Full text of Commercial and Financial Chronicle : March 9, 1944, Vol. 159, No. 4262, Section 1

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'344

MAR i u

Final Edition

ESTABLISHED

OVER

YEARS

100

2 Sections-Section

dl and

omm&tcial an

Financial Chronicl
S.

Ileg. U.

Volume

New

Number 4262

159

Condemns Destiuc? How

Business

his

annual

report - to stock¬

holders for the year ended Oct. 30,

1943, J. Cheever Cowdin, Chair¬
of

man

the

Universal

Board

Pictures

Co.,
o u t

pointed
that

"when

the

ends,

war

most

ies

compan¬

will

need

capital for im¬

proving plants,
replacing ma¬
chinery, buy¬
ing

raw

ma¬

terials,

en¬

larging
pay¬
rolls,
and to
pay

reason¬

able

return

for

the

ings

;

markets.

busi-

ness," as well

J. Cheever Cowdin

their

sav¬

invested
the

expand

"Existing

excess

To Make

Gerald

Loeb,

partner of E. F. Hutton & Co., in speaking

investors
noted

advisers "he

and
a

over

had

period of years who
upon either sta¬

If," he

purposes.

con¬

funds

insufficient

with

war

and will,

continue full operations,

(Continued on page 990); V,

Special

material

with

interest

tistics,

economics,

torical "sequences

Purely
he

as a

had

charts or his¬
for their ideas.

per-

•

activities in the
Wisconsin

and

minimum

the

consin, page 996.

will be under the influence of the huge

He also elab¬

•

m o s

of 5

alone

service

——*

universal mis¬

lion

get

Federal

in¬

that

ways

some¬

Geicald

even

and

lines

profitable
He

thinking

investor

along

disabuse

•'

situa¬
in which full investment or
debit balances were justified
that
was
either when the
there

said

(Continued

were

two

on page

dollars
1 9 3 8.

needs

the

huge

debt

and of the in¬

creased

by its

end of the war

Nadler

Dr. Marcus

and

•

will

■

deposits at
well be
If com¬

may

high taxes for

to come; those who believe
that the end of the war will be

Hotel Statler, Inc.

Exchange
other Exchanges

Members New York Stock

Association on March 1, 1944. 1

(Continued

on page

25 Broad St., New
2-0600

Chicago

control:

INC.

NEW YORK STOCKS,

only

votes

large

pressure

York 4, N. Y.

Teletype NY 1-210

Cleveland

INVESTMENT

SECURITIES

64 Wall Street, New

Albany
Buffalo
Pittsburgh
Williamsport

Troy

Syracuse
Dallas

and

COMPANY
V;

634 SO. SPRING ST.

JERSEY CITY

LOS ANGELES

Purolator
}

AVIATIONS

THE

CHASE

Hardy Ik Co.

service with Chase

Members New

facilities

York Stock Exchange

York Curb Exchange

30 Bro&d St.
Tel. DIgby 4-7800

New York 4

——I

Member Federal

Deposit Insurance

Corporation

Tele. NY 1-733

Tf* ;j^eric4N^MADE
lIl^ARK ET-S I N1

Products, Inc.

BANK

correspondent

Members New

*
I

CANADIAN

\SECURITlESy

Federal Machine and

V;-RAILS

BROKERS

LONG

Request

15 EXCHANGE PLACE

Actual Trading Markets, always

BOND

INCORPORATED

York 5

PHILADELPHIA

BOSTON

Prospectus

HUGH

New

England

Public Service Co.

Welder Co.

ALL ISSUES

International

Analysis upon Request

INDUSTRIALS

Detrola

Bull, holden & C9
MEMBERS NEW YORK STOCK

Kobbe, Gearhart & Co.
*

Members

14 WALL ST., NEW YORK

5, N. Y.

TELEPHONE-RECTOR 2-6300

Security

45 Nassau Street
Tel. REctor 2-3600

Philadelphia

Dealers

Ass'n

New York 5

Teletype N. Y. 1-576

Telephone:

Corp.

HART SMITH & CO.

REYNOLDS & CO.

INCORPORATED

EXCHANGE

Enterprise 6015

Members New

120

group,

thus

Broaden your customer

and Dealers

Rep.

through

Brokerage

R. H Johnson & Co.
"

Gov¬

OF THE CITY OF NEW YORK

Bond

request

management"

1009)

Service

Established 1927

HA novel'

ernment

inevitably

almost

by Dr. Nadler, Professor of
University,
before the American Management

Hirsch, Lilienthal & Co.
Geneva

through

"participation
leads

ered

for Banks, Brokers

greater power
prestige

and

Haney

NATIONAL

Analysis

London

Finance at New York

Common Stock

and

Lewis

their influence over the numerous

Distributors

Dealers

labor

(Continued on page 1006)

armed

forces
veterans

of the Treasury and

some

leaders to seek

^Summary of an address deliv¬

years

1005)

the

For quite some
war,
the credit

ex¬

penditures for
the

after

theories.

tendency

acquiring political power,
could they hope to attain business
over 150 billion dollars.
modity
prices remain approxi¬ leadership. Or their main motive
mately what they are today, the may be to avoid the regulations
and
responsibilities which will
supply of funds in the hands of
business
enterprises in general have to be imposed upon labor

consequences

public

The

indulging in

are

The volume of bank

the

The

refunding operations.

7,240,000,000

Loeb

worth'
while buying in the market.

dollars

in 1930 and

thing

such

than

less

facts

policies of the monetary authori¬
ties will be
dominated by the

billion

al¬

time

ex¬

penditures

in the

was

tions

to carry out

their

—

wishful thinking.

total

with

"working"
for

dollars

contra sted

their capital
either

reduction
of corporate and personal income
taxes are not basing their calcula¬

per annum, as

jobs

present

followed by a wholesale

bil-.

take of all in¬
vestors

to extend their

will be

extension

control, either

great liquidity, the
extent, on Govern¬

obligations and the liquid assets in the hands of the people
larger than ever before. Public debt will entail an interest

ment

seek such

a n

debt created during the

entire economy will be marked by

persons,

office hold¬

of Government

credit structure of the country will rest, to a large

The

present

many

ers,

war.

factors.

back of

political cam¬
paign. This is
true, first, be¬
cause
a
good

for years after the

of attention to

tions

Underwriters

issues

the

such

him of that idea.

General index on page 1016.

<t>

war

customer's broker must do to get

For Illinois see page 994; Wis¬

with little freedom of individual choice. But should
similar controls of the war economy be projected into
the future?
More specifically, should price-fixing and rationing be
continued in the post-war period?
It may turn out that these questions are really the fundamental

The financial structure of the United States

J~
Illinois
He
in this pointed out that the first thing a

r;? K

issue.
y

States of
appears

dealer

it marches, regimented,

When economic democracy goes to war,

under orders,

the existing or

By Dr. MARCUS NADLER*

C;>.

•

Author
*

Financial Structure

paid

sonally

there

University;

The Nation's PosfrWair

matter of observation,

belief

items

and

reference

York

And Distribution" i

depended mainly

come or

In This Issue

New

Economics,
"Value

Wide Diversification—Sees Short-Term Outlook Favor¬

Professor

Of Investment In A Few Best Securities Safer Than

the

tinued, "the taxes are confiscatory,
business will be left after
the

By LEWIS II. HANEY

Correct Selection Of Individual Issues and Concentration

extemporaneously before the Association of Stock Exchange Brokers
on Feb. 29, began his address by
commenting on the numberless

Copy

Democracy—Demobilization
The Democratic Way

Company Advises
Investors To Look Primarily For Appreciation—Holds

able—Long-Term Outlook Doubtful—United Aircraft
His Favored Long-Pull Purchase y : ?

60 Cents

Reconversion To Economic

Gerald M. Loeb Of E. F. Hutton &

taxes," he said, "make it
orated on what
difficult for companies to retain
he
felt 'was
in the business sufficient earnings
these

Price

York, N. Y., Thursday, March 9, 1944

profit

for

Office

Money
| In The Stock Market

five Taxes On
-4

Pat.

York Stock Exchange

Broadway, New York 5, XT. Y.
Telephone:
Bell

REctor 2-7400

Teletype NY 1-635

Members
New

York Security Dealers Assn.

52 WILLIAM ST., N. Y. 5

Bell
New York

HAnover 2-0980

Teletype NY 1-395
Montreal

Toronto

ira haupt & CO.
Members of

Principal Exchanges

111 Broadway, N.
REctor 2-3100

Y. 6

Teletype NY 1-1920

COMMERCIAL & FINANCIAL

THE
986

in:z:

Trnding Markets
•

•

(

|*'

American

•'

Markets in 17. S. FUNDS for

We Maintain Active

Alabama Mills
United Gas Improv.

Established 1920

York

Members N. Y, Stock

Ass'n

Security Dealers

Telephone
BELL

Axton-Fisher Tob. A & B

Com. & Pfd.

Elk Horn Coal,

i \>

By Hon.

Lanston Monotype

MitcliclUCoinpamj
Members Baltimore

Stock Exchange

Broadway, N. Y. 5

120

WOrth 2-4230

v <

last

^United Cigar Whelan
Preferred
Exchange

Vanderhoef & Robinson
York Curb Exchange

Members New

31 Nassau

New York 5

Street

NY 1-1548

System Teletype

not

■-

branch offices

American Gas & Power

after the

face

The

war.

for

President,
last

this

Byrndun Corporation
Class A

Common

1945,

would
50%

tutes one

•

Preferred

H. G. BRUNS & CO.

bonds.
is

no
Robert A.

Taft

Every¬

issue.

agrees
the

war

cannot be financed

delivered before the
American
Retail
Federation at
the Waldorf-Astoria Hotel in N
York City on Feb. 29, 1944.

Teletype

Bell

on page

1008)

Eversharp Attractive

1t1843

Common stock of Eversharp,

offers

Inc.,

interesting possibilities ac¬

to a circular being dis¬
tributed by Stanley Heller & Co.
cording

Standard Engineering

England Public Service
Preferreds

Punta ASegre

Vi %

Pine

Sugar

Interesting Possibilities

Hanover 2-4850

Salle Street,
tional
which

Co., 231 South La
Chicago 4, 111., have

recent analysis of Na¬
Terminal Corporation,
offers interesting possibil¬

prepared

1127

Associated
Gas

number of the

by the symposium
appeared in our issues of
Feb. 17, Feb. 24 and March 2,
starting on the cover page in
each instance.
We give now
another

of comments
and others will be published
in subsequent issues—Editor.
group

FASHION PARK, Inc.
5s, 1063

"What Are Rock island
Bonds Worth?"
of
Exchange,
with offices at E. F. Hutton & Co.,
Frederick M. Stern, member
New

Broad¬

115

Willett,

New York City, have pre¬

way,

pared the current issue of their
"Over
the
Counter - Review"
-

Central States Elec. (Va.)

Copies of this interesting review
on

*5%

be had from Bristol & Willett
request.

may

-Debentures

5 Va %

Common & Preferreds

Indiana Gas & Chemical

St., New York 4, N. Y.

HAnover 2-0600

Tele. NY 1-210

165 Broadway 4 Vis, 1958
*

Dealt in on New York

Curb Exchange

Frank C.Masterson & Co.
Members

New

York Curb Exchange

NEW YORK 5
HAnover 2-9470

WALL ST.

Teletype NY 1-1140

Commission, Philadelphia, Pa.

Missouri Pacific

fixing
rationing into the post-war

it wise to extend price

General 4's

1975

togi
views

marshal

York

Stock

thinking
that

BUCKLEY BROTHERS

regard

Members New

which

gave

titled

Are

"What

Bonds Worth?"

Rock

Island

Copies* of this in¬

teresting study may be obtained

written request from

Mr.

ecutives' Club

1% I

of Chicago on

v -•
^
%*&?*** ,% jjjk

15, 1943.
developing
my

jBBt Glore,

the

rising trend of

creasing accumulation of
of individuals and

the in¬
savings

unincorporated

Men made the fol¬

have put to me:
"The

other

Chairman

day

Alfred Sloan,

the

Board

Motors

General

Corp.,

the

warned

Scranton

Nimmo

Co.

and

Co,

Trinity Place, N. Y. 6
HA 2-2400
Teletype NY 1-376-377

Private

to Buffalo - Cleveland
Pittsburgh - St. Louis

30 Pine
::

Wires

Detroit

Member

Mayer

Jonas &

New

Teletype NY
York

Naumburg

Ok la-Texas Trust

*;VV*V"

•'

& Co., Inc.

St., N. Y., DIgby

Bell

Turner,

Fashion Park, Inc.

Pfd.

Successors to

with

Pittsburgh Railways

BERWALD & CO.
Robert

was

Receipts

•'

Security Dealers Ass'n

of the

of Content, Hano

Knight & Sholten.

•

Tr osier, Curries Summers

formerly mu¬

municipal bond department
New York office

Pfd.

New York Water Service,

Escrow

was

for Gruntal &
Prior thereto he was in the

Spokane International R. R.

Class "A"

with them-in

bond department.

nicipal bond trader

Spring Brook

Water Service,

associated

now

their municipal
Mr.

Allen B. Da Mont

Laboratories

Forgan & Co., 40 Wall
Street, New York City, members
of the New York Stock Exchange,
announce that Alfred L. Nimmo
Glore,

Ganson Purcell

corporate liquid savings and

businesses.

Los Angeles

Forgan Staff

mSam

address, I reto

Wires to Philadelphia Si

Alfred Ninno Joins

the sub j ect
of

Direct

Vi/lII

Oct.

matter

York 5, N. Y,

WHitehall 3-7253

(Continued on page 1002)

63 Wall Street, New

before the Ex¬

York Stock Exchange

addres

Preferred

Members New York Stock Exchange

GANSON -PURCELL

Broadway, New York 6, N. Y,, lowing statements which bear di¬
has prepared a memorandum en¬ rectly on the question that you

FASHION PARK, Inc.

25 Broad

Teletype NY 1-1919

Bell System

Oyer-the-Counter Review

FASHION PARK, Inc.

Simons, Linbarn & Co.

•

WHitehall 4-8120

65 Broadway

ferred

Members

Teletype NY 1-609

opinions

adduced

Stern.

Bought—Sold—Quoted

170 PINE ST., N. Y. 5 WHitehall 4-4970 jf

Members New York

occas

express their views regardthe subject. A consider-

upon

Deb.

financial circles

business and

ities, the firm believes. Copies of
this circular may be had upon

Electric

6. A. Saxton 11 Co., Inc.

requested various
personalities in Government,

Common

Associated

discussions

recently

request from Adams & Co.

Exchange
Curb Exchange 1

Members New York Stock

inc.

3 You say that you are interested
to know whether or not I think

the

Y. Security Dealers Assn.

1-1126

Edward A. Purcell & Co.

of the more impor-^

New York Cur

Works

&Teene<mACompcmu
Teletypes—NY

Common

Bristol

Cit:

Copies of this circular
may. be had upon request from
Stanley Heller & Co.

Adams

St., N. Y. 5

of the

members

York

Pfd.

Cum.

Vertientes-Camaguey

Members N.

Street, New

Exchange.

United Piece Dye

American Utility Service

previously with the Chicago
office of Bear, Stearns & Co. and
Kidder, Peabody & Co. for a
number of years. In the past he
was an officer of Hickey & Co.,

post¬

Address

(Continued

New York 5
WHitehall 3-1223

Laboratories

was

planning. In an effort to
sound out a representative
cross-section of public opinion
in this matter the "Chronicle"

20 Pine Street,

Telephone:

Du Mont

Hornblower

war

45%

There

Struthers Wells
&

CHICAGO, ILL.John F. Rey¬
with
& Weeks, 39 South
La
Salle
Street.
Mr. Reynolds

nolds has become associated

Chairman, Securities & Exchange

current

would

taxes and 55%

that

Indiana Limestone

Common

Prior Pfd.

(Special, to The Financial Chronicle)

questions uppermost in

tant

taxes and 50%

one

' '

Boston & Maine

Horoblower & Weeks

price control and rationing meas¬
ures should b| continued after the close of the war consti¬

fun damental

Electrochemical

1952

Reynolds

j Whether the existing

■

year

ending July 1,

Income 6s,

d. F.

Symposium On finestion Of
Post-Was: Price Fixing, Rationing

Common

Hooker

Common

change

raise

Bell

Direct wires to our

Tel. REctor 2-7815

materially the

gress

w ^

ROBERT A. TAFT*
from Ohio

by bonds. Con¬

Common

tremendous excitement this

raise

COrtlandt 7-4070

Telephone

37 Wall

NY 1-1557

La.-Birmingham, Ala.

will

war

problem

Y. Curb

Morgenthau International Bank

year

the

last week about the
current tax policy of the government, and a great difference of
opinion regarding the exact amount which the government should
raise. But, after all, this is only a temporary problem, When the war
is over we will have a public debt close to 300 billion dollars, and
whether or not we raise five billion dollars more by taxes in the

3-6s, 1956

Support An Export Trade By Loans Or By Any Of
The International Panaceas Like The Keynes Or White

Savoy Plaza

New

YORK

New York 4, N. Y.

HAnover 2-0700

New Orleans,

There has been

;

Federal Post-War Budget Of 18 Billion
Dollars—Believes That With Drop In National Income
To More Normal Proportions Present Tax System Would
Not Raise Much More Than This—Views It Impossible

Plans Or The

1-1227

Teletype N. Y.

Sees Necessary

Royal Typewriter, Pfd.

Aetna

York Curb Exchange

120 BROADWAY, NEW

United States Senator

Mayflower Hotel, Comr

Bell

New

Sound finance Or Spending
In The Post-War Era

Trecker

Kearney &

•Traded

York Stock Exchange

New
i

Stock Exchange

Members New York

25 Broad St.,

;Members

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

BArclay 7-0100

Steiner,Rouse&Co.

McDonnell &(b.

TELETYPE NY 1-423
'

Bell

Exchange ana Other Principal Exchanges

BROADWAY

115

5 HA 2-2772

Exchange PL, N.Y.

0'Gara Coal 5s, 1955

Walworth Pfd.

Co.

Goodbody &

KING & KING

Birmingham Elec. 7
-

Warren Bros. Class "B" &"C"

N0RANDA MINES

Missouri Kansas Pipe

New

Remington Arms

MINNESOTA & ONTARIO PAPER

Common

Birmingham Elec. 6%

Cyanamid Pfd. 3

Botany Pfd. & Common

DREDGING

BUL0L0 GOLD

United Cigar Whelan

Members

Thursday, March 9, 1944

CHRONICLE

4-7900

1-1790

Security Dealers

Ass'n

TRADING MARKETS
©

T. J.
Members

INFORMATION

•

FEIBLEIVIAN & CO.
New

41 Broad

Orleans Stock Exchange

Street

BOwling Green

9-4433

New York 4
Tele. NY 1-493

Volume 159
The

Reg.
■<

•

■

CHRONICLE

t;.

'"l

■"

'•

j'- ,'

;■

•

•*:

;

Y Y
Publishers yyYy- •YIYY^Y

BEekman

•

William

Punta

Thursday

every

and

advertising

and every

Vertientes

issue)

Members

135. S.

Salle

St.,
Chicago 3, 111. (Telephone: State 0613),
In
charge of Fred H. Gray, Western
Representative:
1
Drapers'
Gardens,
London, E. C., England, c/o Edwards &

Reentered

by William B.

New

Security

York

New York Phone

DIgby 4-8640

Dana

yr.

NOTE—On account of the fluctuations

CERTIFICATES

be made in New

N. Y. Title & Mortgage
All local Title

York

Newburger, Loeb & Co.

Members

Stock

York

New

WHitehall 4-6330II

MOWallSt., N.T. 5
Bell

Exchange

1-2033

Teletype HT

the caption, "A Post-War Tax Program,"

of Feb. 10, Dr. Harley L. Lutz,

Professor of Public Finance, Princeton University, suggested a pro¬

gram for allocation of tax sources between the
government—Federal, State and local—which, in

various .levels of
his' opinion, "ap¬

to offer the maximum possibilities of automatic restraint upon
A number
of letters have been received commenting on Mr, Lutz's article and
pears

the abuse and the destructive use of the taxing power."

be accommodated in this issue are given

HON. WILLIAM LEMKE

very

accord

Dr.

with

invitation

comment

much,
fact, that I
squib in
cent
in

a re¬

magazine

which

wife

called

husband

e r

ing

only
guest at a
dinner
party
without a post¬
war plan.

the

and

tax

vidual

tax

re¬

pe¬

riod from dif¬

gross

indi¬
much

nomic

if the tax eat-

person

variations in eco¬
activity than are the taxes
business and individual .net

the

tape

and

ment
Lemke

rules and reg¬

ulations imposed upon an already

complicated system by the Treas¬
ury Department.
People in the lower brackets

By
tax

the

token,

same

revenue

obtainable

the

total

by such

method

rate is sufficient to raise necessary

important tax it would be op¬
pressive to the lowest income
group. This is academic. It would
tend to raise prices of the retailer
in essential living commodities.

Under

competent to comply with all the

paragraph 3, Mr. Lutz
states:
"The present Federal tax
system has 'frozen' the economic

red tape and rules in making out

order at

tax returns.

velopment."

ill-afford

can

employ

experts

its

duration?

May I also suggest to Dr. Lutz
that

just

important

tax system, to sim¬

revamp. pur

plify tax reports and returns and
to

cut

that

the

out

invent

new

important to
system

idle

bureaucrats

ideas,

revamp

our

Governmental

entire
expen¬

is not

current

tures.

to cut out the

•

red tape

Yy"":"";

Mo.-Kansas "A"
.

Why

We will be lucky if it

greatly shrunk

much less "frozen."

depleted,

The alterna¬

tive might

well be military and
Just enough tax to
the
chronic
golddigger
would be always, to the war ef¬
utter defeat!

satisfy

fort, "too little and too late." '
I

means

income

not

sure

what

Mr.

Lutz

(Continued

J.F.Reilly&Co.
Members
New

Ill

York

Security

Dealers

Assn.

Broadway, New York, N, Y.
REctor 2-5288

Bell System Teletype, N. Y. 1-2480

before

Financial Man¬

agement of the American Manage¬
ment
Association at the
Hotel

York Gity, on
March 1, 1944, and read, in Mr.
Randolph E.
Paul's absence, by Gordon Keith,
surprising that we Treasury representative.
(Continued on page 1010)
solutions. The sub-

TRADING MARKETS

Stromberg-Carlson
Gisholt Machine Co.

Bartgis Brothers
Haloid Co.

effort

'If

170 Broadway
Bell System

be wise to

When that bill

Act.

was

in the

legislative hopper, hearings

held to determine its soundness.

COrtlandt 7-6190
Teletype NY 1-84

Eastern Sugar Associates

legerdemain ha^/been used in this effort
the real issue, to muddy the waters, that it would
look to the record for the purpose of determining

Haytian Corporation
Punta Alegre Sugar

why the attempt is being made to draw this distinction.
As is generally known, the National Association of
Securities Dealers is a creature of the so-called Maloney
were

^5%
rule, but is an

So much oral
to becloud

Est. 1926

nmiOD&lo.m

security dealers that the NASD

convince

going the rounds in an

spread philosophy," in and of itself, is not a
interpretation of an existing rule,
i

demonstrate

the

apprehension that the intended

legislation might create a monopoly and should be trimmed
to conform to the "general policy of our form of govern(Continued

on page

1012)

t!*|j

Vertientes-Camaguey

DUNNE SCO.
Members New York Security Dealers Assn.

Broad St.,

New York 4, N. Y.

Tel. WHitehall 3-0272

989)

SecuAitiel '

American Cable

Beryllium Corp.

pacific Qocit

"Beryllium is to

and Radio

copper

what carbon is to steel"

Warrants

Inquiries invited

by his phrase "progressive
tax"

•

stage of de¬
not—for the

"progressive tax
system." If he means larger rates
in expenditures and to cut out
progressively from year to year,
waste, graft and inefficiency in it is one thing; if he means larger
Connection with public expendi¬ rates for larger unit incomes, <it is
ditures,

Wickwire

New Yorker, New

Considerable twaddle has been

during a period of low
can
question economic activity (depression)
the necessity would be
inadequate to meet es¬
of a thorough sential
public requirements.
revamping of
Also, it is well known that a
our entire tax
sales tax has many objectionable
system and a and bad features.
It is the baby
total
abolish¬
of the ultra-wealthy, and if the
red

has

NASD "5% Spread Philosophy"
—Rule Or Interpretation?

er^fcere-play- incomes, ..."
ing the game
of graft.

direc¬

delivered

address

*An

the

transition
ferent

Frankfurter

Justice

the Conference

ing tax prob¬

less affected by

most

would

incomes

tion that it al¬
as

Teletype NY 1-1203

Du Mont Laboratories

paragraph 1 he states, under
"Productivity": "The general sales

and

duplica¬

New York 6, N. Y.

much red tape

seems

39 Broadway
^

10 issue of the "Chronicle."

INC.
Members New York Security Dealers Assn.

Mr.

tions, it is not

There

Mr.

wisely remarked that "the right
answer
depends on putting the
right question."
On the kind of
question before us this morning*
I would go the learned Justice
one better. I believe that the right

the

offer different

intelligence.

Information

in ideas.

to task for be¬

Program," appearing in the Feb.

one's

SOLD ■QUOTED

J. GOLDWATER S CO.

ject calls for light from every an¬
gle. The best solution will be the
one that gains acceptance in the
competition of the
intellectual
market after a vigorous free trade

only outrageous but almost an in¬
sult

days about post-war problems and programs.

reminded of

not

are

BOUGHT

Complete. Statistical

print of an article by Harley L.
Lutz entitled, "A Post-War Tax!

nation

CERTIFICATES

Transition Period."

lems

This letter is in response to your

Lutz's intimation that the present

Wm.

New York

WHitehall 4-6551

glad to participate in the opening session of this meet¬

Stempf and I
are approach¬

Houston, Texas

sentatives from North Dakota

Hon.

Wall Street,
Telephone:

TITLE COMPANY

ing of the American Management Association. And I speak for the
Treasury when I say that it appreciates this opportunity to present
its views along with those of industry on "Taxation Problems of the

Since

herewith:

J. FRANK SMITH

Member of the House of Repre¬

Securities Dept.

General Counsel of the Treasury

funds.

article bearing

our

bonds.

and

By RANDOLPH E. PAUL*

which appeared in the "Chronicle"

lot of brokers

Pennypacker 0300

Prevent Abuse

Companies

Harley Lutz's Suggested Post-War
Tax Program Subject Of Discussion

laws

stocks

HAnover 2-8970

We hear much these

tax

Re-employment, and Circumscribe Tax Deductibility To

Co.

full

.Philadelphia Phone

Reconversion Losses—Prefers These Provisions To The

Lawyers Mortgage Co.

foreign subscriptions and advertisements

STREET

they get our bids

Obsolete

Setting Up Of Specific Reserves—-Holds Government
Should See That Tax Remissions Should Be Related To

Issued by

In the rate of exchange, remittances for

WALNUT

PHILADELPHIA

Bought-—-Sold—-Quoted

Monthly Earnings Record—Mth.. .$20

Quoted

Treasury Department Official Sees Advantages In The
Carry-Back Provisions Of The Tax Laws To Cover

MORTGAGE

Company

Other Publications

can

Obsolete

The Transition Period

Harrison 2075
Teletype CO 129

Bank and Quotation Record—Mth. $20 yr.

those that

—

the way

when

Teletype NY 1-832. 834

Subscriptions in United States and
Possessions, $26.00 per year; in Dominion
of Canada, $27.50 per year; South and
Central
America,
Spain, Mexico and
Cuba, $29.50 per year; Great Britain,
Continental Europe (except Spain), Asia,
Australia and Africa, $31.00 per year.

feel

Taxation Problems Of

Dealers Ass'n

8, 1879.

Sold

—

1528

REctor 2-0790

Board of Trade Bldg.
CHICAGO 4

Broadway

NEW YORK 4

ruary 25, 1942, at the post office at New
York, N. Y„ under the Act of March

must

That's

Yarxall & Co.

Camag'y

second-class matter Feb¬

"like finding money''

1973

Due August 1, 1968

Bought

Smith.

STRAUSS BROS.

(complete statistical issue—market quo¬
records,
corporation,
banking,
news, etc.),
*

tation

Offices:

and company

Monday

Clearings, state and city
Other

Alegre Sugar

week

4 LiCHTtnsTtir

1, 1975 65

COMMONWEALTH OF PENNSYLVANIA
TURNPIKE REVENUE 3%% BONDS

Seiberling Rubber

Manager

Thursday, March 9, 1944

news

1, 1975 62 and Jan.

Due August

Business

Published twice

(general

Jan.

REFUNDING BRIDGE 2.70% BONDS

Chicago Rwy. Equip.

Seibert, President

Riggs,

DELAWARE RIVER JOINT COMMISSION

Oxford Paper

Editor and Publisher

Dana

3-3341

Herbert D. Seibert,

William

•

■.

•...

25 Spruce Street, New York 8

987

CITY OF PHILADELPHIA BONDS

Rockwood & Co.

Patent Office

U. S.
■

William B. Dana Company
;

CHROKICLE

COMMERCIAL and

FINANCIAL
■'*:

THE COMMERCIAL & FINANCIAL

Number 4262

Wyeth

Co.

•Since 1893'

Hon, Rose STrsster
Established

NEW YORK

LOS ANGELES

Members Los Angelts Stock Exchange

1914

Members N, Y. Security Dealers Assn.

Trinity Place, New York 6, N. Y.
Telephone:
Teletype:
BOwling Green 9-7400
NY 1-375

C. E. Unterberg & Co.
Members New York Security Dealers Asj».

Broadway, New York 6, N. Y,

Telephone BOwling Green 9-356S
Teletype NY 1-1666

THE

Moore
We

interested in offerings of

are

-Waiid&CO.

Public Utility

BOSTON

Appointed By

N.Y. Bankers Ass'n

High Grade

ACTUAL TRADING

Thursday, March 9, 1944

COMMERCIAL & FINANCIAL CHRONICLE

Art Metal Construction'

and Industrial

preferred stocks

tary

MARKETS

the

;

United Elastic

Spencer Trask & Co.

& Stpd. Pfds

Steel

Wickwire Spencer

25 Broad Street* New

Alegre Sugar

Punta

Telephone HAnover

& Pfd.

Moxie Com.

United Stockyards Preferred

Association
been

has

York Stock Exchange

Moore,

vote

will

de-

his

Asso-

has

Light & Railways (w.i.)

United

Polaroid

Hartford Empire Co.

been

state

Capitol

,«,

Since

Maryland Casualty
*Long Bell Lumber

Quoted

Goodbody &

Loft Candy

Wbelan

Members N. Y, Stock

*Haskelite

115

Exchange and Other

BARCLAY

7-0100'

ftifl

em-

MWMm

1925. As

Donald

Moore

ST.

TELETYPE NY 1-672

Auto Ordnance

Muench

who

Working
9

was

Radio

Emerson

Co,
Distilling

Farms

♦Merchants

Instrument

♦General
Botany

PUBLIC UTILITY

Worsted "A" and Pfd,
Lumber Mills
Explosives
Manufacturing

♦Southwest

American

Triumph
Pollak

Lanova Corp.

Auto Car

Arms

Remington

American Export Airlines
Standard Coated Prod.
Eastern Corp.
Magazine Repeating Razor
♦Great American Industries

elected secre¬

Northern States Power

Majestic Radio

J'£:"

♦Mid-Continent

Airlines

Fine Spin.
National Airlines

Berkshire

Airlines

Northeast

Aircraft

Northrop

Camaguey
Aircraft

Rohr

Bought

—

Home Appliances

Bendix

Haloid

—

♦Richardson

148 State St., Boston, Mass.

Chicago

Harvill Corp., • ■ ' '
Tokheim Oil Tank & Pump ;

Dearborn

Consolidated

Gas

Derby

To Hear

PHILADELPHIA

We maintain markets in:

' '

Div. Arr. and Com,
& Power
Electric-& Tel. v
Southwest Pub. Serv.
N. E. Pub. Serv. $6 & $7 Pfd.
Gas

♦Central

Light & Power

& Power Pfd.
American Utility Service Pfd.
Cons. Elec. & Gas Pfd.
Iowa Southern Util. Com.
Nassau & Suffolk Ltg. Pfd.

Light

Peoples

Melno

Washington G.

Boston

Milwaukee

■

Minneapolis

Folger Sees Need Of Confidence In Country's
Future To Encourage Venture Capital
Cites Competitive Bidding And Private
New Issues As Detriments

3.00

Request

Members Philadelphia Stock

Exchange

Members New York Stock Exchange
1529
;v

Philadelphia.2». Pa.

Walnut St.,

Bell Teletype

Phila. RIT 4488

—

PH 265

N. Y. WH 3-7253

ST. LOUIS

Interesting Utility

Light
2.75 and 3.00 preferred offer an
interest ing"Sttuation- according to
;a
memorandum
prepared
by
Buckley Brothers, 1529 Walnut
Street/ Philadelphia, Pa., mem¬

and

2.75

f' American Cities Power &

bers of the New York

L0NCLBELL

LUMBER

and Phila¬

delphia Stock Exchanges.

Copies

of this memorandum may

be had

from the firm upon

BOUGHT

—

SOLD

—*

QUOTED

request.

Placement Of
-

'eltason, Tenenbaum, Inc.
803

Landreth Bldg.

ST. LOUIS 2, MO.

Queensboro Gas & Elec. Pfd.
Puget Sound Pr. & Lt.
♦Mass. Power & Lt. $2 Pfd.
United Lt. & Rys. W. 1.

Inland Power &

New York

& Light

J Power

Friday,

utility securities under the leadersship jOf Ev Ralph Sterling of Mer¬
rill, Lynch,
"Pierce,: Fenner &
Beane. The meeting will be held
at 56 Broad Street, at 12:30 p.m.

; ' ;

Illinois Power

Amer.

Conn.

Company

-Incorporated.-

259

HAnover 2-7914

N. Y. Telephone

March 10, at the
regular luncheon meeting of the
New York Society of Security
Analysts, Inc., there • will be a
round table discussion of the mar¬
ket outlook for various classes of

Sold— Quoted

♦Metal & Thermit

request

1937, Graduate School of

Banking, Rutgers University, and
is a former director of the Amer¬
ican Institute of Banking, Buffalo.

AC.AIXYN-™COMEANY

8.00
4.49

price 8 Vi

Tel. CAP. 0425 : ? Teletype BS

Sugar

Vicana

Warner & Swasey

—____

American Cities

Pennsylvania Edison Company 1
Peoples Light and Power Company
Public Service Company pf Indiana, Inc.
Sioux City Gas and Electric Company
Southwestern Public Service Company

& Power
:,y c
Sugar

Petroleum Heat
Vertientes

class of

N. Y. Analysts

Missouri Utilities Company

Aircraft

♦Kellett

Corporation

and Light Company
Black Hills Power and Light Company
Central Power and Light Company ,
Minnesota Power and Light Company

Utilities Service

Arkansas Power

Pfd.

Hearst

PREFERRED STOCKS

Capital

Earn.ngs

Analytical discussion

Arden

Mos.

-Recent

tary of the association on Feb. 1,
after Harold J. Marshall had re¬

signed to become an officer in the
Bankers Trust Company.
Mr. Moore is a member of: the

Carlson

Stromberg

_L__$16.35

Equity

sec¬

Bankers Asso¬
ciation^; he will alternate " be¬
tween the association's New York
City headquarters and field work
among the 600 upstate commercial
banks.
He succeeds Albert ' L.

CHICAGO

NEW YORK
TELEPHONE

Principal Exchanges

105 WEST ADAMS

BROADWAY

Teletype BS 424

•

retary of the State

Co.

MASS.

4330

banks

assistant

Bought - Sold

$hawmut Bank Building
BOSTON

ployed in up-

Consolidated Textile

work,

.ciation

full

time

Crowell-Collier Pub. Co.

Mr.

■

who

United Cigar

jjf

dent.

Laboratories "A"
*CroweII Collier Pub.

££

presi-

sten,

*Du Mont

Mallory

§V

Ger-

Chester

Mokan "A"

*P. R.

an-

nounced by E.

•

Teletype NY 1-5

2-4300

Members New

& Trust

Title Guarantee

York

Corporation

State Bankers

Bos. & Me. Prior

Securities Co.

Remington Arms Co.,VV;

York

New

Christiana

Bird & Son

appointment of Donald A.
Moore, secretary-treasurer pf the
Ontario County Trust Company,
Canandaigua, as assistant;'secre¬
The

L. D. 240

Teletype—-SL 486

Light 6s
& E. 6s 1960

Indiana Limestone

6/52

Vis
Issues
All Issues
Hydro Elec. 6s, 1944

Central

Public Utilities 5

Associated Gas & Elec.

Chicago Tractions,
Int.

SAINT LOUIS
/

Paul Adj. 5s

Milw. & St.

Chic.,

Central
Frisco

4s,

Teletype*—SL 80

4s,

009 OUVE ST.

System

5Vis, 5Vis
of N. J. 4s, 5s

Pac.

Missouri

Bell

4Vis, 5s

Chicago," N. <W. 4%s
& Ohio 4Vis,

Baltimore

Morris

Essex 4Vis

Boston

Maine

Bid.

Westinghouse
870

Ave.

Seventh

Park

4Vis,

Ave.

Members St. Louis

1970

4s, 1948
4Vis, 1957

Equitable Office Bid. 5s, 1952
165 Broadway 4'/is, 1958

Phone

::££

wire orders at

our

expense

*Circular

Request

Warm & Co
Members N. Y. Security Dealers Assn.
120

Broadway, N. Y.

REctor 2-8700

E«laW:*hed
Teletype NY 1-1288

Direct Wires to
BOSTON

—

HARTFORD

-r

PHILA.

Stock Exchange

Volume

THE COMMERCIAL & FINANCIAL CHRONICLE

Number 4262

159

PROVINCE OF ALBERTA BONDS

Experienced Trader

A Canadian

Desires position with
Stock

years

where

put to
Box

knowledge

good

Commercial

VU%

return¬

half-interest

rates

speculative possibilities.

HODSON & COMPANY,

Circular

can

2%%

with attractive

Inc.

INTERNATIONAL

request

ft/lft'-ft:

CHARLES KING & CO.

Draft exempt.

use.

The

B4.

Bank

Exchange house in

trading 'capacity

provincial bond currently

ing

Available
.V

989

Members

Toronto

Stock

POWER & PAPER

Exchange

Common

Financial Chronicle, 25 Spruce

165 Broadway,

Broadway, N. Y.

New York

WHitehall 4-8980

Teletype

St., New York 8, N. Y.
i

1-142

HART SMITH & CO.

.Specializing In Canadian Bonds & Stocks

WILLIAM St,, N, Y. 5

;NASD "5% Spread Philosophy"
--Rule Oi

•
,

ment," we
11, 1938:

J
•'

■ft

to the plain fact that under the law
the SEC has the power to revoke a rule of the National Asso¬
up

ft: Now comes the "5% spread philosophy" foisted

Boren.

strikes

the fundamentals

By circumlocution, this
avoided, and the power of the SEC to revoke

not

finding fault with the provisions necessarily,
Commission is recognizing in

no
question amongst men of
"5% spread philosophy" constitutes a rule.
By the very instructions of the NASD's Board of Governors,
the Business Conduct Committees are ordered to
apply that
rule as a measure in
judging guilt in disciplinary proceed¬
ings.* We believe that the SEC, jealous of its jurisdiction,
will not permit the mumbo-jumbo of
evasion, to prevent
the recognition of its plain
duty to abrogate this rule, be¬
cause it was
illegally arrived at, and primarily because it
constitutes a dangerous threat against our democratic way

to me. that the

seems

reason

large has refused during
the last 50 years to recognize, that capitalism, as an
ft' individual capitalistic system, no ? longer exists in this
country, and that we are rather dependent, so far as secure
ity even as individuals, is concerned, upon a corporate
system.
So your obligations are so great that I want to be
certain, in passing over this Actftthat ;the sfecu^ty a^
safety of the individual within thd corporate action is ort
a basis of equality comparable to the general philosophy
of our form of government."
In thege-Xtuotations, two thoughts stand out.
Speaking
of the individuals composing^tftrrneffibersta
tance is emphasized of "protecting that member in his
rights"; and it is stressed that each individual be "on a
basis of equality comparable to the general philosophy of
1 our form of government."
These two themes are inT
herent in the legislation which gave rise to the NASD.
< ;
Our lawmakers recognized that an association created
with powers and special privileges such as those enjoyed
by the NASD, powers and privileges ftfyich would compel
many to join against their very will-rsuch an association
required curbing and the setting up of safeguards against
/the, abuse of these powers and privileges'/ft.
:
We shall not here and now attempt an analysis to deter^
mine the adequacy of the safeguards set up in the Maloney
Act, but let us examine the one dealing with the making
..

that the

of life.

Frederic H. Hatch & Co.
Incorporated
63 Wall Street

Bell

New York 5,

Teletype NY

ftftft/ftftWE BUY

WITH

Coupons Missing
■■ftftft -ft/ft:

a gross mark-up basis of not
5%, with the exception of certain low priced securi¬
ties, such as those' selling below $10, when a somewhat

higher percentage may sometimes be justified.
The normal interpretation of this would be that
gross
mark-ups of more than 5 % on securities selling above $10
is

GUDE, WlNMILL & Co.
Members New York Stock

York 5, N. Y.

'ft,'

Teletype NY 1-955

DIgby 4-70(50

Great American Industries

Franklin Shops
•

Common & Pfd,;

F.H. KOLLER & COMPANY
■

INC.

Broadway, New York 6, N. Y.

Ill

are

Board

Governors to determine what

constitutes

fair

trade practice.

Interesting JJtility
The expected filing of a recap¬
italization by United Gas Corpor¬

ation with the SEC should have

beneficial

effect

upon

Electric

Power and Light first preferred
stocks, and possibly on the second
preferred according to a study of
the

situation

prepared
by Ira
Haupt & Co.; Ill Broadway, New

•

York

Situation of Interest
The

$2.50

preferred

stock

Co., 41 Broad Street,
City, who have just
issued a circular, describing the
situation.
Copies of this circular
may be *had from the firm upori
New

York

'ft

request,

Incorporated, of¬
interesting situation ac¬
to a circular being dis¬
tributed by William A. Fuller &
an

cording

Co., 209 South La Salle Street,
Chicago,. 111. Copies may be had
from

the

firm

request,

upon

EXCEPTIONAL

OPPORTUNITY

For

two

TRADER
Well-established New York

West,

of I
firm

is seeking services of

Schenley Distillers Corporation

in the administration of its affairs
-

otherwise to protect

have prepared an attractive book¬
let
containing
the
first
arti¬

the

Give

:■

trader.

Excellent

draft

opportunity for light

man.

when

large,
outside

business.

securities

age,

full

firm

status

particulars

and

including

available, in confidence.

cles in the series they have been

running in the "Financial Chron¬
icle."
be

Copies of this booklet may

had

upon

request by

to Mark Merit,- in care

ley

Distillers

writing

of Schen¬

Corporation,

350

investors or effectuate the purposes of this title."-! ftftft;';ft Fifth Avenue, New'York 1, N. Y.

•

reliable

with

West,

well-established

ac¬

Middle

East,

quaintance

with dealer

men

and other

■

•

Goldblatt Bros.,

fers

may

Ci^y, members of the New

Stock Exchange,

be registered unless "the rights of national; ^Xch&nges.; Copies of this
the association; assure a fair: representation of its members study 'niayr be had: upon request
in the adoption of any rule o|f the association, or amendment from Ira Haupt & Co;'- ftft ft "
thereto.^^^
-!:iti!::
■ fftiftftft
Aykilable On Request
Finally, ' ,.
.
'
1'
■

NY 1-1026

BArclay 7-0570

means that Business Conduct Commit¬ Okla.-Tex. Trust Attractive
The current situation in Okla.being coerced into changing trade custom. This
entirely aside from the valid objections that: could be Texas Trust offers interesting
jpossibilities according to T. J.
raised with respect to the means and methods Used
by the Feibleman &

ftft poration or association, with all amendments thereto, and
-ft of its existing by-laws, and of any rules or instruments
•
corresponding to the foregoing,/ whatever the name,
hereinafter in this title collectively referred to as the 'rules
| of the association.'" "
"' '
ft
;

"•

Exchange

1 Wall St., New

prohibited. This

tees

"The Commission is authorized by order to abrogate
any rule of a registered securities'association, if after
appropriate notice and opportunity for hearing, it appears
to the Commission that such abrogation * is necessary or
appropriate to assure fair dealing by the members of such
association, to assure a fair representation of its members

ft'ftftft/.ft

•

over

ft,'ftft;

iftft

■

BONDS

These instructions outlined in the letter of Oct.
25, 1943,
that Business Cohdubt Committees should pnfnripp

survey were consummated on

N. Y.

1-897

Rules;of Fair Practice? hav¬
ing in mind that 71% of the transactions covered by their

The law provides that an association may be registered
under the Maloney Act by, among other things, filing with
the Securities and Exchange Commission
1
V
"Copies of its constitution, charter, or articles of incor-

•ft'ft No association

Universal Match

^Secti^J of A^idlflll Of the

•ft-ft

Penn, Bankshares & Sec. Pfd.

said

Ohio Match

there is open rebellion?
We believe there can be

this Act what the country at

Cyanamid, Pfd.

Lawrence Portland Cement

have meant its inevitable defeat.

our

of rules.

Toronto

Eastern Sugar Associates, Com.

members.

security.
am

S American

As to certain very

places an proceeding was
obligation on the Commission to carry. out that funda¬ was left open to debate.
This un-American attempt to place
mental, in that it becomes your obligation, if you set up
a 4 ceiling
on
:•
this corporate body, to absolutely assure equal rights to "spreads," this/modification of custom and the
regular
ft each corporate member, especially if you are giving them course of business which could ordinarily be accomplished
such a power as will more or less compel the individual only by the
Legislature, has been foisted upon the security
to turn to the corporation for his future operation and dealers by an ultra vires fiat.
Is there any wonder that
I

'ft

1-395

American philosophy of government; I mean, it

but it

HAnover 2-0980

Montreal

upon

the

•

Mr.

Teletype NY

■

Inteipietation?

In its communication of Oct. 25,
important types
1943, to the member¬
of the securities business, it is true, I think, that one could ship, and in its instructions of Nov.
9, 1943, to the Business
not operate successfully outside of this Association, if the Conduct Committees, the
%5% spread'' is cagily referred
association gets organized on the scale that this bill visual¬ to as a "philosophy," and as an "interpretation" of an exist¬
izes.
But it does emphasize the importance of being cer- ing rule.
Let jio one be so naive as to believe that these
tain that the right to this association to act in such a way characterizations were accidental. To have dubbed this inno¬
as to injure
any of its mefnfoers without fully protecting vation a rule would in the first place have made is compul¬
that member in his rights,; is very carefully guarded.
sory to submit it to the members for their vote.
That would

Bell

New York

ciation of Securities Dealers.

membership of the NASD by its Board of Governors,
(Continued from page 987)
contrary to the provision of its own constitution, which
quote in part from the hearing held on April requires that a rule be submitted to the franchise of all the

"Mr. Matthews.

"ft;; All this adds

Box
The

II 38

Commercial

Box

Financial
The

Chronicle,

New York, N. Y.

S 925

Commercial

Spruce St.

and

Financial

Chronicle
25

Spruce

St.,

New

York

Thursday, March 9, 1944

COMMERCIAL & FINANCIAL CHRONICLE

THE

990

N. Y. Stock Exchange

Exchange
announced the following firm

The New York Stock
has

REAL ESTATE

Since

partnership in Lazard Freres &
Co., New York City, on Feb. 29.
Thomas Lynch, general partner
in
Moore,
Leonard &
Lynch,
Pittsburgh, Pa., became a limited

1929

SECURITIES
★

★

Slock Exchange
York Curb Exchange

Members New York
Members New

I. Granger had
retired from partnership in Sulzbacher, Granger & Co., New York

Association

HAnover 2-2100

York 4

Eastern War Time

Direct private wires

City

Schwabacher & Go;

Feb. 29.
...

Interested In Buying

-v..,",;'.

* :,/i

-M-yt

•..>

ALL

Bull Market Of The Rails Be Duplicated
By Real Estate Bonds?
July 30, 1943, in this column, the writer made the following
statement: "The coming boom should be in Real Estate Bonds."
.?
Current prices compared with prices of that day h^ve justified
the prediction.
Considering the low dollar prices of the securities,

Stocks

AND

TUDOR CITY UNITS

price

the rise in

•*

price

N. Y.

NEW YORK 6,

WOrth 2-O5I0

•

end

crease

Equitable Ofc; Bldg. 5s
40 Wall Street

Hotel 3-6s

Savoy Plaza

3l/2~5s

61 Broadway
Other Issues

Traded

.,-.

J Arthur Warner & Co.
.

120 Broadway,

New York 5, N. Y:

Teletype NY 1-1950

Cprtlondt 7-9400

12 months ended
showed a 37% in¬
income, amounting to

for the
Dec. 31, 1943,

Real Estate Bonds

wires

Francisco

Sacramento

Oakland

Fresno

Santa Barbara

Monterey

esting speculative possibilities ac¬

circular issued by
Co., 61 Broadway,
New York City.
Copies of this
circular may be had upon request
from Charles King & Co.
cording

Charles King &

Tomorrow's Markets

Walter Whyte

Says—

The Post-War Pattern

Netherland Hotel: Re¬

Sherry

port

San

Remains Puzzling

few hotels:

Trading Markets:

Private

Alberta Bonds, a
provincial bond cur¬
of

rently returning 2%% to 3%% at
half-interest rates, offers inter¬

that

example we cite yearcondensed statements of a

CO. 7-4150)

still be more room

securities.

BROADWAY

for3>
appreciation of the various

there may

CORP.

SECURITIES

percentage-wise has been quite large.
have had a tremendous rise, indicating

Earnings, likewise,

TIPTON

C, H.

Canadian

Will The

vjVn1

■

FRED F. FRENCH

Province

Members New York Stock Exchange

14 Wall St., N. Y» 5

Speculation

Attractive

leal Estate Securities
We Are

10 A.M, to 5:30 P.M.

The late Myron

NY 1-953

Bell Teletype

Broad Street, New

York Security Dealers

New

Members

Dlgby 4-4950

PL., N .Y.

40 EXCHANGE

Open from

effective

firm

the

Exchange

March 1.

Incorporated

partner

Lubetkin & Co.

Seligman,

SHASKAN & CO.

Stock

from

A. Jackson retired

James

Securities

Real Estate

MARKETS IN

TRADING

San Francisco

changes:
V

Orders executed

Weekly Firm Changes

SPECIALISTS

both

Continued gap between
averages a

potential danger-

Volume
break-through
on
Although few are in a mood these days to predict just when the
either side would point to
will end, each month that goes by brings us that much nearer
immediate direction — What
to victory and peace.
\
'
Six months ago one heard on every side that the European War
buying'is done should be at
would end in late 1943 or early 1944 and the Japanese War a year
wars

$1,211,074.20,
compared
with
$885,173.98
the
preceding
12 or so later. • Currently, no one is in a mood for guessing, and our specific prices
months.
Profit after taxes and
By WALTER WHYTE
amazing progress in the Pacificv.. ...
:1
■ V....V
■ ■
insurance
increased 430% from
conceivably may indicate that the to ward off the recurrence of the
$47,194.44 to $252,967.22 in face
The past seven stock mar¬
Japs will be the first to collapse; tragedies of the last depression.
of an increase in payroll amount¬
However,
those who predict ket
But regardless of when the war?
days have shown little
ing to $67,154.25.
Net earnings are to end, the post-war pattern price inflation and at the same
more
than
the
preceding
permitted operation of a sinking remains
just as unclear as ever, time doubt the maintainarice of
fund in • addition to payment of
Based on the over¬
not one bit clearer as a matter of full employment are talking, it weeks.
3 y% % interest.
Its first mortgage fact than heretofore although we seems to us, in contradictory all action of the industrial
bonds are
currently quoted 42
terms.
• The
two can hardly be
are in the 27th month of the wars.
averages, since the present
bid, offered at 43.
The one encouraging phase that paired. Dr. Alvin H. Hansen cov¬
dullness set in, there is only
Hotel (Lexington: Report for the
ered.this point we thought rather
ha? developed rapidly and broadly
12 months ending Dec. 31, 1943,
adequately some years ago when one conclusion to make:' a
is the nation's determination to
showed a 36% increase in income,
he/wrote:
"'
status quo for another two
try to sustain a high level of na¬
"The fact is. that no price in¬
amounting to $2,809,982.83 com¬
tional income and to prevent; un4
weeks.; This is hardly electri-;
pared with $2,066,807.89 in 1942
flation is possible so long as vast
employment * from
becoming
Net profit available for interest
unemployment resources of men fying news,, but markets are
serious social and economic prob¬
and sinking fund purposes during
One week they, are
and machines can be drawn upon like that.
lem. ; On this point the entire na¬
1943
was
$499,452.72, i against
to
produce
an
ever-increasing full of down signals that can
tion is in agreement.
$333,519.65 in 1942 and $187,982.23
output of goods and services. So
be followed with, profit.
The
And this represents substantial
in 1941.
As a result of sinking
long ;/ as
there are unused: re¬
next week they; are just as
progress, for it wasn't many dec¬
fund
operations,
which began
sources, every increase in demand
August, 1942, 17.44% of the cor¬ ades ago that economic cycle? is matched by an-increase in sup¬ full of up signals which can
came
and went and unemployporation's funded debt was re¬
ply. „Thus any: incipient price rise
alsp-mean-money>
Bui-4re^
tired.
A t5tlliSf $680,20Q iiicunie rTnmt^was^iaken-fvTgmYtted^s^ is held in check. There can be no
•

Condemns Destructive
Taxes On Business
(Continued from first page)
be unable to provide
necessary employment for many.
It
is
important, therefore, that
^destructive taxes-on business en*
1

therefore,

by a

terprises be early supplanted

re¬

hotel

and

In commenting on the post-war
outlook, Mr. Codwin stated , that

$800 income bond, a $200
ture bond and
15 shares

Pictures

"Universal

already

projecting plans for post-war production and markets, both domes¬
tic and foreign.
We expect to be
in a sound position whenever the
ends

war

full peace¬
without delay.

resume

operations

time

Obviously, no one can predict the
course of business in the post-war

it is reasonable to assume
picture will continue as a major form of popular
entertainment
and increase
in

\ era, but

that the motion

usefulness as an

educational

dium."

Pictures

Universal

"!The

me¬
.

Com¬

the fiscal year ended
1943 reported a net .profit
after all charges and taxes of $3,for

pany

Oct. 30,

759,968
mon

952

$6.57 per share of com¬
with $2,806,$5.34 per share in the pre¬
or

stock, compared

ceding fiscal year.
.

Net working

capital increased from $14,229,423
to $16,094,903 in the same periodTaxes
paid
by
the
company

$10,100,447, equivalent
$17.66 for each share of com¬

amounts to
to

mon

stock outstanding.

