Full text of Commercial and Financial Chronicle : March 3, 1949, Vol. 169, No. 4782

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Mar

BUS.

ABi|i

9

1949

ESTABLISHED 1S39

LIBRARY

Tk e

an

Financial

j

Chronicle

Reg. U. S. Pat. Office

Volume 169

Number 4782

New

York, N. Y., Thursday, March 3, 1949

Economic Outlook fox Construction
Asserting business and
Professor Slichter
to

says

consumers

are

more

By BENJAMIN M. ANDERSON, Ph.D.*

University

reluctant

crucial question is whether this

:i

to

and

business

advises

firms

adjust

investment

to

and reduce prices

struction

industry give better products at lower cost, and

to maintain employment.

in

sees

reducing securities trading by discouraging

market transactions.

present

Urges

on

ing

con¬

need

as

Lists

severe

margin requirements and restrictions

as

important thing about the present business situation
is the growing reluctance of consumers and business concerns to
spend
money.
Willingness to spend money has been dropping for several
years, if one measures it by the ratio of recent income to present exp e nditures <§>•
Nevertheless,

explained the business crisis of 1937 as due primarily
startling increase in wages which came in 1937 as the result of labor union activity
by the CIO. This cut deeply into business profits. The severity of the crisis, however,

led

willing
to spend faster

lent

We See It

they re¬
ceived income,
the

re¬
ex¬

March,
is

penditures in¬
from

creased

mont h. V

to

month. Today,
h

o

w

ever,

reluctance

Prof. S. H. Slichter

to

spend

has

reached

such

'

a

point that there is danger that

the total volume of

spending will

drop.
Let

look at the figures on the
incomes and

us

relation

between

spending.
The best way to show
the willingness of individuals to
spend is to compare the relation¬
ship between personal incomes
after taxes and expenditures for

*

The

definite

President

was

well

in

character

Jefferson dinner address last week.

to

in

his

Jackson-

Now, of
a

ex¬

*The

ternal

three

weak-

on,

an individual of
If he has somewhat more than average
(Continued on page 30)
of the attributes supposed to be characteristic of the mule
*An
address
by Professor bred in his State that is merely a coincidence, and on the
Slichter
before
the
Associated whole not greatly to be held
against him. All in all, one
General Contractors of America,
could scarcely expect him to rise above the level of thinking
New York City, Feb. 28, 1949.
and acting common among the politicians, great and small,
or to be
acutely aware of defects in customary logic which

(Continued

City of

market

transactions,

an average sort of man and the elimination of informed
He has the expedience, the traders, especially "insiders" of a

background.

on page

28)

corporation.

Exchange
cised

The

Securities

Commission

for

its

failure to

was

and

criti¬

carry

out

the purpose of

Congress, by giving
the exemptions contemplated by
Congress,
which
would
permit
"insider" trading when this was
for the benefit of the corporation
and the public.
We proposed a
1 The

icle

article

is

second

the

of

the

the

nessin the

stock

adjoining

chapters dealing with

the operations
stock market under the SEC and
securities legislation which will appear in

of

The

education, the traits ordinarily found in

this

dis¬

article continues the discussion of

Mr. Truman is

course,

small town in Missouri.

would

trading by "insiders." The present

general tenor of his securities
remarks was also income respects precisely in political tra
Jftarket.
Due
dition. The Chief Executive was definitely'Harry Truman.ltd a variety of
the Harry Truman that he revealed to the whole world last governmental
policies,
the
autumn and has repeatedly re-revealed since then.
He is market had
evidently quite convinced, notwithstanding a number of very grown ex¬
Benj. M. Anderson
stubborn and inconvenient facts to the contrary, that he traordinarily
"thin." This was due to extraor¬
received a "mandate" in the November voting, and that the
dinarily high incomes taxes, and
voice of "the people" has proved him right about everything
the tax on capital gains, then part
under the sun and all those who differ with him definitely of the general income
tax, which
tended to eliminate men of wealth
and eternally wrong.
-■
from

which

1938)
be

from

rule

criminate between fair and unfair

plained pri¬
marily by in¬

That Mandate !?!
'

vio¬

collapse

security
prices
(Aug¬
ust,
1937
to

than

that

the

vand

in

As

been

sult

legislation is

paralyzing and destroying marketability of securities.

The first article of this series1

EDITORIAL

prises have

with

short selling and floor trad¬

on

Admits "Truth in Securities"

the

to

enter¬

and

further factor

ARTICLE II

I

most

consumers

Exchange Acts,

as a

of wealth and informed individuals from engaging in

men

intensifying difficulties of 1937 stock market break.

needed, but criticizes operations of SEC

of tax reform to encourage more investment.

The

securities markets of the Securities and

Dr. Anderson adds inquisitorial practices of the Securities and
Exchange Commission

be halted

can

situation

Continuing his discussion of adverse effects

spend,

prevent recession. Holds President Truman misunderstands prob¬

lem,

Copy

a

Inquisitorial Practices of SEC

By SUMNER H. SLICHTER*

Lamont University Professor, Harvard

Price 30 Cents

late

Anderson's

Dr.

financial

be

Welfare"

"Economics

and

to

Nostrand & Co,

in

appear'

forthcoming

history from

entitled

to

published

by

book
to

1946

the

Publta*-

Van

D.

The remaining article WiU.

Dr.

issue
of
the
Anderson, until his death

Jan. 19, was Connell Professor of Bank-%
at the University of California, Los
Angeles, and Consulting Economist of the
Capital Research Co., Los
Angeles.
He
was
formerly economist of the Chase Na¬

on

ing

tional

Bank.

At

Anderson

Dr.

Economists'

etary

the

time

also

was

National

of

his

President

Committee

death

of

on

the

Mon¬

Policy.—Editor.

governmental policies contribut¬
ing to the "thinness" of the mar¬
ket.

''tifty-'-i V?-':".-f'-YXi

Inquisitorial Practices of SEC
A

further

important factor

ducing trading by
and

men

by informed men,

re¬

of wealth

was

the fre¬

quent inquisitorial visits of agents

(Continued

page 28)

on

Commercial and Financial Chron¬

Feb.

Page

24,

1.

State and

Philadelphia, Pa.
4% Bonds

Funds,

Prices to yield
'

1.45% -1.90%
(When,

as

and

Municipal

Franklin Custodian

Due January 1, 1955-59

if issued)

inc.

Bonds

A Mutual Fund

'

COMMON STOCK FUND
PREFERRED STOCK FUND
Bond Department

BOND FUND

White,Weld&Co.
Members New York Stock

Exchange

INCOME (BALANCED) FUND
Prospectus

40 Wall
Boston

on

HART SMITH & CO.

OF NEW YORK

request

15 BROAD

Philadelphia Providence

Amiterdam

Buenos Aires

FRANKLIN DISTRIBUTORS, Inc.
64 Wall

Street, New York S

Bond

STREET

Bell

Street, New York 5

Chicago

London

THE NATIONAL CITY BANK

UTILITIES FUND

Teletype

Private

Dept. Teletype: NY 1-708

New York

Wires

1-395

Connect

Montreal

Bankers

to

the

Government

Office:

Head

DOLLAR BONDS

Bishopsgate,

26,

Branches

Distributors of Municipal

Burma. Ceylon, Kenya
Kerlcho. Kenya, and Aden
and

Subscribed

Paid-Up
Reserve
The
•

Zanzibar

Capital

£4,000,000

Capital—J
Fund

£2,500,000

conducts
every description
banking and exchange business

Bank

Trusteeships and

Executorships

also undertaken




Circular

Corporate Securities

Established

1899

Members New

CLEVELAND
New York

Cincinnati

Chicago

Columbus

Dominion Securities

&

Prospectus available

Denver

Toledo

Buffalo

York Stock Exchange

120 Broadway, New York 5
Telephone REctor 2-7340

40

Members New

111
WOrth

Exchange Place, New York 5, N.Y.

York Stock Exchange
Principal Exchanges

Broadway, N. Y. 6

4-6000

Boston

Teletype NY 1-2708

Telephone: Enterprise 1820
Private

Bell

System Teletype NY 1-702-3

request

IRA HAUPT & CO.
and other

Grporatioti

Est. 1896

(Incorporated)

of

sutro bros. & co.

NEW YORK

COMMON

bonds & stocks
Inquiries Invited

upon

OTIS & CO.

£2,000,000

CITY OF

Light & Power Co.

and

in India,

Colony,

CANADIAN

Underwriters and

London, E. C.

THE

OF

Central Arizona

ITALIAN

in

Kenya Colony and Uganda

NATIONAL BANK

Toronto

NATIONAL BANK
of INDIA. LIMITED

THE CHASE

IIAnover 2-0980

NY

,

subsequent

a

"Chronicle."

be

1914
and

Hendricks

&

Wire

to:

Eastwood, Inc., Phila.

2

&

COMMERCIAL

THE

(958)

:

■'

.

from recent extraordinary

Analysis
BOUGHT

SOLD

—

panics, and
mind hold¬

even

touches them off.

Corporation

ing various types of assets

York 5

<$>-

to

reason

Of

and

demand

liquidity,

supplied by the

—★—

which

to

New

Curb

Exchange

Tel.

5

TRADING MARKETS IN

Com.

Standard Gas & Eiec.

Mining

Copper Canyon

except for a few

Ventures
Coastal Oil

Gaspe Oil

Vulcan Iron

AND OIL

STOCKS

STEIN & COMPANY

:

5«uritie* Daal*r»,lnc,

Members N*t'l A«« nof

$. X. '■[
Jersey City 2, N. J.
Tele.: NY 1-1055

1 Montgomery

Tel. DIgby

St.,

4-2190

(part-worn)

existing

Exports—Imports—Futures
the bank

That is the nature of

That is the nature

credit cycle.

goods, the longer can
*

ought perhaps to mention
self-stultificating nature of

current

purchases.

ing

.

customer purchases

dried

their

in

They

orders

to

up

turn, will give
the corporations

Of

Common Stock

.

Standard Oil Ky.
Bought and Sold *;

the

Machine

obvious, to any¬
one
acquainted with the nature
of the capitalist system that if con¬
sumers, through fear, or through
demand for liquidity, or in the ex¬
Now it will be

BANKERS BOND

m

Incorporated

Floor, Kentucky Home

1st

LOUISVILLE

Life Bldg.

KENTUCKY

2,

Bell Tele. LS 186

Long Distance 238-9

Trading Markets

'

pectation of lower prices, suddenly
cease buying at retail at the shops,
the retailers will cease giving or¬

orders,
it takes

Boston Railroad

Pfd.

Holding Pfd.

New

Boston Terminal Co.

3V$>s, 1947

75 Federal Street,
Private

New

Boston

York Telephone—-

WOrth

their inventories—could

initiate the debacle.

also

4-2463

as

soon

will

and will

happens,

this

start

begin to discharge them.

Their

purchasing power
shops will therefore fall.
then

will

the

paying out

their employees,

lower incomes to

ers

DAYTON HAIGNEY & CO., Inc.

planning

B.—Retailers—by

to reduce

producers

England Lime Common

for¬

than

less

sell

the
Retail¬
at

since some of their cus¬
tomers have been wiped out, as a
direct result of the retailers them¬

merly

.

.

.

fewer orders

producers!
By doing so they will have

made

things worse for themselves para¬

doxically. They will (partly) have

1856

namely

—

orders to

brought

giving

in

fewer

producers—automatically

cumulative.

on

their

depression.

own

because

Maintain

Stock

Exchange

Curb

Exchange

Cotton

Exchange

York

New

Commodity
Chicago
1

Board

New Orleans

of

*

tract.

Re-Bound

No

...

Until Thru

is

that

Wringer

the

new
t

vicious
of

whole

circles

tively

so

almost

Then

likely

though

market

it were

American

CHICAGO

j

york 4, n.

with

DETROIT

PITTSBURGH

GENEVA, SWITZERLAND




inflationary

and

people

to

Any

or

Markets For:

the

one

new

desire among retailers to re¬

and

inventories

might

to

unload.

prior producers
get

115

BROADWAY

Telephone BArclay 7-0100

Exchange and Other Principal Exchanges

NEW YORK 6, N. Y.
Teletype NY 1-672

and
in the

for

money

.

.

.

the
busi¬
buying less in the FEAR.

The
It

might

fast. Every¬

need

hardly

of It All

be

said that if

only one person out of

(Continued

Q

■

■

Bb

OVER-THE-COUNTER
INDUSTRIAL STOCK INDEX
10-Year Performance

of

•

35 Industrial Stocks

less, in

buying

falling prices, and

Leverage

N

scared;

very

market

bull

consumers

Goodbody & Co.
Members N. Y. Stock

bonds

Truman's

all of these eventualities,
how trivial or appar¬

Orders with

BRITISH SECURITIES

savings

s.

matter

therefore be cancelled

OILS

u.

money

due

HOPE of

y.

Yakima, Wn.

buy

perhaps alternatively
sudden war with Russia, the
or

bombs, etc., or to
and then only is confidence election promises.

revive,

Spokane

Branches at

Idaho and

rather

been

fear of

-

to

Underwriters

-

support the bond

ment's ceasing to

impossible for things to get any to
worse.

Dealers

Peyton Building,

Kellogg,

or

economy

as

-

all these vari¬

cumula¬
far down, until at last it
the

Exchange

of Spokane

Brokers

last few years—

everybody might thus join

.

at

corporation

is
some
sudden
expectation of
downward generally lower prices in Amer¬
spirals is to force practically the ica,- due perhaps to the govern¬

The net result of

ous

CANADIAN

Exchange Bldg.

11:30

future—and

have

for the

ness men

y. Cotton

I

why

cautious

And other Exchanges

I n.

to

Sp-82

*

What I fear for the

Trade

Cotton Exchange

10:45

Time:

Members Standard Stock

about

strict law

any

INDUSTRIALS

Inc.

Exchange,

from

Std.

Pac.

SlWlUltll securities

it rather depends on
suffer, and the more frightened do public psychology in each. cycle,
they too become, and the faster do
^
they too act similarly, and con¬ tion.

CANADIAN MINING

CANADIAN

Exchange

all the others

sequence:

duce
York

of Orders

Quotes call TWX Sp-43 on Floor

other hours.

ently serious, might touch off a
cessation of buying at retail and
We

Immediate Execution

A.M.,

I do not think you can

the lay down

it, the faster others

Members

York

of

Jcir,,,.

fluctuate more than

slump last.

cumulative

is

It

faster some do

H. Hentz & Co.
New

or

And they usually

tion industries.

no

New

SECURITIES
For

off the supply of money

cuts

looks

selves having given
to

Established

NORTHWEST MINING

Spiral

£

action

and

producers.

As

Boston Edison

.

ployed, they probably cease giv¬
ing orders to the industries which
The tragedy of it all is that al¬
supply them with tools and more
though the general wish was pru.
.
Th
...
.
.
.
dently to reduce inventories, the L/cj11TY1Tv, occur in th. construc¬
ous slumps
the
The Vicious

Louis Stock Exchange

St.

Members

in¬ (except a few super-luxuries).
comes with which
future inven¬
These constructional industries
ders to wholesalers and the whole¬ tories might be reduced. It is thus
"might," I agree, slump first. But
salers will cease giving orders to quite tragically self-stultifying, it is also possible for them to
N.

Boston & Maine Prior

St. Louis l.Mo«

owing to the exist¬

course,

of numerous forward

from whom they obtain materials.
in numerous industries,
gathered that after a long re¬ They too will employ fewer men.
some time for some
industries to
placement demand boom, such as
Thus a change in general inven^ slump.
Indeed their slumps may
we have recently seen, the econ¬
tory policy leads to a reduction not occ.ur until' old orders are
omy becomes more ripe for a panic
in the national income
.
which worked off.
than at other times!
in its turn reduces the spending
But if existing plant in one in¬
in the subsequent period.
How Fear Can Suddenly Freeze
dustry
becomes not fully em¬

Bought and Sold

STREET

OLIVE

509

*

*

be

Co.

SECURITIES

INVESTMENT

much faster than at any

1932 slump.

ence

remarks it will

Stix & Co.

(probably) during the 1929-

time

orders to prior producers.

new

fewer

:

inventory without giv¬

out of his

It also is the nature

tion.

dustrial panics.

I

meet

4-2727

inventory fluctua¬

of

nature

the

household
be the period

of abstinence from new

From the above

Ashland Oil & Refining

DIgby

cyclical bad trade. That is the
nature of "cumulation."
That is
of

Curiously Self-Stymied

Recovery

ixs

of

condition

the

better

the

WiUlant St., N. IT. €. 6,

27

One can

transportation.

fuel and

Works

on end
things like food,

sugar
Raw—Refined—Liquid

of in¬
the
The, oply d iffere nee between a
.the
easily do without clothes, caviar, adoption of a general inventory panic and a slump is that a panic
furniture, golf balls, entertain¬ reduction policy, on the part of is\faster, and more furious ... a
ment, luggage, new washing ma¬ the nation's retailers, wholesalers matter merely of degree.
chines, etc;, for several months on and manufacturers as a whole.
The last three months of 1937
end.
•
were a perfect example of a mild
If any one of these groups thinks
industrial
And the richer the country, ami
panic, where buying
his inventory is too large, he will
tion

N. Y.

NEW YORK 5,

production will have been

as

STREET

WALL

99

espe¬

while.

(in Amer¬ geometric proportions.

several months

for

.

.

.

greatly reduced during such a
slump and actual scarcity will be
Indeed the more that some pro¬
developing "of commodities in ref¬
ducers cease producing, the more lation to money" „ . . even though
Will other retailers suffer, knd the bank money itself may (will) have
fewer will be the orders which been
seriously
deflated
mean¬

their consump¬

ica) to cut off all

Goldfield Deep Mines

Kinney

nearly all consumers

!:or

corner

LAMB0RN & CO., Inc.

'

Panics are therefore
likely to be fiercer in rich coun¬
tries, than in poor countries. Amer¬ they give to yet other producers.
ica is more prone to disastrous in¬
The disease of bad trade thus
dustrial panics than China.
tends to grow CUMULATIVELY
Indeed it is perfectly possible
AND PROGRESSIVELY, in rapid

2-7815

REctor

•

stop.

can

NEW YORK

BROADWAY,

120

•

-

cially

all paternal

despite

true,

prove

the

around

be

in part

the factor will

pay,

cushions.

obviously greater than the extent
to which a relatively (poor country

Exchange

York

Major L. L. B. Angas

itsbuy¬
ing at retail is

stop

Members

York Stock

doles are

ment

mal

will, as a rule, get the
gradually spreading, that
things cannot get any worse, and
that improvement will eventually
feeling

I have

But if unemploy¬
smaller than nor¬

just mentioned.

a

suddenly

can

branch offices

Then you

;■

cumulative

which

factor

contractive

country

rich

frfc PONNELL & CO.

Mobile, Ala.
wires to our

Direct

losses.

government, then

need not get this

you

extent

The

La.-Birmingham, Ala.

New Orleans.

gram,

order.

that

in

NY 1-1557

HAnovar 2-0700

unemployment benefit pro¬
til most industries, are selling far
which will immediately re¬ below costs, and until most cor¬
place any incomes which produc¬
porations are making serious
ers cease to pay out, with income

for

SCRIP

St.y New York 4, N. Y.

25 Broad

will not usually mature un¬

ever,

lavish

of fear,
expectation of
lower prices,

ding

New

with a

nign government in power

mixed pud¬

a

there is some be¬

if

course

Col

York

Members New

preferring to invest in com¬
modities rather than in money.
This condition of mind, how¬

start

Repercussion

Cumulative

.'

re¬

gard panics as

Bought—Sold—Quoted

And yet it seems more satisfy- Steiner, Rouse &
Stock Exchange

throughout a period of grave fear.

one's

to

ing

Teletype NY 1 -583

BArclay 7-5660

Louisiana Securities

because of ' *
begin soon

Fundamentally it is, I suppose, the fea •' of lower prices which actuates
For if there were not .this f ar .of lower prices nobody would

New York Hanseatic
120 Broadway, New

all the more vulnerable to recession

possibility of government's paternalistic cushions sup¬

boom levels. Emphasizes

production. Expects fall in profits- to outrun volume recession
points. Nevertheless Major Angas expects major stock market revival to
—perhaps two years before trade and profits reach bottom.

high break

QUOTED

—

Alabama &

•

porting income resulting from

request

on

America's comparative wealth makes us

Market analyst maintains

Utility 5Vzl52

ANGAS

By MAJOR L. L. B.

.

Thursday, March 3,'1949

jp-jcks

Bear(on Business—Bull on
Central Public

->/

FINANCIAL CHRONICLE

:

three stops

on page

32)

BOOKLET

ON

REQUEST
«

National Quotation Bureau
Incorporated
4 6 Front Street

New York 4, N. Y.

Volume

169

Number 4782

THE

COMMERCIAL

&

FINANCIAL

CHRONICLE
(959)

INDEX
Articles and News

Inquisitorial Practices of

the

{ The Trouble Seeker'

Page

SEC—Benjamin M. Andersqn

B. S.

j NASD contemplates committee for study of
public reaction to overj the-counter vis-a-vis the listed market. Its position
incongruous in
i view of variegated
membership. No need for this study by NASD;
j The dilemma of the NASD. The damage of its
price control policy.

Cover

mm

-

Economic Outlook
Hear

for

Construction—Sumner H. Stickler

Business—Bull

on

Stocks—Major L. L. B. Angus.

on

The Market for Securities

Cover

2

.'

Today—Alfred C.Neal

4

Commodity Market Problems—Rep. Harold D. Cooley..
The Retail

Pricing Situation

Newspapers and Economic Illiteracy—James P. Selvage.....
Price Outlook Portends

Depression—Eivan Clague.

no

7

17

;

Where and What Is Liberalism?—Donald R.
Richberg

This new proposed
investigation emanated from
olution of the Board of Governors, offered

19

-.

"Paper Is Paper and Gold Is Go\<l"—^Neil O'Donnell.
(Editorial)..'.."/i

•

r

.

.

;

Financial

9

'

10

14::*

Spahr Answers Pleas for Gold Standard
Pelay,.20;
Harry Sears Objects
Sumner H. Slichter

NAPA
'

Off

SEC

President Truman.............

.

.

Hold

to

Hearing

Reid

"We Shall

Arnold

Defends

Hope

.

Bernhard

Offers

Tux

Retard

to

American Capitalism
Emit Schram Reveals

/

'

World Bank Grants Loan

of

Regular Features
.Cover

Bank and Insurance Stocks....

20

Dealer-Broker—Investment

Recommendations.......

15'

of the News—Carlisle
Bargeron

6
-37

the

.

18

Prominent Personalities in Mutual Fund

Business—George Putnam

18

..

Our Reporter

<

steps

to

the

promote

Public Utility

42

Securities,

12

Railroad Securities
27
.

22

Securities Now in Registration
The State of Trade and

Industry

34

;..

'

.

Published

Twice

Weekly

COMMERCIAL

FINANCIAL

/

and

Patent

DANA

York,
8,

COMPANY, Publishers

to

DANA

SEIBERT,

RIGGS,

Thursday
Issue)

plete statistical

records,

+

Other

Chicago
1

c/o

issue

every
—

1949 '
and

Monday

market

ad<

3.

HI.

(Telephone:

Gardens,

Edwards

&

London,

$25.00

Quotation

Salle

8tate

E.

Smith.

r




06J3I:

.

and
per

Monthly

St.,

C./ Eng•

the

office

post

under

the

in

Act

United

Union
.

at.

of

per

Note-^-On
the

primary

wholly un-American doctrine is

causes

of

the

manifold adverse

And for this the NASD is

.

LONG

as

far back
then

AND STEADY

EARNINGS

&

year

old

managed

companies.

RECORD

DIVIDENDS

on

Request

40 Exchange Place, New York 5

elements

WHitehall 4-8957

industry.

Tele. NY

1-1404

wholly responsible.

the "5%

on

Carlisle Corp.

Commonwealth Gas
Delaware Pr. & Lt.
Seminole Oil & Gas

'philosophy'

*

Southwestern Pub. Serv.
7./

*Prospectus

on

request

industry."

1944, the Association, of which Mr.
official, considered the 5% mark-up

yardstick a hazard to the "continued existence of the
overthe-counter industry," how much
greater has this hazard

New

and

George Birkins Company

one

as

an

73

a

insurance

Data

capacity as Secretary of the New York Se¬
curity Dealers Association, was appended to a resolution
adopted on January 26, 1944, by the Governors of that As¬
sociation which, in addition to
condemning the failure of the

was

of

A SOUND INVESTMENT

his name, in his

of the over-the-counter

stock

controlled

by: : several

Now Mr. Carret should be
very conscious of the feeling
of the over-the-counter
dealers with respect to this rule for

If,

(Continued

on

GIMBERNAT & SELLWOOD
Members

111

New

York

Broadway

Stock

Exchange

New York 6, N. Y.

Tel. REctor 2-0678

Tele. NY 1-2805

36)

page

March

and

U.

Quotation

of

per
*

year:-

per

in

g

of'.the fluctuations in

York

funds.

Corporation
of

-j.

Toledo,

The
a

*i'■

**■'

-

,■

Trask & Co.
j

.

^Members New Y6rk Stock
Exchange

.'

25 Broad Street, New
Yprk 4
V//: \ i/*v Tel.: HAnover 2-4300 "'

■'

'

Albany

;

Rps,ton

Glfe'ns

■

y

'

'■ ■

'

1

<

Curb

135 S. La Salle St.,
-

'

\

Falls

1-5
-

••

C.."

r.-

•

Exchange

Chicago 3

Schenectady/,.,.*

-

acquired

Connecticut corporation located

Hartford, Connecticut.

WM. I. MERICKA & CO.
Incorporated
150

Broadway

Member

^

has

Circular upon request

Tel.: Financial 6-2330

Teletype—NY
.

'

Members New York

Ohio,

Billings & Spencer Co.

in

encer

extra.)

(Foreign postage extra.)-

Bingham-Herbrand

11

PREFERRED STOCKS

Records-Monthly,
Monthly,

New

The

High Grade Public Utility and Industrial

in

fate of exchange, remlttances ipr fer-r
made

interested in offerings, of

//<;•'

(Foreign postage
Earnings Record fCs

account

are

year;-

year/"/'

year.

year.

We

S.

Members

$38.00
per

.■//"/

.

eign subscriptions and
advertisements must
be

capital

company,

over-the-counter

which presently plague the entire
over-the-counter

44

Febru¬

States,

$35.00

Canada,-

Countries, $42.00

Bank

$25.00

8/ La

/

INSOMNIA-PROOF!
T,he

us because in
stipulating the
Committee might explore, no mention is
made of the 5%
spread yardstick which has wreaked havoc
on both the
industry and the investor. The stark truth

ence

//;'/'"/. .!*/

■y■*'.Other Publications

(com¬

news'f'bank clearings,

Offices: v135

at

Territories

Dominion: of

Manager

news

Exchange Place, New York 5
Telephone WHitehall 4-2250

the

Dana

second-class matter

Y.,

Pan-American

President

city news, etc.);" 't

Drapers'

and,

3,

(general

and

corporation

Etate and

1942,

N.

Possessions,

Other

March

as

Subscriptions

Business

B.

Subscription Rates

9576

HERBERT D. SEIBERT, Editor & Publisher

Every

40

1879.

Place, New York 8, N. Y.
2-9570

by William

Company
Reentered

Office

1949

'

ary; 25,

Vertising

Young & Gersten

Thjs observation intrigues

Carret

Copyright

CHRONICLE

S.

Thursday,

the

which, in practice, constitutes a rule," described the limita¬
tion on
mark-ups as a matter "vital to the continued exist¬

5

/

Washington and You................

D.

of

NASD to permit its members to vote

40

Tomorrow's Markets (Walter
Whyte Says)

WILLIAM

Net Markets

OF

the matter is that this

31

Securities Salesman's Corner.

WILLIAM

interests

dealers."

42

Governments

on

Prospective Security Offerings...

REctor

RAILWAYS, Rights, W. I.

larger

of the

5

Our Reporter's Report

Park

UNITED LIGHT &

might also explore with representatives

16

Bankers..

Observations—A. Wilfred May

-

UTILITIES 5V2'S

Exchange and Curb the possibility of a co¬
operative effort to promote the ownership of securities rather
than the narrower
campaign to aggrandize one segment of

12

25

CENTRAL PUBLIC

:

of

NSTA Notes
News About Banks and

WILLIAM B.

-

,

Stock

factors that

Mutual Funds

U.

•

currently a very thin and scrawny pie."
It will be noted that the
resolution called attention to
the existence "of a
duty of the NASD to take all practicable

8

Indications of Business Activity

Reg.

-

.

slice nf what is

9

Einzig—"Britain's Overseas Investments"....;...

The

-

business at the expense of another. If we
can
enlarge
pie to be divided among broker-dealers, it would seem a
good deal better than to fight among ourselves for a

16

Securities

Washington Ahead

•

.

the

Coming Events in the Investment Field....

From

DIgby 4-2370

our

14

Business Man's Bookshelf
Canadian

G-

Teletype NY 1-1942

strong and increasing?"

legitimate competition?"

"The committee
43

(Editorial)

Broadway, N. Y.

The release winds up with this statement:

i

.

27

Belgium

to

Bought—S.old—Quoted

SIEGEL & CO.
39

and money
to get the
answers, and would the effort be worth
to our members what it would
cost?"

26

<*.•

../

/

"Are listed markets
superior in quality, other things
being equal, to over-the-counter markets?"
(d) "
how much would it cost in effort

26

Generating Capacity Ample

MARKETS

Southern Production

com¬

(c)

of

Design of NYSE Advertising

Ernest R. Acker Sees Electric

As WTe See It

V

.

Liquidation

that the committee will be

counter securities is

25
;...25

Changes

YORK

4-6551

Petroleum Ht. & Pr.

"Do the efforts of the Stock
Exchange and Curb tc
promote listed business exceed the bounds of

24

Commodity Speculation.,...

NEW

"Is.it true that public
prejudice against over-the-

.24

." (Boxed).,...

.

ACTIVE

(b)

Cleveland Reserve Bank Doubts
Spring Upswing
William

STREET,

res¬

(a)

Revocation of Broker-Dealer License.......

pick

obsolete

;

24/:

on

WALL

posed of members primarily active as traders in
over-theor as retail distributors
thereof;

Group, Headed by Robert C. Swanton, Sees Business
Leveling

.......:

of

Remind
can

for his

'.Telephone: WHitehall

By, this same medium, we aire informed that "the, field
study" to be undertaken by the committee has not been
specifically detailed by the Board. Then.it is suggested this
field might embrace answers to the
following:

23

....

he

counter securities
,

Analyzes Taft-Hartley Act.22

"Special Interests My Fight":

99

of

Spahr's Criticism of Gold Producers].;."20..

to

The release indicates

;

Says Louis W. Munro........

cost

bonnet?
office

our

quick cash

some

•

Reporting Needs Substantial Improvement,

"Yes, the Market Public Is Always Wrong,'*
Says Grenville Gf Garceau

at

securities.

a partner in the
New York Stock
Exchange firm of Gammack & Co., calling attention to
the existence of "a
duty of
the NASD to take all
practicable steps to promote the in¬
terests of the over-the-counter
dealers."
:

3

T.

a

that

by Philip Carret^

21

Rep. Joseph W. Martin, Jr., Sees Need' for Hastening New* Business.
Ventures
Business and

up

Easter

new

him

this

'

hubby worrying about the

your

over-

committee is to be made to the NASD
Board of Governors
not later than
January, 1950.
"

13

Fair Deal—Donald V. Eraser

The Trouble Seeker

study of the

particularly the various aspects bearing
competition with the listed securities
exchanges.
A report of the
findings and recommendations of

8

Business and the Reading
Public—Edgar G. Bower find
a

WIVES
Is

upon

Financial News Coverage and the American
System—Enunett Corrigan

Railroads Need

LETTER TO ALL

release,-^Wallace H.

the-counter market,

7

..*

recent

a

as Executive Director, has
announced that the Na¬
tional Association of Securities
Dealers will soon
appoint a
committee of five members to
undertake a

6

..........

of

Fulton,

4

Q. Forrest Walker

-

/-Through the medium

:

AND COMPANY

•.

Worcester

Cleveland

New York

■:

Stock

Union Commerce

Exchange

Building

CLEVELAND

..

4

THE

(960)
■

.

,.

•

■

.

•.

•

:

■

.

.

.

1

•

.

Thursday, March 3, 1949

CHRONICLE

FINANCIAL

&

COMMERCIAL

Commodity Market Problems

The Market for Securities Today

COOLEY*

By HON. HAROLD D.

By ALFRED C. NEAL*

,

Vice-President and Director of Research, Federal Reserve Bank of

Carolina
Agriculture

Congressman from North

Boston

Chairman, House Committee on

Dr. Neal stresses im¬
vital to preservation and economic growth of nation. Sees increasing
problem in getting savings channeled into equity securities, and warns excessive public savings are go¬
ing into institutional form. Cites data showing investors' general lack of interest in buying stocks, and
ascribes it to lack of familiarity with this class of investment. Advocates investment trusts and labels as ?

Pointing out investment is dynamo that keeps private enterprise system running,

i

Congressman Cooley, asserting commodity exchanges are

*

patriotism getting American
I

*

asked to open

was

them,<^
perhaps musically and fundamentally it deI
have pends upon the use of capital, the
use of capital equipment.
So that
had to say
the standard of living which we
will
have
been
success^njoy today is the product in very
ful, but I can large degree of past investment
activity.
Further growth in our
jetend
mfel*
of living
will depend
on
most of standard
upon' our current and future inwhat I am go¬

i.nge

what

to

ng

activity.

vestment

say.

growth and progress in the private enterprise system, is that re¬
quired for new enterprises.
We
need new enterprises to bring new
ideas and new products to the
market. And it is particularly in
the field of new enterprise that
equity capital is both needed and
scarce. The large corporation with
| good earnings can, and has been

Consider the fact that the ordi-

able to> finance its own acquisi-

and tear on tools and
requires
that
very

h°n °f replacement tools or new
tools that have been developed,
But the little fellow with an idea,
who is fust getting going, is the

nary wear

equipment

expenditures be made every
for replacement, and that
has
to provide
the
funds to pay for those new tools
which replace the old that are
targe

i

Dr. Alfred

/ear

lie
business

which

in

you

engaged, because it is a busi¬
ness
which is highly essential in
are

a

capitalistic'free enterprise sys¬

tem.
We

I

cal

of money

But

just
keeping what we have, consider
also the fact that year after year
a considerable part of the tools—

capital into physi¬

equpment—proyides
which keeps a private

plant and

the dynamo

comes

ket.

using

am

"investment" to mean
tion

invest¬
the term
the transla¬

that

realize

must

ment—and

who has the hardest time

from

and I

enterprise system running.

of

enjoy now a standard of
living which is extremely high; it
We

that,

beyond

use

beyond

that

Contrast

tools here in the

sense

capital equipment that is used

by business and industry of alj

get a capital fund sufficient to buy
the new, once that, new divice is
j introduced, and if it saves enough

the situation that,

undeveloped economy like China, a country which 1; in ^cost, anybody in competition
with those using that new device
produces on the average a bare
is more or less forced to buy the
living for its people and has virnew
device himself.
He has to
tually nothing over.
you

find in

What

is

an

makes the

it that

dif¬

ference? The difference, of course,

depends in
education

part
and

upon

raise

the

somewhere.

In
many cases, he has to resort to the
capital market.
And that is the
money

resources,

hut'! way a new device, which cuts cost
out

terhnnlmw
lecnnoiogy,

and makeg possible

.

*The opening lecture, delivered

I the

into

country's
use

thig growth in

economy,

gets, put

generally,

Neal, in

a

course

sible

for

shall I embark

nor

to

attempt in any way to threaten, to embarass or

the

exchanges

of the

the

country
de¬

same

to

busi¬
ness
integrity
and high pur¬
of

gree

is

distress.

find too late
to grief and

to

<

\' \

,,

,

privileges have been abused,

If

to

as

only

tread,"

that they have come

ac-

corded

pose

persons

might have easily foreseen.
Even big speculators are not al¬
ways
righi, but too frequently
"fools rush in where angels fear

commodi¬

ty

better-informed

which

of

of unforeseen events

because

out

the.

operations

if confidences have been betrayed,

other business

illegal or

if there has been either

unethical

on

Vestment

.

groups now

integrity.

the

needs

and indus¬

of business

motives

of

and

great

business

I shall not impugn the
nor
reflect
upon
the

characters of the legitimate opera¬
tors

commodity exchanges.

on

1

practices

on

code of ethics under which it has

long and well operated.

so

Futures trading

is

an

essential

part of our commodity exchange
system.
Hedging is a legitimate
and ethical practice, but excessive

of

try for capital.
And it is that side
the business that I want par¬

desire, however, to emphasize the
fact that you are engaged in the

ticularly to talk about tonight, be¬
cause the people who provide this

performance of services which are

American

definitely impressed with a public

ford.

interest.

farmer bear the

Important

My first point, then, is that you
are in a business which is vital to

preservation and growthof
enterprise system, If

the

the private

not

do

we

channeling

in

succeed

equity capital, we
"may have very great difficulty in
maintaining our present standard
of living and in keeping new en¬
terprise coming along in our econ¬
omy, bringing in the competition
into

savings

which
for

In- !'
Salesmanship, sponsored j
Capital for New Enterprises
by Boston Investment Club and
But probably more important
Boston University, Boston, Mass., than either of those sources of inFeb. 1, 1949.
i vestment, from the standpoint of
by Dr.

or

blackjack those responsible for the operations, manipulations or
gyrations which take place on the commodity exchanges. I accord to
you
gentle<S>men
and
to
changes often come to grief and
have their little fortunes wiped
those respon¬

character

probably the highest standard j kintfs--that a considerable part of, capital—the
people
who save,
living in the world.
Our pro- those
tools becomes obsolete, looked at another way—provide
ductivity is so great that we are Somebody invents a new device the market for your securities.
not
only able to provide this which does the job better and And indirectly, they provide, of
standard of living for ourselves, ! cheaper than the old.
To get that course, the institutional market
but also to spend billions of dol- ! new device into use, despite the for securities.
Jars
each
year
helping
other! fact that the business may not
Securities Business Vitally
countries of the world to rehabili- : have earned enough on the old to
themselves.

tirade

a

it is

And

savings.

of

situation with

upon

morality,

not here to deliver a lecture on

am

business, particularly, that
provides the
link between the
savings of private individuals and

your

is

tate

I

the com¬
getting extra capital.V And that, operating in
modity exchanges, certainly some
too, is a part of this whole prob¬
our
national
of you gentlemen are familiar with
Harold
D.
Cooley
worn
out.
In many cases, these lem, and a part of your business
economy.
the pertinent facts, and I am sure
in one way or another.
Those responsible for the proper that
funds are
provided out of the
you will welcome an oppor¬
Well, the money that is needed performance of all of the func¬ tunity to correct such abuses and
earnings of the business itself. In
to buy these tools, for whatever tions of the
commodity exchanges unethical practices
many cases they have to be pro¬
and
return
may be
required, are usually gentlemen of high
vided by resort to the capital mar¬ purpose they
your organization to the business
somebody

t h e

C. Neal

fellow

on

curb speculation, and warns
to

the sub¬

expressed some ideas on it which attracted your committee. I am
of my conclusions in rather extreme form. If that causes you to chal-

then

President's proposals for greater authority
commodity exchanges must conform
accepted standards of responsibility.

gressional hearings
to

ject, but because I have
going to state some

ethically operated, upholds futures trading and hedging, but
denounces excessive and violent speculation. Promises full Con*,;

public to buy stocks and thus support private enterprise.

this discussion, not b2cause I am necessarily an expert on

properly

and

portance of securities business as

has

the

over

progress

that

farmers
have

is

an

point, which

is

a

discussion

likewise

vital interest

operations. Not only the
but likewise the con¬

of the nation have an in¬

sumers

pains and penal¬
in the wake of

ties which follow

fluctuations

wide

Wide

prices.
tions

cause

in

and

much

too

commodity

wild fluctua¬
distress.

I

realize, of course, that there is an
element of
speculation involved
in futures trading and likewise in

operate.

hedging, and I appreciate the dif¬
ficulties in determining what is

briefly

excessive

we

operations of the commodity ex¬
changes there is a well-recognized
degree of speculation, then obvi¬
ously it becomes a difficult task

I therefore speak to you
about a matter in which
have a community of interest.
markets

The

.

be

must
from

of

intrigue

this

country

suspicion,

above

free

corrupt prac¬

and

to determine the degree

markets
of
this
country must be operated in a
manner compatible with the high
code of American business ethics.

lation

The

will

which

You

excessive.

be

in

If

speculation.

tices, and free from fraud and de¬
ception.

of

the

specu¬

considered

gentlemen,

per¬

haps, know more about the com¬

modity exchanges than any other
of men in America, and I
that you appreciate fully
effects and distress¬

group

High Character of Commodity

am

Exchanges

the

harmful

ing

results of excessive specula¬
accompanying wide fluc¬

problem in getting sav¬

And that brings me to my sec¬

a

terest in the businesses which you

in¬

ties.

nation

this

producers

In

ings channeled into equity securi¬

ond

of

are,

vested and

a

in such

raised the

has

standard of living. There

creasing

made

years

of course, vi¬
tally interested in the operations
of the commodity exchanges. The
You

is
a luxury
which
agriculture cannot af¬
Neither can the American

speculation

recent

years

the commodity

sure

exchanges have been operated in
a
manner
which
has
reflected

tion and

character of the
persons
who operate such ex¬
changes. The fact, remains, how¬
ever, too little is known about the
intricate
operations which take

derstand and

credit

upon

the

prices.
You also un¬
appreciate fully the

tuations in

great complexities of the oper¬
ations
of
the
commodity
ex¬
I am
changes.
I therefore admonish
going to give you now the facts
which support that conclusion that
you to keep your own house in
I just gave you, that there is an place
on
these exchanges.
The order.
increasing problem in channeling public generally is not well-in¬
Certainly at the present time
formed and are frequently/ misled.
savings into equity securities.
you have not been handicapped
It may surprise you to
know This business of yours is very unduly by Federal regulations.
that currently the volume of sav¬ complex and is thoroughly under¬ You
have, for all intents and pur¬
ings in this country is probably stood only by specialists.
Small poses, regulated your own busi¬
larger than it has been in peace¬
ness.
You sit in judgment upon
speculators who are not familiar
time in the history of the coun¬
of

what

has

been

happening to

the savings of the country.

the

try.

Certainly that is true within

since the end
of the war; the volume of savings
that is currently becoming avail¬
able exceeds the volume that we

with

the

operations of these ex-

the last three years

(Continued

on page

*An

address

by

Congressman

Cooley before the Commodity Club
of New York, New York City, Feb.
24, 1949.

32)

qualifications and character of
who are permitted to par¬
ticipate in the performance of the

those

vital functions which are essential

to

the

proper

tain that you are in a better posi¬
tion to know what
if anything
should

Amerex

Portsmouth Steel

Holding Corp.

operation of these
I am cer¬

commodity exchanges.

sive

be done to prevent

speculation.

eral control over

exces¬

Whether Fed¬
margins becomes

Central-Ill. Pub. Serv *
Durez Plastics & Chent.
INVESTMENT

Texas Eastern Trans.*

degree upon your efforts and upon
the manner in which you perform

Ideal Cement Co.

BANKERS

Potash Co. of Amer.

Warren Bros.,

Class C

the important services which you

necessary

are

Members New York Stock Exchange

UNDERWRITERS AND

and Other Leading Exchanges

DISTRIBUTORS OF

INVESTMENT SECURITIES
BROKERS

Private Wires

OF
•

,

/

BONDS, STOCKS, COMMODITIES

Home Office:




Atlanta

•

Phone LD-159

♦Prospectus on Request

Bought

—

Sold

—

called upon by the investing

public to discharge.

Quoted

Regulating
While

Goodbody & Co.
Members N. Y. Stock

Telephone BArclay 7-0100

105 West Adams St., Chicago
Teletype NY

it

is

1-672

you

of

the

Speculation

not

admonish you, I

Exchange and Other Principal Exchanges

115 Broadway, New York

will depend in no small

fact

my

purpose

to

desire to remind

that

on

Jan.

5,

1949, in his message on the "State
of

the

Union,"

(Continued

the

President,

on page

33)

Volume

169

Number 4782

THE

COMMERCIAL

&

FINANCIAL

CHRONICLE

(961)

Brown

Observations

to

By A. WILFRED MAY
communication

a

this

to

column the prominent Dow

barometrician, Mr. Gaylord Wood, temporarily stepping
role of market

predicting

technician, cites 12 non-market factors

stock

a

alleged
nomic

"crash"

market

eco-

por¬

tents

from

un¬

employment,

e

drop

in

of

contin¬

a

ued

A. Wilfred

May

wages, a material decrease in
sumer

demand,

plant

new

a

and

in

sharp drop in
equipment, de¬

corporate

re¬

profits

and

dividends.
This
how

columnist
this

does

not

particular

know

forecaster

weighted these factors before the
recent market

struck

with

declines, but he is

the

general

currently

repeated
discernible

the

on

public's

concentration

bearish

ele¬

ments after the market has de¬
clined. Seemingly the public never

learns its

psychology lesson!

The Illogical

This

pre¬
now

again manifested by the action of
the
short
interest.
During the
month ended

Feb. 15, while stock

falling

were

short

interest

on

by

the

6%,

New

the

York

Stock

Exchange grew by 16%, ex¬
cluding the odd lots which in¬
creased by 8%. This comprised a

rise

within

the

ratio

the

month

of the

of

short

50%

in

interest

to

the average

daily trading volume.
Confirming this illogical pattern

of

intensification

after

of

bearishness

decline, which has been
historically detailed on
several
a

occasions

in

this

column,

"Bar¬

ron's" shows in its issue of Feb. 21
that during the past 15
years

a

rise in the ratio of the short inter¬
est above 1.5% of the volume of

trading, has in seven out of nine
instances been followed by a sub¬
stantial rise in share prices.
The
on

concentration

one

set

world,

is

of

factors

of

conclusion

a

in

emphasis

to

the

similarly

support

securities

practiced

in

general

our

economic
thinking.
being exemplified in
controversy over inflation-versus-deflation. as in the
citing of high personal incomes
This is
the

now

public

and

steel

shortages by Messrs.
Keyserling
and
John
D.

Leon

Clark

in

their

recent

inflation

forecasts before the Congress.

billion

$150

The misuse of the demand-and-

money

the

and

ties

an

as

between

available

explanation

market movements in

tions

was

column

a

investors'

fully

both,

detailed

fortnight

ago.

terpreted

being

stock

direc¬

in

There

various other individual
factors which

securi¬

for

external

are

in

explanation

For

of

example, the Marshall Plan

its ERP's

billions during pe¬

production

as

the other hand, the aid




Vice-President

is

of

the

organi¬

native of Ver¬

a

the
p.

Sense

A.

M.

"Chronicle"

National

of

of

the

In¬

Bernstein
Feb.

in

24, 1949,

divergent have

reactions

of

well

as

political

University

Senate

from

special

1923

to

1930

for

agent

as

the

been

bulls

Col. Fink Director

and

bulls, to the domestic

outlook.
the

and

outbursts

Election

The

results

of

as

recurrent

of

Mr.

socialistic

Truman

have

of

Col.

director

a

Corp.

Sol

Paul

of I The

Fisk

Omnibus

announced March 1.

was

1931

since

and

as

an

explanation

for

liqui¬

dation

by "Wall Street's scared
(temporarily) rabbits."
On the

other

hand, particularly at times
better market performance, in¬

&

Co.,

members

of

Stock

Ex¬

director

a

income.

This

$5,200,000,000 higher than in 1929, an increase of
industry's payments in wages, salaries, social
security, pensions and other compensations constituted nearly threeabout

was

175%.

The

quarters of its contribution and also
In

the

interval

same

175%.

rose

■

the

industry's income taxes, the Institute
than 10 times; net after taxes gained 118%

more

11%.
*

*

i

*

Noting that the United States Government has begun to tighten
credit controls

by law, "Electrical Merchandising," a trade publica¬
tion, recently advised dealers in the credit business to follow suit
and take added precautions when making a sale on time.
Three

important points stressed by the publication were to obtain
everybody you sell; not to fail to gpt the information
the customer while he is in the mood and not to fail to impress
him that payments must be paid when due or suffer the conse¬

reports
from
upon

on

1

/

'

,

leading services even man¬
to comment on the Presi¬

It made extensive

the large capital ex¬

penditures this country must make

developing the
of

the

more

world.

would,

use

of pri¬

involve the
capital."

And

primitive

This

it is said,

and

rine

a

bulls

S.

P.

Fink

The

Forces, beginning with his
enlistment, at the age of 14, in
the U. S. Cavalry, with which he
the

on

1912

to

World

Mexican

border

1915, inclusive.
War

I,

he

served

as

ism since August,
stands

10%

1945, and
above

the

even

its

pre¬

election level.

vision of the

In

see

that

basic

flaws

in

are

exclusion

Corp.,

external elements which do not fit

the public's mood of the moment,
and the contradictory varying of

popular interpretations of partic¬
ular factors in conformity
preceding market action.

with

serving

Command¬

as

Back-to-normalcy
this week, "The

was

Iron

awarded the Legion of Merit
a

commendation.

states

in

its current

worried

that

it

review

might

the steel

of

mean

more

trade.

than

Some

a

mere

steel

people

trend

to

the

regular way—competition—of doing business.
However, there were
signs that the bottom was ready to drop out of steel.

no

Signs
firms

that

things

are

changing

which had higher prices

in

steel

than the

follow:

some

majority have

steel

dropped,

them to regular mill levels; cancellations although not too heavy

becoming
up

more

frequent; holes in rolling mill schedules

oftener than

a

contracts
and

commitments

are v

month ago; some holders of non-can¬

cellable conversion

are

trying to buy their

customers

(Continued

Hirsch & Go.

modest

coming to the steql industry at a fast
Age," national metalworking weekly,

these

was

and

a

Collections continued to be slower than they were

pace

opening

and

the holiday

STEEL OPERATIONS EXCEED 100% OF CAPACITY FOR 7TH
CONSECUTIVE WEEK

Signal

Regiments,

to

year ago.

are

Training

was generally attributed
Washington's Birthday.

on

total dollar volume of wholesale orders reflected,

ing Officer of the 804th and 800th

those

of

he

again un¬
dertook active duty with the rank
of Colonel in the U. S. Army Sig¬
nal

we

War II

decline

stores

sizable volume.
a

were

World

many

drop in the holiday-shortened week, but was fractionally above that
in 1948.
Spring merchandise was" ordered in a

First Lieutenant and then Captain

record.

to

most pronounced in the New England,

of the similar week

of Field

of the Labor Government's social¬

faith

closing of

the

Armed

Artillery in the 92nd Di¬
AEF, and added 15
months of foreign service to his

their

was

.

The weekly

ago.
Col.

precedent of the British market
which rose during the installation

pinned

The decline

Central regions.
Advances over
appeared only in the East Central and Middle Atlantic

Although aided by favorable weather and promotional sales in
sections, total retail dollar volume declined slightly in the
was a trifle below the level of the comparable week a year

service,

from

ago

many

has

served

a drop of
19.3% from the December level
loss of 22.3% from the January, 1948, sum of

a

week and

notable record

with

and

States.

salvage

of

represented

ma¬

company.

In

post-election

our

tion

year

1

..

speech may well
produce hopeful, long-range mar¬
ket sentiment.

&

p ma n

He

dent's inaugural speech thus:
in its firmness the

reference to

a

It

Pacific, South Atlantic and South

Scott, leading
ing construc¬

inflationary and consumerpropping implications, is used as
a bull argument.
In this vein one

notes, that not more than 1%
of people buying on time are poor risks, nevertheless, these delin¬
quents can cut the margin of a dealer's profit.
Experience tables
have shown that if a customer will resort to deception once, he will
do it again.
A lot of dealers suffer by accepting contracts that their
:redit agencies have warned them against.
t 4

•286,513,248.

Merritt-

its

So

first in 1929 and-in six later years. %

industry's contribution in 1947, according to the
Institute, totaled $8,186,000,000, or 4.99% of private, nonagricultural

3f $275,532,434,

of

Ch

now

thirties, steel has been in first place or very
consistently than any other manufacturing

more

steel

nonths.

change, also is

tensified New Dealism because of

have

1929,

the

the New York

vate

as compared with
currently reports.

Building permit valuations for January fell rather sharply from
December level, and from the volume recorded in January a
year ago, according to the latest compilation by Dun & Bradstreet,
Inc.
Total value of permits issued in 215 cities last month amounted
0 $222,489,796, the smallest
monthly figure reported for the past 20

with

importantly cited as the har¬
binger of lower securities Values,

in

was

other

any

Its produc¬

nearly tripled

was

Colonel Fink, who has been as¬
sociated

Hirsch

areas

It

than

more

to the national income in 1947.

quences.

Co.

&

the bullish bears

been

aged

top

The

the

of

Investigation,
where
he
remained
until
1938,
when he resigned to join Braun

last November's Presidential Elec¬

of the

the middle

the

to

industry.

While

States

*

industry contributed

While it is estimated, the magazine

Similarly

of

close

Law

3).

tion

Since

points out, increased

the

Bureau

Good

steel

and dividends

of

a

by

and

George Wash¬
ington University and is a gradu¬

Federal

the

iron

the American Iron and Steel Institute

He attended

pointed

on

of

steel

firms

are

way

out of

getting

as

page 33)

Open
Time Inc.

Two New Branches
Hirsch

Gimbernat-Sellwood

New

Gimbernat

&

Sellwood,

Broadway, New York City,
bers

of the New York

we are

111

timore,
ment
1624

Exchange,

opening of

in¬

of

Eye

under

John

S.

the

a

an¬

Continental Airlines

branch

McGraw (F. H.) &

N.

W.,

and

Bought—Sold—Quoted

at

Wash¬

FREDERIC H. HATCH & CO., INC.

manage¬

ment of Oscar Coolican.

.

Mr.

Hardin

was

formerly

,

manager

of

the Baltimore
Co.

Y. SECURITY DEALERS ASSOCIATION

office
63

Starkweather &

Established 1888

coMEMBERS N.

of

Co.

manage¬

Hardin,

Street,

ington, D. C., under the

merly with Sherwood & Co., and
own

the

Md.,

mem¬

vestment firm in New York.

Kingan & Co.

Co., members of the
Stock

office in the Keyser Building, Bal¬

Stock Ex¬

in the past conducted his

&

York

nounce

Dept. Under Bennett

der the management of F. Lawson
Bennett.
Mr. Bennett was for¬

domestic

the producer of billions of
national income.
Dpring our re¬
cent periods of market
recessibn,
on

Co., national firm of
business and public relations con¬
sultants, and, since 1941, has been

earnings yields (cf. " 'Disinflation'

lant

our

York office of

&

extraordinarily high dividend and

change, announce the opening of
a
municipal bond department un¬

to

New

capacities. Upon gradution in 1930, Mr. Brown was ap¬

riods of market optimism last year
were welcomed as a major stimu¬
and

manager

the

Of

«it

*

The

are

both bull and bear markets.

and

been

Mr. Brown

decline in aggregate output, employment
fractionally in many sections of the country.

has

in various

this

successively in¬
self-contradictorily in

offered

years>Mr-

of
pprice softening on corporate
inventories, and cite inventory
vulnerability to justify the present

the market community's analytical

Two-Way Market Explanations

pull

ten

Ralph D. Brown

mont.

keeping with the

tiesmanufacturing industry
For the past tion of national income

;

Brown

Braun

a

rela-

School, Washington, D. C.
attending school in Wash¬
ington, he worked in the United

and

In

last week dropped

activi-

Now, however, 'midst a bearish
market
period, observers direct
attention to the injurious effects

vestor,"

Index

industrial

ate

optimistically

was

emphasized then.

processes

supply

IHl
|BL 1 HBk

market

and bearish

casting in conformity with
ceding stock market action is

the

bl i c

tions

a

bears,

of fore¬

to

zation.

the

Short Interest

traditional basing

prices

Pu

consumer

con¬

creasing exports, and marked
duction

forts

economy.

down¬

will

ftcompany's
A

ucts, a process inciting broadened
demand throughout the
The filip to industrial
trend in real estate, a moderate
activity from the resulting broader
rise in
taxes, a leveling off in use of consumers' cash
savings of
of

Production

Business Failures

production in the United States the past week
slight falling off as compared with the week
preceding. It was, however, mildly higher than the level prevailing
in the corresponding period of 1948.

devote his ef-

H

prices would permit reduced sell¬
ing quotations for finished prod¬

and
expectations

Industry

indications of

gave

Mr.

Brown

selves with the thought that lower

d i t y

prices;

Total

new

position,

explanations.
During recent periods of market
stability the bulls comforted them¬

lent
drop in
wholesale
com m o

na¬

commodity price de¬
represent
another
factor

bear

and

vio¬

Auto

and

company.

his

which has been used for both bull

produc¬

tion, the

*

Price

f

the

exports from the aided

clines

o

In

These

The recent

prospec¬

steel

President

the basis for

and as a major cause
continuing punitive taxation.

bankruptcies,
tive

his

lows.

as

1932

tions,

the increase in
t h

of

Trade

Commodity Price Index
Food

is
announced by
A. W. Hughes,

Theory

out

Output
Carloadings

Retail

State of Trade

organization,

store

extending to Europe was pessi¬
mistically envisaged as the har¬
binger of increased competition

indicat¬

ed rise in

partment

Production

Electric

•

Co., nationwide de¬

3>-

include

—the

the

to

down

C. Penney

Steel

The

Appointment of Ralph D. Brown
an executive position with the

J.

Economic Interpretation Still Follows the Ticker
In

Appointed by
Penney & Co.

J. G.

Wall

Street, New York 5, N. Y.

Bell Teletype

NY

1-897

-

■

<;

(962)

THE

The Retail

COMMERCIAL

Pricing I Situation

Thursday, March 3, 1949

CHRONICLE

FINANCIAL

&

i

From

By Q. FORREST WALKER*

Economist, R. H. Macy & Co.

Washington

Ahead

Retail

specialist, in commenting on confusion and d'siurbance in'business because of current low- eco-1
visibility, points out.high level of business activity cannot continue unless v/e have price structures >
support and increase flow of goods. Says it is jjint responsibility' of government, organized labor!
management to promote both production and d slributicn and criticizes heavy government costs and

of the News

nomic

that
and

high taxes

as

handicap to

proper

Sees public's Ispending pattern changing and

price structure.

cautious and selective retail

We

are

in

buying.

ivisibilit.y

Every time Mr. Truman talks about
think of a story I heard down

|c h
is

e evidence
growing

that
i

m

really
p o r

t a

n

corrections

t

of

economic

the

distortions
the

of

postwar

boom

now

are

under

way.

Prices

are

sensitive

b

a-

of

iomeiers

economic

change. There
Walker

j haV 6

A constable laid his defeat
Street

"Wall

'.-V

"How

been
share

be

would

The

Wall Street and the "Inter¬
in Tennessee a few months

for reelection to Wall Street.

me," he would
'presented itself.

beat

say

*

This is

joint responsibility of

a

government,

organized

-

4 abor,

management and all who play a
in production and distribu¬

part

when

that

goods

they

offer

prices-

rapidly into

move

"Well,

broaden
increasing our

markets

cannot

by

burdens.

"

our

been

plate banquet with this sort
50 of the down¬
dinner, smoking big

a

trodden labor leaders at the

and

cigars

as

well

fed and comfortable as the
capitalist. The way these

labor caricatures of the

spending the hard earned money
of their subjects these days is a caution.
A. F.
Wbitnev, head of the' trainmen, thinks nq more
labor

of

High production costs still im¬
pede the return of better qualities

recent $100

of stuff. Incidentally, there were

Carlisle

Reductions

exercise of its

government can only
spend what it takes from the peo¬

powers,

at. the

Bargeron

High Costs Impede Price

v

was

#

s;

>

tax

-

Within the proper

getting.

Wall
-';:

it

~

•

We

tell

you

...

"They barked," he insisted.
1
Nevertheless, Mr. Truman made the office¬
holders and the labor lobbyists deliriously happy

It is a fair guess thati few
tion.
While
this
discussion
is tion.
expect
to
satisfy
their
primarily concerned with prices at people
the retail level, it may be desir¬ needs at prewar
prices because
able to comment briefly on some they recognize cthat basic, changes
aspects of the impact of govern¬ have occurred which make the re¬
mental costs on the price struc¬ turn to such levels a practical im¬
ture. High governmental costs are possibility.
But they want more
a
substantial part of the cost of for their money than. they have

living.

here."

night."

could

how

Street?"

consump¬

he

Street?

them?"

"No, they came at

bettei

lower

can

somewhat

values at

occasion that

asked.

"Did you see

universal experience of merchantr

every

on

know it was Wall

do you

"Oh, they came down

is

because

low

BARGERON

ests"!
igo.

period of low economic visibility. The year-end forecasting season has
but the great outpouring of fact, sound opinion and mere wishful think¬

ing in these annual reviews has not dispelled the fogginess of the business outlook.

Q. Forrest

.

a

and gone,

come

more

By CARLISLE

tossing

away a

are

$10 bill than he would a dime.

Mr. Truman—it

But

birds

is doubtful if demagoguery has ever

been

least,
prices. In the coined some new
declines in the prices of; basic ple by taxation, or borrows direct¬
expressions such as Economic Royalists. Truman
dismal thirties, we added quality
commodities.
Our official index ly or indirectly from their savings.
has taken us back to the vocabulary of the Bryan times. Yet it is
many refinements to
mer¬
numbers of wholesale and retail Moreover, except within narrow and
doubtful if any President ever had so many Wall Streeters in posi¬
'"any

at

several

ward for
We

are

because

confused

we

these

ous

burden

months.
disturbed

and

do not know how seri¬

readjustments

may

how long they may last.

nor

be,

Early

chandise to maintain

price structhe war, most of
tional
government
because
the these disappeared; and at the end
the war retailers liquidated
burden really comes to rest on the of
whole people. These costs are part large
quantities of merchandise
of the prices we pay for every¬ that were acceptable only under

prices have been drifting down¬ limits, it is not possible to shift the
from

local

to

state

to

na¬

tures.

tions of

During

it

than

worse

attractive

more

is

Washington

in

these

at

Roosevelt,

days.

high influence.
that he might find it neces¬

The President told his worshippers

to make another one of his trips around; the country and they;
nodded at each other to the effect that this would certainly fix
sary

things

After all, look what he accomplished in the

up.

campaign.

I would give a pretty penny if he would essay something of
quali¬
It is my conviction he would be in for the surprise of his
We know what we pay directly, ties and more reasonable prices the sort.
there were
but we do not always realize that began to reappear, out the im¬ life because this time he. would have Bob Taft going right along
traditional
pattern
of
postwar
with him or closely behind. Indeed, if some of Taft's friends prevail
these
governmental
costs
are provements were soon checked by
economic changes would be re¬
In
pyramided through the w h o 1 e rapidly mounting costs and what he would challenge the President to make it a joint debate.
peated, but they did not occur.
appeared to be an insatiable de¬ either event, a joint debate or with Taft following closely on his
Replacement demands were un- j §amut of production and distribu™
mand.
Satisfactory
quality,* for heels, Truman would come back a very much shrunken figure. He's
derestimated and a combination Itlon- XJnder the American theory,
many types oi goods became i ob¬ feeling his oats now, the President is; seems; tb be getting cockier
of fortuitous circumstances* gave | government is not something apart
tainable only at prices beyond the every day. I can't imagine anything that would more deflate him
the
postwar expansion renewed1 from the people. There are limits
reach of the ordinary customer. than a set-to at close range with Taft.
vigor. But we cannot now foresee to what we may do in our collective capacity without destroying Somehow we must find ways to
No one would want to see him get the hang dog expression he
any fresh impetus to the ebbing
the initiative that got us where produce goods to meet this new had in his last term but a good chastisement just now would do him
boom.
In the press and over the
demand that grows more insistent
we are.
and the country immeasurable good. A few weeks after his reelection
radio, we shudder at some abate¬
he told a private gathering that there were thousands of men in this
The narrow, and often purely day by day.
ment of our economic fever.
We
At times it is surprising how
country who could make 5s good or even better President than he.
accept with enthusiasm new high political, approach to the taxation
But after all he happened to be the President, he pointed out.
manufacturers
and
mer¬
is not only a serious long
records,
however
unsound
and question
chants will cling to prices- and
artificial the means by which they handicap
to larger markets for
This was a trace of the humility that has characterized him.
are attained, but we take a dour
particular types of goods, but it qualities that have outlived their Brit he seems to be loosing it fast. He is coming more and more to
productive
possibilities
despite look upon himself as a great leader. It is hard to think, too, of any¬
attitude toward the signs of a re- carries
deeper threats to longer
fresh
advertising
expenditures
turn of more normal times and run economic stability. There is a
body more out of character.
vigorous
sales
promotion.
the unlimited opportunities such vast difference between the politi- and
Even the opposing Senators used to have a sneaking admiration
Many producers are still nibbling
a return offers to build a stronger
cal and the business approach to
for Roosevelt but they make little effort to disguise their contempt
long established trade
and better economy. We gravely the problem of producing more away at
for Truman. After all they served with him. They had an intimacy
need a positive, not a negative, income.
In industry, we pay in- discounts that have always been which makes them scoff at talk of mandates.
attitude toward healthy economic! centive wages, or grant merit in- figured in the original pricing
Everything considered, Truman's increasing belligerency and the
creases, to raise production so that and that are powerful stimulants
read just ments.
attitude toward him on the Hill, the prospect for any sizable portion
to continued dealer interest. They
The war saddled us with very j cosfs may be spread over a broader base.
In government, we do not jump to the easy conclusion that of his "program" being accomplished is far from bright. The Con¬
high governmental
costs.
High
servatives, Republicans and Democrats, seem to have entirely re¬
all the merchant needs to do is to
Jevel business activity is needed to j \ax
generate a larger flow of raise his price to a public that has covered from the shock of Truman's reelection. They are becoming
carry the very minimum of neces- mc°roe ^nd spread
our. governrepeatedly shown its lack : of in¬ less and less impressed with it every day.
sary
and prudent governmental m^ntal costs. We do not reform
terest in higher prices.
A group of business friends was telling me about the depression
Most of
expenditures. That level cannot antiquated, make-shift and punimeans
of raising in the offices of the NAM as the Taft-Hartley hearings got underway.
tive methods that set up powerful these indirect
be
maintained
unless
we
have
obstacles to the creation of new prices can result only in throw¬ According to these friends, the NAM had completely thrown up the
price structures that support and
and additional income; and there ing prices into retail zones that sponge on this particular Act.
They assumed it would go through
increase the flow of goods. During
is perennial search for new de¬ are not acceptable to the customer
as
the Administration wanted it.
Put out by the NAM's attitude,
the past two years, the official in¬
vices
that
often
result in
still and that are injurious to the pro¬ these men got busy toward perfecting an opposition to repeal of the

in

1947

and

again early in 1948,
expectations that the

thing

eat, drink,

we

wear

or

use.

wartime conditions.

Better

,,

of the

dex

physical production of

goods has increased only slightly,
while prices have moved substan¬
tially higher. In the department
store trade, we have achieved new
high record of sales, but the phys¬
volume

ical

moved
come

sidewise.

of

trade.

Our

has

gains have

prices, not from

greater quantities

merchandise.

prevails

trade

our

from rising

sale

the

of

A

similar

of

situation

in many other lines of
Squeezed
by
high food

costs, sharp rises in new housing

costs, and urgent needs for many
types of durable goods that now
cost much more than before the

the typical customed has cur¬
tailed his buying of the vast range

war,
of

ordinary goods.

When custom¬

cannot afford to pay

prevailing
believe them to be too
high, lesser quantities are bought
and fewer people are needed to
produce them.
That is why we
need
price structures that will
ers

prices

move

or

more

goods

into

consump¬

tion.

!i':An address

by Mr. Walker be¬

greater burdens

for

constructive




a

ducer

well as the distributor.

Act,

is,

as

what it wants.

There

solution

either

of

for

in

do

tion;

but

good five cent

lieve

that

costs

we

here

are

more

immedi¬

down

production or distribu¬
it is impossible to be¬
we

have

exhausted

After all,

functions

But

easy

no

coarse,

getting

possibilities.

*

Consumer Attitude Toward Prices

volume.

of

are

Many

ex¬

be

avoided

by

kind

the

price levels.

pre¬

testing that capitalizes

what

of

we

may

do to change them.

We may as well recognize that the
declines in prices of many impor¬
tant food products have focused

considerable
on

the

consumer

prices

attention

other merchan¬

of

on dealer
knowledge of the most productive

mation

does

than

sults

studies

and

ing.

tomer

Buying is more cautious and
selective, whether the pur¬
entertainment

is

smaller

size

preparation.

of

a

or

toilet

favorite

There is

an

the

increas¬

It yields better re¬
multiple
correlation
costly consumer sur¬

The dealer

veys.

customer.

more

not

kind of infor¬
require expen¬

is

close

to

He knows what the

wants

and

what

he

the
cus¬

will

are
are

months,

near

record

levels,

sav¬

increasing, and liquid as¬
still very large. For some
it

has

been

the

almost

that the Administration will get nothing like

appears

or none

His henchmen

of the Roosevelt gang's finesse at
seem

Truman's

to fumble the ball at every turn.

of Agriculture, Brannon, has been placed in charge
that is, he is directing the strategy.
You
that when he was elevated to the secretaryship he was in¬

The Secretary

of the domestic program;
recall

troduced

as

a

man

who

had

worked

up

the

from

ranks,

just

an

The fact is he is a professional
here with the Roosevelt gang. He had to start

honest, hard working civil servant.

politician who came
at

lower level but he is far from the

a

He did a

civil servant type.

the farmers in the last campaign, played
strictly political basis.

good job of hoodwinking
them

on a

hasn't

he

But

the

ability

political

of

Roosevelt's hatchet men.

Capitol Hill who are going along with Truman are
those who are for the program.
They are, in fact, leading Truman
not following him.
Conversely those who are against the program
pro -ot
being frightened by Truman's big words or any axe he might
The only ones on

wield.

'

■

.

The first thought of a mer¬
after looking
at goods is

pay.

chant

he

what

can

get for them.

often, products

Too
designed and
adequate consid¬

are

ing disposition to wait for better costed without
values and lower prices. If figures eration of what the ultimate con¬
mean
anything, the trouble does sumer is willing to pay.
We
know
that
not
seem
to
be lack of
quality, style,
buying
power, because the flow of income "eye appeal" and utility are often
remains

now

There is little

sive research.

dise. Spending patterns are chang¬

chase

This

It

command.

the

costs

pensive mistakes in pricing could

ately interested in consumer atti¬
tudes toward prevailing prices and

ings

City, Feb. 25, 1949.

than

us

will

effort

cigar.

sets

York

for

more

American

New

productive ef¬

Government, as well as pri¬
vate industry, can price itself out
of revenues.
Higher net rewards

fore the New York

Chapter of the
Marketing" Association,

on

forts.

much

more

important than

mere

price. There is still a vast range
of
opportunity to improve the

(Continued

on

page

39)

With Frank Knowlton Co.

Schwabacher Adds Three
(Special

SAN

to

The

Financial

FRANCISCO,

fred P. Otto,

Chronicle)

-j

CAL.—Al¬

Jr., Frank S. Sperry

(Special

to

The

OAKLAND,
Chichester has

Financial

CAL.

Chronicle)
—

Paulding

become associated

and Ernest Stent have been added

with Frank Knowlton & Co., Bank

to the staff of Schwabacher & Co.,

of America

600

Market

the New
Stock

Street,

members

York and San Francisco

Exchanges.

Building.

In the past

of Mr. Chishester conducted his
investment business
Cisco.

own

in San FranV;;.

Volume

169

Number 4782

THE

COMMERCIAL-&

Newspapers and
Economic Illiteracy
By

JAMES

P.

general readers'

Predicting overall cost-of-living would
ments will not be

+

;

The general topic of
the

and

interpretations.

many

ning tossing dead cats
I

have

might spend

at each other under the

where

cnosen

UiC

to

of

stop"

h oulders

have

her

sought
I

con¬

be able to

he

James

P.

Selvage

faced irate corporation presidents

explain why

a wrong conclu¬
drawn from a release or

was

why I did not control

your

head¬

line.
It
could be
a
rollicking eve¬
ning of fun. But, with your per¬
mission,
I
trust,
I
choose
to

delimit rhy part of the discussion

tonight
arid

to

something

vital

than

the

more

purely

basic
occu¬

pational
relationships
between
public relations and the gentlemen
of the press as represented
by the
My broad premise is—There is
way through the daily press of
the
nation to get across to the
great,
unknowing
masses
the
simple verities of our industrial
system—the answers to the poli¬
ticians,
to
the
radicals, to the
radical politico-labor leaders
who,
either through ignorance or de¬
liberate

distortion, seek the Glory
through economic confusion.

The immediate response to that
statement might be three¬

broad
fold:

(1) No institution believes
than

in

the

the

capitalistic

newspapers

as

more

system

a

group.

(2) The newspapers carry, pro¬

portionately, each day more news
about business and industry than
any
other subject, except, per¬
haps, sports.

Business does not package
its news and tie it up with pink
(3)

ribbon

so

it will

be

attractive to

the average newspaper reader.
Business

Confined

But,

agree.

rape

to

Financial

demagogue,

businessman

as

widows

and

unions,

and
America.

fathead with

children,
establish

Research

Service

sports and 21%

Among

the

its

ment

whatever

the

ducer.
line

It

is

its

eight
The

news.

makes

become

column

know

I

am

wading
even

expounding the thesis 15 and
that it was over-ex¬

18 years ago

pansion
the

industrially that
depression; that we

Today they have com¬
pletely contradicted themselves.
millions

to

whom

Mr.

Truman addressed himself remain

just as economically dumb
the time they finished
President's messages.
Let's take a couple of

at

as

two

I

from

(Continued

jts
on

more

ex¬

on

Board,

page

the

economy

be

low

of 44

from

cents,

and

pound

to

isolated

They

are

parts
are

the
of

financial

the

most

the

written for

Labor

to

that

the threshold of

you

38)

Now let
the record

us

D.

pages?

the

can

nor

incalculable

We take
MR.

a

would

that

commerce

time

in

Past

dry up more quickly than
imagine without the fi¬

all

looking for, but in the

of

Mr.

Selvage

fore New York Financial

Association, March 1, 1949.




be¬

Writers

summer

crpp|lbf bread grains

abroad

is

seriously

by

which created
age

of

damaged
a

go

grains both for

food

past. Our prin¬

foods.

At

the

same

time

and

steel-making,

(Continued

P.

