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\
I-
I MAY
Final Edition
ESTABLI
JS3 9
2
in
Sections-Section 1
Reg. U. S. Pat. Office
Volume 165
Does
Number 4590
New
York, N. Y., Thursday,
May 1, 1947
Price 30 Cents
a
Copy
Sterling Is the Money Supply Too Luge? The Case for Scientific
Crisis Impend?
Stock Market
Analysis
supply
large
a
By HOWARD R. BOWEN*
Economist, Irving Trust Company, New York
By PAUL EINZIG
Dr. Bowen doubts present
money
is too
on
ground that
Dr. Einzig calls attention to
ap¬
present ratio of money to national income shows continuation of
proaching exhaustion of proceeds
normal trend
dating back several decades. Also doubts validity of
quantity theory of money and
holds^ublic has greater need and use
of American loan to Britain and
of application
prospects
second
sizable
drains
loan.
Britain's
on
and
sources
doubtful
for
dollar
concludes
whether
a
for
Discusses
re¬
it
Britain
can
convertibility of sterling
required under Anglo-Ameri¬
can Loan
Agreement.
countries, bank deposits
These deposits
money.
and
LONDON—Political circles here
possibility
*
the
not
they
out¬
too
and
and
ments.
that the pro¬
ceeds
of last
fore, the
year's loan
likely
their
are
to
tem
Howard
R.
effect
fuel
of
the
crisis
on
the trade bal-
caused
a n c e
Einzig
pessimism
fuel
on
output of
the five-day week and of the dis¬
continued
on page
to preserve
of
gan to
and increase
There
are
even
more
important,
to
t%e
to.aslure
we
was
over
$170
times
as
(Continued
*
Address
on
are,
meal
c u s
the
a
sion
among
Nicholas
guests
about
Molodovsky
vital
a
life.
though
are
tech¬
will
be
unless
W. R. Burgess
a
laree
to
pay
expressed were
vergent.
Perplexed,
Duchess
asked
turned
him
how
to
an
The
opin¬
widely di¬
the Grand
Krylov and
identical fact
could
Control the Budget
The
first
very
step
-
in dealing
with the debt is to get the national
budget under control.
impress people in so many
ways. "Your
Highness,y
replied the poet, "look at thai<
magnificent
chandelier
whcfee~
different
(Continued
The Presi¬
dent has found it necessary to lay
before the Congress a $37 V2 billion
budget.
This budget is four times
much
as
ing
in the
biggest spend¬
in the '30s. The budget
as
years
(Continued
on page
19
Pictures
on page
34)
^
takeit
at
Dinner
of Security
ciation
of
New
11th
Annual
Traders Asso¬
York
appear
on
29, 30, 31 and 32.
pages
44)
with
*Remarks by Mr. Burgess at the
35th Anaual Meeting of the U. S.
the service of the
Chamber of Commerce, Washing¬
national
ton, D. C., April 30, 1947.
the day.
of
ions
i
the
country is
strong and has
by Dr. Bowen before
which
futile
problem
produces in goodS and services.
dy¬
in
37)
35th Annual Meeting of the U. 'S.
Chamber of Commerce,
Washing¬
the
One
a
Duch¬
During
ess.
depends on how strong we
on
how much the country
vigor¬
nically wise
handling
the
debt,
it
or
large.
page
carry
and stable
Even
It is widely believed today that
16)
Leland Electric
ous,
1946, this
billions,
Grand,
arose
possiMe\ step
se-
about
total
is
every
economic
neary three
the
at
'
the war, the total of bank
depos¬
its and currency in circulation was
In
dinner
palace of
economic life.
our
>
in¬
.one
evening to'
dealing with the debt itself and its financial
phases.
The^other, and debt. How much debt we can
namic,
billions.
of
spread,
was
vited
dis
two aspects to the problem of debt management.
increase in money
supply is
shown in Chart 2. In
1939, before
$60
energy
be¬
i
of these is the problem of
commercial banks.
v
$1^,600,000,000 was overoptimistic. l£ven though the acute
iuel crisi^is gradually subsiding,
growing
as
fame
>
Aesop. As
he
»
as
1 xiis
v.
«...
*
,
so
the
of
bonk
deposits
(or
money) increased rapidly.
This
expansion in money supply; rerultecl chiefly from the sale of
amounts of government
>s to the
deficit at
a
sys¬
largely
amount
Chancellor of the Lxcheqi,.
ton's estimate of this year' S
the
Burgess outlines
1
of
his
essential to proper debt management: (1) ;
budget and gradual redemption of debt; (2) j
distribution of holdings of debt more
widely among investors, so jas to reduce
inflationary money supply; and (3) tax reductions,
interest rates decontrol, and improvement of
quality of government
the
money.
recent
war,
to my
«
Fontaine
and
reduction of Federal
oper¬
supply
During
Mr.
-
.
determine the
Bowen
fore very long.
The adverse
I
There¬
of
back
comes
fabu-
successor
La
Vice-Chairman, National City Bank, New York
Ex-President, American Bankers Association
of
loans
banking
be
exhausted be¬
is
^Russian
By W. RANDOLPH BURGESS*
invest¬
ations
anecdote
an
reading the life of Krylov, the great
■
growing fears
there
From the days of my childhood
mind.
I ran across it when
Program lor Debt Management
the
amount
tion lies in the
about the effect
A
de¬
crease
origin of
this specula¬
Paul
the principal form of
when
banks
The
are
list, poet and
de¬
are
stroyed
distant future.
Dr.
Emphasizes advantages of "direct" analysis ;
of market's internal
structure, as evidenced by differential relations
of prices and volumes, as essential to sound
invest-
standing
of
second dollar loan to Britain in
a
economic conditions.
contraction
created when banks increase the amount
loans$>
are
their
of
ments
the
;
Economist points out limitations
appraising stock prices oil basis
of either intrinsic value of
particular securities or underlying
investment policy.
In all modern
*"*"
discussing
severe
'
^
(Author of "New Tools for Stock Market
Analysis")
'
inflationary danger
no
supply and cautions against
as
are
Sees
By NICHOLAS MOLODOVSKY
White, Weld & Co.
of credit.
is
maintain
circulating medium than in past.
in present
money
n
a
income
State and
ton, D. C., April 30, 1947.
Aerovox Corp.
Municipal
Havana Litho. Co.*
y
*Prospectus
on
R. H. Johnson & Co.
Established
request
Bonds
1927'
INVESTMENT SECURITIES
Hirsch & Co.
Members New
Exchanges
25 Broad St., New
HAnover 2-0600
Chicago
Teletype NY 1-210
the
Government
Dallas
in
26, Bishopsgate,
London, E. C.
*Air
Reserve
The
Bank
Capital
Capital
..
r
banking
and
every
exchange
description
business
Trusteeships and Executorships
also
WILLIAM ST., N. Y.
Bond
undertaken
I
V
of
■
*
Members
New
York
120
DIgby 4-2727
Stock
Exchange
Broadway, New York 5, N. Y.
Telephone:
Bell
Company
for Banks, Brokers
.
...
•
/
■
Analysis
'■
-
.
upon
request
f
request
Reynolds & Co.
v
CITY OF NEW YORK
Tide Water Power
Brokerage
and Dealers $
on
THE
OF
Toronto
COMMON
-,
•Prospectus
NATIONAL BANK
1-395
Montreal
Service
$2.40 Conv. Preferred
SUGAR
Assn.
HAnover 2-0980
Bell Teletype NY
Raytheon Manufacturing Co.
Exports—Imports—Futures
£2,300,000
conducts
"
Dealers
£4,000,000
£2,000,000
Fund
Products, Inc. Com. & "A"
Security
New York
Common & Preferred
•
In India, Burma, Ceylon, Kenya
Colony and Aden and Zanzibar
Paid-Up
Dept. Teletype: NY 1-708
York
*Emery Air Freight Corp.
Branches
Subscribed
New
152
Bond
NEW YORK 5, N. Y.
Office:
THE CHASE
Members
Willkes-Barre
99 WALL STREET
HART SMITH & CO.
OF NEW YORK
Harrisburg
?
Sranton
THE NATIONAL CITY BANK
Syracuse
LAMBORN & CO.
Kenya Colony and Uganda
'Head
Buffalo
Williamsport Springfield Woonsocket
of INDIA, LIMITED
to
PHILADELPHIA
Albany
Baltimore
Pittsburgh
London
(Representative)
NATIONAL BANK
Bankers
Troy
Bond Department
Street, New York 5
BOSTON
Yorfc 4, N. Y.
Cleveland
Geneva
64 Wall
York Stock Exchange
and other
Hardy & Co.
Members
New
Members
New
York
York
30 Broad St
REctor 2-S600
Teletype: NY 1-635
Tel.
DIgby 4-7800
Stock
Exchange
Curb
Exchange
New York 4
Tele. NY 1-733
ira haupt & co.
Members New
and
Ill
other
York Stock Exchange
Principal Exchanges
Broadway* N. Y. •
REctor 2-3100
Boston
Teletype NY 1-2708
^Telephone;
Enterprise 1820
/
COMMERCIAL & FINANCIAL
THE
Thursday, May 1, 19471
CHRONICLE
2-'(2330)'
Trading Market» in*
&
Commons
Rails
KING & KING
SECURITIES CORP.
Established. 1920
Security Dealers Assn.
Nat'l Ass'n of Securities Dealers, Inc.
40 Exchange PI.. N. Y. S
HA 2-2772
Members N. Y.
goodly
morning in such
here this
Burnham Corp.
tions.
I
that
you
-would never
Cassco Corp.
Corp.
^
j
i
} .•' 1 'i
®
*
Units
Morgans Inc.
Standard Screw
been
of
menace
MitclielUComiiftiuj
swollen
120
1-1227
Teletype NY
tends
An Uusion
attributes
a
e
By
(Continued on page 48)
WILLIAM R.
Export Manager,
}
of a tour of Western Europe, Mr. Martin j
outlook favorable in Scandinavian countries, some r
finds business
Why worry as
income
is
government spending
of the national
taken and spent by gov¬
3/6s, 1956
ernment
money,
from more gen¬
provision of the necessities
comforts of life to increased
and
employ¬
purchasing power, more
and official control
ment of labor,
Vanderhoef & Robinson
New
York
Curb Exchange
Street, New
Telephone
Bell System
York 5
of the business
such bless¬
qontrol the source of
ings
COrtlandt 7-4070
Teletype NY
cycle. Why try to
as.
these?
Before
we
production.
couple of weeks ago I completed a
Sweden, Norway, Denmark, Holland, Belgium,
and Italy.
The
of
my
Eu¬
object
visit
down to our
to
veys;
by Dr. Fairchild at
35th Annual Meeting of the U. S.
"An address
.
Washing¬
the
New
i,
our
England Gas
Bought
—
Sold
—
(3) Germany's
travels;
William R. Martin
New
with established
120
observations
certain
made, certain
opinions were
clientele
Good Salary
.
\X
e
am
will be
<
not interested in
York
Curb
Exchange
be¬
the Export Ma'nagers Club,
York City, April 15,- 1947.
*An address
fore
New
by Mr. Martin
U. S. FUNDS for
Maintain Active Markets in
CANADIAN BANKS
CANADIAN MINES
Members N.
CANADIAN UTILITIES
Y. Security Dealers Assn.
1-1126 * &
1127
Canadian Securities Dept.
Goodbody & Co.
Members N, Y. Stock
Trading Market^
Exchange and Oilier Principal Exchanges
NEW YORK 6, N. Y.
115 BROADWAY
»n
Telephone BArclay 7-0100
Tudor
Common
&
City Units
/
Frank C. Masterson & Co.
64
York
New
1923
Curb
Exchange ).
NEW YORK 5
WALL ST.
HAnover 2-9470
Teletype NY 1-1140
question it
that
enormous
an
I
that
these:
be. As a result of
in our own case,
would
have,
MICHAEL HEANEY, Mgr.
the factors
that
are
/*
WALTER
KANE,
Mgrh
Joseph McManus & Co.
Members
York Curb Exchange
New
Chicago
Stock Exchange
New York 6
39 Broadway
Teletype N Y 1-1610 '
Digby 4-3122
(1) Essentiality of the
Asst.
commod¬
ity to the industrial rehabilitation
of the country of importation.
(2) Production, if any,
commodity in the country
of the
of im¬
Kingwood Oil Co.
....
(3) The ability and readiness on
the pari; of, the American
pro¬
ducer to set "forth a regular pro¬
A
1"'
.
'
•
Oil Producer
Crude
Price about
of deliveries.
Whether a man merely sits and
1%
gram
whether he
expends all his energies in any
venture, he must eat.
Food must
be imported in most of the liber¬
ated countries of
Europe. That
means
that
Teletype NY 1-672
•»
Securities
Prospects
Europe?
demand. That, of
course, is universal. In my own
experience I reduced the question
tb"* determining
what the trade
is
stares
Hanover 2-4850
St., N. Y. 5
Teletypes—NY
Bell
;
Curb and Unlisted
portation.
CANADIAN INDUSTRIALS
&reetie<miCompai\^
Bridge
Racing Ass'n :
Preferred
to. say , that there
enough
determined
and Commission
S7 Wall
the Trade
ansWering
not
factors
indulging
York Stock Exchange
BROADWAY, NEW YORK 5
Tel. REctor 2-7815
Detroit Int'l
Eastern
(Va.)
Stock
Common
•
Established
concern
Today in
In
is
least informative.
I
Members
New
Are
What
of
my
MC. PONNELL & fp.
'
'
place in the Eu¬
Europe's
(4)
formed, and this; I hope,
Manager-Salesman
-
America's foreign policy.
in
at
Central States Elec.
ropean economy.
course
were
Teletype NY 1-1843 '
-Members
outiook in some or
outlets
HOWever,
Quoted
Bell
'■'
New York 5
WHitehall 3-1223
visited.
operat¬
the
J
and
will
I
factors as I saw them.
(2) Business
•
Common^
this^repcrt
topics:
in
think
future.*-
the
Pino Street,
Telephone:
France, Switzerland
the countries
particular
prospects
might be for
& Electric
Unlisted Tlader
^
cases
(1) Trade
object of as¬
certaining
if
20
three-month tour of
touch upon four
ing efficiently,
and what our
Wanted
.
*.
,
get out of tnls.
can
I
went
I
sales
April 30, 1947.
down to
sur¬
for
were
-
(Common
■
either. So lets get
andsiind out what
aren't
you
we
make
there
Chamber of Commerce,
Preferred
&
H. G. BRUNS & CO.
travelogues, and I am sure
in any
not
was
rope
1-1548
ton, D. C.,
Common
Struthers Wells
.A
v:
/:
A
to
settle
Points out
Germany's economic recovery.
erous
Class "A"
SI Nassau
vitally concerned with
Says Germany is a r
surrounding nations
Europe's intense concern over America's foreign policy sind warns
high U. S. prices are being resisted by import restrictions despite
Europe's needs.
Stresses U. S. aid for expansion of European <
glamorous
blessings alleged to
flow out ;of the spending of gov¬
Savoy Plaza
Members
We
increasing?
heard of the many and
all
Campbell Co.
MARTIN*
improvement in Italy, Switzerland and France.
vacuum in the middle of Europe, and welfare of
have
S.
Common
Publicker Industries, Inc.
rises and the share
ernment goes on
A.
-
Recounting impressions
the level of
Savoy Plaza
branch offices
Capital Stock
t
n
-
char¬
does not en-
b/ taxation
raised
*•*
Pocaho/itas Fuel Co.
;rBut why
government spend
money?
of
lot
of our American
free economy.
Government spending of money
acter and our
\-
gov-
m
n
MY 1-1557
La.-Birmingham, Ala.
Detroit & Can. Tunnel Corp.
the
shouldn't
.the
the
of
spending.
Fairchild
R.
Fred
WOrth 2-4230
Bell
r
e
Baltimore Stock Exchange
Broadway, N. Y. 5
Members
Stock
Direct wires fo our
fully
aware
Now Orleans,
to some, it takes
and in the doing, it
to impair some of the finest
not
had
I
if
1
money.
York
HAnover 2-0700
standard
gives
it
What
Government Spending
first place I am con¬
vinced that the supposed benefits
my own time
of government spending1 are an
and
thought
Government has no
to this matter illusion.
In
much
so
,
magic power to^aise the
of
living
by
spending
New
from others;
Benefits of
directed
of
have
think we must
attention to these ques¬
give some
assure
can
Jones Estate
Members
I
main«problem
prob
And
lem.
■
Request
on
Expenditures." I am sure that your program com¬ Steiner, Rouse & Co.
and that you would not have assembled
Exchange*
25 Broad St., New York 4, N. Y.1
numbers if you had net believed that government spend¬
ing presents a Y
.
,.L
■.
Analysis
'My subject is "Control of Federal
mittee would not have invited me to address you
major
Interstate Hosiery
Bought—Sold—Quoted
•
Federal Government.
and efficiency in
economy,
NY 1-423
TELETYPE
Manufacturing Co.
^
illusions, attacks theory deficit"
financing can
Holds 1948 Federal Budget is excessive and contends it
could beheld down to $25 billions.
Points out sources of Government wastes and concludes a new
crisis in Government finance is threatening unless effective steps are taken to produce greater order,
U.S. Sugar
BELL
Rockwell
government spending are
holding benefits of heavy
stabilize national economy.
Prof. Fairchitd,
Soya Corp.
.
Professor
»
Preferreds
Phenolic
Amer.
FAIRCHILD*
of Political Economy, Yale University
By FRED R.
1
>
Old Reorg.
Rising Federal Expenditures
Menace oi
:
Standard G & E, Com.
into space
a
drain
means
a
•
f-
Analysis
or
their finances;
drain on available
Request
on
PETER MORGAN & CO.
New York 5, N. T.
31 Nassau Street
on
Tele. NY 1-2078
Tel. BA 7-5161
(Continued on page 42)
Arkansas-Missouri Power*
Central & Southwest Corp.*
Derby Gas & Electric
Acme Aluminum
For
MARLIN-ROCKWELL
Banks, Brokers & Dealers
Common
Detroit Harvester Co. Com.
FEDERAL MACHINE
Solar Aircraft Company
Missouri Utilities
Mountain States Power
New
Haile Mines
England Gas & Electric*
Northern Indiana Pub. Service*
Northern New
4
England
BOUGHT—SOLD—QUOTED
dealers and
banks only
G.A.Saxton& Co.,Inc.
170 PINE ST., N. Y. 5 WHitehall 4-4970
Teletype NY 1-609
'
\
Member New
York Security Dealers
74 Trinity Place, New
2-2400
Teletype 1-376-377-378
Buffalo—Cleveland—-Detroit—-Pittsburgh—St. Louis
Telephone HAnover
Private Wires to
II
I
mm—m—m
i
i
m
vJ-G-White 6 Company
INCORPORATED
37 WALL
STREET
NEW YORK 5
ESTABLISHED 1890
Tel. IlAnover
2-9309
Tele. NY 1-1815
'■ I'
*
.
Reynolds & Co. j
Members
Association
York 6, N. Y.
■
*Prospectus on*request
'
Troster, Currie & Summers
."
Preferred
Conv.
Trading Markets
Republic Natural G^s
N.
Conv. Preferred
•
*Twin Coach Company
Common
Puget Sound Pov/er & Light
*Prospectus available to
90c
AND WELDER
Stock— Rights
Alloys, Inc.
Preferred
Conv.
120
New
Y01& Stock Exchange
Broadway,
Ndfw
Telephone:
Bell Teletype:
——immmmmmmmmmmi—■—
L,V
York 5, N. Y.'
REctor 2-8600
NY 1-635
1
'
Volume
165
Number 4590
THE COMMERCIAL &
FINANCIAL CHRONICLE
(2331)
I N DE X
Articles
and
*
News
How Can We Avoid
Page
The Case for Scientific Stock Market Analysis
—Nicholas Molodovsky
Cover
Is the Money Supply Too Large?—Howard R. Bowen
Xird's Eye View of Central Europe—William R. Martin
How Can We Avoid a Recession?—Leon H.
^"Why
Harriman
l
avoid
sions
7
9
9
Building in 1947—Guy T. O. Hollyday
9
8
it
9
A Plea for Broader Export Credits—A. M.
12
Strong
Ripley Cutler..
Richberg__—— 14
—Bernice Fitz-Gibbon
14
'The War's Legacy for Banking—Elliott V. Bell
have been
eral times
that
John D. Clark, Truman Adviser, Anticipates Further Labor
1
'The Seasonal Trend in
Mexico and
Holland
B^nk
New York
Stock Prices...
5
—
Seek World Bank Loans
prophets.
cash in
6
lieve that
Economist Says Business Trends Still
as
After World War I____
l__—__
._
Irving Fisher Is Dead..
______
Lewis H. Brown Optimistic
on
Wage-Price Outlook
Snyder Cancels Press Conference....
—...—
14
Inventories and Price Trends..
—15
.
ABA Opposes Federal Reserve Guarantee of Small
v
Business Loans—
Truman
Reports Leveling Off in Some Business Units_.
National City Bank Financing Cotton Shipments to China—
19
20
...—
20
Introduces New
60
...
Regular Features
W
.
Page
IBank
Man's
.•Canadian
•Coming
Events
Page
i
r es
1"
I
r e c e
Railroad
16
Funds...
18
10
Observations—A.
Wilfred
Securities
.;.
Real Estate Securities
Notes
May...
*
Securities Salesman's Corner..-..
Securities Now in Registration..
22
53
Tomorrow's Markets (Walter
Why te Says).... I
Washington and You.....1
5
"See articles
Weekly
on
52
5
of
the
d
v a r
ate
COMMERCIAL
Company
and
Reentered
U.
Reg.
•WILLIAM
25
Park
S.
DANA
B.
Patent Office
York,
COMPANY,
3,
Publishers
Place, New York 8,
REctor 2-9570 to
D.
RIGGS, Business
May
and
Other
city news,
Offices:
1,
Manager
1947
Chicago 3,
1111.'
etc.).
135
S.
Y.,
(Telephone:
Salle
St.,
State
*
Drapers' Gardens, London, E.
land, c/o Edwards & Smith.
the
office
post
under
the
Act
of
;
.
at
1
New
March
-
Other
Bank
$25.00
0613);
C., Eng¬
Publications'
and
per
Monthly
per
Note—On
Quotation Record—Monthly,
yeaf... (Foreign postage extra.)
Earnings
Record — Monthly,
year.
(Foreign postage extra.)
account
of
the rate of exchange,
the fluctuations in
remittances for for¬
eign subscriptions and advertisements must
be made in New York funds.
York
Curb
avoid
Stock
Exch.
Coffee
120 WALL
&
Exchange
Assoc.
Sugar
Member
Exchange
ST., NEW YORK
TEL. HANOVER 2-9612
recession. The task is difficult.
But these efforts at best
could be
fully
successful.
reduce
can
At
least,
recession
a
continued
on
they
to
mod-
American Overseas Airlines
50)
page
*A statement by Mr.
Keyserling
broadcast over Columbia Broad¬
Republic Natural Gas
Haile Mines
casting System, April 27, 1947.
Har-
School
Finishing Com. & Pf<3.
,
Clark
First:
yedr
Dr. John D. Clark
admits,
address,
Dr.
major points.
two
ago labor
business.
based
But
rejected that argument
vant.
critical
that
its
business
as
irrele¬
This year labor's demands
action
vance
Clark stated that these two stand¬
proper
adjustment
wage
the only two he can think
which
can
tively.
neither
Teletype N. Y. 1-714
of
be measured quantita¬
When
will
Haytian Corporation
Punta Alegre Sugar
Lea fabrics
U. S,
labor
be
is
told
that
accepted,
in
Dr.
such
the
to
bring
about
essential
25 Broad St., New York
4, N. Y.
WHitehall 3-0272—Teletype NY 1-956
Private
Wire
to
Boston
the
services,
authorize
the
President
to
leaving him under
to act without spe¬
authority from the people.
cific
The
same
the
reluctance
legislation
at this time,
to
con¬
which
is
taken
before
occurs,
ultimate
an
but no legislation
action
if
(Continued
the
*Hungerford Plastics
*
Metal
Forming Corp.
"'District Theatres
*Dumont Electric
*Prospectu8 Available
Dr. Clark
holds, is being shown in the Con¬
gress, where there are many pro¬
posals about action which may be
Dr.
DUNNE & CO.
Members New York Security Dealers Assn.
re¬
compulsion
ing
Sugar
Susquehanna Mills
that when they oc¬
act instead of
sider
living,
to
be
may
as
Each
both sides refuse to accept
legislation which will in ad¬
yet
any
most vital
on the high cost
while
the
business
world has rejected that thesis. Dr.
are
according
continuance of.
of
of
Assn.
the Government will have to
have been based
ards
Security Dealers
the principle
character.
there
cent past and
cur
request for higher wages on the
fact that large profits were being
by
as
crises in the future
informal
made
a
Y.
REctor 2-4500—120 Broadway
alone.
of
take
his
In
N.
Bell System
determined, then in substance
Clark,
of the
s
ti
c(Aitinued,
side
of
various
t
,
which its wage proposals will
page
gathered here
from
Membere
been equally determined in
op¬
posing any legislation to protect
the public in cases of work stop¬
Gradu¬
made
Subscriptions In United States, U. 8.
Possessions, Territories and Members of
Pan-American Union, $35.00 per year; in
Dominion
of
Canada,
$38.00
per
year.
Other Countries, $42.00 per year.
$25.00
La
matter Febru¬
second-class
at
Subscription Rates
Every Thursday (general news and ad¬
vertising issue) and every Monday (com¬
plete statistical issue — market quotation
vecords, corporation news, bank clearings,
*tate
N.
1879.
9576
WILLIAM DANA SEIBERT, President
Thursday,
as
1942,
N. Y.
HERBERT D. SEIBERT, Editor & Publisher
WILLIAM
25.
ary
to
York
Dr. Clark's second point is that
both labor and management have
Business,
•
The
fail
New
York
New
a
power
alumni
o r e
p a r
page 9.
Copyright 1947 by William B. Dana
FINANCIAL CHRONICLE
may-
Members
New
being told that wagmde¬
terminations will be the result of
East.
Published Twice
sistent efforts
FARR & CO.
is
labor is
the
f
10
This
group
be
dis¬
57
8
.Cover
difficult
to deal
with, and the most pernicious.
Even the hardest and most per¬
Clark\
ington
ntly Dr.
Clark
Prospective Security Offerings.'.
Public Utility Securities...
Crisis
themselves
going is good.
on
subject be-
Sterling
can for
they
the
Quotations Upon Request
economy
who want
(Special to the "Chronicle")—That labor relaCh
would seerri to be the conclusion
of John
V;;
<♦>——J*
n
cussed
a
economic
but
run,
public in advance of trouble.
Wash
60
8
long
Established 1908
Economic
45
Investment
for the
the
with meeting labor's demands with
dent's Council
o
20
in
CORP.
and
easy way to
-
Governments..
Recommendations
NSTA
P
e
Our
on
HAYTIAN
who
selfish
as
membe r4o f
Our Reporter's Report...........
Reporter
WHitehall 4-6551
heading for trouble
14
.v.
Mutual
are
47
Dealer-Broker Investment
"Einzig—Does
Impend?
right
charges business
Clajfk,
Stocks
Securities
Field-
an
a
hailed
to protect the
Bookshelf.......
and Insurance
".Business
D.
Advisors.
Reorganization Bill
Sev¬
are those who be¬
recession is inevitable
legislation
t h
Guaranty Trust Co. and
British Loan Drafts Greater Than Anticipated
R.
those
are
alone; and labor, business, and Congress
with^ opposing
power
tions
19
_
R.
be
WASHINGTON
—
-
make
19
rSays Unbalance Within Price Level Is Real Cancer in Price
'The Price Problem Discussed by
First National Bank of Boston
re¬
by being irresponsible.
John D. Clark
18
_—
WALL STREET, NEW YORK
Telephone':
U. S.
18
Says NAM___
old
for late
Presidential Adviser
Anticipates
Further Labor Trouble
J.K.Rice,Jr.&Co.
17
Structure
99
10
12
Prices Widely Reduced Already,
serious
7
.—
Report Business Mixed—With Declines Predominating-....
"Task Is to Reduce Prices:
a
few weeks?
and
a
now
storm.
over-reaching
while
Keyserling
Second, there
_
Same
a
This is
6
—-
H.
already they have been
once
those
out
us
for businessmen
there
that
the most
undoubtedly
guess
certain
a
to take all
Leon
wrong.
But they figure
the law of
averages, they
on
will
3
Call
is
counsel
short-sightedly
re¬
cession within
15
pre¬
They believe
behavior is bad
currently predicting
proved
Trouble
Third,
know
who,
945,
1
for
to
power
ufacture bad times..
there
since
clean
to
dogs.
valuations.
only sensible
prepare
in
those
are
time
and
cats
buyers to dig in for bad times
instead of working to prevent
them is the surest
way to man¬
are
mak¬
First,
12
'The Outlook for Interest Rates—G.
—and
.
mitigate.
They forget that
sion:
10
during
and
reces¬
a
or
the
to
ult to
c
avoid
government
beyond human
that
more
d i ff i
by
a
vent
groups
are
ing
"it's spring again"
enterprise
exercised
and
de¬
There
who
AND COMPANY
/
Recession?" is well-stated
American economy has
sufficient
itself
three
Advisers
not be avoided, President's
be moderated by
private
Avoid
the
the task.
-
—
We
that
forthrightly to
8
No Sharp Drop in Food Prices—J. A. Guthrie
Can
pressions if it
7
Abundant Farm Production With Surplus Food Allotments
—Clinton P. Anderson
a.
"How
emphasizes
reces¬
and
applies
of Drysdale & Co.—Edmour Germain
Hxpect Agricultural Price Drop!—H. S. Cherry___—
Bullish Market Factors Accumulating!—Lawrence
Klybert..
^Freedom and Labor Monopoly—Donald R.
Banish Pomp From Financial Advertising
it
tamo
B. S.
may
can
strength and
intelligence to
7
^
Our Opportunities in World Commerce—William C. Foster..
X. F. E. Seeks Collective Bargaining Rights for Employees
Xuture Real Estate
Prices.—George Goldstein
Xeadership-Obligation of Business Management
—Henry Ford, II
topic
because
6
6
Economic
with temporary shrinkage of
profit margins.
even
The
5
Relief—Harry E. Humphreys, Jr.
Appraising the Stock Market—Col. Herbert G. King
Reciprocal Trade—A Consistent Bi-Partisan Policy
Averell
tions,
5
_
of
Calls for synchronization of
wholesale and retail price reduc¬
4
Ahead—Harry A, Bullis
recession
a
Recession?
a
KEYSERLING*
Council
performing stabilizing functions
/War.
4
Xet's Shrink Our Worries!—Frederick W. Gehle
•Grounds for Immediate Tax
H.
economic adviser contends it
3
Tax Reductions Immediately—John W. Hanes
Tax Relief Needed to Retire Debt—Levi P. Smith____
Taxes in the Years
—W.
.'Though^ stating
2
Keyserling
LEON
Vice-Chairman,
Cover
A Program for Debt Management—W.
Randolph Burgess-Cover
Menace of Rising Federal Expenditures—Fred R. Fairchild
2
.
By
r
crisis
propos¬
FIRST COLONY
corporation
52 Wall St.
New York 5, N. Y.
Tel HA 2-8080
Tele. NY 1-2425
preventive
on page
47)
TITLE COMPANY
FIRM MARKETS
CERTIFICATES
Brad & Mtge. Guar. Co.
^
Lawyers Mortgage Co.
High Grade Public Utility and Industrial
a Members New York Stock Exchange
UZOUU
15 Broad
St, N.Y.S
Boll
WHileUI 4-6330
Telatjrp. NY
&
Spencer Trask & Co.
Co.
25
New
York
Broad Street,
Members N. Y. Security Dealers Assn.
25
Tel.:
Stock
Teletype NY 1-2786
Exchange
Ndjv York 4
HAnover
Members
Boston
-
Curb
Exchange
Tel.: Andover 4690
Teletype—NY
Albany
New York
135 S. La Salle St., Chicago 3
2-4300
Broad Street —New York 4, N. Y.
Tel. HAnover 2-5872
request
analysis
on
request
Macfadden Publications
Inquiries Invited
James H. Acker
Circular on
♦Public National Bank
*lst quarter
Corp.
Members
Newburger, Loeb & Co.
**Offering
& Trust Co.
PREFERRED STOCKS
Corp.
Roberts & Mander
Prudence Co.
**Stern & Stern
interested in offerings of
Equipment
Globe Oil & Gas
Mtge. Co.
are
Textile, Inc.
Bagdad Copper Corp.
General Aviation
Lawyers Title & Guar. Co.
N. Y. Title &
We
MAINTAINED:
3
Glens Falls
-
C. E.
Members
Unterberg & Co*
N.
Y.
Security
Dealers
Asstn
61 Broadway, New York 6, N.Y*
1-5
Schenectady
All Issues
Telephone BOwlinsr Green 9-3568
Worcester
Teletype NY UIBM
(2332)
WARD & Co.
official points out taxes constitute large
Former Treasury
prices,
so
pay" principle.
Armstrong Rubber
Tax reduction
Aspinook Corp.*
Barcalo Mfg.*
practical when a surplus
meaningless while deficit financing
and debt reduction are
view;
within
comes
they
are
proceeds and
the
been
Pfd.
question
case
Gt. Amer. Industries
structive
decade.
approach
been on
that
tween
\
course,—debt reduction or tax re¬
duction.
M,y position has been
that we could have both—that the
Lanova*
Long Bell Lumber
Majestic Radio & Tel.
Maryland Casualty
Com. Pfd.
Mexican Gulf Sulphur
'Michigan Chemical
Minn. & Ontario Paper
Missouri Pac.
Pfd.
cur¬
upturn.
President^ consults his Coun¬
cil of Economic Adyisers, and then
calls
upon, business
to reduce
prices. If prices don't come down,
he says in effect, then labor is
justified in asking higher wages,
instantly inflationary pressures
are increased as a new wage-price
The
other
the
Jack & Heinz
inflationary
another
for
John W. Haiies
or
one
experts
„
be¬
choose
Hydraulic Press
an
must
we
economic
highlevel production is at a critical
point.
Our maladjustments seem
to grow worse rather than better
as prices
and wages seem ready
that is,
basis,
Hoving Corp.f
national economy.
rently feel that our existing
or!'
"either
Hoover Co.
our
Many
prob¬
has not
lem
Higgins Inc.
and
the
to
be acted upon, the
will be the con¬
effects
upon
business
can
positive
more
past
My
but
tive.
during the
General Machinery
passing day not only con¬
makes doubly impera¬
The
more* < promptly
the
every
firms
powerfully at
work, as has
Chicago R. I. & Pac.
reduction
tax
forces
continue to be
Mfg.
urged speed in enacting
for reasons which
I have
infla¬
while
tionary
Cinecolor
Old
factor
if price reductions are to come, taxes must be immedi¬
ately reduced. Illustrates effects of high taxes in destroying risk
incentive. Contends tax reduction would be deflationary rather than
inflationary and denies across-the-board reduction favors higher
income brackets.
Says present tax schedules abuse "ability to
Abitibi Power
Old
JOHN W. HANES*
By
Board of Trustees, Tax Foundation
Formerly, Under Secretary of the Treasury
Chairman,
in
Bates
surplus will be suffi¬
provide effective
taxpayer relief and to m;ake at the
struggle impends.
same time, substantial reductions
Treasury
ciently large to.
in the federal
(I am assum¬
debt.
It is
that,
mistake to assume
a
will in these contests, the government
proceed with its present plan of is' a mere outside observer, acting
reducing the Executive budget for in a detached way as the public's
1948).
We should not lose sight, representative.
That is not the
While labor and industry
however, of the great importance case.
of holding to a minimum every must carry their fair share of the
appropriation for the balance of blame for our present situation,
the fiscal year 1947.
primary responsibility must be as¬
The
problem; this Committee sessed against the Government it¬
We must not overlook the
faces is far larger than a mere self.
technical debate over fiscal pol¬ fact that, in the fixing of prices
which the public is called upon to
icy.
In the action you take, you
must weigh not only effects upon pay—^in recovering the mounting
future! Government revenues, but costs of production—one of the
the economic consequences inci¬ most important factors rs the cost
dent to \eVery change in taxation, of Government services; expressed
no matter what economic
groups in the form of taxes, which is
may be affected.
It's been a long compounded into the price of
ing
of course that Congress
r
Moxie
N. Y. New Hav. & Hart.
Old
Pfd.
Pathe Industries
'
Philip Carey
Polaroid:
Purolator Prod.*
Wis. & Pfd.
Government was
the
time
since
willing to think in terms
of goods and services which the pub¬
lic buys.
wishes to citi¬
taxpayer interests.
That
subordinating its
Textron
-
or
zen
>
Upson Corp.*
U. S. Air Conditioning
U. S. Fidelity & Guar.
If
we
really mean to go
about
the reducing the price level—and can¬
quicker we face up to that fact, cel out some of our wartime ex¬
let's begin at the
the sooner our economy will rest cesses—then
time
has
upon a
arrived,
now
and
substantial and permanent point where Government assist¬
ance can be most effective.
This
V
foundation.
United Artists*
the high cost of gov¬
is in cutting
United Drill & Tool "B"
*
Mr. Hanes be¬
the Senate Finance Commit¬
Statement by
fore
Vacuum Concrete*
tee, April
which today is a
ernment itself,
(Continued on page 40)
.
24, 1947.
Cent. States Elec. Com.
Con. Pull. Utility
Art Metal Construction
Crowell-Coilier Pub.
Federal Water & Gas
Standard Gas Elec.
Tide Water Pwr. Com.
'
WtRII & Co.
-
Sold
-
Quoted
'
.
Goodbody & Co.
Members N. Y, Stock Exchange
and Other Principal Exchanges
Broadway, New York
105 West Adams St., Chicago
115
Telephone BArclay 7-0100
-
"
Teletype NY 1-672
Consolidated Dearborn Co.
—
.
;
.
....
.Alenders N. V. Security Dealers Assft.
....
120 BROADWAY, N. Y. 5
REctor 2-8700
Common
—
Yields 8*4% at market
Strong in cash
Represents 2 modern, well located,
low cost office buildings.
Analysis
Buff. 6024
with
u
n
success
sf ul.
Long-range
thinking is vi¬
tally
impor¬
tant in, setting/
a •
future
The
on
Request
-
.
Incorporated
Members New
41 Broad
York Security Dealers Association
Street, New York 4
HAnover 2-2100
debt
is
to
trium¬
and
public debt is so immense
all budget savings
part of them are direct¬
retirement now,
will
or
only
a
ed
to
its
make
that
view
possible
government
directed
exclusively
relatively
What
Levi P. Smith
Spar¬
we
is
fore,
savings
to
debt
which
the
must
a
our
debt
little
plan
pattern
people
with
of
may
some
difference.
there¬
now,
life under
live with
degree
of
retirement and that taxes be con¬
cheerfulness and look forward to
commands
its eventual retirement with some
tinued
at
war
levels
degree
overshad¬
person
It
true that
is
and
we
are
threat1 of inflation
will continue to be as long
by
we
the
*
have such a monstrous na¬
life
war
of confidence. To tell a
tjiat he must go on all his
still carrying these drastic
taxes
is
conducive
not
of
cheerfulness and confidence.
It must also be grant¬
tional debt.
Any sound program must re¬
relief is in some re¬
lax the pattern o^ war taxes now,
inflationary and is likely must offer definite relief in such
to be
especially inflationary in form as will be encouraging toa
democracy where most relief
as many people £s possible and, to
will always go to the most "peo¬
counteract the inflationary effect
ple and where, therefore, that part of such encouragement, must rely
of the budget savings will swell
upon redoubled efforts to mobil¬
the pocketbooks of spenders more
ize the thrift of all the people to
than it will swell the funds of
drain off the spending-money and
enterprisers likely to use it to to turn back into the government
lower
prices or to create more
pool a flood of savings. It would
production and more jobs.
seem that the suggested tax relief,
ed
that tax
spects
All
of
however,
this,
account
take
into
action
on
a
i
Seligman, Lu bet kin & Co.
evenly
whether
that
fi¬
ity.
The
is 90%
political in
and bust.
boom
patterjL
up
whfrch
phantly, it will be done by en¬
listing the energies of the peo¬
ple for a long, steady, continu¬
ous. pull,
as contrasted with the
sporadic action and reaction cer¬
tain to result in an economy of
s,
and
steady
carried
be
is
u
o
problem
a
human or, if you will,
the sense that if the
con-
prove
carried
war
the
fails to
effect
of
populace which
taxes to victory
if combined with a
consistent plan
and balanced
for debt retirement
off
by
a
continued and increas¬
savings-bond
/nust 4be the line most
likely to enlist the overwhelming
*Statement of Mr., Smith be¬
popular support necessary to the
fore
the
Senate
Finance
Com¬
successful solution of this vital
mittee, Washington, D. C., April
and
Bob. 2100
retirement
t i
that some degree of tax relief
with a sound long-range plan
re¬
but
is necessary to
it, if the debt
to
•
■/
tirement,
has
ENTERPRISE PHONES
Dartf*d 6111
must plan now to promote
j
such
1-1286-1287-1288
Direct Wires To
debt
for
as
1926
Phila., Chicago & Los Angeles
we
There is every reason to believe
now is not only
entirely consistent
owed
.
N. Y.
spending.
says
respect by its logic and courage.
Bought
V
cheerfulness
and confidence iii future by enacting both tax relief and debt
retirement andithereby promote thrift to drain ofF inflationary
Savings banker
be
Grinnell Corp.
Circular upon request
EST
By LEVI P. SMITH*
President, Burlington Savings Bank, Vermont
all
Tennessee Gas & Trans.
Southwest Natural-Gas
or
the Floor Just Now!"
.J.
tan
Buda Company
Puget S'nd P. & L. Com.
tProspectus Upon Request
5y2s, 52
American Hardware
Bowser Com. & Pfd.
Derby Gas & Elec.
Bulletin
on
nancial stabil¬
Amer. Gas & Power
*
He's
Tax Relief Needed to Retire Debt
for
Warner & Swasey
,
"Sorry,
.
even
Taylor-Wharton*
-
BUSINESS BUZZ
Rednctionsjlmmedialely!
Why Tax
1926
ES T
Thursday, May I, 1947
COMMERCIAL & FINANCIAL CHRONICLE
THE
4
beyond.
24, 1947.
We
are
confronted
ing promotion of the
program,
.problem.
.
Volume
Number 4590
165
THE COMMERCIAL & FINANCIAL
CHRONICLE
5
(2333)
The Seasonal Trend '
on...
A
Behind-the-Scene Interpretations
from the Nation's Capital
Observations
;
HU
Waldheim, .Pla.t &
Co.,
308
Street, St. Louis 1, Mo.,
a circular givirtg a
list
of
176
important common
stocks, listed on the New York
By A. WILFRED MAY
■
XJL
In Stock Prices
JL I9IM/
North 8th
has compiled
TIIE PRICE
OF OUR
DEMOCRACY
Twenty Months Before Election Day the
Politicians Ghost-Write
the Nation's Economic
Senate
squarely
Republicans have decided to put President Truman
the tax reduction veto spot. That means they (1) won't
on
■R mny be naive to
expect
other
make concessions
to the White House; (2) will pass the House ap¬
proved tax bill with but slight modification.' It now looks as though
a
Democratic proposals that
with
any
deems
it
gress
be
rate
rejected.
reductions
Hiking
❖
ex¬
emptions would free uncounted
citizens
That
from
would
Federal
,
be
ury
the Senate Finance
Committee last week.
Committee
merce
international
un¬
hearings
.
it's
airlines,
ough perusal forces the conclusion that in essence
from being a sound technical
analysis—
it is a lawyer's brief
persistently arguing for a
preconceived objective.
In the first
on
still
wise from the viewpoint of GOP:
policy makers.
marshalled
,
theory Congress will not endow
the
sins
of
Administration
I travagance
and
the
of Republican
ness
ex-
righteouswill
economy
who must fork
to the
over
monopoly.
*
tax
*
*
ate
tax
Committee may get
reported out favor¬
ably before this week ends.
It's
just
as
apparent
now—
needn't
that
—
expect
landlords
legislative
any
resentative
off from
Miller
the
walled off
industries producing power
their
for
Federal
that
Power Commission be
from
from
consumption and
local utility opera¬
own
strictly
across-the-board rental hike. Both
tions.
major parties are playing prudent
politics on that issue. "Renters
tee
Mr.
Watch for formal
commit¬
hearings within a fortnight.
(Continued on page 39)
s
the
developed
of such movements
study
50 year period made under
over a
the'direction of Major B. Einstein,
partner
a
Waldheim, Piatt &
in
Co.
arguments
prove
"the desirability of main¬
says
Abitibi Power & Paper
present tax rates
for this year is emphar
by the size of the public debt."
But the
question must be asked when would this Admin¬
sized
A.
Wilfred
May
istration
(which has in the past soothed the
people's debt worries with the "we owe it to ourselves" reasoning)
conceivably agree that our $258 billion debt has been reduced far
enough to permit tax cuts? If the debt is unsound at $258 billion,
will
it be sound at 250, or 200?
lower level
opposition
be
of
Algoma Steel
Bell Telephone of
And in what generation will such
Mr.
to
reducing
Smelting
the
Famous Players of
Canada
Of course, the size of the debt at
$258 billion is dangerous, but
a
Minnesota & Ontario
ensuing from maintainance of the present, high tax rates
far outweighs the advantage of reducing the debt structure
than
Canada
Consolidated Mining &
reached, particularly in view of the current violent
Snyder and his Administration
outrageously high level of Federal expenditure?
structure
possible 2%.
Paper
by less
Noranda Mines
\
(Continued
on page
46)
By HARRY A. BULLIS*
Shawinigan Water &
President, General Mills, Inc.
Power
Let's Shrink Oni Worries!
Mr. BuIIis forecasts for normal future Federal taxes of $25 billion
and state and local taxes of $10 billion. Says this taxation requires
accordingly incentives must
be provided to maintain production. Proposes as tax sources u $9%
billion from individual incomes; $7 billion from corporations; and
$8V2 billion from excises and miscellaneous. Recommends only
slight reduction in corporate income tax rates.
By addressing
today,
taxpayers I forewarn you that I shall not
promise of your elimination from that privileged
t i
o
n.<5>-
However,
I
believe
a
sound
that
fiscal
program
is
possible
which
will
ber
of
States
progra^,:Aliving
have
ports
at
the
ute to
a
al
I
express
recommendations
shall
make
do
not
I
which
necessarily
represent the views of the Cham*An
35th
address
Annual
Chamber
IL.
S.,
of
by
Mr.
Meeting
.
of
Commerce'
Washington,
30, 1947.
Bullis
D.
the
of
C.,
at
the
April
\
•• because
I
heavily upon the re¬
others whom I consider
When
money
we
think
it takes to
of
run
how
^
much
ago
really
days.
long
n g
rer
if
he
another
fer
■
■
V
,
that
had
the' 21st,
born
to
be
he
century
would
22nd,- 23rd
in
the
or
Members
111
all
From
there
accounts
everywhere
a
feeling
is
unrest.
of
must come from, we have
difficulty in realizing that we
are facing a most complex prob¬
lem and a serious
challenge to
certain people
what
they
banks
thought of the
we
century
no
our
national
The
we
economy.
Federal
in. If
for the
coming year is very high. We
hope that Congress' will do some
judicious pruning f so that tax¬
payers may be afforded some im¬
mediate
there
relief.
should
Budget
After
their
Frederick
on
25)
k
Gehle
said
-
that
that
any
she
sometimes
our
.
on
the
to
come
homes
other century
have
-
been
a
-
than this
better
one.
Y.
NY 1-1026
7-0570
our
Only
on
F. BLEIBTREU &
BROKERS
at the
Waldorf said—"I must say
Foreign Securities
in all frankness that the economic
skies
not entirely
are
clear." He
Domestic Unlisted Securities
(Continued on page 22)
*A
talk
by
Mr.
Gehle
at
Comptrollers,
New
York
April 23, 1947.
Foreign Exchange
the
ConventioTr of the National Asspp
ciation
of; Bank Auditors arjd
t.)
Goldf-n Silver
City,
1
r-"~
Specialists in
on
Request
"
'
•
Electric Bond & Share "Stubs"
Bought—Sold—Quoted
•
Canadian and
Mexican Gulf
FREDERIC H. HATCH & CO., INC.
BROADWAY, NEW YORK 5, N. Y.
Established
Sulphur
MAHER& HULSEBOSCH
In
Corporation
&
Investment
63
N.
Y.
SECURITY
Securities
New York 5, N.,Y*
62 William St.
Teletype
Telephone
1888
Wall Street, New York 5, N. Y.
DEALERS ASSOCIATION
Bell Teletype NY 1-897
NY 1-2613
Branch Office
113
Hudson
f
Dealers
WHitehall 4-2422
MEMBERS
Teletype: NY 1-583
£
;
Philippine Mining Issues
Tide Water Power
,
v,
Domestic,
Brokers
platinum
York 5, N. Y.
79 Wall St., New
•
Boss Manufacturing Co.
International Cellucotlon Products Co.
120
m>
—y.—rm—'■ r " ~ r:
American Maize Products
Light Assoc. $2.00 Pfd.
Telephone: BArclay 7-5660
CO., Inc.
DEALERS
—
Telephone HAnover 2-8681-2
Common and Preferred
New York Hanseatic
Ass'n
Dealers
Security
that
...
street.
N.
speech before the Associated Press
thought
Henry Wallace, who is doing his
\
*Analysis and Prospectus
.
"It*
and
Cornelia Otis
Skinner, the actress.
nex^. year
page
W.
choice,
he
asked,
would
they
.
meet
not prefer to live in another
time?
bp substantial re-
(Continued
that
living
they had
are
that
talk
women
r:,
Broadway, New York 6, N. Y.
BArclay
Monday President Truman in his
where
■
F. H. Holler & Co., inc.
pre¬
24th.
enter-
an
i si
p r
the Federal
■
Mass. Power &
that these
.
Not
England Gas & Electric Assn.*
~
.
Information omRcquest
peculiar part to make this
century a memorable one, said
own
i!'
K;{toT
.
We notice it in the way men
of
,
Toronto
Company
to,draw the con¬
tangled
.
that we
newspapers
porter asked
and
1-395
Montreal
New York
Indiana Limestone
the
Government,
,
y
,
n,
uncertainty
.
Metal & Thermit, Corporation
New
u
are
WE TRADE
'
the daily
read
period of great
would
^
to
are
dead,]; is not
money
opin¬
which
shall
the
and
dy¬
economy.
ions
but
difficult
better
nation¬
The
Bullis
have
The Tax Burden After 1948
contrib¬
balanced
A.
You
clusion that human affairs in general are badly
relied
of
reliable.
gloomy forecasts
.
same
time
namic
or
regarding future, Mr. .Gehle
points out there always has been trouble and unrest in the world.
Contends, although we face serious difficulties, we should not talk
ourselves into a depression, and, in calling attention to our wartime
accomplishments vand greatly increased productive capacity, con¬
cludes we will bear our burdens and maintain our strength in the
days and years to come.
on
merely'" coincidental,1
burdens
taxpayers and
of my
add also that any resemblance be¬
tween ,.nay.: progtam; hhd other tax
lighten the
of
of* the United
company. Let me
Commerce
or
HAnover 2-0980
N. Y. 5
52 WILLIAM ST;,
'
Bell Teletype NY
Commenting
you as
any
p o s i
Harry
Vice-President, Chase National Bank
Co!
HART SMITH &
By FREDERICK W. GEHLE*
national income of $165 billion and
offer you,
or
chart showing the seasonal
a
trend of stock prices as
in
years
other perti¬
The circular also con¬
nent data.
tains
unbroken
15
together with
mote
the current economic injury to the workings of our present
enterprise
Taxes In the Years Ahead
with
of
records
time for tax
Snyder
*
hearings last Friday to huddle
on proposals
by Connecticut's Republican Rep¬
bill
back
■
behind locked doors
Finance
the
-
Committee
-
air
good chance the Sen¬
a
weeks
$
Commerce
members took time
❖
as
*
is not the
taining
House
collector.
There's
flagship
American
international flying
an
be most apparent to the fellow
place, the various
Secretary Snyder to
by
now
vein
single
any
line with
t
Exchange,
that
reduction, can simi¬
larly be brought forth at any time in the
future)
so
that acceptance of his arguments would pre¬
clude the lov/ering of taxes in
perpetuo.
In this
safe to wager and invest on .the
They well know
Thor¬
—far
>:=
After 10 days of House Com¬
taxes.
politically
*
new highs in special
pleading.
striking example is Secretary of the Treas¬
Snyder's statement on tax legislation before
A
legislate rent costs upward.
percentage
will
be
setting
Ergo, Con¬
most unwise to
for
to
seem
outnumber landlords.
ex¬
emption increases be substituted
,
national
government to treat tax
policy or any
degree of objectivity only 20 months before
election. Nevertheless the
economic pronouncements being
handed down by our Administration
leaders
issue
currently
the only important
alteration in the House formula will be advancing
the retroactive reduction date from Jan. 1 to July
1, this year.
Stock
Policy
dividend
a
St.,
Jersey
•
.■
!
City, N. J.1'"
;'iV
New York Bank Economisf
Mexico and Holland
—
The Inter¬
Reconstruction
and Development announced April
29 that a formal loan application
WASHINGTON,
$208,875,000 has been receiyed
the Government of Mexico,
and that the Government of the
Netherlands,
which
had
pre¬
for
from
viously indicated its intention to
apply for a loan, has now sub¬
mitted a formal application for
Says slowing down of business
quested
Government pf
the
by
re¬
development of
productive facilities which include
Mexico is for the
irrigation and hydroelectric proj¬
ects, highway construction, pipe¬
lines, railroads and harbor im¬
provements.
Government of the Nether¬
The
requested the loan to
portion of their more
has
lands
finance
a
over-all re¬
urgent projects in an
reconstruction
habilitation,
and
bringing the data up to date and
adding such explanations or com¬
ment as seem to us pertinent to
question under discus-
the whole
Leonard
Ayres,
economist
Co., who
died not so long ago, advanced a
Transit Co.
Terminal
Bayway
Coke
&
Coal
Davis
Stand. Wholesale
Phosphate
STEIN BROS. & BOYCE
Baltimore Stock
Members New York &
Exchanges and other leading
6 S.
exchanges
BALTIMORE 2
CALVERT ST.,
393
York Telephone REctor 2-3327
Bell Teletype BA
New
in the busi¬
ness world in the early twenties
and
wondered
whether history
would repeat itself.
The Ayres'
what had
Works
and Acid
which
postulated what he termed were
"primary" and "secondary" de¬
pressions following every modern
war.
Businessmen, too, remem¬
bered from their own experiences
Issues
BOSTON
slowing
rather
a
prices
a
of
most
up
imminent,
inevitably
desire
the
happened
theory, in a sense, is little more
than
a
description of American
economic development for the two
decades following World War I.
According to the Ayres' hypothe¬
to
I.
War
makes
it
that in his investigation he
clear
is giv-t
ing careful attention to the cases
underlying such trends as he be¬
lieves he can detect.
He is not,
the
of
market.
There
Montgomery, Alabama
Tele. BS 128
Teletype
Telephone
L. D. 53
&
3-6696
DES MOINES
MG
84
ST. LOUIS
may seem
Stix & Co.
INVESTMENT
SECURITIES
Stock
OLIVE
STREET
Stock
EQUITABLE
I
DES
MOINES
St.LouisI.Mo,
BUILDING
9, IOWA
Members
St.
Louis
Stock
Exchange
Bell Tele. DM 184
vari¬
right to find it. This raised the
question in his mind,
as
was
pointed out in the last article
(issue of March 20), whether there
would be a repetition now of the
SPOKANE. WASH.
American Air Filter
H.
SECURITIES
For Immediate Execution
Willett
or
of
Girdler Corporation
Reliance
Varnish
of Orders
Quotes call TWX Sp-43
Exchange
A.M.,
Murphy Chair Company
Pac.
from
Std.
10:45
Time:
on
to
Floor
11:30
Sp-82
at
other hours.
STANDARD SECURITIES
CORPORATION
Incorporated
1st
-
Members Standard
»
Floor, Kentucky Home Life Bldg.
LOUISVILLE 2, KENTUCKY
Long Distance 238-9
Bell Tele. LS 186
.
Stock Exchange
X of Spokane
Brokers -Dealers
Peyton
-
Underwriters
Building,
Branches
Spokane
at
Kellogg, Idaho and Yakima, Wn.
of
increases
some
in
supports the third
Manufacturers
these
of
that
namely,
positions,
with
the granting of such tax relief to
individuals
as
is
provided
in
the
proceed
Congress
1.
H. R.
now
amended.
as
to be the
same
now
as
or
I
In
The
time
less iden¬
after
World
should the timing be
much
as
six months.
certain
economist has found notable
declines,,just
as he had somewhat
expected to find them. Perhaps it
should be pointed out that this
of finding figuures
to illustrate a point or an
instance of grasping at straws. The
investigation has from all evi¬
dence been conducted on too high
a
level to suspect any such ma¬
of
selected data.
has
been
a
ex¬
John Snyder. The essence of
problem before the Congress
the country is the relation of
(Continued on page 38)
ury
the
and
G. KING
convenient
use
of
For instance, there
large decrease in the
(Continued on page~60>
f
r-'J;
to dispassionately take stock of
has come for us
nine
last
the
market
has had
the
a
siz¬
probable course of the stock
the
this must be constantly
Without doubt we
market,
kept in mind.
shall
have
for
a
very
time
selective mar¬
and all com-
able
ket
it
paniesyvill not benefit equally.
drop and
has had to
some
withstand
of
Era
some
vere
very
shock^
go^t
s
k
d
e
am
about
[he impending
Col. Herbert G. King
ecession.
Many
Strikes
Ended
:
se¬
Ever™tfere
I
except a few very
small time labor leaders, can see
that the era of strikes has come to
a close. Strikes are no longer prof¬
Anyone,
The public is
itable.
them
and
fed up with
begin¬
the strikers are
been ning to realize that they are losing
more
than they gain. The tele¬
at¬
talk prides down and phone strike is a good example of
the
futility
of
unenthusiastic
trying to protect them¬
businessmen/ have
frightened by the President's
tempt
nipulation
been
pressed by Secretary of the Treas¬
>v
the
have been
more or
significant fields of
production and employment dur¬
ing the last three to four weeks,
the
con¬
timing
economic, political, and foreign situation and to appraise the stock
market, while t>—
keeping
an of the President's. Therefore, the
eye
on
im- companies run by the ablest busi¬
pending nessmen are going to be the most
successful and
when appraising
events. During
three weeks ago.
trends
as
has
which
that
than
different
correct
the
bright star in their horizon.
considering present-day
even
to
as
a
King calls attention to economic, political and foreign situations
and contends despite difficulties and disappointments, all have a
being
the
clusion
to
Mr.
before, the
ably straining any theory too far
to expect it to duplicate the same
or
similar conditions at exactly
the same periodic intervals and
he has stated that he is ready to
as
leads
volved
the issues in¬
of
analysis
.
it was
figured, was to have gotten under
way a week or so after Easter,
to
Deferred
Our
By COL. HERBERT
much-oublicized depression,
is, two
Reductions Should not Be
Appraising the Stoch Market
If the timing were
is not just a case
Co.
BANKERS BOND
positions have been taken on this
question by different individuals
and groups.
These positions are:
following
Armistice
War I.
delayed by
Consider
different
three
least
20 months after the sign¬
the
of
War
NORTHWEST MINING
*
At
made.
at
time
the
on
reductions should be
stock
tical
American Turf Ass'n
been
has
which these
months
trends
,
like' to
economist discovered early
continue
LOUISVILLE
making
individual income taxes.
The economist believes it is prob¬
Meredith Publishing Co.
Phone 4-7159
I
the
involve
embarrassment
Member, New York Stock Exchange
patterns of business activity
following World War I was very
close, closer, in fact, than, in jus¬
tice, as he figured it, he had any
that
509
Common
subject,
so.
his
ing
Light Co.
Preferred
and
later
would
that
trouble
economist is doing or saying
World
3.30%
finding
der way
INCORPORATED
Iowa Power &
general
aspects of the
would
the reduction of
far in
too
certain individual income taxes, ai
more
two-year recession which got un¬
WHEELOCK & CUMMINS
Continuing Interest in
the
to
this po¬
such a general review
that H.R. 1 as amended
say
may prove
goes
of
Advocates
made.
sition
as
With respect
is
researches, as our readers
know, that the correlation be¬
THORNTON, MOHR & CO.
Street, Boston 10
Tel. Hubbard 3790
1,
amended.
in' what
ous
Connolly & Co., Inc.
be
against
R.
objective
tween current trends and the
24 Federal
H.
the actual con-r
mystical
the
of
nothing
The
in
Walter J.
rected
business operates
which
in
though it
Inquiries Invited
taxa¬
appropriate places can be discov¬
ered at which tax changes should
have been di¬
can
that is,
all issues
Request
Federal
of
criticisms that
points
economist
The
thus
Prior Preferred
field
be reviewed and the most
tion
(3) Proceed at once with the
point out that
enactment of H.R. 1 as amended
reasonably accurate that un¬ there is almost
as a first step in the relief of tax¬
doubtedly prompted the compila* u n i v e r
sj/l Harry E. Humphreys
tion by the instant economist of
payers
and then, carry through
agreement
the necessary data and the com¬
with the more detailed study and
on the propo¬
parison of the present figures with sition that the Federal tax rates revision of other features of the
those for the years and months are too
;
high and must be reduced. Federal tax system, j
The
National
Association.. of
immediately following World The principal divergence of view¬
dition
Municipal Bonds
entire
the
be
considerations
ALABAMA
Maine RR.
on
4
some
consulting any crystal ball
(1) Defer tax reduction until
or slavishly following any theory
the
present period of virtually
even though, as stated a.bove, he
full employment has ended; that
is entirely aware of what the late
is, when signs of a business re¬
Col. Ayres has written on the sub-r
cession are evident.
Tax reduc¬
sis, every war is followed by (1) a
ject. His approach to the problem tion made then, it .is said, would
boom, (2) a "primary depression,"
is statistical and analytical.
He stimulate business revival.
(3) a relatively long period of
believes psychology, as the word
f(2) Defer tax reduction until
city prosperity based on (contin- is sometimes loosely used, does
influence the" judgment and deci-*
*
Statement by Mr. Humphreys,
sions of businessmen but he thinks
MONTCOMERY, ALA.
to the Senate Finance Committee,
that the
psychological environ¬
Washington, D. C., April 25, 1947.
m
B|AA
Circular
it
-capitalize
and otherwise to profit from
the findings should they prove to
were—as
is itself based on wholly
&
as
deals
second
with
general taxation doctrine and procedure, and the
of the specific
general
of activity in all fields
business were imminent—al¬
ment
Boston
shake¬
severe
and
of
matters
The first deals with
sections.
My remarks are divided into two
some
,
need
arguments House-passed bill is unfair tax measure.
Stresses
for reduced taxes to expand savings and capital investment.
on
theory of the business cycle
All
in
Denies high taxes keep down inflation and refutes
reductions.
tax
months now, as we have pointed out in these columns
others that
and replies to criticisms against it. Says tax reductions
deferred, and debt reductions are possible along with
should not be
before, the last time only six weeks ago, an economist for one of New
York's
largest banks has been<$
:
—
spending much of his time com¬ ued) farm depression, and (4) a
paring the business trends since "secondary" or major economic
the recent war with the business collapse.
It was probably as much to test
trends that followed World War I.
Because of the interest which our the validity of the claims being
by the theoreticians and
readers have shown in his find¬ made
Col.
BALTIMORE
measure,
discouraging the flow of American funds into poten¬
Feels still too early to tell
definitely whether much-publicized recession is really upon us.
down
.
Humphreys, in presenting views of NAM, upholds House tax
Mr.
country by
ings, we are again publishing here
another
article
on
the
subject,
.
-
tially profitable investments abroad.
some
Association of Manufacturers
National
Vice-President, United States Rubber Co.
-
inability of Big-Four to reach agreement on future of Europe will
have a strong tendency to depress economic conditions in this
for the Cleveland Trust
Baltimore
activity after Easter has materialized
sion.
Industrialization program. 1 *
By IIARRY E. HUMPHREYS, JR.*
Chairman, Government Finance Committee,
as
For
loan
the
of
purpose
Grounds for Immediate Tax Relief
business trends were reversed 20 months following Armistice
after World War L Stresses prices, too, have ceased their upward
climb. Holds unsettled condition of the European markets due to
just
$535,000,000.
The
Says Business
Trends Still Same as After World War I
Seek World Bank Loans
national Bank for
Thursday, May I, 1947
COMMERCIAL' & FINANCIAL' CHRONICLE
THE
'(2334)1
V
to
selves from his
the
campaign to lower
of /finished products
the /same time raising
prices
while
at
prices
and
wages.
When we add^bo this the effects
of the strikes and shortages, it is
no wonder that the poor average
businessman is confused.
commodity
-
,
So.
many
executives
themselves to be
allowed
carried away by
dufing the
war
period, that they seem to
have forgotten that business is al¬
ways a struggle and that the b9sis
of modern business is service. The
successful order taking
aim must be to
produce more
and
strikers
where
the
ever
hoping to get any¬
the sympathy of
without
like
know
been
labor bill
public. (The wise leaders
Lewis, Green, and Murray
that Congress has at -last
goaded into preparing a
that will once and for all put an
end to the abuses of labor. Their
main fear, at the present time, is
that President* Truman,
much
against his will, may be jockied
by the strikers, into a position
where if he vetoes the Labor Bill,
it would mean his political sui¬
cide.
The President
has enjoyed see-
law] ing his political stock rise during
of
supply and demand will do j the last three months. The three
more for prices than any campaign 1
(Continued on page 50)
sell for less.
The
inexorable
Volume
165
THE COMMERCIAL &
4590
Number^
long period of
Secretary of Commerce
;
>
Calls it a consistent
policy, and asserts tariff reductions will be carefully watched to
avoid adverse effect upon American industry. Points out importance
of both larger exports and imports to nation's welfare.
.
Yale
We
trade.
and
not
pose
in
Gotham
our
such
of
their
products
we
can
to
bor.
Reciprocity
outgrowth
of
is
development
domestic
policy
lished.
What
Our
express my own
(Continued
natural
views
-Basic
statement
the
under
before
Committee
firmly estab¬
produce beyond
House
of
Ways
last
Secretary
on
Means
investigating
agreements program, Washington,
D. C., April 28, 1947.
John
tance
hitched
prosper¬
closely
as
States.
in the
come
How
critical
a
dex
in-
the
of
economic
and
political
ledger,
The record of American
ters' groups testifies
of the
aware
tance
of
an
expansion of
organizations,
impor¬
that you
are
we
imported
amounted
choke off
measures,
tional Trade
The
to
Wall
a
total of $7.1
was
.as
Journal."
the
it
had
with
Co.
a
strike
well
against
A.
as
the
M.
Exchanges
Kidder
contract
more
&
Co.
tee had hoped to consult them oi*
the
to
their
own
were
dismissed
agreed
the
to
issue.
wages
who
The
have been
to
was
they
became
but
it
of
by
should
last
be
compelled
any
firm said that the arbitrator could
to
raise
the A. M. Kidder & Co. settlement
to
wages
the
aggregate
than $25,000
not more
the whole firm,
year
a
The Ex-1
changes deduct dues from the pay
employees, according:
of unionized
of
the
contracts.
night,
Tuesday
for
(Continued
including those to
the
At
time
The
latest
cates
the
we
information
of
nalistic
April
22,
the.
59)
)
!
of
the
Fi¬
•
HAS
and
York
New
PLACED
BEEN
WITH
CHARGE
IN
OUR
OF
CALIFORNIA ORGANIZATION
SOUTHERN
HEADQUARTERS
IN
LOS
ANGELES
AND
Delta
Sigma
EDWARD
—
HAS
Crouse As Partner in Firm
PHILADELPHIA,
BEEN
WITH
GLASSMEYER, JR.
APPOINTED
SYNDICATE
HEADQUARTERS
IN
NEW
MANAGER
YORK
PA. —Rufus
Waples & Co., 20 South Fifteenth
the
have
will export at least $16
41)
York
Waples & Co. Admits
to
on page
New
—
Rufus
Street,
(Continued
M. FRENCH, v/ce President
same year.
Crouse
Commerce
THAT-
was
Association
fraternity,
Chi, in the
the
billions of goods and services., We
.
President
following prospects for
of
the
of
Writers
indi¬
Department
'ANNOUNCE-
WE
firm.
manager
J
admitted
limited
Mr.
of
Jacob
H.
partnership in
Crouse
has
the Frankford
Co., I no
Blyth
been
office
14
WALL
STREET
of the firm since 1931.
NEW
YORK
5,. N
.
serve
United
Y.
Kingdom 4%, 1960-90
to
the
We
Rhodesian Selection Trust
are
MR.
Interna¬
are
Gaumont-Rritish
1
■'
prospects for the current year
veal in powerful terms the
imporN.
Y.
Stock
115
NEW YORK
<
»
our
us
of
announce
KLEIN
i
Trading Department, and
PETER E.
(both formerly ivith
Exchanges
MOLLOY
Holsapple & Co.)
the installation of a direct
private wire to
CO., INC., CHICAGO,
6, N. Y.
New
ILL.
York Stock Exchange
Members
New
York
30 Pine Street
Teletype NY 1-672
Teletype N. Y.
City, April 22, 1947.
of
E.
Members
Exchange and Other Principal
BROADWAY
Telephone BArclay 7-0100
the association with
Stanley Heller & Co.
Goodbody & Co.
Members
.
Importers, New York
manager
HICKEY &
British^Securities Dept.
re¬
*An address by Under
Secretary
Foster before the National Council
of American
V
We also
and
announce
CHARLES
MR.
to suc¬
year,
as
"
international
last
pleased to
*
pending
1-1934
Curb
Exchange
New York
Tel.
of
on page
Mr.
Broderick
,
*
longer:
to pay dues to the union.
JO
Mr.
1939-40
new
Thursday night has still to be
named, but it is understood ,he
will be picked by tonight.
The
publicity director
was
•
woulit
The Exchanges couldn't see wh^
employees who had taken advan-'
tage of the expiration of the con-:
tracts to resign from the union»
is,
arbitrator
named
when
disagreement connected with th0
Exchanges.
dispute,
The
firm,
that
limited arbitration
arbitrator for
issue,
have all it could to settle the
reported in these columns last
Thursday.
an
wage
evident that the Committee
The Mayor's Com¬
basis of settlement
a
selection of
as
the
on
same
were
a
Co. to sign
less
or
the
sentatives of A. M. Kidder & Cq.
also present as the Commit¬
arising out
first contract.
The union had intended to call
&
of the editors of
one
Scophony1, Ltd.
pur
for
&
Governors of
professional chapter of the jour¬
billions,
$8.2
-
transactions
of
member
a
Dow.-Jones
of
Street
He
President
assets in this country.
Organization, will be
story of
dispute
Kidder
of
your
and
indispensable if they
ceed.
was
nancial
and
Your outspoken
future
such
M.
Meeting
Exchange;-Francis Adams Truslow, President of the New York
Curb Exchange; and representa¬
tives of the union at the City HaJI
to try to iron out the new diffi¬
culty which had arisen.
Repre¬
_T.
with
Attends
afternoon
have supported
you
trade.
of
staff
Board
multi¬
Through
uncertainties which
support
In
which
all constructive efforts which have
been made to reduce obstructions
and
another
A.
of negotiations for
Drive.
imports.
total of
our
The difference, the gap, be¬
tween our exports and our im¬
tremendous impor¬ S -i
lateral world trade.
increasing
billions worth of goods and serv¬
1947:
health of the entire world.
of
contracts
barred.
last (April
29), the Mayor's Committee met
with Emil Schram, President of
the New York Stock Exchange;
John A. Coleman, Chairman of the
hap¬
of that date because
as
across-the-
but
are
trict during the Second War Loan
we closed by gifts, public
private, of more than $3 bil¬
expands lions, by loans of three billion,
years to
and by drawing down foreign dol¬
will be lar balances and sales of
foreign
iness
-
of
ports,
United
well your bus¬
ljL
the
ices.
the
_
the welfare of
and
1946, we exported a
$15.3 billions worth of goods and
services. On the other side of the
that of any
other group in
as
Foster
engaged in activities"
In
ity
C.
are
The1®"
importers
and
&
Doremus
importing
to world peace
William
"The
West.
est of
now
Exchanges
for the Victory Fund Committee in
the Second Federal Reserve Dis¬
business inter¬
is
formerly
Co. and
.
.
recently been,
Broderick,
a
graduate
of
the
University of Minnesota, obtained
his early training in the Middle
national welfare
world.
news
its
canceled
as
been
agency and is in charge of the
oublic relations and news division.
was
Coleman
It will be recalled that the union
mittee found
Broderick is Vice-President of the
He
>
much,
Tuesday
Sunday,
in the A. M. Kidder & Co.
Broadway, New York City, ac¬
cording to announcement by Wil¬
liam H. Long, Jr., President. Mr.
the
for
'
union's terms.
new marketing and dis¬
Expresses confidence in success of
in the business of
our
of
Company, advertising agency, 120
materials and search for
importance to
has
Broderick
director of
a
to
midnight
force A. M. Kidder &
P.
elected
Secretary of Commerce
tribution methods for imports.
Geneva Trade Conference.
of vital
issue
'
Department spokesman stresses postwar growth in vol¬
foreign trade, but points out need for larger imports to bal¬
ance dollar
payments.
Says only practical limit to our exports is
supply of dollar exchange, which cannot indefinitely be supplied by
government lending, gifts and investments abroad.
Favors im¬
men
the
in
13.
Doremus Go. Director
of
You
appeared
John Broderick Made
Commerce
raw
a
a
By WILLIAM C. FOSTER*
porting basic
public
was
trade
In World Commerce
ume
He
the occasion of his 80th birth¬
March
at
April 20.
and
in the "Chronicle."
His
contribution, an address at
Yale-Club, New York City,
day,
Opportunities
Under
organization
improvement.
peared
43)'
and
contract
,
tions have from time to time ap¬
the im-'
on
on page
Irving Fisher
prolific writer, and his contribu¬
and they
of Commerce W. Averell Harriman
in¬
now
we
have ; even
■
world
health
the
la¬
and
the
dustrial
words
greater meaning today,
use
wonderful
our
that, his
feel
Prof.
tho
between
have
board increases
disagreement
was
raises
how
and
membership in the union follow¬
ing the expiration of the union's
an
peace
I
basis
a
The
week
granted by the firm. The arbitra¬
tor is to say who gets the money
the employees of the two
Exchanges who chose to drop their
advo¬
of
cate
indus¬
our
tries
McKinley in his last speech,
made in Buffalo on Sept. 5, 1901,
harm
without
W. Averell Harriman
as
also
found
last
t
:
whom
to
pen
reforms,
ardent
and
evolved around what
curren¬
was
dent
shortly before his assassination.
together
and bank¬
cy
ing
Ex-<$>
means
solution.
and
this
up
[
AFL, and the New York Stock Exchange
of resolving Wall
disputes of the pres¬
time, put its collective heads
ent
champion of
dollar
flared
Street's labor
a
the commodity
other
and
ways
Irving
Fisher, long
everything spirit of the times."
and buy little
The far-sighted American from
or
nothing.... whom I have quoted was Presi¬
customers
80
years' old.
commerce
disagreement
change, but the Mayor's Commit¬
tee, headed by Grover A. Whelan,
which has been seeking to find
Dr.
was
Another
i
United Financial Employees,
and
the
New
York
Curb
at
Hos-
1.
a
Fisher
re¬
take from
Employees' Guild, CIO, wants U. F. E. to join it in
protesting to Congress against so-called anti-labor bills.
.
fan¬
should
i t
p
cied
We
Financial
on
29
Exchange and New York Curb Ex¬
what is to happen to employees of Exchanges who
over
| resigned from union after contracts with the Exchanges expired,
in
York
April
problem.
Commercial wars are
unprofitable.
A policy of good
will and friendly trade relations
security
will prevent reprisals. Reciprocity
that
we
can
forever, sell treaties are in harmony with the
must
died
New
The expansion of our trade
is
the
pressing
export past.
our
.
change
Univer-
sity,
By EDMOUR GERMAIN
Mayor's Committee, headed by Grover Whelan, seeking to resolve
Wall Street's labor disputes, settles another argument between
U. F. E. and New York Stock
.
tical expert and for many years
Professor of Political Economy at
~
.
published in
were
"Chronicle."
t
many
Irving Fisher, internation¬
ally-known economist and statis¬
....
....
and
.»
(
currency over
years
Dr.
:
I should like to preface my remarks by recalling the words of a
far-sighted American:
v
^
A system which provides^
domestic
consumption must
a'mutual exchange of commodities our
is manifestly essential to the con¬ have a vent abroad.
"The period of exclusiveness is
tinued and healthful
growth of
.
of his Articles
1 the
Administration's Trade Agreements Program.
u
%
on
proposed reform of
By HON. W. AVERELL HARRIMAN*
Secretary Harriman quotes late President McKinley in support of
(2335)
Irving Fisher Dies at 80 U. F. E. Seeks Collective Bargaining
L
Well known economist succumbs
Rights for Employees of Drysdale & Co,
in New York
April 29. Had
Reciprocal Trade—A Consistent
Bi-Partisan Policy
.
FINANCIAL CHRONICLE
5, N. Y.
"WHitehall 4-9200
X
V'
Thursday, May 1, 1947
COMMERCIAL & FINANCIAL CHRONICLE
THE
(2336)
8,
dividend rate should prove
this would
indicate a
price-earnings ratio of about 6.8
and a yield of 10%. There is, of
course, no "when issued" market
as yet for the stock.
$1
Expect Agricultural Price Drop!
correct,
By H. S. CHERRY*
Vice-President, Lionel D. Edie and Co., Inc., New York City
Asserting agricultural prices
Public Service Co. of New
Mexico
sub-holding company in the Cities
period of years has disposed of a large num¬
ber of its properties.
Finally the four principal remaining subsid¬
iaries, all located in New Mexico—Albuquerque Gas & Electric Com¬
pany, New Mexico Power Company, Las Vegas Light & Power Com¬
pany and Doming Ice & Electric Corppany—were merged last fall
into Public Service Company of^
.
Traction last
Light &
Federal
he was un¬
certain whether they would mere¬
1947-48. At that time
.
.
EVENTS
Investment
In
?
Sees possible drop in farm product prices of from 25%
i
foods,
in
Warns banks against
Field
ductivity.
May
1947
2,
Pittsburgh
Association
(Pittsburgh,
ly issue more bonds or whether to
refund the old bonds at the same
posed (1) to retire its $6 preferred
at $100 plus any dividend
time, with competitive bidding for
the increased issue.
On Dec. 30
The
Securities
May 15, 1947
to
come
prices of most agricultural products are too high and ought
down.
It is my theory and my faith that they will come
Pittsburgh.
asked permission to
$1,000,000 for construction
requirements
on
a
2%
ninemonths promissory note and this
was approved in February.
Last November the four prin¬
30%.
to
Pa.)
Traders
First Annual Outing
September filed a dissolution plan
with the SEC under which it pro¬
stock
(2)
accruals;
stockholders
the company
to give preferred
"stubs" for the $10
borrow
redemption premium (in case the
SEC or the Courts should grant
it) leaving cash in escrow to cover
the
liability;
(3)
organize the
by the
company asked the SEC to post¬
over miscellaneous assets and as¬
sume
all remaining liabilities of pone liquidating proceedings for
Federal Liquidating Corp. to
Federal Light;
of
formulate
could
for
plan
a
ac¬
the entire stock of the
of Public Service of New Mexico, company./The SEC denied a re¬
quest that the Nov. IB hearing be
one share of Federal Liquidating
Corp., and $11 cash. As holder adjourned for six months and
gave the communities two weeks
of 1 64.7%
of
Federal
common
stock,
Cities Service Company to present their views. No further
its
receive
would
stock
common
own
339 639
of
Service
JPublic
one
quiring
share
shares
available, though perhaps it may
account for the delay in the grant¬
Mexico,
New
'
and the
It
net
be
ing of final approval by
former
disposed
of
of
was
income
of
Mexico
ended
that time that
'reported
July 31
No report
Public Service
for
the
was
12
New
to describe its exact set¬
dating
Company.
However, such
not be
large. The consolidated plant
account, including intangibles (at
cost or at original cost
as ap¬
com¬
At the recent stockholders'
meeting of Federal Light & Trac¬
tion, President Nichols estimated
that the new company would earn
at the rate of $1.47 in 1947, and
might be expected to pay divi¬
dends of $1 per share.
proved by the state regulatory
commission)
amounted to $14,562,000
serve
and the depreciation re¬
$2,309,000.
Operating
for 1946 included $2,-
to
revenues
878,000 electric, $1,230,000
Public Service of New Mexico gas, $292,000 water, and
assumed four issues of first mort¬ ice—total, $4,428,000. Net
gage 3 V2 % bonds due 1968 which approximated $685,000, it
had
all
been
issued
in
1941
by
natural
$28,000
income
is esti¬
Light & Traction r is
(al| held
currently quoted around 22 on the
Mutual Life Insurance Company), New York Stock Exchange. Ac¬
the total amount approximating cording to President Nichols the
$5,500,000.
These» various divi¬ stock of the Liquidating Company
sional bonds would probably be would be worth about $1.
De¬
Federal
operating companies
by the; John Hancock
Field
would
be' still
The
greater
made
were
to
national
income
after
and
modesty
we
billions more
is going to the producers
money
of
of the hazards
would
of
proportion
prediction.
about
But
life
this
is
Philadelphia An¬
the Philmont
is
receive
nave
an
right and go
enjoyed
money
which
farm
H. S. Cherry
Bond Club of Baltimore Annual
the Elk-
ridge Club.
June 6, 1947
Club
Bond
of New
Day outing at the Sleepy Hollow
Country Club. Scarborough, N. Y.
of Toledo
Club
Bond
nual
Golf
Outing
at
13th An¬
take
12.7%.
50%
more
than
Country Club.
1947
12,
St.
(Minneapolis-
are
ments, wages,
and
Bond Club 26th An¬
Picnic
Yacht
at
White
the
Bear
preceded
night, June 11. with
cocktail party at the Nicollet
Hotel, Minneapolis.
Club,
to
be
Wednesday
June
1947
13,
1947 (Cleveland, Ohio)
Bond
Club's
annual
and silver anniver¬
celebration.
•
;
.
spring party
sary
are
in
an
it with farm in¬
trying to state the
ultra-conservative
This is
one
of the most
examples
if the shoe were on the
other foot
eno
instead
end
of
of such
■Learner
Pullman,
on
paying
receiving
disproportions.
would
ue
(Continued
1947.
the
The
screaming
on page
for
46)
Bullish Factors Accumulating!
By
;
LAWRENCE KLYBERT
With Josephthal & Co., Members
Stock market analyst points out, on
New York Stock Exchange
basis of earnings yields, and
today's common stock prices are lower than at any time
years. Looks for discounting of good news all in a rush.
prospects,
in last 20
•
market's downtrend ta
get under way very soon.
True, the market has ignored numerous
1947 (Philadelphia, Pa.)
pieces of - good news, and has<^
13,
June
Again the
of favoritism
of fate in the history of economics.
One can only imagine what would
paper
4
Cleveland
We
striking
to. National in¬
know, is all pay¬
salaries, dividends.
Wash., April 20,
Municipal Bond Club of Boston
Outing.
' •
| ;
;v'"''
■ ; ' ■'!
1
.
compared
manner.
consuming
Conference of Banking,
Annual
;
income
income.
farm
situation
presented by Mr.
Cherry at the Pacific Northwest
(Boston, Mass.)
I*
income only
includes
national
and the farmer were on the
*A
nual
the
as
products, other than
foods, have risen only
Income on the farms is up
come.
Paul)
Twin City
much
disparity would be even greater if
we
took
only non-farm income
of the national income
you
as
aavance
of
swollen
they used
come,
June
They
as
National
high? They are too high because
they take too much of the con¬
sumers' income. Before the war,
Inverness
about
but
1939, agricultural products took
8.5% of national income. Now they
(Toledo, Ohio)
price
178%.
145%.
in
June 6, 1947
a
of
260%,
Why are agricultural prices too
York-Field
high
and
65%.
to the
thinking of the audience.
YoAk)
(New
today's
at
supply has increased.
Price
de¬
speaker
contribute
to
than
rather
the
protect
to
signed
is
if total national
even
average
advanced
Field Day and Outing at
they
prewar
of
In other
words, they are selling 2.75 times
prewar. It happens that they have
to
equivoca t ion
and hedging,
(Baltimore, Md.)
than
their
as
remainpn
June
6, 1947
,
Since 1939, these products
level.
give careful
study to what
Day at
farm
income
all
do in
can
$7.3
commodities
full realization
one
use
taxes.
ahead without
June 13,
mated.
the merged
Club of
disparity
due
is
all
etc., received by individuals.
state¬
d
Country Club, Philmont, Pa.
very
pany.
of
(Philadelphia, Pa.)
May 23, 1947
probably
would
amounts
ro a
ment
(Washington, D. C.)
Meeting
of the New York Stock Exchange.
of Federal
$1.20 a share.
Mexico
absence
the new
up.
analysis of the consolidated report
of Federal Light & Traction seems
to indicate earnings of
$1.30 a
the
the SEC.
The consolidated 1946 report
Light & Traction may
include
some
figures for small
miscellaneous
properties
which
will be taken over by the Liqui¬
of
months
has been published for
year
1946, but an
for
the
official report for
company,
calendar
share
an
in
difficult,
is
It
at
later date.
New
the
the
shares;
would
stock
some
number of Federal
same
Liquidating
of this development appears
news
of
b
in
nual
This
soon.
Association
of Stock Exchange Firms—to be
addressed by Edward Hopkins, Jr.,
Drexel
& Co., President of the
IBA, and Emil Schram, President
Bond
and<s>
down
Club,
Shannopin Country
Dinner
six months so that they
three to
(4) distribute
each share of
and
holders
the
to
cipal communities served
take
the
at
farm lands that
may be temporarily severe.
agricultural loans for purpose of increasing
farmers' land holdings but upholds loans to raise man-hour pro-
decline
Service System, over a
New Mexico.
for
COMING
Light & Traction, a
Federal
longer have expanding money
are competing
larger share of consumer's dollar, Mr. Cherry predicts price
no
supply to bolster them, and manufactured products
.
I
pronounced reversal of the
look for a
industries
now
facing
several
cash and the $1 for
years of exceptional activity.)
Oil
gage. issue
presumably with a liquidating stock would leave $10,
such as Congressional legislation firms' first quarter-1938 profits hit
lower interest rate. Last Novem¬ indicating $10 value for one share erch Country Club, Llanerch, Pa.
hard by low prices. — (Oil firms
now pending, to revise the
Wagner
ber President Prager told the SEC for the Public Service of New
Labor Act, and
also to induce now enjoying high profits, de¬
June 14, 1947 (Chicago, 111.)
that t his
company
would " need Mexico. Assuming that the esti¬
Exchange sus¬
taxes substantially. However, the mand, prospects.)
in
mated earnings of $1.47 and the
$4,000,000 for
improvements
Bond Traders Club of Chicago
large accumulation of good news pends Whitney. (That sort of thing
annual Field Day Party, Acacia
out for good.)
..
'
now
backing us up may be dis¬
Country Club.
counted all in a rush, as has fre¬ 1
March 12 to 26: Facing deficits,
i
Trading Markets in Common Stocks
quently happened before. An ex¬ railroads seek wage reductions.—
June 16-17,1947 (Cincinnati, Ohio)
ample of that is 1938, when the Steel production rises to 32.1% of
Bates Manufacturing Co.
Municipal Bond Dealers' Group thick
gloom
prevailing in the capacity.—John L. Lewis says La¬
*Crowell-Collier
1
;
of Cincinnati Spring Party.
spring was dissipated with a rush bor must recognize Capital's right
Bausch & Lomb Optical Co.
Liberty Aircraft Products
profits — Selling . wave
upward in the Dow Jones Indus¬ to just
June 20, 1947 (Milwaukee, Wis.)
Buckeye Steel Castings Co.
Rockwell Manufacturing Co.
»
trial, Rail and Utility Averages of breaks world markets as interna¬
converted into
a
single first mort¬
ducting $11
Philadelphia Securities Associ¬ shown little disposition to antici¬
ation Annual Field Day at Llan- pate further constructive factors
■
Milwaukee
S. Potash
U.
picnic
*Prospectus
on
Request
Club
Bond
Merrill
at
Hills
annual
Country
point, it may be worth¬
At this
tension
wage
cuts
increases.
—
Steel
weighed as basis for
— Labor sobered by
lower prices.
extraordinary
current business lay-offs. — Cumulative effects of
conditions, profits, and prospects, margin calls regarded as main im¬
June 27, 1947 (Westfield, N. J.)
and those of ten years ago, as re¬ petus in stocks decline. — (The
Bond
Club
of
New
contrast of current conditions with
Jersey
vealed by scaninng a few news¬
Spring Field Day at the Echo
those indicated by these headlines,
paper
headlines of the springLake
is obvious.)
Country Club, Westfield, summer of 1938. These follow:
Club, Waukesha County, Wis.
'
tional
45% to 50% by mid-summer.
•
note
to
while
the
contrast between
.
Jackson & Cubtis
Established
1879
.
New
Jersey.
March
revise
July 15, 1947
Central Arkansas & Eastern Ry.
Golf
Country
Stephensville No. & So. Texas Ry.
.
5s, 1940
.
Party, Orchard Lake
Club.
Also a cocktail
party and buffet dinner on July
14 at the Savoyard Club, Detroit.
Aug. 10-14, 1947
(Boston, Mass.)
National Security Traders Asso¬
ciation annual convention.
Gilbert J. Postley
&
29 BROADWAY, NEW YORK 6, N. Y.
Direct
Wire
to
Chicago
Co.
New Deal must
says
Baruch^ if
(Detroit, Mich.)
business is to rise. — (Now being
Security Traders Association of revised.) Steel operations at 29.3%
Detroit & Michigan Annual Sum¬
of capacity.—(Now close to 100%).
mer
5s, 1940
1, 1938:
policies,
Court upholds closed
shop.—(Labor legislation now in
Congress to eliminate closed shop
agreements.)
Domestic
copper
Supreme
price 9 cents a pound.— (Now
price 90
pound.)
a
March
pound.— (Now 21
21c
?0-Dec. 6,
1947
(Hollywood,
Fla.)
Investment Bankers Association
Annual Convention.
$2.50;
and for
pected to earn over
2
to
auto
9:
General Mo¬
in black in
firm
lone
first
quarter.— (Now all in black.)
of U. S. Gypsum sees
hope of building revival in
Pres. Avery
little
1947 is ex¬
$7V2, and pay
about $4.00. Funded Debt has been
entirely eliminated;—Net Working
Capital is well over $170 million.
Price range this year, 42 high,
a paid
tors
Nov.
Anaconda Cop-*,
example, reported 1937
net profit of $3.65 a share, — had
$66.6 millions of funded debt —
had net working capital of $79
million; paid $1.75 in dividends;
(earned $1.17 in 1938 and paid 500
dividend); sold as high as 69^ in.
1937; 42Vs in 1938. — (Currently,
Anaconda earned $3.11 in
1946,
March 28, 1938:
per, as an
1938.—(Building and construction
(Continued on page 45)
:•
Volume
Number 4590
165
THE COMMERCIAL & FINANCIAL CHRONICLE
Abundant Farm Production with;
Building in 1947
(2337)
Future Real Estate Prices
By GUY T. O. HOLLYDAY*
Surplus Food Allotments
V;
By HON. CLINTON
Secretary
P.
President,
Agriculture Department head
well
floor be put under food
under prices and advocates buying of
urges
sumption
as
pluses,
surplus food allotment
a
at home and abroad.
programs
to
as
in
sur¬
and special marketing
program,
Wants scientific knowledge applied
With
my
practical policy for American agriculture—a policy of
organize d,<^
sustained, and to help maintain balance between
realistic abun¬
commodity requirements and pro¬
dance.
show
to
duction.
I want
have
from
tain
and the
balance
a
between
con¬
sumption
the
sound
that
and
ca¬
not
only to serve the general welfare
but also, and not incidentally, to
the best interests of United
States farm people.
In order to
portunity for
it
this
op¬
balanced program,
necessary for me to
three points: (1) how much
will
cover
food
show you
a
be
fiber
and
need
we
or
can
lably expect to
needs
use, (2) what
in terms of farm
mean
sand types of farming, and
be needed
programs may
than
aside the matter of what
ought
to have—either for good diets or
good business. Let us look at the
*A statement by Secretary An¬
derson before the House Commit¬
tee
Agriculture, April 21, 1947.
on
eral
(Continued
we
on page
that
is,
prices
not
the
George Goldstein
of
each
stand¬
now
tal
that
the
entirely out
of
that
other,
basic
four
likely to decline substantially because of high
power, heavy foreign demands, and use of
parity price support. Foresees large 1947 crops.
It is
generally agreed that agricultural prices are too high and
that they are slated to come down. Farmers realize that the prices
nets
prod-
<$>
ab¬
are
farm prices were 12%
compared with
general
those of other
ever,
commodities.
even
with
Agricultural
more
economists
farm
are
the
warning
farmers
now
prices
are
line?
J. A. Guthrie
the
The year 1939
is frequently used as the basis for
comparing the relative rise in
prices and incomes in recent years.
Although that date is reasonably
satisfactory for most commodities,
is
not
particularly
good
measuring
the
rise
in
agricultural prices.
In
that year farm prices were con¬
a
bench-mark
siderably
for
lower
than
those
of
other commodities
level
a
judging by the
prices during the 1920's,
of
period
in which
consider business
we
a
as
generally
whole
was
relatively good and in which the
farmer
was
not
off.
Using 1926
ably
a
base
a
particularly well
as
better year
a
base—prob¬
on
which to
comparison—the Bureau of
this
we
presented
by
Prof.
•Guthrie at Pacific Northwest Con¬
ference
fact, the import¬
have expected that prices
the
basic factors
level
of
Banking, Pullman,
Wash., April 20, 1947. <
on
farm
determining
prices?
The
principal ones would seem to be
following:
(1) total purchas¬
ing power available to the con¬
sumer; (2) the percentage of that
the
income
spend
the
consumer
chooses
to
farm
products rather
than on other commodities;
(3)
the available supply of agricul¬
tural products in relation to con¬
sumer wants, and (4) the foreign
taking of farm products.
on
4-s yet I
of
see no clear evidence
immediate decline in con¬
an
purchasing
sumer
economists
lieve
1947
and
Many
power.
businessmen
be¬
that
-
by the second half of
purchasing power in the
hands
of
consumers
diminished.
But
Will
barring
a
have
wide-
scale renewal of labor troubles
some
unforeseen
believe that
♦Paper
still too high at
are
must drop, but they have not.
In
fact, since the beginning of 1947
they have risen about 10%. What
How far are
it
to
a period still
the farmer—
questions are, when and how
far will they fall.
For some time
sound.
Of
favorable
prices
Granted
view, I
belie ve, is
OUt
1910-14,
ant
This
farm
prices.
How¬
with
1926 — or
present.
to
prepare for
lower
prices.