Chicago Traction
Railroad

waukee

securities and
& Mil¬

Shore

North

offer

interest¬

ing possibilities according to a cir¬
cular containing a comprehensive
discussion

of the

situation issued

by Brailsford & Co., 208 South La
Salle Street, Chicago, 111.
Copies
of this

the

circular may be had from

firm

upon

request.

trade

were

unit

deben¬

of the
currently
quoted 77 bid, 79 asked.
Because
of stock issued in reorganization
to junior liens and a supply of
stock available because only the
bond portion of the units are ac¬
cepted by the sinking fund, there
is also a separate market for the
stock.
Earning $3.93 per share in
1943, the stock is currently quoted
The' units

stock.

are

part

unemployment

that

labor

must be

Government, capital

eliminated, there is little

Gros?

the last fiscal year
amounted to $2,500,164, compared
earnings
to

for

interest

bond

before

Net

previous year;

the

$1,761,345

was

$623,484, compared with $255,425,
or
12.47%, on the bonds, against
First

5.11%.

bonds

ahead of
at time of

mortgage

($750,000

reorganization) was further re¬
duced by a payment of $300,000
in
1943 and now only
$185,000
remains due.
Upon complete re¬
tirement

the

first

mortgage,

earnings permitting, the company
will be in a position to make full
4% interest payments on its bonds
addition to

operation of a

sinking fund and dividends on its
stock.
(Interest is restricted to
2% until such retirement.)
Each
bond carries two shares of voting

representing an equal
in 60% of the ownership of

trust stock
share

property, Its bonds are cur¬
rently
quoted
55 V2
bid, 57%
the

office build¬
ing or loft building rents, and
with the demand for space tono

ceiling

ployment, become general over a
considerable range of industry";
-We dwell on this phase of post¬

in our letter today be¬
in the post-war period that is pre¬ cause it .may aid the investor who
dictable.
One
can
argue;';with i§ /trying
mightily; to
guess
equal effectiveness that inflation what is ahead. And we think Dr.
or
deflation will accompany the Hansen's
point v has very
real
wars' termination.

onstrated similarly that

war years,

quently markets don't say
anything. To try to interpret
their silence into something

positive or dynamic can some¬
times be done.
But in most
cases such interpretations are
no
t

better than guesses.

V.?

;

indus¬
validity for, as? we see it, it is al¬
there will most impossible for a? price, infla¬ trials have to all intents and
Since Dec. 8 the Dow

be dem¬

can

mad rush for consumer

goods; tion to be accompanied by unemr
purposes
been stalemated.
ployment.
And even with full
advances during that
argument is made that the aver¬ employment we have some doubt Any
age American is going to hold on that a lasting price inflation will period were limited to rails
to his savings and his War Bonds be the nation's post-war lot when and a handful of specialties.1

equal effectiveness the

with

and

the

about

think

country's

gether with the current increases gigantic, and war-increased, pro¬
now
being put into "effect, the ductive; facilities and productive
writer looks for much better earn¬

ing reports and interest
for bonds secured by

payments

this/type of

genius.
It is all
car

well for motor¬
manufacturers to tell us that
very

;
following the war our automobiles
prices of various are going to cost 25% to 30% more.
hotel bonds since July 1,943 (when Perhaps this will be so for a very
we suggested "a coming boom in
brief time, but the competitive
Real
Estate
bonds")
and
the scramble for the market, our re¬

Increases

prices Monday of this-week are sources of skilled labor, our pro¬
as follows:
.
V:. , ',. *4 duction capacity and our pro¬
Price
Price
duction genius- will all be highly
Gain
3-6-44
Hotel—
7-30-43
22%
•+
6
important factors constantly oper¬
Beacon
16 %
+11%
55%
Gov.
Cllnton^_^_
4114
ating to distribute consumer goods
'

„

•

35 '
Central-—. 43%

Mayfair House
Park

Savoy

Plaza

24%
32%
53%

——

Sherry Netherland
St.

George

> 9

521/2.
49,1/2 V
42;

...

+
.

•."/v

"■

Bldg—

21%

Broadway

24%

29%

•>ni/4

an i/„

29%'

Trinity
1

Building..

Brosd™"*"

Broadway Barclay
Vva.l

Beaver—

34%

43%.

"■+'.
.

grade rail bonds, but a
stock

look at the rail common
average
been

will show there has '
progress in the

little

past week, w Given normal
times, a rising rail market
and a do-nothing industrial
market
would not be dis¬

But only the naive
normal

turbing.

■■

+••

times.

Speculative Possibilities
Consoli¬
of 1945 offer attractive

The Central of Georgia

dated

Since

last July

the indus¬

speculative possibilities according
to a memorandum on the situa-1

sion

>10%
+' 8
+

12%

ond

S-:.

Gain

begin¬

ning to crop up. So far these
seem to be limited to the sec¬

trials, starting, on their inter¬
mediate :? set-back,-: lost ; ap¬
tion issued by Otto Hirschmann.
Copies/of this interesting discus¬ proximately 13%.
The rails

'4, 'j

PnVp

7-30-43 3-6-44

Building—
Harriman

existing

are

would consider these

prices

lows:; ;

industrials,

6 %

of office
building bonds between the re¬
spective dates have been as fol¬
Increases

prices.—Ralph E. Sarhuel

signs of stale¬

mate,1 similar to that

9 »/2

•

at lower

& Co.

■,+ 25

In the former,

in the

real estate.

asked.

With

general price inflation until scar¬
city conditions, owing to full em¬

Clinton Hotel:

Governor

the

Apart from this agreement on
the

bid, 9V2 asked.

8,/2

Cgo. Traction Interesting
Chicago

debentures

and

bonds

program

•| ;

♦

down¬

-of

swings.

country."

concomitant

natural

which will tired, leaving $2,575,680 income
encourage dynamic business and bonds
and
$644,120 debentures
provide full employment in the outstanding.
Securities of the

constructive

quest

may

from

obtained upon re¬
Mr. Hirschmann at
25 Broad Street,

Halle & Stieglitz,

s%+New York City.

■-/.

«•'

declined about

subsequent
%
*

18%.

rally

In the

latter
;

the

(Continued on page 1013)
.t' 4■

»■

.»,»•>

'»• ?.»'»,

.Volume 159

THE COMMERCIAL & FINANCIAL CHRONICLE

Number 4262

991

Southern Traction 5's■
It is necessary to

2nd Ave. Traction 5's

Federal Street & Pleasant Valley

5's

give

than

Western Pacific

before

ever

Donate to the

Railway Co,

United Tractions 5*3

Fort Pitt Traction 5's
Bought

—

RED CROSS WAR DRIVE

J.F.Reilly&Co.
,;Member* '-New

■_

York:Security. Dealers.-Association.

111 Broadway
REctor

■

Bell

Members Newt

2-5288

System Teletype NY 1-2480

Foreign Dollar Bonds Must
Report To Treasury Regarding Holdings

Both the Federal Reserve Bank of New York and the New York

Stock Exchange have Issued notices calling attention of owners of
Foreign Dollar Bonds to the Treasury Department's advices relative
Form

TFR-500, as to which the Department has advised
preliminary review of the reports on the form, which per¬
required to file concerning their foreign

that

sons

in this country were

property, "indicates that some per-^
sons owning foreign dollar bonds
have

New ■ York 6

yet realized their ob¬

■

Railway Co.

Bell Teletype—NY 1-310

1st

Railroad Securities
%
to

Bought

The Delaware, Lackawanna & Western system has continued to.

dend payments on various of the leased line stocks have been re¬
strained by court order due to the: income tax status.
Lackawanna

contends, and has been upheld by the courts, that income taxes
that portion of the rental going^to pay dividends on leased line removed than

should

paid

the

earnings.

leased line and deducted from the

tential

dividends paid.

from effective

ever

It is true that the po¬

income

liabilities

tax

have contended that Lackawanna

than $1,000,000 a year will
be eliminated but this is of little

itself should pay the income taxes

Stock Exchange says:
f
"The Treasury has

have

Ernst&Co.
MEMBERS
New York

unaware

of the reporting

•

'by

reason

their

of the requirements.
"It is proposed that the distrib¬

coming

stated that
volume and

ution

aware

notices

pre¬

persons

the income due therefroip, United

senting coupons for collection be¬
holdings of foreign dollar gin at once and be continued long
an important place in
enough to include coupons due in
the financial
relations
between August of this year, so as to insure
this country and many foreign a coverage of a full half year's
countries. They comprise a large payments. Your assistance in dis¬
part; sometimes the larger part, tributing the notices will be great¬
of the total American-owned as¬ ly appreciated by the Treasury
sets in certain countries. Not only Department.
? "Although
the Treasury Department but also
the notice contem¬
States

bonds have

without
rental

The leased* lines

reduction in
the
The difficulty goes

any

paid.

back to 1933 and the income taxes

accrued, unpaid, since that
The entire claim, plus in¬
terest, is now indicated at well

time.

above

$8,000,000.
The logical solution is the ex¬
change of leased Tine stocks for
bonds, * whereby
income
taxes
would, be eliminated entirely re¬
gardless of whether the bonds
bore fixed or contingent interest.
So

far

vised

the

Lackawanna

has

de¬

State and
greatly interested

Departments

that the

plates

necessary

forms

plans

and

other

So.

LaSalle St., Chicago 4,

111.

MINNEAPOLIS &

ST. LOUIS RAILROAD
("Old" issues)

Minneapolis & St. Louis 5s 1934
Minneapolis & St. Louis 4s 1949
Minneapolis & St; Louis 5s 1962
Iowa

Central 5s

1938

Iowa

through
fixed
charges will be reduced to $5,844,662.
The Company would have
put

five of its failed to cover even these reduced
For Lacka¬ charges in four years of the de¬
wanna
Railroad of New Jersey, pression decade and for the ten
and instructions for reporting may
Commerce are
Utica, Chenango & Susquehanna, years
1931-1940
such
charges
in the results of the census as it be obtained from the appropriate
New,York, Lackawanna & West¬ would have been earned * on the
Federal Reserve Bank, there will,
relates to this field.'
ern and Moms & Essex the plans
average only 1.1 times.
The con¬
of course, be no objection to, any
"To assist in obtaining this im¬
provide part fixed and part con¬ tingent interest charges Contem¬
firm's assisting its customers to
portant information, the Treasury
tingent interest.
In the case of plated under the plans would be
obtain the requisite materials and
requests that a copy of the en¬
Valley Railroad an offer has been covered only in years of prosper¬
'
closed notice be given to each of prepare'reports.
made to purchase publicly held
ity.
This is particularly true in
"Member firms are requested to
stock at $79 a share.
your
customers for whom you
These five the case of the Morris & Essex
hold a foreign dollar bond in cus¬ pass this information on to their properties represent 91% of the and the Lackawanna
Railroad of
branch offices and correspondents
net annual leased line charges of New
tody or who brings to you for
Jersey, where it is specified
throughout the country,"
v
collection a coupon from such a
the system. The minor properties that
contingent interest is to rank
In its notice to owners of for¬
bond. Byjhis means it is hoped
remaining will probably mainly ^mor to contingent interest on
eign dollar bonds, the New York be offered an
to reach those bondholders who
opportunity to sell the New York, Lackawanna &
Federal Reserve Bank says:
the

231

If all of the plans so far promul¬
are

Exohange

120 Broadway, New York 5, N. Y.

appraising the poten¬
tial new earning power of the
property as the; tax was not ac¬
crued prior to 1941 in any event.
In general the exchange proposals
contemplate that the contingent
portion of the new interest shall
be applied to payment of accruals
of income taxes against the in¬
dividual property until half of the
accruals have been paid.
gated

Stock

leading Security and Commodity Exchs.

moment in

still

Sold —-Quoted

—

speculative interest based on the cumulative effort to
straighten out the leased line situation. For more than a year divi¬

ligation to report. As the Treas¬
requirements or have failed to un¬ ury Department indicated in" its
derstand that the exemptions from letter of Dec. 22, 1943, there is no
filing reports did not apply to such disposition to seek the application
of penalties against persons who
bonds."
1.
i
In its notice the ;New York file 'reports promptly upon be¬
are

4s, 1955

attract

stocks
not

Canada Atlantic

Exchange

Telephone—DIgby, 4-4933

■

Owners Of

York Stock

61 Broadway

Securities

(When Issued)

pflugfelder, baiv1pt0n & rust

;

New York, N. Y.

New

-fa

Sold

Central

1951

Des Moines

& Ft. Dodge 4s 1935

covering

largest leased lines.

Frederic H; Hatch & Co.
Incorporated
63 Wall Street
-Bell

New York 5,

N. Y.

Teletype NY 4-897

SEABOARD AIR LINE

Western.

REORGANIZATION
RAILROAD SECURITIES
WHEN ISSUED

Bought—Sold—-Quoted

Western Pacific R.R. Co.

Minneapolis, St. Paul &
Sault Ste. Marie Rwy Co.
Denver 8C Rio Grande

■port any foreign bonds payable in
U. S. dollars (including Canadian,

Latin. American and Philippine
issues) which you owned on May

31, 1943, regardless of their value.
The exemption of $10,000, pro¬
vided for most kinds of property

Trading Markets:
•'

•;..TTV//:

Chicago, Rock Island BC
Pacific Rwy Co.
v v

"•?;

V;-.

C. M. St. Paul 5s 75

Lehigh Vy. 4s 2003
Seaboard 4s-5s-6s

120

Broadway, New York

J. Arthur Warner& Co:
120

Telephone REctor 2'7340

Other Issues Traded

SutroBros.&Co.
•

burden

from
were

too

was

the

fact

high is obvious
that

deficits

net

sustained in every year from

1932 to

1939, inclusive. A worth¬
while; reduction in charges is only

Broodwoy, New York 5, N. Y.

COrtlandt 7-9400

Telelype NY 1-1950

While

the

the leased

line

clean

situation

tax

are

the Road is ob¬

nancial difficulties in

the

"UT

progress will
(presumably by
market purchase of bonds)

:///t;/T

$6,312,846 represented
rentals, with
only
$546,068 representing interest on
equipment, etc.
All in all, the plans so far pre¬
sented contemplate a reduction in
net fixed
rentals of $1,014,252.
This

line

before the Lackawanna will have
to

credit position.

reasonably

firm

The current situation in Fashion

Inc., offers attractive pos¬

Park,

sibilities according to
bleman

largely offset, however,
by the creation of contingent in¬
terest charges of $656,566.
The
net reduction in overall charges,

then, is. limited initially to $357,686 before any sinking funds or
capital funds to be established.
When, and if, the whole operation
is consummated the stock of the
lessee:will presumably be

New York

New

Situation Looks Good
South

W,
La

Fashion Park of Interest

tive circular issued

/-■/''.//

Interstate Aircraft

Fred

72 WALL STREET

NEW YORK 5

have to be made

returned

Van Tuyl & Abbe

visible

future, the plans in themselves do
not answer the problems of the

open

Leased Line Issues

viously not in any danger of fi¬

Far

and

efforts

constructive and

Road.

Specializing in

Underlying Mortgage

this amount

leased

B. & O. 4s 44

request:

Members T^ew T or\ Stoc\ Exchange

der a the/^Teases-rThatThe^fprmer

Railroad Bonds

Complete Arbitrage Propositions

posals Lackawanna has made an
effort to reduce its obligation un¬

reportable on the form, does not
apply to foreign dollar bonds. TT
possible,, through
lower
rental
"If you should have' reported
payments.
Net fixed charges in
but have not yet done so, your
1942 (eliminating rentals paid on
report must be filed immediately." securities
owned by Lackawanna
itself) amounted to $6,858,914. Of
•

Western R.R. Co.

RAILWAY COMPANY
■

Fairman
Salle

Co., 208
Chicago,

Street,

members of thie
Chicago
Stock Exchange, have available
an
interesting
thirty-page
de¬
111.,

Co., 41

descrip-/

by T. J. FeiBroad Street,

City, members of the

Orleans

Stock

Exchange.

Copies of this circular discussing
the situation

had

from

some

the

detail

firm

upon

may

re¬

quest.

scriptive brochure -discussing the
situation irt Interstate Aircraft &

Engineering

Corporation,

which

the firm believes offers attractive

possibilities both now and after
the war, ^Copies of this brochure
may

be-had

upon

request

Alabama &

from

further Fred W. Fairman & Co.

Vicksburg
We maintain active trading markets in:

Mclaughlin, baird & reuss

Railway Co.

SEABOARD 4s/50

Members New York Stock Exchange

SEABOARD 6s/45
SEABOARD 4s/59
BOND

BROKERAGE

SERVICE

SEABOARD-ALL FLORIDA 6s/35

Specializing in Railroad Securities
;;
ONE WALL STREET

NEW YORK 5

■

TEL. HANOVER

2-1355

TELETYPE, NY

1-1310!

J-

1. h. rothchild &

co.

specialists in rails

•t;</
i

120 broadway

COrtlandt 7-0130

n. y. c. 5

Tele. »Y 1-1293

Adams & Peck
63 Wall

Street, New York 5

BOwling Green 9-8120
Boston

Tele. NY 1-724

Philadelphia

Hartford

THE

992

Thursday, March 9, 1944

COMMERCIAL & FINANCIAL CHRONICLE

should be initiated with the con¬

For

Readjustment Of El Salvador's Debt

The Board expects to re¬

tractor.

lease promptly similar forms for
of El Salvador bonds of Series "A", construction contractors and for
"B" and "C" has been under discussion in the United States between
brokers and agents. This is in ac¬
an Economic Mission of the Government of El Salvador and Repre¬
cordance with the provision of the
sentatives of the Foreign Bondholders Protective Council, Inc., of
new
law to the effect that con¬
New York City, N. Y. and of the British Council of Foreign Bond-:
tractors and subcontractors sub¬
holders.
According to an announcement March 2 by Hector David
ject to renegotiation are required
Castro, Ambassador of El Salva-S>
to\ file data prescribed by the
dor, as a result of these discus¬ that it will recommend the pro¬ board.
In the case of contractors
sions, the National Assembly of posed plan to the favorable con¬ whose fiscal
years have already
El Salvador, which will meet in sideration of the holders of dollar
*

UTILITY PREFERREDS
i

* ' r'•

r>' r'

Paine, Webber, Jackson
ESTABLISHED 1879

•

;

of readjustment

plan

March, 1944, will be requested to
approve
a
plan under which a
minimum service of $800,000 per
annum would be provided to pay
current interest beginning Jan.' 1,

& Curtis

at one-half of the original
to fund half of the
back interest from Jan. 1, 1938, by
the issuance of new bonds bearing
1944,

contract rates,

Securities

Public Utility
Profit-Sharing Program
Jr., Vice

Proposed For Utilities

President of Institutional

vice, Inc. has recently issued an interesting study
Court decision in the Hope Natural Gas case.
In

domain,*—
—;
based on constitutional protection utility earnings by levying huge
"excess profits taxes," and the in¬
of private property, are no longer
fully recognized by the
Court, dustry for some years has been
eminent

principle

which appears to

have swung over

of social and

to the idea

economic

expediency.

comment on the de¬

Newspaper
cision

confused, because the

was

the dissenting

decision itself and

general

The

the

clear-cut man¬

Court's views in a
ner.

present

not

did

opinions

press

opinion

appeared to be that there was no
definite change in the basic theory
of rate-making.
Thus, the Wall
Street "Journal" stated: "Analysis
majority opinion indicates
that while it adheres to the letter
of the law of the land, it circum-vents its spirit. ... At all events
it does not formally change the
of the

the land.

law

half

The theory

it has been for

itself is left where

century."

convinced

being

that,

better

fore

and to

adds:

"Bondholders

announcement

sented

did

not

and

1933

as¬

1936

plans would receive, in addition,
cash payments at the rates offered
under'those plans,- i.e., $365 oh

bond of series A, £27
£100 bond of series B

each $1,000

received

have

bonds

such

filing

before the first day

following the

The

filing

the

mandatory

forms is to be with the War Con¬
tracts

Board,
Assignments and
Branch, Room 3 D 571,
Washington 25, D. C., from which
copies, of the form will be avail¬

Statistics

able.

In connections with its functions

Holders of unas-

1933.

and

1932

who

the

both

sent

annum,

The

bonds.

ling

per

close of their fiscal years.

$7,322,700 of 7% Dollar Bonds of
series C, as also £851,140 of 6%
Sterling Bonds of series B.
"Default occurred originally in

interest

closed,

yet

of the fourth month

included in the proposed debt

apply the balance of the service
monies for sinking fund, of which
75% would be applicable to the
dollar bonds and 25% to the ster¬

not

must be

sterling bonds accept the offer."
I It is also announced that "there
are

whose fiscal years

contractors

have

obtainable, it will there¬
recommend that holders of

terms are

plan of El Salvador $2,939,000 of
8% Dollar Bonds of series A and

3V2%

Utility Ser¬
of the Supreme
his opinion the
longer term significance of the decision has not yet been fully recog¬
nized.
The old familiar landmarks of utility regulation have been dis¬
carded by the Supreme Court.
The theory .of fair value and the
Charles Tatham,

closed, such filings must be on or
before June 1, 1944.
In the case

bonds, and the British Council of
Bondholders has stated

Foreign

formulating over-all policies
procedures for the depart¬
mental price adjustment boards

and

payments since that time.
Re¬
duced payments of cash and scrip
were offered to those holders who
assented to the 1933
and 1936

the War
Contracts
preparation Renego¬
tiation Regulations which will be
follow,

Board has in

plans, service under the f latter
plan being temporarily suspended

available in manual form for dis¬

tribution to the public as soon as

from Jan. 1, 1938, by Decree No.
capital," as¬ on each
practicable.
suming that this refers to sale of and $213 on each $1,000 bond of 210 of Nov. 29, 1937."
As established by the new law,
The Economic Mission of the
series C.
common stock (as well as bonds
the War Contracts
Board is to
"In expectation that the
and preferred stocks) to raise new
Na¬ Government of El Salvador, which maintain its
principal office in the
has participated in the discussions
funds. Jhe danger with the idea tional Assembly will be prepared
District of Columbia;
With the
of "maintaining credit" and of the to act promptly in approval of the in this country consists of Arturo
consent of the head of any depart¬
Bustamante, Under Secretary of
"prudent investment" program is proposed plan, the Foreign Bond¬
ment
of agency in the United
that there is little expectation of holders Protective Council, Inc., Finance, and Victor Manuel ValStates, it may utilize the services
has informed the representatives des, Secretary of the Central Bank
any increased earnings reward for
of any officer or
employee of
sound management and growth of of the Government of El Salvador of Reserve of El Salvador.
another department or agency.'
the
enterprise.
The
Supreme
Court's view is sound as far as it
goes, but a new approach to rate
New
making is necessary in order to
permit the utility industry to at¬
Created
Bill
tract
speculative
as
well
as
investment capital-*-and only by
At its first meeting, held February .26, the new* War Contracts
The Secretary of the Treasury
this means can it maintain a Price Adjustment Board, created by the renegotiation section of the announced on March 6 that the

unable

"attract

War Bontraefs Price Adjustment Board

Results Of Treasury

Under 1943 Revenue Act,

structure, with a

financial

sound
proper

senior

ratio of common stock to
capital (the larger that

ratio the more

Act

Revenue

established its

Offerings

1943, which became law on February 25, 1944, tenders
for
$1,000,000,000, - or
organization, it is announced by the Office of War thereabouts, of 91-day Treasury

Informations,

be dated March

bills to

9 and to

"conservative" the
considered).

/The personnel of the new board, appointed by the heads of the mature June 8, 1944, which were
agencies involved, is as follows:
offered on March 3, were opened
Mr.
Tatham
believes that a
Joseph M. Dodge, Chairman of strom, Maritime Commission Price at the Federal Reserve Banks on
great responsibility rests upon the the War Department Price Ad¬ Adjustment Board, who is also March 6.
representing the War Shipping
utility industry, as well as the justment Board, chairman.
The details of this issue are as
commissions and courts, to clarify
Laird
Bell, chairman of the Administration Price Adjustment follows:
defend "fair value" and even he
and solve this problem.
He sug¬ Navy. Price Adjustment Board, Board.
•>
-.;
Total applied for, $2,450,653,000.
agreed with • the ~FPG- findings.
Captain Harry C. Maull, Jr.,
gests that "one such method might vice-chairman.
Total
accepted,
$1,011,344,000
The keynote to the Court's phil¬
be through some sort of a 'profitCommander
Arthur
G. Ryd- Chairman of the Treasury De¬ (includes $66,044,000 entered on a
osophy appears contained in the
sharing' agreement under which
partment Price Adjustment Board, fixed-price basis at 99.905 and ac¬
statement that "the return to the
Charles T. Fisher, Jr., Chair¬
earnings in excess of the pre¬ operation of utilities, and Iam
cepted in full).
equity owner should be commen¬ scribed return would be divided
man
of the
Reconstruction Fi¬
Institutional Util¬
ity Service feels that the opinion
reflects an important change in
judicial viewpoint.
Justice Reed
apparently was the only one to
However, the

structure is Usually

„

,,.

surate with returns on
in other

investments

enterprises having corre¬

sponding risks. The return, more¬
over, should be sufficient to as¬
sure
confidence in the financial
integrity of the enterprise, so as
to maintain its credit and to at¬
tract

capital."

This would
for the utility
be

splendid basis

industry if it could

But the

practically applied.

has depressed

itself

Government

Light

BOENNING & CO.
St., Philadelphia 3
PH 30

Pennypacker 8200
Private

Phone to N. Y,

COrtlandt

and

profit-sharing idea is by no
means
new.
In addition to the
Hartford Plan mentioned above
there is the Washington Plan for
The

adjustments—which worked
until
recently, when the
fought a rate in¬
crease
to compensate for higher
rate

well

recognizing ef¬
ficiency and progressiveness
in
management by allowing a higher
rate of return on the investment.
of

The

return,

general

acceptance

Government

costs, on the ground that it would
be inflationary. There had never,

by the regulatory
authorities should be obtainable.
At a
round-table discussion of
such

program

7-1202

course,

England has long used the method
successfully.
Efforts should be
made to develop a suitable for¬
mula which can be generally ap¬
plied in this country, thus

What

some

plan"

two

Railways

Consol.
Kansas

Common Stock
When Issued
bought

sold

quoted

Elec.

Issues

City Pub. Svc.

Peoples Light & Power
Other Issues Traded

years

innovation

developed

after

of negotiations

the Board

between

Public Utilities

"an

ity Commissioners. A hearing has
been called to discuss a "rate ad¬

Associated G. & E. Issues

called

public utility rate regulation"
has just been announced by the
New Jersey Board of Public Util¬
in

justment

United Light

clarify¬
and

ing the regulatory problem
reassuring investors.

efficiency
should be rewarded,
replied: T
am very much in favor of provid¬
ing an incentive to the develop¬
ment of cost control, looking to
efficiency and economy in the

Trading Markets:

been any Federal ob¬

jections to the previous rate cuts.

managerial

and the New

INC.

30 Broad St.

New York

WHitehall 3-9200.

Teletype NY 1-515

Macintosh

James

mately 0.375%

Blough, War Pro¬
representative.

bids:

been

has

appointed general counsel to the
War Contracts Board.

from

announcement

The

the

OWI Feb. 23 added:
The authority of

the Board ap¬
renegotiation for war
contractors'
fiscal
years
ended
after June 30, 1943, while author¬
ity of the Joint Price Adjustment
plies

last

Board—established

October

by voluntary action of various in¬
dividual

departmental

boards—

applies to war contractors' fiscal

ended before July 1, 1943.
legal authority on renego¬
tiation is lodged in the War Con¬
tracts Board, which among other
things has the responsibility for
fixing policies, principles, inter¬

years
All

War ;

certain

conferred

'
'
j- V
Low, 99.905; equivalent rate of
discount
approximately
0.376%

per annum.

■

(31% of the amount bid for at
the low price was
There

was

issue

ilar

■;I

accepted.)
a

sim¬

March

9 in

maturity of

bills

$1,011,452,000.
.
j;
to the previous
week's offering of $1,000,000,000,
or
thereabouts, of 9l-day Treas¬
ury bills to be dated March 2 and
to mature June 1, 1944, tenders
were
opened at the Federal Re¬

the amount of
With

respect

Banks

serve

Feb.

and the

details of this issue are as follows:.
-

for, $2,151,449,000.
accepted,
$1,002,953,000
(includes $63,985,000 entered on a
fixed-price basis at 99.905 and ac¬
cepted in full). ■ >>■
Average price, 99.905 +; equiva¬
Total applied
Total

of the authorities
by Congress to the

heads of the various

per annum.

provided by Congress, the
Contracts Board has dele¬

gated

-V-' '

High, 99.910; equivalent rate of
discount
approximately
0.356%

pretations and procedures.
As

annum. •

per

of accepted competitive

Range

governmental

lent

agencies that have been; admin¬
istering renegotiation of war con¬

rate

mately 0.375%

discount
per

approxi¬

annum.

The

delegation of auhorRange of accepted competitive
ity will provide the means of con¬ bids:
The
plan
provides a,, definite
tinuing the actual conduct of re¬
method, it is said, under .which
High, 99.910; equivalent rate of
negotiation through the organiza¬
it may readily be determined an¬
approximately
0.356%
tions with which the contractors discount
nually
whether
earnings., are
are familiar.
j . * per annum.
above a fair return—if they are,
Regulations regarding the filing
a
Low, 99,905; equivalent rate of
billing credit will be imme¬

Jersey Power &

Light -Company .

tracts.

diately

given

residential and

commercial customers.

complete details are not
available, the nbw plan ap¬
pears to have been worked out
with considerable care and may
While

yet

Arnhold and S. Bleichroeder

Board.

Carman

duction Board

suggests.'"

earnings.
Another method might
be through the use of a varying
rate

ment

Average price, 99.905 +; equiva¬
lent
rate
of
discount
approxi¬

Corporation Price Adjust¬

nance

along the line that your question

Light Co., which back in 1925 in¬
augurated its Customer Dividend
Plan
providing for a refund to
consumers
in years of favorable

whether

1606 Walnut

company

utility problems, sponsored by the
Savings Bank Journal early in
1940, Chairman Olds of the FPC,
in answer
to a
direct question
from
Moderator
Parker
as; to

Stock

Common

the

untarily by the Hartford Electric

Puget Sound Power

seriously considering
the
possibility of working out a sat¬
isfactory arrangement somewhat

very

the
consumers.
In at least one in¬
stance this has been practised vol¬
between

represent an important step to¬
developing a profit-sharing

ward

program

for all utilities.

financial

each

war

and

other

data

discount

per annum.

datory by the new law, are under
the direction of the new War Con¬
tracts

Board,

"Standard

which

Form

approved

Contractor's

Report" for filing information to
make

whether

approximately

0.376%

contractor, made man¬

possible
or

not

to determine
renegotiation

(38% of the amount bid for at
.

the low price was
was

of bills on
of

accepted.) There

maturity of a similar issue

March 2 in the amount

$1,006,307,000.

>Volume 159

THE COMMERCIAL & FINANCIAL CHRONICLE

Number 4262

993

contemplate

Reasonable Deductions To Cover

ReconversionCostEssentialiStempf
President Of American Institute Of Accountants Favors

RADIO NEWS

A
on

Aldrich

nation's favor, a

for. this

point

period. The

perched itself in

third place in the

high

the,

"Monarch of the Air" for

Family

program

which

reason¬

ably and prop¬
erly relate to
the war years,
should be pro-;
vided -for

those years, in
the
determi¬

'."v.

profits.
such

Without
Majettic Radio NetveNo. 3
February 29,1944

THE STANDINGS

taxation

OF THE STARS

are

program
Present

"The

be assured for both

renegotiation, by specific amend¬

7,5

ments of

f: 7

Abbott & Costejlo

Mr. District

Screen Guild Players

Attorney
Bing Crosby

Music Hall
Frank Morgan &

Fanny Brice
Leave It

Kay Kyser
Note: Red Skelton leads

all programs

broadcast after 10! 30 PM E.W.T.

based

2500 telephone
calls per hour made from 6 PM to
10:30 PM in 32 cities. Thus, several
leading programs heard after 10:30
E.W.T. are not rated.
on

How Near Is Television ?
New Yorkers know television is a

the

does not.':

nation generally
: ■:;: x: /

■,

television doesn't
far. Considerable
done to make a tele¬
vision network workable and prac¬
radio,

very

work is being

tical. Several^ methods
up a relay system to
cities are being tried.

for. setting

connect major
With the com¬

ing of peace, solution to this major

problem should come quickly.
Majestic, like other leading radio
manufacturers, is. spending every
its

time

essential equipment.

making

war-

At the war's

end, you may be sure that the skill
and

precision/ the advancements in
electronics made possible by war
research will be reflected in Majestic's

postwar television receivers.
Then, you will have television, per¬
fected
for your enjoyment and
priced so you can afford it.

m
<no/#s:
•

enue

the

purpose

both the Internal

Code and the

must

taxation and
Rev¬

Renegotiation

Act.

"Difficulty

Jack Benny

out

reasonable

Joan Davis &
Jack Haley

but

and not
satisfy the
;

allowance
for

MIGHTY MONARCH OF THE

Alff

MAJESTIC RADIO & TELEVISION CORPORATION

CHICAGO

effect, ' deferred

covered by Certificates of Neces¬

these sity

deductions

are

Stempf

allowance

for the other does not

Walter Winchell

The

Victor
-

Radio Theatre

minute

'take'

2 ;

Charlie McCarthy

Unlike

Govern¬
confisca-

Molly

reach

•

principle.

Aldrich Family

•

not.

costs for the one purpose

Feb. IS

Fibber McGee &

reality,

in the post-war period with which
to do the things that must be done

of
determination
does not obliterate the soundness

sjs

"The
Treasury persists in
stressing the alluring possibilities
of the * carry-back in lieu of re¬
serve

provisions.

should

the failure to allow

reserve

pro¬

visions both for purposes of taxa¬
tion and

renegotiation, results not
only in business posting a forefeit
which it may or may not get back

through, the carry-back provision,
but as to renegotiation, so-called
principle nor condone the
excessive profit recaptured 'by the
rejection of reasonable and ap¬
Treasury is computed without re¬
propriate deductions.
gard to the costs attributable to
"It is necessary to bear in mind
reconversion.
" So-called
volun¬
that all the costs of reconversion,
tary renegotiation settlements on
conversion, and other post-war that basis
preclude any reopening
planning costs and expenses are
subsequently in respect of such
not of the same general character,
reconversion costs.
and certainly are
not, from a
"Let us not underestimate the
sound
accounting
standpoint,
probable pressure for the repeal
wholly and indiscriminately of the
carry-back provision which
chargeable to the operations of
may
develop at' the very time
the war years.
To a great extent when refunds will be needed
management,"
itself,: has', been most.
One may be reasonably
guilty, of confusing the issue and Sure that the claims for refund
of befuddling the Congressional
growing out of carry-back provi¬
Committees
and
the
Treasury sions will reach
very large figures
through a failure to sharply dif¬ in the
post-war years.
When
ferentiate between the types of
these
refunds; begin
to
affect
costs that are appropriately at¬
seriously the net yield of the rev¬
tributable to the war years and
enue, both the Treasury and Con¬
those that are clearly develop¬
gress will want to do something
ment and organization costs which
about it.
Past experience clearly
are
not appropriate costs of the
demonstrates this conclusion. The
war
years
but
are
decidedly
carry-back provision is at best a
chargeable against, the operations
gamble. Instead of providing that
of the post-war years.
^ genuine profits shall be deter¬
"The term 'reconversion'should mined in the first
place, it assumes
be construed strictly as relating that
a
corporation must suffer
to the readaptation of facilities
subsequent losses in order to en¬
converted
from
peace
to
war able it to effect a determination
needs, and which are now to be of the genuine, profits of prior
of the

in the "wood"
"Aged in the wood" is a familiar
expression, but few people really
know how important a part barrels

§lay in the ago we wrote a little
time inaturing of whiskey,
ome

piece entitled "barrels," but we
could only scratch the surface of
this subject in an article of 300 or
400 words. So this is—more of the
same.

As you
when it

production
to post-war civilian purposes.
In
other words, they are to be put
back
into
relatively the same
setup that existed prewar.
On

Were corporations gener¬
ally to be so fortunate as to con¬
tinue profitable operations in the
post-war period, the taxation of
fictional profits in the war years

the

would

other

war

hand,

should be construed

facilities

during the
not

'conversion'
relating to

production
war

years

acquired
which are

adapted to new post¬
war purposes.
As to reconversion
costs, there is no doubt that these
are appropriate costs of the war
years.
In
general,
conversion
costs as here defined, are not ap¬
propriate costs of the war years,

years.

never

corrected.

It is

true that the
to

make

visions

Treasury's proposal
specific carry-back pro¬

of reconversion

costs, re¬

of
whether
post-war
years are profitable or not on an
over-all basis, meets this objec¬
tion; but that provision nonethe¬
less denies the taxpayer's right to
determine genuine profits in the
first instance, and takes from the
"It is apparent that where war taxpayer both taxes and renego¬
facilities were erected solely at tiation recoveries ba$ed upon fic¬
company's
risk
without
Cer¬ tional earnings.
tificates of Necessity, the excess "The true character of post-war
of undepreciated cost at the war's reserves has been misconstrued in
end over the post-war utilization many other respects.
The hear¬
value of such facilities constitutes ings before Congressional Com¬
a
mittees are replete with references
cost of the war period.
(By
utilization
to the capital needs of corpora¬
value
is
meant
an
amount representing a balance of tions in the
post-war period and
recoverable
costs
justified
by demands for reserves for 'future'
forecasts of subsequent profitably
marketable production during the expenses, adjustments, costs and
gardless

It should, be driven home

remaining useful life of such fa¬

losses;

cilities.)

that reconversion reserves do not

However, in the

case

know, whiskey is colorless
from the still.. At

comes

this stage it is drawn into charred,
Oak barrels. Then the casks are

taxes is

trolled conditions of temperature,

which

abortive half measure

obscures

it has

relation whatever to the

varying needs of corporate enter¬
prise.

humidity and ventilation. The min¬
ute the whiskey gets into the bar¬
rels things begin to happen—slowly
of course. Color gradually begins
to appear, and the color of whiskey
is derived exclusively from the
charred, oak staves. At first the
liquid appears yellowish, then it
takes on an amber shade, and
later, when it is properly matured,
it has a deep .reddish-brown color.
While whiskey is in the "wood"

"It is

self-evident, but it should
emphasized, that the objectives

reconversion

cannot

reserves

properly be served by such simple
devices as arbitrarily limited per¬
centages of (a) gross revenues,
(b) net earnings, or (c) fractions
of

assessed.

tax

All

these

are

arbitrary and unsuitable because
they do not discriminate between
the

divergent needs of individual

cases.
.'A--

v..'-'

sj«

it also undergoes definite and in¬
tended changes in aroma and taste

characteristics, because of continu¬
ous reactions occurring in the bar¬
rel. For instance, the liquid takes
certain extractives from the wood;
then there is oxidation of the

and of the materials extracted from

the wood. Some

allowances
for
reserves
are
the key¬

the

vigor¬
ous private enterprise; reasonable
profits and seed money are the
tokens of healthy industry; it is
certain that the post-war objec¬
tive of full employment at higher
levels of national production will
be jeopardized if existing indus¬
try is left prostrate at the close
of war by reason of inordinate
and unjust taxation and stern re¬
negotiation based upon fictional
earnings.
"The cut in tax revenue and
renegotiation recoveries is but a
drop in the bucket compared to
the disastrous effect of industry
emerging from the war impotent
by reason of drained resources
and, therefore, unable to recon¬
vert to peacetime
pursuits and
prompt re-employment of work¬
ers."

reaction among

the various

"constituents" in whiskey, pro¬
duced by nature, contribute to the

survival

organic substances. All of these

"Appropriate
post-war
stone to

new products are
whiskey as a result

formed in the

:|:

or¬

ganic substances in the whiskey

reconverted from

series.

placed in bonded warehouses. (All
whiskey is so stored.) In the ware¬
house the whiskey usually remains
for four or more years, under con¬

be of

observed, in, the first place, that

existing provision of the
itnernal revenue code regarding
post-war refunds of excess profits

"The

significant fal¬
lacies.
It purports to afford cor¬
with related costs, t This is true of
porate
enterprise
t h e
means
new. costs incurred in converting
whereby to meet post-war non¬
to ' civilianneeds
facilities
ac¬
recurring costs of reconversion.
quired
for
war
production,
Arbitrarily fixed at 10% of excess
whether the basic facilities were
profits taxes, fortuitously assessed,

fictional

ment's
i

Vih

Bob Hope

Ratings

the

are*

This is number twenty-two of

SCHENLEY DISTILLERS CORP., NEW YORK

to assure that it will have cash

charges to be spread against fu¬
ture, production pursuant to the
basic concept- of matching revenue

profits*-and

tory.

ratings

Take It

and

renegotiati

National Program ratings of your7
; 15 Best-liked Shows from
Hooper Radio Reports

t7;-'

tures;;

provision, the
profits s li b jected to both:

NOTE—From time to time, in this space,
there will appear an article which we hope
will be of interest to our fellow Americans.

manage
their
own
affairs; that the main
problem involved is to hold busi¬
ness by the hand in such a way

curred upon thq acquisition or
adaptation, of facilities in normal
times.. All such capital expendi¬

nation, of gen¬
uine

Mr. Stempf said in part:

these losses.

recent months.

Financial

unable

expenses,

promptly reestablish civilian
enterprise.
These two things are
separate problems!
Tax and re-*
business
on
such war facilities covered
genuine
by negotiate
Certificates of Necessity, complete profits pursuant to generally ac¬
amortization will have been borne cepted accounting principles, and
by the war years. To the extent it will take care of its own prob¬
that - such facilities are salvaged lems of future financing without
and, cpnyer ted to post-war use, being regulated and regimented
the; cbsts of doing so are' certainly as to how it shall conserve its
no different than similar costs in¬
working capital in the interim.

immediate provision for
"Those costs,

champ is still a champ. Taking

all comers, Bob Hope keeps

another Hooper Report

Conference

Treasury's policy of providing through post-war tax refunds, for
reconversionJosses,
He advocated a change in the tax laws to permit

Hope Tops Again

crown of

the

Management at the Hotel New Yorker on March 1, Victor H. Stempf,
President of the American Institute of Accountants, disapproved the

*'Standings of the Stare

Bob

before

delivered

address

concern

financial

Renegotiation Act To Alleviate Conyersipn Problem
In

'future*
costs'

accruing in the
present war years, which should
be matched against revenues of
i those. same years.
There are re¬
peated allusions also to the 'fund¬
ing' of reserve provisions; and
implications that corporations are

Amendment Of The Internal Revenue Code And The

MAJESTIC

but

well-known flavor—so easily rec¬

ognizable by you
taste."

'■■■

:■.=

"whiskey

■;..;

; ;.;.

And may we remind you again
that nature does most of the work;
man

controls the natural processes

—importantly.
Sometime soon, in

cle,

will tell

another arti¬
of these

you more

scientific controls exercised in

our

very modern distilleries. "Men in
white" are constantly working ob¬

jectively to keep our Industry under
the canopy of the slogan—America
makes the best of

everything!

MARK MERIT
of Schenley Distillers Corp.

FREE-A booklet containing reprints
ofearlier articles in this series will be
; sent you on request. Send a post-card to
me care of Schenley Distillers Corp.,
#50 Fifth Avenue, New York 1, JV. Y.

Sproul and Mr. Clerk, were the
following Presidents:
William W. Paddock, Boston;
Alfred H. Williams, Philadelphia;
Hugh Leach, Richmond; William
President Matthew J. Fleming S. McLarin Jr., Atlanta; C. S,
of the Federal Reserve Bank of Young, Chicago; Chester C. Davis,
Cleveland was host to the Presi¬ St. Louis; John N. Peyton, Minne¬
dents' Conference on Feb. 2-3 and apolis; H. Gavin Leedy, Kansas
27 when that body, comprising City,
and
Randle
R.
Gilbert,
Presidents of each of the 12 Fed¬

Dallas.

eral Reserve banks, met in

Saturday sessions were
con¬
ducted at the Cleveland. Federal

land for

the first time

Cleve¬

since

the

founding of the Federal Reserve
System nearly 30 years ago. Each
of the 12 presidents had indicated
his intention of attending the con¬
ference except "William A. Day,
conference chairman and presi¬
dent of the Federal Reserve Bank

Mr. Day, pre¬

of San Francisco.

vented by illness from
was

represented

"First

Vice

President

Francisco Federal.
Allan

Federal
York

and

Clerk,
San

the

Batik1

vide-Chairinah

besides

Mr.

building.

Sunday

at the Hotel Statler.

were

closed:! Follow-;

ing its two-day meeting in Cleve¬
land, the conference continued its
sessions

Feb.

and 29, in;
It is under¬
stood that bank policy was the
subject of the Cleveland meeting.
on

Washington,

Benclix Luitweiler Partner
Thomas J. Arciero will shortly
admitted
to
partnership in

New

The

conference, presided. ' In atteridance,

bank
were

attending,

Ira

Sproul, president of the
Reserve

Reserve
sessions

All sessions

Fleming;

Bendix, Luitweiler & Co., 52 Wall
Street, New York City, members
of the New York Stock

Mr. Arciero will act
for

Woodley

Exchange.

alternate

Gosling
Mr floor of the Exchange.

the

THE
994

Analyses

Recent

Merchants Distilling Corp.

FOREIGN

department
has prepared a comprehensive memo¬
randum on railroad equities, including

(Chicago)

gptCOMPAN^gi
Stock

SECURITIES

$2.50 Preferred
Analysis

available

Common

;

■

111

Stock Exchanges

208

Members of

St.

So. La Salle

209 S. La

CHICAGO 4
Phone

We have

of 1938

Midland United $3.09

A Pfd.

Elec.

Water &

Northeastern

Pfd.

$4.00

Illinois Power Common

Exchange

Salle Street * Chicago
9200 * Tele. CG 146

Andover 1520

Changes;

Price

Salle Street,

Charges; - Recent
Junior vs. Senior

and

tenance

Co., 231 South La
Chicago, have avail¬
able a recent analysis of National
Terminal Corporation which may
be had from their statistical de¬
Adams

Street

New

York

CHICAGO 4

RANDOLPH 4696

Toronto

Indianapolis

Salle Street

So. La

208

CHICAGO 4

3
^4
V CG 1399

CHICAGO

Quoted

Sold

—-

ZIPPIN & COMPANY

/ /

Stock Exchange
principal exchanges

all

and

231 South LaSalle

South La Salle St.

105

Bought

Members

& Co.

Recommendations

Chicago

active interest in

Midland Utilities 6's

Chicago Stock

Tel. Dearborn

Tele. CG 156

1430

Andover

William A. Fuller &Co.

Request

York

New

principal

York and

Member New

&* McklNN0N

THOMSON

Ryan-Nichols

FAROLL BROTHERS

Available

;V?.v

.♦.-****.. V ■ •y.' "

f... ; ,.y •!

Stock

Common

reorganization issues.

the
■

Standard Silica Corp.

research

investment

Our

Common Stock

Changed Status

The

of Railroad 'Securities

APPLIANCE

Incorporated

Thursday, March 9, 1944

CHRONICLE

PARKER

G0LDBLATTBROS.

Request

COMMERCIAL & FINANCIAL

Chicago Brevities

mishap to befall the $8,346,000 Cook County funding
bond issue sold last November to Seipp, Princell & Cq., is a taxpayer's
suit filed recently by the Hoyne-Norwood Apartments Corporation,
Chicago, charging that the flotation was illegal.
.
, tt
;
The latest

Reorganizations;
/
The principal complaint against the funding obligations is that,
Reorganizations;
and in their weekly Stock
Re¬ according to the plaintiffs, .the legislation passed to authorize it by
the Estate
was
"special: legisla-^views on:
Outlook for Railroad
however, refused to render a fation"
since it only applied to
partment upon request.
Equities; Market Action of Rail
vorable
opinion $ until . certain
counties of 500,000 population or
Stocks;
and
Price : Changes in
claims had been certified by the
over—and Cook
County is the
Brailsfcrd & Co., 208 South La Railroad Equities.
Illinois Supreme Court.
i
j
Salle Street, Chicago, have Jan¬
However,
their
last .'weekly only one in the State answering :
Two other law firms were then
to that description.
uary earnings available on Chi¬
Stock Review, veering away from
engaged to render an opinion.
Superior Court Judge Schwartz
cago, North Shore & Milwaukee
the subject of rails to .the indus-iThis' took several months, since
Railroad.
Copies may be had trials, highlights a : study;■ of ,32 has set a trial, of, the case for
"the new attorneys, went over the
March 20., and. La Salle Street
upon request, ;
industries,
covering
over.
, 300
claims to be funded with the ut¬
firms are following developments
leading issues and the years 1936
most caution.
"
1
Caswell & Co., 120 South La to 1942, inclusive.
This pertains With interest.
And finally, when the opinions
Only a week before the suit
Salle Street, Chicago, now have to their market volatility not only
had been completed and public
was
started, Seipp, Princell &
1943 earnings and balance sheet as regards one group and another,
offering
advertised, the newly
Co. had made a public offering
filed law suit threw everything
figures on General Box Company. but also between each group .and
of -$7,500,000 of tax exempts,
Copies of these figures may bo the general market.
into confusion again.
and had reported that the re¬
: Thomson & McKinnon will fur¬
had from Caswell & Co. upon re¬
The latest reports from the Chi¬
sponse of investors was encou¬
nish any of the above releases
quest.
cago- traction front indicate that
raging. The latest legal bomb¬
free of charge;
Requests should
Mayor Edward J. Kelly's munic¬
shell, however, quickly stopped
Enyart, Van Camp & Co., Inc., be addressed to Thomson & Mcipal ownership plan is not pro¬
the marketing of the issue.
Kinnon's Statistical Library, 231
100 West Monroe Street, Chicago,
The
bonds have been
loaded ceeding too well.
have just compiled an up-to-date South La Salle Street, Chicago 4.
Federal Judge Michael L. Igoe,
with
troubles ever
since bids
at the latest hearing on the tran¬
quotation card on Chicago and
were
taken last year.
Seipp, sit
Suburban Bank Stocks, copies of
Zippin & Co., 208 South La Princell &
plan, told the attorneys for the
Co., in their bid, had
which may be had upon request. Salle Street, wish to calL atten¬
inserted the qualification that an city, the elevated lines, and the
tion,- at this time, to the fconsurface lines that they should re¬
acceptable legal opinion: be fur¬
Hicks & Price, 231 South La versibn plan of the Republic of nished.
Chapman & Cutler, the new- their- efforts to achieve a
Colombia 6s of '61 for conversion
Salle Street, Chicago, have addi¬
law firm that passes on most Chi¬ sui table traction : unification prointo 3s of '70, which plan expires
(Continued on page 995)
tional data on P. H. Butler; jCd.
cago
and Cook: County issues,
April 1, 1944.
Further informa¬
common stock which is now quali¬
fied in Illinois up to $7 per share tion on this situation may; be had
and up to $25 on the preferred. upon request from Zippin & Co.
;
"
For
1943, gross sales will show upon request.'
in

Issues

and

Rail

Calendar of

Doyle, O'Connor & Co.
Incorporated

Salle Street

135 S. La

CHICAGO 3

1200

9600

Dearborn

prepared

have

recent

analysis of

NATIONAL TERMINAL
CORPORATION

ADAMS

CO.

Salle Street

231 South La

Chicago U, Illinois

Phone State 0101

Teletype CG 361

Food Processors' Profit Rate By! 35.5%

JOHN J. O'BRIEN

li .&GO.;lip
Members

231

Exchange (Associate)

So. La

Salle Street

Chicago 4
Tel.

Central

Tele.

5775

CG 1660

assets

company

79 stores.

has a total of

current

Chicago Board of Trade

The

super-markets.
now

Chicago Stock Exchange

•

New York Curb

$11,500,000 with $116,774 added to
surplus.
These figures reflect
operations of additional stores,
only from Sept. 1, 1943, and must
be considered in the light of only
four months' earnings for the new

Total

1943

over

are

request.

135 South
Chicago, have

Salle

Street,

prepared recent reports on Black
Hills Power & Light Co., com¬
Circulars

Request

Black Hills Power & Light
:

•

:■Com mon

' ;;ywy

Foote Bros. Gear & Machine
Common

Clearing Machine Corp'n
Cominon

General Bottlers, Inc.
Preferred
We

have

Active

Common
Markets

all

Chicago Traction Securities

Interest in railroad

135 South La Salle

Tel. ANDover 5700

St., Chicago 3, 111.

Tele. CG 650-651

Machine

issues con¬

tinuing unabated, during

ILL. —Abbott Copresident, Globe Roofing
Products Co., Inc., announces that
Earl M. Oren, Chicago manager
of Doremus & Co., national adver¬
CHICAGO,

ment

the past

was

industry.

Street, Chicago,

the

ing

this up in
recent weekly Bond Reviews
articles on: Railroad Main¬

Equities,"
their

following

STILL

RELIANCE

new

the same

offices.

1941—90c

February
S,

West Monroe Street

CG 96S

Teletype CG

ll22

which

the

they

pared

cents per

approxi¬

dollar of sales

companies analyzed, com¬
with 4 cents in 1941 and

MARKETS

of man¬
containers, machinery and
equipment.
At the outbreak of

spite of acute shortages

power,

the

war

entific

there were over

600 sci¬

laboratories in the food in¬

dustry working

veloped, particularly

dehydration,
the maxi¬

in supplying

essential
mum

fight¬
in the'smallest

amount of food to our

ing men and allies
amount of space.

Iowa Electric Co.

Iowa Elec. Lt.

Pfd.

Power Co.

Pfd. & Com.

MIDWEST

& Power Pfd.

So. Colorado

for the

When Issued

—

Flour Mills of America
4's

STRAUSS BROS.
Members

New

York

Security Dealers Ass'n

Board of Trade Bldg.,

has been climbing

rapidly. "It should be
borne in mind" Mr. Willis said,
"that these records were achieved
even more

regula-

both years

Paul s. Willis

for the

ing processed

night and day on
production, processing, preserva¬
tion and kindred problems.
New
tions
went
and improved methods of freezing
into effect. For
food and packing it have been de¬
maximum

price

mated 3

of food be¬

nomics; the proportion

Phone Central 5690

Chicago 4

Telephone: Harrison 2075
\

Salle Street

CHICAGO 3

.1942, the year

American food pro¬

rising 24% between
1939 and 1943, according to the
U. S. Bureau of Agricultural Eco¬
was

1960

Com.

Per Share

1944—40c Per

2424

1943

same

Per Share
Per Share

1944—Under 11

120 South La

food

about the

was

FUNDED DEBT

CASWELL & CO.

Enyart, Van Camp & Co., Inc.
ANDover

March

sales"

While total

duction

NEW YORK

1942—70c Per
1943—90c

Market:

profit per

ess

CORP.

1940—10c

Interstate Aircraft &

rate of

§ T E EE

History

living".