Graham,

on

page

MURTHA
Parsons

&

long-time measure of the
general price level is the Bureau's

Co.)

INCORPORATED

Wholesale Price Index, which has
been

compiled

nearly 60
past

35

years.
years

continuously

Investment Securities

for

The record of the
is

on

this

clearly the two

25

BROAD

STREET, NEW YORK 4, N. Y.

chart,
war¬

March 1, 1949

Dlgby 4-0770

time peaks, separated
by a valley
s;:An address by Dr.

Clague be¬

fore the Economic Club of

Detroit,
Detroit, Mich., Feb. 21, 1949.

ARE

PLEASED

THE

ANNOUNCE

TO

ADMISSION

THAT

OF

CERF, JR.
C.

FRED

RICHARDS

MEMBER.OF THE NEW YORK

the formation of
OUR

STOCK

EXCHANGE

FIRM

AS

GENERAL

PARTNER.

MEMBERS

OF

THE

YORK

NEW

-AS

general investment

OF

THIS

WE

STOCK

HAVE

OFFICES

HAVE

DATE

BEEN

One Wall Street,

120 South La Salle Street

MOVED

New

TO

York 5

TELEPHONE WHITEHALL 4-5850

CHICAGO
Telephone Financial 6-2277

•

HENRY

Teletype CG I 363

March 2, 1949
MARCH

1.

1949

HERRMAN

&

BECOME

EXCHANGE

CO.

and

35)

Vice President

a

in¬

in costs and prices in coal

Homer O'Connell & Co.

cipal

and

feed, This stimulated a new
spurt in prices of farm products

back and look at

of the

were

drought,

world -wide short¬

for

JEROME
with

as

of that year our corn
crop and the

can

^Remarks

appeared

Record

OUR

America

it

though we might be reaching that
plateau of stability that we were

pleasure in announcing that

(formerly

of

by
rapid price rise of 1946.

short

a

securities business

state¬

period

to

people.
a

a

a

economic

damage to a great many
I think it is not too broad
ment

a

In the spring

uncertainties generated

very

mining

ex¬

us

18

We

war.

have

very com¬

audience.

of

readjust¬

bring

The

lasted

end

ques¬

selectly

conduct

the

For

the postwar highs in 1948.
Except

FLOYD D. CERF, JR.
COMPANY, INC.
to

of

the

to

1939

than

momentary con¬
traction in the economy, in view

and

in

1920.

months

we

hesitation and

creases

lows

in

to very severe tests.
of
1947 there was

the

from

war

then

the

post¬

longer

the

In the past two years the
price
has been several times
put

ments. The same chart shows the

MR.
announces

and

prolonged

rise

half

level

prevent a repetition of this? Let
us look at our
present situation in
the light of the recent
develop¬

WITH

FLOYD

f

present

price

much

of

to

ask: What
situation

may

our

42

this

beyond V-J
as
yet en¬
nothing approaching a
general liquidation of prices.

op demand, broke simultaneously
iff'almost all industries.
in

latter

that

ended

boom

now

Day,

examples of what happened
a
speculative
inventory
boom, without firm underpinnings

Now

the first.

countered

cal

there

the

lasted

end

that

postwar

typi¬

are

has

the

rise

are

in

notice

months from

a

has been elected
The

the

not

are

will

rise

war

12

cents

second

uie

in

r

beyond

when

period of stable
price-income rela¬

healthy
tionships.

9

These

n.

was

in
the
Statistics leads

that

treme, and that it

a

its

from

instances; they

post-depression

ment need not be violent

and

You

the

to

'

it

as

controls

of 1946.

1921, cot¬

pound

a

cents.

WE

A single sentence wrongly
written,
or
with a few misplaced facts,

do

lead
4

in

newspaper.
a

business-financial

might

cents

now

They comprise
edited

42

con-

was
particularly true of the
spurt that followed the lifting of

dropped from
bushel in 1920

a

cents in

price

1946

analyses

our

of

a

to

steep

War

price

relative

came

firm

This

aim

They
point in

same

Then

Corn

high of $2.00

TO

What

we

rather

a

them.

pact

lifted,

speeds and in

to

answer

believe

the

seem¬

trying to propel
thinking. I have an orchid or
in my kit, but I am
saving
am

but

to

spectacular.

we

out

which shows

The NAM works for weeks

statement

ing to impugn the value of these
But bear with me, I am

not.

tion,
us

a

panaceas.

the

of

reasonable

dogmatic

prices

same

as

World

was

The declines in prices of individ¬
ual
commodities
were
equally
a

aoout

together.

1920.

caused
were

mature economy; that we needed
a
30-hour
week,
and
other

But

were

certainly premature to give

Bureau

pages.

our

It is
a

You

were

divided

violent readjustment?

the financial

know, and no doubt some
of you have told your
public, that
many of the people who are now
demanding industrial expansion

controls

turn

may

head¬

industry
similarly eco¬
phrasing and implica¬
on

be

the
right direction, or are we
passing through one phase of what

steel

tions, but it lands

will

approaching a
plateau from which we can pro¬
at

rise

of

1943

(which
plateau
the chart), the
price rise was

011

although farm prices hit a lower
floor before they bounced back.

ton

Are

larm

from

appears as an all-too-brief

within the span of a few
months,
and fell almost at the same
rate,

product

is:

ceed

pro¬

pages.

an

nearly normal.
question in everyone's mind

now

in

to

the

more

about

quantities, and how the

machinery

The

reply,

nomic in its

of

since

appears to be more

govern¬

steel

a

"governor"

economy,

started to race, and only
recently
has it begun to return to what

read

business has to say appears on the
financial and business pages.

treacherous waters in

the

happens almost daily?

job and that the

the

various producers. During

When

industry is falling down

should

Clague

war the governor was
"rigged"
through
price
control
to
keep
prices at predetermined levels.

financial

76%

women,

Ewan

the

Mr. Truman tells the world that
on

what

this

period

a

trol,

cjollapse. It was spectacular, and
nothing escaped. Farm prices and
nonfarm prices started
down, all

when

among

the gravure, 57% the ritdin
news,
65% the society section and' 7%
the financial.

the steel

next,

they
are so
influential in determining
what things will be produced and
in

for

although farm prices
rapidly for a time, they

reached

sense,

in

and

position

will

prices are
enterprise

a

readership that, among
men, 71%
read the rotogravure,
51% the main news section, 66%
the

t

a

understand why there is so much
interest in prices. In a real

newspaper

pages.

1914,
rose

happens. It
is
e asy
to

its surveys of Sunday

on

h

at that

of the remark-:

started at about the

it

break

Fascism

on

other

national

Publication

reports

the

happen

a

who
a

swept up
nonfarm
prices

and what will

illiterate
prey for
portrays a

is

amples.

reason, it does not deny the fact
that almost invariably, whatever

I

w

economically
he

that it

1920,
we
wondering

ire

can

reading the

Pages
I

we

more

So what

no

firmly

on

big bay window, a top hat, and
a
consuming
desire
to
starve

financial and business editors.

Road

the

nappen

think

more

any

story or two
having

sion

and

judges—some rimes

read

him.

is, the

a

of

to

or

the

re¬

with

to

eye

look

us

interruptions. One
able things about

current wages

accept thf
seqUitur that the less this guy is
likely to read the financial pages,

ceivably might
taliate

women s

even

And I

to misuse your

pages.

be hapnin g to
prices. With

pe

one

Let

wartime peak. It represents
the accumulation of a
6-year price
rise with only occasional and brief

may

in¬

Story
on the front
page—who think tha
the financial pages are not foi

public rela¬
tions on their
s

varying

!• Yet, there are millions who turn
to the sports pages, to the comics,

g tne

epaulets

tying

terests together.

men

in

-

of depression.

first

fulof what
center

nerve

instances

self

and half-fear-

nancial and business pages as the

many

bear

topic.

a

<$>-

_

everyone
is
half - hopeful

no

doubt you can
recite

aegis of such

price readjust¬

more

consumer,

eve¬

happy and exciting

a

recent

than usually,
everybody is concerned about prices—hoping for
drop in the prices of things that he
buys and fearful of a drop in the prices of the things
he sells. Whether it is the
farmer, the businessman, the purchasing
agent, or the ordinary

pages.

We

steady in immediate future, and

a

discussion here tonight is Public Rela¬
This is a broad question subject to,

our

Financial

remain

or

product between consumption and investment.
These days, even

;

preservation of capitalism.
tions

violent

"

talking to itself. Recommends
doings of industry indispensable for

to

/

extreme, leading government statistician looks upon recent
developments
as
promoting stable and healthy price
relationships. Points out lower farm prices have been offset by
higher metal prices, and says there is no likelihood of
price collapse experienced after World War I.
Stresses importance of balance between prices and income, and a
healthy distribution of national

of business

exposure

7

By EWAN CLAGUE*

given to the demagogic attacks by government and labor leaders.
situation

(963)

Commissioner of Labor Statistics

Public relations expert decries the
relegation of business' stories io
the financial page in contrast to the
general news publicity commonly
This entails

CHRONICLE

Price Outlook Portends No
Depression

SELVAGE*

Partner, Selvage & Lee, Public Relations
President, French & Preston, Advertising
i

FINANCIAL

a

8

how much

Financial News Coverage and
American System

the

The

progressively lower volume of
space devoted to financial news, for which he finds publishers and
owners
at
fault.
Concludes this
is importantly undermining
American Way of Life.

We hear
the

that

say

far

as

Gene.'

told

is

progressive decline in
the volume of space given finan¬
cial and business news. I know

to

that

that

him

field of

any

endeavor

susceptible

improvement
but that I had
fault

no

find

with

to

the
in

manner

which

public

relations

and

financial

news

writing
b

i

e

n

was

g

he
Corrigan

Well,

persuaded

me as

that in the few words I

tonight
thoughts

that

say

will

not

be

with

I

you see,

I

and

some

hope

the

the

is

fellows

that

you

single piece of

every

send

you,

sent

out."

I,

do

not

I

as

you

lot

a

of

the

little, if

say

reache:
and

any,

space

That perhaps is a weak¬
of the public relations sys¬

anyway.
ness

tem,

but

I

don't

going to change
are

so

how

see

it

is

as long as there
public
relations

many

people with clients who want to
get into the news columns on the
slightest provocation.
The

ideal

of

public

relations

people would be that every single
story they send would be of such
tremendous interest that you folks
would wait breathlessly for them
to

come

in,

and

couldn't

afford

without

them.

to

the

papers

to

go

press

Unfortunately,

I

don't think any of us will live to
see such an Utopia.

And

yet,
with

to label me

like the candidate for

office in

agricultural county in
State. He said over

an

Southern

a

and
"I

again in his campaign,
in favor of the State giving

over

am

seed to every farmer

free

stand

don't

I

and

county

care

in this

if my

this issue beats me for

on

election."

York

ing these aims is for the publisher
to neglect their most important
section. In my opinion this is not
even
good business because most
of the leading metropolitan papers
throughout the country have at¬
tained their leadership by appeal¬

Atomic

Atomic

is

sufficient

not

curities

and

interest

in

very

The

the

that

reason

laws,

illustrate

To

a

I

When

say

business

and

that the financial
sections of news¬

Building, Cleveland 14,

Curtiss-Wright
Oil

rent

Priced

Low

I

Stocks—List

One of

York

there
the

is something
financial press

thousand

5, N. Y.

instanci

The

i'fjnancial section^ tend
eda^orate into thin air. Two
three

years

which
a

I

am

survey

in

29

ads,

of 184 papers in 84 cities
The
circulations

states.

ranged from five thousand to one
million. Here are the results:
carried

60

financial

no

news

whatsoever.

18 carried
18

carried

12

of

carried

18 carried

Vz of
one

a

a

column.

column.

column.

Only 23 papers carried 2 or more
columns.

1

pointed out
made during
newsprint shortage but I feel
the situation has not greatly
It

this

should

study

be

was

that
the

that
im¬

paper

cbnciudld tot "very feMf
those with appealing,
illustrations, equal

even

City Banks—Break¬

are

like

would

to

this subject, I

on

much

three

to finance

space

it

as

does

to

times

as

and busi¬

sports. In this

magazine, issue of Feb. 21,
the publisher said in his usual
letter, "Among the favorite-de¬
partment-first of male readers the
same

first

i favorites

seven

in

order

National

Affairs,^Finance
and Business, Medicine, Foreign
News,;'. Science,
People,
Inter¬
were:

have

of

which

course,

through letters

to the editor.

come

repeatedly

to the factor of

non-recurring

profits and losses,
picture is not shown.

curity

a

se¬

Banks—Tabula¬
distribution of

banks—First Boston

17

On
based

rald

The

to

Current prices offer yields of about

6% to 9%

Chronicle)

Financial

ANGELES, CALIF.
Stubblefield

W.

with

connected

the

Over

Counter

Industrial

.

El Paso Electric Co. "

10-year per¬
formance of 35 industrial stocks—
booklet—National

Quotation

Bu¬

Inc., 46 Front Street, New
York 4, N. Y.
*
reau,

Northwestern Public Service Co.

Gulf Public Service Co.

Portland General Electric Co.

Kentucky Utilities Co.

Public Service Co. of Indiana

Mobile Gas Service Corp.

Puget Sound Power & Light Co.

of

possibilities

for

G.

(Special

The

to

FRESNO,

Co., 115 Broadway, New York 6,

;

Also available is

a

Street, New York 5, N. Y.

Southern Union Gas

tabulation of

commissions, taxes, fees and mar¬
gins on purchases and sales of se¬
curities and commodities, analyses

South

208
cago

Salle

La

Co.—Cir¬

Fairman

W.

cular—Fred

Co.,

&

Street, Chi¬

4, 111.

of Shamrock Oil & Gas and Camp¬
bell Red Lake Mines, and

Air Reduction,

on

lines,
Mobile

leaflets

American Air¬

Granite City Steel, Gulf,
& Ohio, Inland Steel, In¬

Inc.—Circular

Products,

Sport

;

—Cruttenden & Co., 209

South La

Chicago 4, 111.

Salle Street,

Tucson
Gas, Electric Light &
Circular — Ernst & Co.,
Indiana, Power
Yisking, Victor 120 Broadway, New York 5, N, Y.

ternational Shoe, Monsanto Chem¬
S.

U.

Service

Public

ical,

Gypsum,

of

—

Chemical Works.

industry—Vilas

&
Hickey,
York 5, N. Y.

Descriptive
Birkins Com¬

Co.

Fuel

Victor
Railroad Prospects—Outlook for

~

—

literature—George

40 Exchange
N. Y. ? :
>

pany,

Place,

New

York 5,

&

Beane, 70 Pine Street, New
N.

CALIF.

Co.,

Davidson

Financial
—

Chronicle)

with

Bailey & Davidson, FultOn Fresno
Building. Mr. Brown was former¬

With Cohu Corp.

win

and

G. H. Chance

&

((Special

LOS

YORK 5, N. Y.

to

The

Financial

-Chronicle)

ANGELES, CALIF.—Allen
the staff of

Sojuth
Spring Street, members of the Los
Rogers

Angeles

Stock

&

Co.,

458

Exchange.

Mr.

Henry J. KirWilliam V. Hewitt have

Gordon R. Moon,

by

and

become associated with The Cohu

Corp., 1 Wall Street, New York
City, in the retail distribution of
Mutual Funds.-

Central Arizona Light & Power;

Paul R. Flynn Co.
(Special

LOS

Co.

Walker has joined

Gross,

Inc.,
150
Broadway, New
Union. Commerce Build-!

—Analysis—Ira Haupt & Co., 111!
Broadway, New York 6, N. Y.

ly with Walston, Hoffman & Good¬

Tube—
& Co.,

Wall Street, New York 5, N. Y.

;

*

*

ing, Cleveland 14, Ohio.

Alexander

1

H.

York 5,

York. 7;

v

Circular—G.

Y.
*

Sheet &
Walker

Youngstown

Security and Industry Survey—

Quarterly guide for investors—
Merrill Lynch, Pierce, Fenner &

has become

;

Merrill Lynch, Pierce, Fenner & Beane




H.

Y.

N.

,

Brashears

Brown has become affiliated

L.

Offices in 96 Cities

Mason

Gas Company—
Rothchild & Co.,

Jersey

52 Wall

Bingham Herbrand Corporation
J.
Mericka
&

With Bailey &

Trading Department

>

South

liberal

&

Do-

—

Walker With Gross, Rogers

\

of

Digest"—

East

225

Co.,

Review—L.

„

PINE STREET, NEW

&

yield plus tax shelter—Goodbody

-

7U

"Business and Financial

Loewi

Inc.—

issue

current

Railroad Income Bonds—Discus¬
sion

change.

England Gas & Electric Assn.

Light Co./'-

Products,

Steel

Safway

Analysis—In

Street, Milwaukee 2, Wis.

Co., 510 South Spring Street, mem¬
bers of the Los Angeles Stock Ex¬

Northern Indiana Public Service Co.

Wisconsin Power &

Racing Association, Inc.

Revere

—Descriptive circular-—William S.
Baren
Co., 42 Broadway, New
York 4, N. Y.

Index—With

Stock

—Circular—Wm.

New

Northern States Power—Memo¬

Corp.,

figures for 1948.

the

(Special

Common Stocks

Light Co.

Cement

Portland

Co., The., Alamo National Build*
ing, San Antonio 5, Texas.

Insurance
company
upon
preliminary

49 Wall Street, New

LOS

Atlanta Gas

State

G. Brashears Co. Adds

PUBLIC UTILITY

Atlantic City Electric Co.

Railroad—Anal¬

Valley

Lehigh

ysis—Raymond & Co., 148
Street, Boston 9, Mass.

Broadway, New York 5, N. Y. randum—Sutro Bros. & Co., 120
Also available are comparative Broadway, New York 5, N. Y.

true

Trading Markets in the following

Y.

100

national." He arrives at this corn-

elusion, of

N.

Longhorn

point out that the

almost

Company—

government securities in portfolios

current issue of "Time" magazine

devotes

Utilities

Kentucky

„

maturity

of

stocks

proved.
I

'

figures

we

—

New York City
tion

this record."

While

La

—

Fuller &

Company—New analysis—Russ &

human interest

ness

only % of a column;

than half of the

noticed the
ted, and the firm which made the

purvey

back, the firm with
connected conducted

the

of

Analysis — Wil¬
Co., 209 South
Salle Street, Chicago 4, 111.
Company

A.

Analysis—G. A. Saxton & Co.,
Inc., 70 Pine Street, New York 5,

Laird, Bissell &
Meeds, 120 Broadway, New York

responses, letters, tele¬
phone calls and personal visits.
An independent readership survey
readers

Utility
Common
10 issues—A. M.

government bond port¬
folios and sources of growth in¬
come 1948 on 19 New York City

the rule. However, if you
gentlemen think you are not get¬
ting enough space, I would like

more

International Cellucotton Prod¬
ucts

of

Bank' Stocks

designed

and

We l,a ve

of

New York
downs

to
produce bulk inquiries but > the
firm received approximately five

securities

the
not

Ohio.

Co., 1 Wall Street, New

market.

showed that

Danciger
Sterling

5, N. Y.

fundamentals

attention to the con¬
which exist outside of

Co., and

developments in Railroads.

are not accorded enough
I am not referring to every
newspaper. There are exceptions
but
it
is
the
exception which

to call your

Corp.,

Refining

&

Drug, Inc., and a bulletin on cur¬

This shortage of space, to which
called the I have referred, has other disad¬
you are not to blame. The
attention of publishers, both here
vantages. Very often when a story
fault lies with the publishers and and out-of-town, to this sad con¬
is
abbreviated too much it be¬
owners.
For
two
decades there dition
and
their replies invari¬
comes
misinformation.
If
the
ably have been "We don't get earnings of a bank for 1948 are
*A talk by Mr. Corrigan before
enough
financial
advertising." merely reported at $3.50 a share
the New York Financial Writers' They do, however, give ample as
against, let us say, $3.00 for
Association Forum, March 1, 1949. space to the
sports pages, and 1947, and attention is not called
wrong

Russell & Co., Union

Commerce

space,

proves

Industrial Brownhoist—Circular

—Gottron,

Also

clients, Merrill Lynch, Pierce,
& Beane, a few months
ago ran a full page,
6,000-wor<i
all-type advertisement in a morn¬
ing newspaper here, explaining
of

insurance

1948

—

Street, New York 5, N. Y.
available are analyses of

Fenner

was

on

and

15 Broad

Kidder &

It

Analysis of
Dillon & Co.,

Industry

Copper

outlook—Eastman,

of

interest,
case:

leaflet

a

stock earnings.
-

liam

this

should like to cite

is

of

tabulation

a

Street, New York 5, N. Y.

—

available

Also

—

& Co.,
Inc.,
Street, New York 5, N. Y.
Blair

Security Insurance Company,

know.

as you

Company

Insurance

44 Wall

the stock market is because of the
tax

Analysis

companies now
making use of
radio-isotopes—Cohu & Co., 1 Wall

is

for the low volume

Street, Chicago 4, 111.

Salle

Atomic Energy—Industrial pos¬
sibilities
of
atomic energy
and

little in-and-out trading and

reason

Circular—
South La

—

231

Co.,

&

Comstock

In

there

Inc.

Fibers,

Glass

an

,

my
opinion that is a mistaken
viewpoint. People are just as in¬
terested in business, finance and
the securities market as they ever
were.

for

Boenning & Co.,
Street,
Philadel¬

Home

se¬

financial.

things

4, N. Y.

New York

Stocks

—

—

Walnut

1606

told that there

am

Age

Age

'

phia 3, Pa.

ing to the business community.
Sometimes I

Street,

25 Broad
4, N. Y

Co.,

our

Declining Allocation of Space

New York. In too many

del.

in %hp
and often arrives late

newspapers

want to hear it. I don't want you

material ditions

'"news,"
which
hasn't much merit

serves

to

know better

labeled
you,

we

it is

as

intend

don't

run

that

copy

word for word

that because,

than

this

are

&

Diana Stores Corp.—Analysis—
New Newborg & Co., 30 Broad Street,

Transport—Review—Hirsch

Air

on

papers

a simple matter for
"the trouble with you

say

right. I don't say
merely because I think you
you

the following literature:

lot these days about

a

of educating
the
the American System,
American way of life. And
of the surest ways of defeat¬

public

have

writers

financial

you

think

which
to

It would be
to

a

waged and are still waging a con¬
stant battle for more space and I

leave

can

you,

topic.
me

been

has

going

am

irrelevant

too

con¬

,

ducted.

to

And I said that

I know, there is nothing wrong.

as

to

Emmett

natural reaction was to

mentioned will be pleased

the firms

interested parties

send

to

American

the

to

necessity

one

When your President, Gene Dickhuth, invited me to appear be¬
fore this group for a discussion of the subject "What's Wrong with

It is understood that

Injury

System

Public relations executive points to

my

Recommendations and Literature

Or Aqueduct?

Or Jamaica?

By EMMETT CORRIGAN*

Press,"

Dealer-Broker Investment

How

does Belmont run?

Chairman, Albert Frank-Guenther Law, Inc.

Public Relations in the Financial

baseball,

hockey clubs big ad¬
much advertising

or

vertisers?

the

Are

this

from

emanates

classification?
football

and how much

revenue

advertising

Thursday, March 3, 1949

CHRONICLE

FINANCIAL

COMMERCIAL. &

THE

(964)

...Central National Bank of Cleve¬
land—Circular—Prescott
Co.,
Guardian

Building, Cleveland

14,

circulars

H.

to

Financial

The

Adds

Chronicle)

ANGELES, CALIF.—James
has been added to the

Shaw

R.

Paul

staff

of

West

Seventh

Flynn

Co.,

411

on

Street.

Ohio;
Also

available

are

Cleveland Trust and National
Bank

City

of Cleveland.

Central Public

Walker'was

previously with Floyd

—N'ew York

A. Allen &

Co.

Broadway.

Utility—Analysis

Hanseatic Corp., 120

New York 5. N. Y.

Parmely Herrick Opens
(Special

co

The

Financial

;

Chronicle)

BOSTON, MASS.—Parmely W.
has opened offices at 84

Herrick

State Street to

engage

curities business.

in the

se¬

Volume

169

Number 4782

at

Martin Sees Need

their

to

leader

Representatives
tion instead of

business

pressing for

controls

should

taxes,

constructive

of

Administra¬

says

and

devote

to

create

itself

to

encour¬

jobs.'

new

Speaking at Fairfax Court
House, Va.r on Feb. 22, Joseph W.
Martin, Jr., Republican leader of
House of

CHRONICLE

terms

power.

of

Representatives,
warned

"the

economic

weather

had

changed ab¬
ruptly" and

March 15, 1949

(Cleveland, O.)
Cleveland Security Traders As¬
sociation Annual Spring
Party at

EVENTS

measured

In

Investment

Field

less retreat to fiscal chaos."

March 16-17, 1949
March 3, 1949

Central

(Chicago, 111.)

Stock Brokers Associates of Chi¬

States

(Chicago, m.)
Group of IBA

Spring Meeting at Drake Hotel.

educational program, 3 p.m.
Floor, Chicago Stock Exchange.

(Special

LOS

to

The

Financial

Chronicle)

ANGELES, CALIF.

Charles

W.

Flesher

has

,

—

become

associated with Floyd A. Allen &

Co., Inc., 650 South Grand Ave¬
Mr.

nue.

Sales
and

Flesher

previously

was

Manager for Bartling & Co.

prior thereto

Webber, Jackson

was

with

Paine,

& Curtis.

April 22, 1949 (New York City)
Security Traders Association of

March 8, 1949 (New York City)
National Federation of Financial

Floyd A. Allen & Co.

June 17, 1949

(Boston, Mass.)
Municipal Bond Club of Boston

New York dinner at the WaldorfAstoria.

Analysts Societies Second Annual
Convention.

May 14-15
San

March 11, 1949
Bond
nual

Club

(Detroit, Mich.)

of

Detroit

Dinner in

room,

the

33rd

Crystal Ball¬

Book Cadillac Hotel.

Diablo

Outing at Mt.

over-counter

5-9, 1949
Colo.)

National

(Colorado

Security

Dec. 4-9, 1949

f

(Hollywood, Fla.)

With

Spring

Meeting of

the

Board

Edgar P. Hetzler Co.

(Special

of

Governors at the Greenbrier.

to

The

Financial

ton is with

10

South La

Salle Street.

o r

for

taxes,

more

spend¬

ing and
bureaus,

more

the
Administra¬

Hon. J. W.

tion should be

Martin, Jr.

devoting itself
to

constructive

to

measures

en¬

business, expand private

courage

investment,

and

to

hasten

new

business ventures which will pro¬
jobs. We simply cannot af¬

vide

ford

the

luxury of a depression
effort must be made to

and every
avoid it.

"This

is

time

no

to

American people for

ask

the

taxes,
spending on things we
can't afford," Congressman Martin
stated.
"Our thoughts and
en¬
ergies inust be devoted to keep¬
ing the people at work and main¬
taining the national income." Con¬
tinuing he remarked:
"During the two years of the
Republican Congress, this coun¬
try enjoyed the highest level of
prosperity and business activity,
and the highest level of
employ¬
for

more

more

ment, ever experienced
peacetime history.
"Now

that

business
not

the

has

immediately
of inflation,
the

problems

but

of

rather

possible
business recession, which must be
handled
ous

with

purpose

we

and

vigor¬

to head off

are

further unemployment.
"I
hope
the
Administration

thinkers

and

planners catch up
with the business picture as it ex¬
ists today, before it is too late.
The
Republican
80th
Congress
passed

a

made

a

tax reduction bill which

real
beginning
cutting back the cost of

ment to

ple

can afford;
"Today, in millions of Ameri¬

homes,

can

there
the

is

are

wider

a

work

the

as

1948

of the

final

tax

re¬

being prepared,
appreciation

80th

of

Congress in

its tax-reduction program.
one,

Every¬
he makes out his tax re¬

as

turn and realizes the tax cut
given
by the 80th Congress, must con¬
clude it was a pretty gooll Con¬

gress.

"I

predict tonight that if the
present
Administration
has
its
way with its fabulous new plans
for

At

Saltville,

Virginia, more than a half century
CHEMICAL CORPORATION
the first alkali plant in the South.
Forty years later, Mathieson established another large
alkali
plant at Lake Charles, Louisiana. An extensive
postwar expansion program at these two plants, in¬
volving the expenditure of nearly 120,000,000, has
recently been completed.

publican

bill passed

80th

facilities

These

ated

in

given

the

20th

"This
further
need

is1

to

New Orleans.

In recent

the

months, the company has purchased from
Administration the ammonia
plant

War

Assets

Lake Charles which

at

ammonia,
facture

are

essential

materials

raw

in

the

from

Saltville,

Mathieson

Chemical

manu¬

that

Corporation

Southern

states.

economic

development

in

the

featuring

Equitable
of

welcome

South

gas

and

Lake

at

other

published for

by- supplying

will

fertilizers in the

as

become

great Delta

manu¬

increasingly
agricultural

.

more

industrial and
opportunities

nitrogen products

Charles

area.

outstanding

will

the

series

ammonia

important

Corporation

This is another advertisement

natural

factured

operates one of the largest carbon dioxide plants in

Securities

no

time

to

increases.

to

capital

than 10

years

commercial
contribute
funds

to

by Equitable

concerns

to

sound

the

in

the

further

enterprises.

people

consider

The

great

is for less gov¬

spending,

lower

interference

and

taxes
ob¬

struction to the normal American

instincts Tor

business

NEW
L

A

HARTFORD

CHATTANOOGA

BIRM INGHAM
NEW

new" economic ventures.
A
stimulant to employment could be

given by reducing the excise taxes

YORK

S

KN OX VI LLE

GREENSBORO
ORLEANS

MEMPHIS

Securities

expansion

and




NASHVILLE
DAL

Corporation

AND

JACKSON. MISS.

Brownlef. O. Currey, President.
322 UNION STREET, NASHVILLE 3.

oper¬

to produce pure anhydrous am¬
production went entirely into the
making of explosives during the war, it is anticipated

or

at

built ajicl

monia. While this

processing of rayon, paper, textiles, metals,
[fertilizer, soap, plastics, glass and petroleum.
Also

were

by Mathieson for the Government during World
War II. Here, by a
process similar to that pioneered
by Mathieson at Niagara Falls 25 years earlier, nitro¬
gen from the atmosphere is combined with
hydrogen

For Mathieson chemicals,
including caus¬
tic soda, soda ash, bicarbonate of soda, chlorine and

will

American

of this hour

less

York

century.

tax

ernment

and

owned-and-operated warehouses extending from NeA\r

Southwest.

b,y the Re¬

Congress

the

producing dry ice and carbonic gas. These
products are distributed through 16 company-

two

plant facilities, coupled with the company's
electrolytic operations at Niagara Falls, New York,
have been an important factor in the
development of
many basic industries, especially in the South and

go
down in history as the last tax cut
ever

INDUSTRY

the world,

ago, MATH 1 ESC)N
started operation of

government spending, the tax

reduction

FDH

toward
govern¬

levels the American peo¬

turns for

CHEMICALS

a

wisdom

if

BASIC

shortages

prices,

runaway

with

our

strong tide of
halted, we are
faced with the

been

problems
and

in

TWO WALL STREET,

A.

Pel-

Edgar P. Hetzler & Co.,

steel

plants,

Chronicle)

CHICAGO, ILL.—Lura

government-

more

at

Investment Bankers Association
Convention at the Holly¬
wood Beach Hotel.

business

owned

As¬

Annual

pressing for
controls,

Traders

Annual Convention
The Broadmoor Hotel.

"instead of
more

Springs,

sociation

Investment Bankers Association

Security Traders Association of
on

Outing at the Concord
Country Club, Concord, Mass.

Country Club.

May 18-21, 1949 (White Sulphur
Springs, W. Ya.)

March 11, 1949 (New York City)

New York forum

(San Francisco, Calif.)

Francisco Security Traders

Association Annual

An¬

Annual

Oct.

cago

Charles W. Flesher Joins

9

Twin City
Security Traders As¬
sociation Summer
Party.

the Allerton Hotel.

1940

purchasing
We must stop this sense¬

(965)

securities, 4 p.m. at Schwartz's June 4-5, 1949
(Minneapolis,
Restaurant, 54 Broad Street.
Minn.)

COMING

have the

as

more

business, and expand private

investment

in

we

today,

higher

to

measures

That is why

years.

60 cent dollar

House

in

FINANCIAL

levels.

prewar

are killing some businesses
depriving people of jobs. The
government
at
Washington has
been over-spending for
16 long

Hastening New

Republican

&

They

Business Ventures

the

least

COMMERCIAL

and

For

age

THE

NEW YORK 5.

10

FINANCIAL

&

COMMERCIAL

THE

(966)

-

Thursday, March 3, 1949

CHRONICLE

Pennsylvania Brevities

F. S. Yantis & Co.
to

(Special

Chronicle)

Financial

The

CHICAGO, ILL.—John G. Shel¬
has become associated with

don

135
South La Salle Street.
Mr. Shel¬
don was with Television Shares
F.

Yantis

S.

and prior
representative for

Corp.

Management
thereto

Inc.,

Co.,

&

was

Vance, Sanders & Co. in the

Mid-

on approving
increases in the authorized indebtedness of
companies. These firms and the date of the scheduled meetings
Armstrong Cork Co. on April 13; Pittsburgh Consolidation Coal

will

vote

their
are:

indebtedness

Herrick, Wad dell Adds
Chronicle)

Financial

The

to

CAL. —
Frank Searle has been added to
the staff of Herrick, Waddell &
HILLS,

BEVERLY

Wilshire Blvd.

Reed, Inc., 8943

nothing

burgh

at

authorized

its

debt

Aluminum from
$150,000,000 to $200,000,000; Jones
&
Laughlin
by
$62,266,000
to
$150,000,000; and Lehigh by not
more
than
$9,000,000.
Jones &

STEEL

from

shares. The latter firm
in a $260,000,000 post¬
expansion and improvement

2,472,502

is engaged
war

Bought

Sold

—

—

2,500,000 shares, of which
are
currently outstanding

there

Quoted

in
connection
with
approximately $104,000,000
already has been spent.
program,

which

BUCKLEY BROTHERS
Members

York Stock Exchange

New

Exchanges

and, Other Principal

120 Broadway

1420 Walnut St.

New York 5
BArclay 7-7835

Philadelphia 2

PEnnypacker 5-5976
Private

Philadelphia,

between

Wire System

and Los Angeles

York

New

A nationwide group

of under¬

on

Inc.

Co.

&

Chicago,

of

Feb. 16 publicly offered

American La France

sylvania
in

Bausch and Lomb

this

offering

Applegate

Dayton Malleable Iron
Haskelite Manufacturing

Hydraulic Press Manufacturing
Stromberg-Carlson Co.

strange & Klima, Fauset, Steele
&

Co.

and

Pittsburgh,
inson

Thomas

and

&

Co., Bioren & Co., C. C. Collings

DeHaven

Co.,
—★

—

^

•

Rob¬

Aspden,

Inc.,

end,

Crouter

&

Towns-

Bodine, Halld-

&

weil, Sulzberger & Co., Harrison

H. M.

Byllesby & Company
OFFICE

PHILADELPHIA

Phila. 2

Stock Exchange Bldg.,

Teletype

Telephone
RIttenhouse 6-3717

,

PH 73

.

.

&

Co., E. W.

Close

Rambo,

Co.,

C. Miller &

R.

&

&

Kerner,

Co.,
Walter Stokes & Co., and Wurts,

Inc.,

Edw.

Dulles
The
to

&

Lowber
of

Co.

Stokes

Philadelphia.

construction pro¬
gram, reports a net income, after
charges and Federal income taxes,
of $866,767 for the month oF Jan¬
uary, 1949, against $772,746 in the
corresponding month last .year.
its

iour-year

12 months ended Jan. 31,

$7,126,731 for the preceding

months' period.

as

to the character of the

for construction, etc.

serves.

Cambridge Bldg. 3s 1953

5s 1963

N. E. Walnut & Juniper

Phila. Warwick Common

Pittsburgh Railway 5s 1953
Lehigh Valley Coal
1954-64-74

5s

Kent-Moore; Organization
Common

Philadelphia

Teletype

,

?

.

in the

The

& Co.
Exchange

Stock

Bldg., Philadelphia 2

Packard

participated
public offering on. Feb., 25
of
$20,000,000 Beneficial Indus¬
trial
Loan
Corp.
15-year 3J/4%
sinking fund debentures due Feb.
1, 1964, at 101V2 and accrued in¬
both of Philadelphia,

-

N. Y. Phone

'

of

fected Feb. 24 the

paving
poses.

City Elec. Com.

Atlantic

and

Drexel

banking

other

various
&

group

Co.,

pur¬

headed

the better of two

curities, which mature from

Nor.

a

submitted
bids for the' se¬

Interstate Power Co. Com.

$126,780,255,

and

$7,260,000
bonds
for various
municipal improvements.

1944,

Oil

with

of

Pittsburgh

600,000

in which

524,

1950

:

Co.,

Koppers

$9,648,592,

$2.69 per common
share, for the year 1946. Current

supply has

assets

the

at

1948

of

close

$47,646,510, and cur¬
rent liabilities $14,935,011.

Eugene C. Baldwin Is
With Sutro & Co.
(Special

LOS

to

The

Financial

Chronicle)

ANGELES, CAL.—Eugene

C. Baldwin has become associated

fields amounted to

issue

of

$21,938,000.

$25,000,000

under

Bell

Lee

Board of

to

that

Presidents
been

proceeds to be used

to

an¬

following Vice-

the

the

Charles

have
board of di¬

company

A.

Capek,

Chi¬

office; George J. Gruner and
Richard
de
La
Chapelle, New

had reached

cago

$16,156,250.

York office,
The year 1948 was

Corp.
Corporation

the

of

elected

rectors:

borrowings which by

the end of last year

Co.

Higginson

nounces

competitive bidding next

to pay off

Co.,
Van
Nuys
Baldwin was for¬

Lee Higginson

Co. of Pennsylvania

month, the

&

Mr.

Elected

1

25-year debentures will be sold

will

Sutro

Building.

significant in

son,

and Henry S. Roger-

Boston office.

;.;

Business and Financial

Inc., Pittsburgh;
will take over

stantial Improvement,

Reporting Needs Sub¬

Says Louis W, Munro

Public relations leader holds his

profession has not adequately

J

explained business to the press.

only by prospectus

E. H. Rollins & Sons

City of Philadelphia

York

Dining

City, March 1, Louis W. Munro, Vice-President, Doremus &
in speaking on the subiect, "What's Wrong With Public
and
and

them

major prem¬
ises: '
—

Sold

—

Western

tions

Pennsylvania

Wire to New

and

York City

:

PITTSBURGH 22, PA.

Incorporated

ness

how

System Teletype—PG 473




ALLENTOWN

•

PITTSBURGH

NEW YORK

SCRANTON

•

public

Finally,
Louis W. Munro

is

a

worthwhile

commercial

ad¬

relations

departure

he suggested that a
from established

methods of business and financial

men

were

responsible for having many cor-

LANCASTER

paper

for

vertisers.

fi¬

press.

the

market

outlined

He

PHILADELPHIA 9

NEW YORK, N. T.

that

.

61 Broadway
WHitehall 3-4000

invest, and the resulting volume
of financial advertising is proof

ex¬

and

nancial

builder for their

as a

good financial section
readers with
money
to

A

attracts

sighted

greater. detail
to.
the
busi¬

STROUD & COMPANY

COMPANY
Pitts. Stock Exch.

publishers seem to un¬
their financial and busi¬

sections

papers.

plaining their
business
in

New York Curb Exch. (Assoc.)

10th Floor, People* Bk. Bldg.

-

not

in

Members
N. Y. Stock Exch.

been

short

Issues

ness

counsel

has

he stated that many

Secondly,
derrate

public rela¬

Trading Department Active in

supplying

corporate information.

with

newspaper

First, that

Quoted

effort

and financial editors in

three

forth

continuing public rela¬
could assist business

how

tions

Press?",; set

Chicago

Bought

York Financial Writers' Forum
in Rockefeller Center, New

Room

Financial

the

Bonds

Philadelphia 2

Boston

Executive

Company,
Relations

PEnnypacker 5-0100
1528 Walnut St.,

dinner meeting of the New

a

Schraftt's

at

York

Incorporated

Bell

or

amounted to

the

At

Grant 3900

1948,
of

net

a

Dunbar &

Bought—Sold—Quoted

CHAPLIN

year

$6.41 per common
preceding year, and

or

share for the

$4,402,705,

common

per

ditionally intangible development
expenditures for the proving and
development of prospective oil

Ind. Pub. Serv. Com.

Direct

$7.54

merly with Cohu & Co. and prior
thereto was an officer of John B.

that it

announces

to

during 1948 to replace and expand
totaled $54,292,000; ad¬

on

-

equal

share, for the calendar
which
compares
with

facilities

in

•

Cork Co. reports a
profit after taxes of $11,567,-

Armstrong

Co.,

with

$4,000,000 general improvement
bonds at a net interest cost of
1.99%.

with

$5.28 per share earned
during 1947. Capital expenditures

March 17 for $6,general public im¬
provement and funding bonds,
its first bond sale since April 1,
1948. At that time the city sold
bids

open

in

1947, and $98,894,858 for 1946.

in 1946.

market

a

$5.47

totaled $160,100,318,
$133,570,590 for

and

compared

net

in

common

with

only in the war year of

ceeded

sales and revenues

per

in 1946. Sales
the second best, being ex¬
$1.48

and

compared to 5.6% in 1947

and 6.95%

Sun

S8.01

compared

share,

1948

in

highest in its history,

equaling

revenues

totaling $95,277,573. The ratio of
earnings to sales was 5.4% in

An

City

the

were

were

as

National Sup¬

Pittsburgh,

Co.,

more

1948,

to

Net earnings of

ply

1947,

resulted from

1948

31,

$16,274,946, againist
current liabilities of $7,172,484.

$106,783,183, and $234,038
than the previous record in
when earnings of $6,599,346

1946

the

Dec.

at

assets

*

amounted

totaled

Richmond Cedar Wks. Com.

New

rent

and net earn¬

sales

when

002.657

Phila. Elec. Co. Common

^Offered

Corp.

for 1948

earnings were the highest in the
company's history, being $830,727
in excess of 1947 earnings of $6,-

which

Merchants Distilling Com.

revenues

ings for the year were $6,833,384,
equivalent to $5.05 per common
share
after
providing for divi¬
dends on the preferred stock. The

Telephone

Philadelphia ef¬
competitive sale
in the capital market of a new is¬
sue
of $44,200,000 of its munici¬
pal
bonds
for sewers, ^streets,
City

sales and

of

President

Iverson,

Ludlum Steel

Allegheny

said

"However,"

year.

.

total

'•

COrtlandt 7-6814

PH 375

*

'

'

County, of which
Pittsburgh is the county seat,
has issued a call for sealed bids
until March 8 on an offering of
Allegheny

The

Samuel K. Phillips
Members

Stroud & Co. and Yarnall & Co.,

terest.

Lorenz
Mesta
firm, "orders on hand fluctuate
periodically, coincident with the
entering of large contracts." Cur¬

$20,000,-

to

up

After deduct¬

earnings and cash from other re¬

pet proceeds are to be used

pay

&

Power

borrow

to

000.

to

$35,000,000, compared to $46,000,000
carried
over '• the
previous

a

approve

the end • of
approximately

at

company

amounted

1948

financing, the amount arid the caught up with demand. Sun's
timing will be made about the record volumd of business brought
middle of this year.
Charles E. record profits for 1948. On a gross
Oakes,
President of the utility operating income of $447,309,191
firm, estimated the total cost of for the corporation and its sub¬
the
four-year
program
at ap- sidiaries, net earnings totaled $42,7
of the four-year program at ap¬
853,839, or $8:61 per share on the
proximately $91,000,000, of which 4,928,5917 full; shares of common
$41,400,000 will be raised through stock outstanding at the year-end,
the sale of new securities.
The or
$9.37 per share on the 4,528,remaining
$59,600,000
will
be 532 full shares outstanding on
taken from cash on hand, retained Dec.
31, 1947, which is comparable

Biddle, Whelen &

Co.,

Pennsylvania

The

decision

of

Co.

&

firm

were

Light Co. of Allentown, which is
expected to be in the market later
this year for funds to help finance

to

asked

be

the

of

Philadelphia, re¬
ported that 1948 was the biggest
year of oil operations in its his¬
stock
totaled
$5,863,067, against
tory and at the same time fore¬
$5,146,731 for the year ended Jan. cast for this? year a return of
31, 1948. It is expected that- the "spirited, wholesome competition''

G.
Le-

Geo.

were:

books.

the

12

The Penn¬

Co., Arthurs,

&

2.90%, according to maturities, and announced at the
close of the day that demand
had made it possible to close

of the com¬

resolution authorizing the Heinz

ing dividends applicable to the
preferred stocks for the 12 months
net
available
for
the
common

participating

bankers

reoffered

be

proceeds will

The

pany's properties in Pittsburgh.
On March 24, the stockholders

0.75 to

with

2~/h% series due 1979, at 101.31%
and accrued interest.

group

securities at prices to yield

1949, net after charges and taxes
amounted to $8,017,932 compared

III.,
$40,000,090 of Duke Power Co. first
and refunding mortgage bonds,

art

of

cost

expenses, provisions for
depreciation and taxes was $5,025,281, equal to $5.02 per share,
compared with $3.03 per share for
the previous year.
Uncompleted
business carried over on the boPks

after all

Co.,

used for expansion

will

Drexel

The

the

For the

writers, headed by Halsey, Stu¬

interest

net

a

people. Net income for the year,

Pittsburgh,
has arranged to borrow $15,000000 from five institutional in¬
vestors at an interest rate of

.

$50,000,000

to

■from $20,000,000;

Laughlin stockholders also will
vote on increasing the authorized
common stock to 3,500,000 shares

PORTSMOUTH

equaled
2.607%.

service

years

industries. At Dec.

31, 1948, the company was owned
by 7,100 shareholders and pro¬
vided
employment
for
3,350

(

2.90%.

50

of

to world-wide

s-t

Heinz

J.

II.

Bank
of New
a
bid
which

City

submitted

York

present; Pitts¬
Consolidation to increase

from

(Special

National

to authorize
of
$25,000,000,

plans

completion

be dissolved.

on

Armstrong

Co., Pittsburgh, as it marked the

will then

City, 111. The latter firm

April 20; Aluminum Co. of$>
to 1999. The bankers paid 100.019
America on April 21; and Jones
for a combination of IV2, 2%, 3
& Laughlin Steel Corp. and Le¬
high Coal & Navigation Co. on and 4% coupons, equal to a net
annual interest cost of 2.577%. |
April 26.
Co.

an

die West.

|

:

firms located in Pennsylvania

The stockholders of five industrial

of the Mesta Machine

the history

the properties, liabilities and
obligations
of
Missouri-Illinois
Furnaces, Inc., a
wholly-owned
subsidiary, which owns a blast
furnace and coke plant at Granite

all

Job G. Sheldon Joins

:

porations release figures and

I

at

regular intervals to the

facts
press

reporting might be found refresh¬
ing

and

readership
ume

likely

would
and

increase

advertising

to the paper

vol¬

that initiates it.

Volume

169

Number 4782

THE

COMMERCIAL

&

UNION CARBIDE AND CARBON
OPERATING

IN

FINANCIAL

CHRONICLE

(967)

11

CORPORATION AND SUBSIDIARIES

UNITED

STATES

AND

CANADA

un:
CONSOLIDATED

IK A LANCE

SHEET

December 31,1948
ASSETS

LIABILITIES

Current Assets

Current Liabilities

Cash

n..:..'.'......!..

United States Government Securities (Cost
Other Marketable Securities (Cost

or

$102,136,913

Market, whichever lower)

or

Accounts Payable

54975,562

Dividend Payable

.

Market, whichever lower)

Accrued Liabilities
Income and Other Taxes.

Trade Notes and Accounts

$ 59,015,301

Other Notes and Accounts

or

Raw Materials and

<

36.204,242

2.70% Promissory Notes

41.627,230

Total Current Assets...:......

126.141.987

;

$631,729,639

for

Contingencies

Capital Stock

301,435,529

330,294,110

Carbon

and

Including 409,947 shares held by the

Corporation
6,288,107

Foreign Subsidiaries

Union Carbide

of

No Par Value-Not
$

6,541,043

Corporation

less)

Affiliated Companies

\

27,877,314 shares

24.046.204

$194,468,771

930,000 shares held by the Corporation

30,334,311

as collateral
under the Stock Purchase Plan for
Em-

Deferred Charges

ployees (See Note 3),

Patents, Trade-Marks,

and

vr<

.-.a

Goodwill

.......

Less present

,4,626,691

'

■

4,44/,538
;

Excess Profits Tax (Canadian
Subsidiaries)

of

32.889.684

28,807,314 shares

etc,.:,..
,

Postwar Refund

Payable December 1, 1967
150,000,000

Reserve

Deduct—Reserves for Depreciation and Amortization

Prepaid Insurance, Taxes,

79,175,620

$124,949,443

(Sec Note 2)

less)

or

8,168,620

$355,989,883

Land, Buildings, Machinery, and Equipment....

Investments (Cost

...i

$ 48.310,515
.

or

337,500

Other Accrued Liabilities

Total Current Liabilities

Finished Goods

.

71,478,260

Market, whichever lower)

Supplies

Fixed Assets (Cost

$ 70,369.500

Interest-

12,462.959

AYork in Process

•

14,403,657

1,257,161

receivables (After Reserve for Doubtful)

Inventories (Cost

31,370,166

January, 1949

>

amount

of

Agreements

32.660.376

•„

,;Wi'■

&

J

1

-

'

A* >

194,698,079^

%

Earned Surplus

1

....

227.358,455

.V

>,•

246,50.3.969

$722,692,534

CONSOLIDATED

INCOME

$722,692,534

AND

SURPLUS

Year Ended December
INCOME

^

441.202.048

STATEMENTS

31, 1948

STATEMENT

SURPLUS

STATEMENT

Income
Earned Surplus
Gross Sales—Less
Other Income

Discounts, Returns, and Allowances

January 1, 1948..,

at

$195,195,110

$631,619,557

(Net)..

'

8,394,899

Additions

$640,014,456

Net Income for the Year

Deductions
Cost of Goods Sold,
trative

Selling, General, and Adminis¬

Expenses

on

57,180.998

,

for the

Year

to

Dividends Declared
52.690.759

$3.55

Financial Statements -1948

operate in the United States and Canada, are consolidated.
Current assets, deferred charges, current liabilities, and income of

exchange. Other assets and

converted at the official rate
liabilities of Canadian subsidiaries
are

consolidated

are converted at the
prevailing rate at^thne of acquisi¬
assumption.
Foreign subsidiary companies, one hundred per cent owned, and
affiliated companies, less than one hundred per cent but not less than
fifty per cent owned, are shown as investments. As-of the date of
latest financial statements, some of which are
unaudited, the Cor¬
poration's equity in the net assets, of these companies exceeded the

tion

or

amount at which these

investments are carried by $13,846,954. The
Corporation's equity in the net assets of these companies increased
Y $3,558,412 between January 1, 1938 (or date of acquisition, whichever
is later), and; the date of latest financial statements. :Of this
increase,
$3,220,387 is applicable to .the current period.
;
1
;
Income includes dividends paid by foreign subsidiaries and affili¬
ated companies out of surplus earned since date of acquisition.
.

i

i.

.

Earned Surplus

122,050

-

2—Promissory Notes provide for annual payments; of principal in
the amount of .$10,000,000
beginning on December h 1953,
3—During 19-18 the Corporation entered into Agreements with 318
employees, including 6 directors, all of whom devotte their full time
to the Corporation, and 5. officers who are not
directors, covering

shares of

Employees

1940.

-

?.

~

•

pftest-o-llte Acetylene

Preston e-and Trek Ami-Ffeeaes"-




Pykofax Gas
*

December 31, 1918

its

rate of two per cent per annum will be
paid on the unpaid balance.
The Board of Directors may take such action from time to
time with
respect to extension of time of payment as in the discretion of the
Board is in the best interest of the

Corporation, Stock covered by the
Agreements is pledged by the participating employees as collateral
security for payment. Shares in blocks of 25 are released from the
pledge to the participants as payment therefor is completed. Each
participant has also agreed to apply against the unpaid balance the
amount, if any, by which the dividends
paid to him on the pledged
shares exceed .the interest. The Plan

provides thai if a participant
Corporation will offer, for a period of six months follow¬
ing his death, to repurchase the unpaid-for shares at the
price to be
paid by the participant..After giving effect to the tliree-for-one stock
split on April 21, 1948, the shares covered by Agreements entered
into since the adoption"of the Plan in 1946
aggregate 973.950 shares
shall die the

of which 930.000 shares are held

by the Corporation

as

collateral.

4—No final settlement of the refund to the
Government for the year
1945 under
the-Renegotiation Act has been made. In 1947 the Accrued
Provision for Wartime Adjustments was

charged with $271,190.

resenting the estimated cash refund

*

additional

as

to the Government.

Should

•

required

upon

settlement

it

will

Electromet Alloys and Metals.

*

•

be

Carbon

Corporation lias agreed to maintain
the assets held by the Trustee of the
Savings Plan for Employees in
an amount sufficient to
permit the distribution of the Trust Estate

to the persons entitled, thereto.

AUDITORS'
•

TO

REPORT

DIRECTORS AND STOCKHOLDERS OF

UNION

CARBIDE AND CARBON

CORPORATION:

We have examined the balance sheet of Union
Carbide and Carbon

Corporation and its

hundred per cent owned subsidiaries oper¬
ating in the United States and Canada, as of December 31, 1918, and
one

the related statements of income and
surplus for the year then ended.
Our examination was made in accordance with

generally accepted
auditing standards, and accordingly included such tests of the ac¬
counting records and such other auditing procedures as we consid¬
ered necessary in,the circumstances.
Jn our opinion, the

"*

accompanying balance sheet.and statements
surplus present fairly the financial position of Union
Carbide and Carbon Corporation and its subsidiaries consolidated
at
of income and

December 31, 1918, and the results of its consolidated
operations for
the year then ended, in
conformity with generally accepted account¬

ing principles apfilied

on a

basis consistent with that of the preceding

year.

HURDMAN AND CRANSTOUN

rep¬
an

final

for Contingencies.

5—Union Carbide and

New York, N. Y.,

February 20, 19

to

Certified Public Accountants

of Divisions and Units of UCC include-

Bakelite, Krene, Vinyon; and vinylite Plasties

Agiieson Electrodes *V

be

amount

$246,503,969

;

;

charged to the Reserve

The Agreements set forth

Trade-marked Products
Linpe Oxygen

at

capital stock under the Stock Purchase Plan
approved and authorized by the stockholders in..,
a price of $104.50 per share, which
was
the closing quotation on the New York Stock
Exchange on
the date preceding the offering. Under the terms
of the Plan' the
price or prices; shall be such price or prices as shall be fixed
by the
Board of Directors in its discretion, but not lower than
seventy-five
per cent of the market price. The Agreements provide that each
par¬
ticipant has five years to complete payment, and that interest at the

for

1—The principles used in preparing the
accompanying CotisoJidated
statements for the year 1948 are as follows:
All subsidiary companies that are one hundred
per cent owned, and

Canadian subsidiaries consolidated

$299,194,728

Deductions

$102,335,053

ing December 3.1, 1948.....,,......,.......;.................

Notes Relating

103,999,3,18

537,679.403

Net Income Per Share—On 28,807,314 shares outstand¬

of

1,648,144

............

Income Taxes

Net Income

11,375

Cancellation of Deferred Liabilities Under
Government
Contracts
,>
:.

4,050,000

,

4,746

the year

21.742.995

........

2.70% Promissory Notes

$102,335,053
at

Reduction of Valuation Reserve—Securities
sold during

$454,705,410

Depreciation and Depletion
Interest

Increase in Market Value of Marketable
Securities
December 31, 1948

National Carbons

TJaynes Stellite Alloys

-

*

•

eveready

Flashlights and Batteries

Synthetic Organic Chemicals

12

Thursday, March 3, 1949

CHRONICLE

FINANCIAL

&

COMMERCIAL

THE

(968)

Floyd D. Gerf Jr. Go.

Public

Cerf,

D.

Floyd

By OWEN ELY

Director

Power,

securities firm

with total assets of about

with offices at
120 South La-

the

i

w

h i

requirements through hydrogeneration and only 8% from steam, but was forced in 1947 to use
steam plants to supply 25% of output, thereby reducing net income.
During the years 1943-47 earnings fluctuated between $1.34 and $1.45.
The number of common shares was increased nearly 30% in 1946
through issuance of rights, and the company is now again offering
rights on a l-for-6 basis. Further stock financing may be under¬
taken later in the year, in order to balance bond financing.
85%

its

of

England Public Service Company, a holding company

New

in

of dissolution, owns a substantial part of the stock, which
will probably be distributed when a dissolution plan is worked out.
NEPSCO will not subscribe to the stock to which the current rights
would entitle it.

compared with
$1.35 in 1947. The company was successful in obtaining a rate in¬
crease from the Maine Commission, and has also increased the use
of fuel adjustment clauses in its industrial rate structure.
Water
conditions are now more favorable, and the new unit at the Shelton
hydro station will improve the outlook for 1949. Moreover, the Dead
River Project—creating a lake 26 miles long—will impound nearly
12 billion cubic feet of water and add to the existing storage in the
Kennebec River; thus; helping to stabilize hydro operations iin the
to $1.49 per share

1948 advanced

in

Earnings

event of future droughts.

"

*

f

<M

vestment
business

cial i zi

spe¬

n

in

g

and

industrial

i t i

c u r

power

process

*

in the

chemical

produced

e

se-

is

s,

Floyd D. Cerf,
Floyd

Jr., Co., Inc.

Cerf, Jr.

D.

C
i

n

g

his

nrf ment-

o

establishment
of
company
at this time,
the

on
own

Mr.

Cerf, Jr., who will serve as
and Treasurer,
stated
that in his opinion ownership of
common
stocks of many Ameri¬
can
corporations affords an ex¬
President

cellent

opportunity for profitable

participation in the gains result¬
ing from scientific research and
development. He said: ;
"The

industrial

leading

chemical

corporations

and

annually in research and develop¬
ment

of

such

discoveries

as

pen¬

1949):
Dec.

Dec.

March 31,

31,

31,

radar

lophane,

20
28

30

stocks

100%

__—

Formation of the

previously

.

.100%

.

•

$1,400,000 increased revenues per annum, plus any benefits
obtained from the additional fuel clauses during periods of low water

about

not

The

stock is currently

selling around 16

over-counter, to yield

1948

Low

May,

1946

30-cent
record

have

been

paid

at

15%

the

of,

George
terer, Hornblower & Weeks, Secretary,

James Russell, Gottron, Russell & Co.; Mr. Opdyke, and
Quigley, Quigley & Co., Inc., are National Committeemen,
NATIONAL

dividend will

new

of Feb

firm

the

Na¬
appointment of

Chicago, President of the

Association, announces the
following National Committee Chairmen:
Traders

Security

5 0 Y

Harold

B.

Jay

Smith

L.

Phillip

Quigley

P.

Jackson

was

the

in

reported
10.

be

19%

,

issued.

to' The

(Special

Financial' Chronicle)

PASADENA, CAL.—F. Thomas

Kemp has become associated with
Cosgrove & Co., 234 East
Colorado Street.
Mr. Kemp was

son

&

Prior

thereto

own

Curtis.

The current

to

The

Leydecker

ciated

with

has

Harold B. Smith, Pershing & Co., New York.
J. L. Quigley,

San Francisco.

Financial

SAN FRANCISCO,

O.

O'Kane, Jr.

Quigley & Co., Cleveland.
Phillip P. Jackson, Jackson & Smith, Gastonia, N. C,
Municipal: Russell M. Ergood, Jr., Stroud & Co., Philadelphia.
Public Relations:
Collins L. Macrae, Jr., Wulff, Hansen & Co.,
Publicity:

(Special

J.

Membership:

he

business in Pasadena.

John

Collins L. Macrae, Jr.

Jr.

Ergood,

Legislative:

investment

his

conducted

M.

Advertising:

previously with Edgerton, Wykoff
& Co. and Paine, Webber, Jack¬

since

paid March 31, to holders of.

R.

Jones,

Leydecker With
Walston, Hoffman Co.

24y4

-v.,v

March 21.

SECURITY TRADERS ASSOCIATION

Edward H. Welch of Sincere & Co.,
tional

J. L.

of

many

T. 0.

1946

>

annual rate of $1.20

when the stock was first publicly

quarterly

projected 1949
since the stock

23%

uy2

•

1947

19%

- —

Dividends

the rate base

The rate of return on

7%%; the price-earnings ratio is about 11 but on the
earnings would approximate 9 times. The price range
came into the hands of the public was as follows:

High

Co.,

Vice-President;
F. Opdyke, Ledogar-Horner Co., Treasurer; and Don W. Plas¬

Kemp Joins
Jones, Gosgrove & Go.

t—1 o o

Average electric revenues per residential customer in 1948 were
3.68 cents per kwhi. and residential usage averaged 1*260 kwh.
The
rate increases received in August, 1948 were expected to produce

does

Wm. J. Mericka &

F. Thomas

____

industrial demand.
appear excessive.

Don W. Plasterer

Opdyke

19

26

_

and heavy

F.

television,
propulsion.

and

atomic energy and j et

"Chronicle"

52%

22

Bonds

Totals

George

Carl H. Doerge,

51%

52%

—_____

are

icillin, streptomyacin, nylon, cel¬

"Common

1949

1949

1948

Ratios—

Equity

the club

Inc., President; George Placky, L. J. Schultz & Co.,

balance for common these companies, which undoubt¬
.stock was $2,784,000, equivalent to $1.41 per share on the increased edly will produce even more spec¬
number of shares (1,976,911) td'be outstanding by March 31; and for tacular products and services .in
the month of January, earnings were 22 cents per share compared the immediate" future, are avail¬
with only 5 cents last year. The management estimates potential able to investors today on a rela¬
tively low times-earnings basis
share earnings of $1.79 for the calendar year 1949. -(This does not,
however, make allowance for another possible increase in common and an excellent dividend yield.'1
shares which might occur later in 1949.) A projection has also been
Mr. Cerf, Jr. entered the in¬
made for 1950, indicating an increase in the balance for common stock vestment securities field in 1935
to $3,800,000 compared with $3,547,000 estimated for 1949. However,
upon
graduation from the Uni¬
since the management may continue its practice of selling common versity of Illinois and has been
stock along with bonds, it is difficult to work out a per share figure on
La Salle
Street
continuously,
for 1950. In any event, the $1.20 dividend rate now seems to be well
with the exception of four years
in the Coast Guard, during which
protected even under drought conditions.
I; Capitalization rations have been estimated as follows (the 1949 time he saw active service in the
figures reflect two stages in the company's financing, $5 million bonds European Theatre as a Lieutenant
and 286.496 shares of common stock to be issued in March, and $3 j.g. He participated in the D-Day
million bonds and about $4 million worth of common stock late in invasion of the continent.

_

George Placky

Doerge

Officers of

spend¬

are

ing hundreds of millions of dollars

H.

Carl

31, 1949, the

In the 12 months ended Jan,

Preferred Stock

hold their an¬

Hotel.

general in-

conditions

1945

on

h will

c

March 15 at the Allerton

or-

t i

z a

engage

The company wa$ handicaped in 1947-48 by drought
which for some months were the worst in 110 years. The company

•

new

g a n

nual spring party on

of

name

ASSOCIATION

Security Traders Association will

Cleveland

The

Salle Street.
The

SECURITY TRADERS

CLEVELAND

"

ucts.

in

of

opening of his own investment

the

$123 million,
serves the
central, southern and western parts of Maine, with a
population of 560,000 and some 262 cities and towns. Industries served
are
as follows in
order of electric sales: pulp and paper, textiles,
shipbuilding, metal trades, lumber and woodworking, boots and shoes.
Agriculture and the resort business are also important. While there
is a general impression
that New England is losing ground with
respect to manufacturing, in 1937, 25 new industries located in the
area served
by the company,.-The trend toward decentralization of
industry has brought additional large national concerns into Maine
for branch operations and development of new products. New meth¬
ods of food processing, etc., have helped to diversify industrial prod¬
Maine

formerly

Jr.,

Vice-President

and

Floyd D. Cerf Co., Inc., announces

Central Maine Power
Central

ft

Opens in Chicago

Utility Securities

John J. O'Kane, Jr., John J. O'Kane, Jr., & Co., N. Y. C.

SECURITY TRADERS ASSOCIATION OF NEW YORK
The first

of

series of forums being sponsored by the Security

a

Traders Association

of New York will be held Friday. March

Schwartz's Restaurant, 54 Broad Street (third

Chronicle)

11, at

floor).'The subject of

CAL.—Theo

become

asso¬

Walston, Hoffman

&

Co., 265 Montgomery Street, mem¬
bers of the New York and San
Francisco

Stock

Exchanges.

Mr.

in the past was an
Stephenson, Leydecker
Co. of Oakland.
»'
'•

Leydecker
officer

Central Maine Power Co.

&

of

•

Col. Otto Miller Retiring

Common Stock

From Investment Business
Prospectus available to Dealers and

Banks

Col.

Otto

Miller, Cleveland in¬

vestment

G. A. Saxton & Co., Inc.
Teletype

70 PINE ST., N.

Y. 5




•

*

in

the

securities

business in

L.

first

WHitehall 4-4970

the

later in 1903 established the
firm of "Tlayden. Miller & Co. with

Market."

years

Warren S.

Hayden.

E.

R. Victor

Walker

Mosley

1899

with Lamprecht Brothers and four

NY 1-609
~

banker, is retiring at the
age of 75 after more than 45 years
in business.
He began his career

forum

will

be

"New

Speakers will be L. E.

Index for Oldest Securities
Walker, President of the National

Price

Quotations Bureau, and R. Victor Mosley, Stroud & Co.,
delphia, past President of the National Security Traders

Inc., Phila¬
Association.

Volume

169

Number

4782

THE

COMMERCIAL

Similar talks in Chicago and Philadelphia have been most successful.
The long histories of local industrials
going back over the years
and the size of many over-the-counter idustrial
companies is a sur¬

which I have talked with

one, one company having assets of over $200 million.
Ail members of STANY, their
partners, and salesmen are invited
It is felt that the talks will be
particularly

attend.

and

interesting

instructive to salesmen.

brochure

All

the over-the-counter

on

those

who

attend

will

be

given

a

Francisco Security Traders Association

will hold

their

'The Twin City

Security Traders Association will hold their an¬
nual summer
outing June 4-5 at a northern Minnesota summer resort.
Cars will leave Minneapolis about 3:00
p.m. June 3 for a weekend ol
fishing, golf and other entertainment.

Business and the Reading Public
By EDGAR G. BOWERFIND*

writing is

news

financial

pages

develop

can

It

would

enlighten

In these

space

far

greater

if

the

business

and

from the financial pages

av/ay

sarily treat tbe sorics differently ^*
more

you

deal

with

tant

of the

one

segments

in

tials

our

away

civilization,
to

our

of

all

nonessen¬

business

and

livelihood.

our

to language, financial matters can be
impor¬ treated in a similar way.
society —
I have some slight
familiarity

another, depend

or

commerce

if

or,

for

either

We

earn

some

form

living directly in
business

we

are

of

one

those fortunate few

(and they are
decreasing In number), our living
comes

ings
I

of

business.
to

business.

on

has

if

little

always

the

stories

stories

say

were

that

from

is

the

police beat, we might have more
of them and
they could be equally

interesting.
When you call

the roll,

even

who have

reasonably funda¬
mental knowledge of what makes
business

Any
view

tick.

reporter

are

interest

able to add that spice
which comes from a

thorough
grounding
ground in business.
So, while I
be

desirable

columns

is,

I

these

have

on

extra

5, in
business,
possible to write

believe,

financial

even

that it would

agree

to

news

It

was

that

only

or

that

so

few

a

it

matter

a

years

ago

fact

of

one

early writers in this field

of

was

one-time newspaper associate of
mine. He has built up a very large

a

following and does it not by writ¬
ing of scientific accomplishments
achievements in scientific lan¬

or

guage

in

or

discoveries

in

describing
the

medical

technical

lan¬

lay person:
This reporter is not unique in the

in

all have science writ¬

You

who have developed great skill

making the obscure interesting.
Science

Has

So it would
a

scientific

or

Been
seem

the

of

talk

fore

Writers'

1949.

.

,

financial

and '

prbdnction

the

and

it's

not

make

need

of

(Special

more

up

today

little

of

me

Co.,

business

business

think

—

become

Sutter

for

Hutton

thereto

Street.

He

many
years
&
Co. and

with

Mitchum,

was

with

prior

Tully

&

(Special

to

The

Seligmann

Financial

Chronicle)

moment at

a

MILWAUKEE, WIS.—Harold E.
Detzer has rejoined Seligmann &
Co., 735 North Water Street.
Mr.

Detzer

has

recently

been

with

Bell & Farrell. Inc.

important

big

play a

within

found

Albert H. Bickmore Dead.
Albert

the

radius.

same

is consolidated

be

Ill
F.

national welfare whose

will

CAL.

has

Co.

industry you

who

Chronicle)

this

the

of

people

our

Schaeier

G.

formerly
E.

night's ride of New

a

Think

York.

Financial

Detzer With

Look for

have within

The

associated with William R. Staats

suggest to this group

that you think seriously about

procedure.

with

was

which

stories

the concentration of

he

FRANCISCO,

Charles

cen¬

buried.

are

So let

lot

a

to

SAN

business knowledge but you'd

your

thereto

With William R. Staats Co.

point to

a

Prior

Webber, Jackson & Curtis in
Chicago.

people, I'll lay you dollars to
doughnuts, you'd not only expand

H.

Bickmore,

head*, of

A. H. Bickmore & Co., New York

City, died at the

of 79.

age

•

?

me

that if

discovery

York

Association,
-




Financial

M

a r

ch

1,

Subsidiary Companies

ASSETS

That's
And

while

U.

S.

well

to

have.

it

from

remember

stockholders

numbered

in

the

t h

today

millions.

there

result

business

ades

is

—

Market

millions

____

Add:

Non-Operating Income:

$21,219,903

Dividends and

Profit

and

financial

1949

news

few

a

of these

Payable

Dividend

for

Reserved

Cash

(Contra)——

January

40,078

5 1,111,boa

$26,440,178
Deduct:

185,564

Cost $

Oil

Stock Held bv Subsidiary
Owned, at Par—(4,500 Shares

Company

Company Not Wholly

1948)—(4,800 Shares

in

in

search

Profit

Fixed

and

audience

for

Reserve

26,87.9,617

Depreciation-—.—

Deduct:

capitalists,

and

Oil

Leaseholds,

Gas

.

Developed

and

Unde¬

and

imagination

fraction

$29,348,473
Deferred

Charges

Prepaid

There is

no

should

Advances,

Expenses,

etc

247,826

—

—■—

—

the

of

Accounts

in

not

same

-

to

with

Accrued

Taxes, State and Federal

Total

Dividend

business

:

•

•

v

"

12,

S

—

1949

(Contra)

ment is worth

third

to

Ended .Dec. 31,

1948,

13,473,629

Paid—$2.50 per

Payable

share

January

.50 per share

12,

$5,558,268
1949—
1.111.653

—

8,580,307

Portion

Less:

Subsidiary

ol

Dividends

paid

to

Company—________

10,504

-j

Capital

Stock

—

6,659,417
$

—__

_l.

28,664.;

Income Retained

in

Business

December

31, 1948_

$27,113,301

22,041

:

—

Net

$

Capital Surplus

50,705
Capital

STOCKHOLDERS' INVESTMENT

Shares .Authorized

culti¬

with

,i

(4,000,000

to

_______

2,258,779 sh.

__

Held in

Treasury Dec. 31,

1948____l_

Treasury Dec.

1947____i.

35.472

in

31,

31,

1943—

Outstanding Dec.

sports,

Dec.

31,

1947

Capital Surplus
Oil

$ 4,154,519

-

/:'

realization

dall

>

Oil

over

Company

subsidiary

v

;—$

Company

cess

sh.^v

2,223,307 sh.

_

I947-.

*

.

35,472 sh."

Held

Outstanding

31,

-

/

Realization of Assets previously charged
Barnsdall

>

habits

...

December

Add:

i:

Issued

Surplus,

not

portion
par

stock

of

of

1,642

ex¬

Barns¬

sold

by

a

wholly owned

10,857

$11,116,535

12,499

2,223,307 sh.
$

Capital Surplus

,

and

readers

seems

the Year

Minority Interest in Subsidiary Company:

financial

Net

Incdme

ber

4,163,424

Retained

31, 1940

in

the

___

Business

Since

____________________

to

a

me

.

one

Investments

news¬

the experi¬

trying.
idea., is

Stockholders'

^

about

Barnsdall

27,113,301

.

Total

Liabilities

and

Stockholders'

Investment--

$42,393,260
$52,135,925"-

4,167,018

$

4.163,424

Deduct:

Decem¬

cess

Oil

cost

<

Company

over

not

Total

of

Income for

$

1,111,653

section, simply written, might at¬
lot

$20,299,089

3,988,676

Liabilities

Current

Payable January
V

they cul¬

books.

1940

$6,669,921

business

connection

31,

'

Dividend

get

the

.The

the Business

from.. Dec.

194X__

■.

Dividends

$ 4,489,155
102,476

Capital Stock, Par Value $5.00 per Shard

readership

connection

1,

Business

a news¬

attempt

and financial section that

or

Jan.

in

Deduct:

—

Expenses.

Surplus

why

reason

business' life.

It

3,764,072
$13,473,629

$33,772,718

Payable

Accrued

ingenuity
promoting

Certainly-readers would

paper.

Tax.

$52,135.923

Current Liabilities:

which tells, the story of the

good

Income Retained

to

readers for that part of the

a

Income

Ycar__

Net Income Retained in
Net

Operations:

to

Net

readership for their financial
that they use in promoting
readership for, let us say, thensports section, it would also be
a great help.
" '
-

A

the

LIABILITIES

pages

in

Federal

for

*

veloped

and

.Add:

a

tivate

for

Income

Net

word

only

in

5,649

$17,237,701

$29,343,472

newspapers would devote

the

4,865,219

Minority.—..

$56,223,089

at Cost___

I

brings me to the next
point of my thesis. If the people

vate

2,612,800
to

9,202,477

Equipment,

Promoting Readership

nation's

Re¬

Assets:

Plant

dec¬

Total Assets——.±~~

run

Geophysical

Expense

Applicable

Provision

of

and

Intangible Development Cost?

