
East.
The
effect of these ECA
Congress has now approved ex¬
glamorous products, a man must
|j again enter the market involved, operations is apparently not fully tension of export controls to June
never
foolishly enter into any on the basis of equal competition
recognized. Not only have these 30, 1951, although business organi¬
selling field, saying to himself: with producers of other exporting
off-shore purchases reduced the zations and individuals—including
"Oh, well—it's just one of those nations, when the immediate pur¬
burden of furnishing many com¬ the National Foreign Trade Coun¬
J things, a 'stop gap' — I'll give it poses in view have been served." modities which are in
tight sup¬ cil—indicated to Congress that the
a try."
You cannot hope for suc¬ Further, it urged "that shipments
extension of this temporary emer¬
cess
with that attitude. You can of American products temporarily ply in the United States but, of
equal importance, they have pro¬ gency
authority
should
be
no
excluded from such competition
| readily see the wisdom of my ad¬
vided dollars to other countries. longer than to June 30, 1950, even
vice in this direction.
First you by the operation of the program
American
exporters
have
been though the new law is subject to
must select the form of
selling be admitted into beneficiary coun¬
thus helped by the dollars so pro¬ revocation at any time by action
■! you prefer—give it all you've got tries in sufficient volume to assure
vided for
sales
to
traditionally of Congress or by the President.
—dedicate yourself to that job— the preservation of
existing dis¬
While
the new legislation does
and learn every phase of it thor- tribution channels and the main¬ good markets although they may
not realize they have benefited
spell out and emphasize the au¬
oughly.
'
r
tenance of trade names."
from nor shared in ECA opera¬ thority to impose broad controls
Before closing I am going to
Another aspect of ECA opera¬ tions.
and enforcement
procedure, these
give you a few facts about my tions in which American business
are
no
-

indicate

may

wise

implementation

an

such

the erroneous

on

in

which

item

the United States may
require the
maintenance of certain temporary

principle and efficiency of private

Much

of Goods

must

government

business,

years.

Traditional; Flow

be exercised

tinued

(Continued from page 2)

is

35

skunks. Because Congressional at¬
tention is directed at some news

The ECA and American World Trade Interests

new

income,

his

practical,

*4,1 V

'

THE

-necessary to put food
into his
stomach and a roof over his head.
,

'iiVWK

Number 4788

pressure; in
words, it is. important that
'

!

.
,

the

' "* *

'
■

" *'

.

Volume 169

quately

,

.

t

.

do
and

abroad than the continuation of

a

few undesirable exports.
to

make

perfect

Attempts
system 100%

control

a

result

can

excessive

in

regimentation and red tape. Un¬
less serious damage is being done
to our economy or to our foreign
policy, a reasonable rather than
an
impulsive approach must be
maintained.

police

It

is

Europe

impossible
the

or

world

to

by

export controls, and we should not

much about limited di¬

worry too

version

of

shipments.
I believe
that attention should be given to
the

important things and that

should
our

take

the

we

unimportant

in

stride.

As the Council stated in its brief

,

•

to

Congressional Committees, re¬
strictions aimed at a very small
group of irresponsible exporters
should
in

an

involve

not

work and

per

all exporters
increase in pa¬

unnecessary

•

•

a

regulations
damage
both

handicap the vital

export business of our nation
its normal operations because
the
It

this

of

acts

small

of

minority.

suggested that in the

was

in

case

<

.

of those

found

guilty of violating
export control regulations, prompt
and maximum punishment would

•

to eliminate the lawbreakers

serve

-

(

and act as

deterrent to others.

a

■

'

■

business.

own

tended as

month
•

v

March

Corporation
chines

than

is

sell

will

Electrolux
more

the combined

not

but

) with the
lion

in

Y field.

made

rather

ma¬

output

to

as

idle

an

acquaint

you

supremacy of our posithis
particular
selling

Further, it should

substantiate

serve

statements

my

as

the different factors which I

}

very

the

every manufacturer of vacuum
cleaners in America.
This stateboast

.

in¬

not

of

ment

•

is

plug—but in this

a

of

This

to

to

con-

sider very important in successful

selling, and which certainly have
themselves in my business.

proven

t

.

;
•

!

-

/

dustrial
must

expansion of in¬

or

production.
exercised

be

the

Here

to

care

that the

see

desires of individual countries for

self-sufficiency are not catered to
excessively. Plans must be worked
for

out

economic

coordination

the Western European

among

na¬

tions rather than the building

up

of many self-contained units. Fur¬

ther,

development of

any

indus¬

of

from

exports

our

traditional

selection and exclusion of imports

upon him around midnight tonight—and well he might

committee

a

our

mem-

might call

to

carried

be

too

in

the

selling

adjust

your

let

us

forget

the

unit

you

time to the

venience of your prospect.

confiscate

con-

Do not

breathtaking

the

and

must

be

as

are

$350,000 worth of insurance sold

j in

one

night, which I referred to

earlier in my talk.
In

say

to

not

as

of

so

not

that

used

in

connection, patience as well
vigilance is needed on the part
the

American

There

this
is

a

may

short

have had

services
use

on

recipient
where

or

than

is

use

what goods or

countries

they

can

will

be

ob¬

delivery

actual mechanical effi¬

of local currencies. There

increasing insistence by Amer¬

ican

business

cers

abroad

picture and
and

that

the

should
use

ability to

ECA

step

offi¬

into the

see

exporter

be

even

difficult.

balance which

tices.

tailed
on

administrative

legislation
rapidly changing sub¬
As long as control legisla¬

such

ject.

can

be

is

the

re¬

newal of export controls.

As

you

will

started
fense
war

of

in

trade

this

1940

measure.

was

as

it has

a

originally

prewar

Throughout

it became an

our

our

foreign

recall,

de¬

the

important part

overall effort, and postwar

been

continued

domestic

trols.

While

many

of

export con¬

our

have

exporters

re¬

gretfully learned to live tempo¬
rarily with export controls, every
step to
work,

reduce

the

the

cost

of

delays and the

paper
neces¬

sity for bureaucratic rather than
competent business judgment will
be

acclaimed.

In many

lines, the

day has arrived when export trade
promotion

rather

than

export

trade restrictions should receive
the preferred attention of govern¬
ment.
Trade Agreements Program

a

economy

to

protect
from ex¬

Still

another

effect

of

nations

ments
tion

unduly restrictive provisions,

administration of the act
should
with

be

the

such

to

as

current

keep

real

and

can

pace

necessities

for export control.

Specific
the

law

a

is

made

continuation

in

and

amplification of advisory business

a more

permanent and continually
effective basis. Business can con¬

greatly to

realistic and

a

of

overall

with

other

re-creation

of

Since its incep¬
1934, and through subse¬

program.

in

quent

renewals

of

the.

Trade

Agreements Act, this program has
had

the

general

ized

that

reduced

trade
and

support

of 'our

They have real¬
barriers

must

be

reasonable

every

undertaken to improve our
imports without doing damage to
our
industry and labor.
Unfor¬
tunately this program, at least on
occasions for renewal of legisla¬
tive
authority,
still
becomes

means

involved
too

what

in

much

appears

political

to

be

controversy.

administration, if given Up to 1948, the

the opportunity to do so.
The

the

foreign traders.

provision

for

and

factor
trade

our

multilateral world trade is the
continuation of the Trade Agree¬

and

effective

Another important factor affect¬
our

home, have removed

the necessities for

tion does not contain unworkable

tribute
Renewal of Export Controls

ing

at

.

tained, prompt realistic
dates and

shortages abroad, im¬
port and exchange permits, to¬
gether with increased production

be

better

a

way

though

closing I would like to

we

greater speed

can

decision is made

as an

this

t

They

serv¬

which will permanently in¬
jure American overseas trade. In
a

a

giving full discretionary au¬
thority to the President, such as

greatly increased during the past
year and will now be placed on

watchful

American dollars

be available under

law

that when pur¬

place in which to live and work,
ECA

would

previously.
■■
in recovery.
There would be greater diffi¬
largely watch¬
culties for exporters if Congress
dogs for ECA expenditures and
had attempted to write fixed de¬
observers of local recovery. When
attain

it will,

ing,- sales, distribution and
ices. In building up Europe
economic

line,

definite

chases are made they- will be in
in line with American
manufacturing
investment and
delivery schedules and prac¬

far,

effect,

a

more

which

contacts with practical exporters.

of American exporters in advertis¬

the fact that if you hone to be

a

those

This important procedure has been

my direction.
tioning this to

My point in men¬
is to bring out

do

than

all their influence

—and if he did it would not be at

you

to

aggressive advisory job with
the recipient nations in order to

by recipient countries is permitted

business with

have

and

ciency for quickest results should
cally sound. It should not lead to be the
deciding factors even if it
arbitrary, permanent elimination
requires dollar expenditures rather

fellows

Hoffman,

must

;

will

greater

the ECA missions abroad

trial production must be economi¬

ber, at dinner earlier this evening,

Mr.

my

cannot count the hours but rather

'

improvement

with

do

to

has

I remarked that one of

discussing

success

•

interested

markets, nor discrimination against
them, where they could be re¬
established on a competitive qual¬
ity and price basis. If arbitrary

In
-

is

I feel

Dollar

Secretary of Commerce and

program had been
continued without change and had
resulted in agreements with over

control officers in the Department
of Commerce have given repeated

41

that they intend to
duce controls to the minimum.

for but approximately one year
and restrictions and changes were

assurances

re¬

A

countries.
Last year the Act was renewed

continuing, aggressive, and realis¬

incorporated, chiefly

tic approach

sition

assure

period

on

this

that export

they

basis would

controls, for the

must

be

in

effect,

of

the

Tariff

as

to the po¬

Commission

in negotiations and its determina¬
tion of so-called "peril points" for

will interfere

cessive
strain
on
materials
in
as little as possible
import tariffs.
This presented a
short supply and to aid in activa¬ with business operations and the cumbersome
and
unnecessarily
into
tion of our foreign policy.
growth of world trade.
you gentlemen are directing your traditional markets with a
duplicative and restrictive pro¬
speed¬
There is danger that the policy cedure.
Congress is now consid¬
efforts in excellent channels. The up Of European recovery and with¬
This subject has been one of
and enforcement of export control ering restoration of the procedure
committee working with you is out placing undue burden on the continuing vital interest.
There
which existed before 1948 and of
American taxpayer;
all looking is neither need nor time to review can go far afield from the concept
deserving of great credit.
Your
forward to the time when a re¬ the long and somewhat confused of protecting the domestic econ¬ extending the negotiating author¬
willingness to give up your eve- vitalized
This has been
Europe and a revitalized record of changes in administra¬ omy and preventing all shipments ity to June, 1951.
nings and "burn the midnight oil" world present better markets and tion, revised regulations, new li¬ contrary to our foreign policy. Ex¬ approved by the House of Repre¬
sentatives
and hearings by the
better business opportunities for censing
in
an
endeavor
to
procedures, altered en¬ port control alone should not be
gain
more
Senate Finance Committee have
all concerned.
a
'
X.
forcement, and the evidence at over-emphasized as
political
knowledge and better yourselves,
Congressional investigations. The weapon in a cold war or as a just been held. •
Private Enterprise and ECA
will surely bring you greater suc¬
Under the
authority given to
present opinion of most exporters means of policing the world.
cess in your chosen field.
I hope
Another matter to which atten¬ with whom I have been in touch
Too tight and too rigid enforce¬ the President by Congress, there
that in some small measure I have tion must continue to be directed was summarized in the Final Dec¬ ment can throttle American ex¬ was negotiated the so-called
is the utilization of private enter¬ laration of the National
Agreement,
known
as
Foreign ports. We must be careful not to Geneva
contributed somewhat.
prise both in the United States Trade Convention last fall. It was have administrative
policy and GATT or the General Agreement
;
That's all, gentlemen—good luck and abroad.
This covCongress made this stated that the fulfillment of the procedure which, in effect, burn on Tariffs and Trade.
to you all.
a basic principle of ECA, but con¬
down the forest to catch a few
purposes of the foreign policy of
(Continued on page 36)
you

very

sincerely

arrived

that

I

think

at

which

will

permit

movement of American goods

,

-

v

-

•




v

36

(1316)

THE

COMMERCIAL

The ECA and American

•

World Trade Interests
between

23

countries,

including the United
States, and constituted an out¬
standing step forward in trade
cooperation.

Two-thirds

import trade involved

participating
comprised

the

of

among

countries,

the

which

tion

of

definite

a

mentioned
"Point

of

Four"

Address, in regard to help for
economically backward countries;
Return to

convertibility of

cur¬

policy provisions

to reduction

as

of

barriers, equal trade treatment,
and many other related subjects
were
involved.
Subsequently,

negotiations

and
ex¬

the

direct

investments abroad.

American

nations at meetings to be held this

spring in France.

While the full

effects of previous separate agree¬
ments and of GATT have not had
an

opportunity to become evident

due to

and disturbed

war

postwar

intention
with

timistic

to

need

We

be

out

gressively beneficial results

as

the

world engages in increased trade.

The

agreements

have

not

been

perfect and many exceptions have
been permitted, based mainly on
balance

of

dislocations.

payment

Nevertheless,

the

base

for

freer

trade has been established.

to

are

obtain

the

If

we

tations

past

are

pro¬

Based

on

level

that

almost

determined not by

are

but

their

by

in

set

the

average

from the children

come

strangely enough from the head

of the house himself who

pat¬

a

tle

tired

of

associate

having

is

tell him about

lit¬

a

business

some

the

won¬

derful prize fight or variety show
saw
on
television last night

do, and will,
the record, Amer¬
has
always been

business

ican

far

so

toward

pressures

home will

they

as

are

subsistence

television

or

Adap¬
to meet

made

be

must

conditions
exist.

attitudes

a

present.

or

States

Generally the first demand for

within

business

overseas

they

he

without being

interesting

astride of new condi¬
tions in its relationships through¬
able to keep

an

himself

ence

able to produce as
emotional experi¬
which

would

allow

him to monopolize his,proper share
of the conversation.

realistic

recip- out the world.
Determination to
benefits, we must not permit; stick to our principles will be
exchange regulations, quotas, and challenged but, with clear think¬
rocal

other

barriers

not

covered

spe¬

=

cifically in the agreements, to
operate against American exports.
We have in the trade agreement
program a forward looking and
progressive background for better
multilateral trade.
It is our duty
to increase its effectiveness.

need

be

damaged,
fear

proven

that

un-

need

not

so

harm

of

So

to fear the outcome.

As

us

Trade

the

on

Agreements

Reciprocal
and

program

the
GATT
naturally
leads
to
though of the International Trade
Organization, or ITO.
Here we

with

confronted

are

basically

a

meritorious

objective for better
world trade and investment which
over

three

has grown to a
with
106
articles,

years

document,
signed at Havana

by

the

repre¬

sentatives of 52 nations.
Mere

reading

Pacific
A

Charter is

man-sized

a

fortunately
few

of

Havana

task,

undertaken

the

un¬

by
too
will be

people who
greatly affected by its provisions
and exceptions.
A great deal of
time will

doubt

no

be devoted to

analysis and discussion of its good
and bad points when it is placed
before

Congress by the President

either for ratification

as

treaty
or for adherence
by joint resolu¬
tion.
Certainly any real study
will

indicate

undesirable

be

desirable

and

provisions, in most
by exceptions, so

qualified

cases

that

both

a

the final analysis it must

in

accepted or rejected on bal¬
The National Foreign Trade

ance.

Council

has

its opposi¬
tion to H>e Havana Charter.
I do
expressed

not at this time intend to set forth

the

for

"reasons

The

Charter

this

should

conclusion.
be

reading and study for
with direct
the

required

every

one

indirect interest in

or

responsibility

ments

world

and
commit¬
United States
in

the

of

World trade and American par¬

ticipation

in

international

com¬

relations will be affected

mercial

by

many other factors.
I
mention only a few, such as:
Modernization

friendship,

of

shall

of

treaties

commerce

and

of

navi¬

gation, with realistic and up-toprovisions to protect invest¬
ment and trade;
,r

Extension of the tax treaty pro¬

with

taxation
on

removal of double
and specific agreements

procedures;

Development

of

Part

Does

California

Gas

Southern.

Counties

Gas

be

used

pansion

and

will

to

the

construction

,

the

of

finance

company

tors

estimated

implementa¬




decision?

whether

it

the

of

an

the

on

happens to the family
and its leisure time? Plenty. What
I am going to tell you now is a
summary and analysis of eight or
10 surveys which have been made
of families in

the New York

financing, capitalization will
•consists of 200,000 shares of $5

there

grams

cur¬

rent

dividend

fulfills

What

where

conclusion

limited

same

The only determining fac¬

are

roof.

properties of the
and its subsidiaries are
at nearly $44,000,000 for

the

They

the home with the antenna

1949.

At

the

Finally, the television set is in

its
and

and

company

determine

uses

is available to buy it.

acquisition of additions, replace¬
ments and betterments to plants,
systems

available for

New

is

is

York

the

have

only

over

selected

pro¬

a

year.

it

because

which

area

area

six

been

had

had

stock, 100,000 that extensive amount of tele¬
shares of $4.50 dividend preferred
vision,
although
the
general
stock
and
1,930,357
shares
of results in Chicago, Philadelphia
been

preferred

stock.

common

paid

Dividends

the

on

every year

common

have

and

stock

being $3

per

share.

under

gas

special

a

similar
in

not

are

Six

stations

in¬

variety
of
continuously available,
the trend seems to be
that

to

in

network

that each station

radio

tries to meet

the

competition of an extraordi¬
narily good show on another sta¬
tion with a similar program on its
station.
(

When

con¬

the

is

set

in

and

few

a

tracts, principally to its subsidi¬ months have passed, radio listen¬
aries, Southern California Gas Co. ing during the important leisure
and Southern Counties Gas Co. of

are

when

hours

panies

These two latter

com¬

utilities.

The

are

company

public

ages

and its subsidiaries, from
constitute

served,

natural

United
gas

to

system

programs

has practically dis¬
The television set aver¬

being

on

15 hours

per

week

The entire family gathers
around it when it is on. The neigh¬
at least.

the

in

television

available

appeared.

the standpoint of number of cus¬

tomers

bors

the

come

in

to

look

it.

at

The

consumption of liquor and cigar¬

supplying natural
approximately
1,350,000

States,

ettes increases.

This is

a

col-

new
\

over

lateral cost which the head of the

5,000,000 persons located through¬
out the major part of Southern

house didn't expect and which he

meters

and

a

population of

doesn't

California.
well
Total

operating

consolidated

basis

revenues
for

take

had

1948

up

were

period amounted to $9,937,4341

approve

the

of.

I remember

family which called

me

a

on

.

place early in the

last

summer

they could
.

Theatre

come

eve¬

Each evening the neighbors
in to

come

had

eaten,

the

fight and
and smoked

see

drunk,

and asked

me

if

to the Paramount

in New York to

Such

defeatist attitude is not

a

the outlook of Paramount Pictures
for the motion picture business.
We

have

been

television

helping

since

see

the

develop

1937.

Laboratories, which

DuMont

financed

we

in 1938. opened a New York tele¬

their hosts out of house and home.

vision station in 1939. Paramount

In

has

desperation the wife locked the

been

and the three children to the Par¬

operating stations in
Los Angeles since
1941.
We expect
the Los An¬
geles station within a short time

amount Theatre.

to

door

and

pulled the shades on
Friday night and brought herself

all

the

other

forms

of

amusement and relaxation includ¬

ing going to the movies, the read¬
ing of newspapers, magazines and
books, automobile riding, "doing
the
town," cultural and educa¬
tional activities dropped off about
20 to 30%.
Let us call it 25% as

The most interesting
point is there seemed to be very
average.

little

discrimination

television

Its effect

these

leisure

all of them

on

alike, except for radio which,

was

of course,

is a form which is ex¬
similar to television
and

actly

.which television
There

is

readily replaces.
possibility that as far

a

network

as

cerned

activities

radio

may

are

but

because of the economics involved

this

not

may

radio

be

for

true

local

stations.

and

be the most powerful television

station in the world.
Until lately we have been prac¬
tically alone in the broadcasting
of programs from the latter two
cities

but

have

we

it.

from

learned

vision.

We have

done

We

have

studies

of

have

We

developed apparatus
recording of pictures and

for the

transmitted

sound

by

could

We have developed methods

many

the

at

have

we

the

been

effect

of

box-office.

unable

So

to, but

this is not surprising since in the
New York area where the maxi¬
set

mum

10%
20%

of

density exists less than

the

sets

families

in

any

area

yet and the 10 to
variations in motion picture
as

attendance
weather

and

which

arise

from

picture

popularity
completely overshadow them, a
2.5% loss arising from 25% less
in

10%

of

showing that film on the theatre
screen eight seconds later.
alone,

We,
vised

have

events
to

shown
the

on

tele¬

•' theatre

audiences in
motion picture theatres. We have

screens

which

regular

them

and

recorded

things
wish

we

and
we

even

been

very
some

didn't know.
.

have

We

their

some

•»

picture attend¬

measure

television
far

great

a

television

onto 35 millimeter theatrical film.

helpful

trying to determine whether

ance,
we

made

motion

something

about it.

studied
Motion Pictures

on

lot

a

<

We recognized in 1938 the rela¬
tionship between film and tele¬

con¬

out,

pass

Chicago

how

to

as

affected

activities.

r

<."•

giving

-

;

"
*;

•

serious

study to the problem of how to
which

know-how

the

take

acterizes

char¬

Hollywood
"Oscar
picture
which
cost

a

Candidate"

$25,000 to $50,000 a minute and
apply it to produce a film for
television

which

be

able

minute

and

not

to

over $500
a
present possi¬
in the neighborhood of

bilities

are

$50

minute.

a

the best may

at

stand

whose

think

I

we

are

getting somewhere and I think the
advertisers will shortly agree with
us.

of the families.

learned

have

We

in

that

tele¬

possibility arising
from these observations is, if "go¬
ing out on the town" is going to
drop 25%, how is that going to

vision, the viewer likes his enter¬
tainment in quarter and half-hour
segments, as he does in radio,

affect

to

A

pregnant

the

sales

of

"dress

up"

clothes to go out with?
•For
ered

long time I have consid¬

a

the

possibility of the
being the business

paper

news¬

most

likely, outside of network broad¬
casting, to be adversely affected
by television.

Television's ability

to portray a documentary simul¬
taneity seemed to make it almost

inherent that the newspaper would
be seriously affected.
But so far
television

has

combining

news

editorial

in
rapidly
in detail with an

failed

attitude

to

produce a
product which has the informative
value

of the

essen¬

substantial

although

corporate

natural

different.

programs

existence and
the 62nd year of operations in¬
cluding its predecessors. The com¬
pany is not a public utility but is
primarily engaged in the pur¬
chase, transmission and sale of
of

Angeles

sure

The company is now in its 41st
year

Los

tially

since 1908, the present

annual rate

not

have

ever-present want and the money

ex¬

and

various

analysis of the

its

except to the

group.

pro¬

Construction

subsidiaries.

the

Maybe the set ad¬

economic

control

do not

Part of the remainder

California.

to

radar

they will buy the set or
It does not except to a lim¬

ards

of

Co.

relation

the

and

ited middle-class group. Do ques¬
tions of obsolescence and stand¬

and

Co.

concerning

electronics

and

not?

investments

Southern

inaccurate

whether

subsidiaries,

company's

the

and was rained
out.
Postponement in both cases did

of

stating of much
often

family
of

their

cost

a

proceeds from the
be used to

the

make advances to, or

in,

at

the stock will

of

hundreds

item of much .dis¬

the

Outlook of Paramount Pictures

reaction and found out

vertising is responsible for this.

$95,319,989 and net income for the

and

several

makes of sets.

share.

a

Thursday

buying it begins.

and

the

and

cumu¬

value,

par

price of $101.50
sale

stock,

preferred

without

of

an

and

merits

Co., Inc., on March 23 made a
public offering of 100,000 shares
of
Pacific Lighting
Corp. $4.50

lative,

scheduled for Wednesday and was
out.
It was scheduled for

ning.

of

This fight was

Television

of

knowledge by the male members

Light Pfd.

largest

date

gram,

costs

California.

trade.

fun

profound

syndicate headed by Blyth &

grams

the

of

it

cussion

& Go. Offers

dividend

to withhold action.

Comment

the

dollars it is

•

force

Costs

affected by the presence
television set in the home."

rained

Effect

need

ing and courage, there is no

With

present provisions for escape
clauses no nation or no industry

The

fight even though
beautiful new tele¬

a

vision set at home.

an

"long run, but with¬
restricting or channelizing our

tern of the

and

which

emotional attitudes.

tected for the

barriers agreed to will have

pro¬

the

economic

watchful

ever

interests

American

that

conditions, the reduction in trade

United

their

appreciation of

an

members
at

the lowest 5% families

even

these

developments.

influential

the

level

above

be realistically op¬

rather to

but

in

had

Almost

pessimistic, everything

be

to

of

age

income

But

It may appear

my

a

live.

that I have over¬
fall
for
an
the
difficulties
in
expansion
of
this emphasized
However, it is not
agreement to include 13 additional world trade.
last

announced

were

the

on

private

thing for them to talk about.

course, the situation is dif¬
ferent in each family, depending

Limitation of state trading;
of

family life. Now

Of

change restrictions;
Stimulation

picture of the

a

little

they

see

new

Thursday, March 24, 1949

Louis-Walcott

what happens to it when
television
becomes
an
exciting

the

principal trading
nations of the world, was covered Occupied Areas of Germany
in negotiations and agreement on Japan;
Reduction of import and
some 45,000 trade items.
General

have

we

normal American

let's

with

of" trade

j

(Continued from page 6)

Here

rencies;
Restoration

the

as

President in
his
Inaugural

the

by

program,

,

CHRONICLE

ticipant sports, card playing, social
visiting
and
gossiping,
cultural
and educational activities, hobbies,
dressing up and going out, "doing
the town," sex and for childhood
and old age doing generally noth¬
ing except just sitting. *

(Continued from page 35)
negotiations

FINANCIAL

Television and Motion Picture Industry

,;-w;

-

ered

&

columns

York "Times"

nalistic

or

color

"Tribune"

the

of

of the

New

striking jour¬
the
Chicago

New

York

"Daily
News." Maybe it will finally ar¬
rive there, but it is also possible
it may find the costs prohibitive.
or

while in the theatre he likes two
three hours of relaxation.

Artistically these pictures will
be different, too.
The fact that
the
Hopalong Cassidy Westerns
are
"tops" as television pictures
is

accident. The subtle

no

wood

along with the editor
of a Sunday newspaper who re¬
cently wrote: "In the coming tele¬
vision age, Sunday will be the day
reserved for reading."
"Soon
there will be a potential audi¬
.

for

ence

people

television

who

will

of

be

.

.

50,000,000

able

to

sit

home

at

and visit the ball park,
prize fight arena, the wrest¬
ling bouts, the legitimate theatre
and the motion picture by merely
turning a dial. Certainly this will

the

be tremendous

competition for the

printed word.
"So

the

in the

reader's

time,

newspapers

magazine, generally speaking,
Studies
seem

to

morning

the
we

Holly¬

darkened theatre and on

in the
the large

the

average

tures

as

broader

faster in their
more

Such

pic¬

for television

their

in

acting,

pacing, and depend

action rather than char¬

on

acterization

for

value.