The

net

YIELD

SWEET

Products Co.
P. II. Butler Co.

the

dollar of proc¬

PREFERRED

Dividend

in¬

cost of

111., mem¬

and larger quarters
floor as their present

NO
NO

crease

Stock Exchanges, are mov¬
to

have

■

caused

Previously

York and Chi¬

proces-

sers

the

with

of the New

cago

First National Bank

CHICAGO

food

Companyls

Gypsum Company,

Salle

processing companies, based

ported charges^
4.7 cents in 1939.
that profits of

put out a 5-page analysis on
"Changed Status of Railroad

Trading Interest in

100

Doremus

the building

have

Thomson

Contl. 111. Nat. Bank

Engineering Corp'n

of 50 representative; food

official earnings statements,

azine, "Building," a business and
economic review for all factors of

bers

with

Mickelberry's Food

office, Mr.
Oren was
and publisher of the mag¬

editor

Belie
Caused Living Cost Rise

Manufacturers Says Figures

Charge That Industry Profits
A survey

Willis

shows that, despite the fact that the
dollar volume of business nearly doubled, in the past four years, the
rate of net prof it has been reduced approximately 35.5 %, according
to Paul S. Willis, president of the Grocery Manufacturers of America.
joined /Globe's "This survey," states Mr. Willis, "should provide an answer to unsup-

burn,

McKinnon

month

Straus Securities Company

Prod,

United-: States
first as public¬
Corporation
common;
Clearing ity manager and then as advertis¬
Machine
Corporation
common;
ing manager, and before that was
and
General Bottles, Inc.,
pre¬
city editor of the Chicago Journal
ferred and' common.
Copies of of Commerce.
;'
,
these reports may be had upon
££
,„ii
^
request from the statistical de¬
In Larger Quarters
*
partment of Straus Securities Co.
Hicks • & Price, 231 South La
Foote Bros. Gear &

mon;

Globe Hoofing

Head Of Grocery

Chicago
Straus Securities Co.,

Recent

Dollar Sales Doubled In Past Four Years:

E.i»1. Oren Joins

$1,125,000 as compared with $925,000
in;, 1942.
Total net worth
tising Y agency,
shows the increase from $1,254,000
management staff on March 1.
in
1942: to
$1,568,000 in 1943.
Before assuming the manage¬
Further information may be had
from Hicks & Price upon

Although

Direct

Sincere and Company
Members
and
'

New

Other

231

CHICAGO

Teletype CG 129
Wire to New

York Office

York Stock Exchange
Principal Exchanges

South La Salle Street

State

2400

CG 252

Volume 159

THE COMMERCIAL & FINANCIAL CHRONICLE

Number 4262

Dealers Market In:

■

'f..'

•

■

'v-

■

995

V
TRADING INTEREST

INTERSTATE AIRCRAFT & ENGINEERING CORPORATION
[iK:
■■■y-:''
COMMON.. STOCK
;V;;:

CENTRAL PUBLIC UTILITY

Net current assets

•_

have

been

informed

NORTH

».-$10.00 per share

that

the

company

will

CONTINENT

important information
national in scope and should

shortly

regarding definite post-war contracts, some of which are
reflect excellent earnings on the small
capitalization of 123,001) shares of common stock.

are

exclusive

any

UTILITIES, PFD.

commitments

Thirty Page Descriptive Brochure Is Available

industry.

aircraft

the

881®! kneel and
BOARD

TRADE

141 W. JACKSON

Request

FRED W.
Members

208

SOUTH LA

Chicago

Exchange—Chicago

Board

SALLE STREET

120 South La Salle Street

BLVD., CHICAGO 4

CHICAGO

Tele. CG 640, 641 & 642

Trade

ILLINOIS

Chicago Brevities

Bell System Teletype CG 537

pqsal; under private ownership, in
case the
municipal plan does not
succeed.
;1 v

Engineering Gorp.

The Illinois Commerce Commis¬

Interesting Post-War Position
*

•

Interstate Aircraft and

sion,

some time ago, rejected a
plan; for reorganization and unifi¬

Engineering Corporation reports:

cation

Earnings after taxes for 9-month period terminat¬
ing Jan. 31,1944
Earnings per share after taxes, for same period——
Earnings per share after taxes, for, month of January

Net current assets

as of January
Or approximately
Book value, approximately-

31, 1944

—

—per

per

$549,445.49

the

lines under private
ownership, but it is believed that
the
commission
might
accept
.such, a- plan if it were reworked

$4.28
>
0.58
$847,050.43 slightly.
$6.60 ;;7 The chief difficulty with the
municipal setup, thus far, has
10.00
.

Industrial Research Foundation, has been named Chairman of

a sym¬

posium on the post-war outlook for the chemical industry to be held
by the American Chemical Society in ponnection with its 107th meet¬
ing in Cleveland, April 3 to 7. Announcement of this is made by. Dr.
Thomas Midgley, President of the Society.
Leading scientists and
industrialists
will

thur

reconversion

problems

Polytechnic Institute of Brooklyn,

af¬

get

been

agreement

of;

the

sition
.

and

the

pects

May
ReEmploy Schram

as¬

tran¬

Members

period,

the

for

v e

seji-

dollars

brief

mitted

Reply To

recently

the

Sub¬

one

Depart¬

ment of

Justice justifying its in¬
tervention • in the Securities and

Exchange Commission's review of
certain disciplinary actions taken

and

half

Lawrence

Bass

hundreds of papers

and addresses
tracing progress in science and
industry will be presented.
Among those scheduled to pre¬
sent
their views are Ralph
E.
Flanders.^ President
Lamson Machine Co.,

Jones

the

Comptroller

Monsanto Chemical Co., St.

the

Louis;

Badger of Ann Arbor,
Mich., Manager of the consulting
engineering division of the Dow
Chemical
Co.; John B. Glenn,
Dr.

President
Trust

the

Pan

American

Co., New York, and Vice-

President of the New York Board
of

Trade

and

Chairman

the

Latin American Section; Raymond

Stevens,

Exchange

the
ap¬

any

the Board
"any officer, on be¬
Exchange, to enter

contract

Vide-President 'of

Ar¬

of
employment
for such period
such other terms

person

of time and upon
and conditions as may be set forth
in

written agreement which has

been submitted to and authorized

the

such

Board

Governors

vote."

the

Feb.

members

amendment stated

judgment of the
that

ernors

its

advices

regarding

the

that "It is the

Board

authority

Gov¬

should

members

for

alleged
underwriting syn¬

dicate agreement

than four

has-been filed with the
by the counsel for the NASD,

years ago,

SEC

according to

special dispatch

March 3 from

New

York

Philadelphia to the
Tribune,"

"Herald

obtained from the membership in
order that the Board may,

having

"Entry of

the

Justice

Depart¬
ment
into the proceedings
has
been under attack by the NASD
on the ground that it could show
no

'interest' in the matter.

proper

" 'The

Department's
position
even
allege that it is

not

the

present pro¬
much less does it

and

brief stated.

'In

effort to bring

its petition within Rule XVII

(A),
the Department, citing a lay defi¬
nition
in
Webster's
dictionary,
contends

that

ested" in

the rule

the

word

"inter¬

means

nothing

than that the "attention has

been -aroused."
"

'When

used

ministrative

in the law, ad¬
judicial, the mean¬

particularly the

ployment of the President of the

Exchange,
into

to the

(Emil

Schram), enter

agreement with him prior

expiration

June 30, 1944,

Reconstruction

the

entire

first

CHICAGO

The RFC

issue

mortgage

Randolph 5686

$10,-

WALL

STREET, NEW YORK
BOwling Green 9-1432

bonds,

The other possibility is that V.
V. Boatner may increase his hold¬

ings in the carrier, and attempt a
consolidation with the Gulf, Mo¬
bile &

Ohio Railroad.

has

ner

Mr.

identified

been

Illinois

Boat¬

with

Road Bonds

consultant, and has
a
specialist in railroad re¬
organizations.
been

One

full

day of six hieetings
forums on municipal,
utility and railroad securities has

dictionaries

but

definition

the

those

words which has been
our

firmly im¬
judicial and admin¬

istrative law.
"

'Where

officer

his

official

capacity seeks to inter¬
vene
in a judicial or adminis¬
trative proceeding, he must in any
case

show

capacity

that

has

his

official

"interest"
within the meaning of the law.'"
an

Bliss & Co. To Admit
Bliss &

Co., 761 Fifth Avenue,

New

York-City, members of the

New

York

Stock

Exchange, will

nual

Confer-

ence

New York Stock Exchange
Chicago Board of Trade

and

141 W. Jackson

Blvd., Chicago 4

Teletype

1276

> -

',*!

the

Central States

Investment Securities

Group of the
IBA„ Plans for
the

Public

Utility

confer¬

held

Industrial

ence,

the

House,
Chicago. Mar.
16, were an¬
nounced

in the

Trading Markets
Leading Over-Counter Securities

■;f E. H. Rollins & Sons

Incorporated
*'

South La Salle Street,

135

John E. Blunt,

3rd,

Corp.,

CG 530

n s o n

" Central 7540

Direct

Chair¬

Wires

Our

Offices

Principal

Cities Throughout
the Country

the

man

] CHICAGO 3

Lee

H i g g

Railroad

Municipal Issues

We Maintain Active

Palmer

group.

Among the
in c i p a 1

John E.

p r

speakers
the
J.

Blunt, 3rd

Specialists in

program are IBA President,
Clifford
Folger
of
Folger,

CHICAGO

Nolan

& Co., Washington, who
speak at dinner, and Major
General Alexander Hugh Gate¬
house, head of the Armored Fight¬
ing Vehicles branch of the British
will

Traction Securities

Chicago No. Shore & Milw. R.R.

Army Staff, Washington, and the

Comprehensive

commander of the British armored

available

forces at El Alamein and through¬
out the North African campaign

208

speakers David

Salle

Street

CHICAGO

municipal securities,

which will have

analyses

request.

Brailsford & Co.

against Rommel.

Tel.

State

4
CG

9868

M. Wood of Wood, Hoffman, King
& Dawson, New York municipal

attorney; Carl H. Chatters,
director

execu¬

the

Municipal
Association, Chi¬
cago;
and Hazen S. Arnold of
Braun,
Bosworth
&
Company,
Toledo, Chairman of the IBA's
Municipal Securities Committee.
At afternoon sessions, the speak¬
ers will
include Ralph Chapman
of
Farwell,
Chapman
&
Co.,
Finance Officers

Chairman
ciation

the

National

Securities

Asso¬

Dealers;

SERVING INVESTMENT DEALERS
We specialize exclusively in under¬

writing and distribution of securi¬
ties, providing
with

investment dealers

attractive

clients.

partment of oun
in

them

way

for

issues

Maintaining

own,

compete

with dealers, but

exclusively.

their

retail de¬
serve

Correspondence

invited.

William H. Duff of Duff & Phelps,

Chicago utility securities analysts;
Arthur
C.
Knies, railroad
securities specialist with the in¬
and

nership in their firm

New York.

March 16.

Quoted

—

been scheduled for the Ninth An¬

serving.

Sold

Members

featuring

tive

—

DANIEL F. RICE & CO.

Of ISA To Meet In Cgo.

ing forum

other

Township

definitions embodied in Webster's
or

re¬

The British General will speak
at a luncheon following a morn¬

well-settled

CG 972

organization completed in 1941.

vestment house of. Vilas &

231 S. La Salle St.

E. I. pic¬

admit Benjamin Stenzlerito part¬

Listed! and Unlisted

the

Corpo¬

of the term which he
currently is
,

may

eliminate

some sources say.

holds

MIDDLE WESTERN
SECURITIES

Finance

ration from the

ture,

ing of the words "interest" and
"interested" is not found in lay

re-em¬

mind

operations

conducted

March

which further states:

bedded in

Under, date
to

Committee for

Economic' Developments;

Sheehan,- '

Springfield,

Vt., and Chairman of the Research
Committee

the

with

the

Society's ses¬
sions, at which

violation of

allege any facts which would sup¬
port a bald conclusion,' the NASD

3 empowering

into

expected
attend

Feb.

authorize

industrialists
are

some

ceedings

York.

approved

of the

878

Members

Centra! States Group

Department Of Justice

"interested"

proved by the Board of Governors

thousand

chemists

New

amendment

constitution

re¬

search.^ Several

Exchange
17

Feb.

in¬

ter!

Stock

need

the

Chicago Slock Exchange
New York Curb Exchange (Assoc.)
Chicago Board of Trade '

Bought

NASD Files

does

NYSE Governors

Refinancing
be

At, latest, reports, there
millions

were

fecting all in¬
dustry, world
markets,
financial

Little, Inc., Boston, and
Dr. H. S. Rogers, President of the

discuss

Tele.

New York Slock Exchange

consolidation

price.

have

by the National Association of
Securities Dealers, Inc., against

Boston, Director of the New England

and

be involved.

may

allocated to it in the road's

lines

Dr. Lawrence W. Bass of

italization

348,000

the

Segundo which is completely equipped with practically new i arating the various
parties *
machinery, testing and experimental laboratories;
\
r
■:®®.
*
*
i '
The company will shortly release important information regard¬
La Salle, Street
quarters have
ing definite post-war contracts, some of which are national in scope been
buzzing with rumors of im¬
and should reflect excellent earnings on the small capitalization of
pending management changes of
128,000 shares of common stock. These contracts are exclusive of any the
Chicago and Eastern Illinois
commitments in the aircraft industry.
Railroad.
One of the above mentioned contracts has to do with the manu¬

Isiduslry
To Be Surveyed By Dr. L W. Bass

that,u although the
changes are still in the talk stage
and may not materialize, a def¬
inite announcement may be ex¬
pected soon. Ultimately, a recap¬

and

at EL

Post-War Outlook For Chemical

said

able

only-the

Segundo Division.' All other plants are DPC. At the cessation of
hostilities they can contract back to their debt-free original plant

affected.

city

facturing of a dispensing machine, new in design and principle.
Interstate, in addition to the manufacturing of this machine, will
also have the exclusive sale, distribution and servicing on the west
coast which comprises about twelve states. This machinne is to be
used in the dispensing of America's most popular five-cent drink.
The management has taken a liberal viewpoint in the past
regarding dividend policy and an answer should be forthcoming
regarding their decision on further quarterly cash' disbursements
before the end of their fiscal year, April 30, 1944.
•,
•
Renegotiation of 1942 contracts was completed. Earnings wei-e

been that the negotiators of
the

Interstate Aircraft and Engineering Corporation enjoys an envi¬
able position in the aircraft industry inasmuch as they own

riot

Randolph 6960

HICKS (r PRICE

(Continued from page 944)

-V

Tel.

.,*

CHICAGO 4,

Telephone RANdolph 4068

Inlerstale Aircraft And

Preferred

Established 1922

CO.

FA I R M AN

Stock

C. L. Schmidt & Co.

& Co.'

BUILDING

Tel. WAB. 8686 and Western Union
Telephone

Common

release

) These contracts

Central Elec. & Tel.

POST-WAR

Common

INTERNATIONAL DETROLA CO.

$ 0.60 per share

value^sapproximately^-

Fuller Mfg. Co.
'

-_^__l_-^l___-__---.--i.----$B47>i)50.43

Corp'n

Common

CHIC., WILM'TON & FRANKLIN COAL, COM.

A'V£ 0.58

January 31, I!)44__J__

approximately

Book

Reliance Steel

CONSOLIDATED ELEC. & GAS, ALL ISSUES

.HIGHLIGHTS

Earnings after taxes for 5) month period terminating January 31, :lJ>44__„'_$54y,445.4?)
Earnings per share after taxes, for same period__,_^__i^i_-__-^---_l--l-->
$4.28
Earnings per share after taxes for month of
v

5Vis OF '52

Hickey,

FLOYD II. CEKF CO.
Exclusively

120

Wholesalers

South La

and

Salle

Underwriters

Street

Chicago 3
EMMBEasaaaMW

THE

996

Thursday, March 9, 1944

COMMERCIAL & FINANCIAL CHRONICLE
Bid

Boren Bill

Specif ics!S^ Exempts SiinicipaSs From
SEG Gosilrol And Garbs Agency's Powers

CONTINUOUS INTEREST
Pfd.

Hearst Cons. Pub.

Pfd.

Paper

Consol. Water Power &

Central Elec. & Tel.

Nekoosa-Edwards Paper Com.

Northern Paper

Mchy. Com. & Pfd.

Hamilton Mfg.

Old Line Life Insurance

Measure Viewed As

First Move Toward Preventing Exer-

Functions Beyond Intent Of Con¬

ercise Of Regulatory

Com.

Globe Steel Tubes

Koehring C6. V.T.C.

Compo Shoe

Pfd.

[ Would Amend In Important Respect Present Pro¬
vision Of Law Endowing SEC With Authority To Make
Own Determination Of -'Fraudulent Devices- In Secur¬
gress.

Mills Com,

Class A & Com.

ities Transactions.
(

r."

This bill

' '

1 '*

\f U

;;

share on the Common stock, compared with $1,510,equal to $2.03 a share on the Common stock a year previous. The

000

not bor- <*>this at Roosevelt

$15,000,000 but was

for

rowing any money against
the end of the year.

will pay a 350
on March 15 to holders
March 4. In the similar

dividend
of record

the company

quarter of 1943

Company re¬

i Waukesha Motor

of $396,000 or
the first half of
its fiscal year ended January 31,
compared with 860 a share in the

ports net income
/ 990 per share for

period of 1943.,

same

;

Milwau¬

Corp.,

Ilarnischfeger

imon
or

for

$1,445,000

share, in contrast to

$4.79 a share in 1942. Reserves

renegotiation and other con¬

tingencies in 1942 were $450,000.

Wisconsin Investment Co., Mi¬
reports asset value of
$3.01 a share as of Dec. 31, 1943,
i

lwaukee,
•

j in contrast to $2.20. a share twelve
[months previous. This represents
j an increase of 36.8% in asset

fvalue during the

Giving

year.

French

Act

"such

f- U

Frenchmen, now underground,

Lyle'H. Boren

spring upon their Nazi conquerors
and help smash them into defeat.
The
President, in making this

existing

securities.

circumstances,

Under

the

SEC

has the power to label any "acts"
consonant with its

not

and

regulations

own

rules

fraudulent

character ■ and criminal in nature.

Representative Boren's bill is
viewed by many as the first-step
toward restricting securities reg¬
ulations

clear

administration
tent. > The

and

concise

legislative

in¬

predilection of various

administrative
agencies
greatly exceed the. powers con¬
ferred / upon f
them;
reportedly

Federal

Congressman

one

re¬

cently to suggest that all bills

lating to such bureaus

re¬

the
sentence, "By God! We Mean It!"
carry

Brazil's vEeonomic: PosHion.

Improved By^ War,
Hew York University Survey Shows

v-listpt icommerrial

deceptive

"ex¬

* which

paper,

bankers'

transactions

prompted

iti;es";-:v'to "the
clause

choice

own

contrivances

manipulative,

change Act of 1934 and the Maloney Bill of 1938, the SEC at¬
tempted through the medium of
its proposed, and long dormant,

the

its
or

empted secur;

———-———

•

devices

expressly stated in the Secur¬
ities Act of 1933, Securities Ex¬

simply, amend
this section by

under

otherwise fraudulent" incident to

1934.

word

of
will

millions

when

Exchange

adding

presentation to
under, lend-

Navy,

distant

Securities

The bill would

lease, of the hew destroyer Senegalis, on Feb. 12, President Roose¬
velt stated that the time is not
far

signif¬

authority

The

^ac-

ceptances

war

industrialization and eco¬
Brazil and has improved materially the in¬

has accelerated «the process "of

nomic diversification of

ternational financial position of the country according to a bulletin
entitled "Effect of the War on Brazil's Economy" issued March 6 by
prohibition against "the use of Dean John T. Madden, Director of the Institute of International
forecast, said the Associated Press,
noted
that
French
ships
and manipulative^ deceptive, or other Finance of New York University. The Bulletin States:devices
or . contriv¬
French
troops are fighting the fraudulent
; "While in 1938 the traditional<&ances" in dealers transactions. In
Germans in Italy and added:
war caused a substantial increase
geven staples—coffee, cotton, co¬
"The time will come soon when addition, however, the bill would
coa,
tobacco,
hides and, skins, in currency in circulation and de¬
the Nazis in France will learn eliminate from" the - above-men¬
rubber and mate—accounted for mand deposits.
But the gold and-!
from millions of brave Frenchmen tioned section the sentence, which
75% and manufactured goods for foreign exchange holdings of the'
reads:
"*
•
/" -' "
' *
—now underground—that the peo¬
only 0.36% of total exports, in Treasury and the Bank of Brazil;
"The Commission shall, for the
ple of France, also, are not out
J942 manufactured products in¬ have also shown a remarkable in-;
of this war." From the Associated purposes of this sub-section,* by
creased to 14.9% \and the seven crease, reaching on Sept. 30, 1943,
Press we also quote:
;
§ rules and regulatibns define such staples declined to 33% of total 198 tons of gold worth $222,825,000
Presentation of the warship, Mr. devices
or
contrivances" as" are
exports." It is also Stated that for and 4,072,700 contos or $203,635,000
Roosevelt said, "emphasizes the manipulative, deceptive, or other¬
the first six months of 1943 manu¬ in net foreign exchange balances,
determination of this nation, and wise fraudulent." • I * '•**
This
factured
commodities .accounted or a total- of $426,460,000.
of all the United States, to drive
Representative A Boren's reason for 22.6% of exports. Thus, it is amount represents an almost ten¬
from the soil of France the Nazi for urging the elimination of : the
added, "Brazil is turning away fold increase over the correspond¬
invaders who today swagger down foregoing sentence is that it gives
from an economy depending for ing figure on July 31, 1-939.--The •
the Champs Elysees in Paris."
the SEC unwarranted legislative
its well-being mainly on the ex¬ ratio of gold and foreign exchange
Saying he hoped the "Nazis.and power, since this section mf the
portation and prices of coffee, to notes in circulation on Sept.
the Japs are listening," the Presi¬ Act is a penal statute, and the
foodstuffs and raw materials. Agri¬ 30, 1943, was 84.7%.
dent promised Vice-Admiral Ray¬ courts
have held that
a
penal
"Under a decree of Oct. 5, 1942,
culture, however, still employs
mond Fenard, Chief of the French statute must define
the; • offense
about eight times as many Work¬ notes issued by the Treasury to
Naval
Mission
here,
that
the with certainty so that the citizen
ers
as ; industry - and
provides ~a the Rediscount Department must
"speedy,and dangerous" destroyer may know exactly what is| un¬ livelihood for
approximately 75% be [secured by • gold and foreign %

commercial bills as excluded from
the

kee, reports net profit of $1,174,[000 after taxes and provision of
I $600,000 for renegotiation for
j 1943. This is equal to $3.84 a com'i

Presents

Incident to the
the

(1)

(c)

and.

Warship To French

paid

the

'.: Cutler-Hammer
.

V loan credit arrangement

outstanding Regulation

has an

company

section

under

•

have greater

(C)

regulations

probability that it will soon find
its way to the floor of Congress.
It is of particular interest to
dealers in municipal securities as,
contrary to the will of Congress

SEC

the

by.

•equal to $3.08 a

sibility of regulatory action

ob¬

(I) of the Exchange
Act of 1934 to define by rules and

mittee on Interstate and Foreign
Commerce. There is considerable
^
m'

from the pos-

Inc., Milwaukee,

transac¬

....

governmental

present

Section

H. Boren, Repre¬
referred to in the
11, 1943, p. 906).
dealings in state and municipal

specifically aims to remove

showed a large increase in
! earnings for 1943 after provision of $1,000,000 for possible inventory
i
losses" postwar adjustments and renegotiation. Net was $2,034 000,
1

include

it will ,deprive the SEC

its

Municipal Securities Committee of the Investment Bankers
urging- passage of "the Boren Bill" (H. K.

vsecuritie s'*5—

Cutler-Hammer,

icance

are

>•

bill will

the

1502), introduced on Jan. 23 of last year by Lyle
sentative in Congress from Oklahoma. (Previously
Chronicle of February 4, 1943, p. 157 and March

Teletype MI 488

Chicago: State 0933

Daly 5392

PHONES

local

ligations within the scope of its
regulatory powers.
Aside from
this point,
however; passage of

Association of America is

MILWAUKEE (2), WIS.

ST.

EAST MASON

The
225

tions. in

National Tool

LaPlant-Choate Mfg. Co.

Asked- disclosureRule.

*and

X-15C1-10,

■

[effect to dividends of 150 per
i share paid during the year, asset
j.value increased 43.6%. Net profits
[for the year from all sources to-

$89,036,

| taled

equal

to -approx-

imately 200
The

per

share.

described

what

made

company

receive

will

temporary reduc¬

only ship you

not the

"is

escort

from

building others for

are

us—we

lawful.

sailors to "unlawful

your

which

man.",

[

technicalities and the
delegation" of power
(c) (1) in its

The legal

;

section. 15

pf, the population."
In
war

: .oj ■

analyzing the effect of the
Brazil's foreign trade, the

bulletin states:

Vice-Admiral Fenard,

accepting present form confers; upon the
"The war also had a profound
the vessel, paid tribute to the con¬ SEC, was the subject of a recent
tinued fight of Frenchmen both article by David M. Wood of the effect oil the foreign trade of the
within and without France.
Exports increased rap¬
New York municipal law firm of country.
'

tion in the

use

of borrowed cap¬

ital during the year

from $250,000

and

Cash

$100,000.

ments
year

hand

at the

Govern¬

end of the

totaled $132,210.

Wood, Hoffman, King & Dawson*
though France fell, her fleet still In analyzing the- various possible
interpretations of the section, Mr;.
is fighting;
Wood declared that "if the sec¬
"At
Nettuno
and
Anzio," he
ond sentence of the section has
said, "French ships were among
meaning at all, it confers
those which bombarded the Ger¬ any
upon the Securities and Exchange
man coastal installations."
Commission a power of, legisla¬
The President remarked that al¬

idly while imports were adversely
affected

by the lack of shipping
facilities and the scarcity of man¬
in Brazil's cus¬

ufactured products

•

are

interested in:

Chgo. Milw. & St. Paul

tion—the

power

declare acts,

H. J. Borne Joins Staff Of

Holley, Dayton Co.

"Rock Island"
Missouri Pac.

which were not theretofore

■

FOND du

■

LAC, WIS.—Henry J.

Borne has become associated with

UNDERLYING

SECURITIES

3237

//•

Gernon, 208
Street, Chicago.
Borne, who has been in the

South

Tele. MI 592

Dayton

business

for

many

formerly conducted his

investment
name

Salle

investment
years,

MILWAUKEE 2, WISCONSIN

Tel. Daly

Holley,
Mr.

First Wisconsin Nat'I Bank Building

business

own

under

of H. J. Borne & Co.

"Active .Trading Markets in Wisconsin Securities!
-:'rl
■ '
■ '■■■
Common Stocks
Lr ^re^erred Stocks
■

Lake Superior District Power Co.

Chain Belt Co.

the

crim¬

about

cents

cur¬

Although foreign exchange
restrictions are still in effect, they

rency.

not interfering with the move-/,
ment of international trade and

are

balances

foreign

for

unpaid

claims have accumulated in recent:

years."
The

bulletin

concludes

with

discussion of public finances, and
in

part says:" ;~

."The Federal debt-of Brazil has "
increased considerably during the

revert to

Congress,

where it be¬

mission."-;:

Le Roi Company

Wisconsin Power & Light

Wisconsin Bankshares

Co.;

THE WISCONSIN COMPANY

Bell Teletype MI 291

MILWAUKEE 1, WISC.

50%

came

from: the

reviewing the currency " and
banking .situation, * the - bulletin
has the; following to say: "Brazil

Koehring Co.

Wisconsin Michigan Power Co.

than

notice^
able was the increase, in the trade
with Argentina and South Africa."

Kearney & Trecker Corp.
:

longs.' Indeed he might have gone
further and stated that Congress
had no constitutional/right to at¬

Wisconsin Gas & Electric Co.

worth

Wisconsin Electric Power Co.

"•

unit, the "cruzeiro," equal to the
milreis, which it displaced, and/

of¬ 1943 the excess of exports over last few years and amounted to <
im¬ imports * amounted '■>: to 1,318,000 18,504,500 contos at the end of
contos ($65,900,000), as compared
prisonment, or both,"1942 as compared with 12,063,300
In expressing .approval of the with' 228,000 contos during, the contos at the. end of 1937. While
same period in 1939. The war has
purpose and need of the change
the total debt has increased, the
proposed in-the Boren bill, the also affected the I; geographical external debt was reduced in the/
of
Brazil's
foreign
noted New York attorney wrote distribution
years 1940 through 1942. On Nov. r
trade. During the first six months
as follows: 25, •' 1943,; the - Brazilian Govern¬
"Congressman Boren is; there¬ of 1943 nearly 75% of the total ex¬ ment announced a permanent set- /
fore, manifestly r right y in -.taking ports went to Western Hemisphere jtlement of the outstanding dollar.,
the position that the second sen¬ countries, of which 55%'was ab¬
and sterling bonds of the Federal
In
tence of this section should be re¬ sorbed by the United States.
Government;. states ^ and I raunici- ;
the same period over 89% of the
pealed. His position is that with
imports ? originated in the paljties, the Coffee Institute of the ;
the repeal of this sentence the total
Western
Hemisphere, of which State of: Sao: vp'aulo and. of the
power to define the offences 'will

tempt to confer this power upon
the Securities and Exchange Com¬

Telephone Daly 0525

1942, at 2,851,000 contos ($142,550,000); was the highest on rec¬
ord.-For the first six months of

date established a new monetary

inal,
to constitute Federal
fenses, punishable by; fine,

(Special to The Financial Chronicle)

GIVAN COMPANY

tomary sources of supply. As|a
result of these developments the
excess of exports over imports in

exchange assets to the extent of
25%.. Another decree of the same

The

United States. Particularly

Boren-bill, if! passed, will

has

check

the

undoubtedly

provide

central bank

central

bank

and some of

functions

are

Banco

whole,

able

was

•

considered

.conditions may not

after the

sub-committee of the House Corn/

the plan to make

sacrifices, yet,-on the•
as *

equitable^ since the current favor-

tries, the intensified economic activity since the outbreak of the years.

to have the support- of
members of Congress, and
is now under consideration by a

under

quired

many

ported

Estaljo^.^ Sao Paulo. I
bondholders are re- !

substantial

performed, by the Rediscount De¬
partment of the Banco de Brasil,
while currency notes are issued by
the Treasury.
As in other coun¬

against the expanding regulatory
activities of-the SEC;k It -is re¬

Although, the

war/The

new

continue

settlement

»
.

■

makes

provision for amortization, *•

which

will

external

gradually reduce the

debt. over

period

Volume

THE COMMERCIAL & FINANCIAL CHRONICLE

Number 4262

159

997

1^1
f

;

tlie

V..

PER DOLLAR OF OPERATING

REVENuil-n

till
SUMMARY OF 97th ANNUAL REPORT which

February; Operating

mailed

was

increased $141,298,532

revenues

$85,418,484,

was

THE YEAR1943

continued

war

dominate the ever v
increasing transportation effort. While performance was highly satisfactory from, the •"
standpoint of meeting every demand of. the
war
emergency, it could not of necessity be wholly adequate from the standpoint of the J.;

transportation can supplant the railroads ununintelligent regulation, Excessive subsidizatibn of competitors or inequitable
•

tax<?!sliall

■

overburden theni

as to

('■Them of equality of opportunity,
in any sound economic order.:

be viewed

as a

creditable achieve-

deprive

before.

■

? ?

-■

its

increased $141,298,532 due to
the greater volume of traffic, both
passenger
revenues

for

less

than

1942

proc- ?

some

operating

this

1943.

rate

were

of regulation have made-it necessary
of" the financing by the railroads to

reasonable

•-•

Jn 1943, the railroads performed a service
unequalled in the history of transportation.
They were called upon to handle a volume
of freight and passenger traffic exceeding

that of the record year 1942,
The

volume of traffic

;

splendid cooperationibe- '
tween
the railroads, the shippers and
employes, the Army and Navy, and other
agencies of Government, and to the con¬
tinued helpful attitude of the Office of
Defense Transportation.
to

The railroads look

the future with the

profits

tax

their investment treated

not

return

•'

only to!deprive them^
on

their

of wartime traffic.'

in
.•

Net Revenue

,£

asr

•

well

Net Income

\t [

•

increase of 3,653 compared
1942, with an average

31,

•

fj
1

WAGES AND TAXES

MILLIONS

***

DOLLARS

38!

331

and in the

tered the Armed Forces, serving
part

forms,

TAXES
i

DOLLARS

125

1^==

F—Tl

-|'

h—j

en¬

in;every:

be trained

cluding 2i,730
Never

ployes

were

burden
gcously,

new

1943

employes have

take their places, in¬

women

who

the demands

are now

Recent wage

in the

upon

the

vaca-

by approximately $45,000,000 annually.
nU

never

M> w>

increases, together with

tions with pay, based on present force, are esti¬
mated to increase the expenses of the Company

em¬

have they met the
efficiently and i more coura-

great;

more
j

1942

sacrifice.

Many thousands of
had

181

MILLIONS

<?f the world, of whom 123 have made

the supreme

■

;

CLEMENT, President

•

316,262,444

180,405,491

•

6,166,208

♦

...

roads, and interest

a;' Appropriations to Sinking and Other Funds,

etc.

U> &lu)ij?;Retirement of matured Debt—Penna. R. R. Co.

•

....

$33,114,000

$29,615,000

127,546,41 i'

23,898,141

' '

/
$124,000,000

17,731,933

;

REDUCTION (1939-1943)

55,826,689
D

•

FIVE YEAR

31,928,548

^135,856,953

in hands of public

$141,298,532
109,369,984

8,310,542

,,,,,,,

Comparison with 1942
I

663,510,711

the press

44,448 employes of the System have

;

•

Fixed Charges, chiefly rentals paid to leased
the Company s debt,
•
.
.•>.
:

•'\1 *

The Board takes pleasure in acknowl¬
edging the continued efficiency and loyalty
of the employes, which made possible the
y handling of a volume of traffic exceeding
that of any year in the history of the

•

from operations,

reduction in system debt

42,503,518
170,049,929

of each

THE EMPLOYES

Non-Operating Income, chiefly dividends and interest
securities owned

Company's

cents out

in the annual report;

$979,773,155

Gross Income */.

TIA « Jtt E S U L T S

•

Hire of Equipment and Joint Facility Rents

18.4

•

Net Railway Operating Income ;Vr

}

Company.

Today, while the railroads are doing the
largest business in their history, it would be
advantageous not only to them, but also to
the, public, at [large - and; to ; railroad i em¬
ployes as a wfipjlc,) ifi.'tfie ta^ -laws wtfre
,' y -. y :02
>
ranti*-. j/l istX' 'lOf j;

V'*.-

Railway Operating Income

revenues

railroad service.

Taxes

announcements

;

Vf. •'

dissemination of information in other

1943

when the railroads had to borrow large
of money and go into debt to
revamp
their properties.
'

O P EIIA

Operating Expenses

of the

The management
the cooperation

•

whole—taxes—the

operating revenue, the equivalent of
27.4% upon the Capital Stock, or $13.72 per
share, an increase of $4.24 per share over 1942,
As a resulr of the heavy increase in taxes, the
Net Income of the
Company was less than in
1942, notwithstanding the large increases' in

is always appreciative
extended by security
holders, the public and employes. It recog¬
nizes; its responsibility to keep - the stock-;
holders, the employes and the public generally, informed as to the Company's
business, service, finances and other im¬
portant matters, which is done through
advertising in^newspapers and magazines,

war,

with December

sums

they will keep in the fore¬
front of irtd us trial progress, and will meet
successfully the competition to be expected. (
They are convinced that no other form of

Operating Revenues

dollar of

holding of 62.8 shares.

unfortunate path as at the close of the last

conviction that

;

■,

stockholders,

railroads of large post-war reserves to meet y
post-war changes in transportation practices '
and methods, but the tax
pplicy- of the }
Government is heading them along the same

further improvements in facilities and
oper¬

ating methods;

burden, amounted

The Capital Stock of the Company at the
close of the year was owned by 209,618

Sound public policy not only justifies but
should require the accumulation by the

handle
due! to

return on

reasonable

pressure

•

was

Taken
chief

STOCKHOLDERS

investment, - ;
but to prevent them from laying aside out of
current; earnings
the reserves needed for:
future expenditures which are being made
inevitable by wartime conditions and the

ability of the railroads

this record

During the last five years, there has been a
reduction of $124,000,000 in the debt

The effect: on the railroads of the so-called

yyy •:

net

excess

THE NATIONAL EMERGENCY

of the System in the hands of the public, *

profits and subjected* to an
enormous excess profit! tax;; where in fact,
no excess profits exist./ • •, X
(■ ;
is

;

accordingly .paid

public of $33,114,220.

most

position to carry adequate charges for
depreciation and obsolescence-amortization,
properly be charged
i; off fbr'these purposes is subject to the excess
profits tax. Thus, the railroads find,'a large
part of what is, in fact, no more than a

1942, namely, 5%,'. or $2.50 per share." Divi-J
in

vv;/,■

■:vy:

of System Companies in the hands

and income which should

costs and taxes men¬
tioned above. It seemed wise to maintain
y;
the dividend at the same rate as/paid in

dends

period.

issuance of $12,240,000 Equipment Trust
Obligations, makes a net reduction in debt

;•

now

$16,050,309 because of the substantial'in,creases

permit the creation

Pennsylvania Railroad System has
purchased during the year debt in
the hands of the public amounting to
$45,354,220, which, after allowing for the

be done with borrowed money for which
they are not given adequate credit in calcu¬
lating return on investment. Again, the railroads have not been, like other industries, in

Despite the fact that the Company in 1943
did the largest business in its history, its Net
was

position and needs.

esses

and

Income

During the last several decades, the

freight, but this very fact, together with
higher costs of material and fuel and:increases in
wages, resulted in an increase in
operating expenses of $109,369,984. Atjthe
same time, taxes increased
by $55,826,689,
or 44.8%, over the
previous year,
1

(FUNDED DEBT

;

Notwithstanding decreases in rates, operat- /

ing

SHARE OF STOCK

The

There was a heavy increasev in i the ;
volume of business handled, the railroad
being operated to a greater capacity than i

in the post-war
rA-aiyy;^;Ayy.yy

•

essential

heavily taxed in-,3 "
dustry, arc accustomed to bearing their full
share of the cost of government; and well !y
realize; that any excessive ptofits derived
from the war effort should be subject to
yy taxation as are the excess profits of any other
'industry; but the determination- or what
profits are excessive should not ignore the '
plain facts respecting'the railroad industry,

ment.

ever

PER

Net

year.

I 1940 I 1941 I 1942 | 1943

of the reserves needed for post-war rehabil¬
itation} with resulting greater employment

•

retired

The railroads, always

;

larly the passenger
considering the abnormal conditions that-,
prevailed throughout the year, the results as
can

1939

performed,.-particu- ;
service. Nevertheless;}

whole

amended

less

character of the service

the

over

decrease of $16,050,309.

The

the end of

1942. Operating expenses in¬

oyer

creased $109,369,984. Taxes increased $55,826*689, or 44,8%

income

stockholders

I
D

1,406,637

84,631,445

16,050,309

■>

17,311,000

13,069,000

!STT-Sr;

274,987

1,924,119

,,;,

$23,709,000

85,418,484

IMS!

16,325,296

r;f;Vs

ai!

2,187,197

$20,668,000

2...

■■■

.»•

i..

...

$I7; 139,000

794,112

f>;,(I>oes not include $28,425,431 of matured debt of leased lines

'io

0,;a
'

Dividend of 5% ($2.50

per

share)

32,919,385

Transferred
i

credit of Profit and Loss

33,263,980

Serving the Nation
BUY

UNITED

STATES

WAR

BONDS

AND

litA?'

STAMPS

inhT

tU'd'

During the last five

years,

there has been

net1 reduction of $124,000,000 in the debt
the System in the hands of the public.

•»'

I-

i
o

998

period

post-war

Mutual Funds
Letter

The current issue of Hugh W. Long & Co.'s New York
a unique contest based on!the question, "What Industries
Will Lead in 1944?"
The basis for determining the best answer will
■

announces

13%%

the

from

rates

normal

//;

Keynotes.. In

and

the

1932-1935 up to the 40%
normal and surtax and 90%? excess
years

I843

Holdings Of Mortgages & Securities In

combined

during

surtax

Companies Increased

Life Insurance

the Keystone Corp.
rise in corporate, tax

the

traces

Industrial Selection

presented

the current issue of

this discussion,

American life insurance

companies in 1943 increased their hold¬

ings of securities and mortgages by $3,310,000,000.
The
policyholder funds so invested amounted to $32,270,000,000 at

total of
the year

end as compared with $28,960,000,000 at the end of 1942, according
profits tax which was in effect
to an analysis made by the Institute of Life Insurance and made
performance of the various industry stock groups of during 1943.
•
public on March 6. The report also said:
/ New'York Stocks, Inc. ";"■ ^^
./://
The bulletin scouts the theory
Holdings of United States gov-^Contestants are required to name the seven industry series of
heard in some quarters that- it will
emment
securities, representing 000,000, but due to maturities and
New York Stocks which, in theirsbe impossible to eliminate excess
direct financing aid to the war pre-payments, holdings showed a
opinion, will stand at the top of
net
decrease
of
$50,000,000 to
profits taxes after the war, because
effort, increased $3,340,000,000 as
of the increased needs of our Fed¬
/ the list with regard to market
Holdings of city
compared with $2,300,000,000 the $840,000,000.
performance during 1944. At the
eral Government.;
It is pointed
mortgages, of which $750,000,000
year before, and at the year end
I end of the year the contestant
out that the excess profits tax on
were
acquired during the year,
aggregated ,$12,730,000,000 or
having made the most accurate seamounted to $5,830,000,000 at the
corporations could be eliminated
.nearly 34% .of the companies'
lection "will receive a $500' first
without serious loss of revenue.
./
.-../a
total assets. The increase in hold¬ year end, an increase of $40,000,i
prize. Other prizes ranging from
000 during the 12 months.
Today this tax provides approxi¬
ings of these bonds during the
i $250 to $100, for a total of $1,150,
Purchase
of .Canadian,
mately $10,000,000,000 out of- a
state,
A Class of Group Securities, Inc. :
year was greater than the over-all
total tax revenue of approximately
\ will be given for- the next best
increase in investment holdings county and municipal bonds were
answers. All prizes are payable in
$43,000,000,000. : If it were to be and also greater than the increase 50% greater than in 1942, amount¬
maturity Value
of U. V; S. War
Prospectus on Request
eliminated, the same income would in assets. Purchases of U. S. gov¬ ing
to
$3*30,000,000.
Notwith¬
•V".'
> v/:./• f
i Bonds,
series E. Only members
automatically become subject to
ernment bonds absorbed almost standing, holdings of these bonds
and salesmen of affiliated"investthe 40% normal and surtax rate
75% of the funds which were in¬ reported at $2,600,000,000 showed
] ment firms are eligible to comand the Treasury would immedi¬
a net decrease in the year of $90,vested in mortgages and securi¬
V pete.
/
^
GROUP# Incorporated ately recover $5,000,000,000 of the ties. At the year end, holdings of 000,000, as the companies sold
One of the important results
$10,000,000,000 through increased these bonds represented $187 on part of their holdings to provide
i
63 wall street—new york
this contest may be expected to
revenue
from normal • corporate
funds for purchase of U. S. gov¬
the average for each of the 68,achieve, aside from encourag¬
taxes.
ernment bonds.
»
I
000,000 policyholders.
:
ing a more careful appraisal of
Further substantial progress in
If, in turn* the other $5,000,000,"There
has been too much
/The extent. to which life in¬ the
the outlook for various industry
liquidation of foreclosed real
000 were paid out to shareholders
loose parroting of the slogan
surance; investment funds,; repre¬
stock groups, will be to create
estate was indicated by a decrease
as
dividends, taxes from indb
that
if
individual V enterprise
senting the; pooled resources of in farm
a
continuing consciousness of
properties by $140,000,000
vidual incomes should be increased
fails to" provide jobs for every¬
policyholders, are being directed
the really remarkable variation
by approximately $2,000,000,000. to the support of the war effort to $340,000,000 and a decline in
one it must be replaced by some
in performance among separate
urban properties of $180,000,000
Thus, the elimination of the pres¬ isfurther
one
of the other systems that
emphasized by life
industries.
'
to $970,000,000.
ent excess-profits tax, other things
are around. The war has been a
insurance company subscriptions
/:;// Last year, for example, the
being equal, would actually result of
REPORT OF LIFE INSURANCE
*
crucible for all" the - economic
approximately $1,700,000,000 in
merchandising and public utility
in a loss, of only 30% of the rev¬
COMPANY INVESTMENTS
the Fourth War Loan drive," the
systems of the world, for our
series of New York stocks ad¬
enue from this "source and a re¬
(Millions of Dollars)
Institute said. "It is significant of
own, for Communism, Fascism,
vanced
over
50%, while the
1943
Year-End
duction of only about 7% in the
Nazism—all the others. And the
the constructive role of these
metals and chemical series adPurchases: Holdings
total; income tax revenue > of our funds in the economic life of the
American system has out-pro¬
tvanced less than 10% and the
Bonds:
Federal Government. ' ♦ '
"
v
$12,730
duced the world.
$6,020
nation
that this investment in
U. S. Governments
aviation series actually declined.
1

the market

■

STEEL

♦

DISTRIBUTORS

/ Only when the investor realizes
that proper industry selection
all the difference between success and failure will
sufficient attention be given to

can mean

this vital factor.

/i://;/-//;

miracle

Research

published

has

Corp.
'

discussion

| Effects of

helpful

Corporate

"Some

This new tax law, which
underscored recently by Con¬

issue

lasting

and

hot do so if pres¬
groups
are permitted
to
that productive
capacity
a
battleground for their

sure

turn

ourselves out of the

the

Investment Co. makes neat

appli¬

gressional enactment over a Presi¬ cation of one of President Roose¬
It is
dential veto, will -not have any velt's early political slogans.
marked effect on the majority of entitled, "The Underprivileged In¬
corporations,
according
to
the vestor," and • reads in part as
follows:

,.y

"You remember the ill-fed, illconclusion, it is stated that
(corporations/ with high housed and ill-clothed "third nof
earnings will be affected by the our population we used- to hear so
excess-profits tax increase ./ from much about. But did anyone ever
90% to 95% and the reduction in focus attention on our ill-diversi¬
Their plight is no
invested capital exemption; others, fied investors?
already benefiting from the 80% less real, even-, though it -is not
Certainly,
tax ceiling, will remain immune. so basic or dramatic.

changes
be

most

noticeable

cases

of major
by

since tax effects,'unless

character,

may

income,

net

often obscured

are

there

are

vast numbers of under¬

privileged small investors:—under¬
privileged because their invest¬
ments are not adequately diversi¬
fied.

other factors."

previous issue of Investment /; "No one will deny the problems
Timing contains an encouraging confronting the person of limited
A

article

Antidote-

"Inflation

High Production and Low Taxps."
The
danger of inflation ishot

when he sets out to achieve

means

readily available solution to

minimized, but

it is pointed out

these

that

prevent infla¬

tion

the
are

means

at hand if they are wisely

are

In. summing

the following
quotation from the Baruch-Hancock report on post-war adjust¬
ment policies is given:

and

problems,

the answer."

This principle

up,

and

investors and their advisers

recognizing the mutual invest¬

ment fund

used.

there

diversification. .Fortunately,
is

is given

.///v/

of diversification

unusually broad applica¬

tion

in the portfolio of Common¬
wealth Shares and, judging by the

performance of. this fund, the di¬
versification has been as skillful
as

it has been broad,
*

Keystone

the

eight-funds

Lord, Abbett group.
\i.V

-:Jr

•/•/--°T.

Hare's

interesting and pointed dis¬
on corporate taxes
in the

cussion

Custodian Funds

«'

••

Ltd.

• j

$■

•

Shares.

has announced

This

the

Bond Group
offering

new

was

registered with the SEC and va¬
rious States before the outbreak

"However," as-stated in

iheannpuricemeht letter //imview
of fheT

Other

government bonds has been

Industrial

purpose'"of; the"furid/being:

largely the proper 'timing' of in¬
vestments, it was considered ad¬
visable to delay actively, merchan¬

that while

$210,000,000

in/ 1942, '
net decrease of

$140,000,000
showed

000 during

000. / Purchase .• of
bonds amounted to

Participation in

investing theif capital

Series

B-l, 2, 3 and 4 in Bonds

public utility
$380,000,000 as

the year

Series

5-1, 2, 3,4 in Common Stocks
Prospectus
your

may

Research

be obtained from

local investment deale*

LOS

ANGELES,

BOSTON,

The Keystone Corp. oe Boston
5« CONGRESS

STREET, BOSTON, MASS.

CHICAGO,

634

NEW

the

issue of Selections.
Abbett—A revision of the

current

Lord,

•%■.///

Trusts

Inv. Trust

Quarterly Income Shares
Other

National

Securities

Research

Issues

Fund;

208 So.

Spring St.,

,"ti

St.

'-if-

•

/Dividends

payable* March 15 to shareholders
of record Feb. 29, 1944.
:
Maryland Fund, Inc.—A distri¬

(4)
*•

of 6

cents per share pay¬
15 to stock of

1944..

record

the New
Commerce" that
the international monetary con¬
ference
whieh Harry D. White,
Treasury currency expert, stated

York "Journal of

COrtlondt 7-9400

New York 5, N. Y,
Teletype NY

1-1950

principles.

Massachusetts Investors

Second

of 10 cents
a
share,'; payable March 20 to
shareholders of record Feb. 29,
1944.,

•

........

-..-.'m

,:t

The result has been a

one-sided

meeting with Treasury represen¬
tatives thus far unable to get an¬

to the
such queries
first., through

their

questions

Russians,

since

all

swers

Moscow..

cleared

v..-;/'""'

■

Favorable Outlook/'
Jonas & Naumburg
an

.interesting

Corp. offers

situation

with

definitely favorable post-war out¬
look, according to a
issued

•'-/'

Fund, Inc.—A dividend
120 Broadway,

indicated

March 7, according to

must

Custodian Funds—
Semi-annual distributions of 35
cents a share on series B-4 and
55 "cents a share on series S-l,
Keystone

Feb. 29,

(14)
(9)

La Salle

bution

Traded

(5)

Post Office Square

Bankers in New York
on

Corp.—Revised -current* informa¬
tion. folder on the National Securi¬
ties Series arid First Mutual Trust

able March

YORK,

Conference Is Planned

Corporation

BROADWAY,

Internal! Monetary

National Securities &

$33,580

in
of was nearing the parley stage will
reported at $5,150,000,000, probably begin sessions late next

compared /. with
$520,000,000
1942, with holdings at the end

Mass.

Prospectuses upon request

K-l, 2 in Preferred Stocks

$8,540

Total

Manhattan Bond Fund'

""1

Series

5,830

——

Dividend Shares

Securities Series

840

750

Other

an
increase of $50,000,000.
The month or the early part of May.
such timq.
companies bought during the year The paper quoted went on to say:
as the present, qe., whep thq butReports have been current that
$280,000,000 industrial and mis¬
come of the waf could be antici-i
cellaneous business bonds, $100,- the meeting will be held either at
pated and; the post-war outlook
White
Sulphur, W. Va., or at
000,000 less than in 1942.
The
for various industries more closely
holdings at the year end were Miami, Fla., with the latter locale
appraised and thus the 'most de¬
$70,000,000 higher at $1,890,000,- favored. Mr. White indicated yes¬
sirable current portfolio of securi¬
000. The investment in stocks was
terday that all sessions will be
ties might.be determined,'///.
open to the press because "we
up $10,000,000 at $580,000,000.
The
initial
offering
price, of
want the public to be as well in¬
Farm mortgages acquired dur¬
Stock & Bond Group Shares was
ing the year amounted to $140,- form ed on the monetary question
as possible."
$12.50 with a regular commission
"r
of 5% to selling group members.
,/It is understood that the Rus¬
Additional
commissions ranging folder, "How $1,000 Gets the In¬ sian delegation, which has been in
vestment Potential of $1,700.
.
from Vz of 1% up to.; 2% \yill be
this country for some weeks con¬
Revised portfolio folders on Union
paid on sales in graduated amounts
ferring with the Treasury, has
Bond Fund B and Union Bond
above $5,000 up until May"l,. 1944..
been the main factor in delaying
Fund. C.
Keystone Gorp.—A re¬ the meeting. The delegates are
vised current data folder on the
/ ;; Fund Literature - - - *
reported to have deluged Treas¬
Massachusetts Distributors, Inc. ten Keystone Custodian Funds as ury officials with queries on va¬
Of * Marfch* 1,
1944.
Distributors rious
—Recent issues of Brevits-discus¬
phases of the world curren¬
Group—A: new folder on Lowsing the Baruch-Hopkins report
cy stabilization program and the
Priced Shares and a new issue of
and the recent Standard & Poor's
world
bank while: at the same
Railroad Equipment News enti¬
time
study of investor confidence. Ser
lacking
any /authority
to
tled, "Post-War Boom Forecast for come to a
lected
Investments Co.—Also a
working^ agreement on
Railroad
Equipment
Industry."
discussion of the Baruch report in

Investment

follows:

970

140

dising the; shares until

Trading Markets:

Trust Funds

340

210

—

Farm

holdings

Certificates of

580

140

pur¬

$60,000,to $2,650,000,-

the year

1,890

Mortgages:

amounted
compared with

5,150

___i.

;T Other

chase of railroad bonds
to

misc.

Farm

dorripanies were maintained sub¬
stantially unchanged at $6,670,.

and

Real Estate:

$10,270,000,000 at the year end, an
increase of $70,000,000, while farm
arid city mortgages owned by the

000,000.'"
-■
'Analysis shows

2.650

280

...

*——___

Stocks

aggregated

securities

business

2,600

210
380

Holdings of

and farm mortgages.

380

Govt.

Railroad
Public Utility

-;S-

•

'•^

offering of Stocjk &

of,war.

"some

not

man¬

Commonwealth

staff of

of¬

quota¬

carries

now

tion® on seven of the

was

The

Press

ciated

A memorandum from

U. S.

carried hereafter
by the Associated Press. As a re¬
sult of these additions, -the- Asso¬

ket."

agement

ferings will be

world mar¬

Timing.

article.

daily quotations! on these two

interests or inflate

selfish

own

Investment

current

;

fine

Lord,-Abbett announces that, as built up without diminishing the
a result of the continuing growth
support extended to the national
of Union " Preferred Stock fFund efcdriomy through investment in
and Union Common Stock Fund B, business securities and in home

It will

pejace.

the New Tax Law" in

i the

another

still

perform

can

into

National Securities &

j"America's productive capac¬
ity

memorandum

by T. J. Feibleman & Co.,

Broad

Street, New York City.