22,500

$

1947)—_______

1,697,339

,

Purchases

21.470

$

;

_

Depreciation
Lease

Barnsdall

pages.

paper

55.700

(15,022)

12,

—

—-

Investments in Securities of Other Companies, at

Less:

instead

the

paper

Interest

(Loss) on Sale Capital Assets

Interest

"capitalists" ad¬
visedly, do not follow the finan¬

who

2,036,162

$26,400,100

1,166,267

Assets

Current

Total

say
"potential audience"
because it's obvious that literally

cial

Market—.

at

Products,

Oil

939,624
343,520

at Market-—

Oil,

Supplies, etc., at lesser of Cost or

ago.

use

$8,714,042

General

Taxes,

audience

an

unknown

was

Perhaps

I

-

I-

'

Costs, Operating and General Expense

Fifty

ago that was not the case
today many companies have
more stockholders than
employees.

which

"UV

T:•

4i

5,925,478

Receivable

Crude

but

for

"T~T

i.».

.

v

Operating Charges:

271,868
3,517,000

1

a

are

years

a

$37,150,304

_^__

'

—

r.:.

an

American

As

s w"

Y^pr Ended December 31, 1948

Income
*

Deduct:

Income Statement

10.750,204

we

interesting experiment
to work toward the same end we
do, only on a broader scale.
It's

Operating

,

Notes, at Cost-—

Treasury Tax

Accounts

partisan viewpoint which you
cannot, I still think that you would
it

••;

Securities, at Cost——

S. Government

U.

a

find

•••••;•

the

Inventories:

jobs

approach

we

u ,v x-

a-~~---

cash

<

of the

one

For

V>
Gross

Current Assets:

profit and why
for a business to

profit.

Consolidated

31, 1948

Consolidated Balance Sheet—December

of

unholy

a

drama

Simplified
to

medical

New

Co.

Paine.

around and visit and talk to

and

particularly financial.
They're trying to explain profit

by Mr. Bowerfind be¬

the

it

just made

530

Coradine

BARNSDALL OIL COMPANY

problems,

tract
*A

in the country

ness

by
that 1
writing down — the
story of the companies for which
they work. They're trying to ex¬
plain to the employees, something

understandable to the

ers

and

Mr.

mean

more

the profession, but rather
by translating the technical words
into words which are simple and

guage of

field.

ters
roam

Street.

previously with Gross, Rogers
Co. and Carter H.
Corbrey &

&

If you went to Pitts¬

industrial

j'''

Chronicle)

CALIF.—Reese
Co.,

of

part

our

Iwnancial

was

many

desirability

midwestern

other

their bosses, seemed part in
offices
the idea that all the busi¬

to have

the

The

West Sixth

per¬

burgh, Cleveland, Detroit, Cincin¬
nati, Chicago and two or three

largely

Which

began
dealing
seriously with science and medi¬
As

it's

good

a

pecting trip out into

and month after

about

to

about

the country.

found they are

writing

month,

through

a week or so at regular
intervals and just making a pros¬

stories pick

They or their bosses, and I

not

taking off

they

a

know

to

T. Coradine has become
associated
with Oscar F. Kraft &

you

telephone calls, but

talked

writers

language—and

don't

is

newspapers

cine.

to

me

should
or

I've

As I talked to some

week after week

should

interesting and informative.

the

nary

back¬

and

page 2, 3, 4,
to tell a story of

which
it

inter¬

can

company official and come
with
a
"factual story, but

back

led

trying to do is to inter¬
pret business to employees. They
are
trying to tell in plain, ordi¬

a

too few
of

a

good

then,

work are

of

metropolitan papers, you find rel¬
atively few skilled business writ¬
ers

first

that

whom

people

They should know you.
That's equally important.

operate.

me

(Special

LOS ANGELES.

with this subject because one of
the things that men in my line of

same

importance

business

on

placed

It

that

me

of

measure

placed

in

devote

newspapers

seemed

earn¬

the

always felt that all but

to

space

result

investments

on

have

few

a

the

as

English

space

from our modern-day
we find that all of us,

degree

one

upon

strip

you

to

occurred

There

most

namely, business.
When

be translated into the

can

one

seen

never

It

of these writers I

days of short paper stock, however, that might require
I think it's a good idea not because you mignt neces¬

in tne two parts of the
paper but
it would give

had

broader field.

bit of selling.

a

I

River.

13

R. T. Coradine Joins Staff
Of Oscar F. Kraft & Co.

lot of business

sonally.

tied to their desks in New York

operation

newspaper

writers were allocated

when

amazed

was

That,

readership.
financial

Know Business

talking to business and financial
writers, to find out how few of
them knew very much about steelmaking, beyond what they had
read
or
gotten
second - handed
from steel people.
I was amazed
to find that many of tnem had
never been in a steel plant.
They
had seen pictures of a blast fur¬
nace
and open hearth but they

neces¬

to make business and finance understandable to general public.

newspapers'

writers

might perhaps write better
about steel if they knew
about the steel business.

Public Relations Director, Republic Steel Co.

Steel company official holds humanizing of

Should

matter of fact,

a
a

lot of big and important
people west of the Hud¬

,a

son—business

tation of facts about steel.

Reporters

As

There is

the Hudson

business

coming to New York at
reasonably regular intervals and

outing May 14-15 at the Mount Diablo Country Club.

Maintains

is

I

TWIN CITY SECURITY TRADERS ASSOCIATION

sary

are

know, I am with Repub¬

Steel Corp. My great interest
steel and the proper interpre¬

started

SAN FRANCISCO SECURITY TRADERS
ASSOCIATION
annual

As you

isn't.

west of

letters

Forum Committee of STANY.

San

it

ers—in

lic

(969)

in New York.

great

a

market.

Henry Oetjen, McGinnis, Bampton & Sellger, is Chairman of the

The

CHRONICLE

business and financial writ¬
New York particularly. ;

many

prising
to

FINANCIAL

&

wholly
purchased

Capital Surplus,

par

owned

por'ion

to

of

i—

-a

its

of ex¬

subsidiary
own

stock

3,594

.

December 31,.. 1948

14

Thursday, March 3, 1949

FINANCIAL CHRONICLE

&

COMMERCIAL

THE

(970)

TO

LETTER,

EDITOR:

THE

Halsey, Stuart Offer

Bank and Insurance Stocks

Halsey,
By H. E. JOHNSON

fered

Worcester Gas Light Co.
sinking fund 3%%

the uncertainties surrounding the

business and political outlook have

increased.

Bonds, Series A, due Feb. 1, 1969
at 101.47% and accruedi interest.
The firm

months there has been a growing number
of indications that the postwar business boom as well as the accom¬
panying inflationary pressures were leveling out. Readjustments in
the past several

For

prices and production have become more numerous as the pipelines
filled and inventories mounted.
Unemployment has increased as
output has eased from the previous high

Actually
Federal

present

the

Board

Reserve

level

Indbx

level.

of business
of Industrial

is still very high. The
Production for January

just released last week was put at 191% of the 1935-1939
average. This was only down one percentage point from the previous
month and compared with the postwar high of 195 marked last Octo¬
of this year

ber and November.

However, January was over
the moment

at

cern

a

month ago and the principal con¬
since that time and the

has happened

is what

in your issue of
17, 1949 will produce considerable comment, I for one would
like, to get in my thoughts. Major Angas has again brought to light
his interesting and independent thinking.
There are far too few of
Anticipating that the article by Major Angas

immediately

payment of outstanding notes
amount,
thereby termi¬

the

that

in

Feb.

proceeds, $750,000
be applied > to

net

the

Of

will

a

1954; $250,000 will be applied

due

the

to

rect,

of

payment

short-term

a

promissory note to the First Na¬
tional Bank of Boston; and the

should

Everyone

answer.

and

read

ponder

on

his article.

Is it not almost

Series A Bonds,

of first mortgage

take the facts of life ^

can

put them together in another way
and come out with a new, but cor¬

to retirement

be applied

will

000

who

■us

loan agreement existing,
since Dec. 11, 1947 with the First
National Bank of Boston; $1,000,nating

Chronicle":

Editor, "The Commercial and Financial

awarded the bonds

was

its bid of 100.517.

on

Angas for

Citing recent market history, reader commend* Major
citing misguided mass psychology.

first mortgage

particularly since the first of the year

Since last November and

& Co. Inc. of¬
public March 2 $2,-

Stuart
the

to

150,000

This Week—Bank Stocks

uYes, the Market Public
Is Always Wrong"

Worcester Gas Lt. Eds,

that

always the truth
public is always wrong?

the

—

stocks. This group only ap¬
preciated 100 times in the same
period.
Major Angas says: "A charming'
living delicatessen—this over-in¬
fested
canyon
of
Wall Street;

pany

the buck; passing the
correct that them that Passing
Do not the leaders al¬ stock; finding some hick to hold
the sinking baby."
Well, seems
ways come out on top?
Yes, they
like as if we, had found the hicks
always do.
And they do so by
all right.
How about the Invest¬
being ahead of the herd.
it

Is

not

has gits?

balance, with funds from work-^
ing capital, will be repaid to the
the current
ment Trusts,
Mutual Funds and
company's
plant
replacement
We don't have to go back many
situation is.
For this purpose weekly department store sales are
Managed Funds. Seems as if they
fund.
'
years to see how well the unor¬ are always willing to buy them
useful. While they are but one factor in the total business picture,
The bonds will be redeemable
thodox have1 dbne. In 1938 and when
retail sales and the trend they indicate are a good general indication
they look good, earnings-ar'e
at
general prices ranging from- 1939 most railroads. were in re¬
of what is happening in the economy. First of all they reflect pur¬
high and they are at the top. The
104.47% to 100% and at sinking
ceivership and their bonds selling trees
chasing power in the hands of consumers and their willingness to fund
nev^r grow to the skies and
redemption
prices scaled for 20 cents on the dollar. The
it always has worked out well to
spend. Second, they indicate how goods are moving through distri¬
from 101.43% starting on Feb. 1,
indicated.

trend

important to get some idea of what

it is

Therefore

orthodox

channels.

bution

disappointing December and only a fair January which
was aided considerably by promotional
efforts, department stores
sales in February were down considerably.
The decline continued
throughout the month of February and for the four weeks ended
After

1950 to 100% on Feb.

a

Saturday sales of New York department stores were approxi¬
mately 5% below a year ago.
On this basis the present outlook may not be considered too
last

favorable.

When

viewed

along with such other indices as

declines

1, 1968.

sell

pally in the production, distribu¬
either direct¬

those

ly or by sale to its associate com¬

the

tion and sale of gas

Marlborough-Hudson Gas
Co., Milford Gas Light Co. and
Dedham and Hyde Park Gas Co.

panies,

communities in central and

26

prices, a further slackening in busi¬ eastern Massachusetts, having an
ness activity is indicated.
The major uncertainty at the present time approximate year-round popula¬
would seem to be not so much, whether, but how far the decline tion
of
425,000.
The
territory
in carloadings and lower scrap

r".

'\-.o

will go.

Some
people see in the present situation a similarity between previous
periods of declining business—1920 and 1937. From this they project
a decline of major proportions.
Others believe that the decline*has
already ran its course and that from here on there will be a period
of only minor adjustments.1 t
< V <
"
•
* *(4
Still others, principally those prominent in the Administration,
believe that the major concern at this time is still inflation and that
the present declines in business activity are temporary which will
later be effected by a resurgence of inflationary pressures.
,As usual there is

a

difference of opinion on this question.

Worcester and

cities

the

includes

served

intention to attempt to resolve these differ¬
opinion, I believe that some of the recent statements by
Administration officials have been inspired for political reasons in
While it is not my
of

ences

of

Framingham.

on

an

controls.

effort to impose the Truman program of

Certainly, it is not possible nor in many ways desirable to main¬
tain the high rate of business of the past year. Possibly the readjust¬
ment is to a lower but more secure level.
:
If such is

business

as

the case, it may be

well

considerations

one

Even if such controls

month

the part of governmental

This opinion

additional restraints for

though

we

From this point of

level, one

in the form of
active in

credit by

can

in which he indicated • that the

eventual relaxation of credit restraints

an

reducing required reserves.

The monetary authorities

using this power last year to restrict the

increasing

expansion of

at New York and Chicago banks three

reserves

points each time.

to

Co.

Power

March 1,

1979 at 102.75% and ac¬
The

interest.

crued

awarded

bonds

the

group-

on

was

its bid cf

102.20%.

the

sale

of

the

provide part
required to
construction

100% and for the sinking fund at

from

ranging

100%.

The

company

102.75%

to

'

their original pur¬
But the unorthodox
Public'Utility Holding Com¬

is engaged prin¬

in supplying electric en¬
in west central Wisconsin
in continguous territory in

ergy

and

of

its gross

1948

derived

was

from

the

sale

electricity, 10% from the sale
of gas and 3% from heat and other
miscellaneous services. Among the
large communities

served by the

LaCrosse, Eau Claire
Chippewa Fails in Wisconsin
Winona and Red Wing in

In

"In

year's
report,"
states,
"we
noted

last
■

year.
"In

our

in¬

the

business

own

in debt financing was par¬

Meetings

marked.

ticularly

to

bonds,

or

authorize

mortgages,
debentures
were
10
with

only

sistance

compared

1947.

in

3

ized

in

in 1948.
author¬
compared with

greater

far

was

Additional

common

two

cases

in both instances

the

for

of conversion

purpose

of

in the

offering are:

Merle-Smith;

Otis

Co.*

(Inc.); Wm. E. Pollock & Co., Inc.;
Auchincloss, Parker & Redpath

BANK and INSURANCE STOCKS

and Laird,

Bissell & Meeds.

stockholders to

ferred

restrictions

modify

additional debt

or

BANK

remove

or

permit

to

preferred stock

NEW YORK 5' /

BOSTON 7

10 Post

67

Office Square

CHICAGO 4

generally rec¬
ognized as unsound, has come to
be regarded as a necessary evil in

INSURANCE

221 S. La Salle Street

Wall Street

HUbbard 2-0650

WHitehall 3-0782

BS-297

CG-105

LOS ANGELES 14

STOCKS

FRanklin 2-7535

NY 1-2875

SAN FRANCISCO 4

CLEVELAND

15

Schofield Building

210

SUperior 7644
CV-294
PRIVATE

WIRE

CLEVELAND,
TELEPHONES

SYSTEM

:

CONNECTING

ST.

:

LOUIS,

NEW

LOS

■

YORK,

BOSTON,

ANGELES,

SAN

FRANCISCO

Portland, Enterprise 7008
Detroit, Enterprise 6066

the

of

more

a

evidently no lack of available
for equity investment, as

is

funds

deposits, life insurance and

bank

savings
bonds
purchases.
In
searching for reasons and reme¬
dies there is one factor which is

to

beginning

just

New York

Stock Exchange

120 BROADWAY, NEW

YORK 5, N. Y.

Collins,

retiring President of the
Bankers Association,

Investment

lem

in

said

he

when

Bell

Teletype—NY

1-1248-49.

Dept.f

to

address

It can be met by

be met.

can

his

'Fortunately,.this prob¬

that body:

expanding

of

at

4

7

to

times

earnings

met

be

liquid

by

assets.'

job.

As

'sell' the market out of its

With Reynolds
(Special
.

to

The

.CHICAGO,

"The
state
as

reasons

of

the

Robert. F.:/

208

advanced for this, Mead

affairs

remedies

are

as

numerous

proposed.

Lack

was

Dillon

Chronicle)

ILL. —Richard
B.

Mead

Shields, have

with Reynolds
La

South

slump."

& Go.

Financial

associated

.

in

reported

'Time,' Mr. Schram thought it was
for the Exchange to try to

time

porations and their bankers hesi¬
tate to
bring out,, new equity
...

Schram;

York Stock

Exchange, also looks upon it as a

Cooley,. Donald

financing.

Emil

President of the New

investor

continued

sales

our

today's broader market.

reach

equities. F With
well-seasoned stocks selling in the

Telephone: BArclay 7-3500

(L. A. Gibbs, Manager Trading

be realized as

perhaps the controlling one. This
was
well expressed by Julien H;

yielding from 7 to 9%, it is
hardly surprising that both cor¬

Laird, Bissell & Meeds

savings

proved by the volume of

toward

and

Members

CHICAGO,

view

apathy

market

Building

YUkon 6-2332

SF-573

Hartford, Enterprise 6011

Providence, Enterprise 7008




■

LA-io86

PHILADELPHIA,
TO

Russ

W. Seventh Street
Michigan 2837

financing

toward

through debt, while

and

gains tax,
cooperative spirit be¬
tween Washington and business
interests would be helpful. There

and

selling

trend

"The

INCORPORATED

material effect

a

revision of the capital

can

financing.

GUER & CO.

has had

war

retarding market stability. The
elimination
of
double
taxation,

in

effort to
It
introducing im¬
"Among the more interesting
proved methods of business solici¬
proposals were those of several tation which are designed to reach
operating utility companies which the thousands of individuals who
required the consent of their pre¬ hold these unprecedented amounts
purchase programs for offi¬
and not for public offering.

and

&

of

was

in 1947, but

one

convinced the

Associated

Clients," Georgeson &

booklet, entitled "A Report to Cur

a

Report

cers

Dick

in Debt Financing

tions, recapitalizations and new financing, calls attention to the more
pronounced trend toward debt ti—-—~—
——
—
■
nancing by corporations requiring of confidence due to the uncertain
course of legislation and the fear
new capital

and

Minnesota.

25, 1949,

Feb.

Co., 52 Wall Street, New York City, specialists in services for cor-,
oorations, attorneys, and underwriters, in connection with reoganiza-

exercise similar

v;

i

GARCEAU.

G.

GRENVILLE

Georges on & Co., in a report to clients, says tendency of corpora-.
tions to obtain capital out of earnings and through..creation of debt
became more pronounced during past year.

Preferred
87 %. authorizations were the same in
operating revenue in each year, but stockholder re¬

of

grab

not

a

South Hanover, Mass.

Notes Heavy Increase

Approximately

Minnesota.

Why

ranging

yields

slice of the gravy that
is being handed around rignt -now
but won't last long, I'll bet.

1947 and 1948 at two

prices.

crease

cipally

with
20%.

to

yourself

the
the
tendency for corporations to Ob¬
of the new capital
tain
new
capital either out of
finance
the
1949
earnings or through the creation
budget of the company.
of debt rather than by the sale of
The bonds will be redeemable,
This trend has become
other than for the sinking fund, at equities.
more pronounced during the past
at prices ranging from 105.75% to
from

Proceeds

bonds will be used to

8

from

the orthodox
the unortho¬

going to hell in a hang¬

are

ing-basket

stock

to lower requirements as soon as they were

business outlook had changed.

procedure

dox

times

five

on

deiensive issues, but

Well, the bonds are still there and
Stocks could have been

company are

reasonable to believe that they would

seems

powers

anti-inflation purposes may not be

thought they should be enacted.

States

(a Wisconsin corporation) First
Mortgage Bonds, 3% Series due

orthodox

sold in 1946,

which is offering $10,000,-

Northern

reflected in; a recent prices

view and providing business is moving to a

see

times by two percentage
It

was

"Thomas B. McCabe, Chairman of the Board of Gover¬

necessary even

lower

officials

controls.

enacted, which seems less likely than

the Federal Reserve System

of

business activity might

the monetary authorities might hesitate to use them

ago,

statement of
nors of

were

were

such circumstances.

under

use

on

respect to taxes and new legislative

with

a

most important factors in the present

of the

cautious attitude

more

a

In the first place political

A decline in the level of

economic outlook.
mean

banking operations.

as

are

significant from the standpoint of

group

the

oif

heads

their

open issue
possibly lose.

the: War

Offers Northern States

a

Today most investors and their
half-cousins
are
buying

wives'

buy RR bonds at 90 cents
the
dollar and War Stocks.

Halsey, Stuart Group |

(Wis.)|Bonds!

not

last

the

have

else

someone

10%.

to

was

chase

Halsey, Staurt & Co. Inc. heads

let

was. an

could

one

1943

In

to

the
But

attempted the unor¬
made a fortune. Yet, all

while, it

and

was

000

was

was

many

who

thodox

-

Power

And

is engaged princi¬ bank and investor who did.

The company

in

follow

to

course

them.

Salle

R.

and

become
&

Street;

Co.,
Mr.

formerly with Eastman,

&

with Bear,

Co. '

Mr.

Shields

Sterns & Co.

was

Volume .169

Number 4782

THE

COMMERCIAL
vested

Britain's Overseas Investments
XffE

By PAUL EINZIG

of British foreign investments since World War
Dr. Einzig looks for its continuation
due to further

I,

abroad in Russia's satellite nations
as
well as in the Far East. J Calls
attention, also, to deliberate
liquidation under, auspices nf Labor Government of some valuable

ow¬

This demand is

-

figures

are

available about the

present value of the remaining investments.

Even before the war the
detailed*
—
"V"-.statistics of. partial expropriation, can; claim

only

the

moment

assume

of

native

compiled
v

t

a

to

as¬

pri-

1 y

e

Lord

In

and

on

prospects

of

of

the

in¬

in the

case

some

restrictive

of South

been devised. It is

a

one

as

The

railroads

year's

grain

Africa where

measures

thrift.

in

natural result

as

from

the

barely

supply

mittedly, in

have

The

of

of

the

Leopoldina

Railway,

the

of

foreign

full list of the

new

ernment

na s

made

is

Paul

Einzig

countries.

But

on

B

in China should result in the

in that country

j

severe

blow

it will deal

on

! tional capital position.

overseas

time
cial

capital

$44,200,000

position.

to

From

City of Philadelphia, Pennsylvania

to

time, official or unoffi¬
information indicates further

liquidations
assets.

losses

or

of

overseas

;

The

.

reduction

of

seas

investments
lowing forms:'

British

assumes

4%, 3%, 2M% and VA% Bonds

over¬

the fol¬

Dated March 1, 1949

(1) Direct sales by the
govern¬
of stocks
acquired compulsorily from private investors. This
practice was very much in

Due in

ment

during the war, but

of $1,000,
registerable as to principal only. Registered Bonds in denominations of $100 and
multiples thereof.
denominations, of the same loan and maturity, are
interchangeable, at the option of the holder, from registered to coupon
Principal and interest payable at the office of The Philadelphia National
Bank, Fiscal Agent of the City, Philadelphia, Pa.
payable semi-annually, January 1 and July 1, except that the first interest
payment on January 1, 1950 will be for ten months. Non-callable.

Bonds in authorised

even

form and vice-versa.

though the government still has
the power to
commandeer private¬

ly owned
(2)

Interest

stocks this right is not

exercised

Legal investment, in

now.

Sales

negotiated

by

private

under

the government.

interests

000

was

such

the

hu'spices o?
The sale of the

outstanding example

transactions.

present

moment

Government

At

the

i

(3)
loans

is

Repayments
or

may

Brazilian i

negotiating the !
purchase of the Leopoldina Rail- !
way
and the Great Western of I
Brazil Railway.
of

Stock

Exchange.

enabling ordinances, will, in the opinion of Counsel,
legally binding general obligations of the City of Philadelphia,
Pennsylvania, and the City
will be obligated to
levy ad valorem taxes upon the taxable real property within the
City without limitation
as to rate or
amount, sufficient to pay the principal of such Bonds when due and
the interest thereon.

maturing j

The

sales

best known
example.

(5)
of

Privately

private

negotiated

assets.

cial

It is

offer these Bonds, if, as and when issued and delivered to us, and
subject to a favorable joint legal opinion by
Counsel, Messrs. Townsend, Elliott & Munson and Messrs.
Morgan, Lewis t(* Boclcius, Philadelphia, Pa.

expected that temporary bonds in bearer form, in the denomination of $1,000, will be delivered on
or about March
10, 1949. It is expected
that definitive bonds, as described
above, will be available for delivery before November 1, 1949.

$10,740,000

4% Bonds due serially 1950 to 1959, inch,
priced to yield 0.75% to 1.90%

$ 4,080,000

3% Bonds due serially I960 to 1963, jncl.,

commer¬

undertakings in India

for in¬

stance, sold out the whole

or part
their assets to Indian interests.

of

We
our

'sales

Many British
or

I

of

South African gold
mining stocks
to South African investors is the

firms with industrial

any tax or taxes, except gift, succession or inheritance
taxes, which the City of Philadelphia
he required to pay thereon or retain therefrom under or pursuant to
any present or future law of the Commonwealth of
Pennsylvania, all of which taxes, except as above provided, the City of
Philadelphia assumes and agrees to pay.

constitute valid and

repurchases of bonds
by I

(4) Re pa tr iation of stocks
through private buying on the

in the opinioH of counsel, from Federal Income Taxes under
existing law.

These Bonds, to be issued for various
purposes as set forth in the

the overseas debtors.
<

opinion, for Savings Banks and Trust Funds in Pennsylvania and New York.

Principal and interest payable without, deduction for

|

the

our

IntereHt'%xempt9

•

the

Argentine railroads for
£155,000,-

of

varying amounts January 1, 1950-1999 inch

Coupon Bonds in the denomination

evi-

dence

;

(6)
Plight of capital through
loopholes in the exchange control.

Internationally negotiable

$ 4,500,000

securi¬

ties have found their
way
in circumvention of the

$24,280,000

priced to yield 2.00% to 2.3.0%
224% Bonds due serially 1964 to 1990, inch,
priced to yield 2.35% to 2.85%
1^2% Bonds due serially 1991 to 1999, incl.,
priced to yield 2.90%

abroad

(Accrued interest

to be

added)

restriction

measures.

vv-

■

(7) Defaults
liabilities
by

or

repudiation

of

overseas

debtors.
Bankruptcy or depreciation of as¬
sets

of

British-owned

foreign

firms.

Drexel & Co.

The Chase National Bank

Smith, Barney & Co.

Bankers Trust Company

Harriman Ripley & Co.

Chemical Bank &«Trtjst Company

Kidder, Peabody & Co.

incorporated

(8) Nationalization

of

British

compensation to the

(•:' This latter

particular
too

to

not

owners.

heading is likely to

assume

the

importance

last three years

more or

less

Negotiations

confiscatory terms.

with

the

some

agreements under which the

own¬

receive

fraction

of

in

the

vestments.

compensation
value

The

weak

owing

to

of

their

in¬

moral

the

Seattle-First National Bank

SciIOELLKOPF, HuTTON & POMEROY, INC.

Graham, Parsons & Co.

founda¬

The Eastern European

Governments, in their

Coffin & Burr

White, Weld & Co.
F. S. Moseley & Co.

measures




Central Republic Company

incorporated

The Marine Trust Company

Reynolds & Co.

of

Buffalo

Trust Company

of

Alex. Brown & Sons
Georgia

(incorporated)

American Securities Corporation

Laurence M. Marks & Co.

of

A. G. Becker & Co.
incorporated

Ira IIaupt & Co.

C. F. Guilds

and

Company

incorporated

Geo. B. Gibbons & Company
incorporated

fact

that in
Britain, too. compensation
paid for
nationalized industries is far from

adequate.

•*

bargaining posi¬

tion of the British Labor Govern¬
in
these
negotiations has
very

Merrill Lynch, Pierce, Fenner & Beane

a

ment

tions,

Bear, Stearns & Co.

govern¬

ments concerned resulted in

ers

Lee IIigginson Corporation

much British

property in countries behind the
Iron Curtain has been nationalized
on

Yarnall & Co.

in

distant

future, owing
developments in Asia.
During

the

The First Boston Corporation

Moncure Biddle & Co.

property abroad without adequate

February 28, 1949.

Heller, Bruce & Co.

R. S. Dickson & Company
incorporated'

W. H. Newbold's Son & Co.

the

con¬

a

very

Britain's interna-

i n's

a

certain

fiscation of the large British assets

NEW ISSUE

figures
i t

r

a

balance

any

relating

are

declining trend continues.
If, as
is feared, the Communist
victory

effort to bring
out
Dr.

invest¬

British investment

the

gov¬

un¬
re¬

Foreign

a

of

Admittedly,, there

Ad-

instances, such

Council

amount

amount of

Ar¬

Argentine.

the

in the Colonies and also in other

and

some

of

in default.

paid for

meat

is

and

ments in British hands which

with

many quarters.
an
instance of

sale

marketable,

Bondholders gives

way

gentine

the

Sterling
prevented, except

Area cannot be

re¬

concern

regarded

easily

large

of

invest-

viewed

are

port

auspices of the

are

depre¬

government

what is left consist
largely of
realizable assets.
The annual

in which the Socialist
regime is living on wealth accu¬
mulated
by capitalist enterprise

propa¬

overseas

within

the

very much

years,

the

not

the

-Repatriation

vestments

♦

is

and

left-wing

sets

held

liquidation

overseas

are

that the

15

right in realizing them.
But gen¬
erally speaking only valuable as¬

of their

still

so

com¬

for

last ten

Burma

;

example set by the

compensation
for
the
£200 000,000 of British
capital in¬

sley.. These
statistics have
plied

the

Government.

under

the

ganda.

by- ceiving

Kinder-

not been

follow

British

were

deliberate
valuable

much
It

some
are

sold

ciated,

hands and occasionally
loans are issued in London.

government

full control.
Expropriation
and other foreign in¬

by

loans

assets

British

ments

governments

terests will then be forced

though

even

pre-war

The

•

sets

Britain,
old

some

British

government

-

overseas

change of the economic and
financial balance of power within
the British Commonwealth.
Most
dominions are large creditors of

new

Indonesia and French Indo-China

(971)

of the

in

it very firmly. The same
situation is bound to arise also in

LONDON, ENG.—Britain is rapidly losing the remainder of her
investments, left over after the inroads made into these
No

Government

position,

naturally
very popular, and it is
politically
impossible for the government to

investments.

by the two World Wars.

Burmese

favor¬

oppose

overseas
reserves

too

none

CHRONICLE

.

assets

overseas

are

very difficult

sation.

uncompensated >

nationalization of British

The
a

FINANCIAL

ing to Communist propaganda de¬
manding
the
expropriation
of
foreign capital without compen¬

.

Recounting losses

there

able.
is in

&

W. H. Morton & Co.
incorporated

E. W. Clark & Co.

News About Banks
NEW

March

2

board

of

election

the

of

made

was

directors

Suisse of Maurice

relations

Nestle

in

Alimen-

has

years

as

board.

the

also

protecting

the

as

power

in

interests

States

United

Japan, Mr. Straessle went to Mo¬

zambique

representative of the

as

Government

Swiss

transfer

the

American

served

as

the

of

Ambassador

charge

of

repatriated
to Japan

he
financial adviser to the
During the

his staff.

and

in

war

,/.

*

appointed

.

*

*

Sewall

S.

Bank

National

Chase

New

of

and will serve as associate

York

legal counsel, it is announced by
Winthrop W. Aldrich, Chairman.
Mr. Sewall has been a partner in
the law firm of Milbank, Tweed,
Hope & Hadley. He was a member
the

of

was

N. Y. City Council,
Mayor, 1944-47. He

Rye*

1940-43

and

President, of

also

the

Rye

Community Chest in? 1949.
fh

.=»'*

/•

the New York Trust Company, at
100

Broadway, New York,
an¬
nounced on March 1, the promo¬
tions of John

Degnan and

T.

Al¬

from Assistant VicePresidents to Vice-Presidents. Mr.

fred

Hayes

associated with the
division,
will
be
in
charge of the new office of the
company at 39t.h Street and 7th
Degnan, now

banking

Avenue

upon

Feb.

24

its completion

and

the foreign,

value

assume

E.

newly created position on
March 14, according to Linwood
P. Harrell, Union Trust President.
A Missouri banker for 20 years
Mr.

Bowersock

is

now

of Nov. 18, page

.

Marine Midland banks.

.

:

l"

Effective

_

1

26

January

•'

'

the

..

'

>;

Cos¬

Auffinger had been with the
Marine Trust Company since 1927

mopolitan National Bank of Chi¬
cago
increased its capital from

with the
Marine Midland Group Inc. when

$400,000 to $500,000, this having
been
accomplished
through
a
stock dividend of $100,000.

Mr.

and

it

became

organized

was

new

associated

They

1930. Two
elected.

in

have been

directors

County Na¬
Trust Company,

tional

Bank

&

Lockport and President Irving
Skeels

of

Trust Company,

In

division.

Elmira.
❖

:!:

accordance

T.
&

Bank

Elmira

the

*

plans pre¬

with

City Bank of

Reporting that the

Eaton of the Niagara

Detroit, Mich., recently organized,

its doors on March 1
in
the
Penobscot Building, the
Detroit "Free Press" of Feb. 25
stated that the institution is the
first new bank to open in that
would

open

city in 10 years. As noted

has been
Vice-President of the
National
City
Bank of Dallas,
effective March 15, it is announced

in our

a

by President De Witt T. Ray. This
is learned from the Dallas "Times-

which said
that Mr. McGee,
son
of W. B.
McGee, President of the First Na¬
Lampasas,

of

Bank

the

in

Bank Examiner
Federal Reserve

National
Dallas

District, becoming Auditor of the
Wichita
bank
in
1937,
subse¬

quently advancing to his
post.
*

*

new

stock,

Commerce

of

*

..

present

Feb.

on

3

$4,000,000 to $5,000,000 it is
weekly bulletin

from

learned from the

the

of

Chesapeake and Ohio Railway
Second Equipment Trust of 1949
$515,000

on

Paso, Texas,

to

Trustees:

endorsement

The

>:« Jy *

officers,

George

Morgan C. Penn, Hayden, Miller
& Co.

Stock Brokers Assoc.
To Hold

Meeting

CHICAGO, ILL.—On Thursday,
March 3, the Stock Brokers Asso¬
ciates will present a special edu¬
cation program at 3 p.m. on the
trading floor of the Chicago Stock

curities
Club

and

Dealers,
Bond
Street Club.

Traders

Hon. Harry A. McDonald, SEC
Commissioner, will make a spe¬
cial address on "1949 and the
Securities

Business."

meeting will be a closed
for the personnel of security
commodity firms and banks.

The
one

and

Business

Valley

to

of
its capi¬

Bank

National

$3,000,000

from

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.

The

a

recent

Office

bulletin issued by the

of the

Bookshelf

$3,250,000

through stock dividend of $250,000
effective Jan. 14, it was reported
in

Man's

stock.

*

Phoenix, Ariz, increased

subject to authorization by the Interstate Commerce

The

Currier; Ralph Elam, Sweney,
Cartwright & Co.; Fred B. Paisley,
Freeman
&
Paisleyt Inc.; and

brought about

through the sale of new

yield 1.35% to 2.40%, according to maturity

Issuance and sale of these Certificates are

F.

reports a capital

tional $150,000 was

tal

Priced

James

T.

$1,250,000, enlarged Jan. 18
$1,000,000. Of the $250,000
increase, $100,000 represented a
stock
dividend, while the addi¬

each March 15, 1950 to 1959, inclusi/e

unconditionally as to payment of par value and dividends by
by The Chesapeake and Ohio Railway Company

Joyce,

B.

National Bank of

Paso

*;y■

To be guaranteed

Secretary-Treasurer:

from

(Philadelphia Plan)
mature

John

Joyce & Co.

of

2%%'Serial Equipment Trust Certificates

To

El

ij

:j:

!s

The

Co.

B.

Crum, W. M. Zuber & Co.

Comptroller

Office of the

of the Currency.

El

elected:

Linder, The

Exchange, with the cooperation of
the National Association of Se¬

y-; '..."v.

the National Bank
of Houston, Texas

capital

its

increased

'

sale of $1,000,000

Through the

C.

Tex.

began his career in his father's
institution. He later served as As¬
sistant

were

Bert

20,

Feb.

of

Herald"

of

$5,150,000

*

Crum

Club the follow¬

Vice-President:

Wichita Falls, Texas,

elected

tional

W.

George

President

are:

Ohio

John

Officer of the First National Bank
of

F.

officers

new

President:

Cashier and Trust

W. K. McGee,

"Mr. Auffinger, has been an As¬ President of the Union National
sistant Vice-President. The comA Bank of Kansas City, Mo."
'
•
s;i
%
t'.t
'
i
1
pany is the service organization "f
■{V"' /'V

ing

2085.
*

Vice-

a

110,000 shares of the par
of $10 each, and a surplus

$1,700,000. Plans for the con¬
solidation were noted in our issue

James

Stock and Bond

of

y

will be associated with

Mr. Hayes

will

the

also quote:

we

capital stock of $1,100,000, divided
into

Bowersock

"Mr.

York on

George

President

by

Jackson-State National Bank the
consolidated bank has a common

Goodman
Washington "Post" of Feb.
Oliver

24, who said:

Midland Group Inc.

Becker, said the Buffalo "Evening
News" of that date from which

for the 19

*

John E. Bierwirth, President of

in the

Na¬

(capital $500,000) and
the
Capital
National
Bank
of
Jackson
(capital $600,000).
Ef¬
fected under the charter of the

Washington, D. C. was an¬
nounced on Feb. 23, it was made

S.

Jackson,

tional Bank

of

by

of

Bank

the First
Miss,
effected on

of

name

of the Jackson-State

Feb. 21

y;y.:■!'

dent of the Union

promotion of George H.
Auffinger, Jr., to Vice-President
in New

y
:

■ ,v\.

the

the consolidation was

Executive Vice- Presi¬
Trust Company

sock 3pd as

The

announced

•

.

National

*

#

*

The election of Justin D. Bower-

known

was

/'

*

❖

background
of
cotton
fabrics woven by Avondale and

of the Marine

Feb. 24.

"Post Gazette" of

include

January 24.

effective

Under

has in¬

$750,000
capital was*

capital from

$1,000,000. The new

made

Pittsburgh

learned from the

art exhibit inside,

tention to the

"Saturday Evening Post."

been

has

Vice-President of the

a

is

it

its

creased
to

1923, serving as a teller until 1942
when he entered military service,

quarters there. The bank's outside
window displays, which call at¬

Simmons

of Pine Bluff, Ark.,

Bank

Pittsburgh,
with
associated since

of

Company

head¬

sales

have

firms

Joyce

of
National

dividend

stock

a

the

$250,000

been elected

which he has been

and Avondale
Mills and numerous other cotton
textile

B.

John

Linder

C.

Bert

of the Peoples
Bank
&
Trust

National

First

of

section

Comptroller of the Currency.

joining the Girard

Harry J. Wood has

City

York

New

1, according to a re¬
cent bulletin of the Office of the
Feb.

fective

Assistant Secretary

that cotton

downtown

the

in

try

ef¬

Empire National Bank became

Pennsylvania

the

to the

Company of St. Paul, Minn,

Through

important territorial indus¬

an

Empire

Trust staff in 1925.

reproductions of the paintings as
used
in
advertisements
in the

Swjss Legation in Washington.
Grenville

is

of

department

2,

change in the name of the
National Bank & Trust

A

Philadelphia
and
service de¬

customer

Railroad before

Vice-President.

It is noted incidentally

1942

In

Assistant

Smyth,

European

Swiss Government was

when the

acting

American

Corporation.

Securities

for

is

Straessle

Mr.
of

appeared in these columns Dec.
page 2299.

partment died on Feb. 24. The
Philadelphia "Inquirer" states that
Mr. Shinkle was in the treasury

view

series of exhibits

representative
indus¬
tries in the bank's neighborhood.
The exhibits are a part of
the
bank's community relations plan
under the direction of George A.

of Nestle Co., now Nes¬
Company, S. A., at
Switzerland, and was re¬
elected Vice-President of

President

a

of

the

merly Assistant Secretary of the
French Mortgage and Bond Co.
An earlier reference to the bank

T.

its

the

French was for¬

"Free Press." Mr.

$1,000,000 to $1,200,000.

of

said

Cashiers,

Assistant

as

OHIO —At

meeting of the Columbus

McAskin

Lawson and John H.

N.

increased

Company

COLUMBUS,
annual

26, and
appointment of Seward

the

also

Shinkle,
Assistant
of the
Girard
Trust

head

Club Elects Officers

directors.

the

of James M. French

by Mr. Verhelle on Feb.

result of which

a

similarly

Treasurer

featuring

tle Alimentana

cently

employee
the first of

as

is

Albert

depicting the s*ory
relations at Avon-

dale Mills of Alabama are on

director

Vevey,

paintings

of

managing

been

from

Broadway office. Ten original

oil

Straessle,

many

art

latter

have resulted
exhibit at its

291

S. A., and of J.
Vice-Chairman of the
Swiss 'American
Corporation in
New York City. Mr. Paternot for
Company,

tana

unusual

an

surplus

the

human

remote

programs

the

two

that

announces

geographically

Credit

Paternot, Vice-

the

of

President

the

to

of

York

New

of

meeting

Vice-President was announced

as

plans
regarding
the
enlarged
capital we reported that an addi¬
tional $200,000 would be trans¬
ferred from undivided profits to

Bank of

The East River Savings

on

The election

$1,000,000, to $1,200,000 by a
dividend of $200,000 effec¬
tive Jan. 14. In indicating in our
issue of Dec. 30, page 2761, the

CAPITALIZATIONS

Announcement

initial

stock

Bankers

and

OFFICERS, ETC.

REVISED

at the

first President of the bank

capital has been increased

Columbus Stock & Bond

was

from

CONSOLIDATIONS
NEW BRANCHES

Verhelle

F.

Lincoln National Bank of Newark,
N. J. its

17, page 770, Joseph
named as the

issue of Feb.

the

by

known

made

viously

Thursday, March 3, 1949

CHRONICLE

FINANCIAL

&

COMMERCIAL

THE

(972)

10

Comptroller of the

Currency.

Centennial History of the Penn¬

<

sylvania Railroad Company 18461946—George Burgess and Miles
C.

Kennedy—The Pennsylvania
Co., Philadelphia, Pa.—

Railroad
Cloth.

inactive

HALSEY, STUART A CO. Inc.
R. W. PRESSPRICH A CO.

;

INCORPORATED

FIRST OF MICHIGAN CORPORATION




,

r

and

CO.

HIRSCH A CO.

Saving American Capitalism—
A.i A. Berle, Jr., Chester Bowles,
Alvin H. Hansen, Leon Keyserling
and others—Edited by Seymour E.
Harris—Alfred
A.
Knopf,
New
York

j

Security Dealers of North Amer¬
1949 Edition—Entirely revised
edition of complete directory of
stock
and
bond
houses
in the
United States and Canada—fabrikoid—$9.00—Herbert D. Seibert &
Co., * Inc.,
25 Park Place, New
York 7, N/Y.
„
,•

ica

JULIEN

F. S.

COLLINS A COMPANY

YANTIS A CO.

V

City—Cloth—$4.00.

STOCKS

McMASTER HUTCHINSON A CO.

-INCORPORATED

March 2. 1949

INCORPORATED

FREEMAN A COMPANY

'

ALFRED O'GARA A CO.

,

bank

insurance

CO., INC.

MULLANEY, WELLS A COMPANY

.

.

L. F. ROTHSCHILD A

HORNBLOWER A WEEKS

WM. E. POLLOCK A

GREGORY A SON

A. G. BECKER A CO.

Kenney & Powell
NEW YORK

Volume 169

I

Number 4782

THE

Railroads Need

COMMERCIAL

&

FINANCIAL

CHRONICLE

tion

point and sees relief from higher operating costs in new labor-saving improvements that
require additional capital expenditure. Lays high railroad costs to unreasonable labor demands and
practices together with high taxes, and urges railroads be permitted to earn a minimum return of
6%

be

nation—

and

I

were

the

on

Diesel power,
only
18%
of
freight train-miles.

trip.

Saturation Point Reached in Rates

along

1946

Those
who

of

you

were

these
and

locomotives, more than 500
freight cars, and other new
equipment involving capital
new

have

the

charges of almost $10,000,000. As
new
equipment is placed in
service," we will benefit by still

Southwest
in

this

recent

will

years,

further

substantiate
of

any

claims I might
k e
about

with

of

the

years,

familiar

sustained

this

the

an

of

We

the

be¬

problems
Railroad

that

it

our best insurance for
earnings in the future.

immediate

and

fact

are

ap¬

Katy

the

of

have
some

of

needs

confronting

The

country.

are

too,

particular

serve

our

Southwest

preciation,

because

of

who

you

Katy Railroad

lined to you, which have been set
into motion during the past three

rapidly
growing section
Those

the

on

lieve that the policies I have out¬

D. V. Fraser

.

_

operating

our

convinced

are

that
of

source

the

only

additional

income, other than increased vol¬
ume

of traffic,

ings

territory.

in

of course, is sav¬

Katy Railroad, in

common

nation's

our

difficult

readjustment to peacetime stabil¬
ity, involving rapid changes in
our

economic pattern, continued to
complicate railroad operations and
management functions during the
In order to keep pace with

year.

traffic

demands, and to effect
efficiency and produce
economies, it has been

greater
greater

necessary
to
adopt
some
methods of operation, provide
motive power,
rolling stock,

new

tools,

The

cost

of

on

This is demon¬

treasury.

our

tinued with

concrete forward

strides

of
aimed

economies

During
for

structures

totaled

a

this

period,

maintenance
and

554,500,000,

$18,000,000

im¬

at

greater
maintenance
and

in

expenditures
way,

capital

of

equipment

or

more

This

year.

applying

it

a

location

is!

plants in this area,

example,

since

our

1940

eco¬

12.5%
tion

I

to

analyze

and

scene

can be expected to
the national business

this year.

I tell you frankly,
my own opinion in this respect is
not a pessimistic one.
We have
continued since the end of the
in a state of capacity produc¬
tion, full employment, and a highwage plateau.
Commodity prices
are now levelling off and we are
experiencing a slight recession.
Adjustments are taking place in
war

changing.

to say,

I would be the last

however, that this is not

a

whole.

a

ment, and

the

na¬

Southwest

and

remarkably, with no
expansion and diversifica¬

this

tion in sight.
To illustrate, since
1940 the production of cattle and
duction has increased

factors

same

for

peacetime

varied

business

concerns

ings

have

hand,

been

some warn¬

sounded

62%; wheat

ceived

government policies

agricul¬

more government con¬
trol of business, or an additional
tax-bite on corporate income.

supply in the
past has been a deterring factor
in industrial and agricultural ex¬
pansion in the Southwest. Today

remains, however, that
compiexion of the Southwest
changing to one of great and
continuing industrial growth,
which has progressed to a healthy

well
ture

as

increase

an

in

production.

The fact

Adequate water

the

is

great damsites and artificial lakes,
in existence and
proposed, at

and

now

Denison, Wichita Falls and Whit¬
ney,
Texas; Altus, Vinita, Fort

healthy situation.

Gibson

and

Eufaula,

\

gation.
the

Not to

continuing

be

use

overlooked

and

ures

heavy

have

a

which

experiences of past years
intangibles that will

are

bearing

on our

future, and

is

keep

are

pace.

Government Regulations and

re¬

Competition
The third external influence to
which I referred was government

promoting

(Continued

we

on

page

These included $2,150,000

in re¬
principal of collateral
and equipment obliga¬

modernization of roadway

and

than

money

went

for new, heavier rail, cross
ties, ballast, strengthening bridges
and
modernizing buildings and

addition, current funds
to

were

$12,300,000

of
In

the

.

and

settlement

in

-:.L^

New York Central Railroad

used

$1,100,000 of Federal in¬
excess profits taxes for
years 1942-1944 and $872,000

pay

come

claims

of

of

Second

the

United States Government for re¬
funds
of
over - collections
of

to that

extent, of such anticipated
income

and

excess

Equipment Trust of 1949

2%%

.

freight charges on war traffic.
We
also
deposited
$1,500,000
with
the
Collector of
Internal
Revenue at St. Louis in payment,
additional

other facilities.

total

a

purposes.

Equipment Trust Certificates

f

(Philadelphia Plan)
To mature
To be

profits tax liability for the years
During this period we also be¬
1945 and 1946 as might be de¬
a program of new equipment
termined as a result of the audit
purchases, which was necessary to

annually $820,000

on

each March 15, 1950

1964, inclusive

to

guaranteed unconditionally as to payment of the par value and dividends
by endorsement
by The New York Central Railroad Company.

gan

bring

property up-to-date in
order to meet present traffic de¬
our

mands,

nomically.
we

000

in order

and

to

operate

efficiently

more

and more
In the past three

eco¬
years

freight and passenger cars,
capital improvements.

new

other

The wisdom of this moderniza¬
tion

has already been
proven in the performance
of our Diesel locomotive equip¬
ment.
It is conservatively esti¬
mated that the operation of seven
Diesel
road
locomotives, which
were
in service throughout the
program

amount

least

one

at

million dollars after in-

taxes—a

'come

in

splendid and

con¬

tinuing return' on the investment
in this

ing
than

note

31 To

of

slightly

that
our

of

gross

more

ton-miles

*An

address by Mr.

the

Securitv

New

York

Analysts,,

Fraser be¬
Society of
New
York

City, Feb. 25, 1949.




to

yield 1.50%

to

will

additional

2.90%, according to maturity

Issuance and
The

taxes.

sale'of these Certificates are subject to authorization
by the Interstate Commerce Commission.
Offering Circular may be obtained in any State in which this announcement is circulated
from only
of the undersigned and other dealers as may
lawfully offer these securities in such State.

such

Railroad Problems

lems,

as

well

as

the possibilities,

pertain

to the
generally, ( and

they

as

industry

HALSEY, STUART &

railroad

particu¬

R. W. PRESSPRICH

&

CO.

CO.

EQUITABLE

SECURITIES CORPORATION

HARRIS, HALL & COMPANY

major factors that affect the prog¬

busi¬
ness or industry, particularly the
railroad
industry.
These
two
and fate of almost

any

factors are the influences that can
be controlled

internally and those
influences that are controlled by
external

forces.;

So

internal influences

they

are

far

as

the

concerned,
up in one

be summed
sentence—the decisions that
can

of

facts

and

probabilities

they

can

be

external

broken

OTIS

&

CO.

MERRILL LYNCH, PIERCE, FENNER & BEANE

L. F. ROTHSCHILD

&

(INCORPORATED)

GRAHAM, PARSONS & CO.
WM. E. POLLOCK &

FREEMAN

&

CO.

HIRSCH

CO., INC.

FIRST OF
&

MICHIGAN

CO.

WILLIAM BLAIR & COMPAN Y

COMPANY

IRA

HAUPT & CO.

principal
necessarily
as

CORPORATION

THEJLLINOIS COMPANY
BURR &

at

its

CLAYTON SECURITIES CORPORATION

COMPANY, INC.

HAYDEN, MILLER &. CO.

McMASTER

influences,
down

not

& CO.

ALFRED O'GARA &.

into

categories,

HUTCHINSON

JULIEN

COLLINS & COMPANY

MULLANEY, WELLS &. COMPANY
CO.

F. S. YANTIS &.
INCORPORATED

three

insofar

(INCORPORATED)

HORNBLOWER & WEEKS

man¬

disposal.
the

BLAIR A CO., INC.

INCORPORATED

We all know that there are two

ress

INC.

A. G. BECKER & CO.

larly to the Katy Railroad.

As. to

fore

Priced

now

It is interest¬ agement makes from its
analysis

equipment.

to

years

deposit

Let's look at some of the prob¬

well

year 1948, produced a savings
overall transportation costs of

these

This

made.

stop the accrual of interest at the
rate of 6% per annum on that

have invested almost $20,000,in
new
Diesel locomotives,

and

for

returns

of

being

chronologically,

the Katy is concerned.

March 3,1949.

perma¬

TeflectedMn the rapid
development with which we must

mois¬

Southwest,

essential purposes.

and

—there

and irri¬

ture the whole Southwest has

the

development,

uate the future of the
Katy Rail¬
road with a cold analysis of
fig¬

Oklahoma,

on the Colorado River near Aus¬
Economic Trends
After all, little is known about tin, Texas, are just a few of the
how our economy behaves under> developments in this direction that
conditions
of
full
employment. are and will provide ample water

supply for industrial

stable

nent in scope.
It is for this reason
that I admonish you not to eval¬

In our experience in
the growth of the

to

lead¬

ing toward

ceived in the past 60 to 90 days.

of

that

venturesome spirit and private ini¬
tiative may be stifled by ill-con¬

corn pro¬

85%; rice 122%; peanuts 222%;
grain sorghums 175%, and so on.
This indicates a diversification as

past two or three months?
by our requirements for Is the slight decline in commodity
during the year 1948 for prices; the signs of some unem¬
capital
expenditures
and other ployment; the slackening in the

duction

in

area.

On the other

cash

trust notes

pur¬

being recognized by in¬
dustrial leaders not
only of the
Southwest,
but
throughout the
nation, by the location of heavy
industrial plants and many smalt

grown

hogs has increased 30%;

of which

others reconvert¬
ed into peacetime production. The
many

poses are

•

Agriculturally,
has

end of

predict what
on

against 8.9% for the

as

as

many

have been retained by the
govern¬

the

four great states

During this period the increase of
population in Texas alone was

busi¬

were

by military and gov¬
authorities, through the
of great
military estab¬

ernment

separate entity—

strated

equipment, or
during the three years begin¬
ning with 1940, the Katy has con¬ $8,223,000 for capital
and

policy

lishments and wartime industrial

as

population of

all
industry,
and
every
individual. • I repeat
that
you
gentlemen are in a far better po¬
than

in

recognized

ness,

sition

The'

these

abundance, and in addition, it has
a progressive
spirit and plenty of

I

confidence in the future.
These favorable
factors

For

puttings these new
policies in motion, along with the
necessity of liquidating income Isn't it a little early to make pre¬
tax and other obligations of prior dictions
for the future on the
years, has placed a heavy demand trends that have developed within

and

operation.

all

of

tions, and $6,076,000 for additions

Since my last meeting with you,

its

affect

is

new

facilities and other innovations.

provements

conditions

in

probably

higher freight rates—and relief
with
other railroads
throughout from high expenses will be slow
the
country, enjoyed in 1948 the in coming, if at all.
I will have
benefits of a year of full
employ¬ more to say about these high ex¬
ment and
generally good business. penses in a few moments.

However,

nomic

our
national
economy
and
the
general pattern of doing business

operations—we

that

all

considered

ex¬

have reached the saturation point

does

thought

one

has

predictions of the national
economic trends to the Southwest
en toto.
The Southwest must be

natural handicaps and

National and international

happen

We

m a

this

savings in

costs.

the

is

necessarily in that order.

Southwest

—Missouri, Kansas, Oklahoma and
advantages, and third, government Texas—has increased
15 % million.'

Diesel

others

seen

our

not

may

your

are the national and
international economic conditions;

second,

thinking

our

by

First, there

Orders have been
placed,; for regulation and uncontrollable
delivery in 1949, for 18 additional penses.

on

trips,

who

by

operated

in-'

You cannot evaluate the future of
the Katy Railroad

be made available for cost-saving tools.

for

handled

were

which

you

clear

and

should like to stress at this point.

<$>-

believe
of

some

major factors—ample fuel and

seen.

providential.

There

Today, as in 1946, this invitation to talk with you comes in the wake of another Katy
tour
through the Southwest. A number of you were aboard the special train last October,
which carried financial
analysts and writers to the scenes of the greatest development in
the

be

—

saturation

can

to

all, we have moved at
clip during and since the

telligent labor; good Market out-;
lets; proximity of minerals and
war, and a "breathing spell," with raw materials; favorable climate
opportunity to appraise our posi¬ and good transportation
though

"Katy" executive, in recounting railroad progress and prospects, contends, if given a fair-competition
basis, rail transportation can hold its own against other forms of transport. Sees freight rates
reaching

that surplus earnings

That remains

after

fast

a

so

activity; an have found that when
industry
leveling
off?— plans to expand or establish new
precipitous drop plants, it considers a number of,

more

a

occur?

But

President, Missouri-Kansas-Texas Railroad

capital

will

or

17

industrial

adjustment?—a

By DONALD V. FRASER*

on

of

pace

Fair Deal

a

(973)

CO.

39)

18

THE

(974)

&

COMMERCIAL

Thursday, March 3, 1949

FINANCIAL CHRONICLE

Prominent Personalities

iational

(Eighth of a Series)

SECURI

;';r7;By IIENRY HUNT

your

upon

request from

investment dealer,

Should the prudent investor now stay

from

or

&

CORPORATION

RESEARCH
120

SECURITIES

broadway, new york 5. n. y.

with his stocks?

Does the

before

These
seems

In

are

Inflation appears probable, recession

questions.

hard

possible.
this period

j

,

multitudinous

of

and conflicting

uncertainties

Bullock

Fund, Ltd.

Shares, Inc.

Nation-Wide Securities Co.

taxes

most of these things

might happen.)

hard to pick up. Steel,
year's earnings of about $12 per
share, to yield about 8.33% from the $-3 dividend.
Steel earnings
could recede to $9, which would still reasonably cover the $6 divi¬
dend, and with an improvement in sentiment, the stock could easily
sell at ten times earnings to yield 6.66% at a price of 90.

Investment
or

General Motors at 60 is also

CALVIN BULLOCK
Established 1894

mate

Cunq

,

of the dividend; and were the stock to

coverage

Straws in the Wind—Like

stock funds

common

(under the

operating
more

guidance of

along the principles his
of family monies. Late in

inception of his idea in The George Putnam
was first applied the term "balanced fund."

saw

1937

the

to

which

Fund
tions

was

he expressed it, "That the test of a cook's inten¬
whether or not he ate his own cooking," Mr. Put¬

nam

has

invested

Feeling,

priced at close to six times our esti¬

earnings, the price would be 80 to

largest

ancestors had used in the care

own

year's earnings of $9.50, to yield 8.33% from the $5
Earnings reduced to $8 per share would still afford fair

dividend.

the

trustees)

George Putnam

last

of

"The

as

(still in operation in Boston). As he saw
the picture unfold, however, he became
more
interested in a particular type of
fund which he visualized as a mutual

•

72, is selling at six times last

around

of

one

-

Supporting Evidence for this idea is not

available

from

Dealers

7

increased importantly—IF labor

not

are

widely known and

Prudent Man Rule."
present Mr. Putnam's initial interest in the public type investment trust
was in 1925 when he was an organizer of

little but clouds.

production
pick£ up—IF commodity prices recede (but do not break) to a "rea¬
sonable" level—It would not be surprising to see stocks sell higher on
lower earnings.
(And ther.eVat least a,reasonable possibility that all
or

Prospectuses

see

tions—IF

become

to

was

The

Peering long and earnestly into our crystal-ball, we
IF the recession is held to minor propor¬

If—If—If!

could

what

accepted

the perplexed investor.

management appear well fitted to serve

enced

field—for

ing- appears to be a habit among the
Putnams for Mr. Putnam's great great
grandfather, Mr. Justice Samuel Putnam
was a pioneer in his own right as was so
well proved in 1830-when he jolted some
of the more staid minds of his day with

;

trends, investment companies with their wide diversification of in¬
vestment risk and their continuous watching by competent, experi¬

Dividend

-

of money for others has been the heritage of,
successive Putnam generations. Pioneer¬

the investing

impending,recession-depression materially marks down the

an

rather naturally into this

He fitted

is still active.

certainty of inflation make equities still an attractive
hedge against further loss of purchasing power?
Or should he turn a substantial portion of his holdings into cash
value of his stocks?

.

*

George Putnam is one of the pioneers in the mutual fund
movement as we know it today—one of the few in fact who

long-range

NATIONAL

<•

Chairman, The George Putnam Fund

Time to Retire?
Prospectus-

~

GEORGE PUTNAM

as

than

more

a

half million dollars of his

family money in The Putnam Fund.

sell at ten times

In

•

yield 6.25%.

he is one of the most active men

late fifties,

his

the investment field.

Never

in

arm-chair executive, he has

an

if not more, dealers than most
His thirst for knowing what invest¬
ment-minded people think and want has been insatiable—
even
to the extent of meeting many of the Putnam Fund
met and talked with as many,

all weather forecasters and students of

management executives.

have our pet indicators that may—or may not—be
infallible.
Anyway, for what they are worth, here are some of the
small things that we believe have been fairly reliable barometers in
the market, we

shareholders.

the past.

When you meet him you think of him as a big man
physically — unhurried, kindly, soft-spoken — sparing witn
words, like many Bostonians—self-effacing.
Yet, let occa¬
sion demand it and he can erupt with tremendous force and

in uncertain
market weather, has been favorable. Action of government bonds in
rising above official supporting prices is another frequently reliable
straw.
This market turned down as early as January, 1946.
Other
favorable indications: recent sizable odd-lot sales; a group of sensitive
stock that we call early birds has been on the firm side.—From
Arthur Wiesenberger's "Investment Company News."
Action

of utility

stocks, frequently a reliable vane

logic iri support of his thoughts. :.v?
His hobbies and outside interests
the

of

He is

himself.

man

are

few—characteristic
lives at

fond of the ocean," and

Here, in con¬
(his five children are married or at
school) he devotes his odd moments to the breeding and
raising of poodles. Dog show devotees throughout the coun¬
try are well aware of Puttencove Kennels, and their propen¬
sity for collecting blue ribbons. Only last week a Puttencove
poodle was judged "Best in Show" among more than 1,400
dogs at the Eastern Dog Club show. He likes an occasional
game of bridge—is considered an excellent player by his
Manchester-By-The-Sea just north of Boston.

An Investment
the

For

Opportunity ?

characteristic of the steel industry is

investor the basic

quite simple—for a steel company
of steel. Except in wartime, when

ings down, the earnings of

junction with his wife

to make money it must make a lot
high excess profit taxes kept earn¬

steel companies have always followed

And except for the present period, stock prices
and earnings. It is this exception
provides the investment opportunity in steel stocks today.

production.

always followed production

Steel

production begins 1949 at about 100%

their
have
that

associates.

of the industry's rated

His

In actual tonnage, production is breaking all records. The
probable future course of the production line is indicated by the cur¬
rent estimate of the United States Department of Commerce that for
1949 as a whole the demand for steel will exceed its supply by some¬
capacity.

HUGH W. LONG & CO.
iNCOSPORATfp

48 WAll
lOi

STR£ET.

i

NEW YORK 5, N Y.
CHICAGO

ANGUtS

thing under 5,000,000 tons. ("Steel" Market Survey,
From a bulletin issued by Distributors Group.

When Does
"A

K e yston e

of all

expert in the ills which

afflict all parts of the

purposes—the

opportunity

to

.

.

"there is much

.

that the most informed can

economic

discusses

problems

like

a

help

their

be helped—
learn."
He

philosopher—but

one

tenacity and the strength of purpose to translate
philosophies into positive action.
.
y /

who has the

his

know about

less, many businessmen have turned their investment problems over
to an investment company.
Again, this is not because they know

nothing about investments—we have shown that on the contrary they'
devote much time to investment problems to run their own
business. Once again, it is because they do not have the tools—re¬
search facilities, investigations in the field, a full-time staff, etc.—
that an investment company possesses; nor do they have the long

must

experience in evaluating securities which

is essential to the staff of
Corporation bulletin.

good investment company."—From a Parker

tlieir capital

STEEL

BONDS

SHARES

PREFERRED STOCKS

A Letter to the Column
"Dear Henry:

1RTtST

this is
As

Walter

ffs

SSA®

Prospectus from

investment dealer or

.

6e»«al

Keystone Company
of Hoston

-

a

prospectus

on

request

:

Congress Street

Massachusetts




from your

Distributors

investment dealer or

Group, Incorporated

63 Wall Street, New

York 5, N. Y.

FIELD
Street, San Francisco 4

Coast Representative: DANFORTH
315 Montgomery

2500

Mutual Funds column you intro¬
Philadelphian from way back.' While

your

'a

I am sure that failure to
birthplace and early years might have
disturbed Walter slightly as it did me.
"Both the President of Wellington and myself were born and
raised in Wilkes-Barre. I think it is that independent spirit as well
as intense concern for the problems of the smaller fellow, supposedly
bred into natives of mining communities, which in part has been
anthracite
the

area

of Pennsylvania,

locality of his

responsible for our mutual absorption in the rapidly

0.sUtbul°i

*®,T!»i?ffs

as

true, the family moved away from that city over 100 years ago.*
natives of the picturesque Wyoming Valley in the north¬

mention

COMMON STOCKS

in

ago

Morgan

proud

eastern

Group Securities, inc.

(Series S1-S2-S.O-S4)

weeks

"Several
duced

COMHtU

of

(Series KJ-K.2)

50

their

find themselves in much the same

in

(Series B1-B2-B5-B4)

Boston 9,

with

ance

practising dentists.

brought into
existence through their flotation. They have to know about dividends
and interest because their companies have to pay them.
Neverthe-

IN

Tlie

for hospital service at low cost. He became its
through his efforts it was founded, and,

when

shareholders in the way they teel they want to

a

your local

outside interest is The Blue Cross
a
nonprofit means of filling the

as

fancy, he is chary of too much regimentation of funds into
one groove of thought. He believes that the various manage¬
ments should have the right of individual thinking in accord¬

body.

INVESTMENT FUNDS
investing

fostered

serving without compensation has helped to guide its growth.
While he feels that mutual funds are still in their in¬

Jan. 17, 1949.)—

position in regard to their investments. They have to
stocks and bonds—their own company may have been

Funds

important

has

great need

Expert Need Advice?

"Many successful businessmen

Custodian

Certificates of Participation

an

most

he

President

Nevertheless, if a patient cpmes to him with a tooth¬
ache, he will generally advise a trip to the dentist. This is not because
the doctor knows nothing about teeth; on the contrary, he spent long
hours studying teeth in medical school. But he does not have the tools
—the drills, cutters, fancy mirrors and so on—which the dentist has;
nor does he have the long experience and special training required
human

:

doctor is

an

which

developing insti¬

tution of the investment company.

e»-

"Walter's father

and

my

dad are old friends and have reached

of four score years with grace and honor. From time
to time they can be seen greeting each other on Public Square in
Wilkes-Barre as they, say 'hello' to their unfortunately too few con¬
temporaries still remaining in the community.
"I am sure you will like to acquaint our readers with this little
the worthy age

personal postscript to your 'Philadelphia story.'
"Henry Ansbacher Long."

Volume 169

Number 4782

THE

COMMERCIAL

&

FINANCIAL

CHRONICLE

own

The

By DONALD R. RICHBERG*

that

Presumably

and

liberal

hundred days.

ment

plus

the

m-

-

street, is
politically

-

the

licensed

offi¬

cial guide in a

the

world

or

bedtime

a

story of

horror and crime.

better

a-

us

better ideas and

philosophy

of

govern¬

democr acy.

ment. He must instruct

But

ing the function of government in
a
modern society, which should
develop more and more centrip¬

and

now

then

the

even

average

ma n

becomes

dis¬

trustful of his

wisdom

own

in

approving

a

Donald

R.

by

Richberg

of

program

rich

getting
spen

ding

money,

of

or

making

money by doing less work.
In such a moment the beneficiary
more

of

higher

education

may

get

a

hearing.

The economist may be
permitted
to
guide
editorial

writers. In the

recent

complexity
of world-wide economic problems
columnists

even

then

followed

have

and

now

scientific

thinking

and occasionally caught up with it.
The political scientist,

has

.however,

yet received little encour¬
agement from the practical world.
as

In this era when the

improvement

of the processes of government is
almost everywhere
essential to

the

survival of

ruling class, it

a

is only the occasional, and usually
the unsuccessful, politician who

will

share

the

platform with a
political scientist, in public meet¬
ings or private gatherings. Per¬
haps scientific aid is rejected be¬
there is such

cause

small quan¬

a

tity of political science available
that when it is poured into the
seas of political controversy it im¬
mediately disappears.
Of

course

learned

etal force to hold men together
against those multiplying centrif¬
ugal forces that drive men apart.
Then, when this adult education

and

ture. Students of

crammed
as

with

*

modernized

and free

multitude to

a

Is it not clear

ficult to

techniques

new

without

of

so

scientist has
which

to

follow

little

citizens

are

and

do

public
them

your

at

ticed when

I

j

the

are

an

humanitarian who is

paternalist

liberal.

giving

a

amateur
deception prac¬
as

calls

These

promoting

himself

miscalled

a

liberals

pay

employees
and

an

watch

10

them

make

announcement

is

not

These

men

true

any

They

are

liberals

not

meaning

of

that

paternalists

are

themselves

liberals

they
know that the American
people
are not yet reconciled to a
pater¬
nal control of their lives.
They
know that the American people
still cherish the illusion that
they
can
remain free men
and yet be
protected by government from all
burdens

free

man

and

must

hazards

it

because

difficult
But how

voting

is

not

operate than
he

can

for

sell

disguises

dom

purpose

nis

thought

Could

idea

(Continued

on

page 34)

Company

(a Wisconsin corporation)

of

with

a

political scientist have

a

Northern States Power

use

more

First Mortgage Bonds, 3% Series due March 1, 1979

persuaded tpe German people ,;to
accept the principle of leadei^hip
(which has scientific merit) with¬
out the aid of organized terror
and
military control?
Could
a
political scientist have persuaded

;

Dated March 1,. 1949
'

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p, ice 102.75% and accrued interest

the Russian

people to accept the
of
socialism
(which
have scientific merit) without the
organized terror and ruthless rule

principles

of

communist

a

The

Can

immediate

fu¬

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

such

dictatorship?

Self-Govcrnment Be Made

politics are being
food; just

political

economy

stuffed with statistical

HALSEY, STUART & CO. INC.

Effective?

How, let us ask ourselves, can
political scientists persuade the
American people to accept new
ideas of self-government and ex¬
periment with new techniques in

carbohydrates

order

many

DICK & MERLE-SMITH

OTIS &, CO.

WM. E. POLLOCK &

(incorporated)

,

AUCHINCLOSS, PARKER & REDPATH

LAIRD, BISSELL

CO., INC.
&,

MEEDS

March 2, 1949

effective, without resort to meas¬
ures of compulsion
which them¬

and
proteins for
decades. But science makes
great contribution to human
welfare, not by research into the
past and mere accumulation of
its

reliable

records.

is

It

to

selves

make

would

research

Perhaps

this

task. If

experimentation,
that
nourishes
the higher education from which
may come the honorable, devoted
leadership that humanity so needs
in
this
intricate,
bewildering

unorthodox

In

possibly more
else, the people

anywhere
guidance to understand and

need

settle

wasting
issues.

big issues and
their energies

In

to

the
to

leave it to the chemists,

and the tools with which

we

can

enjoy and exploit it. The radio is

developed; and under our hands
is placed an instrument which is
utterly
beyond
our
untrained
powers
of construction or even
comprehension. But it is so fabri¬
cated that, after brief simple in¬
struction, a child can use it to
produce orchestral music, news of

that

by Mr. Richberg at
the American University, Wash¬
ington, D. C., Feb. 24, 1949. Mr.
Richberg is a member of the law
Davies,

Richberg, Beebe,
Busick & Richardson,
Washington,

D. C.

periments fail, but
the

amateur

be

.1

l

i

i

i

t




is not

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

an

The

>.

c.

to

buy these securities.

$7,500,000

ex¬

and

then

upon

that

now

stumbles

later

competent

exploited

by

of science

men

Rockland

more

and

For the

First
reasons

indicated I

Dated December 1, 1948

scientist, to suggest the desirabil¬
ity of research to develop a few
ideas

new

and

be

techniques

useful

Mortgage 3H% Bonds, Series C due 1978

I

am

venturing on this occasion, as a
penitent politician and amateur

might

Light and Power Company

of

commerce.

Due December

1, 1978

Price 102%% and accrued interest

that

ambitious

to

statesmen, and might eventually
improve the government of the
United States.
One

idea

mental

is

that

The

the

division

of

funda¬

political

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

thought in
tween

our country is not be¬
conservatives, liberals and

radicals. Indeed the word "liberal"
has been given so many

HALSEY, STUART & CO. Inc.

meanings

of

we

one

The

who

sort

all be

or

called

believed above

others.

for

He

OTIS &. CO.
was

all

believed

a

man

things in

himself

individual

liberals

another.

original liberal

freedom
in

can

unnecessary
<

announcement

permits him to spend sleep¬

impossible. Thousands of such

that
*An address

,i

This

is

challenge to be picked up first
by an amateur, because it is the
happy ignorance of the amateur

tech¬

physicists and the engineers
our
physical world

of

it

a

can

improve

firm

Indeed

petty

ends.
can

impossible

an

challenge to the

on

niques necessary to achieve their
We

is
a

scientist.

"clue to the Treasure-house" that

the

use

it is

avoid

government

and

so

to

especially,
the people need guidance to un¬
derstand

of

less nights seeking to achieve the

government,

than

to

us.

destructive

self-government?

into the unknown, and courageous

world that lies around

self-government

be

and

GREGORY &, SON

(incorporated)

incorporated

BYRD

for

BROTHERS

R. L. DAY &. CO.

ROGER

S.

particularly

freedom

government

from

all

February 25,1949

restric¬

^

».

*

*

*

...

i

i.».

•'a.

>

-.i

A

>M('i

and

by announcing that he is

$10,000,000

radio.

a

the

government

a

to

much

principle?

new
y

it

to

a

So the politician
who is en¬
gaged in taking away your free¬

persuade

it; and persuade the voters

that

assume.

his

facturers and politicians to install

call

because

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

a
people to
guidance. He may in¬
vent a voting machine and per¬
suade commercial-minded manu¬

,

in

word.

who

an

The

authority with

of

over

happy and

and

This

hard¬

army

Paternalists Are Not Liberals

paternal govern¬

a

against all

can

virtuous.

the

scoff,

and

government

tyrannical
abuses
of
power?
The
political

political

humanitarians

admirable

insurance

ships,

dif¬

ideas

new

in

I

scientist,

most

is

with

them.

use

why it is

advance

and

you

modernised

men.

But

a

for

am

neighbors than those greedy
makers who destroyed the

felloV

association.

liberal

money

experimentation,
develop
techniques of government

and teach

These

more

I

operating them with a ruthless
disregard for the welfare of their

original liberal*wanted to
your right to make and
spend your own money, and other
ancient rights of free enterprise,
speech

these

that

freedom of private enterprises by

The

free

think

money

personal

preserve

The

not

at

liberals.
far

better

conduct and activities.

notably liberal in spending

political

on

factual

of

students

have been

their

on

ernment that collects a
large share
of the earnings of its
children so
that Uncle Sam can
provide them

have volumes of

we

discourse

present

man

do

•scoffing

angelicize weak hu¬
beings with all necessary

restrictions

sur¬

your

dependents, and for any¬
earn enough
for his own insurance.

