Full text of Commercial and Financial Chronicle : March 4, 1948, Vol. 167, No. 4678

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mar 5

1948

ESTABLISHED 1S39

Reg, TT; S, Pat, Office

Volume 167

Number 4678

New

York, N. Y.; Thursday, March 4, 1948

Pribe(30 Cents

a

Copy

,a-

A New Look at Inflation

And Reform Possibilities

!

I

.•

My

.
.

j

1

-:

FRED IL KLOFSTOCK

7-.-.

•«

Economist, Federal Reserve Bank of New York •>.£>•?

c

Federal Reserve official

warns

>

inability •
reform woirid accentuate split df Germany,
j Cites alarming progress of monetary disintegration, and spread of
( black and gray, markets. Denying financial rehabilitation wholly'

j

>

*

to agree on currency

j depends

redaction of

'

President, Federal Reserve Bank of Chicago

i

'

Asserting both reckless bidding

-

v

Allied Controls Council's

'

;

•x
.

j; /•. V

By CLIFFORD S. YOUNG*

••••

V'-'V-"

?.

'■

—

,v

;; }

j

^'

.

of prices and unwarranted drastic price cuts are equally danger-' i
ous, Reserve Bank executive sees nope of avoiding business setback by gradual adjustment to
normal
I
conditions. Lays new upsurge in inflation to
heavily expanding private credits and to high consumer :
spending, and points out, despite record profits, financial position of businesses has not been
strengtb- i ■
ened. /Advocates judicious restraint in business expansion until inflationary
turning point itas been «
•',/
reached.
■:
^ jj
'/'^.1" /
up

■

..

^

Price and financial i
supply, Mr. Klopstock calls* for
developments in this country and abroad in recent (weeks have
! revival through increased industrial production and settlement of - caused
all of us to reappraise future
banking and business prospects. -The > sharp break ih
j
huge unpaid claims on future German Government.
<v
^ commodity prices
together with its depressing effect upon security prices are being interI
How to bring down Germany's over-abunddnt mOriey supply to a
4 preted widely
on

reasonable level is
tail

for

has

reached

a

now been discussed iri great de¬
In recent months the discussion
crescendo. Jn Germany.
Numerous monetary

ref

,

,

-

issue that has

two

new

1 '

/f

an

than

more

moiiey

have

sponsored

been

sub¬

up

fact,

made

almost
German

few

an

Control

anything in

economics, fi-

ported

nance

powers

or

banking, if he

ment

has

a

not

come

with his

scheme,

com¬

mented
should

with the money surfeit.

threshed

was

length in
Council

See

when

done

The mat¬

out

at
great
meetings of a

numerous

sub-committee

be

in

of

the

the

Allied

United States-

PICTORIAL

INSERT

for

pictures taken at 24th Annual
Mid-Winter
vestment

Dinner of

Traders

the

came

effort

arrive

to

at

Council.

that

It

the

have

is

four

now

re¬

occupation

reached

agree¬

an

the general principles of

on

of

reform for the whole
a zonal solu-

the

problem has at least

temporarily been averted.
It is clear that inability of the

A Time for

split

a

of

Germany

few

connective

one

links

twb

of the

between

West and East. If this link should
be abandoned, zonal boundaries
would be consolidated, and
East and West would have to

sider each other

as

In¬

(Continued

Association

on

foreign
page

the

definite action

con¬

coun

If

The statements contained in this

represent

the

personal

opinions of the writer and do not

necessarily reflect the views of the
institution with which he is

con¬

,

them

Established

-

'

Hirsch & Co.

to

toward

move

It is the

way

(Continued

.

STATE

a

■

wave

T

has

developed

in

quarters

some

that the long-

C. S. Young

heralded

"postwar

re-

-

cession" is here

No

one

has

continually

forecasting

\

.

or

yet

the

attempt to do
like to

future,

cent

so.

my

the

*An

briefly

implications

(Continued
address
Auditors

cer¬

province to

Rather, I should

inflationary

Bank

and

a

of

means

consider with you

of

some

discovered

accurate

tainly it is not in

.

at hand. >"

trends

on

of

re¬

for

the

page 28)

;

by Mr. Young at
and

Comptrollers

Conference, Chicago, 111., Feb. 1%

:

1948.

on

30)

page

Slate and

and

Municipal

MUNICIPAL

V

THE NATIONAL CITY BANK
BOSTON

Troy

.

Albany

-

PHILADELPHIA

Buffalo

Harrisburg

HART SMITH & CO.
".

Syracuse

<

OF NEW YORK

Scranton

(Representative)

Woonsocket

■

t"

>

Washington, D. C.

Bond Dept. Teletype: NY 1-708

>

; NATIONAL BANK

of INDIA, LIMITED

TEX. EASTERN TRANSMISSION
•

Underwriters and

Bankers

r

—

QUOTED

Distributors of Municipal

Head

Gordon Graves & Co.

OTIS & CO.

INSTITUTIONAL INVESTMENTS

(Incorporated)

Street, New York 4, N. Y.
Tele. NT 1-809

Office:




1899

Cincinnati

Chicago

Columbus

26,

Toledo

Buffalo

"Members

THE CHASE

v

HAnover 2-0980

Bell Teletype NY

New York

Bond

1-395

Montreal,

Toronto

Brokerage

Service

NATIONAL BANK
OF

India. Burma,
and Aden ana

Paid-Up
Reserve
Bank

Capital
Fundconducts

Ceylon,

CITY OF

NEW YORK

Portland General
Electric

Company
Stock

for Banks, Brokers
and Dealers

Bought—Sold—Quoted

Hardy & Co.

ira haupt &co.

Kenya

Zanzibar

£4,000.000
£2,000,000
£2,300,000

description
banking and exchange business
every

Trusteeships and Executorships
also

THE

Common

Bishopsgate,

Subscribed Capital

The

Denver

in

Colony

•

CLEVELAND
New York

in

London, E. C.
Branches

Corporate Securities

Established

the Government

'

Kenya Colony and Uganda

and
SOLD

to

•

York Security Dealers Assn.

New

52 WILLIAM ST., N. Y.

Springfield

TENN. GAS & TRANSMISSION

Ccmmcn Stcck

.

"

Wilkes-Barre

London

Bond Department

>

Street, New York S

*

30 Broad

oppor-

A

fear

BONDS

INVESTMENT SECURITIES

64 Wall

Teletype NY 1-210

Cleveland

Tel. WHite'wll 4-5770

as

of world politics, and

,

,

Si, New York 4,N. Y,

—

them

-

techniques of conquest and imperialism have been

1927

Stock

Exchange
and other Exchanges

BOUGHT

half.
of

past-

and

past it had appeared

\

R. H. Johnson & Co.
t

Geneva

to

the

somewhat modified by the present
day Russian authorities,
that is but a detail. If at any time in the

—

Chicago

ing
year

•

Lithographing Co.

HAnover 2-0600

thinking dur-

^

■

25 Broad

i
-

,

*

York

which

nected—Editor.

Havana

Members New

taken

tunity offers itself.
always has been.

•

33)

of Philadelphia.

article

in

surprise him
must be a naive soul. It has been
plain as a pikestaff
for a long while that Russia intended not
only to restore
her old pre-World War I
borders, but to proceed as
circumstances permitted to realize the ambitions
long
nursed by the Czars in the
hey-day of their power and
prestige. For our part, we have no doubt that once such
goals as these are reached, more will be conceived and

halves. The uniform currency now

existing in Germany is

mism

„

Yet he who finds much

meas¬

into

pessi-

business-

Czechoslovakia, this time by one of
our
co-defenders of "democracy," is
certainly. no less de¬
plorable and damnable than the similar action taken by
Hitler in 1938. Stalin's
"suggestion" to Finland will doubt¬
less be followed
by developments Which must be placed in
the same
category. No one in,his right senses in this country,
or
we should
suppose in any; othar not blinded by some
strange devotion to the Russian monster, could for a mo¬
ment excuse or condone such
things as these.

would be another step toward

ures

under-

lying

ized, much.

Stock Taking

The enslavement of

Allied Control Council to agree on

mutually executed reform

the

has character-

agree¬

Germany, and that

fion

.

and

but no

- with " Soviet
representatives
in
the

currency

of

program

understanding

Russia's

made speeches

ter

another

who amounts

has at least

what

of

During the last
General Clay has

months,

to

own

on

reform

discussion,

ment was reached.

out

articles

for

mitted to pub¬
lic debate; in
every

Fred H. Klopstock

tion "at Tast".'

orm pro¬

grams

confirma¬

as

EDITORIAL

years.

undertaken

of

Members New York Stock Exchange
Members New York Curb Exchange

30 Broad St.

and

111

New York 4

other

Broadway,

REctor 2-3100
Tel. DIgby 4-7800

Tela. NY 1-733

York Stack Exchange
Principal Exchanges

Members New

Boston

N. Y. 6

Teletype NY 1-2708
Telephone: Enterprise 1820

r

2

COMMERCIAL

THE

(994)

Bonds

National Railways
of Mexico

/

.

Thursday, March 4, 1948

Alabama &

By ALFRED S. RUDD*

,

Steel Analyst, Shields & Company

Members of the New York Stock Exchange

Louisiana Securities

Mr. Rudd reviews progress of

steel industry in recent years, together, with immediate, as well as longrange, outlook.
Sees no slackening in demand pressure at the mall level,,and estimate* probable in¬
crease in wages of steel workers at from 10 to 15 cents an hour, accompanied by advance in steel prices.
Predicts percentage profit margin in 1948 will be b»Iow 1947, and thereafter, because of higher break¬
even points, total profit rates may be lower.
Does not look for serious decline in demand for steel, but
concludes peak in steel company profits has been reached and stet! stock prices, on comparative basis,

Issues

All

FINANCIAL CHRONICLE

The Outlook for the Steel Industry

the

of

&

Bought—Sold—Quoted

New York Hanseatic

Corporation
Broadway, New York 5
BArclay 7-5660
Teletype NY 1-58?

not out

are

120

B o ugh t—S old—Q uoted

Members New York Stock Exchange

As,the topic today is "The Economic Outlook for the Steel Industry," I will not bore
you with a multitude of statistics reviewing the industry's rather hectic past;
It will
suffice to say that up to the 1930's, the industry was consistently profitable.
During the

25 Broad St., New York 4, N. Y.
HAnover 2-0700

.

peace

Longchamps, Inc.

found

months of that

the continuation of price controls

Bought—Sold—'Quoted

decade, under
the impetus

j until the latter jpart of 1946. It
1946

that

steel

due 7/15/72

The International Bank
For Reconstruction

Development

3%

in

steadily rising costs.

NEW YORK S

Tel, REctor 2-7815

2%%

late

due 7/15/57

New York Curb Exchange

our

branch offices

Mar-Tex Realiz.

the combined results -of 14 major

companies, which make

price to

not until the ending of

break, the in- makers received their first real
dustry went' opportunity to demonstrate their
off into an¬ earnings
capabilities under full
other spiral peacetime
production, and the
of rapidly as-; record; of the ensuing year *1947
is
quite
startling..
'
cending pro-,
That year, was, of course, the
duction and'
substantial first full year of virtually unin¬
Alfred S. Rudd
profits. Dur- terrupted peacetime production.
the period of It found production totaling up¬
this 'country's involvement in ;the wards of 85,000,000 net tons of
war,
steel
production
forged ingots, equal to approximately
ahead to a further succession of 93% of capacity. That production
new
peaks but the industry's was approximately 27% larger
profits gradually faded under the than the output in the previous
impact of excess profit taxation, year 1946, a similar amount larger
price controls, renegotiat^n, and than 194Q, which constituted the

New York Stock Exchange

and

was

controls

out¬

war's

of

120 BROADWAY,

Direct wires to

finally came, the industry about 50% over 1937, and some
itself unable to operate 34% above 1929.
The profits of the industry were
one
but in normally, for a time, because of
the closing,the onset of labor troubles and equally
interesting.
Judged off
was a

rather sorry

Members

NY 1-1557

New Orleans,La.- Birmingham. Ala.

t h

1 9 3 0 «

showing

McnONNELL&ft).

Co!

Steiner, Rouse &

of line.

90%

of' the

profits

in

mately

50%

80%

up

capacity,

were

approxi¬

above

and

1946,

and

1937,

iequal to 1929. As

a

Oils & Industries, Com. & Pfd.
Elk Horn

Coal, Com. & Pfd.

a

1940. They were

over

over

close,

trade's

1947

like amount

up

Federal Coal 5's,

w.s.

about

matter of fact,

if we exclude U. $. Steel from the

compilation,

we

gain in 1947

over

was

j the,

find

a

substantial

1929. U. S. Steel

major

.'y (Continued

on

producer

page

34)

Association

of

V

Broadway, N. Y. 5
WOrth 4-3113

Bell Teletype NY 1-1227

^Special
stenographic
report,
prepared for the "Chronicle," of
an
address by Mr. Rudd before
the

Mempers Baltimore Stock Exchange
120

only

Customers'

Brokers, New York City, Feb. 26,
Then, when previous pacetime record, and was ; 1948.
^

Central States Elec. (Va.)
Common

Detroit Int'l

Bridge

Aspinook Corp.

Cl, INC.

WM. E. POLLOCK &

20 Pine Street, Hew York 5, N.
HAnover 2-8244

Factors in Raiboad
-j

Y.;

Loft Candy

By HERBERT F. WYETH*

.

Railroad Analyst, Shields & Co., Members, New York Stock Exchange

Teletype NY 1-2846

f

Secnrity Analysis
V

Frank C. Masterson & Co.

Mr. Wyeth, contending railroad industry is not decadent, but, on contrary, one of most
consistently prof¬
itable businesses, reviews improvement in its general investment status through debt reduction and
amortization. Holds railroads can successfully compete with other transportation
facilities, and higher

(Xctual TTlafKeU Qu

ment

American Time Corp.

I

Baltimore Porcelain Steel

am

honored to have been asked again this year to address you on one of our coun¬

try's major industries, and one of our largest and most troublesome investment fields.
magnitude of this problem is obvious when it is considered that there are outstanding

Bates Manufacturing

Boston & Maine R.R.

The

Clyde Porcelain Steel

with the publie
close
to

Electric Bd. & Share Stubs
General Aniline & Film "A"
Hood Chemical

railroad

Kirby Lumber
Northern New England
Punta Alegre Sugar

total
up

$7

Taylor Wharton Iron & Steel

-

Pacific Telecoin

ment

Time, Inc.

some

Title Guaranty & Trust
United Artists Theatre

mass

U. S. Finishing com. & pfd.
Taca Airways

of

quipment debt,
and $8 billion
of these

Telecoin Corp.
.

&Teen.e<mivompanu
Members N. Y. Security Dealers Assn.

Hanover 2-4850

Bell Teletypes—NY 1-1126 As 1127

secu-

riti.es'

are

traded in

on

a

be

he

freshman

an

cus¬

of

reason

for the

misinformation that cir¬

operations*

prospects, and securities. This is
also responsible for much of the
grief that has accompanied in¬
vestment or speculation in rail¬
road securities, arid for the highly-

of stocks. Most

Merchants Distilling

or

year,

culates about railroad

equip¬
d e b t,
$6 0 0

million

one

probably the main

made

e

United Piece Dye Works

as

economist

of roughly
billion of

non

long

tomer's broker, becomes an expert
on
railroad
securities.
This
is

This
is

—

as

secu¬

rities.

Newmarket Manufacturing

<S>

billion
value of

$16
par

International Detrola

Herbert F. Wyeth

the New York Stock

Exchange.
Unfortunately, it is almost axio¬
that
any
one
connected
with the financial community for

matic

In

its

poorest

depression

1938—the railroads

ported

as a

H. Hentz & Co.

than

$500

million

charges. As

available

for

matter of fact, very
few individual roads have in any
a

year reported

One

operating deficits.

reason

Members
Stock

Exchange

Noranda Mines

United Kingdom 4 %

Curb

Exchange

Brown Co.

Rhodesian Selection

Minn. & Ont. Paper

Gaumont-British

Placer Development

Scophony, Ltd.

Chicago

Board

of

New Orleans Cotton

Trade

Exchange

And other Exchanges

Members New York Curb Exchange

Chicago Stock Exchange

;

Digby 4-3122

Teletype NY 1-1610

Texas Eastern

Transmission
Prospectus

Exchange Sldg.

NEW YORK 4, N. Y.

Canadian Securities

British Securities

Department

Department

'90

Soya Corp.
Great Amer. Indus.
U. S. Radiator, Pfd.

Goodbody & Co.
SIEGEL & CO.

Members N. Y..Stock Exchange and Other Principal Exchanges
CHICAGO

DETROIT

PITTSBURGH

GENEVA, SWITZERLAND




on

Request

■

■

.-..v......

Troster,Currie&Summers
Members

New York Security Dealers

Ass'n

Teletype—NY 1-376-377-378

Empire State; Oil
Utab Southern

115 BROADWAY
Telephone BArclay 7-0100

/

NEW YORK 6, N. Y.
-

Teletyoe NY

S9

Broadway, K Y. Ji

,,

DIgby 4-2370

Teletype NY 1-1942

Oil,

Equity Oil
■

N. Y, Cotton

New York 6

39 Broadway

Market* in U. 5. FUNDS for

York

Inc.

Joseph McManus & Co.

ACTIVE MARKET!
We, Maintain Active

York

Exchange v

Securities

group re¬

by Mr, Wyeth at the
Investors Forum of the

New

Exchange,

•

operating income of
roundly $375 million, with more

why railroads and
railroad securities are eyed with
suspicion by many potential in¬
vestors, and suffer psychological¬
volatile nature of even the best
ly in relation to industrial com¬
railroad securities.
panies, is that the weak sisters are
In many quarters the railroad rarely, if ever, eliminated. If an
industry has come to be consid¬ industrial corporation consistently
ered a decadent one, able to re¬ loses money it just eventually
port profits only under conditions goes out of business. People for¬
of unusual general prosperity. Ac¬ get about it. This is not true of a
tually, from the point of view railroad. Railroad operations may
of operating results it has been not; be. abandoned without permission -of the Interstate Com¬
one of our most consistently prof¬
itable enterprises.
The industry merce Commission, and there are
as a whole has .not in any year
very few cases on record where

New

York Cotton

Curb and Unlisted

net

such authority has been forth¬
ever failed to report an operating
profit. This is in marked contrast coming. An unprofitable railroad
Columbia University Institute of to most of our other major indus¬ just continues to pile up deficits
Arts
and
Sciences, New York tries which, nevertheless, enjoy year after year., a constant refar greater investment confidence:
City, Feb. 26, 1948.
:
: (Continued on, page 12)

Established 1856

Commodity

HAnover 2-9470

*

year—

*A lecture

Small

New

NEW YORK 5

Teletype NY 1-1140

.

Artcraft Manufacturing

37 Wall St., N. Y. 5

*

^

York Curb Exchange

64 WALL ST.

be largely offset by labor saving improvements. Sees more liberal attitude toward establish¬
of fair rail rates, and urges study of individial railroads rather than the general
industry in
making investments in railroad securities.

wages can

Aetna Standard Engineering:

Warner & Swasey

Established 1923
Members New

•

JAMES M. TOOLAN & CO.
67 Wall Street, New York 5, N.
Tel. HAnover 2-9335

Y.

Bell Tele. NY 1-2630

dumber

Volume 167

4678

THE COMMERCIAL

&

FINANCIAL ^CHRONICLE

(995)

IN DIE X

ill

and "News

Articles

3

Page

German Monetary 'Disintegration and Reform ^Possibilities
—Fred II. Klopstock
/Cover
__,

Ry SCHRGEDER BOULToN

A rNew *LOok -at

feflatibn—Clifford lS. Ydurig-..____i..,.__Cdv^r
for the Steel Iridu^y—Alfled S. T?udd_-1
2

The Outlook

Attaints—'Herbert

Factors in Railroad 'Security

F. Wyeth___

2
*

The Stock Market in 1925 and TOday-^Scihroeder 'Boulton__I
Industrial Applicatibh bf NucleariT5nergy—-Lyle B.
Death df a Bear Miarket—Leonard S. Herizig-_

3

J4

Bori3t____

ahd'Cfedit COriti'dI--fJdsCphiMjDddge__
lttVe$tMerit 'Otitlook ior 1948—:Let>narci Spangenberg
The 'Bank and Inflation—John D. 'HOspelhOrn__
^Shortcoming's of TtRP-^Erftest T. Weir________.:_-___;
,

.'___•

.

15

which

16

re'turn

HaVe U. S.-BcViCt Accord and Avoid "World CrishI
—James

Warburg
Marshall Plan Will Aggravate Comintinism ih Europe

World

17

"—Rep. Frederick"C. Sri?—
18
Tnto the totshall 'Plan—Erie Johnston 19

d'h

——

V

•

'

*

Association Dinner

_____•

Repudiation,

interest as

■__

Frauds,_

Ferd

)Kramer Recites ReCent Changes in'the Mortgage Market 9
JWall Street Men Patronizing -Pierre's Restaurant._ ^
10
"Brooklyn 'Chapter of NACA10 Broadcast Tax - Advice___
AFL Financial Employees

UnidnDomplaiits Against

10

2 '

-

'cr

;

Deposits

down

Treasury'Operations

'-v- iLi. _ ^la ---

-

.

#1

_i_

Gordon IB. Todil, Five OihCrs Accused of 'Fraud and Dshry^_ -23

"FlC'BanksTlaceDeberitures2_2_-___-_-_2_-<--:__r-_^___-__-23
First National Rank Of DOSfop Holds Commodity /Break a
//'•

:

-'Warning -'Signal

$300 Million

__

-Alien Property Office

____ _ _

_______________ __ _ _

^

24

2—__

^ _1

^

JjJ.

->22.

* --- ■

Reserves at $7 Billiori____^—:V._; __
Standard 'Oil of Indiana ArrahgCs 'Debenture Sale—_
ment

I—

_ _

(Editorial)

attemptirig ;;to

•prove*

year,

1925, 'to see whether

rate

.profits

mated >at

for

1947

tWears® T^46-48

^0

;

83

■:

tural

_

Einzig^>IIow'Britain Ffghts Inflation-.—__2__„2_1_—__
Washington - Ahead 'Of-the N"CWs;—Carlisle Bargefon

•From

Indications If Business Activity—> _ I *—_•Mutual- Funds _2'—_22222——^__

L J-

__ _ __

_;_

2-2

_—,—2.2J

_

„_

_——2—__ _ ^ _—___ a _•

'43

GOverrimCrits._______c___2

-24

_

_ _ __

__•_

__—_

•

T4-y

2-2
20
andDShk^rs—
WiffrCd May—___-2.__—22________-2^__ 2—2 6

Dttr Reporter^ 'ReUort
on

.

2-14

NSTA* Notes'-2__

DurReporter

87

•

;

42 >
Prospective security DffCriitgs^ 1 __2____22__—2—2_—2Public -Utility - Sedilrities—_*2—_
^
2_
22
^ 2—— —2R-.,
,.?'i
*.;
Railfoad SeCurities l22'223i2_2_uj2___>-

in

view

.

pdiitieil

World

df

_ _

_

_ „

Eeeufities j'Saiesihan?s^-2-

-

developments.
the

20*s, in

Z I /2 0

Securities"Notv fn Registratfon2_2_t_ 2_—2_22-_
_—__2.2
Stdte 'of Trade-Und -Industry
~2f—.--Tomdrrow's Markets (Walter Whyte Says)

-The

~'

t.

______

__

;

-5

i

34

?

"44

Washington and You__—2^__2i.2'2.;_:_—2_2^222_2_2u22^2_-.

I

W;oniTeTactoik—

.

,

"

—:

Net-

:

--25fPatk>iade, Rtfw" brork % N.Af.
A
"^ctbr 2-957010-05^ /
j[ERBERT P, iSElOaRT,. Editor^ Vuiillsaer
~v

D.

.

.

13S

•

extra.)

;

bankfClearings,'
•

•

i

!

B: :La ;

Federal

Market

Copyright 1948 By "William B. -Dank
^
• Company

:

;

Reentered'
_

1879.

'2

'

." 2

.

post 'Office at New
the- Act, ol March

_

„

•

"SubFcripttoii 'Ra^es

Subscriptions7 in United States, TT. • 6
ossessions.-TerrJtnriee '4"^ **irnW« • r>+*
an-American Union, $35.00 per year; in
,




$1,306

Southern Production

I65V0.

Soiiithwest 'Natural Gas

$17,800,000,000

$6,000,000,000

.$4,9CO';0OO,OOO

Member

20-25 %

Margin rRequirements

$40,000-$00,000

•

Number

of Liste'd '"Shares—

75%

-

'Commonwealth Gas
'United Public 'Utilities

'

(Com.)

Purchased With Initial

^$10,O(jO 'EJquity

Brokers:

Southwest Gas Producing

$28,900,000,000

*$7i75ocr,roo,ooo $174,500,000,000
$22,000,000,0001 $30,700,000,000

Ba'nks__

Tele. NY 1-2425

Loans-

$13,300

$300:000,000

$3,503;000,000
503,200,000.

.
-

1,907.000,000

459,700,600

Turhover of Listed -Shares-,--!-'—4—
Dow-Jones Industrial Stocks, ,Price Raitge__^_l
Dow-Jones Industrial Stocks, 'Earnings-A—

253,600,000

,

*

•

'

-

14

■

$12.39

$5.53
Dow-Jones, Industrial Stocks, Dividends)___—
Price-*Earnlngs Ratio --——,—*—,-——~~r~ CatTowhvX times
.4.8%
•
4.9
Average Yields, A1+ Bonds-—TJ—.——
4.2
Call -Mohey-Rates——

.,

''

'

'

$17.00

'$9.21

9.9 times

5.5io

--

.

•

Edward A. Pureed & Co.

168.0

115.0-159.4
r'

.

-2:9

>

1.5

f

Members New York Stodk

Exchange

Members New York -Curb

Exchange

50'BroaHway WHitehall "4-8120
Bell System Teletype NY 1-1919:
New York 4, N. Y.
•

m

TITLE COMPANY
ifre

CfRTlPltATES
Bond & Mfge. 'Guar.

5Co'.

are

interested in offerings iff

B. V. D.
:

^Eligh Grade PublicKjtility and Industrial

Lawyers ^Mortgage -Co;

1

PREFERRED STOCKS

Analysis available on Request

N. Y. Title & Mtge. Co.

Socncer

-

Prudence Co.

Exchange' * /Members- New York -Curb Exthange
^lew, York L41- 4^35 B./La Salle St., Chicago 3
HArt'over 2-4300
i
' '
;
:TeI.: FfNancial-2330

Members tieio,

Newburger,Loeb & Co.
M&mb6r$ fNew

15 Broad

Yvtk*Stock

BeD

TeietypA NY

1-2033

Yorkt Stock

25 'Broad Street^
-

Tel.:

Exchange

SuR.%5 *.1 "WtRteliiU^SO

Cory.

/

.

Lawyers Title & Guar. Co.

second;-"class'matter T'ebru-'

25; 1942," rit 'the
'ark,
N.. Y.,. under
iy

Reserve

New York 5, N.Y.

144,000,000

.

$49,2CO;6rO.OOO -$141,700;ooo,o6d

-All' Bariksll;^—

^t.

Tel. HA 2-

'''•

v'

125.4

in 'Forces—•__%

.

,

■*

', $641

tLt; i

|

Salle •BU,?
ihicago 3> I1L (Telephone: State .'0613>;;
Drapers'- Gardens, London, E. C., 'Eng.ind,vc/o^Edwards•& Smithr. •
■
-

*• (Foreign /postage

f«nittances for for'ign subscriptions, nnd advertisements miist
^e 'tndde In New-York'funds.

Every Thursday IgeVieTal hews and ad-<
ertislrig tssue) land "every ' Monday f(com-,
Iete; statistical issue — market quotatioh

Other" -Offtces:

Quotation :Refcbrd—Monthly,

CORPORATION

Factors-

'Demand "and Savings Deposits

TMtana^er1

Thursday, March '4, 1948

ecortis, corporation heWs,
tate"arid city ncws^ etc.);

'and

;

FIRST COLONY

..,$511
,

Value of Stock Which May Be
•

the" CateA>f exchange,

eElbEkt^fesident

KIGGS, Business

yedr.

,/Monthly- ^Earnings' Record 22. Monthly,
$25.00-per year,
(Foleign-postage extra.)
"Ndter-Oh ;ac6ount':of the'fluctuations in

••

WILEIAM

$38.00 per
Countries, $42.00 per' year.

'Bank

U.2S. Patent Office
• %.fDAXA CCfiXPXXY, 'Piil»uilie:rs

HvitritAM pAXA

Other

fr>25.00 ; per -'year.

'■t'];qne£
flLEIAta

Jbominion, of ;Canada,

^Otlier/publicdtibhs

FINANCIAL CHRONICLE

-

,,

Bulletin

$73,76o,OOp,bOO'''$l$8;OOC,0OO,OOO

,

COrpofdte ;Prbfits_v

"Financial

,

:

...

_..

>15^000,000^

—...

Peal Irtcoirne 'PeV'Cfiblta_,__t_J—_.L.

Loans—All

j

Prepared

on'Request

.

Disposable'income Per Capita (annual)
Living COst Iri'ddx "('BX.B.

Life-Insurance

and

i dnd

'available

only 'from'
-31)

"1925—■■* Latest
90
'
192

.,■,

(F,R.B.)—1
5

/Disposable Thcbme rof Individuals (Net ;after taxes)

Stock

COMMERCIAL

fProspectus

on -page

■economic comparisons

few
...

Net

See afticle'Oh Rage 8.
vlPiibl!Sfted rTwi6e Weekly

N. Y.

Stores, Inc.

52 Wall

Production

Population

increased

*(Continued

'Moiiey 'in 'Citculatibh_-in.___—

The

25 Broad St., New York 4,

WHitehall 3-0272—Teletype NY 1-956

.

:banks .have

Urilike 'the;
acute

*

'

Industrial

40
—

/Members N. Y. Security Dealers Assn.

/Certain

preseht period

•:4::/,;a

_

-22.2 u 2 2 j

Susquehanna Mills

*

_—

_ _

Lea Fabrics

Warden Brothers "C"

yields approximately 55% higher fhan
Unna¬ in/1925.
■■;/... ■
:
' '
■"/

able

mi

RCfeohiniendatiorfs—_ 2_

Alegre Sugar

^Hydraulic Press Mfg.

s,-

i"

'

Dealer-^Broker TnvCstnient

Punta

income of individuals, after 'de¬
ducting applicable income, taxes;

i'eseriiftlje

lpWCr 'than in 1925. <artd
higher, eirOuhietartces rtOt

[

:_2 16

'Comirtg Evehts in theInvcsthieht Field._—___

Teletype N. Y. 1^714

is at a rate of abOUt' $108lOOblQOO,-

!-

—

,

,

Broadway

'approximately '$17;800,-;

i

2___

Bell' System

esti~;

Ore

Observations—A

Dobkshelf

Securities

Cahadian

1908,

SecMty Dedlefs^Aisn.

REctor 2-4500—120

are

*we

News Abbut-Bknks

-Business MUn's

Established
Members N. Y.

better mff' or worse Off m -finan¬

banking figures
are
tensions, and the technical Obsta- equally impressive. "Deposits of
elds'Offered''by i? creased personal sill banks (eliminating iriter-barik.
Income taxes ^rinci by stock 'mar-.; ^deposits) now amount, to approxi-^
ket credit restridtions.
Also, the mately $142,000,000,000 as -com¬
intellectual and-emotional climdtA paredwith $49,000,0001000 in 19251
of our times is Unfavorable, with, Growth in deposits largely has
investors 'reacting warily to "real reflected mqrietization of ;the in-;
or
•imagined adverse
develop-, crease in Federal debt; bank loans'
meittSj arid skeptically to laVor- of all Federal Reserve member]

—

J.K.Ricc.Jr.&Co.

With Ihrit Other Skeptical pbstwarl
'

.■

By late '1927, skepibeen' supplanted "by

»had

idd
profits

w:_2C-2X-2^-^-2-2---P--rl-2::C0ver \

Stocks—

Bank and Insurance

-

•

' 'i

year

p r

RegUlar Teatures '
As We See It

Othdr

(Stubs)

Engineers Public Service

indd^trial 'pf-Odudtion, for a 25%. increase in popiiiatioh,
• and
dividends.
Price- 1hd a 32% increase in / .living^
earnings 'rdtiOs have been even* Costs, real income "per. capita is

25
25

__________

___

■

Finishing Com. & Pfd.

Electric Bd. & Share

J

Iri /presence df widespread ;000 per an-lUm Us compared /with:
expectations- *0f - declines /toward an adjusted 'estimate of "about
prewar
levels
ii
dOminOdity "$74,000,000 000 for 1925. Alldwing

Doard Estimates Unemploy¬

National Industrial Conferenc'e

economists.

more

1^15

24

4-6551

n

The

Reports Increased RCal Estate 'Investment by -Life Insurance /

/Companies -

Boulton

-

drily ^ tentious, relationshio 'to
dhao gee /Within Hu^iiiess Itself., |

-24

cash

STREET, NEW YORK

liave at least*

general /'Optimism, and 'the finpl ooo boo as compared With about
two years of financial boom bore' *61000,000,000/ in/1925. Disposable

-

ExportTmport Batik "Grants $6 Million Credit to. Mexico_
Treasury to Transfer Jurisdiction Over Blocked 'Funds -to;

h e

ficnm

; ■
New Tcirk State Bonus Borid3__.—;___-_a2_/23

■

Schroeder

■'

-

factor

•range In 1025.

23

National Ciiy-Cha?e Dank Group-Market

900%

we

U. S.

Of minor recessionj cial strength ;arid -in economic.
aggregate •manufacturing; Welfare, A few brief comparisons^
:prdfits Were 40 % below "those1 of are ebown in * the 'following 'table..
1925, stock prices were a good' The Index of physical industrial
deal highfer, the D0w-J0;nes in¬ production at 192 is more %am
dustrials ranging between 153 ana twice the 90 rate-Of T925. Despite
-202 "ris Compiled With a 115-159 higher income 'taXes: 'net corpo¬

19

Again -Divorced from

20's,

Without

Vhdiigedv In 1927, the FOrd shut¬
w

Fairless Defends Boost -in Seihl-Tinished-StC.el-Prices

than in the

of

anything, arid"admitting the many:
p on-comparsiBlfe' factor,' It may be
•interesting !to compare;this 'period'

'

-

f 4

n

scieriee

SkOptiVallDerioa

_

r— __ _

•^'JERP'Countries
Elliott Dell Sees Bank

o

dbnefe'

/ 17
McOloySays Next World Raiik Bonds May Be Sold Abroad. "17
Snyder'Explains U. ^. POsitioh oh ^Currency Devaluation In ;
__ __ ___

_

'r *e's

jn *the_ disrhal

Comparisons TVIth the

sions, 'the

;

.Wall Street 'Firms—___i_'^___—__-____-—__ 10.

■

Snyder Presents Views oil Tax 4Reduction_

-of

TOss

.d * eip

who

Coal¬

to

Kingan Com. & Pfd.

perts

did "ript iprOg- " *.
to major -i

_ —_ _

Financial Analysts -Holding 'First Convention-2 _/_ 1L;i/22. _L 10

trader

him

Dorset Fabrics (w.d.)

economics.
Although 'We may
haVe ;90% fewer financial leadei-s'

d'ivi-

velopmeht of
!minor
recesSidri's w h i'c h

'8

_ _

,

;time, and de-

Dollar-Bond

_ _

able

tell

Telephone: WHitehall

a;nd

proigress

6

99 WALL

^prices, profits

5

______

Luisri Criscuola Deolores Reduction in Italian

-o n

should

them in at B. S. Lichtenstein & Co.

'apprehensions 'have been stimu¬
lated alike by Washington politi¬
cal quarters, by radio commenta¬
tors, 'as Well-as ;by a hbst of ex¬

I

o^ prot i

c

otherwise

tip obsolete securities.

sense

'<*>-

'dends, TV i't h

Expect'Large-Attendance at New York Security Dealers
/Form New York State Securities-Bureau-to Handle

War

levels

Let Private Enterprise
1

to¬

ward the pre-

P.

hoards
men

Nineteen twerity-five was oiife'of'the pfeak bU^iiiess
:years fol¬
lowing 'World War I. ;It also was almost the last year 'tif ;the 20's in
-common ^stocks Told
at low 'price-Ostrnings 'ratios 'to Tettirh
High yields, reflecting Widespread apprehension that busirieSs would

7

'7

Canada's Rxchahge Disorders and the Remedies

—Donald'Gordon

-^■as ;an

pm'Cltichs al.hough business downturn is certain, sWk
'market nevertheless is ^heavily spotted With
'bargains.".

■6

.

SO STRANGE

profits.

4

The Dariks, Inflation

NOTHING

Market kndlySt aisefts >feserit pfice-earniiigs ratios, lower Ihkh
in 1925, fsMarly f^ecl Widespread unwarranted
'expectations
tif -itiilines Tb-.vard "pre-War ccmihb&ty
pricas, production, anil,

4

•

"Albany

-

Boston

-

Teletype-ZNY l-S.

'Glens'Fails

-

-

•

-

"Schenectady

-

.•

Worcester

C. E.

U«terberg^&;Cb.

Members N.

Y. Security

Dealers Ass'n

ISl'BroadwayjNew^ York 6, N.5Y.
Telephone BOwling Green -9-3565
Teletype NY 1-1666

THE COMMERCIAL

(996)

Industrial Application
Borst describes progress in

Dr.

Partner, Sartorius & Co.

Reactor Project, Brookhaven National Laboratory

industrial

utilization of nucbar energy and efforts to apply it to

Mr.

Herzig maintains that stock market's technical behavior during
portrays typical period of major accumulation.
Concludes this, together with public's present uncertainty, warrants
expectation of early rise.

pur¬

past 18 months

"open sesame" has yet been learned, and in foreseeable future electrical power will
be generated by conventional heat engine. Points oil availability of only a meager amount of uranium
having efficient quality for transmission of nuclear energy and predicts, because of our large coal
resources, use of atomic power may not become as economically sound in U. S. as in other countries.
Sees difficulties arising from security regulations of Atomic Energy Act.

Says

no

'

applications of atomic energy will be legion—but will certainly not
joint statement of faith and reservation is the common feeling of
of the people directly associated with atomic energy development. We have faith

most

ti

first

the

of

chain reaction

marks

the

beginning

of

—

atomic

the

age.
An age
which will

character¬

be

ized

fur¬

by

ablished

by act of Congress:
hereby declared to be

is

.t

.

.

the

policy of the people of the United
States that, subject at all times to
the paramount objectives of as¬
suring the common defense and
security,

development

the

practicable, be directed
improving the public wel-

far

so

and
shall,

utilization of atomic energy
as

toward

rare, increasing the standard of
living, strengthening free compe¬
h i s
environ- tition in private enterprise, and
ment
his Promoting world peace." This in¬
physical
and dustry has the advantage and per¬
biological en- haps a few of the disadvantages
ther

of

triumph
over

man

—

Lyle B. Borst

of

smd.

must always be
faced with the difficult distinc¬
tion between "dangerous" activi¬

perhaps,

his social environment. Pro¬

changes will come, but they
are not "just around the corner,"
for we face new problems requir¬
ing time, ideas, manpower and
money to solve.
Some of

government control.

vironment

found

the problems involved
in the development

instance

for

This

industry

industries.

agree

ciated

that information not asso¬
with military applications

must

necessarily

many

that

the

obstacles

between

state

knowledge

of

present

our

and
your
Ford
exceeds,

freely

be

have

who

You

cussed.

so

d'sgra¬

ciously contributed the $2Vz bil¬
variety and complexity, lion have every right to know
the problems facing the inventors what you are getting for your
of the internal combustion engine. money.
It is important that you
In fact, it is doubtful whether the know what we are doing and t^at

atomic

powered

in

both

difficulties
in

can

be overcome

ever

this particular

application, for
just don't know how to build

we

safe engine weighing less than
about 20 tons.
i,
a

Before

.predicting the future,
however, let us take stock of the
^present.
The
development
;of

plans.

our

We

regret that in many cases we can¬
discuss completely and can¬

not

didly all the aspects of all the in¬
teresting problems in which we
are engaged.
There is nothing jl
would enjoy more than to discuss
the work in which I am engaged,
the design and construction of the
Brookhaven Nuclear Reactor. The

industries

building this peacetime unit are
justithose-met in building a Plu¬
tonium production pile. - It is an

go. "Most of this money

I has beep-, expspdqd through
in¬
dustrial contracts. At the present

time General Electric
&

Co., Carbide
Carbon Chemicals Corp., Mon¬

santo

Chemical

Kellex

The

Co.,

Corp., Standard Oil Development
,Co.

of New

Jersey, and 2 to 300

other-industrial

i

of

approve

atomic energy up to the present
has cost about S2V2 billion—not
an
inconsiderable sum even as

'

.

you

tracts

with

concerns

the

hold

Atomic

con¬

Energy

problems

we

have encountered in

fact

unfortunate

nature

of

that

the dividing line between benefi¬

J

Geiger
counters, electronic circuits nnd
tubes, special steels and non-fer¬
rous
alloys, graphite and lubri¬
cants to U-235, Pu-239 and an
assortment of 100-odd isotopes,
both

radioactive

the present

flung

time

established

stable.

and
we

have

and

a

industry

seems

incomplete.

going

This is

has

been

common

industries.
knowledge

that atomic nuclei were potential
sources

of energy, and

tablished before the

far-

energy

a

government-controlled
the policy es-

*An address
by Dr. Borst before
i the American Society of Mechani¬
cal

It

fission,

in¬

of the most direct

one

and foreseeable future

nuclear

it

was es¬

discovery of

that the source
of the sun was

of the
such

Engineers, New Orleans, La.,

March 1,-1948.

full

its

a

power

level,

will

but

operation at a reduced
However, this initial dem¬
onstration will not inaugurate the
atomic

of

era

by

power

any

It will be another 10 to 20

means.

1948, less than ten years since
of fission, we have
installations making heat at the

the discovery
rate

of

thousands of kilo¬
watts.
Unfortunately the heat is
generated at such a low tempera¬
ture

many

that

efficient

electricity

generation

is not possible.

of

How

tors

aimlessly

the 1946-1948 bear market.
not unt'l

staying

before

years

industrial

of

source

as

it

a

Let

power.

that

remember

can

has

taken

than

more

a century to make the
conversion from coal 25%

energy

efficient.

'

We have

'

long and hard
or a trick method of getting elec¬
trical energy directly from the
chain reaction. We would greatly
enjoy building a chain reactor
two

carry

away

range

approxi¬

points

Herzig

27

Jones

for

,

a

period of
inexperi¬

To the

ing as it has from all fundamental
statistics, seems meaningless. How
it

be

that

sold at 200-210

that

average

per

share

comprising
earning $13.80
sells at 160-170

stocks earn

same

share?

per

stocks

were

now

when these

the Dow Jones

on

when

average

which

market

a

How

it

can

$17.40

be

that

stocks

looked

with

a

enced observer this action, diverg¬

can

wires

sell in a high range with
two years still to go of an admin-r

istration traditionally unfavorable
to business and 50 points lower
when

change in that administra¬

a

is

tion

probable

leading out to
t're energy at a mod¬
est voltage of a million or so volts.

months?

There ought to be a way of using

Can

farm

in

it

Can

matter

a

be

bearish

commodities, to

of
for

rise

and

equally bearish for them to fall?

the bearish prognostications
We cah get which were first made as long
electricity from a reactor ago as 1945 and which have proven
directly — in fact, we normally as yet unfounded be extended in¬
control it by this means.
We can definitely? .. How
long can the
even dream up a system by which
American public, constitutionally

this energy directly.

some

,

we

achieve

can

ficiency.
such

reasonable

a

ef¬

The only trouble is that

system will not support ia
chain reaction.'
v
j
a

So

far

have'

we

"open sesame."
generally

learned

We acknowledge

that

electrical

power,

for the foreseeable future,

generated by -means
ventional

engine
from

heat

no

will be

of the con¬

engine.

Such

an

must
necessarily vwork
high temperature source.
one
present, difficulty.

;

October,
made

other

partially
stock

period

operate

in a. complete vacuum, or is this
period, when two plus two do not
seem to equal four,, purely a (tran¬
sition phase—a technical phenom¬

which

enon

and time

has

happened

time

tion

again?

stage

stock

and

close

ironies

of

at

It

of

appropriate

is

nature

engineering

point

of

one

that

the

common

materials,

such

as

of

ferrous metals and most non-fer¬

bear

To those who

may

not

be

inside

used

neutron reactors.

thermal

Those which do

not absorb neutrons lack mechan¬

ical

sive

corrosion

tional

at

the

The

materials

exces¬

necessary

few

Studies

all

of

7.

•

directed

toward

coming these difficulties
(Continued

on

page

market

struggle

must

of

can

a

be

lived

with.

watch the death

bear

market

with

relative equanimity and buy stocks

in

spite of

the pessimism which
sight engenders, belong the
spoils of the ensuing bull market
—for they will own the bargains.

excep¬

having

these qualities are excessively ex¬

pensive.

mean¬

the

strength and undergo

temperatures.

In the

while, the time-consuming and
nerve-wracking action of a dying

rous

metals, absorb neutrons and

a

stantial proportions.

just as it
rise of sub¬

In

tors

Since

now

made

its

highest

price
It

for
was

not until May, 1946, that the steel
stocks

(U.S. Steel excluded) made

their respective

32)

1946

January, 194-3, General Mo¬

the bull market 1942-1946.

over¬

are

The Market Pattern

not

October,

an

isolated

have

time

seen

dies

slowly and it is agonizing to

again.

bear market

A

toms leading to the demise is one
which repeats itself each time.

Pattern of
First

of

Dying Bear Market

a

volume, as death
dwindles to a very

all,

approaches,
low figure.

Secondly, divergences
after' group of
their lows and, re¬
gardless of the action of other
grouos, they slowly lurn upward.
Thirdly, stocks within groups turn
up while others stay near their
Group

appear.

stocks

make

low quotations. Fourthly, the in¬
dustrial and rail groups usually

diverge.
good or

Finally, news, whether
bad, has scarcely any
the

on

market. "The

leth¬

'

continues.

So

technical

for

much

bear

*

As the

market

slowly dies," stocks
relationship of earn¬
ings to price; they also selLon a

sell at

a

low

large yield basis as compared to
bonds; and-in the more specula¬

:

categories,

the

many

stocks sell

than their quick assets.

From

a

psychological viewpoint,
is either completely

public

uninterested
of

in

the

the

market

or

Stocks

unknown.

cheap, but (so they reason)
be something funda¬
mentally wrong or why would
they sell so cheaply—and for so

appear

there

must

long

a time?
As the bear market
slowly breathes its . last, the op¬
timists are strangely silent—they,
too, are perolexed.
They have
been optimistic for so long that
they are tired of preaching their
credo.
The pessimists, however,
are vociferous.
Even though most
stocks are not going down {lots
of them are actually going up),
the gloom is so thick, the trading
so dull, that the line of least re¬
sistance seems to. be the accept¬
ance
of the pessimistic pojnt of
view. Besides, it is easy to accept

low

tion

to

prices of stocks in rela¬
all

that

is

when

known

they sell there day after day!

Argo Oil

dies

a

./

bear market.

*

9

Electrol, Inc.
Foundation Co.

Bought

Graham

Paige 4s, 1956

Research

-

item

Sold

-

i

j
f

|

I do not wish to take the space

to

Quoted

available

So
<

Ji

Conclusion

Detroit Harvester Company

DuMont Laboratories

,

factors.

What about fundamentals?

the

highs; and while

market

watch, but the succession of symp¬

tive

accumulation

bull

between

is

now

observers

always does before

reactors

temperatures.

satis¬

the

time

operate

materials
nuclear

of

.

and

fearful

a

gently, rising.

phenomenon but something which

tern

available

were

from

market

1946

view, it has not been possible to

Using

the motion picture
lows, although

That which has occurred in the

at less

is

was

1948-?

My conclusion is that the mar¬
ket
from October,
1946, to the
present is not moving aimlessly.
It is tracing out a technical pat¬

a

for

It

October, 1946,
until February,: 1948, will prob¬
ably be considered the accumula¬

materialized?

market

low

new

groups

The

argy

the

probable

May, 1947, that the steel

made

stocks

bearish prediction—none of which
even

its

groups such as

effect

Does

General Mo¬

1946,

stocks followed suit; and recently

optimistic, be hornswoggled into
accepting bearish prediction after
has

time of stock distribu-

a

milling around

Dow

about 18 months.

as

gently

In

mately
S.

nized

declin¬
ing, Schenley made its own high
in August, 1946. This approximate
period — January
until
August,
1946—can now be easily recog¬
were

ket has appare n 11 y
been

of

Leonard

stocks

tion.

within

probably

permit

source.

In

industry, to achieve

:

is

power

atomic

of.

development

The

At

dustry.

as

pacity of this system will not be
sufficient to operate the reactor at

factory from

The variety of prod¬

ucts produced varies from

not

plant so that our power will def¬
initely be a by-product. The ca¬

will pardon me if my discus¬
sion of the future atomic power

you

•

Commission.

and

warn¬

■

most

the mar¬

ing,

—

research

Here

and

special

Our reactor is designed

two years.
for

military application is
neither straight nor clear. I hope
cial

event or

news

generation from our Brookhaven
reactor. If feasible we would hope
to demonstrate power generation
at
Brookhaven within the next

us

priate material for public discus¬
I am sure we would also

particular

no

from this heat?
We are
studying the feasibility of power

present international
circumstances information associ¬
ated with the bomb is not appro¬
the

under

number of

arising in

can

we

atomic energy
compete favorably with coal

those

believe

plunge, which
set off by

power

ties, i.e. those leading to the bomb,
and
beneficial uses.
I am sure
that most of us will agree that

sion.

do

fore

fateful

was

will elapse be¬
generate electrical

years

more

many

level.

of an atomic powered automobile
do not dr'ffer individually from

I

that

year<£

the

at

since$

Ever

This

1942—the year

even

During the period from Aug. 15 to Oct. 11, 1946, the great war
of 1942-1946 collapsed.
The Dow-Jones industrial average
from 203 (the actual top was 213) to 161.
In 10 trading days
the destruction of values was fantastic, the market crashing 31 points.
market

fell

The industrial

immediate.

:e

Beai Maiket

a

By LEONARD S. HERZIG

LYLE B. BORST*

By

poses.

Thursday, March 4, 1948

Death of

oi Nuclear Energy

'

Chairman, Nuclear

CHRONICLE

FINANCIAL

&

diagram how all of the symp¬

toms

described

above

have

been

fulfilled in the current 18 months.
on

request

Bought—Sold—Quoted

They

have

bee n!

Experience

would indicate that the pall which

igman, Lubetlcin

&>

Co.

41 Broad Street




hangs over Wall Street, the inac¬

tivity, the uncertainty, the lack of

Goodbody & Co.

INCORPORATED

New York

4, N. Y.

Members N. Y, Stock Exchange and Other Principal Exchanges
115 Broadway, New York
105 West Adams St.. Chicago
Telephone BArclay 7-0100

<

Teletype NY

1-672

public interest, mark the end of a
stock

of

a

market
bear

chapter—the

market.

Higher

death

stock

prices should* soon he witnessed!

Volume

167

Lumber 4678

&

THE COMMERCIAL
r

FINANCIAL

(997)

CHRONICLE

'

.

5.

•

Expect Large Turnout

Observations

.

.

.

Producttow

Steel

The

At NY Dealers' Dinner

Electric Output

Carloadings

.

By A. WILFRED MAY

Over

Retail Trade

State of Trade

of

Commodity Price Index

attend

Auto Production

Industry

Business

Failures

members

New

York

Association

ers

Food Price Index

and

MUST INDUSTRY CONVERT TO THE PUBLIC

800

the

the

and

guests

Security Deal¬

are

22nd

expected

annual

to

dinner

to be held at the

Waldorf-Astoria
Friday, March 5, according to
E.
Kuehner
of
Joyce.
Kuehner & Co., Chairman of the
on

RELATIONS PROFESSION?

Hanns

Serious Implications of the Steel
The
ernment

and

the

But

Pricing Hullabaloo

has

unsound

the

now

previously been pointed out by this column.
industry's minor and routine adjustment in its

steel

,

price schedules is raising this deification of the
public relations idol and "political awareness"
to the n-th degree of absurdity. For even sound
and
experienced commentators, while making
some patronizing gestures of
acknowledgment of
the technical justice of price change, have been
unabashedly castigating the industry for ama¬
teurish unsophistication and lack of tactical clev¬
erness in calculating the political consequences.

,

To this writer this attitude seems

well

as

self-stultifying,

confusing the public's understanding

as

of the economic issues.

A. Wilfred

•

It was of course to be expected that President
Truman, although probably pleased with the fillip
given to his inflation warnings, would (midst his
Caribbean cruising), with the requisite fanfare,
order four of his Administration's agencies—the

May

Departments of Commerce and Justice, the Fed¬
Trade Commission and

eral

nomic Advisors—on the steelmakers' trail.
It

doubt

that

natural

his

Council of

V

:

Eco¬

/

;

the

Republican leadership should
beat the Democrats to the gun by summoning the steelmakers for
explanation before Mr. Taft's Congressional Joint Economic Com¬
t

no

was

mittee, partly
controls

and

And

as

Defensive step against the stimulation towards

a

partly to make affirmative political capital.
occasions

it

surprise

no

that

loudly excoriated by the Wallace-ites

the

price-adjustment was
fresh proof of Big Busi¬

a

as

profiteering; by the professional "trust-busters," by anti-busi¬
demagogues generally; by consumer groups; by the excess-

ness
ness

profits tax proponents, and by all the people who naturally will vote
in

nay

plebiscite asking whether they wish to be charged higher

a

prices.

;.v"-".'. '■

jy
All the World

/

what

But

is

a

surprising

of

ers

well as disheartening is the

being heaped

the

on

activity modestly higher for the period.
A
slight decline took place in order backlogs in some lines, but new
orders for many goods continued to be sufficiently large to insure
high production well into 1948.
~~
Tne employment situation for the week was good with payrolls
holding at very high levels and claims for unemployment insurance
showing a slight decline.
Favorable weather in some areas resulted in an improvement
with

manufacturing

manner

one

hand

experting

political "strategy."

in

of bad-timing,

that "a bad taste"
and

left in the

was

on

reasons

for the price changes.

avers

most

of. their

;

*

'

-

"A

V

'

~

:

of

sense

statesmanship from raising- the price

Was their justification some kind of smarter "public rela¬

tions" in

"selling" their

Similarly

price boost?

own

is President

inconsistent

-

action
are

their invested capital, whereas he did not

on

sleuths

criminal

their

withholding

200-300%.profit

on

crops

on

to

the

farms,

the

from

when

.

,

" '

.

see

larger supply of

to
.

earn

fit to send
were

promote

Production

•

scrap

work

of

a

well in

advance

The Simple Facts Underlying the Price Adjustment

Although the actual facts of the steel-rise incident quite

evi¬

the

major

theme

highly relevant as pointing
of the merits of the issue..
steel

finished

t(iiarter of
sold

at

up

this; column,

they

and

nevertheless

are

the public's complete misconception

The price changes made do not relate to

products; but represent

adjustment of about

an

one-

cent a pound in semi-finished steel, which had been

a

heavy loss since

a

of

1946.

Furthermore the increase is not

on

allotment

an

tjie;

of

their

competitors

major companies which have-facilities to make crude steel.

subsidization entailed

a

sales volume.

Since

basis.

While

new

orders for lumber

decreased

about

13%, unfilled orders amounted to 58% of stocks.
Looking into the building materials situation, an optimistic note
was struck last week by Chairman Douglas Whitlock of the Build¬
ing Products Institute before the National Association of Home
Builders, when he stated that there should be "adequate production
and supply of materials in relation to expected demand in 1948."
Production of materials in 1947 exceeded 1939,
he declared, by
a

of

*\

V

.*

i

.

At any

ness

1"

"

"

■

;

'

wider margin than physical volume of new construction was ahead
1939.
Part of the excess went into building depleted inventories

and

some

Curb
ness

as

r.

*

and

repair programs.
sales

of

Spring

moderately and compared favorably with that of the corresponding
wecl: a year ago. "f While requests for credit were reported to have
increased in some areas, collections generally were prompt.
/
There
week

was

moderate increase in wholesale volume

a

and the dollar total of orders continued

Exchange and New Yor
Exchange, banks and bus
organizations as well as fi
editors

already

suffering

far

*-

.

••

*

demagogues
too

with that of the like week of 1947.

avoided

prompt.

greatly.

stage of determining

SCHEDULED

number

The

steel

remains

For

Eastman, Dillon

Eastman, Dillon &Uo., 15 Broad

j

Street, New York City, members
of the New York Stock




that

announce

of

ager

their

S.

Mac¬

appointed Man¬

Municipal

ment.

Mr.

merly

Vice-President

&

Exchange*

Donald

Fadden has been

MacFadden

Depart¬
for¬

was

Lobdell

of

Co., Inc.

Edwin S. Robinson With
Geo. B. Wallace & Do.
George

B.

is

Wallace

Street,

announce

&

15

City,

that Edwin S'. Robinson

with

the trading department.
inson

Co.,

New York

associated

now

was

them

in

Mr. Rob¬

previously with J. Ar¬

thur Warner & Co.,

Incorporated.

during the

were

generally

AT

1.1% HIGHER FOR CURRENT

problem as far as steel users are concerned
Consumers 1 are still unable to get- enough
supporting, as ;it did a week ago, the small, but

one

supply.

according to "The

active, steel gray market,
metalworking weekly.

drop; in steel demand or an.

current talk about a

The

t

Imperial Oil, Ltd.

Iron Age," national

International Petroleum
Noranda- Mines, Ltd.

increase

supply is not borne out by market conditions this week, the
magazine states.
There is no single'steel product which is any easier
to obtain than it was a month ago and the pressure gage which
measures
steel consumer reaction is still hovering around the top.
in steel

International

speed action on the European

may

news

Re¬

Plan but American steel consumers will not notice the.
effect for at least four or five months.
This estimate is made

covery

partly

on

the time lag encountered in the small

52 WILLIAM ST

Bell

New York

,

N

YI 5

HAnover Z-W8T

Teletype NY 1-395
"

Montreal"

Toronto

Greek emergency

program.

While ERP

domestic steel econ¬
supplies for some months

not seriously disrupt the

may

it should eliminate talk of easier steel
,

*\

-■

-

L

•

:

1

LAMBORN & CO., Inc.

;

99

semi-finished price increases put into
have caused most nonintegrated
makers of hot- and cold-rolled strip and electrical sheets to move
their prices upward.
At least one major producer of wire rods (a
semi-finished item) raised its price $5 a ton several weeks ago but
other leading makers of this semi-finished product have not yet
followed suit, "The Iron Age" notes.

effect

was

two

Some

the

expected,

weeks

steel

ago

more

or

consumers

believe

the

that

next

(Continued

on

WALL

STREET

NEW YORK 5. N. Y.

SUGAR
Raw—Refined—Liquid

important price

adjustment will be in the size extras on carbon bars, the magazine
adds.
Some tube rounds—a semi-finished material for the produc¬
tion of seamless tubing—are this week selling for more money than

Exports—Imports—Futures

DIgby

4-2727

29)

page

by

Time Inc.

;
J '■

,

.

e

.1

■

!Kingwood Oil Co.-

,

Dravo Corp.

A

American Maize Products Co.

as

crude

over

had
the

oil

producer

continual

that

earnings

past-seven

Bought—Sold—Quoted

or

of., conforming

Otherwise,

our

we

-

years.

FREDERIC D. HATCH & CO., INC.

soon

Established 1888

be
Y.

SECURITY DEALERS

the structure of prices," divi¬
«"

'

'

'

3-3%

Analysis Available

to -other

democracy

will

Market

its busi¬

63

dends, and wages by plebiscite!!

present

WEEK

•

on

¬

guests of the Association.

.

RATE

STEEL

deliveries

V ••

■

*'

-•

.

New Yor..
be

I Retailers remained cautious and

commitments,.'but

long-term

MEMBERS N.

arriving at the

will

t

'phases of public relations "strategy"—under which
is

of the

also

to compare very well

merits; certainly not under the motivation of trying to appease

enterprise

Se¬

expected to attend th.
Officials of the New Yor :

William

merchandise and Easter apparel
were
supported by the arrival of mild weather in some sections of
the country.
The volume of consumer purchasing last week rose

The effect of this entire intra-

rate, let the issue of steel pricing be settled

thfe .anti-free

the

MacFadden Mun. Mgr.

employed in exceptionally active maintenance

was

more

1940 the price of all commodities is

?

of

Such

shown by the Bureau of Labor Statistics to have risen 2% times

greatly as steel products.

Washington

staffs

Exchange Commis¬

Stock

has
;

York

and

Several rep¬

the

are

affair.

rayon

3% above production.

were

industry adjustment .amounted only to one-half of one per cent of
the total

of apparel

day-to-day schedules.
production, it is understood, advanced nearly 2% to
185,675 000 from 182,551,000 board feet during the period ended on
Wednesday, a week ago, according to Dun & Bradstreet, Inc.
Ship¬
ments of lumber were slightly below the level of a week ago, but

loss of $1 -million by Carnegie-Illinois in

single month of January last.'

the

of

manufacturers

being paid by the public, but by the steel companies that buy from

each-other, and ends unfair subsidization

other lines

most

Lumber

As

dently have not greatly interested the various critical groups,

and

ducers operated on

omy

'

not

clothing

hosiery, however, experienced
difficulty in obtaining some materials.
There was evidence of a
moderate decline in orders for some types of shoes and some pro¬
Some

to come.

are

makers were

steel

slight increase for the week, with manufacturers of nylon
hosiery maintaining output at peak levels and with orders booked
showed

a

.

sion

of

for the first time in four weeks.

rose

sending

growers

order

/

in

trying to

wheat

in

market

their product.-..

'

•

Truman's

of FBI agents into steel plants which

squad

fact,

steel and this fact is

,

product from three to five cents—or by 66%—not too

own

long ago.

71/2%

:

New

nancial

a press

complete detail the nature of and

loudly editorializing against the steelmakers, did not pre¬

their communal

vent

President Fairless distributed

worthwhile observing that some of our newspapers which

-It is

his

the "charge

commentator

and

curities

newspapers

In

public's mouth by alleged stratagem

Feb. 20 describing in

release

a

economic

surreptitiousness in the industry's action, despite the fact that

United States Steel Corporation

are

Thus, in addition to

highly-respected

one

Committee.

resentatives

materials.

continue professing their belief in the free processes of the market¬

place but curiously set themselves up as public relations counsellors

fuels and the deliveries of essential raw
able to obtain a somewhat
than in recent weeks and steel ingot output

Dinner

both in the supply of some

Promotional

the industry by lead¬

on

and by business economists, who

opinion

i'- "

Public Relations Counsel

as

and amount of condemnation

-j• •

continued at a very high level

Total industrial output last week

rising tendency of "public relations" strategy to drive gov¬
officials, including economists, to propound the illogical

Wall

Street, New York 5, N. Y.

" :

'

PETER MORGAN & CO.
New York 5, N.

Tel. BA 7-5161

Tele NY t-2078

ASSOCIATION '

Bell Teletype NY 1-897

f.

31 Nassau Street ;

6

THE COMMERCIAL

(998)

FINANCIAL

&

CHRONICLE

Thursday, March 4, 1948

■vm

The Basics, reflation and Credit Control
By

ioSE^H,
American

President,

President, The

r

on

M, D0DG3*
Bankers Association

Ahead of the News

Detroit Bank, Detroit, Mich.

Warning if inflation acquires, velocity and intensity, a, disastroqs depression will result, ABA executive
points out trend; cannot be changed by laws, or by limiting bapk loans, Says increased bank loans are
result and not cause of price increases, and Warns against further* interference with current banking
credit mechanism. Advocates voluntary and cooperative action by banks, and asks support of aggres¬
sive action

By CARLISLE BARGERON
FORT WORTH;

As you

know, officials of the American Bankets Association are on a nation-wide tour
key cities because of their concern about a National problem—the present inflatipnsituation-^-which directly and: indirectly affects the business of banking. In this series
meetings#

of

from the. diseases

arising from 11 to do the things which bring cor¬
of peacetime rection, so. the condition tends to
run its dangerous course.
problem and government deficit financing be¬
fore the war, the unavoidable def¬
We have to face the fact that,
the
Associa¬
icits during the war, and deficit if this inflation is
allowed to ac¬
tion
program,
financing and enormous govern¬ quire velocity and run its course
of Credit, Con¬
ment expenditures- since the war. to any extreme, the inevitable re¬
trol with the
For
14
years
we
have been sult is
completely fictitious, dolla:
State Associa- Careless about money, dnd. the
values, the substantially deprecir
t i q n Qffipers needs of the war magnified that
ated purchasing power of money,
they

disthe

are

cussing

Consecutive

-

years

•

,

and, the leadin g
bankers
of
every
State.

Today
eryone is
Joseph M. Dodge

scious

e v-,

con¬

of

accelerat i

the
a

n

cost, and price spiral, and
its complicating effect; on daily
living, on business, operations, and
wage,

on.

financial affairs. If; is, tfip fW&r

most issue

now

before the

and has become

cal issue.
not

people,t.'

National

a

At the

same

politi¬

time, and

unexpectedly, the increase in

bank loans also bps become a Po¬
litical issue. What we, in banking,
should

and

problems

do

about; these
subject of our

can

is

the

meetings.
As.

a

*An

•

Nation,
address

we

>

.

are

sufferings

by Mr. Dodge

at

the Pilot Meeting for ABA Anth.

Inflation

Program,
City, Feb. 21\ 1948.

New
?

York

V

Carelessness, The strength of our
has been diluted with a,
ood of purchasing power-—there
too much money chasing too few
oods. Costs and prices have beep

economy

unwanted

is

a

of life.

That;

possibility

must use
'v.; ■ ■ ■'

ever/

we

effort to avoid,
continues greater than:
Cannot Be- Corrected; by. Laws"
the supply. In its simplest terms,
tbisi is* inflation.
■. /
.
.
Ijn times, like these, there pr;
With- this, and as.part of if, too.
always those whQ.thwk this, prob¬
many peopla- have acquired? the.
lem cah be: corrected by. law.^
false hotion that we can borrow
which, deal with symptoms, not
and* spend, and tax, and that this
the real, sources of, inflation. But
process* is* gopd for the economy*
and; brings with, it no penalties. legislative answers, are certain to.
be either, ineffective or complete¬
We, seem to, have accepted the ffthr
There are too friaoy.
tastip idea, that a. man can be ly wrong*
conflicting, group interests. As a
paid twice, as much for the w.ork
resujt, laws produce neither equi¬
he used to. do without paying any
table nor adequate answers. What
more,for, what he buys* Somehow,
they correct in.ope plac,e
we. have acquired; a., vipious habit
s offset by the creation of. addiqf believing that money and the
mpal. complications in another.
value of? mpney does not metier,,
We have seen plenty of that., Tp*
We have become so indifferent
real answers are in more work
to-the use of money apdi debt, thgtand production, less spending, apq
we should not be surprised at;.the
in more saving (by every ope, in¬
results. Now ■ w.e begin to see. the
cluding the government. ."These
penalties;. Both money and; debt

into the leadr-^

,

1

,

f

their

fee the1 voluntary acts of. effort

revenge.

1—

—

er,sh pp.

He. Texaps plan to conduct' a, nationfipds himself, wide edupat'onalj campaign in. an
in
the, com- effort to disabuse the people of
pany of- such other states that they are against
S o.u;th e r n the
proposed: antirlynqhmg law
leaders as because they want to continue an
S( e. n, a t o r outdoor sport of lynching; that
George o f the pqll tax which some Southern
Georgia^ and states have is fpr the purpose of
Rvrd of. Vir¬ restricting the vote. Hereip, Texas,
for example, it goes, to, the school
ginia,
Here
i n fund. Many people pay this tax,
Texas you it is claimed, who-pay no other
will find the k'nd of tax. The purpose q£ the
m en
wh o educational campaign whl be also
so u ght
to to inform the people of, other
lead a revolt states that whije they may think
Carlisle. Bareeron
a.ga.in.st a the. Truman program and the Re¬
term, for Roosevelt apd., a publicans' efforts in the. same, dir
fourth term, sharipg. the, leader¬ rection affect only the South,
ship wifh Roosevelt* idolators in they, in fact, affect every state in;
the new. movement,
the Unipn,
;
„

! Since 1937, a resentment against

•

having

about

doubt

•

social: and economic

our way

Rising rapidly, and the demands

We have alarming symptoms, of

longer apy

1

changes in

for goods-,

are

BOSTON

and the possibility of a disastrous
depression; which can bring with
it

no

politicians who, at. the first counseled caution have been swept up in
tpe tidfe-and'one, now finds sum men as Senator Connally coming

and'leadership-taken by ABA in* inflation battle.

of 13

ary

TEXAS—There is

the Southern revolt .Organization for it is. definitely underway. Those

afad

sacrifice

which

the, Ne.w Heap has been gainipg
headway, in the South among: the.
more conservative element, what;
you .might call the better- element..
Rut relief mopey andi Roosevelt's,
Championship Qf the "commpni'
map
this element without any
following;; Now,!they have the
<

They

tq

something

dq

They are tired of
dominated by the Eastern

the

cater to

other, mi¬

Negro and

nority

group; votes.
They, don't
expect to be able tq do th's in time
to head. off. the anti-lynchipg law,
which

will

probably

be

on

the

being

statute books within two months,

left-

but they dp, have hopes of heading
off the anti-segregation, the FEPC
apd the anti-poll tax legislation.

lingers who-have controlled their

party for the past 14. years. T;r,ur
man's so-called civil rights pro¬ As to what they intend to do with
gram
has been the spark that the anti-lynching law when they
>
touched off the conflagration. If, get ih remains to be seen.
.

is not the

by

permanent results.

•:

intepd

about it.

of the griev¬
of the conservative element

ances

produce The

v-

fpllowing.

What purpose they hope to ac¬
complish with this, campaign is, to
sober up; the Republicans, who
m,e gleefully seeking, to make theSoutherners mad
to
encourage
their bplk end- at the some, time,
:

measure

What

means.

any

has

Overall,

what» they are deter¬
mined to accomplish is the leader¬
hap¬ ship of the Democratic party. They

pened is that the Truman program,

are
definitely bent now upon add¬
Fortunately for
the banking has spread the feeling to the ing. to the wreckage that is comipg
in
November,
and, ip the
rest of the world; and inflation business, the banks can not be lpwer, element.
scramble for dorpinancv that will
which always operates against the held responsible for the inflation¬
As to what will be the outcome
then
follow, they are determined
fundamental interests, of labor, ary situation, as it is. The- real nq oppmap accurately say at this
ource
of inflation
apd present time.- It is this writer's conviction to come out on top.
the farmer, industry, and the in¬
dividual; People, forget that the high prices is in the years of gov¬ that the present revolt is far more
effect? of inflation is very, much ernment spending ip excess of serious than.that against A]< Sm ith.
the' same aS- that of> depression, revenues, continued large govern¬ If is his conviction, in fact, that
governmept the delegations of 11 Southern
and that no matter how. hard they ment expenditures,
Work, there is * not * sufficient subsidies, and government financ¬ St«tes, the so-called Solid Souihv
walk out of the National
money to buy what they need and ing of large exports not offset by Will
Eorpiation of. a special. Secur¬
Want. th|s i& quite similar, to importsi These sources of infla¬ Convention. Movemqpts arp upr ities
Bureau
was
announced
tion can not be corrected: by lim¬
deryvay tq • change the election
having no work and no money.
March 1 by Nathaniel L. Gold¬
Everyone worries - and com- iting bank loans. They are the lgws of those states heeding such
stein* New York Stata- Attorney
ips,t but; individually: they fail problem- of every voter audi tax¬ ,a change, to give the electors free¬
plains
payer.
The banks alone can 'not, dom of action. Where this is not General, because of. <fat steady in¬

the

which

disease

came

so

serir

ously affects, the economies of the

B

&

Boston, Si

Maine

RR.

N. Y. State Bureau, to,

Prior Preferred

Handle Sees. Frauds

Traded in Round Lots

Walter J.

Connolly 4 Co., Inc.

24 Federal Street, Bpston, 10.
Tel. HUbbard

2-3790^

Tele, BS. 128 •

1

answer the problem* If, it is to be ^onq. thq pames ofrmen ? like Bypd. crease during, the. pqst siK months
in the number of securities fraud
apd? Qeorge may be. placed, on, the
apswered—government, labor, in¬ ticket:
complaints received; by his office."
in the, place of Trunmp'sJohn. W. M. Rutenberg} Assistant
dustry* and the individual-r-all
As
yet
each
state
is
act'ng
on Attorney General, will: head;, the
have a field of action in which
Raown, studying its own problem,
POW bureau,
they must, do their part.
yet consulting^with. the. leaders,

Trading Markets

Boston & Maine Prior Pfd.

Increased;

Boston Railroad' Holding Pfd;
Boston Edison

--ju.st
INVESTMENT SECURITIES

New England' Lime Common

5p9 0Liy£

•

STREET

as

are

a.

increased

prices

are

a

symptom, not,.a? cause. Bank loans.
(Continued

on

page

other

of

tween

Members St. Louis Stock Exchange

the

In

LOUISVILLE

SPOKANE, WASH.

^

Consider H. Willett

NORTHWEST MINING

Co.

SECURITIES
For Immediate Execution of
Orders

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

Long Distance 238-9

Bell Tele. LS 186




\

A:

:

■

;

MacWhyte; Company

j

other

'

_

-

.p.,>:•.

-

>

•

j

Rockford Machine Tool

BPMbOn Tools

(Dompany

Corpor^iop

^

l:.

INDUSTRIES,

.

;

:

/

ferred

obd;

.INC.,:

common

pre¬

stpeks.;

Publfahers, Incorporated

BOUGHT

—

SOpD

—

QUOTED

Exchange

Cum stock & Co.

Underwriters

CHICAGO 4. ILL.

Branches at
and

finanqial institutions.

Inquiries inyitedfcon PAJHB

:

-

.

Peyton Building, Spokane

Kellogg, Idaho

Yakima, Wn.

,

interested'

,

Spokane

Dealers

to

Viking Pump Company

CORPORATION
Brokers

available

investment dealers and, other
.

Uarco, Incorporated;

of

iljustrnted

end

•Rath Packing Company

hours.

Members Standard Stock,

detailed

brochure will be oft the press
and

or

Incorporated

1st Floor, Kentucky Home Life
Bldg.
LOUISVILLE 2, KENTUCKY

of- Inc., 53 Exchange Street;

PATHE INDUSTRIES, INC.

Gear-&{ Machine Corporation

United Printers &

,

group

Gisholt Machine Company

STANDARD SECURITIES

H BANKERS BOND

a

Compapy

Hart Carter Company

<

of

Varnish

meantime,

Colorado Milling &, Elevator Company
Foote Brothers

Murphy Chair Company-.

.Gksg^icus)

to;

PORTLAND* MAINE?—Alyph E.
is with King Merritt & Co.,

Ames

::

Booth Fisheries Corporation

American Turf Ass'n

With King Merritt & Co.

Democratic

the

actjon wijl have beep

qopcerted

Ajrcady Farms Mjlling Copipapy

American Air Filter

Quite likely be¬

and

decided upon.

30)

Altorfer- Brothers

-

REctor 2-5035

Reliance

states.

now

National Conveption sopiO sort: of,

INDUSTRIAL CONIWWN' STOCKS

Street, Boston

Private New York Telephone-—

loans

St.Louis1#>Io#

I., Inc.
75 Federal

bank,

symptom of inflation^ not & cause-

Incorporatejd

Chicago,

New York

Boston

-

.Milwaukee,

.

-

231;So, La Salle St.

-

Minneapolis.

Omaha.

Dearborn, 1501,

Teletype CG 955

7'*

Volume'"167"

Number 4678

THE COMMERCIAL

LEONARD

Vice-President,

Statistics

Deputy Bank Commissioner of Maryland

remainder

of

the

1948.

prospects for

general

business

Asserts bank supervision should not be made tool for
monetary or fiscal policies of government, and praises work of ABA for combating inflation. Points
out present bank loan expansion is result and not cause of inflation, and calls for reduced government
spending, less banking by government, greater production per wage hour, and less individual spending.

during the

any such consideration, it is- necessary to
realize that the average of business volume throughout the country
is a robust 31% above normal. Naturally, such feverish output can-.
*

*i.lL

VN. i.A

forever. If you

have added another 10% to their
take-home pay.

the

business

all

set

curve

kinds

of

new

records. In

of

the

system.

Thus,

natural

to

it

is

ap-

that

the

decline

a

forget

fact,

in

decline

1948

the

from

volume.

expect

we

business

extremely

neither
be

tain

groups

'

the

i

Purchasing power will move
along at a very high level.
We

/forecast that the national income
will

-ceed—the
for

equal

or

even

ex-

$193 billions estimated

1947.

The

individual

may

be somewhat lower.

There¬

the

13

picture

that have

groups

a

than

it

and

the

in

77..

In

the

term

77:7 '''7

bond

trend

is

market

towards

(Continued

do.

the

'

the

in

-

7:'7

'•

S.

U.

session

Rev.

his

think
for

;J77' 77'7_7

problem

you, todays
supervisory

with

let it be said that the

authorities have

a

\

of

„deep sense of

appreciation of the line of demar(Continued on page 36)

We take pleasure

in announcing that

on

Peter

•

•

"""•1

Senate
Dec.

y

4, 1947,

Marshall,

opening

too

has been

appointed

D.D.,

Manager of

;4

our

Municipal Department.

"Forgive

prayer,

talk too much and

we

little."

It

is not fitting

state

the

appropriate-

to

me

MACFADDEN

S.

DONALD

con¬

Eastman, Dillon & Co.
CHICAGO

PHILADELPHIA

NEW YORK

■77!An address by Mr. Hospelhorn

long-

before*

rising in-

American

the

Association

31)'

page

on

yy £7

all that

us

refiners, bakers, crude petro¬

"77.;

.

the

its

and

Chaplain of that august body, said

va¬

ties.

inflation

credit

that
credit
sponsored by the government, is
the
most
freely granted credit
available, because that is its prin¬

which, indeed, does not have

vened

riety chains, banks, fire insurance.,

certain utili¬

cannot

today.

knows

Everyone

them.

discussing

something

tion

Hospelhorn

When

following

leum producers, and

of

the world,

In

the duty to do all that it possibly

At

have the best outlook:

level

and

America

in

us

after-effects,

at¬

more

no

confronting

restrain infla-r

cer¬

others.

the

time

are

group,

full share of

through the present complex¬

ities

to combat and

John D.

time in

any

there

individual,

do

can

At

my

us

for

will

nor

quite properly

the

Bankers

R^ional'

Meeting

Washington, D. C., Feb. 20, 1948.

bill

tax

fore

general

down

outlook

present

"

corn

1948

far

be

can

to

revival of sound thinking to carry

which

long drawn out.

tractive

1947

■7v7/y

be

no

government

correction

some

it

cipal

however, I do

rest of us as, in
humble judgment, we need a

applied

economy,

no

not

us

aelieve

is,

corporation,

The stock market will naturally

volume

high

let

prediction

our

for

is

be very selective.
the stock market

5%'

a

And

fact,

of that body;

our

in

expect

bottom.

logi¬

1
^
feature. It seems to me,
therefore, that if there are any
credit abuses, today, being car¬
ried on among our banks, govern¬
ment sponsored credit or lending
projects should at least carry their

of this sentence, to the mem-

segment in

but that the eventual bottom will

be

National Income $190 Britons

:for

than

today

part

that

business

break

shouM

hits

ness

registered in 1947 is
.not entirely duplicated this year,:
In

passed the

of our economic
it would be only
that
stocks
based,; WOuld turn up even before busir
the-

-

would

if

other

aers

There

.

in

today's

Greater

market

stock

forecast

Even if the remarkable rate

small.

has

by.

any

asked

average

in

cal

no

and

activity

the

Inflation

market

Reaction upon
which
our

commodity prices is
beginning of such a.tobaggan

slide.

exist

ness

wholly

no

.

the

we

not

present!

value

of

—

and

does

the

worthy of the1
point out that

is to be found dollar-for-dollar in

Law

near

often

unless

market.

recession
even
staggering.
amounting to a major depression
—is overdue.
"
j
am

name

of

is

my

the

Spangenberg

stock

market

to

stock

cry

I

discussion

is,

mind,

meetings

ccrdance with

Action

in

Nq.
stock

credit

ac-

,

_

Stock Market Outlook

chart,'
have seen

you

of bank credit.

use

acting through the ABA,

voluntary action taken to avoid

their

inspirin g$>——

your,

Babson

are to be highly commended
excessive and inflationary increases in the
The participation by bank supervision in this series of important and

The bankers of this country,
for

—'

*

—

have been fol-

lowing

Dr. L.