I

What

so-called

the

you

set.

made

are

be

.

on

television

home

will

lost

are

screen

tempt

their

attention

saying is that
"B"
picture will

am

television and
disappear from our
screens.
But television has, as yet,
produced no serious competition
find competition in
is

likely

for

the

tell

"A's".
learned

have

things.
you

fight

to

other

many

In particular, I want to
about the Louis-Wolcott

Summer

last

which

was

Theatre
television. We

shown in the Paramount
in

New

paid

York

by

$1.00

over

per

member for rights and.

audience
television

paid under 5c per viewer.
By
contract, we were allowed thirty
minutes before the fight began,
to
announce
it.
The television
broadcaster

was

nounce

it

within

that

two

allowed

to

an¬

Yet,
minutes, the

days ahead.

thirty

Paramount Theatre was packed to

coming struggle for

should fare much better than the

pecially

to

uses

We

I don't go

nuances

of emotion and taste which

Sunday
have

indicate

reading,

es¬

newspaper.

made

recently

that

Sunday

particularly,

is

the
the

Evidently the fight

rafters.

promoters

were

theatre

more

afraid

announcement.

haps, in this,

of

Per¬

they showed great

wisdom.
For

the

audience

mount Theatre were

in the Para¬

laughing and

cheering the fighters and yelling

encouragement to them while the

Volume

FINANCIAL

&

COMMERCIAL

THE

Number 4788

169

in the

crowd

while

and

stadium

booing

tain

in

was

observers

our

away.

the

of the

dullest fights

In

to

order

what

happening, I have looked at
recording of the theatre
showing of that fight many times.
I

film

have

read

reports

many

to

as

what

happened at the stadium,
bars, and in homes. My con¬

in

clusion

is

that

has

theatre

the

characteristics that cannot be

re¬

produced elsewhere.
On the theatre

in

Tne

the

the images

20 feet

over

furthest

seats

away,

balcony, were the equi¬
only forty feet from the

valent of

ringside.

Walcott's

grimaces

and

attempts

by

gestures to induce
up so he could get

Louis to open

if

look
•

walked

and

said

wouldn't

he

bit remaining a

one

hadn't made the

they

was

television

of

treating it
It is

know the

one can

ties

but

aren't

we

tame

a

as

potentiali¬
orangutan.

medium for

portraying pic¬
tures in motion. For years there
has been a business developed of
showing motion pictures in thea¬
a

they

as

distance and either

a

made

are

stored

Some

of

business of

man

alone"

be

would
our

guess

present

will
who

those

of

the

the

as

proceeds

of

the

namely,

the

the

newspaper,

or

apparel business.

Revenue Bonds and

lack

h

action

of

because

their

inability to see the intimate situ¬
ation. At home, most of the screen
images were six inches high. To
be forty feet from the ringside,
one

had

the

television

head

to

be

in

three' feet

from

if

And

set.

one

that

spot, the other
eight people in the room couldn't
was

anything.

see

The

same was

will

assure

finished

So, mo one at these
two spots saw the intimate details

fight and, of course, they
But, in the Para¬

didn't enjoy it.

Theatre

mount

all

with

reacted

mind and

the .crowd

had

won¬

a

derful time.

We have again and
had the same experience
with outstanding
events of na¬
tional political importance. '••••/;-

again

'

Television Creates Desire to See
f

gencies

Remember there

provision

for increasing rates or
if necessary, so adjustments
and must be made in the rates

tolls
can

if estimates
The

is not

sired

not accurate.

are

amount

of

in all purposes.
in

used

as

the

principal

empha¬

me

times

of

the

is

It

annual'

serial)
payment (if a

fund

a

"Coverage"

the

to

does not

interest

annual

re¬

V Finally,

learned

have

we

television

in

set

that

the home

is

marvelous in¬
people want
pictures that one

going to be such

a

strument for making
1o

motion

see

if

sometimes

wonders

it

wasn't

just devised for that purpose.
Only 15,000,000 of America's 148,000,000 see the average so-called
"A" picture. I feel ashamed of our
advertising and publicity work
when I give you those figures.
there

But

static
the

appeal

the

to

in portraying
action in our

page

of

We

features.

limitations

are

printed

the

believe

is

there

no

of making a person hungry
completely effective as that of

way
as

him a small taste of a
delectable dish. Through a televi¬

giving

sion broadcast

yourr

home

come

into

you

will

we

just

show

to

enough of a picture to make you
hungry for the rest of it. And if
don't come to the motion pic¬

you

ture

theatre

then

either

job
first
take

If

are

that
bad

a

becoming old and
take

the

of

care

believe

We

part.

after

done

have

will

We

it

see

we

or you

blase.

to

you

will

attitude I
think you will agree that we are
not going to be like the officer in
the Air Force, where men become
we

pursue

this

reached the

generals at 35, who

unheard of age of 51 and was

junior

a

seems
cn

a

still

captain.

It

that he had been stationed

one

the

officer,
the

of

Pacific

jungle

and

had

islands in
been

dis¬

gusted with the martinet ideas of
officer who each

the commanding

night sounded "alerts" with no
results for many nights in succes¬
While

crabbing

about

the
situation he at least conceived a
brilliant idea. He trained a young
sion.

tame
orangutan who was
hanging about the camp to jump
into his plane, put on the goggles
and start the motors, whenever an
alert
sounded
in
the night. It

and

worked for weeks.
One

taking

night the "all clear" didn't

times

would

want

I

a

jumped from his bed, dressed and
rushed out to his plane just in
time to see it take off in perfect
alignment with the others. The
commanding officer gave the cap¬




is

of IV4-IV2
satisfactory,
situation

other

some

might

of 1% to 2 times.

attempting to give you
I want to emphasize

formula.

that.

Rather

I

suggesting

am

a

for
average
and different
purposes.
No one should attempt
to lay down an inelastic yardstick
here.
In one place you may find
possible

a

of
situations
range

coverage

good property in a town with a
that it is difficult to market

name

and vice

versa, so

we

must allow

leeway.
A few years ago

before the Port
Authority had made
the very fine record it now has,
it called a $24 million issue and
refunded $16 million of it at a
lower
rate
when the projected
coverage was only approximately
of New York

times.

1.1

to

bonds

The

several

mium.

insurance

buyers,

That

was

be
in

a
a

were

best

story
what

illustrated

he knew -which
happens when

absorbed with methods

gets

one

.

story about the slide
because he said that it was

misses the main

statistics and

offered

3 V2

year

times and at

rate each year

scheduled to
be flexible

Here's

estimated at
even higher

during the 30 it is
So it's well to

run.

this point.

on

a

an

story

by

Charles

F.

Kettering, former Vice-President
of

the

Motors

General

Corpora¬

tion, which I like in this connec¬
tion.
He spoke before the New
York Bond Club

a

few years ago.

He

began his talk by saying that

he

probably knew less about the

financial and investment business

than any man in an official
tion
in
the
country.
He
-

whenever

had

he

been

posi¬
said

asked

to

buy stocks or bonds and the sales¬
man had
quoted great quantities
statistics
money,

in

an

it had

But, when he

was

attempt to get

left him cold.

given informa¬

tion which enabled him to realize
that

the

security

represented a
partnership or an obligation of
some
important
corporation or

was

man

a

firm

a

able for $11

contract

avail¬

million of the work
bought

underwriters

the

issue.

item

There

also

was

a

20%

for

contingencies to protect
the
estimates,
which
in
turn
seemed good, y.

The flow of revenues,

the order

they are to be disbursed,
prime consideration. The
generally accepted practice is to
have gross revenues go into the
of

are

of

this

made to various re¬

funds to

serve

Out

fund.

revenue

gross

payments

assure

proper

dis¬

tribution, to protect the interests
of bondholders and- yet provide
the managers moneys to carry on
operation satisfactorily. Disburse¬
should

ments

follow

a

course

something like this, and may be
varied
somewhat
depending on

the German Army, how. you

slide

such-and-such

at

a

place,

etc., and said, "Now we will read
the results—the

story at an engineering

I told that

in Chicago one time and

congress

after it

is 3.998"!

answer

was

seriousaround to

over, a very

minded gentleman came

said,

and

me

don't

"I

(3) Operating and maintenance
reserve, sufficient for two or three

months' operation.

(5) Emergency maintenance re¬

"Because that is about as close

(6) Reserve for purchases of
equipment—renewal and re¬

can read a slide rule."
So,
sometimes we miss the whole pic¬

because

down

a

written

have

we

formula.

people who

are

story

obvious. There

course

use

this

of

moral

a

are

of
lot of

buying bonds who

are

the slide rule method only

are

frequently they
which

so

of the best buys

some

offered.

there

in

all

In

what

investments

someone

has called

"imponderables" which should be
taken into consideration, and the
slide rule will not measure "im¬

ponderables."
The

ability of the issuing body

produce the service must be
well established, particularly
in
water
bonds.
There
should
be
to

plenty of evidence that the water
supply is ample to take care of
present demand and to meet
expected or likely growth as well.
Here again the general economic
the

character

of

known.

•

the
,

area

'

,

should
\

/

be

,

satisfied himself as to
soundness of the pro¬
ject, the buyer should note care¬
fully various covenants to
be
Having

the general

found

in

the

indenture

or

trust

They are of the ut¬
most importance. They must pro¬
vide
ample protection
for the
bondholders and yet
allow the
agreement.

legal

which must be used
portion of principal by

purposes

to retire

a

whenever

exceeds

fund

a

may

ferred to

a

amount

for

debt service.

the

should

of
deposited,

proceeds

be

the

bonds

The ideal

average earn-

the pres-

cover

additional

of

.

•

requirements plus .'
bonds

well, a given number of
say iy4 to 1%, depending
character

by

situ¬

three years have

or

been sufficient to

those- of

„

the

earnings available

ent debt service,

the issue.

as

>

times,.
on

In

the

1

some

the Pennsylvania Turnpike
is one, the expected earnings from
the improvements provided by the
cases,

bonds

the

at

coverage.
When that is >
the requirements may run ,

to two times.

A coverage of

1 Vz times is

probably a safe aver-'
in the first illustration, if the?
project is established and run¬
ning well.. ■
\
.
. r
Is the preparation of an annual
budget required?
And is a pub-*
age

■

lie

hearing

this

budget prohearing is
the begt method yet devised for
uncovering too liberal payment of
salaries, emoluments of one kind
or
another, or unnecessary 'ex¬
penses, in a project whose rev¬
enues are running well ahead
of
requirements.
Is ample insurance carried? Are
there any prior or equal claims on
on

vided for?

The public

the net revenue?
nant

Is there

a cove¬

requiring the issuer to make

public either directly to inquirers
or through the trustee or the head
the underwriting syndicate a
report of operation annually at
least, oftener if practicable?
If
the project is a large and impor¬
of

tant

be

monthly reports should
is now being done by

one,

made,

as

several of the best managed.
of

The
reports

or

these

having

not be elaborate, but
enough to show which way your
ship is sailing.
A committee of
They need

tion has

recently prepared report

for

forms

fund

reasonable

of

payments,

amounts, beginning within a year
two after the

operation of the

issued.

are

the

of

some

popular

for which revenue bonds
When

one

of

these

forms is filled in it should enable

experienced investor to deter¬

mine

investment

the

value

of

a

given bond and to tell how well

the project is getting on.
A set of
forms
may
be - obtained
except < these
through members of the Associa¬
in rare cases such as a transit is¬
sue.
Retirement of the debt well tion and I think you would find
I suggest that
within the
life
of
the facility, them interesting.

facility starts,- that
is

reserve

not

a

a

depreciation

necessary,

takes the place most

depreciation

effectively of
in such

reserve,

is

What

covenant

the

which

fixes: the
rates
or
tolls?
This
should
provide that the issuer
maintain
is

them

at

a

level

which

produce a speci¬
fied coverage for debt service. The
issuing body must have complete
freedom to adjust—raise or lower
—rates to meet the provisions of
the covenant. This right, by the
designed

of the features pecu¬
bonds, as com¬
pared
with those
of privately
owned corporations.
way,,

liar

is

to

one

to

revenue

One of the best known and suc¬
cessful
nue

projects financed by reve¬

bonds is

the

San

Francisco-

was

on

passenger

cars

50 cents. It has been steadily

reduced

to

25

cents, the present

They will be ready
in about thirty

set.

you

get

for

distribution

days,

case.

,

be added
in arriving :

may

to the current average

an

inally the toll

instance,

two

over

purposes

for problems arise.

bonds

of

ation is where the

ings

limit

additional

the

feeling is that where we have
provision for ample maintenance
and serial maturities or sinking

Our

Oakland Bay Bridge. It was placed
in operation early in 1939. Orig¬

For

to

the Investment Bankers' Associa¬

notice I have not re¬
"depreciation reserve".

management sufficient freedom to
operate efficiently when unlooked

the

of

amount

is

published in some financial pub¬
lication
should
be
encouraged.

(7) Balance available for other

specified level.

is

>

the

placement.

You

The

that

custom

call

Slide-Rule Method

Avoid

careful

new

as

you

ture

,r-,*/'

serve.

about that story at
said, "Why not?" ' He said,

I

up

five years.

thing funny
all."

one

built

any¬

see

Debt service reserve equal
year's requirement to be
over the
first four or

.(4)
to

be

custom

additional
Revenues and Their Disbursement

Lieutenant Manheim of the
purpose of the issue:
could
(1) Operation and maintenance
make calculations, and that sort
of thing.
"I will give you," he expenses.
(2) Monthly payments into in¬
said, "a specific example of how
terest
and
principal or sinking
this works.
Let's multiply two
by two." He told them to set the fund.;
vented by

choosing them,

pre¬

days with the coverage
debt service require¬

the first

Canada

miss

a

of the peak
ments

"At McGill University

point.

companies,
extreme;

there-was

usual

up

.y

a

at

one

water revenue issue
few

sold

There is going to

here's another.

his

Captain

be

coverage

not

am

a

after

Our

coverage

in

city

established water

an

a

whereas

the

and some other purpose we

of

enemy.

over

company

sound and the Squadron went out

the

well set up water project,

a

instance, -where

sophisticated

of the second.

care

In

for

passed, and as it
is a State project they were ac¬
cepted as satisfactory. In addition

important covenant. The

must

will not be unduly di¬
by an increase of charges
principal and interest.
The

ing.

the

4

,

luted
for

done

rule

of

Bonds

revenue

is

told

Issuance

„

«.

(

the provisions for the

are

very

in which

each

year.

legisla¬

be

a

buyer

felt that he had a reason for buy¬

in
lecturing to
the first-year class in engineering.
He explained the slide rule, told
them what it was, that it was in¬

refer

as¬

What

the

He

for

Additional

and he was able to
position which that
corporation or community occu¬
pied in the economy of the coun¬
try and the kind of service it was
rendering, he had something then
that to him was tangible and.he
the

visualize

or

issue), plus the interest, is
exceeded
by
the
net
income
pledged and available to pay them

found in

was

additional

that,

would

before

term

quirements alone.
the

Them

community

coverage

maturity (if

or

same

bonds.

revenue

sinking

or

Let

meaning of

number

de¬

coverage

necessarily the

size here the

Pictures

Motion

well.

as

is probably, or there should be, a

solution

surances

tion

(Continued from page 8)

true

in the bars.

of the

flow to Judge

Provisions

y

is

a

low. A

.

the public has been bene-

issuance of additional bonds? This

They weren't visible to
man.y people in the stadium and
to those to whom they were vis¬
ible were influenced by the com¬
plaints of those who only saw a.
of

■

in¬

be present or there should be some

magazine, the automobile

the "dress up"

other

are

the

without

ly visible.

are

where

producer. If
bond issue

revenue

a

vision for raising additional funds
if the estimates of cost were too

of their dreams

me

There

fited in this way.

value

his swinging right in, were plain¬

have told

authorized.

feature in the

a

time,

picture,

also

completed. A partially completed
bridge or electric plant is of no

job. One of the prob¬
lems in setting up the Delaware
Memorial bridge was because the
legislation limited the bond issue
to $40 million. There was no pro¬

leisure

have

should

that

other guarantee which

motion

tolls

truck

greatly reduced. Meanwhile
the debt, originally $71 million,
serial and term, has been reduced
to a total of only $27,340,000. All
this has been accomplished in the
short period of 10 years, and with
tolls much lower than originally

should not be sufficient, authority
to issue additional bonds should

home

American

that

see

The

stances which could be mentioned

decades

will have become

Care should be taken to

toll.
been

the proposed construction will be

to 40 hours (a work
hours) during the next
that .television

30

several

of

37

It

leisure time increase from the

week of 30

vided.

to¬

continues.

time

my

new

trend

present

leisure

ward

reach

will

the

heights if

slightest setback to all those other

enterprises

tenth

a

providing

with "something to live- by except

industries which satisfy the wants

busy trying to
of showing them.

these

If

other way.*-

some

The

preferably with a trustee, and be
disbursed only on order of the
issuing- body. If construction is
involved the engineer's approval
should also be required. He as¬
sumes responsibility for complet¬
ing the job within the funds pro¬

they have

are

new ways

succeed.

in

or

(1317)

Economists

or as

film.

on

inventors

and

figure

"motion

shows

Television

pictures at
been

with synchronized
sound
is
still
in
its
"infancy"
whether they are shown on film

bread

over.

No

successful the business of making
motion pictures

"; ■;;

:*

■

orangutan
a
Lt.
Colonel
for
gallantry in action after the raid

tres.

screen

of the fighters were

high.

have minded

captain

ever.

understand

was
our

1
captain
*

The

homes and bars

were reporting a
popular reaction that it was one

derisive

a

CHRONICLE

K

.

a

of

Managers

v

folios should find

reports

on

the

which they own,

a

port¬

bank

file of these

revenue
bonds
extremely help¬

ful when the examiner calls.
Is there
what

are

a

corporate trustee and
Is an inde¬

his duties?

pendent audit
small

some

provided for?
In
the cost of

projects

services is sometimes diffi¬

these

cult, if not almost impossible, to
However, they are highly
desirable and should be provided

meet.

the indenture if

for

in

can

be found to do it.

Case

any

of Default

Remedies

in

What

the remedies in

are

of default?

trustee

if
be

case

What are duties of the

trouble arises?

receiver be appointed?
should

way

provided

(Continued

May

a

Protection
against a

on page

38)

,

^

38

(1318)

THE

that

Tomorrow's
Markets

any

around to getting

of them.
❖

=

*

(Continued from

analysis stocks
future earnings and

prospects, not past perform¬
ance

By WALTER WHYTE=

CHRONICLE

so-called

or

How lo Judge Them

❖

In the final

go up on

Says—

FINANCIAL

assets would disap¬
long before the stock¬

holder got

Whyte

&

Thursday, March 24, 1949

the

pear

Walter

COMMERCIAL

inherent

37)

page

small group of bondholders
in their own interest alone,

acting
with¬

out consideration for all. The rec-n

ord of

properly designed and well

conceived

bonds

revenue

good, that

is

so

have not had many

we

Spaing Attack on
foreign Investments
(Continued from

Geneve.")
law

"Under

CHADE

becomes

the payment of

But

it

as

and

this

h£s

liable

for

liquidation taxes.
assets

no

in

to

conversation—not

profits.

tomorrow, it's worth 50, and

plant

valuation.

sometimes

comes

The

up

subject

"Statist.")

The

subsequent

All the

on.

%

that

lists

*

of

*

Last week I suggested
buy¬
im¬ ing Bristol and Myers at 31
with a stop at 29. I also
spoke
sjs
sjs
highly of the oils, though I
It proved, or purported to didn't specify prices. Bristol
prove,
that a great many came in and you're now theo¬
stocks were on the bargain retically long of it.
I don't
counter leading to the wide know what oils
you have.
from

came

various

interesting and
pressive.
were

circulation

the

of

sources

even

statement

5.':

that

many
companies were
worth "more dead than alive."

Those who obtained the ad¬
vance

so-called

underpriced

stocks out of the desert'
the

into

It

was

the

sjs

current market

can

judge of

action, I think

stocks will go up some more
in the next week or so.
But
be

optimistic.

as rosy as your

and magazines tell

newspaper
you.

More next

Pyramid
stock,
get two others to do the same,
You

and

beautiful

It

picture. There

thing wrong with it.
The market being what it is
just turned its nose up and
went on doing the opposite of
what everybody had hoped it
was

[The

some

infinitum.

ad

on

so

was a

buy

article

time

not

coincide

Chronicle.

Whyte
in

are presented as

V

'

'

•

I'"'

'

'

V

❖

*

"

'• '

❖

Tying net working capital
market value is always a
pleasant pastime. There's one

trouble with it.

If

a

company

loaded with

big assets, bigger
share than its stock is sell¬
ing for, were to apportion
them out to stockholders, it
per

would

stocks
ture.

make

buying their
highly profitable ven¬
But if a company is

a

thinking
chances

of

doing that,
the

are

lead to the

move

causes

the
that

will be such

"Management Control Through
Accounting" will be the sub¬

Cost

of

talk

a

by Eric

A.

of Peat, Marwick,
Co., to the Brooklyn

&

Chapter of the National Associa¬
tion of Cost Accountants at their
regular monthly meeting on Wed¬
nesday evening, March 23, 1949.
This

is

in

COrtlandt 7-4150
Private Wires to

state

a

of

quite ideal.
is well

So

to

the

covenants

they

as

provide for:

(1) The distribution of revenue
(2) The maintenance of rates
issuance of additional

(3) The
bonds

remedies

in

of

case

these

covenants

ably

satisfactory,
nights.
However,

are

reason¬

can
sleep
it is well to
wake up now and then, to look
over
the
reports of
operations
some

tention

on

lived

Camman

can

make of

with

it

for

number

a

of

He is the author of many

the

authoritative

Costs."

He

is

"Basic
a

past

National President of NACA and
a

member of the American In¬

of

Accountants, American

Management Association, and the
New York

Guests
the

State

you

The

care.

the

better

bondholder

at¬

pays

to

are

welcome

Clement's
and

35th

Dinner

at

$3

person;

per

will

have.

its

but

through in two days like
a
"blitz."
The
testimony was
given by only one side so that the
company was not even allowed to
be

heard.

No

notice

was
given,
later, to the bond

trustee, The National Trust Co. of

That's

rather

cleared

in

order

con-'

to

be

the suspicion that it is

of

cahoots

with

Juan

March

and

has, if not condoned, at least tol¬
erated

one

of the greatest robber¬

ies in history.

It is high time that

the veil be lifted here.
of

the

Barcelona

The affair

Traction

throws

rather unfavorable light on Juan
March and certain Spanish courts.
a

What is not possible under a dic¬

tatorship!"
"The Last of the Mediterranean
Pirates"

<

Juan March

thus described

was

by Francis R. Bellamy in his book
"Blood
Money"
(N. • Y., Dutton,
1947, p. 202) and by the Swiss
"Finanz-Und-Wirtschaft" recently
his attempt to seize Barce—

when
lona

Traction

Chairman

The,

exposed.

was

of

the

Luxemburg

meeting stated that the "Spanish
Minister for Industry and Com¬
had

merce

been

informed

that.

Mr. Juan March had publicly de¬
clared that he hoped to extract a

profit

1.5 billion pesetas

of

($150.
investment;

million)
from
his
(sic?)
in
Barcelona

Toronto.
One day after the bank¬
ruptcy^ order was issued, March's
agents hastily became the admin¬

"Finanz-Und-Wirtschaft" of Swit¬

istrators and

zerland

to

promptly proceeded

dismiss

the

executives

(in
All legal

Spain) of the company.
proceedings brought by the com¬
pany in its defense were delayed
by technical
obstacles,
but
all
motions brought by the instigators
of

the

bankruptcy

were

speedily

(London

"Statist.")

Traction."

According to

"This
amount
is
big
enough to stimulate the interest of
a financial tycoon of Juan March's
size.
Obviously, the possibilities
of profit in such a transaction are
colossal

so

that

be ample left

those

there

still

would

completely to satisfy,

governmental and court of-,

ficials who have been his collabo¬
rators."

-v'v'/'v /V'-'V";//';
Fi¬
This
unprecedented policy of
bankruptcy
the Spanish Government was crit¬
was based on the ground that for
years the two sterling bond issues icized by the Agence Quotidienne.
According

the

to

Suisse

Bulletin

"This

of Barcelona Traction
From

rears.

the

were

in

ar¬

legal standpoint
adjudication
of

this

(Spanish)
bankruptcy is an outrage since the
'bankrupt' company is incorpo¬
rated
in
Canada, as is also its
main subsidiary company.
More¬
over
the
suspension of interest
payments on the sterling loans is
due solely
to the fact that the
Spanish Government does not per¬
mit conversion into sterling of the
pesetas earned
by the Spanish
companies."
■
.
,

worth

remembering.
having those reports and
you'll get them.
The forms pre¬
pared by the IBA already referred
to, provide a good pattern. No
prudent investor should be with

at 8:00 p.m.

6:30

Insist

out

on

current

mation
bonds

authoritative

regarding
which

he

the

owns

infor¬

revenue

any

more

rency

revenue

bonds

for

bank

invest¬

ment, points out that just as all
bankers have adequate informa¬
tion

regarding

loans

they

have

made, they should have it on the
bonds
you

they have

have

urge you

bought also.

read

not

to do

so,

that letter

and keep

If
I

a copy

in your files.

According to "Finanz-Revue" of

Five With Straus & Blosser

to

attend

Club,

Third

Street,
p.m.

Ave¬

Brooklyn.

Meal

technical

(Special

at

tariff,
session

to

The

KANSAS
B.

Financial

CITY,

Chronicle)

MO.—Thomas

Gardner, Allen Logan, Frances

B. McKee,

Frank

R.

Timothy P. O'Neil and
H.

Richards,

Sr., have

joined the staff of Straus & Blos¬
ser,

Switzerland

"The

deplorable
developments of

possible only in Spain.
tion arises

as

The ques¬

to how this

was

pos¬

sible, since Mr/March was freely
permitted exchange transfers that
denied

were

to

Barcelona

of

Paris

ments

"We

have

seen

nationalizing

ties,

i:e.:

over

to

handing

the

govern-,

public utili¬
the services

nation

they

as

But this is the first time

say..

that

na¬

tionalization is being made for the

benefit of
Funds

an

individual."

that

should

;

have

been

used to pay interest and dividends

stopped that March might
the peaceful traffic of

were

levy

on

honest

citizens.

To paraphrase in

Charles C. Stickney, U. S.
Ambassador to France, 1796 "Mil¬
reverse

lions for tribute

but not

cent

cne

15 West Tenth Street.

According to Charles Beard, "In
piracy in the Mediterranean

the

during the early 19th century, dip¬
negotiations and paymentto win immunity

lomatic

of tribute failed
for

American

United

The

commerce.

States

resorted

force

to

against the Barbary pirates.
ferson

sent

World
March

was

is

Commodore

eliminated."

living 150

years

Jef-

Preble

Juan

behind

the times.

?

,

■

Trac¬

tion."

