Full text of Commercial and Financial Chronicle : March 27, 1947, Vol. 165, No. 4580, Section 1

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as
ESTABLISHED

Final Edition

in 2 Sections

Section 1

-

*5?

Reg. U. S. Pat. Office

New York, N.

Number 4580

163

Volume

The Miracle of
must

obvious

be

that

Ascribing
in

Points out

worlds pfoysi-

situation.

tion&^with conditions after World War

cally, economy-f
ically
and.

only

r

we

help
to
Bernard

its

Baruch

M.

feet

'•

■"

to help set

and

the world on

there will be no

again,

uhtil after the most dire

recovery

results.

-V;,

.'

'

-—-

"America is the sole hope.
"Here

;

courage."

! V

BERNARD M. BARUCH

,

March 3,

doubts

1947

'

>■

-

Georgetown, S. C.

,

Editor's Note—The above para¬
are

! Some

from

taken

due, he

sion" is wide¬

ings and divi¬
dends of most

difficult position of U. S. in the United Nations,

says,

of

to absence

clear foreign policy, and because her ter¬

a

Re¬

gain His Lost Prestige," which ap¬

"Chronicle" Feb. 13.

paragraphs are accordingly

These

published with Mr. Baruch's per¬

are

H. Rosenstiel

F.

principles.

stand these

not only very

Wilson's ideas and says

good, but still
v
the
upgrade;

the pessimists
argue, however, that they are al¬
ways
at their peak just before
the slump. Perhaps the most sur¬
prising feature of the present sit¬

on

uation is that this slump

peoples who don't under¬
Cites failure of Woodrow
U. S. is considered a med¬

,'y

mission.

yvy'

.

:,,

here

in 1947 will not ex¬
ceed 3% -4 million in spite Of a
terrific demand and in spite of a
production

cars.

but

shortage

a

'

-

,s

;

.

'I

..."

^

'■

.

some

textiles

from op¬
The same
page 1672)

erating at full capacity.

(Continued

',

coming

the resultant

of the basic factors

one

attempted is to consider the position which
own
America has occupied in the delibera-

rt,wm. A. Robertson
-

'

.

.

of the United Nations. That our position has been
far from satisfactory, is probably the opinion of many thousand of
f
(Continued on page 1680)

prices.

;y

(Continued on page 1673)

on

*Mr.

the

William

previous articles include "Should
Partnership with Foreign Nations?"

A. Robertson's

States

United

Into

Go

("Chronicle" June 29, 1944, issue), and also "Why a World Peace
Succeed" ("Chronicle" Jan. 4, 1945, issue).

State and :

Federation Will Not

Municipal.

„

\

'

.

.

Havana Litho. Co.*

.

*Prospectus on request

of stock

mining the average level

.

Aerovox Corp.

behind the

prices—but the pat¬
tern and direction of these trends
will weigh heavily in the valua¬
tion
of 1947 earnings, an even
more
important factor in deterlevel of stock

tions and workings

stefei,

sheet

of

and

lead

prevents this industry

Vacuum Concrete

year^and , earnings
dividends form

the

The demand is there,

million

copper,

6

of about

capacity

our

F. W. La Farge

car¬

and

is

from

of

dinal, importance in any estimate
of the movements of the stock
market in 1947.
Not only will
these
trends be the* major de¬
terminants of final earnings for

to

the purpose of this article
review of all its doings. All that

their
direc¬

seems

completion of one year of active ex¬
istence on the part of the United Nations invites
some consideration of what it has accomplished.
a

these

importance

The

It is not, however,

attempt to as-,

tions and their

Urges withdrawal of U. S. from United Nations and
formation of United States of Europe and closer
relations between nations of western world.

undertake

doing. An

so

say

by nations she desires to assist and protect.

dler

the verge

of

future

psychosis

repeating. We hear
the motor industry that car

production

a

trends,

and free elections among

a

"Bow President Truman Can

direc¬

and

seemed

ers

ritory lies outside Europe. Holds U. S. position
difficult because of policy of upholding democracy

Earn¬

spread.

-

in 1946 had al¬

upon

Mr. Robertson points out

"reces¬

a

apparent

numberof oth¬

.

Underwriters

National Board of Fire

out¬

and fear

look
of

WILLIAM A. ROBERTSON*

general

business

which

trends
were

•

■

Established. 1927

;

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«

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; and other

.

York 4, N. Y.

Cleveland

Chicago
Geneva

«

Albany

Troy

Baltimore

Scranton

OF NEW YORK

Syracuse
Harrisburg

* Wilkes-Barre

Bond Dept. Teletype:

Acme Aluminum
Conv.

NATIONAL BANK
of INDIA, LIMITED
in

•

Kenya Colony and Uganda
Head

Branches

26, Bishopsgate,
London, E. C.

N. Y.

Burma, Ceylon, Kenya
CoJooy; and ^ Aden and Zanzibar ,<

Paid-Up Capital
Reserve Fund___

,

Bank

banking and
'

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£4,000,000
£2,000,000
_

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undertaken




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NY

1-576

Telephone—Enterprise 6015

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THE CHASE

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1-635

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Tide Water Power

.Company

Members
Members

Analysis upon request

and Dealers

Hardy & Co.

*

CITY OF NEW YORK

Brokers

.

York 5, N. Y.
REctor 2-8600

Bell Teletype: NY

THE

COMMON

for Banks,

Broadway, New

OF

Toronto

Service

ReynoldsStock Exchange
& Co.
York
'

Montreal

NATIONAL BANK

i

Preferred

•Prospectus on request

120

t-0980

Bond Brokerage

,

Conv.

Dealers Assn.

Y. •* HAnorer
1-396

Teletype NY

Alloys, Inc.

•Twin Coach Company
Ass'n

Street, New York 5

fc-3600

Conv.

Security

WILLIAM ST., N.

New York

Members New

of

every

Trusteeships and Executorships

45 Nassau
Telephone

£2,200,000

description
exchange business •

conducts

"

A

Security Dealers

in* India,

Subscribed Capital

The

90c

Members

Office:

York

New

Solar Aircraft Company

INCORPORATED

"

NY 1-708

Preferred"*

Detroit Harvester

Gearhart & Company

'

52

■

Springfield Woonsocket

Williamsport

(Representative)

Buffalo
Dallas

"

Pittsburgh

London

Bankers to; the Government

SMITH & CO.
Members

Teletype NY 1-210

HAnover 2-0600

THE NATIONAL CITY BANK HART

PHILADELPHIA

BOSTON

Exchanges

25 Broad St., New

•

Bond Department

New York 5

64 Wall Street,

'

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SECURITIES

York Stock Exchange

New

•

;

.

■

INVESTMENT

Members

or

of

tions!

known to bear

peared in the

;

.trends,

i.946

first half of

earlier.
t h e

<8>even

their

letter persists at a time when our econ¬
written by Bernard M. Baruch, omy is still characterized by ap¬
Esq., on March 3, 1947, to Alex¬ palling scarcities in many fields.
The housing shortage is too well
ander Wilson, writer of the article,
graphs

with many conflicting opinions and

of which had their origin in the

ready changed

about

industries

faith and

have

still

we

The year 1947 opened

;•

the majority

grave

the

produce more and more,
more

are

'■

•

express

help itself.
; "if ■ we
do
still

porate earnings.

situation.

influential businessmen,
\
f *

I

,

many at
the same time

Yet,

must pro- •

not

con-

more

enhanced by possibility of reduction in cor¬

of further decline is

Should the U. S. Withdraw from the

business.

own

effort

world

<§>' '

■

futqre of their.

>"Through

a

ourselves confronted withjawenrb; idling

we see

-optimistic } .{<
a b o u tt h e

of recovery.

the

Today,

to

way

and believes that probability

month bear trend has been reversed
:

"v'■

Our economy is booming and almost all

have the seeds

ceed > to

analogy of present condi-

I, and foresees stock market

structive attitude.v:;"

here in Amer-A

we

in drawing

errors

-advance when pessimistic sentiment gives

spiritually.

greater

(2) excessive commodity

(1) danger in rising inventories;

reviewing stock market trends in last two years,
large volume of stock overhanging market,

concludes

price levels leading to buyers' strike, and (3) unfavorable foreign

the

that

Mr. La Farge
coupled with
political and international uncertainties, have put effective ceiling
on prices for months
ahead. Sees no clear evidence that nine-

After

slump psychosis to remembrance of what happened

a

callFv:P°htrw/

ica

Analyst, Clarke, Dodge & Co.

^

1920-21, Mr. Rosenstiel questions such arguments of "the Bears"

as:

fHi tier

"It is

FARGE

By FRANCIS W. LA

V

the

position where,
more
than
ever,
it needs the
miracle of American production.

5

J

By FREDERICK H. ROSENSTIEL

Economist for Arnhold and S. Bleichroeder, Inc.

world, is now in a

scotched

Copy

The Outlook for the Stock Market

American Production
"It

Price 30 Cents a

Y., Thursday, March 27, 1947

York Stock Exchange
New York Curb Exchange

New

30 Broad
T*I, DIrbv

St.
4-7800

.

New York 4
T*Ie. NY 1 •?'*'*

ira

haupt&co.

Members New York Stqck Exchange
and other Principal Exchanges

111

Broadway^Nn

REctor 2-3100

.

Y. 6

Teletype NY 1-2708

•ypr

>,

Thursday, March 27, 1947

COMMERCIAL & FINANCIAL CHRONICLE

THE

1646

X-

oa.

Trading Marketa ins

Greater N. Y, Industries

Old Reorg. Rails
&

Commons

By AXEL IVEROTH

Preferreds

SECURITIES CORP.
Established 1920
Members N. Y. Security
Nat'l Ass'n of Securities

NY

TELETYPE

BELL

Dealers Assn.
Dealers, Inc.
HA 2-2772

Democratic

Jones Estate Corp.

make

will

it
Stock Exchange

WOrth 2-4230

based

1-1227

Teletype NY

on

a

consumers.

STOCKHOLM,
viction

that

3/68,1956

,

Savoy Plaza
Class "A"

Vanderhoef & Robinson
Exchange

Curb

York

New

Members

SI Nassau Street, New

into

prices

pext election comes in

Telephone COrtlandt 7-4070

.

1948.

situation, there is noticeable a
Social-Democratic propa¬

being the

+

ganda as regards nationalization. The party lead¬
ers frequently profess themselves to be supporters
of a free economic system. Talk of further gov¬

control over production is
not to be taken too seriously, tfyiy seem to imply.
They do favor the highest possible rate of pro¬
duction and only if that can be aided by govern¬
ment intervention would they favor such action,
ernment ownership and

American Overseas

Airlines

:

Bought

—

Sold

—

'

they say.

Quoted

;

,

77- So far, to be sure, the Swedish Labor Govern¬
direct steps toward public

Members

--

New

York

-

Stock Exchange

New

120

York

Curb Exchange

BROADWAY, NEW YORK S
Tel.

REctor

control of

investigate certain industrial or commercial enter¬

with the

and

boot

factories.

The

of

now

shoe

of finding more
or organization.'
under such scrutiny are the

professed view

methods

industries

The

wartime and if that

of

so,

not

new

a

fresh

a

In 1944

news

Experience

was

manufacturers
beet

and

sugar

continued

and

page

on

Newmarket Mfg.

the

furniture

in-

cutting

stone

Members

private, into

labor

effectively

in

about
such

a

Such

under

/a

7 7

I,.'.

Tudor City Units

may

;v

Frank C.Masteison & Co.
Members

and

full

the

of

use

to produce leads to

national

more

equitable

way

Curb and Unlisted

than has heretofore

that the poorer and wage-earning
groups will' get a larger share in the general in¬
crease
of prosperity.
Finally, the program de¬
mands greater efficiency in production and in¬
creased opportunities for the citizens whether in¬
dividually or through their organizations, to share

Securities

MICHAEL HEANEY, Mgr.
WALTER

and the

improving both production methods
standard of living—in other words, an in¬

dustrial democracy.
The

The

Swedish

Joseph McManus & Co.

Fundamental Program

postwar

three main parts:

1676)

is

program

Members

divided

(1) Full employment; (2)
on

page

New York Curb Exchange
Chicago Stock Exchange

into
39

a more

Kingwood Oil Co.

Goodbody & Co.

1127

New

York

For Banks,

Chicago

Board

of

New Orleans Cotton

.

Spring

•.

''*7>

77

/

-V

Analysis

Other Principal Exchanges

Members N.
25

Opens

April

&

Co.

X• Security Dealers Assn.

Street

—

New

Tel. HAnover 2-5872

yy': '■

York 4, N. Y.

Summer

Meet

Opens June

Teletype NY 1-2785

MAR LIN -ROCKWELL

18th

18th

Trade

*Prospectus

Exchange

on

Request

PETER MORGAN & CO.
31 Nassau Street

New York 5,

Tel. BA 7-5161

*Air

N. Y.

Tele. NY 1-2078

Products, Inc. Com. & "A"

*Emery Air Freight Corp.

^Monmouth Park Jockey Club

Inc.

on

7j

Racing Association
Meet

Broad

CORPORATION

Exchange

Exchange,

Producer

7,7-7 :'Y-(

'

James H. Acker

NEW YORK 6, N. Y.

Brokers & Dealers

-f

:7

■

Teletype NY 1-672

Eastern

Exchange

Cotton

Commodity

-

Telephone BArclay 7-0100

Exchange

Curb

Oil

Price about 1%
•

Inquiries Invited

Members

York

Globe Oil & Gas Corp.

Roberts & Mander Corp.

Crude

Canadian Securities Dept.

H. Hentz & Co.
New

A

General Aviation Equipment

Hanover 2-4850

Stock

Teletype NY 1-1610

167-6)

Bagdad Copper Corp.

CANADIAN UTILITIES

Established 1856

York

New York 6

Broadway

Digby 4-3122

MAINTAINED:

CANADIAN BANKS

115 BROADWAY

New

KANE, Asst. Mgn,

in the work of

(Continued

Members N. Y. Stock Exchange and

,,

<

•

■

Members N. Y. Security Dealers Assn.

&

.

collective

increased

an

a

We Maintain Active Markets in 17. S. FUNDS for

oreeuecmAGompanu
1-1126

Exchange

NEW YORK 5
HAnover 2-9470

This income must be used for the benefit

& Pfd.

Teletypes—NY

Curb

Teletype NY 1-1140

income.

CANADIAN MINES

Bell

1923

York

7

FIRM MARKETS

Co.

United Piece Dye Works

St., N. Y. 5

New

ST.

7

CANADIAN INDUSTRIALS

37 Wall

WALL

all, full employment ought to be assured.

Railroad Employees Corp.

Com.

Established

•

welfare.

Ful1 Employment Emphasized

employment

power

Aspinook Corp.

the

community's direction
private interests will be

common

Bridge

Detroit & Canada Tunnel

64

First of

System Teletype NY 1-1919

Detroit Int'l

the

that

way

subordinated to the

Full

Exchange

Curb Exchange

Broadway WHitehall 4-8120

Bell

be utilized
highest rate of
coordination must be

resources

to1 achieve

production possible.

brought

York

New York 4, N. Y.

activities, whether public
planned economy, so that both

a

material

and

most

50

York Stock

New

a

coordinate all economic

and

Members New

'

joint committee, representing the vari¬
ous organizations of the Swedish labor movement,
the political and educational as well as the eco¬
nomic, published a joint postwar program, which,
in 1945, was adopted by the newly formed SocialDemocratic government as it's guide for future ac¬
tion. (An English edition was printed in 1946 )
The
fundamental idea in this f program
is to
or

Edward A. Pureed & Co.

possible in
why not in peacetime?

interest.

Pathe Ind.

;

on

For a Social-Democratic group it
topic, but thanks to the war,' it

Sweden, too.

was

had

was

point

problem was discussed by the working men

production

All Issues

Northern New England

introduced

by its predecessor, the national coalition govern¬
ment. But it has appointed special committees to

efficient

Boston & Maine R. R.

private industries, although it has pro¬

longed some of the wartime regulations

prises

2-7815

that full employment

Consolidated Elec. $ Gas Pfd.

been the case, so

ment has not taken any

fl[c PONNELL & Co.

which all agreed:

7 7

shown

This

one

branch offices

our

Ralston Steel Car

sub¬

of all in

>

Imminent Nationalization

7

;7;<7';77:'7,
had

was

this

NY 1-1557

,

La.-Birmingham, Ala.

Willys Overland Pfd.

sometimes

on

ExcWufa^

Mid Continent Airlines

was

the

Stock

Southwest Natural Gas

come

In

York

Direct wires to

expressed

world would

debates

there

ject

certain hesitation in the

Teletype NY 1-1548

Bell System

This

New Orleans,

—

fighting

being.

confused

Tage Lindbom

organized labor cdntrols the politi¬
cal power.
;•
c 7;7 7;
•;/
How long this will last is hard to say.; The ma¬
jority of the Social Democrats was obtained as late
as
1940; in the 1944 elections they lost 19 seats
however, and in the Second Chamber now hold
barely one-half of the seats.
In the provincial
elections in
1946 they sustained further losses
which in due course will be reflected in the mem¬
bership of the First Chamber. The group making
the greatest gains in 1946 was the Peoples' Party,
the former Liberals. While it is a party of the left,
it distinctly opposes both nationalization of private
property and political control over industry. The

York 5

the

7

St., New York 4, N; Y*

HAnover 2-0700

pro¬

SWEDEN

often

was

after

over, a new

upset, because

Savoy Plaza

current

New

25 Broad

During the recent war the con¬

which

v the
productive apparatus : is
triangle composed of labor, capital and
In Sweden, this triangle has now been

Broadway, N. Y. 5

Members

constructively aiming at
(1) full employment, (2) more
equitable distribution of wealth,
(3) higher productive efficiency
and greater economic democracy.

subject to political decisions.
In any free economic system

Iveroth

Axel

and

wages

Sweden's

scribes

Request

on

Steiner, Rouse & Co

gram as

SWEDEN —
industry does
not object to government par¬
ticipation in planning, but it
object to any policy

Analysis

despite materials shortages. De¬

Swedish private

does

Bell

•

t

STOCKHOLM,

Sweets Steel

120

u

political bureauracy.

restricting

May, McEwen & Kaiser

>

.b

government,

by overdoing reform, and by
supplanting free market with

A

Intl. Acc. Society

Members Baltimore

Bought——Sold—Quoted

charges

Elk Horn Coal Com. & Pfd.

o.

\

labor organization

socialistic moves are
indirectly undermining private
enterprise by interfering w»th its
efficiency, by taxation policies,

1-423

..

official praises postwar
efforts to achieve full employment, maintaining all
economic activities—both private and public—should
be coordinated by communal planning. States gov¬
ernment intervention, including non-profit enterprises,
7 ?
has restored house production

labor's increased,
political control has upset nation's economic balance.
Contends past almost exclusive private ownership
has made possible impressive social reforms.
Re¬
ports businessmen anxious to cooperate with Social-

Pl.t N. Y. 5

40 Exchange

,,. t,

Federation of Labor

Research Director Swedish

Swedish

Industry representative argues that

KING

&

By TAGE LINDBOM

y::,

;

Industries

Federation of Swedish

Lear, Inc.

KING

Rockwell

Disagree on Socialism's Progress

Mid-Cont. Airlines
;

1

Mf

Swedish Labor and Industry

Common & Preferred .•!!

Common

Request

.'

Raytheon Manufacturing Co.
$2.40 Conv. Preferred

And other Exchanges

Trading Markets

BOUGHT—SOLD—QUOTED

N. Y. Cotton Exchange Bldg.

Troster, Currie & Summers

J-G-White 8 Company

•Prospectus

NEW YORK 4,
CHICAGO

N. Y.

Member

New

74 Trinity
DETROIT

York

Security Dealers Association

Place, New York 6, N. Y.

INCORPORATED

37 WALL STREET

NEW YORK 5

PITTSBURGH

'

GENEVA, SWITZERLAND'




Telephone HAnover 2-2400
'

Private Wires to

■.

Teletype 1-376-377-378

Buffalo—Cleveland—Detroit—Pittsburgh—St. Louis

ESTABLISHED 1890

Tel. HAnover 2-9300

Tele. NY 1-1815

request

Reynolds & Co.
Members
120

New

York

Stock

Exchange

Broadway, N«»w York 6. N. Y.
Telephone:

-

on

Ball

REctor 2-8600

Teletype: NY 1-635

fS

yolume 163

INDEX
Articles

and

News

Disagree

Swedish Labor and Industry

H.

—Lewis

Haney___,

Graduate School of Business

___1643

;

>1647

_____

4

Elliott

—Court and

■

1650

__

:

Unsuccessful Thus Far in UFECo. Dispute—Edmour Germain

Points

out

system and lists

^'

Credit

Confidence in Canadian

for

Reasons

Kidder &

M.

Outstanding Labor Issues—Thomas J. Anderson,

The

Creditor Role—John

Exchanges and Free

Abbink

Twenty-five

years

—Bernard

"Reds"

—1654

Progress

—Cover

Functions

May Visit

Wilfred Eady

Senators

Skeptical

ITO—

of

Than Previously, Says

Investor Better Served Today
Charles B. Harding
—

'

"

'

Page

•

Bank and Insurance Stocks— .-1W
Man's Bookshelf
..1657

Jv Business

'»Canadian Securities

1668

.

Dealer-Broker Investment

'1'

.

Einzig—Deflation

: '<

"

1655

i; Recommendations

in Britain?.

.

.1660

....1663
1654
Wilfred May.. 1649
Governments... 1657

Funds

Notes..../...

NSTA

Observations—A.
Our Reporter on

v,

as

listed

on

Reg.

U.

S.

^VILLIAM B. DANA
Park

25

CHRONICLE
COMPANY, Publishers

©HERBERT D. SEIBERT,
WILLIAM DANA

;

Thursday,

Every

27,

Manager

Thursday (general
issue) and every

1947

news

,

«tate
•

f

;

and city news, etc.).

iOther-' Offices:

135

S.

Salle St.,
State 0613);
E. C., Eng¬

La

111.
(Telephone:
Gardens, London,
land, c/o Edwards & Smith.

./Chicago 3,
,'JL Drapers'

Vyilliam B. Dana ;

in United States. U. S.
Territories and Members of
Pan-American Union, $35.00 per year; in
Dominion
of
Canada, $38.00 per year.
Other Countries, $42.00 per year.
Possessions,

Other

and

Publications

Quotation

Record—Monthly,

(Foreign postage extra.)
Monthly
Earnings Record — Monthly
$25.00 per year.
(Foreign postage extra.)
Note—On account of the fluctuations in

$25.00

the

per

year.

rate of exchange,

eign subscriptions and
be made in New York

remittances for for¬

Exchange
Member

Exchange

Sugar

TRADING MARKETS
10

■■■

Thiokol Corp.

field and public ;

National Company

Crampton Mfg. Co.

Billings & Spencer

excellent and

V

,

ish ideas of some

of

our

State

in

HittlOfi & to. INC,
Members New York Security Dealers Assn.

Bell

System

Punta

is prompted by the

York

Sugar Assoc.

Lea Fabrics

Legislature.

U. S. Sugar

in the executive department.

Commodore Hotel

The

♦Fidelity Electric Co.
Class A Common Stock

of introduction in that form was apparently speed
not to miss the then session of the Legislature, and

purpose
as

Alegre Sugar

Eastern

Assemblyman William E. Clancy first introduced the bill
skeleton form which provided for the establishing of a

amendment.
I The bill ( printed in the "Chronicle" of March 6, page
1255) was subsequently amended and it is with the bill as
amended that we shall treat in part today.
This proposed legislation is inapplicable to "the buying,

with the intention

Teletype

Haytian Corporation

Law now pending in the New

securities control division

so

WOrth 2-0300
NY 1-84

170 Broadway

reformers.

revival of these observations

The

Susquehanna Mills
•Prospectus on request

of ambitious and large

DUNNE & CO.
Members New York Security Dealers Assn.

25 Broad St., New York

4, N. Y.

WHitehall 3-0272—Teletype NY 1-956
Private

Wire

to

Boston

u\

!|j
•'a

!«

(Continued on page 1700)

advertisements must
funds.

&

Assoc.

cpiii-

Febru-

post office at New
the Act of March

Subscription Rates

Bank

Coffee

CO.

Stock

Exch.

120 WALL ST., NEW YORK

over-the-counter and Curb regula-/

Our position, particularly in the securities field, is that
existing laws are adequate to permit the public authorities
to take effective action to the extent that is desirable, even
though they do not make possible the remolding of the
securities and other businesses to conform to the New Deal-

■

and ad¬

Monday (com¬
plete statistical issue — market auotation
records, cornoration news, bank clearings,
vertising

Curb

TEL. HANOVER 2-9612

our

//

Subscriptions

SEIBERT, President

March

3,1879.

York

should unite to defeat bill.

...1692
1649

second-class matter

1942. at. the
;N. Y.„ under

25.

Y.

Editor & Publisher

WILLIAM D. RIGGS, Business
'

Reentered as

New

the VN. Y.

to civilization.

Securities............1664:
Securities'........... 1658
Salesman's Corner
1670':
'Securities Now in Registration. .1693

try

from

York

&

York

New

New

pelling thesis can be made for the proposition that the exces¬
sive rate at which legislation is being ground out is a bane

Estate

York,

Patent Office
New York 8, N.

Place,

REctor 2-9570 to 9576

j /

.

We venture the observation that an

Company

COMMERCIAL and

The

19, 1947.

established by trade custom. Securities

Securities Transactions

FINANCIAL

Quotations Upon Request

America, New York City, March

'

Securities

Markets (Walter

Securities

markets

~_1699>

Whyte . Says)
.....!
Washington and You

Sugar

Haytian Corp.

Stock Exchaiigfe' exeiqp>ted*|
Would Interfere with the practices of the over-the-counter and Curb j

Railroad

Tomorrow's

Punta Alegre

on

free enterprise. May be a burden on interstate securities
Has a patronage motif and for the first time attempts

place the stale in the field

tion.

/;•
>
Page -;
Reporter's Report
.-71698
Prospective Security Offerings. .1697'
Public Utility Securities
1652 ;
Real

Inc.

i

by Dr. Haney before
the Pattern of Free

Address

Conference

New York State Securities Transactions Bill a departure

to

Our

Copyright 1947 by

Published Twice Weekly

'

de¬

want it? How can we

we

system of

~

•

of

Securities Dealers,

transactions.

Regular Features
"

Mutual

*

Pending N. Y. State Baby SEC Law

1664
1664
-1665

Sale
Formed—:

Largest Municipal Bond

Investment Dealers of Ohio Is

of

FARR

1664

.,1

Ass'n

Members

1656

T_

Member

York Security Dealers Assn.

New

Nat'l

1654

Further Credits
Aid to iGrefice.—-—

Imports

Curbs

Drastically

Teletype NY 1-1203

HAnover 2-8970

that

American

Haney

York, N. Y.

39 Broadway, New

being equal to

(Continued on page 1682)

high

GOLDWATER & FRANK

pre¬

an

Why do

1656

Foreign Observer

Washington

Opposes Political

Complete

the chance of each

word, freedom. What is freedom?

1658
.1658
Nathan Will Debate Wage Proposals—>—1658
World Bank Developments
^——1660
/■Treasury Initiates New Bond-Buying Plan——//l-.--v.—1663
Sweden

understood

ideology of their own Enterprise in the Postwar Era,
Graduate School of Business Ad¬
—an
ideology of freedom.
The
outstanding idea in my ministration, New York Univer¬
cooperation with the
topic "Free Markets and the Free sity, » in
Enterprise System," lies in the Mortgage Bankers Association of

Export-Import Bank to Explore

LaGuardia

H.

veloped

—1656

——

^Truman's Foot in Bog," Says

.

American

Bate Prevented from

Sees Interest

Sir

ques¬

citizens

First Mortgage——1653

of New Commercial Buildings
Performing Economic

JSTpyes Favors. Construction

a

tion. It is

1653

Situation.—

Wants Greek Loan to Be

Sen. Johnson

ing our problem. If only the aver¬

society to choose what he will do,

what

time
Lewis

York Office April 15

Greek

Explains

Mortgage Certificates

question

de¬

called

-1652
1652

—

Title Company

long way towards solv¬

fairly be

our

has

it

batable

———————1652
Restrictions-—-.-------—--—-.1653

Margin

Scores

Schram
Acheson

us a

cisely what freedom is!
Freedom is equal opportunity.
In other words, freedom means
a
chance for
each member of

may

Fund

the World

and

Syria

takes

age

become

—

World Bank to Open New

and

midst,

Art-

Securities Making

Legislation on World Bank

All

I. What Is Freedom?

The true answer to this

within in

Law (Editorial)——-1647
Members of NYSE Believed Favoring Substantial Increases
In
Commission Rates
—;
1649
Good

Eu¬
and the

boring from

*

Offerings Wanted

questions it suggests.

over¬

Orient

Fending N. Y. State Baby SEC

State

Socialists,

rope

Production
"—

American
M. Baruch
of

Miracle

The

hands

running

-.1653

*

*

■

NEW YORK

WHitehall 4-6551

and. Russian

July Anticipated

N. Y. City Banks
A. Schapiro
*/<•

Telephone:

would have thought the system
in danger. Today with England, its
in *■
of get it and keep it? These are the

the

1652

_■

Request

on

WALL STREET,

99

onl

no

birthplace,

Earnings Prospects of
—Morris

ago

the

Enterprise—Francis Adams Truslow__1653

Sterling Convertibility in
—Herbert
M..:Bratter

Circular

and restore American economic structure.

__1651
1651

_

under free enterprise;

productivity

greater

of free private enterprise to be

Jr.__1651

L_

Policy—Alf Landon

New Foreign

Our

America's

Bought-Sold-Quoted

(1) standard;
t money, and
(2) scientific economics, based on a price and profit
system and sound rules of taxation. Urges house-cleaning to repair

1650

P. Warburg

Testing Our Foreign Policy—James

of those who

fundamentals to free markets:

as

N. Y. Mediation Board
A.

on part

MANUFACTURING CO.

production," Dr. Haney asserts this cannot exist without free:

markets.

___1648
1650

Administration, New York University

Terming free enterprise "free individual choice
direct

Government Bonds (A Lower Level of
Business Activity in Offing)—Raymond Rodgers_______1648

Outlook for

Management of the Public Debt—Daniel W. Bell
The Survival of a Free Economy—Virgil Jordan____:

W0RUMB0

Professor of Economics,

Socialism's

on

Progress—Axel Iveroth and Tage Lindbom
Free Markets and the Free Enterprise System

AND COMPANY wmmmmmmmmmmm

By DR. LEWIS H. HANEY*

Cover

Robertson

A.

B. S.

Free Enterprise System

U. S. Withdraw from UN?—A Retrospect

the

—William

1647

Free Markets and the

Page

The Outlook for the Stqck Market—Francis W. LaFarge Cover
The Slump Psychosis—Frederick H. Rosensteil__.___.._.Cover

Should

•.

THE COMMERCIAL & FINANCIAL CHRONICLE

Number 4580

-

♦♦Stern & Stern

TITLE COMPANY

LAMBORN & CO.

CERTIFICATES
Bond & Mtge.

We are

Guar. Co.

99 WALL

STREET

NEW YORK
V

Lawyer* Mortgage Co.

Lawyer* Title & Guar.
N. Y. Title & Mtge.
T

Members

15 Broad St, N Y. 5

Stock

Exchange

WHitehall 4-6330
f




on

request

& Trust Co.

PREFERRED STOCKS

*Year-end

analysis

on

request

Macfadden Publications

'!!!

All Issues

Spencer Trask & Curb Exchange
Co.
York

SUGAR
Exports—Imports—Futures

"Bell Teletype NY 1-2033

High Grade Public Utility and Industrial

Circular

♦Public National Bank

Co.

Co.

Prudence Co.

New-York

Textile, Inc.

of

**Offering

5, N. Y.

Members

New

York Stock

Broad Street, New

25

•

4-2727 :.... y

Albany

York 4

HAnover 2-4300

Members New

135 S. La Salle St., Chicago 3
Tel- Andover 4690

*

Teletype—$TY 1-5

'
.

DIgby

Exchange

C. E.
>
.

Tel.:

Newburger, Loeb & Co.
"1

interested in offerings

-

Boston

-

Glens Falls

-

Schenectady

Unterberg & Co.

Members

N.

Y, Security

Teletype NY

Worcester

Dealers Ass'n

New York 6, NX
Telephone BOyling Green 9-3569

61 Broadway,

1-1666

I'm
•
;
*^v;a ri': 'I
"V- V.* ■ :.!■
THE COMMERCIAL A FINANCIAL CHRONICLE
•

^•

^
.

;

.

|v

BUSINESS BUZZ
I

fT; '-V, '' ■",vSv \

IN OFFING

.1,

■

By RAYMOND RODGERS*

N'V V, J-

,

»

-V'-

»

; {MS TMCNr

'f

j
j

Professor of Banking, School of Commerce:
Accounts & Finance, New York University ••

.

'■

-i

:■

.

Thursday, March 27,
1947

J?.3'

t

A LOWER LEVEL OF BUSINESS ACTIVITY

ma

tLT

.*r

Outlook foi Government Bonds

Wahii & («.

■' '

;;

.

1648

»

;rVr'111 ,m*V

,

n

:

»•

SCCOfltTi E>-1

*—secTioni——:
»**»,,iieiai

i

I

,„«J

r

Pointing out all booms

come to an end, Dr.
Rodgers sees price!
outrunning current purchasing power, which may in¬
decline in business activity by end of
year. Says burdensome

structure

Abitibi Power

■

duce

Armstrong Rubber
Aspinook Corp.*
Barcalo Mfg.*
Bates Mfg.

: tax structure

:

of Federal

ing but, instead

of

pattern

immediate large Federal refund-;

no

coming flood of municipals. Concludes wartime

a

interest

government

will

rates

be

maintained

in

"

;

■

As is well known, mutual
savings bankers

the great army of the
thrifty.

that

character of their de¬
posits, to keep fully, informed on
government credit developments,

General

cumulate

the people
the extent

to

Machinery

'

they

small

Gt. Amer. Industries

of

credit, even- more
credit, depends on
basic, fundamental factors, such as
than

sayings,

ments.

the

now

government

Hoving Corp.t
Hydraulic Press

on

a

Long Bell Lumber
Majestic Radio & Tel.
Maryland Casualty

turned

$12

main

have

collected

and

Raymond

over

billion

their

savings,

government'for

Mexican Gulf Sulphur

Savings
have

Michigan Chemical

bankers,

as

our

result,

a

our

pected

gov¬

its

level

They have even more
than that—they have a heavy re¬
sponsibility, because of the semi-

come

and

the

outlook

for

securities.

Pfd.

*An address

Pathe Industries

the

The

my

j

forecasters

ex¬

immediate

to

in

reach
1947.

an

The

level has been

later

by Dr. Rodgers be¬

in

fore Savings Banks' Association of

There

Connecticut, Investment Forum,
Haven, Conn., March 20,

factors

higher

even

national

"I'd Feel

the

are

in

so

The

as
expected.
other; favorable

year

many

'ir'i

Purolator Prod.*

^

(Continued

on

1674)

page

fDistrict Theatres
;

Taylor-Wharton*

Public Debt
k

f

*Metal Forming Corp.

*Dumont Electric

i

|

to

Pfd.

Towmotorf
Upson Corp.*

.

national debt.
It is

EASTERN

at Net Prices

./<'•

•<

need

no

■

,,'■■■

(When

-

:•

'

deliverable)-

Prospectus

on

■■■:<'

gether

'•

request

time

to

the

"

/."'?■

.

ESTABLISHED

22 East 40th

,v'!

t i

o

d

a

i

n'a 11

Upon Request

kk'k

1927

Telephone: LExington 2-7300

men

saying

of

"no."

fessors,

v

Hotels Statler Corp.

V

w

request.

the

bankers
desirable

k,

tCircular

on

to

pro¬

in

studying
problems constantly aris¬
,

is

very

Daniel
•

W.

Bell

m.p.;—'kk

other

hand,

are

^Address by Mr. Bell at the Mis¬
souri Bankers

Conference, Colum¬
bia, Missouri, March 19, 1947.

-

-'i

•

I

Tennessee Gas & Transmission

Di-Noc Co.

Soya Corp.

U. S.

1-1286-1287-1288

to say

qualtitiea

and

Kingan & Company

^

^Universal Camera Corp.
on

to
is

of

that

inaccu¬

ACTIVE MARKETS

tFoundation Company
*Prospectus

the

know
are

gratifying to notice
"change of policy adopted by
banking -groups throughout the
country during the past few years.
The bankers in
groups such as this
(Continued on page 1688)
V

American Overseas Airlines

^Colonial Sand & Stone Co.

BROADWAY, N. Y. 5

on

all

the

the

Pro-

mixture

.

It

well

in

new

ing.

are

art

Teletype: NY 1-2948

request

the

,

versed
.

a

ascribed

-

y

theorists and

as

We

generalizations

fessors

help

supposed to be
har d headed

Corporation

Street, New York 16, N. Y.

V'.-;;

rate, but I think it is fair

other.

r

thought of

that

time.

can

bankers

Central National

:;!•■.

visionaries.
these

from

T

'

severe

"moving the banks into
for "undue worry" about the

often

to¬

•

Each

'•

•

handle than long-term in

against

pleasure to

brought

CORPORATION

CLEVELAND ELECTRIC
ILLUMINATING CO.
'
•

to

k'k;V v!. kk^.!:^■:/

groups '-be

THE NORTH AMERICAN
COMPANY RIGHTS

Memltrs N. Y. Security Dealers
Assn.

-

a

Sees

;;

warns

be here
today to speak to this assembled group
representing both the banking profession and the
academic life. It is
parti cularly

Teletype NY 1-2425

Bought—Sold—Quoted

/

N. Y.

difficulties, and

long-term debt."

fCONSOLIDATED DEARBORN CORP.

120

objective.
recent debt redemption policy and the isolation of savings
>j'
bonds through guaranteed
redemptions from fluctuating markets.

appropriate

Tide Water Pwr. Com.
tttjon

V

• vr

efforts of

Lands

that the views
of
these
two

Southwest Natural Gas
Standard Gas Elec.

Circular

\4V>

New York 5f N. Y.

Tel. HAnover 2-8080

Derby Gas & Elec.
Puget S'nd P. & L. Com.

or

1

FIRST COLONY CORPORATION
52 Wall Street

Amer. Gas & Power j
Cent. States Elec. Com.

Bulletin

:

a

Vacuum Concrete *

*

Available

Holds short-term debt is easier

United Artists*
United Drill & Tool "B"

living mechanism designed
in good condition

a

of securities

hands, former Treasury official reviews
wartime fiscal* and debt administration towards this

^

market

U. S. Air
Conditioning
U. S. Fidelity & Guar.

1 Prospectus

* Prospectus

.

as

and in proper
,

>;

;•

■

&

By DANIEL W. BELL*

Defining public debt management
keep a quarter-trillion dollars

*Hungerford Plastics

•Textron
.Wts.

Management of the

President, American Security & Trust
Co., Washington, D. C.
Former Under-Secretary of the
Treasury

Polaroid
i.

Lot Better About This Raise If the
Boss Had Given
It to Me on Some OTHER
Day!"

the

Philip Carey

■»(

a

in¬

business situation
which could be presented to bear

New

1947.

be

high since
the beginning of the
year that a
new record will
probably be made
even if business
activity declines

Pfd.

Moxie
N.Y. New Hav. & Hart

will

afternoon,

outlook,
also, is much more encouraging
than had been anticipated. v The
national income, which set a rec¬
ord of $165 billion in 1946, is ex¬

artifi¬

not

this

than

pected.

securities.

direct interest in

a

ernment

Minn. & Ontario Paper
Missouri Pac.

its

theme

level

depositors'

cially created book credit—to

Com. Pfd.

will
serve

Business activity continues at a
high level—in fact, a much higher

Rodgers

v

-

,

.

of

money—real

factors

governments," which

savings

banks

basic

briefly sketched to

necessary background for a dis¬
cussion of the market outlook for

Thus,

the

Lanova*

These

be

as

grand

scale.

activity, prices, taxes,
expenditures, and- general
and
budgetary
develop¬

public
fiscal

them
to

over

private

business

millions of

turn

Hoover Co.

Government

v

ac¬

the

depositors and

Higgins Inc.

appre¬

fiduciary

lic servants of
all

public servants of

are

Although it is not always fully

ciated, they
are, also, pub¬

Pfd.

Diebold Inc.*
Gen'l Dry Batteryf

Old

apparent and advocates pruning

more

Looks for

current year.

Chicago R. I. & Pac.

Old

will then become

budget.

4

Cinecolor
Old

a

as

Finishing Com.

Great Amer. Indus.

& Pfd.

request.

,;k.

•

1-Dtt»et'Wires-To

-*

-

Pima. ,*Chicago &.
Log Angeles
;
' ENTERPRISE
PHONES
DartTd«m
Buff. 6024




Seligman, Lubetkin

& Co.

Incorporated

Boo. 2100

Members New

41 Broad

York

Established 1008

Security Dealers Association

Street, New York 4

J.K.Rice,Jr.&Co.

HAnover 2-2100

Members N: V.

Security Dealers

REctor 2-4500—*120
Bell System

SIEGEL & CO.:

Assn.

Broadway

,

Teletype N. Y. 1-714;

39 Broadway, N. Y. 6
•

,

„

DIgby 4-2370,

Teletype NY 1-1948

i

1649

CHRONICLE

THE COMMERCIAL & FINANCIAL

Number 4580

Volume <163

Robt. Hudson Now• With
; — •'
•,

v "

'

*

' * ■

,t

Gross, Rogers & Co.
'

j" * (Special to The Financial Chronicle) _ - ,
LOS ANGELES, CALIF.—Rob¬
ert W. Hudson has become asso¬
ciated with Gross, Rogers & Co.,
458 South Spring Street, members

By A. WILFRED MAY
ONE OF

BRITAIN'S HOTTEST SPOTS

Typifying the Empire's

Colonial Difficulties

of

formerly

the

If it's

showdown with Russia that President Truman wants

a

Brothers.

Ex¬

Stock

Angeles

Los

the

JAMAICA, BRITISH WEST INDIES—If it is true that
ex¬ change. Mr. Hudson was
with Sutro & Co. and
tent to which Britain salvages her disintegrating Empire depends on

Buckley

about to get it via Congress. Ultimately—but not before the the efficacy of her further efforts toward economic reconstruction,
nowhere does she face a more difficult task than here in Jamaica—
March 31 deadline—Congressmen will give the President authority
largest and most valuable of the West Indies, but with her gorgeous
With
Hull & Co.
to intervene in Greece and Turkey. Actually, that's not so important
splendor enveloping incredible squalor and ? dirt, tumbled-down
as disclosures and policy pronouncements to be forthcoming during
(Special to The Pinancul Chronicle)
shacks, and illiteracy.
^ ;
debate on the enabling legislation.
'
:
t
LOS ANGELES, CALIF.—Harry
And here too
exists one of the "hottest"
Votes against the President fTwo most vital facts will be y
places in the Empire for the restoration of dwin¬ H. Schulte has joined the staff of
may be few in the end. Right
silhouetted against the world
dling confidence in British rule; a problem which Holton„ Hull &
CO., 210 West
now
they are numerous and
is
inextricably bound up with the economic
horizon by congressional talk'
Seventh "Street, members of the
powerful enough to force im¬
factors. For in Jamaica the dis-loyal opposition
and action on foreign policy:
portant diplomatic revelations.
Los Angeles Stock Exchange.
He
is being unceasingly, flamboyantly, bitterly, and
(1) the U. S. is now ready to
Already the heat of congres¬
previously with Maxwell,
counter Russian expansion with
(worst of all).efficaciously, inflamed by a native was
sional tempers has melted the
individual
sometimes called the Island's, un¬ Marshall & Co,...»
economic retaliation;
(2)
the
"secret" seals from State De¬
crowned king, a dictator of the Italian MussoliniUvS. will not hesitate to by-pass
partment documents. And
Petrillo type, an ex-soldier of fortune descended
iithe United Nations when nar
there'll be more of that before
from an Irish father and a mulatto mother—one
tional interests so; dictate."
/
^
^ the Truman intervention plea
V
*
* :> *
William Alexander Clarke Bustamente. - ; > ■ ;
:r' ^/■
isOK'd. White House opponents
Adopted as a child by a Spaniard, Busta¬
One by-product ofj, shoving;our| are resolved to spread on the
mente?., took t his
name,
knocked around the
ramparts into Greece and Turkey
record for the public and posworld as a seaman, worked as a waiter at Har¬
will be some deterioration of the
terity the avowed intent of the
vard University, was a Cuban police inspector,
United Nations Organization. That'
President and his diplomats.
served as a Spanish army officer under ex-King
may be denied now but will be
A ■'
*
*
*
/;„■
A. Wilfred May
Alfonso XIII, won a quarter million dollars in
underlined by
subsequent hap¬
So remember — don't be too
-

he's

Holto"

f

•

-

.

>

-t

-

.

,

-

about, the

concerned

final tally. penings.
y,,';

will garner more votes
than he needs. But watch debate
Truman

details of our
dollars and nerves

for

dock

Inclined to Favor
Substantial Increases in Commission Rates

Association
its members
to sound out opinion on three different plans.
Issue will go before
Board of Governors of NYSE for its consideration at next policy

Agitation for rate revision stimulated by poll which
of Stock Exchange Firms has been conducting among

g;
'

meeting in two weeks.

;;

y-„

•

taken today among the members of the
the question of whether or not com; mission lates should be raised, the<^
Plan A, Plan B and Plan C, re¬
issue would
probably be decided
Plan C would leave
in favor of an increase because, spectively.

i

a vote were being
New/York Stock Exchange on

If

rates

though opinion is divided on the
matter; the advocates of an up¬
ward revision of the rates do seem
to

of

Board

week
to

ah in¬
the Board of Governors
to 'recommend

Thinking

.by a
Association of

has been stimulated

course,

the

which

poll

the question, of

on

Exchange Firms has

Stock

been

conducting among its own mem¬
bers to sound out opinion on the

proposition is stated
by the Association, the question

issue.

As the

is not

a

clear-cut issue of

whether

would like to see the
rates increased or not. The mem¬

the members
%

bers

are

three
described as

given a choice of

which

options

are

of 45,000 sugar workers, 40,000 small
and many thousands of commercial

workers,

is thought.
possible,, in-'

continually get their followers
"jurisdictional" brawls. 'V

on

speaking terms,

just a little, it

;

.

The Low

"When

,•}

St. Lawrence

■

from $1,000 to $5,000, Vz of
plus $10; over $5,000, 1/10 of
1% plus $30. These commissions,
it is estimated, would un the rates

HAnover 2-09M

ST., N. Y. 5

IX WILLIAM

NY 1-395

Bell Teletype

Montreal

New York

Toronto

-

IRANIAN STERLING
CHINESE STERLING

•;/

s/."::

■,;>

BOUGHT

are owned
policies en-

—

SOLD

F. BLEIBTREU &
79 Wall St.,

CO., Inc.

of

N. Y.

New York 5,

2-8681-2

Telephone HAnover

Brief Sketches

something like 27 or 21Vz%. Plan
B would follow this schedule: Up

,

HART SMITH & CO.

the mother
discontent. Nearly

;

Plan A; from
$1,000 to $2,000, Vz of 1% plus $10;
from $2,000 to $10,000, */4 of 1%
plus $15. These commissions would
up the rates about 24%.
Outside
of
New York City,
brokers are almost unanimous, it

to

$1,000,

:;

(Continued on page

Ten Public
Copies

t

Utility Common

available to dealers

1692)

Stocks

and bankers

Mexican

Issues

<.

Gulf Sulphur-

MAHER&HULSEBOSCH
Broken

& Co., Inc.

Street, New

Whitehall 4-4970

;y/

■

Canadian and

Philippine Mining

G. A. Saxton
.v

Specialists in

'

.

Domestic,

as

same

Rights
Illuminating Co. Com.*

York 5, N. Y.
Teletype NY

In

St.

..:

-

NY 1-2613

Hudson Eft.,

113

Y.

-Teletype

■„1

Branch Office ... vJersey City, N.

',,

...

Securities

New York 5, N.

;

Telephone
WHitehaU 4-2422

1-609

Dealers

A

Investment

62 William

distributed" 1

A

Electric Bond &

>

.)

(To be issued to holders of $5.50
but not derived from rights)
Prospectus on

"Stubs"

Share

•

Central Ohio

England Gas & Elec. Assn.

*

J

Tide Water

Pfd.

electrol inc.

kinney coastal

Light & Power

Gas &

Tennessee

,

MARKET PLACE
for

vulcan iron

Power

corp.
Mining &

*

*

Telephone; BArclay 7-5660




*

Teletype: NY 1-583

r

63

Wall Street,

■

c i

W&Sh1' •"

V/.

'41*? f

'

<

Iff,

;

New York 5.

Members Nai'l Wivef
i
.

N. Y. J

association
Bell Teletype

*

sr.y

p*

1

»s«t-

S«AHitie* Dealers, inc.

.WillftmMi'MrfW.aYi-'S

MLaRtgOPMJFTyfS^

Cltyr. A

NY 1-897;.,.i:

*

-i

security dealers

members n. y.

pfd.

Oil Stocks

gouietaStein

A CO., INC.

Established r 1888

york s, n. y.

Broadway, new

works
r.

western pac. r.

*

120

-

shore oil STANDARD THOMSON CORP.
south

,

Bought—Sold—Quoted

Corporation

;;

reiterrfoster oil

Transmission

FREDERIC H. HATCH

oil

monroe gasket

n

request,1

New York Hanseatic
...

& Ontario
Brothers

Price

1%

$5.50 Pfd.
New England Gas & Elec. Assn. Com.W. D.

New

"

Donnacona

Minnesota

into the bitterest

Economic State

The

U

Company

Consolidated Paper

North American Company

Cleveland Electric

.

Abitibi
Brown

----

ewtrade: in
-.fi-

y; '/
'

n

STOCKS & BONDS

farmers, 10,000
and industrial

economic set-up of this Island, unfortunately for
country, is over-ripe for the activating of native
till the large plantations raising sugar cane and bananas
on
a
dollar volume' basis. Thus,
by foreign companies or foreign individuals, with wage
Plan A, for instance, would fix
?
,v> (Continued on page 1668)
commissions on the; basis of the
following schedule: Dollar trans¬
actions up to $100, 6% commis¬
sion; from $100 to $1,000, 1% plus
We have prepared a brochure entitled
postulating, a

PAPER

returned to

In his

70 Pine

i

and finally

$5;

favor of an increase;;
y;

Wall Street speculations,
start the hard-boiled

to

,

opinion
among the members of the Ex¬
change generally, however, has
revealed a very strong feeling in
A survey of

of the NYSE.

pretty much as they are now

In

Exchange

/

1936

in

union's constitution one clause reads: "There
shall be a standing committee of one—the Life President [himself],
who shall have complete authority over the union and all expend¬
itures, and shall hold full power to hire and fire all emloyees."
In
1940 he founded the Jamaica Labor Party of which he is still Pres¬
ident, is Minister of Communications, a member of the Island's Exec¬
utive Council, and boasts that he is the de facto Prime Minister.
|
During a bitter strike of hospital workers last year, after being
hit on the head by a brick hurled by a hospitalized lunatic, Busta¬
mente was arrested on a charge of manslaughter in connection with
the killing of three of his opposition.
But incidents like this, in¬
cluding two jailings, have not materially slowed up his agitating
activities; subsequently evidenced in a severe railroad strike, in the
waterfront strikes of last July, and in the present battle to reduce
the $1.25 working day of the sugar workers from 11 to 8 hours. Prob¬
ably his most important remaining objective is nationalization of the
Island's vast tracts of land for distribution among the peasants. ; *
/
Paralleling trade union movements in other countries, Busta¬
mente has a rival in his first cousin, Norman Washington Manley,
a Rhodes Scholar, who leads the competing union affiliated with the
Left-Wing People's National Party. The two labor chiefs, not even

if anything, have the tendency
lower the commission on the

average

wil|fr be recalled; voted

Firms* It

crease

Stock

of

Association
last

to

majority.
Governors of the

decidedly in the

be

The

or,

/

/

employees.

Members of NYSE Believed

*

'

membership

(Continued on page 1665)

begin to take shape.

War Three

to ig¬
for

Chairman Eccles' plea

permanent consumer credit con-

World

military

the

for

pattern

nore

Gov*

becoming restive be-,

Congress continues

cause

the

•

Jamaica

Federal Reserve Board

against Rus¬

sian expansion. You may see

.;

"Bustamente Maritime
Union" and organize the backwoods and plantation sugar and banana
workers.
Today his "Bustamente Industrial Trade Union" has a

*

*

ernors are

of

war

new

/

'

,

w

vJ;

* II i.

it i.t'

*

H

IH

1^1- «■

THE COMMERCIAL & FINANCIAL CHRONICLE

.1650

Thursday, March 27, 1947?

N. Y. Mediation Board

J.

Kewburger, Loeb Co.
Dtawburger,
Broad

& Co., 15
York City,

Loeb
New

Street,

members of the New York Stock

Exchange and other exchanges,
are
opening a foreign bond de¬
partment under the direction of
J. Henry Davis.
Mr. Davis was
formerly with Ira Haupt & Co. '

BALTIMORE

Baltimore

j

By EDMOUR GERMAIN

Co.

Asserting there

b. Th^ New York State Medation Board has again intervened in the
dispute between the United Financial Employees, AFL, and A. M.
Kidder & Co. in an- attempt to avert the threatened strike but so far
without encouraging results. Though the Board called representatives

munism with Communism

neither arbitration

board increases any

of

moral and emotional surrender to

;

cites

1

across-the-

The

Bayway Terminal

involved

Julius Garfinckel & Co.
4'/2 %

Walt

Conv.

in

to

seems

of

Pfd.

Disney

issue—if

indeed

said there is but

one

the

hinge

it"

be

can

controversy-

upon

the question

across-the-board increase in

an

A week ago the main is¬
might have been said to be

wages.

Pfd.

sue

,

arbitration.

stein bros. & boyce
Members New York & Baltimore Stock

Exchanges and other leading exchanges
6

S. CALVERT

ST., BALTIMORE 2

Bell Teletype BA 393
New York Telephone BEctor

2-3327

be

the

ing

There appears now to

slightest suggestion in the

air that the

to!

union

scale

would be will¬

down

quite

consent to

its

considerably

would
an

if

the

across-the-board

demands

the

firm

principle of
increase

in

A. M. Kidder & Co., how¬
standing firm on its pre¬
viously stated position that it has
already granted merit raises and
wages.

ever, is

BOSTON

whatsoever.

major issue

The

B

interest

are

Prior

RR.

Preferred

with

occasion

like

this;

any

the

New

York

Stock

on

discussed in

it has

such power

use

thinks it has at these

or

Exchanges to exert influence

Bought—

Walter J. Connolly & Co.. Inc.
J

Offered only by prospectus—

Street, Boston 10

Tel. Hubbard 3790

THORNTON, MOHR & CO.
Telephone

didly

tion of contract upon both Ex¬
changes last Friday in accordance
with a provision in both contracts
giving them authorization to do

years,

in the event

so

a

controvery,

member firm

submit any dispute

with A.

re¬

with

a

M.

unsettled

Kidder

&

Co.

is still

then,

there isn't much
doubt the union will pull its mem¬
out

of A.

M.

Kidder

&

Co..

of

the

other

firms

Tide

Light Co.

an

The

•

Gruen Watch
Memos

argument

on

has

or

that day.

union's dispute with A.

MG

New

on

dom^ thatare bound up

free

a

One

econ¬

in Amer¬
ica, the symp¬
toms, causes

a

omy

and

New

IOWA

<t.

j<

elsewhere

of its

Dr.

Virgil

Philadelphia

York

1420 Walntit

Dealers in

ihV

'

of

Reasons for Confidence
COURTLAND ELLIOTT, C.B.E.*

By

Director, A. E. Ames & Co., Ltd., Toronto
Director, Canadian Chamber of Commerce

i

.

A

for debt service and

*

V

dollar, and holds its stability has

been assured by convertibility of
A U. S. dollars.
A;

Sterling and other currencies into

It

To

bond

a

me

Los Angeles

Bell System

Teletype: RH 83 & 84

always different from ordinary merchandise.
living thing reflecting in its changing
quotations the
ethical

RICHMOND, VIRGINIA

Street, Philadelphia 2

is

be regarded almost as a

can

CRAIGIE&CO.

of
■'
Exchange

Curb

h

F. W.

continuing

interest

ing to
air

Available
No

around

S

times

debt—Long dividend
Outlook

for

this

It

oc¬

ada

had

me,

and

a

Bell Tele. LS 186

V

Stix & Go.

record.

leader

in

509

street

olive:

ST.LouisI.MO.
Exchange

PH 30

Empire Southern Gas
Empire
Nazareth

Dan River Mills

Steel

Cement

Lynchburg, Va.

Tele. LY 83

LD 11

iiiiuiiiiiiiiiiiiiiiiiiiiiiiiiiiuiiiinn,




1

join

the

aspects of the

whether

\

place I imagine
some

wartime

comment

you

as

changes in

to

po¬

NORTHWEST MINING

SECURITIES
For Immediate Execution

of Orders

Quotes call TWX Sp-43 on Floor
of Exchange from 10:45 to 11:30
A.M., Pac. Std. Time: Sp-82 at

have

altered

the

ondly,

whether

sec¬

budgets are
conducive to willingness and abil¬
ity to meet our debts; and thirdly,
whether

there

our

is

an

important

transfer

problem in getting U. S.
dollars into your hands.

other hours.

Canadian
I

have

Byllesby & Company
Teletype
PH 73

Standard securities
CORPORATION
Members Standard Stock

-

Peyton

Dealers

-

stances
this

Connecticut

under very
from

in

that

1941
I

have

before.

It

different circum¬

those

Spring day.

prevailing^on
When I was in

way

here

up

at 121

was

to

Building, Spokane
Branches at

Kellogg, Idaho and Yakima, Wn.

address

fore

the

tion

of

by Mr. Elliott be¬

Savings Banks Associa¬
Connecticut, New Haven,

Conn., March 20, 1947.

The Ger¬
Yugoslavia

situation

the

and,

and

on

depths in

new

dollar

The

was

the way down

The Ca¬
control

1942.

under

approximately 10%

discount.

Today the official doD
lar is at par.
Canada external
4%' of 1960-50 had sold at 69 in

May 1940 and
at

92%.

with

away.

■

This

were

date

A'
was

mosphere
confidence

quoted

then

they are 108 %
only 3V2 years
''
'•:
A'A'A;

Today

the call

obviously hot an at¬
in which to" breathe
and

give

vent to un«?

bridled optimism. In my
at that time I outlined

remarks

a

in¬

the

herently unstable external
nomic
position of 'Canada

eco¬

over

40-year period, due > principally
our dependence updn a notori¬

ously fluctuating volume and value
foreign trade.I referred to

of

the

actual

riodic

and

crises

in

prospective
our,

pe¬

balance

of

international payments in that pe¬
riod
which
produced occasional
discounts

*An

Underwriters

year

Dow-Jones industrial average

to

Exchange

of Spokane

Brokers

in

Conditions

mentioned

a

knew.': for

looked dismal for the Allies.

basic

security of Canadian bonds;

fray.

invading

were

and quoted at

three

one

when I reached New York on the

nadian

survey

-

In the first

was

PHILADELPHIA OFFICE
Stock Exchange
Bldg. Phila. 2

Telephone
RIttenhouse 6-3717

would

of Canadi¬
and

for

war

no

certain whether the United States
mans

bonds

Canadian scene*.

been

&
*•

hold¬

litical, economic and social insti¬

Warner Company

H. M.

your

as

or

Sterling Motor Truck

5

Courtland Elliott

tutions

Botany Worsted Mills

Bassett Furniture Ind.

in

my¬

at

but

ers

will welcome
Members St. Louis Stock

N. Y. C.

American Box Board

Scott, Horner
Mason, Inc.

self

SECURITIES

SPOKANE. WASH.

American Furniture Co.

be, to

been

half

an

INVESTMENT

IllllllllllllllllllllUllllllllllllilimiiii
Trading Markets

morning

p'ace

COrtlandt 7-1202

LYNCHBURG

I

achieve

try to put

earnings.

1606 Walnut St.,
Philadelphia 3
to

purpose

would
;

boenning & co.
PEnnypacker 5-8200

use¬

this

\

Private Phone

.

most

April 8th, 1941, talk¬
insurance people, the

full of uncertainties. Can¬

to

therefore, that

ST. LOUIS

on

the

was

curred

Incorporated

Floor, Kentucky Home Life Bldg.

its

issuer.

building construction industry.

BANKERS BOND

of

could

Earnings
reported
by
Company total $5.68 per share.

Hartford

stance

.

in

1946

Co.

and

economic sub¬

Telephone 3-9137

and Lot Angeles

5

::V

;

GRiNNELL CORP.

Willett

LOUISVILLE 2, KENTUCKY

\

,

-

and in her continued ability to raise revenue necessary
general government purposes. Denies likeli¬

economy

;

ful

Excellent

Long Distance 238-9

-

stability
despite war sacrifices, and contends, barring abnormalities, ample
grounds exist for sustained confidence in his country's internal

■'

and

Conservative Management.

1st

Mining
Metallurgical Engineers, New
City, March 19, 1947.
A ;

thoughts

Private Wire System between

Girdler Corporation

™f

fore American Institute of

York

properly proud
these past 75 years

the

Varnish

is being
1669)

page

'; * An address by Dr. Jordan be¬

survival; and

&

American Air Filter

Reliance

world

on

hood of devaluation of Canadian

CAROLINA

Pittsburgh, Pai
Hagerstown, Md.
N. Y. Telephone—WHitehall 3-7253

Murphy Chair Company

the

Jordan

with pleasant and

' vv>.

NORTH and SOUTH

Member

Philadelphia, New York

Consider H.

in

(Continued

.

decline, a'n d
the conditions of its

J

VIRGINIA—WEST VIRGINIA

Company

New York

American Turf Ass'n

with it.

speak of it only with

now

of desperate urgency and

anxiety, for its destiny here and

conse¬

quences

can

sense

M.

Request

York,

Also

BUILDING

LOUISVILLE

freedom but of all the other free¬

RICHMOND, VA.

84

Lot Angeles Stock Exchanges

Bell Tele. DM184

America, not merely of economic

have menaced

industry. In fact, the union
(Continued on page 1699) " :

BUCKLEY BROTHERS
Members

Phone 4-7159

the

dangers that

■

Cotamoh Stock

9,

can¬

future, in

argument with the entire brok¬

Water Power Company

Stock

Meredith Publishing Co.

MOINES

the

the

on

MUNICIPAL BONDS

DES

consider

to

Exchanges and possibly out of

some

-

International Detrola Corp.

Continuing Interest in

EQUITABLE

a

erage

PHILADELPHIA

INCORPORATED

Preferred

forgotten all about it.
very
different task

'Tonight,

faces anyone who undertakes

Kidder

M.

Teletype

L. D.53

to bed and

I

as

Canadian banker recounts Canada's economic strength and

WHEELOCK & CUMMINS

Iowa Power &

detached

fashion,

professional society > you
probably have gone home

dozen

Montgomery, Alabama
&

guished
would

a

a

an

3-6696

have

ing for

■

Tele. BS 128

DES MOINES

celebrating in the life and
accomplishments of this distin¬
you are

I

Kidder & Co. has thus grown into

copies available

,

since

have been do¬

A.

"Street" with which it has

3.30%

upon

time

<$>-

'

_

served 30-day notices of cancella¬

the

bers

Sold—Quoted

Request

but

could

hpd

24 Federal

Ex¬

uments in order to

the
Circular

of carefully
Attacks dogma of unlimited

had

change and the New York Curb
Exchange despite any temptation
it may have to by-pass these doc¬
as

Contends

Russia

accuses

Ten months ago, when you innocently assigned me this
subject,
a
somewhat dry and academic sound, even for a dignified

it

possible da.y for deci¬
sion by the union. If the dispute

Maine

&

own
served best by adher¬

ing to the terms of the contracts

April 21

Lime Cola

Boston

'.'-A.

it to arbitration. This action makes

MONTGOMERY, ALA.

economy," and

union, feeling that its

fuses to

&

"mixed

a

planned conspiracy to sovietize world.
government and urges complete international disarmament, both
military and political.

consideration

'

Davis Coal & Coke

from of collectivism and

some

example Administration's reconversion policies.

as

have

we

business, and that it will give
nor

and deplores recent trends away from
Says there is evidence here of intellectual,

freedom.

economic

that it is unable to grant addition¬
al raises because of the condition

Arthur Meyer, Chairman of the
Board, himself has entered into
the picture ' to see what can be

economic

developments in Europe and our efforts to impose a political and :
economic system on other countries. Holds you cannot fight Com•%

;

meetings every day this week
date, the Board was still unable last night to report much progress
in hegotations. That the Board is^
using everything it has to effect a removed certain inequities in pay,
in the fact fhat

democracy without economic freedom,

no

!

of the union and the firrh to numerous

seen

be

can

| Dr. Jordan traces impact of socialistic and communistic

to

done.;;v-'i•;'•'

Transit

Economy

'

Pr&ident, National Industrial Conference Board

fV

settlement is

Issues

All

Mediating, So Far Without The Survival oi a Free
By VIRGIL JORDAN*
Success, in UFE-A. M. Kidder Dispute

on

the

Canadian

but virtually never

ception

of

the

Alberta

resulted in default

(Continued

dollar

(with the ex¬

on

episode)

the

on page

princi-

1691)a

j

.

4

J 65|

THE COMMERCIAL & FINANCIAL CHRONICLE

Number 4580

BTolume 163

Testing Our Foreign Policy
By JAMES P. WARBURG*

By THOMAS J. ANDERSON, JR.*

j

Professor Anderson holds

i

world affairs, Mr. Warburg points
take account of "world revolution"; and (2)
failure to realize implications of world government in United Nations idea. Says we are in danger of
following Soviet in pursuing dual policy which almost inevitably ends in war, and urges nation not
fritter away its strength by bucking tide of history." Says we should state frankly our purposes in
aiding Greece. Concludes only way to stop spread of totalitarianism is the counterforce of dynamic

Asserting nation does not realize its radically changed position in

outstanding problems to be faced in

concentration and misuse of union power in connection4 with (1)
union membership practices; (2) responsibility of union organiza¬
tions;

(3)

scope

of collective bargaining; (4) strikes; (5) picket-

boycotts; (7) union "trade barriers"; (8)

ing; (6) secondary

|

make-work rules; and (9) union restraints

commercial

on

democracy.

com¬

excessive union power from jeopardizing free enterprise, funda-

j mental rights of workers, competitive system, living standards
We are in a

labor relations

the

period of fundamental changes in the law affecting

in our economic system. Numerous states have
the

in

been

process^

Fed¬

the

Govern¬

ment may

add

materially

to

this

of

body

law in 1947.
The charac¬

submit

For instance:

broad aims:

the

that

United
has

the

States

economy

prise, freedom of contract, freedom
of
exchange, mobility of labor,

in

first, to destroy Ger¬

/

people,
fully understood what the

The fact is that we, as a
never

doing this not to say anything
might offend and alienate

learned in the

Warburg

James P.

without

quest could be frustrated
our
armed intervention.

the Italians.

we

war,

We might have two

which

the

During

,
J

morale; and second, to win war was about.
It took us some;
the friendship of the Italians.
If time to realize that Nazi Germany
we decided to pick, as a steppingand its Axis satellites had delib- '
stone towards the first, the under¬ erately
set out to conquer the
mining of Germany's confidence world.
Then we thought for a
in her allies, we had to be careful, time that Hitler's design of con¬

foreign

no

if,
meet, cir¬

man

considered

view

to

:
_____
—
would apply also to the selection radically our position in the world
of objectives under various aims. has changed since the war "ended.

of a free
policy at tne
they must not
present time.
interfere substantiallyv with the
Let me draw
system's
basic
characteristics. for a moment
Rather,
such organizations
and
upon personal
their practices must be reasonably
expef ience.
consistent with freedom of enter¬

enterprise

eral

this

In

feature

acceptable

an

that

'•

as

broader sense,

I

it

appears

policy, and not merely a series of improvisations to

they arise.

formulating ■continuation of sufficient freedom,
legal
stand- i flexibility, and competition to per¬
ards for labor mit such an economy to function.
If labor organizations are to be
organizations
now

of action is to be

course

cumstances

of

since 1943, and

/V'7'

,

achieve

public safety and welfare.

and

I

-

Foreign policy is not merely a course of action, but a course of action pursued
certain ends. These ends must be clearly seen and constantly held in view,

petition. Concludes many changes needed in labor law to prevent
j

in foreign policy planning as: (1) failure to

out gaps

formulation of national labor policy are contained in excessive
,V

i

Manhattan Company

Director and Former President, Bank of the

Associate Professor of Economics, New York University

Japan

When

entered the arena on the
Thus a consistent planned course side of Germany and attacked us,
of action would be evolved.
we had—I think—almost reached
the
conclusion
that
our
first
Planning a Peacetime Foreign
premise had been wrong and that
Policy
we would have to fight to prevent
Much the same sort of careful an Axis victory.
Be that as it
planning needs to be done in may, once we were booted into
peacetime foreign policy, if that the
war,
we
understood very
policy is to be effective. It is not clearly that we were up to our
We
being donefat the present tirpe. necks in a war of survival.
We have no clearly defined broad fought thiat war determinedly and
aims
and
hence
no
objectives well. But we never fully undercarefully selected to accomplish stood that we were also up to our
those
aims.
We have only
a necks in a world-wide revolution
course of action dictated by vague —not a revolution with any par-*

competition and other fundamental
p 1 a n n ing of
law
adopted features of this type of economic
psychological warfare, or propa¬
Moreover, if labor or¬
during
the system.
ganda policy, that, to be effective,
next few years ganizations are to assist in raising
Thos. J. Anderson, Jr.
our policy had to establish three
standards of living in general they,
will
be
a
things: First, certain broad aims;
must encourage rather than dis¬
major factor affecting the func¬
second, immediate objectives, or
tioning—and even the survival— courage the productivity of the concrete stepping stones, along
nation's labor.
of an economy of predominantly
the way toward these aims; and
The
problem
of establishing
free enterprise. Such is the case
finally, procedures or courses of
because monopolistic tendencies in proper legal standards for labor action
toward
the
accomplish¬
labor markets are among the more organizations today is not merely ment of the immediate objectives.
one of adopting rules of law which
fears
and
desires,
inconsistent ticular ideological label—but a
For example, if our broad aim
important forces threatening the
will cause them to be more re¬
was
to destroy German civilian objectives and changing circum¬ revolution of peoples throughout
stance.
[ > *An address by Professor An¬ sponsible and orderly institutions. morale, we might decide upon
the world against various forms
It is the problem, instead, of im¬
This is not primarily due to
derson before Mortgage Bankers
three immediate objectives such
of exploitation and oppression.
Conference at the Graduate School posing upon them lawful stand¬ as:
lack of vision and skill in \ high
ter

of

labor

of

Business, Administration,

New

ards

University, March 21, 1947.

York

of organization and conduct
(Continued on page 1678)

Our New Foreign Policy
By ALF M.

r

Former

'

LANDON*

/

for President

Republican Candidate

Administration's foreign poli- :
cies, former Republican Party leader holds nation has been on
wrong track. Voices approval of President Truman's request for
aid to Greece and Turkey and urges stiff attitude toward Russia
in blocking that nation's aggressions.
Lays down six planks to
constitute

strength,
I

cur

we

foreign policy and warns,

despite our

unsurpassed

British imperialistic policies.
policies of President Roosevelt on

should avoid following

opposed the prewar foreign

two grounds.
1.
so

-

They

~

they

led

aggressor

-

tators

lie

>

another angle—other
security—to our
foreign policies that we must con¬
sider. That is respect for treaties

but there is
than

that

the
dic¬
the

and

consider

might

would consider the

By the
token

inform

effort to

continuing

problems
Even
more, our present curious state of
mind is brought about by the fact
that we do not fully realize how

the

other ob¬
jectives-and reject them as for
the moment impractical, or not
sufficiently important, or incon¬
sistent
with
military plans or
security.
In
other words, we
We

.

of

people

faced by

about

the

their government.

War's Objectives

was

it

which

our

ent

will

to

United

forth
greatest promise, and to con¬

the

were

Kingdom 4%,

Need

ceiving
the
American peo¬

,

We

ple into war.
The Presi¬

;

"rt
*

v
*

.

v.:
'

,

>

■

».£■
;

V

British Securities
1

achievement of another.

..

opposed

policies

our•

on

-

the

The new

'V

cv

*An

the
New

consistency

by Mr. Warburg
College Conference of

address

before the

postwar ourselves to become a party to
ground promoting a world peace settle
ment, based on Power domination
that
they
were
an
attempt to
and the virtual enslavement by
build a super-structure for peaqe
Russia of formerly free and sov¬
without any foundation.V It is late, ereign European nations.
I.;have

J^5*An address by Mr. Landon bei-

present

situation by acting

of

principle

fore Men's Club of;Temple Emanuel,vWichita,-Kansas, March 19,

1947."v-




from this

world order

emerging

compromise, cannot be

Trust

Scopliony, Ltd.

Members
115

Y. Stock

Exchange and Other

Principal Exchanges

NEW YORK 6, N. Y.

BROADWAY

Telephone

Dept.

& Co.

Goodbody
N.

BArclay 7-0100

,

Teletype NY 1-672

/

Foreign Policy Association,
York City, March 22, 1947.

United States Government
State

Municipal

and

Railroad, Industrial

SEMINOLE OIL & GAS

Public Utility

^

^

Investment

,

A
Producing Company

PROSPECTUS ON

Stocks

R.W.Pressprich&Co.
\

!>,

Members

68

New York

Boston 10

York 5

Knowledge

•

Stock Exchotigft.

201 Devonshire St.

William St.

New

CORP.

BONDS

,

foreign

'

our

weak and fool¬
Alf M. Landon
dent's epochal
ish instead of wise and strong in
message to the
our foreign affairs.
-.
Our foreign
Congress
on
the Grecian and policy; in recent years has been
Turkish loans is not open to the a thing bent quickly to solve each
same basic criticisms. But some momentary crisis or a political
of his cabinet—the Secretary of the
campaign at home. We need some
Navy—are having difficulty fac- plain, simple guide,posts.
At
a
time when* -the^ United
ing >> up vto -: our: problems as a
whole.'} In a ;speech a few/ days States had reached an unprece¬
later saying that military aid only
dented position as a world power,
meant'four or five officers, Secand possessed of every means of
retary
Forrestal continued') the asserting its moral leadership, we
evasive and equivocal approach so
made practically no use of our in¬
comparable strength. We allowed
characteristic of the New Deal.
/•

,

created

have

Foreign

j

Gaumont-Britisli

action de¬
each objec¬
without allowing the action

Guide Posts to
Policy

strange

ranging dictatorships

1960-90

Rliodesian Selection

pitfalls.
The next step, having selected
the objectives, would be to go
through much the same process in

This

th$

(Continued on page 1686)

seemed to hold

tain the fewest

ward the

de¬

became

with

made

survival

of

it

Moreover, the

survival.

bedfellows,

hard to

was

because

entangled

hopelessly

war

war,

frontiers

national

countries./- It

of

civil

different forms in differ-

understand,

war

or

clearly because

accomplish

the German
and then pick those

war,

which

see

all

crossed

and took

aim of destroying

we

to

hard

'

they

revolution,

This

various means

might

by

ultimate end of their tive,
commitments. It is time we rec¬ taken in pursuit of one to become
ognized where internationalism of inconsistent with action taken to¬
the hallelujah brand brings us.

fight.
same

the course

about

caused to some

pension

of the war. /

affairs is the

ple would not

i;2.

loyalty

agreements-we are a party to.
courses of
The biggest lesson the American selecting
people have to learn in foreign signed to accomplish

American peo¬

~

own

and

be-

to

ve

our

truth

the

few

were

patty-cake

worded

extent by the sus¬
Presidential fireside
(3) To convince the German chats and the failiye of our pres¬
people that they were not being ent leadership to piake any serious

people's confidence in the
of Germany's allies; and

told

Recalling his previous opposition to
7.

•(1) To destroy the German places. It is due primarily to the
people's confidence in their air state of mind in which we, as a
force and anti-aircraft defense;
people, find ourselves at the pres¬
(2) To
destroy
the Germaft ent time. This state of mind is

Experience •
for Investors

regarded as stable or permanently
(Continued on page 1666)

Facilities

F. H.

KOLLER & CO., Inc.

Members N.
1X1

REQUEST

BROADWAY.

BArclay 7-0570

Dealers Ass'n
NEW YORK 6, N. Y.

Y. Security

'

t
s!;.

I

"

f

i

,

14552

THE COMMERCIAL & FINANCIAL CHRONICLE

.■ /

Stale

Legislation

on

World Bank Securities

America's Creditor Role
By JOHN ABBINK*

Chairman, National Foreign Trade Council, Inc.

Good Progress
WASHINGTON

New England Gas & Electric

v

Chronicle")

New England Gas & Electric Association, which last summer
failed to consummate its recapitalization and integration
plan, ex¬

pects

to effect the necessary financing next week to complete the
"alternate" plan approved by the SEC and the Federal
District, Court.
All present parent
company securities will be replaced by new is¬

sues—$22,425,000 20-year Collateral Trust Sinking Fund bonds, 77,625
Cumulative Convertible Preferred^
shares of beneficial interest ($100

allocation).

par); and 1,246,011 shares of
Cpmmon (par va^e $8).

will

The bonds will

r

be

new

offered

The

by

April

new

preferred

new

into

seven

statements

several

on

bases

(consolidated

figures

with

Maine

and

the

and
New

common shares, will be
made/at
about the same time by a group
headed by First Boston
Corp. (this
part of the financing is on a semi-

Hampshire subsidiaries^ and
association figures with
without).
In
1946, on the

negotiated

preliminary statements,

basis,

having been

First
of

one

several

forma

at

The old $5.50 Preferred will

eight
and

mon

shares

new

rights

for five additional
share.

per

to

If

of

of

tee

the

preferred

additional

ferable)

to

ditional

right

stock

this

at

of

•

arid

"times

preferred

new

earriA

sinking

irAiirements 5.88").

oAthe
in

variety

a

of

follows:

'

ways,

S. F..

H.

subsidiaries„_____

Requirement

1.26

..V.

$1.37

N.

H.

subsidiaries™,^-

H.

subsidiaries——™

$1.19

1.18

N,

1.12

the

shares at the

common

About 65%
are

earnings figure used.
New

England

(organized

as

teust) controls
Sipall
aries

Gas

•

-

lation

serving

te certain

areas

fifths

subsidi¬

and

ers.

some

later date

the

gale

or

may

be

disposed of

73

New

insurance

legislation

is

4y2£

per

of

kwh.
at

carried

depreciation

ally high ratio.

by

Plant

original

*

...

On the' whole, officials: of the
Sank feel that the
progress which
has been: made in
getting State

egislation has been all that could
been expected, and in some

lave

instances,

;

more.

.

Recently members of the Wis¬
Banking Commission,

reserve

Chairman has in the past

been very critical - of the
sugges¬
tion that State law be amended
for the

World Bank, were in this
city; but they did not call on the
World Bank...

even

alone

the

atom

it

flection

to

the

astonishment

our

nation

work while

own

broad

assumed

In

about

1946

6V2%

unusu¬

the

sys¬

on

ne

working capital),'it is estimated

corispicious exception to these

permission to

these

should
to

assurance

world of
went

the

our new

on

even

if

outside

up

funds

in

to. 10%
the

banks

of

their

in¬

to

of

constitute
of

our

World Bank to
It

been

was

pnroi,n<"*ed

appointed

not

for

of

Co.

Bausch & Lomb
Optical Co.

and

ounced

the

In¬

ternational
Bank

shortly]

Rockwell

„

Buckeye Steel Castings Co.

*€rowell-Collier

-v

Manufacturing Co.

^Tennessee Gas & Transmission
'•*

" U. S.
Potash

*Prospectus

on

;'A:'

KANSAS
K.

Clinger

The

Financial

now

will
; New

a

office

April

on

1947,

15,

in

the

Federal Re¬

Bank

serve

V,

'/

k.

^

Street,

charge of that office, assuming his
duties

Merrili

Mr.
of

'

f

;

John

J. McCloy, President
International Bank, stated

the

that

that date.

on

in

view

of

the

■

'

^

:

a

member

of Governors

Bankers

of the

Association

of America and

was Chairman of
he Municipal Securities Commit-

.of

ee

that

association.

Chairman of
draft

board

the
No.

He

was

New York City
48

from

1940

ta

1941. In

1943, he served as Assist¬
Director of the banking and

ant

investment

.;•■/;

•;

-

I

Municipal
York

a

Bond

and

.

member of the

Club

of

President

was

Club from

e

v.

Mr. Dunstan is

1936 to

the

Director
contact

Dunstan,
of Marketing, will be
with investing inter¬

New

of

that

1937, and is a

member of the Bond Club of New

York.

;

.«

•

-

.

/

-

/Mr.

Dunstan

President

in

has

been

Vice

charge of/the bon

ft

The

Bankers

this: month,

Trust

/

Company,

acted

bonds, the largest state

Co.

new york 6, n. y.

(Special to The Financial Chronicle)

O. Ballschmider has becotme
ciated with

;

asso¬

Co. /and,

prior

Vt

S.-Army^-was^a'portifel^^*^
department of the' Bankers Tru
Company' of 1 New York, where predecessor firni ofi ? Heranjnnus,
he has been associated since 1921
Ballschmider & - Co. V
:V Jf:
as

syn¬

dicateu manager for an? "issue o:!
$200,000,000 State of Michigan

&

.

SHEBOYGAN^ WIS,^Hichardl

throughout the country and
White, Weld-Co.,
charge of arrangements 231 South
La Salle Street, Chi¬
relating to the sale of the bank's
cago. • Mr. Ballschmider; was for¬
debentures.'.";*,.V \; ■ v'"N »' $"■;.|
merly an officer of Heronypnus &

early:

Common

'

With While, Weld Co.

in

Northern Indiana Public Service




as
■

Richard Ballschmider

as

1879

Chicmf

nvestment

Army
"

Mr. Dunstan has been
of the Board

the bank's activities. Mr.

New England Public Service/
Plain Pfds. " -r- '
*?//

to

S.

'

forthcoming

.

Direct Wir*

in the U.

lieutenant;

marketing of- the bank's deben¬
tures,* it is necessary to have a

ests

broadway,

he served

first

and

that Mr. Dun¬

F; Dunstan

will have

29

Bank

New York office to facilitate
work of this important

Request

J. POSTLEY

of New York has

International

division of the New
York State War Finance Commit-

Lynch, Pierce, Fenner &-Beane,
1003 Walnut Street. V;

&

ERT

Charge

tee.

phase oil

ESTABLISHED

of

Liberty

Chronicli)

with

showing the many
public funds laid out
loans, commitments, gifts and

in

to make

CITY,' MO.—Donald
is

the figures

billions

Building at 33

Merrill Lynch Adds

'

nation

as

the required initial
payments.

to

creditor

a

post-war experience was less
than encouraging when we looked

also

was

ann

the

to procedural
matters, such

(Special

as

Recon -<&-

that

asked by the Syrian
Government

Liberty Aircraft Products

Moreover,

vv

Marketing for the

struction

questions

name

'Rus¬

our

that E. Fleetwood Dunstan

Director

delay, pending
to

one

Open New York Office April 15

York

Fund

found

we

Worlds:

completely totalitarian

E. Fleetwood Dunstan to Be in

ment

the

reality,

Three

/-"/a

open

by

near

were

Board, Inc., New York, other forms of relief and assistY., March 20, 1947. /<:/■,.;:C/:.;5 .,J
(Continued on page 1690)

N.

Fund and Bank articles of
agree¬

reply

so

regime; and in between, large
wavering toward one or the
other. V.
^

ference

WASHINGTON (Special to thei

a

system

areas

at

Syria and the Fund

There has been

us

sian

borders,

were

stan will be in

Manufacturing

the

the

Development.

by Syria is expected

challenge

represented by our own free econ¬
omy system;, at the other extreme

*An address by Mr. Abbink be¬
fore the National Industrial Con¬

Institution.

of

to

of

there

interest in what

capital

"Chronicle")—Ratification

dare

came

our

some

war.

interna¬

rest

ourselves

we

did

we

other

one

a multitude of socialistic and
na¬
tionalistic experiments. Instead of
the One World which
seemed to

entirely certain of their meaning.
We had
risen, without aware-

.

State

where and in whose

Trading Markets in Common Stocks

on

political commitments and

felt

full

many,

attacks up¬
private com-,
petitive enterprise in the form of

giving
grudg¬

struggling out of the ruins of

we'

security. To

of

on

Abbink

generously, if somewhat
ingly; of aid to the less fortunate

tional

of

sense

various quarters
John

in

preeminence, ready to get

had

of bit¬

politically and economically. From

smug

secure

our

discovered that at least

power;

We

less

.

period

a

and

and

our

the im¬
even

growing disappointment,
damaging alike to our smugness

would'

were

world's

and

challenge
position

We

been

ter

na¬

widely

and

the

midway in the sec¬
the post-war era. Re¬
brings
the
realization

as-;

tions,

of

are now

that it has

or.

of

dare

We

was,

group

•

ond year of

bomb.

sumed,

role

generally understood.

se¬

nation

.

—

the

to

greatest creditor nation,
plications of which were

the

of

'/•

people at the end of the
United States.
No, other

the

ness,

re¬

possessed

cret

confirmatory actions is furnished
by the Ohio legislature, whi% by
an
overwhelming
vote,
refused

ac-.

is about

of

consin State

cost,

plant account (plus allowance for

*

Cali¬

our

average

31% of plant account—an

earned

New Jersey,
Massachusetts,
fornia and Washington..

ascendancy

It

is

tem

the

custom¬

rates

of

Mr. .Collado, recently
conferred with legislators—and in

vest

to

Executive .Director

Bank,

American
<$>

kwh, and annual

about 950

and

American

com

377,414,

most

distributed

gas

desired by .the World Bank
Pennsylvania—where the then

as

Bates

week

same

the

w e

No

,

companies but there is only one
insurance company in that State.

A
at

power requirements,

usage

stock

distribution.

2%

popu¬

electricity

some

count

to

Qt New Hampshire Gas &
Electric
and one or two other small sub¬

sidiaries

its

Residential

about

meet SEC objections it is
possible

tjfeat at

with

manufactures

water

gas

Massachusetts,

especially important,

of

and

Maine and New
Hampshire. The
business outside Massachusetts is

Spt

and

total

The system generates about
four-

large number of

in

the

March 15.

iampshire passed a law making
Bank obligations" eligible
:!or investment
by savings banks.
New Hampshire
has no
corre¬
sponding law covering insurance

whose
revenues

gas,

munities) is estimated

^England

electricity and

served

.96

.

The

(scattered through

Electric

to. medium-sized

on

World

.1.00

'

33%

heating.

110

V

f

of system

steam

,.V

i

,

&

New

a
a

•

electric,

an-

as

After S.P.

Requirement

■

subsidiaries

hpal rate of 800—a payout of 59%
to 84%, depending on the share

are

J-'.-.

H.

The prospectus indicates
an in¬
tention to inaugurate dividends

Earn¬

shares

common

and

op

During

the

before

and

Maine

Maryland

world

U. S. to

"

and

with

Association,

excluding

in

boast of

return of

a

in midst of world struggle with

■

,

could

sources

our

stated

to

N.

Governor Dewey awaiting his sig¬
nature. A similar bill became law

•

[

of protection to Ameri-

assurance

we are

on

strength;

in

eqnsolidated, excluding Maine
Association, including Maine

and

a

insurance

companies to invest:in direct and
guaranteed
obligations
of
the
World Bank.
It is how before

match

still

^Before

N.

(The
on

authorizing

on

parent

v

and

charges and preferred

bill

action

earth

earned

ings

V

,•

eqnsolidated, including Maine

over-all

ratios

he

completed

the

was

country

Says

-/.-V,

The proudest

"times

'>

'

egislature

Communism.

war

more

property and rights abroad and advocates

gold coin standard.

basis,

fund

ad¬

(subject

expected success of the first flo¬
tations will stimulate action
by
other State Legislatures whose co¬
operation is desired.

State

dividends

(non-trans¬

$9

market

among institutional investors. The

pro

these

coverage

and

gives the

decent

can

fixed " charges

3.94,"

enjoy

buy 20 shares

•/:

„!

will

in

charges works out
times

fairly

a

procedures. Sees need for

as¬

company,

sfcock is not subscribed for, holdess

2.87

of

different-

shares

some

about

prospectus

subscribe

sured

and

divident requirements at 2.18

com¬

common

reflected

as

coverage of

re¬

will in addition receive

transferable

$9

of

basis

of total system

com¬

petitive bidders last summer).
ceive

par¬

ent

Boston

obligations of the Bank will be

"red

without

unsubscribed balance of

icials feel that with recent legisin several States the first

This month the New York State

herring" prospectus
(which is subject to change) pre¬
ings

of-

ation

common.

sents voluminous pro forma earn¬

2. Offering of the preferred,

any

The

convertible

shares of

competitive bidding on March 31
With probable retail offering (sub¬
ject to the usual SEC clearance)

plus

be

Bank

i

Asserting foreign demand for U. S. funds will strain resources of
nation if job is
accomplished; Mr. Abbink advocates Government
and business cooperate for
purpose of clarifying needs and
defining

(Special to the

World

—

Thursday, March 27, 194J

cipal

issue

Dunstant
He

was

North

and

ever v

directed
born

muni¬
Mr

the operation

in. Elizabeth

Carolina,

was

or

marketed.

City

June- 25, 1096
graduatedv from Duke
on

University in 1919; In World War

he

with

was

Harr ima it; Ripley -

Co. in Chicago;

3

•:

;;

&

;*

With Coffin & Burr, Inc.
!..

(Special to The Financtal Ohroniclk)

; BOSTON,

Harding

MASS.—William

••

G,

has > become it affiliated

with Coffm &

Street.

.

'

Burr, Inc., 60 State
J

-

t.

-r'

-Number 4580

Volume 163

THE COMMERCIAL & FINANCIAL CHRONICLE

! fen.
Annual Report of 1946, President of N. Y. S. E., says Federal
Board's action, in virtually depriving listed securities of
their loan value, impaired their marketability and stability. Reports
decline in net earnings of -Exchange despite income increase in
1946.
Lists continued rise in capital investment accounts and an
In

Acting Secretary of State describes crucial needs of Greece.

Reserve

Johnson Wants
Loan to Greece to Be

British Government will direct

for advertising in 1946 almost double that of previous

outgo

year.

in

■

addition toi>

data

finan-

plained.
Federal

the

operation

pointed out that the board's

of

the

Ex¬

change and its
affiliated

com-

panies, dis¬

The

Chairman

Reserve

the

Truman's

has

quest

au¬

of

Board

of

field of listed securities, which is
true.
But the board was under

in

compulsion

to

exercise

and

ef¬

the

powers; and certainly there was
no occasion for it to
do so since

peated

Re¬

Congress had in mind, in putting

of

restric¬

credit controls in the hands of the

ments

Federal

Board, that the
authority was to be used to pre¬
vent the diversion of a dispro¬

he

Exchange

portionate volumeoCtfo^ country's
credit resources into the carrying

with

of

on

gin

mar¬

trading

and

the

rela¬

tions Vof.
Emil Schranr
v

-

^

the

the

Se-

curitiesc and

■

Exchanges Commission. *

Reserve

securities. 7 No

had

such

when

appeared

the

,

1946

was

slightly larger .than in

3945, .there were indications that
the qualities of marketability, con¬
tinuity and stability were further

which

!'

20

impaired and this served to bring spective*. fields of ^industry; are
into question, the advisability of securities which have, generally
the Federal Reserve Board's ac¬ speaking,
the greatest , intrinsic
tion, in January of last year, in values and whose prices and mar¬
virtually depriving listed securi¬
ties of their loan value, for ■ all

relief

this

be

3

Dean G. Acheson

as

un-,- ->•

■.

King a
political ..loan

a

Turkish

we

a

publicly

are

is

/

not
available, the; needs of
Ernest K. Newman and William D..
Turkey for assistance are greatly
Wright are now with Slayton &
increased.-' *
;v:
/
This then is the situation with Co., Inc., 15 West 10th Street.' :
.

which *rwe

have

and

Turkey

]

(Continued

deal.

to

-

Greece
SCHENLEY DISTILLERS CORPORATION

in urgent need ol

are

NOTE—From time to time, in this space,

on page

1684)

there will

fellow

series,\
.

"Higher Lesson"
*

/

seek indirect assistance in freeing blocked sterling
Portugal only country with
currency convertible on multilateral basis.
Impasse between Britishers' inability to pay off sterling balances, and unwillingness of
But Britain

,

0 their

office wall of
here at

(Special

"Chronicle")

the

to

—

Despite

Unite d<3>

eroded away." Upholds
and veins of an economic

matic

W

j

in

a s

hi

gton

n

blocked

expects V ster¬

T

will

ling

or

other indirect assistance

procuring

sterling

!V:

ible
15

I

;

Latterly Britain has effected re¬
July vision of bilateral monetary agree¬

on

called

as

colleagues

reprint of

a

jug at Bob Cratchit's
Christmas dinner", in "Christmas

few
read¬
ers there are, no doubt, many who
have.. received much enjoyment
from reading Dickens. This is what

sentences because among our

made convert¬

deeply appreciate the honor which the Board of Governors of s
the New York Curb Exchange extended to me last December and the
<$——* : • /.'
,:,.....7warm
weiI

a

Carol", We're going to quote a

of the
balances
with

settlement

Britain's wartime creditors.

be

our

stuff in the

:

——

Kingdom,

freedom "like solid land can be

of

lady had objected to "the warm

trial

balloons and rumors, attendant upon this winter's economic crisis in

,the

one

Schenley is

reply bearing the caption, "Higher
Lesson", .written by Charles
Dickens to a London lady. The

to cancel or leave them indefinitely impounded.

owners

WASHINGTON

By MARK MERIT j;

:

Nicely framed and hanging on the

may

balances with her wartime creditors.

TRUSLOW*

individual freedom."

advertisement which

appear an

-

President, New York Curb Exchange

system that supports

-

Chronicle)

LOUIS, MO.—Loren Ligon,;

SCHENLEY DISTILLERS CORP

/Newly elected Curb Exchange executive points out close tie of all
exchanges to individual freedom and maintenance of free markets.
Warns of decline of freedom in all parts of world and danger that
own

v

*

hope will be of interest to our
Americans. This is number 162 of a

:

security business as "heart, arteries

loan."

we

Exchanges and Free Enterprise

our

In other words

(Special to The Financial

ST.

By HERBERT M. BRATTER

V;...

a

,

Now With Slayton & Co.

Since British^aid

practical market purposes, t v
"Just why this action was taken companies' financial affairs, upon
has never been 7 satisfactorily ex- ;t.Vv (Continued on page 1675) ■

By FRANCIS ADAMS

do, make

V
.'
British
loans

loan it should be

first mortgage

but this government has not had
i the
facilities for responding- to-

requests.

•

over

if

various occasions1 applied to the
United States for -financial aid,

those

V

heretofore made.

has

Government

Sen. E. C.Johnson

certainly

precedence

on

Within

Turkey.

Greek

* the
Greek Govern¬
if Greece is to survive
free nation.

I; The

which it has been giving to

Greece*; and

an

known daily,
and in connection with which the
most data are available as to the

kets

gilt
o w-

ever, if we do
make
the

from

received

we

a

H

on

basis.

-

March

should

it should take

the British Government would be

ance

Turkey.

On

the

nature of food

most

for

■

outstanding in their re

help'. in

ment says,

by arid obliged to discontinue the- finan¬
large,,the securities of companies cial, economic and advisory assist¬
are

that

recommended

•

Greece

imperative,

JJouse

•

Whatever

urgent
appeal for financial, economic and
expert assistance.
Assistance is

to

securities exchanges are,,
which

and

the Greek Government

derstanding of the situation, fur¬

registered and listed on national

On

take.

and

nished the following statement to
■Regarding the adverse effect of ket—the <\ best regulated in; - the
the Senate Committee:
'
margin restrictions -on r Ex¬ ^wor4d^^n--a;.«8d»jbaBiR:.
change
activities, *! Mr. -> Schram '"As I have^pointacLmit to Mr.
-On February -24, the British
stated: :;■■;r'i
;^ :v-V ■;,
■'• Marriner Ecclesr„Chairman of the Ambassador, in a note dated Feb¬
.' "Although the volume of busi¬ Board of Governors of the Federal ruary 21, informed the Depart¬
Reserve
ness in stocks on the Exchange in
System, ■ the
securities ment of State that as of March 31

the

should

gov¬
March

government extend aid to Greece

tee, .and
the better

board

which the

argu¬

March

demands

tion

made j on

the

placed the Stock Exchange mark-

\

re¬

the

States

political or
military loan

to

the President informed Con¬
gress and the nation of the situa¬

Foreign Af¬
fairs Commit¬

tions

has

statement to

a

the

on

many

the

United

14,

the

Acheson

with

action

of

ernment

Mr.

of

serve

them

advised

course

cusses

following

"I earnestly

this situation

i d,o f

Turkey.

its

the

does not make

gressional leads of

$400,000,000
a

Ed¬

Johnson of California

hope that

week the President informed Con¬

an

fects

Federal

made

<g>-

Greece and

,

C.

the "Chronicle":

appropriation

thority is confined to the limited

no

win

requested.

re¬

for;

Mortgage

WASHINGTON —Senator

I

obligation to give similar assist-;

no

of President

results of

First

Acting Secretary of State Dean Acheson appeared on March 24
before the Senate
Foreign Relations Committee to testify in support

—

rial

on

other nations if

to

ance

Emil Schram, President of the New York Stock Exchange re¬
leased the text of his Annual Report for the year 1946. The report,
.

furnish aid and there will be

to

•

,

Denies

policies of Greek Government while
U. S. supplies economic aid, and asserts we have no commitment
to assume British
obligations. Holds United Nations not in position

ments with certain Western Euro¬

he wrote:

/

'

\

■

the

c o m e

members have

given

to¬

me

night. The re¬

sponsibility of
the
office
which
has

from

passed
is

ex¬

with
comprehen¬
sive simplicity
Consti¬

tution

of the
Exchange
which merely

Also
Francis A. Truslow

says that "The
President shall

the

have

©11 the interests of the

care

of

Exchange."

and the work of
have been devoted to
creation
of
those interests

the
i;
7

,

(Continued on page 1687)
*An

a

which I have been asked to care
for. No one could list the names

along with those excellent persons in

have

been Belgium, Netherlands
Portugal.
Similar arrange¬

confounding the. use of *anything
with its abuse, or in denying any

The

and

ments

of understand¬

are

concerned

in

to be effected soon with

.7-';

other countries.

principal

:

;

i

'

:

r

,

Heretofore countries which had

holders of the
Herbert M. Bratter

bilateral monetary agreements

called

with the UK could use their ster¬

sterl¬

ling balances only within the ster¬
ling area, with some minor excep¬

so

-

blocked

/

ing balances, however, is making
almost

no

British

press

progress,

to judge by

tions:
three

reports from India,

Egypt and Iraq. It is thought that
Britain may seek American diplo-

Now

sterling held by the

countries

becomes

convertible

(Continued

in

named

on page

effect

into

1698)

address by Mr.

dinner given

New
York

/

.

We

pleased to- announce the installation of a

are

-V-DIRECT

the

Curb

'

■

-

-

.

J to

,

our

New York Correspondent

-w > FRANCIS I. DU
Members New

,

IN

UNLISTED

SECURITIES

7

<

PONT & CO.

and

Underwriters

TELEPHONE,

PLACE

WHITEHALL 4-6830




Christmas dinner had

a

very pleasant

the simple party . . . Dear
madam, there are two sides to this

effect

on

[prohibition] of the

use

of

refreshments leads to their abuse

in

striking

a

manner.

But X would
teach

people to use such goods of life
cheerfully and thankfully, and not
is the

them. 1

am

not sure but this

higher lesson, and that the

principle will last the longer in the
latter ages of the world".
•

Schenley
unquestionably,
other lawful distiller in

Distributors

—and, almost
every

America favor
use

Securities

moderation in the

of all types

of alcoholic beve-..

We have said this before
and it is worth saying again.

rages.

20S So. La

Chicago 4, 111.

Salle St.

.