Please

to

bold

^movements and programs of the
past,

and

away

govern¬

earnings,
and
with
this
provide insurance for you

to pay

strong government to liber¬

a

alize

the

its

children are
employed and
properly housed and fed and have
no fear
of want, a
paternal gov¬

else who doesn't

one

things in freedom

has been accomplished, the politi¬
cal scientist must, by research and
new

more

regard¬

us

for

unemployment
modernized

that

19

ment that is to make
sure that all

and your

The modernized liberal be¬

lieves above all

Unhappily the political scientist
must create for

tions.

for

dependents, in¬
the hazards of

The

age.

thinks

should tax

money

man,

man

old

provide,

to

his

against
disease,

accident,

major objective of higher education is to develop a leadership of trained
and well-informed
persons who may guide their fellow men toward a better world. It is not
expected that this guidance will be always welcome or frequently followed. The idealized
or

money

and

surance

thought

liberal

should be free to make

enough

a

average

original
man

a

himself

Deploring misconceptions regarding "liberalism," NRA Chairman under Roosevelt Administration points
paternalistic trend in governmental policies under false guise of "liberalism," and proposes a coali¬
tion of Democratic and Republican leaders to
fight paternalism and to support the "liberalism" of local
self-government. Says this is essential to preserve constitutional government and its success could
to

a

your rights to control your
business and social relations.

away

Where and What Is Liberalism?

be achieved in

(975)

PALMER CO.

20

(976)

THE

& FINANCIAL

COMMERCIAL

Thursday, March 3, 1949

CHRONICLE

ducers

Standard Delay

Sgtahr Answers Pleas for

Canadian Securities
By WILLIAM J. McKAY

Denies

would be

able paper.

=

The opening guns have just been fired in the forthcoming Cana¬
dian election campaign.
The Liberal incumbents in a bid for the

reserve

now

was on

Farmer vote have announced that the initial price for wheat for the

five-year period ending Aug. 1, 1950, has been increased from $1.55 to
$1.75 per bushel. The initial pay-^
ment
covers
deliveries to ttie lar to parity with the U. S. dollar,
Canadian Wheat Board since Aug. the. Conservative opposition is at¬
the
Liberal
regime
at
1, 1945 and applies only to wheat tacking
grown
in the Prairie provinces. points where it is the most vulner¬
able. It has long been a source of
This attractive bonus to the Prai
lie farmers is estimated to total general discontent and a certain
$214 million and the distribution bewilderment that, at a time when
is
will commence March 31. Whether Canada
passing
through
a
this gesture will suffice to lure the period of unprecedented prosper¬
disgruntled
Farmer
vote
away ity,
the Canadian individual is
from the CCF and Social Credit subject to so maqy personal re¬
Also al¬
party lines back into the Liberal strictions and controls.
though valid .reasons can be ad¬
camp is highly debatable.
On the other side of the political vanced to justify the July, 1946
fence
the
Progressive
Conserv¬ currency move, it unfortunately
atives

have

commenced

their

of¬

coincided

with

international

de¬

the

at

change Control Board Act is pre¬

time

same

to

restrictions

wartime

all

remove

would

like¬

,

Executive
V i

c

posits

e-P resi¬

dent

bonds

Economists'
i 11

e

feared

Monetary Pol¬

icy, in
on

a

state¬

"The

ques¬

of

quacy

"The

ade¬

of gold

reserve

com¬

claimants would

be withdrawing

that

argument

are

we

practically at war as a basis for
opposition to a gold standard war¬
rants a reminder that we fought
the first World War without sus¬
gold

payments

domesti¬

cally. Today, while our people are
denied access to our gold stock, it

been .made

statement has

"The

that

of

because

Communism

we

the
are

danger from
safer with an

irredeemable currency. This argu¬
ment

have

should
rency

down

comes

like

to

irredeemable

Socialist

We

this:

cur¬

England

or

value

true

the

as

a

leader

also

had built up
U. S.

its

possible and within
the

and

Western

oils,

Base

metals

despite further

Bretton

ever

had during

est

resistance

to

downward

the

the period when

the Canadian was trend.
advanced the in¬
ternational
position
then, more
than at any period in Canadian
history."

at 90 cents, and

Halsey, Stuart Offers

In

raising the issues of onerous

restrictions

on

the freedom of the

individual, and the government's
action in raising the Canadian dol-

Calif. Electric Bonds
Halsey, Stuart & Co. Inc. offered
the

to

Feb.

public

$3,000,000

25

California Electric Power Co. first

bonds,

mortgage
June

the

its

3%

series

due

1; 1978 at 100% and accrued

interest.

CANADIAN BONDS

bonds
bid

firm

The

of

.was '

awarded

Harry Sears, President of Calaveras Central Gold Mining Co.,
in letter to Dr.

the

demns the

MUNICIPAL

recent

)

CORPORATION

bonds

sale

of

A. E. AMES & CO.
INCORPORATED

•

TWO

WALL STREET

NEW

YORK 5,

WORTH

4-2400

N. Y.

NY




and

100,000

the sale
from/the"

shares

of

stock, together with
company funds, will
be used to
retire a bank loan of $500,000 and
to
finance the
company's esti¬
mated construction requirements

1-1045

producing gold mine is a fac¬
the gold deposits its raw
Newly mined gold is its
factory-processed
product.
The
A

tory,

stock.

mine,

or

operated by private capital.

with the

ness

same

freedom

en¬

joyed by every other industry.
Gold in its natural state is ex¬

empt
few

government control
regulations, but

from

under

Treasury

gold producers have much

their product in

of

this form as they
to process it to

gold producers, who* contribute most

by
to their valid¬

require that the gold

tions which

in at $35 per ounce, a

turned

be

price picked out of the atmosphere
and established some 15 years ago.
I

mines

Gold

owners

by

held

Whether

government.
location
these

are

their

by direct grants from the
or

as

grants

are

by

valid

claim
ground

patented

contracts,

specifically conveying the gold,
and
they are property. Rights
acquired against the United States,
arising out of a contract with it,
are^ protected by the Fifth Amend¬
the

ment

of

holds

that

"Shall
without
shall

no

Constitution

be deprived of
due

private

which

person

process

of

property

property
law,

be

nor

taken

in¬

search for

for

of

But

de¬

profit."

producers to

to

then

say:

you

narrow

your

of the extinguishment of private
miners' problems are ownership and enterprise, within
simple ones basically. Their un¬ a national industry, and the sub¬
put to the Treasury" at a fixed
dertaking requires that they keep stitution therefor of government
price.
their costs below the fixed selling
for 1949.
authority.
The text of the letter, which has
price of $35 per fine ounce, or
Regular redemption prices of' been furnished "The Chronicle"
If it be claimed that '.he Treas¬
close down. Today, they contend
the new bonds are scaled from
ury acts in the interest of public
follows:
that they cannot keep their costs
1041/s% to 100%, while the spe¬
policy, then, having denied the
Dr. Walter E. Spahr,
below $35 per ounce and, of course,
cial redemption prices range from
producer "just compensation" it
New York University,
they do not wish to close down.
101% to 100%.
is still a violation of his rights.
New York City, N. Y.
As a consequence, they are em¬
California Electric Power Co. is
The principles of constitutional
ploying a variety of arguments in
My Dear Dr. Spahr:
engaged principally in the genera¬
their efforts to obtain a higher law involved have been directly
Although you are an ardent
tion, transmission, distribution and
decided by the United States Court
price for gold. None of them can
sale of electric energy/The terri¬ supporter of gold and clearly rec¬
of Claims which ruled in 1946 that
have validity since a higher price
tory served covers extensive areas ognize that without it our mone¬
private property cannot be "taken
for gold would impair our mone¬
in California, including San Ber¬ tary system would be impotent,
for public use without just com¬
tary standard."
nardino, Ft i v e r s i d e and Palm part of your remarks published
pensation." The governinent had
Aside from the impertinence of
Springs and also sections of Ne¬ recently in the "Commercial & Fi¬
requisitioned 125,000 pounds of
vada.
The company, through
a nancial Chronicle," New York, on your words in thus airing your meat for the Army, and insisted
views from the ivory tower of the
subsidiary, sells ice in portions of the subject of a free gold market
that the packing house accept the
ardent
economist, you seem to
Imperial and Riverside Counties, seems to indicate the necessity of
OPA price in payment. The pack¬
have overlooked several facts and
Calif.
Other subsidiaries of the reminding you that we are still
ing house said it would lose mon¬
citizens of the United States and speaking as an owner and oper¬
company
supply telephone and
ey at the OPA price.
Admitting
ator of a California gold mine I
telegraph service in California and that we still have our .Constitu¬
(Continued on page 38)
would remind you that gold pro¬
tion.
.

CANADIAN STOCKS

gold

government

and

stocks for monetary use.

gold at a price fixed by the gov¬
ernment, and is denied the right
nying a free thinking, discard justice and equity to seek another purchaser and re¬
market
for and speaking of gold producers,
ceive a higher price, it is clearly
processed the very ones who can contribute a violation of his property rights
most effectively to the beneficial
gold and com¬
guaranteed under the Fifth
pelling gold effects you outline, you have this Amendment. It is a direct instance
justice

preference

PROVINCIAL

modity,

public use without just' com¬
pensation."
All gold mines contain gold in
In a letter, dated Feb. 22, written to Dr. Walter E. Spahr in refer¬ its natural state, that is the con¬
ence to statements made by the latter published in "The Chronicle"
dition in which the government
„(see
issue of<*>
granted it to the owners and that
You have pointed out the very
Jan. 27, p. 24),
is the condition
in which gold
economic producers find it. In or out of the
Harry Sears, advantages for world
President of uplift which a free market for
ground it still remains the private
the Calaveras newly mined gold will produce,
property of the owners. This is
Central
Gold when you say:
equally true whether the gold re¬
"Foreign trade will open up and mains -in
Mining Co.,
its
natural
state
or
Ltd., Angels expand when individual traders whether it is processed.
Camp., Calif., can get gold and other good money
When a producer is compelled
severely con¬ and go where they will in their to yield up any of this processed

99.515.

new

says

regulations that are unconstitutional and doubtful as
ity. Scores denial of free gold market.

competitive sale on

at

Spahr,

Ltd.,

effectively to beneficial effects of gold standard, are hampered

The net proceeds from
of

GOVERNMENT

rights, if they will assert them.

are

Objects to Spahr's Criticism of Gold Producers

York.

New

in

tone

The

dollars she

have

wide popular appeal.

Woods spectacular drilling results in Al¬
Conservative berta, were the heaviest losers in
stated "that Canada the decline.
The gold issues oh
the highest reserve of the other hand showed the great¬

of

terms

Agreement."

near

they

that

and

Canada is

non-gold asset cash is

as

being robbed,
important

realize that they are

compelled
funds, others would be making de¬ Communist Russia because they
posits,
thus
enabling banks to might throw us into an irredeem¬ some extent in order to extract it.
perhaps the only coun¬
This processing brings most gold
operate on the principle of aver¬ able currency should we try to
try in the world still operating
producers under Treasury regula¬
ages and to economize in the use make our currency redeemable.
under wartime
wise make

,

dollar

They never had it. Their
propaganda over the years, how¬
ever, has been so effective that
even some gold producers do
not

gold factory, is owned or
Grants
or title
to mining properties are
issued by the government which
is at the disposal and mercy of
having granted the full constitu¬
foreign central banks,
some
of
tional
rights to own and hold
which are dominated by Socialist
thereafter denies the
or
other
authoritarian
govern¬ property,
equal right to operate the busi¬
ments.

pending

restrictions, which
"If our Federal Reserve banks
of their gold.
shortly in the House of could take this step with favorable
"There is never "enough of any¬ were
able, under a gold coin
Commons, it is certain that it will chances of success.
thing to go around if it has value. standard of 35 paper dollars per
be strongly contested by the Con¬
: ^During the week
th|re w&s litoe There arb not enough bridges, ele¬ ounce, to pay out gold against
servative opposition.
The debate change in the external section bf
vators, subways, ships, or trains their note and deposit liabilities,
on this bill will also provide the
the bond market but there was a
for use if all who might demand they could pay out," points out Dr.
Conservatives with an opportunity
fractional rise in internal Domin¬
their
services
demand
them
at
to criticize the action Of the Cana¬
Spahr, "over $23 billion, or 70ions in sympathy with the strength
once.
dian
100 times as much as they could
government in raising the of free funds which rallied on
"During
1915-1932, when
we
Canadian dollar to its present par¬
light trading to 6%%. The cor¬ were on a
gold standard, the aver- j Pa3r out
ity.
porate-arbitrage rate was steady
age ratio of gold to money and de- recent months."
In the cou'rse of his last weekly at 14y2%-14%. Stocks after touch¬
press conference Mr. Drew prom¬ ing in most instances the lowest
ised "that a Progressive Conserv¬ levels of the year finally rallied
ative Government would revalue in sympathy with the improved
Canadian

der, rule or practice, under pre¬
tense of authority.
V
-An essential part of the New
Dealers' drive against gold was
their claim of exclusive right to
control it. They possess no such

quarters, the
There is a vast legal difference
gold stock to money between newly mined gold, a comf

certain

our

deposits and such E bonds would
still be as much as 10.5% for 1948.

Feb. 25.

tion

considered the equiv¬

deposits and utilsubversive purposes'as

in

of

ratio

released

ment

for

izable

on

e

8.6%. In 1948, the aver¬
If $32 billion of E

12.3%.

were

alent to demand

National Comm

was

age was

the

of

sented

the

Deal planners
of action this

achieved by a department or¬

was

stressing dangers from

the Liberal gov¬
by their new and

Parliament, to adopt

New

its

give

subversive elements through
holdings of E bonds or from alleged inadequate gold supply as back¬
ing for our monetary system under a gold coin standard at 35 paper
dollars per ounce of fine gold are challenged by Dr. Walter E. Spahr, right.
Statements

against

arbitrary controls over agricul¬
ture, industry and finance. When
therefore the bill that provides for
the extension of the Foreign Ex¬

laws in

the desired freedom

gold standard.

velopments, notably the British
pared with lia¬
ernment
led
.currency crisis, that were largely
bilities
and
virile Party Leader George Drew. instrumental in throwing a heavy
demand
Walter E. Spahr
In a recent speech at Montreal the pressure
on
the
Canadian ex¬
against it," Dr.
Conservative
spokesman
casti¬ change reserves.
Spahr says,
gated the government for its at¬
It is thus no difficult task to "is linked since the 17th Century
tempts to obtain extensions of its convince a large body of the Cana¬ with the introduction of the frac¬
wartime emergency powers, which, dian electorate that -the unpopular
tional reserve system when the
in his opinion, have no place in
austerity measures were the direct world began to depart from the
the peacetime administration of result of a grievous error on the
100% reserve of the goldsmiths
any democracy.
Mr. Drew pointed part of the government in chang¬
and when banks created note and
nut that under wartime orders still
ing the parity of the dollar. The deposit
liabilities in excess of
in force the Canadian government
proposal to permit the Canadian their metallic reserves.
The as¬
is empowered, without reference dollar to find its "true" level and
sumption was that while some
to
sweeping
fensive

not

and dethan during period when nation

Says ratio of gold to money

posits is greater

.

Congress was. told to pass

spite of'doubts -as to their validity 1
or constitutionality.
If the law did

is insufficient and that nation
safer from Communism under irredeem¬

gold

hampered by regula-

are

Tions-'dating back to that'era when

Nevada.

Harry Sears

sell their out¬

"The gold

Volume

169

Number 4782

THE

COMMERCIAL

Is

the impossible.

In this case, mak¬
ing the dollar redeemable in gold

Paper

is

Gold Is

kets,
We

-

and

Answering Dr. Spahr's criticisms of gold mining industry for seek¬
ing higher price for gold, mining executive denies this is a case of

in

I:

gold.

<

Says making the dollar redeemable in gold at $35
impossible and undesirable unless we go back to 1939

gold market.

Free Gold Market"

by Dr. Walter Spahr, Executive Vice-President

has

taken

Monetary Policy. Dr. Spahr

on

$35

of supply and demand affecting both gold and paper."

mining

task

lorces

to
(a)

for

asking for

believe

I

above

is

state¬

a

which gold miners and

ment with

an

the

"increase

in

economists would oe in full agree¬

the

of

ment.

price

gold,"
(b)
asking for the

out

the

Value

of

we

market

p u r p o s es

Spahr
demption
of

(c) asking for

subsidy

a

the

industry.

He

the

of

sick

1939-.

taking

ther

when

agitation,

creating

rapidly

becoming

mine

goia

people
(Italics

the

United

Dr.

explain

States

be

the

most part represent
per¬
opinions on what has ap¬

highly

a

contro¬

versial

subject.
In the second
place, the gold miners are willing

to concede

a

voice to anyone who

has

anything to contribute to such
discussions, but they will fight for
their right to do the same.

In the

third place, Dr. Spahr's arguments

will not stand up under searching

analysis.
The

tenor

ticle leaves
sion

that

Dr.

of

one

he

Spahr's

statements

by the gold miners will lead to
great
about

of

deal

the

the

value

a

confused

thinking

relationship

between

of

gold and

our

paper

and that gold miners will

money

use
some
sinister power to in¬
fluence people to "raise the price

of gold."
First

j,

of

all, the gold mining
has no more power to

industry

"increase the price of gold" than
they do the price of chickpeas and
perhaps even less.
'The
forces
which
in

determine these variations

price

quote from his article:
"Whenever

the

fixed

rests

direct
the

link

cline
terms

be¬

terms
the

of paper

itals

or

in¬

of gold will de¬
price of gold in
will rise.
This is

IS

GOLD

(the

cap¬

mine).
Under such con¬
ditions, the paper money price of
gold will be determined by the
are




recognized.

dollar with gold.

This

applies

rencies.
tions

When

one

reads

not

relative

spective

values

currencies

if mankind

na¬

their

one

sented before

on

in

re¬

wonders

be

order

that

determined

against

gold

"It

questing

for

that

the

where

value

dollar

industry
free

a

is

market

normal

miner will

gold,

whether

pounds,

pesos

give his
that

be

or

dollars.

be

Nelson

does,not change.

the

that

is

currency

essential
in

when

a

.

gold

.

Can you
Now

imagine that!

he has

just about reached

the conclusion that he will not be

pushed around

anymore

guided theorists.

He

is

of

have his say whether it is found

in

palatable

They to stick

believe that this market should be

or

as

will

He

can.

not and

he

serve

his

miner could trade his product for

gold becomes less confused rather

currencies,

than the

will

In

China,

buy the

they

same

say

a

amount

This announcement is not

market, established in the

but

where

only the

currencies

his

country's

seeing

that

interests

the

reverse.

;

:

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

$3,000,000

California Electric Power

Company

First Mortgage Bonds, 3% Series due 1978

worth

Dated June 1, 1948

Due

June 1, 1978

Price 100% and accrued interest

HALSEY, STUART & CO. Inc.

result

of cutting our dollar free
gold has been to decrease its
purchasing power. How and why

of the

In

part

February 25,1949

by the increasing of wages and in
part by the high increase in taxes,
both of which are reflected in the

selling

of

price

increased

type of
Wages were

every

part

as

of

This announcement is not

political

a

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

an

The

taxes; were increased

program and

to

buy these securities.

partly because of the war, partly
because of a political program and

partly because of changing world
The paper dollar has

$2,150,000

conditions.

value in itself, its sole value is

no

in what it will buy,

and today it

will

buy only 50 cents (in gold)
of goods.
Dr. Spahr pro¬
posed to sell everyone who brings
in a paper dollar 1/35 of an ounce
of
gold when the paper dollar
worth

will
of

only buy

1/70 of

an

Worcester Gas
First Mortgage

ounce

If any
fraud has been proposed by any¬
gold

worth

of

goods.

Light Company

Sinking Fund 314% Bonds,

Series A, Due 1969
Dated

this is it.

one

February 1, 1949

Due

February 1, 1969

Pursuing this type of thinking
to

its

ultimate
with

must

selves

it

as

one

program,

We find

Price 101.47% and accrued interest

our¬

price in

a new

goods twice as high

our

was

new

have?

establishing

gold for
as

conclusion

every

we

in 1939.

Every exporter

of

will

markets,
a

find

himself

perhaps
of

program

losing

forever,
making the

The

Prospectus

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

under
dollar

redeemable with our present wage

HALSEY, STUART & CO. INC.

and tax rates.
Redeemable
Ounce

The

of

gold

Currency at
Gold

miners

$35

per

Impossible
are

practical

March 2, 1949

best

thinking

an

The

from

power

he

and

tionship.
dollar

free

Tne only
the amouni
goods it will buy.
Today's
dollar will buy about one-half oi
wnai it would in 1939, so the net

decreased?

as

own

United States where not

measureu?

purchasing

going

a

of

been

is

close to the facts

measurement left is by

the

by mis¬

going to

rious ideas pertain as to that rela¬

If one cannot measure the value

dollar

pe-

>

of currency against gold then how

has

a

In various parts of the world va¬

experience of centuries.

be

that

.

envisaged for the postwar

gold it drifts to lower and lower
This has been the

it

19,

mining should

levels of value.

can

Dec.

on

He says, and

rightfully, that
currency is cut loose from

pre¬

follows:

as

riod."

as

trade

ounce

price

be
'

re¬

will determine the price at which
the

is

reduction

the proper

the

Donald

1944, in part

to be.

testimony

House Committee

a

which Mr. Milo Perkins wrote

Mr.

A Free Gold Market Desirable

In

nearly three years under the

He has read in the

is really as intelligent

it is purported

as

of

govern¬

infamous Limitation Order L-208.

resorting to barter because

they cannot reach agreement
the

for

cur¬

of

the

seen

plants, or taxes, or paying for
keeping water pumped from his
mines, not fox days or weeks, but

relationship

only to the dollar, but to all

curren¬

goods

direct

a

be

existing

has

arbitrarily

close his mines
short notice with no provision
made for paying insurance on his

gold miners only ask that

present

»

on

in value,

irredemeeable

in

GOLD

decrease

the

of

i

ing power of

He

ment

an

a

automobiles, of industrial ma¬
chinery
and
of
manufactured

a

simply because PAPER IS PAPER
AND

Actually,

or

1 redeemability

and

paper

is

of

upon

process

value

Gold

Spahr talks of increas¬

Dr.

what do

tween paper money and gold is
broken regardless of whether the

link

new

he does for 1/35 of

done

lowered.

or

measured.

but

much

stronger than
they.
In fact, Dr. Spahr makes
this
quite clear himself and I
are

is to

he

most

being

is

goods and services.
ar¬

with the impres¬

believes

at¬

that

goods for

many

of gold.

The

the

as

established

would

recognize
relationship of purchas¬

gentlemen
premise and
price of gold can

less.

'

-

between people wno
profess to
know something of the matter anq

be

billion

others.

are

ing the price of gold he recognizes
not that the gold is worth more,

against the people of tne United
States is pure balaerdash.
In the
first place these discussions are

to

$5

person

procedure

These

why.
that the

the value of gold

The statement that the
agitation
the gold miners is
developing
into a case of tne gold miners

peared

thinking

raised

When

of

sonal

a

the

of

some

cies increase

ket, but they do not advocate
subsidies. Tney do not believe in

for

is

are

record

increased price for gold"
and they do advocate a free mar¬

>

practical

ounce

standard against which currencies

tne

-

to

opposed

that

an

subsidies.

another

increase

start with the wrong

The gold miners- do advo¬

cate

is

tne

continuing further I
matve

re¬

We, the gold miners,

the

Spahr's.)

to

debt

the

to

dollar

a

as

or

,The gold miner, besides being a
practical man, is also a patient

find

you

21

could be traded for currencies
for gold.

ideas

man.

should deliver

War

$5 billion per
another is the in¬

of

ounce

the

believes

who

anyone

was

to

There

per year.

World

an

places

vocate

is

versus

of

like

clear.

of

case

inteiesis

are

Before
wouia

a

which

amounting
No

of

other

but nowhere-can

vary,

of wounded

care

1/100 of

as

Tn

(977)

by Dr. Spahr and others wno ad¬
such a policy, and I will

consequently,

situation

a

to

he

that

confused

says:

"Their
is

and

believe

the

money
by
gold for $35.
a "price
in¬

of

opposed

crease"

he

on-

as

paid

One of these is

veterans

more;

or

terest

gross tax

same

amounting

year

be¬

logical

paper

free market.

far¬

goes

1939

have assumed new bur¬

the cost of

the

advocates

ounce

one

is

ne

gold min¬

ing
Neil O'Donnell

gold,

for

than

purely
would

<

Not Gold

Dr.

and

for

tempt to get wages and taxes back
to
1939
levels.
Therefore, the

Currency Changes,

C

free gold

a

and tax

wage

taxes

lower

be

to

assessed in

and

but

nave

I

establishment
of

would

; /Aj.->;/■?

governmental

II,

the^

industry

ounce,

per
we

so

'

gold

redeemable

dens which would have to be

On Jan. 20 of this year there appeared in the pages of the "Com& Financial Chronicle" an article entitled "The Question of

of the Economists' National Committee

dollar

do

fact,

have

and

at
to

goods

gold.

as we

back to 1939

go

In

mercial
a

gold

cause

Advocates free

lax rates.

order

to

rates.

per ounce

wage

-

in

vs.

the

of

goods at the
had in 1939

our

gold price
make

and

People of the United States." Asserts,
since gold is standard of value, its value does not change, but
actually the currencies increase or decrease in value in terms of
is

procedure
gold of our

a

is undesirable.

such

as

keep

can

'

-

.

same

"Gold Mine Interests

such

will double the cost in

Mines Corporation,

Grass Valley, Calif.

-

noted j

As

salable goods in the world's mar¬

Executive Vice-President, Idaho Maryland
• •

attempting the impossible.

L have

By NEIL O'DONNELL

,;;

CHRONICLE

FINANCIAL

and they would not attempt

men

\\

&

by

about

22

(978)

THE

COMMERCIAL

&

FINANCIAL

Cruttenden & Go. to

Securities Salesman's Corner Admit Robert
CHICAGO,

Podesta

partner

Confidence

but
and

—that this

and

to

is

an

that will survive as

axiom

create—that

without

this

long

as

men

Street,

He

household

of

out

was

furniture

and

came

Podesta

two small
job. His sole assets consisted of some
$75 in his pocket. It was in 1933, at the

see

the head of

a

things
that his old friends were no longer connected with
the investment house where he hoped he could get a job. Remember
this was in 1933 (and if you think that business is a little bumpy
changed

so

Anyway he asked for a
job as a salesman. In those days drawing accounts just were NOT.
So one of the first things he was asked was, "How much money have
you got?" He told his prospective employer that all he had was $75
in his pocket, and that he also had his wife and two children at
home that had to eat and have a roof over their heads. Of course he
today you should have been around then).

was

told

to

forget

about it—that it wasn't possible in times like
at that time to do enough business to get a
of a job such as he was attempting. But he said

those which prevailed
start and make

a

go

could DO IT. He told his prospective boss to give
him a desk, a telephone and some names to call on, and HE SOLD
HIS FIRST PROSPECT.
He got the job.
He not only got the job
but he went to work. He told me that he never even thought of the
thought he

he

agerofthe
trading de¬
partment f or
Robert

Podesta

A.

Julien
&

Collins

most

Co.

of the

due,

Offers

ferent

Inc.

and

underwriting

the

Co.

&

Read

Dillion,
associates

are

offering by

Southwestern Public

Service

of

Co.

common

new

to its common

the

stock may

common

the

for

stock

new

rate

the

share

at

share

for

holders of
subscribe

offer,

company's

the

shares of

112,486

stock, $1 par value,
stockholders. Under

each

$25

at

of

one

per
new

shares held of

11

sub¬
scription warrants which will ex¬
pire at 4 p.m. EST, March 8, 1949,
carry an additional right to sub¬
scribe, subject to allotment, to
shares not taken by stockholders
Feb.

record

The

1949.

23,

grocery

just went out and picked out a few GOOD SITUATIONS that we
in with all our conviction and sincere understanding—
and if we made up our minds that come hell or high water that this

amount of

believed

of

not going to the dogs—that people who bought good
securities and received income from those securities would someday
like to thank us for selling them—within TWO WEEKS AFTER

from the

was

outstanding serial notes
Cash proceeds
the sale of the stock and

the

from

company.

private sale of the bonds
and debentures are to be used for
the construction of additions and

THAT WAY, AND TO improvements to the company's
WORK AGAIN WITH OUR HEADS AND OUR LEGS AS WELL— properties
and
to repay bank
IF WE GOT UP OFF OUR CHAIRS AND WE STARTED TO MOVE loans obtained for such purposes.
FORWARD FOR
A CHANGE — WE WOULD HAVE A BULL
Giving effect to the offering to
EVERYONE OF

US STARTED- TO THINK

MARKET STARTED AGAIN.
At least we can have one of our own.
can

work.

stockholders

if he is a man he does it—

When a man has to do a job;

and when he gets

-

We can believe—and we

started doing it, the funny part of it is

THAT HE

BEGINS TO LIKE IT.

pany

debt

Halsey, Stuart Group
Offers Rockland Bonds

i

these bonds will be applied to re¬
tire $7,500,000 of

short-term bor¬

rowings already made for interim
financing of a major part of the
company's
General

construction
are

program.

prices

redemption

the series C bonds

for

scaled from

Jerome Murtha V.-P.
Jerome

P.

Murtha,

sales

demption
prices
102 y4% to 100%.

Graham Parsons &

Rockland Light

range

from

Homer

and Power Co.

is engaged in the business of gen¬

erating,

manufacturing,

and

purchas¬

Broad

O'Connell

its

(1) The Act has greatly in¬
vigorated the trade-union move¬
ment. It has made union leaders

the

and

the

Vice-President' and

The

Oklahoma

Dividends

on

ended

Nov.

30,

the

common

stock

share for the
fiscal year ended Aug. 31, 1948.
A regular quarterly dividend of
50 cents was paid Dec.
1, 1948,
totaled

$1.70

per

another dividend

of 50 cents

importance

public

of

good will or ill will.

closed shop and has

establish

helped unions

union

the

shop

in

plants where the only form of
union security had been a main¬
tenance-of-membership clause.
(3) Although the Act temporar¬
ily interfered with the organizing
activities of some unions by caus¬

or

defective in a number
of ways, including the ridiculous
requirement that a government
agency conduct a vote on whether
safety

are

the

not

or

failure

to

report

of the

the

on

imperil the

safety, and the

or

provide

settlement
a

shall

men

national health

dent to

(2) The Act has demonstrated
the overwhelming desire of union
members for the union shop or

health

national

the

threaten

for any final
dispute beyond

case

by the Presi¬

Congress.

provisions

the

Among

should be included in
to

the

Taft-Hartley

accord¬
the fol¬

Act,

Slichter,

ing to Mr.
lowing:

which

successor

a

are

(1) Protection of the right to
organize, against the use of eco¬
nomic
coercion
by either em¬
ployers

or

unions.

ing them to devote their organiz¬

Protection of the right of
workers to pick their bargaining

ing staffs to union-shop elections,
it has not halted the rise in union

from any source.

which
increased
during the first

membership
about

much

as

(2)

agents

interference

from

free

(3)
Authorization
of
closed
shop contracts, but protection of

year

of the Act as during the year
preceding its passage.

the right of workers to

(4) The Act has greatly stimu¬
lated interest in political activities

tion

trade
unions
and has
helped unions to increase their
political power.
(5) The Act has had no lasting
effect on the number of unfair
among

practice

brought

charges

against employers. About one un¬
fair labor practice charge has been
brought against a union for every
five brought against employers.

The Act has weakened the

(6)

of

influence

Communists

in

the

movement, but other
conditions have contributed to this
trade-union

result.

reasonable

union

of

join unions

and

terms

protec¬

from

members

ar¬

bitrarily being deprived of mem¬
bership or being disciplined.
(4)
over

Provisions making strikes
jurisdiction of unions an

the

unfair labor practice.

(5)
Workable provisions
dealing with disputes which
peril the national health or

for
im¬
safety.

Lovejoy Admitted to
Partnership

Bache

Donald

M.

Lovejoy,

member

a

of the New York Stock Exchange

the

Among
Professor

the law

on

provisions

Slichter

finds

which

good

since

in

1933, has been

admitted as

are:

agents

gaining

without

coercion

or

restraint from either employers

or

unions.

(3) Removal of the ambiguity in
the Wagner Act as to whether
supervisors are employees within
the meaning of

the Act.

(4) Requirement that both em¬
ployers and unions bargain in
good faith.

Donald
a

M.

Lovejoy

genergl partner of Bache &

Co.,

36 Wall Street, New York City,
Limitations on financial effective March 1, it is announced.
payments by employers to union Mr.
Lovejoy
was
formerly
a
representatives — especially those partner of Jenks, Kirkland & Co.,
provisions
designed
to protect of Philadelphia. He is a resident
health and pension funds against
of Greenwich, Conn.

(5)

abuse.

formerly
of

Co., Inc., 25

Director

the

unions

provisions of the Act for
with
disputes
which

gaining representative.
(2) Protection of employees in
their right to choose their bar¬

1948, were $15,316,343 and net in¬
come was $3,674,116.

Marx Co.*

as a

of

Opens Branch

SPARTANBURG,

Co., has joined
&

and

months

letting

of

organizations become too
dependent upon the government
and
has
demonstrated to trade

their

The

dealing

union other than the certified bar¬

company

12

dangdr

the

by demonstrating
strong desire of workers for
a
union
shop but they are no
longer needed and should not be
required by a new law.
useful purpose

op¬

Service

the

territory served by
includes the Texas
Panhandle,
the
South Plains region of Texas and
the Pecos Valley region in New
Mexico.
Operating revenues for
tricity.

the

or

generation,
sale
of
elec¬

Public
is

business

supporters

of

■

the

ponents of the law.
Among the
most important results have been
the following:

aware

w

i

shop elections served

The union

y

Slichter, have
dif¬
anticipated by

those

than

either

prohibit the closed

(1)
Protection
of employers
against strikes and boycotts de¬
signed to compel them to violate
the
law
by bargaining with a

is payable March 1, 1949 to stock¬
holders of record Feb. 15, 1949.

manager

Street, New York City,

ing, transmitting, distributing and the firm.




syndicate

com¬

stock.

common

transmission

and

Of Homer O'Connell

105^4% to 100% while special re¬

of

Southwestern

a

e

1,349,832

stock, and

preferred

Co.'s

the

will have outstanding funded
of $44,133,000; 94,600 shares

shares

selling

sale of the

the

and

debentures

and

bonds

of

electricity and gas for
lighting, heating, industrial and
general utility purposes. The com¬
pany
serves two
areas in New
York State, the Eastern Division
An underwriting group headed
comprising practically all of Rock¬
by Halsey, Stuart & Co. Inc. on land County, and the Western Di¬
Feb. 25 offered publicly $7,500,000 vision
comprising parts of Orange
Rockland Light and Power Co. and Sullivan Counties. The area
first
mortgage
bonds, series C, served is about 625 square miles.
3%% due Dec. 1. 1978 at 102y4%
Associated in the offering are
and accrued interest.
The group
Otis & Co.; Gregory & Son, Inc.;
was awarded
the bonds at com¬
R. L. Day & Co.; Byrd Brothers;
petitive sale on its bid of 101.58. and
Roger S. Palmer Co.
Net proceeds from the sale of

ing the right of workers to obtain
or
retain
union
membership
shop altogether.

keen very

Utility Stock

we

country

therefore, is to protect the closed
shop against abuses by safeguard¬

Professor

Prof. S. H. Slichter

labor

was

gravely disturbing em¬
ployer-union relations in many
industries.
The
wise
procedure,

A c t, a ccording to

Dillon, Read Group

well-es¬

a

which is the

without

rather than to

1

is

shop

institution

outgrowth of American conditions
and which cannot be prohibited

the Taft-Hart-

to

that

impor¬

closed

tablished

tant results of

that date.

on

The

em¬

Some of the

will retire from

Tuerk

Conrad
the firm

-

good and bad
points in the
present a n d
the proposed
legislation.

bills unpaid, of the clothes that upon the exercise of their pre¬
had to be bought. He never even thought about what would happen emptive rights.
if he didn't do business.
He just went to WORK. He worked day
An
agreement
between
the
and night. He worked-until 1Q at night for a whole year.
HE PUT jcompany and Dillon,- Read & Co.
93 ACCOUNTS ON THE BOOKS IN ABOUT NINE MONTHS AND Inc. provides that the investment
HE MADE MORE MONEY IN ONE YEAR THAN HE HAD EVER banking firm will act as dealerMADE BEFORE IN HIS LIFE.
He told me he finally had to quit manager of a group of securities
such intensive effort because he couldn't keep it up. But the point dealers in soliciting the exercise
is that he believed he could do it and he worked, and worked, and of subscription warrants.
worked
' V^
-■::>-V"/., ■;
Prior to issuance of the stock,
I do believe that work is the best antidote for worry. I am sure
the company will sell to three in¬
that it is the greatest tonic that anyone can ever find, and if you stitutional
investors
$4,000,000
believe in yourself no^one or anything can keep you from success. first mortgage bonds, 3V4% series
This may sound trite—in fact I know that it is—but if you want a due
1979, and $7,500,000 deben¬
classic example of the power of supreme self-confidence in the face tures of 3V2% series due 1974 in
of what everyone said was insurmountable odds—Harry Truman's accordance with a contract pre¬
campaign and his eventual election is living proof that the greatest viously
negotiated
by
Dillon,
force in life is SELF-CONFIDENCE.
I also believe that if those Read & Co. Inc. payment for
of us in the securities business threw all thoughts of failure out of $2,170,000 of the new debentures
our minds—all pessimism about the future completely aside—all in¬
is to be
made by delivery for
hibitions regarding the market and the future course of prices—if cancellation of a like principal
rent

em-<s>

on

points out the

was

formerly man-

certain firm where he thought he might be remembered, but

had

on

March 15. Mr.

a

down to Wall Street and he went to

and

ployee
rela¬
tionships and

Exchanges,

of Eco¬

nomics," published by the Department of Economics of Harvard Uni¬
versity, discusses the effects of the Taft-Hartley Act on trade unions

Chicago Stock

depths of the depression and he was out of a job.

He

mem¬

noted Harvard economist, in an article

published in the February issue of the "Quarterly Journal

plo.yer

and

He had been
a
securities salesman back in the twenties but he got out of the
business in 1930 and then he tried several other lines, but like many
others he just could not make a go of it. Finally, he decided that he
ought to go back to the investment business. He remembered that
he had done fairly well in the good years, and after all there was
little else that he hadn't tried.
He was really up against it—like
many others in those days. So possibly out of desperation he figured
out that the securities business might offer him the chance to make
a living that he could not seem to find in other lines.
very

shop contracts.

bers of the

that if you have it, eventually success is a certainty.
Some years ago I knew a fellow who had a wife and

children.

of labor. Favors authorization of closed

power

New York and

try to do

spark real success cannot be,

Salle

La

political

Prof. Sumner H. Slichter,

&

Co., 209 South

already
certain
column,
be that as it may, there is one thing that bears repeating over
over again.
On this point I am certain that there is no substitute

increased

a

in

Cruttenden

There is very little that is new that most of us do not
know regarding the art of salesmanship. Sometimes I feel
that I am saying the same things over and over in this little

of "Quarterly Journal of Eco¬

nomics," holds law has invigorated trade union movement and has

will

become

Analyzes Taft-Hartley Act

Harvard economist, in current issue

Robert

—

==========

By JOHN DUTTON

Prof. Slichter

;

Podesta

ILL.

Thursday, March 3, 1949

CHRONICLE

S.

C.—Marx

&

Co., members of the New York
Stock Exchange, have opened a
branch

office

at

505

East

Main

Among the provisions in this act

Slichter
finds
prohibition of the
closed shop, the requirement of
union shop elections, and the pro¬
visions
for
handling
disputes

which
bad

Professor

are

the

To Be Walters,
Effective
name

March

Street; New York City,
of
the New York and

which

Stock

Gerald

or

to Walters, Peck

A.

Fagan, Jr.

1

the

of Stevens & Legg, 11

Street, under the management of

imperil the national health
safety.

Peck Co.

Exchanges,

was

& Co.

firrp

Wall

members
Chicago

changed

Volume

COMMERCIAL

THE

'Number 4782

169

&

FINANCIAL

CHRONICLE

(979)
ing and improving social security
—but they call our proposals a

"Special Interests My Fight": President Truman

the
American.

at

for

They claim to be in
housing—but they say

price support.
President
ocratic

annual Jefferson-Jackson Day Dinner of the Dem¬
Feb. 25 renewed his campaign attacks on the "special in-

Harry S. Truman at the

party at Washington on

rent

he

long and glorious history. Through
its founders and leaders, whom we

obstruct¬

are

ing the enact¬
ment

back to

honor tonight, its roots go

his

the

proposals

b y

however

Congress
he
to

again

tour

p p o r t lor

I

s

program.

The

of

refusal

"our

Truman

with

his

The full text
of the President's
address follows:
Mr. Chairmfan, ladies and
gen¬

tlemen:

happy occasion for the

a

Democratic party.

I know that all

the

gatherings of our party,
throughout the country, are as
cheerful
of them

I

this one, and I give all

as

more

from the

same

party

has

served its country so well that the

people have indorsed it for the
fifth consecutive time.
I am aware that this was some¬
ters.

I

were even

with

surprise in certain quar¬
told that

am

some

persons

making elaborate plans,
relish, to buy

considerable

the Democratic party and all that

it stands for.
were

like certain

friends of Andrew
memory we are

Jackson, whose
honoring tonight.

Once upon a time there were
number of citizens who
thought

that

Andrew

have

pense

Jackson

ought

to

suitable coffin. At great ex¬

a

they went to Syria and

chased

a

pur¬

marble

sarcophagus. A
as
you
know, is a
big marble coffin with a

sarcophagus,
tomb—a

marble

lid.

These

citizens

then

shipped this marble box to Wash¬
ington, which was quite a job, as
it weighed four or five tons.
At

last, they thought,
resting place had been
for

ect

suitable

a

provided

Andrew Jackson.

The

only trouble with the proj¬
that Andrew Jackson-was

was

not

dead.

Moreover, he wasn't
ready to die. He did not intend to
be hurried to the grave.

to

is

is to enact into
that the people

Courteously but firmly he wrote
these
well-meaning
citizens,
said, "I must decline the in¬

tended honor."

what

are

we

We are meeting determined op¬
position. The special interests are

fighting

just

us

as

if

had

they

of Nov. 2. For them

heard

never

campaigns and elections

just

are

preliminary exhibition -matches—
the

fight in Congress is the main

bout.

year

days

a
a

on

the

in and year out—-seven
week, and twenty-four
day. They work through

their lobbies and pressure groups,

editorial

the

through

pages

and

columnists and commentators

the

they control. They twist and mis¬
represent the measures the people
voted for. They are agairy trying

with the
old, wornout bugaboo that social¬
ism is taking over in Washington.
to

frighten

the

people

This one-sided barrage of prop¬

aganda
seems
overwhelming at
first. There are no full-page ads
on

our

side. In fact—all

side

we

our

ment

what

their

I think that this little

story has

It is this: Before you

to

bury a good Democrat,
better be sure he is dead.

There is another lesson you can
derive from the
you

the

cannot
as

more

bury

long

as

recent

past:
Democratic

the
it is working for

welfare and the

of the people

advancement

of this nation.

People's Welfare

Against

"Special Interests"
The

central

issue

of

the

cam¬

paign last fall was the welfare of
all the people against special priv¬
ilege for the few.
When

we

for

weak they can¬
collective

so

made

it

clear

where

the

working men and
this country and they

of

| will not rest until it is destroyed.
After the
would

election, I thought

have

the

I

felt

that

sure

the

Re¬

publican party would be anxious
throw

to

the

Taft-Hartley

faster

than

the

the

our

The

We
and

working for its repeal;
the
support of fairAmericans, regardless of
we will continue to work

with

minded

party,
for its
upon

repeal until it is replaced
our

statute

books

with

The

same

die-hard reactionaries

who want to cripple labor unions
have, also started, a campaign of

confusion
measures

against
for

the

people..

They

say

they

all

President, and the rec¬
Representatives and
as they are now.
This
concern
on
the
part of
the people is a fine thing for the
growth of democracy and respon¬
sible government, I proposed, to do
all I can to help it along. In fact,
I may even get on the train again

these

I

ask

facts

interests

another

make

around

tour

the country to tell the people how
their government is getting on.
If

we

to

In

price supports.

further

favor

of

support

of

nation¬

to

in

be

favor

of

prosperity, I have submitted
Congress
proposals for
maintaining full production and
lull employment.
the

to

The proposals I made are de¬
signed to aid business in increas¬

and

propose.

We

will

their

be

propaganda.

efforts

the

not

to

their

will

enact

we

which

to

by

Despite

confuse,

programs

deceived

are

we

committed.
We

can

and

we
our

will provide
people.

a

heart

of

our

program

determination to preserve
health of our economy. We

our

that

the

'welfare

the

of

whole nation depends upon keep¬

ing our economy well balanced
—seeing to it that each group gets
fair

share

produce.
The special

of

the

goods

we

have

at¬

interests

tacked every governmental meas¬
ure

we

These

have devised to

are
being at¬
special interests
who are making excessive profits
out
of present
shortages.
And

keep

an

example, last

a

selfish

blind

try that they failed.

We

must

not

let

to

us

special groups
the common good.
of

success

business

every

enterprise depends upon the pros¬
perity of the whole country. Your
government is pledged to use all
its

our

health

means

must

A

j'jf

other
of

the

■..

that

government must

and

ests

using

are

to

This announcement is not an

government able and willing

to a<?t in the interest of the whole

nothing government ready to let

20s, the collapse
on

a

better friend of free

(Continued

de¬

a

is

competitive enterprise than
on

page

24)

offerof securitiesfor sate or a solicitation of an offer to buy securities.
February 28, 1949

112,486 Shares

Southwestern Public Service

Company

Common Stock
Par Value $1 per

Transferable subscription warrants in bearer form
shares have been issued

Share

evidencing rights to subscribe for these

by the Company to holders of its Common Stock, which warrants

expire at 4 o'clock P.M. Eastern Standard Time, March 8,1949,
prospectus. Common Stock may be offered by the underwriters

as

as

is

more

fully set forth in the

set forth in the prospectus.

*

•

Subscription Price to Warrant Holders

$25

per

share

our

Copies oj the prospectus

Right now the special interests
are
using every trick they can
think of to defeat our labor policy.

map

he. obtained from such oj the undersigned (u'ho

the underwriters named in the prospectus) as map Icgaltp
these securities under applicable securities laws.

are among

ojjcr

Calls for Taft-Hartley Act Repeal
After

election, hardly any¬
good word to say
about the Taft-Hartley act.
But now, when I ask the Con¬
gress to repeal the Taft-Hartley
act, exactly as I said I would in
the campaign, there are great out¬
cries from the special interests.
"He can't mean it," they say, "re¬
peal the Taft-Hartley act? Repeal
that beneficent, charitable, kindly
old

a

statute—the

charter

of

the

and

workingman's
Why, it's unthinkable!"

labor

friend!

And

issue the people

made it clear that

the

they stood with

us.

act

they keep this up night
day in an effort, to convince
people that the Taft-Hartley
is a good law. But it's no use.

All

Dillon, Read & Co. Inc.

the

had

body

the

oratory

in

the

world

It

act,

economy

be aware of
special inter¬
obstruct

act

judiciously—but

-These farm-price supports are
actually supports for our entire

for extend¬ of farm prices brought

special interests.
It is important that the Amer¬
should

eco¬

the

of

country and
prevent depression. To do this

—wisely

coun¬

to maintain the

resources

nomic

am

people

the

demands of

The

some

good thing for the

to

easy

group

resentation.

selfish groups tried to destroy our
farm pric^-support program.
It is

those

be misled by a
of special interests
engaged in a campaign of misrep¬

to

year

is

It

small

economy on an even keel.
As

proposals

by

the usual outcries about regimen¬
tation are now filling the air.

Health of Our Economy

its

to
prevent
shortages from,
driving certain industrial prices
higher while farm prices are lev¬
eling off.

tacked

better life for

the

production and
eliminating
bottlenecks; they are designed to
keep price movements balanced,

keep the people fully in¬

tactics that the

the

raise

their usual hue and cry about the
cost of

confident that they
will support the Congress and the
President in our fight against the

the

to

you

when

begin

Senators

and

and

from

economy. In the

our

welfare

are

claim

a

labor law that is fair and decent.

farmer

protected

program.

special

we

know

are

the

are

ing

the

party, in its
platform, is solemnly committed
to work for repeal of the TaftHartley act.

time

collapse by the farm price-

support

our great river basins
they raise the old cry of
"super state" every practical step

should

Democratic

in

are

developing

lies

follow is clear.

this

a

remember

re

—but

Republicans

party

is

coun¬

wide

they

say

They

At

course

control

good wages—but they argue that
the minimum wage should be held
a starvation level.

about that.

do,

rent

whole

dragged the

economy

such

en¬

down to

got rid of Jonah, I am beginning
to think that maybe I was wrong
No matter what the

until

They

act

sailors

they

pealed.

we

cooperation of
friends in this

Republican

our

But

the

mistake

ords of their

and




to

women

tenants

was

the

and

the Democratic party stood on that

The Democratic party has had a

rnlt

of

low-

courage landlords to lock out their

about

programs.

Smithsonian Insti¬

tution.

party

device

but

—

which

the

govern¬

doing. Make no mis¬
it, there has never
been a time when the people were
so well informed about Congress,

take

in front of the

you

"a

home

J>

try down to bread lines and bank
failures.

They make speeches about the
American

and

economy

to

is the

in

terested

And they
never
did get Old
Hickory into that thing. You can
still see it, if you're interested, out

moral in it.

it

a

agriculture

spread

have

people.
enough—because the
people are aroused.
I did a lot of traveling around
the country last fall, and I found
that the people were vitally in¬
on

ican

offer

a

effective

on

overboard

exactly

formed, I

and

a

called

carry

effort.

But that is

These persons

a

now

of

doing.

hours

Incidentally, this is where I
expected to be.
What I feel tonight is not
per¬
sonal pride or
elation; it is a deep
satisfaction that our

a

Convention

forthright.

The special interests are

old stand.

thing of

job

That

happy to be here talking
job

to you once

firmly dedicated to a
in the interest of all the
The platform adopted at

law the programs
need and deserve.

greetings.

am

say

Democratic

the

Our

cooperate

party in repealing the Taft-Hart¬
ley law.

This is

to

1948 is clear and

publican
to

Senator

making unions

more

people.
President

Re-

friends"

into

Taft-Hartley act was
before the Congress, a Republican

not

that never
has the Democratic party

program

critical

the

it

law

When the

end in itself. The only

an

proud

am

been

particu¬

larly
of

glorious

bad

a

party is not and never

our

before

President

was

and

change

justification for the Democratic bargaining."
That was true then, and it is
party
is its usefulness to
the
American people in achieving the true now,
The Taft-Hartley act is an ingovernment they desire.

gain popular
h i

ancient

has been

the country to
s u

be,

may

and

tnreatened

But

Revolution.

American

of

won't

good law.

ultimately

because it does too much for lowincome families.

terests"

which,
claimed,

housing program is

favor
our

in

pression

system
that
will
character of every

destroy

Jefferson-Jackson Day Dinner, calls for enactment of his measures and threatens to tour
support. Calls for Taft-Hartley Act repeal, for broader social security and continued farm

President,
nation

bureaucratic

i.

E. H. Rollins & Sons

Eastman, Dillon & Co.

Blyth & Co., Inc.

Incorporated

Goldman, Sachs & Co.

Harriman Ripley & Co.
Incorporated

Stone & Webster Securities

White, Weld & Co.

.«■

Corporation

Union Securities Corporation

G. H. Walker & Co.
The Milwaukee

Kidder, Peabody & Co.

V''

Rauscber, Pierce & Co. Inc.

Company

a

do-

THE

(980)

24

COMMERCIAL

Purchasing Agents See
Business Leveling Off

Inventories

industrial

became

more

in

noticeable

December and

January,

has

continued

through
ruary

there

Feb¬
but

,

def¬

are

inite

signs

that

its

month, over 40% of the members

i

n

level

may

prices,

reported

are

in

February.

schedules showed
of

increasing

ing

for

rate

the
few

a

Production, commodity
inventories and employ¬

all

levels

business

maintain

and

lower

present
months.

ment

off

lower

Back-order
indication

some

commitments

February,

increases

at

16%

as

33%

and

are

dur¬

reported
holding

satisfactory demand positions.
The general conditions reported

forecast

a
strengthening
the committee.
A
production requires
compounded adjustments in in¬

may

trend,

says

downturn

in

ventories

and

ments.

forward

15%

A

commit¬

lower production

schedule may temporarily warrant
the
reduction
of
purchases by

30% to 40%, to reduce all inven¬
tories and work-in-process to meet
turnover

targets

at

the

new

level.

Making such cumulative
adjustments
abruptly,
under
a

reduce-everything policy, may ac¬
count for the recent sharp shrink¬
in suppliers' backlogs.
Such
curtailment, however,
delivery difficulties for
buyers
later,
when,
having
ages
a

drastic

can

create

worked off overstocks, it becomes

to secure full require¬
to meet the new produc¬

necessary
ments

tion

schedules.

uncomfortably low. Overdue com¬
mitments
are
frequently
being

expected that ef¬
forts
to
maintain
and
increase
turnover ratios will continue.

Overall, the recession has been
and orderly —< the re¬
ports indicate no panicky situa¬

tions have developed.
A com¬
petitive market is gaining momen¬
tum, with many sellers unpre¬
pared to cope with it.
Purchasing
"Business

comment:

will probably face a series of mod¬
erate setbacks before stability for
the

Buying Policy

pull is attained."
The
opinion is expressed that capable
and

cautious

could
at

with¬
interference,

management,

probably stabilize business

these

levels

lower

few

months.

will

depend

on

in the next

Commodity

in

the

Prices

belief

that

lower

will

slack
clauses

in

take

the

Escalator

future.

the

up

getting little consider¬

are

ation from buyers.

particularly
can

be had.

market

is

on

protection,
items,

fabricated

Right

evident

now,

in

a

buyers'

most

com¬

modities

except steel and metals,

and

may

they

be softening.




of

The future

world

the

ability

depends upon our
master that problem.

to

in previous years.

as

is questioned whether

Station WGAR, Cleveland, on Feb. 26, it

over

relieve the current

upward swing in employment will entirely
"seasonal" unemployment. Accord-<e>absorbing
ing to the statement:
an

"Prior

the

to

its dis¬

and

war

unprecedented

an

purchasing power to
the probable detriment of current
business.
The passage of a few
of

amount

ruptions; a certain degree of slug¬
the last 16 years this gishness in both midwinter and
country has made great progress midsummer was instinctively ac¬ months' time will not alter this
toward finding the solution. This
i* [
cepted and recognized as a routine situation.
progress has been made over the
development in many types of
"Another aspect that bears
protests of selfish and shortsighted business. And on the basis of that watching is the trend in the mon¬
people.
We have not let them precedent, it has been only logical
ey supply, which has been either
stop us in the past.
to
assume
that
long-established sideways or slightly downward for
We will not let them stop us
seasonal habits and patterns would some time. The rise in checking

During

now.

eventually reassert themselves in

In
148

first

his

inaqgural

address,
Jefferson

Thomas

ago,

years

said that this country was in "the
full

of

tide

successful

experi¬
ment." He called our government
"the world's best hope."
Today
we
are
again in the full tide of
a
successful experiment—the ex¬
periment of achieving economic
abundance and basic human rights
in

a

society

of free institutions
and free men. Today this experi¬
ment
is again the world's best
hope. Today it is the hope of a
a

con¬

world confronted by greater dan¬

account

the postwar period.

and

"There is

precisely

no

why

should

irend

self at this

have

of

last

mer,

or

even

Presumably
of

it

chance.

simply

not

was

Nor

can

it

a

pronouncbd as it had been a
or
two
earlier, and the
shrinkage thus far in 1949 has
been somewhat more
noticeable

as

year

production has

finally

caught up with current demand.
Perhaps demand itself has receded
somewhat ahead of schedule. What

year ago even though in¬
tax payments are
a little

a

lighter this year.

be

evidence that

as

individuals

of

balances

corporations last fall was not

sumrrier, next sum¬ than
a year from now. come

explained solely
industrial

it¬

manifested

particular season, in¬

stead

matter

of ascertaining
this
traditional

way

months business has

"For some

under conditions

been functioning

virtually static money supply
which is in strong contrast to the

of

a

steady and persistent inflationary

is being widely described as only

the

first

in

time

months

following:
With the understanding and en¬
acids, alcohol, ergy of this mighty people, our that savings deposits in leading
cities ^of
this
District
increased
bolts, bottles, brass and brqnze nation
can
Ynove
confidently
ingots, burlap, carpets, aromatic toward the goals of prosperity and more than in the same interval a
year earlier.
The transition was'
chemicals, gray market chromic peace.
not abrupt, nor has the trend been
acid, cocoa butter, all containers,
uniform in one direction, but by
copper
scrap,
buffing
wheels,
household
January the margin had become
appliances, fractional
to
much more noticeable. Last month
H.P.
motors, ethyl acetate, pipe
the increment in savings deposits
fittings, foodstuffs, fuel oil, coal,
in this area was the largest in
coke, furniture, glue, greases, pig
the late postwar period
iron, cast scrap iron, secondary
lead, hides, leather, lumber, ma¬
Another"external t cto s
Another external factor is the
chine
shop
products, mercury,
slowing down in the rate of ex¬
Dale set as March 22, in New
steel scrap, vegetable oils, paper
pansion of instalment credit. At
York City to determine whether
and
paper , products,
phenol,
various times during the past year
plumbing goods, propane, quick¬
F. H. Winter & Co.'s brokerthe growth of instalment credit,
silver, rope, rosin, rouge, rubber,
either
through the purchase of
dealer registration shall be re¬
soap, soda ash, starch, gray mar¬
appliances or furniture on time,
voked or suspended.
ket
steel, cotton textiles, light
or in the form of personal loans
guage copper wire, caustic soda.
The
Securities
and
Exchange seemed to ease up, but the real

month includes the

SEG

Hold

Hearing
Registration

Dealer

the

above

plus:

Gap

of

All

supply,

in

are

easier

Commission announced

hose, that

screws,

will

it

hold

a

on

on

Feb. 25

hearing

on

grades
of lumber,
nuts, March 22, in its New York Re¬
procelain items, lead, steel gional office, 120 Broadway, to

good
pipe,
wire.

determine

in
diamond

A few items are reported up

Brushes,

February:

powder,
permachlor,
pigments,
silver, sulfa drugs, turpentine.
The

item

supply

tightest

aluminum.

is

Next

copper,

is
but

powder,
several
tight but

easing;
also,
diamond
redwood,
nails,
nickel,
sizes

steel

steel,

pipe;
easing; tin, zinc.

dealer
ter

the

whether

broker-

registration of F. H. Win¬

&

should be revoked

Co.,

or

suspended.
The

SEC

in 1946,
partner
of F. H. Winter & Co., induced a
customer to sell to it securities,
and with the proceeds to purchase
Frank

H.

certain

alleges

that

Winter, while

a

There¬

securities.

other

after, it is stated, Mr. Winter de¬
livered to the customer certain of

Employment

December.

in

is

in

the shares

substantial

A

layoffs that

Others

elimination

of

the

report

overtime

week.

work

part

considered

are

temporary.

shorter

by

Labor

a

labor

skilled
able.

Both

\

_

is

skilled

and

non-

not

business

gone

holding

Canada

is

backorders

off to the

extent

firmer;

inventories

are

down; employment is off, but

not

as

much

as

ordered and

deliver

paid for,

others,

delivery

con¬

would

be

tending

that

delayed

because they were pur¬

chased
would

from
be

estate

an

and

time

required to have them

transferred out of the estate.

SEC

contends

that

intended

deliver the

Mr.

Winter
did

and

to

The

not

securities, but used the

funds received from the customer
for his

own

use

and

in the U. S.; buy¬

ing policy remains the same.

has
firm

become
as

Counter
was

G.

Hough

with

associated

the

Manager of its Over-the-

Trading-JDept. Mr. Hough

formerly

Warner & Co.

with

J.

estate

outstanding—or the amount owed

lending

likewise

to have run into some dull¬

in recent months.

Borrowing

for the construction of homes for
owner

high

is holding to a

occupancy

level

residential

but

struction for sale

of

sence

con¬
has de¬

rent

or

clined considerably, and

in the ab¬

revival in that type of

a

buildinS> real estate loans will

hardly regain the
vailed until

that

pace

gold imports, which

occasions have been

cant factor in

dwindled to

pre-

few months ago.

a

"Moreover
on

a

signifi¬

deposit growth, have
bare trickle.

a

Many

nations which had been
buying American products beyond
foreign

their

means

conserve

"This

now

are

obliged

to

their gold resources.

deflationary trend in the
for

supply,

money

by consumers—is still rising month

reasons

just

be modified or even
reversed in some degree as soon
noted,
as

may

of concentrated in¬

the period

come
tax collections is past and
by month, but at a much slower
when
government
expenditures
rate.
The readoption of restric¬
tions on consumer credit late in begin to run ahead of receipts
September may be the primary again. Yet unless the Federal cash
cause

of this

tapering off, but other
as resistance to high

deficit proves to be larger, than is

now
contemplated,
and
unless
there is a resumption of aggres¬
prices and the fact that the most
sive lending and borrowing for
urgent needs have been filled like¬
commercial and real estate pur¬
wise have been retarding influ¬
ences.
In any event, the slacken¬ poses, there is little prospect that
the money supply will show any
ing in the growth of instalment
gains
during
the
re¬
debt has not been a seasonal de¬ striking

factors

such

velopment, and therefore it can¬
not be expected that a predeter¬
mined date

the calendar auto¬

on

bring

matically will
vival

instalment

of

a

brisk re¬

buying

and

"This leads directly to the con¬
which

third adverse fac¬

a

is

not

causes,

high

mainder

level
in

attributable

within

of

probable

is

it

weeks

few

spring upturn
no

turn to

more

normal

that

that
sea¬

bring some

business,

in

assurance

supplemented

it

there

will

be

by a re¬
liberal spending out
more

once

to of current income, by another dose
of

form

a

influences will

sonal

instalment

namely, the rec¬
tion
of consumer in¬

the

of this year.

"Although

is

borrowing.

debtedness

of the New York Stock Exchange,

Clinton

closing

to carry

products.

"Real
seems

ness

materials and

raw

linished

home

of last

credit, by

a

repeti¬

year's real estate lend¬

ing boom, and by

a

resumption of

Such debt in the ag¬ the upward trend in the money
gregate has risen much more rap¬ supply. If production, sales, and
idly than salaries and wages, out
employment
should respond as

mortgages.

Schafer, Miller & Co., 15 Broad
Street, New York City, members
that

the

and presum¬

"The volume of-instalment debt

ord

Hough With

in

year

moment.

present

sideration of

profit.

Schafer, Miller & Go.
announce

came

stock

ably had persisted right up to the

seasonal

Clinton

!

in

reported by U. S. business. Prices
are

to

avail¬

generally

'1 ' /'

better than in the States. Produc¬

have

so

failed

slow-down

months of the

tor

Canada

General

but

neither
pro¬

ductivity is again reported on the
increase.

many

fatty

Acetone,

tion is slightly up and

price

Long-term

lem of boom and bust.

supply

a

expansion of the preceding decade.
That long-term growth has come
servatism in procurement policy gers and greater possibilities for
seasonal dullness undoubtedly has
to a halt, at least temporarily, be¬
is
expected
to
continue
until good than were dreamed of a cen¬
been accentuated by certain fi¬
cause of a combination of events.
finished
goods,
work-in-process tury and a half ago.
nancial developments which bear
Great as our responsibilities are,
For one thing, there was less new
and raw materials inventories are
little, if any, relation to changes commercial borrowing last fall
back in balance with lower pro¬ we have nothing to fear if we rely
in the seasons.
duction
schedules
and
than in several preceding seasons,
general upon the energy, the resourceful¬
"One of these developments is
business shows more definite signs ness and the common sense of the
and the probability of renewed
American people. So long as the the increase in personal savings.
of stabilizing.
expansion of commercial lending
As early as last August consumers
people understand the issues of
has
not
been
enhanced
by the
Specific Commodity Changes
the day, the special interests can¬ began to reveal a more conserva¬ decline in commodity prices. In¬
tive attitude toward the expendi¬
The long list of commodities not prevail
against the general
dustrial and
trading enterprises
ture of current income. That was
reported
down
in
price
this welfare.
may need less working capital to
Extreme

bracket.

this

of

material costs and increased labor

productivity

90

to

Employment is off sharply from
January—59%
showing this as
compared to 47% in January, 34%

Many report price declines dur¬
ing February but few mention
very sharp cuts. There is a general
trend to taper off. Some over¬
stocks are being offered at liqui¬
dation
prices.
There
is
much
evidence of sellers' testing mar¬
kets to determine buying levels.
Business is being taken at lower
prices at the expense of current
profits,

coverage

days"—97% reporting within that
range. More and more buyers are
finding it possible to satisfy re¬
quirements in the lower section

Therefore,
much
developments in

Washington.

commitment

Forward

continues—"hand-to-mouth

long

out government

is

It

canceled.

moderate

executives

in

reduction

a

purchased inventories. With eas¬
ing prices and supply, there is
little need for large, protective
stocks and some are, admittedly,

force

d i cations

that

report

surveyed

is diminishing
and there are
Robert C. Swanton

consecutive

third

the

For

Bust

and

Boom

being supplemented

liberal spending out of current spending or up¬

more

statement, entitled "Business Trends," prepared by the Re¬
search Staff of the Federal Reserve Bank of Cleveland and broadcast
In

of

by

ward trend in money

slide into a depres¬

great problem of the free
Western democracies is the prob¬

composite opinion of purchasing agents who comprise the Busi¬
Survey Committee of the National Association of Purchasing
Agents, whose Chairman is Robert C. Swanton, Director of Purchases,
Winchester Repeating Arms Corporation, New Haven, Conn., indicates
the
decline &
in

(Continued from page 23)
economy

Problem

ness

this year

ti..,' ,K"

'A,•

The

A

activity which
began in No¬
vember,
and

■'

■

Spring Upswing

Sees return from seasonal unemployment not

sion.

sellers' market.

,

\

the

of National Association of Purchasing
Agents, headed by Robert C. Swanton, says reports indicate no
panicky situations, but many sellers are unprepared to cope with

Business Survey Committee

Cleveland Reserve Bank Doubts

"Special Interests ^
My Fight'': Truman
r

Thursday, March 3, 1949

CHRONICLE

FINANCIAL

&

Arthur

of which that debt has to be serv¬

iced.
and

The incurrence of that debt
the

subsequent disbursement

of the funds borrowed were

vigorously
out

the

as

last spring, but with¬

support

of

inflationary

high¬ tendencies heretofore inherent in

ly stimulative to business in gen¬
the situation,
then the internal
eral, but the debt has reached a
magnitude where scheduled in¬ strength of the economy has been
terest and principal payments are greatly underestimated."

Volume

169

Defends

taMfJarman &

Commodity Speculation

•William Reid, President of New York Commodity Exchange,^.and

^

partner of Bache & Co., also upholds organized commodity ex¬

.

changes
-

beneficial to people and

as

of

/

our

Exchange

Stock

with the
admission of C. Fred
Reid, President of the Commodity Club of New York, Richards into the firm as a gen¬
and a partner of Bache &
Co., members of various commodity and eral partner.
Mr. Richards has
.security exchanges as well as of the New York Stock Exchange, in been an indpendent floor mem¬
introducing the Hon. Harold D. Cooley, Chairman of the House Agri¬ ber of the New York Stock Ex¬

William

<♦>■

cultural Com-

juittee;

at

•

change since 1938 and is a former

Distinguishing speculation from

a

.dinner

of

N

e.w

York

C

o m

modify

"Club

the

gambling, Mr. Reid remarked:
"Speculation

futures market has often been re¬

the

at

the commodity

on

ferred

Waldo r.f-

to

vqry wrong. There is a vast dif¬
The speculator on the fu¬

Astoria Hotels

ference.

New

tures

Feb.

on

strongly

defended

the

functions

o

f

d i t y

comm/o

exchanges

as

a

of

segment

our

•

were

Reid

William

on

'•

is

dealer

unwilling to

horse

a

race,

liberately

there was a
Congressional investigation into
•futures trading ' caused
by high
•prices. Now there is one due to
the recent decline in prices. Other
a

ago

year

commodities which

in

ilar

not traded

are

futures exchanges

on

or

tions,

have sim¬

wider price fluctua¬

even

has
underwriting

business

in on fu¬
to be tar¬

but those traded

wide

creating

of

difference,

is

course,

based mainly on

the fact that the
commodity futures markets serve
a
very
important and valuable
necessity to the community. When
you come to speculation, practi¬
cally everything in life is a spec¬
ulation if you want to character¬
ize

it

such.

as

the

tory

and

Columbus

When

Honorable

Alben

Vice-President

W.

of

rehabilitation
:i:

on

Feb. 25, which

the

shattered

*

*

,

covers

exchanges

seem

the

generous and unselfish efforts of the United
States to contribute to the brotherhood of nations

peoples and to

preserve and maintain the peace
The United States will continue
upon

of the world.

this

lofty and worthy conception of international
We shall hope to attain these noble
obj ec-

affairs.

tives."—Senator Tom

The

i

'v

'

Connally.
1'

,

,

"j

carried out, that every¬

are

gets

one

trades

derived

changes.

Let

United

take

us

or

ex¬

our

a local grain
cotton dealer

South in the harvest season

down

cotton by
farmer. The dealer keeps posted j
grain

or

the

prices prevailing on the
exchange and buys the grain or
cotton figuring his profit at what¬
ever margin he thinks he should
make.
Thereafter, he sells the

t>n

cotton

grain to
equivalent

or

sells the

a

mill

or he
the futures

on

exchange..Now let us suppose that
for

open.

guide

no

the

the exchanges
The dealer who has
to prices, has to take

reason

some

cannot

as

buying
mill. He

of

risk

market

full

when he cannot sell to a
is

certainly going to allow

much

a

larger margin of profit than when
he

insure

can

against

fall

a

in

price
by hedging on
the Ex¬
change.
In fact, he may not be
willing to buy at all. The flour or
cotton
mill by sales of futures
contracts can similarly operate on
a

safer business and a smaller mar¬

gin of profit. Therefore, the pro¬
ducer can get a better price and
the consumer buy at a lower price
because
turer

the

margin
futures

dealer and manufac¬

operate

can

profit

of

at

smaller

a

because

of the

Committee

means

value of commodity futures mar¬

is

break
were

the

of

I would like to men¬
fact

the

that

at

recent

the

out¬

there

war,

in warehouses in this coun¬

questionably

barked

of

true
men

merely to recount what this

ing

been

facilities

which

there if

of

would

the hedg¬

futures

changes had not been




ex¬

available."

This is under

that

a
have

who

vast

no

well advised to await concrete results.

circumstances to be construed as an

offer to

buy,

NASD Dislricl No. 11

Elecls New Officers
District

No.

Association

of

11

of

the

National

Securities Dealers,

Inc. has elected J. Murray Atkins,
R. S. Dickson & Co., Charlotte,

N. C., Chairman.

John C. Hagan,
Jr., Mason-Hagan, Inc., Richmond,
Va., was chosen Vice-Chairman.
Charles
Watts

&

H.

Pinkerton,

Co.,

Baltimore,

Governor from District 11.

offering of these Shares for sale,

or as an

solicitation of an offer to buy, any of such Shares.
made only by means of the Offering Prospectus.

or as a

The offer is

New Issue

em-

286,496 Shares

characterizes those
people
started
a
grocery
business as gamblers.
The near¬
est
analogy
to our commodity
futures markets in my mind
is
Lloyds of London where you can
insure your ocean shipments, or
any one of the myriad risks in
daily life, but I don't believe that
Lloyds is characterized as a gam¬
bling institution. The main dif¬
anyone

who
who

ference

between

Lloyds

futures

markets

is

the

and
fact

Central Maine Power

Company

Common Stock, $10 par

value

Holders of the Company's outstanding Common Stock and

been issued subscription warrants expiring on
above stock.

Rights to subscribe to

an

6% Preferred Stock have

March 14, 1949 to subscribe to the

aggregate of 219,196 shares have been waived.

our

that

Subscription and Public Offering Price

at

Lloyds only the members can
the
opposite side of your
risk, whereas on the futures ex¬
changes, not only members, but
the outside public can share to
the extent they wish in carrying
your risk. Anyone who trades on
these exchanges whether they are
professionals or amateurs, earns
any
profits he makes because,
while substantial profits can be
made
trading
in
commodities,
there is a very great risk of sub¬
take

stantial losses.

part

Our

large

$1578

Copies of the Offering Prospectus
undersigned

are

an

as may

per

may

share

be obtained from only such of the

legally offer these Shares in compliance

with the securities laws of the respective States.

Harriman

Ripley & Co.

Incorporated

Goldman, Sachs & Co.

Exchanges

tant

Stone & Webster Securities Corporation

Lehman Brothers

impor¬

our
economic life.
harvests could not be
advantage of pro¬

of

Estabrook & Co.

Hayden, Stone & Co.

Hemphill, Noyes & Co.

W. E. Hutton & Co.

marketed to the
ducers

consumers

or

as

well

them.
As long as free
enterprise continues in this coun¬

without

try,'

there

is

still

business, and I

commodities

coun¬

was pre¬

in the grocery business

ber, cocoa, pepper, hides, silk and

have

1

ty Is doing or has been doing in recent years, it is
one thing;
if he is boasting about it, he would be

during the life of the A. & P. have
their money.
I don't know

growth

not

"

,

lost

try valuable stocks of cotton, rub¬

other

as

gambler, or the Hartfords, when
they started the Great Atlantic
and Pacific Tea Co.; yet it is un¬
number

.

Foreign Relations

Ford when -he

a

"Our

"Another feature of the hedging

tion

anyone

started his small machine shop

commodity markets.

kets which

that

'

r,\," 11'

Yet I do not
would char¬

ing such industries.
believe

acterize say Henry

from

West

out

who is offered
a

all

brief example of

benefits

dealer

and

made public.

are

will give a

"I

deal,

square

a

i',

If the Chairman of the Senate

gets for such attention.

trades

Connally

of

some

sailed for America, he was taking sided over by J. Earle Jardine, Malon
C. Courts Director
The rea¬ a risk and might be considered to Jr., Wm. R. Staats Co., Presi¬
Of Genuine Parts Co.
be speculating on discovering a dent.
son may be that the vast major¬
In addition to members of
At a meeting of the board of
ity of people do not understand New World. When our early set¬ the Bond Club and their guests,
much about trading on Commod¬ tlers "came over here and went out many of the leading civic and directors of Genuine Parts Co.,
the
wilderness
and
settled business leaders of the Southland Malon C. Courts was elected a
ity Exchanges. I doubt that many in
director.
Mr. Courts, a graduate
people know that these exchanges among the Indians, they were cer¬ were in attendance.
do
no
business
whatsoever
for tainly taking chances and might
the University of Georgia;'is a
their
own. account,
but merely be said to have been speculating
partner of Courts & Co., invest¬
provide a place where members with their lives. The vast indus¬ Rogers & Tracy Celebrate
ment bankers, and is a director
can
handle
business
either
for try which has been built up in Silver
Anniversary
of the Atlantic Realty Co.
He is
their own account, or for non- this country and which played so
CHICAGO,
ILL. — Rogers
& also Chairman of the Federal
member and
member
customers vital a part in the winning of the
Tracy, Inc., 120 South La Salle
war
was
under rules which clearly define
unquestionably started
Taxation
Committee of the In¬
Street, observed its 25th anniver¬
just exactly what is being con¬ in a small way by men who spec¬
vestment Bankers
Association.
tracted. The rules insure that all ulated their savings in commenc¬ sary Feb. 25, 1949.

tures

Tom

Sen".