Legal Experts Declared Procedure
Illegal

Collusion of Government Officials
If

this

scheme

is

successful, it

will follow that March will be able
to

deprive foreign investors of the

Barcelona Traction

Company's

as¬

sets in Spain. Such seizure of for¬
eign investor's property, however,

Society of Cer¬

meeting which will be held

the

holder

rushed

nancier

ed debt service coverage should be

with

finally succeeded in
finding a local judge in a small
town (Reus) who was
willing to
issue the decree of bankruptcy.
The bankruptcy proceedings were

executed.

ample.
If

March

until six months

effort

who worsted the Pasha of Tripoli,?
The last of the pirates in Western

that management

use

nue




good, although
long as the
conceived, the
area economically satisfactory and
the design of the issue the work
of capable craftsmen, in line With
accepted practices, the chances are
you have a good bond.
not

Government

legal atrocity which apparently is

a

presenting figures to manage¬
ment, what figures should be pre¬
sented, the importance of cost
figures to proper control, and the

Principal Offices

Fresno

ideal and

are

are

ceivable

in

Spanish

Robertson in his letter of
March 11 clarifying the position
of
the
Comptroller
regarding

Mr.

to

in

Teletype NY 1-928

Monterey—-Oakland—Sacramento

which

The

promptly make every

Deputy Comptroller of the Cur¬

return

tified Public Accountants.

San Francisco—Santa Barbara

good many which

more

ities.

eminently qual¬

market.

Members

N. Y.

a

I have been talking
setup.
There are

ideal

an

the Spanish Governmental author¬

this subject since he has

the
_

New York Curb

New York 5,

Of course,

'

•

writes,

recent

by 2.5 billion pesetas (or
$250 million)."
("Journal

Geneve.")

Wirt-

-

than about, other securities in his
portfolio.

of

will present practical information
on the role of the cost
accountant

stitute

14 Wall Street

obligation to raise rates
if
necessary
should
always be
present.
:
•
^
about

bilities

Und

-

Switzerland

for defense" of lawful investment.

buyer's

is

Exchange (Associate)
San Francisco Stock Exchange
Chicago Board of Trade

dom and

permitted
"A

"Finanz

of

and
incredible
this
affair were that a judge of a small
provincial town could be prevailed
upon
to
declare
bankrupt
the
Barcelona Traction Company on
the ground of non-payment of cou¬
pons of its sterling bonds, the pay¬
ment of which had been prevented
by government action. This is a

Standard

New York Stock Exchange

factorily

trite

business

because

cluding

Schwabacher & Co.

ability of the
the rates satis¬
established.
The free¬
pay

government

sterling transfer.

valuation of the BTLP is reported
to show that the assets exceed lia¬

economic

community to

when

accounting books and articles, in¬

Pacific Coast Exchanges

the

and

elsewhere

them, the better bonds the bond¬

years.

on

similar situations

topic is of extreme im¬
portance particularly at this time
flux

the

the

de

Cam-

partner

man,

Mitchell

Mr. Camman is

Orders Executed

Obvi¬

(5) The
budget
and
public
hearing
(6) A report of operations at
regular intervals
(7) And, of course the expect¬

Eric A. Camman

ified

Securities

op¬

maintenance.

had

with

(4) The

proper cost data.

Pacific Coast

expenditures Ifor

and

trouble

ject

to

in¬

about

author only.]

one

'

be

to

and

ously, the rates to be charged for
the service hav£ to be in line

this

necessarily at any
with those of the

They

those of the

would do.
>

do

expected

principal

I urge you to pay particular at¬

expressed

views

for

after

erating

tention

-—Walter

version of the

Club.

terest

Thursday.

board¬
'

room

revenue

purpose

too

Things aren't

promised land of booming

markets.

:|J

From what I

copies of "Life's" piece, don't

in it the Moses that would

saw

lead

net

available

Similarly
schaft"

"Juan March has been unmasked,
as well as his evil collusion
with

must

when a city
or
electric

Phony "Bankruptcy" of a
ponderous and purchases a water
subject
Solvent Company
plant, for instance.
We do not
last week was "Life's" piece specious arguments in favor give as much consideration to
Meanwhile, March has shifted
of higher or lower
prices will that feature as we do to prospec¬ his attention back to the
about how many stocks were
Barce¬
have only a
As a matter of lona Traction and
temporary effect. tive earnings.
proceeded to
selling at less than their net
fact valuation is not always easy
put
it
into
bankruptcy
even
working capital per share. Anybody who doesn't proceed to fix. A given plant may be
on that basis had better for¬
though-the company had 160 mil¬
This in turn started the boys
worth much more under certain
lion pesetas in cash, or more than
with the slide rules digging tify himself with a good sup¬ conditions than under others. Our enough to pay off all the arrears
chief concern is with the amount
of interest on the sterling
for other so-called situations. ply of aspirin.
debt,
so

The most talked of

-

on
the bargain counter
by administrative stratagem. / *".<

under

as

don

takings,"

Spain

international law
cheapness.
Every stock is court decisions to define the such fiscal
claims cannot be en¬
"Talking the Market Up" worth just what it's
selling rights of bondholders in case of forced beyond a country's bor¬
isn't going to get it up. Wall
for, no more, no less. If X is trouble, therefore remedies should ders, the payment of these liqui¬
be given in some detail.
Street
version
of
Pyramid selling
dation taxes now is
subject to
for
100
today it's
So far I have made no reference
Club
makes for
voluntary agreement." (The Lon¬
interesting worth 100. If it sells for 50

11)

page

order to acquire at sacrifice prices
these .valuable industrial
under-'

Spanish

\yould be possible only w'th the
active

cooperation of the Spanish

Government.

Eminent lawyers in Spain have
advised the management of Bar—,
celona

national
G.
of

According to "Finanz-Revue" of
Switzerland "What is involved is

a

Traction

C.

law,

this

case

course

Spanish

designed

to
of

eliminate

Barcelona

the

share¬

Traction

in

"bank¬

as

Professors

and Martin Wolff'

taken in Spain

is illegal.

diplomatic

holders

the

Oxford, have likewise declared,

that the-

Spanish

manifestly

such

Cheshire

plan between Mr. March and the

Government,

that

ruptcy" maneuver by March is
wholly
invalid
and
improper.
Outstanding authorities" in inter-'

jn

Furthermore^

representations

Government

have

to

the

been

made by both the British and Bel-,

gian

Embassies in Madrid in

the

Volume

169

Number 4788

THE

COMMERCIAL

FINANCIAL

&

CHRONICLE

~

'

(1319)

39

billion

and

;

attempt to avert this international
brigandage.

.

The policy of the Spanish Gov¬
created

ernment

widespread
The

internationally

and. biting

"Journal

de

criticism.

Geneve"

policy will be to deprive Spain of
the resources and prestige of this
important international company.
Spain has shown foreign investors
there

curity

is

longer

no

for. investments

any

se¬

Spain.

in

Since

Spain is in urgent need of
foreign capital, the country's econ¬
omy would certainly feel the dis¬
astrous repercussion of the meas¬
ures

which

it

has

taken

against
'these two companies which have
largely contributed to the in¬
ternational prestige and develop¬
ment
of
Spain."
Likewise
Mr.
so

'Redvers
also

stockholder and

a

well-known British

a

mist

Opie,

businessman

and

econo¬

stated,

as

at the Toronto meeting
of BTLP "it is difficult to believe
reported,

'that

there

are

elements

no

-

in

'

t

Spain, governmental or other, that
gravity of the sit¬
uation.
The possible damage be¬
ing done extends far beyond Bar¬
understand the

celona Traction and will-obvious¬

have

ly

serious

the economy

.

The

positive

repercussions

on

of Spain itself."
"Times"

London

"It

measures.

called for

im¬

seems

portant that there should be

some

sort of diplomatic inquiry into the

in which the company

and
■•its
operating.> subsidiaries
have
been treated in Spain.
The treat¬
manner

ment is not of a kind which for¬
eign enterprises ought to have to
expect
t

general ethical grounds

on

in Spain

hardly

other country. It
that
the
United
Canadian Govern¬

or any
seems

.Kingdom and
ments should disown
the

in
1

all

The

matter.

interest

precedent

which it creates is too disturbing
to

be

,

ignored."

Evil International Effects of

The effects of the
ernment's

policy

Traction

lona

Spanish Gov¬

toward

Barce-

Power will

and

be

Its orders for equip-

felt abroad.

| ment and supplies, which had been
^

to consider unsecured loans to the

still

in

Spanish Government or to Span¬
ish companies if and when the

decency,

universally observed principles of
business
ethics
are
applied in

and

Spain, without
qualification.

now

rate

of

gold, which the Spanish Gov¬
ernment
has
deposited for this

regularly in the United
Great
Britain,
Canada,
Belgium and Switzerland must be
placed
States,

discontinued.

in London.

purpose

"The

drawn

Bank

modest'

'extremely

'extraordinary

of

gram

pro¬

imports'

by the private Urquijo

up

of

Madrid, in its 1948 re¬
port, value at $777 million the
cost of equipment from all sources

needed

during the four-year

pe¬

riod, 1948-52, to rehabilitate the
Spanish economy.
The Urquijo
Bank program was intended
to
fitted

be

self

the

into

Re¬

European

no

in that

Olive

Holmes, of the For¬
eign Policy Association, who re¬
cently visited Spain to make a
first-hand

study

the

Spanish

wrote an incisive

economy

which

mary

of

bears

investments

American
She wrote,

sum¬

future

on

in

Spain.

"Since 1936 the econ¬

been living on its own
Spain must re-equip
and

has

omy

fat.

its transportation

modernize

sys¬

the power, mining, steel

tem

and

and

textile

it

if

industries

is

to

the

raise

productive capacity of
the economy, increase its exports
and redress the chronically ad¬
balance

verse

cates

of

Chase

the

that

loan

indi¬

American

private

do not regard Franco as a

particularly
writes

risk."

good

of

Holmes

Miss

So

the

For¬

eign Policy Association.

American

Undoubtedly

banks

In fact, the Spanish Gov¬
ernment has
been trying for a
agree.

long time to negotiate a loan with
the Chase bank, but the bank ob¬
viously had to be sure of the;

principal and hoped for a guar¬
antee by our government.
This,
however, was unobtainable.
The
advance was finally made when

mand."

form of

gold deposited not in Ma¬
The fact that

drid but in London.

Spain received

constituted

bank

vate

loan from

a

The FPA reports "The

Spanish

exchange
situation,
in
consequence,
could hardly be
more serious.
Imports in the first
to little

of

months

down

the

more

year

than

were

third

a

of the import

indices based on the
relatively
stable
years
of
the
Primo
de
Rivera
dictatorship.
circle

vicious

the

If

at

broken

some

point,

have

manifestly

is

to

to

this

be

be

will

done

through foreign aid."
Gold

The

Reflects

Spain's Credit

on

The FPA report

continues, "Of¬
ficial Spanish circles are jubilant
over

the Chase National Bank loan

of $25

million to Spain's Foreign
Exchange Institute, the purpose
of

which, has

nounced.
the

not

They

are

yet

been

confident that

loan, announced Feb. 8,

resents

an¬

only the first

rep¬

substantial'




of

sources

in¬

main¬

be

can

Does

it

to

March

and

CHADE

exposures

Juan

government

defensive

be

may

ethical

an

indif¬

criticism.

the

the

on

remain

shocking

foreign

the

are

and

this

prerequisite

settlement

the

of

publicity

the

by

bureau

the

among

words

its

of

Washington,

in

but by deeds of its government in

Madrid.

Unless

Spain

observes

dealing with foreign investors, it
can hardly realize its hopes, con¬
cerning the UN, the' ECA, and

in

international

to

the

judgment of the organiza¬
tion are able and willing to carry
out
these
obligations."
Does
Spain

meet these conditions?

now

the exchange of am¬
bassadors "implies
the
mutual
acceptance of such obligations.
According
to
"Finanz - und Wirtschaft" of Switzerland, "An
improvement in the political re¬
lation of the Western powers with
Likewise,

Spain

will

only

possible

become

the

loans, public
and
private. The nations of the world
cannot and will not ignore the
breaches of faith involved in the
mistreatment

of

cation

virtual

and

confis¬

foreign-owned

prop¬

the language of equity

In

erty.

jurisprudence, "Spain must come
into court with clean hands,"
ELISHA M. FRIEDMAN.
March

22, 1949.

gives

higher return than the interest
charged.
To borrow at 4%
against securities paying 6% is
a

But it is difficult

sound business.
to

business basis for

the

see

an

interest-paying
loan
based
on
non-income producing
collateral

The newspapers have
been reporting in the past two
years
that
Spain was sending
representatives
to
the
United
States to negotiate credits.
Thus
far, however, private unsecured
gold.

loans

available

not been

have

at

If Spain had treated
foreign investments on the basis
of the business ethics prevailing
in
other
countries,
she would
bank.

any

enjoy good credit and be able to
as

do

But,

other foreign governments.

the FPA report concludes,
will be forthcom¬

as

"Whether help

ing beyond the piecemeal assis¬
tance
which
American
private

(Continued from page 9)
is

going to be in
business
in
a
big
way.
The
United States Government is by

ment

and

odds

ail

tne

the nation.
is

is

biggest

of

business

After

all, this change
rather than fact.

in degree

one

Government

been

has

operating

postal •/, system
and
our
schools for a long time.
Person¬
our

_

cannot be particularly

and that weapon

able

ernment into business will be re¬

minute

Fact

.

partly

on

busi¬

itself.

ness

Individuals

four:

number

service are not
necessarily less efficient or in¬
dustrious than people in private
government

enterprise.
I think it is
stopped hurling the term
crat at
all government
and assuming that their
small

are

I

cures.

the

their

and

wonder

high

effective in

to

is equally avail¬
not

Do

us.

think

some

on

measure,

Government's

depend, in
the Spanish

policy toward exist¬
Traction.

Barcelona

and

sine¬

jobs

times

some

at

which

ability

of

order

time we
bureau¬
officials
abilities

government commands when the

of waste and
ineffi¬
provided the exposure is

factual

and is not

exposure

tainted with

all the time.
I can with
complete sincerity cite them as
examples

dustry and
ity.
What
To
of

good

have

reason

to

refrain

and
to

from

investors which

future

threats

will prejudice

European recovery and economic
of

rehabilitation

world.

the

Spain is now seeking member¬
ship in the UN.
Spain also is

of

officials

public

of

complete integrity, unflagging in¬

of

Europe,

atmosphere.

political

It must

we

all

means

have

with

high order of abil¬
this

add

that

as

1929

between

events

into

entered

to?
result

up
a

and
a

1949

period

changed pattern of the re¬
lationship between government,
business and citizens.
You and I
are

a

going

to

spend our
We had

have to

lifetime in this

new

era.

better

adjust our thought and ac¬
tion accordingly.

tion,

documented

fully

be

United

States

the

by

or

Export-Import

International

Bank for Reconstruction

velopment
Surely, the
will

and De¬

by private banks.
Spanish Government

or

improve its prospects in ob¬

taining

foreign

vestments
ceases

the

in

credits

the

and

future

destruction

of

if

in¬
it

present

foreign investments.

Surely, for¬
eign industrialists will look with
greater favor
on
setting up
branches in Spain if this govern¬

ment will

cease

to

permit

one

of

and

merely accusation and name■
•
'* -■

not

calling-.

for

a

the

conduct

in

too

only

brought to
the

often,

and

cooperation
standstill while we

a

guessing contest

rules

and whether
up

private

business

engage in a

what

of

*

of

the

to

as

game

are

going to wake

we are

ourselves

defendants

in

anti-trust action.

an

Conclusion

number

time to establish
contend

that

for

four:

sound

government

is

It

broad front to

a

the

principle

should

not

en¬

in any business that private
business can carry forward ef¬
gage

fectively in the public interest.
It
is doubtful that this prin¬
ciple would meet with much op¬
position in abstract discussion. Its
application to specific cases is
something else again. In the ab¬
sence of a strong and representa¬
tive
organization to vigorously
further
this
viewpoint,
private
business has been fighting a rear
guard and losing action on this

just sit back and accept things as
they are? Decidedly not. Having
marshalled some facts; I shall now
venture

four

affirmative

conclu¬

sions.
one:

vate business should be

If pri¬

supervised

in the

public interest, government

when

it

is in

assumes

a

business role

equal need of supervision.

Now,

obviously,

government

much

enu¬
more

elaborately worked out set of
conclusions, but time does not
permit. My .plea today is for a
program by American business of
limited
objectives
within
the
bounds of existing "realities. It is

citizens and

to create an

nessmen

as

organization

supervise government in busi¬
With all due respect to the

to

Econpmic Development has dem¬
onstrated

studies

the

and

value

of

statements.

factual

I

hope

a

be found to broaden and

way can

intensify

the

trail

they

have

blazed.
After
that

this

all, we must remember
government is our gov¬

ernment and both it and
must

be

ests of the American

large

business

responsive to the inter¬
the

extent

people. To a
of this

success

great American effort to combine

as

ness.

excellent business organiza¬
now
in existence, I doubt
that any of them is presently fully
equipped to perform this task. The
ideal organization would not only
have to have an adequate staff
and
resources,
but
should
be
broadly
representative
of
all
American business. My remaining
many

tions

conclusions

will

be

confined

organi¬

the obj ectives of such an
zation.

v

^

to

*

liberty

depends

tion

business and

To

of

on

the

coopera¬

government.

larger extent the
preservation of the liberty of free
an.

in

men

the

even

all the world

racy

depends

American

of

success

through American

on

democ¬
coopera¬

tion.

First California Adds
(Special

to

The

Financial

Chronicle)

LOS ANGELES, CALIF.—Grace
S. Stoerrner has been added to the
staff of the First California Com¬
pany,

Conclusion number two: A

647 South Spring Street.

con¬

study of how government is
spending our money should be
on year in and year out.

stant

carried

sion

Citizens'

is

doing

Commis¬
excellent job

Budget
an

along this line for New York City.
heartening to see our present
working with them on a
cooperative basis. I should like to

It is

mayor

see

the Citizens' Budget technique

applied

to

proposed

our

dollar budget

billion

in Albany and

our

$42 billion budget in Washington.
Mr. Hoover and the group which
been
we

working with him

can

save

$3 billion in

say
our

national budget without any sacri¬
fice

in

essentials.

for

year

every

That

man,

is

$20

woman

a

and

child in America. Mr. Hoover and

their

his

Conclusion number

have

I

a

adequate security with individual

that

should

which

warrant

busi¬

me

Conclusions

Does this mean that we

facts

suggest that it is up to you

I

and to

has

Affirmative

loan either by the

a

be

result of thorough investiga¬

the

The

does

it

me

a

hoping for aid under the Marshall
Plan and for

for

business.

a

anyone

world, interested in the recovery
expect that the Spanish Govern¬
ment reverse its present
policy

a

in gov¬
ernment is not responsive to the

,

will

for

that management

ciency,

That will depend

in

accelerated.

than

rather

tarded

•

stand

forward

whole-hearted
cooperation
supervising itself and you may for
with government whenever possi¬
say that there could be no other
ble and when not possible for an
body with power to enforce its
findings. I do not agree. My own appeal to the great court of public
experience teaches me that the opinion on the basis of facts and
sound basic principles.
most powerful weapon that gov¬
Such an
ernment
itself has is publicity organization as the Committee for

ally, I hope the extension of gov¬

may

its

ment

merated

Pattern of Goverment

ing to offer depends,

Whether the United States will

carried

clarification and rationalization of
the rules laid down by govern¬

The

Meeting Changed

low level of compensation is con¬
be able and will¬
sidered.
in the last
My own connections bring me
analysis, upon a decision by the
United States, to reverse its policy in closer contact with the Super¬
of
excluding
Spain
from
the intendents of Insurance and of
benefits of Western political co¬ Banking of New York than with
any other government officials. I
operation."
have not always agreed with Su¬
Fair Play by Spain Might Reopen
perintendent Dineen or Superin¬
Credit Possibilities
tendent Bell.
I never agree with

enterprise

Controls

front in recent years.

favorable

business to be financed

the

campaign

Currently,

Spain will be judged

Rationalization

Government

Conclusion number three: There
should be a constant and incessant

is

universally recognized prin¬
ciples
of
international law in

"open

of

progress

Deeds Count, Not Words

not

$3

Clarification and

affair."

nations,

that

is saved.

more

integrity and

cannot

the

to

Government

of

all peace-loving states
which accept the obligations con¬
tained in the present charter and

now?

seek loans of banks when

rowers

Bank

Collateral Requirement

law

ferent

Spanish
trace

a

until

gram

affair."

Spain
qualify
Membership in the UN is

Certainly, the governments of the

foreign

other

and

However, bor¬

publicity for her.

CHADE

Needed

seven

treaties

has

for

manipulations in the

Traction

the

"If

conditions

justice and respect
obligations arising from

the

pri¬

a

ing foreign investments like
Desperately

Loans

Foreign

for

Barcelona

attitude

establish

"to

Spain promptly suppresses the

unfortunate

Spain agreed to put up as collat¬
eral, 165% of the principal in the

reverse

production is already sadly
inadequate to the potential de¬

power

or

which

longer disclaims interest
project. The gold security

sources

Electric

of trade.

UN

tained."

obtain unsecured short-term loans

Miss

the

under

ternational

feature

exception

Furthermore, prerequisites for
membership in the United Nations
are
specified in the UN charter.
The preamble states as the aim ot

Program and Franco him¬

covery

like

Spain's Policy

'

if

interest, extends for only

citizens, no matter how power¬
ful,
to harass
existing foreign
properties in Spain.
Surely, for¬
eign banks would be more likely

wrote,

"The practical effect of this stupid

that

its

six months and is entirely secured

Foreign Investments Unsafe in
Spain

injection of dollars .into the ailing
Spanish
economy.
The
Chase
credit,
carrying an undisclosed

associates

and

Price

Supports—W. M. Curtiss
for Economic Edu¬

—Foundation

cation, Inc., Irvington-on-Hudson,
New

York;—Paper—Single copies

charge; ten copies $1.00 (lower
prices in greater quantity).

no

Railroads and America's Future
■—Ambrose

W.

Benkert

Co.,

&

Benkert

70

—

Pine

A.

W.

Street,

must, of necessity, go back to

their
feel

normal
more

vigorous
outside

make

pursuits.

comfortable

effective

government

I
if

report

should
some

organization
was

going to

stay everlastingly back of the pro¬

New

York

5, N. Y.

Renegotiation of War Profits—
Richards

C.

Osborn

Economic and

—

Bureau

of

Business Research,

University of Illinois, Urbana, 111.
—Paper.

40

THE

(1320)

COMMERCIAL

&

FINANCIAL

CHRONICLE

Thursday, March 24, 1949

Indications of Current Business
The following

statistical tabulations

shown in first column

cover

either for the week

are

or

month ended

Latest

Indicated

steel

capacity)
Equivalent to—
'•
;!
Steel ingots and castings (net tons).
_____
(percent of

operations

AMERICAN PETROLEUM INSTITUTE:

t; ■
____Mar. 27

/T

'

output—dally average (bbls. of 42 gallons each)-!
runs to stills—daily average
(bbls.)

Crude

(bbls.)

■Gasoline output

Residual fuel oil output

.Mar. 12

.Mar. 12
.Mar, 12

_J

(bbls.)

Stocks at refineries, at bulk terminals, in transit and in pipe lines
Finished

oil

Gas

unfinished

and

Kerosene

(bbls.)

oil

Residual fuel

(bbls.)

1,863,800

102.0

1,880,400

100.3

1,849,000

1,725,000

5,123,350
tl §5,452,000
§17,487,000
§2,093,000
§7,325,000

§8,125,000

5,186,800

§5,515,000

5,330,050
5,404,000

short

§17,705,000

17,754,000

§2,158,000
§6,947,000

2,485,000

§8,542,000

7,617,000

8,561,000

§126,266,000

119,780,000

§18,517,000

§18,999,000
§52,109,000
§59,568,000

20,524,000

8,075

$424,366

199,891

*'$473,476
<■239,266

158,859

*'165,182

232,951
177,386

65,616

*■69,028

69,630

$8,129,918
73,570,480

$6,238,003
76,958,642
21,146,483

53,277,733
22,631,690

All

URBAN
DEPT.

building

61,517,000

CONSTRUCTION

—

82,340,000

48,546,000

Middle
East

(number of cars)

ENGINEERING

709,326

623,037

Mar. 12

705,552
632,622

699,442
618,248

796,486

713,963

and

$184,579,000

$146,604,000

66,103,000

112,754,000

Atlantic

„;

23,598,851
35,260,200

Mountain

___Mar. 17

67,454,000

United

York

CARBON

33,850,000

57,589,000

38,090,000

67,962,000

31,190,000

38,877,000

Month

Mar. 17

>

118,476,000

—Mar. 17

_

29,364,000

50,514,000

2,660,000

18,712,000

States

51,217,797

New

Production

York

BLACK
of

(BUREAU

and lignite (tons)—!
anthracite (tons)

coke

Beehive

Mar. 12

(tons)

—

10,350,000

*'10,260,000

11,440,000

13,454,000

Mar. 12
Mar. 12

700,000

697,000

748,000

1,214,000

155,200

*"159,500

153,800

122,700

Month

U.

S.

of

28,950,000

of

238

.Mar. 19

(in 000 kwh.)__

5,495,769

5,530,629

5,650,279

and

South

America

Europe
Asia

Africa

Central

America

(net

(net

tons)

tons)

(net

tons)
tons)

(COMMERCIAL

AND

INDUSTRIAL)—DUN

BRAD-

&

(net

210

179

180

(net

COMMERCIAL

„_ZZ

tons)

STEEL FORGINGS
of

(DEPT.

OF

January:
(short tons)

COTTON

Finished steel

AND
LINTERS — DEPT.
OF
MERCE—RUNNING BALES—
Lint—Consumed month of February

Mar. 15
Mar. 15
—Mar. 15

(per lb.)

3.75198c
$46.74
$35.58

3.75434c

3.75434c
$46.74

$40.29

$36.25

$37.58

$39.75

In consuming establishments

3.27585c

$46.74

In public

storage

of

as

<E. & M. J. QUOTATIONS):

Lead

(St. Louis)

i

at

(New York) at

Lead

Mar.
Mar.
Mar.
Mar.
—Mar.
Mar.