.

.

-i

i

■*'

Members

NEWYORK^,:ft,Y.R
-TELETYPE

Tel.

Randolph 4068

FREE

Chicago Board of Trade

Chicago Stock Exchange
EXCHANGE

stuff in the jug at Bob Cratchit's

Apropos of which, we, at

■■

40

.

the

*

York Stock Exchange

of Investment

BUSINESS

.

doubt whatever that the warm

to abuse
>

COMPANY

TRANSACT A GENERAL

no

endeavor, in my poor way, to

PRIVATE WIRE

FRED W. FAIRMAN & CO.

TO

.

have

FORMATION OF C*

EDWARD S: LADIN

enjoyment of a glass

beer, or spirits and
water, because his neighbor is prone
to make a beast of himself by irra<
tional excess in those things
I

these

,

THE

go

of wine;*or

how the

Truslow at

by members of

the cheerful

man

reasonable,

question. If 1 were so disposed 1
show, X believe, where and

!

Exchange, New
City, March 20, 1947. •
;

York

any

I have of what is

as

could

;

ANNOUNCING

this

ings with the

-

-

countries

achievement

that list are the

•

men

•

The

ment.

-

high on

V1 cannot, with such perceptions

pean

employees of the Exchange who
have given to it a degree of serv¬
ice far beyond the call of employ-

years

many

Werle.

Edward

countries as a step toward
general convertibility of Sterling.

by the An¬
glo-American
Loan Agree¬

who

presidents
—John McCormack; Edward McCormick; John Curtis; David Page;
William Muller; Howard Sykes;
Burd Grubb; Fred Moffatt; Clar¬
ence Bettman; Edwin Posner and

pressed

in the

all those

affairs to serve as your

Mr. Posner to
me

for

contributed to
the long development of the Curb
and helped ..place it in the high
position it holds today; but some
of them are here tonight.
Out¬
standing on that list would be the
members of the Exchange who
have given time from their own

of

!

Teletype CG 587

—96-PAGE BOOK— Send

a

postcard or letter to mark merit of
schenley distillers corp., Der>t.
ISA, 350 Fifth Ave., N. Y. I. and you will
receive a 96-page t»ok containing reprints of

earlier

articles

on

various subtests.

\
/

THE COMMERCIAL fc FINANCIAL CHRONICLE

1654

*

1

:\

Thursday/' March 27/1947

<»'

i

oi
Francis I. d« Pont Co.
•'<

CHICAGO, ILL.—'Fred W. Fair& Co., 208 South La Salle
Street, members of the Chicago
Stock
Exchange, announce the
installation
of
a
direct private
wire to their New- correspondent,
Francis I. du Pont & Co., mem¬
man

bers

New

the

of

Stock

York

Exchange.

!

V

PHILADELPHIA,

PA.—Sheri¬
Co., 1616 Walnut

dan, Bogan &
Street, members of the Philadel¬
phia Stock Exchange, announce

likely

very

dent

healthy

a

t h e

of

:
the views of Lee Thompson Smith, Presi¬
*

*$>-

v

.

Lawyers Title

•Corp.,

of

the
given
on

issue,
wide

Noyes,
600
buildings with 6,000 tenants, feels
very differently about it. As Mr.
Noyes himself states the proposi¬
tion—and here we are practically
quoting the very words of Mr.
Noyes—he disagrees with those

in¬

terest

t h

in

e

question, it is

of

James

DeV.
sales

Elliott

F.

Ross

as

and

Prentiss

members

organization.

their

of

-

-

his

was

tion

the

building
in Man¬

space

hattan, if

be a demand for years to come for
desirable space

con¬

With Paine, Webber Staff

tinued

(Special to The Financial Chronicle)

present

result

BOSTON, MASS.—Albert Pratt
has

been

added

the

to

staff

of

its
Charles F. Noyes

;f

It

■■■",>>f.f

only in a glut of business quarters.
As a warning to builders and in¬
vestors, he pointed out that since

Paine, Webber, Jackson & Curtis,
24 Federal Street, members of the
1925 more than $80,000,000 in taxes
New York Stock Exchange and
has been paid by 330 of these com¬
other leading Exchanges. *
mercial properties on vacant office
space.v He did indicate, however,
been

(Special to The Financial Chronicle)

Johnson

MASS. —William

has

become

with Mann &

1943

surplus space has
practically non-existent in
these same buildings. The thoughts

Joins Mann & Could
SALEM,

since

that

A.

connected

Gould, 70 Washing¬

ton Street, members of the Boston
Stock Exchange.
' y :'
,,

in desirable neigh¬

borhoods.

pace,

could

at

SECURITY

ASSOCIATION

TRADERS

from^any

Executives

corporations and banking institutions in
Cleveland and Northern Ohio will be present when the 11th
annual
dinner

of

the

Cleveland

Security
Mid-Day Club March 28. /

the

Traders

is

held

Heading the list Of Speakers Will be Dr. Neil H. Jacoby, Vicej :
President and professor of finance at the University of
Chicago and r;
perhaps better known for his participation in the university's Round
Table of the Air radio .program.
His subject is: "Economic Prob- j '
lems hnd Prospects for 1947." "
t
/
^\ '
Jay L. Quigley of Quigley & Co., President of the Association, V
said

guests representing the National Security Traders Association
;
presidents of affiliated chapters are expected to attend the

and

dinner.

•

•

Guests to

_.*•'

attend

//'• "

•

include

'

■

.

.

.

•

.

~

•

R. Victor

expressed by Mr. Smith

prob¬

are

ably typical of the views shared by
those who feel that great caution
should be exercised in arriving at

'

,

is just possible that the

;

■

;

ad¬

ing their respective affiliated groups will be Michael/J..
Heaney,
McManus & Co., President of the Security Traders Association
of
New York; Lawrence N. Marr, E. H. Rollins &
Sons.; Inc. President
Of the Bond Traders

Burgess Battery Co. Com.
Ft.

Chicago; Harold R. Chapel, McDonaldNoyes Moore & Co., President of the Security Traders Association of
Detroit
'differ so widely in their views be¬ and
Michigan; Franklin O. Loveland, Jr., Field, Richards &
Co.,
cause they may be talking about
President of the Cincinnati Stock and Bond
Club, and, from Canada,
different things. The caution boys 'C; W.
McBride, Midland Securities, Limited, President of the Toronto
are
undoubtedly thinking about Bond Traders Association.
//'V -Vwhole

market

*

Noyes Seems to be thinking mostly
about
properties / in
desirable
neighborhoods.- Mr. Noyes thus
to

seems

be

interested

chiefly in

improving the tone of real estate
properties because, as he makes
clear, he is convinced there

T.

tremendous demand

a

~

y/l

Horsfield, Wm. J. Mericka & Co., New York City, Chairthe Publicity Committee 'for National
Se6urity Traders As-1
,

sociation

the

announces

following members:

V'

-

•

■

John L.

Shea, Jr., Shea & Co., Boston
- '
Meyer, Foster & Marshall, Seattle.
■'<
£
Hall, Clair S. Hall & Co., Cincinnati.
Howard C. Morton, McMaster Hutchinson &
Co., Chicago.
Mel M. Taylor, Semple, Jacobs
&.-Co„;St. Louis.
Thomas J. Eupor, Cruttenden &
Co., Los Angeles.
'
< '
Alfred F. Tisch, Fitzgerald &
Co., New York.
\

'

t

I'

Clair S.

for that

;

SECURITY TRADERS ASSOCIATION

r;

on

OF

V'.-y-:/dr'

Busby, Van Tuyl & Abbe. '
/ !
Thomas A. D. Canova,
Schroeder., Rockefeller & Co., Inc.
William L. Fleckner, Merrill
Lynch, Pierce/ Fenner & Beane.
"
Thomas P. Gill, Gill &
Company.
1
'
*
Walter L. Heckroth, Burr &
Co., Inc.
- 1
.

By MORRIS A. SCHAPIRO*

i

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

'

..

-

Corporation

.

specialist, after reviewing 1946 earnings of New York
banks, predicts decline in earnings of 14% for current year. Holds

Almon L.

banks will require

higher rates on loans to offset mounting operat¬
ing costs and taxes, and ascribes present low rates on commercial
loans to Treasury's interest Tate pattern. Warns
government bank¬

,

Hutchinson, Buckley Brothers.
;
Joseph A. Mitchell, Homer O'Connell &
Co., Inc.
Giles Montanye, Cowen & Co.
;
;.

.

•

-

William. R.

y

Mulholland, McLaughlin, Reuss &

;V. Barney Nieman, Carl. Marks &
Co., Inc.
:
Zoltan Salkay, Gearhart & Co., Inc.

Co,

' *

If:

:

'

Edward V.

^

ing and fiscal agencies not to restrict sound functioning of com¬
banking and urges banks increase efficiency and economy.

;

mercial

available

request

Stryker, Moore, Leonard & Lynch.
William J. Swords, Newburger &
Hano,

J

Lamar K.

Tuzo, Union Securities Corp.
Francis H. Welch, R. S. Dickson & Go.
Vv:

Investing institutions throughout the country are always inter¬
earning .prospects of New York City banks. There is no

ested in the

COMSTOCK & CO.
CHICAGO 4

greater

concentration,

of

stock ownership than is found

in

New York City Has 27%

Dearborn 1501

Teletype CG 955

New

England

among

Colorado

savings

Milling & Elev., Com.

•National

Tank

Co., Com.

banks,

panies,

endowment

mutual

insurance

We shall
way

hattan Island have total resources
of

gen¬

a

current

earnings and consider the present

Common

Man¬

on

com¬

try to outline in

.the pattern of

The 37 member banks

other

and

funds..-\r>\■
eral

Central Steel & Wire Co.,

its

Nation's

Bank Capital

>

231 So. La Salle St.

$27 billion.

Reserve

All

member

other Federa

banks

in

the

United

States, 6,863 in, number
have combined assets of $100 bil¬
lion.
The 37
banks have tota
capital

accounts

Available

on

Request,

ymi H.Davis & Co.
Established

1916

Members Principal

Chicago

Stock Exchanges
Board of Trade >.

10 So. La Salle St., Chicago 3
Tel. Franklin 8622

York City bank stocks, identifying

$2.2 billion
The 6,863 banks have $5.9 billion.
Banking capital in New York City

represents over 27%

investment

III.

of

the

elements not how

view, but which

appear

,

New

in

full

likely to

gain in importance and affect the
future value of these securities.

"An

Teletype CG 405

Indianapolis, Ind.
•
Rockford,
Cleveland, Ohio

position

before

address
the

ciation

by

Mr.

Savings Banks' Assoof

Connecticut,

New

Haven, Conn., March 20, 1947.

of the

A. Morse Is
Opening
Dept. Under Doehling: With J. G. White Co.
To

render

.

greater

service

J.

as

brokers and dealers in investment
securities for banks and insurance

that

opening

on

partment under

the

Bond

De¬

years and
don

the

was

"Street"

for

These

shares

hundreds
tors.

of

Using

are

recently with Gor¬

With

thousands

f

With Bear Stearns & Co.

of

(Special to The Financial Chronicle)

inves¬

bank

CHICAGO,

ILL.

—

Robert

s^ock

Shields

has

quotations, this property standing

staff of

Bear, Stearns & Co.,

current

(Continued

•

on page

been

added

'

to

.

1

135

Financial

ANGELES,

Uhroniclej

Listed

NORTHERN STATES POWER CO.
6% & 7% Pfds.

on

the

618 South
of

the

Spring Street, members

Los

Angeles

Stock;
;

;

STOCK

Chicago Stock Exchange

Your Inquiries Invited!

5Y2's of '52
Recent Review

on

Request

208 SOUTH LA SALLE

ST.

CHICAGO 4, ILLINOIS
Telephone Randolph 4068
Direct Private Wire to New
York
Bell System CG 837




H. M.
.

.

Byllesby and Company
Incorporated

135 So. La Salle
Street, Chicago 3
Telephone State 8711
'Teletype CG 273
New York

;

Philadelphia

Pittsburgh -

Minneapolis

.

Members:

Chicago

Stock

'

225 EAST MASON ST.
„

I

-^PHONES—Daljr 5392

J—

Exchange

MILWAUKEE (2)

Chicago: State 0933
-.—'i -P

*•

Y. Clifford Tanaka has
joined, the
staff of

Wisconsin Bankshares
Com.

f

CALIF.—

change.

CAPITAL

Utility

LOS

The

r

rWe Maintain Active Markets in

CHICAGO SO. SHORE & SO. BEND RR

to

Edgerton, Wykoff & Co.,

F.

the

South La Salle Street.

1689)

Edgerton, Wykoff

(Special

widely held by

f

25

Graves & Co.

DEEP ROCK OIL CORP. Common

Central Public

Morse, formerly with Harvey

nicipal Department,

Doehling. Mr. Doehling
in

been

Company,. In¬
Wall Street, New

sociated with the firm in the Mu¬

management

has

37

.

&

Fisk & Sons,
Inc., has become as¬

Auril 1, 1947 it is

Municipal

a

A.

an¬

of John P.

White

York City, announces that Robert

companies, Kobbe & Co., Inc., 55

Liberty Street, New York City,

G.

corporated,

Ownership of the 37 New York

SINCE 1908

FredJ.FairmanCo.

$8.1

billion total for all member banks
in the>United States.

City banks is represented by over
35 million shares of capital stock.

Schapiro

Kobbe & Go.

nounces

of

certain

•Seismograph Service Corp.,Com.
•Prospectus

'

*

NEW YORK
i
/
Security Traders Association of New York,
Inc., announces
the following elections to
Membership:
;

Bank stock

Trailmobile Company

-

"

s

Oil Exploration Co. Com.

analysis

V
-

k

Manufacturing Co.

*Detailed

v

.

r

The

Alfred W.

Inc.

Lorng-Bell Lumber Company

Old Ben Coal

I

-

.

,

Donald A.

(Continued under "Real Estate
Securities," page 1658)

Earnings Prospects of

Hydraulic Press Mfg. Co.

"Miller

*

G.

of

man

very

is

'I/-

NSTA PUBLICITY COMMITTEE

:

Kropp Forge Co. Com.
*

.

,

Mr.

whereas

Wayne Corrugated Paper
Industries,

~

,

the

Holeproof Hosiery Co.
Howard

-

Club of

vocates of caution and Mr.

-

Chgo. Auro. & Elgin Ry. Units

-

in

V

*

,

..

Association

Mosle.y, Stroud & Co., Inc., i ::
Philadelphia/President of the National Security Traders Association; 1
who feel it would be a mistake to Paul
Yarrow, Clement, Curtis & Co., Chicago, First Vice-President;
erect new buildings becausf defi-; Paul I. Moreland, Moreland &
Co,] Detroit, Second Vice-President;
and Edward H. Welch, Sincere &
nitely there is a demand and will
Co., Chicago, Secretary. Represent-v

erection of of¬
fice

:.f:

It

posi¬

that

F.

Charles

whose company operates Over

con¬

siderable

structures

this type.

-However,

publicity,

aroused

CLEVELAND

„

decisions to put up new

understood.

of their
Municipal Bond Department and

/

:

one.

few weeks ago

a

the association with them of Wil¬

manager

y

'of the market
require the construction of any significant number of new commercial
buildings of immense size, either at this time or at any time within
the foreseeable future. ' There is a difference of opinion on the matter

liam W. Jones

as

now

are

Not all the real estate experts agree that the needs

Just

Manage Dept.
Bogan

such structures

and will continue in demand for many years.

and

Jones to

Realtor says

Prominent

—

—

—

Teletype Ml

488

Ex-

.

T'^

'

•*

Volume;;! 63 , ".Number. 4580

TPS COMMERCIAL & FINANCIAL CHRONICLE
&

Co., 231 South La Salle Street,
Chicago 4, 111.

Dealer-Broker Investment

It is understood that the firms mentioned will be
pleased
^

Illinois

;

■'

Central

^

Eisle & King, Libaire, Stout & Co.,
i'i

New York 6, N. Y.

50 Broadway,

'

>

Copper Stocks.

study

of

r?,

•

cular—Seligman, Lubetkin & Co/
Inc., 41 Broad Street, New York 4,

funded
debts
outstanding
January, 1947 — Wood, Gundy &
Co., Inc., 14 Wall Street,; New
York 5, N. Y.
ing

N. Y.

Stocks—Study of
J. Barth & Co., 482

Street,

Francisco

San

Sugar
basic

and Earnings
1947 and 1948 — List of
stocks which the firm feels should

which

Company

/,

industry

data

Investment Banking as a Career
—

Smith, Barney &

Bulletin

"/ Over-the Counter
*

'^Containing; market
analysis
Chemical

H

Co.,

a r s

Polaroid

Co.,

Republic

;Firemen's

and
Rockwell

on

h

a w

Co. ' of

Insurance

Newark, Delaware Power & Light

& Ohio, Bird &
Company,
Grinnell

Co./ Baltimore
Buda *

Son,

Tool

Plomb

Corporation,

;

Cor¬

Detroit Harvester Corporation, Central Arizona Light &
Power,
North
River Insurance

poration,

.

*

Co.—Late

"Co.,
120

r,"

York 5,

•.,

Study

Elec/

Newburger,
Street, New

—

zell

&

Street,

Also

dum

available

is

•*

Company

Power

61

/

Sterling

—

Hoblit-

C.

National

Bank

Trusi

&

analysis—C.

& Co., 61
New York 6, N. Y.

Motor

Co.

Truck

—

is

available

E.

Power

Analysis—Ira Haupt & Co.; Ill
Broadway, New York 6, N. Y.

'

Tide

Water Power

/

••

S.

B.

—

Y.

N.

:

X/'//.:--.//

pany.

$5,650,000

Aspinook corporation—Circulai
&

—Ward

Also

Y.

available

ford

Hart¬

Empire; Lanova Corp.; Mo¬

hawk Rubber; and
Iron

on

Diebold,

Equipment Trust, Series T

Taylor Whart¬

Steel; Puroiator Prod¬

&

ucts; Upson Corp.; Alabama

Barcala Mfg.

Mills:

Pfaudler " Corp.;

Inc.;

United Artists; Vacuum

Central

//,1V///'//*

Public Utility

(Philadelphia Plan)*
annually $565,000

To be unconditionally
•

;

-

?

.

*»•»■•

Equipment Trust Certificates

■

To be due

53£s/of

$6

.

on

1

•

;

-

,

each April 1, 1948 to 1957, inclusive

guaranteed as to payment of principal and dividends
by The Baltimore and Ohio Railroad Company

'V

•

•

«• -

•■..„-■■

t

.. •••••,

.

'

,

/

of nature and

of thewarious
subsidiaries making up the sys¬

current operations

'■'%

Certificates are to be issued under an Agreement to be dated as
which will provide for the issuance cf $5,650,000 principaLamount of
secured by new standard-gauge railroad equipment to cost, not less

These

Preferred—Bbtailed Rer

view and discussion

i-'*

m

Consolidated Electric and

Gas

1%%

•;

Concretd;

and

52

■;

Baltimore and Ohio Railroad

memoranda

are

W. L. Douglas Shoe Co.;

on

I

120-Broadway

Co.,

New York 5, N.

by endorsement
y

'

m

'

1

"f

of April 1, 1947,
Certificates to be.
than $7,073,720.

'

•

MATURITIES AND YIELDS

& I Light,

(Accrued dividends to be added)
2.05%

1955

1948

1.10%

1951

1.60%

1949

1.30

1952

1.75

11956

1950

1.45

1953

1.90

1957

1954

2.00

.

'

*

-

,

2.10

2.15

■

Guide

containing

quotations

mon

*

49 Wall

Circular

—

Dearborn

Seligman,

Inc., 41 Broad
York. 4, N. Y. ■ ;/ •
Also available is

Co.,

stocks.

Railroad Developments of the
Week—Summary—Vilas & Hickey,

*

Consolidated

on

public utility preferred and com¬

Corp.—

The

Lubetkin &
Street, New

a

circular on

Foundation Company.

Street, New York 5, N. Y.

'

L.

Darling

A.

and

brochure

Co.—Descriptive
report—

/

annual

EQUITABLE

/Toledo, Ohio in celebration of the
"

firm's

15th

Anniversary

the

in

*

Investment

^

i

<

business.

?

Seven Public Utility

Finch Telecommunications,

"

ariinal Tower, Cleveland 13,

Ohio.

;

"Special Situation" in Insurance

Stocks
*

1

?

W. PRESSPRICH A CO.

—

Reprints

of

Address

of

George Geyer of Geyer & Co., Inc.
to members and guests of Boston
Securities
Traders
Association—

and Polaroid
reports available
to banks, brokers and dealersAsk for memo SR
14—Troster,
Currie
&
Summers,
74 Trinity

THE MILWAUKEE COMPANY

THE ILLINOIS COMPANY

COMPANY

SCHWABACHER A CO.

POLLOCK A CO., INC.

CLEVELAND

MULLANEY, ROSS & COMPANY

,

JULIEN COLLINS A COMPANY

McMASTER HUTCHINSON A CO.

CORPORATION

Corp.—Special

MASON, MORAN

r

;

.

Place, New York 6, N. Y,

To be

General Portland Cement

Com¬

:• "/•

.,-«■>/ -•■ •■; ..'**'■ ^'•
// /State of California—A ■■/ Heller, -Bruce & Co., Mills Tower :. Hydraulic Press Manufacturing
Co.—Detailed Analysis-Gomstock
///San Francisco 4; Calif/^
^
*,•
y-A'
*> *• tc '•
* "
'
.,t.

.

f

■v

>

*

t ■-

«.

t

pnor to

*/March 27, 1947.

-

i-.

,.

■t'v

witfi dividend

E. W. A R. C. MILLER

A CO.

F'S> XoIil.'.T.? C0-

COMPANY

^

wrrafite

ALFRED O'GARA AGO.
a'sto prlm-^m^NoV'r^eemabie

ff

'd

h

nd if.rereived by us. It

is expected that Certificates

in temporary

35 Wall St., New York 5. N. Y. on or
hflormation contained herein has been carefully compiled from sources considered reliable and.
guaranteed as to completeness or accuracy, we believe it to be correct as of this date.

maturity, mje
•°/?efn/nIr\f ^ ^947 The
- -about April 2K 19

;:>v,

;

-

THOMAS A.

;

dated April

Certificates,

field, Lax & Co./ Inc., 40 Ex¬
change Place, New York 5, N. Y.
.

A CO.

/y/ •■1

pany—Interesting report—Green*




FIRST OF MICHIGAN CORPORATION

McCORMICK & CO.

THE FIRST

tional Paper & Type,

Geyer & Co., Inc., 67 Wall Street,

,.^ew York 5/N.Y. v

KEBBON.

T

ROTHSCHILD A CO.

Na¬

-

"

F>

FREEMAN A

WM. E.

Operating

Clompany . stocks
recommended
for investment—Otis & Co., Ter-

7

State Street,
Boston
1,
Mass. and
40 Wall
Street, New York 5, N. Y. ; , / !

Estabrook & Co., 15

"

.

(incorporated)

HORNBLOWER A WEEKS-

■

"

'

HARRIS, HALL & COMPANY

SECURITIES CORPORATION

.

,

'

Inc.

HALSEY, STUART A CO.

■/^Safeguarding Your Savings"—
*
Moreland & Co., Penobscot Build¬
A primer of investment information issued by the New York ing, Detroit 26, Mich. ,//. .v////:
Better Business Bureau, which is
Fairbanks,. Morse — Study of
being .-distributed
by Ford R.
common
stock
which the firm
/Weber & Co., Spitzer Building, feels offers excellent prospects—f

r

Certificates are subject to authorization by the Interstate Commerce Commission,
Offering Circular 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.
•
:/'
.

Issuance and sale of these

Stock

issue of the Republic Utility

_

of Halsey, Stuart & Co. Inc.,

Co.

—•

Lichtenstein &
Wall Street, New York 5,

99

Co.

Company-

Memorandum—Buckley Brothers,

Street,,

Salle

La

—

& Co.,

Wcrumbo Manufacturing

Circular

offering

an

South

;

Chicago 3, 111.

Company—

Company

Gas

J. O'Connor

Analysis—J.
135

Water

Ohio

West

Analysis—Adams & Co., 231 South
La Salle Street, Chicago 4, 111.
/

*

.

Hytron Radio and Elec¬

port on

Broadway,

Unterberg

Central tem, in the March issue of the
Investment Barometer"—Fred. W.
Illinois Electric & Gas, Central
Maine
Power,
Iowa
Southern Fairman & Co., 208 .'South La
Salle Street, Chicago 4, 111.
/,}
Utilities, Lake Superior District
Power, • Puget Sound Power &
Cities Service Company — De¬
Light, Virginia Electric & Power,
X West Virginia Water Service, and tailed discussion of situation —
Ira Haupt & Co., Ill Broadway!,
Western Light & Telephone.
New York 6, N. Y.
'"Also available is the current
Hills

Company,

Co.—Analysis—

memoran¬

a

*

<

&

Warren "

D.

Suspender Com¬

Pioneer

on

on

May & Gannon, Inc., 161 Devon¬
shire Street, Boston 10, Mass.
Also available is a detailed re¬

—

6, N. Y.

.:yK: Public Utility Common Stocks—
"Brochure containing brief sket-

age" :form-^-G A.; Saxton & Co.,.
X Inc., ,>70 Pine] Street, New York
CN.-;; Y. ;" Issues/ discussed are
t iArkansas-Missouri Power, Black

Jersey)

N. Y.

Also

Memorandum

tronics Corp.

Screw

.-

"pack-,

(New

Hutton

F.

Tide

Broadway, New York

—

M. Byllesby and

delphia 2, Pa.

120 S. La Salle

Discussion of interesting prospects
—E.

New

Co., 25 Broad Street, New,

York 4,

Oil

—

N. Y.

Public

Aanconda-Copper Mining Com¬
& Hano, 61

Co.

Co.,
Stock Exchange Building, Phila¬

Broadway, New York 6, N. Y.

Wall

52

..

ches of 10 stocks set up in

Standard

Corporation

Forming

Boston
&
Maine Railroad PAmalgamated
Sugar,
Walter J.V Connolly
Arthur Warner & Co.|. Circular
Broadway, New York 5, N. Y.. Co., 24 Federal Street, Boston 10,
Mass. v /
/'•/
/•■/;;/'••
///;
;
•: ■
^
|

*

Street, Utica 2, N. Y.

esee

Showers Brothers Co.—Analysis

Co.,

Mohawk Val¬

—

1,
Warner

—Caswell &

Cotton Mills,

Mohawk

ley Investing Co., Inc., 238 Genr

Corporation,

Avenue, New York

&

Circular

—

Street, Chicago 3, 111.

"Company,
,

the Chronicle.
Merit, in care of

Distillers

data-

Building, Montgom¬

Co.—Year-end

Corpora-

Natural Gas Co.*

Broadway, New York 5, N. Y.

Inc.

in

Mark

to

Fifth

350

4, Ala.

poration,

York 5, N. Y.

—

forecast

data

and

Manufacturing

*

—

Loeb & Co., 15 Broad

,

Co., 14 Wall Street, New York 5,
'N. Y. ;X:

tion,

in

pany—Memorandum—Newburger

*

,

Co.

Industrial Chemicals, Inc.

S.

Utica

of articles they havfe

running

Write

Memorandum—First Colony Cor¬

interesting—Otto Fuerst &

Brochure

Steiner, Rouse & Co.,
Street, New York 4,

120

Schenley

ing, San Francisco 4, Calif.

Co., 57 William Street, New York

.—

Bank

Metal

detail—Kaiser & Co., Russ Build¬

trie

*

(formerly U. S. Industrial Alcohol /
Co.)—Study
tracing
company's
progress—Laird, Bissell & Meeds,

Co.—

Schenley Distillers Corporation

Oil

Cola

Phillips

Good/Business

'

Manufacturing

—Brochure

Memorandum—Bruce

During

■

Lime

tional

Supplement to study of the Amal¬

American Water Works &

5, N. Y.

Building, Cleve¬

Thornton, Mohr & Co., First Na¬

'///■//

4, Calif.

prove

tional Detrola Corp.

S.

contains

.

,

memoranda

are

9,

outlook—H.

Co.4-

Sugar

Crystal

gamated
Mining
—

JKingwood

ery

American

::

,

Gruen Watch Co. and Interna¬

on

10

N. Y.

Dominion of Canada and Cana¬

California

& Co.,
Boston

N. Y.

Co.—Analysis—
Peter Morgan & Co., 31 Nassau
Street, New York 5, N. Y.

Co.—Cir¬

dian Provinces—Handbook show¬

situation

—

Broad

been

-

Gold

Analysis

land 14, Ohio.

New York .5, N. Y.

American Box Board
•

y

Brownhoist—Annual

Union Commerce

a

Square,

U.

25
f Industrial

Co.—Up-to-

statement—Gottron-Russell & Co.,

.Air Reduction Company, InCi-X:
cussion^KalbyiYoorhis & Co., 15 Memorandum: on po'ssibi;ities -X
Broad "Street, "New York : 5*, N. Y. A. M. Kidder & Co.,1-Wall Street,'
is

Office

Rockwell

Aerovox—New circular—AmQs
Street; Neiv

Car

Mass.

Railroad—Dis¬

cussion of appreciation potential¬
Hentz & Co., 60 Beaver

i^Cutrent Textile Situation—Dis-

vAlsbvaVailable

Steel

date "Circular—Lerner

ities—H.

Treat & Co., 40 Wall
York 5, N. Y.

Street, Philadelphia

available

Also
Ralston

1

Study

—

Walnut

1420

are

Street, New York 4, N. Y.
Prospects

•Airline

•

Stern & Stern Textiles,

2, Pa.

Post

to send interested parties the following

,

available

on

Inc.

analyses df
Long
Bell
Lumber
Co.,
and
Miller Manufacturing Co.
..

Recommendations and Literature
•

Also

circular

1655

j

THE COMMERCIAL & FINANCIAL CHRONICLE

1656

J. F,

Ohio Brevities
A

of

total

$2,011,000 of Mansfield, Ohio, school district bonds
a syndicate headed by Northern Trust Co, .of Chi¬
cago. The winning bid was 100.68 for the issue as l%s.
:
The bonds, which mature from April 1, 1948, to Oct. 1, 19b/,
were reoffered at prices to yield from 1.70% for the shorter maturi¬
ties to 1.85% for the longer term bonds.
awarded to

were

_

..

^

Cleveland houses in the group
;

McDonald :$>

were

Reilly & Holtzman

Join Marx & Co.
Marx & Co., 37 Wall

Street, New
City, members New York
Exchange, announce that
John F. Reilly, recently elected a
York

Committee

Stock

Finds

yields

Richards & £©. and/First Cleve¬
Proceeds will be used

in the school system.

Hawley,

Shepard

Cleveland
houses

I

will

-

&

Co.

of

be

<
among
the
with Eberstadt

associated

offer 100,000

soon

shares1 of $50 par:4%% preferred

and .250,000 shares of common of

Harry Ferguson Inc., tractor, mak¬
ers,
now
locating in Cleveland.
The

offeringvis expected in. the

Appoints Committees

of

OHIO—William
J. Perry, Secretary of the Cleve¬
land Stock Exchange, announced
membership on the
exchange's
1947
standing committees after
market governors approved ap'pointments made by
the new
president, Richard A. Gottron of
Gottron, Russell & Co.
1
i.
CLEVELAND,

23/4S.

Other

101.324

Cleveland

for

firms

in¬

cluded Ball, Burge & Kraus, Gin& Co., and First Cleveland

ther

Corp.

!

~

Otis &
6

Co.

Co.

Co., Stranahan, Harris

^nd Ryan, Sutherland &
awarded

were

$600,000

un¬

limited tax building and
equip-;
ment bonds of the Shelby, Ohio,
School

District "'with

101.68 for
fered

l%s.

at

0.70 to

to

of¬

were

yield

of

from

'

•

.

»

*

Co.

to

six

Batterman

voted

members

John

and

dropped, i He is

was

active recently.
*•!

a

by

Norman

Cole

of

of

LedogarHorner & Co., Frank W. Morrow
of Morrow &

Co.

and Mark Dal-

iere of Prescott & Co.
Daniel

Macklin

Baugh
&

Co.

tops

1

,

*

the

finance

Handyside

of

H.

L.

The rules and arbitration group

is

headed

by Arnold R.

McClin-

tock of Hornblower & Weeks and

includes E. E. Parsons, Jr. of Wm.
Mericka & Co., Morton A. Cayne
of

Cayne, Robbins & Co. and Dan¬
iel Baugh III.
v
-

..

George Placky of L. J. Schultz

& Co. is

C.

C.: Virden

directors of Eaton

J.

F.

Reilly

&

in

time

grown

has

Co.,

1933

Inc.,

be

to

of

'<

office

./.'

:

&

in

Co;

also

'/■,/;

maintains

Manufacturing

Schwinn of L. B. Schwinn &

Co.

;Co.,

following shareholder ap¬
proval to increase the board from

Market

k Harriman Ripley & Co., Inc. and

Operating Company Stocks
! Recommended

for

Investment

;

Richardson

i

on

Request

—★

new

(Incorporated)"

'1

the

V

"

Established

lie

1899

CLEVELAND
New York

Cincinnati

,

Chicago

Columbus

" Denver
*
Toledq Buffalo

Id, Richards 8c Co:

Union Com.

Bldg.

CLEVELAND

Union Cent. Bldg.

*

CINCINNATI

Tele. CV 174

Tele. CI ISO

and

after

Direct

GGTTRONt.*nElL&

or

Service

Quotations

INDUSTRIAL

40 NYSE and NYC

Listed Stocks

are

Dually

Odd-Lotted Here

,

'

♦

"

Annual

*

'

•

statement

on

W

•

/

.

4

request

WM. J. MERICKA & CO.
INCORPORATED

Union Commerce Building

CLEVELAND
1582 Union

Commerce Bldg.

Cleveland

14,

Teletype CV 594
29




14

Members Cleveland Stock Exchange

Ohio.

rvrr

per

is

«iin i

BROADWAY
m,

iiiI

(Vi-1'-ir11wisiram

drrim rrtiuM*

lower will place in
jeopardy the
effectiveness of the American in¬

stitutions

such

life

as

insurance

companies, saving banks, pension
funds, research funds are religious
and charitable institutions. All of
these have provided valuable serv¬

his

"Doctrine"

constitutes

invitation

open

for

continued, adding that when Gen¬

was

ill-advised

eral

Marshall

left

The

retirement
on

or

fund

per

of

'

WASHINGTON (Special to

of
at

an

April

American financial
agreement, it
is conjectured
that the British
Government considers it desirable
to

keep

the

American

ment fully informed
sults of the recent

1

share there

a

,

large producer

o

descent and fluorescent
lamps and

electronic

tubes

radar and television.

include

the

•

the,"Chronicle")—There,
may

is a report
shortly visit Washington.

i

■,

.

an¬

glass bulbs and tubing for inchn
for

that
his
fight is
Moscow to obtain (vast

balances

in the

before April
1, 1955

a

Chiang

official British conversations with
Indian,
Egyptian and Iraqian governments
relative to blocked sterling, bal¬
ances.
Since little if
any headway was made
by Sir Wilfrid, accord¬
ing to the British press, in
obtaining the creditors'""agreement to an.
early settlement-of the blocked<®>
—! •.

$104.00

share thereafter.

Corning is

against

Sir Wilfrid has headed the

April

before April 1,
1957; and
per

'

to ' advise

Washington

effect that Sir Wilfrid Eady

fV?'

a

as

Govern¬
to the

re¬

conversations

Middle East, perhaps with

view

to

enlisting Washington's

good offices in the matter.
"

or

now

only

Eady May Come to Washington

;

con¬

$103 per share thereafter and

on

But

has

■

-

-

satisfactory-to London
blocked-sterling balances, al¬
per
share and in keeping with the suggest though the
loan agreement spe¬
tions
embodied
in k the
Anglor cifically expressed the
preferred
intention

before

or

Kai-Shek

or

subject to; redemp¬

1952; at $103.50
at

new

Communists.

com¬

share there¬
before April

$102.50

also

share

after and

ucts

NEW YORK 6
rimmiv

before

through operation

$102.50

BROWNHOIST

Savings;

on

.

per

or

at

thereafter.

nual

Cleveland Stock Exchange

Impact

"Closely allied with this prob¬
lem is the danger that an
arbitrarypolicy of driving interest rates

v
) k'
Romania have indicated that
Thus says the
foreign observer,
they will demand American
help Truman has put a millstone about
to fight
Communism; and the peo¬ the neck of the United States. The
ple in the Chinese Government
monetary cost certainly will., be
are
jubilant over the change in more
inflation
in
the ; United
their prospects. All that
remains States. The
political and military
is for Molotov to
get some Rus¬ cost no one can forsee.':
~*

per share there-

or

on

and

on

on

on

and

1957;

tion
Fast

a

.

on

year

1950, out

1955;, at $103.50

stock

Orders

is

observer, Poland, Yugoslavja American assistance.

and

preferred may be redeemed
whole or in part at
$105.50
share on or before April

after
",v

•" v

of

,doctrine

net income after
pay
of preferred
dividends, i The

1952; at $104.50

OTIS & CO.
*

a

per

—

down

was

solidated

•

■

theretofore;issued
June 1 of each

mencing with

as

Copy

hold

phrased was an Open invita¬
tion to almost
any country to come
in for its share.
Already, continued

ment of

ment

-

peacetime
If the Government uses

siders that Truman

associ¬

share.- The
company will use
proceeds from the sale of
prefer¬

before

Harshaw Chemical

Utility

ought not

a

shares

Public

con¬

rates

our

are

The new preferred will
have an
annual retirement fund
amounting
to 2%
of the total number of

Seven

that

receive a fair reward. This
'human right'
needing as much
consideration as the -benefits to
the borrower of
money*
savers

China to stew
offering publicly -today to lay open his
purpose so irk in its own
juice, he did so follow¬
(Thursday) 50,000 shares of Corn* retrievably. International
relations ing a study which convinced
him
ing Glass Works cumulative pre
are not best
conducted, states the that Moscow hs(d been
ferred stock, 3%% series of
playing, no
1947.! observer,
by exposing one's whole role of conference
par value $100 a
among China's
share, at $102.50 hand and the
way this
ates

■„

Drackett

should

interest

simply to

com¬

appears

during the
but adjustable to the chang¬
in

the Gov¬
over

the

^• WASHINGTON, March 26 (Special to the "Chronicle")—An ex¬
perienced foreign student of world
affairs, who is now in Washington,
expressed to the writer the view<^
■;hat President
Truman, in enunci¬ sians in Moscow to agree to ask
ating so bluntly his doctrine to
Washington for a few billions to
Congress and the world, set his
fight Communism. The observer
foot in a bog, that observer con¬

enlargement and improve
existing and new facilities
13
to
15
and
members.
Winther is
(Special to The Financial Chhonicle)
equipment, for further' ad¬
President and General Manager of
vances to and investments in
sub¬
PORTLAND, ME.—Laurence H.
Dynamatic Corp., Kenosha, Wis., Mann is
sidiaries and
affiliates, and other
now with F. L. Putnam
Eaton subsidiary. !
•
corporate purposes.
& Co., Inc., 97 Exchange Street.
]

:

and

worldwide anti-Communist subsidies. /

red for

With F. L. Putnam & Co.

influence

Revelation

Corning Glass Works
Freres & Co. and

and

authorities

k;;.//;'//

Lazard

O'Leary

future, the Committee dec-

direct wire facilities between
New
York and Birmingham.

on

preserved

"Truman's Foot in Bog," Says
Foreign Observer

an

Birmingham, Ala., with

Stock Placed

be

he service charge on the debt and
ices in our society, and
interestignores other aspects of interest
(Continued on page 1677)

the

largest over-the-counter and un¬
listed security firms in the United
Marx

savings. If this healthy custom

to

provision against all
the hazards of life—or
attempt to
do so—then it is essential

to

economy.
its control

that

one

J.

ares, control over rates
to be rigid, as it was

was

since

and

J.

Committee

conditions

save,

-

pletely

tinue

ing

important

ernment is not to take

in the

war,

study*, it
expediency of

On the income
aspect

is

with the members'
approval.
While the Treasury and Federal

scope and activities

to

an

long de¬

own

de-\

stages

Trading Department
materially increased.

founded

Gordon

Chairman of the arrange¬
Virden, Chairman ef
ments committee and is assisted
Co., Cleveland
by Bernard Burlingame of Got¬
lighting / fixture
manufacturers,
and Martin P. Winther are new tron, Russell & Co. and Leslie B.
John

John

firms, the

will be

States,

of

III

committee composed of George E.
Jaffe of W. F. Quinn & Co., and

P.

two

an

the

of inter¬
rates, the Committee says:
"Americans have always
provided
for 'rainy-day' needs
through their

of research, Dr. James J.
O'Leary,
was reviewed at its
various

forded by the consolidation of the

to

part of
to

,

The

Reserve

"sacrifice

budget

est

under¬
taken by the Committee's director

of the Marx

Gunn

.

>

.

*

E.

of

Gunn,
Carey & Co.* is chairman of the
publicity committee and is aided

to

former Chairman and President of
the company but has not been

;

Clemens

Birchard

•

study,

the

according

but, extremely * dangerous
when they catch up with us."

to resist defla¬

by

as

——__

layed

and*

tion.

should

■

American's incentive

an

credit

inflation

fates

with results that may. be

-

signed to curb

Emerson & Co.

*

directors

reduce the board of directors from
seven

and
Lloyd
Prescott & Co.

Douglas

1.70%.

Gabriel
;

Bonds

prices

bid

a

Corp.

a

interest

society; but also

■—■

will
the

policy flexible
enough to alow

our

"'

•1

Public Debt

policies

against

expediency of budget.

over

cost to

-

mended adop;ion of a rate

W. Yost Fulton of Maynard H.
Murch & Co.- was named Chair¬

Cleveland

of

to

rates,

rently recom-

,

bid

a

study made,
public cur¬

■

a

as

income,

Policy in

.

Government

warns

save

the Committee

.

with

its

on

next few days or the first part of
John F.
Reilly
man
of
Sydney Holtzman
the executive advisory
April. The common will be priced
group with the following mem¬
at 13 % and the preferred at $50.
member of the Exchange and
bers: Leslie J. Fahey. of Fahey,
pre¬
5
,*
' 4
*
*
''
Clark &' Co., John S. Fleek of viously President of J. F. Reilly
& Co.,
Hay den, Miller & Co. partici¬
Inc., will make his office
Hayden, Miller & Co., C. B. Mc¬
with the firm and that the busi¬
pated in the Harris,, Hall & Co.!
Donald of McDonald & Co. .and
ness
of J. F. Reilly &
group offering of $1,800,000 of
Co., Inc.,
Charles
B.
Merrill
of
Merrill,
will be transferred to the
1*4% serial equipment trust cer¬
Marx
Turben & Co.
tificates of Chesapeake & Ohio
organization.
^
A
! k'k
The listing committee is headed
Railway. The certificates were
Sydney
Holtzman*/formerly
by Alvin J. Stiver of Saunders,
awarded on a bid of 99.273.
Vice-President of J. F. Reilly &
i - Stiver & Co. and assisted
by Guy
V"/v'.
*
'
* 1
*
!•'."•
1 ■
Co., Inc., also will be associated
W.
Prosser, of
Merrill
Lynch,
with Marx & Co. in
An investment group headed by
.the firm's
Pierce, Fenner & Beane, David
Over-the-Counter
Fahey, Clark & Co. was high bid¬ G.
Trading
De¬
Skall, of Skall, Joseph & Miller,
partment. It is contemplated that
der
for
$916,000 South Euclid- W. E.
Beadling of Beadling & Co.,
through the extra facilities af¬
Lyndhurst School District, Ohio, Frank C. Gee of First

bonds

to

rates drastically increase life insurance
cost, reduce
savings, and impair endowments and pensions.
.k7;;k/;

on

recognize interest not only
important part
"""■ •/•: ' •

*

& Co. which will

Policy

Asserting that Government control

land Corp.

for additions and improvements

Debt

low

•'

•

-

Field*

Co.,

Public

on

sacrificing country's incentive

•

,

,

Thursday, March 27, I947

for

radio

The terms of the American
loan
of last year to Britain call for
the
removal
of restrictions
on
cur¬
rent

foreign-exchange

tions by July
the

line

of

15, 1947,. that being

anniversary of the loan's

ing into effect,

Other prod

Pyrex

transac¬

There is

finite,awiw»l
tlement

similar

no

°f

between)'Britain

creditor1 tow! ithe- ^ matter

com-

a

and

of

setits

the

of the British

Government to make
arrangements "for. an early
settle¬
of the past accumulaiibhs

ment"
of
•

sterling balances/
A

trip to India
fruitless
press

the

s:k

:•

/

suggestion; that Sir Witfrid's
was

reports

Indians

not

in

appears

to

completely
the

the

their

gave

British

effect

that

"word

of

honor" not to draw
unduly ifpon

London's balances until the
ques¬
tion
dian

has

suspend

licenses
ports
an

been resolved.* The In¬

Government's

is

the
for

decision

/

gold

and

in ;LondOn

silver

> '

.

im¬

regarded

implementation

promise.

to

granting of private

.

■

/

of

as

that

;"

^Number 4580

Volume .163

THE COMMERCIAL

As far

FINANCIAL CHRONICLE

hank

as

loans

1657

concerned, (another signpost that must

^re

watched carefully in the credit picture), a continuation of the
recent trend may lead do some, action by the powers that be. .
3e

"Our Reporter on Governments"

.

.

Despite the. substantial upward trend that has taken place in busi¬
loans, it must be remembered that a very great part of these
advances are term loans to large borrowers for capital goods pur-,

ness

—" ' ; '

By JOHN T. CHIPPENDALE,

—

poses..•

somewhat larger supply of funds, despite income tax
payjnents and debt redemption, coupled with a good demand for the
restricted obligations from non-bank investors, has
kept the govern¬
ment market buoyant with a tendency for specific issues to
move
slightly above xecent tops.
Dealers' inventories are not large
A

,

.

.

Changes in
bank

large borrowers.

,

On the other hand, 110 sharp weakness is looked for, because the
demand for obligations from investors is still substantial.
.,;
are letting out
enough eligibles to keep
issues stable, while other investors and corporations are
disposing of the restricted securities in such amounts that should

going to levels that would

term loans

on

liquidating

which

program,

should be kept

However, it

or

would

that

should result in larger and .continued

if

of

in mind

bank

use

the

be

not
.

—Miroslav A. ICriz—international

high prices

credit

Finance

in¬

for

to

break this trend.

-

,

Lending

International

Postwar

.

.

Section

Department

of

Economics and Social Institutions,

ventory loans, there will most likely be action by the authorities

Non-bank investors

these

keep these bonds from

effect

no

The small concern would be the real suf¬

...

loan

a

to force liquidation of

pressure

or

practically

what the money managers would want to have happen.

...

.

from

ferer

.

and although the supply of securities in the hands of other investors
appears to be somewhat limited, no upsurge in prices is anticipated.

rates

money

loans would have

Princeton
N.

.

Princeton,

University,

J.—paper.

.

criticism

cause

from the powers that be....

As

result of the favorable demand and

a

.

.

SOUTHERN CALIFORNIA EDISON COMPANY LTD.

.Considerably more attention is being given now to the restricted
issues, much more so than at times in the past, because of the opin¬
ions that, present outstanding obligations Ore not
likely to be added
to for a long time, if- at all.
;
This has improved greatly the po¬
.

.

.

1946

/77'r: ■%:

.

-

v-:--1; y

■

\

v:V!y; 'yr:

•-

Gross

.

Consolidated Income Account
.

.

.

.

v

.

.

.

.

.

Provision for Federal Taxes

.

.

.

.

.

.

$ 21,551,865

.

Taxes—State, Local and Miscellaneous

.

.

•

Income

on

Provision for

Depreciation '. . . . <
Frequency Change Expense . / . . .
Amortization of Acquisition Adjustments
vjrross
Gross

prices and loans.
Probably the key to the entire credit picture
will be,, the movement of commodity prices, because on them will
depend to a major extent the maladjustments that may develop in
the economic system.
If there is to be a continued upward trend
in commodity prices, to be followed by higher wages, and this is
most likely to happen because of the strength of labor, then the
much talked
about "boom > and
bust"
will
rapidly become a
reality.

Income

income

.

.

•

•

.

777

'

•

•

58,717,385

•

$ 15,881,759

_-.

»•*

4,686,524

.

.

$ 11,195,235

.

.

*.

-i

0

.

,

.

*

.

•

•

•

*

8,660,428
11,000,000
- 261,805

*

.

•

.

,

-

8,115,787
9,127,500

.

.

.

.

.;f

.

.

_'

'

'

At the present time the monetary authorities are confronted
with the problem of preventing inflationary forces from gaining too
much headway, with particular emphasis on the trend of commodity

74,599,144

.

.

Operating Expenses and Taxes
Operation and Maintenance

.

.

Earnings

;

In other words, the program to combat
inflationary or defla¬
tionary forces will be dictated by the conditions as they currently
exist, and not by the conditions or methods used in the past,
which might not be applicable or suitable to present day de¬
velopments,, y.--i X4-' :■> y

.

:7

YEAR

Consolidated Income Account and Summary of Earned Surplus Account
"•'■'V::
7.7:;7';7 for the Year Ended December 31, 1946

.

In order to maintain adequate controls over
credit, it seems as
though the money managers have adopted a dynamic flexible policy
of debt management, so that they will be able to
cope with changing
.

"yv'.,:,/!.

v7v/\v (AND SUBSIDIARY COMPANY)

.

sition of these bonds in the minds of many non-bank investors.

conditions.

,

.

POPULAR

EESTRICTEDS

ANNUAL REPORT

ST

supply situation in the
a good technical position, a firm to
slightly
better tone is looked for in prices of Treasury securities.
market, which means

.

.

Interest and Other Deductions
Net Income

-

•

!

.

.

.

-

*'

••

■.

.

;

...

.

.

Summary of Consolidated Earned Surplus
Balance, January 1,1946 ; V
Add: Net Income for the year

.

MARKED

PROBABLE

EFFECT

-

This would be the most adverse development to hit the money

.

.

>

.

.

.

.

*

.

.

.

V

.

.

$ 12,351,966

.

;

.

ended December 31, 1946
Reversal of provision for prior years' taxes based
;
on income, not required
.
.
'. ; . . .. . ' .

.

11,195,235

.

L850,000

'

s

;

.

markets, because the credit measures that would have to be adopted
under these

conditions, would most certainly result in the greatest
It; is very likely
that short-term rates would be defrosted, while at the same time
the increased offering • of long-term securities would bring down
disturbance to prices of government securities.

prices of long-term Treasuries.

.

.

;

:

.

i

.

.

Deduds^-'1'-

.

Dividends V

as though the only course open to the money managers
inflationary developments is continued bank debt retire¬
ment to cut down bank deposits,
This ean^pe done in either of
Ytfays: (k) Retifenieiit; by surplus Treasury funds,,, (b) rejiemptioh?through'refunding'.
if possible, this will. be done in such a

mOiipex as to 'keep prices of

>

¥

.

.

.

charges (net)

.

of

amount

debt

surpluses

are

the

be necessary in order to.
no

offerings

new'

vestors.

.

'

.

.

of
-•

.

.

.

.

IUNU'

.

•

'

.

■

iT,
",h..
Property;'; Rightsi-Franf

..\

f

ft-

'1

•

sufficient to carry out
authorities believe

tially at Cost).,

.

.;

.

'

less partial

determined),
ments

:";iH

pay¬

received of $900;000

.

*

Miscellaneous Investments

there are no issues of long bonds to non-bank in¬
order to raise funds that would be used to retire bankthen the government bond market should continue to be
Redemption of government securities through refunding
would adversely affect outstanding obligations, provided,
they are the "Same as the outstanding securities. . . .

Other Assets

f;

stable.

.

,

operations
of course,

.

Before these

}.
•

surplus of funds along with
funds, - should be sufficient
to Cut down enough bank-held securities and bank "deposits to keep
thq f inflationary forces pfetty well in check, provided there is no
runaway in commodity prices and wages. ... . This is what money
market followers expect will take place. . . .
;''7/;

possible, the future credit policy of the money
managers will be carried put in such a manner as to keep interest
cosft low, because of the tremendous1 size of the debt. ... However,
there &re fio doubt limits beyond which the powers that be will not
go'Ywrih reference to low interest rates, and the effect they may
have on the economy.
It seems as though when the choice has
to be made (and it may have to be made,sometime soon) between
bfp^kihg the inflationary forces and keeping interest rates low,
there appears to be little doubt that the inflation will be broken
irrespective- of .what might happen temporarily to the level of in¬
as

it is

.

.

terest rates.

.

.

-v

.

This

6,754,480

~

3,363,946

Deferred Charges

brihgs up1 the
in

question

as

^^Imritie^^a^de




#

r.

.

.

shares $85,441,811

7;

70,743,697 $156,185,508

shares
.

.

.

..

138,000,000

. •

.

' '

Current Assets:

on

*

f\

,'7.7'Y1,7

>

$ 3,703,397

.

United States Gov-

77

-

and

'
^

a

.

.-«•

ii[

',.'

'''

.

.

15,091,662

,

M05.000

-

i; f-'': ri1

20,100,186

•

.

determination)

.,
:

Accrued

Taxes

v,

'

i

Interest

Accounts

$11,122^379^

(subject to final

r"V

obliga.

dends Payable 7

;h'7'

'-if

and

hand,

Working Funds

ernment

Accounts and Divi-

1"

and1'

Cash in Banks

•

•

.

•

.

.

Current Liabilities;
:,h

Accrued

27,619,041

;

,

.

Notes

Receiv-

Reserves

."".f able, less Re- •.:■:/■'■}h
serve for Uncollectible
ables

■■<''■>":'■•

:--rh:y

Receiv-

($753,673)

5,817,826

Materials and Sup-

plies, at cost . .
;Prepaid Taxes, Insuranee

'7,

(THE ABOVE

*

,

.

.

»

<7

»

.

.

•'

A

•

.

«

1,489,585

•

,

Earned Surplus

and
.

•

Contributions in Aid of Construc¬
tion

7,541,383

»

h .108,699,130

v"

.

•

15,594,451

.

40,560,157

: 3,397,365

$447,587,715

$447,587,715

to.Mijt

to what can be done

commodity

I-■

';:h

;!rm.■

1,241,076

over

7

prices by the monetary
from decreasing the supply of inflationary bank "sdepositfe.'d. JxipThe
Teasing
—;
iy, ans\yer here seems to be much more political -thanffmaPciaM
the. rise

Preferred-r-

3,182,805

Capital Stock Selling Expense on
Original Issues . . . . « •

v.

other expenses

POLITICS AND BANK LOANS

:h

»

Long Term Debt

being amortized
lives of such issues .
.
.

tions, at cost

soon

f/: ■ 0

Value $25 per: t
share).

($2,377,448)

i

Insofar

;

,

Common-—

period ending Decem¬
ber 31, 1959, less net premiums
received on outstanding issues

,

PE^IQW
V

-

3,466,857

tized over

be brought

-J A balanced budget with a moderate
those-available from government trust

8,014,522

.

Issues ($9,131,928), being amor-

would

debt refundings Would take place, which

about by the sale of new securities to non-bank in¬
vestors, some agreement would have to be worked out con¬
cerning the retention * of bank-elegible obligations by the nondeposit institutions.
>7 ''
' ■ * \V-

•> .:

.

and

Debt Discount, Redemption Premium and Expense on Refunded

«;

'ijji si''

1,705,134

.

......

.

ii

;

Capital Stock (Par

United States Gdvern(amount of settlement not

I ment,

■-

■hi'.-

tioned by
.

)

$385,948,400

.

■f.h;

M
^

Cost of Electric Plant Requisi¬

to

As long as

vestors, in
held debt,

9,802,750

$ 15,594,451

.

blotecl Uapita1,

_

.

:

.

m»w»ww»wvk

.

I

•

.

chises, etc. (Stated Substan^

.

reduce bank deposits, then there will be
long-term i securities to non-bank in¬
v'' ■ 777' 7'7-7 :j;v7:

REFUNDING PROBLEM

4,205
.

....

.

Consolidated Balance Sheet, December 31, 1946
■r rft,

the inflationary trend is not out

retirement that

of control, and government
the

as

;

<

,

governnient securities stable.

long

as

V

9,798,545

^

.,1.

.

.

Balance, December 31, 1946

f;

_

In other words

;

.

.

.

y

-

to combat

.

v

Miscellaneous

It seems

•

^

"

STATEMENTS'ARE CONDENSED
*

S/

*"1

FROM/TOE PUBLISHED ANNUAL' REPORT)

Y

J-

■

*11658

THE COMMERCIAL & FINANCIAL CHRONICLE

Adams Resumes

Thursday, March 27, 1947

Export-Import Bonk to Explore.

Wall Street Activities

Further Credits

Graham Adams has resumed his

Wall Street

NOYES

FAVORS CONSTRUCTION OF
COMMERCIAL BUILDINGS

!
j

type of
2

He is not

space.

j large,

would have

the

on

market.

He does
and when the
very

1654)

page

40 Wall Street.
New

*

/

Unmind-however,. should

ful, however, of the effect
buildings, especially if they

NEW

be

:

v

made

only

office

.

through experts who understand

are

the trend of values and
particular-

ly those who

an

expertly advise
adequacy ; or cor-

u

'WASHINGTON, March

26 (Special to
Export-Import Bank .is expected to accede

-

ment's request

forp'x

When

that

fX

however,

say,

that

he

the

past

few

and

years

;

account

of

scarcity

of

space

to

values

have

been

regards
many

buildings,

of

some

which

plots which should be im¬

on

proved but which are now rented
to capacity due to the
unusual de-

mand conditions

I

J Demand for
fHoyes

now

prevailing.
in fact, Mr.
is firm and

space,

points

out,

strong now in all types of prop| -erty and in all neighborhoods of

!

New York.

Desitable factory and
4 industrial properties are also
dif¬
ficult to
obtain, he declares. There
XJhas been little construction since
1932, he reminds us, and with the
rntural

increase

in

business,

down

in

space

is

almost

unavailable.
His
company, he reveals, must go out¬
side of the better
neighborhoods
in the
financial, 42nd Street and

Columbus Circle districts to satis¬
fy the demands of their tenants

J who
|

need space for

expansion.

Existing office, loft

j

many cases such

often

are

>

"

ness

was

scraping

when real estate

bottom

just recover¬
ing from absurdly low prices due
to

the

debacle of

1932

to

period when under the

1940,

a

pressure of

various State

departments such as
;he Banking Department and the

insurance

Department

'inancial institutions
their

property

so

large

were

forcing
unwilling

an'

on

market for *;ale

our

to eliminate

as

.

owneship of real estate

as an asset.

codes

which

the

have

f from time to time
'their force are not

{connection
ings.
\
Noyes

with

urges

new

but

Nathan Will Debate

C

'rosperity" will be debated

at

a

Bell

Alleghany'

road;

&

Hawkinsville

Pennsylvania Railway; O'Gara
Coal Co.; Tampa & Jacksonville
and

In

talk

a

Cui>

former Mayor

other

XPresiden t'
-X

,

S.

Naval

Reserve

Force

request for

*/.:Turkey., He
Xurged we- be

World

War

I,

prevent the
collapse of the

%

•

X G

George

Terborgh

Robert R. Nathan

supper-forum
of
the
Members of the New
West

12th

Street,

the

most

Associate

-

in¬

very

V ' '

'

'

'

.

V'.

' *"

reason

a

group

of

Director

a

Hygrade Food Products Corp.
Cab

Manufacturing
Rubber

Machin¬

on

Tuesday,

<

Robert

V F.

H.

LaGuar dia, X

i'.L'v./j..; :'X 'XX

.

i"The American
people will have
make a great decision, and I

the

on

Labor Negotiations."' A.

May/Executive Editor

-.•'•--X

Graham Adams &

importance. The subject is so
that Congress has no mandate

our

of the New York Stock

will; admit

John

partnership

on

J.

Exchange

Connell

to

April 7.

Joins Paine, Webber Staff
(Special

to

The

Financial

MICH.
been

chronicle)

—

John

added

to

the

Paine, Webber, Jackson &

Curtis, Penobscot Building.

clear

to

you,

my

for

friends, this is

fig¬

are

not apart at all.

And the
President of the United States has
asked Congress for

$350,000,000

for relief for

needy countries, food
I'm, quite sure that

relief, and
Congress will grant him the

for

.Broadway &
Dorset
Film

Center

PI. 41/2s 1969 WS

41st St.

Hotel

2s
4s

4V2S

1954

1957

New York Athletic Club

1949

Hotel

5s

1964

ap¬

1955

;

Wall &

Lincoln Bldg. 5%s 1963 WS
Madison-52nd, St. 5s 1952 v
WS

Beaver

St.

4

its

Vis WS

Westinghouse Bldg. Par. Ctfs..
61
Broadway Corp. Stock

Realty 5s 1948 WS
1410 Broadway S^s 1951

Turkey

was
to contribute
It didn't exactly keep
because Turkey never

CBI

word,

does keep her word.

4

150

Tel. BArclay

7-4880

S.

to.

bolster

Greece.

This is

we
should be very careful that we do
not bypass the
not

UN, that we do
destroy the UN—the only hope

of peace in this world,

as

we

de¬

"If the President of the United

States

wants

to aid any
Congress
will
give him the money. But the sit-,

starving
uation

money

people,

that

he

describes

ster the army of

to

bol¬

Greece, and that

means,
as
the President stated,
that the Government of Greece is
too weak to govern without the

army,

and that the army,

ently

constituted, is too weak to

enforce its

as pres¬

government, apd
ought to equip, to
give material, to give supplies,^0
give weapons, to give personnel,
therefore

own

we

to

the Greek Army to do the p<j>-icing for the Greek Government.
We are to go there to maintain'a
King on the throne. I know Kirig
George. I wouldn't risk the life of
1

a
single American doughboy \o
keeD any King on a throne.
Yes,
we'll do anything, at

any cost, to
maintain peace in the world. And

of

Senators know how

something that

we

President reported some
serious conditions, but I be¬
lieve. that these conditions should
be

our gov¬

I think we ought to be study¬
ing this question and let our U. S.

very

•

position .of

in.foreign affairs, but

of

"The

New York 7, N.Y.
Teletype NY 1-588

ernment

anything

Government
Government

the

the

have to think about.

Incorporated
Broadway

If the U.

gets monkeying around with Tur¬
key, it will rue the day. No, this
is

Amott,Baker & Co.

surely

to UNRRA.

7

79

and

Turkey
does'nt need any food.
Turkey has
exportable surpluses. I know be¬
cause

•

Roosevelt Hotel Common

Hotel St. George 4s 1950

1952

2s

Pittsburgh Hotels VTC
Roosevelt

food,

to weaken the

a

food for, Greece.
I sub¬
mitted the estimates of the needs
of Greece to the UN and our
ures

must: not do

we

stroyed the League of Nations. 4

huge appropriation to give aid to
the Kingdom of
Greece and to
Turkey. I want to make it very

not

appointed

a

t

ard

the House

are

"Qh,

new

XThe President has asked for

Street, New York City, members

the

of

investigation, and
part of that commission."
And? the commission has not* re¬
ported yet.
X

situation,

representatives in
and in the Senate.

Kalb, Voorhis & Co., 15 Broad

Charter

that

commission of

we

transcendent

therefore the American
people will
have to express their
views so
clearly as to provide guidance to

Will Admit Connell

of

XX

a

the American people, because
our
President, has presented; to
Cpngress a most unusual
and his message is .of

KaEb, Voorhis & Go.

the

der of Greece for it has

to

Auto-Lite

Co., Inc,.

that

provides

a
party to a
topic, the' dispute must abstain from voting.
former Mayor And the UN has taken cognizance
of, the conditions around the bor¬
stated:

say

Corp.; Parmelee Transporta¬
tion Co.; Moto-Meter Gauge &
Equipment Corp. (now v Electric

R.

and

on

the

!i -V

;

Security Counjurisdiction, and

the; time.

UN

bypass
talk

But the

7 S
it's
said
that ; Russia 7
might veto'-any plan.- Russia could
not veto.';a ,plan for. thesimple

careful

to

not

y

we

Then

X; brief

v e r

But

Security Council is in session

all of

X the UN. In his

Turkey .and




the

W:-

Co.) and many other
School;: 6-3 .corporations. He was President o

comprehensive

"Manqueen Corp. 5s

Francisco

was
(

to terms.*

eil of the UN has

of- Greece and

Mr;.; Ad¬

OFFERINGS WANTED

EXbrook 8515

' ••'.V'l

be called

not wait.

over nments

ery

Broadway-Trinity

Montgomery St., San

,

shouldn't, do it unilaterally, ' We
should do it only
through a man¬
date by UN.
No, it's said, we can¬

PX'tq

Corp.;-National

Trading Markets:

Tele. 8F 61 & 62

must

s

an

appropriation

and

of " the

Cuban

of

staff of

J. S. Strauss & Co.

'

the United Nations take
action. If
Russia X is
misbehaving,
Russia

dia, came out
X against
the

a

propriations.
:■
X XX;'' 7 :xx7 •'
"No, the $400,000,000 cannot be

155

conclusive.

Station WJZ of the American
Broadcasting Co.,
of New York City and former Director of
UNRRA,
F. H. LaGuar- &-

Expert in the Equip¬
ment Division of the U, S.,
Army
Signal
Corps;
Chief
Yeoman,

DETROIT,
"Commercial and Financial
Chronicle," who will also act as Murphy has

Real Estate Issues

ex¬

bill, if

over

Production

the

California & New York

the

Political Aid to Greece

Railroad; Kansas City
Memphis Railroad; Northwest¬

Checkers

Chairman.

Firm

of

Rail¬

Florida

&

ern

of

Wilfred

Teletype NY 1-953

out

Railroad;

Haute

the bond portfolios of
13 banks. He was also

mittee

Dlgby 4-4950

Terre

the

Com¬

The present

general the hearing

Banking and

The

enacted would attract small busi¬
nesses
into the export field.
In

Bond Department of Shonnard &
Co. and
subsequently supervisee

kraus, President, Bridgeport Brass
Company, Chairman, NAM Com¬

Exchange

AO EXCHANGE PL., N .Y.

&

Mr;

trip

became associated with F. J
Lisman & Co.; later organized the

widely publicized analysis of

Members New York Sfoclt
Exchange
Members New York Curb

Elkin

that

to

as

bill.

stay

port business.

European

a

ams

Natham Report. Herman W.
Stein-

SHASKAN & CO.

road; Chicago, Peoria & St. Louis
Railroad;
Colorado
Springs
&
Cripple Creek District Railroad;
Evansville

planned

to

nessmen

:XX7

last year, but
postponed it.
The Senate.

bama, Tennessee & Northern Rail¬

After

chinery and Allied Products In¬
stitute, Washington, D. C.; author

★

Martin

Ala¬

for

country is

.

the

Department took no posi¬
tion, which is surprising in view
of the department's
long stand¬
ing advice to inexperienced busi-,

trade

tration).*

of

★

of Reor¬

Secretary

Committees

the

skepticism
of

Ex¬
con¬

merce

.

Germany,
financing probinvolving • the Export-Import

em

Central

n

Havana, Cuba,
Sugar Syndicate;
Corporation '<$100,000,000 subsidi¬
ary of the U. S. Food Adminis¬

Nathan, formerly Deputy
Director,
OWMR; author of "A National
Wage Policy"for 1947.",
George
Terborgh, Research Director, Ma¬

★

and

Manager

April 1, at 8:30 p.m.
Speakers
include:

SECURITIES

Oklahoma

office

in

investments

REAL ESTATE

Railroad

ganization

;

"Further Wage Increases—Will
'hey Advance or Retard National

retroactive in

that

of

the

-

Bank is still pending.
It
will
be
recal'ed

as

such

The

disclosed

-

Wage Proposals

be

build¬

which

where

in 1914

career

and

companies.
During World War I, he„was

enacted

existing

in

interested.

Vice-Pres¬

U.

in

wisdom

Secretary of Railways
Development Corporation;1 Vice-

ident

Railroad

can¬

which

siderable

Eu¬

testimony

of letters to the

chairman.

port-Import Bank

W. McC. Martin, Jr.

One

&

building

been

also

Southern

brought

«

committee's

-

countries

is

Most of the,

in the form

was

other

Bank

•

on

exporters.

President

and

was

at any price
due to zoning
regulations and con¬
ditions that have been

^ about through

will

ropean

locations which cannot
duplicated in their respective
neighborhoods. He also points out

buildings

ly

ington, D. C. and Chicago, Illinois.
Mr.
Adams
began
his
Wall

when all busi¬

ago

preferred

that many of these
not be reproduced

sup po s ed

from
Presi¬

Street

years

be

■

and

Department and
Department were

ior the purpose of
insuring credit
and
transfer risks of
American"

to

which

several

purchased for much less than cost

J of reproduction and
:

can

shipyards,

-

mis¬

western

or commer-

buildings

sion,

Dehydrators Association at Wash¬

Jcial buildings, well located and
j well rented, are good investments,
| Mr. Noyes believes, because in
4

head the

estate, Mr. Noyes says, is that rent
control, has arbitrarily set rentals
at the low figures which existed

located real

ir¬

impetus due to
stoppage of the war, desirable

Commission

cases

respective of the
the

Adams

visit

jj office
are

Graham

U.S. Navy and

the

s

e

expected

for

cranes

nresented

Martin is

ney

%

State

Commerce

the bill of
Senators
Pepper and Murray (S. 414). This
is a bill which would
authorize
the Export-Import Bank to set
up a
foreign trade insurance division

William
C h

c

yesterday

Bank, the

Treasury,
the

Import credit:
Mr.

Italian Govern¬

held hearings at which the
views
of the Export-Import

Export-

M

"Chronicle")—The

the

subcommittee.,

rency

to

-

1943 to 1947, also served as
dent and
Secretary of National

connection with well

*

is

a

£ r o u n d
vyork for the
$11 0 0; million

Maritime

held

| take additional

space
for their
I needs in inferior loft
buildings or
< semi-office
buildings or obsolete

this

send

the
to

<§>

Italy to lay the

country" en-1

,

any glutting in all this.
particularly true as,
I
At the present time, he says, "abor item, he says.
One reason why in
| many tenants have been forced on

it

mission

our'',

.

j -sees

European points
hearings on proposed legisla¬
establish foreign trade insurance
division.

tion to authorize bank to

XsLsi^a^x''*(>

that if
regarding the
tared World I
large buildings rectness of the rentals
being paid War II, Mr.f
\ proposed for the midtown, Fifth in buildings and also who careful¬ Adams en-' '•
J Avenue
and
Columbus
Circle ly can analyze the
present cost of gaged in the,
rj
I neighborhoods,
for instance, are operation and future
of>
operating business
JI completed, they will relieve the charges. Costs of operation have building
over-;
pressure somewhat for office
space gone up drastically in connection head electric >>
;
;
throughout the entire city.
He with all types of
buildings during travellingi does not
,

i

\r ,*'

many years.

can

admit

has

maintained

,

new

entire

he

Martin will head mission
visiting Italy and other
of interest. Senate committee holds

;

York,r

where

(Continued from

.

activities, as a Corpo¬
rate
Financing
Consultant
and
Business Brokerage Specialist, at

Tepcn1rct"ina,™tlTC^UN, and then

so,

it, and let
But

you

they're
are.
as

our

know,

at

much

in

They know

as

we

best of

as

do,

so

we

feel about

Congressmen know.

it

this
doubt

point,
as

we

little about it

requires the very

thinking."

~




*

points out—

IN LINE with its long-established "Open ^ He
Book"

^

policy, Metropolitan recently

and

the

—that payments to

'J

asked Marquis James, noted historian

their beneficiaries last year

Metropolitan policyholder, to write

a

1

$630,000,000.; :

Company's Annual Report to Policy¬

holders for 1946.

tC

policyholders and
■

exceeded

V.

to do this

was

unusually well equipped

—that the amount of

because he had just finished, at

new

the request

of the Company,

Metropolitan's. 79

was

program as a—

—that the. gain in insurance

founded. The results of this

set

study have been published by the Viking
Press; under the title of "The Metropolitan

Life, A Study in Business Growth,"
at

any

on

sale

bookstore...

as

the public good." ^

:

primarily by

not you are a

or

policyholder,

Metropolitan

will find- the Annual

you

Report to Policyholders well worth read-

a

v* ing. To get your free copy, just
mail the coupon below.

REPORT

fill in and

..

Reserved fojr Future Payment

.

332,747,697.65

Supplementary Contracts
.
.
«
.
.
,
:j .
.
Policy proceeds from death claims, matured endowments,
and other payments which beneficiaries and policy¬
holders have left with the Company to be paid out to
them in future years.

Policyholders' Dividends Left on Deposit
Reserved for Dividends to Policyholders

•

.
_

*

,

¥ 53,767,508.30

,

,

137,845,377.00

in 1947 to* those policyholders
eligible to receive them.
,
,
1
\

Railroad

Policy Claims Currently Outstanding
.
.
of settlement, and estimated claims
that have occurred but have not yet been reported to

Obligations
...«««•«
Including premiums received in advance, etc.
f;-:

34,012,611.03
if. ;•■■■■

v

"

■

30,523,903.19

*
<£

20,198,797.00

.

i

•

.

TOTAL OBLIGATIONS

.

,

,

|

± .

,

■ .

■

.

.

.

«

.

.

.

\

on

«

,

.

.

Policies

«

.

,

21,000,000.00
26,994,539.16

$7,548,450,103.35;

106,662,750.00

*

.

.

886,963,401.82

86,749,350.06
•/;

•

•

'

335,308,794.10-

•

their policies.
by adjustment of $25,COO,OOQ-

policyholders on the security of

208,908,746.54

in the

aggregate)
V
;
^
Housing projects and other real estate
acquired for investment.
«
v*
,
Properties for Company use ,
.
.
Acquired in satisfaction of mortgage
indebtedness ($29,628,289.62 under
contract of sale) ,
.♦«■>;«
Deposits

Course of Collection,

$122,850,596.70'•
34,885,954.04
j

us
...$83,533,000.00
Special Surplus Funds..
(including $69,833,000.00 for possible loss

^

etc.

«

»

all

.

»

♦

•

•

*

,

.

118,268,923.09

»

OBLIGATIONS

obligations, serves as a

/

•

•

60,326,790.03
^

$8,045,432,384.20

\,

representing about 6'A percent of the

w

fluctuation in the value of investments)

(Surplus)..... $413 ,449,280.85

•-

■

favorable

126,654,058.48

*

^

♦

This fund,

i'X#

.•

.••••••••

TOTAL ASSETS TO MEET

v.;

76,172,195.80

Net

Accrued Interest,. Rents,

.

by $496,982,280.85 \
safety fund is made up of:
J

cushion against possible unthat

experience and gives extra assurance

policy benefits will be paid

in full as they fall due.

A—

the above statement are deposited with various public officials under requirementsof 1 awor regulatory
embraced in this statement is reported on the basis of par of exchange. In the
Required by Law are $6,891,481,278.02, and Miscellaneous
are

carried at $386 528,629.53 in

Massachu^Us Insurance

.

.

800,214,051.76

•

.

Real Estate (after decrease

xeed
Thus, Assets exceed Obligations

m^hor'i^Canadf^busir^ss

•

Guaranteed.

•'.««»$

.

,

Property

•

•

i

i

Loans on Real Estate

Premiums, Deterred and in

Mortgage Loans

i

•

631,841,742.55,
706,047,225.50

-

.

,

i

$1,533,700.00 ate Preferred or
,

Other

89,739,938.35"

$

.

f

530,654,827.57

Cash and Bank

of taxes payable in 1947 on

MisceHaneous Liabilities.

NOTE'—Assets

,

,

v„-

1,958,283,733.97

.

Taxes Accrued

Unassigned Funds

Municipal

^

«

»

.

.

•$4,001,167,645.00
242,887,541.17.

,

*

.

First Mortgage
Farms
,

Made to

the Company,

Other Policy

This

,

$4,244,055,186.17

«...

»|,«

»

Public Utility
.
.
t'
Industrial and Miscellaneous

Loans

Claims in process

Contingency Reserve for

Other Bonds

All but

aside for payment

Including estimated amount
the business of 1946.

.f

.

Canadian Government,

Stockstit,

i

...

Department.)

ASSURE-FULFILLMENT OF OBLIGATIONS

National Government Securities
U. S. Government

Provincial and

i

Under

ASSETS WHICH

OTHERS

Policy Reserves Required by Law .
.
.
,
.
.
$6,891,359,670.02
together with future premiums and reserve
interest, is required to assure payment of all future <
policy benefits.
'
j
;
.

1946

FOR

of December 31,1946, filed with the New York State Insurance

This amount,

or

Whether

^at^entfiledwith the
$26,872,931.16.

Liabilities

Department, Policy Reserves

Insurance Co.
New York 10, N.

Metropolitan Life
1 Madison Avenue,

Y.

Gentlemen:

Metropolitan Life
Insurance Company
COMPANY), f
f:
Ecker, chairman of the board Leroy A Lincoln, pres.
1 Madison Avenue, New York 10, N. Y.
^ ,
(A MUTUAL

Frederick H.

Please send me a. copy

holders, "Qne of

of your Annual Report to

Street

Policy-

Metropolitan's Greatest Years—1946;

Nome.,.

■

.

rA I
/ |
4

———

J

.State-

City,.

—

'

of how private

earned, the Company has found it pos-

OBLIGATIONS TO POLICYHOLDERS, BENEFICIARIES, AND

i.

j

history,

in service to policyholders.

BUSINESS

:

of the

continued decline in interest rates

a

(In accordance with the Annual Statement

Set

one

story of con¬

operations/for 1946, he tells
tinued progress

creased costs caused

of the Company's

..

—"vivid demonstration

;>7-that^;despite>ir^nd toward in¬

In Mr. James' report

\

,

enterprise wor^for

Company had

lowest death rates in its

;;

in force

high record.

a new

—that the

■

a

Metropolitan's housing,

characterizes

he

study of Metropolitani' s operations from the
time it

/

than

Metropolitan's investments. For example,

in business.

years

more

things, he discusses the social value of

purchased in 1946 topped anything in

three-year

a

much

dur-

/v;

:

.

compilation of statistic. Among other

insurance

new

:'

";i

Mr. James' report is

.,

people bought

at the same rates as

year

ing 1946.

Metropolitan policies in 1946.
Mr. James

coming

.

Ordi¬

on

and Industrial policies during the

nary

;

—that 2,400,000

sible to continue dividends

;

v'

{

J

*1860

the commercial & financial chronicle
Due to

this large

C

volume,
necessitating
setting aside of proportionally
large amounts in unearned pre¬

?

By

E.

A.

This Week
Net

VAN

1946

by 25

sults

representative stock

The average increase of the 25
companies was 31.5%,.

considerably above this

average were made

the

reports

greatest

companies report increases in

|Falls and

Hanover.

increase

excess

of

companies,

1946,

well

as

Table

In

other

(000's omitted)
1945
1946

1945

and

It

North America and New

\ ■*:

-

;

Insurance,^:
A^Hcultural

Bdfcton

Insurance

-cL

*

yo

36,454

46,369

9,615

...

-

■

:i2,808

dj

.

.27.2

V

,

-

7,1.94

9,837

be

16.9

Fidelity Phenix..^.
Fl^e Associatlon-_____^>

25,370

..30,251

FH^emen's

20,916

'Glens

11,370

(Newark).

FKinklin

Fire

Falls

13,243

National
NOW

Co,

York

;;

Fire

U.

S.

49,708'

16.3

28.831.

28.5

3,190
5,543

.

Fire

&

2,494
+2,159

+

15,405

—

+

,

.

37.3
-

896

-

—

28.4

Fidelity-Phenix

Firemen's
Fttmklin
Glfens

Glbbe

—2.32

Fire

Hertford

Fire

A

„

U.
;

;

!+___s-J'

—

2.58

0.71

1.21

0.48

0.94.

3.03

1.53

2.74

2.89

0.53

0.37

3.15

.0.15

1.26

—0.69

0.17

•

—

0.61
1.57

—1.51

0.69

—0.44

1.5.3

—1.85

2.63

0.41

*0.03

2.82

2.77

1.91

1.59

0.35

1.25

0

0

.0.20

;

1.26

1.33

0.08

0.01

i

1.61

1.75

0.26

3.73

3.80

1.25

—0.69

3.65,

2.98

1.41

0.07

0.77

1.48'

1.64

3.74

4.08

2.41

2.60

1.89

2.03

0.18

1.47

1.52

0

0

1.16

1.25

0.36

0.14

3.41

3.58

0.33

0

'

2.34

—0.51

1.64

.

0.49

.

—2.00

.

—0.67

4

0.64
0.59

.'

0

—0.26

0.12

—9.12

0.72

2.58

0.22

0-65

—0.54

—2.69

1.12 >

3.53

1.34

0.84

1.81

—1.31

1.98

2.23

1.90

0.92

2.97

—5.30

3.11

0.91

0.87

.3.5.3

—0.05

—5.77

—1.77

1.71

—6.14

1.62

4.14

0.01

10.10

—1.63

—0.26

•3.96

5.78

—0.90

6.06

0

0.94

3.06

0.68

'

share

'

f''■

results

1

'■'
are

Service.)

"

:

0.94,

'

0.46

0.68 *

''

*2.16

2.65

-

on

a

parent
;

,

company
*

basis,

and

have

"

,

,

been

1.86

2.85

1.79

3.04

:

-

2.81

0.10

3.96

3,.§3

0.07

1.65

0.04

4.15

0.27

A

' '

.

from

-

1.66

'

0.52

computed

;

-

2.81

figures

Staff

4.74

•

Bank

published

in

and

total
year.

INSURANCE

net

," '

operating
'

.

loss

for

New

York

Stock

Telephone: BArclay 7-3500

income

Bell
A.

leviec

"statutory" underwriting re¬
sults, which in 1946 were mainly
losses, while 1 65% of investment

ItO BROADWAY, NEW YORK
5. N. Y.

it.

are

on

Exchanr*

Teletype—NY'1^1248-49
'
t
GiBbs, Manager Trading Dept.)

in

the

is tax exempt.

form" of dividends

Thus, ..bond interes

and 15% of dividend income con¬
the principal income b

stituted

the companies subject to the-tax

The

American Insurance Co.
Great American Insurance
Co.
*

Grinnell Earnings

:

Group Issues

Grinnell

published
holders

4»"

Corporation

earnings

amounting

to

;

STREET

Security-First National

14,

Bank

its-stock

to

$5.68




TELETYPE: LA J7T.

Sblttct
EOSTON

•

I

'LA

JI0

per

•

PHILADELPHIA

•

,»

•
ST. LOUIS
SAN FEANCISCO
•

been

DETROIT

CHICAGO
DALLAS

teresting to

note-that

'It is in
the

first time that earnings have

CeHHlctlMf IVlu* to

NEWYOKK

share for the 1946 year.

SEATTLE

published

tion in 1892.
new

trend

since

com

ever

incorpora

It is indicative of
in

the

corporate affairs.

scarcity of labor rules out

J (Continued

'

v

on

1698)

page

«As-

*

;

Denmark's

Bank

holds

Frere

in

visiting

ap¬

States

is

tional

is

been
to

com¬

finance

in

connection

with

the

Bank

of M-

United

for

Interna¬

The

general

future of that
institution, its pos¬
sible
utilization
by
the World
Bank and

Fund, and its suitabil¬

ity for
German
War II

;•

*

supply.

a

the

Settlements.

Government's modernization
*

—

World

$50,000,000 World

purpose

-j

;—<

Possibly another interest

connection

reparations

in

for

with

World

matters of

are

terest

in

use

*

special in¬
Marcel van

Belgium.

Mr, Maurice Frere of the National
Bank of Belgium has been ex¬

pected

disclosure

in

the

United

States

in

connection with this—and
possibly
other financial matters^—but
has

delayed his departure from Brus¬
sels, pending composure of Bel¬
gium's internal political situation.
The amount to be
sought from the
World Bank is not
known, but

probably

will

it

be

related

Zealand,

of

BIS, M.

Board

of

the

arrangements Belgium
makes for Wall Street credits.
'

)*:■-*

♦"

: *:

-

*

*■

<

Ansiaux of
director

and Hubert
an executive
World Fund, is

BIS,
Brussels,

of

the

listed in the last annual report of >
the BIS as an alternate director 6£
that

bank.Jv;'

::

;

;(Continued

on

■■

' [

1692)

page

;

to

whatever

:

.

Frere himself is Chairman of the

Australia and New Zealand

lift

••

bankof
NEW south WALES

1"

(ESTABLISHED

Paid-Up Capital
Reserve

*

V

"!

1817)

£B,7R«i«0O

Fund

"

Reserve Liability of Prop.i* 8,780)118.

Pending receipt and decision on
Belgium's coming application to
the World Bank, action on
Lux¬
emburg's $20,000,000 application
is likely to be held
up. Luxem¬
burg's economy is closely linked
with

Belgium's, since there

customs

union

countries.

burg's
of

brother

the former
Prime Minister of Belgium, is one
of the managers of the

Netherlands, and Poland.

pany's report states that this is the

TELEPHONE TRINITY «7I

Firemen's Insurance Co.
lianover Fire Insurance Co.
North River Insurance Co.

CALIFORNIA

a

'

material

has

^

Bank of America

acute

Applications have also been re¬
ceived from Chile,
Czechoslovakia,
France, Iran, Luxembourg* the

ACTIVE MARKETS
Home

impos¬

on

Belgium is expected to apply
shortly for a World Bank loan.

the

.

Members

economic

.

pact of Federal income taxes in
both 1945 and 1946.
The reason

Laird, Bissell & Meeds

Its

on

also ,has

program.; *.;v-

It is. of interest to
observe how
relatively moderate was the im¬

for this is that the taxes

and

Politically, the working
classes hold the power
through
their majority in the House of
Commons.
Economically,: the

Developments

raw

.

v

de¬

Danish loan applications

that

•
e

STOCKS

and

imports of capital equipment and

were better in 1946 than in

1945, for seventeen of the com¬
panies, and lower for eight. Only
Security of New Haven reports a

BANK

loan

pleted.

Best*

*

work

plication for

«iMb

taxes,

is

advocate It

sibility.

the

'

French

on

*

9.98

r

.

solution

who

WASHINGTON (Special to the
"Chronicle")—The World Bank's
work on the
application of France for a $500,000,000 loan is

—0.22
,

■'

r. :

political

a

re¬

cost

completed.
A
French
missions*
headed by M.
Baumgartner, pres- the
ident of Credit
National, is await¬
ed by the Bank.

0.85

1.26

3.73

Those

fj

\

.,

Staff

2,59

—0.53
•—

.

0.61'

.1.20 :S

0.01

■

which

In addition to those

4.74

.

1.2.1

"

.."I-.

\

2.25

4.53

...

;

*0.07

0.49

0.76'

1.12

i

0.31

0.77

0

'

alternative

completed. If
file, further applications from Belgium,-*
Italy, Turkeyr and Mexico expected. Polish official awaifid.

6.97

1.43

favored,

,

0.99

6.13

0.53

The

flation.

living thus achieved
in theory at
any

Staff work

0.56

*0.19

—1.99

is

urged to

World Bank

1.52

1,38

.

*

1.35

—1.20

is

'

—0.8 V

1.87

"

0.80 I*

—2.31

1;25

1.45

0.98

—0.58:

2.04

0.55

•>.'

3.82

0.63

—5.81

>

*0.10

0.02

•

absorb

2.82

*0.10

0.35

,

5.60

*

2.89

0.04

1.49

.

2.83

.

*0.02

1.00

—0 07

v

per

1.39

3.70

V 0.34:

♦Credit.
Above

0.20

3.29

i

the output.

aban¬

.4.05-

0.94

.

t-1,18 ;
.1.15

disadvantages through the

3.64

-

,1.40

—0.86,,

0:40.
—1.79

0.75 ;

*

2.49

1.63

—0.°2

Fire & Marine

Fire-—

Bulletin

3.25

1.74

Marine—

Insurance—

(Note:

would

2.99

-<—2.32

—4.63

Fire—Li—i:——•

Paul Fire &

S.

of the cost of

4.03

o.''

3.09

York

Jitytingfield

4.09

3.72

0.04

0.87

—1.31

f-SCurity

2.34

0.83 '

1.54

arrived

taxpayer hundreds of millions of
The increase

0.02

0.01

who

grave and

living would set into motion the
inflationary spiral and would be
accompanied by an epidemic ] of
wage disputes, to the detriment of

pounds every year.

$

3.10

1.25

—3.52

subsidies

2.10

*0.10

supply

be

incomes

suffered

rise in the cost of living since
1939,
Moreover, the rise in the cost of

hopes for

must

alternatives

government

move

1946

$

1.06

—2.62

two

4.72

—1.94

—2.73

1945

$

.

unfair

reduction would be
fixed

'

2.2,6

—0.42

2.08

f-

cost

Consequently, they be- do not make it plan what kind of
that the scarcity of
goods deflation
they
have in mind.
only be overcome either by They may favor an all
around
allowing prices to rise or by mop¬ cut of
earnings in order to elimi¬
ping up the surplus .purchasing nate the
surplus purchasing power.
power through deflationary meas-?. If
so, they are guilty of wishful
ures.
*
thinking.
"In
existing circum¬
In some quarters the first of
stances, any wage cuts are simply

3.12

—0.35

0.72

'

the

can

Operating Profits

1946

$

of

ieve

;

4.50

1.48

-

.1945

$

already

real

doned.

Total Net

Income Tax

1946

$

have

that

increase

2.00

6.29

Brunswick—__n..——'

Fhbenix Insurance-^---—
Fhov. Washington—

ihtl-

$

conclusion

an

0.15

1.26

,

Insurance———
Insurance Co. of No. Amer.
National Fire—

River

1945;

Federal

Inv. Income

1946

'

people

many

the

such

income

0.50

—1.19

at

—0.79

1.90

Bfome

.

Einzig

-

output of civilian goods.
As
of the fuel crisis, how¬

0.05

0.46

..

Net

to

result
ever,

—0.09

0.34

■■

Federal

,

have

Paul

•

8.92

—2.66

—0.03

after

Dr.

themselves

2.82

—7.15

—1.19

profits,

Of'

demand
would;
then
be
eliminated through an increase of
he

with

*

•

and

erately higher for all but four of
the companies. Total net
operating

448

—31,648

Loss

or

—3.53

■

1,228

:

from

adapting

a

those

the

prices

Net investment income
(before
Federal income taxes) was mod¬

1,323

suffer

is

to

prevention

un¬

1

;

which

lhe

0.39

&

1

:

...

this

due

this basis, only nine of the

income taxes.

the increase

living would be accompanied
existing circumstances by a

corresponding increase of wages
so
that by the time the
process
is completed the surplus
purchas¬
ing power would be almost as v
large as before.
The only classes *
whose purchasing power
would

Until
assumed-

,

of

com¬

1'

•

•

of

0.10

—1.11

Falls__;

•

0.45

0.32

V

-

:

—0.06

Hhnover

Nbi'th

0.48

206

1,872

Underwriting

—0.69

(Newark
Fire

Republic—•
Gtfcat American—
'■

New
Few

0.92

in

the

1945

4.54

of

gap
—the existnce

II

Profit

1946

2.60

—2.67

0.44

■

—

Association

1945

the

that

Earnings Per Share-

Equity Increase

—9.71

f

—•

611

+

Net

practice

of

was

-

—

132

—

.

Reserve

1.62

0.80

485

1.016
—'

1,1551

$

—1.01

of the

807

230*

—
.

'

28.8

—2.54

—2.55

_~

Insurance

665

463
—

_

66

+

26.5

*

—1.52

Agricultural Insurance
Btteton Insurance

plile

927

+

TABLE

Insurance—

.—

40

.27.4

.

the

recently,, it

over,
National Fire, New York
Fire, Phoenix and Security. Many
companies, it will be observed,
had
greater
net
underwriting
profits in i946 than in 1945., The
figures shown are before Federal

4,544

2,906

271

,

1,408
3,149

'

Prem.

1946

—

^ *12.6

37.8

-Net

Cdhtinental

.1,114

35.4

19,777

$

—.

131

655,905

1945

—:
.

—

-

-.28.1

10.318

Statutory
Underwriting

Aetna

479

—

1,365 *

.

28,502

509,056

>

1,946

supply and
de¬
mand would thus be
restored. In

in

goods.

underwriting

-•• •.

of the public, and equilib¬
between

public and the

derwriting losses in 1946, viz:
Fire
Agricultural,
Association,
Franklin, Globe & Republic, Han¬

971

—:

+

-

1,591
465

35.2
.

—-

—:

55

"

Fire__

1

purchasing

rium

power

figure,

of

power

purcha sing

after

25 companies
experienced net

2,002

—

—

27,714

7,514

On

current

(or losses)

panies.

1,712

—

705

—

27.5

13,835

21.902

—

41.9

i.

19,108

22,377

Marine^

477

—

195''

-

—

37.1

11,632

-

23.9

.

of

surplus

.

that

conservative

a

amount

policy of deflation in

a

the

lands

shown.

increasing

an

adopting
rate,

me

volume

earnings

970

j

——

gap

purcha sable

'

33

+

32.4

14,113
10,041

Totals

i-\

81,135
95,039

9,083

...

Insurance.-—

^Jtingfield

13,871

22,434

rHJtth River
Phbenix Insurance
•Fitiv.
Washington^
Si. Paul Fire & Marine

Security

42.1

29,204

142,736

Amer._

Fire

Brunswick

New

•v

-

5,544

74,539
No.

+

1,296

4,923

of

800

+

•

557

—

2,360

Fire

Insurance..

Urtfeurance

.—

■

656

■—

9,773

____

—

1,612 *

+
—

21,303

Insurance

•'

35.5

•18,815

-

'

36.0

61,267

Fire

Httttford

■Hbme

44.7
.

the

between'

*

28,446
v 12,757

.

'+
•

<6

.

304

—

19.2

4,473

American

Hfttiover

■

16,451
'

9,415

Gltibe & Repubiic_,.J'_—
Giftat

'

is

observed

ture of the

1946

306

—.

26.7

37,220

Insurance

nate

of

1,165

'

1,137

—

-42.1

.

31,836

Otthtinental

—

talk in London about the need for

share for the years

1946

will

analysis

an

1,893

1945

I

because of resulting discontent of

order to elimi-

volume

II,

measures

During recent weeks there has been

in

many
of
the
statutory under¬
writing losses are turned into un¬
derwriting profits, and these lat¬
ter figures represent a truer
pic¬

(000's omitted)

Increase

regarding policies
purchasing power

deflationary policy,;

adopt radical
working classes.

allowing for recapture of 40% of

Statutory
Underwriting Results

,

•

Continental

the increase in unearned
premium

Percent

•

$

A«tna

"

•A
•

•

to

In

per

reserves,
t'

viz:

as

I.

Table

earnings

I

Net Premium Written

re¬

moderate

1945, as shown
1945, nine com¬
panies out of the twenty-five were
able to report
underwriting profits
on a statutory basis.
:;'VY
'V-l

•

TABLE

;

Dr. Einzig calls attention to discussion in Britain
of deflation to eliminate gap between volume of

in

will not

in

Moderate increases, below 20%, are
reported by

York Fire.

' "

with

Fidelity-Phenix,
achieved*
statutory underwriting profits in

Increases

three

By PAUL EINZIG

two

40%, viz: Agricultural, Glens

Continental, Fidelity-Phenix, Insurance of

j

44.7%;

;

*

.

and

by Agricultural, Boston,

with

from

•'

*

and purchasable goods. Analyzes various proposals and
concludes
Labor Government, despite need of a drastic

fire

iFire Association, Firemen's, Franklin, Glens
Falls, Great American,
'Hanover, New .Brunswick, Phoenix, Providence - Washington and
I Security. It will be observed in the
accompanying Table I that Fire
Association

show

'

large losses for the year 1946. De-spite these conditions, however,

| insurance companies aggregated $655,905,000 compared with $509,056,000 in 1945, a gain of $146,849,000, equivalent to 28.8%. *
;

combined

reserves,

excessively high fire losses
X'946, statutory underwriting

Insurance Stocks

—

premiums written in

mium

DEUSENi

1947

III

ihe

.

5

2?

expansion in

premium

Bank and Insurance Stocks

Thursday," March"

for

between

the

j*
:

uenerat

Head Office:

'■

is

two

needs—as

housing—could he met by the
ir&ncs, of which

loahrp| ^el^fah

30th

'J
£223,163^813

29

/

1

*

OFFICES:

Threadneedle Street, E. C. 2 !
47.

:

Manager

George Street, SYDNEY

LONDON

;

.if

£23,7Y»>t0CR

THOMAS BAKER HEFFER,

Partly, at least, Luxem¬

reconstruction

Afgregate Assets
Sept., 1945

s

Berkeley Square, W. 1

Agency arrangements with Banks

threnghout the

D.

S.

A.

.

,;(f

j.)




EvmwcmeR
HOW YOUMIGHT SPEW?
A MiumOOi

I'ijt

During 1946} The Equitable Society
in benefits to

than

more

What
huge

better

use

of

sum

a

policyholders 'and their families—an average of

million dollars for each workday in the year.

could

make of such

you

than to make it serve
...
.
to help keep a

money

family together when tragedy
a

to

a

basic human need

some

strikes, to send
in business,

child to college or start a son
assure

distributed 287 million dollars

financial independence to:someone

for

twilight

of life?

years

The 287 million

achieving

a

two-fold objective. Aside from

primary purpose

for their

the

of providing systematically in ad¬
future/security, they are helping to

inflationary forces at work in our economy.

Equitable

used for just such purposes
as these. Widows,♦chikken and other beneficiaries,/
for instance, received Id! million toward their sup*

dividends, thus
\ :
.

By investing more of their earnings in life in¬
than ever before, the American people are

combat the

dollars paid out by The

as

surance

vance

in the

policyholders

to

payments

reducing the net cost of their protection.

Preserve

Value off Dollar

Society during 1946 was

The decline
continues

to

in the ^Veal"

be

matter

a

value of the dollar

of major concern to all

benefits, including

of its policy¬
country, the
management of The Equitable Society will continue
to urge the adoption of a national fiscal policy which
will preserve the "real" value of the savings of the

totaled

American

port.

Another 35 million was paid out as retirement
Through Group Insurance, benefits of over

income.

56 million in

death, disability and

helped relieve distress

pension payments

in workers' families.

Other

dividends to policyholders,
95 million dollars.

thinking Americans. In the interest
holders and all other

The

3,500,000 members throughout

Equitable Society is the

THOMAS I. PARKINSON,

the land,

promise of family

together in this great co-operative
enterprise, they have increased the amount of life
insurance they have in force by over 1350 million

security. Joined

dollars during

1946

dollars worth of peace

.

.

.

now own over

10H billion

cf mind.

Dividends Reduce Cost
The benefit payments

SERB FOR THIS

TRIE BOOKLET •
If

you

are

>

distributed by The Equitable

of the years, together with
the funds held to fulfill present policies, exceed by
1300 million dollars the total amount of premiums
received by the Society since its founding. This year
alone nearly 52 million dollars has been set aside

Society over the course

own any

Equitable Life Assurance

Society of the U. S.,
Avenue,

Society of the UniteJ States is a
incorporated under the laws of New York State.

Equitable Life Assurance

mutual company

393 Seventh
N. Y.

New York 1,

Name

Street

City and State
The

insurance or
you will

interested in it,

find " Your Policy" well worth
reading. Send for. it today to
The

our

; ':

people,

/

To its

people of

President

THE COMMERCIAL & FINANCIAL CHRONICLE

1662

ADVERTISEMENT

Thursday, March 27,-1947

ADVERTISEMENT

ADVERTISEMENT

SOUTHERN RAILWAY; COMPANY
'

%

'

'

*

'

<

.

'

,

'

'

'

1

■

.

Fifty-Third Annual Report for the Year /Ended December 31,1946
Richmond. Virginia, March 25,
To the Stockholders of
SOUTHERN
The Board

COMPANY:

RAILWAY

of

ber

31, 1946, which is the annual report it is contem¬
plated formally to present to the stockholders of the
Company at the annual meeting due to be held on
May 20, 1947.

Net Income (after taxes and

to

The year 1946 presents in its broadest aspect a record
of frustration. The Country looked forward, at the open¬

After

and with bright hope for
production of civilian goods which the
world so desperately needed. Instead, through the year
there were continued labor difficulties and strikes, inter¬
ruptions, shortages, controls, embargoes, and constantly
increasing and inflating prices, all contributing to a year
of extreme managerial difficulties.

post-war conditions

increased

been

1940

1945

to

make

is

net

a

as

1939

.1941

ment,
>

,

/

,

1944

I',";;'-

23.41

.