,,
lower than
wholesale
compared
(4) A Charge for the Risk Haz¬
Property requiring capitalization
therefore,
rates
ard.
(1) Long-term
government
available at
return of
capitalization
in
from
vary
a
of
excess
as
a
4y2%
miles
75
the
distant.
houses
in
mand for
particular type of real
a
estate
greater
importance.
market
and
afford
weather.
and
electrical
chased
future
floor,
heating
Plumbing,
equipment is
locally.
bedroom
protectidrn from
These
cottages,
bedroom
pur¬
two-
are
permitting
-on
the
a
second
15%
or
a
labor.
space
heaters,
com¬
$700 lot, erected by Union
The
there' is
builder
no
figures
particular
the purchase of
there is
saving
in
materials, but that
having all of the materials
sary
that
great saving in time by
a
to complete the house
neces¬
on
the
job the day that it is started. As
result,
a
the
ready for
from
own
the
average
occupancy
date
company
500 of these
of
house
in
30
been
is
assume
In
commercial
more
%%—and
be
this would
explanation before
continued
we
on
on
may
apply these
mean
page
aft-
23)
or
de¬
not
than
true
of
100% commercial locations at this
time—but
we
can
all remember
REAL ESTATE
a
days
has financed
some
houses, dating back to
prudent
appraiser gives full weight to this
★
★
★
SHASKAN & CO.
Mtmbort Now York Stock Exchange
item.
Members New York Curb
Management—This element
may be a very small one where
the property is in a 100% location
and occupied by a single tenantsuch as, a Wool worth, a Kresge, a
Bamberger or a Gimbel net lease.
On the other hand, if the property
is occupied by more than one ten¬
(3)
or
is located
in
area
an
40 EXCHANGE PL.,N.Y.
Boll
substantial
amount
vision and work.
of
Tolotypo NY 1-953
Firm Trading Markets:
California & New York
management feature can represent
a
Exchange
Dlgby 4-4950
un¬
dergoing change (and most areas
are
in
a
fluid condition)
this
Real Estate Issues
super¬
Even under the
advantageous situation, this
to
♦An
an
Mr.
SECURITIES
too
case
satisfactory
an
not
terms. So the careful and
all parties concerned.
♦Extracted from
were
attractive and the only way they
could be sold were on unusual
most
most
investments
estate
address by
the Texas
Hollyday before
Mortgage Bankers Association,
Galveston, Texas, April 10, 1947.
address by Mr.
Goldstein,
Appraiser and Realtor of New¬
ark, N. J., before the Eastern
Mortgage Clinic of the Mortgage
Bankers
Association
of
America,
New York City, April 15, 1947.
J. S. Strauss & Co.
155
Montgomery St., San Francisco 4
Tele. SF 61 & 62
EXbrook 8515
CTIVE MARKETS
OFFERINGS WANTED
Gov. Clinton 2s 1956 WS
New York Athletic Club 2nd 1
ALL
New York Athletic Club 2s 1955
Gov. Clinton Co. Inc. Stock
Greeley Square Bldg. 6s 1951 WS
Roosevelt Hotel
»/2s 1955
£s 1964
Dinkier Hotels Co. Class A Pfd.
Roosevelt
Dinkier Hotels Co. Common
Sherneth
East Avenue Corp. Stock
REAL ESTATE
Walbridge Operating 3s 1950 WS
Hotel'ICoipftion
Corp.
Hilton Hotels Pfd.
Wall & Beaver St.
Lincoln Bldg. 5^8 1963 WS
Manqucen Corp. l-5s 1952 WS
61
1956 WS
4>/2s 1951 WS
Westinghouse Bldg. Par. Ctfs. CBI
Broadway Corp. Stock
income will
high during the present
year.
This will tend to prevent
farm prices from sagging.
A de-
STOCKS & BONDS
i
Bought-—S old—Quoted
Amott, Baker & CO.
Tel.
on page
36)
SIEGEL & CO.
Incorporated
150 Broadway
BArclay 7-4880
New York 7, N.Y,
Teletype NY 1-588
39 Broadway, N. Y. 6
a
One other
rising
increased
with
—
banking
rather than capitalized
rates—by net income, I
so
less
a
non-liquidity
represent a charge of
ant
beginning. My
1939, and the results in each
have
mand
item
decreases
or
a
represent
period hot too long ago when real
two
position roof, asbestos shingle ex¬
ing
increases
this
does
a
as
they should be
flow of income basis.
are
may,
maximum of 15%.
such hazards that
handled
rate
(2) The Non-Liquidity element
represents the difficulty in dis¬
posing of real estate.
As the de¬
unloads
*
minimum to
The
contingencies, I
consumer
remain
(Continued
The Capitalization Rate
(2) A Cfrarge*ior Non-Liquid¬
ity.
(3) A Charge for Management.
risk
about
On the
hand, a new inexperienced
industry occupying a two or three
story factory or waterfront indus-,
trial property might reflect a risk
approximately V-k%,
terior, that sell for $6,700 includ¬
Labor Statistics shows that in 1939
normally high
1% for the risk item.
bonds
the
too high, con-
consumer's purchasing
of their
component
as
other
item of 6%.
and by evening the
sheathing has been placed on the
not
are
apply
we
payment of the rent reflect small.
risk and may be set down as low
ernment Bonds.4
.
of line
the morning,
Professor of Economics, State College of Washington
they
we
suppose
rafters to
lends
into
under¬
we
Baltimore area, the builder being
the
local
outlet
for
American
truck
This
(1) The Return on U. S. Gov-
In contrast, let me refer, for
example, to one hundred houses
now
being
completed
in
the
The
By J. A. GUTHRIE*
are
income
net
so
items:
sales
Inc. These houses are
prefabricated at Allentown, Penn¬
—
Fine locations
good tenants occupying the
premises and
guaranteeing the
Houses,
28)
Sharp Drop in Food Prices
Prof. Guthrie, though stating agricultural prices
Hazard
with
a
and
Risk
items enumerated.
for
it to specific problems.
Capitali¬
zation rates consist of the sum to¬
with fair value.
sylvania,
No
are
result
were
(4) The
item is the most difficult to determine for it may vary from 1%
to 5% or 6% and
may be equiva¬
lent to the total of the other three
are
flow
stand
them, went into the black market,
the
tions.
the
fee value
the threat of go¬
ing through
bankruptcy proceed¬
ings and disavowing their obliga¬
check this factor before
do
ing empty all over this country
because they were built under the
handicap of OPA restrictions, and
the builders, in order to complete
with
their leases—at
pro¬
by
future
Guy T. 0. Hollyday
houses that
mean
most
translating
full value I
By
going to owners in 1932-1933 and
asking to be relieved of their
obligations under the terms of
proper¬
can
rates
price of their
product.
in¬
merely
the
for
of
factor
full
give
value
determine
capitalization rate. We can
still remember good sound tenants
market
duced
who
builders
to
item should add not less than
V2 %
property.
Capitalization
for
able
:
to the
income
years;
be
The
tion of the net
would
a
prop-
accurately be
portrayed by
the capitaliza¬
builders
busy for sev¬
equities.
real property, it
on
the
ties
keep
nu¬
estate
'
•
t y.
r
come
start
which
have
we
Lock at it from the
standpoint,
and
it's
many
people
need
greater farm production in order
to have adequate diets.
Look at
it from the standpoint of econom¬
ics, and you see both potential
markets
and
productive power
which faould, if brought together,
mean profitable exchange and an
expanding economy. Look at the
question from the standpoint of
actual experience in wartime when
consumer buying power was gen¬
erally high, and it is clear that
people are willing to buy, when
they have the money, more agri¬
cultural
goods than
they have
ever bought. For the sake of brev¬
ity and practicality, let us put
op¬
e
fair
value
backlog,
get each time is
that
clear
portunity
serve
I
need more
had.
of
care
eating into
the
large
at
mortgage
a
the
1947
industry
should
looked
answer
we
<in
sufficient to take
expanding investments in real
are
intelligently place
is essential that the appraiser or Joan officer
fee value
®
building, there
general belief that
construction
companies
In order to
in * 1948
building
the
tritionist's
output
of our agricul¬
tural
plant.
an
a
ever
pacity
This is
Needed?
Is
Food
that question
number of different angles,
lish and main¬
ance
demand, and
begin¬
need?
we
through 1955 is good. Sees no immediate prospect of lower
building costs and thinks rents of apartments will be increased
with higher net income for this
type of property. £ays life insur¬
that
Now, how much food and fiber
I
look
of the current
ning
do
a
residential
.
Much
How
opportu¬
nity we have
now,
at long
last, to estab¬
be
should be
you
the
Clinton P. Anderson
m
regard to
to
seems
contribution today I want to outline what I believe to
one
the
slide-off of value in 1948, with sound economic conditions
the out¬
1948
in available materials.
ance
of the economy.
be
as¬
building industry
should begin absorbing
backlog
and builders will be
busy for
several years thereafter.
Says
present bottleneck is lack of bal¬
con¬
agriculture and holds it should be adjusted to other segments
As
Appraiser analyzes factors in real estate valuation for long-term
lending purposes and contends, although there will be a slight
of America
Prominent mortgage banker
Agriculture
of
By GEORGE GOLDSTEIN*
Bankers
ANDERSON*
serts
1
Mortgage
:9c
Dlgby 4-2370
Teletype NY 1-1942
10
Broad
25
<A..
"
Tennessee Products &
Chemical
(formerly Tennessee Prod*
CJfcp.)—Memorandum — Sej
ligman, Lubetkin & Co., Inc., 41
Broad Street, New York 4, N. Y.j
ucts
the firms mentioned will lie pleased
send interested parties the following literdtiiqe:
It is understood that
to
Terra-Lite
•
.
Casualty Co.—De¬
memorandum — William
Blair & Co., 135 South La Salle
Continental
Stock Di¬
and Insurance
Bank
tailed
available
Also
Street, Chicago 3,
■,
is the Insurance
comparative
largest: stock casualty
insurance
Utica
1st
Mohawk
&
Circular
—
—
;
V
I
For
—
Memo¬
->f
America
1
States
Wage-Price Outlook
—
N. Y.
available for dealers only
York 6,
Also
Utility
Public
—Brief
Common Stocks
10 stocks set
of
list
a
are
sketches of
terials
Ford
than
in "package" form—G. A. Sax& Co., Inc., 70 Pine Street,
New York 5, N. Y.
Also
available is a
monthly
our
dicted
for the
income
of
statement
stocks.
Commerce
"an;
at
Henry
The
to
extent
which
all
depend
of
on
Franklin County Coal Corp.—
"I n
World
the
Detailed analysis — Comstock & War
II, fac¬
Week—Current developments af¬
fecting the rails—Vilas & Hickey, Co., 231 South La Salle Street, tory hourly
Lewis H. Brown
49 Wall Street, New York 5, N. Y. Chicago 4, 111.
wages
have
Also available are analyses of risen
83% or
'
!
Also available is a discussion of
Hydraulic Press Mfg. Co., Long just about the same amount as the
Missouri Pacific System Bonds.
Bell Lumber Co., Miller Manufac¬ cost of
food, up 85%, and finished
Railroad Equipment Certificates turing Co., and Old Ben Coal Cor¬ goods, up 77%," said'Mr. Brown,
...
,
us
free
each
our
I
address
by
Mr.
Ford
Manufacturing Company
flated very little
Oil Co.—Analysis—
& Co., 31 Nassau
Street, New York 5, N. Y.
Kingwood
Analysis — HayStone & Co., 25 Broad Street,
Sanitary Corp.
den,
—
N. Yv
New York 4,
Broadway,
Co., 120
New York 5, N. Y.
Also available are
&
—Ward
memoranda
Douglas Shoe Co.; Hart¬
W. L.
on
Morgan
Lanova
ucts; Upson Corp.;
Alabama Mills;
Corp.; United Artists;
Vacuum Concrete; Barcala Mfg.
Pfaudler,
Thornton, Mohr & Co., First Na¬
tional Bank Building, Montgom¬
ery
4, Ala.
Gas & Electric
Association—Analysis—New York
New
England
Broadway,
Boston
Railroad
Maine
&
—
Connolly &
Co., 24 Federal Street, Boston 10,
—
Walter J.
Philadelphia Transportation Co.
—Memorandum—Buckley Broth¬
Also
available
are
II. II. Robertson
on
ern
responsibilities for
the world, we
throughout
peace
home.
.
i
productive at
•
•
is to be made toward
future that can be
know
If progress
the
great
achieved for all people, we
(Continued on page 51)
*
if at all.
There¬
down, the
the factory
come
of
much
as
after World War I."
"We do not yet know
prices
Brown
just where
will be stabilized,"
Mr."
concluded, "but we believe
spite of the changing buy¬
ing power of the dollar, 90% of
the American people are now and
will continue to be relatively bet¬
the past."
ter off than in
MUNICIPAL COMMITTEE &
NSTA
worker will increase although not
■Ay
local
for the current year:
Ludwell
Philadel¬
memoranda
Corp.
Mass.
Scott, Horner & Mason, Inc.,
curities Corp., Nashville, Tenn;
Harold R. Chapel, McDonald-Moore
Detroit, Mich.; Russell M. Ergood, Jr., Stroud &
Philadelphia, Pa.; J. Creighton Riepe, Alex. Brown
& Co.,
Company, Inc.,
& Sons, Balti¬
Md.
James
W.
Representatives
Municipal
of Georgia, Atlanta,
Co.
Means; Trust
Ga.; Gustave
Klein, Mead Miller & Co., Baltimore Md.; F. Brittain Kennedy,
Brittain Kennedy & Co., Boston, Mass.
Edward B. Wulbern, R.
F.
S.
Wm. Blair &
Co., Chicago, 111.; Neil Ransick, Chas A. Hinsch & Co., Cincinnati,
LOS ANGELES, CALIF.—John
Ohio; Joe B. Warren, Dallas Rupe & Son, Dallas, Texas; Charles C.
E. Wheeler is engaging in the se¬
Bechtel, Watling, Lerchen & Co., Detroit, Mich.; Andrew L. Tackus,
curities business from offices at
Putnam & Co., Hartford, Conn,; Lewis Pollock, Eddleman-Pollock
629
South
Spring Street. Mr. Co., Houston, Texas; John F. Kelsey,-.Wm. R. Staats Co., Los Angeles,
Wheeler
was
formerly with Calif.; P. M. Conway, Bankers Bond Co.; Louisville, Ky.; R. Wendell
Turner-Poindexter & Co. He is a
Spragins, R. W. Spragins & Co.. Memphis, Tenn.; Oscar M. Bergman,
member of the Los Angeles and Allison-Williams
Co., Minneapolis, Minn.; Q. R. Ledyard, J. C. Brad¬
Chicago Stock Exchanges.
ford & Co., Nashville, Tenn.; J. William Roos, MacBride, Miller &
Co., Newark, N. J.; J. Wallace Kingsbury, Kingsbury & Alvis, New
Orleans, La.; J. Monroe Alleman, Leedy, Wheeler & Alleman, Or¬
Earle W. Tate With
lando, Fla.; Ellwood S. Robinson, Phillips, Schmertz & Robinson,
Philadelphia, Pa.; Silas J. Titus, Phillips, Schmertz & Robinson, Pitts¬
Delner & Co.,
burgh, Pa.; Charles N. Tripp, Jr., Chas. N. Tripp Co., Portland, Ore.;
Mark A. Smith, F. W. Craigie & Co., Richmond, Va.; E. Kenneth
Special to The Financial Chronicle
CHICAGO, ILL.—Earle W. Tate Hagemann, G. H. Walker & Co., St. Louis, Mo.; Harvey J. Franklin,
Own Investment Office
Special
Co. and East¬
Chairman,
Strader,
&
Lynchburg, Virginia; Stanley G. McKie, Vice-Chairman, Weil, Roth
& Irving Co., Cincinnati, Ohio; H. Frank Burkholder, Equitable Se¬
more,
John E. Wheeler Opens
REPRESENTATIVES
complete list of Municipal Committee and
representatives of the National Security Traders Association
The following is the
Local
1420 Walnut Street,
phia 2, Pa.
its new
carry
NSTA Notes
that in
ers,
Circular
data-
Co.—Late
Corp.; Mo¬ Hanseatic
Corp., 120
hawk Rubber; and Taylor Whart¬
New York 5, N. Y.
on Iron & Steel; Purolator Prod¬
ford Empire;
fore, as prices
buying
power
as
Cola
Lime
Corporation—Circular
Asplnook
Peter
also, we all feel that
bring some decline in prices. Since
there has been less general infla¬
9, Pa.
Radiator & Standard
effort.
think,
at home and peace abroad
are
related.
We knpw that if
America is to be strong enough to
at
Descriptive
memorandum —
When Is the Time to Stop Sell¬
Also available is a study of Wis¬
tion this time than in the last war,
ing?—Current letter on securities
consin Power & Light Company—
market
and
business outlook—
prices (including food) will not be
Loewi &
Co., 225 East Mason deflated as
they were then.
Indi¬
Hess, Blizzard & Co.,1 Inc., 123
Street, Milwaukee 2, Wis.
cations are that wages will be de¬
South Broad Street, Philadelphia
American
war
period of stabilization will
"The
James
have
people can do when we re¬
in
must be united and
*An
we
peace
Organization Night Dinner of 35th
"As we all know, wages are still Annual
appraisal—Stroud poration.
Meeting of the
U. S.
&
rising and the current wave of in¬ Chamber of Commerce, Washing¬
Co.,
Inc.,
123 South Broad
Hotels Statler Co., Inc.—Memo¬ creases
may well push the figure
Street, Philadelphia 9, Pa.
ton, D, C., April 29, 1947.
Also
available is a valuation randum—Shaskan & Co., 40 Ex¬ up to 95 or 100% greater than
and appraisal of City of Philadel¬ change Place, New York 5, N. Y. 1939," he continued.
—
that
member what we accomplished
not, I think, fully realized
by the American people. The Ford
Motor. Co., for example, relies on
nearly 6,000 other companies for
the materials, supplies, parts, and
services which keep us going, anq
on
almost 8,000 other enterprises
to distribute our products. •
—Valuation and
phia Bonds.
realize
scarcely scratched the surface of
what united effort by and for a
other is
Developments 1 of
understanding
the costs of domestic dis¬
We
cord.
businessmen
as
We are
unity at home, too.
greater
J
We see
2nd
Ford,
States.
City April 24.
Railroad
an
better
want
We
in
United
the
all time.
the horrible consequences
of
and
through out
Informal
for
of another world war.
f
communities
Corrugated Paper Stockholders'
Co.
common
stock — Descriptive Meeting"
i n
brochure—David A. Noyes & Co., the
Hotel
10 208 South La Salle Street, Chicago Roosevelt i n
New
York
4, 111.
We all want peace
now.
conscious of the new and
terrible power of atomic energy,
to
pre¬
*
all very
dealers
o
discuss
in
and
—now
of
belong
Manville Cor¬
Wayne
Fort
3,300
to
common.
they do
?nd
More
trucks.
like
probably never was a
history when people
everywhere wanted so very much
to get along with one another as
for
cars
would
There
moment
parts and ma¬
Chambers
of Johns-
industrial poration,
active
stocks.
up
ton
man
have in
are
make
who
I
this evening are certain
problems which I believe we all
manufacturers
.
1849.
What
United
the
Many of the
-
with you
Commerce
a
home.
at
of
Chamber
the
Brochure randum—Bear, > Stearns & Co., 1 On
listing securities in various indus¬ Wall Street, New York 5, N. Y.
Despite current changes in the
tries, indicating trends and out¬
buying power of the dollar, the
look—Maxwell, Marshall & Co.,
Finch Telecommunications, Inc.
great majority of Americans will
647 South Spring Street, Los An¬ —Analysis
and literature pre¬ find their position better than in
geles 14, Calif.
pared by the company descriptive the
past,
Also available is a Graphic His¬ of the product—Troster, Currie &
Lewis
H
tory of Industrial America since Summers, 74 Trinity Place, New
Brown, chair'
•
Industrial
happy to be here.
several reasons I feel very much
very
^embers
Optimistic
Corp.
Doehler-Jarvis
am
""
of life under human freedom.
pattern
Cotton Mill*
Mohawk Val
Quarter 1947 of 19 New York City
Bank
Stocks—Laird, Bissell &
5, N. Y.
human relations in induslry and expresses confidence American /
industry will devoie its traditional enterprise and energy in setting
£
Darling
A.
L.
obliga-
free enterprise entails responsibility of leader¬
Says business must aim for higher living standards and
sense &f partnership with the American people.
Stresses
belter
Broadj
Co.—Descriptive ley Investing Co., Inc., 238 Geo
esee Street, Utica 2, N. "V.
brochure
and
annual report—
Moreland & Co., Penobscot Build¬
Meeds, 120 Broadway, New York
ing, Detroit 26, Mich.
L. H. Brown
and
Comparison
Leading manufacturer contends rights in a democracy have
ship.
; ;
-
tions, and right to
''I
Inc.
Analysis
v
Street!
Ill
way,-New York 6, N. Y.
companies.
By HENRY FORD, H*
President, Ford Motor Company
Co.—Analy-i
sis—Ira Haupt & Co.,
Also available is a
table of 10
of Dec. 31, 1946.
Stock Analyzer as
111.
Water Power
Tide
Leadership—Obligation ol
Business Management
Circular—Caswel
—
Co., 120 South La Salle
Chicago 3, 111.
&
gest—Discussion of yields—Geyer
& Co.," Inc., 67 Wall Street, New
York 5, N. Y.
f
Corp.
Literature
Recommendations and
4;
York
New
Street,
N. Y.
Dealer-Broker Investment
Thursday, May I, 1947
FINANCIAL CHRONICLE
THE COMMERCIAL &
(2338)
Dickson &
Co., Inc., Charlotte, N.
C.; Don. G. Miehles,
to The Financial' Chronicle
^
Utility Corp.—
Memorandum—Brailsford & Co.,
208 South La Salle Street, Chi¬
Central
cago
Public
4, 111.
cago
speculative possibilities— H. M.
Byllesby and Co., Stock Exchange
Building, Philadelphia, Pa.
West Corp.—
Detailed memorandum^ and sum¬
mary—Fred W. Fairman & Co.,
208 South La Salle Street, Chi¬
Central and South
Prentiss-Wabers Products Co.—
New
.analysis—Adams & Co., 231
South La Salle Street,
Chicago 4,
111.
4, 111.
Also
on
Wash¬
ington Railway Co.—Discussion of
Pittsburgh, Cononsburg &
available
are
memoranda
Mobile Gas Service Corp.,
Naf
Public
National Bank
& Trust
Chicago
become
has
associated
with Det-
&
Co., 105 South La Salle
Northern In¬ Co,—First quarter analysis—C. E.
Street, members of the Chicago
diana
Public
Service Co., and Unterberg & Co., 61 Broadway,
Stock Exchange.
Mr. Tate was
New York 6, N. Y.
Public Service Co. of Indiana.
"Also
available is an offering formerly an officer of the Com¬
monwealth Investment Corp. In
circular on Stern & Stern Textiles,
Columbian Carbon Co.—Memo¬
mer
tional Fuel Gas Co.,
randum—A.
Wall Street,
M. Kidder &
Co., 1
the
Inc.
Ralston
Consolidated
Dearborn
Corp.—
Lubetkin $c
Co., Inc., 41 Broad Street, NeW
Circular — Seligman,
date
Post
Steel
Car
Also
available is
a
circular on
he
conducted
his
own
Circular—Lerner
Office
Square,
& Co., 10
Boston 9,
With Merrill Lynch Firm
Special
to The Financial Chronicle
OAKLAND,
Mass.
CALIF.
—
W. F.
staff
Smith has been added to the
Rockwell
Analysis
—
Manufacturing
Co.—
Steiner, Rouse & Co.,
&
SECURITY TRADERS
of
Merrill Lynch,
& Beane,
Pierce, Fenner
1319 Franklin Street.
ASSOCIATION OF NEW YORK
Security Traders Association of New York, Inc., held their
11th Annual Dinner last Friday evening, April 25, at the WaldorfThe
Astoria.
*
.
and more than. 1.500 members an65
guests attended coming from all points of the United States andl
Canada. Many distinguished gentlemen attended as honored guests;
A
Co.—Up-to-
York 4, N. Y.
Foundation Company.
past
investment business in Chicago.
New York 5, N. Y.
Francisco, Calif.; Donald A. Meyers, Foster
Marshall;'1 Seattle, Wash.; Carl F. Bargmann, Braun, Bosworth &
Co., Toledo, Ohio; Harry J. Peiser, Ira Haupt & Co., New York, N. Y.
American Trust Co., San
gala show was presented
of the Association.
•
_
*
;
,
McManus & Co., President of the
Traders Organization presided, and Leslie Barbier of G. A. Saxton
& Co., Inc. was Chairman of the Arrangements Committee.
.
'
Michael
J.
Heane.y of Joseph
Volume
Number 4590
165
THE COMMERCIAL &
FINANCIAL CHRONICLE
(2339)
basis for $5 cumulative
preferred
Pennsylvania Brevities
stock.
Unexchanged shares
called
as
Mr:
Philadelphia Electric to Spend $200,000,000
portion
Liversidge, President of Philadelphia Electric Co., told
stockholders lat the annual meeting that the company's expansion
program had been revised upward to cost an estimated $200,000,000
over a five-year period.
Latest plans call for a new 165,000 kilowatt
unit for the northeast Philadelphia (plant.
i
In commenting on the method) of financing the expansion pro¬
Mr. Liversidge stated that^
approximately $40,000,000 is avail¬ Dillon &t Co., has been elected
able from the 1946 financing, that
President of Customers' Brokers
Club of Philadelphia.
about $75,000,000 will be available
Henry H.
from reserves, earnings and gen¬ Hallowell, Sulzberger & Co., was
elected Vice-President and R. G.
eral cash and the remaining $85,<000,000 will be obtained from new Sinclair, Secretary and Treasurer.
Those elected to the Executive
pate that none of the new money
will be needed this year or the
Committee
Dixon,
next, but in all likelihood will be
required during the three years
olds
1949 to
man,
Mr.
&
1951," he said.
are
Co.; II. II. McKiernan, Reyn¬
&
Co.;
Loring Dam, East¬
Dillon & Co.; Hibberd W.
pany's
Co.;
Edwin
Michaels,
DeHaven
capital
H:
P. T. C.
is
ap¬
of
come
Co.
reflects
$2,025,156 for the
in¬
gross
$1,201,273, compared
with
same
period in
1946. The company attributed the
decline to increased
wage scales
paid' to
ments to
announced
involving
in
costs
and
*
ports
quarter
each
the preferred and preference
on
Townsend, Crouter & Bodine,
and George W. Martyn, W. E.
After dividends
basis.
anonths'
i2
a
on
.
rstocks, earnings for the period
31,
March
ireported
rshare.
$1.68
as
;.
.
1947,
were
Birdshore Steel Foundry & Mach.
common
per
Company's annual report for 1946
reports
.
loss of $397,069 from op¬
It is expected, however,
a
erations.
Huge Mortgage
Samuel
Loan Potential
A. Green, President of
First Federal Savings
& Loan - As¬
sociation and Chairman of Federal
:Savings & Loan Group of Phila¬
delphia and vicinity, foresees a
<GI home loan market of possibly
$12
in
billion
that carry-back provisions of the
first
Internal Revenue Code will result
in
a recovery by the company of
about $375,000. Net sales for 1946
reported
are
Pennsylvania Municipals
There
<■000
the
lie
approximately
are
of World War II in
veterans
he points out.
area,
considers
ftiome
300,-
200,000
Of these
potential
as
"Even if the esti¬
buyers.
mated $12 billion mortgage mar¬
ket were to be stretched over a
10 years," he said, "it
a yearly increase in
mortgage lending of $1,200,000,000,
.-a sum far greater than the mort¬
gage financing industry of Phila¬
delphia has ever experienced."
period of
would
mean
"The
paramount task of our
in
the
coming year
According to municipal bond
market index prepared by E. II.
Rollins
&
Sons,
Philadelphia,
in
the
last
weeks.
three
Five
the
thrift
public,"
he
£'and
said,
to
ac¬
quaint financial institutions, fi¬
duciaries
and other enterprises
with the feasibility of investing
and
obligations,
our
maturities,
with
indicate
20-year
yields
of
2% and 1.81%, respectively.
sR
tR
:R
At the annual meeting
April 23,
Dwight
G.
Perkins,
President
Philadelphia's Strawbridge &
told
stockholders
sales thus far'in the fiscal
which
bdgan Feb.
improvement but
1
that
year
have shown
that
plans
of
for
our
present
serv¬
public
construction
are
private
history.
The
area.
both
larger than at
any
we
Although first quarter earnings
sharply reduced by a strike,
Robert V. White, President of Le¬
-were
high Coal & Navigation Co., told
stockholders at the annual meet¬
ing that operations in March, after
strike ended, were sufficient
to bring
three months consoli¬
dated net to $294,960. This com¬
with $652,000 in the similar
period. Mr. White estimated
results would probably
1947
*be about the same
•consolidated net
was
Jan. 31, 1947, amounted
$4,615,861, equal to $7.21 on
to
the
present
compared
Last
6%
with
year
prior
$2.28
82.7%
on
was
to Dec. 31, 1949, and at
',
*
William
a
for
the
of
for
the
PH
Philadelphia 2
New York Phones
HAnover 2-2280
257
WHitehall 4-2400
first
that
are
cents
$1,700,000, equivalent to
per
ferred
dividend.
pany
through
and
Present
formed
was
continuing interest in
pre¬
American-La France Foamite
com¬
last
of
merger
A
share after
common
Federal taxes
Common
year
Edward
G.
Southern Advance Bag & Paper
Budd
Manufacturing
Co.
and
Co., hence no com¬
parable figures are available. Cur¬
rent backlog of around $180,000,000 is largest in history of the
Budd
Wheel
combined companies.
sR
Hi
James
James
Bridgeport,
Common
BOENNING &. CO.
*
and
Pa.,
1606 Walnut St., Philadelphia 3
Co.
Lees
Lees
Common
Pennsylvania Power & Light Co.
PEnnypacker 5-8200
Sons
Co.,
manufacturers
Private Phone
to
COrtlandt
;v
PH 30
N. Y. C.
7-1202
of carpets and yarns, announces
be
net profits of $1,011,524 for the
first quarter of 1947 after allow¬
for
ance
estimated
taxes.
is equivalent to $1.20
per
This
com¬
Trading Markets in
share after preferred divi¬
mon
dends.
were
Net sales for the quarter
reported
as
Empire Steel
$9,861,588.
Common
WHEN
IS THE TIME
An
TO
interesting point of view
ket and
business outlook
letter to
us
from
STOP SELLING ?
is
on
the securities
contained
in
a
unusually well-informed
an
Copy
company's
stock
share
Request
Ojjco.
$£. Smjclcr & ©o.
Members
source.
Stock
N.
'
Philadelphia
Stock
Exchange
Exchange Bldg., Phila. 2, Pa.
Y.
Telephone HAnover
2-4552
(
Bell
System Teletype PH 220
HESS, BLIZZARD & CO.
share
for
on
Established 1895
mar¬
current
was
123
Trading Department Active in
Western Pennsylvania
PEnnypacker
South Broad Street, Philadelphia 9
5-6161
Teletype PH
Private
160
New
telephone to
York,
HAnover
Pittsburgh, Canonsburg
2-4120
&
Washington Rwy.
Issues
1st 5s, 1937
Direct Wire to New York City
CHAPLIN
Available Publications
COMPANY
and
H.
:
Pitts. Stock
61
PITTSBURGH 22, PA.
NEW YORK, N. T.
Bowling Green 9-3987
Bell System
•
*
*
4
.
..
CITY OF PHILADELPHIA BONDS
York—HAnover 2-9369
299
Stock Exchange Bldg. Phila. 2
Teletype
PH 73
6-3717
Phila. Elec. Co. Common
♦Nor. Ind. Pub. Serv. Com.
Phila. Warwick Com.
Phila.
Phila.
Copies
on
Request
*
Harshaw Chem. Co. Common
Transportation Pfd.
♦Roberts & Mander Common
Transportation 3-6s 2039
*
STROUD & COMPANY
Offered only
by prospectus
Bought—Sold—Quoted
'
Incorporated
Samuel K. Phillips & Co.
Members
5-4646
Byllesby & Company
PHILADELPHIA OFFICE
Telephone
Dolphin & Co.
Telephones:
H. M.
"
RAILROAD EQUIPMENT CERTIFICATES
Phila. Suburban Water Com.'
'
Hotel Keystone Com.
Fidelity Philadelphia Trust Building
PHILADELPHIA 9
request
Valuation and Appraisal
and New Jersey
Teletype—PH
r
*
RIttenhouse
Ben Franklin Hotel Com.
System
'
Teletype—PG 473
Eastman,
Philadelphia-—PEnnypacker
'
Valuation and Appraisal
Broadway
Grant 3900
Municipal Bonds
on
Exch.
.
419 Wood Street
*
Arnold,
Memo
Members
N. Y. Stock Exch.
Pennsylvania
New
Street,
Incorporated
Customers' Brokers Club of Phila.
Bell
Chestnut
Phila. Phone
Locust 7-1477
has arranged to borrow
!2%% thereafter until 1951.
t
H. N.NASII&COo
Members of Philadelphia Stock Exchange
1946, when
$2,701,535. It
The loan is at the rate of
up
Pfd. & Common
Co.'s first quarter net will
charges,
No additional stock issue of the
New York Curb Exch. (Assoc.)
:2Vz%
3-6s 2039,
sR
year.
preference
exchanged
shares,
common
previous fiscal
as
$3,500,000 from a banking group
Jheaded by Philadelphia National
Hank.
Stocks
Philadelphia Transportation Co.
1421
iR
results
on
be about
approximately 30%." y
increased,
acting
as
"re¬
straining influence on profits."
announced last week that the
•company
$128,-
31, unfilled orders
months, indications
Budd
fully prepared.
To this;
end, in our building materials
operations, we contemplate an
increase in productive capacity
tthe
i:hat
Angeles
Net profits for the 12 months
Lehigh Coal & Navigation Co.
1946
with
expenses
ended
pares
between '
and Los
Bank & Insurance
a
had
ffunds in Federals."
Wire System
Philadelphia
Teletype
Based
two
time in
must
Los Angeles
Private
Budd Co. First Quarter
more
of
compared
jR
that this five
to seven-year wave of construc¬
tion will start to roll within the
and
Street, Philadelphia 2
Hagerstown, Md.
Telephone—WHitehall 3-7253
N. Y.
peacetime record of $140,-
It is the belief of
year
set
company's history.
your management
coming
Strawbridge & Clothier
to come,
years
plants and transportation
now
all
the
ices will he inadequate in view
of the increase in construction
authority bonds and 10 general
will
promote
some
active
Clothier,
to
•
contemplated in this
obligations has stabilized
by
Warner, President, in
message
to
stockholders,
vania
of
be
his
1420 Walnut
New York
Price,
$642,090,960 constituted the
largest
peacetime
backlog
in
47
the average yield from Pennsyl¬
Federals
-and saving habits of the general
completed
the full capacity
.-area.
;
be
and
of
$1,800,-
Charles
states "for
Philadelphia
the
at
$4,176,124, com¬
pared with $6,678,795 for 1945.
will
A.
772,896 for the last 1946 quarter.
spring of 1948.
Philadelphia
Exchanges
of
Member
New York Curb
Exchange
:R
production
As of March
000, of which $1,500,000 had been
expended by Dec. 31, 1946. This
program has
now
been revised
ments
*
quarter
121,973,
upward to embrace expenditures
about $5,000,000.
It is antici¬
pated that additions and improve¬
York,
Also
the
PITTSBURGH.—G.
in
of
New
Los Angeles Stock
President, told annual meeting
that Westinghouse Electric Co.'s
*
estimated
an
at
average
iR
Company Expands
plan to cost
Members
Westinghouse Electric Co.
Shortly after V-J Day, Warner
Company started an improvement
Hutton & Co.
5
•ending
Warner
BUCKLEY BROTHERS
to £5
Philadelphia, New York
new
❖
.
.
cents
end
of
1941,
price of wood
pulp has risen over 100% in the
same period.
revenue.
1
earnings from 51
prevailing
while the
'
&
Request
Pittsburgh, Pa.
snow¬
loss
on
Prices for Scott products, he said,
now.^average 26% above levels
estimated $450,-
an
removal
Memos
first quarter increase
a
cents
per
share.
Mr.
McCabe
stated that the company had been
successful
in
absorbing a very
employes, higher pay¬
the city for Broad Street
subway rental and to heavy
Co. Pfd.
Company
Corporation
Eastern
McCabe, President
Scott Paper Co.,
Chester, Pa.,
roll
Philadelphia Trans¬
portation
Paper Co.
B.
substantial portion of higher pay¬
and increased material costs.
:R
Revenues Fall
In its report for the first
quar¬
ter of 1947,
000
feldt, Brown Bros. Harriman &
working
proximately $10,000,000.
falls
rer
Thomas
against possible future
downward price revisions. Com¬
Roberts, Merrill Lynch, Pierce,
company
Scott
any
which
$1,550,125
had
Philadelphia Trans.
.
*
H. H. Robertson
on
reserve
*
has
in
Fenner & Beane; Theodore Eck-
The
period.
it
of
that
reported
1 ithe levels of the
1946
Shipley
Harriman
Bros.
that
cushion
.
present plans are concerned.
*
stated
a
as
on Jan. 31
been set up as a
which
holding at about
corresponding
Liversidge
•earnings
J.
were:
Brown
of
amounted to
and
gram,
"We antici¬
Perkins
company will be necessary so far
were
31.
not been
necessary to call
Horace P.
permanent financing.
of March
11
Philadelphia
Stock
Exchange
Packard Bldg., Philadelphia 2
Teletype
PH
375
N. Y. Phone
COrtlandt
7-6814
123
SO. BROAD STREET
PEnnypacker 5-7330
Allentown
Pittsburgh
E. H. Rollins & Sons
120 BROADWAY
„
PHILADELPHIA 9, PA.
Incorporated
NEW YORK 5, N. Y.
■.
..
REctor
Lancaster
2-6528-29
;
<
Scranton
PEnnypacker 5-0100
1528 Walnut St., Philadelphia
New
Boston
York
San
Francisco
fc
Chicago
^
12
THE COMMERCIAL & FINANCIAL CHRONICLE
(2340)
Halsey Stuart V-Pres.
who is in
charge of the Municipal Bond DeDavid
T.
Miralia,
Thursday, May 1, 1947
A Plea for Broader Export Credits
Report Business Mixed—
With Declines Predominating
By A. M. STRONG*
Vice-President, American National Bank of Chicago
Swanton, sees lack of confidence in
from government pressure. Reports buying
Agents, headed by Robert C.
present prices stemming
policy further tightened.
April report of the Business Survey Committee of the Na¬
The
also
The financial terms of
exporter
an export sale and the credit
policy of the
the governing factors in the development of foreign
Win Chester
permit
better
balancing..
Those reporting increased inven¬
tories say 'due to needed goods
coming in after delayed produc¬
Repeating
tion.'
Arms
goods are tending higher in sev¬
ment
in
eral industries.
vance
will
Di¬
Swanton,
rector of Pur¬
David T. Miralia
the
of
chases
Corpo¬
ration,
an¬
nounces
that
the
first
C9ntr9l,,vt;b, e
Bond Dealers
CINCINNATI, OHIO—The Mu¬
of ing
Group
Dealers'
Bond
nicipal
increases,
have
report¬
ascribes
and
they
will hold their spring party June
16-17.
the
the
situation in part to a lack
that
announced
Cincinnati
11
:
r
MICH. — John F.
been
admitted
to
partnership in Chapin and Com¬
bers
of
Building, mem¬
Ex-
Stock
Detroit
the
first
since
time
ihange.
terials
and labor is
one
cause
Chgo. Auro. & Elgin Ry. Units
Coal Corp.
Franklin County
Corrugated Paper
Ft. Wayne
Holeproof Hosiery Co.
Howard
♦
♦
Inc.
Industries,
Hydraulic Press Mfg. Co.
Long-Bell Lumber Company
*
Miller Manufacturing
Oil
Co.
Exploration Co. Com.
*Old Ben Coal Corporation
Trailmobile
Company
analysis available
on
modities and lumber.
from
government pressure
increasing
consumers' resistance being regis¬
the
"In
basic
come
of
Tank Co.,
April reports indicate that
the uptrend in employment of the
past few months has ended. Those
reporting lower a little more than
balance off those showing greater
employment. Some areas report
the peak has been reached, with
more
applications than can be
filled. Others report more jobs if
getting
engineering and research work
designing away from scarce
Central Steel
& Wire
Co.,
of
Common
tion.
Available
on
Request.
yml H.Davis &Go.
Established
"Business
defi¬
to
reduce
and
are
are
,
,
10 So. La Salle St., Chicago
following the
at
high
a
items.
policy
pattern as in
same
the United States.
"Employment continues high."
Rockford,
domestic
economic
with
foreign
on
Service
Telephone Randolph 406S
\
Company
of
New
Service
*Prospectus
upon
Investment analyst
Boston
due
are
more
j/
supply. Says Federal Reserve
raise present long-term rates, and con¬
J
Banks cannot do much to
cludes, unless tl^ere is profound change in public psychology and
state
of
public confidence, only gradual rise in rates
expected for several
be
may
years.
widespread belief among certain groups of.rates of interest are artificial. Those who
hold this view think that interestsrates
have been maintained
at and the supply of savings. Or to
present levels only through the put the same idea in different
There
seems
to be a
investors that existing low
exercise of rigid
government con¬
trols, and that if "natural forces"
were
allowed to function freely,
interest rates would rise.
This
words, the interest
price which brings
into
had
implication, whether spoken
unspoken, that such a rise
would be beneficial to business.
balance.
tion
the
whether
idea what they mean
any
when
govern
It is
interest rates.
easy
problem of how interest rates
determined is one of the most
entire field
rate
the
is the
supply
and demand for investment funds
opinion generally carries with it
a
This
long history.
by
Professor
has
doctrine
Its formula¬
Schlicter of
Harvard, in 1931, when he wrote
that "the rate of interest tends to
fixed
be
at
the
point where the
quantity of money which lenders
are
willing
to
lend
and
the
amount which borrowers are will¬
ing to borrow are equal" is pracr
tically identical with the words of
John Stuart Mill written 80 years
before.
.
I
-
r
)
More
this
recently, the validity of
theory has been contested by-
John
M... Keynes.
According
to
teaching, interest rates
determined by what he calls
Keynes'
are
the
as
capital—the
—the
.
,
«
the price
variously de¬
paid for the use
price of
future
goods—the
reward
parting with liquidity.
we
request
Omaha
waiting
preference for present over
can
As far as
cepted theory of interest is that
which states that the
rate
"liquidity-preference" of in¬
and by the quantity of
money (cash plus bank deposits)
available at any given time.
dividuals
It
would
be
hazardous
for
the
for layman to enter into the merits of
judge, the commonly ac¬
is de¬
this
controversy
Keynes
and
his
funds
Lord
between
predecessors.
What must be
apparent to every
student
subject is the im¬
of the
termined by inter-action between portance attached by most
the demand for investment
i
holds present interest rate levels
What Is Interest?
Hampshire
Minneapolis
,•
■
low rates to heavy increase in money
Interest has been
Company
Milwaukee
been more liberal than
policy is supported by-
This
ours.
natural forces than to rigid government controls, and ascribes
to
of economics.
Incorporated
New York
credit policy in
European
By G. RIPLEY CUTLER
"
hotly debated in the
*
AjCALLYN«"COMEANY
Chicago
The
Latin America and elsewhere has
1
are
Indiana, Inc.
of
terms.
Investment Supervision Department, Estabrook & Co.
of
537
:V
spon¬
are
liberal
The Outlook for Interest Rates
Service
ST.
Direct Private Wire to New York
CG
Forum
the
CHICAGO 4, ILLINOIS
System
transfer
the
to say just what these
forces are.
As a matter of fact,
United Public Utilities Corporation
Bell
and
abroad
more
by
Service
Company
goods.
is.
not
Company
Si<|ux City Gas and Electric Company
Request
Mone¬
tary Fund.
the Illinois Manufac¬ many governments through credit
insurance and other aids to exAssociation, Chicago, 111.,
(Contiriued on page 45)
April 24, 1947.
sored
"Public
Public
through the opera¬
International
turers'
"Public
Recent Review
buyer,
at the World Trade
fined
"Southwestern
the
in the however, we are now witnessing
In foreign trade the gradual return to a buyer's
risk—non-payment because of ex-
Northern States Power Company
"Northwestern Public Service Company
5y2's of '52
of
are
two risks.
The credit
market, apd buyers
risk; that is, non-payment by the beginning to look for
Montana Dakota Utilities Company
Northern Indiana Public Service Company
Utility
minimized
tions
there
clear
Iowa Electric Light and Power Company
Central Public
ex¬
conditions
buyer's country.
that
"Iowa Public Service Company
Minnesota Power and Light Company
Fred. W. Fairman Co
is
It
the
with
they speak of the natural forces
"Central Illinois Public
8MCC19M
seller.
credit
Selling on a cashsbasis had, a
standing and responsibility of the minor effect on our foreign trade
buyer while in a foreign transac¬ during the period of scarcity when
tion he must also be concerned we
were
in
a
seller's
market;
only
"Birmingham Electric Company
Indiana and Michigan Electric Company
Iowa Electric Company
208 SOUTH LA SALLE
seller is
transaction the
concerned
"Black Hills Power and Light Company
Central Illinois Electric and Gas Company
111.
American
when
terms
financial commentators have
PUBLIC UTILITY PREFERRED STOCKS
3
be
hand,
or
making this possible, and
Teletype CG 405
Ind.
of
many more
and
buying
Inventories
at
lowest workable levels. Improved
and regularly scheduled deliver¬
ies
remains
ing decontrol of
being
maintain
instead
level with slight indication of any
decline. Prices are higher follow¬
One-third
show this condi¬
Continued efforts
On
the
pected that the transfer risk will
other
,the
We sometimes wonder
Principal Stock Exchanges
Chicago Board of Trade
,r
Indianapolis,
made
reports
hours
1916
Members
Tel. Franklin 8622
our
shorter
Indications
layoffs if business declines.
nitely lower in April.
'Seismograph Service Corp.,Com.
•Prospectus
are
for
are
available.
were
men
unreasonably overpriced ma¬
terials. Purchasing Agents must
watch these developments closely.
"Industrial inventories
Com.
serious
obstacle.
"The
commodity
background,
as
prove
"Opening remarks of Mr. Strong always
not
and
'National
and
few
were
Alcohols up
ready for production, are many
new items, the results of months
in
Colorado Milling & Elev., Com.
increases
general
in
the
reports.
and in short supply.
Copper, lead, tin and antimony
still very tight. Dry colors up in
price; formaldehyde short. Poly¬
styrene may temporarily be short
because^of Texas City disaster.
trend—the first real indication of Malleable and gray iron castings
papers
and
price reductions in months. Con¬ critical.** Specialty
refractories
up.
sidering the present cost of inven¬ newsprint, up;
tories and wages, it is believed Building
materials expected to
most industrial price reductions increase with better quality.
of
a
ad¬
and
"Price
forecast
an
immediate general recession
but, rather, a period of scattered
readjustments as industry marks
time awaiting the price effects of
current wage negotiations.
"Prices
are
reported
almost
static, with a slight downward
COMSTOCK & CO.
Teletype CG 955
supply;
and
delivery, with steel drums
nails reported easier.
tered. The reports do not
lowering
prices.
Dearborn 1501
better
electrical supplies
competitive.
Textiles,
particularly woolens, are off; also,
vegetable oils, glycerine, acetate
and butyrate molding compounds.
Brass sheet and strip are on better
to reduce them and the
a
CHICAGO 4
in
"Hardwoods
plumbing
becoming
for
out of profits and will not Teflect
request
231 So. La Salle St.
pentine, leather, some farm com¬
stem¬
in the next few months will
*Detailed
anthracite
reductions:
the
slight
decline
indicated.
Another, and perhaps more farreaching element, is the lack of
ming
Burgess Battery Co. Com.
Other price
coal, tur¬
scarcity.
publicized
reporting continued high, produc¬
tion,and sales remains about the
same as in the past few months—
70%.
Trimming
and
balancing
production to the available ma¬
confidence in present prices
*
de¬
The number
increase in business.
has
Penobscot
present
the
control, more Purchasing Agents
report a decline than report an
DETROIT,
pany,
of con¬
prices. Says
report:
"For
Chapin & Go. Admits
Beyer As Partner
Beyer
in
fidence
———-
,
Many manufacturers and ex¬
liberal porters in our area are under the
impression that the extension of
not warranted credit
in
foreign markets is a
erally > shorter-term commitment
may result in hazardous
business.
They feel
policy over the past three months
a loss no mat¬
is reflected in the Inventory and
that the safest way to sell abroad
ter how prof- is for cash.
Business
Condition
sections
of
Many are paying a
itable
the
this report. The policy of making
high rate of interest for this ar¬
A. M. Strong
tran s a c t i o n
forward commitments which pro¬
rangement.
When a discount of
may appear at 2 or 3% is allowed on a shipment
tect
only
current
production
its inception.
schedules continues.
collectable
within
30
days,
it
The extension of credit in for¬ equals an interest rate of between
"Outstanding is the reduction in
24 to 36% per annum.
This ex¬
price of steel scrap with dealers eign markets differs only in one
from the
extension of pense is added to the selling price,
reporting
heavy
shipments
to respect
credit in
domestic trade.
In a thereby increasing the cost of the
mills
in
the
face
of
a
much
exceeded
those
to be
ing limits of 'hand-to-mouth' up
to 60 days. The effect of the gen¬
ing declines in
business
Robert C. Swanton
rule
a
et, with one-half of these report¬
of
purchasing
agents report¬
Party
——
credit change blocking or other governterms or a de¬ ment
regulations restricting the
mand for pay¬
purchase of dollars for transfer to
gent
1 to 3 months' commitment brack¬
number
Strin-'V
trade.
"Buying
policy
is
being
tightened further. 90% fall into a
for
Municipal
are
finished
of
time since de-
partment of the New York office
of Halsey, Stuart & Co. Inc., 35
Wall Street, has been elected a
vice-president of the company.
Cincinnati
Inventories
;
V
sales in Latin America.
Association of Purchasing Agents under the Chairmanship of
Robert
C.<$>
-
tional
[
foreign markets
is no more hazardous than domestic credits, calls for wider foreign
credit financing on reasonable terms and consistent with safety.
Points out our foreign trade is on competitive basis, and more
liberal credit terms by foreign
exporters has handicapped our
Committee of National Association of Purchasing
Business Survey
v
Bank executive, asserting extension of credits in
econ-
(Continued on page 47)
,
-
$300,000,000
State of Illinois
Service Recognition Bonds Series A
Dated
May 1, 1947. Principal and annual interest, May 1, payable at the office
of the State Treasurer in Springfield, Illinois. Under existing
with the Treasurer of the State, both
principal and interest on these bonds may, at the option of the
holder, be
collected at the Continental Illinois National Bank and
Trust Company in
Chicago or The Chase National Bank in New
York. Owing to the lack of
express legal authority the continuance of the holders'
option of collection in New York
arrangements
or
Chicago
be
cannot
guaranteed but the discontinuance thereof is
denomination of $1,000 registerable as to
principal if desired.
-
not
anticipated. Coupon bonds in
Temporary bonds will be delivered
pending issuance of definitive bonds.
Interest exempt, in the opinion of counsel, from all
present Federal Income Taxes*
Legal Investment, in the opinion of counsel, for Savings Banks and Trust Funds in
Illinois, Massachusetts, Connecticut and
^lew York,
certain other States
THESE SERVICE RECOGNITION
BONDS, the first part of an authorized isue of $385,000,000 ratified at
election held November
an
5, 1946, will, in the opinion of counsel, constitute full faith and credit
obligations of the State of Illinois. Certain special taxes are specifically
pledged and general property taxes may be levied without limit as to rate or amount on all the taxable
property within the State to provide
funds for the payment of
principal and interest on these bonds. "
;
MATURITIES—COUPON RATES—YIELDS OR PRICES
$12,500,000 bonds maturing annually May 1, 1949
May 1, 1972, inclusive, without option of prior payment
to
V:
Coupon
Due
Price
Rate
1949
Yield
or
iy2%
Coupon
Due
Rate
or
Coupon
Yield
Due
Price
Rate
.75%
1954
l»/a%
1;15%
1959
1950
iy2.85%
1955
V/2
1.20%
1960
l'/2
1951
1V2.95%
1956
1%
1.25%
1961
1.05%
1957
iy2
1.30%
1962
1.10%
1958**1%
1.35%
vl963
or
1%
1952
1953
.iy2
' ll/2
•
Offered for delivery when,
The
offering circular
may
V/2%
Chicago
Due
Rate
or
*■;
Chemical Bank & Trust
or
Yield
1965
1%
1.70%
1970
l3/,
99%
1966.1%
1.70%
1971
1%
99%
1%
1.60%
1967
1%
100 ;
1972
1%
99
' 1%
1.65%
1968
1%
*
,
1 %%99 %
1969
„
100;;%''-.tS'--7
.
and subject to approval of legality by
us
/.
,
„
-
may
as
in such State.
The Northern Trust Company
3
Continental Illinois National Bank and Trust Company
r
OF
CHICAGO
Company First National Bank Bank of America GuarantyTrust Company of NewYork Halsey, Stuart St Co. Inc.
.
,
Company
Price
.
1.55%
Harris Trust St Savings Bank
The Chase National Bank Bankers Trust
Rate
1.45%
'
1-65%
...
The National City Bank of New York
Due
1%%
state,from only such of the underwriters, including the undersigned,
any
Coupon
«
Yield
1964
Chapman and Cutler, Attorneys, Chicago, Illinois.
be obtained in
Price
1.40%
■
legally offer these bonds
The First National Bank of
Coupon
Yield
and if issued and received by
as,
Messrs.
;;
•.
Price
The First Boston Corporation
New York
N. T. & S. A.
Smith, Barney St Co.
Lehman Brothers
Harriman Ripley & Co.
Blyth St Co., Inc.
Incorporated
Glore, Forgan & Co.
^
Drexel & Co.
C. J. Devine St Co.
Kidder, Peabody St Co.
••fInc.'
.
1
Salomon Bros. St Hutzler
;i. '>
,
r ■
A. G. Becker St Co.
Central Republic Company
Incorporated
(Incorporated)
John Nuveen & Co.
"
The Illinois
Barr Brothers & Co. Inc.
Braun, Bosworth &.Co.
>
(Incorporated)
'
Company
^
Paine, Webber, Jackson & Curtis
Equitable Securities Corporation
First of
Incorporated
Michigan Corporation
Stranahan, Harris St Co.
Estabrook & Co.
OF
American Trust
i
.
}
•
■
William Blair & Company
,
\
' \;
Security First National Bank
OF LOS AftutL »
■. -
C. F. Childs and Company
4 Alex. Brown & Sons
Incorporated
-
Eastman, Dillon & Co.
Adams, McEntee St Co.
Hallgarten & Co.
American National Bank and Trust
Incorporated
R. S. Dickson St
Hemphill, Noyes & Co.
OF
Company
Company
CHICAGO
Hornblower & Weeks
The Milwaukee Company
Bacon, Whipple St Co.
California Bank
.
Francis I. DuPont St Co.
Heller, Bruce St Co.
Incorporated
Otis St Co.
White, Weld & Co.
City National Bank &Jrust Co.
Coffin St Burr
Kebbcn, McCormick & Co.
»
The Wisconsin Company
Julien Collins 4 Company
Incorporated
Kansas City '
Los An-eles
Kean, Taylcr & Co.
:*
Lee Higginson Corporation
Seattle-First National Bank
Company
*
R. W. Pressprich & Co^
R. H. Moulton & Company
San Francisco
Weeden 4 Co., Inc.
Incorporated
Incorporated
Merrill Lynch, Pierce, Fenner & Beane
PORTLAND, OREGON
B. J. Van Ingen & Co., Inc.
A. C. Allyn and Cbmpany ;'' Mercantile-Commerce Bank and Trust Company
F. S. Moseley St Co.
The First National Bank
»
Inc»
'
♦
■
Harris, Hall St Company
-
Union Securities Corporation
Blair & Co.
Phelps, Fenn St Co.
i
Martin, Burns & Corbett, Inc.
•
>
L. F. Rothschild & Co.
Schoelikopf, Hutton & Pomeroy, Incw
Trust Company of Georgia
f
.
.
.
April 30, 1947
_
_.v
Whiting, Weeks & Stubbs
V
(2342)1
creased 99.7%, with the result that
their ratio to income moved up
creased
ratio
This Week
Bank Stocks
—
simple way out is visible.
income, and no
is—increase
risen faster than has gross
obvious
The
answer
3.5% over
the report also
higher net operating
However,
1947.
estimated
In
view
of
the
Clearing House," by Arthur Van subject, the above two contribu¬
tions to the topic, are called to
Vlissengen, in which he presents
the attention of the readers of this
a
survey
of some authoritative
1947 and 1948.
the importance of
for
earnings
problem is presented in the April,
1947.
issue
of "The
Burroughs
The author
other references, a
«ludy published by the Economics
Department of Bankers Trust Co.,
New York, in September,
1946,
entitled "Outlook for Bank Earn¬
column.
in this
column, Nov. 14,1946), which pre¬
holders.
the subject.
ideas
on
•cites
among
of interest to pre¬
of Guaranty Trust
and
of Manufacturers Trust, as
revealed in the figures presented
in their annual reports to stock¬
It
be
may
sent the record
ings: 1946-1948," (reviewed
the
In
case
of Guaranty Trust,
operating figures on a
in
TRUST
GUARANTY
Oper.
Expenses
Ratio
Ratio
Capital
Expenses to
to Deposits
Funds
Cap. Funds
(000)
Income
%
(000)
r
•
%
(000)
(000)
%
1941
$29,198
$16,002
55.0
$2,447,972
.66
$277,001
1942
30,301
15,477
51.0
2,289,225
.67
279,471
5.5
36,085
19,467
53.9
2,758,837
.71
285,453
6.8
1943
5.8
J 944
41,083
22,764
55.4
3,190,800
.71
296,054
1945
46,714
29,557
63.3
3,469,405
.85
307,374
46,593
28,520
61.2
.92
317,477
13,516
57.2
949,477
1.42
82,578
16.4
1941
23,613
1942
24,791
14,578
50.8
1,041,291
1.40
1943—.—
25,362
15,829
62.4
1,416,802
1.12
1944
29,440
18,178
61.7
1,694,392
2,145,421
1.07
2,343,557
1945
34,551
23,123
66.9
1946-
38,191
26,991
70.7
;
'
and capital iunds
of June
as
574,000,
Guaranty Trust
will
It
this
be
that
observed
six-year period,
oper¬
ating income increased 59.6%, but
that operating expenses increased
77.4%, with the result that the
ratio of operating expenses to op¬
erating
income increased from
55.0%
to
increased
26.7%
the ratio of expenses
to de¬
deposits
period
and
increased from 0.66% to
Total capital funds in¬
posits
0.92%.
creased
14.6%,
Further
wages over
116.105
23.2
these
lems
eral, that the banks do not publish
operating
statements
that are
more
revealing of the details of
the
rail¬
lish.
or
security profits which were lower
in 1946 than in 1945,
and presum¬
ably accounts for the decline in
1946 total operating expenses from
1945.
•
V
-
,
Similar figures for
Trust
also
over
entirely
express
That is very
speakers
equally a$
the former,
do; likewise.
should
in
to
able
be
has
been
improve¬
some
recent
not
but
years
That
ence.
the
Manufactur¬
same
period
to
Gross
creased
$11,-
operating
61.7%
in¬
income
between
1941
and
but operating expenses in-
1946,
and
it
that
me
restraints
by
you
D.
will
definition
when
hear
you
you
warn
man
a
de-
should realize at once that the
not about
dom,
Richberg at
do
free¬
A man's
yours.
do what he wants
to
freedom
from
want to do.
My freedom
to live in my
house, to wear my own clothes, to
walk the streets unmolested, de-
Productivity
people
they
C., April 19, 1947. Mr. Richberg
a
partner of the law firm of
Busick &
C.
Richardson, Washington, D.
may
(Continued on page 58)
y
Glassmeyer, Jr., has been
appointed syndicate manager with
headquarters in NewftYork.
Mr.
Glassmeyer
graduated from
Princeton^University in 1936 and
associated
been
since
member
with
buying
the
of
Banish Pomp From
de¬
By BERNICE
He served overseas in
pation and rejoined the corpora¬
tion in May, 1946. Jo M. French,
Vice-President, has been placed
in charge of the firm's Southern
California
organization
with
headquarters in Los Angeles, 215
.
Financial Advertising
in New York
Blyth & Co., Inc.,
FITZ-GIBBON*
Advertising Director,
Gimbel Brothers, Inc.
"cold marble rhetoric" in financial ad"malarky." Lays blame oh bank executives
what-the-hell abandon" go^d writing requires.
Advertising director scores
eschew "the
who
Talking to retail or advertising groups (retail or agency) has
wearisome. Same old faces . . . same old chit-chat.
BUT
—«
—talking to such elegant gents as
baqK--^eople was sometning pretty hard going. In fact—find¬
else again. Besides, I had always ing them was pretty hard going.
I read every kind of ad—national,
heard that' no female was per¬
mitted in the sanctified clois.ers retail, political, do-gooder, I have
Earnings Comparison
you
NEW JERSEY
Casualty
F. S. Smifoers & Go.
Gelebrates 90 Years
SECURITIES
Insurance Stocks
F. S. Smithers &
1946
way,
Circular
Request
on
New
York
Stock
Exchange
120 BROADWAY, NEW YORK
Established
5, N. Y.
(L.
A.
Teletype—NY
~
t
.
18 Clinton St., Newark 2, N. J.
Telephone: BArclay 7-3500
Bell
1891
MArket
1-1248-49
Glbbs, Manager Trading Dept.)
Co., 115 Broad¬
New York City, members of
York Stock and Curb
is celebrating
the completion of 90 years of con¬
I. S. Rippel & Co.
Laird, Bissell & Meeds
3-3430
N. Y. Phone—REctor 2-4383
today
The firm acts as
tinuous Service.
distributor
and
underwriter
public revenue and public utility
bonds.
-
Laurence,
F.
Hamilton D.
Walter W. Cooper.
BANK and INSURANCE STOCKS
Snyder Cancels
GfirfiR & CO.
Press Conference
INCORPORATED
WHITEHALL 3-0782
iO Pesi
CHICAGO 4
OJfia Stuart
HUBCAMO OCBO
331 S.
LaSath Strut
cial
NY 1-2875
4t3 TVtsl Sixth
ury
SAN rRANCISCO 4
JUiss Building
Strut
MIchioan 2897
PRIVATE WIRE SYSTEM CONNECTING:
NEW
ST-S7J
YORK, BOSTON,
CHICAGO,
CLEVELAND, PHILADELPHIA, LOS ANGELES, SAN FRANCISCO
TELEPHONES
TO:
Hartford, Enterprise 6011
Providence, Enterprise 7008
>
the
"Chronicle")—Treas¬
Snyder's
Secretary
Thursday
today
news
cancelled
usual
conference
to
permit
was
the
•1/TTKN 8887
LA-ioSb
CG-JOJ
to
Portland, Enterprise 7008
Secretary to be with the visiting
Mexican officials.
President Mig¬
uel Aleman's party
ican Secretary
Detroit, Enterprise 6066
Beteta.
includes Mex¬
of Finance Ramon
Club.
I demurred
daintily "for a day or two (just
to egg Mr. McNeil into a better
selling job)
and then accepted
with alacrity. The likes of me—
country school teacher
copywriter—(ip that order)
talking to the likes of you—bank¬
farmer,
and
ers
or
perhaps, more
accurately,
copywriters that work for banks
—those elegant edifices with the
cold marble pillars, run by icy
executives Who always age ex¬
read ads
even
was
Well,
as
and
tisements.
Reading
-them,
I
admit,
was
future
York
City, April 23, 1947.
I dug
of the New
I
security," they talked
of a new era
demands
the
ultimate
in
achievement." One bank described
"a
as
founded
on
institution
of
great
the
cornerstone
Most were
deadly word)
other.
i
*
'
service and courtesy."
"dedicated" (what a
to something or
One big
are
commercial bank says,
invited to use the name
(of this particular bank) on your
checks. It is a symbol of strength
What a lot of
check's good, it's
good.
Everybody will' honor a
check if the depositor has it cov¬
ered.
Imagine
Gimbels
saying
and
security."
malarky.
this in
Fitz-Gibbon be¬
fore
the
Financial Advertisers
Association of New York, New
*A talk bv Mrs.
saying,
until
about the "challenge
"You
that I have
was
"Times"
.
That's all I know about
and bankers—except for the
marble
rhetoric
and the
dug out and made myself readin short,, your financial
adver¬
And
unearthed
some
honeys.
They were sober,
pompous, and polysyllabic.
They
talked
about
a
"challenge
to
leadership," about paying, "rich
dividends
in
economic stability
York
itself
pious pronouncements
I
around in the columns
distinguished iron grey at the
temples. Like thousands of others,
I've
tiptoed into these
marble
fastnesses'handing bits of paper
and bits of money to dour faced
men
in "cages,
and tiptoed out
cold
by the National
going!
that tough
that
banks
run
Association of Manufacturers.
quisitely and always seem to look
a
little like Lewis Stone—with
again.
WASHINGTON, April 30 (Spe¬
Wall Street
LOS ANGELES 14
FRANKLIN 7898
and
Schwarz
ner,
BOSTON 0
Arthur B.
Smithers,
are
Charles
P^ter J. Murphy, Charles F. Zelt-
WHOLESALE MARKETS IN
67
of
railroad, industrial, municipal and
Present partners
NEW YORK 5:
of the Lawyers
New
the
Exchanges,
Members
t
verlising, and calls it
become
West Sixth Street.
Fire &
to
preventing
doing what
always depends on
other
Relations, Washington,
Davies, Richberg, Beebe,
your
upon
speaker is talking about his
Business School Confer¬
is
safely
the protection of indi¬
vidual liberty and human freedom
know what the
Industrial
use
Liberty is my free¬
government pro¬
the
which
This
speakers are talking about and be
able to make sense out of the
on
-
to
emotional,]
can
anyone
honestly:
that
ence
the
of the same word,"
brief, accurate defini¬
provide you with a pocket dic¬
\manding
tionary of labor lingo.
.
may
-
power
freedom.
to
Then you
The
in
uses
a
that
tion
tects
to
the OSS with the Army of Occu¬
Manufacturers Trust
confusing to an audi¬
is confusing to the
would
BIyth Syndicate Mgr.
a
submit
to dissolve this confusion
and to dispel some of the fog that
is about to engulf you, if I were
seems
and Labor
as
ideas. confusing
I
-
pleases.
one
as
destroy
to
Man
For relief from these
themselves!
Glassmeyer Appointed
partment.
presented.
different
*An address by Mr.
has
do
the
words to
dom
It
commercial banks,
indispensable help
surely
.use
license
definition:
street
But they
will
Richberg
R.
Donald
A
self-government.
Eng¬
Freedom
Communist
—
restraint.
definition:
will
talk
restraint
government.
or
definition
all
from
They
all
employers
by
Labor
government.
or
Anarchist
to
say.
roads, public utilities, and airlines
can
report with reasonable uni¬
are
unions
definition: Freedom from
speakers
trying
are
same
companies,
a
time if
could un¬
you
Manufacturers Trust.
Edward
$8,770,000,
of
quote a few sample definitions.;
"Liberty"—Employer definition:
Freedom from restraint by labor
to
derstand what
ure
;rise
a
have
only
it, and time will permit me
You
e.
good
Harvard
increase of $3,635,000,
t
a
not
has
dictionary
my
printed, I cannot distribute'
been
ex¬
would
De¬
include taxes.
Since
interest¬
cite bitter deb
may
sound like nonsense.
vital
They
ing.
——
otherwise
that
statements
prob¬
are
and
bank stock
and operating re¬
sults, and on a uniform basis. It
is impossible for example, to com¬
pare
accurately and fairly, the
operations of Guaranty Trust and
:
coursed
Of
analysts, and by the same token
for the banks' shareholders and
for bank stock investors in gen¬
insurance
of you several
My heart bleeds for this audience. You have ahead
hours of talk about Labor-Management problems.
.
However, the latter fig¬
includes taxes on investment
of
$7,939,000
24.1
Lays blame for labor policy to minority
irreconcilable employers on
employers.
$5,775,000, or 87%. Other current
operating expenses increased by
$6,894,000, or 102.5%, from $6,699,000 to $13,593,000.
Much of
this increase appears to have been
in interest paid and taxes.
It is unfortunate for
autocratic rulers, Mr. Richberg attacks
as
of injunctions by labor unions when such
use
right and trouble-making communists on the left.
.the
the six
108.8%.
are
the- period to have in¬
from
95,813
an
834,000,
operating
expenses, so far as detailed in the
annual reports, shows salaries and
creased
over
Blyth & Co., Inc., 14 Wall Street,
New York City, announces that
expense
to 9.0%.
analysis
20.0
expenses
is denied
preserve
of labor leaders and denounces both
enough. There is still too much
ambiguity, diversity and lack of
detail;
and
too many lumped
figures.
18.1
91,056
4
45.8%; other current operating
expenses,
including / taxes,
in¬
creased from $8,064,000 to $16,-
ers
the
and
ratio from 5.8%
,
Over the same
61.2%.
wages
of industry
•
.
theflgures
to have risen from $6,623,000 to $12,398,000, an increase of
ment
or
over
gross
87,562
1.15
security profits;
30 each year.
and
salaries
cannot
we
inconsistencies in
use
There
-
17.2
04,685
1.08
income excludes
NOTE—Operating
posits
are
to the economy as are
9.0
'
and
for captains
given in the annual reports shows
which
9.6
1.940
:
3,100,758
MANUFACTURERS
TRUST
4
Further analyses of
fields,
7.7
.
dissimilar.
two
the
respects
many
institutions
this
for
that
formity and completeness in their
Expenses
Deposits
Expenses to
Oper.
in
If
Ratio
Total
Gross
Income
Year—
compare
understand
.their operations
•
comparable
1946 would exceed those of 1945 year by year basis are presented
for the years 1941 to 1946, inclu¬
by 15%, that 1947 expenses would
be 8% higher than in 1946, and sive, in the following table:
dicted that operating expenses
interest to
of
record with that of Guaranty,
years
—
1948 expenses would be
income and improve eificiency. But this is too easily said.
An interesting discussion of the
gross
from
Congressmen have come to
our economic and political
individual freedom by substituting labor leaders
Pointing out majority of people and
and the expense
16.4% to 23.2%.,
40.6%,
rose
is
It
problem of
rising
rather
rapidly, especially during the past year, with a consequent narrowing^
of the profit margin, and some lowering in certain instances of net
operating earnings.
It presents a knotty problem, for costs have
good deal of interest is being evidenced in the
bank costs.
Cost ,of bank operation has increased
A
By DONALD R. RICHBERG*
deposits
declined
from
1.42% to 1.15%. Capital funds in¬
to
tio
Monopoly
Freedom and Labor
Deposits
70.7%.
to
146.8%, thus the expense ra¬
rose
DEUSEN
By E. A. VAN
57.2%
from
Stocks
Bank and Insurance
1947
Thursday,, May 1,
CHRONICLE
COMMERCIAL & FINANCIAL
THE
'14
"You
Gimbel
an
If
a
advertisement:
are
invited
waffle
iron
to
place this
in your
(Continued on page 52)
kit-
Volume
165
THE COMMERCIAL & FINANCIAL CHRONICLE
Number 4590
Inventories and Price Trends
This is not
Offering Prospectus. The offer of these shares is made only by
an
have not been approved or disapproved by the Securities and
Exchange Commission, which does not pass on the merits of any registered securities.
study of basic conditions affecting price trends to be ready for
new
phase of circumstances arises.
* '
(of which 700,000 Shares
ment^Association in New
f
York City
ana-
lyzed
the
various phases
call
the
"long" future.
which,
still
Chaoin Hoskins
by
policies
be
at
hand
changing
con¬
of
course
his
remarks,
Mr. Hoskins stated:
"In the last 50 years there have
four cycles, and part of a
been
fifth
cycle, in which wholesale
'^prices in the United States have
risen
and
fallen
more
than
10%.
In the most recent of these cycles,
prices
from 1933 to 1937, then
rose
fell back into 1939.
The rises and
declines in any such cycle are suf¬
ficient to cause serious problems
in the operation of
manufactur¬
a
comes
The
although
the
one
This
we
by
one
prices tends
spread.
to
Company are conducted through ten operating depart¬
as measured by dollar volume of sales and interdepartmental billings
(including cellophane and nylon), Organic Chemicals, Fabrics and Finishes,
Ammonia, Grasselli Chemicals, Explosives, Plastics, Eleclrochemicals, Pigments, and Photo Products.
The Company and its subsidiaries have 82 plants in the United States, one in Mexico and one in Chile.
'■
$4.50 cumulative (outstanding—1,688,850 shares)
home
there is
outstanding—11,122,512 shares, including 550 shares in treasury).,.
I
cisions
the
of
current
phase
of
purpose
wars
ties
The following summary of consolidated earnings of the Company and wholly owned subsidiaries
has been compiled by the Company and reviewed by Independent Public Accountants and is subject
to the summary
in the Offering
of consolidated earnings and the financial statements, together with the notes appended thereto,
Prospectus.
operating
private
upon
banking
the
o
Wars
have
profound
fect
eral
and
in¬
War
United
that
of
5
11
Elliott
the
V.
wars
the
creation
the
our
vide
market
a
for
securities.
the
It
time
tied
the
'
that
nation's
cur¬
banks
143,535,013
50,190,827
93,218,664
s 10,000,000
86,945,173
6,333,813
6,775,739
104,317,472
90,533,300
91,975,586
6,918,257
96,926,168
4,576,889
81,059,962
77,521,007
9,772,343
63,187,650
112,619,706
9,084,831
,
30,000,000
22,500,000
,
•<
/
10,000,000
5,000,000
,
.*...,
90,401,470
•
63,941,275
69,706,819'
80,870,106
'
(7) Net sales do not include the value of products manufactured, beginning in 191)2, in V. S. Government-owned plants.
Compensation for constructing and operating such plants was principally on a fixed fee basis and is included as other
operating revenue. (2) Net sales have not been reduced by payments under the Renegotiation Act in 19)2, 191,3 and 19)4
amortization
(a) provisions for renegotiation and repricing,
(b) provision of $17,700,000 in 191,5 to complete the
Repricing Act in 191,5. Net operating income is after deducting
including adjustments between years, in 19)2 to 191,5 inclusive, and
of "emergency facilities".
■
The Preferred Stock has
preferred stock
voting
no
special voting rights specified in
power,
-
except as provided by law, other than certain
the^ertificate of Incorporation and the By-Laws.
underwriting
Subject to certain conditions, the Underwriters, named in the Offering Prospectus, have
severally agreed to purchase the 700,000 shares of New Preferred Stock at $100 a share, or a
total of $70,000,000, and accrued dividends; and will offer these shares to the public at an aggregate price of
The remaining 300,000 shares are
Pension Trust established by the Company, without under¬
accrued dividends, payment to
$71,400,000, and accrued dividends. Underwriting discounts total $1,400,000.
reserved by the Company for
sate to the Trustee of
a
writing discounts or commissions, at a total price of $30,000,000 ($100 a share) and
be made at or prior to the time of payment by the Underwriters.
;■
>
.
the
to
and accrued dividends
have
struggling
the
from
thus
just emerged
still
are
of
effects
greatest
What
far.
that
-
of
have
war
The Underwriters have
or,
to
all
issued and
upon
banking here and abroad? Look¬
ing first abroad, the most obvious
agreed to purchase the 700,000 shares of New Preferred Stock when, as and if
subject to the approval of Davis Polk Wardwell Sunderland
Kicndl, counsel for the Under¬
further conditions. It is expected that delivery of certificates for these shares will
writers and to certain
be made
on or
about
May 7, 19^7, against payment therefor in New York funds.
been
and
striking
accelerated
effect
trend
has
been
TO FACILITATE THE OFFER ING. IT 18 INTENDED TO STABILIZE THE
MARKET.
PRltES OF THE NEW PREFERRED STOCK IN THE OVER-THE-COUNTER
THE NEW YORK STOCK EXCHANGE AND IN THE OVER-THE-COUNTER
MARKET AND OE THE PREFERRED STOCK-M-SO SERIES ON
,TH AT THE PRICE OF EITHER OE SUCH STOCKS H ILL HE STABILIZED
STABILIZING, ft COMMENCED. MAY NOT BE DISCONTINUED AT ANY TIME.
THIS STATEMENT IS NOT AN .ASSURANCE
OK
THAT
the
toward
an
information, is contained in the Registration Statement on file with
Commission, and in the Offering Prospectus which must be furnished to each purchaser and is obtainable
~
drorn onlu such of the undersigned as may legally offer these securities in compliance with
the securities laws of the respective States.
.1
Further information, particularly financial
na¬
tionalization of banking. Since the
directly to the government
end of the war some 15 countries
brought the banks into
have nationalized all or part of
relationship
with
the
their banking system^ These de¬
Treasury.
rency
(debt and
a
48,340,088*
.........
govern¬
was
event, incidentally, which for the
first
7,083,471„
$ 88,031,943
...
.
30,000,000
124,004,080
661,824,083
$
6,262,131
14,695,553
Price $102 a Share
we
emerge
about
national bank system, a
system designed primarily to pro¬
ment's
631,575,414
.$ 11,856,233
5,155,156
•
Effects in Foreign Countries
rather,
Bell
States
brought
the
"married
be
v
net income
20,000,000
.
Now
Civil
in
orig¬
collat¬
as
and
discounts
i
the
institution
of
the
140,878,017
646,168,395
'
Consolidated
contingencies
4,833,826
20,000,000
612,939,287
133,140,762
134,906,666
Treasury."
cluding
banking.
523,463,385
1945
expanded
would
banks
stitutions,) in¬
was
37,500,000
1946
their invest¬
ments in and loans against gov¬
ernment issues.
By those events
the day was hastened when the
upon
social
for
greatly
a
ef¬
economic
158,134,111
Provision for
income
Aggregate annual dividend requirements on Preferred Stock—$4.50 and $3.50 Series will amount to $11,099,825.
The
securities
government
had
503,352,294
■
$6,792,748
37,500,000
1944
eligibility rules of the Fed¬
Reserve System were mod¬
ified so as to permit the use of
war.
always
100,701,790
1943
eral
recent
world
35,000,000
359,055,655
inal
f
14,628,621
67,759,061
1942
manage-
factor.
$36,672,635
36,990,511
1941
.
Treasury.
decisive
a
$ 56,422,793
•
,
taxet on
Other, net
298,833,238
end under the
was
Provision for
Stock
235,409,426
r.
►
,
Motor,
(Note 2)
1940
says
In considering what I might talk to you about it seemed to me
that it might be interesting and perhaps profitable to examine some
princieffects
-
General
1939
,
the
*
,Dividende,
income
$286,043,075
1937
1938
\
•
Net
(Notes I arid 2)
Year
now more government
Sees continued control of interest rates by
IS on-operating income
.
Net tAlet
operating
ment.
*
,
from borrowings.
or
and other
1.
<
capital at this time to provide for expansion of plant facilities and for increased working capital
requirements resulting from a contemplated expansion of the Company's business. If further funds should be
required, the Company may provide them out of its cash resources or from proceeds of the sale of additional securi-
banking development,
our
on
'
The net proceeds ($99,765,000, after expenses) will be placed in the general funds of the Company and
used for general corporate purposes. The Company believes that it is prudent to raise additional
op issue
Legacy for Banking
leading to less independence of banks in their portfolio
p a 1
222,450,240
$491,335,240
tAs of March 31,19Iff, the Company had outstanding $17,100,000 unsecured notes, due 1949-1951, payable
of the revocable 1929 Pension Trust, and was guarantor, as to principal and interest, of $257,144
4Vl% Second Mortgage loans to employes.
price change have to do with in¬
Since the rising phase
some prices, but not
(Continued on page 42)
;
of
222,450,240
$391,335,240
/
participation in banking and credit
operations and closer link of banks to government's fiscal policy?
;
$168,885,000
100,000,000
Common Stock, $20 par value (authorized—15,000,000 shares;
wide¬
here
aggressive sentiment for it exists. Contends, however,1
no
None
None
.
to the Trustee
Points out trend toward bank nationalization abroad, but
at
None
$4.50 Series (outstanding—1,688,850 shares).
$3.50 Series (outstanding—1,000,000 shares)
revenues
j
$168,885,000
Preferred Stock, without par value (authorized—4,000,000 shares)—'
"Probably the most critical de¬
the conduct
Supt. Bell traces effects of
financh,g
Preferred Stock, without par value (authorized—3,000,000 shares)—
Superintendent of Banks, New York State
?
Outstanding
\
Adjusted to
give effect
As of
</4.'.'
capitalizationt
By ELLIOTT V. BELL*
•
engaged in manu-
for the year 1946, are as follows: Rayon
Future
Near
are
ments, which, in the order of their positions
s
become
the
Company, incorporated in 1915 in Delaware, and its subsidiaries
been
'
for
Policies
The
•
.
one.
have
we
the New York Stock Exchange.
admission of the existence of control of it by Christiana Securities Company.
The principal manufacturing and selling activities of the
in
phase B, and it is even possible,
now,
that when the Bureau of
Labor Statistics' weekly index de¬
clined in the week of April 5, we
entered
phase C, the phase in
which the trend toward declining
"Definitely,
company
.
prices
individual
but
upward
'
•
declining.
"In
phase D, which ended in
August 1939, the average is still
declining,
at $107 and accrued
In addition, the
earnings
;
to the dividend
' factoring and selling diversified lines of chemical products and other products related thereto.
Company holds investments in other companies, the most important being 10,0(10,009 shares, or
22.7%, of the common stock of General Motors Corporation. The Company is informed that Christiana Securities
Company owns 3,049,800 shares, or 27.42%, of the Common Stock of the Company. The Company disclaims any
v
has ended for
The War's
as
pectus should be read prior to any purchase of this New Preferred Stock.
is
the '.'average
-
ventory.
upon
but vary
redemption.
following is the Company's brief outline of certain information contained in the Offering Pros¬
pectus and is subject to the more detailed statements in the Offering Prospectus and the Registration
Statement, which include important information not outlined or indicated herein. The Offering Pros¬
are
clines in these longer cycles have
profound effects
or upon
Company will make application for the listing of the New Preferred Stock
on
call phase B.
ing business.
"On a longer and larger scale,
prices rose 270% from 1897 to
1920, fell back 65% from 1920 to
1933; and have since risen 150%
Obviously, the rises and de¬
...
voluntary liquidation
upon
The
"In phase C, which lasted from
May 1937 into 1938, practically all
turn
payable
The New Preferred Stock is redeemable, at the
option of the Company, in whole or in part, initially
dividends. This redemption price decreases periodically after April 25,1952.
period in
a
turn downward.
one
prices
the
-
there
rising, individual prices
may
ditions.
In
rate and the amounts
would learn many
With such differences in
"Next
at all times to meet
«
)(Without Par Value)
The Preferred Stock—$3.50 Series and the
outstanding Preferred Stock—$4.50 Series rank equally
March 1933 until 1936.
be
kept
and
studied by
business firms,
Company
Preferred Stock—$3.50 Series
phase A, practically all prices
rising.
This was true from
are
He urged rec¬
ords of prices
definite
prices
mind, you can effectively divide
each price cycle into four parts:
"In the first part, which we may
the "near" fu¬
and
of
you
things.
for
and
behavior
cesses,
of price cycles
and laid down
ture
publicly offered)
E. I. da Pont de Nemours and
*
If ;you were
to study
in either
long or short-cycles as you have
already studied the behavior of
materials
in
your
factory pro¬
the
ting
policies
:
:
of business.
and
methods,
April 24, Chapin Hoskins, a
on
<$
price
o r e c a s
are
the Production Conference of the American Manage-
lifetime stu¬
dent of com¬
trends
,
1,000,000 Shares
action when
modity
of (he'Offering Prospectus,
means
These securities, though registered,
Chapin Hoskins tells Management Association every business should
have two
policies, one for defense and another fcjr offense. Urges
Speaking at
(2343)
:■
the
■
close
MORGAN STANLEY & CO.
.
World War I lifted the
untried
Federal
in one bound to
tion
as
Once
new
Reserve
and
System
dominant posi¬
this nation's central bank.
again the need of the gov¬
ernment
to
sell
its
obligations
way
tion
from
to
In
ranged
complete
sociation,
Garden
April 24, 1947. -
City,
N.
Y.,
at
the
the
largely
of
the
addition
to
nominal
Bank
these
least
studying
10
the
other
of
15
BLYTH & CO., INC.
SMITH, BARNEY & CO.
HARRIMAN RIPLEY & CO.
Incorporated
GOLDMAN, SACHS & CO.
.
'
KIDDER, PEABODY & CO.
UNION SECURITIES CORPORATION
national¬
STONE &
England.
countries,
countries
desirability
(Continued
THE FIRST BOSTON CORPORATION
KUHN, LOEB & CO.
of Soviet Russia
50th
Annual
Meeting of Group
VII, New York State Bankers As¬
all
nationaliza¬
in Czechoslovakia and in the
Balkan satellites
ization
*An address by Mr. Bell before
have
velopments
a
on page
of
21)
are
na-
Dated May
1,19j7.
WEBSTER SECURITIES CORPORATION
~
IS
W
Bonds—Issue
Stanley Heller & Go.
2Vz cents
an
quarter railroad
with
were
which
no
,
of 1946, in
increases were be¬
period
a
wage
ing accrued, many speculators and
investors
had
been inclined to
results
1947
the
view
pessimis¬
tically.
distortions
The
resulting
from
be¬
ated
ating
been up only
Atlantic Coast Line
$1,200,000.
but
firm's
year-to-year gain of $2,364,000
to $2,726,332.
One
of
the
outstanding per¬
be
trading
activities.
a
also with
was
obvious from formances was turned in by „New Holsapple &
Charles E. Klein
York, Chicago & St. Louis. The Co., will be in
a comparison of some of the ear¬
the- trading
lier reports coming in for the first Nickel Plate was one of the roads
quarter.
Union Pacific for the that even' in the two opening department.
Announcement is also made of
first two months reported a year- months of the year was reporting
a
fairly substantial improvement the installation of a direct private
to-year decline of 23.2% in net
operating income.
For the full over a year ago despite the differ¬ wire from Stanley Heller & Co. to
& Co.
in Chicago. In
first quarter this had been changed ence in accrued wage rates. This Hickey
rate of improvement was accel¬
keeping with their current ex¬
to an increase of 36.6%. When it
pansion program, Stanley Heller
is considered that oil and gas op¬ erated sharply in March with net
income of
$1,069,782 & Co. are taking much enlarged
erations are also showing larger operating
contrasted with a net operating
quarters at the same address.
net, that for the full year 1946 the
deficit of $81,710 in March, 1946.
company earned $11.90 a share on
its
common,
and
that
fixed As a result, earnings for the full*
dharges this year will be mate¬ first quarter were in excess of
rially lower, it is difficult to jus¬ the full year's dividend require¬
tify the present low price for the ment on the 6% preferred stock.
Last year earnings on the stock
shares on. any investment basis.
Cudahy Packing Co. has issued
for the first quarter amounted to
For the first two months of the
invitations for bids to be consid¬
only $0.64 on the preferred.
year Pere Marquette reported a
ered May 5 for $15,000,000 of new
Some of the western roads have
gain of $160,000 in net as com¬
first mortgage sinking fund bonds,
not kept pace with this wide yearpared with the like 1946 interim.
maturing May 1, 1967. These new
For the quarter this improvement to-year improvement in the first
quarter. They are the roads that obligations are designed to replace
expanded to $1,033,000. Southern
an
issue of 3% sinking fund de¬
normally have a very pronounced
Railway had a drop of more than
bentures, series B, due May 1,
seasonal factor in their traffic and
50% in common share earnings
This seasonal factor is 1964. The outstanding bonds were
for the first two months but for earnings.
brought to market in 1944 by a
occasioned by the strong depend¬
the quarter there was a modest
ence on grain and other
agricul¬ group led by Halsey, Stuart & Co.
year-to-year increase in earnings.
Inc.
Since the new offering is
tural products and in some cases,
A,
series
the wage factor are
the
reported
net
operating income of $7,556,333 for
first quarter this year con¬
trasted with a net operating def¬
the
icit of $1,557,659 a year ago, a net
Most of this
gain of $9,114,992.
gain
was
in
March—for the first
notably Great Northern, by the
heavy iron ore movement.
Iron
ore
shipments do not start until
the Lakes open, generally some
time
in
middle
or
late
April.
being thrown open to public
bentures
be
will
balance
Also, weather conditions, particu¬
larly in mountainous territories,
its own account.
in
operations
hamper
generally
the winter months.
Chicago Railways
Cons. "A" 5s, 1927
.
For the past
five
the
Common
&
Preferred
The
series
new
Does
well
pretty
traffic (a year
redeployment of troops sus¬
tained
in the first quar¬
revenues
to reappear.
7
the
in
year-to-year
earnings picture now that March
are
definite
a
being reported there is
prospect of further wide
gains during the next two months.
A
being
very
look
6s and 6V2S
for
seriously affected
Many analysts
moderation of the generally
pessi¬
mistic public attitude towards
stocks in the
4
considerable
least
at
traffic
this time
at
ago
year
was
by major strikes.
Chicago R apid T ransit
effects
Street,
'
and
rail
light of the present
prospective
more
favorable
for the
in
the
widely
the
MEMBERS
tNew York Stock Exchange and other
"Heading Security and Commodity Exchs.
1120
Broadway, Ne^YorkS, N.Y.
„.
131
Boyce
Opens New Branch
WASHINGTON, D. C.
—4—
So. LaSalle St., Chicago 4, 111.
&
Bros.
New
York
other
Guaranteed Stocks
opened
Special Securities
a
Stein
of the
Exchange
in
the
under
the
office
Building
and
have
Exchanges,
branch
Trust
—
members
Stock
leading
Union
Bonds
Boyce,
management of Robert T. Norman.
Mr.
Norman
became
associated
GUARANTEED RAILROAD STOCKS-BONDS
New York 4, N. Y.
Telephone BOwling Green 9-6400
Teletype NY
1-1063
July
for
of
the
opportunity
to
part of it is allo¬
cated to holders of such balances.
pref¬
convert
expansion purposes.
sistance
Whether
Initially,
substantial portion
a
of which $5,177,000
expended as of Jan. 1,
remainder
expected
is
addition
to
the
proceeds of
financing
operation,
funds will be available for the
pansion
without
that
form
some
when
its
comes
obvious.
least
Italian
the
which
000
undertaken
has
it
excessive
burden
to
just
declared
Egypt will pos¬
that after July 15
obligation
be¬
Britain of this
release
The Egyptian
keep in London.
Government
has
adequate amount of strong
With Herrick,
Special
Waddell
to The Financial
Chronicle
balance
sterling
for
the
countries,
from
provisions
for
too,
of her blocked
may be re¬
purpose.
Other
are
It is no wonder many
people in
the prospects
growing concern.
It seems
from July 15 Britain's dwin¬
dling dollar resources are to serve
not only to meet Britain's
own
dollar
deficit—which itself is sub¬
enough—but also that of
countries. Nor
ex¬
stantial
de¬
a
With King
as
Britain are viewing
with
j LOS
exports to Brit-
ible and invisible
that
to be spent before Jan. 1, 1949.
present
What is
bear in mind
is to
000,000, plus
whatever sterling
surplus it may accumulate in the
future in excess of the £10,000,-
$39,552,000,
In
matter of detail.
a
Washington Administration to de¬
cide whether to grant or author¬
ize such assistance or whether to
at
it
under
rubbing their
will be invested in U. S. Govern¬ hands/ metaphorically
speaking,
at the thought of the dollars they
ment securities.
The expansion program involves are going to secure out of the pro¬
ceeds of the loan to Britain.
expenditures
of- approximately
the
through unofficial chan¬
be raised
$120,000,000 as
Government
will be entitled to convert £30,of
loss
leased
The
or
of assistance
Britain will be unable to fulfill
leap in the dark.
The
Anglo - Italian
Payments its obligation under the Loan
It will be for the
Agreement alone will lead to the Agreement.
tain, plus such part
1947.
another
inter-government
whether the dollars will
sume
loan
converted, not even the author¬
intends to make the
funds available for general cor¬
been
additional financial as¬
by
the United
States.
such assistance will as¬
through
dollars the whole amount of
sess an
the company
had
possible to maintain the con¬
of sterling would be
be
vertibility
ANGELES, CALIF. —
Morton Harvey is connected witii
the financing even¬ currencies, since she will be able
Herrick, Waddell & Co., Inc., 55
used by the airline to convert the proceeds of her vis¬
Liberty Street, New York City.
Proceeds of
that
it appears
in which it will
In such circumstances
that the only way
essential
.
agree¬
of sterling
for the funding
balances a large
is regarded, therefore, in
quarters, as an irresponsible
announced yes¬
number of other
that
Special to
*
Merritt & Co-
The Financial
Chronicle
ANGELES, CALIF.—Paul
Darwin has become affiliated
LOS
M.
with
Merritt
King
Chamber of
&
Commerce
With Buckley
Co., Inc.,
Building-
Brothers *
Special to The Financial
Chronicle
f
FRANCISCO, CALIF. —
Windsor D. Gigelow is now con¬
nected
with
Buckley Brothers,
members of the New York Stock
Exchange
and other exchanges,
SAN
whose Pacific
Coast headquarters
530 West
converted into Sixth Street.
countries for
ing with them until 1941, when he equipment and other assets, from the sole purpose of meeting cur¬
rent
requirements as and wheh Yates With First Trust Co.
entered the Army Chemical War¬ $18,000,000 bank loans to be made
Special to The Financial Chronicle
they arise.
Many governments
available
to
the
fare Service.
Edwin D. Flather,
company,
and
will build up dollar reserves at
LINCOLN, NEB.—George V.
with Alex. Brown & Sons in their
preciation
Washington office in 1927, remain¬
Broad Street
ments
nels is
April 30.
tually will be
pated
Stein Bros. &
long,
the
on
members
porate purposes, and it is antici¬
earnings comparisons.
the
taken
if under
especially
of
of
fears
restoration
The restoration of converti¬
$25 per share, after the registra¬
tion statement became effective at
for
a
unduly pessimistic, one ap¬
to be justified in suggesting
the proceeds of the loan will
exhausted
in
a
matter of
ities.
Redpath, The First Boston Cor¬
poration >and
Hornblower
&
Weeks. The stock was offered at
a.m.
nationaliza¬
be
is
of
first
into
terday by Auchincloss, Parker &
10:30
of
reason
the
It
ception
the
oversubscription of the
of 390,000 shares of North¬
Airlines, Inc., 4.6%, $25 par
was
in
pears
British Commonwealth—will take
Quick
stock
County.
supplied
is
(Continued from first page)
bility
value cumulative convertible
populous
Westchester
service
of
sections
part of Manhattan.
granted that all overseas holders
of sterling—with the possible ex¬
so
'
1
in
Bronx,
of
Steam
sterling they are entitled to con¬
vert.