—'

**—*'

against inflationary bank credit.

cautions

In

V

Maryland bank supervisor

Asserting competent banking management is essential to private enterprise,
.1

resulting lower bond prices.
examine

us

Supervisors of State Banks

Committee, National Association of

Chairman, Executive

Organization

Asserting inflation has not affected stock market, Dr. Spangenberg
holds greater vafae is found in securities field today than in
any
other part of economic system. Looks for rising interest rates and
Let

7

By JOHN D. HOSPELHORN*

SPANGENBERG*

Business

.

The Bank and Inflation

Investment Outlook for 1948
By

(999)

CHRONICLE

FINANCIAL

&

we

one

take

in

pleasure

great

announcing

that

of

plentiful buying power for all
categories.
Farm
incomes
may

suffer
/ fall

possibly
below

well

more

current,

levels, which
parity. 7
7

above

Whether

the

wholesale

to

MR.

fully
be

its

run

7

I

is

now

in

slump

the

major

futures

market

marked'

the

well

15

William

have

be

to

too

A

score.

has

associated with

us

in

this

admitted

been

jr.

as

day

partner, in. our

general

firm

our

,

Street

gay,

New York

5

STREET, NEW YORK 5, N. Y.

52 WILLIAM

MARCH

1,

CO.

HERRMAN 8c

HENRY

1948

*

"

^ '•

-

*

'

>

Telephone BOwling Green 9-2061

turning point; but it
this

on

77.

.7.7

GEORGE B.WALLACE & CO.

drastic

commodity

may

be -unwise

would

flexible

remains:

recent

ROBINSON

7 7 trading department

spiral in;
prices has

course

The

seen.

S.

o.

william

a

inflation

commodity

EDWIN

in announcing that

formerly of J. Arthur V/amer & Co., Incorporated

„

7

Outlook for 1948

7

'yet

We take pleasure

are

Wholesale Commod'tv Price
f

V

losses but
than 20%

some

should "iiot

in¬

,

serious

failure, plus a third round
increases could result in
a
marked
resurgence
of price
strength.
1
crop

of

wage

Pressure

prices

lity

WE

continue

may

Announcing the formation of

moder¬

employment level, at high wages,
spells continued large public pur-

Mitchell, Hoffman & Co.

i

despite

power,

inflated

prices. Production costs are un¬
likely to drop, and probably will
' further

advance
make

creased

should

successful

a

wages

as

bid

Baltimore and

These major

factors point to still higher prices!
for the industrial category. ; I 7j

.

......

.

•

7 Third Round for Labor
leaders

Labor
mary

have

aims for this

"

Mr.

Washington Markets

Primary Trading Markets

7

Retail

BUILDING

7-2634

OF

7

•

Harry

Mr.
WILL

pri¬
The first

Charles

Gould

W.

L

Perkins

Distribution

two

year.

BANK

hartford'3, conn.

MANAGEMENT

THE

UNDER

A

in-?

result of ad-i

a

vancing living costs.

street.

pearl

telephone:

To Specialize in

labor
for

36

Incorporated

•

'chasing

NATIONAL

HARTFORD

OF

OFFICE

HARTFORD

ately upward over the near term.
Here's why: A
record domestic

ANNOUNCING

IN

OPENING

THE

industrial commod-

on

PLEASURE

TAKE

WITH

ASSOCIATED

BE

HIM

-Private Wire Facilities

is to obtain a third round of wage
increases to

cost

of

few

months

contracts

others

e

Elect advances in the

Irving,

will

will

opening

a

During

the

union'

expire

many

reach

phase.

and

the

Before

G. H. WALKER 8c CO.

next

great many

wage

John M. Hoffman

C.

President.
11. Clark

re-<

Benjamin Mkehell
Vice President

established

1900

MEMBERS

Helms, Secretary & Treasurer
NEW

the third

ST.

LOUIS

STOCK

YORK

STOCK

EXCHANGE

EXCHANGE

•' CHICAGO STOCK EXCHANGE

'

quarter of 1948 is reached,

ized

workers of

*An

address

the

by

Dr.

may

Spangen¬

berg at the 21st Annual Webber
College Business- Conference,
Babson Park,

Fla., Feb. 26, 1948.




YORK

NEW

organ¬

nation

1424

K

Street N. W.

Washington 5, D. C.
Sterling 7530

52 Wall Street

New

York

5, N.

Dlgby 4-1996

NEW

Mercantile Trust Bldg,

Y.

Baltimore 2, Md.
Plaza 5200

YORK

direct

MARCH

1.

1948

CURB

EXCHANGE

PROVIDENCE

private wires to

(ASSOC.)

ST. LOUIS

all offices

8

(1000)

&

THE COMMERCIAL

FINANCIAL

CHRONICLE

Thursday, March 4, .1948

5, gives net income for the
ended Sept. 30, 1947,

■>age

months

12

$1,897,000, or about 780 per
on
present
outstanding
This is slightly in excess
of last year's 740 and the
1944
figure
of
630
(during
1938-44
earnings on the basis of the new
capitalization after reorganization
ranged between 200 and 440)<
as

Dealer-Broker Investment

share

stock.

Laclede Gas

Light Company

Laclede Gas Light nearly a year ago acquired St. Louis County

Gas from the North American Company System. Thus enlarged, it
supplies mixed gas of 800 B. t. u. to St. Louis and adjacent east¬
ern portions of St. Louis
County, the total population served being

how

over

million.

one

Some

straight
natural gas is served to industrial
Customers.

Total operating revenues of the
properties now operated by the
company were $14,094,478 for the
12

months

derived

ended

from

customers

Sept.

various

30,

1947,

classes

approximately

of

fol¬

as

present equity of about $17,100,000. Capital ratios would thus
be about 65% debt and 35% stock.
l

rf

$4,000,000 plant acquisi¬
adjustments
(now
being
amortized)
should be deducted
Trom the stock equity, the latter
would be reduced to 30%; and if
some

tion

lows:

domestic

53%, house and
22%, commercial
14%, industrial 10% and miscel¬
laneous 1%.
Of
the
industrial

aank

Space

heating

capitalization at a later date the
catio would drop further. On the

Customers, 102 were purchasers of
straight
natural
gas
who
ac¬

,'radually improve after 1953 due
o.
the debenture
sinking fund

counted for

total

approximately "8% '-of
Revenues

revenue.

in

the

>ther

heating contributed
nearly one-half).

should

hand

'$625,000
and

county for the 12 months ended
Sept. 30 totaled $3,753,244 (of
Which

debt

the

per

ratio

debt

1953-56

in

annum

may

"red

all-natural

an

gas

might be expected to fur¬
ther stimulate house heating sales
but net earnings may be retarded
in the coming two years by ex¬
penses in connection with the con¬

Bank
&

For this

and

reason

be¬

cause of the heavy dependence on
earnings for construction funds i<
appears likely that the 200 divi¬

dend

will

rate

not

substantially for
The

increased

be

time.

some

will

debentures

new

be

convertible

initially at $6.25 a
share, and the stock is currently

selling

based

a

latter

price

yield! of about

4.1%

the

on

The

4%.

at

reflects

200

about

6 2.

dividend.

The

ratio

only

is

.

Charts

bound

oven

Mant

coke

oven

and

two water gas plants
City of St. Louis and auxil¬
iary liquid petroleum gas equipf-Went, and one water gas plant
With liquid petroleum gas equip¬
ment in the town of Shrewsbury.
The two water gas plants in the
Hty are maintained for emergency

Luigi Criscuolo writes "Chronicle" protesting against action of
Council of Foreign Bondholders in approving deal.
-

tt the

and

"se

to

provide capacity to
meet peak load demands. All natfal gas used is obtained from

Mississippi River Fuel Corp. (conrolled

by United

Gas

and

other

from

coke

Companies).
In

the
Yas

to

1946-47

revenues

other residual products from
production of manufactured

*nd

$3,909,000

Chded Sept. 30, 1947 (this revenue
is Classed as a credit against ex¬

coke station

(which has

orig¬

an

inal cost of $3,500,000) as long as
favorable market for coke per¬

&

mits

profitable

operation;

eventually the plant

but

be dis¬

may

posed of or abandoned.

On

Oct.

made

a

IliVer

2,

1947, the company
contract with Mississippi

Fuel

natural

to .obtain

gas

up

to

a

additional

maximum of

#09,000,000 cubic feet

day,

per

as

4®bn as full conversion to natural

ffftg is effected, the contract run¬
ning to 1966. This will require
additional
pipe
line
facilities,
hdwever.

The

is

company

pres¬

ently planning to convert during
1949 and 1950 the appliances of
m customers from

1,000 B. t.

u.

distribution
me

800

B.

t.

u.

to

gas, thus permitting
of
straight natural

when available.

As

a

part of

this program the operations of the

fsfit-ewsbury
justed

to

1,000 B. t.
Will

cost

u.

tion

over

will

be

production

ad¬
of

Such conversion

gas.

about

is -estimated
Cost about

plant

permit

$3,000,000 and it

that

other

construc¬

the next five years will

$12,500,000.

The comnany
!rg $6,500,000
botes, which it
with $6,084,000
ible
sinking

is

replacing

now

15-year convert¬
fund
debentures

Xcurrently being offered by a
headed by Lehman Bros.,
after an initial offering to stock¬
^rbup

holders on the bas:s of $100 de¬
bentures for each 40 shares). The
Cdhipany is also entering into a
hew bank credit agreement

will nermit borrowing
nnh nnn

up

which

to

When

restrictions™.

Remain-

in# funds will be obtained from
'^mings, depreciation and amor¬
tisation and

at present there

ftb plans for additional
*

Gam'tai

structure

are

financing.

will

include

*25.500.000 1st 3%s, $6,084,000 debehtures and

the

Concentration

Anti-Fascist

common

stock with




spiral

Stock and Curb Exchanges
—single copy $10—yearly
(six
issues) $50—F. W. Stephens, 15
William Street, New York 5, N. Y.
Manual of St. Louis Bank Stocks
—1948

Co.,

Edition—G.

Broadway

H.

and

N. Y.

Pathe Industries, Inc.—Detailed
description of company and its

operations—Comstock
South La Salle

Walker

Locust,

&

Co.,

231

Street, Chicago 4,

111.

Sterling Electric Motors, Inc.—
Circular

Maxwell, Marshall &
Co., 647 South Spring Street, Los
Angeles 14, Calif.
—

Also available is

analysis of

an

Paciiic-American Investors.

&

White's Auto Stores,

St.

Inc.—Spe¬

cial bulletin—First Colony Corpo¬

Louis 1, Mo. ,
Also available is

recent report

a

ration, 52 Wall Street, New York
5, N. Y.

Hewitt-Robins, Incorporated.

Yields

operating

was

in

Paris

former Premier Francesco Nitti wrote me that when
they deposed the Italian Fascist Government they would repudiate
ill of the bonds sold by that government in the United States, and
he
urged me
<®>make

0

*1

lere.

lim

England

Company

—

De¬

a r n

i

Ratios

n g s

COMING

EVENTS

and

In

Investment

Field

123 Public

Utility Com¬
Stocks—Stroud & Company,
Inc., 123 South Broad Street, Phil¬
adelphia 9, Pa.
on

and

available

are

valuation

a

appraisal of Railroad Equip¬

ment

Certificates

and

City

if

*

*

action on the part of investors, not
qply in their interest, but' in the

interest of the future credit of the
(talian

credit of their
d

that

would

hamper

taly's

future

of

act

the

Luigi

Criscuolo

v

j

the Antir-Fascists Jhave

kept their

and

they have, at least in
repudiated " the obligations

baft,

Matteo

to -above.

Some

Lombardo

United States

in.

government

tually control Northern Italy in
conjunction with Soviet Russia,
one would thipk that Premier de

on

to

an

official

the

mis¬

and he and his

meticulous

obligations

ments

as

was

ment which

about

of

honoring

past

the Fascist Govern¬

passed out in 1945.

Yours truly,

Broadway,

New York

'

'

concerns.

the

principal amount of
the bonds was not reduced, but
was
increased by the addition of
accrued interest, the interest pay¬
in

the

from

rate to

as

from

a

;

;;

The

were

1%

actual

loss

in

investors

Italian

sociation

Central
—

Illinois

Data

—

Walnut

Public

Buckley

Service

Brothers,

Street, Philadelphia

available

Also

are

memoranda

Buffalo Bolt Co., and

Wayne' Room,

(New York City)

:

Security Dealers As¬

22nd

March 6, 1918

Annual

Dinner

at

1

(New York City)

Wall Street

Riding Club Annual

Gymkhana 6:30

p.m. at New York
Riding Club to be followed by a
Supper-Dance.

March

12, 1948
Canada)

Annual
Bond

(Toronto,

Dinner

OnW

the Toronto

of

Traders Association

at

the

King Edward Hotel.
March

18, 1948

(Minneapolis,

i

•

Twin City Bond Traders Club
Spring Party at the Nicollet Hotel,
Minneapolis.
; 7

April 19, 1948 (New York City)

Security Traders Association Of
New York 12th Annual Dinner ait

the

Waldorf-Astoria

May 10, 1948

DuMont

Annual
Stock

Hotel.

(New York City)

Election

(Special

to

The

Financial

CLEVELAND,
H.

Dore

has

become

New

!

York

Exchange.

associated

gift of

than the

our

1

Co.,

Street, New

Wall

York 5,

Research
115

Company

New Connection
to

The

Financial

CLEVELAND,

—

item—Goodbody & Co.,

(DaHas, Tex.)

Security Traders Asso¬

Robert D. Solt in
(Special

Harvester

De4,-oit

Solt

D.

has

Chronicle)

OHIO —Robert

become

associated

Broadway, New York 6, N. Y.

Dome

this

Mines

Limited

—

Invest¬

ment

appraisal—Kalb, Voorhis &
Co., 15 Broad Street, New York
5, N. Y.
/•

ns

princi¬

•

■-?

Electrol, Inc.—Analysis of man¬
ufacturer
of
hydraulic
control
equipment for aviation and indus¬
trial uses—Seligman, Lubetkin &
Co., Inc., 41 Broad Street, New
York 4, N. Y.
Also available are analyses oJ

granting
a

billion

dollars to assist in paying for Kal¬
ian reconstruction, but that was
not of American

Corporation

New York.

perpetrated

outright gift of

Petroleum

—Memorandum—A. M. Kidder &

National

ciation Convention.

interest

plenipotentiai

more

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

Chronicle)

OHIO—William

Bank—Circular

Nov. 15-18, 1948

scaled

by

I have been in favor of
an

William H. Dore Willi

per annum

pal amount of the bonds!

a

Corp.—Analysis—C. E.
& Co., 61 Broadway,

Chase National

respective 6 to 7%

arrangement

the

to be

B. V. D.

at the

the Waldorf Astoria.

Minn.)

Laboratories.

7, 1948.

1, 1947, to Jan. 1, 1950;
1952; 3% there¬

amounts to

Italy

Spinning Asso¬

report on posi¬
tion—Blyth & Co., Inc., 14 Wall
Street, New York 5, N. Y.
:

on

1950 to

American

clever

future

follows:

from Jan.

by

Fine

2, Pa.

4, N. Y.

New York

3, 111.

Berkshire

1420

'

Field, Richards & Co.

industrial

While

after.

Co..

Chi¬

ciates—Detailed

' Co.

LUIGI CRISCUOLO.
50

Street,

—

the

govern¬

and

2%

Salle

New York 6, N. Y.

as

the

Feb.

down

nual Dinner

Hotel Statier.

•;/

Company
issue of

>

refunding

a

ments

La

be

aides negoti¬
of about $132
million bonds in question, includ¬
ing those of the Kingdom of Italy
and those of Italian public utility

ated

current

Journal"—Adams &

South

105

cago

Service'

the

Unterberg

months

came

in

Gaspari and his close aides would

Socialist leader named Ivan

ago, a

sion

present

has

*-

'eferred

flota¬

absorbed some of the
poison exuded b,y the Leftist and
Communistic groups that now vir¬

United States has either given or
idvanced over a billion dollars to
the present government in Italy,
word

the

that

Italy

the

that

as

While it is obvious

concerned.

are

levelopment.
Evidently, in
spite

Republic insofar

tions of securities in this country

here

American
Data

"Adams

(Detroit, Mitih.)

Club of Detroit 32nd An¬

March 5, 1948

Philadelphia Bonds.

,

n

Bond

of

to

I believe this calls for concerted

Govern¬

country

March 4, 1948

g<

Ital-

new

a n

Also

the Italian Republic by
Railroad Developments of the
condoning a gift of millions of Week—Current
developments in
lollars in the money of their cus¬
the
industry—Vilas &
Hickey,
tomers to that Republic.
"
?. ■ 49 Wall
Street, New York 5, N. Y.
bsity

told

that

my

1

that

known

act

government and

private investors.

However, the virtual repudiation
of many millions of dollars in fu¬
ture interest is

ilure interest is something that cer-

o+

in

York

Price-E

!wo decades ago,

to

has had out stand3^2%
installment

-

Editor, Commercial & Financial Chronicle:

i

Even after conversion to
Straight natural gas the company
Intends to continue to operate the

penses.

York 6,

mon

ment did that,
they
would
rapidly, amounting
destroy
the
in the 12 months

increased

Haupt & Co., Ill Broadway,

New

scriptive analysis of special situ¬
ation on 86-year-old New Eng¬
land company—Raymond & Co.,
148 State Street, Boston 9, Mass.

Deplores Reduction in Italian Dollar Bond
Interest as Repudiation ;

ntal gas and liquid petroleum gas.
one

charts

922

—

book

New

gas,

The company has

—Ira

Letter to the Editor

uncarbureted water
carbureted water gas, nat-

s,

Geyer

—

covering 12 complete
years, and showing monthly highs,
lows, earnings, dividends, capi¬
talizations, and volume on virtuilly every stock listed on the New

The mixed gas distributed consists
Of

Analyzer

York 5. N. Y.

on

space

Stock

Co., Inc., 67 Wall street, New

.

version.

price- earnings

.

prospectus,

herring"

to

It is understood that the firms mentioned will be pleased
to send interested
parties the following literature:

basis

included in

be

$250,000 during 1957-62).

The

Conversion

Recommendations and Literature

American

investors in Italian securities.* It
is also surprising to learn that the
Council of Foreign Boldholders
has approved of the
deal, although
that organization is

supposed to
fight for the rights of bondhold¬
ers, not to mention the fact that
the bankers who floated the bonds

William H. Dore

with

Field, Richards & Co., Union Foundation Co., Wellman Engi¬
Commerce Building. He was for¬ neering, and Tennessee Product*
merly
Cleveland
manager
for & Chemical.
Robert D. Solt

Stranahan, Harris & Co.
Oil

Kingwood

With Continental Securities
(Snecial

to

The

DETROIT,
Smith

Financial

MICH.—Marvin

—

Special

survey—Peter Morgan & Co., 31
Nassau

Chronicle)

Co.

Street, New York 5, N.Y.

manager

ment

T.

is now with Continental
Securities Company, Inc., People's
National Bank Building.

with the Welfare Finance Corpor¬
ation.
Mr.
Solt
was
formerly

National

—Analysis

Aviation

of

Corporation

investment

trust

specializing in aviation securities

and
with

in

for
was

the

of

the

Ca.yne,
in

the

Federal

Cleveland.

trading

depart¬
Robbins & Co.
past connected
Reserve

Bank

Volume

THE COMMERCIAL

Number 4678

167

Recites Recent Changes in the

character of

and

structure

Clinic

both in dollar amount and in

per

cent

mortgage

buyers has changed.

Sees

Clinic of the
Mortgage Bankers Association, held in Chicago, 111., on Feb. 27, Ferd
Kramer, President of Draper and Kramer, Inc., Chicago, sounded a
warning regarding recent changes in the real estate mortgage market.
"A .year ago^
d

o

y,"

a

Mr.

Kramer

r e-

"w

marked,
of

.

the

e

banking

frat

VI

Title

6

—

i t y,

e r n

sold

year

4 %-,

03,

loans at

.102%

that

—today

be

regarded

in

the

in 1940 was $8%

is

$28%

of

coming

government
was

direct

total

debt

These

are

the

nected

with

is not only

sential

1940

that

implications
any

tremendous fig¬

but

Franklin

upon

(Special

LOS

formerly

The

to

&

Joins
(Special

Company,

Federal

H.

Board."

Reserve

with Holley,

staff.

O'Brien

is

Davis

Co., ,10

-

-

&

Chronicle)

Michael H.

with

South

6 0 8

loans
sold

were

high

with Paine,

ber, Jackson &
years.

•

Curtis for

,

.

.

Ferd Kramer

—

as

103%

as

104.

to

Today

'

there
if

premium

any,

The GI loan market
at

is

little,

available

to

us.

then firm

was

101,

today it can hard.y be
market, and prices are at
the option of the buyer. There is
neither black magic nor high fi¬
nance involved in the explanation
of what has happened to our mort¬
called

a

market."

gage

Continuing,

Mr.

Kramer stated:
"A
•

glance at what has happened

to the prices of some of our high¬
est

grade bonds is most revealing.

A year and a half ago, Atchison
Topeka & Santa Fe 4s due in 1995

sold

for

worth

141

117.

of

worth

100.

are

time,

same

0 80s. of

1970

Now they sell at

Illinois Bell 2%s due in

72, and
1981

the

Louisville

City
were

they

today

—

At

went from

108% to 96.

<

"We have but to realize that in
a

piactical sense our mort¬
must compete in

very

offerings

gage

the

market with all other
offerings
and
that

open

investment
.investment

fund

will

managers

not

purchase
our
merchandise
until we price it on a basis at¬
tractive enough to draw buyers to
it.
That market is
the 'Money

•

Market,' and the price tag is the
Rate/

"Interest

have

-we

that

For

selected

reason

parel

our

as

subject—'The
Outlook
in / The
•Money
Markets
and ( Future
is

"It

Interest Rates.''

of

Trends

our

purpose

and

;
•

-:

to examine,

of the practi¬
investment

under the guidance
cal

-

experienced

composing i this

experts

panel,

of the fundamental causes of

some

changes in our money and mort¬

market, and to give you both
Ian understanding of the Changes
-which have already taken place
as well as to make intelligent es*

craft, and operating only four-engined craft north

IN THE brief period of 12 years NATIONAL
AIRLINES

has "grown

from

small

a

Florida

•of Florida.

' *

,

carrier.

1

'

In little more than a decade National has expanded

1

140 miles of routes into a 3,200-mile

?

south to

..

original

system. ■* Extending, from New York City
Miami

Havana

and

west

and

29 cities—most of

timates

to

as

;

National

j

tension

"At

in

is

nities

stage,

when

time

a

shortage

still

•

rates
•

National's

or

a

acute

in

.

interest

Lodestars.
into

the

realtor,

7

consists

of

Douglas DC-4's

4

•>

12 Loekheed

j

a

The carrying

and

year

half

a

ago/

600% increase in the first 6 months, and
gain.
has applications pending for an

now

routes

its

of

'

t

■

'

'

ex¬

Orleans west

from New

Angeles and up to San Francisco.
.

■{.,

(all

only

*

to

With such

"

-

. ■

*

•

extension, the company would be in the unique

position of lihking most of the
three

coasts,

as

the

southern

the

world's

well

as

States,

t

growing

t

United

principal ports

on

serving* key cities across

New

National

is the

only airline operating

exclusively

York

with

four-engined j

.

panding.

•

-

fastest

National,

airline, is

probably -

]

*i

"

'

/■

still

ex¬

V

'

is

builder? It also af¬
of millions of

who

people

are

r} I
S

living in
sub^

now

the

■

.** ''.'t J • *!'
j '
. ,<■
in the series by Equitable

'

,

! Another advertisement

1 : j Southern industrial developments.

[

* ern ■

industries,

is ready

to

v

;•

Securities Corporation featuring

Equitable has helped to finance many South-*;

do its part, in

supplying others with- capital funds.

only has the rate structure

"Not
our

•'j

•-

cramped and in many cases
standard quarters.-.
'
:

! '■

.

begun

matter of great

fects the very lives

of

%

,

.

built within the past two years) and

importance.
It
affects the mortgage banker, the
a

.

operating* fleet

present

shrinkage in the funds
for new construction

available

,

DC-6 ,transports,

.■ •

•

commu¬

at v a : very

increase

an

the housing

most urban

,

Los
an

-Douglas

holds.
-

seaports.

a

f

future

the

what

;

.

offers freight service.

now

freight,

continues to

gage

busy

National
of

showed

Orleans,

New

to

National's present routes serve
them

••

In addition to passenger, mail and express service,

■i,
*

its

V.V-

■-

vigorous international :.

sand-dune hopper Into a

market changed, but so has

character

The

buyers.

of

mortgage

the

investor

individual

YORK

client,

NASH V1LLE

NEW

practically dis¬

DALLAS

HARTFORD

appeared as a purchaser of mort¬
gages. High income taxes and in¬
creased living expenses have si¬

BIRMINGHAM

was

but

once

our

most valued

he has today
,

phoned off most of his capacity
for saving.
Insurance companies
toda.y are managing some

Consequently,

perative, for us in the

it

is

im¬

mortgage

business to know how mortgages




NEW ORLEANS

MEMPHIS

CHATTANOOGA
AND

Securities Corporation

JACKSON

BROWNLEE O. CURREY, PRESIDENT

$44 bil¬

lion, and commercial and savings
banks control an additional $53
billion.

GREENSBORO

KNOX VILLE

322 UNION

STREET, NASHVILLE 3, TENN.

Paul

La

H.

Salle

Stock Exchanges. He

formerly

was

1

•

—

now

and Chicago

Vaughn has joined the staff of

King Merritt & Co.

Financial

vanished.
Some

was

Street, members of the New Ydrk

:

Chronicle)

Financial

The

to

CHICAGO, ILL.

premium has

4 %

He

Dayton &

O'Brien With Davis
(Special

KANSAS CITY, MO.— Charles

:

change in the policy of the

The

Co., 208 South

Street, members of the

First Securities Co.

South

623

King Merritt Staff
to

X.

Chronicle)

Spring Street, have added John H.

the

Frank

Gernon, Brailsford & Co. and the

Financial

ip Jensen to their

Chronicle)

-

Chicago Stock Exchange.

&

ANGELES, CALIF.—E. F.

Hutton

business of

our

Wulff

Salle

La

con¬

E. F. Hutton & Co. Adds

es¬

understand

was

Financial

ILL.

Fred W. Fairman &

Spring

South
past he

The

Duffy has become associated with

—mmtrnggg**

morning

important,

we

af¬

California

Co., Inc.

Dec.

It

$43 billion—today it is $258

billion.

on

510

In the

to

CHICAGO,

—

become

First

Street.

(Special

CALIF.

has

with

mortgage offices, but it had seri¬
ous consequences for our business.

gross

in

o'clock

Griffith
-

Company,

reg¬

That caused little consternation

in circulation

Our

eco¬

free

9

Duffy With Fred Fairman

:

Chronicle)

Financial

ANGELES,

filiated

24, 1947, the Federal Re¬
'pulled the plug' on longterm government bonds by lower¬
ing the bid on the 2%s of 72—67.

billion—today it

billion.

LOS

The

to

Charles

serve

by life insurance companies

"The total money

(Special

is

economy

operating.
Since our
is really one of

"At

and other institutions.

mort-

:

gage

will

With First California Co.

enterprise, the finan¬
cial policies and actions of our
government will have an increas¬
ing impact upon our individual
segment of the financial business.

business.

t

the

(1001)

are

that can be
high level at

present

our

ulated

opening remarks at the Mortgage Bankers

In his

These

nomic system

policy having serious consequences for mortgage

Federal Reserve

increase.

of

show

to

now

both interest rate

says

CHRONICLE

ures

which

Mortgage Market
Ferd Kramer at Mortgage Bankers

FINANCIAL

two of many statistics
used

;

&

TWO WALL STREET, NEW YORK 5, N. Y.

Web¬
many

::

10

THE

(1002)

Bank and Insurance Stocks

Being Formed
is

Announcement

By E. A. VAN DEUSEN

Tne new

kets.

of¬

fices

52

at

Wall

Street,

New

York

Building, Baland
1424 K Street,
N. W., Wash¬
ington.
P r i-

1941

_

1942._

1943—

ington.

Mr.

83,328

0.94%

will

10,040,536

0.86

12:30

to

5:C0

"Two

p.m.

at

the

8,912,343
12,814,688
14,687,269
15,528,045
13,619,606
11,293,446

96.020

0.63

quarters

4,C-31,150
4,857,748
5,912,328
6,222,336
6,409,718

12,174,380
15,347,780
18,251,830
20,837,823

0.75

Losing)

6,908,512

90,741
110,954

0.61

the New York

123,676

0.59

Society

22,876,510
21,307,640
19,146,802

127,686

0.56

127,819
121,025

0.60

annual

''

%

i

■

York—

of New

Bank

Bankers Trust

Chase

-----

National

Guaranty Trust

at 359
our

E.

G. Leslie Sampson,

Sophia Fry

friends

1.58

1.67

1.90

1.14

1.74

1.97

1.51

1.74

1.97

2.12

—-

—

1.77

1.99

1.40

1.52

National City
New York Trust-—-

1.40

1.49

1.48

1.51

Public National

1.68

1.70

—-

It will be noted that in every

.

*

-V,

,

'

•

• ;

sets

drinks

in

1946

and

the 15 banks.

they

only

ings

are

all earning as¬

1947 for each of

Net operating earn¬

considered, against

earning assets at the mid-point of
the year.

-wring it dry."

<$>—

'•

'r-;

■

sponsor

tion

% ;

Rippel & Co.
Established

18 Clinton

Telephone: BArclay 7-3500

1891

(L. A, Glbbs, Manager Trading Dept.)

N.

Y.

Phone—REctor

W.

the

on

the Dinner Forum, will
of highly

Qualified

15-minute

a

Tax program

Federal

Radio Sta¬

on

WLIB, New York

March 7 at 11:45

In*

Federation

the

of

&

,

Inc.,

Howard,

E.

Casualty

Continental

uels,

Chicago.

.

0.68

0.77

0.59

0.60

0.46

0.51

0.64

0.68

information, which will
be presented
in a question anc
answer type of program, has been
prepared by some of the leading
tax
accounting
experts
in
the

0.62

0.62

United

Trust

—

Hanover!

Central

„

Chase

Chemical
Corn

—

—

Exchange

____

The tax

First National—

1.27

1.26

will

Guaranty

Trust—

0.65

0.79

many

-

broadcast

be

the

of

clear

to

•

0.68

072

hensions

0.57

0.57

payer.

National

0.45

0.52

The

0.72

0.75

will

0.57

0.53

President and Mr. Thomas V. Gil¬

1.22

1.22

lespie, Vice-President of Brooklyn
Chapter, National Association of

0.68

0.71

Cost

City———
Trust

Trust—

S.

of

Manhattan,

First
a

Na¬
fraction¬

years,

while the other nine banks
improved net rate of

an

re¬

.

be

Accountants.

r

A similar program will be pre¬
sented on Thursday, March 11 at
-

2:45

over
Radio
Stations
and WHNY (FM), Hemp¬

p.m.

WHLI

stead, Long Island.
on

this

The speakers

presentation

^

Flood,

will

Kattenhorn

Messrs^ George
Russell

turn.

by the tax¬
v.,.'"

speakers on the. program
Mr. Raymond C. Morse.

respectively

-

-

past

A

Drysdale

delayed
the

HEAD

He

employees.

now

^

/

also

does

company

live the union

3

:

••

ferring with officials of the Stock
and

Exchange

Franklin Square

Local

avert the

by the union.
Curb

are

8 West

49

INCORPORATED

NEW YORK 5:

67

WHITEHALL 3-0782

Ifall Street

:

!

Charing Cross, S. W, 1

We

/

,

;

purchased, under rights, ; V
4,492 shares at $42 per share

Stockholders

are

10 Post Office Square

231 S. LaSalle Street

210 West Seventh Street

RussBuilding

HUbbard 2-0650

FRAnklin 7535

Michigan 2837

YUkon 6-2332

BS-297

CG-105

LA-1086

SF-573

SAN FRANCISCO 4

have

offering the unsubscribed balance of
8,008 shares at the market. 1

R. H. JOHNSON & CO
Established

£141,823,667

INVESTMENT

PRIVATE WIRE SYSTEM

-CONNECTING: NEW YORK, BOSTON, CHICAGO,
CLEVELAND, PHILADELPHIA, ST. XOUTS, DOS ANGELES, SAN FRANCISCO
TELEPHONES TO: Hartford, Enterprise 6011

TOTAL ASSETS

Portland, Enterprise 7008

Detroit, Enterprise

6066

Associated

64 Wall Street,

Banks:

BOSTON

Glyn Mills & Co.
Troy
Williams

Deacon's

Bank, Ltd.

Albany

Wilkes-Bar re

an

Similar talks

National Bank

($10 Par Value)

in

scheduled

NY 1-2875

LOS ANGELES 14




v

64 New Bond Street, W. /

CHICAGO 4

7008

Smithfield, E. C. /

Burlington Gardens, W. 1

BOSTON 9

Providence, Enterprise

^

205,

strike threat-;

STOCK

CAPITAL

Bisbopsgate, E. C. 2

be-

represents its

12,500 Shares':

LONDON OFFICES:

stated

not

A Federal mediator is now con¬

with the

;

OFFICE—Edinburgh

un¬

had

petitioned the

had

hold.

to

the

that

were

;

has

representation election

a

company

NLRB

;

union

added-the

and

true,

&

refused

Kidder

stated that the charges

ened

iBranches throughout Scotland 1

&

have

for

spokesman

lyn Chapter, National Association
Accountants.

to

Kidder

Street; Asiel & Co.,

Street, -and

effort to

Cost

M.

A.

Broadway,

71

President and Treasurer of Brook¬

of

Na¬

Board

bargain with the union.

to

be

and

Wall

11

Co.,

filed

regional

Relations

that

Wall

1

Co.,

the

Labor

effect

the

entertained

Trust——

National

tional

have

AFL,

.

with

charges

Financial

United

205,

Employees,

up

misappre¬

common

l

Wall St. Firms

information

Full

States.

Manufacturers Trust

York

Employees Union
Complains Against

Incorporated by Royal Charter 1727

6EYER & CO.

Co.,

'/•

Local

0.50

Royal Bank of Scotland
BANK and INSURANCE STOCKS

Boston;

Hutton, New York; Secre¬

Sunday.

on

.0.55

2-4383

WHOLESALE MARKETS IN

are:

Woodworth,

tary-Treasurer, Richard H. Sam¬

a.m.

0.51

MArket 3-3430

Bell Teletype—NY 1-1248-49

Forum."

0.55

show

St., Newark 2, N. J.

Statis¬

Vice-President, Lucien O. Hooper,

Manhattan

of

ally lower net rate in 1947 than
in 1946; Corn, Manufacturers and
U. S. Trust show the same in both

J. S.

5, N. Y.

Eaton
-

Bank of New York-

Bank

tional and Public show

Members New York Stock Exchange

Helen

"

panel

a

come

•'1947

%

Bank

Laird, Bisseli a Meeds

by

American

President, y Kennard

sociation of Cost Accountants will
ASSETS !,

SECURITIES

STOCKS

Galanis, Shields

.assisted

the

of

Officers

Money

;

Broadcast Tax Advice

vs.

.

AVERAGE

INSURANCE

for

Brooklyn Chapter, National As¬

1946

U.

M.

J.

1.74

v

RETURN

EARNING

ALL

New

NEW JERSEY

Rates."

program,

-—

NET

Public

and

is

Company;

AFL Financial

Irving

BANK

&

.•

Outlook

I "Public Utilities Forum."

instancy the percent rate is higher
probably not strictly

Bankers
on

vention

tical Association.

Oil Secur¬

Similarly, the final event

1.56

Bank, New York.

Program Chairman for the con¬

chapter

Forecasting."

Market

"Railroad

1.99

National City

~

offer

1.67

Temple, Vice-President, the

1.47

1.29

obviously

are

The third and final table shows

don't take your bank account and

120 BROADWAY, NEW YORK

,

Inevitable?":

Boom-or-Bust

"Is
Alan

Co-

Analysis."

"Security

Author,

of the top

some

2.00

These rates, however, are

operating expenses.

the net return

very

Besides,

wonderful.

shown

rates

before

As one of

intimate and the food and
are

The

"Street"

"It is

it,

puts

mainly

Topics to be covered

V

-

,

"The

1/4 % higher

1.44

—

Pierre's. Restaurant

50th Street.

56

individ¬

17

drawn

ities.";,.. '

#

..

.

1.80

1.61

—_

—

told that quite a num¬

like

'y

.

1.07

Patronizing Pierre's
to

c/o

.

—

culated, and doubtless the method
was not uniform among the banks.

seem

The

"Factors Affecting

."1947

1946

1947

r/o

■

Trust-

Manufacturers

Hansford Wills,

people from the

fields.
.

y; "Stock

All Earn. Assets

on Loans

1946

%

—

Wall Street Men

of

Street.

Analysts,

President,

Cor p.,

Slade, President of the New York

•

1.53

of Manhattan—

Bank

comparable, one bank with an¬
other, since there are several ways
in which the return can be cal¬

ber

Security

are:

Avg. Return on

Average Return

1947

1946
"" '

in 1947 than in 1946.

are

f."

-

U.S. Govt. Securs,

and Edwin D. Sampson.

We

\r

Graham,
Newman

-

(and

Securities":

Galanis

M.

talent in their respective special¬
ized

of

Research

Making

in

Money

Graham

cieties, represent

earning rate in 1947 was alluded to in a number of
reports to stockholders, examples of which are/Lsteq

■

Mitchell, Hoff¬

Dotterer,

P.

Russell

J.

of

Ways

Benjamin

f

'

V -J

Ed¬

Associates.

from

participants,

-

F.

Director

and

Manhattan

Research,

from the ranks of the various So¬

upward in 1946 and 1947.

Irving Trust

'L. M. Beynon,

0.63

that the rate of return on earning assets
declined substantially, year after year, from nearly 1% in 1939 to
little more than % of 1% in 1945, the low year; the trend turned

Average Yield on

Reserve.

& Co. are B.

ual

observed

be

below.

Pierce, Fenner &
Beane in the Baltimore and Wash¬
ington offices, and during World
War
II was a
lieutenant com¬
mander in the U. S. Coast Guard

man

Broad
.

Lower

William

Partner

86 154

of

of

Investment

of

"Techniques

wards,

Five forums

o

Impact

Management":

($000)

Co., Inc., in Washington.
Mitchell was formerly with

in

City, Boston,
Philadelph i a,
Chicago and
Los Angeles.

8,844,163

3.807,242

are:

Gainsbrugh,
Chief Economist, National Indus¬
trial Conference Board, Inc.'

groups
New York

lun

cur¬

mem¬

Martin

Prices":

($000)

&

Associated

Earning

com¬

to Federation

"Industrial

2,980,883
3,001,830
3,589,324

Wad-

Herrick,

with

All

eration

d-

e

.Return on All

will

It

the

Merrill Lynch,

1,

1947

These

f

The improved

served as a
lieutenant in the U. S. Naval Re¬
serve during World War II, was
dell

1945_i.

bers.

formed

Earning Assets

5,390,965

1946—

Hoffman, who

previously

Discounts

4,353,362

1944..

interest

($0001

_

M. Hoff-

rent

prises

Net

Net Oper.

analysts covering

capacity.

in

City Banks

New York

and

topics certain to be of keen

Earnings

1940—
are

,rnan,

Mr.

Securities
($000)

President, who will also be
in charge of the trading depart¬
ment in the Washington office; C.
Benjamin
Mitchell,
Vice-Presi¬
dent, who will be located in New
York City to service the organiza¬
tion; and H. Clark Helms, Secre¬
tary
and Treasurer,
who will
make his headquarters in Wash¬

John

Loans and

15

economists

the 325-guest

Assets

1939__

fices.

Officers

U. 6. G.

Year—-

of¬

between

Aggregates,

at

double

The recently

statements in each year.

Annual

been

least

earning assets in 1947, however, was

on

the four quarterly

extend

cilities

return

fa¬

wire

have

higher than: in
past five years.
The following table shows aggregate figures of the 15 banks each
year from 1939 to 1947 inclusive, together with the corresponding
net return on earning assets. The asset aggregates are averaged from

t i m o r e;

vate

in N. Y. City today (Thurs¬
day, March 4,) has been heavily oversubscribed.
Demand appears to

194-3, in fact was the highest rate achieved during the

Trust

ti le

This Week—Bank Stocks

net

City; Mercan-

an¬

nounced that the first annual convention of The National Federation

of Financial Analysts Societies being held

Aggregate net operating earnings of 15 New York City banks
in 1947, exclusive of security profits, were 5.3% below 1946 results.
Holdings of U. S. Government securities were 17% lower, loans and
discounts were 3% greater and total earning assets 10% lower.
The

will

firm

maintain

C. Benjamin Mitchell

Joseph M. Galanis, of Shields & Co., Program Chairman, has

Hoffman &

Co., Incorporated to specialize in
Baltimore and Washington Mar1

Analysis Holding First Convention :

Newly formed national federation meeting in New York March 4
with extensive program.

the

of

made

'formation of Mitchell,

Thursday, March 4, 1948

Financial

Mitchell, Hoffman & Co.
Is

CHRONICLE

FINANCIAL

&

COMMERCIAL

1927

SECURITIES

New York 5, N. Y.
PHILADELPHIA

Buffalo
Syracuse
Harrisburg
Scranton
Springfield
Woonsocket
Washington, D.C.

Volume

~

Number 4678

167

THE COMMERCIAL

v

«i,

-•

&

FINANCIAL

CHRONICLE

(1003)

11

.

New Issue

$300,000,000

State of New York
2% and
Dated March 1,
of

Due $30,000,000 Bonds each January 1, 1949-1958, inclusive.

1948.

redeeming, at

maturing

War Bonus (Serial) Bonds

value and accrued interest,

par

July 1, 1956,

on

or on

any

The Comptroller

to the

reserves

State the

privilege

interest payment date thereafter, all of the bonds

January 1,,1958.

< Principal
and interest payable in New York City (first interest date
January 1, 1949,
July 1 and January 1)'.Coupon Bonds in denomination of $1,000 and registered Bonds in denomi¬
nations of $1,000, $5,000, $10,000 and $50,000 at the
option of the purchaser.
The Bonds issued in

on

thereafter

form may be exchanged for Bonds registered

coupon
.

*

*'

V

in registered form may not be converted

.

.

'

;

'

,

.

>

.

•

.

~

1

}

as to

■'

'

.,

Interest

'

Eligible, in

:

are

the

to

acceptable to the State of New York

Superintendent of Insurance

Superintendent of'-Banks in

to

-*')•'

'

Coupon

«

Maturities

V
"
Prices

...

Rates

'i '

f '-'.j,'.

C

**

?

'

.

2%^-

1950

2

Maturities

-1

~90%

■

'*

^

v

Rates

f.

,

• \•r"'

■

■

i

•

■

,

<>'

(

t

;

•

security for State deposits,

as

*'

".

,Coupon.,,.
Maturities

;

Rates

1.20%

2

1.30

1955

1%

1953

1%

,/1.40

1956

1%

1

•

•

'

'

'

;

'1954

;-

%%'>'!

1

or

s

•.

-

»

Coupon

Prices

Maturities

Rates

to Yield

1957

1%%

t,f.

,

,

Price
1.55%
1.65

I

'

1

Yield

V

lOO(Pric)

1.85

J. P. Morgan 4 Co.

i

The First Boston Corporation
/

Guaranty Trust Company of New York

The Marine Trust Company
*.

of

,'. "

:

.

Hallgarlen & Co.

Buffalo

Chemical Bank 4 Trust Company

Halsey, Stuart & Co. Inc.

'.

;

-

.

; <■

;

Kidder, Peabody & Co.

;

Shields & Company

Manufacturers and Traders Trust Company

F. S. Moseley & Co.

Kean, Taylor & Co.

Bear, Stearns & Co.

Drexel & Co.

Goldman, Sachs & Co.

•

Blair & Co., Inc.

Paine, Webber, Jackson & Curtis
Dominick & Dominick

Inc.

Union Securities Corporation

•

-

Eastman, Dillon & Co.

•

The First National Bank
OF

Laidlaw & Co.

L. F. Rothschild 4 Co.

W ood, Struthers 4 Co.

E. H. Rollins 4 Sons

'*."•••

Incorporated

Dick 4 Merle-Smith >• Hayden, Stone 4 Co.
"

,

;

Roosevelt 4 Cross

.

Robert Winthrop 4 Co.

Incorporated

Barr Brothers & Co.

Merrill Lynch, Pierce, Fenner & Beane

B. J. Van Ingen & Co Inc.

'

*

-

'

t

,

'

•

San

'

-

Incorporated

Hornblower & Weeks

*

National Commercial Bank 4 Trust Company

!

Albany

State Bank of Albany

"

Hemphill, Noyes 4 Co.: Alex. Br own 4 Sons
"

•

Estabrook & Co.
Geo. B. Gibbons & Co.

'

••

•

Seattle-First National Bank

Francisco

Inc.

■

Lee Higginson Corporation

American Trust Company

PORTLAND, OREGON

Adams, McEntee 4 Co. V Bacon, Stevenson 4 Co.>
Incorporated

<•

•

.

The Philadelphia National Bank

Phelps, Fenn & Co.

Schoellkopf, Hutton & Pomeroy, Inc.

'
.

C. J. Devine & Co.

of Chicago

■

Salomon Bros. 4 Hutzler

Mercantile-Commerce Bank and Trust Company

Lazard Freres & Co.

Savings Bank Continental Illinois National Bank and Trust Company

Ladenburg, Thalmann & Co.

,

Blyth & Co., Inc.

_

Pressprich & Co.

us

*

Lehman Brothers

<

;

•

'

'

.

Reynolds 4 Co.

Coffin 4 Burr
Incorporated

'

Weeden4Co.,Inc. First of Michigan Corporation Braun,Bosworth 4 Co. Trust Company of Georgia Harris, Hall 4 Company A. G.Becker 4 Co. A. C.AlIyn and Company R.H.Moulton4Company
Incorporated

—

Chas. E.Weigold 4 Co.

Eldredge 4 Co.

Incorporated

W.E.Huiton4Co.

Incorporated

Laurence M. Marks 4 Co.

C. F. Childs and

W. H. Morton 4 Co.
Incorporated

.

Company

Hannahs, Bailin 4 Lee

Newark

William Blair 4 Company
•

"

W. C. Langley 4 Co.

Incorporated

Incorporated

Baker,Weeks 4 Harden

Green, EHis 4 Anderson

>

Newark

Commerce Trust Company
Kansas

,

Incorporated!

>

Graham,Parsons4Co.

Bramhall, Barbour 4 Co., Inc.

\

Gty National Bank and Trust Company. California Bank

City, Mo.

Kansas

City, Mo.

i

,

,

.

-

.

John Nuveen 4 Co. Commerce Union Bank Donald MacKinnon 4 Co. Swiss American Corporation
Nashville

'

Francis I.duPont 4 Co.
i

American Securities Corporation

....

✓

Fidelity Union Trust Company The National State Bank

The Illinois Company

<Incorporated)

,

Tucker, Anthony 4 Co.- E.F.Hutton 4 Company
,

Incorporated

INC.

Whiting, Weeks 4 Stubbs

Los Angeles

-

Sage, Rutty 4 Co., Inc.

Hirsch 4 Co.

,*

,

Stranahan, Harris 4 Company IraHaupt4Co. F.S.Smilhers4Co. Dean Witter 4Co. G. H.Walker 4 Co. Heller, Bruce4Co. The Wisconsin Company The Public National Bank and Trust Company
Incorporated
„

New

York, March 3, 1948.




^

'

Incorporated

;

i.

The Northern Trust Company The First National Bank of Chicago Harris Trust and

Vv

r

(toma.u.ity)

.

The Chase National Bank

;

Bankers Trust Company

;

-1

Harriman Ripley 4 Co.

*

*

1.80%

1958/56 1%

'

{

•,

Certificates will be issued pending delivery of Definitive Bonds

Incorporated

R. W.

*

'

be added)

to

*»•.■

1952

First National Bank ■
•.

Manufacturers Trust Company

*

.

.

are
offered subject to prior sale, for delivery when, as and if issued and received by
subject to the approval of legality by the Attorney General of the State of New York...

"■

& S. A.

to Yield

The National City Bank of New York

•

Company

V

Smith, Barney 4 Co.

N. T.

"

•

;•'/?

1951" ..'2%r

Interim

Bank of America

—

The above Bonds
and

'■.■

*

.

policyholders, and to the

secure

j

1.05

'•

.

i \
Prices

-Vv;

Bank of the Manhattan

i

<

»

to Yield

1949

r

for Banks and Trust Companies.

trust

(Accrued interest
1 '

".V:

V

t

:MATURITIES AND PRICES

-V;
'*•

'

as t legal investments for Savings Banks and Trust Funds
York,, Massachusetts, Connecticut and certain other States

New

The Bonds

''

•*

opinion?

our

in

'

J

'>

1

form.

Exempt from Federal and+NewYork State Income Taxes under Existing Statutes and Decisions

w

-.

principal and interest, but Bonds

reconverted into coupon

or

.

'

•

,

'

of New York

:

12

THE COMMERCIAL

(1004)

New

than

by now been consummated.
addition, however, most of the
railroads
that maintained
their

declining traffic volume.
That
petition has already been lost to they eventually can be brought
into line with a lower traffic level,
the railroads. No important fur¬
ther inroads are likely. So far as however, was well demonstrated
in the 1932-1933 comparisons. The
coastal and intercoastal steamship
1933 gross was lower than that of
competition is concerned there
1932 but the wage ratio was re¬
seems
to be little likelihood for
duced in 1933 to the lowest point
its return on a large scale unless

solvency during the depression era
have been engaging in aggressive

heavily

Factors in Railroad Secuiil y
overall industry

affecting the

/

statistics.

About

third of all railroad mile¬

a

in bankruptcy or receiv¬
ership in the middle 1930's and
reorganizations for most of them

age was

have
Some Generalizations

In

impossible to deal with the

It is

single inis necesary to generalize on some of the
jroad aspects of the picture. With
x
consistent record of profitable
operations, the troubles of the
ailroads, and the pessimism to.ailroad

industry

a

as

/estment problem but it

railroad

.vard

stems

securities,

argely from the burden of fixed
jharges.
These charges consist
nainly of interest on outstanding
Donds. In the distant past it was

general practice of railroads
ifter
making
capital improve¬
ments to their properties to capi¬
he

expenditures through
of securities.
Too

such

talize

issuance

the

these

often

improvements were
capitalized through the issuance
of more or less permanent debt.
Except for equipment trust secu¬
rities, there was rarely any pro¬
vision made for serial retirement
of such debt.

In fact, even

sinking

funds were few and far between.

just taken for granted that
the
physical
assets
would,
if
maintained
properly, retain its
full value permanently, and that
at maturity the bonds could be
refunded with a new long term

recognize that
this entire philosophy has been
changed since the unhappy ex¬
periences of the depression dec¬
ade. Practically all bonds issued
in recents years have had sinking
funds.
Reorganization plans set
up
by the Interstate Commerce
Commission
have
virtually
all
It is important to

provided sinking funds not only
for fixed interest bonds, but, also,
for the new income bonds.

These

reorganization plans have, more¬
over, generally provided for the
setting aside of a definite propor¬
tion—2% to 314%—of gross every

better¬
property.
These

additions

for

year

ments

to

funds

come

the

and

ahead of income bond

expenditures
from these funds may not be capi¬
talized in the future. Finally, in
interest.

Moreover,

past few years the Interstate

the

has

Commission

Commerce

re¬

depreciation at set
rates of certain road properties.
Formerly, most of the railroads
depreciated only their equipment.
the

quired

Reduction of Railroad Debt

Railroad debt hit

peak of over

a

It has subse¬
quently been reduced by about $3
billion.
During this same period
$10 billion in 1932.

expenditures

gross

betterments

and

for

to

additions

the

property

equipment
(exclusive
of
outlays)
amounted
$6 billion. Net work¬
ing capital in the interval has in¬
creased about. $1.7 billion.
It is
notable that the gross expendi¬
and

maintenance

to more than

tures

on

additions

and

better¬

ments plus the increase in work¬

ing capital since 1932 is greater
than the entire present debt of

including equip¬
ment
trust
obligations.
These
figures dramatically illustrate the
changed financial philosophy of
railroad management. J
the

Hudson

Central

Illinois

Topeka & Santa Fe and Great

son,

about

Northern have each shaved

So far

their debts.

from

third

a

has

by about 40%. Atchi¬

cut its debt

the burden of fixed charges are

as

pipe lines are here to stay as
a competitive influence.
Prior to
the war the pipe lines had di¬
verted an overwhelming propor¬

good part of the
debt reduction has been accom¬

through

plished

reorganization.

Bonds

Special Securities

tection

ment faith in sound railroad prop¬

products from

Fixed

erties.

below

down

charges

now

are

million

$450

com¬

CPAIiiltTEED RA1U0AP

!

!

STOCKS-HMDS

New York 4, N. Y.

Telephone BOwlIng Green 9-6400 "
-;

Teletype NY 1-1063




it

war

that

loan, rates by the railroads.

the

railroad

lowest

of

year

three

The

Rates

fre¬

most

things

quently mentioned as unfavorable
factors in the railroad picture are:
(1) competition; (2) wages, and
(3) rates. I will take these points
all of which I consider are being

heavily stressed, up in order.
By the late 1930's there was

too

the

Considering

factor,

cost

and

facilities," there

of

limitation

the

lowed

better service.

of

It is likely

that the air lines will

work

have

luxury

rolls.

These

amount

the

into

cut

competitive

serious

that

about

had

inroads

continue

to

nassenger

business. This diversion

of freight
traffic which is, after all, the an¬
swer to railroad earnings.
During
the war the railroads naturally

speaking

handled

merely

now

sharply higher propor¬
tion of available traffic than they
had

a

immediate

the

in

This proportion has dropped

since

the

of

end

the

slower

much

but is

war

All

in

all,
about

worry

nicture.
our

level
experience a
further gradual decline from here
but I do not believe that it is apt

to

Factor

The Wage

It

presumably

mechanization

*

I

little to
competitive

see

can

in' the
The railroads

still

are

major transportation medium
our economy and

and essential to

defense.. The

wage

„

One of the outstanding charac¬
giving the railroads the most
trouble
they were unregulated teristics of the railroad industry
and to a large extent their labor ever a lone period of years has
was not organized.
The interstate oeen the ability of management
trucks are now subject to as strin¬ to control the overall wage costs.
gent I.C.C. control as are the rail¬ These wages constitute the rail-'
roads.
Also, the employees are roads' most important cost ele¬
now
unionized. -With regulation, ment. The proportion of gross ab¬
and with its labor organized, the sorbed by wages in the period
trucks are no longer in position 1921-41, inclusive, fluctuated be¬
to engage in the cut-throat com¬ tween a high of 50.13% in 1921
petition which once made them •md a low of 45.35% in 1933. Aside
such a thorn in the side of the from 1921 there were only four
railroads.
As a matter of fact, vears during that interval when
their costs have mounted so rap¬ wages absorbed as much as 48%
idly that the profit margin; for of gross. Those were the three

industry has virtually van¬
ished.
Trucking
interests
are
among the most vociferous pro¬
ponents of higher railroad freight

vears

rates.

Tn 13

-

•

*

trucks
our

only three vears of the interval
(1933, 1936. 1940) did wages ab¬
sorb less than 46% of revenues.

,

cross.

There are a num¬
functions, particularly in

ber

of

short-haul

which

field,

fluc¬

rates

the

the

durng

they

years wages

extremely rarrow
between 46% and 48% of
This desoite the fact that

range

highways.

the

of the 21

tuated .in

going to disappear from

are

1930-1932 and the year 1938.

Tn

to intimate that

not mean

do

more

period

hourly -:wage

than trebled.

have

than

we

For

one

much

indicated

the

attitude
state

I do believe, however,

levels

ices were

complementary to.
rather than competitive with, raiL
road operations.
It is significant
in this respect that the railroads
themselves have gone heavily into
be

competition in the
past has also been serious. So far

should

competition
to be

any alleviation.
political matter.
While it results in large deficits
there is little hope that it will be
eliminated. However, practically
all, if not actually all, of the ..traf¬
a

fic vulnerable to this
''••

•

r

•'.

»

i

type of comi

.■

■

ji'i.

i

ii

be

In the read¬
and influ¬
retroactive

considerablv

perhaps

1948,

again

into that 46-48%

prospect of

primarily

serious

serv¬

increase, payrolls absorbed
54.7% of gross. Last year, despite
additional hourly wage increases
late in the year, the ratio -was
orobably down to about 50%. It

Waterway

appears

a

at peak

passenger

1946,

year

was

years

wace

highway transportation.

there

even

profitable.

justment
enced
by

•

concerned

and

-

-

in

lower

going

down

'

range,

In connection with the few years
in the

above
tant

past when the ratio bushed
the 48% level it is impor¬

to.

keep in mind that tradi¬
tionally and inherently the rail¬
roads are rather slow to get ex.-,4'

t-lik

/',

4/

»,J.

4

(

ft

...

t

U't

is little, if

liberal

more

in

Commission

all recent rate cases. This includes

fares and mail pay as

passenger

well

as,freight rates.

There
ness

as

;„_j ;

v

considerable uneasi¬

was

a

result of the lag in 1946

the

between

effective

date

-

of

retroactive
the

- wage
increases -and
granting of .rate, relief by -the

Commission.

This

has

all

been

altered

by the 1947 experiences.
increases were not retro¬
active/ Those granted the nonoperating unions were effective

Wage

Sept. 1. Within six weeks the rail¬
roads
were
granted their first

rate increase,
on most com¬
Some of the operating

freight
amounting to 10%
emergency

modities.

and

accepted

differences

a wage

increase ef¬

1. Before the end of

fective Nov.
the

their

settled

unions

the
Commission had
granted another temporary emer¬
gency freight rate increase, again
amounting to 10% on most com¬
year

modities.

decisions

These

unanimous.

were

Also, the corftmission

recognized its man¬
Congress to establish

specifically
from

sufficient

to

allow

reason¬

efficiently operated

roads, and to maintain an ade¬
quate transportation system. The
railroads demonstrated the vital
nature

the

their

of

war

facilities

and considering

during
the in¬

industry

Selective

much

So

allow

national policy
the system to

Last

,

had a
Some
people compare this unfavorably
with the $500 million net realized
year

the

net income of

in 1941

on

a

of business.

proof
tion.

quite

often

"Railroad

tive"

much smaller volume
This is

is not

pointed to

basic

as

deteriora¬

generally real¬
ized is that last year three of our
major carriers, Baltimore & Ohio,
*

1.-

Vjrt.

'» f-l,{ r/?

hear

some

securities
"Railroad

or

one

say

attrac¬

are

securities

are

unattractive."
has
be

Actually it never
possible, and never will
possible, to consider all rail¬
been

road

securities

that

say

whole
and

are

I do,

single group.
railroads as a

as

a

the

fundamentally

essential

to

is not to

our

sound
as

economy,

that every unit
in the group is going to show high
earning power. It would be just
as
sensible to say that because
say

General Motors was going to do
well, Packard, Kaiser-Frazer and

Willys-Oyerland
likewise.

do

bound to

were

Such

is

attitude

an

to

ignore the fact that there are
quite a number of railroads that
have reported earnings and paid
dividends on their stocks through¬
their

out

have

histories

undergone

while

others

two and
even three reorganizations in re¬
ceivership or bankruptcy.
one,

railroads

Different

able

vulner¬

are

in

varying degree to the
forces that work to deter¬

many

mine traffic

and

earnings trends.
could not all be

Obviously they
in

affected

identical

different

the

to

manner

competitive

that have been at work.

forces

The coal

roads, for instance, have been vir¬
tually immune to highway com¬
petition and will continue to be
Their

so.

traffic

and

revenues,

therefore, have held up relatively
most

or

than

better

much

This

partially

industry,!

the

individual

other

advantage

has

roads.

only

been

the fact that
encountering

by

offset

itself has

coal

been

increasing competition from other
/ /
;
•
j

fuels.

.

There

three

are

that

ness

have

types of busi¬
particularly

been

competitive pressure.
traffic, l.c.l.
freight, and short haul freight, un¬
subject

These

to

are

consists

it

less

passenger

movement
coal

train

the

of

load

items such

bulk

of

iron

or

as

Broadly speak¬

ore.

ing, then, it will be found that the
railroads that handled
a,. large
,

amount of passenger

business and:
freight, or whose average
haul was relatively short, had the
poorest reverlue trends. It is the
l.c.l.

roads that

are

on

will

again

when

suffer

to

severely

most

general

our

turns

still heavily depen¬

this type of business that

dent

re¬

economy

nearly

normal

competition

is natu¬

more

levels.

.

line

Pipe

rally quite limited in its applica¬
tion

and

vidual

influence

To

road.

indi¬

the

on

of the
southwest carriers the growth of
the pipe

lines

many

was

seripu.®

a very

blow.

It did not, however, do an;; '

harm

to

such

road

a

Northern.,; The

same

as

is

.

;Gr£a

true ;ot

waterway competition in all. of its
phases, inland, coastal, and inter¬
The only ones handed

coastal.

great

any

whole

rail

lelled

the

extent
lines

studied
vidual

.routes.!

factors

with

These

all

must

be

respect to the indi¬
before

road

to

' those

were

generally paral¬

water

competitive

program

can

any

invest¬

be laid down,

certainly before it is possible
the

entire industry
losing business! to
other transportation agencies. / ;

to

condemn

$480 million.

of serious
What

railroads

Investment

for

generalities. One
serious mistake in invest¬
thinking is that railroad
securities are quite frequently re¬
garded as a cohesive group. You

because

"

the

ment

and

would

eastern

from

very

ment

down.

the

If

that the rest of the country com¬

to conceive of any

run

net.

eliminated

were

ternational situation it is difficult

that

the industry gross,
virtually nothing to

pared much more favorably with
the 1941 performance.

Inter¬

by the

displayed

Commerce

date

war

now

rate structure.

roads

.

it

competitive pressure on the
More important, is

any,

able profits to

-

right

thing, there

sharply
during, the
when freight volume

perform far more efficiently
and economically than the rail¬

waterway

as

had in the past.

ever

rates

inland

future

confidence

for

/ Naturally the wage ratio dropped

will

employment

the

in

can

can.

maintenance

f

of

industry figures it would be found

opportunities for in¬

successful

as

were

.1

o

reduced

operating economies
have by no means all been ex¬
hausted as yet. This is the reason
why I still have confidence that
railroad management will be just

reason

factor is a
to go all the way down to prewar *ar more serious consideration,- as
levels.^
;rtl
v
i
\ it- is with our entire industrial
The most important competitive nlant,. but there are valid reasons
for optimism even on this score.
factor is the trucks. When trucks

the

and

Modern shops and

has been in the past in meeting
presumably have to the problems presented by mount¬
wait on expansion of a;r ports and
ing hourly wage rates.
fhis will apparently have to be
Question of Rates
'tone
at greater distances-from
On the third question, that of
the metropolitan areas.
?'.'/■
rates, I believe that we have more

still well above the prewar

will

schedules

time

faster

stituting

in

pace

and greater

will

travel

prewar

years.

certain

is

however,

power

The new, more efficient,
improves fuel consumption
performance and reduces, or
eliminates, the need for double
heading and helper service. Cen¬
tralized
traffic control, has al¬

grounds for these
any considerable
freight is concerned.

far

so

track

motive

power

as

fears

Improved

new

no

certainly

are

be at a
the future
run
their full course.
In other than it was in the past. Air port
words,
the railroads'
share of facilities at maior points are al¬
traffic available to all transporta¬ ready taxed to their utmost. Any
wide
expansion
in
air
tion agencies had stabilized. I am further
evidence

definite

and

speed.

of the public as a
threat to the railroads.

serious

long period

a

allow heavier loading

imagination
Competition, Wages and

over

needs.

tenance

structure

the

The air lines have captured

'

ability

years

rail and treated ties reduce main¬

prevent further divers on
to new pipe lines center around
the establishment of bulk, train

the

roads

To

to control wages stems
from the expenditures for addi¬
tions and
betterments.
Heavier

mainly
Ef¬

was

in

earnings, 1938.

of

vulnerable..

was

forts to

It is

25 Broad Street

the

before

The

'

the rails, whereas

with a peak of over $680
million.
The present charges
would have been covered in full
pared

little
„

It is

crude

pro¬

regardless of the level of

expenses.

possible that new pipe
l'nes constructed during the war
will
divert
refined
petroleum
vere.

earnings

considerable

them

tition may become even more se¬

is

■■

is

up

augmented by low cou¬
pon refunding.
Fortunately, the
neriod of lowest interest rates co¬
incided with a renewal of invest¬

has been

as

I

it

maintenance

during the war and the
roads all had plenty of cash to
spend.
Finally, the carry-back
provisions of the tax law gave

not be recap¬

can

matter of fact,

a

built

possible that this form of compe¬

ties

:

As

tured.

deferred

retirement

debt

this

concerned

that in the future trucking activi¬

Guaranteed Stocks

This

railroads.

A certain amount of
had
been

sharply.

and

from the

tion of crude petroleum

that

the railroads had less incen¬
tive than usual to cut back quickly

the inland waterways,

As with

21%

contributed

This
con¬
poor

year

the

,

a

the inland

like

it,

have

indebtedness by

bonded

50%.

about

Pacific

Union

and

cut their

railroads,

Naturally,

Analysis

to

waterways, is during the 1921-1941 period.
subsidized.
Costs have lag in getting expenses under
trol also helps to explain the
debt retirement
programs.
For gone up too rapidly to allow com¬
1946 showing. In addition, in
example, since 1941 Delaware & petition.

It was

issue.

time

1948

York
Central, and Penn¬
sylvania, which acocunts for more

It just takes
readjust the service to a

under control.

penses

(Continued from page 2)
ninder of weakness, and adverse-

Thursday, March 4,

CHRONICLE

FINANCIAL

&

it

is

Territorial Considerations
In

addition

factors

there

to

the

are

competitive
territorial con¬

siderations that affect the traffic
and

revenue

status

vidual railroad... In

these

territorial

of

the

some

indi¬

respects

consideration^

(Continued 6n page 27)
#r

1 *'

T^!-;

r,> VV^/^

t

Volume 167

Number 4678

THE

•

COMMERCIAL

&

FINANCIAL

CHRONICLE

UNION CARBIDE AND CARBON CORPORATION AND SUBSIDIARIES
OPERATING

IN

UNITED

STATES

AND

CANADA

UCC
CONSOLIDATED

BALANCE

December

SHEET

31,1947

ASSETS

LIABILITIES

Current Assets
Cash

Current Liabilities
!

:

;

United States Government Securities (Cost
Other Marketable Securities (Cost

or

or

$ 99,230,150

Market, whichever lower)

Accounts Payable
Dividend

100,562,015

Market, whichever lower)

1,252,819

Income and Other Taxes

'

Other Notes and Accounts^..;;..'::

or

111,971,398

;

,

$378,447,769

Total Current Liabilities

Land, Buildings, Machinery, and Equipment
Deduct—Reserves for Depreciation

"

Investments (Cost

or

282,182.966

and Amortization

238,059,702

Reserve

less)

.

1,648,144

.

'

150,000,000

Contingencies

for

(See Note 4)

Union Carbide

of

and

6,541,0.43

Carbon

corporation—No Par Value—Not including 136,649

3,127,142
24.338.410

shares held

27,465,582

by the Corporation

9,278,163 shares

Deferred Charges

issued under Slock Purchase Plan

for

Employees and held by the Corpo-

3,353,987

etc.

$192,922,561

201,625 shares

\

ration

collateral (See Note 5)..............

as

21.618.969

9,479,788 shares
of

.

....v.......;........,?....•

Capital Stock
$

Foreign Subsidiaries

Postwar Refund

64,984,225

$102,663,429

...

$520,242,668

.

Affiliated Companies

Prepaid Insurance, Taxes,

6,573.538

2.70% Promissory Notes Payable December 1, 1967
(See Note 3)

•

Liabilities.;,.(

Deferred Liabilities Under Government Contracts

less)

or

315,000

Other Accrued

65,431,387

Market, whichever lower) (See Note 2).......

Total Current Assets

Fixed Assets (Cost

10,227,669

-

$ 58,095,667

Interest

$ 55,203,718

Trade Notes and Accounts

inventories (Cost

9,479,788

Accrued Liabilities

receivables (After Reserve for Doubtful)

'

$ 28,199,416

Payable January, 1948

Excess Profits Tax (Canadian Subsidiaries)

1,782,344

214,541,530

Less present amount of

Agreements....

21,480,171
193,061,359

;

Patents, Trade-Marks,

Earned Surplus

i

Goodwill

and

195,195.410

,

388.256,769

tf n.

$649,109,383

,$649,109,385
y

1

CONSOLIDATED

INCOME

AND

SURPLUS

Year Ended December
INCOME

Income

SURPLUS
Earned Surplus

A:v.

Other Income

31,1947

STATEMENT

.V.--,

.

Gross Sales—Less Discounts,

STATEMENTS

Returns, and Allowances

6.703,499

(Net).........;..

'

CI."

■

January 1, 1947

trative

Selling, General, and Adraiuis-

Interest

on

'

*

.

"

;

1 ..''

'

•

Contingencies...,....

:

•

4

.

'

*•

'r

.Net Income

*r

for the

"

Year......

Net Income Per Share—On 9,479,788 shares

t•;

90,666,792

t,

*•

••

«

.

4'

$ 37,692,552

'

K;

principles used in preparing the accompanying consolidated
follows:
' *
'
cent owned, and operate
>' In the United States and Canada, are consolidated.
.{'• 1 Current assets, deferred charges, current liabilities, and income of
statements for the year 1947 are as
'"

All subsidiaries that are one hundred per

f Canadian subsidiaries

consolidated

are

converted at the official rate

Other assets and liabilities of Canadian subsidiaries consolidated are converted at the prevailing rate at time of acquisition
;:or assumption.
/Foreign subsidiaries, all one hundred per cent owned, are shown as
;•
-Investments.
•,
Affiliated companies, less tiian one hundred per cent but not less
of exclcinge.

/

*

also sinnvir as hivestments. The equity
:r*"- in the net worth of these affiliated companies increased $2,934,227 between January 1, T938 for date of acquisRion, whichever is- later), and the date of latest unaudited financial statements. Of this iri:crease, $7is applicable to tlte current period.
'
Income includes dividends paid by foreign subsidiaries and affilin,i7iated amipanies out of surplus earned since date of acquisition.
.
- ..

ithtftrfifty per~cent"owned;

are

'*

1

-

»

%
'

^-.Inventories- totaling $111,971,398 consist of the following major ;
Classes: Raw Materials and Supplies, $44,237,241^ Work ill Process,
$34,389,928; Fiuishefl Gooils,-$03,345^129.-i. t
.
-.• *
•
-

$ 75,666,792

Earned Surplus

at

4—A review of the
Act

was

vsix,

months'foffowjng bis death, to repurchase the unpaid-for shares
price tq be pahMry'such participant. Since the inception of the

at the

Plan

provide for the payment of principal in the
beginning on December 1, 1953.

operations for the

yeaT

in

l»4fl'a

issued of which

been

total of 202,009 shares'have

201,625 shares are hehi by the Corporation as

-

collateral.;

j6-—Union Carbide and Carbon Corporation and

1945 under the Renegov

are

made. Rending final settlement the cash refund to

estimated to be $271,190, has been charged to Ac¬
crued Provision for Wartime Ad justments. Tl»e balance of $0,541,043
Iremaining in the Accrued Provision for Wartime Adjustments, re^
suiting froin charges against income in prior years, has been trans*-

*

ferred to Reserve for Contingencies.

;•

f to

as

attorneys' feeaaiul crats. Such suits are commonly referred

Portal-fo-PortaJ Pay Suits." Approximately

suits which had been
or

^

costs to the

Products
Tinde Oxygen

•

Prest-O-Lite Acetylene

Prestone and Trek Anti-Freezes




Pyrofax Gas

•

several subsidiaries

for additional wages
equal amount as liquidated "daw*

defendants in suits brought by employees

for the current ami prior years, an

the Government,

t

":

■

-

6,655

37,699,207

December 31, 1947.

-amount of $10,800,000 per year

Tiation

"

/b

»
t

"

.

3—The promissory notes

December 31, 1947.,..

5—During, 1947 the Corporation entered into Agreements with 215
employees, ineluciing 8 directors, all of whom devote their full time
to the Corporation, and 0 officers who are not directors, covering
113,300 shares of its capital stock under the Stock Purchase Plan for
.; Employees as
approved and authorized by the stockholders in 1946.
The Agreements set forth a price of $100,375 per share, which was
the closing quotation on the New York Stock Exchange on the date
preceding ithe 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. Each participant has five years to complete pay¬
ment, and interest at the rate of two per cent per annum will he paid
on tiie 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 are released from '
the pledge tosthe partlcipants-in blocks of 25 as payment therefor iscompleted. Each participant has also agreed to apply against the
>v unpaid, balance the amount. If any, by which, the dividends pahl to
him on the pledged sliares exceed the interest. The Plan provides that
/If a participant shall die the Corporation will offer, for a period of

-

-

at

-

$7.98

1—The

'

I"

' ■ ■ ■

Decrease in Market Value of Marketable Securities

outstanding

Notes Relating to Financial Statements-1947

'

432,881,521

,
-

December 31, 1947

i

:

■■■"

:..

)

$232,894,617

"

'

-

,

periding

Corporation

or

•

one-half of such
liability

liave been dismissed without

its subsidiaries.

Although it is not possible to foresee with certainty the outcome of
as are still
pending, they do not appear to require the mak¬
ing of provision therefor and accordingly no such provision has been
,

such suits

made.

.'

,

the assets held
an

<

■;

by the Trustee of the Savings Plan for Employees in
permit the distribution of the Trust Estate to

amount sufficient to

the persons entitled thereto.

r ■'

;

AUDITORS'
TO DIRECTORS

REPORT

AND STOCKHOLDERS OF

.

.

UNION CARBIDE AND CARBON CORPORATION;

.

:

■

We have examined the balance sheet of Union Carbide and Carbon

Corporation and its one hundred per cent owned subsidiaries oper¬
ating in the United States and Canada, 4rs of December 81, 1947, and
the statements of income and surplus for the year then ended, have
reviewed the system of internal control and accounting procedures
of the companies ami, without making a detailed audit of the trans¬
actions,. have examined-, ori tested accounting* records, of the com¬
panies and other supporting evidence.by methods and to the extent
we deemed appropriate. Our examination was made in accordance
with generally accepted auditing standards and included all pro¬
cedures which we considered necessary in the circumstances'.
1
In our opinion, the accompanying bajarrce"sheet and related state¬
ments of income and surplus present fairly the position of Union
Carbide ami Carbon Corporation and its subsidiaries'consolidated at
December 31, 1917, and the results of consolidated operations for the
year, in conformity with generally accepted accounting principles
t

<

'

7—Union Carbide and Carbon Corporation has agreed to maintain

applied on
,

$195,195,410

a

basis consistent ^itli that of the preceding year.
y

.

New York,

-

,

t

.

:

I

'

•

ivri r4
^
^
Certified Public Accountants

oTTi»nvrsvr

^

Y.,* February 28* 1948

,

-

■

of Divisions and Units of UCC include

Bakelite. Krene, Vfnyon, and Vinylite

Acheson Electrodes

*

'

•

*♦

.

-v

15.000.000
■

-

•

Dividends Declared

46,501,216

Income Taxes

;

'

Deductions

315,000

2.70% Promissory Notes..

.

*'

'

•••

.

•

$ 75,666,792

;

.

'

16,644,574

.

'

/

-

•

$389,420,731

Expenses.!,..

Depreciation and Depletion
v.-

*'

"

*

Transfer from Reserve for Postwar

Cost of Goods Sold,

'

v

Net Income for the Year

Deductions

•

$142,227,825
•%'.

Additions

$528,548,313

J

at

.V

■

'"1

$521,844,814 "v

..

STATEMENT

Plastics

Electromet Alloys and Metals

•

•

National Carbons.

Haynes Stellite Alloys

Eyeready Flashlichts and Ratteries

Synthetic Organic Chemicals'

'

"

1!

14

THE COMMERCIAL

(1006)

&

CHRONICLE

FINANCIAL

make.sdnse "to

Barclay Investment Adds
„

(Special to Ths

CHICAGO,

Financial

has

staff

Barclay

of

come

John A.
addecf to the
Investment Co.,

low

that because
is high must

say

something' which

Chronicle)

ILL.

Dubach

Thursday,- March 4, 1948

•

down," something

must

come

down

which

is

also.'"

i

been

A

In. the long run
prices, should
stimulate*
buying, but until retailers have a
lower

clearer idea of the level at which

the

S uper sales man ship

39 South La Salle Street.

profit margins.

price decline will flatten out

they

are

likely to curtail

is one who forward orders and to trim the
can sell a double breasted suit to
inventories which have in recent
a. man
.with a Phi Beta Kappa months reached

By HENRY HUNT

very

"57 Varieties"

'

Interest

frotpocfvr upon request from
four investment dealer, or from

RESEARCH

&

SECURITIES

NATIONAL

CORPORATION

IM MOAOWAY, NEW YORK 5. N. Y.

New England
Fund

funds

mutual

is

trouble with this type

doctor to prescribe for a

a

the

patient sight unseen.

Incorporated

objectives

•

,

Trade

Calvin

current

i:sue

"Perspective" discusses the out¬

look;, for
cludes

as

retail

trade

and

con¬

follows: "It must be ad¬

mitted, of
favorable

\

^

Not

Outlook

Bollock's

high dimen¬

sions."

that while the
aspects in the outlook
course,

for.