'V

,1943

,

"

y. Z"Z 1945,

■

,

1946

and

4.81

,

•

to

was enabled to
dividends to the

continue

was one of paying the
Aside from nayment of run-*

ning

:;V:ZV/'

The Year 1946

,

(1) Expended

property

Operation of the railroad in 1946
declined to $212,041,109, a decrease of 14.34% from the
Operating Revenues of $247,536,833 for 1945.
business

of

handled

;■

;

.-•

,

Freight

moved

Average
Ton

<ZZZ VZ-

(tons).————

distance

Total

revenue

Average

of

Total

1946

K

62,306,399

;•

.

payable

63,605,131'

14,449,343,889

mile—

.O.—--

(miles)—;

—_

miles

v,/.

passenger

mile

passenger

revenue————

in

items

of

$6,894,600, the

in 1945.

same as

as

Dividends of 5%

:
,

share

ner

; 193.51

2,605,756,803

2.2200

Common

Stork

sion

Fnstallmefits we?e ronWmmd
continued.
The

Rise

in

in

shown, freight revenue declined to $164,126,085,
compared with $174,397,392 for the previous
year; a
decrease of 5.89%. Passenger revenue

■'

?,

declining

operation.

the United States.

Contraction of

;

Z-a'

revenues

A

."ZV:Z Z,zZZ\'Z;\ ZZ;

(1)

from the high plateau

of the
to be expected. What
so clearly foreseen was the violent
enforced inflationary increases in
wages," retroactive to
war

years, 1941-1945,
could not have been

inclusive,

few

gross

was

conspicuous examples

Prior
ton

to

40%

(2)

within

is

coupled with

$2,762 each,

and in prices of materials and supplies,
failure to obtain, prior to
1947, the relief
which increases in
freight rates would have afforded.
a

costs, to be
Report, the
unable to reduce operating
expenses proportionately to the decline in
gross revenues
of

not

its
of

of

(5)

/<:

as compared with $159,711,715 whichordinary operating expenses of 1945, exclusive
extraordinary charges due to rapid amortization of

of

war

the

facilities.

The effect of the combination of
declining revenue and
expense, is shown in ,the high
transporta¬
tion ratio of 41.01, as
compared with 30.58 in 1945, and
an
operating ratio (i.e., the total cost of operation as
compared to revenue) of 81.02.

of

a

over

announced

Railway Tax
carry-backs

of

approximately $2,000,000) declined sharply,
having
amounted .to $16,49.1,195 for
1946, as compared with
$43,044,685 for the previous year, a decrease of
uvucaa(;
will

rlv
nearly

be

80

seen

out

amounted to

from

of

78%

the

dollarZ
dollar of

each
more

than the

table

gross

taxes

comparative

ratios

of

the

took

revenue,

and

Company's net income

(after taxes and charges) of
$9,252,270 in 1946.
The

^pvpml

^

-

pnfpanr5nc<

;.

for

•;

during

1946.

increases, and

•

•

:

,y.

.

;

many more for other

of

revenue, were
1946

as

follows:
1945

■

"

a

nation-wide scale to the

railroads by the twenty railroad unions
during the latter
m/tc
*

Part1+?f 1?45».'th® handhng ■ of these
the Spring of 1946,
^ :a^ Emergency, Board,
m

demands

finally

in awards in arbitration

of increases

of

16%

per

January 1, 1946, for all employees,

These increases,
however, were rejected by the Broth¬
erhood of Railway Trainmen and
Brotherhood of Loco¬
motive Engineers, two of the
twenty unions involved,
who thereupon called a strike
which stopped all train
service in the United
States, and was about to

Way

Maintenance of Equipment...
Traffic Expense
General Expense '

Incidental

Expense

_Z

IIIIII

I.IIIIIIZ
.ZZZZZZ
ZZZZZZZZZZ

41.010
15.510
18.650
1.760
2.910
1.180

22.320

70.270

7.780

of

17.390

paralyze
emergency the President of the
obliged to intervene; and the
dispute
was
finally settled, under his direction, by the railroads
giving an additional increase of 24/2% per hour to all

88.800

87.660

work.

30.580
12.750
1.290
2.220
1.110

Totals
Taxes

Grand

Totals




the

Country.

United States

In

on

r

..

1.1^1,

:

this

was

employees, and the striking employees going back to
.

•

'

•'

r;

to

80%

their

of

interest cost basis of 1.69.

an

1.000 automobile

box

the Company had

on

1323

(b)

25

Diesel-electric

(c)

lo

6,000-H.P.. Diesel-electric

83

ordered itk

cars

Equipment Trust, Series
order on January
1, 1947:

(a)

additional freight
cars;

modern

switchers;

streamlined

■:v

road

:

.

freight locomotives;

passenger

coaches

and

.

r\

•

A-

and

all-room

cars.

The freight cars and the
Diesel power just referred toare expected
early in 1947, 80% of the cost of a consid¬
erable proportion
thereof having been financed

the sale'

through.

as

2^ ^outhern

December 15, 1946. of $7,600,000 par value
Railway Equipment Trust 1%% Certificates,,

Series "MM," sold
agree-

81.020

Maintenance

LL,

"

wages and certain changes in labor
on

1 (\A A

ordered

sleeping

i
Proposed

.

ni'ii/M.n.'l

1945 and also to be
included in

impor¬

(d)

expense.

resulting,

VV-.'

•.

as

sold

was thus severe in its effect on the
The dollar rise in the
wage bill was more
severe and cost the
Company a great deal more money,
because wages represent such a
tion
large proportion of

+i

-New Equipment

the equipment manufacturers were constrikes and material shortages, and the

^In addition to

The rise of prices

^

'in¬

by the sale of $7,880,000 par value of Southern Rail¬
Equipment Trust 1%%
Certificates, Series "LL,'f
these .Certificates, issued as
of September
15, 1946, having
been

Wages and Pay-Roil Taxes

♦.

-

the Company.

cost

(II.)

n

of

way

capital improvements, the railroad
industry, unlike
other businesses, was unable
during -;the year to
obtain relief by
increasing its prices, as will be seen.

ments ha(i been

Ex

as

increase

.,

'

.'.vV

Increased

interim

Fourteen of the switchers and
the six 6,000-H.P. road
freight locomotives were financed

locomotives', approxi¬

and

nf

OperatingTxpensX, andlaxes expressedV'^Ihfnumber
cents out of each dollar
of
Transportation

.

most

Uxua/0

following

-

car

tant supplies, added
enormously to the cost of operation

annual

the

in ootammg duriiig ithe year onljr
4,UUU-xl.l
Diesel-electric* road passenger
\
At.
in, 1944, financing for which was;
arranged in 1945, together with
(b) fifteen 1,000-H.Pi.
Diesel-electric switchers, and (c) six
6,000-H.P. Dieselelectric road freight locomotives.

cross-ties increased from 60% to 119%
the same period, treated oak
cross-ties, for example, now
costing $3.00 each, as compared with $1.81 in 1940.

61.69%.

a

revenue to

A

^ese^

year's results.

With the ending of Excess
Profits Taxes,
Accruals (reduced by a credit
from tax

proceeding; known

.

The cost of lumber and

skyrocketing

As

40%.

:

While these

the
order

approximately 17.60%^

y?

during

$171,791,729,

were

82%.

in

this

rescinded, and in iieu thereof freight?
increased an average of

were

V;v*.'

50-ton, 40-foot,;steel-sheathed box
while in 1941 similar cars were bought

increase

were

order

was

during 1946;

-

(4) As of June 30, 1940, the average
price of coal was $1.86 per
ton, while it reached $3.39 per ton as of July 31,
1946, an increase

only

$35,495,724, as compared with the previous year, but
operating expenses for 1946 went to a new high level

j

:

.

.

16%,

.«1

fucceeded

Increases in the price of Diesel-electrical

mating

result of these increases in
wages and
dealt with in detail in a later section of this
was

an

*

'

obtain and there
laid 26,569 tens of new
rail; and orders for 194T
have been
placed for 35,000 tons;-.:;\ /' V:
^ 'v

years.

approximately $3,900,
(3)

a

Company

two

are:

its

Under

1945. the price of new .rail .was $40.00 per ;r:
1946 reached $48.60, while a furth^h increase
va/ . tne^ SIX
lfir>fimnt'!\roci
1946, ran the price up-to $56.00, an increase
locomotives

The current price for

January 1, 1946,

As

January

and by April

announced in December
of

\
•'
rV'"

;

in effect.

was

were

;

.

interim in¬

1,

VV;a/; New Rail
During 1946 the Company was abie to

year

-

thereof the

1946, ian

20,

lieu

1946, which for the Company
5%, and produced approximately $4,000,-

additional gross

1946, the prices of almost everything
which the Company had to
buy reached extraordinary
heights, contributing to the high cost of the year's

by rail of the armed forces of

;

in

and

^estimated that based on the 1946 volume of traffic*;:
these increases will produce approximately. $20,000,000;

Living"

aggregated $33,842,343, a decline of 41% from 1945, and of nearly 43%
from the high war level; of 1944,
reflecting the fast
mass movement

lnc,re£,s PZ

^

quarterly,

Prices

During the

.

effective January 1,1947.- :v"^H

As just

as

162.

>

nnarterlv

P y

the Company's "Cost of

$57,361,906

issued

Parte

Stock, ond of $3.00

navable

i
..

.i" general v0 /o in
^ wtp) the.raijroads on April 15>
with the Interstate

effective July

July 1, 1946,

i

coming

Many months of hearings throughout the United
States
followed, and finally on December
5, 1946, the Commis¬

"v?'''?•

the Preferred

on

the

};.

rates

installments, were

;

2.2010

$33,842,343

the

on

of

Z Z"Z?

_.

000 for the six months it

•

and for other corporate needs,- and (b) cash of
shown in the balance sheet, the latter being reducible
were not
cleared through the banks; as of close of

v-v"jy

..

^ 1

crease,

1946, (a) U. S. Tax Notes in the
$27,660,000,.»as reserves: against 1946 taxes,

year.

...

averaged about

1947,

which

an

adequately

Freight Rate Increases

,,

This application was
denied
Commission granted on: June

31,

JDividends

13,465,541

172.60

'

amount

business for the

$174,397,392-.

8,834,069

1,524,760,826
per

by

December

on

'ZZZ;

improvement,

Commerce Comfreight rates by approxi¬
mately 25% and to make the increases effective on
May 15, 194-3, on one 'day's notice,

1.162(S

1.1360

,

left

$27,220,429,

15,009,130,558

revenue——————*-.-;,; $164,126,085

revenue

principal

„

1945

>

f

Paid dividends aggregating

Had

v 'i;

,

filed a petition
mission seeking to increase

Used $4,858,776 in debt retirement (a
large portion of which
expended to purchase the stock of The Atlanta and Charlotte
as compared with $16,426,834 in

(4)

235.97

passengers—.

journey

Pacsenger
Average

ton

per

which

Line),

(3)

without abatement.

"/

(2)
was

Air

'

rolling

\

::Zndfi'
1946,

_

receipts

—

freight

Number

Y

with

on

Z

ZZPq/r

'

year,

went

result of this long term
program of

'Z;ZZZZ';Z;'-:

treasury cash for ' capital improvements to the v1
and equipment) in the amount of
$12,880,949, as
$1-5,871,428 so expended in 1945.

(road

compared

year wefe:

231.91

miles

Average

the

and

(miles)—--

moved

during the.

a

_

$44,613,714, and fixed charges, the Company
'(as to larger items only):
a"^.;

The Revenue from

volume

payable

As

A

amounted to

Operating Statistics

therefrom, compared with the previous

taxes

expenses,

,/

bridges, laying .heavier rail
and installing mechanical aids to
opera¬

tie plates,

years.;

•

'

I-'

not curtailed.

was

equipped to handle the expected traffic

policy^ of the Company for 1946
bills and conserving cash.

and structures and equip¬

way

the property, both way and
equipment, continues in
excellent condition- of
maintenance, and is

/

With the cessation of war inflated revenues in
1945,
there came a
necessary contraction in the money available for larger corporate purposes, and the financial

.

plishment of those prior years in making capital improve¬
ments, in devising improved techniques and in reducing
debt, which began to "pay off" in 1946.

The

V

Use in 1946 of the Company's Financial Resources

;

1

tion and maintenance

'..15.81

■14,84'^;/v-V'V;...
:ZZ;i0.24
•■■V1
:

••

.

-r.

?

roadway for 1946 amounted
expenditures for 1945 of

on

The program of the reconstruction and
repair of
stock and of
buildings and

•

.

as compared with

Maintenance, both of

.?

12.61

1942

'

VV,

;

$6,037,548,

$5,997,638.

.

stockholders is attributable in large part to the accom¬

-

Capital expenditures
to

$ -69 " •
3.35

1;

materials, there
1946 in maintaining the

skimping during the year
physical condition of the property.

of Common Stock

'

V.

of labor and

was no

follows:.
.

Condition of the Property

;

■

>

Despite the excessive cost

it had done in the six prior years

and

V.:'

/

the

on

1940

understandable; that it

income

5%

of

1946,

"

supplies in its history, and with a minor fraction of its
needed rate increases granted for only half the year, did
not make as substantial progress toward its physical and
as

increase in 1949, and agahi in. 1952, became

.effective January 1, 194*.

Net Earnings Per Share.

the highest cost level of wages and materials and

financial betterment

as

Year

That the Company, confronted with decreased*revenues
and

taxes,
costing the Company an estimated, minimum additional
amount of over
$2,500,000 d year for the years 1947 and

Preferred-Stock, the
balance of net income in 1946 was equivalent to $4.81
per share on the Common Stock. Net earnings per share
of Common over the period
1939-1946, inclusive, have

ing of the year, to a period of rapid economic readjust¬
to

dividends

in

Under the Grosser Act, passed
by the Congress of the
States in 1946, further increased
pay-roll

.

charges) for 1946 amounted
$16,298,721 in 1945.
times

wage

United

as compared with

Fixed charges were covered 1.73
compared with 2.19 times in 1945.

,

Foreword

the

$9,252,270,

'

increases, on an annual basis cost the
Company $19,393,243, together with additional pay-roll
taxes of $1,200,751, on an annual basis.
/

corporate needs, and the owners, 9.1 If? out of each dollar
of 194-3 revenue, as compared with 10.83d in 1945,-and
12.80% in 1944.
v -W,i
>■ V.v? ■.
Ndt Income

*

Directors submits the following report
of the affairs of the Company fcr the year ended Decem¬

ment

These

After'operating expenses, taxes and equipment and
joint facility rents (which latter amounted to 2.09% for
1946), there was left for fixed charges and for other

1947.

-

.

Approximately

on

interest cost basis of 1.93.

an

75% of the

19 beinS financed, by

cost of 24 of the

means of a

5-j^ear Conditional Sale

Agreement at 1M>% per annum.
Financing for the new passenger

modernize

supplement

the

"Crescent"

the

modern

and

^

switchers

v-iX
(which are to
"Royal Palrq,'.' and
cars

the

equipment

otherss of

on

the

Company's principal trains, and. are
estimated to cost
approximately. $9,000,000) is to be arranged
prior to the
delivery thereof, which is expected in the
latter part of

1947.

When the Diesel
power now on order for
the Company
its affiliated
lines has been

ana

Railway

System

units

Diesel

of

companies
power,

delivered,

will

operated

have
as

in

111

Southern

service

319

Diesel-electric

ej}£ines. ,6 small Dieselrelectric
passenger trains;.
16
Dle9^"®leQtric road passenger locomotives, ranging
from 2,000
horsepower to 4,000

horsepower,

and 54 Diesel-

Number 4580

Volume

THE COMMERCIAL & FINANCIAL
CHRONICLE

ADVERTISEMENT

freight'locomotives,
to 6,000 horsepower.

horsepower

■

ranging

road

electric

from

??

4 n^n

50

'

cost to Southern Railway Comnanv

The aggregate

Southern

during the

iron

steel

and

capacity, greatly expanded

is to be further modernized and

war years,

improved'during the next two

<wi

SOUTHERN RAILWAY COMPANY

years.

,

\

Financial Results for the Year

7

'••/•'•// V

v

"

—»»»• sas

ssasas

i

The production of tobacco

7

Equipment

r

:

t

->

70talS
—£

■

:

•

Trust

—

"i1 Includes

) '

■ •

$194,650,500'

52 840 6C01

_

its

•

subsidairits

since

January

i,

•

$285,589,482 './ $274,281,859

by the'Company
.

by the Company

or
-

or

i§40.

/

a

•

*/}YP

Difficult

as were

there will perhaps be

time ,in

-

pany

so

comfort in the recognition during 1946
;

162, just men¬
tioned, which should produce additional gross freight
revenue to the
Company of approximately $20,000,000
•in 1947.

:

Industrial Developments

Despite the vicissitudes of unrelaxed war-time controls
an'd labor troubles, the establishment during 1946 of 506
aiew industries at points served by the lines of the Com¬

>.

■■

created

it

those

from

Other

income

^

1

'

growth of the South.
one of constructive
.progress toward increased business in the years to come;
.and this increasing industrialization bears out the faith
I of its people in the diversity of the opportunities that
.abound in the territory by reason of its manifold re¬

of

;

•

Company
land,

ger

•

Position

at

had

production for the year was the largest on
all branches of the industry,. Further, expansion of this important industry j is in prospects in the
-territory as shown by the. acquisition of sites for two
xayon plants and a nylon plant cm the Company's lines.
."When completed, these three plants alone will add $80,<000,000 in new facilities in Southern territory.
.

Rayon

/record

.

.

'

in

I The growth of the wood-pulp, wallboard, structural
J insulation board, and paper industry in Southern terri-tory continued as evidenced by the establishment of four
1 Targe plants with an investment ip these new facilities of
^$32,000,000.. Increased capacity costing over $10,000,000
/further enhanced the potential production of the existing
paper and allied industries in the territory.
The furniture industry, long dominant in the South,
•continued "its march forward with 78 new industrial
•enterprises, while the lumber and woodworking indus¬
tries accounted for 52 new plants*
■ ■
/

On

December

Increase or

31, 1945

Decrease

.

f y,'i

;

investments

railroad

tracks,

and

cars

notes

and

ter-

./

other

fixed:

*

-

affiliated

of

other

held

J.J,

by

bursed

Trustees,

upon

Total

to

And

1

be

temporary
~

U.

S.

-

'.'•/■

Government

owed

'

.

46,160,000

18,500,000'

14,668,783

19,540,815

4,852,032

16,950,

13,689,502

fuel,

The Assets of the Company totaled'

■;

supplies,

6,989,375

/;669,569

$11,269,952

but

not

;
r

,

A

,

:

•

;

'

f

?

/

.

.

r

:

;

$34,667,386

$1,545,53s

40,139,324

29,737,783

2,467,581

2,284,359

183,222

96,155,584

93,044,784

3,110,80®

17,279,153

715,952

$36^.212,921

due.-—

10,401,541.

Operating reserves
Reserve for depreciation of road

Company's major policies have not varied in the

v

.

balances

railroad

accrued

3,261,493

.

8,658,944

companies,
and
interest,
dividends
and
rents accrued but not yet due

Taxes

.

$749,308,411 $760,578,363

materials,

and

wages

other

to

-

27,660,000

*

rails, ties, bridge material and
other
supplies necessary for.'
keeping road and equipment in
good order
——£
Deferred assets and unadjusted
debits, including items owed to
but not yet
available to the
Company
—

The Company owed for

$12,497,794
: - •' •'

$44,170,007

.fij-.V:,'.-,.

and"

Company

The Company had on hand

w

$22,987,951
'

$31,672,213

in

Notes!

companies
the

11,667,851

—

$651.347,046 $628,359,095

investments

railroad

others

.

11,667,851

/

"

Other

i":-

:';i

dis-.

—

4,695,478

55,548,019

60,243,498

delivery of equip-'

Investments

"

:■■■',:

carried

The Company had cash and special deposits amounting tO_^^_

<

/■

i

companies

investments

ment.———

t,

$6,624,623

$579,435,697 $572,811,076

ai^-'
Unexpended proceeds of Equip-,
ment Trusts "LL" and "MM",

equipment and amortiza¬
tion of defense projects

,

fifty-three years of its corporate life.
To. develop-the

They

are:

territory and to foster faith

*

South, its people and its opportunities.
To

furnish

safe,

transportation

in

economical

the

and

Deferred

liabilities,
including
to others, but not
yet adjusted

in the

*

territory where

railroad

The

To treat

After

To pay a
With

The

steadfast faith* and these principles,- the

reserves

of

consisted
lowing:

/pany

„

,

Funded

approaches the future years.

After
tion

'

and mail it to the customer.

treasury Initiates New Bond-Buying Plan 4
technique extended to bank depositors.
The Treasury's launching last week of its new "Bond-a-Month
3Ian"; in connection with its distribution of Savings Bonds marks
ift important new-step not only in the promotion of their sale, both
luring peace and war, but also in the government's policies for capuring the people's savings. *
-4' '■ V/.
V
The new technique represents a compromise toward the Treas¬

1.

^

cf

.

•'

,

a

i

.

/

'

,

——

$233,748,882 $221,358,259
60.000,000
60,000,000
"

129,820,000

*

this

$12,390,62^

-L

129,820,000

total capitalization of $423,568,882 $411,178,259

in

$14,344,22®

....

//•'/••■v.

Stock

from

$25,614,179

'

—

$12,390,623?

capitaliza¬

assets there

re¬

surplus, largely
property, of

in¬

net

the

$163,938,701

$161,985,098

$1,953,603

President.

Thus

depositor,
who is on such a "Bond-a-Month"
plan, will be in the same category
it

a

vested

.

"

trust obligations,

deducting

mained

ERNEST E. NORRIS,

;

Comthe fol-

Stock

Common

Making

Respectfully submitted, by order of the Board,

■

the

£i

Preferred
f

accomplishments through another difficult year.

was—_$16_1:800.828 $187,415,006

Debt, including bonds,

equipment

managempnt is grateful to the personnel for their

•

; •

net assets of—'— $587.507.583 $573.f63,357

capitalization

etc.

The

' ' £

liabilities,

remained,
capitalization of the

the

Company,

the railroad going.

Company confidently

and

these

deducting these items from

for

fair return to the owners of the property.

this

of

the total assets there

fairly and kindly the men and women whose

work keeps

total

credits

the! "Southern
-

•

16,563,201

...

adequate

the South."

Serves

s,„.

due

items

*

Payroll savings deduction

'i

On

"

and

.^growth in. the territory.
.

End of the Year

the

December

■'

-

.

14,040,32®

$16,298,721

'

;....• ">'

..

at

,

.

,

'V. i-"

,

property of

Conclusion

'

.■

.

In addition the Company ha.d investments in stocks, bonds and

educational authorities, and others.
'

12,907,148
$9,252,270

totaled.—

.

.

;

3,521,283

$30,339,05®

minah- facilities, shops, Joco/motives, freight and passen-

"■•

-

The

2,848.272

$22,159,418

31,1946
The

rial for educators and students, the production and dis¬

-Tow-cost power, ;paarkets, and a

in

!

deductions

■

publicity material to newspapers, magazines, ,and the

-

'-.•••

/?;■'■/".

play of posters, and cooperation with authors, editors,

Industry, indeed, is continuing to "Lcok South" in its
;<efforts to~get closer to friendly labor, raw materials,

investments

net income of-

a

•»'

radio,the preparation and distribution of special mate-

:

$26,817,761

SOUTHERN RAILWAY COMPANY

j , '
Related activities included the writing and distribution

is proof of the continued industrial
Jn this respect, the year 1946 was

from

miscellaneous

Financial

,

^

3,729,101

$19,311,146

on funded debt and equipment
trust
obligations, rents paid for leased railroads

nation's industrialists to

*

derived

total income of..—

a

and

greater industrial oppor¬

tunity*

\

4,447,039

Interest

the Company's advertise¬

invite the

for

^

Making

publications and general magazines,

continued to

companies

sources—

was

in

"Look Ali6ad~Look South" for

ments

other

43,044,685

stocks and bonds and miscellaneous items

many

in financial periodicals,

to

Leaving an income from railway operations of

//'•'<////".:"///'//#

circulated business

paid

hire of equipment and use of joint facul¬
in excess of the amount received by

stress

era

and

and its affiliates, the enlargement, of 108 existing
plants, and the location of 32 new large warehouses for
the assembly and distribution of numerous commodities,

favorable manufacturing
climate.
|
•/./ 1
In 1946, the mills of the cotton growing states con¬
sumed. 87.7% of the total cotton consumed in the United
States; and the textile industry continues its remarkable

Company

———

ties

pany

sources.

balance of

a

Resulting in

advertising program
was continued, and the total circulation in all publica¬
tions was approximately 94!& million. In locally-circu¬
lated newspapers, and business, farm and state teachers
magazines, specific messages were prepared to relate the
interests of each group to the Company's contributions
to community growth and prosperity. In the nationally-

The Company is fortified in its thus expressed spirit
of optimism by the industrial developments in the South,
effected in 1946 and in prospect as 1947 opens.

•

$30,546,868

The Company's local arid national

.

:

$23,753,185

The

problems and opportunities for.
misunderstandings anql unfavorable relations. It is re¬
corded with gratitude, however, that the Company's
relationship* with public authorities, with shippers and
passengers, and with the public in general, invariably
has been friendly and cooperative.

war

the Freight Rate Increases in Ex Parte

:

173,945,28®

$73,591,553

Leaving

national

and strain detailed in this Report which
characterized the first full calendar year of the post-

The

should, as always, share substantially.

/ Jby the Interstate Commerce Commission of the necessi¬
ties of-the railroad industry, resulting in the award of

171,791,729

$40,249,380
16,491,195

Public Relations

the Country's history, in all of which the Com¬

There is also

of ;

lines.

years.-V

period of relative calm and, it is hoped, of greater
industrial production than has been witnessed in peace

a

f

establishment

and of

Leaving a balance from railroad operations of
Federal,' state and local taxes required..—...

territory. Agriculture, the growing livestock industry;,
forestry and the many diversified kinds of manufacturing
will reach tremendous heights in the South in the coming

growing out of the settlement of

the labor difficulties of the year,

f

the

$212,041,109 $247,536,833

of maintaining the property
.operating' the railroad was

It thus does not appear that with the steppage of war
production there will be any final loss of activity in the

the problems of 1946, there is a bright

side for the future, for,

-

a

in

of___

enue

The cost

/■/

f:V;'-4Outlook for 1947
;

'

of this crop.

concern

In 1945

In 1946

.

Company received from freight, passeger
and miscellaneous operations a total rev-

pounds.

two plants

electric

,

Future Prospects //;

.'//

"

billion

Attesting to their faith in the continued industrial and
economic development of the territory, the companies
generating electric power in three of the States served
by the Company's lines have announced plans to spend
a total of $106,000,000 over the next few
years in new
facilities for steam-electric generating units and rural

fixed charges, on an annual fcas's
as defined by the Interstate Commerce Commission, less
income from securities of its leasehold estates owned by
the Company, remain at approximately $11,860,000 at
i December 31, 1946.
,
,
]» ;
•; '/'•■'N ://'/ n.
,

two

points served by the Company for the mahufacture of
radio;/radar, and high frequency telephone equipment.
Similarly,, the location of an automobile assembly plant
and a "diesel engine service plant with an
aggregate'
investment of $7,000,000 is a further indication of favored
opportunity for the sale of these products in the South.

The Company's net

f

over

s-'A large" investment has been made by

—'

$8,841,000 of Bonds acquired

of

at

26,707,759

subsidiaries since January 1, 1940.
-Includes $8,082,000 ol Londs acquired

1946

electrical

y
r

52,923,6002

39 098 382

Obligations—....

——

fw manufacture

•

.

Dec. 31,1945

its

?

t

Dec. 31, 1946

Estates-

Leasenold

1945:'

——$194,650,500

in

year

the end of 1946 showed

\

Funded Debt

j.;":V

high

The

Approximately $3,000,000 has been expended during the
for new and additional facilities for processing and

Funded Debt and Fixed Charges

i,
The table of funded debt at
I the follow.ng Comparison with

all-time

an

in the Southern states set

is expected that the

buying as the
millions of wage and salary earn¬
ers now On
the Payroll Savings
of automatic bond

(whose participants under¬
standably number less than,, a

Plan

quarter of their wartime amount).
In addition to gaining more sub¬

Frank J. Brennan Is

signed to encourage national eco¬
to thct

nomic policies contributing

maintenance of high levels of pro¬

CED Ch'man for Eureka
Frank

J.

Brennan,

resident

duction, distribution and employ¬
country," Mr. Bren¬
nan
said.
'■';■/■>•:

ment in this

of Dean Witter & Co.,
"It will be my objective to en¬
appointed Eureka, Calif., list the interest of Eureka busi¬
community chairman of the Com¬ nessmen and others who wish to
mittee
for
Economic
Develop¬ associate themselves in a common
manager

has been

ment, it was announced

by Walter

effort to bring

about

a

better un¬

President of the Curtis derstanding of the facts and prin¬
Publishing Co. and Chairman of ciples underlying the nation's eco¬
ury's needs, recognized since the^
plan is expected to fulfill the aim the newly formed CED National
nomic problems. CED publications
it was finally determined that the
renzied wartime campaigns, for 1"
for getting new categories of the
Information Committee.
discussing
these
problems
and
general unwieldiness and the par¬
community as bondholders. This
!ontacting the income of others
ticular difficulties would outweigh
In addition to his duties with suggesting their solutions will be
han payroll savings subscribers,
method of bank deposit deduction
the estimated ^advantages.
Dean Witter & Co., Mr. Brennan made available to all who are in¬
it
should go far in enlisting small
regular intervals.
With this
This new plan, handled through
is a Past District Governor of Ro¬ terested.
business. firms
and .their
em¬
mrpose, and to stimulate sales of
"Only
through better public
the commercial banks, operates in
tary International, District
104,
>onds to non-bank investors, the
ployees, professional and other
understanding will come the new
tew' York: State."War
Finance having the .depositor who is will¬ self-employed persons, farmers California.
ing to .buy a bond each month,
"The Committee for Economic policies which will help us avoid
Committee tried to devise a plan
sign a card authorizing the bank and large numbers of other bank Development is now engaged in an sharp dips in business activity
or the regular deduction of $uband employment and bring about
to deduct the purchase price from
icriptions to be ma^'i from divi- his or her checking account/ The depositohsk^o whom the Payroll intensive program of - research continuing
progress'*
lend income. Aftei ^mueh discusSavings Plan for one reason or leading to the foundation of re¬
bank will issue' the bond at its
Mr. Brennan tedd.
ion with corporate ii;ajisfer agents
sponsible recommendations de¬
convenience during the - month, another is unavailable,
md dividend-disbursing officials,
for FRASER

Digitized


scriptions quantitatively, the new

Fuller,

THE COMMERCIAL & FINANCIAL.CHRONICLE

1664

Thursday, March 27, 1947

Complete Largest Municipal Bond Sale
1

i

Western Pacific

account

securities have been giving a particularly good
in the last few months of generally sagging

of themselves

The common stock has recently • been selling about, or
slightly above, the level prevailing at the beginning of the year. That
markets.

stability has been in marked contrast to the performance of the stocks
of such other western

roads

Pacific (down 6 points),
Pacific

as

Santa Fe

(down 5 points), or Great

Northern

(down 3; points), and
the performance of railroad secu¬
rities in general.
Many rail an¬
alysts look for a continuation of
this" better-than-average market
action, and eventual substantially
higher prices for the stock.
In

price

the

part

Western

Pacific

probably

be

stability

securities

traced

to

the

of

nouncement

of

may

the

an¬

directors

in

the closing

days of February that
$5,000,000 of the Income4%s would
be

called for

1,

1947.

A

redemption

on

May

amount

similar

(down 9Vz points), Union

Southern^-

was

tion to call $5,000,000 of the In4%s

come

made the directors

was

announced declaration of the

$5.00

the preferred and

on

dend of

$3.00 a share on the com¬
payable $0.75 quarterly May
15, etc.

mon

With the

000,000

redemption of the $5,-

Income

4y2S

on
May '1,
outstanding only
Originally,
on
con¬

there will rerhain

$6,540,000.
summation

couple

of

of

amounted

reorganization

years

to

is of

course

credit

and

equity in

cial

status

the

the

entire

of

balance

Income bonds would be

off.

Even

realized

not

was

though

construed

as

paid
the full hope

the

bullish.

action

was

At the same

time that announcement of inten-

Rapid

the

4%s

ncome

significance
convertible

are

stock

to*

stock. The

common

common

share.

instance. In

any

particular

holders of the

he

investment status

of the Western Pacific it

case

of

manner

significant boost to

of the
le

a

issue

$21,219,00^.

a

called- for-

redemption a year ear¬
hoped in many
quarters that because of the com¬
pany's exceptionally strong finan¬

the

ago,

retirement of debt in this

lier.

It had been

full

divi¬

a

at

into

$50.00

a

Thus,

elimination of the
through / redemption at a

Donds

D.
Hale Brake, Treasurer of ers. The issue was authorized at
Vice-President, Bankers Trust Co.;
Statpof Michigan, receives a check last November's elections by Mich¬ D. Hale
Brake; E. F. Dunstan,
for $200,000,000 from E. F. Dunigan voters to finance the State's
f Vice-President,
Bankers
Trust
stan, Vice-President, Bankers Veterans' Bonus program.
The Co.; David M.
Wood, of Wood, King
Trust Co., New
York, completing bond issue was awarded to a bank¬
& Dawson, Attorneys for State of
final detail of the largest State ing syndicate headed
by Bankers
or municipal bond issue ever sold
Trust Co.. '
Michigan, and B. A. Tompkins,
j.; ■

i;ime when the conversion feature
is not attractive, removes the
po-

entiality for later dilution of the
equity.
Last year when bonds
called for

were

Chicago Railways

ket conditions

redemption

majority of bonds

Cons. "A" 5s, 1927

ired

with

cash

mar¬

such that the

were

were

also

rather than

the

to

public through, underwrit¬

Common

&

Of the reduction of
$9,~
679,000 so far accomplished in the
outstanding Income 4J/2S (before
he
May
1,
1947
redemption),
$5,194,400 was through payment
and
$4,484,600 through conver¬

R. Hoe &

Preferred

sion into the stock. As

Co., Inc.

amount

of

89,692

of

on

reserves

Pacific Airmotive

woodpulp and newsprint.

out¬

as

an

import

orous

restrictions,

which rationing

as

Its traffic

of March 15.

Licenses will be

^potentialities have been enhanced

granted for goods needed for Swe¬

materially.

den's

There has been con¬
industrial expansion in

siderable
oarts

Universal Match
-'

n

•

of

;raffic
i

}i "

the

service

sources

have

New

area.

been

economy.
Hides,
cotton,
wool, solid and liquid fuels, and
gasoline remain entirely free.
In
1946 Sweden had an import sur¬
plus of not less than 842 million
kronor,
and, consequently
the:
country's foreign exchange hold¬

opened

through an extension of the
cofrip&ny's lines to a connection

jup

with

Great Northern in northern
While this extension

California.
had
•

"

:

MEMBERS "

York Stock Exchange and other
leading Security and Commodity Exchs.

utility because of the

phy¬

poor

sical condition of Western Pacific.
This

the

same

time efforts will be made

increase exports.

to

231

So.

LaSalle

St., Chicago 4, 111.

papers express

be

from construction of the
Dotsero

Broadway, New York 5, N. Y.

consideration prevent¬
ed Denver & Rio Grande
Western
and Western Pacific
together from

reaping the full potential benefits

120

next year.

same

Armstrong Rubber Co.
American
,

"

.

>

Optical Co.

Polaroid Corp.

the

years

not

handle
benefit

Van Tuyl & Abbe

Telephone

: >

;Teletype

HA 2-6622

while

being operated
Thus they are now

to

NY 1-1499

be

derived

from

the

thorough property
and

rehabilitation
installation of a large

the

amount of new

equipment will be

found in increased

operating effi¬
ciency and the consequent lower
costs.

Last
year
earnings on
Western Pacific
common, allowing
-

for the participation feature
of the

preferred,

Guaranteed Stocks
Bonds

amounted

to

$3.53.

Many analysts look for close
$6.00

a

some

years

share

this year and
to come, at least.

to

for

Sanborn Co. Formed

Special Securities

CAMBRIDGE, MASS.—Sanborn
&

Company has been formed

with

offices at 39 Osborn St. to
engage
in the securities
business. Officers
are
'

CUAIANTEED RAILKOAD STOCKS-BONDS

25 Broad Street

\

-

New York 4, N. Y.

Telephone BOwling Green 9-6400

Teletype NY 1-1063




regulations will not have to
enforced beyond the first of
"

;

James L. Jenks, Jr., President

George A*. Sanderson, Vice-Presi
dent -and-

Goldthwait,

Treasurer;
>

Second

dent and Clerk.

Crawford
Vice-Presi

"4

import embargo includes
coffee, tea, and cocoa, which again

and

formerly in a position to
expeditiously.
Another

72 WALL STREET
,

Pacific

in a position to
compete for prof
itable transcontinental traffic
they
were

H. H. Robertson Co.

NEW YORK 5

Western

jDy trustees.

Philip Carey Mfg. .Co.

news¬

The

the Denver & Rio Grande
Western
have been
virtually rebuilt in re¬
cent

Some

the belief that the

new

Cut-off.
Both

is imposed

mestic market,

;

The United

to get
ish

collective agreements for 1947.

;

States

and

do-

the

on

-j
:-;.s

Investment Dealers
Of Ohio Is Formed

likely to fort
of Swed¬

as, soon

as

to

curity
with

f

;

•

CLEVELAND, OHIO—In

is

more

pulp

This tension will increase furtner
to the wage increases in the

due

■'

y

considerably

paper

,,;i: v':

..

clearly mirrored in the trade
figures for 1946, showing an im¬
port surplus of 800 million kronor.

an

ef¬

keep members of the se¬
business in closer contact

court

decisions and legisla¬
Sweden
gets
her
paper
mills
tion vital to the
industry and to
working. Sweden exported 650,000
maintain
liaison
with
various
short tons of pulp to this
country
State gpvernmept sections, a total
in the ,last six months of
1945, but of
72 iqvqstmefyt fjrms. in dleyeonly 365,000 tons in the whole; 6f
laqd and Ohio -have, formed *the
1946, because of American loWer

ings decreased considerably.
Investment Dealers of
The ceiling
Ohio, Inc.
prices. The annual produc¬
imports of luxury and unessential
Robert
Shepard
of 1 Hawley,
tion, at present 2,300,000 tons, may
goods and articles will now be reach
2,650,000 tons when the Shepard & Co. of Cleveland, is
halted or drastically
cut, and at shortage of coal and labor
has among the organizers.

been

completed in the early
1930s, it had not reached its full

New

leads government to impose 'V

port of all parties on taxation policy.
According to a wireless dispatch, dated March 16, to the Ameri¬
can-Swedish News Exchange, Sweden's strained
foreign exchange

the Government declared in force

ago.

Vice-President, Bankers Trust Co.
is

Will increase exports
Swedish Government fails to win sup¬

it

years

Page,

all except most essential commodities.

entirely different proposition than
ten

G.

R.

are:

situation has made
necessary rig-<$>—-—■

Western Pacific is viewed
was

right

Drastically Curbs Imports

Shrinkage of foreign exchange
ban

shares

to

New Class "B"

Sweden

result the

stock

common

standing increased
408,283 shares.

Old Class "A"

a

to

con¬

verted.

Arden Farms

Left

re-

become rationed.

tion

period

For the first

roasted

than
of

coffee

(slightly*

one-half pound),

tea,

while

Mr. Shepard said that 30 Cleve¬
prices vary between land firms are members of the
$99 and $124.50 a short ton, but new group which will have head¬
may
be raised soon.
Newsprint quarters in Columbus, State cap"/. ■g;
production reached 120,768 tons in itaL

and

200

1946 of which 38%

"restaurants

be allotted 70%

and

more

of

cocoa,

cafes

will

1946

con¬

of the

exported.

was

Swedish Inflation Conference

ra¬

100 grams

grams

overcome.

Present

Conferences
of

the

between

Swedish

members

of

the

and

leading

parties in the Riksdag concerning
Sweden's economic situation ended
on
March 13 in a deadlock after
six Weeks of deliberations.

as

Shepard

Government

representatives

The
law firm
of
Marburger,
Evatt & Burton of
Columbus, has

been retained

Ends in Deadlock

which

ends. April 8
each person will receive 250
grams
of

been

a

will

be

member
will .be

said

counsel and Mr.
slate

announced
of

the

named

law
a

of

firm's

director

organization, he added.
Cleveland will
by four members

officers

be
on

A

shortly.

staff

of

the

.,

represented

the executive

Prime
sumption. Such articles as auto¬
committee, one epch to be named
Minister Tage Erlander announced
mobiles, tropical fruits, perfumes,
by the Cleveland Stock Exchange,
that during an early stage of the
the
nylon stockings, furs, etc., are also
Cleveland Security ? Traders
meetings, the opposition parties—
forbidden.
/
'
Association and the local chapter
the Conservatives,
Farmers, and of the Investment
The official announcement was
Bankers, Asso¬
Liberals—expressed the wish that ciation.
-

-

made

the

over

radio

in

the

the

restrictions.

new

news

However, being.

had been circulated via the

grapevine route the day before,
causing, at least in Stockholm, a
wave of hoarding.
In some cases
people bought
several
hundred
pounds of coffee, quickly empty
ing the shelves of grocery stores.
.

The Government, on the
other hand, felt that it could not
make
tax

such

matter

be

can

expected

shortly

order to reduce the domestic

in

con¬

sumption and increase the export
of
-

this

staple product.

Some

country
ports by

experts
can

believe

increase

10 to

15%

thai the

these

.

ex¬

when heavy

promise.

out

of

With

the

the

on

prob¬

selected

member,will

by these three.

New York Stock
Exchange

Weekly Firm Changes^

the

way,

be

The New York Stock
Excnange
has announced the
following firm

concerning the price level, changes:
Transfer of the
especially the effect of the recent
Exchange mem¬
wage
increases on the
current bership of Daniel T. Lehane
'rta

lems

.

it

Morris B. Ebin will be considered
by the Exchange on:April 3. It is

was

decided to break off the nego¬

understood that Mr. Ebin will act

situation.

could

be

Since

reached,

no

tiations.
In

three

-

a

discussions then centered

According to "Stockholms Tid- economic
ningen," a general embargo on pa¬ agreement
per

The fourth

eve¬

any plans to increase the taxation
ning of March 15 by Axel Gjores, of certain
higher income groups
Minister of Supply, who outlined
should be abandoned for the time

a

as

statement

issued

by the
parties,
it' is

opposition
pointed out that^the—^UDnoikiic
situation in Swed§fi ^~£Mracfer,

ized by an

increasing tension be¬

tween supply and

demand, which

individual member of the Ex¬

change.

;

Kenneth W.
Hume,
the

Exchange,

member of
died on March 14.
.

Julian A. Aeosta, limited
part¬
ner in John J.
O'Brien & Co., died
on March 19.

Number 4580

Volume 163

THE COMMERCIAL & FINANCIAL CHRONICLE
short histories to justify
tion of funds.

And Yon

v

7

It

trols.

(Continued'frohi

(1)

becomes

now

probable that Congress will ad-

•

*

'■

$

,.

clude
tax

to

long

a

7

7

*

study

cooperatives
set

down

be

taxed

of

and

to

on

whether

special

a

Such

and

ment

(2)

(3)

treat¬

''' 7-7

'. 7*

7" *

*

security

offset

by

in loan

7'. 77.

ment.:',-;.'..;

$15,358,on

banks

totals

last

substantial

a

increase

only

meaning

of

Section 34 of the

witness

prehension lest some day this
country wake up and discover

to

as

phrase

that

in

draft of the

new

that,

reading "or failing that,
by termination of such obligations

result of something'
the Administration at
elsewhere, we find

as

done

charter

volume, and assets of the
contracted

the

witn

annus

the

partly

was

"Chronicle)—In somewhat pain¬

fully prolonged questioning Tuesday of Harry Hawkins, State Depart^
ment witness on the ITO charter,<$>Chairman Millikin of the Senate tariffs," "high tariffs," "substan¬
Finance Committee and Senator tial" and "provisionally."
Senator Hawkes expressed ap¬
Hawkes failed to reach a meeting

December 31. The fall in Govern¬

the

or

tax

declined

.

WASHINGTON (Special to the

Deposit In¬
Corporation
program.

holdings

constructive.

are

Federal

000,000 to $73,575,000,000

they

fitted into
tax
system;

the

surance

try

conclusion

partnerships,

as

accorded

That 30% tax crumb voted by-

how
will

in

preferential arrangements. Former tells "Chronicle" hearings

tion

•

Government securities by the 13,359 commercial banks
participat¬

ing

Skeptical of ITO

Millikin and Hawkes criticise Charter's vague language, and ques-

Debt retirement brought a 17%
year in holdings of

con¬

(1)

corporation

Senators

*

shrinkage last

''7:,A.

a

justification
should

*

*

*

The Treasury is about to

wants and (2) that
shortly
thereafter the Board
will ask the White House to
dismantle consumer credit con¬
trols now functioning by execu¬
tive order. This situation, of
course,
doesn't touch margin
trading requirements.
he

what

*

•

*

reten¬

"

v:

fr

This may point toward Federal al¬
lotment controls.

Eccles

giving

without

journ

.

1649)

page

*

1665

a

by

Geneva

or

The

6%.

in accordance with their terms." that we have exported jobs.
Republicans for taxable in¬
decline in security holdings was
In any event it is daily becom¬
The Federal Power Commission
i Millikin
insisted
that
if
the
comes of $1,000 and less hasn't
won
much tranquillity for th^ is apt to,see its natural gas and primarily in Treasury notes and language clearly means that the ing increasingly clear that the
ITO Charter as it now stands will
encuter nas teeth to compel Brit¬
certificates of indebtedness.
tax reduction bill. It did soothe
petroleum operations, walled in
ain to abandon Empire prefer¬ experience rough going when it
a
few GOP malcontents in the
7; " * ■
*
*
*
*•
by Congress before long. There's
ence
"you've
got
something." comes up for endorsement by the
House, but still faces rough going
r
Legislation
permitting
the
But Mr. Hawkins refused to agree
Senate.
in the Senate.
In fact, the bill a good chance Senate and House
Federal Reserve Banks to con¬
to that interpretation of the lan¬
right now couldn't muster enough will pass legislation greatly re¬
Hearings Called "Constructive"
tinue
guage
quoted above.
Hawkins
the; direct purchase
votes for Senate passage. It will
of
stricting FPC controls at both
In a statement to the "Chron¬
rather
stated
that
the
charter
be delayed, substantially altered,
Government; securities is over
ends of transmission facilities. 7
icle"
Washington 1 correspondent,
would "not. compel
may be revised completely in that
Britain
to
the
congressional hurdle and

House

;

,

t

-

body,

.

"

.:

7

t

*

'

*.

,

( '

i>

.f"

'*

1

S

**

Internal

1

Rebuffed by the House, type¬

manufacturers

writer

7

Senate

the

to

turned

for

re¬

Senate

The

shows

government

the

vent

article

other

no

Uncle

abandon

shortly become law. .77

force

of

at

Hawkins
would

cor¬

Dreyfus, Jacquin Go.

least

friends

this

the

If

Bureau

to

disposition

any

mitted to

pre¬

from

businessmen

small

Hirschmann will

f Otto

Chair¬

Mr.

particularly

it

make

ulations

Hirschmann

proposed organization
prior to the time of its submission
for the

Hawkes

and

Steiglitz.

guage

in

such

to express

charter

the

plan, if it wishes to do so, before
being presented with an unchangfait accompli. This, I believe,
is the first time that this has been
done

lan¬

for

in connec¬
international

years

many

such

with

tion

agreements."

"low

as

the Congress

its views regarding the

able

Philip¬

indefinable

approval of the Congress.

Thus it will enable

Cuba. Also they were

of

will

develop the meaning of the char¬

quoted language from

Millikin

fea¬

ter for the

arrangements which

critical

associated with Halle &

difficult for small business with

removal* of

to

constructive

the

of

tures of the hearings is that it

proposed language to

past was

in the

object

of this

pines and

April 3.

on

"One

that he personally

this country has with the

City, members of the New
Exchange,

preferences.

preferential

tion

partnership in Dreyfus,

York Stock

not

above

•

evidenced interest in the applica¬

Jacquin & Co., 61 Broadway, New
York

said

Senators

ad¬

be

Empire

the draft charter.

To Admit Hirschmann

on-

there'll be trouble. Bureau reg¬

by

purchased

Committee

Sam.

will

ploughing back more than 30%,;.

maximum

for typewriters and

tags

price

writing

of

1913,

Hill.

Capitol

| should junk its policy, adopted
In

to

from small business

7 sion the other day, heard argu¬
why

••y.j

Appropria¬

tions Committee, in closed ses-

ments

\

^Bureau's

,70% of income may draw fire

writers bought by the Govern¬
ment.

,y. '

distribution

porate

moval of price ceilings on type-

7

crusade

revived

have

; 7

*

*7-'

4

Senator Millikin said:

,

** '7

J"*

Revenue

,

Bridges views the practice

man

discriminatory, but probably

as

can't offset the unanimous vote
by which the House Appropria¬
Committee

tions

preserved the,

This is under

ceilings.

■

"~

7■ ■v"" ■'

circumstances to be construed as an offering

no

•'7'7'";j:

•

of

an

offer to buyt

any

offer to buy,
of the Prospectus.

of these Debentures for sale) or as an

of such Debentures. The offer is made only by means

Bankers and the public can ex¬
an

7:7 7; 777®7 .

counterfeiters took lucrative
jobs, and (2) counter¬
feiting materials became scarce.

many

Now.
are

Jjc

.

'

^

./

'

•

/•;?

' h

;%$200,000,000 7:

\ '• -7*-;/ <ViY

■:

,

.7^

*

'*.•

•*

*

".V

:

.'.V

.-

•7' '.:>' 7'v 7'7 77 ^7'(777;.7 Ir? 77 ' 777-

■•7"

i

,

,7

t

X'.;

•'

.

,

*

•

' -V '

.

■

1

■

-

. .

7*" ;

77;

American ^Telephone and

again and ma¬

becoming plentiful.

are
.

7 ...T

•

•"7,7.7'

-7

*

'7 •

'**. '

•.

" 7 '

''7

.

**• •;

■

operators

old

the

loose

the

terials
_•

of

lot

a

on

V

•'

war-time

V
March 26, 1947

NEW ISSUE

imminent
splurge
in
counterfeiting. Printing and pass¬
ing fake money subsided during
the
war
for, two
reasons:
(1)
pect

solicitation

or as a

Telegraph Company

*

In the making also is a boom

in check and bond forging. The

Treasury expects to handle 49,- ;

Thirty-Five-Year 2%% Debentures:

7;;

-

.

"'t

.OQOjsuch cases this fiscal year;,
^gainst only : 40,800 last fis V

as

calperiod, expects to have 20,- 7
000

3,000

than

more

tribution
bonds

try

to

for

♦

The

•

*

*.

<•

•

bill

House-approved

of

Millikin

Other

westerners

l!

Price 100.75% and accrued interest

.

sus¬

Copies of the Prospectus may he

Color¬

obtainedfrom only such of the undersigned as may legally
with the securities laws of the respective htates.

offer these Debentures in compliance

counter

petitions against haste and
12-month suspension only,

with

for

Due April 1, 1982

easy

some

Chairman

ado.

a

bin wrSy'll

bowled over by a
majority for the two-year abey¬
ance.
Congress now knows the
"

K

;

.

the

*

•

fact

'Real

4-cent

*

is

*

that

Bear, Stearns
...

suspending,

duty probably

Equitable Securities

kite; copper imports to needed
Securing adequate for- -

„

,

...

....

,r

...

.......

.7777-777 7- .7 /171

Glore, Forgan & Co.

Corporation

higher
prices; did not appear promising
at the end of 1946. Today it
less

even

at

promising.

Panic

Dick &

'

blading for the metal
be

H

may

Incorporated

(Incorporated)

Merle-Smith i
v

not

far-away.

■

Phelps, Fenn & Co.

Ilallgarten & Co.

L. F. Rothschild & Co.

:

Suspending the 4-cent tax js to

be but

one

phase of an unavoid¬

W. C.

Langley & Co.

.

_

Gregory & Son
Incorporated

L Merrill Lynch, Pierce,
.

.'7? -7r 177

Salomon Bros. & Hutzler

E. H. Rollins & Sons

Otis & Co.

it

Ladenburg, Thalmann & Co.

; Volume.

eign!7\copper

14-'

Eastman, Dillon & Co.

Blair & Co., Inc.

& Co.

.......

can't

Halsey, Stuart & Co. Inc.

Corporation

The First Boston

supply situation is really critical.
'

n".*'y 11<

.

leave

pending for two years the 4-cent
copper excise tax wiU be relayed
by the Senate to the President
shortly. "Very, very quick action,"
is promised by Finance Commit¬
tee

> •»jii: J

1r».

\

dough.

\

,

)'■

tempting

is

veterans

to

forgers

a year

terminal

of

|

Slftl Dated April 1,

1, or
ago. Dis-,

July

pending

cases

s -

'

1

.7

#

•'

Hayden, Stone & Co.
.

■

"

...

■■■*.

Schoellkopf, Hutton & Pomeroy, Inc.
Fenner & Beane
Spencer Trask & Co.

ably legislative venture to keep
,

fabricators
A 1 second,

subsidies
erators,

a

supplied with copper.
phase

for

deal

will

domestic

mine

Burr &

op¬

Graham, Parsons

& Co.

*

;

Incorporated

Tucker, Anthony & Co

third with the protec¬
"

tion of non-integrated fabricators
from

Gentral Rl^„V^la,,7.,Compan5r

Company, Inc.

with

discrimination

in

the

Drnd-.i

'1 ;

'

-7..'

•

...

•

;

'

-

' '

dis¬
{'t 'vtl

tribution of . inadequate supplies.




-scf noisr^f safe-

"7

- -•

.'i'A

>

i

t

C :

\7. Uvr.

:

*

? ).

7 \ii JvVib i.i

f

VCH

U,"

-

..

-smmmmmmmmm

mm/mm

THE COMMERCIAL &

J666

criticized

as

FINANCIAL CHRONICLE

one

with

Cost

,

exces¬

an

Thursday, March 27, 1947

,

sive

^

selling charge, in relation to
retail
merchandising
costs
the
spread is low.
.
'
.1"

v

Arrow

Shirt-vA--^--

Cost

May, 1920
'• $2.25.

Bacon

(lb.).

—

0.22

Butter

(lb.)——-.-

0.72

0.49

0.49

(lb.)———0.29

0.44

CMsco

employees

Speaking of "Loads"

mentioned the fact that three of the leading dis¬
Mutual Fund shares had readjusted their "loads" , to a

Last week
tributors

their

,

of

we

5%

more

uniform basis with respect to

upon

MACHINERY

spread

we

looly

business

of
7V2%

of

biles

SHARES

i

automo¬

on

on

top- of the

profit.

let

see

dent

share

of this 7M>% is and
they have to do to earn it.

to

the

to

'

of

issued

and

generally

wholesale

1%

man,1 leaving

*

v: :>

;

/

1.

Newspaper a*nd other direct
advertising.
2. Printing and mailing of sales
"

"Prudent Man

Rule."

Street, New York 5, N. Y.

promotional literature.

-

Justin Putnam, great-great grand¬
of
the
founder
of ythe
Trustee cannot be expected

a

be

as

guarantor of investments

a

single

no

investment,

government bonds,

;

even

:

be called

can

3.

;r

Salaries

safe.

sistants, and stenographic help.

A

radical and highly provocative at
that time. > If; the
precise legal

(also, traveling
expenses) of sales executives, as-

4. Part of rent and

;
5.
»

6.

general

head. ;;// /
•. '.V
Legal
expenses,
and

over-

//,'
registration

••;/:/ //

"Blue-Skying."

Half

of

dealers'

v

advertising

7.

your

upon

request from

investment dealer,

NATIONAL
{RESEARCH

8.

from

or

SECURITIES

t

&

CORPORATION

120 BROADWAY, NEW YORK 5, N. Y.

Putnam's

government

comments

obligations

were

Telephone
and • Telegraphic
quotations and order expenses.
Most

executive

salaries

and

other

costs, including the major
of maintaining an.adequate

one

research

department,

debited
to the % of 1% management fee.
It
is
important to realize that,
under

are

present

conditions, >it re¬
approximately $20,000,000
of assets for a nationally
spon¬
quires

able.

"It may well

confidence

conduct
which

of

are

be

To

tual

sum

fund

up,

although

business

the

has

mu¬

been

it

that

while

with

and

woe

let

literature

new fold¬
"Present Values in Automobile
contains some interest¬
ing charts.

de¬

Shares,"

signed lor the investor's consump¬
tion

seasoned

were

salt and pepper,

if might prove
i-

with

such

little

a

{Massachusetts Investors Second

the above,
palatable,
as

more

Fund

Notes

•

vj'A

pamphlet

a

'

entitled

"Dollar

|

article

by J,lie National Securities & Re¬
search' Corporation.
New folders

Chronicle.

time

private

corporations

and

prudent

one

consideration much in favor

of

directors.

investing

tions.

in

They

lav/—but

private

is

corpora¬

amenable

are

the

There

to

the

government

can

only be, supplicated.". V;
The

other

"Prudent

costs

with

cludes

the

ments ;.

Investor"

1920

of

and

in¬

following tabulation./.

mutual

ele¬

tional

relations.

i

>

Chicago

the

bloc

even more
serious, furdevelopment of the present

situation,

creation

by

of

centers

revolution

of

fertile

existence

of

Western

the

Wrong

Track
the

on

the

have

been

Nations

Balkans

We sold

do

it."

Not

Commu¬

own

ally, Po¬
Now

in

foreign

have

we

brought

policy

reached

the

He

open.

Truman

issue

the

11

and

not

make

the

same

Russia

retary

of Boston

•




THE

PARKER

out

a

financial:

mere

a

policy. He did
bellicose speech.
At

time he
our

was

hand

extending
through Sec¬

she

chooses

to

The

CORPORATION

President

accept

not only were we Anti-Comintern
—but that we proposed to
do

are

Here, is what

doing:.
■; y/

«

«

<*

.

4

«

•

t

4

\

,y

/s;!-*

l

i

■f

"jiii

y./ii ;'."T

■;

■

n't

1

Mui

in

are

believe

Mr.

as

fact—it

star-gazing. ; In
European power

it

is

imperative that

Marshall

cards

As I

face

should

up

place
table

the

on
v.

/

'/

it—we may be at this
deciding for war with

see

moment

Russia—just
cided

for

much

as

as

with

War

de¬

we

Germany,

when

Lend-Lease was passed.
«
People ought to understand that

this
if
on

decision is being made and,
they want, express themselves
the subject.

But

listen—if

ourselves

had

we

when

Hitler

asserted

went

into

Czechoslovakia
or
Japan
into
Manchuria there would have been
Dunkirk

no

or

Pearl

Furthermore, let
that

President

hearted

us

Harbor.

not forget

Cleveland's

Venezuelan

stout¬

message

brought Great Britain around!so
from that time
one

of

her policy was

on

friendship for the United

States.
Russia
is
already
vigorously
carrying on acts of aggression in
Cuba, Mexico, Canada.—In fact all
the countries of the Western

isphere
States.

including

the

Hem¬
United

"

Furthermore, everywhere Com¬
munism

only rules

as

a

minority

dominating the majority by force.
Is

conflict

more

the

is

not

economic.

It

of
Asia to conquer Europe—of Pa¬
ganism against Christianity. Witress the murder
by Russia of the
three Polish socialist labor lead-

•

h

Jr.-

might

we

additional

an

at all times.

it.

that

And

game.

we

their

The

announced

something about it.

»■

Mos¬

at

sive policies of Russia.

we

*■;.i.(i

the

But he did throw down 'the
gaunt¬
let to the imperialist and aggres¬

ONE COURT STREET. BOSTON
8, MASS.

*

.only

into

of State Marshall

cow—if

Congress Street, Boston 9, Mass.

not

humanitarian

or

to

SO

etc.,

up to our necks, and in
stay—right out in the open.

and

point

recommended ''more-

much more—than

or

Australia,

the American people should know
what they are doing. Mr. Truman

into

us

the

President

The Keystone Company

similar

Eastern

an

>

one-worldian

it to

we

chips are down. It is
beyond partisanship; it is a
matter of patriotism.

^

follows
a

politics

wrong

running

from

our

Communism

where

local investment dealer,

forming

China,

face

short

now

your

naturally

by-passes the United Nations. It
is Marshallian militaristic realism

civilization?.

from reality by crying, "Let

United

now

be obtained from

it

Balance of Power Game v'

power

well

by famine, destitution
despair, threatens the very

and

patty-cake

may

a

(Despite political or wishful pro¬
testation, it is the old balance-of- :

Com¬

the

on

present positions, and that is
exactly what we .have had to date.
It is the sad result of a decade of

be obtained

of

with

| Old

encouraging

Europe. Only
grossly inept handling of foreign

S

forming

are

in the Orient.

soil created

of

Los Angeles

—

we

bloc

/What is
ther

.desperately trying. to
stop
what' we helped start—the spread

SHARES OF CAPITAL STOCK OF

Prospectus

are

will be forced to

we

course

are

CHICAGO

or

those

of the
presented as
the author only.]

course, ;

that

i

our

may

with

They

effect,

Of

confidence

into the hands of Stalin.

Lord, Abbett & Co.
INCORPORATED

local investment dealer

this
any

\yith Britain, et'al,
in the Mediterranean to stop So¬
viet expansion.
T ■ ;
"
1

nations, essential to normal
political and economic interna¬

munist

living

In

among

world

current

those of

it demonstrates,Jt lacks.Jhe

affairs could have brought

your

coincide

Western

from the moral degradation which

land, the first to fight Germany,

Prospectus

in

expressed

(Continued from page 1651)
Its .precarious status can
only be maintained by force and
political police methods.
Apart

save

from

l,294,00lfc

35%^over

up

necessarily at

not

do

these of

secure,,

nism.

F

views

Averaging — its
Definition
and
Its Application" has been issued

Communism; now we are loaning
Turkey and Greece $400,000,000 to

.

had

year ago.

j [The

.

28,

outstanding,

.

jv

Feb.

on

shares

-

infantile. We lent Tito
$650,000,000 to make the Balkans safe for

lOV ANG1U7

leaf¬

a new

Shares.

er,

sales

more

.

the

New York

j
its

booklet.

Bullock has

Dividend

on

revised

| Distributors Group's

—Anonymous
If

;

only is United Nations only in its
infancy, but our policy has been

NEW YORK S, N Y.

has

ecause

away

INCOf I'O'AUB

rate.

■/
Abbett

"Dollar Averaging"

sad-

gis little of previous gladness."
tail kept wagging on

track;*; We

STREET,

earnings

substantial increase in

a

Calvin

,:;,We. have been

WAIL

lower

a

produce
prices."

his

vs

48

de¬

moderate
improvement
in
the
price-earnings ratio, with earn¬
ings at current high levels, would

ness

On

HUGHW. LONG & CO.

of

Lord,

filled

mar¬

some

the current period of good earn¬
ings will last longer than now
anticipated in many quarters, a

—

emotion

was

re¬

managed by substantial

article, compares

"break-even" point.

his

of

to

•

However, if it became clear that!

•

,

discounted

•

dachshund

/

a

be doubted if

should

public, than in the promises and

sored, well staffed fund to reach
the

little

a

has

kef

we
•

"The

•

relationship between
whole and
earnings

rhetoric of the period is. appreci¬
ated, the following statement of
the Judge's should prove
enjoy¬

Entertaining dealers when they posed in the engagements of the
visit the "big city."

Prospectus

on

Judge

more

expenses.

j

In

handing down his decision, Judge

to

but

—

■

thus

Were

background and origin of the 1830
lawsuit,
Harvard
College3: Vs.
Amory, which resulted in the

that

bit of doggerel,

business

was

tail

Ana

The

George Putnam Fund, pointed out

.

fund

as

Corpora¬

rent
discounting should tend to'
mitigate the effects on the mar-

Along Little Doggie

•

father

or

Distributors Group, Incorporated

His

unusual

lowing costs:

prospectus on request

12.95

So long he had no notion
How long it took to notify

;

the

I Vz %< for the sponsor corporation.
Out of this
1;V2%, the sponsor
corporation must absorb the fol¬

/StCURITUS.l"

10.00

low

Sales

concludes:

•

the rate

eyes

fhmous

Na¬

the possible readjustment in
of earnings in the
latter ipart of the year, and should such'
a readjustment
eventuate, the cur¬

1.95

"'/'

following

once,

Pru¬

by

contains "Two articles r of

Get

The

"There'

"The

National
and

gree

5.82

,

2.25

Shoes——

ket

0.53

like it just the same.. /•-

Putnam Fund of Boston,

interest.

'S-

6.88

'

Detroit.

mutual

typog¬

on

,

generally, indicates that the

0.06

vestor," is quite irrelevant to the

first,
"The
Trusteeship
gives .the, historical
how Tradition,"

"load" of 7%.%", 5% goes

dealer,

the

issue

investor,"

George

just what their

a

and

Recommended Reading

Moreover,

sponsor corpora¬

Out of

a

March

0.30

:'/

also culled from the "Prudent In¬

mutual fund, it de¬
high praise on the scores of

The

0.25

'*

0.05

Boston—N. Y,_
Stockings——i

prices

.0.39

0.25

oz.)

(lb.)—1

Beef

•*F.O.B.

1

(2

Street

"Letter"

current

new

reason¬

tions,

OF.*

their

readability, lay-out,
raphy./ -//'■ ' /»,. / / '

the

.

the

us

from

of

0.25

(lb.)-——

Wafers

Walk-Over

be

50-page
Perhaps the

serves

mei;A

in fairness to

much

63 Wall

25%

manufacturers

Group Securities, inc.

from your investment dealer

appears

commissions

average

of

.A CLASS

the

as

securities,

Fare,
Silk

most comprehensive booklet ever

a

Department stores generally
figure on a mark-up of 40% while
dealer

a

gleaned

is published by

!Vz%

Ribs

Howard

and

interesting facts to

many

able.

the

chandising

Eaton

"Yearbook for 1947."

those who feel that

are

selling charge of even
too high.
However, if

INDUSTRIAL

of

selling charges.

There

i

the

1,120.00

-

Shoulder (lb.)__

Necco

Broad

tion's

0.56

Mackerel-

Balanced Fund is owned by them
or their families.
This is but one

figure of 7V2%, with 5% going to the dealer. It is possible that pres¬
sure will be brought to
bear on other distributors, who now have
higher charges and pay 6% to dealers, in an effort to put the business
on a

of

0.62

(sedan)-;_^^-,_975.00

♦Ford

Pork

evidently
appreciate
cooking since nearly

own

(dOZ.D-

Eggs

Eaton and Howard trustees and

By HENRY HUNT

available

Stock Series
tional Income Series.

0.69

Coffee (ib.)-_;———

also

;

Preferred

0.65

.

"Home Cookiri'"

are

Feb., 1947
$3.50/

vr

age

old

attempt

r

v

\
''

.

•'

'L

v/:.:": 77 77

■■

Volume

163

ers—and

leaders

Number 4580 -7.
of

the

ground against Hitler.
The

V

military

that

will

Soviet

would

shoot

quickly

as

dent. of

High

What

-

.

"77!;7f:'
Be

old

give

a

in

in

the

gain

meetings

the ("firm

Under

of

policy—Russia

first

of

Europe

to

their

over

es¬

fellow

who,

may

the

number

surprising
seem, actually out¬

Communists

-V ■7!

cruelty.
to

Frenchmen

fly

are

Frenchmen's

at

We

Are

Only

foreign

Today

is

we

First

Class

France.

the

are

\
if

we

are

the

to

save

we

infamous

We

,i

must

Germany.

7

time,

Mprgenthau plan.
reshape our policy in
That
is
consuming
.

and

money

manpower

which

be Used to a better advantage.
Furthermore, it actually is not accomplishing anything. : • j
V Germany is the heart of Europe.
can

t

27*!

/

*

:

We have beeii; destroying Europe

'/

7 fry * our

policies.

them .rebuild.

We must' help
We cannot rule

them indefinitely. Europe is like
.patient with coronary thromboWW: 2 $is. 7 We
have gotto • treat, the
; r fieart
&
instead! of massaging the
.

.

>

■

■

'i,

^

feet

Power

What

few

Americans

t)Ut Italian
t>ut

>

as! well
well.1 The

rejected.

our

The

Gulf routes,

From

thousand

the Congress should accept
unquestionably the budget esti'mates of habitually wasteful Army
•and Navy heads.
A sound fiscal
-policy is essential to national se¬
curity. 7777/;'.7 ... 7;727 .

must stop
substance all over the

our

we

'

world

as

have

we

been

this

in

period by scattering our
resources through so many differ¬
ent agencies. It means a reduction

.post

in

i

war

the

services

government

front and

mile

mere

a

pond called the Baltic Sea—where

guarded a coast'of eight

•Britain'

that

"Wasting

.The

'*

more

•| 7 Only

and

can

miles

Ocean

Indian

long

miles

and

a -

life: line

Mediterranean

the

through

—

ten

thousand

United

the

and

States

waged war on seven oceans, every
sea; and on scores of fronts that
totaled not two, but tens of thou¬
sands of miles.
Our invasions of
Jap-held islands alone were mili¬
tary feats heretofore never
dreamed of. The invasion of Eu¬
by

rope -

forces

British

combined

-

let

-

Russia

.was

.

us

the

world

vastness

its

the

list

me

range

no

knows.

one

Churchill

It

today."

ciples for which America stands
the world today.

almost alone in

power

makes

stands

America, a stu¬
nation—strong like 110
it—unaware

its muscle,

of

of

the

unsure

in

without : which
impossible.

leadership

are

Wilson

Woodrow

Under the new deal and the war

to

and

Franklin

sure

When you

If Greece falls into the
group so

Unless

Soviet

we

of

is great danger that we
even
more
totalitarian

are

But

we

have pulled but of

conditions that

duplicated

in

Greece.

in

Unless

we

are

guard we

our

on

not have anything left of our
Republic to show for it after it

may

is all

over.y7

7 ;77
of
greater value, nor of greater im¬
portance in our entire national
history.
;■7 7-7
•;

■

I Bold united action was never

...

There
no

can

be

vacillating

tion.

Now is

no

compromises—
procrastina¬

no

—

the time for action.

I would either give

the President
he asks—or I would
not give him any of it. For TurkoGrecian aid is the beginning of a
all the power

long range stout hearted Ameri¬
can policy for the benefit of the
American

people.

*

v

a

life.
■

77.7;.v:;-Ov-.;>j

e

We

office
York
of

be construed as- an offering

at

1441

Broadway,

Gilbert Katz.
was

Cumulative Preferred

In

the past Mr.

The offer

!:7^!,:: :'?777;77

Stock, 2>xh% Series of 1947

(Par Value $100 per

Share)

and the

!

$102.50 Per Share

,

*

7 importance in unifying the peace

the time the war was
loving peoples of the;world.7;7!.v: over, we actually had more ships
77 77We are flush up. to the; plowing in the United; States - Navy than
7» season—either we perform now— we had men in its! personnel in
or; we J are likely., to- follow the 1939! Today we have a Navy that
time worn paths of procrastina- far out-strips the dream of any
7 tion, <right into another;, war—ten, Admiral: in history;!, and dwarfs
i
fifteen or twenty years from now. all other Navies of the world com-,

Prospectus may be obtained from only
undersigned as may legally offer these Shares in
with the securities laws oi the respective States.

Copies oi the Ottering
such of the
compliance

fact, r by

7
•

Hamman
7

/

,

La^ Fr"es & Co-

Ripley & Co.

Incorporated

•

,

"

7

bined.

The British, Empire' is all " but

777.7777 '7'!'.''77;7.

7 Our construction of merchant
7 completely out of action.; Either
7 we openly intervene in Europe or ships was actually hair-raising. In
•7 Russia will take over. ^Britain un- approximately five years, we built
doubtedly will come back when 7.100 sea-going ships in the mert
she' gets her "bell^ full of economic chant class, with the result tha'
planning. But how far and how when the war ended, America—
*

'

v

soon

is the question.




She is bank-

,

not

Britannia—ruled

the

waves

Blyth & Co., Inc. '

The First Boston Corporation

777 Kidder, Peabody & Co.
Dominick & Dominick

Goldman, Sachs & Co.
Smith, Barney & Co.

Estabrook & Co.

New

with Eisele &,King.

Corning Glass Works

7' 7"

7

City, under the management

of these Shares for sale, or as an offer

77:;7777:7; :':'

v.*

pry

the opening of an uptown

nounce

50,000 Shares

7.-7

.77'

Jacobs & Low Open

buy, or as a solicitation of an offer to buy, any of such Shares.
is made only by means of the pffering Prospectus.

Price

.

——

titanic

proving that we are through with 100,000 bombers—a plane produc-!
7 concessions and that our -purpose tion that far out-stripped the pro¬
7 is to put a stop to Russian im- duction of all other nations of the
7 perjalism and expansion—can the world combined, enemy or allied
Joans
accomplish -r the ends de- In approximately the same period
sired by thq liberty loving democ- this nation, which had only. 7,695
<
racies : of the; world.;
7;^^ >7 </.-7 ships in its Navy in 1941, had 100;•* •> The way our new - policy is fol000 fighting land auxiliary ships
■j. lowed
through : 15 of ;;.the; utmost when the war ended in 1945. -In

>

judgment only by giving
the President everything * that he
asks—and only by the President
on his part developing a definite
—strong—consistent and intelli¬
gent foreign policy in'place of a
vacillating to the point of nonexisting, foreign policy can • we
hope to achieve a secure and free
In my

and -American
was

our

struggle with Russian aggression.

Katz

should return.

This is under no circumstances to

could go-

most of Europe. 7; Jacobs & Low, members of the
New York Stock Exchange, an¬

an'd

China because of

consider that in addi¬

went half!
There

help China she too will

eventually become a Russian sat¬
ellite.

we

Uptown Branch Under Katz
wiir#Turkey, Itan, Iraq,

Egypt, Italy

this, we put 12,000,000

to

of that strength

is the only road to peace.

good old American dollars.

tion to all

knowledge

Nazis

the

beat

down the road to socialism.

ing to say that in strength and a

systems—several hundred

ships and hundreds of millions

policies.

,

says,

of

Roosevelt both campaigned for re¬
election on a too proud to fight

noti complete by several

railroad

in a

we

which

balance

world solutions

further add that the above

is

,

the

omitted

weapon

new

pendous
other before

J And: if yo^ are stjll unimpressed
let

.

We must make our moves

'

what, we sent Britain!

.

■ •

one

Winston

as

So here

that what we sent
.only two*thirds of

operation which even the mili¬
tary
mind
still has
difficulty
grasping. The world has never
seen
the equal of the military
achievements
and
military re¬
sources of our great and glorious
Reoublic.
7 ■ v
-7

7. ;.;'v

•' <•;

h

ever seen.

Persian

Between
1940 and
1945, this
7- 77 country produced 294,000 fighting
by7 frankly7and Vboldly planes, ■* including approximately

!

purposely

est Air Force, and the greatest
Army,
the
most
awe-inspiring
military power the world has

14,450 fighting planes,

.mei add

That is the crux

of the whole matter.

that will leave other democ¬
racies in no doubt as to our long

the United States—already armed
with the greatest Navy, the great¬

we

destroy its benefits to
world. /:•.

in

years—

through

Arctic

I

"It is the

some

three

over

From a production
standpoint
v 7;:;;-:7'7;:' :'7'
protest that the ,the job done by American indusnew Turko-Grecian policy is not
try singlehandedly, almost defies
pressure on Russia—the more we the imagination. Consider:

7 give at home.

cope

And if
a look at the record. which you did without.
is that the United! that is not enough to impress you,

fact

the

that

can

including 9,700 pursuit ships and

Where Russia fought on a twoWhere Russia fought, on a two-

Trieste

badly at the hands of
Secretary of State Byrnes.
7
7 5. It means keeping our Army
and Navy at their highest effi¬
ciency.!- But that does not mean

means

you,

escort

own

treacherous

p. Let's take

aged- so^

(6. It

only its overall purpose—but
our
other policies are to

match this step.

.

hundred

'

how

.

we
must
return
to7'the Good
Neighbor policy which was dam¬

7

mind

we

3,800 bombers, ,7,000 tanks, 3,200
armored scout cars, 2,200 ordnance
policy. We weren't, and we did.
fically— that internal conditions service.vehicles, 52,000 jeeps, 363- But as I said in 1936—the policy
i in
Russia are chaoiic.
Yet the 000
trucks, 35,000 motorcycles, of appeasement meant encourage¬
ridiculous part of our whole for¬ 8,200 anti-aircraft guns,
135,000 ment to the aggressor.
7
eign policy is the way we have let submachine guns, 343,000 tons of
Now Is Time to Exert Our
Russia win pot after pot with a explosives, 105 submarine chasers,
;
Strength
pair of deuces, while we laid 195 torpedo boats, 7,600 marine
i down four of a kind.
Diesel engines, $320,000,000 worth
Now is the time to exert our
!
I sometimes wonder how Amer¬ of machine tools, $35,000,000 worth
strength—our
determination
to
icans think Russia performed as- of. metal cutting tools, $43,000,000
have peace—or fight if need be.
of !; petroleum
refining
brilliantly as she did in the war worth
Was it a triumph of Communist equipment, $171,000,000 worth of There is no other nation, or com¬
organization and planning? 7 Or electric generators, 810,000 tons of bination of nations that can lick
was it because the United States,! non-ferrous metals, 17,600 tons of
us—and
the other
democracies.
which Russia now scornfully de¬ ferro-alloys,,; 2,688,000
tons
of
This is not war talk; this is just
nounces
asa
"decadent democ¬ steel, entire railroads, not to men¬
tion tons of food including butter common-sense. I am simply try¬
racy," saved their hides? 7.

every angle it* is bad.7v7"7; 77: 7
\ 74. On The Western Hemisphere

-

people, I can't
"Wake up America,
fight this war for

secret

But

not

am

little

a

weak—

as

:

Treaty. must: be

I

offer

weaker—than Britain.

Greeceand Turkey^ %

I I

not

our

.

were

the

and

fire power.

during

firstBritain

hands,' which are States waged a war so colossal, so
>7 77> 7 ;
I stupendously greater tharr that.by
y ^vVWe5will have fb' cha
not and other nation*that; it' is be«mly;. our entire German policy, yond bur comprehension;

•r

taxes

in

tor

Communism?"

Now

through.
I
figures
which will give you a better per¬
spective on the might of the So¬
viet Union's Red Army. Listen!

the iron curtain withholds

means

mathematical

did

mention of

supply

dangerous :from the world generally, what
our statesmen have known speci¬

must break flatly and finally with

-

the

only

Only

It

dollars

four

way

the very time when we
hearing how Russia was
class power in the world.
winning the war almost unaided—
is exhausted, Germany and Japan we sent the Soviet Union by air
are destroyed, and France—France
or
in our own ships and under

7

we

2.

to

for

mortars, 770,000 trucks, 2,000,tons of high-explosive TNT,

In

re¬

a

billion

Therefore; the controlling fac¬
of the Turko-Grecian loan is

services

anyway—to make this world safe

2,000,000 tons of smokeless
powder. 7
• " . (
<
Those are figures that not even

by

Europe from Communism that
t

000

but

even

\

what

produced 85,000 tank guns,
55,000 units of field artillery, 71,-

to

realize is that Russia is

,

guns with

same

want

if not

rate.

ammunition

with,

retreating or so confused that
were losing prestige and the
;

of

to

ten

ward, and the United States either

■

those

throats.

friendly"
striding for¬

spect of the world at

years,

That creates fratricidal hate

straining

but

was

call

mass

over

control

though it

an

world

all

countrymen

ir, ministers.
.

world

a

Today,

-

tablish

pompous statements in deathless
prose—the complete lack of suc¬
cess

armed

approximately

and loans from

and

attempting

the

first

a

000

and

the end of

was

Then,

columns

--jy .*

one.

means

the

We

tragic-comedy billed
the "firm but friendly" policy
with' Russia.
conceal—from

of

produced

class

as

It

centuries.

try

murder—
private torture—terrorists' meth¬
ods—-are used by Communist fifth

powers.

inch—of our

to

19th

power

Done?

yard and

and

going to take

we are

Britain

for

the

fleets

the

raised

J6671

produced that literally overshad¬
Only if Uncle Sam of the big
ows
every other "single effort oi stick
speaks with a powerful voice
the, war—the
atom
bomb.
No
and acts accordingly can we hope
words' of mine can begin to de¬
to
diminish
the threat of war
scribe its horrifying potentialities.
clouds,
7,<.\7"7'A", ;
..
At the moment it is an American
7 In all this we must not cease
possession! how long it will re¬
to recapture a sense of the prin¬
main our

not make the mistake of

us

Great

1.

/

merchant

In five

into

persons

world combined.

r

rounds

President Truman's request
authority to block Russian ag¬
gression also means the end of

:

&
FINANCIAL' CHRONICLE

help but cry,

thinking that

they would the Presi¬
National Association

Should

v

•

,

18th

the

on

the

of Manufacturers.

•»

American indus¬
6,000,000 rifles, 5,000,000 carbines, 2,500,000 machine
guns,
and 2,000,000 submachine
guns. In the same period our fac¬
tories
turned
out
37,000,000,000

extremely doubtful if Britain
ever regain her old
position.

Let

Command
Thomas as

Norman

l:<

8

i

the historic role of Britain in the

re¬

verted to original Marxism and is

The

7

hundred

predict

it is

has

impose it
whole world by force.
•

•* < V >

«•*' .4
!.,'»•

and

I

and

to

:!'■

>•*

other

people.

ings of Communism by the trial

undertaking

•'

with the American flag flying on
twice as many ships as all the

they, even as we survived the New
Deal, will survive Socialism. Yet

but

V "•

resiLent

dictatorshipof

method,

.

upt politically and economically,
today, but the British are a tough

;

Jtufrsia is not content to demon¬
strate in one country the work¬
error •

*

•*.*'•/ '• l

,THE COMMERCIAL'

under¬

*

•>
t

.

-

1668

THE COMMERCIAL & FINANCIAL

Thursday, March 27, 1947

CHRONICLE

Philip Lehman Dead

Canadian Securities

Philip

Lehman, senior partner
banking firm
of Lehman Brothers, and promi¬
nent banker,
philanthropist and

By WILLIAM J. McKAl
the

Hyde Park Currency Agreement removed
ability of the Dominion to" take
adequate care of its U. S. dollar requirements. As it transpired this
arrangement was highly advantageous to both countries. On the one
hand, Canada was assured of an immediate market for a volume of
exports sufficient to cover any adverse balance of foreign exchange
war

died March 21

all Canadian anxieties concerning the

with

this

side

of

country;

the

of

had

the

on

picture

this

other—

urgent

delivery
supplies
which

war

unobtainable elsewhere.

were

The

original

agreement

change

of

deficit

avoid

the

on

the

an

purpose

to

was

it

the

on

It is

both

countries

of dhe war emergency period the
Dominion emerged with -an em¬

to that of the war-time

barrassingly

s

of

Canada. found

it

desirable

actually to seek means
whereby this unnecessarily large
exchange balance could be re¬
As

duced.

result. Canada

a

able to reimburse

cash

for

the

installations
that

this

numerous

country

unlike

ada

ents

as

other

all

outside

in

military
-projec s

had set" up on
a joint measure

preparedness.

war

was

this country

"and

Canadian soil
of

arrangement.
rated

during the

the

Thus

other

this *

Can¬

beliger-

country

was

case,

but

perhaps even
psychological
culable

benefit.

currencies

most

critical

her
the

man,

who

today, the

so

scarcity

is

the

of

world's

economic

problem.

elastic

this

By

currency

problem.

kind,

of

means

an

arrangement

however,

of

Canada's
largely

the

at

the

was

commitments

in addi¬

U.

S.

dollars

would

tion to

granting geherous mutual

matically secured. Such

aid

other

is all the

be

to

also

in

her

countries, but was
position to pay off all

a

indirect

Moreover

obligations.

war

after

this

scrupulous
and generous adjustment of war¬
time
still

left

large
'

the

accounts

with

*

Dominion

was

view

Peace-time exigencies, however,

the

of

amply
pacity and

fact

that

obligation

whether

direct

ca¬

any

in¬

or

During the week the securities
extremely

was

inactive.

The

registered

/

Chairman

the

of

Corporation,

a leading investment
He served in that post

1929

to

1941, and until the

time of his death
F.

W.

was

Woolworth

Director

a

Company,

a

position he had held since Feb. 16,
1912.

:

During the
senior

was

Philip Lehman

years

partner

Lehman

of

Brothers, the firm forged into a
leading position among important

investment banking organizations

v.

market

,;y

first

company,

Canada

demonstrated the
the will to meet

direct.

unprecedently

an

of foreign exchange.

reserve

in

scheme

to be recommended

more

has

a

auto¬

the

founded

Board of Directors of The Lehman

of

war

her

Henry,

and

partner of Lehman Brothers
since Oct. 13, 1887, Philip Lehman

of

direct

all

birth.

son's

A

without

aid

his

of

and factors.

from

Lend-Lease

time

Mayer

help
to
fill
immediate i world
needs, and Canadian requirements

can

in

firm in Montgomery, Ala., in 1850
as
cotton
commission merchants

abundant

-resources

of the firm's founders,
the Confederate Army

one
was

Emanuel Lehman and his brothers,

not

only financially and econom¬
ically strong enough to pay in full

dull

external

and

section

of the country.

firm

cotton

In earlier days the

largely concerned with

was

other

and

commodities

fully onerous
as
those of the war period and
the strain is falling on the only

slight improvement
on expectations of the early sign¬
ing of the bill that has passed the

having been a charter member of
the New York Cotton Exchange,
of which it is one of the only two

two countries

New

York
State
Legislature
whereby certain Canadian secur¬

charter members

now

Philip

was

ities

earliest members of the New York

are

are

proving to be

still

as

in the world which

financially and

econom¬

ically solvent—the United States

a

would

be

Lehman

in existence

Coffee and Sugar Exchange.

remained

the

dullwith little

provement suffered
cline.

turnover

tury the operations of Lehman
Brothers had grown to be national
and international in scope.
irreg¬
Many

were

with

golds
losing ' earlier
following lessened confi¬

dence

in

baseless

currency devaluation.

GOVERNMENT
PROVINCIAL

of

rumors

r

*

Van

Alstyne Noel Offers
Empire Millwork Stock

MUNICIPAL

CORPORATION

Van Alstyne, Noel & Co. headed

■

an

underwriting syndicate which
a public
offering March 21
125,000 shares of $l'par com¬

of the

country's leading mercantile

including chain,
department and mail order stores,
have been. financed by Lehman
Brothers since the early 1900s. In
recent years the firm has also been
prominent in the public offering
of securities of leading industrial
and public utility
enterprises, and
of the obligations of various

municipalities and public authori¬
ties.:.'
y y:. .:yr/
,

In

addition

with

the

to

his

Company,

Roebuck & Co.; The May Depart¬

stockholders,

proceeds will
pany.

A. E. AMES & CO.
INCORPORATED

accrue

on

to the

no

com¬

,•

.

■Incorporated
laws

and

under

New-York

Feb.

11, 1921, the com¬
is engaged in the business

pany

of

manufacturing,
jobbing
and
selling
millwork, < consisting of
doors, sash, window -frames, door
frames, moldings, cabinets, and

TWO WALL STREET
NEW YORK 5,

N. Y.

Philip Lehman had been a Direc¬
Exchange Bank Trust
Company of New York; Sears,

Stores Co.; General Cigar
Co., Inc.; Lawyers Title & Guar¬
anty Co., and General American
ment

Investors Company, Inc.
During his younger years, Philip
Lehman, in collaboration with his
.

wife,

prominent

was

lector and
a

took

an

as an

art col¬

active part in

number of charities.

•

wood products, and of log¬
ging, milling, jobbing, and selling
lumber* Executive offices, manu¬
facturing plants and warehouses

NY-1-1045

are

located

in

Corona, Queens
Countyr N. Y.
"Looking toward the future,''

I1

the prospectus said, "the
corpora¬
tion has in contemplation
(a) in¬

TAYLOR, DEALE
& COMPANY
64 Wall

creasing

Street, New York 5

WHitehall 3rl874:

.

.

.

its

productive

and

warehouse

space;
(b)
of builders'

add¬

ing a new line
plies, such as wall

sup¬

boards, insu¬
roofing materials, asphalt
products and the like; (c) expand¬
ing its lumber business
t.
and

lation,

CANADIAN

SECURITIES
Government

"Municipal

Provincial

Corporate

y


;

-

* •

-3

"

■...

r-»

"

■

•

.

.

(d)

expanding

the-counter
owners

order

by

its

.

present

business

to

inaugurating

Boston

Municipal Bond
to Have Billing i

Club

BOSTON. MASS,—The

Outing
Club

of

over

hom£
a

mail

business through advertis
ing and cataloging."

June

the

will

The

usual

13.

Annual

Municipal

Boston

of

capacity

for general lines of millwork
by
the erection of additional
factory

'

Reports 1

garnering wages of $32

per

y

.

"'■■'Xyy'

■';

To
other
a

such

overcome

physical deficiencies in Jamaica

yy

as

well

as

the

colonies, the home government in 1940 decided to inaugurate

process

ment of

of

subsidies

£5 million

a

in

a

so-called

year was set

"development

and

welfare"

aside for the colonies' develop¬

public works projects that they could not finance from their

own

own

natural

The basic purpose has been to develop the

resources.

resources

so

they

can

colonies*

subsequently pay for the neces¬

social services without resorting to subsidies.

sary

Recently 10-year plans have been drawn
all

y®. yvy;;v

The Subsidy Program

' '

the

®

.

and inaugurated in

up

colonies, to coordinate all such kinds of subsidization until

the year 1955.
million

is to

The total outlay is to be

£120 million, of which £10

to Jamaica for agriculture, forestry, irrigation, in¬

go

dustry, and communications in the "development" category; and for j
health, education, social welfare, in the "welfare" field.
In August
a

grant of

£ 100 thousand

was

made

for

an

Island-wide hous¬

ing development scheme; during the last quarter £380, thousand was

„

,

than it is in Jamaica."

week:plus board up north surely:®
does not add to native complacency. ;
.
/
®

1946

other

'RECTOR 2-7231

be few countries where the overall state of

can

worse

the practice of annually "exporting" a large number of natives to
the States for seasonal work on cooperative and other farms.
back of

program.

Woolworth

tor of Corn

certain

housing is

An additional stimulant to local labor discontent is derived from

association

of

-■

rural

States,

stock
of
Empire Millwork
Corp. at $8.75 per share. The of¬
fering is being made on behalf
mon

CANADIAN STOCKS

ported that "There

establishments,

made

of

By
cen¬

further de¬

a

gains

the

beginning of the present

early im¬

an

Internal stocks

ular

CANADIAN BONDS

the

of

one

'eligible for pur¬
chase by savings banks. Internals
and free funds after

i

re¬
re¬

,

and

The indiscriminate employment of
U. S. dollar credits does riot solve
this

tensibly remaining . away because of lack of-minimum clothes
quirements. In 1945 the Jamaica Agricultural Policy Committee*

L.

Ickelheimer.

still

The

hard

Lehman

war

the abil¬

effect of such an
would
be
of
incal¬

agreement

Pauline
Philip

the

more

wartime cost

senior

is

demon-

war

during

as

a

Philip Leh¬
man wag born in New York, Nov.
9, 1861, the son of Emanuel Leh¬

This

resources.'

government at

lacks all fuels and most raw materials,
and hence depends to an inordinate extent on agriculture.
Ninetyeight per cent of the iy4 million population descended from African
slaves who were brought in to serve the Spaniards, live side-byside with the contrastingly affluent British who govern the Island.
Illiteracy is high, and gives no promise of early drastic abate¬
ment.
Not more than 50% of the children attend school, some os^
£'3l/z million. The colony

Brothers, and
his daughter,

Hyde Park

Canada

own

as

who had to be subsidized bv the home
of

Lehman

the

and

V] ity^ to functioh successfully;by

time

him

scheme similar

a

succeeds

y,'

tailing the foreign rich getting richer and the domestic poor getting
poorer. Moreover bananas form the only crop for the small cultivators,

'partner of

that steps will be

devise

Rob¬
Lehman,

son,

who

logical therefore in the in¬

terests of
to

surplus

his
ert

of

U. S. and Canadian dollars.

taken

U. S. dollars.

basis

his

in

86th year. He
is survived by

is

at large

this

City,

possible to permit a
resumption of world trade are the

ex¬

Canadian

currencies

which

world

At

625 Park Ave¬

nue, New York

—

hard

side. However when the arrange¬
ment was terminated at the close

large

at his home at

country, and Canada. The only remaining

to immediate

access

collector,

art

^

During the

(Continued from page 1649)

the. investment

of

be

Bond

held

on

pre-outing

functions and. details of the party
itself will be announced later]
The

Club

will

limit

100 this year on a first
served

those
B.

basis

and

guests
come

requests

to

first

that

planning to attend contact

Shipleigh

Moseley

&

Symonds
Co."

of

F.; S

"Chester\ R

granted for agricultural

development.

On this island the great problem remains of

raising the very low j
standard of living; and for this the absorptive capacity of the?colony
will

have

to

be

continually

enlarged.

About

come

one

occupied in agriculture for every five

person

even

so,

absorb

on

to the labor market annually.

it is held that the 4,450

the

excess

labor

square

thousand

20

adolescents

ror isci

Now there is only

of land; but

acres

miles of land cannot possibly

supply; at least not with

any

semblance of

technological efficiency. We have here the anomalous situation of :a
constant
a

decline in

rapidly

the

increasing

productivity of the land, coincidental with

population

without the ability to finance

consuming

its

products.

Hence*

imports, the standard of living, through

industrialization, will require far greater investments of capital than
now

appear

to be scheduled

or

feasible.

And

without

such

'capital

investment to raise

the, living standard, the political difficulties and

Durgin of Lee Higginson Corpo¬

embarrassments

Britain),will become

ration for

a

or

reservations.

situation

to

progressively intensified—

seeminglysbecoming;typical throughout the Empire!

'

,

,

•o

■

,

r

"

\

Number 4580

[Volume 163

THE COMMERCIAL & FINANCIAL
CHRONICLE

gitimate market for anything. The
price and supply of nearly every

cripple the productive power of
people, making them depen¬

(Continued from page 1649)
determined, almost hour by. hour,

v

the

of the past 30 years of the
Gireat-Crusade so far as the sur¬
come

decisions and events of which
are
scarcely conscious, or

dent upon the state for
support
and subject to. its power. As mat¬

vival

which seem, to have passed beyond

ters stand today I see
only one
possible path of escape from the

brands of national socialism and

dilemma

and their bad

by
'we

control.. Conditions .at hom^
'and abroad which will determine
'the ; survival, not onlyof a--free
economy in America
'ultimately, of a free America^ and
our

in

restore

to

which

this

process

America today, if we hope

puts

or

free

preserve a

econ¬

in this country, and have the

omy

.intelligence and' courage to try 'it.

jwhich have been hidden, evaded

of

state

free

a

cerned.

is

economy
Nazi
and

The

capitalism

destroyed,

were

and

names

manners

abolished, but. their economic
tems have
and every

con¬

Fascist

sys¬

been absorbed

by this
other country. If Soviet

communism

or

>

British

socialism

'or "ignored, in,the two years;/since I Thiitjr ^ars; ajgp next;mo
today wished to devise a trap in
"war' ■$. Was'suspended^i%; [Europe, set out on [our; GreatCrusade, riot .which to. destroy what remains of

standard

vide

important commodity and service
is determined by private or
pub¬
lic monopoly or by government
regulation or both. In many parts
of

the

world

political

than

economic

and there is

probably

more

city;

slavery

forced labor in the world today
than ever in the human record.
The

drift

under

away

has

to

tellectual

from

anaesthesia

defeat
by
Germany, and
starvation, and is today the

only thing that

can

save

BritaiA

from

in¬

bankruptcy;

a

people

who

have

-proceed
or

scar¬

whose

from

economic

irom

seemed

sort of emotional

a

crisis of

a

>

of abun¬

surplus
productive
power has twice within a genera¬
tion saved the rest of the world

or

freedom

embarrassment

an

dance rather than

liberties have wholly disappeared
or have, been
drastically impaired,

pro¬

greater

economic
prosperity
other; a people whose
problem
has
always

any

been

a

of

measure

civil

and

have been able to

themselves, with

created

immense

pro¬

ductive

that

accomplished
economy jn America and most
groups, including business these things mainly by their po¬
the..permanent spread of men, have been subject, and which litical and economic freedom.
>
communism in the world I could has
.bringing a
steadily reduced their sensi¬
#; Who would imagine that such a
peoplevsbmehlinding/revelations, them '' or/ had lost or j discarded imagine no better way than to tivity to increasing limitation of people, emerging from these im¬
them the ideas and ideals of eco¬ launch this country on a spending the -free: market by
private or mense
achievements,, would be»
5C
~ Post-war Developments /->•/
nomic and political freedom whose crusade
against
communism
in public monopoly or governmental
impelled as thoughv driven by
J^There^has •heeh'the^incredible benefits we had./enjpyed and by which we would be first persuaded regulation. The very language of some profound inferiority complex,
f revelation pi ah1 nsolyent socialist which we had grown rich and and" ultimately compelled to pour economic
freedom
has
become to abandon the basic conditions!
England and .an impotent British strong, productive > and indepen¬ an immeasurable amount of our perverted or confused, as the bu¬ and ideas
by which it did theso
Empire, dependent upon America dent. In the full generation since, remaining economic resources in¬ reaucratic Towers of Babel have things, and copy the pathetic ex¬
-for- support and [protection.<
J her e we have1 not rmerely [wasted an to the bottomless pit of support¬ been built,4.so that almost every ample of the European and Asi¬
has: been ?the brutal:[revelation: of enormous part of; our wealth [ in ing foreign militarism arid-global proposal for expansion of exec¬ atic peoples whose countries hav&

Saveabrpptby,)ri:pkefr^
•surface

-

merely make the world safe for

thri Cprisf Jfew; weeks, democracy, but to carry to those
bewildered, iAmerican countries who, had never known

in

the implacable purpose .and per^
Wasive .conspiracy; of; communist
world domination. Th/ere hasibeen

military and; financial efforts to

weakness,

of

quences

error

to

or.

bribe

and

may

world,

ungrateful one to
The waste of wealth

an;

accept them,

American foreign policy

•

economic and political

freedoms upon am unwilling

dismal revelation of the .cu¬
mulative - and -catastrophic conse¬

evil in

our

not matter if

remain free

we

to

replace it^ but besides that we
have steadily squandered; or sac¬

during- and: Jlsihce}the war. | There
bag been the embarrassing revela^

rificed

own.

our

store

of

those

iiohVof a^moradly hr^
freedoriis from, which our wealth
bankrupt United Nations; % And and pbwer^flowed;/until now, we
i there has- been
$he overwhelming present the tragic spectacle' of a
revelation; of. the terrible, inter-? nation still rich arid powerful, but
imnable and probably unbearable with few, of her freedoms left,
burden-of the utter isolation that standing utterly, alone,
without
has finally been imposed upon a hope or prospect of sympathy or
free America as reward or punish¬ support from any source, in: an
ment for her pursuit of the "one- impoverished and' completely col¬
World"; delusion of compulsory in¬ lectivized, world from which prac¬

free

pump-priming.
■

;*f ;YY *.'

.