Copies of this memorandum may
be

had

aues/

from

the

firm

upon

re-

--:■

Volume ,159

THE COMMERCIAL & FINANCIAL CHRONICLE

Number 4262

But the bankers

of the

OUR

Virginia Public Service Co.,
inclined to
proceeds, together with those count on calls for bids in the not
the sale of $5,000,000 notes
future on a number of
and certain company funds, would distant
be used to redeem $26,000,000- of these
projects, such as $18,000,000
bonds and $10,500,000 debentures
are

Govt. Portfolios Of

and

REPORT
Several

major

pieces

refi¬

panies.

From

however,
of

one

current

Talking Stage

Several

sizable

other

for

time

New;

bidding

soon,

talking stage.

only

that

undertakings

issued

Gas

interesting

the

folios"

banks.

Light.
Meanwhile

which should attract considerable

when

Natural

deals,
,

interest

Oklahoma

Geyer & Hecht, Inc., 67
Wall Street, New York
City, have

$17,000,000 for Laclede Fn>wer

arrives, still appear to be in the
indications,

appears

these

Still

The current situation in Pitts¬

burgh Railways System, particu¬
larly certain of the underlying
bonds, offers attractive possibili¬

Huff,

dum
and

nancing in the public utility field
moved into sight this week with
the filing of merger and
recapital¬
ization plans by two big com¬
.

bonds

Virginia Public Service.

Pittsburgh Rys. Look Good

Major N. Y. C. Banks

from

REPORTER'S

999

memoran¬

"Government

major New

ties for

Port¬

York

Copies of this and

City
de¬

man

results of fire and casualty insur¬

Jersey. Power & Light will

stocks

ance

reveal plans for undertaking

may

',,

request.

Co.,

Broad

St.,

esting study, which is available to

only,

upon

request

from

may

had

Co.

which will bring the

manner

securities into the market.

new

;YVvJ'^

: Should
the consolidation plan
filed with the Securities and Ex¬

change Commission by the six
holding companies making up the
New England Power Association
system

meet

with

approval,

Universal Pictures

Company, Inc.

the

would call for refinanc¬

program

ing of the several bond issues

now

outstanding.
The

take

new company

Reports to the Public

proposed to

the assets and liabil-

over

■

ities of the existing units would
have a funded debt of $60,000,-

000, embracing new bonds to be
sold to provide funds for the

redemption of existing
tions.
In

the

case

the United

its full co-operation to the Arjny, Navy;

plan to meet the de¬

up a

mands of the SEC has been

one,

now

a long
that public
securities involved

new

bonds

The

proposed in this particular operare considered quite certain
be

lodged

with

large

our

fighting

and Marines
all

men

on common

stock, compared with $2,806,952,

The Company's net working capital
;

end of the fiscal year

men

Reflecting increased earnings and simplification of, the
.

over

Company's corporate structure, the Directors declared
dend of

were

101A l

our

;■

& & &

if*

ffi
549

crops

employees
armed

istration

training

forces

and

inspirational

films

1940

1941

WACES,

1942

1943

PER-SHARE
COMMON

17\.

STOCK

nr~^

29;

..%V'V
19c

move

KHH

newsreels, informational and morale-

i The

entertainment films for

building films for the "home front"

market,

placed in

was

reg-

made at military and navy bases in this country.

pictures

iii October, fast
delaying amendment

Training films

subsequently late in

are

being produced for the Armed Forces and

for the government at cost. In countless newsreels, shorts and

stand arid perform the home-front job.

Although the

keen

activity

shares of

were

entertained by "Universal pic¬

tures

1939

last year than ever before in the

its

Company's history,

TOTAL INCOME FROM OPERATIONS AND NET PROFIT AFTER TAXES

(

H4|

[

1942

Income

Compensation

47.7

,..$22,191,614

Profits jgtnd all other Taxes...

21.7

21.0

9,749,266

,..

and

Depreciation,«*

726,232

Dividends Paid ..,.........,.,

.571,942

Added to Earned

Despite

1.5

i.i

Surplus.

.3,188,026

6.9

$46,527,527

100.0

and its sales organization secured the
tracts in the

both in

largest number of

Company's history. Its product

this

country and abroad.

Universal has released

stock of South¬

shortage and other wartime handicaps,
production schedules> throughout the past year

manpower

Universal met

!'0

holdings ofMOO.OOO

Indiana Gas

I94Q

% of Total

evident

will

theCompany was used iri the

pictures bringing needed relaxation from the work and

that Common¬

common

will

1943

underwriting

competition

pictures such

In
as

was

con¬

well received

the current

season,

"His Butler's Sister,"

& Electric Co.

Just how many

tually

people

Southern Corp. decides

to market

ern

becomes

in the event

wealth

Other Costs and Expenses.

■

these

has not
when, it will

bids

that

1942

Federal Income and Excess

company

yet indicated if,

MEM
|

Interest, Financing Expenses
More millions of

circles

1941

Wages, Salaries and other

trailers* Universal is endeavoring to aid our people to under¬

Southern Indiana Gas & Elec.

j from

197

past fiscal year:

Universal is also making and distributing informational films

projected sale, designed to

for

1940

forces abroad and in camps in the u.s.

125,000 warrants.

call

armed

back

filed

1939

B1|

ftprnnj
»

f—rra

xiTilTL

expand working capital, involves
234,500 shares of common and

•

SALARIES AND OTHER COMPENSATION

for the armed forces

rL.^4|L

'' T V*'

2.9

:".

LL±XAlxLY
xXxxxiij. iXxxiuLa
PER DOLLAR OF

DOLLARS)

...

45c

;*$iNbvember,^

Here is how theintalincome of

The stock

was

'•-'s-y

■

looks

March 27.

year, but a

Bill

10.35

the next issue to

TAX

V "( l " ?

1939

of common stock and
warrants, in
registration with the SEC, will be

".f. i •''

though the projected sale by
Universal Pictures Co. of the block

divi¬

(FOR FISCAL

ids

•

October 30,1943.

made avail¬

showing to

abroad. More than 35,000 showings of Universal

another negotiated deal

utility, or a railroad,
in the interval, it now

stock

common

the

(MILLIONS

Universal Pictures Common

Unless

$16,094,906 at the

was

compared with $14,229,423 the year before.

Commission's Rule U-50.
r

$5.34

share, for the preceding'year.

fighting

insti¬

competitive bidding under

per

fight¬

enjoy the finest screen entertainment.

pictures released by Universal in 1948

tutional buyers through direct
sale, rather than be offered in

(

possible for

able without cost to the Armed Services for

tion
to

our

The $100,000,000 of

make it

the world to

appears

offering of new
is unlikely.

the greatest morale builders for

are

ing forces. The motion picture industry has given

Gas

Corp.; however, where the task of
setting

T^TEXT to letters "frofr£,to

obliga¬

groups

the

COMPARISON AND GROWTH OF DOMESTIC AND FOREIGN

even¬

BUSINESS"

running

with tenders for the stock is not

certain, but from

banking

circles

discussion

process of formation

are

to partici¬

pate.

Commonwealth

would

divest itself

under

proposal

involves

tension of

Southern

of its

holding
plan re¬

simplification
cently filed with the SEC.

•.

indicated

that at least five groups

following
seven

One

distribution

the stock pro rata to C. & S. comholders.
Y■. iki'kk.i-'f-

mon

;

war. ; Newr

production and sales records
1

Virginia Electric. & Power Co.

financing is
reach the

counted upon to
market before the end
now

of the current

month, with March
27 looked upon as the
likely date.

/.V

;

- ^

previously obtained from foreign markets now closed.

Total income from the

Vir^ipia. Elcct^^ & Power Co.

■

Universal's domestic business increased 16% over the pre¬
ceding year. Foreign business increased 24%, the gains in
English and Latin American revenues having made up for
V!

revenues

ended October 30,

operations during the fiscal

would

with

maturity

"Gung Ho!", "Ali Baba and the Forty Thieves" and "Flesh
and

Fantasy" and has available for release

tion of its

market

profits taxes amounted to $3,759,968; equivalent to $6.57

world-wide demand for American films may

per

product for the remainder of the

$39,109,524 in the preceding year. Net profits after all
charges including provision for Federal income and excess

Universal is

substantial por¬
year.

developing plans to take advantage of post-war

opportunities. We

are

confident when peace comes,

be expected.

J. CHEEVER COWDIN
Chairman of

refunding bonds which

have

year

1943, amounted to $46,527,527 compared

This undertaking involves an
issue of $24,500,000 of first mortr
gage and

were set*

consistent uptrend in the Company's business for

consecutive'years.

the Board

years.

Financing grows out of the pro¬
posed absorption by the company

A copy

of the Annual Report will be gladly furnished

upon

T. J. Feibleman &

likely to be carried through in
a

New

Copies of this inter¬

dealers

■kE'kk^k

•

City.

from

had

Huff, Geyer & Hecht, Inc.,

piece of refinancing.

York

tailed tabulation of 1943 operating

report persists that

appreciation, according to

study prepared by T. J. Feible-

request to Universal Pictures Company, Inc., Rockefeller Center, New York 20, N.

Y.)

Bought
ANALYZED

Sold

—

Quoted

—

REVIEWED

Congress Urged To Provide Application Of
Baruch Report to Preserve Small Business

Stocks

Insurance & Bank

Booklet Service to Dealers & Brokers
daily 7 a. m. to 5 p. m. (P. C. T.)
Orders solicited.

Inquiries invited.

CALIFORNIA

Angeles

7th St., Los

PRIVATE WIRES
Chicago
' San Francisco
L. A. 279
L. A. 280
.

New York

Seattle

TELETYPE

Stocks

Bank and Insurance
DEUSEN

By E. A. VAN

Week—Bank Stocks

Henry

Vice-President

which

This

New York City banks have shown a strong and labor circles
pends upon swift action now along
five years, despite increas¬ these problems. ■
the lines indicated,"
"Mr. Baruch and his associates
ing taxes and rising costs of operation.
Net operating earnings per
"It is not enough to sound the
have, tackled a gigantic task and
share, exclusive of security profits and recoveries, are shown in Table
praises of the Baruch-Hancock re¬
brought a high degree of order
I for seventeen leading New York City banks for each year of the five
port," says Mr. Seedman.
"It is
out of it," Mr. Seedman continued,
year period 1939 to 1943.
So far as possible figures are presented on
also necessary to understand how
"but independent and small busi¬
a comparable basis; however, since strict uniformity in accounting
it applies to small business.
Big
ness
has questions to
ask and
and reporting procedure does not exist in commercial banking, com¬
business and
prime contractors
recommendations
to
make
to
parability is perforce approximate.
can now foresee their immediate
TABLE I
/ V'-; Congress and to the Office of War futures from the recommendations
Earnings of leading

it, how

Mobilization.

the

administered

now

becomes a matter of life and

death

PER SHARE

EARNINGS

OPERATING

NET

Improvement
1943

■

1940

Commercial National

——

Continental Bank & Trust
Corn Exchange ——.—i

National

—

Trust

Irving

.—

Manufacturers

Trust

City

"National

—-—

Trust

Guaranty

—

:——

York Trust

New

Public National

Trust

States

United

4.74
1.80
1.60
9.79
0.95
2.18
104.07
13.15
0.48
3.71
1.91
5.16
2.89
82.07

Hanover ___——
National
Chemical 'Bank & Trust—
Chase

1939

1941

1942

1943

$1.37

$1.81

$2.01

81 %

$1-14
17.61
3.36
5.77
1.83
2.00
10.89
0.91
1.44
99,24
14.11

1939

Manhattan.---$1.11
Bank of New York
V.:' 17.57
Bankers Trust
i
2.80
of

First

20.05

20.70

28.59

,3.19

3.39

3.79

6.31

5.76

6.54

1.96

1.81

2.33

2.60

2.68

3.42

114

12.91

17.95

11.00

over

3.56

102.50

106.42

106.16

14.25

16.28

17.38

0,70

0.84

3.91

4.03

5.28

1.94

2.18

2.44

5.36

6.06

t6.51

0.62
3.92
1.98:,
' 5.11
3.09
71.64

■

V:; 63;
2

3.29

2.85

3.30

72.10

78.83

87.07

Policy

"3.

Bank

New

York-.;

Bankers Trust

-a—.-.-

Hanover

——

National

Chase

•

Chemical Bank & Trust—
Bank

Continental

Bulletin

Request'

Tr..

Laird, Bissell & Meeds
120

First

National

Telephone: BArclay

Irving

Trust
Trust
_

Coverage

Market

(Times)

$0.90

2.23

3.8%

8.5%

14.00

2.04

3.4

7.0

1.40

2.71

2.7

4.00

1.63

3.8

—

....

Trust
41.75
--A-,/
36.38 ;;
Trust—^.—85.34
National
——7
48.30
States Trust1,517.50

"Manufacturers

New

United

3.5 /■%:

6.6

1.94

3.7 '..7'

7.2

1.48

4.8

7.1

1.33

4.8

1.45

3.8

1.67

3.8

6.3

2.64

3.9

10.2

6.5

12.00
V.

0.60

2.00

;

—

"Common

In Table

(asked

stock.,

2.7

1.86

3.6

1.74

4.6

1.93 7

3.8%

each

stock

A-,--

5.8

7.0%

•

relation

Home Insurance

Maryland Casualty
Other Issues

Traded

Bank

Trust.

dividend

Current

yield

3.8%; highest yield is
4.8% for both Corn Exchange .and

averages
•

Chemical Bank is

First National is lowest

First National, and lowest,
for

Trust

Bankers

City.

and

is 2.7%

National

v.*

Dividends

were

earned

by net

earnings
alone,
clusive of security profits and

operating

coveries,

1.93

times

Bankers

Trust

coverage

with

Manufacturers

shows
a

ratio

Trust

the oldest

The Bank of New South Wales Is

largest bank In Australasia. With over
in all States of Australia, in
New
Zjaland,
the
Pacific
Islands,
and
London, it offers the most complete and
efficient
banking
service
to
investors,
traders and
travellers interested in these

and

branches

800

countries.

<■

LONDON OFFICES;

E. C.

Street,

Threadneedle

with

the

and

for appre¬

growth, rather than
"earning yield" is

great significance.

For exam¬

2.7%, but this dividend was earned
2.71 times in 1943 and its "earning

yield"

ex¬
re¬

average.

highest
of

comes

2.71,
sec-

7.3%,

which

Agency arrangements with Banks
throughout the U. S. A.

NATIONAL BANK
of EGYPT
cV:'•

Commercial Register No.

•

V.;

Cairo?

Office

Head

CAPITAL

FULLY PAID

and the cost of reconve^^^

Cairo

£3,000,000

000,000

FUND

RESERVE

conceivably wipe out the total
resources of a small plant.

"We ask for a program on dis¬
pay for war workers be¬
cause
we foresee here a nation¬
wide social and economic problem

;

LONDON AGENCY

and 7

King William Street,

E. C.

missal

•

Branches in all the
'
principal Towns in
;
EGYPT and the SUDAN

which

might well

prove

•

factor

NATIONAL BANK
of INDIA, LIMITED
Bankers

Kenya

mounting fear, when we all
want to see thd nation advance
and

;

\
"The cancellation of prime con¬
tracts' will come as a shock to the
assurance.

small business

small

un¬

in a particularly
trying period. Furthermore, con¬
sumer purchasing power must not
be permitted to drop just at the
very time when peace-time pro¬
duction;-; is
being partially re¬
sumed.
This would result in a
wave of cancellations, uncertainty

settling

•

men

who hold sub¬

this

point

businesses • face

sudden

Uganda

and

Colony

26, Bishopsgate,

London, E. C.

Ceylon, Kenya

in India, Burma,
Colony and Aden and

Branches

Zanzibar

£4,000,000

Subscribed Capital

Paid-Up

_£2,000,000

Capital

is it

How

The

Bank

to be

provided that the prime con¬
partial can¬
or cut-back in his con¬
tracts does not himself continue

conducts

every

banking and exchange

Trusteeships

£2,200,000

Fund

many

the danger

extinction.

Government

the

Office;

Head

Reserve

and

description
business

Executorships

also undertaken

tractor who receives a

cellation
on

full

war

production while all

of his sub-contractors bear the full

shock of termination?"
Seedman.

"And

asked Mr.

how

will

handle the cases where the

prime

contractors themselves convert to

peace-time production while their
sub-contractors

continue

war

is better production, facing termination at

7.0%. Bankers a slightly later date when they
therefore, is in excellent may be less able;to meet the new
of
business
compe¬
position to restore the $2.00 rate conditions
when its directors deem it advis¬ tition?
"The American Business Con¬
able. National City is another case
of low dividend yield, but substan¬ gress insists upon observance of
tial earning yield, and Public Na¬ Mr. Baruch's recommendation that
tional appears to have sufficient surplus
war,
materials
move
earnings to justify a higher divi¬ through normal channels of trade
dend in the post-war years.
It is as a matter of life and death to
the thought of this writer that the many small businesses throughout
investor in bank stocks, particu¬ the country.
In that connection a
larly
the
long
term
investor, provisionsimilar to those con¬
should study and compare "earn¬ tained in the Murray and Patman
ing yields" rather than "dividend bills, providing for representation
of small business men's interests
yields".
than the average of

Berkeley Square, W. 1

can

Trust, Trust,

Irving

Trust,

Public National and United States
*

insist¬

book-value

Manhattan, Continental,

Guaranty

George Street* SYDNEY

be represented

plant or machinery are neces¬

sary*

contracts.

Trust,

share. It will be noted that
six stocks are priced at a
(discount
from
book-value,
viz:

National City

im¬

current income,

only

Chase Bank

Mr.^ Baruch's

vestor who is looking

per

Bank & Insurance Stocks

for

ple, Bankers Trust cut its dividend
rate from $2.00 to $1.40 in 1942,
(12/31/43), annual dividend rate with the result that the current
and ,1943 net operating earnings dividend
yield of its stock is only

shown

Trading Markets:

and

ciation

DAVIDSON, K.B.E.,
General Manager
o:->:4

big plant, even when no changes
in

each stock at current
market prices, and based on net
operating earnings. For the in¬

8.7

flncludes city Bank Farmers

accomplishJ the

with 2.64,

yield"

6.6

3.9i

70.00

;

II, the current market

price)

5.5

1.50

1,505

30th
£187,413,762

ALFRED

SIR

are

last column of the
table will be found the '.'earning

2.44

38%

pay

upon

1.33.

2.20

1.00

;

—»'•

1943

Head Office;

1>tutors. The problems ofreconversion
often more difficult
a for the smallnffpn mnrp difficult
version arp fellow than for the

approximately average with 1.90
"

6.4

3.50

37 Vs

■

Average

•

51%

York

Public

3.4

1.90

0.80

15%

City

^National

ond

1.66

1.80

318
.

21.28

Sept.,

1U0% settlement of his termina-

with

5.7

80.00

eon-

6.3

1.40

;

prime

portance to every wholesaler and
retailer in America—be scrupu-

7.3

2.40

1,670

323.77
-

Dividend Earning
Yield
Yield

Annual

Assets

Aggregate

.tioB'^laims until he can show cer¬

so-called surplus goods
moving through normal channels
of trade—a matter of vital im¬

ence

for

or.' severance

"5. That
II

/ju $23%
$25.03
4,07
358.97
50.15
i04
99.15
36.88
41.23
23.27 1

£23,710,000

We hold that no prime

tractor-

portant dual purpose of permit¬
ting
consumers
to secure
the
necessary
requirements
and at
the same time maintain a healthy
level of trade.
;
\

Y.
7-3500
.Bell Teletype—NY 1-1248-49
A. Gibbs, Manager Trading Department)

•'50

Guaranty

fon/sub-contract-

upbn the termination
contracts the small busi¬
be burdened by no more

will

this

Exchange

Stock

York

BROADWAY, NEW YORK 5, N.
•

New

Dividend

49.35

—iLa—

Exchange

Liability of Prop— 8,780,000

.contractor should be able to draw

workers be worked out now;

war

Members

6,150,000

Fund

ttfau^
tificates of satisfactory settlement
for smqjl^ rJb.usiness.f, by "frCtt# every one of his sub-con¬

dismissal

Current

—1,246.60

Corn

the
*

proportionate share of
contract cancellation.
; ;;
"4. That a specific policy oi

column

12-31-43

than their

Dividend

Manhattan

It is therefore essential

£8,780,000

Capital

Reserve

Central fth^^y^ll-being of the . sub-concreation of

That

nesses,

NewYork-

TABLE

^ESTABLISHED 1817)

Paid-Up

of continued

assurance

that small business

of prime

tabulation.

Bank

BANK OF

NEW SOUTH WALES

the

tractors

Trust Co. of

improve¬

Book Value

some

existence.

reconver¬

^commended

wellies

ors

Guaranty

respectively. Ex¬
cellent improvement is also shown
by Bank of Manhattan with 81%;
Bank of New York, 63%; Com¬
mercial
National,
83%;
Conti¬
nental, 63% and Corn Exchange,
63%. The rest of the banks show

with

114% and 108%

Central

Australia and New Zealand

Congress to make sure that small
business too can view the future

Baruch-Haweoek report.^ > *
"2. That the unifqrm .cojritjfact

years.

improvement is shown by Chemi¬
cal Bank and Irving Trust, with

ment, as noted in the last

is'

making it work

49%;.greatest

substantial to moderate

pi,|n.r on

plicable

it is sub¬
few •in¬
it just moderate.
Tne
improvement
of
the

seventeen, banks is

and

Committee the

which

the

Ltd,

Bank,

Deacon's

Glyn Mills & Co.

termination

markable; in most cases
stantial and in only a

Associated Banks:

Williams

business..

improvement in net oper¬

£108,171,956

by a competent small business
Con¬ man on the Central Policy Com¬
gress,
it was made known on mittee which is suggested in the
March 6, urges immediate action
Baruch report."
In part, Mr.
upon
the following;? seven-point Seedman also states:
program:'
1
•
"We feel that the 'financial kit'
"1. Thaisi$all bu|,ii}ess be rep¬
provided for the prime contractor
resented by~competent small
is Qal^gast equally necessary for

ating earnings for 1943 over 1939
in several instances is quite re¬

stances

ASSETS

TOTAL
"

sion, the American Business

108

Farmers Trust,
feco.ooo shares In 1943; 500,000, shares previous

average

Burlington Gardens, W. I
64 New Bond Street, WI

report, but it is up to the

in the

the disposal of

termination'

tract

1.00

see

war-accumulated inventories, con¬

1.55

3.30

'<■

In reference to

1.14

2.58

0.95

plan

to us."

'Includes City Bank

The

Smithfield, E. C. I

Charing Cross, S. W. !

upward trend over the past

and consistent

Central

8 West
49

is of paramount

"7. That time

importance—the very existence of
thousands of small businesses de¬

industry
will
discuss

Government,

OFFICES:

Bishopsgate, E. C. 2

ness.

Wallace and other speakers prom¬
inent

Bank

Scotland

throughout

LONDON

American

the

OFFICE—Edinburgh

HEAD
Branches

lously followed in the administra¬
Business Congress.
tion of the plan outlined in the
"The report makes provision for
report.
the protection of the interests of
"6. We
endorse r the
call for
small business, but Congress must
unity and for all-out production
start now to make that protection
to hasten the winning of the war.
tangible," he continued; Many of
Without victory, small business
the demands of small business to¬
can have no existence. To achieve
day will be vbiced at the forth¬
victory, we call for the fullest
coming dinner symposium being
utilization of the will, the energy
sponsored by the American Busi¬
and the ingenuity of small busi¬
ness
Congress on March 17, at

BUTLER-HUFF & CO.
210 West

Incorporated by Royal Charter 1727

endorsed, the BaruchHancock Report on War and Post-War Adjustments as a "first-class
engineering job," but called upon the United States Congress to make
sure that the application of the report maintains small business in
existence.
"The greatest danger is that while the Baruch report is
being discussed many small businesses may die," said George. J.
Seedman, National President oi &

Special Bulletin and
Trading

Royal Bank of Scotland

has

Congress

Business

American

The

COMPARED

Thursday, March 9, 1944

COMMERCIAL & FINANCIAL CHRONICLE

THE

1000

by competent small business men
on the Surplus War Property Ad¬
ministration should
be incorpo-*-

legislation enacted by

rated in any

Congress." ■;
In addition to the

speakers pre¬

viously announced for the March
17 dinner of the American Busi¬
ness

viz.: Vice-Presi¬
Justice Thurman

Congress,

dent

Wallace;

U. S.

Arnold,

Court;-,of

Appeals;

Maury Maverick, Chairm4ii.pt'the
Smaller War Plants Corporation;
Senator
man

James^rM'iirrajy.Ch^r-

of the

Small

Sena^'UoMkkte^On
Murray,

Business;-1 Philip'

Wayne'C.
Taylor, Under-Secretary of Com¬
merce,
and George J. Seedman,
President

of the CIO;

President,

National

American

the names of
several new speakers have been
added to the list: Senator Joseph

Business

Congress,

H. Ball, Senator
and

James

Harold H. Burton
Under-

Forrestal,

Secretary of the Navy.

.Volume 159

House Committee

issue^last

summer to Kuhn, Loeb
& Co. for $100 a unit
despite the

Otis & Co. Of Cleveland

fact that

Ask $1,000,000

Continues Study Of
Tax Simplification

ment

Federal

way
by
the
Means Commit¬

District

Court

nate

for

estimated

taxpayers

gave

30,000,000

with 'incomes

not

than $5,000 a year the neces¬
sity of filing the regular income

tax

return.

New

Co.

ance

bought the railroad bonds,
The suit asks

charged

well

the railroad.

that the
railroad companies lost financially the court
by the sale of a $28,483,000 bond dividuals

trial by

damage suffered by the

whom,

P., O. & D."

jury and

adjudge that the in¬

named "are liable for all

named

Clement,

President

Pennsylvania;

George

Otis, the suit
to obtain

Vice-President of the Penn¬

Gowen,

Jared

These

According to

Pabst,

three

the
are

was

court

spokesman

for

filed "in order
test

of whether

officers and directors having but

sylvania; Walter S. Franklin, Jas.
Richard

directors

directors of P., O. & D.

the

Jr., President of the P., O. & D.
and

Adams,lHankins and

are

Pennsylvania.

Martin

are

save

Shotter,

small

Ingersoll,

ownership

rations

can

great corpo¬

continue

treat

the

Mellon, Leonard T.
Beale, J. F. Deasy, J. R. Downes,

financing of those great

F. J.

tions

passed out to their banker

Fell, Thomas S. Gates, Rob¬

ert T.

McCracken, Thomas New-

personal

hall, George J. Adams, F. W. Han-

friends

kins

corpora¬

prerequisite

stockholders."

and

Shotter,

all

regardless of the cost to

According to Wash¬

ington-advices
York

this is

Otis

of them represented insur¬
and other
companies, which

some

was

"conflict of interests" among the
directors named.
It alleged that

and

P. R. R. and the

Individuals

delphia,
a
suit
for
$1,000,000
"special against the Pennsylvania RR.; its
plan designed subsidiary, the Pennsylvania, Ohio
to arrange the present withhold¬ & Detroit RR. and 16 officers and
ing tax in such a way as to elimi¬ directors.
'
March

consideration" to

loss

1001

Halsey,

possible and also that there

Phila¬

indicated that the Com¬

was

mittee

and

directors of the Pennsylvania, Ohio
& Detroit to obtain the best
price

Cleveland, invest¬
bankers, filed Feb. 29, in

plification, .under

Co.

The suit contended that the ac¬
tion violated a resolution of the

Otis & Co. of

House Ways and

Otis &

Stuart & Co. Inc. bid $102.

Damages In Rail Suit

Incident to the study of tax sim¬

tee, it

THE COMMERCIAL & FINANCIAL CHRONICLE

Number 4262

March

"Times"

learned, it

from

the

which

said that

was

successful plan would enable tax¬

in these brackets to choose

payers

between
the

the

regular

filing of

return

and

simple statement

income.

■

Celanese Corporation of America

■

Representative Doughton, Chair¬
of the Committee, after a

man

AND SUBSIDIARY COMPANIES

closed session that day, was quoted
as

saying:
"The committee and

the staffs,
(on Internal

the Joint Committee

Revenue Taxation),: the Treasury
staff

and

the

Revenue

Bureau

staff,

their work

this

well

Condensed Consolidated Balance Sheet

Internal

other
Current Assets:

phases of simplification, and will

Cash with Banks and

continue actively at work and hold

frequent

"M.

have

meetings.

We
the

program

hope
near

I). S. Government

Goods and

but not increase

from

ment-at

Receivable—Deferred,less

cost.

Debt
lebt

taxpayers

less

Premium

and

Prepayment*.,.;...

ij—rr—*

Payable

2,667,909.98

Federal

for

Taxes

Income

(excluding

$2,694,000.00 shown as a non-current liability)
$11,468,220.24, less an equivalent amount of U. S.

Treasury Tax Notes
January 1,1944.

594,882.25

Total Current Liabilities...

Reserve for Federal Taxes

payments in 1943

based

5,247,743.73

the

Committee

standing

application for relief under

was

the

future

near

by January 1,1962 in increasing amounts and at
company's option
1, 1946 because of
anticipation of sinking fund requirements)...........

Capital Stock:'
per

$100.00 per

without

par

value.

Outstanding:

7% Cumulative Series Prior Pre¬
ferred—164,818 shares.

116,481,800.00

5% Cumulative Series Prior Pre¬

Democrat of Virginia, a member
of the Committee. Hence, he ar¬

ferred—37,710 shares..........
—
148,179

3,771,000.00

7% Second Preferred
shares

gued, it was 'more important that
Congress do a good job than a
quick one on tax simplification.'"

14,817,900.00

Common—1,376,551 shares

Surplus:
Capital..

1.376,551.00

36,447,251.00

8,992,451.13
31,1931) .16,109,503.92

25,101,955.05

Earned (since December

$107,015.112.45

The plans for the simplification
our

were

referred to

issue of March 2, page 915;

the

issue,

same

the

reported

over

dent's veto.

'■-

■

and Earned Surplus for Year 1943

•

/r A *

,i(

Net

Operating

76,793,958.77

Profit

17,790,950.82

Other Income.
'

Home Ins. Attractive
Home

fers

Insurance

attractive

Butler-Huff

of¬
possi¬

investment

bilities according to a
dum on the situation
&

Co.

250,311,90

Income Deductions

Company

Net Income before Federal Taxes
Federal

Earned

issued by
California,

Deduct;

Surplus at beginning of

21,442,134.92
-

■

Cash Dividends:

the matter in

Huff

,Cq., with

tabulation

statement

detail may be

Butler-

comparative

insurance

Bhare..,

from

figures for 1943

Total Dividends

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

Surplus

1,153,726.00
188,550.00

st end of Year

$16,109,503.92

foregoing balance sheet and statements

are taken from the annual report,
of Celanese Corporation of America, and
should be read in conjunction with such
report which contains the certificate of
Messrs. Peat, Marwick, Mitchelt & Co., Auditors, attached to such financial
statements. A
copy of the report to stockholders may be had upon application
to the
Corporation. The said balance sheet, statements, and report are not in¬

dated March 2, 1944 to stockholders

The' current situation
of the St. Louis

issues

& San Francisco

Railway Company offers interest¬
ing possibilities according to a de¬

tended

civilian life

yet, will

be available for

a broad
range of uses which will include,
already listed, men's and women's wear,
hosiery, floor coverings, draperies, footwear.

besides those

Celanese research and
nese

planning are continuous. Cela¬
synthetic rubber, and Lumarith V.N,
two recent developments. Celanese research

Butadiene for

plastics

are

has discovered

new and economical
processes for produc¬
chemicals from petroleum base materials.
A new plant under construction in Texas close to the
raw material
supply, for the production of many vital
chemicals including dyestuffs,
formaldehyde and tricrcsyl phosphate, is expected to be completed this year.
Sales of chemicals will be handled
by Celanese Chemical
Corporation, a newly formed sales division.

ing

numerous

constitute

offer, solicitation of offer, representation, notice, adver¬
tisement, or any form of a prospectus in respect of any security of Celanese
Corporation of America.
-:
_

development initiated

provide

vital materials for the Armed Services and other
time needs, has enabled the

-,<j

war¬

Company

to
The

of which have had

The research and
5,332,631.00

200.000.00

RR, Situation Interesting

ucts, some

5,132,631.00

valued

at no cost,

$200,000.00 in 1922, written off.,

Earned

$2,753,102.00

cross-section of Celanese contributions

1.037,253.00

Factory Site acquired
at

company

6,275,592.64
15,166,542.28

year,,

7% Cumulative Series Prior Pre¬
ferred—$7.00 per share.
5% Cumulative Series Prior Pre¬
ferred—$5.00 per share
7% Second Preferred—$7.00 per

request

10,255,000.00

Net Income for Year....................,,

memoran¬

Street, Los An¬
geles, Calif. Copies of this inter¬
esting
memorandum,
discussing
upon

16,530,592.64

(including $8,020,000.00 Excess
Profits Tax, less Post War Refund $802,000.00),....

Common Stock—$2.00
per

had

Income

income

taxes on

synthetic textiles, plastics, chemicals. Many other prod¬

18,041,262.72
1,510,670.08

(including interest $1,200,115.00)..

210 West Seventh

some

This is but

$94,584.909.59

tost of Goods Sold......
64,936,379.89
Depreciation-, .'. 1,.!'
..........4,200,664.37
Selling, General and Administrative Expenses
7,656,914.51

in service to make

In the field of chemicals, Lindol*, a Celanese
plasticizing chemical, is now a primary ingredient of flameresistant insulating coatings for
battleship cables, water¬
proofing for tents ami military equipment. But this
versatile chemical will fill important peacetime
jobs as a
component of plastics, waterproofing and irtsulating
compounds, lubricant additives for motor oils; jn var¬
nishes and lacquers, as well as a wide
range of nejy uses.

NetSales....ill.,

page

passage

by Congress

914, we
of the tax
the Presi¬

Condensed Consolidated Statement of Income

transportation and
others.

many

jungle snipers' suits, flare para¬
important
lightness is de¬
sired. Among these are men's and women's
apparel, up¬
holstery, beltings and lacings, and other industrial uses.

share.

Common—1,750,000

Issued and

equipment and

chutes and shroud lines, will, in the future, be
in uses where fabric of
great strength and

share.

a great

Similarly, Fortisan*, by far the world's strongest yarn,
now

Preferred—250,000 shares, par value $100.00

7% Second Preferred—148,179 shares, par value

would

communication

Authorized:
Prior

masks, first aid
peacetime find
diversity of fields such as
aviation, automotive, electrical equipment and applica¬
tions, packaging, building and many items of house
furnishings, cold frames, hot beds and poultry houses,

application in

hand tools and builders' hardware,
34,289,000.00
3,235,162.67

Reserves

given by Rep¬
Willis
Robertson,

of the tax returns

2,694,000.00

six month intervals, which at the
need not commence until January

likely to become effective
A.

retired

>r.

until next year was

resentative

December 31,1943, $25,539,000.00 is

example, LumaritU*, the modern plastic, which is

being used extensively in planes, gas
kits and field ration containers, will in

wide

Income—withheld from

&H% Debentures, due July 1, 1962 (of the amount out¬

by March 15.
special warning that action

not be

bill

For
now

Dividends Payable

emphasized that nothing

which

3 1,984,951.50

.......

Accrued Liabilities

Section 722 of the Internal Revenue Code..........

taken

LOO

LIABILITIES

Current Liabilities:

1943 income

4,238,095.26

Trade and Other Accounts

many important contribu¬
war effort. It is a
happy circum¬
versatility of synthetics is such that the
Company has no reconversion problem to complicate its
planning for the transition to peacetime production—
when victory is won. For many Celanese* products now
serving on the war fronts, are basically the same as those
which will be required by manufacturers of civilian
goods
to add to the
beauty and comfort of peacetime living.
stance that the

533,365.95

....

In the year just past,in the fields of syntheticof Amer¬
ica, so long a pioneer Celanese Corporation textiles,
tions to the nation's

1,250,990.32

8107,015,112.45

Reserve

1943 income

plastics, chemicals, has made

2,453,738.99

Patents and Trade-marks

working would affect or lessen the
necessity for all the 50,000,000
taxpayers to file their returns on

■

56,117,137.35

Ex-

Insurance Premiums, Taxes and Other

$8.67 per. common share.

THE OUTLOOK FOR SYNTHETICS

amortized.

amount

$11,945,962

1,034,670.13

26.484,967.40

Discount,

$82,602,104.75

....

pense, less amount amortized. .
Research and Experimental Expenses,

turns.
was

Federal, state and local taxes
amounted

Depreciation and

Prepaid Expenses and Deferred Charges:

would continue to file annual re¬

1,427,000.00
411,415.74

reserve..

/.i,'.

...

Amortization

the 20,000,000 taxpayers receiving
more
than
$5,000 income who

9,681,136.14

Less Reserves for

said, is in¬
tegrating the Victory, normal and
surtax into a single overall rate,
a
plan which; it is held, would
simplify matters materially for

T ": "It

excess

43,786,792.97

the forefront, it was

■4!

GELANESE CORPORATIONits operations
OF AMERICA
continued to expand,,
during 1943. The sales volume reached a
new
high of $94,584,909.59. Consolidated net income
for 1943, after provision for Federal income and excess
profits taxes, amounted to $6,275,592.64, equal to $2.83
per common share.

Land, Buildings, Machinery and Equip*

the present

victory imposts.
objective now in

second

not

Excess Profits Tax.

Investments—at eott,

income and

"The

Supplies)—at cost or less,

Notes and Accounts

against various
income levels and the excusing of
any,

5,905,281.26
7,957,734.83
399,494.94

Total Current Assets

tax burdens levied

comparative few, if

market.

two
principal
One, they asserted, was to main¬

tain

Obligations (quoted market value

Post War Refund of Federal

said, there
objectives.

were

$19,843,145.80

Trade Accounts Receivable, less reserves
Other Accounts and Advances and Interest Receivable.
Inventories (Raw Materials, Work in Process, Finished

The "Times" advices added:
"In seeking tax simplification,
members

Hand

$5,908,628.55)

to
fu¬

ture."

Committee

Summary of 1943 Operations

December 31,1943

continuing

are

ucts

forward with

many new

and many new uses

prod¬

UtO

for present

■i JfiW"--

products which should be extremely
useful in the post-war
period.
An illustrated

MfloK

booklet, "The Celanese

Family—Textiles, Plastics, Chemicals"
has just been
published. It will gladly
be

sent on

request.

tailed discussion issued by Vilas &
i

Hickey, 49 Wall Street, New York
City, members of the New York
Stock and Curb

upon

request

•Rtf. V. S. Pa I. Off.

Executive and Main Sales Offices: 180 MADISON AVENUE, AW York 16, N. Y..

Exchanges. Copies

of this memorandum
.

from

mav-.

;}>.:•-JT

be had

Vilas

•

Hickey.

jf'iT Vt*ni!.h!-

-Hi-'

Thursday, March 9, 1944

COMMERCIAL & FINANCIAL CHRONICLE

THE

1002

uses for its accumu¬
assets—the conversion
of plant, the replacing of wornout, obsolete equipment from de-,
ferred plant rehabilitation, the re¬
stocking of civilian inventories,

have

Symposium On Question Of
Post-War Price Fixing, Rationing

Province of Ontario

(Continued from page 986)

New Circular

the utilization of technological im¬

Mr. Purcell in this same address
if not properly
then went on to cite briefly his
controlled, could exert inflation¬
reasons for feeling that
some of
ary influences that might threaten
the wartime controls must remain
an orderly transition from a war
in effect for a temporary period
to a

that these funds,*

Copy

request

It is inter¬
that a sober following the end of the war, and
his remarks in this respect follow:
recognition of the need for con¬
i' "The problem of control is less
trols of this sort should come from
peace economy.

Wood, Gundy & Co.

esting and gratifying

Incorporated
14 Wall Street,

Winnipeg

Montreal

Toronto

New York 5

Canada's financial history is
the presentation of a Government
Assembly respecting the financial
reorganization of the City of Montreal. The bill received a unanimous
first reading so it can be confidently anticipated that the great
metropolis of the Dominion will shortly be restored to sound financial
condition and will regain the con-|>
1——
dark chapters in

fiderice of its creditors.
As mentioned on several occa¬

sions, the settlement of one of the
two
major
Canadian
financial
black spots should^ precipitate an
agreement in the other case. The
Alberta reorganization plans,

CANADIAN BONDS

are
not making any
spectacular headway at the mo¬

GOVERNMENT

however,

default

CORPORATION

to other provinces

injustice

any

*In

Mr.

render

nor

tive enterprise for

MUNICIPAL

neither to place any pre¬

holders

another

part of his speech
"The growth

in the currency

and deposit hold¬

of individuals and unincor¬
porated business since the war

It
might be well, however, in the
greater cause of removing a blot

started in

high rates of interest.

$28 billion.
In addition
purchases of U. S. Savings
Bonds
now
exceed
$23 billion.

gal rights.

punishment

Some measure of
is

A. E.AMES & CO.

meted out to

being

already

INCORPORATED

the refusal of the
Dominion Government to renew

Alberta

given to

still

facility is

every

those
ways

STREET

NEW YORK 5,

provinces which have al¬

be forgotten also

default

the

Mr.

longer

the

Low,

speedy settlement are worthy

proposed

basic

3%% is much more attractive to¬

in this country

Canadian

market

has

supplied by the insur¬

been

companies, which have, nat¬

ance

the

bought

anticipating
provement

considerable

the

over

have

term

long

investors, correctly

Other

bonds.

tentatively
interest rate of

im¬

few

past

derived greater

also

day than it was a few years ago,
and with the restoration of the

years,

provincial credit permitting
greater development of this prov¬

longer maturities.

natural

tremendous

ince's

re¬

Alberta bonds, on such a
would be an outstanding

sources,

basis,

Canadian investment.

During the past week, the mar¬
ket moved in accordance with the

pattern

defined.

become

The tone

but

erally,

recently

has

that

menced

com¬

clearly

was

firm, gen¬

the greatest strength

manifested itself in the short and
medium term issues.

been largely
years

Therefore,
have

National

Railway^-

become

out

line

with

longer

the

term

turn

the

year,

_____

______

of 1949

from 3.05

to 2.70

4%s of 1950

from 2.65

to 2.50

4 Vis of 1950

from 2.75

to 2.50

offer:

Province of Manitoba
5s, due June 15, 1954

the

subject

Canadian funds

yield 3.75%

Taylor, Deale

Company

64 WALL STREET, NEW
WHitehall 3

owners.

"During the war years there has
been very little, if any, net in¬
vestment by individuals in cor¬

'• •'

id--

of international trade,

G. F. Towers,

Canada, in his recent annual report pointed
monetary agreement would be no more than

investment

into

saving

public

would be highly salutary for the
national economy.
No doubt peo¬

ple will wish to employ some of
their money in the purchase of
new automobiles, homes, refriger¬
ators and other durable goods, the/
appetite for which has been sharp¬
ened by the period of scarcity.5
This use of savings will, of course,
be welcome to industry and help- '
ful in insuring

national prosperity.
of full

the maintenance

for

But

employment and

high level of

national income it is earnestly to'

that a large share of
public savings will be 4u- '
diciously invested at home and.
be

hoped

the

expanding world trade and laying the economic abroad.
He went on to say: "Measures de¬
"The other area for the post-war
signed to reduce tariff barriers, increase international investment employment of savings which the"
and stabilize primary commodity3>
———~
public has accumulated during the prices are also needed; and the ternational commitments unless it war, perhaps an even wider area.
a

good start towards

foundations of a durable peace.

extent of such economic

tion will

collabora¬

doubt largely depend

sees an

interest

interest in doing so. Selfis indeed

for

the only prac¬

durable

interna¬

how far confidence in inter¬
national political security can be

tical

established..

need, therefore, is a hard-headed

upon

sensible

international

ar¬

rangements cannot be worked out,
Canada, like most other countries,
will presumably have no choice

the

but

adopt increasingly

country will make and

yield basis

Among the

nation¬

fulfill in-

outstanding specific

features of the past

persistent
of

issues

week was the

basis

tional

agreements. What we badly

appraisal by each country of what
that self-interest really is in the
long

and what is necessary

run,

to achieve it." '

demand1 for Manitoba

Preceding

trade."

»his

than

our

own

rehabilitation
of

reconversion, is the
and reconstruction

foreign lands and foreign in¬
Our experience after the,
war
should
also make us.

dustries.
last

cautious in
lem

and losses

approaching this prob-,
avoid the mistakes,
which attended the to¬
to

added

remarks

"Her

choice

will, however, necessarily depend
on
whether other countries, too,
are

willing to

trade

give international

chance.

"One indication of the

all maturities, the con¬

buying of Saskatchewan
and the placing of a large block
of
the
longest
term
Ontarios.
Montreal issues also shared the

tinued

this

regard will no

prospects

doubt be

found in the extent and character
of the international monetary

rangements which can be worked
out

unchanged at 10 9/16% discount.

by the United Nations. Three

\ 874

YORK 5

Though differences ex¬
ist between these plans and need
to be reconciled, the broad objec¬
tive is the same in each case, viz:
approach.

and

bonds:- We have the

comfort

knowing that if a sizable in¬
vestment in foreign countries and
of

foreign enterprises is invited again
that there will be a much moreadequate protection for our Amer-'
ican investors than surrounded the
flotations following the last war.

pointed out that we have,
tremendous liquid resources

"I have

ar¬

little more plans have been put forward by
interest displayed in the internal British, American and Canadian
are
bonds but the Canadian dollar in experts respectively, which
in their
the "free" market was practically genuinely international

our

substantial

pool of capital suf¬

ficient to finance

conversion
contribution

and
to

ourd^me^tic

.re¬

to ; make'.', a real'
foreign rehabili¬

to be
business generally
not unmindful of those com-v

tation.

While

this appears

the condition of.
I

unfore¬
panies in a few industry groups
development,
the
whose own resources and credit,
present trend of the market ap¬
that
countries
should
get
to¬ may not be sufficient to carry
pears likely to continue, with in¬
them
through.
This is another
creasing interest in the shorter gether and provide credit on a
collective
basis,
within certain problem which calls for careful*
term issues. This tendency should
administration.
But I feel that it;
be further accentuated on the an¬ limits, in order to achieve a rea¬
is highly important for the future
nouncement
of the forthcoming sonable degree of exchange sta¬
of the
world economy that the
public issue of short-term New bility and promote the exchange
In

seen

bid at 101. There was a

$50,000

Priced

stability in our economy for
to come. Industry will

for

s\ v-'

limelight and the long 4V2S were

Payable in U. S.

constructive manner they can well

--.ft

following improvements have been

of Oct. 1.1969/49 from 2.65% to 2.40%
4V2s of 1951
from 3.95
to 3.55

Columbia

<•><7

their

tally unregulated flotation of for-,
j ust
eign issues in this country in the
alistic economic policies.' Grow¬ quoted, Mr. Towers, in his report
1920's.
submitted to; Minister of Finance
ing economic and political friction
"The world will need and want
Ilsley on Feb. 10, noted that "the
between countries would inevita¬
our capital for its rebuilding, and
were a negligible factor in the
bly result, and it is hard to be¬ specialized character of Canada's with the assurance of a just and;
market, it is probable that the
lieve that any nation would de¬ resources, and her relatively small
differential in favor of the short
permanent peace, we can confiliberately choose such a course if internal market severely restrict
and medium term bonds will
denty expect that there will be a
all
its
implications were clear. the standard of living which she
tend to diminish.
repetition of foreign investment
On the other hand, it would be can achieve without the benefit
and the offering of foreign stocks
It is interesting to note that,
large export and import
foolish to expect that any given of: a

issues.
How¬
ever, in view of the increasing
interest displayed by commer¬
cial
banks,
which
previously
the

Ontario

;■•*r;-b->:• iV. v

Discussing

"If

term

shorter

previously

neglected. For many

Manitoba

Toronto

the

the greatest support for the recorded in the shorter bonds:

Canadian

British

has

purchase of the

profit from the

since

section

This

...

profits which too often in
have been costly to

history

j^iat if these resources are guarded porate securities. The conversion
and employed in an orderly and
of a substantial portion of the

many years

Governor of the Bank of

urally,

the

present; $35

out that an international

unceasing

the
Solon

of encouragement.

Furthermore,

NY-1-1045

2-7231

Provincial Treasurer, to secure
a

RECTOR

pated in price increases before full
production can get under way.
"On the other hand, I believe

Pact Basis Of Expanding
World Trade: Gov. Towers Of Bank Of Canada

N. Y.

that the author

and

scene,

efforts

not

must

authority.

they may be dissi¬

International Money

fully cooperated with the

central

liquid savings is at
billion a year.".
V>v

TWO WALL

maturing treasury bills, whereas

our

these savings

provide a source of supply for the
capital needs of industry in con¬
Also during this period individu¬ verting to peacetime operations,
als have reduced their consumer and will constitute a huge reser¬
indebtedness by $4]/2 billion.
The voir of post-war purchasing power
rate of increase in these public that could be felt as an influence

quick

industry, in addi¬

ings will not be dissipated in spec¬
ulation and the desire for short-'

their

record, to
business-like com¬
promise and not insist on full le¬
seek

1939 has been approx¬

imately

CANADIAN STOCKS

the entire Canadian

"Our domestic

tion to its own resources and bank

products.
There is real danger term
with
immoderate
use
of

profit."

ings

pay

will need our resources.

struction

competitor and to attract the pub¬
lic's savings into new and dazzling

said:

Purcell

which, in time of financial stress,
took the hard road and continued
to

and* recon¬

rehabilitation

where

that

the part

mium

field, but also in foreign countries

helter-skelter and that these sav¬

and preserving this na¬
tion's system of free and competi¬

serving

PROVINCIAL

comprehensible reluctance
of the Canadian bond¬

the

stumbling block

A primary

ment.

capital equipment will
found not only in the domestic
and

It is also important to
than it
that this recommenda¬
implication period.
that some of our wartime controls peal; to -patriotism is strong:" On carry, out its rehabilitation and
will have to be continued, in some this appeal people withhold from expansion. New products will re¬
excessive spending and respond to
measure at least, after the end of
quire financing; there will be new
the war. ; There will,
in other the war loan drives by purchasing ventures and new corporate en¬
bonds.
They even pay taxes with tities. These should entail equity
words, have to be a tapering off
relatively little complaint. After
of wartime controls.
financing which the banks are not
"In the same breath with his the war there wili be many arti¬ set
up to provide.
For these ven¬
cles which the public has been un¬
well-timed
warning, Mr.
Sloan
tures business always has looked
able to buy and there will be the
called upon Government to make
to the public for its funds.
It
temptation to redeem bonds before should be a source of real satis¬
a 'pronouncement of the nation's
their maturity. There will also be
firm belief in competitive enter¬
faction to business enterprise to
a call for tax relief.
Corporations, note the tremendous idle funds
prise and the profit motive as the
too, will be subject to these temp¬ which the
keystone of economic policy.' For
public has accumulated
tations. They will want to use their
my own part, I can give Mr. Sloan
these past two years, a substan¬
wholehearted assurance that what¬ savings and redeem or sell their tial part of which could be counted
holdings of Government bonds.
ever measure of control may be
upon for sound investment.
Here,
needed to soften the conversion There will be the natural desire
again, it is hoped that the attrac¬
back to a peacetime economy will of business management to get its tion of these funds will not be
be conceived in a spirit of con¬ wares on the market before its
tion carries with it the

drawing rapidly to a close with
bill in the Quebec Legislative

industries. Attractive uses for

new

today

recognize

Canadian Securities
of the few

One

creation

the

and

provements
funds

the war years credit which will be
available,
may be in the post-war
will no doubt look to the capital,
During the war the ap¬ markets for the wherewithal to

difficult

industry.

London, England

Vancouver

many

lated liquid

the

absence of any

major

Brunswick bonds. \

goods."

flow

funds

into

domestic in-

Volume

Number

159

4262

.dustry and foreign fields be sub¬
ject to careful and overall super¬

WALTER

San Antonio, Texas

It is difficult for

-heartedly

subscribe ;to

any

pro¬

of price fixing and ration¬
except under the most ex-

gram

ing

traord i nary

;<,

^circumstances,
d

a n

can

ognize
for

rec¬

dura-

these

under fixed

operating
prices and rationing,

will

pelled to continue the practice for
some
time during the post-war
period, as there will oe so much
money in the hands of people who

tivities

the

and

regulation and such tax poli¬
will prevent business from

cies

doing the necessary job. For the
past 10 or 15 years we have been
trying
to promote
employment
through a system of economic
scarcities.
I think this is clearly

free

the

trol

The first factor is,
continuation

program?

into

lease-

If so, for what
If there is to be

length of time?
continuation

this

program,-

price fixing
be necessary.

and rationing
If not, I doubt
the necessity of price fixing and
rationing.
That
that I

about

can

far

this time.

go at

if-.-1"'

;fi

HON

SIDNEY

Governor

•

feel

the

so¬

a ve

difficul¬
T

ties

and

■

the

i;/1
:g|jp

the
Sidney P. Osborn
.

the volume of con¬

services once

commensurate with
the demand, there will be a relax¬
ation and eventual abolition of
becomes

rationing.

price fixing and
•not

believe

I do

that any government

these

-of

the

that

part of

not recognized as a
rationing or price fixing, *
•

'-.a

;

•!,'./

•

;;

Kfl

ii.

& Trust Co.,

Bank

New Orleans, La.

Consolidated

ASSETS

because

Cash

once

get

Alvln

over

■

H«

Hansen

•.

U.
.

would

ing

price fixing and ration¬

for a limited

after the. war.

that .both

period of time

enormously important
from

tinue

should, be

seems

certain

urge

State who

qualified

particularly

are

inter¬

and

this oroblem to attend."

ested

your

that

Surplus

ft-

1,921,369.88

Oil,

Crude

Products,

Oil

•

Mortgages
:

Cost

Oil

Bareco

$8,161,206.45

and

it is

that there

us a

Oil

very

49,000.00

5),800 Shares, at Par——

Profit

Plant and Equipment, at

Less:

Reserve

for

and

Profit

fixing and rationing into the gost-

period, I wish to advise that,
as

personal opinion, is

price fixing and rationing into the
con¬

not the

and
riod

whether

are

not

the many

than

disadvantages

1,218.60

Provision

LIABILITIES,

CAPITAL

STOCK AND

Net

$1,388,767.09.

Accounts Payable

Income Tax

$4,177,233.07
574,529.18

Profit

Accrued

Taxes, State and Federal

1,169,453.68

Stock

and

;

Less:
Current

Surplus of

V'-,

.7-.

'j.'■

*>v-J

Paid—

5,150,939.78

of Year

•';

Dividends

$3,602,763.89

Company,

•;...«•:-,'•>.•
—

$2,614,517.06

Liabilities—.

Portion

Capital

Beginning

Earned Surplus at

56,296.29

Expenses

Total

Federal

SURPLUS

Liabilities:

Current

3,598,288.04

for Federal Income Taxes

Net Profit Before

Dividends

Paid

•'*•

"•

Subsidiary

$8,753,703.67

•*.