Nobody has the least idea
of the amount that is likely to be
Oversubscribed
erence
of
15th.
many
issue
are
the
parts
-
strictions—as
Preferred Stock
west
results
Old Class "A"
Pacific Airmotive
\
Gas
supplied in Manhattan
is
gloomy months, possibly before the end of
year.
Nor is
the dollar
view taken of the prospects lies this
not so much in the anticipation of amount representing Britain's own
a
large
import
surplus—which reserve (as distinct from the pro¬
could, to some extent, be kept ceeds of the loan) likely to suf¬
under control through import re¬ fice to meet the pressure for very
v
i
bonds
bid¬ convertibility of sterling
Northwest Airlines
of the sharp change for
better
New Class "B"
♦
cago.
except
portion.
Sterling Crisis Impend?
a
phases
The main
(CDT) at
Chi¬
a.m.
Salle
La
Queens
of
Borough
Queens and in the more
that
Bids will be re¬
11
to
up
North
and
to
the
ter) but they are now beginning
On top
Co., Inc.
been
221
service
ing
early
the
of
northeastern
the
(Continued from first page)
organization of production during
tion.
Manhattan,
and in
Brooklyn
and
Bronx
and in Westchester County
aggregating
B
*
seasonal
ironed out by war
the
R. Hoe &
so
or
have
curves
ago
Arden Farms
years
ceived
the
$65,000,000.
bidding for
investor
institutional
basis.
ice in the Boroughs of
short-
of
account
on
oper¬
unified
They supply electric serv¬
par,
applied
term bank loans now
possibility
the
at
been
ated for many years on a
of
payments
is foreseen
that it may go to a rival invest¬
ment banking syndicate or to an
ding,
subsidiaries have
ity
1,
10-year 3V2% de¬
due April 1, 1948, and
$60,000,000
the
redeeming,
of
redemption date.
Consolidated Edison and its util¬
bonds will be applied to
cost
year
accrued to the
the
of
sale
100
to
last
most
the
from
Proceeds
series B
Invites Bids
&: Ohio
the
Co.
&
Cudahy Packing
Baltimore
March
due
if redeemed in
commencing April
1, 1976, in each case with interest
declining
1982, was sold publicly in March
through an underwriting group
also headed by Morgan Stanley
who
Molloy,
the
step
2%%,
Mr.
tion
the 31, 1948, and thereafter at prices
on
is
year,
redemp¬
optional
at
prices which start at 104.05
for the period on or before March
in a proposed plan
for one of the largest corporate
debt refunding
operations ever
undertaken. An issue of $100,000,000 first & refunding mtge. bonds,
managerof the
will
this
far
so
second
Holsapple &
Co.,
placed
securities
hiarket
with
of about 10%
the
porate
years
was
operating
net
the
many
income during
first two months of the year
for the first quarter reported
had sustained a drop
in
of
Mr.
Klein, who for
had
income
representing one
largest issues of new cor¬
offering,
The
with
them.
the year net oper¬
two months of
redeemable
turity.
associ¬
come
Co. of New
refunding mortgage bonds, 2%% series B, due
April 1, 1977. The bonds, which were awarded to the group yester¬
day at competitive bidding, are being offered at 101.05 and accrued
interest, to yield 2.575% to ma-^
York, Inc., first and
and
have
loy
$100,000,000 principal amount of Consolidated Edison
of
Peter E. Mol-
hour increase finally v-
granted in May was not retroac¬
tive, As earnings comparisons for
the first two months this year
Klein
E.
is publicly offering
which
bankers
Exchanges, announce that Charles
earnings reports started
coming in late last week and for the most part they met the most
optimistic expectations.
More accurate comparisons with the per¬
formance of a year ago are now possible.
Last year practically all
of the carriers charged to March operations the full retroactive
16 cents an hour wage increases for the first quarter.
The additional
first
and
& Co. heads a nationwide group of investment
today (Thursday) a new issue
Morgan Stanley
Co., 30 Pine
Street, New York City, members
of the New York Stock and Curb
Stanley Heller &
March
Edison
Publicly Offered at 101.05
Morgan Stanley Wins Consolidated
Ghas. E. Klein Joins
The
Thursday, May 1, 1947
FINANCIAL CHRONICLE
THE COMMERCIAL &
(2344)
years
who has been with Stein Bros. &
from the proceeds
Boyce
since
1933
representative,
the firm.
as
Washington
will remain with
.
•
tion
after
been
1947
of
ten
accruing
and
1948
substitute
on
the
flight
of the disposi¬
Martin
acquired.
during
202
airplanes
airplanes
have
is
it
certain
sterling
dollars
by
will
any
means
long
is
in
Los
Angeles,
be
by overseas
Britain's expense.
It
are
Yates has been
impossible to foresee how
Britain's
will stand this
dollar
drain.
of the First
resources
Without be¬
10th
&
O
added to the staff
Trust Co. of Lincoln,
Streets.
Volume i65
Number 4590
THE COMMERCIAL &
FINANCIAL CHRONICLE
share of
ABA
earnings in building up
capital funds for future growth. *•;
Opposes Federal Reserve
Guarantee of Small Business Loans
'
In statement filed with Senate
Banking and Currency Committee,
holds such legislation is unwise and unnecessary. Says private
banks give ample loan service to small business and points to
I
J
ABA
<
-
organization of
nationwide network of 51
The American Bankers Association
Bill
(S.
408)
wjjfch would
pro¬
vide for a system of guarantee by
the
Federal
Reserve
Banks
of
chartered
private
such
to
loans
long
as
10
as
businesses
with
necessary
brief statement in oppo¬
tions.Commercial
Small
The principal
years.
bill, according to
is to aid in providing
its sponsor,
small
bank
loans,
for periods
extend
a
Bank
Business
business
panded
Marriner
S.
Eccles, Chairman of the Federal
Reserve Board has already testi¬
We
fied
before
in
Committee
the
favor of the
(See "The
measure.
Chronicle" April 24,
1947, p. 18.)
The text of the ABA statement
"The Association has
objec¬
no
Section 1 of S. 408 which,
tion to
has to do with the repeal of Sec-i
tion
13b
the
Federal
have
More
therefore
need
no
tion
at
ex¬
feel
that
the
history.
there
for this type of
The
to
people
business
develop older
to
help them
enterprises or
ple say that there is
credit
structure
small business.
fair terms to
Some peo¬
ones.
a
gap in our
the point of
at
commercial loans
the grounds
on
that it is not only unwise but that
there
has
been
need for such
That has not been
legislation.
Credit
Business
competent
management,
and
the
We
con¬
designate
another
business
be
encouraged
to
any
any
on
carry
using funds that belong to the
Government of the United States.
governmental
a
their
crutch from
quasi-gov¬
or
agency
other
and
treatment
private
be
not
as
against
Commercial Banks and Private
Credit Needs
"The
of
most
important
the
private credit system we
have in the country are the
14,000
ber 12,000
the bank.
reasons
we
respect¬
borrower
Based
of
on
Federal
loans
loaning limits
ated with I. B.
G
a
less
Reserve
outstanding
1946 of Federal
banks,
made
$40,000.
by the
System
as
of
of
20,
Reserve member
study to all of the banks of the
country.
that
on
853,000
This projection indicated
that day there
commercial
of
were
loans
banks.
were
than
some
in
Over
for
ainger,
Presi¬
-
in
the
90%
$25,000
10%
the
d 1 i ng of
a n
bank's
business in the
k
and
Kansas
Colorado.
Mr.
Walter Dembski With
is
Dembski,
formerly
ity
Wm.
Pine
E.
Pollock
&
Co.,
Univers¬
and
of
20
Co.
He is
York
Co.,
Stock
assigned
to
Air
war
he
was
Naval
"Before the end of the
ABA
that
knew
tremendous
there
war
would
for
demand
Air Sea Rescue Officer
the
58th
Bombardment
members
Exchange,
New
announce
Japan both
on
server
and
as
pilot
undertake
to
business
Stern
has
become
Credit
Commission
undertook
campaign
of
across
rescue
survivor personnel from disabled
were
associated with them.
nor a
solicitation of an offer to buy any
planes
en
route to and from
Japan.
be
This announcement is neither
would
of
an
The
offer to sell
of these Bonds.
offer is made only by the Prospectus.
1944 we
Business
ABA
the
educational
an
ob¬
the
type
some
enterprise. In
the
Small
organized
and
who
GFs
returning
wish
and
helped to organize the
Lehman formerly of Air Sea Rescue facilities to
&
with
Wing of
credit
the part of small businessmen
on
and
Liaison
and
Banks
a
Combat
25 Broad Street, Army B-29s participating in raids
City,
that Henry
Herzfeld
veteran of four years
a
service in the U. S.
Navy, achiev¬
of the
Henry Lehman to Staff
&
Hallett
Intelligence. In the closing months
Stern & Co. Adds
York
F.
Treasurer of the New York Trust
mander
Stern
John
an
Assistant
ing the rank of Lieutenant Com¬
Street, New York City.
New
was
formerly
Corpor¬
Inc.,
Hallett
grauate of
Yale
Wm. E. Pollock & Go.
Walter
a
all
Nov.
the A.B.A. projected this
Fewer
fair
than
survey
r
souri,
408."
the New York Hanseatic
one
I
will be associ¬
guaranty section of
ation, has become associated with
to
of
Assistant Vice-:
States of Mis¬
small
as
appointment
as
He
fully file these objections to the
num¬
Of this
classified
are
less.
a
segment
the
John F. Hallett
P r e s ident of
h
enterprise.
[
of
Chemical Bank & Trust
Co.,
the
"For these
Houston, Chairman
announces
"We feel that the banks should
quasi-govern¬
mental agency to offer to guaran¬
tee 90% of the loans of the
banks,
or
partnership
retain
small
to
dent,
banks.
tend that it would be
unwise for
the Government at this time to
loans
to
loans
individuals.
the
preferential
commercial
these
opportunity
to
years
Vice
the
portfolios
the
or
been
and
through the
Frank K.
placed in the position of receiving
of
fellow
has
By Chemical Bank
The
of
and tax laws which will
give the
an
Small
sell,
banks
meet.
to
of income of the
ernmental
little
demonstrated
no
to
smaller
commercial
every
prepared
source
or
banks with
new
is
primary
John F. Hallett App't'd
willing to underwrite
participate in the credit risks
agency
sonable rates and
competent
in
which
risk-taking without
commercial banks.
Reserve,
Act. However, the Association is demonstrated. Small business has
opposed to that section of the bilkpmple sources of credit, On the
having to do with the guaranty of other hand, its needs are goods
of
might experience
banks are in good condition.
They
anxious to make loans at rea¬
are
on
bracket
the normal operation of their
af¬
fairs. ,We have now a federal
is
legisla¬
time.
present
believes that the
Federal
Reserve banks'
surplus
accounts
should be kept unim¬
paired
and
without
contingent
indicating that the
great majority, of credit applicar
tions
from
business
are
in
a
bank
A.B.A.
banks
$25,000,
over
.
busi¬
new
financed in 1946 than
at any similar time in our
start
follows:
field
greatly.
nesses were
channels.
and
Development
"Commercial bank loans in the
small
capital that they could not obtain
from
banks
through the usual
lending
Loans
Reserve Banks
.
"The
such
tions which should be assumed by
individuals and private institu¬
of the
purpose
regional credit
April 24 submitted to the
on
Senate Banking and Currency Committee
sition to the part of the Tobey$>
V
-
liabilities in order to enable them
to underwrite
any losses
which
with $750 millions to handle extraordinary loan requirements
groups
-
Surplus Funds of the Federal
J
$100,000,000
the country with
member banks to advise them
our
of
ways
and means by which
they could be of service to small
in the postwar period.
urged larger banks to set up
business
We
small business credit
to
with
counsel
This
men.
small
done.
was
»
Inc
departments
business¬
First
We demon¬
and
Refunding Mortgage Bonds, 25/s% Series B
strated how small and large banks
could work together in extending
loans
to
large
A
rowers.
of
the past
within
made
small
and
number
Dated
bor¬
April 1,19^7
Interest payable
being made and that this prac¬
tice is normal banking procedure.
are
In
addition
take
credit
groups
initiate
to
credit
up
which
loans
could
otherwise be handled.
not
wherever
These
designed
not
were
themselves
loans
to extend
were
Price 101.05% and Accrued Interest
but
additional credits
needed.
These
credit
banking's new post¬
credit vehicle, and in some
groups
war
were
.
areas
considerable
use
made of this vehicle.
has
been
Copies of the Prospectus
The aggre¬
gate amount of credit made avail¬
v
able
by these 51 credit groups is
well over $750,000,000.
Loan
"In
American
went
on
BLYTH & CO., INC.
statement
reiterated
was
again in 1947
days ago).
It was
be
used
commercial
which
to
and
banks
business
field.
believes
that
obligations
are
in
as
it is
,
THE FIRST BOSTON CORPORATION
underwrite
industrial
take
must
The
HARRIMAN RIPLEY & CO.
LAZARD FRERES & CO.
1945
now
KIDDER, PEABODY & CO.
Incorporated
[✓
SALOMON BROS. & HUTZLER
STONE & WEBSTER SECURITIES CORPORATION
SMITH, BARNEY & CO.
UNION SECURITIES CORPORATION
should
funds
government
GOLDMAN, SACHS & CO.
(less than ten
the feeling of
the Association then
not
EASTMAN, DILLON & CO.
This
agencies.
by governmental
that
legally offer
record against the guar¬
anty of loans in peacetime in the
commercial and industrial fields
and
as may
the
Association
Bankers
be obtained from only such of the undersigned
MORGAN STANLEY & CO.
Guaranties
the convention of
1943
may
these Bonds in compliance with the Securities laws
of the respective States.
American Bankers Association and
,
April 1 and October 1 in New York, N. Y.
in the nation to
areas
of
care
set
we
51
groups in
April 1, 1977
indi¬
year
that thousands of such loans
cate
Due
surveys
in
the
risks
WHITE, WELD & CO.
CLARK, DODGE & CO.
DREXEL & CO.
the
Association
the
now
so
LEE HIGGINSON CORPORATION
F.S.MOSELEY & CO.
government's
great that
May 1,1947.
it should not undertake, especially
in
a
period of prosperity, obliga-,
"
**"• V
:
THE
COMMERCIAL & FINANCIAL
Thursday, May 1*1947
CHRONICLE
(2346)
18
Outlook
Atom Bomb
atomic bombs
Throw Money Away
If investors attended a financial school from the time that they
small children, the first thing that they might learn to chant
in kindergarten would be: "We like dividends."
In the first grade, they might be taught to say: "We buy only
•dividend paying stock," while in the second grade they might con-
»
r
r
i
receive those nice
to
order
dend
Group Securities, inc.
will
not
many
other
request
York 5, N. Y.
it
the
investors
Navy:
the
heads
dividend—even though
constitutes
income
capital—
income and
return of
it as
taxes on their soIf the investor
dividend.
called
SERIES
from
investment dealer, or from
^
&
CORPORATION
SECURITIES
NEW YORK 5, N. Y.
I
costs.r
the
man,
United
assistant
Pres¬
ident, business
$8,114,000 including
unrealized
appreciation.
special bulletin on National
Stock Series has been issued bv
National
Securities & Research
A
again urged
reduce
to
prices.
The
responsibility at this mo¬
ment, or a greater opportunity
for service to their country, than
businessmen.
our
A pressing task
ing production.
-By careful plan¬
by elimination of wasteful
methods 'and
practices, by ex¬
ning,
text
of
panding facilities where
letter follows:
and
United States Chamber
"To the
is to re¬
prices wherever possible at
all levels while steadily increas¬
duce
the President's
President Truman
a'»
community leaders have
of all businessmen today
.
is
"No
graver
by
the
to
so
finance, and the government.
Dr.
John R. SteelStates
challenge
of us* pull together—
agriculture, "business and
labor,
of
Chamber
lot, Commence
of
successful
long as all
Annual
Meeting
jthe
of
risk
the
of
sion
3 5th
significant
of
Presi¬
Chamber of Commerce of the United States, which was
i
'read
at.
the*
—
:
opening
ses¬ democratic way of life runs no
*
atomi:
quantities."
"Rockets with atomic war¬
capable of thousands ol
1947
31,
on
President Truman to William K. Jackson,
dent of the
(a) For a
It points out
Corporation.
frequently hit their peak just be¬
fore
an
"ex" date, and slump
Prospectus-upon request
120 BROADWAY,
letter from
needed,
increasing, productivity,
businessmen can greatly help in
by
and to the delegates dispelling the inflationary cloud
annual meeting, I ex¬ now hanging over us. The United
States has long been known for
tend my most cordial greetings
It is heartening to know that this its success in the mass production
nationwide federation of Ameri¬ of goods at low prices by wellcan
businessmen is gathering in paid
workingmen
and women
themselves
make
up
the
the Nation's capital not merely to who
discuss questions relating to the greater portion of the market for
welfare
of individual
business¬ the goods they produce. On this
firm foundation we must and will
men, but to consider the general
welfare of our people as a whole move forward to an ever freer
ever
expanding system of
and the ways in which business¬ and
of Commerce,
to
its 35th
further America's con¬ private enterprise."
.
prosperity and freedom.
In
response to the President's
"It is indeed fitting
that "*you message, the Chamber adopted a
spends the dividend, he is merely
though the prices of underlying
spending • capital
and throwing issues are approximately the same have chosen, at this particular resolution favoring lower prices,
moment in our Nation's history,
away a few dollars for taxes and
but making such reductions con¬
on the
average as ten years ago
the convention theme of 'Paths to
the additional "load" to boot.
1946 dividends exceeded 1936 pay¬
ditional on costs.
Freedom and Plenty.'
Our free
Yet
it is common knowledge ments
by 100%, while earning:
that sales of mutual fund shares last
year were 81% higher thaipay
RESEARCH
a
in
they must treat
NATIONAL
In
nations will possess
in
*v + *
Chamber responds ..by resolution making price
conditional
reductions
produce a
(to)
required
conclusions:
divi¬
beyond
advanced
grade
ceive
your
be
<
responsibility, by careful planning and elimination of >
wherever possible while increas-
ing production.
will take any
/ it
unrealized appreciation on invest¬
fund share just be¬ ments amounting to $2,057,000.
fore it goes ex-dividend, they are Selected Industries Incorporated,
paying for the dividend and a under the same management, re¬
"load" charge on the dividend as
ports net assets at market of $41,well.
Moreover, when they re¬
959,000, including $9,218,000 ol
Incorporated
SECURITIES
.
buy a mutual
Investment dealer or
63 Wall Street, New
.
\ Z
'
.
.
Commerce of U. S., assembled at Washington, t
wasteful methods, to reduce prices
significant number of bombs .
These calculations lead us to two
plus the distribution charge. They
must also realize that when they
Distributors Group,
business has
.
.
'
.
Tells Chamber of
their financial miles of range are not to be ex¬
schooling, particularly those who pected for another 25 years
buy mutual fund shares just be¬
'
|; ■
fore they go "ex."
Reasonably in¬ Notes
The
George Putnam Fund ol
telligent investors
must realize
that the offering price of a mutual Boston has issued an interesting
fund share is based on the market bulletin called "Investing Beyono
value of the underlying securities the Horizon."
and cash on hand, plus accumu¬
Broad Street Investing Corpora¬
lated income and security profits, tion reports net assets as of March
of
on
.
fully to complete one bomb . '.v.
additional period of several years
bombs
Unfortunately
have
SHARES
from your
Task is to Reduce Prices: Truman
'
checks."
second
a prospectus
' j
Imf
number 61
years, perhaps as many as 8 to 15
sider themselves sophisticated and
onl.y the U. S. will possess atomic
say:
"We only buy • stocks just bombs in significant quantities
before they sell ex-dividend in
(b) After the period mentioned
RAILROAD
BOND
■
other nation several years success¬
were
i
■
knowledge only
our
developed
HENRY HUNT
One Way to
M.
»
to the best
U. S. has
and manufactured
(semi-official): "
of
By
„'
portant" Selected Investments Cot.
of Chicago comments on the atom
bomb outlook as follows: "Army"
Mutual Funds
:
~
Things Seemed
"These
In
of the
can
men
tinued
•
ten years ago.
sharply the day after. Despite its
obvious
disadvantages, dividend
that al¬
"scalping,"
seems
like
flagpole sitting,
pastime.
to be a popular
Mutual
fund salesmen
can
un¬
doubtedly play on the investor's
fondness for dividends and close a
sale
by
the
reminding
investor,
buy it today, you'll get a
dividend in a couple of weeks but
"If you
March 31, 1947, the asset'
Wellington Fund were di¬
As of
vided
as
follows:
Governments
Bonds
Investment
29%;
preciation Bonds and
a
lumber, pulp, and
material supplies,
8%; Common
"Keynotes"
question if they don't lose
more thereby than they gain be¬
$4.25
as ^compared
with $1.86
cause
their customers get in a earned during the first quarter o!
frame of mind where they can't
1946.
If this estimate is correct,
be sold fund shares between divi¬
earnings on the 30 Dow Jones in¬
dend dates and consequently put dustrials for the 12 months ended
it is
questionnaire have reduced
shoe trade lead in
rubber, automobile,
chemical industries following. Uncertainty over
wages, and labor inefficiency listed as reasons
prices on some items in 1947. Leather and
number of cuts, with food and beverage, textile,
Preferred^
Stocks 42%.
published by the
Keystone Company of Boston es¬
timates that, earnings on the Dow
Jones Industrial Average for the
first quarter of 1947 will be $4-
members answering NAM
of
Fifth
Preferreds 21%; Ap¬
and
Widely Reduced Already
Prices
Cash and U. S
for withholding price
Price
reduction.
reductions in
reported on one out of every
from
a
16,000
questionnaire sent to the^>
members of the National
Association
of
lines of products
five of the 5,742 returns received
1947 on certain items or
were
Manufacturers
in
Affirmative replies on price
cuts,
especially prevalent in the
leather and shoe field where 44%
said that they had made some re¬
ductions. Also high on the list of
were
mid-April. Literally hundreds of
prices have been cut. This situa¬
during such March 31, would be $15.74-$15.99, tion is in sharp contrast with the
periods into some other class of equal to more than 9% on its general impression created by re¬ affirmative answers were the food
and beverage industry, the textile
securities.
cent reports which have indicated
present market level.
that only a few price reductions products field and the rubber in¬
Incorporated Investors Explain
In these groups almost a
have been made in the industrial dustry.
Position
third of the companies specified!
field.
Bache
In its quarterly repdrt to share¬
items on which prices had beeru
This strong response represents
holders Incorporated Investors of
cut.
.
more than
a third
(36%) of the
Boston justifies its fully invested
Only a small proportion of the?
total membership of the Associa¬
Bache & Co., 36 Wall Street.
position by saying in part:
"We
returns indicated any lowering of:
tion and reveals a keen interest
believe that much of the current New York City, has announced the
in
the
current
price. situation prices in the cement, glass and!
pessimism is based on the belief signing of a contract with Duclay products field. The same sit—
throughout the industrial field.
that the postwar business and fin¬ Mont's television station WABD
uaton prevailed in iron and steel,,
In addition to making specific
ancial pattern must duplicate that for the use of their facilities in
machinery and heavy equipment.,
reductions in prices, many manu¬
of the years immediately follow¬ the daily presentation of a finan¬
and oil and coal products. The re¬
facturers have resisted price rises
ing World War I.
Then, follow¬ cial news program. The current
sults were approximately "aver¬
in a manner which some believe
ing a short boom, business, prices, schedule calls for a review of de¬
is equivalent to* price reductions. age" in the automobile industry,,
employment, and stock - market velopments in the nation's secur¬
The questionnaires and scores of lumber, furniture, pulp and paper,,
levels suffered a decline that did ities and commodities markets to
and chemical products1. The exact
letters which were received in¬
not
terminate
until 33 months be presented at 1 p. m.
over-all average for all industries
dicate that industrialists are try¬
It may be timely to revert back
after the Armistice.
As a matter
shewed- 20.8% of the companies
ing earnestly to hold the line.
of fact the conditions were so dif¬ almost half a century when back
had made some price cuts.' - 1 ■
The most important factors now
ferent during the two wars, and in 1892 Bache & Co. became the
A large number of letters came
standing in the way of price re¬
the curve of so many of the eco¬ first member firm of the New
in with the returns, bringing out
nomic indices has been so differ¬ York Stock Exchange to install a ductions in individual companies
most emphatically the important
ent after this war compared with private
wire between its New and lines of products were speci¬ observation that those manufac¬
fied cn each questionnaire.
The
the period after the first World York and Albany offices. Then, as
turers who have held prices iru
War
that different
rather than today, it pioneered in the financial uncertainty of material supplies
line and who have vigorously re¬
similar results- ought to be the industry into a new field of com¬ and costs led all other reasons
sisted unwarranted price increases
munications. Today it is utilizing given by the manufacturers in a
logical expectation."
should be given all due credit for
the
family 'of
communication's statistically tally Of the replies.
/ During the first quarter of 1947,
the
significant part they have
All Association members were
youngest member—television.
net assets of Incorporated Invest¬
played in preventing runaway in¬
Commenting upon the use of asked: "Have you made any re¬ flation
ors declined from $70,255 million
in the
industrial fields
ductions in our prices, effective
to $67,398 million.
television, Bache & Co. states that
Many manufacturers reported tftatt
this year?"
Out of the 5,742 re¬
prices had been maintained at low/
in doing so it hopes to contribute
turns there wese 1,194 companies
Industry Ratings
<■
■
and moderate levels in the belief:
to the current effort on the- part
that answered "yes," or
20.8%. that high volume and small profit
In its "New1 York Letter" Hugh
of the financial industry to famil¬ The remainder said "no" except
margins would bring sounder re¬
W.
Long & Co. gives a "good
for 98 concerns that gave no an¬
iarize the largest possible audience
sults than high, selling prices. A
profit possibility" rating to the
swer.
Those who answered "yes" substantial number of concerns
with the aims and effort of "the
money
for investment
& Go. Sponsors
Television Broadcasts
HUGHW. LONG & CO.
'
1N<0**01UTC{>
48 WAU STREET,
NEW YORK S,
iOV ANOIUS
.
N,V,
CHICAGO
one
e
Custodian
Funds
Prospectus
from
your
The
may
be obtained
local investment dealer
or
Keystone Company
of Boston
50 Congrej*
Street, Boston 9, M.ass.
following industries:
automobile,
building, machinery,
metals, rail¬
road,
steel.
railroad
equipment,
'
and
Stock Exchange
and
their
and its members
place
economic pattern.
in
'
the .nation's
\
.
were
referring
items
or
to
lines, and
the products
one
or
more
not to all of
of the company.
said that they have not
raised their
prices for many years because of
(Continued
on page
'45)
Volume1 165
"Number 4590
THE COMMERCIAL &
FINANCIAL CHRONICLE
(2347)
Reports Levelling Off in Some Business Units
Commerce Department, in summary of current
balance m raw materials supplies and more
business,'
in building
progress
manufacturers-and distributors'stocks.
The
nation's
.
National City Bank
better
sees
economy
is
,
the Department of Commerce an-4>in
nounces
a
of the
summary
cur¬
(
In
according to the
Department, produc¬
and output of final
tion
is
up
products
towards
sult
to
better balance
a
of
continues
-
move
as
a
supplies and organizational gains
along the assembly lines.
Both
and
distributors
have made substantial progress in
rebuilding their stocks. Although
the
backlog
of
manufacturers'
orders
continues
heavy, the early
reconversion rush to place busi¬
ness
has
given way
to
more
orderly purchasing.
Since mid1946 the dollar value of deliveries
has
tended
to
than that of
rise
more
rapidly
als
during February continued at
the
billion
January
on
annual
basis.
Components
rate
seasonally
a
of $177
adjusted
Changes
of
were
in
na¬
ture, with the exception of farm
income
as
which
declined about 5%
result of the decline in
a
ketings.
■.
sharply divergent trends
reported in sales among the
different types of retail outlets
which
have. appeared
This decline
mar¬
almost
was
entirely offset by scattered gains
in wages and salaries in the pro¬
in recent
year-to-year gains
and February were
months.
The
in
January
largest at these
materials
and
stores: building
hardware, Up] 19%;
22%; home furnishings,
up 33%; and motor vehicles, up
148%.
At
the
other
extreme,
jewelry stores and ''women's ap¬
food,
up
outlets
than
a
show
sales
lower
ago—down 7 and 3%,
year
respectively.
China
of
The over-all
sale
prices
moved
ing
March
above the
measure
is
within
at
sales
stated
a
having
limits dur¬
narrow
level
end of
of whole¬
as
about
1946.
5%
Prices of
downwarcP'from the highs
edged
prevailing
early
in
the
month.
prices
of
industrial
have continued to rise,
products
at
a
somewhat
and
The value of construction work
larger than in the compara¬
ble quarter of last
encountering more
disposing of goods
which had heretofore found ready
year—$2.3 bil¬
lion as compared with $1.5 billion.
However, the value of total con¬
struction activity in March was
sales either
lower
merchants
are
difficulties
in
cause
other
as
substitutes
goods
were
be¬
or
not com¬
peting for the consumer's dollar.
The over-all
sales
dollar total of retail
maintained
was
at
a
high
.
is
""
isl'
>
mm
"offered
another
are
is
cluded
the
se¬
Chinese
business
opportunity;
to
turned
■
arrangement
about
any
completely
as
the
the
:r
si
not available
institution, which
Under
of
transac¬
thought that
inasmuch
dov/n the
"
credit
a
involved
cured,
first
it
con¬
mid-April, the
Na¬
tional
City Bank will negotiate
shippers' bills under authorities
to
purchase to be
opened
in
ac¬
cordance, with licenses approved
the
Board for
Temporary
with
Regulation
of
Imports.
Thus,
shippers will get their money at
The $40,000,000 will cover
230,000 bales of cotton, of which
cotton
is
to
from
India
and
Gordon Rust (left), Vice
President of Peruvian International i
Airways; Arthur S. Kleeman
(center), President of Colonial Trust1
Company, and Senor Pedro Bentin, Chairman of the Board
of the 1
Corporacion Nacional de Turismo of
Peru, at a reception in the '
Rainbow Room, 30 Rockefeller
Plaza, in honor of Senor Bentin. Mr. !
Kleeman made known at the
reception, April 29, that a series !
comprise
150,000 bales. The rest will
come
elsewhere.
The
American cotton, because of sub¬
sidy
considerations,
must
shipped by June 30, 1947.
be
of informal talks will be
held/ in Latin American
countries between ',
local exporters, financiers
and
manufacturers, on the one hand, and I
editors and writers from the U.
S., on the other, to aid in stimulating
|
the anticipated three billion dollar
export market in Latin America.1
FIG Banks Place Debs.
,
than
only
in
January and
was
30%
higher than in March
1946.
January
and
February
showed, year-to-year gains of 67%
and
A
successful
44%, respectively.
an
is¬
Credit
Banks
New York Stock
April 23 by Charles R. Dunn,
New
York,
banks.
of
fiscal
The
agent
financing
for
consisted
Robert
placed
gether
used
at
to
of
was
other
retire
bentures,
As
The
par.
with
The
issue
ered
proceeds, to¬
funds,
Mr.
were
an
$32,730,000 of de¬
maturing May 1,
May
was
194/,
1,
the
of
Hano ceased
LeBrecht
will
be
consid¬
cago,
late
Frank
L.
April 15,
-
and
John
as
Frank
purchase
The
for excessive farm prices.
program
ernmental
real
should there be
revenues
in
a
Predicts lower
gov¬
general price decline.
to
no
circumstances
buy,
trustees under the
L.
Newburger, Sr.,
Arthur C. Weil died
R.
Robert
B.
Wilson,
on
imbalance
cancer
within
in
Winthrop & Co., died
on
partnership April 21.
offering of these Debentures for sale, or as
buy, any of such Debentures. The offer is
Offering Prospectus.
as an
offer to
New Issues
our
the
prices, according to
Fairbanks, Morse & Co.
an
Board.
to
an
a
ments
"A pair of shoes was equivalent
18 pounds of butter in 1939
and 16 pounds in 1941," the analy¬
states.
"Today it purchases
sis
through a repetition of its
disorderly purchase, program in
the
first
quarter
of
1947, the
spread between farm and factory
prices
would
widen
rather
'
i
$17,500,000
Twenty-Year 2%% Debentures
than
Dated
May 1, 1947
Due
narrow."
only 10 pounds. A factory worker
receives in exchange for his dollar
The Index of Consumer Prices—
only 39% as much farm product
Past and Present
as
he did in 1939-1941, or only
The index of consumer prices,
54% as much as in i926."
at its prevailing level, is "not so
The analysis sums of current
much above" its prewar
compara¬
consumer-labOr-industry reactions tive as
was
the stabilized price
by stating: "Consumers, rightly or level of the
prosperous 20's above
wrongly, believe that many com¬ the
pre-World War I average, the
modities are priced too high and
analysis notes.. The cost of living
refrain from purchases in the conduring 1923-1929 averaged 72%
victiori or hope that very shortly
higher than in 1914. < The whole¬
their dollars will buy more.
The sale
price index at the stabilized
labor
press
pursues
the
joint level of the
20's was 69% above
course of demanding lower prices
1914, while the wholesale index
at the same time that it pleads for
for
all
,
'
commodities
'
Price 100% and accrued interest
other
$2,500,000
Serial Debentures
Dated
intensively
is
exploring the me¬
determination."
Price Reduction and
Supply-
Demand Relationships
the
debt
analysis
was
continues,
lion,
or
turn,
were
fully
a
Due $500,000 each May 1, 1948 to
1952, incl.
''
The several maturities of Serial Debentures
1948
1.15%
1949
1.35%
1950
1.50%
-
are
to
bear interest
1952
of
price
as
1.80%
Price 100% and accrued interest in each
war
third; profits, in
sufficiently high to in¬
Copies of the Prospectus
may be obtained from the
undersigned and others among the under¬
the Prospectus
only by persons to whom these Debentures
may be legally
by such underwriters under the securities laws of the
writers named in
offered
particular state concerned.
forced reduc¬ duce a high rate of investment.
compared with Our national wealth under this
study points out.
^
(Continued
on page
case
$10 bil¬
price reduction arising from bet¬ stabilized price
structure rose 20%
ter balanced supply-demand rela¬
within the decade.
Employment
tionships " "will; not
necessarily
correct these areas of imbalance,M rose
5,000,000 from 1923 to
the
follows:
1.65%
A disorganized or
tion
as
1951
than
"the
reduced nearly
May 1, 1947
?
higher prices for services its mem¬ farm
products and foodstuffs was
bership sells.
Industry, too, has
68% greater. "Within these
years,"
grown highly price conscious and
chanics of price
May 1, 1967
,
f
44)
•
Harriman
Ripley & Co.
Incorporated
May 1, 1947.
April 21.
partner
made only by means of the
postwar price structure is the extreme
price level rather than the general level of
analysis of<^
the economics of declining prices
"Should" the government con¬
which has just been completed by tinue its support of high farm
the National Industrial Conference prices or aid speculative move¬
.
to be construed
or as a solicitation of
which
Solomon, partner in Sutro
Richard
Ward withdrew from
This is under
on
an
■
offer
,
L. j
Newburger, Frank
Real Cancer in Price Structure
Industrial Conference Board survey reveals inequalities in prices
of various commodities and blames government's disorderly food
York
.
Bros. & Co., died on April 21.
April 30th,
Bailey
of
Lester
total
Lloyd
Helen
on
ited partners
will
individual, it is understood.
J.
.
Newburger, Jr., and Richard L.
Exchange mem¬
Gwynne to Newburger were admitted as lim¬
Thomas E. King retired from
partnership in Hicks & Price, Chi¬
debentures' outstanding
New
Arthur
1947.
$340,580,000.
the
L.
by the Exchange on May 8th.
LeBrecht will do business as
on
of
Newburger, Sr. in Newburger &
date
Transfer of the
bership
due
1948.
Interest
changes:
debentures dated May 1, 1947, and
2,
Holsapple & Co.,
City, on^April 30th.
The New York Stock
Exchange
has announced the
following firm
the
$19,870,000 1.10% consolidated
Feb.
in
Exchange
Weekly Firm Changes
was
made
amount of
Says Unbalance Within Price Level Is
offering of
of debentures for the Federal
sue
Intermediate
rate.
50%
price lines
or
but
credit
slower
commodities, types,
consumers
was
Bank
Shanghai branch
City Bank of
both farm products and foods have
put in place during the first quar¬
ter of 1947 was said to be about
to
Central
the
tion. Full details
American
of
hourly earnings of wage and sal¬
ary workers.
At the retail level, steadily in¬
creasing quantities of preferred
available
mW
Wf
30—Re¬
once.
By
volume
although
are
York
February, the
at eating
drinking establishments was
also slightly lower than last year's
dollar
have
increased
the
National
and
duction, distribution and service
industries, where money incomes
with
by
with
the
here,
Wholesale
advanced
¥*;k
WW
Chronicle
'.give
the
impression
that
$40,000,000 transaction ar¬
ranged
.
parel
the
minor
a
months
the
amount.
The Department further reports
that income payments to individu¬
about
two
compared with
as
are
orders.
new
these
Financial
WASHINGTON, April
to
New
m6./
re¬
materials
raw
for
rate
$107 billion
full-year total of $97 billion in
a
Some
increasing
manufacturers
nual
was
-.,y. Special to The
cent reports in China
have tended
:
January and Febru¬
The seasonally adjusted an¬
ary.
general,
Commerce
;
level during
rent business situation.
to China
.
continuing to expand but there are
increasing evidences of levelling tendencies in important segments,
^
Seeking Latin-American Market
Financing Cotton
up
:
I!
Thursday, May 1, 1947
COMMERCIAL & FINANCIAL CHRONICLE
THE
(2348)
vances
148%
The Price Problem
Canadian Securities
First
York
and
wage
flays Administration's wage and
WILLIAM J. McKAY
calls attention to price
fiscal
By
$1V2 billion
•ssession of a
.nited States dollars.
<»
^
i: Progressively thereafter espe- <8>
—
Hally following the revaluation of foreign loans out of
fhe Canadian dollar to its original sources has been able
financial
the
irity
been
has
Canada
to
the
from
ranging
Commentary
of
situation
subjected
guely pessimistic to the direst
=itastrophic. Previous grounds for
as Canada's
paralleling those of
felicitation, such
efforts,
h°\d
this
rehabilitate interna¬
tional commerce by generous for¬
eign lending, became a principal
to
::ountry,
of criticism.
-ause
the casual
lad been
of
/alue
Also according
analysts, the Dominion
too hasty in raising the
its
although
currency
enlightened observer had
Dreviously confidently predicted
2very
[such an event. Furthermore in
[extending foreign credits on a re¬
latively unrivalled scale, Canada
[was adjudged to be recklessly
unavoidable, because
of the
" "
existing reto maintain
war
and its aftermath, sev¬
|
link in Canada's
.
the
weak
only
exchange position
immeasurably
strengthened. Moreover the faith
of the Dominion in such a favor¬
able outcome will be amply re¬
warded. During the difficult in¬
shortly
should
be
Canada by means
terim period
of
billion
$1V4
of
serve
in
dollars
gold and U. S. dollars. This figure
thus makes quite favorable com¬
Steps will
"either to
reduce
exchange
States by
the
advanced
that
clear
with
'
..
the implementa¬
policy and with the
successful outcome of Canada's
constructive gamble on the mul¬
tilateral
convertibility
of
the
currencies, Can¬
foreign exchange po¬
should
sition
become
practically
unassailable.
which
MUNICIPAL
were
handicapped by the
inability of the province to
CORPORATION
new
purchase
Following the re¬
in free funds as a result
covery
of the
the New York
by
savings' banks.
CANADIAN STOCKS
Foreign Exchange Control
Board's
annual
A. E. AMES & CO.
• '.
>
'
INCORPORATED
.
I■ ;
; i I I
of
a
1
'
•
i
NY-1-! 045
•
.
Light, Heat & Power
markets
'
' •
May 1 maturity of
for
free
funds
of
& COMPANY
and
sumer
prices,
!
York 5
WHitehall 3-1874
CANADIAN
SECURITIES
Government
Municipal
Provincial
Corporate
follow
the
President's
by holding
the
"The
existing price
funds
therefore,
the con¬
"In the labor
ernment
has
76%.
Retail prices
of food have risen
95% and cloth¬
only
metals
ing
segment, the Gov¬
contributed to
consumers.
Shortly
also
rents have in¬
only 4% and fuels and
80%,
creased
is hit in a two-fold way.
while
lighting only 20%.
Crucial
Importance
of Wage
Policy
cooperation of organized
indispensable to the suc¬
cess of any such program of con¬
certed action in the interests of
"The
labor is
the cost of liv¬
beginning of the war price stability. Wage rates, under
after VJ-Day, it was the Adminis¬ has been due
primarily to higher present conditions, are among the
tration that led the parade for
most inflexible
elements in the
prices of food and clothing, which
higher wages, which in turn gen¬ together are estimated to account entire price structure; or it would
erated the inflationary spiral.
perhaps be more accurate to say
for 55% of the total expenditures
"In
view
of the part it has
that they
are
unique in being
of families of moderate incomes. flexible
only in the upward direc¬
played in boosting prices through
Resistance to wage reduc¬
championing the cause of labor Underlying the rise of 95% in re¬ tion.
and of agriculture, it is unfair for tail food
prices are increases of tions in the event of broad reces¬
the Administration to single out
sions in employment and the cost
154% in wholesale prices of cat¬
industry as the scapegoat and hold
of living would certainly be very
it responsible for breaking the in¬ tle, 426% in hogs and 322% in strong.
A decade of almost un¬
flationary spiral by reducing wheat, with advances of similar broken depression and mass un¬
prices. Furthermore, the Admin¬ magnitude in many other raw employment before the war was
istration intimates that if this is
insufficient to bring about a sub¬
foodstuffs.
Underlying the in¬
not
done, its influence will be
stantial
readjustment in
labor
crease of 80% in clothing are adthrown behind a wage boost."
costs, and the obstacles to such a
readjustment wpuld probably be
even
stronger in the foreseeable
future than they were in the pre¬
war decade.
A considerable share
of the reluctance of industry to
$1,900,000,000 to be drawn down by July 1, and an additional
meet the wage demands of labor
$1,200,000,000 by July, 1948.
since the end of the war has in all
WASHINGTON (Special to the "Chronicle").—To date the UK
probability been due to the belief
has drawn $1,550,000,000 under the loan agreement, the latest draw¬ that any increase in money wage
down being one of $250,000,000<«>rates would tend to become 'fro¬
prices since the granting of the zen' into the price structure, re¬
reported as of April 23. By the
loan to the UK will make it im¬
gardless of what might happen to
end of June, Britain plans to have
possible to accomplish the pur¬ other parts of that structure. . >
drawn down a total of $1,900,000,'"This rigidity of wage rates is
poses of that loan and therefore
000, instead of the $1,500,000,000
necessitate another U. S. loan to due in part to the strength of or¬
planned originally, the UK Gov¬
Britain.
The Secretary replied ganized labor and in part to the
'full-employment' policy which
ernment has advised the United
that the British Government had
the Government attempted to put
the strain on
"The increase in
ing since the
British Loan Draffs Greater Than
Anticipated
*
bonds
their upward
continue
should
States.
Present
plans
call
for
reaction.
*
drawing down an additional $1,-
.
Cummings Appointed by
First of Michigan Corp.
_
64 Wall Street, New
course
recommendations
tural programs total $1,117 million
necessity of
Federal
-
TAYLOR, DEALE
of
practice during the prewar
depression and which has subse¬
200,000,000 during the year ending
quently received more explicit
figures showing the effects of the
June 30, 1948. :
recognition in Federal legislation^
r
\
"
'
winter crisis on Britain's needs,
An integral part of the policy as
Arranged by quarters,-draw¬
but that undoubtedly that crisis it was practiced before the war,,
downs during our fiscal 1947 ap¬
would be reflected in added need and as it-would presumably be
pear as follows:
practiced in the event of a .future
for food imports.
First quarter.
recession, is the maintenance'»of
$400 millions ,
According to the British Am¬
Second quarter.
DETROIT, MICH. —The Board
200 millions
prevailing wage rates, even in the
bassador, Lord Inverchapel, last face of a declining cost of living.
Third quarter... 500 millions
of Directors of the First of Mich¬
Fourth quarter.. 800 millions
winter Britain lost 2,000,000 sheep As long as the Nation is disposed
igan Corporation, Buhl Building,
and able to put such a program
What effect the new high to¬ and had its lambing season ruined,
members of the Detroit Stock Ex¬
lost 30,000 cattle, and must resow into effective operation, there is
bacco taxes will have on the con¬
change, have appointed Cecil R.
little prospect of the restoration of
some ' 200,000
acres
of wheat.
Cummings manager of the Munici¬ templated rate of withdrawal will
the wage flexibility that formerly
Moreover, the winter crisis must
be watched with interest.
pal Buying Department in De¬
have had a serious effect on Brit¬ played such an important part in.
In his press conference of April
troit.
Mr. Cummings has been
revival and
ain's export capacity,
an effect promoting business
associated with the First of Mich¬ 25, Secretary of Commerce W.
maintaining price stability over
Averell
Harriman
was
asked which will take some time to run
igan Corporation as a sales rep¬
the long term."
f
its course.
whether the increase in American
resentative since 1934.
internal
■jRECTOR 2-7231-
ap¬
1%% Dominion of Canada issue,
the
'
■.
*
is
cessation
liquidation in connection with
proached and with the
offer and the
NEW YORK 5, N. Y.
I
sharp improve¬
As the tourist season
the Montreal
TWO WALL STREET
internal
report,
bonds registered a
ment.
meet
eligibility requirements
the
for
I
the
placing of a new issue of 21A%
five-year New Brunswicks which
were
fairly
well received
but
■
PROVINCIAL
f
feature in
the market for externals was
V
,.
farm
tion of such a
leading
for the
generate higher prices and impose
onerous taxes.
As in the case of
It is thus
other countries."
from
During the week the
r
reserves.
selling more, or spending less, or
to increase U. S. dollar income
ada's future
GOVERNMENT
dis¬
principal distortions in the for \he current fiscal year and
structure are indi¬ $1,381 million for the year 1947time, it is nevertheless unsound cated by the changes in price cate¬ 48.)
Agriculture, in turn, which
from an economic point of view, gories since the beginning of the is enjoying the highest money re¬
as
is clearly evident from recent war.
Prices of raw materials in turns in its history, should aban¬
developments.
general, as measured by the in¬ don its demands for financial aid
"While
exhorting industry to dex of the Bureau of Labor Sta¬ from the Government. And labor
lower its prices, the Administra¬ tistics,
have
risen 147%
since should pursue wage policies based
tion remains adamant against the August, 1939, while prices of fin¬ on the recognition that the prin¬
reduction of Federal expenditures, ished goods have increased only cipal upward pressures on the cost
which it holds are down to bed¬ 80%.
Prices of farm products of living are essentially tempo¬
rock.
A careful analysis would have advanced -197%, and prices rary and that continual increases
indicate that with good manage¬
of lumber 193%, while prices of in wage rates, unless matched by
ment billions of dollars could be
increases
in
productivity, can
iron and steel have moved up only
lopped off the budget without im¬
only lead to further advances in
and
prices of nonferrous prices and living costs.
pairing essential services. Lavish 31%
be
adopting such a program in war¬
consequently be taken
deficit with the United
world's
CANADIAN BONDS
price changes sel¬
place without some
been
isting foreign exchange
Consequently
"Since broad
dom take
groups,
parison with the much lauded
certainly in- 1945 total of $1H billions. In the
Iterposed an unexpected unfavor¬ light of this leport it is also dif¬
able factor and the Dominion's ficult to reconcile the previous
single-minded confidence in the forebodings of disaster with the
implementatipn of the principles fact, that has been previously em¬
of Bretton Woods at one time ap¬ phasized, that last year Canada
had an overall net favorable trade
peared to be badly misplaced. It
balance of $458 millions.
[now appears, however, that by
Perhaps the most significant
grace of the unwavering U. S.¬
Canadian international financial feature of the report, however, is
policies, the multilateral converti¬ the implication that Canadian fi¬
bility of the world's currencies is nancial policy will be directed
rapidly approaching the practical toward the maintenance of the ex¬ expenditures
stage.
Essential
including the Gov¬ turbance to production, employ¬ prices of its products at the low¬
ernment, must share in the re¬ ment and national income, the est possible level.
Distributors
a full flow of exports. New for- sponsibility for the distorted and price outlook is a matter of con¬ should cooperate by marking up
eign outlets for her goods have top-heavy price structure.
Too cern to everyone. If the readjust¬ the prices of their goods as little
been
established and Canadian small a
proportion of war funds ment comes without undue delay, as is consistent with sound longwere
financed by taxes and too and if in the meantime the up¬ term operation.
Bankers should
prestige abroad has never
on
a higher plane.
large a proportion by borrowings ward pressure on prices in gen- adhere
closely to
conservative
..Despite this extraordinary strain from banks, which is- definitely feral is held' to a minimum, the credit policies with a view to pre¬
on. the
Dominion resources the inflationary.^, In order to stimu¬ effects may be moderate and of venting over-expansion. Govern¬
recent report of the Chairman of late production on a large scale short duration.
The likelihood of ment should reduce expenditures,
the
Foreign
Exchange Control during the war, a farm price-sup¬ such a favorable outcome depends avoid further borrowing, conduct
Board contradicts in a somewhat porting program
was
instituted to no small extent on whether its food-buying programs in such
surprising fashion the dire esti¬ which does not ekpire until the considerations of immediate gain a way as to preserve maximum
mates of the many prophets of end of next year.
JUnder the pro¬ are subordinated to those of long- stability in markets for farm
gloom. Notwithstanding a record, visions of this measure the major term welfare in the formulation products and foods, and drasti¬
although non-recurrent deficit in groups of farm products are sup¬ of current wage and -price poli¬ cally reduce its payments in sup¬
trade with this
country during ported at around 90% of parity cies."
port of agriculture.
(Estimated
Federal expenditures for agricul¬
1946, at the end of the year Can¬ with non-agricultural prices. While
ada still had the substantial re¬ strong arguments can undoubtedly Where Are the Price Distortions?
eral
British crisis
The
•
"Guaranty
The
caption "The Battle
[shortsighted.
I
Cooperation
Survey," pub¬
of
Prices," the First
National lished by the Guaranty Trust Co. natural forces. In so far as direct
Bank of Boston, in its "Monthly of New York, contains a leading action can be helpful in the pres¬
titled
"The Problem of ent situation, it will require the
New England Letter," says in part article
Prices," from which we quote as cooperation of several groups. One
as follows:
"While a large part of the price follows:
of these is industry, which should
the
advance was
strength. Despite wartime gifts
a remarkable performance of
still remained in the enviable
exchange surplus in the form of gold and
rally acclaimed for its outstanding
md loans to the Allied nations and
■xternal debt reduction the Dominion
skins.
principal distortions in the
price structure will probably not
be corrected primarily by direct
and purposeful action but by the
lapse of time and the operation of
'
foreign exchange position was gen-
1945 Canada's
i'
cotton and
raw
"The
distortions.
policy.
Under
At the close of
Broad
Guaranty Trust Co. of New
Bank of Boston
National
of 267% in
in hides and
not
and
requested any additional loan
that
he
had
not
seen
any
into
Volume
.
165 : Number 4590
THE
COMMERCIAL
The War's Legacy for
(Continued from
15)
page
become
appropriate
public ownership.
tionalization and in at least an¬
other three countries
greater gov¬
ernment
control
of
subjects
for
& FINANCIAL CHRONICLE
(2349)
huge public debt
Banking
ponderant
makeup
The
large debt management
roblem that lies ahead
makes it
the
bank
general
rates.
it" plays
part
of
and of tb& pre-
assets
pattern
(in
the banks.
is that
the
concerns
of
I take it to be
of
we
The
danger for
may slip by almost
perceptible stages into
interest
of government
f
lif
conditio
a
domination of oi
self-evident
banking functions, leaving not!
the Treasury that as long as we have a debt of
ing but the ownership to remal
bank-eligible con¬ anything like the present magni¬ in private control.
:
cases, almost
cept, and perhaps develop it fur- tude, government fiscal
to
de facto
policy
Here at home there has been then
Fortunately there is a crownir;
nationalization, has
For bankers this
will seek to maintain low inter¬
been put into effect.
obviously
difference between our approac
no
very aggressive sentiment in means
reduced
No
banks,
amounting, in
So
far
as
Aggressive
for
some
Sentiment
PPear
Here
,
central
banks
favor
alone
are
of actual nationalization
banks.
our
concerned, the trend has been
all
toward nationalization.
No
of
If
anything, sentiment
that direction has, I should
say,
in
.
less
than
33
central
banks
diminished.
are
sults of
which
old tradition built
upon the Bank
of
England's great record in the
19th century as a
privately-owned
bank of issue was so
The
day.
It
know* that
the
be
less
no
supervise
than
owned
are
the
four
by
what
has
of
Or
is
it
because
In
foreign
tion's enemies?
toward
the
banks,
in
Is the
short,
I
cannot
is that the
for the nation¬
have varied in
In Czecho¬
slovakia, for example, there was
as far as I can learn, any seri¬
not,
criticism of the bankers.
here, and in most other
tries
where
place, the
In¬
coun¬
nationalization
same men
before
has
nationalization.
The move¬
Czechoslovakia and in
in
the
Balkan
•have
been
cal.
It
countries
seems
to
predominantly politi¬
reflects
the
influence
of
Soviet Russia within whose shad¬
ow these nations are
compelled to
live.
The system
ing in these
ficed
as
a
I
leave
the
the
,ef private bank¬
coufijzries
burnt
instituted
a
of
was
interest
control
sumer
of
on
offering to
extreme
is
is
a
country has recently
comprehensive mone¬
endowed with central bank¬
a
previous
help and advice
of
our
own
Federal Reserve authorities.
it
is
nationalization has had
more
than
tinge of social revolution about
The
-
nationalization
Banque de France
from
-sprung
a
of
the
to
have
deep-seated
con-
seems
eviction
on the part of the dom¬
inant French Left that ownership
of a national institution should be
"vested in the State and not in the
so-called
200
families.
The
na¬
tionalization of the four big com-
imercial banks in France
have
seems
to
from a similar phi¬
These
four
banks—
sprung
losophy.
.Credit
Lyonnais, Societe Generale,
Comptoir
Nationale
d'Escompte de Paris, and Banque N'a-
-tionale—held
more
than
half
of
all French
French
size
deposits. They had, in
oninion, by reason of their
and
bankers
the
was
con¬
Like the regulation
credit in
our
economy,
possible that control in this
used
Still
the
again if needed.
another
full
wartime
legacy,
effects of which
not
are
yet clear, has been the large ac¬
cumulation of liquid assets on the
part of individuals and businesses,
which has given them a consider¬
able degree of independence from
the
banks.
By the middle of last
these accumulations were es¬
year
timated
billion,
to
or
nation-wide
since
of
interest
banks
contrary,
them
payments
were
rate
of
other
to
public
about
held
our
debt
brought
from
in
hard
my
money
and it
there is bound
bias
does
to
of
In
war, there is apparent a dismay¬
ing tendency among the nations of
brought with
incorporate these de¬
Interest Earnings of Banks
Here, obviously, is
an
target for individuals
intent
to
in
their
permanent
way
It
is
argued
that credit
is
not
supplied by the banks to the gov¬
ernment at a price that far ex¬
ceeds
its
cost and
outright national¬
the banking system.
A
question
is
quarters
whole
idea
as
the
banks
interest
of
their
the
war
years
of
ence
ment.
pro¬
public
should
by banks
on
interest
payments would
adjusted to the cost of service.
Still another
implication of
has
not
have brought
our
banking
For better
time
of
deeper
a
upon
or
common
debt.
ever
and
to
the
changes it
our
where
securities to
they
before in
a
a
termined
system
can
people who are de¬
also
to
remain
If
come
.
gipvepiP
for worse
our
close¬
more
interest
in
the
nationalization
to
the
Chace, Whiteside,
Ameri¬
Warren & Sears
Formed in Boston
BOSTON,
MASS.
—
activities,
riods
poration,
with
has
become
been,, linked primarily
prosperity of the busi¬
ness
community, became linked
primarily with the credit of the
the
government and the market value
of
its
obligations.; The Treasury
the first time in its
history
for
made
felt
an
official
responsible
avowal
that
it
Inc., members of the Boston Stock
Exchange, and the firm
.
Philadelphia Plan
tem.
To that end there
arose
the
entirely new concept of "bankeligible" Treasury issues. In other
words, so intimate has become the
connection
between
May 1,1949
May 1,1950
May 1,1955
2.Q0
May 1, 1960
2.30
May 1,1951
1.65
May 1,1956
2.05
May 1,1961
2.35
May 1,1952
1.75
May 1,1957
2.10
May 1,1962
2.40
ment
the
the
needs
but also
banks.
to
May 1,1958
2.20%
1.95
May 1,1959
2.25
The unsold portion
of
of these certificates
are
offered subject
to
prior sale, when,
as
if issued and received by us, subject to approval of the Interstate Commerce
Commission and the iti.strict Court of the United States for the District of Connecticut.
and
Salomon Bros. & Hutzler
the
fit the
govern¬
needs of
Stroud & Company
Incorporated
merely
fit
1.85%
government
debt and the banks that the Treas¬
ury realizes that it must fashion
its security offerings not
to
AND YIELDS
May 1,1953
May 1,1954
1.15%
1.35
1.50
for
maintaining
liquidity of the banking sys¬
the
May 1,1948
April 30, 1947.
associated
Chace, Whiteside & Warren,
Equipment Trust Certificates
MATURITIES
had
with
Winslow
Sears, formerly head of Sears Cor¬
New Haven and Hartford
Issued under the
-
inde¬
pendent and free.
To be dated May 1, 1947 and to mature 8351,000 each May 1 from 1948 to 1962
safety and soundness of the
banking system, which in past pe¬
po¬
name
has
been changed to Chace,
Whiteside,
banking system it will come,
in all
probability, not by govern¬ Warren & Sears. Offices are at 24
ment taking over the
'v"
ownership Federal Street.'
2%
interest in their responsibility for
this group of bank assets.
oui
banking
serve
Equipment Trust of 1947, No. 1
Treasury and the Federal Reserve
authorities a deep and continuing
a
free and in¬
can
New York,
three-quarters of total assets. This
fact alone is sufficient to give the
in
are
$5,265,000
equalled
Today
peace.
ever
banks
our
dependent
best
been
ly to the Treasury by the strong
of
wa
banking and yet
here
banks have been tied
bond
it
na¬
ing with government. There has
developed an increased depend¬
ment debt to be held
be
likely
the
viding the major part of the na¬
tion's money supply.'-.Various
pro¬
posals have,v been advanced
for
radically new forms of govern¬
which
of
not
and deeper involvement of bank¬
compensating
in
trend
is
demand for
wholly inconsistent with the pre¬
dominant
pattery abroad.
The
payments
function
there
in
concerning
of
means
for
raised
and
tionalization
that the usual
also
been
history,
of
to be any public
concept of interest does not ap¬
ply because of the special nature
of the transaction.
some
in
sition to prove that
form
nancial reform
uery.
role
stronger than
treme
groups
war
were
of
budgetary economy, fi¬ ization of
or mere
demagog- VIn our owti country there has
on
of the
given
doing things. In many countries
this tendency has taken the ex¬
attractive
and
and
the years
de
natioh(
I
for the banking system
of
this country a period of strength¬
ening and of preparing for a vital
the world to retain the authoritar¬
ian devices that war
it
was
many
flush earnings and expanding re¬
sources
to
repair
the
ravagei
which still jremained
from
thr
Great Depression. The war yean
As
equivalent to their net
operating
earnings.
pro
favorabl
a
that
in
th
fre
of
faithfully and well. Beyond that
very wisely, our bankers by anc
large utilized the war years oJ
*
banks.
This
represented
about
half the gross
operating earnings
of these banks and was
more than
opinion
grea
with
to * banking, to play i
spectacular part, yet the^part tha
was given them our banks
player
we
look at the
legacy of
banking developments left by the
vices
of
or?
resolve
bankers
bankers
not
Conclusion
charge on the public
going to the commercial
our
vigor
national
our
climate
the side of easy
money on
the part of the fiscal
authorities
who do the
controlling.
attack
problems
abroad.
on
In
to
and
This
to
th"
whici
We have de
war.
nied
constant
a
instead
difficult
men.
that
mean
be
fight the
vides to
thg
possible
as
economics
imagination
and
is
upon ourselves in
NEW ISSUE
inescapable impact of the war
the expansion of their port¬
point
money
rates
It should not,
cided
and
pegging of rates at immut¬
able levels; but it does
preclude
any likelihood of a free market in
by
imposed
n
unprecedented gov¬
folios of government
a
in
difference
1929.
banks.
For
American banks the most obvious
was
of course,
not have minor ad¬
may
fast
But overshadowing all of these
developments and dominating the
postwar banking scene is the in¬
and
we
natior^
have chosen to pi
we
rapidly
as
authoritarian
we
annual
$1,400,000,000.
words, about one-fourth
was
aside
pol¬
money
judgment, require^ the
the interest
debt
easy
That
nation
as a
rates
does not mean,
time to time.
commercial
an
viewing.
together
money
der to
that
expansion
debt
running at
whose experiments in the
alization of banks I have been rC
Re¬
All of this adds up
continuing
justments
relatively small capital
At the end of last
year
on
a
That
liabilities, these large earnings
accrued to
working
easy,
postwar economics and that y
of our foreign neighbor
many
icy.
been
earnings
of capital
pace with
to
to
be no less than $222
almost four times the
Government Bonds
has
System
maintain
indefinitely.
to
record
expansion
keep
accounts.
importance of
field, developed in wartime, will
be
and,
did not
was
bound
are
The
In France the movement toward
:
course
national scale of
In view of the
Para¬
monetary
system
.had beem chaotic. ' The existing
^credit facilities were inadequate.
The new system was devised with
-ah
a
are
Exchange margins, this
type of qualitative credit con¬
consumer
;
result
ap¬
savings and mortgage de¬
partment. Here the motive seems
to haire
been
mainly economic.
a
to
a
The
all of the risk.
sacri¬ comparable figure for
ing functions and also empowered
to deal directly with the public
through
a
banking department
.1;
or
Stock
trol.
serve
long rising trend of govern¬
security prices up to
a
year ago brought a
steady flow
of security
profits to the banks.
govern¬
to surmise what
credit.
ernment
the
while
independ¬
ent private banking enterprise.
;
Another wartime
development
government-owned Bank of Para¬
The
having
have
the
we
a
Treasury and the Federal
can
mechanics
implications of such
fluence of
and
of
the
loans
you
tary and banking reform, includ¬
ing the establishment of a new
guay
idea
out
Vastly Increased Holdings of
other
This
guay.
signifi¬
legacies for
for the continuation of
peasement.
At
this
carry
making
most
war's
ment bears most
for the
most part are running the banks
in pretty much the same
way as
ment
of
of
any
reasons
taken
is
It may^turn
.
find
the various countries.
ous
banking
a
alization of banks
deed
the
bankers
movement
evidence to
such theories. The truth
support
of
cant
did
various countries for their sins of
omission or commission?
brought not only
but
savings
banks
ernment guaranties.
out that one of the
na¬
retribution
visited upon the bankers of these
the GI loan pro¬
course
banks and other thrift institutions
within the seductive orbit of gov¬
ex-
nationalization
direction
general
gram which has
'
erting political power?
Or
they collaborate with their
same
commercial
public?
used their
they
the
this
there is of
brought about
power as a means of
production
war
suggestions for peacetime
guaranteed loan idea.
of
use
I
this marked trend toward
nation¬
alization?
Is it because bankers
in some of these countries
failed
to serve the needs of the
^financial
of
,
was
of guaranteed V-loans.
means
several
governments.
Now,
financing
by
.
developments
On
the
coun¬
Out of this experience have grown
to
banking institutions which
the
ment
are
One of these
of
you
did, however, bring a
significant develop¬
likely to leave a
impression upon the
permanent
the order of
interest
may
of
non-existent.
I take it also to be fair¬
large public debt for a
long time. Finally, I believe that
sub¬
10 years earlier.
pattern of banking in this
try.
'
among important banks of
issue is still
privately-owned. All
world nationalization
war
ments which
alone
the
have
a
number
Today that tradition is dead. The
Federal Reserve System almost
over
expansion of the gov¬
ernment debt and the
purchase by
the banks on book
credit of
assets
ated the Federal Reserve
System.
banks appears to
est rates.
ly evident that
showed
trasted with 36%
strong that
copied it in 1914 when we cre¬
the
rate ap¬
any
to be
pears
entirely government-owned.
number, nine have only
recently been nationalized.
The
this
we
This at
freedom to har die
their portfolios.
The large
indicated by the re¬ stantial
portions of that debt
have,
Gallup poll last January of course,
greatly expanded bank
that only 26% of
earning assets. Although rates of
the public favors nationalization
return have been
relatively low,
of banking in this
country, con¬ losses on these
now
Of
likely that
ill retain the
Nationalization
THE
Thursday, May 1, 1947
CHRONICLE
COMMERCIAL & FINANCIAL
(2350)'
2
Let's Shrink Our
Worries!
can
help ourselves and our fel¬
(Continued from page 5)
low-men adequately, and where
J
echoing mildly what other a
we,
can breathe,
in a post-war
in
people say in more detail.
world, freely and naturally.
Yet was there ever a time when If
This type of optimism is not
skies were
"clear," when times see? First off, we would see that
our
American
people
have unrealistic; it is opposed to any
were not "trying," "difficult" and
attitude
of
worrying
ourselves
"dangerous," and when problems emerged from the war not Only sick and into a depression over
that we should stand off
little way, and look at therri
the light of a wide perspective.
we
did that, what would we
ask me,
Salesman's Corner
Securities
By JOHN
was
DUTTON
Comstock & Co. of Chicago
Timely Message From
confronted people that
"Let's Go To Work!" was mailed to
Investment dealers throughout the country by the above investment
firm
It starts off by saying that in their office they have a quota¬
tion displayed which states that "Lazy men are just as useless as
Last week a
Dead Ones
of
and take up
follow the
us
card entitled
resistance in this
that many
business. When the
salesmen take it for granted that they
of going out and "beating the bushes
going gets a bit rugged many
should sit back and loaf, instead
>
business is bound to be
things along.
very correct analysis
of what is now going on in securities firms by bringing to your at¬
tention that a habit of resting on your oars becomes contagious to
all those around you. As they put it, "We believe that a combination
of concentrated leg and brain work could easily change the lacka¬
daisical attitude of the investment public. Meanwhile bargains in
securities are going begging because the salesman is following the
line of least resistance." If you are infecting those around you with
pessimism and a "what's the use" attitude, the chances are that you
doing the same thing to your customers. Optimism and pessimism
have their genesis in the emotions, one is a powerful force for suc¬
and progress the other is as potent a force for failure. As the
card aptly put it, "the richest and most powerful nation the world
has ever known is constantly beset by Fears most of which will never
materialize. And
"We all know that even in a declining market,
less active
problems
that
belabor and.
frighten us today?1 . . . Hatred,
greed, misunderstanding and pre¬
judice are driving nations in¬
evitably toward murderous wars."
And going further back, it was
are
say:
.
.
.
trade, AND THERE
ARE BUYERS."
A1
.
We should have more of this type of advertising in the invest¬
ment business. After all is said and done the main purpose of ad¬
vertising is to create an atmosphere of good will and confidence in
buyer to complete a
seller must have a
.
.
that ever I was born
set it right!"
to
Some
other kind of advertising,
!" Thanks Comstock! You are backed up by
years of historical precedent which prove to us that markets go down
then up, and down again and up again, but those who consistently
go ahead are sure of one thing, the U. S. A. will still be doing busi¬
ness at the
same old stand next year, and the year after and for
many years after that.
If that isn't true then "The lazy among us
are right, and the rest of us might just as well be dead."
any
Pennsylvania Bankers
To Convene in
May
PHILADELPHIA, PA.—Edmund
Oppenheimer, Vanden Broeck &
Co., members of New York Stock
Exchange and associate members
New York Curb Exchange, will
W. Thomas,
nia
Bankers
President Pennsylva¬
Association, has an¬
following three
the
nounced
speakers for the Association's an¬
40 Ex¬ nual convention to be held at the
York City, to Hotel Traymore, Atlantic City,
transact a domestic and interna¬
May 21-23: C. W. Bailey, President
tional brokerage business includ¬ American Bankers Association; D.
open
offices on May 1 at
change Place, New
foreign
ing
The
in
new
currency
firm has
securities.
correspondents
major financial centers
of the
world.
Oppenheimer, Al¬
L.
Vanden Broeck, Frank
and
Robert. Ranger Lans-
Winfried
fred
Neu
Emmert Brumbaugh,
Secretary of
Theodore R. McKeldin, Mayor of Baltimore.
Banking,
and
H.
burgh, member New
York Stock
Exchange, are general partners of
the firm.
Robert J. UHman and
Truman
spoke truly on Monday when he
said—"We can talk ourselves into
depression."
a
that if we are
It is clear to me
our
of them:
threaten
financed our own
but we helped fi¬
only
not
We
expenses
war
to
do-;
our
if
so
are
we
and
tried
'to
.
maintain
routines —
routing if you
tasted
advancing . to. our-democratic
"
other¬ will. ':;
Looking ahead, then, i.there are
laboj\
wise the sum of $47 billions and
burdens for us to bear.t But we
(4) Unbalanced trade. Exports we do not count on the ultimate
that
are
taking $16 billion of
can
bear them.
Nothing worth
return of more than a fraction of
while was ever achieved without
goods out of the country this year, that huge amount. ,1
as against imports of $9 billions.
and
enthusiasm,
In a material sense we are far- understanding
(5) Enormous tax burdens, and and-away the strongest, richest and we as a people are capable
the need for income tax relief.
of
these.
We have observed in
and
most prosperous people on
the world the
(6) The need for economic as¬ earth. We have emerged from the other parts of
sistance to prostrate nations
breakdown of old routines, and
war more productive, industrially,
throughout'the world.
than ever, while other great na¬ by right thinking and sound en¬
we
shall
avoid the
(7) The need for relief and fobd tions and people have collapsed. thusiasms
for helpless, starving millions.
that
have
brought
With a few notable exceptions the precedents
(8)
The
contest of private industries of other people are despair to those other parts of
the world. For our own welfare
enterprise aaginst the philosophy
prostrate,
or
at best terribly
of state control.
crippled. It would almost seem then, and for the welfare of much
(9) The deadlock in'arriving at that the destiny that has formed of the civilized world, we need to
an
stand
adequate, just and workable the
by the tried and tested
pattern of our existence has
(3)
more
Vanden Broeck & Go.
President
allies,
our
nance
under lendlease and
them
control organized
an
Oppenheimer,
have
Strikes and strike threats
Demands for legislation to
(2)
.
to be developed
dealers who re¬
will think highly of
be applied at the
point of local interest in your own community with just as construc¬
tive
effect. If you have something to say that will be of interest
to ALL the people in your town, not just the investors alone, say it.
But say it well. Don't overtalk or let it get sloppy. If you do this
consistently, whenever the opportunity arises, you will find it the
most effective type of advertising that you could use. If you wish
to create an atmosphere of good will, be human, be part of your com¬
munity, avoid the controversial, and tell others about it. There are
Bed Cross drives, Cancer Fund Committees, or activities that help
the boys and girls in your town, civic undertakings, and occasions
when an expression of faith in your country and community will do
to bring you and your firm favorably before your public than
Form
we
problems. Here are some
(1) High prices which
our
prosperity.
that the way is cleared for business
natural course of events. Surely investment
ceive such a message as this from another firm
those who sent it. This sort of advertising can also
i
of Our Problems
enough,
True
in the
be accomplished by
"Let's Go To Work!
O
joint,
cursed spite,
the advertiser so
can
of
out
is
time
"The
cess
every
Hamlet
had
who
Shakespeare
productive ca¬
To
current annual income—
to
permit ourselves any over¬
to use the figure President Tru¬
man-used on Monday—of $176,- whelming worry now, it should be
over
our
attitude toward our¬
000,000,000
an
amount
enor¬
selves. We need to be impressed
mously
greater
than
any
with the importance of emotional
peacetime year prior to the war.
as well as logical remedies for our
I never cease being amazed at
ills. Of course, we h^ive to see to
the magnificent measures of our
it that our industrial, commercial
strength. Think of what we did
and
financial routines continue
during the war. In the five years
uninterruptedly. But a great re¬
ending Dec. 31, 1945, the United
States Treasury raised the colos¬ sponsibility is to see that the same
sal
sum
of
$378,000,000,000 to holds true of those routines which
affect our individual and group
finance the war, 40% of it being
obtained
from taxes.
And the morale. We must be alert to keep
intact
the ^ constructive J- forces
goods
produced, which that
which affect the thinking of our"
amount represented, came virtu¬
people, and which must continue
ally from within our own borders
solution for the
is the
"Where
our
our
structure.
economic
goods, a
speech:
1937,
that today
social and
quote
once more he
the weaknesses in
enormously,
resources
our
pacity is prodigally large. Having
6% of the world's population we
are turning out 25% of the world's
exactly 10 years ago this month
Here is a sentence from that Apiril,
business." Naturally when this happens
than when an effort is made to push
In this respect we might add to Comstock's
for
so
the
across a
Room." The point is made
More
line of least
built
was
notes
During the war we
nomic might.
going through some old
other *day
and ran
speech that General Hugh
Johnson made here in New York
I
in eco¬
but unequaled
victorious
apparently
solved?
could not be
Hopkinson, Schram lo
Address Exch. Firms
peace.
list of things
that we worry about today. ... I
don't know whether this list is the
determined
There, then, is a
basis of the worry of our women
well
as
the
women
but as it is,
worrying too. In
men,
our
as
are
ward.
Ours
to send us ever
is a heritage
on¬
that
nation on earth envies and
given
a choice, halL the
people on earth would migrate to
share with us. Without trying' to
every
that,
that
routines
meant
if
that
the
in
much
so
have
and
past
to America,
and
supported
properly
her in
maintained will be vital to
and years to come.
the days
have numerous
should make us
great — a healthy people, an
forum that was held here yes¬
abundance of food, unlimited op¬
terday. Dr. Marynia F. Farnham,
portunity for work, and large
Shelby Cullom Davis, who re¬
psychiatrist
and., author,
con¬
lopes
for tomorrow. We have cently resigned as Deputy Super¬
tributed
to
the
discussion by
made long and steady and genuine intendent
of
Insurance
of the
asserting that American women,
progress in living conditions, in State of New York, has formed
the richest in material privileges,
culture,
in education, in' social
his own stock
are the most unhappy women in
and race relations, in the recog¬
exchange firm,
the world. "They have no grasp of
nition of human rights.
Shelby Cul¬
the real privilege of being happy,"
lom
Davis &
We should be consciously aware,
said Dr. Farnham. Margaret CulCo. The com¬
kin Banning, the author, said that every hour that we live, of pos¬
pany will, con¬
women's unhappiness is contrib¬ sessing what so many other people
duct a general
lost — liberties that
uting in great measure to the prized , and
i n v e stment
world's nervousness and unrest. enable us as individuals to walk
business
spe"The basic
unhappiness in the as free men, without feters. We
cializing in selave the right of free press, free
world"
said
Miss Bannning "is
curities of
curable only if we can do some¬ speech and free assemblage. We
this morning's New
appeared
there
York "Times"
of
report
a
a
poetic,
3e
blessings
we
Shelby Gullom Davis
that
Opens Investment Firm
-
thing about women, because they
have such tremendous influence
men."
on
.
Of course, we
neurotics.
of
is
we
are
Life
not
a
being
nation
it
what
cannot help but be conscious
people who are growing less
and caste conscious,
and whatever the trend may be in
divorce
statistics, juvenile
de¬
are
American
a
and less class
surance
,
in¬
com-
t\.'panies and in
their markets.
linquency and the like, tens of
millions of Americans have a con¬
-.^A&Rp'Oi
Davis
a
ted
the firm
with
Shelby Cullom
manager of
that are designed to tinuing and deep and happy feel¬
the insurance
Still, by contrast, we ing for the sacredness of family
ties, and a wide sense of kinship stock department will be Frank
vestment Bankers Association, and only a little while ago had other
partners.
and even more serious matters to and responsibility for those who L. Brokaw who has specialized in
Members of the new firm have Emil
Schram, President of the
count on them in their lives. Ours insurance stocks for over 20 years.
worry about. I recall vividly the
been
prominent in the foreign New York Stock Exchange, will
still
the
most neighborly The firm will be located at 110"
month of April of only two years are
banking and securities fields.
address a dinner meeting of Asso¬ ago,
in offices pre¬
1945, when all of us who people imaginable; we still have William Street
Formation of the new firm was
our
native sense of fun and our
ciation of Stock Exchange firms in were not in uniform were pre¬
viously occupied by F. L. Brokaw
previously reported in the "Finan¬
unconquerable American sense of & Co.
paring for the Seventh War Loan.
George
W.
Ullman
are
limited
Hopkinson, Jr., Drexel
Philadelphia, President In¬
Edward
& Co.,
of the things
as
us.
worry
•
cial Chronicle" of April 3rd.
Washington
on
May 15.
True, we were witnessing the de¬
feat of Germany, and we were
seeing the beginning of the defeat
of
Over-the-Counter Quotation Services
Japan.
and
Doys
But for all of
us
then,
especially for bur 10,000,000
in the armed forces, life was
pretty grim. And only three years
For 34 Years
this month things were even
more
grim. The Germans were
then
in
France," Belgium - and
ago
Italy;
Hitler
was
in
control
of
General
MacArthur was a thousand miles
from the Philippines.
*
; ;
]*'-■ •-
the Continent of Europe;
\
NATIONAL QUOTATION
Established
46 Front
BUREAU, Inc. ?
A
lSfL3
Street, New York 4, N. Y.
Chicsg0
San Francisco
Wider Perspective
Now, then, in what light
i
should
properly look at our current
problems? I would say, if you
we
humor.
Realistic Optimism
of all this
worries to
a
proper proportion?
Of course,
any
optimism that ignores our
present real problems would be
as
irrational as any pessimism
that builds its whole case on those
Now,
in
the
light
shouldn't we shrink our
.
Mr.
Davis served as Deputy
Superintendent of Insurance for',
three years.
ment to
lenge of today is to find out the
realities of our current position.
It
is to find the place
where we
State In¬
Department, Mr. Davis.
been on a special assignment,
had
with
the
which
he
break
of
War
Production Board
undertook at the
World
problems. We want no irrational joining the War
optimism today. What we want is
Mr., Davis was
an
optimism that will come to
grips
with whatever
spirit of
despair is abroad, and that will
match and master it. The chal¬
appoint¬
Prior to his
the New York
surance
business as
York Stock
out¬
Before
War II.
Production Board,..
in the securities
a-member of the New
Exchange.
:
.
.
. f.
Formation of the firm was pre¬
viously reported in the
"Financial
1 Chronicle',' of April 17th.
Volume 165
Number 4590
THE COMMERCIAL &
FINANCIAL CHRONICLE
(2351)
capitalization rates should not in¬
clude any additional hazards
be¬
Future Real Estate Prices
(Continued from
all the charges have been de¬
ducted from gross
income, includ¬
yond those which
9)
page
have
already
given consideration.
er
One-story moderrv industrial
properties
ing
proper reserves for replace¬
ments and depreciation.
Minimum
capitalization
rates of 41/2%
may
applied tQ unusual properties.
These properties would have to be
on
be
ideal in
cation,
every
proper
good
a
financially
a
on
ing for
a warranted rent
the
lease,
based
payments comparable in the
paid by other competitive
This
investor
the
by
situation
ideal
as
should
have
the
little
tenant at the
from
move
trouble
to
area
The
the
in
lack
a
characteristics,
to
the capitalization rate for the
loss of each
quality. For example,
a
Wool worth
or.
Kresge
calling for
rental
a
lease
substantially
in excess of the warranted
would be reflected in a
rental
higher
capitalization rate and might vary
from 4%%'to 7%
depending on
the amount of
rental. Many
appraisers should use two rates—
excess
perhaps 43/2% to that portion
resenting warranted rental
rep¬
and
7% to 10% to that part
represent¬
ing the
rentals.
It may be
point ou,t that the
Department allows such
excess
pertinent
to
Treasury
split
rates
in
properties
where
poses
the
for
valuation
inheritance
rentals
excess
of
,
pur¬
are
clearly shown.
business
proper¬
ties
in suburban areas
ought to be
capitalized around 5%.
They of¬
fer good possibilities of enhance¬
ment
in
value
as
power increases in
ing
The
area.
purchasing
the
is
rent
is
named
coupon,
fee
On
All
small
value
during
return, feeling that the
curity
tant
the lease is the
on
thing and that the
the real estate
These
ary.
point to
paid
$6,581,250.
of
companies
low
rate
of
their
on
should
NEW
!
this
Some
to holders of Common Stock of the
Corporation 38,199
subscribed for upon the exercise of
Subscription Warrants issued to
such holders of Common
Stock, including 21,234 shares subscribed for through
the exercise of Subscription Warrants
shares
which
investment.
Harvard has an
were
were
not
purchased by Underwriters. The 7,537 shares
subscribed for through the exercise of
Subscription Warrants and
were subscribed for
by the Underwriters
the 21,234 shares which
of
exercise
through the
Subscription
Warrants
purchased
by
additional
mercial
hazards.
properties
riveted
the
areas,
As
com¬
out
move
of
non-liquidity,
management and risk features in¬
and
crease
the capitalization
the
difference.
reflects
time
By the
attempt to capitalize in¬
we
dustrial
rate
waterfront
pier rent¬
the capitalization rate is in
12% to
15% bracket.
The
als,
the
or
basis of analysis applies to
apartment houses.
Those apart¬
ment houses that are
same
exam¬
endowment
of
$156,000,000,
Yale
of
$123,000,000, Columbia'of $87,-
000,000 and University of Chicago
of
$70,000,000.
-r-
—v
■
•
-
•
y.-' \•"
<
Life Insurance Investment
:
The First Boston
A
Even
more
Corporation
important than this
well/-built
ments
legislation al¬
insurance, companies
lowing
life
purchase real estate equities.
Up to Feb. 1, 1947, over $87,000,000
has already been invested
by in¬
and
surance
companies in .real estate
investments:
These sums are, of
in
course,
invested
addition
in
h
to- the
0 u s
i n-g
laid-out
properly proportioned, can be
propdrly capitalized at 5% after
adequate reserves have been set¬
up for replacements and deprecia¬
As
we
move
upward
into
the
luxury class, the inherent
hazards increase and the capitali¬
zation
rate
correspondingly in¬
The
creases.
potentially
lower
number
to
pay
bility
in
of available clients able
premium rents, the possi¬
of necessary retrenchment
slight recession and present
high income taxes make this type
of net income much more volatile.
a
Let
funds
more
have
had
from
these
definite
a
sources
tendency to
the
return
real
on
apartment
houses.
immediate prospect of
building costs—as materials
become
to
savings.
available and hourly
important
ally
So
and
labor
than
offset
new
factor—and
a
rents
are
going
to
eventu¬
be
in¬
Operating
expenses will
but the averall pic¬
also increase
ture
effi¬
more
competition
apartments is not too
present
creased.
is ^under
to
no
buy,
circumstances to be construed
or
as
a
as
solicitation of an offer
made
only
by
an
to
offering of these Securities for sale, or as an ofjet.
buy,
means
of
any
the
of such Securities.
Prospectus.
The
should
reflect
income for this
increased
net
type of property
in the future.
offer
is
■
command in this market.
The
tate
good
uses
discernment
mist.
future
He
as
appraiser of real
the
same
as
es¬
390,000 Shares
judgment and
the
good
econo¬
attempts to forecast the
a
general trend and his
values predict
of income.
a
fairly
flow
even
Northwest Airlines, Inc.
Applied
capitalization rates, of
reflect long-term earning
capacities and business conditions.
4.60% Cumulative Preference Stock
course,
A careful
($25 P#r Value, convertible prior to 1957 untew previously redeemed)
analysis of these factors,
seem to
me, to lead to the follow¬
ing conclusions:
,
minor
will
be
a
fairly
Share
Copies of Me Prospectus may be obtained from the undersigned only
where
the
undersigned
1949-1950
consequence;
probably at
Price $25 per
-
with
may
the
legally
offer
Securities
these
Laws
Securities
in
in
such States
compliance
thereof.
even
level.
*
,.
more
productivity of labor
cient, higher wages
bickering will more
the
This
estate
of
of
Whiting, Weeks & Stubbs
The past
investment of these funds and the
future
potential
investment
or
talization
no
Putnam & Co.
throughout the country.
1947-1948-1949 and 50 ought to
continue to be good
years.
There
will probably be a
slight slide-off
during 1948 and I think it will be
lower
Estabrook & Co.
Lynch, Pierce, Fenner & Beane
funds
emphasize at this point
seems to be less possi¬
bility of erring on the low side
than on the high side in the
capi¬
me
that there
There is
Merrill
equities and consequently increase
the
price
such
properties may
apart¬
and
tion.
'
Hornblower & Weeks
projects
lower
well
rooms
'
to
have
and
Goldman, Sachs & Co.
of funds for investment in
well-located,
are /■
sold.
funds
For
real estate is recent
the
been
fund
somewhat
properly reflect
them,' have
these
sizable
such
ple,
of
value)
par
Of the 45,736 shares offered
properties, such as de¬
partment stores at unusually low
have
,
i%Convertible Preferred Stock
(Cumulative, $50
'commercial
return.
not under any
solicitation
dif¬
less short-
funds have purchased good
institutions
43
tne rate
financing offering liquidity;
is long-term
financing
without
liquidity. Eleemosynary
institutions having huge endow¬
of
or as a
estate
other
rates
of record only and is
Pitney-Bowes, Inc.
term
ment
appears as a matter
offering of these securities for sale,
offer to buy any such securities. '
of
maintain
reflect
Outing on Friday, June
Elkridge Club.
45,736 Shares
often
real
more or
100% location and the capitaliza¬
should
and
the
April 30, 1947
se¬
From 1950 through 1955
economic
conditions ought to continue to be
good, unless additional govern¬
mental
burdens
business
or
badly upsets
the
our
are
-placed
foreign
on
situation
export possibili¬
ties.
Analysis and careful study of
heavy industry and construction
prospects
sions.
cqnffrm
these
"
conclu¬
»
Auchincloss, Parker & Redpath
The First Boston
Hornblower & Weeks
Corporation
Shields &
Company
Kidder, Peabody & Cd.— Merrill Lynch, Pierce, Fenner & Beane.
.
Barring unforeseeable possibili¬
ties,
therefore, business condi¬
tions should be
fairly level for the
next seven
or
eight
years
and
Paine, Webber, Jackson & Curtis
i
Day !
as an
an
i
BALTIMORE, MD.-1The Bond
ISSUE
approximately
two types of
the
should
ference—one is
the
be construed
of
interest
different and
are
return
be
But
same.
security
to
t
.
Club of Baltimore
announces that
it will hold its annual Field
partner in Frank E.
a
,
Baltimore Bond Club
Announces Outing
>
impor¬
value
their bonds and
rates
leases
the
oil
the
on
that
circumstances
(per se) is second¬
source
rate
"
May ,8th Stanley T. Stanley
of these securities having been sold, this advertisement
(and often the mort¬
satisfied with a very
are
greater, however, than that on a
property in
a
well-entrenched
tion
not
Stanley lo Firm
will become
for-1
finance
Frank Bliss & Go. to
a
was
the
of
purchase
equipment with an
new
Admit
Stanley
the
to Blisa
—■■■■■»■—
80%
estimated cost of
price of 98.67 for a 2%
net interest cost of
a
and
changed
to
Haven
than
price of
Mr.
often
large
oil
Gulf, Texas or
some
the
owner
surround¬
risk
of
by
of
gagee)
for
Well-located
com¬
payment
the
ther£~
corresponding addition
nationally known oil
the term of guaranteed rental and
we
this
these
even
capture
property under
ideal circumstances to others
that
must be
New
more
$5,265,000 equipment trust cer¬
tificates, maturing May 1, 194862, put up for sale by trustees of
New York, New Haven & Hart¬
ford
RR. April
29. ; Their bid
company, such as
Sinclair.
The value of the prop¬
erty is then determined by a re¬
re-
As
of
10%
guaranteed
another
rental.
same
Equip. Issue
blossomed out in recent years to i
become a most important factor.
investment; if
premises
rates
pany sponsorship.
Here let me
bring to you a tendency which has
remote accident, the ten¬
decides to move, the owner
renting
gasoline stations should reflect
under
on
any
ant
the
New Haven
Stanley.
merly with Merrill
Lynch, Pierce,
designed by Fenner & Beane.
of
/
capitalization
mer¬
offers
as
Special purposes properties such
the ability of that
particular loca¬
tion to earn such rent
and lease
chants.
low
as
Exchange,
firm name will
be
&
are
The certificates
higher rates.
lease call¬
a
rates
Old
1.15% to 2.40%.
Salomon Bros, Offers
Salomon Bros. &
Hutzler, and
Stroud & Co.,
Inc., won the award
suc¬
responsible
tenant
to
as
Commerce Commission
Bliss &
Co, 11 Wall Street, New
ler, and Stroud & Co., Inc., are York
City, members of the New
reoffering certificates, subject to York Stock
approval, at prices to yield from
multi-story buildings or
those carrying onerous tax loads
should obviously be capitalized at
cessful management record
by the
tenant,
capitalization
6%.
respect—100% lo¬
size for utility for
the tenant's
business,
properly located
transportation, labor and local
taxes should reflect market value
Salomon Bros. & Hutz¬
Interstate
we
2.1682%.
White, Weld & Co.,
6th at
1
'
THE
Thursday, May 1, 1947
CHRONICLE
COMMERCIAL & FINANCIAL
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT
RAILROAD COMPANY
UNION PACIFIC
DEC. 31, 1946
REPORT—YEAR EjNDED
FIFTIETH ANNUAL
Per
1945
$12,480,000.00
State and county
Railroad Company:
The Board of Directors submits the following report for the year ended Dec. 31,
1946, for the Union Pacific Railroad Company, including Oregon Short Line Railroad
Company, Oregon-Washington Railroad & Navigation Company, Los Angeles & Salt
Lake Railroad Company and The St. Joseph and Grand Island Railway Company,
whose properties are leased to the Union Pacific Railroad Company. The lessor con*parties have certain income and charges, and the figures in the Income Account, other
o
Union Pacific
the Stockholders of
$11,852,758.47
$48,330,633:89
79.8
722,557.50 100.0
553,423.43
10.4
$60,600,000.00
722,557.50
5,344,508.50
5,573,650.58
5,769,785.08
289,546.47
246,460.24
capital stock.:
————i--Federal unemployment insurance..
4,791,085.07
Federal
retirement.-—*
Federal
-
Other Federal
$22,923,648.23
...
.
_
follows:
road
of
track
yard tracks and sidings—
additional main
Miles of
Miles of
108,539.70
;
$39,182,146.45
1,816,712.47
$55,005,493.38
49,132,421.56
$5,873,071.82
$46,997,308.48
(miles)
of joint
terminal facilities——
for
use
and
3,046,293.10
Investments and Sources
Transportation Operations
from
Income
than
Interest
income.
....
$1,154,200.84
$1,320,210.00
161,161.33
charges
151,883.87
469,359.93
2,187,289.95
tUt Income, from All Sources..;
Rel*fcsed
$797,503.53
51,969.38
26,581.68
19,916.05
538,302.57
722,260.68
183,958.11
$12,320,138.91
$14,671,866.68
$2,351,727.77
ftlhds on
-
$4,951,704.37
-
■-
-
3,780,134.95
13,310,236.52
....
$37,133,327.65
$1,042,969,252.44
$1,026,626,489.91
$11,795,048.39
$11,688,023.60
(Credit)
$173,435,083.69
$59,437,104.76
lupds;..
1
laneous
DISPOSITION
(Credit)
Stock
Pacific
Union
of
Rail-
in!'affiliated
2
;
!
cent
per
1946
;
April
paid
cent
per
-
i
July
paid
cent
$32,376.23
.
700,865.2a
:
$28,532,320.94
$27,799,087.43
i;
$733,233.51
-
and notes
,
t
13,337,460.00
J
$17,319,184.00
Total
>
Current
priated
—
Unappro¬
$16,892,554.23 $17,331,695.17.
^
"Includes
interest, on short-term U.
"Temporary cash investments."
t
#
„
$438,540.94
obligations carried in balance sheet account.
-i
)
i
i
»
:
I
i
. f
'1946
Average miles of road operated
9,775.33
...
and
Loans
1945
Per
Decrease
Increase
T--.Ju.-i
<
64,767,862.71
7,928,255.67
25.8
32.8
9.9
2,222,268.98
25.7
to
2,134,795.23
20.4
of
8,321,134.77
10,455,930.00
2|732|891.12
2,768,377.50
35,486.38
Other passenger-train
...
Switching
i.
...
9,294,053.32
1,894,957.07
Total operating
revenues
•Maintenance of equipment
$361,395,534.29 $491,877,872.15
—.-IIIIIIII"
Miscellaneous operations
General
$46,576,730.42
$69,794,445.10
117,834,077.49
$115,311,779.32 $187,628,522.59
7,880,227.66
7,538,714.08
...I.
140,262,539.14
13,633,024.46
"IIII
Total operating expenses
Revenues over expenses
47,553.977.24
1,779,539.18
$26,398.40
9,017,861.12
!
34,845,661.75
2,353,992.07
9,071,675.75
4,355,537.53
24,228,879.37
34,733,652.93
2,543,269.22
16,338,189.73
110,133.30
189,843.90
$375,060,450.99
$107,753.46
33,020,922.56
25,792,765.44
$3,829.48
7,228,157.12
$33,128,676.02
-
$25,896,689.42
187,701.25
110,315.10
8,365,048.55
$7,231,986.60
4,167,836.28
12,216,168.34
-
'
12,012,711.03
112,008*82
189,277.15
7:266,513.98
and
26.5
69,235,048.90
Total maintenance
Traffic
Transportation
—
$27,829,408.46
.
Miscellaneous
Total
Deferred
9,222,169.03
144,300,151.75
14,203,419.92
8,615,775.75
$286,809,739.61 $362,286,584.09
$74,585,794.68 $129,591,288.06
33.3
$23,217,714.68
48,599,028.59
41.2
$71,816,743.27
—
38.3
4.5
$341,513.58
.....
2.8
4,037,612.61
570,395.46
—
$55,005,493.38
Assets:
Total Deferred
$103,923.98
$95,838,246.40
_
Assets
"
Unadjusted Debits:
Prepayments
Other unadjusted debits
$3,807.81
1,351,031.80
$14,046.21
$17,854.02
1,482,300.03
4.0
7.0
$75,476,844.48
Assets
181.80
8,175,204.65
$131,268.23
•
606,393.28
...
items
Current
Working fund advances
Other deferred assets
OPERATING EXPENSES
•Maintenance of way and structures
*$59,382.83
capital
Co.
20.4
$130,482,337.86
9,017,861.12
.
-J.
„
$279,222,204.59
receivable.