*

utive

.V

:•>'

'." ':

VY"

Yf

'

Economic

Freedom

Wane

on

power and every piece of
legislation for wider State control

whose

of the domestic

destroyed

and

been

international

tically

past decade.

freedoms

wasted

and

creative

wrecked, and
has been
centuries'of 4 war,
power

by
struggles for power, political plun¬
of preserving or der, exploitation, conspiracy and
promoting free enterprise. - The oppression? / Who would suppose
devil himself quotes its scriptures that such a
people, fresh from these
yvitb pious sentiment i and solemn spectacular accomplishments,
market for it among the peoples sincerity while millions cheer and could be persuaded to believe that;
of the world and among all groups vote for more public ; spending a poor, primitive, predatory des¬
and classes of them is deeply de¬ and government, control. Thus the potism like Soviet Russia provided
pressed today i
The periods of earnest, enthusiastic' or- anxious for them and the world a- model
freedom in history have been few alike among us Americans today of freedom, or democracy, or eco¬
arid brief,; and none was as spec¬ are traveling swiftly and for the nomic progress; a mentor whose
tacular in accomplishment as the most part cheerfully along a road sterile ideas, methods and institu¬
swift
century and a half that from which most of the familiar tions we should imitate or emu¬
Who would imagine that
closed with the first World War. landmarks have disappeared and late?
On the economic side the shrink¬ the directional signs have been America would be moved to. sub¬
age pf freedom became evident removed or arranged to point in mit her mind and spirit to intel¬

The fact is that everywhere in
freedom, and
with it many of its cornpanion
freedoiris, has been on the wane
fpr a generation at least, and; the
the world economic

market is framed in terms of the
sacred

purpose

both directions at once. We meas¬
economic or? political then; but it was not till the second
ure
our
speed and progress by
disappeared, „and World War that the political free¬
It is not for me to interpret the which we- now propose to save doms and civil liberties began to many imaginary statistical mile-¬
domestic and lnterriatiohal politi¬ from the ; menace of. communism be conspicuously
curtailed and posts like national income figures,
but we are no longer sure or even
cal ' implicatibris of; these- threads by bullying or bribing it to accept compromised.
aware which way we are moving
from which the fates are weaving Our brand of cOriipulsory collec¬
All the nations assembled at
on the road—backward toward an
the American destiny.* I am con¬ tivism instead? of its own or Rus¬ Versailles to make the peace trea¬
bid collective servitude or forward
cerned only
with their impact sia's. What began three decades ties that ended the first World
toward some new kind of freeupon a free economy in this coun¬ ago as a crusade of democracy has War were republics or democra¬
bom.'/
try, ; and they plainly .compel- a become a clash of rival collectivist cies under representative parlia¬
T*
'
# Y
YY !'''YYYY $
•£' £# '
i ■'
reappraisal of the problem and imperialisms, a* global collision be¬ mentary- governments,: with eco¬
Some Paradoxes
prospects pf its preservation: or tween the customs; mariners and nomic systems operating in fairly
survival.
.'...YThe new world, whatever it'may
dogmas of New Deal collectivism: free markets, except for tradi¬
( .1 shall assume that most of you and /those ' of Soviet comriiunisiri, tional tariffs, some private cartels, turn out to be, is being born in
know why economic freedom: mat- a competition between conflicting and a few minor public monop¬ la strange sort of twilight-sleep
country
in
the or hypnotic trance, which may per¬
ters to America1 as it does to the faiths of national rind international; olies. : Every

ternational collectivism during the

and

power

insure

*

impose

the

t

a

which

to

lectual

all

such

.

<

•

moral

or

intimidation

by

example, or by the hyp- ;
notic spell of propaganda about it^
or be led to open herself to a per- in¬
vasive conspiracy-^-in which many
of her citizens and groups inno¬
cently or purposely participateto subject this country to the same
process of demoralization, pillage
and
conquest that communismhas: imposed- upon the helpless

have

an

peoples * of Europe?

:

.

Emotional' Surrender to

,

|

-

economic planning for favor.'or United Nations outside of North
world; why there can; be no deinfluence among the -mendidant iirinerica is:' a political dictatorship
mocracy without a free ecdnomy,.
and why it is the' s61e basis of economies and ihe beggar pr rob4 or a: more or less totally statecontrolled or owned economy, or
ber governments of the world.
political freedom and civil liberty,
both.
If a free economy means
a? well as of material prosperity
Cannot Fight Communism With
one
that rests on free markets,
and progress everywhere.. I shall
Communism
in which prices and wages are
riot have time for full discussion
\
determined and resources? are al¬
Of- the .domestic conditions and
The end is not yet, but we know
located by free competition rind
policies that have so largely deter- it will not be in, a free economy
not by private or public monopoly
mined the steady drift: away from for America or-anyone else,' for
or government regulation, there is
a free' economy arid toward comif these three decades of wastein fact riot a single free economy
pulsory collectivism in pur ihter- and - destruction have' demonstrat¬
tial economic life during the past ed anything it is that you cannot left in the world today. Almost
nowhere is there a fully free le¬
decade: of new-dealism and war. successfully fight communism with

;

•1.

,

>

They have been and still are im¬
portant, but the foreign policies
that have been proposed to Con¬
gress during the past week are
decisive, for if they are pursued
to the end—as they must be once
-adopted—they will end what re¬
mains of a free economy in Amer¬
ica and all possibility of its revival
or survival anywhere in the world
in our, time.
Effect of Foreign Dominated
,

-

Y

" Systems

.

You do not estab¬
defend any

democracy.

lish

a

socialist

subsidizing
nor in

dictatorship,

Whatever

real

the

apparent

or

whether it be to export
some political faith, or to promote
full employment or maintain po¬
litical power at homey any attempt
Xtcri impose a doctrine of govern¬
purpose,

ment

or

an

economic system upon

other countries
ery first
dom and'

by force or brib¬

destroys economic free¬
finally political liberty

at home, because it inevitably in¬
volves unlimited expansion in the
power

of

spending,

in

government,

and in public

public

debt to

.maintain vast armies and bureauc¬
racies at home

inflation^, and
kets for

.capital,

and

abroad, until

taxation

ernment control

commodities,
deplete

and

gov¬

destroy free mar¬

the

labor

and

savings

and




attitude

moral and emotional surrender to

| some form of compulsory collec¬
tivism has been- abundant and
clear during the past decade. The-*
growth of governmental and pri¬

it today.

toward

vate

Here you witness the only people
in- the world who have;? been able
and

other

necessaries

of

imposing (- progressive
and ratioifing cards
under an American military ad¬
ministration;; and certainly yoitdoi
not strengthen economic freedom
in America
by either in action.
Every kind of compulsory collec¬
tivism has the
same
inevitable
outcome
in
terms
of political
by

Greece

of

an

rapid;

(Continued on page 1670)

themselves; who certainly by any

income taxes

125,000 Shares

Empire Millwork Corporation
''

If this

,

* 1

*

i

i

($1 Par Value)

''%

)

<•

r,;Y

i

i

*

y t

Y/

Price $8*75 per share

paradoxical as

read of our' latest
today in the old terms of
and democracy,

Copies of the Prospectus may be

crusade
freedom
time in
be¬
the

Van Alstyne,

history that the liberator has
come
the tyrant, the victor
of

the

evil

he

overcame

vanquished. Na¬
take on the
qualities of those they conquer.
This has been the essential out¬
in the enemy he

well

obtained from the undersigned.

let me remind you

is not the first

that this

as

^

medicine.

you

tions

~ 1

Common Stock

description of these three

decades past seems

victim

w

V'.
t

pump-priming plans, by global
New Deal spending programs, or
by innoculating the community
with any milder form of the same
disease.
It. needs very different
and much stronger

f 1

i

as

men

March 21,.

1947,

|

so

of record only and is not, and is under no circumstances
construed: to be, an offering of this Common,Stock for sale or a solicitation
offer to buy any of such Shares. The offering is made only by the, Prospectus,

tyranny and oppression, and you
cannot stop or retard its progress
at home or abroad by planetary

over, the
has -been

comprehensive and so
life for [deep-rootedi and the atmosphere^

enough food; clothing,: fuel

to get

monopoly power
organization

economic
so~

This advertisement appears
to be

'

Why this is so is plain in the
experience. of the past 30 years.

.

free economy or

freedom in Turkey by
its

competitive economy to¬
ward
a
compulsory
collective
economy in our time; especially
as
it appears in America.. Con¬
sider the paradox of this country's
[situation, and of our/own and the

freedom

communism by calling it
or

of the American people, uncon¬
sciously, perhaps, but unmistak¬
ably. The evidence of intellectual^

the free

world's

ye*

they have happened to the mind

haps explain some of the paradoxes
evident in? the drift away from

.

Collectivism?

-

These things are5 incredible;

i

Noel & Co.

YK

1670

i*f "V-**#**,.

s

THE COMMERCIAL & FINANCIAL CHRONICLE

»iMW

The Survival of

Securities Salesman9s Corner

((Continued from page
of

JOHN BUTTON

By

government

pervasive
mal

In

ideas

are

build

a

cluding

•

investment business

the

sound and

successful

If our

they work out profitably for

our clients we can
not, everybody loses in¬
you can get hold of is
industry or a particular se¬

for ourselves.

career

If

On March 12 George Geyer, of Geyer and Co., Inc., made an
members of the ^oston Securities Traders Assn. and
their guests, and he pointed out that: Insurance stocks today (in his
opinion) represent such a special situation. This is one of the most

selves which

happens, buying

opportunities

at

present

levels,

these

customers to read this booklet.

securities

attractive.

are-

Ask

Tell them your firm has selected

some

of the

customers

your

business.

will like to

and 'it

read

bring

can

measure

of all

and

con¬

>.
■

impossible for

ostensible

party

any

Hilliard,

Of

the

New

,

after

years

Stock .Exchanges.

and

Chicago

:V,^•'? •?.>

sev¬

Harry Crawford
Duquesne K'
yi DUQUESNE, PA.

well

:

has

the

—

Harry L.

i Kennedy Avenue.

Kuethe

&

ner

Airline Foods

has

been

in

its

ist

or

of

savings,

of

their

capital

j

in¬

markets

Even

rates.

compre¬

or

an¬

the tax burden

or

fed,

to make

or

'

55 LIBERTY

permit

and

prac¬

without such arrange¬
they are an effective de¬

soon

ments,

mam¬

vice to promote or impose a kind
of
back-door
collectivism
in

sig¬

any

monopolies

that

primary

determine

the

production and

are

of

economic

life—which

dealism;^nd

always

has left;few

war

rem¬

far

survival

are

concerned,

the

our

out

individual and his economic
life,
which in most other places the
government has

We

won.

the

free

to the power of

and

,

to

because,

omy

the

7

road

those
turn

is

who

to a free

leave

must

totally

economy

of

international
is

an

of

adopted
they were imported from
England
(which
did
not
then
adopt them) during the depres¬
sion, with Lord Keynes as their
chief salesman, and
they are now
almost universally accepted or as¬
sumed
in
this
country by all
groups, though the man who in¬
them

econ¬

finally
to

vented

and

popularized

them

is

Karl Marx and

Ours

mixed

no

Co., Com.

Members Los 'Angeles
626

SO.

SPRING

one

los

-

•.?';?

to

on

5761

"

it

*

—••••••>—

is

evolve

both

thoroughly
today, and it is

such. Almost
questions the stabil¬
as

we

live, and the idea

possible
a

and

necessary

system that provides
freedom and
se¬

economic

curity simultaneously is universal

14

Teletype: LA 68

Market Quotations
and Information




TRINITY

Angeles

now

which

that

Stock Exchange

ST.

economy

a

of the combination of
government
control and private
enterprise un¬

WagensellerS Durst, Inc.
....

best

ity, desirability and consequences

der

v

at

♦■.•••

*

all California
Securities

and orthodox doctrine.
seem—aware

tween
of

the

the

even England has
skipped them in her rapid prog¬
ress toward that policy.

Mixed Economy

generally accepted

Co., Pfd. & Com.

Fuller ton Oil

is

a

Very few

of- the» relation

be¬

i

Their

substance

is

that,, under

modern conditions, to assure do¬
mestic and international economic

stability and

peace,

governments

individually and collectively
compel

a

tion

wealth

of

must

continuous
and

redistribu¬
surplus pro¬

duction to consumers at home and
abroad by control of

savings, in¬
consumption, through
"compensation" fiscal policies of

vestment,

taxation, spending and
ing, and by government

borrow¬

manage¬
ment of the financial
system and
capital
market.
Economic

the

two,

or

of the nature

irreversible

process

by

more

free

a

or

econ¬

collective

bargaining
shop are plainly
incompatible with it; but both
are
now
generally accepted as
proper or necessary in this coun¬
try. Their public support is per¬
haps in small part the product of
the

and

closed

political

expediency;
in larger
application of the of¬

part it is

an

ficial Marxian consumer-purchas¬

ing

theory

power

of

prosperity;

but mostly it expresses the drift
American
feeling in r every
field toward ^ compulsory collec¬

of

tive action and against voluntary

individual competitive effort.
Beneath

,

and

beyond

the

-

col-

lectivist drive of official doctrine

manifestations.
and

perhaps

whether

or

It

is

debatable

a

brutal

question

not American business

believed in

ever

a free economy
with deep conviction, or still does
at all. Skepticism on this point
,

does not rest

petition
collectivist

expression

which have been the offi¬
cial econohiic doctrine of our
gov¬
more than a decade.
In the form in which we

State.

We Have

,

tion-wide

to

the familiar and

on

private arrangements that relieve
the strain of too strenuous com¬

International Collectivist

ernment for

but

over

internal

ideas

over

or

it

themselves

the

This

abandoned,
lost, and

once

closed

of

movement

and

poverty;

enforced with¬

Movement

private labor and

foredoomed

important

is

,

monopoly, the people
on
this little island, composed of
coal and surrounded
by fish, find
themselves freezing and
starving

the

Arden Farms

important
competi¬

free

market

country concerned, includ¬ all-too-human ?
yearning
among
ing this one.:????'?•?':?
businessmen
for
conditions
or

are now

economy

or

complete government regula¬

tion

government

>

Inc., Com.

has
Whether a

"collective

an

bargaining,"
place.

monopoly,

of

name

every

witnessing the final phase of that
struggle in England, the cradle of
economic freedom, as well as of
political liberty., Having aban¬
doned

will

or

vestige of a free market in
international trade; and they can¬

in

associated

vcan

every

engaged
control of the

struggle for

they

effect, they must end

not be effective

a

on

foreign

or

because

arrangements

be put into

others is that government and the
labor unions here are still

S.

own

But

bound up with words or ideas
international peace, relief

these

main difference between the situ¬
ation in this country and most

STREET, NEW YORK 5, N. Y.

American Fruit Growers

the

and reconstruction, or about
pro¬ and bureaucratic conduct we have
viding an antidote to communism in this
country today not only a
abroad, few Americans are aware labor
collectivism, and a profes¬
of their ^implications ifor the free
sional or technical collectivism,
economy at home or, are willing but; also a
business collectivism,
to oppose them.
Yet,;So far as well advanced ; and with varied

free eqonomy in
Amer-j
as the
prospects of

a

So

of

about

survive somehow, even, I suppose,
in
Russia—the decade of newnants of

ultimate purpose,

or

part

governments.

Except for the marginal fringes

Co., Inc.

&

.

their

leges anjd powers? of; the private America, and this is perhaps their

labor

they cannot return

Herrick, Waddell

of

business through public
private monopolies, and the

,

nificant curtailment in the privi¬

Chronicli)-;

'

^

all

or

or so

budget

by which the governmental

Common Stock

•

conduct most

or

domestic

arrangements

moth is

Lynch, Pierce, Fen-

v

communist,

ar¬

social¬

are

to make any substantial reduction

"Hytron Radio & Electronics Corp.
•

made

are

in the

Beane, Circle Tower.

request

enforced labor union

under

and

tically compel us to do the same.
Since it might not have been pos¬
sible to bring this about so
easily

turned the individual citizen

on

government

foreign

and

before

war
is proposed the; ma¬
jority party in Congress has been
unwilling or unable to bring itself

Corporation—Common

*Prospectus

of

rangements

control

interest

1

become

with Merrill

hands

by gov¬
material change

no
made

vestment,

'

business from offices at 311

iri

other

With Merrill Lynch, Pierce

Crawford is engaging in the secu-

jrities

ac¬

the

still determined

are

hensive

you

INDIANAPOLIS, IND.—Fred

or

international economic

omy than a free capital market,
compulsory industry-wide or na¬

its

Financial

as

tivity ?evei;?inore completely

governments with which these

cago Stock

Thb

In the American catalogue of
official collectivism the doctrine
of publicly sanctioned, supported

less

ernment, and

J. Fertig & Co.,
Berry at

to

and

well as abroad. Almost all of the

ica.

(Special

Union

Monopoly

•

tive "labor

Court Street, members of the Chi¬

"I In

Sanction of Labor

■?'

destroy what remains of a free
competitive market at, home as

ities

(Special to Thk Financial Chronicli)

■

con¬

through rationing, al¬
locations,
priorities
and
labor
conscription.
•
'

on world trade, the ef¬
perhaps the intention is
to put the control of internal as

ended

war

wages and control

Exchange.

re¬

in¬

sumption

•

reduce

without

of direct physi¬

prices, produc¬
consumption, exports, im¬

tion,

?.?':?..

£f; Sop. 419 L&6nard

Street, members

York

is

strictions

than anywhere else in
Two

to

is

practice

cal control of production and

fect

propose or

world.

aim

shown that it cannot be

ports of many important commod¬

your

FT. WAYNE,' IND.—Gordon S.
KY.—Henry W.
Schoening has been added to the Griffin has
become associated with

staff of J.

collective ^action

■

more

the

1 LOUISVILLE,

West '-Jefferson

Organization, this

demobilize

recent

With Leonard J. Fertig

J

.(Special to Thb Financial chronicli) '.-

of

has

else

being tied together in the massive

as

employment in most occupations.

:; With J. J. B. Hilliard

Trade

structure

activity is the

freedom, economic

war

as

any

old line companies in this

..•!

v*

.

in

creasing

contraction

attempt to
government,
or
to
shrink its powers or functions in
any substantial way, in America

Their investment record is tops! It is our opinion that
insurance stock prices are very, attractive today—see what
you think
about it and send for some copies of this excellent booklet. Here is

.something

by remote control, but experience
this country and
everywhere

allocation

arrangements of
period and running down
through the Bretton Woods agree¬

demobilize ?

industry.

■.•some

free economy. The Keynes
scheme
is sometimes called
communism

national

The

seriously to

believe represent outstanding values today and
that you would be pleased to give them particulars if
they so de¬
sire. 'Follow up your mailings with telephone and personal
calls,
Coffering them not more than two or three specific stocks.
.W
It is not the purpose of this column to undertake any original
research into specific situations, or even groups of
stocks, but in
this instance we are willing to leave a reading of Mr.
Geyer's wellthought-through presentation oFhis case for the Casualty and Fire
stocks to your own judgment. The way we see it he is on sound
At any rate you can't sell you customers better? mer¬
ground.
of

complete

in

has been

■

eral stocks that you

chandise than the stocks

and

the

political, but governments United Nations mechanism for
themselves, and promoting international peace and
since the New Deal decade and security,
economic stability and
the war in which it culminated, it full
employment.
Though
the

exceptional profits. Explain that you
are enclosing a copy of an address made
by orie of the security in¬
dustry's leading authorities on insurance stocks and that you think

that,

the

growth of the collectivist mind in

applied

well

be turned into

can

of

at home and

ments to the Charter of the Inter¬

never

them¬

present

manifestations

ning" to underwrite and
manage
the market for goods and
services
abroad; and only in
that way is it possible to
avoid
detailed State control of the
con¬
duct of individuals and

•'

sumption by government. Begin¬
ning with the commodity pooling

,

crux

piece of direct mail literature that should bring in the
properly used. A personal letter should be mailed
to your customers and prospects stating that from time to time
you
ire definitely convinced that bargains do
appear in the securities
this

to the

one

.'????/

'

We

be done.

can

trol of government

a

When

\■?-

tions.

business if it is

markets.

The

from

pass

??

interpret its popular mandate
dealing
with ' taxes,
public
spending, labor and foreign rela¬

analyses concerning the present position of these highly at¬
securities that we have ever had the privilege of reading.
Geyer and Co., Inc., 67 Wall" Street, New York City, as well as the
Boston Securities Traders Association, attention Mr. G. Carl Jor¬
dan, Jr., c/o R. W. Pressprich & Co., 201 Devonshire Street, Boston,
Mass., have available reprints of this address in handy booklet form,
suitable for mailing in a regulation size business
envelope. Ask for
Here is

cannot

in

sound

}

'

imagine its removal or any mate¬ current American
life, within the
rial change in it, and have come
form and phrases of a free econ¬

to

tractive

V

you

other.

nor¬

painful picture of paralysis which
the majority party in power in
Congress has presented in trying

address before

:

most Americans

.

so

now

or,

a

ownership of production,
omy, are many, and perhaps the public
already been living in the most current and crucial is our and - resources. Though the
ele¬
iron lung of government control
ment of compulsion in
extensive and increasing partici¬
this pro¬
so
long that we can't think of pation' in international
cedure is perhaps
govern¬
painless, it is
breathing the air of economic mental
and
arrangements for control pervasive
persuasive, l and
freedom with comfort or confi¬ of
since a free capital market
trade,
investment ? and
ex¬
and
dence any more.
*
:
change, which require and commit free consumption are the key¬
stones
of ? private
This
is
plain enough in the this country to far-reaching in¬
competitive
pathetic history- of postwar re¬ ternal regulation of prices, em¬ capitalism, when it is fully ap¬
conversion policies, and - in the ployment,
production and con¬ plied it does not leave much of a

n.-

_

that

1669);

is

familiar

which

Thursday,- March 27, 1947

have

£s old as the proverbial hills. Find an
curity that has been depressed due to conditions outside of the
control of management; where the intrinsic soundness of the venture
is unquestioned; that is about to turn the corner for the better, and
that is selling at bargain counter levels because most people are too
dumb to know a good thing when they see it—that's all you have to
do to make money for yourself and
your customers.
"Buy them
when nobody else wants them," is the best way to make money pro¬
viding you are buying something that has intrinsic value and not
junk. There is a difference you know.

£The Special Situation in Insurance Stocks."

control

and

to doubt that it

One of the best ideas

customers.

our

ideas not securities.

sell

we

.«u,

stability
assured

and
-

by

expansion
government

can
*

? be

"plan¬

in

umbrella

a

free

market.

The

complex is common to
but all private monop¬

all groups,

oly—including
that is not in

by

that

some

government

corrective

in

is

time,

position of private
this

of

labor-

supported
usually selfand the dis¬
enterprise in.

way

country to seek, accept, ap¬
or depend upon expanding

prove

government support or regulation
of the market has been evident
and
increasing. ? The American

business mind
to

is

deeply-divided,

the

point of displaying a; sort
of split
personality, on nail) key
questions of public policy that
affect the free
market, like'price
controls, price maintenance' sub¬
sidies, priorities? allocations? i ra¬
tioning, tariffs, foreign loans? gov¬
ernment

ing,

lending? buying'and; sell¬

and

especially on industry¬
Collective bargaining,' 3 the
closed shop, etc. The coefficient? of
wide

business tolerance of government
intervention in the economy has
risen rapidly in the

past decade

of

new

ever

on

dealism and war, and how¬

divergent its views

particular

measures

may

^be

of govern¬

ment

it

regulation, there is one idea
widely accepts. This is the idea

that, it is possible and necessary
for government to underwrite the
consumer

market

by

managing

[Volume 163 ?■ Number 4580

THE COMMERCIAL & FINANCIAL CHRONICLE

general fiscal functions so as
maintain consumer purchasing

Die
to

power"

and

employment.

economic

Marxian

em

lit

The

doctrines

is

•

of preserving a free
economy starting from where we left off
America, Soviet communism in our last adventure in compul¬
v

sham

a

menace.
It is not an
economic movement, but a
politi¬

of

Lord Keynes and his domestic ex¬

cal or, more

pounders are today the credo of
American business; it not only
sees no inconsistency with a free
economy in their application by
government, but is convinced that
they are indispensable for .the
preservation of a free economy in

conspiracy of

America. We find American busi¬

without

vant, and
meaningless
in the v
was busted bebegan, and today it has American climate. Whenever Jn ?
sory
collectivism, the terminus plainly become an elaborate apr their history they have been drawn 1
must be total insolvency and total paratus for the purpose either of or driven;—by the political devices
slavery.
'(}'■
u.' .V''-, international parasitism or col- or economic accidents of domestic

precisely, a military
planetary pillage or
ective conspiracy, or both.
The course of events abroad as
Not conditions—into an imperial strugiplunder, if you please. well as conditions at home
lie in the rest of the world, they
bring merely has it evaded the issue of
Russia is today, as in truth she
us closer day by day to the time
disarmament; it has evaded even lave done the job of ending it for
las
always been, a parasite on
he
excercise
of
any
effective the day and then have always
when we shall have to decide as

Western

capitalism.

munism

has

economic

or

our

in

Soviet

itself

com¬

military power, and
support it would long

toddy making since have collapsed. Soviet Rus¬
constant use of the familiar for¬ sia is a primitive, impoverished,
mula
or
device
of
communist
predatory Asiatic despotism. It
ias
lived and ruled for three
decades by plunder and by exiloitation of an immense mass of

propaganda, which is to warnjhe
public that unless certain mild
of

compulsory

of this kind

tivism

will

country

the

Every day we hear some business

along

leader,

with

labor

some

capital in

human

communist.

go

the

form

disguised with borrowed

-.li

devices
,

New Economic Dogmas

r

our

use

we

deter¬

police

promptly

peace,

are

power

*

of

modern

the world

from the

of

morass

the free economy,
One

r

;

wonder

may

j

technology

imprisoned

which

has

been erected around her

political
institutions and economic organi¬
zation/

this C decade,

during

whether" she

to

is

or

life

resume

have been

within the traditional framework

of. economic-. freedom: and

-

businessmen,
or < anybody
else,
know whether it will work, for it
lias not

yet worked anywhere in
the world, and it would be hard to

invent

imagine any system that
could produce such amazing waste
or

and confusion, poverty and in¬
security as is now being exhibited
day by day in a world of coun¬
tries

whose

economies

pletely planned

are

well us
for other countries in Europe, the
chief danger to the free; economy
lies
in tbe
drift of our own
thought and feeling toward com¬
pulsory collectivism, and in the
confusion or 'cowardice that se¬
duces or persuades us to policies
and practices at home or -abroad
under' the name of freedom anc

com¬

this principle,
under
central
government y. con¬
trol. One may wonder even more
on

why;the spokesmen

and

tioners

of

of

that has

kind

the

convinced

not

.does

it

did

to

here

work

should

not

is in this state

There
so

want

or

that

vinced

practi¬

economy

accomplished what has

been done in America

be

any

be

or

more.

of mind

—•

though often uncon¬

common,

as

us,

which - inescapably
and make it perma¬
To suppose or pretend tha
are. fighting communism when
do these things, is folly or

democracy,

.

promote it
nent.
we
we

fraud.

Dogma. of Unlimited Governmen;
enemy' of

deadliest

The

con¬

work

.

other names. For

eco¬

and political: freedom* In
America and everywhere else is
nomic
the

tarism

under,

its .methods

of

plication
these

or

the

ernment

found

ignorance of past and pres¬
experience or the considered

ent

cynical conclusion of specula¬
expediency, which is that so¬
cialism is coming in America as
it has come everywhere else, and
the safest, or wisest or even the
best thing to do is to be ready to

or

tive

ended, though its purpose
ferent, let them make the

their

*

Soviet Conspiracy

sketched is
partly spontaneous, and in part
deliberately nourished by a com¬
prehensive and carefully planned
international
conspiracy.
The
feeling

I

have

-

of

center

this

conspiracy,

o

is Soviet Russia, and its
immediate aim is to promote the
decline and suppression of any
form of economic freedom wher¬
ever it
still exists, especially in
the .United
States. Its ultimate
course,

is to destroy the politica
and
civil - liberties in

purpose

freedoms

other country and extend
communist rule throughout the
worlds The existence of this con¬
spiracy i and the evidences of its
activities
here
and
abroad, in

every

implications 'of monetary in¬

employment,"

"full

for

or

the confusion of our

domestic sit¬

futility of our
foreign policies. Let us offer them
freely to the world for a price that
uation

the

and

of our power and our

is worthy

Let us deny them to
anyone who. is using them,
as
every other nation is today, for
purpose. /

cannot

live

with

a

The,

free America

?

American

neither the

ex¬

plundered by their neighbors, or
in hope of surviving and expand¬
ing by plundering them.
the

ultimate

economy,
name

or

no

any

a

V*

'

;

„V

«■'

'

V*

!

'

■

,

i

'tf I

\

armament.

itself,

J

*

J

nearly 30 years of war
devastation, most of

*

\

'

4

•

- 1

'

\

", MV" ip

,

if, after
waste and
which we

\

•

/

*1

;

1

''

".

*

,

v:..;"':" 'i

x

1

\,

k:'W-"-V-*':"-V•'*

.

j«...

-

^

•

Price $10 Per

.

support these
armies and bureaucracies for any
to

To

whatever, whether it be
?

.

* *

Copies of the

s

in

some

and

measure

groups

all gov
in every

country.
as

it looms up in the




prob-

familiar signposts
of the war-economy — conscrip¬
tion, inflation,- rationing,' priori¬
ties, price and wage 'fixing and
all the rest we so recently thought
we

had left behind;

"

'

'''

-

«'

.

1

,

.

r;rr:r;rf^\

but this time,

•

vc.

ur

20 Pine

Street

,■' vqm&tasmtati

v.oboriko

.•

Vjv

',

Prospectus may be

f

;1*-4 '

1

Share

yield 5%

.

X

;

'

.

./

,

obtained from the

undersigned.

-

%

«-

-' >

v.

'i

GEORGE F. BREEN

pect to see the

ernments

'j\ » '

Stock

,

\

■

road, on which we may soon ex¬

distress

-

Without Par Value

;<f;

remaining resources on a piece¬
meal basis in'the infinite and

agitation and

subversion to pro
conflict, violence
and disorder, and it in

.

PRODUCTS CORP.

Cumulative Preferred
\

paid for, we here in America, the
only surviving island of freedom,
undertake again to dissipate our

purpose

,

SARDIK FOOD

Surely there is no hope

effort

/

of economic cr

other freedom for America or
other nation lies in world dis¬

futile

»

free

matter under what

form it manifests

and the final hope
any

of

enemy

30,000 Shares
•

Mars is

mote confusion,

Yet

less struggle

of peace, freedom and

purposes

who

world" of beggars or robbers,

> aspect
of economic and to save the world for some new
political life, are definite and un¬ definition of democracy, or merely
to postpone another depression or
mistakable.
It
operates by:; in
win another election. If we do, we
.'numerable forms and agencies o
sabotage, espionage, propaganda start down an endless one-way

1

abroad in the hope¬
against the pervasive
conspiracy to sterilize and dissipate them, which is reflected in

at home and

any other purpose. Let us demand
plenty fr.om which it sprang or it that whatever else the United Na¬
must perish. It is a dynamic force
tions may do, it must deal first
which must unfold itself to the
with the fundamental issue of dis¬
The brutal fact is that the war
j armament without further delay
left us facing an encircling "one- end of its destiny or die. x
,

.

material and moral resources

our

and Robbers

A World of Beggars

every

wolves

;

.

>

-

be dif-

equally plain. * For* the moment*
most of
as we have emerged from the war,
it, for this time we have no other
we
have in our. hands,
almost choice, and will not have that one
alone, the decisive instruments of much longer unless we make it
overwhelming military and indus^ now. We must ask the world that
trial strength, which we don't surrounds qs not merely to; accept
know how to use. If we were-tr; our power, but to accept our pur¬
put forth upon the world .the full pose of peace and freedom for our
force of our economic and polit¬ own sake as well as its own, and
ical power* for the only purposes we must use our power to that
for which we can conceive using end.■
/V'it, the structure ©! compulsory
So, let us put an end to com¬
collectivism in., the rest of the
promise, appeasement and retreat,
world .Would collapse/like a house and dare to repudiate all that has
of cards and the mirage of un¬
been done to that end and in that
limited government would vanish
name.
Let us stop the erosion of

ploitation or oppression of their
own people, or for fear of being

The collectivist trend of thought

.

that faces us.; is

people;;. tjusrve or jelirasion. If \ye believe that it
temperament, impulse is not and caripot be the kind of
corruption
thataccompany
it. or without her. The global organ¬ nor the talent for any form of im¬ international instrument to which
Soviet Russia, her satellites, and ization in which they pretend to
; /
(Continued on page 1672)
all the other collectivist countries have banded together to safeguard perialism. It is something irrele¬
of the world today are busted be¬
cause they have been and are still
ridden by
the burden of vast
bureaucracies and armies main¬
tained in
corrosive idleness or
This announcement it neither an offer to tell, nor a solicitation of offers to buy, any of these securities.
The offering is made only by the Prospectus*
forced consumption, to promote

ride it.

and

.

dilemma

The

communist totalitarianism, with

petitive capitalism,

flation, economic waste and moral

and its > frantic
fear or fatalistic despair of free¬
dom. It can reflect only a pro¬
power,

kind of imperialism
that must end as all others have

drives us to a
'.

.

powerful instrument is not com¬
munism but militarism, with all

combination of blind faith in gov¬

,

Our Dilemma

-

of„ magical

government, and its most

limited

scious, in American business to
day—something fanatical in ; its

destroy them. If anyone complains
that >. the
dilemma
implies or

promoted and exploited

myths and pretensions
power
to produce
plenty and peace, are economically
and morally; insolvent today. The
dilemma that confronts them; is
that they must either/cripple or
prey upon the productive power of into thin air. If we fail to make
America, they must either hecome the fullest use of our resources
for the purposes of peace; the in+
our dependents or our destroyers
which in either case must; mean ternal dissention, confusion aric
the; end of: political power for conflict upon which the collectiv¬
those who, rose to it, in those ist virus feeds, and which are be
countries by promising their peo¬ ing fostered among us with fever¬
ple the collectivist paradise as ish speed, will spread, increasingly
soon as it should become planetary
cripple and. paralyze our power
in scope. Isolation has become as and finally destroy "us.
In the
kind of world in which we live
impossible in our time for totali
tarian
socialism or compulsory today, the kind of power America
collectivism as it: is for free com¬ commands must be used to those
all

and delusion of un¬

dogma

::eel that way.

It is being

to that end.

com¬

bureaucracy, socialist

and

the last in

be able to
The decision they

built—if it face today is fundamentally dif¬
was not originally designed—as a
ferent from any they have had
massive device for immobilizing, to make in the past, for this time
sterilizing, sapping and dissipating the world cannot and will not let
the power of a free America, and them alone. They have conquered
all
our
policies and disposition it in fact; they will now be forced
toward foreign appeasement and to subdue it in spirit and practice
philanthropy, as well as our in¬ to their purpose of peace and
or it will
ternal difficulties of reconversion; freedom v and plenty

their faith.

global

the

within

militarism

and

rest of

the

true; but this war was
which they will ever

against the ultimate test of
in which alone they rest

force

structure of compulsory collectiv¬
ism

stabil¬

how

gone

give them as

could

hemselves to the teeth in feverish

which they haye not the tempera¬

^

>

There has never

anything

laste

capacity, power or purpose ex¬
petitive effort is the central, issue
ity, and about government! as the cept those of oppression,, plunder
for the" World.' It underlies not
lairy godmother of full employ¬ and ' intimidation, insolvent ih
ment and the guarantor of market everything save the resources of onljT the larger issues of interna¬
tional peace and reconstruction,i
demand,- permeate: the ■»; business intrigue, treachery and terrorism,
Dankrupt, of all assets but brutal¬ but/ also : the practical domestic
literature of our time; and impor¬
problems of • reconversion and
tant organizations of businessmen ity and bluff.
prosperity for us.
are devoted to propagation of the
The real menace of communism
The essential truth in the situ¬
faith that only central government to freedom, in America or any¬
control of this kind will work as a where, lies' in our acceptance of ation I have been describing is
that: under the- incubus of mili¬
way of preserving and improving its fundamental ideas and our ap¬
and

it

their own.

in

dogmas p about consumer ment, intelligence or training to
purchasing , power as the r open master, it is empty or any real
to prosperity

and

back to
been

abandoned

the

preserve

set out

of

These

sesame

to

-

the world
good as what
ts members., Not only are all of they have gotten for themselves
unlimited government and endless
lere
at home; there is nothing
militarism or will make uncondi¬ them today taking full advantage
tional surrender to the system of of its camouflage of parliamentary
hey have wanted from it except
ideas about the State which we mechanism and strategy to arm to be let alone. And this is still

stolen

or

powef

and has actually become an

instrument for promoting internal
revolt and external conflict among

liberate ourselves and the rest

o

of

ramed in meaningless economic
leader, say; "We believe in free
enterprise; but it must be made dogmas which none of its people
to
work by better government understand, and is decorated or

control."

whether

mined to

thirty years ago to destroy
Europe- and Asia and which
have invaded and conquered us
political prisoners, war captives
while we were doing it abroad.
and
slave citizens. Though this
Whether America can be kept
massive totalitarian structure is

collec¬

adopted,

are

nation

a

actual

no

spokesmen

measures

it

:ore

jlobal

,

ness

and freedom

peace

*

.

.

THE COMMERCIAL & FINANCIAL
CHRONICLE

1672

The Survival of
the

Free

a

(Continued from

Economy

1671)

page

(Continued from first page)

the life, work and thought of men
safely be entrust-? everywhere at home and abroad.

ed, let
and

Trankly
.should

the

and
find

world

with

fearlessly.
If
England has

that

it
we
so

iar slipped or been shoved down
the slope of collectivist impotence,

is

America and all that she signi¬

face the fact ourselves

us

confront

she cannot and

manifest

vent still

does not mobilize,
put forth the full
and.economic.power which

moral

she

so

and militarism that she is unwillI

>ing or unable to make more than
a sleeping
partnership with us in
the enterprise, let us prepare to
undertake the task of

-world
Let

policing the

for peace ourselves alone.
then implement the purpose
.

us

promptly and
.specific ways:

plainly

in

in many cases;

and

can

now

oppose

only

seek to

undermine and

dissipate her pur-[
pose'and her spirit, and compel
acceptance of the ideal of freedom;
and peace to which we assumed
her living sacrifices were dedi¬
cated

thought
"It

three

the

in

we

is

war

we

the

us

railroad

one

necks.

?

an

How

do

the

pessimists

the slump to materialize?
the arguments.

advanced.

continuous; rise

who NyiU

before

abolish

all

•

Let

first

us

offer

the

undertake

national

■■

utmost

>

military

to

ex¬

we

local

constabulary J
un¬

lion and

control of every indusoperation 'and process ^and

'

trial

public

<«very

have

the

ship

to

policy

most

which

may
relation¬

remote

armament

-and

keep plenty of our best and
biggest atomic bombs for that im¬
perative

.

them in

purpose;

principle

let

in the world where

suspend

we

spiracy against this purpose;, and
let us drop them in
fact, promptly

rsnd
ever

without

compunction,; wher¬

it is defied.;

If

r

this

/Y/YYt
daring or

too

seems

.idealistic

a
destiny for apy nation,
America, to embrace, I ad-

even

irnt it could

.

s

.

•

happen mnly once in

history; for: the dreadful fact
lhat

only

is

could

we

and

we can.do it
*f we have the

do it at all;
only now, today,

understanding and
the; will. ; Everything
else
the
American people
have—impartial>
•

lty and purity of moral
purpose,
and limitless potentials of
eco¬
nomic power that will be
realized

;; only if we are willing to
employ
.them for this
purpose."
i
•
V
:

Disarmament
and

men
•

:

e

—

nations

ments—is

the

not

merely

•

but

of

of

govern-

fundamental

dance in the world
today, and the
most momentous
circumstance in
human history is that at
this inslant of time—never before

and

/

never

/

only America, has the power to
Impose such disarmament, and

!

1
!

—

America,

and

perhaps forever

remove for mankind the curse of Mars and its
in-

,1 separable companions, poverty and
tyranny.
,

:\t Military
enough.
i

disarmament
is
not
We must have political

disarmament, too;

must

we

ulti-

mately deprive governments not
\ only of the power, to attack other
,

governments
;

■»

•

but

to

oppress,

ex-

pioit and plunder their own
peo¬
ple. Yet militarism is
always an
expression and a weapon of that

step
i:

and

f

ml

toward

economic

prosperity,

we

can

as

compel

'

well
the

gave the last

here highly

we

this

NY Stock

nation,

-a

new

unjder'

birth

of

Exchange

;

to

Exchange,

member

firms on
March 14 stated that the
^Exchange
is desirious of

peace,

unlimited

1

v

■

peace

and

(.1)

Total

number

of

transac¬

tions; (2) Total number of shares
bought and jsold (combined); (3)
The number of, transactions and
the number of shares
representing
full lots; (4) The number of trans¬

actionsnnd the number of shares
representing
odd
lots;
(5); A
breakdown of the

the

State

of

above

origin.

data

The

our

is

when

he

burden of

government

and

militarism impose




the
upon

high
it

price

things

level.

a

at

were

-absurd

an

overlook

of

prevent

placed
like

at

par.
were

amount

dated

of

Of

the

used

consoli¬

April *1,

to

proceeds,
retire

debentures,"

a

ma¬

turing April 1, 1947 and
$11,695,000

will

poses.

tal

be

for

new

money pur¬

As of April 1,
1947, the to¬

amount

of

dur¬

from

ex¬

level

inflation and

certainly

will

not characteristic
In general. Sure¬

a

for the economy

fore

the war. In the retail
field,
the department stores are known
to
have
reduced
their
orders;

year..

late V unneeded

inventories

on ; a

speculative basis when every day
somebody else predicts a recession
and a decline in prices? The
only

down in order to create a
healthy
basis for a long period of
pros¬

perity.

national

income.' There

seems

to

prices alone do not discourage
builders." * Not enough attention
is
jg i v e n ■ to 'the, ■ fact
that

be a shift in sales from soft
goods
to; heavy goods but the total sales
volume' surely does not -show

aj

(With

surprising

and

unprecedented

of

devastation.

low interest, rates to some' extent
offset the high costs of ;building.
f All in all, one can foresee a pe¬
riod of adj ustments and growing
competition, but no general slump
in

business

activity. -Some lines
busy

of business may become less

than

recentlybut many others
only waiting for an opportun¬
ity to expand their production.
are

It is

of particular importance that
high activity in the heavy goods
industry has a multiplying effect
throughout the economy.
That
.

present industrial activity, (and
national
income). is extremely
high compared with pre-war fig^
„

fores is not

for

a reason

ordeal

Observers

who

debentures

standing will be $353,440,000.

out¬

Every great
speeded fop

pessimism.

in the past has
our. economic devel¬
war

opment and put industrial
put and national income
much

out¬
on

a

higher level.

have been able to look behind the
"iron

somewhat

curtain"

fully

confirm

The Stock Market

the

frightening unanimity,
appalling state of Russia's econ¬
When investors and speculators
the; pessimists predict a long- omy. Far from
provoking war, are pessimistic and
lasting period pf prosperity, ence our firm
nervous, earn¬
policy is likely to call
the healthy "shake-out" has taken
ings are capitalized at a low ratio
the Russian bluff and
ultimately because' of fears that they will
place.) But It is quite necessary lead
to a healthier
foreign situa¬ not hold up. This
to make a
clear-cut difference
happened in
those

of industrial

goods.

tion.

}

1932, 1938 and 1942. We

False Analogies

Prices

of

in -such

We have

for agricultural
prices as has been

your own records."

debentures

fact

not the high costs prevent
full-fledged housing fobpm? A
careful study about the relation
ly, consumers become more choosy between building costs and build¬
with
the
increasing supply - of j ing activity by the Department of
goods.; But the ■" most -important Commerce ("Current B u s i n e s
$
barometer, the- sales of depart¬ Survey" Of November 1946) came
ment stores* do not show signs »of
a buyers 'strike/ The. increase.1 in
study of changes liiv building ac¬
are

.

FIG Banks Place Debs.

dated

The

materials

many

goods ' industries

-

the

dustry. Y. / w • (... ...;;.,.. .Y
; ■: y, ;;
The shortages to made
up ,iri
housing are also'enormous. But

luxury goods. But these

due to the wartime

for years.

on

panding their production much
more; foremost among them is the
highly important automobile in¬

decline in the price of furs

and other

workers

able

re¬

has; caused

go

may

only

and

is

^

$49,725,000

^unlimited

the-

that

severe

Much

growing buyers'

to

reads

•One

a

Strike:

the

world which,
through cowardice,
stupidity and treachery, becomes

day by day less and less free
and
<*ay>y day more and'more slave
to the
frustrations and fears which

inventories

caution is

about

sistance

where the customer

enters

1947, and due Oct.: 1, 1947 and
$41,405,000 1.10% consolidated de¬
bentures, dated April 1, 1947, and
due Jan. 2, 1948. Both
issues were

a

Buyers',

now a veritable
many commodities are indeed
slump
Unduly high and will eventually psychosis. In the midst of unorder, if come down a
paralled .prosperity, many people
good deal. But this
possible, or the customer's cur¬
decline is unlikely to occur ias are extremely jittery,.
Why? The
rent address, of record.
long as we ship large quantities main reason seems to be the re¬
"(Transaction emanating from of food to a
membrance of what
hungry world and as
happened in
customers
outside
the
United long
as
we
use
unprecedented 1920-21. But this analogy is false.
States should be listed under the
quantities of copper, lead, cotton, The crash of 1920-21 was caused
name of the
country of origin.)
etc., in an unparalleled industrial by a policy of deliberate defla¬
v.
"Please note that this request boom.. The eventual decline iin
tion-(hi^ dntq^est) /of the Fed¬
calls for a reply from each firm commodities
may
well be rela¬ eral Reserve System which hit an
to which it is sent.
A form for tively slow and need not be simi¬ economy characterized
by overreporting this information to the lar to the break of 1920; then, by specula tioh and over-confidence.
Exchange Is attached with a dup¬ the way, there was no support Now we have neither a deflation¬

by the place

scientific accomplishment and productive
power make
possible in a free
economy. One
sees rather a
nation and a world
deeply divided against

itself,

shortages

(3)

considered

by between commodities
prices and

State

classification should be determined

$20,015,000 1.05%

plenty

that

ment

-

■

realizing the

also

*

governments of the world to
stack
A successful
offering of two is¬
their arms and turn
their swords sues of
debentures for the Federal
into tractors.
Unless we can do
Intermediate / Credit Banks was
f that, as we enter the
age of atom- made; March
,18 by / Charles
5 ic
E.
alchemy one can see on the road
Dunn, New York, fiscal agent for
ahead for America no
hope of the banks.
The financing con¬
preserving economic
freedom, or sisted of

-which

pessimists

deflation, which is ex¬
tremely unlikely, could turn it
into an abrupt and severe drop.

.

1

-of

move¬

buyers'" Strike.
We see now in
surprising fact; (and a proof of many, fields that
marginal pro¬
the vigor- of the boom) is that
ducers, who/could- prosper only
business is doing so well in spite under
abnormal wartime. condi-1
the; Exchange, .and the of all
these dire predictions and In
cooperation
of ' member ;' firms
tions, are being squeezed out of;
spite of increased caution since business due
to the return to a
carrying Customers' accounts 'has
last Fall. To be
been • solicited in
sure, inventories more normal state.
That is only!
compiling. the
would be too high if there should a
natural/ development, however
necessary data.
The notice, is¬
sued* by the Department of Mem¬ be a serious decline in business ■painful it may be for
many in¬
activity; they are always too high dividuals.
ber Firms,
'
'
' '
through Edward C.
in a depression.
But they are not
Gray, Director, went on to say:
(4)
The
Foreign
Situation:
too high if business maintains its
"The week of March
24, 1947,
Many people fear a slump due to
(March 24 through March 29, trade present volume. ; The inventory
position is therefore not a source; increasing tension between the
dates), has been selected for this
Western powers and Russia.
Is
of potential trouble
although it the
purpose
and all1; member firms
situation really alarming?
could intensify a
Ifj
downswing/ if ■Great 'Britain
carrying customers' accounts are
has been 'severely
it should; be
brought about by debilitated
requested to supply the following
by the war, how much
other factors. ;
~1
information for that period: (Do
weaker must Russia be who had
not include transactions effected
(2) The High Price Level: The to
fight Hitler's armies for four;
for omnibus accounts of out-of- pessimists argue that the price
years inside her own
country and
level is too high and has to come
town member
endure an
correspondents.)

obtaining informa-j

?

•

an ex¬

pansion and modernization

tion concerning the
origin of all
orders in stocks executed oil the
Floor of

freedom

as

-

of 1929 and 1941. But such

us

who would dare to accumu¬

The New York Stock

notice

of

ex¬

its
plants -at the present rate, which
is about double the dollar
total
in •the • best
pre-war / years

deliberate

statistically proven ;that the re¬
lation of industrial inventories to
deliveries is now better than be¬

Such

e.g., new wage/in¬
For all these reasons the

heard

favorably with the previous

extent by contradic¬

some

forces,

dustry cannot go on for long
panding "and ; modernizing

certainly not an; sales in recent months (10-15% tivity seems toexemplify • the
unhealthy development. Nor is • it over last year) corresponds al¬ thesis that
business advances: by
surprising. Where is the business¬ most exactly toi the increase in
expectation of gain arid that high
man

From Members
a

as

of

that in¬

argue

industrial5 prices in
general cannot be rapid. Only &

sharply since last Fall although
their--salesZ continue to compare;

Seeks Data

gigantic modern engine of
jobbery
robbery which is'unlimited
government, and it will be a long licate for

y«and
•-

that

they

God', shall have

and

imperative condition not
only of
peace, but of freedom and abun-

afterward

for which

in
is

state

a

decline

expect
Let

"returnYto

Some pessimists

the

creases.

tory

by
very unhealthy
Yet, it has been

development.

freedom.

in

Day

take, increased devotion to that

resolve

place

have any
to suspect evasion or con¬

.reason

;

us

over every

V-J

the pessimists

and? warfare;

And, finally, let its make, improve

since

great task remaining
from these dead

cause

the

to be dedi-

us

us—that

full measure—that

-of

inspee-

•

set to

(1) The Rise in Inventories: The

nobly

It is for

catet to the

level

•Let us, secondly, demand the
limited right of continuous
-

it. is

examine

i

.

.

importance,

normalcy. But this is a slow and
gradual process and will be off¬

character¬

economy

increasing

dollar, thus allowing the con¬
to buy more soft
goods for
his -money. >> • / /''YY/Y
YYY'Yv
er

sumer

effect. All these factors will

more/we

"The Arguments' of the Bears

recently

living, to be

,

time , and lower com¬
prices would have the

increas¬

ing competition which will
raise
the buying power of the
consum¬

a

over

-

ized by I sut^;
pronounced
ages and an abundance of money?

dedicated to the unfinished work
which they who fought so

.

,

penditure and disarm down to the
j

but

costs /■

gain

the bottle¬

cars

-reduce

of

market conditions means

are now quite high
technological prog¬

same,

of many similar bottle¬
there
ever
been f a

people

.

period

Has

slump in

.A-.Y V

won.

for

so

in

will

.

modities

higher operations. Most

embarrassing of all is
neck

■capacity of our economic power
tfor reconstruction freely to
every

-

ress

higher than ever before in peace¬
time but that
shortages of certain
materials and skilled workers pre¬

fies in human welfare and progress
will finally be forever erased if

command to
hopelessly crippled by the
problems of insolvent imperialism the destructive forces that

or

margins which

applies to many other industries.
In dozens of
company reports, we
read that the volume of orders is

police power for maintaining

world peace can

Thursday, March 27, 1947

promised by the government now.
Such a gradual decline would
foe

quite healthy and need not inter¬
fere
with
general ■> prosperity.
Agricultural
products
declined

gradually in the "twenties" without
imp?
impairing. our
prosperity.
,

What

They

about

industrial

prices?

unlikely to come down
with a bang.
Wages and other
costs have risen
sharply, primar¬
are

ary, policy . norI over-speculation
and over-confidence.
'/
;
' ' j

;-Never before has there been a
depression in the face of such

powerful

boom

factors

as

urgent

demand for cars, houses and
pro¬
ducer of goods
(accumulated not

only during the

war

in the "thirties"

in

but already

when production

heavy
subnormal), /an

industries

many

ily in consequence of the mone¬
tary inflation during the war.

that

:'4 tifoies

earnings.- Earnings
could.decline sharply and present
prices would still appear low.
Such

pessimistic ..attitude

a

change quickly

can

know from

as we

previous

occasions.
The
bears
should take a warning from re¬
cent

in

events

commodities

the

market.

Last Fall, after the break
in the stock market,, many people

became

bearish

commodities

for

and went short.

dearly

They had to pay
for /their
bearishness>

Something similar
the

stock

happen ih

may

market

one

of

these

days.

When this "best advertised
allV depressions" will4 fail! (to

of

materialize, when the pessimistic
forecasters have to postpone its
beginning from one month t-o^thfo
other,

when

industrial

dividends

will

learnings

remain.high,

then the present sentiment <of'pes¬
simism must ultimately;give way

for durable

Even now, we are not

capitalized at only 3

their present

and

abundance,' of

are again
Many leading

period.

companies with excellent finances
are

was

money and an interest level which
is at a record low. The

a

pursuing a
policy of deflation and are un¬
likely to follow such a course in

it

demand
goods is so enormous
should easily offset

decline
will

any

in

there

the
be

soft; goods.

such

a

the

to

seeable

be

feasible

future?

prices1'can

in

Thus,

come

fore¬
industrial

any

down

only
combination)

through one (or a
of the
following causes: increasing
competition may cut down profit

war

was

It

to

some
degree abnor¬
But the decline after
the satisfaction of this
replace¬
ment demand
may be much less

mally high.

pronounced
assume.*

than

Return

to

the

pessimists

more

a

more

constructive

Jellinek With

attitude.

•>

»

,

But

decline?

future. Does anybody
expect a may be true that the demand for
policy of large-scale wage reduc¬ $oft goods since the end of
the
tions

to

normal

Dreyfus,

Jacquin

t

Dreyfus, Jacquin & Co.,
61
Broadway, New York City, mem¬
bers of the New York

change,

Stock

Ex¬

Jel¬
linek has become associated with
announce that Ernest

the firm as co-manager of the
Madison Hotel Office, 15 East 58th
Street.

•

:

Volume

Number 4580

163

THE COMMERCIAL & FINANCIAL
CHRONICLE

have just above it the
heavy sup¬
ply created during the top area of

The Outlook for the Stock Market
(Continued from first page)

f*ve of the thirty issues in

iu

The history of 1946 stock mar-! the Dow Jones industrial
average
ket levels illustrates very clearly were closely associated
with the
the fact that expectation or hope; enormous boom in
consumers non¬

regarding
ings

are

than

actual

current

determining

the

'Thus

^prices.

level

it

of

stock

possible

was

Actually these five issues

year.

account for only 8% of the
present

to

forecast at the beginning of 1946
that a low rate of earnings in the

total price

of the

average.
the expected decline in the

Thus
earn¬

first half of the year would justi¬

ings of these issues and the pos¬

fy a level at sdmetime in the

sible further decline in their al¬

low

;as

year
Dow Jones

in the

165

as

ready deflated prices

industrial average but that such a
low
level r was
unlikely to be
reached unless serious interference

a

reached.

that

the

It

stock

should

be

market

continued

of

presence

de-

such

between

and

stock

bond

yields", a steady flow of dividend
increases
and
highly
reported
earnings,
-It also was, reasonable to fore¬

cast that

.sustained hope for -much
higher earnings and dividends late
In .1946 could not only maintain
n high level of stock prices but
also produce -an even, higher one
if 1947 seemed "to promise a sus¬
tained level of high earnings and
•dividends.

The much higher level

of earnings and dividends was at¬

tained in the last quarter of 1946
and is not only' being maintained
far in'1947

sso

but is

even

being

improved

upon.
Is it the lack of
the belief that these earnings can

continue that is keeping the stock
market
from
translating these

earnings

and dividends into a
good deal higher prices than cur¬

?

.

rently

prevail?

It is not

that, de¬

say

the

average.
If to
and oils we add

the

that the current rate of earnings
has been equalled or exceeded in

far

1947

the

this

point the

Dow Jones

determined

hand

indicate

to

earnings

that

the

above.

I

the

summer

tions

It is

week

•

•

.

.

'

1946

—$1.86
3.15

Third

~

(est.)

4.25

3.58

4.00 f

6

$8.50

mos

the

low

overall

level

of

the

current rate of earnings. The fact
that most of these same issues
would have to lead If there were

to be

sharp downturn at some

a

in

1947

half of

second

the

the

from

present

reached

Feb.

on

8

industrial

the

had advanced $21.37 since
the low of 163.12 reached on Oct.

The large part of this

1946.

four-month recovery was accom¬

electrical
other

equipment, rubber and

industries either

limited

that market and business obseiwers

hoping for last

were

and last summer.

spring

The extra ordi¬

nary

gains

better

*

lithe present rate of above
'$4 a quarter to bring 1947 full
year earnings down to the 1946
•i figure.
Thus we are apparently
from

*

i presented with the happy prospect
that earnings
for the calendar

trols.

will

exceed

those

of

by

a

margin and possibly
rather wide one.
On the

strenth of dividend declarations in
\

•

*

'

'"

,

_

!'! (3) The election of a sizable
Republican majority to Congress
and the consequent probability of
(a) Some changes in the

the first two months of this year
it

seems

even

dividends
in

1946

will

and

more

certain

that

those

paid

exceed

again possibly by

good margin.




to

not

belie!

a

;

Conclusion
The combination of the amount
of

stock

overhanging the market
restrains imposed upon
aggressive buying by uncertainties
over
the
foreign -picture—with
particular emphasis on Britain—

»

and

the

>

?

and

over

of busi¬

what the level

will be in the latter part

of

•

this year, as well as other
seem
to put an effective

factors,
ceiling

'

the stock market for

number

ness

on

of months ahead.

a

1

♦

>

'

-

^

.

,

t

laws.

,

more favorable
towards business.

(c) A

hoped
urns

or

but

have taken unfavorable
a

new

factor

on

the

un¬

favorable side of considerable im¬

Congress cer¬
tainly suggests another period of
strained relations with Russia.

man's

message

to

chances

of

the

lows

trend

of

the

stock

market to

advance

market
a

pos¬

serious

consideration.

must be raised at to whether

Lewis Ends Threat ef

sizable part of whatever tax reief the individual may receive

March 31 Ceal Strike

now
a

from the Federal
be

swallowed

The Meaning of the
Break

September

ternational

noted

as

attitude

News Service further

follows:
United

"The

Mine

Workers

Whereas the break in the stock

president, in a 20-word notice to
market last September was widely Interest
Department > Secretary
heralded at first as a definite bear
Krug, opened the way for Krug

signal, each month since
then has winessed a growth in the
number of observers who believe

market

to

the

call

UMW

mine

and

operators

representatives into nego¬
on a new contract.
It also

tiations

that the break was
nical

these interpretations will prove to
perhaps surprising was that it
With Merrill Lynch
be corrected will only be deter¬
a meagre
(Special to The Financial Chronicle)
mined definitely at some future
penetration of that area. Only a
ORLANDO, FLA.—Thomas K.
date when the stock market has
very small percentage of the 358,eithe'r again assumed a clear-cut Ware is now connected with Mer¬
300,000 shares that changed hands
rill
Lynch,
Pierce, Fenner &
in that eleven months range were bull trend or has redesignated its
traded between 183 and 185. The major trend as bearish by des¬ Beane, 218 North Orange Avenue.
was

on

of labor.

(5) For #brief period at least
conciliatory attitude on the

which the stock mar¬

cending through the
fall.

lows of last
,

.

Henley-Filson Company

different conclusion
NORTH VERNON, IND.—T h
occurs to
the writer, one whicn
very heavy supply area and this
Henley-Filson Company is en¬
lack of volume tells a story in includes some parts of each inter¬
gaging in a securities business
pretation. It seems possible that
itself.
from offices at 218 Walnut Street,
break "in September came
Not only does the stock market the
ket

reached

the

bottom

of

this

,

.

purely a tech¬ assures peace in the industry un¬
phenomenon and did not til June 30, when the Smith-Contween 183 and 213 in the industrial forecast a decline in business, as naly Act, under which the gov¬
it was initially supposed to do. ernment seized the 3,300 bitu¬
average it is not surprising that
the stock market topped out when Surveys indicate that the number minous coal pits last May, automa¬
it first got back into this area in in the latter school of thought are tically expires."
Which of
the first week in February, What now in the majority.

lies in the relatively low

part of the Russians.

the

stances

government will
John L. Lewis, President of the
up by increasing
United Mine Workers, on March
open. That is the critical economic
state and municipal taxes. It is
19 unconditionally complied with
position of the British. The recent
significant that the very small the U. S.
publicity on this subject has serv¬
Supreme Court order of
number of issues which have been
ed to direct thinking away from
the 17th, directing him to cancel
able to make substantial progress
an
the threat of another coal strike
overly intense concentration
in recent months, and in some
on
March 31.
Failure to comply
upon our domestic problems and
cases to make new highs, have al¬
towards the world economic situa¬
with the court's directive would
most
always
been ones with
tion. It is a condition that cannot
have subjected Mr. Lewis' union
be viewed with any great degree growth * trends strong enough to to a $3,500,000 fine, instead of the
warrant a high capitalization- of
of comfort.
$700,000 imposed by the court. In
earnings even in a period of con¬
reporting Mr. L(ewis' action of
The far reaching implications of siderable
general uncertainty.
yesterday, a dispatch from the In¬
the new direction for American
portance has finally come into the

answer

a more

the stock

only have some of the im¬
substantially beyond the level re¬
portant trends either failed to be¬
come
as
favorable as had been cently witnessed. The question also

volume

ments

can

of last fall of 163.12 in the indus¬

for

Not

the part of large seg¬

on

present level of earnings

be

bear

(4) Evidence of a less aggresive
attitude

the

labor topped out after such

(b) Some tax relief.

1946 by some
\

*

(2J Various relaxations in mar¬
gin and credit requirements.

.

1947

does

legislation as restrictive as situation all seem calculated to
reversed such
has been
the conservative side had restrain general buying to a de¬
sibility should be given
counted upon.
gree sufficient to make it difficult

than

.

quarter; to around $2.25 a quarter

year

this

they represent addi-l
the supply of stock the

abor

in

*

*

"

;

it did and

many on

k

crippling strikes, then
I second half earnings would have
to decline as early as the third

have

would

much better chance of

later than

maintained,
concerning the
trial
average
and 44.69 in the
as had been hoped or will be ne¬
present level of inventories, re¬
rail average holding would not be
gotiated with as little disturbance garding the outlook next fall,
which directly affects
the very good and a decline to a substan¬
as had been expected. At the same
time there has come to light a sizable class of "six months buy¬ tially lower level would be pos¬
sible. Until there is much clearer
good deal, of evidence that the ers," and uncertainty over the
dreign economic and political evidence that the nine months
Congress will be loathe to pass
as

.

.

but

in¬

dustrial; average in relationto its

1

.

break

much

run a

a

of

earnings and the
Relation to the Stock Markets
anticipated in¬
Technical Position
Total
12.59
creases in dividends have already
/ "
When consideration is given to
I'Tf. earnings in\ .the .first six been commented upon.. In addi¬
the heavy volume of stock traded
months i of this year are between tion there have been:
in the eleven month period of
$8 and $9 a share, barring another
(1) The ending of price con- Oct. 2, 1945 to Sept. 3, 1946 be¬
f roundLof
(est.)

place

the

come

,

even

Fourth

market

eventually but it does indi¬
that

cate

has

have

not

with

1946

"\f
1947
First (est)— $4.25
Second

the

limited

far

so

would

uninterrupted.

on

(By Quarters)

Second

to

the

break

the fact that

regained less than a half of its
preceding loss despite a veritable
barrage
of favorable develop¬
ments. Very nearly everything has
1946 and the first half of 1947:
occured in the last five months foreign policy proj ected in Tru¬

.First

Even

witnessed

the

come

The

Factors

aproximate $12.50
very closely. The following table
gives actual and estimated figures

:

brought

news

Unfavorable Trends and New

earnings -will

for

months.

recovery

„

that

anytime in the next

being
difficulty moderate number of new common an accurate forecaster of a busi¬
stock financings. Further
recovery! ness decline. To this observer
undoubtedly would witness large there is a real
danger of follow¬
the favorable direction that
they additions to the supply from this ing a half truth if last Septemger's
seemed to have begun at the turn source.
Various changes in the break
is Crushed aside as having
of the year and that certain new margin regulations have
equipped no forecasting value merely be¬
factors that weigh on the unfavor-j the stock market to handle these!
cause no
signs of a business reable side have recently
appeared.! offerings in much better fashion; cession have as yet appeared.
than was the case last spring and

of 30 in¬

average

few

to

of

because

and that if it had

to lie in the fact that cer¬
tain trends have failed to maintain

plished after Nov. 22, when the
average again receded to 163.55,
The $21.37 advance represents a
dustrial stocks for the calendar
43% retracement of the $49.38 de¬
year 1947 seem certain to exceed
cline from May 29, 1946 high of
those of 1946. Enough data is at
212.50.
So far the average has
from

related

largely

ket regulations as 100% margins,
the break might not have occured ;
when it did. This does not imply

^

9,

1946

vs.

be

can

as

is

background of favorable

outlined

average

only two of the past 25 years.!
Earnings

it

at

did

reasons

seems

high rate of
earnings may provide the explana¬
stock market in the fall of 1946,
tion of the distinctly limited re¬
the 1946 closing level of 177.20 in
sponse to date to those same earn¬
the industrial average is an his¬
ings. 1 .
' '
'
;
torically high one that has been
exceeded in only five of the 49
Lack of Response to Favorable
Factors
years of .previous market history.
.Against this must be set the fact
At the recovery high of 184.49

As

when

area

;

make any appreciable dent in the
high
production
A market that cannot go up even
accompaying high earnings. supply area above it without the!
when favored by every high earn¬
Since the beginning of February aid of developments calculated to
This serves to focus attention on
the eleven issues in the average there has been witnessed a rise in encourage a substantial volume of ings and very good dividends maydo nothing worse than move sidethat are in the heavy industry cat¬ the Dow Jones index to commod¬ buying. Actually the opposite ap¬
pears to have been the case in the wise, but it is far from removed
egory or are closely allied with it ity futures to a new high level
from the danger of declining. The
and which constitute 34% of the and an increase in the BLS whole¬ period since Feb. 8. Definite tech¬
nical evidence has appeared of at longer a correction of the present *
price level of the average. It is in sale price commodity index to an¬
least some withdrawal of buying conditions of very high produc¬
The
general. these very. issues that are other new postwar peak.
from the market. In view of the tion, mounting inventories and an
chiefly responsible for the sharp latest index of farm product prices
uncomfortably
and
dangerously
gain in the earnings of the average reveals that they are back well developments touched on earlier
this is not altogether surprising. high price level is postponed, the J
that began in the second half of above their November peak. These
But it does serve to
raise the greater will become the possibil1946 and as continued into the and other developments affecting
that the business adjustment
the cost of living index unfavor¬ question of whether the stock mar-1
first quarter of 1947.
ket has not got a very effective be a painful one instead of a mild
This group likewise provides ably have come at a time when
one.
the nation appears on the verge of ceiling above it for a least some
some of the outstanding examples
If the correction should turn oUt
a sizable boost in
that important months to come,
of stocks that are historically low
That there is sjich a ceilling for to be serious, the present high
factor iri the cost of living, rents.
in relation to the current rate of
Doubts consequently have arisen the market as a whole seems to be level of earnings not only could
earnings and that are among the
not be sustained but would drop
as to
whether wage increases to the case.
Uncertainly about the
largest apparent contributors to
under
such
circum¬
be granted in the steel, automobile, commodity price level, how long sharply,

spite the substantial decline in the

i

consumed in

subnormal

to be expected.

time

enough to

itself, despite the length
effecting it,
begins to appear distinctly

but it

from outside these industries are!

liijghly touted bullish Tacfors as the
pressure of funds, the favorable
ratio

to that

sub¬

.

cljned !to;thi$ lower level, despite
the

of

chemicals

interference with hope had occur¬
red, and 165 in the. stock average
been

the!

the

7.5%

and particularly in the fourth
quarter but .before, they became
sufficiently apparent the serious

noted

of time

appear

interesting to note that the
market must absorb if it is to
Feb. 1-8, in which the
make- any
substantial1 further!
the
iparket reached the peak of the
other issues of industries that do
progress. There also is the ques-;
recovery to date, coincided very
tion of foreign holdings of
not in themselves initiate impor¬
Amer-j
closely with the maximum of op-!
ican securities adding to the sup¬
tant cyclical' movements we find
timism concerning a fall in the
that approximately 58% of the is¬ cost
ply. There now is evidence that
of living, a halt to the overall
sues in the average are in the catselling from this source is on the
upward movement in prices and a
increase.
"
'
f
egory ! where substantial declines belief in the likelihood of a
period
in earnings from the present high of
It obviously will be extremely
quite peaceful labor relations
levels are unlikely unless impacts and a
consequent long period of difficult for the stock market to

ac¬

year

.

normal in

not

it

not been for such restrictive mar¬

probality of sub¬

stantial additions to the
supply of
stock if it should advance well in¬

might

average

29% of the total price of the aver¬
age. The three oil stocks make up

tuality in the second half of the

had

have but

can

the level of

on

other hand
the four
chemical issues alone account for

Actually, the much higher
an

On

•

with hopes for a much higher level

level of earnings became

limited effect

averages.

in the second half of the year oc¬

curred.

The recovery in the stock mar¬
as measured
by the industrial

durable goods in 1946 and the con¬
sequent sharp increases in the
earnings in earnings of these issues in • that

when

technical

the last three months of 1945 and
the first eight months in 1946 but
it also faces the

ket

future level of earn¬
of greater importance
a

1673

A somewhat

_

.

1674

THE COMMERCIAL & FINANCIAL CHRONICLE

Thursday^March 27, 1947
sell

even

Outlook for Government Bonds
'

(Continued
witness

to

from

the

current position.
But we must

too

to

come

the

which is

tions.

Prices

1945

ume

in¬

result

1945

over

of

price

infla¬

of

out-run

current

increase

of

sav¬

savings
credit

consumer

being used to bridge the gapbut there are limits to
stop-gaps!
The Bureau of Agricultural Eco¬
nomics at Washington is
authority
are

'

■

for

the

statement

-

expenditures
have

come

wartime

90%.

that

of

out

rate

of

consumer

current

increased

-

*

75%-

in¬

fromthe
to

about

I personally doubt that this
increase much beyond

rate

will

90%

during the

current

year,

also doubt that past

!

be
as

drawn
last

savings will
heavily in 1947

as

year.-This leaves

to

gap

on

;be bridged by

.credit, if at all.

it.

Anyone making such

is

either

Real

fool

a

economists

or

ginning to

a

great

consumer

:

concerned because of the

tend

before

you

further

to

/.v/S./•■). //;/

jump

to.

any

conclusions that rates may return
o the old 4, 5 and 6%
of happy
memory, consider the utterly fanastic volume of liquid resources

a

we

have

Don't

hat

in

ever

we

lievable

the

country today.
forget for one instant

have

left, after the

de¬

burdens; in' peacetime, posit-declines of last1
year,
the
taxes take the heart out; enormous total of
$166 billion of
of producers quicker than
any¬ deposits andmoney. And, these
thing else. <
w
$166 billion of "assets" are at the
For example,
in 1946 a man disposition of
corporations ar\d
with an income of $5,000 paid 173
individuals and may be used or
heavy

..

times
as

.

much Federal income tax

as

in-1929,

i*iyesied

basis,

same

times

a

$7,500*

man

much tax and

as

paid 49 times
put the problem on
man

a

volume of deposits will be with

paid 120

us

as long as the
bonds are in the
banks—and that looks like a long
ime. In this connection, debt re¬

$10,000

a

much.

as

over end over

again! *..:/\
Also, this enormously expanded

last year of real
prosperity before the war. On the
our

To

demption/by : the: Treasury

basis, total Treasury receipts were
approximately 13 times as much
asJn 1929, but/the national in¬
come^ oh^ iwhich^; the /taxes
levied has hot gyen doubled. From
another angle, one-third of all in¬
come last year
hhshaten t)^ taxes;
this' means, f although some; will

v

;

great

a

that the large

vol¬
ume of offerings of such securities
planned for the near future may
depress the price level of the gov¬
concern

ernments.

For

example, there has

been

quite a bit of talk that the
Michigan issue sets a pattern and
indicates
'or

trend., Let

a

moment

a

whether

on

Michigan rates will be the
ion

face

price

increases

of; stiffening

sistance

in

the

consumer

on

still holds.

ments, but it is doubtful if it will

say

municipal issues.
When

More than 75% of the securities

re¬

If the

to believe that there will be little
if any, / change. ■; The

.

-

'

'

•

of the smaller cities
the decline in
prices.
#

Without

time,

let

me

/

v

estate

only

18%

had yet felt
;

any

say. that

"

/

real

spending ;

more

the

even

Republicans
cannot
repeal
the
business cycle.
Its economic
up

heavals,
financial
losses,
and
downright savagery must still be
anticipated and guarded against,
So, although business is at a peak
now, we

must

look forward to

a

.-lower level of
activity.

The only
My guess is any
rday now! Certainly, by the fourth
question is when.

y

quarter of the
year, if not before.

•/Tax - Structure Burdensome
,
.

'The effect

burden
come

on

of

the

more

.

our

crushing tax

hat I devoted such

a large
part of
talk to the outlook for busi¬

his

and prices. 1

ness

Conclusions

Briefly, I would summarize
conclusions
factors

to

as

•

the

follows:

as

my

economic

/

he first thing we

the: record,
notice is that, in

he twenty years before 1940, the
48
state governments borrowed

only

$4 billion, whereas

some

business recession/

ent conditions of

at

now

Under pres¬

large, unsatisfied

demands in many consumer lines,

however, prices bringing commodties/ withinrv psychological reach
of those who
he

need

of

means

-

the total of veterans' bonus issues

them may be

keeping

While this is/a sizable
amount, it
not too

/been f quite large, is
drawing to ' an. end. This; means
that -the inventory/boom is about

overfed;.

-

Because of the foregoing factors,
most /competent. observers expect
a /recession* in
business activity
later .in the year.;, / 5 ■
.

The. financial, factors
summarized:

(1)

The

as

may

-

be

follows; /

monetary: authorities
tight control over the
money and capital markets;
*

retain their

.

savings

railroad

issues

which

The

pected to
.

are

pected to become ineligible.
demand for loans at

exr

com

cause

activity
begin to decline. The greatest in
crease that has taken
place in the

such

increase at the

future.

Most

term-loans
same

banks

rate

bank

risks involved on such
der v present price* and

the

loans

un¬

hand,

recession

probably

Treasury to withold
new

securities to

investors, and

to

of

non

rely pri

on

any

counts under its supervision to re
duce maturing obligations held

by

the

banks.

In

this

event,

ban

deposit reduction through redemp
tiorn >'£f / goverriment

inventory

;d

a

surplus that may
be at its disposal and on funds
accruing to the various trust ac

the

realize

the

marily

wil

in

the other

fering any

volume of loans in recent months
has been in three to five
year
term-loans. It is doubtful that the
of

On

in business, with
commodity prices
dropping and the volume of ban
loans leveling off, would

-

mercial banks will level off when
either prices or business

volume

inflationary

Reserve authorities might be ex
reverse their
pqlicies.

banks are going to have to re¬
place their holdings of a number
of

super-atomic

v.zi

i

■

uk

Sa

-

-V',

proportions

and

—

consequences!

the short term, rate, may be ex¬
pected to stiffen somewhat more,
but

there

will

sup¬

be

spectacular
;as far as

no

developments, especially
government

Nonetheless, the increased

•

securities

cerned.'

are: con¬

;

ply of state and municipal
(3) Bo! far as can be foreseen
obliga-;
tionS will have certain specific ef
now, / the
wartimegovernment
fects on the bond market. The im¬
security rate pattern will be main¬
portant, /and

practical,

question

for you is how this new
financing!
will affect the prices of

(1)

hh

eligible ^government > bonds,
(2)
bank eligible
governments, and
(3) other high-grade obligations
(1) So far as ineligible govern¬
ment

the

obligations
state

new

concerned

are

and

municipal is¬
very little ef¬
This will be primarily
because insurance companies and
ought to have

sues

fect, if

banks, the princi¬
pal buyers of ineligible Treasury
obligations, will not enter the state
and

the

tained through the year,

f /

1

; (4);

I do not anticipate any in¬
creased
Federal
borrowing, al¬
though there

may be some secur¬
ities offered ultimate investors to

redeem commercial bank holdings
of governments.

/ ■://..

(5) I do not expect the offerings
of municipals to adversely affect
the government bond market.

any.

mutual savings

municipal bond market unti
return

higher

on

than

(2) So far

such

at
as

ernment

obligations is

the

present

time

bank eligible gov¬

obligations

are

concerned
a further increase in the return
on
state and municipal bonds

NY

Clearing House;:
Saturdays
Beginning April 5

^

To Close

In

connection

amendment

with

recent

the

Con¬
struction Law of New York, which
permits the banks to close Satur¬
to

the

General

securities

could

have

banks

■

t; r>tr? ,£32.12*2

on

prices of those

not

are

likely to buy large
state and
municipa
obligations because of their lack

of

of

marketability. ;'/,}•
(3)

state
will

The

/

increased

and

AAA

corporate

bonds

So

far

seem

we

the

as

is

bond

concerned,

whose

are

market

it

warranted in

on

re

in

will be

at
a
on

a

slow rate.

moderate

AAA

Clearing

consider
of, ■ which

necessary, > due notice,
will be given by the

Manager.",!.

An

item

bearing

Saturday

on

closings in the New York Reserve
District appeared in our issue of
March 6, page 1294, and the^ yearround

(2) There
bonds

closing of the Boston Re¬
Bank

serve

columns the

The
for

was

same

.

York

in

noted

providing

5-day bank week
was

6

these

week, page 1295.

signing of- the bill
a

(3) And, finally, changes in prices March
0!t

the
may

as

Committee

draw

firming in the

corporate

House

would

ing the following conclusions: (i;
The yield on state and
municipa'
obligations will continue to in
crease

regulations

„

turn should continue to firm.

general

"Resolved,, that the Nevf? York
Clearing House close on Saturdays
beginning April 5, 1947,• subject to
such

t

supply ;|o
obligations

municipal
probably have an effect

return

authorities

effect

some

amounts

vj. •soVbyiiupsi sox
:-)

*

(2)' Interest vrates, particularly

days, the following resolution was
adopted by the members at a
spiral had run its race and defla¬ issues. But such effect
is bound meeting of the New York Clearing
tion hacrset in, the
Treasury and to be very moderate as commercia House Association on March' 13: £
course^ as soon as the

increased savings create a real in
vestment demand. And this wil
be at the very time the

economy will be- conditions. More
corporations may
apparent
in
the I .be expected to
endeavor to meet




velopments.

a

}/'^4//'Vft/

we; look

important relatively, as
t is just about what the Federal
government is, expected to redeem

„

r'

de-

(1) Our commodity price strucure is quite vulnerable. (Declin¬
be, taken as conclusive proof of
what return will rule on state and ing prices ordinarily would presage

s

jein excess: of $5 billion.

government ./securities
There is every reason

■

reported a downward
price trend although

be

■

develop¬

•

-

will

business de¬
It is for this reason

,

really ironic.

are

take

ermined largely by

.

redeemed by" the
Treasury -las
year were held b,y the commercia
supply of
present
formidable
banking system and the Federa
barriers
to liquid funds is
very large and is
Reserve Banks../ In l view-ubf
consumption are raised1 further; more
thq
than;/ample tok meet any
"the end is foredoomed. ':■//"
concern the
monetary authorities
foreseeable demands.^
>
have expressed at the "monetizaWhile there'is still a
Other than refundings, the Fed¬
great deal
tion" of the public
debt, it seems
wo£ unfilled demand in this coun- eral government may not be in
reasonable to expect an effort to
% try, it is not as great as many the market this year with new is¬
pay off some of the commercia
people think. To take but one ex- sues. Deficit
spending has come bank
Holdings through selling
ample, there were 25,142,527 pas- to an end. The
expansion of bank securities to
others. The extent to
senger
cars
registered
in
the deposits, which has been
going on which this is
United States in 1946, which is for the last
done, however, wil
13 years, has been
re4 depend on the business outlook.
only 9.33%
under- the
number versed.
Deposit
expansion
has
To put it
registered in 1941! This is a fac- been succeeded
specifically, the policy
by deposit con¬
tual answer to the hot-air artists
the Treasury will
traction.
adopt in its re
True, private deposits
who have been
loudly proclaiming have increased, but their increase funding operations will depend on
that it
will
take years
business activity, and on the move
to
get was more than counteracted
by
ment
caught up with the demand for the decrease of
of commodity prices
and
government de¬
automobiles.
'
bank loans. If the
./ ■/;/
spiral between
posits.
1
!
/
..
V 1 "
In the real-estate
prices and wages should grow
field, sales of
In sharp contrast to demand de4
/ residential
property have dropped posits, savings deposits will con¬ worse, the Treasury, might be
forced to offer securities to ulti
] sharply in volume from a year tinue to expand as
long as em¬ mate investors for
cash in order
ago,
and for the first time in
ployment and business continue
to redeem bank
eight years
there ; is
holdings of gov
a
trend at high levels, although, as
you ermnent
toward lower prices in
obligations and thereby
many cit¬ well know, the rate of growth has
effect a
ies.
To be
corresponding decrease in
specific, in a recent declined sharply from the artifi
the total .of bank
; survey, 47% of the
deposits. ,• Of
larger cities daily high wartime level. These
t.

will

authorities

the

the rule.

or

the business out-

on

ook, as the actions the monetary

excep-

At the outset, let
that* weighing the various
factors, it is my considered opinion
hat the Michigan pattern cannot
me

ook but also

.

i'.I.X do;hot have^time^tiiis lafter-i

rates

Recent

closing, let me say that, as, a
nation, we are committed to money
management and debt manage¬

reflect

us

.

t

In

.

wage and

.

either way.

nounced

prob¬ ment. The two are
interrelated
able effect the coming flood of
problems; they cannot be divorced.
municipals, particularly the state Any analysis of the outlook
for
issues, will have on the market
government securities has to be
or government securities may be
Dased not only on the fiscal out-

Clearly
noon to pursue this problem
any future
redemption will be only a
salary ■ work¬ further,- but
clearly,, taxes are too fraction of the total redeemed in
ers.
Between the fourth quarter'
high and our Federal budget must 1946. There
of 1945 and the same
will, however, be more during the first six months of the
period last be
pruned. It is not too much to selective
year, wholesale prices of all com¬
redemption, namely, the year.
say that our solution of this budg-;
Of course, to these state issues
modities rose 33% while the cost
shifting of bonds from the com¬
et dilemma will;
determine, the mercial banks to the - more con¬ we must add probable municipal
; of living rose 16.8%, the sharpest
very, future of our countryv
ventional. long-term
increases in our history." What
investors and local district issues which arej
Some $54 billion of marketable is¬ anybody's guess. But, even
makes these increases so serious
though
Government Securities
sues/ come; due. in 1947 and/ while there/is a/large accumulation/ of
•; is r that
the: total of, wages, anc;
•Now let us deal more specific
such financing hanging over the
only a small percentage, on the
/salaries received during the pe¬
cally with the outlook for gov¬ basis of our
riod increased only 7%! Such a
present budgetary out¬ market, when., it. is compared to
ernment securities./We will start
r
price structure is based on sane
look, can be redeemed, undoubted¬ the Federal debt of $260, billion it
with .the most basic market fac¬
ly present plans are to shift some looks quite inconsequential/Truly,
.and it is only a question of time tor
which is, of course,
interest, of them .from the
.until it drops to a level more in
/commerdia the Federal debt is, the biggest;
rates.
The
wartime
pattern of banks to other holders.
i/i,line with realities.-,;'/£////.;//
thing in the world today! It has
of

yields of government obligaare
not likely to be pro¬

ions

•

'

reach

and

business
be¬
activity! at, a satisfactory Teyel.) 4
approved is $867 million and the
comes of paramount
importance; ;
(2) Real > estate,'^prices, ? partictotal of those proposed is $2,781
; Last year, from the beginning
ularly for old houses, seem to
of the debt retirement program in million. If all these proposals se¬
lave passed the .peak,
•
v
cure'
legislative
! Vlarch ; to the end/ of the
approval,
this
year,
(3) Agricultural fprices, despite
he marketable debt was reduced gives a total of $3^648 million to
he
which might: be added another
current:: strength caused by
5y $23 billions. An additional $4
billions, it is estimated, will be $500 million for roads and Other leavy purchases for export shipretired during the first k half of construction not covered* by cash merit,' have probably passed their
1947. The; amount to be reduced on hand, giving a maximum total pea
of $4,148 millions of state issues
; n, the
1947-1948! fiscal, year will
inventory
accumulation,
;o
beabsorbed by /the market. which has
depend on / budgetary .

quantitative

This is especially

Many prices have risen; out of

I

a

Issues

two about the

deal of

But

as

.1947.

course,

Municipal
or

worthwhile. There has been

will

stiffen interest rates/

dispute it, that the ; standard of
pointed out later, living of our people could b.e in¬
one may
expect that savings de¬ creased 50,%
if,by; a. modern
posits will continue to grow in
miracle, .taxes couldhe abolished.
true, because,

;

Of

New

/

A word

market

claim

much

very

longer-term basis,

stiffen.

the

,

'

shift from term-loans to the bond

charlatan.

a

are

a

on a

that term-loan requirements

and general interest rates are be¬

resumption of the dynamic
growth of our country. * In war¬
time, patriotism will carry unbe¬

purchasing

ings, withdrawal of past
and

„

al market
now

the government spends

or

vent

Reduction in current

power.

/ncome

actually

goods produced
12.9% in 1946.

Our price structure is
very vul¬
nerable all along the line. Prices

liave

economi¬

were

-

above

Vulnerable Price Structure

.

if taxes

as

cally painless—that it makes little

possibil¬
ity that the heavy burden of taxes
required to support our $37 bil¬
lion spending budget
may
pre¬

14.1%

rose

was

level, whereas the vol¬

•declined
.

national

of

increase

the

their capital requirements through
the sale of securities in the capi-

to
the
And, all difference
economy
untimely end! whether the individual spends his

before, a statistic
frequently trotted out.

so

1946

Some of the New

Deal and do-good economists have

end.

an

total

solely
the

All

mentioned

come

The

our

talked

an

often, it is

Take

of

forget:

not

>

booms

months ahead.

1648)

page

strength

to

deposits, if the
deflationary t^end should become
serious.-" U;;V'"
•;' ,:n V "

A LOWER LEVEL OF BUSINESS ACTIVITY IN OFFING
"

bonds

to increase

anks

hr New

likewise reported in

issue,

page

1308.

* /

the
! /

N

Volume

163' Number 4580

THE COMMERCIAL & FINANCIAL CHRONICLE

crease

to the

of $95,000 being ascribable
improvement in the demand

for office space in the downtown

he

could

expect if

same money

he spent the

at irregular intervals.,;

This is

particularly true of a pro¬
area which resulted in
gram of information such as we
greater occupancy of the 20 Broad have undertaken.
strong
and
seller can exercise informed judg¬ sion are complex and they are at healthy national
building:
ticker income
economy requires Street
The increased expenditures dur- ■
the heart of the financial life of that tax rates be as
ment.
'/
reasonable as from other than members, $170,ing 1946 cover the expansion of
"On the other hand, less well- the American economy. The
key possible.
"
967; and listing fees, $1,773,990.
the original campaign to include
known non-registered or unlisted to the most effective regulation in
The listing fee income compares a
"It is important that, in the de¬
selected list of national maga¬
securities, with respect to which this field is to carry out the poli¬ velopment of a tax
with a total of $1,718,661 for
1945; zines and the cost of a new sound
program, debt
such data are generally not avail¬ cies of the law with a minimum of reduction be included as a
collections from
this
source
in motion
part of
picture for the Exchange. 4 \
able to the public, between Jan¬ interference
with
the
normal fiscal planning which shall strive both
years
were
substantially
The Exchange's advertisements
uary,
1946, and February, 1947, operations of the facilities of se¬ to lessen the burden upon in¬ above the average for the last five
appeared during the year in some
had
collateral value with the curities distribution and trading.' comes. Excessive taxation for
During the year, the Board 430 newspapers in every State of
any years.
"The Commission has initiated
banks for, the purpose of purchas¬
purpose, however, laudable, re¬ of Governors revised the listing the country and in 21 general, >
discussions looking to the possible tards the attainment of those ob¬ fee
ing hon-registered securities.
schedule, requiring that all business and farm magazines. The v
"The regulations in effect be¬ advisability of asking Congress to
jectives which our economy seeks, newly listed stock issues be listed total of printed messages exceed¬
make changes in the
tween January,
1946, and Feb¬
securities lower
prices, enlarged employ¬ on a continuing fee basis and re¬ ed 675,000,000.
ruary, 1947, tended, as many per¬ laws which such changes, in the ment, widened trade movements ducing the fee for the listing of
During the year, the program
sons foresaw, to drive prospective
in
light of experience, may appear and s|able returns on capital used shares
excess
of
2,000,000. received a volume of commenda- •
desirable.
To that end the ^securi¬ in
investors
and
speculators from
production.
Experience has These changes should tend to sta¬ tion and support unprecedented,
the better regulated field into less ties exchanges and other
sections proved that intelligent tax reduc¬ bilize the Exchange's income by so far as we know, in recent ad¬
of
the
securities: business" have tions have
regulated
or
unregulated ones.
actually resulted in spreading payments over a period vertising history.
It was singled

(Continued from

1653)

page

-

which the prospective buyer and

recognition of its functions: 'The- the inflow of tax
regulated by the Commis¬ maintenance
of r

fields

revenue..

The

New York

a

,

,

.

been invited
to submit sugges¬ increased
government
revenue, of years, although the results will
There; is here recognition and there is no reason to doubt not be fully evident until a sub¬
speculation in commodities tions.
of the fact that a law, however that business would respond at stantial
number
of
and real estate. The flow toward
companies
the less regulated field during the admirable in its objectives, may this time to the stimulus of a have been listed on this basis.

One consequence was a more ex¬

out

cited

ment by hundreds of newspapers
and by numerous national maga¬

-

collateral

loan values of

require refinement and improve¬ reasoned, sound policy in this re¬
registered stocks were eliminated ment as experience is gained in spect."
was noticeable
in the predomi¬ practical administration and as
Result of Operations
nance of non-refunding primary conditions affecting
a regulated
According to Mr. Schram, the
offerings of stocks which are un¬ business may change/'
Mr. Schram concluded his re¬ Exchange maintained its strong
listed.
financial position during the year.
"The
credit
regulations may port by saying:
1
"The position of the securities The accompanying statements of
have made it earier for an un¬
seasoned company to sell to the industry in our nation's economy income and expense show an ex¬
public shares which could not be gives Exchange
members and cess of income, after taxes and
listed
on
a
national exchange. member firms an excellent van¬ after
depreciation
charges,
of
The regulations also had the ef¬ tage point from which to view the $606,460 for 1946, compared with
efforts being exerted to return the $856,026 for 1945. Initiation fees
fect of making it more attractive
of $248,000 in each of the two
for a company to keep its securi¬ world to the ways of peace.
ties unlisted than to list the se¬
"Every day it becomes clearer years are treated as contributions
curities on a national securities that the United States is destined to the capital investment of the
exchange,
thereby, possibly in not only to act as a balancing in¬ Exchange and are not included in
time

or

.

instances,

some

not

disclosing

fluence among

conflicting political the above totals.

iri|ormation to the stock¬ interests, but also to contribute

vital

which was one of the heavily to fiscal and trade re¬
■principal objectives of Congress in habilitation in some of the more
severely affected areas.
As a
passing the Securities Acts.
"The action of the Federal Re¬ people, we have already assumed
serve Board in amending its rules, great
responsibilities
in
these
Few can doubt that selfias of Feb. 1, 1947, to permit the fields.
lending of 25% of the market interest as well as humanitarian
value of listed securities for the dictates require that we shall add
From a broader per¬
purpose of carrying such securi¬ to them.
ties was no more than a half-way spective than was possible while
tneasure,
The owners of listed the war was being fought and in
.securities are still under a handi¬ the immediate period of readjustcap that is not imposed upon the ment, it may now be determined
owners of .non-registered• securi¬ tl\at private capital, rather than
resources,
should
ties; and the federal Reserve governmental
Board's policy in this respect is assume the task of reviving world
holders,

The

.

still

encouraging

the transfer of business.

capital from listed securities.
J V
"Attention hOs frequently been

..

"In order that the United States
may

exercise leadership in the; re¬

drawn ;

to the" discriminatory as¬ conversion of international trade
'the /situation,'; wherein &hdeommereb, tothei^es bfheW^
include the it is 'essential that bUV domestic
choicest
investments
available economy be kept sound. This will
Anywhere, are severely restricted require wise direction of our tax
in their use for collateral purposes policies and an aggressive control
pects

of

listed securities, which

while

securities

non-registered

:*ri&y be freely used for

Cposes.:»v;'/vf

such purvV,///;

is made no
unfair by the cir¬

"The discrimination

less onerous or
cumstance

that

Federal

the

Re¬

authority does not
extend beyond listed securities.
Bet us examine, briefly, the credit
position and see whether such a
severe
limitation asfis now im¬
posed upon listed ^securities is
iwarranted.
^/J-//^
"As of Jan. 31, 1947, the mem¬
serve yBoard's

bers of the New York Stock Ex-

credit to
their customers on listed securi¬
ties, other than governments,; in
change were extending,

i

amount
of .approximately
164,000,000.
This
represented
.^4/fOO ofl% of the market value
the,

'of 'securities

:thange,' .' not

listed

this

on

Ex-

including

on

this Exchange, not including gov¬
ernments,' was the lowest since
-

^

v.///; -

;: • 1

Concerning relations with the
JSSEC,' McV Schram said: "The Ex¬

change5 continues to enjoy
-mhnious

har-

with

"relationship

a

the

Federal - regulatory
agency,
the Securities and Ex¬ duction as an immediate goal
change Commission. / The Com- continue to oppose the proponents
-miSsion " shows, increasingly, an of tax reduction $3 a primary re¬
awareness of its obligation, under
quirement of these grave times.
.
"The national budget must, of
the law, not only to enforce the
law in the public interest, but also course, be first brought into-bal¬
Both the
to encourage honest business.
In ance and kept there.
Its annual report, recently made balancing of the budget and the
principal

;•

.

•

public,

*we

-

find - this

refreshing reductiori of /debt./depend.rupo?




initiation
ments

and

profit and

after adjust¬
recoveries
of prior

fees

and

years' taxes, was $865,885, bring¬
ing the total of these accounts as
of Dec. 31, 1946, to $26,633,408,
compared with $25,767,523 at the
end of the previous year.
Assets and Liabilities

The net assets of the Exchange

Expenses

Total expenses increased during

the year at a greater rate than in¬

end of

-J-

-—

Buildings, * improvements
equipment (net)-—

honds
chise
Net

deposited Sunder
and

000, or approximately 20%.

t

business

of

$9,551,424

also

The

Exchange

also

produced"

n

the expense

much

as

totals for 1946, inas¬

various

71,253
9,442,445

ary

fran¬

Gratuity Fund

"

The New York

Stopk Exchange
March:; 19 that; the
short interest as /.of the »clpse of
on

on

the

March

14,' 1947,

settlement date, as compiled
information obtained by the
Stock

York

Exchange

from
Netor
from its

members and member firms,

w^s

compared with
1,046,797 shares on Feb. 14, 1947,
both totals excluding short posi¬
shares,

1,015,331

in the

carried

tions

odd-lot ac¬

counts of all odd-lot dealers. ; As

March

the

of

1947 settlement

14,

date, the total short interest iri all
odd-lot dealers' accounts was 70,shares, compared with 52,898
14, 1947. The re¬

111

shares on Feb.

port added:
Of

the

1,346

individual

stock

issues listed on the Exchange
March 14,
sues

in

6n

1947, there were 50 is¬
a short interest of

which

shares existed, qr
in the short
position of 2,000 or more shares

5,000 or more
in

which

a

change

occurred during the

month.

f

table compiled by
us shows the amount of short in¬
terest during the past year:
The following

'

1946—
Feb.
Mar.

1,181,222
1,015,772

15
15-

994,375
1,022,3Q9

Apr.. 15_May

15

'

June 15

—

867,891

15

—

849,698

July

732,649

Aug. 15

627,9$4 j

Sept 13
Oct.

15

and quotation begun in July, 1945, it was real¬ Nov. 15Each of these ized that its effectiveness would Dec. 13--—.
items showed small increases: over depend in large measure on its
continuity over a long period of
the preceding yea*, Jib hi
time.
Much of the strength of
Other principal items of ^income
consisted of: i^htsJ from tenants advertising is cumulative and the Feb 14
consistent advertiser achieves an
•
"
using space not required for Ex¬
end result far in excess of what J Mar. 14
$419,425;
$357,997.

Jr.

$421,265,; the in¬

<

Decreased to March 14

scales—were not in effect'for business

the entire year.

The land and buildings are,

during

NYSE Short Interest

changes-^particu- reported

larly the general/increases in sal¬

course,

change purposes,

has

in
re¬

The

7,568,286

$26,633,408

service,
service,

men

and

and
The

principal increase was in during the year, in cooperation
with March of Time, Inc., a mo¬
salaries and wages which totaled,
tion picture portraying the vital
including bonuses, $3,808,101 in
role of our market in our com1946, against $3,189,988 in 1945.
The
The total number of active em¬ petetive enterprise system.
ployees of all companies was 1,296 picture, entitled "Money at Work,"
will be widely distributed during
as of Dec. 31, 1946, an increase of
the current year.
A heavy de¬
approximately 12% over the total
mand for it already has been indi¬
of 1,160 as of the end of the pre¬
cated.
It is expected that, in 1947,
ceding year, the increase being
a small theatre will be constructed
accounted for principally by the
return to our active employ of adjacent to the visitors' gallery, in
the
20
Broad
Street
building,
employees on leave of absence
where our film will also be ex¬
while in military service.
Two
hibited.
During 1946, the Ex¬
general
salary
increases were
change welcomed 145,900 visitors
made during the year, bringing
from 48 States and 29 foreign
the average salaryrates at the end
countries.
f
f.'
of the year approximately 25%
higher than at the beginning of

and

deferred charges—

current assets

interest

been most gratifying, frequently
Expenses, before deprecia¬
tion charges, were $6,982,576 in expressed in a request for quanti¬
ties of reprints of our advertise¬
1946 compared with $6,090,458 in
Most significant of > all,
1945.
After adjustment of these ments.
totals for reduced amounts of Fed¬ perhaps, is the consistently high
our
advertisements have
eral and State taxes payable, the rating
in
readership
surveys
increase of other expenses be¬ earned
tween the two years was $1,178,- among the general public.