$1,778,844.00

Sub¬

sidiary Company Not Wholly Owned

7,047.48

Company

by Barnsdali Oil Company:
■;

Stock.——;—_______—$37,788.00
is
.i—.■
11,508.38

Capital

Surplus

1,771,796.52

——

Earned

49,296.38
Capital
•

Stock

Share):*

(Par

Value

$5.00

Surplus

Since

December

31,
$6,981,907.15

15)40

per

Authorized

4,000,000 sh.

-——_2,258,779 sh.
in

Dec.
Held

Treasury

31,
in

Treasury.

31,

Capital Surplus
r;"

Realization

11,117,775.00

2,223,555 sh.

•

••.■

:.''-vi'lvV'l';'1
4 ' *>
^
; .{•
31, lf)42„_
—"$1,958,872.
■■

Surplus, December

Add:

35,200 sh.

1942

/:■' ■;'!"*

Capital

Outstanding Dec. 31,
1943

' ";' 'r r-'v

p
35,224 sh.

1943—_

previously

Assets

Capital Surplus

—

charged

85,150.45

_______

Outstanding Dec. 31,

$2,044,022.91

2,223,579 sh.,

1942

'-'.f )}'"'■ f

Surplus: '• ■"

Deduct:

$2,042,601.84

Capital Surplus—
Surplus,

1940

since

Dec.

Barnsdali

31,

—_______

6,981,907.15

over

par

Oil

Company

portion

excess

cost

to a subsidiary company not wholly

owned of its own stock

advantages of price fixing

rationing during the

1,110,805.68

to, Minority,—

,U1ibi

Assets.

Total

Earned
as

Applicable

Operations:
Prepaid Expenses, Advances, etc.—<

Dec.
war

1,075,170.22

;

Development Costs

Deferred Charges to

Held

With respect to extending price

Expense

Intangible

Undeveloped

Geophysical

and

Purchases

Research

Issued

;;

$7,775,581.11

Deductions—__

___—$1,411,,093.54

Depreciation

Oil end Gas Leaseholds, Developed

Accrued

Tenn.

Other

Before

Lease

serious from the stand¬

Nashville,

9,509.30

Other Deductions:

Cost—.$36,738,889.47

Depreciation— 22,505,268.64

which would

development would

Interest

Stock Held

Company

Fixed Assets:

serious post-war infla¬

tion; .Such

$7,785,090.41

159,342.35

Subsidiary Not Wholly Owned,

higher wages. This would give
exactly. the spiral

18,937.91

Deduct:

would lead to excessive demands
for

$7,766,152.50

Income-

Income Before Deductions-

$42,433.75
++—•-_

201,776.10

is not

doubt that food prices
will rapidly rise, and in turn this

Operating

Dividends and Interest-

do not, con¬

766,314.49

Common

Company,

Investments-

Barnsdali

the standpoint of pri¬

$4,457,856.35

Non-Operating Incomes-

Values:

Stock
Other

•

Companies,

Other

Adjusted

;

5,224,170.84

—_•

Bonds

Stocks,

j -

161,729.7$

Net

General

pense

745,606.65

.Total Current Assets,

$12,990,323.34

lesser of Cost or Market

Investment

Incomc_

Taxes,

Market
_J__
^inventories of Supplies, etc.,

;

1043

Costs, Operating and General Ex¬

303,046.23

Inventories

Operating

Ended December 31,

the Year

Operating Charges:

Market

Gross

605,000.00

the slightest

done., away. istent.

wish
in

bankers

Cost

Receivable

Inventories

price control and rationing,

I think, however,

participate

Consolidated Statement of Income and Earned

1943

31,

I just cannot see how any¬

even

—

Accounts

with demand, rationing would
ridiculous
on
the face

siderable doubt

afraid that it will be necessary

imperative that

should

Subsidiary Companies

Securities, at
—753,700.00

Government

.'Cost

government such as

continue rationing of any

control, I

to extend

believe

will

you

$3,670,753.94

—

U. S. Treasury Tax Notes, at

impos-

utterly

tation and Government
.am

member

your

these schools, and it may be

For

post-war period, and I hold

these

Current Assets:

believe,'

trol, I

regimen¬

much

"We

of these schools is
acquaint all interested parties

Sheet—December

Balance

con¬

I dislike

when

and

your

accordingly.

bankers

in the same classrooms.

and

concerned, I am against extending

President, Louisiana Savings

Navy located in

notifying

Gov¬

insofar

sitges

might wish to find out

BARNSDALL OIL COMPANY

point of private, business.

policies will have to
with others which

this letter is
with the thought

and

you

where

then

"The purpose
to

that

school

one

with

•;

adjustment

,are

•

Mackubin, Legg

ers

State,

Army

banks

schools are now being set
up around the country for train¬
ing Government negotiators, con¬
tractor representatives and bank¬

Co. upon request.

Accrued

-be coordinated

■

War

inform you that, as
recommended in the Baruch re¬

may

least

It seems to be the consensus

policies

these memoranda

partment

of
It seems to me that there are
■those I have heard express them¬ few
policies as important as this,
selves 011 the subject that both
and I would earnestly hope that
price fixing and rationing are
likely to .be extended into the private business would in this
post-war period, particularly so if matter more and more come to see
the present administration is con¬ its own
long-run advantage.
tinued.
The advisability of this
.procedure is so intricately in¬
r
F. M. FARRIS
volved
with
other . domestic
President, Third National Bank,

port,

ernment

Rubber Corp.,
Conshohocken, Pa.
Tire

asked

schools will be held in your State,

Bonding
&
Insurance
Company, Pacific Fire Insurance

Committee

assure

the procurement officers

State

chusetts

ABA

slightest

bring

GEORGE ii. DUCK

the

accord¬

members

and

pro¬

understanding

our

you

from

Loans and Commercial Credit has

anyone

the

rationing as
*

that

where the schools

their

"The

will

each

being sent to

The letter follows:

ingly.

contracts

war

post¬

needs

Lee

steps

that

would perpetuate

price fixing and
ends in themselves.

"It

Shippers Insurance Company, Jer¬
sey
Insurance Company, Massa¬

ies

vate business.

and

goods

possi¬

Bankers

had from the insurance stocks de¬

how

■■If am

time:

delity & Guaranty Company. Cop¬

body can be really seriously ap¬
prehensive about price control and
rationing in the post-war period.
On
the other
hand, consider

interesting

this

period is
ot anything

of it.

offer
at

necessary

cancellation of

there

from local

to ascertain

when and

cers

will

ernment contracts.

Secretaries

inform

become

production
quick and

asked

are

schools

quick and fair settlement of Gov¬

Army and Navy procurement offi¬

fol¬

the

duction

Government

Association

State

and

discussing
the

assure

26, by the American

these
—

taken

contracts.

Exchanges, have
in

settlements

taken

war

contracts and to

fair

Md.,

York

war
n

New

situation

current

■

at such time as

product beyond the time when it
Once supply catches

confident that

sumer

Baltimore,

the

steps

that

with

will be held in their States and to

is necessary.

item would be
dire, indeed.
for

for

following the

ra¬

ble for any

all

under the
letter sent to the

Feb.

states

schools

contractors,

rationing

ours

judgment that
.the conse¬
quences of not
imposinga
war price and
•rationing sys-

training

theii^

and

lowing companies which the firm

control

Price

that

future,

Street,

State

every

latter

Their purpose is to acquaint
interested
parties with the

ers.

Mackubin, Legg & Company, 22
Light

The

classrooms will be open to bank¬

Ins. Stocks Look Good

of scarcity in certain
areas, the problem will be, one of
finding markets, and there will
not be
the slightest reason
for
continuing price control.
More¬
over, if there is anything that we
can be absolutely certain of, it is

convenience
and

control

seem

cancellation

the period

$}. not led to
.

main¬

necessary.

rationing

•system

areas

tinued

price

war

and

respect to con¬

of Arizona

the attainment of

cially
operations

price

years or so

and

Association.

Company, and United States Fi¬

that it is of

tioning in such

about

always considered price
fixing and rationing as necessary
to

held

disturbed

y'f

P. OSBORN

I have

means

Bankers

necessary

bilities

with gen¬
eral price con¬

Waiter Napier

the post-war period of our

may

System,

war,

program.

then

Secretaries of State Bankers Associations

believes

Governors,

importance

general

couple of

understanding
to our post¬

r,.

Reserve

utmost

tain

Board

I feel very strongly

how¬
ever,?! is a
question
that
requires much

for

production contracts

war

to participate in
Government negotiators and

opportunity

auspices of the Baruch report, it is indicated by

two evils.

the

Washington, D. C.

post-war

lend

HANSEN

have

conducted

believe it would be the lesser of

memoranda

can

Federal

have

will

buy things which will be
available only in limited quanti¬
ties, and under the conditions I

prepared

world

ALVIN II.

period,

money

the nations of
be accomplished.

Training Program

Bankers interested in the settlement of

com¬

want to

the

will

almost

iay Participate In War Contract

Settlement

are

Stock

Member

war

members

they should be
i

think

Baltimore

continued

interchange

are

whethe

the

period, and I believe
thing we have most to

Inasmuch

and goods between

ac¬

necessary.

precisely in line with
your request; I should like to say
that I am not pessimistic about

;t i o n
.war,

While not

1C03

ABA Bankers

President, Pullman Trust &
Savings Bank, Chicago, 111.

and that if we can
have
full
employment for war
production, the same can be done
for peace production, particularly

that,

the

:':v

impossible,

'possibly bring

myself to

V-'::■■■'"

fear is such Governmental control

to whole¬

BARTHOLOMEW O'TOOLE

earliest possible mo¬

the

that

P. NAPIER

President, Alamo National Bank,

with

ment.

THE COMMERCIAL & FINANCIAL CHRONICLE

the post-war

vision, so long as that may appear
"necessary." •'••-

•

purchased

1,421.07

9,024,508.99

war pe¬
Total

offset
now

by
ex7

;• ;.

and

Liabilities, Capital Stock

Surplus

$22,806,097.43

'Capital Surplus, December 31, 1943__

■

—

$2,042,601.^4

■

Thursday,- March 9, 1944

FINANCIAL CHRONICLE

THE COMMERCIAL &

1004

Opportunity...

Investment Dealers Here's An
increase

your

successful.

;

investment—filling
investment dealer.

•

omy."

■ '

BROADWAY, NEW YORK 4,

Content

WILLIAM S. BAREN
42

moved

' ' '

bill

the

Feb.

and

approved

the

Municipal Commission,
which has supervised the affairs
of the city since the initial default.
Representatives of cred¬
itors in England and the United
Quebec

Salesman's Corner

The Securities

Who Gets Hurt When
Makes Insufficient Profits

It's The Investor

The Dealer J
be

will happen. The business will
THE MERCHANDISE
IT SELLS TO ITS CUSTOMERS.
When profits get too small to
justify a business obligation which normally exists in every field of
commercial and industrial activity—that of meeting competition by
taking care of your customers—THEN CUSTOMERS ARE NOT
that

certain

deadly

things

two

THE QUALITY OF

deteriorate and SO WILL

ggg

TAKEN CARE OF.

feature of the NASD

The worst

5% mark-up ruling out

of all

have

States

the

approved

plan

and it is currently being studied

out of any business you can

take the incentive

Anvtime you

committee

Canadian

bad

many

The

for the
syndicate

plan provides

derwriting

un¬

bond houses of a new

banks and

the
proceeds to be used by the city
in the payment of bank loans and
of

issue

$55,900,000

bonds,

defaulted bond

Holders

principal.
the approximately

$228,000,000 of other funded debt

the protection they now enjoy through the efforts of the
small, but conscientious, and intelligent dealers who
have been serving them for years, IF THIS REGULATION CON¬
TINUES FOR ANOTHER SIX MONTHS OR A YEAR they are going
to find out that either their dealer is out of business, or can't afford
to bother with their affairs.
,
having

thousands of

has among his
clients two elderly sisters.
Between them they have investments
which bring them in about $3,000 per annum in income.
He just
finished making out their income tax reports last week.
This took
over two hours and another two hours was spent in traveling to get
Here's

We know of a dealer who

in point.

case

to their home.

•

not

were

months

three

TRADE

COULD

scientious,

business and was less con¬

real credit to the investment

IN THAT

SECURITIES

THE

ACCOUNT A NUMBER OF TIMES INSTEAD OF

ONCE A YEAR.

2% UNDER SUCH
CONDITIONS?
He would have had 50 trades during the year
instead of one and his PROFITS AT 2% MIGHT HAVE DAMNED
NEAR RIDDLED THIS ACCOUNT.
THAT WOULD HAVE BEEN
ALL RIGHT UNDER THE 5% RULING—NO CRITICISM—HERE

What if he had MADE A GROSS MARK-UP OF

South Tucson Utility

Condemnation Proceedings

Illegal

obligation or revenue, be
public sale and for¬

eral

bids municipalities

contracts

for

poration which is interested as
a
bidder or purchaser of the
bonds.

current

proceedings, it is pointed out that
the city of Fort Wayne has suc¬

Offered
a
light and
plant for 35 years and the
purchase of the Indiana Service
Co. properties will'eliminate the
competitive situation and avoid
the needless waste resulting from

cessfully
power

WAS

FELLOW

HAPPENED

TOOK

WHO
THAT

WOULD HAVE
INVESTOR
WAS

2%—BUT WHAT

PROTECTION

THE

SUPPOSED TO HAVE HAD?
V

As it

now

stands, the dealer^s handling this account in the most

bond is¬
provide the

be asked to approve a

order

said

considering

the

consolidation of the
Arizona, New Mexico and Colo¬
rado
holdings of the Federal
Light
&
Traction
Company,
parent concern of the Tucson

possible

trades.

wm.be

and

manner—he is

efficient

entitled to

It is service he is selling, NOT SECURITIES.

SAD

AND

SORRY; <TIME

WELL AS THE DEALER.
THAT

TIME

HERE

rope

THE

INVESTOR

facilities

Reedsville

;

„

RIGHT

0NLY

FOR

UPON

NOW—THE

AROUND

THE

NECK

THE

SMALLER DEALER BUT HIS CLIENTS AS WELL.

the

Water

Lewistown
Company.

&
A

special committee of council has
been negotiating for purchase of
the plant for over three years and
their
efforts culminated
in the
decision of holders of 90% of the

company's stock, at a meeting on
Attractive Situations
Guaranty Trust of N. Y.
Jan. 24, to sell the property to the
Ward & Co., 120 Broadway, New Situation Attractive
borough at a price of $1,650,000.
:
York City, have prepared circu¬
The necessary funds will be ob¬
Guaranty Trust Co. of New
lars on several situations which
tained from the proceeds
of a
York offers an attractive situa¬
revenue bond issue to be sold by
currently offer atti'active possi¬
tion according to a bulletin pre¬
the municipal authority.
bilities, tthe, firm believes. Copies
pared by Laird, Bissell & Meeds,
The firm of Harrison & (Co.,
ofi thp^ Circulars, on the/follow- 120 Broadway, New York City,
ing..iss%,r,may be had from Ward members of the New York Stock Philadelphia, acted as agents
;• CO., ..uponi, request;
for the borough throughout the
Exchange. Copies of this interest¬
Dw iiMbnt. i Laboratories
protracted negotiations and, ac¬
"A"; ing bulletin may be had upon re¬
Merchants
cording to report, agrees that
Distilling;
Croweli- quest from Laird, Bissell & Meeds.
Collier Publishing; P. R. Mallory;
the projected revenue bonds can
General
be soundly financed on a 30 to
Instrument;
Hartford
—

Empire Co.; Long Bell Lumber
Co.;
Southwest ,; Lumber
Mills;
Great .American

Industries; Kel-

lett

Aircraft; Mid-Continent Air¬
lines; Richards, Haskelite; Hart¬
ford Empire Co.; Metal &
Thermit;

Staley; Central Electric &
Tel.; Massachusetts Power & Light
$2 preferred.
.

Attractive Situation

35-year

Capital stock of Pollak Manu¬
facturing offers interesting possi¬
bilities, according to a detailed
discussion

pared

of
*

the

situation

Raymond

this' Study-

148
Copies

Co.,

State Street; Boston, Mass,
of

pre¬

had upon
request from Rayhiond & Co.
rriay

One

basis and 2%%

been carried in these
columns and elsewhere, the Comp¬
troller's current study constitutes

the

reasons

successful
program which

detailed history of the

conclusion

available $6,000,000 for the

1943,

addition there is
$1,000,000 for new street con¬
struction and additional funds
In

program.

for

and

widening

street

for

department construction.
Under the long-term improve¬

water

Milwaukee pro¬

ment

program

poses

to finance on a cash

basis

$22,000,000 of improvements in
six years, ending in 1949.
The
taxpayer will not be called upon

$1.50 for each $1 of im¬
which
was
the
penalty under the old plan of
issuing bonds."
'

pay

provements,

New York

City Debt Cut

$44,000,000 In Seven Months
Joseph

Comptroller

City

that New
York
City reduced its bonded
debt in the amount of $44,384,975
reported

McGoldrick

1, 1943 to Jan. 31, 1944,"
months of the

from July

first

the

seven

fiscal

present

and

$3,047,866,834

The

totals

dates

year.

respective

the

were

$3,003,481,859.

aggregate, $2,476,-

Of the Jan. 31

by the public
by
municipal
The sinking funds
$72,346,800 in war loan

932,784 was held
and
$526,549,075
sinking funds.
held

also

bonds.

American Internat'l Air

Transport Development

inspired back in 1915. As!
The New York Institute of Fi¬
stated by ML", Wendt, except for >
nance, 20 Broad Street, New York
$300,OQO due jfdr bond principal in
City, announces a series of factual
>yas

1944,. v^hich is' provided for by the
levy, alf/ subsequent bonded
charges,;will be paid out of
the city's Pqbljc Debt Amortiza¬
tion Fund. !The city had a total

tax

debt

$10,654,000 .general obligation
bonds outstanding at Dec. 31, 1943,
with the last bond maturing in

1952.

Creation

of the

fund was

au¬

State,
Legislature in 1923, the City
Comptroller observes, at which
time the city's bonded debt was
$29,700,000,
and
thereafter
climbed to a peak of $50,338,000

thorized

1932.

the

Act

Since

the

latter

year

city has rigidly adhered to

ther

general

obligation

bonds,

ai\d this factor was a primary
factor

shortening

from

the

original estimate of 50 years to
20 years the time when

the fund

would be enabled to assume the

outstanding

indebtedness.

Although the city called a halt
1932 to the issuance of bonds,

in
it

has

continued

nevertheless

the

of American Inter¬
national Air Transport. These will

development

given by officials and person¬

nel

Pan

American

Airways

System and are designed to pre¬
sent

the

and

history

the general

background of American Interna¬
tional commercial air transporta-\

.V'V':T ' '.r

tion.

the

lectures

instructive

and

Six

lectures

will

given

follows:
March

13:

Air

Transport

Pio¬

in the Americas—David
E. Grant, Foreign Counsel. VrvLu
March 20i Air Transport in In¬
ternational Relations — David E.

neering

Gran;.

policy of not issuing any fur-,

which

which
the firm has been obliged to pay
in recent years.
The figure in¬
creased from $9,000 in 1940 to
$31,000 last year, it was said.
in corporate taxes

have

ject

yield.

prompted the utility to sell the
property was the steady in¬
crease

though various reports on the sub¬

Gas unit.

$200 on those
Incidentally, Lewistown, Pa., To Acquire
we heard last week that oneliof the largest houses in the country
Local Water Plant
told its salesmen to put all [Accounts which Were inactive (to the
The
Lewistown, Pa., Borough
extent that they only had one; or two trades a
year) IN THE
INACTIVE FILE.
It was no longer possible to service such accounts Council recently completed pro¬
due to the higher overhead existing today.
Isn't that a great way to ceedings /incident to the creation
PROTECT THE INVESTOR?'?; The day when it isn't profitable to of a municipal authority for the
of acquiring the local
handle investor's accounts^ AND DO A REAL SERVICE FOR THEM, purpose

exemplary

"Milwaukee, A Debt Free
City," just issued by City Comp¬
troller William H. Wendt.
Al¬
chure,

Meanwhile, the SEC

purchase.
is

with which to effect the

program

and 1944 units of the long-term

principal and interest charges on
its approximately $10,000,000 of
outstanding general obligation in¬
debtedness is related in the bro¬

plant and, at a later date, will

def¬

needed im; provements mapped
out, but,
what is perhaps even more im- •
portant, the way has been shown
whereby it can and proposes to ;
finance that program ITSELF
on
a cash basis.
There is now
inite

has

only

not

tion.

from making

In connection with the

waukee

the furnishing of

legal, engineering or other services with any concern or cor¬

In this respect Mil¬
in a favorable posi-;

programs.

offered at

units

Governmental

busy on plans for post-war

are

pressed the desire to acquire the

report

"Many

law requiring that
local units, gen¬

duplication
of
facilities.
The
General municipal law firm of Chapman &
Joe Conway recently made public Cutler of Chicago has been re¬
an
opinion serving notice of his tained to study the various legal
intention to disapprove any bonds problems involved in the proposed
issued by the town of South Tuc¬ acquisition and the financing in¬
Aside from the
son, Ariz.,
for the purchase of cident thereto.
properties of the Tucson
Gas, McNear proposal, the city con¬
Electric Light and Power Com¬ sidered a competitive offer made

sue

sub¬

recommending a
six-year
improvement program,
including many projects which
mitted

Arizona State Attorney

means

recently

Council

Common

during the year this dealer checks and
pany,
under condemnation pro¬ by Stifel, Nicolaus & Co. and
watches over the various holdings, consisting of about 25 separate
The Attorney-General, A. C, Allyn & Co.
ceedings.
items.
Occasionally there is a small cash sum to be invested—but
according to report, ruled that
this account is mostly intact. > Last year two changes in holdings
such
proceedings would be il¬ How Milwaukee Achieved
were made and this dealer made about 10%
on the two items sold
legal.
Debt Free Status
to this account.
This 10% represented slightly over $200 in total
Voters of the town have ap¬
gross profits—THE ENTIRE AMOUNT THIS DEALER MADE OUT
The story of how the City of
proved an issue of $9,500,000
OF THIS ACCOUNT DURING THE YEAR.
Milwaukee, Wis., achieved the re¬
bonds to finance purchase of the
WAS HE ENTITLED TO IT?
WAS HIS WORK WORTH IT?
markable accomplishment of es¬
utility.
Similarly, the citizens
Let us see if it was. - Here are two old ladies, they are in good hands,
tablishing a fund which is now
Of the city of Tucson have cx-J
their faith and their trust in this dealer is absolute—frankly, if he
sufficient to take care of maturing
Every

the per¬

improvement

manent

bonds issued by

investors all over

following

the

program,

amounts were levied for

agreement, fee for the company's, rials. It was determined that the
services is wholly contingent upon permanent improvement tax levy
actual consummation of the pur¬ for 1944, after allowing for a $2
chase and will be based on the reduction in the tax rate, should
cost of the project to the city, up be $3,035,000, and $3,600,000 each
to a maximum of 1%.
year thereafter.
Commenting on
this point, Mr. Wendt says:
The
Indiana Legislature
in
1943 passed a

creditors.

results which it is bringing about, is that small will be issued new bonds on an
the country ARE GOING TO FIND THEMSELVES
exchange basis, bearing contract
"ENTIRELY WITHOUT THE SERVICES WHICH HAVE BEEN OF interest rates to
present maturity
INESTIMABLE VALUE TO THEM IN THE PAST.
They are going and at rates of from 3V4% to 3%%
to lose money.
They are going to be without assistance when it thereafter. Maturities will be ex¬
comes
to buying or selling investments intelligently.
Instead of tended from nine to 16 years.
the

term'

unani¬

properties of the Indiana Service
Corp., value of which is estimated
between $14,000,000 and $16,000,- had to be deferred because of war¬
000.
' Under
the terms of the time restrictions on use of mate¬

terms of the refunding program

adopted by the City Council on

N. Y.

proceedings looking toward pos¬
sible acquisition by the city of the

the

Pursuant

give it back its auton¬

state—write
'

Wayne, Ind., Seeks To

Acquire Competitive Utility
contract

for

fund:
for
mously ratified by Fort Wayne,i 1937, $400,000; 1938, $800,000; 1939,
a step nearer reality on March 2
$1,200,000; U940, $1,500,000; 1941,
when
t h e
Quebec - legislative Ind., City Council on March 1, the:
Chicago investment firm of C. W.j $1,900,000; 1942; "$2,100,000; 1943,
assembly approved a bill "to rat-;
McNear & Co. will act as agent $2,260,000.
ify the financial situation of Mon¬
A
for
the
municipality in future
special
committee
of the
treal and to

field
retail
»

LOW—exclusive to one dealer in a
today for full details.
1
COST IS

Fort

which has
bond principal

maturities sance May, 1940,

arresting, covers general
long required need of the

COPY—human, attention
of

been in default on

in your daily papers

campaign for use
available—it's been tested, proven

leads—new accounts

business—secure new

advertising

Refinancing of the indebtedness

the

sinking fund purposes.
Pending
the; adoption" of a definite long-

of the city of Montreal,

annually

amount

required

reduction

the

equal

Municipal News & Notes

March
of

Air

27:

rv.\

Backstage;.problems

Transportation^ Phul de

Kuzmik, Aeron^ufi,ca,f^hgjheer,
Operations Depmt&eiijL" .
t/;;
April 3:,Passengers'^ndCargo
Take Wings — ^Cv^Lb^b.ury,
Passenger

Traffic'Manager. g.g;.;

April
10:
Regulation of Air
Transport in the United States—.
John C. Cooper, Vice-President
and Assistant to President.

April 17: International Control
improvements.
Mr. Wendt of Commercial Aviation—John C.
• •
states, has been obtained pursuant Cooper.
The cost of the series, which is
to a plan adopted by the city in
1937, whereby a tax levy is made open to the public, is five dollars.
make

permanent

The fund for this .work,

.....

,Volume 159

THE COMMERCIAL & FINANCIAL CHRONICLE

Number 4262

pointed. out,

to ! ent I shall give you my. views in time, and stock market
money has
3, 4 or I the best way l ean.
got to be made now; I think the •
"I think the market is now tied market is in
year with all |
good enough shape
of
the, vicissitudes that might' up with the question of outcome that money can be made now.
happen to it and another thing to and duration of the war. Politics,
"As to which stocks are in the
buy a block of trading
stock taxes, regulation and the price best- market position at the
minute,
which is only going to be held level all stem back to
I put a very high rating on what
it; how the
for a brief turn, and where in any war is
going to be won and to people think rather than on what
event the loss is
limited, to throw¬ what extent; how long it is going is actually happening. We have
ing it out at a fraction or a point to take to win it and how much had a lot of theories that
stocks,

Mow To Make Money

make

(Continued from first page)

thing

one

investment

5% and hold it for

In The Stock Market
was

is going to
in the future.
pan make any real money through Such discoveries, however, are of
He

considerable ' time

devoted

making, the point that

owning

diversified

one

list

se-

heard

ever

rather

thing

occurrence.

rare

"The

that

of,

great

;

The basic requirement, accord¬
ing to Mr. Loeb, is to have, first
of all, a proper market back¬
ground and, second, a stock or
stocks promising to at least dou¬
ble in price.
He pointed out that
every time the market reached a

and
taxes is a very important one to¬
day.
People seem to feel that
there is magic in receiving divi¬
dend checks and clipping coupons,
forgetting that the securities they
buy may depreciate in capital
value many times the amount re¬

level

ceived

where

could

one

find

not

question

situations, it was an auto¬ taxes.
"The
matic signal
to stay > out / of it.

income

before

even

such

■

I get around this, if
I
Mr.. Loeb said:
...
can,
is when an account is
"There is another factor about opened, to try to get it to agree
the amount of money to be put to draw down 6% of its capital
in the market, and that is, the fac¬ annually or 3% every six months
tor of diminishing returns. I have and throw all of the dividends and
interest into the general perform¬
never been able to figure out the
If you can
ideal amount of money to employ ance of the account.
way

client that this is the

in this way—maybe $25,000. Real¬

Convince

ly clever people using that amount
of money often stand to make a
much higher return than others
make on the $250,000. The larger
the amount of money a client has,
the smaller the portion that can
generally be used in ordinary

way to run his account, you will
find it less trouble to get him to

transactions.
"No

how

matter

trained
*'!■

\ '

well

how successful

one

has

stocks

have

had

for

appreciation.

lot

people, who
against short-term trading,-

were

to follow the latter course.

"Then there

one

buy

are

lot of people

office in the Street who

every

have much

than they

more money

know how to profitably use in the
stock market at any given time.

been, the stock market is still a
place where the best judgment If

you can show these people that
by trading short-term and contin¬
uing to trade day in and day out
tion and best care, I think stock
you are a good enough trader to
market forecasting is a very inex¬
help them make a profit, I think
act science.
I know no one who
you can have a very good chance
has ever been right all the time; to show them that it is
worth¬
can

be upset.
with

"Even

the

best

informa¬

and I think the big secret; of those
who have made more money than

others is to realize their mistakes
and get out quickly.
I think this
is a very important factor, purely
from

business

standpoint,

keeping accounts alive and active.
I do not think anyone should keep
an ' account
active just to make
commissions.
Many have gone
through the experience of buying
stocks for someone, seeing them
go down two or three points in¬
stead of up, holding those stocks
for many months and having an
account
become completely in¬
active.
and

This

hurts

the

while despite

the Seemingly high
For example, at the end of

tax.
a

tHiatyp^

might have made 'enough ihoney

important,

the

■

interval

are

the

60%

bracket}'

In}other

ohiyjmake 40%;
profits shjdwn from any

words, he would
net of the

short-term

trade. ,JThis' [40%
is
nothing to be sneezed at because,
in the first place, it is made with

that

funds

•

would not have

been

employed

otherwise; next, it is
a comparatively short
and, finally, the risks in¬

realized in

time';

volved

are

below normal

risks.

invest¬

Consequently,

be¬

the

there

going

example here,

dollar

before tax

actuality is

only

quickly' and;nthat."profits should

Really, I do not
much about
the war, although we read the
papers, hear a lot of things, and
have been doing so for so long.
"My feeling about the war. is
that as yet very few of our troops
have been engaged in it, and that
know very

shall have to wait until two

three

million

our

men

have

Consolidated

Edison

and

the stock in the

course

single year fluctuated

than 7 times the dividend rate is
more

than

fluctuation

can

see.

The actual

greater because of
the larger amount that has to be
deducted from the dividend than
has

deducted

from,

capital

loss of 40 cents after tax."

-■

Mr.

Loeb

went

loss of

"Of course,
how to

similar table oh bonds.

While the

last

ket outlook will have to

con¬

sidered in that light.

Markets go
up or down for psychological rea¬
sons, and the excuses we get for
strength or Weakness are never
the real

bought when earnings

whole will exceed with

the best of the

cer¬

"Most

been

the

contact

1934-1939

people
with

have

think

that

the market does not act well now;
that it is bumping on the top;
that they

the

don't like the action of

industrials in relation to

the

rails, etc.; that there will be an
early^eace; that we will have a
break on transition to peacetime

think

the

best

later

war

what

such

most

other

that

market

rise

term

near

and

rather indifferent

as to the long term.
I infer it is
(including
Canada).
We only the immediate term you are
interested in.
can
hope for eventual complete
"Of
elimination of the capital gains
course,
total corporation
tax
in
some
enlightened post¬ earnings are double now, even
war period."
after deducting taxes, than during

countries of the world
Great Britain

and

From this

point Mr. Loeb went
into the second part of the dis¬
cussion, which was the outlook for
stocks at the present time.
He

makes

interesting.
you

will

see

what

that

you
,.

popular

the

best

and from

the

1935-1939

years

five to six times those

before deduction of present
So, on this basis, I would
particularly stressed the tremen- buy my stocks now, when senti¬
ment is for a good post-war out¬
dqus difference - between; the ac¬
curacy of such opinions when they look, and sell them before actual
e a mi ng s
could be
may
be volunteered and when post-war
years

taxes.

list

and

the

are

most

will profit by it

stock

which

the

one

now

stocks

opinion,

the

over

you

their

stocks

unpopular,

which

un¬

in.

get the most buying
power
later
on
when
people
change their minds.
For this
reason, I think the aircraft manu¬
you

facturing stocks
rank,

are

the first

"When

California

I
visited several of these companies.,
I talked to their executives re¬
was

garding the situation when

peace

comes, how much cash they had
and how real their earnings were.
I also talked to some

tract

of the

con¬

termination and

renegotia¬
people in Washington re¬
garding their policies with refer¬
tion

to these

ence

concerns.

am con¬

vinced

that,
no
matter
what
happens, United Aircraft is going
to be on top and do a tremendous
business.
you

I think that if today
will write down such stocks

General Motors, du Pont, Alsome others of

lied Chemical and

that kind, you will find that in a
few years the greatest favorable

change

price

Aircraft.
too

will- be

United

large and will find it hard to
to what they have got."
..

add

The others have grown

Foster Succeeds Davis
As SEC Solicitor
Roger S. Foster, counsel of the
public utilities division of the
Securities

mission,
as

Exchange Com¬
appointed on Feb. 24

and

was

solicitor of the Commission to

John F.

succeed
tered

Guard

Davis, who

United

the

Service

en¬

Coast

States

November. .%

last

Reporting- this Philadelphia ad¬
to the New York "Herald

vices

Tribune"

added:

St.

Professor

School

joined the
September,
as Assistant

staff in

serving

and

practiced

Paul.

■

Foster formerly

•1935,4 after

post-war boom.
think

view

low.

are

pie think earnings are going to be
high, or sell when people think
earnings are going, to be low, re¬
gardless of the situation. For ex¬

law:

capital gains seems moder¬
ate compared to ordinary income based on post-war estimates will
tax
rates, capital gains are of probably come in the next few
months. So I am bullish for the
course not income at all, and are
taxed

should not buy a stock when peo-

because

ones.

think

tax oh

not

should

.concern

engaged before we shall ample, the fact that the aircraft
we are up against.
By manufacturing
companies
are
large, I think - the war will thought by the public to be cer¬
a long time, and that the mar¬
tain of losing money after the

years.

know what

Why anybody should risk buying
Chrysler for $3.50 dividend less
of

stock

been

tainty

tax when

should be sold when earnings are

high, and the contrary, that the

conditions, and that they will buy
dr: knotheif to be gains, [after the stock is held for
their stocks cheaply and await the Conimission's
six months.
I could make up a

profit is practically found. In case
of loss, except as I will explain
might have been opportunities in a few minutes, the same per¬
in
which
he
could
have
rer
centages approximately prevail.
couped his losses. So I think it is In other wordsV in the case used
cause

cost.

from one source

commissions ment
customer

tradef of

will

26 points in the case of Chrysler.

few months

think

that, basically, the
longer the war lasts, the more dif¬
ficult it is going to be to preserve
stock values, and the more diffi¬
his personal services should cer¬ cult it is going to be have a politi¬
tainly have accumulated $100;000 cal situation to our liking, with
for investment.
It should be real¬ less regulation and lower taxes.
ized that, as this man has paid his
"Yet my immediate inclination
tax on his ordinary income, he is to be bullish.
I think the mar¬
is already in the 61% bracket as ket is more apt to go up than it
far as any income from his in¬ is to go down at this time, and
vestments is concerned.
Thus a more apt to go down than up in
5% bond would yield him only the long run.
I have seen a tre¬
1.95%,
If this man invested his mendous amount of data, includ¬
$100,000 at 4%, he would get only ing our own, on post-war pros¬
$1,560 a year, the rest going for pects and post war earnings esti¬
taxes., On the other hand, if he mates, and all I can say is that
made'a 4% long-term capital gain I think, if we are to have a bull
(and 4% is a very low rate of market, it must come now before
capital
gain)
he
would
keep we can actually check those esti¬
$3,000 of it.
If he made a 10% mates against reality.
"The post-war estimates that 1
capital gain, he would keep $7,500;
have examined I think in many
20%, $15,000; 30%, $22,500.
I think peo¬
"It is perfectly evident to me cases amazingly high.
that, to tie up $100,000 to make ple have been doing their figuring
$1,560 a year is a ridiculous risk altogether by mathematics. They
to take, especially when one con¬ have taken theoretical income fig¬
siders that stocks fluctuate in'the ures and sales figures and pre-war
profit margins - with taxes,, of. 40
course of a year many times their
dividends.
In 1942 I made up a or 50% and end up with earnings
figures which in many cases are
table showing about a dozen prom¬
I think
inent investment stocks with divi¬ substantially above 1937.
dend rates ranging from $1.05 in the 'nigger in that woodpile' is the
the case of Paramount to $6 in tax rate, because it seems to me
the case of Bethlehem Steel and almost impossible to expect Wash¬
with a spread in points for the ington to cut taxes to such an
extent that corporation earnings
year ranging from 4 points in the
case

;

for

small or the account procedure, and at a time when no
was a purely trading account.
If one wants those stocks.
a
man
is /to: operate
a
purely *: "In order to select a stock, you or so if it does not work.
The
trading
account, the
important first must have your "general mar¬ only risk I can see in the latter is
"thing to consider is the dollar loss ket in the right position, because an occasional
overnight. catastro¬
of picking a wellthat might be -sustained if the the chance
phe that turns what one hoped to
trade turns out to be a bad one known stock and having it move
hold to a trading loss into some¬
and not the total amount of in¬ against
the averages is rather
thing larger.
vestment.
For instance, the pur¬ small.
"Talking about income, I set up
"I think one important element
chase of 1,000 shares of stock with
a new table only the last
day or
is unpopularity.
a broad market at 10% for an im¬
The way I look
mediate advance represents under at it is that one should buy some two, which I am going to have
printed, to try to convince people
normal circumstances
a
trading active, well-known stock when
how much more important it is
risk
to
the
buyers of perhaps people do not want it. Then, when
for them to pay no attention to
% point plus cost and not the you begin to see the idea become
interest or dividends, only to ap¬
amount of investment.
popular, it is time to consider Sell¬
I took various ex¬
Mr. Loeb said he knew that ing it.Unpopularity is of course preciation.
customers' brokers ordinarily called for only when one is trying amples in making up this table
with estimated ordinary income
liked? debits because they were to pick attractive, long-term bar¬
from
business
or
profession at
Quick short-term trading
profitable and also because they gains.
seemed to tend to make for larger profits are generally made long $5,000 to $100,000 a year plus vari¬
ous assumptions of
savings avail¬
orders, but he said that in the long after stocks have left the accumu¬
able for investment of from $5,000
run
an
under-invested
account lation area and long after they
to $250,000. As an example, let us
< by popular standards) without havd become popular.
discuss a man earning $25,000 a
"Another approach is to try to
debits will be more profitable to
I believe that somebody
the client and will pay out the uncover
some
unknown
stock, year.
with such an earning power from
some stock
that no one possibly
broker better as well.
capital

1005

Law

Harvard

the
later

Associate

Professor at the Yale Law School,
where he specialized in the field
of corporate and reorganization

problems. He
the
and

graduated from

was

1924

Harvard Law School in
was

admitted to the Minne¬

sota bar that year.

"Morton

pointed

E.. Yohalem

the

was

Commission

succeed Mr. Foster

ap-

counsel to [

the

public utilities division. He
is a 1930 graduate of New York
University Law School and was
admitted to the New York biar in
1932. -Prior to his

employibeiit by

the Commission in 1938 'he pirac-ticed law at New

YdrkJ 'sbecializ-

ing in corporate reorganization^:"
checked.
•rnrnmemmmm
; i,
they must be given, such as is
I ;dt>"not think
"In brief, war stocks went up be¬
^tb^ hurts business, trade and loses money consistently the case right now/ }
;
Equity Finance For
but 'rkther helps it* very much, be¬ so .that he has no
"If I can remain silent in my fore war was actually declared
profits from
cause only ohce in a great while
which to deduct his losses, he is office for a few months and then and went down during most of the Small Business
does one find customers who shy allowed
In the, same way I
The Bankers Bond
only $1,000 a year deduc¬ can say I think the market should war period.
Co., Inc.,
away from such quick losses. }:■
tion against his Ordinary income
think peace stocks will go up now Kentucky
Home Life Building,
; be bought or it should be sold/'
"When
it
comes. to
finding but this type of man should not Mr, Loeb declared, "my chances of rather than after we actually win Louisville, Ky., have issued an in¬
stocks that are going up 100%, we trade at all.
correct judgment are pretty good; the war.Of course, if we should teresting study on the problems of
"The big point to realize about but when wire or,
have
several
different choices.
telephone mes¬ not win the war* tomorrow, stocks Equity Finance for Small Busi,[Perhaps the best consideration for short-term trading profits is that, sages come to me every minute, would have, to"gQ« up';because they ness; contained in the study are
while
most of us is. timing stocks that
they are,, subject to the I do not think my judgment can have not yet reached ,^£asonable a number of suggestions regarding
same rate of tax as
are well known and have a ,broad
an approach to the problem. Cop¬
ordinary divi¬ be nearly as good. This is some¬ discounting level.;t; f. f, f0-y|: •
market,
75% or 80% of one's dends and interest, the risks in¬ what the position in which I find
"I think that after the war we ies may' be obtained from the
attention should be given to this volved are much smaller.
As I myself today,
However, at pres¬ are going to have a very difficult Bankers Bond Co. upon request.

be. left fo takd Care 'of themselves,

man

does

on:

not

know

•

.—-—

THE COMMERCIAL &

1006

Supreme Court.
They experiments, and should both (1)
and have been entirely recognize the differences among
consistent with the Constitution, individual producers, and (2) re¬
and appropriate to the democracy ward them on the basis of incen¬

pendent
may be

Reconversion To Economic

Way

The Democratic
are

system

any

tendency

The

leaders.

with

carrying

"floors."
of the
produpt may be weakened (as in
the case of cotton), and a mini¬
mum
price always leads to a
position

-competitive

The

V';

maximum price.

Lord

The

help those who

may

the Govern¬

help themselves, but

of the war

inconsistent
Thus it is
generalize, and the er¬
new

are

hasty

controls
or

peace economy.

difficult to
rors

group

cept Government aid in
stocks or in fixing price

the

all

economy

any

of men who find themselves
hung up with a surplus of goods
and facing a drop in prices, is to
call for.help.
But by this time
we should know that the Govern¬
ment when it helps is apt to hold
on.
It is dangerous to ask or ac¬

bad, and the same may be said
earlier laws and agencies.

Not

petition.
Perhaps most dangerous of all
is the attitude of a few business

generalization are

likely to be made.
terms

Such

chaos.

The answer to both is sim¬

ple: competition must mean "fair
of com¬ competition'' — competition in
which those competitors who are
petition.
Weak sisters and soft
monopolists shudder. They seek shortsighted, wasteful, or exploit¬

times

there

the

"chaos"

set

is always

such

about

talk

But the only
enterprise—

cartels.

social defense of free

"capitalism," if you prefer—is
the basis of free individual
and selling. That

or
on

choice in buying

competition.

No monopoly

price can have a
against .regulation.

An economic

means

defense

sure

democracy must be governed by
economic laws arising from free

competition, or else
subjected to political

choice under

will

imposed by government.

laws

One

tions

of the most dangerous no¬

eventual

toward

tending

government control is that "busi¬
ness" is responsible for full em¬

The business leader
and proclaims that
people" will never

ployment.
who

gets up

"the American

for mass

again stand

unemploy¬

be right; but it does
not follow that free enterprise can
or should undertake to guarantee
ment

may

all

alleged

men

right

pump-priming,
and purchas¬
ing-power creation are no better
when run by "business men" than
by "Government experts." If we
have to go through a purgatory
of experiments with "full employ¬
After

work.

all,

make-work projects

ment"
lief"
of

system of "work re¬
to millions

made

attractive

perhaps

individuals,

men

business

It might
New Deal

had better stay out.

let

better

the

responsibility for
the dissatisfaction and ruin that

bureaus take the

would inevitably result.
All Government control

finally

and

credit.

gets

back

money

The business

men

who accept with

tend toward

extension of Gov¬

ernment control

that
lean

some

is the possibility

business

toward

leaders

may

combination

unsolvable, would serve to imple¬
ment

collectivism in

one

form or

another.

Fair

Competition

•

With final reference to the ta¬

pering-off theory, however, the
main point made here is that the
nation can pass gradually from a
condition of surplus stocks
and

substituted
be more
in

agencies
expert and more flexible

dealing with various and chang¬

till

larger supplies of goods be¬
available, implying that such

come

It sought (1) nonpolitical regulation, expressed in
rulings based on
(2) adequate
evidence, according to (3) general

ing conditions.

principles, and subject to the (4)
gradually evolving legal system as
interpreted by the Supreme Court.
This sort of quasi-judicial admin¬
istrative body is poles apart from
agencies as the WLB and the
with their arbitrary "direc¬
tives" issued to deal with political
such

supplies would develop in peace
and would
automatically

involved.

Let

unsocial activities.

price

and

fixing

related controls until such a time
the

quantities

the

"co-.

restricting

But why can't:

tapering off without
personally conducted and1
controlled by "directives" from aWashington bureau set up by a
political candidate?
•' *
we

any

its being

prices are at

large as the quantities in

■

The Government can and should

quit this business of carrying sur-

available at present

least-

goods

most

all

facilitating,

advising,

prevent inflation from causing a
large rise in prices.
This argu¬
ment seems to lead directly to a
continuation

operating" that political agencies
are fitted
for in a democracy—

times

OPA

actual demand at such prices.
But

that time would certainly

♦

of ultra-conservatism—from revo,-

treatment

the

drunken

man

should begin by do¬ when left to his own devices—it republic, and we need give little
everything possible to make
just doesn't work. Nobody is go¬ time to the present debate.
free enterprise work efficiently,
ing to put the sovereign state in
Indeed, one great danger of at- :
"Administrative Regulation"
according to a social point of a
hospital and make it carry tempting to do post-war planning:
What, then, is my position?
view. This means using the good
now is that we are at war and the
through the tapering.
I oppose the extension of com¬
parts
of
both
old
and new
On the other hand, the analogies Government is therefore much in- plete government control over regimes.
It would mean freeing
fluenced by the existing war regi¬
are
very imperfect, because they
business, and especially control by business
from
bad
regulations,
mentation. Among officials, habits '
assume that those in control will
the central government.
I oppose while retaining and strengthening
recognize that controls are bad of control are being formed or in- :
the extension of monopoly power,
good ones. The collectivistic at¬
and especially that complete mo¬ titude of the Government toward and should be ended. The taper¬ creased—perhaps, too, among citi¬
ing of government control is not zens, habits of submission to con¬
nopoly which arises when the private
saving and investment
to be arranged and directed by a trol. A "war economy" really is
government manages business.
would have to be eliminated at
not an economy, and war agencies
With it would go pump- scientific, non-partisan physician.
But I do not oppose the "regu¬ once.
are not for times of peace.
War turns to peace rather sud¬
lation" of business by government, priming,
deficit financing, ,the

lution to counter-revolution.

tension

rules

competition—rules

fairness

which

do not

destroy the profits motive as an
incentive to business enterprise.

this country had made much prog¬
ress in the evolution which leads
from judicial regulation to
istrative
regulation.
The

admin¬

agency, and probably the Federal
Trade Commission was gradually
progress

These "commissions"

press

the theory

in the
of

same

economy, we

ing

di¬

Moreover, the maze of conflict¬
If it be urged, however,
policy, and managed denly.
Discriminatory taxes, that progress toward peace may ing interests and schemes suggest
that the eventual outcome must
come gradually, with growing as¬
subsidies
and protective tariffs
would be strictly limited to ex¬ surance of victory through ade¬ be some stalemate with reference
to the whole mass of proposed,
ceptional and temporary applica¬ quate provision for war, the reply
tions.
Trade unions
would be is that the tapering should begin political controls: wage stabiliza¬
regulated. But the lessons of fi¬ while the war is still on. The idea tion, "national service," price con¬
nancial history would be applied of gradual adjustment should be trols, subsidies, war taxes, rene-,
in better regulation of credit and applied 50-50 throughout an over¬ gotiation, termination and " public
lapping transition period. One has works for "full employment"—to
more careful management of the

easy-money
currency.

monetary system, to assure

main¬ merely to note how proposals for

ing

materials
and
plants
over
to
production for
civilian consumption are received
in war time.
At once the cry is

the SEC,

raised that the

tenance of

adequate reserves hav¬

objective value.
Effective
publicity concerning corporations,
and certain desirable features of
would be retained. Equal
bargaining would be

collective

accepted
reserves

by
for

all, and reasonable
old

age

and unem¬

turning

won.

surplus

The

war

must first be

tapering must
comes!

all be

are

the main reasons

why

few.

All

these

bear

reconversion and the post¬
economy. What sign is there
of any agreement under present
leadership?
"'

upon
war

;

Frankly,

cisive
that

done after peace

These

mention

with

blunt

and

•

de- "

sincerity, it Should be stated
reason hgainst some/of

one

the current post-war

plans which

proceed with caution in propose an extension of Govern¬
ment controls, is that there exists
matter of course.
following the Baruch - Hancock
a need to get rid of radicals and
The essence of the foregoing is scheme of organization for recon¬
This scheme relies too demagogues in high places who
that the basis of a sound transi¬ version.
have used their power to foment
tion policy lies in a firm and sure much upon the self-control of an
class conflict, destroy democratic
drunk
understanding of that system to¬ executive group that is
institutions
and
bring financial
Despite suggestions
ward which the nation is to move. with power.
ruin to the nation. Any tendency '■
In the present case, we should ac¬ to the contrary, it perhaps tends
toward prolonging the influence
cept the lessons of our own great unduly to postpone the tapering.
of such elements is unfortunate;
What else can one infer from such
past and of recent Russian social

ployment

would be

taken as a

must

ex¬

"administra¬

tive regulation," or the idea of a
"war government regulative agency that
economy" over into peace is con¬ has
administrative
and
quasisiderably increased by the diffi¬ judicial powers .'which are
(1)
culty of taking a position between granted witb 'due .definition by
two extremes.
Not all the exist¬ the Legislature,' and (2) subject to
ing New Deal laws and bureaus judicial interpretation by an inde¬
The danger of carrying

cies.

making
Extremes; Favor

taken

plus stocks, and at once. Business,
should carry this load.
Let busi- '/
greatly delayed by the price ness men handle the tapering off, ♦
"emergencies" as seen by a Chief
ative will be restrained by gov¬
It will be well in many cases to •
fixing controls.
It might never
Executive who is primarily the
ernment.
come.
The way such controls re¬ take the loss quickly, so as to re-'
head of his party. Nor is it rep¬
Similarly, the word "control"
strict investment and production duce the ultimate total. (Can't we
resented in the NLRB or the SEC,
leaves open the question: Where
are so obvious as revealed in the
remember what happens to for¬
even
if those
pre-war
agencies
are the initiative and direction to
nation's experience between 1934 eign debts long deferred?)
»
have had some good features.
come
from?
"Control"
which
The Government can and should
to
1939
that
no
discussion
is
merely
restrains
excesses
and
needed.
(By a system of virtual get out of this business of fixing:
Basis of Policy Lies in Clearly
guides individual activities is very
business terrorism, the New Deal prices and wages.
Let the Gov- '
Understanding the Goal, Free
different
from
"control" which
seriously retarded investment and ernment provide information and1
Enterprise
places entrepreneurial decisions
in a sense prevented price infla¬ free markets, and see to it that f,
My general position is that by tion.
and management in the hands of
But at the same time it prices are made without monop- far the most important internal
government. The choice, however,
caused millions of idle men and oly, fraud, or other exploitation.;
does not lie between (1) central¬ question pertaining to the transi¬ billions of idle
Then the faster prices rise to a •
money);
/
ized
and
complete government tion from war to peace is: Are
In contrast with the Eccles' ar¬ level which represents the true
control of business and (2) laisser we to accept the principles of free gument for temporary price fix¬ equilibrium between currency and
faire—not between control and enterprise and competitive equi¬
ing, one might just as well say, goods, the better. Only at such a
no control.: We have a choice be¬
librium as the bases of our pro¬ let prices rise to encourage the level can stability be maintained.
If so, the transition be¬
tween "control" and "regulation " cedure?
supply of goods until the increased
the latter merely laying down the comes but a matter ;of time, and
Existing Agencies Not Suitable ;
Supply hold prices down.
For Planning
rules of the business game and its problems have to do with de¬
One often hears the argument
tails/If not, : we then may well
telling business men what, in the
The next most important step
that after the war there should
social interest, they should not do. ask: Is any real transition to be
be a gradual "tapering off" of is to adopt the political agencies •
Are we merely to per¬
The failure to understand the made?
such controls as price fixing, pro¬ and select the Government per¬
moderate position—the truly "lib¬ petuate the system of central con¬
duction quotas and the holding of sonnel which are in accord with
eral" position—that lies between trols of the war period? As Henry
free enterprise and individual in¬
surpluses
by
the Government.
control and no control, or between A. Wallace recently put this ap¬
This calls for prompt*
This argument has a subtle appeal, centive.
By "working together"
monopoly and unbridled competi¬ proach:
for its suggests the gradual feed¬ action.
tion, is the cause of most of our we achieved success in war; now
Certainly a great deal dependsing of • a starving man. or the
trouble with post-war planning. by
"working together" let us
"tapering off" of a drunkard, with upon the men who would be in
Undoubtedly, too, it gives rise to the achieve success in peace!
the idea of avoiding extreme dis¬ charge of any extension of price'
danger that the nation may plunge
Assuming the desirability of turbance.
and ration control in the post-war
from one extreme to the other. free-enterprise economy, and the
But the "tapering off" of war period. Give us men whose ambi¬
We may plunge from 12 years of scientific economics which alone
controls is like the tapering-off tion is to preserve the spirt and'
New Deal radicalism to a regime can explain and guide such an
the institutions of the American

rection.
Avoid

be worked out,

based "upon the assumption
Inter¬
that all the problems of value and state Commerce Commission had
production are either solved or become accepted1 as a desirable

ries,

S. Eccles—that by
inflating our credit now we can
justify the perpetuation of war¬
cials—e.g., M.

and "for
being" steps must be
by existing executive agen¬
can

time

time controls in peace. As a de¬ price maladjustments, under pri¬
vate enterprise as well as under
mocracy, either we must stop in¬
porations"
of
the
New
Deal
flating the currency now, and do Government control. We should
regime. The earlier commissions
what deflating may be necessary, by this time know enough about
were the result of the substantial
political planning to know that we
or we will have to go through a
failure of the negative system of
cannot assume .that it is synony- *
more general price inflation later
passing laws forbidding this and
on
as
an
expression of free in¬ mous with sound and effective
that, and for their enforcement
control. Let "the Government" do
dividual choice.
relying on appeal by inj ured per¬
Let :
The Eccles notion appears in a all the "planning" it desires.
sons to the courts.
American de-r
recent speech in which he argued it lay its plans before the people
mocracy rejected that system.
It
in general and the business menthat we should hold prices down
which could

To be very concrete, I would re¬
somewhat as
proposed under "The mind both radicals and conserva¬
Swope Plan" and developed under tives that long before the war

And plenty of economists can
be; found; .whose superficial * theo¬

change from the earlier
of "judicial regulation."