Now

"These

Seemed Impor¬
Selected Invest¬
ments Company of Chicago quotes
tant"

Things

issued

by

from "Iron

Age" as follows: "Al¬
though no or.e knows for sure, it's
a
good guess current slump in
commodity market and sympa¬

retail
trade
are
completely
valid* they are fundamentally of thetic reaction in stock market
a
longer term nature.
The un¬ will have no effect on steel de¬
favorable aspects are more imme¬ mand and output. Nor will it be
diate.
A lower price level, it is of any importance to heavy dur¬
generally agreed, is greatly to be able goods activity. Plant ^and
desired, but it must be recog¬ equipment are wearing out faster
nized that this lower price plateau than
they are
being
replaced.
cannot be attained without a cer¬ Steel inventories are not larger
tain degree of economic distress. than they should be in relation
Lower

prices will

over

the

near

to

demand.

the

term- be translated into a reduced

date

volume

not. now/V-

of

sales

and

narrowing

Maybe at

affinity will
■>'.

later

some

come, -

but

V

'I-/.'

buy

there-are''no

Congressman, j udging by some
unfortunate examples overseas."
important for the salesman to find
out what his client's investment —Reprinted from the. New York
of

erences

Coffin & Burr
V

BOSTON

Retail

of

"...

v-y.--

fluctuations there will also be no

signed to fill the needs and pref¬

Founded 1898

when

is that

pf economy,

with ironic-

adds

broker

mor,

The mutual fund business is de¬

General Distributor

,

Key.

steadily growing. However, even
among people in the, financial business there still appears to be
abysmal ignorance as to just what the mutual fund business- has* to
offer today.
Recently the head of the research department of a
prominent member iirm received ? —
from one of its out-of-town cone- plex, which has caused the disspondents
the
wire: counting and sometimes over-dis¬
following
''List three most attractive mutual counting of bad news very far in
funds in order of attraction."
If advance an^ neglecting the ad¬
the wire had read, "Which three vent of good news until after the
Heinz food products dp you sug¬ fact. He notes that certain mem¬
gest we buy?" or "Wife sick, ssnd bers of Congress recently have
three different kinds of pills you been exhibiting severe Symptoms
recommend," it would have made of this malady, since they are
just about as much sense. There frightened when commodity
are
nearly as many varieties of prices are actively advancing and
mutual fund3 as there are Heinz even more frightened when there
foods and it is just about as silly is a possibility of a substantial de¬
to recommend three of them to cline.. Presumably their desire is
an unknown investor as it would
no
fluctuations at all,
but the
be for

ORGANIZED 1931

in

,

their

supersalesman

NEW YORK

PORTLAND

HARTFORD

BANGOR

investors.

most

is

It

should

men

to the

first obtain

How to Prevent

a

*

Price

(1) Are you interested primar¬
ily in preservation of capital or

.

•;.v*:/7'/V/

Nose Bleed

Keep you? nose
people's business.

answers

following questions:

growth in principal?

Tribune."

"Herald

if he has none,

are or,

something about his financial po¬
sition^ dependents, etc., before he
offers an Individual fund. Sales¬

out

Structure77>•.;

i

<J,H-

;

^

*

Vance, Sanders' Edward E. Hale

writes in "Brevits" in part as
lows:/

•

"The recent decline in
(2) Is income of primary im¬
farm
portance to you?
v
commodity prices

Manhattan

other

of

TWIN CITY BOND TRADERS

fqiy

certain, party

on

you

willing to

risk to obtain

an

LUMINARY'' OF THE
Harold

a

av¬

y

\

'

WEEK ;

;

~

B.

Smith, New

■

:

said to pressage

.assume

above

;

March 18 at the Nicollet Hotel in Minneapolis.

can1'; be

the possibility of
general decline in other commodifies, including industrial raw
erage return of 6 % or better?
materials. In the long run, how¬
A popular solution to the
prob¬
ever, a development of this kind
lems of many, investors in recent
can only lead to better and* more
(3) Are

some

ASSOCIATION.-7;yyv-.•

The Twin City Bond Traders Association will hold their spring

7"

York

'7-

City resident

•

manager

'

Bond Fund
INC.

fund,

has

been

whose

posed

of

the

balanced

portfolios

are

com¬

bonds,

preferreds and
common stocks, with the
various
issues
ranging in quality from

semi-speculative to highest grade.

try

Such funds

ing

trust

Common

are

in effect continu¬

funds
Trust

similar

Funds

the

to

which

are

available
,

HUGHW. LONG & CO.
.NCOfiPORAUO

48 WAtl
ioi

STREET,

NEW YORK 5, N Y.

anot\v.

through some
banks.
They are the type, of investment
media
in which a person with
limited capital might well invest
his entire savings.. ;
* ' v
"New Deal" Liberalism

Chicago

Under

the

what

you

pretense

you

want,

of giving
they take

what you already have.—
Douglas'Laird,

away

"It

seems

that

our

fear of

eco¬

nomic

cycles may well be called
hereafter by the quite appropri¬
ate term of 'cyclophobia.' Such is

eystone f

the term coined for it in his latest

ustodian

a

neurotic fear of fluctuations

sulting from the violent
in

Particijsation in

INVESTMENT FUNDS

condition^.

our

1914,

economic

it is clear,

re¬

y y

ing committee of the National Security Traders
is, of course, not worth 'ar¬
Association and does a sterling job each year of
guing the point that some, per¬
haps many,
businesses will be
swelling the Association's treasury, promoting adadversely affected by such a de¬
velopment; but we cannot fee'
veitising for the Annual Convention.
■ ,7> 7/-:7;7-'
too sorry for the business man or
Mr. Smith will be celebrating his birthday
entrepreneur who may perhaps
have foreseen this possibility b lit
Cv,7 7 7: -.v-7 next Tuesday, March 9. I7'7^y.;;.77.:has gone
Harold B. Smith
blithely on his way
\ut-.;77,'':7.i7,7': -'[
7'77;'-A
;77
77^77-'--'J '■■■; 7
without taking some steps to pro¬
tect himself .against a loss in in¬
ventory values. The general facts,
however, point to the conclusion:
7
that a large- segment of Araeiican
business is prepared ^and ' wouid ,1:! PORTLAND, ORE.—The Investment Bond Club of Portland held
welcome a stabilization of prices^ their annual election of officers and a Board of Governors Feb. 24,
at considerably lower
levels^': With the following results: President, George A.' McFaul, Partner,
.

Investment Bond Club of Portland Elects

"Have

stocks., dis¬
possible effects, of a
deflationary "trend which may de¬
velop from this point on? While
we do not profess to know the ■ahr
swer
to this question, we thipk.
that the following comments re¬
cently made by Mr. Edsori B.
Smith, Financial Editor of the
Boston "Herald," are rather, pery
common

the

.

"

changes

'We

do

not

see

;
the

v

slightest

reason why lower prices for farm
since
products should be regarded as
Mr, Byfield, bearish on stocks because the de¬

fortunes

says

that for; many years

this; country flation cannot get out of hand so
long as the government support
program is operative.
The stock
economic psychosis or fear commarket did not go up with wheat

has been suffering frpm a type of

Investing their capital '
IN

and

BONDS
(Series B1-B2-B3-B4)

The jo¬

vial Mr. Smith is the Chairman of the advertis¬

"It

market letter by Robert S. Byfield, member of the New York
Stock Exchange. He defines it as
tinent at this time.

Xunos

;

economic

stable

counted

Cyclophobia

Certificates of

Collin, Norton & Co., 120 Broadway.

.

months

Prospectus from your Investment Deoler or

of

for the New York Stock Exchange firm

"

One cannot fall out of

corn.

bed if
floor

one

all

has been lyirig on the
while.
It does hot

the

PREFERRED STOCKS
(Series KL-K2)

AMERICAN

COMMON STOCKS
(Series S1-S2-S3-S4)

<£►

Prospectus from
your local

TLe

investment dealer or

mm

Prospectus

of Boston
Boston 9, Massachusetts




'

CHICAGO 3, ILLINOIS

•

-.

.••

-

•

With Dalton & Co.

or

selected investments company
135 South U Sale Strut

FUND

Sa|es

Manager, Conrad, Bruce & Co. Other members of the Board of Gov¬
ernors. elected were: Ray K. Daugherty, President, Daugherty, COle
& Co. arid Charles N. Tripp, Senior Partner," Charles N; Tripp & Co.
y: a: Lawrence: W. Shiels, partner, Camp & Co.. was the retiring Pres¬
ident? 77'
; *
*
;■ ■ 7
:; -'' •• ' -•' -1
''

DIAL INVEUMEWT* FUND

May be obtained

from authorized dealers,

Congress Street

McFaul; Vice-President, L. Brooks Ragen, Resident Partner,

Foster.& Marshall; Secretary and Treasurer, Elbert H. Greene,

^^esfob/Zsfied 1928 J

Keystone Company
50

Hess. &

WELLINGTON

Timberlafee & Co, Adds

r"

prospectus from
your

(Spebial td The Financial CkaoNiCLEJ
,

(Snecial to-Th* ,'FHirANftXAt.i CHRONBh.E) ''

,

investment dealer
or

PHILADELPHIA: 2, PA.

/

^MILWAUKEE, WIS/—John D.

Naber

has

Gardner. F.
735

joined

the

Dalton

&

staff1 of
Company,

Northrfeferi'Street."'.*-'

PORTLAND, MAINE

—

Hairy

Weeks has been added to The staff

of 'Timberlake

MidciiCstreet.

&

Company,

191"

/

>

Volume 167

Number 4678

THE COMMERCIAL

&. FINANCIAL

How Britain Fights inflation
By

PAUL

well

limited

are

transfer

ate

of

employers'

to

labor

cooperation

retraining from increasing

in

output
of anti-inflation policy.

success

LONDON, ENGLAND—At last the

Government

has

of

r

.self-help and until

taken

its

thorough, careful, and further study be made of effective use of our aid
on U. S.
economy.
Advocates no commitments beyond one year.

a

v

been

Boiled1?

sources.

proceeding
Britain
pace

ment

in

at

a

compar¬
to
the

able

non-stop

Italy,

'

in

The riens

to

the

extreme

Britain, and

any

paralyzed

since
the end of the

initiative

by

the

country,

is

now

con¬

by

and

that

a

,

Labor

government

Einzif

government
is largely

been

competing with each other
in putting forward demands for
higher pay. And. even though the

officials of many unions are aware
of the broader
implications of ris¬

ing wages, they

not in

are

posi¬

a

tion ; to

that sacrifices

ers

both

mom

formula.

such " circumstances
f

it

took

courage for the .'govern¬

ment to decide in favo'r of

pol¬

a

icy aiming at checking

a further
increase of wages. Even its critics
must admit that the new
policy

announced

ter

few

a

by

the

weeks

Prime

ago

Minis¬

was

bold

a

.venture, since it was bound to an¬
tagonize the industrial workmen
whose support

on

profits of their

more

.

effective, the government

control.
n

To

make

been

checked.

For

prices
in spite.of the

.have been rising
deflationary effect of the bud¬
getary surplus which is expected
to amount to

something like four
billion
dollars during the fiscal
year 1947^48; in spite of the
sharp
reduction

of

the

note

circulation

during recent months; and in spite
of

the

enforced, reversal

Treasury's
It

is

cheap

evident

of

policy.

money

that

all

the

these

fac¬

tors
in

This

are of secondary
importance
comparison with the factor of

an¬

that

aid. to raise

V- Some

critics of the government

the

nv

production,

trolled1"

There

goods

a

situation in Britain must be

that,

preferable

methods
were

as

such

would': have

impracticable.

aware

drastic

been; "they

The result of

such intervention would have
been an epidemic of strikes which
any

Britain could ill afford at present.
A -■ few
weeks'
stoppage in- the
coalfields
inflict
age
tern.

would; be sufficient to

the' gravest

on

possible

the British.economic

The government-had

sort to

dam-

a

to

sysre-

device by which the rise

6t wages could be stopped-without

dangerously

^antagonizing

workers. One of the

gested
with
new

was

tTe

that,

the

solutions:sug-

simultaneously

announeenient

policy by which the




of-

the

govern-

program.
warrant

demands

The

does

situation

emotional

It

haste.

hard-headed

calm,

ex¬

reasons

is

nothing to prevent
in

such

industrial,

-atf/the-

peace

satisfying all wage .claims,
passing the higher cost", pa

the defenseless
trolled
in

And

consumer.

kept down * in the

production

?oods» and

are

of

will'; become

This would
rot be

L
J.';.*
.investments

than

goods..

be bv

but
be

the

even

they

of

are

a

'■

•

'

Bonds

Stocks,

Cost

at

Bareco Oil Company,

or

*

''

now

y.,v'

Ccmpany

is

too

Adjusted Values:

Common Stock

Fixed

they;

express

unable to put forward

T

?

I

$

,:

214,728.05

Company
Wholly

Not

workmen,
date

have

couraging.

the

—/v——— -

and

_$

—

24,000.00

-

been

very

Gas

Developed

Leaseholds,

and

an

of

will

controls.

$17,206,953.04

Deductions—_—.—---

79,234.54-

,——

$17,127,718.50

Other Deductions

-—J—.

Purchases

$1,389,382.14

Geophysical

and

Research Expense

■

,

1,978,217.63

~—-

2,411,533.15

Intangible Development Costs

,,

.

U

Profit

550.27

Applicable to Minority—

5,779,683.1^
Federal

Before

Profit

Income

/;'■

$11,348,035.31

116.057.17
2,229,004.52

Provision for Federal Income Tax
'

•

,r

»

----------——1$41,066,492.05

Total Assets

Net Profit Accrued

to

Current

Liabilities:

-

Accounts Payable
Accrued

.

1

Accrued

v

;.■ '

Capital

Stock

$3,446,125.85

Dividends Paid-.

Portion

Paid

Dividends

of

Sub¬

to

Company

sidiary
Liabilities-.—

14,619,400.32

Year

$23,738,431.11;
Less:

Expenses_4__^i—119,625/26
Taxes;-State and Federal-_,________j„_
2,310,686.45

Tctal Current

9,119,030.79

,

Surplus at Beginning of

"I
3,016,138.03

—

V"

$

Company—I—
1

Earned

LIABILITIES, CAPITAL STOCK AND SURPLUS

6,784.16

,

—$ 5,446,449.79.

3,439,341.69

j

and

Earned

Surplus of Subsidiary Company^,

Not Wholly Owned by Barnsdall Oil Company:■>

^-Capital-. Stock.—
Surplus

—,—-——

$20,299,089.42

.

1

Held/in-Treasury Dec. 31,
v/.Held in- Treasury Dec, 31,

——

1947-—

1946-—

*

Outstanding

Dec. 31,

Outstanding Dec.

31,

!

4,000,000 sh.

——

——-

1947—;
1946

Surplus, December 31,

Add:

Capital Stock (Par Value $5.00 per Share) t
—

Capital Surplus

1

.

49,899.00

Capital

Rsued

31,

"

$•

Authorized

December

Since

Surplus

—$
32,485.00
___v-—•—17,414.00

-

*

•

.;
I.

previously

of -Assets

Realization

$3,047,241.45

1946

charged to Capital Surplus—,—

2,258,770 sh.

$151,418.47

Realization from 3ale of Bareco Oil

35,472 sh.
35,472 sh.
2,223,307 sh.
2,223,307 sh.

en¬

resort'to

higher taxation of profits
the

41,840.35

655,983.62

—

957,571.25

Company Stock..
...

$11,116,535.00
.

.

'

l,

1

~

~~

'

i
1,108,989:72

$

4,156,231.17

^

Otherwise it is certain that

of

Before

Lease

Unde-

Charges to Operations:

Prepaid Expenses, Advances, etc..

Surplus:

or

to

an

existing system

Deduct:

:

a gesture show.V Capital
ing their willingness to do, their .'-Earned
best in so far as it depends on

extension

7,924,083.43

an-

they should make

government

•

————$16,509,129.0^

Capital Assets

Depreciation

J

Net

re¬

ests of the British employers that

them.

Sale

on

Profit Before

1.00.

though; symptoms T
not

■

Other Deductions:

But it is to the inter-

o—o-

■-.

Profit———

$23,417,010.39

Deferred

a prac¬

part

.

1,314,928.61

_________

Interest

Stock Held, by Subsidiary
Ownfed,
(4,800 Shares)

and Equipment, at Cost———_—
-$49,228,937.83
Reserve for Depreciation
—_________
25,811,927.94

a

Quite possibly
reasonably satis¬

response ' on

1

697,823.97
Income

$23,417,009.39
Oil

ticable alternative.

factory

''
,

214,728.05

Assets:

Plant,
Less:

;

opinion how far the experiment
is likely to succeed." But it-was
an
experiment decidedly : worth
making.
Those who criticize it

there may be a

'

>.'•'/ 1

—

cram¬

the part

on

If

to

;•'

$ 6,609,154.82

General

Operating

Profit

tex¬

with

..

$24,433,212.50

Dividends and Interest---——.—;T$

•„

.

——

_

at. Par

increasing their out¬

early

31, 1047

Ex-

r-^.....

!

of

■'

en¬

prices, the government's

It

Si'*?

V*

%

,V'

Deduct:

Oil

Bainedall

unessential

response

employers.

■-)/

..

Non-Operating Income:
'*

''.

.,

and- Mortgages

-T/Otfter Investments

/

full

•

if.

The only way of prevent¬
without extending the

the

■

■

shop win¬

more

expensive

frained from

of

in

Companies,

con¬

or

December

■

'

this

of

the

Taxes,

'V;
\

\

'

that there would

mean

workers,

variety

to

-

WOther

accentuated.

enough coal miners

dows would

the

pense

Ended

1

-

/

.:

.

'

1

■

and. General

Operating

Costs,

Assets————i—-—..——$17,294,695.94

Current

Total

■*?yf,'1..*?

essential

industries,'

of Income and Earned

'

Income—_—1—L-*.

Operating

Operating, Charges:

——

Net

trend of the transfer of labor from
essential to
unessential
produc¬

are

Receivable

the Year

For

Gross

—-

gaged mostly in the production of
l essen ial
goods,
then V the

med;

-T,.:'
'

„•

998,369.43
1,269,000.00
4,406,001.11
Inventories of Crude Oil, at Market—ui:—_-t1,044,224.30"
Inventories of Oil Products, at Market
273,987.14
Inventories of Supplies, etc., at lesser of Cost or
Market
.wW~————---770,353,42
Accounts

less

tile

;>/.

'

_

allowed to rise in

uncontrolled

tion

;

'

:T-' v;JI

'

■■

■

industries, engaged mostly

the

the

'

U.

em¬

industries-; from

*

•

8,532,260.54

ost of

ac¬

quainted with the-realities of the

aid

not

being

that is

country into afi

de¬

Consolidated Statement

concerned.

are

ti-inflat:onary policy would sue-;
ceiling to ceed. Otherwise it will fail/; ■

But those

this

Companies

Subsidiary

P..S.-Government Securities( at Cost_—4
S. Treasury Tax Notes, at Cost

i

"Uncon¬

of

fC'" "T

Current?Assets:

The-situation, is less
satisfactory
as
far as the industries
engaged

and

ought to have fixed

assets

:-V'

IV

upward

wages by legislation.

language

rush

Surplus

•

put of unessential goods, and did
their best to- keep down wages

too

justify the extreme and

poor

•"'

prices, accordingly.

argue that the effort to check the

trend of wages has been
timid; that the government

very

Consolidated Balance Sheet—December 31, 1947

%

.

existing degree of controls would

the home consumer, which tends
to drive up the
prices of uncon¬
trolled goods.

not

amination and deliberation, and
condition and
the time needed for this can be
they have usually recovered.
If
(Continued on page 26)
European peoples had nothing-left
except
natural
resources,
their
'''Statement
by Mr. Weir before
bare hands, and the spirit to work
they would rebuild. That is a law the Foreign Relations Committee
of
the
House
of Representatives,
of
life.
Obviously, the nations
of Europe
will recover quicker Washington, D. C., Feb. 25, 1948.

in

and

pwn profits. It would' not longer
be possible to grant the demands

expanding

of

to

various

not

BARNSDALL OIL COMPANY

by reducing their

ing

power

The
is

for

is

should

rising wages which mean not only
higher costs of production but also
purchasing

theme
tremen¬

have

tions

under official

are

means

this is possible

wages are

trend; -of " prices.ieould^ possibly

have

States

a

does

being

as

here

appeal

put iorward wage
the
employers -would
pnly be able to meet it in so far as

and

means,

is

nation

been

demands,

popularity

'For

the

workmen

buying

other

when

United

meant

scribed

of the industries concerned

any

The
government ijully reali^ed the-un¬
Cappeared.:. fe;be: ho

is

point

price

existence, h

there

used to

campaign

nounced that in future it
may not
authorize the increase of the

ployers

.

frankly that I do not know what
in danger of
"collapse."
Nations
just
don't
collapse. Throughout history, na¬

a

My

should deny aid to Europe

we

but that the fundamental situation,

my

own

will.

the^overnment

depends, .for. its

that

that

re¬
use

prices,

»nd to reduce

Tee

the

mean

of

In

hardship if they
outside aid and

proper

wisely.

unless

campaign.

propaganda

purpose

plan of foreign aid.

they receive
large- scale
help which
can
be
given
only
by
the

of

basis

the

it

hes called' upon em¬
ployers to check the rise of

'.•ddmine'Hheir

■

dous

ceive

emotional

of

communism.

Weir

of
particular

acceptance

and

verge

This

demanded

are

T.

been

quick

and

It

Of. goods which

authority by *encouragTOgjnrnofficia 1 strikes^TTT

Ernest

has

into

Administration's

1—

with less

American

opinion, this basis for
European aid is entirely invalid.
In the first place, I must confess

on

they will rush
into

sides, the government
upon
an
ingenious

struck

nas

of

s

headlong

refuse to endorse these
demands, because they are afraid
.that the Communists might un-

In

(amounting

of the country's to¬

In order to avoid this and at
the same time to ^atisiy the work¬

controlled by the labor unions, the
workmen in various trades have

no

non-na-

pend.
Paul

Dr.

e

that

in.

tal industrial production; sail de¬

that' the

trolled

industries

about 80'%

to

the

individual

the.

i

collapse

further taxation

which

on.

tioealized

Encour¬

fact

have

limit

people
the

coun-

the

pressure

terpretation is

Europe are

aheady

are

;

high

that the
't'r

achieving popularity by

would

progress

:

of

means.

taxed

has

making

aged

down, this in¬

temp¬

tation

unmistakable

war.

wage

increases, the imposition of heavy
taxes on employers and cap.talists should be announced.
It

such

never¬

been

discouraging

is to the credit of the government
that it did not yield to the

or

theless, it

at

i.ew

in¬

flation
France

aims

well;

as

its effects

as

Because of the government's elaborate
publicity system there is no doubt that the in¬
terpretation of the European situation which has received the greatest attention from the
American people is the one given by the State
Department and other Administration.

anti-inflationary

though the vicious spiral, in which wages, costs and
chasing each other interminably in an upward direction,

are

not

•'

-

•

Even

prices
has

Asserting neither fear of economic collapse nor of communist domination are valid basis for Marshall
Plan, Mr. Weir advocates furnishing only urgent relief for human suffering by proven agencies and the
withholding of reconstruction aid until European nations make efforts toward greater production and

essential industries and this may accentu¬
unessential production- Sees need of

courage in both hands, and has embarked on a bold

policy.

Chairman, National Steel Corporation, Pittsburgh

to

non-essentials for

\

15

By ERNEST T. WEIR*

in

freezing wages as
prices despite workers' antagonism, Dr. Einzig points out

as

(1007)

Shortcomings of ERP

EINZIG

Stressing Labor Government's uboid venture"
controls

CHRONICLE

Surplus—

—

SuriJlus,.since Dec.

31,

1940'

Barnsdall
excess

$24,453,608.26

Capital Stock and Surplus_$41,006,492.05

stock

Capital

Oil

Company

portion

of

cost over par to a subsidiary

company

Tt;"';
Total Liabilities,

—•-& 4,154,518.84
20,299,089.42

not wholly owned of its

purchased

Surplus,

December 34, 1947--

1,712,33
$4,154,518.84

16

of U. S. imports

now

Military warfare is
by power politics
backed by economic force which
replaced

now

have

must

the

rapid

of

quality

Since the end of hostilities it is

fortunate that by grace of the fi¬
nancial
assistance
accorded
by

country

the
economies of Britain, the Euro¬
pean democracies and China have
and

bolstered

been

Canada,

chaotic
collapse. Unfortunately, however,
the Bretton Woods schemes, which
failed to envisage the actual con¬
ditions of the transition period,
have proved to be entirely inade¬
quate. It is now only too evident
it

that

the

is

too

against

late

to

reconstruct

the World Bank in

Fund and
to

stark

effectively with

cope

realities

of

the

throughout

its

the

constitutes
called

present

a

cold

ramifications

civilized

world

vital front in the

Even the

war.

so-

ques¬

of

competitive costs in the
struggle for world markets loses
much of its

importance when the

basic problem of British economic

stability is
words
oound

a

Park

Hyde

with

considered.
In other
forced devaluation of the
the

and

concomitant

recognized

a

dis¬

ate

in

comparative¬

late

that

we

the two econ¬

were

omies

Canadian

as

dollar

of

the

world.

democratic

the

implementation

the

addition

no

tion

of

with the world of about $460

the

lions.

bonds in

internal

for

larger.

States has
to

son

of

conspicuous by their ab¬
sence.
The external section was
also
inactive
and
prices
were
were

a

in

States
and

services.

the

United

grettably

the

only bright feature.

at last on the

up-grade.

But

that
be

all this is,
constantly
remember
relationships must never

our

debt

Weinberg Co.

I.

James

formerly

Brennan,

Hoit, Rose & Co., has joined

for

other
them

cite

much

that

Canada

is

have

this

to

increased

its

The

comment.
had

extended

ex¬

fact
very

relatively little attention.
inevitable

the

effects

of

delayed recovery of Western
on the Canadian economy
foreseen

not

and

even

in

yet

was

the

the

United

action

instead

that

so

of
the

This

Canadian

the very

I.

James

action

came

at

time that announcements

being made to the effect
that after nearly a year of discus¬
sion the Geneva conference had

Brennan

reached

a

preliminary understand¬

Trading Department of S.
Weinberg & Co., 60 Wall Street,
New York City. Prior to his as¬

question
that the timing of the Canadian
action was unhappy and yet the

sociation

hard facts made it inevitable.

the

with

Hoit, Rose & Co.,
was with J. F. Reilly

ing.

There

can

to

The

Morrison

Building.

He

&

was

Southeastern

Co., Congress
formerly with

Securities

Corp.,

MUNICIPAL

Frank D. Newman & Co., Strauss

Inc.,

and

Blair

F.

Clay-

baugh & Co.

Joins John A. Dawson Staff
(o

(Special

CANADIAN STOCKS

The

CHICAGO,
Lindgren
with
North

has

John
La

A.

&

Co.,

and

associated

Dawson

&

Street.

Webber,
E.

H.

W.

David

—

become

Salle

formerly with

Chronicle)

Financial

ILL.

Co.,

He

1

was

Simpson

Rollins

&

Sons, Inc.
TWO WALL STREET

Now

Jeffrey Gray & Co.

BOSTON,
name

MASS.

of C. S. Jeffrey

—

The

lions.

We

the

to

with

transactions

rent

tries showed
tune

all

coun¬

surplus of $70 mil¬

a

granted credits again
of $560 millions and

away $40 millions in relief
appropriations. Consequently we
had a cash deficiency on our cur¬

rent transactions with other coun¬

tries which caused

be

net drain of

a

Th's

was

drain

total

a

of

ness

frey Gray & Co.

D.

Paper

by

Mr.

Editors,

Gordon,

at

C., Feb. 27, 1948.

Washington,

both

during

the

There
of

forms

were

assistance,

imme¬

and

war

diately following the war, which
added

respectable

the

total

of

roundly $1,600,000,000 to the fig¬
ures
just mentioned. (I should
also interject that Canada did not
accept a single dollar of United
States Lend-Lease assistance, but
financed its entire

contributions

its

its

effort and

war

others out of

to

These

resources.)

own

fig-,

which are of startling mag¬

ures,

nitude for

a country of 12%
mil¬
people, demonstrate that our
postwar approach in regard to the
recovery
programs
for Western
Europe is in the same spirit, and

lion

both

that

desires and

our

terests coincide
If

our

in¬

this respect.

in

Canadian

the

matched

figures

were

United States
postwar credits, these would have
totaled some $32 billions on the
the

by

basis of relative national incomes.

Moreover, in addition to postwar
credits Canada has been, and is

under
contract
to
the
Kingdom at prices well
the inflated levels which

below

$743

With the best will in the world,

,

Canada's Part in World

Recovery

In

the kind of figures

terms of

accustomed to think in,
Canadian figures may not

are

you

these

sound very

its

lation

to

which

Canada

its

in

to

our

reserves.

resources

has

European

the

Recovery

Pro¬

In

far exceed that of any coun¬
including the United States.
light of claims which are
being made on the United States

has
was

it must surely be of

and

the

all sides,

taxpayers and citi¬

could argue
that Canada attempted too much,
Indeed

one

all acts

statesmanship—

of

constructive

the

policy of Lend-Lease—Canada

had

already been financing British

fact,

come

try,

on

<

Canadian Trade

risks

already taken

gram
In

surplus of exports over im¬

ports, and had resulted in a large
and rapid drain on our exchange

impressive, but in re¬

that its neighbor, Canada, is
playing its full part in world re¬

the National Conference of Busi¬

Street, has been changed to Jef¬

other

during 1947 and left our however, it became evident toward
exchange reserves, as I earlier the end of 1947 that we simply
mentioned, at a figure somewhat could not stand the pace.
Our
in excess of $500 millions..
assistance
to- overseas
countries
had become too large in relation

approved that greatest of
*Remarks

also

millions

zens

Canada had

course,

subscription to the International have recently prevailed in world
Monetary Fund, and $139 millions markets, particularly in foodstuffs,
of redemptions of Canadian debt and this has materially added to
and other capital payments abroad. the assistance already given.

covery.

of 1945

allies.

fighting

our

United

foreign

due

In

followed by the Canadian

equivalent of Lend-Lease, under
which by Mutual Aid Acts a total
of $2,200,000,000 was provided to

selling

our

food.

and

was

ex¬

in

reserves,

added

this

to which must
$74 million capital

millions

$530

change

a

exchange reserves total¬ but in a world
suffering so much
ing about $1,500 million—that is, from the curse of too late and too
in gold ani U. S. dollars.
That little I wonder if
anyone is justi¬
was
regarded
as
a
substantial
fied in thus criticizing the Cana¬
sum.
By Dec. 31, 1946 our re¬
dian action.
serves were SI,245 million and by
Furthermore, we do not suggest
Dec. 31,
1947 thev had dropped
that Canadian action was dictated
to
just over $500 millions.
At
that rate of decline, it was ob¬ solely by altruism. As one of the
trading
nations of the
vious that in a matter of months largest
Canada's exchange resources world, Canadian prosperity in the
would have been exhausted and long run is heavily dependent on
its export trade, and our invest¬
we
would have been unable to
ment in the rehabilitation of our
pay
for our essential
needs of
best customers is a policy of hardsuch things as coal, oil, cotton,
headed realism. Indeed, we took
steel and so forth.
the same view in regard to our
Our trouble was as simple as
wartime contributions to Britain,
its
cure
is complex.
We were
namely, that our long-run inter¬
paying cash for our imports and ests were so
vitally engaged in
three-quarters of these imports
enabling the fight for freedom to
were
coming
from the United
be won that any attempt to esti¬
States.
On
the other side, we
mate
the value of that service
were
sending less than half of
to humanity was out of the ques¬
our
exports to the United States
tion.
So it was that well before
and the other half we were sendthe United States Congress had

firm

Co., 79 Milk

suffered an actual re¬
In
that our cur¬

we

1947 the picture was

interest to its

foreign

Chronicle)

Financial

MIAMI, FLA. — William H.
Bryant has become affiliated with

Bros.,

no

Canada's Foreign Exchange

At the end

B.

be

Reserves

Bryant With Morrison

by

forced to take

were

sill

reserves

our

duction of about $260 millions.

not

understood, and in some
quarters is criticized and resented.

A.




emphasis

which Canada

(Special

NY-1-1 045

Canada

comparatively recently

States

CANADIAN BONDS

RECTOR 2-7231

in

imports
fi;om the United States over tjie
oast few years was a matter of
general knowledge but did not

& Co.

N. Y.

a

in¬

culti¬

to

Europe

Mr. Brennan

NEW YORK S,

owe

keep

The fact that Canada had

Finally,

dependent U. S.-United Kingdom
exchange stabilization fund de¬

INCORPORATED

Aid,

gave

events

special

tracted

ttoe resources of the International
Fund by the institution of an in¬

A. E. AMES & CO.

We

to
and

large postwar credits likewise at¬

of this mentality
logical to supplement

CORPORATION

granted.

each

them.

until

spirit

PROVINCIAL

as

about

to

formed

given
point.

exigencies.

GOVERNMENT

Mutual

tioned,

satisfactory

taken

vate

•

James I. Brennan Is

with

the

must

we

Recent

With S.

of

countries

other

all

world combined.

Interlisted is¬

especially firm and the
upward movement was spurred
by investment demand from New
York. Switching from industrials
to golds further indicated that the
Canadian gold-mining industry is
were

sues

re¬

signed to remove any fears con¬
cerning the vulnerability of the

larger

a

$600 millions surplus, I have men¬

necessary to resort to
in accordance with

it would be

$110 millions through UNRRA and

has

increasing

measures more

wartime

other side,

the

have

were

now

On
States

capital investment in Canada than

In a dull list
gold issues were the

remaining

it is

commodities

by the total of
namely, $600 millions
cred¬
its to the United Kingdom
and
other countries totaling $750 mil¬
lions, we gave exports totaling
reserves

But instead of that, we gave

of stocks the

organization

democratic systems

of

basis

cash

a

on

our

these items,

Gordon

Donald

terms

been

had

If

would have increased our ex¬

change

and

and cer¬

currency

transactions.

other

mostly unchanged.

living
Consequently in

the

we

competent
ally, Still further, Canada is the
largest customer of the United

the

In

trade

is

addition, there was a net
capital of about $100
and
about $40 millions

convertible

times

emergency

powerful

of
this

in

tain

Canada

market but at the new level sell¬

rea¬

mil¬

of

millions

know

in

In

inflow

United

order to defeat the present efforts
which have as their intent the dis¬

of

balance in its current transactions

Moreover,
the

that

marking-down

a

In 1946 Canada had a favorable

being

and in
ouiright
gift of a billion dollars to Britain
lor the purchase of vital war ma¬
purchases
in
Canada,
March, 1942, made an

terials

on.

the satellite of

side of the border.

in

the

which

credits

dollar

being drawn

were

ques¬

smaller

Park
arrangemen'
during the war, result
in greater Canadian production of
basic requirements for industria'
and
stock-pile purposes on this

ers

arises

as

flected

there

of

Hyde

would,

of

In

not

are

other countries without
full cash payment, but
instead granting substantial

to
getting

ing

the course of the Cana¬
and
would permit
Canada
to
play a more force¬
ful
part
in
the
reconstruction
tainty

dian

worthy endeavors to return to
state of normalcy that it must
be
realized
before
it
is

in normal times.

<£-

and

sterling would remove the uncer¬

now

too

sizes

enormously

What still remains

a

strengths

racy.

ly orderly in a disorganized world
must be preserved at all costs. So
much has already been sacrificed

example in

an

disproportion-

ing

a

It is

cannot be overstated.

ruption of the vast sterling trad¬
area would represent a major
victory for the enemies of democ¬

unique relationship between the United States and Can¬
world of conflicting ideologies, jealousies, and hates which
It is all the more impressive when it is realized that despite the

Much has been said about the
ada.

agreement
conjunction
stability
of

level for Dominion bonds was re¬

example the battle for the
survival of the pound as an inter¬
national currency and the main-

tion

wartime

trices

all

re¬

or¬

For

of

would

sult from the active revival of the

the

crisis.

enance

direction

same

During the week the lowering
of the Bank of Canada support

machinery of the International

der

the

with Canada. This in

mobility.

this

Another constructive step

pound.
in

increased Canadian im¬

from U. S. for which cash is paid, while Canada's exports are made on credit. Stresses Canada's
part in aiding world recovery, and sees as remedy an equalizing of dollar volume of exports and im¬
ports in U. S.-Canadian trade.

the survival of the dem-

ocratic world.

which has led to restriction

Points out difficulty arises from

and other exchange controls.

ports

The main issue is now brutally apparent,
dictate a single-minded policy devised

increasingly dim.

of Canada

Deputy Governor, Bank

developments in Canada's foreign exchange situation

Mr. Gordon reyiews

Against the grim backdrop of recent international events the
prospects for a desirable and early return to economic orthodoxy
appear

GORDON*

By DONALD

By WILLIAM J. McKAY

and present circumstances

and the Remedies

Canada's Exchange Disorders

Canadian Securities

to- ensure

Thursday, March 4, 1948

CHRONICLE

FINANCIAL

&

THE COMMERCIAL

(1008)

our

serious

so

been

and

had be¬
action

our

long delayed that it
for us to move on
Consequently, in No¬

so

necessary

fronts.

all

Restrictions

situation

vember

imposed prohibitions

we

quota restrictions upon a wide
list of consumer goods and also
undertook a close supervision of

capital

of

imports

goods

which

dollars. Concurrently,
the freedom of Canadians to travel
in the United States was restricted
cost us U. S.

that

in

a

maximum of only $150

is available

per annum per person

pleasure travel in the United
States.
We were also obliged to

for

credit which

reduce the amount of
we

other
pleasant

would make available to

countries.

It

was

not

a

and in the
operation it
fully as dif¬
ficult as it was expected to be.
The Canadian and U. S. A. econ¬
omies are so interlocked in * habit

program bv any means,

few

months

of

its

has been found to be

and

and

preference, in business, social
travel intercourse and in the

their people that lit
thing to legislate
people must not purchase
from the United States some of
the things they want to buy, and
which they consider do no more
than maintain a somewhat similar

ideology
is

not

that

an

of

easy

our

standard of living.
It

should

these

not be

restrictions

that
brought
living be¬

assumed
were

about because we were

yond our means, as a

country. On

(Continued on page 36)

-

Volume 167

Number 4678

THE COMMERCIAL

Treasury head says taxes must be geared to government's basic
financial policy of large revenues for essential domestic, requirements, debt reduction and foreign commitments.
Argues House
results in excessive reductions

will

and

cause

Federal

Secretary of the Treasury, John W. Snyder, on March 1 strongly
opposed the measure.
In this connection, the Secretary stated:—1
"Under cur-^

necessitating

is essential to

maintain

the

level

present

have

occurred

transmission

of

the

since

the

President's

receipts.

This, however,

those in the field of international

does not pre¬

affairs,
or
otherwise — warrant
changing the President's estimates
of either receipts or expenditures
to show a more favorable budget
picture. No one can say with cer¬
tainty what any future level of
income will be.
With relatively
full
employment and with our
present production facilities run¬
ning at virtual capacity, it would
not seem prudent to predicate es¬
timates of receipts on a level of
personal income higher than the
$200 billion level of personal in¬
come
utilized in preparing the

govern¬

ment

clude some re¬

adjustment in
distribu¬

the

tion of the tax

the

On

load.

contrary,
the
persistence of
high
prices

W. Snyder

which

an increase in the
(Exhibit 1, page 17.)
the
developments

Budget Message—either those in
the field of domestic prices or

of

: Johin

of

"None

makes

some

During

readjustment imperative.

the second half of 1947 wholesale

prices rose at an annual rate of

13%.

21% and consumers' prices,

whole¬

By the first of this year,

.

sale

estimates contained in the Presi¬

ers'

dent's Budget

prices were 45% and consum¬
prices 25% higher than in
June, 1946. (Exhibit 2, page 18;
Chart 1.)
"Although the Nation is oper¬
ating at peak levels and the coun¬
try is enjoying higher standards
of living than ever before, some
groups in the population are suf¬
fering real hardship. These in¬
clude not only families with rela¬
tively small fixed incomes, but
also others whose incomes have
kept pace with the increase
living. The problem,

not

in the cost of

of course, is most serious for those
in the lower income groups who
have

savings

appreciable

no

to

fall back on as a cushion against

high prices.
"Estimates of what people spend

,

in relation to their incomes

graph¬

ically illustrate the hardship suf¬
by low-income groups. It
has been estimated that in 1946

fered

about

a

third of the families

incomes
than

with

below $3,000 spent mpre

(Exhibit

income.

their

3,

19.)
They financed con¬
sumption by dissipating accumu¬
lated savings and by going into
debt
Under present conditions,
the taxes paid by the lowest in¬
come groups reduce the already
inadequate incomes available for
minimum living standards.
Tax
reduction alone cannot provide
page

adequate relief to this group. But
the right kind of tax adjustment
can
make some contribution to
the relief of the plight of low-

people. Sinee fiscal and
economic considerations preclude
income

reduction

any

in

overall

the

strength of our tax system, relief
to this group;

should be provided

by appropriate increases
taxes."""-'

in other

year

$6.2

billion in

a

of operation, or by almost

(Exhibits 11 and*12,
In addition, estate
and gift tax liabilities would be
reduced by $250 million, which is
present law.

40-41.)

30% of the estimated

also about

$820 million
liabilities
,

estate and gift tax

under present law.

"If H.R. 4790 were

surplus of $7.5
in the

enacted, the

billion estimated

President's Budget for the

fiscal year

1948 would be reduced

by $1.1 billion.

In the fiscal year

1949, receipts would be
by

Be Sold Abroad

by

'

own

fiscal year

markets in

Swedish

and

other

foreign .financial, experts

about

a

market

for the Bank's
bonds in those countries. He also
discussed
Swiss

the

1—:

—

——•——

undermines

tion.

The cri¬

lyzes our will.
Yet it is only
through a combination of faith

sis

is

the

of

one

human

and

faith

our

and

the will to live that

para¬

we

can

spirit, because

convert the danger into an oppor¬

it

tunity—-an opportunity to achieve
at last that peace on earth for
which countless generations have
vainly striven.

is

only
n' s spirit
which can

m.a

turn

the

from

race

self-de¬

struction

There has never been

to

able

There has

war.

which

could

an

never

not

viet Union
ans

a

way

understanding, to find
of living peacefully with

fying responsibility. It is more
terrifying for us than for the
Russians because

we are, for the
being, much the stronger and

time

been

also the

more mature.
The Rus¬
sians cannot, and know they can¬

pro g r e ss,

war

which

averted, if reason had prevailed
over greed and envy, if faith had
conquered fear, if man had learn¬
ed to live according to his beliefs.

out much

Nor

sians

can

metamorphose
the

.

terrible
of

and

new

tools

fratricide

into

the

struments

.

James P. Warburg

in¬
of

which

enduring

fraternal

but

dictionary defines crisis

as

turning point at which a deci¬
sive change for better or worse is
likely to take place. But a more
accurate description of the emo¬
a

tional content of the word

the

ultimate
threatens

now

catastrophe
inevitable,

the

greatest danger of its
coming to pass lurks in the wide¬
spread acceptance of its inevit¬
ability.
'
When I say the widespread ac¬
ceptance of war's inevitability I
do not mean only that all too

peace.

The

is

have been

today the custodi¬

an

each other, depeqds the future of,
the human race. This is a terri¬

inevit¬
a

are

of mankind. Upon their ability

to reach

not, successfully attack us and
impose their will upon us by su¬
perior force. But we could, with¬

doubt,. defeat the Rus¬
might, to a certain
extent, be able to impose our will
upon
them.
The half-conscious
and

awareness

of this fact confuses our

thinking and nourishes the illu¬
sion that

of the
to

preventive war is one
possible alternatives open
a

us.

The first

thing

we

have to real¬

be

many

people are convinced that

ize

in which it
is translated into Chinese. There
being no such word in the Chi¬

there

is

ponderant strength—there is no
such alternative, for, in winning
such a war, we should destroy
ourselves. When I say this I am
not thinking only of the horrible
price in blood and treasure which
we
should have to pay for vic¬
tory. I am thinking of what our
position would be in the world

can

way

no

way

to

escape

the

catastrophe. I mean also that an
even greater number of people—
is and
governments— are
today

language, a substitute
compounded of the characters for

doubtful

two other words—the

averted

whether
and

war

can

be

is

that—in spite of

ideographs

for danger and opportunity. That
is
how
the
word
is
written:

are

themselves

*An address by Mr. Warburg at
Congregation Rodeph Sholom, N.
Y. City, Feb. 29, 1948/

our

pre¬

who

of

a

broad road.

*

have

here to talk about blocked

come

the Russians being'able, to take
retaliatory action against our own
The United States and the So¬
(Continued on page 38)
>

ting the one pebble in the middle

subject with

same

representatives

These Debentures

are

not

assets. The bank, however, has no

definite plans to go through with

-

V

.

_

.•

t

*

being offered to the public.
'■

foreign issue.

a

of

Czechoslovakia,

Mr.

$50,000,000

McCIoy

reported that the bank had been

considering
a

vakia

the

feasibility

before

Standard Oil Company

of

to Czechoslo¬

mission

(An Indiana Corporation)

Communists

the

seized power in that country last
week. Further consideration of

mission
now

to

be

that

country

peared conducive

to

23/i% Sinking Fund Debentures

a

would

delayed until the time

ap¬

Dated

February 1, 1948

Due

February 1, 1963

getting the

information it desired, he stated.

through the undersigned has sold $20,000,000 of these
institutional investor. Subject to the terms and con¬
Agreement, the institutional investor has agreed
to buy at any time prior to December 31,1948 an additional $30,000,000
of Debentures, of which the Company has agreed to sell $20,000,000
and has an option to sell all or any part of the remaining $10,000,000.
The Company

Debentures to

an

ditions of the Purchase

With

Wilson, McMaster

(Special to

The

Financial

Chronicle)

CHICAGO, ILL. — Robert B.
Pope is now with Wilson, McMas¬
ter & Co.,
134 South La Salle
Street.

MORGAN STANLEY & CO.

With Herrick, Waddell
(Special to The Financial Chronicle)

J.

INDIANAPOLIS, IND.—Glenn
May is now with Herrick, Wad¬

dell &

Co., Inc., Merchants Bank

deficit of $2.2 billion," Building.




:

<$>

destruc¬

decreased

would convert the estimated sur¬

1949 into a

his

*

and refunds in¬
$400 million.
This

plus of $4.8 billion in

of

tojtal

trying to insure
against the failure of
non-member countries such as
their own efforts to preserve the
"danger - opportunity."
Switzerland and Sweden.
That is peace. These doubting Thomases
what the world faces today—the are in a way more dangerous than and what we should be like as a
At a press conference in Wash¬
greatest danger of extinction in the straight-out pessimists. The people after we had gained vic¬
ington, D. C., on March 2, John the
history of the human race as complete defeatist is an evil influ¬ tory.
J. McCIoy, President of the Bank
well as the greatest
opportunity ence because he tends to produce
for Reconstruction and Develop¬
in * the' long lifer'of man to free, total inaction in the face of, dan¬ War Means Russian Occupation of
ment, stated
Europe
himself once ana for all from thfe ger—which 'Is bad enough/ But
that, in the
The first thing the Red Army
threat of self-destruction.
"
the
doubting Thomas tends to
interest of
would do in the event of war
cause hasty and ill-advised action
broadening
We Are Drifting Toward War
motivated by frantic fear rather would be to occupy all of Europe
the market
At the present moment the dan¬ than by reason—and this is likely arid much of Asia. We might con¬
for the Bank's
ceivably pulverize the Russian
ger tends to obscure the opportu¬ to precipitate disaster. .•$.!
securities,
it
cities and eventually even their
nity. Most of us know or feel in¬
was
possible
Threatened by Qur Otvn Fears
well-dispersed centres of produc¬
stinctively that we are drifting
that efforts
We are not threatened by the tion. But, in order to get at the
towards war—the kind of war
would
be
which will leave the victor indis¬ Russians—nor they by us. We are Red Army or to render it power-,
made for sales
tinguishable from the vanquished. each threatened primarily by our less for want, of supplies, we
outside
the
The sense of impending disaster own
fears.
We
are
together should have to destroy not only
United States,
seems to freeze us in our tracks,
threatened by the hypnotic influ¬ the Russian centres of production
McCIoy said
but
the
cities
of Europe,
ence exerted by our fears, which
as a rabbit is frozen helplessly in
the
that
he
al¬
the presence of a shake. Our anx¬ makes us freeze to the world's transportation network of Europe
ready has
iety beclouds our reason and in¬ steering gear as a frightened no¬ and perhaps even its crops. Let
talked w i th
duces a state of confusion which vice bicycle rider freezes to the us make the unlikely assumption
John J. McCIoy
British,
handlebars and cannot avoid hit¬ that we could do all this without

John J. McCIoy sees

$6.6 billion

creased

Advocates conciliation, but not appeasement.

peace.

long quest for knowledge, the centuries of striving after necessity, comfort and
pleasure, the long chain of human invention piled upon invention have brought ihan at last
to the point where—in his search for the ultimate
security-—he has discovered the means

nese

full sending

30% of the $21.2 billion total in¬
dividual income tax liability under
pages

May

of present threat to

cause

The

gained from the

World Bank Bonds

never

Regarding the loan application

Referring to the House Bill, Mr.
Snyder remarked:—
"The bill would reduce individ¬
ual income tax liabilities by an
estimated

Message. The level
of personal income
in calendai
year 1947 was $197 billion."

v;

■

banker, holding there

expansion is sole

Presenting his views to the Senate Committee on Finance on

public debt.

17

has been an inevitable war, scores both Russian and U. S. attitudes
and policies, and urges a U. S.-Soviet accord through United Nations.
Says both leading world nations
are threatened by their own fears and these are
leading to destruction of their own influence and power.
Lays responsibility for Czech crisis to U. S. refusal to aid Democratic Socialists, and denies Soviet

proposed tax reductions, as embodied in H. R. 4790, already passed,

conditions*' it

(1009)

By JAMES P. WARBURG*

Former

deficit* in 1949.

rent economic I

FINANCIAL. CHRONICLE

Have U.S.-Soviet Accord and Avoid World Crisis!

Snyder Views Tax Redaction
tax bill

&

j

March

1,1948,

18

THE COMMERCIAL

(1010)

FINANCIAL; CHRONICLE

&

Explains Position

Marshall Plan Will
•

!

<s>-

money
to one political faction adoption of the devices he believes
against another, allegedly to com¬ necessary for carrying out this
bat communism. The undertaking four-year program here at home.
This left-handed proposal for
was a fiasco. What damage it did

buffer for

maintaining
domestic pros¬

perity, though
a

this nation, not formally setting up in this coun¬
only in .respect of Russia, but try a four-year politically planned
like the
multi - year
other countries as well, is hot pos¬ program
sible to know.
But such inter¬ planned economy Schemes of Rus¬
sia
should
give
us
not
a little food
vention in the sovereign affairs of
other countries as we undertook for thought, especially in view of
in Russia cannot help harming the the proposal being made by the
prestige of any nation that prac¬ President's so-called Council of
to the prestige of

false and ca¬

pricious pros¬
perity, and to
aggrandize the
power of the

political

au¬

thority of this
nation.;

This

Economic Advisers to inaugurate

/

tices it.

policy had its
Inception with

duplicating that
World War I,
procedure but on a much larger
and has been
scale, and in respect not only to
Frederick C. Smith
In
effect
in
one country, but many.
The po¬
litical authority is now interven¬
\^arious
de>
grees throughout nearly all of the ing and taking sides in the strife
political factions
in
years since that episode, and its between
principal backers intend that it Greece, Italy, France, China and
It is supplying some
shall become a permanent policy. elsewhere.
We

are

now

.

those factions

of

The steps the
took which led

munitions

with

a clear understanding of this pro¬
jected foreign aid scheme. Those
supporting it affirm that its adop¬
tion will halt the spread of the
communistic advance against civi¬
lization, and they paint a porten-

■

•

-

This so-called European Recov¬

ery
Program departs from the
previous foreign aid plans in one
/Following World War I, the po¬ particular which is important to
litical authority undertook to in¬ note.
This proposed scheme for
terfere with the internal affairs of expropriating the fruits of Ameri¬
Russia by furnishing troops and can labor and gratuitously passing
them on to the political authori¬
*Part of testimony by Repre¬ ties of other Countries postulates
sentative Smith before the House a
four-year politically, planned
Foreign Affairs Committee, Wash¬ program for our domestic econ¬
:

ington, D. C., Feb. 25, 1948.

This

announcement

omy.

is

The President has urged the

"Socialism," said Bukharin and
"is communism
construction; it is in¬
complete communism."

Preobrazhensky,

in course of

to

Said Bernard Shaw, who ought
know,
if
anybody
knows;
the

"Communism is

same

as

so¬

cialism, but better English."
The Russian State is officially

designated Union of Socialist So(Continued on page 39)

Conn.), Secretary of the Treasury
John W. Snyder on Feb. 10 upheld
the International Monetary Fund's
objections to the French franc
devaluation
and
expressed the
Opinion that'in order to implement
the European Recovery Program,

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

;

-

text

i

'

*

*

.

•

.

'

■

•

•

/

:

r •
'

.

■

.

First

of

letter follows:

''

'

'

V

Due January 1,197$

/

v

102.46%
and interest
accrued

be obtained In

'

y

.

.

■.

j

..

v

any

Wishes first to comment




ex¬

for current
The market
exchange Would then fluc¬
/

transactions
purposes.

within

tuate

abound

the

tions addressed to the Department

sation, in conjunction with United

Of State are discussed below.

States

on

"Sections 3, 4 and 5 of

JV of

the

Article

the Fund Agreement do not

ber currencies

the

require adher¬

given

par value when it
inappropriate to the
international position of the mem¬
ber concerned. On the contrary
the
Agreement
recognizes that
adjustment of exchange rates may
be necessary/ and desirable and
provides a procedure for orderly
adjustment in consultation with
ence to a

Has

become

the Fund.

Director

States

the

on

Executive

International

•

"'

-

•

*

countries

"(2) Does the State Department
believe that the Bretton Woods
Agreements
with

problem

valuation but to the discrimina¬

multiple
the

which

practice

currency

French

Government

proposed to introduce in its ex¬
change system. The Fund Agree¬
ment, among other things, is in¬
tended to protect the members
against competitive exchange de¬
preciation as a means of expand¬

the International Mone¬

tuating

rate

exports to onie
on exports to
remains stable and
on

while its rate
areas

while

maintain

countries

Other

parities agreed with the Fund
result
in
discriminatory
depreciation. A system of this
the

would

>

-■

operating

in

an

important

be

revised,
to the

devaluation?

of

"(3) Does the State Department
that

in

order

such devaluation

monetary
the

tory

should

particular reference

tended

the poiht at issue. The objections
of the Fund were not to a de¬

-

covery Program.

Monetary Fund after consultation

the Fund with respect to the
necessity of a change in the par
Value of the franc, This was not

equilibrium

balances

with the National Advisory Coun¬
cil fully concurred in the position
Of

devalua¬

of payments of
concerned, would
not
be sufficient to realize the
objectives of the European Re¬

-

United

Mere

substantial

the

believe
"The

aft

to

achieve

international

conference, to be at¬
United States and

by the

16

participating

nations,

should be called for the
purpose
of

coordinating such devaluation?
"The

National Advisory Coun¬
cil does not believe that the Bretton Woods Agreements need mod¬
ification in order to meet the

problem of over-valued curren-.
cies, nor does it believe that this
problem could be solved by call¬
ing an international conference
for the specific purpose of deal¬
ing with this question. For Fund

mechanism, in its opinion, is en¬
tirely adequate" for this purpose.
The Directors of the International
Monetary > Fund

are

continually

in session and work in close

con¬

sultation With their governments.
The National Advisory Council is
satisfied that the Fund is- fully
aware of the

problem involved in
and that

Over-Valued; exchanges
the/Fund" is

more

than.ready to

appreVe

appropriate adjustments
Of -exchange rates when
they can
be made with, benefit to the coun¬
tries concerned and to the world
at

large. */

-"The

r

VV

/V'V''';'
;v
I
affectihg the.
exchange; and the aR-'

conditions

trade distortions and plight cast
doubt "oh the real

stability of
propriatenessofthe rate'strUetura

strength
of
othercurrencies
through the apparent discount
applied to them in the French sys¬
tem.
Moreover,, t he widespread
resort to $uch systems might lead
to exchange instability and disor¬

Of

ail member^
Would .suffer,; It was for these
reasons that the proposal of the
Government

was

unac¬

views, with

the? countries participating in,

the European

vary,

Recovery Program

greatly/.f>Accordingly, ; the

proper time' for: deValttatiori

wi(i

Vary fronr country * to country.
Premature. devaluation may haye\

unfortunate consequences, for
the economy, of g country a$ the.
prolonged
maintenance
of: an

as

over-valued rate.

lt is the

r

opin¬

io of the Council' that the meth¬

"The National Advisory Coun¬

THE ILLINOIS COMPANY

without
in

or

assistance.

tion without internal stability and

prevent the devaluation of mem¬

-regard

to

the

od Of procedure prOvided in the
Fund Agreement is far more sat¬

,

isfactory thari ah attempt at deal¬
specific questions raised in your
letter addressed to the Depart¬ ing With the problem at an ad hoc
ment

.'

the

over

such adjustments in rates should
be part of a developing program
of internal and external stabili¬

cil's

"

with

control

problem: of devaluation as raised
m your letter.
The specific ques¬

ceptable to the Fund.

HALSEY, STUART & CO. INC.

March 1.1948

stability

of

a
narrow
margin
legal par Value. Be¬
fore this objective can be realized
there will undoubtedly have to

Mone¬

tary Fund"raises' questions within
the competence of the National
Advisory Council, he has referred

French

BLAIR & COMPANY

exchange

minimum

rate of

international

to

.

-

WILLIAM

its objectives the maintenance

valuation of the Frehch franc in

sort

State in which this announcement is circulated from only such
of the undersigned and other dealers as may lawfully offer thesi securities in such State.
■
may

to

relation

der r from. which

Prospectus

the 16 countries
adjust their exchange rates.
The Fund Agreement has as one

sary for same of

account

regarding the recent de¬

trading country would encourage

*

*"

The

"The National Advisory Coun^
cil believes that it will be neces¬

change

area

Mortgage Bonds, Series B, 3H%

Price

identical?

be

of

unwarranted
-

real value of these currencies will

Bohlen

,

Light Company
:

nations so as to achieve
a free market in these
currencies in which the legal and
pating

of Jan. 29,
1948 addressed to Mr. Charles E.

Other

Dated January 1, 1948

prerequi-

as

eventually

of

"Dear Mr. Lodge:
"Since your letter

Both the National Advisory Coun¬

/

••

r

Wisconsin Power and

was

tary Fund held the view that the
application by a country of a fluc¬

$3,ooq,ooo_

'

-

required,
The
Secretary Snyder's

currencies

full

cil and

:

devaluation

across-the-board

ho

of

ing the? trade of one country at
the expense of another country.

not an

The

need for across-the-board devaluations

site for European Recovery Program.

I
Replying, as Chairman of the National Advisory Council on In¬
ternational Monetary and Financial Problems, to an inquiry by Rep¬
resentative John Davis Lodge <R-^>-

-

-

no

ten-year program of political
your letter to the Council for re¬ be devaluations of some of the
planning of the domestic economy. ply. The State Department as one currencies of .the countries in¬
the agencies represented in the volved in the Eurppean Recovery
Will Plan Stop Communism f V\
Council associates itself with the Program. It is the opinion of the
Definition is of the essence of Views stated here.
The Council National Advisory Council that

.

•

Sees

] trade.
j
/

a

political authority
the country into of war and military personnel, as
well as economic aid.
A11 this tious
World War I
were
duplicated,
picture of things to come
though on a larger scale, in the again ostensibly in the name of unles Congress approves it. What
\
course
prospects
are
there
that
this
pursued that finally led fighting communism.
It should
be
the nation into World War II. The
unnecessary to scheme will stop communism?
mention
that
this
action
will
cause
current behavior of the political
Marx used the word "Commu¬
a n d
"Socialism"
inter¬
authority is a replica of the con¬ a malignant breach in the rela¬ nism"
duct that took us into the late tions, not only between the United changeably, the latter more often
States
and
the
"recalcitrant"
than
the
former.
Lenin
used
them
po¬
war, but on a still larger scale.
The Post War I aid to England litical factions of the different synonymously. Stalin so uses them
£,/"/,,
V™/.-. .i
and other countries, first by direct countries, but the factions receiv¬ now,:"' : /, r::;:
Morris Hillquit, who was anl
government loans, then by the ing the aid as well. Indeed, this
purchase of foreign securities by policy of meddling with the in¬ outstanding champion of inter-'
socialism,
referred
to
private investors encouraged by ternal affairs of other countries national
the political authority, and filially will bring down upon the people Russia as a socialist state.
:
"That which is usually called
the payment by it of large premi¬ of this land ill-will from every
nation on the globe, with what socialism," said Lenin, "is termed
ums to foreigners on purchases of
effect,
heaven
alone by Marx as the first stage or
gold, all have their counterpart ultimate
lower
phase of communist soin
the
numerous
foreign
aid knows.
schemes that have been put into
effect since the close of World
War II hostilities.
;

Secretary Snyder, id. letter to Congressman John Davis Lodge, ob-

)

U. S. Congressman from Ohio

The foreign aid proposal before your Committee would extend and implement the
policy of Sharing the fruits of American labor and military resources primarily with
England, and secondarily with certain other countries for various and sundry purposes
It would serve

CHrreneyDevaluation in

jects to French method of devaluation/but recognizes maintenance
of over-valued currencies can be serious hindrance to European

SMITH*

Congressman Smith, contending U. S, is duplicating on a large scale disastrous Post War I policies
with regard to financing Europe, argues Marshall Plan will not curb communism, since nations which
are to be aided are already socialistic.
Points out aid would be dispensed by political authority in
each nation to enhance its own power, and argument that economic collapse abroad would cause us
"to lose our shirts" is promoting a "prosperity illusion." Notes vast funds already given for foreign
aid have been ineffective.
■■■:/:'
'

as a

on

ERP Countries

Communism in
By IlON. FREDERICK C.

/Thursday, March 4, 1948

,

of

"(1)
ment

State

Does
favor

are

the
the

as

follows:

State

devaluation

the currencies of the

;

Depart¬
of

16 partici¬

conference would prove to be:

"(4) Does the State Department
believe that pending such a con(Continued oil page 21)

*

Volume 167

THE COMMERCIAL

Number 4678
"

♦

#

,

&

FINANCIAL

Let

By ERIC JOHNSTON*

President, Motion Ficture Association of America
Formerly, President of Chamber of Commerce of U. S. A.

President of U. S. Steel Corp. says company

suffered heavy loss
output of semi-finished products in 1947.
Denies further
price or wage increases .are contemplated.

Holding Marshall Plan shohld be springboard for Europe and not a wheel chair, leading industrialist
urges American private business put some kindling wood in hearth of private European business.
Warns, though aid cannot be based on ideology, Europe will recover only as private business there
revives. Proposes a Peace Production Board to pass on worthy private investments abroad and a
gen¬
eral hook-up of American capital and American know-how with European
capital and manpower*

Congressional Committee on the
Fairless, President of the
the recent increase of $5
prices of semi-finished steel on the ground his company

Appearing

Joint

the

before

Economic Report on March 2, Benjamin F.
United States Steel Corporation, defended
per

ton

on

losing^
steel
business
is
on this semi-finished
class of prod¬ handled by our subsidiary,
ucts
sold "to Carneigie-Illinois Steel Corpora¬
a
handful of tion. The Customers of Carnegie-

I don't know
any

was

heavily

customers,
them

of

most

few in number,

Ten of

not over 75 as a
these customers-

whole.

concerns."

as¬

large companies — ac¬
count for about 80% of CarnegieIllinois' entire sales of this ma¬

the

terial.

sertion
f

o

He

his

based

on

an

United

is not

Steel

merical

no

general in¬
the

in

crease

price of its steel products and it
does not now contemplate making
any such increase. v-.';

to

or

a

Rather

am

that

is

"(1)

made

sold to the public

usage

wide range Of customers.

it

is

a

form of steel

somewhat special

used

ma¬

a raw

as

by only a few concerns. I
convinced that the recent in¬

terial
am

of one-quarter

crease

of

a

cent

United

States Steel has per pound in the price of this
entered into no agreement qr un¬ semi-finished material is too small
derstanding, private or otherwise, and unimportant in itself to pave
to grant further wage increases.
the way toward a higher price
v
"(3) This price change was our level for the various articles of
own
independent action, caused everyday use made out of steel.
by our continuously increasing In my judgment, the inflationary
costs. Any charge or insinuation influence of the price adjustment
"(2)

that

acted in concert with any

we

steel

other

is

company

fered

a

of

1947

;

over

two

million

tons

semi-finished steel. Losses
material

have

been

at

of

this

on

why

"I want to tell you
lieve

United States Steel suf¬
heavy loss on its sales in

"(4)

exaggerated.

has been grossly

without

foundation.

ths

we

modest increase in

be¬
our

prices for semi-finished steel was
and fully justified by the
facts. I tried to tell the story in a
statement which I issued on Feb.

proper

even

an

20, when these exaggerated ac¬
necessitating counts first appeared. Unfortu¬
an
increase in February in our
nately, very little attention was
prices for such semi-finished steel. then
paid to my explanation.
"(5) United States .Steel is a

higher rate this

victim
cause

have

commodities.

United

States Steel cannot fairly be made
the

scapegoat for the nation's

eco¬

nomic ills."

Continuing, Mr. Fairless stated:
"We in United States Steel be¬

lieve that costs and prices in gen¬
eral are too high for the good of
the
my

nation.

the

At

conclusion

remarks I will have

a

of

definite

statement to make that I sincerely

hope will help the national situa¬
tion.'

■"

-y

"Criticism of

action in ad¬

our

vancing the prices of certain steel
products has led to this hearing.
I

believe that

much

of

the criti¬

cism has been emotional
cal
,

in

character.

to

today

reduce

I

or

politi¬

should

this

like

matter

to

what I believe are its proper pro¬

portions.

*
?
"The criticism centers upon in¬
in

creases

our

prices

semi¬

of

finished steel. On Feb. 13 last, our

ness

to

for

see

ducted
I

do

many

that

years.

our

certain

its

in

semi-finished

averaging about $5

ton, or one-quarter
per pound.
a

of

a

cent

"Semi-finished steel consists of

ingots, slabs, billets, blooms, tube
rounds and skelp. This is not the
kind of steel sold commercially oh
a wide scale, or used generally by

not

see

how

business

a

consumers;

use

in

On the contrary

the

manufacture

of

consumers' products.
/.
"Semi-finished steel constitutes
a

shall Plan

going
you
con¬

director

a

of

banks

both

Pacific
and

Coast

here

in

the East—so I
think

I

Erlc A. Johnston

have

right to speak bluntly and
frankly without the risk of being
a

considered

look

we
as

anti-banker

sub¬

or

versive.

Chair

that

detail of the Plan
up

Marshall

Plan.

for

every

I'm
as

it

was

sent

So

can't do

But there

can't

we

tain that

We all want the Marshall

We

the

for

of

But that's by no means the final
answer to a healthy European re¬

that

mean

relocation

and

Europe instead of

I'm

We

that.

anything
are

"The

problem

Plan

to

be

base

our

a

and

of

we

aid in the revival

unsocialized

enterprises, there

will

be

as

more

rebuilt, reborn

and

more

or come

us.

I

am

sure

run

a

on

from

year

to year as a dole.

Revive Private Business in Europe

My considered opinion is just
Europe will stride forward

this:

again

That's what may happen unless
in private business in this

without

a

crutch only

•

small part of our total business.

Sales last year by United States
Steel of semi-finished steel of the

during 1947.
"By; far the greater part of

so




•;:;

■

Missouri Pacific Railroad

Equipment Trust, Series JJ
2lA%

Equipment Trust Certificates
(Philadelphia Plan)

To

To be

mature

annually $433,000

on

each March 1, 1949 to 1958, inclusive

unconditionally guaranteed as to payment of par value and dividends by endorsement
Guy A. Thompson, as Trustee of the property of Missouri Pacific Railroad Company,
but not

individually

;

(

by

;

Certificates are to be issued under an Agreement to be dated as of March 1,1948,
provide for the issuance of $4,330,000 par value of Certificates to be
secured by new standard-gauge railroad equipment estimated to cost approxi¬
mately $5,784,030.

These

which will

the situation
alarming to United

States Steel that

we

felt it

services.
"The

most

MATURITIES AND YIELDS

neces¬

found that in the month of Janu¬

1949

1.45%

1952

2.05%

1956

2.45%

1950

1.70

1953

2.15

1957

2.50

1951

,1.90

1954

2.25

1958

2.55

1955

2.35

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 such of the undersigned and other dealers as may lawfully offer these

Issuance and sale

The

securities in such State.

HALSEY, STUART 4 CO. INC.
R. W. PRESSPRICH 4 CO.

disturbing situation

revealed by this recent survey was
that of semi-finished steel. We

HORN BLOWER & WEEKS

FREEMAN 4 COMPANY
FIRST OF MICHIGAN

CORPORATION

OTIS L CO.
(incorporated)

WM. E. POLLOCK 4 CO., INC.

THE MILWAUKEE COMPANY

ary,

of around $5 a ton to these parour

v-$4,330,000

"A short time ago

1948, Carnegie-Illinois lost
kinds covered by the recent price approximately a million dollars On
increases amounted to approxi¬ its sales of semi-finished material
mately 2,000,000" tons. These sales to a handful of customers; We saw
represented only 10% of the total
no'good reason why United States
tonnage of steel products shipped
Steel should be granting a subsidy
by United States Steel to the pub¬
lic

»;

.

influences, which have been be¬
yond the control of United States
Steel Corporation or any other
single company.

continued

on

page

35)

as

private business in Europe revives.

What is needed in Europe is to
by Mr. Johnston at country put some kindling wood
in the hearth of private business unleash the creative and imagina¬
dinner of the Washington Chapter,
tive talents of countless of thouAmerican Institute of Banking, pver there.
Manifestly, we've got to recog¬
(Continued on page 39)
Washington, D. C., Feb. 21, 1948.

it has been

equally so to manufacturers gen¬
erally, both large and small. At
the end of 1947, average hourly
earnings of our employees had
gone up 80%
since 1940. Their
average weekly earnings had ad¬
vanced 89%
during that period.
Since
1940,
American industry
has experienced a series of wage
increases and other inflationary

of them

into being.

*An address

largements, has been of deep con¬
to

to

we

mounting costs over the last six
or seven years, both in operations
and in plant replacements and en¬
cern

aid

springboard

for
wheel chair.
don't want it to begin as a

handout

Pennsylvania Avenue to Capi-

continually

of

thou

sands and thousands of small

First of all, I want to make it
transparently clear for the record
don't

about

highways; in the rebuilding of Europe on ideology. We will find
power plants, water systems and ourselves working with assorted
ports, Those are all proper gov¬ brands of socialism, but we might
ernmental functions.
as well face up to this fact: We've
got to help Europe whether she
A
Springboard and Not Wheel is socialist or capitalist. I main¬

covery.

I

the Mar¬

upon

a

construction

—

the

on

..

•

sider myself as
one of you.
I
am

new

ant,
proposition of our
businesses
unso
government helping other govern¬ medium-sized
They need us, and wt
ments
in
16
western European cialized.
them,
The more private
nations. Government - to-govern- need
ment aid is effective in a limited businessmen there are in Europe
the
more
private
businessmen
number of fields as nothing else
can be.
For instance—in the re¬ there are apt to be here.

to speak very
because I

a

T—,—_—:

socialized.

Broadly,

bankers.
am

We need to take

—-—

poses.

cially concerns
I

—

Hill, but I do mean that I nize that some of the major in¬
heartily endorse its broad pur¬ dustries in Europe have bee-,

which espe¬
us

lowering the hemline. Today,

tol

it

about

than the Marshall Plan—-un¬

of

the Marshall Plan,

on

4>~———

.

can

as its name implies, it
is raw or
semi-finished steel requiring fur¬ of the total • sales revenue of
ther rolling or processing before United States Steel was spent in
it/becomes a finished steel product the purchase of such goods and

for

two

to raise your sights

you

■

or

endure, if the prices for its prod¬
ucts do not pay their way.

sary to take a fresh look at the
relationship
between costs and
prices of our many steel products.
This relationship changes from
day to day with changing condi¬
tions. It has been growing pro¬
gressively worse from a financial
standpoint due; to higher labor
costs and
to
constantly higher
costs for the goods and services
which- we must purchase to con¬
tinue in business. In 1947, 39.6%

increases

customers

steel

thought

over

con¬

its

steel products,

was a case

My job is

business is

became

for

chewed

That

efficiently and profitably.

Carneigie-Illinois
Steel Corporation, announced to

subsidiary,

prices

more

going to ask

look at it. I've
a

subject that's been

look in the distaff circle.

the steel busi¬

"I have been in

the

not

and

of it. Steel prices as a whole
lagged far behind the prices

other

of

I'm

new

year,

inflation

of

less it's the

frankly to
trying to make
semi-finished steel
article of ordinary comI

"What
clear

States
has
j

all fairly

1 lowing

facts:

Benjamin F. Fairies#

Illinois for semi-finished steel are

large

and
profitable

19

Enteipiise Into Marshall Plan!

Semi-Finished Steel Prices
its

(1011)

'

Fairless Defends Boost in

on

CHRONICLE

dated March 1. if48. Par value and semi-annual dividends (March 1 and September 1) payable in St. Louis,
Definitive Certificates, with dividend warrants attached, in the denomination of $1,000,
as tovar value. Not redeemable prior to maturity. These Certificates are offered when.'as and if received
bv us It is expected that certificates in temporary or definitive form will be ready at throffice of Haisey, Stuart It
Co Inc
123 South LaSalle Street, Chicago 90, Illinois, on or about March 17, 1948. The information contained
herein has been carefully compiled from sources considered reliable and, while not guaranteed as to completeness or
accuracy, we believe it to be correct as of this date.
To be

Mo

and New York, N. Y.

reeisteraMe

February 26, 1948

,

THE COMMERCIAL &

(1012)

20

CHRONICLE

FINANCIAL

Thursday, March 4, 1948

MASD District No. 3
Elects New Officers
of

3

CONSOLIDATIONS

of

Association

National

the

News About Banks

Securities Salesman's Corner

COLO.—District No.

DENVER,

NEW BRANCHES

By JOHN DUTTON

NEW

Securities Dealers,. Inc., composed
and

cameras

Bankers

and

OFFICERS, ETC.

REVISED

The other day I stopped by a store that specializes in the sale of

,

CAPITALIZATIONS

supplies.

During the past 15 years the publics
acceptance of photography has grown into a gigantic industry. From
coast to

filled

camera

coast, in almost

to

town and city there

every

stores

are camera

photography gadgets that

numerous

have been

developed during recent years. This is a new business which
has been virtually created by taking up an old are and
popularizing
it with the general public. The camera business has actually mer¬
chandised itself into popularity.
This has resulted in a period of
growth and prosperity for the manufacturers and distributors of
photographic equipment.
-«■
«
„

of the American Savings Bank, of

ance

New

share to be

York,

has

of this very

fine store has known

me

for

a

announced

Feb.

long while

by

special
noiders

Campbell,

to vote

"I don't think you
Sudler

C.

Amos

Malcolm F. Roberts

asked him

fellows in the stock and bond business sell right."
meant by that remark.
"Well I don't exactly

conscious.

We have

we

Then

he

camera

"How

added,

did

happen to buy a movie
camera?" "You know how it goes," I replied, "Your wife gets after
you because she wants to take pictures of the kids, so before long you
are lugging
one of the darn things home."
He laughted and said,

build up our business."
about the way we sell

Then he continued to tell me what he thought
stocks and bonds. Most of it was not very
complimentary to our merchandising ability. ; ,/ '•
r
r
"Take those ads you fellows put in the papers. Who reads them
anyway
all those cut and dried announcements that are so
stilted and forbidding to the average layman.
What people don't
...

know

about stocks and bonds is plenty and you fellows don't tell
anything either. Look at the way interest rates are way down
and the yields on good stocks are so high.
I'll bet there must be
thousands of people who would buy five or 10 shares of a good stock
if they knew they could invest small amounts. There must be
many
people who would never think of walking into a broker's office just
because they think such places are only for the more fortunate-rich.
No foolin', I think the way you people go about selling the
average
man in the street is pathetic."
\
;
vthem

following officers'

Chairman—Amos

C.

Sudler

(Amos C. Sudler & Co.)

31

last

the

Irving

The

Mr

to

with the Bankers Trust

to

ers

became; a partner in the firm of
Hackney,, Hopkinson &; Sutphen,

was

members

Issued for

thousand

of the New York Stock

in

the

Army Air Forces.
placed on inactive duty

Lt.

Colonel,
release

Air

Reserve;

from

active

Charles
the

Upon

duty,

Roberts

a

1

c o

1

F.

m

(Sidlo, Simons, Robert &

Co.)

i

And is there not

the

wasted

every

Secretary—A1 b

e r t
J.
Gould,
Security Building, Denver.

1114

The District has

tative
of

the

on

as

its represen¬

Association's Board

Governors

John

J.

Sullivan

(Bosworth, Sullivan & Co.).

W. 0.

Gay Partner of
Olenry Herrman & Go.
Announcement

Henry
liam

is

Herrman

Street,

&

New

made

Co.,
York

52

by
Wil¬

City,: of
Gay,
Mr. Gay

the admission of William O.

Jr.,

as a

general partner.

been

has

actively engaged in the

securities

business for

of

his

a

number

last

ciation

having

previous asso¬
been with W. E.

Hutton

&

Prior

years,

he

with

was

and

Co.

earlier^

Blyth

to

&

the

war

Co.,

Inc.

associated

was

with

sense

'in what he said?

is

he

Board

and

dull-and

monotonous

own

home town would tell her how much easier it would be for her to

save

for little

Johnny's

education

by taking advantage of
the income return you can get today on good
securities, don't you
think she might be ihterested? A college education is something she
can
understand, but balance sheets, prospectuses and Wall Street
lingo—never!
;
money

There

be many things the fellow that is selling cameras
can
understand, but balance-sheets, prospectuses and Wall Street
done when you are selling securities. The Securities
Exchange Com¬
mission has never clarified its position regarding what
you can say
and what you cannot say.in a letter or an advertisement
this
is a great handicap to those of.us who would ljke to do somQ adver¬
tising along more unorthodox lines. But the fellow in the- camera
store is not telling his customers how the cameras are
put together,
or the kind of nuts, screws-and wheels out of which
they are made,
he says, "BUB, LOOK AT THE PICTURES YOU
GET]"
may

.

.

.

W. O. Gay & Co. '
are

M.

Calin, Jr. The firm, formed in
1939, conducts a general invest¬
ment

G. H. Walker Hartford

Francis

Branch Under Gould

business.

—

G.

.

Hi

Stock

86 Years

in Business
!

Exchange and other leading
exchanges, announce the opening
of a Hartford, Conn.,, office in the
Hartford National Bank
36

Pearl

agement

New

England Company

Harry

Building,
Street, under the man¬
of

L.

Charles

Perkins

will

ciated with him in the

Common

stock

averaged $4.58
over

earnings
share

per

previous 10

Mr.

The

Gould

was

First Boston

W.

Gould.

be

new

asso¬

office.

A.

G.

Becker

&

''

Co.

rated, .54, Pine. Street,
City, announce
the

Incorpo¬
New York
association

with the firm of Francis G. Hayes

registered, representative
in
charge of the
company's
New
York trading department, special¬
izing in institutional investments.
Mr. Hayes' previous associations

Stillman, Maynard & Co.,

previously with

Bear,. Stearns & Co. and Salomon

Corp.

Bros. & Hutzler.

/

'

period

is

at

Broadway

Over-the-Counter Quotation Services

N.

7.

:

:

NATIONAL QUOTATION BUREAU, Inc.
Established 1913
46 Front Street,

Telephones: HAnover 2-7914

Chicago

y

Trust

New York 4, N. Y.
'

ol

San Francisco

York

terests
stock
each

in

•

rate

its

of

of

of

it

:■

•

-

The

Board

Continental

*

the

repre¬

It

Directors of The

of

Bank

Trust

&

of New York

after

extended

the

Agency

000

Continental

will

against 5%

Feb.

on

Swiss

Fund

.

27.
»;

over

a

to

for

proposed ;»■
There was '*■

buildings.