134,321.73
$230,919.74
$8,053,874.64 •;
'
!i__—:—-—
Ohio Railroad
stock applicable
pavment of extra dividend
1914.—
1
Baltimore
1.3
7,399,096.25
6,420,630.93
Express
28,940.00
210,000,000.00
3,552,243.11
2,541.60
162,446,022.76
>1,772,703.93
receivable from agents
dividends receivable
Accrued accounts receivable
Other current assets:
*
872,155.98
8,800,411.65
8,642,899.91
$70,830;773.85
$43,001,365.39
,
and
i
.
(IT.
Material and supplies—.
$91,720,494.73
31,602,179.49
$263,825,662.84 $355,546,157.57
96,370,042.20
-
receivable
car-service balances
Miscellaneous accounts
4.08
9,779.41
$892,845,745.89
: -
conductors
and
Cent
OPERATED REVENUES
—
.•
$87,008,705.39
bills
and
Net balance
Interest
J^Sht
;
$33,905,324.96
$884,791,871.25
Special deposits—.
Traffic
Operating results for year 1946 compared with year 1945:
»
■
,
;_i_J
Temporary-cash investments
S. Government securities)
S. Government
!
$64,148,974.03
22,859,731.36 (
$86,777,785.65 "'
'
Investments-..-—!—
Assets:
Cash
Surplus
,.
$33,845,942.13
—
—
of in¬
in securities (Credit)
vestments
13,337,460.00
!—$17,319,184.00
Earned
•
adjustment
for
'.Reserve
>
3,334,365.00
,
to
-
...
Total
-
$96,597.95
I $64,052,376.08
22,725,409.57.
Lj
Bonds
'
-
-
■v'.
Transferred
companies:
other
=
3,334,365.00
Dividends
in
Stocks
s
1,
cent paid October
—.
Total
Other
:—-
$8.00
380,720.66
9,472,413.04
■:
Total
1,
1947
?/'***nger
'•
.
3,334,365.00
per
2,
—-
Investments
IV2 per cent payable January
•
Advances
.
$1,163,567.95
$18,679,187.24
'
8,771,547.76 ""'
348,344.43 !
,
$3,334,365.00
per
IV2
'
'
Notes
1,
1946
<1946
.
:
stock:
1946
'■V/s-
-
1,990,862.00 $3,981,724.00 ' $3,981,724.00
—
Gammon
l»/2
April. 1, .1946 $1,990,862.00
paid October 1,
• -
$1,076,855.93
$11,818,789.57
$18,679,195.24
■
Stocks
2 per cent .paid
$2,457.50
$194,245.67
com¬
panies:
Preferred stock:
<
$103,410.86
$50.00
$25,115,858.79
$12,922,357.5^
.
—
-Investments
road Co.:
•
depreciation—miscel¬
physical
property
for
$7,343,671.97
$345,689.97
$26,192,714.72
;
physical property
Miscellaneous
1
$539,935.64
»€apital and other reserve funds..
$438,540.94
$107,025.79
$59,333,693.90
$2,507.50
■
.
5
$16,342,762.53
$166,091,411.72
of na¬
defense projects (Credit)
Reserve
on
13,310,236.52
amortization
for
tional
2,161,435.66
1,618,699.29
$34,650,279.17
$16,342,762.53
$23,823,091.13
depreciation—road
equipment (Credit)
and
Decrease
Increase
.
for
Reserve
$2,599,976.60
$33,031,579.88
'
dividends
SHEET—ASSETS
$37,133,327.65
and grants
Donations
33,321,449.63
$23,823,091.13
equipment property
Road and
$8,578,155.98
'■
V
count
Reserve
$34,211,738.23
.
23.5
1 1945
.
.
sSinking
possible
U. S. Government shipments"
$1.32
December 31,
$2,121,271.93
$30,431,603.28
28.3
5.9
_
-1
$1,080,102,580.09 $1,063,759,817.56
from
improvement
equipment fund
Appropriations from income
and surplus prior to July 1,
1907, credited to this ac¬
391,769.61
.
$1.34
$13,373,932.00
42,752,830.18
and
against
"Reserve
from
$4,795,776.02
equipment—9,431,380.55
Receipts
$13,505,867,01
.
32.2
.098
$5.62
Less:
280,944.86
$11,384,595.08
i
2.0
91.08
$4.74
Total
,\
36.5
-
...
Equipment.
Road and
32,053.33
Miscellaneous
$3.40
....
Investments:
311,277.05
163,145.87
40,996.09
$47,703,446.56
rents
14.80
..
1946
$16,595,893.61
.
Miscellaneous
1.
$4.30
passenger-
per
$449,393.65
Charges
Other
and
.
depreciation,
amortization /
charges:
and structures..
Maintenance of
$42,751,742.19
$42,751,742.19
.
37.7
2,865,469
2,095,603,998
and retirement
365,187.93
Income
Fixed
....
Maintenance of way
$15,798,390.38
.
Totii
•.
.
only
revenue
mile——
'Includes
$1,844,248.72
$6,172,237.69
4,233,693.50
1,190,718.22
2,190,710.75
2,501,987.80
315,029.74
510,356.02
1,906,345.09
rents
Miscellaneous
10.3
233,917.44
$31,107,552.65
$6,621,631.34
2,913,483.50
1,029,556.89
bonds and
Miscellaneous
'
December 31,
stocks
on
on
total
i
GENERAL BALANCE
owned..
notes owned
"Income from unfunded securities and accounts
Rertts from lease of road and equipment
Dividends
passenger-train
other
operations—net
oil and gas
from
Income
per
passengers
train
_
1.674
passenger-mile
revenue
Average
_
282.92
1.772
per
(cents)
$1,610,331.28
3,280,210.54
$26,953,351.81
191.84
i.—
revenue
Average
$15,889,775.83
;
Transportation Operations—
from
4.0
$.99
755.78
passenger-train
mile
$5,998,449.56
$12,609,545.29
$14,045,507.11
Net Income
.040
7,596,011
5,740,885,433
770.58
9.0
56.74
——
__
Average
mile,
Rents
4,730,542
__
$9.65
3,645,281,435
Trains)
carried
carried one mile__
distance hauled per passenger
passengers
Average passengers per
125,377.74
$10,999,214.01
balance
tracks,- yards,
equipment—debit
$8.66
passengers
Revenue
Average
—
of
1.000
(Excludes Motor-Car
Revenue
1.942,090/21
terminal facilities-:.
Hire
15.0
22.7
629.09
.960
8,502,636
8.072,479,921
56,505,272
35,546,845,368
572.35
PASSENGER TRAFFIC
75,476,844.48
$45,055,218.27
and
yards
tracks,
joint
of
use
Average
$74,585,794.68 $129,591,288.06
35,403,648.23
84,536,069.79
$40,998,858.92
from
48,002,636
revenue
$130,482,337.86
Railway Operating Income
Rents
7.8
5.71
73.65
79.36
27,474,365,447
freight
distance hauled per ton (miles)
revenue per ton-mile (cents)—
revenue per freight-train mile.
Ton-miles,
7.87
$361,395,534.29 $491,877,872.15
286,809,739.61 362,286,584.09
-
—_
>
(Commercial Freight only)
revenue freight carried
Average
Revenues over expenses
Taxes
13.4
#
op¬
of
Tons
4,480.41
15,789.08
8.1
$4,154,200.84
_
_
FREIGHT TRAFFIC
10.18
Average
revenues
Operating expenses
Decrease
2.47
.16
of
expenses
J
erating revenues
Operations
Transportation
Operating
■
cent—Operating
Per
Increase
1945
9,111.38
1,531.-9
15,796.95
Operated
Mileage
Total
1946, compared
and income for the year
' ! ' • '
1946
9,774.91
1,531.45
4,490.59
Close of Year
Operated Mileage at
Miles
close of year
'
'
operated mileage at
The
12.8
12,609,545.29
INCOME
with 1945, were as
13.0
1.610.331.28
$31,107,552.65
58.1
1,338,120.33
$26,953,351.81
Equipment rents (debit)
Joint facility rents (debit)
68.5
$49,132,421.56
$45,055,218.27
1,229,580.63
$49,759,663.09
$5,873,071.82
$84,536,069.79
$39,182,14G.45
10,999,214.01
17.5
those relating to
than
3.4
196,134.50
...
$43,086.23
$72,683,311.32
$35,403,648.23
transportation operations, and in the Surplus Account and
General Balance Sheet and tabulations and tables relating thereto are stated on a
consolidated basis, excluding offsetting accounts between the companies.
5.3
$627,241.53
$12,269,366.11
excess-profits.
Federal income and
Cent
Decrease
Increase
J 946
TAXES
-
20.8
Vrotal
*
Unadjusted Debits—
$1,486,107.84
$1,368,885.82
$1,206,682,734.34 $1,287,117,897.48
Grand Total
42.4
•Loss
from sale
of Baltimore &
Ohio R. R. Co. common
'
$117,222.02
j,
stbek, charged to this
1
$80,435,163.14
account.
Volume
165
Number 4590
THE COMMERCIAL &
FINANCIAL CHRONICLE
(2353)
ADVERTISEMENT
' '
2S
*
ADVERTISEMENT
ADVERTISEMENT
GENERAL BALANCE
SHEET—LIABILITIES
December 31,
December 31,
19 46
Common
1945
;
$222,302,500.00
99,591,580.79
$321,894,080.79
$321,894,080.79
319,891,869.58
;366,315,157.18
$641,785,550:37
'
$688,209,237.97
Additions and betterments
Affiliated
•''
'
;
$46,423,287.60
$5,413,753.73
accounts
car-service
Interest matured
29,804,058.68
3,o84,s4o.l3
4,089,275.10
but not
pre¬
on
due
common
for
336,697.25
22,547.61
accounts
Taxes
accrued
face
as
carried
the
difference
issuing
bonds
119,058.41
3,334,365.00
181.80
$39,570,169.74
$14,377.50
between
value
of
such
the books
on
companies
(less
discount on
the
discount charged to
9,133,473.09
accounts)
at
1,844,023.99
____'
78,122,648.44
3,356.353.57
2,897,968.11
$136,427,355.57
Liabilities
$7,676,282.09
45,952,174.77
$8,135,336.94
in
the
amounts
securities.
books
companies
consolidating
and
the
the
on
$56,507,361.36
;
back
which
ried
541,614.54
$79,919,994.21
Total Current Liabilities
added
the
190,300.70
32,170,473.67
__
Surplus—Unappropriated
but
1,501.713.33
7,239,449.10
and
Earned
3,334 365.00
1,692,014.03
_
Other current liabilities
Deferred
The
and
par
unextinguished
118,876.61
payable
"
intercompany items,
securities
stock pay¬
proximo—
interest accrued
is
of
set
are
the
car¬
owning
here
up
to
balance
Grand
Total
$t,206,682,734.34 $1,287,117,897.48
Unadjusted Credits:
Premium
Reserve
debt
$5,250,429.32
insurance—
fire
for
TO INVESTMENT IN
ROAD AND
EQUIPMENT PROPERTY
$3,721,400.3/
14,964,846.60
13,925,408.33
funded
on
for
$80,435,163.14k
$459,054.85
EXPENDITURES CHARGEABLE
Reserve
«r—
sheet
of
the Los Angeles &
Railroad Company and
and Grand Island
the
314,149.64
of
able second
Unmatured
Accrued
'
$8,727,528.81
owned by other
companies
are
not
in¬
System
666,082.50
stock
declared Jan. 8, 1914, payable
stockholders
of
record
March 2, 1914, unpaid
on
balance
cluded.
uncalled
$8,727,528.81
.
$365,504,592.70
Railway Company
2,857,367.50
to
Dividend
consolidated
excludes all
Salt Lake
prox¬
on common
$365,503,732.70
-
$374,232,121.51
$39,584,547.24
$116,179.63
unpaid:
but
dividend
this
securities
1,815,110.21
2,191,285.00
Dividends
$374,231,261.51
;
$3,245,177.4®
$11,972,706.26
The St.
Joseph
imo
Extra
404,329.97
regis¬
first
As
\i
1,931,289.84
due
$326,872,570.65
——————
Total Surplus
--
•
.
$3,780,134,95
$38,631,162.05
$338,845,276.91
Surplus—Unappropriated
*
payable-
interest
matured
$35,385,984.60
5,989,813.67
sented
bonds,
7,522,281.16
Surplus—Ap¬
$1,438,168.06
$23,814,245.01
$532,500.00
2,457.50
50.00
!
3,742,146.21
Earned
Total Earned
Surplus
$1,438,168.06
pay-
unpaid:
Coupons matured,
Coupons and
2,586,478.66
balances
wages
Miscellaneous' accounts
2,507.50
propriated
$4,056,256.19
*
and
Decrease
$28,522,352.23
„
3,118,978.66
$46,423,287.60
Earned
Audited
$28,522,352.23
ments-
$9,470,009.92
Increase
$360.00
through
surplus
reserves
Reserve aeainst Dossible
refunds
on
U. S. Government
ship¬
'
Liabilities:
and
retired
and
Total
Companies
Traffic
tered
debt
Sinking fund
:■
31,
1945
$860.00
surplus—appropriated:
Funded
99,591,580.79
V
1
Total
Dividends
surplus.
income
Capital Stock
Funded Debt
Current
$222,302,500.00
stock
Total
Due to
Paid-in
Decrease
Increase
*...
Earned
stock
Preferred
1
*
Stock:
December
i
Caoital
December 3t,
1916
Surplus:
Additions
$1,529,029.01
depreciation—leased
and
Betterments
(excluding
Equipment
1,039,438.27
equipment).
$5,817,507.4?
16,995,281.85
'
property
5,236.42
—
3,480.20
Other unadjusted credits:
Contingent interest
Miscellaneous items
Total
1,756.22
$22,812,789.30
120,023.34
17,819.99
102,203.35
33,673,293.32
26,189,342.00
7,483,951.32
$43,857,450.83
$10,156,378.17
.
Unadjusted Credits-
,
$54,013,829.00
and
of
equipment
Total
Total Liabilities
$792,866,065.59
$882,043,135.04
tout
in
bility
Federal
when
even
attained
the
our
government
,
Budget,
has
tion
economy
semblance
some
of
resources,
but
it
is
because of high produc¬
per capita of our industrial
agricultural workers. Such
Net
and
sta¬
productivity is possible only
expenditures
will still be high. The budget will
toe huge,
primarily because we
der
must pay the
price of
more
.extent that it
can
dollars.
toward
reducing
the
be
dollar Federal debt. For
poses
that
as¬
revenue
lic
future.
much
as
This
collected in peace time before
second world
is
making
total
our
tax
about half of
-entire
income
good
national
in
an
tools
increases
the
at
are
will¬
reward
that
the
best
most efficient
hope of
man¬
money reward is
all-round
incentive
for
beter job, and it is equally
a
men
in the fac¬
furnish Ihe plants and tools.
our
many
increase
in
investment
:
We
Rewards and Incentives
must
recognize
national economy stand
this load? Can the free enterprise
portance
system, as we know it—oi any
other system—be expected to con¬
tribute
this
huge sum without
economy and the principles under
which it thrives, so that it can
produce the huge income required
our
forcible
confiscation?
situation
requiring
termination,
and
a
face
We
courage,
will
to
as
a
People must be work¬
earning, and spending.
•economy.
ing,
and
Above
all
there
must
incen¬
be
tives to encourage people to work
bard,
to
their
expand
business,
production;
mad to increase
source
im¬
safeguarding
our
fortunate. I have
more
important for
us
the
tax
burden
of
our
govern¬
ment, it must give full recognition
the importance of
preserving
the rewards and incentives which
to
are
the
nomic
cornerstone
of
our
eco¬
system.
whole
to
•
and Rewards
-
We
can
all
know
standard
that
x>f
*
our
living
■.
Ameri¬
is
the
highest the word has ever seen,
that we have
more
telephones,
more automobiles, more bathtubs,
more
radios, and more to eat in
proportion to
alay
our
population, than
other country in the world.
This is partly because of our great
Our income tax
dividuals
at
are
upon in¬
graduated in theory,
least, in accordance with
ity
abil¬
to
pay.-This, in my opinion,
is both right and just. I believe
that those who receive richer
wards for their efforts than
and
others,
J
those who receive
a
re¬
greater
share
of
worldly
others,
can
rightly be called
goods
1
than
upon
be
tax sys¬
system
so
as
organized
there will
machinery,
reward
for
underlying
prevents
or
leadership.
motives
of our
economic system must be
allowed
to
prevail. We
know
that
the
power to tax is the
power to de¬
stroy.
If
we
place
tax
burdens
unwisely so as to eliminate the
hope of incentives and
rewards,
gain
may
high
revenues
quickly, but the future
a
a
lower
national
will
income
find
to
tax,
comparative dearth of high in¬
comes, and a greater burden
upon
the small
taxpayer.
sonal
savings. If
machinery, he
the
price
be
a
widely.
If
the • gross
national
product should vary upward ©*;
downward
18%,
corporate
in¬
of
his gadget, and> no
jobs for men to build
the machines or to
operate them.
of excise taxes
additional
I believe that it is of
prime im¬
portance for businessmen and in¬
dustrialists to
with
the
concern
themselves
important
subject of
maintaining purchasing power at
a high level. We need to
display
,
and encourage a high
type of bus¬
iness' statesmanship directed to¬
ward raising the living standards
of the average person and
partic¬
ularly those whose standards
ac¬
tivity, as reflected in the national *
income, does not affect the yield
in
If John Doe has no incentive to
expand his business, neither will
thousands of others like
him, and
the entire economy suffers from
the lack of normal business ex¬
pansion.
60%.
Any variation in industrial
for
reduction
taxes might be
expected to*
come
vary
re¬
order
no
no
income
tax yields may be
expected to increase 40%.
Tha
situation with respect to
corporate
income
tax
varies
still
more"
some
after paying Uncle Sam. As
per¬
,
out
now
$16,342,762.53
expected to decline 40% ; and con¬
versely,
if
the
gross
national
product should increase 18%
ditional
sult,
adequate
Property"—.
risk his savings
his credit for the small ad¬
income that* he can net
and
new
efficiency,
Equipment
to
want
as
and
The
and
debt and has
doesn't
a
those most able to
pay.
Nor should we
attempt to in¬
voke thig-policy to the
extreme,
or
to the extent that it
destroys
incentive toward greater
produc¬
tion
"Road
he buys modern
will have to go in debt again. He
says it took so long to save a little
after paying high taxes, that he
are
quarrel
on
fects
An
the
18%
national
gross
much as it af¬
as
yield of income taxes.
increase or decrease in
product
would
probably result in only a
10%*
change in excise tax yields.
In
other
words,
excise
stable
source
more
than
are
porate
look
either
income
of
are
a"
revenuo
personal
taxes.
excise
upon
taxes
or
We
taxes
cor¬
might
as
our
bread-and-butter taxes because of
the
dependability of their yield.
Any decrease in the national
income
crease
the
means an even
in the
greater in¬
difficulty of raising
necessary
revenue.
That
i»
why I keep emphasizing the need
for full production.
are
below average. It is our duty
stimulate and encourage vig¬
now
Taxing Purchasing Power
In
of
preserving
wards
our
of
to
emphasizing the importance
as
the
incentives and re¬
motivating forces of
economy I
the effects
purchasing
dangers
not
am
of
losing sight
taxation
power. I
upon
recognize the
of
reducing purchasing
through taxation. I believe
power
it is necessary to
weigh the effects
of taxation at different
devels and
on
different elements in
omy.
If
which
would
taxes
more
better
and
expansion
jobs or pro¬
suffer
a
temporary
purchasing power
in
permit
which will
stifle
create
business
expansion
bring ultimate good of
the whole
economy?
j
.Let
Doe
little
us
as
take
an
the
orously the ideas and
business
of
case
John
example. John has a
that makes house¬
factory
American
our
ards and better
*•
k'
' '
some
his
plant
automatic
by
ma¬
'•*
*■
v
make
can
to consume at a national incomei
level of at least 165 billion dollars.
We may
of
I
living.
/
Sources
.
'.
"
"
'
Tax Revenue
classify taxes roughly
into
three main groups: first, in¬
come taxes upon individuals; sec¬
ond,
income taxes
upon
corpora¬
tions; and third, excises, customs,
estate and gift taxes, and miscel¬
laneous receipts.*
The
first
and
second
groups—
'!
For
product
18% from
an
should
assumed
gross
decline
normal,, the
personal income tax yield may be
that with
wisa
policies, with freedom fron*
unnecessary
governmental
strictions and expense, with
telligent
and
we
business
with
can
sound
attain
re¬
in¬
management^
relations,,
labor
this
income.
cordingly, I have assumed
Ac¬
a
na¬
tional
lars
income of 165 billion dol¬
in
estimating the revenua
yields.
Distribution of Tax Burden
How
a
example, if the
confident
am
tax
namely, individual and corporate
income taxes—will vary in amount
depending upon our national in¬
national
in
tax rates for the future re¬
quires an assumption as to what
the national income will be. Wa
have the capacity to produce and
come
people toward higher stand¬
gadgets is very popular.
would; modernize
businessman
can
readily be seen that anyf
attempt to be specific as to in¬
will have bet¬
his contribution to the progress of
come.
putting
we
National Income
It
of
products
at
lower
prices.
Through improved management
and
enlightened leadership, the
hold utensils. One of his
patented
If John
that
so
resources
ter
our econ¬
product, might it not
to
shrinkage
rates
who
no*
our
tax
in
proportionately heavier
a
burden
vide
Taxing Ability to Pay
5
should
put
be
High Production due to Incentives
others
policy that
rather that the
to
more and more tax
legislation. I
believe that whatever may be the
pattern or method for distributing
than
of
tem shall recognize
ability to pay.
This does not
mean, however, that
this
principle
should ? apply
to
every .tax which
is levied, but
for this great tax load.
ourselves with the pro¬
duction of income, which in turn
will yield taxes, than to be con¬
cerned
with
the
enactment' of
Taxes Must Be Supported by
In order to bear this great bur¬
den we need a strong, vigorous
of
the
concern
pro¬
duce.
Production
a
It is far
de¬
-
burden
the
$1,107,386.14b '
5,362,640.65
Well, John is
proportion of the
tax
with
_
:
chinery, he could cut his price,
increase his sales, and make more
money. But John hesitates to do
this. Why?
less
we
Preserve
prewar years.
Can
combination
tory or office, the salesman in the
field, the executives who do the
planning, and the owners who
bill
about 35 billion dollars. This is
the
distribution
effective with the
State and national governments
will collect another 10 billion dol¬
lars,
The
doing
amount equal to
in
the
the
war.
to
to
ner.
ever
was
and
are
furnish
those who serve the
pub¬
by furnishing it with what it
come
wants
as
to
un¬
where
tools
the
and
Earnings
requirements will be/nutlets than
long-run
that
so
workers
normal
times
better
prices which the people
ing and able to pay.
25 billion dollars annually for the
five
system
incentive
an
and
production
the pur¬
Federal
our
of
made
of this discussion I shall
sume
is
workers
billion
260
competitive
.
be measured in
Payments must
'
a
there
to the
war
to pay a greater
mainly
replaced——
retired
$6,470,026.83
$89,177,069.45
national
(Continued from page 5)
not
Credits
Taxes in the Years Ahead
ductions
>
Credits to investment in
Road and Equipment
Property:
Cost of property retired,
Cost
Total
,
.
Expenditures
are
Federal
lion
with
we
tax
dollars
a
billion
going to distributa
burden
among
national
dollars?
(Continued
of
our
income
I
have
on
25
bil¬
people*
of
"16S
enumer—
jfge 26)
I
r
THE
>-«*
'
/•
0
*
COMMERCIAL * KINANCIAL
(2354)
26
I
/ I
,
'"i ; J''
»
..-.LI.-.
CHRONICLE
However, .it is quite
in
■i
i
■■
'
where we
J .: (Continued from page 25)
Med
*
a
believe
I
cannot afford
such high
personal exemptions nor such
rates, and we must realize
principles which
should
guide us in
few of the
low
that
living expenses, but the
topVdollarsr if your living; ex¬
penses are not too high, are your
of
possible that
portion of corporate t taxes is
paid by shareholders, and I do not
oppose^ recognition through some
form of limited credit to the in¬
,a.
V,
-
r
your,
dividual.
.<
"income"
pattern/ However,
themselves
are*, not
that
is
not
,
.
>
tion of verbiage or rearrangement
of sections of the law of course
should
be made. However, I dp
have high hopes of a simpli¬
not
Corporation Income Taxes
necessarily syn- savings which you may invest
When you consider an investment,
If corporate income taxes were
onomous
with; "ability to pay."
principles
you of course consider the risk
In other words, $500 personal ex¬
abolished, as has been proposed
and the return. The return is sub¬
Enough. A program should be
emption applied to income as we
by
some
economists, it would
Specific. With a sum so huge we
ject to more top dollar taxes, and
define it in the law is inequitable
mean
that income tax rates for
will do well to remember the old
if there is not sufficient return
as aplied to persons living under
individuals would be very much
maxim that "We may shear the
remaining after the top -dollar
different circumstances across the
higher—so high as largely to de¬
taxes are paid, you of course re¬
sheep many times, but we can
length and breadth of this coun¬
stroy ipcentive foj; production of
skin him only once."
•
fuse to take the risk. In other
income.
.
try* :
" ' '• II
believe that the 25 billion
Accordingly,. I believe that it words, your top dollars do not be¬
However, we must guard against
come venture capital unless there
dollar budget should be raised in
would be more, equitable to all
the corporate,, r^te becpming : so
"the following manner: from in¬
is a: possibility of retaining a good
excessive that' it.;wUl berdetri¬
taxpayers if' Wd look".' "upon per¬
dividual income taxes, * approxi¬
share of the. additional income
sonal exemptions not only as an
mental to business efficiency or to
which may result. An excessively
mately 9Vz billion dollars; from
attempt to-recognize in part the
the
exercise
of
good
business
corporate income taxes, about 7
high tax rate thus prevents in¬
cost of living, but also as an ad¬
judgment. I believe that the pres¬
billion dollars; and from excises,
vestments in new businesses, acts
ministrative necessity to eliminate
ent rate of 38% on corporate in¬
as a curb on industrial expansion,
customs, estate and gift taxes, and
taxes in amounts so small as not
come
too
closely approximates
miscellaneous
receipts,
in the
and
fjiuq prints in^reasps in^he thi^ point,'and accordingly I sug¬
to justify the-expepse, of. fiol)ect7
national income.
pbighborhood of 8V2 billion doling.
gest a rate of 331/3 % ifor the; long
fers.
1
When considering the tax load,
I think our individual tax rates
pull. Assuming approximately 21
we must not overlook
the prob¬
billion dollars in corporate tax¬
upon the little fellow can be cut
Individual Income Taxes
lems of
small businesses—busi¬
able income, this rate would yield
by** approximately
one-half. * In
How are we going to raise 9V2
nesses which need to accumulate
other words, I would suggest a
7 billion dollars. Such a tax upon
billion dollars from individual in¬
combined normal and surtax rate savings if they are to grow. Any corporations is admittedly heavy,
come taxpayers? First of all, it is
business
which is
not incorpo¬
of 10% on the first $2,000 of tax¬
and without,fair treatment of the
important to keep the base broad
rated, being owned r by an indi¬
able income, and rates graduated
corporate form of business, may
so that a high proportion
of the
vidual or a partnership, is subject
well be destructive. It is quite im¬
upward so that at approximately
people will be taxpayers. If we
of
course
to individual
income
the
$50,000
bracket-the rate
portant, therefore, that we con¬
were to attempt to raise personal
tax rates. If these small businesses
would
be
50%.
The
highest
tinue certain
existing favorable
exemptions * from $500 per ex¬
bracket would carry ~ a
rate of are to plow back a part of their provisions and,. |eliminate. other
emption to $600, the cost of that
earnings and so accumulate capi¬
66%. Such a plan would offer an
provisions which unduly penalize
hnall increase would be 1.6 bil¬
tal for
normal expansion, ^sur¬
incentive
for
every
taxpayer,
corporations having widely fluc¬
lion dollars. You can see the tre¬
taxes must not be too high.
large or small, to increase his in¬
tuating earnings and those oper¬
mendous effect that only a slight
There are a few other items
come. In fact, a man would be in
ating
through
subsidiary com¬
change in the personal exemp¬
which I believe we should con¬
the ranks of top management be¬
tions would have upon total rev¬ fore the government would -take sider in our tax program for the panies. Accordingly, I would sug¬
gest continuing and extending to
enue.
future. Some recognition should
more than half of his "top dollar.'"
five years the provisions for the
Furthermore, I question the use
be
given to earned income as
There is a difference between
carry-over of operating losses in
6f
personal
exemptions as
a
against income from other sources
the first dollar and the last dollar
order to enable the corporations
measure in determining ability to
so as to stimulate the productiv¬
with loss years to recoup their
you make during a year, as you
pay.
For instance, a taxpayer liv¬
know.
The
"bottom dollar" is ity of individual effort. I am not losses in profit years before being
ing
in a' rural community
in
sure how this should be accom¬
worth considerably more to you
required to pay income
taxes.
southern California, growing most
than the "top dollar," because of plished. I do not believe that the
Similarly, corporations operating
of the food for his table, having
earned income credit which form¬
the graduated surtax rates.
The
through
subsidiaries should be
little or no expense for transpor¬
erly was a part of the revenue
permitted to receive dividends
tation to work, requiring little or higher the income, the less the law was
adequate. We need some¬
from other corporations on a taxtop dollar is worth to the tax¬
no heat for his home, and wear¬
thing more than a token recogni¬
free basis. The present penalty of
ing work clothing most of the payer, and when much more than tion of earned income.
half of it goes to the government
2%
for
consolidated
returns
time, is far more able to pay a
;
Also there is the matter of de¬
for' taxes, the incentive to earn
should be removed.
: ;■
tax on a $2,000. income than is a
duction from income for contribu¬
more is reduced,:if not destroyed.
clerk working in New York City
tions.
Fortunately
this country Miscellaneous Taxes and Receipts
When any of us lose our de¬
and earning the same income but
has many citizens who have suf¬
It is estimated that excises, cus-;
having
to
spend
substantial sire to produce, the nation suffers ficient vision, public interest, and
toms, estate and gift taxes, and
amounts for food, clothing,- shel¬ proportionately, because produc¬
drawing
and the difficulty of understand¬
ing them. Any possible:clarifica¬
V
:
Thursday, May 1, 1947
-
fied,
.easy-to-read
tax
-
system.
High taxes must of necessity pro¬
vide for exceptions in order to
alleviate undue
must provide
hardship,
they
or
for different treat¬
ments .because of the peculiar cir¬
cumstances
of
some * taxpayers.
The exceptions and qualifications
are what make laws complicated.
In other words,
complex
.
hand.:
high tax rates and go - hand
in
\ ;*""""
.'Y ^ U
tax: laws
•
Conclusion
•.
In
this
there
is
nation
great
.
of
ours;,
shortage of intelli¬
gence or courage. We have proved
our mettle many times in the
past,
and
no
will
we
do
again.
so
opinion that we,
It
is
nation
and as individuals, have sufficient
ability, and through the applica¬
tion on the part of all of us of
intelligent hard work, we will use
that ability towards attaining still
greater heights.
In our journey through history
we are approaching only a cross¬
my
the
road—not
and
is
it
end
as
of
a
progress—
responsibility
our
as
industrialists of
businessmen and
this nation to offer leadership and
guidance towards the greater pos¬
sibilities that lie ahead.
Results of Treasury
•
"
ter, and transportation. '
! -In years past we have assumed
that
income
reflected
ability
to
Before the war we had much
personal exemptions and
.much lower-rates, and the.dis¬
and if is on pro¬
duction that national income de¬
tion is reduced,
There is another distinction be¬
crepancies
were
felt. Now we are
not
so
keenly
facing a period
tween
in
dollars
bottom
dollars
that
:
and
those top
top
dollars
quite often have another job to
do. The bottom dollars' take care
of
Packing Company
i
$15,000,000
Sinking Fund Bonds, Series C,.. %
Due
May 1,1967
Cudahy Packing Company, a Maine corporation (herein called
"Company"), hereby invites bids for the purchase of 315,000,000
principal amount of its First Mortgage Sinking Fund Bonds, Series
C,
due May 1, 1967. Bids will be received by the Company at
its office, 221 North La Salle Street, Chicago 1, Illinois, up to 11:00
A.M., Chicago Daylight Saving Time, May 5, 1947 (or' such later
time on the same or a later date as may be fixed by the Company, as
provided in the Statement of Terms and Conditions Relating to Bids).
Copies of the Prospectus relating to said Bonds, of the Statement of
Terms and Conditions Relating to Bids (in which the Purchase
Contract provisions are contained, and to which the Form of Bid is
attached) and of other relevant documents referred to in the State¬
ment of Terms and Conditions Relating to Bids may be examined,
and copies of certain of such documents may be obtained, at said
office of the Company. Bids will be considered only from bidders who
have received copies of the Prospectus, and the Company will not be
required to consider any bid unless made upon the Form of Bid and
The
the
i i
»
L
,,
,,
\\
1
of Terms
andj|Jondition»
Relating to Bids (to which this invitation is subject in aftrespects),
including the filing of questionnaires at or before the time JPquired by
otherwise in accordance with the Statement
M"
the Statement of Terms and Conditions
I
Relating to Bids.*
THE CUDAHY PACKING
Ii
By F. W. Hoffman
April 24, 1947.
Hi
1
• -
-
made
search, but the unknown still far
the known, and it would
be only fitting and proper to en¬
courage those individuals who are
inclined to contribute to, scientific
foundations an amoymtY greatef
the
as
of incotne now
15%
President
a
alk
deduction
of the Treasury
April 28 that the
Secretary
announced
on
tenders for
$1,100,000,000 or there¬
about of 91-day Treasury bills to
be dated May 1 and to mature
July 31, which were offered on
April 25 were opened at the Fed¬
eral Reserve banks on April 28.
Total applied for
T 01
1
a
accepted
entered
$20,380,000
(includes
fixed
$1,960,002,000.
$1,100,016,000
bass at
price
on
99.905 and
accepted in full).
Average price, 99.095 -f; equiv¬
alent rate of
discount approxi¬
will pro¬
mately 0.376% per annum.
*
duce 8V2 billion dollars under an
Range of accepted competitive
assumed national income of 165
bids: ''
Y:',:Y
,*\ '
billion.
" lY/,. Y».„ YY'
High, 99.907, equivalent rate of
As I have already pointed out,
approximately
0.368%
excises do not vary in yield so discount
receipts
miscellaneous
much
do income taxes as a re¬
as
per annum.
Y; .*;
-
YYY
•
changes in. economic coin
Low, 99.905, equivalent rate of
ditions. Therefore, in the interest discount
approximately
0.376%
sult of
revenue, it would
desirable but neces¬
sary
to continue excises some¬
where near their present level.
of
stability of
seem
not only
per
annum.
; ;
(55% of the amount bid for at
the low price was accepted.)
There
was
of
maturity
a
sim¬
within our ilar issue of bills on April 24 in
will doubtless be the amount of
$1,311,650,000.
in order from time to time.
I be¬
puting taxable income for contri¬
lieve that relying upon this form
butions toward research work in
of revenue for one-third of our
Payment by U. S. for
the field of science. Some people
revenue is wholesome and bene¬
Swiss War Damages
may challenge this proposal on
ficial to our economy.
the ground that, after all, the tax¬
The United States has paid $4,payer would be giving away the
Need for a Strong and Vigorous
070,183 to Swiss citizens on war¬
government's money, but I should
National Economy
time bomb damage claims, but the
like to make two observations. In
Let me emphasize once again
final total bill may run to $10,the first place, taxpayers cannot
that this program presupposes a 000,000 said Associated Press ad¬
well afford to pay out contribu¬
strong
and
vigorous
national vices from Washington, April 21>
tions in excess of the 15% limita¬
economy, with incentives to en¬
appearing
in
the
New
York
suggest that an additional 5% be
allowed as a deduction in com¬
I
tion and also pay
to the govern¬
Minor
readjustments
excise program
increased productivity.
production and
national
income
can
be main¬
tained at a high level, the tax
lieve there is little, question that
burden will be wellnigh intoler¬
scientific research, which we all
able.
•
*
*
>
;
high rate of taxation upon
the irichme used for such contri¬
butions. In the second place, I be¬
ment
a
concede is
more
a.
national
Unless
•
be far
conducted by
necessity,
effectively
courage
.
can
of
Bureau
Internal
Revenue
privately
endowed
foundations
Entitled to Support
than by Federal Bureaus financed
~^The revenue collecting
prob¬
through taxation.. . • - •
^With regard to the tax which lems in the future are going to be
one of the major concerns of our
individuals
dividends re¬
ceived from corporations, I do not
believe that it has been possible
to determine how much of the in¬
come tax on corporations has been
pay
on
reflected in lower
dividends to stockholders and how
absorbed
much
and
fyas been passed on to cus¬
in
the form
of higher
prices. Unless it can be clearly
shown that shareholders actually
absorb the corporate income tax
as
well
as
their individual tax
upon dividends, I am not ready to
concede thM the individual should
receive full credit for corporate
taxes applicable to his dividends.
tomers
COMPANY
•
have
for chari¬
table, educational, scientific, and
similar institutions. Accordingly,
for
First Mortgage
We
surpasses
than
Invitation for Bids
to the advance¬
sums
science.
great progress in fundamental re¬
lowed
The Cudahy
contribute
to
means
considerable
ment
pends.
pay.
higher
financial
Bill Offering
The
we as citizens
and business leaders owe a duty
of wholehearted support to the
Bureau of Internal Revenue in its
government,
and
towards uniform assess¬
and collection of taxes.
Its
Trbiune"
"Herald
The
Department re¬
of this obli¬
State
minded
Congress
gation
today,
recommending
a law to permit final
passagerf
settl^jffents for damage acei-
Ydentally
done
Y
in
said
statement filed
a
,
commendable work.
Simplification of Tax; Laws
Much
has
been said
many
about the
tax-laws;
complaints have been made
simplification ' of
about the
our
complexity of the laws
witj
occurred ii
April, 1944, when United State
planes bombed the Rhine Riveir
the
House
of
town
Clerk,
Schaffhausen
Samaden
do
j
^
Departmei
State
the
age,
ment
to
American
The first acknowledged damn
take. An attack
tinue
by
flyers to Swiss property.
attempt
problems are our problems. With
our support I believe we can be
assured that the Bureau will con¬
further
which
reported:
after.
soon
*
United
The
on
was
by
mis¬
the town
oif
acknowledged
"J •
States
already
has
pai<p-$4,013,668 in damages
for
the
Schaffhausen
raid
in
which
.were
thirty-seven personp
killed and about fifty in-
-jured. *,The other
-so
far
went
for
$.56,515 paid
arising
claims
from the Samaden incident.
Volume 165
-Number 4590
(2355)'
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the Public
-zV,
'we
v
•
>:
ha^(e j ust, made
our
Annual
lights of the 1946 operations
we
-
Report - to
toi our
employees and
barrels of crude oil and
completed 173
new
sold
oil
V
and
.M.'VV
V"-Vr
.*■*
.
4>.5
-
oh
of
oil
lands
gas
lSO.OOO
which
now
*
leases
acres
J
1:
-
r,
-
the
in
.
of
served
peak
1945, and»
554,902 domes¬
tic and industrial
r
cu-
higher
cent
per
year
•-
acres ate
producing.
276,000,000,000
than the
previous
V-7-
United'States alone, of
iwiMsMM
r
held
4,000,000
'
;j s
'i*.
they
Companies
.
i'
•
bic feet of natural gas,
i
wells. At the year
end,
:.* v
higli-
customers
produced 26.318.00,0
Cities Service
r.
0 u £ -300,000j &f ockhol de r-o wnorsv 'The
believe will be of interest
tdmers. '*
-
•
cus-
'
'
.
,
.
refined 57,613,000 bar<:■.
jjS*
distributed
rels of crude, produced
27,974,000
barrels
gasolene,
an
increase of
865,000
; over
000
Production
of
electricity." Electric
also
was
up,
pipeline,
10 per cent, and
increased
classes
buta-
J
power
finished
"by
construction
new
and
.'Vi,.
acquisitions, bring-,
ing the total
of
years
war
to
petroleum
than
hulf of it gasolene, also
148,000,000 gallons of
natural gasolene artd
various liquid hydro¬
carbons and 3,000.000
gallon* of finished
chemicals. Cities Serv¬
$33,000,000
and
,
for
16
|
depression,
J
reconversion
$459,000,000.
ice
are
and
new
the
to
ones
retired.
K: 'U;'/!
-Lr'.v;-.
T
2
5
9
It
16
more
aviation
Five
added
•94S
gallons, of
for
were
four old
marketed 2,500.000.000
expended
tanker.
crude
products
"Cities Service fleet, and
i
'•
products,
7,844^- "
barrels: of
-ships
in¬
'
-
increase of
and
be¬
consuming
an
000
power,
declined
dustries. '7
creased 44 per cent.
all
of shutdowns in
cause
and
"asphalt output in¬
in
-
except
which
dicne for synthetic rub-
her
ransported 159,000.000
barrels of crude oil by
sales
1945."
of
t
2,277,814,-
kilowatt hours of
■17
4
5
6
8
7
brought
,15
|I4
reduction
consolidated
22
D»
debt,
29
-SjKi-.
notes
preferred
of
funded
payable and
stocks
out¬
standing in iKe hands
of the pubfic to
total
year
products
of
a
16-
$211,-
600,000.
used
by 4 airlines
by 37 airports in
11 states.
Because
to
of these
strikes
1946
as
assets
cash
on
a
up
consolidated basis
from $149,528,000
and
government
to
was
the
to
securities
net
current
$175,563,000
increased
and
from
source
their
We appreciate
to
|
|
stantly
on
<
and
ucts,
l:
1
well-being
rec-
The
our
400
of
a
billion
con¬
improve the quality of prod¬
use
so
that the
customer
growing acceptance by the public of
products
;
W. Alton
Jones, president
■
to
to service their
H
if)*: *;
third
this confidence and shall continue
the alert
..."
1
M
a
products and services during
the policy of the founders—to be
carry on
!
»
our
the year 1946.
I':;
(
purchased
will obtain better and better values from them.
employees and dealers
of
who
customers,
dollars' worth of
$27,253,000 in
$175,614,000.
The management,
ognize
many
against $15,060,544 in 1945;
$144,208,000
,
the Company is able
interruptions caused by
shortages in other industries, its net
and
income
operations,
that despite
report
f
W*' "
V'
4
*
.
'
attests the soundness of
our
this-policy.
-
,'f
1
,.
with Surplus Food Allotments
Abundant Farm Production
"-■'••'J
-1
for market—enough more food to
■
1
~
'
•
and
acreages
are supported
in
(Continued from page 9)
general by our actual experience.
measurable wants of the people
Judging what the whole popula¬
in
this
country — what
people tion wants
by the actual food buy¬
really want to buy,
ing habits of persons in the upper
We can judge this from the ac¬ 40% of our prewar income groups,
tual buying habits of people who our people would like/to be able
liave comparatively good incomes. to buy a third more food than they
What would you call the lower had on the average in the five
limit of a reasonably good family prewar years 1935-39.
Last year
income? Under 1941 prices, would our food consumption level was
$2,000 per family be too much? already 16% above prewar. So,
That's less than $40 a week per as a result of increased consumer
family.
But back in 1941, the income and increased farm pro¬
families that had incomes of that duction we have gone about half
much or more were approximately way
toward
supplying people's
the top 40%.
At least, most of wants that were not being satis¬
the families with prewar incomes fied in the prewar years. We are
Thursday, May 1, 1947
FINANCIAL CHRONICLE
THE COMMERCIAL &
(2356)'
28
assumed.
4-
would
it
But
.
support
give 50 million additional people
a
prewar diet every year— new
records year after year in spite
of a scarcity of production sup¬
plies and equipment and a 10%
reduction in farm workers—a rev¬
diet,
commercial
only about 140 to 150 million peo¬
accomplished by putting
machinery and scientific knowl¬
olution
edge to increased use.
Discount
the revolutionary change by giv¬
ing weather all the credit possible;
still have a revolutionary
change. Nobody expects farmers
and you
about two acres
the
person
a
to pro¬
down.
surpluses ,jf we^have the means
to eat what we really want.
Livestock
itme
we
farming is in itself a
good farm program.
proved
We
and
need
our
I believe it is
would buy more products
from cotton, tobacco and
wool, although we do not have
■the
precise measure for these
products that compare with those
I have just given for food,
*.ihey
made
•
these wants
Now let's see what
i
terms of farm
in
mean
acreages
farming—what kind
agricultural pattern we need.
sand types of
of
up the wants of our
people, add in conservative
\ Total
own
^amounts for exports, imports, and
Industrial
for
allow
uses,
good
picture: We
■yields, and here's the
than 420 million
orchards, rotation
pasture and fallow land. That is
almost exactly what our produc¬
would need more
acres
ginning to see the possibilities.
and
lower per
„
third more.
also
more
long-time trend toward
capita use of potatoes.
safe to assume that
gradual,
a
for crops,
goals call for this year. It's
ten million acres higher
than the comparable figure for
tion
around
indicated a drop to 360, we
year
Our estimate of needed acreage
■of
allows
for average
and a continuing trend
course
weather
.
^
"be
;
:
:
efficient production.
livestock
on
farming.
;
This
the
they wanted
food
foods.
What
are
we
witnessing today
No
who studies our economy
one
today can doubt that agriculture
is not merely benefiting from na¬
tional
prosperity
sonable
needs of
our
own
people
an
economy
Livestock
beef and
resources.
of full em-
If that isn't a
something
more
*
timber
per
year.
We
are
growing it at only about half
1
.
Neither the field crop nor
I 'forest crop acreage
I
►
,
,
,
;
5.
.
now
that
rate.
f
have
given
you
the
estimates that
assume
tical
] unnecessary trade barriers and
i improve the outlook. The current
course.
Not only is the practical course
clear—I believe there is no other.
why I believe
Let me tell you
that.
any
greater exports than we have a
!right to expect in the short run.
In fact, the export assumptions
;may be too conservative. A good
; International trade program over
«* period of years should remove
There
three
are
reasons.
The
first is found in the wartime revo¬
lution in
a
agriculturaFproduction—
revolution from which there is
no
turning
land
and
The' second is
requirements of our
back.
found in the
water
resources.
third is found in the world
tion.
Let
us
The
situa¬
take up these reasons
Sl^^estimates do not take into account
briefly one by one.
f «ny change in the export picture
The revolution in- agriculture
II that might result from our deci¬
sion to give material assistance to production is still progressing. I'm
sure you know the
story well—
weak democracies.
\ Our
calculations on crop needs
sus¬
if
and
pro¬
long-drawn-out
have
But
to
change
do
we
conserve
our
choose
our
to
resources
must in order to survive
we
■then
have
we
alternative but
no
live with it.
We
of our streams, to
in
are
strange fix, aren't
a
we?
It
must
sound
countries
we
a
one-third increase in production
and
of
tern
production
emphasizing
soil-conserving practices and live¬
enterprises, we could pro¬
duce in abundance and bring the
soil budget .into balance.
Even¬
tually, by adapting our land to
stock
in
poor
paradoxical to
resources that
must
future
production involving
protecting it prop¬
erly, we can hnve close to 450
million acres suitable for continu¬
dairy cattle and sheeD is
its best use and
as cropland.
testifying on the
My
we
ture
In
1947
the
increase
use
of
up
the equivalent of 35 pounds
a day, just by enjoying
corn
three
good meals.
He stated that
pounds of grain per person a
day would require annual grain
ten
totaling between nine and
billion bushels compared with
present production of about
crops
ten
our
annual
believing
a policy
abundance
the
and
atomic
the
is
na¬
The
it have
age.
place in
changed.
No
longer
is
peace
merely an objective. It is neces¬
sity itself—the only hope of civil¬
De¬
acreage
for
reason
alternative to
no
of
world
use
ous
third
have
of realistic
directly based on pasture.
Hog
partment of Agriculture appropri¬
production also makes heavy use ation bill before the Agricultural
of pasture.
And pasture is the Sub-committee of the House ap¬
most conserving use of land.
As
propriations Committee, I reported
you improve agricultural resources at some
length on the state of the
in a system of livestock farming,
nation's agriculture, including our
you not only increase productive soil resources.
Inasmuch as that
capacity but also provide a good
estimony is or will be available
use for land that might otherwise
o
you, I will not repeat it here.
grow surpluses. Let me give you
a
few figures that indicate the
Our Agricultural Resources
importance of that point.
We
However, I would like to give
know, for example, that it takes
you a few summarizing facts about
about seven times as much grain
our agricultural resources.
to supply a person a diet of live¬
We have farther to go now than
stock products as to supply him
before the war toward establish-.,
a grain diet.
H. E. Babcock, the
ing a permanent agriculture. In
New York State agricultural au¬
the Corn Belt alone, farmers al¬
thority, recently pointed out that tered their regular rotations to
the 40-ounce human stomach can
business-like.
pployment we will need to cut 65 Neither f^&ners nor city people
J to 72 billion board feet of" sjjiw can afford wyaccept a less prac¬
'
nor are
to accept abundance and learn to
against future
shortages of forest products and
depletion of forest range land, to
prevent
the impoverishment of
people who depend on the forests
productivity.
practical objective
toward which we ought to build
f-ests. The Forest Service estimates our programs, I'd like to be shown
in
conservation
soil
to
incomes, they buy more food and
they also buy the more expensive
and reasonably expected export
mean more land in pasture
hay, less in small grains and -and industrial markets, we can
potatoes and beans,
not much not only market as much agricul¬
•change in feed grain acreage. tural production as we have now
There would be less land in soy- but can actually expand. We can
beans than we had last year but do it profitably and with progres¬
sive improvement of our natural
more in truck crops, more in cot¬
that
as
ourselves
protect
The second reason we have no
get better
would
ton, and more in orchards.
Forest products are crops too,
«nd a third of our land is in for-
s
,
the watersheds
the practical alternative to a policy
ate of organized plenty is that when
more than 100 eggs apiece, on the
we
produce
what our people
average, during that quarter.
really want we will emphasize
When people who haven't had
livestock farming, which is an aid
«nd
,
build
plain,
We
course.
attention to our forests to protect
eggs
but is greatly
The 420 million acres we would contributing to this prosperity.
This is a case study in the inter¬
need to meet our own personal
wants, plus peacetime exports and dependence of our various eco¬
industrial uses, would be divided nomic groups.
What our studies and experi¬
np quite a bit differently from
prewar and even from last year's ence boil down to is one simple
mse of the land.
Emphasis would fact: By supplying only the rea¬
toward more
im¬
use—forestry.
at a record rate in
first quarter of the year. We
ate
for the 1937-41 aver¬
age.
It's the continuing acreage is a demonstration not only of
agriculture's ability to meet the
"we would need if people of rea¬
sonable income could buy what people's wants but also of the
economic .importance of doing so.
1iiey have shown they want.
last j-ear or
<
to
need
is
suicide.
cropland to its best
II we give enough
poorer
used,
never
using, systems of soil and
^earch for ways to use
showed they wanted
Wants No Limit on Production
our abundance in order to provide
more
meat—I think
In the face of this outlook, it —and we must do these things if abundance for the future. And yet
even
the livestock industry has
we are to exist for long as a peo¬
that is our true situation.
Our
been surprised at the size of the evidently would be impossible to
demand. ; IA 1944 we ate about limit total production over a pe¬ ple—then by these very actions experience has shown us that the
shortest road to national destruc¬
riod of years without resorting to we create abundance.
23 pounds more meat per capita
Of
course,
all this can't be tion—the quickest way to become
than in prewar years, and this complete dictatorship or impovershment of producers and the land. worked out immediately or with a have-not nation—is the route
year we may make the difference
the thirties, surplus control automatic precision. For example, we follow when consumption goes
25 to 30 pounds—at least a fifth _n
to produce what people want, af¬
down, surpluses pile up, and pro¬
more than prewar.
As for eggs, measures brought shifts in type of
ter the world food emergency sub¬
ducers must neglect and drain the
many people assumed that war¬ production, but total output stayed
Acreage reduction brought sides, we would have to use about natural resources in order to live.
time production was far beyond up.
300 million acres for intertilled It is not
through using our agri¬
any
conceivable peacetime de¬ increased yields. Less of one* crop
more
of another.
Only and close-growing crops. Of that cultural resources that we impov¬
mand.
When' we compared our meant
amount about 180 million acres erish ourselves but through mis¬
per
capita consumption of 392 drought could substantially change
total production. It seems to be was subject to some erosion dam¬ using them. I doubt that any other
eggs in 1945 with the prewar av¬
a
natural law of agriculture—at age, according to estimates of. land nation has ever had such an op¬
erage of 298, much of the differ¬
use for 1946.
Only about 120 mil- portunity as we have
ence
was
ascribed to the meat least of United States agriculture
today—to
production persists and don acres could be' used without use resources without misusing
shortage. But last year, we ate —that
seeks new high levels. Our only some damage, pending the adop
about 380 eggs per capita* even
them, and by producing an ade¬
tion of considerably better man¬
quate supply of what the people
though we had 15% more meat choice is to create a pattern of
agement systems and practices. want to assure plentiful resources
than before the war. And although production through which to use
Gradually, however, under a pat¬ for the future.
estimates at the beginning of this our resources wisely.
They
tables, arourrd 17 pounds rnoue
processed vegetables, an additional
50 pounds of citrus fruit, and over
60 pounds more of other fruits.
They apparently want a little less
of beans and would continue the
>
fourth to
we
reasons,
have
we
now
This
products,
forest
more
at the same time, for conser¬
the management of present
forested areas and devote more of
.
a
continue to waste
we
permanent, high-level
ductivity in this nation.'
prove
,
—from
And
tain
can
you
vation
.
200 pounds apiece more milk,
about 9 pounds more chicken, 23
or
24 pounds more fresh vege¬
of what
forest management that will
apply the same
general idea to oyr forest -crops.
But
,
over
our
been
it
show unmistakable signs of doing
opposite. They are buying im¬
equipment and. as much
more of it as they can get. Nobody
of $2,000 or more could afford a doing
it during a world food
generally adequate diet. So let's emergency which has necessitated expects farmers to stop using the
assume
their buying represents great exports of grain and some crops and practices that produce
more
per acre at less cost per
what the people of the United other commodities.
We are getting some surprises unit. Nobody expects the research
; States want, and apply their buy¬
man and the engineer to reach the
ing habits to the whole popula- as we go along. For example, as
Hon.
This indicates that people consumers earned more money limit of new discoveries and new
of knowledge.
Far
want about 40 pounds more meat and as dairymen stepped up milk applications
per capita than they were getting production, people began drinking from seeing the limit of our pro¬
between 1937 and 1941; they want much more milk than ever before ductive efficiency, we are just be¬
has
takes three acres large iamounts through unsound
or more per person to supply the
cutting practices and preventable
food for a liberal diet. It takes no 'osses by fire, insects, and disease.
imagination to see the possibility
War undoubtedly took a toll of
of eliminating the old problem of our resources. But even in
peacewhile
to discard their machinery—they
the
land
remains is old-growth saw timber.
Both volume and quality are going
low-income
for a
food
About 16% of
forest
denuded, and only 10%
ple on a liberal diet. At average
yields, it takes the product of only
duce
i
by about 50%.
of
ized
human
looks
can
to
survival.
for
us
this
see
cluding
in
our
the
in
over
many
by
citizens.
dur
of
some
We
democratic
a
in¬
interest
by this Con¬
in world conceal
statements
toward
You
made
even
individual
world
ways,
world-wide
decisions
gress and
The
leadership.
can
lead
world
of
abundance, or we can lead toward
regimented world of scarcity. In
only one of these directions lies
a
he hope of peace and freedom.!
I have gone into some detail
to show
why I believe that
icy
abudance
of
and
a pol¬
immensely
is
that
practical
doing so, I
have given some indications of
the third point I originally said I
practical
alternative
would
exists.
cover—the
no
In
matter
of pro¬
that are needed.
Obviously, a well-rounded farm
program will be-=essential to set
up and maintain the required agri¬
grams
-
such as copi and soy¬
11 million acres—mostly
tilled crops
beans by
at
thei^pense of good sod and
pasture.^^^eat
the
in
Great
growei's, mainly
- increased
Plains,
62 million
million—mostly at
of grass and fallow.
their .crop acreage from
nearly
to
the
six billion.
72
expense
cultural pattern. The policy I am
proposing is one that is vastly dif¬
ficult to put into effect. No coun¬
try has
ever
country
has
done it.
ever
I think no
seriously at¬
suffered tempted it as national policy;
Preliminary results of a current under increased numbers of cattle perhaps thaHjis why it has never
been achieved. Even to point out
study in the Department of Agri¬ and greater crop acreages.
culture show that of the cropland
the facts is to run the risk of being
Fcr the country as a whole, it
used to produce the civilian diet
misunderstood.
I want to say to
is estimated that at least half the
in the war years
1943 through
you now that I have Purveyed the
acreage needed this year for in¬
1945, about 80%.was used in the tertilled and close-growing crops picture from the standpoint of my
whole experience.
production of livestock products; is subject to erosion.
not more than 20% of the land
As a former relief administrator,
Although during the war far¬
that produced civilian food was
I want never again to
see
the
devoted to crops for direct human mers increased their use of lime
and phosphate and their use of misery we had in the great de¬
consumption. The same study in¬
As a former Congress¬
various practices such as contour pression.
dicates that With present yields
man and as Secretary of Agricul¬
farming, strip cropping, and turn¬
we would not have enough crop¬
ture, I see the importance of the
land to support our present popu¬ ing under green manure, the soil
policy of plenty to the general
lation if all of us ate the same requirements still call for double,
As a business man and
five times and even greater in¬ welfare.
high-grade diet that our high-in¬
farm
operator, I see the plain
come families eat.
Our cropland creases in use of these materials
Parts of the range have
^
with
present yields will
support
about 190 million people on a lowcost diet
pending
or
on
an
average diet,
de¬
the amount of imports
and
In
practices.
our
forests, we have speeded
the rate of cutting until the
drain exceeds the rate of growth
up
facts of supply and demand. Peo¬
ple want
can
more of what the farmers
produce—there we have the
(Continued
on page
33)
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THE COMMERCIAL & FINANCIAL
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Abundant Farm Production with
(Continued from
making
of
a
great
farmers
as
a
result
productive
market.
about
lems by
28)
page
market.
of
The
increasing
must have that
power
There's nothing visionary
policy aimed at getting
the product and the market to¬
gether. It's just good business for
a
all of us.
This idea is not
is
something
ture is healthier and
every
dream.
a
opportunity, for
tive in
We
ability to back
what used to be
up
have
it:
about
new
have facts and
now
But there
new.
We
agricul¬
our
produc¬
than ever be¬
way
more
fore. And demand for food is very
high
relation
in
start
we
fight
order
the
get
chance
Furthermore, we
urgent necessity.
Now
sights
the
is
to
out of the hole in
way
to
If
past.
don't have
we
now,
our
the
to
try.
faced with
are
to
time
to
expanding both markets
production.
Prices are and
and
should
be
Programs can be built around
that objective and the people will
costs
of
production.
to
if farmers are to go on cut¬
ting costs and increasing produc¬
they must be assured of an
adequate market; they must have
assurance that prices of industrial
goods will not be held up through
monopolistic practices; and
the
people who are no longer needed
in farming must be assured
of
adequate employment opportuni¬
ever,
ties in the non-farm field.
third
broad
quirement is
to
gram
and
make
views
my
is
understanding that
my
expect
detail
at
testify
to
me
later
you
them in
on
date.
Also, the
Policy and Program Committee of
the Department, which has worked
out the forward-looking pattern
of agriculture I have been dis¬
cussing with you, has assigned
a
this: We
still
are
culture;
for
the
of
use
further
along,
details
will
and
be
these
are
the
of course
available
to
you
during the
we
don't have
outcome of studies
However,
await
the
the
see
broad
to
The
and
cannot
fruits
of
all,
we
devel-
opements in other segments of the
economy
level of
to
the end
and
income
that
a
high
employment
maintained.
is
Agriculture
can
help maintain those conditions—it
supplies a large share of both the
raw
materials and the market for
industry.
Our agricultural policy
is necessarily related to the
policy
expressed in the Employment Act
of 1946, which states that it is
the
continuing
policy
and
sponsibility of the Federal Gov¬
to
promote maximum
employment, production, and pur¬
chasing power.
to
Second, we shall need programs
help maintain stability of prices
levels
at
and
fair
both
to
producers
Anything
consumers.
less
leads to waste and to general eco¬
conditions
nomic
abundance.
perience
We
which
know
penalize
from
ex¬
the business cycle
and downs, even in
periods of general prosperity, and
that farm prices are very sensi¬
has
its
that
ups
tive to them.
effective
need
or
abnormal
during the market
declines
and
season
to
generally cushion declines in farm
prices and incomes in the event
of business recessions.
make
We should
however, that we do
not establish
a
rigid , system of
price relationships. We will *do
well to heed the warning of the
House Special Committee on Post¬
war Economic
Policy and Plan¬
ning. It spoke of the danger of
pricing our commodities out of
the
sure,
markets;
long-run
ture
are
it
said
the
needed
adjustments in agricul¬
"not necessarily accom¬
plished by present price support
programs
together
of production
farm
chance to enjoy the
a
but
that
experience
something
indi¬
more
is
Public
services
slow
and
getting
to
population
facilities
rural
is
areas
scat¬
more
than in cities.
families
proportion
of
have
greater
a
people
young
and
with
systems
quotas"; it spoke of
the need to meet producers'
prob¬
for
half
a
too poor to
group—include
are
good
management.
million share crop¬
a
pers and half
million migratory
farm laborers represent one of the
most serious social problems in
the nation, for they are
stabilization of supplies.
most
fed
poorly housed,
of
land
all
abuse
and
We
clinics
to
medical
than
do
population.
parity
in
either.
Rural
services.
in
cities
leasing
which
The
people
nation's
tenure, from
customs
and
farms
are
the
agricultural
re¬
on
greatest
We
of
equal opportunity
Applying
My
class
of
needed
Our
men¬
Food
tion even though such
programs
clearly must underlie all of our
efforts.
We
in
the
need
we
need
intensified
tribution,
dis¬
need
in
economics;
statistics
and
grams to
new
extension
apply
knowledge if
tinue
to
our resources.
ket,
the
people who
transport,
process,
By
accepted
thirds
the
of
are
more
ill-housed.
standards,
farm
They
two-
families
are
parity in
telephone, radio and electric serv¬
ice, in roads and fire protection.
They pay, directly and indirectly,
for
social
lack
securty
wlich
benefts
denied them.
are
'
Althugh
for
many
farm
years
employment has been going' down
production - per - worker
in¬
as
creased,
the farms have had to
unemployed
industrial
in times of depression.
And many who leave the farm to
find opportunity have to go to big
absorb
workers
centers
not
are
enough
in rural areas.
there
because
tant
fact
young
have
the
there.
men
die
as
a
national
men
every
trial products. In order to
sell, we
need to provide for increased im¬
faster rate than older
jobs—both
full-time
to
provide
and
time—but also to provide
part-
new op¬
portunities for local capital, new
better local services, and more
or
profitable
outlets
for
are
ing
areas
are
hungiJJ
is wasted.
gram is a
tion.
a
it
should
chronic
and
U.
changes
to indi¬
con¬
difficult
of
of
more
shifting
production,
allotments and marketing
acreage
Some farm¬
overcrowded;
some
U.
interest
industrial
in
S.
ex¬
of
products
be¬
who
sure
that farm
farming, and farm housing.
We
quota programs should be avail¬
able. And there have to be cush¬
courage
ions
use
to
absorb
the
year-to-year
in yield and demand!—
.
of
should
continue
Electric
and farm
come
unmanageable.
These
programs—my
to
en¬
living
helps
it
has
all
get very little use, but they've
got to be there when you need
them. We should have
that
gram
would
a
farm pro¬
effectuate
our
policy in times when the free play
of economic forces gives us
pros¬
perity and also when the busi¬
ness cycle turns downward.
Cost
of Program
The cost of such
would vary
placed
a
it.
upon
Needless
farm program
a
according to the load
to
it would cost
hit. periods of
say,
great deal if
we
activity in industry.
Over
long pull, industrial activity
the
peaks and valleys of the business
chart can do much to stabilize and
stimulate industry,
•
In any
the
event,
we
alternative
to
abundance.
cannot afford
" agricultural
;j,;
had
produced, the people of this coun¬
try paid for the production con¬
trols
the
that
were necessary at that
When real jobs didn't
exist,
country paid for relief. When
prices were unfairly low,
the
farmer paid the cost of sub¬
sidizing the consumer, and then
length the people began to foot
the bill for parity payments to
farmers—nearly $200 million a
year for six years—and for other
commodity payments totaling $3.8
billion.
For programs to expand
domestic consumption, the people
have spent $1.4 billion. They put
out $5 billion in commodity loans
and only by reason of the war
have they been able to get it all
back.
The people have paid for
export subsidies—a total of nearly
$200 million. They have paid a
at
a
serving neglected
payments
total
counting
Altogether,
farm
$1.5
billion,
not
programs
of technical
and demonstration.
assistance
farmers
soil—payments
direct
from
1933
than
more
payments to
through 1941
one-eighth to
operators' net income. In
payments added nearly
two years
one-fifth
the net income farm
to
operators otherwise had.
We
the
people
have
paid
in
money and in soil fertility.
We always pay. for abundance.
It's high time we started getting
what
we
the
That is why I
adopt
organized, sustained,
for.
pay
appeal to
the Congress to
goal of
and realistic abundance as our na¬
tional
agricultural
policy.
It
is
plain that the people want more
and better food and more of other
commodities
than
we
have
ever
produced. It is just as plain that
by continuing our advance to¬
ward a sound, permanent agricul¬
we
can
supply
what is
make needed for better living, expand1ing -industry, and healthy world
profitable
more
more
to
trade.
satisfactory,
and its extension to new areas
seventh
when
Some of the keys
.
power
farming easier and
be¬
should
typewriter;
a
sound development and
cooperatives by farmers.
ture,
before
they spread- out and
useful
most
the keys on it.
added
operatives have ample credit, on
suitable terms, to finance farm
ownership, production and mar¬
keting
of
commodities,
forest
growth and development, soil con¬
servation, shifts in land use, major
changes in types and methods of
produc¬
problems
However,
an
We have to make
cate specific needs for production.
case
have
and forest operators and their co¬
pro¬
In
farms.
these make jobs for work¬
use
what the farmers
of
tion
should
Coming back to domestic af¬
fairs, there are still some essential
farm programs that I have not
mentioned .directly.
We might
label this group "farm business
aids and safeguards."
from
cert to shift the pattern of
we
produce.
By the very nature
of agriculture it is impossible to
hit production goals
exactly, and
help farmers to cut in
earlier,
cause
demand.
use
of
use
ports
Related to this type of program
on the farm
front to stabilize
These
S.
acute
is the need for action
in
it's
like
for this purpose other than those
I have mentioned as commodity
farmers
all
difficulties.
year to year and to meet
A farm program
something
little toward rebuilding and con¬
ers
supplies
the
own
times—something flexible enough
both
be
people are able to get as
much as they want and need from
everybody has a chance at
an
adequate diet. We need to have
a surplus distribution
program or
perhaps some sort of food allot¬
meet
all times.
have little difficulty in exporting
as
much as necessary when our
it that
to
limit
to
As I indicated
products that are tempo¬
rarily too abundant, and to see to
at
barriers, but
possible through
be
out cutthroat competition, and to
provide for the handling of excess
supplies.
is
absorb
available
of
collabora¬
barriers, to divide markets
among competing countries with¬
peaks in
supply and valleys in demand, to
program
principle
trade
needed to counteract the
ment
the
contrary to
policy.
Our
domestic
price policy precludes the
agreements
production
more
commodity agreements
preserve
removal of all trade
school lunch pro¬
good start in this direc¬
something
clearing
without running
farm
The
But
a-world
international, economic
con¬
no
provide
which
products.
We
that none of us
and that
to
house for
farm
sure
men¬
farm
and
domestic
floor under
All of the programs I have
time.
blotters" to absorb little surpluses
confronted with serious
tenure problems too.
make
locally- variations
grown farm products.
We
of
re¬
tioned—and perhaps more besides
—should be available for use at
ganization to reduce trade barriers
pro¬
duction goals now in
retire. Rural industries
only
sumption
the
lief programs.
ports without injuring established
domestic enterprise. We need the
benefits of an international or¬
tion
type of
reduces
loan and
The
people
always
pay
for
difficulty maintain¬ abundance.
In
the
depression
ing dollar exchange with which to when
people could not buy any¬
buy both agricultural and indus¬ where near all the farmers
Consumption
sixth
it
tinue to have
sell
coming
are
a
not
We need
gram.
go
a
cer¬
tain fruits and vegetables. Poten¬
tial foreign customers will con¬
of
remain
to
will
or
needed
need
we
must
Under
will
we
wheat, tobacco, lard, rice, and
course it is impossible to pre¬
dict demand exactly. There have
to be guideposts such as the
farms
on
opportunity
Young
along at
men
are
because,
impor¬
an
only three out of
average,
five
industries
small
This is
So
facilities
teachers
Floor
(
,
inevitable that
seems
continue
to
need
regular
and
sizable foreign markets for
cotton,
farm products do not control the
whole economic system,
any more
than farmers do.
Bottlenecks do
A
And
low
It
mar¬
and
of the World Bank and the
trade.
traditions and ideals
But
the
tax-paying ability of
fafmer.
need for
emergency
com¬
in
great
^abilizing the purchasing
and
power
the
standpoint of the general
crop insurance has
garded
system
clear of
bottlenecks, capable of
carrying the entire flow of farm
production.
That is in keeping
our
welfare,
value in
gram
effort should be made to
keep the
free enterprise distribution
with
participate
great de**
that of agri¬
as part of our farm pro¬ culture.
But an agricultural pro¬
line-up. Let me say a special gram designed to maintain stable
word about our need for
foreign supplies and prices across the
con¬
in
Marketing Act of 1946
prime importance.
Every
trade.
We
in
are
Farm families and the commu¬
nities they live in need the
pro¬
tection of sound crop insurance.
members,
scarce
self-liquidating loans
cooperatives
must at least match
search and
of
its
to
mand.
portant aspects for United States
agriculture and ; should
be
re¬
Getting to work under the Re¬
is
of
supplies 'of
half the farm population
has the benefits of this
power,
and the REA
in the international field has im¬
production,
distribution, human nutrition, and
conservation of
We
Monetary Fund, and other United
Nations activities. All of this work
pro¬
more and
we are
advance
our
Nations.
its
modities.
spread and demonstrate
information. In short, we
need
United
consent,
work
statistical
we
the
world
we
studies;
share
tual
ogy, and in efforts to expand in¬
dustrial uses of farm products#We
research
of
Emergency Food Council, which
temporarily allocates through mu¬
in production technol¬
marketing and
country is a member of the
Agriculture Organiza¬
objective of world
freedom from hunger. We are a
member
of
the
International
and* service
in
"■
and
thus
biological soiences;
research
'
tion
re¬
programs
need
can
sons too.
Only
now
From the
in
trades
International trade and cooper¬
ation are essential for other rea¬
pro¬
This deserves special
search
food
.
Knowledge
includes the gathering and
application of scientific knowl¬
edge.
Programs
storage stocks and sales of excess
supplies to needy countries at spe¬
cial prices.
is restored.
Scientific
fifth
Marketing
get a further cushioning
effect through international trade
arrangements which provide for
source, and it is to the nation's
interest to see to it that the
right
relation
poorly paid; rural schols re generally less well provid d with
buildings, equipment and faculty.
*
cooperate to
move seasonal surpluses are also
helpful as cushions for fluctuaating supplies. ,
;
:
'
laws.
They do not have
educational
mar¬
.
Special marketing programs
see
exploitation that
results from insecure
antiquated
Special
clothed and
citizens.
our
results are waste of products and
human want.
for
city families.
haye greater
and
among the
But
need
do
they
means
ever-normal
loans
keting agreements which foster
orderly marketing.
These pro¬
grams are important for price and
income protection as well as for
a
they have far fewer doctors, fewer
nurses, fewer hospitals, and fewer
than
aged
This
the
storage
granary
develop, farm production fluctu¬
ates,
consumer
buying
power
changes from time to time.
The
the
to
develop a longrange system of commodity price
floors to protect producers against
excessive
unless
needed.
industrial
We
About
more
rights of farm people.
of realistic abundance
provement,
re¬
ernment
few farms
large
the
year.
be
Farm
agriculture geared to
our
as
of
tered
neeiL'txr'keep
perhaps
the policy.
Good prices
and income are the basis for im¬
Economy
First
million
group of programs
has to do with the wel¬
policy
are
the
call
year
420
fourth
need
we
where
Gearing Agriculture to
about
family;
a
need to learn and
to
requirements.
this
Improving Rural Areas
cates
also.
long way from
of cropland; and
acres
people have
of
they
good
add only
me
much as half of it will be subject
to erosion damage at some time
summarize
,when
a
goals
our
A
results
Let
permanent soil-conserving agri¬
fare
you
re¬
hope for
increasing abun¬
and
to study the pro¬
requirements for the pro¬
posed policy. I shall be glad to
the
conserve
we
agricultural
I have already said a
gram
for
re¬
Therein lies the
sources.
subcommittees
studies
program
sure
our
or
grams
over-all land pro¬
an
improve
sustained
a
the programs we need because
on
it
only outline
too
33
Suiplusr Food Allotments
too small
are
support
tion
dance.
shall
one
abundant
make
deal about this.
I
This is
produc¬
tion profitable to farmers. How¬
way
support them gladly because they
makes
produc¬
in
change. To this
end, the parity formula should be
modernized.
We should empha¬
size studies and programs to reduce
kmow in their hearts that the aims
are
right, that the policy
good sense.
of
tion and demand
our
the target of organized,
sustained, and realistic abundance.
on
means
the conditions of produc¬
as
The
train-
changes
encouraging
tion
effective
an
farms
(2361)
great
stimulant
to
is
Here is our
advance
the 'cause
prosperity
for
business. and the world.
our
opportunity to
of
peace
own
and
country
«(2362)
34
:^ Thufs<ky/MayTrl947
THE. COMMERCIAL & FINANCIAL CHRONICLE
/•
-
with any degree of assurance by
essentially *. dynamic.* They
Vvi foTlovcij even magnify revivals and
recessions- expansions and con¬
tractions/ peaks and troughs of
policy. .Which are the tools that
business cycles^ *
an investor has at his disposal to
;
The second approach—economic
assist him in his quest? *
analysis—also is an essential part
of the research basic to formulat+
Two Approaches to Stock-Price;
are
(Continued from first page) v
many candles shed such a soft and
:
4-
pleasant light on our table. " Ob*
a^rve the finely cut crystal prism
from which a delicately shaped
is . suspended.. This prism
the
light from • many
candles. The light itself is white.
Yet what color of the rainbow
does this piece of crystal seem to
reflect?" "Blue, of course," ex¬
claimed the Grand Duchess. Kry-
which
essentially highly com¬
are
plex.
uncertainty of our judg¬
tos to what/is likely to hap-r
The
ment
eVen in
pen,
relatively near fu¬
in the country's economic
sphere
ture,
receives
life is raised
the same question to all
those present. To each the light
reflected in the lovely crystal ap¬
lov put
peared to be of a different color.
I often think of this little tale.
to a still higher po-
attempt to appraise
probable course of the mar*
tenial
the
if we
kct.
■
,
',
;...
.
.
.•
present
conditions/ of
bond yields and of declining
Under
low
of; fixed in¬
few investors can -afford
purchasing
comes,
power
holdings to se¬
curities whose price fluctuations
can
be disregarded
with equa¬
to
their
confine
economic meet¬ nimity. Common Stocks, as a rule,
glance through the pages constitute large segments of repre¬
When I attend an
ing, or
Appraisal
a
Two main avenues of approach
open for appraising the levels
and
trends
of
common
stock
are
prices. The foundation of the art
to
of
However,
stock.
a
for
in
Tools
for
rather, the inescapable dif¬
ficulties of appraising
phenomena
and
the
acid
test of
/
that
economic
analy¬
its- verdict
pronounce
business
activity is facing a
decline, investors in stocks would
already have. suffered/as a rule,
that, in most
it
cases,
;be too late to take any
protective
action./Thus
the? in¬
.
Stock
series
forecasting
through
or
stock
the
for
:
yields least
reliable- results sconce - the upper
analysis
cyclical
themselves
4-
ences.
The
If
It
the factors
cyclical influ¬
to
ing.. For, to begin with, the im¬
.
mediate
Is the
Cycle
Key
of bull and bear
jiurpose of
the investor,
the core*of his problem is to pro¬
confront historical tables
we
important advantages.
the - problem
there
attacks
where it is instead of arriving at
it after much roundabout travel-?
among
are
sensitive
most
\
-
,
has several
prices
stock
turns,
subject to
the de¬
of the fluctuations of stock prices
Unfortunately for
the chances of success in forecast¬
ing
so
suggest
Advantages of Direct Approach ■
A direct approach to the analysis
the bottom of
approached.
are
to
as
sirability of direct-study.
cycle are entered
a cyclical decline
the
of
readies
is
study of intrinsic values
underlying eco¬
limitations
Economic
or
a
of the trends of
nomic conditions
market.
his
tect
existing holdings by * a
timely sale before the decline and,-
markets, as they
given, for instance, in Bar¬
ron's annual books on the Dow-
are
in the
of
case
new
investments, to
greatest possible as¬
that his purchase will not
the
possess
Averages/
with
similar surance
published in scientific stud¬ be followed by a shrinkage of
ies of business cycles, we shall ob¬ values.: His interest in business
serve in a great majority of cases
condi|ions as a buyer or holder of
a
close correspondence in their equities is only indirect; it exists
only to the extent of the bearing
respective dates; i It is conceivable that Dow the¬ that the course of business may
'
Jones
tables
"214
213
;
could
and trends: of stock prices
Chart 1
d i;
sis
At the time when
successful
even
levels
prices, however,
Actual
business itself.
of.the economic factors studied in
a "Cowles
Commission investiga¬
tion was found to be an adequate
Analysis," which also de¬
scribes the materials with which
necessity
investment prices.
turning points usually precede by
months those* of general
many
methyls of analyzing the
exists between values and average
ital worth is its starkest
of the most
are one
direct
a
trates
before,
sensitive cyclical factors-and their '
would
Market
holdings.
They
are stock
publication such
as
the sentative
\plues are built and outlines
to
fluctuate
in
price various valuation techniques.
"Chronicle," with its gallery of doomed
distinguished faces and: opinions, swings of lesser or larger magni^ PfobaotyThe main shortcoming of
I am impressed by the great va¬ tude, and prolonged declines are the value approach* as o guide -to
riety of judgments on the eco¬ at least disturbing to the peace of practical investment decisions is
nomic realities in which we live. mind of the holders and some¬ that value is essentially an aver¬
times may mean for them grave age. z To have any meaning, it
This remark is not a reflection on
financial consequences.
must take into account good and
the quality , of the opinions ex¬
Capital
appreciation
is
the bad times, profits and deficits. For
pressed by admittedly competent fondest hope of investment man¬
this reason, a definite correlation
and
sincere observers.
It illus¬ agement, but preservation of cap¬
of
tioned
such losses
long
"New
investors/-
prices from trends in other
factors, the prognostic!
value of economic analysis-may.
be doubted.
For example, none
periods- stray far
method has def¬
limitations.
They are dis¬
cussed
the
economic
from values, this
inite
to
stock
because
prices in their fluctuations; often
and
assistance
Stock prices themselves, .as men¬
made
are
.
economic
analysis,,
still, be- of relatively
would
little
then, however,- if attempts
to forecast trends in
Even
security analysis, the first tries
estimate the investment value
of
.means
this
ing sound investment policies. - It
is
especially- rewarding in the
middle phases of cyclical swings
when stock- prices and business
conditions are most nearly in step.
v
;
of
the,
^212
211
*
210
-•
209
orists,
208
.
206
205
-
204
i 200
199
velops in the near future. :
t
198
i
197
;
,
m
195
tached and
is
fact
a
ket
f
191
Advantage of the Market
i
m
193
<88
into
183
[Tl82
181
f
!
177
producer and
of
add
they
175
or
/ 174
171
in
!
170
to
I
169
168
166
internal * causation
But knowledge
of this fact does not help us to
determine in advance the particu¬
lar chain
of circumstances that
of
within each cycle.
164
163
!
each cycle a
istence
•165
162
'• 161
factors,
two
only:
activity in
in the
market.
moreover,
not extraneous to the general
but are, on the contrary,
its most representative and
components.
/
cycle,
essential
*.
of
analyst of the movements
prices should, therefore,
undue humility about the
The
stock
have
no
nature of his work.
of
results
his
Provided the
efforts
are
genu¬
he not only ren¬
ders a
great service to the in¬
vestor, but is also a specialist in
a
limited but vital field of cycli¬
reliable,
inely
The
same
statistical methods of
analysis and measurement can be
duration give applied to
and
separate and dis¬
tinct personality.
It is true that
conditions
prevailing
in
each
cyclical phase tend to generate
the next phase, revealing the ex¬
167
}
business
their great variations
amplitude
the
and
cal studies.
of
complexity
This
cycles and
t
of sta¬
curves.
172
f.
Between them
to many hundreds,
up
5
I
consumer
perhaps even thousands,
tistical
173
!
These
factors
two
on
prices
transactions
among
vestment banking.
176
i
their
spending, and
incomes; the
operations of commercial, and in¬
178
f
stock
goods, the paying,
saving
of
money
179
;
locussed
of
are
kinds
480
/
all perplexingly different in
respective movements, the
market analyst has his attention
their
ties, such as the
184
cycle has to
hundreds of fact¬
ors,
growing, harvest¬
ing, and extraction of raw mateials; the manufacturing, trans¬
porting, and distributing of all
j. 185
!
two
.
business,
cycle," remember that "business"
covers a wide
variety of activi¬
•186
:
the
•
>
-
general
realities; crowded
words
' business
the; economic
187
.,
alone, the mar¬
more
likely to
While the student of the
To visualize
the market analyst.
j 189
reliable./
is
analyst
deal with many
Analyst
advantage
the
lies
Herein
and
reason
succeed.
haphazard fluctuations
'92
-
For this
prices, but are, on the
contrary, deeply imbedded in the
economic cycle itself.
j
valid
more
of
stock
of
/194
■
approach is further strengthened
by the fact that it'offers for study
outstanding impor¬
tance that truly significant bull
and bear markets are. not unat¬
;
/
very
Yet it
/
1
-
derived from the
directness of this method of
ing
.102
201
:
'
equity prices.
on
The advantage
The
being followed by correspond¬ a much more limited field.
cyclical developments in the risk of getting lost in a maze of
economy itself;
Such will be the contradictory factors becomes im¬
case, for instance, for the 1946 de¬ mediately
and cgreatly reduced,
cline if ho business recession de¬ thereby making the conclusions
203
-
have
it
"
.
market analysts belong¬
or
ing to some other technical school,
may label a sufficiently long or
drastic movement of stock prices
as a bull or bear market without
207
a
study of
trends of
prices as are used for any
and all cyclical series.
The use
of some of these methods, such as
the correlation technique, the co¬
efficients of variation measuring
stock
dispersion of stock prices, and
other measures, was shown
in the "New Tools." - It led to the
conclusion that at the time when
the
some
the
market
was
approaching
its
turning point 1946 highs it had reached. a full
in any individual cycle, nor does statistical
expression of cyclical
it always allow us to locate its
maturity.
;
j/: causes even when the effects are
bring about a
will
r 160
already visible.
1
While the hundreds
'
which
are
constitute a business
still in motion,
to
undertaking
4
Once
of factors
cycle
it is a difficult
determine
simultaneous
I
their
4
analysis
by
a
a
working hypothesis of
probability of an impending
cyclical reversal has been estab¬
lished, the market analyst, so
forearmed,
can
concentrate his
attention on locating the;< actual
the
cyclical turning point.
L,
5
12 19 24 2
JAN.
-
9
2
16 21
FEB.
-
-
11 II 24 31
9 14 23 30 6 13 20 27 4
MAR. <
APRIL
^
MAY
7 14 21 21 5 12 19 24 2 9 14 23 30 6 13 20 27 5
JUNE
JULY'
AUG.
'
SEPT.
11 19 24 2 9 14 23
OCT.
NOV,
Only his¬ point of reversal. His task is sim¬
torical
studies can be sure
of plified by the fact that the turn¬
ing points of stock price trends
their; ground; but they are post
and of the volume of trading have
mortems and have no
Weekly Movements of Integrated Index and
I
.
_
;. -.
-
;
DowJemes Industrial Averages/ January-October 194$
utility
ment
/
great prac¬
invest¬
if
the
turning points of business
cycles, while they are still in the
formative stage, could be timed
for
tical
decisions.
current
Besides, even
definite
and - clearly
recognizable
They have been noted
and described in scientific studies
-earmarks.
„
- *
of general
But
in
business cycles.
his *
more
specialized
Volume
165 ^Number <4590
THE COMMERCIAL
4 FINANCiAL CHRONICLE
(2363)
->'-t.-ywirr
'
work
the market analyst, can - afford' to dig still further into the
i >
characteristics
.
•factors
with
cerned.
•
-the
which
Instead
only
he
is
market
trend-
likely
to
reverse
its
•
is
A
con¬
Statistical
Measure
of
he
sums
studies.
his
This
differential,
global, analysis
to
compared
statistical
series
index
the relationship
higher, priced and
higher quality -stocks and
the
lower priced marginal equities. A
as
throw
can
much additional light on the im¬
i
pending
;
changes in their trends.
This
edge
writer
of
His is
has
little ,knowl¬
so-called''charl/reading.
approach
different
a
which
meth¬
utilizes
purely statistical ods of analysis. He believes that
patterns of past behavior are not
a
reliable v guide ifor the future,
for they may not recur. Nor is, to
his
mind, ther study of current
trends
especially helpful, for. a
.trend, even if it can definitely be
near
well 'reverse it¬
future. - He be¬
-one
cannot
recognized,
self
may
the
in
lieves
that
secure
worth
out
while
delving
hope
results
beneath
the
to
with¬
surface
and
-measures
between
of
the
large number of stocks is included
in
each
the
of
of them
two
of
the
terpart
stocks
the.
wide
a
close
as
the
among 4
cross
Each
market.
priced stock has
both
groups,,
representing
section
low
coun¬
a
high
priced
could be found, making
as
two
groups
completely
as
homogeneous and as fully corm
parable as possible. Various sta¬
tistical »precautions ■ were, taken
to
avoid
distortions./
any
might arise.
This
r
„
index
.
.
•
.
described
is
that
•
in
-
tail in "New Tools." Suffice
; *. •
de¬
it to
here that it has shown great
analytical accuracy, both histori¬
cally and in its current daily ap¬
say
by measuring undercurrents
of price movements and shifts in
plication to the difficult markets
the
of
internal balance
ket.
Such
of
the
approach
an
mar¬
can
be
1946
toms of -declines
.bids, and at peaks
of rises
offers,* emanate predomT
inantly
froiri. investors
buying
from, and
selling to speculators.
The- height, and
velocity of the
-
two
In .order to translate, these prin¬
treating them ;.
total, he can dissect ciples into concrete terms of sta-."
them in order to discover intertistical measurements,!, a
special
nal
structural
was - constructed
relations
within index
by ,th^s
them thereby gaining more de¬
writer
and
was
conclusively
tailed insight into the phenomena I tested over a long period. n This
in their
-
of
;
1947.
and
while
Thus,
speculative
offers
of
investors
relations that
selves a foundation
have them¬
in the facts
making several
successive
new
highs in April and May, this in¬
of economic life.
//'
dex
Analysis
r
First,
While
let
the
consider
us
prices.
of
movements
stock
prices
permeate the entire mar¬
ket, the analyst knows that differ¬
of stocks have widely
ent classes
different
amplitudes
of
fluctua¬
tions, even though their changes
trend
in
are
The
ous.
rule simultane¬
a
as
this
reason
differential
stocks
in
issues
And
could
lows,
was
economic truth
ple
riods
business
of
that,
in
pe¬
improvement,
marginal properties benefit rela¬
tively more than the well estab¬
lished.
V'"'
in
'.Differences
market
action
further.
while the
no
rising from
1946
its
this index never left the
of its September-October
1946
range,
refusing
to
this
of
soundness
confirm
Quite
rise.
made a fresh bear
market low on April 7, i.e.,- sev¬
eral days before the market pene¬
it
come
to
a
grouf)
dominantly trades.
In
a
recent
,
,.
address
pre¬
V
.,,;
"Right
on
activity Qf speculation
at¬
tempting to exploit cyclical swings
well as temporary
changes in
as
.sentiment which
is the force be¬
hind the formations and reversals
of market trends.
And since its
inflow
withdrawal
or
alone,
the
annual
has
of
declined
a
the
volume
by
'"inverted"
an
a
sive
re-J
rise^
-
ket trends.
•
*/.
.?
-
~
indicates that-the rate
Chart
1
serves
as
an
extreme.
illustration.
It
of accelera¬
tion of the decline has
passed its
maximum point mid that a clirria^
is
near.
; ;
"
_.
Significance
-.1
'
-
-
s;'.
- -
of
• .
■
?
Index in
'• Rally
1946-47
/' •*
Similar indications were
given
bv,this. Index, during the rise o£
condenses the
writer's- daily
1928, it (Integrated Index and the Dow- the market from
the lows of 1946
Jones
industrial
stocks,
averages. - into to the February, 1947
high of the
the annual turnover in
ownership weekly figures; and presents' them informed ia te
recoveify fnoVembnt.
often is less than 10% of the out¬ in an
easily read, schematic form. The basic
Working hypothesis that
standing shares. "In other words," The dotted line for. the last week
the-'"-reversal of the cyclical up¬
says Mr., Hooper, "90% or more
of October extends the
Dow-Jones swing had taken
place already iA
from
was,
36.5%
to 20.5%..
123%.
of the
In
In
standard
holders of standard
seem
to
more
or
stocks
regard
themselves
as
less permanent owners
with only an academic interest in
day to day,., month to month, and
to year fluctuations."
year
averages to their actual
low of Oct. SO.
intra-day
..."
\.
It will be observed that the In¬
tegrated
two
self
Index
began to decline
before the market it¬
reached its high early in
weeks
If is interesting also that
stocks, however, 194-3.
considerably faster during the subsequent rise of the
than
,
in standard
soned"
stocks.
and
more
Changes
"sea¬
in
the
market
May,
not
these stocks
power,
for
are
the
primarily
ebbs
and
respon¬
flows
of
speculative movements.
If
the
stock
exchange were
strictly an investment market, its
price fluctuations would present a
much flatter curve. However, ow¬
ing to the influence of specula¬
tion, stock prices are but shadows
of future events
ternal
in the
thereby revealing the in¬
weakness
of
the
recovery
spring of 1946.
And during
the two last weeks of
May, when
the Dow-Jones industrial
averages
were at their bull market
top, the
was
limited* to
catching its turning
points. And the Integrated Index,
by bringing out the deteriorations
of
the
price-volume
structure,
ing "inverted" rises of the Index
in
a
lading market naturally ap¬
ply in this Case quite as much-as
in connection with Chart UNo
"Chart
drop of 26%.
approach
/<
Reading" Implied
phasized
In
they
that numbers of shares
And, like all shadows,
enlarge or dwarf the pro¬
accepted, th&
fore, the task of the observer
Integrated Index made a precip¬
itous fall from 62 to below 46—a
the traders.
discounted by
once
to
studying the action of this
Index, it should be borne in mind
as
prevented,
of any long-term sig¬
nificance to this upswing. There¬
new tops in April and
gave clear signals of reversals of
the Integrated Index did -this short-term rise, as is shown
regain its previous driving on Chart 2. The remarks concern¬
relative volumes of transactions in
sible
1946
ascribing
trader,
as
It should be again strongly em¬
here That the writer's
the
used
implies
charts."
by him
no
They
as a
(Continued
"reading .of
merely
are
convenience for
on page
36)
•
Chart 2
Importance of the Volume Factor
belonging
differing
■
The
ities, partly because low price and
marginal position frequently co¬
incide
and
partly because low
analysis
price gives a stock the advantages
able information
of
a, eheap call on the hope of
large,! percentage gains and also
from similar
possibilities of differential
are not limited to price
relations alone.
of
Even
can
more
be
valu¬
obtained
study of the activity
•
Not enough at¬
transactions.
brings it within the reach of more
tention is
buyers.
>'
;
.'This principle has been tested
and established by scientific sta¬
Yet
tistical studies summarized in the
shapes price
.
"New Tools."
It permits the con¬
struction of indexes revealing in¬
which
market
in the
forewarn of
changes
structural
ternal
can
changes
impending
price
in
trends.
For
instance, in a period of eco¬
improvement, a marginal
steel company stands a chance of
tripling or quadrupling its gross
profits or of doubling its share of
nomic
usually paid by market
analysts to the study of volumes.
they are the active force
whose
inflow
withdrawal
or
The volume
of shares traded is the generator
curves.
of the current of
It is also
prices.
important
constituent factor
of the general business cycle.
an
In
"Measuring Business Cycles,"
Burns & Mitchell bring out that in
the 15 cycles between 1878 and
1933, share trading led the down¬
turns in 14 and the upturns in 11;
it lagged behind
However,
general business
cyclical peak and
only twice at a trough.
On the
average, it turned up four or five
months before business, and sig¬
naled
the
downturns
approxi¬
beyond
mate
the
business with cor¬
steel
total
responding effects on its net earn¬
ings; but not United States Steel.
a point will be reached
which a small company
cannot progress. In other words,
the
price of a marginal stock,
when measured by the price of a
qiiality stock, cannot advance be¬
yond a certain limit without makiiig. a correction inevitable.
The
of the
extent
correction, when it
will depend upon how
the market has overvalued
only
at
once
10
Shares
months
amplitude of
not
marginal
equities
and
upon
"phase through which the busi¬
'cycle happens to be passing
ness
•at thst
particular moment.
The relative economic improve¬
and
"the relative price rise of its stock
cannot continue indefinitely.
A
ment
of
bursting
was
a
marginal concern
point
reached,
is
for the frog
as
it
in the old fable
when he tried to blow
himself
up
"•'to the size of a bull. Measuring
low priced stocks not in dollars
and
cents
but
in
terms
of high
priced stocks can help to deter¬
mine the limit beyond which the
a
advance.
very
wide
cyclical fluctuation
When the volume oi
analyzed
much
the
in
have
and, unlike most other economic
factors, the upswing is more rapid
and
explosive than the down¬
swing.
comes,'
the
a
traded
in
for all
greater
trading is
detail,
shares listed,
arately by classes,
but
i.e..
sep¬
further valu¬
able information may be obtained.
Volume
analysis complements
price analysis, revealing the pres¬
ence
of
market
structural
that
are
changes in the
not
always
re¬
flected in price relations.
It often
discloses what investors and spec¬
ulators
respectively are
doing.
quality of marginal pairs of
bids and offers, i.e., the bids of
the most optimistic buyers
^nd
The
,
the offers of the
sellers,
tions
between
take
place
most pessimistic
which
and
transac¬
prices are
fixed, is always in flux. At bot¬
.
...
of the writer's
some
to
stocks
of
has, needless to "
bearish significance.