Second, they are essentially dif¬
"ad¬

once

the NRA.

the

ministrations," "offices" and "cor¬

labor and enterprise
was

Second, we must abandon the
notion-found among some offi¬

ferent from the bureaucratic

existing "man¬
aged currency" and "easy-money
policy" are most ill-advised. These
currency schemes
are the tech¬
nique whereby the "social plan¬
ners" finance not only war, but
also their vote-buying and social- especially when local differences
security operations. Free enter¬ are recognized, and accordingly
prise requires a standard of value. the regulation is duly decentral¬
An additional factor that may ized. And I do not oppose the ex¬
complaisance the

out:, First,
administra¬

commissions were an evolu¬

tionary

lation

Thus only can we, with¬
out coercion, develop the full use
of all resources and labor.

•

"control"- arid

"competition" illustrate the diffi¬
culty, for they are vague in their
practical meaning, and are a
source of confusion and misunder¬
standing. For example, free busi¬
ness enterprise requires competi¬
tion,
and unless business men
compete they will be unable to
remain free. But both half-hearted
business leaders and collectivistic
radicals
attack
competition, the
one fearing loss and disturbance,
the
other
charging
waste
and

ment is different.

points siand
pre-New Deal

method

of the

and fair com¬

economic democracy

tive

page)

(Continued from first
in

Two

these

points as that additional experi¬
ence gained by actual administra¬
tion is needed before new legis-/

tive pay.

of the United States.

Democracy—Demobilization
organizations

Thursday, March 9, 1944

FINANCIAL CHRONICLE

Volume 159

.and the

nation

afford

can

un-

trouble in its transi¬
peace, if it can thereby free

.dergo.

some

tion to
;

THE COMMERCIAL & FINANCIAL CHRONICLE

Number 4262

itself-from the incubus of pumppriming and political control over
business

exercised under the

now

A#';?* i

{slogan "social planning."
In this way alone can
sured expert

there be as¬

and nonpartisan per-

Clearly, there may be some
in which the Government

out.
cases

have to buy or finance the

may

production of the scarce necessity
to the wholesale level, in order

price may be high enough
producers but not too high lor

that its
for

consumers.'
•

Government
l sonnel
in those administrative may well take over the whole¬
commissions which should play so
saling of the goods for the period
.large a part in the post-war tran¬ of emergency, or it may substitute
sitions, including SEC and NLRB. the producer or wholesaler (which¬
(These would then not be popu¬ ever course requires the least dis¬
;Tn such

the

cases

larly
■>

called

the

letters

and

turbance

cost).

case,

numbers of regimentation but be
as "Securities Commission"

however,;.;, should the "subsidy"
policy as hitherto practiced be
i and "Labor Board.") ;
extended.
That policy has failed
Politically and as a matter of to recognize that
marginal or
social theory, the mere; approach high-cost 7production
exists or
; to:■ the question of post-war con- should exist, among all producers
trols looked very different to —that "marginal" production is
-

known

In my

judgment, the solution must
in letting prices
rise
rapidly than money wages,
thus reducing real wages and the
found

labor

cost

It is

those who

from

■

to decide in 1918,

were

what

like to

it looks

those

"marginal

few

Even the company
who would decide; now.
Person¬ having the lowest average cost per
ally, I don't think that a good, job unit of product can and should
was done after World War }; but
have a marginal cost as high as
I

the

that

sure

remedy does

;not lie in revolution or going to
■;

limited

not

opposite extremes. The only ones

producers."

that

com-

If the low-cost mine does
its resources so intensively

psftiy.
not

efficient

least

the

use

products,
to say

no answer

that wages
will rise, as fast as prices. When
the war is over the present man¬
power shortage will end, and for
a

time there will be such

of surplus labor that the

threat

suggested

readjustment will be the natural
course.

:A;;;

business

leaders

well

labor

leaders and politicians saying that
"the people will never stand for
mass

unemployment again," and
jumping to the conclusion

then
that

the

The Functional Approach To Peace
Educator Warns Against Setting

Noted

That

Treaties

Affairs By

business

must

man

prop

lishment Of A

Complete World State

Dr. Henry M. Wriston, President of Brown University, speaking
at the monthly meeting of the Chamber of Commerce of the State
of New York on March 2, warned that any attempt to turn the post¬
peace program over to a large number of international functional
agencies would develop "the same disorderly procedures" that have
resulted from the spread of bureaucracy in the United States.
war

The

un¬

tional

truth

and

led

the

strange,

paths

with

Rationing May Be Required;
Price Fixing Should Cease

One

of the

definite

first

steps

is to separate all thought

to take

"rationing"

from

about

ideas

price fixing, and to establish ra¬

tioning

its true basis of needs,

thus relating it to aid or relief.

Rationing
matter of
.' a

not

war

is the

whether
namely, that

same,

peace,

wherever

and

com-

modity is (1) truly a necessity of

life, and (2) scarce, it should be
fairly distributed among all the

people by direct means. If every¬
body in a democracy requires a
given quantity of some very scarce
goods, whether it be milk or
gasoline, then the total quantity
available
■

divided

should

each be

pro rata among all, and

whether

cumstances

exist

will

not such

butter,

canned

fruits, tires, radios and the
like.); vAnd if any fair and equita¬
ble rationing1 now goes on and
applies: to such cases, it should be
extended.

Otherwise,

good sys¬

tem should be set up.

But note that in all such cases
should

there

price

fixing.

would be
adopted because no competition
and freedom of choice—no buying
The

policy

rationing

and selling

in markets—are pos¬
sible. ' By the same token, when
those things are possible, the iron
hand of rationing should be re¬
moved
ess

and the distribution

proc¬

free

mar¬

turned

forces

ket

guided and expressed

by prices.
It
one

over

•

clear

that, since
basis for rationing is scarcity,
should

everything possible should be done
increase the available supply

not

subsidy,

the

of the term, but
raise in the price of a

sense

should

current

is a general
commodity.

subsidy be

high price to a "high-cost
producer" to induce him to in¬
crease his output, we should also
pay a high price to the "low-cost
producer" to encourage him to in¬
crease
his output.
Usually, the
largest potential addition to sup¬
ply is in the hands of the more
pay

efficient

which

concerns

al¬

are

ready operating" profitably. .As¬
suming competition, just raise the
price and they will expand their

outputs

("intensive")

their

but it should

from

competitively

come

and all who choose to
produce efficiently and economi¬
cally.
Similarly, there is confusion in
the talk about price "ceilings" and
price "floors"—as might be ex¬
pected when
such, picturesque
terms are used. (After all, prices
aren't rooms. Anyhow, how, high
is a "ceiling" and wjhich ."floor',
is meant?) Cases of surplus prod¬
ucts
are
pointed out, and the
holders demand price "floors" as
a
protection.
But, at the same
time, the same people, as buyers
of

any

materials "and

raw

demanding

that

labor,

may

fixing
used
to
"prevent inflation," to
"stabilize wages," or what not, be
extended > into
post-war
times.
They want high "floors" under the
price

Under

conditions

fair

and

discouraging unnecessary con¬
Thus ; the
wholesale

stimulate the
especially from
those superior producers who have
great resources and low costs.
It
should be high enough to prevent
to

purchases for wasteful

(unneces¬

sary) consumption.
At

this

point

in the program,

the fallacies that have crept into
the discussion of

tion and

subsidies, infla¬

price fixing begin to crop

the

business

profits.
Indeed, this is the only way for
a democracy to rid itself of
pres¬
sure-group politics.
At the mo¬
ment
war

main

our

wages,

problem

the effective inflation is
because they
of

the

are

strongest

^'Students

lies

both because most of

here, and

backed
pressure

economic

one

groups.

theory

will

rec¬

ognize the idea of the "differential return"
measured
tensive

from

margins.

necessary
and
cease

result

unless
to

common

Such

received

exist.

extensive

returns

superior

and

in¬

are

the

productivity,
producers,
will

not

uncon¬

tions."

Such

organizations,
he added, may

instruments

the

unrealized

and

ments

leader

"The

as¬

for

tices

involves

whole

control

economic

the

over

life—demand

and

supply—what shall
duced, when and where!

obvious that the

assumes

responsibility

man

"full

for

pro¬

Is it not

who

employ¬

desired, in convenient locations?

world?

the

such

controls,
rationing, price fixing and
war-economy

labor "stabilization"
there
a

can

complete

and

wages

are

continued

stopping short of

collectivism.
profits

and

must

are

quar¬

operating under
the immediate supervision of its
chief and under party discipline.
ling

They

likely

inter¬

some

vide

product, one company or
industry, and you disturb all
products, companies or industries.
When some prices rise, the prod¬
ucts being scarce, the cry of "in¬
flation" is raised arid "ceilings"
are
imposed.
But when other
products
accumulate and
their
prices go down, there is a demand
for help, and price "floors" are
set up. The end is complete price
fixing1 and a managed economy.
How could it be otherwise?

not

see

around

the gather¬

ing conflict of interests—the "blue¬
prints," the "plans," the demands
of

sections, industries, employers
employees?
Each
interest

and

wants

sort of control.

different

Obviously, there

be no answer
in centralization and Government

control, for that
ernment!

can

means

one

gov¬

The only answer lies

in
opportunity—^freedom,

for

such

war

has

friendliest

con¬

depending

"upon

which

and

are

perma¬

worth¬

interests

are

needless

are

in harmony.

"Finally, there will be need in
of the peace for
functional

proper

peace

the

They

everywhere.

effective

the

will

interests

only if their relationship to
life

domestic

the

several

nations is explicit and

sharply de¬
fined, only if they are controlled
by the over-all world organiza¬
tion, and their functions and pow¬

(3) Definitely provide "terminal
facilities"

are

peoples

(or pre¬

controls as are inconsistent
the
foregoing points, but
which cannot be dropped at once
without disturbance. Boards might
war)

ers

are

limited."

with

solely to determine
certain
agencies
should
to function, perhaps by ob¬

Stock Exchange

provided

when
cease

Elects Scott President
-At the annual election meeting

jectively ascertaining when those
involved

affected

want

the

"(4) Since the termination of war
not immediately bring ad¬
to

the

Philadelphia

Edgar Scott of
Montgomery, Scott & Co. was re¬
elected president.
The meeting

will

justments

members

Stock

"control" stopped.

also

peace,
transitional
must
be
provided.

Exchange,

elected

eight

governors:

William K. Barclay,

Jr., of Stein
Bros. & Boyce; Harry C. DackerThese should include funds for aid
man,
of Dackerman & Waber;
and
for
rehabilitation,
to
say
John A Murphy, Reynolds & Co.;
nothing of the much-discussed ar¬
George E. Snyder, Jr., Geo E.
rangements for contract termina¬
Snyder & Co.; Albert J. Williams,
tion and plant reconversion.
Boenning & Co.; Hhrold P. Wood¬
(5) Rationing may be carried on cock, Woodcock, McLear & Co.;
where necessary, but should be
Spencer D. Wright, Jr., Wright,
divorced from price fixing; and, Wood &
Co., and John S. Wynn,
except in cases of monopoly, prices J. W. Sparks & Co.
mechanisms

full
employment and full should be free to express the
production, with the incentive of values of goods and the value of
rewards according to the value of
money.
There should be no sub¬
each one's production. This is the
sidies,
no
"ceilings"
and
no
unity among many.
"floors."
seek

they

must

one

policy

agencies, but they
instruments ; of
American democracy and of free

"full employmeht" uhder the

guise of a "right to work," with
wages not related directly to the
One price can't be fixed without value of the products of labor.
affecting a dozen others, and in¬
(2) Select and put into office
volving a widening circlb of con¬ persons who will understand and
trols over production.
"Margins" favor the ideals and institutions of
are interrelated: subsidize or con¬
free enterprise.
one

same

the organization

with production and consumption.

trol

United

the

other great powers

fundamental

conflict

some

correlated

less

the

alliances

nent

be¬

Prices,

all

Neighbor

itself in

tact with

instrumentalities; not
of
peace, but of strife—not means for
the orderly liquidation of the war,
the perpetuation

the

enjoying the rewards and ad¬
Third, it should main¬

without

come

but for

Good

tain

will such spraw¬

are

moderate,
policies which

vantages.

in the international

make trouble

upon

firm

uncoordinated; agencies

and

tion

there¬
the formula¬
explicit, and

dependence,

a world organization, begin¬
ning upon a modest basis and
gaining experience in solving the
problems and difficulties as well

rels between the members of one

How much

first

ing

administration,

ment" will next have to guarantee
"fair wages" aVid the kind of jobs

"Our

fore, must be

should take the lead in establish¬

produce friction abroad,"
said. ;
"Such prac¬
produced bitter

for the establishment of

come

States

Wriston
have

appropriations, he added.

been followed. Second, the United
should
not
only join, it

proliferation of such agen¬

will

Dr.

the

cies has created friction at home,
it

powers,

find

fidelity and courtesy with which

responsi¬

responsibility for full em¬
ployment is presumptuous folly.
Nobody but a dictator can do that;

sume

the
themselves

war

States will pursue with

commit¬

secret

complete world state, he said:

opera¬

become

set

Declaring that the moment has

and

bilities.

is, his productivity.

For

buy.

in the form of wages and

enough

that

to his work,"

under fair rules of competition, to

termine the distribution of income

maximum output,

each according

"to

means

freedom of

couraging production, and (2) by

high

'democracy. This

without

respon¬

trolled

Henry M, Wriston

receive

If the President set them

up
under his
agencies might

with

the

manage

would

organizations

treaties.

unde¬

sibilities

essence

things they sell, and low ceilings
over the materials and labor
they

quantity for all needy cases. This reasonably free competition, prices
can
be done most effectively in should govern production and con¬
only two general ways: (1) by en¬ sumption. They should also de¬

price of the rationed goods will
ordinarily be high.
It should be

American

the

tional

un¬

uncoor¬

fined

The surest way

support in the United States
Senate, nor would other func¬

with

the

represents

paid

merely to "marginal producers" as
distinguished from others.
If we

sumption.

time.

cartel

the world

dinated duties,

readjustment with
Nothing in the nature of a sub¬ least loss is to resort to the
sys¬
sidy should be given, or "ex¬ tem of incentive.
pay which has
tended," which is not an addition saved the Russian
economy, and
to the flat price. Such an addition
which

margins.
given his due share. That is the
This takes care of much of the
idea underlying
rationing.
The
current
foggy discussion about
detail with which the distribution
"new-comers" and the "preserva¬
may be carried out, and the basis
tion of pre-war competition con¬
of judging individual need, are
ditions" in various industries. The
not matters of principle.
simple, clear-cut way is to invite
Accordingly, all that need be
new production into each industry
said in principle is that if, after
in which increased scarcity exists.
peace comes, there are shortages
This new production may come
of necessities, rationing should be
from old-comers or new-comers,
used.
(It all depends upon cir¬
conditions

make

Never
a

choice, and therefore not
The gen¬

whenever

reality

matter of economics;

eral principle
'

duced for

return for itself.*

no treaty
international gov¬

any

titles,

gainly

Standards of liv¬

sense.

those who, in

Some

ernment

with

common

trade of

agen¬

cies

and there will be
people are told the

the

setting

interna¬

who learn the lessons of the past
are

Dr. Wriston said that

employment,"

disagreeable character¬

istics."

number

vast

need of "mass

of its most

alarm,
said, "the

spawning of

that it produces all that it can ing must be earned; and if goods
are
not available to allow each
the light of its without producing any unit at a
dollar of wages to buy as much
past, go forward in the line of loss, it fails to do all that it can
as formerly, prices must
rise, and
,the nation's evolution, from its for
society.
Incidentally, it fails
living standards be somewhat re¬
own past to its own: future.
to make the highest possible net
.

view

with

for

arguments

public^

should

as¬

But there is

none

And Other

post-war control by government.
no

Trade

Senate—States The Time Has Not Come For The Estab¬

responsibility for giving full
employment to all classes. This is
main

Manage^ World

Such Agencies Would Be Opposed By The

sume

Up A Large

Number Of International Functional Agencies—Predicts

The danger here lies in the po¬
litical pressures. Already we hear

1007

Attractive RR. Situations
Atlanta & Charlotte Air

stock

Line $9

and Nashville Chattanooga

& St. Louis first 4s of

1978 offer

The system of administra¬
attractive possibilities according
regulations by commissions
to memoranda on these situations
of experts, subject to judicial in¬
main
in the current issue of "Railroad
terpretation,-'should be carried on
reference to
Securities Quotations" issued by
and improved.
the Government are:
B. W. Pizzini & Co., 55 Broadway,
The CHRONICLE invites com¬ New York City.
Copies of the
(1) Take a definite stand in
favor of that essential part of de¬ ments on the views
expressed by "Quotations," which also lists
mocracy which is known as free Dr. Haney, in this article, or on quotations on guaranteed stocks,
mortgage
railroad
enterprise. This involves a defi¬ any related phases of the sub¬ underlying
nite acceptance of fair competi¬ ject under discussion.
reorganization
railroad
Comments bonds,
tion, standard money, and the should be addressed to Editor, bonds, minority stocks, and guar¬
principle of incentive pay to all "Commercial and Financial Chron¬ anteed telegraph stocks, may be
factors in production.
It is op¬ icle," 25 Spruce Street,. New York had from B. W. Pizzini & Co.
:

(6)

Summary

tive

Very

the
my program with
post-war control by

briefly
planks in

posed to

any

sum

up,

undertaking to

pro-

8, N. Y.

7 'V

■

upon

request.

THE

1008

Spending

vote against any taxes.

Era

In The Post-War

all

sense

different
;

986)

(Continued from page

cannot .fully sup-

entirely out of taxes, without vast | cannot work or
dissatisfaction from those who are port themselves
But third and most important,
'doing essential work at home, the
we must restore and preserve in
crippling of industry for its post¬
this country the liberty and op¬
war job,
and the present stifling
of

essential production,'

tion of degree..
Far

■

could be saved by an

administration of the

economical

War is inevitably a

war.

I rathea

but it is a ques¬

favor more taxes,

wasteful

It is impossible for Con¬
gress to quibble about the number
of ships or the number of tanks
we must throw against the Ger¬
process.

I have

the Japanese,

and

mans

critical of the admin¬

•been often

and particularly of its

istration,

policy, at home, but all of us must
recognize the tremendous work of
organization done by, our Army
and our Navy.
Nothing like it
has ever been seen. No army has
ever
been so well equipped.
No

existed on the

such navy has ever

earfh. The output of
is far be¬
dreams of five
years ago. If we can shorten the
war by a month, or save the lives
of the

face

shipping and airplanes

yond the wildest

few American boys, we
cannot hesitate at the spending of

the provision of train¬

tion

Because

devote

our

whole

today to winning the war
hopeless to prevent a

energy

and

administra¬

by increasing taxes.

are

huge debt, there is no reason why
we should not face now tRe post¬

Inevitably

war.

many

each

The

other.

the

and

press

people seem to be accepting some
about what we should do

ideas

without adequate

ysis,
our

The
war

thought or anal¬
which would destroy
liberty and our national life.
very purpose of this whole
ideas

insure the retention of

is to

liberty here at home, and the op¬

portunity
home the

to work out here at
destiny of the American

republic.

not permit

We should

ourselves

the

distracted

absorbed in creating
abroad, that we let the
planners concoct for us post-war
arrangements at home likely to
destroy
the
very
freedom for
which we fight. We have had to

war,
freedom

tear

structure' to

industrial

our

activities

the

definitely

regulations

war

possible. Undoubtedly
they must be continued beyond

quickly

of the armistice,
the administration should be
date

actual

the

determination

eliminate these controls as to

each

get

Merely

safety.

assure

as a guess,

and

the

burdening the processes of pro¬
duction. In any event, the increase
would be somewhere in the neigh¬

to come does not seem un¬
reasonable. Furthermore, the ser¬
vices for veterans, judging by the
and the

war

increased

borhood of 17 billion dollars.
The idea has been

num¬

ber of

sonably adequate supplies of that
commodity are available. My ex¬

least

two

That

means

perience with the present bureaus
in Washington leads me to believe
that most of these bureaus will

budget of 17 or 18 billion dollars,
without any of the vast spending
which is now being proposed.

hang

administration

that

wants

Prior

raised
lars

necessary

the

dollars

extensive plan for every

Federal

public work they can
in

raises

sized

the

has

tremendous

empha¬

productive
I
determined

capacity of the United States.:
believe

for

ap¬

come

Even

if the

peace
employment.
The manufacturer must make his

for

Govern¬

termination.

contract

ment-owned plants must
be

promptly

disposed of to private owners,
without 1

but

the promotion of
We should go further,

monopoly.

eliminate

and

most

the

pre¬

regulation,
questionnaires,
inspections, which doubled your
accounting forces and kept the
average
individual
storekeeper

war

doing

everything

business.

but
"

his

own
'

hope to do by Government spend¬

ing.

Government

spending

hard¬
ship shall not continue to exist.

course

ceeds

contribute

reasonabe share of the pro¬

savings
be

willing

their

labor

order

that

and

their

assistance

given to the unfortunate who

every

national in¬

is maintained at 120 billion

have

exemptions
in¬
On any normal level of

There

doubt legislation

is being

Committee by

of which one billion
by the Fed¬
goverment. This is four times

every

prosperity, the kind of tax system
are
thinking of would
hardly raise more than ten billion
year.

that

those

year,

dollars is to be put up
eral
the
any

largest sum ever
year

provided In

by the Federal govern¬

ment outside of

WPA work-relief

expenditures, and, after all, we
made fairly good headway in road
building during the twenties and
the thirties. - Why should the Fed¬

doubt in my mind

expenses

easy

the

sound

speed up

harder

economic

work

remedies

the machine of produc¬

tion and distribution. But
not

out

we can¬

rely oh government spending

vival

there is to be a great out¬

after

the

theory,

war

sound.

limited, not by necessity, but
by practical considerations, the
competition of neighboring states,
the opposition of the people, the
undue burdening
of their eco¬
nomic

activity.

Federal

the

But

the

devise

one can

It is said

considerations.

same

that

State tax

system

increase

mendous

the

Federal^

that which will be
forced upon us by circumstances,
should describe the tax system "
budget

over

which will produce

the necessary

tension

Federal aid

educa¬

tion, including primary and sec¬
ondary schools. A bill to provide
300 million dollars

feated

year was

vote

de¬

the

present Congress, but the Board's
report advocates the increase of
this
subsidy to something like
three' billion

dollars

year,

than half the cost of an in-

educational

creased

program.

the danger of sub¬
jecting our education to control
by a Washington bureau, we may
well ask where all this money is
from

Apart

coming
State

from
local

and

to supplement a
system which is

already the best and most expen¬
sive in the world.

Finally, • there is a school of
thought which considers that the
increase of our export market is
the only possible

ity.

These

road to prosper¬
enthusiasts recognize

that most of
offer markets
have

the countries which
for our goods will

nothing with which to pay
They recognize that the

for them.

impoverished peoples of Europe
going to undersell us on many
manufactured products because of
the
low
standard of living in
Europe resulting from the war.
Therefore they, are making plans
to finance these! exports by, Gov¬
ernment loans. American exports

are

last year were over 12 billion dolT
stimulate any re¬ lars, and imports only,,'3.%' billion •'
peacetime activity just dollars. The. idea of the planners

is necessary to

passively accepted
throughout the country, that after
eral

un¬

these propo¬
Local financing

past ten years we have thought it

Post-War Planning

people
a

experts on the highway problem. money. :
The National- Resources Plan¬
They propose an expenditure of
three billion dollars for highways ning Board advocates a wide ex¬

and

creased.

sitions

government

Neither

came

prepared.
'
■'
A report has been made to the

income, that the excess profits tax
should be repealed, that the indi¬
vidual income tax rates should be
lowered

Federal

local public

plans are being made, and I

Yet

budget

the

limited.

the Senate in impossible to levy the taxes neces¬
1939. I see no sentiment in Con¬ sary to pay the existing expendi¬
tures of the Federal government. *
gress for returning to a policy of
Federal grants for local works. Certainly those who urge a tre¬

have suggested.
Yet
everyone
is
apparently
agreed
plans now and go promptly to today that taxes must be substan¬
work.
Mr. Baruch has done an
tially reduced, that corporations
excellent job on this question of
should not pay over 25% of net

They

are

that

abroad

The PWA was abandoned

brief period, no local

very

before

war inventory and machin¬
after the war, which seems un¬
off the hands of the manufac¬ likely, it is not certain that the
turer and settle promptly in cash,
present tax system would raise
in
order - to
provide
working much more than called for by the

capital

works.

take

remedy to suggest, and easy
and
pleasant for a politicallyminded central government.
Of

some

idea

■

to do the things which
ought to be done, but neither has
anyone devised a Federal tax sys¬
tem to produce the money to do
these things. In fact, during the

Where
Except

community ever did receive money

proximately 42 billion on an an¬
billion.

think of,

Federal money.

for local buildings or

ery

people are
that extreme poverty and
our

for which plans
specifications should be made

kind of government is limited by exactly

they may be ready

did the idea come from?

nual national income of about 150

Government in
contracts must

the
war

order that

to receive

never

Our present

burdensome tax system

county and
make an

should

district

school

year.

than six billion dol¬

in taxes.

year

war

spread abroad

that every city, state,

wounded, is likely to be at
billion

effect in

and have much the same

years

last

largely in the nature of taxes,

are

of five billion dollars for
Army and Navy for many

pense

....

war

done

now.

their

an ex¬

The

repair and replacement
both by Federal and

lot of

local governments

eral
government do more than
will be at assist; in A the
construction
of
least 18 billion, and that the tax through roads of general interest
In
seeking full employment,
system 'which is necessary will to the entire country? Road build¬
we can
only hope to succeed by
prove burdensome and lie heavily ing is undoubtedly one of the best
stimulating the machinery of pri¬
us how we and our children and
upon all initiative. It is the price
methods of putting people to work
vate enterprise. We cannot solve
we pay for this war.
grandchildren shall live for the
In my opin¬ quickly, but most of it should cer¬
the
problem
by
government
next hundred years. Many doubt
ion our American system could
tainly be financed by the local
spending and relief even if we
whether it is possible to fight an
not survive another all-out mod¬ governments through the gasoline
wished to. Public works may be
all-out modern war and preserve"
ern war, and is seriously threat¬
taxes and license fees which they
important as marginal assistance
the institutions
of freedom for
ened by this one.
Yet I believe collect. The people of these com¬
in hard times, but we have to put
which the war is supposed to be
that with our productive capacity munities want roads and are not
55 million men to work, and only
fought. Certainly it can only be
we can perhaps pay 25%
of our stingy in providing the money for
a small
fraction can possibly be
done by the soundest kind of fore¬
national income in Federal, State them.
employed on public work. To give
sight and government policy.
and local taxes, say 30 billion out
Of course there should be a
a man a real job on public works
of the 120 billion, and maintain an reasonable Federal public works
What are the underlying pur¬
costs
approximately $2,000 per
adequate incentive and reward program in those fields in which
poses of any post-war' policy? The man.
That means that it would
for individual thrift, investment, the Federal government has as¬
first universally discussed today
cost ten billion a year to give em¬
initiative and work. But the-prob¬ sumed responsibility, and plans
is the securing of substantially full
ployment to five million men,
The for it should be made now. There
employment. That full employ¬ five million out of fifty-five mil¬ lem must be faced frankly.
tax burden must be widely dis¬
ment must be secured
through lion. The WPA at its
always has been such a program,
height only
privateenterprise,
and
not employed three million, at a cost tributed. It must not fall exclu¬ and as the country grows that
sively on the thrifty, the risk- program should grow. But it ought
through government spending.
per employee of less than half the
•Second, ho matter how prosper¬ figure mentioned. An increase of takers, and men and women of only include public works that are
exceptional energy and ability...
really worth the money spent on
ous
we* may be, there will still
10% in the activity and prosperity
But
we
face
a
still
greater them. I see no reason to believe
be some percentage of the popula¬ of private business will do more
that a vast public works program
tion unable to live at a decent than the Government can ever threat. There seems to be a gen¬

pieces in order to achieve victory
over our enemies, and the man¬
ner
in which it 'is put together
after the war will determine; for

standard.

tremendous

the

all

with

ahead

the

and

commodity just as rapidly as rea¬

making

are

Federal bud¬
would look like if we went

Imagine what the

government

mendous air force to

the

minate

plans, and let go.
many of those plans are wholly
Obviously
impossible and inconsistent with
terminating
people

*!'•".

it to ourselves.

between

project, because spending in itself
becomes a virtue.' It expands in¬

long as possible to
war
problems which are created
every
control,
and
find
one
by this vast expenditure and the
emergency after another to justify
extraordinary
developments
of their continuation, We must have
modern

indefi¬ ating full tilt. Undoubtedly there

nitely, and should; that a national
debt is no debt because we owe

It destroys

hardly get started be¬

private manufacture is oper¬

fore

•

is
but
of
borrowings by inspired by

ing and equipment. But there
certainly as much possibility

cutting down our
eliminating wasteful

values

types

ing; that debt can increase

work could

projects that are proposed today city should tear itself down and
rebuild itself on modern lines, and
control of the Federal Govern¬ on top of the essential expendi¬
Take the the Federal government is ex¬
ment.
It destroys ultimately the tures I have outlined!
pected to finance a large number
character of the people, because problem of social security alone.
portunity for which our ancestors they learn to lean on Uncle Sam The ideal of the "planners is rep¬ of real estate projects the finan¬
fought, on which our progress has in every crisis, instead of exercis¬ resented in the Beveridge plan cial soundness of which may well
be doubted.
Undoubtedly every
been based.
An economic pros¬
ing their own ability and their proposed for England. , Estimating
city should make its plans. Every
our population at three times that
perity is not the first necessity, own ingenuity.
city should eliminate its blighted
although it has filled our thinking
Furthermore, after the war the of Great Britain, and the standard
areas
and its slum areas.
More
for many years past. We can only Government will face a
dangerous of assistance;; at approximately
active intervention by State and
have
a
happy and progressive financial
problem. We will come twice the British standard, the
local governments is required" in
people if they enjoy the indepen¬ out of the war with a debt in the total annual cost of that plan in
the real estate field, but the extent
dence and the liberty which are
neighborhood of 300 billion dol¬ this country would be 21 billion
essential to the making of charac¬ lars. That means an annual interest dollars. Today we are collecting to which the Federal government
can afford to finance these purely
ter. There is no freedom if States
charge of six billion dollars. The approximately 2 billion 400 million
local projects is certainty open to
and cities and schools are told
peacetime
departments
of #the dollars in unemployment and old
question.- /
1
what they must do by a paternal Government
today are spending age taxes, and the Federal Gov¬
The
and bureaucratic government in about four billion
publiq works
programs
dollars, and all ernment spends about 400 million
more
for various services in aid which are proposed are of un¬
Washington, There is no freedom of
(them have been held down and
if farmers are told what they must are
to the states.
The states spend limited scope, but apparently if
planning to increase their ac¬
we include urban redevelopment,
farm and businessmen
are told
tivities, so that five billion is a perhaps 700 million more, or a
they come close to five billion
how they must run their business.
fair estimate. I have no means of total of 3% billion. Of course part
There is no freedom if workmen
of the expenditures
will be fi¬ dollars a year.
estimating the exact cost of the
After all, what is the theory of
are told
where they must work,
nanced by the employers and em¬
Army and Navy, but I feel con¬
and
housewives
are
told what fident that the American people ployees, but half of the increase transferring all these expenses to
the Federal government?:- It is
would have to come out of the
they must eat.
are not going to sink amy of their
Federal treasury. Even the em4 said that the taxing powers of
How do we bring about free¬ ships, and equally confident that
the State and local governments
dom, full employment, and social they are going to maintain a tre¬ ployers' and employees' contribu¬
are
necessarily limited, whereas
tions, since they are compulsory,
welfare? The first step is to ter¬

of only a

money

there is no limit to

destructive

itself into prosperity; that
Federal spend¬

spend

It is utterly
political morality,
for the politician can justify a
vote for any expenditure and a

without fatal results.

Sound Finance Or

Thursday, March 9, 1944

COMMERCIAL & FINANCIAL CHRONICLE

war.

accumulated

There

deficit

is
of

large seems to
civilian financing

that

will go

such excess of ex¬
ports in order to create prosperity
some

pouring of Federal money.
The
National
Resources Planning goods. Demobilization will be ef¬
Delay will be for ourselves. It seems obvious to
Board has listed Federal activity fected gradually.
more
by a shortage of me that if we can only export by
after activity, and proposed that caused
and equip¬ lending the buyers the money with
all shall be financed by Federal necessary; materials
which to pay for the exports, we,-taxation
and
borrowing.
The ment than by lack of demand, and
are
in
effect giving away the*
Board was possessed by the dan¬ that will delay public works as
well as private. A major public goods that we produce. Loans on
gerous fallacy that, a people could

THE COMMERCIAL & FINANCIAL CHRONICLE

Volume 159 '"Number:4262

■

any

un¬

becomes

When

duce

dent, as-it did in the twenties, all
loaning will stop, sand the arti¬
ficial manufacture which

have

built upon it will come tumbling
about our heads.
•
r ■;;
I believe that

.give,

should lend, or

moderate amount of dol¬
lars to help the devastated coun¬
tries get the machinery they need
a

to go to work.. I

would

in the

icits

evi¬

such "scale -are -utterly

•

sound.

even con¬

thirties did not pro¬

that

dollars a year
should have

billion

three

was

not enough; we

had

deficits of

tion

that

seems

their answer is relating

prosperity,

15 billion a

year,

It is undoubtedly true that war

spending has created full employ¬
ment and we can still pay the in¬
terest on the debt.
But we have
seen
a
substantial
increase
in
wages and in cost of living
of
strenuous
efforts V to

that

is that
the rules

necessary

labor

and

advisable to keep compe¬
tition fair and open. In short, we
are

and

man

his

profits.

So long as

competition is fair, every reason¬
reward should be given to

able

those

who

in spite

selves and

control

ities

strike

out

for

them¬

their natural abil¬

use

increase

production

and

ment

aid to help backward

levels

these

the sidy. Once
an

by law and by

peace comes,

that

Structure

change our whole attitude
suspicion towards the business

export trade by loans, or by any

some

countries help themselves in
future.
But we can't support

The Nation's Post-War

must
of

sub¬ thereby give more work to more
I believe people.
I am convinced that at a rea¬
any such control would be
utterly impossible, and if govern¬ sonable cost we can prevent ex¬

tinue

1009

(Continued from first page)
will

sufficient, not merely to

finance
to

the

conversion

from

financial

international

create

continue

course

borrowing

commercial
assets

banks.

from

the
liquid

-The

treme

•

be for reconstruction and perma¬

out of whole cloth.

nent

tem has been

development. Since the con¬
trolling body will have more than
a
majority of representatives of

Once

our sys¬

destroyed, it cannot

be put together by all the king's
horses and all the king's men, any

its

system of work relief and direct

relief

under

the

control

the

States, to which.the Federal Gov¬
ernment

contribute

can

small

and

economic

social

conse¬

quences; or it can be a construc¬
tive force contributing to a high

level of business activity, a satis¬

factory price and wage level, and
Humpty-Dumpty. sums in good times and
large the creation of a national income
system
may
have
failed sums in times of depression.
money,
it does not seem likely The
that will be necessary to maintain
that our 3% billion dollars will through the attacks of its enemies,
But we must recognize that the
the expenditures of the Govern¬
last much more than six months. but the people will insist on try¬ cost of
supporting men who do ment.
Foreign trade difficulties, like ing some other plan and that plan not work or do not fully support
If at the end of hostilities, for
economic problems at home, can can only be one in which every themselves must be
paid out of
countries

that

wish

borrow

only be solved by hard work and
sound principles.
The only kind
of foreign
trade that is worth
while

one

based

fair

ex¬

more than could

detail

directed

by the govern¬

ment.
a

By this path also we reach
socialized state, and one which

starts from
What

bankruptcy.

can

the

earnings of those who are
working at or about the same
time.

The

must not be

avoid this

cost

great

that
as

support
to prevent

change of our exports for goods
we really need and can't produce
economically.,!; The idea that ex¬
port markets can be created by
the panacea of government spend¬
ing or government lending, or
magic support of exchange, is a
mirage that can only lead to dis¬

industry and em¬
kind of result? The first thing, as
ployment and discourage those
I see it, is to get down to earth.
who are asked to pay the cost.
We are dreaming of a vast new
Furthermore, this whole field of
world of radar, refrigerators, heli-c
social welfare legislation should
copters and television. Because
be primarily under State and lo¬
everyone works in wartime, when

aster.-

forces,

A table of the

proposed

mat

expen¬

ditures that I have discussed will
read

Regular
Army,

Navy

Veterans*

Public
Aid

public debt_

Federal
and

$6,000,000,000

Depts._
Air

Care

5,000,000,000

Force
i

Works

5,000,000,000
2,000,000,000

5,000,000,000

to Education,3,000,000,000

Additional Socinl Security-..

Foreign Trade Loans

17,000,000,000

5,000,000,000
$48,000,000,000

State and Local

10,000,000,000

$58,000,000,000.

Thus

the

Federal

budget of the

planners plus State and local taxes
to

nearly 60 billion, or half
highest estimate of national
income that any responsible per¬
son will predict.
run

the

ment

the

armed

have been sold the idea
be

can

easily solved. >As

of fact,

will

same

Its

are

past problems of unemploy^

war

jz. ..;-v-a#

Interest

million

matter

follows:

eleven

America before the

America after the
fundamentally the
war.

and its difficulties
are
the same problems and the
same difficulties,
and we cannot
begin to solve them until we exor¬
cise from our thinking the idea
that the nation can spend itself
into
prosperity now any more
than it could during the thirties.
problems

Then

have to settle down to

real business.

We have to

postpone Utopia. We have to work
Federal tax system to

raise

fifteen to twenty billion dollars a

year,

avoids

the

such

same

time

choking of

cal

that it

all incen¬

government

control,

with

Federal financial assistance. These

problems

are

j primarily

Ideal

problems.

They can be solved
intelligent local admin¬
istration. Some States may fail to
do a good job, but in the long run

best

that

would

the

people who suffer;

fault

the

The Federal

Government doesn't do

job
on

a perfect
either, and its mistakes are
a much greater scale.
Only a

State system can avoid the polit¬
ical and bureaucratic dangers that
creep into every effort to run our
affairs from Washington. *

Finally,

elimi¬

nate all unnecessary expense and
out

the increase of

should

all of this ": program
definitely worked out

by Federal statute, not by bureau¬
cratic regulations. Congress is to
blame

for

Executive

yielding
pressure

constant

'to give arbi¬

trary discretion to the

President

some

reason

unsound fiscal
or

sharp

commodities
ture

other—such

currency

increase
caused

abandonment

prices

by
of

prema¬

price

and
rationing control, etc.—the people
should lose confidence in the pur¬

chasing
could

power

lead

currency

of the currency, it
a
flight from the

into anything that may
as
having a stable

considered

value.

would be available. Then the gov¬
ernment

operate

would

called

finance. Permanent
government financing could only
lead
to
permanent government
operation.
The more businesses
or to

must

remove

tion of tax.
we

should

the present duplica-

I believe myself that
eliminate the capital

foreign policy, is to preserve
of the people of the
States.

Because of the

huge pur¬
in the hands of the
because
of
great

chasing power
people
and
liquidity of the entire economy,
one can readily visualize what an
inflationary explosion such a de¬
velopment could create. Inflation

convinced

not

try in

everv

possible way to re¬
The only regula¬

duce regulation.

tion

20,

in the

"Chronicle" of Jan.

1944.—Editor.

because

the

United

lend-lease,

tinue

ports

over

show

ex¬

will

exports.

con¬

excess

im¬

Lend-lease

be considered

cannot

foreign

States,

mone¬

tary obligation, since the commod¬
ities

delivered

dered

and

services

foreign nations

repayable in dollars.

ren¬

not

are

The utiliza¬

tion of the large amount of Amer¬
ican
short-term
liquid
assets
owned

by foreigners will depend
primarily on conditions prevail¬
ing in this country. If at the end
of hostilities there is serious agi¬
tation for

the dollar
should
will

further evaluation of
if commodity prices

rise

foreigners

sharply,

inclined

their

will

into

convert

gold their dollar balances

well

holdings of bonds. This
gold holdings of

reduce the

the

country

Treasury
the

may

commercial

the

time

when the

be forced to rely
banks

finance

redemption of war savings
held by the people.
That

bonds
such

situation would be embar¬

rassing to the Treasury
evident.
On

ity

'V.

is
*

quite

the other hand, if commod¬

prices

remain

approximately

what they are today, and if there
is no agitation for a further de¬
valuation of the dollar the
assets

owned

be used

over

acquire

all

liquid
foreigners will
period of years to

by
a

kinds

American

products, and this, too, will con¬
tribute to a high level of business
activity in the post-war period.
In

view

the

huge

liquidity

which will mark the American fi¬
nancial structure in the post-war

merely

would also have ari adverse effect
on

business

activity in the postperiod. On the other
hand, if at the end of the war the
conversion

deficit of the Government is dras¬

tically

curtailed,

there

■

effort to further devalue the dol¬
lar and the various

controls

into anything that might promise
to have a stable value.
On the

possible

everything

contrary,

should be done to induce the peo¬

ple to defer spending their savings
until

conversion

the

over

and

increased productive capacity

our
over

provide consumers with the
goods
for
which
they have been waiting.
can

prices

and

moved

ties

consumption

are

re¬

the supply of commodi¬

begins to increase and to meet

the demand, the huge liquid assets
in the hands of the people will

pends
sound

than
practice in

ever

before

administration

been ■ reduced.

clusive

period, it is of the utmost im¬
portance
that
no
measures
be
wipe out or
taken now or later which would
materially reduce the value of the
frighten the people and induce
liquid assets of the people, but
them to convert these liquid assets
would

gains tax, at least in the field of that that freedom depends not of government.
It will be de¬
new industry and the enlargement
only ■' on maintaining local self- stroyed by the panacea of govern¬
of old industry. There must be a
government, and the independence ment spending. The social welfare
are taken over by the government;
freer capital market, and ability of
Congress and the courts, but program itself depends on a high
the heavier the burden on the in¬
to finance at reasonable cost. That on sound
'finance^ on limited gov¬ percentage of employment, and on
dependent business that remains, means that the SEC
should con¬ ernment
expenditure, and a wise the taxes which can be produced
until gradually industry would be
fine itself to its original purpose tax
system to pay for those ex¬ by such prosperity. There is no
nationalized, and we would find of
preventing fraud and misrepre¬ penditures in full. Otherwise we simple road to Utopia. We have
ourselves a socialistic state.',.
sentation, rather than trying to face
anV economic
breakdown a new and tougher fiscal prob¬
Of
course1 the planners who direct the flow of capital. I even which will
finally end the liberty lem as a result of all-out war, and
favor the program I have sug¬ believe that the
government should of the individual.
it can only be met by the same
';-U
gested do not intend to levy taxes. undertake to insure against some
The whole
prosperity of the sound principles of taxation and
They intend to keep 011 adding part of the risk, involved in in¬
country, with full employment economy which have animated
large sums to the public debt. vestment in small business, and
through private enterprise, de- every President of the United
They point to the war deficit I am introducing a bill to carry
States in our history—except Mr.
spending as the cause of tre¬ out the plan I suggested in Jan¬
*Text of Senator Taft's address Roosevelt. This nation must face
mendous prosperity 111 the United
uary to the Boston City Club.*
before the Boston City Club ap¬ the hard facts of life just as every
States, although the standard of
If business is to grow, we must
peared on the/cover page of Sec¬ business man has to face those
living has in fact
When asked why government def¬

increase

trade

much-needed

Status Of Rail Securities
A
on

facts.

The only alternative is the

bankruptcy court.

" '

comprehensive memorandum
including the

railroad equities,

reorganization issues, has been
prepared by Thomson & McKinnon, 231 South La Salle Street,
Chicago, 111., members of the New
■York Stock Exchange and other*
exchanges. Copies of this inter¬
esting
memorandum,
entitled:
"The Changed Status of RailroadSecurities," may be had upon re¬
quest from Thomson & McKinnon.

Situations Look Good

the freedom
United

policy

expenditures are tive and all
or
his appointees.
It is easier to be used
industry and en¬
gradually and judiciously
undertaken, there can be no doubt
pass a statute expressing general and thus exercise a
courages men to put their money
powerful in¬
in my mind about the destruction
into new enterprises that will give principles than conferring general fluence on business
activity for
of freedom in America. If a tax
but the delegation: of years to come;
other men jobs. We cannot hope powers,
Hence, whether
system could be devised to raise to
succeed unless every incentive legislative power has almost de¬ the high liquidity of the financial
any such money, business and in¬
is given to men to exercise their stroyed |he independence of Con¬ structure of the United States is
dividuals would be so weighted
ingenuity and their ability and gress. It has made this a totali¬ a destructive or a constructive
down by taxes that there would
their strength in increasing pro¬ tarian government in many fields force will depend
primarily upor
no
longer be any incentive to duction and
making work for where Congress has enacted a the measures that -will be taken
work, certainly no incentive to other
general lawv The independence of to
men;
unless the normal
keep the inflationary forces in
initiate job-giving enterprises or
business casualties are .much more Congress and the courts was not check.
do anything except the minimum
created
in
the
Constitution by
than replaced by new projects.
The international financial situ¬
amount necessary for subsistence.
Consequently in our tax laws we chance. It was provided for the ation of the United States has also
Men aren't going to work half or
must
remove
the
very purpose of preserving dem¬
present
dis¬
undergone a considerable change
a third of their time for the gov¬
crimination against common stock¬ ocratic government.
as
a
result of the war and the
ernment. Industry would become
I
saia
at
holders, the people who really
tne
start
that
the events that
preceded it. On balance
so unprofitable that no new money
take the risk in any business, and whole purpose of domestic
policy,
any

debtor

although

account

peace economy,

maintain

•

deficits

short-term

but also still a creditor on long-term in¬
high level of busi¬ vestments.
During the war the
ness
activity in
the
post-con¬ short-term dollar assets in the
version period without much re¬ hands of foreigners will continue
war

the. hands
of
busi¬
hardship and poverty and ness as well as of
private enter¬
panaceas like the Keynes Plan or purchasing power out of thin air, improve the present social secur¬
prise will be immense indeed.
the White Plan or the Morgen- there will be no holding of the ity measures. The old
age pension Not
only will the volume of bank
thau International Bank. In their price level. A few years-of fif¬ system
and
the
unemployment deposits be three times as
large
billion - dollar
deficits
in compensation system can be ex¬
present form the primary purpose teen
as in 1929, but the amount of cur¬
of these plans seems to be to get peacetime > and we would face an tended to classes that do not how
rency aridGovernmentobligations
American
dollars
into
foreign inflation of prices such as we saw enjoy them.
Minimum
housing freely redeemable into cash in .the
hands without going to Congress in Germany after the last war. If standards can be
established, I hands of the people may amount
for direct loans which might not that happens, we get to the same believe, for all those whom the
to 75 billion dollars, if not more.
be granted.
We may regard the loss of freedom by another route. private building industry cannot
The highly liquid
position of
UNRRA appropriation of 1 billion The entire financial and industrial serve.
The gaps in hospital and
350 million as part of the war structure breaks down.
It has to health service can be filled with¬ industry and trade, as well as the
cost, but Mr. Morgenthau also be reconstituted, and that means out any such huge expense and large amounts of liquid assets in
the hands of the people in general,
proposes an international bank to the government will put it to¬ socialization
of
medicine as
is
can be either a force of destruc¬
which we are to contribute about gether.
No one can construct a contemplated in the Wagner-Mur¬
tion leading to inflation with all
3*/2 billion dollars, and this is to new system of private enterprise ray Bill. We should provide now
the

today the United States is

Straus

Securities

Company, 135
Chicago,
111., have prepared circulars on
Black Hills Power & Light com¬
South

Salle

Street,

Foote Bros. Gear & Machine
Clearing Machine Cor¬
poration
common,
and General
Bottlers, Inc., preferred and com¬

mon,

common,

mon, which
the present

appear

attractive at

time, the firm be¬
'Copies of these circulars
may be had from Straus Securi¬
ties Company on request.

lieves.

Canadian Situation Has

Interesting Possibilities
Wood, Gundy & Co.. Inc., 14
St., New York City, have
a
new
circular discussing

Wall

issued

the

interesting

Province

possibilities
of
Copies of

Ontario.

this circular may be had upon re¬

quest from Wood)
Inc.

Gundy & Co.,

THE COMMERCIAL &

1010

planning to pay dismissal wages of deducting post-war expenses
to workers who cannot be absorb¬ from wartime income by the re¬
There is no spe¬
ed in their peace-time activities. serve method.

Taxation Problems Of

Expenditures

Period

The Transition

Thursday, March 9, 1944

FINANCIAL CHRONICLE

even

for

necessary
retained x workers and
may

returning veterans, many of whom
will
have to be retrained and

cific

post-war

deduction

war

income.

They

charged against income

are

They reduce war¬
taught new skills.
Outlays may time income, either directly or
lieve
that war profits are not be necessary in some cases to hold indirectly, only if income in the
bearing their fair share of war key employees in the reconver¬ post-war years is subnormal, or
year

incurred.

(Continued from page 987)
depends upon the intellec¬
tual mood—if I may use a con¬
answer

which the
That is, is the
mood one of open inquiry?
Do
we want the right answer, or do
we want the answer that best fits
*our preconceptions?
Have we already made up our minds, or are
we in deep doubt? Does the quesquestion is asked.

i-J-U

tion carry
for

pinr>ot'P

with it a sincere

Hpsirf

But

been

had

there

profits derive from

—

war.

plants in running order and swing
into peacetime production.
This
waiting period may call for ex¬

Some

activity indi-

the^higir inSome profits

penditures for maintenance and
personnel. Our tax system should
recognize the relationship of many
of these cases to wartime produc¬

profits, pure and unadul¬
terated.
All of these distinctions
are

Relationship Between
and Industry

war.

there had been no war.

war

to the point of

Not

simple as it seems. "War profits
is an ambiguous term. We cannot
isolate the origins of profits. Some
profits would have piled up if
„

come" levels of

Government

period.
only war contractors will
face these problems. Subcontrac¬
tors will be obliged to mark time
until
their customers put their
sion

taxing war profits is not as

desire rectly^ stimulated by

enlightenment?

Post-War

•'

costs.

tradiction in terms—in

origin.

tion.

The term "war profits" is equal¬
question has over¬
Tax Aspects of Reconversion
tones in the sense that it is pre¬ ly difficult to define from the
Since the war started, the Gov¬
And there¬
mised upon the answer to another standpoint of timing.
in lies our present problem. Prof¬ ernment
has
measured income
more basic question. The question
before us this morning is, I think its are not earned without ex¬ and excess profits taxes by income
of that type.
It goes to the heart penses of production. Not all the earned after deducting costs in¬
of one important aspect of the expenses of apparent war profits curred during the war period. It
post-war
relationship between have yet been incurred. Not all has not subtracted war costs which
They are will not be incurred until the re¬
government and industry. A Gov¬ are even yet known.
ernment man cannot discuss the not known because reconverting conversion period although those
are
equally valid offsets
relative merits of carrybacks and to a peace economy is an item of costs
reserves
for reconversion with¬ war cost. No one can make even against wartime income.
Unless
We these costs are subtracted from
out a clear idea of the part Gov¬ reasonably precise estimates.
need experience as a "book of the base upon which war taxes
ernment should play in the post¬
war business world.
A business wisdom." We cannot profit by its have been levied, an inequitable
man
cannot
discuss this issue teachings until events have oc¬ distribution of the wartime tax

Sometimes a

losses

ity to make any headway in re-,
converting, will substantially re¬
one

are

If excess

suffered.

firm.