Francs

and

of 1,000,- C

reserve

Francs

bank

carried

be

special

a

'

dividend of 6% has

a

Pension

Swiss

new

an-

500,090 Swiss Francs to

Bank's

create

that

announce

the

Corporation

also decided at the meeting

was

the

of

vV,

-•

■.;■ >

/

i

The action took place at ►
annual meeting of the /

76th

to donate

Com¬

meetings on Feb.
27 and 28, they have approved the
proposal of the Chemical Bank &
Trust Company whereby the busi¬
of

Bank

.' '

'.i,

,

York

New

for 1946.

for

*

pany

ness

#

"V{.

shareholders at Basle

*

•

■■■' sjs

'

::

been declared for 1947

capita1

$30.1823
share

a

#

';*

bounces that

thereby.
••-

v

share

a

the

at

that

announces

one-ninth

sented

total of 5,007,042.40 z

compared

with

4,-

387,663.53 for the previous year.
'

■

*

joined with that of the Chemical.

*

-

,y

*

:>J

The announcement says:.
~
i "At the meetings careful study
and consideration
was
given to

and Trust Company of Bronxville, /

the proposals

Feb.

&

Bank

the

Trust

were

tors is

troller

file
■

and

thorities

Federal

well

as

stockholders
Bank

&

of

Trust

banking
that

as

The

of

the

in

issue

$10

Franklin
of

on

Feb.

24

to

the

stockholders of The Trade Bank

Company

of

New

early

part

of

an

&

in

increase

that

1944,

of

stock

Bank j

Long

Island

sold.

"since

earnings

subscribed

to

4,492
y"
.

y<o *

.j

-

/

y,' "V

.t".

--ty

approval of the
merger of the Lincoln Rochester
Trust
Company
of
Rochester,

»

N.

r

Y.

and

the

the

Trust

Company

N.

on

Y.

opened

Feb.

as a

Ontario

of
27

County

the

latter

was

branch of the Lincoln

Rochester Trust on March lyreporting this the Rochester "Times-

between

Union"

deposits
and
capital
keeping with the rising

^

President

Schenk

goes

to say in part:

"Your

now

board

directors

to

are
'

be paid provided that capital
brought to a'more desirable
and

have

mended

the

increase

in

therefore

authorization

recom¬

of

an

capital from $1,500,x

said:

j increase in the capitalization of f

of the opinion that dividends

may
be

further

:

"Stockholders also approved an
the Lincoln

of

-

Canandaigua,

retained in capital ac¬
count in order to maintain a .ratio
in

5
t

announce

■

Following

York,

Schenk

Comp-

National

Square,

they

shares.

letter

Co.

capital

all

been

^
a

the

*
&

Square

Franklin

which

19,

page 813.
In

■

Originally, '
stockholders were offered rights
to purchase
12,500 shares of this
stock
at $42 per
share, out of r

ap¬

Feb.

value

par

has

pro¬

Bank

of

of

*

Johnson

the

Continental

Chemical

our

on

Currency.

f

...y-

au¬

Company of New

An earlier reference to the

:

peared

capital

that their offering of the unsub¬
scribed balance of 8,008 shares of

York."

posal of

j-y..::■

Office

the

of the

R. H.

subject to the approval of

State

its

17 from

letin of

both

on

increased

Bank

stock, it is learned from the bul-

and The

Company,

proposals

i Y.

National

$200,000 to $250,000 v
through the sale of $50,000 of new i

Chemical

Trust Company

which

of

with

York

N.

resulting from final

negotiations

Gramatan

The

.

ratio
•.

;

.

The

,

!

Street, Boston Road
Street, and 167th Street

and Jerome Avenue.

Company

Swiss

the

'\

and 27th

ir

New

funds

Teletype BS 250




*

prepared to redeem capital stock
scrip certificates for fractional in¬

on

St., Boston 9, Mass.

*

have been

For 35 Years

;

and

'•

Guaranty

/

deposits."

148 State

❖

■

Henry L.
submitting plans for
in the capital stated

on request

Tel. CAP. 0425

office

and 174th

•••;

President

Descriptive analysis of- this
special situation mailed
.

;

,

Trust

years.

$13.08; 1947
earnings $6.32 per share.

|

:

,

y

38th

enue

bank's

Chicago.

as

include

;

in

the

of

manager

Company

The action of the Board of Direc¬
1

Highest annual earnings
for

-i:

main

Street, with* branches at 7th Av-y

Trust

&

with the Superintendent of Banks
at the time of the deliberations.

A. G. Becker Co.Jnc.

Walker & Co., members New York

i

Hayes With
■

HARTFORD, / CONN.

i

Schneider

bank's

office

Bank

New

Qther partners of the firm
Henry Herrman; and William

J.

The

as

market, letters with their hedgiqg and

,

,

Max

President.

became associated with the Chem¬

their

hawing, all couched in language that may be understandable
to th'e average professional investor, but they are
nothing more than
gibberish to the lay public.
And how about trying to sell the
"Missus"? When it comes to knowing the value of a dollar these
davs,
is there anyone who could be more receptive to the
comparative dif¬
ference between llk% and the kind of yield obtainable on
many
stocks today, then Mrs. John Q. Housewife? If some broker in her

than $110.000,000.>
is Chairman of

more

Richter

ical

Just think of all

time, paper, printer's ink and good money we spill out
in this business for so-called dignified advertising. Or

year

those

lot of

a

,

total of

a

-

Vice-Chairman—M

one

shares will thus be

new

of

sources

in late 1945 and holds the rank of

his

*
»

$1,000,000, and capital, surplus and un- V.
divided profits will then be $5,- v.
000,000.
Subscription rights .ex->
pire April 1.
The bank has re- ;

First. Lieu¬

a

proposes

he bank's

Exchange, retiring from this posi¬
tion in February, 1942, when he
commissioned

York

subscribe at $12.50 for

new

was

New

& "

Bank

share for each share held, it i
announced on Feb. 26. Eighty >

He then

He

Safety

adjust its capital funds b.y issuing rights to present stockhold-

number

York.

\

*

*

National

Trust Co. of

a

;

payable April 1

-

a

depart¬

a graduate of Prince¬
University and after gradua¬

tenant

of

previous

on

Sutphen is

was

Company

8; )
quarterly payment, ;
January 2, last, was 15 cents.

the

ton

of New

Trust

to stockholders of record March

mort¬

ment.

Company

$59,000,000, "
funds on the I

were

capital

date

The

PresL

-

the

tion was associated for

t

j

institution

position of

gage

•

9„

the proposition.

New York has increased its divi-

Sutphen, Jr.

df years

A

stock-

March

on

dend to 20 cents

Vice.

R.

the

of

yanced to the

of
H.

held."

now

be held

has
ad-

n

dent in charge

you

"That's just the point, today the women buy more products by far
then do men—we didn't overlook them either when' we went out to

elected the

bee

~

stockhold¬

(capital, surplus and
undivided profits) were reported
as $3,300,000.

Presi¬

-

dent,

to

deposits of the

same

Assistant

vice

clubs, we inaugurate contests,
conduct classes that teach people how to make better pic¬

camera

tures."

Arizona, Colorado, New Mex¬
ico, Utah and Wyoming, at a re¬
cent meeting of
the Committee

1 y

what he

it," he replied, "but it seems to me that you never
put your best bargains in the window." "In this business, for exam¬
ple, we are always coming out with some new gadget, or an .idea
for picture making, that has popular appeal. Today the entire nation
and

<)f

Mills, former-

shares

on

while

M.

offered

will

Dec.

on

time,

same

through the issu¬
at $10 per

shares

meeting

The

At

Harold

know how to say

is

John J. Sullivan

the

are

30,000

each'five

M.

President.

stopped to chat a while. He asked the usual questipn today,
things in Wall Street?" I told him he could see for him¬
self just by looking on the financial page of the papers. Then he said,

I

26

of

in proportion of one share for

ers

on

William

and he

"How

a

Vice-President of the bank, it was

.

owner

elected

been

.

The

000 to $1,800,000

Henry R. Sutphen, Jr., trustee

i

overflowing with the

bring

bank of 6,610 shares,

the

total

.

outstanding
shares to 301,410 shares. Of this
amount
10,000 will be used to
acquire
the
20,000
shares' the :
Canandaigua bank has outstandi¬
ng. Raymond N. Ball, President:
of

Lincoln,

said

that

about

75%

Volume 167

of

the

were

Number 4678

stockholders

represented

.and

83%
bank."
In

of

January

Rochester

of

Lincoln

at the

meeting

the

THE COMMERCIAL

.

Bank

Lincoln

the

absorbed

San

the

stock.

new

columns Feb. 5, page 617.
*

Carl
and

G.

?■

Savings
Conn.,

First

of

fice

reelected President of

was

ing.

is also President of

He

Savings

Banks'

dent

of

Association

Real

Trust

Feb.

it

Co.

the

announces

promotions,

the

H.

of

Treide,

Citizens

fol¬

April 1, 1906

Officer

Trust

and

in

4:

The

#

of

p

Of

7179

Ogontz
by

proved

Avenue

of

Comptroller

expected

this

to

be

; ""

year, y

behalf

of

A.

Seattle,

men

Bank

Wash,

Feb.

Cashier

of

Feb.

19

member
of

39%

vances

on

26

1947

this

share

by

elected

As-f

Both will be

as¬

the

Lancaster

Main

Office under the direc¬

movement

19%

of

accelerated

from

in

1947

drop of 30%. Last

ad¬

At the

end

operating

on

than

in

located

New

of

York

Aside, from

loans

to

with

to

an

of

aggregate

$395,000,000. Slightly more than
half this gain was recorded in
banks

outside

accounted

in

1946.

the

and

the

the

Current

operating

V-..

earnings_____

—2,628,000
126,727,000

ferred

on

participat¬

unless

.

been

least

at

devaluation

of

measure

of

currencies

of

a

the

nations?

those

Executive" Branch

"The

has

its position clear that the
extension of aid under the Eu¬

made

ropean

Recovery Program should

conditional

be

maximum

the

on

possible
amount
of
reciprocal
self-help among the participating
countries.
It recognizes that the
maintenance
of
exchange rateswhich
be

1,047,000
55,771,000

stock__

common

has

debentures, pre¬

on

stock, etc.-

Dividends

,

30,368,000
96,359,000

profits

Interest and dividends

the

of

will fail of its ob¬

Program

ery

jectives

$363,361,000
208,446,000
.154,915,000
26,877,000
181,792,000
52,824,000
128,968,000

228,791,000
129,355,000

net income___

on

currencies

believe that the European Recov¬

1946

$358,146,000

Profit before income tax
Net

1947'

.

Net other income
Taxes

direc¬

respect to
devaluation
of

"(5) Does the State Department

City.

trust companies for 1947 and
previous year were as follows:

r

current

the

or

ing nations.

Condensed earnings fig¬

operating earnings
operating expenses______;___-:__

Current
Net

y^y."

V

.

.

to

Fund with

prospective

the

of the New York State banks

ures

New

for

the

States

there is a maxi¬
$22,000,000 in net prof¬ mum amount of reciprocal selfits on securities. Both groups of .help among the 16 participating
banks reported net losses on loans nations and that this is impossi¬
of
achievement
until there
in 1947 as against net recoveries ble

loans to a total of $482,000,000 and of $70,000,000 in real

loans

Britain

Great
of

tors

United

particular agreement

a

of almost

consumer

estate

the

for

enter into

major portion of the de¬
cline
in
non-operating
income
was due to the drastic reduction

business,

indicated

National, Advisory

Council believes that it is not de¬
sirable

banks

the

'reasons

the

above

000,

earnings

participating countries?
the

"For

a

year

the 16

of

further
such prof-i

by

directors of the International

the

Monetary Fund with respect to
the devaluation of the currencies

the peak

the

less

agreement with Great Britain and

in

its, which
000

of

National Bank

were

Cashiers.

decline

18)

page

desirable for

the State Department to reach art

Reduced

downward

reached in the previous year, was

the largest gains among classes of
loans were those of $86 000,000 in

City

Bank

Profits

Bank

were reported at $127,$55,000,000 below 1946;
were cut by the sharp drop of al¬
most $27,000,060 in non-operating
income in 1946 to a non-operat4
ing loss of $2,600,000, and to the
reduction of $25,600,000 in net

was

(Continued from
ference it would be

.

on

In EPP Countries

as

The

The

the

located

of

securities.

loans

all

21

real

on

profits, before taxes on net in-<
come, which began in 1946 with

con¬

securities constituted

three-fourths

1947.

with

.

than half in

more

almost

York

National

and

banks

of

one-third

The

a

formerly

the

in

Loans

City.

all

directors,

Commerce,

sistant

j

the

.:.

at

Explains Position

was

resident

repre¬

government

signed to the loan department of
On

City banks

of

board

loans

from 64% to 73% in the

rose

Macdonald,

the

Ronald

total

which
on

against less than 3% In New York

half.

mem¬

new

National

on

of

properties.

tute

a

At that time loans

of

1

Tacoma,
became
Vice-President in charge of oper-?
ations on March 1, effective date
of all four changes.
M. J. Santi,
Credit
Manager,
and
John
H.
McGraw,
a
credit
department

early

."V

share

Washington,

Cur¬

opened

•...

and

Price,
Chairman
and
Carlson, President, on

Maxwell

rency,
it was indicated in the
Philadelphia "Inquirer" of Feb. 20,
which stated that the new branch

is

of

announced

Andrew

ap¬

was

Commerce

at

1947

mainly

estate continue to be important in
these banks, where they consti¬

the

By

were

June, 1945.

•

the

1946.

peak

compared with

on

*

of

was

office by Corn Exchange National
Bank & Trust Co. of Philadelphia
at

officers

as

branch

a

em¬

messenger

a

bers and election of two

j

establishment

as

of

years

Advancement of two staff

Assistant
Vice-President and Trust Officer;
Frank F. McCarthy, Trust OffL
cer; Robert A. Bodine, Assistant
Trust Officer; Thomas J. Nelson,
Jr., Comptroller, and Philip F.
Sheridan, Assistant Treasurer."
/

Trust

several occasions.

upon

Renninger,

'<•

these loans

major categories of
loans increased, loans on securi¬
ties declined $352,000,000, mainly
at New York City
banks, to $615,000,000.
At the year-end
they
represented only 11% of all loans,

Vice-President two years ago. He
served as a director of -the bank

Corporate Trust Officer;
H.

63

tial

first

elsewhere.:

through the ranks to become

rose

charge of Houston Estate; Andrew
O'Connell, Assistant Vice-Presi¬
George

17.

ploy of Citizens National Bank

the

of

half of

1947

tinued

Vice-Presi¬

was

concentrated

$651,000,000

last

New,York

reports

National

22. He

J.

dent and

of¬

Mr. Treide entered the

age.

learned

is

issue

24

tack Feb.

of

'Evening Bulletin" of that city:
"Joseph E. Greene, to VicePresident

of Feb.

the

in

loans

estate

sented by these advances to busi¬
ness

Savings Bank of Los Angeles,
Cal., died suddenly of a heart at¬

Ss

Estate

Philadelphia
from

Comptroller
as

the

from

The

of

The

&
%

*

lowing

$2,500,000.

in

the year and

the

While

George

tne

Connecticut.
The

bank

of

$72,000,000

(1013)

major portion of the rise in real

of commercial and
loans compared
with

of $3,700,000,000,
31% above the previous year-end.

Denver,

increase

of

postwar

153rd Annual Meet¬

at the

merce

to

the increase

the New Haven Chamber of Com¬

to

of

the

of

the

of

Bank

served

capital

$1,500,000

Haven,

New

has

the

Connecticut

of

Rank

Colo:

Vice-President

Freese,

half

end

CHRONICLE

in loans to business.

year

gains
in

FINANCIAL

growth

industrial

$

,

National

the

This

by the

#

Treasurer

of

The issuance of additional stock
to the amount of $1,000,000

noted in these

as

in¬

Texas

•
:!c

Corning Trust Company of Corn¬
ing, New York,

Antonio,

creased its capital on Feb.^ 17 from
$250,000 to $500,000,; the additional
amount
having
been' brought
about by the sale of $250,000 of

Canandaigua

Trust

of

&

1,255,000
53,904,000

a

currencies

over-value

can

serious hindrance to the

ex¬

pansion of trade and that the ex¬

pansion of European trade is es¬
Piatt, Vice-President Net profits after interest and dividends
sential for full European recov¬
on capital
*_■
Manager. Sheridan P. Gal4
39,541,000
73,809,000
ery.
Consequently, the Council
capital by the sale of new stock,, lagher, previously Assistant Chief
;
N^t; operating' earnings, before or $22,500,000 less than in the pre-, believes, as has been stated in
increasing the amount from $400,r of the Seattle - loan application
vious year.
Capital accounts of testimony before the House Com¬
000 to $500,000. ;
division of the Reconstruction Fi-> 'ihfbme taxes, fell 19%'in 1947'fn
the New York City banks, while the 255 commercial banks were
*
*
%
mittee on Foreign Affairs, that
y, •. 'v.
!. nance
Corporation, was elected outside
they remained virtually increased in 1947 by $43,200,000 to
The
Bexar
County
National Manager of the credit department;
exchange rates should be adjusted
a
unchanged. The proportion of in¬
peak of $1,760,000,000.
This
stitutions reporting decreases in gain was due to a net increase of wh^re this Js an essential element
net earnings was about the same $3,700,000 through the sale of new in a program of stabilization.
It
as in 1946', when four-fifths of the
stock and through * mergers and
was *the opinion of the Council,
banks
in
New
York
City and to the retention of net profits
however, that to make acrossabout two-fifths elsewhere were amounting to $39,500,000.
In the
devaluations
a
pre¬
in that category.
New York City banks the growth the-board
County

caster,

National

Pa.

Bank

added

of

tion of J. L.

Lan?

$100,000 to

and

its

_

_

_

_

_

__

_

_

_

_

_

_

_

_

•

..

Sees Bank

Deposits Again Divorced From yi
Treasury Operations

New York

State Banking

in

Superintendent Elliott 'iV. Bell reports y

chartered commercial

state

banks

'New York .City Banks

and trust companies kave in- >
_

T

;T>;:

creased their deposits^ despite

lower Treasury balances. Points
to recent striking expansion sof deposits of individuals, partner- y

decline

The

in

.

net

operating

earnings'; in New York City
curred despite a rise of 14%

oc¬

in

"

1947, accord-- ':.
ing to yearend
figures

;

-®

■..y.-'yyy'.

y;y.yv

corporations, which,
after declining $336,000,000 in the

ships,

and

made

first

by

jumped

public
Elliott V.

nine

months

the

of

year,:

Bell, Super¬

$747,000,000 in the last
quarter to a new peak of $14,500,-

intendent

f

000,000.

Although

This

demand

and

creased

in

Banks.

time

in

that

o

first

the

eral

sev¬

growth

years

former

Treasury

opera-

tions failed to

Elliott

by only 3%

V. Bell

contrast

high

their

with

point of almost $6,000,000,000 in
1945.
The shrinkage
in
Treasury deposits during the past
two
and a half years has been
June,

to

the

the growth

loans.

on

extent

of

54%

of other deposits.

by

11%

with

than 2% in
the previous

Bell

of

$20,700,000,000
resulted
from large and divergent move¬
ments
among
the major assets.
Holdings of government securities

Expansion

of

Private

decline

gains in cash
holdings and in loans of all types,
were

except security loans.. Cash assets
up
$783,000,000
over
the
due chiefly to the reduction
of government security holdings,
together with the continued in¬
were

year,

flow of gold.

was

of

the

expansion

in de¬

in

the

individualsr partner¬




smaller government portfolio

$23,000,000 less in¬
a
further rise of
$15,900,000, or. 10%. in operating
expenses.
Although
the
banks
outside New York City reported
a
similar percentage increase in
operating expenses and suffered
and

come,

a

decline

by

of

11%

in

interest

interest and discount

annual

average

loans

these

at

loans.

on

return

banks

was

on

in¬

only slightly to 3.99%. In
the
New
York
City
experienced a sharp rise in

contrast,
banks

'

In

the

i

■

'■

aggregate,

result

of

the

loans

remarkable

ropean

disbursements

stock

>

the

"JOHN W,

realization

were
as

rise

the
of

$805,000,000 during the last half

of

.

SNYDER,

y
"Chairman
"National Advisory

-

on

j

Council

"on

increased

were

Eu¬

"Sincerely yours,

■

Dividend

the

under

objectives.

7.7%.

common

with

interfere
its

aid

to

Recovery Program might

"International Monetary and
"Financial Problems"

moderately to $55,800,000 in 1947

compared with $53,900,000 in 1946.
Such dividends were
clared

by

paid

of the

86%

or

de¬

Firm Name Now Marliti-

banks in

operation at the end of the year.

Holloway-Belcher

mmmmmmrnr"

KANSAS

Fairman & Co. Adds
.

(Special

Financial

The

Abels has

been added

staff of Fairman &
Seventh
Los

Street,

of

MO.

Hoyt

Fidelity Building, and the firm's
name

has been changed to

Martin-

Holloway-Belcher. All other per-

the

Angeles Stock Exchange.

—

partner¬

ship in Martin-Holloway-Purcell,

to the

Co., 210 West

members

CITY,

Purcell has retired from

Chronicle)

ANGELES, CALIF.—John

LOS

C.

to

' sonnel

is the same.

1.88% to 2.15%, as they continued
to

Teplace

loans

low-vielding security
higher-yielding loans

with

business

to

market

and

individuals

characterized

by

in

a

moder¬

ately higher interest rates.
Diminished
ment

holdings of

securities reduced

.Newport News
Shipbuilding and Dry Dock Company
i

Statement of Cost of Work Performed
and the Years Ended December

govern¬
the pro¬
-

on

such securities to

39%,

compared with the peak of 50%
reported in 1945. As a result of
the

slight firming of rates and
longer average maturities, the up¬

ward trend

rate

of

in the average annual
continued in both

return
■

joi

banks,

rising

-

Years Ended

Thirteen Wefeks Ended

December

portion of earnings derived from
interest

During the Thirteen Weeks

31, 1947 and December 31, 1946

New Ship Construction

$

December

>■

-31, 1946

31, 1947

$

2,628,000

December

December

31, 1946

31, 1947

7,319,000

$15,681,000

$32,765,000

7,499,000

32,701,000

14,872,000

Ship Repairs and Recon¬

13,034,000

version •

Hydraulic

Turbines and

Accessories and
Work

Totals

Other

3,338,000

1,189,000

7,087,000

4,863,000;

$19,000,000

$16,007,000

$55,469,000

$52,500,000

from

1.35% in 1946 to 1.41% in 1947 in

Increased

$729,000,000 higher, largely

in

the average return on loans from

groups

•

requisite

year kept pace
deposits, leaving
the
ratio of capital to
deposits
unchanged at 9.7%. Outside New
York City, where deposits grew
only about half as rapidly as capi¬
tal, the ratio increased slightly to

rise

the

on

government securities, these fac¬
tors were fully offset by the im¬
provement
in; other
operating
earnings, chiefly a rise of 37%

;

..

Deposits

The most striking change

a

reduced

$1,200,000,000, part¬
ly as a result of the debt retire¬
ment program and partly as a re¬
sult of sajes. More than offsetting
this

more

was

creased

gate

were

income

which yielded

The

by. less

'1

:

of

latter

grew

loan

than offset by the combined effect

in

Loans

deposits

com¬

000 000 in total assets to an aggre¬
v..

rise of $1,200,000,000 in other than Treasury
deposits in the last quarter, total
deposits at these banks increased
$386,000,000 in 1947 to $18,700,000,000. Balances maintained by
the Treasury were reduced $303,000,000 and, at the end of the
year, amounted to only $184,000,-

posits

as

pointed out that the
relatively small increase of $411,-

sources,

r/';. I n f 1 U enced mainly by a

offset

rose

1947,

in

ment

pared with 9% in 1946, while the

Mr.

posits and re¬

in

both private
deposits in¬

year.

de¬

of

course

time

the
rate
of
slackened materially; the

contrast

determine the

000

discount

However, the $11,100,000 improve¬

spite of lower Treasury balances, reduced holdings of United
States obligations, and the further liquidation of loans secured by
these obligations, total deposits and resources at New York State
chartered commercial banks and trust companies increased during

was

and

interest

ships and corporations.

:

In

capital in the

with

New
to

York City, and from
1.66% elsewhere.

Taxes

on

1.59%

net income absorbed

$30,400,000 of net profits in 1947,

By Order of the Board of Directors
R.
February 25, 1948

I. FLETCHER
yice-President and Comptroller

\

22

(1014)

THE COMMERCIAL

DoMont Laboratories

Pennsylvania Brevities

Portsmouth Steel Corporation
Central Illinois Public Serv. Co.
Buffalo Bolt
Data

Company

The

BUCKLEY BROTHERS
Members New York, Philadelphia and
Lot Angeles Stock Exchanges

Los Angeles

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

Wire System between

Philadelphia, New York

presage

and Los Angeles

Land

2039, Pfd. & Common

Bank

Philadelphia 2

Phlla. Phone

New York Phone

Locust 7-1477

WHitehall 4-2400

Teletype PH 257

on

commodity price drop may
intensity of the demand
wage increases based
rising living costs. To this ex¬
future

this

price
helpful. I

for

ness

decline

be
particu¬
may

not

am

this

The
the

outlook

first

If there is

for

busi¬

months

six

continues to

year

be

of

excel¬

recession in

any

portance and of very short dura¬
tion."

Corn

E.

Williams,

&

Co.—"Price

drops should
have a salutary effect on business
and be healthy for our economic
future.
Many factors have con¬
to

the

current

commodity

recession

prices,

including
Washington,
large surpluses of grain held by
farmers the

feeling

Nazareth Cement
Warner Company

hap-

oened so far has done little

more

blunt

Exchange Bldg. Phila. 2

Telephone

Teletype

RIttenhouse 6-3717

PH 73

Cambridge Bldg. 3s 1953
1500 Walnut St. 6-1950
1900 Rittenhouse

Phila.

Sq. 5V2-1950

Transportation Issues

Lehigh Valley RR. Annuity 4%
Hershey Creamery Com.

Philadelphia

Packard Bldg.,

Stock

Philadelphia 2

Teletype
PH

Exchange

N. Y. Phone

375

COrtlandt

7-6814

of

in¬

adjustment period; it is a
different phase of an adjustment
that has been going on for some
time. A turning point had to come.
If this is it, as seems
likely, we
can
all be glad that it was not
delayed any longer."
M.

Albert

Provident

Linton,

Mutual

would

great

money

that of

Life

the

of
be

can

its

the
no

supply,

almost

five

1920, together with

be

likely

to

provide

drastic

too

or

prolonged

Frederic

A.

have

may

see

prolonged

a

it

might

readjustment

possibility of

any

I

rather

set-back, although

a

be

in

severe

certain

will be followed by a re¬
to a high level of produc¬

areas,

vival

'■

V'

*

*

*

.

long

run

be

a

healthful develop¬

gas

net

*

totaled

income

*

*

some

of quality
smaller than in
years, dollar vol¬

pre-war

of

ume

sales

were

Roberts

&

Mander

1947, was the largest in company's
history,
according to Henry S.
Minster,
President.
Production

is

lent to $5.28 per common share,
with
$14,726,551, or

of

$4.17

by relatively high prices obtained

share

per

>*

the

on

%

next three years

somewhat

was

stock

*

sheet

steel

curtailed

but

for

ranges

Net

profit for the

292,'

Hajoca Corp.

share

in

this

the

de

by

luxe

class.

year was

$208,-

equivalent to 63 cents
on 329,446 shares of $1

Building
9

PHILADELPHIA
Telephones:

Higher Fares Protested

is forecast.

a

reported for 1946. Per share

ings in 1947
shares

$13.20

earn¬

on

115,-

outstanding,

com-

were

now

Harrisburg — State Secretary of
Banking D. Emmert Brumbaugh
last week charged that the Bank
Holding Company Bill, now be¬

last month.

The

:v-'

petition stated that, besides
23)

page

on

fore

the

U.

the

Western Pennsylvania

PENNSYLVANIA

Issues

MUNICIPAL

S.

Senate, "either in
or unintelligently
dangerous and flag¬

deadly earnest
is

Trading Department Active in

most

Direct Wire to New York City

BONDS

rant

attempt yet seen to super¬
impose control by the Federal
Government
ments

in

State

over

govern¬

the i, regulation

supervision

of

,
and
chartered

State

banking institutions."
Speaking
meeting

the

annual

5,

Penna.

Group

.v

♦

COMPANY

and

Members

N. Y. Stock Exch.

Pitts. Stock

Exch.

ASPOEN, ROBINSON & CO.

New York Curb Exch. (Assoc.)

10th Floor,

Peoples Bk. Bldf.

61 Broadway

PITTSBURGH 22, PA.

before

of

CHAPLIN

Members

NEW TORK, N. T.

Grant 3900

Philadelphia

1421

Bowline Green 9-3987

Bell System Teletype—PG

baugh said: "I cannot

escape

Stock

Chestnut

Exchange

Street

Philadelphia 2

4V3

RIttenhouse 6-8189

Teletype PH 313

Bankers Association, Mr. Brara-

the

conclusion that the Bank Hold¬

ing

Company

Bill

has

real purpose, not the

of

concentration

in

the

for

its

and

economic

of

hands

of

rela¬

a

individuals, but the highest

concentration of economic
er

in

Public Utility—Railroad—Industrial

prevention

SECURITIES
New

and

tralization

Line Stocks

pow¬

of

through

the

control

of

"I submit to

tempt to
Federal

by their
a

State

Equipment Trust Obligations

•

cen¬

Charles A. Taggart & Co., Inc.
Members

Philadelphia Stock Exchange

Investment Securities
1500 Walnut Street, Philadelphia 2, Pa.

you," he said, "that
Phone

KIngsley 5-1716

Dime

Building, Allentown, Pa.

Teletype—PH 677

law that will force

supervision

chartered

Electronic

prac¬

to be un-American to at¬
pass a

•

Guaranteed and Leased

Bank and Insurance Stocks

tically all banking systems, such
control
to
be
lodged in
the

seems

Television Securities •

hands of the Federal

the

Government

it

Jersey and General Market Municipal Bonds

banks

State-

on

whose

officials,

very action in choosing
charter, gave clear and

A

American Meter

Continuing Interest in:

Co.

Southern Advance Bag & Paper Co.

Corporation

Talon, Inc.

■

Valuation and Appraisal

Cannon Mills, Inc. Class "B"

■

Central Soya Co. Inc.

Teletype—PH

Valuation and

299

"Atlantic City Elec. Com.
Harshaw Chemical Com.
•Nor. Ind. Pub. Serv. Com.

Members

1606

Price-Earnings Ratios and Yields
123 Public

Phila. Elec. Co. Common
Richmond Cedar Wks. Com.

on

Request

New

Walnut

E. H. Rollins & Sons

York

&

Co.

Curb

Exchange

(Associate)

on

This announcement

of

.

is

an

neither

Bell System Teletype PH 30

an

offer to sell,

solicitation

nor a

offer to buy these shares.

Frigidinncrs, Inc.

*

Common
■

STROUD & COMPANY

-i

($2.00

Price

Par

Stock
Value)

$2 Per Share

,

Incorporated
123 SO. BROAD STREET

120 BROADWAY

PHILADELPHIA 9, PA.

NEW YORK 5, N. Y.

Incorporated

PEnnypacker

5-0100

1528 Walnut St.,
Philadelphia 2
New

York

*

Boston

Chicago

San Francisco




PEnnypacker 5-7330
Allentown

Woodcock, McLear & Co.

REctor 2-6528-29

1518

Pittsburgh

Lancaster

;>

Street, Philadelphia 3, Pa.

New York Telephone—COrtlandt 7-1202

prospectus

Bought—Sold—Quoted

1914

Philadelphia Stock Exchange

Telephone PEnnypacker 5-8200

Utility Common Stocks.
Copies

Roberts & Mander Common
only by

ESTABLISHED

i

Appraisal

CITY OF PHILADELPHIA BONDS

*Offered

•

Members

5-4646
New York— HAnover
2-9369

System

*

Boenning

RAILROAD EQUIPMENT CERTIFICATES

Philadelphia—PEnnypacker
Bell

per

par

common.

Available Publications

Trust

lack
offset

was

The
City of Philadelphia has
continuing high
formally protested to the Public
demand
for
its
products, sales
Utilities Commission against the
reached a new high of $32,300,000,
higher
fare
schedule
filed
by
a gain of 39% over the
$23,100,000
Philadelphia
Transportation
Co.

Sustaining by

Grinneli

Dolphin & Co.

Corp.

fiscal year ended Nov. 30,

(Continued

Municipal Bonds

Fidelity Philadelphia

for

distribu¬

stock

unit

ranges

for the

$24,339,912, equiva¬

as

dividends

the

Although

the

records for motor

Consolidated

reported

plus

.

eral Reserve System.

in
commodity
moderate recession

sales

Cash

$4.25,

1946.

year

all

share

per

Bank Bill Assailed

from
the point of
business, industry and the
general economic picture."

a

in

stills exceeded

fuel and lubricants.

121

tion."

view of

decline

broke

$35

right to

additional

Roberts & Mander Corp.

of 1945 by almost
million barrels.
Company also
war

the

tion.

Corp., reports new high records in
sales and profits achieved in 1947.
Moreover, good business for the

hoard of governors of the Fed¬

business activity would in the

than

more

to

ber.

of

President

constructive

prices and

peak

14%
runs

at

of¬

company

one

10 shares held, and paid a

company

barrels

W. A. Brecht, President Hajoca

depression.

believe that

goods, it is
hard to believe that a long-lived
adjustment period is to be antici¬
pated. On the whole I think the
price drop will prove to have been

in

Crude

decline

a

Potts,

further

but I do not

capital

Co.—"The

a

Philadelphia National Bank—"We

latent demand for semi-

Trust

crude,

million

to

1

the

year

33

activity in

tively few private corporations

Provident

the.

prevent too

in prices and business
the near future."

President

Presi¬

During

the

year

50% stock dividend in Decem¬

•

outstanding at the end of 1946.

goods,

Insurance

Mitchell,

1947.

2

each

in

records

new

would

cushion which would

power

K.

reports

produced

on
the 69,873
in 1946..

stockholders

common

production, refinery out¬
marketing operations for

compared

Co.—"My feeling is that the break
prices was a healthy develop¬
helped to relieve infla¬
tionary pressures. In view of the

R.

Co.,

crude oil

$16.06

subscribe

President, Sun

the substantial unsatisfied demand
for capital and consumer

ment and

and

Last

fered

report

Robert G. Dunlop,
Oil

with

*

signed by Joseph
N. Pew, Jr., board
chairman, and

intelligent guess. It
however, that the

an

seem,

times

time

of

and

economy

this

at

than

more

extent

price decline
the

on

country

the

in

dent

Jersey

recent

an>

current

and New

the

pressures

William

Pennsylvania

of

still remaining, the
drop that has been taking place
is good news. This is not the start

ary

durable

Members

peak of the price

flationary trend and of inflation¬

enormous

Samuel K. Phillips & Co.

the

In view

curve.

Byllesby ft Company

Co.—"What

has

than

PHILADELPHIA OFFICE

a

to

as

commodity
effect

time, and

on

Insurance

Stock

same

William
W. Bodine, Financial
Vice-President, Penn Mutual Life

Pittsburgh Rys. Co.

of this
continuation of

economy

strong

of which found

the part of the public
that lower prices should prevail."
a

Sterling Motor Truck

H. M.

bulk

the market at the

Empire Southern Gas

the

since

country
the

President

Exchange National Bank

Trust

tributed

Empire Steel Co.

for

forecast

Co.—

its

put and

for

Trust

"The

in

Botany Mills

a

a

lessen the

&

discussions from

American Box Board

long-lived
healthy sign of corrective
or

inflationary
factors
would ultimately lead to a far
more
serious
adjustment.
Any

David

H.N.NASH&CO.

shares outstanding

supervision."

*

New Records for Sun Oil

normal^—

a

the last half, I do not think it will
be more than one of minor im¬

Philadelphia Transportation Co.

Street,

be termed

recession

ment

Title

lent.

Stocks

Chestnut

functioning in

recession.

Bank & Insurance

pared

Federal

want

In

Philadelphia bankers
break in commodity prices

business

larly concerned about the drop in
the prices of grains
indicating the
beginning of any major business

Philadelphia

unmistakable notice that they did
*

prominent

abrupt

manner.

very

1421

of

imminent

an

depression, but that it should

tent

3-6s

opinion

be that last month's

Percy C. Madeira, Jr., President

Walnut Street, Philadelphia 2

New York

not

influence

Also Member oj
York Curb Exchange

New

1420

of

consensus

to

appears

does

Thursday, March 4, 1948

not

Fhiladelphians View Market Break

Request

on

CHRONICLE

FINANCIAL

&

Scranton

January

7,

1948

WALNUT

ST., PHILADELPHIA 2

Volume 167

Number 4678

Pennsylvania Brevities
(Continued from page 22)

.

being

"unreasonable,"

pany's

demand

subway
to

forms

that

the

fare

"substantially
cost of

com¬

might cut down
by driving riders
of transportation

revenue

other

and

the

boost

increase

would

the

high

living of the riders."

Early

last

month,

pany averted

com¬

over-all wage

an

increase of approximately
15%.
This, the company estimates, in¬
creased

the

cost

9.328

cents

bus,

trolley

to

ride

per

10.648

and

cents

on

PHILADELPHIA,

PA.—At its
annual election March 1, members
of
the
Philadelphia Stock Ex¬
change elected William K. Bar¬

Baker,
Baker, Weeks
&

Of

13

rate.

paying

raised

13

to

tokens for

Mayor

But

10

cents

be

would

cash

two

or

ments:.

"I

through

economies

am

com¬

hopeful
not

that

affecting

riders, the Philadel¬
phia Transportation Co. can con¬
tinue to

car

operate efficiently with¬

out fare increases."
*

*

*

Follansbee Expands

Pittsburgh — Follansbee Steel
Corp. has acquired a controlling
interest in Federal Enameling &
Stamping Co., McKees Hocks, Pa.
manufacturer

of

enameled

ware

and

other domestic utensils.

eral

uses

cold rolled sheet steel of

Which Follansbee is
The

Fed¬

agreement

acquisition

by

a

supplier.'

calls

for

the

Follansbee

of

or

shares will be acquired through
the exchange of five shares of
Follansbee
Federal.

for

As

be

Bank

The

the

stock

by

Union

of

of

Follansbee

increased

shares.

share

result

a

transaction,
will

each

38,285

National

of

ance

the

cash

required

was

advanced from the corporation's

funds.

own

American

ing

to

held

be

Glass

stockholders of American Window

K.

lips

Glass Co. will be asked to approve

of

man

the

board,

K.

The

Co.

Wm.

Phil¬

K.

Barclay, Jr.

•

i ■

■

&

Crouter & Bodine.

The

title

1

tion

as

•

of banking and industrial
affairs, the Committee is looking

forward to
number

Wisconsin

tains

first

The

its bid

on

Proceeds
from

from

the

sale

of

the

with

proceeds
company's1 recent sale

of

$3,000,000
4.80%
preferred
stock, are to be applied towards
the company's construction
pro¬

gram.

Wisconsin Power and Light Co.
is

engaged principally in supply¬
ing electric energy and manufac¬

tured gas

in central and southern
The

territory has
population of close

the

around

cities

Fond

an

to

of

Sheboygan

du

Lac,
Beloit ■ and
Janesville, Beaver Dam and Por¬
tage. ' '
For

the

12

fraud* £nd usury in the
operation
of a scheme to
get around the
Federal
ments

Reserve

on

tions.

injunction order by
Supreme Court Justice Pecora has
been
issued
against Gordon B.
Todd, head of Gordon B. Todd &

Co., 25 Broad Street, New York
City, reputedly a dealer in puts
and

calls, and five other men,
straining them from dealing

15

why

should
trial

the

not

for

collateral.

be

5%

and central

ex¬

to 40%

6%

the

changed for one share

new

preferred,

one new

$20, and

par

common,

par

common,

par

converted

$1.
The present
$12.50, would be

into

new

common

share for share.

Frigidinners, Inc. Common
Put

the

on

Stock

Market

Recently Woodcock,

McLear

&

Co. of Philadelphia, Pa., made the
initial public
offering of Frig¬

idinners, Inc. Common Stock. The
stock is priced at $2 per share less
24 cents dealer's compensation.
Frigidinners, a local Philadel¬
phia Company, is primarily in the
precooked quick frozen food busi¬
ness.

It is believed to be the only

heating service.
in

company

ated

in

plants.
Sept.

Close

of the power produced by
its

For the

30,

1946

own

12

was

gener¬

two

raw

meat

items—minute steaks and

company

at

may

the

redeem

price of 105.50% in
1948, the premium reducing an¬
nually thereafter.

FIG Banks Place Debs.

$77,080,000

debentures
due

was

placed

ucts.

ceeds,
retire

The business of the company

is

paid

secur¬

Todd

&

cash

or

was

re¬

profit—and, of
loss—but he also

any

any

required to

1.55%

dated

Dec.

at

1,

consolidated

March

1, 1948
The issue

1948.
Of the

par.

$38,510,000
a

gar

co-defendants

as

Ed¬

B. Hunt and Clifford J. Pough.

These three

with
in

are

men

also

charged
failing to register as dealers
are

securities.

Customers'

Attorney General
ited

and

as

handled

by the

having solic¬

Todd's

was

pro¬

used

to

like amount of debentures

maturing March 1 and the Balance

General's

the

Adee
New

Another
is

investigation by Mal& Co., a member of

York

Stock

customer's

Exchange.
accused

man

Gerald

Monahan, employed by
Joseph Faroll & Co., also a mem¬
ber

of

the

New

York

Stock

announced

it

had

on

suspended

license of Mr. Monahan
tomer's
of the

March 1

as

a

the
cus¬

man

pending the outcome
hearings in the matter.

As the firm of

Mallory, Adee &

rently.

was

.




-

;

.

that

boom

the

amounted to

$404,490,000/

Co.

dispensed sometime

taken

ip their

ago

cases.

is

similar

to

1920, there are striking
The backlog of de¬

of

differences.
mand
tion

is

more

as our

last

participa¬
over

was

war

a

The farm¬
much stronger posi¬

extended period.
in

are

ers

greater
the

in

a

while at the
extensive

govern¬

support

at around 90% of
parity to the end of this year. In¬
stead of allowing nature to take
its course, as was true in the 192021 period, the government would
in the

event of a business reces¬

same

there

time

are

programs

the like.

to

Furthermore, the
is
committed
to

ade¬

no

"Regardless of what the imme¬
diate business trend may be, the
sharp break in farm commodity
prices should be considered as a
warning signal that the boom la
in a 'frothy' stage and is there¬
fore in the 'danger zone.'
It is
time to

prices

another,

for the de¬
velopment of new lands through
irrigation, the selection of better
seeds, increased use of fertilizer,

savings considerably higher than
after the end of the first World

farm

after

downward.

is

after trying one

years,

the
problem
created
by oversupply because there has always
expediency
brought on by pressure groups
aided and abetted by politicians.
Many tirpes government agencies
work at cross purposes, such as
advocating a reduction in acreage,

tion, with debts much lower and

War.

con¬

been resort to political

and

"While

'stop, look, and listen,' for

ride

the

of

crest

the

boom

is

to be

caught in the undertow.
"Based upon all recorded his¬
tory, booms come to an end and
adjustments follow. There is no
reason to expect that natural laws
will not again take charge and

bring about
tions

to

some

bring

our

needed correc¬
economy into

better balance."

Nat'l City-Chase

Bank Syndicate Market Issue q
$300,000,000 State of N, Y. Bonus Bonds
City Bank of New York and The Chase National

The National

nationwide group which on March 2 won the award of

Bank head a

State of New York War Bonus Serial Bonds at a net
Due serially Jan. 1, 1949 to 1958, inclusive,

$300 000,000

interest cost of 1.79375.

bonds

the

pub-^>-

re-offered

were

licly at prices to yield from 0.90%
to 1.85%, according to maturity.
Bonds, due 1949-1952

$180 million 1%% Bonds, due

and

1953-1958.

proceeds of the issue will
applied to payment of the

bonus to New York State veterans
of World War

thorized

with

II, which was au¬

popular vote in the
Bonus payments

by

election.

1947

began in January from funds re¬

$100,000,000 one-year

ceived from
notes.

.'

There

will

Bonds

to

according

other

:

no

Jan.

1948,

Comptroller

State

Interest

Also, no housing

the Bonds is exempt

on

income

taxes, and the Bonds

as

in

legal

banks

the

investments for

savings
in

funds

trust

and

are

opinion,

group's

New

York, Massachusetts, Connecticut
and certain other states.

acceptable
York

as

to

to

the

security

the

to ~ the

of New

de¬

State

for

Superintendent of

Insurance to secure
and

They ar&

State

policyholders,

of

Superintendent
Banks

and

With Hugh W. Long &

Co*

Banks

in

trust

for

Trust Companies.

bond'financing is plan¬

ned within the next
All

additional

issued during

interest date there¬

any

from Federal and New York State

posits,

be

Frank C. Moore.
or

or

after.

eligible,

The
be

1956

bid par for the $120

The group

Bonus

Exchange

mar¬

values

the

measure

kets.

Ex¬

change.
The Stock

price

a

orders

William A. Hagerty and John
Murray, employed during the
period covered b,y the Attorney

lory,

lower

clear the

at

to

order

in

result of these

a

quate solution has been found to

demand is perhaps the
on
record but it needs

million 2%

*

accused

men

the services of William A. Hagerty
and John F. Murray, no action

.

Over

no

satisfied

be

Todd & Co.

pay

growing so rapidly that additional of $38,570,000 was new money. As
working capital became a neces¬ of March 1, 1948 the total amount
sity.
This is being raised cur¬ of
debentures
outstanding
-

to

level

As

land

and

a

are

are an

of

week

a

F.

of

There

pent-up
greatest

are

and

supply of these two prod¬

B.

furnishing

received

named

a

National chain food

entire

and

was

$3,905,915; maximum annual in¬
terest
requirements
on
funded
debt outstanding after this financ¬
ing will total $1,124,750.
The

current

healthier posi¬
prospects that
any decline in business would re¬
peat
the
trend
following
the
crash of 1929, as the business pat¬
tern is entirely different.
In the
earlier period business had ex¬
hausted the
backlog of demand
in

economy

were

stores and super markets take the

patties.

listed

The purchaser
quired to sell out within

months

New York, fiscal agent for the
plates to the major air-lines.
In addition to the pre-cooked banks.
The financing, consisted

foods, the company also processes

of any

Gordon

without

course,

that carries a complete
A successful offering of an is¬
line, consisting of 16 varieties of
prepared dinners, and is also the sue of debentures for the Federal
only company that sells frozen Intermediate Credit Banks was
dinners in disposable aluminum made Feb. 18
by Charles H. Dunn,
company

blocks

through

gross
operating 6% interest on the money ad¬
reported
to
be vanced for each 100 shares plus
$16,186,035
and
gross
income, a $25-a-week "service charge" on
available for interest, but after each 100-share block.
depreciation and all taxes, was
Associates of Gordon B. Todd

bonds

a

1947,

revenues

the

of

end

Subsequent readjustments
moderate scale would place

boom.

ment

eral, the accused offered investors
the
opportunity of buying 100share

hydro-electric
ended

permanent writ.

.According to the Attorney Gen¬

ity

Glass

in

restraining
order
continued pending

be

a

Co.

$25,

re¬

securities. The injunction requires
the men to show cause by March

remainder from the sale of water

derived

company

margin require¬
exchange transac¬

stock

An

7.5% from the sale of gas and the

Window

extent by non-agricul¬
commodities, and this would

the

consequence

source

ditions, agriculture in more nor¬
mal times is subject to chronic
surpluses.
It would appear that
the peak of the agricultural boom
has
been
passed and that the
trend of farm commodity prices

L.
Goldstein, New inherited from the first World
Attorney General, ob¬ War and was riding along on bor¬
tained on March 1 an
injunction rowed money, which 'gave out.
against six
men,
charged with Now,
on
the other
hand, the

months ended Sept.

the

demand.

Nathaniel

parent company.

1947,

fall

for

York State

together
the

avoid Fed¬

to

eral Reserve margin
requirements

grouo

102.01%. y,/v

bonds,

operating scheme

group

outlook

the

lesser

tion.

against

to

decline which would be shared to

signal

Usury

injunction

has

Prospects
are
that
if
bumper crops should materialize
here
and
abroad,
farm
prices
would
undergo a further sharp

on

in

and

demand for
industrial
products.
Agriculture
as an industry is handicapped bylack of control over production
because
of
the
important part,
played by the weather. On the
other hand, consumption of most
agricultural products is quite in¬
elastic, with the consequence that
even
a
drastic decline in prices'
does
not
appreciably
stimulate

crops.

tural

N. Y. State Attorney General ob¬

about 90.7% of its operating reve¬
nue
from the sale of
electricity,

par

unprecedented large

Fraud and

30,

present

an

of

guests.
Guest tickets
are available from Mr.
G. S. Currie, Crouse & Co., RA. 8670.

offered

interest.

largely

commodity
about 10%

edge

look."

our

Co. and The Illinois

March

on

of farm

Because of the prominence of
the speaker and his broad
knowl¬

Prentiss M. Brown

Five Others Accused of

Halsey, Stuart & Co. Inc., Wil¬

be

on

important

prices

is:

Out¬

Products, Inc. The merger would
a
recapitalization of the

of

farm
prices
again to the

About 19% of our

re¬

declined
mid-January peak. It is
possible that prices of agricul¬
tural products will fluctuate with¬
in a comparatively narrow range
pending more definite clarifica¬

talk

a

liam Blair &

would

index

"The

Gordon B. Todd and

Halsey, Stuart Group
Offers Utility Bonds

so

the

his

involve

preferred,

in

once

problems of the farmer.
Agriculture constitutes a signifi¬
cant
segment
of our economy.

sharp decline because
that crop conditions
improved indicated that
a

report,

from

of

"The

its wholly owned subsidiary, Glass

It is proposed that each share

decline

attention

chronic

met.

Detroit Edison

Co.;
Harry MacDonald, Bioren & Co.;
H. Gates Lloyd, Drexel &
Co.;
Frank E. Baker, Baker, Weeks &
Hardin; George W. Elkins, Jr., Elkins, Morris & Co.; Herbert T.
Greenwood, H. T, Greenwood &
Co., and William DeHaven Townsend,
DeHaven
&
Townsend,

the merger of their company with

un¬

come

Samuel

and

prices, led by grain,

requirements

seven-

board:

450,000 and is centered principally

special meet¬
here April 27,

a

"The

calls

<

population live
farms, while farmers now re¬
ceive about 15% of national in¬

❖

Window

ex¬

lieved and apparently world food

estimated

Pittsburgh—At

the

pact.

pre¬

run

had

Wisconsin.
sit

%

long

the acute food crisis had been

of

Pittsburgh has loaned
Follansbee $2,500,000. The bal¬

the

short-term political

'

;

sion step into the breach and pro¬
vide cushions to soften the im¬

be Prentiss M.

the

of

in

by^

demon¬

economic

Brown, Chair¬

awarded the bonds

51%,

is

elected

was

for

cash

of Federal. The remaining 7,657

vulnerable lush

a

supported by stilts.

economy

speaker will

accrued

$3,490,560 in
20,556 shares,

in

are

following

man

Co.

it

relentless

pediency.

Governors

the

and

paid

the

will

over

derwent

Follansbee

of out¬

vail

supported

again

that

Room at 6 p.m.
The guest

serve'

$3,000,000
Power and Light Co.
mortgage bonds, series B
3V8%, due Jan. 1, 1978, at 102.46%

than 70%

more

7

Once

Board

standing Federal stock, amount¬
ing to 28,213 shares. On Feb. 18,

slightly

forces

stilts.

'Farm

uel

Samuel

Statler,

at

Warning Signal

a
we

bloated and distorted

a

economy

strated

Bagley

the

to

torted

Cocktails

says

23

"The dramatic break in farm commodity prices is a warning
signal that the boom is highly vulnerable," says The First National
Bank of Boston in its current "New England Letter."
Continuing
the Bank says, "We are in a lush period, with the bloated and dis¬

Wayne
Room, Ho'tel

in

Phillips, Sam¬

quarter.

a

Bernard

service to

passengers

cents

held

the

will be served

nom¬

inees to
on

dinner
be

Commodity Break

period, with

Thursday,

—

(1015)

First National Bank of Boston

4

Thirty-second Annual Dinner.

p.m.

Hardin.

were

now

in

E.

MICH.

Holds

1948, is the date chosen
by the Bond Club of Detroit for
its

will

succeed Frank

place the

35-cents

CHRONICLE

March 4,

The

Boyce,
President,
to

of

present 4-tokens-for-

DETROIT,

clay, Jr., Stein

yated lines. The company seeks
straight 10-cent fare to re¬

a

FINANCIAL

Exchange Bond Club of Delroit
Annual Dinner March
Barclay Pres.

Elects

from

subway-ele-

&

Phila. Stock

Bros. &

strike by grant¬

a

ing employees

the

THE COMMERCIAL

the

Bonds

six months.
maturing

on

1, 1958 may be redeemed, at

"option, at

the

State's

and

accrued

interest

par
on

value

Jan.

1,

DALLAS,
Frank

is

TEXAS —Robert

representing

Hugh

G.

W.

Long & Co.. of New York from of¬
fices at 2704 Llewellyn Street.

24

THE COMMERCIAL

(1016)

CHRONICLE

FINANCIAL

&

Reporter

By JOHN T. CHIPPENDALE, JK.

Part of $50 million

buoyant tone continues in the government securities markets,
in spite of increased reserve requirements for banks in New York

City and Chicago and the tightening of the

markets through
redemptions of Federal-owned debt.
Income tax payment
the middle of the month should restrict the picture somewhat fur¬
ther.
Nevertheless, demand for both the taxable and partiallyexempt eligibles is enlarging with lengthening of maturities gain¬
ing some additional followers, because institutions are finding out
.

.

pending

authorized to
sulphate plant

money

.

.

finance ammonium

in Wash¬

The Mexican Embassy

.

Export-Import

the

and

ington

announced

Bank

on

that

Feb. 26

.

the Board of Directors of the Bank

-

that the income from bills and certificates is not quite large enough
to

meet

to

in

in the

expenses

the past.

in which they have been accustomed

way

...

The

though

demand

it

has

for

not

tap

yet

bonds

reached

shown

has

betterment,

some

proportions that

be

can

sizable

al¬

considered

enough to indicate a reversal of the trend.
If has been,
however, on occasions sufficient to move prices a thirty-second or
so
above pegged
prices, which is definitely an improvement in
.

.

market

action

of

these

securities.

flat

last

.

their back at

on

year.

.

.

The 2Vzs

.

.

Despite
the

increased

demand

especially
pointed

for

ketwise
Also

the

that

government

the

although

the

they

eligible

floating

.

.

municipal

and

Treasuries

the

partials

have

done

of the

protected

considerably

taxable issues

supply

not

are

that

exempts

better

by

mar-

"pegged."

are

.

.

.

is

to extend credits

to

proved

by

aggregating $50,-

finance

projects ap¬
Mexican Govern¬

the

proposed

ammonium

sul¬

the

over

remaining blocked assets will be transferred from Foreign
in
the
Treasury<$>Department to the Office of Alien the
beneficial
owner.
Assets,
Property in the Department of either before or after vesting, may
Justice.
Attorney General Clark be released upon a showing of
joined Secretary Snyder in urging non-enemy
interest.
In
such
Funds

Control

that persons whose assets may be
unblocked under the certification

cases,

procedure provided by Treasury's

ment of the

General

License

themselves of
fore June 1,

changes in the as¬
sets will become inoperative.
The
Attorney General stated
immediately
upon
transfer
he
will

take

of

last

made

the

year

in

the

greatest

progress

the

on

up¬

2%%'due

1956/59, followed by the
due 1955/60, and the 2%% due 1958/63.
* .

2'/h%

.

countries

nancial

aid

The fact that the 2%% due 1960/65 have not shared in the
price

year)

is

partially-exempts (since the end of last
buyers into the most distant maturity of

bringing

now

these

securities.

2%%

due

.

.

1960/65

The

.

tax-free

makes

yield

this issue

that

is

available
than

attractive

more

in

the

the

other

longer maturities of the partially-exempts, in the opinion of many
followers of the government bond market.
As a result switches
.

.

.

being recommended and made from the other partially-exempt
as the taxable
eligibles into the 2%% due 1960/65.

are

well

as

.

,

.

BANK BUYING
The

2V4S

due

1956/59

coming

are

for

in

buying from
outlying ar^as, with

mercial

banks, especially those in the
institutions moving out of the 2%%
in order to reduce premiums.
It

of these

2y4s

...

desire

is

still

premium
income.

there

account

certain

among
low as

as

of

due

1956/58

seems

these

some

into

the

though
keep

as

banks

comv

the

to

the

possible, without sacrificing too much

...

Savings banks

to

be

taking
order

on

to

not

obtain

funds that have not been
working as effectively
have been in the recent past.
.

.

t

as

too

sizable

income

they might

million, of which

sets

be

ment, materials and services.

the

costs

zantes.

Plans

the

Treasury bonds took
with slightly more
holdings being liquidated during this period.
next with more than 12.0%
being sold while the
.

.

Minneapolis

and

Boston

districts

.

Kansas City
New

York

was

followed

area

.

.

with

somewhat in excess of 10% being
St. Louis showed liquidations
amounting to more
9.0%, with the Atlanta district selling more than 7.0% of their
holdings.
Philadelphia, Chicago and Cleveland followed with

disposed of.

.

.

.

than

.

.

.

decreases in

excess

of 5.0%.

,

.

Among the small sellers
mond

.

were

the

San

Francisco and

Rich¬

with disposals running just under the
4.0% mark.
sales of all districts took place in the Dallas
area, with eliminations
amounting to only slightly more than
2.0% of total positions in Treasury bonds.
.

.

areas,

The

.

smallest

...

the

of

estimates

is

to

operations for
than three
have

The plant is to

daily capacity of 200 short

a

tons

period of not less

a

years.

of

ammonium

sulphate,

which is to be produced from am¬
monia synthesized from natural

government

official support
time

in

suffered

another

withdrawn from the market.

was

two

bonds

months

that

levels

.

for

gas

raw sulphur.
The na¬
required wilLibe- ob¬

from

the

pipeline

a

Mexicanos is

will

census

new

governments of

which

In

addition, the Attorney Gen¬
stated

vent

the

that

escape

and

to

order

of

implement

Government's

countries

pre¬

assets

control

further

objective

which

to

enemy

Government's

this

from

in

to

this
assist

receive

financial

aid under the European

Recovery
of
Alien
after re-

Program,
Property,

.the
Office
immediately

©f the

information,
to process for vesting

-wjffi;begin

census

the assets remaining blocked and

J^leld

in

and Liechtenstein
The
vesting program

accounts.

will also be applied to

uncertified

assets held indirectly through re>-

cipient countries where the
sus

cen¬

information does not disclose

indjisjEiaL^q^;

Sulphur will be ©blamed

desulphurization

Petroleos

the

^

vby life companies,
•

-

,7

m
*

-

plant

Mexicanos

is

to

...

The

Canadian

situation

is,

however,

somewhat

different

from ours, since the banks there do
ment bonds

as

not own as many
do the institutions in the United States.
.

viduals

govern¬
.

Indi¬

.

basis

.

.

Accordingly,
to

cussions
.

.

lowering of government bond prices in Canada
probably not have as severe reper¬

below par levels would

even

level.

a

.

would

as
.

be

the

case

here

if

quotations

broke

the

100

.

.

.

grade bonds with buyers definitely
indicating

for high quality issues.




a

marked preference

General

residents

public

No.

give

to

notice

of

the action which will be taken by
the United States on June 1,1948,
and to urge their residents to ap¬
ply to them immediately for the

certification
in

of

United

the

qualify

for

in

sons

suggested

the United

held

assets

certification.

Snyder

tary

their

States if the

assets

Secre¬

that

per¬

States holding

blocked assets of foreign nationals

immediately inform such nation¬
als of the present announcement.

Treasury

officials ^stated

this announcement in

that

af¬
importation
of securities specified on the list

fects its control
attached

as a

ing

5.

No.

no

way

over

part of General Rul¬

Companies

tribution to the improvement and

expansion

mined tenants.

of

Dec.

Mexico's

agricul¬

many

cases,

With

31, 1949.

Nacional

per

un¬

The obligations

Financiera

in

evi¬

annum, will

be

uncon¬

ditionally

the

:

<

increased

activitv

this

type

nearly

of

companies

40

surveyed

in

investment

jn

owned

some

1947,

out of 130
non-hous¬

guaranteed
by
the
Mexican Government and will be

by

payable in not more than 20 semi¬
annual
installments
beginning

state to actually permit it by stat¬

June

permitting these investments

30, 1950.

the

nine

Weekly Firm Changes

all but

The legislation

Exchange
following firm

Powell

v

-

retired

r

from

partnership in J. H. Brooks & Co
Feb. 28.

V. Miller, special
withdew from Cohu &

29.

states took action,

and

permissive legislation was
adopted in 20 states.
investment

of

funds

in

non-housing rental properties is
a form of equity financing which
aids business just as effectively as
capital funds placed in securities,"
the Institute commented.
same

Raymond V.

seven

in 1947

#'The

Stock

,

partner,
Torrey on Feb.

companies in

today, while the first

ute did so in 1942.

when

New York Stock Exchange

R.

life

states

was
not extensively adopted until 1945.

The New York

<

Marking the first major development of a new type of financing
American business and industry, the life insurance companies
purchased $132,000,000 worth of non-housing
real estate for investment purposes, "bringing holding^ of this type to
$192 million at year end, the In-<§>
.'
stitute of Life Insurance reports.
business.
It involves long-term

new

on

License

requested

isting properties from the owneroccupants,
for
re-lease
to
the
occupants on -a long-term basis.
In some other cases, they have
been new properties or plant ex¬
pansion provided for predeter¬

Arthur

Whether the better tone in
corporates and municipals is helping
the government market, or vice
versa, appears to be a matter of
conjecture.
Nontheless, there is a growing demand for high-

their

in

being

are

developments

changes:

AT HOME

included

the transactions rep¬
resented outright purchase of ex^

sulphuric acid in
excess
of the amounts required
for ammonium sulphate produc¬
tion. The plant is intended to sup¬
ply Mexico's growing demand for*
nitrogenous fertilizers and is ex¬
pected to make a significant con¬

has announced "the

.

Recovery Program countri.es

pean

000 short tons of

.

.

.

governments of the Euro¬

fixed income."

per year,

also

bought large amounts of, Canadian Government
bonds during the war.
The problem of demand obligations
in Canada is not comparable to
that of the United States.

the

-

of this country last year

ments of this nature can be made

.

under

for

3%%

.

assistance

1947 at $122 million, bringing total holdings,
to $192 million.

ing real estate for rental purpose
at the close of the year.
Invest¬

.

The

Life Insurance

it will bear interest at the rate of

the

country which is to receive

a

Reports Increased Real Estate Investment by

monetary authorities in
Our neighbors
seem to be
doing the same thing that we did to prices
of Treasury securities here until
they reached levels that were con¬
sidered satisfactory for permanent
"pegs."
-

by

not

of operation 350
the plant will have
an annual production
The purchases were store office
capacity of
70,000 short tons of ammonium" and factory properties and were
sulphate and affproximately 17,- located from coast to coast.. In

days

of

to the north

concerning
certain
aspects of the program.
It was
pointed out that Switzerland is

Swiss

dence of advances under the cred¬

lower

years

vesting.

/institute of Life Insurance estimates non-housing real estate bought

vprior to transmission through the
pipeline.

This

have

of

General

two

Government

95

been

support
Canada.

within

Secretary Snyder added that
Treasury, Justice and State De¬
partment representatives are cur¬
rently
engaged
in
discussions
with representatives of the Swiss

as

appropriate countries. •>/••'

eral

Mexico:

supply of

the

On

names

nationals

such

by the
to the

given

now .con-:.

erect at Poza Rica to clean the gas

sinking
.

Attorney

after the date

from
the

to

sumers.

til

.

the

filed

sulphuric acid manufac¬

and

field

of

nationals

the

concerning

assets

have

continuing responsi¬
bility for final design, supervision
of plant construction and techni¬
cal
supervision
of
production

resident

their

as¬

(

internal

second

be

Fertili-

The credit will be available

Canadian
as

will

tural production.

CANADIANS WEAK

spell

well

ammonium sul¬
plant have been prepared
by Chemical Construction Cor¬
poration of New York City, which

which

.

in

cost

to

equip¬
as

phate

from

than 14.0% of their

required

Mexican

and

The

the proposed

for

lenders of funds.

From Nov. 5, 1947
through Feb. 18, 1948, member banks of the
Federal Reserve System sold 7.75% of their
total holdings of gov¬
ernment bonds.
The heaviest sellings of

is

of

as
working capital and
supplied
by Guanos y

structing

place

million

$4

ment, materials and labor

Selling of ineligibles by insurance companies and other inr
vestors appears to be drying up and the
tapering off of this liqui¬
dation by institutional holders of
tap issues is no doubt due in some
measure to the cautious attitude that
seems to be

LIQUIDATION

$6 million

European

Recovery Program in locating

will represent cost of U. S. equip¬

tained

among

in
be

European Recovery Program.

investment required to

Petroleos

appearing

fi¬

vested
must

that

out

of property

formation

total

tural

<

the

under

to

receive

pointed

was

The

tured from

on

decision

which

It

claims for the return

financial

gas

reported

are

amounts of the restricted issues in

assets

line with

In

Government's

assist

all

country of which the
alleged beneficial owner is a resi¬

dent.

held in the United States, the in¬

cover

rise of the other longer-term

of

census

the Office of Alien Prop¬
erty will consult with the govern¬

phate plant is to be constructed
and operated by Guanos y Fertilizantes, S. A., which is wholly
owned
by Nacional Financiera.

other

SWITCHING

a

remaining blocked.
this

disclosed

end

been

procedure be¬

or

$10

the

has

avail

withdrawals

Since

.

this

95

outstanding

and

.

No.

1948. After that date,
licenses authorizing

establish the plant is estimated at

side

is

in

the commitment

of all blocked foreign assets by Justice Dept.

a census

Secretary of the Treasury Snyder on March 1 announced that
effective June 1, 1948, the Treasury Department will cease to
haye
jurisdiction of blocked foreign funds. On that date, the jurisdiction

declining and will
continue to decline through redemption by the government.
.

*

authorized

was

with

the Export-Import Bank

000,000

The

being

is

credit

made by

sizable,

It

...

This

accordance

ment and acceptable to the Bank.

bonds,

remains

larger commercial banks.

support,

than

State

of

partially-exempt

among

out

offerings

quired for the construction of an
ammonium
sulphate plant near
Mexico City.

.

Considering that they had
"pegged" quotations since the latter part
due Dec. 15, 1967/72 are the leader of
the restricted group in the yet spotty demand.
been

of

.

.

credit of up to

a

$6,000,000 to Nacional Financiera,
S. A., a financial agency of the
Mexican
Government,
for
the
purchase of United States equip¬
ment, materials, and services re¬

'

DEMAND

have authorized

Office

After June 1, outstanding licenses for withdrawals to be
inoperative,

Credit to Mexico

A

the

Funds to Alien Property

Grants $6 Million

Governments

on

1948

Treasury to Transfer Jurisdiction Over Blocked

Export-Import Bank
Our

Thursday, March 4,

"At the

time, it does not involve

a

voice in management nor does the

rate of return depend on the an¬
nual

degree of

prosperity of the

Rental

real

constitute

.

estate

the

of

one

investmepts
important

life insurance company search

the
for

investment

of

avenues

to

come

for

from

their

policy reserve funds at a
satisfactory return. Through this

medium,

the

funds

accumulated

for policyholders are put to work
in a broad range of business -and
industrial
services.
Among the

properties already acquired are
represented such diverse activities

publishing plants, restaurant
commissaries, department stores,
as

chain stores,

office buildings, and
manufacturing. Thev repre¬
sent ia. form of equity f'nancing
for both large industrial firms and
can

small

businesses.

•*

,

Stimulated in large part by the
current need for increased work¬

ing capital
and

on

the part of business

by the pressing necessity fpr

broadening investment outlets for
the life insurance companies, there

have been many and varied
sons for such transactions.
These
capital

transactions

have

rea¬

freed

for the business firms

volved,
greatly

to

aid

in

meeting

in¬

the

increased
demand
for
working capital, especially under
present conditions of high prices
and

expanding activities.

Smaller

debt structures have resulted, the
financial

structure

has

been

sirpplified and, frequently, a tax ad-

Volume 167
vantage has

Number 4678

to

accrued

the

THE COMMERCIAL

than half

firm

going on the rental basis. Where
debentures were the alternative,
there has been

broadened

a

the

life

insurance

the

were

industrial

of

bonds

by the ,U. S.
companies brought
their total purchases of such se¬

life

bor¬

rowing capacity for other needs.
Among the year's transactions
of

billion dollars worth

a

following:
plant construction job for Ameri¬
Can Co.; Sears Roebuck, and
Montgomery Ward store buildings

Institute

lion,

the

ance

also

bond

Life Insur¬
The industrial

of

reports.

were

than

more

holdings.

ing

of its largest, the $5.4 mil¬
lion property in the Loop in Chi¬
cago, purchased and leased back

mortgages

to the

they

three

times

the

investments

new

in

resented

Brothers in

Chicago,

these alone carrying an estimated

of

purchase price of more than $6
million; six-story building in Long
Island City, N. Y., valued at $1.35

billions of

million

to

house

tion rand

a

the Institute stated.

food prepara¬

distribution center for

Bickford Restaurant chain; Jersey

City Printing Co. plant in Jersey
City, N. J.
"
'
.

December

purchases

of

their investments

Vic

At

Staats

the

time, $2,733 million

same

into

estate mortgages."

real

Last year's

life insurance invest¬
purchases reported by the

ment

were:

-Purchases-

1947

1947

1946

—Holdings-—
December 31"

Months

12

December

1946

1947

1946

$19,826

$21,508

ipal

department

of the munic¬
William R.

of

Co.,
640
South
Spring
Street,, members of the Los An¬

$3,061

Railroad Bonds (U. S.)
Public

"

Industrial

Misc.

&

Bonds

127'

(U.

Other

_

_

Administration

Securities

Real

*-

.

Real

Policy

Loans

32

988

367

2,019

1,930

85

310

403

&

Mortgages-

Mortgages__

_

....

r

2,712/

2,787
6,726.

rtlS.388

4,860

•<>«±3>i54

1,371

1,132

monthly basis

246

<*

593

.

1,724

v

a

1,667

-

a

41

23

18

74

25

458

66

a

575

a

807

1,277

5,498

4,977

$3,83C

237

$1,294

$1,139

$9,017

in

614

359-

43

1,463

188
;

,.',838

211

siiyafi 79g

1,413 ,'V 1,284
•

a

•

$46,505

$43,313

A

77

*

204

a

761

a

330

a

1,917

*

i

a

1

:S: 32

a

30

0

___

28

61

H

20

207

L____
on

5
V:

164

Estate.

reported

„

3

.

_____

Estate

Other

"Not

393,

-

W 1.876

7

3.)

Mortgages

Total

Farm

V-:.

255

•

L'v110

26

:

Mortgages

Veterans

(U.

Bonds_i.__iL.___

Mortgages

F.H.A.

548

-

-

Secflritles_,L___^LL_—

Bank

Farm

*

.

.

S.

Foreign

World

S. )•

12

•

"

(U.

State, County, Munic. Bonds
Alt

:?L. 63

Utility Bonds (U. S.

Stocks

•

V '

■/'

1946.

Unemployment Reserves at $7 Billion

National Industrial Conference Board says every state has funds
"at least triple" annual outlay for unemployment

compensation.

Funds available for unemployment compensation benefits reached
all-time peak of $7.1 billion on Sept. 30* 1947, according to an

•;

analysis of reserves for unemployment compensation benefits which
has just been completed by the National Industrial Conference Board.
Every state now has in its re-f
serve

its

"at least

amount

an

highest

annual

triple"
expenditures

payments if their reserves should
become dangerously low," *
; o

for

unemployment compensation
despite "heavy benefit disburse¬
ments during reconversion."
The
of

reserves

22

states

exceed

10

times their

highest annual expen¬
ditures, the analysis points "out. The Financing

:The Federal Unemployment Tax
Act levies

tax of 3%

a

on

the pay¬

rolls of

specified employers. Any
such employer subject to a state
unemployment .compensation law
may credit up to a maximum of
90% the taxes paid by him under
state law against this federal

the

Because

tax.

this

of

offset

fea¬

ture, all the states, and Hawaii
and Alaska have passed unem¬

ployment insurance laws.

From the
gram

Clifford Minor With

through state pay¬
roll taxes on employers and $600
million
from
employee payroll
taxes. An additional $700 million,
which
on

represents interest earned

the

state

The

taxes

the chief

on

proceeds

of-these

employers become

source

of the funds from

which benefit payments are made.
Of nine states which at various
also

times
tax

imposed

an

employee

finance unemployment in¬

to

only

surance,

two

states—Ala¬

bama

and New Jersey—continue

to

so.

do
The

of

the

federal

tax

Federal Government and

becomes part of general revenues.
Federal grants from general rev¬
enues

in turn provide the funds to

cover

all state administrative

ex¬

in unemployment compen¬
sation.
The full proceeds? of the

penses

0.3%

federal

tax

have

not

been

found necessary for state adminis¬
trative costs.
The excess, which
at

present

mately

tapped

in

the

total

June

benefit
to

30

payments
billion

raised

sum

ployment

for

$11.2 billion.

amounted

during

the

to

&

Mirior

Co., from 1929 to 1936.
PreviouSlyhe served as an Assist¬
ant
Secretary-Treasurer
and
a
director
Bank

leaving a reserve of more than
$7.0 billion to finance future ben¬
efit loads.

About

amounts

to approxi¬
million,
"may
be
by the states for benefit

$800




to

Land

during

1925,

devised

he

a

of accounting which was
adopted by the Federal Land Bank
System in the 12 Federal Reserve
Districts.,' / j
!
system

state

surance

benefits
from

a

first

payable under the
unemployment in¬
programs.
This ratio of

were

various

to

contribution

high

level

of

results

wages

bank

the main
office of The Chase National Bank

training

at

working in the then

departments through the Audit

Division.

plains

unemployment and ex¬
the "enormity of funds"

currently available.

•

on
Sept.
30, • 1947,
"easily meet" benefit pay¬
ments equivalent to the highest
amount
expended
during
any
previous year. In fact, the sum of

could

the 51 state
1946

reserves was

national

Standard Oil (Ind.)

6.5 times

benefit

outlay,
highest in the history of the
program. The individual state re¬

material

de¬

Dr. Robert E.

shape"

were

also

"in:

excellent

when

past. peak

measured against
annual expenditures.

Michigan, at the foot of the list,
had a reserve equivalent to 2.9
times its highest annual outlays,
which occurred in 1946,

Specific
"The

,

Commodity

February

exceed

came

will

debentures

The

New

Society,

increasing competition.
"Up were: acetylene, alcohol,

tallow, zinc alloys.
"In tight supply: acetate, rayon
yarn,
aluminum,
burlap -bags,
bolts, caustics, chain, copper, cot¬
ton
goods, dextrines, dyestuffs,
fuel oil, gas, gasoline, lead, dry
lumber, nails, specialty papers,
paraffine wax, pipe, tin, valves,
prime Western zinc.

Employment

tive commodity markets.

specula¬
Most of

the other items indicate

leveling

to the

related

a

recent

The

to have

a

too

increase is

bearing

current

on

prices. Not all steel is included in

York.
dated

be

The

trend

side.

down

sell

at

least

$40,000,000

debentures to the

at

tional

its

option

debentures

$10,000,000

gan

on or
was

may

not

from

the

ing

in

sharper

strike and wage demand talk, but
it has not created much uneasi¬
The prospect of a drop in
living costs and the possibility of
layoffs if production turns down,
ness.

are

brakes

on

fabricated
a

These deflation¬

buyers' market.

continuing

to

ary

forces,

will

probably affect the general

grow,

de¬

1948 "and

picture
noticeably —

firm, with trend to ad¬

are

Inventories

being

are

duced.

Employment is
imports under the

of

show

inventories

since

comment

that

reporting
October.

any

Many

increase

any

a

with

month,

the

for

increase,

austerity
program given as the cause. Buy¬
ing policy within three months'
limits."

<•

is

Wm. D. Hooper Opens
Chronicle)

CHICAGO, ILL.—The Board of
Governors

of The

tion

to

membership

J.

Moere

&

Mich.;

Albert

car

shortages.

tie-ups

and

The policy for the

future is to tighten up even

near

more,

wherever possible, and hold

current

production

needs

as

of

Vander

Moere,

J.

Vander
Rapids,

McGann,

Albert

McGann Securities Co.,

Inc., South

Bend, Ind.; James W. Pope, Glore,
Forgan & Co., Chicago, 111,

increase,

The election of J. Vander Moere

meeting demands in shorter lead

and Albert McCann will add two

time.

continue

to

Steel and aluminum

are

the

firms

member

the

Exchange,

total of 159.

James W.

to

making

securities

uisitions

Pope's membership was

business from offices in the Cen¬

screened

tral

over

Building.

a

fol¬

Grand

Co.,

principal short supply items. Req¬

FT.. WAYNE, IND.—William D.

the

lowing:

freight

terruptions,

Chicago Stock

Exchange has announced the elec¬

temporary, due to production in¬

supplies

Hooper is engaging in

re¬

off—lack

Chicago Exch. Members

Inventories

"Industrial

to

1949.

Financial

business

changed

tant future.

companies

con¬

The

general

not

somewhat down from last month.
Prices

fewer

exceed

com¬

to

"The
has

vance.

to

by the

(Special

strike influences.

Canada

The drift is towards

dip

in financing its major

in

the

down
slowed
perceptibly.
Sixty-eight percent, however, re¬
port maintaining high production
employment. There has been some

Worker productivity is

increasing.

slight

of these

bentures will be used

on

increase

of

has

is not known.

many

sell addi¬

before that date.

struction- program

to end products,

Competition, however, is becom¬

com¬

arranged by Mor¬

sale

little

a

rate

of these

insurance

Stanley & Co. The funds de¬

rived

pany

on

not later than Dec. 31, 1948,

pany

and

to

is

The

the rise. How much will be passed

price structure in the not too dis¬

is committed

company

as a

Changes

steel price in¬
surprise to most

benzol,
cement,
carbon
black,
coke, fuel oil, glass, polystrene,

"The

industrial prices,
which had been slowly trending
upwards in the past few months,
show a decline — principally in

the aggre¬ products.

$50,000,000 in

being

with

Commodity Prices

"Over-all,

steel.

gate amount to the Equitable Life
Assurance

is

buyers, in the face of commodity
and stock market changes. Otherr
wise, hard goods had shown a
tendency to level off or reduce

the

of

caution

.

"Lower, prices noted: grains,
disappeared—not changed to
paper
boxes,
botanicals,
boot
pessimism—but to a more con¬
twine,
cotton, small motors, some
servative policy.
fats,
feed,
foods,
hides,
leather,
"On
the
whole,
Purchasing
mercury,
paper
towels, rubber,
Agents express confidence in the
immediate future, looking on the soap, sugar, weatherproofed wire.
"Easier
to
get:
corrugated
market drop as a necessary and
boxes, brass, some hardware, line
healthy adjustment long overdue,
and are prepared to proceed with hardware, paper supplies, plastic
materials.
//'..'
caution.

the

serves

Extreme

has

new

Wilson, Chairman

this.

exercised.

creases

same

off, the principal exception being

Arranges Financing

The loan

.

of this

fuel/and

products

.

and

minimum

by

"At the

Mr. Minor received his commer¬

cial

annual instalments.

44 cents has been paid
$1 collected since bene¬

for each

the

1922

association

Feb. 1, 1948, will bear interest at
2%%, and will mature in 15 equal

Reserves High

fits

York

New

the

of

from

arranged to sell debentures not to

period,

purchasing execu¬
change is at¬
tributed to work stoppages caused
by weather conditions which have

Penington, Colket & Co.