Actually, the full, annual in¬
cluding real estate at cost less de¬
preciation, consisted of the fol¬ crease in expenses during the past
year is not completely reflected in
lowing:
Land

Many government

expressed

both publicly
letters to the Exchange.
action

conw-

come.

the year, after
deduction of all liabilities and in¬ the year.
of the

as

w£ll.

as

editorial

approval,

their service period.
Advertising and Information
have ap¬ Charges to members assessed in
Expansion of the Exchange's ad¬
relation to the use of the facilities
peared thus far of the develop¬
of the Exchange constituted the vertising program resulted in a
ment of any full and compre¬
total outlay for this purpose of
hensive
national policy dealing largest portion of the Exchange's
income.
The principal such items $798,108 in 1946, an increase of
with taxes and debt.
In fact, con¬
approximately $333,000 over the
were the charge of 1 % of net com¬
tinued conflict of opinion, lacking
total of $464,731 for 1945, during
missions, $1,589,699; Stock Clear¬
evidence of any matured'program,
which year the advertising pro¬
ing Corporation charges, $1,567,keeps our people in confusing un¬
894; telephone spaces and other gram was carried on for only six
certainty. • Advocates of debt re¬
floor
charges,
$447,972;
ticker months. When this program was

economy as a whole.'
-' "No clear indications

:'cphb&cted b!y member firms to

]2931^^,

after crediting the net

zines

favorable

officials
.

of
The program adopted in 1941 for
debt free.
The net cur¬ the reduction of the Gratuity Fund
expenditures. With rent assets are represented princi¬
surplus to a maximum of $500,000
application anewNo these allimportant measures, I quote, in pally by holdings of short-term by the use of the principal of the
U.
S.
Government
securities, fund to offset the contributions
part, from the section of my re¬
which totaled $8,252,020 par value payable by members was com¬
port a year ago:
as of Dec. 31,1946. Approximately pleted during the year.
When the
"'The establishment of the
$3,300,000 of the government se¬ constitution was amended in
wisest conceivable policy for the
curities are held by the New York March, 1941, to provide for this
management of our national debt
Stock Exchange Building Com¬ distribution the net worth of the
is a task for the best intelligence
In the 5%pany and represent, in effect, a fund was $1,927,824.
and statesmanship in this country.
funding of part of its depreciation year period during which there
It is no exaggeration to say that
charges for the purposes of future were no net contributions by
the welfare of every man, woman
ture replacements and improve¬ members on the death of other
and child is involved.
Debt pol¬
ments.
members, a total of $1,780,000 was
icy cannot be divorced from tax
Income
distributed, including net earn¬
policy and other fiscal policies.
Total income in 1946 was $8,- ings on the fund and appreciation
Their inter-relationship is such as
in the values of securities aggre¬
an increase of $636,593
to require a coordinated program. 146,443,
As of Dec. 31,
over
the total of $7,509,850 in gating $365,000.
The problem is a grave one and
1946, the net worth of the fund,
should
be
faced
courageously 1945. Dues of members were at
the same rate in both years, the valuing securities at market, was
without
permitting any single
Beginning with the last
small increase from this source $525,951.
group,
whether government or
being due to the return of the quarter of the year, members
private, to impose its views or
were
again billed for gratuity
members previously in military
wishes .regardless of the impli¬
service whose dues were waived contributions.

of government

govern^entsi. The ratio-of bank loans cations and consequences to the

tfotai value of securities listed

net increase in the capital

investment accounts for the year,

for

757>215
927,002 893,178

—
-

-

1,
1,015,331

1676

THE COMMERCIAL & FINANCIAL CHRONICLE

Swedish Laboi and
(Continued

from

1646)

page

Industry Disagree

practical-minded

many

forces.

people,

Thursday, March 27,
1947

Socialism's Progress

on

Even the cooperative or-

handle the depression. The strong
*'—J—
C,-JS-U
ganizations, whether in produc¬ demand for Swedish goods abroad,
tion or distribution, do not want the
large credits to foreign coun¬
political control.
tries and the

sion, payable equally to all
cit-

-

particularly those trained in the

(By AXEL IVEROTH)

labor

dustries have also been mentioned

being in

as

need

commercial

bate

study.

activities

The

under

companies.

and cooperative

ganizations.
represents

de¬

To

them

socialism

sort of good-natured

a

not

The import and

interfere

with

their

and

as

hand, makes changes in

tem

of

public ownership has ad¬

vanced

much further than in the

United States.

From time imme-

<

morial the government has owned

certain

forest

falls.

The

built

and

areas

first

water¬

railroads

by the government and the

main lines have

always been

un¬

der government management.

recent years more and

private lines have been acquired
by the government and added to
the

state-operated system.

Much

of the water power has been

veloped

by

electric

the

state

and

stations

power

de¬
such

have

al¬

been publicly managed. The

ways

postal

service

has

been

public

a

enterprise,

of course, and many
the telephone and tele¬
graph systems were merged under

years ago

government

ownership

ministration.
are

All

and

ad¬
facilities

radio

also

government-owned, while
broadcasting is still non-partisan.
Aviation

has

likewise

been

de¬

veloped with government aid and
the

domestic

air

service

is

policy

still

partly
government-owned.
For
taxation purposes the import and

to

to the

as

a

way

divert interest

industry's

ever, is that all these investiga¬
tions take much valuable time and

from more acute
economic problems which have to
be solved.

own

for the; solution of the

measures

general problems of efficiency and
expansion.
Such a preparedness
is

absolutely

for

necessary

dustry and government.
far

more

productive,"

"This is

the

as

ex¬

recently said, "than simply point¬
ing out what's wrong and then
hell

with

so

their

answers."

Instead of wishing to exclude
the government from its delibera-'

tions, however, Swedish industry
goes so far as to regard

operation

such

a

favorable climate

means

which is far

co¬

more

imminent than

First, the the investigation of possible na¬
government naturally should give tionalizations Private
industry is
manufacture,
but
not
distribu¬ private
enterprise
all
possible especially worried by the pro¬
tion, of tobacco is a public mo¬ help in securing information,, such posed estate tax.
For instance,
nopoly.
Liquor control is also in as reliable statistics and business people who have invested their
government hands in such a way forecasts, and in providing train¬ savings in small
private enter¬
that private profits are limited ing facilities for
young people, etc. prises would find it extremely
and not varied in
In this connection
proportion to
many of the hard to keep their funds liquid
sales.
But in no instance has the other government
activities, such enough to be able to pay such a
state confiscated private
as transportation and
communica¬ tax and may therefore be com¬
property
without
adequate
compensation tions, can be regarded asformjs of pelled to borrow the money.
and most of the
public \ utilities public - service,, and no one in
enumerated above have been built
or developed from the
start by the
public authorities.
Recently, the

government

Sweden

as

necessary.

advocates that, such

now

public utilities should be returned
private management/ That pri¬

to

steel

vate

industry needs close

Lapland, partly, to provide
local/employment and partly, to
reduce the country's
dependence
on foreign outlets
for iron ore.;

tion

with

constructed

-a

mill in

'95%

of Industry Still
Privately Owned
now

the largest single

ehaployer of labor

coopera¬

government

in

the

shaping

of
foreign
commercial
policies goes without saying, but
such aid. should be
given with
only the general welfare in mind.
The state

But the fact remains that while

the state is

the

should, furthermore, be

prepared to take action in possi¬
ble economic crises in order to
offset
temporary complications

in Sweden, it is such as
unemployment or lack of
in the public utilities
purchasing power among certain
service field, while no less
groups of people due to

chiefly
and

than

so

95%

of

industry,

unforesee¬

the

manufacturing

whether

for

export

or

able circumstances.
As a step in
this direction a mixed investment

better

understanding

work to be done.

already
adopted have been desirable, but
they have also been expensive and
the question is whether the
gov¬
ernment
that

has considered

the

risk

production, which creates the

economic

basis

for

all

reforms,

may: not be

able to keep up the
pace. The government, to be
sure,
has intimated that as
long as pri¬
vate industries remain efficient in
production, there will be no move
to

nationalize them.

But what is

-

ture

and

purchase of furni¬

other

-

^ housekeeping f:
riewlyweds, free*,

equipment> by
medical

advice

of; .the duced : for under-privileged fe

improvements

in

ilies

im propoftioii '/fd/'^the:'/immi*
ber/ of. tnirmr children; had been
provided.// Thorough-going" agri¬

productiv¬

are

cultural reforms;/ tending to
make
farms large enough to
give full

now

because the basis
efficient

of

economic

employment to their owners; as
well, as to make farm work
more
attractive to ; young
people, have
proposed, as welL as a re¬
vision; of the tax system to help
been

the recipients ' of small incomes.
Under* this system more taxes-will
be collected at the

system is

vision

management representing the go¬
ing concern as a whole. But man¬
agement and labor are agreed that

J

proposes'stricter

Laboip
super¬

over

trusts, cartels, and
monopolies." (Many of these have
already' been broken up by the

the

in¬
labor and capital with

States.

In the" financial field the
program

balancing of the controversial
terests • of

they

source, as

in the .United

are

free and

a

consumers

cooperative

ment. J A

so-called

Council has been

move¬

Investment

instituted

as

a

means
for (Cooperation
between
circumstances is indus¬ the
government and private' In¬
trial democracy to mean that the
dustries in developing new in¬
workers are to share responsibil¬
dustries. Investigation committees
ity in management.
have been appointed to ascertain

under

no

the facts and formulate
proposals

(By TAGE LINDBOM)
(Continued. from

for the

1646)

page

equitable * distribution"^ of
the
Furthermore, after the war the wealth'
produced, so * as to bring
government announced its inteh->
fcbout1 ah improved > standing ; Of
tion to speed up social welfare
measures

public support for
have >: been « pro-

for the

Swedish work¬

:

;

-The

more

housing

Easy Consumer Credit
Terms

have always been able to see
that it - is increases in- production

Danger of Overdoing Reform

reform.

sup¬

regarding
and free care
in v..
councils," the maternity
hospitals, ''/including
is to give the cash allowances for
-layettes, free
employees more knowledge about dental care and ftee school
lunch¬
the problems of the employers and es for all
children, and rents in
their activities- and to give them
publicly subsidized houses re¬

essential, and
question ;of making

socialization,

natural

a

of which

industrial expansion, ity which

indirect

an

re¬

childreii

Already^public cre<rit- bn
/easy.
terms

are

committee' under the chairman¬ it -is a
this
ship of the Minister of Finance understanding; m o.r e ;. thorough.
recently presented a new tax pro¬ Management is anxious that em¬
gram which has caused a great ployees should be content with
deal of anxiety. As publicly stated their work. After that there can
by the Minister of Finance,- the always be differences of opinion,
proposed estate and property taxes and the deeper understanding be-,
actually aim at further leveling tween management and labor ac¬
off the distribution of
property tually involves the fact that wages
and at reducing the influence that is
something that has to be dis¬
goes with large
fortunes.
This cussed from different viewpoints,

•

raise

free

a

to

the so-called, "shop

purpose

a

ecutive Vice-President of the Na¬

can

employers

as

better

organized-v^employers

and

for

tional Association of Manufactur¬
ers,
Walter
B.
Weisenburger,

we

Swedish

their

as

well

regard to industrial democ¬

the

pay!

and

age

system of
compul¬
health insurance for all
in¬
habitants, were j .adopted by
the
1946 Riksdag.; In the
budget for
1947-48 bonuses for
children

strong anti-in¬

a

certain age, or
to the
disabled

a

once

sory

men

,

letting the bureaucrats; fumble

In
racy

help to create

balanced cooperation between in¬

over

at

porters, and

government, as soon as the 1947
Riksdag opened, invited all the
leading opposition parties- to diskcuss the danger of inflation,

While the government by a con¬
structive taxation policy could

well

a

restraints.

as

further than the efficiency motive
The main trouble, how¬

eco¬

be

prepare

.

all

flation policy, and as a result the

most

requires.

to

able

the sugar, favorably ;;
disposed, r Last ^ fall,
industry and banking and insur¬ agreements were i made between
ance, are subjected to committee the
organized; Workers and the
studies, which thereby go much

pursued, as
well, as the necessity of collabo¬
rating within industry itself in

In

of the

more

facts and ideas

such

high efficiency, such

Industry
certainly
recognizes
the necessity of
contributing its
own

in

work

certain ?! so-called "weak!* indus¬
tries been begun, but also indus¬
trial and commercial activities of

Industry Desiring to Collaborate

nomic

overflow

plan and enforce

it

order

.were

to

power

social¬

as to
efficiently.
But that is exactly what seems to
be the case in Sweden just now.
Not only have investigations into

in Sweden the sys¬

izens

Industry as well as the opposition
parties urged, the government to

make

producers and this makes it
possible for Swedish industrialists

background to these investi¬ to work even with
Social-Demo¬
gations, which will not lead to any cratic
governments. That this will
real changes until the
Riksdag has be possible in the
future, too, the
been heard, it is important to bear
industrialists sincerely hope. ;
in
mind that

a

enterprise

bread

butter.

the

As

—

istic direction its chief
aim, it can¬
not continue to support
private

They find it easy to
understand the point of views of

tionalization.

J

heavy investments gardless of
the other at home have caused purchasing deprived of

If the government, on

attitude

in practical matters such

distribution of fuel, particularly
gasoline, have likewise been con¬
sidered as possible fields for na¬

J

'

or¬

Sunday morning mood which does

the banks and the insur¬

are

ance

of

unions

living for everybody, ;and (3)
higher; efficiency in production

and; more
life;
This

democracy in economic

has two as¬
pects; it was partly a/transition
program for the'change from a
to

war

program

peacetime

reorganization

nationalization of

or

complete

such Activities

as
insurance, the boot and shod
industry, the retail distribution of

drugs, the stone cutting industry,
the import and distribution
of /both liquid and solid
fuels;
and

such
as
is a s ai l n e
and
coal;
neither of which Sweden has: an^
-

appreciate

dom

Measures have

give

the

e

st i

been

<i;:supplyT

prepared to

municipalities

/

' greater

economy (our
the first World

powers to condemn land' for; slum

War with the disastrous
depressi6n of 1921 'stood out as a
warn¬

clearance and the construction of
new
housing, the purpose being to

ing)

forestall

experience

andj

program,

changes
our

after

partly, a long-range
aiming at fundamental

in

the

organization' of
economic system.
*

improper

speculation

profiteermg
shortage.

and

real f estate

other

* from;

forms

of

:the': hobsing

%
\
*
test of such
efficiency?
■y By; direct fi voluntary negotia¬
only real testing system is the
House Production Successful
tions between the
ago, permitting the government free
organized -em¬
1929 and 1937 the
market, and certainly not a
production ca¬ and private interests to
Several of the social welfare ployers and the trade
compare political
unions, the
bureaucracy which grad¬
pacity of Swedish industry was ideas and
proposals- have
exchange information ually restricts the
beginnings of a new system of
already been
increased by 50%. In other
play of the free
words, about long-range projects.
adopted by the Swedish Riksdag industrial dehiocracy were insti¬
forces which should balance each
during those eight years it in¬
and are either
already in force tuted last summer; They provide
other.
creased half as much as it

domestic consumption, is private¬
ly owned and operated.
Between

council

had

grown

since

ever

,

of the industrial

the

beginning
Nearly 40%

era.

of the population

now

earn

their

living from industry, while only
30%

do

it

from

formed

was

Fears

a

few

years

tradition that dates back

to the early 19th
is by now a
a

the

state of

new

earnings

of

expansion.
this

It is

cuse

for

further

government in¬
where it is not
really
the

idea that such actions

privately- desirable

managed apparatus of production
which have made
possible in re¬
cent

years the impressive Swed¬
social welfare reforms
which
are backed
by all political parties.
In no wise does Swedish private

ish

selves;
place
as

or;

the
under

much

of

enterprise
the

planning
eration
Since
whsed

object

or

the

not

general

political

to

steer

sup

%Soi

national

viewpoint.
parties

industry,

represented

of them.

in

are

the economic
interests of

various groups,
is

cooperating

to taking into consid¬

the

on

to

government

On the

its

own

in all

by

as a

whole,

any

one

contrary, it tries
course

campg

and

gain

Even -n the

democratic Party there




are

must

are

always

in

them¬

not

be. to

government
economic

must

doctrinaire

beneficial

goal

control

activity

as

possible. The consequent central¬
ization and growth of

bureaucracy

,

with

An

Anomalous

Consequently,

we

Situation

have in Swe¬

help, if necessary, c den an odd situation.
reorganization of certain government

century, Sweden tervention
highly industrialized needed.
State interference
country and, in this respect, it is
not be based on

in

will soon take effect. Thanks
to government and
municipal in¬
or

to government
in the

would be apt to cause

in

decrease

a

efficiency

and such a result
would not benefit either the
gov¬

ernment
ernment

the public.
The gov¬
policy -should therefore

or

be to protect and
promote decen¬

We have a
whose main objective

to

seems

be

but

which

nite

plan

the

extent

solve

planned economy,

a

seems

for

to

such

that

practical

it

lack
a

a

defi¬

policy.

has

To

tried

problems

in

to

eco¬

nomics, it has already made mis¬
takes.
Among the 27 points in the
postwar labor program there
at least

one

assumption which has

already shown itself
wrong,

the

•

to have been

namely, that shortly after

war

period

was

of

there

would

depression.

-'

come

Maybe

it

will eventually
come,
and it is
good to know what to do
then, but
the Labor Government has
failed
to take

into

aspects of

a

consideration all the
business cycle policy.

Consequently, there

tervention, whether in manage¬
ment or
financing or both, not to
mention

the

non-profit coopera¬
tive enterprises, the
production of
houses has
war

the

come

level,

close to the pre¬

and

this, in spite of
shortages of many

current

materials.
This has gone
eliminate the drawback of

far

to

season¬

al

unemployment in the building
industry, and many forms of priv¬
ate
profiteering, whether in real
estate

or

in

construction,

been either reduced
If
a
new

have

or

eliminated.
unemployment crisis

should occur, a detailed
plan for
works, -graded according
to necessity, has been
worked out
with
potential
/appropriations,
whether governmental or

public

munici¬

pal, amounting to

over

Swedish vcrowns,

which

a

billion
would

was no prep¬

correspond, in proportion to pop¬
wherever and when¬ aration
for
what
actually hap¬ ulation, to about $6 billion in
ever beneficial to
the
the community
pened, a boom with full employ* United States.
The system of
as
a
whole and, above
pub¬
all, the ment and even a shortage of labor; lic
employment agencies, practical
government should
provide pri¬ It is just as important to .be
pre¬ educationand
vate enterprise the best
vocational - guid¬
opportu¬ pared for a boom as for a
depres¬ ance ,is being
nities to function.
It should
continuously ex¬
give sion, for if you cannot handle the
panded. For increased
such freedom to
social se¬
all economical
boom, it will be more difficult to
curity, both a higher old Pge

tralization

.

,

.

-

_

The

Over-Intervention

But, while private industry has
no objection to such
contacts or

agriculture, for¬ weak
industries, it fears that such
estry and fishing. Having an in¬
changes may be taken as an ex¬
dustrial
•

to be the

,

-

pui-

for more consultation between the?

employers
and
the
workers
through Company Councils in re¬
gard to such subjects

ing of

as

the train¬

new

workers, lay-offs, im-^
provements in; methods of'pro¬

duction, exchange of views in re¬
gard to planning and also public
improvements—a subject that is
especially appropriate since labor
union
tant

leaders

municipal

often

hold

offices.

7

;

impor¬
I ^

'

No Industrial Interference
;

There

any

will "not,
however, be
attempt to interefere in the

management
of
industries. M
Neither is there a
question of any,
wholesale socialization of*

private

property.

The

industries

under

>

investigation are either suspected,
of
being monopolistic and thus
able

to

else

of

ture

that

keep prices too high, or>
being inefficiently man¬
aged, or they are of such a ha-

,

the costs

to

consumers

might, be -reduced if they were
managed by public authority. The
last consideration
applies particu¬
larly to the import and distribu¬
tion ;.bf
years the

fuels/

" For, the1/
past 30
import-and manufacture

Number 4580

{Volume 163

been

tobacco

a

.THE COMMERCIAL

governr' Swedish labor movement has from

jnent monopoly, but its object has

produce public

to

been

revenue

rather than low retail prices.

the public liquor

the case of

tne

In

mo¬

consumption

of

well

as

as

abolition of the private-profit in¬
centive in sales.
In general, it
may

ate

be said that as long as priv¬
enterprise can solve social

problems

meet public

and

requirements,

fare

there

present intention in

magazines,
home

Sweden

with the rights of
ate ownership.

little

a

and

to

pri-

that

ice, telegraph and telephones, the

ly built iron works in
sare
goverhment-owned

they

had,

a

recent¬

and

therefore,: been taken
j a way from private
owners. With¬
out proper compensation no priv¬
not,

ate property has been expropri¬
is not likely

ated in Sweden and

in

be

vto

:all

the

Practically

future.

industries,

those

particularly

•working for export, are privately
<owned
Athe

and

companies.

the trade unions

fin Sweden have placed more and
imore

emphasis
as

7.

found

organized
labor

9.

in

half
the

the

of

total

number

fire

^closed shop.

is

there

and

whom

about

members

about

two-thirds

of

organized

trade

of

tion

The

number

now

popula¬

The

6,700,000.

a

future,

therefore, of both the trade unions
any. the Social-Democratic party

bright, but

seems

public

long

as

as

there

democratic elections the

free

are

as

whole has

a

decide

chance
party. Since

about the
both

for

Never

the

has

been

mere-class

and

men

wo¬

Swedish

content

be

It

general

the

labor

to

a

has

welfare

in mind and has ever been ready
for cooperation

with other

lar ' movements

and

cal parties.

other

popu¬

politi¬

In its early stages the
establish

Liberals to

with

worked

Social-Democrats

a

parli¬

no

with the Farmers Union and thus

able

was

.a

-2y, strikes can still occur.
The
.^agreement between employers and
workers not to resort to either
^lockouts
treme

or

strikes, except in ex¬

situations,

wholly

is

vol¬

chamber

other

farmers

of

parties,

munists, were
The

a

the

as

well

majority in
Riksdag, it

the

except

25.

ents'

equalized;

17.

Equal

26.

the

distinctions.

class

of

and

standards

living

abolition

for

support

technical-

economic research.

dence.

agricultural
in industry

More

place of resi¬

or

be made

public.

all, regardless of par¬

income

to

replaced

Cartel agreements to

24.

areas.

basis

those of

as

18.

27.

National

planning of

Quality of consumer
goods
subject to public inspection.
Workers to have greater influence

invest¬

ments.

men.

19.

Security against loss of earn-

the labor moveiment has three aspects, the econ¬
Sweden,

.'

1 '

,

Government

supervision over

industrial

over

More

agement.

Com¬

level

of

interest

rates,

the

quotes from the testimony

By

employees

municipal

men,

safety,

man¬

better

•

,

"

■ •

•

»

hygiene, higher wages.

.

•

.

_

.

;

■ -

I

.

eral

mittee says:

quantity

to

as

rates

"it is

whether
are

more

society than

a

a

fair question

balance

on

of

a

lower

burden

to

relief."

the

Federal

about
ment

debt,

now

most

of bank

difficult, in

over

the

credit will

be
the opinion of

This is viewed as

the Committee.

dangerous situation "at a time
when inflationary pressures exists
a

averaging

2%, would not, in the judg¬
of the Committee, offer much

relief to the taxpayer.

and

authorities

Reserve

and

of

to increase

threaten

living,"

difficult

the

for

authorities

the cost

This policy "makes itFederal Reserve

exert

to

control

over

the

quantity of bank deposits and
hence over inflation and its effect
upon

the cost of living."

The

cure

committee

for this situation, the
says,

rates should have

of movement to

is that "interest
enough freedom

permit credit ccmr-

policy to play an appropriate
part in curbing inflation or resist¬
ing deflation," also, rates should

trol

"have some freedom of movement

to perform their eco¬
of maintaining a
between
the supply of

if they
nomic

are

function

balance

savings and

the , demand for in¬

vestment funds at a high and in¬

creasing level of national income.
Above
over

all, Government influence
rates
should
not
but serve to strengthen

interest

weaken

the

play of individual

initiative*

Treasury's Gain Is Savers' Loss

others, each dollar contributed by
these beneficiaries not only build¬

party today would

to undo any of
union activities it
helped bring about orderly
conditions on the Swedish labor
market and for this has gained
even

• >

„

through its political action has ob¬
tained a number of social wel¬
dare

.

If the pres¬
ent rate of 7/s % on Trearsury cer¬
The Mutual Life Insurance Co. of
tificates were dropped 40% and
Mew
York,
before the
Senate the
long-term Government bond
Banking and Currency Committee rate of
2Vz% were cut 20%, the
in December, 1945, to the effect
annual saving
to the Treasury
that the
gross
rate of interest
would, it is estimated, amount to
earned by a large group of insur¬
only 250-300 million dollars by
ance companies fell from 5.31 to
1950.
3.57% during the period 1930-1944,
with a csonsequent increase of
Federal Reserve Abandonment
about one-sixth in the cost of life
of Control Over Bank Credit
insurance protection.
4 /
So
long
as
Federal Reserve
The drop from 3 *,2 and 4% to
banks are obligated to purchase
1 or \Vz% in the interest paid to
Treasury bills and certificates of
savings bank depositors, which
indebtedness
from commercial
has occured during the past fif¬
banks at pegged rates of % and %
teen or twenty years, and the di¬
of 1%, and the latter can
sell
minished returns earned on money
these bills and certificates without
placed in trusts are attributed di¬
danger of loss in order to obtain
rectly to the decline in interest
reserves needed for credit expan¬
rates.
So is the increased cost of
sion, effective control by the Fed¬
pension plans set up for the bene¬
fit of employees of business estab¬
lishments and for teachers, clergy¬

therefore, be called a popu¬
democratic movement-: which

fare reforms no

•

Further cuts in interest rates on

Pointing out that the cost of life
heavily dependent on

insurance is

movement

labor

■

,

established institutions, the Com¬

policy should not be decided
upon without full consideration of
tnem needs, and through them the
needs of American savers."

may,

lar

•

(Continued from page 1657)

try

it

has

In

labor-sav¬

ties

rate

represented.^^

Swedish

them.

untary.

small

of

which

reforms

welfare

the

series

a

preferred to remain, as long as the
war lasted, a member of the na¬
tional union cabinet in which all

still

fighting organization, and legal-

institute

1940 it obtained

in

each

social institution with

to

the industrial workers. Though

as

indispensable function in the
^maintenance of order on the labor
it is

More

be broken up
with government
support or transferred to publie ownership.
Monopolies

or

Sees Ini. Rate Prevented fiom Performing Functions

a

organization.

had

always

Since Swedish labor

Nevertheless,

23.

ing household equipment.
educational opportuni¬

of Lewis W. Douglas, President of

movement

•an

market.

emergencies.

public auspices; bet¬

ter methods introduced.

16. Equal

of women calculated on

same

study

More
;and more, the labor unions have
won acceptance by the public as a
a

1.

universal

things of the past.

as

better

ized under

"

the

the

has only a theoretical
.meaning.
Strike-breaking
and
-maintenance of membership prob¬

"whole

those

and

be

wages

1918 suffrage in Sweden has been

Hast point

are

workers

of

22. Domestic work to be reorgan¬

equitably distributed.
bonuses, day nurseries,

for

self-sufficient

units.

improve

kindergartens.
Domestic
for
needy
families
in

help

of

into

farms

Too-small

merged

also

are

unions.

workers

1,200,000 out of

aided

lems

and

be

Agriculture to be made more
efficient.

more

Cash

should be

urban

and

,

social

now

rural

incomes

must

country. Its due-paying mem¬
; number
about
600,000, of

about 100% organized the

;is

be

Poverty must be abolished in
The

21.

The cost of raising children to

15.

in¬

those

to

measures

more

to

ership.
Crowded areas
cleared and rebuilt.

;

public health.

owners.

both

cast in

|v7the tirade unions have gained in¬
creased
influence
in
various amentary form of government and
to obtain universal suffrage, re¬
.fields, such as lay-offs and disrmissals, even though, in principle, gardless of property qualifications,
in the 1930s it formed an alliance
^management still has the right to
and

masses

especially

occupa¬

efficient and

more

Building sites and apart¬
ment houses to
be gradually
transferred to municipal own¬

\

Better

14.

work

real

protection

and

to be

industry

building

stable.

bers

the

ihire

0.

one-

.

^agreements by which many emiployment * problems
have been
.•solved in a peaceful and mutually
.-satisfactory manner. In this way

of the

small land

every

roughly

and

accidents

ers.

disabled.

increased,

from other

almost

or

the

wages

4

effective

The
made

Shorter working hours, espe¬
cially for heavy manual labor-

farm hands, forest workers, and

organized labor, the
since 1936 being

million

special

for

real

comes

re¬

^equally nation - wide employers
*association,
the .Federation
of
Labor has made several voluntary

The

total

a

and

20.

13.

agencies
and training centers should be

Social-Demo¬

came

insurance;
pensions; un¬

diseases; better hygienic
conditions at working places.

employment

operated

age

tional

when employment is low.

Official

privately
be said

the

to

More

against

Public works should be stepped
up

men.

duty to the
whole. With the

a

the

of

general election,

their

sponsibility,
/community

their social

on

can

the

than

sources

to

V

;

In recent years,

-

and so are

managed

commercial banks and insur¬

ance

55%

the

it

35% of its votes

over

op¬

most

management

equipped

12.

modernized

sidies.

party represents organized
labor, though on this score there
is no compulsion either.
About

and

veloped with public funds under
;have

read

subscribe

average

jparf, been originally built or de¬

{government

labor

cratic

Lapland,
the

for

mil¬

the

be

agriculture, forestry and
fisheries developed with the aid
of public loans or outright sub¬

i

papers,

ties, such as railroads, some elec¬
tric power plants, the postal serv¬

erated,

to

journals,

over

Politically,

jxadio, some forests, and

half

a

well

are

is free

owned

number of public utili¬

a

and

should

old

subsistence levels.

and

a

foreign, trade. .International
economic cooperation.

health

and

employment benefits raised to

Houses

they also publish news of a
character.
While every

one

Property

While

6.

population of only

six

ment

higher

large scale produc¬
tion of consumer goods to com¬
bat unemployment.

general

No Expropriation of Private
V:

600,000 in

Mechanically,

newspapers

in

press

ing power; general unemploy¬

long-range

a

program.

to promote

organize

labor

over

a

over

lions.

the

now

country with

workers

^

of

by

1677

Public subsidies should be used

voluntary
circles.. The daily

study

Sweden is

building
5.

members

circulation

wel¬
is no

interfere

the

among

helped

and

improved

own

published books1 and

newspapers,

nopoly, which is also profitable,
the objective has been the con¬
trol

beginning maintained its

LAICNANIF'&
CHRONICLE

ing

up

smaller

a

reserve

than

formerly, but also paying less in
annuities than
it did formerly.
the

In

same

manner," the Com¬

"people who save to
buy annuities for their old age
find themselves unable to obtain
the incomes they might have had

mittee

in

past."

The greater part of

increase

in cost of annuities,

the

the

says,

between 1933 and 1946,

50 to 75%

is attributed to the reduction in
recognition.
In public
interest rates.
opinion, it has won a strong moral
Another adverse effect of the
position, as being responsible and
invhich now controls the governdependable. Through its work for decline in rates cited in the study
*ment, and the educational.
0| adult education it has done much is the impairment of charitable,
i
these, the last named is not the to -r promote
a
higher ; cultural religious, scientific research and
ileast important. From the begineducation activities. The endow¬
standard for the whole nation
•ining it has been clearly under¬
ment income of Carnegie Corp. of
stood in Sweden that in order to
New York, devoted to education,
""V- "The 27 Points"
:make the trade unions succeed,
research and social welfare, suf¬
The 27 points in the labor post¬
'inot only their leaders but their
fered a drop of,40% between 1932
::members had to have as good an war program of Sweden were as
and
1945, and its president is
follows:
^education. as possible.
To reprequoted as stating that the trustees
1. Price increases must be: pre¬ "are convinced of their obligation
":}■ isent .the movement in politics and
:
ultimately take responsibilty for
vented; in times of abundance to discontinue many continuing or
of goods prices should
iboth: the municipal and central
drop recurring grants as well as to limit
but the price level must never
government
offices,
an
under¬
the number and extent of new
be allowed to go so low as to
standing of . both economic and
ones." This experience is described
cause economic depressions.
political principles was required.
as typical
of the severe curtail¬
'.Better' public schools and im¬ 2. Industry's efforts to maintain ment of funds available for ex¬
provements in the system of adult
and increase employment must penditure by other foundations
education> have, therefore,
been
be coordinated under govern¬
The view is expressed that life
support.' Special

omic,

.

trade

or

union

activities general

qproper, the political, as expressed
in the Social-Democratic party,

-

.

*

.

*

•

f

Folk
been organized

given full

High: Schools have
for the training of future

labor

ment

the
;
v

Some of them now sit in

king's cabinet.

It is the'con-

stant aim of the labor movement

an

in

the

membership with
intellectual

ever-increasing

improvement
j

.

to combine numerical member shio

growth

As

a

means

to

this




end

the

.

insurance

companies,

savings

institutions "have

:

;•!

banks and other,

supplied and state-aided ex
port credits extended. Foreign
outlets must be provided for
small-scale enterprises, and the

*

leaders.

supervision.

Export markets must be fully

3.

not

operations the low interest rates
of today; they will do so only as
the bonds, preferred stocks anc>

imports of necessary raw materials assured through the gov-

mortgages in their portfolios ma¬
ture or are called and refunded."

emment'iiforejgn trade policy.

In view of the

The housing'

Standard must be

on

yet

fully

savings and

reflected

in their

diminished returns
lowered income o;:

ie^rMt^SgSlSSSi
>Z77!,&=rttpi i—S I',.,* a*
be greatly reduced.
ous,

educational institutions to

.

1678

*

>

t

v>*. i

)

T ,</■«.*

:

T'

\

Wt'f

[THE COMMERCIAL* & FINANCIAL CHRONICLE

k-_

Thursday, March 27, 1947
■tei

The
with

the

union shop rules is

»t

Certain aspects of union organiration and practices are of strata-

Union membership practices
(including the closed shop);
(2) Responsibility of unions as
y

organizations;

; ,/••

V

■

(3) The scope of collective bar¬

gaining;
(4) Strikes;

(8) "Make-work" rules, and
(9) Union (or union-employer)
competition in
modity markets.
Let

on

com¬

examine briefly these

us

as¬

pects of unions and their
methods,
in the order in which I have listed
them.
-

Union Membership Practices

Union:

membership

practices

which affect the economic
system
in
vital ways are those which
(a) unduly restrict admission of
new

members,- (b)

restrain
from

the

unreasonably

transfer

of

workers

labor market to
another,
(c) coerce unwilling workers into
unions, and (d) cause discharge or

•;

one

suspension

of

union

without adequate

Difficulties

v

;

members

cause.

of

workers

in

ob-

taining union 'membership, ob¬
taining transfers from one union

:

to

another,

or

retaining

union

membership t become matters of
great importance as unionisation
becomes
more
general
and - as
union membership—under closed-

shop

g;

a

ment in

y

uriion-shop rules — be¬
prerequisite of employ-

or

comes

numerous labor markets.

Under- these conditions
to obtain union

inability
membership means

inability to get
■<!«+.»»,
:

•

olized
in

a

job in

labor- market.

a

monop-

Difficulties

.

transferring from

union's

one

.jurisdiction to that of another become hurdles or barriers to trans¬

;

fer of

employment from

market to another.

>

exclusion from
the

loss

of

a

contract.

in the field

covered

by

of

.union

////

■

Citation of
dicate

or

union results in

job

employment
/

a

labor

one

Suspension

few facts will in¬

a

something

the

of

dangers

to the welfare of workers
growing
out of these conditions. The
United
States Department of
Labor has

reported

800,000

"

terms

that

45%

of some 13,employed under
written' collective bar¬

workers
of

gaining contracts during 1945
in

closed

difficulties
:

unions

are

strictive

were

union

or

shops.1
getting into

of

The
some

illustrated by their

initiation

fees

re¬

rules

and

excluding certain classes

of work¬
The American Civil
Liberties

ers.

,;■/

Union, for example, listed initia¬
tion fees
ranging from $200 to
$1,000 for
a

a

number of unions

published in 1943. The
organization stated that 29

unions

either

excluded

Negroes

from

membership by one means
another—or they placed them
"Jim

Crow"

union.2
'

in

report

same

or

in

auxiliaries of the
possible difficulties

The

of transfer of union
workers from
labor market to another
were

one

illustrated by
several

a

years

reported instance

of

ago,

a

welder

who

had to pay $650 in fees
and
dues in one year to
various* weld

er's

unions—all affiliated- with
AFL—in order to
qualify for
employment in different
places.3

the

The hazards of
suspension or dis¬
a union under
closed

charge from
1 Labor

Information Bulletin,, issue

March-April,
2

phlet
the

in

published

report

also

Trade

,

i"

Corwin

D.

An

a

pam¬

excerpts

1943;

from

Labor

Monopolies-Or
Scoville, 1946, pp.

f

Frnnnm:^

"Public
a

EconoZ

1942

(Part 2)

p

438




Policy

>>»

-

i

been

portant
become

dangers to the economic
Wage rates are likely to
more

inflexible

labor

in

markets

monopolized by closedshop unions. Disparities in wages

strike, -jurisdictional
strikes, boycott of non-union ma¬

legal

action to place
unions
acceptable

labor

terials and

J:?r
Lab«>:

,,

-

consideration.13

of

legal

responsibilities

propriate

have

multiple-

before—unions

to

represent

Ne¬

the

of

scope

The

toward

seems

action

concerted

among

bargaining

Strikes and

used

their

strike.

ployer unit and even the industry¬
wide unit in collective
bargaining.

The

man-days

the

of

'.

-

1

methods

organizations to
objectives is the

average

of

•

Law

among the

labor

by

achieve

multiple-em¬

"

-

Outstanding

,

different

units

workers.14

collective
;

the

law

collective

tendency for sometime has

been

bargaining.

Anti¬
appropriate for
dealing with prohibited types of

the

bargaining unit.

a

pro¬

among
different collective
bargaining units to effect multi¬

outstanding ques¬
tions in labor policy today is that
of determining, by law, the ap¬
surprising, therefore, that

their

such

employer units as appropriate col¬
lective bargaining units
by labor
relations boards and prohibit
the
use of
concerted action or
pres¬

trust

One

out

status of bargaining
would
hibit the certification of

ple-employer

to fraternal
orders, sewing circles,
and
other similar organizations.
It is not

^areful

Appropriate legal

policies/for carrying

sure

products, and coercive

of
responsibility for picketing.9 <■
They have been viewed
The Scope of Collective
quite generally at law as private
Bargaining
brotherhoods or clubs comparable

and. non-union¬ fallen far short of what might be
ized types of work are
likely to expected in consideration of their
increase.
Mobility of labor is numbers, membership, economic
likely to be reduced. Unemploy¬ power, and political influence.
ment is likely to be
encouraged by
A few facts will illustrate some
excessive wage demands, inflexi¬
of
the forms
of irresponsibility
bility of wage rates, and reduced
available/under the law, to unions.
mobility of labor. The last-men¬ The
Wagner Act and Railway La¬
tioned
conditions
are
likely to bor Act
permit—as
mentioned

aggravate rather than reduce gen¬
eral instability of business.
The
closed-shop
union — especially

are

"'-III

their acts.

or

shop, coupled with restric¬
tive union rules, creates other im¬
system.

law

sit-down

fairly recently there has

little

or
by-laws are pro¬
Other provisions of the
intended to prevent the

hibited.

as

I

terprise appears to merit

standards

union

work

number
lost due

of
to

strikes, unfortunately, seems to be
following a rising secular trend,

There are several factors which
have encouraged this trend. Con¬
centration
in
industry has en¬

with

the

annual

average at 12.5
the period from 1927
to 1934 and at 16.1 millions
from
1935 to 1945.15
millions

couraged it. The desire of union
workers to reduce wage and work¬

groes in collective

in

bargaining even ing-condition differentials in an!
though excluding them from mem¬ industry has been another facto?. |
No extended analysis is
needed
when bargaining on an
industry¬ bership.
National
Labor
Relations to portray the economic effects
Closed-shop contracts are The
of
wide basis—is
likely to exert such permitted, in
Board has been
general, without im¬
They cause substantial
permitted, by the I strikes.
leavy pressure upon employers as
posing upon the unions concerned Wagner Act, to designate multiple- losses in production of goods and
;o encourage
j
industry concentra¬ any special responsibilities
per¬ employer bargaining units already services; interfere with coordina¬
tion. Finally, the
closed-shop rule taining to
admissibility of appli¬ in existence when the law became tion of economic operations in our
increases the power of a union
j
cants;
initiation fees
or
dues, effective, and has favored con- j highly integrated economy; and in
;o/force recalcitrant enterprises democratic
methods of union man¬ tinuation of such bargaining-units. cases of extended and
into a combination in restraint of
widespread
agement, expulsion of members, Various war agencies of the Fed¬ strikes in an essential
trade or to assist
industry
enterprisers in coercion of the
eral
Government' during
employer, or work
World requiring substantial continuity of
organizing such a combination.
stoppages cutting off from the War II encouraged region-wide or operation there is, aS
^all of us
There seems to be real
need, public an essential good or serv¬ industry-wide bargaining to sim¬ know,
great
danger to public
herefore, " for
legal
standards ice.? The Wagner Act policy of the plify their administrative tasks.10
health, safety, and welfare.
pertaining to union membership Federal Government, as applied No doubt other factors could be
In considering the
which will prevent excessive ini- under NLRB
relationship
mentioned in a more comprehen¬
rulings, has allowed
of the law to strikes, it should be
iation fees and exclusion from unions to be
designated and con¬ sive survey,/;;;- /
^ recalled that the law is not
.

union

membership

racial

on

or

tinued-

exclusive

as

in-

bargaining:

There are many reasons for be¬ tended to pure;
every social STI or
lieving that a continuation of the solve/ all* economic Z problems dt
workers from
undue
though calling strikes in violst&«& tend toward
multiple-employer controversies in an economy which
and excessive fees in
transferring of law, employing coercionto and
industry - wide
bargaining emphasizes freedom.
from one union local to
Again, it
another; compel an employer to violate the would be
contrary to the general should be kept in mind that some
protect against* arbitrary loss of law, and
engaging in work stop¬ economic welfare.;
Encouragement strikes constitute: substantial dan¬
membership; ; and
prohibit — or pages in violation of their own is
given to wage-standardization11 gers to the public
welfare; that
subject to special regulation—the agreements.8 >
Finally, it will be over; wide areas in spite of the others
cause/moderate losses to
closed-shop, or union-shop.
recalled
that
there
was ; much; great
differences in living condi¬ the national
economy;
and that
Relatively little has been done doubt, last November,
about the tions and costs.
Wage rates are others are relatively insignificant.
as yet to protect
workers against existence of any legal
procedure less likely to be
adjusted on* the
high initiation fees or arbitrary for
.The right to qidtworfcaixid the
terminating an irresponsible,; basis of conditions:
exclusion from unions. The^ Fed¬
affecting the right to strike should not
nation-wide work stoppage in the
be.con¬
particular
employer who / pays fused as is the case
eral Government
coal industry at the
merely assumes
frequently in
beginning, of them, Encouragement is given to
the existence of unions.
Under cold weather and in
discussions ^of the right to strikt
apparent vio¬ industry concentration
because of The
terms of both the Wagner Act and lation of the
right to quit work is a per¬
union's agreement the
heavy bargaining "pressure sonal
the Railway Labor Act unions
with the Government.
right to sever the employ¬
may
which can be
be certified as
brought to bear upon ment
bargaining repre¬
relationship. The right to
Such
irresponsibility: of unions* employers by a well-disciplined, strike is the
sentatives for all the workers even
right of a group of
encourages disregard for the right industry-wide /
though they exclude Negroes from
union.Develop¬ workers to withdraw
of workers;;
temporarily,
irresponsible, tyran¬ ment of employer-employee com¬
membership.5 On the other hand
by goncerted action; their labor
nical, and fraudulent management bines and conspiracies in restraint
some states are
beginning to adopt of union
supply from an employer of group
affairs;; distrust of col¬ of competition is given encour¬
legal standards on these matters.
of employers. Confusion of these
lective
bargaining
agreements; agement. — Greater resistance to two
Colorado and Texas require that
types of right results in need¬
disregard for the rights of an em-; adoption of
initiation fees be
technological innova¬ less confusion
reasonable, and ployer; and
concerning the ar¬
disrespect for orderly tions is made possible. Standards
Florida sets a maximum of
$15. processes of
gument that denial of the right
settling controversies. of productivity of labor and enterDuring 1945 and 1946 the States of
to strike would impose
There is real need, in
upon the
my judg¬ prisership are likely to suffer be¬
New Jersey, New York and Mas¬
workers
involuntary1 servitude,
ment, for developing legal stand¬ cause of reduction of the
sachusetts made it illegal for un¬
pressure
thereby violating the anti-slavery
ards for unions which will
of
cause
competition.
ions to deny
Differences
in
membership or dis¬ them to be
provision of the Constitution;
responsible to their wage levels in different fields
criminate against members on
of
the
A policy of
membership, to employers, and to employment are
requiring, generally,
basis of race,
likely to be en¬
color, creed, or na¬ the general
public.
hanced rather than reduced. Work compulsory arbitration or adjudi¬
tional origin.6
> V
//v':-'-/
;1
cation of labor controversies; does
A considerable number of
under / industry-wide
states* stoppages
The legal status of the closed
during the 1940\ have enacted bargaining are likely to paralyze not appear to be necessary oir -de¬
shop varies widely under different
sirable in an economy of -largely
laws which impose
standards of industry operations, regardless of
legal jurisdictions. A laissez-faire
responsibility upon unions and the nature of the industry.;; The private enterprise.; Such a policy
policy is followed in many of the their
wouid introduce.) government ac¬
officers' of agents.
States danger of strikes undertaken for
states. Another policy—the
Wag¬ which have
tion needlessly into situations not
adopted quite com* disruptive or revolutionary pur¬
ner Act
policy—permits the closed
prehensive laws regulating unions poses is enhanced to a critical de¬ required by the public interest;
shop agreement for any union are
Colorado?" Florida, Kansas, gree in the case of essential; in*' increase the tendency toward gov¬
which qualifies as a
legal bar 7 Louisiana,
ernment
bureaucracy, waste, and
Massachusetts, Minne¬ dustries. Because of the extreme
gaining agent, assuming, of course,
hazards to the general/:
sota, and Texa%
welfare regimentation; and enhance, very
that the employer can be induced
flowing from industry-wide bar¬ likely, inflexibilities in the eco¬
The Kansas&bor Relations
to enter into such an
Act,
agreement.
nomic system.
Furthermore,; for¬
Several of our industrial states for example, includes quite com¬ gaining, concessions granted pow¬
prehensive provisions intended to erful unions to induce settlement eign experience with widespread
follow this policy. Another
use of
policy assure a
of strikes are
compulsory arbitration does
likely to be exces¬
is to permit the closed
greater degree of re¬
shop only
sive—thereby encouraging unjus- not hold out much promise-*-in a
when approved
by a special refer¬ sponsibility on tile part of unions;
tifiable demands and
society which is not totalitarian
their officers, and their
disregard of
endum of workers in the
members.
bargain¬ The
the public interest
•—tljat the^^zmethod cahi'bel?
law requires a union's busi¬
on later occa¬
ing unit. Colorado, for
example, ness
sions.12' /
upon to reduce substantially the
/-•■"' //";'' •;/. ,/••> -v-/,-.'v
agent to be licensed by the
requires an affirmative vote of
state.
The union is required to
Limitation of the scope of the number of strikes and lockouts.
threedlourths, or more, of the
Australia, for instance;/; experi¬
file its constitution and
workers, as a:
by-laws, collective bargaining unit by law,
prerequisite to its
enced an average annual loss from
use.
Another policy is to. prohibit and any changes in them; also, therefore,/appears to be a major ,ij »/
|
4 •"'4'"t.
detailed
annual
the closed shop (and the
reports, giving essential in a well-considered na¬ such stoppages of 61 work-days
yellow*
facts about the union's/
tional
dog contract) as a condition; of
labor-policy Z. A suggestion per 100 employees from 1929 to
officials,
its elections of
officers, its charges that; the bargaining unit
employment. The Railway Labor
lim¬ 1939
even though she employed
to members, and its'
Act follows this
financial outp¬ ited to the employees as a
policy. An in¬
whple—
compulsory arbitration on-an ex¬
creasing number of the states— lays and receipts for the
or on the
basis of worker-chosen
past year.
tensive scale. In the United States,
including Maryland, Nevada^ Ar*
Provisions
are v
included,5 ' also skills, crafts, or plants—of an en
kansas,
Florida,
for the same
Arizona,
Ne4
period, the; loss in
which are
intended to prevent
braska, South Dakota, Virginia,
■j.
9 See Labor
Law Service*
strikes or
and
Tennessee
closed-shop agreements State regulation of unions. op. cit., for
13 See Metz and
prohibit
the
Jacobstein.'op. cit^.PZ,r ^;//
closed shop (and the
122.
This /suggestion would
not /deny
10 See
yellow-dog
Metz end
Jacobstein, op. cit 1 cooperative action to labor
7 Labor Law
other

arbitrary grounds;

protect
difficulties

representatives for workers2

.

,

.

•

»

*>.*.

*,

?

jj-

(i

."i

"*/

.*..*»,»

A"/1

^

—

4

Edwards,

Unions:
&E? R."-,rSi",s

March,

Unions,

in

in

lit®??"1 W John W.
3

for

1946.

Democracy

of the closed

all strike and

on

assessments not authorized in the

between unionized

(5) Methods of picketing;,
(6) The labor boycott;
>
(7) Union "trade barriers";

restraints

Until

upon

use

required

closed-shop votes. Iftiion dues and

amendment.7

Organizations
'

for eight yearS'
Increasing

(1)

is

constitution

the

are

lot

either by statute or ,by

Responsibility of Unions

radio

political levy has kept his

following:

;

contract)

™hl?se stusPen|J0Dn by the American
f^ w his faimre to nav a"si

theSomicVs"^ Amontthe
important of these

highlighted

Case of Cecil B. DeMille, constitutional

of 1

economy

which they are a part.

more

except when authorized by a ma¬
jority of the workers. Secret bal¬

Outstanding Labor Issues

(Continued from page 16517
consistent

llll

The New

p.^2.
5 Metz
& Metz

York Times, Feb.
15,

The Commerce
see

and Jacobstein,

TVi

A National Lar-

_.lofe
Labor Law Service -fSt.
-

.

lhe

1947,

Commerce

Laws)

Clearing House, Inc.

*

of
•

the

Service (State Laws) of
Clearing House, Inc. Also

author's

article

on

"The

Closed

Shop—Its Economic Significance and Le¬
gal Status,"" The Commercial and- Fi¬
nancial
Chronicle, Jan, 9, 1947,
►

8 Metz

and

Jacobstein,

op.

cit.,

p.

126.

pp>

33,

11

61,117-119.

That

is,

real wages.
12 See
pp.

the

and

effects'

gaining.

•_

Metz

33-34

.

money

on

,/

,

and

instead

wages

/"•'

,

Jacobstein,

61-65

for

an

j

,

1

"

to-

a

broader

matters

basis

organizations
with respect
the wage con¬

except

pertaining

to

tract.

...

cit.,

op.

estimate

of-^multiple-employer

,

of

:

of

bar¬

2'v!:'•:

s;/i4/6«d./-.//: //■/:v.,
15 lbidl, : p.
days lost in
/.

in

excess

of

137.

1946,

The

of

number

of

course,

was

this average.

man-

fat

Number 4580

Volume 163

THE COMMERCIAL & FINANCIAL CHRONICLE

work-days per 100 employees av¬
eraged 36 per year.16
The force of law, nevertheless,

-•

law

employed in many ways
to, reduce the Josses, abuses, and
social
hazards
resulting
from
strikes. It should be possible, for
example, to devise legal methods
which will
limit the scope of
strikes;
limit the, purposes for
which they may be employed;
be

can

ing of threats against the security
of a worker, his
family, or his
property.
Apparently the more

.

special

procedures to guard
against strikes in such industries.

Among

is

common

^e. ^^-beginning with
193o—have enacted into

Kansas
JVcinsas m

the

Jersey,

North Dakota, and Vir¬
New Jersey in 1946 and
Virginia in 1947, for instance, have

hold unions responsible for

practices)
a

outlined, step by step,

changes

union does not join hands with

which appear to be needed in the

a

business combination.20 Finally,

ginia.

a

eting abuses.22
•
Among the principal

carefully

seizure

serious

limit their adverse

employments

in

law

(1)

with great public interest.

Industry-wide strikes constitute
an
outstanding danger to eco¬
nomic welfare and political sta¬
bility. The best safeguard against
this hazard, seemingly, is to limit
the scope of the collective bar¬

and operation to cope with
threats to the public wel¬

(let

Permission^

strikes

of

under

public

a

policy .of

boycott

Norris-La¬

injunctions

coercion, by mass picket¬
otherwise, not involving
fraud or violence; (2) revision of
or

.

labor

re¬

or commerce

(by

other customary union

or

jurisdiction

from

antitrust

law

of
long as

so

relatively few of the states have
laws on the subject.26
There appears to be a real need,
therefore, for revising appropriate
federal and state laws or-enacting
which

statutes

new

the laws of many states to include

Methods of Picketing

will

though

us

are

:

of the

aware

bans

employer even
strike is not in progress.

a

the

picketing of
before

one

two

or

(4)

picketing;

mass

of

outlaw

the secondary boycott. Apparently

federal

(3)

state

and

such

re¬

laws

practices which cre¬
significant barrier^, to inter¬
community trade are—in numer¬
ous
cases—practices for creating
or
retaining work in the local
area.
In such instances they are
ate

merely

types.
Among the
(1) rules which
restrict the use of labor-saving
machines and processes, (2) rules
more common are

unreasonable

trade

or

commerce

restraints

Labor

labor

in

participate

to

resulting from

union members.

them; and allowing employers to

discharge workers participating in

Boycott

union

or

ago,

carpenter's union

a

of wheel-barrows rather

of labor from one market to an¬

years

sembling of

stone wall under construction.

services. The de¬
that legal safe¬
provided against the

public

mand is increasing

guards

be

discord and bitterness

in labor relations.

-

,

*

.

;

,

pre-assembled. bath-room fixtures,
restricting the use of wall board

.

.

result¬

states

Most

ing, from strikes in industries af¬
fected with a public interest. Sev-

have

against threats, intimidation,

vio¬

and unlawful assembly
near
an
establishment as

at

lence,
J

•

1':; V.

t

*•>..*

v

or

Lester, Economics of Labor,; p. 767.
"New Zealand, with compulsory arbitra¬
16

employment. Some states prohibit

Jacobstein,

op.

cit.,

domicile of

20

pp.

exception is an act of Con¬
gress
prohibiting
work
stoppages
to
labor
compel employment of unneeded
in radio broadcasting
(held unconstitu¬
tional in a lower Federal court).
18 Labor Law Service, op. cit.
19 Ibid.
Since this
was
written New
York has enacted a
law banning such




Ibid1.

It

should

be noted, however,

government denies the right to
public employees or others i*
has
a
special responsibility to protect
the wage standards of such groups.
thaKjf

Ah

strikes.

picketing,
picketing
the
a worker, or the mak¬

mass

(,

and

a

of interfering with lawful

means

tion, averaged 8 lost days ;v Norway and
Sweden, using compulsory arbitration in
Secondary disputes, averaged
140 and
86, respectively; and Great Britain and
tfce Netherlands, lacking compulsory ar
bitration, avereged 23.
/{.'■
>
17 Metz

tile, and requiring the

hollow

or

bending of reinforcement steel on
the job.
'
v '
Among rules requiring the per¬
formance
of
unnecessary
work
have been those
requiring that

by

labor outside the home mar¬

against

strike

21
ers,

I

to

that refusal of union work¬
directly involved, to cross a

Except
not

picket line to deliver or pick up products
or
render customary services is, in effeet,
'».*

boycott.

a
>■

i

It

'Sri*

.•d

-

*'r. OttJt' V'
rth

ket.

non-union

equipment be knocked
possible—and
re¬
assembled on the job, and rules in

electrical

down—when

printing trades which forbid

the

local print
typeset matter

the exchange, between

shops,

certain

of

again

unless the material is

com¬

proof read, and corrected
employees of the newspaper

posed,

by

it.

receiving

•

requiring the employment
workers have in¬
cluded union rules requiring, as
noted
above,
pilot-drivers
for
trucks.
Other similar rules have
>

Rules

unneeded

of

required unnecessary workers in
railway transportation; have re¬
quired employment of a full-time
electrician to be in charge of tem¬

lighting; and have prohibr
playing in public, by amateur
musicians, unless an equal number
of union musicians be hired (or
porary

ited

Unions, in several known
that wages
paid to
required unneeded labor may be
paid to the union in lieu of hiring
the unnecessary labor.

paid).

have required

cases,

which otherwise would be

Rules

limiting

the

employee's

output are quite numerous. Ex¬
amples have been daily mileage
quotas for locomotive engineers
and
various restrictions
in the

*

•

•

•»

union

r

labor.30

impediments

to

interfere with
resulting from regional

costs of distribution,

against

"make-work"
tions

trade tend to increase

freedom of

various types of
Labor rela¬
general (including
Wagner Act), do not protect

tection

the

rules.

in

acts,

against

employers

unreasonable

because they
do not include prohibited unfair
production on the basis of com¬ economies
parative advantage, and freedom specialization
and technological practices for unions and their
of exchange. Also, they encourage progress, and create other uneco¬ members.
Present interpretation
an unnecessary spreading
of dis¬ nomic tendencies similar to those of federal antitrust law prevents
putes to groups and areas other* resulting from other types of that body of law from restricting
"trade barriers."
>
wise not involved at all.
even the more excessive of such
Present law is
inadequate to
An appropriate legal method for restrictions as unreasonable re¬
cope

with unreasonable

imposed by means
dary boycott.

restraints

restricting

of the . secon¬ reasonable

The Norris-LaGuar¬ posed
to prevent would

the number of
union restraints

upon
be to

inter-regional

un¬

work rules of unions

straints

of

.

trade

or

commerce-

im¬ except when employed in connec¬
trade tion with business conspiracies or

designate as "unrea¬
combinations
restraining
trade.
court injunctions against the boy¬ sonable restraints of trade or com¬
merce" in antitrustfstatutes those Attempts of Congress to prohibit
cott.
Discharge of a worker in
union practices Which interfere union activities intended to rea field of employment covered by
substantially with freedom of in(Continued on page 1680)
the Wagner Act because of par¬
25 See the Allen Bradley Case (1945).
ticipation in a boycott is an unfair
31 Present
interpretation of Federal
26 Several of the States have enacted
antitrust
law exempts unions in such
labor practice, since the boycott
laws during the past few years to pre¬
cases when
they do n(^J01" han8s ^!th
vent
union
workers from refusing to business groups. See The Allen Bradley
Act was designed

22 See

the

discussion

author's

of

"Picketing—Its
Economic
and
Legal
Status" in The Commercial and Financial
Chronicle, Nov. 14, 1946, for a more com-

prehensive survey of
picketing.
23 And
•

tjf:auje

the legal status of

assessment

of

damages

in

agricultural commodities (and, in
others) produced or handled
non-union workfers.
...
27 Edwards, op. cit., p. 437.

handle
a

few cases,

by

.

28

Ibid.,

29 Ibid.,
30 The

cases

iUS*?™le "SCS'
24 Edwards, op. cit., p
i.

2>

status, the location of

workers

the competition of non¬

local business and

Such

and

employers

b 01 hv

They are inconsistent with
basic
enterprise
freedoms,
the
freedom of workers to choose one
union rather than another or a

dia

.

i.

pipe on the
installation of

ting and threading of

nity.

provisions

<

safety, and general welfare

or

those requiring the cut¬

job-site, prohibiting

workers outside the local commu¬

any

tions,

ployees. Virginia undertook last
year to guard against this danger
by prohibiting participation by
an
official or employee of
the

;

local,

prefabrica-

or

are

mand for labor to outside markets,
In other words, they are of carrying on inter-union rivalry, building trades to limit the daily
(The present state of federal law used frequently for the purpose of of reducing competition with un¬ work output of union painters,
places little restraint on picketing discouraging employment of non¬ organized labor in outside mar¬ brick masons, paper hangers, and
methods.
The Norris-LaGuardia union labor, of union labor in dif¬ kets, and of providing "protective others.32
Act prohibits issuance of injunc¬ ferent locals or federations, or of tariffs" within a local area for
Present law provides little pro¬

unnecessary

by Federal courts, against
picketing unless the methods em¬
ployed
involve "fraud or vio¬
lence." Furthermore, the Supreme
Court has held that "dissemina¬
tion of information concerning the
state or any of its political sub¬
facts, of a labor dispute must be
divisions, in a strike. Such par¬
regarded as within that area of
ticipation, under terms of the law,
free discussion i
guaranteed by
terminates the person's employthe Constitution." Obviously much
ment. and makes him ineligible
intimidation can be exercised by
for public employment for a pe¬
the methods of "disseminating in¬
riod of 12 months.19
- ■
formation" and by increasing the
Special safeguards are needed
number of pickets before actions
to protect the public against the
of the participants may be. con¬
hazards:, to
production,
health,
sidered as either fraud or violence.

threat of strikes among public em¬

different

a

eliminate

tion

,

of

intended to

reduce

a

bers

>

Examples of rules

...

sovereign

bringing mortar to a brick or

for

(

government cannot tolerate or¬
ganized work stoppages among
those of its
employees essential

for painting, and
than hods

of the spray-gun

Barriers"

closed

of

f

illustrating the first gen¬
eral class include those prohibiting
the use of cement-mixing trucks,
Rules

shop contracts and restrictive un¬
ion membership rules constitute
real impediments to the movement

Several

example,

"Trade

Union

Existence

boycott

purposes.

for

members

their

is employed
quite frequently as an instrument
of economic pressure for a variety

as¬

could

them.

The

of

policy

of

picketing.

The

a

.

the

general

eral

,

to

more

.

.

It seems clear that a

the

of

phase

one

general problem of "make-work"
rules of unions.
"Make-work" rules are of sev¬

threatening mass of attempted to organize a nation¬ other. Boycotts—as noted above—
use
of products made outside a
and other union pressures are em¬
persons at or near all entrances wide boycott of the beer of An¬
heuser-Busch merely because that ployed frequently in ways which
state, to prevent introduction of of a' plant.
new techniques, to compel the em¬
company assigned the task of in¬ create impediments or barriers to
j The economic effects of picket¬
ployment of unneeded labor, to
stalling metal machinery to a ma¬ commodity trade between differ¬
ing are influenced greatly by the
transfer jurisdiction over a type
chinists' union in keeping with a ent areas.
methods employed.
A peaceful
A few examples will suffice to
of labor from one union to an¬
jurisdictional award of the Amer¬
appeal of one or two pickets is
ican Federation of
Labor.
The illustrate the nature of the prob¬
other, and to compel an employe? analogous to
advertising or sales¬
to.violate labor relations law are
boycott is also employed as an lem. Several years ago the AFL
manship in its economic charac¬
instrument
of
clearly inconsistent with the gen¬ ter.21 As the number of
rivalry between forced a contractor in St. Louis
pickets is
CIO
eral welfare.,: Appropriate legal
and
AFL unions.
Several to reject local sand, gravel, and
increased or threatening language
crushed rock produced by mem¬
remedies are needed for coping
is employed persons are dissuaded years ago, for instance, AFL build¬
bers of a CIO quarry workers'
with unions which participate-in
from entering the employer's place ing trades unions in New Orleans
were refusing to install materials
such strikes, inasmuch as under
union, and to procure these sup¬
of business who would not'be de¬
delivered by CIO
teamsters in plies from Illinois at an increased
present Federal policy (and most terred
by peaceful picketing of
state laws) such strikes are not one or
spite of the fact that the latter cost of about 51 cents per ton.27
two persons.
Still greater
union had been designated by the Another example—also occurring
illegal.17
^
numbers arc kept away by a mass¬
National Labor Relations Board several years ago in the building
It is possible, also, that legal
ing of pickets near the entrances.
rules can be devised which will Finally, the blocking of all en¬ as the- bargaining representative trades—was a series of disturb¬
of
workers
reduce 'the
number
of
strikes
employed by local ances and riots carried on by local
trances, the formation of a human
building trades unions (and local
called in a hasty and irresponsible
trucking companies.24
chain around a plant, or the con¬
manner.
Some of the states are
| The boycott is frequently used contractors) in Belleville, 111., to
strue tion of, an automobile barri¬
requiring notice, of 5> .10, or 130 cade effects a trade barrier be¬ by unions, also, against products prevent the construction of a pre¬
fabricated house.28 Restrictions of
days before a strike may be eh- tween the plant and the outside made or handled by non-union
union teamsters frequently place
■f gaged in lawfully.
Michigan, for world. At one extreme; therefore, labor, against products handled or
example, requires a five-day no¬ picketing is analogous to adver¬ made by other locals of the same heavy burdens upon inter-regional
An outstanding instance
national union, and against prod¬ trade.
tice in ordinary employments and
ting; at the other extreme it is
ucts—made by union or non-union was the practice,/(several .years
a ;30-day
notice in the case of analogous to an embargo...
labor—originating in -areas out¬ ago, of the New York local of the
hospitals,
public
utiliti es,
and
It is perfectly obvious that ex¬
side .the, jurisdiction of the boy¬ Teamsters Union requiring opera¬
Other industries affected with a
treme forms of picketing are in¬
tors of produce
trucks entering
/ public
interest. Several of the consistent with economic freedoms cotting union.
Boycotts of the secondary type New York City to pay "wages" of
states
prohibit participation
in associated with our
type of econ¬ have several results adverse to a $9.42 for a "pilot driver," even
any strike which has
not been
omy and with general economic competitive economy. They result though a union driver was in the
authorized
by a majority vote,
welfare.
Such coercive methods
in obstructions to the transporta¬ driver's seat.29
under secret ballot, of the work¬
Numerous additional examples
deny employment to workers who tion, further processing, sale, or
ers.
Alabama, Colorado, Florida,
have a desire; and a legal right to installation of various kinds of could be given. Union restraints
and Kansas adopted such provi¬
work,
deny to employers and materials
and
products merely which interfere with the freedom
sions" during 1943.18 %
others freedom of access to the because—at some antecedent stage of trade between outside areas and
t:a Unjustifiable methods
of en¬
premises;.? encourage
disorderlithe items were handled by non¬ a local market are employed com¬
hancing the power of a strike will
ness,
rioting, and destruction of union workers, by union workers monly as means of "making work"
be; discussed in connection with
property; interfere substantially in a different federation, by mem¬ in the local labor market, of re¬
picketing and the boycott.
I/with production; and
straining a shift in an existing de¬
encourage
;

'

Rules

mented adequately by
such practices
under

revision of antitrust laws to

cover

persons

establishment to the

an

on

vision

ex¬

edge that methods employed range
all the way from the peaceful

them to be used regardless of the
purpose.

«-'.V

......

"Make-Work"

restricting the use of prefabri¬
be imple¬ cated
products, (3) rules requiring ;
inclusion of the
performance of unnecessary
tent to which unions
rely .upon to permit suspension of bargaining
prohibited
picketing to enhance the power of rights of unions23 responsible for antitrust practices; subjecting un¬ work, (4) rules requiring employ¬
ment of unneeded workers, and
a work
stoppage, or to bring pres¬ coercive picketing practices; and ions to penalties for permitting
(5) rules restricting the output of
sure
against an

All of

allowing

Strikes to prevent

are

revision of the

a

ing

say

circumstances does not jus¬

some

tify

us

picketing

against

to one The extent of the power resulting
enterprise) and employ antitrust from picketing, however, varies
law and suspension of bargaining enormously according to the meth¬
Tights to prevent concerted work ods employed in a given case.
stoppages on a broader basis, v
! It is a matter of common knowl¬

gaining unit

to

remove

straints of trade

federal

Guardia Act to permit

fare.29

affected

pertaining

pick¬

;

,

Act

ties.31

The union

Guardia

power; and

vent them or

Norris-La¬

and

Act

of picketing grow out of
failure to enforce adequately the
laws on the books and failure to

provide special safeguards to pre¬
effects

Clayton

lations

provide for greater responsibility designed procedure for collective
in their authorization; reduce the bargaining, mediation, voluntary
employment of unjustifiable meth¬ arbitration and, if necessary, state
enhancing their

ter-community trade in commodi¬

form of concerted action pro¬

tected by law. The present posi¬
tion of the Supreme Court is that

the states which have
adopted such a policy are Colo¬
rado,
Kansas, Minnesota, New

,

ods of

weaknesses in state regu¬

a

1679

435.

below.

p.
p.

441.
442.

last-mentioned use is

discussed

Case./'

'•

excellent discussions of vari¬
"make-work" rules, see Ed wards,
op. cit.; also, Robert M. C. Littler,
The
Public Interest in the Terms of Collective
Bargains." The American Economic Re¬
view, Vol.
XXXV, No. 2 (May, 1945),
32 For

ous

pp.

209 ff.

THE COMMERCIAL & FINANCIAL CHRONICLE

1680

Thursday, March 27, 1947

Finally, it should be noted that

The Outstanding Labor Issues
quire

in unreasonable restraints

of unneeded
radio broadcasting33

employment

personnel in
and

in

connection

eration

with

in

trucks

of

the

commerce, such as
pentioned
above.
Apparently unions, how¬

op¬

interstate

before

worker's union

/

\

is still

Apparently

several legal ap¬
proaches to the- abuses of "makeing

the

are

Congress,

the

electrical

referred to above

Edward S. Ladin Forms

effectively restraining "im¬

the collective from outside areas.39
The greatest legal need in con¬
bargaining unit to the employees
of an enterprise is one approach nection with commercial
market
which would maintain competi¬ restraints of unions is to revise
tion between workers of different
firms.
Outlawing the secondary

as

boycott should be helpful in

bers

ing

with

the

of

several

Federal

cop¬

make-

practices. Listing designated
types of "make-work" practices as
labor practices for

cause

labor

unions and their

mem¬

restraints, whether the
or in conjunction

act

with

business groups.
'

j

This

Another

approach

curities

the antitrust laws in

deal

with

the

a

more

types.
Union

Restraints

on

manner

type.

business groups.35

bargaining con¬
price-fixing.
authority, such

contracts

one

.shops,

of

bread

erigraving.
quired
some

bid-depositcry system

a

type of price formula.

agreements have

frequently, it

been

Such

used

most

in construc¬
tion
operations.
Examples cited
intlude those
affecting electrical
contracting; and contracting for
seems,

Generally
diplomats " of foreign
guided in their actions
(partly at least) by the knowledge

Edward S. Ladin

that,

of

as

Co.

sue

manager

He

teletype number NY "1-804,

Receive Ins. Benefits
New

York

payments

States

families

totaling

1946 from

$54,227,331

in

the

of

United
under the So¬

benefits

as

received

the Equitable Life As¬

Society

surance

ciety's policies, Thomas I. Parkin¬

—

plumbing and
tile contracting
industries, heating,
woodworking,, the fur industry,
milk
distribution,
and
poultry

stances

in

acting
with

said to be

are

which

alone

or

providing

local

industries
of this type

manufacturers,

and

Also, it should be remembered
if
the
regulatory force o::

competition

market

terned

(even though 80%
side the State).37
The

came

from out¬
.

greater economy in

makes
tions

Federal

antitrust

conspiracies
of

bus'ness

33 Under

terms

cf

thi

Lea

or

of

Act, held
Federal

by

a

lower

Court and
now
Supreme Court.

under

review

Federal
amended.

35 See
op.

cit.,

36 In
.An

Anti-Racketeering

Edwards,
for

restraints,
listed.

■

by

the

op.

numerous

including

Act

'

cit., and Littler,
instances of such
the

types

herein

questions

legal
to

'7,.
safeguards
are

protect

safety,

and

the

public

general

wel

fare against the
paralyzing effects
of organized work

stoppages

industries (such

as

in

transportation,

communication, coal, and others)
and

public employments whose
products or services are essentia
and

34 The

bargaining.

Special

needed

unconstitutional

as

tive
•

health,

groups,

important

closed or union shop, the
secondary boycott, the sympathetic
strike, and industry-wide collec¬

law

business and labor
groups acting
together, illegal when they result

employing the

the

as

combina¬

or

to

of government

power

This point is
especially
when considering such

\

Supreme Court's interpre¬

tation^ of

be maintained

degree in organized
markets,
there
can
be

regulatory

facturers—to

exclude from that
all millwork and
pat¬
lumber produced outside

can

reasonable

a

labor

in'San Francisco in 1936—includ¬
ing a group of unions and manu¬
area

available

that

from
areas outside New
York, A simi¬
lar type of combine was
organized

market

are

employers and their
union employees may favor union
practices which are, nevertheless,
detrimental to the general economic welfare.

wfrich effectively restricted "im¬
portation" of electrical equipment
combine's

Records

to show that

City area, for instance, were cited
b,y the Supreme Court in 194536
as having
organized a combine

the

in dividends to its
policyholders
throughout the United States.

employees.

local contractors in the New York

into

benefit

considered merely from the points
of view of employers and their

of restraint. An electrical workers'

unicn,

are

required in continuous

or

near-continuous

supply in
our
highly specialized and integrated

economy.

Allen

above.

,j,V * 3? Tattler,

op.

38 The

Bradl.y Case, referred

cits

>




v

^1,

gives

a

39 See

Allen

Bradley decision of

summary

The

1945

of the Court's position
York Times, Jan. 30

New

1947.*•

•'

•'

$14,414,874.

Equitable Life made nationwide
payments of $231,721,000
in 1946, and returned $55,296,000

Life

,

insurance

protection

pro¬

vided by the Society amounted at
the year-end to

$10,563,966,000,

increase of $1,391,526,000

over

an

the

amount of

family security owned
by Equitable policyholders on Dec

31, 1945. ■'

,v.fVv,' 7'.

Total assets, of the Society rose
$343,089,346 over 1945 to- an ag
gregate of $4,192,528,129.

Mr. Parkinson,

in the Society's
annual report entitled "Your Pol¬
icy," told policyholders that the
American
more

people
their

of

insurance

last

•

It

have

earnings into

than

history.

ever

;!7"

before

in

Women

last

increasing
life

year

wofjk

can.

in

our

do

"

•

this

life

insurance than

group

construct

»j

j

i v

y^t.

a.

?i.

C,

for¬

of

the

truth

of

understood national
as

the following:

policies, such

(!) To

that the shores of her

to it

see

near

neigh¬

"i

!"

f 1

t

yi

more,

h

plan

will

dicial to the best interests of
free

in, perhaps, Albania
or that it will make
impossible to hold free elec¬
in

or

it

Serbia;

tions

the

in

free

or

Greece;

or it will injure
of freedom of the

cause

At

press

speech in Italy. '777 77;

once

we

ourselves
Do

forced

are

questions

to

like

ask

these:

Albanians

or
Serbians really
anything about democratic
government
in
our
American

know

sense? Have the GreeksJever en¬
joyed free and untrammeled elec¬

tions

after

the

states?

own

fashion

of'

our

Has there ever been

for any

considerable time, such a
thing as a free expression of pub¬
lic opinion in Italy?
;' In a word,
are we not talking to the
people
of continental Europe of
things
which are nearly or, quite un¬
known to them?

7

,

then
ourselves in

broiling
fools. We

:77'7:.;,7^i.

7

If this be true,

we are em¬

strife

a

rolling stones up-hill.

hand

Let

be removed for but

ment,
and

of

in the bootless task

are

a

our
mo¬

and everything slips back
"It is a wise maxim

is lost.

in legislation," said Edward Liv¬
ingston, the great New York and

afterward

"never

New

to

Orleans

enact

laws-

lawyer,
that

prejudices of the people

or

the

other

will not allow you

to enforce." 7

Warnings from History
We

Americans

have

only

to

read

certain chapters in our do¬
mestic history, to realize the folly
of a course of action that would

foist upon the states of Europe a
line of political conduct of which

the

Can

route

to

India

cure; (3) As a
to prevent the

and.

open

se¬

corollary to No. 2.

Mediterranean,Sea

from

becoming somebody's closed
lake, shut against English ships;
(4) To bar Russia from the seacoast;

(5)

To

keep the

doctrine

of the "balance of power'- in rea^
sonable
working order. France

also

has

her? plans

and

policies:

(1) To be secure against Prussia*
especially as to Alsace-Lorraine;
(2) To strengthen her hold on the
north shore

of Africa, where her
lie, more especially Tunis
and Tripoli and
Morocco, not los¬
ing sight also of Madagascar and
colonies

Cochin-China;
Italy

did

strong.

sought,

(3)

-

not

To

grow

that

see

dangerously

Russia, on her part, has
first and foremost, the

possession

of

seaports

and

naval

stations; (2) The mastery of Bul¬
garia and Romania, and as much
as

possible

of

the

Balkan penin¬

sula; (3) The gaining of an over¬
shadowing influence in China and
the Far East,
....7

lyir. James Bryce observes in his
"Studies in History and
Jurispru¬
dence," ch. 1, p. 49, that "Russia
has shown during two centuries a
of

power

of

course,

holding

foreign

a

policy

they have had
be

we

real experience.

no

blind to

the

and- the disastrous break¬
down of the "reconstruction" leg¬
islation that was forced upon the
people of the South for 10 years
after the Civil War?
Yielding to
a hysterical
pressure that was as

ill-conceived
sioned

it

as

was

unreasoning, we at¬
tempted the impossible task of
immediately converting
several
million
ignorant
Negroes,
just
emerged from slavery, into a body
of
responsible
and
intelligent
electors who should take part in
governing some of the keenest,
proudest, and most politically in¬
dependent people on the face of
the globe. The result is too well
known to call for comment here.

But

come

to

closer date:

a

-

None

of these things have cut
figure in American political
thought. We scarcely realize the
any

world- wars to obliterate memo¬
ries ot the futile efforts we made
to teach

popular government and

free government to the Mexicans
in 1913 and 1914. After the down¬
fall of old President

Porfirip Diaz
1910, poor Mexico lived
through some distressing years.
With the best of intentions, the
about

United- States
struggled to
influence to bring about a

popular

choice

Mexico

of

a

get.

Most

oblivion

speech, etc.

ample

V

Difficult Position of the U. S.
In the Council
If this is still not clear

fying, then come to
Imagine yourself at*

or

satis¬

close range.
some confer¬

.Preside

according V to 7.

of

it

has

because

in

of

Europe

slipped irtto
the Tragic

And if

we

.

-

owmr

:v"*dT.

,bno

*77'^f j

still need

another ex¬
folly, look at;What we
Cuba after 1898—ho W the

of

tried in

Cuban "Republic" (with the bless¬
ing and assistance of America)

began
and
own

under

its

own

President,

so

speedily collapsed of' M8
weight that presently- the
States

was

forced

Ms charitablewvork alL
;•*

methjb3sv

thatispeedify

happened thereafter."

United

:>-;i

real

forgotten now, but they* price fig¬
ured
prominently in otir daily
papers.
They recall a chapter ljof
history we would all gladly for¬

events

.

use
,

Huerta, Carranza, Villa, Maaero,
Obregon—these names are jiearly

against overweening
majorities, free exercise of reli¬
gion, freedom of the press and of
as

Do

not permit the excitement of two

of

,

impas¬

and

nary American electoral

sails, and
the other tack
but the main direction of the ves¬
sel's course is not altered."
,7
upon

reckless

folly

She sometimes trims her

ever

)

the

unfairly and will be preju¬

bors, Holland and Belgium, should
be in friendly hands, or at least
hostile; (2) To keep

in hands not

before, ence
according to. MrrParkmson:- ^ - • cil of
)

that

presenting

government

this, consider the case of England,
by way of example. For genera¬
tions, England has had some well

minorities

now. owns

declares

i.- circumstances

illustration

.

■uvi,t; *f.

useful

a

them

/

and

to

for

in jobs and also wives at
7

case

what

purchasing one-fourth of all
Equitable policies issued in 1946,
the Equitable President reported.
These
women
included
career

women

the

of

an

by

home.

He

of
in

existence of many of them.
Our
principal lines of thought are of
popular government, the rights of

indicated

appreciation

insurance

tion

is

lays the ship

current national income into life
insurance helps combat the infla¬

at

many

ings. They must needs be guidec
only by some very general prin¬
ciples; and these are meager and
very insufficient material out ol

steady

doubly significant," he
"because the channeling of

tionary forces
economy."

for

otherwise

life

"This is

said,

far

remarkable

""

''

looked

J

is

put

year

Large numbers of farmers also
bought Equitable policies in 1946

■

the

other benefits to New

lating legal standards for such
organizations. *;
; <
Labor legislation should not be

restrained

are

examples

ments and

York residents totaled

kets and
commodity markets. Both
must be kept in mind in formu¬

commercial competition on a re¬
gional basis. Electrical manufac¬

turing and lumber

nuity contracts amounted to $7,679,773. New York policyholders

•,

..

sonably competitive conditions in
two types of markets: labor mar¬

unions—either
in conjunction

employers—have

;

organizations, under pres¬
received $12,137,866
ent practices, constitute
iiVdividends,
significant while
payment of matured endow¬
threats to the maintenance of rea¬

in¬

many

'

Labor

distribution.
There

employers.

had

,

of America and those who
repre¬
sent her in diplomatic proceed¬

! In

•

and

countries.; have

eign policy.,'

New York Families

-

to bght

their "

which

,

come

.

distinct goal or national am¬
bition toward which their govern¬

of^their indus¬

for a period of five
Mr. Ladin is retaining the
telephone which he has had

same

general principles in opposi¬
to a plan under
discussion.

some

son, President, announced in re¬
tive economy. Responsible
unions,
painting, plastering, cement work, for instance, which were allowed leasing the Society's annual report
to policyholders. *
arid plumbing.
;
Similar contracts to integrate
industries, restrain
have been
Widows and children and other
used, also, i.i job print¬ competition
unduly, arid adopt
beneficiaries of New York policy¬
ing. '
w i d e
s p r ea d
,777sea rcity creating holders received
Union policies have been em¬
$19,994,818 from
practices would fail to be in the
the Society in 194-3. Income pay¬
ployed, also, to restrict freedom of public interest
however fairly
ments to older people under an¬
entry into a field of business. ■ In¬ they might
dgfil with members

stances which have
have affected the

have.

are

ments

same

methods in such ways as are con¬
sistent, with a
reasonably competi¬

not

speaking,
lands

for the past twenty years and the

only is there need, however,
imposing upon unions higher
standard^,« of responsibility; the
need
is equally great for
legal
guidance of their development and

do

years.

for

or

tatives

department

Not

country where
and does not
foot of land:
a

own,

are

was

years.

to the general public.
re¬

77"',

trial and reorganization securities

employers, and
■! ' -

'

Other union contracts have

not

aided by certain consid¬
erations which our own represen¬

E. S. Ladin &

& Co.

commensurate with their power—
responsibilities to workers in and
out of, unions, to

wholesale, distribution of milk,
building construction, and photo-

tries

subsequently with Steiner, Rouse

If this body of law is to be rea¬

at

respect to
does

The diplomatists of other coun¬

,

partner

a

representative

principal

alien in

an

want to -own, a

Hewitt, Ladin & Co. and ifs

sonably effective in promoting the
con¬
public interest it must place upon
shops, beauty labor organizations responsibilities

distribution

.

she

..■■■

have been used in

nection with barber

with

p e-

a

cessor

'

se¬

in the firm

tions, therefore," is an outstanding
problem of our time.

tracts result in direct

According to

was

country

our

Europe; she has
not and can not have any
positive,
clear or
definite
foreign policy

1924-1942

The development of a more ef¬
fective body of State and Federal
law applicable to labor organiza¬

in conjunction with

Some collective

■,/;

She is

years from

other basic features of a produc¬
tive economy of the free market

war,

not far to seek. It is this:

reason is

period
eighteen"

of

the

the United Nations. The

Mr. Ladin

competition, freedom of en¬
terprise, freedom of workers, mo¬
bility of labor, technological prog¬
Commercial
ress, freedom of trade/and certain

in

always

under difficulty when
she deliberates in the.Council of

40

industrial

for

with

also, for restraining the
conditions of competition in com¬
modity markets—either-when act¬

s

issues.

ods and practices are at variance

to

restrictive

means,

"'

and

principal

Unions have become important

or

inade¬

—

in which labor union meth¬

ways

Competition

ing alone

discussion

quate as it may be—is sufficient
to indicate some'of the

which
some
is to amend

have, recommended

brief

is

dealer

as

,

services

cializing in reo r g a nization

Conclusions

'

might be helpful in reducing some
of the more onerous types of rules.

at

unlisted

•

.

is
forming
Company with

Ladin

spite of her size, wealth and
and
her
incomparable

power,

Ladin

S.

S.

In

and broker in

union acts alone

laws

United States Is Necessarily
Without Any Clear Foreign Policy

Exchange
Place, New
York City, to

manner

agents to be punishable

unions

relations

such

and

-

in' amended

in

such

for

work

unfair

to

statutes

Edward
Edward
offices

can
some

work
The

Own Investment Firm

of

scope

(Continued from first page)

Americans, but why that has been
so
is not as clearly recognized.
We attempt here to give some ex¬
planation for this condition.

nation's workers..

portation", of electrical apparatus
into the New York City market

possible. Restrict¬

basic

the

of living generally, in¬
cluding standards of living of the

entirely
free from antitrust prosecution38—
and, according to recent testimony

application to cope with the prob¬

with

standards

ever, which act alone are

lem.

consistent

principles of, our economic and
political system will be to encour¬
age rather than discourage rising

of trade

or

commerce34
typify recent Con¬
gressional efforts of very limited

work" rules

of-adopting appropriate
egal standards for labor organiza¬
tions

(Continued from page 1679)

«

Should the U. S. Withdraw from
United Nations?-A Retrospect

he effects

ah]
'V 7

over

to

do

again^

THE COMMERCIAL & FINANCIAL CHRONICLE

Number 4580

163

Volume

'

"Republic" on its feet
//a second/time. (
'".V. •/'-?'/
and set the

^ i What Happened at Paris in 1919
\ Striking lessons are also to be
; learned from the
making of the
i Treaty of Versailles. Does any one
suppose that the fact already alJ luded to—namely,
the detached
and alien position of- the United
//States in Europe because of her
non-ownership of land there
-

..

~

v

-'

ought to prove an asset instead of
a
liability? Is it imagined that
this fact
is an influence that

-

•

she

gained neither influ¬

r

If.

...

The

K

World Meddler in Others' Affairs

/Indeed, if there is a dangerous¬
ly unpopular and unprofitable role
for any nation to
play, -it is that
of an international
meddler,a

professional

,

"busybody- in other
Especially true is

•

v

peoples

to which

a

course

of ac.ion

they

are, both by tem¬
past history, utter
and, with which they

perament and

is

.

on

or

finding
pitiable

a

sympathy.

no

herself today.
misfit in

the

She is
Council

tolerated

by reason of her size,
Strength and wealth. She is daily
line of conduct with which

a

are

for

the

most

unacquainted..-

handling all kinds of questions,
and international.

Then,

task under

profound
impression of / its
.gravity and seriousness, intending
to be guided by the loftiest prin¬
ciples.
To quote from his own
state documents, there was to be

4,

a

bartering of peoplies
4 and provinces as mere chattels
;; and pawns in a game." - There

/*. "no "-more

"impartial justice to
discrimination," and
more
in a similar strain.; What
was the actual outcome?
A treaty
be

should

all

•

without

which proved one

appointing

bits

of the most dis¬
of
diplomatic

patchwork to; which
Heading
nations ever
proval.

•'

great

and

gave

-

they

part absolutely
„

*

/*///

ap-

4,:.;/•. ->"* s;:: /!■ \.J. ///.?. ;■

"It

said

was

of modern

Italy,

perhaps with truth, that she was
made too quickly. The saying is

certainly; true of Bulgaria, Her
men and old men were
alike in a hurry.
Without any
training whatever in the most
difficult of all political arts, that
of
self-government, Bulgaria
adopted a form of constitution
which presupposed a long political
apprenticeship... The constitution
reflected, in { every clause, the
work of the doctrinaire." (p. 350
"The Eastern Question/' by Sir
young

J. A. R. Marriott).

Without much

/4:'xX/

exaggeration, this

extended

to
most of the countries and peoples
criticism

might

be

They are doc¬
trinaires in real liberty and free

of

Europe

today.

often
thrown in the wrong direction on
government.
When we talk to
several of the most crucial points them of free institutions, we are
3n dispute, For example, the dis¬
speaking < to them in an almost
regard of the almost impassioned unknown tongue.
•
*
•
:
protest of the great soldier of the
Are we to persevere in this
wirar, Marshal Foch, with respect
to the occupation by France
of hopeless and uninspiring line of
action?
Is-there not something
-the left bank of the Rhine. Shutbetter and wiser both for us and
ting1'our ears to his warning the
people of Europe? In return
-words we helped England selfish!
for our tremendous sacrifices*.in
3y refuse to France the possession
life, treasure, prestige and inter¬
«of territory well characterized as
national respect and standing, can
vthe
back-door
through
which
we
do nothing better than keep
•Trance had been twice invaded.;
telling the people of; Europe to
Again: we so deeply offended behave themselves, and be honest
the, Italian people that their rep¬ and kindly-disposed to their neigh¬
resentatives left the conference in
bors?
Must we always act the
; linger, because they saw that the
part of Mrs. Jellyby in Dickens'
solemn promises made by England
great novel "Bleak House"?- That
sand
France
in the Treaty .of
well-intentioned lady made her¬
/Xondon, ' with
respect to the self a nuisance to the very people,
!

this

as

because

so

world. par¬

liament, where she is
distrusted

should

of

an

alien;

are

American influence was so

s

of

confusion, with
things-to

In

suggestion

no

come.

•./

urging the withdrawal of the

United

from

States

the

"United

of

major part in the war, we
a party to such

our

are

entitled to be

-

^boundaries of Italy,

*«come mere "scraps

were

to be!

of paper." Ir¬

respective of one's private opinf
ion as to that secret Treaty of

.

/Xondon, which had been so in¬
strumental in bringing Italy into
-the war on the side of the allies,

remained that the treaty
promise that had been ac¬
tually - made. It ought to have
«ibeen 'scrupulously
observed. It
•was America that persuaded the

;the fact
-was

a

influence would be greater

than is

possible

ever

There

would

nities for

now.

still

be

opportu¬

extension of our own

an

influence into

affairs

Old

of the

World, but they would be on rare
occasions, and would be heeded
all the more because they were

seldom exerted. At long intervals,;
distinctions Lwe have done this wxtn effect in

marked

people of the Atlantic
and also be¬
understanding Seaboard; and those on the Pacific
slope have. their /own; peculiar
sympathy with the hatreds,
prejudices and age-long animosi¬ point of view. Yet, as already
ties of the Old World. The sooner, observed, we are, in a; general
the better. But this is not in order sense', one people, - possessing an
to leave a continent in a welter
interchange /of ideas /t hrough
newspapers, magazines,' radio and

travel/which

finds

but

little

counterpart

anywhere ;in
nental Europe.
,l '•■If

conti¬

the past.

1823, sent such
sage to Congress

Once

a

the

wildest

when

President
m

stop

to

wretched and dis¬

the

astrous
•

of

again

using his good influences to put

Russo-Japanese War by
the Treaty of Portsmouth in 1903.
By that action the United States
did tne whole world a great and
lasting benefit.

federation, under one central gov¬
ernment/ is a; thing • of folly, a
dream

famous mes¬
helped ma¬

Theodore Roosevelt succeeded

as
to nationals diversity, it
requires but little thought to see
that such a thing as a world con¬

settlement, and perhaps ought
such, on other grounds also.
But this is very different from our
remaining a permanent member
of U. N. From that unhappy, illcontrived organization we can not

a
as

terially in bringing to an eqd
the iniquitous "Holy Alliance" of
continental Europe. /
.

honestly recognize these

we

Once when Mr. Monroe,

in

facts

a

imagining.

To

.

,

"

.

Vj

.

.

Again, in 1916, President Wilson
questioned the warring powers of
Europe as to what would satisfy

bring toge ther the people/of them as the basis of
making ) a
Europe into one harmonious, or
permanent peace.:, He was, indeed,
reasonably harmonious/ "concert" unable. to continue this line of
would be a long step in the right
negotiation,
but
he " evidently
direction.
It would be : the .old
would have done so, and would
withdraw
too
soon./ The
very ^"concert of Europe'- on (a. larger probably have succeeded, if eveh s
* /
difficulties arising between Great and- better scale.
/////••! had not arisen which seemed to
<>
Britain and ourselves over Pales¬
The presence of Russia is, of
require our own intervention by
tine, emphasized by Mr. Bevin, course, a serious source of discord. arms.
••/•//;//Z
even as this article was being con¬
If our own union of States had
If we could bring ourselves to
cluded, furnish added reason for been obliged to endure a single
realize the immense opportunities
our getting out. Withdrawal need
state which was as dissimilar from
we possess for doing good to the
not mean that we may not furnish the others as Russia is from the
world by other means than con¬
food to the starving, and
even other states of Europe, it is to be
stant intermeddling directly with
make a "loan," if we care again feared
that
our. history
would other
people's quarrels and if yve
to make it on such unpromising
have been far less peaceful and

to be

.

-

outlook for

the

would

repayment.

satisfactory than it has been. /

there-would
then be possible the setting up of
an
organization which is cham¬
pioned by the ablest and wisest
On

contrary,

statesman

now

Churchill.

alive. Mr. Winston

That profound thinker

urging the
States of
Europe. He and some twenty or
more
eminent -Englishmen have
and energetic actor is
creation

formed

of

a

a

United

committee

to endeavor

to put
While
to

the idea into practical form.
it will be a difficult task
draft the constitution for such

union, the chance of success is
far greater than for so motley a
a

group

as

the.United Nations,,or
Assembly, //•/

for any World
v

In- the issue of the /Commercial
Chronicle" of Jan?

and Financial
uary

4, 1945, the writer tried to

We had

out

action.

the

and

cheerful one;

picture was. not a
but, if such a limited

plan of union is not

within ac¬

was

settlement has been

ac¬

cannot 'form

a

United

States

of

Europe, what folly it is to talk of
United Nations of the world!

a

Of course,
will be

the cry of isolation¬
raised against what

ism
we

But the

thus far said.

have

is foolish; for there is a
better way of doing things

charge
far
than

constantly nagging
And, in the
last analysis, Europe must manage
by

our

reserve

for

influence

our

special circumstances and occa¬
sions only, we should make a long

in the

step

right direction.

.

We

should then abandon the ambil jous
dream of

keeping distant countries
at peace,/because we
come to realize that

tribes

and

should have
had

we

embarked

on

quixotic

a

piece of knight-errant folly, and
we were making ourselves ridicu^
lous.

/>../,///// /.•

:

Wh.le sending our
and

sailors

to

soldier-boys

maintain

order in

the Balkans or in China, the s reets
of New York arc not safe for our

citizens,* but

own

are

affording

the people of Europe.

daily exhibitions of highway rob¬
bery and murder that have rivaled
her own affairs herself.* We in the most brilliant exploits of the
the western world cannot do it notorious Dick Turpin in England
for her;1 we can be of use in in former times, and i our own
another 'way.
;•/////"
western Jesse James, in modern

some-of

The

the
settled,

cepted. The states of continental
Europe have not yet learned the
lesson of compromise. But if they

The

efforts made by the

when occasion called for common

Civil War, but

our

question there at issue

the abortive
leading pow¬
ers
of Europe during the 19th
century, to work in harmony

point

;

,

have

the

of her lack of

~

,

New
Penn-

or

of better

actual

sylvanianians and Ohioans. West¬

'

•

many

*

Englanders, but also from

present ideals,

influence to the whole world. Our

that

widely different in
respects, not only from

her -geo¬

.

traditions

unity of thought. Southern people

Nations, exposed to Nations," it is not meant that our
misunderstanding,-, ridicule country should refuse to -partici¬
even contempt.
Feared, dis¬ pate in settling the boundaries of
liked, and mistrusted,, she is only Germany, Austria, etc. In view

"

national

States

organization

us

daily

civil government and a

loo, he approached his

an I

for

and

;4 close student of history, a liberal
In his fine work, "The'Eastern
f in thought. Beside all this, he had Question " Professor J. A. R, Mar¬
i had for more than four years the riott makes the following obser¬
must practical sort of experience vation:
* *
1
"
'
in

United

have

We

tend to hold
together in common action and

of the United

''hack," but by a gentleman who
was
a
statesman and scholar, a

A writer

.ahead

course

and

cause

other

political preaching to the peoples of Europe

old-line

an

The

.

retire from
ill-conceived

to be

shape of constantly Urging ^upon

If any there be, let them

by

us.

clear

,one,

seem

erners

Yet that is very nearly the posi¬
tion in which the United States

not

•

shown,, there" would

government?

.

wide
divergencies * among our¬
selves, in spite of the many forces

from

// America was there represented,
/

what has been

graphical position, her past history

study the making of the Treaty of
Versailles in 1919. .* ./•>>
>/,•/ /

.•

the light of

and

have little

// tures.

.

In

central

men's matters."

European . questions?
There may be those who think
that
this' very
aloofness from
Europe's quarrels should prove of
assistance to the United States in
these pe'rlexing diplomatic adven-

-

of

this when such meddling takes the

unsolvable

-

line

action, and it is
through regional groups,'. 1 V"

just

helping to strangers,

tries her hand at

'

•

better

Unpopularity of the Role of

settle some thorny and well-nigh

.

/

/

she

ence, respect nor effectiveness.

count in her favor when

should
•

where

United

States and

Western
If there be
States
room

of

World

room

for

a

there

Europe,

the
/

which

is

also

the countries
the Western
Not that the writer favors
between

make

4////I,//
''

urnummm

United

for some much closer under¬

standing

days/ .//'j

4

Sardik Food Products

Slock Offered by

Breen

ft A

up

Offering of 30,000 shares of no
par
value cumulative preferred
organization; stock of Sardik Food Products
far/from
not. political Corp. was made March 25/by
machinery that is needed over George F. Breen. The stock was ~
here, but a far different attitude priced to the public at $10 per
on the part of the United States
share.
/•'/.;"•••
to
her neighbors,
especially to
successfully to cope with and
Proceeds from the sale of these
Mexico and Argentina;
overcome the intricacies and self¬
shares will be used to purchase
Here we have a truly useful and additional
ishness and cross-currents of am¬
high speed and labor
noble chance to show ourselves saving equipment to be installed
bition that make up what is called
a friend and moral leader to those
in 'the
company's
four plants
by courtesy "European diploma¬
cy." .Help from far-distant China, who are so close to us geograph¬ which are engaged in the process¬
or from unsympathetic and igno¬
ically. Our career in the past, and ing of raw food materials by vari¬
rant America simply adds per¬
especially in the very recent past, ous methods such as canning, de¬

complishment, much more not is
any World Federation.
The plan
is well worth trying, for it seems
the only
one that
has a faint
the poor, whom she so oslenta- promise of success.
■ <•/•?/•
tiously sought to assist. : •
No world organization can hope

World.
a

formal

political
it.
It is

the whole
organization is
misconception, and
is a failure.
One of the great
weaknesses of the old Empire of
Austria,
the - "dual monarchy,"
was
the lack of -cohesion or of
common
sympathy-and national
interest in the people over whom plexities to an already sufficiently
The attempt to govern

world

founded

by

on

one

a

has not endeared us.
Ever since hydrating and freezing. The bal¬
the old Mexican War of 1846, ac¬ ance will be added to working
.////' i confused situation.,
-parties to the treaty to go back
companied by the enforced sale capital.
/V //.• • ;• •,///,
"Out of the 51,000,000 subjects
•on their word.
-4/'/'"•
of so much valuable territory,—
National Ignorance of Others
of the Emperor Francis Joseph,
The stock is redeemable at $11
Again, what a strange, clumsy about
As a homely way. of testing the California, Arizona, New Mexico
10,000,000 were Magyars-before Jan. 1,
~;and difficult
arrangement was these forming a compact mass in truth of this, let us ask ourselves —our southern neighbors have per share on or per share there¬
1952 and at $10.50
ipade
respecting the City of Hungary; about 11,000,000 were questions like these: How much watched with anxiety the growth after. It is convertible into com¬
of the convenient doctrine of
Danzig and the Polish Corridor.
mon
stock on a share for share
German;
about 26,000,000 were do we Americans know of the
/"Settlements" of this sort really Slavs. Of the latter, about 7,000,- customs and manner of life of the "manifest destiny," which was basis.
'
/ ■;,//.
settle nothing. Once again, take
coined just before that Mexican
000 belonged to, the Serbo-Cro¬ people of continental Europe? Are
War. In spite of our "good neigh¬
:thq handing over of Shantung to
atian or Southern Slav branch of we not almost as ignorant of this
bor" policy of very recent times,
Japan, with a mere verbal prom¬
the great Slav family."—"A His¬ as we are of the people of Arabia?
Blair
ise from her to return it to China
we
are
intensely disliked, espe¬
tory of Europe" 1815-1923 by Sir Coming a little closer home, have
at some future date. How can this
cially in Argentina and Mexico.
we any really intimate knowledge
J. A. R. Marriott (p. 428).
be reconciled
with any sound
of the feelings and likes and dis¬ The daily press supplies so much
information as to this, that it is
Blair & Co., Inc. announces that
principles? Did it not give Japan
gional Groups—A United States likes of Englishmen, Scotchmen

the Hapsburgs

reigned.

.