States, made an exclusive Los
Angeles address before the Bond
Club of Los Angeles at a luncheon
meeting at the Cocoanut Grove in
the Ambassador Hotel, Los An¬
geles,

of

Europe.

"This record

Barkley,

the

Eighteen billions of
to be devoted to the

are

economies in

Angles Bond Club
Hears Alben iarfeley
—

gen¬
his¬

embodied in the Mar¬

was

dollars

and

ANGELES, CALIF.

gigantic and

act of its kind in all

shall Plan.

in

Los

LOS

extended.

erous

previously re¬
"Chronicle"
of

was

United

con¬

the contrary,

on

situations out
"Trading in commodity futures of which risks develop artificially,
has had a good deal of publicity for the express purpose or hope of
since the war," Mr. Reid stated. effecting a hazardous gain.
The

"About

City.

York

New

an

brokerage

as¬

joins with other gamblers in de¬

gambling institutions.
'

ducted

partnership
sume.
The gambler such as the
ported
in
poker player or the man who bets Feb. 10

denied

they

Street,

war

"The most

markets finds an ever pres¬

the

or

economy

and

Wail

was

industrial,
public utility, railroad and mu¬
ent economic condition of fluctu¬
nicipal
securities
since
1939.
ating prices and endeavors to take Other partners are Henry Herr¬
advantage of it by anticipating man, William O. Gay, Jr., and
price trends. He assumes a risk William M. Cahn, Jr.
which the producer, the converter
Admission of Mr. Richards to

York

'City,
2 4, *

Major in the United States Army.
The
company
also announced
the removal of its offices to One

is Henry Herrman & Co.

which

gambling,

as

the

n

Hope

States has given to
approximately $2,000,000,000 for relief. Our
country has also extended generous loans to numer¬
ous other countries.
In Greece, to preserve its free¬
dom and prevent its absorption
by totalitarianism, $400,000,000
was authorized
by Congress. To
preserve the integrity of Tur¬
key, more than $100,000,000

1 became members of
York

New

"Since the

ahead

when I call it
it

is

just

as

for

a

a

tremendous

those

mean

business.

much

a

in

this

what I

Carl M. Loeb, Rhoades & Co.

Graham, Parsons & Co.

F. S. Moseley & Co.
Maine Securities Company

Townsend, Dabney and Tyson

The Milwaukee Company

say

Newhard, Cook & Co.

as

merchants handling any commod¬

ity."

■

I think

business

March

1, 1949.

25

China

of Henry Herrman &

Co., March
the

economic life.

(981)

"We Shall

Admits NYSE Member
The firm

constituting important part

as

& FINANCIAL CHRONICLE

COMMERCIAL

THE

Number 4782

H. M. Payson & Co.

Baker,
is

the

Offers Tax

Value

28

Feb.

the

Arnold Bernhard &

Co., Inc., Investment Advisers, a number of remedies are proposed
"which would have the virtue of at least retarding the liquidation

the

of

meeting

Hartford last week,

held in

Wil-

According

liams

only $1,000 a year for five
from his income, if he has

years

to

the survey:
"One
remedy

The

would

ognized for tax purposes at all.

to

be

exempt

taxa¬

tion

that por¬

tion

of

cor-

a

they

p o<r ati^on's
income which

in

plant

or

it

standard

Arnold Bernhard

working
capital neecis

that

indeed

be

set

up

the Treasury

working

for

capital

was

requirement of the busi¬

a

ness.

remedy would be to

exempt from taxation all earnings
distributed
as
dividends.
This

eliminate

would

remedy
'double

tax'

the

corporation prof¬

on

(Corporation income is first
taxed to the corporation at the
corporate tax rate and then the
portion
that
is
distributed
to
stockholders is taxed again at the
its.

personal income tax rate.)
"If these two remedies were put
into

effect, corporations would
probably
pay
little in income
taxes, for what they failed to invest
in plant and equipment and work¬
ing capital, they would distribute
It would be

to their stockholders.

more,than right.
A cgrpo^ar
ticrt should not be taxed, bepause
a corporation is not a person.
A

P-o

corporation is

business organi¬

a

zation and the burden of taxation
should lie upon

the

from

those who benefit

business

in

accordance

with the benefits they receive and
in accordance with their

lose

some

much

but

revenue,

not

many

pay

cases

a

nificance

system

if

the

Tiie loss

free

enterprise

reinvigorated

were

the trend to

flotation costs may
over the life of
a

bond

bond, but the expense of an equity
cannot be amortized at

flotation

It remains a

all.
ital

permanent

cap¬

outlay.

but

offers

that

one

definite

would

cure

of

hope

a

be to rescind

and

monopoly reversed. '

holds

sistently.
enable

a

that

to

rate

con¬

Such a system would
small corporation to ac¬

cumulate

lic

Haven,

tion

income

taxes

altogether

levy

their

place

in

spending tax.
Such
allow
exemptions,

a

to

and

graduated

tax would
as
does the
a

branch

the

the

to

Robert C.
Pearl

J.

of

Board

Everett

Gov¬

Hartford;
F. Griggs &

Co., Waterbury; and Charles W.
Gould, G. H. Walker & Co., Hart¬

spendings

the

under

ity

is

tax

Spending during the year
is equal to the total income less

simple.

between

difference

the

the bank

in

of

class

the

Advertising procedure
will pretty well discard drab eco¬
nomic phraseology.
On the other
hand, the intent is to be directed
toward the potential investor's na¬
tural desire to gain a solid bene¬
fit
for himself
and his family

investing, he is
putting his shoulder to the wheel

while,

has

1916,

for the

i

ries

on

ness

balance at the

in

effect would be to place the

and

his

uses

on

for

money

comforts
who

capital

in

the

form

of

old

tax

tax.

A

the

man

better, than any new
radical innovation like the

spendings tax would require some
time for the public to become ac¬

plant equipment and more rapidly
than under the longer life-of-theproperty rates recognized for tax

to

an

>

•

purposes

in the United States.

"A fourth remedy,

which would
individuals, would
be to permit personal incomes to
be
averaged
over
a
period of
be

applied

Assume, for example, that

years.

has an income of $50,000 in

a man
one

year

following
tax

to

and

income

no

Under

year.

in the
existing

schedules, he would pay a tax

of approximately $23,500 for 1948.
Under

the

remedy, he
would be able to average his in¬
over

come

duce

suggested

the two years

and

Henry Christman Joins
LOUISVILLE,

KY.

—

Christman, Jr. has become

saving of $5,000.
The longer the
period over which individual in¬
comes
could
be
averaged,
the

The

Henry
asso-

chances

of its being adopted

gressive income taxation.
The
spendings tax can do anything the
income tax can do, and do it bet¬

it allows an
producer and
small business to

would

permit

grow.

BOSTON,
fifth

permit

remedy would

Cabot,

111

members

income

MASS.

Devonshire

Boston Stock

in

are

whatever

amount

incurred.

At

capital losses
the extent of

At present

if

can

the

present,

be deducted to

only $1,000 per year.
a

man

capital loss during

a

mit

E.

nership
was

of

the

Ehlbeck

formerly

part¬

Vice-President

$25,000

du

year,

he can

sales and research.




to

of

Pont, Homsey Co. in charge of

The fact

that

a

whose

citizens

tional

is

the

at

A

nation

a

bulwark

welfare

that they

of investors.

investors

the

na¬

time

same

participate in industrial

vigor and growth."

Petlif A.

Myer Joins

Cohu Inst.
Cohu

Dept.

&

Co.,

City,

that

nounce

Street,'

Wall

1

members of the

Stock

Pettit

Exchange,
A. Myer

an¬

has

become associated with the firm's

Institutional

Department. Mr.

Myer in the

past

with Van

was

Alstyne, Noel & Co.

New York Stock

Exchange

Weekly Firm Changes
The New York Stock

Exchange
firm

has announced the following

William

E.

Bebee

O.

William

to

Wilson to Theodore Wechsler will

in

invention,
of

rewards and risks

the

skills,
ingenuity,
aggressiveness. The

will be evi¬
accompanying sat¬

ownership

ciated

with O'Neil,

C.

telligently acquired interest in

in¬

was

formerly

To

"The

—

Faroll

&

208
South
La
Salle
Street, members of the New York
and
Chicago
Stock
Exchanges,
admit

limited

Warren

partnership

March

H. Gray, general part¬
Talcott, Potter & Co., on
became

1

Exchange's

a

limited

part¬

ner.

Walton W.
in

Robert

Cox, general partner

Winthrop

&

Co.,

on

March 1 became a limited partner.

R.

Swinnerton

&

Co.

dissolved

28.
of

in

Adee

the

late

Mallory,

T.

George

Adee

&

Co.

ceased Jan. 31.

design

the task of draw¬

public attention directly
availability and function

to
of

As part of the pro¬
gram the Exchange hopes to en¬
courage
more
corporations to
broaden stock ownership
among

Interest

Rice

in

ceased

of

the

Daniel

Feb.

late
F.

Joseph

Rice

&

J.
Co.

8.

good equities.

Company,

will

Stock

extends beyond

ing

Faroll & Co. to Admit
ILL.

Employee

Ownership

the

CHICAGO,

Encourage

with

effective March 1.

in

Interest

Alden & Co.,

Willson & Co. which is

William
ner

Feb.

Market Street. Mr.

being merged with O'Neal, Alden
& Co.,

in¬

dustry.

and

March 10. Mr. Ehlbeck

a

has

Street,

York

Exchanges, will ad¬

Richard
on

New

never

isfaction which branches from

Christman

&

of

•

pride

James

Moors

—

nation

upon

nation

a

of

dent, with an

Inc., 421 West

E. Richard Eblbeck

merits.

and American

Henry Christman, Jr.

Moors & Cabot to Admit

as

standard

our

largely from
our
develop¬

Mr.
to place be considered on March 10.
is a partner
in Hay,
before readers of the advertise¬ Wechsler
ments a series of mental pictures Fales & Co.
of fulfilled ambitions inher¬
George W. Ullman retired from
limbed
ent in all enterprising Americans.
partnership
in
OppenThe pictures cannot be seen with heimer, Vanden Broeck & Co on
the
They will be impressed, Feb. 28.
we
trust, upon the inner vision
Carl
PI.
Langenberg,
general
and made more personal than they partner in Reinholdt &
Gardner,
may have been before.
The pic¬ became a limited partner on
tures will be of owners of worth¬ March
1.

of

It could reverse the trend
state socialism."

toward

onward

now

ment

of

depends

stocks on the New T. Baker will be considered.
York
Stock Exchange have en¬
Transfer of the Exchange mem¬
viable dividend records will be bership of the late William L.
list

sharers

the

to

living,

stocks

while, valuable property; partici¬
pants in productive industry;

addition,

In

incentive

capital losses to be deducted from

.losses

inci¬

so

ter.

foundation

very

of

Exchange firmly believes
advancement, the

economic

...

slight that it is mentioned
here only to inform investors that
there is an
alternative to pro¬
are

"The

that

"The design will also be

it is a sounder tax by any
standard
than the
income tax.

equitable the tax would be¬

come.

"A

its moral

and

or

emphasized.

O'Neal, Aides? & Go,

re¬

his taxes to about $18,500—a

more

effect

nomic

vestment

long

Still, in its eco¬

it.

arise.

changes:

dence.

■

common

skepticism,

in

records, which show simply that
On
March 10, transfer of the
a
great
many
well-selected
equities possess
recognized in¬ Exchange membership of the late

of investors as well as brokers and

dealers.

considered

deep

much thought. The
be further rounded
out by using facts and figures,
taken from undisputed corporate

his

is

customed

been

country, national difficulties

given them
design will

important factor in the setting and
creature maintenance of standards of prac¬
to relieve the man tice by the industry in Connecti¬
income to invest in cut and functions in the interest

dence of the tax

spends

inci¬
who

lias

have

in

outruns economic progress

nothing is more effective
interest thanVthe

with

capital

engage

any

York

will, we believe, be appre¬
ciated by people who may either

ago.

ress

York

stimulating

contem¬
Such

even

years

will

progress

New

we

believe,

large amounts, and it must be re¬
membered that when social prog¬

New

As

ment

general investment busi¬

Association

few

a

all are well

design!

sight of other people doing well
lor themselves. The pictured doc¬
umentation of satisfactory invest¬

with

The

"By referring to the power of
example I have edged over into
the second part of the theme—
aware,

served

Williams, Inc., which car¬
a

safeguarding of the Amer-

the

professional career in
the investment field and was a
founder of the firm of Day, Stod¬
dard &

through

it

than

progress

plated

| ican way of life.

entire

his

program

example.

eliminate
Barney & Co., Hartford.
the need for income taxes, the
Mr. Williams, a Yale graduate
incentive to invest would be far

greater than
it is today.
The
method for computing tax liabil¬

its

large degree by the power of

in

completely

would

of

in ways understandable to
many people who have not con¬
sidered equities for investment."
Continuing, Mr. Schram writes:
"This intent is to be forwarded

ship

Buell & Co.,

Skilton, R

requirement

that an essen¬

is to stress common stock owner¬

Miller,

B.

that
the
advertising
will contain thought-

we

provoking material. The nation is
entering wider phases of social

Schram

after long study
grown out of the

conditions

tial

were:

Emil

aftermath of war,

urer.

Elected

For

however,

profitable

of

equity in¬

with

them

vestment.

which

Exchange has
been persuaded,

Judd & Co., Hartford,
elected Secretary and Treas¬

Brainard,

present income tax, and it would ford.
O t h e r
Governors
are
levy on the amounts spent by in¬ Charles P.
Cooley, Jr., Cooley &
dividuals according to a graduated
Co.,
Hartford;
B.
Rush Field,
scale.
The
effect
of
this tax
Eastman, Dillon & Co., Hartford;
would be to discourage high living
S. Jackson Steiner, Jackson Steinand to encourage saving and in¬
er &
Co., Inc., Hartford; George
vestment.
The high living would
L.
Austin, G. L. Austin & Co.,
be discouraged because the more
Hartford; W. Thurston Rowley,
a man spent, the heavier would be
Conning & Co. and Ballard, Hart¬
his tax.
Such a tax could be espe¬
ford; Harold E. Faust, Equitable
cially useful during a period of Securities Co., Hartford; Andrew
inflation, at which time the rates L
Tackus, Putnam & Co., Hart¬
could be so regulated as to virtuford; E. Holbrooke Bradley, E. M.
ally" prohibit " extraVcfganCe. Off Bradley & Co., New Haven; and
the other hand, because such a
E.
Greenleaf
Stewart,
Smith,
tax

f

pulses among the
magazine who are

no

already familiar

corpo¬

operation. The

of

Breummer

Howard

and

dent

part, will stir

readers of this

messages
o

of

some

"Now, the
foregoing is, ad¬
mittedly, a discussion which, in

the

histories

have

Smith-Ramsay & Co.
Bridgeport became Vice-Presi¬

of

a

participa¬

rations

coming forward;

are

the corpora¬
tions, themselves, to funds in¬
vested by workers; others provide
special features to interest em¬
ployees in the stocks of their com¬
panies.

is

in

plans

involve additions by

pub¬

lished

and

meeting, DeWitt C.

same

Ramsay

of

as¬

see

to speed

power

<£-

equities of
long - estab¬

in

Middletown.
At

to

broader

Hartford,

ernors

productive goods.
"The great disadvantage of a
Sweden under which a corpora¬ spendings tax is that it is un¬
familiar.
Among
tax
experts
tion is allowed to charge any rate
of depreciation it chooses so long there is an old saying that any
it

Street,

Derby

Marshall H. Williams

was

radical remedy

much more

"A third remedy would be to
adopt the tax policy in effect in

as

Elm
New

equity

of

95

offices

the monthly maga¬
Exchange, Emil Schram, its President,
of the new advertising campaign.

particularly
eager

is

with

Stock
on

purpose

into

change

os e

' of¬

at

Stock

and

scope

serts. "TheEx-

fice

larger, tax

would be of small sig¬

revenue

non¬

a

h

w

principal

York

Exchange desires to do all that lies in its

Schram

particular attention to
year-end and at the
securities issued by Connecticut
the recipients would beginning of the year. Credits are
taken for income invested.
The corporations and municipalities.

Phan the corporate rate.
in

as

distributions would in¬

and

crease

ability to

Treasury would

might first be supposed.

as

Dividend
in

The

taxes.

pay

Inc.,

incentive to

an

amount

amortized

be

"A

"A second

the

lations,
could

assure

retention of earned sur¬

the

as

•financing in preference to bond
financing.
Under existing regu¬

of

plus

might provide

increase

nable

which would

capitalized

be

capital

Day, Stoddard
&
Williams,

asset, as is the case
with new equity financing now.
If this last proposal were adopted,

working
capital. A
xe a s o

to

be

depreciable

reinvested

is

would

remedy

permit flotation costs of new se¬
curities
to
be
regarded as an
expense instead of requiring that

New

of

issue of "The Exchange,"

York

industry," Mr.

f

o

New

the

"The

the

firm

President

in addition to educating public

the flow of

Wjl-

of

dent

Design of NYSE Advertising

Exchange,"

purpose,

February

the

revealed

liams is Presi¬

$20,000 loss is not rec¬

sixth

"A

from

income

other

says

the

of

Presi¬

dent. Mr.

income in each of the five years.

zine

was

elected

deduct

capitalism."

In

Mar¬

H.

shall

"The

in

Ex¬
change's functions, is to speed flow of capital for industry and to
encourage employee stock ownership.

—

Association

Bankers

vestment

article

Exchange

At a
Connecticut In¬

CONN.

HARTFORD,

American

of

In

Elect New Officers

"Fortnightly Commentary" of "The

Survey," published by

Investment

Line

of the

issue

Thursday, March 3, 1949

Schram Reveals

Conn. Inv. Bankers

Changes So Retard Liquidation of
American Capitalism

In

FINANCIAL CHRONICLE

&

COMMERCIAL

THE

(982)

26

G.

Hamer

to

on

March 10.

employees.

The employee stock
principle is gradually

Jennings & Co. Formed
(Special

to

The

Financial

CLEARWATER,

Chronicle)

FLA.—David

H. Jennings has formed Jennings
ownership
& Co., to engage in the securities
finding wider acceptance among
corporate employers.
A variety business.
•

Volume

THE

Number 4782

169

CHRONICLE

FINANCIAL

&

COMMERCIAL

(983)

capacity going in is expected
a
substantial improve¬

new

Sees Electric
installations

sufficient

reserve

as

indicating

were

Atchison, Topeka & Santa Fe
The heavy snows in the western section of the

y

and

February
have

must

service

as

The electric companies of

country in January

been

as!

highway

travel had

level

the

companies

traffic and also added substantially to

their

<•

i

preparation

expenses'. "** '

194580

the financial community

r'yr'-.z
Compared with some of the other transcontinentals Atchison,
Topeka & Santa Fe held up quite well in the opening month of
the year. Car loadings for the month were off about 15% but gross
revenues declined only 5.3%, from $39,686,000 to $37,572,000.
A part
of the drop in revenues was offset by a cut in costs. Net income for
the month amounted to $2,107,000, off $1,839,000 from January 1948.
Net was off the equivalent of only $0.76 a common share, a negligible
decline in relation to last year's earnings of $23.33 a share. For the
seasonally low 1949 month the company still reported a balance of
some $0.66 a share for the junior equity.
With nothing more than
this slight recession in January earnings to feed the bearishness, the
stock last week dropped to 87 % compared with the high of a few

earnings declines.

y

able.

than

more

50

years,

it has been able to

the

rectly after the war.

noted

Ernest Acker

1947

priceand a

reserve

during

the

year

the

that

indicated

corner

and

Old Colony

MASS. —The Direc¬
tors of the Boston Insurance Co.
and the Old Colony Insurance Co.
have
elected Richard T. DavidBOSTON,

head of the

the -two

of

Investment Dept.

companies,

Assistant

to 1941 Mr.

engaged in .the securities business
as head of the firm of R. T. David¬
son

& Co. and

of

the

to

compiled by the

Institute:

increase
0.4%

206,000
1,895,000
4,253,000

Spare and

Growth

Reserve

10.1

—

*10

*6.3

*16

lows:

The

gins

outlook

for

mar¬

margin of

estimated by power
system engineers, is now 12 to
15%, depending on the degree of
as

interconnection
a

group

and

adaptability

of power systems to

operate advantageously in a pool.
There has been a marked increase
in

The load was grow¬
fast, the idea of a Mar¬

ing

very
shall Plan
the

reserve

operation over recent
with a resulting sharp de¬

pool

years
crease

in

the

of

amount

the

operating problems in many
sections of the United States in

caused q rapid
demand, an extraor¬
spell
caused many

and

rise in power

reserve

This announcement appears

there

were

throughout

hold

took

country

1949,

The desirable normal

reserve,

the

many

a

time when

scheduled out¬

generating units for their
regular overhauling. The reserve
problem was generally better in
ages of

1948

than

nia

There

1947.

was

a

month, a severe
shortage in Wisconsin and

for

water

in

water shortage in Califor¬

severe

about

northern

a

Minnesota

for

a

few

weeks, and some drouth in upstate
New York and New England for
a

few weeks.

The

1948-49

winter

peak

has

mer

Before the next hot sum¬
weather and the next Decem¬

ber

peak

gone by.

demand

come

for purposes of record only.

Accounts, and Finance and
Graduate School of Busi¬
Instructor,

Administration:

of
1928-32; Associate Pro¬
Professor

Assistant

of

Finance, 1932-47; Pro¬
Banking, since 1937.

around,

Commerce,

nance,

Investment Dept. of

devoted the greater

the two com¬

panies.
♦

Mr.

Davidson

is

the Boston Security

a

member

for

several

of

School

Graduate

on

Brooklyn
as

Rodgers is co-editor
of
"Money and

co-author

Banking," a. standard text in the
banking, and co-author of
"Consumer Credit and Its Uses,"

field of

an

authoritative

sumer

he

credit.

was

treatise

editor

of

the

Robert D. Bowers & Co.
COLO. —Robert
engaging in a se¬
business from offices at

Bowers

curities

is

Hamilton Institute. His work and

experience in business have been
field he

has

been

Assistant

Advertising

Manager of Alexander Taylor
Co.;

has been an
Assistant Underwriter at National
Surety Co., foreign correspondent
the National City Bank, and

for

Office

Manager

and

national Finance.

being offered to the public,

Equipment Trust Certificates, Series 44
serially to November 1,1968

1302 Sixth Avenue under the name

this

and the Old

Colony Insurance Co.




formerly

an

investment counsel.

Kuhn, Loeb & Co.
March 2,,1949

Executive

Assistant at the Institute of Inter¬

Transportation

Due

&

in finance, he

Corporation

Dated November 1, 1948

Canadian

varied: in the marketing

LONGMONT,
D.

con¬

years

Monthly Letter of the Alexander

of

Society

on

several

For

$12,879,000

Analysts So¬

ciety and the New York
of Security Analysts.

visiting

finance.

Professor
and

of

Institute

Polytechnic
lecturer

he served the
Newark and the

years,

University

NEW ISSUE

General American

and Fi¬

Accounts

having been appointed its
in 1931.
In addition,

Secretary

These securities were placed privately

through the undersigned, and have not been and are not

Since April,
of the

holds

also

Rodgers

,

,

worst

according to the dinary hot
survey, is for a substantial equipment failures at

for

latest

of

•

York

Professor

The lack of reserves created

6

1948

27

York

New

to

administrative rank in the School

August, 1947.

peak of war demand.

"At

service.

his

awarded

was

University.
He came
University in 1921
and has held the following aca¬
demic titles in the School of Com¬

New

fessor of

continuity * of

assure

5

t 1947

_*20

1945

12%

1946

22%

to

he

degree from.the Graduate School
of
Business
Administration
of

*13

*5.5

in 1921,

Kentucky

of

1925

Master of Business Administration

Finance,

*7.3

11.9
9.2
8.8

heeded

Margins *-

Margins of reserve and spare
capacity in past years are as fol¬

1943

in

and

of

Reserve

1941

University

fessor

-3,700,000
5,800,000
6,060,000

his

Rodgers received

Professor

Bachelor of Arts degree from the

1925-28;

'

.

is entitled "It Can't Hap¬
Now."

pen

ness

6

Co., an¬
speaker will be

His topic

in

5

6.8

3.8
8.1

&

Raymond Rodgers, Professor of
Banking, New York University.

merce,

12%

13.8%

Shannon,

B.

Jones

Shannon

B.

1943 he has been Manager

12-year period to of Robert D. Bowers & Co.
investment and economic research.
In the early part of 1942 he be¬
Kirt M. Chapman With
came
affiliated with Burr, Gan¬
John G. Kinnard & Co.
nett & Co., of Boston and was put
MINNEAPOLIS, MINN. — Kirt
in charge of the Investment Re¬
search Dept. When this company M. Chapman haS joined the staff
of
John
G.
Kinnard
and
Co.,
was dissolved on June 30, 1942 he
Baker Arcade. Mr. Chapman was
joined the Boston Insurance Co.
part

Electric

Edison

made Investment Assis¬

was

tant to the President.

Davidson

Secretary.
From 1930

Jones

1949.

Davidson Asst. Sec.

Son,

as

"Estimated.

as a

major Class I carriers.
earnings of $23.33 a share on its
common stock.
This was apparently a gain without drawing down
any dividend income from the profitable wholly-owned subsidiary,
Western Improvement Company.
Including earnings of that sub¬
sidiary it is probable that actual earning power of the Santa Fe
common was somewhat above $28.00 a share in 1948. It seems hardly
likely that direct earnings this year could drop below $18.00 a share.
The regular dividend of $6.00 a share may be considered as very
well protected. Last year the company paid an extra of $2.00 and
similar action, or perhaps an increase in the regular rate, would

additions

the

of

supply

Kilowatts

Capacity:
—

Scheduled:

Debt was reduced

among the

report

Margins or

1947___

amortization, was

whole. In line with the experience of the western
roads generally its showing during the war was materially better.
What has not been so general in the west, however, is that Santa Fe
has continued in the pastwar era to do better than the Class I car¬
riers as a whole. In 1947 Santa Fe carried 19.3% of gross through to
net operating income before Federal income taxes, compared with
a
carry-through of 12.4% for the industry. Reports for the industry
as a whole for 1948 are not yet available but Santa Fe individually
witnessed a further widening of the pre-tax profit margin to 20.7%,

early the following year.

or

Load

improvement in nearly every sec¬
equipment, particularly diesel power.
The property expenditures and acquisition of new motive power tion of the country.
Normal re¬
have naturally been reflected in the road's operating efficiency.
For serve will be restored in nearly
a
number of years prior to the war the profit margin of Santa Fe all sections of the country by late
had been running consistently, but not substantially, below that of 1950 or early 1951.

Boston and

achieved in many parts

Following is the latest summary

power

5%.

of

1946

It was
the severe

to roundly
Net work¬
ing capital has been built up to nearly $134 million. Large sums have
been spent to improve the property and in the acquisition of new

logical expectation in

under
operations

pooling

country by the end of next

of the

margin of

reserve

Additions to New

materially—fixed and contingent charges are now down
S8.6 million compared with over $13 million 10 years ago.

a

capacity of

reserve

day

-

should be

December, 1948 peak period aver¬
aged 6%, on the basis of total in¬
stalled
capacity, as against the

$146.00 a share. During that period dividends were distributed in
amount of only $47.00 a share. The balance of $99.00 a share,

seem

of

Friday, March 11, 1949.

nounced the guest

is envisioned by the end of

present

capacity

generating

the

placing it well up toward the top
Last year Santa Fe reported

A margin

,

Crystal

the

in

Dinner

Ballroom, Book Cadillac Hotel, on
Chairman

1946 and 1947, di¬

in

high rates

10%

industry's

^

the industry

the abnormally

down from

come

calculations,

depression of the 1930s when western roads were additionally plagued
by a series of droughts.
.
Added to its favorable long term record, the road's fundamental
status has been improved materially in recent years. For the 10 years
through 1948 aggregate earnings on the common amounted to around

together with cash released from depreciation and
retained to strengthen the position of the company.

kilowatts; and

the rate of increase in demand has

o n t h e
basis Of final

report net income.

reported earnings even during

scheduled instal¬

a

of 6,700,000

by power system engineers

that,

This

of the minority that

lation

Acker

yield basis- of 6.86%, based merely on the regular $6.00 dividend
rate, appear almost inconceivably conservative.
One might think
that the long term record of the Santa Fe was such that there was
some
question as to its ability to maintain earnings under what
might be considered normal business cycles. Far from it. The road
has an excellent record.
In every year of its history, going back
one

during 1949 by

DETROIT, MICH. — The Bond
of Detroit will hold its 33rd

Club

AnnilhT

1949; and the desirable normal
margin of 12 to 15% as estimated

months ago of 120%.

Considering the basic investment status of the road, a
earnings ratio of less than four times, based on 1948 results,

33rd Annual Dinner

Mr. Acker said,

last

As
specific
evidence, Mr.
v

flatten¬

a

Bond Club of Detroit

year's record-breaking
installation of 4,253,000 kilowatts
will be topped by more than 50%

had had, the range sales ef¬
forts to make
appearance of the
reports of such roads as Southern Pacific and
Union Pacific brought on another wave of selling with a consequent sure that the
capacity
sharp break in prices. The good reports of a majority of carriers in new
other sections of the
country were completely ignored.
Illinois will be suffi¬
uti¬
Central, for instance, reported January net income more than double ciently
that of a year earlier and still the stock acted just as poorly as the lized as it
becomesavailshares of some of the companies reporting substantial year-to-year
the

been turned,

since

long-

noticing

—

has

intensifying

margins. This to¬
fact that many

the

are

their sales of electricity.

the United States are successfully cop¬

are

extended

Despite

1948, when 4,253,000 kilowatts

over

with

ing off of demand has prompted
electric utility companies gener¬
ally to launch large sales promo¬
tion programs to try to increase

made available.

r

that

for

has been turned in providing
Looks for a 50% in¬

generating capacity are being maintained at such a high

tions of new

been>disrupted completely,

periods, in many sections. It could hardly have
been expected that the affected, railroads or theij: connections could
be impervious to the severe weather.
The storms cut heavily into

and

gether

companies

ing with their generating capacity problems, Ernest R. Acker, Presi¬
dent of the Edison Electric Institute, says in announcing that installa¬

fully publicized in the nation's press. It certainly
well known to speculators and'investors that rail

were

well

corner

make

ment in reserve

increased demand..

to meet

in installations in 1949

crease

to

Acker, President of Edison Electric Institute, points to

Ernest R.
new

Generating Capacity Ample

27

THE

(984)

£8

COMMERCIAL

large-scale Federal program
housing introduced
Jan. 5.
The status: Bill approved last week by Senate
Banking and Currency Committee; now ready for floor
debate.

escaped most, if not all the others similarly placed,
since memory of man runneth not to the contrary.

liave

whatever

should

not,

the
can

or

for himself and set

all of it, supplies any reason
informed and thoughtful citizen
not, appraise the general situation
down in his own note book what he

v

River

implications. The truth
is that President Truman did not receive

House

River

specific mandate last fall at all. If the voting were
so construed, it must at once be added that the voters
at the same moment, and in the same balloting, denied
him the conditions under which he could reasonably

into office

on

on

a

of

course,

them. In short, it was obvious that Mr.
speak for his party as that organization
was represented in Washington in the 80th Congress, or as
it was scheduled to be and is now represented in the 81st
as regards some of
Truman could not

Congress. And, generally speaking, it must be recalled that
the President ran behind, not ahead of, Congressional can¬
didates. At most, it seems to us that the President coqld
claim a real mandate merely to try to see what he could do
get his program through a Congress the leanings of which
were well known and understood by the electorate which
.sent it to Washington.
.
/ -

issued
a challenge to the Congress which his party controls,
and
.scarcely takes the trouble to conceal a threat to visit the
"whistle stops" again to marshal support for his program
He ignores the fact that such tactics as this on his part could
succeed only on the basis of an implied threat of a wholesale
party purge (which even Franklin Roosevelt could not ef¬
the President has

now

fect)—and the further fact that his remarks would have to
foe directed at individuals' elected

more

often than not with

President,

roaring about

as

gently

follows:
Labor

the

Securities

and

Exchange
Commission to brokerage houses
when large transactions appeared
on the ticker. These agents would
demand full information not only
as to the name of the customer for

whom

the

transaction

put

was

through, but also the details of all
other

transactions

by that cus¬
tomer for a period preceding, and
in some cases would then go to
the customer himself. In any case,
the broker would feel obligated to

one

tor

of

in

visit.

of the

customer

1937,

agent of

an

execu¬

large estate to inquire
why he had sold a quarter of a
a

million dollars worth of securities
in

single morning.

a

informed

was

The agent

the

that

executor

selling to get cash with which
to pay the United States Treasury
the estate tax!
A great many men

Legislation.

simply withdrew from the market
rather

their

than

•

and Public Welfare

Wednesday.

completed open hearings last
Schedule for further action uncertain.

Minimum Wages. Bill to raise minimum
wage from
40 cents to 75 cents introduced in both Houses on Jan. 6.
The status: Public
and

hearings completed by House Education
Labor Committee. No hearings held yet in Senate.

Social

Security. Bills to enlarge social security pay¬
ments and expand coverage and to set
up permanent sys¬
tem of Federal aid for public relief introduced in House
last Monday.
The status: Hearings open tomorrow in
House Ways and Means Committee.
Health.
and

Bills to

public health

provide

program

a

national health insurance

introduced Jan. 5. The status:

Hearings not yet scheduled.
Education.

Economic

The status: No

stabilization.

broad powers to control
some

wages

Bills

of

inquired

a

shift

in

the

hearings held yet..

J.. ^

market

high

inflexible

the

was

margin

re¬

quirement.
The Congress, desir- f
regulate the use of credit ;

ing to

before

in the stock

much enthusiasm
Conditions have changed
up

Federal

trol

market, had given the
authorities

Reserve

1

con-

margin requirements—a «
control that had previously been J
over

in the hands of the banks and the .»
brokers.

Federal

The

Reserve

authorities had raised margin re- 15

quirements to a very high level. {
they calculated margins, it was ;
called a margin of 55%.
As the

As

brokers calculated, it was a

gin of

suckling dove.

as a

^

the

intensifying the dif¬

and

and

.

If

122%.

a

mar¬

bought

man

$10,000 worth of stock, the rule >
required that he pay in cash $5,500 <"■'
that

and

he

borrow

only $4,500.
of the cost
stock, but it was 122% of
the $4,500 loan. In ordinary times,
bankers and brokers had usually
considered that 20% to 25% of the

His
of

margin

55%

was

the

loan

was

from

the standpoint of the

margin
safety
of the loan, assuming that the loan
was well diversified, though they
always reserved the right to raise
the
margin
if
special circum¬
stances called for it.
Very much
higher margins had been required
satisfactory

a

bankers

the

in

brokers

and

•
■

This

in margin
requirements from 20% to 25%
of the loan to 122% of the loan

there has been

occasion

of

these

Besides

these

dom selection

meant

individuals,

a

ran¬

(Italics mine) of 450

buyers and sellers, together with
a

miscellaneous

number

firms

of

.

.

"The

investigation

ordered

was

September 23, when the SEC

on

said

would

it

the

cause

all

ing
the

attempt

learn

to

of the market's decline

September

on

by

3

reconstruct¬

roundlot transactions on
Exchange on that date.

Stock

At the

stock

time, it was stated that
irregularities in the sale of
or
if any pool operations

were

uncovered,

...

if any

was

the

SEC

was

prepared to take swift actions

against such manipulators." (New
York "Times," Feb. 23, 1947, page
2F, col 4.)
We have here

apparently

a pure

individuals

sums of capital'
formerly. His capacity to act

than

greatly

a
very high
margin
standpoint of the loan,
he could not buy any more stocks
on

moderate

declines

he

withdraw

any

This

account.

^

•:

.s

from his
factor
very/

last

individuals had to

their large

use

margins with the brokers for the
of paying the September'

purpose

income

15

necessary

tax, and this made it
for them to sell a great

shares of stocks in order to

many

bring

the

margins

up

above

the

that cash could be with¬

so

drawn for income tax purposes.

In

in

1929

break,
who

the

the

stock

>;

market

and brokers
margin require¬
and placed "loan value" far

ments

below

bankers

raised

had

market

values

the

while

promptly reduced
margin requirements in the -midst
of the crash as a means of easing
ing

was

them
to

ever

on,

situation,.always keep¬
high
enough,
how¬

they

Reserve

have done the same thing

when, the

continues to deter men from tak¬

loans.
The
authorities

the

protect

Federal

should

Action of this kind by the SEC

could

nor

cash

decidedly intensified the break in
September of 1937, because many

the credit

tions!

receded.

the

might turn up. A Federal Grand
Jury would be much more re¬
spectful of the rights of people to
privacy in their personal transac¬

frozen

was

market

with

Even
from

boom

a

the

moment

further

It

reduced.

meant that his account

the

7

purchasing
margin must employ
anyone

on

investigated
suspicious manner
but merely
on
the chance that
somewhere something suspicious

had acted in

increase

much larger

very

122%

fishing investigation, digging into
the private affairs of a large num¬
ber of people at random with¬
out even the pretext that the par¬
ticular

that

securities

was

throughout the country, was asked
to give information on the sub¬
ject.
.

sharp

1937

did

break

began, but
until after the

nothing

ing part in the stock market, and
is no small part of the explana*

break had gone very far, and until
after the Chairman of the Chase

tion of the "thinness" of the mar¬

National Bunk had made

Feb.

single day—which in
turn start the SEC on a new in¬

As

late

New

as

York

elaborate

23,

1947,

reports
investigation made

the Securities and

the
an

by

Exchange Com¬

mission of the stock market break
of

1946,-involving such
voluminous detail that the report,
Sept.

3,

on

data in the Commission's

hands by Oct. 7, 1946,
been completed.
"In
data

obtained

interviewed

buyers

that day

in

100

a

member

Exchange, the

of

the

of

largest

stocks

nationwide

also

on

canvass.

makes

which

possible

wide

a

on

vestigation!

the

de¬

mand that

they lower the margin
requirements, and the Chairman
of

the

of

Committee

Rules

the

House of

the

At

instance

of the

Securi¬

Commission
itself had
adopted complicated rules sharply
restricting the activities of spe¬
ties

and

the

Exchange

Stock

cialists

Exchange

and

created

certainty

as

floor
a

to

and floor traders

often
when

necessary

traders.

These

great deal of un

what specialists
might do. It was
at critical

times

quick actiqn by specialists

and floor traders, was needed,

for

Representatives had re-,;)

inforced

Specialists and Floor Traders

rules

investigators

sellers

and

had not yet
addition to

from

Stock

ket

breaks

"Times"

firms of the

prices of critical commodities and

can go

i
.

ticker tape, and they come more
frequently when transactions ap¬
pear
at a substantial change in
price.

to

the President

upon

bad. In

inquisitorial visits.
They come
less frequently upon the appear¬
ance of a large number of shares
in a particular transaction on the

the

give

The effect
was very

receht years

Commission's

The status: No




more

hearings held yet.

and to deal with production bottlenecks intro¬

duced Feb. 15.

the stock market

based

Bills to authorize Federal aid to education

introduced Jan. 6.

thus

However
however
legitimate their transactions, men
do not welcome governmental in¬

Bill to repeal Taft-Hartley Act
and revive 1935 Wagner Act with "improvements" intro¬
duced in Senate Jan. 6. The status: Senate Committee on quiry into them.
Labor

details

the

have

transactions

into by the government.
innocent their purposes,

...

else,

V

area

uncertainty, paralyzing action. ■

ficulties of the 1937 break

(Continued from first page)
of

was

as

immense

an

The Margin Requirements

Inquisitorial Practices of SEC

case

they are essentially
economic in their nature) were listed along with their then
existing status on Sunday last by the New York "Times"

,

was

•

We find it difficult to be¬

or any one

•

wild stock market of 1929.

the Commission visited the

as

was

man

There

by

In

major components (so far

of

People Becoming Tax Conscious

may

Program and Its Status

a

him.

People are now becoming tax conscious—as Governor
Dewey can testify. They are slowly beginning—at least we
hope they are—to become interested in profligacy and its
consequences. Controlling prices and wages begins to take
on
a different
appearance with quotations declining and
unemployment moving upward. It may be that the Presi¬
dent can reverse popular thought on these subjects, but we
certainly hope that he can not. The trend of political thought
is in reality bad enough in all conscience, but we hope not
bad enough to give "the Fair Deal" a green light.

his

ingly, of first rate importance regardless of the flimsy polit¬
ical ground on which the alleged mandate for it rests.

such

black, the 81st is hardly white—for which

was

the

implied if not expressed approval last November. He
do precisely what he now rather plainly threatens to
do. Indeed such a course would be quite in character. The
nature of the program he would then champion is, accord¬

a

to act quickly with
burden of proof against

for,a

easy

compilation it is evident that if the 80th

inform

The

-

made

even

A further factor narrowing

people of this country and stir

to be

to

it may,

beneficial. It is not

ist's action

early last November, just how profoundly remains
but the changes are sufficient to give a good
many of the rank and file of the people of this country
considerable pause.
They have quite evidently given
many of the labor union leaders pause.
Some of them
who were so loudly proclaiming what they were going to
do if the Taft-Hartley Act was not repealed, now seem

that the President again and again

again outlined in vague terms an impossible program
in which was included something for virtually everyone
except the' successful businessman. It is likewise
a fact
that he promised action. Unfortunately for those who would
Like to make a good deal of all this, it is likewise beyond
contradiction that many legislative candidates of Mr. Tru¬
man's party were not and never had been in their public
lives in step with the President on many of these questions.
A number of them had been the bitterest of his enemies

as

>

to be seen,

and

But be this all

Bill to go

status:

since

campaign

All Things Unto All Men

It is true,

The

program

for this "fair deal" program.

last November.

v:-;

j

i

lieve that the
the

Exchange
rul-

The President outlined in White

thank kind Providence.

we

and

putting the burden of proof
upon the specialist, requiring af¬
firmative proof that the special-

for development of Columbia
along TVA lines. The status: Bill not yet

basin

Congress

President who vetoed it,

of the veto throughout the

statement

From this

a

the coattails of

and made much

development.

introduced,

massive scale with any such
command or directive. A Congress, a majority or more
of whose members helped to override a veto of the TaftHartley Act, can scarcely be said to have ridden back,
forward

go

strengthen Federal

Banking and Currency Commit¬
House; hearings to begin in the Senate on March 3.

tee in

Securities

The

ing

Bill to continue and
24.

action called for.

before executive session of

any

hope to

up

low-rental

and

controls introduced Jan.

rent

finds to be the facts and their
of the matter

clearance

slum

Rent control.

of this, nor

why

Commission had

for

(Continued from first page)

none

specialists to confer with members »
of the Stock Exchange Commit- j
tee instead of taking the prompt ;

Housing. Bills setting

As We See It

But

Thursday, March 3, 1949

CHRONICLE

FINANCIAL

&

this

demand.

mental

regulation

market

in

and

1937

of

Govern-j
the

stock

by the Securities,

Exchange Commission and by-

the
was

Federal
not

The

a

Reserve

brilliant

authorities 1

performance.

requirements for;
high, but the
margin requirements were made.1
still
higher for specialists and
margin

customers

floor

were

traders

very

on

the

floor of

the

Stock
the

Exchange. In May of 1937
rule
was
promulgated that

floor traders and other Stock Ex-

•W

^Volume 169

change partners must have
gin

of

122%

their

on

a mar¬

maximum

obligations during the course of
the day, whereas customers need
notput up additional margin until
their net position

ascertained

was

£t the end of the
day. It was esti¬
mated at the time that with mar¬

gin

THE

Number 4782

requirements

at

regular way,
exchange,

effected on
(2) at such
price unless such price is above the
next preceding different price at

of,

which

regular way,
exchange."
This

the
and

though

specialists to carrying stocks

was

rule

reduced

the

by

floor

approximately

70%

from what it had been under the
old 20% rule, and that this was
still

further

reduced

by the rule

promulgated in May.

Stock

Exchange

[

Selling—

Rules,

1931-

May, 1935
A

further

factor

the

thinness

the

restrictions

These
late

had

1931

of

involved

the

market

in
was

short

on

selling.
operative from

been

through

been concerned with mar¬
ketability in examining the stock

security,

effected

such

on

than

the

prevailed in 1937, al¬

a

first

forbade

rule

impressive fact is that so
men
kept ,sane and re¬
mained
responsible rather than
the

securities at

"short

sale

of

any

keep

the stock

mar¬

ket

good many failed

a

failed to

and

sane

responsibilities. There is
intoxicant

and

money

trol

than

mental

cheap

credit. But

lay

with

institution,

Federal
with

the

Reserve System, rather than

But Actual

Legislation and

the

None

less, legislation com¬
"truth in securities" was

pelling

under

the

1938

be

made

garding

rule, short sales
only at rising
whereas, under the rule
1944 short sales could

financial

matters,
with
of the Securities Act

the purposes
of

1933.

On

other

the

hand,

ter of New York

Exchange
since 1935

ferent

drastic that it would

recommenda¬

inated

an

which

would

in

action,

and

matter of SEC

a

tion

action.,

or

We

have

noted

discussing the decision to keep

the

Stock

Sept.

Exchange
1931,
when

21,

open

on

England

abandoned the gold standard, that
a

rule

.

was

forbidding

short

selling

adopted by the President and
Governing Committee of the

the

New
to

York

the

Stock

Exchange,

due

emergency.
On
Sept.
rule was rescinded.
But

23

this

on

Oct. 5, 1931, the Business Con¬

duct

Committee of the Stock Ex¬

change ruled that before execut¬
ing any sell orders on the floor,
members

notify
such

should

floor

members

orders

and

that

ascertain

XVII,

which
of

of

the

covers

be held

Section

the

short,

or

would

responsible under
ticle

whether

long

were

members

and

4, Ar¬

Constitution,

bringing about

condition of demoralization in

a

prices.

At

that

time

practice

a

of

order? to

giving preference to
sell for long account. On

Nov.

23,

1931,.: the

duct

Committee, in conjunction
other
committees, decided

grew

up

with

that

stock

no

short

lor

sale, and

Business

could

be "stopped"2

below

account

Con¬

the

last

Jan. 22,1932, the Busi¬

on

Conduct Committe ruled that

ness

identification of orders applied to
bonds as well as stocks.
So far

restrictions

have

we

created

itself

on

voluntarily
by the Stock Exchange
short selling.

SEC Itules

Short Selling Begin

on

May, 1935.
On

May

^

.

27,

1935, however, a
by the SEC led
Stock Exchange rule that no

recommendation
to

a

of the Exchange should
facility of the Exchange
effect on the Exchange a short

member
use

to

any

sale

in

the

unit of trading below
regular sale price.
Ex¬
emption was provided for "odd

continued

at

unchanged

an

price had been lower.

The rule in effect in 1937 elim¬

in

effective short interest,

bring about rallies
declining market. It was a

a

rule

prevented
the
short
sellers from initiating a down¬
ward move in the market. Short
could

operate

only

on

a

market.

rising

This was a very
"bulls," super¬
ficially viewed, but it did not
help if the purpose was to create
nice

a

rule

the

for

steady market for investors.
short

seller is extremely
prices are breaking.
He must cover (i.e. buy) then to
take
his
profits. It is perfectly
legitimate that the short seller
The

useful when

active

be

should

of

stages

in

break,

a

desirable

that

the

he

early

indeed,

and,
should

be, in
ade¬
quate short interest in the market
to cushion the bottom, in order
that the magnitude of the
tbrq^k
may be lessened by short cover¬
ing, and in order that there may
be frequent strong rallies in the
Now, all of this legislation and
all of these rulings were benevo¬
lently
designed
to
protect
in¬
vestors

and

in

cesses

tition of

the

wild

prevent

stock

market.

stock

such events

rise

market

the

to

designed to prevent

were

of

market

crash

108.C4

190.38
then

dropped

of

the

1929.

to

of

1

14

of

But
rose

1935

97.46

by

to

and

1937,

is not

1938. This

of

record for

stock

and

Industrials

Aug.

on

They
repe¬

the

as

June

on

ex¬

a

1924-29,

Dow-Jones

from

March

brilliant

a

governmentally con¬
trolled,
daily
inspected,
con¬
stantly managed stock market, de¬
signed to give protection to in¬
vestors and designed to eliminate
wide
fluctuations
in
security
prices.
a

last

lot"
of

the

dealers

prices

and

for

Securities"

rule

Legislation

Needed

equalization

other exchanges. This

on

in

"Truth

The Securities Act of

1933, de¬

went into effect on June 3,
1935, and remained in effect until

signed by the Congress to compel

1938.

closure

It

under

was

growing out of

this

rule,

"truth in

securities"
all

of

and full

material

dis¬

in

facts

Ex¬

sues,

change felt obliged to accept, that
the great smash
of 1937-38 oc¬

pose.

with new security is¬
had a very laudable pur¬
We had had an orgy between

1925

and

of

the

curred
In

SEC

on

a

recommendation

which

the

the Stock

1938

Stock

Feb.

the
SEC began to make direct regula¬
tions which took the place of rules
on

10,

Governing Committee of
the Stock Exchange.
The rule of
the SEC as it appears in General
Rules
and
Regulations
as
by

the

.

.

.

amended to and including Feb. 15.

1944, "Rule X-10A-1 Short Sales,"
reads in part as follows:3
"(a)
own

No

person

account

or

shall,

for

his

for the account of

other person, effect on a na¬
tional securities exchange a short
any

sale of any

security (1) below the

price at which the last sale there¬
2 A

"stop loss order," is an
given price, lower than
the.prevailing price, is reached, or to buy
if a given price/ higher than the prevail¬
ing price, is reached.
Such orders be¬
order

come

price
is

"stop,"

to

sell

the

a

obtainable,

the market," i. e.. at any

if the

designated price

reached.
date of the

promulgation of

this rule is not stated in the document, j




latter

part of

1929

security issues, many of
which ought not to have been is¬
sued, and many of which could
new

not

have

closure

been

had

sold

been

if

full

dis¬

made regarding

them.

Prior to the middle of 1924
investment bankers
had

shown
for

real

sense

investors.

of

on

great

a

their

cern

our

the whole

deal

of

reputations

con¬

and

a

responsibility toward

There

were

occasional

lapses, notably in the period 1897
1903, which was like the 1924-

to

29

period in that there was a great
of money and credit avail¬

excess

able, and
too

a very eager

much

anxious

cash

to

or

if

orders "at

3 The exact

connection

of

Exchange.

But

with

money

cheap

in

its

speculate

public with
hands

in

and

stocks.

the

appalling excess of
and credit created by the

money

read the

men

bill

there

as

The

—

functioning
abuses.

law

but

of

associated

and

fered

of

became

issuing

very

Taking
standard

the

"Chron¬

pure

1923

year

a

as

should not make

the

comparison with the
wild
years, 1925-29—we find no year

in

the

new

period,
corporate

amounted

to

1933-45, in
security
much

as

which
issues
50%

as

the issues of 1923. In 1934

15%. In the

years

porate

se¬

new

more prosperous

of 1936 and 1937 new
issues were higher,

cor¬

but

then they were only 46% of
those in 1923, while in 1938 and

even

1939

they

fell

to

33%

and

14%,

respectively, of the 1923 levels.
SEC

Does

Much

Than

More

v

Harm

Good

Securities ^and. .Exchange

Commission

has

done

than

harm

more

curities Act of 1933

much
Se¬

very

good.

The

itself in¬

was

wholly

stock

share.

per

the

At

within

its

and

to

by stockholders under the
subscription offer which expires

up

The

(EST)

stockholders

March 14, 1949.

on

the

of

terms

offering

for

are:

standing share of

each

and

southern

and

255
other
cities,
plantations. This ter¬
ritory has a population of 560,000,

two-thirds

company

of

the

State's.

operates

now

four

manufacturing plants, but ii
plans to discontinue its gas busi¬
in

Rockland

and

its

sell

to

other gas properties this year.

J. McCrea French Admits

to

out¬

stock,

common

of

electric

and

ness

will purchase any shares not taken

at 3 p.m.

State

an

gas

share. The underwriters

per

of

which includes the

towns

The

6%

preferred for subscription, also at

$15%

central

about

utility
additional

common

the

primarily

an area

Rockland

the

shares
of

will

centers
of
Portland,
Portland, Westbrook, Lewiston, Auburn, Brunswick, Bath,
Biddeford, Saco,* Sanford, Gardi¬
ner,
Augusta,
Waterville, Fair¬
field,
Skowhegan,
Belfast
and

of¬

is offering an
of the common

company

67,300

time

same

proceeds

South

($10 par), at $15%
V; :,,f C-\'

,

net

industrial

Inc.,

219,196

1,

in

mers

Maine,,

Co.,

March

Allen Crawford

as

Partner

common

ATLANTA,
GA. — J.
McCrea
French has admitted Allen Craw¬

stock; for each outstanding share

ford, Jr. to partnership in J. Mc¬

one-sixth
of 6%
of

a

of

share

a

of

preferred stock, five-sixths

share of

French

Crea
Street

The 219,196 common shares be¬

underwriters
which New
England Public Service Co., pa¬
rent company, has waived its pre¬
emptive rights under the offering

ing

offered

the

by

shares

represent

286,496
Power's
to

on

Co..

22

Marietta

of

common

shares, Nepsco^
Central
Maine
will be reduced

Building. Mr. Crawford has
associated

been

Now
LITTLE
L.
of

Mr.

French,

Proprietorship
ROCK, ARK.—Eugene

Villareal is
E.

West

66.53% from 77.8%.

with

in the firm for some time

On the sale of the

common

ownership

&

common.

to stockholders.

The

entire

the

applied to further reduction

utility, serving about 199,000 do¬
mestic, commercial, industrial, ag¬
ricultural
and
municipal custo¬

shares of Central Maine Power Co.

of

curity issues were less than 7% of
the 1923 levels, while in 1935 they
were

be

Central Maine Power Co. oper¬

underwriters

publicly,

holders

one

—

&

ex¬

proposes

short-term bank loans.

Power Go. Common

prevent

as

business

sterile.

very

company

and

con¬

Ripley & Go.

Ripley

made

bonds, series R, due 1979, at com¬
during March, 1949,

Offers Central Maine
Harriman

short-

help finance the company's

petitive sale

was

stop normal

well

as

The

securities

new

to

applied

of
were

to sell $5,000,000 of first and general
mortgage

series

the

of

three will appear in the
icle" of March 10.)

was so

limitations
them.

issue

of

virtually

as

is

It

the

on

securities

the

to

credit

as

new

L.

now

sole proprietor

Villareal

Second

and

Co.,

117

Street.
253CJ

gsssg

x

stop

to
of

the

Securities and Exchange Commis¬

sion,

constituted

as

that

it

aided

that

at

investment

date,

bankers

in getting from the Congress cer¬
modifications of the extreme

tain

restrictions

of

the

original Act.
legislation, as adminis¬
tered by the Securities and Ex¬
change Commission, has radically
But

the

limited
ties

as

stock

issue

the
well

as

market

of

jtJST

thep?^

REVISED 1949 EDITION OF

securi¬

new

orr

contributing to the
situation

just

"SECURITY DEALERS OF NORTH AMERICA"

re¬

viewed.
SEC Versus Congress On

Marketability
The
as

concept of the stock market

broad

a

which

men

and

active

who

need

market in
to

sell

can

find

buyers and men who wish
to buy can find sellers, in which
the spread between the bid price
and
asked
price
is
narrow,
a
market in which securities

can

be

marketable, encountered definite
hostility upon the part of the
Securities and Exchange Commis¬
The
Commission questions

sion.
the

value

and

importance

of

liquidity in the securities market
pages 98 to 102 of its Report
on
Segregation of June 20, 1936.
In
this,
the
Commission
runs
definitely counter to the inten¬
tion
of
Congress which, in the
Banking Act of 1935, legislation

America's

in

more

and

than

recent

now

its

reasserts

phasis

on

sential

long

standing

marketability

attribute

securities.

Banking

over

em¬

308

vestment

1935

securities'

marketable

daily reference.

6,000

cover

to cover—containing

important changes in data indispen¬

in the investment business.

the

of

Bound in durable

"As
used in this section, the term 'in¬
of

your

sable to anyone

es¬

an

of stock

directory

investment

of

Section

Act

as

ready for

Entirely revised from

Securities

the

only COMPLETE

and bond houses in the United States and Canada

Exchange legislation of 1934,

says,

shall

obligations."

limp fabrikoid

SQ.00

mean

This

ENTER

is

YOUR ORDER TODAY

in harmony with long established

banking law and long established
practice of the Comptroller of
the
Currency
in
dealing
with
National

banks.

The

bank

HERBERT D. SEIBERT &

ex¬

policies of the Fed¬

aminers, in examining a bank's
Banks, particularly bond
portfolio, have been con¬
after the renewal of cheap money
stantly concerned with market¬
in
the
autumn
of
1927,
credit
ability as measured by frequency
standards broke badly; financial i of quotations and
by number of
eral

NOTE

article

be

its

allowed

Congress, to guide its policy in
dealing with the stock market.
(EDITOR'S

will

reduction

tensive construction program. The

of

cluding

the

Ex¬

and

theories rather than the

own

proceeds

term bank loans which

credibly drastic and imposed such

of the break.

course

Commission

change

common

that there may be an

order

31

such

that

sellers

Securities

The

bank

behind

called

general recognition that it

as

loans.

Harriman

Administration Paralyzing

was

price, provided that the last dif¬

voluntary

Net
toward

ates

could

be

al¬

Maine and is

for, and there was sym¬
pathy (which the present writer
shared) among men informed re¬

prices,

have

private finance.

between

in effect in

collateral

exchange

con¬

govern¬

a

smash of 1937, and continue
operative today, originally as a mat¬
Stock

meet

no worse

prolonged

excess

this

of

they

below the price at

or

effected." The dif¬
the rule quoted
above which was in effect in 1944,
and
the
rule
promulgated
in
February of 1938 seems to be that
way,

ference

fact that

and

ways

.

many

to

stricter

,

'The

which the last sale thereof, regu¬

Short

oil

transactions

came.

29

(985)

abuses

little less strict than the
promulgated
by the
Securities and Exchange Commis¬
sion effective Feb. 8, 1938. That

lar

Restrictions

which

rule

CHRONICLE

judgment went haywire; and great

of. such

is

FINANCIAL

was

was

rule

122%,

of

sale

a.

&

or

such

traders

ability

COMMERCIAL

REctor 2-9570

aa:

CO., INC.

New

25 Park Place

Reserve

RS

York

7, N. Y.

THE

(986)

30

COMMERCIAL

&

Many managements will argue
place than ever before, but its
that tney cannot afford to reduce
is abnormally high.
•
prices —that
their margins are

in

Economic Outlook and the Construction
(Continued from first page)
goods and

consumer

to

order

snow

tween

l»4o

trend

trie

you

increased

taxes

$9.8

billion, but expenditures for
sumer

con¬

goods increased $14.4

lion.

Tnis

dollar

that

meant

for

by $1.47.
for

tures

next

and

consumer

the

m

be¬
expendi¬

goods

again

Between 1946 and

dollar

increase

m

after

come

raised

1947, for

their outlay

individuals

for

consumer

Between 1947 and

1948, however, the story
different.
taxes

in¬

consumer

taxes,

goods by $1.21.

every

was very

Personal incomes after

by $16.8

grew

expenditures

billion,

but
consumption in¬

on

creased

by only $12.0 billion.
In
other words, for every dollar in¬
crease

in

taxes,

individuals

expenditures
Even

only

by

between

the

incomes

consumer

in

crease

raised

and

in¬
con¬

of 1948.

Between the second and

is

that

1949

from

peacetime

maintaining
in

becoming

production

production
had

has

to

busi¬

that

real

a

problem

employment.

of

Back

1945 and the first half of 1946

business did

magnificent job of
maintaining employment during the
conversion from war production
to civilian

a

production.

be able to do an

ness

job in

1949?

Let

problem and

Will busi¬
look

us

what

see

the

at

be done

can

To

begin with, it is important
the

does

government

aggravate the problem.

not

not

President

understand the problem.
He
that the country is still

thinks

primarily
problem

confronted with
the
of preventing inflation,

he has

and

advocated substantial

in

received

This

taxes.

is

likewise

advice

from

his

and,

if the published statements of the

reluctant to spend

Secretary of the Treasury are to
and are bringing the amount of their be 'taken at face value, from this
as
well.
spending closer to their incomes. official
Fortunately,
All nonagricultural business con¬ Congress sees the situation more
more

their

increased

cerns

tures

expendi¬

plant and equipment by
billion between
1945
and
on

$5.4

by

1946;

1946 and

$4.2
billion
between
1947, and by $2.6 billion

between 1947 and 1948.

business

more,
and

less

Further¬

concerns

inclined to

money in order to
their incomes.
In

ample, out of

less

are

seek

outside

spend beyond
1947,

for

ex¬

dollar spent
by corporations,
cents was provided by in¬
ternal funds, such as depreciation
allowances or plowed-back earn¬
every

investment

on

54.4

ings, and 45.6 cents
outside.

In

of

cents

1948,

from the
however, 66.9

came

dollar of invest¬
ment expenditure was provided by
internal funds and only 33.1 cents
by outside money. Put in another
way, corporations spent 89.9 cents
of outside money on investment
in 1947 for every dollar of in¬
ternal funds spent in that way.
In 1948, however, they spent only
54.5

every

cents

of

investment

outside

for

internal funds

money

dollar

of
With the

every

spent.

so

rate of saving by

on

plainly than the President
advisers

and

increase

taxes

future.
taxes

is

not

in

his

or

likely

to

j

have

advocated

higher

have submitted

and

memo¬

interests

have

of

are

submitted

un¬

contrary

union

to

which

memoranda

on

withdraw them, and all unions, in
the
interest
of
their
members,
should oppose

magnitude

the

of

and

prospective

in government

increases

spending.

the second half of

During
1948, total cash

payments of local, State and Fed¬
eral Governments to the public

running at an annual rate
$4.6 billion above the first half

were

of

of 1948 and cash

receipts from the

running at an annual
billion below the first
During 1949, the cash pay¬
were

ernments

can

and

individuals

to

spend

be halted before it produces a

drop in total spending and

a

re¬

ments of the local and State Gov¬

will

rise

People
to spend a little

ing.
ever,

sonal

By

the

of

1948, how¬
the rate of increase in per¬
end

incomes

slow—it

was

had

become

less than 1%

very

(at the

seasonally adjusted annual rate)
between the third quarter and the
fourth quarter of 1948.
Hence, a
small further

drop in willingness

to spend would produce an actual

drop in the volume of spending.
What
a

drop

can

in

business do to prevent

the

spending—or

total

volume

of

given
volume of spending
produce a
larger volume of production and
employment?
Under the Amer¬
to

make




in

relation

incomes after taxes.

1948,

total

8.0%

of

taxes

in

to

personal

In December,

credit

consumer

after

billion.

$8
the

was

Federal

The
cash

budget,

approximately

$8.3

which
billion

would produce
surplus.
The

taining

task

of

a

moderate

cash

(4)

The.

boom

has

with

12.0%

three- year

postwar

resulted

not

in

any

^reat accumulation of inventories

One

take.
ment

business

and

in

main¬

employ¬

policies to present conditions

and the other is to

inventories

actual

are

(1), Adjusting investment poli¬
1947
for

the conditions of
1948

and

business

portant
which

in

been

inventories

in¬

no

relative

to

and

only small relative increases
wholesaling and retailing.
In

in

all

the ratio of inventories

cases

to sales

is substantially less than
in 1939 or 1940 when goods were
obtainable

when

it

small

notice

short

on

feasible

was

to

and

carry

inventories.

relation

product.
tures

For

plant

on

national

gross

example* expendi¬

about $22

were

the

the

to

equipment
billion or 8.6% of
and

national product.

gross

Be¬

tween 1919 and 1923, expenditures

plant

on

about

9.3%.
in

of

Gross

.

1926-1929,

private
of

15.4%

was

national

the

between

land

1948

equipment were
gross national

and

8.8%

in

product

17.6%

needed

urgently

did

im¬

an

expenditures

not

comparison

1909

between

and

18.1% between 1919 • and
1923; and 17.1% between 1923 and

during the last eignt
that proiits per dollar of
remained about the
Before managements decide

they cannot afrord to adjust
to the growing reluctance

prices

spend money, they should con¬
sider the consequences of not re¬
to

them,

ducing

reauced,
to spend
comes.

prices

if

(6) The
demand

backlog
still

is

of

consumer

in many
places.
It is true that consider¬
able progress has been made in
increasing the number of auto¬
mobiles

in

the

large

country.

present

time

passenger

there

are

At

.

about

the
34

registered
in comparison with 27.4 million in
cars

The

average age of auto¬
has increased from 5.7

in 1940 to about 8 years at

the beginning of 1949.

Hence, an
abnormally large replacement de¬
for automobiles still exists.

mand

not

are

people will begin

many

less man their recent in¬
This will mean that ex¬

penditures drop, and as they drop,
profits will aiso fall.
I do not
know which drop in profits would
be

resulting from

greater—a drop

about tr.e

same

sold

goods
spread

physical volume of

smaller

at

direct

between

average
costs and

early
I am
afraid that most of the postpone¬

selling prices or a drop resulting
from a smaller physical volume of
goods sold at

result

a

of the limited

prices.

rather

as

tnan

ponement

result

a

orders

of

the

of

post¬

business

by

Nevertheless, the rate
investment in 1948, as I have

pointed out, was not abnormally
high in relation to the gross na¬
tional product.
In

1949,
promise an

expenditures

early

which

return

the

to

should be carried out.

concern

In

addition, however, greater weight
should be attached to the long-run
interests of

enterprises, and

should

be

not

man¬

easily

persuaded to postpone the execu¬
tion of long-run investment

plans

because immediate business pros¬

pects

are^ uncertain.

ways

been

the

American

al¬
of

that

economy

decisions

vestment

It has

major weakness

a

have

in¬

been

highly sensitive to the short-run
business

outlook.

For

many,

il

TiOj; most'firms, greajt attention to

outlook

run

the

which

or

to base their

attempted

plans too much

upon

long-run outlook have often

an

unchanged spread

direct

between

capacity of the cap¬
ital goods industries to fill orders

business

whole the difference in prof¬

a

its

preserving

between

volume

accepting smaller mar¬
gins and sacrificing volume in or¬
der
to preserve
margins is not
through

very great.
Certainly it is better
for business in the long run to

in order to pre¬
employment than to sacri¬

serve

in order to pre¬
Furthermore, if
business adjusts prices to induce
individuals to spend a higher pro¬
portion of their incomes on con¬
sumer
goods,
there is a
good
chance that the greater pressure
for lower costs will stimulate effi¬

fice employment

margins.

serve

ciency and help enterprises
the

serve

pre¬
margins between aver¬

direct costs and selling prices.

age

Up to the end of 1948, as I have
indicated, the drop in the willing¬
spend has net gone so far
increase in spend¬

to

ness

halt the

to

as

ing—it had Simply caused the vol¬
ume
of spending to rise at a de¬
creasing rate.
When the figures
for

early 1949 a^e available, they

will

probably show a more-thandrop in spending. Retail

seasonal
sales in

below January, 1948

January,

1949

Furthermore,

ume.

were

1.9%

in dollar vol¬
some
of the

present employment and the con¬
sumer

spending based upon it are

the result of investment

decisions

business concerns last
year
or
even
earlier.
As
the
the hope of getting construction spending based upon these old de¬
done at a lower cost at later dates. cisions is completed, the total volConstruction costs are likely to ume of spending can drop appre¬
drop moderately as materials be¬ ciably. Hence business should act
come
more
abundant, labor and promptly to stimulate the demand
managerial
efficiency
improves for goods. People have sufficient
and competition among contract¬ incomes to buy more consumer
ors becomes stiffer.
Managements goods than they are buying—in¬
which contemplate postponing in¬ come sufficient to permit them to

be

tempted, however, to cut or
postpone investment programs in

made

by

Although average real income per

vestment programs, however, purchase at present prices nearly
family is about 25% greater than should consider carefully whether 4% more than they bought last
in 1940, the number of cars has the prospective savings in cost are year.
Hence business has excel¬
not increased
as
rapidly as the likely to compensate the enter¬ lent opportunity to stimulate the
number of families and- the -ratio- prise for being without improved demand for goods and to prevent
of cars per family
has scarcely facilities for about six months or the drop in the urgency of de¬
mand
from
changed.
The backlog of housing a year.
causing
people
to

is still very great.

demand

ing the last three
been

increase

an

houses

Dur-J

Adjusting

(2)

of

into

roughly 2.5
dwelling

dividing of old
dwelling units.
period, however, the

more

In the same

families has increased

of

to

the

state

present

increase of $1.00 in in¬

after taxes

of

7.7

And the rise

million.

family

income,
the

of

amount

in real

course,
of

in¬

dwelling

demanded.

(7)

The backlog of business de¬
is also very large.
The
investment of the last three years
has

only restored the amount of
plant and equipment per worker

to the level of 1929.
of

plant

worker

and

were

required
$60

be

in

private

required.

course, more

trends,

long-term

investments

billion

would

per

raised to the amount

by

additional

If the amount

equipment

of

about

industry

There is, of

a

rise

goods do not fit the situa¬
individuals spend on
consumer
goods only about 71

sumer

tion

when
of

cents
of

concerns

prices
years

additional

every

income

after

as

markable

mand

produced

in expenditures for con¬

$1.21

a

taxes.

whole

restraint

showed
in

re¬

raising

several
when consumers were will¬
during

the

dollar

Business

last

ing to spend more than their in¬
comes.
Indeed, for three years
prices remained below the level
required to equate supply and de¬
mand, as the steady rise in most
prices indicated. Hence the re¬
duction in prices needed to pre¬
vent

a

drop

production

plant and equipment great.

is

in employment and

probably not

very

by

so

much less that the differ-

erence

cannot be offset by invest¬

ing

ment.

The
needs

extent

to

business

which

stimulate

to

'.

;;

iv

the prices which were appropriate
come

million and the

throw themselves out of work

spending too much less than their
recent incomes—that is, by spend¬

ing and pricing policies. Certainly

by

10.0

consumer

goods in many
lines requires modification of sell¬

more,

about 3.0 million.
Further¬
in the preceding 15 years,
the number of families had in¬

of

and

concerns

for

an

by

selling

The declining urgency of

demand

when

creased

the

there has price policies of business

the

and

houses

number

years

<

sacrifice margins

encountered serious financial dif¬

Nevertheless, there are
many concerns which do not need
to
adjust their investment pro¬
grams to the short-run business
outlook. Some of these firms will

selling

and

costs

I suspect that for

ficulties.

1929.

years

mucn

as

have

an

or

about

prices

sales

an

promise

the' short-run outlook has been a
investment financial
necessity, and enter¬
the gross
prises which misjudged the short-

.

creases

up

postpone

reduction in costs
increase in output.

tany

In

1949.

appropriate

was

not

were

agements

(5) The rate of private invest¬
ment during 1948 was not high in

space

was

to

wnich

and

it

investment

of

There has

sales since 1946 in manufacturing

of favorable circumstances:

(1) Incomes have recently been
outrunning prices. In December,
1948, personal incomes after taxes
were running at the annual rate
of
6.5% above December,. 1947,
but
the consumers' price index

adjust its sell¬

ing policies, particularly its price
policies, to present conditions.

concerns.

ment is made easier by a number
,

to adjust its invest¬

is

fact,

matter of

a

years so

mat

indicate.
crease

risen

ment which occurred was

comparison

in 1940.

number of dwelling units by only

production

so

As

have

as

same.

the

billion and
cash surplus in

dropping

produces a decrease in
expenaitures, production
employment?
Tnere aie two,
principal steps which business can

units from the construction of new

between $7

from

small.

costs

incomes,

ment

by

pre¬

and

was

income

personal

to

increasing reluctance to

money

cies to

in-,

very

do

that it

demand.

only 2.6%—a gain in the
purchasing power of personal in¬
comes of about 3.8%, or $7.6 bil¬
lion a year at present prices.
The
ican system of private enterprise gain in incomes relative to prices
the responsibility for maintaining has been particularly pronounced
the volume of employment
mid - summer.
Between
(or since
a

low

spend
lar

million in the number of

still willing

are

shori-Term

the

vent

business

can

by about $1
billion to $2 billion above 1948
and those of the Federal Govern¬

during 1948, will virtually dis¬
appear—though enactment of the
more than their
recent
incomes with the result much-needed social security pro¬
that total incomes have been ris¬ gram, if effective on July 1, 1949,
cession.

still

1940.

prices is weakening.

prises

Consumer

mobiles

problem confronting business
substantially limited by large

half.

confront¬

(3)

debtedness, although consideraoiy
larger than several - years ago, is

is

side money dropping, it is easy to
see that the
upward pressure on

question

than three years ago.

the

rate of $4.-3

crucial

large—.about $10.8 bil¬

million

higher taxes at the

present time.
Fortunately,

since

1948.

more

members.

unions

the

the

this point to the President should

recent

risen nearly 5%

very^

1913;

Higher taxes at
time would create

Consequently,

mean¬

lion

President.

the

the

Consumer holdings of cash

with

present
employment and

In

are

randa favoring higher taxes to the

ing and with the demand for out¬

The

(2)

immedfale product

the

Some trade union organi¬

zations

individuals ris¬ public

ing business in 1949 is whether
the growing reluctance of enter¬

in¬

a

The President has

bad

What

probably larger than the figures

Council of Economic Advisers

are

$191.5
an

words, the pur¬
of consumer in¬

power

has

—thougn
H

that

other

the summer of

equally good

about it.

major blunder.

Business concerns

The
maintaining and

war

after taxes,

goods by only 49 cents.

of

billion,

4.6%.