Benefit

only $4.1

same

Robert C. Swanton

liveries.

by

unem¬

to
90
day'
Sixty days is the cover¬
age most desired, but many are
trying to hold commitments under

is

Much

affected

board, and A. M. Peake,
President, announced Feb. 26 that
Standard Oil Co.
(Indiana) has

payments

and

downturn

'hand-to-mouth

bracket.

time, the increase
in backlogs of new orders showed
Announcement is made of the a marked decline from January,
association with Penington, Colket 18%
reporting
increases, torn& Co., 70 Pine Street, New York pared to 30% in January, with
City, members of the New York 60% retaining an unchanged but
and Philadelphia Stock Exchanges
satisfactory order position. This
of
Clifford
E.
Minor, formerly sharp change in the new business
Manager of the investment de¬ trend reflects the declines in the
partment for the past seven years sensitive commodity markets.
of E. W. Clucas & Co.
As an ac¬ Those directly concerned with the
count executive, Mr. Minor will commodities affected, have noted
an
acute
serve a clientele established over
shrinkage' in future
his many years in the securities orders. Others are taking a closer
business.
position on forward buying,
A member of the banking and awaiting
a
clearer view of the
Some of the optimism
investment field for 23 years, Mr. markets.

the

Reserves

10%

which cannot be offset is collected

by the

accounts

Most of

ard rate at 90% of the federal tax,

2.7%.

state

51

unemployment trust fund, brings

the

stopped
a
slight

tives.

collected

was

has

reported

31

pro¬

coverage, compared to 87%
January. The real change in
buying attitude has. come within

in

trend

Francisco.

to June 30, 1947, $9.8 billion

them have established their stand¬

or

beginning of the

the

increase

geles
and
Chicago
Stock
Ex¬
changes.
Mr. Breeden was for¬
merly an officer of R. H. Moulton
& Co.' with headquarters in San

in New York

Over $7.0 Billion

Reserve

that

.

which
an

buying for 90 days and under
continues, with 92% holding to

re¬

but

further pressure

inventory. The trend

of

highs,

to

and

.

Minortiieaded his^own firm, Ct E.

Estimates

viously
ported

orders

new

for control of

tained at pre¬

(000,000 Omitted)
$1,472

pro¬

duction, gen¬
erally,
is
being main¬

Breeden

E.

President in charge

Institute

more

in the year,"
"Of the nine

first

impact of the com¬
modity market, change was on
buying policy. A shorter range is
dictated by the price uncertain¬
ties, coupled with slowing up of

: In¬

dustrial

on

Buying Policy
"The

con¬

ditions.

effects

<♦>.

extreme

weather

made,
$4,460 million went into railroad,
utility and industrial securities.
went

—

in

and

investments

new

important

February
business

decline of the

than three-fourths

more

ik

grain markets

were $9,017
"The financing

of

one

reV°l} ofuthe Business Survey Committee

Sr7a !n of Purchasing Agents, the Chairman of
DentinJ
S^?+nton>
Director of Purchases, Winchester Re¬
peating Arms Corp.,
two factors have had

million

$1,294

of

buying, pending clarification of markets. Industrial inventories
stated to be
declining slightly.

thtCN°ar£it0Athe lat+est

which

securities in De¬
cember by the life companies were

blatt

buildings

conservative for¬

ward

of

and

Henry C. Lytton in Chicago, Bonwjt Teller in New York, Filene in
Boston, Hahne in Newark, Gold-

store

CALIF.—Vic

1940

and for the year
million.
aid extended to
business and industry during 1947
by the life companies investing
policyholder reserve funds rep¬

department

ANGELES,

25

Business Surrey Committee of National
Association of Purchasing
Agents, headed by Robert C. Swanton, sees rifore

E. Breeden has been elected Vice-

,

Aggregate

90-year lease;

a

LOS

(1017)

Reports Backlog of Orders Falling

Of Win. R. Staats Go,

•

one

on

V. E. Breeden Is Y.-P.

year end were
million.
These
holdings
49% in the year and Were

up

in cities from coast to coast; F. W.
Woolworth store buildings, includ¬

chain

CHRONICLE

holdings at

$4,860

can

FINANCIAL

insurance

curities for the year to $2,019 mil¬

companies
$10 million

&

are

to

being

secure

inventories.

carefully

strict

control

fer

a

from

firm of

another

a

trans¬

partner in

Glore, Forgan & Co.

the

26

(1018)

THE COMMERCIAL

Shortcomings of ERP
(Continued from

given without fear of setting off
a chain of economic
explosions.
Secondly, in my opinion, the
nations

of

Western

Europe

in

they have, that it

this
whole
problem
would be greatly clarified if these
two purposes were kept separate
and distinct. This would make it

than

possible

our

own

It is simply not fair for

economy.

the salesmen of the proposed pro¬

to

gram

will

will

say, as

take

less

5%

of

our

product. That may be true
mathematically, but" the fact is

not go communistic.
The nations
of Europe fall into two rough di¬

gross

visions—those which have been

that

a

the

of

out

genuine part of western civiliza¬
tion and those which have not. Or

will

5%

the

have

hurt

to

where

places

hurt—and

to put it another
way,

come

will

it

badly.,

Aid in any

those which
developed the traits of in¬

have

balance

restore

to

15)

page

total

particular form and
therefore, should be

aid,

opinion,

confined to

in the limit of danger to our econ¬

Plan

In
addition, aid to any
country should be given under
positive guarantees that will in¬

ever

not

are

nations

going to jump from

condition into

far worse

a

tion just to spite

bad

a

omy.

condi¬

themselves.

us or

By this time, the peoples of those
countries

They know it is no
bargain. Far from embracing" it,
they will fight against it. I made
similar statement in the

I

am

sinke

the

United

States

randum to which I have referred.

aid

Europe

Many

persons

more

about

the

position
the

communism

on

only

thing

considerable

with

pressed disagreement.
since

events

my

about
any

have

ex¬

But I

be¬

which have

taken

place in France and
Italy bear out this viewpoint. It
is

significant that the only na¬
Europe which have em¬
braced communism, or apparently
embraced it, are those in the grip
of the Red Army.
the

nations

of

Western

Eu¬

be

its

effective

job.
I came back
convinced that Eu¬
ropean countries were not doing
as
much as they could, to help

were actually in danger of
going communistic, then I believe

conditions would

extent

efficiently, to say the least, and
certainly, if Americans are now
to give additional billions of hardearned dollars, there must; be as¬
surance
that the money will do

rope

that

given

already

the

to

than

largely wasted. To my mind, this
justifies the feeling that much of
the balance has been
spent in¬

tions in

If

has

the

war

of
$22 billion, including
the almost $4 billion extended to
England.
This money was sup¬
posed to last for five years but
nearly all of it has been spent al¬
ready and, as leading English men
of
affairs
admit,
it
has been

me

which

number

lieve that the

is

to

the

of

end

an

from

own

most

powerful argument against
any aid at all.
Stated as
"aid
to
stop
communism," the
whole proposition reduces itself to

Europe

themselves.

giving

will

I

refer

this

to

has

support it
The need for some
and it should

is immediate

relief

for it what¬

won

of public

degree

possesses.

continued.

be

proposed program, however, is
an entirely different matter.
Po¬
tentially, it is by far the more
the two in terms of
of retarding our own re¬
and of increasing the ef¬

of

costly
covery,

fect of inflationary factors

in our
is no need to
blindly into this phase and
There

economy.

rush

compelling reasons for not
Before any considerable
sum of money is spent, investiga¬
tion
and
study
much
more
thorough than anything up to now
should be made by qualified per¬
sons.
They should examine:
many

doing

so.

(1)

The

countries

of

capacity

their

till

to

European
neels

own

separately and by cooperative ac¬
tion;
(2)

The

which

these

.

practical

lives

of

rank

peoples.
resist

If

of

it

will

billions from

of

because

conviction
way

file European
peoples are to

communism

because

but

and

these

of

their

that

there

life and their

not

be

a

of life.

people do not have this conviction
and

determination,

would

be

sheer

aid

from

waste

us

because

the various

resources

The plant, equip¬

ment, inventories, raw materials,
public
and
private
capital?

inner

To any nation whose

what

countries have?

better

determination to have that better
way

know

inner

own

lot about what

a

needs, but little about
Europe has. Does anybody

what

America

own

is

We have heard

Europe

Knowledge of these factors would
make possible an intelligent ap¬
praisal of the situation and might
indicate
that
by
using
proper
methods,
Europe' could
supply

they would not have the capacity
to use it constructively.

of its

more

own

needs than is

now

The

(3)

still

was

They

strengthen

and

for

world

something of tangible
virtually
worthless
marks. As another instance, fer¬
tilizer is a big item on the bill of
needs submitted by the 16 nations.
Yet it was recently reported that
the biggest nitrate plant in Ger¬

undertaking
to
prepare half the

probable—if not

a

in¬

evitable—war with the other half.
In fact

is

the present situation

even

frequently

war."

described

It has been my

as

"cold

experience

for

was

many

in life that the fellow who expects
trouble usually finds it and I be¬

dustry.

lieve that the

this

of

same

and

groups

cause

thing is true

nations.

Isn't

ex¬

mean

it

it

it

to

be

dismantled

was

listed

The

annual

as

be¬
in¬

war

a

capacity of
plant is 700,000 tons. Would

not

make

better

sense

to

we begin to think
this
plant
producing
fertilizer
possibility and begin right in Europe and save the
to approach this problem of for¬ United States—which is a net im¬
eign aid, as well as others, on the porter of nitrates—the burden of
basis of building a situation in
sending at least that quantity
which nations can live in peace?
across the Atlantic?

of peace as a

Problem

How
of

,■

U.

S.

Strength and
Stability

other

on

burden of cost and sacrifice

situations

United

States.

We

have

no

sur¬

productivity

and

resources

drain which will be a partic¬

ularly serious burden

now

in the

-

Germany, partly because of

mistaken

only

United
States
policy,
small fraction of potential

a

productivity
ized.

From

would

aid

is

for

make

of

ery

time

the

our domestic needs in broad
purposes.
The first is ur¬
goods requested by Europe. I gent relief of human
suffering.
Steel, oil, coal, machinery, freight1 The second is
long-range recon¬
cars, for example, are all in short1 struction of the economic
systems
supply and are all badly needed of European countries,
in

my

one

real¬
learn, we

can

of

the most ef¬

at

and

recov¬

the

same

the tremendous burden

United

promptly

States

civilian

a

plan

for

a

economy in Germany, that
would stimulate its production of

materials

countries.
annual
for

the

just

requested

000,000
aid

full

of

now—$6,800,-

the 270,-

among

in

persons

amount

the

amounts

or

come

in the lowest taxable in¬
in the United States

groups

European
about

to

income tax whatever but who

no

will

higher prices for goods

pay

otherwise

Marshall Plan,

I

advised

am

rate

5^

steel

that

4,000,000 tons

to

a

—

be

is

There

under

waste.

conditions, would
production of far greater
value than 5V2 cents per day per
capita.
\
present

over

somewhat

become

has

It

the

fashion to speak of Europe's trou¬
bles

though they

as

due

were

en¬

The

this problem

is con¬
benecessity for
administration of European aid by
more

sidered

the

with

minimum

world's

history

has

people been

Certainly, China affords
a
clear example of a numerous
people which has been entirely
unable at any time to utilize a
great land area in a way to pro¬
vide adequately even the primary
human needs.
the

To

lesser

a

extent

an

doing the job.
that

sured

In

to

our

reduce

domestic

their

minimum.

steel

shortage

It would also

save

by this amount further depletion
our badly needed resources.

of
1

The

that

basic trouble in Europe is

the

people have not been
working long or hard enough to

harm

to

From

economy.

our

to

top

bottom, the personnel of this or¬
ganization should consist of prac¬

tical, seasoned, experienced men.
I

am

men

certain that there

are

with

qualifica¬
this job,

the

proper

tions who would take

knowing

its

many

on

importance

to

our

lation

aid

only 7% of its land
area.
This country will attempt
an
impossible task — and one
highly dangerous to its own wel¬

problem of European
primarily a business
problem. This indicates the need
for business men, business meth¬
ods, and a form of organization

fare

with

and

if it undertakes to

—

hundreds

millions

of

do for

of

There

for

is

complex

a

Europe's

of

condition,

the

pects,

will

be

business

which

familar

and

But I

it.

out.
too

or

a

formulating policies and of mak¬

and I

do

solution for

point this
Europeans have never been
keen about competition. They
comfortable

with

arrangements

permit

the

ducers to
able

least

make

cartel

prices which
efficient pro¬

profit, and

a

efficient

more

en¬

producers to

coast
a

along with little effort. As
result, obsolete, high-cost, plant,

equipment and methods
in

use,

I

reasons

would

recommend

board

would

are

the

the

have

of

duty

ing broad decisions. The chairman
responsible to the board
administration of
the aid

sonnel
course,

usual

organization. The top per- '
of
this
organization, of
would be appointed in the

manner

and would be part

Executive

the

of

believe it would
terests

of

the

Branch,

serve

but

I

the best in¬

country to require

quarterly basis.
It likewise is vital that this or¬

ganization be

completely inde-

a

than it should be, prices are rela¬

pendent agency and entirely free

tively high, and wages are rela¬
tively low. The set-up naturally
produces a scarcity economy. No
country can have what it does not

of

Governments

produce.
sanction

not only
participate in these

but

arrangements. Instead of encour¬
aging greater production, govern¬
ments of

Europe try to give their
illusory
"security"—
in
reality is distributed

people

an

which

poverty—and the system is main¬
tained by government control or

management, rationing, subsidies,
high taxes and other trappings of
socialism.
Will

Our

Aid

Be

of

Permanent Effect?

to

keep

alive for awhile the fic¬

tion that socialism

cessfully?
will

latter

I

am

be

can

work

afraid

much

that

more

suc¬

the

likely

than the former unless the United

States retains

a

over

its

aid

to

will

enable

it

money

tively

degree of control
any

to

country that
see

that

the

and goods are used effec¬
for the reconstruction of

>

organization also to report di¬
rectly to Congress on at least a

this

kept

production is much lower

"

are

work.

efforts

would like to

prefer

men

best

can

corporate
form with a chairman and board
of directors.
The chairman and

or

needs

money • will be
in, Europe and

present and future.
Although it will have other as¬

1947. With such

domestic

our

other way
people be as¬

no

American

the

can

thing is true of Euro¬
pean countries. The United States
has only 6% of the world's popu¬
same

■>

organization really capable of

efficiently

the

apparent

more

absolute

the

comes

used

by

steel by this amount,
tonnage thus saved and

•

Importance of Administration

tirely to the war. The truth is that
Europe has never afforded a very
good living for most of its people.
Recently, I saw a statement by an
authority to the effect that at no

the

of

the

-

result in

production,

increased

*

for this aid to Europe—and
of course, will all other Amer¬

icans.

Americans giving
achieve European

;.j The situation is fundamentally
unsound.
Will any aid that we
give toward the economic recon¬
an
increase in German produc¬ struction of Europe be of perma¬
tion, we could reduce our heavy nent effect, or will it merely help
months

the

of

pay
so,

cents per day for the period from
next April 1 to July 1, 1949. I am
confident that efficient organiza¬

-

of

because

will be helping to

justification in
money to help
stability. There
is no justification in helping to
tion of the energy and skill of underwrite European "social se¬
these
European
peoples, ' even curity,"^ "feather-bedding," and
area

needed by other

instance, could—within six

seven

would

plus above

I

by taking
proper steps with regard to Ger¬
many.
The United States should
develop•; and
place
in
effect
on

applied
two

being

now

Europe

ease

and

proposed

is
all

fective contributions to the

export

the




In

the American economy,.

The

re¬

that

now

I look for some
in French condi¬

so,

tions.

uphill battle being fought to right

Relief Separate Problem

un¬

why France did not
done

improvement

many

are

hard to

was

her currency and

has

peace

—a

it should likewise be
recognized that the thing of great¬
est
importance to the Western
world
today is the continuing
strength
and
stability
of
the
But

derstand

of

many

type

their

themselves in order to aid Eu¬

rope.

orandum that it

there, not only in
Germany, but in the other coun¬

this

Recognizing that the recovery tries we propose to aid? No one
of Europe is a vital part of world knows. And I believe we should
recovery, there is justification in know before the American
people
the
American
people
imposing are committed to a heavy drain on
some

in francs at the official
rate
bought so little at black
market prices. I said in the mem¬
pay

have

about time that

that

-

properly used for the purposes
given.
It must never be forgotten that

much

his

a

with

is

had small incentive to work when

she

would

suspended

ple explanation

value

are

so

let

needs

be

that our aid will be
cancelled unless it

for his detailed

value

It gives the impression

we

do

to

domestic

should

There

all countries,

would be

changing

Germany which are not
being fabricated into products be¬

mining

not

their

levels.
enough

effectively.

firm and clear understanding

than

fact

*

according to agreement and

the

well fed.

prewar

used

not pretend to have either a sim¬

problem.
that

in

of

access

the Continent
as formerly.
In France, they were
not getting
production, one big
reason being that the average man

cause

mate¬

short

membership will have
to necessary informa¬
tion in the countries being aided
and will be competent to deter¬
mine
whether the aid is being

free

and, in addition, persons who pay

or

conviction

an

presupposes

production—by Europe is the
solution
to
Europe's diffi¬
culty. This is well illustrated by
true

could

alone for export to

the wrong approach to this entire

rials

other

real

than 25% of its

the

stated

that production—

Such
organiza-

industry and for that only.

persons

is obvious

in

countries

were

for

coal

steel

and

support.

It

achieve
by
their
own
through the centuries. "

there

are

not

time

total

I

.

stance, with the same mines and
just as many miners, production

collapse and com¬
munism is scare psychology pro¬
ducing an atmosphere which gives

of

peoples that, despite
in everything,
they can still have
the
short
work-week,
"cradle
to
grave"
social protection, and other re¬
finements in living which even
the most productive economy can¬
scarcities

that Europe was not doing enough
to help itself. In England, for in¬

There is evidence that

talk

their

people
scattered
over
the
globe
what
those people have been unable to

proposed.

The

teach

more

United

Above

Since
so
much of Europe's economy is
government managed, this neces¬
sarily means government leaders
who, to retain political support,

to

would effectively use aid from
the United States, and finally,
the

tion whose

file

and

people but of the leaders.

'
extent

extent to which
States could give aid
ever, I wish to emphasize that without
self-injury.
a form of bribery.
And we just whatever the justification in ask¬
In my opinion the reports made
can't make the bribe big enough ing Americans to help make up
thus far could
hardly be more
—if, in fact, the political think¬ unavoidable
European
deficits, than
superficial in view of the
there
is
absolutely no justifica¬ short time
ing of an entire people can be
allowed, and also there
bought at any price. The aid that tion in asking Americans to pro¬ is a
question as jto the qualifica¬
we could give ,to the extent of our
vide
anything that Europe can tions and
impartially of the'' per¬
practical ability, or even beyond and should provide for itself.
sonnel of the reporting groups.
it, would not be sufficient to pro¬
duce a quick improvement in the
Europe's Needs and Resources
Is Europe Helping Itself?
At the moment, how¬

again later.

fault is not that of rank

of 000,000—dividend

phase

the

money,

control

aid

reconstruction

The

prompted to make the last
remark by the consideration that

memo¬

have written
memorandum" and

for the pur¬

use

which

now

given.

pose

communism.

a

its effective

sure

well informed about

are

amount well with¬

an

obtain the maximum possible pro¬
duction and, in my opinion, the

terrible

Naturally, we want to do every¬
thing in our power to relieve hu¬
man
suffering.
The
American
people have never turned a deaf
ear to any appeal for help of this
kind, and I believe it is this as¬
pect of the so-called
Marshall

not.

individualistic

first

on

things first.

dividualism and those which have
The

concentrate

to

1948

Thursday, March 4,

CHRONICLE

FINANCIAL

&

•

political influence. Since the
problem of Europe is fundamen¬
tally economic, progress will be
surer
and quicker if it is dealt
with

as

program

tail

to

such.

An

should
the

kite

economic

not
of

be

aid

made

a

political or
diplomatic programs. I do not be¬
lieve that the State Department
or
any other existing agency o£<
our
government is qualified for
this job from the standpointl'of
competent personnel or in free-*
dom from political considerations <
which naturally influence them
as parts of the Administration.
>
This is well illustrated by the
very fact that General Marshall so 1
far forgot himself as to say, in
effect, to this Congress: "Do either
what we tell you or nothing"^
and the fact that this position was
reiterated by President Truman
in a press conference. I can inter¬
pret this attitude of the President ,■
and his Secretary of State only as
an assumption by them of infalli¬
bility on their part, which is not
at all justified by their past rec¬
ord, and also as an assumption by.
them of a lack of proper judgment
on the part of Congress.
Speaking as one citizen, with
all due respect to President Tru-

Volume 167

THE COMMERCIAL

General

and

man

Number 4678

Marshall, I do
not believe Congress should ab¬
dicate its position or responsibil¬
ity. I believe that Congress and

going to cost him something per¬
sonally. Spending in terms of bil¬
lions is a relatively new
thing. I

the people as a whole should act
in* this matter as hard-headed,

individual

do

a

,

sensible Americans and not

believe

there

Who

concept of

is

single

a

can

really form
"billion" except as

a

an

a

name

be

of

body from one posi¬
by the winds of
Administration propaganda.
We
are not accustomed to "ja" votes

to

anything just can't be related
anything within the experience
understanding of the indivi¬

unthinking
shifted
tion

in

to

mob

that

as

can

a

another

in'the United

States.

or

dual.

spent

between

$6,now

arid

this,-it-is

easy

the past

beyond

income.

our

have

we

In

built

conse¬

the

up

If

we

situation.

our

add to

now

home, huge
sums that will be wasted
through
inefficient spending
abroad, we
can

expect

That will
United

only

be

States

far-reaching
have

outcome.

one

depression in the

a

serious

more

than

and

anything

It should agree
this problem at

And

United

ever

depres¬

a

States

would

worst

domestic economy can
economic
leadership

countries.

provide
for
other

we

The

Stability of the
give other
countries something to anchor to.
If it goes, they will have
nothing.
United

States

To those who

prospect

will

alarmed by the

are

of

expansion

an,

Communism, I

serious

depression

States

is

in

of

that

say

the

a

United

greatest

thing

to

Above

all, therefore, in my
opinion, the great obligation and
responsibility of Congress is to

4•

*

v

'"

I

would like to

:

•

•

;

.•

test

applied to the spending
dollar either at home or

of every
abroad.

Certainly,

foreign aid, not

in

one

regard

to

single dollar

than is necessary should be

more

appropriated, and
tion

every
taken to

should be

each

dollar does

represent

that

see

job that will

a

adequate

an

precau¬

return

to

the American
people from whom

that dollar must

come.

Summary

(Continued from page 12)
fluences.

I think we are all fa¬
miliar with the deterioration that
has taken place in the New

wU

(2)
Then make a thorough,
careful, further study of Europe's

Eng¬

land

ability to fill its own needs; the
practical possibility of effective

laced

This

'

administration

aid

of

an

in¬

(outlined above.

as

careful studies by
Congressional committees.
(5) Make commitments for no
more than one year at a time*

economic

aid

I wish

say,

to

believe

other

should

gifts

or

Not

to

of Europe.
.

all

In
never

experience I

my

terrific

seen-such

have

propa¬

ganda as is carried on in connec¬
with this proposed program

tion

day by day by every department
of

government and by the
Chief Executive—and, of course,
our
,

at heavy expense

mantle

The

sumed

aifiount

i

of

the

in
or

to our citizens.

infallibility

as¬

statement— 'This

nothing"

—

becomes

rather ridiculous whert contrasted
with only one

of the serious blun¬
ders they have made. That is giv¬
ing Great Britain $3,700,000,000
which today is denounced even in
England., When that loan, or gift,
was first proposed th£ spokesmen
of both :our Administration and
Britain's created the definite im¬
pression; that this
would solve Britain

line of credit
s

problems. It

has not solved them and there are
grounds fri believe the money has
country is

been rwasted.\,Nbw our

asked

out much larger
Slims, and. of these Britain will
be a major beneficiary. What assurance have we that ..these new
dollars will be put to better use
than

to

pour,

the others?

'The

time

has

come

when

to
Naturally
area,

the areas into which this

obvious

so

dustrialized

China, without the same thorough
investigation advocated
in
the
case

Louis

sections

revenue

affecting traffic

trends

U

were six

through mechanization. Length of
Ha

^

influe'nr/116 P'CtUre

in

f

inrgheanSXE

highly in¬
the

in

KrTmi"a'f"e
ger business

is

the

g^'

whether

mte°IVnT !?, 50 miles or 40°
fu

,

a

termina!a/VfIy much
the same
lower.dollar
is

mike3r^eCen"y haa occasion to

pa' o a comparison of two of the
Hero O0nias. bituminous coal carfereot
brought out some inNeftherPVirlS- •" this connection.
* nh?L
gIwan nor Chesapeake
H a Passenger carrier and
K

ese two phases of

•

mill

facilities

were

district

expanded

in
of

the

Utah

sharply

by gov¬
These facilities

ernment agencies.
have since been taken

by

over

be

in

permanent

a

the

economy of the
Denver & Rio Grande
handles all of the coal

the
as

a

share of other

out.
ern,

factor

Western

going to
well

as

products moving

Denver & Rio Grande West¬

therefore, has taken

characteristics of
This

one

on

the

heavy industry
development alone
a

may well add as much as 10%

15%

to

normal

to

revenues.

east.

Study of Individual Railroad
It is obvious from my foregoing
remarks that it is impossible to

tablished
the

has

recently
in the

west

tralize and

The

automobile

started

to

decen¬

did the rubber

so

es¬

middle west and

coast.

manufacturers

been

com¬

panies and other industrial enter¬
prises.
The* industrial east had
reached

maturity many

There

ago.
for

its

was

railroads

velop

opportunity

no

this

in

years

area

to

de¬

new traffic sources to com¬

pensate for the inroads that other

transportation

media

were

mak¬

ing into rail traffic. Conversely,
and naturally, those sections of
the country that were experienc¬

ing

growth in population and
getting the industrial
plant that was moving out of the
a

that

were

mature east

were experiencing the
development of entirely new traf¬
fic
sources
for, their railroads.
Thus, in recent years we have

railroads

seen

south

in

the

west

and

forging ahead while those

in the northeast have been deteri¬

orating. .There
that this
vet
ter

run

of

territorial

its full

fact,

evidence

is /no

trend has

course.

there -is

that

it

indication

was

As

a

as

mat¬

convincing
accelerated

by the war and has continued in
the postwar era. Some of the for¬
merly

backward

sections

we

of

the

venue

generalize

as

of its location

well

as

as

its past

probably future vulnerability
to competition.
Just as it is im¬
possible to generalize on traffic or
revenue performance and trends,
it is impossible to generalize on
or

the question of expenses.
Earlier
out that

in

on

wage cost

ably

an

talk

I

pointed
industry basis the

had remained remark¬

stable

revenues

this

in

over

relation

to

gross

period of
not, how¬
ever, uniform throughout the in¬
dustry. .For want of a better yard¬
stick, I will look upon 1941 as a
normal prosperous year. In that
years.

year

a

long

These wages

wages

relation

to

and
gross

are

payroll
ranged

taxes

all

in

the

Way from 52.1% for Chicago &
North Western and 49.2% for New
York

Central, to less than 35% fof

Chesapeake

& Ohio.
two Pocahontas roads

The
were

other

for

Louis

tangible




•».

a

As

a

proportion
can

absorbed

4.0%

Chesapeake

of

the

combined
Ohio-Pere Mar-

&

xr-gr-os-s comPared with 2.1%
Virginian.;
Similarly,

for

yard

service

wages

employees

ab-

Ohioe<sv«'7%
hio system °f
the and
ChesaPeake
&
gross
only 3.5%
?« tbe ^rg/nian gross. In these

con°,iC,ateg0rieial0ne' and without
taxes of
ofcLJ
i,higoher
Payroll
Chesapeake
& Ohio
there
taxes

gross

before

income

taxes.

it

revenues

Federal

income

To get a true picture it is

naturally necessary to make this
test

over

extended period.

an

In¬

dividual years may be influenced

by

over
maintenance, skimping
maintenance, etc. For the pur¬

on

of this talk, however, it is"
only .necessary to cite the single year 1947. Taking 45 roads,'

poses

which account for

than 90%

more

the

of

industry gross, the carrythrough of gross to net operating
before

income

Federal

income

Janfed
aR .the way from
Virginia to 2.2% for the

37 5% for

Chicago & Eastern Illinois.

evenues.

Ohms

ratio

in

items been the

only
same

The

expenses

One

two

have

of

enues

earnings. Actual
$4.44 a share.

largely without the sphere
where they may be controlled by
other cost

nfluences that may be corrected
by management. They are largely
Physical. Heavy grades and ex¬
cessive curvature, which are im-

mlraPr!
k° determining the profit
margin because of their influence
DowPr^pfP gth'• Speed' motive
p wer, etc., may in a number of

gross

rev¬

$100 million each.

One

of gross through and

thus

fixed

covers

only

ries

but

its

as

10%

roads

during

ever,

trusteeship.

a

re¬

There

instances, how¬
where such drags on oper-

fiiKnSkCan
not
be nature
eliminated,
either because
of the
of the
territory
of

the

transversed

lack

of

funds

or

to

because
finance

such major projects*

also among those pay¬

look

are
a

only $5 mil¬
coverage of

expenses

both ;

of

10% the first road 1
its

cover

charges

1.2 ;

earn

only 20% of its charges. The mar¬
gin of safety is much larger in the
of

case

the

road

bringing

the actual coverage

both

the

pV*,abso¥eIy
essential to
into the various
carefully

is identical in

,

cases.

I-trust that I have been able in
the

foregoing sketchy outline to
out
the
impossibility of
mapping out any railroad invest¬
point
ment

program

;

without carefully

examining the status of, and pros¬
pects for, the individual company
I am a complete bull on the rail-'
road

industry
net

that

such, believing

as

income

this

year

Could

from 50% to 100% above last.

run

year.

I

not, however, a bull-'

am

thah weak

number of

If

car¬

through

i'eSo/y!llile tbe second will

Rock Island & Pacific has done

a

gross

shows

increase

still

will

The other

of

charges

also

?n

are

charges of $10

million two times.

instances be changed by heavy
capital expenditures. Chicago

spect

the

might

carries 20%

ale

all

particularly g00d job in this

of

You

with

roads

fixed

larger proportion of gross through
to available income even
though

I have just men¬
influencing the relative

of individual roads

a

mere

of

measure

bond.

a

with

the

on

coverage
a.

of

close

fallacy of putting

stress

as»

times.

last year as

are

charges
strength

it

stock

management. There

much

to

the

mathematical

two

factors
as

too

like

on

lion

The Management Factor

tioned

comment

&

s it would have added
after Federal income taxes, $1.25
a
share to Chesapeake & Ohio's

earnings were

would

two

these

Virginmn

common

I

^ss

Revenue ffe^nC/
of
Had °L5A%
Chesapeake

even

ing out less than 40 cents of every
dollar for labor, includ¬
ing payroll taxes.
revenue

of

bring down to net operating

tact, there

individual failroad. In

feiver strong ones
sisters, in my opinion. -

are

You just have to work hard
pick the sheep from the goats.

to

Put Call Brokers Nominate

tLTh« Nomin^ing Committee ofthe Put & Call Brokers and Deal¬

Association announce that S, f

ers

D.

Harnden

for the

tion

time.
and

has

been

nominated

Presidency of the associa-

than

were

i y ?ents>
Pr°Perty taxes,
measure of the effifinal

of the individual property
therefore, we determine just what
ciency

Federal income taxes.

traffic and cost influences as they
country (and obviously necessar¬
in terms of
affect individual railroads before
ily the roads serving those terri¬
It is apparent even to those who
values.
Unfortunately, tories) have further benefited
arriving
at any investment or
have never studied railroad oper¬
we have cultivated the habit of from the
speculative program. To empha¬
opening up of new farm
ations and railroad securities that size the
dealing loosely in billions of dol¬ lands through
importance of what I
irrigation projects
lars/ It has gotten so that the
a road
originally paying Out 52.1 % have said I'might cite the differ¬
incidental
to
the
governments
6f its gross in wages and payroll ences in
larger the sum mentioned for any
tranportation ratios of a
taies is far more adversely af- number of roads.
purpose, the less
likely'is t le hydro-electric projects.
| --"vw
AM*
uiviv
au
ai- t
Transportation
Probably the outstanding ex- fected by hourly wage increases! costs are particularly important
average person to realize that it is

must" think definitely

maintenance, hire of equipment,

able, wages for station employees

♦Ltl?ink detail
* have pointed out in
Chesapeake & Ohio. shfHdent
just why it is im¬
Roads such as Gfeat Northern,
possible to look upon the industry
and New York, Chicago & St.
as
a
single investment unit and

lower

are heavy
expenses other
transportation costs, such as

h3n

runs higher J0??'..Centred
of Georgia had a
delicit net operating income be¬
4J°vAn 1946> the latest year
which full details are avail¬ fore

to the traffic trends

or
potentialities of the railroad
industry. Each railroad must be
studied individually in the light

and

have gone, or

fCbesaPJake & Ohio

a

materials

raw

•

territory.

expanded steel mills

and the finished

received more than 3%
revenues from this source

trnoo

vw

subsidiary of United States Steel f^
,fpr
and will

ing south and west. A steel indus¬
try was established in the south
more

wh^eas th'e

Chesapeake & Ohio and

SffiSr,from
gets.lef
than 1% while
of its
l.c.l. business

of

m

undergoing, reorganization.

u

terminal cost

transpor-

os between 40%
Ten of these

n°j?
44.9%

Ia(ter case the rev- Si
etght times as much so etc.

i.

em.o

Thirteen of

the 45 roads studied had

There

same

Grande

Provo-Geneva

eastern carriers.

were

are

the

Western.
Formerly this
largely an agricultural and
local freight road. During the war

ald
°f them, including New
YorkflY?
Central and Pennsylvania

AA

combined
change

was

steel

for

the
tirmftii
invoIve disproporlyiheavy labor forces. Un- way from 49.9% for Central of
SdUsnaineIy'Kall0' -h6se are the two There
ThPrf13
24.5% for Virginian.
trans¬
pos^blc 7to realize
*{• has economics
been im- portation ratiosroads whose
possible
above 45%

ycaT 19/fr"e jn the prewar

the

faSrnvearThejndUS5ry 3S 3 whole
rafL £
11 a Asportation

fnr?

combined

basic

a

tn+ai

fre^hfTfi businTess and 1-c.l. fa"°
°J roughly
40%. Ratios
individual
roads ranged all

of an individual road
because of territorial factors is to
be found in the Denver & Rio

road.

pronounced
of

ample of
character

The center of population was mov¬

and

I

moving.

was

nor

the situation in the

was

com¬

made

St.

migrating industry

countries

be

was

of detriment to the New

was

roads in

in addition, that I

further

no

mitments

the

England carriers but just as ob¬
viously it was benefiting the rail¬

have

to

to 4he

cite just two examples.
this

been di¬
to the European phase of

rected

highways.

the country.

of

moved

Aid to Other Countries

comments

excellent

an
advantage to
Non-rail competition

The textile
industry had a tendency to move
south, and shoe manufacturing

through

My

inter¬

area

gave

tions

(4) Appropriate at this time an
airiount no greater than the actual
needs that are shown to be justi¬
fied

compact

a

not, however, the only influence.
The roads in this
territory were
also adversely affected
by the mi¬
gration of industry to other sec¬

dependent agency free from poli¬
tical influence

competitive in that New

with

trucks.

(3) Establish for this study and
the

was

England is

the United States

on

In part this deteriora¬

area.

tion

aid by Europe, and the

effect of aid

overlap the competitive in¬

may

agencies.

.economy;

those

same as

IS oLbUSlrVhan
&
Ohio.
Virginian Chesapeake
has
virtually

-

our

the

and

thi

summarize my

as follows:
Continue urgent relief of
human
suffering
by
proven

of

iavor

vffirfS d°tS much IcI' business!
interest in ?^eVer.' has even less

*

use

^fCai!S? Jhey represent the heaviburden (50%, or more, of
thev are
a°rSerless g
,e.xPensGs).
Also,
they
subject
to changing
eoS„nr0TrhSSiveIy
as
hourly
wages
go up. There are quite a number
management
whim
than
ar!
lrSldTati0ns
that
affect
labor
costs, and again many of them are most
moit of
o?atkCe
k°?tS Which
makG UP
the balance
of operating

ZvoZ/f'the"
i^3%'wage road
spread
in
of the low
wid-

r,oiih

<1)

27

originally naid

*

.

position

that

stability of
This should be

the United States.

from time to time.

•:.•••

road

a

preserve the economic

only to review
frequent intervals and make oriljr
whatever provision is indicated as
necessary

than

(1019)

were

the

we

experienced. I say this
advisedly, because I believe firm¬
ly that it is exactly the thing

commitment be¬

the

CHRONICLE

thing that could
happen to the world. Only through
continuance of the stability of our

the

the fantastic

cost of government at

yond July 1, 1949.

in
the

fear.

For

weakness in

placed on the
people, because, after
all, it is their hard-earned money
which is at stake. Congress should
refuse to appropriate one dollar
more than is absolutely necessary.
I believe further that Congress

be

anything.

greatest national debt in all his¬
tory, and this debt creates a basic

burden that is being

sion

Russian

quence,

American

no

of

billion

FINANCIAL

have at stake.

we

government spends or gives
away
is at the
expense of every Amer¬
ican who earns
anything or owns

far

300,000,000 of the amount asked
may be used only in part. It is the
clear obligation and duty of Con¬
gress to think primarily of the

make

Because

A

16 years
we, as a nation, have been
living

July 1, 1949 will save Europe
but that anything less will be
money "poured down a rathole."
His logic is a bit confused, partic¬
ularly when he admits that $2,-

should

number.

a

Americans to be misled. But
the cold fact is that whatever our

I cannot subscribe to the Presi¬

800,000,000

or

for

:

dent's position that precisely

.

not

&

for

the

Mr.

seventh

Hamden, U G. Botts

Charles

S.-

•

Godnick

w*efe

named for directors.

Shields Named Director
Cornelius

Shields

&

Shields,
Co.,

and

partner

in

Wheelock

Whitney of the Whitriey Land Co.
were named

directors of t)evoe &

Raynolds Co., Inc.

•-

cpnsecutive 1

28

FINANCIAL

&

THE COMMERCIAL

(1020)

CHRONICLE

A New Look at Inflation
prices

(Continued from first page)
future

of

banking

general

and

business.
While

cannot face the future

we

with certainty,

and must
keep well informed about current
developments affecting our oper¬
ations
and regularly weigh the
likely
alternatives
which may
confront

before-have

Never

us.

needed

appreciate

to

stability of the nation as a whole.
Reckless bidding up of prices or
unwarranted contractions will be
equally dangerous for us all in
coming months.
The past year has witnessed the

greatest peacetime prosperity yet
attained, and especially in the
Seventh Federal Reserve District
the

services of
and com¬

goods and

industry, agriculture
merce
overwhelmingly
the

domestic

markets.

foreign

and

include

demand in

heaviest

in

items

supply and in the output of goods
and .* services.
Since
1939
the
money supply in this country has
approximately tripled.
Physical
production, however, has expand¬
ed
75%, and living costs have

employment occurs.
While scat¬
tered instances of layoffs are now

risen about 65%.

imminent.

Swollen

War

Money

We
tion

remember

must

resulting

supplies is a world-wide
phenomenon. In France, for ex¬
ample, an eightfold increase in
currency, accompanied by no in¬
crease in over-all production since
1939, lifted the French price level
about eight times prior to devalu¬

depleted, they are in many re¬
spects more dependent upon their
regular wage and salary checks
today than at any time in recent
years.
Moreover, as seen, their

ation.

basic confidence in the future has
led

supply has occurred since
before the war, but a 40% rise
in industrial production has kept

showed

the

level

price

from

more

than

clouds

Some

ap¬

issues, persisting
food shortages, and the prospects
for larger-than-expected Federal
expenditures for foreign relief
eral major wage

The

half of
most

rampant inflation in the history of
this country—an inflation from
the effect of which none of us

driving forces of
expanding purchasing power and
willingness to spend on the part
The

escaped.

of

business

firms

and

consumers

proved much more dominant than
the concurrent distortions brought
about

by ,spiraling

costs,

wages,

and profits.
The disease
rapidly, but the patient,
although reeling, remained on his

prices,

spread

being
made.
The shift toward living
essentials and away from luxury
and semi-luxury items is quite

able.

employment increased by about
2%, and physical production less
than 5%.
Personal income, how¬
expanded much more, rough¬
ly 12%, but most of this increased
dollar purchasing power was off¬
set by the 10% rise in cose of liv¬
ing during the same period. In
short, as the result of a year's
effort, we achieved little more
than the ability to pay higher
prices for roughly the same vol¬
ume of goods.
The Midwest and
the
nation
clearly
have
been
"caught" in an inflationary spiral

ever

which

reached

has

all-time

rec¬

ord

heights for this country. In¬
variably, as our history reveals,
intense inflationary periods are
followed by severe setbacks for
business and employment.
There
is no reason at present to believe

that this worst of all American in¬

flations will end otherwise.

Our

principal hope is that we can ad¬
just to more normal conditions in
cuccessive stages rather than all
at

The

once.

sooner

the

end

of

make
forward strides for prosperity on
a more stable and enduring basis.
inflation, the

sooner we can

economic

Whenever

distress

spokesmen for various
groups
engage
in the popular
pastime of seeking a scapegoat as
impends,

the basic

cause

for the trouble. As

prices have spiraled upward, all
major
groups — Government,
farmers, labor and business—have
been pointed to as the underly¬
ing cause of inflation.
However,
if there is any primary cause of
our
war
and postwar inflation
which deserves emphasis, it must
be the increase in our money sup¬

ply

as

the

public

debt mounted

increase in

any

erates

focused

more

production

which

Hence,

lower demand priority.

whether

we

inflation

less

or

and

do

consumers

in

face

in

changes




in

a

^

with

it.

Volume
is

Here

Credit"

Consumer

of

evidence

of

a

budget

"squeeze" which has many impor¬
implications for outstanding
credits held by banks and others
tant

and for the future volume of in¬

and

stalment

account buy¬

open

months the new up¬ ing. The principal task of those
inflationary power un¬ who are immediately concerned
questionably has been supported with consumer credit now is to
by a sharp rise in private debt. see—as most are—that undue use
Whereas, as shown, employment of such credit is not made in fur¬
and
physical
production
have ther upbidding of prices or in
shown little gain, and incomes and over-extending the presonal finan¬
consumer
prices advanced mark¬ cial resources of individuals who
edly, the rise in all types of credit fail to recognize that they have
has
been
still
greater.
During reached the limit to which they
1947, business credit from banks can supplement their income with
While credit is a highly
increased 30%; consumer credit, credit.
35%; and mortgage credit, 40%. essential and convenient aid to
Our money supply in effect has income,
it nevertheless depends
been expanded by superimposing a upon, and must be paid for out of,
Purchasing power in the
good deal of private debt upon an income.
enormous
public debt. A large- hands of consumers remains a

in

scale

contraction

supply

in

our

dominant

money

obviously can have important de¬
pressing effects upon the outlook
for banking and business in gen¬

These

eral.
While

the

very
recent price
commodity and se¬
curity
markets
are
properly
viewed as danger signals, there is

breaks in

to

date

the

that the

their

has

shaken.

common

that

It is

and

more

of

even

that working capital
now

from

are

10

to

requirements
15% higher

than at the outset of last year to
conduct

roughly the same physi¬

volume

cal

in

crease

for

of

purchases noted

has had

consumers

in¬

The

business.

credit

counter¬

a

in

new

recent

have

months.

continued

all-time dollar records

business

profits

have

been

ceivables

of

Outstanding
firms

most

stantially higher than at

re¬

are

sub¬

any

time

the outbreak of war. Fewer

since

firms,

are

moreover,

for

discounts

seriously
knowledge

This

taking
cash

cus¬

pay¬

profits

consumers

mands

and
for

record

business

de¬

is another re¬
sult of postwar inflation.
Current
high profits are being derived

experiencing
difficulty
in
meeting rising costs of even the

are

most essential items.

money

again appears to be in use
competitive weapon to ex¬
pand or maintain sales of indi¬
vidual firms. Although inventory

ings

past

the

during

occurred

year.
Anticipation of continued
heavy sales after mid-1947 lifted
many inventories and hence the
financial requirements for these

purposes

in most business fields.

.

,m-'

..

A

financial

of

resources

establishments

as

business

-

result of in¬

a

flationary forces has occurred in
expenditures for plant and equip¬
ment.
Not uncommonly, actual
payments have exceeded original
cost estimates from two to five

than

to

a

much greater

accumulated

sav¬

1

many

business firms face critical

problems of acquiring permanent
increases in both working capital
and fixed capital.

Since the initial

postwar decline in the stock
ket

September, 1946, it has
increasingly difficult for all
the most financially secure

but

corporations
funds in the
Business

to

over-all

business

strong.
firms

new

capital markets.
Still

earned
many

and

of

course

infla¬

Under

tionary conditions, rigid economy
in
Government
is
particularly
All

essential.
with

interest

of

will

us

watch

decisions made

the

by Congress in coming months on
critical

such

controversial

and

issues for inflation

as

foreign aid,
veteran

expenditures,

tax reduction.

all-time peak

in

public

February,

reduced

of $279

the
has been gradually
approximately $255

debt
to

1946,

billions, with a decline in the
marketable debt of $35 billion. At
the

present time, the Treasury is

carrying out its announced policy
of retirement of a portion of the

1

still

restraints

Additional

size and

or

the

upon

of purchasing power

use

in this country are also

to

scheduled

operative
effective

become

Voluntary limitations on
loans are being sponsored

soon.

bank

nationally and locally by banker
Discount rates at the

associations.

Federal Reserve Banks have been
raised in recent weeks throughout

vate

Interest rates

on

pri¬

borrowing and credit stand¬

ards

'

generally.

rising

are

On

.

financial

position
appears
to be

Most
well
established
have
large quantities of

purchasing

; power
and evidence
willingness and desire to spend.
Nevertheless,
high
break-even
points make most concerns vul¬
nerable to even small, 10 to 15%,
declines in sales.
Rising prices

February 27, reserve requirements
for central reserve city banks in
York

New

advanced

and

2%

Chicago
22%.

to

will be

The fight

against inflation, in short, is not
yet considered at an end.

a

helped contract the liquid
assets holdings of business firms
and
reduced the effective buy¬
power

of whatever cash

and

Government securities remain
hand.

on

Lending institutions, in

a

concerted effort to beat down in¬

and

forces,
more

are

becoming

reluctant to

lend

funds, particularly where there is

question of financial strength.
single barometer of business
health
will .bear
more
careful
watching in coming months than
the
financial
position of indi¬
No

vidual

business

firms.

Until

the

The end of the
—and

must

we

recent spectacular

after the

even

break

in

other

prices

present inflation
not forget that

commodity prices

most

remain

at or near
records—will come

their all-time

primarily as a result of two con¬
ditions: (1) saturation of the mar¬
through stepped-up output of

kets

expectation of or
stringency.
At
the present time it appears that
the
latter
condition,
financial
stringency, is a much more domi¬
(2)

goods, and

financial

actual

force

nant

than

the

In

former.

certain industries goods are

produced
to

ume

needs

theless,

now

fill

at

or

in

being
sufficient vol¬

exceed

immediate

current

basic

prices. Never¬
shortages of■■ auto¬

mobiles, agricultural implements,
turning
point
has
railroad equipment, electrical
clearly been reached, judicious
equipment,-petroleum,
many
restraint in business spending in'
building materials, and a host of
all forms is in order.
inflationary

Volume of Exports
•

An

3%

have

contrary, in

level

trends.

-

the nation.

Position

Financial

Strong
The

such

obtain

'

of

mar¬

in

been

businesses

which

well as in war have
major factor in deter¬

as

business

levels. Under these circumstances,

purchasing
power
has been at work.
Although ship¬
ments overseas account for only

On the

peace

"cost-plus"

as

have not
resulted in substantial strength¬
ening of the financial position of
them.

although

have quickly

Government

extent

form

public debt through the use of
contracts
surplus tax funds. Since January
reflected the spiral-,
1 of this year, over $3 billion in
ing upward trend in construction
the public debt comprising Gov¬
and equipment prices.
ernment
security
holdings
of
While no one can be sure how
Federal Reserve Banks, have been
much of the war and postwar in¬
retired.
The purpose of this pol¬
flation will become permanently
icy has been, and is, to restrain
imbedded in our price structure,
bank credit extension.
it is highly unlikely that the na¬
tion will return to prewar price
Limitation on Bank Loans
times

profits of the last

spending is linked di¬
employment and per¬

the

goods in such countries, and,

can

billions

highly important drain on the

volume is necessary to cover the
essential costs of any firm's op¬
erations.
On the whole the record

to

in

foreign currencies, e.g., Italy and
France, raises the price of Ameri¬

From its

Costs

;•

force since the end of the

consumer

aid

foreign

Construction

Plant and

High

and

year

and

benefits and

important contributory fac¬
tor to postwar inflationary de¬
velopments, of course, has been
the
volume
of
exports.
Here

High Consumer Spending

offset¬

stantial further drawing down of
foreign dollar balances and, still
important, large-scale cred¬

defense

dollar

Long experience has shown that

currently

more

the

unprecedented

war.

(1)

exports be,

imports

mining

combination of
sales

S.

U.

a

a

relatively small unit profit mar¬
gins. Stated another way, break¬
even
points
in
business
have
moved up rapidly in recent years,
so
that an unusually large sales

con¬

questions,

ting only about 40% of the value
of our exports, to maintain this
export volume will require a sub¬

become

primarily from

a

essen¬

how large
and (2)
how will they be financed? With
should these

in

a

Nevertheless,
group in the Mid¬
west appear
to be maintaining
their over-all dollar expenditures.
Consumer optimism—willingness
and ability to buy—is perhaps the
most undervalued single economic
consumers as

basic

remain:

however,

as

any

seeming paradox of record

Two

once

for funds

industry groups.

tinues.

manufactures

ment,

more

in most

needs for

overseas

foods and

of
minor
importance
about 50% now compared | now, also clouds the longer-run
with 75%
taking such discounts' export outlook.
during the war.
Business credit
Total Government expenditures
tomary

flationary

demand

tial

its

been

record

dented

proposed under the Marshall Plan.
Furthermore, the devaluation of

unusually large, but there also has
a

of
foodstuffs
and
scarce
materials, have had a highly im¬
portant marginal influence upon
domestic
prices.
The
unprece¬

part in rising business credit and

ing

firms

larly

allied financing.

business

by business firms of all sizes and

been

more

than even a year or two ago are
quite apparent.
Price—including
wage cost—increases alone mean

have

and

steady income or business man¬
agements in their production-sales
prospects

inventories.
why more money
to operate any given
business under present conditions
reasons

is required

buying trends
obviously have been reflected in
the sales and profits of individual

to set

con¬

expectation

force,

consumer

Total retail sales

evidence

basic confidence of
in

sumers

conclusive

no

economic

though more and more individuals
are
being "priced out" of mar¬
kets for particular goods.

in its rate of turnover

or

sonal income—to

sense,

assign

now

recent

In

surge

ditures for defense and war.

broad

consumers

the

Debt

Private

rectly

a

services to

buying of goods and

gen¬

period immediately ahead will de¬
pend mofe than anything else
upon the quantity of purchasing
power and what we as business¬
men

months, have meant reduced

commensurate gain in in¬

a

come.

"paper" profits

priced

The

are

sonal

purchasing power. It should
be overlooked, moreover, that

because of unprecedented expen¬
In

purchases

such

which

few

be

must

back

higher

ring in types of goods purchased
and
in the particular stores in

not

attention

they
had
to
be
immediately into

as

occur¬

upon

most

Increase

symptoms of advance stages
are easily distinguish¬
During the past year total

been

apparent, dictated largely by per¬
budget considerations. Ris¬
ing expenditures
for fuel and
food, following sharp price in¬
creases in these fields in the past

Symptoms of Inflation
The

tendency is
heav¬

present

shifts have

Marked

feet.

of inflation

the

ily, we cannot ignore the equally
apparent
trend
for
increasing
selectivity in consumer purchases.

and the
supply of goods being produced.

ployment, such as at present, the
possibilities of expanding output
appreciably
are
quite
limited,

of

instances

While

still for consumers to spend

power

1947 witnessed one of the

spectacular

1947

to postpone

purchases of certain badly needed

it can be seen must con¬
sider carefully the size of avail¬

Since under conditions of full em¬

Even

during

buyers

reluctance

a

are

inasmuch

goods and services in the face of
accumulation has leveled, substan¬
still rising prices and low per¬
tial expansions in inventory hold¬
sonal inventories.

Any appraisal of business pros¬

purchasing

obligations.

conservative

pects,

able

increasingly

assume

credit

large

and

great

second

rehabilitation.

and

too

to

them

ply and prices are up five times
with no gain in output,
A five¬
fold
increase - in
the
Mexican
money

savings commonly

wartime

their

In Finland, the money sup¬

its production of
goods too small, recently by di¬
rect action took away nine-tenths
of the people's cash in an effort to
rid that country of inflation.

terms.*

and

pect,

money

1947, particularly in

dollar

realistically we must
add, are not prepared for, an in¬
terruption in their incomes. With

that infla¬

tripling. The Russian government,
sensing that its money supply was

peared on the business horizon
last spring, but the outlook im¬
proved sharply during the sum¬
mer because of settlement of sev¬

widely

short, consumers do not ex¬

In

war-swollen

from

The demand for many

types of workers is still
reported to be strong.

Phenomenon

Wide

sharp rise in

no

the number of idle workers seems

World-

a

Virtually
every
barometer
of
business established a new all-time

high during

being reported,

instances these

plowed

Under these circumstances,
we can expect a change in over¬
all
consumer
buying to appear
when some appreciable rise in un¬
ings.

more

fully the importance of their de¬
cisions as they affect both their
own businesses and the economic

where

the volume and use of the money

other business lead¬

bankers and
ers

can

we

the result of changes in

are

Thursday, March 4, 1948

to 5%

of the total U. S. pro¬

duction, these shipments, particu¬

other items, persist with
mediate
expectation of
and

supply balance.

7th

Reserve

little im»
demand

'

'

District Conditions

In

concluding, I want to give
advance
highlights from
the just completed 1947 study of
operating results from member
a

few

banks in the Seventh Federal Re¬
serve

District.

This report is pre-

•

Volume 167

Number 4678

annually by the Research
Department of^ the Federal Re¬
serve
Bank
of
Chicago, and is
widely followed by bankers and

THE

COMMERCIAL

CHRONICLE

FINANCIAL

&

Corn

pared

others

as

of bank

The

accurate

an

operations and earnings.

effect

of

mounting infla¬
upon
Seventh

tionary

pressures

District

member

1947

reflection

banks

during

is very evident in these

sults.

Gross

slightly

re¬

earnings advanced
than 7%, chiefly as

more

result
of
the
substantially
larger loan volume and
some
slight upward movement in in¬

a

terest rates charged.
The expan¬
sion in loans as more and more

businesses and

consumers came

banks to borrow

the

was

velopment

on

1947

operations.

bank

costs

The State of Trade and
large carbon steel bars.

the semi-finished
whole
the

earnings,
during the

larger
anced

to

As

bal¬

percentage of total earnings,
recoveries

and

other

profits

The resulting

ratio of net profits to total

ings

26%,

was

1942.

the

earn¬

lowest

since

Net

profits to total capital
dropped to 10.5% from

accounts

12.5% in 1946.
Nineteen
seven,

good

and

forty-

the whole, was a very
year
for Seventh District

which

banks,

new

and

cult

problems

The

year

greater

but

had

to

be

faced.

for

still

statesmanship.

vital to the eco¬
of this
country at the

more

nomic life

time

..present

in

year

calls

financial

Nothing is

a

increasingly diffi¬

ahead

soundness

than

of

its

the

a

test

severe

The

day

of

Nor
the

American Iron

of this week

large
price level.

some

were

current

and

agri¬

respon¬

battle

the

inflationary

finally has turned. We

not assume that it has. Such

price

breaks

enced,

as

recently

however,

warning of still
to be faced.

are

more

can¬

sharp

the

ago

94.4%

This

indicated

was

week's

shown

a

operating

1,694,300 tons

month

a

rate

was

year

ago.

rate

ingots and castings

FREIGHT

LOADINGS

of

adjustments

sible

steps to prepare for them.
Continuation of price declines in

the

commodity and security mar¬
kets, however, does not necessari¬
ly mean corresponding drops in
such

other

ment,
In

measures

as

employ¬

income,

and expenditures.
sections of the Seventh

many

District, recent price breaks
being judged
overdue,"

"hope

sumers." To the
and

other

in

1947, and
in

week

94%, while

equivalent

is

need

not

downward

are

ago and

1,651,900 tons

touch

spiral,

cumulative

a

off

a

deep

particularly

goods will have

unfavorable

effect

business expectations gener¬
ally and induce unwarranted fears
upon

and

ADVANCE

9.7%

together
greatest

seek

of

28,687

cars,

increase

an

/

1946.

9.5%, in

3.7%

or

of

82,095
'

'

;

possible

promote
economic

bility1 through

banking

and

We

practices.

sta¬

policies
not

are

the

cur¬

rently experiencing such stability.
Further

inflation

flation will have

or

serious

de¬

and

far-

severe

reaching implications for
tion and

our

ended

our

na¬

Arthur
in

C.

Vilas

Knies, general part¬
& Hickey, members

of the New York Stock

died

on

Exchange,

Feb. 27 at the age of 47.




sharp

setback

prices fluctuated

March

1,

and

AUTO

ago.

CLOSE

of

POSTWAR

TO

trucks in

and

cars

P^AK

the United

States and Canada

again reflected substantial gains the past week.
Estimated output of cars and trucks in the United States and
Canada the past week amounted to 119,425 units, or only 1,200 short
of postwar record set in mid-December last year, "Ward's Auto¬

week

Report"

in

the

with

compared

revised

a

126,550

total

units in the

week's

United

past week.

•

comprised 84,138
Canadian

FAILURES

Declining

OFF

and 29,897 trucks built

cars

assemblies

; ' •///,

•;

BUSINESS

commercial

total

States.

totaled

•v,;- '

•

SLIGHTLY

IN

units the

5,210

WEEK

HOLIDAY

little in the holiday-shortened week ending Feb. 26,

a

and

industrial

failures

numbered

93, reports Dun &
Eradstreet, Inc.
Concerns failing fell off from the preceding week
of last year.
While failures were over six times as numerous as
in

the

of

week

same

the

low

years

of

closing with probable loss to creditors
in

as

the

corresponding week of

Most

In

both

the

of

and

more

week's

totaled

79

a

1945

1946,

and

only
1939.

were

prewar

a

third

heavy

as

/

in

the

was

only industry

mortality

or

trade

group

in which

increase

an

during the week.

appeared

compared with 36 in the

only

line

other

week of 1947.

same

of business

with

large

a

Retail trade

failure total.

was

the

Thirty-six

retailers
a

to

failed, down from last week's 45, but up sharply from
ago when only 22 concerns in this trade closed with loss

year

middle

Atlantic

Pacific

and

heaviest failure toll, accounting for

and

in

failures
of

States

continued

to

22 and 18 respectively.

have

1947

the

were

in

six

WHOLESALE

Pacific.

Despite the low number in most regions,
consistently heavier than in the corresponding week
of the

nine

FOOD
in

geographic regions.

PRICE

INDEX

AT

into

the

moved lower

prices for foods continued irregular this week
again downward. Twelve of the commodities
Dun & Bradstreet wholesale food price index

as

at this

time

last year

when the trend in food prices was

sharply upward.

-

•••

.

The index's chief function

is to show the general trend of

food

prices at the wholesale level.
WHOLESALE

COMMODITY

PRICE

INDEX

TAPERS

OFF

IN LATEST WEEK

Dun

registered
to

276.81

on

most of the

&

Bradstreet

mild

a

Feb.

drop
24.

daily wholesale commodity price index
in the past week, from 277.23 on Feb. 17,
The index moved in narrow range during

period. At this time

a year ago

week

movement.

although

there

were

some

TRADR

MODERATELY

TURNS

interest in

Consumer

Spring and Easter merchandise increased
Favor¬
able response to promotional sales generally resulted in a moderate
increase in consumer buying during the period ended on Wednes-4
day of the past week, Dun & Bradstreet, Inc., reports in its survey
of trade.
Retail dollar volume was moderately above the level of
the corresponding week a year ago.
Some clearance sales stimu¬
lated the buying of Winter apparel and house furnishings.
the

as

There

clothing

was

sections of the country improved.

many

a

with

attention.

>

in

weather

considerable increase 4n the demand for

items

for

suitable

Spring,

particular

drawing

Easter

'

Millinery departments were crowded with shoppers and inter¬
est in handbags and fancy blouses was very favorable.
Men's good
quality worsted suits and Spring coats sold well, as did pajamas1
and haberdashery.
There was a slight decline in the buying of
jewelry and the response to clearances of fur coats was slow.
Grocery dollar volume was steady at a high level.
Housewives
continued to seek substitutes for high-priced meats and butter;
declines

slight
effect

The
weeks

in

decline

over-all

of

generally

foods

some

was

for

more

increase

slight

a

fish

shredded

food

in

estimated at not

was

There
and

prices

the

had

little

buying.

on

Lenten

in

use

prices

during

the

past

two

than 3%.
consumer

and

dairy

purchasing of dried
products continued

sell well.

•

^

and household repair items were sought in
some sections of the country.
While interest in cheaper upholstered
furniture was slight, good quality dining and bedroom suites were
cleaning

Spring

heavily purchased.
and

ware

There was an increase in the buying of hard¬
appliances and the supply of branded

electrical

small

for

volume

Retail

the

country

in

period

the

ended

on

estimated to be from 9 to 13%
above that of a year ago.
Regional estimates varied from those
of a year ago by the following percentages; New England 6 to
Wednesday

of

14

to

10,

East

last week

18,

South

an

trade

9, Middle West and Southwest

5 to

11, Northwest 8 to 12 and Pacific Coast 5 to 9.

to

Mild weather in many

by

was

sections of the country was accompanied

increase in retailer buying. The dollar volume of wholesale
moderately during the week and continued to compare

rose

favorably with that of the similar week of last year. While buyer
attendance at the wholesale centers declined considerably,
there
was a substantial increase in mail and telephone orders.
Deliveries

the

weeks.

Department store sales on a country-wide basis, as taken from
Federal Reserve Board's index for the week ended Feb. 21, 1940,

evidences of

a

irregular
steadying

,

from the like period of last year.
This compared
decrease of 3% in the preceding week.
For the four weeks

increased by 15%
with

a

ended

Feb.

21,

1948,

sales

increased

and for the year to

by 7%

increased by 6%.

date

.

below the
level for the corresponding period last year, due mainly to the
fact that the week this year had five selling days against six
last year, because Washington's Birthday was celebrated on
Retail

trade

in

New

York

last

week

r

dropped

•

Monday.

According to the Federal Reserve Board's index, department
sales in New York City for the weekly period to Feb. 21, 1948,
increased *32% above the same period last year.
This compared

store

with

an

ended
rose

increase of 1% in the preceding

Feb. 21,

week.

For the four weeks

the year to date

1948, sales increased 13% and for

by 8%.

-

•

"

the figure stood at 250.58.

Price trends in leading grain markets were highly
last

WHOLESALE

AND

HIGHER

LOW

against eight advances, bringing the Feb. 24 figure
to $6.61.
Off 15 cents, or 2.2%, from $6.76 a week ago, the current
index represents the lowest level since Aug. 19, 1947 when it regis¬
tered $6.57.
It is, moreover, practically unchanged from the $6.62
recorded

RETAIL

generally were more prompt than in previous

1

SIX-MONTH

with the general trend

entering

6,360,400 in the. previous week.

the

In both

regions business mortality was considerably lower than a
ago when 32'concerns failed in the Middle Atlantic States

27

a

to the

due

Contracting in the West was much slower than in recent weeks.
Business in foreign wool markets was reported quiet but price**
remained firm to
higher.
Imports of foreign apparel wools re¬
ceived at Boston, New York and Philadelphia in the week ending
Feb.
13
represented 4,832,800 clean
pounds, as compared" with

7

creditors.
The

of

was a strong feel¬
slump in other commodities
possible revalution of the pound sterling.

visible

major appliances improved in some areas.

The number of manufacturers failing rose from 34 to 40 which

/

and fears

wool market was dull last week.

raw

price tone appeared firm there

of caution

ing

to

of $5,000 or
losses under $5,000.
moderate decline from a week ago was

failures with

14

/;,/■ ■//.•.■
Manufacturing had the largest number of failures this week

and

holding aloof pending further price developments.

Although the

businesses

liabilities

involved

failures

against

liability classes,

evident.

making

of

same

1941.

Last

in

This

states.

in

.

LATEST WEEK

Production

markets

spot

.

1947.

OUTPUT

IN

in

Trading in the Boston

above the corresponding week
cars, or 11.4% above the same

The Feb. 28, 1948 week was the eighth con¬
production exceeded the 5,000,000,000 kwh. mark,
the 16th such week in the history of the industry.

banking system.

Arthur C. Knies Dead

ner

ago.

secutive week that

The

t

year

reached.
It was, however, 454,836,000 kwh.,
of the 4,797,099,000 kwh. turned out in the week

excess

Fluctuations

to'

one

ABOVE

1948 when the peak was
or

liquidation.

The objective is clear. We must

.

tons

industry for the week ended Feb. 28, 1948 was 5,251,935,000
according to the Edison Electric Institute.
This was only
2,067,000 kwh. below the output reported for the preceding week and
184,495,000 kwh. less than that produced in the week ended Jan. 24,

strong
demand
prospects.
The1
these
greatest danger lies in the possiweek
bility that continued spectacular
some

1,705,100

tons last week,

The amount of electrical energy distributed by the electric
light

ex¬

among the numerous Midwest in¬
dustries which still appear to have

declines in

to

against 1,687,100

as

operating

an

and power

extent that price

adjustments

week

a

cautious

were

ELECTRIC PRODUCTION SHOWS VERY LITTLE CHANGE

con-'

for

of

Inquiries

71,114

increase

are

pected and provided for in mak¬
ing business and consumer
plans,

they

range

an

an

"healthy," "long !

as

and

suffered during the two pre¬
in a fairly narrow
in the past week with closing prices only slightly below

Following the

those

cars,
or 9.7%
above the preceding week due
improvement in weather conditions which have been
interfering with industrial and railroad operations.
It represented

largely to

sobering

We must take all
pos¬

corn.

buyers

of

of steel

experi¬

a

previous

14
cents
Trade, in
weeks.
The

increase

month

rate

110,536 units in the preceding week and

of

two

Loadings for the week ended Feb. 21, 1948, totaled 805,376 cars,
according to the Association of American Railroads.
This was an

A

motive

tide

the

of

shipping demand and continued small coun¬
Wheat showed further moderate declines
as
the result of selling induced by reports of snow and rain in
parts of Kansas, Oklahoma and Nebrask, and a continued absence
of Government buying of cash wheat or flour.
Trading in grain
future on the Board of Trade declined to 233,037,000 bushels, ox
a daily average of about 24,000,000 bushels,
against a daily average
of 52,000,000 bushels the week before.
Domestic and export demand!
for flour continued slow.
Business in lard was quiet with prices,
again tending lower.
Heavy market receipts pushed hog values
downward following last week's recovery movement.
Sheep prices
also declined rather sharply with cattle prices fairly steady.
try offerings of cash

Mon¬

on

on

declines

severe

were
fairly numerous but traders
commitments.
Total sales reported in
the ten spot markets amounted to 97,900 bales in the latest week,
compared with 95,800 in the previous week and 136,600 in the same
week a year ago.
The market was stimulated to some extent by
short covering and commission house buying and the expectation
that the Army would re-enter the market soon for cotton for Japans
Consumption of cotton during January totaled 860,000 bales, accord-/
ing to the Census Bureau.
This compared with 753,000 bales in
December and 950,000 during January, 1947. Consumption per work¬
ing day during January averaged 40,000 bales, the largest for any
month since last April, and compared with 34,200 in December and'
42,200 in January a year ago. Textile markets were inactive witK

It is still not clear whether
recent
price
declines
actually indicate
the

the

ceding weeks, spot cotton

Steel Institute announced

strength,
rising
about
the Chicago Board of

displayed
marked
during the week

to

2*

rise reflected improved

the

sibility before them.

that

contrast

anxious

consumers

operating rate of steel companies having
94% of the steel-making capacity of the industry will be 94.6%
of capacity for the week beginning March 1,
1948, an increase
of a point or 1.1%.
This compares with 93.6% one week ago.

financial

industry,

culture, and commerce/ At no
time have banks and other
finan¬
cial institutions had more

.

concludes.

kwh.,

hundred

on

member

rises were simultaneous, it is understood the
timing in steel price increases was gone into,

PRECEDING WEEK

lower during 1947 than
1946,
from loans increased.

declined 5.5 points.

Iron

steel

the

these

as

earnings just
the rising expenses.
gross

losses

a

net

states, will have

paper

gross

cause

held

flationary trends, security profits
and

paper

"The

to

Also symptomatic of recent in¬
were

of

break in scrap quotations.

Operating

year

situation, the

future.

Age" scrap composite this week is unchanged at $40
ton, which also represents the low for the year to date.
Supplies are easier but there was no indication of any wide open

side of

however,

phase

trade

per

during the year,
reflecting not only higher wages
and salaries but larger
expenses
in
carrying on virtually every
phase of operations.
Total net
current

This

near

The Federal Bureau of
Investigation swoop-down on steel com¬
panies last week had all the earmarks of a bee swarm.
While the
investigation was originally intended to determine whether or not

12%

rose

even

be corrected in the

lo

key de¬

the income

Industry

(Continued from page 5)

bushel

per

(1021)

*In

comparisons allowance should be made for
closed in many cities on Saturday of this
in observance of Washington's Birthday.

using year-ago

the fact that stores were
week

last

year

fpr

30

(1022)

THE COMMERCIAL

&

FINANCIAL

CHRONICLE

Thursday, March 4, 1948
arising

in middle and eastern

Europe, and one of the imperialist
of great strength in Asia has been killed off,
leaving the other — which happens to be the same in
both spheres — relatively speaking, strong beyond all

As We See It
(Continued from first page)

feasible to advance their interests

the
to

by the creation of puppet
slogans of Utopia, not only Russia but

aflame with

states

other

make

comparison with the past.
inclined

imperialistic nations would not have been slow
of the

which

make

to

of

use

voluntary
action,L
judgment of in¬
formed men experienced in the
banking business as they apply
sound principles to
varying local

any

of

the

fact

that

fering

she finds herself.

globe is in a sort of us is plainly indirect and a considerable distance in the
philosophical ferment, deeply if blindly dissatisfied with future. It is certainly not inconceivable that the whole of
the old order, and too
ignorant of history to realize that it may pass before there is any clash of real interests be¬
these prophets of a new and glorious order are but advo¬ tween
the two countries.
cates of age-old fallacies
long ago tried and found wanting
Meanwhile, certain truths are evident enough.
—tried either in actual practice or in the crucible of
careful,
Merely "getting tough" on the air and in the news¬
dispassionate logic.
papers accomplishes nothing except to goad the Russian
But tactically and even
strategically, we have per¬
leaders. It would be equally futile and foolish for us
mitted ourselves to be maneuvered into an awkward
posi¬
to fritter away our strength in
trying to defend inde¬
tion.
Consider the matter, first, in the
ordinary terms of
fensible areas. It is moreover essential that we take care
world politics.
For many decades the situation on the
not to strengthen Communist notions
among our own
Continent of Europe was held in
balance, relatively speak¬
people by preaching ideas closely akin to theirs.
ing, by the existence of two rival powers too nearly matched
In all such respects our current
policies are in need
in
strength for either to wish to prod the other to the point
of careful review. Who will take the lead in
correcting
of actual armed conflict.
The one, of course, was Russia
this situation?
and the other was
Germany.
Prior to World War I each of these two arch rivals
had support from other countries — so that when hos¬
tilities finally broke out in 1914 the
fighting was
between a group of so-called Allied Powers and the

Central

Powers,

precursors

of

the

"Axis"

and

The

While

credit
at

must

bank

*

leading it.

loans

have

perity and
which

in¬

of

increased
,

in

price.

Business

■

more money or credit to
maintain or increase its volume of

sible

production while there are stead¬
ily increasing wages and increas¬

inevitably clash.

ing

Earlier Blunders

prices

chased.

of

everything

flation

;

-

.

over

a

great deal of the ex¬
in loans is the result of

we

faced

are

a

con¬

high rate of production t>

increase

the

supply of goods as.
against the over-supply of money.
We

know

meet not

the

have to

we

produce to,

only the requirements of

United

States

consumer, but
also the needs of hundreds of mil¬
lions of foreign consumers. Under

these

conditions, if absolute credit,
are applied to bank lend¬
ing, they can easily do more harm
controls

than good.
Laws are not flexible.

always have to
alike.

eryone

few

a

Controls'

be applied to ev¬

They

restrain

may

unwise

lenders,
but
in
those few, they may
to prohibit the lending ne¬

restraining
serve

to

cessary

maintain

present

our

high level of production.
passed to
out

assure

all

The law'

inflation may turn

cure

be

to

that

needed

was

unemployment

to

to

push
the
economy
into a depression.
We have just as much reason to

which

creates

inevitable

follows

in¬

an

demands

great

And,

or

on

;

;•>

change

-

must'; not forget that

we

government

dov

controls

rapidly

not

conditions.began in an at-mosphere of pessimistic comment
by business and economic fore-'

The

,

the
banking business, it creates
losses; and the manner in which
the banking business meets a re¬

pur¬

A

We know

the necessity to have

tinued

pros¬

stability,

will extend"

later, effect, vThe

depression

the country
particularly at

and

of
stopping inflation, j Theproblem is to select a remedy for

reason, eau^lly
important. The greater the infla¬
tion, the more disastrous its pos¬

re¬

quires

time,

ods

sound

a

economic

an

and

can

bank

mechanism of

any

this time.

with

dan¬

tamper with the

patient.

tional objective

pattern

to

gerous

the illness which will not kill the

substantially, everything long period.
There is another
borrowed-money is used'for has

spell

day when their armies

whether appropriate or not.
I believe it is
extremely

a * deflation as
inflation.N
Every economist knows the meth¬

creased

Russia and

for the

following the

of the economy—not

European participants, chiefly France, England

consequently followed during which
Germany, both Mill harboring their age-old
ideas of expansion at the expense of the
other, prepared

been

and

avoid

(Continued from page 6)
have

and Italy, certainly emerged without much taste for fur¬
ther conflict on the Continent of
Europe. A considerable

breathing

Banks, Inflation

And Credit Control

those

nations opposing it. Germany was
badly damaged if not
crushed in that earlier conflict, but so was Russia. The
other

will

the

across

struggling under im¬
arbitrary rules, which
-apply
to
everyone
alike,
or

posed

device.

mankind

It will protect bank¬
and borrowers alike lrom suf¬

ers

Indeed, they have in fact at
What to Do?
times moved in closely similar fashion, and those in this
The
question now, obviously, is what to do about it?
country who seem to suppose that the Russian technique
is wholly new could well read our own history with profit. It helps little to say that it should have been foreseen —
except in the degree that such retrospection enables us to
Typical Imperialism
understand the true inwardness of the existing situation.
What we are faced with in Europe and Asia, then,
is, It appears obvious to us that the danger is more real than
so far as Russia is
concerned, nothing particularly new. It in those days when some of us had Hitler
landing in New
is a typical case of imperialism which takes full
advantage York on almost any Wednesday. Yefthe actual danger to
use

the

on

conditions.

less
advantageous position in

And certainly not

the

from

based

powers

as

But

casters.

as

1947

year

the freely

over-production
cession did not

predicted '

and business

six months there was a small
in

commodity-, prices,

loans,

in

and

re-'

In the iirst*

occur.

in

drop^
bank

.

industrial .produc¬

Germany took the initiative in making use of her posi¬ pansion
tion.
For a while it looked as if
tion; Russia doubtless feeling that time ran in her favor. the present high volume of busi¬ cession or a depression, when it the pessimists might;. be rights
ness
activity carried on at^irig- copies,, can affect the. whole fu-r
For reasons which in
Then, in the: last six months there'.,
retrospect appear almost beyond un¬ creasing price and< wage
'Wels;
-banking. Y't/YV:V• was a
sharp reversal of trend. We
derstanding, Britain and France
yes, and, in practical and the inability of'V biasnwas^ iti krifi> -addition to these obligations
rediscovered a demand greatly in
effect, the United States of America
felt it necessary to obtain new equity capital ^?th6s to^the public, (he economy, and to excess
of supply:? Fear' of a con¬
our. ' customers,
there is another
try to stop the eastward march of Hitler's legions. All three present investment
tinuing inflation -replaced fear of
While banks have not created fundamental
problem. \ That is:. the
led from incredible
possibility ;of a business de-r
weakness, as they say in bridge, and the present inflationary
Are the banks
.

—

—

result

one

was

that

France

was

Britain about finished before
and bring it to bear.

Meanwhile

the

we

completely

overrun,

could gather our
strength

going to meet their

responsibility for the wise direc¬
tion and

connected

is

use

inevitable

break

between

Russia

and

Germany had taken place. Russia was taking a
fearful beating, but it was also evident
that German
operations were not going according to plan.
By this
time, however, the United States had gotten so involved

course,

in the

mess,

and had

choice but to act with
vigor until our enemies were
brought to their knees. That, as the world knows, we
did with reasonable
no

dispatch, despite the fumbling and

But in the process we became

amazingly artful in de¬
ceiving ourselves. Germany and Japan had
already become
demons of the first order
as
they were in point of fact.
But now Russia, an arch
conspirator with Germany,, and
.by far the world's outstanding totalitarian, authoritarian
—

and

it.

They

' effort

to modify
specifically,

power

and

they

excessive

credit

for

purposes

which

out

substantial

as

a

factor in

can

bank

pointed

Japan!f

"

of

action in

of course, sheer bosh, but it took hold of the
imagination of a great many Americans, and
apparently
furnished the basis for much of the
secret dealing be¬
tween the then President of the
United States and the

*

head of the Soviet absolutist State.
One must suppose
that it controlled a number of vital
decisions which have
as one end result the
strength of the Russian
in

-

position

Europe and Asia today. Indeed the

more

documentary

information becomes available to the
general public the
clearer this fact becomes. At all
events what has hap¬

pened is that with




our

help,

one

of the mighty rivals

trol is
of

it

so

are

important; The elements
very simple.
While our
both

are

friends

and

customers,

banking

their influence

on the
money and
credit affairs of all phases of life
and
business.
Banks
represent

and

do

business

with the-

security of the future of

many

add"

machine

capacity,

a

every

deep

banking.

:.

reasoning,

..

is

this

The real problem is to
pro¬
tect the fundamental interests of

-

to

*

is

so

operating
loans

many

increase

which

demand

stimulates

proposals

trols

person

ture.

purchasing

without increasing production.

over

the

to

use

for

For

the

govern¬

establish

con¬

"

More

past

It

and expansion

YvV-\Controls
V

»r

bank credit.';

Proposals

about the fu¬

concern

tend

may

of

Today

general

duction

ment

has

the

about at

direct effect

on

to

power and, as a result, can add to
the inflationary pressure. Our pro¬

depositor and borrowing custom¬
What happens to them has a

ers.