—

Export refinery at
Straits tin (New York)

Zinc

1

at

Louis)

(East St.

at

16
16
16
16
16
16

23.200c
23.425c
103.000c
18.000c
17.800c
17.500c

23.200c

23.200c

21.200c

23.425c

23.450c

21.625c

103.000c

103.000c

28

month of February
consuming establishments as of Feb. 28
public storage as of Feb. 28
Cotton spindles active as of Feb. 28

19.500c

21.500c

21.300c

14.800c

Running bales

101.68

.Mar. 22

OF

17.500c

17.500c

12.000c

101.68

101.63

113.12

113.12

113.12

Index

crop

98,104
273,146

88,501
20,927,000

21,485,000

r-

87,664

20,758,000

62,182

of

119.00

119.00

119.00

116.41

Mar. 22

117.20

117.20

117.20

115.04

.Mar. 22

112:19

112.19

112.19

110.70

Mar. 22

104.83

104.83

104.83

103.47

Mar. 22

108.16

108.34

108.70

105.86

Mar. 22

113.89

113.89

113.50

112.93

Mar. 22

117.40

117.40

117.20

COMMERCE

COMMISSION

11,557,138

—

of

Railway Employment at middle of
February (1935-39 average=100)

U23.7

1128.0

131.7

$123,024,000

$131,229,000

$121,007,000

46,076,000

42,975,000

8,580,000

8,812,000

8,723,000

24,207,000

18,641,000

40,654,000

50,796,000

24,275,000
32,694,000

INSURANCE—BENEFIT

PAYMENTS TO
POLICYHOLDERS—INSTITUTE OF LIFE

INSURANCE—Month

111.25

.Mar. 22

of

January:

115.24

Baa

Death

benefits

Matured

endowments

Disability payments
Annuity payments
Surrender

values

:

Policy dividends

YIELD DAILY AVERAGES:

LIFE
Mar. 22

2.38

2.38

2.38

2.44

.Mar. 22

3.00

3.00

3.00

3.10

.Mar. 22

2.70

2.70

2.70

2.83

Mar. 22

2.79

2.79

2.79

2.90

Mar. 22

3.05

3.05

3.05

3.46

3.46

3.46

54,399,000

—

—

$1,143,000
375,000

3.27

3.26

3.24

2.96

2.96

2.98

w

Industrial

2.78

2.78

2.79

2.89

Mar. 22

363.1

370.5

373.6

409.3

Group

3.01

Mar. 22

Total

METAL

$1,115,000
361,000

335,000

204,000

$1,821,000

$1,680,000

Febru¬

of

Ordinary

3.40

.Mar. 22

$1,129,000

INSTITUTE

Month

omitted)—

3.54

.Mar. 22

52,452,000
$278,138,000

$1,711,000

PURCHASES

INSURANCE

(000's

80,727,000

$333,180,000

193,000

LIFE

ary

3.13

Mat". 22

Baa

INSURANCE

OF

38,987,000

$296,940,000

_

Total

Average

123,038
363,665

119,007

373,735

14,540,345

INTERSTATE

100.80

.Mar. 22

MOODY'S BOND

2,244,151
4,474,308

COMMERCE):

(exclusive of linters)

1948

LIFE

Average

(DEPT.

785,627

1,627,055
8,213,189

15.000c

19.300c

COTTON GINNING

674,463

1,617,962

7,500,407

Linters—Consumed

94.000c

PRICES DAILY AVERAGES:

MOODY'S BOND

618,155

640,182
Feb

of Feb. 28

as

In

Electrolytic copper—
Domestic refinery at

118,534

131,544
600,500

124,582
570,665

COM¬

In

METAL PRICES

54

106

IRON AGE COMPOSITE PRICES:

Pig iron (per gross ton)
ficrap steel (per gross ton)

94,825

84

Unfilled orders at end of month

Mar. 17

301,105

To,263

30,991

COMMERCE)—Month

STREET, INC.

395,984

398,026

12

Shipments (short tons)—.
FAILURES

408,373

274,449

anthracite

j.

North

To

279

5,145,430

305,452

Pennsylvania

tons)

To

Electric output

*'244

23,125,000

114,566,000
108,225,000
78,745,000
20,117,000

112,342,000

January:

exports

INSTITUTE:

ELECTRIC

EDISON

255

Mar. 12

104,728,000
116,320,000

.

(BUREAU OF MINES)—

To

SYS¬

AVERAGE=100_

37,895,315
197,896,307

94,024,000

106,000,000

To

STORE SALES INDEX—FEDERAL RESERVE

TEM—1935-39

$235,791,622

128,296,000

(lbs.)

To

DEPARTMENT

38,965,760
41,558,175
8,246,656
6,544,474
56,425,947

MINES)-

(lbs.)

COAL EXPORTS

(net
V

OF

(lbs.)
stocks

Exports

(U. S. BUREAU OF MINES):

coal

157,748,529

$8,141,187

January:

Producers'

Pennsylvania

$222,489,796
' 64,741,267

192,977,754

$244,195,551
City

(lbs.)

Shipments

Bituminous

10,110,942
4,077,857
35,898,427

48,152,886

City

of

30,713,329

4,576,587

,

—

Outside

37,346,113

39,980,726

10,925,903

ZZZZZZ

Central

32,729,000

_

COAL OUTPUT

CITIES—Month

Central

West

$90,318,000

___Mar. 17

municipal

$479,967

&

Atlantic

Total

$127,282,000
59,828,000

Mar. 17

•

State

INC.—215

DUN

'

NEWS-

■__

Federal

—

South Central

Private construction

Public construction

,

New

New

construction

U. S.

I

etc.

VALUATION

PERMIT

BRADSTREET,
of February:
England

111,918,000

RECORD:
Total

_

—

Additions, alterations,

32,108,000

Mar. 12

S.
of

residential
nonresidential

;* Pacific
ENGINEERING

OF THE U.
LABOR —Month

construction

New

ASSOCIATION OF AMERICAN RAILROADS:

CIVIL

AREAS

OF

(three 000's omitted):

New

South

freight loaded (number of cars)
Revenue freight received .from connections

47,589
15,549

CONSTRUCTION PERMIT VALUA¬
IN

S.

December

9,677,000

§51,804,000
§59,297,000

Revenue

Ago

13,171

of

9,292,000

§125,801,000

.Mar. 12

at

Year

Month

Month

50,714

2,547,000
7,754,000

-Mar. 12

_.

:

Previous

53,474

BUILDING

at

Latest

primary aluminum-in the U.S.

tons)—Month

of that date)

December-

BUILDING

5,264,850
5,407,000
15,608,000

.Mar. 12

at

(in

are as

(BUREAU OF MINES)—

Production of

■

95.7

-

—:

(bbls.)

101.1

.Mar. 12

(bbls.)

gasoline

at

distillate fuel oil

and

Ago

ALUMINUM

month available (dates

or

of quotations,

cases

TION

.Mar. 12

__

Ago

Year

in

or,

—U.

.Mar. 12

.___

—T_—

output (bbls.)—:
—_____—
Gas oil and distillate fuel oil output (bbls._____

Kerosene

Month

that date,

...

-Mar. 12

Crude oil

Week

on

Stocks of aluminum—short tons (end of Dec.)

Mar. 27

.—

__

Previous

Week

AMERICAN IRON AND STEEL INSTITUTE:

Activity

production and other figures for the latest week

OUTPUT

(BUREAU

OF

MINES)

357,000

—

Month
MOODY'S

COMMODITY

INDEX

of January:
production of

Mine

recoverable

metals

in

the United States:

NATIONAL

FERTILIZER

ITY INDEX BY

Foods

Copper

(in

Gold

COMMOD¬

216.6

•Mar. 19

217.7

(in

Lead

ASSOCIATION—WHOLESALE

GROUPS—1935-39=100:

short tons)
fine ounces)

(in

short

232.1

Silver

151.5

155.3

162.2

246.2

Zinc

Mar. 19

235.3

236.9

230.7

310.1

310.4

307.9

322.5

-Mar. 19

200.1

205.1

197.7

266.7

-Mar. 19

235.1

236.2

229.1

233.5

235.9

238.1

228.6

-Mar. 19

165.3

167.3

166.3

173.5

-Mar. 19

190.3

190.8

191.1

187.8

190.0

190.1

163.5

-Mar. 19

215.8

217.4

217.9

(in

As of Jan.

Midland

233.4

(000's

142.5

142.5

143.3

156.3

Member

142.9

142.9

142.9

137.7

Total of

150.5

150.5

150.5

143.7

Credit

155.6

155.6

155.6

138.0

Cash

209.5

210.7

209.5

218.0

PAINT

OIL,

AND

Mar. 12

158.333

178.515

155,095

188,104

Mar. 12

162,692

157,814

177,390

183,587

Mar. 12

79

86

287,302

319,066

481,757

137.3

138.1

140.1

145.9

INDEX —1926-36

AVERAGE=100

Total

PRICES

NEW

SERIES

—

U.

S.

DEPT.

OF

LABOR

Farm

commodities other than farm

Net

Fuel

foods

158.5

159.0

158.5

161.7

169.9

171.6

168.9

188.8

161.0

161.1

159.0

173.6

_Mar. 15

.

152.9

147.7

142.2

143.0

149.9

Mar. 15

other

152.3

141.7

135.6

135.9

138.0

130.9

Mar. 15
Mar. 15
—Mar. 15

metal

152.0

Mar. 15

.

materials
products
materials

and

Building
All

and

and lighting

Metals

listed

of

of

177.6

177.8

178.1

155.8

200.1

131.5

201.3

201.3

131.5

131.0

193.1

Income

deductions

available for

Income after fixed

Other
Net

from

fixed

deductions

ZZ_ZZZ_

income

Amortization

Federal

of

income

Dividend

defense

Hides and skins




equip.)~_

projects—

common

On

preferred

stock

stock.!
to fixed

164.6

158.6

221.4

198.4

227.6

222.2

220.4

208.3

240.7

Production

Mar. 15

179.9

177.6

190.3

181.8

.__

Shipments (number of units)
Shipments (value in dollars)

1—

67,478,248
131,896,587

63,158,207
136,313,176

69.9%

70.5%

72.9%

$111,722
201,486

$120,973

$74,121

218,073

217,026

$84,065,713
20,450,484
104,516,197

$76,669,096
46,859,853

5,919,013
97,439,262

4,867,888
99,648,309
64,754,855
2,994,505
61,760,350

§On

new

basis of

TRUCK TRAILERS
,

reporting in California. Principal changes

49,889,997
32,848,365

32,276,606
,

1,396,566

5,963,658

117,565,290
80,383,219
7,600,554
72,782,665
29,654,285
1,420,890

41,338,248

23,908,620

5^,961,970

20,496,866
9,105,346

2.86

2.86

6,853,158

.

3.16

(DEPT. OF COMMERCE)—

Month of January:

'■Revised

4

63,421,821
13,531,824

123,528,948

28,854,228
10,256,958

!

charges

208.1

!

$536,636
56,963
396,428
596,416

1,158,622
33,649,024
__

161.5

Ulncludes 414,000 barrels of foreign crude runs,
exclude cracking stock from distillate and residual fuel oils.
figure.

&

taxes

207.1

Meats

55,882
347,492
573,205

appropriations:

On

134.9

ZZ

income

charges

Depreciation (way & structures

—Mar. 15

—

$537,264

349,532
565,359
65,324,673
131,863,412

$64,661,934
38,696,341
103,358,275

charges.

Mar. 15

:_

;_

.

—„Mar. 15

—'_

Livestock

"-Revised

shai*es_—

____

income

Ratio of income
Grains

$526,649

December:

income

Special indexes—

.

customers

railway operating income—

Total

Mar. 15
Mar. 15

products

£4,390,000

SELECTED INCOME TERMS OF U. S. CLASS I
RYS.
(Interstate'Commerce Commission)

—

Mar. 15

products

Textile

value

Miscellaneous

Foods
All

to

hand and in banks in U. S.__
of customers' free credit balances-

—Month

1926=100:

All commodities

£6,578,000

57,529

carrying margin accounts—
net debit balances—'__

customers*

extended

price index, 12-31-24=100_.
Member borrowings on U. S. Govt. issuesMember borrowings on other collateral

Other
WHOLESALE

£5,420,000

102

278,632

Mar. 18

PRICE

80

Mar. 12

at
REPORTER

$28,110,578

omitted):
firms

Stock

!

DRUG

1,223,786

28

Market-value of listed bonds

ASSOCIATION:

(tons)—

activity
(tons)

$27,579,534

on

Market

Unfilled orders

3,145,852
48,068

GREAT BRITAIN—

STOCK EXCHANGE—As Of Feb

-Mar. 19

Percentage of

2,925,798
55,141

DEPT.

(000's omitted)

31

Bank, Ltd.—Month of February—..

NEW YORK

-Mar. 19

Production

52,914

NEW CAPITAL ISSUES IN

-Mar. 19

(tons)

2,831,728

ounces)

MONEY IN CIRCULATION—TREASURY

-Mar. 19

received

fine

(in short tons)

-Mar. 19

Orders

33,144

210.8

Mar. 19

Metals

NATIONAL PAPERBOARD

73,150
162,270

36,997

241.0

Mar. 19

50,668
151,267

25,008

251.5

Mar. 19

Fuels

216.7

■Mar. 19

.

50,928

118,875

tons)—

(number of units)——.:

figure.

tPreliminary figure.

2.766

•

2,566

*3,453

3,303

*$11,018,414

$9,216,540

$8,983,900

3,426

3,378

Volume 169

Number 4788

COMMERCIAL

THE

CHRONICLE

FINANCIAL

&

(1321)

41

Economic Outlook and the Automobile Industry

purchases. Others apparently have
postponed buying in the hope of
lower prices—a hope based on the
returned
not to eat the fatted
drop in some food and other liv¬
calf, but to keep the calf fat.
With the help of our national ing costs. Wide publicity given to
these price
decreases seems to
sales force, can a balanced market
have expanded rather than de¬
be maintained today and-kept on
creased consumer price resistance
its long-term upward trend?
I

(Continued from page 13)

their

The Prodigal Son has

own.

—

There

has

been

considerable

discussion

recently of the large
by most of the major railroads since
and the consequent substantial increase in the
amount of equipment debt
outstanding. Most of the new equipment
has been financed this way, with interest rates
generally very low. In
individual instances certificates have been sold in amounts ranging

equipment
the end

programs undertaken

of

the war,

think

as low as 65% of the cost to as
high as 100%. Such certificates
mature serially with final payments varying from 10 to 15
years from
the date of issuance. The
question that has arisen is the extent of the

cash drain

on

the railroads in meeting these

serial payments in the
sharp decline in earnings.
Theoretically in the past it has been assumed that charges made
for equipment depreciation would be more than sufficient to cover
cash payments on account of annual serial equipment maturities. With
the large volume of new equipment obligations sold
during recent
years, and the additional financing of this nature still in prospect,
this theory no longer holds for a number of Class 1 carriers.
For
many roads equipment maturities, at least in the years immediately
ahead, run in excess of charges they have been making for equip¬
ment depreciation. The Bureau of Transport Economics and Statis¬
tics of the Interstate Commerce Commission in a recent Monthly
Comment on Transportation Statistics had some interesting figures
event of

a

and comments

on

this situation.

For the Class 1 carriers

as

a

in the automotive field.

so.

Consider the following facts:
The number of families in this

from

country has increased by 12 mil¬
lion

in

sents

That repre¬

eight years.
of

lot

a

human needs.

new

At the same

time, our labor force
has grown by 12 million.
That's
a lot of buying power.

The

is

backlog of individual sav¬

times greater than

three

In fact, the pres¬

in 1940.

was

ent

whole principal maturities of equip¬

obligations for 1949 were given as $209,341,073.
Equipment
depreciation charges for these roads amounted to $250,826,003 in
1948. In other words, maturities would absorb 83.5% of the depre¬
ciation. As is usual throughout the field of railroad statistics there
are
wide variations throughout the industry.
Percentagewise the
Pocahontas region showed up the best. Its 1949 equipment maturities
are only 63.3% of the 1948 equipment depreciation charges.
Next in
line was the western district with 78.8%, followed by the eastern
district with 85.5%. The southern region was the only section where
1949 equipment principal maturities topped the 1948 equipment de¬
preciation.

savings figure of $207 billion

about

greater than

attitude

decision

or

automobile

to

''wait

and

While these factors have caused

shift iii the automobile market,
they have not, in my opinion, re¬
duced by

And compared to

5% the basic need and

demand for

new

transportat¬

car

ion.
I

convinced

am

that

industry

tween 5.5

and

the

could

auto¬

sell

be¬

cars

million

6

and

disposable income, \ we are trucks this year, if they could be
saving at a much higher rate than produced. That's about 10% more
we were, eight years ago.
than were produced by the entire
In 1941 this country's ratio of industry in 1948.
Let me point
consumer
debt
to
savings was out that I said sell 10% more—and
about 63%.

That

considered

was

conservative figure.
Yet today
our consumer debt is but 32% of
a

savings—a

our

which

one

reflect
And
of

in

by itself would

these days when many

think

us

low ratio and

very

taken

sound national economy.

a

have

we

seen

some

Percentagewise Atchison, Topeka & Santa Fe, and affiliated com¬ justing our figures to a 1940 stand¬
panies, is in the best position, followed by Chicago, Rock Island & ard, we find that if consumers
Pacific.
In both of these cases reported 1949 equipment trust ma¬ maintain the same
living stand¬
turities amount to less than 50% of the 1948 equipment depreciation. ards
they had at the start of the
On a dollar basis New York Central and Pennsylvania show up
well, with the latter also in a strong position percentagewise. Penn¬
sylvania's reported 1949 payments amounted to $15,957,000 or only
60.1% of its 1948 equipment depreciation. Central's reported matur¬
ities amounted to $17,325,280 compared with 1948 equipment depre¬
ciation of $21,811,703.
-

they still

are

left with four

that year. That sum is $103.1 bil¬
It represents what consign¬

have to spend after their basic

of the new equipment is, in itself,
efficiency and if this operating
could obviously be no thought of
losing the equipment through failure to meet the payments when
due.
It may be expected, however, that heavy serial principal re¬
quirements may dictate conservative dividend policies in many in¬
stances.

time

of

1933

and

built

or

the

that is of¬
Telegraph
Co 25-year 3% debentures, due March 15, 1974, at 100%% and ac¬
crued interest. The group was awarded the debentures at competitive

Stuart & Co. Inc. heads an underwriting group
fering publicly today $35,000,000 New England Telephone &
Halsey

1921,

Floors have

established under

been

our

na¬

trends; I refer particularly to
unemployment insurance, social
ness

believe
actual

the

genuine demand and

need

for

truck

and

car

transportation is large enough, to
absorb the largest production in
the history of the industry, pro¬
vided

salesmen

"desire"

rekindle

can

the

to

buy.
Against this general background,
perhaps we can appraise the op¬
portunities the Prodigal Son finds
he returns to work.

as

The main

front

of

thing I

compensation, accumula¬

government

for

employment

on

highway

and

Whether

these

plywood

in providing
State and Federal
use

building
floors

concrete

or

projects.
mostly

are

is

the

not

should
for

sales

force

and

—

it

give all those responsible

sales

results

plenty to think

about.
There is

the

entire generation in
world
today who

an

business

have

never

never

been

"sold," and who
They entered
business since 1941. Their experi¬
ence has been entirely in a strong
"sold."

seller's market. How this

eration

will

react

new

gen¬

respond to

or

of

reversal

buying and selling
tactics, I don't pretend to know.
But, we do know that this unique
and unprecedented situation pre¬
a

sents a nice problem. The substan¬
tially reduced profit margin on a
per unit sales basis in a rough,

tough,

competitive market, may
timid, unresourceful and
less aggressive souls to fold their
cause

business front.
I have enjoyed talking to you
gentlement today about salesmen.
I

like

talk

to

them—it's-

sales

force

is

about

tonic

a

them

for

and to

me

be

to

The optimism and
a salesman may not
always be warranted by the facts,
but neither are the predictions of
among them.
enthusiasm of

the gloom

directly in

see

America's

the obligation and opportunity to

casts

the

don't

batting

whether

know

average

of the

sour-

is higher or lower
smiling salesmen.

brigade

puss

As far as fore¬

squad.
I

go.

push upward the living standards

than that of the

of the people of this country.

I

This
but

the

is

creative

a

salesmen

have

to create

ones

assignment,
always been

new

demand to

make

do know, however, that in this
jet propulsion age people need the
stimulating influence of hope. Just
as

fear is emotionally contagious,

is

the

optimism

hope

of

First—Salesmen's efforts are

of

so

Summary /

In

1909

60-watt

a

cost 9 hours'

work,

was

or

work,

or

it costs 5 minutes

Now

1/20

of

To summarize

light bulb
IV2 bushels
bushel

a

of

cost

hours'

155

25 bushels of wheat. It

a

tire that

9

hours'

25,000 miles costs

runs

work,

5% bushels of

or

wheat.
cost

4,650 hours'
work, or 750 bushels of wheat.
Today it costs 1,175 hours' work,
car

a

730 bushels of wheat.

or

In

Sebond

which

products

we

take

As

a

daily life have

appeared

scene

salesmen

the

on
saw

their

because

potential

mar¬

ket.

Times

changing.

do

to

all

can—and

we

buyer's

market
market.

that

is

a

that this
becomes a bal¬
Our
goal is
a

great deal—to

anced

see

healthy and constantly expanding

new

normal part of our

as

our

are
rapidly
In most lines the seller
has lost his advantage. The buyer
is back in control. It is up to us
—

economic

addition, thousands of

national
It is just as im¬
it is to make.

commercial life.

very

1909

briefly:

major importance in
portant to sell

tire

a

good for 3,500 miles. Today,

In

and

the salesman.

sible.

tion of funds by State and Federal

climate.

Third—We

are
geared to the
production achievements
economic history. Statistics

highest
in

our

that

show

possible if

a

balanced

we

do

our

is

market

part of the

job.

point.
Time will
answer
that
question.
We are assured, how¬
ever,

&

bid of 100.10.

1938.

of

tional economy designed to absorb
extra weight of downward busi¬

welfare

Halsey, Stuart & Co. Inc. and Associates Offer
New England Telephone & Telegraph Debs.

depression

America's

In any event, here again, is a
job for America's sales force to
maintain a stable, healthy retail

vehicles would have to be sold. I

obligations have always been considered as the needs are satisfied.
This sum is of wheat.
prime investments in the rail field. The experience of holders of greater than our entire national work, or
these obligations during the bankruptcy wave of the 1930s fully income in 1940.
wheat.
supported this investment regard.
Just because maturities in many
We face a very different set of
In 1909
instances how exceed depreciation charges is no reason for any
economic facts than existed
change in this attitude. Purchase
a
step toward greater operating
efficiency is to be retained there

ing and better selling is required,
however, to turn these needs into
higher living standards. And this
brings me to another point about

business tents.

sell because, in
opinion, at least 50% of these

Equipment

at the

more

my

lion.
ers

need

more

I stress this word

possible the savings of mass
times as much money for discre¬ production. Salesmen have helped
tionary spending as they had in to make progress like this pos¬
war,

people

goods than they
now
have, or need goods they
have never had before. And they
can afford to buy them. More sell¬

have

see."

whole national mobile

our

income in 1940.

customers today. Ad¬

a

the

industry is faced with current de¬
even higher wage costs
apparently has not altered their

of

goods—need

mands for

one-half times

and

two

The report also gives statistics for 39 individual roads which re¬
reckless, wild consumer spending,
ported payments in excess of $1 million due on equipment obligations we discover that
people are actu¬
during 1949. More than half (19) reported payments due this year
ally spending at a slower rate than
in excess of last year's depreciation accruals. Kansas City Southern,
before the war.
Bank deposits,
and its controlled companies, was at the top of the list. Its maturities
for example, when contrasted with
are more than double the 1948 equipment depreciation charges.
Two
spending figures are at a much
others, Clinchfield and Nickel Plate, have 1949 maturities almost
higher ratio.
double their 1949 equipment depreciation while Wheeling & Lake
Perhaps the most amazing fact
Erie's and Boston & Maine's run more than one and a half times
of all is the actual buying power
their reported depreciation.
of American

on

that

or

been

not

our

ment

sale

have

a

is

ings

construction

car

lowered

Productivity is higher than ever
before.

it

The fact

that wages and material costs for

Millions

Still Higher Living Standards

that these floors will at
bridge any temporary col¬

Too

of

many

to

seem

us

have

Finally—It is

once more our

ligation and opportunity

ob¬

to help

least
raise American standards of liv¬
accepted
the
status
quo
with
the are in metropolitan areas having
deposit a population of 100,000 or more, lapse in our economy. So, here respect to America's living stand¬ ing. That is not only the hope of
again, as I see it, both buyer and ard. I presume this is so because the American people; it is their
with The First National Bank of about 32% being in the metropoli¬
seller can face the immediate fu¬ it's so much
tan area of Boston.
higher than that of intention. They will be looking
Boston $35,000,000 (which may be
ture with renewed confidence.
any other country in the world. for leadership to the salesmen of
temporarily invested until June 1,
But such.an attitude completely America—not to the prophets of
1949, in whole or in part, in shortWith Carl F. Mead Co.
Automobile Business Prospects
ignores facts and possibilities like gloom.
term U. S. Government obliga¬
In the automobile business we these:
(Special to The Financial Chronicle)
tions) to be used for the redemp¬
MARIETTA, OHIO—Harry K. are taking a long look at such
There are 13 million American
tion on June 1, 1949, at their prin¬
Florida Securities Adds
Lown has joined the staff of Carl facts and a lot of others as well. families
without
cars.
Almost
cipal amount, of the company's
(Special to The Financial Chronicle)
The damned-up, urgent need for
F.
Mead
&
Co., Peoples Bank
three
million
American
homes
first mortgage 30-year 5% bonds,
ST.
PETERSBURG,
FLA. —
automotive transportation has don't have
radios. More than eight
series A, due June 1, 1952, out¬ Building.
Richard A. Rutter has been added
been largely satisfied. With it has
million
homes
with
electricity
standing in the amount of $35,to the staff of Florida Securities
gone the speculative market—the
600,000. The company will use the
Harris, Upham Co. Adds selling of new cars by new car don't have electric refrigerators, Co., Florida National Bank Buildto say nothing of the fact that
balance, if any, of such proceeds
(Special to The Financial Chronicle)
On

sale

receipt of proceeds from

the

will

company

buyers

for other capital purposes. ■ ;
The debentures will be

able

.at

103%%

to

prices
ranging
from
and including March

14, 1954, to 100%
March 15, 1969.

on

SAN

redeem¬

James
the

to

FRANCISCO,
B.

CALIF.—

Powell has been

staff

of

added

Harris, Upham &

and after Co., 232 Montgomery Street.

furnishes tele¬
Two With Invest. Programs
phone service in Maine, Massa¬
(Special to The Financial Chronicle)
chusetts, New Hampshire, Rhode
The

company

Island and Vermont.

On Dec. 31,

1948, the company had 2,132,405
telephones in service and a sub¬
sidiary had 5,904 in service. About
17% of the company's telephones




HARTFORD,
H.
are

Barth

and

CONN.
Herbert

—

S.

Everett
Larson

with Investment Programs, 50

State Street.

at

premium

automobile

business

prices.

The

is

about

four

showing
another sign of normalcy—season¬
al buying, a factor familiar to all

have

no

kind.

And

of

of

us

in normal business years.

Another

factor

behind

the

consumer

have

farm

our

homes
of

greatly in¬

no

in

the

running water.

modern bathrooms. And more than

worried

of American farms
a

are

still

tractor.

There is not

some

a

rural area, town

city in the United States where
living standards cannot be raised

people; at least they have been
sufficiently doubtful! about the

or

future to

today

postpone thehrnneW

car

by

intelligent

(Special

United

mar¬

without

•

'

••

'

With Coburn,

incomes, two-thirds

homes

States still have

50%

ing.

•.

any

hesitation

—the psychological factor I men¬
tioned a few minutes ago. Dips in

employment

all

with

even

creased farm

of

service

Four out of five still do not have

cent shift in the automobile

ket has been

re¬

million

electric

salesmen.

to

The

Middlebrook

Financial

HARTFORD, CONN.
A.

D.

LennOn

is

Chronicle)
—

Eleanor

with Coburn

&

Middlebrook, Inc., 37 Lewis Street.

With Kennedy-Peterson
(Special

to

The

Financial

Chronicle)

HARTFORD, CONN.—Keith F.
Kennedy is with Kennedy-Peter¬
son,

Inc., 75 Pearl Street.