Such
position, which, incidentally,
according to
_
coineidentally
Index which
say,
into-"
reason/
falling market, this is
fleeted
the
enter
For this
transactions irises
with
-sensitive/in -the
percentage
prices,
wnen
quickly iwas, for instance, the case
during
the -two-week period of
Aug/ 23
of
volumes, differential volume to Sept. 6. And when
the Index,
analysis holds often the key to returns from an
"inverted", rise to
the forthcoming
changes in mar¬ a "normal" decline, this action
j.;
Price-Volume Interactions
Hooper j-' When both prices and volumes
shares traded
pciious
is
icle" of Feb. 6,
1947, L. O.
attention to the
increasing ;are integrated into combined in¬
stability of corporate ownership. dexes they
produce indicators that
In the course of the last
decade ,are
listed
their
as.
composition.:
-
reflected in the relative structure
and Wrong Ideas About
Stocks,"
reprinted in part in the VChron-
called
its
in
trated downwards, on April 12, its
so-called
January-March defen¬
price groups, as well as
in intrinsic qual¬
different
will
marginal pairs. This
reflection in the relative
activity of transactions ' in the
stocks in which, each
finds
the
well
other indexes, had never even ex¬
isted.
characterize
those
.
.
proceed
1947,
in
groove
recently,
future is to be found in the sim¬
January
conservative
of
terms
again,
market
and must
in the
its
high and began to decline in May
at the identical point from which
it started to recede in January. In
this way it indicated clearly that
the relative valuation of marginal
the
recur
exceeded
never
behavior has occurred in the past
necessarily
moment
the effective
the
Principles of Differential
the
the bids and
near
is
after the break of February, 1946,
In speculative
market resumed its advance,- the turnover is
valid, however, only if it is based
upon,
of
wave
determines how
jected object, .depending upon the
position lot. the economic sun. * It
6;/o' Pf :/a
21
FEBRUARY
3b I j
I
r
8
H
MARCH
If
'
36
to
as
The Case for Scientific
Stock Market Analysis
the eye—as a graphic illustration
of the statistical information they
depict. No interpretation of chart
patterns is ever attempted nor are
comparisons made with any
formations of the past.
In
averages
market
analysis show
surface conditions alone. They do
technical
not
expose
in
often betoken
procession
Index of
leading the downward
company with
our
High-Priced Stocks.
in
reports
No
that it is pos¬
predict with precision the
should not be misunderstood.
fact,
author
the
by
The indexes devised
trend.
internal
measure
ferent angles. The difficult mar-*
good
kets of 1946 and 1947 were a
in his practical daily work,
often dispenses with
writer
this
merely exam¬
the. statistical data them¬
altogether,
charts
ining
relations
the
of
day to day.
They may be caused
the forces oper¬
by extraneous factors. Our aim is
merely to study the underlying
structural relations which are the
So, for in¬
materials out of which the trends
reflect
And they, in turn,
selves.
market from
the
fluctuations
of
ating in the market.
stance, the Integrated
Index ex¬
the balance between the
price-volume factors of both the
low-priced and the high-priced
presses
So far no evidence has
built.
are
that
appeared
significant
a
ward trend is in the
haps
making. Per¬
following
stronger
a
up¬
than
stocks.
that of last week may develop
Index is only
statistical measures
used by this writer.
No absolute
reliance is placed by him upon
any single tool.
Each contributes
an essential element to
the mak¬
ing of a complete picture. Correct
understanding
of
the
market
means too much for the financial
welfare of individuals and institu¬
tions to leave any useful instru¬
new
Integrated
The
of many
one
unexploited.
ment
if
efforts are made to push the
It seems doubtful,
that it can gain much
momentum. Technical indications
market
up.
however,
point to a further extension
of the decline."
still
dicators.
selves
approaches to
investment problems, market anal¬
ysis has, of course, its own lim¬
itations. It diagnoses internal re¬
lations in the market only at the
—Like
other
all
Under
certain circumstances, sudden de¬
time of the measurements.
events
cisive
this
But
is
News
them.
upset
may
the
often
the
ket
the
trates
tural changes.
dicators,
changes,
revealing
by
economic conditions,
greater.
These shorter
underlying
is
even
as
serve
can
outlook
their
letter of this writer
market
(April 1, 1947):
memorandum
last
ex¬
pressed the belief that a clash be¬
tween buying and selling pres¬
whose outcome could be de¬
sures,
cisive for the direction of the next
intermediate
likely to
market once
the
critical
move, was
when the
approached
develop
more
levels of last Fall.
The short but
sharp rally which took place last
week raises the question whether
Jhis is not already occurring at a
Higher
level than was anticipated
by this writer. This rally extend¬
ed the anemic rise of the week
before
and
Frequently
business.
for
lies in changes in the
cause
of
attitude
psychological
buyers
than
sellers of stocks rather
and
in
and
made
it
look
valuation
conventional
"A
which is established as the out¬
the
of
come
way to illus¬
possibilities and the
limitations of this type of analysis,
as
applied
in actual
practice,
would be by quoting from a re¬
Perhaps the best
"Our
coun¬
no
terpart at all in the state of
such
weather
trate both the
cent
have
often
movements
for investors.
vanes
psychology
mass
yield."
These
the
even
optimism
so
are
and
powerful
of
waves
pessimism
that
informed investor
well
himself with
"is forced to concern
resentative samples of the
has
been
rep¬
differ¬
to
see
follow
that
the
this
Ratio
market's
fell
on
upward
statistical
priate
processing
for
changes in price-
volume
relations, valuable infor¬
may
No
hopes
are
points after
Yet
these
belittled by the relative
cline in
consists
of
the
few months
to
hence, rather than the
prospective yield of an investment
over a long term of years. . .
psychological
dominate
the
market,
ihfl%ices
an
econo¬
guidance to
painstaking
analysis of structural changes in
mist
provide
can
the
investor.
no
But
a
the internal relations of the mar¬
itself
ket
ability
detect
can
the
prob¬
of impending
tuations
prices does not
in stock
the
for
investor
interest
the
timing
as
same
their
cyclical turns, it cannot be com¬
pletely ignored. The selection of
the
most
profitable moment for
the execution of
sell
can
often
a
decision to buy
mean
large dif¬
ferences in dollars and cents.
Summary and Conclusion
Indirect methods
hardly at all to last week's spurt.
the
And, prior to March 15, it was
prices
in
links
analysis,
chain
the
of
all
are
investment
levels
and
of
trends
analyzing
of
stock
itself.
adequate by
subject to limitations
be
least
price
The
percentage
purchasing
of
consumer
directed
products will
tural
more
consumer
come
available, but I do not be¬
this
lieve
to agricul¬
diminish as
durable goods be¬
effect
on
factor
farm
have
will
much
The
prices.
sup¬
durable consumer goods
has steadily increased.
In fact the production of many
consumer
goods
such
as
cars,
ply
of
available
radios, and washing machines is
now
considerably above prewar
levels, and yet farm prices have
rise.
to
continued
I
do
not
an¬
ticipate much weakening of farm
will,
doubt,
chased out of savings or
no
Some
ments.
consumer
be
on
pur¬
instal¬
resistance
to
high food prices is being felt;
but so long as incomes are at a
high
fairly
level,
I
believe
the
winter
agriculture.
Plantings
heavy, fall and early
weather
has
been
of
applica¬
tion in which its comparative ad¬
Value
est.
analysis
is
essential,
since without it investment think¬
com¬
not
occur
expiration
of
Steagall Amendment, that is
until at least Dec. 31, 1948.
the
and
a vacuum;
un¬
investor studies economic
an
Supreme Court Limits
Vet
Seniority
The
United
Court, ruling
section
of
trends, he cannot form
to the
as
probable future earnings
interest
ket
rates
analysis
solve
of
opinion
an
the
—
alone
But
timing. For this
mar¬
help
can
Selective
Service
provides that where
is
entitled
ployed in his
to
prewar
be
to
problem
it is
reason,
an
policy.
job he "shall
and shall not be discharged
cause within one year of
restoration," declared that the law
without
does not
initely
rights
protect
against
of seniority
old job, Associated
on his
advices
Press
veteran indef¬
a
loss
stated.
The
by
We
from
Cincinnati
a
food
countries
to
tion
real
or
to
where
To return then to the
when
and
prices
starva¬
how
farm
by
the
CIO
with
Workers
Whirls
had
for
been
Mr.
stated,
back
than
more
negotiated,
was
advices
press
a
Act
that the Selective
con¬
Service
reduction
prevented
the
from
year.
He went to court with the
tention
questions,
will
re¬
his
of
seniority. The lower courts agreed,
but the Supreme Court majority
to me that
held otherwise.
slightly in
The Court's decision, delivered
on the
other hand there is much evidence by Justice Rutledge, was based on
farm
the
it
far
Press,
Automobile
When the contract
the
refuse
hardship exists.
was
to 6 months
years
the Trailmobile Co. of Cincinnati.
war
unlikely
9
2
case
contract negotiated, said the
a
Associated
United
are
to
7
rendered in the
was
of Lawrence Whirls,
country will nevertheless contin¬
ue.
a
reem¬
be restored without loss of senior¬
decision
vestment
Supreme
April 14 on that
ingre¬ ity
the
all-important
States"
on
the
Act which
veteran
fall,
prices
seems
fall
may
immediate future, but
firm un¬ what it called the lack of a show¬
avail¬ ing that Mr. Whirls lost seniority
Concerning how directly because of his being a
that they will stay fairly
the
til
new
able in
crop
the fall.
becomes
From
the
Associated
they will decline, I see little veteran.
indication at this time of any real Press advices we quote:
far
timistic
that
this
on
directed
more
become
It
score.
is true
purchasing will be
consumer
thev
to durable
available,
goods
but
as
Before and
his
Whirls
immediately after
service, Mr.
employed by the
from
return
was
^Highland
Manufacturing
Body
Trailmobile
subsidiary.
Highland's
equipment
personnel
were
trans¬
ferred to the Trailmobile plant.
Co.,
a
Later,
and
peo-
In the
majority decision, Jus¬
pleP|vill still prefer to eat mod¬
tice Rutledge said that veterans
erately well, if they have the in¬
come.
Increased production stim¬
and
ulated
by former high prices will
tend to weaken farm prices, but
of
effect
the
this
will
be
offset
possibly in large measure by the
foreign demand.
favor¬
able, quality seeds are in ample
supply, more fertilizer and new
machinery is available, and the
supply of labor is expected to be
greater
than
in
recent
years.
These factors, together with the
stimulus of anticipated high prices
will again result in near-record
production on the farms.
In my
opinion this high production is the
most likely to cause farm prices
to fall.
But I do not anticipate
that they will fall by any sizable
amount before the beginning of
sup¬
that
will
the
to
arrested
seems
Each has its,
field
particular
own
to purchase much American food,
I believe that exports from this
Secretary Anderson in his ar¬
in "Barrons"
indicated
he
that
standing
merous
the end of this
by
would
year
prices
20
at the
average
beginning of the year. How¬
this estimate is based on the
assumption of a drop in business
activity in the second h^lf of 1947,
and I am not willing to zrgree that
ever,
will
we
such
a
see
sufficient
fall
in
bring about
decline in prices. Further¬
business
a
activity
more,
are
the
more
prices
sufficiently
as
a
above
support levels to allow a drop of
and
negotiated
new
new
a
absorbed.
Referring
the
case
to
lower
courts for further action, the Su¬
Court majority said the
time to pass on issues based on
the union reorganization will be
when those issues are presented
preme
directly to
a
high court.
Mr. Whirls has been read out
of the union for taking legal ac¬
tion outside of union procedure,
enforce
to
That
few
was
example, corn, are«close to parity,
and, therefore, cannot fall far be¬
fore support prices—90% of par¬
a
a
cutting the
merged subsidiary
seniority based on the
date the Highland company was
back to
about
one-third, ,the prices of a
important commodities, for
nu¬
Trailmobile workers or-:
from the
men
to
farm
while
whole
when
the
in
seniority
ganized themselves into
union
lower than they were
farm
to 25%
alike
los(
group
closed shop contract
ticle
believed
non-veterans
Higland
action
his
of
claimed
rights.
union
the
also
left without Supreme Court
review at this time.
Justices Jackson and Frankfur¬
encountered. This fact ter dissented from the majority
Europe for American farm prod¬ will tend to keep certain other opinion. Mr. Jackson said that the
ucts is likely to be larger than commodities above support levels.
seniority rights of Mr. Whirls had
was
at first expected.1
Because It is true that as general prices
been bargained away from him by
fall, parity prices
also decline
of unfavorable weather in west¬
since they are based on the prices a union "which, under the Na-.
ern Europe the wheat crop pros¬
the farmer pays for what he buys. tidnal Labor Relations Act, was
pects in that area are poor. Fur¬
But in practise there tends to be entitled to bargain as his repre¬
thermore, Great Britain may want
a
lag inasmuch as support prices sentative. I do not think that Mr.
more
feed to build up its livestock
industry,
and England and other
European nations will want more
purchasing
1 Clinton
lems
are so
to
it
thinking and action. None is fully
and other countries is insufficient
dried milk and eggs.
strongest
equities on the Board, responded
market
more
income is
consumer
in
wits
of
vestment Consumer Goods Stocks,
which
and
likely to occur, I believe, in 1948.
been
or
In fact, our Index of In¬
sis
(Continued from page 9)
have
price action of the better quality
stocks.
at
Shaip Drop in Food Prices
tion
vital
declines.
adjustment
until
Thus
duced
anticipate the
basis of conventional valuation a
"battle
initiative is passing into stronger
Such is often the earmark
prolonged
plete
techniques.
Value analysis, economic analy¬
likely
ports.
veteran, whose seniority
influenced." And this generates a
have
of important turning
all the three basic
essential prerequisite of sound in¬
obtained.
be
this writer is far from
However
changes, in the news or
thrusts may mean at times that the
hands.
extent by present
dients of stock values.
changes in
both Wednesday
and Thursday its price trends. For once we know the new crop year.
isolate
and
detect*the
when the market advanced.4 This how to
The fourth principal factor af¬
that
generate
market
indicates that the brief recovery forces
fecting farm prices, foreign de¬
was not of an organic nature.
It trends or whose withdrawal will
mand, is likely to continue strong.
did not spring from the
inner cause their disintegration, we are In a recent article in
"Barrons,"
depths of the market, but seemed well along the road of determin¬
Secretary of Agriculture Ander¬
ing the timing of their reversals.
to reflect pump-priming efforts.
son pointed out that the needs of
While catching short term fluc¬
"This reluctance of speculation
will
is
submitting
measuring the
adjustment which
ities
segments of the market, and
appro-,
downward
will be required to bring them in
line with those of other commod¬
some
by
to
to
the
the navy and the air force,
for the defense of his welfare,
the investor needs the services of
ent
them
anticipate that they will
people seem
feel
they will.
Furthermore,
as soon as many
army,
and
impending
consumer
will
continue to
pay
in the at¬
high prices for food.
mosphere, of the kind by which
From all indications we
shall
experience shows that the mass
psychology of the market is most have another year of top produc¬
anticipation
the
"However, price-volume rela¬
tionships continue to remain un¬
favorable.
For some time, now,
Volumes
in¬
taking
and
the
of
not
so,
less
goods
When
of
protection
ing remains in
substantial
mar¬
itself.
unto
violently prices because of people spending weakness in the forces determin¬
the result of a sudden fluc¬ more of their income on these ing farm prices.
Consumer pur¬
tuation of opinion due to factors durable goods and, therefore, less chasing power, I expect, will re¬
which do not really make much on pork chops and butter; A con¬
main relatively strong during this
difference
to
the
prospective siderable volume of new durable yeah Possibly I am overly op¬
Psychology versus Economics
Ratio
the
need
we
be used and developed. By
sufficiently
that
or
suffices
analysis
do
drop
is liable to change
...
more
rising only on days of declining
markets. By referring to the usual
statistical
exhibits, our readers
ket
as
convincing.
the
should be discarded
As for the defense of the country
ception. Many other methods can
the investor by a
of market trends,
as compared to those that can be
derived from an analysis of the
leading part in market operations:
unex¬
its
ap¬
vantage and usefulness are great¬
scientific mar¬
barely at
is
analysis
other
all
tive value of the services that can
And statistical in¬
utterly
pected. Usually, before it has been
announced to the public, it infil¬
giving ample warn¬
well,
that
proaches to investment problems
periods shorter than those
cyclical swings, the rela¬
For
of
market, causing struc¬
seldom
case.
them¬
mation
changes in the trends of pro¬
duction or profits. Lord Keynes
defined speculation as the process
of forecasting the psychology of
the market. He ascribed to it a
not
is
in¬
new
acquitted
They
The technique of
direct analysis
Market Analysis
the1
for
ing of the successive declines.
Analysis of Short-Term Trends
be rendered to
Possibilities and Limitations of
ground
testing
Thursday, May 1, 1947
suggesting
dif¬
claim is made here
sible to
its
in
internal
structural
the market which
impending Changes
market conditions from many
"The character of these
chart
*
desirability of
and
most commonly used for
the
suggest
direct study. But the indexes
changes
(Continued from page 35)
any
FINANCIAL CHRONICLE
THE COMMERCIAL &
(2364)
for
the
power
P.,
Next
Few
European
"Farm Probr
Years," Barrons,
Anderson,
March 24, 1947, p. 8.
Even if the
in
ity—
for
are
most
the
crops
beginning
season
and
announced
announced at Whirls' seniority rights after one
are
marketing
the
of
received
farmers
prices
even
the
year
are
mune
if parity Justice Jackson
prices decline during the season. statute
In
short,
farm_prices
wTh*ile
are.
I
made immutable
from collective
agree
that
likely, to.;fall, I
him
til
restored
as a
they
or
im¬
bargaining,'*
said.
"But
these
rights
the
to
veteran/ They stand un¬
are
lawfully
modified.'*
iVolume
Number 4590
165
,THE COMMERCIAL ,&'FINANCIAL CHRONICLE
1
(2365)
3?
>
1*-
Is
the
Money Supply Too Large?
(Continued from first page)
our
money supply,
result of war
swollen
a
as
finance, is too large.
It is held that the existence
of
this money—even
though Its total
is
no
longer
increasing—repre¬
sents
a
continuing threat of price
inflation.
posed
Accordingly, it is
that
the
pro¬
supply
money
should be reduced.
This could be
done in three ways:
(1) The Gov¬
ernment
might
use
surplus
any
funds to pay off its securities held
in |commercial* banks.
Government
Tthe
public
(2) The
bonds to
might sell
and
the
use
proceeds
tto pay off securities held in com¬
mercial banks.
(3) The Federal
Reserve Banks might restrict
mercial
bank
ernment
by selling
portfolios of gov¬
securities, by raising the
by increasing bank
discount rate,
reserve
requirements,
novel
more
ways,
suggested.
Incidentally, in the
reducing the money
of these devices,
of
process
supply
by
in other
have been
or
as
any
interest rates would tend
to
rise.
In my
judgment, there are th£ee
important reasons for questioning
whether
the
present money sup¬
ply—large though it may be in
comparison with past amounts—
is too
large.
of these
1 shall discuss each
briefly.
reasons
of
our
to
seems
that
me
overly literal acceptance of the
quantity theory of money. This
theory is one of the most ancient
and persistent of economic ideas.
Briefly stated, it is that the gen¬
eral price level varies more or less
directly
with
the
quantity
of
money.
A large money supply
supposed
high
be
to
prices
associated
and
small
a
supply with low prices.
Applying
this
theory
to
the
present situation, it is held that
money
the
supply
has
nearly
tripled during the last seven years
while wholesale prices have in¬
creased by only 85%, on the aver¬
age. Hence, a further increase in
prices is regarded likely, or even
inevitable, unless the quantity of
money is somehow reduced.
money
As
with
most
traditional
and
popular ideas, the quantity theory
of money has an element of truth
in. it.
the
But
the
quantity of
is by
relation
means
no
invariable
between
money and
thing
prices
the. automatic
or
it is sometimes
believed to be.
This
shows
can
index
numbers
of
Chart 1
whole¬
sale prices and of the money sup¬
ply (i.e., deposits and currency in
circulation) since 11800. ) During
this whole
ruptions,
period, with few inter¬
the
supply of money
has increased steadily. Wholesale
prices, on the other hand, though
subject to important fluctuations,
have
zontal
-
moved
that in
to
generally in
a
hori¬
direction.
: In
1880, for example, the price
index>was 68. and the index of
deposits and currency about 5.
fljjn 1915, the price index
was
gold
this
to
1929, the price index
80, yet—during this
riod
192.9-1940—the
posits
from
was
Again,
World
The
observe
War
68
and the
deposits and currency in¬
dex 40. In other words,, over the
money
relation
in
taking
to
into
in
now
exist¬
national
income—
account
long-term
quantity fcf
money and national
This is suggested by my
second chart.
income.
In
the
upper
the solid
come
curve
half of the chart,
shows national in¬
and the dotted curve
money
and
currency)
since
the
period
of
financing. As
chart shows, deposits and cur¬
a
lower in the 'twenties than at the
time of the war and, in
fact, wrere
any
you
other pewill find,
think, that the relation between
quantity of money and prices
a singularly close one.
The difficulty with the crude
quantity theory is that it attempts
not
explain
level
by
without
changes
in
single
one
considering
1870, deposits
and currency were less than 20%
of national income, by 1900 they
were
50%, by 1930 about 70%,
and in 1940 over 80% of national
On
spend
other
line.
You will remember that all dur¬
ing this period, prices—aside from
irregularities—were moving more
or
less
horizontally.
In
other
the
words,
country
money
was
the
That
than the national income poses an
merely
relatively
money
interesting question. There are two
principal explanations:
(1) The
proportion of the nation's produc¬
tion
passing through the moneyusing process has steadily in¬
creased
as
have
we
spending is the amount of current
put it another
income
is
wealth
tion
the
im¬
amount
of
The propor¬
they hold in the
own.
wealth
of
most
second
is
people
of
form
the
factor
is
only a minor
additional factor.
Moreover, the
effect of the quantity of money
on
spending is canceled in part
by the fact that the interest rate
money
tends to be low when the quantity
of money is large as at present.
There is
one
quantity of
case
in which the
does
strongly
spending. That is the
case of hyper-inflation as in Ger¬
many in 1923 or in Hungary today.
money
influence
these
ernment
conditions, the
issues
money
gov¬
wantonly.
shifted from
frontier-barter
a
and
the
of
even more
rapidly than business activity as
measured
by
national
income
without exerting an upward pres¬
sure on prices.
they hold a
large amount of money. The most
important
factor
influencing
portant
supply
increasing
and
more
more
because
per¬
price
the
factor
important factors. The quantity of
can affect the price level
only
through
its
influence
on
spending, But it does not follow
people
the trend
thef\£verage. this
supply would
consistently increase more rapidly
money
that
economy to an
of specialized machine
product on to a mass market. To
economy
needed
way,
more
than
now
was
under frontier conditions.
wealth has
our
money
needed
(2)
As
increased, people
have wished to hold a greater and
greater percentage of their assets
in
the
form
cash.
of
There
As
things now stand, assuming
that the long-term trend in the
ratio of money to national income
money
with
preciates.
level of
This increase in spend¬
prices
to
monetary requirements, the
supply is about in line
requirements, at the present
prices and of business ac-
rise
and
National
0NS 0f
Income
the
public
hold
to
banks.
raised
from
The
much
as
Government
taxes, then it sold
bonds
to
the
first
it felt it could
as
public
as
many
it
as
could,
then it obtained the balance
and
of
its
requirements
banks.
the
Only this last resulted in
increase
an
from
in
But
money.
this
increased fairly rapidly and stead¬
ily. This increase in money sup¬
retirement
program.
Many lead¬
public opin'on have been
advocating more severe restric¬
of
tions
in
order
to
down
cut
the
supply of money further and more
rapidly. In my judgment, the au¬
thorities are acting wisely to fol¬
low
a
of moderation.
course
Any
sharp restriction of credit at this
time might well lead to a serious
decline in demand and might pre¬
cipitate or accentuate the reces¬
sion—which is so widely expected
for
of
reasons
non-monetary
a
character.
■
.
-•
.
Past
experience with the policy
of
contracting credit near the
crest of a boom hardly inspires
example, prior to 1920, the money,
supply was growing less rapidly
than
securities
which
—
they
always at liberty to do and
in fact were strongly urged to do.
In other words, the money was
were
created
in
the
to
response
de¬
mands
an
of the community—not as
arbitrary and inflationary ac¬
tion of the Government.
tial
The ini¬
spending
surely represented
an increase in
demand, but it does
not
necessarily follow that its
continued
of
source
is
the
the
not
finance
is
which
amount
been foisted
on
them
evident
has
by unsound
the
from
the
the
fact
that
they are always at perfect
liberty to buy government securi¬
ties in exchange for their money—
and at good rates of interest (es¬
pecially in the case of savings
bonds). But instead, they choose
national
far
to
assert that
the
Federal
sued
a
can
trends
relation
normal
when
to
na¬
long-term
are
In my judgment, therefore, the
present supply of money is not
necessarily a^pjessive in terms of
present rates of production, pres¬
NATIONAL
the*
was
see
authorities
Reserve
pur¬
restrictive policy. As you
in the chart, the regular'
growth in ratio of money to
tional income, which occurred
na¬
1923, came to an end in
One may at least question
whether this action was helpful
1928.
at that time.
So it
questionable
credit
contraction
propriate
the
that
would
at
be
ap¬
of the broad interest
subject, the "Chronicle"
be
would
pleased
comments
from
to
receive
readers
Dr.
on
Bowen's thesis that the present
supply
any
on
Letters
is not
excessive
other related phases
should
discussion.
to
addressed
be
Editor, Commercial and Finan¬
cial
Chronicle,
New York
Park
25
Place*
8, N. Y.]
Harry Severson Joins
Dun & Bradslreet Staff
4\Dun
Braridstffcet'r^tncf'
&
an¬
that
Harry L. Severson
has joined the Municipal Service
Department of their New Yorlfc
nounces
office.
For the
i
has
been
past
of
Bankers
nine
the
staff
Department
Development
the
for
Mr. Severson
year
member
a
of
INCOME
me
severe?
now.
[Because
in
to
seems
least
reasons
questioning whether the pres¬
ent money
supply is excessive:
(1) the quantity theory of money
is of dubious validity,
(2) the
present supply of money bears
income
Credit
depression,
I feel that the tight-money policy
accentuated it. Again in 1928, the?
for
a
this
of the subject under
three
in
For
1920-21
and
tional
income.
of
as
cause
money
advanced
2.
tight and interest rates were
high. Although I would not go so»
Conclusions
have
illustrated
chart
of
was
to hold the money.
I
is
This
half
lower
lowing
of
amount
which people want to hold
money
and
sure
a
price inflation.
this
That
is
existence
Trust
Company, and
prior to that had
years
charge of the investment research
„Y
• 50
0
175
the Federal Deposit
Corporation in Wash¬
of
program
Insurance
~kt
U\
li
It
vV'
ington.
150
II
ply
If
If
125
l«
country, and in part by other fac¬
125
II
100
I
PRICES
ATIOf>JAL
1 NCOM
C
published by the?
Deposit Insurance Corpo¬
ration, as well as articles on mu¬
nicipal bonds and investments.
.
f
.//
"Municipal
in "Municipals,"
II
M
75
.
He is the author of
Federal
*
100
i
Credit Analysis," which appeared
II
:
J >*4 ,f
AND
re¬
ernment
DOL LARS-
•
bank
on
confidence.
4
MONEY
pressure
in connection with the debt
businesses who preferred to hold
it rather than use it to buy gov¬
175
tors as I shall show.
of the quantity of
in existence.
Recently the monetary authori¬
ties have been exercising gentle
money when spent by the Govern¬
ment flowed
to individuals and
200
The most important thing shown
by this first chart is that histori¬
cally the quantity of money has
has been made necessary in
part by the general growth of the
basis
of
MONEY AND
sometimes to fantastic heights.
Money
of
considered, and (3) the
present money supply exists only
as
shown
in the lower part of in response to the demands of the
chart 2 fairly represents our grow¬ public to hold money.
ing
causes
desires
about
mobiles, and other goods.
currency and spends it rapidly in
order to get rid of it before it de¬
then
money supply was created
almost entirely in response to the
are
advantages to an individual
or
business
in
hcldjjig a large
cash balance.
As people become
wealthier, therefore, they tend to
want jnore cash just as they want
larger amounts of clothing, auto¬
many
The public loses confidence in the
ing
large
to
before
the
on
money now
ers
point is that the present
individuals, (3) sale of securities
Whereas,
income.
Yet7*after
the war, the amount of
deposits
and
currency
continued
to
in¬
crease
with only a minor interruntion in 1921, but prices were
to
The Public
A third
percentage of
expressed as
national income.
and
prices, present rates of inter¬
est, and present habits of the pub¬
lic regarding the use of money.
Also, I doubt that continued price
inflation, or a later resumption of
price inflation, is indicated, merely
serves
(1) taxes, (2) sale of securities to
deposits
centage has increased at the rate
of 13A % per annum as shown by
before.
Choose
Money
currency
i.e.,
rency did increase somewhat more
riod-you wish, and
of
money. In the finance of the war,
the Government had three sources:
rapidly
declining.
Quantity
The lower half of the chart
shows the relation between the
are
ent
restrictive
The
Determined by the Decisions of
two,
increased
war
than
.
the long-term trend.
trends in the relation between the
(deposits
period is usually attributed to the
growth in quantity of money as¬
the
of
1800.
I—roughly 1915-1920.
with
amount
ence is apparently about normal
de¬
of
increase in prices during the
sociated
My second point in questioning
that opr present money
is excessive is this: the
the view
supply
pe¬
same
index
and
currency
110 to 133.
Under
be illustrated.
of
about 95 and in 1940 it had fallen
is
money supply is based upon
with
flow
the
fear
an
is
the
country was increasing;.bank re¬
serves,
fears of ^mflhtion were
widespread. Yet the chart shows
I
Quantity Theory of Money
First, it
when
com¬
reserves
their
of
some
35-year period from 1880 to 1915,
the money supply
(i.e., deposits
and currency) increased by eight
times yet the price level at the
end of the period was the same as
at the beginning.
Again, during the 1930's when
we
began deficit financing and
livity.
National income is cur¬
rently running at the rate of about
as indicated by the
right-hand margin
of the chart, and the supply of
money is about $167 billions. The
^fatio of money to national income
is about 95—also indicated by a
dot—which is almost exactly on
$17.6 billions
dot near the
75
1 *
'
/, *
5
t
"
«
*
i
*
r
Y '
,
Now Friedman, Brokaw &
r
i
*
H*
Lesser
1 /-'
f
50
50
y
J
S
25
>
I
25
MINU
I-
-
Iff
DEPOSIT s
CURRENCY
r
i
f
ST.
LOUIS,
MO.
—
Effective-
April 21st the firm name of Fried¬
man,
Brokaw
&
Samish waschanged to Friedman, Brokaw &
Lesser. The firm which maintains
offices at 711 St. Charles Street
holds
membership
in
tjie
New
York, St. Louis and Chicago Stock
Exchanges, and other exchanges.
Rogers & Tracy Instals Wire
To Edw. J. Bcurbeau & Co.
CHICAGO, ILL.
—
Rogers&
Tracy, 120 South La Salle Street,
announces
the installation of a
direct
1800
"10
'20
'30
'40
•
'50
Irving
'60
Trust
*70
"80
*90
1900
*10
Company of New York
'20
"30
*40
*50
1800
'10
*20
'30
'40
*50
Irving
'60
Trusl
*70
'80
'90
1900
*10
Company of New York
'20
'30
'40
*00
private
wire
to
their Los
Angeles correspondent, Edward J.
Bourbeau & Co., 510 South Spring
Street.
FINANCIAL CHRONICLE
THE COMMERCIAL &
(2366)
38
aproximately wltn the end
to Dec. 31, 1946,
cides
Grounds for Immediate Tax Relief
do
(Continued from page 6)
tax
to
icuuvuua
operations, hign
of active business
level
incuiite nance
me
employment, and
flow
of
national
liberal
a
Appar¬
income.
we
reuucuon
until signs of a
recession appear,
high.
employment,
tional income
second poirit to be
me
made in
this connection is that we are noc
facing
choice between debt re¬
a
of
duction
and
outlook
The
reduction.
for.the
tax
Federal
receipts
do both. These
is such that we can
terrupted, in the face of present receipts are now running at rec¬
ord peacetime levels, because of
high tax rates.
Our view is that definite stepsv an unprecedented peacetime na¬
income.
Again we must
should be taken now looking tov tional
emphasize our proposition that
the support of employment and
production in the future. It will
be too late, if tax reduction is
deferred until positive signs of
a
recession are visible.
A tax
provided for
reduction such as is
1
in H. R.
amended cannot be
as
expected to have an instantaneous
effect. In the hearings before the
and
Ways
this
bill,
Means Committee on
Secretary Snyder ad¬
mitted that something like a year
required for the reduc¬
tion to develop its full effect. This
would be just as true if the re¬
duction were to be made at the
would
be
onset of a definite business reces¬
it would be under
present
conditions. In advocating this step
sion
as
looking ahead to the
now, we are
.
business situation
it may be
as
a
year or so
from the present time.
There
be no assurance
can
to
as
what that situation may be then,
but
is
testimony
that
effect
the
lacking
to
slackening
not
some
be expected. The Council of
Economic
Advisers, in its first
may
have
we
the
shall
we
if
date' in the fiscal year
To
the
anchor
substantial
the
in
provided
extent
amended,
as
that
event
will
business
a
a
windward
to
cession is brewing.
in
be
It is
re¬
our con¬
1947
Federal net receipts have been
a
rate which indicates a
the
at
total for
$41.5 billion.
Assuming the continuance of such
a rate in the fiscal year 1948, un¬
of
year
der present
tion
some
tax rates, the limita¬
expenditures
of
even
to the
ceiling of $33 billion, as approved
by the Senate, would provide a
margin of some $8.5 billion. The
loss
revenue
1
H.R.
under
as
amended is estimated at $3.8
lion
bil¬
annually. Hence the Federal
receipts, after enactment of
net
H.R. 1
amended would be $37.7
as
billion, which would make avail¬
debt reduction $4.7 bil¬
able for
lion under the Senate
expenditure
much in
an amount
excess
Senate has
that which the
al¬
minimum for
this purpose. In the event that a
conference ceiling were to be set
ready
at
voted
as
a
amount less than $33 bil¬
some
lion, the
available surplus for
debt payment would be corre¬
spondingly greater. We hold that
payment of from $4.5 billion to
$5 billion on the debt in the fiscal
a
1948
year
uemand.
would
be
this
connection, the Presi¬
dent last August stated that "one
the
of
"is
than
more
inflationary
also
He
particularly
of
pressures
Federal
reduce
to
tures."
means"
effective
most
reducing
expendi¬
"it is
that
stated
the
that
important
Federal Government not compete
with private demand
for items in
short supply."
These words are
as
true today as then.
Yet, the
Government is now spending, and
contemplates spending next year,
but little if any below" the rate of
last
which
condition
The
call
we
inflation is the result of the great
bank credit in the
of the war financing. Re¬
of
expansion
course
this
from
situation
be
can
had either by an immense
increase
production, which would cor¬
rect the distorted price structure
by adding to the supply of goods,
relief
the
or
had
be
can
by
re¬
versing the process of bank credit
expansion, which would diminish
the aggregate of purchasing power.
I would like to quote from a re¬
cent
discussion
of this
subject
which
issued^by a group of
was
experts headed fefy Randolph Bur¬
both bank deposits and
circulation increased
with the rise of government bor¬
in
rowing from the banks, or to put
it the other way, with the rise of
bank
investment in government
securities.
the
this
of
supply
increase
was
war¬
by
substantially higher
of business, employment,
levels
and
Part
money
ranted
However, during
supply in¬
creased much more rapidly than
did the national income.
In the
payrolls.
the
war
money
twenties, money sup¬
ply (demand deposits and money
prosperous
circulation)
in
third
about onenational in¬
was
annual
the
of
at
the Government's purpose regard¬
hand would be too late. Moreover,
it would be dangerous, since we
ing debt redemption, and in the
about three-quarters of
soundness of the values which the
national
should be obliged to worry along
for some time through the reces¬
debt
sion
promote
of action
ment
matter
until
until
on
recession
the
the
postpone¬
this important
a
is
reduction
tax
had
developed its beneficial effects.
We know, from experience, that
things
in even
year of depression tendencies.
many
one
can go wrong
We consider it the wise and pru¬
dent action to be prepared in ad¬
for
vance
such
Therefore,
those
duction
contingency.
disagree with
a
we must
who
think
is
that
tax
no
at this
necessary
re¬
enough to sustain the confidence
of the people in the integrity of
relief
off
can
in
assurance
as
tax
give against
the
levels
a slacking
employment,
of
production and national income.
duction and the level of national
income from which sufficient
enues
the
general
as
derived
basis
a
of
High Taxes and Inflation
equal force against any and
changes, and not merely
as
and
to
hence
have,
will
they will
and invest less
not
agree
would
this
size
of
spend.
the
emphasize
shall
be
able
toward
more
two
The
to
the
points
is
accom¬
ultimate
more
more
im¬
portant that we be able, over a
period of years, to make steady,
regular payments on the debt than
we
take such action for
and
so
which
then
will
point
dry
face
up
where
must be suspended.
tention that
tax
a
year
ysis.
In
opinion, it is an illattempt to justify an
disguised
Executive
budget which is en->
tirely too high.
It is true that
taxpayers will have less income
to
spend—and save—if taxes
because
That
Government, in¬
stead of the taxpayer, is doing the
spending.
This is just as infla¬
tionary as private spending. Under
present circumstances, it is more
so
the
revenues
and manpower
debt
payment
duction.
our
con¬
Government's
now,
will
low.
are
are
the
recession
relief,
to
our
a
It is
for restoring
effective method
normal balance is to reverse
more
the
a
by which the money
process
supply
increased during the
in other words, to follow
was
will
that
reduce
bank
10V2% cut. It fol¬
lows, therefore, that H. R. 1 as
amended does actually moderate,
to the extent of the 10% differ¬
ential, the relative burden of tax¬
ation
ers'
because
it
diverts
from civilian
Stated
money
materials
use
does
pro¬
differently,
the
of theiaxpay-
not
reduce
the
the
on
The
small
charge
been
who
have
should
incomes.
unfairness has
farther, by some,
of
carried
that
demanded
there
merely a liberal
percentage cut in the tax at the
bottom of the scale, but a com¬
plete
exemption
of
additional
been lower.
amounts of income at the bottom.
banks
the
I
on
turn
larger scale than
a
have
would
been
made
realistic
in
Secretary Snyder
and Means Com¬
be a conmisunder¬
of
across
the
to
of
appears
degree
not
first
the
is
charge that
an unfair
amended
as
Bill
Unfair Tax
an
is
The question of fairness or un¬
fairness
taxation
in
for they represent a re¬
densome
duction
always a
are
bur¬
is
Taxes
matter.
relative
the
of
which the
income
taxpayer could otherwise use for
his own consumption or invest¬
ment
Taxation
purposes.
portion of each
taxpayer's income is to be spent.
We all recognize the necessity of
cisions
to how a
as
this
sacrifice
paid
of
pf control over a
our income, but it must
income
of
decrease
,
taxpayers ;
.
the board would reduce the
across
number of taxpayers
and the
by 10,528,000
by over $3 billion.
In the exhibit was a chart which
revenue
showed
surtax
first
the
that
x
$0-$2,,000 of taxable sur¬
accounts for 72% of
bracket
income
tax
totaLtaxable income, and for 56%
of total incoirie tax yield, at cur¬
These
indicate
data
quite
con¬
clusively that it would be impossible to grant as much tax relief
have asked for, if any re-
duction
all
at
be
to
were
•
.
scale
at the bottom of the income
as some
„
levels.
income
national
rent
made
.
,
elsewhere in the income scale. We
brought out, in our earlier i
Of the general objep- r
jclear that the greater the
be
would
board
in¬
an
exemptions
in
$100
by 4,728,000, and would diminish
the revenue by $1.65 billion.*
An
increased
exemption
of
$200
means
else makes the de¬
some one
that
shown
was
number
the
bill, in that it gives too little
that
it
crease
1
R.
tax
statistical exhibit attached to
a
before the Ways
standing involved.
The
the
of
net incomes.
on
advanced require par¬
sideimlle
H.
dis¬
the statement of
mittee
1.
tax
a
un¬
an
the
and
incomes
of
operation of
on
of
that
there
H.R.
rest-
conception
attention, because in each
ticular
not
demands
tribution
In
/
criticisms
principal
have been
case
These
been
that ' have
amended.
be,
spe¬
the tax reductions
H.
R.
1,
as
against
incorporated
Two
had
necessary
to some of the
now
criticisms
cific
pro¬
have
one's
over
discussion
portion
of
income
aimed
this
in
tax.
greater, the impair¬
ment of the incentives to get in¬
expect it to be
a
strong, positive advantage for
the economy as a whole. We be-,
lieve that its enactment will con- !
control,
the
come.
J
In the
of
be
at
whjich the private owner has no
tives
to
that
measure,
we
.
,
no
basis
by
any
relative
to
nature and
the
of inflation
cause
is that re¬
which^.to determine,
much
from
small
than
large
just
"fair"
'iti is
morea
to
from
a
,
the
all
war
rates
tax
advanced to levels that must
regarded
unfair
as
by
period,
postwar
any
fairness.
of
standard
the
for
reason¬
In the
of the individual income tax,
the
trates the tax relief at the bottom
of
the
volume
of
bank
credit.
By
-
progression of tax rates has
steadily steepened in the
candid
the
sider
1945
without
Act
scale
indicate,
have
we
that this tax rate
namely,
come,
hensive, task
total
that
than
other year or so.
after*
an¬
High tax-rates,
such, will not diminish the in¬
And I must point out that,
although (the President's budget
for 1948 contemplated the reten¬
tion of existing tax rates, the pro¬
vision for a surplus in that budget
much
was
smaller—even
after
restoration of wartime excise rates
and
rates—than
postal
is
increases
recommended
intent
on
this
in
Congress
providing.
It is possible, however, that the
present
tribute
tion
high tax rates may'corir
to
the
these
rates
This
1 enters
gress
and
H.
1
oppose
tion
the
as
'a
basis
cut
across
retained
To
the
private
June
bank
30, 1945,
borrowing.
a
of
From
date which coin¬
their
of
hold
opposition.
may
a
20%
the board would have
precisely
extent
so
the
ef¬
same
that
acceptable,
a
20%
cut
this
in
or
the
then
the
also
unfairness
1945
relation¬
must
rates
re¬
be
degree of
regarded. Whatever
be
increase
they
fective progressive relationship as
now
exists under the 1945 rates.
fairness
marked
are
who
tax reduc¬
fully cog¬
NAM's recommendation for
financing plans of business. There
a
ad¬
an
revenue
as an
as
the flat 20% cut would
involve, yet an additional exem
tion of $200
would be utterly in¬
adequate as a measure of tax re¬
lief for the middle and upper in¬
comes.
Relief to Middle and Upper
Incomes
there
also
attadc
be
given to the middle and upper •
since the present high'
incomes,
level of
employment and national
income demonstrates that there is
lack of venture capital. Hence,
no
it
is
argued, there is no need to
on the larger incomes
reduce taxes
in order to
permit greater savingsevident, is
This contention, as is
a
companion piece with the argu-
reduction provided at the
If
no
relief
at
is
all
bottom.
required or.
warranted for the higher incomes
at this
more
time, then there would be
leeway for relief at the bot¬
tom.
cede
V
.
These
arguments
that
little
.
,
.
to con¬
saving is
seem
or
no
possible out of the larger income^
under existing tax ra%Rs. This is
so,
perhaps
to
than is realized
a
by
greater
extent
tho^e who lay
*Hefft-ings before the Committee
on
Ways
burden after
pp.
32, 33."
20% cut.
{
ment that there is insufficient tax»
exist in the distribution of the tax
a
of
basis
against the specific content of H„
R. 1 as amended is that it goes;
too far in the amount of relief to-
may
would
second
The
severity of the tax
other purposes as
has
been
time
Those
rates, but they are evidently pre¬
pared to subordinate all questions
of fairness or unfairness to such
of
upon
adjustment
on
of the
is
have
tax
action
this
at
nizant
ship
may
of
amended.
as
any
sults
which
the ; compre¬
upon
•
revision. It is not proposed in
R.
inflationary situa¬
effect
'be
revision must
general
deferred, however, until the Con¬
the
through
moderate
increase of $200 in
exemptions across the board would,
cause
almost as great a loss of
with
agreeing
within
lion
figures just quoted
even so
the
of
scale must be revised.
budget total of $31.5 bil¬
and
even
within " a
much
v
extent
substantially propor¬
elsewhere
impos¬
the
As
sible.
an
relief
tionate
person can con¬
rate
tax
the conclusion to which
the spending
a
makes
that
to
scale
been
effective control of
for current purposes
it would be possible to provide a
surplus revenue for debt payment
and
proper
income
the
justment
income.
During
were
be
pro¬
absolute//standard.
take
able
the
scientific rule in
on
how
case
from
case
r
evi¬
conclusion
Our
flation.
is
It is far
money
We do not agree with this anal¬
man¬
first
had
high than if they
a
line with prewar experience. Un¬
til that stage is reached, the only
as
that the
tional income.
to
the
smaller
reduction of the public debt if we
can maintain a
high level of na^
or
ready
public
connection.
we
plish
that
as
the
debt and the problem of its
%
be
on
agement are serious matters. But
that
able
the people, as
some
taxation0|ience there is
period
a
supply of money and
volume of business more in
taxpayers
We
in
The under¬
amended.
lying thought appears to be that
by taking away more of the cur¬
to pay high prices as they would
be if taxes were reduced and the
payment
business concerns to borrow from
ful if any
spend
large
degree, to secure additional work-,
ing capital, 'a necessary requisite
to an enlarged scale of business
operations. It is logical to assume
that the depletion of cash by the
heavy taxes on both business and
individual incomes compelled
tionary at this time. The infla¬
tionary pressure resulting from
the expansion of bank credit can
be reduced only by contracting
now
debt.
resorted to, in large
was
ing the inflationary situation. The
argument as it is made applies
taxpayers,
tax rates
high during this period of un¬
usual prosperity in order to make
rowing
a
30% cut,
large
incomes
$302,000 would
few
above above
series of war tax acts. It is doubt¬
be
should keep
receive only a
private bank bor¬
ducing taxes would not be infla¬
tax
receive
bank loans. The
useful in combat¬
with
would
those
gressive
the yearly
*
the
tween
the
are
exists. The small taxable in¬
comes
no
dence
high taxes
steepening of the tax rate
progression
beyond that which
now
and
holdings of government securities "
this time is that
4
a
There is
*
of 2 years, the
expand sufficiently
reestablish
relationships be¬
tax
reduction at
volve
to
"Over
A third general proposition that
has been set up in opposition to
is that
we
re¬
passed
economy may
*
income.
volicies
rent income which
a
assure-
debt
amended
as
th& individual in¬
tribute to the maintenance of em¬
come tax, we hav£: adopted, as a
public policy, th&fprocedure of ployment and production in the',
future.
But such results cannot
taking relatively jpaore from the
be expected, if the bill concenlarjge than from the* small income.
war, or,
opposition to the immediate
enactment of H.R. 1 as amended
we
to
the
of
rev¬
demption policy.
to H.R. 1
proposition
that has been advanced
be
can
maintenance
come;
also
fully as important to
the confidence and the
sustain the volume of pro¬
we can
all
Redemption of Public Debt
Another
hold
We
is
time
account of the extraordinary
prosperity which we are currently
experiencing.
On the contrary,
this is the time to act, if we are
provide such
it
well-being of the people as work¬
ers, as consumers and as investors,
for it is only as we do this that
on
to
represents.
that
1
rowing has precisely the same in¬
flationary effects as the expansion
which occurs through government
"In sum,
money
the
bor¬
relief to those with small incomes.
gess:
in
credit through private
bank
of
during the uncertain thir¬
ties it averaged slightly less than
one-half.
The war raised it to
tention, further, that
panded by $7.6 billion. It is well
understood that an expansion of
As H. R.
the House, however, the percentage reductions of tax actually in¬
the tax rates and the tax burdens
Summer.
lief
reduce taxes now.
we
of
to
prospect
continue making
good-sized payments on the debt
ceiling,
1
better
a
of being able to
cember, referred to the somewhat
artificial character of the present
now,
H.R.
have
goods
Therefore,
by not reducing them.
report to the President, last De¬
prosperity and expressed the view
that this prosperity could not be
expected to last indefinitely. It is
our
contention
that
tax
relief,
better chance of main¬
a
national income by
reducing taxes than we shall have
taining
for goods; but it defi¬
limits trie production of
wdh which to meet the
nitely
the fighting,
the loans of commercial banks ex¬
demand
In
J
I
production and na¬
will continue unin¬
the current rates
mat
bcueve
cieierred
oe
snouiu
Currently have man can be
accomplished by keeping tax rates
ently those who contend that the
.tax
extend
and
sustain
to
more
the high level of prosperity which
of
Thursday, May 1, 1947
and Means on H. R.
1,
.
.Volume
stress
165
on
Number 4590
THE COMMERCIAL & FINANCIAL CHRONICLE
economy of consump¬
tion without much
thought about
could
how
current
an
production
occurs.
We do not minimize the
tance
of
impor¬
consumption.
But, of
equal importance, is the health of
the producers of the nation
the
—
"
little
the
ones,
new
and
ones,
late
then
be
amounts
income. This cannot
hap¬
single
if
turers.
has
become
must
precede
to produce.
Capacity to produce and invest¬
in
ment
production
are
and
one
the same thing.
We imperil the
-capacity to produce whenever and
however
the
imperil
we
ability
and the willingness of individuals
to
and to invest.
save
Must
Permit
Only
tial
to
amounts
risk
Save
per¬
substan¬
save
out of income, and
savings in new and
such
untried
to
system which
mits individuals to
business
ventures,
will
protect and enlarge our capacity
to produce as a nation.
The
source
savings available for such pur¬
poses
is, therefore, of primary
to
concern
nation.
have
had
NAM's
the
all
In
of
people of this
of
this
fact,
prepared,
study
a
Research
we
by
Department,
of
of individual savings
sources
and
the
view
the
effects of the
individual income tax
present
savings.
on
It is appended to the formal state¬
ment
brief filed with this Com¬
or
mittee
findings
.
.
1.
Monday.
on
Briefly, its
are:
Tne
of
rate
the
< V/,
Need
As
that
capital
v
,
saving like the
rate of taxation is progressive. In
ether words, the greater the indi¬
vidual's income, the greater the
'
percentage of his income which is
saved.
2. The nation is
nearly entirely
dependent for new venture capital
.on savings of individuals with in-
be
for
we
more
these
rea¬
sons:
First, there will be
a steady net
500,000 to 600,000 persons annually to the total
of workers through population in¬
addition
of
some
Provision
crease.
of
jobs and
op¬
of
capital
new
the
into
varied forms of economic
activity.
Assuming that it will require
anywhere from $2,000 to $10,000,
according to the type of industry,
to
provide
job
a
for
each
addi¬
tional worker, we shall have, in
the growth of population, a steady
demand for
some
billions of addi¬
tional
investment annually while
population growth continues.
the
Second,
there
are
many
new
fields of enterprise which can and
will be developed when capital is
available
for
the
and
when
risks
the
involved
rewards
are
once
adequate by reason of lower
tax rates. There was a time when
more
some
lest
were
seriously
had
we
reached
concerned
the stage of
3.
At
taxes
'the
present,
consume
per year.
income
personal
approximately half
savings of the na¬
potential
tion.
And
4.
Of
riot
.
exceeding $10,000
comes
mature economy. The war dis¬
posed of this myth and there has
marked falling-off
a
number of
this
in the
those who still preach
doctrine.
It
is
rather
now
savings
which
are
present
at
away
the
great bulk are not in a form which
makes them available for financ¬
ing
enterprises
This
means
taxes
involving
that personal
today
risk.
income
nearly
'.all. of the potential savings
which,
except for the taxes, would be
available
consume very
risk
as
or
venture
cap¬
ital.
Thus,
.
out
of
income
either
saved in
relief to
be
ent time
.brackets
there
have
to
in
as
been
tax
The
the
•
by
reason
of
no
employment
sense
is
no
an
situation
indicator
of
is
the
need which the economy now
has,
will have, for new supplies of
or
.capital.
,
•
,
We have already cited the
of bank loans, an ex¬
expansion
pansion
the
which
risks
living.
to
some
extent
would not have occurred had tax
a
unduly
of
of
tax
and
as¬
This
rise
will
de¬
be
the growth of out¬
upon
result which in turn
a
ent
additional
upon
vestment
is depend¬
capital in¬
worker.
per
The
ex¬
panded capital investment will be
required both for the new work¬
who will
all
members
force. In
ot
izontally
mr capital equip¬
improved both hor¬
vertically. That is,
and
must
tity
ijpk present labor
short,
ment must be
we
along, and for
come
gain
both in the
fact in
•
of
investment
and
quality.
Increasing
output
pends
on
more
tools
its
in
and
de¬
better
tools.
earlier
reduction and the accumulation of
conclusion, our arguments
be briefly summarized.
First,
we
have shown
that
the
operation of time lag requires ac¬
tion on tax reduction in advance
the
conditions
such reduction becomes
ency
respect
This
measure.
with
to
the
is
an
emerg¬
true
both
influence
of
tion that the tax reduction should
be made now.
Second,
we
.have
shown- that
system
and
of
at
current
the
control
income
into
new
capital
considerable
time
'.would be required, after tax rates
reduced, for individuals hav¬
ing incomes from which something
were
r
relief
be
to
sought
cial
R.
1
of
act
(3)
economic
upon
over
total
and
investment
announced
with
Five
securi¬
dealers
election
of
was
offi-
construction
$3.3
,
attention
as
The
program
form—probably will—but
Ewing
garding
qualification of new se¬
issues,
legislation
and
affecting the in¬
vestment industry. Offices will be
curities
decisions
of
the
state
new
Greene,
Greene
&
John D. Burge,
Ball, Burge & Kraus, Cleveland;
Jay
Quigley, Quigley & Co.,
Cleveland; Richard A. Gottron,
Brock,- Dayton;
sufficiently broad
and
incentives
and
invest, and to take the risks
work,
to
save
system.
(2)
It
extract
mulating
in
and
some
and
standards
for
Bankers have found
it
hazardous to
especially
loans
on
frozen
of
standards such
set
for
canned
bankers
some
foods
in
make
the
In
lost
ab¬
those
as
goods.
have
fact,
substan¬
tially on frozen food deals. It's
largely in their behalf PMA is ex¬
pediting frosted yardsticks.
*
other
some
Sterling
setup.
So
temporarily,
at least,
subsided
into
H:
H«
"
H:
Veterans Administration offi¬
cials
perplexed by the rate
are
at which
GI business
defaulting.
60
such
One
loans
backed
loans
out
of
which
with
are
every
the
VA
government
a
has
loans
participated
totaling
tina is
try's
*
indicated
export
S.
with
Argen¬
by
that
to
at
is
sell
coun¬
wheat
current
pressing
wheat.
pfdhners
offers.
for
more
United
States
can't fill their
say we
But
neighbors
ern
and
want
aim
not
dark,
frus¬
diplomatic
very
scowls southward.
*
Frio,
a
who
have
been
Brazil,
satisfied with
by SEC that
legal authority to regu¬
no
late such issues.
California's Re¬
publican Representative Hinshaw
told
the
"Chronicle"
the
SEC
.
.
committed
has
.
"Since
itself
in
writing, we're ready to drop our
bill categorically exempting mu¬
nicipal bonds from SEC jurisdic¬
tion."
off
*
*
,
,
year's
third
will
result
quarter;
limited
be
relief from what would have been
acute
an
bill
78
of
shortage. The abeyance
through Congress in
passed
days, record time for
major legislation.
H:
piece
any
«H
*
Government people won't pre¬
price
is
to be
shaped
by
sus¬
pension of the import tax. They
generalize the
a
price
jump
may
of cents for
couple
thereafter
while,
a
down
come
by
Determining factor
penny.
a
ap¬
to be the amount of profit
pears
Nevada's
*
*
Democrat
mount
issue
a
para¬
from napping
Re¬
a long breath for the com¬
then read the following ex¬
tract from testimony before the
Finance
to
audit
new
a
have
Congress
of
government functions
national
to
...
Committee\this
S. Chamber of Com¬
Ellsworth C. Alvord
ages
Chairman
Federal Finance
merce
.
record
.
.
"Short¬
inventories
decreasing,
are
are
at
are
leveling off, prices are wob¬
bling, costs
the
to
high levels, orders
increasing,
are
ing forecasts
variety
earn¬
less bright, and
are
entire economy
a
is vulnerable
unfavorable
of
in¬
fluences."
*
*
June
30
*
\
legislation
on
export
tinuing
con¬
^controls after
hazy
too
remains
for
projection at this time.
publican leaders by introducing
legislation
ex¬
H*.
Take
Outlook
Senator
*
mas,
14*$
McCarran has snatched
Government
Chilean
H:
|
*
make
1949 and 1959.
are
written admission
it has
alkali
amortizable
this
Immediate
week by U.
Credits for Brazil
Cabo
until
Senate
:i:
municipal bonds
$7,500,000
paid
claims aggregating $680,000
higher
international
our
collectivists
south¬
our
Export-Import Bank
plant by the Companhia Nacional
the
has
tracts from export copper sales.
Congressmen
an
de¬
against
claims
VA
Of
in
Argentine grain.
Columbus,
in Day¬
of
ended
the
pressing for legislation specifical¬
ly prohibiting SEC from touching
construction
have
binsv that the French must have
six
nort-Import Bank approved three
59,450
Real beneficial impact of the
legislation suspending the 4-cent
copper excise tax two years isn't
to be felt by American fabricators
*
tangle
reluctance
France
members
WASHINGTON—(Special to the
"Chronicle")—Last week the Ex-
in
$187,000,000.
dict how the long range copper
Another
si:
between
was
*
Federal
in
at
It
so.
sis
frozen foods.
trated and
ten
:J:
Marketing Administration is for¬
prices
Alcalis
tape.
outfit that acquired the furniture
732
of the organization, thirty are lo¬
cated
in
Cleveland, twenty-two
Toledo
this
for
Here's important news for
bankers.
The
Production
U.
seventy-five
bat
to
go
sis
i
Cincinnati; Clair S. Hall,
Clair S. Hall & Co., Cincinnati;
Willard C. Weiss, Weiss, Work &
Co., Cincinnati.
de
glimpse
red
as
of
and
block
one.
Co.,
totalling
Federal
against the
conglomerate
corpora¬
tions, FTC truculently charged
that Sterling Drug, Inc., had even
become so conglomerate as to buy
a furniture company.
That wasn't
evils
faults
&
the
well
as
government.
for
for
faces
960
Craft, Collin, Norton &
Co., Toledo; Erbe M. Bancroft,
Stranahan, Harris &
Co., Inc.,
Toledo; Charles F. Conners, Pohl
in
H:
recent broadside
farm
M.
Cincinnati,
*
around
to the
Commission for a
these,
Gottron, Russell & Co., Cleveland;
the
for
sales
VA
the
sence
Columbus.
group, in addition to officers, are:
B.-
a
subcommittee
mid-year
campaign.
priations Committee. Watch the
its members with information re¬
John
before
wares
House
must
continuing funds
from the skeptical House Appro¬
Boles
of Westheimer & Co., Cincinnati,
vice-president;
and Howard I.
Fullerton & Co., Columbus, sec¬
retary-treasurer.
The organization will provide
Directors
It
IBA
time
guarantee has already bounced.
must
T.
nderhaar
in
(1)
in
in
ex¬
demerits of
a nd,
presi¬
maintained
its
tough ob¬
in
bonds.
comes
Treasury's
the
fall
banks
savings
capitulation
to
created to X-ray the merits and
1
dent; Harry C.
court
two pretty
courses.
special
other
ploiting
in
run
parade
Of
survive
some
-
with
the
nagging
bankers
insur¬
crop
may
must
,
been
investment
line
pro¬
For months the Treas¬
has
ury
IBA committee to
ferocity
apology.
* i
government
ance
Shepard &
Company,
Don
Hs
to
*
savings bond
FTC
sjs
Haw ley
o
along. That
may come
won't be much.
U.
motion.
a
on
presi¬
e v e
S.
in
In
stacle
vice
an
aid
proposing a
Missouri Valley Authority similar
to TVA are merely
opportunists—
not optimists.
Actually, they know
legislation
H:
mation of
red
duced
suffer
failed
Elation at the Treasury De¬
partment marks the belated for¬
Trade
have
will
Republicans
4:
Drop
>fc
bill
think of it first.
at
O. Shepard of
C1
because
billion.
Robert;
t;
McCarran
intro¬
pany, Columb u s,
was
n
*
Senators who
Com¬
named
and $3.6
bag. They chucked their bill into
the hopper simply to grab such
Ohio, Inc.
.
Ewing T.,
Boles, of The
de
downward
money
Dealers of
Ohio
esti¬
non-resi¬
their pet project has little chance
of nosing into the Federal
Invest ment
r
private
*
H:
H*.
*
Prospect for a business census
next
has been clouded by a
year
eliminate duplicating and over¬
Senate committee
lapping Federal activities
In New Location
highway transportation cepsus be
to
PHILADELPHIA, PA.—Paul &
in its application to all
taxpayers
to promote the economic motives
to
1947
between
of the
cers
technicians
from $3.95 billion to somewhere
COLUMBUS, OHIO—Formation
ex¬
exercising.
be
of
the
and
have revised their earlier
Of Ohio Formed
ties
shrinking,
industrial
coax
Department
mate
state organization of
residential
-
is
\
-
acceptance. Regardless of merit,
commer¬
commercial builders to up oper¬
ations and employment.
Com¬
Investment Dealers
a
non
likewise
would
dential
penditures which the Congress is
in lent
that
building
statesmanship.
of
discourage
industrial
building.
(1) fear a residential
(2) have official esti¬
merce
constructive
By
and
mates
ginning toward the release of the
productive energies by which this
popular demand can be met. Pas¬
sage of H. R. 1 as amended will be
an
to
slump;
as
significant be¬
a
turn.
Now they
provided
levels
time should
A
tax
the
on
propaganda and priority restric¬
tions, Truman's trustees have
com¬
Brazilian credits: (1) a $6,650,000
tax reduction in
sustaining em¬
ployment and business activity in railway equipment credit for three
years
to
the
Electrical
face of recessive
Export
tendencies, and
Corporation, for the Sorocabjiaa,
to its influence in
establishing the
Railway; (2) a three-year credit
under
which
new
atmosphere
of
$1,500,000 to the Whitcomb
supplies of venture capital will
be fortijjfcoming. It is our convic¬ Locomotive Co.; and (3) a credit
savings'and the conversion of the
funds
economic
which
under
Third, we have shown that the
tax reduction to be made at this
equipment.
the
is
worm
ton.
saved
f
The
seven
Conclusions
there can be both tax reduction
The important
this connection, as in our -and debt reduction, in view of the
discussion of the bearing productivity of the Federal tax
,of tax reduction upon future em¬
ployment and business activity, is
;the substantial time lag between
4the release of income through tax
of
tion
people want more and bet¬
things for use and enjoyment.
ter
quan¬
rates been lower.
■
(Continued from page 5)
The non-residential construc¬
Tne
V
39
Washington and You
the
even
munity.
enterprise.
put and productivity per worker,
of
reduction.
for venture capital
inadequate understand¬
ing of the way in which our complex economic system works. The
in
of
may
an
.present
that will not
pendent
income
only
a
small
savings accumulated
of
coming
Third, we all look forward to a
steady, consistent rise of our scale
proposed,
lower
have
need
-reveals
system
In
argument that there
present
or
the
improperly penalize those who
be
out of these incomes
the
spent
await
venture capital and of
be concentrated
some
would
.amount
:
have
clear that, if the tax
provided at the pres¬
were
heavily
.as
.
would
other forms.
It is thus
.
•
that
been saved and invested, and only
secondarily out of income that
would
production
more
ers
the
study leads to the
conclusion that high taxes on the
larger incomes are paid primarily
•
generally realized that enormous
possibilities
of new and better
sume
those
taxed
of
recipients will be
most fully served by a tax reduc¬
tion
policy which
benefits
all
a
been
.
.
interests
workers
new
to
earn
good
incomes,
build
homes, establish families, and live
comfortable lives is dependent, in
our complicated
economy, upon a
flow
funda¬
income
amended will be
future,
must
provided,
best
small
the
in the long run
through enactment of H.
•
Capital
the
to
there
more cap¬
'
•
for More
look
we
know
before
present
portunity for these
Individuals
tax
a
also, it will be too
delay until the future
we
ital.
Our leadership in the
capacity.
Here
taking steps to. provide
world is
wholly dependent on the
maintenance and expansion of that
emphasized
mental truth that
members
late
The thing that dis¬
tinguishes America is its capacity
have
we
must now
begin to make prepar¬
(2367)
enterprisev,In this connection,
the
year.
ation.
Production
of
overnight, or even in a
In stressing the need for
new venture
capital, we are look¬
ing to the future, for which we
pen
those yet to produce
anything, as
well as the established manufac¬
consumption.
saved, to accumu¬
of any size out of
Co., members Philadelphia Stock
Exchange and associate members
of the New York Curb
announce
adelphia
Street.
removal
office
to
of
Exchange,
their
1528
Phil¬
Walnut
central
our
will not be
manage".
state
That's
and
an
.
too
.
.
.
"so
functions
Federal
limit
that
.
government
big for
men
to
to foster strong
local
ideal
governments.
GOP
platform.
But having a Democrat publicly
espouse
it
may
embarrass
Republican steersmen into
the
non-
This may survive Sen¬
attached.
ate
proposal that a
sniping but will invite House
opposition
where
economizers
have already declared
business
study.
against the
Census
Bureau
places at $1,000,000 the cost of the
transportation check.
40
(2368)
*
*
.. -
The
The history
and
in
hourly
every
sched¬
pay
ule.
I would like to introduce at this
point
in
prices—including the
of
creation
the
wealth
new
are
(1) incentive to those who assume
the risks of building new business
price
of Federal Government—which
Essential elements in
production.
graphic picture of the rise
prices since 1939.
We hope prices will come down
a
some
—all
of the repayment of
great national debts contracted
during war periods shows that re¬
duction is brought about by the
creation of new wealth through
all
enterprises, (2) hard work by all
classes
of
population, and
(3)
thrift which makes possible the
as
will note, has risen 371% in
this period.
We are apt to forget that the
you
building of new homes and better
Government
takes
.
money
more
out to
them, and has a surplqs to
debt, its operations are not
inflationary but deflationary. That
retire
is
what the
Government is doing
and that is what it will still
doing after H. R. 1 is passed.
now,
be
This is true
however
only so long
adheres to its pro¬
Gongress
of cutting expenditures.
It is true that people will have
more
to spend if their taxes are
as
gram
cut.
On the other
hand, the Gov¬
ernment will have less to spend,
part—true, a major part—of this
Debt or Tax Reduction
by the same amount.
There will
particular problem. Out of a total
not be any more money in the ag¬
national income of $178 billions,
It is for this reason that I have
the American people are paying
People will be
said that the question is far larger gregate to spend.
out for government—at the state
than "Which Should Come First- spending their own money, for a
and local, as well as federal, lev¬
instead of having the
debt reduction or tax reduction?" change,
Government spend it for them.
els—the staggering total of $52- Earnest
and
intelligent
people
In
another
billion. (JThis is a back-breaking have been confused over an argu¬
sense,
also,
the
charge that must be met before ment that has been blown up, out argument that tax cuts would be
inflationary overlooks major con¬
any taxpayer has a single dollar
of all proper proportions, in my
siderations.
The buying power of
to spend for his own account.
It opinion.
•
*
,
vast groups of the population has
is a prior lien on the whole pro¬
The
general feeling that the
ductive energy of the American debt must be reduced during this been cut by price increases. Labor
people.
If we can't reduce that period of prosperous business is demands higher wages to compen¬
Yet higher wages mean still
tax charge, at a time when busi¬ most wholesome. I heartily agree. sate.
ness activity is at the highest level
But to attempt to pay off debt higher prices and a further in¬
crease in prices must be avoided.
in the nation's history, we know without
relieving the taxpayer of
perfectly well it won't be reduced at least a part of his excessive tax Tax reduction to restore individ¬
ual
if business begins to slacken and
buying power helps people
burden is wrong.
It will defeat
unemployment begins to mount.
the very purpose we are trying to keep abreast of living costs,, and
We must start now, it seems to
thereby contributes to price sta¬
achieve.
me, to prepare against such ad¬
Let me illustrate how this prob¬ bility.
Federal
is
Government
only
living.
one
developments.
The prob¬
lem is not only financial and eco¬
verse
Federal
debt
it
stood
1930 it
$1 200
at
$650
was
interest.
Before embarking on this new
at 3%
World
War
I
Federal
safe
a
income tax
debt
reached its then peak for all time
income
shrunk to
Net
Entering New Business:
income
Interest
Total
Less
from
from
out3icis
investment
net
on
$22,SUU
tax
Spendable
The
in
was
six
years, the
business prospered, and a
healthy
Less interest
4.
5.
6.
from
$60,000
.2,500
7,500
$22,500
$22,500
$67,500
3,241
8,241
$14,259
$14,259
$14,259
$42,777
and
Total
Tax
$57,800
8.
Income
Payment
tax
aft'tsr
on
Here is the
would exist
same
situation
as
it
today:
on
(at
spendable income as
not gone into the
business)
After
man
paying interest on his
the $860,000 loan, each
of
would have net
cluding
'
to
they
his
income
income
from
(in¬
outside
sources) of $57,800.
After paying
his tax of $31,036, he would have
left $26,764.
Let us assume that
each man was willing not to in¬
his scale
crease
of
living, but to
keep his spendable income
level as before
same
business.
at the
entering this
He could then pay back
$37,800
$113,400
20,000
20,000
60,000
an
amount that
we
cause
it makes the.
I believe
would
is without merit.
an excuse
$57,800
$57,800
$173,400
31,036
31,036
31,036
$26,7G4
$26,764
loan
today.
after
a
the
for
few
a
crease
his
scale
of
Suppose
for your
you
and
f
On the very optimistic as¬
sumption of an annual return of
years;
(3)
12% for every one of the 23 years.
It was^this combination of
op¬
portunity with the ability to ob.
r
>
>
:
a'
f.
another
still
12,505
tion method proposed under H. R.
1 that is in need of clarification.
across-theis
made that this benefits the larger
taxpayer more than it does the
small taxpayer. By examining the
smaller cut
a
in
the
top
-
offered
$1
first hour's work, 750 for
the second
chart which I submit herewith to
the
hour, and 150 for the fourth hour,
how
long do you think
Yet
work?
this
RATIO
LAW
TAXES
Present
Tax
under
H.R.
$14,259
Law
H.
R.
1
$5,000
Ratio Between
Taxable Income
Taxes Paid
«'
2.75
$380.00
$1,045.00
304.00
1
836.00
2.75
$5,000
Tax
under
Present
Tax
under
H.R.
Law
$10,000
Ratio Between
Taxable Income
Taxable Income
Taxes Paid
$1,045.00
^
1
under
Present
under.
H.R.
Law
;;
-
2.40
Ratio Between
Taxable Income
Taxes Paid
$2,508.00
1
•
$20,000
Taxable Income
Tax
Tax
2.40
$2,508.00
2,006.40
836.00
$10,000'
2.75
$6,897.00
.
2.006.40
-
2.75
5,517.60
$20,000
under
Present
under
H.R.
$30,000
Ratio Between
Taxable Income
Tax
Tax
Taxable Income
Taxes Paid
Law
$6,897.00
1.82
$12,559.00
5,517.60
1
10,047.20
1.82
$20,000
Present
H.R.
Tax
under
Tax
under
Taxable Income
$18,753.00
10,047.20
15,002.40
$50,000
Ratio Between
Taxable Income
under
$12,559.00
$40,000
under
Tax
$40,000
Taxable Income
Tax
Taxable Income
Taxes Paid
$18,753.00
$25,479.00
15.002.40
20,383.20
Law
1
Present
Lav/
1
H.R.
Ratio Between
Taxes Paid
1.49
<
1.49
1.36
-
1.36
S2.000
under
Present
under
H.R.
The
which
$50,000
Ratio Between
Taxable Income
Tax
Tax
Taxable Income
Taxes Paid
Law
$380.00
theory of "ability to pay,"
underlies and justifies our
tax schedules,
has been
$25,479.00
67.05
304.00
1
20,383.20
67.05
place
abused.
For
Acts
Revenue
our
instance, under the
concepts
changed
purposes
of
socialistic
and
taxation
1938,
were
revenue-raising
from
to the
social ends.
1936
of
use
This
of taxation for
was
based
on
a
the
in
capitalistic
income
The
tax
system
bankruptcy
should be
have
of
our
economy.
been
policy
of this
evident.
now
Income taxes
scaled
pro¬
up
gressively to the point where they
virtually 75% of Treas¬
ury revenue.
This fact alone en¬
provide
tails
the
most
sequences
far-reaching con¬
which are worth exam¬
ining.
philosophy and has
no
THE HIGH COSTof LIVING
When
position
a
is
Government
the
1939 PRICES & 1947 PRICES
of
source
the
tax—that
tends
to
reached
is, com¬
one main
this
revenue—in
income
revenue
case,
of
source
become,
as
far
the Treasury is concerned, the
as
most
of all taxes.
Treasury
rapidly.
indispensable
When business slackens,
will fall
revenues
develops
a
between the
financing of Government spend¬
ing, proceeding at an unprece¬
dented rate, and the income tax
rates
required
to
sustain that
Similarly,
there
relationship
fixed
1939
$42,777
spending.
In other words, the
greater the spending, the greater
the necessity to justify the confis¬
catory surtax rates levied pri¬
marily against the business groups
of the country.
The result is that
the time never arrives when it be¬
1947
(MANUFACTURED
PRODUCTS
possible to make voluntary
Always
comes
reductions in such rates.
the
ceive
as
that
development has
been, particularly in new indus¬
tries, the surface has barely been
come
to
a
stop—if
of
halt—indeed to
of the tax barriers
only
one part
of
fiscal .program.
phases
r
The
How
fact
that
accompanied
effectively
tax
by
two
meets
much
revenue
would the
lose if all- in¬
actually
tax receipts on
is
reduction
Next,
the
let's
see
how really dis¬
criminatory 1 these
of the Government's fiscal
opera¬
tions which counts.
When the
any
revenue-producing
As
matter of fact,
and
.
I
i
I
)
wealth. as
expressed in the forip of inr
come,
or
against the country's
managerial capacity employed to
direct our industrial enterprises.
it is
\
argument
that tax cuts would be inflation¬
ary.
After all it is the net effect
r
;the
;
punitive levies against;
^educ¬
reduction
.debt
from
obtained
words, the surtax rates long ago
passed the point of diminishing:
returns and became, in fact, purely
Tax Reduction Deflationary
The
be
incqme over
$100,000
were
segregated froia
general tax revenues?
The an¬
swer
is $877 millions!
Jri other
come
phase
other
expenditure
are:
tion and debt reduction.
can
Treasury
uction
thre
a
Here
yields to the Treasury.
higher income groups^
not removed.
We must consider tax
preferred treatment, a view¬
find how
that
darning the flow of fresh capital
are
made that the
should re¬
completely the exist¬
ing surtax brackets have sucked
dry almost every available dollar
we
dead
a
is
groups
Next, let's turn to the inequity
this situation, as reflected in
tax
But that program will
some
income
point which is designed to receive
widespread political support.
Vast
scratched.
argument
lower
tain adequate
capital that made
possible the unprecedented devel¬
opment
of
our
whole
country.
v>
income
of
PAID
UNDER
AND
$2,000
under
levels
VARIOUS INCOME LEVELS
Taxable Income
Tax
relationships be¬
same
under the present law.
as
BETWEEN
PRESENT
AT
you will see that
proposed maintain
different
tween
essentially
UNDER
reductions
exactly the
would
you
is
Committee
the
hour, 400 for the third
(37,515
$14,259
miscon¬
percent¬
same
were
bad
as
is
ception regarding the tax reduc¬
.
give
cen¬
living for 23
There
Reductions
Second, be¬
persons
brackets.
tionary?
quarter of
tury, each man will have built up
his equity in the business, under
the following circumstances:
(1) By risking $387,000 of his
capital;
(2) By being content not to in¬
*
.
•
Across-the Board
board reductions. The argument
$80,29.?
12,505
sched-
This is the proposal for
has been raised Would tax reduc¬
tion proposed in H. R. 1 be infla¬
a
ules.
levy
we
present
lowest brackets and
93,108
repay the bank loan.
No bank in
the United
States would make
Thus
the
a
afford
can
under
for all taxpayers with the
exception of a larger cut for the
Before I leave this particular
phase of the subject, I should like
to touch upon one question which
such
is
age cut
or
$12,505 each year on his loan. At
this rate it would take 23 years to
*
reasons
but it is cer¬
tainly not a valid reason for op¬
posing tax reduction.
be
in
25,800
$37,800
20,000
Spendable income
share
Total
of $53.70%)
if
inflationary
It may
it
good program, first, because it is
and still retire debt.
$139,200
8,600
12,505
71.25%
amount
same
9.
Mr. C
$46,400
8,600
sources
;
loan
Mr. B
$46,400
$2b,7C4
the $57,300
tax_„
bank
of
its
economy
the claim that this program
be
think
I
better.
PRODUCTS
$46,400
return
at 3%
bracket
these
be
MANUFACTURED
$14,259
(tax
all
or
would
around the plant.
up
income
net
on
run
debt cuts with tax cuts.
For
good pro¬
some
other
a
whether
gram
happly little community grew
8,600
12%
suming
Assumption: Net income irom outside
effective
7.
a
bank loan
has V about
the
is
1
24,723
$57,800
business
on
If
R.
say
is ready
to turn downward, a further argu¬
ment
is provided for balancing
course.
H.
who guide
men
businesses to do when
pletely dependent upon
Mc. C
$20,000
2.50C
$37,800
Income
inflation
taxes
in
ask the
we
our
Total
Mr. B
Mr. A
1.
2.
the
what
whether
where
8,241
—*
less than
have
$22,500
expected
to, and did produce, a 12% return.
The three men paid of t their bank
loan
would
taxes
that while
wb should resolutely fight against
further inflation, we must
also
avoid
the
opposite extreme of
monetary deflation introduced by
too much or too rapid debt retire¬
ment.
There are now signs that
Finally, I would
is
$14,250.
$20,000
•
•
business
after
2,500
;
income
new
rates, their spendable
Mr. A
$tOO,OOOl--^_;^-..,_
income
his
of
$20,000
sources
ol
investment
$100,000. At today's sharply higher
of $1,070 per family.
Before
sources
$20,000, plus interest of $2,500
from
ago—
outside
from
income
net
of
family.
In
family. After
tne
each of these men had
venture,
is
family.
years
business
each, and borrowed $860,000 from
a
bank in their local community
per
per
it
saw
requiring a total capital of $1,160,000, three men put in $100,000
today
per
I
as
In order to enter a new
tax situation.
Our
business
work out some years ago.
nomic; it is psychological.
Down
in North Carolina, where I come
from, we found out a long time
ago that we could get more work
out of a mule by coaxing than by
beating. A bag of oats gets better
results than a whip.
Let's apply
this homely adage to our present
equivalent to $6,800
In 1940—only seven
affects
lem
question
bodied
from the people than it pays
away
next
the program of tax reduction em¬
Why Tax Reductions Immediately
(Continued from page 4)
basic element in every price tag
Thursday, May 1, 1947
THE COMMERCIAL & FINANCIAL CHRONICLE
^
-
f
)■
a
-
surtaxes
are
how, as a result, they fail
of
purpose.
these rates are
Volume
now
high
so
THE COMMERCIAL & FINANCIAL
CHRONICLE
Number 4590
165
if
that
income
all
above the $50,000 level were
the
after
left
payment of taxes,
accruing to the Gov¬
ernment would be only $382 milthe total
sum
In other
ions!
(Continued from page 7)
of
goods
100% after the $50,000 level of in¬
services, or nearly
more
than last year.
and
billions
But the gap
and exports
between our imports
will still be in the
the increased tax return to vicinity of $7 billions, which we
the Government would be enough
expect to close in the following
to
run
the
Government
about
ways: about $2 Yz billions of public
three days.
That shows, I think, and private gifts; about $3Y2 bil¬
come,
how
for
remains
still
little
the
But it
us.
expect to import about $9 billions
words, if the sur¬ $2
tax brackets were raised to a full
by our
protectionist
ourselves
trade
to
pay
they
We have
and
policies
it
we
-
impossible
for those
cases
tries
restrictive
own
made
some
much
too seldom realized
was
that
other
in
coun¬
back, however
have wanted to.
us
may
become' the greatest
now
creditor and lending nation in the
it has become absolutely
world;
lions of long and short-term
and
about
$1%
billions
loans; necessary that we increase the
tax collector to get from our pres¬
frorm volume of our imports. To con¬
ent high income groups!
drawing down foreign dollar bal¬ tinue practices which would make
Now I want to make myself ab¬ ances
and sales of foreign assets it impossible for debtors to serv¬
solutely clear.
I am addressing in this country.
ice our loans will mean that
by
myself to one particular phase of
our exports and our loans we will
Trade Volume Increased
this question: the taxation of abil¬
simply be divesting ourselves of
ity and energy; in other words,
Those figures contain in a nut¬ our wealth and property in the
the tax
I
earned incomes.
on
am
shell
the
story of both our diffi¬
and our opportunities in
plea for the rich. What culties
I do protest is a foolish and dan¬
world trade.
making
on
gerous
discrimination
which has
First it is clear that
managerial
no
tion, and rests solely upon a mis¬ ized countries of the world
chievous class consciousness. What
protest is not a tax on wealth
or
income but a tax on brains—
I
against the know-
stupid levy
a
how
and
the
managerial experi¬
ence
that
are
the nation's greatest
assets!
The enactment of H. R. 1
of
need
in
are
other products
and
food
which
only we are in a position
to provide. We ourselves are en¬
joying a level of national income
which
is
unprecedented
in
our
history.
The only
by the
practical limitation
on
exports of needed goods and
Congress in no way precludes a
services to other countries is the
thorough-going revision of our en¬
supply of dollars available to peo¬
our
Therefore I sup¬
tire tax system.
ple who want to buy our goods.
port wholeheartedly the program
In brief, the alternatives boil down
of cutting spending to the limit as
down to this: we can give dollars
voted by the Congress, of cutting
away; we can lend them; and we
taxes as
proposed by H. R. 1, and
applying to debt reduction the
surplus that will 1 result there¬
of
from.
make dollars available in pay¬
ment for goods and services which
can
we
import.
To
date
dollars
lutely
Kansas
sponded
math
City Forming
the
now
occupiied
by
recent
re¬
of other countries in terms of
our
investments
to
start the same day City National
R.
Building
Long
at
necessary to
Street and Grand Avenue.
time
present
restore and
Rehabilitation
struction loans
are
and
recon¬
seed which will
President of produce long-term increases in
City National, said it would take living standards and productivity
about ten weeks to complete the around the world.
R. Crosby Kemper,
work
the
at
,
downtown
quarters.
Remodeling currently is suspend¬
ed by the construction workers'
To date, we have extended a
substantial volume of credit for
and world reconstruction. The Govern¬
strike.
Financial
arrangements
capitalization of the new bank ment has a total of slightly more
have been completed. The insti¬ than $9 billions of active credit
tution will have an initial capital¬ commitments abroad.
Through our
ization of $625,000, consisting of subscription to the International
$250,000 in capital, $250,000
paid-up surplus and $125,000
paid-up
undivided
in Monetary Fund,
our capital sub¬
in scription to the World Bank, and
unused authority of the Exportnew Import
Bank, further credit is
profits.
The
management of the
hank will include R. V. Aycock, a
And in addition to gov¬
available.
director of City National
25 years, as President;
the last ernment credits, the World Bank
John C. has authority to raise sums of
House; assistant cashier of City capital from private sources in
National, as Vice-President, and the United States.
M. H. Ely, chief bookkeeper of
In other words, America has al¬
City National,, as Cashier. The
ready done a great deal, and in
board of directors will be named
we
City
National
will
the
lease
have
established
mechanisms
duct
a
main
and
floor
of
general commercial bank¬
world
under
commerce.
of
success
participation
our
in
be
posit and saving services. It will
world economic
affairs will
mot have a trust department.- • by
the
success
we
Of the 12,500 shares of $20 par measured
achieve in expanding our imports
capital1 stock to be issued, 20%
will be set aside for officials of and in encouraging a steady flow
the new bank. The remaining 10,- of sound investments abroad. That
shares
are
to
the stockholders of
at
the rate of
in
the
one
be
offered
to
City National
share of stock
bank for
is the hard
at
achieve
share
our
held at $50 a share. Stockholders
our
will
new
have
each
time
problem;
the
of
volume
ports are the level of
and the service on
the one hand, and
the stock has
On ccasions in the past, this coun¬
the offer.
charter will be made
our
try has risen to
application for
a
May 4.
must come.
and
state
heights of indig¬
nation at the fact
tries failed
to
that other coun¬
pay
their debts to
raw
ma¬
Technology, employment
income; significant
•
increases in import volume at any
given level of business activity
will have to come'in those prod¬
consumer
With
relatively untapped
markets
high
a
general restoration
a
more and
will want to
cans
national
of
Ameri¬
more
draw
on
re¬
im¬
of
their
serve
of
produc¬
trade
our
own
interests
well
as
continued
Despite political tensions which
today, and despite differ¬
in viewpoint which are evi¬
exist
dent
among
tions
at
the
several
delega¬
Geneva, there appear to
powerful underlying forces
for1 agreement.4 All
participating
countries—aside from their special
exist
fundamentally recog¬
expading multilateral
trade is indispensable for their
own
recovery. I am confident that
nize
—
that
on
come
to
will
be
meetings, therefore,
important stride
our own prosperity
another
activity in this country and the
legal
restrictions
and
controls
and
the
the greatest influence in reducing
and eliminating those "invisible
For
American
abroad.
and
in this country
At
present
virtually
enjoying
are
we
full
employ¬
ment, and although there
arc some
disturbing signs—particularly in
the rising agricultural and indus¬
prices
basis
continued
expect
can
opportunities
volume of
In
nevertheless
am
saying that, on the
national income, impor¬
of
ters
I
—
in
for
wide
increasing
the
their business.
regard to tariffs, restrictions,
and international arrangements on
these
matters,
I
expect
to
say
believe that aside from these
important matters there
important
imports.
still
are
for expanding our
ways
First, at the present rate of in¬
dustrial
we
consumed
using
are
up
basic minerals at
of
excessive rate.
we
of
activity,
reserves
our
an
a
During the war
large proportion
remaining copper, zinc, and
lead, and we drained our reserves
of petroleum without stint.
We
our
a
up
grade iron
good part of
high
our
deposits also.
ore
To sustain
a high level of busi¬
activity and to protect our
remaining natural resources we
ness
will
have
to
increase
imports of
these vital materials.
If in the future
our
governmen¬
stockpiling program for stra¬
tegic materials is expsfnded as I
feel it should be, our imports of
materials
This
will
further
in¬
will
provide even
greater opportunities for impor¬
ters.
Purchases of these supplies
crease.
should be handled to the greatest
practicable extent through private
traders, not through governmen¬
tal purchasing commissions or in¬
ter
governmental
-
American
expanding
of
unnecessary
arrangements.
business
dated
administrative
procedures
requirements
for
getting
goods into the country. Individu¬
ally these obstacles may be triv¬
ial, but as every dealer in im¬
ported
goods knows,
they can
and
as
in
Second, I think most of
well as
general
will
generally,
you
that, speaking
importers have failed to take full
advantage of new marketing and
distribution methods as they have
been developed in merchandising
domestic products.
I have been
agree
interested
such
to
see
the
organizations
Trade
trade
when
gether.
To
Foundation
have
gains
Advisory
help to
lems
Committee
work
as
the
have
imported
goods cannot afford to
their attention to a lim¬
metropolitan mar¬
kets, nor to narrow segments of
the population. The United States
of
mercial
is
a
challenge will have been met by
the major trading nations of the
world to carry out the kind of
economic cooperation essential for
enduring peace.
Dick & Merle-Smith
Admits W. E. Roosevelt
Emlen
W.
Roosevelt, the sixth
generation of his family to be en¬
gaged in the banking business,
May 1 will become
on
be
N.
in all
to
see
course,
it is the
private
groups,
activities, of
not the
of
bureacrats themselves,
it that
essential
to
functions
Stock
Dick
of
Merle
&
Smith,
Street,
-
30 Pine
New
York
City,
invest-
;ment bankers,
t As
successor
the
to
ities
secur¬
business
of Roosevelt &
Son,
founded
in 1797 by Mr.
R oosevel t's
great-g reatEm!en
w.
Roosevelt
great
made
responsibility
Y.
Exchange firm
a
along this line. To
do the job we will need your con¬
tinued advice and support.
And
general
a
partner in the
of the Foreign
significant gain. It
was
designed to give the same
kind
of assistance
to importers
as has in the
past been given to
American
exporters.
Activities
and policies of the several gov¬
ernment
agencies dealing with
foreign trade, and especially im¬
ports, have been better coordican
economy.
it will
sign of fair weather and
clearing skies. For the world as
a whole it will mean that a
major
be
attaches
Service
our
importers
structive steps have recently been
taken. The new directive to com¬
-
father,
grand¬
James
I. Roosevelt, Dick & Merle-Smith
stems
back
to
the
oldest New
York firm
The
the securities field.
in
partnership
Merle-Smith
was
Dick
of
&
created thirteen
Fairrnan R. Dick,
are not crippled or eliminated by
and Van Santvoorde Merle-Smith,
the executive or legislative bran¬
then partners of Roosevelt & Son,
ches of the government. Your or¬
ganized activity in this regard has to take over that firm's securities
already been of the greatest in¬ business, following enactment of
fluence, and it will continue to Federal
banking legislation which
years
ago
by
be.
would
I
like
to
this step necessary.
made
The Geneva Conference
Now
remark
velt & Son is
now
Roose¬
engaged exclu¬
about the trade conference which
sively in the business of property
is at present
and investment
taking place in Ge¬
to which I referred earlier.
There are some lines of busi¬
neva,
which tend to
narrow a
man's
horizons, and which tend to
him
of
off from
human
cut
the larger currents
affairs.
The
business
of
importing is distinctly not one
of these, rather, it draws a man's
interest necessarily to - events in
all
quarters
quires
a
of the globe.
realization
of
It
the
re¬
close
Emlen
W.
between
and
government
between
and
national
internatioftal events.
ior
partner of
pens
a
case
in
point.
there will be
What hap¬
your
forecast for business;
weather
your
inter-
the
is
grandfather, sen¬
Roosevelt
&
Son
from 1898 until his death in 1930.
He attended Andover and Prince¬
ton
University.
United
was
States
Army
Entering the
1941,
in
Lieutenant-Colonel last year,
Army.
was
he
discharged with the rank of
as
overseas
with
the
after
First
His last Army assignment
Finance
Officer
of
Fifteenth Armored Division.
The present meetings at Geneva
are
management.
Roosevelt
namesake of his
inter-relatlonship in the modern service
and
in
health
practicing importer, and in
recommending solutions.
I
am
pleased to report that several con¬
sis
Dealers
reenforcing
the
business,
confine
to¬
in pointing out prob¬
the practical view of
us
from
world
ited number of
all
date,
which works with the Department
of Commerce has been of much
vanced methods of market analy¬
distribution.
considered
of course, we
already
made
important
in this direction. The In-
been doing to introduce more ad¬
and
impediments
amount to important
to
ness
most
trade in
or out¬
nated^but still further progress
tal
these
to
the form
porters
something later.
I
barriers"
an
profitable conclu¬
a
which
both
be
for
sion.
in
exist
will
proposals
International Trade Organization,
and
that the tariff negotiations
The Geneva
cooperation
objec¬
ences
the nation's needs.
Third,
business
our
and products of the world
sources
life
tives.
problems
exist.
level
income,
of
accomplishing
imports
Demand for
national
limit
to
of
a
and semi-processed goods
closely tied to the level of pro¬
duction.
barriers
necessities
thus protect their supplies of
foreign currencies. Only through
terials
is
trade
erect
imporls to the
and
between government and business
in the field of imports will be of
World
on
that
Many
forced
part of our
consumer
expansion
necessary
meetings.
tive facilities and expanded world
trade will it be possible for other
countries to join fully with us in
goods
is of unusual importance since it
is in this field
all
outcome
have been
as
rough balance between
exports
analysis
distribution for special qual¬
ex¬
of
Geneva
terminants
which
loans
income
market
ity manufactured
this
countries
will
must
we
imports and the normal out¬
flow of investments on the other.
3
been oversubscribed.
Formal
a
of the
core
future
to accept
until May
Mr. Kemper said
some
With
the
other
to
an
as
ety of their standard of living.
Through improved merchandising
methods, importers will better
some
ket.
However, in the long run, the
ing business, including safety de¬
000
and
explored.
national
effective
more
its
dation
be
restrictions
problem, will require
boldness, but anyway I shall
give you my views.
In fundamental terms, basic de¬
of that very
through which further assistance should be given assurance that
can be given.
We shall continue these reserves of materials will
present quarters to the new bank.
to extend help to put the world ;
be
held for special emergency
The mezzanine will not be taken
back on its feet economically and
purposes, and will not sometimes
toy the bank.
financially and to put a firm foun¬ be dumped on our domestic mar¬
The new institution will con¬
basement
should
increased
in
elimination
agreement
other countries Furthermore, importers
cooperation with
later.
drastic
the
used
Credit for World Reconstruction
provide opportunities for imports
our
41
event.
reached
ex¬
pand productive machinery, which
is basic to healthy and increasing
the
Tenth trade.
to its new quarters in
A.
are
the
at
expand the volume
world
substantial
after¬
we
of
and the various in¬
groups in our population all
which
(2369)
to increase the richness and vari¬
the
war
urban
a
areas,
-
It would be unreasonable to
pect
trade
come
*
directly involved
are
great
complex of many submarkets; inland markets, smaller
then,
imports? For me to speak
on
this subject to you men, who
have spent your lives in the study
trial
of mutual benefit to all parties.
at Government and private loans and
Company
can we
problem,
our
confident
National
City
Trust
and
Eighteenth and Grand.
The new bank is expected
moves
of
Expand Imports?
immediate
is how
quarters for long-run trade which will be
the
in
located
be
Bank
The
abso¬
the emergency needs
to
Can We
many
In
necessary.
of
market is
ucts for which
CITY,
will
investments abroad.'
How
was
which
MO.—A new highest humanitarian ideals. Our
bank is in process of organization gifts are now tapering off as these
under
the name of
the Grand needs are passing.
Avenue Bank of Kansas City and
However, gifts are not a basis
KANSAS
itable
given
have
we
away,
Grand Ave. Bank of
-
long run, and we will be'destroying further opportunities for prof¬
against
our trade volume is much greater
ability, than
prewar, and the reasons for
economic justifica¬ this
are apparent.
The disorgan¬
with
those
ests
Our Opportunities in World Commerce
actu¬
ally confiscated over what is now
'
'
-
■
the
Mr.