It was,

the banking, business.
Every banker should understand
why this problem of credit con¬

also they are part of
thousands of borrowers, all
is a most important one. This is over the country, who are com¬
because credit extended by banks peting in the open market for a
can be used so as to add to the
in¬ limited supply of goods and serv¬
flationary pressures; and also, be¬ ices, and helping to push up the
cause of the close and
widespread prices of these by bidding against
relationship of banks with all of ohe another. Loans made, not off¬
the elements of the economy and set by the payment of other loans,
field

est in the

Germany, Italy and

of

borrowers

Banking Responsibility

The

v Banking

.;v;

several

,

r"

.

years

we

and, in doing that, pro¬
tect the American system of liv¬

have had to meet continuing pro¬
posals to establish new govern¬

ing,

ment

everyone

we

enterprise,
know

banks

and

it.

and

For

bankers

progress, as
these reasons,
must

that,

anything at all, it
usual,-a year is a

permit

■

do

ev¬

and

will

controls

over

investments.
continue

to

bank
That

exist

credit

danger

unless the

erything they.can to keep the sit¬ bankers of the country prove that
uation from becoming worse. Our
voluntary ^credit
control
will
primary interest and the primary work.
If we do this successfully,
interest of everyone, is in the Na¬ we will maintain the
advantages
•

with;

1948

-

If this proves

going to

time to try to outguess
This is especially true

savers,
tyrannical regime, suddenly became in our
eyes ap¬ the
conservators,
the accumu¬
parently a champion of "democracy" and individual lators, and the producers; > of
wealth.
"liberty," a sturdy co-worker in the task of
They have a vital inter¬
freeing man¬

kind from the
tyranny represented by

they

are

that also will affect the future life

contributing
accelerating inflation.

an

or

into

go

the country alerted to the dangers
of inflation.
Vf/Y.

proves

it

unwise

be

ing policy,

We

pression.

efriedurage and permit the govern¬
ment to assume it? The answer to

of

or

a

of bank credit, which
matter of fundamental bank¬
use

not

can

expansion

unnecessary

their*

control

circumstances

any

should

within

and,
an

~

a

with

every

under

both in Europe and
Asia, that Japan, deciding that the
time had come for her to
act, struck first at us. From
that moment, we were, of

the dark, early days.

problem,

vital interest in it,
and they do have responsibilities

and they do have

as

time.

long

Also

government
when

this

when the
has

government

to inflate

is

the future.

call the turn and'

can

the

power

that

or

the

deflate at will.

I

only need to remind you of the
lowering of the support
prices for government bonds and
recent

its effect

the investment

on

ity market.
-

The

banks

have

secur¬

"

;

,

always

been

willing to take
to

meet

aggressive action
national problems.
This

done

was

dom

in

the

Food-For-Free-

Campaign, War Bond sales,

Ration Banking, V Loans, Recon¬
version Loans, and in the program
of the Small Business Credit

com-

missiqnVj As a free enterprise, we
have-in.-: the past and can in the
future- rapidly adjust our. attitudes
and acts to the circumstances, just
as

we

are

ernment

doing now. .The gov¬
not, and does not do.

can

this- easily.; For that

reason,

our

voluntary;: anti-inflation, program
is essentially sound.
It has been
received by government officials,
members of Congress, the press,
and the publie with approval. The
President, the Secretary of ■ the
; Treasury, the leaders of the Sen¬
ate

and

their
;:

House

have

all

given it

endorsement.:^:?^Y- Y;~

In the

Economic Report

President;
Congress
Truman

transmitting
on

said:

Jan.

14,

"Within

:

of the

to
the
President
-

the

fortnight the leaders of our
mercial
bankings
system

last
com¬

havd

Volume 167

Number :4678

taken positive
organized action to
secure

the curtailment

tionary expansion/of
by

their

this

succeed

of

infla-

bank

credit

members./I

far-sighted
in

to all

If

and

this

further

credit

We

of

way

encouragement.

Collectively.

credit

Your Association has

with

'

support.

for

banks
made

wish to emphasize these
points:
*-

(1)1 remind you again that the

banking business has

substantial

a

stake in properly

meeting the in¬
We,must not fesd

flation problem.

inflationary
uting to

.pressures by contrib¬

supply and improper
use
of purchasing
tpower, under
these circumstances/At the same
over

time, we must continue to extend
the credit necessary to support and
increase
production. • We
must
maintain
our

sound, assets

and

retain

liquidity And an adequate
of
lending power/to.

re¬

serve

use

when

'and / where/it.'wis-.' most

customers

This

Too
run

or

former

periods

and

nature

and

then

the

when

credit

when

modify

downside

with

ample

available-.credit.

cation

Control, >

(2)

less.

ment to

expression

own

ef¬

fective

in¬

inaction."

Selective

action emphasizes the limiting of
credit which adds to the
consump¬
tion

demand

for

granting credit for
add

the

to

goods,

while

purposes

which

immediate

supply

of
goods. It is just as necessary for
banks to have credit freely avail¬
able to maintain a high level of
production as it is to restrain the
of credit

use

tionary

Our "future

in

an

the

on

infla¬

economy.

welfare

depends on
operating at its full

production,
power

which has

impact

sound economy.

a

•

Today every loan should be re¬
quired to meet two tests instead
of one; not

make

of

but

also

test

a

the

loan

portunity-;

proceeds of the loan will be used
contribute

to

to

already existing

v,-"v'"-

Mflationary;pressures.
:

(3) For 14
test

ho

of

there has been

years

borrowers. ' Everyone,

including the banks; has been rid¬
ing on a manufactured prosperity.
Just how fictitious and ^dangerous

'it

is,

not'

can

becoming ap¬
time for caution.

now

This is

parent.
We

only

is

a

the

assume

of- activity

level

will

indefinitely, the

tained

present
main¬

be

odds

are

piling up against it/ High costs
plus even a modest decrease in
volume

sales

businesses

point/

below

Losses

level

of

than

in

year.

will

the

will

break-even

with

a

much

higher
peacetime

prewar

any

many

occur

still

sales
-

throw

/ to

now

save

Cautious lending
will protect every

at this
interest

the

banks represent. This is true
because
what
we
do
today to

modify and control inflation is
the

time

same

defense

a

all the

penalties of a recession or
depression which again will affect
every

interest related to banking.

'

Z (5) When
tion.to

flation,
that

we

talk of taking ac-

prevent

it

we

is

a

continuing

well

to

in¬

are

remember

inflation.

may use to

Any

avoid

an

methods

we

excessive

ex¬

pansion of bank credit will tend
to

reduce

heed

for

or

eliminate

excessive

an

of bank credit.
is

an

attack

on

the

An attack

the

later

contraction
on

other.

one

Both

excessive expansion and excessive
contraction

dangerous and. in
the past have had serious effects.
.

*

are

(6) Fundamentally, the




answer

spend

postpone capital expend¬

capital

a

of

nature,

not
vitally
immediately produc¬
tive.
The
pending
intensified
campaign for the sale of Savings

on

of

and

to maintain the American
sys¬

are

tem of

independently owned and

operated banks it will be

make

>

of

your

For

can

Coordinated

ac¬

effective—but, in this

the

immediate

objectives

will have to be placed above self¬
ish personal and institutional in¬
terests.

It

We are trying to mass right
thinking and right action within
the banking business and, at the

time, make the banks of the

same

country

centers

not

and

agree

said

here

about it.

enough to understand
with what has been
and

then

do

nothing
not to go back

I ask you

to your

business with any thought
that this applies to everyone but
It does apply to you—to ev¬
of you. We are depending

eryone

you to do something about
problem, and to stimulate
something about it.
What we propose is not limited
only to what is done in. banks.. It
is not limited only to the wise use

work to do its part in modify¬
ing the seriousness of this infla¬
tion problem.

And, be
public

you realize that
discussions and the

sure

constructive way you do
the psychological effect

at

with

This

ABA

proving

credit.

of

It

out

of

cess

the

this

in¬

life,

problems, and

of

the

a

the

to

and

of
can

can

The

suc¬

voluntary action by

preserve

mental

part

enterprise

its solutions.

bankers

help

is

program

that free

understand its

the

your

to individual in¬
credits.

work

using

of

respect

flationary

upon

direction

this, and

efforts is just as important as the
technical answers you may arrive

this

cludes

leadership in

to

others to do

and

of

their communities by putting the
whole force of organized banking

the

is

you.

action.

are

the

old

as

will

country

principle, funda¬

American

the

as

of

way

country

itself.

widespread in¬

neces¬

the - American

loans'

• -

other

already

of

their

ment

customers.,

money'

The

policy

dangers multiply if the
problem is not understood or if
it is ignored for reasons based on
what may be done by a banking

govern¬

has

been

or a competitor with
entirely differeht form of lia¬
bilities or merely for selfish rea¬
sons
of
institutional
profit
or
prestige.

competitor

changed to the extent of allowing
interest

rates

an

to

approach free
money market terms.
Of itself a
rising interest rate will tend to
restrain

credit

Federal

expansion.

Reserve

The

rediscount

We must not forget

rate

has been raised to l1/^/Reserve
requirements have been increase 1
2% in New/York and Chicago,
and

be

can

increased

One

effect

of

the

System's

serve

support

price

curities

has

curities

has

4%

of

Federal

Re¬

the

of

serves

loss

a

This

create

the

deposits

loans, in

re¬

to/.carry ..in¬
Jresulting from

a market

no

cer¬

estimates

are

of

is

what

to

the fact
be

may

done

achieve

to

new

some

attached

problems

penalties and

tainty of offsetting profits/ k//
There

there

while

these objectives

they will be tem¬
porary and at a modest cost, com¬
pared to: the possible penalties
arising for everyone if the infla¬

large
Government; Budget Surplus be¬
a

fore July of this year. If the
gov¬
ernment should decide to pay off

tion should continue to accelerate

large amounts of the national debt

and if the banks can

the

over

will be

tion.

a

It

next

have

few

months, this
definite deflationary ac¬
will

have
the

on

direct

a

banking

As you

deposits,

reserves,

the

and

and

security

maximum

availability of

business

loanable funds.

Wire

bankers

possibility

as

will

view

notice

a

to

ities

this

be

ing and stay in

a

move.

strong position
They will an¬

ticipate the Treasury and the Fed¬
eral Reserve using
every power
at

their

sure

on

command

bring pres¬
the availability of loan¬

able

funds.

look

carefully

ahead; of
of

All

bankers

at

them

government

affect

to

what

from

the

action

reserves,

ers

be

impact

which

deposits,

can

and

holdings of government securities.

The
these

of

Bank

/combined
forces

Liquidity

"operation

will/make

it

.

more

difficult for banks to maintain the
extremely, favorable- liquid position of
more

the..past;; From

careful

now

on

a

management of the

is

and

to

recognize
national responsibil¬
these

assume

in

extend

tion

and

Anti

the

beyond

of

an

If

-

Inflation

which

economy

the

mere

individual

action.

the

opera¬

bank

for

What

is

needed

coordinated action

on

the

bankers

are

to

do

their

part, each and every one of them
must
and

have

affected

a

realistic

appreciation

of

by

appraisal
the funda-

to

quotations

degree
of
speculative interest impossible to¬
day when requirements are 75%.
a

3)

page

teresting

question

by bonds for the high-grade
dollar

vestment

bly greater in
on

Al-f-

1925, when yields

bonds averaged 4.9%

compared with

the

available

after

now

the

as

2.9%

meager

recent

corporate finances and cor¬
porate profits, will prove to have
influenced
in
substantial

over

been

by over-pessimism.

measure

Conclusions
Selective

occurring
business
cur

when,

business

This

table

preted if it

would

be

misinter¬

taken

were

as

mean¬

ing

that 1925 and 1947 may be
compared at all points. In some
respects comparison would be im¬
possible.

For instance, there is no
of comparing today's inter¬

way

with

those

1925/

of

war

Unquestion^

ably, however, the present posi¬
tion

is

confidence

position.

than

to

the

was

the

At

poor

earlier

time

same

our

from

a Fight war
to
admittedly is one of
tending to keep busi¬
pressures upward.
Another

emergence
a

conducive

more

Cold

war

the factors
ness

difference

present

between

is the

and prices

inflated

1925

various

occupying

position,

least for selective

the

somewhat

a

and

and

industries

in line

downward

at
ad¬

of

to

sure

oc¬

The questions of
how well discounted

and

essential but still un¬
questions.
Regardless

are

what

view

business,
the

are

general

a

time.

answered

Points of Difference From 1925

declines

and
downturn is
now,

some

already,

rise in interest rates.

our

market, now two
years old, and flourishing still in
an
atmosphere of apprehension

in¬

incompara¬

was

whether

bear

current

However, che competition offered

it

one

seems

market

takes

toward

obvious

that

is

heavily spotted
with bargains. In the
thought that
we
are in
a
broad buying range,
investors might do well to engage
in selective equity purchase
oper¬
ations, with emphasis on deflated
quality

stocks, and avoidance of
marginal situations likely to feel
pressure even during a period of
continued

favorable

Recently

the

business.

market

has

been

substantially divorced from earn¬
ings and dividends. It cannot be

overemphasized,

however, that
the longer term almost the
thing that matters in stock

over

only

investment is

earnings and divi¬
dends, and their quality, depend¬
ability and trend in light of bal¬
ance sheet
development, changes

in interest rates and similar basic

factors.

justment.
1925

On the other hand, in
industries such as
and bituminous coal al¬

leading

ready
tained

no

collapsed, and con¬
promise of revival.

Sometimes

the

performance
future

Investment Outlook

had

stock

forecasts

correctly

business trends.

For 1948

market's

On

other

(Continued from page 7)
terest
bond

Tri

icy be influenced by stock market

a

future of

has

ates

made

The

a

rather

large

market

only oper¬
through the decisions of fal¬

lible

human

beings, and thus for

protracted periods has been under
spell of one or another illu¬

the

sion.

will

Investors

remember

the

period from September, 1939
to
April, 1942, two and a half
years in which the Dow-Jones In¬
dustrials declined
156 to
cause

that

a

American
lief

high of
low of 93 primarily be¬

of fear of
war

from

would

war

a

and

a

belief

be

injurious to
corporations. This be¬

proved erroneous, and the
market spent the four years fol¬
lowing April, 1942 in correcting,
perhaps
finally over-correcting,
the previous error.
It is an in¬

in

lower

closing, I would like to strike

trends

mistake.

resulting

Conclusion

the

who has let his pol¬

man

rates

prices.

occasions, and this has been true
business

part of all banks, directed at the
same problem.
-

were

20%

at

increasingly in recent years,

for¬

Bank¬

Many banks have already
adopted these principles, and have
already taken appropriate anti-in¬
a

market

ourselves.

profit.

is

flexible,

stock

been

American

this

Association

business

now

of

personal

our

Program.
Every banker and ev¬
ery bank director has a respon¬
sibility to help meet these prob¬
lems by being willing to act in
tune
with
requirements of the

flation

Question

of

principles have

malized

should
may

possible

on every

freedom
our

and

These

ex¬

tremely careful about their lend¬
to meet this

of

more

were

25%,

textiles

know,

occasion I have been emphasizing
that the
only way to retain a

sys¬

tem in terms of reduction of bank

holdings,

contrib¬

it.

utors to

and

be shown to

substantial

been

1925, when margin require¬

national tensions and risks of

can

And, do hot overlook

:.

that

in which

losses must be taken with

bank

over

In

ments

ef¬

only be offset by a co¬
operative understanding and ac¬
tion which substantially achieves
the results which might otherwise
be obtained by law or regulation.

necessary

creased
new

to

controls

$22,000,000,000 in 1925 to $31,000,000,000 now.

sum

and its

lending and investment.

,

at

that the

the banks do

additional

of government se¬
been
to
freeze the
been to freeze the

holdings
of
government •, bonds
purchased,,, at
high
premiums.
There will be no incentive to sell
these

what

fect is subject to constant statis¬
tical measurement and interpreta¬
tion.
Also,
that
it is being
increasingly used, publicly and
privately, to further demands for

more.

lowering

On the

not underby enough

are

recognized

(Continued from

well

are

The

proper allowance is
future borrowing needs

192S and Today

ac¬

bankers.

over-loaned,

particularly if
made for

hand, they

i
declined. / Some stood and

has

are

principles

and their technical staffs.

down. Total loans have
increased and the rate of
deposit

banks

bank

„

ability of banks to .(particularly in the government),
and to bank supervisory agencies
already 'has • been

future

increase

individual

The Slock Market in

and

economy

known to every economist, finan¬
cial analyst, and statistical expert

ex¬

squeezed

also

talking about
preventing the subsequent and in¬
evitable depression which follows
an

The

expand;

at

against

and

more

Bonds should be supported whole¬
heartedly by the banks.
the v: <10). I firmly believe that if we

.*.vk,r-3//-'>":■

marked effect

..

(4)
point
.

of public edu¬

It should include encourage¬

needed

is*what

accomplishment.

am:///

is good,

whether the

to

as

to

in

action,

between/bhnking /and sary; for all bank managements
money-lending/ It can be and bank directors to know the
voluntary/arid cooperative, vor/it working rules of banking's funda¬
will be imposed. You have an
op¬ mental relationship to the health

merely the tradifimal

whether

effort

every

tion

bankers in

matters on the public to
stimulate its thought along the
lines of constructive anti-inflation
money

difference

•

test

31

mere

for what I believe is required un-;
/
der these circumstances.
I call it
—"The need for selective, and

limits,

Therefore,

economy.

itures and public expenditures

credit control means/; That is the

sist this

I have my

reasonable

program

to

amount

reserves

•<.This

our

should

granted

deflation

consump¬

to insure the future sta¬

are

strong

a

.

and

be

within

and

savings which also re¬
duces money spending.
This will be greatly assisted by

lowed, made the situation worse
by calling loans and being unable
or
'• unwilling
to < extend
credit.
Just as we are rot
using our ef¬
fort to modify inflation on the
up¬
side, we must be prepared do step
in

tion

spending

to

we

we

depression fol¬

a

interest.

and

ahead.

increase

substantially to

itself, in the
of

common

the months

over

bility of

the

which

sures

ing
if

frozen

near

bank

every

fluence of banks and

its early stages, it is
always pos¬
sible to modify or stop the pres¬

(9) In fighting inflation a major
objective is to slow down borrow¬

needed,: These,, in .brief, are the
choice/*/'//• f///';•/ conduct the
objectives of the American Bank¬ k (8)/As a matter of
fact, there cordingly. /
ers Association
Program of Credit are forces already at work to as¬ // These /
/

(10231

causing accelera¬
velocity of the in¬
flationary forces.
This requires
sufficient knowledge to appreciate
the common dangers and enough
self-discipline to act—in terms of

tion

of

needed

were

at

readily met.

that

suggests

tion

often

out

be

to

are

should carefully forecast its pos¬
sible loan demands and cash posi¬

use.

not repeat the mis¬

can

of

the inflation

To summarize the problems, I

f;

future

most

was

banks contributed

Points Emphasized

CHRONICLE

credit requirements of established

rising market.

a

(7) We

takes

it

the

loans

peak of

for- complete

you

when

because

aggressive leadership
in meeting this
problem, and it is
on

credit

economy depends.
the past we have

in

an

depending

in¬

bank

insure.having adequate

of

our

From here on, the issue is in what
do about it,
individually and

we

assumed

of

production and consumption, upon
which the long-term
stability of

•

official

restrain

we

We maintain sound assets and
the
credit
flexibility
necessary
to
assist and maintain the level
of

not ask for more in the

can

As

expansion

we

reserves

general action might

required."

effect.

flationary

the points where it is
most likely
to exercise
inflationary influence
not be

FINANCIAL

our

other

they

voluntary effort,
will be curtailing credit at

they

&

problems is in the same reserve,
investment, loan and de-. mental problem and they can not
type of action^ which greatly simA< posit
relationships in the banks subscribe to the * principle that
plifies our task...It also has-an¬ will
be. needed, if
the future nothing can be done about it. In

commend

action.

THE COMMERCIAL

'

note

of basic
our

confidence

nation.

in

the

For the

re¬

mainder of 1948 America's role in
the

international drama

come

will

be¬

significant,
more
colorful, more dominant than ever
before. The hungry peoples of the
more

world
us

will

for

continue

help.

The

to

weak

look

will

to

de¬

pend upon our strength.

Manage¬
labor, radicals and con¬
farmers
and
indus¬
trialists, Republicans and Demo¬
crats—all must join forces to se¬
ment and

servatives,

cure

and

healthy
nation

maintain

a

vigorous,

As long as this
good
health and

economy.

enjoys

harmony, it will serve as a symbol
independence and personal
courage which are the trademarks
of democracy and of freedom.
of the

32

THE COMMERCIAL

(1024)

Industrial
and

will

is to

progress

expected within
The

consumption of uranium
fuel in a reactor necessarily pro¬
duces

variety of ash-called fis¬
These
products

a

sion

products.

consist of several dozen elements

having about half the atomic
rweight of uranium. Many of these
because

neutrons
chain

deleterious

have

substances

fects

they

ef¬

absorb

the

Their production

we

might illustrate this by what
might be called the alchemists'
nightmare. Alchemists spent a lot

that

trying to transmute low
elements into gold, and a fraction
this

time

can

of

the

we

alchemists'

can

If

place

by

could

slowly

be

about ten years.

converted

achieve the characteristics of

cury?

be

products

converted

having

mer¬

completely

will

be

dif¬

walls

toward

her

They already have

U-235

which

thermal

trons to make plutonium.
At

■

the

present

time

139
neu¬

the

prin¬
ciple
reactors
throughout the
country are based on the fission
of
U-235.,
Our
utilization
of
.

uranium is therefore less than
1%

efficient; while thorium, the other
potentially useful element, is not
is

as

as

lead, high grade deposits
a

large

industry possible,
to

use

When

TJ-238

this

as

is

scale

possible

for many centuries to

| again

experiments,

The

»

efficiency of

fuel

a

nuclear

a

is

power

The application of

the

to

source

small

sub¬

fuel

of

re¬

mean

of fuel

cost

the

permits

transpor¬
atomic

of

use

plants to advantage in in¬

places having no local
It should be pos¬

power sources.

sible to

plant

ele¬

quantity they exceed
hundreds and thousands of

by

times

the

radium

in

used

com¬

At the present

merce.

time radium
therapy, for industrial
radiography, and for the prepara¬

is used for

tion

of luminous

paint.

We

radioactive

spark

plugs.

have
is

at

least

will

be

of

material.
makes

that

It

radium

replaced

extent

some

tute

possible

even

eventually to
by one or another
artificially prepared

Radiocobalt, for instance,

a

acceptable

very

for

radium

for

substi¬

therapy and

It

is

not

exactly
where radioisotopes will be useful
the

.n

to

easy

greatest

see

market.

consumers'

of

uses

The

importance

are

likely to come in connection with
the production, and
particularly
the

development

marketable

of

goods.
The logging of oil wells by neu¬
trons as well as gamma ray sources
*'s

established technique. I un¬
an instrument is in
at present in the petroleum

an

derstand that
use

industry
of

means

which

measures

gamma

rays)

thickness of

steel

a

(by
the wall

pipe

plate

or

without using calipers or drilling
holes.
Instruments

for

the

control

of

liquid densities, liquid levels, the
homogeneity of mixtures and the
thickness of production items may
all be developed with a little in¬

genuity from

our

the

in

future

it

may

control by means

ess

of the silicon content of the steel.

now

irrigate and place under

useless.

which

areas

are

for

be

by

done

then

would
of

Geiger

a

of chemical analysis,

process

A

silicon
means

of caution must be

word

here,

for

methods

industries

in¬

using

insure

must

the

purity of their product.

For this
radioisotopes - used

the

reason

should

short

be

lived

—

disinte¬

tive elements

before

the

product

leaves the processor's hands.
The

examples

illustrate

the

radioactive

mentioned

just

uses

of

materials

these
in

new

existing

industries.
The

development of radical im¬

provements
and

will

in

Carbon-14

radioisotopes

in

research.

This

ganic chemical reactions are very
poorly understood and much de¬

velopment

is

done

empirical basis.
case

In

almost every

understanding

an

mechanism

to better production

Carbon-14 is in

bank

have<

listed

in

a

metal

this

position to offer

a

than

you

can

stencil

for

Pvery

firm

"publication,,'which. puts

you

a

us

in

*

;

,

tein metabolisms.

From these and

other

may

we

achieve

a

the living

concept of

new

process.

Photosynthesis
called

often

has

been

the most important chem¬

ical reaction

in

the

is

It

world.

the process by which every green

on

the territory posted

You who are

technically trained,
the

understand

who

and

funda¬

mentals of nuclear fission for war

realize

peace,

that

bottling

the whole enterprise behind a
solid wall of secrecy, far from
up

fostering, may well jeopardize the
nation's security. The bomb and
the reactor are products of scien¬
tific cross fertilization during the
Unless

1930's.

tion

we

now

without

scientific

intercommunica¬

will find

hence, in

years

have

we

industrial

and

a

ourselves,

static position—

the industrial background

and development that may be our

strength in the future.
Widespread industrial

coopera-,

tion under the Atomic Energy Act
is somewhat difficult. Before re¬

vealing classified information we
are * required
to obtain security
clearance

the

on

cerned. He,

of

individual

course,

con¬

must handle

the information he receives in

ac¬

cordance with the established

se¬

curity regulations.
The Atomic Energy Commission
stance chlorophyll, makes sugars;
is determined to encourage indus¬
starches and cellulose from car¬
trial participation. To this end a,
bon dioxide from the air, water
board of industrial advisors is at
from the ground and sunshine.
present studying methods for this
Many scientists have spent un¬
purpose. This group, headed
by
told hours trying to fathom its

living plant, using the magic sub¬

the

complexity. By this time there is
a rather general understanding of
the

number

and

of the

sequence

various steps in the process.
be

to

hoped that with the aid of

radio

carbon

will

zles

It is

the

remaining

solved.

be

puz¬

With

such

knowledge, it may sometime
possible to manufacture food
industrial

an

from

basis

be
on

water

and limestone.

Friction is

neer.

of

the friend and

mechanical
it

uses

avoids it in

General

Man¬

of the Detroit Edison Com¬

Mr. James W. Parker, and
among
its 11 members

pany,

includes

such

w.ell-known

engineers
as
Buckley, President of
the Bell Telephone Laboratories;
Robert E.
Wilson, Chairman of
the Board, Standard Oil Company
of Indiana; Isaac Harter, Execu¬
tive Vice-President and Director,
Oliver

E.

The Babcock & Wilcox Tube Com¬

both

the

He

-

and

President

ager

in

engi¬

brakes, he
But does he

bearings.

understand it? The study of bear¬

Donald Carpenter, VicePresident, Remington Arms Com¬
pany;

pany; Bruce K.
Pan
American

Brown, President,
Petroleum

and

Corporation;
Gustav
Egloff,
Director
of
Research,
consuming service tests.: I do not Universal Oil Products, Company;
intend
to
belittle
service
tests
Paul Foote, Executive Vice-Presi¬
Our experience
on
the project dent, Gulf Research and Develop¬
with
rotating
machinery
has ment Company; Gabriel O. Wescaused us to be extremely con¬
senauer, Manager of Power, TVA;
servative in bearing design.
The and Jerome C. Hunsaker, Chair¬
development
of
new
types
of man, National Advisory Commit¬
bearings and the testing of bear¬ tee for Aeronautics: So that they
ing materials: is extremely slow- may, work effectively the, Com¬
Transport

ings is most often made by time-

by

conventional

has not

techniques.

It

been possible to measure

mission
but

taken

has

unusual!

the

the loss of bearing material to the

step of giving the
members of this group access to

lubricant

restricted data and

there

until

is

meas-

a

ureable turbidity. By using radio¬
active bearings it is now possible
to measure the transfer of

tle

as

a

of

a

gram

millionth

face;

of

the
to

or

of

other

the

millionth

a

bearing

surface

bearing

lubricant.

sur¬

Funda¬

mental studies of the phenomenon
of

friction

at

the
In

are

being carried out

the

at

problems

Until

its

made

atomic

energy,

industries, there
having only
the

an

main

in

as

other

by-products

are

incidental relation

work.

One

these

of

cer¬
new

face

the

board

has

recommendations,

possible to

the

nature

most

appropriate to
or industry.

is

given in¬
In 1946 the

a

Commission instituted
reactor

on

it

state /specifically
arrangement

the

of

dividual

one

a

year

problems

for

engineers at Clinton Laboratories
in Oak Ridge, Tennessee. Between
50
and
100 engineers attended,
receiving theoretical and applied
training from the best authorities
in the country.

materials called
cover a com¬

industrial

this

not

course

present time.

inside look

an

that

Commission.

lit¬

as

necessary

;

.'.V.!\!„

National

Brookhaven

Labora¬

tory considers industrial coopera-^
of its functions. Since;

tion

ants and lubricants of all viscosi¬

the

Laboratory facilities are still

always followed fundamental sci¬

ties, to plastics. They

in

process

entific discoveries.

materials. They have new and un¬

will

The radio in¬

proceeded from the early

Armstrong.- The
aviation

.'

at the pres¬

study carbohydrate, fat and pro¬
studies

infringing

"SECRET."

plete range from volatile refriger¬

studies of Marconi,

up-torthe-minute list:,/

more

obtain elsewhere.,'

methods.

use

us

rarely dis¬

can

subject completely without

a

be.

industries

and

dustry

and

leads

ent time at several universities to

to

radical changes in technology

vre

the

of

reaction

the

of

with

always

we

more

have

ments

publishers pf "Security Dealers of North Amer¬

purely

a

on

cuss

and

new

is

and

1948

than the

energy

of

bomb

The

however

and

perhaps be
the radioiso¬
of problems

range

has been the

As

radio¬

which may be studied by its means
is limitless.
Many industrial or¬

tainty even though it is impossible
to
specify what these develop¬ fluorocarbons. They

ica,"

plant was

of the

might

The

topes.

present industries

completely new industries
inevitably follow the use of

the

in

means

called the queen of

either, to

statement may be made with

\

-

Analysis

was

way

and efficient use of fertilizer.

enemy

tirrte?

some

by

in
absorbed

The

activity. Information obtained by
this technique is valuable in de¬
termining the most economical

present stock of

knowledge.
f'At

distributed

whole

radiography.

grating into stable, non-radioac¬

weight

cultivation desert

a power

radioactive

In

ments.

such

accessible

years

useful

of

source

earlier

phosphorus

followed

abundant

an

reaction

being

power

under¬

now

lay, will tell us in a few
|whether this is possible.

a

dependent upon such chemi¬

tation

Once

come.

products

jected

The low

enough raw materials to
operate the nation's power plants

fission

by air. Fis¬

shall

we

As

atomic*powered
ships and, perhaps, even airplanes
will refuel only at rare intervals.

have

The

compared to ash are

the oxidation of

quired will

thorium.

as

conditions.

special

marine is obvious.

must learn

we

well

high temperatures.

ing

this

power

very

counter without the time-consum¬

The

make

power

cal reactions.

are

require

engine and the. internal
combustion engine depend upon

scarce.

To

which

steam

not

Even though uranium
abundant in the earth's crust

like

unique
for it will
be
the first engine
which is not dependent upon the
earth's
atmosphere.
Both
the

sion

used at all.

industries
industries

and, as
day be used in
the metallurgical
sources

permit minute by minute control

unique

mobile power source it is

p

and

some

which

and

to

development

this form to fertilize

in

used

was

fertilizer

heat

may

under

The

atomic

devastating weapons.

commercial

a

admirable

charactertistics of
plants
will
un¬
doubtedly permit them to com¬
pete with other power sources

has

power

into

such,

be possible to maintain proc¬
of appropri¬
ate radioisotopes. As an example,
;n the steel industry the addition
of a small quantity of short-lived
radio silicon to the charge enter¬
ing an open hearth furnace would

Atomic

ton..,

greater urgency for these nations
than it has for us.

isotope

other

The

a

applications of

more

experimental plants.

ex¬

industry.
At the present
large fraction of the coal

$20 per

one atom

undergoes

fission.

ex¬

consumed is imported at a cost of

layer of black oxide

are all U-238 which absorbs

cn

time

a sample of uranium metal.
When freshly prepared it does not
look different from steel.
This

neutron

reactor

in large meas¬
her ability to build up a

power

here

know, only

a

France will depend
ure

a

coal short¬

The industrial rehabilitation of

confronting us
have to do primarily with fission¬
able material economy.
I have

in it. As you

development

to relieve her

perimental basis.

problems

piece has

can

here.

ing

concrete

in every 140 atoms is the

it

sources

operation from which they
pect to extract power on an

entirely by remote control.

Other

before

in

lurgical processing which must be
thick

economically sound

countries

is direct¬

age.

By
present techniques this involves
elaborate
chemical
and
metal¬
behind

re¬

We know that England

power

reprocessed

at intervals to remove the ash.

conducted

become

compete with other

It is apparent therefore that the
must

coal

in the United

other

in

ferent properties.
nuclear fuel

circumstances, be¬
excellent

the

States, it is
quite possible that atomic power

fission

to

of

cause

sources

Likewise, uranium would

slowly

these

Under

into

Just when does it lose
characteristics of
gold and

mercury.

the

generate enough power to
for the whole installation in

pay

in

the reactor it will absorb neutrons
and

a

producing neu¬
trons and has little similarity to
the future power plant.
If. how¬
ever, it were possible to sell gen¬
erated power at 10 cents kwh., we

even

piece of gold

a

as

tool for

research

than the gold.
we

not

Other industrial

atomic

of phosphorus by a growing plant.
Radiophosphorus was incorporated

reactors may avoid the generation
of electrical power.
Reactors are

variety

out of business.
reactor is designed

This

■

converting gold into mercury. In
fact, there are scientists—strange
people — who want the mercury
more

nuclear reactor will

our

pany

We

dream

we

put the Long Island lighting com¬

the

on

mercury.

do this and

now

undo

spent

was

transmutation

research,

cumstances, I am quite confident

time

of

Brook-

will use
a lot of power.
The incremental
power cost on Long Island is 0.6
cents per kwh,
Under these cir¬

I

of

At

power.

Laboratory, where
constructing a reactor for

are

peacetime

generated.

are

of

source

haven National

also modifies the crystalline struc¬
ture of the solids within which

they

large extent

a

given inventory of nuclear fuel.
Since the fuels are very costly
and
scarce,
the economic feasi¬
bility of competitive atomic power
will be determined by the effi¬
ciency of the power plant design.
Even under the most optimistic
circumstances it is going to be ex¬
ceedingly difficult to compete on
a straight cost basis with coal as
a

required to maintain the

reaction.

to

a

few years!

a

be judged

by the power generation rate for

be

Thursday, March 4,

CHRONICLE

Application of Nuclear Energy

(Continued from page 4)
underway

FINANCIAL

&

deForest and

automotive and

industries

followed

the

usual

are

should find

properties and

applications in
The
means

many

welding
"

of

of

an

amazing

fields.

- r

aluminum

argon

one

construction,

of

no

arrangements have yet

definitive

been made;.

Brookhaven,will.im-.

plement to the fullest degree poli-x

.

by

first

/arc;

as

cies! announced

the ;Atbmic

by

Energy Commission..

>

'

u

-

There
.

are

approximately 6,600

States and OOOdn

•i'r'

In the United

names

'

Canada;'all arranged alphabetically

by States r.nd Cities;
4

Addressing charge $5.00

per

~

.

thousand.

•

V

for

addressing N,- A/ S. D,

List; $6 per thousand;

As

steel

Special N. A. S. D. list (main offices only)
arranged
as
they appeared in "Security Dealers."
Cost

r

an

industry, radio sulphur and

'

the

i

Publishers

of

25 Park Place

-




"Security Dealers of North
-

REctor 2-9570

America"

New York City

molten

our

of

sulphur

metal

and

likely -that

thus obtained

-

being used to study

interchange

appears

of
—

are

may

be¬

slag.

It

information
improve

one

most basic industries.

One of the

dioisotopes

developed

on

the Manhattan Pro¬

ject, is now is use for the produc¬

example,, again in. the

radio iron

tween

Herbert D. Seibert &;Co., Inc.

com¬

bustion engine.

■

Just
w-

development of the internal

earliest

was

uses

tcr trace

of

the

tion

-oL

varieties

welds

seam

including

ra¬

many

drums

shipping special materials.
Other
include

industrial
new

cesses

of many

for
.

developments

varieties ! of

and. pumps and"

valves

more

you

the

war

en-*

has taken

a

direction,, focusing; attention

new

upon

beneficial, peacetime appli¬

cation.

It

which

a

has

reached

widespread

a

point at

industrial

technology is possible and is re-f

quired,if the nation is to maintain

than pass¬

benefit to the fullest extent from

-

ing reference to the bomb in order
to' show

since

ergy

of atomic

pro¬

fabrication

varieties.

I have avoided

use

of

The development

that there is much

its preeminent

the

new

position and is to

developments of

a

new

Volume

167

Number

4678

THE COMMERCIAL

&

FINANCIAL

CHRONICLE
tried

German

Monetary Disintegration

(Continued from first page)
from

viewpoint
of
relations. The existing

monetary

restrictions
from

the

one

constantly to search for semilegal
and illegal means of
obtaining a
pound of butter or an electric

ight

monetary transfers

on

another

to

zone

have to be strengthened,

would

and the

two currencies that would emerge
would become subject to foreign

bulb

here,

pounds of coal

few

a

wood

or

hundred

there, fall

quickly by the wayside and soon
ose
out in the fight against ill
health and hunger. The disinte¬

exchange restrictions. Authorities
in
the
East,
with considerable

gration

justification,

"ife of the average German.

reform

fear

in

that

the

monetary

Western

zones

At the

would induce black marketeers in

of

that

have

in order

area,

to

avoid

re¬

the

monetary system
real meaning in the everyday

las

-

of

time, there

same

thousands

in

greatly

are

workers
ers,

into

mental

their reichsmarks to Eastern Ger¬

demand

many,

with the result that prices

economy, and whose living stand¬
ards compare favorably with pre¬

in the

black

East

war.

new

Black

markets

would

skyrocket,
currency
is also
Soviet

in

the

unless
issued

zone.

a

in

markets

pauperize

the

"blacketeers".

have

Progress of Monetary
Disintegration

monetary

shift

:

disinte¬

disposing
markets

gration has made further progress
in Germany. Many of the symp¬

iiquid

toms of this

able

disintegration, while

most

disagreeable to every Ger¬
except the new and growing
(both in numbers and in influ¬

man

ence)

of

operate like
sucks

wealth

of

to

artisans
Black

powerful

a

first

up

and then the

reserves

and

wealth

skills.

scarce

which

pump

to

bring about

of

farmers, traders, and to

,

,

served

lower-income

middle classes and to

/;/■;•

Meanwhile

the

are

significant

The

-

the

•

They

the

mov¬

the

public. As
black marketeers accumulate huge
profits, they look for investment
outlets

which

offer

class of
profiteers, have
something fascinating to the out¬

its valuables in

side observer who is interested in

illegal

what

money

readily

the

as

themselves

public disposes

of

order to

continue

purchases.
Part
spent in black

markets

the

of

might be called the "path¬
ology" of money. It is indeed a

thus flows

strange world in which

exchange for their valuables, and

oneself

if

surface

probes

one

of

finds

one

below

Germany's

the

economic

life.
It is

in

exaggeration to say that
very large sector of the Ger¬

a

no

man

economy

the

German

the Reichsmark is
thoroughly discredited and simply
rejected. To a considerable extent
without

economy ;•

any

coming of

holdings

the

bulk

will

cated, is

at" all.

money

The

monetary reform,

a

der which

operates

all

of

un¬

wonder

that people will accept
only to'the extent that
they have an immediate outlet for
money

.

it.

Since

at

legal prices, its acquisition is
longer a stimulus to effort in
legal sector of the economy.

no

the

little

can

Manufacturers

be

purchased

are more

interested

in protecting and expanding their
inventories than in selling their

production for" money f. at leg
prices.
Goods
are
acquired
if
available in gray or black mar¬
kets, regardless of whether they
of

are

the

to

use

of

"damaging effect
as '

it

leads

scarce
.

to

buyer

or

not—

course,

a

very

economic life,
misdirection of

on
a

resources.

;

As the Reichsmark has lost

fulness during the last 2V2
there

have

been

use¬

years,

frequent

in¬

stances of creditors refusing pay¬
ment of
debts
contracted years

A large number of contracts

ago.

concluded

recently contained
protecting
the
creditor
further
depreciation
or

clauses

against

devaluation
directive
the

U.

of

the

issued

Mark.

last

Si

But

by
Government
summer

Military
ruled that it is illegal to deviate
from the principle "Mark equals

returns

to

the

to

black

how,

they

or

gold

Marks,

or

are

guaranteed,
creditors are legally bound to ac¬
cent repayment in Reichsmarks.
,,

Thef Spread of Black Markets
As

practically all goods pro¬
duced in Germany possess either
Taarter

investment

or

value, the
quantity of goods available on the
retail level for
at ..their

legal

sale

to

consumers

value

remains

Seligible.
Thistostate
of affairs
is
dvahtageous
those
who
are

skilled in "greasing" the palms of

currently
produced goods, since monetary
and material wealth has congealed
so
to speak within
a
relatively
small group, and since the
public
has less money left for
illegal
purchases and fewer possessions
to sell to black marketeers.
Black
not

market

spent

which

for

in

acquiring, selling,
transporting goods .illegally.
the

aged and invalid, those

weaken

with
and

in

the

those

the

incessant

bureaucratic
who Taek

are

serve

The absence of spiral inflation

Germany




is

mechanism

to

who either

groups

invest them in second-hand goods
or retain them in cash hoards.
While

.•

it

markets

is

in*

times served

ing

'true

that

black

Germany
have
at
to bring out :of hid¬

urgently needed goods and
enabled people to secure services
that
are
simply' unavailable if
,

compensated

at

authorized

rates,
qualities, though
neglected, appear less

their stimulative
not

to

be

attractive in the light of the eco¬
nomic distortions and
inequities

of

the

outlets

need

late

to

be

resources

tends

faulty and wasteful in

an

value.

down

also

to

In

be

a

new

and

numerous

is

super¬

the exist¬

ing distribution system, absorbing
needed

manpower

elsewhere.

Emergence of Gray Markets

While

people

there

in

are

still

Germany

many

who

if

to

-

simply

firms

were

compen¬

ing for delivery of goods in

ex¬

damage,

various

meet

sive

Manufacturers

locate
the

has

are

and

de¬

for

themselves
cases,

the

that

goods
furnish.

can

manufacturers,

order to have

In

they
some

in

merely

^

hand something

on

goods that they can turn out only
at
relatively high costs.
Firms

usefulness

of

posals

the

for

away.

most

the

popular

pro¬

execution

of

a

monetary sanitation program is
imposition of a, capital levy.

the

However,

the

problems
tal

technical'

many

connected

with

capi¬

a

levy have persuaded

of
its proponents to advocate
use of
this device not for the removal of
the
most

monetary overhang, but

as

a

of
compensating war-loss
claimants and of
accomplishing a
more equitable distribution of
the
losses arising from a financial re¬
means

habilitation program.
Alternative (e) aims at closing
the gap between the volume of
the

and

money

volume

of

goods

by price increases. This particular
solution
of
the
problem, while1
having the advantage of sim-*
plicity, has gained few friends,
except among the beneficiaries of
the

prevailing

Some
that

ture

monetary

observers
the

once

is

permitted

price

to

chaos.
fearful

appear

whole

struck

the;
psychological shock will be such
that the remaining
controls, which
move,

must

be maintained
so
long as
shortages persist, will be washed
-

away.

>

Outlook
The implementation of

scheme

a

for the financial rehabilitation of

Germany will immediately bring
a
large
number of
new
problems.
Until
now,
excess

mone¬

liquidity

has

permitted

manufacturers to

resume

German
and

con¬

tinue

government

(a) is part of most

plans

forward

put,

in

the

rate

of

from

equitable.

raised
level, the

inadequate national product
gain in intensity. With severe
shortages
and
a
tremendous
backlog of demand likely to per¬

sist,1 voluntary
main
will

be

savings

low.

very

priate

will

re¬

Heavy taxation

required to maintain ag¬

gregate expenditures at

an appro¬

level, but if incentives to

produce

come

particularly

is

will

it

not

low

present

Struggle of the various classes for

the

is

reconstruction

its

the

Germany. While this approach has
definite administrative advantages,

It

to

the

ultimate

among

the

ments.

tax

to

are

burden

much less

enterprises

would

be

strengthened,

will

have

onerous

to

be¬

than that

for

undesirable

this

shifts

in

the utilization of resources, weak¬

allocation

ens

and

rationing

con¬

trols, and contributes to inability
to

sell at legal

prices. Without

functioning money and price

sation
in

trading

are

a

sys¬

compen¬

bound to gain

importance.

the

Germany to legalize
compensation trading,

Bipartite

(Anglo-Ameri¬

can) Economic Control Group

jected

a

re¬

directive, issued last May

which

such

transactions

would have been permitted with¬

of the German state governments

Since then

form of trade that has been offi¬

in the Bizone which had

cially sanctioned by the establish¬

if

not

and

holders

currency

of

small

and

small

element

an

would

also

make

fostered,

such

some

tolerated,

deals have

of

charge

the part of the Allies

on

the

of

German

officials

monetary

and

in

fiscal

policy.

of

the

reform scheme more complex.
Those

(b)

in

favor

of

alternative

(c) are fearful of an
illiquidity crisis resulting from a
sharp contraction of the money
and

supply.

ness

This contingency is

in

much

the

minds

of

community. Moreover,

rigorous

scaling

supply

money

eliminate

down

would

most

of the

very

the

busi¬
a

Very

of

the

tend

to

savings of

the old and sick, and thus put an

There have been several official

but

manship

of

it

much wisdom and financial states¬

to

introduce

equity,

pay-

All

cancellation

other

labor under

disadvantage.

the

reform program need

depositors, but, while this and
discriminatory
provisions

con¬

.

same

that
a

apply

amounts

Public utilities and trans-

poration

true

not

work¬

ing forces in place of wage

is

feature of

and, for this reason, cannot

distributed

in certain limits.

a

One

The
invalidation
of
a
producing
barterable
consumer
straight imposed by the Allied Control
goods enjoy a decided advantage percentage of each person's money Council in 1946.
The maintenance
in the acquisition of raw materials holdings, regardless of aggregate
of monetary stability will call for
and
labor over enterprises en¬
size, is in effect a regressive tax.

trading to

fine art. Barter is

cer¬

forth
a

non-interest-bearing

Alternative

reform

barterable, are forced to shift
their facilities to the production of

veloped barter and compensation
a

issue that

an

non-redeemable

additional

burden

security system.
a

on

social

Blocking

it would

serve

ment

flexibility

of

to

sanitation

tary

the

opens

out of this dilemma since

way

ing

exchange, the Germans have

may

bonds, a variant of method (bJ;
(d)
the
absorption
of
large
amounts of money by a capital
levy; and (e) the raising of all
prices and wages by a large mul¬
tiple.

forced to

plant that not only has
goods they require but also
a

use

into

misgivings.

But

The

claims

conversion of most of the
money

supply

under

of

losses.

must satisfactorily solve.

istration for Economics in Minden

business.

dismantling,

these

them, is

by the Bizonal (German) Admin¬

medium

stemming

other

of

the

future

any

government

change for other goods—are widely

an

on

of

,

the blocking of part of the result¬
ing, as well as of part of the pre¬
existing, bank deposits; (c) the

a

barter and

farmers, and

a scalingsupply, but

settlement

rigor¬
or

production,
even
though
analysis of the proposed so¬
suffer
severe
monetary
lutions of the problem shows that they
losses. Following the monetary re¬
they provide for the following not
form, unless its deflationary im¬
always mutually exclusive courses
pact is mild, they will no longer
of action: (a) the cancellation of
be able to disregard traditional
a stated
percentage of currency in
standards of
cost-price calcula¬
circulation and of deposit liabili¬
tions.
The loss of working capital
ties of banks; (b) the withdrawal
will bring forth heavy demands
of all outstanding
currency and on the credit
mechanism.. If

wasteful and expen¬
method of resource utiliza¬
are

attempts in

and

only for

money

An

Barter and compensation trans¬

look

trading—i.e., contracts call¬

.

comprehensive scheme for

rejy on what they can obtain
through official allocations and on
what they can buy at legal
prices,
they would soon have to fold up.

barter deals, chiefly between con¬

sation

....

stability in
Germany. What claims to recog¬
nize, and how and to what extent

by compensation
The system is be¬

industrial

gradually whittled

well threaten financial

accumu¬

widespread

more

askance at black market
trading,

sumers

the

satisfaction

having
investment
the Bizone, more than

tem, however, barter and
The

for

war

and

of

his

to

makes

economy,

the

from

of

covered

coming

the

capital and labor. As
black markets spread
through the

of

German

for

arrangements.

the

of

'

huge unpaid claims

one-half of the entire trade in in¬
dustrial products is now believed

economy where the ease of eva¬
sion determines to a large extent
use

by corresponding

:

many calls not

goods

supervised

The utilization of

materials and

raw

covered

are

many

be

difficulty.

money

production

industry, which in turn

ment and enables him to

sumer,

with

The

tary and financial reform in Ger¬

lines

only

than

Financial rehabilitation in Ger¬

gaged
in
producing
primary
resulting from the diversion from goods that are urgently needed for
legal channels of a substantial reconstruction, but lack the qual¬
part of total goods and services. ity of easy divisibility and direct

Black markets usually emerge in
of
business
that
can
be

their

rather

increased

on

imports.

the

for

with

pletion of inventories and equip¬

tion.

trans¬

food

employing inter¬
locating goods he
may have use for.
Compensation
trading, from the viewpoint of the
seller, serves to prevent the de¬
mediaries

through the

are

for

and

money

in

black-market

relieved

searching

of

effective

energy

seller

mini¬

a

functioning

requirements of

cash,

be

presupposes that the volume of
coal available for German needs
is greatly increased and essential

prefer to hold goods rather than
additional cash balances.
Paid in
in

A

can

manufactures.

a

of German

goods.

than

goods

money

for

of

depends

strength of sellers, who,
under conditions of acute
scarcity
and
as
the
modern
exchange
money economy is breaking down,

rather

for

it

revival

to

gaining

goods

consumer

barter

a

unless

consumer

exchange

earnings, will continue to resist
attempts to make them sell their

The emergence of
compensation
trading is a reflection of the bar¬

ferred

public

forced

are

mone¬

cure-all.

a

only if at least

produce

willing to sell, their
paid at least in

are

part in

funds

legitimate

who

many

services

actions

the

latter

goods,

is

to

scene

of

and

as

comply with if they wish to retain
their
employees.
Few
lawyers,
doctors, artisans, or hotels in Ger¬

in part be ex¬
plained by the fact that the liquid
may

Without

battle

are

as

considered

machine,

the

that

second-hand

goods
hoarding
usually left uninvested.

can

media

profits

the

because

anc

corrupt officials and to those who
excel

mar¬

black market prices for

Mark."/'Irrespective of whether group of intermediaries
Outstanding debts are payable in imposed on all levels of
Reichsmarks

in

consumers

keteers. This vicious circle has by
now
resulted
in
a
decline
of

money

be

simply confis¬
secret in Germany. No

no

then

back

are

supple¬
furnish

consumer

overhang

mum

or as

compensation,

to

wants can be satisfied
by
making use of it. Farmers, unless
they can acquire farm implements

insist that their
employ¬

them food and

to

goods

circulation

,

in lieu of wages

breakdown of the modern money

their hoards,

tary

less

barterable

German economic

Unless

blocking

a

be

is

huge money excess.
There is
tendency among many observers

obtained

new

of

believe that removal of the

common,
because most consumers have run
out of supplies of this kind. How¬

coming

disposable' funds.

33

tificate scheme will be
exposed to
an
attrition process and will

the
a

transaction

ever,

of

Germany's ills to

stable medium of

transfer

vealing

of

pictures, and jewelry. This type of

tens

the

pitfall to beware

of the

now

type

Monetary Reform

supervision. Originally, barter
deals covered mostly second-hand
goods, such as furniture, rugs,

who

from

One

attribute all

tal

is

this

ously handled,

The Problem of

of barter shops and
syndi¬
operating under governmen¬

now

Germany

benefited

ment
cates

discourage

trading.

And Reiorm Possibilities
tries

to

(1025)

impart

to

a

an

ele¬

mone¬

program.

Some

experts, however, view the block¬
and

economy

tionary
retain

certificate

device

semiliquid

Marshall

Static

Plan,

The—Sidney S
Planning
Association,
800
Twenty - firsi
Street, N. W., Washington 6, D. C,

Alexander

—?

National

—Paper—500.

permitted

Marshall

an

passing through "a defla¬
is

Financial

with

They fear that if

process

International

tics—Monthly magazine issued bj
International
Monetary
Fund
1818 H Street, N. W., Washington
D. C.—Subscription $5.00 per year,

to

Economic
A.

Lutz

Section,

assets,

Plan
and European
Policy, The—Friedrich

—

,

International' Finance

Department

of

>

Economy

there- ics and Social
Institutions, Princes
ton University, Princeton, N. J.—
early conversion into immediately Paper.

^ will, be strong

pressures for their

-

34

COMMERCIAL

THE

(1026)

under the 170 level and

Whyte

in indeterminate

*

for

a

*

*

In the advice to

buy stocks

i you were also given the levels

all posi¬

Hold

future.

its

under which stocks

tions.

held.

be

to

far

So

not

were

of

none

in

Outlook for 1948

The

That

What

brings

of

the

the

At

better

failed to

1947,

attainment.

1929

to, the present.

us

future?

the industry
from all
material.
Be¬
cause of weather, and the short¬
ages of scrap
and good quality
coking coal, January production
still

moment,

under

is

sides

direction indicated for imme¬
diate

call

until the stalemate is broken.

No breakout in either

stage.

will

it

comes

which,

But until

policy of holding all positions

WHYTE:

iBy WALTER
now

The break¬

to

(Continued from page 2)

out of news or

anticipation of it.
it

The Outlook lor the Steel

direction

any

immediate trend.
out may come

Says—
Market

in

could well be the clue for the

Markets

Walter

breakout

A

to

pressure

produce

held to 93.5% of an increased

was

capacity.

The rated capacity

at

raised

the

beginning

was

of

this

For the

past two weeks I've these was broken. This is no year to 94,000,000 tons, or 3,000,000 tons larger than at the be¬
been acquiring a Florida tan
guarantee that they won't be. ginning of 1947. The February
to
make
my
acquaintances
It is

envious. The sunshine is about

the

of the risks venture

one

capital has to take if it seeks
profits.

one can get in
that land of lotus eaters with¬

only thing

*

*

*

out

going into hock. The rest:
living, eating, recreation and
incidentals, come so high, one
has

float

to

home

loan

a

to

So until next week the list
remains

follows:

as

come

Bought—Stop,
Amer. Brake Shoe .38-39

on.
#

at

Amer. Chain

*

Anaconda

But

.

though I was away
desk I wasn't away

from my
from the
the

market.
under

same

it did under

as

-31

28

.21

-22

20

.29
Briggs
sun Caterpillar Tractor 54

-30

28

1

New York

a

Consol

Vultee

,

Douglas

snowstorm.

—

Lockheed

week

first

the

February, when the
was
given here about

in

L. Martin-

G.

United Aircraft

advice

More next

ber of stocks, the market has

kind of wallowed in

a

I

article

What is the prospect for

this rate?
I

as

At the

can

see,

mill

the

heard

no

All

in

all

for

cause

either

the

excitement

optimists

the

or

pessimists.

an

The

*

major

ments

are

*

develop¬

still

tied

in

The

James

R.

Sibley

have

22

market

gray

Whyte

staff

of

Buckley

Sixth

CALIF.—

William

added

the

to

Brothers,

Street.

Both

A.

version

to

be

deals

530

Co. and

Cruttenden & Co.

is

that

apparent

factor

has

been

tape

neither

sufficiently

weighed to make

dent in

any

the market.

MILWAUKEE,
G.

Barlow has

*

WIS.

—

Harold

become -connected

Co., 225 East Mason
of the Chicago
Stock Exchange.
In the past he
Street,

members

with

Thomson

&

McKinnon

and Shields & Co.

5|s

not

tion

of

the

market's

future

must rest

entirely on its tech¬
nical action.
Looking at it
dispassionately, it seems as if
the
averages
have
slowly
worked themselves into
ner

with stock

for

a cor¬

sale

Martin L. Coyne Opens
(Special

to

The

Financial

Chronicle)

said

are

active

than

which

they
ingots. In other words,
consumers to make
deals

apparently

has

cess

of the

capacity of the normal

producing set-up Finally, alloca¬
tion still are being planned to aid
certain essential
At

the

same

forward

to

in

industries.

I

time, we can look
probable slack¬

some

demand

from

certain

durable

goods lines,
washing machines, refrig¬
erators, vacuum cleaners, radios
and others, which have or soon
as

will pass their initial postwar pro¬
duction
peaks.
However, even
while

we

ning

in

sources,

anticipate

some

demand
with

we

these

can

confidence

that

slack -

from

I think that

forward

look

to

the

the

capital goods
exports will take

and

any that so occurs.
Accord¬
ingly, I feel that this year's pro¬

duction

GREENFIELD, MASS.—Martin
L. Coyne is engaging in a securi¬
ties

business

from

Franklin Street.

He

offices

at

24

formerly

was

with R. M. Horner Co.

With McDonald & Co.
(Snecial

Securities

con¬

up

just

Pacific Coast

While

in

lessened, which means only
thing—that demand is in ex¬

prospect

that the evalua¬

means

so-called

of

urge

industries

This

less

from

sources

ening

with Loewi &

was

*

a

flourishes

present

somewhat

consumers'

coming elections and in¬ Loewi & Co. Adds Barlow
(Special to The Financial Chronicle)
creasing
tenseness
abroad.
it

at

we

one

were

with

of the

still

certain steel products.

Financial -Chronicle)

been

to-The

Financial

Chdonicif)

DETROIT, MICH. — Russell J.
Cook has joined the staff of C. G.
McDonald & Company, Guardian
Building, members of the Detroit
Stock Exchange.

will

be

conditioned

pri¬

marily by the supply of metallics,
rather than by demand.
At present,
scrap is in some¬
what easier supply than
it has
been, although it still is far from
plentiful.
Increases in pig iron

production,
main
of

the other hand,

on

difficult

obtain

to

re¬

because

quality

coking coal and
virtual inability to
expand ore
supplies. I would say, under the
circumstances, and barring a coal
poor

strike

tions,
to

other

or

that

we

labor

can

1948 production

interrup¬

look

forward

at least equal

Orders Executed

on

Schwabacher & Co.
York

Stock

to

The

Financial

Chronicle)

Given

tion,

profits?

members

1947

of

the

Stock

New

York

and

Exchanges.

I

Francisen

(Associate)
Exchange

Chicago Board of Trade
'

14 Wall Street

New York 5, N. Y.

OOrtlaildt 7-4150

Teletype NY 1-928

Private Wires to
Sao Francisco

Monterey

Principal Offices

—

Santa Barbara

—

—

Sacramento

Fresno




one

Two With Abbett & Co.
(Special to

LOS

The

Financial

ANGELES,

Chronicle)

CALIF.—

David B. Mautner and Thomas H.

go

year

Company,

3277 Wilshire Boulevard.

interesting at this

for

1947

the

companies averaged

1937 when it

It

is

readily apparent that the

industry entered 1948 fighting a
rear
guard
defensive
action
against costs.

still rising.

are

today,

Even

-

the

of

turn

Freight rates have

the

Various

year. '

materials and

supplies also have
risen in price during the- recent
past

ahead/ there

looking

and,
not

relief from

Higher

be

to

seem

major

any

this trend in sight.

wage-rates
is

indi¬

are

that

in¬
much

wage

pretty

I would hot at¬
anticipate a settlement

anybody's' guess.
to

tempt
that

be

may

the

between

made

workers'

steel

the

and

unions

major

producers.
Up until re¬
cently the concensus seemed to be
that

the

demand

would

workers

something in the vicinity of 25-30
hour

cents

an

basic

rate

arguing,

but/after

and

in

increase

the

agreement

the

usual
the

in

10 to 15 cents per hour
be reached:
Then, first,

range of
would

there

the break in farm

was

com¬

modity prices, and it immediately
became popular to assume that
the CIO

was being put on the de¬
fensive with respect to its prob¬

able demands. Immediately there¬

after, however, the steel industry
began
to
receive
considerable

publicity

for the

price

increases

made most recently, although not

necessarily

the -most

important.
according¬

The balance of power,

ly, seems to have gone back into
status

haps

of

the

for

thinking,

our

had

we

Thus,

ante.-

quo

purposes

better

per¬

the

adopt

a

better

under¬

was

a

position.
rather odd

the

quarter, during which virtu¬
companies
use

were

benefit¬

of low cost in¬

previously accumulated

The

these, including

Price Situation

might also, at this point, take
up the question:
"How high are
steel prices?"
At

the

present time, the "Iron
composite of finished steel
prices is approximately 40%
above
the
1939
average.
That

Age"

would

to

seem

small

increase,
for«

average

be

a

relatively

compared to-'the
all
commodities.

However,-; the

actual

increase

is

much

more than that.
As a rough
indicator of how much
more, let
us review the dollar sales
of eight
of the largest
companies. We find

that in

when

the final quarter of 1947

the

"Iron

composite
1939

Age"

steel

"38%

was

price

above

the-

the sales of these
companies were at annual

average,

eight
rates

averaging 188% above

Of course, the
gain was
the product of
increased
and

higher prices.

the

^industry's

1939.

largely
tonnage

Over the spaV

tonnage was up
85%. If we adopt a
very arbitrary
procedure and multiply finished
steel tonnages for the
respective
periods

by the "Iron Age" price
composites, we find that the indi¬
cated

gain

is

157

compared

with
the actual
gain of 188%;
The residual of 31%/yery prob¬
ably is mostly in prices. '
»
.

There are three
reasons
actual prices have risen far
than the "Iron Age" finished

composite

would

why
more

steel

indicate.

First,'
discounts, which were prevalent
in
1939, have been eliminated.
Second, extra schedules through¬
out the product list have

been

re¬

vised upward. As you
know, steel
prices are made up of base prices,
plus varying extras, and the price
composites are made up from the
base

prices

received

been

upped

both
the
in

only.

by

by

by

;

prices

makers

have

selective

product

latter
several

Third,

steel

selling,
by market;

and

including

the

instances

of

refusal

mills

to

cents per

if

pared with 1939.

thought

originally

that

held

a

somewhere

widely
increase of

most

wage

between

10

and

15

hour will be granted.
In other directions, it looks as

prices are going up another
S2-$3 per ton this spring. If Mr.
Lewis gets another wage increase
ore

for

his

coal

miners, unquestion¬

ably coal costs

are

going higher.

The

industry's freight bill would
also rise again
if the ICC acts
favorably on the railroads' peti¬
tion for still higher rates.

Scrap

however, seems to have stabilized.
Currently, the "Iron Age" scrap
price
composite,
although
still
10% above its 1947 average, is
about

$2.50

ton

per

under

the

peak reached in October.
I

have

mentioned the
the steel
begun
to
adjust
Leading companies began

fact

already

that, as
industry
has
prices.
to

make

offset,

an

turn of the year.

We have read

deal

in

the

week

of

the

course

so-called

a

the

of

con¬

certed

action

raising

semi-finished
It is
interesting but not
too
important from
the

steel.

really

than 40%

might be
I

is

prices,

standpoint of
Far

of

steel

makers

the

more

increases such

in

for

industry's

rev¬

important,

and

as

were

the

that in the price

not

in

prices for various wire

as

advance

wage

and

as

occurs,

it

that steel
will advance

again

It

60%.

com¬

their

They have indicated that;
mcst of their lines, the exist¬
ing profit margin is not excessive,;
and

review

a

quarter

of

profit

their1

fourth

margins' would

to bear out that observation!

seem

After
all,
a
pretax
margin of
something less than 10% of sale's,
from which 38% plus must be re-f
served for the
government,
abnormally high.
i.4
..

i.

'!

-

.

Profits Outlook

not

is

•

;;

■

\

:

!;

Looking at the profits': outlook ■
for 1948, therefore, and
recogliiz^
ing that the probable wage ad¬
will not be effective in the

vance

first

quarter,

I

expect

firsL

that

quarter profits will be somewhat
better

the

For

indicated

those

quarter

of

1947.

for

How¬

they probably will-be well

below

my

than

final

ever.

first

the

the

year

quarter

pretty

dollar

we

sales

of

of

1947:

whole,

with

that volume

much
can

a

as

assumption

1947.

ward

much

unlikely

panies

rather

up¬

as

prices.

be

changes

comT
more

it is difficult to tell.

on

of tin plate, effective Jan. 1, some
substantial

as

How much

feel, too, that if. when

another

late

fall, and have applied them
with
increased vigor since the

past

stantially more than 40%

.

adjustments

-some

enue.

was

skelp,

ab?orb any freight charge.;
X think it only fair to
sayj
therefore, that steel prices real-j
ized by most mills are
up sub¬

given far less publicity,

ventories

costs

been advanced another 10% since

By far the best quarter
first

10.9%,

9.2%.

was

on

other lines.

all

I

average

in

revisions
and

of

000,000.

the

peacetime

and

price

the industry's revenue, based on
1947
tonnages, by almost $200,-

It is interesting to
that attainment with the

showing

steels, changes in extra
alloy bars, and up¬

the advance in semi-finished steel
last week, probably will increase

of

quar¬

of

ago, revi¬
schedules on

on

total

fourth.

year's

dustry's profit margin and profits.

ing from the

&

produc¬
for

from the standpoint of the in¬

with

Abbett

of

outlook

of the present

ally all

E.

the

back and review the

results

Nicholson have become affiliated
C.

volume

is

it is

think

standing
The

Exchange

stock

10.8%.

compare

great

point to

Neto York Curb Exchange
San

that

what

DETROIT, MICH.—Truman H.
Newberry II is now with Watling,
Lerchen
&
Co., Ford Building,
Detroit

Members
"New

Watling, Lerchen Adds
(Special

was

the

weeks

extra

long ternes
sum

to

last

to that in 1947.

Pacific Coast Exchanges

quarter,

be

Conversely,

cators of the rate of

and

first

will

12

12

Thursday.

Plant

in

influence

the

crease

-14
-16

ANGELES,

9.8%

clearly at the moment.
one of the best indi¬
present steel

.13

.15

the

action

have

us

not

to

9.9% in the third

to

two

the

schedules

more

balance

the

foretell too

Sibley in Los Angeles

(Special

Thanks

for

much

such

From the

of

seen

will accept

•LOS

stable

the year;
ter
and

dropped

in

ward

profit

remained

How

formerly with John B. Dunbar &

news

All

pressure at

future, but that

about

West

*

no

.<

it

to

far

reports suggesting
impending curtailment of de¬
or

conversion

tide.

It

cated!

well, Buckley Bros. Adds Plant
just drifted along And

prosaic market, giving

moment

-as

level.

and the rest

the

holding

there has been

slackening in demand

the

a

taxes

sales.

about

sion

second

average

cannot

few stocks acted better than

with

before

of

less

ucts

structural

the wage ad¬

these

1948
would
total 88,000,000
tons, close to the wartime peak of
89,600,000 tons made in 1944, and
3,000,000
tons
above
the
1947
output.

the market, a few not so

was

margin
9.7%
or

the

and

vance,

the

In

was

for

we

mews

do

sales.

the balance of the year, production

If

the rate would be maintained for

expressed in this they have been, this probably is
necessarily at any a temporary phenomenon brought
time coincide with those of the on
by the fact, so reports tell us,
Chronicle. They are presented as that
integrated mills recently have
those of the author only.]
become
much * more
"tfioosey"

{The

of

20

11

-52

—Walter

After

14.2%

quarter, there

in the

-13

.50

-24

With that favoring set of cir¬
cumstances, plus high production,
a selected group of
companies, six
in ail, showed an average profit
margin, before income taxes, of

48

.12

.23

including nails, barbed
and
fence,
increases
in
prices for pipe and tubular prod¬

1940, the previous
peak year in produc¬
tion, when the pretax margin of

line.

ary

demand is the fact that

a num¬

a trough.
breaking down to about
164 in the Dow averages, it
managed to trudge back to
about 168-170, where it is at
present. During this process

holding the Janu¬
could assume that

Industry

wire,

of the year.

does

53

-22

date is

to

*

Since

1948

make products sold at the ad¬ J products
vanced prices posted at the start

mand, but as yet none of these
apparently has made itself felt in
steel buying.
Perhaps they may

-55

Industries .21

Dresser

*

*

#

A9y2-zoy218
.311/2-321/2 29
4
41/2
31/2

Avco
Bethlehem Steel J. .30

,

rate

37

.

looked Boeing

It

tropical

a

—

Thursday, 'March 4,

some

support around the 165 figure.

Tomorrow's

FINANCIAL CHRONICLE

&

the

same

anticipate
the

will

as

in

that the

industry will

j

{

Volume

be

167-

larger

;

Number 4678

because of

prices

average

be

to

the

THE

when the dollars

higher

prevailing.

the

fact

that

the

profit margin was tilted upward
by the unusually good first quar¬
ter, and for the fact that the pres¬

L

of

sure

costs

ward, I

think

we

that the profit

whole

a

will

profits
;

anticipate

can

satisfied

the

steel

if

are

same

ly lower.

be

amount

for

we can

larger
the

from

direction

in

Bethlehem

'

.

-

and

will

we

probably consome substitutions

tinue to have

.

of

other

materials

of

cause

hav¬

are

acute

for

steel

shortage of

be-

some

forms of the latter.

I think some
of these substitutions
may well be

permanent.

Indeed,

they

the way for others.

pave

may

Never¬

theless,

when the supply strin¬
in steel finally is past, I
think we will find
resumption of
the previous
tendency to adopt

gency

how

of

far

armaments

our

All

of

clearly

us

recog¬

nize that the so-called break

point

the

in

industry

even

has

been

raised considerably by the events
the past seven years.
There
to

seems

be

valid

no

to

reason

which

most

of

analyzing

economy

us

our

compared

as

far

than the capac¬

more

steel

Government's
the

at

following increases in
by
consuming groups:
equipment and appli¬

fabricated

metal products,
practically every¬
thing not previously covered, up
66%

Bear

1939.

in

mind,

of

largely

If

I

is,

I

do

did, it would

be

now

to

it

probably
that,

assume

a

in

the

present

extreme

tice of selective selling by prod¬
uct and market, including refusal
in
some
instances
to
absorb

mills will suffer.

The prac¬

these data reflect the increase in> tice of selling f.o.b. mill is some¬
the number of establishments, not thing that the FTC has been try¬
ing to bring about by legal means
in their capacity.
By the same
for

token, however,
flect

the

they do not

some

increased

•

-

.

,

,

,

<v

:

i

In

in the

economy

much

a

'

omy

At
;

gauge

prospective
future demand for steel, it is my
opinion that the brightest spot is
the
evidence
that
the
nation's
be

■

that

ahead

years

was

time,

econ-

during the 1930's.

as

recall,

you

primary dependence of this
omy

was

with

capital

on

will

the

econ¬

consumers'

goods

expenditures at a
low level.
We should

relatively
; see. of necessity,
level
*

the

a much higher
capital expenditures in
ahead than we had dur-

of

years

'

1900

prospects for some
major consumers, we

by the latter part of this
have reached, or possibly
passed, the peak in postwar in¬
may

year

dustrial
t other

is

.

;

construction.

hand, I

equally

On

believe that there

good

coincidentally,

- possibility
residential

tainly is true that the

.

by

the

that,
.

a n

needed

•

*

-

use

when
are

the

will

amounts

available.

The

public

utilities' plant expansion program
is definitely established, and
pre-

/

sumably

will

.

four years

.

for

-

•

require
to complete.

three

or

Prospects
industry suggest that it could maintain a high
the

automobile

rate of operations for some time.
The container industry still shows

definite
-encies

held

secular

growth

tend-

which, at present, are being
only by the shortage

back

The

more
1

terial

export

market

could

active, if and when the
is

in

use

about

the

this

from

amount

country

three times

available,

and




if

be
ma-

and

market

would

of

Under

normal

more

conditions, that situation
leave

steel

with

makers

the alternative of either

in¬
fast'

as

increases.

absorb¬

ing freight to maintain their sales

volumes,
other
to

by

or

means

one

or an¬

changing their product list

permit

normal

marketing the output
locally. This latter
is possible to a certain degree, but
probably not enough to make up

steel

the total difference.

steel

in

now

lion

in

use—far

it

tons,
gests- to

over

bil¬

a

is -estimated—sug¬
that

me

under

more

business conditions, the
industry will have working

its

behalf

a

factor

of

rising

replacement demand.

more

sult

or

under

Rate

nf Steel

Bv

way

outlook

of

for

.

conclusion

steel

the

on

production

in

net

normal

more

resume

of

the

re¬

condi¬

tions should be for the steel
amounts

Output

The

com¬

absorbing larger
delivered

freight

bill, to the detriment of average
price realizations at the mill.
There probably will also

be at

the years ahead, I think that un¬
less this country is stricken with

that time the elimination of many
of the
extreme seller's market

economic

practices

collapse

pate

can

antici¬

relatively high rate of steel

a

output,

for

from

seen

we

some

time

time.
to

time

press

comments

that

mum

production

of

country

in

We

the

maxi¬

in

steel

peacetime

have

in

the

has

this

never

been

much above
1,000 pounds
capita 'per annum.
That is
true.. It is equally true that pro¬
duction of steel in those quanti¬
per

being

now

used,

de¬

signed to increase the mill price
realization.

While

these

not

are

major in the overall situation to¬
day, they are some consideration
and

should not be overlooked

in

trying to anticipate the shape and
of steel companies' income

size

accounts two
now.

or

three years from

'

I.-;. •.-••••;

/Looking

at

the

-v

/•/•/

cost

picture,
ties is not terribly
unusual, if the from the standpoint of materials,
I
think it is obvious that
1930's are excluded. Our prewar
prices
peak in steel production was 1,040 for
scrap' and, possibly,
some
other
pounds in 1929; output was 1,020
supplies may decline sub¬
pounds per capita in 1940; and we stantially when the extreme de¬
closely approached 1.000 pounds mand pressure is relaxed. At the
same time, it is difficult to visual¬
per capita in 1937, 1926, 1923, and
one

or

ize major declines in cost at the

two others.

Just

as

a

statistic,

without

meaning it as a forecast, produc¬
tion of 1,000 pounds of steel
per
capita
with
the
population
in
during

the

years would mean an

of around
num,

or

next

few

ingot output

mill

of

the

and coal.

major

materials,

ore

Also, if probably would

require

an
economic collapse to
bring labor rates down.

As

an

offset to the latter's high

75,000.000 tons

per

an¬

about 78% of the capac¬

in

the

fourth

quarter

compared with the

as

about 48%

up

as

year
com¬

showing

was

inasmuch

as

of

quite remark¬
the

fourth

quarter

above

the

of

was

for

in

the

of

in the

was

man-hour

re¬

content

steel.

regard, the fourth

1947

indicated

quar¬

the

best

showing on record. In that period,
according
to
my
computations,
approximately
17.8
man-hours
were
required to produce a ton
of

finished

steel,

against 25.9

the

last three

with

compared

as

months of

the

31%; it was
pared with 1940.
We

certainly

dustry

year

16%

was

1947,
1937,
com¬

as

expect the in¬

can

seeking im¬
provement in that direction, and
we can expect that the huge ex¬
penditures which have been made
on plant since the end of the
war,
and which

are

in prospect for

next year or two and

the

beyond, will

work in that direction.

ing companies still

The lead¬

examining,
experimenting with, a variety
of cost-saving ideas, such as the
use of low-purity oxygen in blast
furnaces and for steel-making.
'
Nevertheless, it is rather diffi¬
cult to anticipate any sharp re¬
are

and

duction

in

than

other

steel-making

costs,

the

in

price of
few other

scrap

and, possibly, a
sup¬
plies, over a comparatively short
period. The change downward, if
and

it comes, probably will be

as

evolutionary rather than revolu¬
tionary. Thus, under more nor¬
competitive
conditions,
it

mal

would

seem

to

that

me

we

cannot

expect steel makers in coming pe¬
riods to improve materially, if at
all, their profit margins as com¬
pared with the present and early
prospective future.
Peak

Profits

profits for
However, I believe
are
some
years
of

there

some

that

good

business still ahead of the indus¬

in which the profits
can be relatively substantial, even
though in percentage of the sales
try;

years

they

dollars,

be

not

may

large,

I

think, too, that as the industry
gets farther along with its pro¬
gram of plant expansion, we can
expect a gradual liberalization of
dividend

policies."

/

of steel.

It has

We
as

ply

this

connection

first

should

we

the record,

which shows
that
by
1942
the
steels, had
dropped well behind the indus¬
trial

portrayed

averages—as

by

the Standard & Poor's stock price

The

indexes.
behind

the

group

stayed

industrial

until about 1944, when

tive

performance

well

their rela¬

began

im¬

to

By 1946 and throughout
most of 1947, the steels were well
ahead of the industrials, and they
are there today.
Considering the
profits outlook as I have out¬
lined it, and the present relative
position of the steels in the

mar¬

ket, I arrive at only one conclu¬
sion: this group of stocks
as

attractive

as

of

for

we

sup¬

these

par¬

ticular customers.
"The

total

finished

amount

steel

of

semi¬

sold

commercially
by the entire steel industry is so

small—less that 9% of the indus¬

try's total steel shipments, accord¬
ing to the figures of the American
Iron

and

cannot

Steel

Institute

how

see

such

that I

—

increase

an

in the price of these few
products
can
have any substantial effect
upon the prices of finished
products in general."

steel

Regarding the effect of further
wage increases

steel

on

costs, Mr.

Fairless added:
"I

have

which

I

suggestion to

a

make,

hope

may be helpful in
interest.' It
is
that

public

American
should

industry
and
everything in

do

labor
their

power to avoid further increases
in costs. If steel costs continue to

go

steel

up,

That

up.

prices must
inevitable.

is

country experiences
of

also
If

go

this

third round

a

increases,

wage

expect

it must also
experience still higher

to

prices for most of the products of

industry.
"Is it necessary to have
round

of

a

third

I

don't

wage increases?
it - is.

believe

Furthermore,

I

don't'believe sufch a further
Wage
increase will in the long run

bring

benefit to anyone. In
my opinion,
only result in further infla¬

it will

tion and distress for
many of our

people.
"When United States Steel finds
costs are no longer on the

that

upward

trend,

I

can

assure

you

that it will give earnest consider¬
ation to a reduction in the

selling

prices

of

its

various

steel

prod-

ucts."

Halsey Sluarf Offers
Halsey

Stuart

&

Equip.
Co.

successful bidder Feb.

330,000

equipment

cates,

maturing

1958,
and

naming
rate

a

proval)
1.45

to

trust

The

cured

by

to

ICC

yield

about

ing

in

se¬

estimated

$5,784,030.

the

ma¬

are

standard-gauge

equipment

cost

ap¬

from

to

certificates
new

99.181

Reoffering
to

2.55%, according

turity.

$4,-

1949-

of

21/4%.

prices

was

certifi¬

1,

price

(subject

at

Inc.,
25 for

March

a

of

made

was

to

Participat¬

offering

are

R.

W.

Pressprich & Co.; Hornblower &

Weeks; Otis & Co., Inc.; Freeman
&

Co.; William E. Pollock & Co.,

Inc.; First of Michigan Corp., and
Milwaukee Co.

certainly

it

was

in

B. Ellsworth Radcliffe Now
Is with
(Special

Christopher Co.
to

The

KANSAS
worth

Financial

Chronicle)

CITY, MO.—B. Ells¬

Radcliffe

has

become

as¬

sociated with B. C. Christopher &

Co.,

Board

members

Exchange.
own

unattractive.

alterna¬

source

steel

raw

prod¬

that

seem

off the

and

production
steel

first

not

or

of

averages

prove.

not

cut

of

the

did

sales,

entirely

the

finished

chose

it

ma¬

marketing

steel

steel; for

ucts.

should

the

at least

us

such

on

the

own

railroad

Finally, what does this mean in
terms of steel stock prices?
In
examine

permit

Missouri Pac.