42

(1322)

THE

COMMERCIAL

FINANCIAL''CHRONICLE

&

United States Economy Depends on Foreign Trade
(Continued from page 12)

It is noted that the "Economist"

loans ceased, trade contracted and
tne

economy deteriorated.

speaks of "prodigious efforts"
tne part of countries which
scneauled

Mistakes
It

of

the

1920s

aid.

is

regrettable that a large
portion of tne credits extended to

foreign

nations

during

the

'20s

not directed into constructive

was

and

revenue

The

producing channels.

recipients had not employed

the

borrowed

economy of

funds

their

create

to

which could

own

goods and services when fi¬

nancial

aid

from

Had

cease.

they

abroad

would

this,

done

prosperity of the lender,

the

is

that

the United States, would not
only

have

accompanied the

of

process

receive

on

quid pro

develop

habit of relying almost
upon outside aid, a habit

solely

they find difficult to abandon.
Cooperative

Administration—has

be

would

utterly

en¬

receiving

nothing

the

the

of

of
realm

which

were

nomic

chaos

tated.

politics.
the

on

Nations

of

verge

have

been

Governments

eco¬

which

have

sinister forces

without

and

been rendered

safe.

within,

have

And what is

United States, has not been un¬
duly large.
The National Indus¬

to

not

and

cope

a

Following the cessation of hos¬
of Worid War II, it was

tilities
found

that

the

physical destruc¬

tion resulting from the cataclysm

immeasurably

was

after

than

greater

particular interest, the cost of

all

this

quite

a

the

form

of

goods and services
became greatly restricted.
After 1918, the productive and
manufacturing capacity of Central
Europe, especially Germany, was
unimpaired.
In
the
Far
East,
Japan emerged as an important
of supply.

source

zloty

than

will

average

There

are

that this is

argue

sizable amount.

Analysis of what has been ac¬
complished
in
countries
which
have

been

aided, compared

to

France

from

dollar

the

eightieth.

one

to

dollar,

more

about

or

following

the

illuminating statistics:
In

France

the

trial

Output

stands

1937

as

Index

Indus¬

of

97, taking
Imports have risen

100.

at

40% compared with 1938, and ex¬
ports about 37%.
The official
of

rate

has

exchange

Cost

advanced
than 8V2 times, while the
of
Living Index has risen

more

than

more

Hourly earnings have advanced
less
than
7J/2
times,

taking

that

the

in

change

into

the

ac¬

rate

of

exchange, wages have remained
virtually stationary.
This is a
serious problem which faces any
French
Government, whether
headed by de Gaulle or
In Czechoslovakia,

Queuille.

which unfor¬

in countries
deprived of such assistance, is of

tunately was prevented from

interest:

under

In
of

Italy, for example, the Index

Industrial

Production

is

only

Since the United

of aid offered
find relatively

herself

ECA,

we

impressive progress than in
France:
Industrial output stands

more

at

slightly above the prewar figure.
States was
rather
generous
in According to statistics supplied by
supplying German and Japanese the United Nations, the latest
industry with 'working capital, index (at the beginning of Sep¬
American manufacturers were
tember, 1948), stood at 101, taking

1937 as 100.
Im¬
ports are about 2V2 times as large
as in 1938 and exports about twice

called

sponding

to

meet

keen

1937

competition which had additional

that

advantages in the form of cheap
labor, governmental subsidies and

Confederation of Italian Industry,
the General Index Number of In¬

low-cost

dustrial

upon

very

transportation.
In this
the trade which America had

way

being lost.
result

a

World

of

War

II,

Germany's capacity has been de¬
stroyed, probably for years to
come.

Japan

as

competitor has

a

been
eliminated, at least for the
time being, perhaps forever.
The
United States is virtually the only
place where the rest of the world

must come for aid in
rehabilitation efforts.
We

can,

nay

their
are

again ready and willing

once

to aid
tion

'20s,

made available

vate

and

credits

channels,

through pri¬

directly.
is furnished by the

Today,
govern¬

ment, which means that American
taxpayers are supplying aid indi¬
To what extent we shall
rectly.
succeed

torn

today in rebuilding

world
be

their

of

find

it

to

able

American

a

to

point

a war-

where

it

buy and pay for

goods and services out

own

economy,

necessary

discontinue

or

aiding

alone will tell.

once

we

expedient to

them,

time

In this connection,

it

may

be of interest to refer to

a

few

observations

in

a

recent

issue of the London "Economist":

"The

period

of European eco¬
nomic convalescence will have to
be extended
ern

it

is

General

Production at the end of

beyond 1952.

West¬

Europe's crisis is insoluble if

simply considered

higher,

exactly

are

corre¬

of

Index which stands at 317

against

almost
in

Cost

the

100 in 1937.

The

1947, and declined to
low of 67 in January, 1948.

"Economist"

London

also

in

terms

who

times the 1938 total,

War I,

this demands pro¬

efforts.

the
ery

about

from

19.4

the

to

10 year ago.

is

difficult

Over

the

Italy's gains in the realm of

en¬

American

attributable to Italy's
and

how

dollars.

It

much
would

illuminating to ascertain the
tent

the

of

would

have

improvement
taken

had to depend on

she

if

eco¬

It is also difficult to state

how njuch is
own
efforts

had

to

place

her

work

own

out

difficult,

more

impossible.

following

omy

lending

the

towards

of true

sign

to

tell

world

be

and

ways

.

seem

to

United

entail

her

own

country which is dependent
own resources may

tained by

regional recov¬

end

of

of
the

productively.

Our

grants

today

may be prevented from going into
constructive avenues, because of
the

steadily

what

mounting fear that
today may be

builds

one

destroyed tomorrow.
If

a

unable

are

method

devised

to

existing

tension,

the

of

war-torn

a

velopment

of prosperity in one
and chaos in another.
Eco¬

enticing

is

held

in certain quar¬

conclusion

the

of

re¬

gional pacts in the realm of poli¬
tics and finance will achieve the
millennium for all. This method

be ob¬

examining the economic

progress
registered
by
another
European country which has been
or unable to avail itself
of financial assistance offered un¬

before.

It has not

long as tension continues in
and so long as people

So

world

the

or

resolve

world

the

restoration
and

de¬

the

backward

of

a

areas

thought.
One
group
wants
high, rigid supports.
This group
is

making its principal appeal to
the producers of
cotton, tobacco,
peanuts and wheat.
They express
a
willingness to accept controls
if necessary in order to
get these

high prices.
The

endorses

group

a

flexible

support price
program
is generally opposed to gov¬
ernment controls.

I am willing to assume whatever
responsibility goes with identify¬
ing myself with the flexible sup¬

port school of thought.
I am un¬
alterably opposed to government

production

are

those who pretend to

to

for

her

for

be

who




South

war

in

was

far

more

extensive than

Italy.

ica's

The

volume

of

imports, taking

*

an era of lasting peace
prosperity, fully warby the vastness of Amer¬

*

are

situation

quarrel

no

with

those

100% government

a

their proposal would

in

esteem

and the energy

stability.

It

was

and

hold

of

most

Agriculture today, I would rather
trust

the

future to

judgment
of

the

and

of America than to

sire

combined

farm

effort

families

few

a

men

who

day yield to the de¬
power or personal'

some

for

the

cooperative

million

six

more

glory.

1

■

The Present

.

.

,,

require

us to

Level of Price

Support
We

confronted

are

stark

with

the

reality

that the level at
which support prices of agricul¬
tural

commodities

fixed

is

is

a

fundamental issue today not only
government.
be

can

a

but of

either

used

to

weaken

or

initiative and in¬

encourage farm

dividual

philosophy of

The level of price
powerful force which

resourcefulness.

,

From this fulcrum of price sup¬

port, the lever of control

Allotments, quotas, controls

erate

to

farm

can

op¬

people.

and

If

to

become

the

regular

////,

100 %

of parity price guar¬
by the government is the
objective, then those who want
this signed, sealed and delivered

guarantee

should

no

longer beat
the bush, but should come

around

right out in the
ernment

for

open

controlled

a

gov¬

agricultural

In no other way can a
100% guarantee of price to farm¬
ers be made to work.
economy.

I, for one, do not want to see a
controlled
agricultural
economy
in which our responsibilities and
our

destiny

ment.

to

I

the

want

particularly
the

farmers

as

Federal
our

our

are

sur¬

Govern¬

people—and

farmers—to have

fullest

farms,

opportunity to exer¬
initiative, manage their

and
themselves.

think

-

That

is

opposed

the

to

and

reason

plan
that

I

It

for

work

is

efforts
the
on

fixed, rigid

a

am

laid out for him and his

directed

are

by agents of
Government, except
emergency basis.
presume
that equality
of

has

To

income

can

achieved by
economy

satisfactorily

Federally controlled

a

is

be

to

presume

that

all

men

holding positions in govern¬
ment are capable, fair and honest.
Unfortunately, men in government
are

subject

nesses

The

as

to

men

power

the

same

out of government.

to

direct

American

agriculture also carries the
to

weak¬

power

dominate, and, in spite of the

been

belief, and it
level for

my

commodities

below

should be just
fair market price, thereby

a

providing

incentives

velopment of

kets,

and

the

the

for

and

uses

new

for

de¬

mar¬

conversion

production which

crop

will

of

pre¬

the accumulation of burden¬

vent

surpluses

some

undesirable

or

shortages. That is the
insisted upon giving to

reason

I

the Sec¬
retary of Agriculture a flexible
range within
which he can fix
support levels.
One

of

major provisions of

the Agricultural Act of

is

1948

a

parity formula. This formula

new

is

intended

in

the price

to

correct inequities
relationship between

agricultural commodities.
The

original

come

formula

has

be¬

badly outmoded that it
is used for only about 40 out of
150

so

commodities

farm

instance,
that,

today.

wheat

there

is

growers
nice profit

a

in producing
wheat at 90% of
parity, while dairymen know that

90%

computed

as

formula

tion

of

under

the

old

scarcely

break-even

Federal
an

the destiny of our

sway

still is, that the support
farm

anteed

realized

unfortunately it does not
be fully realized today,

I

which

penalties should be exercised
only as a last resort and not be

pay.

to

to

and

the officials of the Department of

Above all else, I cannot believe
it wise nor democratic to
put the
farmer in the position where his

seem

■

our

ourselves

industry of the American people/

today does not
differ radically from that in the
'20s.
Because of our ability and

actually

friends.

as

as

it will be possible to

resources

know

rency

well

neighbors

tee of price for agricultural com¬
modities in peacetime.

then,

as

and genuine

ranted

our

ness

benefit

own

for

For

willingness to lend, we created ?
According period of almost unparalleled bus¬
statistics, the iness activity and prosperity. Be¬
Industrial
Production cause of 'our ability and willhig-

stood at 159 against 48 in 1945 and
100 in 1938.
One may perhaps

*

that of the rest of the world.

In this way,

guaran¬

available

of

have

guaranteed price for farmers, but
personally I do not want to obtain
such income at the
price which

indefinitely, goods and

services

ECA—POLAND.
latest

I

who advocate

cise their

The

•

covery in which the United States
can and will play a glorious
part

and

prosperity in certain areas, unless
we feel that we possess the means
and
the
willingness to continue

or

world

to

In this way alone will
possible to effect world re-

might

other

rendered

supply

1

charged with

are

(Continued from page 16)
of

in the grip of
fear over
a
new
catastrophe, it
will be difficult, if not impossible,
to establish a sound and lasting
everywhere

to

find

Dangers in Farm
Support Program

permit

It

to

provide solutions,
they should be replaced by men

create

could be found,

way

not

that

but

of HOW to solve

guiding the destinies of the

it be

used

were

order.

ters

not

problems'

who -can.

permitted

tice.

that

solved,

means

those who

If

our econ¬

cessation

the

loans in the '20s

our

world

.

capturing

States'

markets."

.

statesmanship is

the

NOT

can

them.

The serious setback in

the

Italy

(Italy will do it by herself).
An idea as to what can happen
a

a

The way in which
is situated today does

give aid today, we are cre¬
upon which increased productivity
ating a high volume of business
depends are most unlikely all to speculate on how much higher
today.
come to fruition
(because of) re¬ industrial output would have been
One of the factors which played
stricted supplies of capital.
in Poland if the country had re¬ a
very prominent role in world
"(It is a) question whether the ceived financial assistance, as was
recovery
after the First World
nations can achieve the scale of the case in
Italy. The recovery in War was the successful effort to
exports they have proposed.
For Poland is especially significant, stabilize world currencies and de¬
because the damage caused by the
instance, to reach the target
vise means of maintaining cur¬

American

rency' stabilization
if not

scheme.

succeeded.
It is being tried again.
Judging by precedents, it is feared
that it might not work this time.

leaders of the past—Cesare Balbo
who insisted: L'ltalia fara da se

on

adoption of

be
ex¬

salvation, without appreciable aid
from the outside world, as was
advocated by one of Italy's great

in

which face the world is not

lems

has been tried

efforts,

her

of economic prob¬

to

which
if

World

in theory, does not work in prac¬

thusiasm in certain quarters over
nomics.

after

nomic isolation, however

Italy

share

to

area

The solution

area

Skepticism

this

in

cannot dismiss this warn¬
ing lightly.

declined

dollar in 1938 to 575 to the dollar,
or about one-thirtieth o'f its value

Index

"The schemes of mechanization

trade

while exports
were estimated at only IV2 times.
The cost of living is almost 50
times the 1937 figure, while the
official value of the currency has

to

even

Those

recall what happened to. our

The value of Italian imports for
1948 was estimated at about 2*4

der

the

Johnson and Engle bills,
determined to render cur¬

markets in Latin America.

It reached 82 in

base.

a

lion.

would

Carran,
appear

is, the tension cannot be re¬
Intelligent opinion must
repudiate
such
defeatism.
The'
solved.

support is

as

unwilling

half

our

the

assur¬

diplomats

tnat

entail the loss of half of America's

1938

"The (trade) deficit is likely to
be nearer $3 billion than $1 bil¬

digious

times

earnings

to the
Living

q

of

from

and

have
been telling us: It cannot be
done;

September,

of Western Europe.

And

Hourly

three

increase

certain

evident

situation,
legislators, as
proposed Mc-

currency

.

Statesmen

of economics

It

loans

were

aid

the

August, 1948, stood at 71, taking

today as we were a genera¬
Only the method has

the

to

large.

about

the

with

confidence.

controls,
except
in
warns of the
possibility that a emergencies, for reasons which I
restored
Western Europe might will soon make clear.

slightly changed.

will

according

ago.

In

It is worth noting

base.

but

undertaken

a

built up during the war, notably
in Latin
America, was gradually
As

a

as

to

regard

taking

110,

as

well-being cannot
be
promoted
successfuUy.
Not
only do we seem indifferent in

be
and

16 times.

somewhat

availing

economic

and

could
ance

1920-1930 decade, was, to a large
degree, due to the fact that not all
Czechoslovakia

find

we

stability in the
l&ading exchanges, trade

of

,

and

slovakia,

without

world's

about

Comparing France ahd Czecho¬

with

what has taken place

the

of

to

the

to

400

suggesting

an

extent

declined

has

count

addition, the sources from which
needy nations could obtain aid in

War.

market

ican public about $31 a
person, or

who

World

relative

roughly,

$113
for
American
family."

The

living costs.
Compared with 1937, the Cost of
Living Index has advanced 130
times while exchange in the free

trial Conference Board finds that

some

First

benefactor—the

"the program is costing the Amer¬

In

the

-the

to

1945.

statistics

resusci¬

which

had

in

hardship facing the nation will be¬
come apparent from the published

to
say
achievements in

of

we

17

aid,

deavor to determine where to lay
the blame.
It is a condition with

theory.

volume

done wonders for the
economy of

countries

100, stands at 141 and the
of exports at 84, against

as

5Vs

Admittedly, ECA—the European

been threatened by

It

gen¬

a

from

stopped.
futile to

very

without demanding a
quo is that the recipients

after

lending

American

a

scale

lending, but would have continued
the

on
are

The unforunate consequence

extending aid

erous

an

of itself continue to absorb Amer¬

ican

of

to

1938

that

Thursday, March 24, 1949

represents the
point in the produc¬

dairy products.

By using
reflects

a

formula which

new

conditions

which

have

prevailed
years,

during the latest ten
each commodity is put more

nearly in the
to all

others.

The

tural

proper
•

relationship
-

.

parity value of all agricul¬
commodities

mains

the

formula

as

it

combined

under

same

was

under

the
the

re¬
new

old

formula which will go out of use
/in

Ton

1

1 flP;n

T+

Volume

lationship
that

commodities

between

As

result

a

using this mod¬

of

which, was

formula

en¬

dorsed by

the major farm organi¬
zations and the U, S. Department

will be a
drop in the parity price of "grain
anct
an
increase
in the parity
prices of dairy
products,? meat
of

there

Agriculture,

products, wool, poultry products,
flax, soybeans and others.
*

The

•

result

end

in

the

to

encourage

this

of

change

formula should be
the marketing of a

parity

in

greater part of our grain crop
the form of animal products.,

.

The effect of this will be to

t

.

*„

.the

,

American

a

that the entire farm support price

over

will collapse within a
few years. I do not anticipate that
their views will prevail, however.

or

authorized to
support the' price from nothing up
to 90%.
V

turbed

the

After

all, why should we put
emphasis on supporting the

all

prices of a few basic crops when
several non-basic commodities are
important in terms of

even

more

and national

income.

'

o'f

floor

the

Senate

potatoes
shall be supported
from 60% to 90% of parity.

provides

amendment

to

encourage

a

Another

wool shall be supported at a

greater, production of soil building tion of 360 million pounds of shorn
commodities and to provide a far wool annually.
This will doubt¬
Wider
market
for grain
than less mean 90% support for a few
would be the

if it

case

were mar-

at least.

years

'

keted in the form of cereal rather
than

.

-

animal

.The

-

r.

than

rather

States

Let

to

ex-

foreign

to

outlet for his

an

as

sur-

plus production.

The framers of the Agricultural
of

Act

believed

1948

that

in¬

an

creased animal

industry in Amer¬
ica would definitely improve not

*

our entire national and agricultural economy but would ex-

-

}

.

...

*

based on the total sup¬

mums .are

ply of the commodity according to
,•,

a

formula incorporated in the Act.

Theoretically, supports might have

,

60 to 90%

a

.

could

Actually, this

range.

not happen.

Although the Act puts full em¬

phasis

the avoidance of con¬

on

it

trols

does

require

that

quotas

'

whenever the

must be voted upon

total

supply of

reaches

normal

a

basic commodity

supply*. In the case of
is 120%.
Whenever

this

wheat
v

a

certain percentage above

a

in effect

quotas are

added

is

mium

20%

a

*

If the producers
for

pre¬
support

the

to

price.

*

when

quotas

'

,

,

of wheat vote
the
supply
min¬

reaches 120% of normal, the
imum

V

The

78%.

-

*

.

then
level
and

the national security
needs make a higher level necesunless

90%
:

be

must

between

somewhere
'

would

support
78%

Secretary

actual

the

fix

level

support

to get production.
In no case could the minimum

sary

support price of a basic commod¬

ity drop below 72% when quotas
are in effect.

different from the
60% figure which has been so
freely reported
as the
support
level which would prevail. To assume
even
a
72% support is to
assume that the Secretary would
This is quite

-

;
.

:

the

the worst pos¬

farmer

sible deal under the Act.

maintain

farm

In

income.

incomes.
As acreage

of

producing

a

regardless of the acreage planted.
The U. S. Department of Agri¬
culture has worked out some very

significant cost and income fig¬
ures
showing that on a farm of
605 acres, of which 276 is nor¬
mally planted to wheat, that when
acreage is cut 25 %, the operating
costs of the farm are reduced
only 10%.
These Department figures show
that

a

planting of wheat

normal

selling for $1.55 per bushel, will
return a greater farm net income
than if the acreage planted is re¬
duced 25% and the crop sold at
$2 per bushel.
This
year's

with
high, rigid price supports is going
to be

experience

costly.

There

heavy overplantings

are

this year of certain commodities

purely

parity

because of the 90% of
guarantee for such com¬

modities.

Secretary

prediction

that

good
citap year, the total borrowing
authority
of
the
Commodity
Credit Corporation, which is fixed
by Congress at $4% billion, will
be pretty well exhausted by Jan.
1, 1950 or at least by next Spring.
should

1949

situation

This

to

prove

not

will

be

a

make the

farm

support programs more pop¬

ular

with

payers, or

either

tax¬

United

of the people in

States

live

on

farms

port level of 90%, if in his opin¬
circumstances
warrant
it,

I

have

today.

occupations.
There is

already increasing un¬

employment.

great

I

of

this

conceive

support level for the 150 non-basic
commodities, but it was made
On

the

floor

What

we

Dissatisfaction

The support levels provided for

against precipitous declines in
prices.

ers

Barring major calamities, such
as
drouth, the act will serve to
the

in debt for it

go

as

already

done to some
Government is an agency

extent.

by the wise founders of our
we as individuals or

as

can

welfare

for

use

and

the

mutual

protection of

of

the

Senate

of Agriculture




faction in the cities.
The

public

will

stand

for

a

hold

who

men

positions

in

it.

Therefore, let us think long and
wisely before turning our personal
destinies

are

down and out.

keep

to

not let it
weakened by f false

or

and

good

are

in

and

men

poor

There

government.

are

prevailed during the depression of men who make rash promises to
the Thirties.
This, of course, is get into government and thus put
quite different from guaranteeing themselves in a position to exer¬
him

what

considers

he

to

be

a

I

satisfactory

price

and

cise

There are men who
advocating a largess for

are

comments

many
we

ought to have

law which provides for forward-

pricing

commodities

farm

of

that farmers

can

so

plan ahead.

The fact is, the Agricultural Act
of 1948 does permit forward-pric¬

agriculture under govern¬
guardianship cannot be a
strong agriculture. A nation whose
people are not free cannot be a
happy nation.
I

I

may

planting
which

the

minimum

commodities

level

will

be

at

sup¬

ported. v

the

plight of

they

who,

too much for food

say,

for

support

of

and other liv¬

ing costs.

We

must

these

I

protestations

of

low

and

people

It would

seem

unreasonable

to

thousands of widely scattered, un¬

organized producers of

perish¬

a

semi-perishable commod¬
: : V;

ity.

of

concern—

prices

costs

for

get high prices

they produce unless city

for what they
buy. Unless farmers receive good
prices for what they sell, city
people will find themselves with¬
out

market

a

under

con¬

arose

as

to

This

prompted

committee

the

which sponsored the bill to write

into it

provision that the Secre¬

a

tary could support prices through
loans, purchases or payments.
The
provision for supporting
prices~Through payments is new.
It

means

that if producers

comply with
quest

for

fail to

the Secretary's re¬

reduced

production

or

We

for the

industrial

that

those

who

offer high

support program must be
accompanied by strict controls.
start to apply

controls
and penalties in the grain belt,
for example, there will be no end.
The acreage taken out of prowe

duction will also have to be
or

it

other
create

will

be

which

crops

con¬

used to

pro¬

in

turn

production

excess

of

other commodities.

market

sults.

and

reimburse those who

the

for

difference

the

price

average

re¬

ceived in the market and the sup¬

port price.
Those

who

fail

to

cooperate

would receive

only the open mar¬
ket price for what they produce.
Cooperation in a support program
is
to

We

a

to cooperate or not, but

he

cannot

be

if he does

assured

of

the

this

that

expect

such

a

V

The

question is whether, for the
illusionary increased in¬
comes for a short time, American
farmers are willing to surrender
of

fathers

endured

hardships

might know

we

—

that

the meaning

of

do

not

mean

to

imply that
remain aloof

Eastern Gas ft Fuel Bds.

Placed

efficient,

demo¬

potatoes.
is, potatoes have been
priced off the table in so many
instances
that
we
are
actually
As

it

a

government

that

welfare of the needy

_

Government

maintains the nation's security.
has

in

The 30-odd million persons

collateral trust

first mortgage and
1974

series due March 1,
102.459% and accrued in¬

3%%

at

won award of
competitive sale on
bid of 101.239,

The

bonds

Of

the

to

Eastern

proceeds,

1-"*+

applied to payment of
payable to banks and

notes

balance

working capital. The
proceeds, amount¬

to

balance of
ing

to

short-

outstanding

presently

term

approxi¬

$5,300,000 will be added
working capital funds of
Gas and Fuel Associates,

and will be

its

group

at

tlm

mately

net

approximately $6 700,000,
deposited initially with

will

be

the

Indenture

Trustee,

be

to

withdrawn from time to time pur¬

the

to

suant

thereof

provisions

certification to the trustee :;a
additional property.
It is an¬

upon

of

ticipated that, based on the Asso¬
ciation's present construction pro¬

substantial amount of this

gram, a

deposit will be withdrawn during
1949

remainder

the

and

during

1950.

The
at

will

bonds

105.46%

be

prices

general

100%

to

ranging

redeemable

scaled
and

from

at

from
special

102.46%

to

100%.

zation
an

headed

group

Halsey, Stuart & Co. Inc. is
offering publicly today $12,000,000
Eastern Gas and Fuel Associates
by

people.

the law

Market

on

underwriting

An

der,

need

responsibility through

that

government should
indifferent to the needs of the
We

of

"

responsibility
city people

confidence that we will

have

or

cratically run government in this
the Sec¬ day of big business and a world
retary could have directed all or made small by modern methods
part of the huge potato crop to of communication and travel.
We
be put upon the market so that
need
a
government that
the consumer could have received lays down the rules of the game
the benefit of lower prices and and enforces fair play; we need

provision

economic

"vv

.

the

this is

do

prices

freedom.
I

alive, and

our

far-sighted, united action.

those rights for which their fore¬

support price.
Had

may

would go on and on until
fully controlled agriculture re¬

sake

not

compulsory. It will be up
each producer to decide whether

\.,"v

To

a

duce

keep

of all of us—farm and

the

will

our¬

system of free enterprise in bal¬
without jeopardizing our lib¬

ises of

trolled

to

world that the

the

ance

process

cooperate

to

can

we

terest.

marketing, he may direct
all or part of the commodity con¬
cerned to be put upon the open

between

and

Very few of us in this world
get something for nothing. Let us
now by the prom¬

not be deluded

Once

world

the

to

demonstrate

must

selves

bonds.

reduced

do

shown

freedom-loving nation can

a

goods which they produce.

price

was

question

go

that Amer¬

be masters of their own

accomplish.

well

pay

goals.

bill

the

a way

for
con¬

how the Secretary could bring
about compliance with production

the

When

country

our

see

have

We

what

I

by

in¬
ducements to farmers to part with
the most precious of all assets,
their independence.
I reiterate—a rigid 90 to 100%

sideration

to

can

meet

deceived

high

Farmers cannot

for what

able or

be

not

farmers

basic

expect the Secretary to deal with

want

destiny.

Consumer

vs.

protestations

of

keting goals or even conformity
to marketing agreements.

farm people and

see

alike.