Roosevelt's father, John K. Roose¬
velt, and his uncle, George Emlen
Roosevelt,
I of
are
presently partners
Roosevelt & Son.
THE COMMERCIAL & FINANCIAL CHRONICLE
(2370)
A Bird's
Inventories and Price Trends
for
others, no generalization con¬
cerning current policy would be
at all sound.
However, some gen¬
made.
eral observations can be
rising, it is
"When all prices are
a
For
risk not to build inventory.
several
most
years
of
have
you
could lay your hands on, or
of closing your plants.
In some
lines of business, buying ahead
has now become a greater risk
when
that
nize
must
now
1946.
how
inconceivable
seem
to them that
No matter
it
now
may
anything the greater its utility.
selective,
the shelf and the
countries
finding
an
portant to keep in mind that as
as they and their purchasing
clearly
competitors stop building ^inven¬
tories, demand for the materials
they buy will lessen even if con¬
sumption is maintained.
from
industry
"One
is
it was being widely
prices of manufactured
goods could not decline so long
as
wages
kept moving upward.
thinking.
necessary.
"An
even
or
raw
material
ing
cost
prices, manufactur¬
in¬
through
reduction
efficiency, and shutting
down of marginal high cost pro¬
creased
'seller's
market,' there is
an
umbrella over the production
man's head. In a 'buyer's market,'
"In
a
successful in the
Top manage¬
ought to be keenly aware of
this and start right now checking
every long-time policy and plan
for manufacturing, marketing, and
directly,
so
well
ment
will
traditional
pone
force
is"
political talk fit into it, and
-
>
others
adds
to
clarity.
if
becoming very, very
important to Europe. Immediately
after liberation I think it
the
was
general temper of those countries
becoming
now
careful
in
little
a
more
purchases
of
price.
Some folks think it is a push-over
to go to Europe and build up a
considering
the
lot of
standpoint
sales.
I
like
would
that idea.
courage
If
to dis¬
have got
You
if
policies,
out
you are
your
ready
the
J.
McCloy,
International
construction
Eugene
R.
Garner,
Bank
and
you
deliveries,
business.
ception of
one
that
United
director,
vi>e
for
Re¬
States
Robert
president
Dunstanj
L.
and
at
luncheon
a
Bond
Club
of
meeting
New
York
held at the Bankers Club
n_
_
the
of
to
on
be
May
dent
|
of
the
Bond
nounced.
I
i
i
»
;
f.
.
Club,
an-
to
me
a
stance, upon my arrival in one
country I consulted with a banker
check
the
trade
Russia.
between
the
assumed
that
treaty called for large ex¬
ports of steel, machinery, ball¬
bearings and other materials. In
exchange for that Sweden is
procuring foreign, exchange.
Asi-one
with
interested
Sweden
no
Certainly
me.
room
there
in the field of sales
promotion^for those who
After
I
are pes¬
talking
proceeded
with the
to talk with
the
gentleman in charge' of the
government bureau having to do
with the issuance of import licen¬
ses. He assured me that if I could
initiate
business
in
that
country
that his cooperation would be ex¬
in
granting
licenses
thereupon went out
and dug up business, and true to
his word the import licenses were
granted and they were 'granted
promptly.
promptly.
I
experience
thought
occur
to
made
me
the
that
very
frequently these things that
at
gest
some
ap¬
insurmountable when sit¬
a
desk can certainly be
by personal negotiations
in the field. I
that
of
would
maybe
us
In
to cut
fr>r
loose from the
Out-Look
in
Particular
weeks
During that time I
oportunity to talk with a
great many businessmen and in¬
had the
dustrialists concerning«ihe future
of Swedish trade. Business condi¬
were
of
made'in Stockholm,
the query was
Goteberg, or Malmo, the reply
always in the same-vein, and
something like this: There
was no
good business reason for
the treaty. As a matter of fact,
the public did not have an oppor¬
tunity
to
cussions
participate
favorable,
matters
in
the
dis¬
of
that
formulations
or
treaty. It had little knowledge of
the
affair
sealed
before
document.
political
it
It
became
a
strictly
was
the
part of
Sweden in the hope of maintain¬
ing a state of neutrality in the
event of
move
on
future
a
Consensus
war.
of opinion had it that Sweden had
tried
to buy security. According
reports, Russia in January had
to
mission of 140 engineers and
technicians in all Swedish factor¬
ies.
It
was
expected
that that
a
number
500 in
would
be
increased
February. One large
to
manu¬
facturer expressed the opinion to
me
that if
that
tendency con¬
tinued, if such visitation
maintained
and
was
increased
to be
the
on
part of Russia, then certainly she,
Russia,
would
know
as
much
about
of
Swedish
the
year
trade
pessimistic
by the end
the Swedes them¬
as
selves. And he went
mood
in
on
to
a
very
that
say
his opinion unless there
and
the
yield. Industrialists
no
ing
effort
every
report
to
exert¬
are
import
raw
materials,
to
start
the
wheels
going" again. But from my own
experience
to
sorry
I
can
say—and I am
this—that the bu¬
say
reaucracy that exists at the
is really staggering.!
On
top
of
are
East
all
alarmed
the
lief
seemed
not
to
at
be¬
general
that if
in
operation
they had
people
outcome in
Holland
maintain
interest
and
Indies
be
Hague
the
the
The
least
ticipating
merce
this
over
Indies.
did
a
the
of
par¬
com¬
the
East
little to look
very
forward to in the future.
In
entering Belgium from Hol¬
was
in
some
but
there
that tended
irritate businessmen. One
was
to
the
tendency of foreign exchange to
land
traveler becomes instantly-
a
of
aware
of
it
while
you
it
is
going to have
business.
been
come
but
on
has
economy
that
it
I
menu.
travelogues;
promise.
bolic
get
In
to
Denmark
observe
it
that
exchange
industries
to
induced
organize
or
of
some
central
a
syndicate,
they
as
term it. All needs of the members
screened
are
through that office.
Applications
are
for
handled
system
import
licenses
by that office. That
to
equi¬
table
distribution
of
imported
materials and goods to the mem¬
bers.
to
seems
Moreover
accelerate
assure
the
an
setup
serves
issuance of
the
im¬
port licenses in that the govern¬
as
changes the
indulge in any
will stick to my
I
think
it
train.
You
get
can
is
sym¬
wines
liquors, and I think
Schenleys.
You
get
cigars,
and
all
in
and
including
excellent
that was
all
Belgium.
Business
conditions
and trade is carried
good
are
with
on
con¬
fidence and enthusiasm. The Bel¬
gian
transportation
system is
Belgium has coal and in¬
intact.
dustry
is
operating.
liberation I
Right
after
told that Belgium
was
had put on a drive on imports for
the purpose of arresting or using
that
as
a
preventive
against inflated prices.
Merchants
there
and
is
will.
good
measure
had
goods to sell,
general feeling of
During the war, of
a
Belgium had its Congo,
the
foreign exchange
with
that
thus made available she
was
has
able
been
to
in
reach
rapid
fashion her present way of living.
Most
of
spent in
time in Italy was
The destruction
my
Milano.
as
shortage
train
soon
as
Belgium today. You can
variety of foods on the same
a
was
interesting
was
the
I
But
ports,
regulated, and certainly that
the
on
Just
of
there,
will slow down the pace of
nego¬
tiations in business circles.
riding
won't
be¬
has
all
waiter in the Pullman
also
have
we
recently
effect
an
Sweden's
sound,
noticed
widespread
in
the Belgian border the
cross
and
but if its does become
difference
countries
from Amsterdam.
decade.
Personally I don't think I would
willing to embrace that idea,
amazing
those
aspects of life. I became conscious
course,
be
an
between
change, Sweden would&become a
puppet of Russia within the next
all
know from re¬
extensive. I un¬
derstand that 30% of the buildings
we
very
and
particularly of the factories
city were destroyed. Italy
should be a good market for such
in that
things
materials. But busi¬
as raw
is very spasmodic. The coun¬
ness
try is suffering from an acute
shortage
of
steel
and
electric
As a consequence factor¬
power.
ies
working
are
the
on
average
of two days a week. Plant opera¬
tors
would
materials
like
to
purchase raw
in large
America
from
quantities. But if they had them
no opportunity of
there would be
utilizing them. The transportation
system of the country is in very
circumstances,
bad condition. Such
ment
of course,
two applications
delay buying.
only has to process one or
for many inter¬
ests, rather than a multiplicity of
applications.
It
was
that
also
interesting to note
Denmark
is
developing
a
rather substantial trade with Rus¬
sia.
Prior to
mark
had
a
World
War II
Den¬
big trade with Eng¬
land^ for her dairy products. It
now
in
a
that England is not
position to pay the price for
appears
Russia
January I spent three
two
con¬
Danish
time
Sweden.
were
more
implications
damaged,
that it would require at least
was
trading
treaty than with a decreasing
foreign exchange. Constantly 1
would
inquire
into
the
back¬
ground of that treaty.
Whether
is
it
Countries
in
now
that
like to sug¬
desk.
Business
in
was
the
buying office
simistic.
I
with
cerned
discourage
was
and
Sweden
under the provisions of
foreign
on
Sweden
obligations
The
question of for¬
eign exchange. He was not very
optimistic. That, however, did not
tions
„
James Coggeshall, Jr., presi-
ex¬
willingness to expedite the issu¬
of import licenses. For in¬
of
marketing, will be guests of honor
the
ance
E.
director
With
you
country it may be
various European
governments manifested
ting
of
the
think
I
-
should do
said
two years to recondition them. In
the meantime, of
course, there is"
product
the test o^essentiality and
can mdke firm offers of
pear so
Development,
-
Black,
executive
president
particular
your
tended
work
you
Fleetwood
1
At this time I want to say
that price is
resolved
John
over¬
"My suggestion is twofold.
"First, every business should
have two sets of policies, both
carefully worked out. One set of
policies should be appropriate to
a
period of rising prices, and
should cover, in the manufacturing end, not only purchasing for
T
of
Announces Guests
powering.
gossip
Bond Glub of New York
atti¬
is to post¬
circumstances
commodity
not pass that test, usually a
rejection followed. In the event
subject commodity of an applica¬
tion
for
an
import license was
being produced in the country,
then price took on a new signifi¬
did
cance.
ously
a
If the subject
That
decision and action until the
of
discussion,
able circumstances."
typical
tude of business men
to note how de¬
you
for action in almost any conceiv¬
in
and
it
confusion
two sets of
ahead.
a
when the inevitable change comes,
the
pattern,
the
see
news,
"Then,
con¬
the world is
change is definitely true of prices.
Prices rise for a while, then they
go down.
After they have gone
down a while, they rise.
The
price cycle is always with us. But
thing
of
your own
I
plea that
you get away from the 'shotgun
wedding' type of response to price
change.
f'The old saying that the most
constant
prices
the
something much more basic
than a mere adjustment of policies
be
by
that
nection with its industrial rehabil¬
to
and
you
make
you
amaze
tails
Policies For All Time
now
import license
an
commodity essential to
country? Particularly in con¬
banker
"Once
be a disadvantage.
to
the
you can see
the trees.
as
study, and break them into
phases. Not only the phase group¬
ing I have suggested here, but
other steps through which each
cycle usually passes.
"Finally, I want to suggest to
may
that
you
One old but little known
like
as
"Notice the cycles in the
precept deserves special thought:
In a period of rising prices, highly
integrated production is an ad¬
vantage. In a period of declining
ditions
an
the
definite
forest
past fifteen years.
plans to whatever price
Was
passes
prices which do not concern you
been most widely
should
attention to prices that you
they tend to come sooner, later,
oftener, less often, than the aver¬
age?
Are they more or less vio¬
lent?
Study and watch
some
follow their characteristic
postwar behavior, an entirely dif¬
ferent production mind will be
called for than that which has
and
countries
the
from
they have changed, in past.
Compare their change with those
in the general price level.
Do
years
may
find
the
bureau
charged with
responsibility
first on the basis of essentiality.
how
prices in a declining trend,
he has no protection except con¬
stantly to improve his perform¬
ance.
If prices in the next 25
prices, it
considered
"Begin by getting records as far
back as you can, of the prices
which mean most to you.
Study
with
finance.
of
to
have previously
given to other to go over and sell; you have got
phases of management, you will to go over and certainly assure
get farther faster than by listen-' definite deliveries. And you have
got to have your price right.
ing to all us 'experts.'
the Longer Future
for
surprising
application for
the
be decreasing, and the other, and
certainly more important, were
was
are
same
duction units.
Policies
not
"
the repercussions on businessmen
in
Sweden that emanated from
ran
serving the way in which compe¬
tent manufacturing organizations
work out their problems, I
am
confident that if you will give the
From
rise further.
producer to
to get what they could and to get
it as fast as they could. But they
price problem if it is studied
the standpoint of behavior.
After more than 20 years of ob¬
your only an¬
to this dilemma are lower
swers
data
a
from
standpoint,
your
of
amount
licenses, and
representa¬
as
any
prices, while wages remain
firm
amazing
that this .about prices is now available, suf¬
Market ficient to throw light on almost
conditions may force you to lower
your
decisions regarding prices
that the field of prices has been
left to theorists. This is no longer
that
wishful
why business men
been subject to emer¬
gency
"A year ago
was
again
come
price behavior.
reason
have in past
they tend to be
the last price to stop rising, v
realize
.j
we
of
pro¬
speed up the issuance
most
itation.
to the study of
"As for wages,
in
their
fellow
well
is where
"Here
change
Generals
versa.
may
example.
plans for plant expansion
or
for integration of production
should now be carefully reviewed.
Most of you now
the
^efehkive.yto the offen¬
sive—or vice
"All
said
the
for
call
wm
circum¬
what
in jnind
stances
soon
the
licenses.
was
in
do
American
or
those
of
what
import
tive
is
In addition, they have
of
expedite
Those
in connection with the
could
of
visited.
just
out
what I
offensive.
they
off.
dusted
set
cooperation
sales outlets
for the object
were
was
issuance
must keep an alert
watch on changes in supply.
For
them it will be particularly im¬
other
plentiful instead of
of
measure
visitations
that
scarce,
a
made it
generals formulate their strategy
of offense before they assume the
be
slocks.
importers and
a point to consult with
government officials in the var¬
I
It
soon
very
as
with
Successful
will
become
they must veiy itefcessarily do, in the expenditure of
cedure
cies to be put on
their materials
Eurooeans
so
ious
"Second, there should be care¬
fully worked out in advance an
understanding of the conditions
which will cause one set of poli¬
spread from industry to industry,
their own industry will not be
permanently immune.
of
And
eration.
recog¬
a
in
dollar -exchange
these countries. The less you have
pricing, which
production to the rest of the
business, need even more consid¬
"Marketing and
tie
declines
price
of
As
longer terms, consider the differ¬
between 1920-1932 and 1932-
buying ahead.
A few
still face the squeeze of scarcities.
latter
scarcity
ineir
ence
not
"These
exchange.T There ' is
called for different strategy
have
you
than
inspection, cost control, plant size
plant location. Any¬
thing within the manufacturer's
responsibility, in fact, that would
—yes, even
foreign
in 1929-1932 than in 1932-1937. In
buying all
had the alternative of
inventories, but also employment,
equipment purchase, wages, hours,
organization setup, quality and
Thursday, May 1, 1947
Eye View of Central Europe
(Continued from page 2)
(Continued from page 15)
V
i,.
-•
42
butter, for instance, that
So most of the
is going
to Russia.
In exchange for that
is paying.
Danish butter for export
however, Denmark is procuring
very
badly
if&eded
coal from
Poland. Denmark, of course, has
no problem of •reconstruction. She
has the problein '6f replenishing
her livestock. All in all, consider¬
ing the size of the market, I think
the outlook in Denmark is good.
In
Holland,
as
I
saw
it, the out¬
look is not good. The destruction
of
property in the recent
appalling." Farm lands
war was
were
seri¬
On the
the
retard the recovery and
credit side I noted that
Italians seem, to have
will
tense
to
an
in¬
that is
particularly so in the Milano or
industrial section. Unless Italy is
successful. in
obtaining
outside
financial aid little progress will
made
be
work,
in
her
and
rehabilitation,
And
right now, ,as far as making
any
predictions on business,
I
would prefer not to do it. It is a
questionable outlook.
In
referring to business condi¬
tions in Switzerland
only.
the
the
one
to
I think- it is
that it is
country in Europe where
necessary
American
say
dollar
loses
its
magic. That speaks for itself.
I
observed
Switzerland
to
a
readiness
import from
in
the
States materials
that were being:
domestically .in
that
country,. and apparently in suffi¬
cient quantity
to _take care o£
produced
Swiss
trigued
demands.
me,
investigation
This
rather
a^d I made
on
that
a
in¬
little^
subject.
It
/
Number 4590
165
Volume
that the Swiss are anx-
^appears
:ious to import from the
f
-
;
States to
supplement their own production,
so that they may carry on an export trade. Of course, from any
standpoint,
•
•
American I am
doing something
an
as
not interested in
f
indirectly if I
What Is the
•
do it directly.
can
Outlook
in
.
Business
7.'
[■France?
,
Judging
...
from
experience
my
; the possibilities are good, not7
withstanding the fact that since
liberation
France ,has
suffered
•
from inflation
and from the fear
of
Communism, - which has really
stifled • her
incentive
to
forge
-
When
ahead.
was
World
War
devitalized
»
in
I
and
by
in
white
further
was
occupation
long
a
that
realized
is
almost bled
France
.
it
War II, it shouldn't be
World
surprising that her people do ap¬
a little bewildered.
that accoimts for the
to be
pear
Maybe
,
extraordinary
in
happening
programs
L, France of the
THE COMMERCIAL & FINANCIAL CHRONICLE
7
Commu¬
country will replace her? An ac¬
quaintance of mine in answering
that question ^the-other day sugJ
gested Russia!
Along with sev¬
eral other millions of people, I
know
little of Russia that cer¬
so
tainly there is no way-of,evaluat¬
ing what her possibilities- are in
replacing Germany7,rI db6 know,
however, that 6prope,, Western
Europe, is looking to the-Sfates to
take up the slack. An opportunity
is
offered
ducer
to
a
lay
and
the
pro¬
identity,
an
foundation for the future
to
Right
create
to
now
American
the
to
anything American in
of manufactured good^
now
respect
of
day
in
of
I
trade.
domestic
own
(Continued from
welfare
of
portance'-to our
Reciprocal trade agreements
to
the
pro-
inclined
be
not
criticize
to
them
who
the
same
reason.
Those
in
for
glass
houses
should
live
not
throw stones.
the
In
of carrying on
progress
activities in France I
work.
tories
manifest
lot.
her
saw
people
desire to improve their
a
And
I
her fac¬
saw
don't think she is go¬
I
ing to slide backwards.
Germany's Place in the European
Economy
of
Some
might
listeners
my
question the relevancy of includ¬
ing in this report any reference to
Germany's place in the European
economy.
If this report is to con¬
story.
that you do not want
review
the
objectives,
each
of
the
four
occasions
when
the Trade
have
of
it
is
proper
this occasion.
each country visited
In
business
on
my
topic that
was one
failed to intro¬
men never
duce, and that was the rehabilita¬
tion of Germany.
as
know, is
we
Germany today,
a
vacuum
middle of Europe.
in the
Its prostration
is affecting the economy of West¬
to
ested
one
and
have
stance,
on
will
that
know
Holland
in
You
Europe.
ern
be
inter¬
industrialists
Belgium, for
attempted,
in¬
least
at
occasion to my knowledge,
litical
litical
matters
had
member of
by
individual
appointed a
one
been
mission of Dutch and
a
Belgian business men and indus¬
trialists to go to the English and
Russian zones in Germany.
Up to
that time the trip had not been
launched because the English and
think
don't
I
is
In the early
nation in the world.
part of
evidenced
question of whether the
were
concern
the
over
trip European curios¬
my
and
United States intended to lead the
to
would
stability
stand
and
peace,
or
while
.Vdside
Com¬
engulfed Europe.
The
absence of a positive answer to
that question up to the time of
utterance
Truman's
President
on
situation left
Europe in a state of uncertainty.
She knew the way she wished to
the
Greek-Turkey
travel
go
unes¬
She realized that as Eng¬
withdrew
land
to
hesitated
but
corted.
her
from
former
spheres of influence, only one of
two nations could replace her.
So
she
sat
The
I
days
previously looked at the future
differently. .In the course of their
affairs
business
merely
tone
was
longer
no
men
through motions.
decidedly different
went
There
few
a
a
to
negotiations.
Talk was
heard now of creating new uses
expanding.
and
that the French had found a new
many? Do they wish to see her re¬
because
vive
sons?
That,
deserves
an
of
of
emotional
rea¬
scarcely
particularly
course,
answer,
of Holland, where, as
I have said, the loss was of a most
on
the part
extensive
The
been
and
is that Germany has
hinterland
of
Rotterdam
the
In
Dutch
spoke of the power of the city as
a
to
The
port and the traffic it used
handle to and from Germany.
thought occurred to me that they
were trying to project themselves
into the future, to the day when
they
And
would
from
resume
a
strictly
It
that
trade.
I
the
United States Treasury away, but
I do subscribe, to any foreign pol¬
icy of our Government designed
to
do
commercial
advocate
not
stabilize
World
giving
affairs
commerce
of
and
to
our coun¬
try.
Conclusion
In
conclusion,
address
I would
like to
recommendation
a
American
to
industry:
At the time
of my departure for
Europe I con¬
ahead not in
templated
of
terms
but
in
trip
the
dollar
the
sales to
nature
of
be
a
to
the
industrial
bilitation
of
the
Old
the
made
mission,
dedicated
reha¬
World.
At
pnd of the trip my gratification
is necessary.
Cer¬
tainly any emotions of man are
subordinated to the demands of
did not
business.
flow
standpoint it
Until Germany is in a
position to
spring from the volume of
business that had been procured,
but
from
across
of
the
my
realization that
company's
the Atlantic meant
the
products
a
genu¬
supplier of raw m# ine contribution to the welfare of
.ierials and finished products, what Europe. Only through production
act
again as
a
seen
and
since
program
by
In
war.
loans, exchange
rates, etc. — but the reciprocal
trade program has come to be a
symbol, and it is difficult to ex¬
aggerate its importance in our re¬
lations with the rest of the world.
lions
of
dollars
of
national
our
also
are
export
heavily
markets.
that
Europe
industry.
tinue along the same path we are
following in the reestablish-
now
ment and development of the eco¬
nomic
life
of
the
know that we,
world.
They
who have half the
industrial production of the world,
the
are
most
important source of
these countries
active cooperation. They
new
capital,
need
our
and
have watched with encouragement
the
development of
tional
interna¬
our
political
policies and our
strong support of the United Na¬
tions.
They know that our par¬
ticipation in postwar international
settlements is essential in the de¬
velopment of
a
protection
just peace and in
of the interests of
all.
.
A Consistent Trade
They
raised
whether
to
as
Congress
should not again review this pro¬
gram. It is only natural that this
question should
believe
in
be
raised, and I
the questions
At this moment,
facing
quite frankly.
however, I do want to emphasize
that if there were to be a modi¬
fication
the
in
program
it would
interpreted, whether rightly or
wrongly, as a very major with¬
drawal
the part of the United
the
responsibility
on
States
from
which
we
sumed
fact that
cal
the
the
politi¬
by
international
our
policies have
support
of
the
people of this country o:i a
bipartisan
basis. There
is still
considerable concern, however, as
where
to
concern
stand
we
questions.
that
we
there
is
will not pursue a
consistent policy of support to
expansion of world
trade.
too well
the
They
what hap¬
pened in this respect after the las'
and
war
during
the
depression
after 1929.
They know they must sell goods
in the United States if they are
going to be able to pay for what
they want to buy from us. They
feel strongly about some Ameri¬
can tariffs just as our traders feel
strongly about some of the re¬
strictions which they have placed
on our trade in the form of tariffs
and by way
of import quotas, ex¬
controls, etc. Ever since
the
passage
of the
Reciprocal
Trade Act, they have looked for
change
the
tariff
concessions
we
were
make to them in ex¬
equal concessions to
In other words, the reciprocal
willing to
change-for
us.
trade
program
has come to be a
symbol of full-fledged American
participation in world trade.
Of course,
there are many other
factors which are of great impor-
cotton
larly, in the case of phosphate
rock, gum resin and gum turpen¬
tine. Were it not for foreign mar¬
kets, business in the South, with
a total population of 40
millions,
would be vitally affected and the
South would become
a
poor mar¬
ket for suppliers from other parts
of the U. S. The whole country
would suffer.
Then,also from other
agricultural sections of the coun¬
twelve jobs in the United States.
Through
increased
sales,
they
help to keep down domestic prices
they lower the unit cost of our
mass-production industries. Our
exports have been increasing, and
it is desirable and necessary that
should
they
There
are
continue to do so,
continuing needs of
foreign countries for larger quan¬
tities of our goods. At the same
time, our great productive capac¬
ity can only be maintained and
have
necessarily as¬
; expanded
working towards ex¬
export.
panding and freeing world trade.
if
As
It is true that many of the rep¬
of industry who ap¬
Reciprocity
Information
said
I
Abroad
before, we must buy
abroad to enable the
from
more
continue to
can
we
Must Buy More
Problem of Tariff Revisions
world to continue to buy from us.
Other countries must have dollars
be¬
and
if they are to be able to pay for
expressed our exports to them. We supply
possible difficul¬ them with dollars when we buy
ties they would meet if the U, S. their
products and services; also
this
fore
concern
Committee
the
over
tariffs were reduced on the
modities
com¬
when
tourists
our
and
business¬
which
they
produce. men travel abroad, and, of course,
However, I am told that no rep¬ when we make loans or gifts to
resentative
who
appeared
was them. We cannot indefinitely sup¬
able
show
to
that
the
tariff
re¬
ductions made in connection with
former
trade
sulted in
porary
agreements had
more
than minor
or
ill-effects of foreign
re¬
tem¬
com¬
petition. Nevertheless, the possi¬
bility of serious dislocation re¬
sulting from further tariff reduc¬
tions will continue to be carefully
watched in order to avoid, wher¬
ever possible, adverse effect upon
American
industry. No conces¬
port our export trade through
gifts and loans, although such as¬
sistance is quite justifiable during
this
postwar reconstruction pe¬
riod. The more we import, how¬
the
ever,
more we
shall be able to
export.
should
We
I
mean
well
buy
more
goods
for other reasons as well.
abroad
as
manufactured
essential
raw
goods as
materials.
Many imports contribute to our
a quid
standard of living, and others help
agreements us to conserve «eur domestic re¬
themselves will contain an escape sources. I have in mind not only
clause enabling the Government coffee,
tin, cocoa, bananas and
sions will be made without
the
and
quo,
any time to step in and take silk, which we do not produce at
appropriate action to protect any all, but also wool, furs, lead, cop¬
industry which is seriously per, petroleum, and newsprint, of
threatened
by
the
operation which our own production and
at
thereof.
economic
on
Particularly,
our
in
pro
Policy
encouraged
are
as
Congress
peared before the Committee for
our
of
try, there enter into export sub¬
has apprbved this stantial proportions of our pro¬
times, and only re¬ duction of rice, fresh and dried
cently the authority of the Presi¬ fruits, and canned foods. And I
dent
to
negotiate modifications certainly need not remind you
and concessions has been extend¬
that we need foreign markets for
ed. We have been working under
our surplus wheat.
this authority and are now in a
To sum up: Every American has
very crucial period of the negoti¬
a personal stake in the expansion
ations which are taking place in
of world trade. Exports provide
Geneva.
Questions
have
been
directly about one out of every
The
products of
Everywhere the people look to
us
with hope that we will con¬
40% to 50% of
agricultural products,
and tobacco, are
normally marketed abroad; simi¬
some
such
program four
be
the great de
dislocations
and
caused
remember all
anchorage in life.
Belgium
particularly of Holland.
battered
of building, of
appeared to me
products,
protect the
nature.
answer
the
old
carrying out the
of world iftrade-—factors associated
resentatives
appeared resigned to the lot
just
7)
page
tance in
American technical assistance and
Frenchmen who
for
for Ger¬
struction
were
during
I have
war.
the
in Paris at the time and
the reaction.
Communism
of
President's
the
of
definite.
was
was
saw
wondered.
languidly and
effect
Russians had denied permission to
sorry
East,
businessmen we there is great need
for
food,
know that commercial prospects equipment,
and machinery that
in any country can be measured can principally be obtained from
by the political philosophy or the United States. Furthermore,
all over the world, and particu¬
stability of that country.
America is looked upon by Eu¬ larly in the underdeveloped areas
of the world, there is need for
rope today as the most powerful
enter their sectors.' Do the Dutch
Belgians feel
have been overseas and
quite a bit of traveling
have done
As
digressing.
had
he
six
past
both
stay in Amsterdam in February I
that
the
the
particularly from a po¬
standpoint? Discussing po¬
speech
informed
of
look at us,
to take joint action to explore the
possibility of reviving certain in¬
dustries in Germany.
During my
was
I
years
most
the Middle East and the
and
Europe,
munism
many on
itinerary there
few impres¬
a*
During
Far
world
that
far
in Europe,
ket
then I submit
to discuss Ger¬
so
necessarily
they must be very general.
On
the other hand, how does Europe
ity
possibilities,
with
treated
sions
to you some of the things that
Europe is thinking
about, and
that is pertinent in estimating mar¬
vey
comments
These
ing and heating appliances, farm
equipment and business machines,
which altogether account for bil¬
production, -and
dependent upon
with international
Agreements Act was up
American producers
nism has made, nor among the
for renewal." I am sure that this
now to see what they could do in
ranks of the industrial workers
committee's* interest lies
in the
replacing Germany, not as a tem¬
but among those who till the soil.
present-and the future, and also
porary measure, not to take up a
Much criticism was heard in Eu¬
that you-are concerned with the
slack, but for the future.There
rope of the French in not working
of
our
economy
as
a
is no reason why, if we get that welfare
hard enough to come back. But
whole. I should like, therefore, to
trade, it cannot be held.
really, most of that criticism I
acquaint you with my views as to
heard
came
from
the
lips
of Europe's Concern With America's the present significance of this
Frenchmen in Paris. I think it is
Governments trade policies, both
Foreign Policy
a good sign. And certainly I would
There are two sides to every here and abroad.
urge
and
area
Reciprocal Trade—A Consistent
Bi-Partisan Policy
waiting.
our
that
general interests of world
peace.
management
would
the
its production
contribution to
Furthermore,
me
and
away
least,
at
with Europe, as a
the restoration of
people gQi
Perhaps some method of operation or results of
the
trade
agreements
program,
will cease jto
which have been covered fully in
look upon overseas trade as for¬
the course of these and previous
eign and put it in its right per¬
spective as merely an .extension hearings before this committee on
slips
tired
recommendation to Ameri¬ important industries, such as radio
industry is to share, to some manufacturers, producers of cook¬
degree
Only through pro¬
people cease be¬
ing susceptible to overtures that
are made to exploit misery.
But,
Europe.
of Western
43
My
can
will its
to have the admiration and* gram.
I assume
seems
time
black market.
duction
his foot in the door.
get
way
Europe wipe, out inflation.
Only through production can Eu¬
rope rid itself of the evih; of the
can
(2371)
On
supplies
other
the
hand,
organiza¬
In brief,
inadequate.
are
imports have become in¬
representing large segments creasingly more essential to our
agriculture and industry made industrial strength, to a high level
larger
tions
of
statements
filed
or
briefs
before
employment and prosperity, to
and to
of
the Committee for Reciprocity In¬
a
better standard of living,
formation indicating that the need
a
better balanced system
of exports
for an important por¬ relations
tion of their production was im¬ world.
If we
perative if the industries were to
be
maintained
at
anything
their present capacity.
like
For example, the motion picture
an
output of
are
to
the
rest
of trade
of the
such neces¬
have
sarily larger imports, we obvious¬
must pursue a more liberal
policy and, in proper cases,
lower our tariffs. Under the trade
ly
'
industry, with
with
over
trade
annually, has agreements program, these reduc¬
been receiving approximately 40% tions are made selectively, item by
of its gross revenues from foreign item, and only after careful study
markets; the machine tool indus¬ of the probable effects of each
try whose production has declined concession that is offered. Experi¬
two
billion
dollars
from the wartime peak to a
of three
hundred
value
million dollars,
have an exportable sur¬
plus of 50% of its production; the
aircraft industry exports almost
20% of its production, and the
thrde billion dollar automotive inmay soon
dustrv almost
10% of its produc¬
tion. The electrical manufacturing
thus far with the trade agree¬
ence
ments program
trade
with
have
we
indicates that our
with whom
countries
negotiated
reciprocal
agreements increased in to¬
tal by a much larger percent than
did our trade with non-agreement
trade
countries.
to
believe
There
that
is
every
reason
additional
in¬
of creases in both exports and im¬
more lhan two and a quarter bil¬ ports will result from the contin¬
lion dollars, exports 5% of its pro¬ uation and expansion of this pro¬
duction.
There are many other gram.
'
v." '
industry,
with
a
production
Thursday, May 1, 1947
FINANCIAL CHRONICLE
THE COMMERCIAL &
(2372)
44
ago—in
ernment from a few years
(Continued from first page)
provide for the Govern¬
controlling and spending
would
ment's
of the presently ex-
nearly 25%
.
interest which
should prove of value in the sup¬
budget makes no adequate proviport of sound financial policies.
sions for reducing the national
States.
United
•
of the
income
national
panded
this
Even
huge
government,
an
United States has that many
The
debt.
.
in the midst
of a business boom, with a na¬
tional income almost twice as high
The country is now
before the war. This boom is
supported by a huge accumulation
ef readily available funds as a re¬
sult
of
war
financing, coupled
with a large deferred demand for
as
goods, for houses, for machinery,
all types of durable con¬
i*nd for
sumption goods. This combination
the boom. We cannot ex¬
creates
pect the boom to continue indefi¬
nitely. Therefore, a budget which
is barely balanced at a tax level
which places a
serious burden on
That is enor¬
shareholders.
more
mously important because it will
aid the difficult task of getting
keeping the budget under
Government spending is
and
control.
not
something the President and
departments do. It is
on getting
from their government. The more
the voters are also taxpayers and
bondholders, the less will be the
danger of unwise and excessive
government spending.
government
the voters insist
what
persuasive
These is still another
why a wide distribution of
reason
of
safeguard
government bonds in the hands
of
millions
this debt
Also
production
A1~~
Washington bureaus.
Therefore we cannot safely
the
provides
restore the balance of money
con¬
tinue the kind of government we
have had—with its red tape—its
their
supply and helps
be¬
tendency to expand
constant
and
budget so that
increasing the debt and
stop
begin to
on
goods people can buy with
expanded money
we
aspects of
dependence
pay it off. We must dis-.
tribute the debt just as widely as
possible into the hands of inves¬
tors and
reduce the inflationary
so
money
supply that,
taxes,
unfreezing
goes with a
depends on
floating debt. We must take every
subordinates.
We
It
needs
no
clairvoyance to
possible step to preserve and to
know that one of
the greatest can't afford to have bright young
men
without experience settling increase the dynamic energy of
handicaps to productivity in the
United States is taxes.
Progress the most weighty questions. We our economic life; for that will
must build better and pay better
make
the
burden
of
the
debt
depends on the full blossoming of
salaries in the middle ranges of
the energies of millions of leaders,
easier to bear and will maintain
government. This is true in the
on their extra exertion, their extra
our
American heritage of Free¬
concentration.
The
present tax Treasury along with other gov¬
ernment departments.
dom.
This
will mean reducing
system
penalizes extra effort—
the number of
mile.
extra
As
goinf
for
inventive
the
removes
the
be avoided; in time of peace
should
order
worth
such
be
things
and
we
are
must do as a nation in
in
leaders
and
interest
rates,
improving the quatity of gov¬
ernment.
Real Cancer in Price Structure
social
that extra effort will be
while. This means particu¬
the
essential
the
Says Unbalance Within Price Level Is
to
as
then
These
facing our present tasks they are
bad medicine and ought to be re¬
duced promptly.
The method of
reduction
Summary
wartime
a
high tax rates could not
measure
assure
executive pay
cause
goods..
our
(Continued from
19)
page
people is a
business is
to the welfare of the nation. These larly lowering individual surtaxes, 1929, while
total payrolls were Federal use. By the same token,
clearly a budget out of control,
personal taxation on individual
savings bonds provide a cushion for they are today a brake on in¬ $8.9 billion greater than in 1923.
and the country's first task in any
"While the cost of living is now earnings from investment would
for use by these people in lean centive. Small business would be
program of debt management is
correspondingly
reduced
as
perhaps the greatest beneficiary 21% higher than in 1926, hourly be
years, against depression or un¬
to reduce budget expenditures.
dividend distributions become less.
employment.
While
we
have of lower surtaxes, for small busi¬ earnings in manufacturing have
II
ness in typically privately owned
more
than
doubled.
Today's Tax returns from non-investors
learned much about the business
Reduce the Debt
and dependent on ploughing back hourly rate is $1.17 as compared would depend on the course of
machine and are hopeful that its
We must begin at once to reduce fluctuation can be
with $0.53 in 1926.
Weekly earn¬ employment and wage rates. Tax
Reduced, we earnings into the business.
the debt and so lessen its dangers. have
There may seem to be a certain ings averaged nearly $47 in Feb¬ income from liquor, motion pic¬
hope rather than assurance,
There is still another reason why and we need to build every buffer
contradiction irf a program of re- ruary, 1947, or 88% more than in ture admissions, jewelry and other
we cannot risk continuing the debt
'Real' earnings today thus commodities and services would
that we can. Through the owner¬ during taxes at a time when debt 1926.
-ill the
*<>
the sale of bonds
to all these people stirred a greater
incentive to patriotic support of
the war. It also gave these people
a
share in the affairs
of their
than that,
more
We
must cut down the
life it touches—in our
ior Debt Managementserious damage
without
A Program
the management of the debt:
size—in the number of
people and on
at this
high level: we can never
National emer¬
tell when another
arise, and we don't
caught then with so
may
gency
to
want
be
large a debt.
much the debt should
reduced each year and what
Just how
toe
ship of savings bonds the investor
builds his own social security; a
by which he can meet the
emergencies of unemployment, or
sickness, or old age. It is good for
the individual, and it is even more
important for the country's wellbeing, because this spending in
times of emergency will help keep
means
requirements should be
adopted is a question now being
debated before the Congress.
A the country's economic life on an
1% retirement a year of the pres¬ even keel.
ent debt would mean a retirement
So the continued vigorous sale
■of $2.6 billion, the amount which of
savings bonds is sound policy,
lias been proposed by the present
just as it was in time of war. It
^statutory
.Senate.
is
political pressure for spend¬
and for tax reduction is so
great that there is considerable
The
ing
merit in setting up a
that
amount
the
ment
of
debt retire¬
should somehow be related
prosperity of the country,
and in a good year we ought to
retire more debt than in a year of
to the
depression. A heavy retirement of
debt in time of prosperity would
tend to check overexpansion and
contrari¬
inflationary tendencies;
wise, a smaller retirement in times
of adversity would relieve some¬
what the burden of taxation and
would aid a little the processes of
businessman
the
tribute to the wise
banker
con¬
can
management of
the National debt.
fixed statu¬
tory requirement for debt retire¬
ment.
Another consideration is
of the best ways the
one
and
Under any standards
income.
In addition to the sale of savings
good beginning at debt retire¬
a
ment.
III
Distribute the Debt
The national debt is most dan¬
demanding.
so
they
reduced
are
easily be raised.
to
have
must
be
the
that
remembered
be
objective is dynamics. If the re¬
ductions renew incentive, and re-
will
they
enterprise
stimulate
ury
bonds.
for
pay
probably the
powerful and is surely the
savings banks, trust ac¬
and
individuals
have
money which they are willing to
put into long-term government
bonds it is sound public policy
for the Treasury to issue and
sell
quantities of these bonds adapted
to the market.
A continued wide
distribution of such bonds is
far
a
important consideration than
more
the
slight
tion
on
interest
in
rise
ques¬
wide
distribution
of
the
The
debt
is
sound because it reduces the vol¬
of
inflationary
reduces the floating
and
debt which
has to be refunded from year to
ume
Unfreeze Interest Rates
money
year.
come
functions
economic
as
possible of the debt
main reason is
clear; the .force of enterprise has
than
been
debt
of production and income so rapid
banks, who will hold the
securely out of the current
stream of spending.
It was for this reason that the
Treasury during the war adopted
a
policy
widely
as
its bonds as
possible to individuals
of selling
and corporate investors.
fore the war the sound
adopted
toond
of
devising
that would
be
Even be¬
policy was
a
savings
attractive
to
individuals of both large and small
so
powerful and the growth
that
they provided ample means
to pay debt charges.
Today's debts are heavier ab¬
solutely and relatively, and we
must
our
summon
full
ingenuity.
enormous
and
to
resources
their
of
payment
energy
we
are
cur¬
of
our
productive
facilities.
of the Pres¬
the ident states that "with maximum
have been
for by the
received by
to
appear
than compensated
more
in
increase
prices
received
Prices
farmers.
by
farmers
(index numbers:
19351939 as 100) were at 88 in 1939,
while prices paid were at 97.
The
relationship as of 1946 was: prices
received
of
Most
217;
the
prices
increase
paid,
162.
in prices to
consumers, moreover, was
tercepted
not in¬
on
prices con¬ ately less.
"Because of rising prices, larger
2.2% rise in indus¬
trial production
since decontrol production, better margins and ai
But in the long run the price of
first
emerged
last
Summer. lowered ratio of prices paid to
money—the interest—is one of the
Whether further gains in physical prices received, the realized net
factors to ensure a flow of needed
income of farm operators (exclud¬
output would occur under declin¬
to
be
a
glut of money fed from
the wartime stream of bank credit.
of
stimulus
higher
tributed only a
,
saving.
payments) has
1939 to
"Against this background of $14.9 billion in 1946.
of the controllers of the flow
"Preliminary estimates for the
maximum utilization of current
The second and more immediate
function of the interest rate is as
one
of
credit.
In the
checked
were
out—and the
ing prices appears
risen from $3.8 billion in
|
old days booms
when
ran
money
signal was a rise in
resources,
any
tion in the price
Today
government
"highly prob¬ ing
lematical."
substantial reduc¬
level would mean
a smaller rather than a larger out¬
whole
Thus, a reduction
mechanism is dominated by the put of dollars."
Central Bank and the Treasury in of the price level to that prevail¬
rates.
money
first four months of 1947 indicate
that farmers are doing even
this
this
ing in 1941, even with a 5% in¬
crease in production, would mean
a
gross
billion
national product of $151
a national income
of
and
$129 billion.
"In addition," the analysis con¬
tinues, "a substantial reduction in
better
year."
Swedish Trade Talks
Proceeding Amicably
Special to The Financial Chronicle
t
WASHINGTON,
April 30—The
U. S.-Swedish trade discussions at
this
writing are reported to be
price level might touch off a
chain of downward reac¬ proceeding amicably, and should
end soon after this is published.
tions. Anticipation of lower prices
The Swedes are explaining why
to throw overboard the response may invite hand-to-mouth buying
they had to violate the terms of
not only at the distributive level.
money rates naturally make to
their trade agreement with the
It may also affect the commit¬
over-extension of credit.
U. S. A. in imposing import re¬
This is not necessarily an argu¬ ments of purchasing agents in the
ment
for higher money rates to¬
Credit control is a delicate
function. It is a strong argument
day.
for
avoiding
commitments
to
frozen rate pattern.
a
the
whole
initial
well
as
-
Improve
the
stages of production, as
behavior at the final stage
by
and other groups."
consumption
of
Governmental
housewives
Revenues
and
Quality
Government
of
Declining prices, the
points out, imply lower
mental
revenues
strictions without notice. While it
is
too
now
late
to
do
anything
about this feature, the discussions
are
seeking to agree
upon a
transi¬
tion period and rules to govern it
and the subsequent period. The
IL S.
Lower Prices
VI
of
private enter¬
prise has developed powers of
productivity never known before.
the
these
but
ism. At the moment there appears
This
tradition
a
The farmers have
also been faced with rising costs,
its way back to the
farm.
For a given basket of food.,
is
the farmer got 53 cents of the con¬
adjustment of the supply of sav¬ employment in 1947 . . . perhaps
sumer's dollar in 1946, as against
an over-all increase of 5% might
ings to the amount required for
Dis¬
be
a
reasonable
objective
for only 40 cents in 1935-1939.
a dynamic economy under capital¬
tribution
costs took proportion¬
maximum production."
Even the
and
country has an
potential. Our heritage
of
The Economic Report
ibiiity of movement.
One of these functions
IV
debts well, and the
reflection
is believed that
It
•
much
a
wartime peak
rently operating close to the ceil¬
without some flex~ ing
cannot fulfill
each country.
But even Central
when it is held by" the
Banks and Treasuries can't have
Reduce Wartime Taxes
toanks, for in that form it adds to
their cake and eat it too; they
At the end of each great war the
the money supply, and the money
can't exercise controls over exces¬
supply is the inflationary factor. National debt has seemed to the
sive credit expansion and at the
If money exceeds goods it tends people of the day almost unbear¬
same time keep money dirt cheap
In some countries and at
to force prices up. So in addition able.
for government borrowing.
to making every effort to reduce
some times the fear was justified,
If we are to avoid the great
Hie total amount of the debt, it is and the value of the currency col¬
sound fiscal policy, especially in lapsed.
England and the United swings of the business cycle that
do so much damage we can't afford
times of prosperity, to distribute States have in the past borne their
into the hands of investors other
likewise
was
two
gerous
as
the
to
close
supply.
great
which they
have
rates
Interest
Y
0
In discussing the
direct product tural segment.
earlier additions to the monetary
the basis solely of interest
and
a
were
cost structure stemming from
Treasury long-term
as insurance com¬
and
situation of the,
high-level activity has been "the farmers, the analysis states: "A1-'
continuation in dollar totals of an though the benefits of price and
unprecedentedly high national in¬ wage rates have been illusory ira
terms of tangible benefits derived
come and gross national product.
High dollar totals during the war in many sectors of the economy,
and the accompanying high levels this cannot be said of the agricul¬
similar inflation in the wage and
easiest to release.
Price
of
Wage Rates—Except for
the Farmer
of the method of financing the war
increasing tax yields.
The sub¬
There are of course other brakes through debt creation.
sequent continuation of money in¬
on enterprise that need attention,
but the tax brake is
Benefits
"Illusory"
supporting
pillars
the
of
One
lowed by
As fast
panies,
counts,
in undoubtedly be lower.
half greater than
Impact Upon National Product
for themselves. It was
so in the '20s after World War I.
Reductions of tax rates were fol¬ of savings
largely
to be constantly alert to the
markets
a
mid-20's, even after correction
price changes."
the
done
bonds it is desirable for the Treas¬
saving would be a narrow
the
short-sighted point of view.
present period of boom prosperity
is one in which we ought to make
Reduction will
gradually and
tuned to the swings of business
and the budget. But above all it
about
are
for
taxes
most
rates
recovery.
which may result from shifting
One interesting proposal is that
government securities from banks
Congress should set itself a defi¬ to investors. To
decide this
nite goal of debt retirement in re¬
lation
to
the
size of National
Once
cannot
reduction is
negotiators want an under¬
as to the treatment of
goods vis-a-vis goods
analysis standing
govern¬
from both direct
American
from
countries
with
which
while the Swederf has bilateral agreements.
large a debt and so
The U. S. A. is only one of a?
means, and selling these bonds to
many
other functions that the relative weight of fixed commit¬
as many people as possible.
"The number of countries which have
Our problem is to release and people have today insisted on gov¬ ments would rise sharply.
Thus a substantial part of the
stimulate these resources, for that ernment's
assuming the United current corporate tax rate of 38% complained at Sweden's import
•debt was widely distributed; but is-our
M
;
one:best hope to satisfy, States has a totally different gov¬ would produce fewer dollars for control action^ *■
With
so
and
indirect
taxation,
p
I&1
[Volume
y
■
■
.
165 ^Number 4590
Prices
U
COMMERCIAL & FINANCIAL
CHRONICLE
Widely Reduced Already
technological
improvements and
making possible large
volume
output with
clining unit costs.
Refraining From
There
steadily de¬
Price
Rises
were
customers, but
they are not doing so. They con¬
sider this policy equivalent to vol¬
untary price reduction. Numerous
pointed
concerns
tout that where
they have not in¬
prices they certainly can-
creased
reduce them at this time.
The
Labor
Second
in
to
as
is
future
the
wage
neces¬
sity—with the problem of material
supplies and costs. About 58% of
returns
the
on
questionnaire
specified the uncertainty
to fu¬
as
ture
wage costs as an important
factor holding back lower
price
adjustments.
Third in
ter of
43%
of
labor
the
mat¬
efficiency which
returns
indicated
real obstacle to
present
a
price
re¬
products
revolve
mous
around
uncertainties
the
of
enor¬
and
wage
material costs and labor
efficiency.
Continuing
with
the
factors
Itemized under question
four, the
matter
of
subnormal
the
businesses
35
a
nation's
incorporated
in the red
are
in
even
concerned
about
subnormal profit margins. In these
cases the aggregate profit
may not
be
too
small, but the risk of al¬
lowing unit profits to get too slim
often
prevent downward
re¬
This
profit
mar¬
for
not
until net is determined.
lowering
prices.
of the problem in¬
cludes Situations in which the de¬
is
mand
reduce
that if
strong
so
manufacturer
his
in¬
an
to
were
prices, it would
mean
perceptible gain to the ultimate
no
because
consumer
middle
duce his
capture
A
the
who
man
named
re¬
prices would simply
extra profit.
variety of other factors
were
by
10% of the, replies as
important bearing upon
whole price reduction ques¬
having
the
tion.
an
For
example, taxes, tariffs,
markets, governmental pol¬
black
bolster
their
share
a
Fe
in
first three months.)
April 26,1938: Union accepts cut
in Goodrich pay at Akron
plants.
Wool wages being lowered.
-
Nearly
all
cotton
mills
have
July
1,
1938:
law.
460 in first quarter. (See
item of March 2
above.)
15, 1938: Steel rate over
40% first time in nine months.
spurt
19,
1938:
bolsters
material.
Home
sales
building
building
of
Chain store and mail
—
order
sales, evidence uptrend. —
Rayons start price rise.—Demand
continues.
Sharp upturn indi¬
—
cated in fall film
The
foregoing
manufacturer
blamed
another
or
by
one
*iow
inter¬
as
fering with price reduction.
1938
The
in this
men
field.
of
most
credit
is in the domestic
area
account to
may
some
was
Average
November,
about
10 %
—
Points under
present level.
contrast
ditions
the
stocks
then,
what
the
about
that
the
now,
money can
and
sup¬
today,
cheapest
buy, based
they give back in
yield,
con¬
and
adequately
contention
are
things one's
ings,
to
me
the
for the
degree
reluctance
to
ex¬
that
a
bill before the Senate
be conducted
on
cash basis in
a
a
bill
contend
that
exporters,
particularly
smaller concerns,
benefit from the insurance
^vould
abundance of capital that we have
in this country and the cost of
financing is much higher than in
this
is
the
earn¬
promise.
time
not difficult to find.
for
As
one
lead¬
ing investment service points out,
at
today's prices, the earningsyield
stocks is higher
in relation to bond yields than at
on
common
time in
any
the, last
20
years,
or
longer. Even at the low of the 1929
panic, and the low prices of 1937,
earnings-yield on
common
Joss by reason of
credit terms, consistent with
non-payment by
stocks actually, and in relation to
the foreign buyer or
non-payment safety, are therefore as essential bond
yields as well, was smaller
because of exchange restrictions. in foreign trade as they are in
than it is today, though
today we
There is considerable
domestic business.
by
obtaining
protection
against
the
United
States.
Reasonable
the
opposition
to
this
bill.
The
Bank, which is designated
to handle
agency
the
as
the
insurance,
•expressed the view that the need
and actual demand for it is
doubt¬
ful.
The bank expressed the fear
•of
a
possibility of indiscriminate
promotion of exports not justified
Iby underlying credit and exchange
conditions of foreign countries.
A
survey
.American
of
While I
Export-Import
the
exporters
attitude
to
the
of
pro¬
do
as
a
or
not
of
extension
unwarranted
of obtaining
to allow
means
mit the
recommend the
credit
business
terms, that would per¬
of the exporter's funds
use
for purposes other than to finance
the
importation, I do feel that
must do
business
our
we
business
on a
basis.
World Bk. to Announce
posed
government insurance was
made in 1944, jointly
by the For¬
eign
and
Credit
the
Foreign Trade.
About
tionnaires
distributed.
were
600
ques¬
Special
replies indicated that 193 felt that
government
ance
export credit insur¬
is desirable and*131 that it is
^undesirable.
foreign
dred
to
exchange
considered
and
As
the
insurance,
service
109 undesirable.
replies of
considered
opinion of,,
a
231
desirable
A few hun¬
course
as
our
government
cannot
be
representative
export community
which is estimated at
30,000, and a
broader survey,
particularly in the
Middle West, should be under¬
taken to
There
clarify the situation.
is
no
abnormal
extending export credit.
risk
in
It is
an
by Dun
and the
and
10
Bradstreet
preceding
for
years
1941
shows
that losses amounted to two-fifths
<of 1%.
The data was submitted
by 514
ceeded
concerns
whose
sales
$750,000,000.
ex¬
The
Financial
WASHINGTON,
Chronicle
April
importance is in progress, or
likely this year, especially in view
the
growing
there will
be
likelihood
30—The
that
major interrup¬
tions to production in any of our
big
industries.
Meanwhile,
in¬
creased
buying power, resulting
from high wages, and from soonno
to-be-enacted lower taxation, will
its loans to France and
Denmark,
in about a fortnight it is
thought.
It
is understood
that
the
amount
of the loan to France will depend
primarily
some
of
recently exerted on
the
merchandising field. — Rail¬
road securities, also, will defin¬
itely reflect the high rate of unin¬
terrupted activity in steel end
motors.
S.
the
on
A.
American
bank.
as
wishes
of
Garfield Raymond With
Emanuel Deetjen Go.
Garfield
the
National
is
said
to
recently1 that it
endorse
the
idea
of
lending F/5nce
half of the requested
at
this time. In the
mark,
also,
requested
by
is
the
unlikely
the
Advisory
have
in¬
would not
the
World
$500,000,000
of
A.
Raymond
associated
Deetjen & Co.,
witfc
has
be¬
Emanuel,
S^-^illiam
Street,
members of the^New York Stock
Exchange,
registered repre¬
sentative.
Mr. Raymond has been
engaged in the securities field for
the past 22 years and was
recently
as
a
with Reynolds & Co.
With
Den¬
Prices, however, continue to
.
light volume.
of the member
some
There
of
the
in
move
...
banks, and dealers.
.
.
Also there
.
•
is
doubt
no
that
investors
are
.
.
.
the
feeling is growing that the eligible
obligations are in a vulnerable position.
The restricted obliga¬
tions, by way of contrast, have been steady with a good undertone,
.
non-bank
funds to work.
BIG
.
.
.
.
faced with the
still
v"''
.
of
need
"
putting
-'V-
QUESTION
The
big question that
authorities
ation
of
well
as
the
confronting the monetary
to be
appears
the government securities markets, is the dur¬
as
recently initiated credit
restrictions.
.
There
.
.
doubt that the extent and the intensity with which the
will be carried out will depend upon the
is
no
policy
curing of maladjustments
in the economic system
particularly in commodity prices.
ury
be
new
.
bills, through the use of funds from war loan accounts, could
temporary measure, for the primary purpose of bringing to
end the inflationary trend of commodity prices.
.
This would
to
seem
give
picture and it could have
of
.
to indicate that the weekly redemption of Treas¬
seems
a
an
Treasury obligations.
WATCII
an
.
.
.
.
somewhat different complexion to ttie
a
important bearing
.
on
the market action
f
COMMODITY PRICES
light of these opinions, it seems as though the all important
factor to watch in order to get clues on the probable trend of gov¬
ernment
securities is the
movement
of commodity prices.
Evidence is already appearing that the upward trend of certain com¬
.
modities
has
decline.
.
about
to
come
end, with others noticeably
an
the
on
Also there have been statements by authorities on com¬
.
.
.
.
modity prices to the effect that the trend is quite likely to be down¬
ward in
the
future.
near
...
In view of what has already taken place in some prices along
with predictions of the future trend, there is some question as to
whether the credit Restricting measures did not come somewhat
to cure a trend that may have already been reversed.
.
late
.
While
there
is
doubt that
no
the
money
managers
are
,
worried
about
inflationary trends, would they not be more concerned about
deflationary tendencies (which may be developing) particularly in
view of the fact that
1948
is
an
important election year?
...
,
NEW PRICE QUESTION?'
The credit
restricting measures, it seems, may bring about a new
prices in the government market with opinions pretty
move down much
more sharply than the ineligible obligations.
".
While the type of
selling-done by the commercial banks will determine the trend of
prices of the eligible obligations, there could be acceleration of the
pattern
of
much in
agreement that the eligible issues could
.
movement
investors.
.
through the liquidation of these securities by non-bank,
..."
.
If the insurance companies and savings banks should believe
that the bank bonds
dation of
term
were
going lower, this could bring in liqui¬
of the issues that they hold, especially the longer-
some
obligations.
.
.
.
also be selling
There could
.
.
mediate maturities.
Non-bank investors
of the inter¬
.
in
different
position than the commer¬
losing funds through the credit
On the contrary, investable funds are piling
are
a
cial banks because they will not be
Restriction program.
up, and
nowed.
...
the channels into which they could be put have been nar\
...
MORTGAGES ON WANE
Mortgages are not coming through as expected because of tbe
let-down in building and other securities that might have been con¬
sidered, have either been postponed
of the greater
because
Whitney, Goadby Co.
Arthur D.
Weekes, Jr., has be¬
desire for
seems
for buying, by
not suitable, at this time,
riskless obligations, pending
or are
more
clarification of the business situation,
.
.
.
to indicate that government securities will be
non-bank investors,
even
.
that
insurance
the
bank-eligibles
are
sold
by
Certainly in the amounts
and
companies
savings banks, they will replace them with restricted bonds.
of
in
though there could be
weakness in the eligible obligations..
.
.
.
investment
the
problem that faces non-bank
investors it is quite likely that they will be making new money
purchases of the restricted issues, until there is an opening up ot
Also
because
other investment media, particularly
th^mortgage market.
. . .
ANOTHER BAROMETER
While
siderable
of the
issue
than
more
case
full
the
on
representation
The
Committee
Bank
expressed
.
among
the bank issues, which has been
responsible in some measure for
the price decline in the shorter and
This
come
U.
.
Treasury issues, especially
be feeling the effects
soon
pressure
World Bank is expected to make
simultaneous
announcements
of
dicated
established fact that foreign credit
losses are lower than losses in do¬
mestic trade.
A survey conducted
to
of
the
Loans Together
The
seen any downturn
in the Federal Reserve Board In¬
dex of
Production, or any clear
evidence that a business recession
make itself felt to relieve
French and Danish
Interchange
Bureau
Bankers' Association for
"have not yet
of
will
In
between
indicated
to
seems
toward
which
indications that bidding has been less vigorous for certain of
are
Dow
in
on
This
the
Industrial
port
experience
high for
with
that
Nevertheless, the demand for the eligible issues has shown
tendency to deteriorate somewhat, with minor selling being
a
This
reached
only
attitude
banks,
range on
done by
newspaper
158.41,
The
Expoil Credits
1938
confronted
now
.
earnings.
Jones
or
proposing government insur¬ competitive market. Importers in
of exports.
The authors of foreign countries do not have the
ance
narrow
headlines about developments af¬
the
cautious
a
member
because
Aug.
Aug.
again
are
longest maturities.
that
all
were
policy since foreign trade cannot
There is
a
Dodge
J/40 to 91/4£
July 26, 1938: U. S. Gypsum 2nd
profit rises to $1.13 per
vs.
markets
.
credit restricting program.
al¬
Also,
bargain
tend
credit in foreign
markets.
hunters to become active, for the
more
exporting since the Export It is important for our exporters
list is honeycombed with
Credit Insurance Act became a to formulate a
bargains
constructive credit
foreign trade and
that Canada has been
doing much
.
.
about
—
quarter
share
securities
...
Phelps
raises price of copper
a pound.
government
important
developments are imminent.
The new method of handling sub¬
scriptions for Treasury bills, along with the levy to siphon off profits
of the member
banks, has created the impression that the way is
being paved for the unpegging of short rates in the very near future.
This, along with the weekly redemption of bills, has brought
the
stances
16
govern¬
ment insurance have been able to
$4
icies, and certain unique circum¬
(Continued from page 12)
foreign countries having
Currently, Santa
nearly
Governments
on
uncertainties, resulting largely from the belief
fecting security prices are partic¬
ularly interesting when it is noted
A Plea for Broader
It is claimed that the
loss.)
earned
the
porters.
suf¬
ficient profit to wipe out first six
competitor
failed to
own
an
(Note: In
July, 1938, Santa Fe RR. had
aspect
dividual
Adjustment Bonds
on
ready adjusted wages downward.
Only 6% of those who replied
specified "runaway demand" as a
reason
The
April 13, 1938: Santa Fe RR. de¬
fers interest
has
manufacturers
Reporter
By JOHN T. CHIPPENDALE, JR.
cheap here.)
months'
out of four
one
«5
'
low and last. Anaconda looks
very
surprising to find
is
ductions. Therefore, it is clear that
the principal problems of manu¬
facturers in pricing their
today
of
corporation
large propor¬
on
Our
(Continued from page 8)
good years, and therefore it is not
or
importance is the
low
Accumulating!
em¬
adjustments in prices.
costs" which is tied in—of
the
Reverse
profits show that
tion
will
Obstacle
importance
"uncertainty
a
Internal
that
^manufacturing
considerable
out of four cases—•»
distinct factor in pre¬
one
that the records of the Bureau of
criticism from
no
phasis in
26%—as
venting price reductions. We know
companies
who
they could easily in¬
prices 10% or more with
stated
crease
received
gins
(23^3)
Bullish Factors
(Continued from page 18)
other factors
rr,
the
trend
of
the
market
will
be
determined
to
a
con¬
commercial banks, the amount
in eligibles will probably be based upon the kind nf
extent by the action of the
decline
sold.
...
If
the
member
institutions
should
decide
that the
longer-terms can be bought back at lower prices, there will be some
liquidation of these securities, despite the need for income. . . .
On
the
other
hand,
the shorts and intermediates might be
much effect upon the general level of
selling by non-bank investors, which is a
$50,000,000
come
associated with the firm of
disposed of, with not so
to
H.
Whitney, Goadby & Co., 49
prices, unless there is
distinct possibility.
be
lent
initially by the World Bank.
In¬
deed, Denmark would not .require
the whole amount at once.
•
N.
Wall
Street, ti'ew York City,
bers
of the
change.
New
York
mem¬
Stock
Ex¬
position where
carefully because of the cross-currents that
It seemsas though the government market is in a
it must be watched very
seem
to be
operating there
now.
,
46
Agricultural Price Drop!
Expect
Observations
1947
Thursday, May 1,
CHRONICLE
& FINANCIAL
THE COMMERCIAL
(2374)
enough to reverse the trend or
houses, etc.,
out during prevent the trend from develop¬
ing. Probably the British will ask
parity and the Halls of Congress the
war,
the consumer's money
Tax Rates vs. Tak Collections
would ring.
us to take over in Germany.
Con¬
Farm products are had fewer
places to go and an in¬
out of equilibrium even with thfs
Again Mr. Snyder justifies present taxes by the high income and
ordinate
proportion
of it was gress will furnish foreign money
but will be rigid as to how it is
employment ruling today. But he is here confusing the amount of Inflated economy,
shunted into farm products. It is
tax collections with tax rales.
spent. Even so, one cannot foresee
Assuredly the amount of tax Collec¬
very different now, however, and
Farmers Favored
more than 1% of our national in¬
tions should be large in periods of high national income, but this
the only question is one of timing.
The farmers' income was at the
come going to agriculture for this
should be a result of overall industrial activity and not of the imposi¬
How long will it take for our truly
tion of high rates on th<^ individual.
Reductions of the confiscatory annual rate of $6 billions in the enormous production of consumer purpose, and you recall that 4%
last quarter of 1939, and during
more
is
going already than is
wartime tax rates may actually be followed by increases in tax
durable goods to take enough of
the last quarter of last year ran
right.
Even if we get a surprise
yields (perhaps even beyond the present quintupling of the pre-war
the consumer's money and pull a
amount) through increased incentives and other resultant stimuli to at an annual rate of $22 billions. large part of the demand out from demand for $1 or $2 billion more
of farm products, that, is out of $7
active business, if the pattern which followed World War I is dupli¬ Farmers are making 3.5 times as under farm
products. It won't
much income as in 1939.
On the
billions which is undeservedly be¬
cated.
take long. Even in the basic steel
other hand, national income was
ing received already.
We have
Combination of two other points made on this phase by the
industry only half the products
been sending $1 or $2 billion of
$771 billions in 1939, and during
are in short supply and new plant
Treasury Chief leave him in. the thoroughly anomalous position of
the last quarter of 1946 ran at the
food abroad right along. The news
successively claiming on the one hand that taxes should not be
capacity is expected to cure these
rate of $173 billions or only 2.4
of the day doesn't mean a new
reduced
because of thgijnjlationary impact on our present high
shortages soon. Steel inventory is
times 1939. On my last trip West
demand
for farm
products.
It
unbalanced but the over-all pic¬
national income, and ofitheSthej^hand because of his anticipation of
I talked with a farmer who stated
simply
means "we
cannot stop
a deflationary drop tperein of $8 bilLtqn ne^t year.
ture is the normal three months'
that during the year he had sold
sending food over as soon as was
supply. We are producing steel a.
Stalling
$2,200,000 of produce and could
an
85-million-ton rate and con- expected.
(Continued
from
Snyder adduced a number of other
Mr.
refrigerators,
cars,
(Continued from page 8)
5)
page
not being turned
were
made
have
arguments to support his
money
if it had been
$800,000—and I spent 10
years trying to get away from a
Kentucky farm in the conviction
only
seemingly adding up to stalling-on-the("If we cut taxes too soon we shall probably find it
theme of delay, all of them
Don't count
rate of 75 million
suming( at a
The index of the production of
be time enough to cut that it was uninteresting, un- physical goods has risen from 109
taxes when it becomes clear that conditions call for such action.")
in
1939 to 192 last January.
I
healthful, unwholesome, unprofit¬
The Secretary expresses" alarm over the possibility that the reduction
remember that in 1939, when the
able and exhausting.
of one tax is unsound without "thorough study" and an overhauling
Federal Reserve Board index of
Either
this favoritism of fate
of the entire tax structure at one fell swoop.
But it is not apparent
industrial production was at 109,
must soon cease or more people
some of us used to speculate about
why we cannot have both; that is, a revision of confiscatory rates
will go into farming and spoil the
what the capacity of this country
now; and later the scientific inclusive revision of the entire system.
show.
The forces which pressed
And when does the Administration feel that this millenium can
was
to produce physical goods.
farm products to such lofty heights
occur?
Some of the more dreamy-eyed
Only in 11)48? In view of the deaf ear that the Rooseveltare either going into reverse or
Kheorists contended that the coun¬
Morgenthau Administration consistently turned to the same pleas
The try could produce enough, with
**for an over-all revamping
of the tax structure whenever their becoming relatively static.
great underlying force back of it
unsound tax schemes, like the undistributed profits levy, were pro¬
;he equipment it had then, te-a;un
all is the enormous increase in the
the Federal Reserve Board index
posed, can there be confidence that this newlv-alleged prerequisite
money
supply which rose from
to tax changes will be accomplished by the Truman-Snyder Adminis¬
up to 160.
It is now 192. We are
$36 billions in 1939 to $110 bil¬ really turning out the stuff, al¬
tration at any time within the reasonable future?
lions now. The money supply is
though some of the pipe lines to
Right after the First World War it was found feasible sharply
defined as demand deposits ad¬
the consigner have not yet been
to reduce tax rates. The highest surtax was lowered from 65% to
justed plus currency in circula¬ tilled. Pipe lines take a long time
50% in 1921 and 40% in 1924, and despite the additional handicap
tion. It is the most important sin¬
to fill. Whether the money supply
of the quintupling of the government's expenditures compared to
gle inflationary force since it rep¬ shrinks or not, it is a fact that
pre-war, the national debt was reduced by a billion a year.
Under resents
money ready to be spent.
that part of the money supply
the professed philosophy of the Truman Administration, it is difficult
Now, however, the great wartime available for agricultural products
to imagine that any reduction whatever in tax rates would have
inflation of money has ended. The
is sure to decline. Competition of
occurred between Wars One and Two.
money supply is still showing a
consumer durable goods will eat
Even hard pressed Britain has materially reduced the tax rates
tendency to increase but the rate into it.
in various schedules and brackets, with the Exchequer Chancellor's
of increase is petering out.
For
Shortages of manpower, machin¬
explanation that "it is important that income tax should not stifle practical purposes it should be
incentive."
considered static from now on, ery and fertilizer on the farm and
grand-scale.
impossible to
reverse
our
Actually, there is
no reason
of both tax rates and debt,
mate
President
why here there cannot be a reduction
irrespective^^
of the successive
or any
It will
action.
usecL/Even
vJjruman be
as/the
if,
mental
Treasury claims, the
entail a decrease of $4% billion in
the debt could still be reduced.
revenue,
To
on
the
But he overlooks the 100% inconsistency of
this
present taxes do not impose an excessive
income]
American
people."
hardship
pronouncement with the economic gospel of Mr. Truman on
front.
the price
dialectical twisting of their concepts,
and
that
President
has
Truman
excessively high current prices
will bring on a
consumers
production
expounding
been
we
the
surely
may
thesis that
putting things out of the reach of
must
is only satisfactory to the Administration if
into line with production through
year.
that it
But it seems
be closed.
consumption is brought
reduction in industrial prices.
very
of the average
family
on
rises
the
a
a
good
current wage
thing; the professed net conclusion being that on
hand the economy is in a most vulnerable
position in which
deficit of purchasing power can be cured bnly by reducing
or
.
are
one
Conforming with this
position is Mr. Truman's pronouncement that
raising wages; but that,
some
on
taxes to relieve that
prices
the other hand, a reduction of burden-
same
inadequacy of purchasing power is
out of order.
Another example
nished
by the Truman-Eccles attitude toward instalment
AW in the
over
the
insist
power
sa.e
breath in which the President has been
is fur¬
upbraid instalment selling
on
retaining the wartime restrictions to curtail buying-
which they here strangely profess to
see as
being disastrously
inflationary.
And
so
on
explainable
the
with
only
the
on
screwily
the
encroachment of the
ground
power
$
$
$
our
Democratic
apparently
keep vfnat
greater proportion of
since
inconsistent "economics," which
of
the political exigencies;
on
old
we
son's of both
have.
But would it not
we
seem
will of course gladly
possible for the Michel-
political parties to refrain from ghost-writing for the
policy-makers at least until six months
or
so
before Election Day?
the
The new money
of transferring the
newly created wealth from weak
hands to strong hands.
It is the
old theory that if $10 was given
to
process
of
each
that
100
men
within
a
on
a
year
desert
agricultural products is 25% ;
recent prices. There
no reason to think that agricul*
for
to 30% below
is
tural
above
prices will be permanently
equilibrium. The history of
agriculture,
like
of increasing
one
are
of
15%
more
a
a
as
.
equilibrium price may be
as the price which affords •
fair return to the producer and ;
,
national family.
our
farm
which
served to boost agri
products,
and
which
is
going into a strong and fast re
verse,
is the unavailability of
manufactured
goods.
Since the
consumer-durable goods, such as
That is the
parity idea in reverse. The "
that mo per- f
trouble with parity is
year
their
and no group
son
productivity I
farm
lieve
for
a
do not
be-;
moment that the per¬
equilibrium point for farm
manent
prices would mean a greater war¬
time rise than for the prices of
manufactured goods. This indi¬
agricultural products,
at least 25 to 30%.,
would still leave them al-,
that
cates
drop
should
That
I think,
most 100% above prewar.
conservative. It would
that is
not,
surprising to see them drop,
more.
Additional government aid
be
Prices Decline?
Granting that agricultural prices
the $64 question
is—when and how far?
As
of persons can
possibly know enough to say what
the right price is with enough cer¬
tainty to justify the dangerous in¬
terference
with economic laws.
When I see the great increase in.
counted on.
should not be
Now that
only 22% of the voters
the long-range out¬
farm bloc's power
Our farmer-labor
farmers,
are
must come down,
look is for the
to
when, the answer is any time
It seems that the new farm
product
fac
-
receiving more than a fair return :
in relation to other members of ,
now.
Goods
(
the entrance of excompetiton.
It has been
demonstrated that the farmer is <
stomachs.
Will
35% as re-
cessive
for the housewife as recently
as a year ago, but it is doubtful.
Even if so, one must be convinced
tha the disparity is too wide and
Far
•
1910.
as
discourages
ages
How
We
fruit.
The
It may be that restaurant
food short¬
on
more
defined
sales were effected by
people are economizing
and
Equilibrium Price
What is
over
-
feeding more people than ever •
cently
establishments are up
average
ago.
productivity per
the technology of produc¬
as
22%, whereas it was
drinking places are down 3%
at the same time that sales of most
an
history f of :
industries, is '
before, but the percentage of pop¬
ulation on the farm today is only
and
to
Competition of Manufactured
One of the most important
the
proceeds and the machine age :
tion
thing that people economize on is
their stomachs.
Sales of eating
other retail
,
connected
equilibrium line
believes that the
depression because his receipts
fallen. He said that he had
10 of
would have all of the
money
tors
theory.
:
~
zation with which I am
still
men
cultural
dictatorship,
of
most
people it is no wonder that an
extraordinary
demamj was fo-
of the Charlie Michelson's on even
native's economic policies. The alternative
system. w$(Ji these confusions and inefficiencies,
being tyrannical
constitutes
he
for
•
points,,
below
equilibrium line. The organi-
the
observed, and his father before
him had observed, that restaurant
sales were one of the most sensi¬
tive barometers because the first
the new
money to the little man.
He has
as great an
appetitie for food as
anyone, and with more money and
a
the 100
the determination of the
to
family will stand relatively
During the period of expan¬
our tax structure distributed
island
*
-
is
sion
worrying
"private deficit financing"
as
still.
one
They usually go above and
had
the dollar wealth of the aver¬
age
financing.uP°n food-
insufficiency of future buying power, he and his Reserve
Board chief
and
of this absurdly inconsistent position
a
increas¬
From now
ing and it-felt good.
excessive hardship on the American people."
was
prices should go, about
can do is to determine what
always stop at their value
might have been.
and are con¬
produced in quantity
tools are available.
much
So
wealth
great expansion the dollar
It
effort to
an
;
down
equilibrium price should be in this
economy.
We know that when
markets start down they do not
going on in practice?
In 1936
was talking with a restauranteur.
He stated there was going to be
He cannot look forward to
much more more. During the
apparently is only profits and prices, not taxes, which "impose an
absurd
more
The average
had income of $540 in 1939
will have about $1,240 this
and
all
have had,
we
easily
person
depression; and that this "gap" between
and consumption
relatively little.
-
tinuing to have, a rapid reversal
and farm products will be more
ahead will affect the average per¬
son
determine how
In
far
the manproductivity of farm work
Now
further increase which is
Any
;
shortage on the farm,
shortage of
not what it
was
Sy
v"
together,
give
confidence that
there^will be no war with Russia.
machinery and fertilizer
the Treasury is hold¬
good swing.
,
aut since there was a
lour
,
taken
selves but convincing when
-
manpower
>
for¬
own
our
bears
ing on to its right arm and\reventing the Federal from taming
a
ample has induced
eign policy. Scores of spot reports,
which are inadequate in them-
cent
threatening
ful. Probably
Disregarding the public sophistry about "inflation" and "de¬
flation"
say
"Under
[high employment and national
independent
man
toward the big bully
his aim for delay, Secretary Snyder says:
support
these favorable economic conditions
because she
Russia, and it is under¬
stood that the Czechoslovakian ex¬
be
to
stood up to
production job, but not what
it could have done with more men
and tools: Another way of saying
this is that not only was there a
budget,
some
war.
most other American
gestures
inflation. It
has taken off its coat and started
shadow boxing. About all we have
seen
is footwork, but it is hope¬
made
Snyder-Truman Inconsistencies
and
poor
ligh prices. Farming was running
::orced draft and doing a magnifi¬
a
upon
that country is too
devastated to start a
Czechoslovakia is now said
to think
one
world han¬
farms all over the
information leads
dicapped production of farm goods
and further tended to stimulate
balanced govern¬
and Federal Re¬
serve
Bank policy which is now
deflationary at least in principle.
At least the Federal Reserve has
depends
cprrect and incorrect ones put forth by
proposed cut in tax rates woblds
on
although there will be some fur¬
ther increase in bank loans. Much
whether Mr. Hanes' esti¬
with Rus¬
war
a
on
The sketchy
sia.
tons.
from
demand
Greece,
/Turkey, Korea and other places
has delayed a break which would
have come before now.
Conceiv¬
ably,
other
new
arise
but
is
on
not
well
could
It
waning.
government is gradually
to
changing
something else. Labor is
already,
its
come¬
beginning
to
receive
uppance.
Even
^
with
modest rise,
to count
is, not believed that
demand's can be large
them.
these
it
demands
be
their
comparatively
hard goods' prices are
to
decline also and place a
double
competitive strain on high-
apt
e
/
.Volume 165
faluting
Number 4590
agricultural
Most manufacturers
THE COMMERCIAL & FINANCIAL CHRONICLE
either
are
Let me disclaim any
superior
special knowledge of agricultural
products. I am not a specialist in
them in any sense of the word.
(Continued from page 12)
:
To me, specific agricultural
prod¬
ucts
defy
satisfactory
analysis.
There are too many hazards, both
domestic and foreign.
Much de¬
pends upon whether there are
cron
years or
even
predict
am
sailor.
a
the
not.
I cannot
weather
and
I
New and old blights
and plagues harass the farmer and
the analyst constantly. Then, too,
there
unpredictable
are
changes
styles of eating.
in the
even
omists
td
psychological
purely
factors.
Professor
book
interest
on
Fisher
chapter to them.
hard
to
that
see
in
devotes
after
the
his
chapter
It is not
demand for
lars of
and
rooted in the
If
the
fix
"natural
equilibrium for the farm product
price index is about 130 to 135 as
these
now.
interest
chological,
forces"
Demand for Investible Funds
which
Federal Reserve Influence
share
of
the
This is at
no
battling for
are
consumer's
time when
a
larger
a
dollar.
more
men
and tools to produce crops are be¬
coming
available.
Agricultural
prices should drop closer to those
of manufactured
goods.
When the break
to
be
as
severe
the
as
it is apt
rise
was
unwholesome.
It is apt to have
of the characteristics of his¬
many
torical
declines in other markets.
Those caught with goods at falling
prices
will
scramble
to
unload.
Failing in this, they will seek
a
scapegoat.
Sometimes it will be
the farmer, sometimes the proces¬
retailer,
sor,
banker
Farm
values wjfll
with
go
money
for
comes
available.
machinery
as
The
it
be¬
farmer's
cash position
is not only good, it
is wonderful.
But in other indus¬
tries
seen
have
we
deteriorate
the cash posi¬
at
fantastic
a
rate when their booms
even
of
state¬
one
made
be
can
to
difficult
more
with
a
The pro¬
individual
investors
borrow¬
as
ing and' saving are not likely to
change
overnight.
Changes
in
prefer
to
follow
the
older
economists, the quantity of sav¬
ings) is a perfectly tangible factor,
whose
magnitude
moment
mated.
while
to
instant,
ured
given
esti¬
And the demand for
difficult
given
at any
known or
be
can
over
loans,
determine
also be
can
at
meas¬
period of months
a
a
or
Cause
of
if
Present
any
the fundamental
Rates
asks
one
of
cause
is
present
low interest rates in this country,
it is hardly necessary to look be¬
yond the quantity
of money and
bank deposits in existence.
That
quantity
biilions
(probably
great.
very
large
as
about
$170
1946) is
It is about IVi times
the
at
it
as
end
of
in
was
December,
Loans made for carrying unneces¬
doubt
that
the
bank
de¬
sarily high inventory or for en¬
abling a farmer; to pyramid his
land holdings are dangerous be¬
cause their
principle is unsound.
posits has been
are
help raise the standard
of all of
The farmer
us.
credit is the
or
they
of living
deserving
who is trying to
one
in
get his costs down.
in
powerful factor
permitting the Treasury to fi¬
a
$200-billion increase in
the
National
debt
at
declining
rates of interest.
One
may
readily concede to
champions of "natural forces"
the
that
the
It
by
say,
increase
wartime
supply
money
ated.
was
the
in
the
artificially cre¬
created, that is to
was
acts
of
the
govern¬
ment and
acts
its agencies, not by the
individual1 businessmen.
of
The
government provided
a
vast
amount of bonds to
buy; the Fed¬
System supplied the
eral Reserve
commercial banks with
ing flow of
unfail¬
an
to buy them.
reserves
The present structure of bank de¬
posits is comparable to any other
man-made
Hoover
structure,
Dam
It
was
but
is
there
it
stands,
Memories
—
A
Saga
of
Whirling
Gears — Eugene
W.
Lewis—Alved, Publishers, Detroit,
Mich.—Cloth—$3.50.
Business
Aids —How
is
Panama
there
just
before,
While
now.
real
as
it
the
as
weather.
The short-term interest rate, of
course, is still under the thumb
of the Federal Reserve
authorities,
and
Small
it
not
the
say
the
or
Canal.
Motor
has
been
for
great
a
many
to
years.
Indeed, it is practically
by Small axiomatic that in any country with
Commission, a central banking system, shortAmerican Bankers Association, 12 term rates will
be regulated by
East 36th Street, New York 16, the
monetary authority. There is
N. Y.—Paper.
very little evidence, on the other
hand, to suggest that long-term
Use'
Them—Compiled
Business
Credit
Stepping
Stones
Future—Arthur
Annual
Bureau
Report
of
Towards
F.
of
the
Burns—27th
the
Economic
National
Research
—
interest rates
by
the
are
Federal
being supported
Reserve System.
The Reserve banks have not been
active
in
the
market
for
longThe
National Bureau of Economic Re¬
term bonds for several
years.
search, Inc., 1819 Broadway, New
York 23, N. Y.—Paper.
proportion
turing
termeasures
merce
—
facts
dropped from
and
coun-
about
of
Com¬
of the United
States, Wash¬
ington 6, D. C.—Paper—250 (low: er
price in quantity)—Deluxe edi.tion
50c
five
Labor
Chamber
with reduction
on
tity orders.
quan¬
2 V2 %
not
bonds,
few
of
and
sale, there
the
government
the
has
50% in 1940 to
Reserve
position to do
a
terest
at
rates
This
the
present time.
finds confirma¬
viewpoint
tion in
recent
a
speech of Mr. Al¬
lan Sproul, President of the Fed¬
eral Reserve
Bank
of New
who remarked that
.
York,
opin¬
"in my
.
short-term
rates
securities."
Such
on
government
change,
a
the
vestible
funds
calculate
at
be
—can
Banks
hold
be
relatively
available
no
could
doubt
act,
for
that
if
it
in
earlier
an
demand
for
while
hard
—
in¬
to
over
a
period
encour¬
been
1946.
Flotations of corporate and
active
very
in business and real estate
loans of member banks was prob¬
ably about $7 billions. These two
figures combined reflect a total
demand for investment funds
for
business purposes in 1946 of about
$11.5
billions, as compared With
total of only $3.7
billions in
a
Sproul explained, would not
cessarily imply any marked
ne¬
1945.
in
crease
would
simply
the
of
be
the
to
Reserve
market
should
discretion
of
the
Board, at rates that could
well
down.
as
swollen
deposits
will
and
security issues
mount during
1947, but it is doubtful if the pace
of the increase will be so rapid
as it was in 1946.
It is important
to note that the energetic demand
to
investment funds
in
1946—at
time
on
the
Such
re¬
rates.
of
reducible
0hkfly by debt retirement
been
loans
continue
when the money supply
dropping at least as fast as it
likely to drop in 1947—evoked
only minor, increases in interest
volume
be
parnqf the government.
tirement-has
Bank
may
for
therefore, that from
the
on,
bank
rates, but
that support
mean
short-term
left
in¬
short-term
proceeding at
brisk pace in recent months. For
the year ending in March, 1947,
a
was
total
of
amount
securities
paid
government
off
in
cash
has
amounted
to about $27.4 billions,
roughly one-tenth of the national
The
debt.
reduction
in
govern¬
A
comparison of the inter¬
est rates
curities,
various classes of
on
se¬
tabulated in the Fed¬
as
eral
Reserve Bulletin, shows the
following changes between De¬
cember, 1945 and December, 1946:
Short-term
less)
year or
holdings of commer¬
however, was prob¬
ably not more than 55% to 60%
of this figure.
As every investor knows, the
cept
substantially
cial
banks,
program
of
1946
was made possible
by the Treas¬
ury's huge bank balances at the
beginning of the period. As Treas¬
ury bonds and certificates came
due,
the
interest
nine
of
years)
rates (one
about V\ of 1%.
rose
Medium-term
ment-bond
rates
(three
about
rose
to
15/100ths
1%.
Long-term
for
interest
municipal
rates, ex¬
bonds, were
able
conclusion
to
week
week
with
tax
now
been
reduced
of
isting
$21/2
It
-balances
funds
a
the
—
that
unless
there
inescap¬
is
a
pro¬
ex¬
longer
no
that,
in
1947,
might
be
applied
reducing bank-held gov¬
us
low interest rates would have im¬
portant
nessmen
neighborThese
can
has
normal
dent in the debt.
a
to
seems
to
billions.
make much of
accord¬
collections
working figure in
rood
in
It
consequences
for busi¬
as well as investors.
would
necessarily involve
continuation
It would carry a
tion
that
strong implica¬
stock
prices
in range higher
common
fluctuate
ernment bonds
would
its)
tha|n that established during the
1930's.
Other things being equal,
(and bank depos¬
will have to come from the
following
(1)
A
sources:
a
budgetary
surplus, if it
materializes.
There is as yet no
certainty that Congress will ear¬
mark any surplus funds for debt
retirement
in
could
hardly
at the
1947.
The
amount
$2
billions,
best.
exceed
$5
the
rate
dividend is worth more to
recipient when the interest
is 2 lk % than when the rate
is 3%%.
Finally, continued low interest
rates would help to stabilize in¬
dustrial
production at high levels
by stimulating the use of ven¬
excess of cash receipts
ture capital for new enterprises.
budgetary charges.
Income
The common fallacy that high
from Social Security taxes nor¬
interest rates encourage produc¬
mally runs well above expend¬
(2) The
over
itures
from
tive
the
investment
is
based
upon
a
corresponding
Trust funds; and there are sever¬ regrettable confusion in the mean¬
al
other items of expense that ing of the word "investment" it¬
self.
Investment
is
generally
will
not
involve,
important
cash outgo in 1947.
Surplus cash
from these sources might amount
about $3
to
(3)
to
billions.
Net sales of savings-bonds
non-bank
ceeds
be
any
of
investors.
these
estimated
at
sales,
about
The
pro¬
which may
$1 billion,
could be used to retire bank-held
debt.
It would appear from these fig¬
Presidential Aide
Anticipates More
Labor Trouble
(Continued from page 3)
measures are
stoppages
ineffective and work
occur.
Dr. Clark called attention to the
fact that in the President's "State
of the Union" message of Jan. 6,
1947, the President was "more
courageous." He then asked for
immediate consideration of legis¬
lation which would settle, if pos¬
sible, controversies of critical im¬
portance and which, if settlement
failed, would provide methods to
stop strikes and bring about con¬
tinuance of essential services.
Clark
had
gone
legisla¬
to describe
on
Dr.
President
the
that
stated
tion which could be effective.
Clark
the
thinks
public
events
of
part
that
time
as
be
forced
study that
President's
follows:
the
as
Dr.
passes
and
will
re-read
to
reading
by
message
The
V
President, the Congress,
and
labor
mope a continuing responsibil¬
ity^0 cooperate in seeking and
■finding the solution of these
[management - labor] problems.
I therefore recommend that the
Commission
be
composed
as
follows: 12 to be chosen by the
Congress from the members of
both parties in the House and the
Senate, and 8 representing the
public, management, and labor,
to be appointed by the Presi¬
and
management
dent.
•
-
should
Commission
be
charged with investigating and
recommendations upon
certain major subjects, among
others:
First, the special and unique
problem of Nation-wide strikes
affecting the
in vital industries
public
as the act of the lend¬
from the standpoint of
lender, it is high, rather than
low, interest rates that encourage
particular,
In
interest.
the Commission should examine
into the question of
tle
how to set¬
prevent such strikes with¬
or
endangering
out
general
our
democratic freedoms.
Upon
a
of
high prices for
bonds and preferred stocks of in¬
vestment quality.
that
towards
un¬
making
seems
Treasury
ance
L'Aulne, Minister of Finance
der Louis XVI.
The
simply drew found change in public psychol¬
down its balances and paid them ogy and the state of public con¬
off.
The size of the Treasury's fidence,
only the most gradual
bank
deposits—aside
from
de¬ rise in interest rates is to be ex¬
posits with the Federal Reserve pected over the next few years.
Bank,
which
fluctuate
widely
The
persistence of relatively
from
This comparison was made, not
by John Maynard Keynes, but by
Jacques Turgot, Baron de
unchanged.
Conclusion
The
for
Robert
is
a
the
resources
progressively
are
brought to light.
during
municipal
securities
for
new
money apparently exceeded $4.5
billions last year; while the in¬
Mr.
new
new
That demand appears to
have
crease
cultivation and
exploitation
buy
particular moment
a
measured
of time.
as
time.
present
Reserve
bonds
can
in
buying long-term
now
such
(ma¬
portfolio
the
the
been
bonds
years)
over
at
Although
have
such
Reserve
the
Within
Movement—The
of
over
Federal
Communists
Federal
in
stated
was
paragraph,
debt-retirement
rise
a
nance
food
safer because
the
not
raising long-term in¬
now
what
can
processor
that
are
we
much about
It appears,
man
productivity of the farmer
banks
proposition,
be moved up as
years.
reasonable
Loans made to raise the man-hour
believe
.
No
over.
practical
a
of
1940.
were
As
hoarding or spending ion, substantial changes in inter¬
cash are likely to occur only grad¬ est rates, affecting all maturities
are
now
impractical." The
ually and over a long period of
only change in existing policies
time.
advocated by Mr. Sproul, was "the
Meanwhile,
the
quantity
of
defrosting of the presently frozen
money and bank deposits (or' if
habits
f
land
difficult
be
must
such matters
Thus
the prices of farm products. The
farmer will spend more of his
tions
clivities
towards
govern¬
or
ment.
that
But there is
that
you
comes
appear
As
psy¬
good deal of confidence.
longer
have a swelling money supply to
bolster them.
With rapidly in¬
creasing
strength
manufactured
products
mostly
are
would
and
predict.
ment
prices
it
forces
measure
to
Summary and Conclusion
rates
low interest rates that
age the railroads to
short-term securities. Such bonds will be held
the,^supply of savings
by commercial
foresight or lack action, by forcing the banks to banks; hence it is unlikely that
of foresight,
the expectation of liquidate large quantities of gov¬ bank deposits will drop (as a re¬
profit, or the desire for safety of ernment bonds, would undoubt¬ sult of defcjt retirement) by as
individual investors.
Habit alone edly have severe repercussions on much as $6 billions. Even if
they
—the prevailing view of what the long-term interest rates. It would
should, the cut in the money sup¬
also ruin the market for govern¬
rate
of interest
ought to be —
ply would amount to only about
seems to be a
powerful influence ment bonds and produce a busi¬ 3M>% of the combined cash and
ness convulsion of the first
in
bank deposits outstanding.
mag¬
determining what the rate
nitude.
actually is.
loans
are
Using only fundamentals and
ignoring important special factors,
Agricultural
47
roll¬
ing stock and the electric com¬
chose, to decrease the quantity ofn ures that during the remainder of panies to build new
power plants.
bank deposits and raise interest 1947 the
government may have at In a famous simile, a drop in in¬
rates.
Theoretically, the Reserve its disposal something like $6 terest rates has been compared to
Banks could wipe out the reserve
billions, available to pay off ma¬ a drop in the water level of some
balances of member banks at any
turing bonds. It is quite unlikely, great inland sea. As the waters
time by selling a few billion dol¬
however, that all of the maturing recede foot by foot, new lands for
-
compared to 183
is
The Outlook for Interest Rates
re¬
ducing prices or wondering how
soon they will have to.
good
(2375)
products.
solution of this
a proper
problem may depend the whole
industrial future of the United
States. The paralyzing effects
of
Nation-wide strike in such
as
transportation,
a
industries
or communica¬
result in national dis¬
coal, oil, steel,
tions
can
We
such
only
traordinary
years,
by
ated
an
to
in
recent
the use
of ex¬
All
disaster,
war
those powers
In their place
able
been
have
aster.
avoid
will
powers.
soon
be gone.
there must be cre¬
adequate system and ef¬
fective machinery in these vital
fields. This problem will re¬
quire careful study and a bold
approach but an approach con¬
sistent with the preservation of
the
of our people.
The
pressing. The Commis¬
its earliest
rights
need
is
sion should give this
attention.
thought of
er;
investment.
But it is the borrow¬
not the lender, who actually
(invests) the money in nbw
plant and new equipment.
And
from the standpoint of the bor¬
rower it is low, not high interest
rates, that promote investment. It
er,
uses
Resigns From Board
and
the
Frederick
of the firm
Winckler, member
investment
Detroit
nounces
his
Board
of
Wines
&
tive
J.
Shader-Winckler Co.,
house,
an¬
resignation from the
Directors
of
La
Salle
Champagne, Inc., effec¬
April 1, 1947.
CHRONICLE
THE COMMERCIAL & FINANCIAL
(2376)
Menace oi Rising
Federal Expenditures
hard-pressed educational institu¬
tions, might very possibly accom¬
plish.
We have here just one of the
quickie bill," so
assumption 'that it
government
of the way in which
government spending may be used
by those who seek Federal usur¬
pation of the powers and obli¬
gations of the state and local gov¬
ernments and further regimenta¬
No further material tax reduction
the
greenback
And
form.
and
than neutralize any
more
benefits of the spending.
As to control of the
possible
business
been
the practical
it in the nine¬
theoretically,
test which
we
gave
thirties
teen
anything
was
Irrespon¬
the
not
of
aspect
with
rather
is
concern
the
fact
government spending neces¬
sitates either (1) a corresponding
burden of taxation or (2) deficit
and borrowing. There is no other
Government must spend money
course—and a great deal of
consider first
money
in these modern times—to
the cost of performing its es¬
sential functions. When any such
function is worth to the people
what it costs, then, and only then,
is government spending justified.
There is no dispute about this sort
choice.
pay
of
turbing
the
second of these alternatives.
I
may
inferior
not
free
to
of
don't
we
spending by
past dozen
years
while the balanced budget
be all right now and then,
have to have it; that
ever
national
This may be set forth under two
however large
growing (one enthu¬
up to four trillon dol¬
lars) need not worry us; that the
public debt is an addition to the
nation's capital; and that really it
isn't a debt anyway, since we owe
it to ourselves. I am sure you wil
principal heads.
recall
private
individuals
associa¬
and
is
what
we
siast
call the
may
negative side of the
Let
case.
us
glance (very briefly) at the posi¬
side
tive
debt,
and rapidly
tions.