& Co. Elects

Directors; Adds to Staff

•

Just the

opportunity she

wished

invasion of the mainland
of Asia?
Of course, other coun¬

of Europe

ior the

tries made many
-

and serious

takes—also. We were

mis-

not the only

bungler.
assuming

In

■"moderator"
and
was

or

disinterested
a

the position of
that, of "candid

friend," America

failure, and

placed herself




and Irishmen?

they not make

do
amusing blunders

On their part,

that an empire
about ourselves, our political par¬
so
loosely strung together could
ties, our ways of doing business,
not command the support of its
and our national ideals?
subjects, and—in the words of one
Has not our own United States
of its ptiblic' men—was "like a
clock; rub1 down," and came to embraced almost as widely spread
its end. "unwept, unhonored and and diversified a lot of people as
unsung"? There is indeed a far can safely be included under one
Is it any wonder

needless to

enlarge upon

Here, therefore, is a
field for our only true
it

lies

not

3,000

it.

miles

or

more

but almost on our doorstep.
A really united Western World
would be a tremendous objectaway,

"eye-opener"
steadying and reassuring

lesson to Eurone, an
to Asia, a

Jr. and Robert
Vice-Presidents,
elected to the Board of

John D. C. Towne,

really fine
leadership;

W.

Tyson,

have been

Jr.,

Directors.

Donald
come

r

Finlay McRae has

associated

their sales

with

department.

them

^

be-* !
in

1682

THE COMMERCIAL & FINANCIAL CHRONICLE

Reason, again, tells

Free Markets and the Free
(Continued from page 1647)
that of every other. The freedom

or

lies not

fence

market

Such

only in the opportunity,

but in the equality of that oppor¬

value,

rules

others

But

word,

dom, each must be able to choose

in

known

this broad

of the

sense

for himself
what he

that he

so

do

can

is the

depends upon the nature
degree
of
the
acceptance
given to the rule. The only true
acceptance of a rule or standard

however, it is impor¬

once,

tant to note that "selves"

ferent.

No

alike. You and I

are

dif¬

individuals

two

are

not the

is

that

one

is

and

general

accordingly the opportunities

uals

who

that you and I and other individ¬
uals have are limited by the par¬

life,

ticular

is

And

are

characteristics

individuals.

us

same.

that

Your

make

so

it

the

among

is

not

complete

freely accepted, and
generally accepted that it

or

Qpportunity, therefore, is not the
as your
brother's. Equality
then, is not uniformity; it is not

hope to

same

It

sameness.

does

lead

a

not

do, but also what

do. It

gives

These

race,

you

does

Whenever
one

it

of

not
'

against another, it interfers with
equal opportunity and with free¬
dom.
'.VA/'
V
Some

of

the

free—to

avoid

be

acts

and

such

as

unfair

Until
dom

we

merely the ab¬
sence of freedom.
That, you see,
leaves our thought in a complete
(2)

Freedom

Is

Individual.

and

you

to

me

as

It

in¬

dividuals,

when it tells us what
to do. Government exists for the
individuals who are its citizens;
and

merely provides rules for the
of

game

self-determination.

A

government is free only when its
individual citizens are free!
An

important corollary is that
self-determination
depends
largely on the individual self, and,
since each self' is different, there
must be differences of attainment
and achievement. Men differ in
*

ability to
seen.
means

dom

opportunities, and
grasping them when
Thus
equal
opportunity
different results, and free¬

brings superior rewards for

superior

be.

abilities.

Differential

for superior workers, dif¬
ferential profits for superior en¬

differential

superior lands

—

these

rents
are

for

neces¬

Equalization

of

incomes

can

exist only under
some

a system of coer¬
regimentation
that
makes

work for less than

men

produce, in order to
more

than

they

give

swollen by fraud and exploitation.
Free individuals must be
sociallyminded individuals.

(3) Freedom Works Automatic¬
ally. It lies in competition, for
an

adjustment among
competitors that brings coopera¬
tion, and is voluntary. There can
be no equilibrium of
independent
forces except under a condition of
competition
that
works
auto¬

matically.
(4)
Upon

Thus

nothing
cepted

Freedom

Standards.
but

a

*

A

Is

Based

standard

is

voluntarily-ac¬

rule.

Accepted rules of
social conduct,
beauty, goodness,




Under

of

R.

such

in

How

Syndicalism,: United States, 171 hours in Great
Commu¬ Britain, and 262 hours in Sweden.
in Great Britain, the The coal that it takes an Ameri¬

Each person

of

Just

with

know

the

markets.

American

sian

have

we

and

of

pan

with

American

seasoned

with

the

ing-power-creation

we

least

about its

validity

representing

as

pressing the price

have

we

curate thermometer. In such

One

free¬

can

be

not

complete

Free

kets

therefore

and

free

just

are

mar¬

parts

of

freedom. Free enterprise and free
markets mean equal opportunity
for

enterprise and for exchange,
based on positive rights for in¬
dividuals

automatically competing
according to voluntarily-accepted
rules,

standards.

or

But

note

well

that

free

enter¬

are

neces¬

prise and free markets
parts

sary

freedom

of

freedom.

requires free

General

enterprise

and free markets.

Free

enterprise

free

in¬

word, it is enterprise
by free men.
free

this

is

of free

on

impossible without

markets.

prices

carried

It

is

futile

to

talk

enterprise, and then to fix
and

control

production.

just markets in
which free enterprisers sell
goods
to free
II.

are

buyers.

not

a

few in this country, do not

different from freedom.
would

that one large
group of individuals who do not
want

say

real

among the
I
mean

freedom

are

found

so-called; "have-nots."
these, not merely

by

people
wealth

believe
others

who
or

do

not

have

much

income, but people who
taking that which

in

separate

reasoning
in

its

leads

favor.

to

me

(3)

convince

,v

me.

Among

7

adyantageoUs
-' £

reflex

my

conclude

Empirical; evi-,

tendencies,

sometimes called instincts,
that demands self

is one
expression. This
"urge" is well known to educators
and psychologists. I
ask, how can
it be gratified in a
regime of con¬
trol

where

the

individual

to determine

sumption

or

is

either his

have.

groups within our own ha
tion. There are have-not
individ
uals why. are
willing to accept
regimentation as a means of level¬
ling down and taking away what

not
con¬

his productive activi¬

ties?

Another

what

may

innate

be

called

a

of

sense

justice, and a notable part-of this
is a feeling that I have a claim
on
anything I have made. This
leads to the feeling that I am
rewarded fairly when I am
paid
all that I produce, no more and
less. Here, again, suchrewards

is

to

bp

«Even

more

me,

tells

no

in

logic.

..

Reason

that the essence of truth
observable relation between
and • effect.
cause,
This
leads
is

me

an

straight

to

the

system of equal
and
incentive
re¬

opportunity
wards, in the following

freedom, the

reason

being twofold. First, it
incentive
rewards
based

upon

productivity,

which

out

bring

the maximum continuous
forts. of individuals under

normal

or

usual

Second, it provides
fective

means

specialization

of

ef¬

most

we

division
not

place for every man
every man in his place.
a

any

determining the

and

labor, by which

ef¬

circumstances;
the

heard

,

shores to

our

of

make them

us

it will get value.

and
I

pass

the

over

Their

paper,

tyranny of the

Communist-like
French

use

;■

mobs

Revolution

of

the

that followed.

Mirabeau, too, had the idea

that

debt

gether.

and

Thus

currency
go
to the

I

come

to¬

ty¬

ranny of Red Russia. I know no
better proof of that
tyranny than
the absence of a standard
money
in
Russia.
It
was
one
of
the
builders of that

tyranny,

who

said

surest

Lenin,

(and I quote): "The
to destroy Capitalism

way

is to debase
money." You see, the
who can't seek work in a free

market

for a money
wage, and
who can't seek the
goods he wants

coming in? But who¬
of

to

buy in

free

a

market

for

a

.

price, is not free.

In most countries today we see
great scarcity, financial ruin, and

money

oppression. Certainly one can not
say that collectivist planning or

Schacht,

building on the
Medieval doctrines of Nationalist

central

predecessors, they sought to

/A

.....

control

gives

/Then

any assur¬

prosperity or freedom.
Qur so-called "planless economy"
has wbrked at least

well

as

the

as

Hitler

came

and

his

Dr.

and,

man¬

age their Fascist economy without
any standard for their currency,
The "blocked mark"-became one

of

ance

symbol of tyranny.

economy of any other nation. ;
A That leaves our greater freedom

,

A

£

A,:'A' .A' A://

So

gold, the symbol of freedom,
gain!
/AA .A flowed out, and sought a haven in
And, at that, we have never our shores. Alas, here it met the
closely approached the perfection curse of Keynes. This /radical

^as

.net

a

,

of

our

institutions

tainment of
restricted

trade,

system,

much

unwise

the full

or

ideals.

our

monetary

We

endured

and

British

economist
became
the
prophet of the New Deal, and his

at¬

have

central

bad

a

the

government

used

inter¬

best

rules

economic life
I

know

for

as

the

he

we

encouraging

To

fact than that the most
tive
American

is

to reform and improve

his

economy"

the

Keynesian tyrant, money
means
of "priming the

a

pump." So the New Deal "leader"

the

seized

staunchest defender of private en¬
terprise, could tell you dozens of
ways

a

just

conserva¬

economist,

as

our

gime.

our

'73"

III. How to Get Free
Markets For
Free Enterprise?

when

to

definite

economie

monetary
of

sence

essential

freedom

freedom.

manage
rannical

a

such

can

work

pletely-managed
-

For

rency.

You

church

and

Feudalism.

r?

goes

managed
only in a

almost

•

duties,

to ;crown.

.

sort of

That

..

Nor

ef¬

is it true,

we: are

on

a

in-exchange for

that

other

currencies

would depend upon its converti¬
bility into gold. Why do ^foreign

traders
ounce

to

was

"manag¬

hardly a trace of automatic action
whereby the value of the. dollar

1

duties

fix prices.

to

including

currency,

gold standard. Ex¬
change coqtrols prevail." There is

.

say

paper!

internationally

com¬

economy.

on

to

that

cur¬

the

some

a

Prior to freedom
of-trade, the
individual had few, rights. He was
with

activity

ing"

sought to perpetuate
debasing the cur¬
can

United

ment's

man¬

their power by

tyranny is built

pretense now that
States is on any: ob¬

forts

so-called

a

centuries, the tyrants of the

world have

no

This is evidenced
by the fact that,
so
large a part of the govern¬

forced

so-called managed
which leads to the

of
debt—and

rency

are

is

jective standard of value at home.

upon a

currency —
final futility

aged

we

imposed by gold re-.
if

There
the

of. $35
.

<

con¬

the

monetary standard

basis,

a

central

serves.

to

rely

of

to

to
ty¬

individuals, made pos¬
by freeing the tyrant from

the restraints

serve as a «basis for the
nation's
system of money and credit. With¬

out

as

economy"—\a

system

sible

es¬

was

so

over

is

the

monetary freedom is

adoption of

"the

demone¬

idea

currency

to

today

And

a

was

general

the

trol

on

silver

The

manage

Standard Money..

gold

repudiated

paper re¬
(Talk about "The Crime of

tized!)

first

gold,

bonds, and went

economic system.

The

necessary evil to be /
means of managing what

followers always call
— as
if our eco¬
nomic life were a sort of measles!

play it here.

more

no

is that money is

of

and

"the

of

game

doctrine

sort

a

suffered

ference. We have failed to
adopt

only,find loaded
but. put

its value

gets

fore let

man

coun¬

anybody trying to
emigrate to Russia?
/A

to

ways:

It leads to the conclusion
that
the maximum production
may be
attained only under

gives

from

ever

influ¬

the. -conclusions

strict

tries

1.

society.

powerful

are

upon

found

continually policing

keep the people from other

no

a-system

of

,

Money, said he,
from "use"; there¬

currency.

-.

is

feeling

,

There are have-not
nations. There are have-not
pres
sure

three

on

dence of its material

based

really want freedom. Many want
license. Many want what they call
security. But these things are very
I

freedom

encing

Or, do we?

1

counts: (1) I instinctively-feel a
preference for it. (2) My abstract

Freedom?

'

A

.

where except in a free

Why Do We Want

with

.

world, 54% of the refriger¬

ators, 50% of the radios, and onethird of the soap.
•
Is it any wonder that we are

at
this

Another .thing I know rhFthat
I, and therefore many others, pre¬

free
means

dividual choice on the part of
those who direct production. In a

But

■•bVv

fer

enterprise

of

thing I know,;' the majority

it.

cases

dom of exchange.

qf^ Jr 1VL

sauce

mild "case

a

of the people of the United. States
want freedom, as I have' defined

no ac¬

in the

politics
purchas¬

ourselves ..have

We

had

.

the equilibrium value. And unless
we have standard
money for ex¬

population of the world, its people
have 75% of all the automobiles

Rus¬

worldwide experimentation
collectivism.
Av

doubts

our

idealism

althougjh tthe United States
but about
>0% * of the total

has

country?

own

weird mixture

a

Communism, poured into the

dirty

is:*.' objectively

price

determined

Unless

our

not had

/ A/A.V-.\ Keynes?
in

so

about

we

of Mississippi Bubble
fame, who
developed a scheme for maintain¬
ing the power of the king,
by
compelling
the
people
to
use

the

land of the Magna Charta and the can miner one hour to
produce
of
requires seven hours in Russia.
Capitalism,
we
see
Socialism and economic decay,
And
v:

Have

Law

nine-and-a-half hours in pre-war
Germany. It takes 60 hours of
radio

A'/uA-A

the inheritor of the debts of
Louis
XIV. He took up with John

paper

think

gold worth $70 an
despite the so-called price
adopted by

our

Treasury?.

.The function of
money is not jto
serve

as

a

means

:

roads

XV,

state, prob¬
other na¬

any

a

grew]

good

as though sensing the
dan¬
to tyrants, the kings of those
days sought to debase the
coin¬
age,
thus disrupting trade. Let
Henry VIII pass. Came Louis

one hour of labor to make
cotton shirt in the United
States,
four hours in Great
Britain, and

make

on

money.

ger

Some results
recently stated by
T. Haslam are as follows: It

labori to

depends

But,

real

takes

In

trade grew, freedom

as

and good

a

appears

exchange.
growing

which, in the be¬

money,

Trading

Two

find

affiliated

And

And

enter-

mentioned:

be

may

•

ginning was on a direct metallic
standard, gold, or her sister, sil¬
ver, serving as the chief
medium.

-

tion in the world.

the- equal

Communism.

free

markets.

ably higher than in

Cooperation,
to be

as

now

to

we

closely

has

room

Many people in this world, and

But look to it that the "differ¬
of
freedom
are
not

out

France

mometer! The thermometer is the

they

others

earn.

entials"

that leads to

That is freedom.

Free markets

sary results of freedom.

cive

the

known
which

one

selling

equal opportunity.
Each voluntarily accepts the rule
of
the
majority and the ther¬

wages

terprisers,

to

and

free

criteria

Communism

upon

of

success

of

use

standard of living.
Both of these criteria show
higher
results in the United States than
in any authoritarian

V;'..-.A.A;;y
find

based

tyranny

in

made possible
only by
freedom
of

was

And that rested upon the

by

home

see

in energy for

choice.

This

growing

or

wages and the

con¬

find that radical form of labor

we

all

there

circle.

speaks to

turn

standard.,

is

If

is

nism.

in the

v'i

itself

class.

an

We

do?

the

ask

ther¬

to

come

I

then

'
we

the

widely-accepted

treatment of unequals—the harsh¬
form of tyranny. In Sweden

be

voluntarily submit either
to
opening the window or to
keeping it closed, as the case may

of

absence of coercion, we will never
understand
it,
simply
because
coercion

to

me

senters

regard free¬
something more than mere

as

to

seems

in

am

income..

mometer. That gives us an ob¬
jective measurement, and the dis¬

general

methods

competition.

hot.

we

from oppression till we
only fight coercion, but also
cooperate, so as to make it un¬

of

And

consume ac¬

thoritarian

au

success

of

subordi¬

est

It

I

objectively-deter¬
mined fact exists, and we open the
window by
mutual consent. If,
however, some disagree, what do

safe

strikes

the

agree,

never

freedom

Renais¬
Magna
all three

and the

cording to one's tastes.

unfree

an

regimetation, articula¬

the

to

as

arbitrarily deprives him

In Russia

,

"

illustrate.

me

too

necessary
to
repress
violent
clashes of interest and widespread

his

of

which

characteris¬

control, or not—
great trouble with

form

a

that

of

essence

"production-for-service,"

price

collectivism, equality means, not
equal opportunity, but uniformity

can

equilibrium,

follows:

not

anti-social

free¬

as

what not to do. We will

us

trol and

to

main
as

is

learning,

rights of the in¬

analysis of instinct and reason,
I fall back on empirical evidence

in the midst of

which

fa

Humanistic

Charta in politics.
headed up in the

my

midst.

our

organization

of

classroom.

we are apt to think of
negative and always telling

as

under

The

semantics may. call it.
If you
are
not convinced

Fascist

some

in

sance

free economy is free equilib¬

a

whatever

they

nates the individual to central

"objectivity"

Only

under

are

we

lectivism,
social

expect large groups

can you

individuals

Let

is that

us

it

One

of

scientific laws exist.

(1) Freedom Is Positive. It tells
us
what to do in order to
stay
freedom.

the

determined

sub¬

group or discriminates

tics of freedom

exist in

accept rules as
being true and valid in an ob¬
jective sense. Only under freely-

1

government

a

dom,

assure

ideas

which

to

worldwide experiment with col¬

a

aspects of freedom head

the

"science."

and

you can

of winning.

but

in

up

not
chance to run in

you a

the

sidizes

of

one

of

rium.

social

Today,

best definitions of freedom.

opportunity

chance to show not only what you
can

the

racy

is

order

the

—

organization. Both
these kinds of appeasers of autoc¬

word, standards make self-

a

self-determination"

regimentation.
Equal

of

determination mutual and "mutual

to

means

In

action

"order"

secure

form of

whole group.

chance,

the

in

happened^

Reformation /

religion,

—

a

economy is

chains

be
industrial

of

tion,

similar

maintain the

is

characterizes

for

return

unlikely/ to

arrived

cept

real

In

in

three things
'Protestant

the

except under
and
accordingly

being.: At the other extreme, the
very wealthy are willing to ac¬

individ¬

concerned.

are

control

Then

a

proceeds

dividual. These spelled
political
economic forces
freely freedom for : him—the
right to
at, and therefore freely vote.
But, fully as .important as
accepted, is a condition of social that,
they spelled economic
free¬
stability likely to be permanent. dom
the right, to trade
the
Without ; such
an
equilibrium, right to produce
according to
coercion is necessary. The essence
one's abilities, and to
rium

minimum of material well-

secure

entirely voluntary

standard

a

unless

ernment

that

me

the

social

people in poverty are willing to
accept the chains of central gov¬

and

of

is

freedom,
that
stability is best
served
thereby. Only under an equilib¬

idea,"
internationally
the quest for lebens-

as

industry

achieved

"share-the-

Among many, too there is the
great fear of insecurity. This cuts
two ways. On the one hand, many

much

element of self-determination.
At

degrees

many

standardization, and it is most
important
to
understand
how

find out

can

best. This

are

the

—

raum.

of

there

have

de-1 wealth

main

our

distribution

of

against rulers!

tunity. Under conditions of free¬

;

are

fair

"standards.}'

are

Thursday, March 27, 1947

of central

con-

v

\v;.

values

democracy
a

standard
A

the

THE

reform. The func¬
is to measure ob¬

4rol and social
tion of money
jective or free
the

•-/

163 ^Number; 4580

Volume

market values ^
upon which economic
is built. This requires
money unit/
■*

monetary standard provides
only way to make money a

freely-accepted medium of ex¬

in

COMMERCIAL & FINANCIAL CHRONICLE

dealing with his environment, combat and offset 1
"equilibrium economics," propaganda and the pressure-"value,. economics," so-called group activity of those who seek

VJLV/XX04 '

.

its value.

what

a

f» A VM A

m.

•

.

free

of

implemented

businessmen

against:.

a

of trained economists who are
above suspicion of bias or prejudice. They must aid them in their

Economics

need

more

demand and supply.
in

opinion, the American
Association,
and
its
publication, "The American Economic Review," have for some
years been largely dominated by
an element which is opposed to
my

Economic

..to organize a

and

to

represents a closed mind as
possibility of basing eco-

the

radicalism apd pressure nomic life upon a system of free
,Jv

'V

v

-O ^"7

efficiency and penal¬
izing inefficiency, thus insuring •
the maximum quantity of goods
available for distribution. If any¬

rewarding

down,

domi"ated by the same group.

as

supply,

made

Economics Separate From

nomic values and ethical or politi¬

is apparent, when you
WJUIUI1 VUU

to the end that eco¬
principles may be truly
scientific. I mean no elimination

cal

the

are

values,

nomic

by men in their capacities
and producers. Un¬

consumers

of abundance not

excesses

the

than

better

There

two

are

excesses

v
;
aspects

scarcity?
-

v«v

reflect that nobody has any idea
what wages ought to be.
Some

doubts the truth of this state¬

one

ment, which by the way is usually

all the conditions

and

to get an adjustment between
and supply, that is be¬
tween different individual choices

.fWCiv«
sider the wages-price oituauuu W- Ethics and Politics. All this insituation to-.
dav. Thpfntfiitv of
day. The futility nf the whole dis- I volves a separation between eco

cussion

incentive to

demand

<b.)

is that it maximizes the
production, both by

system

way

individual choice. In too many of
our leading colleges and universities, the economics teaching is

Interest, Profits, and Money. Con- »
TTT.^,

covers

demand

of

scientific study of the forces of

.

accepted even by the radical colwhich lectivists, let him look around the '
leads'to a completely managed world today. Where does one find
economy,
including a managed the problems of shortage and
Certainly not in the
currency and control over wages. scarcity?
Such management misdirects and countries where free enterprise
reduces
the
main incentive
to prevails. There one finds people
production. Recently, we have worrying about the possibilities
of overproduction and temporary
seen how it tends to prevent those
increases in output which might disequilibria.
Even this is, I
minimize the effects of inflation. think, chiefly the result of a re¬
mediable imperfection in the profit
The price system is the only
non-arbitrary
and
non-coercive system. But even without reform,

unless it

endowed "chairs" and more effective publications, to encourage the

breaks

control

Central

wisely

his

productivity, that is to the value
of the products he has to sell.
Nor should it be forgotten for
one moment that a cardinal point
in favor of the free enterprise

democracy, that is out of the
question. Politics is bound to in¬
studies and teaching, and, above trude. Pressure groups arise. In¬
all, in maintaining the research efficiency in such matters is gen¬
and publications which are so im- eral, and "squeezes," maladjust¬
portant in the development of ments, and discriminatory bonuses
or penalties become the rule.
science.

private enterprise.
v

approximate the results
of competitive markets. But in a

the idea of economics as a science,

•

tends to be, in proportion to
can

to

plea to you

»

bureau

prices. Even if an allexisted, he would

have

private enterprise.
.

make such

true,

value. They must have the advice

groups • in 'American politics, in
order that we,, may preserve free

I

broad,

a

government
dictator

Values.

make

by

No

wise

.....

I want to

1

social-minded theory of economic

ecQnprnic science based
freely-deter-

mined market

such individuals to be worth.

But this they will never do unand until their efforts are

the" study of
,,fT
—

ipon
upon

w

less

ideology of sound business, in
country, is found in the

laws

.

,

or

-I

■

free

a

worth. By the same

llVlAM

Certainly there is
automatic

for

—

-

_

basis for the stability of
Today, we do not know
paper dollar
is really

token, we do
not know what quantity of gold
there, should be in a gold dollar.
Incidentally,, we do not know
what quantity of paper may be
issued, and for safety must rely
1 VM-1
v. i
upon some indefinite feeling that
already we have too much.
A standard means reserves for
the currency, which set objective
e
and automatic limits to currency
.
issues.
This is essential to con-

or

,

Ti-

standard for money provides

the only

basis

.

prosperity now.

A

no

ir.«wvuo

_

•

our

too low

demand,

and

'

when.they represent equilibrium. The profits system is
iiuiu d
because'it proceeds from a COE
consid-; to overthrow the system of free values which are a free balance the opposite, and provides the
ersiihn of the causes '
—xJ
'
eraclon nf
(of free in-1 private
I propose that between the desires of individual means
llixil
whereby free men may
_enterprise.
dividual valuations.
'
| they delegate to the most compe- buyers and sellers. There is only function as producers with the
It is no mere coincidence
one way to get
assurance
that they will always
that, tent of their numb
such prices, and
as
the world has moved toward
that is to let all productive in¬ be tending to establish a balance
devoting not part ol
collectivism and the coercion of their entire time
dividuals "vote" in free markets between supply and demand. This
individuals through managed the resistance, and to
ixioxiagcui me
devel
develbping by bidding or asking for goods is true, simply because the re¬
economy, our chairc of economics an effective counter attack.
—economy, our chairs nt
according to what they seem to ward of the free enterpriser is, or
,>

What alternative is there?
A managed currency. What is a have
become more and more filled
managed currency? It ik a sys¬
by economists who have no confitem of making the citizens use
dence in democracy or
competithe debt of the sovereign —• his
tion.
Such men are filled with
notes or his bond-secured de¬
essentially egotistical notions
posits.
•
' '-V.
about their ^ability to plan and
There is just one simple ele¬
control
what they always call
ment in the gold standard, namely
"the economy." They always acthat the money unit has its value
cept the idea of a managed curdetermined by a given quantity
rency.
^
of pure gold, through free con¬
Today the/ condition of Ecovertibility and a free gold market;
nomics is pitiable, as is illustrated
In any free economy, this prin¬
by the fact th^t so many econociple applies under any circum¬
mists prefer to say "I feel this or
stances.
Under two
conditions
that," rather.than "I ttynk thus
only is it non-applicable, namely
and so."- Accordingly, business has
(1) war and (2) Communism. The no
logical .defense.
It has no
gold standard and free trade were
ideology of^^cience to counteract
largely responsible for England's
the ideology ..of collectivism.
It
great 19th Century prosperity.
has no "party 1 line" of its own!
Similarly, they can contribute to
The
change.

affected by their holding powers.
Prices are right —• not too high

This is
or

1683

profits system which
thoroughly understood

of

of the

must
til
both

be

UU
uy
by
system, individual
consumers
vote for what they businessmen and by the common
want
merchants
to
carry
and people, if that system is to endure,
manufactures to make, using dol- One of these is the nature of the
lar bills as ballots. At the same function performed by the enterotv/UU

the

der

price

-

manufacturers

time,

and

*

priser. The other is the necessity

mer-

chants run for the important of- of "differential returns" to supecost rof; living, s^me : take scientific. I mean no elimination fice of supplying the millions of rior enterprise.
Enterprise is the cause of prof¬
of demands to "create purchasing profits, some take wages in a past 0r lack of consideration for ethical consumers with what they want,
its.
If, therefore, we do not un¬
power"
by - writing
up , "new. period. Nobody-jias a true theory and political matters. Such values, competition for money income
de- of wages which is applicable as a however,
derstand it,
are highly subjective
we
are unable
to
money" in the shape of bank de..
being the means, and cost of pay¬
oractical
ffiiiHP
in
HpWand indefinite> They can afford
A standard

removes

the threat take

government debt, practical guide^ to determining
what •:—| no basis for general agreement. To
wages oyght to be in the
'j
-

posits based on

(Incidentally, a standard ' thus
i»
X
prevents the use of government
A

.

—

_

——

steel industry, the automobile

in- mix them therefore, brings con¬
with economic considerations,

other particular

of buying dustry, or in any

and

rolls

being

materials

define profits.

their

Thus it is vital to
the function of

that

understand

campaign expenses. Thus produc¬
tion and consumption
are gov¬

enterprise is to make business de¬
cisions and assume ultimate re-

freely-determined prices
LAOOUIUV. ultimate IC*
which shqw what consumers think sponsibility therefore—decisions to
: the votes
of the people, and our
j ample, suppose we are considering
to find out,
it worthwhile to buy and what buy and to sell, decisions as to
/experience in the past decade in¬
When
the ^nation needed
an |some large expenditure for pub-'
dicates that the only way to keep
producers think it worthwhile to organization and direction—decisions upon which the success or
;omic bomb, experts were-called 1
...—-i—
sell.
so-called pump-priming from be- atomic boqib, experts were-called lic
ine economist to find out what its
failure of the business organiza¬
coming vote-buying is to have the together, and ;;jri time the atomic the economist to
A part of the price system is
tion
depends.
Such decisions,
oflvprnment finally" take nvpr and bomb ti7Qo fdrthconriing. Whein you effect will be on production, and
over and hnmh was ipArfLAArwiYirt
Pnvprnmpnt finallv
the competitive system. A funda¬
***
whether made by the state as an
own the
pump! Then everybody want to prevent/the disruption whether the income it brings will mental definition of competition
of reconversion and seek a wage hover the costs. Then we should
enterpriser or by private busi¬
would have to work for the gov
is free individual choice. This is
M•
A 11CA m*
nessmen, must be made.
Thereformula, you call in vain. This go to the expert in ethics to find
Jernment.)
what gives prices their validity
out whether the scheme would
credit for the purpose

*x.—_a..,

*

-

^

J

-

—

case.

Nor

fusion

know where

do/you

and

uncertainty.

For ex-

erned by
^

workf^We^raldlirst1, A
o f?nd out whf t Its
Unci n.Vt what tu

I
I

■

.•

—"

7J

—— —

—

;

insures

standard

money

will not be

that

the is ~ because "we^have"no"accepted

based on debt, economic theory. all the collective
v s'
•
You can set.iiif
.........

thatthe currencywill
a mere monetization of the public
debt. The leading currency man-

notkje

and

t

Possible discriminashhefnes m the world, tion in taxes to nav for thp nnhiir
works. Finally; we should go to
wrivv"u lDaQ' * 811(111 as
• »»
"■

it'crnfn.incf'' onftdfihr»«*e tn fVio

bargaining
but you willhave-

them'

smoothly/unless you have
criteria of what
bargain—a fair
commercial hank- wage;
/';
Then, too/there is the false doc-

today are precisely in the work
position of John Law in the days some accepted';
of Louis XV, and their attitude constitutes a fair
agers

toward the free

a

mere

Any

fiscal

than

system
standard is an

a

one

"if"

government limits
and if there is ade¬

system. If the

to
b«»

zero!" As long
as this Keynesian doctrine pre¬
vails, individual saving and in¬

reduced "nearly to

/ >

other
on

—

reducing it to trine that interest has nothing
agency of the gov- do with investment, and can

involve

ernment.

based

is one

the country

ing system of
that would

.involve acts that are wrong or
bad, such as possible discrimina-

When

are'in/jeopardy.

vestment

au

a

ouivuwiv

'

Pay

until you free
pjay
forces 0f demand
individual choicer Such economic PriyafG enterprisers show a fair and SUpp]y jn this statement, note
principles are scientific in that
well that "demand" means a sumdividuals "the/ie/rerof/he'dnthe potential
they seek to explain the cause-I theory, including the theory of j matioiTof who
nomic

economic value,
of demand
and supply as lying in the nature
of man and the choices he makes
the

causes

of

considering the forces




I Proills' is *to
This -

- ■

1

are

-

•- -

summation of
scarcities that affect

'

:• ^

j

s

.

.

is

which

me

1

—

attributable

to

enter¬

[the asking prices of sellers, as

•

1

_1

-

rt

i«

J

supplying the wants of consumers.
In Socialism the idea is
from
each according to his capacity; to
each
according to his needs.
,s
Thus Socialism separates the mo-;
tivation of the producer from the
listHhnHnn of income orvirtntf ■fVip
distribution nf irtr>nmo among the

pr0fits. If, then, the state, through
coercion in the form of discriminatory taxes 0r

otherwise, tries

take good profits away from
g00d businessmen, good business^0

men
duction
.
••

not do their best, probe restricted, "and

will

and gives no assurance everybody suffer.
Conclusion: Free enterprise in
between supply
' :•»
free' markets,
subject only to
In recent years, Russian Com- well-established ethical and poestaC)Jlsned ,
munism has altered the slogan to
, rp«ulationc.
read "from each according to his
g
(e) Free Markets for Capital

consumers,
of

any

balance
V

•••

auons.

capacity to each according to his
work."
This, however, leaves a
fundamental inconsistency in moivation since work appears to
mean
nuuiing
wuii
niiic
puL
AH
nothing but time put in
in connection with some activity
dictated by the state, and thus has

nothing of the buyers, as backed by their earned
common acceptance of fiat cur- purchasing
power. Similarly, no relation to production in the
rehcy, and:.debt management.
. * "supply" means a
economic sense, or to the ecoJ
So /I 'propose - that^ our enter- the costs and
nomic value.
•
1 .11!
*
. *
a^
xt. — — —I—- —
—-—2 ———
11
prisers take intelligent steps to
say

-

«

the publlc

-

.

relationships of ecolife; they seek to explain

wv

*•»

having a
prise, whoever may exercise it,
special significance based upon and which tends to represent the
- student- of government l or our confidence that such values value of the enterpriser's serv¬
~
the
reflect the ideas of buyers and ices.
If the enterpriser is to be
poljtics to find out whether socia.
sellers as to " the relative impor¬
stability would be weakened by
free, profits must exist as an in¬
tance of the commodity concerned.
not
incurring
the expenditure.
dependently-determined share in
There
is
no
alternative
but the social income. Most emphati¬
Then the conclusion may be that,
monopoly or government price cally profits do not tend to dis¬
even
though no unethical prac¬
tice
would
be
involved,
and fixing, and government price fix¬ appear. They may be turned into
though the public work in ques¬ ing is merely monopoly practiced losses and be borne by the citizens
who are, as it were, the stock¬
tion
might tend
somewhat to by the state.
(d) The Profits System. And so holders of the state. (Or should
strengthen the political solidarity
of the country, the results would we come to the profits system as one in these days say, the bond¬
not be worth the costs as set a part of economic freedom. By holders?)
That does not change
forth by the economist. Or the this we mean the system in which the general nature of the problem.
As to "differentials," they are
ethical and political conditions the production and marketing of
reward
oi
enter
might warrant constructing and goods are determined by free in- the reward of superior enteroperating the public work at an dividual initiative working under prjsers. Differences among enter
economic loss. However that may the price system. The profits sys- prisers are as sure as differences
tpm requires that producers shall
tern rpnnirpc fViaf
among horses Or dOgS
Or politicians for that matter.
They are
be motivated by the hope of gain
thought
to
mean
omist who conceals his political according to their efficiency in bound
uuuuu
to
mean differences in
aitierences in

and
conditnat may
competition. In be, nothing but confusion comes
seeds of de- out of the thought of an econ-

and-effect

.

^re' ^ hold that profits are simply

market is competitive, we

established in it as

are

the profits
generation,
quate investment and production, an increasing humber of academic
and if the currency is generally economists
have been teaching
~
"
0
accepted at a suitable rate v*. ex- ~~~~~~~
of
change
for products, r anything that profits tend to disappear,
would
do
as
money. But one that they exist only under
economic ioss. nowever
might as well say that if we did tions of imperfect
not die, we would live forever! this doctrine are enterprise
the
struction
forand
and ethical bias under the guise
The only economy in which it
profits.
of a mere economic judgment.
makes no difference what is used
Do
you knew anything about
for money and in which a so(c.) The "Price System."
this condition?
Have you done
callPd money of account," serving
anything about it? Yet, you are Another aspect of the return to
merely as tickets, may function the enterprisers. You. are the ones economic science and freedom is
successfully, is a completely man¬ whose function I seek to explain the restoration of the price system
automatically regulates
aged economy; tfcat is, a totali¬ when I explatnfhe necessity prof¬ which
tarian state.
its, and justify the existence of equilibrium of economic forces.
This is the system of competition.
differential., profits, that is profits
2. Scientific Economics
The i second great essential to which are low at the "margin," The price system is one in which
the preservation of economic free¬ and high .where superior entre¬ the relative importance of things
is decided, not by votes, but by
dom in this country is a return to preneurial ability is exercised.
the scientific principles of Eco¬
;Free private enterprise never is economic value resulting from the
nomics-—the acceptance of eco- going to be safe, until you free
.. .
.f
vaxut. x^auxtxiig uvui uxc
nomic principles based on free Somg to^. be safe,
£ree
the currency,

Or, again,'"Consider
situation. For nearly a

a

»

*

*

A

_

j

_

4

Time forbids a discus¬
other essentials of free
economic life: (1) Free capital, or
capitalism. This means freedom
_'. " " , .
, "
r
"""

and Labor.

sion of two

of individuals to -save and lr/vest,
W1J^ a free determination of the
value of their services in free
rnoney

markets. (2) Free labor, or

A• . ._ _
— .—
(Continued on page ■+ «« ^
1684)

THE COMMERCIAL & FINANCIAL CHRONICLE

1684

tion,

Free Markets and the

progressive taxation has
too far.

Thursday, March 27, 1947

our

gone

Acheson

Explains Greek Situation

Conclusion

Free

In brief

Enterprise System

that

system. This means a
motivation of free labor according

to the principles of free collective
bargaining without monopoly on
neither side. Both free capital and

free labor are based upon a

sound
analysis of the nature
and functions of labor and capital.
Capital must be kept clearly sep¬

economic

The

idea of land.

arate from the

idea of labor must be kept

clearly
separate from the idea of enter•prise. Such necessary separation
can exist only with the aid of a
sound economic analysis of func¬
of costs

and the true nature

tion

if production.
(f.)
so

companies

wages

Free", Government. And

A

we

come

which

are

the final

to

analysis

our

'

»!

of

conditions

those

essential to

most

now

point in

the restoration of economic free¬
in

dom

this

This is an
understanding of the true nature
country.

a^nd function of what

call

we

ernment.

By

mean

association

gov¬

"government"

we
interre¬

possess,

be

may

free

markets

and

aid and there is

free

the

,

pre¬

faced

individual choice.

vented.

We

want

partly because
Third, I would put the estab¬ we want
them, we being free
lishment of rules for fair compe¬
men;
and partly because both
tition.
reason and empirical evidence in¬
I think that in addition to these dicate
important advantages oyer
primary functions of government, collectivism.
we may
In order to attain them, we need
add the promotion of a
social point of view through edu¬ merely renew and
perfect the in¬

not

of

social planning, central
control, or whatever other stock
phrase may be used.
The big fact is that men are
Afferent. They have different in¬
terests and different productive

capacities.
liave

they

although they
interests in common,
inevitably
led; into

are

clashes
men

the

Thus,

many

of

are

interest.

to return

only

way

to

different

If

their freedom,
compose

their

Long

...

.

'

what

should

do?

free

a

know

I

of

It

is

essence

government

nothing.

choice; in

is

individuals that count, and there
is no evidence to show that a di¬

duction,

free

govern¬

He

-emerges.

soon

' becomes

economic dictator since his

an

politi¬

cal interests lead him to take their
•

balancing of individual wants
and costs can be attained through

allowance

differences

for

in

re¬

in free markets

seen

as

according to different pro¬
ductive
capacities, which is so

sion,

awarded

operation is rigid
and slow to adopt itself to changes.
Think

of

the

committing the changing eco¬
nomic life of dynamic society to

a

mined

by

which

each

which
time

individual

economic

they

•

are

(g)

comes

importance, the government

may

step in.

viduals
do

the

are

Or whenever indi¬

led by self-interest to

things which
interests

government

run

of

counter

to

As

paid out of taxes.
rules

Perhaps next most

is

money

a

standard

standard for

a

taxation.

of

for

our

Three sound rules

or

the

abuse

lies such

as

of

no

one

tribute

should

our

taxa¬

are

its

so

earn

as

taxes

necessary

ment,

the

natural monopo¬

railway md telephone




be

forced to

much that he

con¬

comes

as he can; (3) when
required to support un¬

functions

not * generally

consistent

with

the

freedom here stated,
cessive.
*

Like

our

of

govern¬

accepted

as

they

are ex¬

many

:

state was threatened
by several
thousand armed men who
defied,
and continue to
defy, it in certain
areas of the
country. This situa¬
tion in part grew out of the
arm¬
ing of guerilla forces during the
war

of

ons

and

liberation. Many of these
people have retained their weap¬

illy

certain

for

bands

now

use

fighting to resolve the
differences that might

and

charged before the Security Coun¬

publicist, for
p h i 1 a n thropic serv¬

cil of the United
Nations that the

rendered

the United States.

The

order

is

named to the

bers

the

of

A

r

k

.

peaceably settled.
Government: has

commission

appointed
Council of the

Security
Nations is

now

charges.

;

•.

more

economic

life.

'It

would

also

nobility

istration.

Great

extended

very

Greece in

Britain

relief

forts of
and

Co.,

Michigan

substantial

Bank

man

to their staff.

also

aid

to

effort to supplement
and reconstruction ef¬

UNRRA, and to organize

equip the Greek Army.

rent

in

;

The

rule

of

armed

an

minority

would fasten itself* upon the peo¬

ple of Greece,

v

In this critical

■

situation, Greece

has

urgently asked the United
States for help. She requests fi¬
nancial assistance for the follow¬

istrative, economic and technical
personnel to
utilization of
aid may

the effective
financial

assure

whatever

be extended her and to

help her to begin the'reconstruc¬
tion of her own economy and pub¬
lic

^dnalqistratioh.

/

The situation in Turkey is sub¬

stantially

different,

also needs

our

Army
the
and

has

but Turkey
help. The Turkish
mobilized since

been

beginning of
this has put

War II

World
a

strain

severe

the national economy. Dur¬
ing the war Turkey received sub¬

upon

stantial

from

Great

United

States,

assistance

Britain

and* the

which- helped
load.

her

to

this

carry

;/

'

_

Today the Turkish economy is
longer able to carry the full

no

load required for its national de¬
fense and at the same time proceed with that economic

develop¬

month

is ; scheduled

Greece

and

reasons

to

of

British

of

which

stop

business

assistance,
you

are

The cessation
Greece

means

to

crisis.

Unless
some

keep
country in sound condition.
some help from the; United
States,
and
further
assistance
which

Turkey

help is forthcoming from
other quarter, Greece's econ-

be

may

to

able

negotiate with United Nations fi¬
nancial organs, Turkey should be
in a position to continue tile de¬

velopment of her
increase

while at the

ing

her

own

resources

productivity,

her ;

time maintain¬

same

national

level

defenses

at

The

present

include

our
or

foresee
do
have
we

any

not

troops
We have

sending

Turkey.

been asked to do

so.

We do

need to do so.
intend to do so.

to
not
not

And
We

understandings
with
or Turkey, oral c
possibly carrying away with it
otherwise, in regard to the send
and *1+1troops to those countries.
its power to maintain
order
Our military missions to Greec
and the essential services.
and Turkey will be small one?
"jformatiomreported to us whose task will probably be by the Greek and British Govern- find
out the local needs for mih
ments in regard • to
conditions" in tary
equipment and to see to i

omy.wiil quickly collapse,

very

no

either Greece

In/i

With Frank Newman Co.
(Special to The Financial Chronicle)

MIAMI,
Stucker

has

FLA.

—

Kenneth

joined; the

staff

B.

of

7+i

Greece has been
Frank D. Newman Co., Ingraham
I reports we have

^progressive" educa¬ Building'

a

her
f;
proposals do not

necessary to protect.
freedom and independence.
>

Greece

of outside aid

immediate

which is necessary to

the

and

end of this cur¬
outside assistance to

aware, is to be discontinued.

Chronicle)

National

Admin¬

has

However, at the

King & Co. Adds to Staff

Building, have added Rollie Work¬

Nations

an

the

,

RAPIDS, MICH.—King

' In the event of
collapse and government
paralysis, these bands would un-

With

for

GRAND

already fighting.

economic

ment

ings

&

The armed bands in the north,
Communist leadership, are

sistance from the United
Relief and Rehabilitation

of

arms.

probably

mean the end of
Greek freedom and independence.

since its liberation Greece
has received substantial relief as¬

UNRRA. is going out

(Special to The Financial

than two

years

by rank¬

Greece

their coats of

the

United

'

■

Italy having at least four quarteron

by

investigating these

In the period of

category of Justice
only to mem¬

ancient

be

r e e

training in neighboring countries.

~

headed

G

insurgent
groups
operating
in
northern Greece are assisted from
outside Greece by
supplies* and

,

principles of

through

death of

resultant scramble for existence;
and
,; v;/;,..
;
4. The authority of the Greek

Cross,
Lui gi

to

much

are

required.
as

of

very

throughout her territory; and (3)
to enable her to begin the process
of reconstruction by
putting her
production facilities in order. (4)
Finally, Greece requests the aid
of experienced American admin¬

and

and

been

nancier

-

so

that it will be able to restore order

impaired

had

filtration of undesirable
elements,
demoralized by inflation and the

cer¬

feel that it is not worth while to

majority,

waste of limited
natural resources

country

a

of

gravely

system

The

tain: (1) each and every free, citizen
should contribute some direct tax

is

TFhus, anti-social acts such

is in-,

the

The Greek civil service

starvation

which is accorded

Sound

important to
tion.

And

taxes!

to

the

action

reach

This

personnel, undermined by in¬

been^destroyed;

3.

administrative

its

;

services.

had

otherwise

payment to the support of govern¬
service of fundamental and
gen¬ ment, no matter how little;
(2)

eral

rapidly

very

ing purposes:; (1) To: enable her
to carry on essential imports of
food, clothing and fuel necessary
for the subsistence of her people;
(2) to enable her to organize and
equip her army in such a way

had

Motivation in government is not

-order.

a

would

dependent upon imports would be
paralysis of the government and

r-.

>

catastrophically impaired Greece's
ability to produce, either for home
consumption or for exports;
2.
Greece's entire fiscal system

political

in

•

liberation.

Criscuolo,

one

efficiency

Greece's

Physical -destruction

them

ices

the

four

New York fi¬

tends to

casts

invasion,

found to exist at the

.were

of

1.

<

individuals to perform
adequately

able

astronomical: figures.
flation. Its result in

re

upon

system of voting in

a

German

of cruel

Grand

so-called "five-year plans"!
It is a disadvantage of govern¬

that it necessarily

B

of

of

the value of their

motive for;

tries If imports should cease, the
price of such goods as are avail¬

,

highest deeoration, that

ghastly limitations

the

should like to focus your at¬
tention
upon
four
conditions

-

Government

-of protection and preservation of

no

$14 millionmonth's imports

one

under

the Italian inva¬

came

I

'

Whenever there is

only

were

enemy occupation,
scorching of her earth by j doubtedly increase in strength un¬
treating enemy. Perhaps no til they, took-over Greece and in¬
other country in the world has
stituted a totalitarian government
suffered greater destruction of i s similar f
to. those prevailing in
physical resources than Greece.
countries to the north of Greece.

ing members of the Roman nobil¬
ity, among which are General
lo preserve free economic
life, conductive to efficiency, since
Sebastiano Visconti Prasca, Grand
is to preserve free political life.
government officials have great
Master, Prince Enrico Barberini
What then are the functions of powers,
but little responsibility and Count Celio
Corsi, and others,
sa free
government?,
;.r, tor their acts, .and .are, subject to many of whom are also Knights
First I would put the function no close or continuous testing of of
Malta.
Mr.
Criscuolo
was

the provision of
be called "public util¬
ity" services, such as a monetary
.system, highways system, educa¬
tion,
sanitation,
and - the
like.

the cir¬

and the

the

true

to

of the administration.

may

civilians

of food and other essentials
from
the United States and other coun¬

more

And then

years

Word has just been received
equality of op¬ from Rome, Italy, that the
portunity and to freedom.
Gov¬ Capitular Mil-•
ernments pay too little for big itary Order of
men, and too much for little ones. Concordia, hasK
essential

lation to

Second,

for

can

Greece

I

By Roman Nobility

wards

have,

what

eco¬

continue for
only
Two weeks ago the
resources
available I to

dollar

agreemen's and other instruments ;

for free enterprisers.
r
: ,vJ,
What does one do when one has

rect

wealth

away
from
those
who
to win the votes of the
"have-nots." Thus the only way

imports

the army under

enough for

of Nazi economic warfare;

ballot, regardless of his tastes or
to the Italian
capacities as a producer.
It* is
Luigl Criscuolo
people. This
supported by compulsory levies
honor comes
upon its citizens, which we call
to the recipient just before his
taxes, levies which are made re¬
60th birthday on March
25, of
gardless of the economic results
which 58 have been celebrated
attained, and have no direct re¬

democratic

Greek

into

few weeks.

a

poverty of natural resources
so
great that she has always

needed

prov

volved

they break down into
warring classes or pressure groups
—then
the
political
dictator

for

is

individual

consumption and

mix political and economic values.
Government
policies are deter¬

ment—if

inquiring

.

regula¬
tions. If, however, they lack the
intelligence or self-control to ac¬
cept the standards that are in¬
a

and

Greece

war

Greece

the

,

ceptance

in

Essential

.

ment

government

the

before

of

nomic conditions there.

hard time making ends meet.

a

invitation

cumstances

imports than sne
cation,
and the
assumption , of stitutions which we know very
could pay for with exports. Only
leadership in technical and social well, the chief economic ones
by hand-to-mouth contriving has
research.
I see no objection to,
being a standard money as a part she been able to maintain a
pre¬
and possibly much advantage in, of a
price and profits system pre¬ carious balance in her interna¬
any government experimentation served by a democratic govern¬
tional economic position. In the
which the taxpayers are willing to ment which exists
by the consent past much of her
export trade
support,, and which depends for of all the governed.
naturally went to central Eu¬
its
appeal On'f Convincing / free
Here is my analysis in a nut¬
ropean
markets, particularly to
people that the results attained shell:
r o;
'
Germany; during the thirties she
are desirable.
We have a good thing in our
was forced into closer dependence
:
But, aside from these fields, American economic system.
on
Germany
through
clearing
Its

differences is through mutual ac¬

of

a

Her

Criscuolo Honored

oconomy,

as

the

Government

history and a back¬
Greece's difficulties are
But they have become
a
result of special cir¬

new.

had

,

It finds expression in a managed

mission which has been in
at

cumstances.

any

of both Fascism and Communism.

has

acute

a good thing? Does one throw it
Wreck} it by radical
system jof, voting. - Does any¬ away?
lated individuals, existing for the
one think that by a Gallup poll changes?
Fundamentally alter it
welfare of those individuals, and,;
we could run the economic life of
by revolution? Or stall it by mix¬
being potentially perpetual,, for the
nation?
It
is* impossible ing it with inconsistent foreign
the welfare of their posterity. As
through government action to bal¬ parts that don't fit, or throwing
.already stated, a government is ance
directly the satisfaction of sand in the bearings?
free jOnly; when its citizens are
individual human wants against
No, one does none of these
free. It exists for the sake of its
the
dissatisfaction of individual
things. Let us cling to our good
-citizens, and in a democracy de¬ human
costs.; (For example, indi¬ system, for our own benefit and
pends upon the consent of the
viduals who pay most for the im¬ our children's. Let us repair
any
governed. *,
V
/,
provement of some watershed may damages suffered by the original
The curse of the past generation live
thousands
oF miles
away. organization. Let us perfect the
lias been the tendency to accept Too
often, a majority of those who design, so that it may function
the idea of a government as a sort vote taxes
pay no direct taxes more efficiently/ Let us not for¬
of entity—the idea of the cor¬
themselves.)
get to clean out the dirt from the
porate state." This results in sub¬
Again, government action inev¬ bearings, renew faulty parts, and
ordinating the individual to the
itably leads to so much stand¬ oil up the governor.
.state, and making him nothing but
Then let us turn on the power!
ardization as fairly to be called
n dependent part of the whole—
regimentation.
It must be broad
■as if
the government came first
and
general,
dealing with the
nnd then divided itself up into in¬
whose nation or some great class
dividuals. This is the tendency of
of the people.
This prevents that
the political and economic thought
an

and from the American economic

x—

ground.

these

other country

no

,

.

which they may turn.
The problem with which we are

to

enterprise system are essential
parts of freedom itself—of free

(Continued from page 1683)
the

(Continued from pagel65J)

conclusion, I would say

odi^dboraied- by

that needed material is delivere

revived from the

and in the hands of the prope
authorities; Our missions will con

American^ Ambassador in ^Greece

|

Number 4580

Volume 163

only .'of .observers

s:st

*

'

visors.

ad-

recently

has

Government

We do not know
what the report
con .am
or ; the
action mai
may be taken by the United Na¬

without stretching out

will

.•

there ioi
The British

? liberation purposes.
*

and

;■

landed

remain, wno

i

/'■„

•

Greece, some British troops

"• In-

/

THE COMMERCIAL & FINANCIAL
CHRONICLE

ir—..

i it

|

• an-

tions upon it.
heve

tnat

this

m

We

hope and

United

matter

reacned

be-

Nations act.on

will

in

result

then

.

,

asked

that the presence of
will mean that the British
Government will direct the pol¬

forces

icies of the Greek Government
while the United States supplies

■j

economic

necessary

| jiot the

aid.

This

is

The United States has not made

agreement with the British
(Government with reference to the
any

iimplementation

v

of

the

proposed

7 plan of assistance to Greece and
Turkey. If the proposed program is

authorized

7

by

the

Congress,

implementation .will

through

out;

be

its

worked

agreements

with

Greece and Turkey and with the

aid of United States personnel.

,7"

wish

I

reiterate

to

that

United

disorder

and

her

we

sit here

The

v United States, in undertaking aid
| to Greece and Turkey, is not as% suming British obligations or un-

economic

United

Nations

ticular

Greece

with

ment

promote

to

stability

in

East

generally and thereby to pave
the way for peaceful and democratic development.

•7

In the present
-

proposing

7

instance,

respond

to

requests made to
Turkish

and

-

'

our

certain

by the Greek

us

Governments, and
designed to assist

program is

7 those

countries

nounced

asked
•*

we are

to

in

certain

We

ways.

have

this establishes

whether

a

pattern for all future requests for

recently sent

Greece

to

that

in

each
case

individual

we

case.
would have to

g with

foreign

American

policy,

whether the request for assistance
is sincere, and whether assistance

the United States would be
effective in meeting the problems

; by
;

^ of that

It cannot be

country.

as-

7 sumed, therefore, that this gov¬
ernment would necessary under? take measures in any

other

coun¬

try identical or even closely sim7' alar to those proposed for Greece
and
'

Turkey.

7:•

situation

The

7 Turkey

of

confronts

alternatives/

two

Greece

with

us

We

7 ;

.

can

and

only
either

grant aid to those countries or we

-

can
deny that aid. There is no
possibility of putting the responsi1 bility for extending the aid which

1

Greece has asked from the United
States

-

other

some

on

nation

or

y upon the United Nations.
This

*

consider

that
the

.

the

.

the

specific
•

Greece
United

when

specific

confront

that

.

clear

becomes

Greece

we

problems
today

and

kinds

of- assistance
requested from

has

Nations

on

the

one

hand, and from the, United States
y on the" others"

13

llet

us >

consider first the prob-

/

borders/ Greece has charged be-

'the'

y

Security Council that
armed' bands operating within her

b

territory

-

partly
supplied,
trained; arid given refuge in YugoP slavia- Bulgaria, and Albania, and
'
thati these bands are moving back
are

.

r

forth

across

the

border.

Greece has asked the United Na¬

il

a

suc¬

the

United

Kingdom

watched

throughout the vast

will

But it

other country has absolved

any

responsibility for fos¬
tering through its own action the
same objective as the Charter sets
The

third

Greece

is

problem
of

one

nel. Greece-has linked

the

serious

most

of

tragedy

it

possible failure

would

quickly be the lot of neighboring
people striving to maintain their
freedom and independence.

this prob¬

need

and

ment

lem, and

It

■

expert

feared

is

believe,
think Congress believes,

that

the

we

some

Since

gested

that

the

if

Greek Government.

no

In the

•

longer range, the United

As

to

the

better

first

than

various parts of the economic and

ent

financial

problem in Greece and
Turkey. We are giving serious
study and consideration to ways

or

primarily
from the United States. The United

in which the United Nations may

fied.

Nations does not of itself possess

the present emergency is past.
I have said that the*two altern¬

essential

the

the

and

would

an

recommends
and

<

The

is just

now

Social

atives

Bank,

completing its

Europe is still in

its

early organization stage.
It may be that at some iuture
time the United Nations will be

organized and equipped so as to
render emergency aid to member
s'ates of the kind now needed in
Greece and Turkey.; But as the

United Nations
and its related organizations are
not now in position to extend help
of the kind that is required. Even

President said, the

of the United Na¬
recommend
assistance to Greece and Turkey,
it wouid have eventually to turn

if

some

organ

tions should decide to

primarily to the United States for
funds and supplies and technical
assistance.
Even if the project
blocked by the
members
United Nations, much time
have been lost, and time is
were

not

tions

of certain

"

.

One hundred

^

.

objec¬
of the
would
of the
;

*

twenty-three years

Darnel Webster sooke iri the
United States House of Represen¬
tatives in favor of a resolution

ago

looking toward /aid
to Greece
which country was then striving
for her independence.

Then, too,
He said:

time was of the essence.
.v

"Mr..

things

Chairman, there are some

must

even

which,

be

determine

-

this problem

before

are

after

are

us

to

think

not

in

done

that

Greek

interference

such

affairs

would

be

justi¬

"-'V

v

The

be

doubt that it represents

no

the majority of the Greek people.
The

present

Greek

Cabinet con¬
of 8,5% ol

icy is to look at the alternatives.
are
the
probable conse¬

tains

What

the members of the Greek Parlia¬

extending, aid to
Greece and Turkey?
3
I have already indicated what
would be more than likely happen
in Greece. As the President said,

ment.

quences

of

not

however, it is necessary only to
glance at the map to realize that
the
survival ; and
integrity
of
Greece is of grave importance in

has

representatives
The

king

a

does

make5 Greece's

that

fact

mere

not

Greece

necessarily
of

form

govern¬

ment less democratic than that of

other

countries,

shown for
instance by the governments of
Norway, Sweden, Denmark, the
Netherlands
It

as

and

much wider

Consider for
of

tion

the

and south

a

The

situation.

in¬

moment the situa¬

countries

the east

to

of Turkey. All of them

Great Britain.

to Greece either to

tions

lated
the

problems of the past and of
Some of them are just

war.

emerging
nations

into

statehood.

wish and

to develop

These

should be able

and maintain free in¬

stitutions and individual liberties,
but untoward circumstances
force them

Will

these

solve: " the

may

ip the^other direction.
countries be able to
extremely
difficult

wanted

in

be needed
countries.

may

by those
final

cussion

has
they

whether

recent dis¬

In

these

of

question

word^

<w

proposals the
been put to me
contain the possi**

which lead to
quite the op*posite is true. These proposals are
designed to increase the stability
bility

friction

of

I

war.

think

of, and to further the opportunity
democratic

development

countries most important to

two

the

acts

community. These are

world

not

which

lead

to

war.

They lead in the other direc¬
They help to maintain the
integrity and independence—wh«i
the United Nations Charter calls
tion.

the

"sovereign equality"—of statm
one of the principles up«ri
effort to organ- /

That is

which the whole

world

the

ize

founded.

for

'

*«

peace
'

•

NYSE Closing

Saturday

During Summer Months
announcing

In

that

the

Board

Governors, at its meeting «n
March 6 had decided that the Ex¬
of

in

develop

can

In Greece

more

a

change
days,

closing
summer

today we do not have

on

during the

Saturdays

months.

action

No

was

respect to suggestions
Exchange be closed on

taken with

that the
a perfect democ¬
the year,
imperfect democracy. Saturdays throughout
The
question is whether there this being a subject that will re¬
shall be any democracy at all.
If quire further consideration in all
the
armed minorities - that now of its various aspects.
The Ex¬

a

choice between

racy

and

an

and change is today, more than ever,; >77
gain a national institution and its far*
control, free institutions and hu¬ cilities3 are used by buyers and
man
freedoms
would disappear sellers of securities living in all
threaten 5 Greece's

political

economic

were

stability

to

and

democratic

;

come

It

to
is

an

not

progress

would parts of the United States."

abrupt halt.
claimed

that

all per^-

E. E. Burkhard Co.

Formed

present,
-•
/(Special to The Financial Chronicle)
interests to armed challenge to the Greek
CHICAGO, ILL.—E. E. Burk¬
do all in our power to help them Government are communist. There
hard has formed E. E. Burkhaad
solve their economic difficulties are amoi^g them many persons
& Co., with offices at 4423 North
who honestly, but in our opinion
in such a way that their choice
Sheridan Road, to engage in the
mistakenly, support the commu¬
will be in favor of freedom.
is

vital

to

our

involved

sons

in

the

" own

not

nist

what would more than

led

forces

because

they

do securities business.

•

:

not

emphasize to you
likely be
the effect on the nations in the
Middle
East
of
a
collapse
in
Greece and Turkey, and the in¬
stallation of totalitarian regimes
there. - Both from the- point' of
view of economics and morale, the
I

need

like the present Greek Gov¬
ernment. The political amnesty

Government
opportunity to
making democratic

Joins Dempsey

offered by the Greek
offers

,

to

all

the

; •

.

Co. Staff

(Special to The Financial

Chronicle)

,

ILL.—Albert J. Elli¬
cooperate in
son, Jr., has joined the staff ft
Greek institutions work/
f
this Commission will begin writ- the aid no longer necessary, oyerSouth La
We are planning aid to Greece Dempsey &. Co., ,135
Salle Street, members of the Cm
l*- ing its report early in April and whelming
with the hope and intention tJiat
^ effects upon countries to the east conditions will be created in cago Stock Exchange.
y* that reoort should be ready shortly caresses. I will. Jjbf, .stgM
cfro'wriing would be enormous, especially if
see
thereafter. *
ray
,

f-

.




t
A

*

;

,

problems that confront them in
ways compatible with free insti¬
tutions and individual liberty? It

.

that

will be closed on Satur¬
starting May 31 and con¬
tinuing through June, July, Au¬
gust and September, Emil Schram,
President, said:
"We are following the schedule
which its free institu¬ that was adopted last year by-

normal fashion.

confronted with the accumu¬

are

longer than it

is. not the object -of our aid

ditions

in

interference

as

is

help to main¬
exorable facts of geography link tain or to help to remove the
the future of Greece and Turkey. present government or the King
Should the integrity
and inde¬ of Greece. It is our object to help
pendence of Greece be lost or to maintain the present constitu¬
compromised,
the
effect
upon tional system of Greece so long
as
the majority of Greeks desire
Turkey is inevitable.
But the effect is even wider. it, and to help Greece create con¬

a

by those countries smA
by any fair interpretation

the affairs of other countries. Our
aid will not be
continued
any

for

present

parliament
of
Greece was democratically elected
in an election which foreign ob¬
servers
agreed was fair. There
can

help

do

pres¬

Government has

Greek

*

propose

considered

be

One

will do. As to the second, I do

requested, or to
deny it. An essential step in con¬
sidering the wisdom of any pol¬

long-term reconstruction purposes.
It has not yet made any loans
whatsoever. The Economic Com¬
for

of

that

the

give

organization, is set up primarily
to make self-liquidating loans for

mission

hold

take

member

to

states.7 The.. International

which

funds

advisory body that
economic, financial

action

social

would

come

Economic and

The

Council is

result

same.

to

have

funds.

end

the

been

quested
cannot

point, I can do
emphasize the
we

anti¬

to
extend to
Greece and Turkey has been re¬
we

on

everything the

efforts

by

I want to make it clear that the

7

President's declaration that
not condone

element of time would have been

to

our

frustrated

being

democratic practices.

changes iri the composition of the

The

should find that

we

were

States

make its assistance conditional

"

aspects of the problem.

ac¬

applied to the
any of its re¬

organizations,

United

proposals now before the
Congress deal with the emergency

.

/

;

primary

our

to

quarters

experts.
'•

in

and

conditions the Greek

proposed United States
for Greece constitutes a

Nations may be able to take over

lated

that

propose

under greatly

ditions,

aid

in

should be supervised by American

exports, international
development loans and expanding
production should enable Greece

of

true

also

we now

purpose is
help people who are struggling
to maintain the present constitetions
and
loss
of independence and their right to democratic de¬
would be disastrous not only for velopment,
we
would
not, ©f
them but the world. Discourage¬ course, want to continue this aid

person¬

we heartly concur, with
the supply of funds. Greece is in

unspeakable

•

confronting

expert

an

so long against overwhelm¬
ing odds, should lose that victory
for
which
they
sacrificed
so
much.
Collapse of free institu¬

tor the United Nations.

expanding

had

is

which

in their will.

be

that the expenditure of American
funds
in
Greece
and
Turkey

Nations

be true.
It
if it were not

gled

independence while they
repair the damages of war.

other imports to cover the period

Greece

This may

strange

ate

.

being watched with
deepest anxiety by the peoples to
the west, particularly the peoples
of Europe who, as the President
said, are struggling against great

By membership in the United
Nations neither the United States

after UNRRA'S withdrawal, until

If

be

difficulties to maintain their free¬

.

also

continuation of essential food and

United

Par¬
af¬

was

dom and

is

blanket endorsement of its present
government.
Others
have
sug¬

international

Government

the help ■>>;
will create
a greater degree of economic sta¬
bility and a greater measure of
freedom from fear. Greek politi¬
cal processes under Greece's con¬
stitutional system will thus oper¬

It

and

its

held.

would

program

balance

compo¬

As the President said, it would

extend

counts.

that the

present Greek

by the fears and crises of
period in which the election*

was

from the

advice and assistance. We

to

the

of
necessarily

program

result.

fected

be

Dardanelles to the China Sea.

charged

liament and

concern

area

is

this

those countries which have strug¬

Greek

to

Turkey
with
deep

It

to

develop into a stronger organiza¬
tion over a period of years.

to be . well done;
promptly done. If we
to * do the thing
tioris for help in dealing with this
7-/
situation, and the Security Coun- that is now proposed, we may do
: '
cil has appointed a commission it too late.. Sir, I am not one of
Which is at the present moment those who are for withholding aid
7/ investigating the Greek charges when it is most urgently needed,
7? on the spot.
It is exceeded that and when the stress is past, and
7 and

«

tragedy, and

and

contribute

aid to it in securing funds for the

essence.

Iem arisinsr from outside Greece's

-

a

a

a

would

improved con¬
those improved,
people wi$
have ample opportunity to regis¬
ter any changes that may ocCiur

turn?

the

through

United Nations is to

mission to Greece

a

recommended

lost

whether
the country in
7 question really needs assistance,
7 whether the request is consistent

progress. How¬

this country
its wealth and influ¬

if the

sary

The Food and Agriculture Organi¬
zation of the United Nations which

have

In another

the

itself of its

Any requests of foreign counf tries for aid will have to be con¬
sidered according to the circum-

7 study

or¬

keep

to

an

,

Greek Government would take fci

mor-»

carrying

v:

is

ad¬

the steps which tfce s

reconstruction

preventing

supports must be withdrawn.

p American assistance.

f stances

in

or

an-

been

designed

crisis has arisen because those two

was

their

on

consider that

to

ment

to help create
those very
conditions of economic and polit¬
ical
stability which are neces¬

problems, and the present

whom

you

their internal develop¬
should Greece and Turkey

receive

Government
efficient

more

ale 'and

ence

Nations and the United States and

■

Nations

it would be

ceed

par¬

program designed by this govern;

be decided."

may

from using

Government request the Economic
and Social Council of the United

| Greece,- Turkey, and the Middle

struggle.

of the United Nations should

and

derwriting British policy there or
f; elsewhere. We propose, rather, a
<

consider the effects

travesty upon logic, if an over¬
estimate of the immediate powers

collapse.

these

it
Sir,

hand, I ask

the

ever,

Rehabilitation Administration and

helping

is tne

now

the other

to

come

Greek

great ministration and perfect is,denstheir aid. ocratic processes; Moreover, we

Greece

the

Relief

On

deliberating, her

and humanitarian

the British Government have been

To

the

of

aid.

and to promote friendly re¬
among nations as well as
orderly economic, social, cultural

culties, namely, the restoration of
averting

democracy to

the

achieve

can

this

of

lations

States.

and

last,

United

ganization

economic

country

witn

failure

peace

The

.

for

the

safety, and

the

sition of

destiny

The second problem
confronting
the Greek Government is the need

in

of

which

helping hand from the
United States
tne country with
which they closely associate the
principles of freedom. It is not too
much to say that the outcome in

breakdown, y

order

the failure in Greece and Turkey
should come about as the result

fate—her 3 great,

be

supplies and funds to enable
77; it to cope with its internal diffi¬

'.7 ■' 3.7 33,:

case.

ternal

the

her

of

may

More is needed to deal with in¬

sume
.

from

in

him

while

forces. ■. •. ;
;; It would not be a substitute
for
Questions submitted to the De¬ the assistance which Greece has
as¬
those

shore

suffering Greece,

crisis

tary

partment of State appear to

tne

encumber

With

tne

its intention of with- cessation of. disturbances
along
drawing its troops in the near Greece s northern borders. VSUcn
There is also in Greece a result would be a most vital
future,
a British military mission whose
contribution to the situation in
members act as advisers and in¬ Greece and make possible the task
structions with the Greek mili¬ of stabilization and rehabilitation.
nounced

■

hand to

a

help hint, till he nas by his own
efforts
and
presence
of: | mind

CHICAGO,

1686

THE COMMERCIAL & FINANCIAL CHRONICLE

1,

national policy.

Thursday, March 27; 1947

It is the avowed

come

.

alarme<J.> And

it

so

goes

aim of British and Canadian pol¬

around the circle.

We
have
accepted
the
Nations idea, which is a
steps in the right direction.
Rut, unless we realize that it is
only a step, we shall be just as

another way.
demand sole trusteeship and
the
right to exclude others from the

•

'

'

and

France. We found ourselves later

supporting Marshal Badoglio and
King Victor Immanuel against the
Italian people.
We found our¬

the

United

Nations

tion.

In

order

selves

of

Russian

to

Declara¬

assure -

the

•

moment

of

Our
was

the

;

v
:.

dim

own

that

kind

of

of

the

of

And

resolved
to

as

basic

our

Day—we woke

a

dif-

survival.

that we
in

world

a

Survival
meant
to
us
literally still
did
keeping our rather remote hemi¬
lution.
sphere
free "from
invasion
or

find

to

war

of

that

penetration.

But

for

Churchill's

Britain, survival meant preserv¬
ing the far-flung British Common¬

And

wealth and Empire.

It meant not

not understand the

we

revo¬

half

expected that
throughout
the
world

people
would

we

survival/but

still up to our necks

revolution.

We

VJ

up..

up

were

so

admire

our

tremendous

it

meant

also

lines

safeguarding

the

:'■>

-

communications

gradually

we came to real¬

entire

ward
Even

the

peoples

more

position

You

how

will

many

from this

a vacuum.

readily see, I think,
decisions would flow

basic aim, if it were
clearly determined. The fact that
it is not determined means that
there

one

be

can

no

consistent selec¬

action and sometimes to inaction.
One

be

can

other.

decisive

as

the

as

^

that

of

the

afford to

to-

East.

think

about

it.

They i

were

too

important, it brought busy wondering where they would

strategy in Europe under get 'tomorrow's breakfast, or a
pair of shoes' or a few lumps of
strong, British Tory influence.
our

It
is
no
secret
that
Throughout western Europe
Winston coal.
and
Churchill would have
even
in
the
British
Isles
vastly pre¬
ferred to carry the war to Ger¬ people were turning to the instru¬
many via what he called "the soft

ments

underbelly of the Axis" rather
than by a cross-Channel*
invasion
of France.
This was not

The

because

based

merely

Churchill

considered

a

drive
most
was

through the Balkans the
effective road to Berlin.
It
because Empire

manded
many

that

with

Britain

one

eye

sian

incursion

Russia-

on

a

time

same

into

power—to

hs
Rusf-

way
a

the

hopelessly tangled problems.
concept of a society

the

reasons

brother

angry

and

same

prompted
protest against
General Eisenhower's decision in
the last days of the German war

'

essentially
have
in

regain

We

we

con^

made

up

real aim is the

our

establishment

of

world

we

government.
Unless
that this is our

know

of

former

doubt, but

to

the

time

to

almost

are

time

which

to

will

certain

improvise

obstruct

In

both

cases

Churchill

was

final goal.

This

are

likely

more

two

major

family

to

be

yet

devised

a

scheme

one

mand—but

not

Western

the

sense,

but

-

I

:

..
.

resources to arrest

archy.

V

ent

Finally,

our

war was about

vision of what the
was

beclouded by

the enigma of our other
great ally,
the Soviet Union.
So long as the
war

was

the ultimate position
of Russia troubled
us far less
than
it did Britain.
We did not under*
stand Russia.
We
scarcely tried
: to
So long as the Red
on,

trend?

able,

even

And
with

our*

great

one

eign

and

from

per

productivity,

with

or

A bicameral

two

to

turn-Nazi

aggression eastward

against Russia. To take note
these facts of history is not
overlook

condone

or

houses

alliance made by the Soviet Union
with Nazi
Germany in 1939. These
were

Moscow's

toward
and

own contributions
state of mutual distrust

a

suspicion, which continued

re¬

should clearly develop
major aim of a planned for

were

same

camp, in the
survival.•••
the

of

war

survival

was

it is not surprising that the
submerged antagonisms and
should

Nor

reappear.

surprising—regrettable though
very

build

the

effort

to

beginning
a

peace,

two separate foreign
poli¬
The first of these was—and

securing

war.;.

every

emerges

clearly

This fact

from

now

President

Truman's March 12
message to the

Congress.

pattern of dual policy—of
making and at the same time
hedging the bet on peace—is a

lee¬

vicious circle.

evitably to

It leads

tects

almost in¬

appears as a

new

threat to A. The present state
of
the world is full of
examples.
We ask for

a

base in Iceland

or

demand

the

second-line

foreign

to

its

away

weapons

uni¬

laterally. We tried this

once with
Until the foun¬

disastrous results.

dations of peace are
securely laid,
we
must obviously carry insur¬
ance.

We

tion

that

act upon

can

the

the assump¬

structure

of

peace

will stand only to the extent
that
others make the same assumption.

But there is
tween

vast difference be¬

a

maintaining existing armhit can be
gradually

ment

until

reduced

other

as

nations

reduce

theirs,

and seeking to obtain ad¬
ditional factors
of military ad¬

vantage.
In

■
do have to pursue

sense we

a

two. policies. So

does every great

the present time. -But

at

power

the

crux

lies in

the

two

policies.

insurance must
to

become

must

the

balancing of

The

never

be

policy of

be permitted

thing

a

never

in

itself;

allowed

to

if

cause

positive action which invokes

any

counteraction.. It must be

a

tially

,

against

policy

a

acquire.- .'.
This, it

of
' ■'

•

to

seems

could

we

essen¬

negative policy, a policy
relinquishing until.;.
as

a

of not

.

seeking
:V..

-

>•;

to
:■

;

is where

me,

lead^fyie

way.- We are
trying to lead the way in our pro¬
posals
with
regard
to
atomic

But we obscure our effort
failure to enunciate a clear

energy.

by

principle; and we stultify the prin¬
ciple by our increasingly acquisi¬
tive policy of

insurance.

■

.

;

Use of U. S. Power and Resources
We have emerged from the war
as

momentarily the strongest

tion

the earth.

on

cities

na¬

Our lands and

unravaged.^

are

Our

re¬

in manpower and

sources

produc¬
tive
capacity ' have * increased
enormously while 'the resources of
most other nations have been se¬

riously impaired. We
of

other

nations

ment of

air

are

far ahead

the

in

develop¬

Our Navy is
more powerful than all the comb;ned fleets of the world. We are,
for

power.

*

little time, the sole posses¬
the
secrets
of
atomic

a

of

sors

energy.
More than
have time to think.
have jobs, food,
and

of

most

the

of

earth

all

this,

Our

true

test

for

scrabbling

are

the bare necessities of life.

The

we

people

clothes, money
buy with money,
the other peoples

things to

of

United

foreign policy is what

we

,'«

States

do with

our

power—what we do with our
great moment of opportunity and

responsibility.
Once

broad
must

do

is

••

have

we

aims,

r-"'V-r.

clarified

our

the

next thing, we
assess, realistically

to

the extent and limits of
This

power.

is

our

not

effec¬
eaSy

an-

thing to do, but unless we succeed
doing it, we shall invite dis¬

in

aster. One form of such disaster
would be the kind of moral; eco¬
nomic

B, which in turn

shall be

similar

This is not to say that any
great
should be so foolish as

which

a

soon we
a

nation

inevitably consti¬
threat to B. This again ne¬
cessitates additional insurance for

insurance for A

tutes

wcfrld

of

throw

What constitutes

war.

made

the Pa,

policy sometimes collaborate in
building the vicious circle. v
:

tive

The

back

to

de'

our
we

by the Soviet Union for a special
military position in some area
where the Red Army made
the
greatest sacrifice* Thus the archi¬

;;7m?£v'• while

suing two policies.

tries, of the world, including our
own, to make people realize that
permanent peace can come about

we

after;, they

even

Very

war.

asked

to

the

however, both Britain and
the United States have moved
to¬
ward the Russian
pattern of pur¬

government.
There
is,, on the
other hand,, a tremendous need
for educational effort
in all coun¬

we

of

and

more,

But the fact remains that

toward

West,,

Russia

As against this
unconcealed dual
Soviet policy, the West
pretended
at first to be
placing all its bets
upon a policy of great power co¬
operation toward peace. More and

satisfactory; scheme has yet
been developed and
that, until it
is developed, there can be
little
progress

between

another

no

practical

subver¬

revolutionary activities car¬
ried on throughout the world
by
the
Comintern, nor the cynical

possible advantage in the event of

for inventiveness and experi¬

ment.

to

sive

still is—a policy of

differently
some

the

of

is;—-a policy of great
power
cooperation; the second was—and

other

and

biting off
This

is

political

results

from

more

what

than it

having bitten

;nation's

can

chew.

Napoleon did; and
him. Another

Adolf Hitler after
form of disaster
could chew

bankruptcy
any

off

might
more

be

that,

than

we

ourselves, „we~ should

become dependent upon the help
Greenland, Knowing that our in
of others,
who, though they might
tentions are peaceful, we
cannot. share
some of our immediate obunderstand why this should dis
jectivesy would not at all share

policy.
We have- not am only through some form of world
swered the questions.
We do not federalism.
Once the need is rec¬
I
know whether we think the
trend ognized, the chances are that the
turb the Soviet Union.
toward socialism in
practical method will be found.
Europe seri-

Army was
killing Germans, Russia was
okay.
As the war in Europe drew to- ously endangers our own free- en¬
But today the ultimate estab
terprise system.
We fear* that it .lishment of
ward a
world government is
clearly foreseeable
victory, might. But we have reached no not
even the avowed aim oi our




Germany. In the period preceding
the outbreak of World War
II,
Western diplomacy tried its best

still

parliament,

elected, might provide
way

any

We ourselves

extended recogniiton
only in 1934,
come to
power in

cies.

capita

standard.

recognize the

of

China.

acy, or

sources, to arrest it?
*
Were we to answer these
ques

tions,

India

-Western

pursue

representation is necessarly arbi¬
trary, whether based upon liter¬

the pres¬

finallyare

not

should, from the

of

of

the

long

a

it may be—that the
Soviet Union

has

departure

Any

ready in the

without

leaving economic; sphere to accept ' the
his mark upon the sum
total of bankruptcy of free-enterprise
cap¬
Anglo-American
strategy espe- italism. This brought us squarely
cially
in
southeastern
Europe. up against one of the major prob¬
The
British
commitment
in lems which we face
today.
Greece, which we are now being
Is a socialist or
semi-socialist
asked to take over, is the direct
Europe a threat xto the continued
result of Churchill's
/clumsy ef- existence of a
free-enterprise sys¬
forts to block Soviet
penetration tem in our own
country? If it is,
of that
country by restoring a re¬ do we wish
to use our great eco¬
actionary and unpopular mon¬ nomic

-

peoples

the

of the early

regime, and for

would

suspicions

overcome

No

faced

after Hitler had

is it

This obstacle is

obstacle is technical.

democratic

have

we

unsuccessfully tried

Soviet Government.

old

obstacles

has

thereafter

Powers

won,

by
peoples than by governments, for

preserve

High Com¬

-

period

Once

of

it

to aid the overthrow

Bolshevik

war

\

alistic thinking.

cialism—a socialism determined to
political freedom in the

Roosevelt

armed forces

and

repre¬
swing south and cut up the health. It would have stacked
us, sentation
in a world parliament
remaining
German
armies, in¬ as the leader of the West, against which would seem
just and satis¬
stead of driving on to Berlin be¬ the
Soviet Union as the leader of factory to all the
peoples of the
fore the Red
Army could reach the East. Instead of this, we saw world.
Straight per capita repre¬
that coveted goal.
western Europe
moving into so¬ sentation would give control to

overruled by President
and the United States

life

thrown into the

we

us
the
big
society, able governments have a vested inter
willing to help the est in nationalism.
The second

members

its

exist

which stand in the way of world
government. The first is the habit
pattern of nationalism and nation¬

made

their

of

long-run purpose
and plan our course of action ac¬

There

different.

But

logical

have-not

minds that

ultimate

less

or

Obstacles to World Government

Western

perhaps

weaker

elusion.

our

ended, western
Europe at least would return to its

would

more

refuse to take it to its

our

>-;,/*

no

all

are

perhaps prevent the attainment

We had thought that, when the
war
of survival

eastern
Mediterranean basin and the "life¬
line" to the Middle, East.
Much

We

ready to accept that idea.

actions

upon property rights and
individual profit-seeking initiative
to be crumbling before
the mass onslaught of elemental

not

idea.

from

seemed,

old pattern—weaker

Churchill's

the

whole

strategy de¬
fight Ger¬ human needs.

fight Germany in such
to prevent at the

their

public

are

determined hostility of the West.
British, French and United States

cordingly,

agencies of government—to solve

of

we

falling into this

pattern, if indeed

most

present operating in

to

But

ize

moment

these questions.

nothing of the sort was
Another Gap in Policy
Planning
which held the Empire
together. happening. People didn't seem in
Let me now take
up briefly the
the least interested in
Thus, the British alliance ranged
adopting second
great gap in our foreign
us for a time with the
system
of
free
British Raj our
enterprise
policy planning.
We talk about
against the people of India and democracy. Most of them couldn't
peace resting upon the one-world
afford it—couldn't even
muddled our'
of

the present

in great danger of

not my

answer

and military contribu¬ tion of
^stepping stones or pro¬
victory that they would cedures.
The fact that it is not
"Yes, sir!
The Americans determined leads us sometimes to

tion

only preserving the British Isles, say:
have the system.
Let's remodel
Dominions, India and the Em¬
ourselves in the American
image."
pire from invasion or penetration;
long

our

job here today to. not already done so.
My
The Soviet Union has existed
assignment is merely to point out
for less than a generation.
For
where our foreign
policy is at
try to

industrial

the

,

majority of

the grounds that

on

greatest sacrifice in

cific

economic

organi¬
zation, and if the development of
the
United
Nations into .3 world

same

It is

after

■

•

.*

had

we

the

this

people?

Revolution

then—shortly

by
We woke
ally, had
won the

closest

war

;

what

in

fighting

was

Up to Our Necks in World

;

obscured

our

Britain,

ferent

vision

war. /

happening

further

was

fact

Great

terrible

more

actually

world

•

If

dilemma

Union backs

Soviet

mand

v.

•.

formerly mandated
Japan; Somewhat surprisingly

the

from the goal of lasting

Vv

peace.

Pacific islands
to

,

Because—if

and famine for the

victory, the threat of

another and

'

:ar as ever

:

Far
East,; we tore up the
other side of the nickel
pledges against annexation and
ferent aspect.
against "territorial changes that reads: Are we quite sure of our
do not conform to the
Franco with the means of con¬
Soviet Policy
freely ex¬ own free enterprise system? Will
r
pressed wishes of the peoples cori- the necessities which now compel
tinuing to oppress the Spanish
This present difficulty
is not
cerned."
We went in for con¬ Europe toward socialism arise in¬
These were all policies
people.
solely of our own making. Others
nivance in an old-fashioned vic¬ digenously here at a later date
dictated by military
have contributed their share. The
expediency tor's
peace, with its spheres of and compel us in the same direc¬ Soviet
to save lives and to hasten vic¬
Union in particular has set
influence and power politics.
In other words, do we be¬
And, tion?
tory in the war of survival. They
the world a bad example. The bad
lieve that we can find some better
did, for the moment, perhaps, having paid this price, for some¬
example consists in the
simul¬
thing that we did not, need, we way than public ownership of the taneous
hasten victory and save lives.
But
adoption of two policies—
they left a heritage of confusion proceeded to cross up our own monopolies tc^eliminate the boom the one a policy toward
peace,;
bargain by dropping the atomic and bust cycld?
Do we believe and the other a
which later brought
victory with¬
policy looking to¬
bomb without telling our Allies that we can prevent our
out" peace—a
system ward the
confusion
out. of
eventuality of war.
that we had such a weapon.
from
which there emerged, at the
alternately providing feast
very
At

buying Spanish so-called
neutrality by supplying Francisco

;

ong

government were our clearly de¬
.:\V» fined
aim, much of our present
foreign policy difficulty with the Soviet Union
question is the buffalo, the Indian
would take on an altogether dif¬
on
the

Why?

our¬

intervention in

selves

.

,

United

"

take it

Or,

icy.

we began to worry about
(Continued from page 1651 > i
getting considered
conclusion.
Conse¬
along with democracies and dem¬ Russian help, against. Japan. Aph quently, we do not know whether
arently not knowing how near we want to
ocracies with dictatorships.
•
try to arrest the trend.
apan was, to the end of her rope, Nor
do
Once military victory in a war
we
know whether we
we paid what now seems an
ex¬
of survival becomes a nation's sole
really believe that we have the
orbitant price for the promise of
power to reverse it.
This is the
aim, military expediency dictates
Russian
assistance.
This
price number one priority in making a
objectives and procedures.
Thus
was the
scrapping of some of the foreign
we found ourselves for a time in
policy.
;
basic principles of a just
peace as
alliance with the traitorous
It is also the number one
Vichy
prob¬
expressed in the Atlantic Charter
dictatorship against the people Of
lem in our domestic
society.

*

the Soviet

i

j

its
for

But when

Union, likewise,

own pe&ceful

sure

of

intentions, asks,

base in; Spitsbergen,

we

b.er.

in our ultimate aims.
In order that our aims may

consistent: with

*

/

be

we
must knew not only the measure
of

our own

our

power,

strength but themeas-

"

Number 4580

Volume 163;

of the forces which- oppose
aims. .This requires that we

ure

V

our

the

I recognize

; contemporary

J

THE COMMERCIAL & FINANCIAL CHRONICLE

pXet oneT 0Wn pe0ple- That is

major trends of
history. Assuming,

twoth

example, that we wish to re¬

for

establish pre-war free enterprise
in areas which are now headed
toward some form and degree of
socialism, it means not only that
we must
measure our power of
attraction
against that of the
Soviet Union, it means also that
M we must not blind ourselves to
;the fact that history is moving—
and moving rapidly^in the di¬
rection of socialism. Our power
to arrest such a trend is not nearly
I so great as we think. But our
power to wrest leadership in such
a trend from a totalitarian police-

*n£».
is

bolstering

attempt

are

Or

tide of history.

buck
can

which

And, if we
freedom, the
Turkey have never in
history been a free people
not

are

They

free people

a

use

the

chips

were

kind

mass

to

or

us—whichever

highest price. Fine

phrases

will

our

not

fool

any

our¬

history ^ in world politics
nomics.,

The

that

mean

And, in every coun¬

have

We

communism?
we

Do

throw

our

and

positive

a

we

we

selves

with

counter-

ready to ally our¬

the

settingup so-called friendlygov-'

we mean

before

twice

^single-handed

we

take

a

"humanity marching toward the

of

Problem of Aid to Greece

\rArid

^ !

let me get. down to
some: contemporary brass tacks.
<
now

Truman's message of

President
"

March :12- appeared to enunciate a

policy .By some commen¬
it: - was hailed as a. new
Monroe Doctrine—as a step rank¬
new

tators

;

do

.

.

.

ing in importance with President
famousv "Quarantine

Roosevelt's,

October 1937, or his
announcement of the Lend-Lease
of

Speech"

policy iri early 1941. It is perhaps
too soon
to reach a considered

mean

we

,

to

stop the creation
friendly govern¬

are

use the
market.
The

free to

free

a

for

be the

sell

Nations

managed

handle

to

the

conduct

contribu¬

our

business
and

is

the heart, ar¬
economic

of the

veins

system which supports individual
freedom.
Our position is one of

for their own purposes is the basic
reason for the existence
of our

that

to risk fail¬

in the hope of success is our
piece of the larger right of indi¬
the her¬

a"5°"S
so

that trust and

fail in

we

them

furnish

business. This freedom to use one's

vidual freedom which is

of

measure

Our
teries

own reasons
income and profits

individual judgment

we

tion in this conflict.

their

retain

to

a

to which

business, although free, upon
high standards of fair dealing will

in

women

the

to

practical way of
desirable ideal.

a

as

demon¬

the

evidence

with

seize

destroy our system and
our
freedom.
Today
no

mercy

to

who abuses the freedom which he
shares with others.
Because I have been deep in

the

affairs of the New York Curb Ex¬

the past
I know of my own ex¬
perience the high standards of
tions are refinement; and orna¬ fair
dealing which govern its bus¬
mentation.
1
iness. The care of this interest of
;i
We take it for granted that we
the exchange which I have spoken
will always be free, thai$his in¬
of tonight is in your good hands.
terest of the Exchange is so sol¬
The contribution which you will
idly based that it needs no care.
make to the defense of our lib¬
But tltere has not. always been
erty can be relied on. The. voice
freedom for the individual and
and actions of the New York Curb
foundation.

its

All

other

condi¬

change

during most of

12 years,

more

such

.

•

.

Gilbert Wehmann With

.

the

r.

If; > there

Congress*.arid the people» what
aim is. ; To speak vaguely know>

that

~we

facts

are

have

we

do

not

right to know

a

rest is

a

much older way of run¬

ning a country than representative
government based on individual
freedom.
That older method has

White, Weld & Co.

Gilbert H. Wehmann has be¬
implica¬
come associated with White, Weld
when these primarily a function of govern¬
More and more it is be¬ again been rising up in the world & Co., 40 Wall Street, New York
other aspects dwarf in magnitude ment.
investment : bankers .and
policy and not merely another of commitment the specific action coming a function of peoples. And and spreading; out under many City,
a
free people has not only the false
and
attractive- names.
hasty improvisation—involves far now urgently recommended. We
more than
the financial commit¬ are not talking about four hundred right but the obligation to demand Speeches and spending and sol¬
the information upon which to diers will never stop the spread of
tment, which, Paresjdept.v Truman, million dollars. We are > talking base its free judgment.
this poison, though they are weap¬
described as "a little more-than about taking a first step in a pro¬
which
can
be
marshalled
If our foreign policy today oper¬ ons
ohC-tenth of 1%" of our invest¬ gram which will cost billions of
dollars and perhaps millions of ates in a vacuum—if it is a series against it.
,
ment in the recent wary >
We have all been plodding along
lives. If such a program is called of improvisations unrelated to any
First of all it involves an untroubled by the feeling that the
clearly defined basic purpose—it
; dertaking
on our part- to deter¬ for, we have a right to enter upon
freedom of increasing millions is
it with our eyes open to its full is primarily because we, as a peo¬

1 judgment. One thing, however, is
clear. .The new policy—if it is a

other

about
tions

aspects

them.

or

Foreign policy is no longer

not enough,

is

i

-

#

•

in

when

where. and

mine

world any

the

free people is in danger

totalitarian regime
imposed upon it by having "the
will of a minority forcibly imposed
upon
the
majority."
President
of; having

Truman

a

mentioned

.

Poland,

Ru¬

Bulgaria as examples
of where this had happened, and
Greece and Turkey as examples
and

mania

of where it would
we

happen, unless

intervened.

1

f

of Spain?
What about the people of Portu¬
gal?
What about the people of
Argentina?
Is Franco less of a
What about the people

dictator

than

Tito?

Peron's

Is

Argentine Government less totali¬
tarian
ment

Is

than
of

the

present govern¬

Poland?

the, President talking about
regimes imposed

implications.

(

finally, point four.
What
about power?
What about the
relation of our effective power to
our aim?
Are we going to tackle
And

this

thing

alone,

or

And, if with help, with
help, and at what, price? ;

of

totalitarian

all

human freedom

against all

forms of tyranny? Or is it only a
ball to arms against communist

imposed

tyranny,
which
or

we

by

minorities

consider to be

inspired

supported by the Soviet

Union?

we mean that we are out to stop
expansion, and only that,
why not say so? The polite eva¬
sions of diplomatic parlance will

;If

Soviet

not fool

anybody—except perhaps




ple, do not yet see clearly where
we want to
go.'Our government
cannot tell us where we want to
go. The function df our govern¬
ment is to give us the facts and

help?

to carry out our

whose

In the long

with

we

the part we

propose

China, torn by a
If

we

cohorts

try to do

of

Salazar—and

Franco, Peron
their ilk in

and
other

countries.
That way we* shall

Soviet nationalistic
the

stop neither

ideology.

each

year

and

knowledge that someday

the

by

something
about it.
Last week two voices
that have become great in our
start

must

to

do

spoke our thoughts.
President Truman said,

moment

present

nearly

tory

in

"At the

world his¬
nation must

choose

every
between alternative ways

of life.

...

of life is based upon
of the majority, and is

"One way

the

will

distinguished by free institutions,

we

attract

|p ourselves the
•

VT-

i

members of the

New York Stock

Exchange, as sales manager

of the

office.
Mr.
Wehmann was formerly a part¬
ner
of Kalb, Voorhis & Co. and
New

firm's

York

representative government, free
previously associated for 14 years
elections, guarantees of individual
with Tucker Anthony & Co.
liberty, freedom of speech and re¬
ligion and freedom from political
oppression.
/
With F. S. Yantis & Co.
"The second way of life is based

They are the ones

to be

tackled—not by experts,

by ordinary

citizens,

freedoms."
In

Moscow

Marshall

Retail Sales Rise 15%

said, "To us a society is not demo¬
cratic if men, who respect the

During February

rights of their fellowmen, are

WASHINGTON,

nounces

free

March

26—

Commerce an¬
that retail sales in Feb¬
of

$7,375

millions.

and

ruary

totalled

of

the

Stock Ex¬

not

With Merrill Lynch
(Special to The Financial

may

ganda-laden

Street, mem¬

Chicago

change.

express

be snatched away from
their home or family."
Last week this creeping, propa¬
they

bers

their own beliefs
convictions without fear that
to

South La Salle

135

Secretary

conflict was driven
This was 15% above the corre¬ out into the open. The enemies of
support of peoples—instead of our
freedom will now busy themselves
lifti -Hi "Jt'i.i'J f lO
sponding figure for February, 1946.
supporting unpopular regimes—
Unless

Gilbert H. Wehmann

(Special to The Financial Chronicle)
' .
that need upon the will of a minority for¬
CHICAGO,
ILL. —Albert
G.
but cibly imposed upon the majority.
It relies on terror and oppression Crawford, Jr., has become affili¬
j r;
and the suppression of personal ated with F. S. Yantis & Co., Inc.,

lems.

expansion nor Department

spread of communist

being taken away
we

land

decision,

run,

play in the world will be deter¬
mined by the kind of people we
to take on the job
of stopping Soviet expansion, not are—by the kind of people we
want to be—the kind of people
through: the United Nations but
we make of ourselves and of our
by ourselves, upon whom are we
children.
And so I say to you
counting to stand by our side in
and to others who, like you, are
the event of a showdown?
Upon
entering upon the responsibilities
France,
where the communists
of citizenship:
polled the largest vote at the last
Don't be afraid to question.
election?
Upon Socialist Britain,
in Ihe throes of a crisis which ^ Above all, don't be afraid to
has precipitated our crisis?
Upon tackle the big fundamental prob¬
If

civil war?
this job with
by; the will of a minority, or only dollars, using as our tools what¬
about, a certain variety of totali¬ ever rickety remnants of the past
tarian regimes imposed by a cer¬
may exist upon the periphery of
tain kind of minority? Is this new
the Soviet Union, all we can count
doctrine a call to arms in defense
upon will be loud cheers from the

all

CP

should be shown to anyone

which

Soviet threat to,. Iran, compelling
ments than now exist, or also to the -withdrawal of Soviet troops
challenge the existence of those Which,were: actually in that.couqwhich have already been; estab¬ .tjryv Whatisvso urgent about the
lished?
j.. ;
- ' - Soviet-threat to Greece or Tur¬ there can be no assurance, except
key?:' 'What :is so urgent that we the devotion of men who believe Exchange in the industry and in
;' These. are - things ^ we * have ^a
the nation will provide no support
must act alone, without consulta¬
in it, that there always will be.
right to know before we embark
tion,., without knowing how far It is a condition which, like seem¬ for the enemies of our freedom.
upon an adventure of sucbfnagni^
our first step will take us, and in
tude.If v the;:; President ;: of the
ingly solid land, can be eroded
such a way as to undermine the
United States' knows what he de^
a\yay*\
It can be? forfeited by
very structure of peace, which we
abuse.
sires.the aimfof> the country tp be,
hayefbeeu struggling, to erect?
then he has. the obligation to tell,
Tyranny of a few over all the
of

'

and

men

well

extent

and

our

3

,

to

as

The

task which
Individual freedom is more than
belongs by rights to tne United
the cornerstone of our life. It is
Nations.,
u
;
on

.

future.

built and

life

itage of everyone in, our land,

either group. We can make our¬ ernmetits
communist or "non- \ We are told that the situation is
selves the last embattled strong¬ communist—around their borders? so urgent that we dare not wait
hold of the past or the spearhead
And, if we mean only the latter,' for the United Nations. The United
—

ourselves

to

freedom is

strate

toward ure.

trend

democratic socialism—we had bet¬

think

and

individual

They exist primar¬

freedom to buy and own and

world, government

are

of

property

ready to declare

are

any

the business of

who

men

them.

country

our

dynamic democracy.

—until

ter

leading

create

ourselves for

reactionary?

Or do

to

Until

that

mean

choice—be-

our

'

The only way to stop the expan¬
sion of communist totalitarianism

policy in China
weight behind

reverse- our

and

we

the

of

manage

services

merely that we
intend to stop the Russians from

strong—of

are

ex¬

ily because

is

nor

broker or dealer in securities
exists today solely because of the

.

force of

exchange,

our

other exchange nor

ecor

the

to^lk of

any

work

stop

to

way

to¬

here

are

world that it is

Neither

.

':]} as it is, or think it could be im¬
proved only :by Turning bacjc the
we

whose leaders

them.

'

"

only

or group

country can forget that he
and it are deeply involved in this
struggle.
our

are

night, it is appropriate

pansion of Soviet nationalism is
to stop the expansion of all na¬

intend to

we

there

tionalism, including our own.

to embark

we are

or

in

believe. No individual

•

not

are

responsibility for what

assume

This fight will not be won by
interests of the
force alone.
We are unsurpassed
fundamental and
in physical strength. We are mas¬
to be left to the
ters in the art of gaining our ob¬
care of any group smaller than the
jectives by direct action.
But,
whole membership.
Since these
physical strength and direct ac¬
interests are of equal importance
tion alone cannot protect our lib¬
to our friends in other organiza¬
erty. The only way to preserve

But

lenge because we are not yet ready
to lace the facts of contemporary

try there are a few people who forces which we ourselves have
are either satisfied with the world recently characterized as corrupt

cldck.

We should have on

side the peoples of the world.

to
we

and

Exchange too
too important

ready to step for¬
ward with such a positive chal¬

stop the spread of the communist
ideology in all parts of the world
that something is
peoples freely choose

and. who. want to find
what it is in order to change it

cause

mankind

tions

except where

wrong,

V

which

man¬

support of humanity tnrough-

We

Soviet expansion,

country of the world

for the better.

terms

of

employees,
for
whom these names are proxies,
the interests of the Exchange have
been created and well cared for.

Are We Ready to Face Facts?

today there are masses of people
who .recognize

in

freedom

.

of State have called to each of us.

of the members,

the work

By

governors

us.

just what does this mean?
we

tne

of

in

war

of the President and the Secretary

Meara—to

about finding the power to oppose

That is point two.

stopping

Do

prepared to risk

out the world.

survival, the Turks

Point three. If

|versal freedom, justice and peace,

we

O'-

Goodrich, Vernon,
name only a few.

berger,
war

would understand in any language
—then we could count upon tne

down

either—except perhaps

upon

,

to%sk

Then it would be the men in the

to the Nazis

strength to help regulate the
flow and
guide it; toward uni-

^

Kremlin who would have to worry

would offer the

selves*

:

prepared

we

defense

sat back and sold their chromium

one

a

today.

in the war. of

moral

ment—Sturgis, Tappen, McGoWan, with the work of trying to again
sturdy foundation Keena, Kenny, Hengeveld, Baden- hide the issue. But the statements

principle?

were

dictatorship, which has skilfully
played botn ends against the mid¬
When

(Continued from page 1653)

clearly understood aim

lived, very prosper¬
a slightly streamlined

have

ously, under

dle.

own

showdown

a

with totalitarianism of all sorts-

rickety,

regime

concerned about

and

our

every,

the

force

we

a

Were

l

suffered

them.

oppresses

their

the

we

in

Exchanges and Free Enterprise

our own.

without

and

people of

guide the

to

have

up

anti-democratic
now

of mankind desire to

futile

a

without

than the people of
Spainwe ease their
suffering

by

§ to reverse the direction.
We can fritter away our strength
in

and Tur¬

if

power,

snail

We do not have the power

move.