Farmer

non-

commodities, the Secretary
Agriculture may require com¬
pliance with production and mar¬

want to

city people remain free—free from
economic and political domination.

pays

sumers.

return

In

sound and

erty.

for the

weep

and

agriculture

see

also

culture has

so interpreted it.
Secretary of Agriculture
announce
in
advance
of

to

basis.

secure

ing and the Department of Agri¬
The

want

the nation prosper on a

torch of freedom is still

consumer,

pa¬

An

beyond our power to
permanently sustain and, while
they promise farmers high prices
and high incomes, some of them

farmers far

heard

have

Our

paternal¬

on

mental

power.

today

nur¬

gains.

not built

was

prom¬

ism; and it cannot endure on

icans

There
men

illusionary

by

nation

short-sighted

or

forward in such

them.

to

over

who
many in¬
It is not
the small percentage of industrial¬ stances bought number one pota¬ live on the farms of America con¬
ists
that always seem to make toes for use as cattle feed, while stitute the very backbone of our
good profits that we have to think the low grades have been put upon democracy and of our free enter¬
about—it is the great bulk of our the open market for human con¬ prise system.
They are rooted in the tradi¬
population that will rebel.
sumption. The costly debacle of
Should the advocates of 100% the potato program brought on tions of self-reliance, honest work,
people

is

now

spirit,

broken

prophets

all.

us

Government is no better than the

losing his

from

farmer

undergoing losses such

better

guarantees to farmers
will result in increasing dissatis¬

be

that

forefathers.

our

challenge

ternalism.

nation which

in this act guarantee the produc¬

or

else

or

groups

keep

ex¬

first

have

set up

Shirt

shirt

be

get from government,
put into govern¬

we

must

We

ment

Keep Farmer From Losing His

resources to

pended for our benefit.

by this bill to prevent agriculture

leading the way to another
depression.

govern¬

institution possess¬

an

ing unlimited

—

tion.

wisely,

The law does not fix a minimum

that the Secretary

ment is not

this

guarantees for farmers when other

Act
any

.;tary using this Act to give farm¬
ers the lowest permissible income.

clear

Secretary of Agriculture
in him

remember

us

nor

discretionary

that he will use the
powers

of

government

future Secre-

Mr. Brannon. I feel

Agriculture,

would

I further predict

which

fairly high level of farm supports
but it will not tolerate cost-plus

deal of confi¬
Secretary of

dence in our present

can

Consumer

The
alive

,

been in effect this year,

Too high

a

'

■

protects the
and afflicted;
we
need a government that sees
to it that our natural resources are
consuming a smaller quantity than developed and used wisely in the
we
did in prewar days, in spite interest of the people, and a gov¬
that
safeguards
of the large increase in popula¬ ernment
and

established

criteria

by

the Act.

in

•'

:

gressive spirit of

farm

determining the amount

assistance

from

not

the Congress.

Less than 20%

the

consumers,

ion

guided

them.

tne power vested

use

*:

the

make

I

Over 80% are employed in other

v

at all times has
full authority to maintain a sup¬
The

will

which

pressures

ovennrow

a

1

give

spite

do

is reduced, the cost
bushel of wheat or
pand the grain market faster than
corn
or other grains increases in
any other means except, of course,
proportion to the acreage taken
the delivery of our surplus to for¬
out of production.
eign countries at our own expense.
In this age of mechanized farm¬
I now wish to discuss the reing, with its high investment in
ports that the new law will reduce
tractors, harvesters, combines,
price, supports to 60% of parity. storage bins and other equipment
and facilities, a large part of the
The Agricultural Act of 1948
cost of production is represented
The
Agricultural Act of 1948
by fixed costs such as interest,
provides minimum levels at which taxes, repairs, depreciation, etc.
the six basic crops—corn, wheat,
These costs remain about the same
cotton, peanuts, rice and tobacco—
must be supported.
These mini-

,

group

largely undis¬
of political and

to the effect that

.

*

in

that the

theory is untenable.

even

In

;

.

..

important

tured

remain

perfectly

fact, the result of quotas and con¬
trols will more likely be reduced

crops.

all

let

will

income.

High support
involving reduced acreage
not
necessarily increase or

for

They

processes.

inheritors of the pioneer, pro¬

1948

trols

price supports and con¬
means high
incomes.
This

flat guarantee of 90%

a

43

ises, born of expediency and

that high

only
«

us

by

more

democratic

and
are

should give to any class or group,

levels

*

,

Mean

the

when

come

panding his market in the United
countries

,

has

time

producer must look

grain

Does Not
High Farmer Income
look now at the theory

Support

Price

High

products.

be

anticipate that the major pro¬
visions of the Agricultural Act of

at

level that will induce the produc¬

farm,

I

provides that

that

the

program

amendment adopted on the

An

the

to

is

Secretary

off

'

would

(1323)

a 90% price guarantee
multiplied many times

purely by

closely.to the
Steagall
commodities
such as dairy products, poultry,
hogs, beef and soybeans, at appioximately the same level as the
basic commodities are supported.
For other more perishable crops
correspond

so-called

farmer, to provide
greater employment both on and

•

FINANCIAL- CHRONICLE

non-basic

those

farm

on

consumer

&

support the price support for farm commodities pre¬
commodities vail with their views, I predict

to

expected

which

place

higher dietary level, to return a
larger share of the consumer's
dollar

is
of

changes.

ernized

COMMERCIAL

THE

Number 4788

169

The Association coordinates un¬

sion

the

primarily

of

other

an

organi¬

for the

conver¬

management

one

into

coal

coke,

and

gas

in
production, transportation and

sale

It is

products.

of bituminous

engaged

coal, the

con¬

version of coal into coke, gas
other

products,

operation
dise
the

of

stores,

a

carrying

operations.
tive

office

and

the distribution
products, the

such

of

sale

and

general merchan¬
blast furnace, and
of other allied

on

Its
is

principal

execu¬

in

Boston,

located

Mass.

With Barclay Investment
(Special

to

The

CHICAGO,

Financial

ILL.

—

Chronicle)

James

E.

Spelman
has
become affiliated
Barclay Investment Co., 39
South La Salle Street.
He was

with

previously with Herrick, Waddell
Inc.

& Reed,

p.,

fwwnr *•»*«»». H v

44

THE

(1324)

COMMERCIAL

Securities
•

•

American

March 14

ferred and

120

face value.

No

•

Akron, Ohio

Inc.,

cumulative pre¬
shares ($100 par) common. Price, par or
underwriter. To purchase.merchandise.

200 shares

notes,

sory

Hostess,

(letter of notification) $125,000 of 6% promis¬

American

Oil

6%

($100 par)

Exporters,

Oklahoma City,

Inc.,

17

filed

shares of common stock (lc
par). Underwriter—Tellier & Co., New York. Offering
—Stock will be offered at $1 per share. Stock purchas¬
ers
will receive a fully paid up life insurance policy
equal to the amount they pay for stock. The purchases
must amount to not less than $250 nor more than $2,000.
Proceeds—To purchase life insurance policies and for
working capital to provide funds for oil exploration and
development.
5,000,000

,

<

.

1974.

18

competitive
& Co. Inc.;

to

determined

be

through

bidding. Probable Bidders:-Halsey, Stuart
White, Weld & Co.; The First Boston Corp.;

Lehman Brothers and Stone & Webster Securities Corp.

(jointly);
burse

Equitable

treasury

Securities
funds

;"V

tions, etc.
•

for

expended

vy

.

Proceeds—Reim¬
in property addi¬

Corp.
:■

•

Hoffman & Co. Inc., Providence, R. I.
March 16 (letter of notification) 14,367 shares ($10 par)
common.
Price, $20 per share. Underwriter—Cohu &
Co., New York. To make capital improvements and to
provide additional working capital,
y
Associated

stock

10

Telephone Co., Ltd. (4/6)
100,000 shares of cumulative preferred

filed

($20

par)

5%

1947

series.

Underwriters—Paine,

Webber, Jackson & Curtis, Stone & Webster Securities
lCorp. and Mitchum, Tully & Co. Proceeds—For con¬
struction and to
•

Bardwell

reimburse

&

treasury for past outlays,

y :

one

16

<and

(letter of

share

amount

of

of

John

B.

stock

common

notes.

for

each

$1.50

Underwriters—William

Dunbar

&

Co.

To

repay

a

R.

principal
Staats

loan

Co.

and for

working capital.
Be3l

March 11

Telephone Co. of Pennsylvania (4/12)
filed $25,000,000 25-year
debentures, due April

15, 1974. Underwriters—Names to be determined through
competitive bidding. Probable bidders: Morgan Stanley
& Co.; Halsey, Stuart
& Co. Inc.; The First Boston
Corp.; White, Weld & Co. and Union Securities Corp.

(jointly).

Proceeds—To

be

of advances from American

applied

toward

repayment

Telephone & Telegraph Co.

(parent). Expected April 12.

|

;•

about

Bennett-Ireland,

Inc., Norwich, N. Y. (3/30)
notification) $100,000 15-year sinking
bonds. Price, par.
Underwriter—
Mohawk Valley Investing
Co., Inc., Utica, N. Y. Reduce

May 1.

Oklahoma Oil Corp. (3/31)
(letter of notification) 299,500 shares (10c par)
common.
Price—$1 per share. Underwriter—Henry P.
Rosenfeld Co., New York.
For expenses and working
capital.
•

Central

March 21
of

bank loans, general corporate
purposes.
©

Big Valley Cold Dredging Co., Inc.,
Bremerton, Wash.
March 8 (letter of
notification) 60,000 shares of common
stock (par $1).
Price—$1 per share.
No underwriter.
For drilling and testing program.
•
"
March

14

common.

(letter

Foods, Inc., Thorp, Wis.
of notification) 500 shares

Price,

market.

($1

Underwriter—Green

par)
&
Co.,

as dealer, will receive commission for sales.
ceeds to selling stockholder.
'.-'
~

Broad

March

17

Street

Sales Corp.
©

Pro¬

Investing Corp.,

investment.

Underwriter—Broad

Street

Price, market.

Ckace

Vernon, Calif.
24,000 shares ($4 par) common stock.
Underwriter—William R. Staats Co. Proceeds—To sell¬
15

filed

ing stockholders.
•

Co., Oakland, Calif.
(letter of notification) 15,000 shares ($5 par)
class A capital stock.
Price—$10 per share.
No under¬
writer.
To raise additional capital and
surplus.
18

California-Pacific Utilities

(3/30)
50,000 shares of 5Y2% cumulative con¬
vertible ($20 par) preferred stock.
Underwriters—First

'March

11

California

filed

Co.

heads

a

group of

12

underwriting firms.

Proceeds—To pay off short-term bank indebtedness and
•for the

company's expansion program.

Expected Mar. 30.

Power Company

competitive bidding. Probable bidders include Blyth £c
Co., Inc.; The First Boston Corp.; W. E. Hutton & Co.
Co., Inc.; The First Boston Corp.; W. E. Hutton & C0.5
Merrill Lynch, Pierce, Fenner & Beane.
Proceeds—To
pay off about $10,000,000 of short-term bank loans. Ex¬
pected about March 29.
jj
Kansas-Nebr. Natural Gas Co., Inc.

(4/1)
(letter of notification) 2,900 shares of $5 cumu¬
(no par) preferred stock. Price—$102 per share.

March 3
lative

Underwriters—Cruttenden & Co. and The First Trust Co.
of

Lincoln, Neb. To discharge indebtedness and
property improvements. Expected April 1.
•

Co., 910 West St., Wilmington, Del. To be offered
one share of each.
Building of factory, install¬
ing machinery, working capital.
Fuel & Iron Corp. (3/29)
$11,000,000 first mortgage and collateral
trust 15-year sinking fund 4% bonds, due 1964. Under¬
writer—Allen & Co., New York.
Proceeds—To prepay
$7,250,000 of bank loans, to pay $1,600,000 due the War
March

2

Assets

filed

Administration

other corporate

and

finance

to

construction

of

purposes.

Commonwealth
March

16

Edison Co., Chicago, III.
$50,000,000 sinking fnd debentures,

filed

each

four shares

notes

Proceeds—For working capital, construction costs.

Expected
•

in April."

Commonwealth

March

18

filed

Proceeds—For

investment.

($1

San Francisco
common stock.

par)

Underwriter—North

Amer¬

Price, market.

Continental Engineering Co.

(4/1)
notification) 500,000 shares of common
Price par.
Underwriter—William C.
Hitchman Co., New York. For equipment and expenses.

Jan. 28 (letter of
stock (par 50c).

Light Co. (3/28)
Feb. 24 filed $10,000,000 first mortgage bonds, due 1979.
Underwriters—To be determined through competitive
bidding. Probable bidders: Halsey, Stuart & Co. Inc.,
Kidder, Peabody & Co., Blyth & Co., Inc. and Merrill
Lynch, Pierce, Fenner & Beane (jointly); The First Bos¬
ton Corp; Equitable Securities
Corp.; Harriman Ripley
& Co.; Union Securities Corp.; Lehman
Brothers; Salo¬
Bros.

&

off

Hutzler.

Proceeds—For

short-term

borrowings

construction

obtained

E.

Mack's

Block

Magnavox Co., Fort Wayne, Ind.
Feb. 7 (letter of notification) 3,500 shares
($1 par)
mon

stock.

and

from

•

Price at market.

Garden

(William T.)f Inc., Boston, Mass.
March 17 (letter of notification) 4,100 shares of common.

Price—$10
and

share.

per

for

No underwriter.

additional

To repay

<

bank

working capital.

Elfun Trusts, New York City
March 23 filed 100,000 units of trustees' certificates.

Fidelity
17

Proceeds

Fund,

filed

—

Inc.,

350,000

For

Boston, Mass. .
($5 par) capital

shares

investment.

Davis & Co, and the

Underwriters

Crosley Corp.

—

stock.
H.

Paul

Market

Basket, Los Angeles, Calif.
(letter of notification) 18,000 shares of pre¬
ferred, Series C ($15 par). Price, $16.50 per share plus
accrued dividends from April 1, 1949.
Underwriters—
Bateman, Eichler & Co., First California Co., William R.
Staats Co. and Lester
Co.
For additional working
capital.
# u'i
March

•

16

Matchless

Mining Corp., Wilmington, Del.
(letter of notification) 25,000 shares of com¬
Price, $1 per share. No underwriter. To

15

stock.

mon

purchase

additional

Refining Co., Denver, Colo.
$600,000 5% first mortgage bonds, series
of 1949, $150,000 of 5^2%
debentures, due March 1, 1954,
and 5,000 shares of 7% cumulative
preferred stock ($100
par).

filed

Underwriters—Peters, Writer & Christensen, Inc.,
Sidlo, Simons, Roberts & Co., Denver, Colo. Pro¬

ceeds—To

be

added

to

general funds to

bank loans and for other purposes

retire

current

including the

expan¬

funds

for
,j

©

Midwestern

Insurance

Co., Oklahoma City,

Oklahoma
March

16

(letter of notification) 5,000 shares of common
Price, $25 per share. No underwriter, To increase
•capital.
g
stock.

„

,

Mississippi Power Co., Gulfport, Miss. (4/11);
11 filed $2,000,000 30-year first
mortgage bonds.

March

to be determined through com¬
petitive bidding. Probable bidders: Halsey, Stuart & Co.
Inc.; Kidder, Peabody & Co.; Equitable Securities Corp.;
Otis & Co.; Shields &
Co.; The First Boston Corp.;
Carl M. Loeb, Rhoades & Co. and E. H. Rollins & Sons,
Inc.
(jointly).
Proceeds—For construction.
Expected
April 11.
:

Montgomery Chiropractic Hospital, Inc.,
Norristown, Pa. (3/28)
(letter of notification) 90,000 shares of common
stock (par $1), of which 70,000 will be offered in behalf
Jan. 31

of the company and 20,000 shares on behalf of others.
Price—$2.50 per share. Underwriter—Buckley Securi¬
ties
Corp., Philadelphia.
Improvements,
equipment,
working capital. Expected March 28.
•

March

General

March

Telephone Corp., New York
filed
$10,000,000 of debentures,

17

due

1964.

Mountain States Power Co., Albany, Ore.
18 filed 50,770 shares (no par) common.
Under¬

writer—Merrill

Underwriters—Paine, Webber, Jackson & Curtis, Stone
& Webster Securities Corp. and
Mitchum, Tully & Co.

ceeds—The

Proceeds

will

—

in

ments

To

make

subsidiaries

additional
and

common

invest¬

stock

temporary advances to

sub¬

sidiaries.

net

Lynch, Pierce, Fenner & Beane. Pro¬
proceeds of the stock together with the

proceeds of $2,000,000

of bonds to be placed privately
for part of the cost of retiring
presently outstanding short-term notes and for additions
and improvements to properties.
be

used

to

Glauber

Columbus, Ohio.
Proceeds—To retire
provide additional working capital.
Hamilton
14

Management Corp.,
of
notification)

Denver,
$200,000

(letter

loan

bank

Colo.
20-year,

Hotel
17

Concord Co., North East, Pa.
(letter of notification) 300 shares of 6%

Price, $100

share.

per

pre¬

Payment of existing

obligations.




provide

Mayflower Co., Salt Lake City, Utah
March 14 (letter of notification)
100,000 shares (lc par)
common.
Price, 10 cents per share. Underwriter—The
Cromer Brokerage Co., Salt Lake City.
To liquidate
debts and provide funds for operating expenses.

•

ferred stock.

offices

and

•

sion of facilities.

•

all

equipment

expenses.'

Price, market.

Frontier
7

com¬

Cruttenden

Underwriters—Names

®

®

—

•:

Co., Chicago. Securities being sold solely for benefit
of Richard A. O'Connor.

,

®

March

to

Underwriter

•'

&

debentures. No underwriter. To finance the expan¬
sion and development of. a retail sales organization.

Private JFires

building.

a

&

Supply Co., Wilmington, Del.
Feb. 28 (letter of notification) 20,000 shares of capital
stock, of which 12,000 shares will be sold to public at
$10 per share; remainder go to officers. Underwriter—
John K. Walters & Co., Inc.,
Wilmington, Del. For new,

5%

Cleveland

share for

short-term

16

cost of the construction of

.

its
Bids—Bids will be received
by the company at Room 2033, No. 2 Rector Street, New
York 6, N. Y., up to noon (EST) on March
28, for the
purchase of the bonds.
..:j,

•

San Francisco

new

reduce

Realty Corp., Indianapolis, Ind.
(letter of notification) $200,000 of unsecured
promissory notes which may be guaranteed or endorsed
by Mouldings, Inc. No underwriter. To pay part of the
March

parent Texas Utilities Co.

March

Philadelphia

one

Proceeds—To

outstanding under company's credit agreements.

M.

March

Dallas Power &

pay

•

•

Investment Co.,

750,000 shares

ican Securities Co.

Co.,

Chicago

held.

equipment, merchandise, land, goods and chattels.

due
April 1, 1999. Underwriters—Names to be determined
through competitive bidding. Probable bidders: Halsey,
Stuart & Co. Inc.; The First Boston
Corp.; Glore, Forgan

and

Pittsburgh

Offering—To be offered for sub¬

scription by stockholders in ratio of

Brass Inc., Kinsman, Ohio
(letter of notification) $150,000 5% first mort¬
gage bonds, due March 15, 1961. Underwriter—The Ohio

Boston

for

Liggett & Myers Tobacco Co.
784,235 shares of common stock (par $25).

March 14

New York

pay

March 21 filed

Underwriting—None.
non-

in units of

•

•

(3/29)

200,000 shares ($50 par) cumulative pre¬
Underwriters—Names to be determined

ment

and

California Life Insurance

March

Industries, Inc., West Chester, Pa.
(letter of notification) 68,000 shares of 6%

cumulative preferred stock (par $4) and 68,000 shares of
common stock
(par 100). Underwriter—De Witt Invest¬

March

Brunswig Drug Co.,

March

Property Corp., New York
certificates for 21,165 shares
(par $1). Certificates extend for an

five-year period a voting trust agreement
the same parties dated as of Jan. 2, 1944.

March 7

March

New York City
filed 150,000 shares of capital stock
($5 par).

Proceeds—For

stock

common

loans

acting
©

Zone

field voting trust

Illinois

additional

to

mortgage

Moon

by competitive
Union
Securities

March 4

mon

Blue

determined

Central

March 23 (letter of

©

be

bidding. Pr®bable bidders include
Corp.; W. C. Langley & Co.; Shields & Co.-Proceeds—
Payments on outstanding short-term notes.
Expected

fund

first

ISSUE

ferred stock.

& Co.

McAlister,

Inc., Burbank, Calif.,
notification) $150,000 6%' subordi¬
nated convertible notes and 100,000 shares ($1
par) com¬
mon, issuable upon conversion of said notes at rate of
March

PREVIOUS

Colorado

•

Arnold,

March

Registration

SINCE

Underwriters—Names to

Light Co.
filed $8,300,000 sinking fund debentures, due

Underwriters—Names

ADDITIONS

Thursday, March 24. 1949

March 2 filed

Arkansas Power &

March

in

CHRONICLE

Central Hudson Gas & Electric Corp. (4/1)
March 3 filed 20,000 shares of cumulative preferred stock.

between
•

FINANCIAL

Now

INDICATES

Oklahoma
March

&

BROKERS

Hotelevision, Inc., L. 1. City (3/30)
Nov. 3 filed 160,000 shares ($1 par) class A stock.
derwriter — Cantor, Fitzgerald & Co.,,

Price—$3

per

distribute h

share.

Un¬

Inc., New York.
Proceeds—To develop, exploit ana

television innovation.

;

1

j

f :

•LI

1

)

1

3

s

UNDERWRITERS

pay

THE

Number 4788

Volume -169

FINANCIAL

&

COMMERCIAL

mits—to subscribe for 50,002

CHRONICLE

March

Price,

March

1949

28,

(EST)__
Montgomery Chiropractic Hospital Inc

Bonds
Common

Super Market Stores Corp

Common

March

Offering—Offered

>

—

(CST)

Pepsi-Cola Bottling Co. of Wash., D.
Dec.

March

common

Bonds

40,000

shares

shares

to

be

C. (4/4)

trade accounts; 27,500
a stockholder at $3

offered to

be

to

offered

on

behalf

1949

30,

California-Pacific Utilities Co._~
Missouri Pacific RR., noon

Preferred

.

Western

March

1949

31,

....Common

Central Oklahoma Oil Corp.__
Public Service. Co.—

....;.PCommon i

v-

capital.

.

1949

1,

April

r

Preferred

Central Hudson Gas & Electric Corp

Continental

Engineering Co

Common

*

Preferred

Kansas-Nebraska Natural Gas Co

•

1949

April 4,
Associated

Telephone

Tucson

Equip. Tr. Ctfs.

(EST)

noon

18

,

$20).

(par

Super Market Stores Corp., N. Y. (3/28) 7 (letter of notification) 140,000 shares of com-

Gas, Elec. Light & Power Co.._...Common
April 11,

1949

April

12,

Underwriter—First Guardian Se¬
Corp., New York. Price—$2 per share. Devel¬

stock

curities

Bonds

Mississippi Power Co.—

mon

(par 100).

business.

opment of

1949

Bell Telephone Co. of Va.___

Bonds

Ohio Public Service Co..————

Bonds

•

1949

Tennessee Gas

filed for

Transmission Co., Houston

$500,000 of contributions to be made

by company employees under

Bonds

Public Service Electric & Gas Co

Odin

Tennessee

the thrift plan."/. "

Insurance Co.,

•

Knoxville,

,

March

23

States

subscribe to the shares in the ratio of

may

share for each three shares held at $100

expire April 26.

Rights will

American

from

vances

per

share.

Proceeds—To repay ad¬

Telephone

&

Co.

Telegraph

(parent) and for general corporate purposes.
Mutual

•

16

Eureka, Calif.
$250,000 of 6% prom¬
underwriter. To complete plywood

Plywood

Corp.,

issory

notes.

No

28

(letter of notification)

10,000 shares

(no par)

capital stock. To be offered at $8.50 per share.
writers—Miihous, Martin & Co.; Stein Bros. &

Under¬

Boyce;
Equitable Securities
Corp. (Dallas); Elder & Co.; Strader Taylor & Co.; Bullington-Schas & Co.; Fisher Hawes & Co.; Underwood,
Marx &

Co.; J. C. Bradford & Co.;

(Edwin L.)

Co., Pittsburgh

by amendment.
Proceeds—Will go to gelling stockhold¬
Offering postponed.

ers.

Prospective Offerings J
•

American

Cyanamid Co.

April 18 stockholders will be asked to approve a pro¬
posal to sell up to 40,000 shares of cumulative preferred
-stock to key employees at not less than $100 a share.

tional Bank,
Texas

March 22

Knoxville, for benefit of a trust.
Electric

filed

American

Telephone & Telegraph Co.

April 20 the stockholders will vote on authorizing a new
issue of convertible debentures to be offered pro rata
to stockholders.
The amount is to be determined later
is

but

not

to

six

each

for

exceed
of

shares

of

$100
stock

convertible

held.

debentures
On the' basis of the

shares

of

outstanding at Feb. 15, 1949, the
approximately $391,000,000.
dated June 20, 1949, and will
bear interest at a rate of not more than 3V2%, would
mature not later than June 20, 1964, and would be con¬
vertible into A. T. & T. stock at a conversion price or
amount of the issue would be

Debentures

would

be

prices hot exceeding $150 per share.

Proceeds—For account of Hamilton Na¬

Neuhaus & Co.

•

(letter of notification)

March

Islands

Philippine

City,

Sept. 28 filed 200,000 shares (no par) common stock.
Underwriter—Hemphill, Noyes & Co., New York. Price,

number

Tennessee
Feb.

Telephone & Telegraph Co.
March 4 filed 241,101 shares of capital stock ($100 par).
Underwriting—None.
Offering—Stockholders of record
one

Philippine Mindanao Development

Cebu

•

March 23

Mountain

par).
Street

voting capital stock, one
centavo par value. Price—25 cents per share (U. S. cur-*
rency). Underwriter—F. T. Andrews & Co. Proceeds—
To provide funds for plant construction, diamond drilling, exploration and repayment of loans.

Supervised Shares, Inc., Des Moines, Iowa
March 23 filed 400,000 shares (25c par) common stock.

May 10,

($1

Underwriter—Broad

Price, market.

Co.,

March
-

investment.

.

Wichman

,

Inc., New York

25,000 shares of capital stock

Wiegand

Gas & Electric Co.
filed 300,000 shares 4V2%

stock

Fund,

filed

17

Sales Corp.

unit.

at $120 per

cumulative pre¬
Underwriters—Names will be "
supplied by amendment,, together with offering .price.
Proceeds—to reimburse company's treasury for capital
expenditures, etc.
v-:\>'-S,

March

Whitehall

Proceeds—For

rand

San Diego

ferred

1949

April 6,
Pennsylvania RR.,

:

—Preferred

Co. Ltd

•

March

par)r

2,500 shares ($90 par), preferred. To be
offered in units of one share preferred and 300 shares

common

Inc., Denver, Colo.

Jan. 5 filed 2,000,000 shares of

(letter of notification) 750,000 shares (10c

common

Preferred

Orange & Rockland Electric Co

Expected early

Earths, Inc.,' McCall, Idaho

• ' r Rare

Fields,

(letter of notification)

common.

^

.

March 11
■*

5

equipment and working-

unit. Proceeds—For purchase of

J

Oil

par)

John G. Perry

Dec. 29 filed

Common

shares ,($20

1,000,000 shares (lc par)
Price, 10 cents per share.
Underwriter —
& Co., Inc., Denver, Colo. To drill a well
and acquire additional properties.

Jan.

Playboy Motor Car Corp., Tonawanda, N. Y.
1,000,000 shares of class A 20-cent prefer¬
ential dividend series ($3 par) common stock and 1,000,000 shares of class B (50 par) common stock.
Under¬
writer—Aetna Securities Corp., New York. Offering—To
be offered in units of one share each.
Price—$3^2 per

(EST)__Equip. Tr. Ctfs.