This
of the consequences of
government
expenditure.
lavish
In
the
first
spend huge
place
sums
to
freedom
power
I
to
of money gives
an
instrument
government
which it may use to
build up its
the people.
Govern¬
ment money may bribe the people
to
give up rights which they
might never be persuaded to sur
over
render
by their votes.
a single
example, there
has long been on foot a persistent
campaign to bring American pub
under
lot
a
might
our
own
memory,
nations due to
the^r
"It is
after
cal
now
.....
proposed to bureau-
bring into uniform¬
the
first
nothing
tended.
today and
rax
without
our
serious
effects
ion is not necessary. You know
as
well
as
I
that taxation
at
this
does
the
not
investment and weakens
motives
that
lead
business venture; it checks enter-
con
increased
of
of
The
the
glory and
of education
due
are
kind
to
in¬
the
in the
its
is
suc¬
United
freedom, to
pacities of local communities, and
to its being kept in close and con¬
stant touch with the
people them¬
selves.
;
.
Foi
.
Americans
oversight
and
to
now
direction
accept
of
their
tax-supported schools and col¬
leges
from
Washington
would
mean that they had failed to
learn
one
of
the
plainest and most
weighty lessons of the war.
.
"Once
more
to
tap the federal
have
Even
and
cost
spending must be controlled, both
to preserve our Federal form of
r°rm lts essential tuncuoiis.
Civilian Personnel
Uo
the
.
escaped such experi¬
though in somewhat milder
not
do
think
need
to
go
along this path. The defi¬
cit spending school, that was re¬
cently so vocal and so well en¬
in
high
places, is now,
happily, more or less in eclipse.
Public opiiffon today appears to
be generally against deficit spend¬
ing and in favor of the balanced
budget. This includes most of our
Congressional lead&rs — of
both
political parties—as well as the
the
tablish
fortable
that
assurance
now
Washington, and another
main problem of Federal
inspectors
and
expenditure
look
our
at
army of
roaming at large
throughout the land, will not only
-fail to accomplish any permanent
improvement in the
education
of
our
people, but it will assist in
effecting so great a revolution in
American form of government
one
day to endanger its
petuity. ..."
I incline to think that the
per¬
great
majority of the American people,
brought face-to-face with the
question, would
agree
with Presi¬
dent Butler. It would take
argument
to
their minds.
cannot
do,
subsidies
make
But
what
the lure
for
them
of
a
lot of
change
argument
state
aid,
is
revenue
solved.
But
the figures. No sense of
comfort
should
flow, I submit,
from
ment
expenditures
tailment
is
the
is
of
that
key
to
such
i
The
Chamber urged
debt,
that there
should be abolition of all
war
ac-
tivities and other government op¬
erations no longer needed, rapid
reduction
of
of
the number
a
during the past war had we had a
unified
during the war is of course
To expect at least
General Marshall agreed with Sec-
was
a
rou„hlv
iu"b"v
corresponding decrease
would seem reason±
cept it ran into billions of dollars,"
retary Patterson
thl
Orm
_
The
number
total
civilian
excluding War Department per¬
sonnel outside the U. S. was 2-
—"By
nu^ber haJd
132422,
However,
gov¬
employees and, until improvemets Jn the fiscal position,
deferment of any expensive new
the
of
the
is
things
$7.3
ally, an average payment of $300
veteran. We are pay¬
for every war
ing annually nearly a billion dol¬
ars
in
veterans'
employment
November, 1948. this
allowances,
been reduced to 2,
decrease
a
thn
that stands
billion that vet¬
erans' benefits are costing annu¬
-i
,
Federal
of
personnel in August, 1945,
of
One
out
abie-
it
between these
ernment
Military: Establishment,
.
Secretary Patterson said, ,N$, ex—
there
after the war
cur¬
the prob¬
lems of lower taxes, reduced
and a stable fiscal system.
employees in
,.n(ferstandable
"
"crucial
reasonable guess as to the ex-
penditures we might have saved
creat in-
Tbat
crease
ago it de-
a year
clared that curtailment of govern¬
business
oi 783,555.
is significant that
dates the War and
despite
high
level
activity and widespread
readjust¬
billion,
Total
shortages.
labor
ments benefits come to $3.5
Navy
in
national budget balanced,
time of peace, at the level of
37 Vz
one
billion
think
dolars.
that
And
this
let
solves
nos
our
budget problem. All it does is to
bring us to the second aspect of
lavish
government
spending;
namely, heavy taxation.
Assuming agreement upon the
budget,
the
present
charges against swollen govern¬
balanced
ment
expenditure
cessitates
an
is
that
it
ne¬
overwhelming burden
of taxation.
*
Certain tax changes were made
Revenue
Act of
1945,—the
of
tion
,
„„
.„
times the average, annual expend-
wbbp thp
iture of the national government
in
the
decade following
World
296,154. In othei words, whi e
war establishments were reducing
War I
(1922-31), that I
question.
Obviously
no
propose
to
one—least of all
ought to spend in the
personnel, more than a quarter Ox
neutralized by
establish¬
months the tota1
their reduction was
increases
ments.
the
in
15
In
other
^ipersonncl has declined by
year
com-
Jh
latest
fieures
Federa
on
ha^L^ln^ thought toWJ* personnel that I have are
^ the
bv Senator Bvrd
khave given expeit
<-nppph
hni&n'" ^ 1
$n2l °
, o.o
were
wounded in action—a thirty-
fold
increase
aJTOJmal
f?om
(in
a
the
nWb"l9194^
Seuate
The total civilian personnel employed
relation to -the
Another,
is the heavy cost of^hospi¬
in
number of the wounded.
factor
talization;
thirds
in
T/tetra0!
a
education, loans to in the
strong position. At its
■
seen
treasury qnder the guise of aiding
the states, and once more to es¬
army of bureaucrats at
a
meeting
a
must there
Federal Government establish10
by the
while pensions come to $2.5 billion.
Departments show a reduc¬
Whereas 18 months after the end
1,079,709. That the total
of
World
War I, pensions for
personnel declined considerably
undertakings, even those of sub¬
service-connected disabilities were
less than that is due to the fact
President and his administrative
stantial merit,
being paid to about one out of
advisors. Apparently we no longer
that, in this same period, the oldThe Federal budget
for 1948
10
men
wounded
in -action,'
line
establishment
(other than
have to argue the case for the
proposes
government
expendiin the same period after World
War
balanced budget.
Department, Navy Depart-1
lures oi Jfo<-V2 oiiuou. ii is mis uuWar II pensions were being paid'
The danger now is that, having
precedented' sum,' nearly twelve men.t'. and
h" to nearly three times as many as
national budget on the
way to be balanced, we may be
tempted to settle back in the com¬
an
annual
importance," and
we
further
trenched
,
has taken
America
Why
civilian
minv
cn
many
ask:
I
questiQn
g
Senator from South Dakota (Mr.
Gurney) asking if he could give
functions'
Again,
form.
I
tQ
];'mes as
Look
not
ences,
these factors does
force with unification,
any such differwith 75% of the men that you
We still ask: Why must it would ^have if you had separate
the Government in 1948 four
ence
monetary
in
we
have said: "Comparing the two
opposing plans, I should say you
could develop a more efficient
for
account
not
withou
costs
General Eisenhower is reported tc
certain
and
obligations consequent
t inevitably lead to
cost.
But giving full
recognition to
the fis
see
chaos
inflation,
8
regarding the proposed
unifications of the armed services
mittee,
that
recognize
salaries, higher
gmatprials
,
into
men
in the Army and Navy De-
partment is to be only^ $170 less
than it was at the height of war.
Here perhaps may be part.of
essential functions the answer. In testifying before
it spent less than the Senate Military Affairs Comd
dries up
collapse
War.
man
Why, I ask,' must the Government spend as much as $37V2 billions in 1948?
Presumably it was
performing its
merely lower the(
4n 1939, when
living standard of the nation.
It
<?;Q
billions
We
discourages thrift and saving; it
0
•
level
4-1
£
..
nroElem
To this audi-
economy.
encyaemonstration of this propo-
inability to'finance
government
debauch.
its unevenness, to its reflection of
the needs and ambitions and ca¬
if
h
immediately
World
economic
and
deficits,
ity the educational system of the
whole United States, while mak¬
ing the most solemn assurances
as
war
„
University, said:>'■irqo-u
cratize and to
our
TOP
reca
can
near
in France during and
umbia
1
upon
nonsense
we
sian finance and the
annual report as President of Col¬
States
such
more
about you
cesses
whole $37%
billions are needed, that any cut
will force abandbnment of goveminent functions and impairment
of the government services.
New, nobody wants td limit the
government's spending power to
budget say that the
.
pause
of domination by the federal
gov¬
ernment.
Twenty-six years ago
Dr. Nicholas Murray Butler, in his
that
01
continue
the collapse of German and Rus
degree
some
said
here to refute this
brand of theory. I might remind
you
of
the
inevitable
conse
quences of reckless finance in the
form of deficit, bankruptcy, de
fault, paper money, inflation, fis
cal and economic collapse.
The
pages of history are filled wit
the record. Without going back of
To cite
lie education
believe that the civilian employment, beginning July 1, 1947, can
be reduced to 1,600,000, and perhaps to 1,500,000, at a saving to
burden of war taxes.
the Public Treasury at the rate of
The 1948 Budget
$2,500,000,000 a year on the basis
of present employment, and nearThe Budget for 1948 proposes
ly that much on the basis of
total taxes, not including the em¬
the extent of preventing the per- Budget estimates."
ployment taxes, of 34% billion
formance of its essential functions.
No one would wish, by a nigdollars. Thus, in the third year,
after the pna of the war, a tax But I am certain that very sub- gardly control of money, to hamend
.oad is
proposed which is onlv stantial cuts could be made with- per the War and Navy Depart$81/4 billions less than the highest out producing any such result.
ments in the performance of their
amount we endured in any war
* the first Place the Govern- functions, so vitally essential to
year- i e
$43 billions in 1945
In ment now
does a good many our national preservation. But
comparative terms the tax load things that, in my opinion, could when we are told that any cut in
in the third year of peace k to be not qualify as essential functions, the appropriations for these serv¬
icer 80%of a ve^^
at As a single example, I suggest a ices would necessitate curtailment
the hei^t of tlfe war from which good share of the billion dollars of their functions,
thinkje are
we have recently emerged.
Our that went in Federal aid to State ert tied to more
g UP° *e
nea'-e-time tax load is to hp six and local governments in 1946. way their money is spent.
Why,
times the highest amount collected Careful scrutiny of the details of I ask
must the personal mainin any one year of World War I the Federal Governments expen- tenance of a member of the armed
($5,728 million in 1920)
ditures would,-1 think, enable any- services (not including arms, amSuch
taxation
is
utterlv
nnone to compile an impressive list munition, or the engines of war)
precedented in time o" place The of obiects for which the Govern- be now, as estimated in the 1948
proposed 1948 tax load is nearly ment spends money that are not budget 2yyimesas much as ,t
seven times the amount collected essential Government functions. If
^as in 1940($3,100 in 1948 as
curtailment of the authority to compared with $l,38b in 1940)?
in 1940, just before the war. It is
spend should lead to abandonment
The total average cost per man
more than seven times the amount
of some of these functions, well in 1945, including everything, was
raised
in
1921, and nearly ten
and good.
'
$6,960. For 1948, the budget estitimes the tax level of 1922, fol¬
But let us not dwell upon this mates $6,790.
We are entitled to
lowing the close of World War I.
For, after all, it is the es- ask how it is that in the third
Such a load of taxation cannot I
AflVnUTons that'present the year of peace the average cost per
defend the present
who
Those
for
peace
v.
spending by government which is
is
course
deficit
in the
often
us
that,
there
of
as
financing and
public debt.
Apostles of this school have told
in
accumulation
the
no
think
I
aware,
all are, that there is a school
of thought that sees nothing dis¬
of
spending as such—
spending for the sake of spending.
this
well
am
you
benefits
to
us
Dangers of Deficit Financing
spending. But we are here con¬
sidering the supposed additional
As
Let
told the
speech * which I
Senate
*$20 billions in the very near
and it is now
still another
place,
that
of
>
that
but
confirmatory.
of
is
this
But
the
just
was
the nation shall
continue to bear substantially the
to
power
taken
year
government spending to which I
am
directing your principal at¬
tention this morning. My present
demonstrated
and
never
has
proposed
spend
public
money may be very potent instru¬
ment in the attack upon the liber¬
ties of a free people.
sible
cycle,
the
proposition,
though
vigorously advocated
by
some,
has
of Federal power.
tion
temporary, and accompanied by
inflation, whose baleful
results
performing its essential func-
limit of $31 y2
a
should^not strive for'a^eveTcloser
examples
then
the effect is only superficial
recom- was
billion, tions at these dates, we want to
In what follows you may consider know why it now requires 3y2
that I am thinking of an expendi- times as many employees as in
called—on the
ture level of about $30 billion.
1932 and more than double the
mended
(Continued from page 2)
hance purchasing power or in¬
crease employment of labor.
Ac¬
complishment of these results by
spending is possible
only when the budget is out of
balance and the money is raised
by borrowing or directly issued in
has
Budget
Legislative
Thursday, May 1, 1947
-
yet
of the
veterans'
more
cases
than ;:twd^'
being treated •
hospitals and homes'
represent non-service
connected
disabilities.'.. I think we have- a
right to ask why this service has
cost
so
much.
Interest
now
to
on
the public debt, up
about $5 billions
a
year,
United is one item that is fixed beyond
may perhaps be regarded as still States on Jan. 1, 1947, was 1,987,revison, so long as the amount
in the transition period between
718. This means a decrease in the and the form of the public debt
war and peace.
17 months since August, 1945, of
remain as they are.
But why,
Personally I believe that if all 928,259,,or only 32%.
after eliminating the British loan
Going back to December, 1939,
concerned were imbued with the
will
to
do
so,
the Government's
expenditures could be held down
to
$25 billion in 1948. The Joint
Committee
of
Congress
on
within
the
continental
the Federal Government
836 civilian employees;
had 928,-
in Decem¬
ber, 1932, the number was
the Assuming
that
the
563,805.
Government
and
interest
on
the
public debt,
should the essential government
functions performed by the Treas¬
ury
Department, cost ten times as
Volume
165
Number 4590
THE COMMERCIAL &
FINANCIAL CHRONICLE
(2377)
much in 1948* as in 1939
(from
$294.5 million to $2,941.9 million)?
i
'Why should there be in the
interval
same
in the
Ttions
cost
of
of the
merce?
six-fold
a
the
Department
Even if
the
of
Com¬
than half
more
is
almost
Why
tions
must
the
performed
ment of Labor cost
much in 1948
In
1939
as
the
Depart¬
times
seven
was
func¬
as
expended in
fact, if we eliminate from
figure the cost of the
Children's
Bureau, which is no
longer in this department, the in¬
is 20 times.
crease
The
estimated expenditures of
the State Department for 1948 are
times
what
this
department
31
spent in 1939. In this case we have
an immediate
partial explanation
the
an
estimated
United
cost of
UNRRA,
participation and
Nations
aid to Greece and Turkey.
But
eliminating all these services, we
still have to ask why the remain¬
ing essential functions of the State
Department
much
as
in
must
1948
cost
in
as
ten
ing Expediter to wind
iairs
as
of Dec.
up
31, 1947.
six months of 1948 which
volved, he is asking
tion
of
$914,500
studies"
in
requested
Hous¬
his afFor the
are
on
of
car¬
ap¬
the
Budget.
I -have
laid
before
you
just
a
few examples out of the multitude
of departments, bureaus and other
government establishments where
the facts loudly demand explana¬
tion of recent increases in expen¬
ditures.
May I now refer to one
more case, where there is at least
flagrant lack of fiscal control by
Congress and strong presumption
of
unnecessary
and
wasteful
ex¬
penditure of public money. I refer
to the
the
Corporation.
The
Rural
Administration in
makes loans for the
purpose
turn
extending electrical service
rural
districts.
Rural
The
loans
Electrification
tion may
in
by the
government corporations.
obviously
Eventually these
not recoverable.
budget contemplates that
wholly owned corporations
will have income next year of
znearly $1.5 billion, but expenses
of nearly $2.5 billion. These fig¬
ures indicate the huge scale upon
■which
government
corporations
bave been operating, but do not
reflect the power which has been
.-given them to obligate directly the
credit
of
•estimates
the Government.
of
this
power
Some
run
iiigh
as $30 billion.
These
•operations
have
not yet
as
huge
been
brought under adequate control by
the
Congress.
•
The
capital of most of
fthese
corporations
came
from
funds appropriated by Congress,
but they have obtained money for
fheir
operations
(generally
in
•
corporation
held by the Treasury must be can¬
celed. This means a
charge against
taxpayers'
net
is
or
increase
an
the
in
debt of the United States.
an
an
indirect
method
ital)
several
times
their
cap¬
usually guaranteed
as
to
appropriation.
chartered
under
state
law
without specific authority of
Congress. As practically all the
corporations with state charters
have been incorporated in juris¬
dictions which exercise little or
no
control
of
these
over
them, the
agencies
by
have
in
their
powers
been
directly
persons
de¬
inter¬
operation.
Conse¬
quently most of them are ex¬
tremely broad.
They have thus found them¬
selves cloaked with
powers, grant¬
ed by the
chartering states, be¬
yond anything that Congress con¬
templated, and some of them have
apparently been able successfully
to
flaunt
defiance
their
of
state
efforts
of
charters
the
in
United
States government to control their
activities.
Under
such
corporations
spend huge
conditions
have
been
these
able
to
of money with¬
out
appropriation by Congress,
without financial
accountability,
without
their
sums
adequate
reports,
operations
business
ship
with
con¬
been
of the
submitted
more are
for
and
mixed-owner¬
corporations.
number
Reports of a
corporations have
to
Congress, and
in process. Opportunities
economy
a
contingent
public
debt.
They have been permitted to use
as
they
saw
These
facts
which
I
such
instances.
have
They are,
that the 37V2
mate
of
cludes
to establish
laid
far
I
be¬
strong
if not absolute proof,
billion dollars
1948
esti¬
expenditures
than
more
and
for
in¬
would
be
economical
an
and
performance of the es¬
sential functions of the
national
government.
On this subject, Senator Homer
the Senate, in the
speech to which I have referred
Ferguson told
(Feb. 24, 1947), that: "As
ber
the
of
Senate
War
a
mem¬
Investi¬
gating Committee I have seen
countless examples of
waste, bad
judgment, and inefficiency, all of
which
inflated
proportion
I
to
spending, out
of
its
actual benefit.
to be fooled into
not ready
am
believing
that the malpractices
only wartime mistakes, am¬
plified by the need for speed.
are
Some
them
of
pfobably exist
to¬
state, territory, possession,
District of Columbia may
ue
after
agency
United
such
of
any
the
contin¬
or
June
30, 1948, as an
instrumentality of the
or
States.
Continuance
corporations
of
will
depend
reincorporation by Act of
Congress. All wholly-owned cor¬
-
porations
must make a showing
prior to June 30, 1948, as to the
need for continuance.
It should be obvious
conditions
unctions
of
government;
that
ance
these
of the
act
of
corporations
go
1945,
are
many
of
destined
out of business.
As
ap¬
regard
prospective receipts, and the
extravagant
duplications,
inconsistencies.
reaus and
hodge-podge
inefficiencies,
.
of
and
75 different bu¬
.
agencies of the Govern¬
ment that have
nificant
new
be
the most
of
one
49
sig¬
accomplishments
procedure.
of
the
The hope
is that
enue-raising committees have paid
early in the regular session there
little if any attention to
appropri¬ will be
developed a better per¬
ations, the new law requires joint spective of
the needs
study and consultation.'
The
joint
committee
of
the
House and Senate is directed to
submit a report to the respective
houses by February 15 of each
year, with a recommendation for
the maximum amount to be
ap¬
propriated,
together
with
for deficiencies.
serve
mated
receipts
mated
must
expenditures,
contain
re¬
a
If the esti¬
exceed
the
the
esti¬
report
a
recommendation
reduction of the public
the
debt.
If a deficit is in
prospect
there must be recommendation of
increase in the public debt.
the plan the submission
an
Under
of
the
committee report is in¬
tended to be followed
by approval
by the two houses of
resolution
for
the
a
concurrent
fixing
aggregate total to be appropriated.
The law provides that no
gen¬
eral
appropriation
bill
shall
be
considered in either house unless
printed
committee
reports
and
hearings have been available for
at least three
days. The commit¬
tees
on
houses
appropriations of the two
directed
are
to
develop,
acting jointly, a standard appro¬
priation
classification
schedule
which
will
uniform
define
in
accounts
concise
the
and
sub-totals
There is
more
of the government.
with
the
completion
of
The committees
on
propriations, with
debt.
or
to believe that
the
budget ceiling; that there will
be crystallization
sentiment away
from unduly liberal
spending.
-
Congress is
at present
operating
Legislative Reorganiza¬
under the
tion Act of 1946.
mittee
the
on
The Joint Com¬
Legislative Budget
on
Feb.
15, 1947,
recommended
that the expenditures for the
fis¬
year 1948 be limited to
$31.5
cal
billons—or $6 billions less than
proposed in the budget message.
A concurrent resolution
approv¬
ing
this
the House
recommendation
on Feb. 20.
The
Senate
lution
March
amended
3
to
passed
r
the
reso¬
provide
for
not
exceeding
billion—$4.5 billions less than
$33
expenditures
pro¬
posed in the budget message—and
also to provide that not less than
$2.6 billions of the excess of rev¬
enues over
applied
tional
from
expenditures should be
to
reduction
debt
and
that
of
the
all
na¬
proceeds
disposal of surplus property
be so applied.
These ac¬
should
tions
based
were
revenues
of
Conferees
to
date
on
estimated
$39.1 billions.
were
appointed, but
have made no
(April 30)
Twelve
major
appropriation
bills must be
adopted before July
1, in addition to the District of
Columbia and
some
supplemental
and
deficiency appropriations.
Only three of the general
propriation
bills
have
thus
view to their
a
? J
ap¬
far
(April 30)
fussed the House and
possible, are awaiting consideration of the
and also a study of the disposition
Senate Committee on
Appropria¬
of funds resulting from the sale
tions.
They are the appropriation
of government
property or serv¬ bill for the
Treasury and Post
ices by all departments and agen¬
Offj&srthe appropriation bill for
cies, with a view to adoption of a Labor and
Federal Security and
uniform
discontinuance
an important con¬
transportation
at least 15 dif¬
ferent agencies
14 agencies
dealing with forestry matters, and
where
funds.
mittee
nection
with
public housing.
.
a
economy-conscious Congress
emerge
from discussion of
will
report.
Reappropriation of unexpended
balances of appropriations is pro¬
hibited hereafter except in con¬
nection
reason
increases of
or
expenditures, taxes
of
appropriations asked for by
agencies in the executive branch
and possibil¬
ities of reductions
the
of
appropriatons are drected to make
a study of
existing permanent ap¬
an
to
prove
to
rev¬
Mr. Lindsay Warren, Comptrol¬
ler General of the United
States,
has this to say: "Our
Government
is in a mess... We have
developed
system of control of such
the appropriation bill for
Interior
Department.
.
The
...
results
of
the
joint
For
com¬
the
activities
covered
in
findings,
embodied
in these
bills,
the
appropriations
gatheririg statis¬
resolution, express estimated in the budget message
tics
34 different agencies could the
were
opinion of Congress as to the
about $6.1 billions.
Those
acquire land
one-fifth of the overall ceilings on
expenditures passed by the House were about a
entire land area of the United
and appropriations. No procedure $1.1 billion less.
States is owned by the Govern¬ is
These particular reductions in
prescribed for enforcing the
ment.
provisions of the resolution as appropriations, if maintained in
I have
obviously not been able adopted finally by the two houses. the Senate, will mean roughly an
to reduce my statement to a
It is presumed, however, that the equivalent decrease in
pre¬
expendi¬
cise
figure of the amount that appropriation committees will re¬ tures.
might be cut without impairing duce the amounts of the several
While substantial cuts
may be
essential
government
functions. bills so that the total will not expected in later
bills, we are,
But
when
we
recall
Senator exceed the ceiling established. To thus
far, a considerable distance
Byrd's estimate of a possible sav¬ this end more adequate staffs have from a
reduction of $5 or $6 bil¬
ing of 2Vz billions on salaries been provided for appropriations
lions below the budget proposals.
alone, and Senator Ferguson's con¬ committees, and greater technical This
indicates all the more need
clusion that a billion could be skill is developing.
for
continuous
insistence
unon
gained from disposal of assets of
A
concurrent
resolution
has pruning
It means that an alert
the government
corporations, and not the force of law, and even if and forceful
public demand for
think of the departments and bu¬
the ceiling were embodied in an economy
is
indispensable if a
less
no
than -35
the concurrent
...
.
.
.
tures
.
..
whose
reaus
.
for
estimated
1948
are
expendi¬
five,
ten, or
twenty times what sufficed for
the performance of their essential
functions
in
1939,
it
is
hard
to
doubt the
such
laws
proved
have
public works.
created
the
committees
bills
without
day, only in different forms."
practicability of saving
six
billion
dollars, or even, I
venture to
suggest, ten billions.
under
priating
for
Wastes
efficiency are
indicated. Reports are being made
for each fiscal year. No
whollyowned
government
corporation
fit the moneys re¬ shortly to
the
before you are merely a few sam¬
ples from literally hundreds of
required
Many of the corporations have
been
scrutinize
we
efficient
and
-principal and interest by the wasteful
unnecessary
ex¬
^United States, and those in the penditures
have
occurred
can
bands of the public thus consti¬ hardly be questioned.
In pursu¬
tute
and
Government
It
by
tions are
diligent
"if
government corporation's budget
as to
expenditure, we can deduct
a billion dollars from the
budget."
making
of
that, under
as
they have existed,
borrowing either from there has been ample opportunity
tthe public
or from
the United |or expenditure of money by these
States Treasury, in recent years
rporations far beyond what is
from the Treasury. Their obliga¬
quired to support the essential
•amount
are
24, 1947 that
pfe'sump'tion,
of the
upon
initial
Feb.
on
lieve, sufficient
notes
corporations
The
Senator Ferguson told the Sen¬
ate
and
the
Here
unnecessary government under¬
takings and reduction of spending.
expenditures must be written off
There are forty-odd government
Government
Corporations
Act,
corporations, of
which
28
are
which marked an important
step
wholly owned by the Government.
toward
bringing these corpora¬
The budget message forecasts that
tions under
budgetary and ac¬
t>y June 30, 1948, the financial
counting control. These agencies
statement of the wholly
owned are
subject now to procedures of
•corporations will show them with the
Budget Bureau and the Gen¬
total assets of about $12.5 billion,
eral
Accounting
Office.
Last
□represented mainly by loans re¬
July there was enacted for the
ceivable,
lands,
structures
and first
time a "government corpora¬
equipment. They will show, how¬ tions
appropriations act," as one
ever, total liabilities of about $14.5 of
the supply bills. It
applied to
billion, representing mainly bonds, 33
corporations and independent
debentures
and
notes
payable.
agencies.
They will have paid-in capital
The General Accounting Office
and surplus of about $8.5 billion
has commenced the auditing of
but
an
accumulated
deficit
of
both
wholly-owned government
about $10.5 billion.
the
past.
great opportunity for curtailment
for 35 years.
funds of the corpora¬
Capital
the
of
run
ducted under the cloak of
secrecy.
In
1945
Congress enacted the
Government Corporations
in
money
is one
Administra¬
tions have been used for
payment
of subsidies which are
ested
Bureau
loans by borrow¬
Reconstruction Fi¬
Electrification
of
tests."
"technical
the
from
nance
fined
This item has been
by
tains funds for
$340,000
to
under contract with other
agencies.
proved
in¬
appropria¬
for
"special
The special studies are to be
ried
expend¬
instance, the Rural
Electrification Administration ob¬
than
For
and
an
addition
for
times
1939.
Present law requires the
•
Corpora¬
non-recoverable
itures.
ing
essential
by
legislation oD1945 in requir¬
proper accounting and exer¬
cising normal control, these cor¬
porations should certainly be able
made large advances to perform such
functions as are
authority of law to other properly within fheir domain with
agencies,
or
have far less expenditure of
made
five times the
amount spent in 1939.
under
the
have
under
department, the 1948 budget
estimate
1939.
tion,
Finance
succeeds
government
total estimated expenditure
of the
the
Reconstruction
Administration,
which accounts for
of
func-
government
ing
corporations, notably the
eliminate the
we
the
goods or properties or from re¬
payment of loans made by them.
Some
increase
essential
Civil Aeronautics
ceived by them from sale of their
Can
the
a
Congress accomplish
saving? As to this question
have
we
the
Act,
encouragement
Legislative
in
Reorganization
last August.
The
this act relating to
approved
sections
budget
most
new
of
matters
are
among-
its
Chamber
of
important.
Incidentally-,
Commerce
of
the
the
United
States
has for several years been work¬
ing hard for this reform, and the
act, Congress could amend, repeal, normal but liberal Federal budget
or
ignore it. Thus, the enforce¬ ^f $20-$25 billions is to be attained
ment of a ceiling provision will in the near future, in order to
depend
on
public opinion and on permit of a simplified, strength¬
Congress to pres¬ ened and sustainable revenue sys¬
spending agencies and tem.
the resistance of
from
sure
advocates
of
The
new
increased
or
Achievement in Budgetary
activities.
government
legislation will facili¬
tate this. The necessity for Con¬
gressional action on a budget ceil¬
ing for each fiscal year does much
to compel Senators and Represen¬
tatives to assume a responsibility
which could easily be avoided un¬
der the old system. It gives oppor¬
tunity to constituents to make
known their opinions upon partic¬
Procedure
new
.
However,
cently
thanks
to
the
prescribed procedure,
re¬
we
have
for the past three months
witnessing something unique
in American public
finance; that
is, debate in Congress and public
been
discussion in the
press
and else¬
where dealing simultaneously with
both expenditures and revenues
and giving attention to the over¬
all total of expenditures in rela^
pending.
general plan as now enacted is in
Heretofore the public, and for that tion to the revenues necessary to
accord with the Chamber's recom¬
matter, Congress, learned little accomplish a balance. This alone
mendations.
is a noteworthy achievement.
concerning the proposals of the
Briefly, the act sets up a joint appropriation
In recent weeks there has been
committees
until
ular phases of expenditures while
appropriation
bills
are
committee of all the members of about the time
they were to be
the committees of the two houses
voted upon—usually too late for
dealing with appropriations and an effective registration of
public
the raising of revenues. This joint sentiment.
expenditures
committee is required to meet at
out
,
the
sion
beginning of each regular
of
ses¬
The
will
recommendations
President.
Whereas heretofore the
of
and
struggle
that
flood
of
letters and telegrams
clearly the nationwide
sentiment for
infringing
much of
as
as
a
cut in
is possible with¬
upon essential gov¬
ernment services.
each
appropria¬
The sharp
measure, bringing the realiza¬
controversy provoked
the
tion to the Congress and to the by differences as to the amount
of
public of the scope and detail of possible reductions has been bene-
Congress to consider the tion
budget
debate
a
reflecting
appro¬
accompany
government
spending,
may
well
(Continued
on page
50)
Thursday, May 1, 1947
CHRONICLE
& FINANCIAL
THE COMMERCIAL
50
(2378)
principal
Widespread General Accounting Office should ageous stand against John L.
develop a system of control to
interest in proposed expenditures
Lewis, his stern
attitude with
assure compliance with the intent
tax cuts, and payment of debt
Russia
and
his choice of some
excellent men to replace the mis¬
early in the session.
Ample time of limitations in appropriations.
Further reform of Congressional
fits that he had inherited. He is
still remains for careful considera¬
procedures would help.
For in- anxious to increase his popularity
tion of appropriations.
than in other stance, a committee in either
being given to or appropriations may authorize
House having no relations to taxes
attention
More
continues
he
if
and
he
as
of $300,000,000 State1 of Illinois Service Recognition
A—the largest single piece of public financing other
borrowing in his-^
—
tory—was made April 30 by a .75% to 1.70%, according to ma¬
group of 124 underwriters headed turity. The 1967 to 1972 maturi¬
by The First National Bank of ties are being offered at dollar
Chicago, Harris Trust & Savings prices from 100 to 99.
has
Federal
Bank, The Northern Trust
Illinois
Continental
pany,
tional
and
Bank
Trust
Com¬
Na¬
Company
of Chicago, and Halsey, Stuart &
benefit greatly Co. Inc.
the various money
bills on the the establishment of a new activ¬ thereby. His attempt to improve
The bonds are dated
May 1,
his political fortune, with his eye
floors of the two Houses.
To a
1947 and mature $12,500,000 an¬
ity costing hundreds of millions of on
1948, will be an aid to business.
greater extent than formerly, co¬ dollars a year, and if the measure
nually from 1949 to 1972 inclu¬
This nation is headed for several
zens appear to
be interested and is
passed by the Congress and
sive, without option of prior pay¬
in a mood to hold members of
years of prosperity and the candi¬
ment. The 1949 to 1960 maturities
approved by the President the ap¬
date who hopes to win must be
Congress
responsible for their
propriations committees are vir¬
carry a 1 Vz % coupon rate while
in step with the times.
votes on fiscal matters.
the
1961 to 1972 maturities are
tually helpless. It is true that the
It
was
inevitable that there authorization provides no money,
l%s. Bonds maturing from 1949
is certainly
years
should be
confusion in the
some
of the new procedure
present circumstances.
initial
use
under
present difficulties
fixing of a budget
ceiling' are
attributable to a
change in party control in the two
Houses and in the pertinent com¬
mittees, to the initiation of a new
of the
Many
involved in the
system, to'major readjustments in
the transition from war to peace,
the
definite policy
as to the future defense program
and assistance sought for other
nations.
There has been less time
for detailed study-of the budget
be the case
than should
statement of the effect of
upon the budgetary
measure
incorporate
and
situation
statement in its report
upon
that
the
authorization before the measure
is
hereafter.
discussions, however,
The
Foreign Situation
law creates the
the
House a
absence of a
to the
eligible for vote.
should be careful
There
exam¬
proposal to concen¬
the
appropriation process
a
narrower period of time.
ination of the
trate
have
into
brought to the front the particular Senator Byrd has suggested that
expenditures on which there are there be a single appropriation
the widest differences of opinion, Act in place of a dozen or more
veterans separate measures. Certainly
international affairs and there is need for discouragement
public works. They have focused of the growing practice on the
attention on the swollen ranks of part of the executive agencies to
national defense,
such as
benefits,
government employees
1
and their
to
estimates
sending
defer
shed light upon
They have
cost.
Con¬
items until months
many obsdure, long-standing items after
the
budget is submitted.
of expenditure, and they have led Such practice, as well as defi¬
to
a
greater disposition to re¬ ciency appropriations, with claims
examine continuing commitments of
"emergencies" and "unusual
expensive activities.
There still remains much
gress on many
for
before the
done
to be
In
grants-in-aid
past
and their
accounts for an
States
to
now
out the means of
subdivisions
appreciable
portion of Federal expenditures.
Besides their costs, these grants
have far-reaching government im¬
development
couraged
projects because
the cost is met by the
Government.
There is a
of illpart of
Federal
curious
pattern of methods for determin¬
ing the bases of these matched
ou^ nation
The same
applies to sub¬
it is note¬
refusal of Federal aid
connection
this
worthy that
strongly
been
has
certain legislatures,
registered by
governors and
organizations.
local
There
is
a
particularly objec¬
legislation which
tionable form of
executive officers to
States to make
I authorizes
United
the
bind
expenditures. An instance is that
of the Housing Act of 1938, au¬
thorizing the housing authorities
to make annual contributions to
housing projects
in an amount of
period of
$28,000,000 a year for a
This is not an appro¬
priation, but the Act declares that
the "faith of the United States is
solemnly pledged to the payment
60
of
years.
all
contributions
contracted
obligations
were contained in the housing bill
which passed the Senate in the
last Congress and has been intro¬
duced in the present session to
provide about $150,000,000 a year
More extensive
for."
in
crisis
new
a
is
nature
threatening
encountered
be
soon
structure of
The
ment.
away
and
New
Cooperation between
C°nSress, with the increased
obligations.
now
available to it, and the
ex¬
York, Illinois, Massachusetts,
Connecticut
states.
certain
and
other
the first part of
authorized issue of $385,000,000
an
They
which
was
are
ratified by the
electorate in November,
will,
in
the
of
opinion
full
constitute
faith
Illinois
1946, and
counsel,
and
credit
obligations of the State of Illinois.
How Can We Avoid
Recession?
a
(Continued from page 3)
and
and
shortlived proportions,
store
erate
enough experience
serious depression some
up
to avoid a
few years hence.
during
the
to maintain
economic stability, avoid excessive
which,
nation
A
trials of war, was able
price level is still too high to com^
port with continued large-volume
operations. One vital example is
in
the
construction
industry,
where both residential building
and
business investment
threatened
already
and
are
impeded
Most
people
I^find are upset by
Stalin. There is noth¬
Russia and
cobbler's
The
lin.
inflation,
dous
i
year.
is
well to prefer
the
the first risk to
second, but we can get away
Joseph Sta¬ witi^this preference only if we do
not 'mfeftv this first risk to become
son,
who
by
too
great
or
hazard
it
too
fre¬
ployment and production. But it
can
be
done
if
reductions in
wholesale and
retail prices are
carefully synchronized, and if the
business and financial community
will power, ruthaccept sensible price reductions as
quently.
amazing
driving
a
basis
for optimism in going
Success
in this task requires
the leader of
ahead rather than as an evil omen
private enterprise perform
185 million people is very human that
counseling reduced operations.
and unders andable, indeed.
Of many of those stabilizing func¬
Price reductions may be a tem¬
course
he wants to get as much tions which the Government
porary inconvenience to those who
for Russia as he can. Russia has guided or controlled during the
make them, and may even cause
suffered
terribly from 'the war war. This means that private en¬ some
temporary
shrinkage
in
and
conditions
are
deplorable. terprise of its own accord needs
profit margins. But if this is not
Poverty, lack of food and housing tV pursue those price-wage-profit translated into reduced operations,
are very seifious problems for him
policies which add up to a healthy
either through fear or in the spec¬
to combat. But he knows just how and balanced economy.
ulative hope of still further price
far he can go and he also knows
The Government can make an
reductions, it will prove the wisest
that Russia needs financial help
important contribution by advis¬ kind of investment in sustained
£reat
courage,
force
has
from
the
govern¬
and may
unless in¬
our
Federal Govern¬
Government
of
the
United States is the largest opera¬
tion
on
the face of the globe, with
enormous
harm.
potentialities for good
Here is a challenge to
every
become
United States.
ing, from a nation-wide perspec¬
predict that in the tive, what adjustments will safe¬
near future we shall see that Gen¬
guard our economic health. Those
eral
Marshall has
made much who admit that the Government's
advice is sound but who argue
more progress than was expected.
I venture to
prosperity and lead to larger
its in
prof¬
the long run.
is the central
test which
now
faces the American system
of free enterprise. The successful
outcome of this test will be im¬
mensely salutary for our domestic
This
they left for Russia, both that businessmen, workers and
Vandenberg and
Con- farmers will not follow this ad-1nally told me that they were not vice voluntarily, or who criticize economy and correspondingly
going to Moscow, as nothing was the Government for not having strengthen our position in world
to be done there, but prepare the a specific program to execute this
affairs.
way for the next conference in advice itself, are engaged in selfWhile they extol
PHOENIX, ARIZ. — Benjamin London, where the peace treaties contradiction.
Pointer With Buckley
be
written.
Secretary
of the private
R. Bradley has become associated will
enterprise system,
PHILADELPHIA, PA.—Leon R.
with Kenneth A. Ellis and Co., State Marshall has succeeded in they lack/faith I^its ability volSecurity Building.
Mr. Bradley doing more than that, he has untarilw'to pursued wise eco¬ Pointer has been appointed reg¬
made Stalin realize that the time nomic oourse.
was formerly with H. C. Speer &
istered representative for North¬
has come for a
settlement.
In
Sons Co., in Chicago, for 16 years,
Private enterprise, of Mts own west Pennsylvania
by
Buckleyand recently with a local invest¬
diplomacy, there is always a lot free wifc jhas recently bein mak¬
Brothers, 1420 Walnut Street,
more
than meets
the eye and
ment firm.
ing peaceful wage adjustments of
members of the New York Stock
what we do not see clearly at the
a
moderate character which can
present is the bright side of im¬ help to keep buying poweir in line Exchange and other Exchanges;
pending events.
with a productive capacity which
Mr.' Pointer has been engaged in
Therefore, when we appraise will expand constantly if we con¬
the securiiies-business in Erie, Pa.^
tinue to make full use of our re¬
the probable course of the stock
and
vicinity for a number of
sources. It is reasonable to\ expect
Hardy & Co., 30 Broad Street, market it would be well for the
that private enterprise, of iits own years.
v *
New York City, members of the
investor to keep in mind that the
free will, can make price adjust¬
New York Stock Exchange, an¬
economic, political and foreign ments directed toward the same
nounce that J. Arthur Reed, for¬
Thomas E. Bates Rejoins *
situations all have a bright star end, where profit margins permit
merly a partner of Reed & Cutter,
and
where the maintenance of B. C. Christopher & Coin their horizon.
has become associated with the
high volume sales require.
Special to The Financial Chronicle
firm.
Neither a satisfactory wage pol¬
KANSAS CITY, MO.—Thomas
Before
Benjamin Bradley With
Kenneth A. Ellis Go.
J. Arthur Reed Now
With
Hardy & Go.
.
.
'
With Robt. F. McMaster Co.
With A. Lepper & Co(Special
a
plan for keeping itself
currently informed regard¬
ing expenditures and contractual
staff
taken
Russians
interest
are
and maintain tremen¬ by excessive pricing. In some in¬
dustries where this excessive pric¬
production, should certainly
ing persists, the organization of the
be able to make as good a record
into
under the
easier
conditions of industry is such as to facilitate
ing nations are all clamoring for
systematic and orderly price re¬
peace.
Doubtless, we could con¬
more of this territory and we are
ductions on a large enough scale
tinue this good record if we main¬
vainly trying to devise a way to
to be significant. These should be
tained the degree of Government
help the Germans to become self
made.
controls and interventions which
supporting. That we shall is some¬
The
price
reductions already
were
found inescapable in war¬
thing of which I am sure. In the
made are encouraging, but they
meantime, it is a challenge to our time. But we as a people are quite
do not measure up to what needs
statesmanship. The rest of Europe properly unwilling to elect that
to be done.
We prefer some risk of
will be much better off if they course.
It is a difficult feat of business
recessions or
depressions rather
can get a good harvest. Last year's
engineering to accomplish price
harvest was very
disappointing, than the risks involved in exces¬
reductions
without bringing on
governmental
interference
but there is great hope for this sive
with our traditional freedoms.
It corresponding deflation in em¬
finance of the most serious
ment
It is desirable that Congress de¬
more
and
that might be converted
v/ar products. The surround¬
and weathered many
strains
storms,
for 45 years.
velop
been
has
Poles
priced to yield from
are
bonds
the opinion of counsel,
from all present Federal income
taxes and are legal investment for
savings banks and trust funds in
Senators
sidies.
In
East
1966
to
These
empt, in
government have in If#?
lessnessn, and
withstood
strong
stresses
appropriations,
and the whole the thought and action of
subject of grants-in-aid requires patriotic American.
review.
in
dustry
com¬
our
and
or
supporting them¬
grainery
by
the
wealth of the Saar by the French
and we will not permit any in¬
Prussia
the
plications leading in instances to formed citizens and government
centralization of power and de¬ authorities take effective steps to
struction
of
local initiative. produce greater order, economy
Matched appropriations have en¬ and
efficiency in the towering
advised
Them
selves.
California)
67 million people with¬
are
ing mysterious about
conclusion, while
and
aggregate of
there
aged.
examples.
The
the size of the State of
monplace and should be discour¬
few
Here are a
been
have
circumstances,"
battle for sound
is won.
finance
done, business will
activity,
When it comes to the foreign
and the appropriations committees
situation, I believe that there are
are duly
bound to recommend a
more business men unnecessarily
.proper sum. It has been urged that
upset by Russia than anything
a legislative committee which pro¬
else. The real sore spot is Ger¬
poses an authorization should be
many, where in an area of ten
required to obtain from the Ap¬
thousand square miles (less than
propriation
Committee
of
its
but
undertaken being
Offering
than
his cour¬
were
reasons
ever
Bonds Series
(Continued from page 6)
49)
financing
goffered from yield of 0.70% to dollar price of 99.
aroused
It has
ficial.
Largest single piece of municipal
^
Stock Market
Federal Expenditures
(Continued from page
$300 Million Illinois Bonus Bonds Marketed
Appraising the
Rising
Menace of
-
to
The Financial
(Special
CINCINNATI, OHIO —William
F.
Kolb
has
been
added
to
the
Robert
South
of the Cincinnati Stock Exchange.
111.
of
The Financial
F.
A.
La
Chronicle)
IND. —William
of
McMaster & Co., 135
Salle Street, Chicago,
F. Wilson has
Lepper & Co., First
National Bank Building, members
staff
to
GREENFIELD,
Chronicle)
joined the. staff
icy nor
means
a
satisfactory price policy
the same wages or the same
industries or in all
prices in all
simply
businesses.
It
prompt and
sensible adjustments
to
means
situation.
obviously
crucial
meet each particular
There
are
spots in our economy
where the
E. Bates has
B. C.
rejoined the staff of
Christopher & Co., Board
Trade
Chicago
Stock
Exchange.
Bates has recently
mann
of
Building, members of the
&
Mr.
been with Uhl-
Benjamin.
^
Volume
Number 4590
165
THE COMMERCIAL & FINANCIAL CHRONICLE
(2379)
St
i
for
leadership—Obligation of
? t
Business Management
must somehow
we
find ways
'of
getting along better with one
And yet, at a time when
unity is our most critical need, we
see a disposition
on the part of
Imany groups of human beings to
.challenge all'other groups with
proclamations of special and paranother,
'
*
ticular
'"rights"—very,, often in¬
sisting that they are fundamental
'human
rights
this year,
when things are going
better, the number of Americans
that
who- think
should
the
Government
electric power
own
com¬
panies dropped 30%.
When government steps into our
affairs,
aU: resent it, but in a
we
democracy,-..when people feel that
things are .not going right, they
turn to government. Government
"interference" is, to a considerable
extent,^'an expression of public
-
therefore,
bound to be
We hear
about the rights-of management, dissatisfaction. We Americans al¬
the rights of labor, the rights of
ways want to "pass a law" to rem¬
other groups.
And on the world edy whatever abuses we think
stage, we hear about the rights of exist. But just "passing laws" is
and, ■
granted.
nations.
-
.
tain "inalienable"
rights—the right
to
life, liberty, and the pursuit
happiness. It is an article of
faith with us that these rights be¬
of
In
long to all men.
these rights are
pressed
opinion,
sometimes
sup¬
ignored, but they can
or
taken away.
be
never
our
who
we
have
racy
interests,
to
be
But they have an equal
sure.
ob¬
consider the interests
to
ligation
right
automobile—but not
You and I have
of others.
drive
to
democ¬
right to consider their
a
individual
own
a
an
a
side of the road.
a right to publish
advertisements—but not to make
the
on
wrong
You and I have
problems
others.
of
the matter is that
really "privileges"
The truth of
our
"rights"
are
us.
Freedom of speech
"
is
one
of the
men, and we
but the Ameri¬
people certainly do not believe
that the privilege gives American
Communists a right to seek the
overthrow of our Government.
free
of
privileges
hold it very dear,
can
Freedom
enterprise
of
is
an¬
other of the great privileges which
Americans enjoy.
More than any¬
thing else, it explains the position
of the United States of America
which
as a
is
It
today.
our
the
foundation
on
immense achievements
nation have been
built. What
has given us our high standard of
living is our capacity to produce,
and
our
productive capacity has
vigorous, competi¬
which freedom of en¬
its roots in the
tive spirit
terprise created.
Higher
Living
Standards
-
The
Free
Enterprise
question which I think we
might ask ourselves this evening
this:
is
them, it seems to me, is
a
steadily
advancing
standard of living in this country.
It is true, for example, that Amercars
in
92% of all the bathtubs
own
the world.
it is also
But
true
that 21% of American homes still
do
have
not
go
of
are
the obligations which
with this privilege of freedom
enterprise?"
.
To put
it another way:
"What
ii
the
price
which
that 50%
American people expect us to pay
for the rights and freedoms we
enjoy in American
industry?"
10%
of
It
that
true
is
60%
of
all
the
found
American
in
homes.
But it is also true that
nearly onethird of the 31,000,000 domestic
and farm users of electricity have
no
electric refrigerators and that
40%
have
not
do
washing
ma¬
not
do
so,
to
the
which
of
success
all
of
is
us.
country's strength. The
objective is to keep adding
our
real
The result is what counts.
always
are
Americans
brag about their air-
conditioning and are proud of the
fact that 2% million homes have
oil
burners
But
is
it
their
in
also
a
basements.
fact that 58%
of
American homes still do not have
central
heating squipment.
Our nation rides in millions of
but
automobiles,
families do
American
adults
this
in
not have
of
a
have had
any kind
great free educa¬
country
education of
formal
in
40%
Furthermore, about 2,800,000
car.
no
about
spite of
our
tional system, and approximately
60% of all adults have gone no
further
the
in
have
gone
There
school
than
through
grade. Less than 5%
through college.
eighth
can
be
standard
of
question that
living which we
enjoy in this country has been
created by freedom of enterprise.
the
20%
States
and
earn
47%
a
no
statistical fact that
families in the United
of all
less than $1,000 a year,
earn
less
than $2,000 a
incomes do not
go far when things cost as much
And
as
such
they do today.
It
is
perfectly clear to me that
sys'.em can create a higher
standard
of
living it is Only the
democratic system which has al¬
ready created the highest existing
standard of living.
lieve that
someone
attempt.
pany., But to insure our right to
by mass production freedom of enterprise we may now
give people this feeling of be facing an obligation to carry
time and effort well spent, they this kind of
long-range research
need
to
lpiow
that their part—
and
small
it
other fields.
however
be—is
may
an
brought
And
back
to
measuring stick of out¬
What People Want
So
it
to
seems
in
that
me
one
of
obligations is to understand
just what the things are that peo¬
ple want from their jobs in order
our
their
make
to
worth
In
effort
daily
seem
while.
great
of selling we
skill
people
or
All of
us
when
we
hour
because
can
works
at
a
pay
$5
man
a
he
him $1.50
pay
an
produces
worth of effort than when
to
ma¬
will be better off
$5
try
we
hour for 75
an
cents worth of effort.
in
have
finding out
want.
have
We
great obligation
it' seems to me,
businessmen,
to achieve
better
in
women
their
a
job in find¬
men and
industry
want from
they consider
ingredients of a sat¬
way of life under the
understand¬
mutual
that
the American
people
understand.
not
do
appar¬
We recently sent out a question¬
to everyone who works for
the
Ford
people
can
think
make
each
25%
The
year.
that
or
corpora¬
profit
that the
more
faqt
is
actual profit margin of all manu¬
facturing
corporations
Motor
of
people
our
fill
to
More
Co.
took the
question¬
inter¬
the
out
than
some very
say.
39% of them feel that the poli¬
cies
of
our
have
them.
company
explained
one-third
to
have
never
More
the
impres¬
sion that no effort is being made
to make them feel a part of the
Ford
Motor
them
of
More
Co.
think
that
than
there
half
should
be some
systematic way by which
could
make
their views
known directly to us. 62% think
that questionnaires and polls of
this kind are a good thing because
they give them a chance to ex¬
press their views.
they
Public opinion polls show, for
example, that 60% of the Ameri¬
tions
industrial
modern
naire
than
upon
of
society.
as
ing. And there are a great many
things about business and industry
this
in
These attitudes exist in
fact
the
that
an
spite of
overwhelming
neriod showed
Surveys
industry's
loss, not
a
indicate
a
75%
that
of
employees think that
stockholders and "top manage¬
ment" of corporations take more
employees say that they feel free
to talk to their immediate superi¬
out of the business than
ors
do.
ees
Yet,
employ¬
study
recent
a
showed
that 72 large industrial
companies in the country paid
three cents out of every sales dol¬
lar
in
the
plowed
form
back
1.6
of
dividends;
cents
into
the
business, paid 25.2 cents to em¬
ployees in salaries and wages; and
paid 64.2 cents to other companies
for
materials, parts, services, sup¬
plies, etc. Taxes took the remain¬
ing
six
cents.
Umployees
that
they get less
think
shareholders
ment"
times
to
and
actually
who
than
"top manage¬
almost
six
get
asjmuch as the amount paid
stockholders
reinvested
in
and
the
the
amount
business.
As to the share
paid to the men
"top management," if you add
up all the compensation of offi¬
cers of all corporations
during the
period
from
1931
to
1941,
amounts to 2.3% of sales.
of
it
Officers
large corporations—those with
assets of
$50,000,000 or more—get
only one-half of 1% of total in¬
come
American business and
from sales.
work
very
well
in
an
atmos¬
phere clouded by such misunder¬
standings.
If
a
ful¬
than
more
whenever
half
of
our
they want to about
themselves and their jobs.
our
may
democracy.
We have the obligation to work
toward
better sense of partner¬
a
ship among all groups in our in¬
dustrial democracy.
We face the
obligation to take leadership in
tackling the economic problems of
times, to acknowledge our
mistakes, and to keep on trying.
All other groups in our indus¬
our
trial democracy also have obliga¬
Unless labor
unions and
tions.
their
spokesmen
live
can
to
up
their responsibilities they, too, risk
curtailment or loss of rights. The
American people as a whole have
obligations.
We of industry are
partners with the people, and peo¬
ple have an obligation to be intel¬
ligent
and
understanding
about
their partners.
But
a key responsibility is ours
obligation of American busi¬
ness management.
The American
people expect us to manage. They
—an
look
are
we
to
for
us
leadership.
our
business and in the
ties
we
we
They
interested in the results
more
achieve than in the details of
have
to
difficul¬
overcome.
And
must
accept the task of pro¬
better understanding be¬
the
of people who
groups
share
the
responsibilty
achievement with
There
that
are many
solved,
and
problems ahead
all
would
we
for
us.
the
like
to
see
obligation
of
American business to demonstrate
leadership
heavy.
in
their
solution
is
I have little doubt that if
free
our
American
industry
de¬
In short, while our productive
techniques
have
met
gigantic
votes
needs, they have also created
problems.
Mass production has
given us a high standard of living,
tion, the people of the United
States, working together, can con¬
tinue to set a pattern of life under
but it has very
human
materially changed
relationships between
the
his
and
a
man
lions of men and women.
the factory worker is a
ing
Because
specialist,
longer has the kind of sat¬
complete
a
machine
freedom
for
the
whole
•
With Atwill & Co.
(Special
to
MIAMI
has
Rich
G.
with
The
Financial
BEACH,
Atwill
Chronicle)
FLA.—Albert
associated
become
&
Co., 605 Lincoln
Road. Mr. Rich was formerly with
the Ajax Corporation and Blair
F. Claybaugh & Co.
might
With A. G. Becker & Co.
enjoy.
It
enterprice
job,
ship between an employer and a
grouo of employees he knew in¬
timately does not exist for mil¬
no
traditional
world to follow.
between employer
and employee, between manage¬
ment and labor. The old relation¬
he
its
and energy to meeting this obliga¬
now seems
clear that
we
have
kept the development of our
relations in industry in
human
not
pace with the development of our
production technology.
Perhaps
for every dollar we spent in scien¬
tific research for the development
products and more effi¬
machines, we should have
(Special
to
The
CHICAGO,
Shender
has
Financial
ILL.
been
—
Chronicle)
added
staff of A. G. Becker &
120
bers
South La
of
the
L.
Burton
the
to
Co., Inc.,
Salle Street, mem¬
Chicago
Stock
Ex¬
change.
of better
No partnership can be expected
to
that
fact
isfaction which a craftsman build¬
of
have
rights as
well
depend
ability to continue to
problems of our great
industrial
tween
that
profit.
during
our
trucks
But
businessmen
moting
our employees think
products—the cars and
they have a hand in mak¬
ing—are as good or better values
than the products of our competi¬
tors.
They exist in spite of the
that
corporatikjihtements
Americans
prosperous.
saresr"
of all
obligations,
we
enterprise,
count&jtt&uring the 15 years from majority of
1925'!raHfe$40 was 3.2% of total
l®S^ermore, 58%
rights continu¬
our
stop paying we run
the risk of losing our rights.
With the right to freedom of
jobs—what
conditions
nership with the American people.
A
successful
partnership
de¬
pends
meeting
by
our
They had
esting things to
is
ally
greater
the
been
sense
We pay for our
meet
good
so
ing out what it is that
of part¬
a
gations with them.
the right we assert,,the
obligation we incur.
upon
economic
naire.
People
carry
done nearly
the
trouble
second
all enjoy
obli¬
The greater
we
States
filled, the obligation of making our
country incomparably strong and
22,000
Business in Partnership With
United
advantage
of determining what products will
sell readily and in large volume.
It is apparent that we have not
learned
isfactory
office
an
rights which
the
and when
the field
shown
what
still
summarize:
me
The
,
From Their Jobs
into
Summary
Let
Understand
in
chine.
experimentation
important part in the scheme of
things.
the essential
ently
chines.
else industry can find an answer to
will.
And, in my opinion, there problems like depressions and un¬
stable
employment.
Certainly I
are no other qualified
candidates
think they expect us to make the
for the job.
do
basic
responsibility,
Programs which merely drain off
the accumulated savings of earlier
and more vigorous times without
paying their way serve only to
Our
Perhaps for the very reason
that the people of America have
seen
what business and industry
first would be this:
have been able to accomplish in
The American peojple expect us creating this standard of living,
to show leader shiyKn tackling the they believe that we are capable
economic problerhs of our times. of finding an answer to
other
We must accept the obligation' problems, too. They aparently be¬
leadership primarily because if
social
of
unyielding
work, and not theories
It is
of all our homes still do not
will have answers of
your own. Let me give you some
which have occurred to me. My
of
face one harsh and
we
fact:
necessary. They are
the life of any com¬
011
to
is
And in trying to point the way,
homes and
farm
our
All of you
we
daring initiative that
is the essence of leadership.
have electricity.
if any
the
will take the
and
water
running
insurance
tions created
compared to rate
of pay—whether that person sits
One of
year.
"What
way.
How it is to be done, I for one
not know.
I do know that it
put per person
-
achieving
But it is still
Obligations of
point the
we
how
on
farsighfed and
do
the basic
Achieve
Must
granted by all of us to each one
of
successfully
depend
we
terest.
reputations
well
may
time, we ought to try to be clear
to what these problems are.-
as
are
to avoid damaging the
prise
to the capital of mankind by in¬
creased production and distribu¬
tion.
toward the solution of
problems of
our
electric refrigerators in the world
speak our minds—to say what we
think—but we have an obligation
ing honest solutions to such basic
problems. Our freedom of enter¬
the1 economic
working
false claims
against the public in¬
You and I have a right to
system, I believe that De¬
alone offers hope of find¬
mocracy
sap
obligation as business
leaders is to accept leadership in
If-our
so
institutions in
Men and
we
...
hotly defend our
rights are apt to forget that there
are obligations which
always go
with rights. Liberty is not license.
But
going: to solve the
face, today.
not
America believe in cer-
We in
Because I believe with all my constantly draw a sense of satis¬
heart in the superiority of Democ-. faction and
personal accomplish¬
racy and human freedom over any ment.
If work under the condi¬
other
(Continued from page 10)
rthat
security, and all that they have who work in industry, it is also been spent for long-range, scien¬
destitution, slavery a way b£ life, a day-to-day ex¬ tific research and experimentation.
insecurity.
*
perience from^ which they must
Large outlays of this kind are
achieved; is
and
better sense of
partnership
cient
spent
another dollar in research
problems of people in in¬
into the
(Special
to
The
CHICAGO,
dustry.
To increase
H. M. Byllesby Co.
production efficien¬
Adds
Financial
Chronicle)
ILL.
Thomas
—
J.
Welsh, formerly with Betts, Bor¬
land & Co., has become connected
with H. M. Byllesby and Com¬
obligation
among
the many groups which cy, American businessmen invest
I do not for a moment under¬
make up industrial democracy is billions of dollars
We dare not overlook the
annually in new
estimate the difficulties we face to be
pany,
Inc., 135 South La Salle
dangers if we do not rise to this
achieved, we in management plants,
improved
tools,
better Street.
in tackling problems of this scope.
also have a job of understanding
occasion.
We must have public
equipment and methods. During
We have seen people turn to gov¬
to do—particularly those of us in
confidence. And the public judges
the last quarter of 1946 such exernment
for
answers,
and
the mass
us on what we accomplish—not in
production industries.
With Bache & Co.
enditures were being made at the
world is littered with their tragic
theoretical terms, but in terms of
(Special to The Financial Chronicle)
Mass
rate of 14 billion dollars a year.
production is something
failures.
Nations have turned to
what Americans want out of life.
To bring our customers new and
more than a proven means toward
BOSTON, MASS.—William ,D.
Between 1936, for example, when government controls and to dic¬ goals of the future. To the large constantly better products, almost Davidson has
joined the staff of
things were not going well, and tatorships in a desperate search percentage of our fellow citizens 2% of total industry sales have Rarhp R, C.n
21 Cnneress Stfeet.
We dare not take this
lightly.
When the market stopped completely impersonal, in fact
all market trading should be
going down it took on an ap¬
on that basis.
Market has no
pearance I haven't seen in a
room for sentiment, hopes and
long time. Nothing that has
fears.
Just because you are
happened in the subsequent
days, up to the present, has long of a stock doesn't make
it a blue chip.
changed that. Yet, looking at
*
*
*
the market for the past few
months and adding the action
Summing it all up it ap¬
of the past few days, a certain pears as if the market is either
doubt arises.
forming a new base for a real
*
❖
*
advance or is getting ready
There's
nothing
unusual for another decline. If we
Tomorrow's
Markets
Walter
Whyle
Says—
WHYTEs
By WALTER
==
getting ready to start
Market
new
a
cline.
another de¬
Both possibilities indi¬
rally
or
about
action.
cated in recent
at
that is
hearted
the
arm
present
or
More next
didn't
He
find
it
amusing, or bother to reply.
He just grunted.
*
*
*
Anyway I'm now home,
lumps in the armpit and
raging fever. At least I'm sure
a raging fever even though
my doctor doesn't agree.
So
I'm busy thinking about the
stock market, which is a lucky
it's
Now
you.
lose with the
you can
that
assurance
the subsequent advice came
after due and careful delibera¬
levels
It has just
occured to me that perhaps
snap judgment might be bet¬
ter.
judgment.
Oh, well.
The
are
,
*
*
Schwabacher & Co.
Chicago
Exchange
New York Curb Exchange (Associate)
San Francisco Stock Exchange
Chicago Board of Trade
14 Wall Street
New York B, N. Y.
COrtlandt 7-4150
Teletype NY 1-928
Private Wires to
San
Francisco
Monterey
—
plus
—
Santa Barbara
—
-
Sacramento
Fresno
maturity date of the serial
The
company's outstanding cap¬
italization
the
sale
following completion of
comprise the $17,-
will
500,000 new 20-year debentures,
the $2,500,000 new serial deben¬
tures and 599,595 shares of com¬
mon stock without par value.
company
its subsidi¬
principally engaged in
company
are
Inc.
Trade
net
N. Y.
135
and
locomotives,
;
motors,
scales,
generators
are
On
have
could not
written."
It's up to you financial writers
to
be able
to
say
"Here's to our
presidents, without whose absence
this bright, fresh
tising
financial adver¬
could not have been
copy
written."
Do
would you
appeared in
to
unusual
rather
a
the
been
Morgan Stanley Places
du Pont Pfd.
A
on
Market
nation-wide group
of invest¬
headed by Morgan
Stanley & Co., is offering for pub¬
lic sale today 700,000 shares of E.
I. du Pont de Nemours & Co. $3.5Qk
ment bankers,
series preferred
stock, at $102 per
dividends, to
yield 3.43% to the investor.
share
invited
dedication of
a
saw
with
out whose absence this
a
How
the
of
flyleaf the author
had written: "To my wife, with¬
present
ing suit manufacturers and fabric
establishments in providing the
and
proceeds from the sale of
to the public, together
The
this
accrued
stock
with the proceeds
an
additional
from the sale of
shares of
300,000
such stock to the trustee of a Pen¬
sion Trust established by
the com¬
compared with $2,600,625
Net
in
sales last year aggre¬
gated $56,551,299 against $91,826,j
901 in the
preceding year.
ties
substantial expenditures-
and
that American for the construction of new manu¬
women
require. This significant facturing plant and research fa¬
cilities.
Cash requirements for
offering emphasizes the responsi¬
this program
and for increased;
bility we always feel to merit the
continuing confidence and trust of working capital needs are suclt
that the raising of substantial ad¬
our vast number of customers in
ditional capital for permanent use
this cherished community.
You
in the business is deemed advis¬
are
invited to discuss your suit
able at this time.
Construction;
requirements with our representa¬
expenditures during 1946 and the
tives who are always available for
first two months of 1947 amounted!
consultation in our suit depart¬
ment.
No
obligation,
and,
of to about $110,300,000 with unex¬
kind
of
course,
apparel
no
charge for
investiga¬
tion."
"Remember—I'm
not
exagger¬
ating—I swear that every syllable
that I have been using today has
been
culled
bank ads
within the past few
from your
that have run
weeks.
I wonder if the
Gimbels house¬
wares
"Your Housekeeping Needs
Are
Highly Diversified"
The prospectus points out thaty
according to va price; index the
has used for several
the sales prices of its prod¬
company
years,
ucts in 1946, on
the average, were
higher than in the year 1939;:
and that as a result
creases
of price in¬
during the latter part
the early part of
1946
and
sales
prices, on the average,
end of February,
12%
U.
S.
index
higher
than
Bureau
of all
the end of
different, explains the
at the
in
1939.
The
Statistics
of Labor
wholesale
prices at
the
higher
February, 1947, on
than in 1939
of
1947^
1947, were about
"Recognition, by the executive other
hand, was about 90%
of this establishment, that your
kitchen is
28^
pended authorizations at Feb.
1947 of about $133,500,000.
no
and
profit for 1946 totaled $3,079,-
1945.
PITTSBURGH
GENEVA, SWITZERLAND
the
recently
book
twist.
department,
which has
jumped from a volume of less
than $1 million to over $5 million
magnetos; pumps and auxiliary
in the last few years, would have
pump equipment; railroad equip¬
done it if the ads had been writ¬
ment, arid home and farm appli¬ ten in your bank phraseology, such
ances.
Company's
consolidated as this one, for instance:
Exchange Bldg.
DETROIT
diesel
electric
And other Exchanges
CHICAGO
I
a
tended by
debentures to be redeemed.
gines,
NEW YORK 4,
ad.
chairmen
or
board.
yourself in our Suit Department
to give your consideration to an
offering which is exclusive with
this firm.
This invitation is ex¬
and other internal combustion en¬
Exchange
New Orleans Cotton Exchange
N. Y. Cotton
presidents
Apparel Value for You"
"You
a
Exchange
of
suit
a
it if the ad had
"More
premium of Vs of 1%
of said principal amount for each
12-month period or part thereof
between the date of redemption
tion
Exchange
Board
That's why writers never become
this fashion?
interest to the date of the redemp¬
Curb
Exchange,
hackneyed
Gimbel Brothers, a cor¬
pany for the benefit of its em¬
poration which, for well over a
ployees, will add approximately
century,
has
helped
to make
$100,000,000 to the general funds;
American industry the strongest
in each price after May 1, 1952.
of the company.
and most progressive in the world.
The serial debentures are sub¬
The
company has
a
program
This corporation works very close¬
ject to redemption at the princi¬
under
way
which contemplates
ly with many of the nation's lead¬
pal amount thereof and accrued
improvements in existing facili¬
Principal Offices
Oakland
•
at 103% and are also
redeemable through op¬
eration
of the sinking fund at
101% with successive reductions
initially
Stock
Cotton
Commodity
like
the manufacture and sale of diesel
Members
York Stock
debentures are ini¬
re-written
have
from
the company
aries
Members
York
business just isn't
with the fresh, un¬
"what-the-hell aban¬
don" that good writing requires.
other
any
congruous
couple of
Gimbel ads, a la financial adver¬
tising. A week or so ago Gimbels
sold over $30,000 worth of suits
I
tially redeemable at the option of
The
Orders Executed on
York
climb to the presidency of a bank;
or
Bank ac¬
Bank.
God just doesn't
advertising.
give all talents to any one person.
The type of talent that it takes to
account to
our
Savings
like
the
the
know that they serve savers
and further thrift?"
has agreed to
make application to list the'20year debentures on the New York
Stock Exchange.
H. Hentz & Co.
York
proceeds, Fairbanks,
$7,000,000 to retire
Bowery
people here to¬
this
kind
of
you
not
than I do.
heavy hand
of
the
heavy head of the heavy institu¬
tion
that's
responsible.
Every
president ought to be kept out of
It's
you
use
The 20-year
and the
Securities
New
serial
corporate purposes.
only thing to do under
such conditions, assuming one
want to do anything at all, is
to put buying orders in at
certain prices, not forgetting
stops.
Procedure should be
New
the
plete major extensions of its prop¬
erty; and the balance for general
The
New
while
transfer
mast
the
course
do
pompous copy any more
visualize Mrs. Peebles, run¬
to Mr. Peebles, as he gets
home that night, grabbing him by
lapels and saying: "Oh, George,
outstanding bank loans with three
Chicago banks; $6,200,000 to com¬
The
Pacific Coast Exchanges
Of
day
ning
we
until 6 p.m. and Mondays
Thursdays until 9 p.m."
and
you
debentures
price of 100% and
Your
establishment, will be transacted
tually said this—honest, I'm not
making it up. "We're here to serve
savers and to further thrift." Can
20-year
a
interest
Of the net
Established 1856
New
2%%
vendors.
daily
like this one
"Nobody but
The1 Bowery Savings
recognized
"Business in these departments*
business
throughout
this
premises"—
crackling folding money than
North River Savings Bank."
in¬
like
nobody has crisper, greener, more
are
Morse will
great.
*
Ripley Offers
De¬
facilities
for your co-operation.'
lights!"
through these pious
better:
be
These
department is your
good friend. We all say, 'Thanks
pronouncements—it seemed to me
ing from 1.15% to 1.80%, accord¬
ing to maturity, are also priced at
100% and accrued interest.
the chances are
*
these
on
As I riffled
Gimbel
'
housewares
instead of "Put out the
debentures, bearing interest rang¬
*
*
tinguished
not
offered at
accrued
Pacific Coast
*
which we saw plastered on
premises during the war, "Il¬
lumination is required to be ex¬
sign
Whyte
$500,000 each May 1,
1952, inclusive.
1948 to
profits can be very
gratifying. If bought, and they
get under pre-determined
levels, there will be losses.
These, however, shouldn't be
unduly large. Besides it must
be
clearly understood that
every time an opportunity for
profits arise there are com¬
pensating chances that the
possibility for losses will be
as
derivation—tired
Latin
of
due
tures,
For if stocks are
bought during such a phase of
the market cycle, the subse¬
at least
old
an
words
with all the color drained out of
them. Reminds me of that awful
if.
Ripley & Co., Inc. and
offering publicly to¬
day $17,500,000 Fairbanks, Morse
& Co. 20-year 2%% debentures,
due May 1, 1967, and $2,500,000
of
the company's
serial deben¬
advantages.
tion and not the result of any
snap
English teacher,
and polysyllable
writing—the old florid lingo filled
with dustry, dry, decrepit words
Being
I detest pompous
Harriman
associates
quent
with
thing for
at
Fairbanks Morse Debs.
everybody taking a shot, J that whatever caused the re¬
don't
know
anybody who cent break has not been dissi¬
could give me the disease.
I pated. Actually trading un¬
tried that argument on the
der such conditions has many
doctor.
appeal—as Ring
Lardner
say, "The duchess looking
bedbugs."
A guy needs $100
and they kick him in the face be¬
cause he isn't an executive.
would
views
do
Harriman
If the underlying reasons
point breaks we see de¬ which caused the recent break
scribed by stock market letter
have been dissipated, then a
writers as a "healthy, normal
period of dullness with some
reaction." Try giving that ex¬
minor set-back—even a minor
planation to a man who
rally —r is indicated. Stocks
bought them just before the should
stay above their recent
reaction.
lows, or at worst, not go under
*
*
*
them by more than a point or
That's the way I feel about so.
If stocks do sell under
those
pay
would
ten
that vaccination. Besides with
and
from
that even a headline
*
*
that lit¬
it back in a year—
and neither would you. The old
expressed in this
necessarily at any
time coincide with those of the
Chronicle. They are presented as
those of the author only.]
[The
article
you
*
exec¬
of
Housewares
our
clude every type of merchandise
all
averages.
in terms of stocks.
#
an
in
partments.
sncb
—Walter
don't (buy the
I'll give them to you
because
much for
philosophy
Brothers and the flexibility of our
I
$100.
to
utive who had to borrow
tle
Thursday.
ap¬
down
wouldn't give
levels in terms of the averages
Perfectly normal, my foot.
It's as normal as one of those
•
Executives"
*
if.
you
dowager about to sneeze.
One bank advertises "Loans for
re¬
going to work out the
I'm not
A mere noth¬
*
A
proximate levels should not
not be alarming, provided it
doesn't exceed certain levels.
has
ing, says my doctor. A per¬
fectly normal reaction.
*
from
*
therefor
the decline.
on
action
feeling like an ele¬
phant's trunk.
The bur¬
is
proof
thrown
cination which started out as
little abrasion and now
of
den
many
left
that
recovery
much to be desired.
things.
Main reason for this enforced
idleness is a small-pox vacabout
wonder
rally from the recent
nothing to boast
At best it was a half¬
was
about.
During the past few days I
have had little to do except
#
❖
*
of talking down the
financial adver¬
tisers do, always brings up a pic¬
ture in my mind of a haughty
that
nose
Buy Anaconda at 35 with a
stop at 34; Chrysler at 85, stop
83; General Motors at 55, stop
53; U. S. Steel between 65-66,
stop 64
and International
Paper 39-40, stop at 38.
important.
if.
The
❖
facilities
name
That kind
So here is what I
the boat.
page 14)
unique
reserve."
we'll probably miss
subsequent recovery suggest:
the subsequent decline
and
*
*
(Continued from
Gimbel on your
waffle iron stands for dignity and
The
chen.
definite infor¬
more
mation,
It
Banish Pomp From
Financial Advertising
the
lows
❖
They all do that
time or another.
some
is
finger at it.
wait for
market that stops go¬
a
ing down.
lot of
white space in describing one
day's market action. In that
one day I thought I saw the
beginning of the end of the
decline and pointed a gleeful
Last week I gave up a
a
Thursday, May 1, 1947
COMMERCIAL' & FINANCIAL CHRONICLE
THE
(2380)
52
~
■Volume
165
Number 4590
THE COMMERCIAL &
FINANCIAL CHRONICLE
Securities -Now
•
Acme Electric
June
26
filed
Corp., Cuba, N. Y.
132,740
in
($1 par) common stock.
Underwriters—Herrlck, Waddell & Co., Inc., and First
Colony Corp.
Offering—To be offered publicly at $5
a share.
Proceeds—Company will receive proceeds from
the sale of 68,880 shares and four
selling stockholders
the proceeds from the sale of
63,860 shares.
Company
«lso will receive proceeds from the sale of
20,000 war¬
rants for common stock to underwriters at an
aggregate
price of $200.
INDICATES ADDITIONS SINCE
PREVIOUS ISSUE
rants from
$13.50
per
debentures
stock, reserved for stock purchase war¬
April, 1947 through March, 1957 at $9 through
share.. Underwriting—None. Offering—The
and
stockholders
purchase
warrants
will
be
offered
units of $100 of debentures
and one
stock purchase warrants at
$100 per unit. Unsubscribed
will be sold to American
Airlines Inc. at $100.
units
Purpose—To repay loan from American
Airlines, Inc.,
balance for general
funds.
American Water Works
Co., Inc., N. Y.
March 30, 1946 filed
2,343,105 shs. of common
mainder for working capital.
plus
to
Air-Borne Cargo Lines, Inc., New York
Feb.
14
(letter of notification) 214,890 shares ($1 par)
Being offered for subscription to stockholders
Feb. 20 at $1 a share. Rights
expired 3 p.m.
common.
of record
<(EST.) March 11. Unsubscribed shares will be offered to
public through Greenfield, Lax & Co., Inc., New
by amendment.
York.
For
reduction
of
current
obligations
and
for
All American
March
Industries, Inc., New York
(letter of notification) $300,000 10-year 5%
iineome notes and 7,500 shares of
capital stock (par 250).
Offering—To be offered
ii^, units of $1,000 of notes and
25
shares of stock at $1,000
per unit. Underwriter—A. W.
Benkert & Co., Inc., New York. To reduce indebtedness
nncurred
homa
in
Steel
acquisition
27
outstanding
stock
of
Bids—Expected about April 30.
filed
950,000
Inc.,
N. Y.
The
remainder
will
be
offered
publicly.
to
additional
one
common
share
stockholders
for
in
each
two shares
Unsubscribed shares will be offered for
subscrip¬
tion to officers and directors of
the company.
Price—By
amendment.
held.
Proceeds—Working capital.
Offering in¬
definitely postponed.
Anderson
April 21
($1 par) common stock.
& Co. Inc., New York. Offer-
ling—A maximum of 100,000 shares may be sold by com¬
pany to persons, firms, or corporations with whom the
Eorporation had network affiliation agreements on March
Bl.
subscription
of
(Ben
H.)
Manufacturing
Price by
amendment. Proceeds—To prepay notes
payable to ac¬
quire radio station WXYZ, to construct broadcast trans¬
mitter for station KGO at San Francisco
and for
4%
as
$75,000 first mortgage
Northwestern Securities Co.,
Madison,
real estate and
•
sales agent.
for working
Apothecaries
House,
N.
share. No underwriting. For adver¬
a
capital.
Arkansas
American
Coach
&
Body
Co.,
-
Cleveland,
Ohio
.April 21
(letter of notification) 20,000 shares ($5 par)
common. Price—$12 a share. For
subscription by share¬
holders.
No
underwriting.
To refund current bank
indebtedness.
*
American
Gas
Machine
Co.,
Inc.,
Albert
A.pril 21
(letter of notification) 500 shares of Class B
common on behalf of
George R. Cooley & Co., Albany,
IN. Y. Price—$46 a share. Underwriter—Cohu
& Torrey,
INew York.
Hydraulics, Inc., Sheyboygan, Wis.
April 2 (letter of notification) 50,000 shares of common.
Offering—Offered (initially to stockholders of record
April 15 in ratio of one new for each five shares
held,
at $5.50 per share.
Rights expire May 15> Underwriter
^Heronymus & Co., Sheboygan, Wis., and Lon L. Grier
«& Co.,
Milwaukee,7'Wis. For new machinery and for
working capital.
I
#
American Iron & Machine Works
Co., Oklahoma
City, Okla. (5/6)
Feb. 24, filed $1,000,000 of
4% sinking fund debentures,
due 1967; 25,000 shares
(no par) $1.10 cumulative pre¬
ferred and 60,000 shares
(no par) common. Underwriters
—Rauscher, Pierce & Co., Inc., Dallas, and Milton R.
Underwood & Co.,
Houston, Texas. Price—Debentures:
100; preferred $20 per share and common
$10 per share.
Proceeds—To pay $712,500 balance
tirement
of
$350,000
promissory
on
a
bank
notes,
and
working capital.
American
loan,
re¬
Mar. 31 filed 133,000 shares
(50c par) common, of which
10,000 will be offered to officers and
key employees.
Graff & Co. and Gearhart &
Co., Inc. Price—$3.50 per share. Proceeds—For
general
corporate purposes including reduction of bank
loans and
Underwriter—Townsend,
outstanding notes.
American
,,
Overseas Airlines,
Inc., New York
March 31 filed
$2,030,400 4% subordinated income deben¬
tures due 1957 and stock
purchase warrants for shares
of
$1
par
capital stock; also filed
a
maximum of 228,899
Corporate and Public Financing
filed
Western
Gas
Co.
16,197 shares of
Armour and
Pierce
&
Co.
Inc.,
and
E.
H.
Co., Chicago
preference stock,
stock
Series A, and 1,355,240 shares
first prefer¬
stock for each share of
$6 prior preferred.; Shares
of first preference not
issued in exchange will be sold
to underwriters. The
300,000 shares of second preference
stock will be offered
publicly.
The
ence
will
common
of
a
new
scribed
be
of
for
the
company in the ratio of one-third
for each common share held.
Unsub¬
share
shares
offered
1,355,240 shares of
subscription to common
of
common
will be purchased
by the
Price—Public offering prices
by amend¬
Proceeds—Net proceeds will be used to
retire
underwriters.
ment.
through Baker, Weeks & Harden,
being sold on behalf of Herman D.
Ruhm, Jr., President of company.
Shares
•
Beauty Counselors, Inc., Detroit, Mich.
April 24, (letter of notification) 27,000 shares ($10 par)
5% cumulative convertible preferred. Price—$10 a share..
Underwriter—Campbell,
all
unexchanged shares of $6 prior stock and to redeem its
outstanding 7% preferred stock.
George Eastwood, President, in letter to
stockholders,
Dec. 22
said "we have come to
the conclusion it will
be necessary to issue
any additional shares of com¬
mon stock" as
part of
company's refinancing plan.
Atlantic City
(N. J.)
Electric Co.
March 19 filed 522,416 shares
offered by American Gas &
To
be
determined
($10 par) common, being
Electric Co. Underwriters—
competitive bidding. Probable
by
bidders include:
The First Boston
Corp., and Drexel &
(jointly); Shields & Co., and White, Weld & Co.
(jointly); Dillon, Read & Co., Inc., and
Smith, Barney
& Co.
(jointly); Blyth & Co., Inc.; Union Securities
Co.
Corp. Price—To be determined
by competitive bidding.
Proceeds—The offering is part of
American's plan to
dispose of its holdings of
1,150,000 outstanding shares
of Atlantic
City. The shares remaining after the
public
offering will be distributed as dividends on American's
common stock. This
dividend policy will become effec¬
Pacific Coast Stock
Exchanges
OPEN TO 6:30_P.M. (E.
institutions
those
D.S.T.)
executions for brokers,
on
which
Pacific
Coast
also
Direct
Boston
New York
securities,
have
Private
dealers
Detroit.
For
amendment.
Proceeds—Of the total, 140,000 shares are
being sold by St. Regis Paper Co., New York, and the
remaining 40,000 shares are being sold by I. Rogosin,
President of Beaunit Mills, Inc.
•
Benrus
Watch
Co.,
Inc.,
New
York
Under¬
common.
York.
Price
by
Proceeds—The shares are being sold by
five officers of the company who will receive
proceeds.
Business—Manufacture of watches.
Berbiglia, Inc., Kansas City, Mo.
12
(letter
of
notification)
41,000
shares
of
5%
Offering price
$6 a share. Underwriter—Estes, Snyder & Co., Topeka,
Kans. To pay outstanding indebtedness and
expenses and
to open five additional stores in Kansas
City, Mo. Offer¬
Mich.
Feb. 3 filed 733,575 shares ($1 par) capital stock.
Under-'
writing—None. Offering—Company said all of the shares
issued and outstanding. The purpose of the
registration statement is to enable holders to effect sales
by
use of the
prospectus.
are
^Berkey & Gay said the shares had been sold
and 1945 to
they
for
were
in 1944
group of about 50 persons who represented
a
purchasing the shares for investment
and not
distribution.
So
far, 231,204 shares have been sold in the
open mar¬
ket
and the Commission had raised the question as to
whether such sales had the effect of
making the entire
offering public.
The Commission-staff stated that regis¬
tration is required if any of the
remaining 733,575 sharea
to be sold. Price—At market. Proceeds—Go to sell¬
are
ing stockholders.
^
:f
,
r
Blumenthal
(Sidney)
& Co. Inc.,
'•
New York
Aug. 30 filed 119,706 shares (no par) common and sub¬
scription warrants relating to 30,000 shares thereof.
Underwriting — None. Proceeds
For reimbursement
—
of
company's
treasury for funds expended in re¬
demption of 3,907 shares of 7% cumulative preferred on
April 1, and for funds deposited in trust for redemption
on
.
Oct. 1 of remaining preferred shares.
proposed
to
offer
Although it was
subscription to stock-*
share, company on Sept. 20 decided
the
holders at $10 per
to withould action.
stock
for
eastern
Bobbi
Mar.
Motor Car
(letter of notification) 60,000 shares ($1 par)
common. Price—$5 a share.
Company proposes to offer
12,997 shares of
under
STREET,
Telephone
SAN
FRANCISCO
•
NEW
YORK
30,000 shares ($50 par) 5% cumulative
preferred and 500,000 shares ($1 par) common.
Under¬
writers—Paul
Offering
—
'
ANGELES
H.
Davis
Preferred
&
will
(Continued
Co.
and
have
on
Stroud
&
Co., Inc.
non-detachable
page
stock
54)
Underwriters and Distributors
of
Corporate and Municipal
Securities
&
Co.
5,
N.
•
HONOLULU
Y.
BArclay 7-4300
LOS
Chicago, Inc.
Sept.. 10 filed
markets.
MEMBERS
HALL
in exchange for its unsecured
construction.
Boston Store of
including
Exchange
San Francisco Stock Exchange
Honolulu Stock
Exchange
Los Angeles Stock Exchange
and other
principal Security and Commodity Exchanges
14
common
promissory notes in the amount of $64,985 held by dis¬
tributors of company's proposed products. Underwriting,
the stock will be sold by officers and directors of tbn
company. For completion of display automobiles now
Wires
Dean Witter
Pittsburgh
Corp., Birmingham, Ala.
3
and
New York Stock
Chicago and other cities
Co.,
Beaunit Mills, Inc., New York
Sept. 27 filed 180,000 shares ($2.50 par) common. Under¬
writer— White, Weld &
Co., New York.
Price — By
The
CORPORATION
&
not
Quotation^ and
FIRST BOSTON
McCart^
operation of business.
(par $5).
Underwriting—Kuhn, Loeb &
Co., New York.
Offering—The 350,0Q0 shares of first
preference stock will be offered in
exchange to holders
of its 532,996 shares of
$6 cumulative convertible prior
preferred stock at the rate of 1.4 shares of
stockholders
Me.
market
York.
(par $5).
July 12 filed 350,000 shares (no par) cumulative first
preference stock, Series A;
300,000 shares of convertible
second
Lewiston,
Berkey & Gay Furniture Co., Grand Rapids,
stock
Offering—Stock will be offered to
by amendment. Shares are being sold
by six stockholders.
common
Manufacturing Co.,
(letter of notification) 1,000 shares ($10 par)
Price, about $25 a share. To be sold on over-
common.
V
common
Rollins & Sons Inc.
the public.
Price
provide
Machinery Corp., Orlando, Fla.
5
Underwriters—Rauscher,
Lea,
Minn.
American
June
Bates
ing postponed indefinitely.
working
*
15,
York, for the purchase of
but the sale has been post¬
New
shares,
cumulative convertible $6 par preferred.
1.
April 22 (letter of notification) $15,000
($10 par) capital
stock. Price—$10
tising of product.
•
April 28
Sept.
Rutherford,
Street,
common
poned.
To retire mortgage against
capital.
East
Church
amendment.
(letter of notification)
serial bonds.
Wis., will act
30
522,416
Bids
April
April 24.filed 150,000 shares ($1 par)
writer—Hayden, -Stone & Co., New
Co.,
Madison, Wis.
shares
Underwriter—Dillon, Head
be
for
ratio
•
Broadcasting Co.,
(par $5)
Okla¬
Castings Co.
American
June
of
the
at
New
American Zinc, Lead &
Smelting Co., St. Louis
Sept. 6 filed 336,550 shares common stock
(par $1).
Un¬
derwriting—No underwriting.
Offering—Stock will
offered
17
tive June 15 and will continue
to the end of 1948.
Gas & Electric Co. invited bids
—American
the-counter
an additional number
determinable only after the
results of competitive
bidding are known. Underwriters
—To be filed
by amendment. Probable bidders include
Dillon, Read & Co. Inc., White, Weld &
Co., and Shields
& Co.
(jointly), and W. C. Langley & Co. and The
First Boston Corp.
(jointly).
Offering—Price to public
the
Working capital.
to
in
Of the net proceeds ($292,940) $50,000
pay current bank loans; about $20,000
will be used for machinery and
equipment, and the re¬
-will be used
53
Registration
shares of capital
shares
(3181)
Kidder, Peabody ^ Co.
Founded 1865
Members
New York
o] the New York and Boston Stock Exchanges
Boston
Philadelphia
Chicago
COMMERCIAL & FINANCIAL
THE
(2382)
.54
writers—To
be determined
by competitive- bidding.
Probable bidders include Blyth & Co., Inc.; The First
Harriman Ripley & Co.; Kuhn, Loeb & Co.,
& Co. (jointly); Merrill Lynch; Pierce,
Fenner & Beane, and Bear, Stearns & Co. (jointly).
California Oregon will sell all of the preferred and
Boston Corp.;
NEW ISSUE CALENDAR
and Smith, Barney
date of offering)
(Showing probable
Standard Gas & Electric
Co. (parent), which is planning to sell its entire com¬
mon stock
holdings in California Oregon, will sell the
remaining 360,000 shares of common. The subsidiary
plans to amend its charter to create the new preferred
stock and to reclassify and increase the authorized com¬
mon.
The 312,000 shares of $25 par common of Califor¬
nia Oregon present, outstanding are held by Standard
Gas.
They will be reclassified into 390,000 shares ($20
par) common.
Standard Gas will make a capital con¬
tribution of 30,000 shares to California Oregon. Proceeds
—Standard Gas will use the proceeds to reduce its bank
loan notes.
California Oregon will apply its proceeds
to redeem 45,761 shares ($100 par) 6% preferred, series
of 1927, at $110 a share.
The balance will be used to
reimburse its treasury for previous additions and im¬
30,000 shares of the common,
1947
May 2,
Preferred
Corp
Pennsylvania Frosted Foods
1947
May 5,
Pref. and Common
(CDT)_
Bonds
Inc.—Pref. & Common
—Common
Crest-Ware Inc
Cudahy Packing Co., 11 a.m.
Gloria Chandler
Haile Mines,
Recordings
Inc
Preferred
Service Inc
Lyons Finance
Common
Platinoyd Industries, Inc
Common
Common
Co
Tide Water Power
Whites Auto Stores Inc
1947
May 6,
provements.
American Iron & Machine
Works Co
May 12, 1947
Common
Guns
Bowman
tional
1947
May 13,
equipment.
Carscor
(EST)———Bonds
California Water Co., 11 a.m.——Bonds
Southern Pacific Co., 12 noon
Southern
June 24 filed
400,000
of Toronto,
common stock.
Under¬
Offering — To the public at
shares of
share in Canadian funds.
Proceeds—For a variety
in connection with exploration, sinking of
shafts, diamond drilling and working capital.
$1
May 19, 1947
a
of
purposes
Bonds, Preferred
Central
purchase warrants for purchase of 30,000 shares of com¬
mon stock of the total common, 375,000 shares will be
offered for sale for cash.
30,000 shares are reserved for
issuance upon exercise of warrants attached to preferred
and 95,000 shares are reserved for issuance upon exer¬
cise of outstanding warrants.
Price — By amendment.
Proceeds—Net proceeds, together with other funds, will
be used to pay the company's 2% subordinated note in
the principal amount of $5,268,750 and accrued interest.
Offering date indefinite.
and for retirement of latter's
(no par) common. Under¬
initially will
be offered for subscription to common stockholders at
rate of one share for each 7*/3 shares held. Unsubscribed
shares will be sold to underwriters.
Price by amend¬
ment.
Proceeds—Working capital, etc. Offering indefin¬
Aug. 21 filed 90,000 shares
Offering—Common shares
writer—None.
Sept. 27 filed 268,875 shares
writer—Van
$7,125 per
(5/12-15)
Philadelphia
Gum,
Price—
share. Proceeds—Stock is being sold by share¬
Alstyne, Noel & Co., New York.
holders who will receive proceeds.
Braunstein
Telephone Co-
Cincinnati & Suburban Bell
($1 par) common. Under¬
(Harry), Inc., Wilmington, Del.
100,738 shares ($50 par) capital stock.
Underwriting — None.
Offering — For subscription to
common stockholders in the ratio of one share for each
six shares held as of May 12, 1947.
Price at par. Pro¬
ceeds—To reimburse company treasury for construction
14 filed
April
expenditures and for additional
improvements.
Sept. 25 filed 12,500 shares ($25 par) 4%% cumulative
convertible preferred stock and 50,000 shares
York.
New
a
Underwriter
stock.
common
share for
Price—$25
by
ferred shares and all of the
present stockholders.
timated
tent
at
Co., Inc.,
share for preferred and $11
the remaining
company,
common
are
5,500 pre¬
being sold by
Net proceeds to the company, es¬
$147,500, will be used to
possible outstanding $149,300
prepay
to the
mortgage
Brayton
27 y2
Flying
one
Inc.,
Robertson,
convertible preferred
Mo.
Price—$5
per
and
50,000
unit, consisting
Underwriter—White and Co., St.
working capital.
(N. Y.)
Union Gas
Co.
May 3 filed 70,000 shares of cumulative preferred stock
($100 par). Underwriters—To be filed by amendment.
Bids
Rejected—Company July 23 rejected two bids
ceived tor the
stock.
dividend.
common
stockholders on basis of one
Price by amendment.
Proceeds—To finance airline operations and acquisition
to
10
shares held.
development of oil properties. Company
funds to Summit Airways, Inc.,
and
advance
owns
also plans
of whose
61%.
Cleveland
(O.) Electric Illuminating Co.
Harriman
a
bid of 100.06 for
a
Ripley & Co. and Mellon
Securities Corp. bid 100.779 for
a
4.40% dividend.
shares to
record
March 19 at $15 per share to the extent of one Cleve¬
land
for
every
five North American
shares held.
Rights expire May 27.
The remaining 133,383 shares
are
to
be
sold, probably through competitive sale
Probable bidders include Dillon, Read & Co. Inc.; The
First Boston Corp.; White, Weld & Co. and Shields
& Co. (jointly); Kuhn, Loeb & Co. and W. C. Langley
& Co. (jointly); Otis & Co.; Blyth & Co., Inc.; Smith,
Barney & Co..
Proceeds—For prepayment of bank
American
In¬
Co.,
which
stockholders
common
is
offering
of
North
1,714,524
American
of
.
notes
loan
of North American.
Clinton Machine
re¬
Blyth & Co., Inc., and F. S. Mose-
ley & Co. and associates submitted
4.30%
to
each
for
share
ex¬
For expansion of operating facilities and for
Brooklyn
subscription
21, filed
1,847,908 shares (no par)
common.
Offering—All of the shares are owned by The North
Service,
share of each.