Greeks

nor

world in a direction toward which
the masses

The

Greece

m

will be

And how solid will be our

peoples, or to preserve tne
peoples wnose freedom

no more

plate that sort of a middle course.

v

upon

Stop

acting to help suffer-

threatened,

key?

we

We have the power to

out to

ireeaom of

greater than we realize,
do not even contem¬

is

because

we are

exPansiorb why, pretend
are

*

*

that we

.

state

7+

If

the only solid power we can count

NEW
R.

ORLEANS,

Dupont is with

Pierce,

Fenner

Gravier Street.

Chronicle)

LA. —Pierre

Merrill Lynch,
Beane, 818

&

iP

1688

THE

COMMERCIAL & FINANCIAL CHRONICLE

Thursday, March 27, 1947

duced by one-seventh during the
period, and there was a consider¬
able

(Continued

from page 1648)
billion was, of
course, available the biggest items in our budget
constantly studying their for investment in government se¬ for
many years to come.
to,
problems, both actual and poten¬ curities from these sources, but
A figure of $5 billion is a lot
tial, looking for new and better not from the individuals.
This of
money just for interest each
approaches to
the
functions
of still leaves- $105 billion of savings
year.
But, we can take some con¬
banking.
In this way they are of
individuals
of
other
kinds, solation in the fact that it
would
preparing
themselves
for
the more than half of which—about
lave been
higher on the basis of
many
problems
that
$55 billion—went into
will
are

from

future, and

not

are

waiting until those problems are
upon their doorsteps.
This action
is

in

line

fessions
think

with

are

what

doing.

much

of

other

pro¬

You would not
doctor if he

your

quit studying medicine
he

as

soon

as

left

college and hung up his
He would today be far be¬
hind the times if he had not
sign.

kept

up: with

the

advancements

improvements

during

the

doubt
a

i

if

in

medicine

recent

he

practice.

The

and

I

much

of

true

of

is

same

lawyers in keeping abreast of new
and
studying the more lib¬

this is

laws

eral decisions of
We

problems in this dynamic
age
and we must be
prepared the best
to

can

when

meet

these

they arise.
The' Public

/

magnitude
dollars

of

had had

we

debt

this much

to

would

individuals,

in

one

the

operation,

went

billion.
group

necessary

only to view

problems
consider

but

to

far

so

the

immediate

look

as

ahead

possible

and

all

of

the

implications for the future,
■to; Thus, the postwar
management
of the debt had to
begin in a broad
general way wheft war
financing

started.] How the

debt wap dis¬
tributed try investor
classes,1 the
maturity structure of the debt; the

interest
to

these

laid down
general

at

initial

the

pattern

decisions

'very

for

outset

the

' a

vestment
near

loans

that

was

people) that

it

the

of

persuading
financing job

the,war loan goals.

ex¬

analysis by the technica

staff

the

cur

of

Treasury to convince

loan

war

workers

that

the

earned

by
they

money

was

people

simultaneously

being

out

of the

region to

Among

the

300

commercial

varied
there

some¬

tremendously in 1946—
a few
increases, run¬

times

were

ning

to

as

much

sort

contended
of

that

this

was

as

produced the munitions of
The staff used to
lay out the
.ketb by the various

war

as

America

in

of

that

group

Treasury could

line

with

adopted

to

the

.

Debt

in

Form

pro¬

over-all

govern

of

war

just

incidental

Assets

assets

of

asset item in their financial state¬

account

Federal

for- 45%

of

securities

insurance

assets; 62%- of-mutual
savings';banks assets; and 65% of
company
he

earning assets of commercial

banks.
can

With

anyone

such"

proportions,

doubt that the Treas¬

ury and the Federal Reserve
tem

have

a

concern

Sys¬
joint responsibility far

about

our

whole financial

structure.to;to;:to'.; /;,
This

points out the big differ¬

in the

trasted

Federal debt

with

other

investors'

needs

securities

as

con¬

debts.

A

corporation can put out a $50,
000,000 bond issue, taking advan¬
tage of the best terms at the time

much

as

as

pos¬

;erm.

investors, with market risk

;aken
for

out

the

time.

'

'

j"

.'• ■>

of

securities

market.

mass

designed
It

doesn't

•

i:

Savings Bonds

Savings bonds

ast

market.

war

this

well

was

illustrated
many

price of

Liberty

bonds

Like .pouring

began

to

gasoline

decline.

on

individuals,-dumped

many

fire,

a

War

which

went down

pushed

a

little; more, the fear

everybody of
loss caused
Liberty
bonds
viduals to sell.
whether they liked it or not.
into

•

*

in

public debt

those

two

,m.

man¬

to

the

people

adapted

from day to day to changing

con¬

and

>

.

investment

to

were

prevent recurrence

culty.

in

,

govern¬

In

view

of

the

and

the

Debt

urgent need to

debt, whether long

and

cannot

escape

re¬

sponsibility for the condition of
any part of

it.

to

*

Banks

I need

and

'

\

hardly add that the

thing of all would be to
banks

long

into

long-term

the

as

banks

stantial

owners

need

large

a

be

debt

of

sub¬
we

short-

Already bills and

have

of

the

debt.to So

the

of

one-third

holdings

worst

move

must

volume

term securities.
almost

to'

j

Long-Term Debt

declined

from

of

bank

total

Federal

securities

a

year ago to about one-sixth today.
A new twist has been added to

lating it to the campaign to

re¬

con¬

inflationary pressures.
The
designed to idea is that loiig-term debt should

of

this

diffi¬

Everybody knows that

his

not

Banks

short,

or

the

watchful

trol

redemp¬

Commercial

entire

certificates

,

market

something money in savings bonds is avail¬
which you can " set
at
guaranteed
up properly able
redemption
ohce and then forget about it. The values on demand
and, therefore,
changing needs of the various in¬ the bonds are thoroughly insulated
vestor
classes : must
be
studied from the outside markets. - There
cbntinually and debt management was not even a" flurry in
savings
rriu$t be snaiped to fit thqse needs. bonds redemptions when the stock
market suffered its
In our present boom
huge decline
times, the
policy, V oto course* < should - be to last year.. In the four months
from the
end
of
reduce the
May through
debt—especially that
owned
1946, the value of
by
commercial to banks. September,
You bankers know how successful stocks listed on the New York
Stock Exchange declined
the Treasury has been
$17 bito
during the
lion—from $84 billion to
last year in
$67 bito
reducing bank-held
debt in the pay-off
y—yet savings bonds
program.
"
.

the

But

ever

they had been cheated in their the
argument for funding by

patriotic

.

ditions

-

the

back, to par but the
damage
was done and the bitter
memories
remained.
Many Americans felt

holding it
ment bondsr" /
as assets—was developed as
the
product of experience.
If is "an
Savings bonds
i nstrument which must be

.

years

indi¬

was

Fitting Debt to People
Holding It
"
idea

Within

small

more

long-term

of

of

to

sense

I,

Treasury must be

their

Liberty bonds on the market—not
try to push indi¬
because they needed the
viduals into 90-day bills or banks
money
or
wanted it, but because
into 25-year bonds.
they
Contrast this
were afraid of
losing it. The mar¬
policy, which has saved millions
ket for
of dollars in interest
Liberty bonds was se¬
costs, with
verely shaken, and every time it
;he
policy
followed
in > World
make

Whereas, even if this were not
true,
however, I
would
argue
against the idea that the govern¬

are another good
ment could
shift the
worry on
example of looking ahead in debt
long-term issues from itself to pri¬
management.
Most people know vate investors.
As I said
earlier,
very little about the security mar¬ a
corporation can issue a bond and
kets and the intricacies of han¬
generally speaking, forget its be¬
dling marketable bonds. After the havior in the

is, to sell long-term
by the panic which gripped
to long-term investors
small investors when the

and short-term securities to short-

needs

the

The

reasury's policy in debt manage¬
ment is to fit the securities to the

agement—fitting the debt

are

investors; rather, they are
frequently the most important
Today,

short- and long-term issues.

This

various

ment.

by the coupon-rates paid for dif¬
ferent maturities and by the distibution of borrowing as between

;toV;.

Obviously, these investments
not

as

execution.

wars.

Interest expense is affected both

tions not only did not
go up but
were
13% lower in September
than they were in

May.

/

,

-to

-

be

issued

to

nonbank

investors

only and the funds used to retire
short-term

debt held by banks.
point is, of course, to get
people to hold more government
The

securities and less deposits—since

people

teild to spend deposits
freely than they cash gov¬
ernment bonds
foFtospendihg,
I
agree with this, but in alf fairness
more

it should be noted that the differ-*
is purely one of

ence

psychology

arid that the total amount of
liquid
assets of nonbank investors is not

changed
A far

one

iota in the

process.

effective anti-infla-

more

tionary step would be to arrange
budgetary affairs so that there

our

is:

a surplus from taxes available
to reduce the debt and some

I wonder what
keep commercial banks liquid, it
might have hap¬ oyer which can be used for leftJ
tax
was
decided early in the war pened if the
and
then
average person had reduction. Debt reduction reduces
not : worry too
much
financing period that no new se¬ been forced in the war loan
about its behavior until it
drives the
volume
becomes curities
of
liquid to assets, f
should be made
eligible into long-term marketable issues whereas
due.
Such an issue is a
the
drop in for bank
funding
method
ownership with maturi¬ like Liberty bonds during World
the bucket of the financial
struc¬ ties in
merely rearranges the character of
excess of 10 years.
War I.
The stock market
ture of the
Imple
troubles such assets.
country.
In contrast
to
menting this, a considerable vol¬ might have spread to the
the Federal Government
bond
It appears to
puts the ume of
me, therefore, that
one-year certificates was market and the
issues out in billions of dollars
stability of our
the% arguments for funding the
issued,
designed
and can't forget about them
primarily for bond market could have been seri¬ short debt do not
for bank
hold up well on
ownership and for short- ously threatened.1
one minute.
Public debt manageexamination.
In addition, . ho\yterm corporation and other
busi¬
ment consists in a
•Savings bonds continue to be an ever,: there is the
living mechan¬ ness funds. When
r disadvantage;
the books were
ism designed to
important instrument in
keep a quarter- closed on
public that interest costs are raised
the Victory
whp^
Loan,, there debt management.;: We
trillion
dollars
of
securities
in
would all long-term
issues replace
were
short-to
$46 billion of certificates like to
see the
good condition and so far as
pos¬
ownership of the term issues.)? This is an important
outstanding, about three-fourths debt
sible, in the proper hands.
spread as much as
This held
possible. consideration with interest already
by
the
banking
It is a good
system
serves the welfare of
the people
thing for tens of mil¬ amounting to around $5 billion a
These to were : divided
into
.

of

funds to show that the
money was

actually available.:

-

.:

-

•

,

mar-

sources

\

.

■

"**•

Source of

Funds

tototo;'

12

whole and aids the
particular
owners
at the same time.
Like
as

a

lions of Americans to

,

part of year. - I want to make it
monthly maturities, thus offering this debt
clea£tbqt|
directly. This insures a higher interest costs should never
a ready
source of debt reduction
women's work, the
continuing interest in the
be a barrier to
job of manage¬ of bank-held debt
manage¬
funding if ]tbere
if and when the ment
ment is never done—so
of the
country's finances and are substantial
long as opportunity came.
compensating ben¬
That oppor¬ aids the
dividuals alone for the whole war the debt remains.
"cause of good govern¬ efits, but such
benefits
period. In the six calendar
tunity came in March, 1946, when ment.should]
years
-to-" toto: to'-,-'to:toto:to to.
real and not
1341
a; steady
just apparent,
The Interest Burden
program of pay-offs was
through
; The
1948,
individuals
Treasury is emphasing the
saved in all
undertaken, designed to reduce
about $175 billion,
Interest on the Federal debt
campaign to sell savings bonds "Leakage" in Funding
to¬ bank-held
Operation's
AIL of this was not
debt-by drawing down through the
available to day is a figure of around
payroll savings plan,
$5 bil¬ the large cash balance to
Abstracting from these ; argup
tap at the source for war
peace¬ and I know that the
loan lion a year.
This is more than the
help of bank¬ ments for and against
sales.
time needs.
About $40 billion was
-to."'-,
deb]] fundi
ers in this work
ab¬ cost of the entire Federal
is
Govern
deeply appre* ing, I should like to take a
sorbed
through savings in the ment not so
jniq^te
By the end of the calendar year ciated.
to discuss the
to ' totototo-'1- V'toto'.toto.
many years ago.
In
form of private
question of " "leak¬
insurance, sociai the budget estimates for the fisca 1946, the debt was reduced by
age" in funding operations. What
security and military insurance year
Question of Debt
1948, interest is the third $20Vz billion from its peak, with
I have in
Funding
mind is that there may
About,$30 billion went into mu
$19 billion reflected in a curtail¬
Let me turn to
another point in be considerable
largest item, exceeded
diversion of se¬
only by na
toal savings
ment of bahk
banks, commercia tional
holdings. I am sure the field of debt
curities to
Let

me

give

you

an

example o
one-source of funds
by reference
to-some figures on
savings by in¬

own

1

v".

-

~

,

b^pks, postal
loan

savings* and savings

associations.




This

$701
"to'to

a

"necessary evil" during
period, but that some¬

-

It took

tensive

♦

of

the
each

inancing.toto-•;••■■♦ 'v-.-:toto

ence

could be done.
We were told in
thbse early days that there
wasn't
enough money available to mee

,

needs

the

as

vide

postwar

management of the debt.

In this work, I remember that
oqei of our first jobs in the war

*

share

a

all

But

that ownership is in a
type
security which meets the in¬

rate

Together,

1

recite

figures.

policy—these were beyond any prewar standards to
important factors which had see that ail works well?
Violent
be determined
step by step. market upsets would cause great

all

.

In¬

and

sharp jumps

war loans.
In
this way it wasn't so
shocking to
the economic
system.* But each
step- of the way it was

example,
they
the! debt, or

of

won't

owns

however, it policies

through the eight ,

not*

I

ownership

up

series of rather

Take

companies, they own $25
Dillion; savings banks own $12
Dillion; commercial banks own $74

gradually 'through dayto-day sales of savings bonds and
in ,a

for

billion

in interest costs of the two

by each of sible—that

surance

a

of course it would
have been im¬
As it was,

possible.

amount of govern¬

about one-fourth of the total;

a

be

$64

own

of

increase

much

;he various investor classes.

simply impossible to handle.
;If

is.

repre¬

sented by the
'

"

•

Many people used to think that
quarter-trillion

It

ment securities owned

Debt

about which I want to talk
to you
tonight—PUBLIC
DEBT
MAN¬
AGEMENT.
Our
war-inherited
debt of $260 billion is
about five
times the debt before
the war.
the

itself.

easier to understand when broken
into the segments

problems are present in
"considerable quantity in the field

of.

by

down

•3, New

debt

managing the public
A figure of $260 bil-

today.

aggregate

problems

:

of

ion is hard to
grasp—it is just a
big figure when looked, at in the

new

we

ebt

c

faced with
many

are

good way to look at .the

a

roblem

our

courts; like¬
wise, it must be true in all lines
of work.

"get them

.

and

made

war,

would have

to

to-

20%; most the war
Federal se¬
banks, however, showed decreases thing should be done
World I experience.
The debt to¬
about it as
curities.
Around $30 billion of
with the extreme decline amount¬ a
longer run policy.
It is argued
hese savings was placed in check¬ day is about 10 times the World
ing to about 30%. -?Yet, ;in this that by funding this
Warv'l peak.
Interest expense,
short-debt
ing accounts, and about $20 billion
situation the debt pay-off program into
however, is only about five times.
long-term, the Treasury could
ook the form of
was
currency.
The
carried
out
with
he
barely a stop worrying about this part
explanation for this is, of
of
objective of the war loan sales was
ripple in the money markets.
to:, the debt.
course, that the average rate on the
to increase the portion
going into
It seems to me that it was a
ederal debt is now
I do not agree with the
only a little
ederal securities and to decrease
major
good thing for bank portfolios to premise
more than 2% as
compared with
here* that short-term debt
the
ready money on hand for
lave been concentrated in
a peak of 4.34% in 1921.
short- is especially vulnerable.
With the
On the
quick spending by individuals.
erm
921 rates, today's interest
issues—making it possible to contrary, I feel that the shortcharge
I
am
mentioning this back¬ would be more than $10 billion a adjust to such * violent deposit term debt is
actually easier to
ground to show that the
seemingly year. Moreover, the World War I changes in such a short time. handle than long-term debt in
the
impossible becomes much "more rates
This is an example of
involved considerable
proper debt event of severe market
tax
diffculties.
understandable
when
broken exemption whereas most of
management
by
the
our
Treasury, Maturing debt can always be re¬
down into the various little
both in the stages of
pieces present interest is fully
"looking- financed in such form as will meet
taxable,
which.make up.the whole.
'Also, which further widens the spread ahead". and in the stages of later the market conditions at the

face

the

order

to.to'to 'to '
'
' '*
shifting of funds r The Treasury's policy in
fitting
bank and
the securities

bank to

region.

,

in

in

way."

of

issued to the1
needs
largest of the various investor classes
has
banks, changes in de¬ resulted in a substantial volume
of
mand and time deposits
together short-term securities.
It is

now

them

volume

defense and veterans'

grams..

Furthermore,

^'interest"

i<>

bound

that

to- be

toAto ix Vi'tor

management,

pro

that all of

item

with the success of this

one

o

Total

us are

demand

toi-.1'}:u

i

deeply impressed

deposits

toi •><.-.fit.

•

ope$ation
were

re-

.to? to>Ir,p

namely, the question of
"funding?
the debt.

This, to the age-old .doctt'ihe that shprt-teriii Issues should

commercial

the process.

-to'to

«

Let

me

give

you

of what I mean:

be refunded:
intoloftg-term issues
to'^rtWtM'XWV MM-.' ■Treasury offers

an

banks,-to

;.

,to.

.V

illustration

Suppose that the
long-term bond.

a

V

"'ii

Number 4580

Volume 163

XV

XU

[THE COMMERCIAL & FINANCIAL CHRONICLE

6VVO

ess

too, if it involves the sale of

well.- That is/ subscriptions short-term issues at a jDfemium to
exceed the amount offered by a buy long-term issues at par.
*
over

•

good margin

and the bond is

so

popular that it goes to an imme¬
diate premium in the market. So
far so good.
But now let's raise
some questions as to what the ef¬
fects of the issue
are
on the
ownership figures. Did nonbank
investors,. really
add the full
amount to their holdings? Or did
they sell a substantial amount of
other issues to
banks to raise
funds?
Perhaps the banks: in¬
creased their holdings by. large
amounts in this way. It may even
turn

out in the final analysis that

bank holdings

went

up

by about

much as the amount of the new

as

issues
:/ In

sold to nonbank investors.

other words, the debt in such

would be up and the banks
would hold the increase. lit; is
true that the proceeds of the new
case

a

would be used
bank-held debt, thus
bringing the picture back to very
much what it was before — with
one important exception, however,
that a long-term higher rate issue
would have replaced short-term
lower rate issues. It is easy to see
who got.the benefit of this opera¬
tion. -But the taxpayer pays the
bill in the form of higher interest
costs without any material benefit

funds presumably

retire

to

No Undue Worry About the Debt
In

closing, I should like to

that I

see

no

say

to worry un¬

reason

duly about the debt. I don't

mean

operating, earnings after taxes,, it
is* necessary to consider the taix
liability in 1946. Due principally

securities at current market yields.

to the, presence of tax-exempt
terest and deductible losses

effect

bank

in¬

and

chargeoffs, the 1946 net current
operating earnings were net after
taxes

;

which

were

substantially
4J/2%
New

For

held

.

example,

current

combined

37

debt

it

is-

>

Federal

normal/ and

surtaxes.* If these banks had mio.
of exempt interest and no deductible
course, keep its policies flexible/ losses, they would have had to pay
keep constantly alert to changing a rate of 40.8%, which is the net
conditions and should continually of today's New York State and
work

the

resurvey

management

Treasury J should,

the position of the vari¬
of

investor classes in the light

ous

the current economic environment.

Thus

in

an

atmosphere

position to

at the
It
be

k

do the

right .time.

the
City

operating earnings of the

banks

would, be

extended-to

process

pay

income

.

taxes

at- a

rafe

profitable proc-

as

a

in

is surely unfolding.

,.r„

.1,

'■

.

••

.

v;i»

.

Commercial bankers have plenty •
to think about.- In addition to the

then 4he combined net
current operating earnings after
taxes are indicated at around $120

will

1946,

million

for

from

14%

current

1946,

always many sides to a

whole.

1947, or
the

$140

a

difficulties * outlined,- the
condition

has

problems

which

present
longer term
demand present

other

operating

Such

excess
over

1947

?

of

losses and

operating earnings and the lower profitable operations. Sound bank¬
results indicated for 1947 explain ing conditions would soon dis¬
?
the
downward
course
of bank appear,1

(Continued from page 1655) - ;
; stable, •' many
stock
quotations.
These lower
on the books of the banks at $2.2
folios - remained
changes occurred. Business loans earnings will come as a surprise
billion is appraised today at $1.8
went up as security loans came to those who only yesterday were'
a
billion. This is a discount of $400
down.
For, the year as a whole bewailing "the inordinate profits
million or over 18%. The discount
is

'

greater when other

undisclosed

taken.into account. As
long as this condition continues,
new banking capital will not be

values are

attracted,

no

matter;,'how much

total loans of

the 37 banks aver¬

of

'commercial

banks."

In 'the

the real and pro¬
from loans reflected an average spective earnings determine val¬
rate of about 1.80%, increasing as ues,
not I the
inflated ; figures
the year ended. Investment portr. offered to substantiate some po¬
; *;«1
folios averaged $16.7 billion with litical or social thepry.

aged $6.7

market

billion...Interest income

needed, except at great' sacrifice
interest income at ap average rate
by present owners.-rU
•
of about 1.40%." At the year-end
Shares of leading banks in the
.security
holdings
were
down
United States are selling at a dis¬
13V2%
below the $16.7 billion
count. Why? Because bank earn-,
average,' reflecting / the redemp¬
angs—net current operating earn¬
tions experienced.
' ^v
;
:
ings—are too low. Banks do not
have large enough normal earning
1947 -Prospects—14% ■ Decline

The

.

place

conditions responsible for

declining

the

on.
on

as

earning

power' of

There
Bankers

operations,

they

How many bankers

the

calculate

each

remembering
responsible to their

always

are

stockholders.

from

strong

rates will

adjusted up¬

only; nominally.

perhaps

ward,

they* were.

as

be

change,

the

However

small

effect

corollary

on

the

in

the

rates

short-term field will be real and

consequential enough to give com¬
mercial banks a sounder basis for
their

operations.;:

.

>-l

Banks cannot afford to wait.

If

managements now face the
facts of the day and are alive to

bank

the

necessities

secure

*

of their

situation,

m.)i

doubt take action: to
better
results
for their

they will

no

stockholders. In the long history
of these banks far greater obstacles
have been overcome. In the past,

industry and banking have scored
their greatest - gains by finding
broader markets for their products

and

services,

and

efficiency
situation

by

increased

and lower costs.
The
today again offers new

opportunities to forward
management.
The market

bank

stocks

looking

for New York City
discounting the

is

The rate
banking capital,
is
no'
easy
solution. currently indicated at 5V2%, is to'o
must re-examine 1 their low. This earning rate, now low,

.

that

of

Treasury bills and % %■ rate
Treasury certificates are ;no

longer
decline of day thinking and
present day solu¬
These
net
tions,::/ /

'

*

/

the
commercial
banking ^machinery of this coun¬
try. It is apparent that the rea¬
sons for maintaining the %% rate

million

profits and recoveries ating expenses, provide for income
chargeoffs. History taxes, and leave a fair margin for
teaches that this happy state; will the hire of bank capital. Healthy
banks are necessary for all of the
not continue indefinitely.
business of the country. Too low
Prices Set By Real Earnings
an
interest rate on risk-bearing
The insufficiency of net current loans will eventually undermine

/:k: ••••f

Earnings Prospects of
IIIIiiN. Y. City Banks
-

their

on

ber

no

greater than the percentage paid

policies
among
bankers,
businessmen, economists, and the
financial community in "general.

could be exten¬

sively used. It is a

rate

necessary

risk assets?- The truth is that in¬

creasing risk and decreasing earn¬
change is not going to'take place, ing power are early symptoms of
/
in one day, but the development potential weakness.

earnings
in
Banks are qnce again financing
earnings would
private business. Loan totals are
given issue, particularly one as represent a return of 5%% on now at record highs. Many believe
total capital v accounts compared
large as this. Even in the field
that this trend is likely to con-'
with 61^% in 1946. Using current
of debt management this is a con¬
tinue.. :
'' - *
" ■
annual rates; cash* dividend pay¬
structive thing because it empha¬
The elementary truth still holds
ments will constitute 3%%, leav¬
sizes the
alternative .courses of
that interest earned from loans
action open to the fiscal author¬ ing an operating retention of 2%.
These results - would be before must exceed losses resulting from
ities. It is the duty of the Secre¬
losses and 'chargeoffs,
and ex¬ loans-—otherwise banking capital
tary of the Treasury, upon whom
clusive of recoveries and profits. would soon be menaced. Interest
to the economy as a whole.;
the Congress has placed the re¬
earnings are immediately visible.
This example merely points out sponsibility for properly handling I It is, of course, impossible to
Inevitable losses are apparent only
forecast the net of capital trans¬
the fact that debt funding should the public finances, to weigh all
later, .The returns do not come in
actions In: 1947. /Banks always
be pursued carefully. This is par¬ points of view.in reaching his de¬
have losses and chargeoffs but together.
cisions on public debt manage¬
ticularly true because nonbank in¬
The excess of loan interest over
vestors own enough bank-eligible ment which should always be in only sometimes /profits and re¬
coveries,
In recent years banks losses must be large enough to
securities so that this switching
the best interests of the country have fortunately experienced an meet its increasing share of oper¬
around

and

fair

•

ment /

are

.

/If in 1947 the 37 banks have to Greater .Risks—Smaller Earnings functioning

disagreement on debt manage¬

There

>
:
**
\
Today such Treasury borrowings
commercial banks are coming

payer.

35%/rOf course,' such a 'portfolio

V :

full

right' thing
•'
j

inevitable that there

is

York

Since Decem¬ v The banking and fiscal agencies
1944,, the :% % certificate has. of the government representing
Federal income/ tax rates/ since been the
diet -prescribed/by the- the public interest,/ must "make
the New York tax is deductible
Treasury for commercial banks. T certain that no action of theirs
jf*
,.-v*
1"
in computing the Federal tax.
hinders
or
restricts
*/ ;-*£'.,/r*. %
the sound
'» \/'«'•
*v: *? • ,i ''/iA'
}>f\
•' t

Treasury will be in

awareness the
a

of

see

us

Treasury

borrowing at low cost to the tax¬

Assuming a yield, net after'
down.
The question is, to what
amortization, of 1.25% „on their
extent does the continuance of the
present lower portfolios, and ap¬
wartime measures prevent com¬
plying today's tax rate of 40.8%,
mercial banks
from realizing a
the 14% decline from 1946 in net

York State franchise tax and 38%

though

let
New

banks.

satisfactorily
large.,, Im. its

statutory

the

facilitate large-scale

to

at

below

the

fully ^taxable/eligible

on

that it doesn't have to be watched,
but I do believe it can be managed
even

1689

actual

loan
a

made

1%%.-

at

income

transaction?

of

earnings in 1947.

earnings

will

on

eventually, get

better—pro¬
do theix

vided bank managements

part. If so, bank stock prices today
suggest investment possibilities."

For

$1.0 million loan is

example,

note/adds

net

lower

The

customer's

$1.0 "million** to" the

bank's; assets. The customer's ac¬
count, credited with the proceeds,
increases ' the

bank's deposits

James Brennan Joins

Hoit, Rose* Trosleri;

by

James
L - Brennan,' formerly
Does 1V2% mean with J. F. Reilly & Co., has be¬
period.5 The true? situation $1.0 million.
$15,000 to the bank? Not quite. come associated with Hoit, Rose & '•
was delayed in making its appear¬
First, the New York bank must post
ance in published earnings reports
due to thje presence of such factors with the Federal Reserve Bank
as
offsetting tax." credits, carry¬ $200,000 additional- required re¬
An estimate of .1947 prospects over of high bond yields, and un¬
serve, equal to 20% of the deposit
can be ventured at this time based
realistic handling of bond pre¬ increase. This it would ordinarily
on the first 60 days of the year.
mium
amortization. • The
facts do by selling to the Federal Re¬
This will at least give the present were further submerged
during serve Bank riskless Treasury cer-.
general direction of bank earnings. the war years by the rising rev¬ tificates, losing thereby 7/s% in¬
come on $200,000 or $1,750.;
The
Higher operating costs and lower enues resulting from the -greatly
balance on the profit side is now
investment income, offset only enlarged holdings of government
banks already present

war

in the pre¬

.

,

power,

relation

large enough, that is,, in
to t their
stockholders

For this reason: the in¬
vesting * public : ■ appraises ; bank
stocks at a discount. Recently, the
equity.

discount has
that

even

widened, intimating

rate of
difficult for

the depressed

earnings is becoming

,

increased interest in¬ securities due to deficit financing. $13,250. ;■ The increased r deposit
come from loans, make it apparent
The basic longer: term condition, means additional 1/12 of 1% Fed¬
i;
that operating earnings are lower however, was further intensified eral Deposit Insurance assessment
1946 Earnings
r:*' v.'or
$833.
Our > balance is now
in 1947.: ;
/ •/_ ;
by the continued upward trend
I
What were 1946 earnings of the
$12,417.' What about : taxes; of
Total loan portfolios at $6.4 bil¬ in operating costs. Today, with the
37 banks, and what may be ex¬
40.8%? - Our - net- profit without
lion "I are
running about 4%% War Loan accounts down, and with
pected in 1947? For the year 1946
considering the expense of secur¬
below the 1946 average* The cur¬ redemptions still proceeding, the
net: current operating . earnings,
James
I. Brennan
ing and servicing the business is
rent yields is estimated at about real situation* is moving to the
exclusive of security profits, re¬
surface and will soon be in plain now $7,351 or less than % of 1%
2%, or Vs of 1% higher, reflecting
after taxes, and this is risk busi- Truster.
coveries, losses and chargeoffs, ol
74 Trinity Place,' New
more
fully the increase in .the view—the effects of rising costs,
these New York City banks were
York City, in the firm's Trading
,t ness, '
volume, of higher-yielding com¬ falling rates, and high taxes.
aboui'$140 million, a realization of
■'
/*• /,?;•: ••
Greater
efficiency
can
help, Department, -/r;
A factor which has not as yet
mercial, loans and the decrease in
> xi
6¥2 % on total capital accounts.
too,
increased service
the. lower-rate loans on govern¬ received due recognition is the perhaps
Casli1 dividend payments totaled
ment
securities.
This ..means: a question of renewability of earn¬ charges. It is clear, however, that
Now With Tifft Bros.
$75 million or 3%%, leaving a pet
the unsoundly low rates at which
modest rise in income from loan?. ings. By that we mean, are re¬
(Special to The Financial Chronicle) p
retention from operating earnings
loans are being made will have to
However, this increase in loan in¬ ported earnings again possible un¬
©f $65:inillion or 3% which was
HARTFORD, CONN.—Lewis E.
der the changed conditions of to¬ be adjusted. These low rates were
come
in
1947 does not : appear
added tb capital funds...,^
To what extent do such set by the riskless short-term se¬ Oakley has been added to the
likely to be sufficient to meet the day?
For ■ this group of bank stocks
curities of the Treasury. With the staff of Tifft Brothers, 49 Pearl
increase in operating costs. Gross reported earnings reflect condi¬
to be quoted at book value, they
war over, business is replacing the
income other than interest, name¬ tions now obsolete, and therefore
Street, members of the New York
would have to be priced at 15%
no longer renewable?
Treasury as the principal bor¬
times 1946 operating earnings and ly/fees, commissions, trust depart¬ V In the estimate for 1947, invest¬ rower, inheriting these low rates. and Boston Stock Exchanges. ' Mr.
ment,
foreign,, etc.,
may
be
would yield 3%%. Actually, cur¬
Banks in their competitive fervor Oakley was formerly with Braiassumed to continue at about the ment income reflected an average
rent prices at their 18% discount
have not distinguished between
nard, Judd & Co. ,•
1946 figure.:/;/:
;
r] portfolio rate of 1.46%. Can com¬
.from book value are 12V2 times
mercial banks get such an average the Treasury's riskless paper and
Total investment portfolios are
1946 earnings, with a yield cur¬
rate -today,
carrying such tax the less certain promises to pay
With Trusteed Fds. of Fla.
rently of over 4%.
New York currently running about 15% below exemption as indicated by their of other borrowers.
The yield is 1946 effective tax rates? The an¬
bank stock prices as shown in the the 1946 average.
(Special to The Financial Chronicle) / ;
The Treasury and the Federal
American Banker Index this week slightly better due to the decreased swer obviously is no. The market
MIAMI, : * FLA. — Wesley ; E.
amount of bills and certificates.
Reserve authorities together have
were at a three year low, i.e. 41.2.
for eligible government securities
Thompson and Daniel T. Winter
-From this and the recent trend in Actual investment income is off has been telling this to bankers a great responsibility. The present
have become affiliated with Trus-y)
bank stock quotations, lower earn¬ about 12%. v ^r f-iS'j
day after day. It is possible for artificially low ^short-term rates
The
ings in 1947 seem anticipated. operatift;^f:.^bjfcf;jEj in- every banker to calculate the are a carry-over from the wartime teed Funds of Florida Co., Bis^
1946
was
a - transition
year. come taxes is4o!Wp(^bputfl^;%. In effect on his earnings, if in sub¬
cayne Building.;
period. These measures were taken
Operating expenses, mounted
order to estimate 1947 net current stitution for present holdings, his
steadily. Although total loan poro->
banks to

maintain.

partly

by

-,Vr

'u

.

_

-

■

J

r

.

>m

,

..

'




.

—

v

il

1690

THE COMMERCIAL, & FINANCIAL -CHRONICLE

$200 Million AT&T Debentures Awarded and
Sold by First

the

whole

the

eventual

required

sum

impact

may be as¬
Congress with

sessed,'furnishing

Boston-Halsey Stuart Group

the

of

that

so

Thursday, March 27,
1947

United

people.

States

and -its

that

^■,

-

country to which it
proposed
that government

First

Boston

a

It

of

underwritten

purposes.

in

In

of the

agers

assembled

$690,000,000 for
and

investment

bank¬

to members of the National Asso¬

ciation of Securities Dealers at
concession.

Insurance

companies,

Proceeds

-

from

securities

new

the

will

sale
be

of

20,623,476
stock, $100

shares

of

is

debentures

at

ments

the

are

subsidiary and asso¬
company plants and to its

impoverished and dis¬
organized world. Appeals for aid
continued while recovery is
at
best only dimly visible.
Great
Britain, with the aid of $5 bil¬
lions

an

loans

in

from

the

States and Canada, appears
today
to be in a more desperate eco¬
nomic

plight than

a year ago.

By the beginning of 1947 much
'of our optimism had been swept
away, to be succeeded by a more

,

sober
:

fairs
of

approach toward world afand the bewildering course

overseas

-developments
to

understand

into
that

world leadship is expensive, and
that it brings new responsibilities

.

grants

each

the

prior to April
and at 100 thereafter.

1,

is "all

and subversion

Note
the

by

but

has

private

impossible,

relief, and those
development. Doubtless there

pressure

at

any point of
Greece today,

advan¬

tomorrow,
next

who

week

tell

can

there

a

will

large
Korea

where

be

In

meantihte,

United Nations

or

such

the

as

the Conference

of

United

*

States

seem

more

nearly

British

determination ended the
bouffe of Moscow's move

opera

without

intransigence frustrates all efforts
to appease, Russia has been given
her

lief

"comeuppance"— to
not

only

jority

in

decent

of

the

the

great

re¬

ma¬

men

this

country, but of
everywhere who are
interested in world rehabilitation
rather than chaos.
^

It

is

doubtful,

though,

that

many comprehend the full signif¬
icance of the new course we are

undertaking. For some months it
has been apparent to seasoned ob¬
servers that Moscow was
promot¬

much

uninformed

too

criticism—may

resolve the present crisis. But
not
for long. Time, works in
Russia's
favor at the
moment; Communist

ideology
present

-

be

can

state

patient

of -world

in

the

affairs,

postponing the

next incident until
the fever of this one has
subsided

and
to

a

democracy again is
sense

reason

if

a

of

security.

lulled in¬

For

that

I believe it would be
better

capital

budget were set up
large to encompass

sufficiently

policy that would result in
economic disintegration in those

probable needs in all of the areas
that experience and
observation
indicate
may
require financia

territories

help, and to

ing

a

she

had

'marked

for

political conquest.

Poland, East¬
Germany, Hungary, Austria,
Rumania, Jugoslavia and Bulgaria
have been stripped of the means
'of production, reduced to
vassal
ern

-

states dependent upon the Krem¬
lin for permission to use
even the
food

they have left

sistance.
off

guerillas

,

Greece

balance

by

for bare sub-

has

civil

been
war

swept
whose

from and are sup¬
ported by surrounding Soviet terTurkey is kept in con¬
stant ferment by threats of
en¬
circlement. The whole Near East
come

ritory.

is

restless, with

"jlfpicion

more

than

that the Palestine

a

mess

sus-

has

'Muscovite overtones., India
is in-




tions for its

write

use

the

specifica¬

in advance.

During the early

years

of

the

recent war, the
comment was of
ten made that
assistance render¬
ed was "too little and too
late,"
and so
tragically futile. In the

struggle

wc

are

now

undertaking

to establish the
kind of world

envisage, financial power is
military might, completely

we

like
mo¬

bilized and ready for instant
duly
its strength is there for
all to see,
and it may not be
in

required; usee
driblets, it is soon dissipated
Calling on the people of the
United States for
recurrent sums
whenever new crises
appear, as
they will, endangers the whole
campaign. Better far to estimate

system

to

the

or

mine

so

little

we

failed

V//v//

,

consideraher fellow

and

-

the

No.

com¬

in

-out

a

to

half-hour broadcast in
Eng¬

a

America:!

Freedom of trade
stood by financiers

under-'

as

(sic)

like
Abbink is the
establishment pf
dictatorship of the American

:>

United

speech :of

attack, ; saying among
things, equally
inaccurate/

lish beamed to North

.-

1

enemy;
Moscow radio'

for

other

a

ported

pose

goods

quired

for

What

and
local

assurances

services

to

thorities

and

that

operations

would

on a

trade,

to

im¬

economic /sys¬
other countries. More-

on

the. American
/ propose to utilize the
lomatic machinery of
; States
to defend their
over,

au-

monoplies
State dip-

the United
selfish in¬

terests, to insure America's bil¬
lionaires the maximum

prevent

sound basis?

world

'

ex¬

the part of local

on

in

America's

tem

operations?
that private

irregular demands

actions

dollar

re¬

enterprise will not be subjected

for

is

recently singled

promulgated

//

profit.in

■

The

was

more

for

from

.

public

-

overseas/commitments

ernment/^

making

■'» To/World

mission and
some

other

considerations

treaties

pf which

and,.cause

and

-

are. still

for

contracts,
operative,

perennial,dispute.

on

counterparts when they-enter
market with branch

own

sidiary

our

.sub¬

operations.

The

opportunity

or

some

at

form,

some

but

be granted only on
that they lead the

time and

they

should
the condition

way and smooth

the

path

ment

so

may

that

play

private
its part.

There actually are
world
which have

invest¬

most

enlightened/ attitude

toward

in the

them

a

a

living,

that This

country is morally obligated to
share its wealth not
only without
return, but without question as to
the treatment of its
institutions

or

nationals.

Realization of this fact led one
of the committees of
the Nationa
Foreign Trade Council recently to
make

these

ample

suggestions

to

high

stewardship
40

1.

of

all

substance
nate

That there be immediate
ference
between

con¬

governmen

and

American

"business

banking to determine
developments
•

may

not be,

what

overseas

and
new

are^ or

with

by

advances,

of

the Islands

that

sharing
other

ex¬

because

submit

the

countries

nancial

of

less

means

we are

to

demand not
favors,
treatment for our

perfect, but

comparatively it
In

/

recent

a

World

js/solVeflt;;/////
address;, at

Trade Conference

cago, I made
would like to

in

the
Chi-/

suggestion that I

a

repeat

this

to

au¬

dience.
It was that the United
$
States begin serious consideration
of a return to the'free
coinage and
circulation of

without it

and

there
ment other than

security

is
a

/

in

fair

be

ineffective;
un¬

consideration for
to participate

overseas

system

economic

based

embrace

de¬

velopment.

as

on

our

in the interest-of afff^tntheVargument is

and

as

the

Monetary

Fund.

-

Why

make concession after con¬
to
Soviet theories,

we

cession

arid;

permit Moscow's gold meanwhile
trickle into foreign black mar¬
kets at prices
to

ranging
.:

■

we

up

to $100

//; v.,//'/,;

iike it

or

/I/

not, let's

the fact that, as a nation We
in the midst of a world
strug¬

gle, politically, economically and
morally,; .with Communism, / We
at

are

a

disadvantage politically
meaning of words
twisted
"democracy,"
for
instance, can .be assigned
various meanings in translation.
We
must,
therefore;, <! emphasize
our
economic/strength to over¬
come that
handicap.
Once Rus¬
because

the

be

can

—

-

sia

and

vinced
to

not valid

-Many have

should Russia cooperate in a sys¬
tem she pretends to abhor, so long

her / satelites

that

lead

'And: the time to exact
'-such- security
treatment is when loans are in
the

ed.In The present * State of
world

which I

values

own.

we

the

are.

way

/

negotiating- stage, not as a sup¬
pliant dfter they'have been
grant¬

an

expressed surprise and disappoint¬
ment that Russia has withheld ad¬
herence to the International Bank

are

fi¬

thinking; from

system based on bar¬
ter—which
Russia., wants—to a

of

entitled

and

world

economic

Whether

United States

all

CommunismJ overnight/ It would
divert

per ounce?

little induce¬
vague

-

as

.

face

but

means', of /s timula ting its
trade. A move so dra¬

a

the Teestablishment of:
gold would confound and- dis¬
credit the
international.apostles of

fortu¬

tation—private industry—will
;

as

foreign

our

in the team of world
rehabili¬

handicapped

kets

.

in

private enter¬
prise system. Without it one
part¬

ner

pn^j at
the

industry:

for

over

I

years,

return

Philippine

exceptional

for

authority in Washington, and to
stable
ask these
searching questions
behalf

is

our

developed

philosophy, stimulated by politico
agitators, that the United States
owes

Republic in return is free trade
with the United States
until 1954,
with graduated
increases in duties
thereafter; until full
parity with
other nations is
achieved in 1974.
Granted that the

areas

terprise may not be

matic

a plebiscite it
accorded to Ameri¬
system under which in¬
ternational loans are granted for can citizens property and other
rights paralleling the constitution¬
specific purposes on
any
other
al guarantees
basis than one of
assured to the Fili¬
eventual re¬
pinos themselves. The considera¬
payment.
Not
only should all
tion obtained
loans from public funds
by the Philippine
provide

in

example to
Private en¬

.

a

reimbursement

itself; the

United States is the
which humans aspire.

gold; Every trading
Business in the United
States asks nation of the
world,: with The
no/favors in its overseas
expand important exception ,/of
Russia,
sion but it ' expects treatment
as
wants its
currency To have a high,
fair: as; that .accorded
its foreign
stable value in international mar¬

available when the determination
to advance is

support

•

.

in/their

characteristics of our en¬
terprise system that we build selfbv

at the gov¬

War I, private and political world
bankers exacted various
fprms of
concessions by means- of. tax re¬

the

reliance

questions

disetiss in their
undertakings for

private sources, are in a complete¬
ly different classification. It is one
of

these

questions, too, that private bank¬
ers*, will need
to!ponder, and to

development,.» how¬

whether

ever,

to

answers

foreign investment that
has been
displayed -recentlv was
Pearl
Harbor
in
to interfere in Iran a few
demonstrated. The
support of
a
months
people of the United Staies will that taken by the new Philippine
national policy. Like a spoilt dar¬
ago, plain talk from Washington—
Republic a few days ago, when
find it difficult to
ling at a childrens' party, whose if it is implemented
understand or
by
united than they have been since

/•

Funds

week

The
time
was concerning
overdue,
last
'Greece and Turkey might have
week, to call a halt,-and the bluntcaused hysteria and apprehension. ness of
President's message was
Instead, despite the inferences his
ts 'strength, -not only Tor home
words conveyed beyond their im¬
consumption but for Russian con¬
mediate import, the people of the sideration.
Just -as a show
of

profits

Russia

of Communism. The

new

be, permitted

sorry spec-:

lending policy the United States
establish, because they know

our

States, and to obtain foreign
exchange to pay for the im¬

.

last

will

a

.had

precisely This

that

or

remit

Foreign Ministers, Stalin's rep¬
in areas which
continue
their
formerly seemed resentatives
lip
to
world:
beenTit<^ga|,
remote, and little of out concern. service
cooperation, when
humanitarian
It is fortunate, I think, that -we wearing expressions ;of offended
conside^tlaii#
were
involved, both as; to private
had reached this conclusion before dignity as their repeated vetoes
and government
cause annoyance when
the events of the past ten
relief, and itTyilF
confronted
days
continue to be when
burst 'Upon us. Under other cir¬ with otherwise unanimous judg¬
necessity/is
demonstrated.
.o.-//://!//•
cumstances, President Truman's ment,':/- ; ■/' /\/'/' • /'VvV,, /
/'/;/
message

be

not

we

may

assur¬

that

jf

our

rs

th#

Russia

travellers here and
elsewhere will
criticize most
vehemently in any

.

might inhibit these

terprise

capably be handled by the-Red
Cross,, in my opinion, than
by apy/
political agency.
It is interna/
Tonal in scope, and
could Enlist
he services of able
and distin¬
guished administrators
/to/carry
out any task that was
assigned!
America has always

public and state gatherings,

the

much

can

new

symptoms that the witches' brew
of political poison is at work?
in

fit

write
of

self-rehabilitation^

indeed

tion

to

part

to us—not to
in

their foreign trade dealings.
o/,/
occasion for UNRRA as aftermath will determine the extent to'which ■/ Well. if What I advocate is dic¬
of the war effort
industry will participate in the tatorship, or even dollar imperi-4
itself, but we
are discussing now
rehabilitation international job that needs to be alism, I'll still buy it, and so will
and the expansion of
private enterprise most of the rest of the world if
world econ¬ done, if ; our
system is to be extended to other given ' the
omy.;
V
opportunity.. Every¬
///'/,..i
parts of the world.
These are where, even in Russia
Relief needs

tage of interior lines for her nee¬
dling campaigns—she can apply
perimeter.

given

cur¬

weaken!

expected

Targe

destiny that
proclaim its decalog.*

to

individuals from op¬
erating at a reasonable profit?
What assurances that such en¬

the

for

will

panies

for

tremendous that it will

so

of

vances

the

that

busi¬

a

demand

be

outpouringstrings at¬

were

would present

we

faith in

aside

laws,' executive orders

taxes

magnitude of the
need, but because it is necessary
that a pattern be set before
pri¬
vate finance can
play its part, and
this can be done
only at 'the po¬
litical level. Here
sharp distinc¬
tion should be made between ad¬

thrives.

Russia

The

local

operations, what

will

ances

Government funds must neces¬
sarily lead the way, not only be¬
cause

that, like Germany during

war,

■branch

aid

and

in such

industry,

looks

tacle

private enterprise contemn
plating the establishment of

strain the resources of the
country
in each of these
categories if the
job is to be accomplished.

1977,

volved, and China—a whole world
of political turmoil in which eco¬
rehabilitation

venture.

ness

1652)

enterprise

pref-

To

loans; second,
underwritings by private financial
institutions; and
third, invest¬
ments by individuals or
corpora¬

thereafter, if

year

5.

or

funds is

whifch we had been drawn. Slow¬

ly * We began

are

1 %

United

of

A

—for

from local government
monop¬
olies, will be closed to foreign
investment?

my re¬

tions in the furtherance of

nomic

of raw

heartily a5;

no

we

therefore

rules.

world

allocation
materials, etc.?
/

What- fields

lending

it; three types of ad¬
possible; /first,, gov¬

103.75 before April 1,
1952; and at prices declining .15 of

Continued from page
to

our

and

the

';

compared

/^Wtters as:;Taxation,

sharI/

we

world T>nv

ing our fiscal structure;
We are
promoting the expansion of
our
system, and its adoption by
others

under-

,.^Mp|^ati^t«yprises

with.

rent conditions

given

receive
as

granting of credit
level, and it

phases of

see

ernment

America's Creditor Role
ance

I

vances

re¬

of

option

redeemed

to

will be

local government

,

not

international

to These

As

company at

ciated

assurances

.

provide funds for the company's
expansion program including ex¬
tensions, additions and improve¬

for

That

marks.

par

new

deemable

the

or

the

policy that I shall confine

and

common

540,925.
The

to

at

value. Total capi¬
talization of the company and its
principal subsidiaries is $4,853,-

the

used

funds

capitalization
of
adjusted to /reflect
i present
financing consists of

$1,273,004,400 of funded debt

vestors,

What

important considerations thaUarfe;
rarely invoked in the transfer dfc

company

the

jointly with private industry?

col¬

-arf^

/

years.

of/his

in commercial or in¬
fiscal
procedure,
in

which Mr. Morgan is expert. • But
I have
long Telt i that there

high level dur¬

a

that

and
nor

vestment

Outstanding
the

a

banks, trust funds and other in¬
including many individ¬
ual buyers, placed orders for the
bonds following expedited clear¬
ance of the issue by the Securities
and Exchange Commission.

construction

/new

is

ing the next few

made available

was

it

and continue at

ing firms from coast to coast. The

offering also

province

leagues,

expected that such ex¬
penditures will -increase in 1947

underwriting group

200

1

„

1946, the company expended

continued

our

dollars

artv

in

tached, realizing that under

■

ever

dollars

return

in which

that kind of
Russia would

plaud

;

bond issues

trade

of

its

isn't

more.

,

the history of corporate financing.
To handle the offering the man¬

brings

creased

blueprint for its use, and asking
..is
Corp. and Halsey, Stuart & Co., Inc. jointly the appropriate legislative com¬ / ^grants be made, what fields of
mittees for supervision of funds
headed a group of investment
/ industry or other
banking firms which publicly of¬
business ac¬
that are expended.
fered on March 25 a new issue of
tivity will be open for direct
"$200,000,000 American Telephone
and Telegraph Co. 35-year 2%% debentures at
The subject for discussion dt
investments of private capital?
a price of 100.75 to
yield about 2.72% to maturity. The issue was awarded at
competitive your meeting tonight, auspicious¬ ,,,/ What fields will be reserved as
bidding that morning on a bid of 100.30 and according to the under¬ ly, is the "Foreign Lending Policy
Vlocal, private or government
writers was heavily
of the United States." I
; monopoly?
over
sub-^
In which fields and
pretend
scribed the same day. It ^repre¬
no competence in
in what form will local
public finance,
own
governplant, and for general cor¬
sents
one
of the largest
-which is Congressman Crawford's ,/ ments operate alongside Of or
single porate
The

investment

where

2. As to each

buttress

in
our

the

: are.

con¬

determined

To

economic

world,

and

so

own/she will quick¬

ly- cooperate ;in the! international
agencies
lished

that

for

have

been

estab¬

rehabilitation, instead

1'

V6k*me

present terms although the door
country] facturing industries. In the latter, ing consistently for many ycafs as has not
yet been .closed on further
for the for instance, the number of fac¬ a result of conscious public policy.
Perhaps at this point a few fig¬ negotiation under certain condi¬
novice; the highest skills we pos¬ tories increased by one-third, the
tions.
number of employees doubled and ures will emphasize the point I
sess in engineering and adminis¬
to v do with our foreign tending
:
Acceptance of the Dominion's
tration will be required. Already the value of production nearly am making.
offer, in the aggregate, does not
policy, and I have finished. ■ The reports seep through the iron cur¬ trebled in the wartime period.
Supporting Statistical Data
President touched on it in his tain Russia has drawn at the That is record-breaking expansion
prejudice provincial capacity for
In 1940 Dominion and provincial debt payments. Provincial expen¬
message when he said, that the
Greecian border that Moscow is for a small country. Reconversion
spending of any funds advanced building a series of dams in Bul¬ to peace has been well advanced debt payable solely or optionally ditures are likely to amount to
in U. S. dollars was approximately approximately $350 millions an¬
to' Greece
or Turkey -must be
garia for flood control, irrigation and absorption of wartime work¬
under the supervision of techni-; and the
one-quarter of the total debt. To¬ nually with debt service around
production of power as ers into peacetime tasks has been
cians from the United States.,:,
day as a result of an internal debt $60. millions. If customary pro¬
an
example of the dynaism of accomplished without more than
Few
realize,
I think - how
increase and an external debt de¬ vincial revenues are added to the
Soviet theory—as if the Kremlin sparse regional unemployment.
Dominion rental the cause of bud¬
crease it is less than one-sixteenth.
scantily supplied government de¬ foresaw the current crisis and was
Nevertheless, the overhead to
partments are with men who have determined to demonstrate the carry such an expanded capital Meantime as} a result of redemp¬ get balancing does not appear to
tion at or before maturity such have suffered. On the other hand,
experience capable of carrying out
superiority of its methods.
equipment imposes an obligation
debt
was
reduced by approxi¬ the federal budget for 1947-48 has
a program such as that on which
; The
race
Is on between our for
low-cost
mass
production
mately one-third between 1940 not yet been announced and pro¬
we are embarked.
Once Congress
private enterprise system and its which will ensure disposal of

interposing ■. constant .* .vetoes
'del^-dVid-' friastrater- 7;
One more consideration that has

of t

which
•

THE LOWMERCIAL & FINANCIAL CHRONICLE

163 " Number 4580 7

;

-economy of even a small
under pressure is no job

.

,

<

.

legisla¬
tion,
administrative regulations,
doubtless already drafted in part,
will quickly appear, and depart¬
mental assignments of personnel

has

for

.

vincial budgets are not yet com¬
and 1947.
produced on a profitable
At the beginning of 1947 the plete. All of the latter which have
Esti¬
glad it has been publicly.pro¬ basis at home and abroad.
Dominion had $544 millions of appeared provide for a surplus
claimed, because I have no doubt mates have been made in the past N. Y.
payment bonds outstanding on current account in 1947-48.
at all of the outcome if all .of that no .less than one-third of
the
new
relations
come
and the provinces had $621 mil¬ Until

passed the necessary

control will

•It will

be made.:

be tragic

antithesis, Communism. I, for one goods

,

am

if oyr experi¬

in obtaining a staff for the
International Bank is to be re¬
ence

financiers of
take the
responsibilities placed up¬

peated;' In that case
proven

public
on

veto
to

ability refused to

them by a
power

charter which gave

over

their judgment

comparatively unknown

permitted full Canada's national income orig¬
Washington must give us inates in our external trade. Hav¬
that opportunity in our foreign ing regard to our increased Capa¬
lending policy, so that the Third city to prciduce and trade we
World of tvhich -I spoke earlier shall, therefore, continue to be
■may take its,.firm stand on our vitally interested in all proposals
for
liberal international trade.
side.
To be sure", if business—and I With us it is not a case of export
It is rather a case of ex¬
include both ...Industry and agri-; or die.

|-our abilities are

and in¬

experienced bureaucrats. It has
taken nearly 18 months ofi per¬
suasion to find the able officials
who this week have tackled the

play.

.

culture

in

the- term—is

to bear

responsibility in
expanding;, economy, it must
itself of some of the shackles

its full share of
this
rid

which Jjt5 has been bound,;
There musffbe an end to tariff

•with

lions—a

total

$1,165 millions.

of

we can

agree

that

you are

holding

diminishing rap¬

bonds which are

de¬
Ca¬
nadian public debts and whose
port or go back to the horse and servicing is of insignificant con¬
buggy days./7.a.7^
sequence in Canadian budgets.
In Canada, as in other parts of
; I do not think it would serve
the world, increasing industriali¬
any useful purpose to survey in'
zation has had

social consequences

into

perspective final conclusions

Having regard to annual service would obviously be -premature.
charges which should not run to
,7
Summary
more than $50 millions,
I think

idly in quantity, which are a
cidedly minor proportion of

detail

Canadian

Dominion

holders of Ca¬
at this point
of the conclusions

Because you are

nadian bonds I pause
to review some
we

have

reached/ The first con¬

clusion, I think, is that, notwith¬
standing the existence of consid¬
erable economic instability in the
40

years

prior to World War II,
steadily attaining ma¬

Canada was

and turity.

I hope that you are con¬

with direct fiscal implications. De¬
vinced that in her wartime effort
provincial wartime budgets and
subsidy;
eather-bedding," mands for more and more services financing. As far as the Dominion1 Canada evinced considerable selfon
their which weakens 7 our economic from governments have been cou¬
is concerned,
there are certain; reliance ; and financial integrity,
power of final decision be
structure by'discouraging produc¬ pled with measures for guaran¬
highlights which you may wish to particularly in her avoidance of
moved, as they have been. . Per¬ tion efficiencff No 7 business or tees of minimum social security
recall. I have already mentioned; lend-lease, in her treatment of her
haps -the financing with which
foreign debts and foreign credi¬
political leader of whom I know in the way of old age pensions,
we
are
now
faced unilaterally is a so-called "free trader," but mothers' allowances, unemploy-r that Canada's wartime financial;
effort was made without recourse tors, and in her ability to finance"
might-have been undertaken by there are still a recalcitrant few ment insurance, and so forth. This
the war a long more or less ortho¬
to
lend-lease from the United
the International Bank, if it had
7 - v. 7
to whom the: laissez fa ire era of is not the place to discuss these States. On the contrary we pro¬ dox lines.
been ready to function. But it will
the past is more attractive than elements of social justice and I vided
Secondly, I have tried to make
important financial ahd
be some months at best before this
the challenge: of the present and mention them only to put on the economic aid to the United King-, it clear that the particular seg¬
organization can fulfill the role; future, and who hope to fight record that the contrast between
ment
of
dom and other United Nations.
Canadian indebtedness
for which it was established, due!
pre-war and post-war Canadian
an economic war with outmoded
Secondly, a substantial reduc-, eligible for investment by banks
to the near fiasco that was per-;
in this state is of diminishing sig¬
weapons that have proven inef¬ budgets will be accentuated by
tion in our external public debts
them. 7;?
petrated in choosing its personnel., fective. '
*"'7
-tp/ ,'.
It is diminishing be¬
occurred although there were off¬ nificance.
j There is danger in the present
If we reexplore that path, the
In general, therefore, the im¬
cause the amount outstanding
is
setting items in our disposal of
emergency
that similar troubles contest is-already lost! ;;.:7 777u7'.
pact of war has been to leave our U. S. assets and your acquisition steadily contracting and because
loom., Reestablishment
of the'
political and business institutions of Canadian internal assets which its service charges are virtually
and procedures largely untouched
infinitesimal in Canadian budgets.
I do not wish to discuss at this

job - on condition that
tionable
restrictions

the objec¬

and

re-i

fundamentals.
It has, time. Moreover, I would estimate,
brought a startling en¬ that- provincial indebtedness was
largement in our economic struc-r reduced by $300 millions and mu-j
ture and an increase in social re¬
nicipal indebtedness by $150 mil¬
sponsibilities. We have today un¬ lions in wartime.
equalled facilities to earn our way
Thirdly,
Federal
borrowings
as a nation and, if there is cause
during the Whole of the \^ar pe¬
for concern, it is only whether the
in

for

In Canadian
(Continued from page

interest payments of our
bonds. There were lucky
escapes from crisis on several oc¬

pal or
public

their

however,

Credit

1650jv :f

world. We share with yourI selves the distinction of continuing
the capitalistic^ traditions which
war

riod were

no

more

than 50% of

Thirdly, while it is true
the aggregate
have risen

the

fiscal

during the war period,h
accounts vf both the

Dominion and the
evidence

that in

public debt charges

of

an

safety for debt

provinces give

ample margin of.

payments.

;f

Barring abnormalities, it seems
to
me
that * there; are
ample

post-war world will provide a
the Dominion's cash requirements,
congenial environment for our ef¬
grounds for sustained' confidence^
Our whole economy is approximately $14 billions;being in Canada's internal economy and
^economic growth forts.
borrowed largely from
institu¬
casions which I mentioned but I
and high living standards.
We geared, directly or indirectly, to tional and
private investors rather for her continued ability to raise
concluded that in the 1930's the continue
to^-bi*' one of the few abundant international trade.
the revenues necessary for debt
than from our banking system.
glamour days began to pass, to be areas where," In spite of foreign
service .and general government
In this respect our financing tech¬
Stability of Canadian Dollar
succeeded by financial conserva¬ exchange control,
foreign and
purposes.
;7!'7r-':77,,;7-,'
tism contrasting with the then
Mr. Freese has already advised nique, I think, differed from yours.
especially U. S. capital moves in
Ordinary federal revenues in¬
The Transfer Problem
(
current American experience and and moves out I with relative ease me that your specific interests
creased from $450 millions in 1939
emphasized by the outbreak of as far as we are concerned. More¬ are confined to your holdings of
With this reassuring conclusion
to $2,875 millions in 1946 while
war-in September 1939.
'
^ 7' over, theTe is every sign that we Dominion and provincial bonds
we can now turn to an examina¬
ordinary expenditures increased
7 ,I outlined some of the problems
intend to continue our democratic, payable in United States dollars.
tion of Canada's ability to meet
from $417 millions to $883 mil¬
created by the war for Canada traditions in a* world where au-; I take it, therefore, that you are
her external obligations. In other '
lions. In the same period net in¬
and the policies and practices de¬ thoritarian- Communism is raising principally concerned in whether
words, is there a transfer problem
terest charges rose from $113 mil¬
vised to meet them. As holders its head.
'■ anything has occurred in recent lions to $338 millions. Provided involved in converting an un¬
of Canadian bonds I hope that
doubted internal capacity in Ca¬
Ten years ago" such observations years to alter these governments
demobilization and veterans' ex¬
nadian dollars into an equally un¬
you will not think me. ill-advised would hardly.have been regarded willingness or ability to meet the
terms of the obligations which you penditures 'and foreign advances doubted external actuality in U. S.
to repeat verbatim some of the
as unusual.
It is an indication of
can be reduced, there is scope for
hold.
conclusions I expressed six years the world-wide changes emanat¬
dollars?
: ;■ 7. .
ax reduction and debt retirement.
As far as willingness is con¬
ago because they still appear to
By all reasonable odds it would
me to be true.
tV ing from war that one • now has to cerned, the answer can be made The yearly increase in revenues appear that Canada should suffer
affirm adherence to capitalism,
which supported the government's no disabilities in this resoect. Our
"I cannot bring myself to be¬ democracy and fair treatment of emphatically. Contrary to the ex¬
expanding cash requirements was resources havei not been destroyed
pressions made in some Qua£5fr®
lieve that there is anything fun¬ a neighbor'^ .property.
due, hot only to a general will¬
by enemy guns, our productive ca¬
in Canada in the depressed 1930 s I
damentally wrong in our foreign
I shall not detail to you the im¬
ingness on the part of taxpayers
pacity has been enormously en¬
exchange
relations with the pact of war upon the Canadian can recall no instance in recent
to accent new and additional bur¬
larged, our political institutions
United States. , . . Our shortage economy andmpon the Canadian years where even an individual
dens, but to agreement by the have
continued intact and re¬
voice has been raised to ajtei the
of U. S, funds is not due to any
way of life.
To an American au¬
provinces
to
yield important
fundamental relative weakness in dience our statistics may appear terms of our contracts arbitrarily^ 'sources of revenue such as per¬ spected, our controls have been
sane and observed, our ability to
I think I can safely strengthen
the Canadian echnomic or finan¬
picayune in magnitude unless they
sonal and corporation income taxes extend assistance to our friends
j
cial position but it is due to im¬ are increased twelve-fold to take your convictions on that score,
:o the Dominion Government dur¬
has not been impaired.
In these
I also feel that I can be equally;
pediments in the ready acquisi¬ account of the differences in pop¬
ing the war emergency.
tion and free conversion of foreign ulation. Nevertheless, suffice it to emphatic about the ability
the. For a considerable time the Do-; circumstances it would hardly be
expected that there would be a
funds.
Remember that while say that our wartime effort was governments concerned to meet
minion has been endeavoring to breath of suspicion about our ex¬
our Canadian resources, our pro¬
wholehearted^ ^it was guided by their external obligations such as=
7 7, "7,77persuade the provinces to con¬ ternal position.
ductive, organization and our peo¬ military and civil servants whose you hold. In part the answer deYet
in recent
days Toronto,
tinue this cooperation by renting
ple are being swiftly geared to policies were realistic and intel¬ pends upon the burden of the debt;
Montreal and.Ottawa have been
war we are prepared
to pull in ligent and it has left us strong in relation to the bugdet position o the Dominion access to these
important sources of revenue for visited by many representatives of
our belts so that neither our war
and self reliant.
Notable, I think, and in part upon the transfer a minimum annual slim of <5206,- American institutions who have
effort nor our friendly relations among our, wartime achievements problem involved in converting
been disturbed by reports of a
with, you will suffer.
We shall was our ability to avoid any re¬ Canadian dollars into American 158,000 with provision for in¬
creases
under
certain circum¬ coming devaluation of the Cana¬
do nothing foolish to imperil these liance upon your generous lend- dollars for debt payment purposes.
stances. The questions raised by dian dollar. Lending color to the
twin objectives."
lease policy sq lavishly accorded It is with these two aspects that
this offer .are largely of domestic reports was a softening in the free
We stood on I wish to deal now.
I. say i with pride that I think to your other allies.
concern
and need not be C°U" market quotation of the Canadian
From a budgetary standpoint
our own feet;
we lived up to those promises and
sidered here. They impinge on the dollar as well as in internal Cana^
our external debts, payable solely
with equal pride that we learned
basis of Canadian federalism, pro¬ dians in New York. The question
Productive Capacity Increased
or optionally in U. S. dollars, are
more than ever before the neighvincial rights and responsibilities is of some urgency at the moment,
no problem.
They are no problem and the division of geographical therefore.
borliness and helpfulness of our
.
Canada has ended World War
because the sources and magnitude
friends in these United States.
income within the Dominion. The
Let me preface what I have to
II, as she ended World% War I,
of the revenues required to serv¬
central provinces of Ontario and say, however, by assuring you that
without wartime destruction of
Canada Stands for Capitalistic
ice them have grown enormously
(Continued on page 1692)
physical resources butVf rwith'; a and because the amount of our Quebec have given clear evidences
Traditions
of
unwillingness to accept the
notable increase.in productive caexternal debt has been diminish¬
T In some respects Canada stands notable increase .in
out in unique relief in this post- parity both in
manu¬
have

brought

'

.

.

.




productive.ca-

natural and

U

1,'\\

•»'I <

I

n

1692

THE COMMERCIAL & FINANCIAL CHRONICLE

effect it will have
ket

Tomorrow's

and

port Bank,

Whyte

long

the

used

is

loans that
loans

new

obvious.

178

unless

time

tionary April.
The

;

market

&

has

gone

up

bat

hostile

a

[-Ih

a

of all kinds

/I k'V-'*

Street.

IT"

low ebb. Rumors

are

all

to

intents

J"1

in

and

means

On
to be

lead

a

face

of

it, there

long-term

no

about

of

circumstances

the

export

raw

to

long

out

income.

So

in

an

nada and in

■-2** 4

I'1

buy.

The bears are; equally Insiders
(: (you remember
and, are also looking them!) are
walking carefully,
around for
something to blame You can see that
by the aetheir
doubt^ onv;^^
J
tion of certain ^tocks. It is
So far this is all
quite rior- noticeable that while there is
r

mal. A market in which either

a

side is certain of its
is

Ifr- ■
16-

I- i: }v'
Wk

a

with.

It is when opinion is
in balance that
opportunities

excess

which; doesn'.t;

won't,

starts

go 'up,

or

down.

-

;#&

down

This,

to

a

will

you

minimum.

because of assistance

measure

agree,

is

an

this column said

rally to about the

wasn't

too

hard

178

to

figure
imagine

have

given" abroad

and

do

for¬

li¬

te:

for

stock

market

•

venture

guess

occurs

in the next few

other

decline.

I

don't think

that few, if any brok¬ this declinewill be

ers, were out of the red dur¬

ing February, and still fewer
will escape losses for March.

.though it

one,

may

down far in
points.
think we will see a

a

short

not

go
I sort of

and

deserves ;an

ket processes, supported if
by the international

sarly devalue the Canadian' dollar
after raising it to
parity only last
July.
■'
'

tion is
fiscal

out of

balance and when

unorthodoxy

is

impairing

confidence.
None of these criteria, I venture
to

is: applicable

say,

to

Canada.

Quite apart from present disabil-

fund

Canada

and

can

the

tion.

crystallizing on the' whole
subject, however. The study
which
Schram, President of the Ex¬
change, asked the Association
of;
Stock Exchange Firms to
make on. I >
the subject of increased
costs of !
doing business in the
brokerage! '
industry today is apparently
pro- ducing some very-tangible results-

ex-

As reported last
Week, the Asso-• "
ciation found thtet
average operating: costs
have <risen
23.99%
throughout
the "
since
industry; ""
1942;

I

j

in

this

World Bank News
I. (Continued from

mar¬

mone^

tour, of

bank,

To

no

cause

aragua.

in the
In

con¬

for

the extent that

000

by external, factors we
must persist in our
hopes that in
the slowly emerging new interna¬
tional
political instrumentalities
new

whom

shall

we

nations

look for

page

1649)

would

■

$600,000,-

or

expected for
/■

Leon

ecutive

to

some

*/V ;/:i/7/

Baranski, Polish

director

of

the

..

ex¬

Bank, is

questions

asked

by the Bank in

connection with Poland's
tion for

v

should be simplified. "Street",
reaction
to
the; Merrill.
Lynch

been
/ ••./

expected to return to Washington
next week with
detailed answers
of
the > Polish
Government to

encour¬

ture

'

•

/Mr.

applica¬

$600,000,000 assistance.

;;./_;

Members of NYSE Believed Inclined to Favor
Substantial Increases in Commission Rates
(Continued from

a

American
World Bank

;

international financial,

agement is the United States,

Fund,/

from

Latin

These, naturally, will be
development category.

has

time.

trade and tariff
arrangements we
can find
support for our efforts.
Not the least "of those

several

perhaps $500,000,000

are

affected

and in

returned

addition the World Bank ex¬
pects applications from
Italy, Tur¬
key, and the Netherlands.
From
the latter a formal
application for

con¬

we

recently

countries —t.he
learns that it will receive
loan ap¬
plications from three countries:
Costa Rica, Guatemala and
Nic¬

stability

can

1660)

World

who

changing

Accordingly, I feel I

page

From Dr. Harry
White—execu¬
tive director of the

We should not be expected

destiny there is

Broker's

losses

will

have

*

v

*

*

/■/"■//

'

,

Czechoslovakia last month sub¬
mitted to the Bank
pose of the

j ect fit

a

detailed ex-

$350,000,000 loan

submitted

pro-

last, summer.

weeks,

"

.

pr

man

and Marshall know. What

FP-" *

P.

Pacific Coast

p'
i

worst

ket.
it

Securities

are

enough

the

steels

performers in this

For the

reasons

Orders Executed

on

Pacific Coast Exchanges

Schwabacher & Co.
■■

Members
New

York Stock

Exchange
New York Curb
Exchange (AssociateJ
San Francisco Stock
Exchange
Chicago Board of Trade
_

14 Wall Street

draw

you > can

mar¬

your

own

Private
'

San

Teletype NY 1-928

JVires to Principal Offices

Francisco
—

conclusions.

In any case U. S.

Bethlehem

and

look

like the

—

Santa Barbara

Oakland

—

Fresno




Sacramento

two

stocks

now
we

will

buy when they back
away far ehough, assuming of
course that
nothing happens
between

now

and

it

definite for the various
brokerage

NYSE
any

new

them

fact,

has
for

Thursday.
—Walter Whyte

■

[The
article
time

j

.

views
do

not

coincide

Chronicle.

>

expressed

in

really

the

submitted

revised — schedule to
their consideration. In

Board

of

Governors

of

the NYSE hasn't yet taken
up the
matter of revising rates

though it

is

likely it will receive the

ommendations
the

and

Association

Firms

on

rec¬

proposals

of

Stock

of
Ex¬

the

subject at
its next policy
meeting on Thurs¬
day, April 10. ■/
:■*
;
Merrill

More next

not

op¬

—

the

the, im¬ change

mediate future that will
upset
the caluculations.

New York 5, N. Y.

COrtlamlt 7-4150

increase,

any

among the

houses—large or small—to be
behind posed to at this
time since

Steel

iiy

against

is
large houses where the
look like the best
performers opposition is most vociferous. Ac¬
and, at the same time, the' tually, of course, there is nothing

Oddly

&

Beane

record

as

Lynch,
has

Pierce,

gone

being

Fenner

publicly

opposed

to

on

any

underwriting, invest¬
banking, over-the-counter

ment

trading, besides

a

commodity and

rates

any major adjustment ol

to

increased

costs

by

the

brokerage
not

are

industry / as a whole
effected; it would stand

to

gain if some of the smaller
houses especially decided as time
on to discontinue
operations.

They

are

[those of the'author

Opposition forces generally are
inclined to take the view that
this
is not the time to increase
rates
that a larger volume of
would "right
mums

should

in

trading
matters, that miniespecially

commissions

not

be

increased.

Even

do
to

freeze

small

the market.

investors

out

ol

Many brokers, how¬

increase in commission rates. In ever, are
convinced that the only
any
fact, it says it favors a reduction realistic
way of rneeting increased
of the
presented as in the costs to the small investor; costs-ltbateis, of meeting
higher
struc¬

*

♦

*

,

'

Mexico, whose president visits

Washington, April 29,

is reported

as

readying, applications
World Bank and

for

Export-Import

Bank loans.

5

With King Merritt Co.

(Special to Thc Financial

Chbonicle)

JEFFERSON CITY, MO.—Mrs.
Georgia F. James has joined the
staff of

King Merritt & Co., Jef¬

ferson Building.

:

-

of those who favor
increases
not want rates to be such as

those

However, at feelsthe:rate:

Oc¬

since

'./;"•

,

some

this

only:]' x*"

before the Bank

went

necessarily at
with

been

tober.

stock and bond commission brok¬
erage business, and; in the second

place, if

costs

.

evidently

Emil

clude my remarks this
morning on
a
confident note.
To the extent
that Canada is mistress of her own
cern.

•

sugges-

Opinion is, very

fast

to steer our course
by every wind
that blows in Wall Street.
.

want to

that has '
on the question
and to '
weigh the merits of each

neces¬

world

contribute to

expansion

world.

of the

would not find it difficult

through ordinary investment

and

undoubtedly
thinking

been done

a

I suspect

sary

tary

Governors

■

credit standing.

we

I

so' high
business' '
i

appear, in favor of an in¬
period of
The money is wanted for recon¬
crease. In the New York
financial statement
maybe Vail of April,
was/varied, but a com¬
struction, rehabilitation/and re¬
no effect on the stock market.
district where brokers are close mon
observation was that Merrill
where each
day sees another to the mechanism of the
That depends on
Exchange Lynch, being something in the stocking over a period of timey
bigger things fractional retreat.
Day by day and so probably in a strategic po¬ nature of a "chain department with7; only
about ;$130,000,000
than credit balances.
Right it won't seem much, but meas¬ sition to feel changes; even minor store," would
logically be opposed thereof to be used during the first
now
the important
thing is ured over a period of weeks changes, in the sensitive currents to the proposed increase because,
year.! !" v/;v
of business; such differences as in the
the international
'!//!!/;/••'!
first place, it spreads its
picture and it can take stocks : back to
/!/:"4/;•'/;/,,* ; *
*
there are on the question ; are overhead costs
our new
over a
larger area
foreign policy. Where about the 170 level before
Iran's application for a World
any sharper in their outlines. Though of operations,7 an area which in¬
this will take us we
hope Tru¬ resistance is encountered.
Bank
by no means all the large houses cludes an
loan
of
$250,000,000 has
4

ri.fr

opment

suc¬

days, I think the 178 figure
cess.
In fact even the stock
\yill be surpassed by as much
brokers haven't any formula
as five
points. If not, you can
for their own business. If
they expect, a
gradual/drying up
did, they'd have used it in of
strength followed by an¬
past two months. I'll
a

•:'ir

that

not

objective. How to attain At this
Ordinarily devaluation comes
writing (Wednesday when
it, :is something else. One
physical destruction of re¬
night) this figure is almost on sources has
impaired productive
thing I have learned long ago,
top of us. If some new devel¬ capacity, when the financial posi¬
and that is there is no set
mula

has

eellent

we

Given

a

On

Rates shouldn't be
as
to
kill

correlate all the

added $200 millions from gold and to borrow in
your financial mar¬
tourist traffic..
;
../ 4,;;/./
| kets if that contingency ever beT
If in this day and
age currencies came necessary.
J
were
convertible, no question of : * I, hope
you
will agree that
stability could arise. The problem through
our - own
efforts
and

enough encouragement represent realizable ; funds and
The difficulty arises the bulls of
partly because the; balance of "the
yesterday become credits
are
not
trying to recognize the op¬ he bears of
yet convertible
today, and a tech¬ into U. S. dollars.
portunity. It is then that mis¬ nical situation is
r'.'i
built up
* Notwithstanding this
takes are made.
disability
Oh, yes, I which becomes
it would seem to be
decidedly pre¬
ripe for
make: them too. The idea,
mature to conclude that
monetary
authorities in Canada must neceshowever, is to keep your mis¬
Last week

ideal

f,/:

Canada

in

takes

in the United States.

national balance of payments.. My
whole theme today has been that

imports

.

,

is
is

rary

appear.
' 1

level
than

price

erratic

Moreover, devaluation is not the
only means of correcting tempo¬
disequilibrium in an inter¬

ex¬

lot of talk there is
very little
to back up this talk. So is, however, partly that our trade
credits are arising in considerable
~
market,

position, action
dangerous market to play a

less

Taking a shorter View, our For¬
eign Exchange Control Board has
not yet shown any niggardliness
in the provision of.U. S. dollars
for legitimate purposes. !■

from '/ the
United States of $517.4 millions,
leaving
a
positive
balance / of
$384.9 millions to which could be

nervous

disturb¬

apprehension.

other countries of $902.3 millions

detbrrnihinjg Tiow

\

securities
is

interest and divi¬

our

excess

and

yours

ports to the United Kingdom and
and /

of

purchasing power ^ parity basis,
therefore, there is no cause for

year 1946 Canada had

are

,

cer¬

which

will most
likely refer the
various suggestions of the
Associa¬
tion of Stock
Exchange Firms on '
the subject to its
own staff
for ■
further study. The
Exchange has i
received other plans for
revising ;
the
commission
rates
and
the
Board will

States, nothing of

Our, commodity
lower

-

are

disposal

prices

are

everyone agrees.
The Board of'

be

imports into Ca¬

of

excess

to

not

between

the

NYSE

ing to the Canada dollar.

with credits
arising from non¬
monetary gold exports and tourist
to meet characteristic debits
of in the United7 State's
originating

Con¬

is

fundamental nature

a

or pro¬

sitting back biting ly affect the stock market is
their nails and
cussing the apparent; The
trouble1;is5 in
source that advised them to

f

i' >'

inordinate

from the United

materials, trade,

come

Canada

happy mej;

however,

permanently by nar¬
rowing of foreign markets or by

ordinary
credits we

exist

and

investors

hold.

weakened

Under

.•

foil

i?4

Provided

A

paying now for '
services which
they get thev

the

Canadian dollar.

con¬

position

the

for

costs

some

movements, there are elements of
obvious strength in the Canadian
situation
and, therefore, in the

seems

reason

Canadian dollar.

a

My

dogmatic.
the

cern

to policy.

as

sincere but by no

are

can propose tax reduc¬
dend obligations in this country.
tions until its
purple but how In essence, stability of the Cana¬
it can be done and still bal¬ dian
dollar can be assured by con¬
ance
a
budget is something vertibility of sterling and other
currencies into U. S. dollars.
which will take a
jj.pt of doing. .For
instance, in the calendar
That all this musieventual-

purposes

Those who

one

conclusions

grant
and this

one,

no

could give

sweeping the gress

Everybody listens to

non-existant.

or

American

them, repeats them with trim¬
mings, but action on them is

L^ii

with

course

ideology

was

has been at

be

and

;

should

tain

only my own pities in international trade,
in
I have consulted illiquid foreign exchange and in
in authority who occasional
jitterness
in
capital

be wined7'

they believe.

,

t

hear

to

are

opinions,

will

we

she will be

written, but all the vide food
time it was doing it, interest will
have

■V
'

you

out,
dium

(Continued from page 1691)

a

tough derive from our trade with United
spot if she doesn't get it. All Kingdom and other countries are
these loans, whether to com¬ sufficient,
when
supplemented

slightly since last week's col¬
umn

are

in mass psychology
Expect dull to reac¬ England another

occurs.

In Canadian Credit

up.

-

instances
investors have
never ;
paid for adequately.
Discrepancies :ill rates certainly should

V

nobody believes these are
loans. They are
outright gifts.
subject to
And speaking of (loans the
news
or
chances

change

will

Of

=By WALTER WHYTE=

hesitation

are

from being used

way

How

to

Reasons foi

to

'

to charge more for
service*
performed, services which in
manv

mar¬

Loans

Turkey are not
new.
They have both receiv¬
ed loans from the Export-Im¬

■s—

Approach

the

on

debatable.

Greece

Markets

Walter

is

Thursday, March 27,-1947

ttiatj are, going to

stay high

w

—-

i/.

•

Howard Whitney Dead
Howard F. Whitney, investment
banker with R. L.
Day & Co.,
Wall Street, New York

City for 47

years,

and

a

partner Un the firm

from 1929 to 1939 died at his home
at the
age of

68./.;/

.Volume 163 .Number 4580

THE COMMERCIAL & FINANCIAL CHRONICLE

Now
•

proceeds from the sale of 63,860 shares.

the

March 30 filed 2,343,105 shares of common (par
in
additional number determinable only after

will be used to pay current bank

First Boston Corp. (Jointly).

by amendment.

;

American

loans; about $20,000

Offering—Price to public

.:

tive June 15 and will continue to the end of 1948.

...

offered

Air-Borne Cargo Lines, Inc., New York

the

Being offered for subscription to stockholders

reduction

obligations

current

and

to

additional

one

common

share

for

stockholders

Proceeds—Working capital.

definitely postponed.

/

•

in

of

Price—By

Offering in-

,,

A*

for

Apache Mines Co., Jerome, Ida.

.

////>/'/If

March 17

///;/V

(letter of notification) 300,000 shares of

All American Industries, Inc., New York (4/1)

IMarch

(letter of notification) $300,000 10-year 5%
7,500 shares of capital stock (par 250).

17

<

income notes and

and

3 Offering—To be offered in units of $1,000 of notes and
25 shares of stock at $1,000 per unit. Underwriter—A. W.
IBenkert & Co.,;Inc., New York. To reduce indebtedness
incurred in acquisition, of outstanding stock of Okla-

•

Steel

Castings Co.

?

,

-

developing properties.

shares

Price—$10 a share.
No
of feldspar deposits in Jasper County,

Broadcasting Co.,

| amendment. Proceeds—To prepay notes payable to acWXYZ, to construct broadcast trans¬

Proceeds

—

and

Preferred

A

class

common

Estimated

by five stockholders.

sold

being

are

/

"*

,

*

Uxbridge Worsted Corp.

Bachmann

July 12 filed 350,000 shares

;V; • ^

-/•V■/ /// ••/ /

Co.

Armour and Co., Chicago

mitter for station KGO at San Francisco and for working
•■'V-

J

.

5 filed 16,197 shares of common stock (par $5).
Nov. 27 filed 45,000 shares of 4% preferred stock faa#
Underwriters—Rauscher, Pierce & Co. Inc., and E. H.
$100) and 200,000 shares of common stock (par $i).
Rollins & Sons Inc.
Offering—Stock will be offered to
Underwriters—Kidder, Peabody & Co. and Bear, Steawn
the public.
Price by amendment. Shares are being sold
& Co. Proceeds—Will go to selling stockholders. Price
by six stockholders. _//;(*/;■:
by amendment.
Offering date indefinite. - /
:,

corporation had network affiliation agreements on March
The remainder will be offered publicly. Price by

;

Gas

June

411.

,//

".i; //■

Western

•

being sold by company while class B common

are

_

Arkansas

,

($10

proceeds of $303,524 to the company will be used to
increase working capital and to pay off short-term bank

Inc., N. Y.

fing—A maximum of 100,000 shares may be sold by com¬
pany to persons, firms, or corporations with whom the

# - capital.

i.

25,000 shares

loans.

/ June 27 filed 950,000 shares ($1 par) common stock.
Underwriter—Dillon, Read & Co. Inc., New York. Offer-

f quire radio station

■

1947
$46,*-

net

For exploitation

'

(4/1)

Louis

St.

Firing Corp.,

filed

3

shares

Ga.
American

other facilities.

I.'/'././/;;"-'

.

common.

.

($10 par)
underwriting.

stock.

and

par) 6% cumulative
preferred, 25,000 shares ($1 par) class A common and
100,000 shares ($1 par) class B common. Underwrite**-*
G. H. Walker & Co., St. Louis.
Price—$11.25 for pre¬
ferred share, $2.90 for class A common, and $3 for class-B

capital

,

refining

production,

Automatic

March

March 24 (letter of notification) 30,000 shares

,

/ homa

/

said it has a tentative budget for
calling for capital expenditures of approximately

/

Applachian Minerals Co., Monticello, Ga.

(4/8)

company

com¬

Price—$1 a share. To be sold through directors
and following agents: Joseph W. Shipman, Bellevue,
/ Idaho; and Harry P. Jayne, Jerome, Idaho. For exploring
mon.

§>

additional

The

849,000.
•

Refining Co., Philadelphia

($100 par) cumulative pre¬
ferred stock, 3.75% series B. Underwriters — Smith,
Barney & Co., New York, heads a group of 78 under¬
writers.
Price—By amendment. Proceeds—For repay¬
ment of bank loans and for acquisition and development

shares

each two

Atlantic

March 20 filed 250,000 shares

Unsubscribed shares will be offered for subscrip¬

amendment.

a

of

subscription

of

tion to officers and directors of the company

share., Rights expired 3 pan.
e(EST.) March 11. Unsubscribed shares will be offered to
£he public through Greenfield, Lax & Co., Inc., New
working capital.

for

ratio

held.

(letter of notification) 214,890 shares ($1 par)

<jpf record Feb. 20 at $1

•

Zinc, Lead & Smelting Co., St. Louis

Sept. 6 filed 336,550 shares common stock (par $1). Un¬
derwriting—No underwriting.
Offering—Stock will be

mainder for working capital.

For

re¬

Dillon, Read & Co. Inc., White Weld & Co., and Shields
& Co. (jointly), and W. C. Langley & Co. and The

Company

will be used for machinery and equipment, and the re¬

^Tork.

the

Of the net proceeds ($292,940) $50,000

price of $200.

ctwnmon.

(jointly); Dillon, Read & Co., Inc., and Smith, Barney
Co.
(jointly); Blyth & Co., Inc.; Union Securities
Corp. Price—To be determined by competitive bidding.'
Proceeds—The offering is part of American's plan to
dispose of its holdings of 1,150,000 outstanding shares
of Atlantic City. The shares remaining after the public
offering will be distributed as dividends on American's
common stock. This dividend policy will become effec¬
&

$5) plus

sults of competitive bidding are known. Underwriters—
To be filed by amendment.
Probable bidders include

also will receive proceeds from the sale of 20,000 war¬
rants for common stock to underwriters at an aggregate

Feb. 14

Registration

American Water Works Co., Inc., N. Y.

26 filed 132,740 shares ($1 par) common stock.
Underwriters—Herrick, Waddell & Co., Inc., and First'
Colony Corp.
Offering—To be offered publicly at $5
a share.
Proceeds—Company will receive .proceeds from
the sale of 68,880 shares and four selling stockholders

June

^

INDICATES ADDITIONS SINCE PREVIOUS ISSUE

Acme Electric Corp., Cuba, N. Y.

;

in

1693

e

(no/par) cumulative first

Badgley Inc., New York

March 20

(letter of notification) 5,000 shares

of class A

preference stock, Series A; 300,000 shares of convertible »
capital stock (par $1).
Price—$10 a share. No under¬
second preference stock, Series A, and 1,355,240 shares
writing. For operation of business.
American Colortype Co., Clifton, N. J.
common stock
(par $5).
Underwriter—Kuhn, Loeb &
;
Aug. 12 filed 30,000 shares ($100 par) cumulative pre¬
•
Co., New York.
Offering—The 350,000 shares of first
Bates Manufacturing Co., Lewiston, Me.
ferred stock.
Underwriter—White, Weld & Co. Price
preference stock will be offered in exchange to holders
Mar. 20
(letter of notification) 500 shares ($10 par)
of its 532,996 shares of $6 cumulative convertible prior
by amendment.
Proceeds—Net proceeds initially will
common.
Price—at market. Shares being sold through
be added to general funds, however, the company antici¬
preferred stock at the rate of 1.4 shares of first preferBaker, Weeks & Harden, New York, on behalf of Herman
ence stock for each share of $6 prior preferred.
pates it will use the funds for its building and expansion
Shares
D. Ruhm, President of company,
'
'I program. Offering date indefinite
of first preference not issued in exchange will be sold
'
>
;
to underwriters. The 300,000 shares of second preference /
Bates Manufacturing Co., Lewiston, Me. (4/2)
I
American Iron & Machine Works Co., Oklahoma
stock will be offered publicly.
The 1,355,240 shares of
March 18 filed 54,905 shares ($10 par) common. Under¬
common
will be offered for subscription to common
City, Okla. (3/31)
writer
E. H. Rollins & Sons, Inc., New York. Price
Feb. 24, filed $1,000,000 of 4% sinking fund debentures, 'stockholders of the company in the ratio of one-third
By amendment. Proceeds — The shares are being
of a new share for each common share held.
Unsub¬
due 1967; 25,000 shares (no par) $1.10 cumulative pre¬
sold by its two largest stockholders — The First Boston
scribed shares of common will be purchased by the
ferred and 60,000 shares (no par) common. Underwriters
Corp., 27,450 shares; and Coffin & Burr, Inc., 27,455
underwriters.
Price—Public offering prices by amend—Rauscher, Pierce & Co., Inc., Dallas, and Milton R.
shares, which acquired the shares after they purchased
jito.
;; ment.
Proceeds—Net proceeds will be used to retire all
Underwood & Co., Houston, Texas.
Price—Debentures
the industrial subsidiaries of New England Publi^ Serv¬
unexchanged shares of $6 prior stock and to redeem its
will be offered at 100 while price of the preferred and
ice Co. in 1945 for $16,500,000. f
1
>
>
outstanding 7% preferred stock.
■

■v,

—

—

stocks will be supplied by amendment.

Pro-

%

common

|

ceeds—To pay $712,500 balance on a bank loan, retire-

/

and gas

.

"

mon

:

stock"

as

Artcraft Hosiery Co.,

Philadelphia

conversion of preferred. Underwriter—Newburger & Hano, Philadelphia. Price—$25.50 a preferred
share and $12 a common share. Proceeds—Company will
receive proceeds from the sale of all of the preferred
\ and 100,00 shares of common. The remaining 50,000
-dividends. Indefinitely postponed.
; shares of common are being sold by three stockholders.
Estimated net proceeds of $2,300,000 will be used by
American Tobacco Co., New York
the company to pay off bank notes of about $1,100,000
March 11 filed 896,404 shares
($25 par) B common
f and to purchase additional machinery and equipment
stock. Underwriter—Morgan Stanley & Co., New York.
: in the amount of $1,200,000. Offering date indefinite.
•Offering—Shares will be offered for subscription to
•common

filed

and

?

B

common

amendment.

by

share of B

-

to issue any additional shares of com¬
part of company's refinancing plan.

not be necessary

{} ferred stock and $100 par convertible second preferred
stock. Underwriting—Union Securities Corp., New York.
Price by amendment.
Proceeds—Net proceeds, with
V other funds, will be used to redeem $20,000,000 of 7% ;
cumulative preferred stock at $115 a share plus accrued
•

.

Sept. 27 filed 53,648 shares ($25 par) 4%% cumulative
American Locomotive Co., New York
/ v
/.convertible preferred and 150,000 shares ($1 par) com¬
July 18 filed 100,000 shares each of $100 par prior premon. It also covers shares of common reserved for issu¬

f
;

wells.

George Eastwood, President, in letter to stockholders,
22 said "we have come to the conclusion it will

Dec.

/ arient of $850,000 promissory notes, and provide working
/ capital.
Business—Manufacture, sale and rental of ma¬
terial and equipment used in drilling and equipping oil

common

stockholders at a price to be

Subscription

basis will be one
record

for each five shares held of

on April Z. Unsubscribed shares will be.
writers. Proceeds—Net proceeds will be*
for the

ance

sold to under-

/

added to funds :t
reduction of outstanding bank loans aggregating

/./$85,0(H),000. as

of Dec.

;

New York

Beaunit Mills, Inc.,

Sept. 27 filed 180,000 shares ($2.50 par) common. Under¬
writer—White, Weld & Co., New York.
Price —By
amendment.
Proceeds—Of the total, 140,000 shares are
being sold by St. Regis Paper Co.,
remaining 40,000 shares are, being
President of Beaunit Mills, Inc. * , ^
Ben Gold Fur

•

/

upon

New

York

New York, and the
sold. by I. Rogosan,
' » <
'
1; <

Workers Health and
(4/1)
: %-:y:

Welfare Fund,

of building
sold in de¬
No under¬
For construction and improvements of build¬
for operation of cultural resort for fur workers.

20 (letter of notification) $250,000
improvement fund debentures. To be
nominations of $50, $100, $250 and $500.

March
and

writing.
ings and

^
shares of 5%
Offering price
$6 a share. Underwriter—Estes, Snyder & Co., Topeka,
Atlantic City (N. J.) Electric Co.
Kans To pay outstanding indebtedness and expenses and
March 19 filed 522,416 shares ($10 par) common, being
to open five additional stores in Kansas City, Mo. Offeroffered by American Gas & EleetricvCo. Underwriters— / ing postponed indefinitely, u
>/•;./. T'
/ *
To

determined by competitive; bidding. Probable
The First Boston Corp., and Drexel &
(jointly); Shields & tCo., and White, Weld & Co.

Berbiglia, Inc., Kansas

•

City, Mo.

(letter of notification) 41,000
cumulative convertible $6 par preferred.
Sept.

12

be

bidders include:
.Co..

31, 1946.

-

rV.'.

(Continued on page 1694)

//>•' '/•/■/

;///• /-■

;r

{
,N—
>

;

*;
r

GOTporate ahd Public Financing

,

••
'•

r

Underwriters and Distributors

.j*'. '"I

••••■'••

United States Government Securities
State and

^

'

'

r

^

*1 /''v

y

Corporate and

.

,

of

•J

.

.i.

',»i

ti

..

.t,

Municipal

Securities

Municipal Bonds

i1

,

i!
•

•'

The

:

■

•

•
•

.

.

CORPORATION

.

New.York

Boston

,;h;

V

\

Chicago and other cities




.

:

48 WAIL

Pittsburgh

Chicago

•

.

*

,

Boston

*

ft

Kidder,Peal

* "

;

-

.

N. Y.

Philadetphfa
St. Louis

•

/

inc.

ST., NEW YORK 5,

Cincinnati/*

-

CO.

C. J. DEVINE &

FIRST BOSTON

•

•

•

b

-v

•

_

,

-

■.

J. Members

New York.

Cleveland
'

i ■

.

*h
_

•' Founded 1865- •-'->• "*■1'

*

"H

^V

.

HAnover 2-2727

Pittsburgh •
San Francisco
—

.

•

t,j

of the New York artf JtgstimSfoek
,

Boston

.

.Philadelphia

Exchanges
Chica«o

fi
i

^
,

\

^

fV.

THE COMMERCIAL & FINANCIAL CHRONICLE

1694

Bowman

amendment.

Grammes

is being sold by shareproceeds.
<•

21, filed
1,847,908
shares
(no' par) ' common
Offering—All of the shares are owned by The North
American Co., which is
offering 1,714,524 shares to
common
stockholders .of
North American of record

1

March

Braunstein

29, 1947
Preferred

March 31,
Public

Noon

Service

convertible preferred stock and 50,000 shares (200 par)
stock. Underwriter — C. K. Pistell & Co., Inc.,
New York. Price — $25 a share for preferred and $11

1947

Co.

a.m.

(EST).

April 1,
All American

Bonds
w

•

Industries, Inc.__Debs., Capital Stock

Fund

Common

V

April 7, 1947

Chicago Indianapolis & Louisville Ry.
Noon (CST)—
Equip. Trust Ctfs.

Manufacturing Co.—
April 9,

Preferred

—

?

publicly
will

(Continued from

Berkey & Gay Furniture Co., Grand Rapids,

r

issued and

>

use

I

outstanding. The

statement

is

to

enable

purpose of the

holders

to

effect

of the prospectus,

by

v.-.-'i Berkey & Gay said the shares had been sold in 1944
and 1945 to a group of about 50 persons who
represented

they
for

purchasing the shares for investment and not

were

(Sidney)

& Co.

C. Hart.

Price—At

common

market.

To be

V'

Community

a

a

share,

on

subscription to class A
the basis of one share

Frosted

Foods

Co.,

Philadelphia

finance the

cost

of

completing

and

race

a

14

April 1948.

•

Container

Corp. of America, Chicago

filed

21

100,000

(4/9)

j

v

shares

($100 par) cumulative
preferred stock. Underwriter—Kidder, Peabody & Co.,
New York.
Price—By amendment.
Proceeds—To be

Oregon Power Co.

be

Co., Philadelphia has guaranteed the payment
Oct., 1947

of semi-annual dividends of \V/i cents each in

Unsubscribed shares will be offered
share. Price—$20 a share. Proceeds

added

to

of

determined

company's program for

the

ments.
board

general cash funds for payment of

portion
improve¬

a

additions and

Business—Manufacture of paperboard and papercontainers.

'
,

•

Craig Mines & Quarries Inc.,

March 17

Prescott, Ariz,

v

(letter of notification) 80,000 shares of stock.
share. No underwriting.' To develop quarries.

Price—$3

a

Crawford Clothes, Inc., L. I. City, N. Y.

-

Aug.

?

The

of

1927, at $110

reimburse

its

share.

a

The

balance

will

be

used

•

Capitol

Indemnity Insurance Co.,

300,000

'

21

&

shares

Sexton

Co., Chicago

(letter of notification)

a maximum of 5,000
($5 par) common on behalf of Robert S. Cald¬
well, a director of company. Underwriters—Swift Henke
& Co., and Paul H. Davis
Co., Chicago..
)

shares

Crown

to

Jan.

22

Capital Corp., Wilmington, Del.

filed

250,000 shares ($1 par) class A common.
Underwriter—Hodson & Co. Inc., New York, will act as
selling agent. Price—$4.25 per share. Proceeds—Net pro¬

treasury for previous additions and im¬

ceeds will be used as capital for
company's subsidiaries
engaged in the small loan or personal finance business.

Indianapolis,

Ind.

_

Cribben

March

provements.