West Coast Telephone Co.__

Ohio

working capital and payment of taxes.
in April.

Bonds

Bennett-Ireland, Inc.

(3/30)

Telephone Co.

35,000

of

share and 10,000 options at 10 per share.
Under¬
writer—Willis E. Burnside & Co., Inc., New York.
For
per

March

filed

9

common stock.
Underwriter—Blyth & Co., Inc. Proceeds—To defray
part of the cost of construction of additions and better¬
ments of the company and its subsidiary, West Coast
Telephone Co. of California.

(letter of notification) 31,500 shares (100 par)
stock to be sold to public at $3 per share;

21

Preferred

Colorado Fuel & Iron Corp

Illinois Power Co

West Coast

Rights expire April 8. Underwriting—None. Pro¬
ceeds—For extensions, additions, etc.

Pacific RR.,
Equip. Trust Ctfs.

bidding. Probable bidders:
Lehman Brothers
Bear, Stearns & Co. (jointly); Halsey, Stuart & Co.

at

held.

,

1949

29,

Chicago Milwaukee St. Paul
Noon

shares of common stock (par $25).
par
to stockholders of record
Feb. 25 at the rate of one new share for each 10 shares

Jan. 28 filed 754,038

Dallas Power & Light Co., noon

first mortgage bonds, due 1979.
be determined through com¬

Inc.; White, Weld & Co.; Harriman Ripley & Co., Inc.;
Salomon Bros. & Hutzler; The First Boston Corp. and
Blyth & Co., Inc. (jointly); Otis & Co.
Proceeds—For
corporate purposes, including construction.

Electric Co.

&

Gas

to

petitive
and

Capital additions.

par.

Pacific

45

Light Co., Salt Lake City, Utah

Underwriters—Names

Underwriting, none.

preferred stock (par $100).

mulative

Power &

March 15 filed $3,000,000

.

Orange & Rockland Electric Co. (4/1)
March 16 (letter of notification) 2,600 shares of 4% cu¬

(CST)_ JEquip. Tr. Ctfs.

Illinois Central RR., 11 a.m.

,

•

1949

25,

Utah

shares of the proposed issue.

Underwriter—None., Proceeds—For construction.

NEW ISSUE CALENDAR

(1325)

Service

•

Bangor & Aroostook RR.

April 19 stockholders will be asked to approve an in¬
crease in authorized
common stock from 322,852 shares

Co.

$8,000,000 30-year first mortgage bonds.
to be determined through com¬

Underwriters—Names

bidding. Probable bidders: Halsey, Stuart &
The First Boston Corp.; Harriman Ripley &
Hemphill, Noyes & Co. and Drexel & Co.
(jointly); Blyth & Co., Inc. and Kidder, Peabody & Co.
(jointly); Union Securities Corp. and Glore, Forgan &
Co.
(jointly).
Proceeds—Net proceeds, together with
$4,000,000 to be derived from sale of additional 2,000,000
shares of stock to parent (Texas Utilities Co.) and from
other funds will be used to pay short-term notes and
for construction of new facilities, etc.
:

($50

and authorize directors to
The

to 468,000 shares,

par)

issue available

common

stock at not less than par.

New York

Television Corp.,

Nielsen

notification) 4,000 share of 6% cumula¬
preferred stock (par $25) and 10,000
of common stock (par 25b). Underwriter—Charles

tive non-convertible

Offering—To be offered in
units of one preferred share and 2Vz common shares at
$25,625 per unit. Capital requirements.

H. Drew

& Co., New

York.

Oil Corp.

Noranda

•

(letter of notification) 136,381 shares of com¬
stock
($1 par).
Underwriters — Aetna Securities

March 21
mon

Corp. and W. T. Bonn

& Co.

Price, market.

purpose

is to have available for issuance sufficient common stock

Co.,

Feb. 24 (letter of
shares

petitive
Co.

mill.

Corporate

Inc.;

Tip Top Mining & Milling Co., Tucson, Ariz.
March 15 (letter of notification) 125,000 shares (no par)
common
stock.
Price—$2 per share.
No underwriter.
•

For

purposes.

Inc.;

construction

and

operation of copper mill.

so

of this,
funds

for

debt,-

that

may

ment of
®

Boston

March

17

additional shares ($10 par) com¬
offered to common stockholders
of record March 30 at rate of one new share for each
five held. Rights expire April 18. Underwriting—None.
Proceeds—For construction and to replenish working
9 filed 406,000

March

Offered—To

mon.

be

capital.
Ohio Public Service Co.

,

Feb. 23 filed

(3/31-4/12)

$10,000,000 first mortgage bonds, due 1979,

1,000,000 shares ($5 par) common stock of which
Cities Service Co. would sell 638,160 shares and the
and

361,840 shares. Underwriters — Names to be
through
competitive
bidding.
Probable
bidders: Halsey, Stuart & Co. Inc. (bonds only); Blyth
& Co., Inc.
(both); Merrill Lynch, Pierce, Fenner &
Beane and Kidder Peabody & Co. (jointly on stock);
Otis & Co. (bonds); Salomon Bros. & Hutzler (bonds);
Lehman Brothers (bonds).
Proceeds—Ohio would use

company

determined

for

proceeds

construction

and

to

repay

a

$3,000,000

temporary bank loan. Cities would use proceeds from
sale of Ohio stock to reduce its outstanding 5% deben¬
tures

due

1958.

Bids—Bids for purchase of stock

pected to be opened on or about March 31 and for
bonds on or about April 12.

ex¬

the

Toledo

March 18 filed

Feb.

25

filed

89,000

shares

($20

par)

petitive bidding. Probable Bidders: Halsey, Stuart &
Co. Inc.; The First Boston Corp.; Glore, Forgan & Co.;
Harriman
Ripley & Co.; Equitable Securities Corp.;
Union Securities Corp., and Salomon Bros. & Hutzler

(jointly); Kidder, Peabody & Co. and White, Weld & Co.
(jointly); Lehman Brothers and Bear, Stearns & Co.
(jointly). Purpose—To provide part of the new capital
required for construction.
•

Tonopah Divided Mining Co., Reno, Nev.
16 (letter of notification) 97,000 shares ($1 par)

March

cents

common

stock.

Offering—To be offered for subscription by stockholders.

offer will be made on the basis of one
share for each 10 shares of common held. Standard

Gas & Electric Co.,

parent, plans—if the Commission per¬




Orvis at 15
For exploration and

stock, being offered to Arthur E.

common

per

share.

No underwriter.

Elec. Light &!>Power Co.

(4/6)
March 16 filed 66,000 shares ($10 par) common stock.
Underwriters—Blyth & Co., Inc. and The First Boston
Corp.
Proceeds—For construction.
Tucson Gas,

United States Television &
New

March 9

Mfg. Corp.,

York

(letter of notification) 46,500 shares of common

(par 500), of which 41,500

shares will be sold in

and 5,000 shares in behalf of stock¬
holder.
Underwriter—Willis E.. Burnside & Co.," Inc.,
New York.
Price—At market.
Offering available to

solicitation bein^' made to the public.
Company's proceeds will be used to discharge accounts
payable and for working capital.

dealers

only;

no

corporate

purposes,

including retire¬

be provided in the future.

Edison

Co.

contemplates the

reported, company

sale

of

shares of common stock. Probable bidders:
Merrill Lynch, Pierce, Fenner & Beane; Stone & Web-,
ster Securities
©

Corp.; Smith Barney & Co.

California Oregon Power

March

14

S.

A.

Cummings,

Co.
President,

in

1948

annual

report reveals an expansion program of $50,000,000 for
five

next

years,

requiring

issuance

of new

securities,

$8,100,000 approved for 1949, is expected during

half of

second

1949.

Probable bidders: For bonds: Hal¬

Stuart & Co. Inc.; Harriman Ripley & Co. and Glore,
Forgan & Co. (jointly); Merrill Lynch, Pierce, Fenner &
sey,

Beane, Kidder, Peabody & Co. (jointly); White, Weld &

Co.; Salomon Bros. & Hutzler; Blyth & Co., Inc. and The
Boston Corp. (jointly).
For stock: Blyth & Co.,
Corp.; Harriman Rippey & Co.

First

Inc. and The First Boston

(Mass.) Electric Light Co.
asked SEC authority to sell $2,750,000
series A, due 1974, through competitive
bidding. Probable bidders: Halsey, Stuart & Co. Inc.;
Harriman Ripley & Co.; The First Boston Corp.; Kidder,
Peabody & Co.; Otis & Co. For the purpose of funding
presently outstanding" borrowings.
Cambridge

Feb. 24 company

25-year notes,

•

general expenses.

behalf of" company

The subscription
new

$2,500,000 first mortgage bonds, due 1979.
to be determined through com¬

Underwriters—Names

stock

Oklahoma Gas & Electric Co.

Edison Co.

(Ohio)

Hutchins, President, states,

about 123,000

of which
•

Co., Omaha, Neb.

Northern Natural Gas

Curtis M.

Chicago Milwaukee St. Paul & Pacific RR.
,

:..

(3/29)

will receive bids up to noon (CST) March
Chicago office for-the sale of $6,060,000 equip¬
trust certificates series HH, to be dated April 1,
and to mature in 30 semi-annual instalments of

The company

29 at its
ment
1949

$202,000 Oct. 1, 1949 to April 1, 1964. Probable bidder^:
Halsey, Stuart & Co. Inc.; Salomon Bros. & Hutzler,;
Harriman Ripley & Co., and Lehman Brothers; The First
Boston Corp.;

C.

I. T.

Harris, Hall & Co.

(Inc.).

Financial Corp.

March 14 company

plans early registration of $50,000,000

10-year debentures, with Dillon, Read & Co., Inc., Kuhn,
Loeb & Co. and Lehman Brothers as underwriters.

(Continued on page 46)

,

i

46

THE

(1326)
(Continued from page 45)

.

•

Cincinnati

March

21

Gas

&

Electric

Co.

planning a new common
stock issue to finance its expansion program, which will

')

reported

company

C involve about $50,000,000 in the 1949-1950 period.

New

issue, it is expected, will be offered stockholders on the
basis of

one

new

share for each nine shares held.

the 2,244,000 shares now outstanding, the new offering
would amount to 249,333 additional common shares.
Edison

Co.

March 15 stockholders voted to increase authorized capi¬

10,000,000 to 15,000,000 shares (par $20).
taken so that company will have avail¬
able for issue not only enough stock for the probable
conversion into capital stock of the recent issue of

tal stock from

This action

was

$46,641,400 of debentures, but also that it may have stock
for sale, if necessary, to carry on the $150,-

available

000,000 plant expansion program. Probable bidders if
stock sold competitively: Blyth & Co., Inc.; Coffin
& Burr and Spencer Trask & Co. (jointly); The First
Boston Corp.
If bonds: Halsey, Stuart & Co. Inc.; Dillon,
any

Read & Co. Inc.;

Coffin & Burr and Spencer Trask & Co.
Gas Co.

Tennessee Natural

East

company

Ridge atomic energy project. It is thought that the bonds
will be sold directly to institutional investors.
White,
Weld & Co. and F. S. Moseley & Co. of New York, Elder

Equitable Securities Corp. of
said to be arranging the transaction.

& Co. of Chattanooga and

Nashville, are

Ex-Cell-0 Corp.

>

April 14 stockholders will vote on increasing authorized
common from 500,000 shares to
1,000,000 shares. Com¬
pany does not plan issuance of additional stock at this
time. Traditional underwriter, Baker, Simonds & Co.
Florida Power Corp.
Preferred stockholders will vote March 30 and common

March

stockholders

31

authorized

increasing

on

preferred stock from 80,000 to 120,000 shares; increasing
the authorized common stock from 1,210,000 to 1,600,000
shares and restricting the issuance of additional in¬
debtedness maturing more than 12 months, or additional

unless after such issuance the
aggregate amount thereof shall be less than 75% of the
total capitalization.
Company proposes to raise about
$6,000,000 through equity securities to meet its construc¬
tion requirements.
Common will be offered for sub¬
scription by stockholders and preferred through under¬
writers. Traditional underwriters of stocks: Kidder, Peashares of preferred stock

body & Co.; Merrill Lynch, Pierce, Fenner & Beane.
Wheeler

Foster

Corp.

a

be

position to obtain additional working capital through
new stock.
If it does not do so the $10,000,000 of

paid

cash
at

from

dividends

mature next Dec. 31, would have to

earnings,
on

which

the shares.

would

restricted

mean

Directors

have

no

•

adopted an
amendment to the company's charter authorizing the
issuance of 51,000 shares of common stock ($4 par). This
will increase the outstanding common to 561,000 shares.
from. the

sale

and other corporate

will

be

used

requirements.

for

Allen & Co.

may

be

underwriter.
Idaho Power Co.

March

22 company asked the FPC for permission to
200,000 common shares (par $20) and $1,000,000
4"% preferred stock (par $100). Company also asked the
Commission to authorize $4,000,000 of interim borrowings
during 1949, pending receipt of the proceeds from the
proposed stock issue. Company plans to use the money
for expansion.
Company has under consideration the
sale late this year through competitive bidding of $12,000,000 of bonds. Probable bidders include Blyth & Co.,

issue

Inc.. and Lazard Freres & Co.
'

The

Illinois Central

RR.

(3/25),

will receive bids up to 11 a.m. (CST) at
its Chicago office for the purchase of $6,360,000 in equip¬
ment certificates series CC. Bidders at the sale may sub¬
mit alternate proposals for l-to-10 year certificates and
for l-to-15-year certificates.
Probable bidders: Halsey,
Stuart & Co. Inc.; Harriman Ripley & Co. and Lehman
Brothers (jointly); Harris Hall & Co. (Inc.); The First
Boston Corp.; Salomon Bros. & Hutzler.
•

company

Illinois

Power

Co.

March 10 company's construction program for 1949-1953
is estimated to cost $95,000,000 necessitating the issuance
of

some
$60,000,000 new
200,000 preferred shares

financing,
now

bidders for any bonds include

in

in addition to the
registration. Probable

Halsey, Stuart & Co. Inc.;

•

bonds
The

and

107,226

shares

of additional

common

stock.

common

*

Halsey, Stuart & Co. Inc.; Otis & Co. (Inc.); Lehman
Bros.; Blyth & Co., Inc.; Equitable Securities Corp.;
Hemphill, Noyes & Co. and Drexel & Co. (jointly). For
stock:

W.

C.

Weld & Co.

Langley & Co., Shields & Co.
(jointly).




15

the

for

reported company may be in market in May

sale

of

bidders:
Halsey, Stuart
Co. and
Lehman Brothers (jointly); Union Securities Corp., Har¬
riman Ripley & Co. and Kidder, Peabody & Co. (jointly);
$10,000,000 bonds.
Probable
& Co. Inc.; Glore, Forgan &

Shields & Co. and Salomon Bros. & Hutzler.
•

Merck

&

Co.

of the
of

on a

two-for-one split-up
shares

stock and authorization of 100,000

common

.convertible

preferred stock, the latter to be
issued at an opportune time to raise about $7,000,000 of
new capital. Goldman, Sachs & Co. and Lehman Brothers,
according to present plans, will manage a public offering
new

of the shares.

;,•/'///

and White,

-

Station, Philadelphia, up to noon (EST) April 6. Probable bidders: Halsey, Stuart & Co. Inc.; The First Boston

Michigan Consolidated Gas Co.
March 9 reported company is planning sale of $14,000,000
in new bonds and $7,000,000 in preferred stock in late
spring or early summer. Probable bidders: White, Weld
& Co. and Salomon Bros. & Hutzler (jointly); Glore, For¬
gan & Co. and W. C. Langley & Co. (jointly); Lehman
Bros.; Harris, Hall & Co. (Inc.); Halsey, Stuart & Co.
Inc. (bonds only); Harriman Ripley & Co., Inc.; Dillon,
Read & Co.; First Boston Corp.

Minneapolis Gas
Feb.

23

stockholders

Co.

voted

to

increase

common

1,100,000 shares to 1,200,000 shares (par $1). The
additional stock will be offered for subscription by stock¬
holders in ratio of

Kalman &
•

share for each 10 shares held.

new

one

..

increase in the indebtedness of the company.

an

j

i

Missouri

Pacific

RR.

(EST) March 30
the purchase of
"$4,320,000 equipment trust certificates, series LL, dated
April 15, 1949 and due $288,000 April 15,1950-1964. Prob¬
bidders:

Halsey, Stuart & Co. Inc.? Salomon Bros.
& Hutzler; Harris, Hall & Co. (Inc.); Harriman Ripley
& Co. and Lehman Brothers (jointly); White, Weld & Co.
New

increase

the authorization

England Electric System
;
considering plans for an
probably in June, of additional stock to its

The

to

and

;

Electric Power Co.
>
March 23 the District of Columbia Public Utilities Com¬
mission turned down a proposal by the company to sell
$37,000,000 of bonds to three large insurance companies.
Investment banking firms of Halsey, Stuart & Co. Inc.
and Otis & Co. had filed objections.
; In denying the

application, the Commission said the sale would not be
in the public interest.
J. F. Reilly, counsel for the company, said the company will formulate a new proposal
to finance construction and refund its outstanding debt.
Other probable bidders besides the foregoing, if sale is
competitive, include Kidder, Peabody & Co. and Merrill

Lynch,,Pierce, Fenner & Bean (jointly); Blyth & Co.,
Inc., Lehman Brothers, Harriman Ripley & Co. and
Alex. Brown & Sons (jointly); White, Weld & Co. and
Bros. & Hutzler

Salomon

(jointly).

>

of

$75,000,000 first and refunding mortgage bonds.
Proceeds from the sale will be used in part to retire

off bank loans and finance company's construction and expansion program. Probable
bidders:
Halsey, Stuart & Co. Inc., The First Boston
Corp., Morgan Stanley & Co., Kuhn, Loeb & Co. and
Lehman Brothers (jointly). Bids expected to be opened
May 10.
prior lien bonds, to

pay

South Carolina
March

<

j
f
j

i
;
>

•

\

voted

increase

to

authorized

stock from

shares

stock

net

of

common

in

amount

an

suf¬

approximately $2,000,000.
Proceeds for
construction purposes. Traditional underwriter, Kidder,
to

Peabody & Co.
®

Southern California

March

14

company

about $45,000,000 needed
the

financing to be

Edison Co.

additional

reported

capital of

new

for'1949 construction

program,

stock. Traditional underwriters: Harris, Hall & Co. (Inc.); The First Boston Corp.
•

Southern

New

common

*
[

England Telephone Co.

.

April 5 stockholders will vote on a proposed four-for-

offering,

one

present

!

2,021,460 shares to 3,021,460 shares.
is planned to offer common stockholders this spring

common

It

!

Electric & Gas Co.

stockholders

12

;

(5/10)

April 18 stockholders will vote on authorizing the issuance

j

;

■

Public Service Electric & Gas Co.

March 18 reported company is

shareholders.

be from

;

issue, securities under

:

required.

as

;

prescribed by the board

as

Potomac

additional

(3/30)

The trustee will receive bids up to noon
at company's office, St. Louis, Mo., for

able

when and

be

later this month.

issued

be

It is customary for the road to seek authordebt

in

izations

will

which

of directors.

j

j
j

proposal will be contained in the company's proxy

increase will

•

.

Details

ficient

Co., St. Paul, may be underwriter.

.

•■j Pennsylvania Railroad
.
May 10 stockholders will vote on a proposal to authorize

stock

from

j

Corp.; Salomon Bros. & Hutzler; Harriman Ripley & Co.
and Lehman Brothers.

;

The

amount

involved

is

600,000 to 850,000 additional shares.

said

to

Probable

bidders include Merrill Lynch, Pierce, Fenner & Beane,

Kidder, Peabody & Co. and White, Weld & Co. (jointly >;
Harriman Ripley & Co. and Goldman, Sachs & Co.
(jointly).
New
12

York

State

Electric

&

Gas

finance its construction
program in part through the sale of 160,000 shares of
preferred stock (par $25) later this year, probably before
July 1. Probable bidders: Harriman Ripley & Co. Inc.;
expects

company

to

stock

$25

to

The First Boston Corp. and Glore, Forgan & Co. (joint¬
ly); Blyth & Co. Inc. and Smith, Barney & Co. (jointly).

a

split and a reduction in par value from $100.
share. There are 600,000 shares outstanding.

The split, it

is stated, is designed to make the stock
attractive to investors. The company plans to meet

more

.

_

.

by sale of stock.
•Southern

the

22

Railway
is planning to refund all

company

$12,474,000

St.

Louis

division

first

or

part of

mortgage

4%

*

*

bonds

maturing Jan. 1, 1951. Stockholders will be asked,/
May 17 meeting to approve creation of a new
mortgage for this purpose. Bonds will be sold at ;
competitive bidding.
/
at

their

first

Island

Staten

Edison

Corp.

Jan. 28 New York P. S. Commission authorized corpora-

Niagara Hudson Power Corp.

{

*

some

of its need for construction funds in the nekt few years

March

Corp.

proposed merger of

system, Earle J. Machold, President, testified that cash
budget requirements for construction purposes through
1951 would be about $105,000,000. In 1949, $40,000,000 is
to be financed by mortgage debt. Later financing, Mr.
Machold stated, would be difficult to predict at this time,
but in any future financing the management would al¬
ways have in mind the maintenance of a sound financial
structure. Probable bidders: Halsey, Stuart & Co. Inc.;
Morgan Stanley & Co.; Kuhn, Loeb & Co.

preferred stock. Proceeds from the
company's short-term indebted¬
ness and provide funds required for expansion. Proceeds
from preferred stock would be used by company to carry
out its plan of recapitalization. Probable bidders on
bonds: Halsey, Stuart & Co. Inc.; The First Boston Corp.;
Harriman Ripley & Co.; Kidder, Peabody & Co.; Otis
& Co. On preferred: W. C. Langley & Co.; Kidder, Pea¬
body & Co.;. Stone & Webster Securities Corp. and
White, Weld & Co. (jointly); Lehman Brothers; The
First Boston Corp.
■■/;/;
• -//,-

-

tion to issue $2,750,000 30-year first mortgage bonds and

March 2 at hearing before SEC

®

Northern

The

company

Public

Indiana

expects to

spend

on

Service

Co.

$49,000,000 in the next

three years to expand its electric, gas and water facili¬
ties. Approximately $25,000,000 of the total will have to
be financed through the sale of additional securities,
Dean H.

Mitchell, President, disclosed in the annual re¬
The remainder will be provided from cash on hand,

port.

depreciation

and the $11,000,000 realized through
the sale of bonds last November.
reserves

Oklahoma

Gas

March 10 Standard Gas & Electric Co. stated it proposes
to sell in the near future 200,000 shares of Oklahoma
common
it now owns, plus any shares purchased through
rights to be offered by Oklahoma to its stockholders to
purchase 89,000 shares. (Standard will have right to sub¬
scribe for 50,002 shares). Probable bidders include: Mer¬
rill Lynch, Pierce, Fenner & Beane; The First Boston

Corp.; Lehman Brothers and Blyth & Co., Inc. (jointly).

permit flexibility

large

$4,000,000

in

new

bonds would retire the

.

©

Tennessee

Products

&

Chemical

mon

stock by 150,000

for

and

no

in

issuance

•

the

immediate

Texas

in planning the financing of its
construction program, company is asking stock¬
on
April 12 to increase authorized first pre¬

future

use

of the

discretion
new

shares. At present time no decision has been made re¬
garding further sales of stock (other than present offer¬
ing to stockholders of 754,038 common shares).

(4/6)

Bids for the purchase of $9,990,000 equipment trust cer¬

series

W,

instalments

dated Nov.
of

1,

1948,

the

>

directors

stock is contemplated.

April 26 stockholders will be asked to approve increase

capital stock to 20,000,000 shares from 14,- T
The company states it has no present plans for v
issuing new shares of stock.000,000.

Westchester

Lighting Co.
filed a petition with the New York
P. S. Commission for authority to issue $12,000,000 of
30-year mortgage bonds. Proceeds would be used to redeem $9,993,000 general mortgage 4% bonds due 2004
and for plant construction.
Probable bidders include:
Morgan Stanley & Co.; Halsey, Stuart & Co. Inc.; Mer?
rill Lynch, Pierce, Fenner & Beane; White, Weld & Co.;
March

16

company

and due

in

15

$666,000 from Nov. 1, 1949-1963,

v

!

Stone & Webster Securities'Corp. and Lehman Brothers

Harriman

Ripley

&

(jointly);

annual

of

Co.

Corp.; Salomon Bros. & Hutzler.

8,000,000 to 12,000,000 shares and the
authorized common from. 10,00.0,000. shares to 12,000,000

tificates,

com-

shares. New shares will be retained

ferred stock from

Pennsylvania RR.

;

Corp.

March 15 stockholders voted to increase authorized

holders

•

>

in authorized

Electric Co.

&

Pacific Gas & Electric Co.

would be offered for subscription by
the present stockholders, in the ratio of one new share
for each 10 shares held/
Probable bidders for bonds:
new

Kentucky & West Virginia Power Co.

March

To

Indianapolis Power & Light Co.

will be received by company at Room 1811, Broqd Street

statement

Glore, Forgan & Co.

March 1 company has asked the Indiana P. S. Commis¬
sion for permission to issue $8,000,000 first mortgage

-

of the

a

construction

'

•

Light Co.
banking groups are being formed to bid
probable offering by company of $10,000,000 in new
money bonds.
Offering expected late in March or early
in
April.
Groups likely to compete include: Halsey,
Stuart & Co. Inc.; White, Wel<i & Co.; Glore, Forgan &
Co.; Equitable Securities Corp.; Blyth & Co., Inc.; Union
Securities Corp.; The First Boston Corp.

1949

Feb. 15 reported

March

Gulf Public Service Co., Inc.
stockholders at their annual meeting

Proceeds

Corp..

Power &

Thursday, March 24,

for

plans

present for the sale of the additional stock.

The

Kansas

on

sale of

bank loans, which

sold: The First Boston

•

increasing the author¬
ized common stock from 300,000 to 600,000 shares which,
since 284,984 shares are now outstanding, would provide
315,016 for issue or sale. The management explained'
that when market conditions are favorable it should be

March 28 stockholders will vote

in

Jones & Laughlin Steel Corp.
April 26 stockholders will vote on increasing authorized
indebtedness so that company may borrow up to $150,000,000. At same meeting stockholders will vote on in¬
creasing authorized common stock from 2,500,000 shares
to 3,500,000 shares.
Probable underwriter if securities

April 19 stockholders will vote

has plans under considera¬
tion for sale of about $10,000,000 bonds. The issue will
finance construction of a natural gas pipeline to the Oak
March 15 reported

CHRONICLE

FINANCIAL

&

Based

on

Detroit

COMMERCIAL

Co.;

The

First
■

.

Boston

„"

Western

Light & Telephone Co., Inc.
April 8 stockholders will vote on increasing authorized
preferred from 200,000 shares to 250,000 shares (par $25)
and authorized common from 300,000 shares to 400,000
shares (par $10).
This action is being taken to place
company in position ot sell the stocks when market conr**'*''nns are favorable. Traditional underwriters: Harris,
Hall & Co. (Inc.) and First Trust Co. of Lincoln, Neb.