Passed

company

time.

our

tive,

It is my opinion, in conclusion,
that we have seen the peak in
steel

that

use

the

continue

to

to

even

abandon

in

the year 1937 and 21.3 in the year
1940. In other words, the decline

in

to

the

1937, and 85% above the av¬
for the year 1940. The dif¬

In that

ter

1947

average

ton of finished

a

average

paid in the industry in

ered

ton

things:

break

of

of

one

semi-finished

27%

content

a

had

we

doing

about

comparison with the industrials,
yet conversely cannot be consid¬

of

that

us

of

as

level, the industry has only one
alternative
heavy expenditures
designed to reduce the man-hour
—

to

so

duction

is

seemed

alternative

of

less

panies to
High

prospect

of steel.
•

1940

population. That relationship,
plus the tremendous amount of

d

of steel

petroleum/industry

increase

in

creased

the

public works could be picking up
[ and could readily maintain the
high rate of overall construction
1 activity. In the meantime, it cer¬
,

more!

Anticipated

Reviewing
steel's

through

steel

-

of

little

than population. In contrast

ing the 1930's.
:

relatively

as

better balanced

than it

but

grown

trying to

"It

to

ference, obviously,

is

pressure of demand current prac¬

calculations.

my

terial

91%

stantially above the generally ac¬
cepted "average" of 50% to 55%

laxation

pay¬

19)

customers, most of them
large and profitable concerns.

price

the

at

re¬

1947,

(Continued from page
ticular

words, the payroll cost of
making a ton of steel was up

wage rate

This is sub¬

producers.

payroll

other

This

prices and costs, it is in
vicinity of 75% of capacity

most

of

Fairless Defends Rise
In Steel Prices

either to raise
such semi-finished

able

present

the

the

35

This compared with $22.97 per ton
in 1937, and $19.77 in 1940.
In

erage

think

this

the

year

I

in

pared with the year 1940.

meaningless for it prob¬
be different tomor¬

Yet, again for the sake of

di¬

two

according to

ably would

reasonable

that

15,

row.

some

that

course,

companies

know.

review

quarter

1937, and

rate for the

freight,, will be loosened to the
detriment of mill realized prices.
Either that, or operating rates at

include

from

even

in

roll costs to produce a ton of fin¬
ished steel were, on
average, $29.-

Just

Second: I believe that with

93%
increase over 1939;
machinery
builders,
80%
over
1939;
transportation'equipment
including automobiles, 75% above

1939;

leading
not

prevailed.

to

fourth

of 1947

prewar.

steel

ances,

which

has

what the break

for

Bureau

number of. establishments

electrical

which

statistic,

The capacity

Census

trend

time, and without con¬
re¬
spicuous success except insofar as
capacity of
the industry has yoluntarily
establishments existing in
steel
more
1939.
widely.
There
are
established
multiple
basing
probably as many, or more, in¬ We can only guess the amount oL
points. Actually, the ICC, through
stances in the past where steel the increase in steel consuming
has won markets from other ma¬ capacity in this country. Notwith¬ increasing freight rates, is accom¬
terials than vice
standing, I think it is a fair as¬ plishing what the FTC had hoped,
versa, and this
antf J#( $U11 hoping,, to do through
is likely again to
be the !case sumption that, as compared with
court order.
The explanation is
when
more
normal
conditions 1939, it has risen at least twice
ready, as freight rates rise it be¬
much
as
steel
prevail. ///<";
producing
'V;.v'T ^//.//;*-: ./'K:/v as
comes
increasingly difficult for
capacity,' />;v
-.7/''/'■•/
■':''
In short, I am not
particularly
steel companies to reach out over
concerned
Taking
another
fundamental
about the
future
of
any great area to sell products
steel from the standpoint of its view, it is interesting that in the
at a profit.
face of an underlying trend to¬
economic place in
industry. It is
It
seems,
apparently, that
ward increasing use of metal in
still by all odds the most versatile
this country, the fact is that the higher freight rates are here to
and workable of the
low-priced
capacity ' to
produce
steel
has stay; in fact, we may see further
industrial materials.

■

the

per¬

and' of

rebuilding

prewar,

various

first place that steel's place in the
family of industrial materials is

in¬

steel

certain

not

the

produce

the

Safe

We

is

fac'or

shows

Looking ahead, I believe in the

comparatively safe.

the

the end of
1948, as projected, will be about
18% above 1939. A survey by the
.

~r

Position of Industry

it

cause

to

.

'So much for 1948.

benefit

First:

dustry is difficult to foretell be¬

creased

raising its regular
rate, and of Republic in increas¬
'

would

profits

as

strides

Statistics
from
the
American
Iron & Steel Institute, and relate
them to data on production.
In

formance?

Just how much

ity to produce steel.

of

in

ing its extra.

ing,

that

anticipate

marked

connection

Assuming

camp

is that during the
war the nation's capacity to con¬
sume
or
cut
up
steel was in¬

that

the recent actions

the intention.

postwar

There

to have been moves in

seem

Prospects

lieve, to keep its military strength
high levels, and such seems to

with

of

many

companies.

Profits

(1027)

already.
is quite interesting

It

Future

we

armed

tend to overlook in

expect somewhat

dividends

leading

"

-

can

One

expending its peak
capital
purposes/ I

feel that

rection

1948.

try

that

will

year

made

of

nticipate major relief in this re¬
the task, however, we can be rea¬
spect for the visible future, al¬
sonably certain that it would not1 though it seems equally logical to
do the steel industry any harm.
doubt further extension
of the

prognastication,
the fact that the industry, this

and

ity to be in existence at the end

would be. Whatever the nature of

;

-

Despite

CHRONICLE

a
relatively
high
production for the indus¬
for some time ahead, what

this

maintenance

possibly slight¬

or

FINANCIAL

rate of

in

we

reaching

much, if any, better than 1947.
My feeling is that they will be
about the

Perhaps

&

call the world today, it
would behoove this country, I be¬

Finally,
which

be

1948

makers

available to

material.

at

something
Combining these
I believe we

well

for

up¬

average

considerations,
be

strongly

margin in 1948 as

below last year.
should

is

still

that

are

the Marshall Plan will take ;care
of that.

1947

average

for

pay

Conversely, with due regard lor

COMMERCIAL

sas

of

of

Trade

the

He

Building,

Chicago

formerly

Stock

had

his

investment business in Kan¬

City and prior thereto

officer

of John

J.

was an

Seerley & Co.

26

THE COMMERCIAL

(1028)

&

FINANCIAL

CHRONICLE

which

The Bank and Inflation
credit

(Continued from page 7)
cation

between

individual

man-

agement, on the one- hand, and
supervisory
responsibilities,
on
the other.
Competent manage¬
ment in banking is as necessary

.

!
•

"Bank

j

Credit

The

addressing to man¬
this important sub¬

of

effort.

volume
These

of

physical

production.

would

without

infla¬

be

further in¬
crease in the use of bank credit,
but the demand is being steadily
increased through continued rapid
expansion in bank loans, in addi¬

how¬

the hazards of the present
inflationary trends must be faced,
first, before the course of a nor¬
mal peacetime economy can be
finally determined.
have

demands

tionary

and industry, are now

crossroads

has

exerting a strong upward pres¬
prices in spite of the high

ever,

The

credit

bank

Domestic and foreign de¬

•

;

of

sure on

.

part of the background;

proportions.

dangerous

volume

mands for goods and services are

conditions under
which banks have operated in
recent years, due to the peculiarities of the war-stimulated econ¬
omy, and the influences arising
.from the conversion to peacetime
a

Policy During

been greatly inflated in response
to the needs for linancing the war

agement on
ject.
The unusual

commerce

sure

"Our country is experiencing a
boom

trust, therefore, that I will not be
in
my
remarks
am

under

am

Inflation

misunderstood
I

I

have all read it, but, I trust
you will bear with me while I
again read it to you.

enterprise system, as red corpus¬
cles are to the human body.
I

which

released
1947.

you

preservation of the private

for the
,

policies,

date of Nov, 24,

tion

to

any

other factors outside the

control

duction, agricultural as well as
industrial, would be highly ben¬

been

reached, but the direction ahead

eficial.

However, increases can
only take place-slowly'and to a
limited degree. In industry, they

uncertain, hazardous and
A
solution to the national are
dependent on correspondent
and World problems, is contro¬
increases in the available supply
versial and varied, and the re¬
of basic raw materials, plant ca¬
sulting influences have not, as
pacity, and the number and pro¬
yet,
determined
the
proper ductivity of the labor force. There¬
appears

fraught with many problems.

proper

course

to be taken.

It is certain

fore,

further growth of outstand¬
ing bank credit tends to add to
the already excessive demand and

that the effects of these, on bank¬

will

ing,

greatly

determine

the

pattern of our future operations.

a

to make for still

The

To combat

Los

.

Angeles

Times in a
Credit Control,

on

said in part, as follows:
"If

is

ours

to

remain

a

free

economy government, credit con¬
trols of all sorts must be resisted.

It cannot

be

controlled and

Prerequisites
to
the mainte¬
of a sound structure, seem

nance

to

be embraced

servative

free and part
work, and it cannot

fairly complete control, and
they do not recommend them¬

con¬

and

sinews

of

thought
secure

the contrary.

1946

in
the

with

still

seizure of

we

had

handsome surplus

a

accounts

our

the economy.
his
revolution

As I have stated, in

world

and

with the rest of
in 1947 we were

better than

in balance, even

recognition of all these
"The Board of Governors of the the banks, and in a country of though our export prices were
below the inflated woiid level. In
forces and their relationship to Federal
Reserve
System,
the greater industrial and commercial
than
e&ch
other demands that con¬ Comptroller of the Currency, the development
Russia,
he 1947 production and employment
certed action be taken by all;
A Federal Deposit Insurance Cor¬ probably would have been right. n Canada reached heights never
before achieved in peacetime and
reduction in the Federal budget poration and the Executive Com¬
"A
free
economy
apparently
is imperative.
Government ex¬ mittee of the National Association must always be preoccupied with a tremendous expansion and im¬
penditures at the state and mu¬ of Supervisors of State Banks are the rhythm of prosperity and provement of our capital equip¬
ment is taking place.
This high
nicipal levels should, also be held unanimously of the view that depression.
But
the
controlled
rate of capital development—it is
back, so that the competitive pres¬ present conditions
require the economy knows nothing but the
higher
even
than
your
own here
sure of such dollars in the spend¬
bankers of the country to exercise climate of
The

depression."

ing stream can be reduced. Busi¬
expansion for plant and

extreme caution in their lending
policies. It is at times such as
these that bad loans are made

ness

equipment should be restrained
except where needed production

and

Industrial produc¬
tion should be increased and this

would result.

larger per-man output by
Corporate profits at pres¬
ent heights foster demands for
higher wages and thus maintain
and even increase prices.
Indi¬
viduals must appreciate the ben¬
efits of saving rather than spend¬
ing, not only because of the con¬
tribution they' would be making
to the mitigation of the present
situation, but, in addition, because
of the reserves they would be
building lip for the coming re¬
adjustment.

future losses

become

inevit¬

able.

"It

means a

is

that

recognized

a

con¬

tinued flow of bank credit is nec¬

labor.

for the production and dis¬

essary

tribution

of

goods

and

services.

banks

of

the

loans either to individuals

inesses

for

speculation

estate, commodities
They

should

or

In

bus¬

real

securities!
against the

or

guard

over-extension of

consumer

credit

and should not relax the terms of

under

the bank
supervisor in this present picture
is to do what he can, within' his
particular province, to see that

it is true that

an

unlimited

and

indiscriminate extension of credit

existing conditions. should

be confined to financing that will
help production rather than mere¬
ly increase consumer demand.
?
"The bank supervisory authori¬

■

ties strongly urge directors to see
that their banks follow these poK

adds

icies and maintain adequate
capi7
tal in relation to risk assets."

sion of credit is unsound.! do

It is my belief that the majority!
of the commercial bankers of this
nation are and have been fully

to inflationary; forees, the
supervisorj. as. such, is concerned
principally because such exten¬
believe

should
the

that
ever

bank

noi
supervision

be made,

a

tool

for

monetary or fiscal policies of

government. To attempt, to, make
it such an implement would, at

of

aware

the

their

proper

bank credit.

credit

use

responsibility

in

control

of

and

They have met the

demands

of

business and

the very least,

productive

pose,

not be prevented from

confuse the pur¬
of ..supervision and, under
some conditions, cause
it to act
contrary to what it. should be
doing, thus weakening, if not
actually, destroying, its effective¬
The fundamental purpose of
bank .regulation is protection for

ness.

the public—a protection found in
administration of reasonable

the

laws and in the

judging of asset
quality and management' policies
in relation to the condition of the
individual bank and in relation to

general economic conditions.

.The coordinated views of the
supervisory authorities and their
.

attitude toward this perplexing
problem, I believe, have been
very carefully set forth in the
joint statement regarding bank




heavy imports,
its

return

but it will bring

due

in

course,

in

the

ers
Association, throughout the
form of increased Canadian pro¬
country, are indicative of the
duction.
Even so. we could have
bankers'
forethoughtedness and
managed this heavy investment
their sincere desire to adopt a
orogram if our customers had not
orogram without duress by which
had to draw on our credits tc
they may cope with the infla¬ them at such an accelerated
rate,
tionary problem. As supervisors, as a result of recent severe set¬

believe

that

this

met

instalment financing. As far as
possible extension of bank credit

While

in the United States—has involvec

your President,
country have
backs to European recovery. V
Joe Dodge; and his fellow offi¬
important
The position
occup;ed by the
cers,
are
deserving of words of
need in the reconversion period.
United States in the world today
Under existing conditions, how¬ commendation for their untiring
makes it impossible for her to
which
are
being
ex¬
ever, the banks should curtail all efforts,
Ignore that story.
Indeed, it is
pended; The

The

adequately

Position of Bank Supervisors

banking policies fOliowed.

Regional Pilot-Meetings

sponsored by the American Bank¬

we

The special interest of

sound, loans are made and sound

These

enterprise

and must
extending
credit that is necessary to-main¬
tain

the nation's

being.
bank

economic well-

Even though the total of
risen to a high

credit has

level,

this

has

expansion

been

necessary to

supply working capi¬
tal needed by business to main¬
tain
or
increase production at
rising costs for materials and
labor.
Role of Banks
Our

nation.

Nevertheless,
credit
reservoits

the banks
for
their

not

there the least doubt in my mind
that the present system of bank¬
ing is the best, the soundest and
the

servicable

most

known.

yet

However, I believe it is t..e task
of all bankers to keep the masses
of our people convinced of these
truths. Scientific analysis of pub¬
lic opinion, unfortunately, shows
that

a
considerable minority of
people is not of the < same
opinion. In light Of these facts,
the importance of preserving the
present sound state of our bank¬
ing structure must be our con¬

our

stant

This

care.

tremendous

re¬

sponsibility, with the paralleling
greater opportunities for leader¬
ship among the bankers in this
country, today, Will unquestion¬
ably be met and the chaFe^ge is
the big job ahead for American
banking.,
>

and

16)

expanding

North

American

economy.

I have also mentioned the evi¬

dence

provided in the war years
production was a
powerful strategic force. Although
that

we

Canadian

recoil from the notion that it

be called into play again, yet

may

"t is only
Canadian

prudent to realize that
industrial potential is
important strategically now

more

than

it

was.

ever

another

reason

This is surely

for mutual concern

with the health and vigor of the
Canadian economy.

Also, businessmen have learned
that public attitudes affect the at¬
tainment of their considered ob¬

If American business is
primary interest

jectives.

convinced of its
in

the

Canadian market and

the

Canadian

it fol¬

then

economy,

lows that some attention

might be

profitably directed to the educa¬
tion of the American

these

lines.

For

.public along
example, it is

important that American visitors
to Canada realize that their ex¬

penditures help to pay for our
American imports and ere thus
related
to
jobs in the United
poses^ underlying these meetings* acter of the further aid which the
States. Further, prospective Amer¬
certainly are not debatable, but, United States may
give
toward
ican visitors should be enabled to
in the words of Rev. Marshall,
the rehabilitation of countries un¬ detect the
mentioned earlier in my remarks
falsity of rumors that
der a European Recovery Plan is
Canadian so-called "austerity" has
I hope we do not talk too much
not
only
the
most
important
a
and do too little about it.
bearing on their possible recep¬
question before your people at. toe tion in Canada. We were never
T- believe that the bankers* are
oresent time, but it is probably
better able to meet the travelers'
fully cognizant of the hazards of the most important question con¬ needs than we are at present. As
unwise credit expansion and their
fronting the world.
a matter of fact, perhaps one of
adherence to the policy of making
the easiest ways to increase; the
only those
loans
which
meet
Must Reduce U. S.-Canadian /
present $ 12 - figure of American
sound credit standards for purT
Trade-Imbalance ;
per capita; spending.-in -Canada
poses of productivity and for in¬
With or without a Eurooean Re¬ would be a substantial increase
creasing supplies of basic raw ma¬
covery Program-, - if ia obvious that in the present * rate . of receipts
terials will in the long run, have
the heavy unbalance between our from your tourist traffic. a salutary effect on
i
j '
1
\ k
'7 '
inflationary
imports from the United Stater
tendencies, as well as. a beneficial and our exports simply must- be -V;' Increase Canadian Imports ,;1 ^
effect on national morals.:,
reduced.
In 194-7 we bought $2
However, it is. also clear, that
In view of the attention which b'Uions worth of goods from the some means will have to be found
merits

of

the

pur¬

.

evident that the extent and char¬

*

.

•

,

t

has been focused on the expan¬ United States;
which is almost
sion of bank loans, which has oc¬ twice, your purchases from, us
curred in the past year, it might notwithstanding - that there . are
beu appropriate to
express
our just about 12L times as many peo¬

oprnion

that,

this has been
a

in
a

a

maior * sense;

result instead of

business
been

have

assisted

in

the

productive
and distributive process* thev have
promoted the ultimate solution of

problem, which is to bring tKe
supply of goods into balance with
the demand.
I believe that the
present situation calls for the pur¬
our

expansion

of

our

monev

supply,

,

.

.

whereby Canada may have better
access
to the. volume c market of
the

United States.

will enable

This, in turn,,

to

keep our pur¬
chases • from the United States; at
us

States as In
-Including- travel
and a maximum and maintam. ©*ir po-;
the figures work sition
as.
your
best customejv
out to. this result, that each Cana¬ Surely it is best that we develop
dian individual
on
theaverage pur trade with each ojther on a
soends about; $220 in the United
basis of frankly recogniz'ng. oiir
ple

in

the ^United

Canada.

other

of

services

inflation, inasmuch as
in many instances has
obliged by the prevailing
high prices to secure additional
working capital to finance a given States, while each American in-r
physical volume of production. dividual, on the average spends
To the extent; that these loans about. $12 in
Canada.
Even a
cause

-

small increase
make

a

very

in that $12 would

great difference to

Canada.
It

is also

|
good

common

sense,

while scarcities remain in certain

banks, of course, cannot
fields, to maintain the wartime
win the fight
against inflation
orinciole that each of our coun¬
single-handedly. It is a battle that suit of a conservative loan policy, tries should sbore witb the other
requires the understanding and and the discouragement of specu¬ those commodities which are in
the effort
and
the
cumulative lative loans of all types. Not only short supply. Continuation of this
j
force of every individual of this is this desirable to avoid further!
principle will help us to make the
as

if

doubt, if any, in your minds that
American banking has fully meas¬
ured up to expectations, nor is

(Continued from page

Advocates of state control

put out their hands first for the
banks and the credit mechanism

be

somewhat,

a sense of
security by
the times through which we are
passing. I am sure there is little

Canada's Exchange Disorders
and the Remedies

and work

of

Lenin

clouded

part

be entirely controlled

-—the

same

buggy days, but which may have

very well. The world at present
contains several notable examples

selves.

in the

of the horse

rules

been

lulled into

best.

recent editorial

would

higher prices.

inevitable in the after¬

are

of inflation.

inflation, it is axio¬
matic that purchasing power must
areas, and the individual bankers,
as
outstanding citizens of such be reduced without a correspond¬
communities, can do much by ing decrease in available goods
or available goods increased with¬
precept, by example and by pa¬
tient education to convince our out a corresponding increase in
people that inflation cannot be purchasing power. An increase in
allowed to go its heady way un¬ production is not enough; there
must
be
an
increase per man
checked.
hour, or per dollar wage, and the
Clearly, the main battles against
goods
or
their
equivalent, made
inflation must be fought in fields
Even
other than credit contro.s.
The available in this country.
then, we might have continued
objections
to
the
adoption of
irflation if the consumer reduced
severe
credit controls, however,
his rate of savirgs, or spent that
impose upon bankers themselves
which he had previously saved.
a grave responsibility.
We are in
Eftorts to control inflation
by
a
highly dangerous inflationary
means
which do not recognize
situation and every possible pre¬
these ba.ic principles, are merely
caution must be taken to curtail
at'empts to conceal the effects
any credit expansion which might
and any effort to foretell the. re¬
increase
buying power without
sults, would be purely a guess, at
increasing production.

of

the banking system.
"A substantial increase in pro¬

math

Thursday, March 4, 1948

maximum contribution to the

re¬

but, also, to minimize the losses covery of Europe and to a strong

respective skills and energies' and
under toe stimulus of honestly

assessments in toe
of our, respective
Surely this must be

competitive
market

place,

products.
better

than a
and

restraints
the

free

will

dependence
restrictions
of

consumers

upon
upon

and

with all that they
mean in the growth of vested in¬
terests in uneconomic enterprises,
the
continued interference and
producers,

control

by

governments and the

suspicions and bitternesses which
are

sure

to

atmosphere.

develop^ in such an

Volume 167

Number

4678

THE COMMERCIAL

following statistical tabulations

shown in first column
IRON

STEEL

AND

Indicated steel operations

are

CHRONICLE

(1029)' 37

cover

Latest

INSTITUTE:

Previous

Week

capacity).

'percent of

production and other figures for the latest week or month available (dates
or month ended on that date, or, in cases of
quotations, are as of that date):

either for the week

Mar.

7

Month

Year

Ago

Ago

Week

94.6

Equivalent to—
Steel ingots and

FINANCIAL

Indications ol Current Business Activity

The

AMERICAN

&

94.0

93.6

94.4

BANKERS

DOLLAR

ACCEPTANCES

STANDING—FED.

castings produced (net tons)

Mar.

—

7

1,705,100

1,687,100

1,694,300

NEW

1,651,900

YORK—As

RESERVE

of

AMERICAN

PETROLEUM

Crude

oil

runs

output—daily
to

Gasoline output
Kerosine output
Gas

oil

and

Residual

(bbls.)

average

Kerosine
Gas oil

ASSOCIATION

Domestic

5,399,000

5,446,000

4,858,000

Dollar

14,666,000
2,335,000

15,807,000

15,429,000

16,747,000

2,520.000

2,508,000

2,403,000

8,127,000
9,199,000

7,694,000

7,718,000

5,890,000

8,742,000

9,182,000

8,658,000

109,886,000

107,763,000

100,586,000

101,832,000

(bbls.)

fuel

oil output
(bbls.)

(bbls.)

Feb. 21
Feb. 21

oil

OF

in pipe lines—

*

Feb. 21

at

Feb. 21

distillate fuel

fuel

.Feb. 21

4,786,150

Feb. 21

output

(bbls.)

oil

(bbls.)

at

at

AMERICAN

9,731,000

10,408,000

Feb. 21

34,004,000

36,195,000

11,997,000
42,402,000

Feb. 21

33,929,000

49,782,000

50,038,000

51,094,000

44,037,000

shipments
warehouse

foreign

ERAL

RESERVE

As

Jan.

of

734,262

771,992

Feb. 21

719,990

669,847

666,119

COTTON

ENGINEERING

CONSTRUCTION,

Total

U.

S.

construction

1—

:—

AND

LINTERS

680,578

In

public storage

$128,741,000

$88,555,000

$99,683,000

Feb. 26

$91,704,000

Public

49,139,000

42,912,000

46,614,000

Feb. 26

79,602.000

56,069,000

Feb. 26

27,712,000

45,643,000
30,751,000

43,115,000

Feb. 26

45,141,000
46,563,000
42,213,000

51,890,000

14,892,000

9,954,000

4,350,000

construction

State

and

municipal.

Federal

COAL

OUTPUT

Bituminous

(U.

coal

S.

BUREAU

and

lignite

Pennsylvania

anthracite

Beehive coke

(tons).

OF

..Feb. 21

12,840,000

'-1,229,000

11,230,000
1.038,000

12,200,000

Feb. 21

1,180,000

1,050,000

137,700

"135,200

130,600

120,000

Feb. 21

13,030,000

STORE

SALES

SYSTEM—1935-39

RESERVE

AVERAGE—100

>'

•

\K'.V-

Feb. 21

-Ziu-

ELECTRIC

Electric output

FAILURES

IRON

AGE

AND

.Feb. 28

INDUSTRIAL)—DUN

&

(E.

:.

PRICES:

Lead

refinery

tin

iSt.

Zinc

(New

249

238

.

226

S.

St.

Govt.

23,730,000

23,858,244

21,412,000

21,919,36if

9,544,000

10,587,614

454

402

444

12,960,000

'12,881,000

12,514,00#

6,640,000
6,320,000

"6,577,000

6,393,004

"6,304,000

6,121,004

158.2

157.2

152 .A

183.9

182.1

177.fl

138.0

137.6

133.4

1—-

356.6

"345.0

305.3

——;
—:
Non-durable goods n
Estimated number of employees in manufac-

"384.6

337.3

314.8

,,"306.2

275.t$

15,951,000

'15,871,000

15,348,000

....

—

at

at

at

Louis)

ill,—.

at

PRICES DAILY

5,429,202

(000's

EMPLOYMENT
OF

AND

Bonds

number

Group

BOND

YIELD

DAILY

Durable

93

107

-

91

74

Govt.

Bonds

3.23940C

3,23940c

Feb. 24

$40.37

$40.37

$40.00

$40.08

♦3.19411c

.

"i

2.86354c
$30.15

$34,08

;

Public

Utilities Group
Industrials Group

turing
All

Fats

;

INDEX

21.200c

21.200c

21.200c

19.400c

21.600c

21.600c

21.550c

20.550c

Feb. 25

94.000C

94.000c

94.000c

70.000c

Feb. 25

15.000c

15.000c

15.000c

14.000c

Feb. 25

,14.800c

14.800c

14.800c

13.000c

Feb. 25

12.000c

12.000c

2

.Mar.

2

.Mar.

2

Mar.

2

.Mar.

2

12.000c

Mar.

2

100.72

■:

10.500c

FERTILIZER
BY

AS

ASSOCIATION—WHOLESALE

111.25
'■

111.25

116.41

>

114.85

-

110.52

110.70

goods

*

Livestock

;

115.63

122.09

114.27

120.02

110.34

109.97

117.0

103.64

103.80

103.80

2

105.§9

105.52

105.34

.Mar.

2

112.93

112.93

112.37

.Mar.

2

115.00

115.24

114.85

-

2

Mar.

2

.Mar.

2

.Mar.

2

2.45

2.45

3.10

•>
.

v

2.83

Piece

:

3.14

.Mar.

2

3.53

Mar.

2

3.41

118.20

materials
and

...

drugs

;

materials

machinery
combined

groups

NATIONAL PAPERBOARD
Orders-

received

Production

3.10

:

•**-

2.83

V

2.91

.

.

•;

.

2.45

2.20

3.13

2.79

2.87

2.55

v
-

-

2.94

.

'

OIL,

...

activity.

orders

(tons)

PAINT AND

;

...

at

L_

...

DRUG

REPORTER

WHOLESALE PRICES—U.

S.

DEPT.

OF

products
and

...

products—

.

—

...

lighting materials.

and

Building
'

leather

products

and

Metal

metal

products

materials

Chemicals and allied products
Housefurnishings goods
Miscellaneous

commodities

Cotton

Raw

...

7,617,000

138.7

133.A

Manufactured

139.7

—_—

—

—

128.4

122.*

145.5

139.#

126.6

134.7

—

.—

*

136.9

135.5

135.7

164.7

163.7

140.il

and

——.—:—

comfortables

.

—

176.2

174.6

162.#

140.4

139.5

136.1

apparel—
107.0

116.7

106.8

■

Aprons and housedresses

147.0

146.1

140.3

Corsets

133.1

132.9

129.7

155.5

154.1

146.it

brassieres

and

Underwear

Men's

_■

——_——"
—

135.7

———

.

2.80

Underwear

3.14

Shirts

3.43

3.02

Hats

136.5

139.3

138.9

126.#

'

•

—

151.2

—

neckwear—

and
and

-.125.7

133.8

.

138.0

apparel—

3.17
/

129.6

128.7
146.3

,

3.52

-

134.1

128.6

—•

.

goods
——

Blankets

136.7
130.H

135.3

v'V
——

Sheets
Women's

140.5

137.5

'

138.7

——

wear

*

142.0

—■——

——

132.0

•—,

caps

3.01

3.01

3.04

2.74

.Mar.

2

2.90

2.89

2.91

2.61

Clothing,

including

148.3

131.a
138.7

130.6

126>#

126.8

126.8

127.5)

130.7

130.0

125.)

166.1

164.3

146.6

130.2

130.2

122.#

120.3

119.7

116.3

142.9

142.6

134.3

150.2

149.5

144.1

153.0

151.0

146.U

123.5

123.8

121.H

,

/

products

2

414.3

444.1

407.1

416.8

Underwear

—„—...

227,0

227.6

238.8

.Feb. 28

239.1

243.5

278.9

301.0

.Feb. 28

250.1

248.2

271.9

251.4

.Feb. 28

310.3

303.3

331.0

263.2

263.8

310.2

223.2

-Feb. 28

/

242.3

240.5

259.1

253.3

.

220.8

220.8

220.8

159.4

172.7

169.7

181.4

157.1

211.1

211.7

219.1

208.4

-Feb. 28

163.5

"163.5

162.1

142.C

.Feb. 28

232.8

232.8

233.6

212.£

.Feb. 28

157.0

157.0

155.3

.Feb. 28

137.6

137.6

138.0

.Feb. 28

143.0

143.0

142.0

133.7

155.3
'

Luggage

125.6

.Feb. 28

138.1

137.2

137.2

126.3

.Feb.28

214.6

"214.3

224.5

197.8

NEW

firms

188,002

.Feb.21

99

101

104

103

.Feb. 21

436,430

450,393

423,160

565,571

extended

Credit
Cash

on

Total

of

hand

d

146.9

-

150.0

-;

152.2

Market

value

Market

value

Stock

159.2

159.7

164.4

144.3

Feb.21

181.7

180.9

199.2

171.7

170.3

173.3

177.4

162.5

Feb.21

193.3

196.2

201.5

175.8

Feb. 21

146.9

146.7

Feb. 21

131.6

131.6

Feb.21

155.5

154.8

145.5

135.4

130.4

98.6

153.9

138.4

Feb. 21

191.9

192.0

191.3

172.6

Feb. 21

134.9

134.0

139.3

129.2

Feb.21

143.6

137.7

137.2

125.3

Feb.21

119.1

120.2

123.6

110.7

S.

69,626,67#

140,965,96*

12-31-24—100/——_

76.8%

$63,062

$57,276

$107,025*

222,255

243,585

186,90b

$302,275

$295,256

$246,114

U.

/

other collateral

—

BANK

LOAN

(000's

omitted):

———>

——;

———*

I

RYS.

164,973

160,297

144,342

129,866

113,224

$1,006,626

$954,569

$847,043

Total

$65,577,488

$76,433,363
16,909,777

$64,122,214

93,343,140

82,415,58?

after

Contingent

deductions

156.2

Federal
Dividend

Feb. 21

153.5

154.5

156.5

140.0

154.1

-154.9

156.7

147.5

147.5

147.6

income

charges

—_——

:
—

of

18,293,375

3,997,711

2,948,450

89,345,429

79,467,13#

52,760,954

41,842,323

3,857,363

3.021.352

48,903,591

38,820,974
28,655,243
1,235,291

—-

3,774,370

29,916,237
1.266,977

29,341,103

24,558,625

32,706,844

1.711.353

12,551,813

30,981,567

8,6^0,008

7,915,305

9,274,950

2.36

2.44

2.11

'

—

(way

income

85,193,558
3,339,542
81,854,016

structures & equip.)—
defense
projects.

charges

&

taxes

*

—

1,355,393

appropriations:
stock

On

common

138.3

On

preferred stock

128.3

Rof'o

of

from

fixed

for

fixed charges

income

141.3

19>616-°™

—,—

available

Income
Income

—

—

income

Miscellaneous

CLASS

income——

operating

income

Other

44,761

November:

of

railway

S.

52,15rr

230,492

55,111

165,973

—--

U.

71,029
238,334

Commerce Commission)

(Interstate

—Month
Net

OF

79,345

253,110
61,581.

—

———

ITEMS

82.4%

NON-FARM

IN

HOME

Dec.

>

184.8

;

S. Govt, issues—

Associations——

■

69,00'#

68,312,500

Companies.——

INCOME

SELECTED

156.5

Feb. 21

687,37*

Miscellaneous lending institutions

173.4

Feb. 21

613,121

136,206,807

of

Loan

Trust

623,307

73.9 %

on

Month

442,533

balances-

66,090,349

companies

and

155.6

products




U.

OF
—

Insurance

173.6

products and foods

$533,031

60,997

400,702

136,232,046

FINANCING

and

Savings

155.9

farm

$577,877

56,409
415,294

'

bonds——————-

on

borrowings

ESTATE

Feb.21

farm

$568,643

——

shares-—-

listed

borrowings

Member

Feb.21

than

126.0

S

U.

in

credit

free

listed

of

banks

In

and

of

balances

debit

customers--

to

index,

price

Member

Total
Feb.21

1

130.&

accounts—

margin

net

customers'

Individuals
147.0

'

128.7

131.4

omitted):

carrying

Mutual Savings Banks
.Feb. 27

129.9

137.5

131.7

—

EXCHANGE—

customers'

of

177,282

183,376

than

1

appliances—:

(000's

31

Jan.

Total

AREAS

158,637

171.191

v.

of

As

Member

BOARD

160,330

.Feb. 21

STOCK

YORK

147,458

.Feb. 21

;

130.5
137.3

—

—

household

Electrical

China

•<<y

324.4

v

188,717

—

222.2

.Feb.28

.Feb. 28

——

coverings

Radios

.Feb. 28

All

figure.

—

Furniture

All commodities other
commodities other

——

wear—

Socks

Amortization
articles

overalls

children's

and

Depreciation

materials

♦Revised

7,731,00?)

"7,885,000

—

V

wash

3.42

groups—

Semi-manufactured

:

—

Woolens

Net

Special

PRICE

7,986,000

7,896,000

(COPYRIGHTED)

_

goods—.

3.52

2

Feb. 21

Fuel

RETAIL

>8,055,000

——__u——_—-

children's

&

3.15

.

LABOR—1926=100:

All commodities

1

——.

1:

furnishings

>

1

.

Textile

:

—

>' ■/

PRICE,

AVERAGE=100-____L._.^___.

:

<

Hides

•<-

•

Domestics—

REAL

■_*„

INDEX—1926-36

Farm

'

———

1935-39—100

goods

Banks

'

"

399.3

2.65

ASSOCIATION:

(tons)

(tons)

Percentage of
Unfilled

—-

v———

•,

goods/—

FEB.

Silks

120.84

.Mar.

.Feb.28

commodities

Fertilizers

All

—

:

""Women's apparel

110.52
112.75
'

'

2.91
•

.Feb.28

Miscellaneous

Farm

'

—v._

—

PUBLICATIONS

OF

Floor

Fuels

Fertilizer

'

■

:

goods

Men's apparel

117.20

116.41

114.85

COMMOD

Cotton

•;

'

Composite index

t

104.46

GROUPS—1935-39=109:

oils

and

Chemicals

—_—__r„„——*.——

goods

industries—

INDEX

Piece

100.69/

100.70

.Mar.

-Mar.

products

Building

:

workers in

'

COMMODITY

INDEX

Farm

December:

production

manufacturing

Infants'

ITY

DEPT.

S.

Indexes—

FAIRCIIILD

Feb. 25

.Mar.'< 2

NATIONAL

place,

manufacturing
Durable goods

'

$40.17

$40.83

Feb. 25

.Mar.

Group

MOODY'S

In

All

AVERAGES:

Average corporate

Railroad

of

of

indexes—

Furs

*

—

manufacturing/-———

Payroll

Feb. 24

.Mar.

Group

Utilities

S.

COMMEKCE)-

OF

PAYROLL—U.

.Durable goods

Home

Industrials Group

U.

31—

omitted)

LABOR—Month

Estimated

4,797,099

AVERAGES:

Baa

MOODY'S

of Jan.

as

(DEPT.

Non-durable

a~ILII11iziiiizzii—
Public

290,77*.
-75,832

71*522

"

.

10,802,000

/■-;,

corporate

Railroad

101,645

-21^506

233,579

21,450,000

QUOTATIONS):

at.

York)

York)

BOND

Average

5,228,327
94,56#

73,514

spindle hours, .January.
Average spindle hours per spindle

All

5,254,002

'

'

—

J.

949,99*%

2,270,704

5,478,623

31

Jan.

Active

216

753,406

2,153,547

101,832
'

of Jan. 31

as

860,202
2,222,254
5,116,954

23,786,000

SPINNING

Infants'

U.

$236,000,000

January—.1—

of

of

as

Non-durable goods

__Feb. 26

at

Louis)

(East

MOODY'S

$287,000,000

copper—

(New

Lead

1

$290,000,000

manufacturing industries—
All
manufacturing
——;

5,251,935

Feb. 24

M.

&

Export refinery
Straits

■

COM¬

21,919,00ft

BRAD-

(per lb.)

PRICES

Domestic

>

Month

spindles active

Durable

Electrolytic

$241,436,009

—

steel

Pig iron (per gross ton).,
Scrap steel (per gross ton).
METAL

$261,269,000

of Jan. 31

as

storage

Employment

—.

COMPOSITE

Finished

$262,031,000

'

(in 000 kwh.)„.

INC

OF

Spinning spindles In place on Jan. 31
Spinning spindles active on Jan. 31

<

STREET,

7,736,009

21,412,000

j'

INSTITUTE:

(COMMERCIAL

10,861,000

BALES—

Public

Non-durable

EDISON

'

INDEX—FEDERAL

13,009

72,537,000

21,450,000

'

DEPARTMENT

2,850,000

YORK—
t

DEPT.

—

consuming (establishments

January

(tons)

NEW

In

COTTON

MINES):

(tons)

OF

In

Cotton

Private construction

14,928,000

1,450,000

Month of January
1—_
establishment as of Jan. 31

consuming

..Feb. 26

15,210,000

*

;

In

NEWS

12,033,000

15,657,000

between

-

BANK

776,689

RECORD:

34,986,000

9,757,000

OUTSTANDING—FED¬

MERCE—RUNNING

805,376

shipped

30

Linters—Consumed

ENGINEERING

and
-

PAPER

Lint—Consumed
—Feb."21

$171,740,000

63,323,000

1

—

COMMERCIAL

11,629,000

stored

countries

Total

.

$159,268,000

53,198,000
11,081,000

credits
.

goods

on

Ago

$168,108,000
i

,

exchange

Based

RAILROADS:

Revenue freight loaded (number of cars)
Revenue freight rec'd from connections (number of cars)
CIVIL

;

_

5,336,287

Year

Month

31—

*„

5,347,175
5,378,000

Feb. 21

oil

and

Residual

5,342.325

(bbls.)

Stocks at refineries, at bulk terminals, in transit and
Finished and unfinished gasoline (bbls.) at
-

Feb. 21

(bbls.)

distillate

fuel

(bbls. of 42 gallons each)

average

stills—dally

Previous

OF

Exports

INSTITUTE:

Domestic

Crude

BANK

January

Imports

Latest
Month
OUT¬

income

"Revised

figure.

to

:

'

— -j———-———

fixed

charges

—

V

THE COMMERCIAL

(1030)

38

FINANCIAL

&

CHRONICLE

1948

Thursday, March 4,

f
the

Have U.S.-Soviet Accord and Avcid World Crisis!
fields.

cities, railways and wheat
Let

make the even

us

un¬

more

likely assumption that we could
iiussian surrender without
invasion of Europe and Asia by
our
own
ground forces. And let
us
then picture what the world
would
be like
after this great
lorce a

least

at

have

must

You

some

economic desert and
the
moral morass which
World
War II has made of Germany. You
are not unaware of the fact that
the

of

of Germany is one

this condition

chief

the

of

all

why

reasons

of

Europe is today in the throes of
economic crisis and why we,

an

in

self-interest,

our own

are com¬

pelled to pour billions of dollars
into
relief
and
reconstruction.
Picture

to

in

rope

a

yourselves all of Eu-!
condition far worse than

in

which Germany is today,
cities in ruins, its popu¬
lation decimated and infected, and
that

with

poisoned.

crops

Picture

all of Russia in the state in which
Germans left the region

the

from
Imagine
similar campaign

the Vistula to the Volga.

results of

the

a

against the Red Army in the Far
East involving the destruction of
and cities in northern China, i
then imagine us, victorious
triumphant amidst the ruins
created by our atomic and bac¬
crops

And

and

teriological
Can you

weapons.

visualize what it would

be like to be

would

it

world

in

lest

it

rise

the

American

turn its

American in such

an

Can you envision what
mean
to keep such a

world?

a

subjugation
day against

permanent
some

up

master

and

race

of pestilence
and destruction against the United
States?
Can you see this country
remaining as an,island of pros¬
own

weapons

perity in such

And, if

world?

a

impossible, e6n you
picture the job of reconstruction

this

we

the

to

viet

the

of

the

is

expansionism

cause

sole

threat

present

to

We have not tried to un¬
derstand the causes of Soviet ex¬
peace.

Nor have we faced

pansionism.

would

there

that

fact

the

be

a

similar threat to the world's
peace if power had become con¬
centrated in the hands of any two

irrespective

super-powers—quite
nature

the

of

of

intentions

or

seems

have

should

order to save

undertake

to

in

prosperity?

our own

the

is

harvest

bacteriological

should

we

weapons were

like¬

wise turned upon us.

Not

War

an

policy which does not begin with
trophe.

It will lead to catastrophe
it

because

will

be

not

by applying
rash.
To make

measles

of

case

ointment

to

the

have applied
an
ointment
which
contains a
number of strong irritants.
<
matters

we

worse,

Proceeding in this manner, we
have acted on the assumption that
major aim must be to arrest
contain Soviet nationalism and

our
or

policy for peace,
and
anything less than a wholehearted
search for peace will not find the
road to peace.

faith

It is in this context of
the

of

lack

it

that

think, examine

or

must,

we

I

present course
of action in dealing with the eco¬
our

nomic and

political aspects*of the
world crisis. The first step in any

such examination must be the

re¬

alization that the world economic
crisis

and

crisis,

while

in

fact

world

political

related, are
separate problems.

closely

two

Neither

other.

the

be solved without the

can

Yet each requires its own

separate diagnosis and cure.
•

Much

sion

present time

the fact

that in

our

to

ously, in
the

we

do

we

while

political crisis,

down

the

Truman

the

war.

well-founded
Doctrine

applied in Greece, the Middle

East,

China,

make

us

Korea

systems, disinherited prewar

war

a

forced choice between totalitar¬

The
at

should

Russians the
of

policy,
from

we

Marshall Plan

Recovery.

If

we

these two
our

pres¬

should be able to

our

present paralysis

of frustration and fear.




Czechoslovakia

make

realize

us

was

which

Socialists

Czech

the

of

powerful advantage

growing political vacuum. It
the weakness and insecurity

a

opened the door for the commu¬
nist seizure of power.

the game
fears

Union

wants

as

to

Neither of

motivations.
to

fight the other.

is

afraid

that

unavoidable.

us,

us

as

Russian

understand

we

The

stop

understands

and

us,

little

That is what makes

doubly dangerous.

And

each

so

us

become

may

of

us

tries to take out insurance against
the failure of the effort to main¬
tain the peace.

by

surance—

In taking out in¬
pushing out fron¬

When this op¬

of the Soviet orbit.

failed

eration

lamentably

—

as

it

has in Greece and China—we be¬

to

gan

add

military
this

and

bluff

fails—as

bluster.

When

it surely

too

will—we shall come face
unpleasant choice

to face with the

from

that dilemma

continuation

-A

of

our

present

policy will not only bring us near¬
er and nearer to war and prevent
the

making of the

peace

for

settlements in Europe and

the

which
erect

long-overdue

we

also

fatally Under¬

destroy the machinery
maintenance

of

peace

have been struggling to

through the United Nations.

is the road to

This

What mat¬

that

is

ters

Never

war.

it.

who started

only we can stop it,
right now attack
Russia, and Russia could not right
for

could

we

attack

now

us.

with much of what I have
said, and who then come to the
strange conclusion that we must
oppose the Marshall Plan for Eu¬
ropean
recovery,
because
the
agree

Marshall

of

Plan

flow

not

does

surrounding aura of the Truman
Doctrine.
This, to my mind, is
like dumping out the baby with
the bath.
There is nothing the
matter with the baby just because
the water in its tub was too cold
There

is nothing

the matter with

the Marshall Plan

just because the
whicn

Doctrine

Truman

sur¬

rounds it is too hot.
This is not

a true parallel
something wrong

quite

because there is

about the Marshall Plan. It sftoula

through the United Nations.
But it cannot flow through the
United Nations until that body be¬
sometning

comes

more

tnan

am

battle of votes

for the

arena

the

time taking out insur¬
against its coming, is a silly-

same

ance

as

well

of

the

dangerous game. It
is silly and useless because most
a

as

insurance

and

we

Russia

taking out is actually insur¬
against

ance

the

against the next
ic

last

war—not

In

one.

an

atom¬

and

bacteriological -struggle
waged largely by air across tht
polar regions, what good will it

have done

Peron?
done

us

to have armed Senor

What

Russia

sphere

of

And

vetoes.

S.-U.

the

to

ana

this, in turn, cannot

S. S.

even

relations

R.

ana

fundamental

more

national sovereignty
and
power
politics, in a world
where power is concentrated in
only two focal points of super¬
of

problem

will it have
pushed its

good
to

have

influence

into

not dealing with a the¬

are

Central

Europe? If war comes^ we shall
oe swept out of Europe overnight;and the Red Army is not going to
sail up the River Plate and land

economic

crisis

delay in put¬
ting the European Recovery Program'Hhto effect could product
such - widespread
suffering
and
despair—such a deterioration in
the eohdftron of an already seri¬

Nations

United

there

will

be

is

to

ensure

thai

plan for aiding

no

until
such
problem o.

European
recovery,
"as the- overall

Time

U. S.-U. S.

the

S.

relations is

R.

re¬

buy¬ solved. By that time it may weL
ing worthless expired policies and* be Too late!' The counsel of per¬
paying for them by mortgaging fectionism thus becomes the coun¬
sel of defeat.
¥ ,v
the heritage of the entire human
:
race.
V v
Our Domestic Scene
The time and energy we ».and
The same thing is equally true
the Soviet Union are wasting in
at Buenos Aires. We are both

.

,

bluff

and

bluster—the

resources

domestic

on

our

of

decision.- Let

scene

in this year

also

may

straight

to
*<.

The

and substance of what

sum

is this:
justified

I have to say to you

Let

not permit our

us

misgivings to blind us to the fact
that part of what we are doing—
or trying to do—is right and leads
to peace.
The Marshall Plan is
the right way to go about meet¬
ing the world economic crisis. Lpt
us support it, stick to it, and not
lose our faith in it because it is
present encumbered with dan¬

at

political barnacles./

gerous

hand, let us not

other

the

On

enthusiasm

justified

permit

our

lor the

Marshall Plan to blind us

that—though sound irt

to the fact

itself—the Marshall Plan will fail

chance to op¬

unless it is given a
erate in the

context of an entirely

approach

different

the

on

are

why we
track in our

and

where

understand

the world

to

Let us learn to

political problem.

wrong

present political approach. Let us
not be afraid to make known our
our present course
Greece, in China, in.

opposition to
action in

Germany
that we

shore

or

wherever we feel

backing the restora-£

the

past

helping

or

to

its rickety remnants.

up

Let
to

—

are

of

tion

work together as citizens

us

that our great nation sup¬

see

ports governments, groups within

nations,'

individuals be¬

even

or

what

of

cause

they

are

striving

for—and not because of what they

striving against. Let us, above

are

acting out of fear and
faith and hope

stop

true

of

machinery

but

community

The Sum and Substance

shall Plan because it does not flow

the

re¬

disaster.

all,

through

must

we

that

the

patient—as
to
confront any subsequent plan with
a
problem of entirely different
magnitude and complexity.
The
consequence of rejecting the Mar¬

ously "weakened

pay

judgments, it

our

that

me

conscience

vidual
lead

that

is such

few weeks of

a

even

alone

we

"politics is the art
of the possible," and that the un¬
advocacy of per¬
compromising
fectionism may satisfy the indi¬

of

We are dealing with an acute
practical problem. We cannot af¬
ford to ignore the factor of time.
The

price of
to

member

flow

ory.

Moreover, this two-handed game
trying to avoid war while at

for the

through the United Nations ma¬
chinery and is tainted with the

We

act instead out of

and calm confidence.
What

Thirteen

today.

world

whole

the

of

t

Franklin once
Colonies is

Benjamin
the

of

said

together," he
said, "for, if we do not, most as¬
suredly we shall all hang sep¬
arately." If the men in the Krem¬
lin are not yet prepared to recog¬
nize
that
truth,
then
let
us
"Let

hang

all

us

proclaim it to them by word and
deed, until the time comes

when

stop acting out of fear
using fear as an instru¬
ment of power.
This will take
courage, patience and forbearance
in the face of continued intransi¬
they

too

and stop

gence

and provocation.

Neverther

less, it is the only road to peace.
The advice of Abraham Lincoln

tial—should be devoted instead to

give you an
illustration.
In
Illinois, Senatoi
Wayland Brooks comes up for re¬

reaching

election next November. He is the

national conduct as well. "No man

we

are

up

our

tice.

each

devoting to building
respective military poten¬
an

Many of the nations of the

world

have

already

committed

Colonel
"Tribune."
ocratic

velopment.

Neither
We, the
strongest members of the
United Nations, are lagging be¬
the

We have not.

Soviet

Union.

our

fellow members

ol

Chicago

Against him the Dem¬

nominated

has

party

Marshall Plan.

this

two

candidate

McCormick's

an

outstanding liberal and progres¬
sive, Paul Douglas.
The newlyemerging Third Party is reported
to be planning to put its own can¬
didate into the field, for the sole
reason that Paul Douglas supports
—while the Third Party opposes—
the

has

me

the

and

creature

themselves to support such a de¬

to

The result of

action, if it is taken, will be

split the progressive vote

and

re-elect to the United States Sen¬
ate

one

its

of

most

irreconcilable

and

reactionaries

outstanding

Does -that
make
willingness to subordinate our isolationists.
*
to the will of the united sense?
'
I can fully understand the dis¬
peoples of the world.
gust with which Mr. Wallace and
Must Remove Soviet Mistrust
his followers view much of the

in

,

Here

cannot expect

again—we

Russia to make the first

move.

We

cannot expect

the Soviet Union to
subordinate its power to a strong¬
er United Nations, so long as the
Soviet

Union

its most

fears

and

distrusts

powerful member and

so

long as that member controls a
majority of votes in the Assembly
and Security Council.
It is our
move:

our

move

selves

for

world

we

considered the United Nations

taking

to

declare

want

ing Soviet expansion.

move

unilateral
world
to

find

our¬

action

ance

of

both

of

and perform¬

our

two

major

I not only understand but
share it. But I cannot sympathize
with the advocacy of a procedure
which holds out no practical al¬
ternative and which can lead only
parties.

to

the

magnification of the very
evils against which the protest is
justly directed.
It

seems

to me

that there is

an

a

officer holds good for

young

resolved to make the most

of him-'

said Lincoln, "can spare
personal contention. Still
can he afford all the conse¬

self,"

time for

less

including the vitiating of
the loss of his

quences,

temper and
self-control."

his

world waits for us—not to

The
choose

the pattern of

direct

and

its future—but

to lead in the di¬

of
That
toward
totalitarian dictatorship. But nei¬
ther is it toward an "American
the

which

in

rection

mankind

desire

direction

is

to

masses

move.

certainly not

Century." Our power of attraction
masses of mankind is not

for the

what

we

are,

but what we have

believed

always

The

to be.

being, 7 and

in

have tried—not too
more we

successfully—

reconcile our

daily lives here at home with the
beliefs and principles upon whieh
this nation was founded, with the
we profess but often
practice, the simpler will
become our problem of 'dealing
with the world beyond our bor¬

faith
fail

which

to

ders.

,V

.

Finally—let us not be cohfused
by slogans. There is all the differ¬
ence in the world between a pol¬
icy of conciliation and a policy

of

essential difference between mak¬

appeasement, just as there is all

to stop

ing judgments that affect only our
private lives and making judg¬

the

if

government;
out

present leadership

to

if

government,

want peace; our move

pendable in the interest of arrest¬
We render

would

who

power.

A Two-Handed Game

At present we are acting as if we
ex¬

those

are

of U.

power

far

There

fears of the other.

mind

fectionism, for there

the price for it. As citizens, where
we ask otners to
share in paying
seems

happen; until we find a totally
different approach to the problem

itary power, or pulling out with
considerable loss of face. We are
very

se¬

own

tiers, expanding spheres of influ¬
or acquiring far-flung bases
of us lends reality to the

hind most of

not

our

—each

putting up or shutting up—of
actually employing our own mil¬
of

with

risks

curity.

wants

us

Yet each of

war

understanding with
each other and to building up the
Machinery
prestige and power of an effective
In carrying out this policy of world
organization for peace. The
seeking to accomplish. contain¬ United Nations is merely a begin¬
ment of Soviet expansion, we be¬ ning. It must develop—and soon—
a
world
gan
by thinking that. we could into
government
en¬
accomplish our purpose through dowed with the sole right to use
furnishing arms and dollars to force, if this peace is to be some¬
those who stood on the periphery
thing more than an uneasy armis¬
Peace

Our Policy Undermines

and

contradictory trends in

has

that, in failing to support demo¬
cratic socialism, we are giving the

mine

separate

in

last

unjustifiably doubtful of

to

which

tragedy

occurred

just

it will

able

escape

groups,

Asia;

European

were

and

similar policy.

are

power

perfectly true that the So¬
is pursuing a very

Union

Italy. Everywhere we are drift¬
ing, as the prisoner of our own
policy—and to some degree as the
prisoner of our qnconscious predi¬
lection—into a course of backing
the restoration of discarded pre¬

Japan

the wisdom of the

ent

are

It is

ence

the

today.
we

to

road

distrust

of

re¬

attempt to deal with

our

and

for

see

simultane¬

Our instinctive

as

not

pursuing the

are

peace,

world

drifting

that

policy of economic

construction

path

anguished confu¬
derives

our

the

at

from

of

man.

communist
ideology.
This has led us into
strange and dangerous ways.
It
has caused us to ally ourselves
with any and all governments, or
groups within nations, which op¬
pose communism and are hostile
to the Soviet Union, no matter
how
corrupt or anti-democratic
they might be. I need cite among
governments only the examples of
Greece, / Turkey, China
and—in
our
own
hemisphere—Argentina.
And, as illustrations of
groups
within nations, I would mention
our backing of the reactionary el¬
ements in Germany, in Korea and,
to a lesser extent, in France and
handmaiden,

its

whole¬

a

hearted

China, Greece, Turkey
and
even
Italy.
In our frantic
anxiety to stop Russia, we are
tending more and more to set our¬
selves up as the world's police¬
to

Soviet

ian terror and anti-democratic re¬

this assumption will lead to catas¬

tion with any of our fellow mem¬
bers. We have done this with re¬

gard

wherever

foolish

Nations

without consulta¬

tions and often

orbit, we have developed a policy
of trying to arrest the phenome¬
non—which is like trying to cure
a

to t^e United

who hold most of the
world's
military
and
economic
power, now brandish or use that
power outside of the United Na¬
we,

viet

action.

Alternative

is why I say that war is
alternative and that any

That
not

An

but

anything more than the surface
phenomenon of the obvious Rus¬
sian desire to enlarge the Soviet

and discredited
prewar leaders.
In so doing, we
reap
from the cheapest victory have
discouraged the moderate
imaginable. I leave it to you to
progressive forces everywhere and
draw the picture if atomic and
driven the peoples of the world to
This

Ho service

Failing to take account of

either.

its

food

its

approach

political crisis rests upon
the oversimplified notion that So¬

world

very

American victory.

idea

current

Our

17)

(Continued from page

mainsprings of Soviet aggres¬
and to remove these fears
we
can
without taking

sion,

what fears

we

ments

as

citizens which affect the

our

lives of others.

are

cisions

we

In

our

private de¬

have the right to per¬

difference

in

the

world

be¬

and cowardice.
Appeasement is the child of weak¬
ness and fear.
Conciliation is the
tween

child of

humility

strength and humility.

Volume

167

Number

4678

THE COMMERCIAL

FINANCIAL, CHRONICLE,

(1031)

39

put forth to

(

(

Continued from page

viel

18)

Birds of a feather flock together.
Communitarian minded political

Republics, not Union of Com¬

munist

qgur.es

Sov^pt Republics.
socialism

and

identify

very

completely

themselves

with

are

exception to this
They may, and indeed are
apt to, fall out with each

rule.

The basic concepts of commun¬
ism

not; however,
doctrine, but on

other, as does also this common
rule the
ideology with New Dealism. The
between

essentially

one

substitute

a

and

these

isms

is

jheck

planned
and
managed
political capitalism tor
private
capitalism;
politically
forced cooperation for voluntary
cooperation; political profit mo¬
tive
for .private
profit motive;
political laissez-faire for private
laissez-faire; pqlitical promise to
pay money for real money, gold-.
England is outstandingly the

Plan

is

•

of

in

are

who

anc.

im¬

directly

of communism.
Plan,
instead, of
communism, will,, aggra¬

Marshall

curing
it

vate

both

in

Europe

at

anl

hpme.^We ought to tell our people
tfe truth, that whatever else may
eyentuate from this. foreign .aid

plan, stopping of. communism

ating the industries of that couptry and: regimenting its citizens.
central policy of the political
authority of - that; country is to
indefinitely extend political- own¬

any¬

printing
i

,

incomes, excises,

on

ital- gains,

arrest the growth

The

First it

etc.,

by

or

producing segment

including,

omy,

farm

person

pays
of

the total

econ¬

tary Fund

countries

Then

each
proportion to his

in

that

make

levied for all

indus¬

in

try and the life of the individual
citizens. Is the Marshall Plan in¬

the

countries

gratuity, but in
well...

tended to be used to stop further

not only
receiving the

our

V..:;"

homeland

as

we

pur¬

universal

-■.

,

comprising

But the ink on the paper
establishing it-was hardly dry

$3,750,000,000: gift loan
was. being
proposed,.
When this was being put through
Congress, its prompters solemnly
avowed that it would rehabilitate
to

Britain

Britain's

production,

tools;

and

start the people of
England back
the road to self-sufficiency.

International

on

The

$3,750,000,000- was to be
over a period ol five
years, but the political, authority

drawn down

monetary, financial and; economic*
ills the human race is heir
to, be¬
sides serving as a pillar for per,-,

of

Great

greater
one

peace;

Britain

part

year,

in

the

within, about

with her economy

and

more

a

sunk much

it

of

weakened,' condition

The

International
Monetary; than before
Fund was to eliminate trade, bar--.
tuity. 1 '1

for foreign shipment. So
op. through the whole gamut the

Mone¬

being proposed; its

before the

told was the real pan¬
for curing just about
all; thf

manent

International

was

the last.
for

were

acea.

the

protested
no
furtherrequests for, funds for interna¬
tional projects.
That was to be

Monetary, Rund and Bank, which

up

chased

individuals

the.

came

was

operation- "

proponents
strongly
that there would be

a

-

of; communism,

putting, therr

Union and its satellites.

we

flames-

and

than. when! it

ago,

torn

the

course,

itself and

the taxes
sum

to

days

When

notoriously colossal polit¬
ical scandal, and about the
only
thing it rehabilitated^ was com¬
munism, especially, in the Soviet

be no part of it.
In¬ poses.
;
ought to go a little fur¬ ;
In turn, farmers and all other
ther and apprise them that the
producing groups are taxed to pay
plan, if adopted, will fan the for- the non-farm products pur¬

deed,

few

was

put into

came

by every
the

of

of

community

share

resort

press money.
taxes are paid

Those

cap¬

where will

The

UNRRA which

was

given $1,300,000,000. It was to do
the job of rehabilitating the war-

back on their feet. Tlpt was later
pay
for the wheat and other products run up
to $2,700,000,000: and an¬
purchases
from
farmers, and other
$332,000,000
for
postmakes available gratis to foreign- UNRRA
still an additional
and
political authorities? As yet, from $135,000,000 for
pre-UNRRA in
one_ source and one only, taxes, Italy.
Taxes
either
from
levies made
That international agency be¬

become

believe

for

it

of

communism,

some

labor

more

authority derive the funds to

is

all

American

when the

desperate condition than
International Monetary
they have been since the close of Fund was. discredited by one of
hostilities?
its principal
members, France, a
a

foreign, political authorities anc
npte. some of their more impor¬
tant implications.
From- whence does the political

mutably, it is a deception, if not
an
outright fraud, to claim the
purpose of the Marshall Plan is to

concerned.

over

produce

shall

expansionism,

else.

mmur.ed,
there

It is officially a socialist state, It
ha's already gone far in expropri¬

ership of and control

the transactions that art
in
expropriating
the

Europe
thing.
To

one

Since
civilization has

Western

- ^country
V with
so-called -Marshall

Foreignk Aid

is

Russian

something

important
thp

eral way,

involved

roost.

elsewhere

or

vately

which

who

To. stop, communism: in

planned
for a pri¬

economy;

most

grounds

op

•

•

-

Checking Russian Expansion

of degree only. All

politically

managed economy

no

other,

eacn

of

difference

promote the foreign riprs, empire,
preferences,. bilat¬
aid' plan, under consideration, be-, eral tracing, multiple currencies,
lies
that; the foreign, political, ;etq. It. v/as, tp. stabilize the cur¬
authorities have used the gifts rencies of
practically the, whole
supplied them for increasing pror world) It failed- to achieve
any of
duqtion. capacity; for are thpse its alleged objectives, as it was
Plan as it does everything else it gifts not allegedly
bound
to
do.
The
predicated on
currencies of
bel^ves will, help keep it in the proposition that the\ peoples practically every country partici¬
of
the
countries to whom
the pating in it, including that of our
power.
Let us briefly trace, in a gen¬ Marshall Plan aid would go are in own, were much more
debauched

receiving

the-

&ra -

every

group are compelled to contribute

*

toward the purchase of the articles
communitarian.ownership
- of
j Self-preservation being the first
property
in England and, the lqw of every political authority, produced by the; individuals of;
regimentation
that;
necessarily be it designated socialist, monr every other group for, export unr
archial, republican, New Deal, or dpr the foreign aid program,
goes with; itt
>
j.
what not.

France i& the
next- important
country to receive aid under the

Plan.

Who

prise

would' presume
to
a free enter¬

nation?-

That

the

political
country
has
adopted an all-out program for. s
planned
economy
system
w:P

hance

to

ists"

not

of

is

as

"Commun¬

tarian.

indication

Every

is

conditions, in, that country

flow

fact

that

favor

out
in

Board,

shade

or

ridiculous

.

the

."

.

that

foreign

gifts

that
the

their

not

,

•>1

with

very

nature

< Continued from page 19)
sands of entrepreneurs of the
day
Look-—during, the

and of tomorrow.

because it is

buys from the farm

job.

the

;

the

transactions
and
involved in carrying

foreign aid* schemes

merry-go-

political aur
thority taxes the farm worker and
the white-collar, worker and the

"

this

overlook

or

the

re¬

the

from

r

fashion

factory worker and all the other
workers to pay for' the goods it

the

are.

themselves

white-collar

factory worker

worker

worker
and

and

-

anc

tlje

all the othei

Aid

The whole business

Sum,
home

of it is reserved for

politicians
charges. ;
' /.'•..
.■

-

as

it's

and

the

political

authorities., of

■)

-

.

The procedure used
by the por
litical authority i of, this nation to

the

Marshall Plan is even intended to

we

primarily

in,
banking

come

a

handling

a

from

government

I

as

see

banks

govern-

pulmotor

stuff.

us

to

it, is necessary, but

emergency

job for

and

was

I'm

in the

covery.
So I

don't

and

suggesting
banking busi¬

permanent

a

the

this

banks

question;
of

A

It

can,

be

done

many

Board

proposal

my

I'll call it

propose

Why jPeace
the

a

Peace Produc¬

a

of

the

inclusion

Production

framework

Plan.

Board

of

the

of

a

within

Marshall

It would pass on the worth

the

projects for American in¬

vestors

acting
m
co-operation
European investors and* en¬

with

in¬

stances in conjunction with banks
abroad which know the charac-r

goods they give away to the pol¬
iticians abroad and<. at home by

Production

give

tion Board.

America start

in

amazingly small percentfractional item.

Peace

name,

re¬

,

the

an

So—I'll,

lending money to sound business
enterprises abroad?
I, maintain it can be done.
workers,

could, allay the concern,
-of. this
nation, have,
over

The loss, to the government

age—a

I
ask

with RFC guarantee up.to

.90%.

as something on the level of
high velocity vitamin diet over
long period—for a brisk con¬

valescence

.

had

were
made, either
directly by the Reconstruction Fi¬
nance
Corporation or by private

ness
a,

our

we

on

and then loans

transfusion
a,

war,

War, Production Board. It passed
the worth of
projects for war
production by private businesses

a

where

job of money and credits
imagination and initiative.

ment,

simply adds
up to a minus quantity for all the
workers.
The
pie goes to ; the
political authorities of other coun¬
tries, but not all of it. Some, quite

that's

a

and

workers.

a

And

It's

between

other countries,

which makes

claim

their

*

In this reciprocal

The transactions are
The high priests of the "new
private enterprisers era" have assured us we need not
of this country and private enter¬
worry about the size of the public
prisers of foreign countries, but debt because, "We owe it to our¬
between this political
authority selves." It would be nice if they
not

says,
"is already a
dictatorship of, some

color

over

•

round,

communistic/

of the National Industrial Confer¬
ence

authorities

connection

should

procedures

why dwell upon the obvi¬
since every country in Eu¬
as Virgil Jordan, President

collectivist

in

of

We

But

rope.

cruel

country to other lands since 1914.

further development in the direc¬
tion of the absolutist state.

ous,

power

peoples.

happened

kind, but de¬
gree; and the wall that senarates
them, is thin and frag'le indeed
Both
are
essentially
communi¬
one

itself,

,

the

That is the natural thing to be
expected; Tt is exactly what has

between the de Gaulleists and the

referred

their

spective

hardly be disouted.The difference
faetion

life

of

receiving the aid and the political
authority
dispensing
it
would
inevitably use it primarily to en¬

that

of

:

is

recognize
fact that the political

claim that France is

regime

it

as.

should

we

trepreneurs.

As I, envision. it» the lending

I

bank in America would take

ter, reputation, and ability of the

5%
obtain the, wherewithal for effec¬ making. thpm believe, they themof any, loss. The
borrower.
tuating the scheme, and the-man?, ,sely$s:f>ay for producing them,
borrowing, bank
I want to propose
her. by which, the foreign political
tonigh^a pro¬ pr the intermediary bank abroad:
j. Since the,close of World War II: gram: by which the
Not one of the political author-, authorities distribute such goods
American would take the other 5% of, loss
hostilities, the political, authority,
banking profession can, play? a in thpse cases whereJoss occurred*
itigs that would receive aid under are communistic. Let: us briefly has
expropriated and is authorized
Our government would guarantee
the Marshall; Plan has asked th's look into; the matter and see if to
expropriate roundly $25- bil¬ vastly vital part in European re¬
!90%, of the loan.
country to save it from communr this is not true.
lions, wqrtb of goods, the vast bulk covery.
I venture to
ism, or in any way indicated it
say that we would
of
which it has already

hal$. the growth of communism in
Eupope. '

,

v

•

freely
A Maximum Amount of Private
prompting, Prosperity Illusion
handed over to the political-aur
i
Aid
Top officials point with gleeful, thorities, of other countries. With
I
11 propose we take a new look
had even the faintest idea; that
pride to the high income of farm¬ what results? Surely, no one will
at the Marshall, Plan in terms of
there wa§ any thought on the
ers, to the increased rate of pay argue that the goods supplied to
part of the political authority of of
authorities has injecting a maximum amount of
wage-earners, to the great sav¬ foreign, "political
private enterprise aid,fr,om Amer¬
this, nation to use the Marshall
ings, and; to the roaring business had; any effect in checking the
ica into the whole picture of help¬
Plan
aid
for
that
purpose,
it in general.
They tell us that ex¬ communist menace- in the- coun¬
would bitterly resent it.
ing Europe recover.
ports, huge amounts in excess tries receiving the. goods. No one
-i
There's a proviso in the Mar¬
But the political authorities of over
imports, are an important is even going to contend that- the
shall Plan before the Congress
the countries scheduled to receive factor in
producing prosperity and political authorities having the which needs a
long, new look.
aid under this Plan have not the that if such exports are not1
kept disposition of the goods had any
In substance, it provides that
slightest suspicion that it is being up, the economy will collapse and intention of using them to combat
the United States Government—
provided them for any such pur¬ we will all lose our shirts. Hence,' communism.
within
certain
limitations—will
one of the imperatives for adopt¬
pose.
Why should they?
'
Have
the
political authorities facilitate
American
production
'They know of the great head¬ ing the Marshall Plan, and the receiving the goods used them to loans to
private European enter¬
warning that failure to produce productive facilities as
way 1 made by political forces of solemn
prises.
thisf'nation in* undermining con¬ do so will mean economic paralr was, so vehemently alleged, would: i
The idea is not revolutionary.
"
*
stitutional government and free¬ /sis.
be done-by the leading proponents
It means simply using government
dom of contract, of the planned
No doubt many who make this of foreign aid?
machinery
to
facilitate private
and dictatorial mode of life such allegation believe it to be true.
I - The economic condition of, the, production loans as we did be¬
forces are * imposing upon our The motley crew of "economists" producing population. q£ England,
fore in the days of war. There is
in the service of the political, qu-- measured!
citizens,
;•
by' her yardstick of good precedent, for this kind of
<:
And have not the political) au¬ thority—not the government, for¬ well-being,
namely, her foreign, productive and/profitable help to
thorities of the countries to re¬ th at is something else — whose, trade
balance
condition,
has: private business. And I lean on
are
ceive aid under this scheme been brains
cluttered
up
with greatly deteriorated since the gif.t, that word; profitable deliberately,
and
"compensatory, loan was made available to. her*
given express, assurance that their "multiplier"
because, off course, American in¬
concepts
and
other political, authority. ideology will be religiously re¬ spending"
vestors must make a profit. Some
spected? But did they need this, Keynesian hallucinations seem to
The most recent* offical state¬ people shy from the word profit
considering the sympathetic and believe it too.
ment shows, that Britain; will. haye. like a colt from a fire engine, as
helpful attitude this political au¬
Of; course, the political author¬ -an adverse trade, balance for 1947 if
profits were, shameful. I don't.
thority has displayed toward ity in Washington loses no oppor¬ of $2,700,000,000, as against $!,- Private enterprise must have
communism throughout the world tunity to exploit the
prosperity 400,000,000 in 1946.
profits as the human system must
1
illusion to promote the Marshall
during the last 15 years?
The very basis of the arguments have food. r
wants to be saved from
ism.

Indeed-

if

any

commun¬

one

of them

find

.

..

-

der




than that

for

be

un¬

produc¬

war

Thousands

of

private
enter¬
prises in Europe, as, I see it; are
like healthy men who have been
tied up hand and foot. What they
need is a sharp knife in the hands
of a friend. T,he friend is us, and
the knife is

capital.
illustration:
Recently, there were available
10,000 tons of ingots in Austria.
The- Fiat Motor Company of Italy
our

Let me give you an

wanted

them

roll

to

into

sheets!

A, deal could have, been made, to
finance those 10,000 tons of ingots,

ship them to the Fiat Motor Com¬
had them rolled into

pany and
sheets.
The

Italians

half the steel

■.

•

any, greater

loans made

tion.
i.

-

-

that the total loss would

little, if

i

ductive

would

have

kept

for their own pro¬

purposes.

The remaining

5,000 tons would have been made
into
the

pipe with

a

ready, market in

Arabian oil fields and

tract' waiting from *• ap
■oil

concern

a

con¬

American

which wanted

a

pipe

line.
'

But there was no money
able to finance this deal.

;

As

a

result)

(Continued

avail¬

there are fewer
on

page

40)

.

♦

40

(1032)

COMMERCIAL

THE

&

FINANCIAL

CHRONICLE
We've

Let Private
(Continued from
jobs

Enterprise Into Maishall Plan!
buying pulp in Sweden, which is
shipped to France, converted to
rayon and the rayon sold abroad
—to everybody's satisfaction. That
is enterprise. That, gentlemen, is
git-up-and-git.

39)

page

in

the Fiat Company than
might have been, because
the ingots are not there to roll.
there

There

fewer jobs in Italy be¬
new Fiat jobs
would have
are

cause

stimulated others.

And the Amer¬

ican oil company

I see

sion

missed

Recovery Based

opportunity not
only to provide steel for Ameri¬
can pipe lines,
but we missed an
opportunity to increase produc¬
tion where production is needed
above everything else.
And if

an

want to think

we

ideological concept of

futile

must

ment do

we

stable

then

job like this? Of course
it couldn't.
Governments are too

tunities like this. We've been

money. '

ning

to

After

government ever since
the deep depres¬

the drab days of
And the

more

we

more

the

we

individuals

as

more

will

we

can

Problem

Not

do,
and

Solved Without

you

that

see

businessmen

of

flow

we

will

get free enterprise

is

kindle

to

here?
of

it

That's

of

know-how

«such

by

as

the

But any com-'

call

this

of

capital

hooking

and

the world.

Partnership capitalism

a

far

istic

boards.

kind

to

Some

They

have

been

encourage

the future.

and

me

I know of
are

from

cry

adventuring
sought

to

countries.

because it

exploit
It

was

was

clude
The

peoples

affront to nat¬

an

ural laws and human

rights.

•
"

'

Broadcasting Co*,

Inc.,

New York

13, filed 250,000 shares common ($1 par) at pro¬
posed maximum offering price of $12.50 per share. Un¬
derwriters—None.
Proceeds—For corporate
purposes.

Company

now has plans to spend about $5,325,000 for
television facilities in New York, Los
Angeles, Chicago
San Francisco and Detroit.
Shares will be sold to "the

persons with which the company

had network affiliation
agreements at Jan. 31, 1948, and to such other persons
as may be selected from time to time
by the company."
«

Associated

Feb.

24

Grocers, Inc., St. Joseph, Mo.
(letter of notification) $150,000 unsecured 6%

debentures
both

to

ceeds

be

will

and
sold

7,350 shares
at

par

finance

($100 par)

to associated store

cooperating

buying

stock,

common
owners.

Pro¬

operations.

No

underwriting.
Atlantic
Feb.

Coast

Fisheries

filed

$556,500 4%%

lateral

trust

convertible

par)

common

stock.

Offering

Co.,

general

bonds

and

Boston,

Mass.

mortgage and col¬
166,950 shares ($1

Underwriter —Doolittle

&

Co.,

The

bonds' are
being offered to
stockholders at the rate of $1,500 of bonds for
each 1,000
.shares of common stock held. The stock will
be reserved

against

be

be

get rid of despair and
misery is the quickest way to get
rid of Communism. We don't get

hitch

helps

tion

Peace

Production

Board.

to

And

let's

forget

never

security and

more

to

all people.

beguiling

they don't like it.

like whatever

we

that,

They won't

do about it.

promises

But

there's

•

in

a

western

tion goes up,

European

24

(letter
stock.

—

conversion

of

the

bonds.

Unsubscribed

bonds

'i

by

a nd

Public

to

of

No sacrifice

crusader.

a

is

convenience
he's

when

verts

or

world

We've

too

of

0;

■

The

callouses
got callouses, all right, but
they're in the wrong places. We
acquire

and

new

some

We've

to

In doing it, we'll

helping hand.

find

we

aren't making any

.

like to see every bank

unions

Europe,

trying

are

—

$15,000 open account for
machine tools. Price—$2 per share. Underwriters—R. A.
Keppler & Co., Inc. and Henry P. Rosenfeld & Co., New
York. To provide
operating funds, etc.

finance

•

due

Boston

'
_

»

j

7

* •

New York

Chicago and other cities




new

share

Pittsburgh

General corporate
,

for

•

pur¬
.

Columbia Gas & Electric Corp.
Feb. 20 filed

(3/23)
$45,000,000 of debentures, due 1973. Under¬

writers—To

be

determined under competitive bidding.
Bidders—Morgan Stanley & Co.; The First
Corp.; Halsey, Stuart & Co. Inc. Proceeds—To

Probable
Boston

best

aren't

We

We

we

and

can

interested

interested

are

for

in

in

con¬

in

war.

and

peace

prosperity, and partnership is the
key word in this policy.
America's Third Great
Contribution

This is the third great contribu¬
tion of America to the betterment
the

of

The

world.

first

was

concept of the dignity of
citizen.

We

have

the

man as a

that

gave

idea

political embodiment, writing his
inalienable rights into a binding
constitution with which law must

the

we

technique of

We

touched

the world
production.

gave

mass

the

machine

with

magic, and to the idea that

man

could

choice,
man

have

free

will

and

free

we

added

the

idea

that

should have abundance with

which

to enjoy them.

We proved

^

a

in

pursuit of this adventure, we

export a thousand different
things, but the biggest one of all
is the idea

and the ideal

nership—a

working
partnership
and a prosperity in

for

peace

of part¬

which all peoples are partners.

March 23.,

Edison

Co.

of

,

,

N.

(3725)]

Y., Inc.

$57,382,600 of 3% convertible debentures,

Convertible at the
each

for

rate

of

one

common

stock

Offering—Common
stockholders of record March 25 will be given right to
subscribe for debentures in ratio of $5 of debentures for
each share held. Rights will expire 3 p.m. (EST) April
15.
Underwriting—Unsubscribed debentures will be of¬
fered at

$25

of

debentures.

competitive bidding.

Probable bidders: Morgan

Halsey, Stuart & Co. Inc.; The First
Boston Corp.
Proceeds—To redeem on May 1 at $105 a
share a total of 273 566 shares of outstanding $5 cumula¬
Stanley

&

Co.;

tive

preferred stock and to reimburse treasury for ex¬
pansion expenditures.
'
*
7
,

Crampton Manufacturing Co.

(3/8-12)

Feb.-5 filed $600,000 first mortgage

5^2% sinking fund
bonds, due 1966, with warrants to purchase 60,000 shares
($1 par) common stock. Underwriter—P. W. Brooks &
Co., Inc., New York. Proceeds—To retire secured in¬
debtedness, finance inventories and supplement working

capital.

;

>"/*''•"

equipment

Business—Feeder air line.