In

chasing

business, and the year
the first year since the

is

171.4.

comes

its job.

of

increases

their

rate

$200.4

of

that

do

primary job of
increasing employment, however,

fourth quarters of 1948, for every
dollar
rise
in
personal income

individuals increased
expenditures on consumer

to

event

the

in

fails to

his recent statements that he does

the

annual

an

em¬

in

for

irom

billion

maintain

to

Truman has made it evident from

goods during the latter part

sumer

business

of

ure

cents.
the dif¬

advance

expenditures

re¬

sponsibility of offsetting the fail¬

after

their

71

marked was

more

ference

income

consumer

MI

i»48,

personal incomes after taxes rose

business, and it also has the

ness

smaller.

was

employ¬

Industry

1948, and December,

time, the consumers' price index
dropped sligntly from 171.7 to

between

two

of

June,

crease

shift

the

volume

in¬

the
responsibility
of
not
aggravating
the
difficulties
of

faster than personal incomes
after taxes, thougn the difference

grew

normal

average age

nas

business

goods

the

ment) is primarily the responsi¬
bility of business. The government

ployment

year,

1947,

crease

their

consumer

the

In

1946

tween

about

after

gain in income
individuals increased

expenditures lor

bil¬

every

of

taxes

1

Be¬

years.

1940 personal in¬

ana

after

comes

In

services.

going back several

am

bringing

Thursday, March 3, 1949

FINANCIAL CHRONICLE

consumer

spending in order to prevent a rise
in unemployment depends in the
main upon
work

(1) the increase in the
(2) the increase in

forces;

(3) the in¬
government spending

output per manhour;
in

crease

and

(4) the change in investment

expenditures by private business.
This ignores

the change in foreign

trade balances which are likely to
be small.
If the labor force

by the

grows

normal amount of 600,000 between
1948 and 1949 and output per manhour rises by about
of about $10
gross

will
in

3%, an increase
billion in the annual

product
be

needed

at
to

present

prevent

prices
a rise

unemployment.. I have already
that' governments ex¬

indicated

penditures

are

likely

to

rise

by

,

Volume

169

from. $8

Number 4782

billion, to

billion

$10

a

The accumulation of inven¬

year.

tories

by business enterprises is
likely to cekfee. This would mean
a

drop of about $3 billion in busi¬

ness

of the most

fect

competes

expendi¬
equipment -is
possible—perhaps $3 billion below
1948.
These figures
indicate/that
a

rise

in

of

the

of

with old clothing,

hats with old
old

volume

hats,

Let

furniture

new

cars,

with old

expenditures' furniture, new houses- with old
roughly $6 billion to $8 billion houses, new machinery with old
machinery. ^ Price - cuts om new
year atrpresent prices will
consumer

prob¬

ably be needed to prevent a rise
in
unemployment.'' There ' is,'" of
course, a possibility that; the in¬
in

crease

force

•

the

will

than the

size

be

the

of

greater

labor

smaller

or

normal amount

of about

600,000.
V

Would -it not be preferable Tor
business to attempt to "stimulate
the
■;

demand for goods by
raising
rather

wages

prices?

than

Some

by

reducing

unions

have

al¬

ready
been
urging that wages
should be increased to boost con¬
sumer

buying

Against

power.

price cuts may be urged two
argu¬

(4)

price

if

•

the rates of
taxation, the more
important become reforms of taxes
to

industrial

and

for outside funds, new bank loans

VI

"v What can the construction in¬

dropping from $2.9 billion to $800
million. Less than one-fifth of the

prices.

Undoubtedly the price level

of

the United States, must rise
relative
to other
price levels in order to
enable this
country to be

paid in
imports for the goods which it ex¬
ports.
That is a problem which

must

be'solved
but

years,

the

it

in

immediate

needed: to

maintain

of

and

dustry

long,

the

of

small.

some

in

and

the

large

or

that

hands

consumers

Furthermore,

of
are

post¬

any

today will

larger sales tomorrow.

Price

cuts

advantages
a

post¬

reason

ponement which occurs
mean

postpone-,
this

be

not

simple-

goods

merchants

business "sta¬

but

would

for

stocks

adjustments

method

have

two

are

increases

over wage

as

of

equitable than wage

move

increases

because

all

consumers

obtain the benefit of lower
prices
whereas
only
small

preferred

obtain

groups

higher

1948

the
proportion
was
little
thanone-fourth. Only about

funds

used

is

by
The corporations in 1947 (this excludes
in¬ depreciation allowances) was
for all other industries raised by new security issues. In

as

the

this

for

same

offer a better product
price.
The industry

lower

a

more

ijnay answer that it can not afford 22|%' of - all private domestic
o1 do
this.
Implicit in this an¬
curity

swer

ent

the qualification "at pres¬

is

issues

,

in

the

last

years-feave been sold

efficiency."

Efficiency is not
a
static thing.
The quality and,
the prices which an industry can
offer at the efficiency of 1948 are
not
necessarily the quality and

se¬

three

to individ¬

uals, and- individuals have
only about one-tenth of all
sonal

savings into
curities.-...'/■>:••• ;.p

put

the

Guts

wages.

-benefit

in

of

non-agri¬

corporate

'

'

prices,
for
example,
help farmers who are ex¬
periencing droos in the prices of

weak

now

tainly

taxes

after

come

,

consumers'

for

goods than when they

tions

spend¬

upon

are

out of every increase of
£l tor consumers' goods.
y .
I do not wisn

to

get into

gument over whether

dependent
Outside funds for capital. The
condition is partly the

fault
which

an ar¬

not

or

become

more

present

ing $1.21

little

con¬

of.corporate managements
by and large have made

study of the problem of of¬

high." One fering individuals the kind of se¬
can defend them
by pointing out curity which persons of moderate
It is
that per capita income after taxes means can afford to own.
is up about
130% since 1940, and partly the fault of government
struction costs

that

are

"too

construction

about 80%,

or

a

costs

little

are

more

-

policies.

ud

make it

than

the consumers'

to

offer

is

be

The

SEC

year

construction

industry,

as

well

as

month

after

unions

nor

.1945.

effective

two

wage

increases

than

tions for four

(1)

reasons.

or

rise

no

in

pro¬

payrolls

because
they
would
encourage
'employers to lay off all workers
usefulness

doubt.

might

Hence
even

is

low

or

in

increases

wage

reduce payrolls.

Price

cuts
would help
maintain em¬
ployment in the companies mak¬
ing them by stimulating sales.

(2)

awards.

month

During

the

first

first

quarter of

2a|tqUhr.

1947;

come

during the

$*1047

awards

20%'

taxation

below January 1948. New housing
starts in the first half of 1948

taF

backlog of demand for hous-

Mg' °*c?urse.. is isstill
Nevertheless, it

.

.

Some

.

been appearing

has

.

being remedied.
market.

jthe

World

.

.

.

.

The partially-exempts are still going out of

.

.

.

.

BONDS IN DEMAND

BANK

WORLD

bonds

Bank

again under accumulation, with some of

are

companies and commercial banks apparently bullish enough
on these obligations to advise the purchase
of them by the out-oftown institutions which they represent. ... It is being pointed out
that the yield is satisfactory and the floating supply has been sharply
curtailed because the bonds are moving into strong hands. ... For
those that are interested in putting funds into intermediate matur¬
ities the 2%s due 1957 are being recommended while the 3s due 1972

the trust

suggested for institutions that are desirous of obtaining a larger
It is reported that fairly sizable amounts of both issues

are

return.
are

...

finding their way into portfolios of institutions that were

now

lukewarm on the World Bank securities.

formerly rather

switches

obligations,

Bank

International

the

of

.

.

.

purchase

In addition to the recommendation for the outright

being sug¬

are

bonds. ... In most instances income is
improved, maturity shortened, and premiums reduced by the
swap from corporates into the World Bank issues. . .
The 3s due
1972 are shown to be in a particularly favorable position for
.

switches out of long corporate bonds.

...

into

goods. ..;y
\
(3) Price cuts would help

realize

that

the

goods.
new

new

effectively
Competition be¬
more

and the old is




It

enormous.] stantially
to

number

of

23-million

in

1946.

In

a

the

one

drop in the

mar¬

riages, the

urgency of

all

The

to

sustain

the

of

of

present

however,

income

help maintain
level of

will

to

invest

in

a

assist "industry
creases

In

Thus it would

high and growing

to

make

in its productive

economy
one

' needed

case

private"

the

in¬

capacity.

short, it would help make the

American

expanding

mar¬

available

be

drawn.

-

which is

to enable

rapidly

it

growing

required

the

by

to

badly

supply the

quantities

the

obligations

domestic policies.

rapidly
so

which

from

conclusions

accurate

more

be

can

peacetime
rapidly disappearing

In the interim the adjustment from a war to a

...

goes

economy

the inflationary forces

on,

unless

should continue

this trend

and

.

other rabbit out of the hat.

the

are

Administration pulls an¬

information
events,
seems to be nothing on the horizon that would be adverse to
government securities markets.
.

.

Based upon the available

.

economic conditions, and the predictable future course of

Gn

there

the

...

A

readjustment in business and the advent of

economy

curities.

.

.

competitive

a

in the 1920s would be favorable to government se¬

as

The return to normal conditions will be painful but

.

of the sting will be removed by the action of the monetary

some

authorities because they will see to it that credit is eased in order
to prevent more

serious happenings from taking place.

removal of

of the restrictions

,

.

The

.

credit, which will eventu¬
ally come with the adjustment should have a stimulating effect
upon the government market.
If business were to have a
some

on

...

more

setback than is anticipated, there will

severe

easing of credit than would be the case of
conditions.

economic

.

.

.

Nonetheless, such

be

greater

a

orderly change in

an

course

a

should not be adverse to the market for Treasury

of events

obligations.

.

.

,

GOVERNMENT MARKET PROTECTED
The government market
trolled

is

of the major factors in

one

con¬

our

and its well-being is of great

concern to the Ad¬
protected and maintained in orderly fashion
in the past and there is no reason to believe it will not be fostered

economy

ministration.
in

the

It

...

future.

was

A

firm, orderly and buoyant trend in prices of
a period of eco¬
nomic adjustment because this is one way in which confidence can
...

government securities is evidently desirable during
be restored.

tions

past.

in

.

.

This does not

.

quotations of

...

mean

that there will not be fluctua¬

Treasuries because
•

,

It does nevertheless
be

major

when the

.

will

be,

in the

as

that price changes

will

the underlying trend will be on the
Quotations generally do not recede very

and

ones,

constructive side.

to indicate

seem

there

1

.

.

demand side

is quite

of the monetary

likely to be strengthened

authorities.

...

sub¬

employment and it would

industry, in order' international

volume

of

.

.

through! action

would,

equity issues.

is quite convincing, I believe,'that i goods
the construction

yield

stimulate individuals of

levels

new

1947 there

the demand

housing will drop.

corporate

sev-

high of

number'of-

must

..

patternv is all-important and its future course will
very closely because of the effect it will have on the
money markets.
Although inconclusive at this point, it seems as
though the forces of deflation are gaining in strength. ... It will
probably be another six weeks or two months before sufficient data
business

The

watched

be

much

the

reduce

taxes.

has been dropping for
reached

for

,

goods to compete

^HE NATION'S ECONOMIC^;

not

important

riages

distributed

of

peo¬

ple to conyevt part of their hold¬
ings of cash and demand deposits

tween the

longs.

in the taxable 2s because too
many
non-banking institutions all at once believed them less
attractive than the higher income issues.
This condition is
indigestion

not

hfiVfn ab0Ve 1947' in the lat~

Price

old

purchases of both of

and transfers from shorts into

securities

these

profits
on
all
non-refunding
equity securities issued after the
first of January, 1950. This would

le/ half they were 8.9% below.
I he

believe that the

government

its policy is close at hand.
beginning should be made in
this year by eliminating the double

cTorresP°nding
over

the

A

t
In January 1949
were

when

reverse

°t.1948' they were

quarter of 1947.
quaner

I

owners.

time

real

many

with

of the market's action is the same as it has been,

from ineligibles in taps, new money

swaps

customers.

or

discouraging
individuals
from becoming owners of corpo¬
rations to encouraging them to be¬

cuts would increase
were 2 million
marriages and in
purchasing
power
of
men's holdings of cash and
de¬ 1948,
1.8v million. ■ In -1949f' the
mand
depositary Thus price cuts number is likely to drop down to
would discourage men from
at¬ about 1.6
million which will be'
tempting to add to these holdings
fairly close to "normal." -•••■ With
and would encourage
the

.

...

The pattern

and

from

on con¬

2™ of 1948, contract awards
23.3% larger than during the

contract

Wage increases would
little

whose

the figures

were

likely to be more
wage increases in

are

maintaining the volume of em¬
ployment under present condi¬

duce

and there.

after year to persons in the

poration has plants

ITS ascosts.whole, rate of
a
needs
building
The

tract

Price cuts

.

...

lower

had

r

.

Longer-term

...

cities- and regions where the cor¬

organized workers who have
or

that

taxable issues backed away from previous re¬
sistance levels, which is not unusual because this has happened in
the past.
A trading range or area is probably being established.
If there wasn't some backing and filling of prices occasionally,
traders and dealers would not be able to scalp a few 30-seconds here
The

expensive for corporations
a
tap issue which might

sold

impressive are

one

15 income tax payments. . . . These are temporary conditions
should' have only a passing influence upon the Treasury market.

regulations

price index, which
up about 70%.
There is, how¬
ever, persuasive evidence that the

un¬

since

minor shading

a

gested from corporate

an

the

only

activity, along with

in volume and

decrease

prices, has been taking place in the government market. . . . Con¬
solidation of gains would be healthy after about two months of an
orderly advance in quotations. . . . Part of the demand has been sat¬
isfied, dealers have inventories in the shorts and intermediates and
commercial banks are cautious because they are preparing for March

se¬

Furthermore, double taxation of
private construction
is tapering distributed corporate profits and
their own products whereas
wage
Durmg the first quarter of high progressive rates of taxation
increases would not help farmers.
1948, private building, in dollar mean that even large corporate
The
groups most
likely to win volume, was 33.3% above the cor¬ profits offer little return by the
wage increases are the strongest responding quarter of
1947; dur¬ time they reach the investor.
unions which have already had
ing the last quarter of 1948, it was
Sooner
or
later
government
three rounds of wage increases—
only 4.7% above 1947. Even more policies will have to be changed
the

Governments

on

of

■

as> a
whole do? not appear to be
than a year ago
Cer¬
improvement in effi¬ very much interested in becoming
owners of American corporations.
ciency is
more
important when
individuals are spending 71 cents This, is £ serious situation: Which
out of every dollar increase in in¬ will become acute when corpora -

needed

cultural
would

not

Reporter

By JOHN T. CHIPPENDALE, JR.
A

per¬

It is plain that American cor¬
which it can offer at the
efficiency of 1949 provided there porations'are not able to rely upon
direct investments by individuals
is
an
improvement in efficiency.
to meet a very large part of their
ls .f.vi.dent that improvements
in
eificiency y are
more
badly capital needs, and that individuals

important

maintaining a high
level of employment in
1949—(1)
they are more equitable and (2)
they are more effective.
Price
cuts

at

investment

employment during 1949?

answer

Our

•

buying,

ponement

few

prevent

It is true that price

might induce

ment

next

not

price

bility in 1949.
cuts

the

should

new

dustry do to stimulate production

accentuating deflationary;
—namely

of still lower

enterprise.

on

a

influences by encouraging
people
to postpone
buying in anticipation

discouraging

equip¬

higher price level in relation to.
the price level of other
countries
in order to obtain more

imports in

avoid

During 1947 and 1948, a moder¬
ately satisfactory rate of invest¬
ment, encourage new investment. ment was
sustained by corpora¬
If wage increases have any bene4
tions by plowing back substantial
ftciaheffect, it is much more lim- amounts of
earnings. Industry had
Ued beGause Wage increases stim¬
only moderate success, however,
ulate investment ~ only indirectly
in raising funds from the outside
by possibly raising consumer in¬
market. It is true that in 1948 pri¬
comes
and
by eneouragingb the
vate security issues (exclusive of
substitution of machinery for la¬
from
$4.4
bor.
Price cuts produce both; of refunding) .-increased
billion in 1947 to $5.9 billion and
the above effects and also a third
that corporations relied to sub¬
—they encourage the replacement
stantially less extent upon banks
of old equipment with new.
buildings

ments: (1) the United States needs

payment for exports; and (2)
price
cuts might have the
immediate ef¬
fect of

for more taxes, he did not
reforms in taxes. The stiffer

urge

%

made-

consider reforming
system to encourage in¬
vestment.
Although Mr. Truman,
quite unwisely in my judgment,
the. tax

asked

goods help- sustain employment by
encouraging people to discard- old
things and to buy new things.

31

(9871

these remarks

ment needs to

with"

•°f
a

conclude

me

'//vA/;!//'::

•

by asking whether the time is not
approaching when the govern¬

new

new cars

CHRONICLE

f|,;/: y:•

^

yjj

hence

and

FINANCIAL

their,.;.mbney.

goods
upon the volume
employment.
New
clothing

tures

plant and

of

upon

sold

&

building ih 1949 at the levels of
19,48, must offer buyers more for

pervasive and impor¬
competition in the
economy and the outcome of this
kind of competition has 'much ef¬
tant, kinds

expenditures.
A small addi¬
tional drop of business
on

COMMERCIAL

THE

INSIDE THE MARKET

The

bonds

are

down

have

demand

its

1952/54

attracting

are

now

attention

at

been

not

around

available in these issues.

.

.

.

are

move.

these
.

.

very

successful

because

there

is

a

sizable

that becomes very real when prices look as though

bonds

a

bit.

.

.

The eligible 2V2S

.

are

still being

edged

away

slightly

from

their

highs

as

large

for

the

.

Large orders
the

these

satisfied

The longest tap

supplied by savings banks, although offerings have not been
since

levels

present

well taken and attempts to quote these securities

being

they might be coming off

and

and

due

with the return

of

country's

2s

along with the 2Vis due 1956/59 because many investors

2%s due

two

bonds

securities have

are

still in the market for the 2%s due 1955/60

1960/65.
has

been

.

showing

again under accumulation by

.
Only a part of the demand for "
filled, because very few of thesk ;

.

been

up.

.

some

.

,

The 214s due

1959/62 are

of the savings banks.

COMMERCIAL

THE

(988)

FINANCIAL

&

Thursday, March 3, 1949

CHRONICLE

think there is

The Market for Securities Today
4)

page

had in peacetime probably for any

been
I

units

going into institutional form.
recite this as necessarily

bad thing, and I don't mean to
criticize the institutions that have

these

or

savings. They are

enterprises in the American
But the fact that an
proportion of savings
has been going into institutional
form does raise problems and does
raise

More

Savings Going

into

as

these

you

of

net

available

our

tion

to about 39%.

rose

was

during
fell.

the

But

in

Obviously,

people

with

but

few

a

are

it

accounted

14%

for

made

by

75%

that

not

are

a

the

of

net

their income.
a

few

various

into

come

really the
this discus¬

of

meat

forms:

United

States

business, stocks, and bonds except
United States Government Bonds,
Now, in the income group of $5,-

1000 to $7,500, 69%
(States

Government

United

own

67%

Bonds;

of

give you just |
illustrate that |

I will

figures

to

point.
of
_

spending units.

spending

A

emit consists of people who

lated, live in the
and

pool

their

are re¬

dwelling,

same

incomes

for

the

of

making
purchases.
Spending units are precisely—al7
though it isn't the term you are

purpose

used

to—the

kind

whom

you

These

figures

would

of

sell

are

units

to

securities.

derived

from

made by a research or¬
ganization Under contract with the

surveys

Board of Governors of the Federal
Reserve

System

and

lished in the June,
and

investment in stocks and bonds,
other than United States Govern¬
ment

pub¬

were

July, August

September., 1948 issues of the

Federal Reserve Bulletin.
Of the

Now you see

spending units with un¬
$1,000 a year income, for ex¬
ample, more dissaved than saved.
Dissaving means spending more

than your

income.

Let

Spending
between

40% of the
And

with

incomes

$1,000 and $2,000, spent

than

more

units

so

their incomes

in

over

up

the line until

you

get to the $5,000 to $7,500 a year
bracket; almost 80% of the spend¬
ing units in this income group
able

.•'savings.

to

make

Only

during the

year

some

21%

than their incomes.

Here

group.

positive

spent

more

And this

1947.,

was

For spend¬




find

we

86%

own¬

ing government bonds; 73% sav¬
ings accounts; 86% having check¬
ing accounts; 81% having life in¬
surance;

73%

_

36%

owning

a

home;

having investments in their
business, and only 49% own¬

own

ing stocks and bonds other than
United States Government Bonds.
The
median
or
middle-size

figures that only 21% of
spending units in the $5,000

the

to

$7,500 income group owned any
49% in
the income group $7,500 and over
stocks and bonds, and only

owned any.

Unfortunately, we do
not have the figures broken down
by income groups as to how peo¬
ple felt about owning stocks and
All

know is what peo¬

we

the

they probably indicate why
making $5,000 to $7,500
year
and the 51% making
$7,500 per year do not hold

per
over

and bonds.

stocks

more

units

ing

for

reason

the

against

were
stocks.

common

or

holding

;

didn't
give
any
against. Now, here

thing that I

interested

am

Out of that 62 who

in.

def¬

were

against

initely

is

rather reasonable sort of

a

they

mean;

wanted

30 out of every 62
against holding com¬
mon stock were opposed because
they are not familiar with com¬
who

were

stock.

mon

Almost half of the

stock—that
the

people who
holding
common
why I mentioned

against

were

30

is

62

of

out

common

stock

weren't

familiar

—

didn't

because

own

just

they

holding is $4,200.

Bi.it you get into the

It

to

common

on the basis of
analysis that I
have given you, that a very large
proportion of people who could be
expected to be in the market for
corporate securities are not in the
market.
They can afford to buy
them, but most of them are not
buying them.
seems

this

me,

brief

very

Investment
I

holdings
above

is

if

Just

median.

the

as

count

what
The

down

third
one

quartile.

from

the

third

what

is

quartile.

ar¬

biggest holding

down to the smallest

have

of

quarter

the way alter you have these

you

is

only

have of that is what

we

known

take

you

the

holding, and

known

In

the

as

other

words,
holdings are
bigger than this figure and three-

one-quarter

of

quarters

smaller.

For

are

the

the

group

$7,500 of income,
,

.

(

with $5,000 to
the third quar¬

to

wants

compa¬

your

as

save

regular prac¬

a

much in the
have something
a whip over him which makes
save.
Because saving is not
set

to

like

up

and

budget,

couple of people who ad¬
vertised that if you would invest
a

which

have,

followed the small news item tice,

about

insurance

the

and

business
lacks, is a regular savings feature.
Today's typical
saver
probably

I don't know whether

ment trust.

so

to

him
$100 they would guarantee to re
turn
your principal
in 10 years; easy. When he is buying life inand give you a chance to make a surance, it is very easy; he has
substantial appreciation in the in¬ to meet the premiums or he loses
terim.
Well, the package was a the insurance; he incurs a penalty.

purchase

$75

share

one

venture.

price

in

the

who

new

in

the

name

of

small

the

of

case

the

uses

saver

and

savings

loan

is usually a
small penalty attached for missing
one
of your payments. There is
there

associations,

They took $100 for the

Bond

E

the

In

and

Bond

E

stock

of

package, and they put $75 of it in
the

the

nothing like that, so far as I
j know, in the business of selling
deals securities. Maybe there needs to

purchaser, and took the other $25
and
used
it for the purpose of
the

venture.

the

But

able

that

is

fact

j be

put the purchase

they

that

of

corsort of
regular periodical payment plan.
porate securities on some

were

sell

to

people because they
appeal to people who hold
bank deposits and savings bonds.
A majority of the people in favor
had

something

developed

misrepresentation.: would

the basis of

on

those

Now,

stopped, but I think largely

were

Government securities

an

on

sold

are

is

it

and

basis

that

working

pretty well, which is another ar-<
holding savings bonds and bank gument for it.
deposits
favored
them
because |
In view of the size of the marthey were safe.
Well, these fel- !ket,
and
the relatively
small
lows who got up this combination : amounts that the small saver has

of

of

.

Series E Bond and

a

available for investment—and in

shaye

one

playing upon that { view of the fact that you are
safety motive.
They said, "We going to have to get down, really,
will give you at least your prin¬ to selling a large volume of cus¬
cipal back in 10 years."
There tomers, your method of selling
is a wrinkle here that has a good can't be entirely on a personal
basis. I think you are going to
deal of interest to
it.
stock

of

were

have

Expanding
Investment in Equities

Patriotism

in

securities

sell

to

people the

which

books,

to

many

the publishers sell

way

is

circular

by

and

"getting religion" about the private enterprise system, and
that is also
something that works in your fa¬
vor.
The private enterprise system is now in a position of encirclement, because we are vir-i
tually an island of private enter-

by advertisement. And that means
an appeal which is reasonable, ap¬

socialism and
greater!
consciousness today of the values j
of, and the dangers to, a private
enterprise system than we have

able, but you are not getting your
share of it. Competitors of one

think

in

prise

people

tractive,

pull

in

out for what they are worth. You
have a tremendous market avail-

kind or another are getting an increasing share of the market. That
is

the problem that you are up
against. How well you lick that
problem
may
well
determine

There is almost

patriotic motive, in other words,
to this business of get-

America's future.

Business—Bull

on

will

Well, those are just a few small
suggestions. I have thrown them

attached

Beat

which

and

the business.

There is a

before.

had

ever

are

of

sea

a

totalitarianism.

Stocks

on

(Continued from page 2)
buying for
tioned

which argues that in order to get

of the reasons menthat the total vol
decline 33%.
however are likely to
any

in

above,

Profits

the

near

lows,

out-

must

you

cycle all the other cyclists, and
pre-forecast the actions of other

sales will

of

ume

since there is intelligent cyclical forecasters.

decline much more,

Trust

usually

Indeed

discussion.

It

I

have

point of an industry is at 80% ofjR FIRST STARTS to skid,
capacity, and if sales drop j
R ^^y sound to many a LUfrom 100% to 70%
which is! NACY policy
. .
.
irresponsible,
.

so

clear

making $5,000 or more
probably needs more in¬
on

what

corporate

think he needs to

know, if he has
a small investment; how the risks
can be pooled.

fairly

investment

trust

idea

is

it has been going less
to any extent.
I
don't think that the typical poten¬

than

tial

years

small

much
trust

new;

20

investor

about

is,

and

what

how

knows

an

very

investment

you

pool

risk

and how you combine safety with

risk, and
trust

so

on,

share.,. In

in

an

other

.

^rash, and illogical.
it.

net

.

.

investment

words,

I

what

habitually, in

(1)
one

For

mass

production in¬
fall

80

the

crowd.

One

buy and sell when it looks
too

(to

soon

the

crowd).

One must pursue a policy which
most say is crazy. And the clev¬
the

erer

Profits

in investment

success

beat

must

must

almost

happens,

But 1 favor

You Daren't Do It!

or

crowd

becomes,

earlier must YOU act!

the
'

more.

And

that

what

is

I

half

(2)
see

All my readers will admit

this in theory. But

ahead.

than

more

Eccentric

se¬

ing them, what the risks are in
holding them, and particularly I

is

dustries.

curities are, how to go about buy¬

The

.

much

That

far that

the person
per year

.

profits will!
completely
disappear,
declining
over 100% into the red, and per¬
haps showing losses of $5 or $10
per share whereas formerly there
were
profits of $10 or more per
33%

only

share.

Idea

seems

a

total

am

formation

really large

nies

a
possible market for new
packages put up by the invest¬

you

the

of

future

argued that you
geared equity or lev¬
should plan to make your buying
erage in most forms of industrial
stock.
That's a challenge for the
not when trade is at or near its
production.
|
investment security salesman!
For instance if the break-even expected bottom; but rather when
with

from what I have said

median

am

But

safety.

ting between $5,000 to

$1,760. And in this income group
getting
$7,500
and
over,
the

banks

savings institutions.
not at all sure that there

isn't

safety, and they probably bought
the kind of asset that gave them

and

is

I

a

I

sponse.

deposits and
bonds—for the income group get¬
$7,500

with the prod¬

uct of the

re¬

going to make a few sug¬
gestions, just from the standpoint
government of
encouraging your own thought

bank

be able to compete

the

in

private enterprise system.
Something
that
the
savings

small investor which may

the

to

investment

something to sell

rnent trust share

I

Well, 62 out of every 100 spend¬

is

j ting people to invest in an equity

your

79%

holding of liquid assets—that is,

ranged

cases.

on

to the $7,500 and over

us go

measure

•

where

competition is.

your

!

der

were

Bonds.

'

These figures'are given in terms

We know from

these

Thirty-three

we

very

part

we

stocks and bonds.

14%.

Bonds, savings accounts, checking
accounts, life insurance,
home,

a

a

summary

big {have savings accounts; 69% have
;
source of savings.
And obviously checking accounts; 93% own life
also, people with substantial in¬ insurance, 53% own a home; 21%
comes are likely to be able to save I had some investment in their own
| business; and only 21% have an
each year a considerable
income

will turn to this same
survey
which tried to find out
why
people
didn't
hold
more

Well,

holding common
And this, I am
afraid, gentlemen, stocks, what reason did they give
is a sad story from the standpoint
for being against holding common
of the security business.
stocks?
Well, 26 out of the 62
were against it because it wasn't
Various Forms of Savings
People hold their savings in safe; it was a gamble. Now, that

i

small

particular forms of assets
which they have decided to hold?

bonds.

you

sion: "What form does the saving
take
that
these
people make?"

I am going to go on now and {
talk about the personal savings of (

your

to what

as

these

that

Now,

form.

major part of

That

'

give

interesting

the

represents
market.

year

stocks and bonds rather than

own

the country.

savings is going into institutional

which

per
more.

pretty good idea

a

These

40% of the current volume of net

(individuals,

or

payings of, tulls^pep4inS upit^Jn

bonds
proportion

the

year

coming to the next
question, which must surely have
arisen in your own minds, and
that is, Why don't more people
am

ple generally thought, why peo¬
ple generally didn't hold stocks
and bonds, but I think that these
reasons are
important enough so

of

during the last three
is estimated that about

it

years,

saved
gives

a

looking .for people with
income, and you have a good slice

government

war,

$7,500

over

You

20's.
Then, of course, in the 40's
with the introduction of the small

denomination

more

,

The pro¬

higher

even

the

little

a

or more per year in
1947.
This 14% gets 40% of the income
before taxes.
That is important.

1920,

portion

go—in

Than Stocks

I

Now

$5,000

about 15% Bf the
net savings went into institutional
form,, In the 1920's, the propor¬
prior to

to

bracket

People Buy Bonds Rather

Why

About
14%
of
the
spending
units, 6% million in number, got

Just

economy.

want

$7,500

low

as

figures:

1930,

becoming

savings

in

per ,year

earn¬

To

in terms of total current vol¬

ume

to

curities.

figures

some

$500

income group you can shoot at in
terms of a potential market for se¬

like 19% of the national wealth.
cite

at least

or

you

Now, they amount to something
me

as

And 69% of those

$500

proportion
of
institutional
savings accumulations had grown
to 12V'i % of the national wealth.

Let

much

as

ing

this

now

between

per year.

savings held
By

incomes

one-half saved $500

over

represented

institutions.

with

will

you

$5,000

In 1900, about 5.3% of the

by the accumulated
in

units

over

—and T think that is about

Institutions

was

$1,000
Only 37% of the spend¬

who helved

savings go into institu¬
form, they go into life in¬
surance,
into savings bank de~
posits and the deposits of other
banks, and into savings and loan
associations.
Let me give you an
idea of how this volume of savings
going into institutional form has
wealth

saved

thousand dollars per year. If you
take the break in terms of people

When

grown.

them

a

tional

national

a

and

saved,

$5,000 and $7,500 saved

real challenge for you.

a

of

them

of

most

per year.

ing

increasing

$7,500

in the year 1947. In other

more

most

economy.

over

spending units saved $1,000

words,

vital

earned

find that roughly 64% of

we

those

a

attracted

who

year,

don't

educating

what you have to

ing units with incomes of $7,500 tile holding of. liquid assets was
and over, 83% made positive sav¬ $6,290, almost a year's income. In
the case of the $7,500-and-over
ings and only 17% dissaved.
year in our history.
Now, here is an important co¬ income group the third quartile
Even the proportion of income
was
$15,260.
In other
saved in these last three years has rollary to go along with tjiose holding
indications that I just gave you as words, concentrating on the upper
been running higher than it ran,
to how much per year people in quarter of the liquid asset hold¬
for example, in the year of great
various income groups saved.
I ings, you get into some sizable ac¬
prosperity, 1929.
The potential
should
think
that
people
who cumulations, since at least 44 of
market for securities is larger in
saved less than $500 a year were the people in the income group
number of dollars and in propor¬
of $5,000 to $7,500 have holdings
tion of income even than it was in probably not good prospects for
your
business, and people who in excess of $6,290, and in the in¬
1929.
saved over $1,000 a year are prob¬
come group of $7,500 and over, 14
But what has been happening to
of the people have liquid assets
ably reasonable prospects.
these savings?
An increasing pro¬
in excess of $15,260.
Well, if we take the spending holdings
portion of the public's savings has

(Continued from

tremendous need

a

market on! in the private enterprise system,
sell. Your great- j They may wanf safety and secur¬
est potential market is the small jjity, but they have never been ofinvestor. You have in the invest- fered a combination of safety plus

for

Of

it

course

great

now

looks

majority

stocks

Conclusions

to

crazy

start

act.

.

.

and

actual

decline

in

trade

j

profits (in 1948-49).
i

The above
ance

They lack the

They

.

the

prefer

markets

.

.

action.
.•

(3)

buy

when

on

rising

the

crowd

■■

stock

market.

One

feels

is

it

rash not to follow the crowd.

(4)

I

prefer

back) the crowd
my

to
,

.

buek
.

am
on

bullish

next stock

trade

bearish
stocks.
boom to

on

I

so.

trade, but

expect

occur

slump.^^;-^-,;.

(not

and to lose

reputation in doing

(5) I

j

investment |

to
.

:''■■■

j

of

so

the

That is the nature of the

thought is in accord-

theory

will

courage,

with the! wisdom of their

agrees

with my (rather new) super-

cyclical

probably hot
1,000

per

hilarity, and the faith. They feel
it might turn out to be wrong.

to the
buying

that trade has started

slumping. But it is quite possible
for the now cyclically sophisticat¬
ed investing public to stage a re¬
vival in common stocks perhaps
two years before they expect trade j
and profits to reach their bottom J
just as they staged the decline!
in stocks (in 1946) two years be—
fore

4

^.

.

the

in the
,;:;

Volume

169

THE

Number 4782

COMMERCIAL

&

FINANCIAL

CHRONICLE

(989)

A

The State of

that

and

•

..

.

.v

,

cautious

other things, recommended
enact legislation—

Congress

credit

as

inventories

To

managers

of finished

offset

COMMODITY

(Continued from page 5)

/

•

foods in general use. •

Industry

*

(Continued from page 4)
among

these

goods.

hard

their

over

The

Secretary of Agriculture
on
February 9, directed the Com¬
modity Exchange Authority to ob¬
tain

of the steel market.

grant

authority to regulate
speculation on the commodity ex¬
changes—and of the further fact

that

the

full

counts

information

all

on

trading in wheat,

ac¬

and
soybeans during the recent grain
price decline.
The Administrator
of

the

Commodity Exchange Au¬
on that day issued a spe¬

thority
cial

call

bers

Trade

Chicago Board
report each account

books

of
on

contracts as
closing of business on Feb.

of the

1949,

Feb.

mem¬

the

to

their

7,

requiring clearing

of

8

on

and

and

open

transactions

on

on

.

nation following these drastic de¬

clines

in

commodity prices.

appointed
House
and

Be¬

of my own great concern, I

sub-committee of the

a

Committee

directed

Agriculture

on

that

committee

to

obtain all available and pertinent
information leading up to the de¬

In all

says

'

steel

week

material.

people

studying

were

the drive is

cases

level, states the trade

to

on

supplies

own

get stocks down to

Some steel firms

paper.

a

of

lower

are

carried in stock by suppliers.
This drive in the steel industry to keep stocks down has extended
to steel

in

and there is no reason to look for heavy scrap buying

scrap

near future.
Most firms have large stocks and are cutting
As to coal, no one in steel is too worried about the probability

the

them.

strike.

Coal stocks above the ground and ahead of coke
larger than they have been for years .It would have to
be a long strike to seriously cut steel output, the above trade author¬
ity adds.
Steel sales people are checking sales of their customers wherever
of

coal

a

are

possible without placing too much reliance on steel backlogs.
The
test, say steel sales officials, is "How are orders to customers of
steel firms?"
A check on that part of the steel picture, "The Iron
real

Age" concludes, shows the same sense of caution, but no sign of
.things falling apart. Makers of things fabricated and processed from
steel are just as alert as anyone else and they are watching their
inventories, their sales and are prodding their salesmen into action

cline in prices of farm commodi¬

American Iron and

The

Steel Institute

PRICE

the price per pound of 31

INDEX

SLIGHTLY LOWER AT

CLOSE

OF

level of wholesale prices held fairly steady
during
The daily wholesale commodity price

average

most oMhe past week.

compiled

by

the

of

close

with 258.61
the

on

Dun &
the

this week

announced

index,

Bradstreet, Inc.,

period

week earlier.

a

Movements
week.

turned slightly lower toward
on Feb.21,
as compared
The current figure contrasts with 275.76

finish

to

corresponding date
in

Trading

character.

Most

grains

and

nervousness

a

a

257.41

at

year

leading

ago.

grain

was somewhat

:

their

trying to get raw
materials and other items down to a 30 days' supply.
Especially in
cases
where they have been carrying items which prewar were

ovens

9, 1949.

41 need not tell you of the distress
and distrust which permeated the

cause

This

corn

of

their

and

'

facts,

total

sum

,

LATEST WEEK

orders

new

"The Iron Age," here are a
few that show things are not going to ruin so readily:
(1) steel
orders are still heavy and backlogs—even when dried out—are not
bad, (2) government spending is still heavy and may be bigger if.
unemployment continues to increase, (3) exports in steel may be
expanded now that domestic demand is no longer in the emergency
class and (4) back-to-normal doeg not mean the bottom falling out

to

index represents the

The

Commodity Market
Problems: Cooley

33

irregular

were

slower and largely

finished

continued

•

markets
for

lower

of

lack

the

week,

confidence

last

professional in
by

reflecting

traders.

Increased buying of cash wheat
by the government was a steady¬
ing influence in the early part of the week, but best
prices were not
maintained. Applications for loans on corn continued in
heavier vol¬
ume, with farmers' offerings of cash corn
reported to be approaching
the vanishing point.
The flour market was featured by substantial
purchases of hard and soft wheat flours for
export out of Gulf ports
by the PMA. Domestic trade in flour remained
very quiet, with
bookings and directions disappointing. Bakers generally continued
to show caution due to
lagging bakers' sales and fears of a possible
reduction in bread
prices. The cocoa market continued weak, with
prices dropping to new lows for the season as the result of
liquida¬
tion

and

lack

of

manufacturer

interest.

receipts, all classes of livestock staged

following recent
also

showed

marked

declines.

further slight

a

a

Meats

Under

brisk
were

sharply curtailed
upturn in the week,
also stronger.
Lard

rise.

Cotton price movements were
irregular, but day-to-day fluc¬
tuations held within a narrow range.
Early strength was attrib¬
uted to short covering in the
futures market and a firmer trend
in outside markets, together with
replacement buying and trade
demand.
Another

sustaining

coupled with

influence

favorable

more

was

export

foreign

some

pricefixing

steel-making capacity of the industry will be 100.5% of capacity
for the week beginning Feb. 28, 1949, as against 100.3% in the

pending before
the
House
Committee
on
Agri¬
culture which provides authority
to regulate margin requirements

Japan was said to have
50,000 bales of cotton for near-by shipment.
It was also reported that the
ECA will permit the immediate re¬
sumption of shipments of cotton to Shanghai, China.
Domestic

preceding week.

consumption

with

1,860,100

ties.
I

am

duced

that

sure

know that

bill

a

and

is

already

you

has been intro¬

now

view

of

am sure

is not unreasonable to

legislation

carrying

recommendation

of

steel

companies having

94%

reentered the market for

the

of

The institute reports the schedule of operations

of the staple during January was
placed at '674,000
This brought the total for the season to date
to 4,204,000 bales,
compared with 4,645,000 in the same period last season. On a
daily

bales.

rate is equivalent to

steel ingots and castings'compared

tons

to

1,852,700 tons of

1,849,000 tons

a

basis, consumption in January
32,400 in December and 41,000 in January

average

week ago,

100.9% a month ago, and 1,705,100 tons, or
94.6% of the old capacity one year ago and 1,281,210 tons for the
average week in 1940, highest prewar year.

on

or

out

is

CARLOADINGS

that it

such

FOR

LATEST

PERIODS

WEEK

1948

IN

AND

AND

Total

1947

freight for the week ended Feb." 19, 1949;
totaled 697,335 cars, according to the Association of American Rail¬

Loadings'of

a

being

now

LOWER

COMPARABLE

that

assume

revenue

drafted in the Department. In this

roads.

connection,

ceding week, and a decrease of 107,602 cars, or 13.4% under the cor¬
responding week in 1948.
It also represented a decrease of 79,354
cars, or 10.2% below the similar period in
194-J1

and

Chairman

as

the House Committee

I

ture,

of

Agricul¬
want to extend to repre¬
on

sentatives of your group a cordial
invitation
to
appear
before the

ELECTRIC

Committee

in

event

the

uled

Agriculture

on

hearings are sched¬
legislation affecting com¬

on

Deeply imbedded in the Ameri¬
concept of liberty is the idea
markets—freedom

can

competitive

to choose with whom and

on

basis 'we will bargain in

what

the

ex¬

ceding

for what

"give

providing what might be
auction .for

world

a

which

basic

greatest

continuous

the

flow out of
ket

have

we

a

to

scoreboard of prices

erly functioning, the futures mar¬
kets represent the widest kind of

competition and are a protection
against mohopoly-made prices.
believe

in

markets

free

and

free

enterprise.
But to me free
enterprise has a larger meaning
than just being left alone.
The
law of the jungle is not the law
of organized society.,
The com¬
modity exchanges, if they would
serve ' the
public, must; conform
to accepted standards of respon¬
.

Self-regulation

sibility^

is

responsibility is concerned.free

a

ing

that

the rules

-

"

of fair play

markets,
in

if

the

enterprise and

they would re¬
really important

main

so

sense,

must be open to review and

subject

units

in

for

the

in

the

to

the

week

total

according

to

the

from

Chrysler

divisions

although losses at

showing,

ac¬

a

reasonable

regulation

by public bodies.




through
the

year ago,

10

TRADE

were

amounted *to

ADVERSELY AFFECTED BY

states Dun & Bradstreet, Inc., in its current review
spring

nation;

interest in.seasonal sales
generally showed moderate declines.

Apparel volume
demand

for

navy

of

frequently.
erately.

The response to promotions of men's

that of

a

wear

remained below

year ago.

Retail
were

close to that of the
previous week. The
spring suits increased in many sections with
blue especially popular and jacket dresses
purchased
was

women's

The demand for cotton washable dresses continued to
The number of requests for
nylon hosiery declined mod¬

food

volume

numerous

for

dipped

requests

for

slightly

beef

and

poultry remained high.

attracted

vegetables,

considerable

were

sold in

a

during

pork

the

week.

at reduced

Canned

attention.

substantial

foods,

The

There

prices; the

meat, fruit

Frozen

quantity.

bakers' goods and confections
expanded

agency

Feb.

season

Clearance sales of winter wear and
promotions of
apparel and household goods continued over
most of the

juices

Kaiser-

season

holiday-shortened period ended on Wednesday of last
bought slightly less than in the previous week with
volume slightly below the level of the
corresponding

dollar

week

116,176 units compared

preceding,

a

of trade.

demand

output

improved

In

and

fruit

particularly

iales

volume of

slightly.

Although seasonal promotions

Output in the similar period

a

year

in the like week of 1941, 126,550 units.

week's

Last

consisted

output

of

ago

Commercial and

REMAIN

industrial

89,213

cars

and 26,963

trucks

when

th

number

when

93

the
of

number

same

failures

and

HIGH

HOLIDAY WEEK

IN

occurred.

It

considerably

exceeded

in the corresponding weeks of 1948 and

respectively, were reported.
1939, casualties totalled 267.

but

were
rose

79

week

while

slightly.
except

failures

An

in

increase

manufacturing,

wholesale trade

The Pacific

wholesaling

and

States

other

above

with

casualties

industry

the

declined

trade

and

prevailed

sharpest

relative

more

year

in

rose

increases

2 to up

and

to up

3.

but moderately surpassed that of the

in

failures for the week than in

decreased
no

Feb.

19,

North

Central
areas

States
were

and

in

the

West

North

Central;

creased

the heaviest since 1942.

FOOD PRICE INDEX EXTENDS FURTHER MILD

PREVIOUS

The

RISE OF

by 8% from the like period of last year. This compaj-ed
change in the preceding week. For the four weeks-ended
1949, sales decreased by 5% and for the year to date de¬
by 1%.
■ •
',
rv/■■

an

Individual price movements were irregular during the past week.
Dun & Bradstreet wholesale food price index which struck a

28-month low two weeks ago, showed a .further mild rise to $5.78 as
of Feb. 22, from $5.76 a week previous.
The latest figure represents
a

rise of 2.1%

shows

a

year ago.

drop

as

of

compared

12.6%

with the

from

$6.61

Feb.

8

index

recorded

of

the

on
.

$5.66,

like

in New York the past week held to its downward
preceding week with department store sales registering
estimated drop for the period of close to 6%.

course

WEEK

but it

date

_

.

.

a

trade

of the

According

to

the

Federal

Reserve Board's index, department
City for the weekly period to Feb. 19, 1949,
by 7% from the same period last year. In the preceding
week a decrease of 4% was registered under the similar week of 1948.
For the four weeks ended Feb. 19, 1949, a decrease of 7% was re¬
store sales in New York

declined

corded

creased

•

holiday-shortened week,
corresponding week last year.

Department store sales on a country-wide basis,! as taken from
the Federal Reserve Board's index for the week ended Feb.
19, 1949,

in

East

2, East and Northwest down 4 to unchanged, Mid¬
Coast down 3 to up 1 and Southwest down 1

Pacific

total dollar volume of wholesale orders declined
slightly
in the week, but it was
fractionally above the level of the comparable
week a year ago. The number of
buyers attending many wholesale
markets dropped sharply during the current

lines

all

west

with

the

above that

Regional estimates varied from the corresponding levels of a
ago by the following percentages:
New England and South

down

the preceding week and one year ago.
In the Middle Atlantic States
and New England States casualties declined, while increases occurred
failures in these two

Wednesday

ago.

The

construction.

reported

a

,

the

in

groups

levels

1948

of

year
■

slightly to 31 from 29, reaching their highest level since 1943.
and

last

the comparable

In

involving liabilities of $5,000 or more dipped to 149 from
remained almost twice as heavy as last year when there
in this size group.
Small failures with liabilities under $5,000

Manufacturing

Retail volume for the
country in the period ended on
week was estimated to be from
3% below to 1%

of

1947

Failures

151,

demand for

occasional tables and chairs, kitchen sets and
coverings was high,- but it was below that of the similar week
Consumers did not display as keen an interest in electrical
appliances as they had a year ago. The demand for used cars
con¬
tinued to decline in
many sections.
last year.

failures totalled

58,

week of prewar

The

floor

180 in the holidayshortened week ended Feb. 24, Dun & Bradstreet, Inc., reports.
This
represented a higher casualty rate per day than in the preceding
week

slightly

last week.

built in the United States and Canada.
BUSINESS FAILURES

were continued in
many areas,
the retail volume of furniture and
household goods dipped

120,130 units and

was

/

Retail

a

fore, I say that free
free

the United States and Canada

the

,

week consumers

V

truly free society no one
is free to disregard the rights and
sensibilities
of
others.
There¬
In

trucks in

and

cars

against

HOLIDAY-SHORTENED WEEK
•

be sizable.

CHRYSLER

for

Withdrawals Tor

RETAIL AND WHOLESALE

suits

\

said.

Even

being observed all along the

line.

1948 and 762,108,000 kwh. in
corresponding period two years

Frazer and Willys largely offset the potential gains, the

•;

need polic¬

we

AT

Improvements

fine

services and we need/ assur¬

ances
are

America

28,

,v

(revised)

counted

but; it is not the complete answer
so far as the
discharge of public
in

GAINS

114,207

mar¬

which all may see and read. Prop¬

I

Feb.

bales,

a year ago.

placed at
155,209
net stock in the hands of the CCC of
4,408,000 bales.

bales.

bales, leaving

the

interest.
Through
quotations which

active futures

an

LATEST WEEK

IN

"Ward's Automotive Reports."

com¬

is

there

ended

,

Production of

.

in

week

for the past week advanced to an estimated

The commodity exchanges per¬
a real function and fill a real

modities

week;

BY

form

need in

LOWER

AUTO OUTPUT ADVANCES FURTHER IN LATEST WEEK AIDED

we

/called

0.3% below the pre¬

or

entries

4,564,000

decrease of 91,072,000 kwh. below output in the pre¬
307,272,000 kwh. or 5.9% higher than the figure re¬

ago.

the opportunity to choose
would have.

up

.what

a

ported for the

get than

we

MOVES

excess.of the output reported for the

abhor monopoly. We would rather
more

cars,

distributed by the electric light
and power industry for the week ended Feb. 26, was estimated at
5.559,207,000 kwh., according to the Edison Electric Institute.
This

change of services and goods. We
pay

of 2,107

decrease

a

OUTPUT AGAIN

represented

modity exchanges.

of

was

The amount of electrical energy

•

House

This

32,100

was

Entries of cotton into the government loan stock
declined for
the
third
successive
week,
while
repossessions
continued
to
expand.

President's

the

recommendation, I

rate

This week's operating

commodity exchanges.
In

operating

is up 0.2 point from the previous week.

respect to speculative trans¬

actions/on commodity future
:

the

that

news.

below

that of last year and for the year to

by 3%.

date

volume de¬

i

34

(990)

COMMERCIAL

THE

would show that
best

advance will emanate

an

from here,

Markets

moves

the inconclusive break

Whyte

was re¬

ized

ture.

Oddly enough the rails, the
sheep of the market
going on that various groups family for so long, give as
By WALTER WHYTE=
began showing little indica¬ much promise as any other
Downside penetration of in¬ tions that the much heralded
group. In fact they give signs
dustrial now give paradoxical break was not under way. of
being able to make the
signs of rally rather than The public was apparently
grade even before some of the
convinced that a rfeal reaction
widely accepted reaction.
It

while this break

was

was

=

industrials.

was

certainty. What is indicated
one
day loses its value the
Indications

of

certain

day

one

or

up

down movements that

seem so

swept

are

More next

during such times that

foundations

real

often laid for

are

And while

advances.

doesn't

it

necessarily follow that

[The

expressed

views

article

do

not

coincide

time

in

this

necessarily at any
with those of the

Chronicle.

They are presented as
the author only.]

those of

and replaced by entirely

away

different

ones

There is

switch;

no

the next.

sleeping at the
security. The only
no

ernment
take

Historically
local

in

r

self-government

the Democratic

Republican

party; and the

should be the
fortress: of Federalism. But, clang¬
ing economic conditions and shifts
party

population

have forced each
an inner coalition
antagonistic elements.
Both

of

Where and What Is Liberalism?
(Continued from page 19)

against

may even go
fibre of logic.

Last

and

dictate

every

called liberal institutions.

Again I
a

week, for example, the

market indicated much lower

didn't

I

prices.

know the

pretend

to

for it.

In

reasons

I had and

fact all the

reasons

could read

pointed the other

Then came the highly
publicized break in the Dow
Industrial averages and what
way.

existed

bearishness

latent

surface

the

to

arose

spread like oil

and

the water.

on

column too,

In last week's

I said that market

trading is a
Mass deci¬
sions are wrong so often that
to even approach success one
lonesome

thing.

am

to under¬

you

not arguing that

government should not
welfare

addition

of

its

to

its

citizens,

accepted
responsibilities for public health
and safety. That which is called
a

state"

"welfare

long

is

obvious

the

mfja'gMi sridfcessdFtd wfETat ihay
called

bility

of

"protective state" of
past decades. The protection of
society now calls for more than
protection against foreign oppres¬

world.

tion

domestic

and

But there is

disorder

working

their low

point and in doing it
the already exist¬

confirmed

ing bear trend long apparent
in

became

scale

conclusion

The

rails.

the

elementary:

bear

market

full

A

had

been

question was, had it?
Mass opinion agreed it had.
But

a

trials

close look at the indus¬

would

show

downside break
cents.; A

was

look

at

that

the

about 10

the

past

Pacific Coast
Securities
j

Orders Executed

on

Pacific Coast Exchanges

Schwabacher & Co.
Members

,

New York Stock Exchange
New York Curb
San

Exchange (Associate)
Francisco Stock Exchange

Chicago Board of Tra.de
New York 5, N. Y.

14 Wall Street

COrtlandt 7-4150
Private Wires to

Teletype NY 1-92&
Principal Offices

San Francisco—^Santa Barbara

Monterey-w^Oakland—Sacramento
Fresno




regula¬
living
and

the

that

daily

cpnditiqns of millions
only practical through

is

officials,

petty

ing demand of

two

To what extent and at what

should

speed

of local government and of

undertake

government

or

desirable

economic

and

of

instrument

to

social

should
be
utilized, wherever possible, to do
the job?
state

is

There
between

in

progress, or

local

and

governments

affiliation

natural

a

paternalists who believe
and rapid reforms

extensive

federalists

the

who

would

administered by the national gov¬
ernment. There can be little doubt
that

with
nues

the
its

national
command

government,
of

huge reve¬

arid its remoteness from the

of

pressures

prejudices

interests

local

can

and

Police

one

Lies

Power

It

was

in

States

—that general
and

authority to protect

the public health,
morals
and
welfare-

promote

safety,
should

reserved

be

No such power was
controls

ternalistic
zens

as

to

the states.

granted to the

Government.

Federal

Such

over

our

pa¬

citi¬

became necessary must

exercised

be

governments,
which, being close to the people,
could be readily restrained from
interfering unduly with their in¬
dividual freedom to pursue happi¬
local

by

according to their individual

ness

ambitions and abilities.

There is

enact and enforce

should be

and always

deep-seated conflict of opinion

ments.

local

between

maintaining
by

believe in
individual freedom

liberals,

strengthening

who
our

powers

of

self-government, and pa¬
On the other hand those who ternalists, who believe in hasten¬
advocate
more
gradual reforms ing social reforms by increasing
know that local government will- the
powers
of the
centralized,
not usually act except under the national government.
According¬
pressure of a local majority opin¬
ly, it might be expected that the
ion.
Thus there will be the sanc¬ two major political parties would
tion of prevailing opinion for a be
in
opposition on this great
political experiment, and the op¬ issue. Instead, we find that both
the
Democratic
and
portunity for a prompt revision
Republican
if the experiment should prove parties are internally divided on:
unwise.
When we observe
the this issue, and potent segments. q£
continual
adjustment and read¬ each are bitterly opposed to manyL
state

and

municipal

laws to meet
and

changing conditions
changing public sentiment, in

contrast to the

slow

of revising

and

difficult

major Fed¬

official

policies.

Within

'

the

•

-

Republican

.»:•*

party^

large numbers of Western liberals,
who do not want to be
and

have

all

their

governed

earnings ex¬
eral law, we can see many strong pended in Washington, are qt odds
arguments in favor of local self- with large numbers of Northern
government. / State government, paternalists who want to extend:
in regulating the liquor traffic and the reforms of the Roosevelt era

process

any

ficient
North
the

the

for

liberals

na¬

1952

and

1950

elections of

o||

groups

profound issue be¬
liberalism

democratic

tween

paternalism. Surely
they should be offered a political
technique whereby, instead of be¬
ing asked year after year to vote
for incoherent and evasive candi¬
on

incoherent and

evasive platforms,

they would be
choice between

dates, running

given
two

simple

a

parties,

two

candidates

two

distinct philosophies and forms of
will be,

overwhelming
Riglv'.s

majority
of
in the

advocates

that have been,
eternally in conflict.

government

Isn't it about time

against the Urban paternalists who
are largely concentrated in the in¬

Americans

centers

be figured from

a

Kuhn Loeb Places

effected it

were

Equip. Issue Privately

large majority.

is

tion

Corp.

coalition of liberals

that

it

such

a

difficult

not

to

devise, but it
to
develop
against the opposition of the Ad¬
might

difficult

be

ministration

in power.

now

Administration

its

owes

That
power

its strategy of cap¬

primarily to

from

immediate

of

farmers

supporting

a

bene¬

national

eventually,
paternalism
which,
will destroy that independent way
of life which is the chief

most

and

satisfying

farm
that

the

It

labor.

will

that

situation

incentive

product

of

be assumed

it

can

compels

retain

to

March

negotiated

1

through

& Co., the sale of
equipment trust cer¬
tificates, Series- 44, to a small
group of institutions.
Of the to¬
tal, $6,480,000 principal amount
Kuhn,

Loeb

was

delivered

Nov.

on

1, 1948 and

the balance of $6,399,000
amount

March

principal

1949.
The
certificates will mature serially in
on

1,

quarterly installments to and in¬
cluding Nov.
to and

Maturities

1968.

1,

including Nov. 1, 1953 bear

dividends at the rate of 2%%, the
balance

at

a

of

rate

3%%.

The
trust
cars

domestic

sup¬

by those who may be deep¬

to its domestic pro¬
The need for a strong na¬

opposed

gram.

has

equipment covered by the
of 1,892 new tank
and 92 new hopper cars.
consists

international

port of the national administration

ly

Transporta¬

announced

$12,879,000

Administration

present
all

do

may

this farm support.
Furthermore, the

even

American

General

political technique to bring

about

a

chance to choose?

A Coalition Proposed
The

given

were

of the North and

can

might win by

a

that "America

years

choose."

that

But it

and

We have been warned repeated¬

ly in recent
must

dustrial

and

platforms that represent two

West, would join with

and

West

and

undemocratic

independent, self-suf¬
and women in the

men

States

sentation of the

South to swing a national election

fits

of the fundamental

principles of our constitutional
government that the police power

regulatory laws, against minority
opposition with greater speed and
often with more efficiency
and
less partiality than local govern¬

of

other large

and

essentially

the

a

justment

sionals

turing the farm vote by assuring

state.

sworn to uphold..
:
From this beginning, the nation¬
wide coalition of Democratic and

Congress, is

those who have had the advantages
for the democ¬ of higher education—a clear pre¬

one

whose speedy and

fundamental divi¬

a

maintain the; Constitutional gov*
eminent which every: member of

real vitality in the uncompromis¬

alition of liberals

of

the
to;

necessary

a

cratic regulations to be applied by
multitude

regarding

action ;l

of

engineered.
Only
paternalistic ex-, one thing would make this coali¬
tion impractical,
the absence of
pansion of Federal powers that
left liberal devotees of local self- vision,
the
principles and
the
government no clear choice be¬ courage that inspire and compel
tween Truman and Dewey.
The men of great responsibility to do
condidacies
of
Thurmond
"and great
deeds
in times of great
and
Wallace,
despite the small emergency.
votes naturally cast for candidates
Surely the American people are
who could not win, demonstrated entitled
to
receive
from
their
the important fact that there was leadership—and particularly from
paign promised

election returns that if such a co¬

a

convictions

1948 cam¬ could be easily

the issuance of volumes of bureau¬

process of law," cannot be main¬
thought in our .country on tained, In a word, a comprehen¬
major political issues. First: sive welfare state must be a police

have all welfare laws enacted and

The

in
the

it has been

sion of

and

signaled.

only

not

their

course ;

Republican

and

justices
and
provide
economic
security? Second: Is the national
government the most competent

broke

the

of

is

throughout

Particularly,
evident

made

eliminate social and economic in¬

Industrials

but

people

necessarily ar¬
bitrary decisions must be enforced
crime and pestilence. It calls for
by the hurried prosecution and
more
than merely laying
down harsh punishment of offenders.
the rules of fair play in a free The traditional
protections of the
competitive economy.
This will individual against abuses of ofbe generally conceded.
cial authority, which we call "due
sion

regard to popular beliefs; in
fact even flouting them.
So
Dow

million

150

America

democratic

a

centralized govern¬

a

of

ment

W oi: people

the

must make decisions without

the

retaining

of

control

The impossi¬

responsibility for the being- demonstrated

some

economic
in

I

modern

accept

of

beg

that

stand

government.

No man
leave his

to

party,, to. break a pie dge, or to
betray his constituency. It would,
only be necessary for men to vote

tional

racy

tional

days.

required

of

thing about the stock going to set you free from fear labor relations, has demonstrated the other for the autocracy of
market is change.
It means and want and insecurity and in¬ a flexibility in response to public national socialism. In contrast,
opinion which has been notori¬ how uninteresting were the. argu¬
A program
that
participants
have1 to justice. seem to be ato set you free
would
"liberal" pro¬ ously lacking in the national gov¬ ments of the two major parties,
move nimbly
and frequently gram. Yet it might be noted that ernment.
both
advocating
an
expedient
without apparent cause. What the best example of such freedom
There is, however a more pro¬ marriage between a democracy of
is perhaps equally important from the burdens and worries of found reason for maintaining the easy virtue and a socialist seducer.
No one can tell whether the
self-support which is provided by authority of local governments
is that decisions
frequently
government today is found in gov¬ against the constant pressure to farmers, the small business men;
have to be made against every ernment
prisons, which are not extend the authority of the na¬ the skilled workers, the profes¬
sense

be

party' to attempt

certain

common

and

the control of Congress
hundred

,

stronghold of
should be

the

achieved

be

could

a

would

only be

can

support of the
local
self-gov¬

•

of.

over

within

all-powerful

an

party platforms in the

Thursday.
Whyte

—Walter

drew to the sidelines.

It is

by

national government,

black

coming and either sold
One of the exciting things
much of its holdings or with¬
about stock markets is its un¬

which

economy

developed

In

and

•

liberalism

.

examined.

Says—

next.

nalism

by more and; more Federal ex¬
penditures and controls.
Within

the signs are suspi¬ the Democratic
party Southern
freshly broken* test points cious, and indications point 'liberals, 'clamoring for States
that everybody was following. to up rather than down mar¬ Rights, are at odds with Northern
It was only in retrospect that kets, for the. immediate fu¬ paternalists whose aim is a social¬

Tomorrow's

Walter

of the such

some

have started from

Thursday, March 3, 1949

CHRONICLE

FINANCIAL

&

Halsey, Stuart Group
Offers G. & 0.
Stuart

Halsey,

&

Equips.
Co.

Inc.

and

tional

associates

any

$5,150,000
Chesapeake
&
Ohio
Ry. second
equipment trust of
1949 21/8% serial equipment trust

and

government to stand against
foreign aggression is so great,
may become so much more

urgent, that any present effort to
revitalize
local
self-government

be criticized as untimely and
impractical. Nevertheless, to any¬
one with a clear understanding of
may

the

Federal
a

is

of recent

trend

authority, to anyone with

vision of
not

extensions of

our

future if that trend

checked, it is evident

soon

that unless the effort is made soon,

it may soon be too
This

is

presenting

for

detailed program for

a

the salvation of liberalism and the

of democratic gov¬
let me dogmatize
surviving factotum of
the,.great insurgent campaigns of

preservation

But

ernment.

briefly,

as a

1

an¬

nually March 15, 1950 to 1959, in¬
clusive.

Issued

under

the

Phila¬

delphia plan, the certificates were
immediately re-offered, subject to
authorization
by
the
Interstate
Commerce

Commission, at prices

to

yield from 1.35% to 2.40%, ac¬
cording to maturity.
The

occasion

March

awarded

certificates, maturing $515,000

late.

the

not

were

to

certificates

will

be

issued

provide for the following new

standard-gauge

railroad

equip¬

estimated to cost approxi¬
mately $6,507,838.30:' 725 70-ton
ment,

Hopper Cqrs;

150 30don Caboose

Cars; and 10 Freight Locomotives.
Associated in the offering were

R.V W.
Pressprich
Co.; A. G.
retired staff of¬ Becker & Co. Inc.; Gregory .&
ficer: .of the original New Deal, Son,-Inot; Horablower & Weeks;
and as an -active participant in L. F. Rothschild & Co.; First of
every
national; campaign
since Michigan Corp.; Freeman & Co.;
1900. Not as. an amateur scientist, Hirsch & Co.; Wm. E. Pollock &
Theodore Roosevelt and Robert M.

LaFollette,

but.

as

cian,. I

as

a

weather-beatenpoliti¬

a

venture

coalition

of

to

pablican, leaders
.

assert that

Democratic

and

against

.

a

Re-

Co., Inc.; McMaster Hutchinson &
Co,.;

Mullaney, Wells

& Co.; Ju¬

lian Collins'& Co:; Alfred Q'Gara

pater¬ & Co.;,and F. S.

Yantis & Co.;- Inc.

Volume

169

4782

Number

COMMERCIAL

THE

&

FINANCIAL

CHRONICLE

An

Piice Outlook Portends No Depression
(Continued from page 7)

sharp rise in petroleum prices, led
corresponding up-surge of non-

a

farm prices. You can

see

rise

through 1947 was
though not so steep
through 1946.
'These
ter

of

as

of

set 'in

1947

reactions

nated

the'

price

1948.

The

most

the

steep,
the rise
'
'
1

developments in the lat¬

half

chain

that the

very

motion

a

domi¬

which

movements
immediate

of
was

from

scarcity of meat animals following
heavy liquidation of the pre¬

year.

vious

the heavy demands and persistent

the

winter.

products in

index

The

of

farm

almost touched

June

shortages

stock

decline

in

prices

of live¬

to bring about a convergence

remainder of the

year

a

saw

continued and almost uninterrupt¬
ed decline in farm prices. As of

of

February 15, farm and food prices

Price

were

Farm

Price

adjustment in farm prices

price movements of 1948, but
toward the end of the year other

back

far

More

as

such

cloth fell to less than

rate

a

as

to

that

ever

cause

of the

one

month's

occurred in the

decline
Whole¬

sale Price Index.
In

a

of

period

the year-end.

days

spot

weeks,
a

small.

often the

of

.

At

that

time

a

lot

of

stopped to ask ourselves the

us

awe¬

of 12 million

war

on

shown

agreement.

This

recently, in the past few
we

have

seen some

signs of

by a softening of
is widespread, but

The first half of

it

brought

oil, lard and tallow to

a

the end of the

notice

are

spot

prices for barley, corn, cottonseed
war

prices of winter wheat fell from ing in cotton textiles. This also
$2.93 to $2.37 a bushel, and the was an overdue recognition of an
spot price of corn from $2.60 to accomplished economic fact. With
$2.0^..

in

Nevertheless,

proved to be the
general weaken¬

this

forerunner

these

February
of this year, at last, was the occa¬
sion
of
a
sharp drop in farm
prices, which was neither so deep
no so
prolonged as that of 1948.

16 cents by
so

will

You

lows,

new

below

even

the

post¬
levels

which prevailed before the decon¬
trol of prices

in June, 1946.
Hog
prices dropped to the
lowest point since October, 1946.
and

and the return

steer

from the armed

men

that

the

question, "Is this it?"
retrospect,
we
might

services, there

was

a

are

conspiciously lacking
one thing, consumers'
purchasing power is vastly greater.
The real weekly earnings of fac¬
tory workers in 1949 are about
50% higher than in 1920. Employ¬
ment is very high, and
loss of
purchasing power from
unem¬
ployment
is
partially
offset
through unemployment compen¬
was

sation.
for

Government

exports

assured

for the

and

establishment

the

military

important

are

of

sources

contrast to

expenditures
and
In

demand.

heavy speculative

after

11

years

of absolute

price Nevertheless,

is

doubt
that the existence of the support
program offers strong resistance
to a broad and prolonged decline

January highs,, but in- the
stability, were increased twice in
spring and summer of 1948
four months; and lead went from
average prices of farm products
15 cents to 21.5 cents, and zinc
rose again, because of the relative
the

to

there

late

of farm

no

One

of

the

the

going

are

encouraging things
is that they

on

are

not

indiscriminate

(as they would be

in

a

the

of

case

tion). They
cific

to

are

general liquida¬

selective and spe¬
commodity and

certain

market situations. Shortages,
those

as

we

metals,

many

such
facing in

still

are

provide

a

market

World

The

farther

July

—-1920 High—.

Month

1949."

in

to

This

the

to

sensitive

more

extreme

and

the price fluc¬

are

find.

we

go from
materials

we

raw

the

In

highly

2.9288

2.7475

1.4710

Nov

1.0830

9.2188

*Jan.

15.9375

14.4000

9.8400

June

8.0938

organized commodity markets, the
risk-taking functions make prices
very sensitive to changes in sup¬
ply and demand and much less
dependent on costs. Conversely, as

.100 lb.

8.7563

fSept.

17.0688

12.1400

8.5000

Nov.

6.8688

goods

lb.
Cotton, 15/1-3-in., New York__i.____
lb.
Cottonseed oil, New York.....
lb.
Cowhides, native packers, Chicago._
Print cloth, 38.5 64x 60, New York.-—yd,
Steel Scrap, *1 melting, Pittsburgh....Aon
lb.
Lead, pig, New York_____,___^_—_

0.1313

Apr.

0.4238

0.3930

0.1214

Mar.

0.1178

stages of processing and fabrica¬

0.0721

:j:Jan.
§Feb.

0.2163

0.1926

0.0840

Apr.

0.0598

tion,

0.4100

0.3500

0.1200

Apr.

0.0700

and

Apr.

0.2581

0.2300

0.0659

June

"0.0653

Commodity and TJnit.___bu.

$0.7100

.__.bu.
Wheat, -2 hard, Kansas City..
Steers, good to choice, Chicago.......100 lb.

Com, *3 yellow, Chicago.

Zinc, pig, Western, New

$2.0069

0.0485

High

$1.5625

1 Year

-7—1921 Low—

after High

$0.6100

Oct.

Price

Month

$0.4444

with

the price

become

24.0000

13.2000

July

12.0000

0.0923

0.0856

0.0405

Mar.

0.0405

partly for this

0.0505

Jan.

0.0967

0.0892

0.0591

Aug.

0.0468

because

services

World War II
1949 Low

Commodity and Unit—

1939

A;7 '

bu.
Wheat,, *2 hard, Kansas City—
bu.
Steers, good, 900-1100 lbs., Chicago-100 lb.
Hogs, good-ch., 200-220 lbs., Chic._1001b.
Cotton, middling 15/16; 10 mkts._
lb.
Cottonseed oil, New York——.
lb.
Cowhides, light native packers, Chic.—lb.
Print cloth, 38.5-in. 64x60, N. Y
lb,
Steel scrap, heavy melting, Chicago. Aon
Lead, pig, New York—
-lb.
Zinc, pig, prime Western, New York.Ab.
Corn,

'

*3 yellow, Chicago

1946

Date

Price

$0,445

$1,448

1-15-48

$2,808

0.636

1.871

11-28-47

9.051

17.000

7-

6.486

—Postwar High—

2 Months
aft.

—

(to Feb. 17>—

..

••




sluggish. It is
and partly
more
sluggish

of rent and consumer

Consumers'

the

that

risen

has

Index

since prewar and since

Date

Price

$2,328

$1,440

2- 8

$1,129

3.115

2.900

2.308

9-48

36.375

35.000

14.850

8-19-48

31.200

26.125

0.092

.0.310

7-16-47

0.394

0.327

0.338

2-

8

0.318

high

0.055

0.143

3-13-47

0.412

0.265

0.258

2-

8

0.140

war,

0.113

0.155

10-31-47

0.378

0.320

0.270

2-17

0.248

they

were

12-

less, both
decontrol,

and

0.047

0.114
18.750

0.050

0.082

0.051

0.087

t$22.3875 in July, 1919.
ULess

Price

aft. High

13.866

High

1 Year

than

one

Wholesale

the

Price

Index.

Whereas

primary market prices,
measured
by the Wholesale

2.075

(f

2- 8

21.500

Price

ff

2-9

19.750

summer

as

Index,
as

were

at

their

more

peak

last

than twice

they were just before the
half again as high as
under

price

control,

8-47

0.282

0.240

0.158

2-16

0.151

the Consumers' Price Index at its

42.500

39.000'

41.750

2-14

35.000

peak had risen by three-quarters

11-

1-48

0.215

11-16-48

0.182

Unchanged since 11- 1-48
Unchanged since 11-16-48

since the peak.

§$0.6100 in August,

1919.;

the

to

middle

wartime

from the prewar

the

of

economic

"Hold-the-Line"
45

months,

about

stabilization

Order.

the

tight

price
of

In

index

rose

by

about 7% per
the period

or

was

from

the

to

these

these

rose

control

1943

1946.

In

index

one-fourth,
Then there

year.

war

1943, when the

began in earnest with the

program

three

less than

the

middle
years,

7%,

or a

of

the
little

2% per year. Then followed/
the "decontrol year" in which the
over

index

18%

rose

in the first post¬

price

the

boom; only to be fol¬
by another rise of 11% in

second

touched

boom,

off

by

which

was

the

short corn
of 1947 and carried the index

crop

its peak in the late summer of

to

1948.

Compared
to
dinary increases,

these
the

extraor¬

declines

of

the past four months seem almost

trifling. At the rate the index has
been

falling since it reached its
it would take about five
to

the increases that

erase

in

occurred

the

two

after

years

decontrol!

If

look at the components of

we

the

Consumers'

find,

as

Price

might

we

Index,

we

that

expect,

food prices have risen further and
faster than any
others. This is
than

more

tion

of

the

anything else a reflec¬
enormous purchasing

the

of

power

our

consumers

during

and since. Our studies of

war

consumption habits in the United
States

the past 50 years have

over

demonstrated

quite clearly that
people when they
money will buy food, and
good food. The high levels of con¬
the

American

have

sumers'

incomes

in

recent

years

have generated unprecedented de¬
mands for the high quality foods

meats,

—

fruits

dairy products, fresh
vegetables. This has

and

itself

expressed

vigorous
broken

as

demand

only

resistance

a

peak

and

foodstuffs,
then

and

now

to

steady

for

prices.

food prices have much

by

Thus,

more

than

doubled since before the war and
increased by nearly one-half from
the time controls were lifted to
the peak last summer. Since

they

have

declined

The average retail
in American cities

then,

significantly.

prices of foods
was

about 5%

lower in

in

January than at the peak
August, and some decline has

occurred

since then.