Improper Cost Allocation

people say that the carry¬
provisions assign post-war )
expenses to the wrong year. They {
mean that
although certain post->

profits are earned in this reconr
version period, they automatically
result in tax savings at wartime

Some

back

war

adjustment em¬

declines in

period

reconversion

the
declines

income in
—

primary cause may be very
difficult to ascertain. This is the

whose

greatest strength, as well as

the

may

penses

not

offsets

come.

this

find their way

against War in¬
charge the rela-

crude carry-back adjustment inust plead guilty. It is. an
over-all, not a specific, adjustment. Here again, we may move
tively

from

the

greatest weakness, of the carry¬
backs. It is a strength because it
makes classification of post-war
costs

deducted;

post-w.ar income, those ex-,

back

The,, carry-back

may

expenses

from

rates.

braces

carry-back base of any?

the

duce

in the

costs from wartime

inabil-;

duction, combined with an

this

the

charge is
of

nation

basis of their rela¬

tionship to war income unneces¬

ideal

sions

the

;

practical;

serious condemcarry-back provi-

allocation of
costs would result in an inequitable

only if their

tax

adjustment.

fact, it appears that failure
in the theoret- >
ically correct year does no harm <
so
long as tax rates remain the ?
reduce wartime taxes. >
same in the post-war period. True,
if tax rates go down it would ■
Criticism of the Carry-Backs
make a good, deal of., difference i
So
much for the philosophy,
whether an expense is deducted
underlying the carry-backs.
Let

weakness because
unrelated to the
earnings of wartime income may
It is

sary.

some

expenses

now

consider

some

to deduct expenses

of the main

objections to them. I think it is
only fair to say that much of the
criticism of the carry-backs has
been due to misunderstanding and

income

from

85%

taxed

rate, or from income taxed '

at, say, a 40 % rate. Firms con- ;
tinuing to earn profits in excess
of
income
or
invested-capital ;
credits will not be affected by the
carry-back
provisions.
Those

burden
will
result.
The
real ignorance. There has been a good
well-delineated mental curred.
A survey of post-war require¬ problem—and one not new in tax deal of low visibility. This is less
the part industry wants
firms will receive smaller tax re- >
Government to play.. Does Gov¬ ments of 100 war contractors was law—is how to allocate these post¬ true today than it was six months
ductions than they would obtain )
ernment want to subsidize indus¬ recently conducted by the staff war expenses to the income with ago, but one still sees numerous
form a direct charge of post-war V
of the Truman Committee.
Sen¬ which they are connected.
instances of misguided hostility. It
try through rebates of war taxes?
costs
ator
Truman
said:
"The most
against wartime income. •
The ideal solution would be to is
Does industry want to be subsi¬
particularly
important
that
striking feature of the replies is deduct all war costs directly from business men, as well as the pub¬ Whatever the inequity in this
dized by Government?
situation may be, we must re- >
I hope I can see both sides of not the amount of money which war-time income. It is a curious lic, should have an unclouded un¬
member that the firms'so penal¬
will be required nor the variety
the question. I am in the Govern¬
irony that what is professed to derstanding of the nature and the
ized will be those suffering least >
ment. Until a few years ago I was of purposes for which it will be be a variation of this ideal solu¬ purpose of these provisions. It is
from the after-effects of the war. ?
closely associated with business. required, but the complete uncer¬ tion is being presented on behalf a basic tenet of our democracy
So far I have been talking about
I believe I understand something tainty of the contractors them¬ of industry, whereas we in the that if enough people have enough
of the
business man's fears of selves as to how much will be re¬ Treasury are supporting what we information on any issue, most of post-war expenses attributable to
what lies
ahead.
He sees the quired and the purpose for which think is a more practical alterna¬ them will exercise good judgment the war. This is only one phase
war
economy
heading into an it will be needed."
tive. The advocates of the reserve more often than not. If business of the problem of allocating costs.
area
in
which the production
While, we are still in the full technique are
trying tp meet the men misunderstand the carry¬ The carry--back provisions do not *
curve will flatten out.
He wants flood of the war we cannot knQW problem in one way! Congress back provisions, they may commit restrict themselves solely to costs
to
avoid being caught between when reconversion will occur. We has met the problem in another themselves
to
alternative
pro¬ and losses directly rejated to the «
the upper millstone of high taxes do not know how much reconver¬ way.
The carry-back provisions grams which from a self-interest earning of wartime income; they
and the lower millstone of re¬ sion will be necessary. It will be of the Revenue Act of 1942" are viewpoint will end up in far less allow a carry-back? to post-war ?
duced profits.
He knows where totally unnecessary in some indus¬ the Congressional solution. They satisfactory adjustments in the re¬ costs which have nothing to do .
he is, but not where he may be.
with war income. For example, a ;
tries. x We have no solid granite are not a perfect solution, but conversion period.
He wants to create an atmosphere of fact on which to build.
All we perhaps on closer examination
firm embarking on a post-war ad- '•
in which business can take hold. have in our grip at the moment is most of industry will prefer them
Inadequacy of the Carry-Backs
vertising program to establish it- .
He-wants to plan
general principle that certain
Some
people say the carry¬ self in a new market may deduct v
^i|h.lhe utmost the general principle tnai certain to the reserve method.
possible certainty for tne
y cosfs to be incurred following the
I use the words "alternatives" backs fail to meet the problem of these costs from wartime income, ?
when
our
country will be the cessation of hostilities will, from and "prefer" advisedly, because it reconversion expenses., Whether or even
though
they
should
be v
warehouse, not the arsenal, of the standpoint of correct account¬ is clear to me that industry can¬ not the carry-backs are adequate rharged^gainst^iuture income, 1
lemocracy.
ing and fairness, be attributable to not, and should not, have both to cushion the effects of the cessa¬ Such a misanbcatiomoFcbstFihay ^
I should like at the outset to set war income.
solutions. It cannot play both ends tion of war production depends have serious effects, if .post-war
lown some major premises of dis¬
against the middle. It must make upon the amount of income serv¬ tax rates are reduced, and consti¬
Industry's Reconversion Problems a choice.
cussion. I take it as self-evident
ing as a base against which re¬ tute a defect in the carry-back, •
: In the twilight of transition, in¬
hat. Government responsibilities
conversion
expenses
may
be technique.
The Carry-Back Provisions
vill not end with the cease firing dustry will face a variety of re¬
charged.
The base provided by
Danger of Repeal
The carry-back
)rder. To save ourselves we have conversion problems. Termination
provisions of the carry-backs is the net income
Some
)ut in motion economic forces that of war contracts will lead to new the Revenue Act of 1942 apply to before taxes of the two years pre¬
people
object to the ••
create post-war problems. We had activities which will oblige out¬ both net operating losses and un¬ ceding the year of low income or carry-back
provisions
on
the
;o "convert to war.
That conver¬ lays and cut down income. A pe¬ used excess profits credits.
All deficit. In 1943 net income before ground that they may be repealed
sion produced unprecedented na¬ riod of dislocation of our economy taxpayers are permitted to deduct taxes for all profitable corpora¬ at the very time when. they are
tional
incoxne,
unprecedented is inevitable. Some industrial losses from income earned in the tions is estimated at $22.8 billions. most needed. This criticism obvi- '
business activity, unprecedented plants will have to be reconvert¬ two preceding years; excess prof¬ If the war were to terminate in ously rests on the assumption that •
employment, unprecedented pro¬ ed. Some firms may wish to re¬ its taxpayers are allowed to re¬ 1945, and net income before taxes the commitments made by the *
and
rehabilitate
their duce excess profits earned in the in 1944 were equal to net income 77th Congress are not firm. The '
duction, and unprecedented taxes. arrange
We cannot set such forces in mo¬
plants and equipment in order to two preceding years when income in 1943, the carry-back base would carry-back provisions admittedly '
return to prewar production or to falls
tion and walk out on them. ■ We
differ from most other tax provi¬
below
normal
profits
as be equal to $45.6 billion.
cannot
wind
up
the national compete
in
post-war
markets. measured by the excess profits
sions in that their effect on cur¬
Aggregate corporation deficits
Others may rwish to make main¬ credit.
rent tax yields may be delayed
economy and throw away the key.
in our worst depression year—
Government must do its part to tenance expenditures which they
These provisions accomplish an 1932—amounted to only $8 billion. two or even more years. However, •
bridge the gap between a war were forced to defer during the averaging of income. When, the Unless we assume a long, chaotic since they were enacted in lieu
war period because of manpower
economy and a peace economy if
of reserve adjustments and in full >
carry-backs are combined with reconversion period, it seems un¬
we
are to
avoid depression and and material shortages or contin¬ the
two-year carry-overs, enacted likely that post-war deficits will recognition of their importance in •
unemployment when the war or¬ uous war production.,
prior to the Revenue Act of 1942, approach this figure. While re¬ achieving a correct statement of

without a
image of

„

ders

' '

stop.

some

industrial areas inven¬

a
five-year averaging period is
models may re¬ set up for industries with fluctu¬
dustry's regular trade channels quire replacement or readaptation ating income.
to markets of plenty rather than
were dammed !up and production
The
averaging
under ? which
in a large measure was diverted scarcity.
Some firms engaged in
taxes paid on profits of fat years
to the Government.
Government Wartime production will have a are reduced by losses of lean
became the biggest buyer.
But subnormal volume of sales which
years has long been- recognized as
when we begin forging our swbrds they will wish to stimulate. Firms
a
major contribution to a more
back into ploughshares, Govern¬ created to produce war goods will
equitable tax structure.;,. It is - a
ment will step out of its stellar wish to spend money to enter new
recognition that profits are best
role as purchaser.
It will turn markets and develop new prod¬ measured not by the year, but by
ucts. '
•?:?•)???. •■•■ % ■
back to industry the job of find¬
a longer unit of time.
}
In liquidating the war economy
ing customers. It will move into
Averaging income, however, is
the background. The more respon¬ there is also the problem of shift¬

converted to war, in¬

When we

tories of Victory

■

conversion may bring about
stantial temporary losses, we
remember

that

the

sub¬
must

post-war

devouring pent-up de¬
mand for civilian goods will be

period

that demand will be
reinforced by an enormous ac¬
cumulation of individual savings.
unleashed;

All

things

safe

considered,
that

assume

the

seems
base for

post-war rcosts related
war
is sufficiently large

charging
to

the

cannot
possibility of

wartime taxable income, I
believe

their

that

the

is as great as some

repeal

pessimists imagine.
Of

the life expectancy
of the carry-back provisions like
the life span' of other provisions
course,

depend upon
used or abused.
In tax law, as in life, one may
bite the hand that feeds him. If it

whether they are

becomes

apparent

that large re¬

the more
Government's role will be.

vast civilian army of work¬

sibility industry takes,

ing

limited

ers

from

war

peace

basis.

Thousands of workers in war in¬

Taxing

War Profits

revenue

important from
standpoint to see

high tax is imposed on all

aat

;ar

profits.

But it is even more

nportant from
out. National
J1

1 if large

morale stand¬

unity is threatenvw**

numbers of citizens be-

sions.

sole, nor even the major,

of the carry-back provi¬
Their major purpose is to

purpose

funds of wartime taxes are result¬

Reconversion costs must be in¬

ing from inflated costs or losses,

carry-back

curred

within

period

after

reasonably short

of war
reasonably

termination

the

possibility of repeal

enhanced.

There

have

will be

been

at¬

tempts to "sell" these provisions
contracts.
And
by
provide a general methdd for off¬
to industry, with the plea that it
short, I mean within a year or
other jobs. It will be difficult, if setting costs and losses suffered
two.
Those expenses directly re¬ can use the carry-backs to finance
not impossible, to maintain em¬ as a result of reconversion against
war-time
income.
The
record lated to wartime income will gen¬ post-war expenditures for expan¬
ployment at the war level after
sion and growth. In effect, a sub¬
erally be contracted within that
the war orders stop rolling in.
It clearly shows that the Congres¬
It will be sidy program is being urged for
sional choice of the carry-back relatively brief time.
should be the aim of all, however,
the extraordinary case where a industry in the guise of tax relief.
to keep employment at as high a technique was based on inability
| lw xvccp cuipiujuiciit a i ao xxxgxx a
I hope that industry will .resist
to work out a satisfactory method .gradual tapering off of war pro¬
| level as possible. Some firms are
dustries

uuatncs

In wartime it is

not the

provisions.

the

will
wm

be
uc

forced

xkjlk: cu

find
juuuw

:■ v

of the tax law, may

under

•

i
i

Volume 159

THE COMMERCIAL & FINANCIAL CHRONICLE

Number 4262

;

been claimed by the
the Hatch plan; first,

advocates of
that it is ad¬
war period and post-war tax rates
ministratively simple; second, that
Failure to Provide Working
j make no difference. But/taxation it grants the greatest benefits to
Capital
is an intensely practical matter firms facing the most serious re¬
Other
people say the carry¬ and, in practice/the story is dif¬ conversion problems; and third,
backs fail to provide the neces- ferent. The specific reserve tech¬ that it provides cash with which
i sary liquid funds to make recon¬
nique brings serious administra¬ to meet reconversion expendi¬
version and other similar post-war tive problems. In the majority Of tures.
the smoothtongued salesmen who
peddle such spurious goods.

for post-war costs. The amount of
income in the War and in the post¬

■

I expenditures.

They claim that de¬
lay in the payment of tax refunds,
resulting
from
the carry-back

I cannot

I venture that it would re¬

cases

deny that this adjust¬

Yet deductible

employment.

war

Exchange Expels Yelin

do not appear to provide

reserves
a

10U

instrument for the dis¬

proper

charge of this responsibility, par¬
ticularly if they would most ben¬
efit
corporations
which
have
reaped the greatest rewards from
the war. If it is appropriate for
the Government to subsidize pri¬
vate industry during the transi¬
tion period, the firms Which have
profited least from the wartime
expenditures of the Government

The New York Stock
Exchange
announced oh March 3 that Ben- ^

jamin Yelin, a member, has been
expelled,
having
been
found
"guilty of conduct inconsistent
with just and equitable principles
of trade."

The announcement of the action

of the Exchange was made as
adjust¬ ment for reconversion costs is the
follows
by
John
A.
Coleman,
ment than the carry-back provi¬ simplest that could be made. How¬
:
Chairman of the Board of Gov¬
I ever, it is not true, that the great¬
| provisions, will neutralize their sions.
ernors of the Exchange:
There is first the difficulty of est benefits will go to firms suf¬ would seem to have the better
| inherent benefits. • They believe
lA charge and specifications
Those claim.
I that the refunds would do no estimating what is ultimately to fering postwar losses.
Certainly it is doubtful
been
preferred against
; more
than lock the stable after be charged against the reserve. firms will be in as good a position whether the Government should haying
Benjamin Yelin, a member of the
| the horse is stolen.
•
! In many cases there is no basis Under this method as under the encourage the post-war expansion
;«
Corporations generally file their for approximate estimate. To re¬ carry-backs, only if their losses of the very industries which have Exchange, under Section 6 of
Article XIV of the Constitution,
i tax returns on March 15 after the solve this difficulty, advocates of are less than 20% of the wartime expanded most in wartime.
Our
1 close of their business year,1 and special reserves have suggested an income they earned in the period peacetime requirements will call the charge and specifications were
i pay their taxes in quarterly in- arbitrary over-all limit on the in which they set up the reserve. not for more shipyards and muni¬ considered by the Board of Gov¬
If their losses are more than 20%, tion plants, but rather for more ernors at a meeting on March 2,
stallments throughout the year. annual reserve deduction.
This limit, usually based on net the Hatch plan will leave the civilian goods,—for the kind of 1944.
This means that in a year of losses
"The charge against Mr. Yelin
corporations must continue paying income, represents a break with firms in a worse position than goods which have suffered sharp
was based upon his allocation of
their taxes for the previous yea? the principle of the ideal alloca¬ the carry-backs would leave them. production cuts during the war
sult in

less satisfactory

though losses in the current

even

'year clearly indicate reduction of

liability or, indeed, absence of lia¬
bility. What could be more ridic¬
ulous than paying off liabilities

•

! that

liabilities

not exist when

that do exist are pounding at

;

the

«'

Limitations

costs.

instruments.

crude

the

extraordinary

are

post-war

the

reserve

was

•

ing for the balance of the

year.

actual

income

deficit

the

taxpayer with a precise computa¬
tion of the actual tax refund. If
•

•

the

corporation

mated

its

had

underesti¬
and, therefore,

income

•postponed too much tax, it would
be required to pay the deficiency.
If it had erred

the conservative

| side and postponed too little tax,
additional

the

shortest

tax

refund

reasonable

within

undeserved

secure

benefits
These

from

the

benefits
of

Hatch

would

deduction

income

tax

plan.

take

from

otherwise

the
war¬

taxed

at,

80% and the inclusion of this

say,

amount in post-war income taxed

at, say 40%. Under these assump¬
tions a 40 or 50% profit could, in
effect, be earned on each dollar
in the reserve.

who had, more would be
given. ,r ■
•
Upon analysis ( the Hatch plan,
as compared with the carry-back
plan, provides the least adequate
adjustment for the firm suffering
those

reconversion

mostn serious

period,

velop

proprietary interest in his

did

Unrestricted Reserve I-IIH;

He would not be human

reserves.

not

seek

have

the

Still another alternative to the

provisions

held

meet

quarterly tax payand would substantially
working t capital ^ shortages in the reconversion period,
lit would not grant corporations
I anything to which they- are not
now
entitled by law.
It would
merely provide a mechanism for
expediting payments of refunds.
j

ments,

turned

wartime

income

and

taxed at wartime rates..'

I mitigate
•

•

{

similar

turn

The Hatch Plan

of the funds

used.

are

mated

•

loss, and not on the income
preceding year.
„|

that,

year

the esti-

earned in the

costs

the

Alternative Proposals to the

the

So much for the arguments for

.and against the carry-back provi¬
sions. What are the alternatives?
t

•-,•

•

•'

•.

•

;• •.' ■ .•:

• •;

=•

'I•

•

■

••

specific

post-war

Carry-Backs
'

losses related to the war,effect
the
of
Hatch
plan
or

would be similar to the effect of
the

•.

Specific Reserves

reserve

expenses

additional

plan.
would

post-war

These
cancel

income.

However, to the extent shifts in
under

income
ceeded

this

method

One alternative is

and losses an inappropriate
justment would result.

the

specific
.reserve
technique.
Under this
method a specific reserve is taken
out

'idea

wartime

income

with

the

look

ex¬

fell short of these costs

the

ad¬

not

•Tin

theory

this

approach

'sounder and more direct than the

;carry-back approach. Underrideal
.conditions a specific reserve can
result in

correct tax adjustment

believe

that

the facts

support the charge that wartime
corporation taxes have been too

high for industry

as a whole.
It
would be hard to prove that they

have

cut

down

industry's ability
post-war out¬
corporations had left
billion after paying
of taxes.
In 1943
will have left nearly

to finance necessary

lays; In 1937
less than $4
$U4 billion
corporations
$9.2 billion, — even after paying
$13.5 billion of taxes.
In 1944

corporate profits after taxes are
expected to reach $9.9 billion, or
three

times

the

average

annual

provisions from the same stand¬ it is estimated that even after pay¬
point, we see that they can shift ing taxes and dividends, American
up to 100% of two years' war in¬ corporations will accumulate over
come
into the post-war period. $12 billion of undistributed profits
This
may
look like sleight-of- for the three years 1941, 1942, and

charging against it post¬
war costs directly related to war¬
time income; Any unused portion
hand; but it is actually the way
of the reserve, after a specified the
carry-back
provisions
can
period, would be returned to war¬ operate for firms with low post¬
time income..
>1
war
income or a deficit.
Take

when
This reserve plan

profits after taxes in the period
carry-back from 1936 through 1939. Moreover,
...

in¬

for

taxable

plain, unvarnished method of
Under a plan.proposed bySena4 reducing wartime taxes. Its advo¬
cannot
urge
this reserve
tor Hajch a reserve would be set cates
up in tne same way as under the upon the assumption that war¬
specific reserve plan. But instead time income was in part illusory.
of attempting to charge particular Whether they say so or not, they
post-war " costs against this re¬ predicate the need for the reserve
serve, the - entire reserve would upon the assumption that corpora¬
be added to post-war income. In tion taxes are too high to permit
other words, an arbitrary percen¬ post-war expansion and growth,
tage of wartime income (say, 15 to and the re-employment of return¬
20%) would be treated as post¬ ing veterans.'

•

ments

in the post-war years

come

they

proposal was not
for partnerships and pro¬
prietorships. This was not through
oversight, or through any desire
;on the part of the Treasury to
favor the corporate form. Rather
it was because partnerships and war income, regardless of whether
proprietorships were put on a or not a firm was actually incur¬
ring reconversion costs or suffer¬
; current basis by the Current Tax
Payment Act of 1943. In a year ing a decline in income.
oi loss partnerships and propri¬
To the extent that this shift in
etorships will base their tax pay- income is matched by post-war
•made

for

reserves
and
against
the
carry-back provisions. Words are

ticklish things that play tricks on
those who use them as well as
Such

in¬

ference could not be farther from

the truth.
As
to

the

that

move

from

the

general

specific, it is plain to

see

and carry-backs af¬

reserves

their

transactions
to

appeared

profitable,

account in which he had an

indirect interest and to

one

other

such allocations having
operated to the disadvantage of
account,

the firm of which he
ner

was

part¬

at the time.

"The Board, having found Mr.
Yelin guilty of conduct
incon¬
sistent with just and equitable
principles of trade, Mr. Yelin was
expelled."
The Exchange points out that

Section 6 of Article XIV reads

follows;

fect different industries in differ¬

ent

ways.
Between the two, one
industry's meat may be another
industry's poison; and even among
reserve
plans,
one
industry's
gain may far exceed another's.

Government

sit

the

might,

sidelines

therefore,

and

leave

member

allied

who shall be

adjudged guilty, by
the affirmative vote of a majority
of the Governors then in office,!
of

violation of the Constitution

of the Exchange or

violation

rule adopted pursuant to the

Constitution

of the violation of

Section 722 determination.

broadened; he would carry-backs provides post-war re¬
serves by allowing firms
Is ay, 60 to 90 days, would be made, be a
to de¬
superman who ranked very
f
This adjustment would immedi- little below God and the
angels if duct, say, 10 or 15% of their
4 ately free the cash- or securities sHwartime-inGome-wUhouL-anyre
•

I have referred to industry this
morning in the aggregate. In do¬
ing so I may have implied that
industry presents a united front

those who hear them.

subsequent

execution and at times when the

Conclusion

The firms benefit¬

would be those with high
post-war income and least in need
of generous tax treatment.
To

ing

the

transactions,

years.

many

problems. It would make an ad¬ to industry to settle its own in¬
justment similar to the carry¬ ternal warfare and bring forward a resolution of the Board of Gov¬
backs for firms facing moderate its own solution. But since Gov¬ ernors regulating the conduct or
business of
members or
allied
reconversion problems. To firms ernment must bear the
Moreover, the reserve might be
responsi¬
members or of conduct or pro¬
extended to cover many expendi¬ facing no reconversion problem bility for a high level of post-war
ceeding inconsistent-with just and
and making high post-war profits,
tures
not
properly I deductible
production and employment, it
from wartme income. Unless- the it would grant substantial wind¬ cannot be neutral on the question equitable principles of trade may
be suspended or expelled as the
limit on the reserve were placed falls, if tax rates are reduced.
In of reconversion costs. It cannot
Board may determine."
I
substance
the Hatch plan is a afford a hands-off
so low as to create real hardship,
policy. It must
In its announcement the Ex¬
it would exceed the needs of the crude and haphazard .application see to it that the best feasible set¬
of the idea embodied in the spe¬ tlement is
secured—a settlement change also says;
majority of taxpayers. It is only
natural that the taxpayer will de¬ cific reserve, approach.
made in the public interest and
"Benjamin Yelin was elected to
as

|
Oh the following March a regI ular tax return would present the

would-

time

•

with

form

•

firms not faced
reconversion
problems

equal the

rectify this weakness in that year. Nor is it likely in
of the carry-back adjustment that most cases that aggregate post¬
> the Treasury proposed to the Conwar/expenses chargeable against
'>
reserve
will
match
the
gressional * tax
committees
last the
year that provision be made for amounts set aside in earlier years
speeding up the carry-back re- of ignorance.
The second difficulty is how. to
funds.
The
Treasury
proposed
that a tentative claim could be determine the amount of post¬
filed when a taxpayer estimated war costs to be charged against
that a loss would be incurred, or the specific reserve. If the prin¬
income would fall below the ex- ciple underlying the specific re¬
cess-profits credit. On the basis serve method were rigidly fol¬
of an estimate of income or loss lowed,
every
item of expense
for the year, the tax refund would charged against the reserve would
then" be quickly computed. * The require aln administrative deter¬
Treasury proposed that this esti- mination of appropriateness. This
mated refund could be applied as determination would be laborious,
and in many instances as complex
<an offset to tax installments owIt

reduced,

deduction

costs to wartime income

would

case

allocation

ideal

If post-war tax rates should be

are

They

likely to be too high for some
firms and too low for others. Only

amount

door?„

■

tion

notice, however, that they apply
only when income, is sharply re¬
duced, or when losses are: suffered..;.y
■,''' ' v.'
I, I..•..
.

Three

major

•

advantages; have

not in the
one

group

special interest of any
within industry.

Whether

we like it or not, Gov¬
(and by Government I
mean the
people) has become a
partner in industry's reconversion

ernment

-co sts

-and losses under the carry¬

back adjustments.
cents

terms,

will

Government

also

say

their

say

the

that

senior

losses.

might

that it will be at least

important

junior

of
other income tax payers with the
responsibility' for sharing 40% of
their losses.

Let

partner

consider

just

example.' A large producer of

one

basic metal will

secure

$47 mil¬

lion in refunds from the Govern¬

ment if its net income for tax pur¬

in the reconversion period
This refund
goes down to zero.
compares with an average net in¬
poses

after taxes from 1936 to 1939

come

of $45 million.
Government

stricted

of this unre¬
plan are really

proponents
reserve

asking.1 the Government to sub¬
sidize a-portion of industry's post¬
war. expenses.
They justify their
attitude by dwelling upon the re¬
sponsibility of Government for
maintaining a high level of post¬

floor

and

traders,

which dissolved at the end of last

since which time Mr. Yelin
has-been^n4ndividuaLmember^~
year,

NYU Clinic On Wage,

Salary Stabilization
Current problems

administration

the

arising from
the Wage

Salary Stabilization Act are I
scheduled for discussion at two
five-week clinics which opened at
and

New York University on Feb.

and

directors

of local personnel
labor consultants;

for the benefit

this was made
Prof. Paul A.
McGhee, Acting Director of the
University's Division of General
Education.
The
clinics, which
will be held Tuesday and Wed¬
announcement of
on

Feb.

nesday afternoons, will be con¬
has, always been
ducted by Prof. Emanuel Stein,
industry's profits,
Acting
Director
of
the
Uni¬
but now it is deeply concerned
versity's Graduate Division for
also with
industry's losses. With Training in Public Service, At
Government sharing those losses,
each session of the Clinic Professor
industry can maintain a high level
Stein or some representative of
of
production and employment
the War Labor Board will take
with a smaller stake.
Therefore,
up ; some
current
situation or
labor - will hold
enormous
odds
problem which needs clarification,
against unemployment even in the
or some ruling of the Board which
face of a possible depression.
interested

interpretation.

needs

On the other hand, some of the
of the reconversion period

costs

will be unrelated to the \ftar pe¬
riod and unimportant in main¬

taining
ment.

tual

high level of employ¬
It is, therefore, to the mu¬
a

interest of Government

and

industry to investigate the char¬
The

ner

specialists

In dollars and

might

partner for wartime excess profits
taxpayers with responsibility for
81 %

in April, 1941, and,
1941, became a part¬
of T. J. Beauchamp & Co.,

membership

in December,

acter

lays.

these
may

reconversion

out¬

be necessary to cir¬

cumscribe their tax deductibility
in • order to prevent abuse.
For

The balance

the period will be devoted to
discussion and to answering ques¬
of

tions

presented by members of the

group.

Admission

the clinics is

re¬

stricted to members of the three
Institutes

Stabilization
New York

Wage

which

and
were

Salary

held at

University last year,

behavior. Nor should the way be
people should not left open for anyone to deprive
grant industry a all
industry
of
an
important
blank check, even though it prom¬ means of cushioning the jolts of
ises the most circumspect post-war the transition period.
the

American

asked

THE COMMERCIAL &

1012

the rates by specified per-*

crease

iariey Lute's Suggested Post-War
Tax Program Subject Of Discussion
(Continued from page 987)

■;;*./[

something else entirely. The for- efficient operation of society unmer is undoubtedly bad; the latter rder law and order,
is common sense.
It is a neces- i
A government controlled con-

;

formula in order to prevent1 stitutionally by the wise Christian
power-seekers from running wild j injunction to "render unto Caesar
and progressively gaining power (the things that are Caesar's" canin such cycles as to destroy all not have its sovereignty impaired
community of interest among our \ by any limitation of its monetary
citizens. Progressive rates in the [or taxing powers.
Accordingly
higher brackets do not injure a our Constitution is explicitly not
man nor destroy effort.
An ade- a state's rights document in this
sary

•••'

there
must be a limit on the rates, with¬
in the actual and safe requirements of the nation fighting for
its very existence.
In peacetime
or wartime, a man with too much
power loses his perspective and
: his
sense of social justice, just as
surely as the man who is opi pressed by the shearing of his
[powers and of his ability to gain
low-income man.. Of course

„

■a

'»

moderate existence.
Before the income-tax law was

I enacted in 1913, and while it was
under discussion, I said that it was
{the only sensible and businesslike

to raise Federal funds. Since
I have made tax returns
year for myself, other in-

way

[then

every

dividuals, fiduciaries, partnerships
and corporations—and contrary to
"A Mr. Lutz's opinion, I believe it
v:.

beginning of America's
Instead of agreeing that

the

was

"real rise.

;"no new large-scale mass produc¬
tion industry can arise in this coun-

progressive tax sys¬
Mr. Lutz

try under the

tem" (if by that statement

[means progressive rates as to unit
income rather than

progressive by

years), I find that most of our
large-scale mass production indus¬
try was born and has thrived un¬
der the system.
All

new

financing is not depen¬

by any means upon internal
surpluses. The runaway greed for
power that such "progressive tax¬
ation" arrests far outweighs the
dent

inequities created by such a tax.
Really able men do not work for

great wealth alone, and the slower

of gain should spur them to

pace

work harder and faster instead of

holding back.
The

rate

progressive

taxation

oppressive

not

was

cept during the two"
If

such

income

world

ex¬

wars.

procedure we can
horrors reaching us

prevent the

that have descended on many Eu¬

and other countries, then
we are favored, indeed.
I would
feel like a coward and an ingrate

ropean

if I

griped about it in such a time
this.

;

Under Item 1

•

of the States tax

discussion, the statement is made
that "it is now a matter of his¬

that the course of Govern¬
policy during those (WP
spending) years was not shape
tory

ment

with

view

the speediest ah

sorption of workers
.

„

jobs.
year,

into private
..

J^ven ifthe record straight;'
it is an election
s keep

let

all

ties

deflationary difficul¬

the

of taxa¬
Nothing

government full control
tion "for the
h*

duration."

fatal to freedom as fail¬

of the central

ure

capitalism," and

government suf¬

It would

cial

that this finan¬

seem

blind

spot is

mesalliance

C9ncealing the
and

debt

between

supply and bo presenting
with false alternatives. Instead

money
us

tackling this very vital prob¬
we
find ourselves on
the

lem

horns

that

which

dilemma

That is, we
are forcing ourselves to choose bemesalliance presents.

tween

conducting an unregenerate,
enterprise" system chron¬

plenty with its

ment and

unemploy¬

relief
deflation, as

demand for farm

doles

due

conducting

system

"planned,"
chronically

over-supplied
with
purchasing
and regimented accordingly
in a futile effort to prevent the

power

dire effects of the inflationary gap

which it has taken
about in
followed

our

a war

to bring

"free" system.

our

Constitution

If we
plus

proposal to prohibit
public debt (our post-war squanJefferson's

dermaniacs

would

prohibit

being without public debt!),
would we not plainly escape any
such dilemma?
It would seem to

from

which
be clearly constitutional to elim¬
governs least," said Thomas Jef¬
inate debt arid proceed as sugferson. The pseudo-liberalism
of
bureaucracy thinks this implies' ^es^e<^ by Hie Harvard Law Reanarchy. Not so. What it does im- view (Jan. 1942, p. 479):

compatible

with

the

public debt (not involved in
we are going
to saddle

Russia)

ourselves

first with

serves,

autocratic

ply is the largest possible, and so
fewest possible, geographic juris¬
dictions,
exercising
the
fewest

some

but
practical

paper,

program it has

defects

many

and would not

work

put

into operation.

The main de¬

oc¬

our

the

fect

"liberals"
that the income tax has signally
to

curred

system is its
neglect to take
into

consid¬

t h a

eration

sourcesand
the

of the

uses

taxable ob¬

OPA

ex-,

Lutz

would give over to the States the
taxation of individual incomes.
If

this

"While

there

are

historical

precedents
for
delegating
the
power to fix Federal tax rates, it
would seem that directions to in¬

pos¬

an inflation¬
privately extended
bank
"credit"—and
also,
inci¬
dentally,
any
deflationary gap!
Financial exchanges must then oc¬
cur through a service in clearing
house operations for checking ac¬
counts that is as strictly public as
the printing of paper money has
been
since
private bank notes

sibility of developing
ary ^ap

incomes

dividual

derived

are

largely from national sources, i.e.,
the sources of each individual's
is

income

limited

not

State

lines, neither, is the use of such
income : thus
restricted.
Each
State in its efforts to obtain all the

levy its in¬

it cart, will
in such

revenue

taxes

come

way

overlap on the jurisdiction of the
same
object of revenue of the
other States, with the result that
citizen or resident of one State

would

paying

income

same

tructive"

taxes

the

States.

several

nothing more "des¬

there is

And

system of taxes
taxation!

any

than this sort of double

experiences with estate

The State

and inheritance taxes has proven
this

and, despite

the case,

decisions of the United
States Supreme Court which has
had
the purpose of fixing
the
the many

basis

Taft

inheritance

State

taxes

problem is still unsettled, and
injustices and practical confisca¬
tion of estates still persist under
the

the

interpretation

laws,

State

the

"•

Although I agree with Prof.
proposition
that steps
be taken to curb Federal

Lutz's

should

taxing power so as to leave cer¬
tain clear-cut sources of revenue
to the States,-

aoume

and thereby Iriable
local governments

the States and
to

out

carry

functions

their governmental
adequately, (and

thus not give

opportunity for

usurpation

Federal

ministration)

local

ad¬

I feel that in fiscal

theory must give way to
expediency and necessity.
Be¬
cause of the vast growth of Fed¬
eral administrative activities aris¬

affairs,

taxation by va¬
He also proposes

students.

and

confusion

greatest

double taxation. In these days, in¬

the subject of

rious

done, it would lead

were

the

thus

Sakobki

Thus,

jects.
Prof.

suggested in "The Saturday Eve¬
ning Post" of Dec. 11.
As for the corporation income

t.ne_jpEQPflsai m

against

"That government is best

procedure involves repudiation of

fast

R. F. D. 3, Bethesda, Maryland

tax, I filed two briefs in 1942 and
perience that will end in disaster
two in 1943 before the House and
before we are finally compelled
Senate Committees. The analysis
monetary control. Putting blinders to resort to repudiation and mone¬
apparently was so sound that, al¬
on this inflation question exhibits
tary contraction.
though I was working alone withfinancial illiteracy on the part of
Having done this, however, we
..
t
.
,
out the help of any organization,
"public men who should know have not solved the real problem, th
m-oriosal to
abolish
double
better than they apparently do"
of^qimibfruhTr-any mm* than taxation after the war has been
(specifically Mr. Willkie) which Russia has. Nor can we solve it
favorably regarded by the Treas¬
sadly needs the reproof which the until we shall cull out "financial"Chronicle's"
"Financial
Situa¬ ism" from our "capitalism" and ury, the National Resources Plan¬
ning Board, and important mem¬
tion" column affords and supports make it a sound
private profit bers of the Committees of the
by - soundly
differentiating be¬ system by eliminating the anom¬
House and Senate.
tween
production of goods and aly of State banking laws and the
Professor Lutz integrates well
production
of money income ancient practice of fractional re¬
the constructive proposals made
through public debt.
eliminating the

and

ALDEN A. POTTER

too many "lib¬
being blinded by

might have

that

indeed,

the

States is ideal

ficiently to match monetary outgo
with taxation to assure adequate

policy of the Government to get
back into private industry as

administration.

"plutocratic

present

our

and

be¬

sources

Govern¬

ment

•

Senator

tential

They made con¬
just
that, and that is how I got back
long before the final curtain. That
isn't saying the operations were
all
they should have been—no
Government-operated project ever
was or ever will be, under a Dem¬
ocratic, Republican, or any other

era!

of States rights in lay¬
ing income taxes, or he would not
so glibly assign serenity to a post¬
post-war public budget as a way war tax program that attempts
to stimulate large post-war private to
simplify the situation by such
budgets. %[ [;v'v;::y-y
an allocation of fields in taxation
What we are actually heading He is far sounder in condemning
for is the false financial alterna¬ all income taxation (taxing "abil¬
tive of a totalitarian system of in¬
ity to pay") than he is in this idea
flation.
It works, undeniably, to of State
powers.
It would seem,
processes

Harley Lutz sets forth in your is¬
sue of Feb. 10, specifically a small

escape

tax

tween the Fed-

academic contact with the

division

war

that, from my own observation in
this section at least, it was the

possible.

than

seems

have had more

can

"free

tinuous and open efforts to do

readily realize
which Prof.

objectives

the

hardly

Incidentally,

anarchy, not in controlling prices.
I am thoroughly in sympathy
Russia's first attempt at regiment¬
with Prof. Harley L. Lutz's pro¬
1, Sec. 8: Congress shall have ing inflation yielded a frightful
posals. In fact, since, 1938 I have
famine.
power to lay and collect taxes. . . .;
Swinging right back into been
working for the abolition of
To establish uniform laws on the another attempt, this time with
the capital
subject of bankruptcies through¬ more caution in dealing with food
gains tax, and
out the United States;
To coin producers, the period of our deep
prepared in
money, regulate the value there¬
depression saw Russian inflation
1942
a
very
of.
.; To provide for the pun¬ proceeding under a multiple price
e x h a u s ti ve
ishment of counterfeiting the se¬ system which amounted to legaliz¬
analysis on
curities and current coin of the ing black markets instead of try¬
this subject. It
United States.
.; To make all
ing to suppress them.
What pro¬
so
impressed
laws which shall be necessary and cedure-, finally
enabled her to
the
members
proper for carrying into execution abandon the futilities of price fix¬
of
the
Com¬
the foregoing powers).
ing?
Nothing more or less than
mittees of the
War finance should have opened deflation by a sweeping tax en¬
House
and
the eyes of this nation to the wis¬ forced by confiscation and reissue
Senate that we
dom
of v this
arrangement as of money in a new and scarce
may look forr
against the nonsensical provincial¬ form.
ward to fun
That is precisely what war, fi¬
ism that certain academic scribes
ther improve¬
and political Pharisees are reading nanced
by public debt which
ment
in
the
into the Constitution.
No other pyramids purchasing power
capital gains
democracy is burdened by such a through bank deposits created by
tax, if not its
fetish, though it did require a con¬ securities placed in bank port¬
complete elim¬
siderable rumpus to open Austra¬ folios, is about to bring before
ination,
as
E. M. Friedman
lian eyes and give their central this U. S. Government. Since such

ically characterized by the para¬
dox of poverty in the midst of po¬

functions,

that Prof. Lutz

then

could

Professor Lutz's scheme of post¬

ing bankruptcy laws specifically
under Federal jurisdiction. (Art.

period I worked four months for
the WPA, and I can say definitely

constitutional."

City College, New York City

It not only accords ple¬ eral" leaders are
failed to bring about a levelling
to the Federal Con- this fact from seeing the true, con¬ of the distribution of wealth.
gress
but it also explicity pro¬ stitutional-alternative for estab¬
Nothing in its history anywhere
hibits
state
governments from lishing a free capitalism without warrants the conclusion that the
exercising any such powers as a chronic trend to depression!
A attempt at redistribution of wealth
might affect monetary conditions. consideration of the broad aspects or income by taxation can bring
(Art. I, Sec. 10: No state shall coin of Russian experience with the about
aught but defeat of its own
money; emit bills of credit; make attempt to communize a money
ends,
anything but gold and silver coin system and make of it a system of
a tender in payment of debts). It
ELISIIA M. FRIEDMAN
ration
points,
should
give
us
clinches this definite centraliza¬ pause.
The
severest
sanctions
Consulting Economist,
tion of financial controls by plac¬ proved effective only in creating
New York City

During the latter months of that

men

A. M. SAKOLSKI

persistent

required

curbing by Sec. 10, Art. 1 and the
Bill of Rights.

upon

power

nary

-on
•

have

that

certain rises in a
named price index would set up a
sufficiently definite standard to be
centages

would crucify the respect.

quate flat rate

Thursday, March 9, 1944

FINANCIAL CHRONICLE

method of

balancing, the budget ing out of the economic forces
principle,, jjs sound.
I which have knit the nation into a
only one.jninor sug¬ close political union, the bulk of
gestion. The investor is [the source expenditures
for
governmental
of economic expansion* and of em¬ purposes is imposed on the Fed|>
ployment. We should, therefore, eral government, and sources of
study some method to encourage revenue must be found to cover
investment.
We might think of the outlays. Under this condition,
shifting from a tax on income to the Federal taxing powers must
were eliminated as too much like
a tax on expenditures.
Under our be expanded proportionately.
If
counterfeiting.
high income-tax rates we prevent the tendency continues, it may
No, it- is not Jefferson; it is
new creative business genius from
be more desirable, from a prac¬
Hamilton and his debt philosophy
tical
standpoint, to concentrate
that is outmoded today as we are building up a big business and
giving employment. If we taxed most of the taxation in the hands
pressed inexorably between the
of the
Federal authorities,
anql
false alternatives in Hamiltonian personal expenditure only, or if
we
exempted reinvested income have a plan of distribution of a
finance so that we overlook the
of these taxes to the
true freedom (not freedoms!) of entirely or partly from taxation, portion
we should go a long way toward
States.
This scheme works fairly
Jefferson's consistent appeal for
solving the problem of unemploy¬ well in New. York State, where
no public debt and a
laissez faire
as
between Government
business.
.There is no other

policy
and

possible way for constitutionally
rendering unto Caesar) only those
things that
taxes and

tion is

are

Caesars,t to wit:

money.

Our; jConstitu-

bulwark of

liberty

pre¬

cisely because it specifically elim¬
inates

State

power over
and American institutions

are

be¬

people, not their State or local
governments, are the locus of lib¬
erty.
State government can and
do infringe our civil liberties far
more
than the, national Govern¬
ment ever can or will. Historically
are

the;..very

which,

would

add

ment.

governments

It was

The idea is not new.

incorporated

actually

was

Mills.

published

been

has

tax

expenditures

income is

tion instead of

tax

original

American

consump¬

work."

...

;

BOTTOLFSEN
of Idaho

given the article,

"Post-

Program," a careful
reading and I believe Dr. Lutz has
War"

virtues

C. A.

Governor

I have

Tax

advanced

"plain living, high thinking, and
hard

[to the
-

HON.

fiscal program the

embodies

found.it advisable to apporf

municipalities.

instead

production.

its communities.

government, therefore,

tion certain of its revenues

re¬

cently by Prof. Irving Fisher.
A

in¬

has

its taxes,

limits severely the tax¬

State

The

good study on this

has

extended

able resources of

Treasury report by Secretary Ogden

still

but

government

and

creased

and

when adviser to the Treasury,

State

the

put forth by the late Prof. Thpmas
S.
Adams
of! Yale
University,

finance, subject

ing threatened precisely because
that fact is being ignored.
The

they

•

some

ideas

consideration in his

worthy of

article.

.Volume 159

THE COMMERCIAL & FINANCIAL CHRONICLE

Number 4262

in the direction of

move

Tomorrow's Markets

the

break-through.

Walter Whyte
Savs-—

jy Should the market continue
present action then the 134
industrial figure becomes im¬
(Continued from page 990)
recovered practically all its portant to watch.
As in the
losses while the industrials case of an advance, volume is
have either recovered about a valuable adjunct to watch
5% or have done nothing. In for. In the latter case, how¬
when

week

the' first

January,

138.65, the recovery from with

the extreme lows amounted to

down move, may

the rails.
L

'/V

good.

seem

mailed

^ ;> j

mentioned

stocks

cific

here

wide

divergence—i.e., indus¬ before, the advice on buying
trials to rails—is not without still goes.; The purchase levels
its significance.
For disre¬ approximate the 135 indus¬
garding the news potential, trial level; the critical points,
such a wide gap to the expe¬ the 134 figure, f It is one of
rienced
means
warning- the prime reasons why this
trouble ahead.
The imme¬ column warns against chasing
diate clue as to when this stocks on strong days.
trouble can be expected is
Specifically these stocks
frequently found in the vol¬ continue as follows:
Given

ume.

average

;•

l1'?

■

*
]\ ].

*T•»".«».'

x; From
recent and present
signs the next direction
should be down. But, as men¬
tioned above, the effect of
propulsive news has not been
included. Yet, even the mar¬
ket potential of news can be
gauged to some extent.
❖

PREFERRED

MCCARTHY,

at 22.

Thursday.

VALLEY

Payable April

1044 and Oct.

"B"

SERIES

"A"

expressed in this
necessarily at any
those of the
Chronicle.
They are presented as
those of the author only.]
do not

coincide

Directors

139-40

o u

and

break

level on
can assume that
develops will be

April

news

K.:?9WALL

with

for

I EATON & HOWARD

Series

"A" Bonds—Coupon No. 1—April
1, 1944—$20. on $1,000. and $10. on
Bonds; Coupon No. 2—October
1, 1944—$20. on $1,000. and $10. 011
$500, Bonds.
Series "B" Bonds—Coupon No. 1—April
1.
1944—$20. on $1,000. and $10. on
$500. Bonds; Coupon No. 2—October
I, lp44—$20. on $1,000. and $10. on

BALANCED

The

dividend

$500.

Bonds.

the

public from 10

this

war

THE

March

New
New

Stock

•

a.m.

York

Curb

Chicago
New

Orleans
And

Board
Cotton

other

■;

Inc."; :

Trade

Exchange

Exchanges

output show
man¬

committees

Merchants

Distilling Corporation and Stand¬
ard Silica Corporation offer in¬

South

208

the

New

York

Exchange Bldg,

NEW YORK 4, N.

111., members of
:

Stock

DETROIT

PITTSBURGH

GENEVA, SWITZERLAND
%

Board

No.

Boston

CORPORATION

Directors

the

principal

had; from the firm upon re-

11, 1944.

per

Stoek, 5% Series

MARGAY

60, quarterly, $1.25

per

£: No. 49, quarterly, $1.25

•

«rqr->,

payable

May

15,

-v'

per

1944, to holders of

record at close of business

April 20. 1944.

Dale Parker
March 2, 1944

y... •.

.Secretary

E. D. OLDENBURG, Treasurer.

Tulsa, Okla-om..,

...

x-';:XX;
LOUISVILLE

The

March

Board

»•••

Directors

1914.

this

Company,
at a-meetmg
held this day, declared an in¬
terim
dividend
for
the first quarter of
1944,
of
Plxt^-five
On's
(SO.65)
a
share on
the
outstanding
capital
stock
of
this
Company,
payable on March 25th, 1944, to stockholders
record

;V"

the

1944. ; ti

business

March

WILLIAM

LANGLEY, Treasurer.

ILLINOIS

Board

March

dividend

NO. ' 366

DIVIDEND

The

COMPANY

;

iiltowxc

anu

heid

New;York,

ELECTRIC

AND

of
Directors
of
Louisville Gas
Company (Delaware) at a meeting
3,
1944, declared a quarterly
thirty-seven
and
one-half
cents
(37y2c)
per
share on
the Class A Common
Stock of the Company, for the quarter ending
fcbiuary 29, 1944, payable by check March 25,
1914, to stockholders of record as of the close
of business March 15, 19**.
■
" ■ <
■;
At the same meeting a dividend of twentyfive cents (25c) per share was declared on the
OVl's B Common Stock of the Company, for
the quarter ending February 29,
1944, oayable
b"
e'-i-ck
25.
1944,
to stockholders of
record as of the close of, business March
15. •

Mining Company
Broadway,

V'.V-.

OFFICE OF

•

GAS

CHICAGO

New York & Honduras Rosario

exchanges*

memoranda; may

Copies of

"'a*-* o*

holders

5% Cumulative Preference Stoek
the

CORPORATION has this day declared a
of twenty-five cents a share on the
outstanding stock of
the corporation of the
issue of 160,000 shares provided by amendment
to the certificate of incorporation of April 27.
1926, payable April 10, 1944, to stockholders of
record

70, quarterly, $1.50

No.

Cumulative 6% Preferred Stock, Series A

dividend

120

and1 other

1944.

Cumulative Preferred

Exchange

accelerated

output

war

sup¬

plies. Many of the myriad items
of equipment will be shown, and
manner in which some of it is

the

used in warfare.
In addition to exhibits by

1944.

KNOUREK.

Treasurer..

AMERICAN LOCOMOTIVE COMPANY

ican labor and

These will show the assistance of¬

a glimpse Health Service, War Food Admin¬
front in action— istration, National Housing Agency

—

and the Office of War Information.

'■

industry in backing

America'? fighting forces."
officials

described

the

of this war Output show
intended to focus attention on

the need for achieving

American industry at war.
Numerous
American

purpose
as

New York 8, N. Y.

30 Church Street

PREFERRED DIVIDEND NO* 143
There has been
a

dividend^of

shares of this

declared, for the quarter

year

ending March 31, 1944,

dollar seventy five cents ($1.75) per share upon the
Company's Preferred Stock (authorized by the Certificate
one

of Consolidation of American

Locomotive Company, American Loco¬

motive Salfes

Corporatiop ^ aiid Transamerican Construction Company
Secretary of State of the State of New York on
September 3, 1943) issued and outstanding, payable on April 1, 1944,
filed in the Office of the

shares thereof held of record

the close of business

March

17, 1944, to the holders of record thereof at that time, and payable

WPB

"As a sign of the powerful drive

WPB
CHICAGO

;$f

1944.

per

April 3,

record at close of business March

Salle

personnel

of the determined effort of Amer¬

N. Y. Cotton

payable

OIL

stock

Common

The exposition was planned to
making to in¬ tell graphically the story of sus¬
crease
war
production in 1944, tained output due to the united
outstanding war plants are co- attack by workers and manage¬
operating with the Government in mentr'on
production
problems,
presenting the National Labor- WPB said. Examples of ingenious
Management Exposition.
The labor-saving and safety sugges¬
methods and results of industrial tions received
by the thousands
teamwork vividly displayed at the from workers were displayed in
exposition- are splendid evidence this view behind the scenes of
;

•

crose

Federal St..

OIL

all of said shares which shall

business

of record

be held of record at the close of

not

March 17, 1944, to those who shall first become the holders

of record thereof
or

the date

which they shall become such holders

April 1, 1944, whichever shall he the later date.
COMMON DIVIDEND NO

the

Mr. Nelson said:

Exchange

the

are

Government

Exchange

Exchange,

No, 40, 10c

per

1944 to share¬
at

17,

DIVIDEND NO.

which the nation is

Cotton

Commodity

are

plants

;

Exchange

March

1944

The

participating as fered -to labor-management com¬
exposition, ar¬ mittees through WPB's War Pro¬
ranged through WPB's War Pro¬ duction Drive. The agencies are
duction
Drive, of which T. K. the War, Navy and Treasury De¬
partments, Maritime Commission,
Quinn is Director-General.
In his invitation to the four pre¬ War Manpower Commission, Of¬
views—designed to afford ranking fice of Civilian Defense,. Public

Members

■

York

record

Common Stock

BOARD.

Attractive Situations

of the production

New

business

National Labor-Management

exhibitors

;

has
following dividends:

this day the

JARED INGERSOLL,

CHAIRMAN

starting Feb. 27, it was announced by WPB.
Donald M. Nelson,
Chairman, invited Government, military, war agency, diplo¬

cents

March 25,

holders

cooperating in more
4,000 war plants to keep sup- and the Department of Commerce,
plies rolling to battle lines on land several Government agencies also
and sea.
-* •
„■ have
displays at the exposition.

H. Hentz & Co.

.The Board of Directors

declared
declared

WPB

Labor-management

:.yy

have

payable
•

than

1856

FUND

Trustees

agement

Established

ELECTRIC

$500.

and management teamwork for war production were
Washington at an exposition under sponsorship of the
War Production Board opening with four special evening previews

hailed

will illustrate how labor and

CORPORATION

—

daily1 ihcluding Sunday.
Movies, dioramas and dramatic

COLUMBIA

~""~r~Labor

exhibits

DIgby 4-2727

Borden Company

X .WALTER H. REBMAN, Secretary

CAS

surrendered:

coupons

p.m.

Exports—Impqrts-—Futures

also $1.25

1944;

be closed.

the close of business

NEW YORK 5, N. Y.

SUGAR

10,

any

The stock transfer books will not j

W. F. RASKOB, Secretary

.STREET?!

ing

20%- more

;

meeting, notwithstand'
subsequent transfers of stock.

amounts

said

vote

share, as the
first ''interim" dividend for 1944, on the out¬
standing Common Stock, payable- March 14,
1944, to stockholders of record at the close of
business on February 28, 1944.
«,

matic, industry and labor officials to advance showings of the first
Pro-^
^
mjm
duction Exposition, seconded by production in 1944, and the part
good news and that the mar¬ Jesse H. Jones, Secretary of Com¬ labor-management committees are
ket, having re-established an merce, host to the exposition in playing and will continue to play
uptrend,
will
continue ■ to the Department of Commerce Au¬ in helping to meet this goal.
They also emphasized the op¬
ditorium, 14th Street between E
Street and ; Constitution Avenue
portunity given by the occasion
From Friday, March 3, through for paying tribute to the produc¬
Saturday, IVlarch 11, the exposi¬ tion committees that have saved
LAMBORN & CO.
tion was arranged to be open free millions of man-hours and greatly

what

& Company

stockholders of record

has

upper

Only stockholders of record at the
of business, on Tuesday,
March 21, 1944, will be entitled to

Nemours

The Board of Directors has declared this
day a
dividend of $1.12}4 a share on the outstanding
Preferred Stock, payable April 25, 1944, to

As this is

through the
ivolume, you

Avenue,

Wilmington, Delaware: February 21, 1944

■"

AND

BONDS

Philadelphia, Pa,
February 29, 1944
ascertained, de¬
termined
and
declared
from the earnings
of
tho year ended December 31, 1943, 4% interest
on the Series
"A" Adjustment Mortgage Bonds,
and i'/o interest on the Series "B" Adjustment
Mortgage Bonds, 2% payable April 1, 1944 and
1944, as provided in
2%
payable October 1,
Section 4 of the Supplemental Indenture dated
April 1, 1943.
On
and
after
the
interest
payment dates
given, the Fidelity-Philadelphia Trust Company,
Philadelphia,
Pa.,
will
pay
the
following
of

(Eastern War Time) at 43 Park
Flemington,
Hunterdon

a.m.

1944

Board

E, I. du Pont

mm
1,

:;w:

MORTGAGE

1944,

RAIL¬

ADJUSTMENT

Street, Chicago,

Whyte

views

[The

article

1944.

R. A. BURGER, Secretary;

;

Wednesday, April 19,
at eleven o'clock

on
«°

Transfer
Checks will be mailed.

meeting

County, New Jersey.

ROAD COMPANY
Interest

Brothers,

—Walter

time

16,

FINANCIAL NOTICE

being silent. Shc^ld the mar^
ket suddenly begin bulging to

March

Books will remain open.

stop 31.
United Air Lines, teresting possibilities according to
buy between 23 and 24; stop memoranda
issued
by
Faroll

being written the
industrials are approximately
■137,. with the news front
:

business

;

15th,
<

annual

stockholders will be held

Preferred Stock of this Company, payable
April 1, 1944, to Stockholders of record at the

the

MARGAY

More next

STOCK

quarterly dividend of
declared on

per cent was

the

Vice President and Secretary.

MIDLAND

Annual Meeting
The

February 1, 1944,
and three-quarters

one

Ccm/iant/

COMPANY
«Mj..

will
at

CAN

trading day of 750,000 shares,
American Car & Foundry,
first step-up to about
buy between 33 and 34; stop
a 1,200,000
day would be the 33. J. I. Case, buy at 32; stop
signal for the direction.
at 31.
Kroger, buy at 32;
'•!»

the

payment of this dividend
all
stockholders of record

V: C.

NOTICES

The'lBotdMi

AMERICAN

addresses as they appear on the books of the
Company unless otherwise instructed in writing.

Applying the above to spe¬

:<*'

such

continuance

•-/

':vVy=.

-./'/• >'y

Checks

Tho

5§€
y.%

•

•.

dividend* of Two Dollars ($2.0J) per snare
1,298,200 shares of Common atocs of Soutnern
Railway Company, without par value, has
today been declared, out of the surplus of net
profits of the Company for the fisca. year ended
December 31, 1943, payable on Saturday, April 1,
1944, to stockholders of record at tne close oj
business Saturday, March 11,
1944.
A

actu¬

But if the
about 55of the previous 134 level is broken, on vol¬
decline.
This
leaves
that ume, then disregard general
group about 45% more to go news interpretations and fol¬
for it to stand up alongside low the market.
ally

DIVIDEND

RAILWAY COMPANY
New York, February 29, 1944.

simultaneously

comes

NOTICES

SOUTHERN

announced news, assum¬

ever,

industrials got up ing it

the

DIVIDEND

DIVIDEND NOTICES
X

1013

labor

organizations,
of Labor,

Federation

Congress of Industrial Organiza¬
tions and independent, are repre¬
sented on many of the committees

that are exhibiting.