Inc., New York

filed

9

($5 par) common stock.
Underwriters—First Boston Corp., New York. Price by
amendment.
Proceeds—Go to Joseph Levy, President,
selling f stockholders. Offering date indefinite.
•

Oregon will apply its proceeds
45,761 shares ($100 par) 6% preferred, series

to redeem
<

Aug. 30 filed 119,706 shares (no par) common and sub¬
scription
warrants relating to 30,000 shares thereof,
Underwriting — None.
Proceeds
For reimbursement

v

James

through Jackson & Co. and Flannery & Co., both of
Youngstown, Ohio. Proceeds go to the selling stock¬

March

tribution of 30,000 shares to California
Oregon. Proceeds
—Standard Gas will use the
proceeds to reduce its bank
loan notes.
California

Co., Spokane,Wash.

capital stock. Price—25 cents a share.
Underwriting—
To be" sold by officers of the
company for development
purposes.
'-z1
Blumenthal

share.

a

Engineering Corp.,

holder.

reclassify and increase the authorized com¬
312,000 shares of $25 par common of Califor¬
nia Oregon
present, outstanding are held by Standard
Gas.
They will be reclassified into 390,000 shares
($20
par) common.
Standard Gas will make a capital con¬

notification) 100,000 shares (5c. par)

■

common

sold

Lincoln, R. I.

California

mon.

:

Black Warrior Mining
March 19 (letter of

Price—$6

&

(letter of notification) 24,000 shares of

behalf of

..

stock and to

sell-

ing stockholders.
•

Feb. 24
on

(parent), which is planning to sell its entire com¬
stock holdings in California
Oregon, will sell the
remaining 360,000 shares of common. The subsidiary
plans to amend its charter to create the new preferred

offering public. The Commission staff stated that
regis¬
tration is required if any of the
remaining 733,575 sharei
are to be sold.
Price—At market. Proceeds—Go to
,

Machinery
Hamilton, O.

mon

So far, 231,204 shares have been sold in the
open mar¬
ket and the Commission had raised the
question as to
whether such sales had the effect of
making the entire

i

H. Roller & Co.

Columbia

:

6,500 shares of

Co.

distribution.

'

■

$20

to

writers—To

registra¬
sales

(letter of notification)

(par $1) on behalf of selling stockholders. Under¬

writers—F.

par) common.
Under¬
by competitive bidding.
Probable bidders include Blyth &
Co., Inc.; The First
Boston Corp.; Harriman
Ripley & Co.; Kuhn, Loeb & Co.,
and Smith, Barney & Co.
(jointly); Merrill Lynch, Pierce,
Fenner & Beane, and
Bear, Stearns &* Co. (jointly).
California Oregon will sell all of the
preferred and
30,000 shares of the common, Standard Gas & Electric

Feb. 3 filed 733,575 shares ($1 par) capital stock. Under¬
writing—None. Offering—Company said all of the shares
are

stock

Co.

March 26 filed 60,000 shares
($100 par) cumulative pre¬
ferred and 390,000 shares ($20

Mich.
i.

tion

Union Gas

March

•

.

i.

used

1693)

page

at

at $20

be

track at

i

Co.

Peirce &

I

)'•

Machine

";

■

(letter of notification) 25,000 shares of class
A common stock (par 100). Price—$5 per share. Under¬
writing, none. Additional working capital. Frederick

for each share held.

Georgia-Hardwood Lumber Co.— ——Common

t

a
share.
Underwriter—Smith,
Proceeds go to the selling stock¬

stockholders

Preferred

¥

j

par)

Feb. 27 filed 38,500 shares (no par) class A stock. Un¬
derwriter—Barrett & Co., Providence, R. I. Offering—
The shares will be offered for

1947

Container Corp. of America.—

(N. Y.)

Burrillville Racing Association, Pawtucket, R. I.

:

($1

D. Thomas, President of the

■

Clinton

definitely postponed.

1

i

Busines

ley & Co. and associates submitted a bid of 100.06 for a
4.30% dividend. Harriman Ripley & Co. and Mellon
Securities Corp. bid 100.779 for a 4.40% dividend.
In¬

.—Preferred

'

)

behalf of Donald

on

holder.

May 3 filed 70,000 shares of cumulative preferred stock
($109 par). Underwriters—To be filed by amendment.
Bids Rejected—Company
July 23 rejected two bids re¬
ceived for the stock.
Blyth & Co., Inc., and F. S. Mose-

1947

American.

company.
Price—$6
Hague & Co., Detroit.

New York

Proceeds—For investment.

of North

notes

business.

Brooklyn

Common

:

Co

hj.;

market.

on

per

(jointly); Otis & Co.; Blyth & Co., Inc.; Smith,
& Co..
Proceeds—For prepayment of bank

Feb. 24

April 2,

Solar

Investing Corp.,

$15

every

Clinton Machine Co., Clinton, Mich.
Feb. 17 (letter of notification) 10,000 shares

Preferred

Bates Mfg. Co

{

loan

field

—Investment

Debentures
•

West Phila. Consumers Cooperative Inc.—Common

I

Street

25

—Based

Plymouth Rubber Co

t-ft"

Barney

250,000 shares ($5 par) capital stock.
Underwriter—Broadstreet Sales Corp., New York. Price

Pref. and Common

New Jersey Water Co._

Gardner-Denver

Broad

March

Ben Gold Fur Workers Health &

Welfare

Co.

&

stock

1947

Automatic Firing Corp

Proceeds—7,000 preferred shares

common.

present stockholders. Net proceeds to the company, es¬
timated at $147,500, will be used to prepay to the ex¬
tent possible outstanding $149,300 mortgage liabilities.
Offering date indefinite.
•

New England Gas & Electric

Association, 11:30

for

being sold by company, the remaining 5,500 pre¬
ferred shares and all of the common are being sold by

are

Capital Stock

Michigan Gas & Electric Co.
Noon (EST)--—
Bonds, Pref. and Common

{

share

a

(EST)__

for

land,

common

Maine

19 at

share to the extent of one Cleve¬
five North American shares
held.
Rights expire May 27. The remaining 133,383 shares
are
to
be
sold, probably through competitive sale
Probable bidders include Dillon, Read & Co.
Inc.; The
First Boston Corp.; White, Weld
& Co. and Shields
& Co. (jointly); Ku«hn, Loeb & Co. and W. C.
Langley

(Harry), Inc., Wilmington, Del.

Sept. 25 filed 12,500 shares ($25 par) 4%% cumulative

(L. F.) & Sons, Inc

Electric Iliuminatirtg Co.

Feb.

Proceeds—Stock

holders who will receive

(Showing probabU dot* of offering)
March

Cleveland (O.)

Gum, Inc., Philadelphia

Sept. 27 filed 268,875 shares ($1 par) common. Under¬
writer—Van Alstyne, Noel & Co., New York. Price—By

NEW ISSUE CALENDAR

Thursday, March 27, 1947

—

of

company's treasury
for funds
expended
in
redemption of 3,907 shares of 7% cumulative preferred on
April 1, and for funds deposited in trust for

•

redemption
Although it was
proposed to .offer the stock for subscription to stock¬
holders at $10 per
share, company on Sept. 20 decided
on

Mar. 19 (letter of
notification)' 30,000 shares of common.
Price—$6 a share. No underwriting. To provide addi¬
tional capital and surplus.

Oct. 1 of remaining
preferred shares.

Carney
Jan.

Fasteners,

Cyprus Mines, Ltd., Montreal, Canada
May 31 filed 500,000 shares of

Inc., Columbia, S. C.

13

(letter of notification) 32,950 shares ($5
par)
Price
$6.50 a share. Underwriter
Corp., New York. For equipment and
working capital.
i
capital

to withould action.

stock.

Motor

Car

Corp., Birmingham, Ala. ,•
Mar. 3 (letter of
notification) 60,000 shares ($1 par)
common. Price—$5 a share.
Company proposes to offer
12,997 shares of

;

common

promissory notes in the

construction.

debentures.
and

America, Boston
*

price.

Proceeds—For

underwriting. For construction

of

investment.

plant

<

*»

stock?

1

.

,

...

;

purchase warrants for purchase of
30,000 shares of com-i
mon stock of the total
common, 375,000 shares will be?
offered for sale for cash. 30,000 shares are reserved
for?
Issuance upon exercise of
warrants attached to
preferred!
tnd. 95,000 shares are reserved for

issuance upon eater-* *
else of outstanding warrants.
Price—By amendment.!
Proceeds—Net proceeds; together with
other funds. wiUS

t0 piay the company's

^

Mertag

date

2% subordinated

note In

Indefinite. *8'268,750 and «cn*d tat.r*t.




working capital.

-

Dillon

&

14

proceeds.

Co., Billings, Mont.

(letter of notification) 500 shares ($100 par)
Price—$100 a share. No underwriting, ;For

purchase of
I

oil,

gas

royalty interests and for mineral

interests.

Offering—To the public at

share in Canadian funds. Proceeds—For a
variety
in connection with
exploration, sinking of
shafts, diamond drilling and working capital.
a

Douglas Oil Co. of California, Clearwater,

of purposes

■-

For

common.

Under¬

commori. Under¬

—

will receive

•

Central Mills,

(letter of notification) 11,500 shares ($25 par)
5Vk% cumulative convertible first preferred. To be of¬
fered at a maximum of
$26 a share. Underwriters —
Pacific Co.
of California, Cruttenden & Co., Pacific
Capital Corp., all of Los Angeles; Brush Slocumb & Co,
San Francisco; and Adele Wv
Parker, Clearwater.; 1®

Inc., Duitbridge,\0.

March 13

(letter of notification) $300,000 of first mort¬
gage bonds. Price—$500 per unit. No
underwriting. For
retirement of preferred
stock,, for purchase of two alfalfa
dehydrating plants from Logan County
Dehydrators, Ihc.
and for retirement of latter's
preferred stock.
'

•

'

•

.

•

■

-

.":1.

Inc. out of

ing.
"

rate of

one share for each
7% shares held. Unsubscribed
shares will be sold to
underwriters.
Price by amend¬
ment

Proceeds—Working capital, etc; Offering indefin¬

itely postponed.

purchase 493

1
■

Central Soya Co.,
Inc., Fort Wayne, Ind.
i
Aug. 21 filed 90,000 shares (no par) common.
Under¬
writer—None.
Offering—Common shares Initially will
be offered for
subscription to common stockholders? at

Calif-

March 13

Boston

Store of
Chicago, Inc.
Sept. 10 filed 30,000 shares ($50
par) 5% cumulative
preferred and 500,000 shares
($1 par) common. Under- I"
writers—Paul H. Davis & Co; and
Stroud & Co., toe.?
Offering—Preferred will have non-detachable

($1 par)

C. G. McDonald & Co., Detroit. Price — $5 50
Stock is being sold by six share¬

—

share. Proceeds

Boston.

Mines, Ltd., of Toronto,

June 24 filed 400,000 shares of
common stock.
writer—No underwriters.

$1

Typesetting Co., Detroit, Mich.

holders who

working capital.
Carseor Porcupine Gold
Ontario

March 7 filed 60,000 units of
beneficial interest. Underwriter —Whiting, Weeks &
Stubbs.
Price —Based on i
market

No

a

March

.

Bond Investment Trust of
•

writer

Carney-Pacific Rockwool Co.,
Longview, Wash.
March 17 (letter of
notification) $125,000 of debentures.
Company presently intends to sell only $70,000 of the

tributors of company's
proposed products. Underwriting,
the stock will be sold
by officers and directors of the
company. For completion of
display automobiles now
under

Detroit

Sept. 25 filed 70,920 shares

•

$64,985 held by dis¬

Offer¬

—

„

in exchange for its unsecured

amount of

(par $1).

stock

—

Mitchell Securities

Bobbi

common

Underwriters—Sabiston-Hughes, Ltd., Toronto.

ing—Shares will be offered to the public at 75 cents a
share.
Proceeds—Net proceeds, estimated at $300,000,
will be used for mining operations.

a

Shares

of

capital stock of G.

Hv~Cherry,
outstand¬
/j/Hi

total of 625 such shares presently
*>■"
"■=■'■'
•- '

.

•

Dunlap Frozen Foods Co.v Chattanooga, Teiw.

Mar.

19

(letter

of

notification) $25,000 6%~ ($10
Price—$10 a share. No underwrit¬
ing. For acquisition of real estate and plant.
cumulative preferred.
_

V-v*"'

Duraloy Co., Scottdale, Pa*
March 12
common

>"

-

"

„

(letter of notification) 25,000 shares

on

behalf of the issuer; 12,500 shares

($1

_,

.,

"

for the account of Thomas R. Heyward Jr 12,500 shares ($1 par) common for the account of

•

common

and

21

Price—$20
ing capital.

Pittsburgh, Pa., and The First Cleveland
Corp., Cleveland.
The company will use its proceeds
for working capital.
'■<;<:
;■

ttartflelidf Stores, Inc., Los Angeles

Co., Los Angeles, Calif.

27 filed 100,000 shares ($1 par) common stock.
Underwriters—Van Alstyne, Noel & Co., New York, and
June

2,640 shares of com¬
share. No underwriting. For work¬
'"
■;
:
•
*

(letter of notification)

mon.

Underwriter—Johnson

proximately , $3.25 per share);

Forest Products Sales

March

Price—At market (ap¬

Thomas R. Hay ward, Jr.

Mrs.

a

*

III.

$125,000 of 10-year

(letter of notification)

12

March

Rockford,

Inc.,

Vh% subordinated debentures, due 1957. Price—$25 a
unit. No underwriting. To retire current liabilities and'
for working capital.
"V.
Edelbrew Brewery, Inc., Brooklyn, N. Y.

Fresh

Proceeds—
Company is selling 60,000 shares and stockholders are
selling 40,000 shares. The company will use its proceeds
to pay the costs of opening additional stores and to expand merchandise in its existing stores. Offering tem¬

Aug. 30 filed 450,000 shares (100 par) common. Under¬
writer—Newkirk & Banks, Inc. Offering—Of the total
is selling 350,000 shares and two stockholders,
Newkirk, Jr., are selling

company

remaining 100,000 shares. Price—$6 a share. Proceeds
—For purchase of sweet potatoes, plant expansion, addi¬
tional storage facilities, research and development work
and working capital.
the

preferred. Underwriters—None. Offering—To be offered
at par to customers, officers and employees of the com¬
pany. Proceeds — For corporated purposes including;
modernization and improvement of the manufacturing
plant and machinery and equipment.
<
Elkhorn-Beaverhead Mines Co., Baltimore, Md.

(letter

12

March

of

Gardner-Denver Co., Quincy,

-

March 13 filed
ferred

used

development.

and

March 14 filed

Underwriter—S.

March

Under¬
Equitable Se¬
Price—$8.20 a share.

100,000 shares*($l par) common.

Nashville, Tenn.

Mich.

working capital.

Dec.

Equipment Co., Los Angeles

4% cumulative
convertible into common stock.
Underwriting —None. ; Offering — Company will offer
9,831 shares of the preferred for subscription to common
stockholders of record on or about April 1 at $100 a
share in the ratio of one preferred share for each 38
shares of common held.
Rights will expire April 30.
The remaining 169 shares, and any unsubscribed shares,
will be offered to persons yet to be determined.
Pro¬
ceeds—Proceeds are to be applied to reduce an out¬
standing bank loan and to finance capital improvements
and additions to its plants.
filed

10,000 shares ($100 par)

which

preferred,

Milwaukee, Wis.

Inc.,

are

$1.25 cumulative converti¬

preferred stock series A ($20 par) and 150,000 shares
(10c par) common, all issued and outstanding and being
•old by eight selling stockholders.
Underwriters-Van
Alstyne Noel & Co. Price by amendment.
Proceed®—
To selling stockholders. Offering temporarily postponed.

Equipment Finance^ Corp., Chicago

Glencair Mining Co.
Oct. 2 filed 300,000

Mark Daniels

shares ($1 par) stock.

Underwriter—

Aug. 28 filed 355,000 shares

development.

New York

($1 par) common, of which

course

Alstyne, Noel & Co.

par) common class A.
Underwriter—E. F. Gillespie & Co., Inc., New York.
Price—$7.25 a share. \The registration states principal stockholder has granted the underwriters an option
to purchase 45,000 shares of class B ($1 par) common ;
at; $7.25 a share, exercisable for a period of three years.
Proceeds—Proceeds of approximately $870,000, together
with $755,000 of other bonds, will be used to repay the
balance of $34,000 of a property mortgage, to pay off

Feb. 26, filed 150,000 shares ($1
v

?-

loans in the amount of

$1,295,000 to Bankers Commer¬

additional working capital.

New York, and for

cial Corp.,

Film*

Inc., New York

June 25, filed

■

100,000 shares ($5 par)

class A stock and r

Offering—To be offered
piiblicly at $8.10 a unit consisting of one share of class A
stock and one share of common stock.
Proceeds—$201,000 for retirement of 2,010 shares ($100 par) preferred
stock at $100 a share; remaining proceeds, together with
other funds, will be used for production of educational
•

Co., Inc., New York.

&

Fire

Chief Mining Co.,

Spokane, Wash.

(letter of notification) 200,000 shares (50 par)
stock. Of the total 100,000 shares will- be sold at 10 cents
a
share and the remainder will be sold in blocks of
18

Mar.

>

20,000 shares at 5 cents a
mine development.

For printing of

pany.
•

share. No underwriting.

For

•

Fluid Transmissions
Baltimore, Md.

Research Corp.,

-

of notification) 1,000 shares ($50 par) 7% r
preferred and 10,000 shares (no par) com-;
mon.
Preferred will be sold at $50 a share. 2,000 shares
of common will be issued in payment for services and

? the
To

•

remaining shares are reserved. No underwriting.
lease ground and erect building for business.
Food

>

.....

Machinery Corp.,

San Jose,

CaEif.

sinking fund debentures, due
1962, and 70,000 shares ($100 par) cumulative convertible
preferred.' Underwriters—Kidder, Peabody & Co., New
York, and Mitchum, Tully & Co., San Francisco. Price—

Mar.

21

filed

$8,000,000

reimburse its working
in connection with its
expansion program and for repayment of bank loans,
Business—Manufacture of orchard spraying devices and

amendment. Proceeds—To
capital for expenditures made

By

f•
.

other products.
Foreman

Fabrics Corp.,

New York

July 29 filed 110,000 shares ($1

(•
(•i

par) common stock, all

Outstanding. Underwriters—Cohu & Torrey.
.amendment. Issue may be withdrawn.




Price by

Allentown, Pa.

notification) 2,000 shares of $1.50
cumulative preferred stock (no par).
Price—$25. Offer¬
ing to stockholders and employees. Working capital, etc.

March

;

Paul, Minn.

12,000 shares ($1 par)
Underwriters-^-Kalman & Co., Inc., St. Paul.

common.

Price—$25 a share.

Lighting & Power Co.

259,002 shares of common. Underwriting—'
none.
Offering—Company will issue warrants to its
common stockholders of record on April 25 giving them

Mar. 25 filed

the

subscribe for one

to

right

file with the

Secretary of State of Texas an amendment
converting its then outstanding 517,999

charter

its

shares'of common into
its

Proceeds — For improvement and1
Offering indefinitely postponed.

share of common for
It will on April 16

held at $37.50 a share.

each 4 shares

authorized

then

1,200,000

shares and
to 2,000,000

1,035,998 shares and to convert
shares of common into

600,000

to increase the total

authorized

Unsubscribed shares may

shares.

publicly through underwriters. Proceeds—To
be added to working capital for general corporate pur¬
be offered

poses,

(letter of

24

Griggs, Cooper & Co., St.
(letter of notification)

including construction of

Hy-Grade Supply Co.,

additions to its system.

Oklahoma City

notification) 54,350 shares of cum. conv.
preferred and 50,000 common stock purchase warrants.
Price—$5.50 a preferred share and 2 cents a warrant.
Underwriter—Amos Treat & Co., Jtfew York. It is ex¬
pected that a full registration will be filed later with the

Dec. 3

(leter of

■/. ^

SEC.

.

modernization program.

Illinois Power Co.,

?
July 29 filed 18,500 shares at $4.25 cumulative preferred
stock ($100 par), with non-detachable common stock
purchase warrants entitling registered holders of shares
of the $4.25 preferred to purchase at any time 64,750
shares of common stock at $16 a share at the ratio of 3 Mi
Groller Society, Inc.,

Z

New York :,V;

each preferred share held; and 120.«f
000 shares of $1 j>ar common stock. Underwriters—H.<
M. Byllesby and Co., Inc. withdrew as underwriters.
Offering—Underwriters to purchase from the company
18,500 shares of preferred and 20,000 shares of common;
shares for

common

and from Fred P.
shares of issued
red

Murphy and J. C.

Graham, Jr., 100,000
Prices, prefer¬

and outstanding common.

$14 a share.

$100 a share; common

loan.

States Utilities

Jan. 20 filed

discharge a

/?

,

?

.

/ ?

Rouge, La.
par) common. Under¬

Co., Baton

1,909,968 shares (no

will be offered for
stockholders of Gulf States
parent, Engineers Public Service Co., New York. The
subscription basis will be one share of Gulf States stock
for each share of Engineers common held.
Price—$ll.ou
a share.
Proceeds—Purpose of offering is to carry out
a provision of dissolution plan of Engineers approved by

writer—None.

subscription

the

Offering—The shares

to

common

Commission.
Hammond Instrument

?.

Co., Chicago

80,000 shares ($1 par) common.
Paul H. Davies & Co., Chicago. Price by
Proceeds—Net proceeds will be used to

Aug. 8 filed

Under¬

amend¬
ment.
redeem
Its outstanding 6% cumulative preferred stock at an
estimated cost of $213,258. exclusive of accrued divi¬
dends.
It also will use approximately $402,000 toward
the purchase of a manufacturing plant in Chicago; bal¬
for working capital. Offering date indefinite.
writer:

ance

Decatur, III.

filed 200,000 shares ($50 par) cumulative preferred stock and 966,870 shares (no par) common stock.
Underwriters—By competitive bidding. Probable bid¬
ders include Blyth & Co., Inc.; The First Boston Corp.;
W. E. Hutton & Co. Proceeds—Net proceeds from the

June 17,

sale of

preferred will be used to

u

reimburse the com¬

pany's treasury for construction expenditures. Net pro¬
ceeds from the sale of common will be applied for re¬
demption of 5% cumulative convertible preferred
not converted into common prior to the redemption
date. The balance will be added to treasury funds.
Company has asked the SEC to defer action on its

stock

fi¬

nancing program

Proceeds—To

$6 cumulative preferred, pay notes,'
Idenfinitely postponed,
v
/.

Gulf

Mar. 19 (letter

cumulative

& Sons, Inc.,

(3/29)

x

business.

of

common

book The Golden Recovery.

(L. F.)

Grammes

retire
,

(letter of notification) 4,000 shares of common.
a share; To be sold through President of com¬

Price—$5

Sept. 3

■

300,000 shares (10 cent par) common stock, of which
200,000 shares reserved for conversion of claSs A. Each
share of class A stock is initially convertible into 2
shares of common stock. Underwriters—Herrick, Waddell

19

Mar.

(letter of

Houston

•

to

Reno, Nev.

Golden Recovery,

•

Los Angeles

notification) ,2,500 shares ($50 par)
convertible preference stock on behalf of C. N. Hilton.
Price at market. To be sold through dealers in usual

—

,

Hilton Hotels Corp.,

March 17

55,000 shares are reserved for issuance upon the exer¬
cise of stock purchase warrants.
Underwriter — Van

Newark, N. J.

and equipment and for

obligations, purchase helicopters

Offering—The 300,000 shares are
issued and outstanding and being sold for the account
Feb. 28 filed 8,025 shares ($100 par) 4% cumulative pre¬
of certain stockholders.
Company has also issued 55,000
ferred, series 2, and 25,070 shares ($10 par) common.
Underwriting
None. Offering—Company anticipates V stock purchase warrants to the selling stockholders at
10 cents a share entitling them to purchase up to Aug. 1,
that the entire offering will be sold to its employees
1949, common stock of the company at $11 a share. Price
f and officers. Price—Par. Proceeds—Estimated proceeds
1 of $1,045,000 will be applied to working capital.. /
by amendment. Offering temporarily postponed.
,,
Federal Electric Products Co.,

14 filed

working capital.
•

Glensder Textile Corp.,

O

270,000 shares of capital stock. Underwriter—Strauss Bros., Inc., New York.
Price—$3.50 a
share.
Proceeds—Net proceeds will be used to pay

Price—40 cents a share

Funds). Proceeds—For mine

(Canadian

cumulative

Inc., Camden, N. J.

Helicopter Air Transport,
March

Ltd., Toronto, Can.

& Co., Toronto.

shares ($10 par) 5^%

16 filed 50,000

prior preferred and 40,000 shares ($10 par) common.
Underwriting—None. Offering—All preferred and com¬
mon
will be offered publicly.
Price—$10.15 a pre¬
ferred share and $10 a common share. Proceeds—Pro¬
ceeds will be used to build and equip hotel and health
facilities and to acquire a mineral water supply.

ble

Emsco Derrick &

March 3

Industries

Glen

July 31 filed 50,000 shares of

.V'• '.
Hot Springs, N. Mex.

Health Institute, Inc.,

manufacturing
r TV''''"

timber, to construct additional
units and for other expansion purposes,

tracts of

Hastings, Mich.

17

:■

cutting contracts on large

25,000

handle

Hastings Manufacturing Co.,

(letter of notification) 500 shares ($2 par)
common on behalf of Harold P.
Phillips* Price—$20 a
share.
Underwriter—Silas C. Coleman, Battle Creek,

(4/8-9)

writers—Reynolds & Co., New York, and

Corp.,

($2 par) com¬

Price—$20 a share.
C. Coleman, Battle Creek, Mich.

behalf of Aben E. Johnson.

on

mon

Hastings, Mich.

of notification) 500 shares

working capital.

as

curities

(letter of notification) 2,000 investment units:?';
shares of common. Price—$100 per invest¬
and $2.50 per common share. Company to
sale until underwriting agreement made. For

Hastings Manufacturing Co.,

•

March 17 (letter

•

ment unit

Creek, Mich.

stockholder,

Price—By amendment.

Georgia Hardwood Lumber Co.

March 18

Battle

man,

25,000 shares ($100 par) cumulative pre¬
Underwriter—A. G. Becker & Co. Inc.,

Proceeds—To obtain long-term

Empire Petroleum Co., Denver, Colo.

Underwriter—Silas C. Cole¬
Proceeds go to the selling

Price—$20 a share.

Mich.

$250,000 first mort¬

notification)

10-year 5% bonds, and 250,000 shares (10 cents par)
common.
Price—$550 per unit consisting of $500 bond
and 500 shares of common.
No underwriting. For mine

(letter of notification) 1,875 shares ($2 par)
on behalf of Erik von Reis, Grosse Pointe Farms,

18

common

Proceeds—Of the net
proceeds, $1,000,000 will be used to pay the company's
Vk% notes, due April to June. The balance will be

gage

•

stock.

Chicago.

Hastings, Mich.

Hastings Manufacturing Co.,

•

March

(4/2)

III.

*

porarily postponed.

Roland E. Fulmer and Louis H.

31 filed 5,000 shares ($100 par) 5% non-cumulative

Dec.

v

Inc., Columbia, S. C.

Dry Foods,

Offering— ;

Johnston, Lemon & Co., Washington, D. C.
To be offered to the public at $8 a share.

&" Johson,

Ebaloy,

1695

THE COMMERCIAL & FINANCIAL CHRONICLE

Number 4580

163

Volume

present market conditions.

because of

International Dross Co.,

Inc., New York

140,000 shares of common stock
Underwriter—Otis & Co. Offering—Price $10
Proceeds—Selling stockholders will receive
Offering date indefinite.
Aug

28 filed

Iowa-Illinois Gas &
Feb. 15

proceeds.

Electric Co.

$22,000,000 of first mortgage

filed

(par $1).
per share.

bonds due11977.
bidding.
Inc.; -The

Underwriter—To be determined by competitive
Probable bidders include Halsey, Stuart & Go.
First Boston Corp.; Glore, Forgan & Co.,
Tnr * Harriman Ripley & Co.; Harris, Hall & Co.

Blyth & Co.,

Proceeds—Part of the proceeds will be
gage debt of $10,578,000 and balance
general funds.
Jahn &
Feb. 26

Oilier

Engraving Co.
shares ($1 par)

filed 102,000

(Inc.).
used topaymort-

will be added to
.

common. Under-

Witndn^ntS' Proceeds—The'shares, which constitute approximately «.5% of corn^s outstojding common
stock, are

being sold to

stockholders. . 3
,

•

-

fT."'j

i

■

•

(Continued on page, 1696)

^ _

ik

1696

THE COMMERCIAL & FINANCIAL

Thursday, March 27, 1947

CHRONICLE

tTT

'

Lamston

March 25

feired stock at $109 a share plus

(Continued from page 1695),"

\

•

(M. H.),

postponed.; r:r
Inc., New York
Mutual

(letter of notification) 500 shares of common

stock.'

^

'

■'.*

■;.

./

*

7

(letter of notification)

21,250 shares ($1 par)
Henry E. Rohlsen,: Bronx, N. Y.
Price—$2.50 a sharp. No underwriting. Proceeds go to
the selling stockholder.
'
:

I')'

-

■

^

,

.

J

^ Maine Public Service
filed

25

150,000

Underwriters—To

Co. (3/31)

shares ($10 par) capital stock.
determined through competitive

be

Adding.

Probable bidders include The
Harriman Ripley & Co.; Coffin

Corp.;

First

Boston;

the proposed
'

visions of the Public Utility Holding
Company Act.

Bids

o

Invited—Bids for purchase of the stock, will be received

to

300,000

shares

($1

(EgjJ), March 31, by Consolidated, at

/

cents

preference

Proceeds—The

share.

a

-.y

.

D. C.

(100 par)

filed 4,000,000 shares

16

■

com¬

will use estimated net proceeds of $1,473,000 for
purchase of a new factory near Punta Gorda, Fla., at
a cost of about $951,928.
It will set aside $150,000 for
research and development purposes and the balance will
be

capital stock.
Price

par)

/■.■/

pany

used

operating capital.
Underwriter—Tellier &
as underwriters.
-

as

Co. withdrew

The

Peninsular Oil Corp., Ltd.,

estimates an/aggregate offering price of $2,952,000 based on $9.84 a share which would have been

& Burr and
Pierce, Fenner & Beane. Proceeds—Shares
are; being
sold by Consolidated Electric and Gas Co.
(parent), in compliance with geographic integration pro-

up{i

filed

;•

,

Montreal, Canada

/

company

Merrill Lynch,

-

12

Underwriter—John G. Nesbett & Co., New York.
Based on market.
Proceeds —For investment.

—

'

<.

Corp., Washington,

Fibre

Price—50

stock.

Nesbett Fund Inc., New York
March

•/

.

Palmetto

August

common, on behalf oT

June

drawn.

cumulative preferred
shares of common stock 1

(par $100) and 10,000
(par $100). Underwriting none. Price—Preferred $100;
common
$100. Offering — Securities will be offered
mainly to employees. Proceeds — For construction of
plant, purchase of machinery, etc.
; !
•
; :

I Latin American Airways Inc., New York

t

March

pf1
l,'

\

;•

Calif.

Oakland,

Corp.,

stock

•

■

/:■■"

March 11 filed 7,000 shares of 6%

Prices—$8.50 per share.
Underwriter—Childs,
Ueffries & Thorndike, Inc.
Proceeds to selling stock¬
holder.
'' /',."
•.
r(mix.

Plywood

225,000 shares are outstanding and are being sold by lfl
stockholders, and 2,500 shares are being soid by A. U
Marlman to all salaried employees. Issue may be with-.

dividends. Indefinitely

'y.-i //;/■■-

offering price

on

Feb. 28.;

Sept. 3 filed 600,000 shares of common (par $1)/Under¬
writer—Sabiston Hughes, Ltd., Toronto, Canada. Price—
60 cents a share.
Proceeds—Net proceeds will be used to

;

Newburgh Steel Co., Inc., Detroit

troit.

Shares

are

machinery

drilling

purchase

Aug. 2 filed 30,000 shares of 6% cumulative convertible
preferred stock* (par. $10)y and 30,000 common .shares
($1 par).
Underwriter—Charles E. Bailey & Co., De¬

and

y

Pilaris Tire & Rubber Co.,

other

equipment.

Newark, O.

Sept. 27 filed 100,000 shares ($20 par) cumulative con¬
vertible preferred. Underwriter—Van Alstyne; Noel &
Cd, and G. L. Ohrstrom & Co., New York. Price—$20 a
ghare. Proceeds—For payment of loans and to replace

issued and outstanding and are being

sold

by Maurice Cohen and Samuel Friedman, President ^
E|i*6ad Street, New York City.
- ♦
///,./ *''//'/ V" *' and Secretary-Treasurer, respectively, each selling;; working capital expended in purchase of building from
15,000 shares of preferred and 15,000 shares of common. ; RFC and to
complete construction of a building.
^
Maguire Industries, Inc., New York
Price—$10 a share for the preferred and $6 a share for /
March 7 (letter of notification)
the common/• ~
/
Pig'n Whistle Corp., San Francisco /i ?
; 7
300,00(f shares^of com-'
"/••'■■,;-r
;//•':
mon stock
(par $1). Underwriting; nqneT Price—$1 per
Dec. 26 filed 50,000 shares (par $7.50) cumulative con¬
•/■ New
share. Stock will be offered for
England Gas & Electric Ass'n /(3/31K ^ 4
subscription to stock- •.?
vertible prior preferred $2 dividend stock.- Underwriter
noon

90

.

.

holders of record March 29 in ratio of 1 new share
each 3 shares held. Rights expire 3' ptm.;

'

for

Feb. 28 filed $22,425,000 20-year collateral trust sinking

/Massachusetts Investors Trust, Boston
Macch

19

filed

696,178

shares

:

beneficial

of

shares

(par $8)
$5.50 preferred

«

Based

on

market.

:l^/rMays (J.
.Feb.

28

Sanders

&

Co.

Boston.'

share, and 543,375

150,000 shares

($1 par)
Co., Inc., New York.

Under¬

common.

Plymouth Rubber Co., Inc.

,

be sold at competitive

filed

300,000 shares ($2 par) common, to be
stockholders, and an additional 12,500
shares of outstanding common expected to be offered
by two selling stockholders by April 30. Underwriters—
28

Feb.

bidding.
Probable bidders include The First Boston
Corp.; Halsey, Stuart &?Co. Inc.; White, Weld & Co.,
and Kidder, Peabody & Co;
(jointly).
Common and
preferred exempted from competitive bidding. The First
Boston Corp. has been selected by the trustees as under-

W.) Inc., Brooklyn, N. Y. •./'■■/////

filed

preferred stockholders at $9 per
shares for conversion of pre¬

common

Price—'* ferred. Underwriters—Bonds will

Proceeds—For investment.

pany and proceeds will be used in connection with recent
purchase of four Chi Chi restaurants and cocktail
lounges in Long Beach, Riverside, Palm Springs and San
Diego and for working capital.
'

to be offered in exchange for
5-for-l basis; $479,235 shares com¬

on

& Co., Los Angeles, t Price by amend¬
Proceeds—23,481 shares are being issued by com¬

—G. Brashears
ment.

common

to be offered such

mon

interest.
^

Underwriter—Vance,

-

fund bonds, series"A, due 1967 ; 77,625 shares ($100 par)
cumulative convertible preferred; also filed were 766,776

(EST) April*
21. Subscriptions payable at
Registrar & Transfer Co.;
2 Rector St., New York. Proceeds for
working capital. "

offered by selling

F. Eberstadt & Co., Inc./ and E. W- Clucas & Co., of New
;
York.
Price by amendment.
Proceeds—Go to selling
Holders of
total, 100,000 shares are being ; writer of the preferred and common stock.
stockholders.
sold by seven stockholders. The
existing $5.50 preferred stock of record March 24 will
remaining 50,000 shares
have the right to - subscribe to the new common at $9 >
being sold ov me company, which will use its pro¬
Porcupine Club, Ltd., Nassau, Bahama Islands/
ceeds for general
corporate purposes.; /
./ V// per share in the ratio of 5 common for each $5.50 pref¬
Feb. 27 filed $125,000 5% first mortgage sinking fund
erence held.
Subscription rights will expire about April
bonds, due 1971. Underwriting—£Jone. Offering—Of the
15.
Michigan Consolidated Gas Co., Detroit
Proceed^—Financing is part of recapitalization plan
4
total, $87,500 will be issued in exchange for an equal
to retire outstanding indebtedness of $34,998,500.
March 7 filed $6,000,000 first mortgage
Bids
bonds, due 1969./
amount of outstanding 5% notes. The remaining $37,500
-Underwriting—To - be determined by competitive bid- / for Bonds—Bids for the purchase of the bonds will be v of bonds will
be offered to club members.
Price—The
received up to 11:30 a.m. (EST), March
ding,. Probable bidders—Dillon, Heed & Co., Inc.; Hal31, at 10 Temple ;;; bonds
will be issued in denominations of $1,000 and $500
Street, Cambridge, Mass/
/;
sey, Stuart & Co. Inc.; The First Boston Corp.; Harris,
for sale at their face amount. Proceeds—For repayment
Hall .& Co. (Inc.). Price—To be be determined by com- :
of bank loan and other corporate purposes.
•
New Jersey Water Co., Haddon Heights, N. J.
petitive
bidding.
Proceeds — Net
proceeds,
together /'
(4/1)
•
With funds to be received from the sale of additional
/Public Service Co. of Indiana Inc. 1
March 24 (letter of notification) -2,950
common shares to Michigan's parent, American Light &
shares, $4.25 se-o March 26 filed $11,077,800 15-year 2%% convertible de¬
ries A preferred stock (no par).
Traction Co., will be used to finance its
Price—$101 per share. - bentures.
Underwriters
property con¬
None.
Offering —For sub¬
Underwriter—E. H. Rollins & Sons, Inc.
struction and equipment program and to reimburse
Proceeds—To > scription to common stockholders in the ratio of
$200
retire 7% .preferred stock.
its
treasury for previous construction expenditures.
principal amount of debentures for each, 20 shares of
writer—Burr

ment,

&

Proceeds— Of

Price by amend¬

the

r

*

•

.

.

•

-

.

—

*

■

/■.:

^

;

•"

■

///..

//

Michigan Gas & Electric Co.

Northern Natural Gas Co^ Omaha,

(3/31)

June- 24 filed S3.ono.ouu of series A
first mortgage

bonds,

-

,,'dca 1976; 14.000 shares ($100 par) cumulative preferred I
*fr»Ck and 120.000 shares ($10 par) common stocK.

Inc.

(bonds

only).

on

a

Offering—New

Net proceeds will be used to construct additional
prop¬

pre-

share for share

exchange
outstanding 7% prior lien, $6 nopar prior lien, 6% preferred and $6 (no
par) preferred.
Of the common stock being
registered, company is
/"selling 40,000 shares, Middle West is selling 57,226
shares and Halsey, Stuart &
Co., Inc., New York, is
selling 22,774 shares.
Proceeds—Michigan will use net
proceeds from bonds to redeem $3,500,000 3%% series A
;/first mortgage bonds, due 1972' at 106.75 and interest.

•

basis to holders of its

jNfet proceeds from sale of common and from shares
/hiew preferred not issued in exchange will be used
''redeem

of Bankers

16 Wall

•
-

Trust

Co.

Mission

Appliance Corp.,

Los

of

Angeles.

share.

ery

and equipment.

water heaters.

t1

Mitchell Mining Co.,
Inc., Mount Vernon, Wash.
'March 17 (letter of notification)
100,000 shares (100 par)
^ Stock.
Price—100 a share. To be sold through officers
and directors.
For mine

development.

Motors Securities
Co.,

;

Inc., Shreveport, La.

V

19 filed
$5,000,000 collateral trust notes. Underwrite
ing—No underwriting.
Price—$97,65 a unit. Proceeds—
~or
purchase,; of automobile time sales paper which is
).

1

"

its principal

V;:

i

Murphyi

busi^e|syajsja, finance

(GC.)Co4yMcKeesport,

c^uSP shares of
naenL.

Proceeds—Redemption




Pa.

Co.

Power

^

.P^ice by amendof outstanding 4%%
pre-

jrricc—a

Co.

stock to parent, North¬
(Minn.), will be used to reim-

snare,

ino

underwriting.

Puritan Fund,
3

Corp.
the

filed* 300,000

Price

at

Investment

diversified

«

Inc., Boston,
shares
H.

of

Davis

market.

The

capital stock
&

fund

Company . Act of

investment

Co.
is

(par $1)..
Crosby

The

and

registered under
as an open-end
the management

<

1940

of

company

Proceeds—For investment.

'

,

,

,

,

;

;

Quebec Gold Rocks Exploration Ltd., Montreal
Nov.

13 filed 100,000 shares
(500 par) capital stock.
Underwriter—Robert B. Soden, Montreal, director of

common

<

company.

tion and

. Price—500 a
share.
Proceeds—For explora¬
development of mining property.
/ ; v /

;;; ■, Refrigerated Cargoes, Inc., New York

Nugenfi National Stores, Inc., New York

Feb. 3 filed 25,000 shares
($100 par) 6% cumulative pre¬
par) common stock
Underwriters—Newburger & Hano, and Gearhart & Co. f. ferred and 25,000 shares (no par) common. Underwriter
—John Martin
Inc. Price, $6,75 a share. Proceeds
Net proceeds to
Roloh, Vice-President and director of
the company from 62,000
company.: Price—The stocks will be sold at, $105 per
shares, estimated at $350,200,
if
unit consisting of one share of
will be applied as follows; About
$111,300 for retirement
preferred and one share
of* °ommon.
of outstanding preferred
Proceeds—To be used in organization of •
stock; $41,649 to purchase 100%
of the stock of two
business,
•
affiliates, and balance $197,000 for
(
r
r--» June

21

filed

85,000

shares

($1

—

other corporate

3,000

purposes.

shares will

go

to

The proceeds from the other

selling

'

stockholders.

temporarily postponed.

Republic Pictures Corp., New York

Offering

Registration

v

Oglethorpe Fund, Inc., Savannah, Ga.i

ceeds—For investment.

not

preferreds and share-for-share plus $5 per share in cash
for 7% preferred of the Pacific Power &
Light Co. and
Power &'Light Co.
Pal

Blada

Co.,

into

merger

No underwriting.

•

Pacific
'»•••

-

.

Inc., New York

June 28, 1946 filed 227,500 shares
($1 par) capital stock
Underwriters
F. Eberstadt &
Co., Inc.
—

.

July

31

covered

Offering-.

as

common

underwriters.

stock,

184,821

(SIQ, par)

witji Soling,

•

Company has decided to ;

issue 454,465 shares of common
stock only, which will J)e
offered for subscription to
stockholders of.rejcord Sept. 5 to the extent of one
share for each five held. Issue will

Pacific Power & Light Co., Portland, Ore.

July 10 'filed 114,815 shares ($100 par) 5% preferred.
Offering—Company proposes to exchange the new pre¬
ferred share-for-share for the
outstanding $6 and 6%

upon

filed

277,231 shares (50c par)

Grace & Co.

■

Electric. Co.

originally

shares of $1 cumulative
convertible preferrqcl

and

March 10 filed 200,000 shares of common.
Underwriter—
Southern Securities Corp. Price—Based on market. Pro¬

Northwestern

\

common stock (par $1).

^

;

company,

slock,

^

a

Business—Manufacture of gas-fired
//v/
///';■
/i'./ :
/

uapiiai

type.

burse its treasury for
previous construction and improve,ment expenditures.
.v :,; y> ; •'

Under¬

Price—$11.50

Proceeds—For construction of new
plant build¬
ing and an office building and for purchase of machin¬

States

ern

v

.

(W»s.)':--;'':r/:V^./:/;;^/;/t;;'

the redemp¬
bonds, 3y2% series,
Tbe balance, together with funds

from sale of additional

Angeles
common.

loan notes.

Underwriters—Paul

1964, at 105%%.

Price—At
of $11,500,000 of

Pumica Biock Co., Seattle, Wash.

Feb.

due

(conference room No. 1),
<
■•//■/'.
•:'/%/; /•'

March 25 filed 58 000 shares
($5 par)
writer—Lester & Co., Los

Northern States Power Co.

into

convertible

1959.

Operation, of business of manufacturing cemertt build¬
ing blocks.
*
v
^ "

r

will apply $17,866,187 of proceeds toward
tion of $16,975,000 first mortgage

to
serial debentures, due 1951, at
It also will redeem at 105 and ac¬

Street, New York.

:

B

24 filed $19,000,000 first mortgage
bonds, series
April 1, 1977. Underwriters—To be determined by '
competitive bidding. v Probable bidders include Smith,
Barney & Co.; The First Boston Corp.; Harriman Ripley./
& Co.; Halsey, Stuart & Co. Inc.
Proceeds—Company

unexchanged shares of prior lien and
preferred stocks.
Bids Invited—Proposals for the
pur¬
chase of the bonds, preferred stock and
common stock
will be received up to 12 noon
(EST), March 31/ at
Office

bank

due

crued dividends all

;

*

The debentures will be

March

$375,000 3J/2%

101.2 and interest.

.

Co.

erty and facilities.

held.

from May 1, 1947 to April 30,
face amount.
Proceeds—For repayment
common

bidding.
Probable bidders include Dillon, Read Inc.; Blyth & Co., Inc.; The First«Boston Corp.; ;;
Halsey, Stuart & Co. Inc.; Kidder, Peabody & Co. Price ;
—To be determined by competitive
bidding. Proceeds—
&

tyvjfjr
ThwrFtrst; Hoster* £prp*; Harris, Hall & Ox;;
•■(inc.); Metfill Lynch, Pierce;" Fenner & Beane; Halsey,
preferred will be offered

,

itive

Un-

be determined by competitive
bidding,
"frobabW bidders fotcltid&'Blyth/fc Co.,
Inc,;Kidder,Fe*-

'Stuart & Co..

common

Neb.,

March 13 filed $10,000,000 of serial
debentures, due 1956
to 1967.
Underwriters—To be determined by compet-

be underwritten.

-

/

'

~

,

v

,

Richmond Radiator Co.,
Richmond, Va.
March
i

6

filed

debentures
None.

due

$1,025,000
April

1,

4%

1948

Offering—Debentures

scription to

5-year
to

1952.

will

be

serial

maturity;'

Underwriting^/
offered

for

sub- y

common stockholders in
the ratio of $1 of
such debentures for each
common share held.
Reynolds
Metals Co., which holds
61.3%?, of the company's out¬

standing common, has. waived its right to
purchase Lis
pro rata share of debentures until the.
subscription pe¬
riod for other holders*
expires on April 15. Reynolds,
will have until April 21 to
subscribe for the debenture3

f-'1

...

/

OW? !•

Number.4580

Volume 163v

THE COMMERCIAL & FINANCIAL CHRONICLE

shares, and eight selling stock-'

If de^fthtures^W^L^^^iL^Lf^^'ainotintt. of^$25^"$5(^»V hsJte/r ar "disp^ing ,** and" e,ght SelHng stock"
share9'
?
cordon- Prlee—$10.50disposing ,
"

m $100, $500 and $1,000. They are convertible into
//.'/ stock up to June 30, 1947. Proceeds—Will be used to
retire $1,025,000 of the company's notes held by Rey-

a

.,11^1

j'/;>-',■ •v*.;••<;,t;i' Y/;:*' •'';Ht/•
•
'"«•)'■

/' f

Ji

t •'

'

•

t

■

<

■

J

■

■

.

"

;

+

.'

f\i.

.

'

.

by ^company will be applied to working capital
Initially.. Offering date indefinite. '
*
1

,

Textron Inc., Providence, R.

^

Feb.

28-filed

($25

par)

\

\

'

5%

preferred. Price—$10 a share. Underwriter—Miller &

'

and Maxwell, Marshall & Co., Los Angeles. Price by*
amendment.
Proceeds—For payment of $3,950,000 of

'Patterson, Richmond, Va. For expansion purposes.'.
Sierra Petroleum,

2,000,000

shares

1,000,000 shares of Barney Oil Corp. stock.

for

Toledo

Remain¬

Price—10 cents

share.

a

No

Silver Pirate Mining Co., Wallace,

•

(letter of notification)

14

March

Ida.

1,000,000 shares

(100

par) .common. Price—12V20 a share.-To be sold through
officers and directors of company.
To purchase plant

Skyway Corp., Providence, R. I.

•

Murphy,

Mar. 19

to

stock

33 y3

Manufacturing Corp.

at

(by amendment) »filed

operation.

($25 par) 5% cumulative con¬

Price — Public offering price of unsubscribed
amendment. Proceeds—For expansion of plant
(facilities and for additional working capital. Offering
postponed.

March 24

shares by

common

will be offered

subscription to common stockholders of Segal Lock
o+ QO •«
eharom thp Tfltlfl
& Hardware Co. Inc., parent, at $9 a share* in the ratio
of one share of preferred for each 30 shares of Segal
held. Unsubscribed shares of preferred will be
publicly at $10 a share. Proceeds—For additional
working capital.
Business—Manufacture of slide fast¬

v/

::

'* "

" '

Stuart & Co. Inc. (bonds);

Co.,

and assets of

i

i.

:

•

•

;

...

■

'•

;

erence

market

''

•

;•.

■

Blair
-

■■■.

5- Co.

voted to offer 100,000

March

:

':iY/

BOSTON

.

J

»

-

PHILADELPHIA'

NEW YORK

•

•

PITTSBURGH




■

CHICAGO

•

•

ST. LOUIS

•
•

- //-

CLEVELAND

SAN FRANCISCO

Co.'

upon

tke

•

and

12

(letter of notification)

$300,000 non-interest

/

"-

.

/ ;/'S..

■«

,

•V

Wyandotte Worsted Co., Waterville, Me. °;
f
26 filed 92,038 shares of common stock (par $5). '
Underwriter—None.
Stock will be sold through regular
market channels over the New York Stock Exchange
at current market but at not less than $10 per share.
Proceeds—Stock being sold by five stockholders. »•

i

1

Feb.

.

■}.
!:

i

ISSUE

Central &

shares of

35,000

authorized common to 1,000,100,000. The common classi¬
fication includes the class A and class B stocks, which
would be raised from 10,195 to 250,000 shares and 89,805
to 750,000 shares, respectively.
;
//
- /
increase the

•

Central

to increase
pany

of

Illinois Light Co.

the SEC to approve a

the authorized common

proposal

shares of the com¬

facilitate the disposal
parent, the Commonwealth &

and to split the shares to

the

South West Corp.

April 7 the SEC will consider request of Middle West
Corp. to extend the time for disposal of its common
stock holdings in Central & South West to June 30, 1947.
Middle West said that it has been physically unable so
far to distribute Central & South West common to its
own

stockholders as

contemplated under the

'

r

plan.

from the present

-inc.

BUFFALO

West Utilities

bearing debentures. Price—$250 per unit. No under¬
writing. To obtain golf course property and to improve
same.

when the securities
voted to raise the

authorized preferred stock to

shares of

March 25 company asked

V'./V

North

Woodmont Country Club, Bethesda, Pa.

.

,

of

Wisconsin

Offerings

REOISTRATION)
SINCE PREVIOUS

stock to the public
improves. The stockholders

chares and to

Corporate Securities
u-v..

<

stockholders of North West Utilities Co., parent

dissolution

Kidder, Pea-

three Michigan operating utilities—HoughElectric Light Co., Copper District Power

25 stockholders

000 shares

•

four

Co., Madison, Wis.

of Wisconsin, who elect to sell such shares of
common
which will be distributed to them

American-Marietta Co.

20,000

State, Municipal and

stock is being sold by the

Wisconsin Power & Light

Curtis (jointly); Blyth &
Corp., Price—To be de¬

class A common

United States Government,

.

common

S

"prospectives" reported during the past week are
noted are not repeated)

March

;•

common,

will use its proceeds
bank loans, to acquire additional warehouse space
to provide working capital.
"

and

•

I

Offering—Of the total

herewith. Items previously
•

j

*

to pay

competitive bidding. Proceeds—Company
organized Feb. 26, 1947 to acquire the capital stocks

ton County

y

v

r. ,.'

,

Inc.

officers and directors. The company

•

Merrill Lynch, Pierce, Fenner & Beane

Webber, Jackson &•
Inc.; The First Boston

Paine,

(NOT YET IN

V'

Inc., Boston.

tures while the

^

INDICATES ADDITIONS

I !•.

under way.

5,000 shares are reserved for offering to employees.' Price
By amendment. Proceeds—Company is selling the deben¬

Price—$4 a share."

Prospective Security

>

now

Thorndike

termined by
.

Offering consists of an unspecified
sold by the company and by

shares being

25, filed $1,000,000 12-year debentures, due 1959,
50,000 shares ($1 par) common. Underwriters—
First Colony Corp., New York, and Childs, Jeffri'bs1 &

Manufacturing Corp., New York

expansion of business.

body & Co.;

was

■

i

include Halsey,
"

Je*(

and

.-.•/;//

/|

—

;'

amendment.. Probable bidders include Glore, Forgan
Co., and Harriman Ripley & Co. (jointly); The Wis¬
consin Co.; Dillon, Read & Co., Inc.
Proceeds—Part
of ..the shares are to be sold by Middle West Corp.,
top. holding company of the/System, and part, by pref¬

-

.

v

,,

Feb.

1J),000 shares ($100 par) cumulative preferred and 180,-*
; /000 shares* ($10 par) 'common.
Underwriting—To be
determined by competitive bidding.
Probable bidders

/

N. J.
Aug. 28 filed 195,000 shares common stock (parCom$i)
Underwriter—C. K. Pistell & Co., Inc.
Offering
& Co., Trenton,

/..//

shares

Whites Auto Stores,

:

^

Indefinitely postponed.

Swern

of

program

Upper Peninsula Power Co., Houghton, Mich.
March 6 filed $3,500,000 first mortgage bonds, due 1977;

Publications, Inc.
July 17 filed 197,500 shares of common stock.
Under¬
writers—Glore, Forgan & Co.; Offering—The offering
represents a part of the holdings of the present 'Stock*
Street & Smith

.

(4/1)

share. Em¬

ital and

common

eners.

Uhder-

common.

being offered by each will be stated definitely by amend¬
ment and the total number of shares presently stated
will be reduced if the offering consists of a smaller num¬
ber of shares. Company will use its proceeds estimated
at a minimum of $6,500,000 together with a $7,500,000
bank loan, toward payment of its promissory notes and
to finance company's equipment and facilities expansion

:/./

Price to public for preferred $5 per

?i.i

r*„

offered

ma¬

William A. Coulter, President and Director. The amount*

permitted to purchase preferred at $4.50
per share. Of the common 30,000 shares are reserved for
the exercise of warrants up to Jan. 15, 1950, at $3.50 per
share and 200,000 are reserved for the conversion of the
preferred. Underwriters—Names by amendment. Price
per share for preferred. Proceeds—For working cap-

for

JI

.

May 21 filed 550,000 shares ($10 par) common stock to
be
sold
at
competitive bidding.
Underwriters—B*

50c).

Underwriter—Floyd D. Cerf Co. Inc./:

Offering—The shares initially

through li¬

expenses.

200,000 shares (par $1) 25c cumulative con¬
vertible preferred and 230,000 shares of common (par

Strauss

vertible preferred.

sold

installation Of

par;

Lines, Inc.

1,200,000

Proceeds

number

ployees will be

Chicago.

Air

filed

27

ment.

Nov. 4 filed

Fasteners Inc., New York
March 25 filed 25,000 shares of 60 cents cumulative con¬

v

•

For/ mine

,-^,v

of the company.

U. S. Television

business.

holders.

• -

(letter of notification). 3,000 shares of class A
on behalf of a Grover Fitzgerald, Boston, Di¬

underwriting. ////

No

Youngstown, O.
March 17 (letter X)f notification) 2,100 shares (no par)
-cumulative preferred, Price—$100 a share. Butler, Wick
& Co.,- Youngstown,, Ohio, - dealer.
For expansion of
Finance Co.,

be

($1 par) capital stock.Underwriter—Dillon, Read & Co. Inc. Price by amend¬

Patents Corp., Boston/ Mass.

rector and President

.

nrr

Western

Corp.,

Conditioning

Air

States

United States

•

price.

o

Ney.

underwriting.
'
* "

capital. I//. ■/••,:■;/,////■•

preferred share for each five shares of common held
sold to underwriters at same

♦

*

-

To

West Phila. Consumers Cooperative Inc.

Nov.

(100 par)
issued to
Archie S. and Mae Feinberg as a part of the considera¬
tion for purchase of co-partnership business under name
of Great National Air Conditioning Co., Dallas, Tex. The
remaining 57,000 shares will be offered publicly at from
$3,625 to $4,125 a share. Underwriting—.George F. Breen,
New York. To reimburse treasury and
for working

unsubscribed shares will be

State

share. ' No

share.

purchase and

^letter of notification) 20,000 shares of com¬
mon.Price—$5 a shart. No underwriting.
To estab¬
lish cooperative store.
:
f
.

March 13 (letter of notification) 75,500 shares
common.
Of the total, 18,500 shares will be

preferred. Underwriter—Ames, Emerich & Co.,
Inc., Chicago. Offering—To be offered to common stock¬
holders for subscription at $25 a share in the ratio of

•

a

Minneapolis, Minn.

vertible

one

,

'

United

Manufacturing Co., Detroit, Mich.

Sept 3 filed 40,000 shares

cents

a

,

•

(letter of notification) 100,000 shares of treasury
be transferred by company to Bert Riddick

19

For

245,000 shares

u

;^/•

' ■-V/v./'.•

;

,

Price—$10

salesmen.

March 21

Tonopah Divide Mining Co., Reno,

•

(4/7-11)
110,000 shares of 75c
cumulative convertible preferred stock, series B (par $5)
Underwriters—Van Alstyne, Noel & Co. Price per share
$12.50 Proceeds—Net proceeds will be applied to re¬
demption of bank loans and to cover part of cost of
expansion program.
' : , ■
: •

■

#

' y*
$7 a share. Proceeds—To repay short term
;ba"k loans for aircraft communication equipment part
and shop facilities and for Working
capital - "/■•■ " /../

To complete erection of mill and re¬
/.

t

?

Auchincloss, Parker & Redpath, Washington,

(letter of notification) 25,000 shares of com¬
a share.
Underwriter—Joseph J.

Reno.

<•;

+WoS?MCoast Air,ines» 'nc., Seattle, Wash. „/
2 filed

C

■

condition property.

^

r

Inc., Phoenix, Ariz.
(letter of notification) 10,000 shares ($10 par)

bept.

Price—50 cents

mon.

Solar

Soss

'

Nev.

Reno,

March 20

warrants to purchase
1,000 shares (no par) Class A common. Price—$100 a
share. No underwriting. For working capital.
March

censed

I /;

Tonopah Belmont Consolidated Mines Co.,

j

Weaver Placer Mines

chinery and payment of operating

.

(letter of notification)

18

March

•

March 18

•

I March 18 (letter of notification) 500 shares ($100 par)
!; preferred. Price—$100 a share. No underwriting. For
purchase of shop equipment and for working capital.
i

Acquiring and developing mining properties.

common.

*//'V.

■;::/■"■

_

V'//' ://

Edison Co,

ing a payment of $53,906,590, exclusive of interest and
j/
: /■'; //\
v;•
;

Skymotive Aviation Management Corp.,

#

(O.)

.

Nov. 13 filed 400,000 shares
($1 par; capital stocks Un¬
derwriter—None as yet.
Price—25 cents a share.
Pro¬
ceeds'—For
developing mining property.
Business-

dividends.

I machinery, equipment and for working capital.

rlfrK-y. Park Ridge, III.

$1-'

working capital.

Victory Gold Mines Ltd., Montreal, Canada

Smith, Barney & Co. Price to be determined by competi¬
tive bidding. Proceeds—Net proceeds together with $4,500,000 bank loan and if necessary, the $5,000,000 to be
contributed by its parent, Cities Service Co., will be used
to redeem outstanding debt and preferred stock, involv¬

underwriting.

acquire and develop mining properties.

To

of

amount

i

Underwriters—To be determined by competitive bidding.

March 21 (letter of notification) 511,550 shares (10c par)
common.

the

in

Probable bidders include The First Boston Corp.; Halsey,
Stuart & Co. Inc. (bonds only); Blyth & Co., Inc.; and

Silent Bell Mines Inc., Orient, Wash.

•

Inc.

Underwriter—Carver & Co.,* Inc.,
Price—Debentures 98; common $3.75 per share.
For plant construction,' purchase of equip¬

ment and for

sub-

Oct. 25 filed $32,000,000 first mortgage
bonds, due 1977,
and 160,000 shares of ($100 par) cumulative preferred.

indebtedness of Barney and to drill oil wells.

pay

Southern

debentures.

Proceeds

000,000 each, and for working capital.

will be sold at 100 a share. No underwriting.

ing shares

| To

(50

commonl 500,000 shares will be offered in exchange

par)

$

of notification)

(letter

18

March

Tey.trcn

by'a

the

Boston.

Underwriters—Blair & Co., Inc., New York,

Colo.V:Ov- '• wi/;-b.ai?k. loan notes; purchase of two notes issued

Inc.*;Denver,-:

/]

Chemical & Carbon Co., Salt Lake City

of

convertible

preferred.

Droeeeds

^ $700,000 15-year convertible debentures and
225,000 shares ($1 par) common.
The statement also
covers 105,000 shares of common reserved for conversion

;

March 12 "(letter of notification) 20,000 shares ($10 par)

:
'

-

300,000 shares

I.

The

» Connect^ w«h «*

69

—
^

.

Inc., Arlington, Va.

Rosslyn Loan Co.,

Midi CO

TUjUv/U

A *1/111

sdld

«

4y

u

«

tv..

Co. and Iron Range Light & Power Co

holdings

of

Southern Corp. in

its

Central Illinois.

'

'

*

Chicago, Indianapolis

•

& Louisville Ry.

(4/7)

opened noon (CST) April
7 for $2,800,000 of equipment trust certificates, the pro¬
ceeds to be used to finance not over 75% of the purchase
price of 22 diesel-electrid locomotives, &o be acquired at
an estimated
costt of $3,765,500?; Bids Will be received
at office of company, 608 So. Dearbprh St., Chicago. FA"*-Company is

inviting bids to be

!•

;

/:

/

I

3/V'*-•■*>*;

(Continued on page

1698)

'

!■

THE

1698

•

(Continued from page 1697)
Fairbanks

•

March 26 company is working out

details of

a

Foremost

•

Public

•

Missouri Utilities Co.

Service

South

Carolina

200,000 shares of

of 2%%

ditions. Of the

mon

total

distributed

as

stock dividend in the

a

outstanding.

coupon,

or

basis of

ence

Telephone

which, almost without exception,
should be in the market for

new

capital from time to time.
York

Telephone

Supply Co.

filed

$74,266,000

stated financing would be through sale of
bonds
preferred stock supplemented through short-term
loans and issuance of additional common stock.
and

•

Western

Electric £o.

^518

April 8 stockholders will vote
capital stock from

600,000 shares

with the

additional

pro-rata

basis to

Telegraph Co.

increasing authorized

on

7,500,000 shares to 9,000,000 shares
1,500,000 shares to be offered on a

stockholders.' American

owns

Sterling Convertibility
In July Anticipated.

(Continued from page 1660)
the

possibility of

wage cuts.

(Continued from

The

first step to that end would be the
creation of

unemployment through
deflationary credit policy. Pos¬
sibly it is this that the deflation¬

a

Co.

al¬

other currency.
In exchange for
this British concession the three

countries agree to accept sterling
offered by other countries

less.

when

in settlement of balances of trade.

1653)

page

likely to be made fully convert¬
ible. Probably the figure will
be
This

will

hundred

leave

million

the

even

most

optimistic

bination of bonds and stock.

pleasantly surprised by the

were

Trend Away From Refundings

celerity which marked its place¬
Sold in competitive

ment.

bid¬

The trend away from

be

would

refunding

eliminated, and the la¬
they employ would become

bor

available for
The

economical

more

use.

trouble

is that a large num¬
firms, whether efficient or

ding, the issue was passed along

operations

to investors within the space of

slight firming of basic money rates
otherwise,
have
become
very
became apparent midway through
liquid since 1939, and do not de¬
1946, but it remained for the re¬ pend on
banking credits to any
cent report issued by SEC to dis¬
large degree. A deflationary drive
close just how well-defined that
would not result in, therefore,* the
tendency had become by the year- survival of the
fittest, but the sur¬
end.
'
x •1fe-fe vP v vival of the
liquidest. Many of
The Commission's report dis¬
the inefficient firms would have
closed
that
refundings which J the resources to earry on without,
bulked large in the preceding ; banking credits, while some^of
fthe*
year were definitely on a down- ; efficient firms would close
-down
trend when the year closed.
for lack of liquid resources.
A recapitulation of 1946 new
The
Government

few hours, spurred,

it should

be noted, by the quick

clearance

a

accorded

Securities and

by the

Commission.

Exchange

the real story behind
this remarkable performance is to
be found in recognition by the
Perhaps

and the bankers, that the
"customer is always right."
At
any rate the business was carried'
out realistically, from bidding to<
pricing, and consequently the yield
basis to the purchaser.

ularly the insurance companies,
which have not

had too

easy

a

the terms they seek.

on

But here

•>'.

ment

t

was

a

prime invest¬

being offered at

100.75 to return

price of

a

;

"new

that

showed

issues mounted to

the

just about
tripling the total for the same
type of issues in 1945 and ap¬
level,

$3,000,000,000

appealed to institutions, partic¬

time finding investment outlets

offerings

money"

the type of issue that

was

the

with

proximating

the

peaks

of

the

flourishing 1920's.

Refunding by contrast tapered
to around $2,700,000,000 for
debts as
against the $4,300,000,000 peak set

Loan

Agreement.

Instead,

the

whole

mainder of

seven

pounds

so

The outcome of the A. T. & T.'s

operation reflected the stiffening
occurred

has

the

in

basic

ment

Halsey Stuart Offers
B. & 0, Equipment Issue

market since the beginning ""Halsey, Stuart & Co. Inc. and
summer.
Two
banking associates won the award Wednes¬
groups embracing, between them, day of $5,650,000 Baltimore & Ohio
equipment trust,
series T,
just about the entire distributing RR.
facilities of the investment indus¬ 1%% equipment trust certificates,
money

last

of

and

try, sought the issue.
The successful group bid was

100.30 for

;

ing for
to

the

a

an

2%%

mak-

coupon,

indicated

cost

company

35-year

But to get an idea of the

which

has

come

about

change

it

is

but

to look back to last July

necessary

when the company

immediately re-offered them,
subject to Interstate Commerce

Commission authorization, at prices
to

yield from 1.10% to 2.15%.

basis

of 2.737% for
issue, a relatively
satisfactory basis in itself.
the

floated its last

issue by the competitive route.

life
i

*•".

was

at ,that

smaller,

the term
That
hid

was

issue
of

time

the

total

$125,000,000.
longer. 40

brought

100.369393




but

is to

is

to

The

certificates, issued under
Philadelphia
plan,
mature
$565,000 annually April 1, 1948 to
1957, inclusive, and will be un¬
conditionally guaranteed as to the
payment of principal and divi¬
dends
by endorsement by The
Baltimore & Ohio RR.
Proceeds

from

the

sale

a

for

But

years.

winning
a

2%%

for

cost,
new

not

more

estimated

equipment

of

$7,073,720,

standard-gauge

consisting

open-top steel hopper

the

provide

80%

than

at

of

the

of

railroad
of
cars.

2,000

control

leave

tries

to

now

Govern¬

key industries

secondary indus¬

evident

private

far too
In

short

It

is

large proportion of labor.

order

for the

initiative.

that secondary in¬
employ between them a

dustries

to

make labor

available

requirements of the textile
which

of

is

labor,

desperately

the

Government

intends to restrict
employment in

luxury trades and other secondary
trades.
be

The

essential

long

result

increase

an

is expected

of

goods.

the

to

output of

This would go

ing some of its existing bilateral
monetary agreements, will not
overlook any
opportunity to make
currency
convertibility, multi¬
lateral.

■

,

■

The problem of blocked
its

assumes

"the

sterling

largest dimensions in

of India, Egypt and
Iraq,
Where British forces operated m
the war.
Whereas the accumu¬

lated amounts in the

cases

of

those

over

is

a

of

the

re¬

hundred million

expected

to

be

long period at 2%

interest, and there will probably
be

interest-waiver clause simi¬

an

lar

to

in

the

interest-waiver

clause

the

Anglo-American
Agreement.

Loan

-

Thus there will be

■

.

outright
cancellation or writing off. Al¬
though the effect of the longterm funding and of the low in¬
terest may be the same as. partial
no

cancellation.

V

-

from

In

the I "Financial

Chronicle**

of March

20, it was reported that
D. Raymond Kenney was forming

of Bel¬

and

and
other
reports,
negligible.; About all that

press

seems

be

can

that

stated

each

with

is

party has set forth i+s

position,

and

each

pears adamant.

not pay

assurance

position

The British

ancan¬

off the sterling balances
during the war, and

accumulated
the

owners

no

willingness

cancel

a

stantial part of the balances
th e m

leave

ing

his

to

not

or

upon

im¬

Rather, they are insist¬
annual paying off of the

sums
accumulated in London at
rates which the British cannot af¬

of

ume

between

purchasing

the

vol¬

power and that

of purchasable goods, without
any
deflation

in any case
But
were
an

even

ideal

which

would

a

'-X<; •'•!

economy.

X p'P

? •;;;

Unless progress in this matter
is

greatly
speeded
up,Britain's
deadline,
resulting
from
the
,

economic

practicable from

point

of

view, it

loan
agreement, will
without the hoped for settle¬

Settlement

In

ment

of

ment

to

among

the working classes would

swell the ranks of the

Party.

For this

Communist

reason

alone, de¬

at

enter

of

its

that

that

will

India's

be

as

London

though it might -possibly- develop currency
of its

own

accord.

*

-

sterling

phase. It is
occasion

•:

:•

.V"?

>

••••#.♦•vy-.V•''u

This is
Mr. Kenney having

Willers

staff

E.

C.

of

de

&

Co.,
120
Broadway,
New York City, with which firm
he had previously been associated.

No. of RR.

reached.

XX' two

hundred

to

be

India's

reserve;

Employees
1,324,837

Reduced to

Employees of Qass. I railroads
of

the

.United
of

1,324,837,

States!:

Not

million

month

in

.as

pp

February 1947, totaled
of

decrease

a

2.97%

corresponding

1946, and 0.69% under

January 1947, according to a re¬
port

issued

by

the

Bureau

of

Transport Economics and Statistics,

a

The

million

have

even

settle¬

is 1.2 billion pounds. Of this
sum,
about
three
hundred

in

policy

British-

the

sterling balances

pounds will

deliberate

of

blocked

tjo

a

.■

compared with the

second
on

flation is not likely to be resorted
as

Expected

London,

India's

settlement
total

India

In May

negotiation

will

Discontent

With

May

Indian

believed

it.

the case,
the

middle

vexing problem.

i

would be suicidal for the Govern¬

adopt

■

<

rejoined

American
pass

ment of this

deflationary policy

and

"

investment firm.

be

politically impossible.
if

/"

own

ford without disaster to the home

.

disequilibrium

Raymond Kenney

.• •• •

sub¬

indefinitely

pounded.1

D.

of those balances show

to

of, the Interstate Commerce Com¬
mission.

.

v v

•'

,

•.

•

-'A decline under February

1946

is shown in the number of every

retained

reporting group with the: excep-r

overseas

tion

more

than

pounds

is

*

D. Raymond Kenney f
Remains at de Witters

cases

gium;' Netherlands

a

towards correcting the

way

credit

the

certificates will be used to

True,

get other countries, also, to
voluntarily
shorten
the
Fund
transition period. It may be taken
for granted that Britain, in revis¬

or

funded

seeks

to

One

cancellation of part of the
balances, is not likely to be used.

ways,

Were small

policy under which the

industry

Trifle More Costly

exchange

What Britain

seven

for dis¬
posal in the two additional ways
indicated in the Anglo-American

Portugal
.enough not to impede
a different
reaching, an agreement covering
way.
Instead of taking a leap in
the dark by applying indiscrim¬ both old and future balances, in
inate ,credit restrictions, it intends the cases of the Middle Eastern
to employ emergency powers for countries a; distinction will have
stopping the use of labor for un¬ to be made.V ; In that" part of the
economic purposes. This is a de¬ wor^ the: progress : to
date in
parture from the original labor achieving., a
settlement, judging
to

tackle the problem in

off

opening of the books.

that

intends:*

both long and short-term

yield of 2.72%.
This fitted right into the portfolio
in the previous year.
ideas of the major life firms, not
Last year's trend has been con¬
only in New York, but around the
tinued thus far in 1947, as shown
country. As a consequence spon¬
by
figures
compiled
by
the
soring bankers were able to an¬
"Chronicle" and published in the
nounce
substantial oversubscrip¬
issue of March 17, page 1448.
tion within a short time of the
a

ber of

is

current

on

transactions.

,

company

It

coincident

restrictions

about

pounds

»

but

Telephone &

99.46% of Western Electric stock.

the

with

.*

company

State ists have in mind.
rousing success which atOnly Portugal,
however, has
Public Service Commission plans
It is, of course, technically pos¬ agreed with Britain to make
p. tended the marketing of American
its
for marketing of $125,000,000 of
sible to bring the scarcity of labor currency convertible on a multi¬
Telephone & Telegraph's $200,35-year debentures to reimburse to an end
lateral basis.
by means of credit re¬
It will be recalled
000,000 of 2%% 35-year deben¬ its
treasury for prior outlays and
strictions which would compel a that there was in Britain a
tures, following closely the similar
good
to repay advances by A. T. & T.
number of firms to close down, or deal of complaint over that fea-*
reception accorded Consolidated for
construction. :
;
at any rate to reduce their activ¬
ture of the American loan
Edison Co.'s $100,000,000 issue a
agree¬
Meanwhile New England Tele¬ ities. This course is advocated on ment which
week ago, has had a tonic effect
required Britain to
phone & Telegraph is reported the ground of the time-honored shorten from a minimum of
on investment thinking.
five
contemplating $70,000,000 of new deflationist argument that a num¬ years—as
provided in the Bretton
There was never any question.
financing for acquisition of new ber of uneconomical and inef¬ Woods,: Fund
agreement—to one
of the ultimate success of this
properties and equipment.
This ficient firms which can
only exist year the transition period during
record new money undertaking,
undertaking may involve a com¬ under
inflationary
conditions which the country* might retain
has

ready

The

-

(Del.)

in application to FPC for permission
to con¬
struct transmission pipeline from Wharton
County, Texas
to Keokuk, Iowa, 855 miles, to cost about

stock to finance property ad¬

common

..V','V'';. ■"

;;

.

March 22

Co.

Britain?

&

Telegraph's operating subsidiaries

New

Power

Big Ones

American

v

:

Deflation in

More

parent

of

Hampshire

Trunkline Gas

cost

company's experi¬
should tend to speed up the

plans

New

;.,.v

^

•

of

2.61%.

Two

The

indicated

an

& CO.

/

now outstanding put of a
1,000,000 authorized, the Commonwealth &
Southern Corp. owns all but 12 directors' qualifying;
shares. Expenditures for additions and betterments will.

bonds of 1971 and a maximum of 62,000 com¬
shares. Part of common is to be sold at $20 a share
balance

of

Redpath.

Boston

March 25 company asked the SEC for authority to sell

March 25 company filed a refinancing program with the
Missouri PS Commission. Plan calls for sale of $400^000

and the

near

ProbJ

able bidders if stock-is put up for sale include The
First
Corp.; Harriman, Rip.ey & Co.; Morgan Stanlev

financing through a pre¬
future reported. Probable

Company stated that prior to Aug. 1 it intends to in¬
crease its long-term debt by not less than $4,300,000 and
jsspe and sell sufficient shares of its $10 par common to
produce not less than $3,500,000.
X

Webber, Jackson & Curtis and Allen & Co.

ratio of three shares for each 10 shares now

in

issue

stock

total $8,500,000 in the next three years, it is said.

Inc.

new

March 20 company applied to the SEC for permission to
increase its short-term debt,to a maximum of $4,400,000.

Early registration of 70,000 shares (par $50) preferred
stock expected. Probab e underwriters include Paine,

•

possibility of

underwriter Auchincloss, Parker &

Inc.

Dairies,

26

ferred

debenture

for two plants and for increased
sales volume. Part of the money will be used to purchase
from the government of two plants operated by the
company during the war.
^
issue to provide funds

•

Northwest Airlines,

March

Co.

Morse

Thursday, March 27, I947

COMMERCIAL & FINANCIAL CHRONICLE

staff

of

executives, officials,

and

assistants,-which shows: ah

increase of 0.21%.

V.

1' Jx.;':'

THE COMMERCIAL

Number 4580

163

Volume

specialization

Investor Being Served Better Today Than

the past because brokers and investment bankers are recog¬
entrants into the investment fields in
the fundamentals of the business, Charles B. Harding, senior partner
in the. investment banking firm of Smith, Barney & Co. and a former
Chairman
of
<t>
-r
—
Board

the

and

Ex¬
change,
said
yesterday.
...

of

all

Charles B.

Harding

t"'

intends

the

grams."

\

•

strike

in 1945. ■
:■
primary purpose of a good

make avail¬
entrants into the in¬
vestment profession the accumu¬
lated experience of experts who
have spent a lifetime learning the
business. Profiting joy the experi¬
ence of specialists in the various
branches of investment banking,
the youth entering the field can
by-pass many of the investment
pitfalls confronting him," Mr. Har¬
ding said.
• - •
'
:
"Although there has been great
improvement in the last ten years,
there is still a great deal to be
done by the financial community
in training employees for the job
of handling the funds of investors.
This has been recognized by both
the Investment Banking Associa¬
tion and the Association of Stock
Exchange Firms and both groups
have
been
and are active
in
developing new and better, educa¬
tional programs. However, no pro¬
gram will be completely success¬
ful -until
more
of the member
firms recognize their responsibili¬
ties in this field and set up active
long-range training facilities."
Each
Smith,
Barney training
class is restricted to five members
because, Mr. Harding said, "''it is
not possible to give the careful
attention necessary to the training
of a larger number." The program
includes both academic work and
practical on-the-job training, with
each trainee taking, at the ex¬
pense of the firm, specified courses
training course is to
able to young

.

,

institutions

as

It would seen that

a

tration

spreading its energies
thinly. In fact, it seems
incredible to many that the union
think of provoking or

renewing its fight with

these other

firms when it can not be at
sure
it has the majority of

employees of these firms

all
the

with it

it/han't been able to
make much' headway with just
a single firm, A. M. Kidder & Co.
when

and

union, however, says

The

it will

its strength on the

picket

prove

line.

David

President of the

Keefe,

union, is baek^on the scene again
the convention of

after attending

Office Em¬
ployees'- International Union, at
Chicago, last week. He claims that
the AFL
generally, particularly

the

parent- body; the

Wiliiam Green, its

place.,

tually take
At

-

■

Mr. Green
the refusal of the
York Stock Exchange em¬
the

convention,

said "I consider
New

ployers group to accept the arbi¬
tration offer of the union as justi¬

into
introductory,
weeks;

weeks,

fication for a

President

of

strike.'' Emil Schram,
the NYSE immedi-

The

facts.

accomplishing its

'

.

.

-

.

.

'

•

■

established

law.

in the

investment firms, all or part, by
We have over $500,000, capital and are pri¬

.interested in taking over

merger

or

purchase.

private Investors. We have

a retail organization catering to
originated, underwritings and participate

marily

municipal.

We can make an

in many others, including
attractive offer for assets and good

,,will,.-Freed from bookkeeping and other expensive office work,
principals of smaller firms can increase their production and earnings substantially.
This is an opportunity to have someone take
over your back office work and expense, and allow you to devote

"

all your

energies to production.

Inquiries will be
Box

G

320

25

Place,




„

held in strict confidence

Commercial

Park

But

&

cents

Financial Chronicle
N. Y.

New York 8,

per

full-year

hourly

average

rate of 134.7 cents received dur¬

ing

1946.

worked

The

an

earners

wage

of 40.4 hours

average

week during January, com¬

per

35.7 hours weekly
December 1946.
Total employment in the in¬
with

it is

during

that compulsory
arbitration of all disputes would
ultimately substitute arbitration

dustry during January was the

for collective

ing that month totaled 601,200,
of
which
512,600 were wage

our

judgement

bargaining."

highest level since 1943. Aver¬

number of employees dur¬

age

earners

Sets New

and 88,600 were

salaried

workers.

January Steel Payroll
Reflecting the high rate of steel

NOTICES

DIVIDEND

High Record

activity,

the

January payroll

JOHN MORRELL & CO.
DIVIDEND NO. 71

of

lied to Mr.

Schram's telegram,

r

Wall Street
may come just when Congress is
debating with some heat the merits
of industry-wide labor agreements
of any kind. It is known the union
would like to have all contracts
with Wall Street Exchanges and
brokerage houses end at the same
time since then it could make full
use of such powers at it may have
anywhere on the "Street" to force
employer compliance to its terms.
If the union is successful in the
A. M. Kidder & Co. case—and to
be successful it must obviously
overcome the full resistance of all
elements of the industry which it
bargaining

in

SITUATIONS

the

of

stockholders

the

to

Cents

record

as

PACIFIC GAS AND ELECTRIC
DIVIDEND NOTICE

Dividend "I^o. 125

Common Stock

divicjcnd declared by the Board
of Directors on March 12, 1947, for the

A cash

of the year 1947, equal to
paid upon

first quarter
;

2% of its par value, will be
the Common Capital Stock of

this Com-

by check on' April 15, 1947, to
of record at the dose of
business on March 28, 1947. The trans¬
fer Books will not be closed.

;

pany

shareholders

'

E.

San Francisco,

J. Beckett, Treasurer

California

on

books at
the
business March 19, 1947,

corporation's

MARSHALL G. NORRIS,

Secretary
March

1947

14,

Call for
PHILIP MORRIS*

New York, IT. Y.

CASH

183rd CONSECUTIVE

March 19, 1947

DIVIDEND

($0.15) a
been declared upon the
BURROUGHS ADDING

A dividend of fifteen cents
share

has

stock

of

MACHINE COMPANY,

10, 1947, to

payable June

shareholders of record at
May 2, 1947.

the close of business

Geo. W. Evans,

Detroit, Michigan

Philip Morris & Co. Ltd.,inc.
The

regular

WANTED

quarterly dividend of 90tf per share
the
Cumulative Preferred Stock,
Series have been declared pay¬
able May 1, 1947 to holders of Pre¬
ferred Stock of the respective series of
record at the close of business on April

lar
on

3.60%

15. 1947.
There

also

has

declared

been

Stock

of

1947 to holders of Com¬
record at the close or

1947.
resolution adopted at
held on July
10, 1945, no Certificate representing a
share or shares of Common Stock of
the par value of $10 each is recognized,
for any purpose, until surrendered, and
a
Certificate or Certificates for new
Common Stock of the par value of $5
each shall have been Issued 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

Universal Pictures

Pursuant to

a

the Stockholders' Meeting

Currently Employed.

Commercial

Chronicle,
Place, New York

DIVIDEND
The Board of Directors has declared
a

quarterly dividend of 50c

on

1947

to

April

payable

Company,

share
stock of

per

the outstanding common

the

for each share of Common
par

April 15, 1947.

on

shares
value,
Stock of the

$5 per share, on the basis of two
of new Common Stock $5 par

30,

stockholders of record at the

close of business

THE CHASE

Trader Available

The Chase

"Situations" includ¬

ing Real Estate Bonds,
seeks new connection. 10

value of $10.
L. G. HANSON,

a

NATIONAL BANK OF
National Bank of the

dividend of 40*1 per

stock of the
the close of

Park

Chronicle,

Place,

New

payment

City of New York

Treasurer.

Bank, payable May 1,

YORK

has declared

shares of the capital

1947 to holders of

record at

1947.

books will not be

closed in connection

with the

of this dividend.
THE CHASE

25

York

THE CITY OF NEW

share on the 7,400,000

business April 8,

The transfer

experience. -Box
325,
Commercial &

years'
M

the

business on March 31,

Company, Inc.

Financial

of

dividend

quarterly

$1.00 per share on the Cumulative Pre¬
ferred Stock, 4% Series, and the regu¬

Secretary

March 19, 1947

Underwrit¬
ing,
Research, Buying,
Writing.
Seeks postion
with aggressive organiza¬

With

CO.

'

Experienced

E 327,
Financial

12,

shown on the books of the
/
\ r
George A. Morrell, Vice Pres. & Treas.
Ottumwa, Iowa.
'
1947,

Company.

quarterly dividend of 37J/fe* per share
and an extra dividend of 25r per share
on the Common Stock, ($5 Par), pay¬

Security Analyst

&

April

record

of

stockholders

able April 15,

Box

ThirtyOne-half

($0.37 Va )
per
on
the
capital

stock of John Morrell
paid April 30, 1947,

be

will

Co.,

to

mon

tion.

•

share
_

&

of

and

seven

and after April 1, 1947,

on

close of

for' industry¬

The showrT'down
wide

payable

dividend

A

^

■■■-

We .are
*

the

worked

by collective bargainig
this
principle
should
be

INVESTMENT DEALERS
i;t ."

em¬

then

York Stock

New

8, N. Y.
■,/•

where

cases

pared

against A. M. Kidder & Co; very,
well. Mr. Green has not yet rep¬

25 Park

M-i

*n\-M.h'i

all

purposes

a

National Presi¬

dent, will give the union all kinds
of support in; the event the strike
that looms on the horizon does ac¬

divided

majpr course of 30

in taking on

the union is

Columbia

parts:, (a) an
orientation course of 20

in

137.4

was

record, compared with

a

Exchange is not involved in any wage earners and salaried workers
way in any dispute with its em¬ in the iron and steel
industry es¬

out rather

should even

ly earnings of the industry's
hourly, I piecework and tonnage

...

the

disputes along with
the A. M, Kidder & Co. argument,

pensation based on age, education,
experience (military or civilian),
and dependency status.
three

said, in part, "If it is
desirable thing to compel arbi¬

unsuccessful in

v;

$137,216,500.
During January, average hour¬

workers

wire to Mr. Green,
pointing out that obviously "you
have been misinformed as to

other

these

University, New York University
and N. Y. Institute of Finance.
Trainees receive adequate com¬

is

Ex¬

departments for pe¬ ployees have elected a union to
from three to six represent them and the union is
.

ately sent

Curb

against

gle

the educa¬
re-established, by

program

the

use

York

industry, the total payroll

steel
was

hour,

i" "w&n*

to

New

ployees over arbitration or any¬
tablished a record at $155,778,000,
Bache & Co. of six thing, else. The officials of the
union asked me to intercede in a which exceeded even the wartime
years ago ahd* SSiy it will seek the
contract with this firm that the disagreement between the union monthly high mark of $154,976,700
and a member fi^m involving the
employees have wanted all this
paid in March 1945, according to
time.
The .union intends also- to salaries of the employees of that
firm. Contracts over the last four
DIVIDEND NOTICES
get Harris, Upham & Co., against
which it has filed charges of un¬ years between the Exchange and
the union were arrived at through
fair labor practice after losing a
Dividend Notice
State Labor Board election last tall the bargaining process. I believe
in this process but it is not the
among its employees, to sign on
the dotted line.
The union says function of the Exchange to inject
likewise it intends to get White, itself into a negotation being con¬
Weld & CO. to reinstate the nine ducted between the union and an¬
other employer.
More than six
employees, all members of the
hundred firmis, many of them do¬
union, whom it dismissed the day
before the union was going to ask ing business through their offices
in all parts of the United States,
the State Labor Board for an elec¬
The board of directors of The
Arundel Corporation has this day
tion to determine collective bar¬ hold membership in the New York
declared 25 cents per share as the
Stock Exchange." Mr. Keefe, how¬
gaining agent fbr the employees
regular quarterly dividend on the
of that firm and' obtain a contract ever, says that Mr. Green under¬
no
par
value stock of the cor¬
stands the issues of the struggle
poration issued and outstanding,
with that firm besides.
\

,

continued,
& Co., on July 1,
its latest employee

connection, he

program

■

now

arguments exist The union thinks
it has inherited the old AFL strug¬

the firm

a

'

the

on

coal strike affected the iron and

of the Curb,

In the final course—the appren¬

it at all, to

use

Smith, Barney
will inaugurate
training class under

(b)

ranging

weeks.

weapon,

for the in¬
telligent management of invest¬
ment funds are
being avoided
through specialized training pro¬

or

riods

if, in its opinion, it must
settle at one fell
swoop, all its arguments with the
brokerage industry wherever such

—

experience necessary

The

the principal

AFL labor

an

and Steel In¬

Iron

stitute, which further announced:
In December 1946, when the

change, F.'A. Truslow, President

(Continued from page 1650)

trial and error

such

the

Mediating, So Far Without
Success, in UFE-A. M. Kidder Dispute

method of ac¬

at

course

N. Y. Mediation Board

mistakes

"The

major

with

an

possible in the

tional

are

ticeship period—each trainee con¬
experience upon which to centrates solely on the one depart¬
determine the eventual field of ment best suited to his talents.

the com¬
plexity of the
investment
business,
Mr.
Harding
said
that "the seri¬

In this

weeks

partments of the firm, working in

phases of the business; and to

with

ing

quiring

two

the American

the "Street."
In a statement on the cancella¬
tion by the union of its contract

dispute anywhere

practical side of the main de¬

and

provide the trainee and the firm

Emphasiz¬

ous

the

During

a
period of apprentice¬
24 weeks. Trainees are
rotated through all departments
of the firm, to Acquaint them with

Stock

to

time there is

every

trainee learns more of the details

(c)

ship

of

One

industry is faced with the

alternative of facing the possibil¬
ity of a strike at the Exchange

spent in each of 11 departments.

.

Governors
of
the New York

intro¬

all

general idea of the various func¬
tions of the investment banking
business.

is provoking to action—the brok¬
erage

•

a

their obligation to train

nizing

course

trainee to

the

the in¬
•

depart¬
ments of the firm and gives him

in

time

orientation

The

duces

investing public is being served better today than at any

The

for which

dividual is best suited.

Previously

1699

FINANCIAL CHRONICLE
&

NATIONAL BANK

OF NEW YORK
W.H.Moorbead ' •

OF THE CITY

v

"-•'v.

Vice President

8, N. Y.

and Cashier c

—

1
J

i

im

!f hy

'!\w

Iff

Pending N. Y. State
-

dealing in any stock/bond or security listed on the
Exchange." ;
:
It provides generous patronage for the Governor by set¬
ting up a securities control department of five (5) members

selling

mm

or

New York Stock

!{{.»
'!■ f1

4

.

■Mi; U.

all of whom shall be citizens and

m

residents of the State of

appointed by the Governor.

New York, and

[Pi

m-

,

:

able such sentiment and must further be
eral contention that the national

m

regulations for the supervision and regulation of persons
buying, selling or otherwise dealing in stocks, bonds or

I?

securities.;

th ^

tw
:fr

§

believe

we

be

to

reaction

a

sentiment;•;';■

; 4'-tyv":„

by its agents or employees inspections of
premises where stocks, bonds or securities are bought,

any
sold

As

we

;;

'm
i' U

,

TO

Mi-;

■

of the, gen¬

:<P*

W-

-

"kick

the

to

the

out

SEC"

;V:";

Domestic &

the latter approved on review, both the SEC and the NASD
prescribe forms of applications for licenses under formed, one of the links in the chain of their combined
'
the law and of all periodic reports which they deem neces¬ demise.
;•./ ..I.
r.'.-;sary to be made by any licensee.
This un-American doctrine, completely out of step with
j "To examine or cause to be examined under oath any our times, this attempt to dictate prices, was and is a badge
licensee and examine or cause to be examined the books and
of shame which has been and will be worn by the SEC and
records of any such licensee; to Tiear testimony and take
.the NASD during the term of their existence.«
proof material for its information; to administer oaths; and.
With these regulatory bodies in effect promising re¬
for any such purpose to issue a subpoena or subpoenas to
straints and k return to our constitutional form of governrequire the attendance of witnesses and the production of
merit,;Assemblyman Clancy introduces this.disgraceful bill
books which shall be effective in any part of the State."
..TO
which for New York State policy represents a complete
!
.License fees are fixed at the sum of $500 per year.
\"
V
I
' A.
From the features of the proposed bill already quoted,- :turn-about.
If : It is not without significance that this bill should be
it. will be seen that it is the intention behind this legislation
lor the State of New York to go into the field of securities pending in the Legislature at a time when the Attorney Gen¬
eral of the State of New York is
conducting an inquisition
regulation on a portentous scale J
yv
among upstate over-the-counter security dealers through
In;dealing with the subject of revocation of licenses,
the medium of a so-called "general questionnaire."
such revocation is made mandatory for various causes, one
-

-

New Issues

,

xn*
Ml*

of which reads

follows:

as

Who

-

M. S.WlEN & Co.
4

W':
-Vi
V.

V

-

"Misrepresentation, either

■
■

?•

|TO
•f 1 v*

i&M

fTO;

w

1919

Exchange PI,, N. Y,. 5

-

HA. 2-8780

Teletype N. Y. 1-1397

.....

.

Excellent

Long-term Outlook |

;

RALSTON STEEL CAR CO.
(freight

Assemblyman Clancy's collaborators? Whence
"inspiration" that induced him to introduce:a

manufacturers)

car

Up-to-date circular

now

available

as

LERNER & CO.

*

:

TO-.
Mr

.

ESTABLISHED

Members'N. Y. Security Dealers Ass'n
40

are

the

comes

i;

^

.

to the financial worth, skeleton bill in haste and then to come
up with an amend¬
I
merits, value or price of any stock, bond or other ment of
patronage, ill-considered regulation and fettering
security."
YTOTO
"
power?
When it is recalled how frequently over-zealous prose¬
His Assemblyman Clancy the sole
sponsor of the legisla¬
cutors produce from disconsolate purchasers alleged misrep¬ tion or, if he is
not, who are the others?
resentations which were never made in fact, the danger in
It seems so incredible to us that at times such as
these,
all of this can be readily appreciated.
when the cry of the securities field is
against further regula¬
The Act provides that proceedings to review any action tion, when the
promise is a return to our constitutional form
of government and our American
by the Board shall be brought in the Third Department.
way of life, anyone using
y

..

.

.

h)&-

Foreign

Securities

dealt in.

or

.

y

Rails;

■:''W;;v;;■'■ V'.

philosophy of spreads which in substance

a

„

4)'

1647*

Old Reorganization

.

7'M

detailed index of

contents see
page

Republican legislative vic¬

it, when the NASD as the hand maiden of

see

the SEC evolved

•-

-

For

"To

r

•

aware

INDEX

Recent expressions by members of the SEC that they
striving for simplification and the easing of regulation,

are

HTo carry on

■

-

f

'(• t4;'('•

,

.,._^„

.

tory is largely considered a mandate for reversion to govern¬
by law rather than the continuance of government
by men.;,
v

revoke licenses, this Board is

I

.

y ment

•

being invested with the power to grant and
authorized: "To adapt rules and

Besides

There is considerable sentiment for the abolition of the
Exchange Commission..
/
;
j
The emergency Which was:used as a basis for its birth
has ceased to exist and many urge that the termination of
the evil required a termination of the remedy.
v
:
The SEC itself must realize the prevalence of consider¬
Securities and

(Continued from page 1647)

Sir

•

Thursday, March 27, 1947

j

m

:

CHRONICLE

THE COMMERCIAL & FINANCIAL

1700

Investment

10 Post Office

;

Securities

Square, Boston 9, Mass.

Telephone Hubbard 1990

Teletype Bs 69

J

v

The Third
ties

if

of

Department normally encompasses the coun¬ common sense and being even moderately grounded in the
Albany, Columbia, Greene, Rensselaer, Schoharie, history of securities transactions would sponsor a bill such

Sullivan and Ulster.

as

this.

,

.

;

The chief center of the State with
respect to
activities is, of course, New York

iff
m

What significance may

Ji-f

provision

$

W"

it

>

considerations

ff,
if;,:

the

as

«a*f-

danger that such

Wi

us

ties and

so-called

4

for

Mr
M

1')

ivl;
lk! ■•'!'
4 M

-ii'

r
h.

a

judgment

on

our

".

not

an

unmixed

;

-

;a--

FOREIGN SECURITIES

v.

'"

.

'.'•f-

«lPFrTATT^T«J

f.

50 Brood Street

capital and
rules, regulations and legislation
upon the alleged theory of equalization that1 would
modify
the essential characteristics established
by custom and usage
..

R. G.

Preferred

LERNER STORES
4

Vz %

i Kobbe■ &
4

W /f
>'

filV

Equip.

v

Benguet Cons. Mining
Consolidated Industries

Copper Canyon Mining

, ,

;

-r

55 Liberty Street,

Securities

Dealers,

Inc.

'

.ofrf&T-isM



-

New York 5, N. Y.
-

/

Cosmocolor

:

-

Tel.

New Eng.

■§

Marked

Specialists in
England Unlisted Securities

STREET, BOSTON 10

Palmetex

v

Sterilizing

j

^Susquehanna Mills

Red Bank Oil

Standard Silver & Lead
Trenton Valley Distillers

Established

Empire Steel Corp. i
*Prospectus
/

Co.
HANOVER 2-2895

TELETYPE—N. Y. 1-2866

on

Request

Hill, Thompson &0o.f4nc,

1924
-

N. Y. 4

||

Reiter Foster Oil

Morris Stein
-

22

^General Products Corp.

Recordgraph Corporation

-

1922

Teletype BS

^Seaboard Fruit Co., Inc.

Corp.

Petroleum Conversion
Pressurelube "

-

in

HANcock 8715

Matagorda Oil Royalty
Monroe Gasket

-

50 BROAD ST.,

^^77

4

Martex Realization
^ ~

Company
of

Lava Cap Gold ( 7
Linn Coach & Truck

Kellett Aircraft

INCORPORATED

>

SECURITIES
a

Established

Aircraft & Diesel

•

-

TEXTILE

30 FEDERAL

Gaspe Oil Ventures

CORP.

all

Stocks

Utility Stocks and Bonds

Securities with

New

Kinney Coastal Oil

^Mtfnbeis iKationat*
'Association

■"■W.:

General Aviation Equipment
Greater N. Y. Industries

BOUGHT—SOLD—QUOTED

•

Public

A MARKET PLACE FOR LOW PRICED UNLISTED
SECURITIES

,

Cumulative "Preferred

in

Bank

Investment Trust Issues ;

,

«

and

Industrial Issues

gill

Federal Asphalt

LeTOURNEAU, INC.

Specialize

Frederick C. Adams & Co.

Electric Steam

POWER CO.

$4.00, Cumulative

We

New York 4, N. Y.

'"

Cumulative Preferred

r

AmUATE: CARL MARKS & CO. Inc. CHICAGO

Differential Wheel

4.20%

2-791*

'

f.ARL MABIS {. ro- 1Kb,
;

Teletype »S 259

:

\

Insurance

•

:

Y. Telephone HAnover

>

blessing.

would interfere with,the free flow of venture
further threatened with

ALABAMA

Brown Co.

.

Minnesota & Ontario Paper Co.

Securi¬

The
results of such activities have left the securities
industry
hamstrung and over-regulated, saddled with an alien phi¬
losophy on "spreads," threatened with disclosure rules that
J

State St., Boston, 9, Mass.
GAP. fiN|25

Teletype—NY 1-971

.

Abitibi Power & Paper Co.

whole

the existence and activities of the
are

HAnover 2-0050

r

of the over-the-counter and Curb markets.

■iij

148
Tel.

Bonds and Shares

moment examine the reaction to the

SEC has found that these

n-

$>V;
14

ignominious decease and
those in the securities field should unite

as

bring this decease about.

the statute

Exchange Commission, legislated, into being in a
emergency and having national jurisdiction.
]

Mature
?

•■•?-

!r

law would be a bur¬
though its intentions

contrary to

Let

•

well

as

a

may be wholly intrastate, and that, therefore,
itself may have certain constitutional
objections.
We make the point that this bill is

philosophy of government, i j;

i'p

to

public

N.

den upon interstate commerce, even

If:
,K.

the

*

whole, what should be the public reaction to this
piece of prospective legislation?
44 v-4
In making our estimate we will leave out such
legal

J?'

i;

City.
I
be attached to this Appellate

It deserves and should receive

On the

TO
•iov

judge.

you may

financial

Markets and Situations

120

for Dealers

Broadway, New York 5

Tel. REctor 2-2020

-

Tele. NY

1-2660