Prices

of

apparel

house

and

furnishings are about double what
they were before the war and
about one-fourth higher than
they
under price control. The in¬

were

creases
of
the past two
and a
half years have reflected the
great

restocking
when
or

in

boom

that

occurred

goods that had been

scarce

absent

during the war returned
increasing volume. How far this

increased demand may carry over
on a permanent stable basis
is one
of

the

big

fronting
sumers

vast

the

con¬

con¬

well
today, there is always a

reservoir

which

are

long

as

questions now
Even though

us.
on

stocked

average

of

are

unfilled

wants

translated into demand

as

purchasing

power

is

available to sustain it. It is parti¬

cularly for this reason that the
price adjustments now going on
in some clothing and house fur¬
nishings
lines
are
especially

significant, since they may be de¬
cisive in determining whether we
can

find

permit

as

10-22-47

J$0.2713 in July, 1919.
year

than

9

2-

'

*$18.5750 in March, 1919.
.

June 28

in

reason

the

of

movements

labor

more

movements tend

more

Sept. 28.6000

successive

invested

costs

Mar.

August

and

more

overhead

them,
to

through

pass

0.0390

12.0000

lb.

York.

May
May

0.1925

2 Months

after

0.8155

.

Hogs, good to choice, Chicago—

Price

long

first

was

rise from the outbreak of the

is

collapsing

a

back

goods

tuations

1914

well

market.

more

War I

con¬

years

reaction

reflects four i

war

There

ages have beCn overcome, indus¬
try-by-industry adjustments have
been
made
in
recognition of a
new
supply-demand relationship.
Far from being alarming, this is
healthy. This is nowhere better
illustrated than in the relationship
between
farm
prices
and
the
prices of nonfarm products gen¬
erally. As we have seen, farm
prices dropped very sharply dur¬
ing 1948. We can all remember
the time when a drop of this mag¬
nitude would have been the signa
for an "agricultural depression."

the

movement of the ;
Price Index since the >

ditions.

peak,

relatively

peaks

phases of economic

basis for high prices. Where short¬

not

wartime

distinct

lowed

price adjustments that

a

a price level which will
steady volume of buying.

The importance of the so-called

"miscellaneous"

segment of the
index is often overlooked because
because of its
nondescript name,
but it carries

a very
heavy weight
the index—its relative
impor¬
level and by less tance is about 25%—and it con¬

than one-third from mid-1946.

Except for these differences in

|

There 1

The

Consumers'

outbreak of the

war

about

,

intermediate

same

troughs.

middle

No General Price Reduction

two

same

the

of

inventories today
are prudently and conservatively
managed. And the stock market!
Surely no one could suggest that
share prices offer much room for
price collapse.

markets,

PRIMARY MARKET PRICES

the

and

inventories accumulated after the

finished

prices.

Index for the past
closely resembles that for

the Wholesale Price Index.

first World War,

'

') Grain prices never did recover

Price

which

Spring wheat was 26c below the
rush to buy bottom of the market break of
In
say cotton clothing and cotton house¬
February, 1948.
Print cloth dethat if a general decline had been hold textiles, which bid up the
lined a little further. There were
in the offing, this violent price prices and margins to phenomenal
the first signs of weakening in
drop might well have provided levels. Once the stocking, by con¬ petroleum prices. Even in the
the pusn that would* have started sumers and retailers, was complet¬ metal
markets, where the prices
it rolling down.
It was particu¬ ed, textile markets began to take generally are firm and near their
on
a
more
nparly normal aspect. peaks, there are signs that buyers
larly significant that nothing of
the sort happened. Cotton dropped This return to normal required, are no
longer so eager that they
3 cents; steers dropped $3,00; hogs among
other things, very sub¬ willingly pay premium prices.
stantial declines in prices.
Since
dropped $3.50. But if you look
Still it does not now look as if It has hot been this time because
at the prices of such ".commodities consumers were no longer avid to
this is the beginning of a price it has not been accompanied by a
as copper,
strap steel, sugar, tin, buy at high prices, this readjust¬
collapse like that of 1920. If there corresponding drop in farm in¬
wool, lead, and cotton print cloth ment culminated at the end of
are
some
points
of similarity, come. The rise in farm prices in
during
those
two
weeks, you 1948 in widespread (if not so there are- more
points of differ¬ the latter half of 1947 was the
would never have suspected that very
sharp)
price
declines
of
result of short crops. Farm in¬
ence
between 194.9 and 1920.
In
anything unusual was at work on many cotton products. As of to¬ the first
place; price supports. It comes did not increase propor¬
the commodity markets.
In other day, it appears that cottons have would be a mistake to think that
tionately because farmers had less
words, the drop was localized, pri¬ come back more nearly into line
support prices set a firm floor to sell. The situation in 1948 was
marily in grains and secondly in with the prices of other goods, and
below which prices cannot fall. just the reverse. Although prices
livestock, which are affected by other textiles in particular.
Indeed, we are seeing many quo¬ fell, the large crops gave farmers
'grains; and it was specific to cer¬
The other maj or characteristic tations at less than
support prices. more to sell, so that net farm in¬
tain
market
conditions
as
we
of 1948 prices Y^as the steady and This
is
possible
(among
other come in the fourth quarter of
passed from a price level bid up comparatively
large increase in reasons) because the Department 1948, though
less than
in the
by shortages to one "sold off" in metals prices—about 15% over the of
Agriculture has certain stand¬ earlier quarters, was greater than
recognition of good crop prospects. year.
Prices of various iron and ards for products which they will in the same quarter in 1947 and
This is very nicely illustrated steel
products
were
repeatedly buy, and on which they will make greater than the average for any
by the behavior of the Bureau's increased and were on the aver¬ from 11 cents to 18 cents over the earlier year. Thus, even in the
index of spot prices for 28 basic age 18% higher at the end of the
support loans. If the corn has too face of a sharp price decline, it
commodities.
The
agricultural year than at the beginning. The high a moisture content
(and was possible for the Secretary of
in
nonferrous
metals much of its
component of this dropped in one increases
does), or if the wheat Agriculture to say several weeks
month by 15%.
The nonagricul- were even greater: more than 20% is not properly stored, farmers ago that, "Although the peak may
tural dropped only 6%.
be
passed,
agriculture will
do
on the average.
Aluminum prices, must sell it in the open market.
some

sumers'
35 years

in 1920. For

35

amplitude, the chart of the Con-

supported by a volume of pur¬
chasing power from many sources,

mild let-up in economic activity

accompanied
prices which

with the. prices of basic com¬

case

modities,
ten

As is

Wholesale

The Let-Up in Economic Activity

January, 1948 the spot price of
print cloth as recorded in the
Bureau's index began to decline
from the extraordinary levels it
had reached in the postwar buy¬
ing rush. From a high of 28 cents
in early January, the price of print

sharpest" single

the

prices,

level of 1926.

adjustments, which may turn out
to be equally significant, began to
appear.
The first of these was in
As

in

that

changes

nonfarm

and

that

closely

these

necessarily as
a
sign that a stable relationship
has been reached.
Literally in¬
terpreted, it means only that they
are
equally above the average

the dominant characteristic of

textiles.

Index.

chart

notice

to

of

should not be taken

*

The

farm

again

Dominant

was

result

measured

the

Adjustments

year.

interesting

the

as

about 17% below their peak.

cotton

a

metals

was

The

is

It

until mid-July.

peak

price structure
based on very short supplies of
grain, in the face of prospects for
at least normally good crops in
1948.
Apparently they all "came
to" at once, because the prices of
grain fell precipitously in the first
two weeks of February,
1948 at
up

all

net

were

holding

nearly

of

the

their

which appeared
in the very early months of 1948.
About the same time—just year
ago—the grain traders suddenly
woke
to the fact that they
up
meats,

of

result

reach

the

and

the

were

throughout the

liquidation of livestock in the

porary

These

the

over

the level of the January peak, and
the
prices of livestock did not

winter of

1947-48, because of the
short supplies and higher prices of
feed grains.
This caused a tem¬

11 cents to 18 cents

important differ¬
economy now is

more

even

is

ence

(991)

in

tains many of the most important

(Continued

on

page

36)

36

(Continued from page 35)
items
All

in

the

consumer's

budget.

through the pages of the most re¬
cent mail catalogs, you will realize

transportation is in this group:

streetcar and bus fares

as

well

as

automobiles, tire and gasoline. It
also includes most personal serv¬
ices

(such as beauty and barber
shops) and medical services (in¬

that

the

down
those
same

prices

have

that

inventories

greatly outnumbered by
that
have
remained
the
or even
risen. This is par¬
are

high, and both retailers and
manufacturers are very sensitive
to the need for meeting consum¬
ers' demands for acceptable qual¬
still

price for the Consumers' Price
We

Index.

for

have

occupation with prices and
effects

On the other
hand, costs and break-even points
are
high, setting limits on the
amount of price reductions. There
is
the
inevitable temptation to

ity at lower prices.

years

many

about 25%
der

cluding doctor, dentist and hospi¬
had
detailed
specifications and
tal fees) as well as many items
explicit instructions for the guid¬
household operation (such as
ance of our price agents,
so that
laundry and dry cleaning serv¬
hold prices and reduce production
they would be pricing the same
ices, and telephones).
The rela¬
to
reach
an
equilibrium point,
items from month to month and
tively slow rise of these prices
under the same conditions.
The even though it may be at a lower
on the average is in marked con¬
level.
This, of course, is the
items
we
price are those cus¬
trast to the price changes for food,
tomarily purchased by moderate- greatest danger that we face, be¬
apparel,
and
housefurnishings.
cause
it is precisely this course
income
families in large cities.
Because most of these miscellane¬
which will lead to a downward
The specifications are drawn in
ous commodities and services are
spiral o'f contracting production,
terms of the physical characteris¬
only
indirectly
affected by
purchasing power,
tics by,which an agent may iden¬ employment,
changes in the commodity mar¬
and demand.
V^;.
tify the items.
Our pricing prac
kets, and because they include
I think our experience in the
tices require that we record the
inany regulated and institutional¬
past shows that engineers and
prices of merchandise available to
ized
prices, they tend to move
sales managers can be very in¬
moderate-income consumers gen¬
more slowly on the average.
The
genious in redesigning production
accumulated
rise in
this group erally. Price reductions are quick
to maintain essential quality and
since August, 1939 and the post¬ ly reflected in the index if they still meet
the demands for lower
apply to items of standard quality
war rise since June, 1946, has been
These changes may
on
sale long enough and in full price tags.
only about two-thirds as great as
not always lead to lower prices in
for the index as a whole and only enough assortment to be available
the economic sense—that is, price
to
moderate-income
consumers
about one-half as great as for food.
reductions on identical quality. In
That is, we record and
But by the same token, this is a generally.
many cases, such true reductions
use in the index reduced prices of,
group which tends to keep on ris¬
are
possible through closer con¬
say, bed sheets if the sheets fall
ing after other prices may have
trols on costs and the economies
within our specifications, if they
turned
down.
Where food and
that arise from availability of ma¬
are of standard quality and if. the
clothing prices have dropped, the
terials and stability of prices. In
prices of automobiles and other prices are in effect two weeks or many other cases, prices will be
longer. On the other hand, if the
transportation, and the rates for
engineered and merchandised to
sheets are of "off quality" or ir¬
medical and hospital care have
meet
consumers' ideas of what
continued up under a momentum regulars, of if the reduced price is
If I had to
in effect only a day or two, the they can ana will pay.
that may carry them higher long
guess, I would guess that the end
after other prices have dropped. price is not used in the index. This of
1,949 will see both prices and
is important to bear in mind when
This, you will notice, was the case
price tags rather lower than they
you try to use the newspaper ad¬
after the First World War.
are
now, without sacrificing es¬
vertisements or store windows to
Rents present a unique case be¬
sential
quality
and
without
foretell the movement of the in¬
cause, alone among prices, rents
marked
declines
in production
It will come as no surprise
are still under control.
Up until dex.
and employment.
to many of us who have closely
the revision of the Rent Control
It is characteristic of such ad¬
the movements of this
Act of 1947 rents had risen less followed
justments as these that they are
index, if the changes in January
than 5% since the beginning of
no
longer dominated by broad
and February
are less than the
the war.
In the past year and a
casual observer might have ex¬ sweeps of economic changes such
half they have risen nearly twice
as
those of 1919-20 and those of
as much.
Although our rent in¬ pected.
1946-48.
On the contrary, they
dex includes over-ceiling rents as
What's Ahead for Prices?
are
specific and selective in re¬
they are reported by tenants, they
What may we expect from here sponse to the market, conditions
do not reflect the full effect of the
It is
on?
I am no prophet and proph¬ of individual commodities.
higher rents for dwellings built
the characteristic of such a mar¬
ecy is not one of the functions of
during the war and since. If these
ket that some prices will be going
my Bureau, but we can draw on
were taken into account, the rent
up while others are going down,
common sense and common knowl¬
index might be 2% or 3% higher
edge to forsee something of what while we grope toward that elu¬
than it is shown, but it still would
goal,
"the balanced price
lies ahead.
In the first place, we sive
be much the most stable of liv¬
have observed seasonal changes in structure."
ing costs.
There are some kinds of prices
food prices. Typically, these prices
reach their seasonal low point in which are more likely to move up
A Contrast With World War I
of

These

show

charts

between

the

marked

what happened

following the end
War and the
two and a half that followed the
end of the second.
Here again we
encounter the question: Will con¬
sumers' prices be deflated as they
were
in
1920?
Again, I must
unswer, "I think not," and for very
in the two years

first

the

of

World

rise which
seasonal plateau

March and begin a slow

tion from the

culture
more

Department of Agri¬

permits us to be a little
specific.
The experts in
,

agricultural prices in the Depart¬
ment of Agriculture have pointed
tinent today because during the out that the demand for meat has
declined from the unusually high
past three months we have seen
a
wave
of price reductions, not level of last summer and is now
about the same as in late 1947.
only in foods but in various items
Under present demand conditions
o'f apparel and housefurnishings
and with a
seasonal decline in
as well.
The drop in food prices,
much the same reasons.
The

which

question is particularly per¬

we

look upon as a result of

production, they foresee slightly
higher, rather than lower, prices
ahead.
Fruit and vegetable prices

of 1948, has been
responsible for the
have been rising because of the
declines that have occurred in the
weather
damage to the
winter
index up to now.
The reductions
These may be expected to
in apparel and housefurnishings crops.
fall again as the new crops come
prices, though in some instances
in.
We are still waiting for the
they have been spectacular and
have
attracted
wide
attention, lower grain prices to be reflected
in the prices of bread, and fol¬
have affected a relatively small
lower feed prices in the price of
number of commodities, concen¬
milk.
On balance, we might ex¬
trated in a relatively small nuniber of price lines.
The decline pect that the seasonal upward
movement will occur, perhaps a
in cotton textiles has been re¬
little modified.
And, of course,
flected in some general price rewe must never forget the fact that

the

fine

crops

almost entirely

ductiqns in items of cotton

cloth¬

A rather
in men's
clothing has led to lower prices,

ing and housefurnishings.

disappointing
as

manufacturers
their inventories. Lower

retailers

cleared

season

and

prices of hides and leathers has
brought about some reductions in
the prices of shoes. Some of the
household appliances and
some
items
of furnishings have been

sporadically reduced.
But if you will go through any
of

our

great

stores




or

thumb

than

the

weather

can

have

mendous effect on food
crop

failure

send

food

summer

prices higher;

could

crops

next

a

push

tre¬

prices.

A

could

bumper

them

down

further.

difficult to
foresee what may happen in the
next few months to prices of ap¬
It

parel

is

a

and

little

more

housefurnishings. The

declines leads us
to wonder how far it will spread
and how far and how long it will
recent flurry of

to

expect

may

see

rents

Note that even

what

national

stable rela¬

a

steadily rising level of living; and
on the other hand, investment in¬
come sufficient to expand capacity

and

demand,
and

with

supply,

a

postwar price level would
above the level of 1939,
should

we

somewhat

hope

of 1947-48.
What is more important than the
level itself' is the economic en¬

below the peak levels

in which

vironment

ex¬

may

to

is how many of
the last 35 years have been years
of rapid price change and how
few have been years of that kind
stability

of

think

of

as

which

like

we

reason

tinue

too,

14—about twofifths of the total — when there
a

total

of

about

approximating
stability. There is the first post¬
war
plateau from 1923 through
1929, when the fluctuations were
comparatively minor; then there
is
the
post-depression
plateau
from 1935 to 1940. For the rest of
the time prices were moving either

was

very

something

rapidly up or very

down—certainly

more

required to satisfy the
of

a

dynamic economy.

rapidly

than

are

functions
Consider¬

think

now

the rate

and there is every
believe that it will con¬
increase. There is - no

why

level of living,

our

cannot continue to increase,

provided that we find the means

expanding production and vigor¬
ous
competition. It will reward

to

share it.

The Trouble Seeker
(Continued from page 3)

light of the tremendous increase since then
of doing all types of business?
The question,

become
the

in

cost

in
of

obviously furnishes its own answer.

course,

When it

to the

comes

suggestion that representatives of

Exchange, Curb and over-the-counter market sit
down and devise some formula so that one segment of the
the Stock

does

business

the expense of another, anti-

not benefit at

monopoly and other laws must be taken into considerations
In any event, so far as the other specific subjects men¬
tioned that might be explored are concerned, it must be
borne in mind the NASD members are variegated. Some are
Exchange members. Others are not. Some operate ex¬
clusively in the auction market, others in the over-thecounter market, and many in both. So when you reflect on
this fact it is obvious that any conclusions drawn from a re¬

Stock

port based on the instant

study would place the NASD on

the horns of a dilemma.

Tf the ultimate report

favors the over-the-counter mar*

will be incensed, and vice versa.

ket, the Exchange members
For

and

part, we feel that Mr. Fulton is too shrewd and
tactician not to have given this considerable thought

our

snide

a

consequently

another

new

we

feel his is a desperate attempt to create

venture for the purpose

of giving the impres¬

interested, along with the NASD, in the
financial welfare of over-the-counter dealers, by and large.
he

that

sion

As

is

matter of fact, we

a

feel that the difficulties experi¬

enced

by the over-the-counter

in

small measure, as a

no

of the NASD and

industry have been occasioned

result of the actions and activities

will not be eliminated unless and

until that

and a free economy once
prevail in the securities industry.

organization has been dissolved
permitted to

more

With State Bond & Mtg.Co.

Pacific Co. Adds
The

to

(Special

Financial

ANGELES,

LOS

neth Barsamian

(Special

Chronicle)

Chronicle)

Financial

The

to

MINN.—Paul C.
Maras
has joined
the staff of
State Bond & Mortgage Co., 26 l/z
NEW

CAL. —Ken¬

has been added to

ULM,

North Minnesota Street.

With Turley &
(Special

Exchange.

to

Tegtmeyer
Chronicle)

Financial

The

ILL.—Thornton B.
Stearns
is now with Turley &
Tegtmeyer, 120 South La Salle
CHICAGO,

Dempsey-Tegeler Co,

With

to

(Special

"normal." If we pace

the years on the chart of the
Consumers' Price Index, there are

to

to

reason

glut of goods. It will be
characterized by full and steadily

to

off

I

a

of 3 % per year,

look at these

them)

by

learned

ductivity has increased at

age nor a

rising

economic level.
without rent con¬

we

find it. I think we will
recognize the approach of price
stability because it will be neither
clearly
a
buyers'
market
nor
clearly a sellers' market; it will
be a market with neither a short¬
pect

provide

to

that if
consumers
real incomes rise too
fast and too far, in relation to
increases in production and pro¬
ductivity, inflation will follow.
But if profits and investment out¬
strip real incomes, we accumulate
capacity and production in excess
of purchasing power and deflation
will follow. Historically, our pro¬
have

we

well

and

hand, consumer

productivity.

raise

and

costs

Certainly

competition.

stable
be

the one
sufficient

on

income

the staff of Pacific Company of
charts,
the
most
striking
thing about California; 623 South Hope Street,
them
(aside for the similarities members of the Los Angeles Stock
between

con¬

This re¬

quires,

of

we

between

product

sumption and investment.

tell. Even when it is
comparatively stable, our price
structure is dynamic, with prices
constantly moving in response to

the
miscellaneous
goods and services have probably
not run the course of their rise—
for example, hospital bills and the
rates of many utilities. The rise
in these laggard prices must al¬
ways be kept in mind when we
assess
the effects of the declines
that may be in prospect in some
commodities and services.
When

distribution of the

healthy

can

anyone

trol, rents, after the first war, con¬
tinued to rise through 1923.
Many

At

find stability in the

between prices and in¬
comes? Personally, I do not think

more

a

we

tionship

only rise.

toward

Dynamic

asked:

price structure and

Rents, of course, can

down.

often

are

level will

How fast and how far
in
the
fall.
If there were no they rise will depend on the kind
other factors affecting food prices, of rent control we have, but over
we
might expect an increase of a period of years, as the housing
about 2% to 3% between now and shortage is gradually eliminated
September.
The latest informa¬ and as controls are taken off, we

carries them to a

tionship

Our Price Structure Is

.

contrast

Equally important is the rela¬
between prices and in¬
comes. No price level can long re¬
main stable unless it results in a

their

the economy.

on

We

and by the same token
it will produce its crop of failures
among
the inefficient and the
marginal enterprises.
profits,

separated by a difference of
in level, it is no won¬
that there is so much pre¬

are

hand there are

one

signs of healthy conditions:
are
low, demand is

many

come

ticularly true of the items which
we

On

healthy

enterprise with

efficient

ing that the years of stability were
so few and that the two plateaus

Price Outlook Portends No Depression
continue.

Thursday, March 3, 1949

FINANCIAL CHRONICLE

&

COMMERCIAL

THE

(992)

E.

mond

affiliated
&

The

Financial

'

Street.

Kubitschek has become

Kubitschek

(Special

Seventh Street.
was

with Conrad, Bruce

to

The

COLORADO
—John

M.

Financial

of
-

has formed

COLO. —Frank R.
added to the staff
Peters, Writer & Christensen,

National Bank Building.

(Special

to

The

DENVER,

the
,

Johnston

Financial

COLO.

Chronicle)

—

has become

Floyd

.!

F.

connected

offices 1 with Sidlo, Simons. Roberts & Co.,
[ First National Bank Building. - *
North Tejon Street.

Investment Co. with

at 325

-

Sidio, Simons Co. Adds

Chronicle)

SPRINGS, COLO.

Kirk

Co.

Chronicle)

DENVER,

Kirk Investment Co.
(Special

Financial

The

Button has been

previously

& Co.

to

Inc., U. S.

Kirk

-

With Peters, Writer

Dempsey-Tegeler

with

Co., 210 West

Mr.

Chronicle)

ANGELES, CALIF.—Ray¬

LOS

Volume 169

Number 4782

THE

COMMERCIAL

&

CHRONICLE

FINANCIAL

(993)

Indications of Current Business

37

Activity

The following statistical tabulations cover
production and other figures for the latest week or month available (dates
shown in first column are either for the week or month ended on that date, or, in cases of quotations, are as of that
date) :
AMERICAN
11

steel

Equivalent

Bteti

v

IRON

Indicated

AND

STEEL

operations

Crude

(percent

of

capacity)

Mar

PETROLEUM

(net

tons)

Mar.

output

Kerosene
oil

Gas

(bbls.)
(bbls.)

and

5,404,000
17,754,000

5,399,000

16,984,000

:i7,961,000

2,485,000

on

foreign

1

19

distillate

2,354,000

2,520.00C

7,000,000

7,617,000

7,944,000

8,127,00(

8,117,000

8,561,000

8,744,000

AMERICAN

Total

109,886,000

119,780,000

111,587,000

20,066,000

20,524,000

22,125,000

9,731,000

61,517,000

68,746,000

34,004,006

New

80,591,000

82,340,000

85,075,000

49,782,000

122,533,000

BRADSTREET,
January:

—

ENGINEERING

Feb. 19

697,335

699,442

709,585

—Feb. 19

625,844

618,248

631,290

South

804,937
722,622

Central

West

U.

Public

construction

Feb. 24

$146,604,000

$212,157,000

27,485,000

112,754.000

64,829,000

49,139.000

Z_ZZZZZZZZZZZIZFeb!

24

33,850,000

147,328,000

24

31,190,000

71,797,000

27,712,000

24

1,552,000

2,660,000

75,531,000

51,890,000

^

municipal

Federal

_

—

—

York

Outside

S.

BUREAU

OF

BUSINESS

States

Retail

|

10,755,000

♦11,440.000

11,460.000

SALES

INDEX—FEDERAL

698.000

748.000

860,000

1,229,001

152,800

♦153,800

158,100

131,700

RESERVE

output

Total

.

239

Retail

24f

230

(in

kwh.)

000

(COMMERCIAL

5,650,279

5,810,034

5,251,935

AND

INDUSTRIAL)—DUN

180

136

93

ERAL

&

(E.

&

M.

J.

3.75628c

$46.74

$37.25

$37.58

-

$46.74

_

("*-/■,;vy

21.200c

23.450c

23.425c

21.425c

103.000c

103.000c

21.500c

21.500c

AND

21.300c

PRICES

DAILY

17.500c

17.500c

12.000c

101.63
113.12

::

NEW

OF

DEPT.

OF

680,670

860,704

1.649,284

2,229,229

8,811,476

5,105,433

123,038

113.854

363,665

348,667

101,850
232,443

88,501

69,091

73,902

§0,927,000

20,716,000

21,471,000

public storage

Jan.

of

as

spindles active
SPINNING

Active

spindle

674,463

YIELD

DAILY

(DEPT.

hours

COMMERCE)

OF

(000's

STORE

RESERVE

OF

111.07

Sales

(average

monthly),

(average

daily),

119.00

119.00

116.22

Sales

116.80

114.85

Feb. 28

191

1935

—

-

Stocks

108.70

109.06

113.50

113.50

112.93

117.20

117.20

115.04

:

-

seasonally adjusted

2.38

2.41

FACTORY EARNINGS AND
AVERAGE

3.00

All

2.45

3.00

3.11

2.70

2.70
2.81

of

Feb. 28

3.05

3.05

3.14

' 3.46

3.44

3.53

3.24

3.22

3.42

.

.

2.98

2.98

2.79

Durable

Hourly

2?90

37G.1

373.6

387.2

All

,

goods

YORK

Credit

162.2

171.5

239.1

Cash

234.8

230.7

237.4

250.1

Total

—

carrying

307.9

extended

hand

011

of

and

customers'

312.5

310.3

Market

value

of

listed

197.7

202.5

263.2

Market

value

of

listed

237.2

242.3

Stock

238.1

240.1

'228.6

Member

borrowings

166.3

170.9

172.7

Member

borrowings cri

191.1

195.7

index,

190.4

163.5

217.9

232.8

NUMBER —U.

157.0

TURE

146.3

142.9

143.4

150.5

151.3

155.6

155.6

138.C

209.5

213.1

Feb.

143.0

155.6

211.3

216.1

137.6

August,

All

152.291

155.095

182,892

177,390

191.306

86

92

99

295,474

319,066

327,700

'

DEPT.

S.
;

-...

OF

v'•

;

■

grain

■'!>-;.c

147.0

Meats
Hides

.

158.5

158.8

168.9

167.9

183.6

2t:9

412

412

374

235

236

181

180

126

285

282

320

244

274

333

and

products

—

...

160.8

crops.

159.2

170.3

152.9

153.G

147.5

143.0

143.6

148.3

Feb. 22

135.9

138.0

138.0

130.1

178.1

178.1

177.9

155.C

201.3

201.3

200.8

193.0-

Savings and Loan

131.2

131.0

133.5

134.9

Insurance

158.6

164.0

REAL

ESTATE

AREAS
AND

331
307

240

218

206.5

217.5

219.1

20§3

218.3

224.2

181.1

190.3

200.4

187.7

runs.

OF

U.

4

•♦

Total

—

FEDERAL

-

,

:

$267,274

$302,275

SAVINGS

$267,922

...

85.114

77,580

79,345

205,556

198,182

253,110

1 *;n

-

Companies.!——;—

67.915

61,581

176,437

institutions..;
,

:

231

'

CORPORATION

—

•

235

■?

143

(000's omitted):

Associations—1

lending

♦Revised figure,

300

NON-FARM

Savings Banter

Miscellaneous
'

S.

IN

companies

Individuals
,

273

264

231

INSURANCE

Trust

241

258

of December

and

197

.245

FINANCING

LOAN

-—Month

213.5

198.4

Feb. 22

crude

160.3

203.7

Feb. 22

,

300

330
275

218

Poultry and eggs

159.0

152.2

^eb.,22

337,000 barrels of foreign

248

315

—

142.2

Mutual

skins.

257

264

•

products

Feb. 22

;

295

280

.

animals

•

.Feb. 22

—

Feb. 22




193

...

Feb. 22

——

—.

261

,—

Dairy

159.9

169.6

'

I Includes

187

hay

189

—.—

—

figure.

and

'

.Feb. 22
—

———.

and

-•Revised

251

173

•_«

—

grain

Truck

158.5

Feb. 22

.',

\

——

232

INDEX

Dairy products
—L____....
Poultry and eggs—————.—.....
Seasonally adjusted—

Banks

—

279

238

221

—

AGRICUL¬

crops—..'——...
Oil-bearing
crops
i.

436,430

.Feb. 22
;

-ii

,

268

233

OF

.....

Feb. 22

Special indexes—

258

FARMERS

DEPT.

Truck

v

'

Fuel and lighting materials—
Metals and metal products—-——
Building materials—————_

222,255

grain

Meat

.Feb. 22

farm and foods-

$63,062

250,591

174

BY

Cotton

LABOR

;—,—

73.9'i.

$170,896

218,073

Z >/./-.-Z

;—

—

66,090,349

136,232,016

73.0'/*

$120,973

products

Livestock

141.5

67,048,278
131,306,126

72.9'/*

issues

Fruit

6
140.1

67,478,248

collateral..

other

Tobacco

171,191

86

,

Govt,

S.

623,307

131,896,587
i.

Crops

160.330

175.628

Z

U.

587,310

15:

farm

Feed

\

shares...——

56,409
415,294

573,205

balances-

351,963

Unadjusted—

ASSOCIATION:

140.1

$568,61*3

52,218

347,492

S

1909-July, 1911—100—As of

Feed

.Feb. 25

$551,440

55,882
U.

in

bonds

on

S.

Food

192(5-

$537,264

1.355

accounts—

12-31-24—100—..

RECEIVED

PRICES

190.1

217.9

150.5

—•

1.210

$1,285
v

211.1

190.1

—•

♦1.286

'

217.4

INDEX

♦1.457

1.296

balances.

credit

iree

229.1

price

debit

banks

in

191.6

PRICE

♦$1,376

1.463

customers

167.2

________

$1,308

__

margin

net

to

237.0

..Feb. 19

40.9
40.0

:

-

•.

234.1

-Feb. 19

40,5

♦40.8
♦39.3

_

-

goods

202.5

142.9

48.45

STOCK EXCHANGE—As of Jan. 31

firms

227.0

162.3

.Feb. 26

55.46

40.5

cf customers'

Total
219.7

143.3

♦40.0

'f '

omitted):

216.7

142.7

$52.07

,'

♦59.40

♦50.51

38.6

goods

manufacturing
goods

Member

Fuels

—

413.4

ASSOCIATION

308.8

59.26

49.98

39.6

—

earnings—

(000's

220.2

products

♦$55.10

OF

______ji

manufacturing

Nondurable

3.01

2.79

All

GROUPS—1935-39— 100:

All commodities other than

233

Hours—

NEW

products_

I)EPT

goods

Nondurable

'SERIES^U.*/•;."';

S.

goods

Durable

v

205

236

January:

manufacturing

Durable

2.91

2.98

•

215

HOURS—WEEKLY

ESTIMATE —U.
Month

—

Nondurable

2.84

2.79

2.80

PRICES 'NEW

211

201

31

105.52

2.38

3.47

commodities-

of Jan.

as

♦193

247

$54.77

110.52
103.64

♦197

414

228

112.19

422

195
243

unadjusted

105.17

3.26

1926==?10©:

39

January:
unadjusted—

112.19

3.06

REPORTER

4f4

of

104.83

2.71

„

383

(average daily), seasonally adjusted
Stocks, unadjusted as of Jan. 31—

2.80

.

- PAINT." AND • DRUG
AVERAiGE1—100

10,802.000

376

„

FED¬

Sales

3.01

PAPERBOARD

21,450,000

8,544,000

Earnings—
.

BY

23,786,000

20,776,000

8,425,000

FEDERAL

Y.

N.

113.12

23,751,000

20,927,000

place, Jan.

DISTRICT,

BANK

23,754,000

-—

omitted), Jan.—

SALES—SECOND

AVERAGE—i00—Month

AVERAGES:

Aaa

FERTILIZER

;

31—

Jan.

of

as

Jan.

31—

Active spindle hours per spindle in

LABOR

:

$290,000

BALES—

100.72

113.50

Grains

$269,000

COM¬

104.66

Livestock

$12,965,000

1,627,055

117.20

108.52

„

711,000

$31,731,000

YORK—

month
of January
establishment as of

101.32

117.00

,

924,000

$268,000

—

112.000

Textile

820,000

1,174,000

„

8,213,189

118.80

-Farm

2,396,000

thousands)

—

RUNNING

—

ERAL

Baa

All

2,837,000

1,892,000

31

117.00

'•

1,705,000

4,247.000

public

AVERAGES:

Aaa

afOLESALE

$6,892,000

2,184,000

...

Spinning spindles in place on Jan. 31
Spinning spindles active on Jan. 31

14.800c-

112.93

-

$21,980,000

OUTSTANDING—FED¬

(in

LI.NTERS

RESERVE

ID,

356

..

.

_

BANK

31

consuming

COTTON

15.000c

21.300c

101.61

NATIONAL

531

$8,625,000

....

_

liabilities.

PAPER

DEPARTMENT

INDEX

29

566

108

storage as of Jan. 31
Linters—Consumed month of January
I11 consuming establishments as of Jan. 31

94.000c

17.500c

ITY

36

_

*

23.200c

21.500c

*

23

41

_

_

..

—

January

Cotton
■

23.200c

21.300c

NATIONAL

153

64

4,841,000

_

_

..

service

In

$40.00

23.425c

Aa

217

$19,159,000

_

liabilities

In

$40.37

$40.58

103.000c

BOND

43

267

.

Lint—Consumed

3.27585c

^

'7,.
23.206c

MOODY'S

59

2,627,000

_

_

liabilities

RESERVE

of

As

QUOTATIONS):

copper—

BOND

155

53

_

.

In

.Feb. 22

MOODY'S

number.

liabilities

MERCE

3.75628c

$46.74

Electrolytic

129

...

...

liabilities

Total

5,559,207

COMPOSITE PRICES:

PRICES

44,144,030
242,369,218

INSTITUTE:

3.75628c

METAL

$286,513,248

46,214,077

-

_

liabilities

COTTON
AGE

938,448

5 693,485

229,326,357

...

service

COMMERCIAL

IRON

$275,540,434

10

65 ,176,659'

•

76

number

Wholesale
228

180

FAILURES

59,809,331

BRADSTREET

&

_

number

Commercial

Electric

6,436,683

196,738

812,073

64,741,267
_

number

Commercial

SYS

AVERAGE=10I)

ELECTRIC

50 506,031

14,371,187

number

Construction

EDISON

33,366,499

58

157,748,529

.

City.

of January:
number

Manufacturing
STORE

..

_

York

FAILURES—DUN

Construction

12,900,000

.Feb. 19
.Feb. 19

TEM—1935-39

__

„

New

INC.—Month

MINES):
.Feb. 19

DEPARTMENT

—

City

of

Wholesale

(U.

—

;

;

Manufacturing
COAL OUTPUT

36

77,846,990

79,602.00C

ZZZ—ZZZZZZ—Feb.

48,137,000
46,585,000

New

$128,741,000

24

iFeb.

and

$75,622,000

Z-ZZPeb!

;

construction

State

;

Central

Total .United

S.

construction

36, 557,830

48,167,799

35,898,427

__

NEWS-

RECORD:
Total

Private

$22, 631,977

21,478,565

4,077,857

!

Central

Pacific

CONSTRUCTION

$14,063,380

CITIES—Month

Atlantic

Mountain

ENGINEERING

$262,031,000

&

^

Atlantic

East

freight loaded (number of cars).
Revenue freight received from connections
(number of cars).

$258,776,000

37,346,113

DUN

—

,

CIVIL

$262,487,000

$222,489,796

INC.—215

England

Middle

RAILROADS:

Revenue

12,537,000

of

58,574,000

VALUATION

12,465,000

between

——

PERMIT

1,450,000

13,093,000

10,110,942

;

15,657,000

529,000

30.713.329

shipped

11,081,000

11,474,000

9,199,006

South
OF

and

53,198,000

9,567,000

15.833,000

76,958,642
21,146,483

stored

56,633,000

9,661,000

countries — ————■

BUILDING

$168,108,000

15,832,000

—:
__

goods

Ago

$163,749,000

56,568,000

——

credits

exchange

Based

Year

Month

56,238,003

————

shipments_

Dollar

Previous

$155,859,000

warehouse

15,807,00C

2,189,000

Feb. 19

IZ_ZZZZZZZZ"Feb!

'

5,342,325

5,418,950
5,556,000

5,330.050

5,361,100
115,322,000

__Feb. 19

.

fuel oil output (bbls.)_^_
iFeb. 19
Residual fuel oil output (bbls.)
Feb. 19
Stocks at refineries, at bulk
terminals, in transit and in pipe lines—
Finished and unfinished
gasoline (bbls.) at
Feb. 19
Kerosene (bbls.) at
Feb. 19
Gas oil and distillate fuel oil
(bbls.) at
Feb. 19
Residual luel oil (bbls.) at—
Feb! 19

ASSOCIATION

Latest
Month

;

—

Exports

OUT¬
BANK

RESERVE

January 31:

Domestic
Feb. 19

—,

output

ACCEPTANCES

YORK—As of

NEW

Imports

1,705,10C

1,860,100

1,849,000

DOLLAR

STANDING—FEDERAL
OF

Domestic

output—daily average (bbls. of 42 gallons each)
runs to
stills—daily average (bbls.)

Gasoline

1,852,700

6

BANKERS

94.6

100.9

100.3

100.5

Ago

Ago

INSTITUTE:

oil

Crude

fi

Week

.

Year

Month

Previous

Latest
Week

to—

ingots and castings

AMERICAN

INSTITUTE:

.

...

176,000

165,973

135,789

132,680

■i144,342

$938,938

$919,631

$1,006,625

'
—

38

(994)

THE

COMMERCIAL

&

Objects to Spahr's Criticism of Gold Producers
(Continued from
this

true, the government in¬

was

sisted

that

the

business at

packers

must

loss if necessary. The

a

the

and

people in this country
placed a higher price on

many

packers refused, there

nave

The

gold and are willing to pay that
price in dollars. Gold producers,

was a suit
and the government lost the case.

Court

ruled

that where

the

government is the buyer it cannot

inerefore,

iix the price either by act of Con¬

rights

to

gress or bureaucratic decree.

public

demand

Court

The

that

held

demanding the
meat at the OPA price amounted
to the taking of private property
by

the

government,

denied

the

tutional

confronts

where

thereby
consti¬

right of freedom of sale.

We have here the
that

and
their

packers

the

compel

the

gold

producer,
regulations

Treasury

him

to

situation

same

in

turn

his

the

seek

only

and

satisfy

this

open

free

gold

in

an

which

government's

of gold.

their

free to

it

it

it

no

of

gold

producers

in

law.

contention

your

our

that the Treasury regulations

moderate

dustry

will

.

stride

have

toward

made

control

great

a

its

of

own

affairs.
We

not concerned here with

are

our

monetary pol¬

icy.

Congress has
price of $35 per

purchase

of

livered to

else.

set

for the

ounce

foreign gold de¬
If foreigners do not

$35

we

their

take

can

fit to

seen

all

us.

the

want

them

pay

gold

they

somewhere

The

Treasury does not deny
them the right of a free market,
but when we as producers are
compelled to turn in any part of

private

our

when

gold

take

and

$35,

could get a higher

we

price
for it elsewhere, it is not the act

of

a

good government to maintain

such

a

man

who sticks

and

supply of newly mined
gold in this country can upset it,
if placed in private
hands, or is
it merely that gold producers are

swindled, and that

ernment must

the wisdom of

a

national

to be

rule, but that of

"give

says

This

a

up

conduct

doned

highway¬
gun in our ribs
a

to

deal with

basis

than

our gov¬
us

that

upon

all

of

other business? Otherwise it would

that in

seem

rights

commenting
gold miners in

of

the

on

future

remarks, you should deal with the
facts and realities of the situation
and hot express immature theories.
It also seems, Dr. Spahr, that

ability

your

as

economist

an

is

rather limited if you can think of
no
better course
for
the
gold

miner than to close down.

Almost

anybody could suggest that. If we
apply your thinking to all other

industry

and

merely
eliminate
them because they ask for their
rights to be respected, we come
rather

close

to

the

methods

of

Russia.

else."

or

seems

different

a

be

If this is the best the economists

con¬

and

applauded by you in
disregard of our Con¬
stitutional" rights. It should occur
complete

do, the world would certainly

can

producers

there

rights.

gold
not

paid
the

that

further violation

a

by

price

present

for

the government

price

was

ferent

is

The

fixed

by

law,

is

for

price in dollars of dif¬

a

purchasing

gold producer is

The

power.

now

compelled to

accept a different dollar.
If it

their

fully

are

duties

of

conscious

good

of

dustry,

Congress

through

us,
the shock of

provide,

can

the means of easing
readjusting the cur¬

rency values of the world.

These

cannot be divorced from some

gold.

that the price to be paid to gold
producers was to be $35 an ounce,

public demand for gold, and
price the public will pay for
it, will be a safety zone to indi¬

and

cate

if

make

Congress

such

in

was

a

had

power

law, then that law
contract with the

essence a

industry. That law ruled
purchasers
vate

and

industry

to

out other

compelled

to

sell

its

pri¬
private
a

property only to the government,
thus
the
$35
was
an
implied
promise and pledge of value at
that time and

having assumed the

the

would

say

If

that

us

by

us

was

at

gold, but

least

$70

they

an

owe

ounce

for

the Treasury Depart¬
ment
is now
administering the
Gold Act the industry is only al¬
as

lowed

to

$17

ounce.

are

an

receive

value

of

about

And remember, we

not allowed to seek other

kets and sell

our

mar¬

product to higher

bidders.
The

gold mining industry has
thus been picked out as the sole
victim

of

a

particularly vicious
swindle, perpetrated upon it under
the power and majesty of the gov¬
ernment which controls
and

presumably stands

acle

of

our

on

money

the pin-

integrity.

.

have

failed

to

fight

(Special

by

is

Cooney

The

Financial

Chronicle)

MASS.—William

has

become

J.

associated

with Proctor^ Cook &
Co., 35 Con¬

Street, members of the New

gress

York

Boston

and

changes.

Mr.

Stock

Cooney

was

Ex¬

for¬

merly with Paine, Webber, Jack¬
son

&

&

Curtis, and Whiting, Weeks

Stubbs.

manager




a

the

and

re¬

financial

being

near

leader

of

single
he

the

America

A

man.

delivers

few

a

the

address

into the

addressed

his

to

which,

he

to

friends.

To

Murray Can take
economic
springboard
jump
backward
from
the
other end, spraying dubious facts
and figures, and he hits the front
page or the general news section.

the

Chamber

In

the

past

of the bond

he

was

department

Soucy, Swartswelter & Co. in

Here

is

one

another

in

of

those

the front pages with
fectly political economic

of

billion

$800

an

(there
that.

to

for

are

a

lot

of

namely

into

propaganda

frighten the
controls.

to

government

most

of

have

you

swered

Keyserling. But how
people saw these analyses
with

pared

those

an¬

many
com¬

who

read

Keyserling?
Let's

take

couple of
you take
The

quick

a

examples

more
over

peep

the

at

a

before

bombardment.

greatest

Attorney General
since Biddle, Mr. Clark, has made
two
speeches recently charging
industry with trying to create a
depression. Mr. Emil Rieve, Pres¬
ident of the CIO Textile Workers

Union,
ernment
course,

A

that

announces

employment

is

worse

statistics

national

than

gov¬

show—and,

of

wants government action.

purely political approach with
indication of where Mr. Rieve

gets statistics that

are

better than

government.

or

sus¬

to

The

Financial

Chronicle)

PORTLAND, MAINE—Philip J.
Hansen, Jr., is now with Nathan
C.

Fay & Co., 208 Middle Street.

Mr.

Hansen

was

previously with

Clyde F. Frost & Co.

time two other

same

statements emanated.

Lewis
also

Brown

spoke

pression.
Reader

of

on

I

In one,

Mr.

Johns-Manville

the

think

danger of de¬
Mr.

Average

might

accept him as at
least comparable to Mr. Rieve as
an

authority. The NAM issued

statement

assertion

a

labeling as a "hoax" the
industry rhakes a

that

our

press

great¬

to

man

baseball

a

economics

and

an

un¬

intertwined

are

would add

To these I

more

one

general premise.- There is no lack
of belief on the part of publishers
that

people

increasingly in¬

are

economic

terested in financial and

after

the front
would
show
that
story
story is devoted to matters

that

15

A

matters.'
pages

of

survey

years
ago would have
considered Chinese to the

been

front page reader.
Also,
the columns emanat¬

average

half

about

ing from Washington are no dif¬
ferent from those you

write, using
But

these

often

and

authored

are

at

men

governmental
affairs
but'
you would completely be¬

whom

fuddle

in

discussion

intensive

an

Inter¬

for

Bank

finance—the

of

by

political

interpreting

national Settlements, for instance.
The only conclusion with which
I

built

having

left,

am

tionalized

this

is

argument,

that

ra¬
you

gentlemen have been departmen¬
talized

away from your natural,
modern-day audience.
In other words, the audience of

people interested in economic af¬
fairs is no longer your, compact
business-finance

is

It

group.

Business,

finance, economics is
everybody's business. Your gar¬
age mechanic or housewife is de¬
bating
the
subject
over
the
monirev-wrench

the

or

Politics has become

tea

cup.

cost of op¬

a

existence

as

a

;

free

peo¬

the burden of economic

The

common

for

vote

of

our

without

penditure

ex¬

thinking
that they are paying for it.
Now I
have
been
thoroughly
and completely negative.
I can't
even

that I know all of
the answers. I am not contending
that business and industry itself
has
not
failed
lamentably
to
suggest to

.you

translate itself

even

to those who

should be staunch allies, the em¬

ployees.
Neither
the

am

I

contending

that

should become a
business and in¬
dustry, instead of being an ob¬
jective critic and teacher, what¬
ever
the issue.
They should not
newspapers

mouthpiece

for

thesis that business

accept

a

do

wrong.

no

can

contend

(2)

You
more

objective
for

group

gentlemen

probably

about the system in an
way

than

you are

any
other
immersed in its

vitals every day.

There are,
places where

(4)

difference?),

It

appears

as

a

your

are
on

more

the

whole readership has

your

it.

at

one

It may

shot

a

tear the guts out of
wrong

that

Perhaps

you

so

disturbed that you

write

a

terrific

piece the next day an¬
alyzing its fallacies—-for me and
my clients to read and applaud.
is

It

ironic

an

fact,

however,

that just as Mr, Sloan, the CED,
NAM or John Hanes of the Tax
Foundation endeavor to write for

public consumption, most of
columns

are

written

so

reader

your

that

the

comprehend.
You, too, assume you are talking
to him and not to Kuhn, Loeb.
What do I propose?
average

I

went to

can

Paul Garrett of Gen¬

eral

Motors, one of your former
colleagues, for consultation as to
whether I dared
far

as

as

I have

put my neck out

tonight in

sacred

a

field.

Maybe Paul won't appreci¬
my
laying his neck on the

chopping

same

up

block.

he

But

conclusion,

my

say¬

ing:

"Today
field

is

financial

the

broader

be

commentator

a

with

the

field

and

stock

He should

and

analyst

an

entire
as

economy for his
such he deserves a

better

platform
page."

cial

writer's

the

than

and investment market.

than

the

finan¬

Carrying through that summa¬
tion, I suggest for consideration
by

newspaper

management—

(1) That the financial and busi¬

interpretive columns be ad¬
to the public and printed
regularly on Page 2 or 3.
ness

dressed

son

between

nancial
cial

rule, just
stories hit

page

on

in the general news pages and

(2) That there be

(3) As a result you
intelligently
articulate
subject.
two

business.
or

summed

that the press,

in¬
advertently through departmen¬
talized traditions, has given those
who attack the capitalistic system
and industry access to the public
mind that is largely denied pro¬
ponents of the system.
Let's take some premises lead¬
ing to a conclusion:
(1) The newspapers as a whole
believe in the capitalistic system.
They carry the torch for it, but
not in the right places.
know

the

economics,
probably do not cover the
story, although it may be pure

ate

Unwitting Sabotage of Capitalism
I do

(what's

labor leader talks

a

industry, it may be
knowledg e
you ooze outrage.
people will are so

governmental

any

or

en¬

lightenment, who will? Obviously,
we
are
not reaching the masses.
millions

derson

you

And if the newspapers don't as¬
sume

j that

You

similar

think

I

our

Proof?

Patently,

the free

ple.

depres- I

Keyserling's Nonsense

his

6 or 12.

America.

learning. A

goes

commerce

with

per¬

sion.

pages 2,

through

Today,

forecastj

is not enacted

program

face

will

derstanding of business, industry
and

Senate Committee that if

a

Truman's
we

a

year

a

find

writer

interpretative I erations for
any commercial es¬
columns. You can learn to play \
tablishment. It is woven into our
golf through instructional columns.!
daily lives. And you, the group
The newspapers teach you how
presumably trained through study
to wash the baby, take care of r
and
experience to. interpret fi¬
your health, not to eat peas with
| nance, profit, depression dangers
a knife, and even advise on
your j
in terms that people can under¬
love life. Winchell will tell you
stand, are carefully shielded from
when you are going to become a
your audience, as shown by read¬
father and if the time is ripe for
ership surveys.
buying stocks.
If a politician, or a Leon Henr

Washington, Leon Keyserling,

hit

never

change

minds

great

sins

can continue to know every
quirk of the game and every rule

On February

us.

his

knows

game

example

more

slightly closer to
8

he

America, have been

who

pages.

those of the

Nathan Fay Adds
(Special

of

business

and

quack will
insane state¬

make

to

est institution of

preceding day

financial

com¬

reach

where the

afraid

The newspapers,

would, most likely, have arrived
the

in
we

tively, "That ain't so."

had forecast full employment for
three years following the war it
on

his

position

because

Wallace, Robert Nathan and the
CIO, predicting 8,000,000 unem¬
ployed within a year after the
end of the war. It was equal in
news
value
to a
good triangle
divorce involving a model and a
the

of

quickly find him out; that mil¬
lions of people will say, instinc¬

You
will
recall
that
famous
document sprung, full-blown from
the
statistical
tables
of
Henry

if

il¬

ments in his quest for a headline

same

6n

we

in

financial

a

on

skillful

be

and

But

off

does

stuff

subject matter as a yardstick.

a

financial

Phillip

the

Series

permitted to speculate
modity futures? How do

it goes.

Yet

World's

to

they

own
personal ex¬
perience that the government be

of

hopes,

the

edi¬

used

am posing is how
people of economic

our

breadth

is
the people—not just

pages

I

when

self-seeking politician
we get across
to them knowledge enough so they
can
comprehend
the
irony
of
Senator Elmer S. (S. for Specula¬
tor) Thomas proposing out of the

year

preparation

long

tells them? How do

speech. We know
the thought, time and effort that
gone

Richmond.

times

that' few

guess

what every

a

has

re¬

sports

was

the financial pages, or occasion¬

ally page one. There is no inter¬
mediate point. I would hazard the

literacy—how do you help? How
do we stop them from
believing

other

any

times

I

the

I

commerce.

and

even

cure

industrial

as

in

loud

question I

once

I suppose Alfred P. Sloan comes
as

am

of my pages for the front.
But all of that is incidental. The

and

pages

of

when

down

took

com¬

again their mem¬
bership constituency will advise
them, "You are talking only to
yourselves."

no

for

back.

various agreements

the

on

know that

About the

evidently

by their theory of money, to

set

hopefully through
They find their Holy

papers.

nation

at

confusion.
government

the

is

so

dently intended to perpetuate this

bound

to

BOSTON,

Your remarks, Dr. Spahr, are evi¬

Our

tor

bawl

looks

reasons,

SEARS,

William J. Cooney Now
With Proctor, Cook & Co.

the hands of their government that

they

HARRY

Boston.

Gold
producers have been
bewildered by this treatment

mittee

and

as

government

our

now

a

$35 today.
pledge of value to

date

answers

President, Calaveras Central
Gold Mining Co., Ltd.

misunderstand that I

center

nerve

Finally, the baby is born,
lease

devaluation

Very truly yours,

Don't

have

brains

some

tions under nice headlines.

criticizing financial pages. As I
said, I think they are the

They might

might just
our own
say Keyserling was talking non¬
currency.
to
scare
Congress.
You
There is a strong flavor in your sense
langague which harks back to the might say he was stupidly talk¬
You
divine right of kings. It has been ing*- us into a depression;
my
view that we tossed that might even be nasty enough to
suggest
that
the
same
people
theory overboard many years ago.
along with the tea, in Boston har¬ helped Keyserling who dreamed
up that 8,000,000 unemployed —
bor.

that the $35 of
stretch of imag¬

1934 could by any
ination be construed

further

steps may be made with

responsibility, > as to value, the
government should make it good.
Who

what

in¬

Talking to Themselves

as¬

The level of

to

15% return on its investment, ob¬
viously addressing itself to the
public for the information was in¬
consequential
to
the
financial
public. Mr. Brown and NAM hit
the financial pages; Mr. Clark and
Mr. Rieve the general news sec¬

member

before

the

sentences

great
from my profession.'"

citizenship.

In protecting the rights of our in¬

sociation with

the intent of Congress

was

in

banker.

theories.
But

call

even

Commerce

"

some

and

semantics.

over

have

Dr. Spahr, that our Con¬
stitution is an inherent part of our
economy and it is your public duty
to
only advocate constitutional

of

labor

be better off without

them.^Let's
straight " American
thinking and talking for a change.
A free market for newly mined
gold can have deeper significance
than just the profit motive. Gold

to you,

for

some

that they are simple enough
the -man on the street. They

Writ

that

monetary policy is so
precariously
balanced
that
the

are

sure

or

words

over

and

price fixed by the govern¬
ment, so therefore if we establish
invalid when applied to all newly
mined gold, the gold mining in¬

committee,
with the idea that it might regis¬
ter with the public its concept of
the sound economic approach to
some current problem.
They argue

gold, it will be

buy it, but
longer be allowed to

from

defiance

Is

of

part

no

monetary stock

new

bid for

it should
take

is

President,

If the Treasury wishes to

purchase this

gold

at the

now

meet

market, selling only their newly
mined

(Continued from page 7)

$35

gold price, but the
peoples of the rest of the world

do

Newspapers and Economic Illiteracy

20)

page

tain

Thursday, March 3, 1949

CHRONICLE

FINANCIAL

one

desks and

editor
column

tered

news

be

of

through

closer liai¬

a

desks
that

allocated
space

the

a

and

fi¬

the finan¬
at

least

day

scat¬

general

news

Volume 169

Number 4782

THE

section," exclusive of his own col¬
umn to put in neWs stories which

hurt

he

deems
most
constructive
whether it be Mr. Sloan's speech,

if

the NAM statement which 1 have
used as my guinea
pig tonight, or

COMMERCIAL

what

—

human

a

with

interest

some

I

phase of

contend

readers

story

mat

•

dealing

commerce.

general

your

.

entitled to regular ex¬

are

lo what industry is doing
saying just as much as to

ship.'

and

CiO

tne

is

doing,

without
death by seeing a

being

scared to
lot of statistics
right alongside
the things in whicn he

of

might

be

interested.
^

This

ing

be done without hurt¬

can

financial

your

reader¬

page

it

would

not

even

of your

regular patrons
they have to turn through the

comics

the sports pages to find

or

they want to know; to find
your column.
Maybe you would
write two columns a day—one for
finance and one for general read¬
ership. And how, do you like hat
for making you work?
M
,

posure

what

Maybe

some

is

This
I

radical-

no

merely proposing

am

and

modern

more

suggestion.
a changed
perspective

toward industrial news.

I know of

will never happily
aceep"t-'unfair labor demands and

simple—act

Railroads Need
.(Continued from

>

,

and

public opinion, or a depression,
both, makes an issue of it.
.Regarding Taxes: The railroads
believe that fair tax payments,

an

long-range future of American
Regulations and

uncon¬

expenses

affect

every

thetic

more

action

and

a

sympa¬

appraisal by all concerned

phase of railroading—even to the

—the

status

the government, the shippers and
the public.
Such a plan can be

and

strength

petition.
..

In this

liest

of

our

com¬

■

respect,

forms

of

the cost¬
competition the
one of

railroads,

the

employees,

"Gypsy"

truck

operator. These operators have no
substantial investment in equip¬
ment.

They have

personal prob¬

no

lems—no

overtime, no vacations,
interruptions due to labor prob¬
lems, and no paid holidays. They

no

have

complicated

no

problems,

insurance

unemployment com¬
pensation and social security taxes,
no
employee benefits. They run
no

excessive

hours

with

loads, and apply
for their
Motor

fixed charges

no

vices

sei

excessive

The Bureau of

Carriers,

are

idle

dream.

It
can
be
brought
by ordinary common sense*
teamwork, and the- courage to¬
ri ght a fight!

about

to

regulating

inequitable
tions,

government
regula¬
in terms of return on

mean

railroad

capital investment
For
example, in 1948, with the largest
peacetime gross revenue in the

history of the Katy Railroad—
$83,293,000—the Katy had a net
.railway operating income equiv¬
alent

to

3.7%

its

on

vestment—far

short

capital
of

in¬

what

generally considered to be

a

is

fair

No

shipper

can

lower

rates

desire

only

it

way

American

more

than

The^

we.

enjoy

an

industry

earning

.

would allow

tradition

of

,

&

Katy nor any otherrailroad is responsible for present
levels.

rate

relation

basis,
But

Rates

to

in

as

•

costs

simple

too

are

that

reason

control them all

high*

have

can't

we

Those costs fixed

at the discretion of railroad

agement

been

man¬

well

so

re¬

duced
that "Fortune"
magazine
recently said editorially, "The per¬

formance

is

marked"

should
that

remarkable

(meaning

There

that

but

un¬

"unnoticed").

vantage of

to

technological im¬

too long to

has

It

capitalize

Diesel

of

taken

much

the

econ¬

locomotive

oper¬

on

ations,

because of the large in¬
vestment requirements. We must
be able to adapt ourselves to new
tools and
new
ideas,
and who
but

knows

the

future

motive

of

power

into

develop

may

a

gas-tUrbine,

or even jet or atomic
Experimentation is being

energy.

with

made

types of rolling
'equipment—such as the Spanishnew

type "Talgo" train of the Amer¬
ican

Car

and

Co.,

Foundry

the

efficient
should

operations, the railroads
in

be

position to take ad¬
vantage of them. All of them will,
however, require great outlays of
cash
?

and

The

no

and

much

nothing

can

matters.
state

has

too-

been

taken,

But

generally,

the

Commerce

that

current

Inter¬

Commission

perimentation with

one,

re¬

new

"bold

ex¬

methods"

possible cure for some of the
problems
confronting
all
rail¬
a

partial

Goal—Cheaper and

Better Transportation

that the pursuance of a
plan, aimed for a fair and

agree

equitable transportation policy in




other

Ulesels ana

results.^

As

I

pointed out,
made with

waterways
of

out

labor itself in the

Only those paid by

which

tax

provided
for the use of
are

money

other forms of

commercial trans¬

portation with which the self-sup¬
porting railroads must compete
Operating Costs:

There

are

that could be cut, if the
railroads
had
the
money
with
many

which

to

buy

other

any

what

business

The railroads

ulated " that

is

in
saving

called

"cost

and lower rates will fol¬

low.

cutting

cosl

culun&

closely

are so

a

reg¬

difference

be¬

outgo is
family living

so
up

whole

paycheck every week,
nothing in a savings account

with
for

an

important,

gentle¬
well know, that money in¬

men

should

vested

as

you

receive

fair

a

and

return.

A Minimum

6% Return

on

fairness

the

to

investors

in

fairness to the pub¬

lic which looks to the railroads for

its

basic

the

transportation

railroads should

the 6%

per annum

regarded

return

service—
at least

earn

which is gen¬
a
reasonable

investment.

on

reached

as

that

It

figure only

once

in

The railroads do not want gov¬
subsidies
they
are
proud of their accomplishments as

self-supporting industry.
They
only want relief from subsidized
competition; from unreasonable,
so-called

"featherbedding"

We must have the sup¬

labor

port of the public in our effort to
provide
the
kind
of
railroad
transportation to which the public
is entitled—and demands.
is

problem which can be
shipper, the trav¬

a

eler— the

democratic

form

of

government, the people ultimately
get what they want.
When they
find

out

sound
an

what

and

economically
all, they exert

irresistible force called Public

Opinion.
Their elected
pointed representatives
respond.

The

States

and
are

people

can

of

have

ap¬

quick
the

lower

freight rates when and if they de¬
cide to have them.

Here is how:

Regarding Labor:
do

not

woman

begrudge
a

fair wage.

The railroads
any

man

or

But railroad

the

on

street

—

realizes that its correction will be
direct benefit to him—in lower

transportation costs which will be
reflected

in

food

every

is

fair to

man

and

The

almost every item

of

article he buys.

margin between costs and

income of the railroads is

of

It is easy to "get off the beam"
place too much attention on

and

lowness

mere

and

of

found

price.

boom

post-war

The

war

made

pro¬

changes in the middle class

markets.

Large segments of the
population moved up into more
comfortable income brackets. This
middle

class

is

market

not

taste

of the better

They

will

more

effective

their

buy

needs

such

a

things of life.
if

more

and

find

we

methods

to

desires.

meet

From

class

diagnosis of the middle
market, if follows that the

most

productive price ranges will

a

be found

somewhere off the pre¬

vailing higher

ranges

where

above

the

ranges.

We will find them by re¬

and

some¬

lowest

price
'

•

so

thin

"fair

Exact Science

an

This matter-of correct pricing is
an
exact science. The mer¬

not

chandisers who know most about
it do not write books

the why

on

when, what and how of pricing
They are too busy practicing the
art. They are not afraid to take
"calculated risks" and experiment
with

new

Without

prices to build volume

specific recognition
attempted calculation of direct

or

and

any

indirect

successful

expenses,

merchants often cut prices to en¬

sales

larger

volume

contributions

costs.

Other

obtain

and

to

overhead

things

being equal,
always pre¬
fers to sell 1,000 items at an 8c
margin instead of 500 items at a
12c margin. In manufacturing we
the skilled merchant

often

chained

costs that have

to

deeply
imbedded in our price thinking
that we are unwilling to attempt
any
venture pricing. But it is
venture pricing that always opens
up

markets

new

way

to

We

have

and

so

that

but

less keen

as

limited

very

knowledge of the psychology of
pricing. The late Paul Cherington
once

is

remarked that the consumer

generally

central

by "one
always
present,
'good trade'" and

a

he added that ".

.

.

superimposed
all
the
chological influences, urges,

psy¬
com¬

plexes, inhibitions and habits that
account for human behavior."!.We
know that for any

given range of

established

prices, there are al¬
certain psychological "break¬
ing points" at which slightly lower
prices will produce greatly in¬

ways

creased sales. If merchandise fails

sary,

and

clearance

a

is

neces¬

advertised, will not
goods. It takes a dra¬
matic
price
reduction
in
the
neighborhood of 20% or more to
the

attract interest. Customers like to

have

a

minimum

But

solve

the

problem alone—it must

have

the

assistance

of

men

like

yourselves, who mold public opin¬

ion;
of

they must have

an

enlightened

ally, and

some

the

public

support
gener¬

quick action.

in

are

prices they

quality often lingers when the
price is forgotten." When a new
private brand is introduced, it
be

cannot

priced too low in rela¬

tion to the established
after

time

a

other
and

it

brand; but
priced against
private brands

is

competing
not

brand.

against

These

the

established

merely a few of
the many psychological aspects of
productive pricing.
Perhaps
general

are

there

is

comment

further

one

the

pricing
question that should be made. The
on

has left us with a vastly ex¬
panded
monetary
supply.
No
problems can be solved by fresh
additions to that supply. As in
the
past,
we
will undoubtedly
war

meet the situation

by growing

up

to the

residual monetary supplies
which we must continue to

with

live.

That

that

will

price

means

expand

structures
domestic

our

and

foreign markets and provide
adequate rewards for increased
productive effort. It not only re¬
quires hard work and straight
tell

but

the

also

new

economic

to

ways

facts

of

life

to

a badly confused and somewhat
bewildered citizenry. There is no

reason

take

believe

in

of

the

intelligent

that

we

stride

any

of

our

corrections

necessary
cesses

to

now

cannot

ex¬

postwar

the

boom.

By

team

work, we
can
meet these problems without too
serious

disturbance

It

omy.

is

task

a

ernment, industry,
plain people have
terest.

The

stakes

of

in

our

econ¬

which

gov¬

labor and the
a

in¬

common

high. They

are

the preservation of the abun¬
dance which the American
system,
are

has

created

and

liberally

so

which

with

we

less

share

fortunate

peoples.

With
(Special

Daugherty, Cole
to

The

Financial

Chronicle)

PORTLAND, ORE.—James L.
Cox, Jr., is- with Daugherty, Cole
& Co., 729 Southwest Alder Street.

Sloan & Wilcox Adds
to

The

Financial

PORTLAND,
staff of

Chronicle)

ORE. —Karl

McAllister has been

Sloan &

D.

added to the

Wilcox, Cascade

Bldg.

McDougal & Co. Formed
(Sneclal

of

three

a

given

type

of

to

The

CHICAGO,
Co.

has

been

Financial

Chronicle)

ILL.—McDougal
formed

with

&

offices

at 208 South La Salle Street. Part¬
are Alfred L. McDougal, Jr.,
Mary G. McDougal and Emily J.
McDougal.
Mr.
McDougal
was

ners

formerly President and Treasurer
of McDougal & Condon, Inc.

U. G. Roman Rejoins
Staff of Adams & Co.

small reduction, however

a

fre¬

memories

to the last

the

(Special

effectively

move

bought

are

their

for low-priced articles that
bought less often. For higherpriced articles, "the memory of

top of this

on

are

sell

in

dominated

idea

namely to get

to

done

product. The
price
must
be

paid

(Special

formal

has

are

the

paves

well-

one

his

the

quently,

sales and profits.

more

ranges

management cannot

of

price

never

as

advertiser

trading"

articles

standard

become

$299.95,

within the range of acceptability.
Customers remember the prices of

to

The

Financial

Chronicle)

CHICAGO, ILL.—U. G. Roman
has

rejoined

West
has

Adams

Adams

&

Street.

Mr.

Co.,

105

Roman

recently been with Francis I.

du Pont & Co.

price

chandise to permit
the
values.
Too

railroad

at

thinking,
Pricing Not

that

their ability to continue as
private enterprises is in jeopardy.

item

known

only

larger than it was before
war, but it is likely to hold
perhaps improve its position.

—

a

It

result

tive design and appeal.

has

the past 25 years.

ernment

natural

long period of easy selling and
of the fine arts of crea¬

are

Investment
In

them

make

neglect

large

emergency.

It is

will

the

Millions of customers have had

and

it's like

small

a
our

a

that

This is

an

solved when the

Under

sell.

and

have
heretofore
savings can be
such equipment.

the

income

tween

machinery."
reason,

attributes

all

demands.

for business.

(3)

ucts with the best combination of

much

more

more

properly seasoned, but we
always "season" our prod¬

Tools

cost

omer

is

do not

the

equipment, the Katy and other
rodds^Have shown some amazing

erally

ones.

United

bold

even

the railroads which go to support
the highways, the airports and the

to

roads today.

Ultimate

not

pay

(2) Taxes: Not the fair and im¬

be done about these

port to Congress suggests that the

I

DidM'Cd

its

functional design, or
they over-emphasize the

peated "trial and error."

Cost-Saving

railroads—in

Bring these costs down within

railroads attempt some

as

Regarding

They

long pull.

financing.

position

rates.

scales alone,
but "make work" and other non productive practices that benefit

these

experiments produce op¬
portunities for economy and more

high

(1) Labor: Not

C&O's "Train X," and others—and
if

tax
con¬

and shippers!

sengers

high costs and

are:

new

this

for
the
railroads,
but
more^important to the public, the

three important items

are

contribute

consequently

provements.

the

and

allows

Reasons for High Operating Costs

power-

financial structure

a

today,

which

revenue

business;.

other

any

railroad

for the

have

must

cost-of-production

a

that

constantly;
With'Tfie limited amount of in¬
a
steadily
come lit
could spare for buying

Neither the

flexible enough to take quick ad¬

the

exists

structure

reasonable

railroad

omies

maintaining their rights-ofwhich are paid for with tax
money.
We all know this condi¬

~

be done is in

can

return.

The

Certain forms

way,

tion

good

functional design to the detriment
of other appeals.
We like food

of

long-term results would be better
servieer-r,better
equipment,
and
earnestly' lower.-r^ates for the nation's pas-

prove.

view

air¬

equals unsubsidized basis and the
entire country will benefit. Railfreight rates would ben¬ roadsj' on a fgir-comnetition basis,
efit every business and citizen
of can more-"Than hold their own.
our nation, now and for the
year$, The immediate result would be
ahead, and the possibility is no increased freight and passenger

tions

a

highways,

Lower

improving service at
lowering cost,, as volume- grows,
and performance techniques
img

With

of

or

why:

Interstate Com¬
merce Commission, is now
making
an
investigation of truck opera¬
this form of competition.
You, gentlemen, know what untrollable expenses, along with the

finance construction

to

of the reasons

some

rationale. For instancerthe

some

good merchant would

oddity

tax

present

Pufe competition between
types,'' of transportation on

and here

so-called

or

We

cost.

of the

because

The

the

ated

of

tributed.

dition to exist is not impartial.

railroads face is the owner-oper¬

reduction

always take full advantage

Odd
prices
have
definite
psychological ap¬
peal, but the odd price must have

lack

achieved if it is made known that

ultimate goal is cheaper ahd
better
railroad
transportation—

cost, or with

an

and

only of

actual

do not

to

explainable.

possibilities of color, or we
use it very inexpertly.
Many good
products fail to sell because they

concerted

not

addition

6)

page

easily

impartially distributed, are an ob¬
ligation-of citizenship. I repeatfair
payments,
impartially
dis¬

maintenance

be productive
favorable earn¬

attributes of merchan¬
dise, often with little or no sub¬

non-price
stantial

ing power, but actually of a lower
freight/rate structure. It will take

expenses, and herein lies the som¬
ber note that has a
bearing on

could

39

Pricing Situation

(Continued from

or

structure is unfair!

nation,

lailroaas.

aroused

an

transportation not only fail to
carry their share of the tax bur¬
den, but at the same time are re¬
lieved 'of the cost of
providing

our

the

before

abuses

correct

will

leaders

ports, rivers or canals—subsidiza¬
tion, if you please—then the tax

17)

page

uncontrollable

trollable

labor

enlightened

that

Fair Deal

a

The Retail

payments* and frankly hopes that

structure, as
could do more to curb economic applied to all carriers of trans¬
illiteracy. It would be worth mil¬ portation, is neither fair nor im¬
lions poured into pamphleteering partial. When tax monies in pub¬
by various business organizations. lic coffers, to which the railroads
contribute, are taken from those
single—and

no

(995)

management

coffers

regulations

CHRONICLE

FINANCIAL

&

mer¬

With Lee Higginson

comparison of
many
price
ranges
hinder effective selling.
Differences in price ranges for a

Herkes has become affiliated with

given

Lee

plainly
1

type

of

evident

Cherington,

product
to

Paul

the
T.,

must

be

buyer or

The People's
Wants
and How to Know
Them, page
132. Harper & Brothers, New York, 1935.

(Special

to

The

AURORA.

Financial

ILL.—E

Higginson

Chronicle)
u

g e n e

J.

Corp., 231 South
La
Salle
Street,
Chicago.
Mr.
Herkes was
formerly for many
years
with William H. Flentye
&

Co.

40

COMMERCIAL

THE

(996)

•

Telephone

Engineering

Corp.,

Fairbanks, Alaska
Feb. 18 (letter of notification) 28,000 shares of Class A
common
non
voting stock.
Price, $10 per share. No
underwriter.
Purchase and installation of outside plant
and

Feb.

equipment.

dial telephone

American

Light & Traction Co., Chicago
Jan. 10 United Light & Railways Co.' filed 634,667 shares
of American Light common ($25 par). .Underwriter—
None. Offering—Offered at $12 per share to holders of

"4,;.'

,.•

..

'

,

•

Mining Co.,

(loe)

Dandy

•

construction and

from

its

Colorado Springs,

Colorado

(letter of notification) 8,308,834 shares (Id par)
stock.
Price, 1.5c per share. No underwriter.

18

common

For
•

stock

will

capital
Underwriting—None. Ex¬

Jan.

•

expire March 9.
Black

Lake

Oil

&

Washington,

D. C.
(letter of notification) 39,900 shares of 4% non-

Feb. 21

cumulative

preferred ($1 par), to be sold in units of 100

shares at $100 per unit; and 50,000 jfhares of common to
be sold in units of 500 shares at $500 per unit. No under¬
writer.

To

purchase leases and drill for oil.

Centra]

Feb.

Maine

Power Co.

(3/14)

filed

11

$5,000,000 30-year first and general mort¬
gage bonds, series R. Underwriters—Names to be deter¬
mined through competitive bidding.
Probable bidders:
Halsey, Stuart & Co. Inc.; The First Boston Corp.; Salo¬
Bros. & Hutzler; Kidder, Pea body & Co.; Harriman
Ripley & Co.; Merrill Lynch, Pierce, Fenner & Beane and
White, Weld & Co. (jointly); Shields & Co.; Otis & Co.
Proceeds—To reduce notes payable to The First National
Bank of Boston. Expected about March 14.
mon

•

Chiapas
16

(letter
stock

common

plant

.

notification)

of

Investment Co.,

&

Plantation

Francisco

San

Feb.

Rubber

Price,

(par $5).

shares of class B
No underwriter. To

750

par.

crops.

Cleveland

Feb.