Louis, Mo.
shares ($1 par) common. Under¬
Offering—Shares will be offered for
Feb.
shares (10c par) common.
of
writing—None.
liabilities.
(letter of notification) 50,000 shares ($1 par.)
cent cumulative,
New York
Inc.,
March 28 filed 223,954
stock it
Offering date indefinite.
March 24
Claude Tleon,
(200 par)
C. K. Pistell &
Proceeds—7,000 preferred shares
common.
being sold
are
a
—
17
Feb.
stock
on
Price—$6
Hague & Co., Detroit.
a
Proceeds go to the selling stock¬
>.
Clinton Machine Co.
unit through the underwriters. Proceeds—Proceeds,
at $16,507,162, will be used to reimburse its.
treasury for capital expenditures and for general cor¬
porate purposes including extensions and improvements
of its properties and plants.
Continental-United
Mar. 28 filed
Feb. 27 filed 38,500 shares
(no par) class A stock.
derwriter—Barrett & Co., Providence, R. I.
The shares will
be
stockholders at $20
for each share held.
offered for
a
share,
on
Un¬
share
Unsubscribed shares will be offered
publicly at $20
a
will
finance the cost of completing a race
be
track at
used
to
share.
Price—$20
Lincoln, R. I.
California
Feb. 24
share.
a
Proceeds
Cohart Refractories
ferred and 390,000 shares
28 filed
common.
Under¬
Co.,
par)
N.
Inc.,
Y«
common.
shares, will apply proceeds to general funds.
Cooperative P & C Family Foods,
(letter of notification)
April 25
Inc.,
Ithaca,
1,000 shares ($100 par)
underwriting. For-
preferred. Price—$100 a share. No
general operations of corporation.
Crawford Clothes,
Inc., L. I. City, N. Y.
shares ($5 par) common stock.
Underwriters—First Boston Corp., New York.
Price by
amendment.
Proceeds—Go to Joseph Levy, President,:
Aug.
filed
9
300,000
Crest-Ware
date indefinite.
Offering
stockholders.
selling
Brooklyn, N. Y.
Inc.,
(5/5)
(letter of notification) 300 shares ($100 par)
preferred and 40 shares ($500 par) common. Price—$109.
a
preferred share. No selling price was stated for the
common. To be sold through officers and a director of
April 25
expansion purposes.
the company. For
Chicago
(letter of notification)
maximum of 5,000
March
21
shares
($5 par) common on behalf of Robert S.
director of company. Underwriters—Swift
well,
a
a
Cald¬
Henke
Co., and Paul H. Davis Co., Chicago.
&
(5/5)
4 filed $15,000,000 first mortgage sinking fund
bonds, series C, due 1967.
Underwriters—To be deter*-,
mined by competitive bidding.
Probable bidders include
April
Halsey, Stuart & Co. Inc. Proceeds—For redemption
102%% $14,000,000 first mortgage fund bonds series
of;
B,
said $1,000,000 of the funds
will be used to acquire additional facilities. Bids Invited
—Bids for purchase of debentures will be received up to
11 a.m. (CDT) May 5 at 221 No. La Salle St., Chicago.
The registration
1964.
due
'
/
St. Louis, Mo.
Co.,
Clothing
Curlee
April 18 filed 22,500 shares of 4J/2% ($100 par)
lative preferred.
Underwriter—Stifel, Nicolaus
cumu-;
& Co.,
preferred shares will be
dollar, for the company's
outstanding Class A common, valued at $31,501 each..
Unexchanged shares of new preferred will be offered'
Inc., St. Louis.
Offering—The
offered for exchange, dollar for
publicly at $100 each. Proceeds—Proceeds will be used,
to redeem unexchanged shares of Class A common at.
out the company's expansionBusiness—Manufacture of men's suits and■
-- f
$31.50 each and to carry
program.
overcoats.
.
Cyprus Mines, Ltd.,
Montreal, Canada
of common stock (par il)«
Underwriters—Sabiston-Hughes, Ltd., Toronto.
Offer¬
ing—Shares will be offered to the public at 75 cents ashare.
Proceeds—Net proceeds, estimated at $300,00(V
will be used for mining operations.
May 31 filed 500,000 shares
a
Petroleum
Delta
Co.
Inc., New Orleans
April 28 (letter of notification) 5,000
and 450 shares of preferred. Price
preferred share. No
expansion purposes.
v 1
share and $100 a
(
Detroit Typesetting
shares of common
—
$10 a common-
underwriting. For:
Co., Detroit, Mich.
($1 par) common. Under¬
Co., Detroit. Price — $5.5®
a share. Proceeds — Stock is being sold by six share¬
holders who will receive proceeds. -Boston.
For working capital.
/- •
Sept. 25 filed 70.920 shares
writer — C. G. McDonald &
April 3
Inc.; Chicago
(letter of
notification) 15,000 shares of class
B
Kraft, Ray-iT. Haas^(
and William A. Spanier, all officers of company^ ijhe
securities may be sold through Bennett, Spanier- and Co«»
on
common
behalf of Clarence W.
Divco
Co., Louisville, Ky.
of
22
Chemical
Price—$1
capital.
(letter
a
Co.,
Denver,
share.
No
Colo.
$100,000 of common.
underwriting.
For working
of notification)
Detroit
New York.
Shares are
($1 par) common. Under¬
Laurence M. Marks & Co.,
Price—By amendment. Proceeds—
being sold by a
stockholder. Twin Coach Co.,
O., which will receive all proceeds.
Manufacture of special type trucks.
Kent,
a
Domenico
Food
Products Co., Inc.,
Business —
Louisville,
Kentucky
April 21 (letter
of the company.
Colorado
April
Corp.,
April 30 filed 34,963 shares
writers—Reynolds & Co. and
5%
($100 par) cumulative pre¬
($20 par)
Under¬
182,520 shares ($5 par) common.
Power Co.
March 26 filed 60,000 shares
6,500 shares of common
Under¬
writers—Harriman Ripley & Co., and Lazard Freres &
Co., both of New York.
Price by amendment. Proceeds
—The shares are being sold by Corning Glass Works,
New York, and represent 88.8% of the total outstanding
Mar.
common
•
($1
being offered by selling stockholders.
Price by amend¬
ment.
Proceeds—The company, which is selling 50,000
both
•
Oregon
(letter of notification)
Offering—
one
152,500 shares
v
stock (par $1) on behalf of selling stockholders.
writers—F. H. Koller & Co. Price—$6 a share.
subscription to class A
the basis of
Industries
Under-,
writers—Aronson, Hall & Co., and P. W. Brooks & Co., /
New York.
Offering—Of the total 102,500 shares are
a
Racing Association, Pawtucket, R. I.
of
Chicago, as agent.
definitely postponed.
Burrtllville
stockholders
estimated
Disticraft
share.'- Underwriter—Smith,
holder.
to
par
on
per
Co., Clinton, Mich.
(letter of notification) 10,000 shares ($1 par)
behalf of Donald D. Thomas, President of the
company.
common
18
Cudahy Packing Co., Chicago
Wayne, Ind.
Central Soya Co., Inc., Fort
Offering—Deben¬
Sons.
at
offered
are
the basis of $100 of debentures for
each seven shares held.
Rights expire 5 p.m. May 14.
Unsubscribed shares will be offered publicly at $100
preferred stock.
itely postponed.
Bowman
tures
Cribben & Sexton Co.,
(letter of notification) $300,000 of
13
Power Co.
Light &
and Alex. Brown &
Co., Inc.,
record April
Dunbridge, O.
Inc.,
first mort¬
gage bonds. Price—$500 per unit. No underwriting. For
retirement of preferred stock, for purchase of two alfalfa
dehydrating plants from Logan County Dehydrators, Inc.
March
(Continued from page 53)
Mills,
Electric
(5/15-16)
April 3 filed $16,677,100 15-year 2%% conv. debentures,
due May 15,
1962. Underwriters—Harriman Ripley &
•
underwriters.
writer—No
Co., Bait—Debentures
Upper Peninsula Power Co.—
Porcupine Gold Minos, Ltd.,
Ontario
1947
May 15,
Consol. Gas. El. Lt. & Pwr.
Under-
common.
ly to officers and employees of the company at $45 a
share.
Purchasers must agree not to transfer the shares
for a period of five years.
Price—$45 a share. Proceeds
—To be added to general funds for purchase of addi¬
Preferred
Suburban Propane Gas Corp
Gas
of Baltimore
New York
Neb.
Y writing—None. Offering—Shares will be offered direct¬
1947
May 7,
10,000 shares ($1 par)
filed
31
Mar.
.
Omaha,
Paper Co.,
Carpenter
Debentures
National Gas & Oil Corp
Consolidated
•
Debs., Pref. and Common
L
Thursday, May 1/1947
CHRONICLE
of notification)
cumulative preferred
20,000 shares ($10
and 16,100 shares (25c
offering prices will be
the preferred and $4,025 for the common.
writing.
To pay organization expenses and
common.
The total
par)
par)
$200,000 for
No under¬
for working.
Volume 165
Number
459fy
THE COMMERCIAL' &
FINANCIAL CHRONICLE
Douglas Oil Co. of California, Clearwater, Calif.
March 13 (letter of notification) 11,500 shares
($25 par)
an obligation to
pay $57,000 in con¬
with the purchase of a
plant in Jacksonville,
Proceeds—For redemption of
25,233 Ys shares of 6%
preferred and for other corporate
purposes.
Co. of California, Cruttenden &
Co., Pacific
Capital Corp., all of Los Angeles; Brush Slocumb &
Co.,
^San Francisco; and Adele W. Parker, Clearwater. To
purchase 493 shares of capital stock of G. H.
Cherry,
postponed.
•
and
share of
one
Underwriter—Minot, Kendall
&
Price—$10 per
and one right.
Inc., Boston. For
common
Co.,
April 28 filed
14,300 ($1 par) common shares. Under¬
Alstyne, Noel & Co. Proceeds—Stock is
being sold by Harry R. Drackett, President (6,929
shares)
'.and Charles M.
Drackett, 7,371 shares). Price — By
(letter of notification) 25,000 shares ($1 par)
common on behalf of the
issuer, 12,500 shares ($1 par)
common for the account of
Thomas R. Heyward, Jr.,
vand 12,500 shares
($1 par) common for the account of
Co.,
West
Point,
Va.
•
Sept.
and 500 shares of common.
No
underwriting.
For mine
development.
Federal
Electric
Products Co.,
Newark, N. J.
Feb, 26, filed 150,000 shares ($1 par) common class A.
Underwriter—E. F. Gillespie &
Co., Inc., New York.
Price—$7.25 a share.
The registration states
princi¬
pal stockholder has granted the underwriters an
option
to purchase 45,000 shares of class B
($1 par) common
at $7.25 a share, exercisable for a
period of three years.
Proceeds—Proceeds of approximately
$870,000, together
with $755,000 of other
bonds, will be used to repay the
balance of $34,000 of a
property mortgage, to pay off
loans in the amount of
$1,295,000 to Bankers Commer¬
cial Corp., New
York, and for additional working capital.
Ferguson
Mar. 31 filed 100,000 shares
($50 par)
preferred and 250,000 shares ($1
4%% cumulative
par) common.
Under¬
writers—F. Eberstadt & Co., Inc., New
York, and Watling, Lerchen & Co., Detroit. Price by amendment. Pro¬
ceeds—To equip and improve
recently acquired Cleve¬
land, O. plant. Offering postponed.
Inc., New York
June 25, filed 100,000 shares
($5 par) class A stock and
300,000 shares (10 cent par) common
200,000 shares reserved for conversion
shares
of
shares of
class
A
common
stock
is
stock.
dell &
stock, of which
of class A.
Each
initially convertible into
Underwriter—Herrick,
2
Wad-
Co., Inc., New York.
Offering — To be offered
•publicly at $8.10 a unit consisting of one share of class A
-stock and
000
one
share of
for retirement of
common
stock.
2,010 shares ($100 par) preferred
proceeds, together with
production of educational
■films.
"
.
Foreman
Fabrics
Corp., New York
July 29 filed 110,000 shares ($1 par) common
stock, all
outstanding.
Underwriters—Cohu & Torrey.
Price by
amendment.
Underwriters—Paine, Webber, Jackson
and Allen
&
Co., both of New York.
&
Curtis;
Offering—65,500
'shares will be offered to the
public at 52.50 per share.
Of the remaining, 3,414 shares will
be offered to certain
-officers and one large stockholder
who have indicated
their willingness to surrender
shares of 6% preferred
stock held by them in
exchange for shares of new pre¬
ferred. The
remaining 1,086 shares are being issued
—
the
to
treasury
Aug. 28 filed 140,000 shares of common stock (par $1).
Underwriter—Otis & Co.
Offering—Price $10 per share.
Proceeds—Selling stockholders will receive proceeds.
Offering date indefinite.
Van
Recordings, Inc.
Iowa-Illinois
&
Electric Co.
Probable bidders include Halsey, Stuart & Co. Inc.;
First Boston Corp.; Glore, Forgan & Co.; Blyth &
The
Co.,
-Inc.; Harriman Ripley & Co.; Harris, Hall & Co. (Inc.).
Proceeds—Part of the proceeds will be used to pay mort¬
gage debt of $10,578,000 and balance will be added to
general funds.
($100 par).
Price—$100.40 per one preferred share
Working capital.
Gas
Feb. 15 filed $22,000,000 of first mortgage bonds due 1977.
'Underwriter—To be determined by competitive bidding.
(5/5)
500 shares
and
2/5th
Jahn
&
Oilier
Engraving Co.
Feb. 26, filed 102,000 shares
common. Under¬
Chicago. Price—By
constitute ap¬
proximately 48.5% of company's outstanding common
stock, are being sold to stockholders.
writer—Sills,
amendment.
Minton
&
($1 par)
Co.,
•
(by amendment), 30,000 shares at 4%%
cumulative preferred stock ($50
par) and 170,000 shares
par common^ stock.
Underwriters—Riter & Co.
Hemphill, Noyes & Co. Offering—Underwriters to
purchase from the company 30,000 shares of preferred
and 70,000 shares of
common; and from Fred P. Murphy
and J. C. Graham, Jr., 100,000 shares of issued
and out¬
standing common.
Proceeds—To retire $6 cumulative
preferred, balance for reduction of bank loans.
Utilities
Co., Baton Rouge, La.
1,909,968 shares (no par) common. Under¬
writer—None.
Offering—The shares will be offered for
subscription to common stockholders of Gulf States'
parent, Engineers Public Service Co., New York.
The
subscription basis will be one share of Gulf States stock
for each share of Engineers common held.
Price—$11.50
a share.
Proceeds—Purpose of offering is to carry out
a provision of dissolution
plan of Engineers approved by
the Commission.
Mines, Inc., New York
Lakefront
by the issuer.
Hartfield Stores,
27
filed
100,000
Electric
Ltd.,
Honolulu
31
filed $5,000,000 first mortgage
bonds, series F,
due 1977.
Underwriters—Dillon, Read & Co., Inc., New
York, and Dean Witter & Co., San Francisco.
Price by
amendment. Proceeds—To repay $3,000,000 of short term
promissory notes and to reimburse its treasury for pre¬
vious construction expenditures.
(.
14 filed 270,000 shares of capital stock. Under¬
writer—Strauss Bros., Inc., New York.
Price—$3.50 a
share.
Proceeds—Net proceeds will be used to pay
obligations, purchase helicopters and equipment and for
working capital.
•
Home
Finance
Group,
Inc.,
Charlotte,
Chicago
•
purchase property presently leased.
La
Plant-Choate
Cedar
Manufacturing
Co.,
Inc.,
Rapids, Iowa
April 30 filed 60,000 shares ($25 par)
vertible preferred. Underwriter—Paul
cumulative con¬
H. Davis & Co.,
Chicago. Price — By amendment. Proceeds—To be added
working capital and will be used in part to reduce
current bank loans. Business — Manufacture of earth
to
Lay
equipment.
(H. W.)
'
Inc., Atlanta
& Co.,
April 18 filed 16,000 shares ($50 par) 5% cumulative
convertible preferred and 15,000 shares ($1 par) com¬
mon.
Underwriter—Clement A. Evans & Co., Inc.,
Offering—All but 3,000 shares of the common
share. The preferred will
public at $50 a share. The 3,000 shares
of common not sold publicly will be offered to company
officers and employees at $5 each.
Proceeds—For con¬
struction of new plants at Atlanta and Memphis, Tenn.
Business—Manufacture of food products.
be offered to the
shares
Co.,
Corp.,
will be sold publicly at $6.50 a
porarily postponed.
Hawaiian
Realty
out the proposed transactions. Offering—To mem¬
Price—$10 a share. Proceeds
Atlanta.
Inc., Los Angalas
($1 par) common stock.
Underwriters—Van Alstyne, Noel & Co., New York, and
Johnston, Lemon & Co:,- Washington, D. C.
Offering—
To be offered to the public at
$8 a share.
Proceeds—
Company is selling 60,000 shares and stockholders are
selling 40,000 shares. The company will use its proceeds
to pay the costs of opening additional stores and to ex¬
pand merchandise in its existing stores.
Offering tem¬
Mar.
stock (par $10).
Proceeds—The
bers of Lake Shore Club.
—To
(5/5)
April 25 (letter of notification) 200,000 shares (25c par)
common.
Price—$1.50 a share. No underwriting. To
furnish additional capital
to Tungsten Mining Corp.
which is owned 70%
common
Boston
Corp.
April 14 filed 100,000 shares ($10 par) common. Under¬
writing—The underwriting will be handled by Lake
Shore Club of Chicago which organized the registrant to
moving
Haile
First
cost of $1,000,000.
carry
Gulf States
Jan. 20 filed
Pittsburgh
will be used for the construction of plants at
Kobuta, Pa., at a cost of approximately $4,750,000, the
conversion of a refinery at Oil City, Pa., into a synthetic
organic chemical plant at a cost of about $1,250,000 and
for the completion of facilities at Kearney, N. J., at a
of $1
and
Hoppers Co. Inc.,
money
Grolier Society, Inc., New York
April 2, 1947
,
Inc.,
Proceeds—The shares, which
3
Helicopter Air Transport, Inc., Camden, N. J.
March 28 filed 70,000 shares
($50 par) 4%% series cumu¬
lative preferred stock with
common stock purchase war¬
rants.
Underwriter
March
Dairies, Inc.
to
Underwriter—The
Issue may be withdrawn.
Foremost
be
modernization program. Offering
indefinitely postponed.
y
redemption
prior
added
common
will
April 30 filed 200,000 shares of
Proceeds—$201,-
stock at $100 a
share; remaining
other funds, will be used for
into
balance
funds.
Company has asked the SEC to defer action on its fi¬
nancing program because of present market conditions.
—
June
Films
Chandler
The
(letter of notification) 12,000 shares ($1 par)
Underwriters—Kalman & Co., Inc., St. Paul.
Price—$25 a share.
Proceeds
For improvement and
•
(Harry), Inc., Detroit
converted
date.
common.
purposes
unit consisting of $500 bond
per
warrants.
common.
including
modernization and improvement of the
manufacturing
plant and machinery and equipment.
Price—$550
stock- purchase
Decatur, III.
International Dross Co., Inc., New York
Griggs, Cooper & Co., St. Paul, Minn.
Elkhorn-Beaverhead Mines Co., Baltimore, Md.
March 12
(letter of notification) $250,000 first mort¬
gage 10-year 5% bonds, and 250,000 shares (10 cents
par)
not
"
working capital.
Gloria
none.
preferred. Underwriters—None. Offering—To be offered
fit par to
customers, officers and employees of the com¬
common.
Co.,
Underwriting,
Edelbrew Brewery, Inc.,
Brooklyn, N. Y.
"
directly by
4% non-convertible preferred (cumulative after Jan.
1,
1948) and 200 shares ($1 par) common.
use
corporated
Controls
April 28 (letter of notification)
Dec. 31 filed 5,000 shares
($100 par) 5% non-cumulative
For
To be sold
1949, common stock of the company at $11 a share. Price
by amendment. Offering temporarily postponed.
proceeds from the sale of
$500,000 of bonds toward the payment of
outstanding
first mortgage notes and
repayment of bank loans.
—
share.
Alstyne, Noel & Co. Offering—The 300,000 shares are
issued and outstanding and
being sold for the account
of certain stockholders.
Company has also issued 55,000
stock purchase warrants to the
selling stockholders at
10 cents a share entitling them to
purchase up to Aug. 1,
(bonds only); Harris, Hall & Co. (Inc.); Otis &
Co.;
Kidder, Peabody & Co.
Offering—To the public.
The
registration showed that $800,000 of the bonds and all
of the common stock are
being offered by East Coast
Public Service Co., parent of the
registrant.
Proceeds—
Proceeds
General
cise .of
.Mar. 28 filed $1,300,000 of first
mortgage bonds, Series A,
,due 1977, and 60,000 shares of $10 par common. Under¬
writers—To
be
determined
by
competitive bidding.
Probable bidders include
Halsey, Stuart & Co. Inc.
pany.
a
Glensder Textile Corp., New York
Aug. 28 filed 355,000 shares ($1 par) common, of which
55,000 shares are reserved for issuance upon the exer¬
capital.
Coast Electric will
Ida.
com¬
Price—12 Y> cents
and for
R.
Hayward, Jr.
Price—At market (ap¬
proximately $3.25 per share).
Underwriter—Johnson
,& Johson,
Pittsburgh, Pa., and The First Cleveland
Corp., Cleveland.
The company will use its proceeds
East
Inc.,
Glendale, Calif.
April 24 filed 30,000 shares ($25 par) 6% cumulative
preferred and 10,000 shares ($5 par) common.
Under¬
writer—Wagenseller & Durst, Inc., and Lester & Co.,
both of Los Angeles.
Price—$25 a preferred share and
$33 a common share.
Proceeds—To repay $750,000 note
.March 12
Electric
Mines,
Power Co.,
17, filed 200,000 shares ($50 par) cumulative pre¬
ferred stock and 966,870 shares (no par) common stock.
Underwriters—By competitive bidding.
Probable bid¬
ders include Blyth & Co., Inc.; The First Boston Corp.;
W. E. Hutton & Co.
Proceeds—Net proceeds from the
sale of preferred will be used to reimburse the com¬
pany's treasury for construction expenditures. < Net pro¬
ceeds from the sale of common will be applied for re¬
demption of 5% cumulative convertible preferred stock
developing mining claims.
Duraloy Co., Scottdale, Pa.
Coast
Silver-Lead
Hailey,
•
amendment.
..East
Illinois
company.
Other underwriters may be named by amend¬
ment.
For prospecting and
writer—Van
working
Garfield
mon.
4
for
Price—$5.50 a preferred share and 2 cents a
Underwriter—Amos Treat & Co., New York.
June
working capital.
April 23 (letter of notification) 1,000,000 shares of
'•Drackett Co., Cincinnati
Thomas
warrants.
warrant.
It is expected that a full registration will be filed later
with the SEC.
•
general corporate purposes.
-.Mrs.
Dec. 3 (letter of notification) 54,350 shares of cumulative
convertible preferred and 50,000 common stock purchase
work and
rights to subscribe for them.
consisting of
Dry .Foods, Inc., Columbia, S. C.
Newkirk, Jr., are selling
Price—$6 a share. Pro¬
ceeds—For purchase of sweet
potatoes, plant expansion,
additional storage
facilities, research and development
Douglass Manufacturing Co., Inc., Portland, Me.
(letter of notification) 10,000 shares of corn-
unit
Indefinitely
Roland E. Fulmer and Louis H.
the remaining 100,000 shares.
April 25
*mon
Finance Group, Inc., Charlotte, N. C.
(letter of notification) 20,000 shares ($1 par)
common.
Price—$5 a share. No underwriting.
To be
added to working capital.
Aug. 30 filed 450,000 shares (100 par) common. Under¬
writer—Newkirk & Banks, Inc.
Offering—Of the total
company is selling 350,000 shares and two
stockholders,
total of 625 such shares
presently outstand¬
Home
Hy-Grade Supply Co., Oklahoma City
Fresh
ing.
53(
April 24
Fla.
Pacific
a
•
nection
5Y4% cumulative convertible first preferred. To be of¬
fered at a maximum of $26 a share.
Underwriters —
Inc. out of
(2383)'
in satisfaction of
N.
C.
•
Libby, McNeill & Libby
April 30 filed 100,000 shares (no par) preferred stock.
Underwriter—Glore, Forgan & Co. Offering—Stock will
be offered to stockholders at the rate of one share of
preferred for each 36 shares of common owned. Proceeds
to complete a plant at Sunny¬
—The money will be used
vale, Calif., and for other corporate purposes.
Lithium Corp. of
America, Minneapolis
April 2 (letter of notification) 85,000 shares of common
and 42,500 common stock warrants not exercisable until
May 1, 1948.
Price—$3 a common share and two cents
a warrant.
Underwriter—Hautz, Engel & Andrews, New
York.
For mine development and for working capital.
Lorain
•
April 21
common.
Telephone
Co.,
Lorain,
Ohio
(letter of notification) 5,616 shares (no
Price—$20 a share.
No underwriting.
par)
To
reimburse treasury.
•
Louisiana
Plastic
Industry,
Baton
Rouge,
La.
April 24 (letter of notification) 8,000 shares ($25 par)
5%% cumulative convertible preferred.
Price—$25 a
share.
Underwriting—To
be
sold
through securities
(letter of notification) $10,000 to $25,000 of
securities.
Price—$100 each.
No underwriting.
For
purchase of equipment and supplies for manufacturing
dealers which
toys.
lotte, N. C.
may'include R. S. Dickson & Co., Char¬
To be added to working capital.
April 21
(Continued
on page
56)
Oil Corp.,
&
Gas
National
(Continued from page 55)
Philadelphia (5/5)
April 28 (letter of notification) 40,000 shares preferred
stock (par $5). Of the total 19,587 shares will be offered
in exchange for class A stock, share for share based on
value of $7 per share for class A or a total of $137,109.
The balance (20,413 shares) will be offered at $7 per
share. Underwriting none. Net proceeds will be used to
reduce
bank borrowings or to make small loans to
Lyons Finance Service, Inc.,
•
"
Mich.
Grand Rapids,
Oil Co.,
($1 par)
for sub¬
of record April 22 in ratio
scription
of
stockholders
to
held. No underwriting. For
for each five shares
one
McCormack
&
Co.,
Proceeds to be used to acquire
going business.
agent for the sale.
River Corp.,
Mad
April
New York
par)
1,000 shares ($1
(letter of notification)
24
Price
—$100 a preferred share and $1 a common share.
No
underwriting.
For reconstruction of two buildnigs.
$4.50 preferred and 1,000 shares ($1 par) common.
Can.
Toronto,
Ltd.,
Explorations,
Manontqueb
April 10 filed 300,000 shares ($1 par) common.
Under¬
writer—Name to be supplied by amendment.
Price—
40 cents a share.
Proceeds—For exploration and devel¬
Business—Mining.
opment of mining claims.
Feb.
filed
28
Inc., Brooklyn, N. Y.
(J. W.)
Mays
($1 par)
150,000 shares
Co., Inc., New York. Price by amend¬
ment.
Proceeds—Of the total, 100,000 shares are being
sold by seven stockholders. The remaining 50,000 shares
are being sold by the company, which will use its pro¬
ceeds for general corporate purposes.
Mercantile
New
6% cumulative pre¬
Underwriter
—John Martin Rolph, Vice-President and director of
company.
Price—The stocks will be sold at $105 per
unit consisting of one share of preferred and one share
of common.
Proceeds—To be used in organization of
ferred and 25,000 shares (no par) common.
Prop¬
England Electric System
of which $25,$50,000,000 in 1977.
by competitive bid¬
ding. Probable bidders include Halsey, Stuart & Co.
Inc.; The First Boston Corp.; White, Weld & Co., and
will
000,000
debentures
new
$500
and
$1,000.
Underwriter—Guardian
Securities
Corp., San Francisco.
For payment of short term notes
or for other corporate purposes.
part
in
used
to
convertible preferred ($10 par)
par) common stock, with Sterling,
Grace & Co. as underwriters.
Company has decided to
Issue 454,465 shares of common stock only, which will be
offered for subscription to stockholders of record Sept
5 to the extent of one share for each five held. Issue will
and 277,231 shares (50c
discharge
with simplification plan.
O'Briens of
not
California, Inc.,
Nitro,
Inc.,
>_ Salant & Salant, Inc., New York
28 filed 240,000 shares
($2 par)
Poindexter
by amendment.
Proceeds—Shares are
stockholders who will receive proceeds.
•
Inc.,
Inc., Chicago
Associates,
&
Scurry
lixon, The.,
Nixon, Trie.,
S. C.
Greenville,
April 24 (letter of notification) $71,974 of Class B com¬
mon.
Price—$106 a share.
No underwriting.
For fi¬
and chemicals.
Distillery,
Research
Science
April 23 (letter of notification) 350 units of stock con¬
sisting of one share of $100 par preferred and one share
of 10 cent par common.
Price—$100.10 a unit. No un¬
derwriting. "ToFcl^elopment and expansion of business.
development
nancing expanded operations.
Louisville, Ky.
shares ($20 par) 5% convertible
cumulative preferred and an unspecified number of ($1
par) common shares into which the preferred is conver¬
tible.
Underwriters—F. S. Yantis & Co., and H. M.
filed
31
capital
Underwriter—Eastman, Dillon & Co., New York.
April 22 filed 75,000 shares ($1 par) common.
Under¬
writer—Doolittle, Schoellkopf & Co., Buffalo, N. Y. Price
by amendment.
Proceeds—Shares are being sold by
six stockholders who will receive proceeds.
Business—
Manufacture of plasticizers
stock.
Price
being sold by 13
March
Va.
W.
underwritten.
be
San Jose, Calif.
April 16 filed 20,000 shares of $1.35 cumulative preferred
stock
(par $25), with warrants and 40,000-shares of
common
stock (no par).
Warrants for common stock
may be exercised through April 1950 at $10 per share,
through April 1952 at $11 per share and through April
1953 at $12 per share.
Underwriter—Mitchum, Tully &
Co.
Proceeds—To repay bank loans and for additions
and betterments.
Business—Manufacturer of candy.
Ohio-Apex,
,
covered 184,821
July 31
filed
originally
shares of $1 cumulative
Purpose—Proceeds of
(jointly).
be
will
New York
Republic Pictures Corp.,
Registration
publicly held debt of three subsidiaries: New England
Power Association;
North Boston Lighting Properties
and
Massachusetts
Utilities Associates in compliance
Old
26 (letter of notification) $146,900 10-year deben¬
tures, 4% series.
To be sold at face amounts of $100,
business.
and
be determined
To
Kidder, Peabody & Co.
Mar.
Mar.
—
1.967
in
mature
Underwriters
California,
of
Corp.
Acceptance
Francisco
San
Refrigerated Cargoes, Inc., New York
Feb. 3 filed 25,000 shares ($100 par)
April 23 filed $75,000,000 of debentures,
Under¬
common.
&
writer—Burr
Boston, and W. C. Pitfield & Co.,
Francisco
San
all the assets of McCormack & Co., a
•
& Co., Inc.,
Ltd., Montreal. Price
—$5.75 a share. Proceeds—Proceeds, together with $300,000 bank loan and $300,000 from the Shell Co., will be
Elwell
Elwell,
D.
purchase of the New Brunswick
erties of New Brunswick Gas & Oilfields, Ltd.
April 14 (letter of notification) 25,000 shares ($1 par)
common; $225,000 of 6% certificates of indebtedness and
15,300 shares ($1 par) common to be issued on exercise
of the option granted by the certificates of indebtedness.
The common will be offered at $1 a share and the cer¬
tificates at face amount.
Hannaford & Talbot will be
the
capital stock.
par)
(no
shares
Underwriters—William
Mass.
5,000 shares ($2.50 par)
common.
Price—At market. Being sold on behalf of
Charles S. Rayson, Vice-President. Tucker, Anthony &
Co., is broker for the sale.
(letter of notification)
April 7
New
Canada
150,000
filed
2
used towards the
working capital.
To liquidate current obligations and for gen¬
Co., Phila.
Reed-Prentice Corp., Worcester,
Oilfields, Ltd., Fredericton,
New Brunswick
Pa. Y
Pittsburgh,
eral corporate purposes.
work.
April
(letter of notification) 260,109 shares
common.
Price—$1 a share.
To be Qffered
.April 8
Corp.,
18 (letter of notification) 94,000 shares of ($1 par)
common.
Price—$3 a share.
Underwriting—Euler and
to the corporation and to add to general funds
payment of costs of construction and development
Brunswick,
McClanahan
Products
Hamie
April
company
for
clients.
I
deben¬
of 15-year sinking fund
1962. Underwriter — G. H. Walker & Co.,
R. I. Price by amendment. Proceeds—To
redeem first mortgage bonds, to repay Freedom-Vdhvoline Oil Co. the balance of advances made by that
due
tures,
development of mining property.
tion and
Providence,
Proceeds—For explora¬
Price—500 a share.
company.
(5/6-9)
Newark, O.
-
March 28 filed $1,750,000
Thursday, May 1, 1947,
FINANCIAL CHRONICLE
THE COMMERCIAL &
(2384)
56
50,000
Albion, Mich.
Service Caster & Truck Corp.,
April 10 filed 32,000 shares ($25 par)
$1.40 convertible
Byllesby & Co., both of Chicago. Price—At par. Proceeds
preferred and 53,962 shares ($1 par) common.
Under¬
writer—Smith, Burris & Co., Chicago. Price—$25 a pre¬
—To be added to working capital.
ferred share and $10 a common
share.
Proceeds—Pro¬
provided by a term bank
will be used to discharge indebtedness to Domestic
ceeds, together with funds to be
•
Meyer-Blanke
April
23
Co.,
Louis,
St.
Pacific Gas &
Mo.
(letter of notification) 3,612 shares (no par)
Price—$13.25 a share.
To offered to em¬
No
underwriting.
For
general
corporate
common.
ployees.
scription to
par
purposes.
Electric Co., San
Michigan Consolidated Gas Co., Detroit
one
•
with
funds
to
be
received
from
the
sale
•
Pennsylvania
shares to Michigan's parent, American Light &
common
CorL
(by amendment) filea 110,000 shares of
cumulative convertible preferredVock, series B (par
19
75c
$5)
Underwriters—Van Alstyne, Noel & Co. Price per share
$12.50 Proceeds—Net proceeds will be applied To re¬
demption of bank loans and to cover part of cost of
,
expansion program.
:
v; ;
April 25 (letter of notification) $200,000 preferred stock.
Underwriting, none. Price — $100 per, share,, Working
capital.
Pharis Tire & Rubber Co.,
Manufacturing
Solar
*
Frosted Foods Corp.,
(5/2) V',
Corp.
March
Southampton, Pa.
additional
of
Credit
new
/
program.
1969.
Underwriting—To be determined by competitive bid¬
ding. Probable bidders—Dillon, Reed & Co., Inc.;, Halsey, Stuart & Co^.lrxO; The First Boston Corp.; Harris,
Hall & Co. (Inc.). Price—To be be determined by com-petitive
bidding.
Proceeds — Net
proceeds,
together
loan,
stockholders of record May 12 at
for each 10 shares held. Rights
Proceeds—To finance construction
common
in ratio of
will expire June 30.
March 7 filed $6,000,000 first mortgage bonds, due
Francisco
April 9 filed 626,136 shares of common stock (par $25).
Underwriters—None. Offering—To be offered for sub¬
South
.
V
<■
31
filed
200,000
$4,000,000
first
and
March
Newark, O.
shares
refunding
Underwriters—To
1977.
ill In-JTv
S*TC. c:
common and
^
Carolina Power Co., Charleston,
(no
par)
mortgage
be determined
bonds,
due
by competitive
bidders include The First Boston
Ripley & Co.; Morgan Stanley & Co.;
Halsey, Stuart & Co. Inc. (bonds); Kidder, Peabody &
Co.
and
Merrill Lynch, Pierce,
Fenner & Beane
(jointly); W. C. Langley & Co. and Carl M. Loeb,
Rhoades & Co. (jointly). Price to be determined by com¬
petitive bidding. Proceeds—To reimburse its treasury
funds expended for property improvements.
Traction
Co., will be used to finance its property con¬
and
equipment program and to reimburse
treasury for previous construction expenditures.
Sept. 27 filed 100,000 shares ($20 par) cumulative con¬
bidding.
struction
vertible
Underwriter—Van Alstyne, Noel &
York. Price—$20 a
share. Proceeds—For payment of loans and to replace
Corp.; Harriman
its
Co. and G. L. Ohrstrom & Co., New
Mission
working capital expended in purchase of building from
RFC and to complete construction of a building.
Appliance
Corp.,
Los
Angeles
March 25 filed 58,000 shares ($5 par) common.
Under¬
writer—Lester & Co., Los Angeles.
Price—$11.50 a
share.
Proceeds—For construction of
ing and an office
ery
t>#.
and equipment.
Mobile
April28
(Ala.)
Battle
House,
Inc.
(letter of notification) $250,000 of convertible
'^°rtrg* 5% bonds, due 1957. Price,
Mobile, will act
Co.,
as
agent.
For
par.
Shropshire &
expansion and
im¬
provement purposes.
Morris
Plan
Pig'n Whistle Corp., San Francisco
plant build¬
new
building and for purchase of machin¬
Corp. of America, N. Y.
31 filed $5,000,000 of debentures,
Underwriter—
Eastman, Dillon & Co., New York. Price by amendment.
«JnoACn^ °*£e!:ire ,outstanding bank loans in amount of
|
shares (par $7.50) cumulative con¬
vertible prior preferred $2 dividend stock.
Underwriter
—G. Brashears & Co., Los Angeles.
Price by amend¬
ment.
Proceeds—23,481 shares are being issued by com¬
pany and proceeds will be used in connection with recent
purchase of four Chi Chi restaurants and cocktail
lounges in Lorig Beach, Riverside, Palm Springs and San
Diego and for working capital.
Platinoyd Industries,, Inc., New York
Southern
Branch, N. Y.
Co.
Inc., Shreveport, La.
Fe?o$5,000,000- collateral trust
to 137
notes, series 118
inclusive, with 4% interest from maturity. Under-
siting—Notime sales
underwriting.
automobile
paper
ness as a
Proceeds—For purchase of
Murphy
(G. C.)
13JPed £50,000 shares of
a
•
Price
by
^ro.cce^~Redeinption of outstanding
Mutual
Fund,
amend-
—
stockholders in the ratio of $200
principal amount of debentures fof each 20 shares of
scription by
common
debentures will be convertible into
pre-
common
held.
common
from May 1, 1947 to
4%%
Proceeds—For
notes.
Inc.,
St.
Louis,
of ($50 par)
general corporate purposes.
writing, ror
a
The
repayment
of
April 30, 1959. Price—Par
$11,500,000 of bank loan
•
Mo.
^Slli2lf(leitte» ?f notjfication) 4,990 shares
capital stock. Price—$52
share.
No
March 28 filed
$11,077,800 15-year 2%% convertible de¬
None.
Offering — For sub¬
3 share plus divi(Iends. Indefinitely
^tponed
(5/13)
bonds, due 1977.
Underwriters—To be determined by competitive bidding.
Probable bidders include Halsey, Stuart & Co./Inc.;
Blyth & Co., Inc.; Union Securities Corp.
Proceeds-^
Part of the proceeds will be used to redeem $3,762,00©
of outstanding first mortgage bonds at 105V4.. Balance;
will be applied to capital additions. Bids Invited—Bids
for purchase
of bonds will be received at office of
Drinker, Biddle & Reath, 117 South 17th St., Philadel¬
phia up to 11 a.m. May 13.
;
J
Southern
\
Underwriters
bentures.
common stock (par $1).
Underwriter—Smith, Barney & Co.
slt
Inc., Smithtown
Public Service Co. of Indiana Inc.
Co., McKeesport, Pa.
underwriting
For
Quebec Gold Rocks Exploration Ltd.,
Nov.
13
filed
100,000
Underwriter—Robert
shares
B.
Soden,
Montreal
capital stock.
Montreal, director of
(50tf
par)
sold publicly through the
Price—Not less than $28.75 a share. Pro¬
ceeds—To redeem unexchanged shares of old stock and
for new construction and improvement purposes.
underwriters.
(letter of notification)
March 26 filed
preferred stocks in the ratio of one-half share of
new stocks for each share of old stock held.
Unexchanged shares will be
which is its principal busi¬
finance company.
Los Angeles
(Inc.), Chicago. ! Offering—Shares will be offered
for outstanding Series B, 6%, and Series C,
51/2%
200 shares ($100 par)
common and 1,846 shares
($100 par) preferred.
Price—
$100 each. No underwriting. For development and con¬
struction of airport at Smithtown, N. Y.
'
April 16
Co.,
'feach of the
(5/5)
•
Edison
in exchange
April 28 (letter of notification) 50,000 shares of common
stock (par $1).;Underwriting, none. Price—$1. Store fix¬
tures, etc.
•
'
;
Progressive Air Service,
Motors Securities
Co.,
California
1,653,429 shares of cumulative preferred
and 1,653,429 shares Of $25 par preference stock. Under¬
writers—First Boston Corp., New York, and Harris, Hall
April 15 filed
$4,080,000, with the balance applied to general corporate
purposes.
Probable
Dec. 26. filed 50,000
•
Mar.
preferred.
California Water Co.
$5,100,000 first mortgage
Standard Railway
Equipment Mfg. Co., Chicago
500,000 shares ($1 par) common. Underwriters—Smith Barney & Co., New York; and The Illir
nois Co., Chicago.
Price by amendment. Proceeds-Company will use proceeds from the sale of 13o,00(J
March 28 filed
!
shares to retire a
365.000
shares
are
$1,500,000 bank loan.
being
The remaining
sold by certain
stockholders.
Volume
165
Stanley
Number 4590
Works,
THE COMMERCIAL &
FINANCIAL CHRONICLE
(2385)
New
Britain,
Conn.
Tide Water Power Co.
April 25 (letter of notification) 5,000 shares of common.
Price, about $60 a share. No underwriting. To increase
working capital and for payment of bank loans.
Starrett
•
Mar. 31 filed 157,868 shares
writers—Union
Co.
(no par) common.
Under¬
Corp. and W. C. Langley &
Securities
are
April 22 filed $2,686,000 5% collateral trust bonds, due
T.966, and 31,200 shares ($1 par) common. Underwriting
—Company said it would pay 1 % commission to brokers
for soliciting exchanges and that all
such brokers may
•
Tilden
Commercial
Alliance,
Inc.,
Price—$10
exchange for the company's presently out¬
standing 5% secured income bonds, series 1950, and its
4% collateral trust bonds, due 1966.
The
foe in the ratio of
$1,000 of new bonds and 40 shares of
for each $1,000 of secured income
bonds, while
the collateral trust bonds will be
Oct. 25 filed
share.
increase working capital.
exchange will
Toledo
common
exchanged
on
a
and
dollar
for dollar basis with the
new bonds.
Business—Holding
owning all the stock of Starrett Brothers and
Eken, Inc., engaged in construction of buildings.
Stratton
&
Terstegge Co.,
April 24 (letter of notification) 1,487 shares of common
behalf of company and
1,562 shares of common on
on
behalf
of
Walter
Terstegge,
director. Price
a
—
Company will
Strauss
$64
a
Bankers Bond Co,, Louisville.
proceeds for working capital.
use
Fasteners
Inc.,
New
ing
a
York
Street & Smith
•
1957.
par
Underwriter—Eastman,
offering
Brick
&
to
be
Tile
offered
U. S. Television
Co.,
Kansas City,
at
market
in
Manufacturing Corp., New York
Suburban
Syracuse,
N.
c.,
000 5%
No
East
cumulative
Textron Inc.,
Feb.
28
1962, and 225,000 shares
ment also covers
Providence, R. I.
conversion
300,000 shares ($25 par) 5% convertible
Underwriters—Blair & Co., Inc., New
York,
and Maxwell, Marshall &
Co., Los Angeles. Price by
working
capital.
Offering
Offering
offering consists of a smaller num¬
Company will use its proceeds estimated
of $6,500,000
together with a $7,500,000
common
common.
debentures.
common
The
share.
Underwriter—Carver
Vauze
&
.
Dufault
Mines, Ltd., Toronto, Canada
500,000 shares ($1 par) common.' Under¬
writer—Name to be filed
by amendment. Price—50 cents
Mar. 31 filed
date
a
share.
5,000 shares
•
.
Wiremold
Proceeds—For general
operating expenses.
Under¬
are
[$1,000,000 12-
time
same
Co.,
Hartford,
being
loan
withdrawn
from
Conn.
three
>
in¬
'
x
^
April 24
(letter
of
notification)
11,000
cumulative preferred
($25 par), Series A.
a
share.
Underwriter—Putnam
shares
of
5%
Price—$26.30
& Co., Hartford.
equipment and to increase
working capital.
v
state¬
(5/5-15)
Childs,
Inc./Boston. Offering—Of the total
debentures filed at
year
*
reserved for
Inc.
having been replaced by private
surance
companies.]
Co., Salt Lake City
112,000 shares of
,,
Stores,
reserved for
offering to em¬
ployees. Price—By amendment.
Proceeds—Stock is being
sold by the four officers
and directors.
new
($1 par)
treasury.
Feb. 25, filed 50,000 shares
($1 par) common.
writers—First Colony
Corp., New York, and
Jeffries & Thorndike
ac¬
Price—Debentures 98; common $3.75
Proceeds—For plant
construction, purchase
of equipment and for
working capital.
amendment.
for
of the
Co., Inc., Boston.
per
Proceeds—For payment of
$3,950,000 of
bank loan notes;
purchase of two notes issued by a sub¬
sidiary, Textron Southern Inc. in the amount of
$1and
—
Whites Auto
Dec. 20 filed $700,000
15-year convertible debentures due
under¬
filed
each,
indefinite.
(5/19)
organized Feb. 26, 1947 to
was
Utah Chemical & Carbon
preferred.
'000,000
minimum
a
burse its
Power Co. The proceeds will be
used in connection with
this acquisitionprogram. Bids—Bids for
purchasjfe of
securities expected May 19.
Temprite Mfg. Co., Inc., Arkansas City, Kan.
April 28 (letter of notification) $200,000 of common
and
No
,
quire the capital stocks and assets of three
Michigan
operating utilities—Houghton County Electric
Light Co.,
Copper District Power Co. and Iron
Range Light &
underwriting.
unit.
cap¬
Inc. (bonds);
Kidder, Peabody & Co.; Merrill Lynch,
Pierce, Fenner & Beane and Paine,
"\Vebber, Jackson &
Curtis
(jointly); Blyth & Co., Inc.; The First Boston
Corp. Price—To be determined by competitive
bidding.
«•
per
Price
working
Underwriting—To bedetermined by competitive bid¬
ding. Probable bidders include Halsey, Stuart & Co.
,
.
$100,000 of preferred. Price—$100
writing. For operating capital.
Proceeds
,
March 6 filed $3,500,000 first
mortgage bonds, due 1977
10,000 shares ($100 par) cumulative preferred stock.
Y.
April 23 (letter of notification
preferred stock. Price—$100 a
For capital additions.
'
Inc.
shares
Western Electric
Co., New York
April 16 (letter of
notification) 1,500,000 shares (no par)
common.
To be offered for
subscription to stockholders
of record
May 27 at $40 a share. Rights
expire June 27.
No underwriting. To reduce
indebtedness and to reim¬
Proceeds—Company
Ga
at
and
Offering date indefinite.
Syracuse
Lines,
1,200,000
bank loan, toward
payment of its
promissory notes and
to finance
company's equipment and facilities
expansion
program now under way.
ital and expansion of business.
.
^
Air
filed
($1 par) capital stock.
Read & Co. Inc. Price
by amend¬
consists of an unspecified
number of shares
being sold by the company and
byWilliam A. Coulter, President
and Director. The
amount®
being offered by each will be stated
definitely by amend¬
ment and the total
number of shares
presently stated
ment.
over-the-counter
preferred. Underwriters—Names by amendment.
$5 per share for preferred. Proceeds—For
(par $1).
Underwriter—C. K. Pistell & Co., Inc.
Offering—Com¬
pany is selling 45,000 shares, and eight
selling stock¬
holders are disposing of the
remaining 150,000 shares.
Price—$10.50 a share. - Proceeds—From 45,000 shares
eold by company will be
applied to working capital
Initially.
27
Underwriter—Dillon,
Mo.
$4.50
stock
common
Western
Nov.
per
Trenton, N. J.
shares
broker.
Weber Showcase &
Fixture Co.,
Inc., Los Ang.
Mar. 31 filed
87,010 shares ($5 par) common.
Under¬
writers—Name to be supplied
by amendment.
Offering
-—Of the
total, 16,671 shares will be offered for
subscrip¬
tion to Weber's
common stockholders
on the basis of
one
new share for
each five
presently held.
The remaining
70,339 shares will be offered
publicly through under¬
writers.
Price by amendment.
Proceeds—To reduce
bank loans and to retire
a
purchase money trust deed
note.
will be reduced if the
ber of shares.
Upper Peninsula Power Co.
195,000
as
through
share. Of the common 30,000 shares are reserved for
the exercise of warrants up to Jan.
15, 1950, at $3.50 per
share and 200,000 are reserved for the
conversion of the
(5/7-8)
par) cumulative pre¬
common prior to May
1,
Dillon & Co., New York.
City Bank, New York, and $250,000 to pay a short-term
ibank loan to Fidelity Union Trust
Co., Newark, N. J.
Balances will be added to
working capital.
Aug. 28 filed
of
To be offered
Nov. 4 filed 200,000 shares (par
$1) 25c cumulative con¬
vertible preferred and 230,000 shares
of compion (par
50c). Price to public for preferred $5 per share. Em¬
ployees will be permitted to purchase preferred at
Price by amendment.
Proceeds—Company will use $375,<000 of proceeds to
pay outstanding bank loan to National
Swern & Co.,
company. Price—$10 a share.
Billings Olcott & Co., New
York,
Co., New York. Proceeds to selling stockholders.
United
Products, Inc., Mt. Vernon, N. Y.
(letter of notification) 400
shares of Class B
on behalf of
Theodore
Blanchard, a director
the
market.
represents a part of the holdings of the present stock¬
holders. Indefinitely postponed.
ferred, convertible into $1
&
Iowa
Walker Vitamin
common
by competitive bidding.
April 23 (letter of notification) $25,000 5% cumulative
capital stock on behalf of the Trinway Corp. and its
parent, Amerex Holding Corp., both of New York.
The
Under¬
Offering—The
cumulative preferred.
payment of $56,906,590, exclusive of interest and
shares
stock.
•
April 23
Tri-United
•
Publications, Inc.
Suburban Propane Gas
Corp.
March 28 filed 50,000 shares
($50
a
man
share. Proceeds—For additional
common
Edison Co.
Plastics Corp.,
Irvington, N. J.
April 25 (letter of notification) 30,000 shares of common
stock (par 50c).
Underwriting, none. Price, at market
(about 25c). Stock will be sold through Bruns, Norde-
working capital.
July 17 filed 197,500 shares of
writers—Glore, Forgan & Co.
To
dividends.
March 25 filed 25,000 shares of 60
cents cumulative con¬
vertible preferred.
Underwriter—Floyd D. Cerf Co. Inc.,
Chicago.
Offering—The shares initially will be offered
for subscription to common
stockholders of Segal Lock
& Hardware Co.
Inc., parent, at $9 a share in the ratio
of one share of
preferred for each 30 shares of Segal
.common held.
Unsubscribed shares of preferred will be
offered publicly at
$10
underwriting.
Probable bidders include The First
Boston Corp.;
Halsey,
Stuart & Co. Inc.
(bonds only); Blyth & Co.,
Inc.; and
Smith, Barney & Co. Price to be determined
by competi¬
tive bidding. Proceeds—Net
proceeds together with
$4,500,000 bank loan and if necessary, the
$5,000,000 to be
contributed by its parent, Cities Service
Co., will be used
to redeem outstanding debt and
preferred stock, involv¬
Louisville, Ky.
share. Underwriter—The
No
Goods, Des Moines,
Victory Gold Mines Ltd.,
Montreal, Canada
Nov. 13 filed
400,000 shares, ($1 par)
capital stock.
Un¬
derwriter—None as yet. Price—25
cents a share.
Pro¬
ceeds—For
developing mining property.
Business—
Acquiring and developing mining
properties.
Brooklyn.
$32,000,000 first mortgage bonds, due
1977,
160,000 shares of ($100 par)
Underwriters—To be determined
company
•
(O.)
a
Young Sporting
57
,
April 22 (letter of notification)
30,000 shares ($10 par)
class A stock.
Offering—Securities will
Vic
April 22 (letter of
notification) 250 shares of preferred.
Price—$100 a share.
No
underwriting.
To be sold
through officers of
company.
For
purchase of in¬
ventory, establishment of, place of
business and for
working capital.
selling the stock and also are the
principal
underwriters. They will
engage others to sell the stock.
Price, about $9 per share.
Proceeds—Proceeds go to the
selling stockholders.
Corp., New York
be deemed to be underwriters.
be offered in
(5/5)
'
'A
'
*
•
'
For
•
'
1
f
Wisconsin Power & Light
Co., Madison, Wis.
May 21 filed 550,000 shares ($10
par) common stock to
be
sold
at
competitive
bidding.
Underwriters—By
amendment.
Probable bidders include
Glore, Forgan &
Harriman Ripley & Co.
(jointly); The Wis¬
Co.; Dillon, Read & Co., Inc.
Proceeds—Part
of the shares are
to be sold
by Middle West Corp.,
top holding company of the
System, and part by pref¬
erence stockholders of
North West Utilities
Co., pares!
of Wisconsin, who elect to
sell such shares of
Wisconsim
common which will be
distributed to them upon the
dissolution of North West Utilities
Co.
Co.,
and
consin
Prospective Security Offerings
(HOT YET IH
•
REGISTRATION)
INDICATES ADDITIONS SINCE
PREVIOUS ISSUE
(Only "prospectives" reported during the
past week are
given herewith. Items previously noted are not
repeated)
e
JJnited States
[j
-
Government,
State, Municipal
Atlas Powder Co.
•
April 29 stockholders voted to increase
authorized com¬
mon
from 450,000 to
700,000 shares (no par). Increase
is designed to provide for
possible new capital invest¬
ment, retirement of indebtedness or
and
general
Corporate Securities
purposes.
—
•
Blair
NEW
BOSTON
•
PHILADELPHIA
BUFFALO
•
,
CHICAGO
•
ST. LOUIS
corporate
•
on
•
•
SAN
CLEVELAND
FRANCISCO
500,000 shares of preferred stock and
Under
a
an
issue
new
increasing
authorized
time, the proceeds to be
used
Probable bidders include
Dean
Co., Inc.; Otis & Co. (Inc.)
for
expansion purposes.
Witter
Service Co.
unpaid dividends.
creating
common from
2,000,000 shares to 2,500,000
shares. Company proposes to issue
80,000 shares at this
YORK
•
PITTSBURGH
of
.
California Electric Power Co.
May 13 stockholders will vote
£> Co.
inc.
•'
...
Cities
April 24 the SEC approved a plan for complete recapital¬
ization. Under plan, company
proposes to use treasury
resources to pay off $40,578,100 balance of its 5% deben¬
tures of 1950, and to offer a maximum of
$115,426,950
new
50-year 3% debentures in exchange for its preferred
and preference stocks and
discharge of all claims to
&
Co., Blyth &
<
.■.
,
holders
the
are
terms
offered
of
the
exchange,
preferred
stock¬
debentures totaling $196.50 per
$6 preferred; $193.50 for the preference
stock, and $19.50 for the preference B stock, in satisfac¬
tion of par and accumulated dividends in
each case.
share
for
new
the
Company proposes
of its other 5%
to retire the remaining $59,910,200
debentures, maturing from 1958 to 1969,
With funds to be obtained from
disposal of its
(Continued
on
page
58)
holdings
i
'
THE
57)
in the three remaining utility companies in the system.
These utility holdings comprise 100% common stock
ownership of Ohio Public Service Co. and Toledo Edi¬
son
Co., and 05% of the equity in Federal Light &
Traction Co.
The preferred exchange plan is contin¬
gent for its consummation of acceptance by holders of
(Continued from page
of the
60%
to effect
preferred stock.
Gas &
Coast Counties
•
Dealers will be
employed
exchanges.
Electric Co.
U. Com¬
has applied to California P.
authority to issue 140,000 shares of
April 23 company
mission for
4% pre¬
series A (par $25), of which 75,000 shares
would be offered in Exchange for outstanding 5% pre¬
ferred on share for share basis. Remaining 65,000 shares
would be publicly offered through underwriters. Prob¬
able bidders include, Dean, Witter & Co.; Blyth & Co.,
'Inc.; Otis & Co. (Inc.)
ferred stock
Goodall-Sanford, Inc.
•
issue of
$100).
privately
used to
30 stockholders voted to authorize an
$4,500,000 4% sinking fund preferred stock (par
Company, it is said, intends to sell the issue
to a group of insurance companies. Funds will be
retire $4,059,500 314% debentures due 1956.
April
Jones &
•
Laughlin Steel Corp.
April 30, Ben Moreel,
given consideration to
directors have
financing, but the extent
Chairman stated
some
will be dependent upon
and nature
decisions relating to
additional construction
underwriter, Union Securities Corp.
a
program:
possible
•
Probable
Power & Light Co.
its application to SEC to issue ad¬
its parent at $5 per share said
that the money to be received ($4,500,000) will not be
sufficient to complete its expansion program and that
it may sell additional first mortgage bonds under its
existing mortgage. Probable bidders if publicly sold,
Halsey, Stuart & Co., Inc.; Shields & Co. and White,
Weld & Co. (jointly); Lehman Bros, and Kuhn, Loeb &
Co. (jointly); Blyth & Co.; W. C. Langely & Co.
April 25 company in
ditional common stock to
14)
pends on the police preventing a
lot
of
unpleasant, low-minded
persons from breaking into my
house, taking away my clothes
and holding me up on Connecti¬
(Continued from page
,
•
will vote on making a new
issue of
50,000 shares of preferred stock issuable in series. Com¬
mon
stockholders shall have no pre-emptive right to
subscribe
My freedom to buy
things, or to
things, or to
make
work with
other
people, depends on a gov¬
and order which
would-be tyrants and
monopolists from forcing me to
buy or not to buy, to make or
not to make, to work or not to
ernment of law
prevents
pleasure.
to
by
that
are
men
work
this subject, let
me
make it plain that whether
labor or management is right or
I'm
on
dispute
the
of both parties to set¬
wrong
in
have
particular
a
no
effect upon
legal duty
their disputes peacefully
without
inflicting
injuries
tle
other
on
people.
That
tion
and
Company
preferred.
new
was
of
ought to be
a
formerly
"freedom" means that men
not subject to any arbitrary
been
educated
and, de¬
spite their objections, to a general
understanding that the freedom of
equal freedom for all. We organ¬
ize public police forces for the
ture of an orderly
society.
But, we are told that the
"com¬
pulsory arbitration" of labor dis¬
putes would be an unthinkable
management does not in¬ tyranny.
~ v
clude a freedom to monopolize
We are told that both business
commerce, a freedom to defraud
managers and labor leaders are
or gouge customers, or a freedom
opposed to "compulsory arbitra¬
to dictate wages and working con¬ tion"— and
generally
speaking
ditions to unorganized, and indi¬ that is true.
In fact, they cannot
vidually helpless employees.
be blamed for opposing the man-
business
brutal
to
power
will bring eco¬
justice but that submission
public law and to public
a
tribunals will bring
economic tyr¬
anny? This is nothing less than
a medieval argument in favor of
trial
combat.'
Yet those ad¬
call themselves "lib¬
by
it
vancing
erals."
ing
In
who
rd demand¬
definition.
a
the
carries
very purpose of compelling men
But it does not to submit their disputes to the
need obey no
compulsory arbitration of Courts
rules, because, in order to be free, of Justice—and of preventing them
men must be subject to the rules
from using private force to co¬
which must be laid down and en¬
erce their opponents.
forced by a representative gov¬
Now there is
another phrase
ernment.
Any rule of govern¬ that needs an accurate definition.
ment that permits one class of What is
"compulsory arbitration"?
men to do as they please, regard¬
It is the enforcement of public
less of the injuries and restraints
law for the settlement of private
imposed on others, is not a rule disputes.
of freedom.
Such a fttfle of law
Is
that necessarily a wicked
grants a special privilege to the and tyrannical procedure?
favored citizens and denies free¬
No.
No.
That is the essence
dom to all the rest.
of the "administration of justice,"
In the last fifty years, American upon which rests the entire struc¬
great public expense,
of
nomic
others to accept his
if we are to preserve
despotic rule.
mean
that they
at
private dictation.
Can it be argued that contests
forums
or
businessmen have
000 will be sold through competitive
Southern Pacific Co.
•
a
bright lexicon of labor
"liberal" is a person
will stand fpr anything
a
union
and
label,
that
will
oppose anything that hasn't the
union label.
This
fender
mass
"liberal" i3
an
ardent de¬
unless a
of civil liberties,
picket line is engaged in de¬
stroying them.
This
maturing June 1, 1975.
together with other funds will retire the
mortgage bonds, series A,
first
Francisco
received at
office of J. A. Simpson, Treasurer, 165 Broadway, New
York 6, N. Y. Probable bidders include Kuhn, Loeb &
Co.; Halsey, Stuart & Co. Inc.
outstanding
for
call
it
an
evil
thing.
read the Wagner Act you
thing
the NLRB to issue a "cease
desist" injunction against an
employer
then have
and
it en¬
forced by a court.
if
But
read
you
Norris-
the
is
an
enemy
of
of
San
active
part
in
undermining
free economy and our
our
democratic:
government.
As Autocratic
Labor
Ruler
A
large majority of our people
and a large majority of their rep¬
resentatives
in
Congress
have
come
to
understand that
we
can¬
economic and
political institutions and individ¬
it is an evil thing for an
ual freedom by substituting labor
to
get an injunction against a
leaders for captains of industry
labor union, even to protect him
as
the autocratic rulers of busi¬
from irreparable injuries inflicted
ness and
government.
Any eco¬
by plain violations of law.
nomic or social class that seeks
If you read the flaming* sob¬
or threatens to dominate the lives
bing,
vituperative
protests
of
of a people who would remain
Green, Murray and Lewis against
free must be compelled by their
"government by injuction" you
government to subordinate class
may be convinced that no court
that
employer
LaGuardia Act you will learn
should be trusted with
to
ever
order
a
union
the power
to do or
not to do anything.
cases
full of
where the unions have
ap¬
pealed to the courts to issue or¬
ders—to issue these hateful in¬
I
remember
organized crime and racketeering,
ing
Constitution.
local
one
not
our
preserve
interests and self-advancement to
the
the
overriding public interest and
of the people
progress
as
a
whole.
Yet the law reports are
junctions against their opponents.
"liberal"
$24,767,600
Terminal 4s, due April 1, 1950. Bids will be
will learn that it is a good
and
(5/13)
Company will receive bids up to 12 Noon (EDT) May 13
for the sale of $22,500,000 new San Francisco Terminal
sometimes
If you
to their
No one can be granted
freedom to organize private force
society.
dictation,
$29,000,000 first mortgage bonds, of which $26,900,^
bidding; $2,100,000
wil be exchanged for a like principal amount of Northwestern's 4VZ% debentures due 1959, held by American
Power & Light Co.; and (b) to issue and sell at private
sale $4,000,000 of serial notes, which will bear an interest
rate not expected to exceed 214% per annum, payable
in 20 equal semi-annual installments. Probable bidders
for the first mortgage bonds include Halsey, Stuart & Co.
Inc.; The First Boston Corp.; Glore, Forgan & Co.; Blyth
& Co., Inc.; Harriman Ripley & Co.
sell
thing and sometimes a good
compel others to submit
to
dom
There is another w'
fundamental obliga¬
all citizens in a civilized
is
and to compel
understood, even
children in the United States,
It
other
the essential
which they refuse to do.
While
,& Light Co. and Northwestern Electric Co. Incident to
the merger, Pacific as survivor proposes: (a) to issue and
currently
Nopco Chemical Co.
June 2 stockholders
doing
from
should
cut Avenue.
work, at their
prevent
to
freedom
Pacific Power & Light Co.
The new issue,
Labor Monopoly
Freedom and
to
&
preferred stock and $4,500,000 of bank loans and
meet expansion costs. Merrill Lynch, Pierce, Fenner
Beane has been selected as underwriters.
Louisiana
if offered
•
April 29 stockholders approved a proposed issue of 100,000 shares
($100 par) cumulative preferred stock to
finance retirement of 32,000 shares of 414% outstanding
•
Oil Products Co. Probable underwriter
publicly: Paine Webber, Jackson & Curtis. ■
known as Natiorv
April 24 the SEC approved the merger of Pacific Power
Lerner Stores Corp.
sans
f
Thursday, May 1, 1947
CHRONICLE
COMMERCIAL & FINANCIAL
(2386)
58
time
defend¬
We cannot
and
rely
on
self-restraint
the good will
those who
of
preach ill-will constantly and sel¬
dom practice self-restraint.
The labor "leaders of America
are
not
wholly
responsible
for
in Chi¬ policies and practices that have
unless
they are organized
and
Beset
cago
against an injunction suit alienated public support.
operated as a labor union.
brought by a local lodge against by irreconcilable employers on
-This "liberal" is the unrelenting the parent organization.
The suit the
right,
and
troublemaking
foe of private monopoly, unless it was really a contest between a communists on the left, harassed
is a labor monopoly,
in which local
leader
who
had
become by rival leaders and organiza¬
case he claims
that the right to wealthy by what is sometimes tions,
under
constant pressure
monopolize is guaranteed by the called "legal graft" and another from a rank and file worried and
"liberal,"
label.
Fathers and
children
in
A. F. of L. union
leader
who
was
trying
to
confused
by
extraordinary
eco¬
vulgar use nomic uncertainties, our labor
of guns and brass knuckles.
In leaders have had no easy task;
labor lingo an injunction is only and all too many have been in¬
an
evil thing when it is issued capable of mastering a difficult,
against you. It is a shining sword complex job.
of justice when it is issued for
Let it be not only admitted but
mothers, who have
according
to
popular definition, is simply a
blind, gullible partisan of anyone
or any program carrying a union
This
an
schools infested
with
get rich by the more
you.
asserted
that
the
great majority
Act has had a~pe- of labor leaders and trade union¬
ists are not consciously antago¬
pray
night and day that their culiar charm for labor leaders and
nistic to the government or* the
loved ones may grow up to be their "liberal" satellites because
institutions which they have been
strong-minded radicals or reac¬ under it no injunctions could be
undermining.
Because
of
that
tionaries, materialists or idealists, issued against labor unions but
no
patience
communists or individualists, but a magnificent flock of injunctions conviction, I have
could be issued in behalf of labor with those who cry out fearfully
Not
all
businessmen
have eating dragon they conjure up —please! please! don't let them
or
threateningly that the wage
learned these
lessons.
Some of and call "compulsory arbitration." group up to be weak-minded "lib- | unions,
earners will not obey the laws of
But "compulsory arbitration" is erals" who will swallow any kind
them still talk about "free enter¬
Inconsistency of Claims
their
government
if laws are
meaningless phrase until you of adulterated food or poisonous
prise" as though the managers and
passed which reasonably require
You may gather from what
the properties which are protected define it by laying down a pro¬ liquor so long as the can or the
both employers and) employees to
have been saying that in my judg¬
bottle bears a union label.
by the public should be free from gram of legal rights and duties
ment one great cause of public make one of three choices—one,
any
obligation to serve public and a procedure for their en¬
Opposition to Labor Union
confusion
in
the
discussion of to settle their disputes peacefully,
forcement.
A "law" may be an
needs.
Speaking broadly, how¬
two, to end their relations
Regulation
labor problems is the inconsistent or
edict of oppression.
A "court"
ever, businessmen do not talk the
One of the chief offenses of way in which the same words are peacefully and permanently, or,
may be an instrument of tyranny.
political nonsense they spouted
used
by
partisans in
arguing three, to submit to an impartial
But
our
faith
in
government many of these "liberals" against
in the Gay Nineties.
their claims.
We should be able arbitration of their disagreements.
i
stands or falls on establishing just a rule of justice under law is
to look to institutions of higher
Theme Song of Labor Leaders
laws and impartial courts for their their irrational and pusillanimous
Labor Has No Privilege to
for
moderators
who
opposition to every proposal that education
But, the theme songs of the enforcement.
Disobey Laws
labor unions and their members would at least try to provide re¬
half-civilized business managers
There should be no "compul¬
It is the lawful privilege of all
definitions
of
common
should be subject to the same sort liable
of fifty years ago are now sung sory arbitration" of labor disputes
Americans to test in the courts
of laws that
require good be¬ terms and insist that partisan de¬
lustily by the half-civilized labor that would destroy or even dis¬
baters cease to abuse the English the validity of any laws that may
managers of today.
They are fill¬ courage collective bargaining. But havior by all other citizens and
language even if they continue to affect them. It is not the lawful
ing the air with highfaultin non¬ that is just what we have been organizations. They join the spe¬
the
patience and confi¬ privilege of any citizen to refuse
cial pleaders in arguing that spe¬ ablise
sense about the freedom of labor
suffering.
The need of the hour
cial
privileges
and
immunities dence of their listeners. Unfortu¬ to obey the laws, .or to set up
being destroyed if we deprive a is to reestablish collective bar¬
that have been viciously abused nately many of our torch-bearers private force to resist the public
labor union of the power to de¬
gaining and voluntary agreements should be continued. They argue have brought in more smoke than force of his government. I think
stroy the freedom of everyone for the settlement of labor dis¬
labor
bosses and their political
that no court should issue an in¬ light.
else.
putes and to end the compulsory
allies
misrepresent and defame
In aid of greater clarity of ex¬
junction against a labor leader
Man is supposed to be a reason¬ arbitration of these disputes by
or
a
union.
Why not?
Is an pression I will venture today to their own constituents when they
ing animal; and yet men today brutal uses of private force. When
order of court which requires men provide a word to designate fairly threaten that American workers
are actually arguing that John L.
a labor union or an employer wins
engage
in
insurrections
to
do
right or to cease doing those who, by indiscriminate op¬ will
Lewis and his gang should
be a pitched battle in a hard-fought
wrong—is such an order essen¬ position to corrective labor legis,- against, their own . government.
granted freedom to freeze andi strike or lockout there is a com¬
There may be rash, sporadic re¬
lation, are now engaged in trying
tially an evil thing?
starve 135 million people into sub¬ pulsory
arbitration by private
volts,' encouraged or inspired by
Here we need a definition—not to prevent the reestablishment of
mitting to their demands, free¬ force.
The same men who are
the professional enemies of a free
an
orderly society in the United
dom not only to ciuit working and demanding freedom from public to explain what an injunction is,
States and who are playing an society; but I would stake all my
still remain employees, but also compulsion are using their free¬ but to explain why labor parti¬
such
"liberal"
teachers,
should
The Wagner
*
,
Volume
THE COMMERCIAL & FINANCIAL CHRONICLE
Number 4590
165
liopes
of Paradise (which, how•cver, isn't a very large stake!) on
my faith that the masses of Amer-
ican
1
wage
not
support.
grudgingly but willingly, the
-laws
the
of
United
enacted
are
by
which
States
the
ability of a free people to
govern themselves.
And to..any
one of these who may protest an^
grily that he is only laboring for
a
freer, better, happier America,
1 would say—if that is your in¬
representa¬
one who resigned from the
union during this two-day period
any
and notified the Union to that ef¬
fect
would'not
be
now
expected
to renew his membership in the
union,, The Mayor's Committee set
May 10 as the final date for ap¬
tention, in the light of what you
actually doing, the word may peals on this matter, agreeing in
benefit of all the people. !• f i be shortened. You are something' substance to settle disputed cases
Not every proposed remedy for ress than a "sapper." Let us say— of just who had
resigned and'who
hadn't. lawlessness
and
irresponsibility just a "sap"!
in labor relations is wisely drawn.
The union representatives and
tives
-
will
earners
in the
of
all
the
people
for
the
•
.
the
But
drastic
rest
blame .for
harsh
or
heavily
needlessly
legislation must
all
on
those
partisans who have stubbornly re¬
to acknowledge evils that
remedy and refused to
a
cooperate in making
visions
In
•
of
existing
this critical
word
assist
to
necessary re¬
a
identifying
carefully choosing
cal
associates.
We
need
we
in
and
•
laws.
labor
time
us
our
need
politiword
a
those who, whether
misguidedly, insist on
perpetuating the industrial war¬
fare which is steadily weakening
define
to
wilfully
all
or
the foundations of
our
free
econ¬
and democratic government.
omy
'
conscious
These'
include
allies
v
nists,'and
No.
old
,
These
•
.
need
commu-
coined
be
There is an
applies exactly.
the "sappers" of
are
men
a
political
and
They do their bit day
by day helping to undermine the
industries and the government of
strength.
the United States.
They
ually' breaking down
grad-
are
faith in
our
law and order and our confidence
U. F. E, Asks Collective
he did not himself resign.
employees to the dangers we face."
tract with the Exchange as
it
had
con¬
though
cancelled
been
never
ex¬
cept that, at the union's own re¬
quest,
the
clause
was
cancellation
30-day
The
to be eliminated.
union consequently understood, it
pointed out, that its contract with
the Exchange had continued in
force right along and no resigna¬
tions
from
union
the
recognized.
be
could
Through
omission, the Curb
Curb
signed
new
agreement referring to
this issue at once, but Mr. Schram
merely said they
to
serious
a
was
not men¬
special meeting
next morning.
The board in due
course did agree to the settlement.
Martin Lacy, Jr.,
representing the
a
Central Trades
cil, AFL,
for
the
and
Labor
Coun¬
union
at the City Hall
Just how many employ¬
ees of the
Exchanges are affected
by the terms of the settlement is
unknown. The New York Stock
meeting.
Exchange
possible
knows
of
only
resignations,
The compromise on
that
finally reached after four
wrangling was that the
contracts were, in effect, inopera¬
tive
for
two
days, that is, from
Sunday midnight, April 20,
to
Tuesday night, April 22, when the
settlement
the
on
was
A.
Wall
years
capable
assistant,
the-counter
In
mercial & Financial
the
letter
open
DIVIDEND
rf
Experienced
unlisted
available
trader
salary
¥}stu y<>rlt
mercial
Park
immediately.
W
Can
furnish
Commercial
55,
Financial
Place,
references.
and
&
Box
New
dividend
and
is
By
experience
available.
"Street" since
employed
Stock
JB
by
1921, lately®
New
employed,
desires
Chronicle, 25 Park Place,
8, N. Y.
change;
numerous
dealer
con¬
tacts; capable handling Chi¬
-York
Exchange house. " Box
New York
Presently
In
424, Commercial & Finan¬
cial
of
:
cago
Branch Office in all de¬
an
DIVIDEND
Chronicle,
N.
8,
of
ers
THE UNITED GAS IMPROVEMENT CO.
JOHNS HOPKINS, Treasurer
in
.
the
on
payable
record
of
May 23,
June
30,
1947,
EATON MANUFACTURING COMPANY
Cleveland, Ohio
of
close
at
years
affairs
and
handling
securities
is
fully
capable of making satisfactory ad¬
justments of stocks and bonds.
Has
been
and
fer
had
Executive head
of
The Board of Directors
to
busi¬
of Eaton
departments.
Has
experience as an ad¬
and
coordinator
in
modern
Box
of business
Financial Chronicle, 25 Park
Fifth Avenue
regular1 dividend
(750)
and
of
Seventy-five
share has been declared
per
Stock
Common
The
and
American
able in cash
Common
Tobacco
Cents
upon
Stock
B
Company,
IOWA
the
of
of
pay¬
B
Notice
The Board of Directors has de¬
clared
Edmund A.
Delaware
Dividend
June 2, 1947, to stockholders
on
SOUTHERN
UTILITIES COMPANY
Checks will be mailed.
Harvey, Treasurer
on
a
the
dividend of 250 a share
Common
Stock
of
to stockholders of record June
is
2,
business
THE
BUCKEYE
PIPE
1947.
EDWARD L. SHUTTS,
LINE
President.
COMPANY
Commercial &
Financial Chronicle, 25 Park Place,
New York 8, N. Y.
423,
30
Broad
New
The
Cents
of
April 28,
York, April 29,
1947
Board
of Directors of this Company has
declared a dividend of Twenty (20)
per
share on the outstanding capital
payable June 14, 1947 to shareholders
record at
the close of business May
O.
\
1947.
Street
day
stock,
O.
BELL,
16,
4
■■
'■
■
NEW YORK
■
v
.
Competent
York
to
office
The
MANAGER
out-of-town
following distributions have been
on
the
Special Stock of the
Investment Research
firm. Now connected. Salary,
Editor of financial
ability
counts.
Box
mercial
&
icle,
25
York
Have
MC 430,
Financial
Park
ac¬
Com¬
Chron¬
Place,
New
&
Underwriting Department.
to
service
spondence.
Allow
be
me
especially
valuable
to
you
in
this
services
trying
can
period.
••••••
Automobile Series
to
per
Chemical Series
E.
Food Series
1947.
Machinery Series
WANTED
.08
...••••
.08
Merchandising Series
09
.....
Metal Series
Oil Series
WANTED
Public
RELIABLE
2 Bond Salesmen
Alert to
possibilities in today's
Markets.
Leads
from
con¬
sistent, progressive advertis¬
A real opportunity for
ing.
men
to
with clients and
work,
50%
willing
Experienced in much Stock Exchange procedure
and
ness.
Seeks
consideration.
commission.
Security Adjustment Corpo¬
practically all phases of over-the-counter busi¬
Steel Series
CARBON COMPANY
.11
..••••
.01
........
.08
•
.
•
•
•
.........
Tobacco Series
........
.08
.08
.16
Diversified Investment Fund.
•
•
.18
Diversified Industries Shs.
•
•
.10
•
•
One-Hundred and Second
good connection.
Box L
Salary secondary
53, Commercial and Finan¬
Consecutive
A
Chronicle, 25 Park Place, New York 8, N. Y.
Quarterly Dividend
quarterly dividend of 50 cents per
share
cial
..•>..«•••
Utility Series
Railroad Equip. Serios
COLUMBIAN
.16
.09
Railroad Series
MAN
.10
...
Insurance Stock Series
Treasurer
.08
07
.........
Government Bonds Series
L. NOETZEL
.07
07
........
Electrical Equip. Series
stockholders of record at the close
of business May 12,
.......
Building Supply Series
the
$.07
.06
Bank Stock Series
share has been declared
capital stock of The Borden
Company, payable June 2, 1947,
(600)
on
May
07
Aviation Series
dividend of sixty cents
April 29, 1947
HELP
of the close of business
5,1947.
DIVIDEND No. 149
An interim
five minutes to prove how my
as
Agricultural Series
periodical. Convincing speaker with
busy wire and voluminous corre¬
Box S 416, Commercial & Financial Chronicle, 25 Park
Place, New York 8, N. Y.
8, N. Y.
T3onkftti
Se¬
curity Analyst whose work has been widely syndicated.
pay¬
May 26, 1947, to stockholders of
record
$75.00 per
week.
able
New
manage
for
L
1947.
Secretary
declared
experience.
years
'
STOCKS, INC.
Company from Investment Income,
Twenty
the
Company payable June 14,1947
Afrit 29, 1947
Agreeable
personality,
training and ability to handle
difficult problems.
Box
Secretary & Treasurer
1947
of record at the close of business May 9, 1947.
this
Unlisted Trader
H. C. STUESSY
New York 3, N. Y.
methods.
Write
Place, New York 8, N. Y.
May 6, 1947.
(?
U
167tii Common Dividend
A
with
&
Manufacturing
Company has declared a dividend of
Seventy-five Cents (75c) per share on
the outstanding common stock of the
HAMILTON
INCOHPOWATtp
Trans¬
Trust
valuable
NO. 89
DIVIDEND
1947.
J/C J&utnecui
25
corporate
ministrator
Commercial
Philadelphia, Pa.
April 22, 1947
twenty cents (20(f) per
Common Stock has been
Y.
corre¬
of long
advanced
51,
value $13.50 per share,
been declared, payable
28, 1947, to stockhold¬
of record May 29, 1947.
June
Com¬
tails. Salary and commission.
VC
dividend of 65 cents per
on
the Capital Stock,
A
excess
excellent
reason
CO.
Company, payable May 26, 1947,
to shareholders of record at the close
in
52.
Capable of making prompt and sat¬
isfactory
decisions
on
important
matters
LEATHER
STATES
April 25,
spondent.
security trader and
UNITED
Board
of Directors at a
meeting held
30, 1947, declared a dividend
of $1.00
per
share on the Class A stock payable June
16, 1947, to stockholders of record May 15, 1947.
C. CAMERON, Treasurer
New York, April 30, 1947.
"
,
With
Assistant to Executive
clerk
THE
DIVIDEND
ROLLAND J.
Financial
Unlisted Trader
Chronicle
The
per share
the Preferred Stock has been declared
on
Ill
TRADER
Financial
payable June 1, 1947, to stockholders of
record at close of business May 23, 1947.
A
York
The
April
quarterly dividend of $1.75
A
417, Com¬
R
to
DIVIDEND NOTICES
PilliUrJL
CORPORATION
Order Clerk
desired.
Broad
'w
UFE
Sanitary
Chronicle, 25 Park Place, N. Y. 8, N. Y.
Unlisted
Special
Standard
&
Chronicle, 25 Park
Can Produce listed business
16 East
DURHAM, N. C.—Samuel J.
Burrow, Jr., is with R. S. Hays &
Co., Inc., Ill Corcoran Street.
Secretary and Treasurer
Unlisted Trader
\
With R. S. Hays & Co.
N.Y.S.E. Firm
Experienced over-the-counter serviceman
expert on teletype.
Operated direct wire
with out-of-town branch office.
Small
but growing retail following.
Box F 418
Commercial
&
Financial
Chronicle, 25
Park Place, New York 8, N. Y.
Chronicle
OHIO—David
Co.,
has
COMMON
Position
&
NOTICES
American
stockholders
Desires
Bache
par
ness
Trading Assistant
order
the
Financial
share
declared
WANTED
to
The
were
share
—
of
an
Guild, CIO, asked for united
by
both
organizations
against anti-labor bills now before
reached and that
SITUATIONS
an
to
Street.
effect, the filing
petition is tantamount
a
action
Place, New York 8, N. Y.
Trader
part to¬
financial
all
C.
Walker has been added to the staff
agent
ees
Kidder
M.
take
can
arouse
COLUMBUS,
as
director of the Financial
Employ¬
WANTED
B
UFE
three
but
There
Box
the
Joins Bache Staff
a
Tuesday, Peter Hawley, executive
Street experience,
available for over-
house.
Board
bargaining
request for
Secretary
Fifteen
meeting
a
joint plans of action
we
and
Special
the
recognition
PREFERRED
this issue
was
seeking
such
a
>
hours of
Labor
Radiator
SITUATIONS
v
with
decide
to
recognize the
jurisdiction of the union over its
employees.
50 or more resignations
reported at
the Curb, but the union
says that
settlement.
Compromise
filed
should
tioned in the announcement of the
Reach
State
collective
union says that two of these have
changed their minds.
has
election among
the employees of the firm. There
will be no election if the firm
the chief spokesman
was
which
gether
for the employees of Drysdale &
Co., stock and bond brokers of
71 Broadway. In
of
at
UFE
York
sole
ac¬
favorable
the
petition
the matter to the Board of
on
in
Meanwhile, it has become known
that
New
recommend
Governors
union's
the
the
He asked for
representatives of
to "work out
UFE Files Petition
tion
(Continued from page 7)
Mayor'k Committee had announced
that Mr. Schram had agreed to a
& Co. matter
'
with
come
would
Drysdale & Co.
of
of
and Mr. Coleman
Bargaining Rights al
continuation
Truslow
the
WANTED
SITUATIONS
,
of them, too, have decided
back.
According to the
union, an officer of the union is
the one who sought the resigna¬
tions of Curb employees although
Congress.
to
them.
economic
,
leaders,
mber of gull.-.V;--,
ni
word
which
one
our
'
large
a
new
designate
;
•
labor
"liberals."
ible
to
well-meaning
treacherous
of
:
swarm
I
both
malevolent
and
unconscious
or
Mr.
labor
fused
demand
^
59
many
are
•
(2387)
will
be
paid June 10,
stockholders of record
at 3 P.
1947 to
HUGH
LONG
%
MHNMMI
May 15, 1947,
M.
ration, 16 Court St., Brooklyn
2, N. Y.
GEORGE L. BUBB
Treasurer
48
■Mitel
WALL
STREET, NEW YORK 5, N. Y.
r*
THE
Thursday, May 1, 1947
COMMERCIAL & FINANCIAL CHRONICLE
(2388)
60
public offering would run be¬
and 750,000 shares
for
tween 700,000
Reorganization Bill
Introduces New RR.
bankers
replace
one
the House
the removal of pending^ficient
railroad reorganizations from fur
permit
proceedings under the
ther
1948-52 for
Co.
Pro¬
retire¬
ment of bank loans, purchase of
certain properties and to in¬
crease working capital.
intro
would
Bank¬
mining income
income
grounds it failed to
14 on
profits taxes to
rates fixed on new
obligations and
to note
call by
Southern Pacific Co., for bids to
be submitted
by May 13, on a
on
More
new
lic
half
a
mortgage bonds series A, matur¬
ing in 28 years.
the
during
stage
offering
proviso that no bid for less than
98% of the principal amount of
week, with the largest, by far,
provides the
the issue, plus accrued interest,
involving the sale of $300,000,conditions under which a railroad
will be considered. The last time
organization fees.
Other provi¬
000 of State of Illinois Soldier
would be turned back to its se
sions of the bill were passed by
a
company fixed such a
pro¬
Bonus bonds.
curities holders and the processes
the President.
vision there were no bidders, it
That issue, of itself, except for
of improving the reorganized car
was recalled.
Congressman Reed's bill would
riers' financial structure.
There financing done by the U. S. Treas¬
require the courts to suspend
Competing groups
also must
are also provisions in the bill for
ury, was the largest single piece
bankruptcy
proceedings under
reorganization of companies in of business ever undertaken by a specify the interest rate as well as
Section 77B of Bankruptcy Act if
the price for the bonds which will
future as well as pending pro¬ single source, being half again as
carry a sinking fund and be call¬
a carrier's earnings in the seven
large as the $200,000,000 issue
The new
against excessive re¬
restrictions
-
floated
Bank Economist Says Business
Trends Still Same as After World War I
New York
from page
(Continued
weeks in the number
last three
of
-at
this
6)
after the last
time
elry and furs.
what is to happen
to Europe,
of American
funds into
the flow
the
potentially profitable investment
index of general business activity
abroad must be slower than it
has remained
steady. Likewise,
would otherwise be. With the ex¬
prices in general have been hold¬
ing -steadily
for three weeks. ception of this European situation,
and the fact that interest rates
Holding steadily, however, does
have been and are being kept at
not mean a continuation of pre¬
weeks now, too,
two
For
It
trends.
vious
only
preted
as
be inter¬
can
definite
the previous
very
a
slowing up because
trends had been consistently over
rather sharply
extended period
an
Ten days ago,
upward.
steel
observers
dex of
prices of
considered by some
scrap,
as
in busi¬
dropped rather severely,
something like $2 and more a ton.
As the economist reasons it all
out, prices were forced up right
after the war by the unwilling¬
of buyers
to wait until scarce
commodities had become plentiful
before entering the market. Buy¬
ers
day are very similar to what
after World War I and
It is not to
that has been
be inferred from
said above that
present
evidence
conclusive that a
all
the
is absolutely
depression is
really upon us. Unfortunately as
the economist insists, it can be
only in retrospect that the fact
of depression or the lack of it
can
be ascertained without the
of
a
doubt.
Up
to
the
not
today as
more goods are to be found upon
the shelves of the stores. The ex¬
istence of the large money supply,
the generous ex¬
the banks to
the Government to finance the
war, Is no evidence by itself, ei¬
ther, that it will be used, the
Vernon E. Kimball Is
tension of credit by
Co.
and so can not
positive fashion into the
calculations leading to predictions
of
York
for
has
of
to
Today
the market today it was
1,000,000 shares of the new
stock registered with the Securi¬
ties and
Exchange Commission
would be involved.
that
a
SAN
E., Kimball
associated
the
CALIF.
FRANCISCO,
Vernon
unsettled condition of
MISSOURI PACIFIC
N.
Y., N. H. & Hartford
and all other delisted
railroad
stocks
borrowing.
pension fund, and that the amount
ESTABLISHED
40
cash
$71,400,000
with
482 California
J.
has
Barth
to
Teletype N. Y. 1-1397
and
Excellent
Outlook i
Long-term
RALSTON STEEL CAR CO.
(freight
Up-to-date Circular
Now Available
Buyer
of
$40,000,000
manufacturers)
car
of new financ¬
sizable piece
LERNER & CO.
sinking
3%
placed direct with investors
Securities
Investment
in 10 years,
10 Post Office
Square, Boston 9, Mats.
Teletype Ba €9
Telephone Hubbard 1990
this week by Remington
first
The
direct
Rand Inc.
placement
of
Teletype—NY 1-971
HAnover 2-0050
For Banks
Trading Markets
& Brokers Only
"Old Shares"
Stat® St* Boston 9, Mass.
148
f-.ARL MARES & P.O. INC.
—
Francisco'
Exchanges. Mr.
Kimball
markets will have a
strong tendency to depress eco¬ was
formerly manager
of * the
nomic conditions in this country,
municipal department for Weeden
the economist thinks. This factor
& Co.
was not present in the situation
CAP.
N.
0485
:
:
Teletype
Y. Telephone HAnover
259
2-7914
FOREIGN SECURITIES
Co.,
Street, members of
the New York and San
•-
Ass'n
J
become
&
/
to take up the
Direct
was
.
HA. 2-8780
Exchange PL, N. Y. 5
the sale of new securities.
A
1919
Members N. Y. Security Dealers
cash and equivalent,
approach¬
ing maturity, it is assumed that
later in the year it will finance
its large program of improvement
and
equipment buying through
ing,
the employee's
M. S.Wien & Co.
Tel.
'
Company,
&
Common and Pfd.
of
that where
fund debentures due
already made
part of the issue
would be taken by
Sanders
Delisted R. R.'s
Should the road use its cash re¬
sources
question of just how much of
clear
Vance,
$139,400,000 in U. S. securities
at the end of February.
the
it
E.
111 Devonshire Street.
Pacific, it is noted, is
showing
With the duPont financing ex¬
The company had
maturity
1
plain,
new
strong in
provide needed additional capital
for expansion purposes.
a
it
made
course
The Consolidated Edison offer¬
on
July
possible, carriers should provide
for maturing debts without re¬
Union
Issues
of
CHICAGO, R. I. & PAC.
out that the In¬
terstate Commerce Commission
ing was the second step in its
refinancing program while the
duPont offering was designed to
pected
its
retire
de Nemours & Co.
Two
MASS. —Rollin
Morton has been added to the staff
It is pointed
Consolidated
New
Special to The Financial Chronicle
BOSTON,
Special to The Financial Chronicle
enter in
to come.
Joins Vance Sanders Staff
$100,000,000 of first 4% land grant
bonds, by using treasury funds.
first mortgage
bonds, and 750,000 shares of
new
no
par
value preferred
stock sold for the E. I. du Pont
$100,000,000
Now With J. Barth Go.
economist feels,
The
Edison
staff.
their
to
Old Stocks of
tion of the Union Pacific Railroad
were
to
trial issues, that of
Amsler
REORGANIZATION RAILS
resulting from
of things
upon
Associ¬
OHIO—Gill
well satisfied that it is the inten¬
undertake the
marketing of two large indus¬
called
or
impatience for goods
literally bid up prices to fan¬
tastic levels all around.
Buyers
are
bankers
whole
Union Pacific Maturity
to
help
present point, however, business
trends since the war would seem
to have followed paths practically
as
desperate for goods identical to those over which bus¬
they were, however, and iness traveled after World War I.
in their
thus
TOLEDO,
ates, Inc., Secor Hotel, have added
by the company
part on at least 45
Railroad bond circles are pretty
they
explain why business trends
tend strongly to be the same.
shadow
With Gill Associates
days printed notice.
type of issue,
Meanwhile
to
fairly reliable in¬
a
the general trend
ness,
ness
artificially low levels, the econo¬
believes
that
underlying
business conditions generally to¬
mist
were
the
was
tant factor.
Hardly more than a year or so
shoes manufactured : in after the Armistice, for instance,
this
country.
Employment has
Germany was already exporting a
been down for a month, too, not
great volume of goods. Until the
only in the textile industry but
"Big Four" can reach agreement
also in such luxury fields as jew¬
on
in
how¬
ever, that had limited appeal, that
is it was
pointed definitely at
banks, trusts and other instiutions,
where tax exemption is an impor¬
It
war.
of
pairs
by the State of Michigan
with
Special to The Financial Chronicle
able at any time
few weeks ago.
a
77
Inc.,
Co.,
Street, members of the
Exchange.
Mr.
Stock
Hinchcliffe in the past was
Russell Dean & Co.
bill also
ceedings.
1939-45, were suf¬
calendar years
&
Putnam
Arthur W.
contains the
The call for bids
securities reached the pub¬
connected with
now
Francisco
San
in
billion
L.
issue of $22,500,000 of
Terminal
first
projected
the market.
than
be* interesting
will
It
the outcome of the current
ing out, but rather reflects the un¬
usual
proportions
of
offerings
coming
F.
Boston
F.
MASS.—George
Hinchcliffe is
Southern Pacific
Federal in
reported for
and excess
come
provide proper control after reor¬
gether with a credit which would
ganization, and also failed to pro¬ be
given for any amounts de¬
vide against forfeiture of securi¬
ducted from
income reports to
ties and investments.
The Presi¬
cover wartime amortization in ex
dent also wanted lower interest
cess of 20% of cost.
Special to The Financial Chronicle
BOSTON,
Franklin
In point of volume the current
and in the event
income in any of the seven .years week will go down in the records
was
insufficient to meet fixed as one of the largest in under¬
by Sen. Burton K. Wheeler at the
charges for those periods,
the writing history. This, however, is
last
session
of
Congress was
court would take into account any not because of any sudden rush
vetoed by President Truman last
in the number of new issues com¬
Aug.
With F. L. Putnam & Co.,
&
ceeds here would go for
its total fixed
charges. The bill lays down meth
ods the court is to use in deter
ruptcy Act.
A measure of this
kind, commonly called the Wheel¬
er Bill, because of its sponsorship
large proportions in some
time, it put the company in funds
to retire $20,370,000 of outstand¬
ing debentures due 1960, and also
to pay off promissory notes, due
serially to October, 1953.
due
Morse
Fairbanks,
meet
to
$17,00,0000 of 20-year de¬
$2,500,000 of seri¬
debentures,
al
W. Reed (R.-Ill.) on April 28
of Representatives (H.R. 3237) which
Representative Chauncey
scheduled to bring
was
bentures plus
1
sional session.
duced a bill in
out
of
another group
Meanwhile
Illinois offers in House new measure to
vetoed by President Truman at end of last Congres¬
Representative Reed of
such
<U>FPT A T T<*T<?
New York 4. N. Y.
50 Broad Sireei
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