'

filed

1

1963.

share

Underwriting

Proceeds—For

City Title Insurance Co., New York
25 (letter of
notification) 5,000 shares of capital
Price—$9. ^To be offered stockholders of record

.

an

on

construction program. Bids—Company plans to

a

Consolidated

March

City, Utah
stock, of

six shares held.
Rights expire 3 p.m. March 23.
Unsubscribed portion will be taken up
by Chilson New¬

,

help

common

each

V

to

unions

free

American business must

additional underwriting consideration and 7,500 shares
will be issued to American Die & Tool Co. for invest¬
ment in return for
cancelling

berry Co., Inc., Kingston, N. Y.

for

as

ISSUE

Proceeds

Lake

well

quest, in exploitation or

In

kind.

as

one

the

Business

Foreign

as

the good of the world.

will

Engine Corp. (1/8-12)
(letter of notification) 101,000 shares of common
(par $1), of which 85,000 shares will be sold to
the public; 8,500 shares will be issued to underwriters

Salt

man

in

elixir for

an

about to embark

are

ercise it

Just as American

own

Cameron Aero

Jan. 20 for subscription in ratio of

."V

We

continent

a

be

entirely new type of world lead¬
ership. We embark on it reluct¬
antly, but we have almost unani¬
mously made up our minds to ex¬

enterprise must sow its own seeds

PREVIOUS

($1 par)

to

third great contribution is
corollary of the other two. In
of every size in America with its a
foreign policy based on part¬
foreign department eagerly seek¬
nership, we recognize that political
ing out men with intiative, re¬ freedom and economic freedom!
sourcefulness and integrity to get
cannot survive anywhere unless
Europe back in production.
Free they have a chance everywhere.

would

Dec. 29

poses.

CORPORATION

.

great

personal sacrifices. We'll find it
to be a good business risk.

.

filed 600,000 shares

life

spirit of
body.

his

invite bids to be opened

Challenger Airlines Co.,

of

conform. Then

people want to be
free enterprisers.
It's human na¬
ture. But we've got to give them

stock.

FIRST BOSTON

[

they

where

them

have

Most

—

Price—$2 a share.
purchase and general funds.

;

enterprise

free

for

crusade

a

is credit

us

believing that we
have free enterprise in the
largely by talking about it.
got to step out of our pan¬

Productions, Inc., Nashville, Tenn.
notification) 1,250 shares ($1 par)

Price

breath

shambles. It will

too

elled offices and work up a sweat
in

to

A restoration of pri¬
vate trade in Europe will be the

in

i

v

Feb.
I

and

smug

*

help European business regain its

ing.

•

con¬

enterprisers—all of

been

complacent
could

winning

on

the

is

our

The lifeblood of trade

in¬

sabotaging his enemies.

free

We

—have

or

great for him

too

bent

(PaJ

—None.

Financing

for

in

and money.

the

said

capitalist's point of view, he
may be a crackpot, but he's an
energetic one. His trade is mak¬
ing capitalists unhappy, and he
goes at it with the fire and zeal

which 400,000 are being sold for the
company and 200,000 for the account of Claude

'

be

a

$8.75 each.
To
be
sold
by
Charles H. Brown and S. W. Brown, Jr. No underwrit¬

•

Com¬

He gives more
than lip service to his cause. From

labor

underwriter.

Neon, Inc.

Corporate

this

labor-reestablish

na¬

the fortunes of Com¬

offered

Brown Radio

common

the

of

private
do

dough.

our

the. Communist;

Glass Co., Inc.
Feb. 26 filed 5,000 shares of 5% cumulative preferred
stock (par $50) and 7,150 shares of common stock (par
$50). Underwriting—None.
Offering—Both issues will
be offered at $50 per share.
Proceeds — Construction
and purchase of new equipment.
Feb.

perform, the

munists won't win converts.

of its

Every time the economic barom¬

Brockway

freedoms

more

we

to

The

busy, hustling acquaintances

behind the iron curtain know

«

If

on

need

we

draglines.
+
We won't do it by just
talking
about it. Lip service doesn't move
pig iron.
We don't do it by sit¬
ting on our hands and sitting on

better

than theirs; by giving more things,

I

this:

stability is a favorable
atmosphere for political stability.

eter

it by

of

work

of

caravan

Europe is mired

it would work.

Economic

.

a

concentra¬

It needs to be talked up.

Economic Means Political Stability

and

chucking

rid

get

system

our

General corporate purposes.
•

We

camp.

making

Bank's

Our

Europe.

Production

—

rid of Communism by
few Communists in a

a

proviso is played down in the

publicly

March 1

8

What

stock

2

Buffalo.

rests

should

munism in that country go down.

will

Feb.

war

it

as

INOICATES ADDITIONS SINCE

——

American

off

Plan

Congress
a

bill.

That

killed

gov¬

strengthened and broadened to in¬

capital¬

abroad.

mud.

need

Marshall

the

of

throughout

old-time

by the
of

days

(2) The guaranteed loan proviso

lifting the living

people

loan

The

which

show.

American

of

the

in

as

the

production.

up

standards

of

would be guaranteed

before

idea

remainder

90%

ernment

in the form of productive loans is

opportunity

every

where American dollars

a case

the

This Board would pars

footing.
in

Board

The

I have described has gone

snapped up.
to look

and

determination.

Peace Production

A

standing and effort.

struction and for

over

job for the flint

American

Happily, not

Europe

from

anew

a

American

•steel

in

certainty:

a

worthy

on

European manpower — part¬
nership capitalism.
And it's in
partnership capitalism I place my
greatest hope for world recon¬

Don't you see that the only way

for

be

shall Plan.

and

to

know

we

within the framework of the Mar¬

know-how with European capital

solve the real problem?

en¬

exerting
a
leadership
mutuality and reciproc¬

will

(1)

all, trade was invented
anybody heard the word

American

never

American

of

it

saw

trade

be

exchange? It is simply
medium for the payment
of goods. It is a convenience ac¬
quired through years of under¬

dozen

a

paladins

to

partners in peace, we
partners in prosperity.
just so much talk
without action, so I summarize my
proposal:

all

are

industry

want

we

It

merchandise,

admit

in

us

must build

we

stimu¬

easy

-1

Marshall Plans without the aid of

private

before

on

This
If

a

to turn the trick.

Private Aid
Don't

say

I say that if

of

ity.

modity is good whether it is ex¬
changed or not. That commodity
can
be exchanged for a commod¬
ity some place else if there are
people around with the ingenuity

and

encourage

re-develop fresh initiative
private enterprise abroad.

based

What is

government, the more we help to
forge the tools of socialism. The

climate for

a

private investments
abroad
by American
investors.
The
lending
bank in America
would assume 5% of any loss, and
the borrowing bank another 5%.

an

to

run

we

all

veritable

through.
before

sion.

for

hands in

trade without

that

for

must

we

tangled in red tape, tied in knots
by bureaucrats, even to see oppor¬
run¬

create

can

growth of partnership
capitalism. I think it is a chance

unstable, and how
on

exchange?
the

our

because

are

carry

wait

lating

a

wring

inaction

currencies

govern¬

we

terprise,

We bankers

munists.

to

Peace Production Board.

a

steady

a

self-

on

capitalism

of the American economy.

can

government

based

program

expan¬

democracy and American free

action
an

plan

real European

a

partnership

help; we've got a real promise of
a
peaceful,
stable
world,
and
we've got a new string to the bow

opportunity to give gainful em¬
ployment and to put a new gag in
the mouths of the clamoring com¬
Could

we've got

recovery

of the

our

lack of action—we missed

—or

I say

and

It is my opinion that through the

Self Help

on

for vital

chance

a

of

through

pipe.
We

natural laws

recognizes

human rights.

and what have we?

over,

just
why it

will work.

Multiply it ten thousand times

doesn't have the

is

I

on a recent tour of

Production

Partnership capitalism
the opposite, and that's
It

that happen.

seen

myself

Thursday, March 4, 1948

7"

f

Wmm.

.•

.

,

Volume

Number 4678

167

THE COMMERCIAL

shares

March

are

•

Girard

(1033)

Investment

mon

Co., Philadelphia
(letter of notification) 20,000 shares of 6% cum¬
stock. Price—$10 per share.
Under¬
writing—None.
Working capital.

ulative

Bonds

share for each six common shares held.
Rights expire
March 1. Proceeds—To pay off indebtedness.

one

preferred

•

•

March

Cameron Aero Engine Corp

Crampton Mfg. Co._J__

—Common
Bonds

—

11:30

a.m.

Inc.

March

Feb.

Central Pacific

Ry., noon (EST)
__r__Bonds
Drugs, Inc.____u.__—Preferential Stock

Parkview

March
New

York

Central

10, 1948
Equip. Trust Ctfs.

International
Jan.

Common

15, 1948
Light Co

——Bonds

Louisville Gas & El. Co.——_______

Bonds

-

25, 1948

March

Electric

27, 1948
& Light Co._

Service

Utah Power &

—Preferred

29, 1948
Bonds

Co.—

Debs.

and

Light Co.———Bonds and Debs.

April 1, 1948
Discount Corp..

Schenectady

May 4,

•

_

.Bonds
...

1948
Co

—Bonds

:

Country Air Service, Inc., Farmingdale,
N. Y. - V
••
V. ;*■
Feb. 26 (letter of notification) 130 shares of capital stock.
Price—$300 per share. Underwriting—None. Purchase
and

la.

«

Pacific
Jan.

of

the

company's

permit
reorganization plan.
>

11

working capital.

L

on

-basis

Price—Common

Stock will
of

one

be

new

stock, $60

a

offered

share

share.

Feb.

.

preferred stock.

Price—$50

None.

working capital.

•

:

Increased

per

share.

Co.

Parkview Drugs,

tion with the

Curtiss' franchise method

Business—Owns
•

a

for funds used to purchase McFarland

of

•

Unsubscribed

Power

&

Light Co.

Federal Electric Products Co., Newark,

;

Feb. 27 filed 150,000 shares ($1 par)

derwriting—To

loans

be

filed

by

N. J.
stock. Un¬
Proceeds—To

amendment.

18

Industries, Inc., Detroit
300,000 shares

(letter of notification)
Price—Par.

common.

Underwriter—C.

G.

-

tors hnd employees of the

will offer the stock
Price—$100 per share.
Pro¬
ceeds—To retire 7% preferred stock. Business; "Super
to fbiends and associates.

held.

Markets"

in Los

nardino County.

Florida

Power

•

Corp.,

St.

Petersburg,

•

mon

Underwriting—By amendment.

Offering—Com¬
stockholders may purchase the new common stock

at the rate of

one new

share for each 10 held.

Products Co.,

Oct. 21 filed
"

None.

Detroit, Mich.

100,000 shares ($1 par)

Under*
writers
Campbell, McCarty & Co., and Keane & Co.
both Detroit.
Price—$5.25 per share.
Proceeds—-The

Price

Power

&

based

Temporarily deferred.
Playboy Motor Car Corp., Tonawanda, N. Y.
Feb. 13 filed 20 000,000 shares common (lc
par).

$1 per share.

Public

J

common stock.

filed

registrant's

Co.

199,627

of

New

Hampshire

one

share for each 3M>

141,101

shares held.

stock,

Service

30 filed

Shields & Co. and

White, Weld & Co.
Ripley & Co., Blyth & Co., Inc.,
Higginson Corp. (jointly);
Co.; The First Boston Corp.; Salomon

(jointly); HarrfCentral Republic
Glore, Forgan

Bros. & Hutzle^
Proceeds—Prepayment of $1,700,000 .of bank notes di
April 20 and $1,375,000 of Oklahoma Power and Wat€
Co. bank notes, and for expansion purposes. Bids—Bicfo
will be received up to 11:30 a.m. (CST) March 8 fc~
sale
-

of the

bonds at office

of Middle

West Service Cc

Chicago.
Raleigh Red Lake Mines,

Ltd., Toronto, Can.

Jan. 7 filed 460,000 shares of common stock. Underwrite
—Mark Daniels & Co., Toronto, Canada. Price—25 cents
a

share

in

Canadian

and development of

funds.

Proceeds—For

mining property.

Reiter-Foster Oil Corp., New York
Jan. 16 (letter of notification) 180,000 shares

has

New Eng¬

shares.

Co. of Oklahoma
(3/8)
$10,000,000 first mortgage bonds, series B,
due ,1978. Underwriters—To be determined by
competi¬
tive bidding. Probable bidders: Halsey, Stuart & Co.
Inc.;

Jan.

and Hart¬

Mass.

-

rights to subscribe
Price—By amendment. ProceedsConstruction program and retire short-term loans.
<:

to

man

common

Proceeds—For

shares

Co. and Lee

Working capital.

the

6

at rate of

Un¬

Stages, Inc., New York
(letter of notification) 200 shares of common
(par $10). Price—$10 per share. Underwriting—

of

cents per share.

Co., New York.

land Public Service Co. will waive its

stock (par $1.25).

Inc., Boston,

&

($10 par) common stock.
Underwriters—Kidder, Peabody & Co., and Blyth & Co.,
Inc., New York. Offering—To be offered present holders

(3/11)

19

100,000 .shares

Service

on

Expected in March.

Northeast Airlines,

Price—
than 100,000 shares will be of¬

more

Underwriter—Tellier

Public

common

Not

fered to employees and officers at 87 V2

Feb.

Light Co., Duluth

by amendment.

mortgage bond&

capital equipment and working funds.

Dec. 24 filed 83,333 shares (no par) $1 cumulative con¬
vertible preferred. Underwriter—Atlas Corp., owner of

common.

—




Inc* and Hemphill, Noyes & Co.
Price
Proceeds — To refund outstanding first

Under¬

New

stock

Construction expenditures.

Fraser

mortgage bonds, due 1967.
Underwriters—Kuhn, Loeb & Co.; A. G. Becker & Co.t

investment.

Feb. 3 filed 100.000 shares (no par)

•

Pa.

Nov. 20 filed $6,500,000 of first

Michigan Consolidated Gas Co., Detroit, Mich.
26 filed $7,000,000 first
mortgage bonds, due 1969.

Feb.

Proceeds-

Erie,

penditures and finance improvements.

Trust

ley, Rogers & Co. Offering—63,785 shares are to be
publicly offered (25,000 on behalf of company and 38,785
for account to Marcus Nalley,
Chairman); 20,000 shares
will be offered to
employees, executives and directors
and 35,367 shares are to be issued in
acquisition of all
publicly held stock or partnership interests in certain
subsidiary and affiliated companies.

t

Corp.,

*

Underwriters—Walston, Hoffman & Goodwin

Fla.

the basis of two

Stone & Webster Securities Corp., New York.
Price by
amendment.
Proceeds—To reimburse treasury for ex*»

Nalley's Inc., Tacoma, Wash.

March 2 filed 40,000 shares ($100 par) cumulative pre¬
ferred stock and 110,000 shares
($7.50 par) common
stock.

Investors

Jan. 15 filed 119,152 shares of

Angeles, Riverside, Colton and San Ber¬

offered for subscription by stock¬
new shares for each
share
Proceeds will be added to company's
general funds.
on

Pennsylvania Telephone

*

.

Fire

Pittsburgh Steel Co.

struction program.

company

Association

Philadelphia

Feb. 26 filed 40,000 shares $2.25 preferred stock
(no par).
Underwriters — Paine, Webber, Jackson & Curtis and

derwriter—Kidder, Peabody & Co.
Price—By amend¬
ment.
Proceeds—Toward financing a $6,000,000 con¬

-

Manufacturers'

Stock will be

holders

'

Fitzsimmons Stores, Ltd., Los Angeles, Calif.
Feb. 2 filed 10,000 shares of 6% cumulative first pre¬
ferred stock ($100 par).
Underwriting—Officers, direc¬

To be offered
bonus of one share ot
No underwriting., i

27

None.

—Construction program.

For working capital.

a

(letter of notification) 2,000 shares of capital
stock (par $100). Price—$100
per share. Underwriting—-

(Ky.)

'Proceeds—For

Minnesota

preferred share, with
For mining operations.

per

Pennsylvania

Feb.

Inc.; Lehman
Brothers; Dillon, Read & Co. Inc.; Glore, Forgan & Co.;
White, Weld & Co.; Harris, Hall & Co. (Inc.). Proceeds

•

.Coy Detroit.

working
stores.

Mining Co., Canon City, Colo.

Insurance Co.,

Feb.

($1 par)

$100

•

Underwriters—To be determined by competitive bidding.
Probable Bidders—Halsey, Stuart & Co.

McDonald

Passiflord

common.

filed

Massachusetts

s

¬

made

Federal
Feb.

Expected March 15.

writer—Vance, Sanders & Co., Boston.

by the company and a subsidiary,
Cole Industries, Inc. Business—Electric equipment.
repay

12

market.

common

used for

(lc par).

at
1

(3/15L

Feb. 24 filed 716,074 shares of beneficial interest.

distribution.

Drug Co., Topeka,

Kan., and the $332,500 balance will be

Feb. 24 (letter of notification)
2,500 shares (no par) pre¬
ferred and 2,500 shares common

•

fleet of trucks for leasing purposes.

filed

Straus
&
Blosser, Chicago.
Price—$5.25 per share.
Proceeds—$140,000 will be used to reimburse company

Co., Inc. (jointly); the First Boston Corp.; Harriman,
Ripley & Co.; Glore, Forgan & Co.; Kidder, Peabody
& Co. Proceeds—To pay $2,450,000 of short-term bank
loans and to reimburse treasury for expense of
property
extensions and improvements. Expected about March 16.

filed

27

35c

&

Finance Corp., Chicago, III.
15,000 shares ($100 par) preferred stock.
Offering—To be sold to employees and officers of the
company and its parent, Curtiss Candy Co.
Price—$100
per share. Proceeds—To be used for trucks in connec¬
26

Inc., Kansas City, Mo. (3/9)
100,000 shares of preferential cumulative
participating stock ($4.50 par), ' Underwriter-

Jan.

mined through competitive bidding.
Probable bidders:
Halsey, Stuart & Co. Inc.: Lehman Brothers and Blyth

Equipment

Feb.

to telephone plant and repay
outstanding
to parent, American
Telephone & Telegraph
Expected about March 16.

advances

Gas & Electric Co. (3/16) $8,000,000 first and refunding mortgage.
bonds, due March 1, 1978. Underwriters—To be deter¬

A
Underwriting—

Telephone & Telegraph Co.
!
$75,000,000 30-year debentures, due MarcB

held.

Louisville

series

13 filed

construction program.

a

capital and expansion of business: retail drug

construction purposes.-

'

($25 par) common stock.
Offering—To be offered at par to

provements

Co., and The First Boston Corp. Offering—To
be offered initially to common stockholders of record
March 2 on basis of $100 of debentures for each 40 shares

Feb.

'

•

Electric, San Francisco
shares

Sachs &

four held.

Englisfrtown ; Cutlery, Ltd., New York
20 (letter of notification) 1,000 shares

Feb.

stock-'

City,

1, 1978. Underwriters—Names to be determined by com¬
petitive bidding. Probable bidders: Morgan Stanley! &
Co., and Halsey, Stuart & Co. Inc. Proceeds—To reim¬
burse treasury for costs of extensions, additions and im¬

filed

Louisiana

Proceeds—Construc¬

tion program.
•

present
each

for

and

Proceeds—To finance

Pacific

•

—

publicly.

Oklahoma

expire

Inc.; Blyth & Co., Inc.; W. C. Langley & Co., the First
(Texas) Power & Light Co., Dallas L
Boston Corp. and Glore, Forgan & Co. (jointly); Shields
Feb. 26 filed 68,250 shares of common (no par) $4,000,000
& Co., White Weld & Co. (jointly);
Harriman, Ripley
25-year sinking fund debentures, due 1973. Underwrit¬
& Co.; Merrill Lynch, Pierce, Fenner & Beane and
ing—Debentures to be offered competitively. Probable:
Kidder Peabody & Co. (jointly); Kuhn Loeb & Co. and
bidders: Halsey, Stuart & Co. Inc.; The First Boston
Lehman Brothers (jointly); Salomon Bros. & Hutzler.
Corp.; Blyth,& Co., Inc.; Equitable Securities Corp.;
^Proceeds
Approximately $5,500,000 will be added to
Harriman, Ripley & Co.; Glore, Forgan & Co., and W. C. : 1
company's general cash funds on the basis of unfunded
Langley & Co. (jointly). Offering—Debentures will be
property additions, and the balance will be used for
holders

Gas

filed

April 9.

Dallas

offered

Co.,

holders of outstanding common stock of record Feb. >27
at the rate of one share for each 10 held.
Rights

Feb. 12, filed $10,000,000 first mortgage bonds, due 1978.
Underwriters—Names to be determined through competi;tive bidding.
Probable bidders: Halsey, Stuart & Co.

.

29

686,953
Underwriting—none.

Electric Co., Wichita, Kan.
$5,000,000 first mortgage bonds due 1978.;
Underwriters—To be determined through competitive
bidding.
Probable bidders: Halsey, Stuart & Co. Inc.;
The First Boston
Corp. and Blyth & Co., Inc. (jointly);
Merrill
Lynch,
Pierce,
Fenner
&
Beane;
Lehman
Brothers, Bear, Stearns & Co. and Stern Bros. & Co.
(jointly); Shield & Co. and E. H. Rollins & Sons (joint¬
ly); Harriman Ripley & Co.; White, Weld & Co. and
Kidder, Peabody & Co. Proceeds—For construction and

Feb.

■

of three aircraft

Dubuque,

Electric

Corp.; Harriman, Ripley & Co.; Lehman Brothers and
Blyth & Co., Inc. (jointly). Proceeds—To be
applied
toward construction program.
•
/
•'

filed $20,000,000 first mortgage
bonds, due 1978;

publicly by underwriters.
Price—
By amendment. Proceeds—Payment of outstanding 3%%
installment notes.

Cross

.v..:-

Co.,

&

Oklahoma

■

65,000 shares of cumulative preferred stock,
($100 par). Underwriters—To be determined under com¬
petitive bidding. Probable bidders:
The First Boston

Laclede Gas Light Co., St. Louis, Mo.
Feb. 4 filed $6,084,000 15-year convertible
sinking fund
debentures. Underwriters—Lehman Brothers, Goldman,

.Debentures

Southern Counties Gas Co—

California Gas

Power

Gas

secur¬

'

.

Feb. 20 filed

other corporate purposes.

April 6, 1948

Southern

*•

Kansas Gas &

-Debentures

Consolidated Edison Co. of N. Y., Inc.—Debentures

March

Oklahoma

Sherbrooke,

Expected at early date.

1948

Columbia Gas & Electric Corp

Wisconsin Power

5

consummation

Bonds, Pref. & Common

March

bonds,

mortgage

mon stock
(only such amount to raise $3,635,500). Un¬
derwriter— Smith,
Barney & Co., New York.
Price
and interest rates
by amendment. Proceeds—To

Denver & Rio Grande Western—Equip. Trust Ctfs.
'

Boston

ing its first mortgage bonds.

sinking fund debentures, due 1968 (to be
placed privately), and 1,500,000 shares ($3.50
par) com¬

22, 1948

March 23,

Ltd.,

Ohio

2024, prepayment of $9,500/300 of notes floated for
construction purposes, and $31 million to be
deposited
with the corporate trustee under the

$5,000,000

........Common

.West Penn Power Co

Co.,

Canton,

due

further company's construc¬

Asbestos

Co.,

bidders: Dillon, Reed & Co.
Inc.; the
Corp.; Halsey, Stuart & Co. Inc.; Glore,
Forgan & Co.; Harriman Ripley & Co., and Stone &
Web:ter Securities Corp. (jointly). Proceeds—To be
ap¬
plied toward the retirement of 6% gold debenture

filed

Interstate
Feb.

19, 1948

Co.—
March

Texas

30

March

March

to

Power

Probable

First

1,500,000 shares ($1 par) common stock.
.Underwriter—Paul E. Frechette, Hartford,
Conn., is the
U. S. authorized agent and
principal underwriter. Price
—$1 each.
Proceeds—To construct milling plant and 1
purchase equipment.

Equip. Trust Ctfs.

Light Co

16, 1948
Chicago Ind. & Louisville Ry.
Nocn (CST)
—.Equip. Trust Ctfs.

Wilson-Jones

ding.

Co.,

Quebec

March

..

loans and balance

11, 1948

Chesapeake & Ohio Ry.
Noon (EST)

Louisiana Power &

and

tion program.
-

Minnesota Power &

Rice

11

bank

RR.

Noon (EST)___

March

J.

Telephone & Telegraph Co. of Virginia,
Emporia, Va.
(letter of notification) 57,600 shares capital
stock ($5 par).
Underwriters, none. Of the proceeds
$150,000 will be used to reduce outstanding short-term

1948

9,

Underwriter—Irving
working capital. •

For

Home

______Bonds

(CST)

stock.

common

Public Service Co. of Oklahoma

Ohio

March 2 filed $40,000,000 first
mortgage bonds, due 1978.
Underwriting—To be determined by competitive bid¬

Highway Safety Appliances, Inc., St. Paul, Minn.
Feb. 24 (letter of notification)
20,000 shares ($1 par)

1948

8,

41

agreed to purchase all shares not subscribed for
by other
stockholders. Offering—Offered for
subscription by com¬
stockholders of record Feb. 2 at $20 on the basis of

re¬

Registration statement effective Jan, 16.

Feb. 25

1948
Chicago Burlington & Quincy—-Equip. Trust Ctfs.
5,

Southwestern Gas & El. Co.„

FINANCIAL ^CHRONICLE

being sold by 14 stockholders who will

ceive proceeds.

HEW ISSUE CALENDAR

&

common

stock.

Price—80

W. Bennett & Co.

cents.

on page

J
(50c par):

Underwriter—Frank

For working capital.

(Continued

exploration

42)

-

42

THfi COMMERCIAL &

(1034)

FINANCIAL CHRONICLE

Thursday, March 4, 1948
•

Botany Worsted Mills
?
2b reported company negotiating with Van Alstjme
Corp. on plans to refinance preferred and class, A
slocks.
Reported considering placing privately a de¬
benture issue and issuance of convertible-preferred aM

Qorp.; Harriman, Ripley & Co.; Blyth & Co., Inc.,
Peabody & Co., and Smiih, Barney & Co.
(jointly);'Glore, Forgan & Co., and W. C. Langley &
Co. (jointly); White, Weld & Co.; Hemphill, Noyes &
'CO., and'Drexel & Co. (jointly). Proceeds—Finance con¬
struction program.
Expected about March 29.
Boston

(Continued from page 41)

Feb.

Kidder,

River Mines Co.,

Salmon

•

Feb.

11

of

Getter

;notification)

Callahan, Calif.

81,475 shares Of non¬
Price—Par. Under¬
For machin¬

assessable common stock ($1 par).

W.

writer—Albert

Shaw, Oakland, Calif.

equipment and supplies.

ery,

Diego Gas & Electric Co.
first mortgage bonds, series C,
1978.
Underwriters—Names
to
be
determined

San

17 filed $10,COO,COO

Feb.
due

through competitive bidding. Probable bidders include:
Halsey, Stuart & Co. Inc.; Blyth & Co., Inc.; Harriman

Ripley & Co.; Kidder, Peabody & Co. and Dean Witter
& Co. (jointly); The First Boston Corp.; Salomon Bros &
Hutzler; Lehman Brothers: Merrill Lynch, Pierce, Fenner
& Beane; White, Weld & Co. and Shields & Co.

Proceeds—To reimburse company's treasury
expenditures arid for purchase of new facilities.

(jointly).
for

(N. Y.) Discount Corp. (4/1)
Feb. 26 (letter of notification) $100,000 20-year subordi¬
nated
debentures.
Price—$100.
Underwriting—None.
•

enectady

Sc

General

corporate

purposes.

,

Corp., Albion, Mich.

Caster '& Truck

Service

shares of common stock (par $1).
Underwriters—Names to be filed by amendment. Price
30 'filed

Jan.

80,000

Proceeds—Proceeds together with furids from
private sale of $600,000 'of 4%% debentures and $250,000
of 6% subordinated debentures, will be used to pay

—$7.

off indebtedness.

Bell 'Mines

Denver
Feb. 26 Tiled 125,000 shares ($1 par) capital stock. Price
—$2.50 each.
Offering—To be made to present stock-,
holders on a pro rata basis during first 10 days of sale.
Proceeds — Exploration work, working capital and in¬
debtedness.
Business— Gold, silver, copper and lead
•

Silver

Tithe

•

Co.,

mines in Ophir, Colo.

Sdtrih Carolina Elfectrtc & Gas Co.

Feb.

24

Finance

each.

"Pribe—$20

business.

No underwriting.

U.

None.

Toy Co., Inc., Newark, N. J.
(letter of notification) 10,000 shares of

(3/9)
;
$3/,396,000 first mortgag3 bonds,
series B, due Feb. 1, 1968, will be received up to noon
(EST) March 9 at Room 2117, 165 Broadway, New York.
Probable bidders: Kuhn, Loeb & Co.; Halsey, Stuart &
Bids for the pUrcnbse 01

Co. Inc.

common

(par $2). Trice—$2.50 per share. Underwriting—
Purchase of merchandise, equipment, etc.

Utah

Feb.

To

S.

Feb. 24
stock

Central Pacific Ry.

12,500 shares (no par)
finance the instalment

(letter of notification)

&

Power

(3/29)

Light Co.

$3,000,000 first mortgage bonds, due 1973,
$3,000 000 of sinking fund debentures, due 1973.
Underwriting—To 'be determined by competitive bid¬
and

March 15, 1958.

Securities

Corp. (jointly); White, Weld, &
Harriman Ripley & Co.- Proceeds—Tor corporate

;poses, including construction.

March

Expected

(Inc.); The First Boston Corp.; R. L. Day & Co.

Chicago Burlington & Quincy RR. (3/5)
bids up to March 5 for the

The company wili receive

pur-'

Underwriters—Bonds

to

be

offered

Boston
& Co.;

& Louisville Ry. (3/16)
(CST) March
'equipment trust certificates,
dated April 15, 1948 and maturing annually April !15,
1949-1963. Probable bidders: Halsey, Stuart & Co. Iric.;
Solomon Bros & Hutzler; Harris,/Hall ■& Co. /Inc.);
•

under-

Hutzler; Harris, Hall & Co.- (Inc.); The First
Corp.; ^Harriman, Ripley & Co.; Kidder, Peabody
Blyth & Co., Inc.; Kuhn, Loeb & Co.]

&

Bros.

29.

Electric & 'Rower Co., Richmond, Va.
Feb. 17 filed $10,000,000 first and refunding mortgage?
'bonds due 1978, and $11,753,800 convertible debentures5
1963.

skle

7,260,000 15-year equipment trust certificates,'series E.
Probable bidders: Halsey, Stuart & Co. Inc.; Salorrion
of

Co.;

Virginia

due

Halsey, Stuart & Co.

Probable bidders:

Inc.; Salomon Bros. & Hutzler; Harriman, Ripley & Co.
Inc., and Lehman Brothers (jointly); Harris,'Hall & Co.

ding.
Probable bidders include: Halsey, Stuart & Co.
Inc.; The First Boston Corp. and Blyth & Co., Inc. (joint¬
ly); Kidder, Peabody & Co., Merrill Lynch, Pierce,
Fenner
Beane, R. W. Pressprich & Co. and Equitable
Securities Corp. (jointly); Smith, Barney & Co. and
Union

<

•

Chesapeake & Ohio Ry. (3/11)
The company will receive bids up to noon (EST) March
11 for the sale of $4,750,000 of serial equipment trUst
certificates maturing annually from Mardh 15, 1919 to

filed

19

stocks.

common

Brockton, 'Mass.

Corp.,

common.

•

Noel

Indianapdlis

Chicago

The company will receive bids up to noon

Probable bidders: Storie & Webster!
Securities Corp.; The First 'Bostoh Qorp.; Glore, forgan
& Co., and W. C. Langley .& Co. (jointlyJ;Ualsey, Stuart*
& Co. Inc.; White, Weld & Co.;, Merrill L^nch, Fierce, r
Fenher &-Reane, and Hiallgarten & Co.;(jointly). Deben-itares Will be underwritten by Stone & Webster Securi¬
ties Corp., Boston. -Offering—Debentures to be offered /
competitive bidding.

16 for the sale of $1;800,000

Kidderv Peabody
(jointly).
■

Co.

&

and

Dick

Columbus & Southern'Ohio

%

&

Merle

-

Smith

•/

V

Electric Co.

Tiled *80;858 shares ($50 FUr); cumulative convert- ' to common stockholders of-record 'March '15 at rate of$100 of debentures'for each 25 shares held.' Price of / Feb. 25 company expects to apply to Ohio P. U. Com¬
and 404,293 shares *($4.50 par) Commor.
mission for authority to sell in the near future $8 niildebentures, 100. Proceeds—To pay for construction ex-1
for. sale, and 687,293 shares'reserved for conversion of
iion 1st mortgage bonds. Proceeds for electric construc¬
-preferred. Underwriter—Kidder, Peabody & Co., New; ?penditures, including $11,000,000 of bank'notes issued to:
tion program.
Dillon,' Reed & Co. headed an invest¬
finance construction.
"
>
^
York. 'Offerihg—Shares initially Will be offered for sub¬
ment group in 1940, underwriting an isstie of 1st mdrt%
scription 'by company's common ^toCkhdlders,'the pre¬
Virginia -Iron, *Codl '& Coke Co;, Roanoke, Va.
|
g£ge V/4S.
' ''
:
-//"^ . |
ferred on a 1-for-10 basis ahd "the common On a T-fOr-2
Feb. 24 (letter of notification) 25,000 Shares Of common;
'basis.
Unsubscribed Shares will be offered publicity
•
stock. Not a public offering.
Denver & Rio Grande Western RR,
(3/23)
Price by amendment. Proceeds—Proceeds together witk
The company has issued ^invitations for bids *fo be re¬
'%
'Wagner Drilling & Producing Co., Sterling,
;
Dec. *1

ible Referred

-

dher funds will be used

to^ufchase all Of the outstand¬

Pdwer Co. from

common, of South Carolina
Commonwealth &• Southern Corn

ing
«

Star

South

stock

Mining Co.,

Midland Park,-N. J.
5,300 shares of capital

Price—$10 per share. Underwriting—
Payment of mine 'property, development, etc.

(par $10).

None.

"Southern

Ccriritfes Gas

Co. of Calif.

(4/6)

$7,000,000 3%'% first mortgage bonds, due

Feb. 26 filed

Underwriting—To be determined by Competitive

1978.

Probable bidders: Blyth & Co., Inc.; Ualsey, *
StUart & Co. Inc.; The First Boston Corp. and Harris,
Hall & Co. (Inc.) (jointly); W. C, Langley
Co, and
'Glore,'Forgan & Co. (jointly); White, Weld & Co.
Pro¬
ceeds—To reimburse treasury lor capital expenditures,
Including construction costs.
Expected April 6.
bidding.

Southwestern Electric Service Co., Waco,

stock'to

be

25,000 Chares Of common
offered to Stockholders of record Feb. 16.

Underwriters,

none.

For construction.

Southwestern Gas &Ele£fric

Nov.

Tex.

(letter of notification)

Feb. 9

5 lOoH

•series B.

$7:0^0 noo

30-year

Co.

first

mortgage

bonds

Co., Inc. -and Stone & Webster Securities Corp., as
3%fe. /ReOfferirig at 101.467"expected March 5. Proceeds

Sperti Foods, Inc., Hoboken, N. J.
Feb. 26 (letter of'notification) 30,000 shares 5% cumu¬
lative convertible -preferred stock,
($10 'par).1 Price—

$10 each.

Underwriters—White, Noble & Co., Detroit,
Hall & Co., Cihcinnati. To operate-phar-'
maceutical division and for general corporate purposes.
Standard Accident Insurance

Co.^Detroit, Mich.
Feb. 19 filed 140,750 shares ($10 par) common stock.
Underwriter—-The First Boston Corp. Price—By amend¬
To

capital

funds.

Offering—

beqffered for subscription by stockholders of record

March 10.

Rights expire March 24
share for each 2V2 shares held.
Steak 'n Shake,

on

basis Of One

new •

icates

(one mill

60,000 shares

Warren

Petroleum

Corp.

•

150,000 shares ($100 par) cumulative con¬
vertible preferred stock. Underwriter—Merrill, Lynch,
Pierce, Fenner & Beaiie, New York. Price, and "interest

rate

be filed

to

withdrawn.

:

preferred stotik, ($1 par)
and
160;000
(50c par) commbn stock, of which 40,000 will be

sold and the remainder reserved for conversion. Under¬

writer—White & Co., St. Louis, Mo. Price—$8 for the
preferred stock and $2.50> fbr the common. This stock
is being offered by stockholders who are members of

S.
•

Food -Co., Raleigh, N. C.
Feb. 24 (letter of notification) 100,000 shares ($1 par)>
common.
Price—$1 each. To retire bank loan and for
Underwriter—Griff en

&

Vaden,

Inc.,

Raleigh.
Terminal
,

Refrigerating

&

Warehousing

Corp.,

Washington, 4D. C.

Feb. 47 filed $700,000 4%

common

stock. Underwriters—To

competitive
&

Co. Inc.

bidding.

be

under-

determined

bidder:

Probable

Halsey, :Stuart /

toWard

and

iionstructibn

22.

10-year first mortgage bonds

Expected early in
.

(3/29)
Feb. 20 filed $5,000,000 first mortgage bonds, due 1978,
and $5,000,000 of sinking fund debentures, due 1973.
Underwriters—To be determined by competitive bidding.
Probable Bidders—Halsey, Stuart & Co. Inc.; The First




Moseley & Co.

may

Jeannette' (Pa.)

•f Uakefedht

head the Underwriting-groUp. >
Co.

Glass

^

'

balance

bock &

RR.

*

Co.

Terminal

:Feb.:27 reported company will be in the market, possibly

'Expected

about

-

.

.

Wilson-Jones Co.

(3/19)

two-proprietary roads.

the

Probable bidders to include

Halsey, Stuart & Co. Inc.

Whipple Bros., The., Laceyville, Pa.
Feb. 24 (letter of notification) 30,000 shares
($10 par)
preferred stock. Pride—$10. For bank loans and work¬
ing capital. No underwriting;
'/•/■/
/

/ --/,

Feb. 25 filed 32.037 shares of common stock (par $10).
Underwriters—None. Offering—To be offered for sub¬

sets of other companies.

States

;

Power 'Co."

:

/

v"

plans $5 million new mopey
financing later this 'yeiar. Probable biddeffs ihclUde -W.
C. Langley & Co. and Glore, Fdrgan & Co./(jointly).
26 reported

Feb.

New

•.

York

company

Central

(3/10)

RR.

»

Company will receive bids up to noon -(EST) March 10
at'its office 466 Lexington Avenue, New York City "for

scription bv-stockholders of record March 19 in ratio of'
share for each eight shares held. Rights will exfpiTe bn mr-befofe April Oo. Trice—$12 per-share. Pro¬
ceeds—PI ant additions and
purchase of Securities and as-

Mountain

•

•/

.the sale of $12 600.000

one new

equipment trust certificates:

bidders: Halsey,, Stuart

able

Prob¬

& Co. Inc.; /Salomon Bros. >

'

-

r

/Hutzler; 'Harriman Ripley Si Co., /and /Lehman
Brothers/(jointly); the First 'Boston COroU Kidder, Teabody & Co.;'Kuhn, Loeb & Co. and Blyth & Co., Tnc.

(2/27)
(jointly)..''/; t, /' ,
.
/:,//.;./," . -y;,.Y./:
•....
($100 par) 4.80% cumulative
Ohio, State of (3/16)
;
preferred stock. ^Offering—Stock offered for subscription
On March 16 the State "of/Ohio will Open bids Tor the
by holders of record Feb. 16 of 4%% preferred -'stock '
'sale of $200,000,000 Veterans'/Bonus bonds due 4949-1963.
at $100 per share '(flat).
Rights will expire
p.m.
Southern California Das. Co. "(5/4).
•/_.'
(CST) March 1. Underwriters—The Wisconsin CO. and '
Jan. 16 reported company plans filing with The'SEC late
associates will Offer

,

-

unsubscribed shares.v Tdddee'ds—-To
bank indebtedness and for construction costs. '

"pay

in

March'$15,000,000 in 'bonds, with bids to be consid¬
on May 4.
Proceeds for extensions. /Probable Bid-

ered

%
Allegheny Ludlum Steel Corp.
.
April 30 stockholders will vote on authorizing

-dersr^HalSey, Stuart & Co.dnc.; Blyth & Co-:, Inc.: MerrilL;Lynch, Pierce, /Fenner i&-Beane; Harris, Hall/&
Co. .(Inc.).;VYV;.
' // * •:
";/.

provement program.
American

indebt¬

'•

March 4 stockholders to vote

%

-

-

Optical Co.

54,064 additional

common

Probable

on

stock

authorizing issuance of"
and $10,000,000 20-year

underwriters:

Harriman,

Ripley

"

Associated; Telephone

Feb.

26

company

mission for

Co^ ^
-.-/
authoriied'comply
to
issue
$100,000,000 additional debentures.
Probable
bidders: Morgan Stanley & Co.;. the other-by Ha^ey,
Stuart & Co. Inc. Expected May 4. // V Y./ /" •/;. / /
%
Wisconsin Michigan Power/Co.
'Southwestern

an

edness of up to $20,000,000. Company currently has no
founded debt. Proceeds would be used in company's im¬

& Co. and Estabrook & Co.

Texas Electric Service Co.

program

Plans call for issuance of'preferred
a first mortgage bond- issue.: F.

.

%■

mortgage bonds due April
March.

$11,470,592,

a

expenses.
:...

debentures.

/y.

Natural Gas Co.

Tennessee

in April, with a riew money bond issue for $10,000,000.
subscription plan,-■; The bompany us controlled jointly by New York Cent-ral
with details to be filed by amendment. Proceeds—To be
RR. and Baltimore & Ohio RR., and it is expected that
'applied toward the payment of $4,000,000 of bank'loans
the contemplated "bond issue will "bear the ^guarantee of

due 1958. Underwriter—Alex. Brown & Sons, Baltimore.
Price—Par. Proceeds—To retire $635,000 of 4y2% first

1948.

cost

apply $100,000 to construct new warehouse ;Und
for working capital.
v
!
/
<
/
•

(bonds only); W. C. Langley & Co. and The

Common stock will be-offered under

•

1,

certifn:

^emi-annuklly

April 22 stockholders will vote on increasing indebtedmess from $250,000 to $500,000. 'If approved company will
West Penn Power Co. (3/22)
Feb. 20 filed $20,000,000 Series M firit mortgage bondsv 'ask -Stockholders for authorization to borrow not in ex¬
Of $500 000 from
due March 1, 1978; 50,000 shares of Series B preferred" cess
a
single institution. /Proceeds
would be used to repay an existing debt cif $193,750; to
stock ($100 par) and about 2.000,000 shares (no par)

Taylor

capital.

Urid maturing

-

the Belt family.

working

1948,

Wisconsin Power & Light Co.

participating

*#

1,

and common stocks and

Issue to be-

'

'

East

to

Oil Co., the"

being acquired by Gulf Oil Corp.

May

a

The FPC 'has approved company's constructloh

by amendment. Proceeds—To/purchase-

75% interest in the capital stock of Devonian
other 25%

dated

period of 15 years. Probable bidders: Hals(ey,
Stuart & Co. Inc.; Salomon Bros.:& Hut2ler; "Harris, Hall
& Co. (Inc.).
; ";,vover

Dec. 29 filed 30,000 shares

Inc., Bloomington, Til.*

Feb. 2 filed 40,000 shares of 50c cumulative convertible
shares

notification)

Feb. 5 filed

S.

Proceeds—Additional

of

.par) capital stock. Price—$5 each. Underwriter—Ahd-/
ley P. MCCallie. For drilling program.
■ /

'March

construction program.

•

and Clair

(letter

Corp. (jointly); Lehman Brothers; Kidder,:
Peabody & Co.; Smith Barney & Co. (preferred only).

(3/5)

Underwriting—Issue awarded March 2 to Blyth

—To finance

ceived March 23 for 4,530/000 ih equipment trust

Colorado

24

First Boston

&

ment.

A

Feb.

(letter of notification)

24

Feb.

thf

Co., Ltd.
'
'
applied to the California P. U. Com¬

authority to sell 75,000 shares ($20 par) 5%
preferred stock under a tentative sales agreement with
Paine, Webber, Jackson & Curtis and Mitchum, Tully &
Co. Proceeds for
extensioris, "etc.
*

Feb. 16

March 3
■

Bell T^lephonte

Missouri-P. :s. "Commission

reported "company may be-in the'market,'pos¬

sibly about the end of April, with a

bondmffefiag for

approximately $14,000,000. The new issue Will be de¬
signed to replace at lower cost the company's outstand¬
ing $12,500,000 of first 3%s, due 1961. Probable bidders:
Halsey,

Stuart

Co.'

Inc.;.UehtrianYBrdthersr/Blyth' &

Co.,rinc.; Glore. Forgan -& Co;; and

Inc. (jointly); Shields &'
/and Kidder, Peabody •& Co/
Co.,
Co.

Harriman Ripley &

Co.;.White, Weld & Co.
(jointly); Harris; Hall: &

(Inc.) and The First Boston Corp.

(jointly).

Volume

167

Number 4678

THE

COMMERCIAL

total

a

3Vs%

J

security.

On the

hand,

one

might

we

conditions

the world which

in

co¬

peace

from the

at

G. H.

Edison

took

CJiuh,

an¬

projected $57,382,600 of new con¬
vertible debentures by going into
registration with the Securities

Exchange Commission for the

would have

New

no

alternative but to greatly expand

strengthen its military establishments so as to
be ready for any eventuality in a divided and un¬

hold

The
❖

«.

*

*

and

"Viewed in this

light, the cost of the European
Recovery Program may be compared to the pre¬
mium of an insurance policy. Certainly it would be
far less expensive than if the United States were

;
4

a

Foreign Relations Committee.

have to bear all the costs
—if

persist in

we

com¬

stockholders,
their

1

who

privilege.

often cited—and

so

present course?

our

CALUMET

issue

at

a

disclosed

equal

as

basis

a

to

A dividend

New

York

•

.

•

■

uetv

State

the

that

The

the

"peg"

on

But bond
in the

men who have been
Street for years will tell

that

you

it

is

thumb the records

;

back

a

placed the

were

4

[long stretch to find the equiva¬

shoulder

lent of the prevailing dullness.
'

to

the

across

Noble

and

Brooklyn

wheel

State's

in

big

at

COMPANY

No.

867

has

declared

dividend

will

be

mailed by Irving Trust Com¬
Disbursing Agent.
HAMILTON, Secretary.
1948

Dividend

JOHN W.

February

17,

Plywood

Corporation

-

($0.10)

per

For

the

ended January 31, 1948,
a
25c
per share
on
the out¬
stock of this corporation has
been declared payable April 12, 1948, to stock¬
holders
of
record
at
the
close
of
business

share wil

quarter

dividend

cash

of

standing

common

April

1948.

1,

I

Secretary.

ELLIOTT,

H.

SIMON OTTINGER,

New

.

York,

N.

March

Y„

3,

Secretary.
1948.

1948

Irving Trust

declared

have

of

dividend

twenty

Company

cents

One

'

February 26,1948

HOW A 00

EATON &
STOCK

declared

That, of course, refers to the goodly segment of its members
high-grade market in which in¬ found time to compete for a small
terest lies
chiefly with institu¬ utility issue which was up for
tional investors. But it applies as bids the same day.
well to second grade by and large,
Southwestern Gas & Electric
Co.'s offering of $7 million 30since, when institutions won't look
at top-ratings it is more than dif¬

the close of business March

close of business March 8, 1948.

15, 1948.

dividend

a

of this Company, par

$10., payable April 1, 1948, to
stockholders of record at the

25,

at

24 Federal

Street, Boston

STEPHEN G. KENT, Secretary

KfndHwo

York

New

4,

N.

OTIS

v

February

Y„

C.i.T. FINANCIAL CORPORATION

CO.

MINING

COPPER

ANACONDA

26,

Dividend

1948.

ELEVATOR

Common Stock

on

'

DIVIDEND
The Board of

159

No.

the Anaconda

Directors of

Cop¬

A

Mining Company has declared a dividend
Seventy-five Cents (75c) per share on its
capital
stock
of the par
value of $50 per
share, payable March 30, 1948, to holders of
such shares of record at the close of business
at 3 o'clock P. M., on March 8,
1948.
per

quarterly dividend of 50 cents

cash lias been

of

of

C.

I.

payable
record

C. EARLE MORAN, Secretary & Treasurer.

T.

declared

FINANCIAL

April
at

on

1,

the

1948,
of

close

COMPANY
per

share

n

6

the Common Stock

Preferred

CORPORATION
to

stockholders

business

March

ol

A

10

New

The

York,

Board

February

Y.,

N.

Directors

of

of

dividend

a

TOPEKA
AND
COMPANY

has this

share

26,

1948,

VV.

1948,

HAUTAU, Treasurer.

February 26, 1948.

at

declared
Fifty Cents

payable March ,19,

stockholders of record

to

the close of business

on

March

8, 1948.

($1.50) per share, being Dividend No. 141, on
Common Capital Stock of
this Company,
payable June 2, 1948," to holders of said Com¬
mon
Capital Stock registered on the books of
the
Company
at the close of, business
May

Checks will be

the

6,

per

the: Preferred Stock has

on

day

and

Dollar

One

quarterly dividend of $1.50

been declared

FRED

RAILWAY

FE

197

No.

Dividend

1948, The transfer books will not close. Check?
will be mailed.

ATCHISON,

SANTA

i

March

1948, to shareholders of record

of the American Man¬

a

of

close

THE

putting
issue, a

payable

share,

a

stock

tal

declared

have

New York

has

Company

of 20 cents

FUND

Trustees

this

quarterly dividend
per share on the capi¬

day declared

dividend of ten cents"($.10)

a

COMPANY

Streets

West

22,

Street, New York

Wall

March 15, 1948.
24 Federal Street, Boston

share on the Common Stock, payab'<
194'8 to'Sfdckholder3"Of Record' at the

1,

V

the

MINING

Directors

The Board of Directors has

premium in the first

Although virtually the entire
underwriting fraternity put its

for a~

record

record at the close of business

business March
8,
1948.
The stock
record books will be olosed for the purpose of
transfer
of
Common
Stock
at
the
close
of
business March 8,
1948 until March 24, 1948.
ROBERT B. BROWN, Treasurer.

apparently did a good job
since only a few of

to achieve

Checks
pany,

stockholders'

MANUFACTURING

The Board of Directors

credit

trading day.

to

necessary

of

.

The balance

through

AMERICAN

the intermediate maturities failed

j

of

1948.

United States

62

Trustees

The

April

of placement

issues.

guests

($.20) a share, payable March
25, 1948, to shareholders of

State's

lowering
term

10,

MURRAY, Secretary.

BALANCED FUND

of 25c per

issue

stockholders
March

867
of
fifty
cents
($.50)
per
share of
$12.50 par value Capital Stock, payable March
19, 1948 to stockholders of record 3:00 o'clock
P. M., March 9,
1948.

EATON & HOWARD

147% of the total of

DIVIDEND NOTICES

.

action,
its long-

to

com¬

m^pwcfpal market.

Treasury's. pre-Christmas

No.

February 26,

of

recent condi¬

banks and dealers who

1948.
declared

No.

Mass.
J.

a

rating
ranks high,'however, because of
funds piled up during the warenforced period of political econ¬
omy and the bonds were made the
i.
'
•;
■
•
more
attractive
since
they are
:
The seasoned corporate bond
backed
by
definite and segre¬
market is a trifle better pricewise
than it was just after the turn of gated revenues.
The single group of 250
the
odd
year,
in the wake of .the
.

for

COMPANY

cents

ten

Boston,

Company,

share¬

Through employment of the ad¬
privilege ap¬
proximately 100,000 shares were

ufacturing

tions in the

of

ditional subscription

satisfactory,

very

considering

1948,

business

DIVIDEND

CONSOLIDATED

HECLA

AND

150,000 shares offered.

1.79375%, viewed in market circles

1,
of

HOMESTAKE

Tuesday,

on
the

to

close

as

be paid on March 19, 1948, to holders cf tl
outstanding Capital Stock of the Calumet an
Hecla Consolidated Copper Company of recon
at the close of business March 5, 1948.
Chec
will
be
mailed
from
the
Old Colony
Tru'

had received bids for stock

pany

more

placed

was

cost

3,

day

Dollars

Expiration of the subscription
rights

As to this

Sold to bankers

the

be

this

Three

($3.)
the Capital Stock of this Company
ending March 31, 1948, payable

Orb

NOTICES

Dividend

exercise of the regular rights.
the

will

COPPER

held.

its

to

April

They

Boston, Mass.,

purchased

interest

Clubs

has

quarter

MATTHEW T.

games,
Street and

Wall

the

of

York, March
of

races

women,

Race—and

DIVIDEND

holders.

subscribed for.

j;

Relay

Egg

East 57th

get

&

common

the

The Board

Circle

deben¬

new

Power

additional

and

dividend

per share on

the

Only, the Rescue Race.

subscribe,

to

the

up

mounted

event for Ladies

an

members

Light Co.
turned in a real performance in
its offering of 179,000 shares of

little is being said.

very

to what extent the

Dayton

■

N'

Men

quarterly

on

Following the mounted

amount for each share

.

•

—the

wait

take

as

tures in the ratio of $5 principal

usual)"argument," but does it
not beg the question?
<
\
—
l
Of course, if the alternatives are really as stated
we should
get off much cheaper by handing out
a few
billions during the next few years.
But are these the alternatives, and how can we
feel very confident that we should not in the end

-51

are

men

the

have

opportunity

may

This is quite the

-it

events

to both

not

New

The Board of Directors
a

for

riders from the Circle
the Stirrup Club.
In¬
the program of Gymk¬

on

DIVIDEND NOTICES

on

open

for

to

exercise

,

and

may

interest

will

latter

see

first,

chaotic world."—

>

'

much

pany's

*

be

well

Com¬

-

The Senate
'

isolation in

stand alone in

to

issue

this

But

too

Service

York

the evening the three
hold a Supper-Dance

GUARANTY TRUST COMPANY OF NEW YORK

on

hana

banking fraternity.

certain world.
«

Public

York

mission.

and

p.m.

Club

it had
applied for
authorization
by
the

Earlier,
necessary

'

,

the other hand, the road of international

on

New

cluded

'

"If,

the

cocktail

a

Street.

that the Club's
Gymkhana will be held a'

6:30

in

will

at the Allerton House

announces

will

issue.

cooperation is abandoned, then the United States

Struckmann of the Bank

Riding Club at.
Saturday, March 6
Participating in the events tbi
year with the Wall Street rider

other stride toward flotation of its

and

Later

Clubs

of the Manhattan Company, Pres¬
ident of the Wall Street Riding
annual

Stirrup Club at

43

party.

Annual Gymkhana

lowest

price of 101.467

a

Consolidated

are

and prosperity.

.

of the

Wall Street Riders

a

to yield 3.05%, the issue attracted
liberal investor interest.

essential to
This is the
purpose of our participation in the European Re-,
covery Program.
international

101.07

Reoffered

attempt to establish and maintain those economic
;

for

all

offer of 100.109.

operate fully with the other nations in an earnest

/

bids,

with almost a full
separating the
winning

tender,

the United States might follow in the pursuit of
national

nine

of

(1035)

coupon,

point

"There are, in effect, two possible courses which

CHRONICLE

first mortgage bonds drew

year

Begging the Question

FINANCIAL

&

mailed.

C. A. Sanford,'Treasurer
New

1948.

York, February 25, 1948.

will be mailed to holders of
Capital Stock who have filed suitable
therefor at this office.

Dividend checks
Common

orders

D.

Assistant Treasurer,
York 5, N. Y.

WILSON.

C.

Broadway.

120

CHEMICALS^.

New

•

ficult

interest

to

them

in

The

.

Just

J

ly

now,

taking

up

Time

it appears, private¬

negotiated
the

transactions

are

time

in¬

of

the

their

ing

stockholders

for

share

extended

holders

who

with

(Layton,

3rd.

And, com-;
potental out¬

the

at

once

M.

in the month this has served to

mington,

iket virtually to

I

standstill,

a

v

claims

to

did

$0.20

1

April,

not

file

per

;

duPont

4072

Canby,

Dividends

Caleb-B.

Building,

Wil¬

Delaware.

($1.75)

of

per

dollar

one

share

on

u

managers:

bold

out

are.

still

inclined

Meeting Notice

seventy

five

j
i;

clared payable

Bonus

Bonds

'

New York State's fiscal author¬

ities,,
task

huge

on

The

whose shoulders fell the

of timing the

market for its

$300 million

veteran bonus

issue, appear to have turned in a

Transfer books will not be closed.

Dividends

Avenue, New York 16, N. Y.

Confuwttf

annual meeting

THE
Boardthe
of Directors
this day
declared
following has
dividends:
The

regular quarterly dividend for
quarter of $1,18^ per
share, payable April 1, 1948 to
the

American,

of

Bank Note

Company

(Eastern Standard Time) at 43 Park
Avenue,
Flemington,
Hunterdon
County, New Jersey.

Only stockholders

of

record at
the close of business on Tuesday,
March 23, 1948, will be entitled to
vote at said meeting, notwithstand'
ing any subsequent transfers of stock.
The stock transfer books will not'

be closed.

A

168

Common Dividend No.

156

of

quarterly dividend

(lj4%)

on

75d

per

The Borden

the close o/ busi¬

March 16,

1948.

7% SECOND PREFERRED STOCK

regular quarterly dividend for
the current quarter of $1.75 per share,
payable April 1, 1948 to holders of
share

the Preferred Stock for the

divi¬
the Common

record

at

of

40(*

share on

per

Stock have been declared.
are

Both dividends

payable April 1, 1948, to holders of

record March 8,

Company

payable March
stockholders of record
close of business March 19,

Both dividends are

30, 1948, to
at the
1948.

Checks will be

40 cents

per

31, 1948

to

Trust

Bankers

COMMON STOCK

share, payable March

holders of record

at

-

i

2, 1948

New

Robert P. Resch

the

Secretary
March

mailed by the

Company of

York.

close of business March 16, 1948.

W. F. Colclough, Jr.

(

$5.00 Par Value Common Stock
Regular Quarterly Dividend of
Forty Cents (40<f) per share.

Vice President

and! Treasurer

★

R. O. GILBERT

Secretary

Stock

Quarterly Dividend of One Dollar
($1.00) per share.

1948. The stock transfer

February 25, 1948

Preferred

24th Consecutive Regular

the close of business March

16, 1948.

quarter ending March 31, 1948, and a
dend

by the
on""
■-

'

ness

books will remain open.

THEODORE D. WAIBEL. Secretary

at

The
Preferred Dividend No.

Directors

current

holders of record

Wednesday, April 21,
1948, at 11:00o'clockA.M.

of

Cumulative

4%

FIRST PREFERRED STOCK

*4.75 SERIES

s

February 26, 1048, as follows:

>

*

,

declared

were

Board

Secretary

February 26, 1948

"bang-up" job.




180 Madison

Drive, Chicago

★

CORPORATION OF AMERICA

on

explains, in

Y.

20 North Wacker

!

April 1, 1948 to holders <ff rec¬
March 13, 1948.

stockholders will be held

RATION

O

cents

the 'Preferred Stock and

thirty five cents (3S<!) per share on the
Common Stock of this Company have been de-

of

;

P

COR

General Offices

Annual Meeting

to

servers.

N.

"The, 73otdvH,

for the higher yield.

part, their,
disposition to take it easy in
the open market and await the
(influx
of
new
emissions
in
the hope of obtaining the more
liberal return, according to ob¬
1"; That

MINERALS & CHEMICAL

No, 91

CARL A. SUNDBERG

grade corporate bonds are
averaging around a 2.90%
basis
as against
about 3%
six
Weeks' or so back. But portfolio

1

,

ord at the close of business on

Best

how

PLASTICS

N.Y.,

Preferred Dividend No.«159

.

Common Dividend

share has
Stock¬

1948.
with

Nee York 8,

30 Cbarr.li Street

to

amount¬

former Receiver, should file
with the. present Receiver, Henry

pouring of new issues due later,

?bring their inquiries in the mar-

file

to

Inc.

Federal tax refund

of

approximately

to

beein

Company,

Reybarn

surance companies.
•biiied

AMERICAN LOCOMOTIVE COMPANY

Financial Notice

leszer

grades.

Minirg and
Phosphate

•

Pot?sh

Manufacturing
*

Fertilizer *

Chemicals

44*

CHRONICLE

FINANCIAL

&

THE COMMERCIAL

(1036)

Thursday, March 4,(1948
than

BUSINESS BUZZ

(4) "Parity" prices should not
be based upon the relative value
of farm, crops in the 1910-14

And You

Capital

from the Nation's

,

\rk

\

period,

l

upon

but

should

"moving

a

be

is

-a

that the present Congress will

substantial danger

-

,

L

,

'«#

'/Y-

This; panic has been. v caused
by the realization, thai ! urban,
mortgage Credit shows signs' of
slackening up.. Insurance com-

put

£&&&*#£**

.

iL,

"<tb> /

n:
mi-

lated

v.

-

|I948 the- lending' volume they

boost;their reserves,

ing off GI loans,

back¬

are

re Quiring more

requiring

,

neems

Federal

hesitancy

U.

What is involved in this outlook

-

is

that

the-prospective construc¬
tion this year of more than 900,000
housing units may be jeopardized
for lack of credit. This prospect is
something more than politicians
can bear in an election year. And
it is probable they will do some¬
thing about it.

and

petition

of

are

the

direct

direct

Until

a

"Well,.don't look at me!
be

and

the

Finally,

for

this

the

strength, but for the
*

*

Road

government

,

builders

aid

highways.

by

war.
•

the

econo¬

ing-generally lapsed during the
and that traffic has grown

war,

far

beyond- expectations. Chances

that Congress will ap¬
two-year; rather than anf
indefinite,, Federal highway au¬
now

are

prove. a

thorization program.
Two

•

"

Republican
Representa¬
Ren Jensen of Iowa and

tives,
Walter Ploeser of Missouri, last
year launched • a program to put
national} semi-federaIlyownedgovernmen4,

;

•,*

between raising the inter¬
on
mortgages to the
voting customers and not rais¬
ing: them, there is-not much

doubt about

the

Congressional

decision. As between letting the
easy money dry up and killing
off the housing boom, and bal-

The Difference, between,
-

Inquiry and

-

an

an

movement with

!

-

Inquiries Invited

Chief

Executive

does

i

the

'

had in peace times to
the

power

bosses

of

threaten

staite Democratic

political machines.. There

are no

vast relief appropriations

which

Indiana Gas & Chemical
South Shore Oil & Dev.

•

;

.

as,

squealed

the commercial. banks.
over.

"political

trol" of deposit insurance.

Out

123 South Broad St,

Philadelphia 9, Pa.

thru—Montgomery, Seott
New York &

M.S.WKN&C0.
u

'

ESTABLISHED 1919

Membert N. Y. Security Dealers Ass'n
40

Exchange Pl„ N. Y. S;,

prices

should

should fix

Trading Market#:
supp o^r

ti

erally,
fixed

be

;

substaiitiaily.

rather

that

so:

by

prices
and

supply

than

by

(3)

wilt

Oregon Portland Cement

be

the

"

Riverside Cement A & B

Spokane Portland Cement

of

.

The function of supports

should be "to* keep the bottom

out

falling
farm

Ralston Steel Car

demand

distortions

government policy.

"from

HA. 2-8780

Teletype N. Y. 1-1397

from

business."

,

LERNER & jCO.
Investment

under,
"Farm

10 Pest QBkt Square, Boston 9,
Telephone Hubbard 1990

prices drop

farther

Mass.

Teletype BS 69

and faster

Teletype—NY 1-971

Empire Steel Corp.

SECURITIES

Foundry

Susquehanna Mills

All Issues
.

■

Herbert H. Blizzard & Co.
Clear

Soya Corp.

.

Firm Trading Markets

*

)
—

;

Airways

The■ market place rather

HAnoirer 2-9059

Pfd. & Common'

Orders Will Result

con¬

Taca

Tucker Corp,

lower than market prices gen¬

-

battle

.

...'

Government-

-

,

Dorset Fabrics

' ■ r

%

^ (2)-

facility and, com¬

Jensen and Ploeser lost-their

%

*

H. & B. Amer. Mach.
Pitts. Steel

•

Deal;

that his predecessor

4

■.>

the U. S.

as

England P. S. Pfd.

f

Ihe varues of crops.

modity loans since the first New

not have

.

Order Is

; WHAT YOU PUT BEHIND IT.
,

have wet-nursed the cooperative

j

;

(!)

,

] Southerners feel that Mr. Tru-

t'..

than the government

j

I President Truman is not poiiti- ]
Insurance ; Corporation
and the
i cally - as strong as - the
late '<
not
; Pre si dent
R o os e y el t.
Banks, |or Cooperatives,' which

rates

Philadelphia




<& Co.

LEWIS &ST0EHR

r.ABL MABKS 4 PP. Inc.

Incorporated

FOREIGN SECURITIES

Established 1926

oppn a T T«STCl

80 Broad St.

New York 4

Telephone: DIgby 4-0985-6-7-8

_

/

na¬

aiming at.

were

year:

-

not.enough.

As

permanent

do

Remington Arms

r

,

man can -be "knocked over"
politically. Second, the present

New

Secretary Clinton
P. Anderson is trying to worry
the Congressional majority into
hurrying through this year a revi¬
sion of farpi legislation, the socalled "long-range" farm, legisla¬
tion so' much, discussed. L
If Mr. Anderson fails, however
and the Congressional majority
has time to fight its", lefLwing
hoys, here are some, of tiie salient
policies they will attempt to in¬
clude in the new legislation next

secondary market

est

must

acquires from the Dominion.

Agriculture

!

There is fear that this will
maintain the present large volume
of home building.
'
.

a

S.

much merchandise

which their borrowers can

really

beginning to be felt .in
i Democratic Administration, so {
'porpo^Uqn^^iin^er-th.e Bureajroi
Congress by those whose thinking
the Budget. These; included "such
isimportant, that extension of j why are they getting away with '
; It this time? In the first place, >
Title
VI
and
revival
of
agencies as the Federal Deposit
the
are

U.

Canada buys, as she
lately has been doing, twice as

buy out the government of its
capital investment. This is the
objective the two Congressmen

mizers recognize that road build¬

.

-

-

expen¬

whereby

Coopera¬

tomers, even though not forced
to, are now planning to get
legislation setting up a system

appear

Even

for

Ploeser did not altogether lose

political

*

Banks

their battle. The B's for C's cus¬

to have
lost their fight for a permanent
annual authorization of $500 mil¬
lion of U. S. funds for Federal

'

J equality ideas of : the

The

something of

tives, also. However, Jensen and

war

greater

the

went

purpose,

existing

his

despite

com¬

v

is

used

can

conservative Southern Senators.

recently the expectation
strait-jacket.
■
- >
was that Congress would extend
*
*
i'fi
•'
'
•''.'
FHA's Title VI (mortgage credit
You
can
take it for granted
for builders, at necessary current
that the one-month extension of
cost) for another several months
rent control was aimed at giving
or a year, with additional
dough.
more
time for framing, a better
The language, of the extension
bill than the Senate proposed, If
might be pitched at promotion of
more
rental- construction. There possible the new bill will achieve
a
greater /measure of decontrol
was a possibility that'the second¬
and still avoid extreme increases
ary market for GI loans, killed by
in rents where they would hurt
Congress, might be revived. Public
—politicallyv.;housing and funny finance, how¬
%
*
*
ever, were ruled as unlikely —
Southerners have always
•then.''
"'
; "
"V ! talked revolt against the racial >
It

It's my wife's idea!"

President
would not now dare, as did Mr.
Roosevelt, to attempt to purge

government

,

makes possible the

enough.

or

operations- into

"wonder-

say,,

ture to correct the "imbalance"

the development of
some form of subsidy-insurance
program that
would tie their
lending,

-j

Ottawa Is
telling Washington that is not

in earnest against Mr. Roosevelt,

either

And

Canada
"J"

,

diture of $1.3 billions on Cana¬

threatened

is

bring

dian goods for ERP.

is over. The
revolt might have been launched

with

vacationland.

figuratively

does)

take more
time
considering
the differences of opinion, than
the foreign aid program. Yet
Title VI expires. at the end of
this month.
What housing fi¬
nancing agencies

a.

fui" just because Congress (if it

would
to work out,

No. 1 inflationary spot.

]
"t

Incidentally, Canada; is not '
going to beave a, sigh of relief

committee,

ficials, who continue to spot
urban mortgage inflation as .the

as

vacationers

S;

U. S.- dollars." V-7" '

personal objective of the Chair¬
man
of
the
special
housing

supervisory of¬

1

from,, Canada by, a, neat deal .with ]
Ottawa.' .Canada ; is .also vdqllar-f h
starved. 8h<e discussed with the
U: S; film: people- her exchange

Canada

A "national housing policy," the

lately to have the blessing

the

of

:

;

problem.-" In^ return for np Curbs
even mildly resembling the
Brit-;.
ish ;75% tax oh earnings; the film
people? agreed" to. "cooperate" in
advertising
the -advantages
of

ideas, there is no amplitude of i
time in which to consider them.

All

payments.

down

this commercial bank

pull--

slt was. reported h&re that the
U. S.» film industry; avoided a* slap

innumerable

are

apply - the

'

saii yet, wbat kind

While there

careful scrutiny of the personal
credit of the borrower, and are

to

.,

.

worked up in 1947. Commercial
ihanks,. already skittish about
(Administration p r o p o s al s to

effort

program.

* '5

-.

die June 30

motor is not expected to save this

have not yet mado up their minds..
The one "housing" shortage which
doesn't exist is, the,supply of ideas
about housing. There is a glut of
ideas; Harry Truman has- them J
The special Senate-House Com-i
mittee on Housing has ideajs. The;
key leaders have some ideas, The]
Housing and Home Finance
Agency,; the, top Administration
housing bureaucracy, has them. i

iii

look

by failing to report out continuing
legislation. President Truman's be¬

funny mortgage finance will
come, out; That is; because, those
who will have the deciding.voice,

get; from, the. GI loans.
cutting down on sery-:
Icing fees to primary lenders
Who
originally; handle • theseloans. The savings and loan as¬
sociations* are 'not expected" to
to maintain-

will

Congress

It can't be

are

have* the funds

Trade Agreements Act

that., if the

Hk'ely

to

ments program will succeed with
their strategem of just
letting i;he

in jim

of

they

They

-

..

Uncle
Sammyinto.the mortgage „financing business/ > in
* bigger
and
fancier -way. It
is hard
going, but this is an * election,
year.
v. -V'.
*

.

jpanfes are reported here to be
dissatisfied with the 4#> interest
;

is- very

that

...

don4"

£?3-

big mortgage lenders and their
representatives report; that they
cannot continue, on the 4% basis,

Congressional leaders and 'some of
the rank and file have developed
a* minor] panic on the housing
question. They "have* come :to the
view.- that "something musL .be
f

-

beginning

now

of

'

arid more like the opponents
the Reciprocal Trade Agree¬

of

doubt in this election year,;
It

years.

more

go

; What has happened in the past
few weeks
that;at least two key

is

It

.

off .the * deep 'end on' housing legislation "before the summer
adjournment. This legislation could obligate the government to
make some hundreds of millionsr-perhaps even a billion or so—
of loose loans.
It also could raise *
looning the present mortgage
hob with conventional financing
credit inflation, there also is no
outlets;
:
/
- :

based

average"

prices in the last 10

There

material

raw

Our

job Is to proteet
farmers against the bottom drop¬
ping out," said one key leader.

on...
Behind-the-Scene Interpretations

other

even

prices.

;

Hill, Thompson & Co.. Inc.
Markets

SO Broad Street

New York 4. N. Y.

AFFILIATE: CARL MARKS A CO. Inc. CHICAGO

and Situations for Dealers

120 Broadway, New York 5
Tel. REctor 2-2020

Tele. NY 1-2660

;

,

Volume

167

THE

Number 4678

COMMERCIAL

&

FINANCIAL

CHRONICLE

Pictorial

Investment Traders Association of

Jack

Swann, Lilley & Co.; John Hudson, Thayer, Baker & Co.; Vic Mosley, Stroud
& Co., Inc.

Muller,

Janney

& Co.; Henry

Warner, E. H. Rollins & Sons, Philadelphia;

T. J. Meaney,

Don

Hornsey,

Wolley,

du

Pont,

Hompey

Coffin &

Co.,

Wellington Fund, Inc.

Boston;

Burr, Inc., Boston; Artnur
Goldman, Sachs & Co., Boston

Sumner

Engdahl,

Lou

Walker,

John Meyers,

sternacher,

National
M.

Quotation
Freeman




Hutzler, New
E. H. Rollins

of Michigan Corp. New York

Bureau,

New

York;

Gentry Daggy, H. M. Byllesby & Co., Philadelphia; Hilda
Williams, Lewis C. Dick Co.; Bill Kumm,

& Co., Philadelphia

John

Phillips & Co.; Rudolf Smutny, Salomon Bros. &
York; "Duke" Hunter, Aetna Securities Corp., New York; Joe Conlon,
& Sons, Inc., New York
Ned Phillips, S. K.

Philadelphia

Harry Fahrig, Reynolds & Co.; Floyd D. Cerf, Jr., Floyd D. Cerf Co., Chicago; Tom
O'Rourke, Stroud & Co., Inc.; Charles A. Taggart, Chas. A. Taggart & Co

Gordon Graves & Co., New York; A1 FenM.

I

Herbert Gallager, Yarnall & Co., Philadelphia; A1 Rauch, Kidder, Peabody & Co.,
Philadelphia; Walter Schmidt, Schmidt, Poole & Co., Philadelphia; Dave Callaway,
First

Geo.

Insert

Jim

Bradbury, Dolphin & Co.; Bill

Dunne

&

Co., New York

McCreary, B. J. Van Ingen & Co., New York;

Musson, B. J. Van Ingen & Co., New York; George E. Lestrange,
Lestrange & Klima, Pittsburgh; Leo Dolphin, Dolphin & Co.;
Walter Schumann, Dolphin & Co.

Arthurs,
"

-

Pictorial Insert II

THE

COMMERCIAL

&

FINANCIAL

CHRONICLE

Thursday, March 4, 1948

Twenty-Fourth Annual Mid-Winter Dinner

Fred Fischer, H. N. Nash & Co.; John Butler, Geyer &

Co., Inc., New York; Harry Heffelfinger,
S. K. Phillips & Co.

Bob

McGook, Buckley Bros., New York; John Cantwell,
Buckley Bros.; Graham Walker, National Quotation
Bureau, New York

Nat

Krumholz, Siegel & Co., New York; Herb Lax,
Greenfield, Lax & Co., New York; Tom Greenberg,
C. E. Unterberg & Co., New York

Charles Wallingford, Harrison & Co.;

Allan

Harry Maneely, Montgomery, Scott & Co. (dancing); Bill McCullen, W. H. Newbold's
Son & Co.; Chick Bradly, E. W. Clark & Co. (with the Murphy Sisters)

Harry Peiser, Ira Haupt & Co., New York; Russ Dotts, Hess & Co.; K. C. Ebbitt,
Ryan & Moss, Newark; Edmund C. Byrne, Campbell, Phelps & Co., New York

Mike Heaney, Jos. McManus & Co., New York;
Stanley Roggenburg, Roggenburg & Co., New York

Oliver Kimberly, J. K. Rice & Co., New Yiork; Doc Williams, Kennedy & Co.; Joe
Barnes, Kennedy & Co.; Charley Downs, Kennedy & Co.; Bert Pike, Troster, Currie
& Summers, New York




F. E.

G. E.

Foard, Stroud & Co., Inc.; Jack Gessner, Mabon & Co., New York; S. K.
Phillips, Jr., S. K. Phillips & Co.; Joe Nugent, Mabon & Co., New York

Maguire, Stroud & Co.; Ted Plumridge, J. Arthur Warner & Co., New York;
Williams, Pennsylvania Company for Banking and Trusts; A1 Leek, Coffin &
Burr, Inc., New York City

Volume

167

Number 4678

THE

COMMERCIAL

&

FINANCIAL

CHRONICLE

Pictorial Insert III

At the Ben Franklin Hotel

Jim

Cleaver, Goodbody & Co., New York; Mrs. Raymond
Trigger, New York

Bill Russell, Mabon &

Co., New York; Edmund Davis,
Rambo, Close & Kerner; Harold J. Williams,
Boenning & Co.

Michael Rudolph, Stroud & Co., Inc.; Bill Macdonald, Paul & Co., Inc.; Philip Carret,
Carret, Gammons & Co., Inc., New York; Charles Gross, Harry M. Sheeley & Co.,

Baltimore

William C. Roberts, Jr., C. T. Williams

& Co., Baltimore; Ed Caughlin, Edward J.
Caughlin & Co.; Sam Magid, Hill, Thompson & Co., New York; Jack O'Brien,
Edward J. Caughlin & Co.

Bert

Burbank, White, Weld & Co., New York; Leo J. Goldwater, Goldwater & Frank,
New York; Mark Aiello, Spencer Trask & Co., New York




A1
&

George Leone, Frank J. Masterson & Co., New York; Joe
Eagan, Frank J. Masterson & Co., New York; Frank
Fogarty, Philadelphia

Willis, H. M. Byllesby & Co.; Philadelphia; Geo. Dietrich, Blair F. Claybaugh
Co., New York; Harold Scattergood, Boenning & Co.; Chas. Zingraf, Laurence
Marks & Co., New York
.

Stew Terrill, J. D. Topping & Co., New York (standing); Harry Snyder, Yarnall &
Co.; Fred Barton, Eastman, Dillon & Co., New York; Doug Hansel, Wertheim & Co.,
New York

Walter Fixter, Buckley Bros.; Jack Weller, Buckley Bros.; Lud Strader, Strader,
Taylor & Co., Lynchburg, Va.; Taber J. Chadwick, Chadwick & Slaight, New York;.
Russ Ergood, Stroud & Co., Inc.

Pictorial Insert IV

THE

"

COMMERCIAL &

Is Pronounced

Bill

Thompson,

Ralph

Boston; Irving
McCaulley, R. H.
Co., Philadelphia

F.

Carr

& Co.,

Herb Blizzard, Herbert H.

Huge Success

Blizzard & Co.; Harry Arnold,

Feltman, Mitchell & Co., New York; A.

Paine, Webber, Jackson & Curtis, New York; Connie

Johnson &

Miller, E. W. & R. C. Miller & Co.

Vincent Gowen, E. W.
& Co.,

Clucas & Co., New York; Almon Hutchinson, Buckley Bros.
New York; Arthur C. Sacco, Detmer & Co., Chicago; Carl Lachman, Eastman,
Dillon & Co., New York

Herbert

Carrol

Singer, Luckhurst & Co., New York; Ray Allen, Hecker & Co.; John Milburn,
Hecker & Co.; Joe McNamee, Hopper, Soliday & Co.

Williams,

Laird,

Bissell & Meeds, New York;
Williams, New Haven,
Coxe, Laird, Bissell & Meeds,
Wilmington, Del.

Frank Murray, Day, Stoddard &

Conn.; David




Thursday, March 4, 1948

FINANCIAL CHRONICLE

Wallace Runyan,

Graham, Parsons & Co.; Fred Under¬

wood, Boenning & Co.; Joseph Carson, Kidder, Peabody
&

Co., Philadelphia

•Barney Nieman, Carl Marks & Co., New York; Irving Manney, Eisele &

King, Li-

baire, Stout & Co., New York; Joe Markman, E. W. Smith Co., Philadelphia; Sid
Siegel, Siegel & Co., New York

Thomas B.

Krug, Bioren & Co.; Frank Whitley, Bioren & Co.; Bert Seligman, Ward
& Co., New York;

Caryl Le Fevre, Reynolds & Co., Philadelphia; T. C.
Anderson, Chas. A. Taggart & Co.; Cal Henry, Fidelity
Philadelphia Trust Co.
-

Chas. A. Taggart, Chas. A. Taggart & Co.

John A. Murphy, Reynolds &

Co., Philadelphia; John K.
Ruckdeschel, Boenning & Co.; Robert P. Morrissey,
Jones, Miller & Co.