15

Electric

outstanding

basis of

common

share of

one

■

2

filed

$11,000,000

Corp.,"Denver, Colo.
and collateral

trust

15-year sinking fund 4% bonds, due 1964. Under¬
writer—Allen & Co., New York.
Proceeds—To prepay

$7,250,000 of bank loans, to

pay

Assets

to

Administration

and

$1,600,000 due the War
construction

finance

Beane and

White, Weld & Co. (jointly); Lehman Broth¬
Goldman, Sachs & Co. and Union Securities Corp.
(jointly); Salomon Bros. & Hutzler, The First Boston

or

used to finance part of the
program. Bids expected to be opened

about March

be

15.

Connecticut

(3/7)
alternative to issue either 163,133 shares
(no par) common stock at $50 per share or $8,156,650
of 3%
convertible debentures,
due 1959.
Offering—
Stockholders of record Feb. 16 are given the alternative
to subscribe for either, (a) one share of common at $50
per share for each eight shares held or (b) $50 of deben¬
tures at par for each eight shares held.
Rights expire
March
4.
Underwriters—Putnam
&
Co.;
Chas.
W.

Jan. 31 filed

Light & Power Co.

an

Scranton & Co. and Estabrook & Co.

Proceeds—To

be

applied to the payment of $2,570,000 of bank borrowings
and

future

to

construction

Continental

Jan. 28
stock

Engineering Co.

50c).

Price

Dallas

Power

&

•

each five

Under¬

21.

Market
Mar. 3.

Nuggets, Inc., Denver, Colo.

Denver

Feb.

(3/22)

trust

bonds.

bidding. Probable bidders:
Halsey, Stuart & Co. Inc.; Blyth & Co. Inc.; White, Weld
& Co. and Kidder, Peabody & Co. (jointly).
Proceeds
—For construction and to reimburse the company for
mined

competitive

through

(3/10)

Expected about March 22.

(letter of notification) 40,000 shares of capital
Price—$5 per share. No underwriter. For organic

•

Land

notification) $250,000 6% 10-year notes
with income participation (with warrants to purchase 40
shares of common stock and
20 shares of preferred

Feb. 24 (letter of

warrants to purchase 80 shares of common). Under¬
writer—Hugh J. Devlin. For working capital and gen¬

$100)

nancing of residences and dwelling units.
•

Feb.

Legore (Md.) Lime Co.
23 (letter of notification) $150,000 first mortgage
No underwriter.
For plant improvements and

bonds.

liquidation of debts.
•

Gearko

Inc., New York
March, 1 (letter of notification) 20,000 shares of* 6%
cumulative preferred stock (par $5) and 100,000 shares
of common stock (par 10). Underwriter—Gearhart, Kinnard & Otis, Inc.
Offering—To be offered in units of
one

Corp., San Francisco, Calif.
Feb. 18
(letter of notification) 7,500 shares common
stock (par $10), to be sold privately at par to warrant
holders; and 30,000 shares of 6J/2% preferred to be sold
for $10 per share.
Underwriter—A commission will be
paid to Hannaford & Talbot for public sale of 28,400
shares of the

the

preferred and five common shares at $6.25 per unit.
working capital.
Investors

Trust,

Boston, Mass.

Price
—At market.
Underwriter—A. E. Weltner & Co., Inc.,
Kansas City, Mo.
Proceeds—For investment.
100,000 shares of beneficial interest.

18 filed

Empire Mining Co., Searchlight, Nev.
Feb. 21 (letter of notification) 80,000 shares of stock.
Price—500 per share. No underwriter. To instai a re¬
©

Golden

•

Great

Jan. 25 filed 204,000 shares of common
record Feb.

Farm

agreed to purchase

subscription
new

one

by

stock (par $10)j
stockholders of

share for each two'

unsubscribed shares, but have nor

public offering thereof.
Pro¬
increase
Manuel Copper Corp., a subsidiary,

any

ceeds—Provide funds with which company may

Merchants Acceptance Corp.

(3/15)
Feb. 23 filed 40,000 shares (no par) $1.50 convertible
preferred stock.
Underwriter—G. H. Walker & Co,
Proceeds—To expand business.
Minnesota

Power &

(3/7)

Light Co.

filed

28

$4,000,000 first mortgage bonds, due
Underwriters—Names to be determined through

1979.
com¬

petitive bidding.
Probable bidders: Shields & Co.; The
First Boston Corp.; Halsey, Stuart & Co. Inc.; Lehman

Brothers; Kidder, Peabody & Co.; Glore, Forgan & Co.;
Otis & Co. Proceeds—For con¬
struction
or
to
pay
off short-term bank borrowings.
Bids—Bids will be received by the company up to noon

Harriman Ripley & Co.;

(EST) March 7 at 2 Rector Street, New York, for the
purchase from it of $4,000,000 bonds.
,
•

Feb.

deposit with Beech Aircraft Corp.

a

performance of contract and for working
filed

18

due

H. Drew

Ripley & Co., Inc. Proceeds—To
facilities of company's Mobile, Ala., mills.

England Tel. & Telegraph Co. (3/23)
Feb. 18 filed $35,000,000 25-year debentures. Underwrit¬
ers—Names to be determined through competitive bid¬
ding. Probable bidders: Morgan Stanley & Co.; Halsey,
Stuart & Co. Inc. Proceeds—To redeem 011 June 1, 1949,

innovation.

•

*

Feb.

York

New
Feb.

expand

held

filed

11

Power Company,

filed

—Shares

will

March

Interstate Telephone Co., Spokane, Wash.
28 filed 5,000 shares of $5.50 cumulative (no

11.

*

:

|

|
|

|
par)

|

Underwriters—Paine, Webber, Jackson
& Curtis; Stone & Webster Securities Corp. and Pacific
Northwest Co. Proceeds—To pay part of bank loans.

brokers

•

dealers

preferred stock.

Pittsburgh

Chicago

•

Israel-American
New

San* Francisco
1

.

Private Wires to all

-

-

offices

Cleveland
4

y

' -

'

Feb.
stock

None.

18

.

Production

Studios,

Inc.,

York

(letter! of

(par $100).
Purchase

of

shares of capital
share. Underwriting—
motion picture equipment, etc.
notification)

Price—$102

per

2,941

($25

par)

be
10

offered
at

the

to

stockholders

rate

of

one

(3/10)!
stock
Offering

common

share

of

G.P.U.

of

each

10

for

Rights will expire April
Underwriters—A fee is to be paid by G.P.U. to' par¬

cumulative pre-

.

shares

Gas Corp.

ticipating dealers who have been instrumental in obtain-

about

Underwriters—Names to be determined by

880,000

&

shares of G.P.U. common held.

Decatur, III.

200,000 shares ($50 par)

,f

State Electric

by General Public Utilities Corp., parent.

record

Expected

bonds,

10.

loans.

bank

5%

about March 23.

Un¬
York.
Proceeds—To develop, exploit and

television

a

first mortgage 35series A, due June 1, 1952. Expected

their principal amount $35,000,000

year

160,000 shares ($1 par) class A stock.
Cantor, Fitzgerald & Co., Inc., New

Price—$3 per share.

Capital requirements.

New

(3/10)

Hotelevision, Inc., L. I. City

2

(3/4)

York. Offering—To be offered in
preferred share and 2V2 common shares at

$25,625 per unit.

1, 1969, and 61,510 shares (no par) common
& Curtis

Illinois

,

New York

& Co., New

units of one

Manufacturing Co.

and Harriman

distribute

Un¬

Co., New York;

of notification) 4,000 share of 6% cumula¬
preferred stock (par $25) and 10,000
shares of common stock (par 250). Underwriter—Charles

Underwriters—Paine, Webber, Jackson

—

&

tive non-convertible

23

derwriter

by amendment.

Feb. 24 (letter

Underwriter—First of Michigan Corp.

Nov. 3 filed

Sachs

Neilsen Television Corp.,

©

(letter of notification) 552 shares ($2 par) com¬
behalf of E. Dorris Fletcher. Price, $7.50 per

March

convertible pre¬

($50 par)

dividend,

Temporarily deferred.

to guarantee
capital.

Hollingsworth & Whitney Co. (3/15)
filed $8,500,000 3J/4% sinking fund debentures,

Feb.

Price and

stock.

Piper,
Jaffray & Hopwood, Minneapolis. Proceeds—To retire
$3,000,000 of bank, loans and general corporate purpose©.

Probable bidders: Equitable Securities

(Mich.)

Hastings
on

65,000 shares

14 filed

derwriters—Goldman,

Corp.; Halsey, Stuart & Co. Inc.; Otis & Co.; Kidder, Peabody & Co.; Union Securities Corp.; Proceeds-—For con¬
struction. Expected about March 22.
•

'

—

petitive bidding.

Feb. 21

(letter of notification) 975,000 shares (100 par)
Price—300 per share.
No underwriter. To

24

National Battery Co.

Pensacola, Fla. (3/22)
$2,500,000 30-year first mortgage bonds.
Names to be determined through com¬

Underwriters

Inc., Tulsa, Okla.

develop leases.

Gulf Power Co.,
Feb.

of Oklahoma,

Oil

common.

Chicago
Feb.
17 (letter of notification) 2,030 shares (no par)
common stock.
Price, $100 per share. No underwriter.
For

Mission

ferred

Probable bidders include Blyth &
Co., Inc.; The First Boston Corp.;. W. E. Hutton & Co.
Proceeds—To pay off about $10,000,000 of short-term




any

intention of making

Implement Corp.,

competitive bidding.

■

for

in ratio of

15

shares held at $16.75 per share. Rights expire March 8*'
Lazard Freres & Co. and Newmont Mining Corp. havd

July

American

ferred stock.

'

r

Magma Copper Co., New York

duction plant.

March

.4.

preferred—but no commission will be paid
shares being sold to McCormack & Co<

1,600

For working capital.

Increase

•

v

#

McCormack

Jan.

eral corporate purposes.

March

i

Wash.

or

stock.

Light Co.

Boston*

Tekoa,

notification) 500 shares of capital stock
and not more than $250,000 of first series
No underwriter.
For construction and fi¬

bonds.

at

Co.; Union Securities Corp.; Lehman Brothers; Salo-

Philadelphia

Corp.,

Development

Feb. 18 (letter of

its investment in San

Industries, Inc., New Haven, Conn.

Eastern

common

Underwriter—William C.
For equipment and expenses.

bidding.
Probable bidders: Halsey, Stuart & Co. Inc.,
Kidder, Peabody & Co., Blyth & Co., Inc. and Merrill
Lynch, Pierce, Fenner & Beane (jointly); The First Bos¬
ton Corp; Equitable Securities Corp.; Harriman Ripley

NewYork

working

additional

23

Offering—Offered

$12,000,000 25-year first mortgage and- col¬
Underwriters—Names to be deter¬

18 filed

lateral

Fuel Associates

Gas and

Eastern

provide

Kinego Rand Enterprises, Inc., Denver, Colo.

on

Feb, 25 (letter of notification) 120,000 shares of common
(par $1). Price, par. No underwriter. To maintain a
professional basketball team.

mon

Feb. 24 filed $10,000,000 first mortgage bonds, due 1979.
Underwriters—To be determined
through competitive

&

March

for

received by the company at its office, 600
Street, Wilmington, Del., up to 11:30 a.m. (EST)

share.

par.

Hitchman Co., New York.
®

outlays.

(letter of notification) 500,000 shares of

(par

share

and

loans

,

ers,

1949 construction

expire

will

Rights

new

Probable bidders:

General

System, Inc., New York (3/15)
Feb.
14 filed
$20,000,000 25-year debentures.
Under¬
writers—Names to be determined through competitive
bidding. Probable bidders: Morgan Stanley & Co.; Hal¬
sey, Stuart & Co. Inc.; Merrill Lynch, Pierce, Fenner &

on

one

be

Feb.

Gas

Corp,( Proceeds—To

of

The First Boston Corp. and
Blyth & Co. (jointly); Morgan Stanley & Co., Harriman
Ripley & Co., White, #Weld & Co. and Shields & Co.
(jointly); Lehman Brothers; Otis & Co. Proceeds—For
construction. Bids—Bids for purchase of the stock will
bidding.

of

corporate purposes.

Columbia

held.

ratio

•

Feb.

5%

(3/3)

Co.

writing—Unsubscribed shares will be sold at competitive

•

construction.

first mortgage

in

28

retire

•

shares of record March 14 on the
stock for each five held. Rights

Iron

Colorado Fuel &

other

shares

•

new

Proceeds—To pay off loans and for
•

Feb.

bank

(letter

capital.

(par

& Light

Power

past expenditures.

Illuminating Co.

will expire April 5. In addition company expects to offer
shareholders the right to purchase at the same price any
shares not taken on the original offering to stockholders;

March

ord

filed

464,912 shares of common stock (no par).
Underwriting—None. Offering—To be offered to holders
of

Delaware

31 filed 232,520 shares ($13.50 par) common stock.
Offering—To be offered to common stockholders of rec¬

Inc.,

Development Co.,

Price, par.
pansion of business.
(par $100).

Yo

23

zational expenses.

Delapenha (R. U.) & Co., Inc., N. J.
2 (letter of notification) 1,000 shares of

record at the close of business
Feb. 7, on the basis of one share of American Light com¬
mon for each five shares of United Light common. Rights

United Light common of

of notification) 500 shares ($100 par)
Price—$200.11 per share.
No underwriter.

Feb.

stock.

equipment, repair and operating expenses.

March

Columbus, O.

Kaufman-Lattimer Co.,

•

common.

obtained

off

pay

ISSUE

PREVIOUS

•

Proceeds—For

Hutzler.

&

short-term borrowings
parent Texas Utilities Co.
to

central office

■

■

Bros.

mon

SINCE

ADDITIONS

INDICATES

,..

Alaska

Thursday, March 3, 1949

CHRONICLE

Registration

in

Now

Securities
•

FINANCIAL

&

.Volume 169

COMMERCIAL

THE

Number 4782

FINANCIAL

&

CHRONICLE

March

3, 1949

Delaware & Hudson RR.
Noon

be offered in units of

Corp.,

•

March

Television

7, 1949

y

scribed shares.
•

8r 1949

10, 1949
Co.__

Hotelevision Inc.

•

Island Edison

Wabash RR., Noon

(EST)_._v_

March

14,

Bonds

March

tional

22,

for

share.

Gas

•

per

share.

Debentures
..Preferred
Common

/Talisman
25

Feb.

Underwriting—None.

of

held.

notes

Bonds

1.

New England

•

Bonds & Common

Equip. Trust Ctfs.

March 23, 1949
Tel. & Tel. Co

24, 1949
Corp.___

March

25,

1949

March

Pacific

30,

1949
Equip. Trust Ctfs.

RR._,

May

5,

1949

Public Service Electric & Gas Co

ing subscriptions.

Bonds

i

The First Boston Corp.; Lehman Bro¬

thers; Wertheim & Co. and Merrill Lynch, Pierce, Fenner
&

Beane, will act as dealer managers.

Feb.

Expected Mar. 10.

investment.
•

Co., Inc., New York.

Ohio

-

,

Public

Service

Co.

1,000,000-shares
Service

Cities

($5 par)

would

Co.

bonds, due 1979,
stock of which
638,160 shares and the

common

361,840 shares. Underwriters — Names to be
determined
through
competitive
bidding.
Probable
company

bidders:

Halsey, Stuart & Co. Inc. (bonds only); Blyth
(both); Merrill Lynch, Pierce, Fenner &
Beane and Kidder Peabody & Co. (jointly on stock);
Otis & Co. (bonds); Salomon Bros. & Iiutzler (bonds);
&

Co.,

Inc.

Lehman

Brothers

proceeds
temporary

(bonds).

Proceeds—Ohio

would

use

for construction and to repay a $3,000,000
bank loan. Cities would use proceeds from
reduce its outstanding 5% deben¬

sale of Ohio stock to

1958.

tures due

Oklahoma

•

25

Feb.

filed

Expected about March 22.
Gas

&

($20

18

stock.

common

share for each 10 shares of

Gas & Electric Co., parent,

common

Standard

held.

plans—if the Commission

per¬

mits;—to subscribe for 50,002 shares of the proposed issue.

Underwriter—None.
•

Proceeds—For construction.

Osco Drug,

Feb.

Inc., Chicago, III.
(letter of notification) 750

23

stock (par

operate

a

shares

of

common

$100). Price, par. No underwriter. To open and
new store and to retire some outstanding

per

shares

17,391

share.

($1

new

Dec.

•

stock

40,000

shares
be

to

to

be

be

offered

share and 10,000

sold

to

public

offered to
on

at

trade

behalf of

options at Id

a

$3

Corp., Chicago, III.
notification) preorganization subscrip¬
tion agreements will be submitted to stockholders pro¬

viding for not less than 1,800
of common stock of

(per unit) $25.

Walthall Natural Gas

Corp.

Co., Inc., Tylertown,

$30

per

units

La.

of

To

Washington

(D.

C.)

24

issue

Commissary Association,

(letter of notification)

cumulative preferred

non-

(par

West indies Sugar Corp., New York
14 filed 74,880 shares ($1 par) common stock.
Of¬
fering—To be offered in exchange for 16,000 shares ($100
Feb.

common

A.

or

stock of Compania Azucarera Boca Chica,

Underwriting—None.
Penn

Power

Co.,

at

$3

Under¬

writer—Willis E. Burnside & Co., Inc., New York.

For

working capital and payment of taxes.
•

Feb.

Pioneer
16

Inc., Bluefield, W. Va.
1,200 shares ($100 par)

(letter of notification))

Price,
working capital.

capital stock.
For

Enterprises,

$110 per share.




No

filed

$10,000,000

underwriter.

Pittsburgh,

Pa.

30-year first

par), and 70,000 shares (no par)

mortgage

common.

bonds,

($100
Underwriters

(parent) and to public holders of
outstanding common at $28.50 per share. Proceeds—To
pay off bank loans and to finance construction.
Bids—
Bids for the purchase

of the securities will be received
by the company at Room 901, 50 Broad Street, New York
up to noon (EST) March 8.
®

Western

21

common

Solvents

Inc.,

(letter of notification)
and

1,738

shares

of convertible

Telegraph Co.

meeting April 20
debentures

later but is not to exceed

six

each

number

authorize

which would

a

new

be offered

of

shares
shares

of

$100 of convertible debentures

stock

held.

outstanding

at

On

the

Feb.

basis

of

the

the
amount of the issue would be approximately $391,000,000
if the maximum offering of $100 of debentures for each
six shares of stock outstanding is made. //
//////
15,

1949,

The

is

new debentures would be dated June
20, 1.949. It
contemplated that they would bear interest at a rate

of not

more

than 31/2%, would mature not later than June

20, 1964, and would be convertible into A. T. & T. stock
at

a

(3/8)

—Bonds and preferred to be sold at competitive bidding.
Probable bidders: Halsey, Stuart & Co Inc. (bonds

Feb.

annual

conversion

price

or

prices not exceeding $150

per

share.

27,500

accounts;

share.

11

their

rata to stockholders. The amount is to be determined

pro

for

1,500 shares of 5%

$100) and 1,000 shares (no
par) common. Price—$100 per share for each class. No
underwriter. To acquire plant fixtures and stock for the
operation of a wholesale and retail food commissary.

par)

at

ers

gas

Inc.
Feb.

first-consolidated

Feb. 16' directors voted to recommend that the stockhold¬

-

•

the

.

West Penn Electric Co.

stockholder

per

American Telephone &

one

construct gas line/ and natural
capital and contingencies.
'

of

geheral-uiiified-mortgagebonds

the

Pending approval by stockholders, the company said
it had
no
plans for the offering of the general

and ,26,000

in

retirement

the

become

unified bonds to the public.

shares ($1 par) common.
To be
preferred and two common at
unit. Underwriter—T. J. Feibleman & Co., New

offered

the

bonds,

that

(letter of notification) 6,500 shares ($25 par) 5%

preferred

With

would

right
determine the interest rate, conversion, sinking fund,
prior redemption provisions and maturity date, except;
that the maturity date may not be later than June 1,
2014.
The change would not affect the series A and
series B general-unified-mortgage bonds outstanding.

Mississippi
Feb. 4

general-unified-mortgage, dated April

to

corporation to be organized. Price
No underwriter.
To purchase real es¬
a

tate from Universal Wheel & Abrasive

the

the unified bonds, the management would have the

than 2,120 shares

nor more

share;

per

of

first and only lien, excluding
equipment trust certificates, on all the company's lines.
Under the proposed amendment to the indenture of

Universal Wheel & Abrasive

Feb. 25 (letter of

only);
Kidder, Peabody & Co.; Lehman Brothers; The First Bos¬
ton Corp.; W. C. Langley & £o.;
Smith, Barney & Co.;
Harriman Ripley & Co. Common stock will be sold to

Pepsi-Cola Bottling Co. of Wash., D. C.
(letter of notification) 31,500 shares (10£ par)

shares to
per

Pro¬

21

common

Corp.

Proceeds would be

At present, there are outstanding $50,724,000 of firstconsolidated-mortgage, 50-year, 4% bonds in the hands
of the public and $465,000 are pledged by company.
To
provide for the maturity of these bonds, the road has in
its
treasury $100,479,000 of general-unified-mOrtgage
bonds.

series N, 50,000 shares of preferred stock, series C

(par $25).
stockholders of record
share for each 10 shares

Rights expire April 8. Underwriting—None.
ceeds—For extensions, iadditions, etc.

& Webster Securities

lines.

then

Feb.

one

road

(letter of notification) 800,000 shares (10c par)
Price, 15 cents per share. No underwriter.

West

held.

Co.; The First Boston Corp.;

1, 1914, to include about 705 miles of unmortgaged rail¬

par)

Underwriter—Company
accident

Offering—Offered

to

stock to Electric Power and to market

White Weld &

April 13 stockholders will vote on approving the author¬
ization of $25,000,000 of indebtedness. Company plans no
immediate, borrowing but, wfshes. to avoid any- long

Hughes Tool Co.

Jan. 28 filed 754,038 shares of common stock
par

holders, adopt these
plans to sell later this year $4,-

construction.

mortgage

Pacific Gas & Electric Co.

at
Feb-. 25 at the rate of

common

indenture

of notification)

Price, $7

C

short-term loans.

|

company

Armstrong Cork Co.

machinery, equipment and development of mining

Offering—To be offered for subscription by stockholders.
The subscription offer will be made on the basis of one
new

for

used

(3/8)

system; for working

par)

ma¬

If company's preferred

(jointly); Equitable Securities Corp.

For

Orleans,

Electric Co.

shares

89,000

indebtedness which would

Lehman Brothers and Stone

properties.

(3/22)

sell

unsecured

able bidders:

capital stock.
<

r

Feb. 23 filed $10,000,000 first mortgage

and

<

of secured

publicly about $8,300,000 in long-term debentures. Prob¬

U. S. Grant Mining Co., Butte, Mont.

•y
Feb.

Proceeds—For

,

unse¬

indebtedness, capital stock
Company would like to eliminate this 10%

amendments,

as underwriter.
To set up a health and
insurance department within the company.

(par $1), 23 series.
Each series represents a separate
industry or business. Price, at market. Underwriter—
Long &

(letter

common.

Stocks, Inc., New York
Feb. 25 filed 1,500,000 additional shares of special stock

Hugh W.

and

than 10 years.

more

amendment.

Colorado
18

lists self

New York

•

change its

(owner of 74% of outstanding shares} will exercise -sub¬
/ waiting period should it wish to borrow in the future.
scription rights to purchase 297,304 shares. Rights will
Traditional underwriters:
Smith, Barney & Co.; The
expire March 7.
Underwriter—Merrill Lynch, Pierce,
First Boston Corp.; Kidder, Peabody & Co.
Fenner & Beane will' head a group of underwriters pur¬
®
Atlantic Coast Line RR.
chasing any unsubscribed shares of remaining 106,808
In' anticipation of the maturity on July 1, 1952, of its
shares not taken by stockholders,
Proceeds—For gen¬
first-consolidated mortgage bonds, stockholders will be
eral funds.
asked at their annual meeting April 19 to amend the
•
United American Life Insurance Co., Denver,

Wisconsin Electric Power Co.___.Common & Bond's

Missouri

share for each share held.

Light Co.

Company's parent, Electric Power & Light Corp., has
vote its holdings of 1,780,000 shares of out¬
standing Arkansas common in favor of the proposed

Run

new

&

agreed to

retire

To

Power

sum

on

000,000 of

Trail

one-fifth

surplus.

ture in

Jan. 28 filed 404,112 shs. ($5 par) com. stock. OfferingOffered
stockholders
of
record
Feb.
16
at
rate
of

Preferred

10% of the

and

general mining

Transcontinental & Western Air, Inc.

Debentures

March
Staten Island Edison

to

Mines, Inc., Idaho Springs, Colo.
Feb. 17 (letter of notification) 40,000 shares of common
(par $1). Price par. No underwriter. For repair and
operating expenses.

.......Bonds

Co..__

underwriter.
carry on

ex¬

which may be issued under the present charter is limited,

23.

programs.

Eastern Gas & Fuel Associates..

Pacific

No

payable and to

capital

indebtedness. Company wants to increase its au¬
thorized ($12.50 par) common stock from
2,000,000 to
3.000.000 shares. The amount of unsecured indebtedness

limitation

the

Proceeds—

for

cured

Mining, & Leasing Co., Inc., Spokane,

current accounts

co-managers of a group

subscriptions.

14 company asked SEC for authority to
charter to increase its common stock capital

(letter of notification)

amount

are

Feb.

Proceeds—
Feb.

Effective

Co.

solicit

Prospective Offerings
Arkansas

stock.

common

$37,500 of 6% two-year
notes. These notes are convertible into the 250,000 shares
of common capital stock at the rate of 15b per share.
Noteholders may purchase this stock up to the prepaid

1949

Ohio Public Service Co

par)

betterments.-

•

Southern

($1

Wash.

1949
Delaware Lackawanna & Western RR.,
Noon (EST)
Equip. Trust Ctfs.

Gulf Power Co

common

Co., Dallas, Tex.

shares

107,430

&

will

the

company's treasury
Expected about March 25.

penditures.

working capital.

Union

Baird

which

reimburse

shares is an offer of
No underwriter.
To

31,476

per

For construction and

16,

March

which

dealers

To

held, plus the privilege of subscribing for addi¬
shares not purchased by other stockholders. Price

—$12.50

.Debentures

Acceptance Corp
Northern States Power Co. (Minn.)

and

filed

16

shares

15, 1949
Chicago Rock Island & Pacific Ry.,
11:30 a.m. (CST)___
.Equip. Trust Ctfs.
Hollingsworth & Whitney Co

of

held, plus additional shares not taken byby other stockholders.
Lehman Brothers

and Robert W.
of

.

10 shares

subscription

Underwriting—

69,996 shares of

*

Hutzler

each
common

Offering—To be made to holders of outstanding stock of
record Jan. 3, on basis of one new share for each 10

March

Merchants

$1)

Price—$1

mill

Dec.

1949

Columbia Gas System Inc

Price—$20 per share.
product, etc.

Southern

.Equip. Tr. Ctfs.

Central Maine Power Co

(par

erect

Common
Bonds

Corp

Proceeds—To reduce bank loans.

(letter of notification)

recission.

-___Class A Stock

&

Snake River Mines Inc., Denver, Colo.

Feb. 24

...Common

New York State Electric & Gas Corp

Halsey, Stuart & Co. Inc.; Equitable
Corp.; Lehman Brothers and Salomon Bros.
(jointly); Merrill Lynch, Pierce, Fenner &
Beane; Union Securities Corp.; The First Boston Corp.;
Blyth & Co., Inc.; Glore, Forgan & Co. Stock will be
offered to existing holders at the rate of one share for

*

Securities

for

Production of

stock

March

offered

Pivot Window,

(par $1).

None.

9, 1949
Southern Ry., Noon (EST)__^.___Equip. Trust Ctfs.
Continental Engineering

be

Inc., New York
(letter of notification) 14,000 shares of

28

stock

Pfd. & Bonds

March

Staten

Smith

Feb.

Missouri-Kansas-Texas RR., Noon__Equip. Tr. Ctfs.
Transcontinental & Western Air, Inc
.Common

(EST)

Offering—To

able bidders include

subscription
by common stockholders of record March 22.
Under¬
writer—Morgan Stanley & Co. will purchase unsub¬

Connecticut Light & Power Co._
Debs, or Stock
Minnesota Power & Light Co., Noon (EST)__Bonds

West Penn Power Co., Noon

stock.

ferred

Preferred & Common

14 filed

and 266,093

Manufacturing Co., Waterbury, Conn.
March 2 filed 49,850 shares ($100 par) cumulative pre¬

4, 1949

March

Power Co. (3/25)
$10,000,000 first mortgage bonds, due 1979,
shares ($10 par) common stock.. Underwrite
ers—Bonds will be sold at competitive bidding.
Prob¬

Feb.

Scovill

•

.....Common

Co

March

Wisconsin Electric

Price—$3V2 per

capital.

Delaware Power & Light Co.,
.11:30 a.m. (EST)
,i

Neilsen

share each.

one

unit. Proceeds—For purchase of equipment and working

.Equip. Trust Ctfs.

(EST)

41

preferred. Price—common $1.50 per share; preferred $20 :
per share.
No underwriter. To complete payment for
buildings and plant machinery, to pay for plant ex¬
pansion and to use for operating capital.

Playboy Motor Car Corp., Tonawanda, N. Y.
1,000,000 shares of class A 20-cent prefer¬
ential dividend series ($3 par) common stock and 1,000,000 shares of class B (5d par) common stock.
Under¬
writer—Aetna Securities Corp., New York. Offering—To
Dec. 29 filed

NEW ISSUE CALENDAR

(997)

Longmont, Colo.
100,000 shares ($1

($20

par)

5%

par)
cumulative

Bell

Telephone Co. of Pa.
filed with the Pennsylvania Utility Cornapplication for authority to issue $25,000,000

Jan. 3 company

mission

an

25-year debentures on a competitive basis.

Proceeds will,
applied to the payment/of advances from the AmerS-!
Telephone & Telegraph Co. for expenditures on
additions and improvements to plant. Probable bidders:!

be

can

Co. Inc.; The!
Corp.; White, Wela & Co. and Union Seen-',
rities Corp.
(jointly). Registration expected in Marchj
with offering scheduled for April.
;

Morgan Stanley & Co.; Halsey, Stuart &
First Boston

(Mass.) Electric Light Co.
asked SEC authority to sell $2,750,000,
25-year noles," series A, due 1974, through competitive!
bidding. Probable bidders: Halsey, Stuart & Co: Inc.;
Harriman Ripley & Co.; The First Boston Corp.; Kidder,
•

Feb.

Cambridge

24 company

(Continued

on page

42)

42

(Continued from page 41)

•

•!

&

FINANCIAL

CHRONICLE

tc

Mississippi Power Co.

SEC authority to issue„and sell
competitive bidding $2,000,000 30-year first mortgage
bonds and 100,000 shares of common stock (no par),

(3/15)
Company will receive bids at its office, Room 1136, La
Salle St. Station, Chicago, up to 11:30 a.m. (CST) Mar. 15,

•

(parent) for. $2,000,000. Prob¬
able bidders for bonds: Halsey, Stuart & Co. Inc.; Kid¬
der, Peabody & Co.; Equitable Securities Corp.; Union
Securities Corp.

purchase of $2,808,000 equipment trust certifi¬
cates, series C,* dated April 1, 1949, due in 24 equal
1, 1949-April 1, 1961.
Stuart & Co. Inc., Salomon
Hall & Co. (Inc.), Harriman

Missouri-Kansas-Texas

RR. .(3/8);

tificates, second series of 1949, to be dated April 1, 1949
and maturing semi-annually Oct. 1, 1949, April 1, 1964,
will be received until noon, March 8, at company's office,
St. Louis. Probable bidders: Halsey, Stuart & Co. Inc.;
Salomon Bros. & Hutzler; Harriman Ripley & Co. and
Lehman Brothers (jointly); Harris, Hall & Co. (Inc.).
Bids will be opened March 8.

Delaware & Hudson RR. Corp.

until

noon

(3/3)

March 3 at company's

office, 230 Park Avenue, New York, for the purchase
from it of $4,800,000 equipment trust certificates dated
March 1, 1949, due $240,000 semi-annually Sept. 1, 1949March 1, 1959.
Probable bidders: Halsey, Stuart & Co.
Inc., Salomon Bros. & Hutzler, Harriman Ripley & Co.
and Lehman Brothers (jointly); Harris Hall & Co. (Inc.)
Date for opening bids expected to be March 3."

•

Missouri

900,000 equipment trust certificates. Probable bidders:
Halsey, Stuart & Co. Inc.; The First Boston Corp.; Har¬
riman Ripley & Co. and Lehman Brothers -(jointly);
Salomon Bros. & Hutzler.

RR.

Hutzler; Harris, Hall & Co. (Inc.); Harriman Ripley
(jointly); White, Weld & Co.

Brothers (jointly).

April 14 stockholders will vote on increasing authorized
from 500,000 Shares to 1,000,000 shares.
Com¬

advisable to do

seems

does not plan issuance of additional stock at this
time. Traditional underwriter, Baker, Simonds & Co.
pany

Northern

their

annual

meeting March 31
to the certificate of
reincorporation to provide for increasing the authorized
preferred stock from 80,000 to 120,000 shares; increasing
the authorized common stock from 1,210,000 to 1,600,000
shares and, restricting the issuance of additional in¬
debtedness maturing more than 12 months, or additional
shares of preferred stock unless after such issuance the
aggregate amount thereof shall be less than 75% of the
total capitalization. Traditional underwriters of stocks:
will consider proposed amendments

Staten

Pennsylvania Power & Light Co. Oakes, President, stated that

be

in the market for

rities

few

next

over

1948-1951

Kidder, Peabody & Co.; Merrill Lynch, Pierce, Fenner &

total

a

of

to

years

help

defray

bonds: Halsey, Stuart & Co.

Inc.; The First Boston Corp;;
Ripley & Co.; Kidder, Peabody & Co.; Otis
Langley & Co.; Kidder, Pea¬
body. & Co.; Stone & Webster Securities Corp. and
White, Weld & Co. (jointly);. Lehman Brothers; The
First Boston Corp.
Bids on bonds are to be received by
& Co.

•

(H. J.)

company's

(Ore.)

Gas & Coke Co.

tion whereby the company could incur

sion for

to

notes and to

•

Feb. 25 reported company expects to open bids
May
on its proposed issue of $75,000,000 first and

indebtedness up
$20,000,000. Company has arranged to borrow $15,000,000 at 2.90% from five institutional investors.

•

Indianapolis Power & Light Co.
March 1 company has asked the Indiana P. S. Commis¬
sion for permission to issue $8,000,000 first mortgage
bonds and 107,226 shares of additional common stock.
The new common would be offered for subscription by
the present stockholders, in the ratio of one new share
for each 10 shares held. Company has previously asked
permission to sell the bonds privately to Metropolitan
Life Insurance Co. However, Halsey, Stuart & Co. Inc.
said it would be interested in bidding for the bonds.

.permission to sell the bonds privately. To
part of

prepay

pay

Public Service Electric & Gas Co.

stock.

(5/10)
10

funds to

added

the company's

to

(Inc.); Lehman Bros.; Blyth & Co., Inc.

plans for sale of $20,000,000
Competitive bidding is expected
bidders: White Weld & Co.;
Union
Securities
Corp.; Stone & Webster Securities
Corp.; Halsey, Stuart & Co. Inc.; Glore, Forgan & Co.

pro¬

Gas

&

Electric

Radio-Keith-Orpheum Corp.

will be necessary to provide funds for
contemplated plant additions aggregating about $3,000,000, according to the annual report, but the form and
amount of the financing have not yet been determined.
Of said amount, approximately $1,900,000 will be spent

independently of one another.

lic utilities.
The

involves

phone

&

Buyer's Market

000

or

foot up to

thereabouts if it is all taken.

this

any

Tele¬

Co.'s huge
project
$391,000,-

debenture

could

Stockholders
on

undertaking virtually clear

American

Telegraph

convertible

which

big

will

first

have

call

but it is expected

that
unsold balance will be under¬
one

written.

The current month holds

An

prom¬

large

pros¬

banking business, that is the

new

pective stock offering embraces
more
than a million shares of

issue

dol¬

Ohio Public Service

lifting

end

drums

of

that

it,

the
out

have

the

gripped

things

on

the basic trend

the month

visible

moves

widening

of

business

along, since

of

the

as

vision

projected

of

corporation's

plans.

re¬

to

a

revival

derwriting activity, not

small

equity market since the Potomac

part of the potential this month * Edison
and

next

taking

the

shape




will launch

100,000-share preferred stock of¬

un¬

of
a

Pacific Lighting Corp.

fering which should give bankers
their first real feel of the senior

But at the moment most signs

point

Act.

Within the next several weeks.

a

-

compliance with

the Holding Company

recent

bring

of

offering

of last year.

Halsey,

®

toward

the

end
f

&

Co. Inc.; Harris, Hall & Co. (Inc.);
Hutzler; Harriman Ripley & Co. and

23

Osgood Co.,

reported

are

The

will shortly be asked to
issuance of 170,000 shares (par $5) of cumula¬
preferred stock and 150,000 shares of
common, the proceeds to be used to provide additional
tive

convertible

working capital.
to

underwrite

Securities

Commission
welded

-while

are

the

Sills, Minton & Co., Inc., is expected:
offering.

natu¬

and

nance

Exchange

appears

to

have

extension to its "arm's

an

length bargaining" rule from
This
developed

all

indications.

rally cheered by the better picture

connection

presented, are inclined to greater
caution in bidding for new issues.

in

financing.

As far

cerned,

the

as

their

latter

despite

and

spirit

number,

are

the

of

"buyer's

a

"bureaucrats,"
are

that

is

mar¬

and the

That

portfolio

to

found

big

of

automatically

the

Street

could

the

on

under¬

the. contention that

association with the advisory

be

quite determined in.
-firm ^ in syndicates marketing
their stand against yields of much:
less than 3% even .on best names, I other non-conneeted issues ren¬
latter

and this condition in
current

States

bidding.

reflecting in-

issue

for

ex¬

the winning bid for the
$10,000,000 bonds was 102.20 for
3s with the reoffering price set
ample,

dered. it ineligible.

Triborough
.The
Tunnel

Bridge

Triborough

an

ad¬

or so.

Officials are said to be confident
that the debt could be refinanced
and

the

funds

new

raised

at

a

substantial saving through a pub¬
lic offering of new securities.
They

point, of course, to the
stiffening
of the tax-exempt market sincethe RFC agreed to take the bonds
last

Summer.'

-

Industrial

Loan "

Bankers who brought out Bene- 1
ficial Industrial Loan
Corp.'s $20,-

000,000 of hew 3 Vi %. sinking fund

debentures, due in 15
able

to

place

that

in

short

>.

order.

The

years, were

issue

opportunity

fication,

plus

the

1

for

diversl-

„

attractive

yield, 3.12%, and the relatively

On the Northern

Power'Co.

$25,000,000

Beneficial

a second poten¬
tial bidder for the business was

ruled out

Corp., and raising of

ditional

the

stand. But then
^
«

have

was

recent

the capacity of adviser to
issuer in setting up the deal.

situation.

Underwriters

firm

a

in

of

in command of the

with

ruled out of the running by rea¬
son of the fact that it had
acted

con¬

more

some

One

Tacoma, Wash.

stockholders

approve

re¬

who,

&

Bros.

Wheeler,

Feb.

are

bankers

March

first

Stuart

Salomon

as

there

so

the

Extending Arm's Length

far

so

even

buyers,

of the stock in

any

slack could conceivably

some

now

But

ket" prevails currently

638,000 for the account of Cities
Service Co. which is disposing

recently. Naturally much depends

re¬

Lehman Brothers.

corporate offerings

new

concerned.

junior stock,
including 362,000 new shares and

investment
of

cent

venturesome

exceptionally

•

-

1, 1964. Present offering will
instalment of a proposed issue -of
$9,690,000 equipment trust certificates. Probable bidders-

Mr. Hughes has elected

The shelves of underwriters

really

ahead

.

has issued invitations for bids to be

1, 1950, to

constitute

government last year, which requires that on
or
before Nov. 8, 1949, the theatre business and the
motion-picture operations of RKO be operated wholly

Probable bidders for

(jointly).

(310)

noon
(EST) March 10 for the'purchase of
$3,165,000 equipment trust certificates, to be dated March
1, 1949, and to mature in 15 annual instalments from

the

and

stock will include Otis & Co.

RR.

company

March

equity offerings, chiefly by pub¬

of

Wabash

ceived before

reorganization plan for the parent organization to be
considered by RKO stockholders at a special meeting
on
March 28. The reorganization is pursuant to a con¬
sent decree in an anti-trust action, entered into by RKO

New financing

ise

W. C. Langley & Co.

The

theatre company which will acquire RKO's theatre bus¬
iness. The new theatre company, in which Mr. Hughes
will hold 929,020 shares of stock, will result from a

Co.

in 1948 and the remainder in 1949.

Probable

and

(jointly).

and The First Boston Corp. to receive proposals from
prospective purchasers of his stock holdings in a new

000,000. At same meeting stockholders will vote on in¬
creasing authorized common stock from 2,500,000 shares
to 3,500,000 shares.
Probable underwriter if securities
sold: The First Boston Corp.

common

1.

Hughes, owner of 24%, or 929,020 shs, of RadioKeith-Orpheum Corp. stock, announced March 1 that he
has designated Merrill Lynch, Pierce, Fenner & Beane

Laughlin Steel Corp.
April 26 stockholders v/ill vote on increasing authorized
indebtedness so that company may borrow up to $150,-

oy

mtge. bonds.

June

Howard

Jones &

subscription

Probable bidders: The First Boston

•

•

Co.

&

18 directors approved

around

First Boston

& Co. and Lehman Brothers

Stearns

The stock will first be offered for

1st & ref.

general

help finance its construction and expansion

Bear,

Virginia Electric & Power Co.

-

Feb.

Probable bidders: Halsey, Stuart & Co. Inc.; The
Corp.; Morgan Stanley & Co.; Kuhn, Loeb

gram.

and

Corp.; Kidder, Peabody & Co. and Merrill Lynch, Pierce,
Fenner & Beane (jointly); Harriman
Ripley & Co.

retire

remainder will be

Brothers

present stockholders.

$28,455,800 prior lien bonds and to pay
off $20,000,000 2% and 214% bank loans, due Sept., 1950.

The

Lehman

First Boston Corp.; Blyth &
Co., Inc.; Otis & Co.
Company is expected to raise new money through sale,
probably in May, of 148,000 additional shares of common

refunding
Proceeds from the sale will be used in

mortgage bonds.
part to

by March 24.

&

The

off

instalment note.

an

the preferred stock

on

Power

(jointly); Halsey, Stuart & Co. Inc.; White, Weld & Co.;
Harriman Ripley & Co., Inc:; Salomon Bros. &
Hutzler;

Other investment houses who may bid for the bonds are

Madison

10 and

Light Co.
Jan. 21 reported company is expected to sell
$3,000,000
bonds in April to finance its plant
expansion. Probable

SEC authority to sell $3,500,000
25-year first mortgage bonds. Company asked Commis¬

Hines Co.

March 24 stockholders will be asked to approve a resolu¬

Otis & Co.

On preferred: W. C.

Utah

secu¬

Feb. 24 company asked

Portland

stock.

Harriman

bidders:
•

preferred

March
new

(3/10-24)

from preferred stock would be used
by company to carry
out its plan- of recapitalization. Probable bidders on

construction program.

Beane.

in/.new

will

company

$31,400,000 of

Corp.

Proceeds" from the
bonds would retire the company's short-term indebted¬
ness and provide funds
required for expansion. Proceeds

Power Co.

Stone & Webster Securities Corp.; Merrill Lynch, Pierce.
Fenner & Beane; Shields & Co. Expected about Mar. 15.
•

Island Edison

mortgage bonds and

$4,000,000

Feb. 28 C. E.

Halsey, Stuart & Co. Inc.;

Jan. 28 New York P. S. Commission authorized corpora¬
tion to issue $2,750,000 30-year first

(Minn.) ' (3/15)
Feb. 21 Standard Gas & Electric Co. plans to offer its
holding of 364,684 (no par) common shares of Northern
States for sale through competitive bidding.
Probable
bidders: Otis & Co., Lehman Brothers and Riter & Co.
(jointly); The First Boston Corp.; Smith, Barney & Co.;

Florida Power Corp.

bidders:

Spokane, Portland & Seattle Ry.
••
--s
authority to issue
$4,500,000 certificates in connection with proposed pur¬
chases of equipment. Probable bidders: Halsey, Stuart
& Co. Inc.; Salomon Bros. &
Hutzler; Harris, Hall & Co.
(Inc.); Harriman Ripley & Co. and Lehman Brothers.

so.

States

Probable

•

wishes to be in a position to sell additional
to finance the- system's expansion
program, if it

stock

9.

Feb. 25 company applied to the ICC for

company

at

Bids expected March 22.

Ry.

March

•
New England Electric System
w
May 17 stockholders will vote on increasing the author¬
ized capital stock by 1,000,000 shares, also in reducing the
par value of the stock to $1 from $20. There are no plans
at
present, for sale of additional common stock, but

Corp.

stockholders

Southern

(3/9)
Bids for the purchase of $11,850,000 equipment trust cer¬
tificates, series QQ, will be received by the company at
Room 2018, 70 Pine Street/New York, up to noon (EST)

common

The

f

•

& Co. and Lehman Brothers

Inc.; Freeman & Co.; Salomon Bros. & Hutzler;

Ex-Cell-O

■■■■■-

Harriman Ripley & Co. and Lehman Brothers (jointly);
The First Boston Corp.; Salomon Bros. & Hutzler.

&

•

(3/22).

Feb. 24 company asked ICC for authority to issue $15,-

(3/30)
plans sale of $4,250,000 equip¬
certificates, probably about March 30. Prob¬
able bidders: Halsey, Stuart & Co. Inc.; Salomon Bros.

Delaware, Lackawanna & Western RR. (3/16)
company has issued invitations for bids to be re¬
ceived by noon (EST) March 16 at Room 2008, 140 Cedar
Street, New York, for the purchase of $3,807,000 equip¬
ment trust certificates. Probable bidders: Halsey, Stuart
Co.

Co.

ment trust

•

&

Pacific

Southern Pacific

Feb. 25 reported company

The

Harriman Ripley & Co. and Lehman

Ry.,

Halsey, Stuart & Co. Inc.; Harriman Ripley & Co.
(jointly); Salomon Bros. & Hutz¬
ler; Harris, Hall & Co. (Inc.).
•

& Hutzler, Harris,
Ripley & Co. and Lehman Brothers (jointly).

Bids will be received

Francisco

ders:

Bids for the purchase of $2,500,000 equipment trust cer¬

Bros.

Louis-San

St.

and Lehman Brothers

-...

Halse.y,

bidders:

'

while

vV"Y:-\\C'

V-.tf

•

semi-annual instalments trom Oct.

company,

-

Feb. 23 reported company plans sale of $4,250,000 equip¬
ment trust certificates later this month.
Probable -bid¬

to be sold to Southern Co.

the

dispose of his interest in the theatre

retaining the film activities of RKO.

at

Chicago Rock Island & Pacific RR.

Probable

Thursday, March 3, 1949

Feb. 28 company asked

Peabody & Co.; Otis & Co. For the purpose of funding
presently outstanding borrowings.

for

COMMERCIAL

THE

(998)

Prospects

Bridge

and

short

maturity

brisk demand.

brought
\

out

a

'/■

And it proved the-point again
Authority is reported ac^
lively discussing -plans • for: refW that v prospective
buyers'?' these
yield 2.86%. The low=est of 'eight bids was: a full half nancing $101VQOQ,000 of its bonds days have a special-eye-for satis-!--'
held by the Reconstruction Fi¬ factory
point under the best.
yields.
:
at 102.75 to

Volume 169

Number 4782

THE

World Bank Grants Loan io

COMMERCIAL V& "FINANCIAL

With Bourbeau & Douglass

Belgium

.

LOS

Proceeds of $16,000,000 credit will be used to finance construction
of steel mills and power

•

dred Olson has been added to the

plant.

Soujth Spring Street.

ports that

of Belgium. The purpose of the loan is to finance imports of equip'merit for the construction of two steel mills and of a power plant
4n the industrial district of Liege.<$>-

Proceeds of the loan will be util^
ized by two private Belgian steel
corporations and a private electric
company.
The

loan

is

for

and carries

years

term

a

$9.8 million, of which approxi¬

is

Nuveen &

by the
An

company

amount

of the loan

DIVIDEND NOTICES

of

$5.8 million out

is to

for the

be used

4V4%, including 1% commission purchase abroad of equipment for
which, in accordance with t h e a blooming mill by S. A, d'Ougree
Bank's Articles of Agreement, is
Marihaye, the second largest Belallocated
to
its
special reserve
The total
fund. Amortization payments, cal- &lan steel corporation,
culated to retire the loan by ma- cost
of this project will also
turity, will start in the fifth year. amount to the equivalent of $9.8

ing the European Recovery Pro¬
gram by financing projects which
involve

additions

permanent

million,

HOMESTAKE

Irving Trust

loan, $4.5 million has been allo¬
purchase abroad of

fifty

will

be

by

with

cold rolling mill

a

facilities

tinplating

Compagnie
Toles

des

Fers

established

subsidiary

John; Coekerill,

the

ect will amount to the

equivalent

DIVIDEND NOTICES
GUARANTY TRUST COMPANY OF NEW YORK
B-'Vitti of Directors

TV

March

York,

New

;

2,

stockholders of

to

1.-

bu*»u-rs

cf

March

record

at

25

DIVIDEND
The

Board of

163

NO.

Directors of

Maieh

shares

3
'•

share

SHREVEPORT.

the capi¬

on

1949,

30,

record

of

at

the

Dividend Notice

the close

(25d)

of business March 7, 1949.
STEPHEN G.

of

Directors

per

the

share

February 24,1949

77th Consecutive

March 10, 1949;

Quarterly Dividend

Secretary

.•

This dividend of 20c per
from

Electric

of

has

NOTICE

The Board of Directors has this

this day

declared

dividend

of

$1.50

declared

a

share

the $6 Preferred Stock

on

UNITED FRUIT COMPANY

day
per

and

DIVIDEND

the
Preferred Stock of this Corpora-

dividend of $1.75 per share on

a

$7

ness

March 10,

share

and

extra

an

WestPenn

dividend

dollar per

share on the
capital stock of this Company
have been declared payable
April 15, 1949 to stockholders
of record March 10, 1949.

of

1949.

Hi F. Sanders,

Treasurer.

February 24, 1949

THE TT T

199

NO.

dividend of fifty cents per

A

payable April 1, 1949, to stock¬
holders of record at the close of busi¬

tion,

one

EMERY

Electric Company
(INCORPORATED)
PREFERRED
The

Treasurer

\

j

y

OTIS
Vanadium Corporation

ELEVATOR

COMPANY

of

at

1949.

Company have declared quarterly divi¬
share

on

the

stock

common

(35c)

per

payable April

15, 1949, to stockholders of record at the
on

March 15, 1949.

J.

EGE&,

Preferred
A

share

No.

201
per

payable March 21,

the close of business

at

on

March

Bruce H. Wallace, Treasurer

INTERSTATE POWER

Common Dividend No. 95

five cents

r

New

York, February 23, 1949.

March

the Board of Directors
dividend of twenty-five cents
declared on the common
stock of the Corporation, payable March
22, 1949, to stockholders of record at 3:00
o'clock
p.
m.,
March 10, 1949.
Checks
share

will

be

a

was

Penn Electric
a

dividend

Company has also declared

on

the Common Stock of the

Company in the amount of twenty-five
cents (25(1) per share, payable on March
31, 1949, to stockholders of record at
the close of business on March 16,1949.

mailed.
B.

O.

February

H. D.

BRAND, Secretary.

April 1, 1949 to holders of
record at' the close of business on March 11,
1949. Transfer books will not be closed.
^

DUBUQUE, IOWA

declared payable

CARL A. SUNDBERG

Secretary

February 24, 1949

McDowell, Secretary

1949.

28,

Stock of this Company have been

Common

:

The Board of Directors of The West

meeting of

a

18, 1949.

COMMON DIVIDEND

Dividend Notice
At

Dated

COMPANY

share on the Preferred Stock and
(35(0 per share on the

thirty five cents

on

per

Checks will be mailed.

Penn Electric
Company has declared
regular quarterly dividends on the pre¬
ferred stocks of the Company as follows:
$1.75 per share (134%) on the 7%
Cumulative Preferred Stock and $1.50
per share (1J4%) on the 6% Cumula¬
tive Preferred Stock, for the quarter
ending May 15, 1949, payable on May
16, 1949, to stockholders of record at
the close of business on April 18, 1949.
$1.75 per share on tfie Class A Stock
for the quarter ending March 30, 1949,
payable on March 30, 1949, to stock¬

Lexington Avenue, New York 17

420

held today,

8, 1949.

Board of Directors of The West

holders of record at the close of business

the Preferred Stock has

on

been declared

163

dollar seventy

Dividend

quarterly dividend of $1.50

1949, to stockholders of record

Secretary

New York 8, N. Y.

PREFERRED DIVIDEND NO.

America

The Directors of International Harvester

dend No. 134 of thirty-five cents

DIVIDENDS

LEONARD

N.

.

COMPANY

such

President

Philadelphia

L. duP. COPELAND, Secretary

1949

of

pay¬

1949, to stock¬

holders of record, March 11,1949.

Corporation

HARVESTER

business

share

ordinary net income is

able March 31,

,

holders

to

close

30 Chttrcb Slrrcl

pet

on

Irving Trust Com¬

AMERICAN LOCOMOTIVE COMPANY

($1.75)

FUND

the Common Stock

J. H. Mihacle,

February 28, 1949.

GERARD

one

on

Corporation, payable April 1,

close of business

regular quarterly dividends of ;$1.12}4 a share
on the outstanding Preferred Stock—$4.50 Series
and 87)4tf a share on the outstanding Preferred
Stock—$3.50 Series, both payable April 25,1949,
to stockholders of record at the close of business
on
April 8, 1949; also $2.50 a share, as the
first interim dividend for 1949, on the outstand¬
ing Common Stock, payable March 14, 1949,
to stockholders of record at the close otbusinessr

close of business

of

WELLINGTON

dividend of twenty-five cents

a

1949, to stockholders of record at the

KENT, Secretary

declared dividend

INTERNATIONAL

■-C., EAIii'E MOP,AN, Secretary & Treasurer.

Dividends

LOUISIANA

declared

at

the

the Anaconda Cop¬

^>'CloCk P.M., on March 8,

of

BllllllillH,!

per

per Mining Company has declared a
dividend
of Seventv-five Cents ($0.75) per share on its
capital stork bf the nar value of $50 per share,

.pavitble

February 28, 1949.

The Board of Directors has this date

Broadway

N. Y., February 24,

of Twenty-five cents >(25^) per
paid April 15, 1949 on the Com¬

quarterly dividend

DIVIDEND
of

Board

CO.

MINING

dividend

Joseph L. Martin, Treasurer

UNITED CAS

1949.

9,

COPPER

York 4,

New

A

share will be

1949.

Wilmington, Delaware: February 21, 1949
The

MATTHEW T. MURRAY. Secretary.

ANACONDA

MERCK, President.

Stock of the Corporation, to stockholders
of record at the close of business March 31,

1949, payable on

March 31,

the qwu'terHiding

W.

1949.

X}ie Capital Stock of this'Company for

shaie on

AprU

($3.)

Corporation

& Company

has this day declared

&dividend of Three Dollars

Treasurer,

WALTER L. MORGAN

on

1949

a

of 20 cents per

E.I. du Pont de Nemours

A.

The total cost of this proj¬

SCHALL,

Dividend No. 12

Power & Light

and

largest steel manufacturers in Bel¬

.

17,

M.

Wichita River Oil

Street, New York

day declared

et

S.

of

oldest

1,

The Board of Directors has this

the

by

Blancs

GEORGE

March

February 24, 1949

Disbursing Agent.
,
HAMILTON, Secretary.
1949

Froid (Ferblatil), a newly

a

gium.

February

1968.

quarterly

F.

Company
One Wall

JOHN W.

equipment for

1,

day declared
dividend of 50c per share on the
value 8(i Preferred Stock outstand¬
ing; and a dividend of One Dollar per share,
on
the outstanding Common Sloe*; au pa^aoie
on
April 1, 1949 to stockholders of record at
the c.ose of business on March 14, 1949.
a

Dividend

pany,

COMPANY

has this

the $3.50 Cumulative Preferred Stock of this

cents

mailed

SUGAR

$25.00 par

corporation, for the quarter ending March 31,
1949, has b?en declared payable on April 1,
1949, to stockholders of record at the close of
business March 14, 1949.
A quarterly dividend of 75c a share on the
Common
Stock
of
this
corporation has been
declared payable on April 1, 1949, to stockhold¬
ers of record at the close of business March 14,

($.50)
per
share .of
$12.50 par value Capital Stock, payable March
18, 1949 to stockholders of record 3:00 o'clock
P. M.,
March 8, 1949.
Checks

for the

cated

of

RICO

Board of Directors

mon

871

No.

Board of Directors has

871

PORTO

March
The

CO., INC.

stockholders of record

COMPANY

MINING

DIVIDEND
The

of the

on

&

SOUTH

regular quarterly dividend of 87a share

tal stock of this Company, par

DIVIDEND NOTICES

No.

amount

DIVIDEND NOTICES

$10., payable April 1, 1949, to

which give reasonable prospects of

of the total

in Belgian francs.

company

Europe's productive capacity, and

•Out

approximately

40% will therefore be met by the

to

repayment.

which

of

MERCK
A

43

Chronicle)

1949.

of

The loan is in accordance with
the Bank's policy of supplement¬

Co., 135 South La Salle

Street.

in Belgian francs.

Financial

DIVIDEND NOTICES
John

with

Connected

now

The

ELGIN, ILL.—Raymond J. Kelley has been added to the staff of
Heath & Co., Tower Bldg.

John Nuveen Adds

y.T

to

CHICAGO, ILL.—Joseph Schnur

mately 55% will therefore be met

20

of

interest rate

an

of

t

V

.

(999)

With Heath & Co.
(Special

ANGELES, CALIF.—Mil¬

staff of Bourbeau & Douglass, 510

The International Bank for Reconstruction and Development re¬
on Feb. 28 it granted a loan of $16 million to the Kingdom

.

CHRONICLE

/v5®x

Notice of Dividend

r\

The Board of Directors has de¬
clared

dividend of

a

15^

TEXTILES

per

share

on the
outstanding ComStock, payable March 25,
1949, to stockholders of record

V

PLASTICS

mon

GENERAL

March 15, 1949. The transfer
books will not be closed.

TIME

Mining and Manufacturing
Phosphate

*

Potash

*

Fertilizer

*

Chemicals

on

American
Bank Note

CELANESE

Oscar Solberc, Treasurer

180 Madison

Preferred Dividend No.

.

A

THE Boardthe Directors has this day
of following dividends:
declared

161

quarterly dividend of 75d per share
on the Preferred Stock for the

T/uBonl&n

FIRST PREFERRED STOCK

dividend of 40o per

31, 1949, and a
share on the Common

Stock have been declared.
are

The

Both dividends

record

1,

on

Secretary

February 23, 1949

counter

March 22,

able

far

capital

-

-new

old standing, avail¬
partnership with small

outlay

unlisted house.
and

vote

trader of small over-the-

house

Financial

of

or

will

go

with

other

Box O 33, Commercial

Chronicle,

25

Park

Place, New York 8, N. Y.




be

held

Wednesday, April .20,

stockholders

close of

the

Partner and

will

a.m.

(Eastern Standard Time) at 43 Park
Avenue,
Flemington,
Hunterdon
County, New Jersey.

Only

AVAILABLE

meeting of

1949, at 11:00 o'clock

books win remain open.
W. F. Colclough, Jr.

annual

stockholders

1949, to holders of
March 7, 1949. The stock transfer

payable April

PREFERRED STOCK

per

Annual Meeting

March

ending

quarter

The regular quarterly dividend for
the current quarter of $1.1834
per

ing

at

any

of

business

on

record

at

Tuesday,

1949, will be entitled

said

payable

holders of record

subsequent transfers of stock.
not

April
at

1,

1949

to
the close of busi¬

The

regular quarterly dividend for
quarter of $1.75 per share,
payable April 1, 1949 to holders of
current

record

at

the close of business March

31,

1949

the

close

_

The Borden

Company

share, payable March

to

of

holders

of

business

record at
March
11,

—

-

March 1, 1949

4% Cumulative Preferred Stock
28th Consecutive Regular
Quarterly Dividend of One Dollar
($1.00) per share.

on

the

Both dividends

STOCK

of 40

cents

per

Common Stock,

payable April 1, 1949 to share¬
holders
_

of record

March

14,

1949.

Secretary-Treasurer

are

payable March 30,

1949, to stockholders of record

at

the

close of business March 18, 1949.

Checks will be mailed
Bankers Trust

by the
Company of New York.
Robert P. Resell
Vice President and Treasurer

March 2, 1949.
westcl0x

-

big ben

seth thomas

R, O. GILBERT
Secretary
•**
"•
k

THEODORE D. WAIBEL, Secretary

A dividend

share

1949.

be closed.

March

John H. Schmidt

per

on

follows:

as

Regular Quarterly Dividend of
Fifty Cents (50c) per share.

record

_

COMMON STOCK
cents

February 24, 1949,

$5.00 Par Value Common Stock

of

14, 1949.

11, 1949.

60

declared by the

shareholders

COMMON

7% SECOND PREFERRED STOCK

the

cent Cumulative Preferred

were

Board of Directors

Stock, payable April. X, 1949 to

March 11, 1949.

ness

to

meeting, notwithstand'

The stock transfer books will

share,

following dividends:

Regular quarterly dividend of
$1.0634 per share, on the AM

84,75 SERIES

(1 Vi'fc)

Dividends

The Board of Directors has de¬

Avenue, New York 16, N. Y.

clared the

172

Dividend No.

Common

CORPORATION

Dividends

CORPORATION OF AMERICA
February 24, 1949

Company
;

INSTRUMENTS

international minerals

/

,

str0mberg recorders
"

haYdon motors

& chemical corporation
General Offices: 20 North Wacker

i.

Drive) Chicago 6'

44

COMMERCIAL

THE

(1000)

'

FINANCIAL

&

'

,

»

Thursday, March 3, 1949

CHRONICLE

*

*

,

western

BUSINESS BUZZ

Washington...

approved

from the Nation's

Capital

if

xJL f

of

three

but

j

either

and

j

by the
four

or

weeks debate.

JL Ir 19/

9/9M/

indi-

committee,

disapproved

or

short

Senate

yJ

already

considered

be

cannot

of

out

get

may

Behind-the-Scene Interpretations

is

Europe

cated. The public health program

Mr.

will be lucky to

Truman

get two or three important parts

benefit.

financial

ing

oil

transport
sions

Co.,

Oil

required

1,067-mile pipeline.

had

and

Government of the United

steel,

domestic

tons of

commodity,

in
one of the broad gaps about how
the increased industrial capacity
deal would operate.
Mr.

to put the government into
production, processing, trans¬
portation, or storage of any com¬
modity the production of which
he adjudges is not sufficient to
meet whatever national goals the

possible

a

but

go,

resump¬

tion of work in building the trans-

Arabian

pipeline.
in

stood

that

shipment

in

the

Administration

plant

ponents

ca¬

pacity bill.

softening in their

are

asked how the

industry

of

complying

.

factors

dominant

officials

own,

going

if

doubt

they

build

to

on

will

any

plants.

any

We

*

needed,"

be
*

if

4

•

to

will

certificates

issued

be

provide for not more than 80%
actual

the

of

estimated

cost,

at

$15,996,085, of the following new

didn't

Congress

get

move

a

and make good on the

campaign

Tru¬

the

promises,

President would

go

arousing

country

that

was

motives;

people

switching

Diesel

13

locomotives; 38 sleeping

loco¬

freight

road

cars;

(>00

hopper cars, and 500 gondola cars.
Associated in the

the

around

the

Diesel

25

equip¬

railroad

standard-gauge
ment:

man

It develops that the proposed
appropriation of $300 million for

2.90%, according to maturity.
The

can

on

'6

sawdust trail to

Mr. Truman's threat

■

to

dinner

Day

Town.

say.

'

his

out

for his "Fair Deal,"
practically take it for
granted that before long you will
he seeing the President in Your

kiss

just

the

Commerce Commission authoriza¬

(

carries

evangelize

you

by be¬

or

to hit

threat

the

Interstate

to

tion, at prices to yield from 1.50%

*

Truman

Jefferson-Jackson

Presidential
goals for expanded capacity by
of

any

Mr.

If

could

country

the

be given a chance of
with

private

*

#

........

When

op¬

position.

immediately

were

subject

W.

R.

Pressprich

offering were:
&

Co.;

A.

G,

The President is bound to have

funds would be distributed to the

proposition without the formal¬

Parsons & Co.;

ity of committee hearings, com¬

Illinois Co.; Wm. E.

mittee

Inc.; William Blair & Co.; Burr &

the

After

production

is

goal

proclaimed and productive capac¬
ity of private industry is found to
be
insufficient, then under the
ically would be given a period of

all

Furthermore,

the

of

time in which

gov¬

be

recommended,

Services,

deal with this

Secretary
Sawyer delayed the license. As
the
Secretary
officially
ex¬
plained, it was his department
Commerce

Oil

(Arabian-American
share with the

ment

if

struction of

would

companies
of

in
in

of

the

in

the

the

each
stall

shortages

domestic

the

some

area,

States

the

of

conversely,
in

the

the

Under

the

the

antitrust

concerted

Govern¬

stood

favorable

no

be¬
of

and

action.

Establishment

begun

com¬

National Military
on

late




this

in

question

November,

On

the

or

the

only

enacted in 1949 would

program

to dissolve the

be

for

re-appoint

Congress and

with

Congressmen

brown shirts who would all rise

unison

in

already,

and

his

aye

consideration,

every

floor

or

debate*

The

shortly to back large-scale, direct

government lending to finance socalled private home construction.
This will be added as an amend¬
ment to the "private housing"

funds

40-year period, say

Federal

ponents.

greatest

The

consist

will

this

April. The

rights

infinite

of

Congress,

will

until

sideration

not
late

relief

home

ing

with

will not get
for

to

in

this housing.

This bill

was

a

more

ponents

of

public

expected

units

to

more

clear.

than

con¬

April.

sniffed

an

Federal

Otis &

(Inc.); L. F. Rothschild & Co.;

First of

Michigan Corp.; Graham,

Inc.;

Haupt

and

Co.;

&

Securities

Collins

&

&

Co.;
Co.;

Corp.;

McMaster

Mullaney,

Alfred O'Gara & Co.,

F. S. Yantis & Co., Inc.

out of

com¬

op¬

Trading Markets:
Ralston Steel Car

Oregon Portland Cement
Riverside Cement A & B

form.

Congress

inferential

Spokane Portland Cement

OK of

the Reciprocal

Trade

LERNER & CO.
Invesment Securities

Agreements
will

600,000

under

tion

act

extension,

give this quite

position

to

a

and

rumble. Op¬

lend-lease

arms

Teletype—NY 1-971

HAnover 2-0050

"dominating"

10 Post Office

Square, Boston 9, Mas#.

Telephone Hubbard 15)90 Teletype DS 65)

for

Hill, Thompson & Co., Inc.

Firm Trading Markets -

industry.
the

'30s,

both

industry

and

terials allocations.

j

Ira

Hayden, Miller &

Clayton

Co.;

Pollock & Co^

Freeman

Co.;

&

Hirsch & Co.; The

weeks, except

the International Trade Organiza¬

housing were

Conservative

several

emasculated

has

favorable

expecting until recently. They had
not

get
in

Social security expansion, includ¬

of

mittee

subsidize

Co.

Merrill Lynch,

Weeks;

delay. The control

funds,

year

en¬

will

program

of

a

Fenner & Beane;

bill, if it does get to either floor

of instalments

million

&

Wells & Co.;

civil

running for 40 years at the rate

$300-odd

blower

Pierce,

Julien

cause

op¬

part

the

Corp.;

(Inc.); Horn-

Hall & Co.

Hutchinson

tire

alone

in

a

form

Securities

Equitable

Harris,

be achieved before

bill

not less than $15

over

the

& Co.,

pected by seasoned legislators to

ing and slum clearance bill will
billion

in

even

Co., Inc.; Blair

President doesn't want, is not ex¬

sponsored by the Administration.

cost probably

"repeal" of the Taft-Hart¬

bill

ley

Inc.;

Co.,

look for the Administration

&

Becker

other

"conspiracy" to do what the gov¬
ernment wants, must be protected
by
statutory
immunity.
Hence
this immunity has been written
into law, as in the case of the
voluntary
agreements
for ma¬

steel.

the

out

trip,

FOREIGN SECURITIES

government have recognized that

price,

"Negotiations between the

come

the

Congress.

NEW

YORK 5

Ever since the Madison oil case

and it got the steel. No bargain

price,

hasn't

it

81st

the

he could get his legislative

way

two classes of institutions.

If

his,

make

to

"compromise" than even the pro¬

hand, should one company go for
the
proposition,
it would
risk
later prosecution for becoming an

capitulated. Its prob¬
very simple. Give the
a

against

run¬

•

the
increased
capacity, they would
risk
antitrust
prosecution
for

tween Aramco and its steel, the

government

the

might

application of
laws, if the pro¬

the

was

of

one

past

Line," Mr. Sawyer stated.

company

plants.

ducers themselves divided up

transportation

Sawyer

fore¬

industry

alleged monopoly

Mr.

risk)

to

government-built

savings which would result from
completion of the Trans-Arabian

Since

(and

shoulder the entire risk.

Department of Commerce sug¬
gested to the company that it
consider the possibility of sharing
ment

get

to

economy,

Mediterranean

United

have

undertake

would

leaders

of

[view of the requirements
military agencies for oil

the

would

investment

this

be

were

Or,
of

view

installed steel

together to determine how much

built.
"In

a new

con¬

capacity of 10,000,000 tons. Presumably the steel

Co.)

pipeline

the

is

snag.

production

transporta¬

the

which

savings

achieved

is
to

For instance, suppose that the

Federal govern¬

of

some

tion

education

to

a

question.

government called for the

before

suggested

aid

into

The compromise public hous¬

the
license be granted, that Aramco
which

in¬

The gap is that no provision
made for industry collectively

ment, "in fact everybody."
Only

the

construct

ment loan.

did the State depart¬

so

decide whether

to

without the help of a govern¬

or

granted, ECA so
so did the Armed

to

production capacity, with

creased

that

recommended

Sawyer
license

wanted

it

except Commerce Secre¬

ernment

ning

proposal private industry theoret¬

hibit.

.were

plan,

Heretofore it
had been thought that this pro¬
position would pass with relative
ease.
Disagreements between the
parochial and public schools were
thought to have been ironed out.
It is now reported that there is
new
disagreement over how the

was

government has the
power
to
regulate and the power to pro¬

pany

delphia

Federal

President thinks are desirable.

the way of
the OK of
the government, an OK necessary
to authorize shipment since the
All

actual

lem

for

asked

has

Truman

The cer¬

the

all

was

to

ready

and

make

would

question

in

pipe

fabricated

with

Again?"

reoffered,

their

Officials tacitly refuse to fill

1964, inclusive.

to

power

The

steel

Here

off the question. "Oh, we aren't

shipment of scarce materials
"Iron Cur¬

and

1950

coming

law.

der the old

to countries behind the

the

pipe, however, came un¬

certificates, ma¬

tificates, issued under the Phila¬

reaching agreements,

other

The

economy.

tain."

tary

au¬

to jeopardize the

as

is to promote the nation's
foreign policy. Thus the govern¬
ment would restrict or prohibit

:

much

thority, too sweeping discretion.
The
instant release
of 25,000

purpose

the

too

vested

2%%'

1949,

turing $820,000 annually March 15,

"You

the bill made in the House was

it

:

.

had completed
continuing

materials. The chief criticism of

that

-

bill

the

of

V

came

power

the

power

;•

application

this

of

government,
through the Secretary of Com¬
merce, to license the export of
the

regulate and prohibit, if neces¬
sary, the shipment abroad of any
supposedly scarce materials. The
purpose of this legislation is two¬
fold. One purpose is to prevent
the exportation of such a large
as

second

RR.

of

trust

equipment trust
i

an¬

AFTER Congress

to

such

Central

York

New

$12,300,000

Wednesday

awarded

was

The

own.

regulatory
on

better

a

government

for

Sawyer's

of

States, under an act of Congress,
has the power to license and hence

volume of any scarce

the

deal
Mr.

nouncement

get

to

power

action

The

underwriters were

associated

export

of using the

idea

The

license

paid for
same. A great deal of the steel,
and
every
pound represented
in this license, was all ready
for shipment to the area where
the pipeline is being laid.
steel,

Equip. Issue

Stuart & Co. Inc. and

Halsey,

equipment

contracted for the fabrication of

this

Central

use

stated Mr. Sawyer.

had

Oil

Arabian-American

Halsey, Stuart Offers

Gulf to the Mediter¬

for a period of 10 years
completion of the pipeline.
of the pipeline, instead
of tankers, is expected to result in
a
substantial financial savings to
the United
States Government,"

tons of
for the

260,000

that

is

wiRJbe

Establishment, at cost,
quantities of oil from

after

The

views.)

own

for

ranean,

of steel. The latest official esti¬

mate,

"Chronicle's"

the

.

has now agreed
the
National

company

Persian

the

Mediterranean. This takes a lot

steel

pretation from the nation's Capital
and may or may not coincide with

Secre¬

substantial

to the

in;. Saudi-Arabia,

18, 1949,"

Feb.

Commerce

transport

Military

steel pipeline to
from its conces¬

30-inch

a

to

subsidiary, is build¬

a

flect the "behind the scene" inter¬

tary.
"The

Arabian-American

(This column is intended to re¬

In the first case

on

the

explained

Here is the story:

through

concluded

and

plied, it will save a vast sum, per¬
haps millions, but just how much,
officials do not divulge.

adopted before

program

summer.

applied broadly by all government regulatory

If

agencies, it could benefit the government by billions.
to which this device has been ap-<S>

his

of

WASHINGTON, D. C—Commerce Secretary Sawyer has adapted
use of the Federal government an^ancient device for obtaining

to the

]^0 suc}1 immunity from the
Department of Justice is proposed

All

Issues

Executive &

70

Underwriting Offices

WALL

STREET

Tel. WHitehall 4-4540

T.ARL MARKS & P.O. INC.
FOREIGN SECURITIES
SPECIALISTS

f 0 Broad Street

Trading Department

120

New York 4, N. Y.

AFFILIATE: CARL MAFKS & CO. Inc. CHICAGO

BROADWAY

Tel. REctor 2-2020

.1