There has been declared

dividend of twenty five cents

(25^)

per

the shares of this Company's Common Stock issued and out¬
standing, payable on April 1, 1944, as to shares thereof held of Record
at the close of business on March 17, 1944, to the holders of record

upon

thereof

that time,

be held of record

and payable

as to

all of said shares which shall not

tlie close of business

March 17, 1944, to those

who shall first become the holders of record thereof

surrender'by them of (a) certificates expressed
the Preferred Stock of this

ately prior

Locomotive

Sales Corporation,

american Construction

effected

the later date.

were

outstanding immedi¬

of this Company, American

Delaware corporation, which

the date

on
on

he closed.

by the Bankers Trust Company

was

which they shall be¬

April 1, 1944, whichever shall he
'

not

of the

shares of

(b) scrip certificates in respect of

Transfer hooks will

february 24,1944

Company

such holders of record

merger

reason

New York corporation, and Trans-

Company,

September 3, 1943

Common Stock of this
come

Company that

the consolidation and

to represent

Dividend checks will he mailed

March 31, 1944.

Carl A. Sundberc, Secretary

!»*'.'<lty «VW tj< (.,f *'n

\>r

•

■,

•

regis¬

94,439

for

statement

tration

filed

common

shares, without par value.
Address—Fourteenth Street and Sheridan

vitamin

chemical, biological and

medicinal,

products.
Underwriting—The names of the under¬
writers and the percentages of the unsub¬
scribed common shares -to be purchased by
each of them, are as follows: A. G. Becker
Inc., 50%; F. S. Moseley & Co., and
&
Co., 25%
each, all firms of

& Co,,

Shields

Chicago.

debentures at

Offering—The 94,439 shares are being
by the company to the holders of
its common shares, for subscription at $45
a share, at the rate of one share for each
eight common shares held of record at the
close of business on Feb. 17, 1944.
Sub¬

cumulative

seven days.
dates, unless otherwise specified, are as
PM. Eastern War Time as per rule 930 (b).
Offerings will rarely be made before the {day

The shares
the

City.

Schaffner & Marx
statement with
Commission
shares of common stock, par
share.
Of shares registered
be later specified, all issued
registration

Exchange

net

of the

funds

eral

18,
the

6, 111.

sale at wholesale of the
better grades of men's suits overcoats and
topcoats, including, in recent years, mili¬
tary
uniforms, and, to a small extent,
"women's suits and coats, ■

Underwriting—Blyth & Co., Inc., heads
group of underwriters, the names of
others to be filed by amendment.
Offering — The
presently
outstanding
common stock
is to be changed from $20

mined

value to $10 par value and 2Vz shares
issued for each present share,
which
will increase
outstanding common
stock
from
142,313
shares to 355,782 Vz
par

of the new shares are
to, be acquired by the underwriters from
certain
stockholders
and offered to the
shares,

portion

public at a price to be set by amendment.
The shares being sold are a portion of the

members of the Hart,
principally.
Proceeds—The proceeds from sale of the
certain

holdings

and Marx families

Schaffner

selling stockholders.
Price
to be named by

stock go to the
to

stockholders is

selling

amendment. v,:;

Registration Statement No. 2-5309. Form
A-2.

(2-25-44).

THURSDAY, MARCH 16
MORTGAGE CO.
State Bond and Mortgage Co.. has regis¬
tered
accumulative
savings
certificates
Series 1207-A $1,000,000, and accumulative
savings
certificates
Series
1217-A $4,STATE

AND

BOND

000,000.
Address—26Va
New

North

Minn.

Ulm,

Street,

Minnesota

incorporation

its

Business —Since

actively and
business of
issuing and selling face amount certificates.
the company has been
continuously engaged in the

1914,

Investment

company. '

■

Underwriting—Will be sold by the com¬
pany's own sales
is

organization.

85.68.

filed

has

100,000

value $5

per

Pa.

CO., INC.
Inc., filed a reg¬
for $7,500,000 33,4%

UNIVERSAL PICTURES
Universal
istration

Pictures Co.,

statement

debentures,

fund

sinking

March

due

1959.

Sixth

Address—1250

York

New

Avenue,

City, and Universal City, Cal.
Business—Engaged in the production

motion pictures.

Underwriting—Dillon,
the

group

others

Read & Co., head

underwriters.

will be supplied

Names

by amendment.

Offering—Price to the public will be
supplied by amendment.
Proceeds—Net proceeds will be applied

Traders

that the
now in

The

Boston

following

members

are

the armed forces:
Warren

;

•

;

Donovan, Lt. Nich¬

olas Lamont,

Lt.

Gilbert M. Lothrop,
Arthur D. Noble, Arthur H.

Reilly, Robert S. Weeks, Jr.
A

total

Association

are

members
now

vice.

the

ser¬

306,305

READING,
/

St.,

ganize

virtually,

casualty

line

offering

holders

reported.
100,000 shares of capital
stock are being offered by the company at
$11 per share to stockholders on the basis
of one-half of a new share for each share
held.
The new stock will be offered to
stockholders
of
record
March 10,
1944.
The
stock purchase warrants
are
to be
exercisable for a period of 30 days after
issuance, but, at all events, until at least
April 20, 1944.
Proceeds
Proceeds
to
company
from
Underwriting—None

Offering—The

—

is $1,100,000.
The pur¬
financing is to increase the
surplus of fhe company to
enable It to,
(1) meet the' capital require¬
ments for admission to transact business
in all of the states and territories of the
United States;
(2) organize or acquire a
stock fire insurance company, and (3) re¬
tain a larger portion of its business with¬
out resorting to reinsurance.
:, Registration Statement No. 2-5308. Form
S-l.
(2-18-44). :"'v;
v;,C
.
Amendment filed March 1, 1944, to defer
proposed offering
of the
capital and

pose

is limited to stock¬
July 15, 1943.
If

subscribed, cash proceeds from the
$150,000.
«proceeds will be
dis¬

fully

will be

issue

Proceeds—Cash

of general
indebtedness,
$40,000;
operating capital,
$5,000; general cash reserve, $60,000; re¬
serve
for property acquisitions, etc., $45,000.
Price per qnit for securities to be

bursed

follows:' liquidation

for

offered

cash

with

$1.60,

under¬

and commissions.
Registration Statement No. 2-5268.
Form
S-l.
(12-7-43.)
Statement originally filed
writing

discounts

Amendment filed Feb.

19, 1944, to defer

CERTAIN-TEED PRODUCTS CORPORA¬
TION

Certain-teed
a

300

Corporation

Products

has

statement for $6,737,income
debentures

registration

cumulative

(subordinated) to be due Oct/ 31, 1973;
134,746 shares of common stock, $1 par
and certificates of deposit for 67,373 shares of 6% cumulative prior prefer¬
value,

stock.

therefrom.

•

Underwriting—Offering
will
be
made
to the public by the company, and
to brokers and dealers for their own ac¬

direct

selling

agents

Co. has filed a regis¬
relating to the offering
extension of first mortgage serial

Offering—Offering
consists
of
50,000
a
unit consisting of a production
in the face amount of $10 and 20
shares
of
common
stock, price per unit
units,

note

$10, lawful money of the United States

for

the

secured by a
mortgage
deed
of
trust
on
the
Ranelagh
Apartments,
5707
McPherson
Avenue, St, Louis, Mo., in the aggregate
principal amount of $240,750.
Address—5707
McPherson
Avenue,
St.
of Housam

Realty Co.,

development, purchase of

Proceeds—For

building.
Amer¬
ican Realty Co. was incorporated July 21,
1943, to acquire and own the equity in
the Ranelagh
Apartments subject to the
first mortgage deed of trust, securing the
outstanding and unpaid mortgage serial
notes of the par value of $'267,000 which,
by the plan of reorganization, are to be
reduced by 10% to $240,750 of par value,
and on outstanding second deed of trust
on
which there is an unpaid balance of
$40,500.

amount

all

the

outstanding

notes

reduction of
aggregate first mortgage in¬

leaving,

10%,

after

such

principal, an
debtedness of $240,750.

statement

Form

withdrawn Feb.

22,

PRODUCTS, INC.

Ben-Hur

registration
convertible

Feb.

products,

statement
debentures,

1951,

and

related products, wallboard
products, boxboard and vari¬

products.

Underwriting—Paul
H.
Davis
&
Co.,
Chicago, is named principal underwriter,
or
dealer manager and company will pay
to
selected .dealers a commission for the

preference stock pur¬

suant

offer

exchange.

Offering—The
company
offers to the
holders of the outstanding 67,373 shares of
cumulative

its
the
new

mon

preference

prior

stock

amount

the

basis

income

common

Inc.,-

for

has

filed

$300,000

series of

1943, due

11,400 prior preferred

$100

debentures

stock

Sept.

24,

indicates

1943

have been amended
A production notes,
stock
1
centavo par
value, $300,000 to be offered in units of
$10 principal amount of notes and 20 shs.
of common stock (or 15,000 units) at $10
per unit,
for an aggregate offering price
of $150,000, 7% series B production notes
$100,000 and common stock $200,000 to be
offered in units of $10 of notes and 20
shares of stock (or 10,000 units) at $10
per unit for an aggregate of $100,000.

should

data

series

read:

common

5:30

effective

Registration
statement
EWT on Nov; 3, 1943.

\
GAS

CONSOLIDATED

CO.

two

cumulative prior preference stock. The

states
that
the
company
proposes,
under certain condi¬
tions, to issue to the holders of the 625,340
statement

registration

stock

common

presently

out¬

stock purchase warrants
in the aggregate to
purchase, at a price to be announced later,
208,446 additional shares of common, and

standing,

common

entitling

the

issue

and

holders

sell

such

common

warrant holders.
under certain
conditions,
to
issue and sell $5,500,000
principal amount of new serior debentures
and to apply the proceeds of the sale of
the new senior debentures, together with
other funds, to the redemption of the out¬
standing debentures.
There are $7,100,000
face amount of 20-year 5 xk % sinking fund
gold debentures, Series A, due March 1,
1948, now outstanding.
The interest rate
The

company

also

proposes,

for

statement

registration

Address—415

commercial opera¬
of the war.,

for

available

termination

the

before

tions

flying and other equipment
becomes
available,
the
company
must
be
in
a
position
promptly
to
place
orders
sufficient
for
its
needs.
In
additional

carrying out the program, (he company;
may
find it necessary to provide addi¬
tional funds through the sale of addition***

borrowings, the issuance
trust certificates, or other
although the company has no"
present plans for any such other financ¬

securities,
of

bank

equipment

financing,
ing.

Registration Statement No. 2-5279.

Forrav

(12-23-43.)

A-2.

1944, to defer

Amendment filed March 3,

effective date.
OIL VENTURES

Clifford St.,

Detroit, Mich.

in the natural and
business in Michigan.

Oil

gas

Ventures

CORPORATION
has registered

Corporation

capital stock, with¬
paid and non-as¬

fully

value,

par

sessable.

Address—19-21 Dover Green, Dover, Del.

Business—Organized under the laws of
on April 27,
1943, for the pur-

Delaware

engaging either alone orvwith
any phase of the oil business.
*
Offering—Price to the public is $100 per

pose
of
others in

share.-

;Vv--;

Underwriting—Tellier 8s Co., New York,)
underwriter.
■.
Proceeds—To be
applied and used for)
any of the proper corporate purposes as
its
board
of
directors
may
determine.?'
Statement says it is the purpose and ob-:
jective of the management to be, free at
all times to take advantage of any condi-;
tion or set of circumstances which, in its.
opinion, offers opportunity for profit to
the corporation.
.
i ;
Registration Statement No. 2-5155. Form
S-2.
(6-18-43).
'
^
Registration
statement
effective but
apparently defective 5:30 p.m. EWT. on

is principal

1943.
Registration statement

July 15,

Business—Engaged
manufactured

1944.

withdrawn Jan. 6,
fj.

„

tered

•

v'.V-

OKLAHOMA NATURAL

amendment.

-5. .>•>' /•

xV'"-.VK'a

Underwriting—Securities are to be of¬
fered for sale at competitive bidding and
names of underwriters will be supplied by

Offering—Prices

the

public

will

supplied by post-effective amendment.
intends to use the
sale of the bonds and

Proceeds—Company

principal
and

for each share of

routes and

out

(6-11-43).

Amendment

stock

right to exchange such shares for the
income debentures and shares of com¬

stock not taken up by the

Registration Statement No. 2-5282.
S-l.
(12-30-43.)
Registration
1944.

and

gypsum

other

ous

hangars,

present

S-3

$38,000,000
first
mortgage bonds,
3%%
series due
1968, and 40,000 shares 4%% cumulative
preferred stock, par $100 per share.

and

its

3,000 shares of Class A

Michigan Consolidated Gas Co. has filed

shingles

with

tion

equipment, etc, \
Registration Statement No. 2-5151. Form

generally of

deposit of shares of

Louis, Mo.
^
Business—Apartment

manufacturing and selling asphalt roofing,

Business—Business

the purchase of
facilities in connec¬
such new
routes
as
may
hereafter be acquired or.
participated in by the company.
It is
probable, although not certain, that addi¬
tional
flying and other equipment may
of

machinery and other

America,

MICHIGAN

consists

the com¬

pany.

p.m.

111.

cago,

CO.

REALTY

Realty

statement

and oppor¬

expected funds will be used,
of additional flying,'
other equipment, the.

It is

become

under the laws of
Mexico on Oct. 23, 1942, for the purpose
of engaging in the business of acquiring,
exploring, developing and operating min¬
ing properties in Mexico,- and the milling
and
marketing of ores and concentrates

Address—120 South LaSalle Street, Chi¬
AMERICAN

Building,

National

Ariz.
.
Business—Organized

$150,000,

effective date.

filed

of America../,

Valley

Address—406

the

lawful money

$500,000,

notes

production

and

sum

responsibilities

future

the

construction

1,000,000 com¬

Tucson,

counts

that the company at this time
itself with funds with which to

its

tunities.

Victoria, S. A. has filed &

statement for

mon

aggregate

offering

San Francisco.

ence

date,

cash

for

record

unsecured notes.

of its 8%

holders

and
The

com¬

Conducts a general casualty insur¬
business.

ance

preferred stock

poration's outstanding 6%

DE LA VICTORIA, S. A.

registration

of the United States

offering are limited to holders of the cor¬

Business—Multiple
pany.

BEN-HUR

the

common

for

by amendment.

acquisition
communications and

de la

Metales

Inc.,

;

provide
meet

(2-3-44).

MET ALES

has filed a regis¬
shares of
stock, par $1 per share.
Syndicate
Building,
1440

Oilfields,
statement

Business—Organized to drill and develop
held under a community

Offering—Purpose of present offering to
noteholders is to reduce the principal

Securities

1944.

oil, gas and mineral lease.
Underwriting—None named.

the

Association has reported

for

Broadway, Oakland, Cal.

Underwriting—None.

In the Armed Forces

S-2.

Reading,

-•

the working

be added to

sirable

Address—912

first

WEDNESDAY, MARCH 22

Proceeds—Will

Offering—The company plans to reor¬
its capital structure and put it
if not wholly, on
a
common
stock basis.
The exchange features of the

shares
share.
Washington

aggregate of 20,000 shares

$7 per share an

the selling

Co.
of
Reading,
registration statement
of capital stock, par

Address—607

notes

(2-26-44).

with net cash proceeds to the com¬
of $480,800 exclusive of a total of
$2,000 to be received by the company from
the proceeds of the sale to the underwriters
at ten cents per warrant share, of war¬
rants entitling the holders to purchase at
pany

of the company and be available
general corporate purposes, especially
the opening of additional stores.
Registration Statement No. 2-5300. Form

class

Casualty

American
Penna.,
for

tration

Registration Statement No. 2-5310. Form
A-2.

f-v

PENNA.

public is $7 per

the

Offering—Price
share,

for

Buttes

us.

AMERICAN CASUALTY CO. OF

American

investment.

Proceeds—For

are

amendment.

certain properties

effective

Offering—Offering price of Series 1207-A
94.08 to 96.60 and of Series 1217-A 83.30

of common stock.

tration

the

of new stock

Noel & Co.,
New
York,
are
named principal under¬
writer;
Other names will be supplied by

feUTTES OILFIELDS, INC.

unknown

are

suits, lin¬

coats,

apparel,

wearing

gerie, hosiery, hangbags, etc.
Underwriting—Van Alstyne,

March

list of Issues
whose registration statements were filed
twenty days or "more ago, but whose
offering dates have not been deter¬
below

present

sells

priced

be named

be named, of the company's
common
stock
will be given
pro
rata
rights to subscribe to an; aggregate of.
117,460
additional
shares
of
common
stock, in the ratio of one share for each,
two shares then held, at a price • to be
named
by amendment.
The subscription
warrants will expire at 3 p,m. von Jan..
15,
1944.
The underwriting group
will
purchase the unsubscribed shares and offer
them to the public at a price to be named
by amendment.
.J/ Proceeds—The
entire net proceeds will
be available for general corporate purposes
pending specific application of such funds/
and
it is expected
they will be invested
temporarily
in
securities of the United
States Government.
It is considered de¬

capital

Offering—Holders of record at a date in

Registration Statement No. 2-5245. Form
A-2.
(10-29-43).
Amendment to defer effective date filed

OF OFFERING
UNDETERMINED

•

Eighth Avenue,

stockholders.

2-5311. Form

DATES

the

principally

Business—Consists
manufacture and

and

Proceeds—Proceeds will go to

Franklin Street, Chi¬

Address—36 South

outstanding

St.

prosecution of the war.
Underwriting—Auchincloss,
Parker
Si
head
the
underwriting
group.,

Others will

preferred and 20,000 shares of com¬
The shares are presently is¬

and

80,000

January,

ganization.

company.

Registration Statement No.
A-2. (3-3-44).

stock¬

35,565

* "

Avenue,

in air transportation
with respect to persons, property and mail,,
and in the performance of contracts with
the United States in connection with th«-

of 26 retail
six southeastern states in which
women's
and
misses'
popular

being pur¬
chased
by the underwriters from Atlas
Corporation and its subsidiary Rotary Elec¬
tric Steel Co.
Atlas Corporation, directly
and
indirectly, has been the controlling
stockholder of the company since its or¬

5% convertible deben¬
due April 1, 1950.
Any remainder
proceeds will be added to the gen¬

tures,

the

'
University

Address—1885

Paul 4, Minn.

stores .in

stock.

sued

company's ten-year

value $10 per
a number to
and outstand¬

holders.

1944,

on or

at 102 on or about April
$1,983,000 face amount of

demption

has filed a
the Securities
for
120,000

certain

for

sold

are

cago

offers

options.
*

City.
Business—Operates a chain

the preferred and common stock.
Offering—The offering price to the pub¬
lic
of
both
the
preferred and common
stock will be supplied by amendment.
The

mon

Redpath

both

follow¬

value,

par

will be offered' to'
present
common* stock¬

117,460

company's

New York

Co., New York
underwriter for

City,

filed

139,460

without

holders and the balance to be issued under

stock, par value $1 per

common

Address—519

the-

CORP.

Corp. has registered

Diana Stores

of the
the

which

share.

stores
;

Underwriting—Allen &
is named principal

of 4:30

about March 18,
1944,
of $5,035,000 principal
amount of
secured notes outstanding and to the re¬

SCHAFFNER & MARX

specialty

large

to offer, the sura
from capital sur¬
ac¬

stock,

for

Business—Engaged

DIANA STORES

Business—Owns and operates one

deducted

Inc.,

statement

common

INC.
has

AIRLINES,
Airlines,

Northwest

registration

effective date.

and

b:~

United States.

prospectus

Hart,

ing,

effective date.

Registration Statement No. 2-5241. Form
(10-27-43).
22, 1944, to defer

shares of

;

outstanding

5%%

and

;

1944, to defer

filed Jan. 24,

NORTHWEST

Amendment filed Feb.

York

New

Avenue,

Form

(1-8-44.)

Amendment

S-l.

offering does not represent new financ¬
Fifth

S-l.

account and credited to capital
count represented by such share.

common

issued and outstanding

are

Address—721

ing.

IIART,

issued pursuant

will

plus

ing by the company.

effective in

the prepayment,

reserved
for issuance upon the conversion of the
5 % %
cumulative
convertible
preferred
stock registered,
at the present rate of
conversion, which may vary from time to
time in the event of certain contingencies.
88,913

after ef-i

possible

date

Registration Statement No, 2-5288.

to the company
and shares oi
consist of shares

and

common

preferred stock, $50

value, and 108,913 shares of common
stock, par $1 per share.
The latter in¬

par

grouped according to the dates on which the registra¬
tion statements will in normal course become effective, that
is twenty days after filing (unless accelerated at the dis¬
cretion of the SEC), except in the case of the securities of
certain foreign public authorities which normally become
These

for

convertible

soon

registration statement.
vr
exchange of
new
bonds
for the $564,000 face amount of the pres-*
ent bonds outstanding.
!
-

the

Inc., has filed a registra¬
35,565 shares of 5%%

Teller,

statement

V//,,;-

such

retired

TELLER, INC.

Bonwit
tion

stock offered will

Kansas

Purpose—For

preference -stock exchanged and
shares of preference stock will be
the capital of the company
will be reduced by the sum of $100 for
each
share
retired.
For each share of

date.

BONWIT

debentures

income

the

all

effective

are

Proceeds—The proceeds

Offering—As

■

fective

stockholders

common

2, 1944, to defer

Mortgage Co.,

clared effective bv the company.
of

Amendment filed March

WEDNESDAY, MARCH 15

and

loans

Street,

Tenth

West

Mo.

Business—Apartment building.
.
Underwriting — Arthur
Fels
Bond
&
Kansas City, Mo., is named
agent to make exchange.
1
.

stock

stock not subscribed for by
and the issue and
sale of the new senior debentures is con¬
tingent upon the exchange offer being de¬

filed in San Francisco.

list of issues whose registration statefiled less than twenty days ago. These issues

ments were

bank

retire

preference stock

the

common

100.

annum.Address—15

per

City,

common

any

Proceeds—To

The company reserves the right
the
offer of exchange unless
certain date holders of not less

offer.
The. proposal to issue
purchase warrants to pres¬
ent common stockholders and the procure¬
ment of a commitment for the purchase of

total amount of

or a

pubic,

of the

other indebtedness

57,250 shares of the

than

common

working capital.
Registration Statement No. 2-5273.
Form
S-l.
(12-20-43.)
Statement
originally

cludes

Following is

92V2%,

Offering—Price

Los

6277.500.

Registration
statement
effective 5:30
p.m. EWT on Feb. 16, 1944.
■
More than 97%
of the 94,439 shares of
common stock was subscribed for bv stock¬
holders.
The remaining 2,262 shares were
distributed by the underwriting group.

offered

(1-31-44),

S-l.

■

within

of Cali¬

Co,,., both

revoke

Angeles,
are
named
underwriters,
each
having agreed to purchase $150,000 of the

liabilities,
and to increase bank balances.
Some of
the funds may be used at some future time
to provide for expansion of the company's
manufacturing facilities.
One of the pur¬
poses of this financing is to provide the
company with funds with which to meet
post-war opportunities which may present
themselves for the expansion of the com¬
pany's business.
'
" <
Registration Statement No. 2-5296. Form
and

Road, North Chicago, 111,
Business—-Engaged in the manufacture,
distribution and sale of pharmaceutical,

Wyeth

and

company.

The income'debentures
the new serior de¬

annum.

per

bentures

Netherlands Hotel Corp.

be subordinated to

will

spices.
Underwriting—Pacific Company

fornia,

4Va%

AND AR¬
MORTGAGE CO.*
and Arthur Fels
Bond
&
Mortgage
Co.
have registered
6564,000
10-year
income bonds,
bearing
interest at the rate of not exceeding 3%.v
BOND

FELS

THUR

CORP.

HOTEL

NETHERLANDS

been

not . exceed

will

but

determined,

finally

and

receivables

be used to carry additional
inventories, to pay current

may

tea,

coffee,

Avenue,. Los

senior debentures has not

of the new

business of proc¬
marketing
at
wholesale
oi
extracts,
prepared
mustard

and

essing

March 1, 1944.
Proceeds—Will be available for general
corporate purposes pending specific alloca¬
tion of such funds.
Some of the funds
and will expire at 3 p.m. on

has

Laboratories

Abbott

Traction

Address—800-812

Angeles, Cal.
Business—Engaged

warrants will be exerciseable be¬
ginning Feb. 18, 1944, will be transferable
scription

ABBOTT LABORATORIES

such con¬
v\y

purposes

version.

Calendar Of New Security Flotations
OFFERINGS

the

for

shares,

„Thursday, March 9, 1944,

FINANCIAL CHRONICLE

THE COMMERCIAL &

1014

from

proceeds

the

stock .together with a por¬
tion
of
the
proceeds from the sale of
idditional
shares
of
common
stock,
to
the

preferred

redeem

entire

issue

series

due

amount

tire

before
first

Jan.

20,

mortgage

1944,
bonds,

the
4%
face

1963, outstanding in the
$36,000,000; to redeem the en¬
4% serial notes, due Aug. 1,

issue

amount
March 1,
1944, at $110 per share, the entire issue
of its 6% preferred stock, par $100 per
share,
of which 20,000 shares are out¬
1944-48,

outstanding

in' the

face

$4,150,000, and to redeem on

standing.

Registration Statement No. 2-5252.
(11-13-43).

Amendment filed Jan.

Natural

$18,000,000
first mortgage
April 1, 1961, and 180,000

series due

Form

22,

1944, to defer

date.

Registration "statement effective under
notice of deficiency 5:30 p.m. EWT on Feb.
10, 1944.

regis-",

bonds
shares

(

preferred stock, Series A, cumulative,
par value $50 per share.
Address — 624
South
Boston
Avenue,

Tulsa, Okla.

Business—Operating

gaged

producing,

public

utility

en¬

purchasing and dis¬

tributing natural gas.

Underwriting—Names to

;

■v.'-.;

be supplied by

post-effective amendment.
v;V',,v.> -v?v. Offering—The bonds and new preferred
stock are to be offered for sale subject to
competitive bidding requirements of the
The
successful bidder will
interest rate on the bonds and divi¬
dend rate on the preferred stock.
Offer¬

the

Commission.

name

ing
be

prices of both bonds and stock will
supplied by post-effective amendment.

Proceeds—Net

S-l.

effective

■.Oklahoma

GAS CO.
Gas Co. has

proceeds,

together

with

up to $6,500,000
required, and obtained from
the proceeds of a new bank loan will be
applied to redemption purposes as follows:

such
as

additional amounts

may

$16,500,000 face
bonds, Series B,
at

104Ms

and

amount of first mortgage

3%%, due Aug. 1, 1955.
$3,678,000 face amount of

Volume 159

J first

THE. COMMERCIAL

Number 4262

mortgage, bonds,

Series

due

value

par

; April 1,

ferred

tion

prior

58,000

$5.50: convertible

fBhare

840.

The

amendment states: "These purchase agree¬
ments expired on Feb. 16, 1942.
The corporation intends to continue negotiation#

bonds

amount

$100

for

par

to. the

will be called in

$5,875

sold

by the registrant and retired..
■:/;>'" •
Registration Statement No, 2-5274.
Form

preferred stock at $110 per share or

$6,380,000 and redemption of .91,055 shares
of $3 preferred stock, $50 par, at $55 per
.

stock

the

The balance Of the pre¬
the registrant outstanding

preferred stock.

1956, at 104 y4, totd! $21,076,815;
payment of $3,500,000 bank loan; redemp¬

(12-21-43.)

S-l.

•

efiective

25, 1944, to defer

date.

V.,. ';'.V'M;

A.■

$5.50

convertible prior
"additional sums, other

by the
will

eral

securities

new

required from

funds

will

and

purpose.

available

Southern

(2-7-44).

registrant has done no
business.
The business which the regis¬
trant intends to do is to engage in
the
Business—The

and

MUTUAL

23,

to defer

1944,

INSURANCE

LIFE

curities

to the

S-2.

registration

i Co.

of California.

AddressOf

Business—-Life

The

called

tion

with

plan

and

Registration Statement No. 2-5098. Form
F-I.

(2-19-43).

Amendment

Public Service Co. of Oklahoma has filed

statement for $1,500,000 5%
preferred stock, cumulative, par $100 per
share, and $6,600,000 first mortgage bonds,
South

Address—600

1, 1971.
Street,

bank

Main

Tulsa,

have

will

Bonds

for

exchange
for

offered

been

issued

$9.50

before

Dec.

the

15,

subsequent thereto and
15, 1944, the price will

be supplied by amendment.
Offering—The company is offering to
holders of 24,255 publicly held shares
of
$6 preferred,
without par value, of
Southwestern Light & Power Co., principal
subsidiary of Oklahoma, the right to ex¬
change, on a share for share basis, 15,000
number

5%' preferred
Subscriptions to

homa.
rata

rants

certificates
are

added

company

stock

purchase

exercised from time-to
to

the

and

working

will

A-2.

(10-14-43).

Registration
p.m.,

EWT,

'This list

Jan.

11,

extend

at ,$100

dividends,

per

10,000

and

December,

1943,

the

Securities

Union

holding

for

additional

■

5:30

drugs

is hit in battle, he

a man

the best of

expense

care.

No effort,

is spared to

our

save

wounded boys.

Main

But there

are some

wounds

drugs

can

heal...the wopnds that come

from

utlllt)

electric

'
Offering—Stockholders

fer

share in, units
for each 5/94ths of
mon

acquire
subject to the lia-

for

Gas

Electrli

...

the wounds that

come

from

will

25/94ths

receive
of

com

one

of 5/94ths of

shart

share held at $5.3/

unit.. On a share basis, stock
may: subscribe to 5 new sharer

(12-21-43.)

p.m.,

construction
A-2.

Service

Form

UNITED

Jan.

There

are no

drugs for wounds like

these—no drugs except a

Pa.,

Corp. registered $75,000,OQC
and collateral trust 3V»%

1958

Address—2 Rector Street, New York City

Business—Production and sale of natural
gas;

part of Electric Bond and Share Sys¬

tem

utility corporation,
is

Offering

Pipe & Supply

named

underwriter

bound

Terms—Bonds will be sold to
investors, whose names will
supplied by amendment, at 99.34%

institutional

underwriter,

not

Proceeds—To

redeem

Ser'vice

Public

Gas

$28,850,000 United

Debentures

due

1953; to pay 6%

demand note of $25,925,000 to Electric Bond and Share; to repay
$2,000,000 open account debt to E. B. & S.;
and to purchase from United Gas Pipe Line

$6,000,000

Co.,
bonds

due

1961.

its

1st
&
Coll.
4%
will be used In

Balance

registered.
The
however, of

part to reimburse treasury for capital ex¬
penditures and possibly to pay accumulated
dividends of $9,502,490
on
companys
$7

24,096 shares of the preferred stock of
.the registrant and has agreed to accept
at par the bonds registered in exchange

preferred stock
Registration Statement No. 2-4760, Form

take

all

for

securities

the

underwriter

registrant's

the

owner,

preferred

stock

which

A-2

(5-15-41)

United

owns.

SEC

securities are to be of¬
fered by the registrant in
exchange for
its outstanding preferred stock and by the

been

Purpose—The

exchange for its outstanding preferred

stock.

The basis in each case is one $100

panies

•

Gas

Feb.

unable

Chase

<■/ underwriter (Keystone Pipe & Supply Co.)
'in

other

states regarding

heal !

rest

homes will be found

every

from London to Calcutta. Its
reach the

prisoners of

war

front

packages
in

far-orf

straight from

your

the barbed wire

hearts...with fine

American food and real American

cigarettes and tobacco.
<">/•:-V

'■

\ \

"Thank God for the Red

Cross.... your bandages and your
.

touch.

Red

blood.

mother's

And that is where the Red Cross—

Yes, and

your

Red Gross homes in.

your money

tool

Mother in the World. All

earth—wherever

our

Corp. filed amendment with

21, 1942, stating that it had
to

further

agreements with

extend

the

pur-

insurance

com¬

the proposed private sale
to such insurance companies of $75,000,000
of the company's first mortgage and col¬
lateral trust 3Vi% bonds, due 1959.
This
covering

course^ you

have given generously

course

you

will give again.

For the Red Gross is still the Great¬
est

before. Of

over

fighting

this

men

—the Red Cross is with them. Its Club-

CORPORATION

uas

mortgage

wonds due

parent of registrant.
Offering—There
will
be
no
principal
underwriter,
but the bonds received by
the Keystone Pipe & Supply Co., parent of
registrant, will be offered to holders of
its preferred stock in exchange for same.
The basis of exchange is to be $100 par of
the bonds for $100 par value of preferred
The

withdrawn

Underwriters—None

Underwriting—-Keystone

stock.

statement

GAS

United
first

Texas.

Butler,

(3-30-40)

...

5:30

Corp.

Business—Public

Co.,

costs

Registration
29, 1944.

Registration Statement No. 2-4379. Form

of Texas' has filed
a
registration statement for $800,000 5%
25-year first mortgage bonds.
Address—Burk
Burnett
Building,
Fort

|=) ' Worth,

per

Gas & Electric Corp.
repay
current debt
an<3
first mortgage bonds held by
parent and associated companies, auu for

PUBLIC SERVICE CORP., OF TEXAS
Public

wounds

When you say

breaks and he feels he can't go on.

statement
effective
Jan. 10, 1944.

EWT, on

share held at $100,016

Proceeds—To

■

Registration

located

liability for payment of the tax.

heart

$2,835,000

homa from'the sale of the bonds of Series

'j subsidiary.'

can

mobiles stand at desert crossroads. Its

re¬

dispute

It between New Yorkers and those

subdivision to

worry...

the wound of missing you until his

Columbia

A, 3%%, due Dec. 1, 1969.
proceeds, to be received by Okla?

Registration Statement No. 2-5275.

of the sources of

each

holders

Series

A-2.

move one

No.

Cross" remember this... it is your

Underwriter— Columbia

A registered, together with general funds
i of the company, are- to be applied to the
redemption, at 105%, of such bonds of

The passage

: 'A;'.';''

Cincinnati

St.,

Operating

—

Corp.

the properties of
subject to $6,648,000 face
of the subsidiary's first mortgage

net

shipped with

of this amendment would thus

camps...get through

•V?;v;''•

for each

bonds,

Int.

some

are

jompany

subsidiary

The

(Senate

new

Substantially all outstanding stock is helc

•

loneliness, from being far from home
*v.'-V.;V-'i;

the

•

add

Form

tion. Oklahoma will acquire
.

•

gets
no

re¬

delivery against

Business

bilities of Southwestern at date of acquisi¬

• amount

are

payment of the draft.

the Bewley-

Sections 270 and 270-a of the State

There

trust

Light; Heat and Power Co. re
25,000 shares $100 par commoi

Address—4th

Oklahoma,

company

of Southwestern

assets
i

voting

Ohio

Ex?

Bill

(12-7-43.)

itock

change Commission, Oklahoma will, upon
the dissolution of Southwestern, principal

agreement

glstered

authorization

if the securities

1944.

UNION LIGHT, HEAT AND POWER COM
PANY

15,000

preferred,

Proceeds—Pursuant

would

Is'uvornolete this week>

HE N
offering

proposed

Registration
statement
effective
p.m. EWT on Feb. 18, 1944.

may be subscribed for pursuant to the
exchange offer.
No
underwriting
com¬
missions will be paid by the company in
connection with the exchange offer.
Of¬
fering price of bonds will be filed after
the result of competitive bidding by the
filing of a post-effective amendment.
;

agreement.
Registration Statement No. 2-5266.

5:30

accrued

said

899, Assembly Int. No. 1176).

CO.

trust
F-l.

less such number
of shares thereof in excess of 5,000 shares
shares of 5%

known

genera)

by a majority vote of the total num¬
ber of shares deposited under the voting

share and accrued dividends, 2,500 of
15,000 shares, less such number of
excess of 2,500 shares as
may
be subscribed for pursuant to the
exchange offer, and American Public Serv¬
ice Co. has agreed to purchase from Okla-

homa,

shipped into
delivery

Form

years

shares thereof in

I
j

PUBLISHING

establish

Purpose—To

said

"This is

agreement to be dated Dec. 27, 1943, and
run
to Dec. 26,
1953, with the right to

per
;

are

against

the Commission

with

Offering—Date

shares of Southwestern accept the
exchange offer.
Middle West Corp. has
agreed to purchase from Oklahoma at $100

the

2-5229. Form

effective

York

draft attached for

the competitive position of

New York securities dealers.

will

statement

securities

New

into

ceipt, but does not impose the tax,

Hollowell

Registration Statement No.

rates

The other bill also aims to im¬
prove

corporate purposes.

Underwriting—'None named.

15,000

for

lower

present

war¬

time

capital

used

the

The

Commission, imposes the tax

when

effect.

per

Proceeds—Net proceeds from the sale oi
stock
as
represented by voting

voting trust certificates is Dec. 27, 1943.

than

$10

common

trust

State.

Business—Newspaper publisher.

shares of Okla¬
be reduced pro

holders

the

case

York

interpreted by the State

Tax

that these will be en¬

before

registration
for voting
trust certificates for 28,000 shares of the
capital stock of the Times-Picayune Pub¬
lishing Co., par value $100 per share.
Address—Of
corporation,
615
North
Street, New Orleans* La.
'
v ■ 1

•

and

made entirely

law,

to again settle in New

couraged

was

the

25, 1944; to defer

have filed

trustees

Eleven

statement

will

shares of Southwestern for

1943,

is expected

are

delivery

outside

TIMES-PICAYUNE

com¬

the

such

other states in order to escape the
New York transfer taxes, and it

officers

seven

the

similar organizations have located
in
New
Jersey, Delaware and

and

efiective date.

petitive bidding and names of underwriters

issued,

and

tax

investment trusts and

number of

for
pur¬
such

share.

the purchase of supplies

$nd

Amendment filed Feb.

purposes.

sale

normal

materials.

(1-21-43.)

S-l.

purchasing,

(stocks which

sto^k

exercised.

Underwriting—None involved in issue of

^
■

cane

Registration Statement No. 2-5291.

principally in gener¬
selling electric energy
and also natural gas and selling water.
Business—Engaged

loans

andraw

Okla.

ating,

the

plus

I a registration

Series A, 3J/4%, due Feb.

certificates

issued

are

issued

filed

distribution

trust
be

Proceeds—Will
be
applied to the re¬
demption, at the principal amount thereof
annual interest, of th^ $998,405 in
principal amount of general mortgage 15year 6% income bonds, due Sept. 1, 1950,
and balance added to working capital and
may be applied to the reduction of current

effective date.

109,500

are

issued

has

Corporation

their

One is the Wick's-Archinal Bill,

strued to impose a tax upon a
tax), is to enable New
mere delivery, against payment or
the security business
better to compete in the field of receipt within New York State,
low priced stocks with dealers of shares or certificates
to com¬
outside of the state.
Already a
plete a sale, which, except for

employees of the company.
The pur¬
chase price with respect to 232.000 shares
is $10 per share, and with respect to
2,500

CORPORATION

Offering—To be named by amendment.

1943, to defer

23,

PUBLIC SERVICE CO. OF OKLAHOMA

Coast

sugar

are

warrants

125,000

ment.

Feb.

filed

'I-

and

pending in the New York Legislature to amend

emergency
Yorkers in

•- ■

primarily of the cul¬
and'the manufac¬
ture and sale of products and by-products
resulting from the ; processing of sugar
cane,
including raw and refined sugars,
syrups, black strap molasses and bagasse.
Underwriting—To be named by amend¬

Insur-

Life

•.

Feb.

withdrawn

*-V'

v ■'

•

leans, La.
■
• Business—Consists

mutualization

j affecting the Pacific Mutual
ance Co. of California,

South

tivation

so-

rehabilita-

agreement

and

reinsurance

and

said

the

■ *•■»■

registration

Purpose—The .agreement places no limupon the powers of the committee
vote the shares held by it.
However,
i one of the main objectives of the com?
mittee is to vote the securities held by
connection

' •'''•■

statement
for
$1,500,000
first
mortgage 5%
bonds due Dec. 31,
1955.
-H-k "
vt"
Address—Carondelet Building, New Or¬

insurance,

chase

Form

to defer

1944,

19,
■

•

statement

COAST

SOUTH

THE

Ration

I them

warrants

state¬

both

pictures

f
-

the

working capital,

Jan.

registration

Sixth

Offering—Voting

dfite

Registration
4, 1944.

626 South Spring
St., Los Angeles, Cal.
Executive office,
523 West Sixth St., Los Angeles, Cal.
issuer,

See

underwriters.

•

filed

Amendment

:?--

(12-31-43.)

effective

1956.

through subsidiary companies and licensees.
Underwriting—There
are
no
principal

se¬

can

proceeds are to go

the total

registrant.

Proceeds—For

statement with the SEC
for
voting trust certificates for 508,200
shares
of
common
stock,
par
$1
per
; share,
of Pacific Mutual Life Insurance
•

motion'

par

near

are now

(Assembly Int. No. 1399, Senate Int, No. 1052) which would reduce
the tax rate on securities selling under $5.00 from the present rate
of three cents to one cent a share, and on securities selling for $5.00
but not more than $10.00, the rate would be two cents instead of the
present rate of three cents per<^
share. The ostensible purpose of Tax Law, which would provide
the lower tax rates (which include
that the sections shall not be con¬

Avenue, New York
City and Universal City, Cal. '
Business—Engaged in the production of

un¬

intended to sell the

Registration Statement No. 2-5286.

j holders Protective Committee have filed
a

par

and

obtained

F. E. Rand and Leslie
the Pacific Mutual--Share-.'

Balch,

Waggener

April

Address—1250

derwriters. 1 ■r
Offering—It is

CALIFORNIA

CO. OF

principal and agent.
Underwriting—There are to

■

Feb.

[ effective-;,' date^'^yya^^
PACIFIC

real

both

ing

ment below.

sale and management of land
property and interests therein,

purchase,

filed

Two bills

the State Stock Transfer Tax Law.

registered 234,500 shares of common stock,
par value $1 per share, and warrants for
the
purchase of 125,000 shares
(voting
trust certificates) at $10 per share, expir¬

New

City;

Amendment

agreements or otherwise, or offered
public as circumstances shall dictate
order to obtain the best possible price."
Amendment filed March 2, 1944, to defer

UNIVERSAL PICTURES COMPANY, INC.
Universal Pictures
Company, Inc., has

Street;

1015

Proposed Changes In Hew York Slock Transfers
Tax Law Designed To SlMate Local larkets

etthc

afore¬

York

42nd

Address—110

Registration Statement No. 2-5302. Form
S-l.

the

has registered

Inc.,

Operators,

$42,750 common stock.

the

for

shall

INC.

SOUTHERN OPERATORS,

the
preferred are made
than those provided
and new bank loan,
the company's gen¬
of

conversions

bonds

renewal

effective date.

will be reduced to the extent the
$5.50 convertible prior preferred is con¬
verted into common stock before the re¬
date.

its

to the
in

poses

demption

that

end

privately,

said

••

Amendment filed Feb.

$5,008,025, grand total $35,964,amounts required for such pur¬

&
FINANCIAL CHRONICLE

But this year,
greater than ever

when the need is

before...when it's

your own sons we serve.

deep and be glad.

For wherever he is

..this year dig

Thursday, March 9, 1944

FINANCIAL CHRONICLE

THE COMMERCIAL &

1016

Merrimack Mfg. Co.

For Dealers i

Teletype—N. Y. 1-971

IIAnovcr *2-0050
Firm Trading

Markets

BRAZILIAN BONDS

|||

All American Aviation,
Bendix Home

r o. INC.

rARL MARKS &

securities

foreign

AFFILIATE: CARL MARKS &

By JOHN T.

On Governments"

•'

/' -\f:-:y-; •'

••••'.'■ /nv";ii'V'

'*'• V '-V•'

V'"

•* 'A**?*

Direct 'Government

2-3600

REotob

MUTILATED

for the new: issues.

April

bonds,

effect

obligations are:

1948 (unrestricted as to exchanges

war

this refunding has again

Treasury

;

there will remain

New

Switzerland,

Basle,

•

■

him Vice-Chairman.

Speich

issues, indicates

deposits and the declining capital ratio

favorable reception for the 1%%

Based

current

upon

market

5/32 bid, 100 6/32 asked. .
prices'for comparable issues,

fully evaluate them.

Managing Director.

Tennessee Products;

the

its

called

maturity

Pine

Y. Security Dealers Ass'n

New York

Street,

Trading Markets:

Industrial Issues

Harrison & Austin,

Hearst

Inc.

Publications

associated

become

has

Rush

Long Bell Lumber

IND.—Vincent

BEND,

Other Issues Traded

Rush

was

formerly in the invest¬

business

ment

Pacific

the

where he

connected

was

Pacific

Coast

lected Shares

manager

Aeronca

Se¬

for

Corporation.

■

Electrol, Inc.
Lanova

Corp.

Loft Candy

Remington Arms

Page
Insurance Stocks

..1000

Calendar of New Security Flotations 1014
Canadian Securities
......1002

Select Theatres
Tennessee

998

Mutual Funds

Municipal News and Notes..1004
Our Reporter on Governments..,.1016
Our Reporter's Report,.....;....... 999
Public Utility Securities............ 992
Railroad Securities
Real

990

Securities

Security Salesman's Corner.........1004
Tomorrow's Markets—Walter Whyte
Says .............,...,....,.,....,990.

Products Pfd.

Triumph Explosives

MORRIS STEIN & CO.
Over-the-Counter Securities since

991

Estate

;

Eastern Footwear

| INDEX
Bank and

Aircraft

Alberene Stone

1924

York 4, N. Y.
Telephone HAnover 2-4341

Broad Street, New

EVERSHARP

Give to the

Pressurelube
Common Stock

DEALT

Illinois Pow. div.

The longer-term obligations offer to others than banks an oppor¬
tunity to obtain a larger return than they would get in the note issue,,
and to the extent that the 214% and 214% bonds are taken by the i

Tel. WHitehall 4-7970 Tele. NY 1-2218

Stand. Coated Prod. Pfd.

LARGER RETURN

extended

L. D. SHERMAN & CO.
Members

INC.

Approximately $500,000,000 of the called issues are held by. the
Federal Reserve and Government agencies.
The former is quite
likely to exchange along with the banks into the !Vz% notes since
liquidity is a major consideration here. ...

holders

Pfd.

Eastern States

...

Vice-

General Manager)

.elected

premium of from 8/32 to 12/32 above the issue price, for these
notes, would not seem to be out of line, w7hen the market has
had time to

United Public Utilities

notes due

Sept. 15, 1948, which already command a modest premium.
The when-issued quotations are 100

Dr. Rodolphe

second

(formerly

Chairman and

condition that may develop.

any

Ass'n Pfd,

Peoples Light & Pow. Pfd.

with Franklin Wulff & Co., Inc.;
4%, as well as to the yearly
Wm. H. Mann & Co.; Empire Se¬
including a balance of
3,841,942 Swiss francs to be car¬ curities Corporation, and Paul J.
ried
forward.
Elected as new Marache & Co. In the past he was
members of the Board were Paul

Chairman of the
Board, and Maurice Goley, Presi¬
dent of the General Management,

that the banks maintain a highly liquid position
.
.
.
This, together
with the fact that they are the largest holders of the refundable
meet

Electric

Gas

accounts,

it is important
to

National

New Eng. Power

Derby Gas & Electric

was

Because of their large

Corsscl. Electric & Gas

Boston Woven Hose

143,311 shares, approval was given Coast,
to the distribution of a dividend

only"" $755,000,000 of Home Owners Loan Corpora¬
of Commodity Credit Corporation notes,
.

Community Gas & Power

at¬

by shareholders of Swiss
Corporation
representing

tended
Bank

tion bonds and $412,000,000
both callable next year.

Birmingham Gas
Citizens Utilities

V. B. Rush Is Now With

SOUTH

Corporation

Bank

held ' in

retired,

been

Amer. Gas & Power

(Special to The Financial Chronicle)

leaving only
$718,000,000 of the Series "A" ■%% notes due March 15, 1945. . . . Renggli of Bienne, Chairman of
The partially tax-free obligations,, likewise, will be further reduced The Societe Generale de l'Horloduring 1944, to the extent of $4,265,000,000, leaving $22,947,000,000 gerie Suisse S. A., and Henry
of these securities outstanding.
Due to the retirement of this Wachter of Winterthur, General
type of obligation the market for partially tax-exempt securities is Manager of Volkart Bros.
expected to continue strong.
.
The Federal Farm Mortgage
The meeting also accepted the
Corporation's bonds wlil be entirely eliminated as will the last of
resignation of Dr. Max Staehelin
the publicly held Reconstruction Finance Corporation's notes through
from the chairmanship and elected
this refunding operation.
Of the Government-guaranteed debt
have

will

notes

Y. 1-1779

has received notice with Harrison & Austin, Inc., City
that at the 72nd Annual Meeting
National
Bank
Building.
Mr.

tax-free

Teletype N.

York Agency

wholly

make some

meet the larger reserve require¬

Swiss

resorted to the I

$571,000,000 of Reconstruction Finance Corporation notes
due April 15, are wholly or partially tax-free obligations, which
means that the Treasury will benefit through their replacement with
taxable securities.
By the end of the year practically all of
the

DIgby 4-4833

market indicate that the Treasury

Annual Meeting fif

retired in this refunding, with the excep¬

All of the securities to be

Phone

Auto Ordnance

not eligible
to all other

not been employed for some

...

Ass'n

Security Dealers

loan account will have a temporizing

the market, since the banks will have to

upon

ments.

time, and
this pattern will no doubt be used for future operations. . . .
These refunding proposals are a sample of what can be expected
on a much larger scale when the country returns to more normal

tion

the

Swiss Bank Corp.

of "rights," which had

conditions.

from

adjustments in their portfolio, to

"RIGHTS" BACK
The

1.29% and the partially tax-free 27/s%
112.19, to yield 1.36% on a tax-free basis. V . .

coming into the

Inquiries

individuals)

.by either institutions or

taxable 214% bonds of 1956-58 at about 103.21

bonds due 1955-60 at

withdrawals

offered in exchange for these

Exchange PL, N. Y. 5, N. Y.

give a tax-free yield of

May 15, 1944

2M% Treasury bonds, due 1956-1959
2l/z% Treasury bonds, due 1965-1960 (these bonds are
for purchase by commercial banks, but are available
institutions and individuals)

use

parison between the

$2,280,000,000

Treasury notes, due Sept. 15,

ACTION

the terms of the refunding, all
parts of the Government bond market firmed and trading actively
increased, with the longer-term partially tax-exempt obligations in
good demand. <,
Banks that are in the excess profits tax brackets
were reported to have been the buyers of the partially tax-exempt
securities.
These bonds are still attractive for institutions to
whom the tax feature is more important than a lengthening of the
maturity and the large premium involved. . . . Banks that are not
likely to be in the excess tax brackets are still confining their pur¬
chases to taxable obligations which, in many instances, give about
as good a return as the partially tax-exempt bonds and do not involve
as large a premium.
.
.
.
An example of this is evident in a com¬

Reconstruction Finance Corporation notes,
Series W, called for payment April 15, 1944
779,000,000 3%
Home Owners Loan Corporation bonds,
Series A, called for payment May 1, 1944
835,000,000 3% Federal Farm Mortgage Corporation bonds,

The securities to be

....

GOVERNMENT BOND MARKET

571,000,000 1%

Total

Members

Following the announcement of

$95,000,000 3V4% Federal Farm Mortgage Corporation
\ called for payment March 15, 1944

called for payment

Inquiries invited

S. H. dUNGER CO.

...

Guaranteed Obligations

.r'.

$2,450,000,000

...

1-570

york

The amount of these bonds
tend to broaden the market for
these obligations, which have been restricted because the com¬
mercial banks have been excluded from ownership except to a
limited extent of their savings deposits.
.
.
Government agencies
and trust funds holdings of the called issues may be expected to be
converted into the bond issues.
It is indicated that at least 90%
of the $4,730,000,000 of maturing or called securities will be exchanged

COUPONS HISSING

Teletype

Bell
new

YOB K

Enterprise 6045

refunding in nearer-term years.
taken by non-bank holders will

Total

BIDS MADE ON BONDS WITH

Association

NEW

telephone

philadelphia

telephone

Obligations

$515,000,000 1% Treasury notes, due March 15, 1944
1,519,000,000 3V\ % Treasury bonds, called for payment
.•
15, 1944 *
.
'
416,000,000 %% Treasury notes, due June 15, 1944

NASSAU'STRBET,

.•'4 5

Y. 1-1397

request

York Security Dealers

Members New

'T-frV!'*r .Vff/*;:l.l. '

callable notes and bonds by the
Treasury in the amount of $4,730,000,000 comes at a time when
conditions at home and abroad are favorable to such an operation. .
The Fourth War Loan Drive has just been successfully concluded
and since the banks were given only a limited participation in the
drive, they have been able to increase their holdings in the refund¬
able obligations and are the largest holders of these issues.
. . .
To that extent the conversion operation will be largely concerned
with the commercial banks and the note issue offered in exchange
for the refundable securities is especially attractive to them.
, ■v .
During 1944, Government notes and bonds amounting to $6,685,000,000
mature or become callable, so that when the current refunding is
completed the Treasury has only $1,955,000,000 of this type of security
to be taken care of later in the year, aside from the bills and cer¬
tificates, which will be exchanged for similar obligations. . . .
The following securities are to be refunded by the Treasury:

HAnover 2-8780

St., N.Y.

Teletype

INCORPORATED

refunding of maturing or

The

Ass'n

Members N. Y. Security Dealers

Kobbe, Gearhart & Company

CHIPPENDALE, JR.

Sharpe

M. S. WlEN & Co.

Corporation

Majestic Radio & Television Corp.

CO. Inc. CHICAGO^-

■

Pfd.

Common

Brown &

Appliances, Inc.

Trading markets and Information on

"Our Reporter

Old

25 Broad

New York 4, N. Y.

50 Broad Street

Stocks

N. H. & Hartford

N. Y.,

Inc.

Allen B. DuMont Laboratories, Inc.
Harvill

England Pub. Serv.
Pfd.

fields.

specialists:,,..:

=====

Non-Stop Air Pick Up,

Laundry, Electronics, Die Casting and Television

Home

all issues

4'U'y/■/v-'

■

with post-war prospects in the

5 stocks

& Pfd.

Common

New

issues, the Treasury will have substantially I
schedule and will make less pressing the

arrears

NEW

YORK

Circular

W. T. BONN & CO.
,

•

120

<si,

■

Telephone
Bell

Broadway

New York 5

COrtlandt 7-0744

Teletype NY

1-886

CURB

THE

EXCHANGE

RED CROSS

Request

Stanley Heller & Co.
Members New

York Curb Exchange>

30 Pine Street
Tel.

•

New York

Whitehall 4-9200

Hill, Thompson & Co., Inc.
Markets and

120

Situations for Dealers

Broadway, New York 5

Tel. REctor 2-2020

Tele. NY 1-2660

Full text of Commercial and Financial Chronicle : March 9, 1944, Vol. 159, No. 4262, Section 1

FRASER