'
»

1
♦

COMMERCIAL

THE

Number 4788

169

Volume

first mortgage and

Charles T. Mafz Joins

on

expenditures made for such pur¬

collateral trust
Eastern Gas &

bonds of

25-year

to

(Special

Rise

2.88%

from

ILL.

—

T.

Charles

associated with

has become

first

in

time

high of

a

was

notions

Charles T. Matz

Reynolds & Co., 208 South La Salle
Street.
Mr. Matz was previously

greater return.

the corporate

"These

\

Ripley & Co. in
trading department.

Harriman

with

;

were

factors

two

both

decline

of the
time required for the full impact
of investment changes to affect
the net earning rate.
As the in¬
vestment re-distribution and the

19458760—3,

they

through '1948,

Co.'s 25-year deben¬
tures from going all out for the

still

issue yesterday.
The first quarter

of the year is

for the '30's and only slight¬ rapidly drawing to a close and
than half the rate for 1925. there is little prospect for any
The effect of the lower level of substantial pickup in the tempo of
investment earnings on life insur¬ new underwritings
in the time
ance
•
operations is indicated by that is left.
'.rr£&' /
more

comparison of current earnings
with figures of what might be
earned at the higher rates. If the

Bankers

finis

had still applied in 1948,

ings

life

invested

on

insurance
well over
than

funds would have been

half
the

dollars

billion

a

more

earnings. The
'20's would
greater re¬

actual

year's

rate of the
produced even

earning
have

policyholders.

turns for
"It

of

because

was

the

alike,

investors

and

presumably will be glad to write

in the '30's
the earn¬

earned

rate

long-

gustained drop in earning rates
that life insurance companies gen¬

this

to

the

former

sluggish

find

can

in*

but chagrin

little

for

reason

has

which

period

The

either.

business

of

pace

and the latter can do little more

lack of oppor¬

than bemoan the

place¬

the

for

afforded

tunity

ment of funds.

of

This week held promise

But it

sification.

less

was more or

the

the accumulation of re¬
serves.* It also explains the rising
cost of life insurance in recent
for

Tfa because

part offset by an improve¬

been in
ment

in

mortality among policy¬

net rate of

The

years
as

interest earned

in recent

insurance funds

life

is reported by

the Institute

——

—

——

—

come

Tegeler &
Drive,

distributors
task

the

HILLS,

CALIF.

or

their

always

been

been turned loose
of
themselves.

finally
take

care

have

instances

the

been

in that re¬

situation

the

f*1'

,

with

has be¬

Dempsey-

research

-

Chronicle)

MASS.

—

Wil¬

is with Hornblower

& Weeks.




must

have based their bid

the

on

con¬

improved market
is impending. At any rate, reports

victions that

an

mailed

New

to

share

a

immediate interest

indicated that

was

ported moving at

a

to

4.45%

stock

re¬

was

premium of

The big coast
the

utility will apply
financing con¬
programs of itself and

proceeds

to

Eastern Gas & Fuel 3%s
issue

which

was

Howard C. Wick,

Secretary

March 17,1949

The Weatherhead Company
quarterly dividend of $1.25
share has been declared by
Board of Directors

the

ported to have encountered

reception

was

the

a

brisk

$12,000,000

of

the

on

outstanding Preferred Stock of
Company^ payable April 15,
1949, to stockholders of record

GAS

the

COMPANY

business

of

close

the

on

New York 20, N. Y.

April 2, 1949.
The

board of directors

this day

has

declared
cash

Dollar

One
on

per

March

of

share

15,

1949

Cleveland,

Ohio

the

pany,
to

dividend

($1.00)

Vice President

regular

a

capital stock of the Com¬
payable on May 16, 1949,

stockholders of record at the

close of business April

15, 1949.

E. E. DuVALL,

Secretary

23, 1949.

"Call for
PHILIP MORRIS"

Martin J. Keena,

Vice-President
charge of the securities division

in

of the New York Curb

Exchange,

New York, N. Y.
March 16, 1949

has been elected President of the

of the

Curb Exchange, it was an¬

nounced

following

meeting.

He

Burgers,
floor

S.

Louis

succeeds

member of the trading

a

of

elected

been

club.

veld,

Vice-President

and
Treasurer of the Curb, continues
Secretary-Treasurer of the club

as

for

another

Mr.

in

first

1920

member

now

to

the

of

Curb
the

department

heads. Mr. O'Meara joined

Broad
ters

staff

June

on

Street to its present quar¬
become
an
indoor
ex¬

to

change.
Mr.
an employee

became
few months before

Hengeveld
a

Preference Stock

lar quarterly dividend of 900 per

4.48% Convertible Series

on

3.60%

transition.

Preferred

Cumulative

the

share
Stock,

Series have been declared pay¬

of

Pre¬

able

4.56% Convertible Series

ferred Stock of the respective series of

Dividend No. 4

record at the close of business on

14,

of the
following quarterly dividends:

share

on

cents

Preference

and

dividend

281/2

Common

500

Stock

($5

per

Stock,

the

on

4.48%

10,

1949.
resolution adopted at

July
Certificate representing a
of Common Stock of
value of $10 each is recognized,
purpose, until surrendered, and

1945,

share

or

the par

share on the
Stock, 4.5 6%

for any

cents per

a

no

shares

Certificate

Common

or

Stock

Certificates

for

are

payable April 30, 1949,

to
stockholders of record April

5, 1949.
O. V. SHOWERS

THE

Co.

Inc.

par

the

The firm

shall

have

been

issued

value of $10.
G. HANSON,

Treasurer.

bonds

March 22

at

on

Proceeds

competitive

of

sale

its bid of 100.1099.
will

be

to provide

required'for

or

award

imburse

its

its

OF THE CITY OF NEW

The Chase National Bank of the
a

dividend of 40^ per

stock

of the

share

on

YORK

City of New York has declared

the 7,400,000 shares of the capital

Bank, payable May

the close of business

2, 1949

to

holders of record

April 1, 1949.

The transfer books will
payment

by the
a portion of
the construc¬

acquisition of permanent
to

BANK

not

be closed in connection with the

of this dividend.

used

improvements, extensions and ad¬
ditions

NATIONAL

is

at

won

CHASE

property

treasury in

to

re¬

part

for

or

THE
;

new

of the par value of $5

therefor.
Holders of Certificates for shares of
Common Stock of the par value of $10
each are, therefore, urged to exchange
such Certificates, for Certificates for
new Common Stock of the par value of
$5 per share, on the basis of two shares
of new Common Stock $5 par value,
for each share of Common Stock of the
each

three dividends

a

the Stockholders' Meeting held on

Halsey, Stuart Places
&

pay¬

15, 1949 to holders of CoihStock of record at the close of

mon

March 18, 1949

Stuart

a

share

Par),

able April

the

Convertible Series.
All

declared

been

of

extra dividend of $1.00 per share

an

the

on

Convertible Series;
Preference

April

business on March 31,

share

per

holders

to

also

has

quarterly

authorized the payment

1949

1949.

There

The Board of Directors has

37V2 cents Per
Common Stock;

1,

May

L.

Halsey,

of

Preference Stock

28

become

Ltd., inc.

dividend

quarterly

regular

The

$1.00 per share on the Cumulative Pre¬
ferred Stock, 4% Series, and the regu¬

157

Pursuant to

year.

Keena joined the Old

Market

COMPANY

Vice-President

Christopher Henge-

Jr.,

EDISON

Common Dividend No.

Dividend No. 8

supervisory staff.

the

Philip Morris & Co.

SOUTHERN CALIFORNIA

annual

the

Edwin J. O'Meara, who is in
charge of trading floor personnel,

tion
re¬

Treasurer.

1949

22,

Curb %-€enturv Club

funds

Another

FISKE,

FRANCIS
March

closed. Checks will

Keena President of

company

its subsidiaries.

share)

per

York.

March

interest.

the

quarterly

a

cents

(871/2

the Preferred

Trust Company of

by Guaranty

100.75 to yield
not especially keen. /

ing figure.

approximately

buyer,

1%%

of

declared

Capital Stock, and a div*
idend of fifty cents (500) per share on the
Common
Capital Stock, both payable on
April 15, 1949 to stockholders of record at
the close of business March 31,
1949.

on

the close of business

Transfer books will not be

in the reoffering at

brought out

$101.50

SMELTING

MINING COMPANY

have

1949.

29,

I.

per

will not be closed.

Directors

dividend

cent

record of said stock at
March

semi-annual

about y2 point above the offer¬

the

The

dividend of one

a

cents

COLE, Chairman of the Board.

REFINING AND

Y.

(194%) on the
preferred stock of this Company outstanding,
payable April 5, 1949, to the holders of

and three-quarters per

general ob¬

that winners

was

offering to the public today $2,500,000 Gulf Power Co. first mort¬
gage bonds 3% series due April
1, 1979 at 100.56% and accrued

yield

Street

declared

has been

,

at

20

Foundry

Lighting

Priced

of

rate

MORRIS II. WRIGHT

servation

the

Corp.'s 100,000
shares of new no par value cumu¬
lative $4.50 preferred stock yes¬
terday were able to report quick
oversubscription.

the

UNITED STATES

bids.

1921,

who

at

30

at

from

Underwriters

SHIRT SHOPS

DELAWARE, INC.
Directors
has
declared

Company

There

,

Secretary.

Dividend No. 11

27,

profusion

No.

SYLVAN

American Car and

30 Church

to

business

of

■

of

Board

Transfer books

New York 8, N.

1940

15,

close

STOUT,

S.

1949.

17,

30 Rockefeller Plaza

day the market moved

some

the

at

divi¬
share
the Common Stock, payable April 1st, 1949,
stockholders
of
record
March
24th,
1949.

dend

acc

i

Curb

in

record

NATIONAL

to

>

share

per

1949.
JOSEPH

on

NATURAL

the

came

of

Apr)l

payable

Corporation
31,

OF

point between

a

In dealer circles the

he

during the quarter with some lit¬
tle backing up as a consequence.

the

March

DIVIDEND NOTICES

Corporation

Street, New York
fifteen cents (15c)

of

stockholders

The

com¬

the

struction

Financial

March

of

A

offerings

equipment

dividend

been declared this day on the capital stock

pliances. The territory served di¬
rectly by the company has an
estimated area of approximately

runner-up

of

%

sub¬

a

Wall

14

A

4 rural cooperative
associations and, incident to its
electric business, the sale of ap¬

bid
101.7899 for a 3%% interest rate,
indicating a spread of approxi¬
The

mately

turn

Shares

National

of

CONSOLIDATED

exception is in the case of

which

With Hornblower & Weeks

liam J. Hartt

on ~

a

along the most satisfactory lines,
since some issues have lagged

railroad

—

group

has

not

has

This

An

3.19
3.07
2.92
2.88
2.96

Conrad, Bruce & Co.

SPRINGFIELD,

has left little

remaining

spect is good.

Pflug-Felder was
Angeles Manager for

The

in

shelves.

large

department. Mr.

to

distribution

which

manner

Pacific

in charge of the

(Special

have

of

exception, however, and by and

Co., 214 North Canon

formerly Los

and their
accomplished

3.43
3.41
3.40
3.29

to' The Financial Chronicle)

associated

is¬

con¬

are

Preferred Success

W. Pflug-Felder

George

corporate

Such

Dempsey-Tegeler & Co.
(Special

new

as

4.10%

Pflug-Felder With

BEVERLY

far

of recent vintage

cerned, underwriters

to

1942

Geo. W.

So
sues

and

follows:

1930-39 average

wholesale

at

and

utility

price of 100.10 for a 3%

a

coupon.

in

DIVIDEND NOTICES

per

pany

the

which" is

pany

sidiary of The Commonwealth &
Southern Corp. (Del.).

suc¬

Employees Quarter Century Club

nothing

holders."

cn

markets.

great as the earn¬

would indicate. This
the earnings decline has

might reason¬

ably be expected to induce invest¬
ors to become more active in the

although the cost increase

ings decline

which

outlook

with the
paying the

offering,

000,000

bit

a

activity and likewise diver¬

more

terest rate

the in¬
guaranteed in new pol¬

has not been as

the

has

be

operating

an

piiiiiiiiniiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiH

cessful

2.96%

agreed that what is really needed
is a somewhat clearer picture of

years,

of

bid for the $35,-

Two groups

especially helpful for

been

not

erally adjusted downward
icies

controversy

Telegraph

erage

average

Tel. & Tel.

over
rates,
plans to take
into the courts, apparently did not
deter banking groups interested in
the New England Telephone
&

about one-fourth less than the av¬

ly

level.

is

company

customers

44,743.

was

well as in rural

as

sale

the

Moreover, it was indicated that
Wisconsin
Electric
Power
Co.'s

which the company

expected to have a further effect
on the earning rate this year."
"The 1948 earning rate was

issue

New England

be

may

week priced at
100.70 to yield about 2.96%
net
return, are still available at the

The

in interest rates both contin¬

ued

The

as

2%%, due 1979, and offered
at 101% to yield 2.81% this week,
were a bit on the sluggish side.

continued that year because

rise

portion

Florida, in the generation
of electric energy

new

operative, although to a lesser ex¬
tent, during 1947, but the

their

from

budge

electric,

of

directly

served

brought out last

generally
and the increased investment of
funds in channels that produce a
•

to

240,000.
number

electric energy to a non-affiliated

regards yields.
Dealers
report,
for
example,
that
Columbia
Gas
System 3s,

the slight up¬

rates

interest

in

turn

refuse

still

population

purchase

communities,

the

and an esti¬
in excess of
As of Dec. 31, 1948, the

miles

square

and its distribution and sale in 68

market for new
issues appears to have good pow¬
ers
of absorption if the situation
at hand carries appeal, it is in¬
dicated that institutional buyers

reported since 1945," the Institute
said. "This rise is a direct reflec¬
tion of two things:

and

Slow Side

the

on

Although

than 5% to a

upturn

State of

at 102.459 to
3.60% to the

engaged, within

northwestern

47

subsidiary of The Southern Com¬

>;,/'•

•

areas,

A Bit

from
to 100% and at special
scaled from
100.56%
to
ranging

prices

The company is

the

buyer.

not
rharp, it was sufficient to bring
the 1948 rate earned by U. S. life
companies to 2.98%, the highest
the

in¬

broad

stimulate

to

bonds,

sale, were placed
yield a return of

low of 2.88%.

"While

prices
100%.

which
attracted
three separate bids at competitive

years,

many

more

by compar¬

ison with current returns afforded,

The

marking a turn in a 20-year sus¬
tained decline that took the rate
from

regular
104.75%

terest.

reports that the net rate of inter¬
est earned on invested life insur¬
ance funds in
1948 increased for
the

liberal yield

the

and

appeared

Insurance

Institute of Life

The

CHICAGO,
Matz

extending

Chronicle)

Financial

decades.

two

over

2.96%

to

marks turn in decline

The

The bonds will be redeemable at

shorter
than that for most recent issues,
In this instance the term,

6,500
mated

poses.

Fuel Associates.

Up in 1948 Reynolds & Co. in Chi.

Investments

(1327)

CHRONICLE

FINANCIAL

&

CHASE

NATIONAL

BANK

OF THE CITY OF NEW YORK
A.

J. Egger

Vice President and Cashier

48

(1328)

THE

COMMERCIAL

&

FINANCIAL

CHRONICLE

Thursday, March 24, 1949
gin to do something about this
subject.

BUSINESS BUZZ
J>

It is said that while all
govern¬

P

I,:

ments,

Behind-the-Scene Interpretations
from the Nation's

/■

fw

and

out

more

state,
reaching

more

for

conflicts

revenues,

jects of taxation will

0^

t

if

JLjLll/U

Capital

Federal

are

Washington...

:

local,
and
ob¬

over

be

mighty

hard to iron out.

M CrCv

>!'

j;i

With Presidential

approval, the
department expects to en¬

State

WASHINGTON, D. C.—At least two of the smartest operators
both sides of the

liven

the
present chaotic legis¬
lative situation by shipping
up to
Congress the proposed charter of
the International Trade Organi¬

on

"coalition" of conservative Democrats and Re¬

new

publicans which smashed the Truman leadership in the Senate on the
issue, are privately passing the word to their boys, "be
careful, how you use this word,3>
mind
'coalition.'"
voting together when it
This is more than the obvious.
suits their politics or convenience

filibuster

zation and agreement
to ask for approval.

Furthermore,

The obvious is to seek from get¬

to vote alike is all there is to the

been

ting too far out in front and get-

"coalition," insiders want stressed.

agreement

ling

shot

boys

The

at.

not

are

merely trying shyly to avoid the
public appearance of having again
conjured up; that miraculous in¬
stitution, a bi-partisan coalition
of like
thinkers, in order that
shall

machine

beautiful

their

.avoid having to

be tested by the

Actually

fit

of

the

the

from

of

legitimate

a

legal

and

political marriage. Instead it is
*-1

in the nature of

a paramour

re¬

lationship. The achievements of
a
coalition
are
informal and
casual And inconstant.
*

*

the

To

casual

this

ate.

A

suf¬

deal of the entire
Truman legislative program is in
has

if

even

not

found

yet

President

the

about it,

out

judging by his opening remarks
this week to the U. S. Conference
of Mayors.

Mr.

*

.reckless
gamble for his civil rights pro¬
gram, tossed in all the prestige
of a winning political candidate,
the

and

in

Truman,

a

of

momentum

political

a

gamble, to tighten up
rules

so

to prevent a

as

going

a

desperate
the Senate

in

concern,

filibuster

later civil rights pro¬
gram. He tossed in, as it were,
nearly all his political bankroll.
against

a

And he lost.

conservative
Democrats who, if the President
had not gambled away his prestige
and influence, might have tended
As

a

consequence,

ip go part way with the President
on

so

far.

matters, won't go nearly

many

They will

as

result

a

where they think it is to their ad¬

vantage to do so. Republicans not
too "liberal" will lose their fears
a

Presidential

if they
President, and

attack

do not follow the

the

even

dozen

"liberals"

out

fed

are

and

out

with

up

the

President's leadership.

party

discipline

Democrats

and

among

the

Presidential

prestige among the wavering
Republicans will count for less
and

less.

actual
will

This

majority

vote

that

means

of

the

according

"convictions"

the

Senate

to

their

each

upon

piece

of legislation as it comes up, by
which

is

meant

inexact

an

synthesis of their personal

con¬

victions about what ought to be

done,
about

their

plus
what

political

is

convictions

good

their

for

careers.
*

*

*

Since the bi-partisan "coalition"
of

relative

conservatives

tive to the President's

succeed

such

not

that the




come

unanimously

anti-lynching

personally

GOP

avid

so

think

this

the 1950

is

It is

bill.

Senators

lynching legislation

for

few

a

carry

sense"

the

that since
Taft
led
a
nominal
majority
against the tightening of the rules
on filibusters, he is de facto ma¬
jority leader of the Senate.
the

are

"What would

baby do with

a

bond?"

a

of the last

their

National

Service

Life Insurance. These refunds
due

the

because

tables

in

used
too

life

the

are

expectancy

initial

NSLI

conservative, and since

veterans'

the

not

of their overpay¬

war

for

ments

dedicated to voting against what

tual

they

to the

to

be

their

own

political benefit, just because to
do

insurance

Mr. Truman. They

are

is

mu¬

a

"coalition"

arrangement,

initiate its own
program of legislation to
carry
the country progressively forward
en more
enlightened legislation.
to

*

*

While

the

"coalition"

as

much

of

not.

And

resulted

the

Truman

the

in

which

situation

this

is

program

of

defeat

severe

leadership, before its

legislation was
reached, is described as a neat and
large victory for the Republican
Senate

leadership.
is

session

civil

for

postponed

The

until

.-<■

rights

the

usual
to

end

of

be
the

then dropped after

and

the

Federal

and

taxation, wonder

Mr. Truman

if

"knew what he was

walking into" when he promised
the

U.

S.

Conference

would

he

the

have

the Treasury

this

Mayors

of

Secretary

of

do something about

Budget

The

message.

Administration

a

rights fight so early as Feb.
28, the GOP leadership played a
in

the

defeat

of

Actually the current interest in
this enormously complicated and

developed near
1948, when Treasury

the

Senate

Majority and its hold on
following. This is rather rue¬
fully ■ acknowledged by "good"
Democrats themselves, who won¬
der why Mr. Truman fell for the
political trap.

with

not coincide with
own views.)

to

MIAMI,
Handley
with

The

Financial

Curlette & Co.,

Commerce Building.
was

Chronicle)

FLA. r- W.
Douglas
has become associated

Chamber of
Mr. Handley

previously with Blair F. Clay'

With William S. Beeken Co.
(Special

to

mechanics

The

no

that

each

are

veteran's account must be audited
to

determine

the

appropriate
particular life

his

for

serve

circumstances,

surance

of

the

figured. This
completed.

and

refund

re¬

in¬
the

each

for

auditing is
i " : : <

nearly
•

However, the mechanics of pay¬

ing the money will be tremendous,
since

three-fourths

about

of

the

payments will -go to veterans
whose policies have lapsed, and
who

do

maintain

not

their

ad¬

dresses currently with the govern¬
ment.

;;

The

Financial

Until

ments
the

bulk

could

it

is

was

of these
be

this

of

end

Now

it

recently

the

that

Chronicle)

hoped

calendar

anticipated

about January, 1950.
sjt

overtures

in

even

lem

of

a

cursory

U.

the

The

the prob¬

a

local,

of

v.

-

this

of

as

a

promise

concrete
an

was

a

^

v

Oregon Portland Cement
Riverside Cement A & B

Spokane Portland Cement

result of the offer to the
group,

Mr.

Snyder

time next month will hold

preliminary

with

conference

few municipal

cuss

,

make

and

Ralston Steel Car

ob¬

appointed by the Treasury to
subject

Federal Street,

Trading Markets:

re¬

report in 1943 of a commit¬

this

its Boston office, 75

similar

made

during the '30s, also to
Conference of Mayors.

municipal

a

state,

S.

construed

As

<

Conference

S.
-

.

recommendations.

the

have followed

overlapping

U.

only thing which might have

been

some

way

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Roosevelt

study

jjt

Most people who

*

Mr.

volume payments will not begin
until

the

before

Mayors.

tee

by

year.

that

Snyder

BEACH, FLA.—

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scure

outpay-

completed

PALM

advance

no

sult

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v

WEST

out the idea to the meeting

made

has

of

end

Secretary

estimate.

civil

part

re¬

baugh & Co., Inc.

subject.

difficult problem

$1.5 billion, and the Veterans'

filibuster. By needling the Demo¬
crats
into
taking up the basic

large

officials to dis¬

what should they do

LERNER & CO.
Invesment Securities

10 Post Office

Square, Boston 9, Mass.

Telephone Hubbard 1990 Teletype BS 09

to be-

its

❖

s):

the

bill,

both

between

Senate
the

bills

is

on

the
a

implicit
that

House

rent

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is

as

arm"

now

the

under way
ary.

NEW

FOREIGN SECURITIES

Executive &

70

All Issues

of

YORK 5

1950.

Underwriting Offices

WALL

STREET

Tel. WHitehall

control

4-4540

CARL MARKS 4 PA INC.

>:•■

beginning to

won't

get
until about next Janueconomy

That is the refund to veterans

Trading Department

FOREIGN SECURITIES

appear

SPECIALISTS

though the latest "shot in the
to

Hill, Thompson'& Co., Inc.

Firm Trading Markets

con¬

idea

rent

shall finally end June 30,

It

Teletype—NY 1-971

HAnover 2-0050

aft

Whatever finally comes out of
conference

*

casually and
MacDonell Moore has become con- ,
thought threw
of the nected with William S. Beeken '
American Municipal Association,
Co., Guaranty Building.
•
j
that something ought to be done
about
eliminating
conflicts
in
With Goldman, Sachs
taxation.
The
municipal : group
snapped up the offer so quick it
BOSTON,
MASS. — Goldman,
figuratively made the Secretary's Sachs &
Co., members of the New
head
snap,
and
he
had
not
York Stock Exchange, announce
grounded this offer in any ad¬
vance
preparation. Mr. Truman that Robert Alden Dole has be¬
repeated the delectable prospect come associated with the firm in

at

of

program

said to

the

control

President is deprecated, the nega¬
tive usefulness of this arrange¬
ment for stopping or modifying

thing

is repayable

estimated

Truman

amount

the

of

positive device
from
the

a

wresting

,

*

usefulness

was

overpayment at $2 billion in his

only has
power to'"stop" Truman at many
points. It is powerless, unlike a
legitimate and formal political

for

excess

policyholders.

Hoover Commission estimated it

the

of ITO

last

not that

angry.

And

fund, the

Mr.

would happen to displease

so

planned

throughout the world.

Joins Curlette & Co.
(Special

'■

conceive

the

else
they
lan¬

"Chronicle's"

the

were

amorphous

parties to the "coalition"

general

favoring

and may or may

as

allegation

Likewise

one

Finally,

its

(This column is intended to

"non¬

as

with

flect the "behind the scene" interpretation from the nation's Capital

Thus, friends

of Senator Taft describe

and provides

every

S."

slim.

out the policy, and no
provision for reaching

time

a

principles

Its
prospects for approval by
Congress at this distance look

top leadership with lieutenants

to

the

be

be imminent.

no

agreement from time

for

U.

Submission

Congressional elections.

mutual interest arise.

trade
the

economy

in

regular

but

guage

that they

politics

to

blessing for all sorts of

a

disagree

anti-

for

as

good

-

are

to

as

of like

intended

was

in

what

in favor of freer trade, has be¬

fundamental

the

almost

an

in

for increased taxes.

This business of people

shortly

Republicans

for

respects the President's proposals
on
wage-hour, labor, and other
proposals,

"Fair

the

of

Congress¬

up.

that

"free

trol

may

one

trade restrictions,

radi¬

President's program, that
means that a majority of the Sen¬
ate
will amend iri far-reaching

other

and

(rela¬

more

that

declare

men

plumping

for the

killing

much

underline

and

and

of the

one

instability of the "coalition" by

cal program) is more numerous
than the partisans of both parties

legislation,

to slice

declaration of

for

the Truman

Hence when legislation comes
up,

as

an

requiring,

two-thirds vote for approval.

ITO

of

with the White House, split again,

of

well

as

has

as

Congress is pretty well primed

southern

the

form

a

it

Bretton

most bitter foes of cloture, will

the fact that they have split once
J. 1?

of

Senate "coalition" is not. There is

great

jeopardy

a

Thus,

make

decisive defeat in the Sen¬

a

issues.

is that

news¬

may

Mr. Truman's leadership has
fered

will

particular should be
noted, say the insiders, is that a
"coalition" connotes something of
a
working organization. This the

of

reader

difference. The fact

little

"liberals"

What

Ms

headlines

paper

ablest

Deal"

club, is that
something
far

is

the

will

Congressional
coalition

a

particular

on

in

decision

submit

Woods, only a ma¬
jority of both houses, rather than
as a treaty, which would
require

to

parties
fight

Senator John Sparkman, one of

get

to

members

newer

the

filibuster

from time to time part company

the

of

some

trying

are

particularly for the bene-

across,
„

what

boys

particular,
late

the

to

vote

bright sunlight of publicity.
smarter

In

the

like

reached

thereon, and

50 Broad Street

.

120

•

New York 4# N. Y.

AFFILIATE: CARL MARKS & CO. Inc. CHICAGO

"~r

BROADWAY

Tel. REctor 2-2020

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