Full text of Commercial and Financial Chronicle : May 10, 1951, Vol. 173, No. 5010

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ESTABLISHED 1S39

UNIVERSITY
OF

MICHIQAlf

MAV

1119811
u

'■

mm*
1I0XAIY

Reg. U. 8. Pat. Office

Volume 173

Number 5010

New

York, N. Y., Thursday, May 10, 1951

Price 35 Cents

a

Copy

EDITORIAL

Rails and Utilities Feature

As

'

We See It

By IRVING S. OLDS*

last week
vs.

the

was

Kremlinism. "Communism all

in the view of the General.
cow

was

General
in

He

not

urges

interesting

such

as

on

Someone has said

edge, democracy
norance.

That

a

democracy is due, in

the sub¬

fate

has

overtaken

not

our

which

Chamber

the

of

Commerce of the State of New York

Of course, there are
many rumors and reports
of Titoism (as communism defiant of Moscow is
now

usually termed) in

—

thought,

the
as

wish

is

father

to

—

have

made

organizations

and

all

over

the

the world"

of the

reason

is

obvious

of

Were
need

it not

enormously increased by

government

creasing frequency
and
patriotic men

that

old-fashioned
for this

use

the

Kremlin

is

of it

Russian

as an in¬
imperialism.

Irving

.

fact, there would be little

for the

are

saying,

no

statements

within the

in

these

specialized knowledge
especially compelling one
days; for it is only by spreading the

business

critical

light of human

our own

is

guidance

about to

say.

solutions

to

that

we

hope

can

find

to

the fateful problems

on

Continued

on

*An address by Mr. Olds at the Annual Meeting of
of Commerce of the State of New York, New York City,

30

page

SECURITIES

NOW

porate securities

are

IN

aid

REGISTRATION—Underwriters,

afforded

and potential undertakings

a

in

of

and

page

added

building
sold

and

%

.

Henry A. Long

chases topped sales of portfolio securities by from 15 to
20%, 35 of the companies surveyed increased their re¬
of cash and equivalents during the
period. Only
managements drew down on their liquid assets to
complete buying programs for their portfolios. One of

serves

13

significantly

on such changes in their quarterly

us.

Government Bonds Sold

34

Thus, George Putnam, Chairman of the trustees of the
George Putnam Fund of Boston, states: "All holdings of

and

Continued

investors

in

on

page

18

cor¬

registered with the SEC
"Securities in Registration" Section, starting on page 42.

600 Branches

R. H. Johnson & Co.
INVESTMENT

duPont, Homsey & Co.
Boston

Stock Exchs.

31 MILK STREET, BOSTON 9, MASS.
Tele. BS 424

BROADWAY, NEW YORK 5, N. Y.

Tel. WOrth 2-0115

I
\

y

#

Municipal

Request

Tel. HAncock 6-8200

1

too

Tele. NY 1-315

64 Wall

Canada

Monthly Commercial Letter

SECURITIES

Street, New York 5
^

BOSTON

Troy

Albany

THE NATIONAL CITY BANK

PHILADELPHIA

Buffalo

OF NEW YORK

Harrisburg

Providence

Scranton

Wilkes-Barre

Williamsport

Washington, D. C.

Allentown

Bonds

,

across

upon request

120

.

now

Established 1927

Sc

y'?

State and

Bought—Sold—Quoted

Members New York

s

bal¬

on

Common Stock

on

to

and

auto

& IRON

Circular

the

reports.

the Chamber
May 3, 1951.

dealers

complete picture of the issues

our

wise

which beset

Communism

Continued

VALLEY MOULD

the

not

*

the interesting developments
during the quarter was the
switch in content of those liquid reserves held in other
assets than pure cash. Two of the funds' chief
executives

an

knowledge and by seeking

were

were

and

in

parts, avia¬
drug companies were also
popular during the threemonth period.
1
Despite the fact that over-all pur¬

tion

*

rubber

paper,

the

stocks

still

were

issues

but

Auto

ance.

comment

Divine

just

of

scope

the field of

misunderstanding about what

or are

and with in¬
find sincere
making public

we

which are wholly fallacious and basically untrue.
Our obligation to correct such statements when they
Olds

in

are

Let there be
we

S.

officials;

the

in

even

;.

fall

type of vast military preparations
being made in this country, and certainly
no
point in us trying to drive the European world
to large and
exceedingly burdensome military
expenditures in the years immediately ahead.

that

exist

fact

making vigorous and crafty
strument

understanding

danger inherent in "communism

liquor

chemical

*■.

merchandising group, al¬
Textile,

portfolios,

mis¬

'*■0$

the

previous quarterly
Buying also decreased by a

ascendant.

minds of many pf our most con¬
scientious members of Congress and

that

and

in

though here bulls

clear

vigorously
may be, it is

Confusion

gave sellers a wery
edge in the oil department
where purchases were almost 35%

third in the

hend

all.

switching

period.

many bosoms that Titoism will grow
as time
passes. However all this

them

and

less than

the

to

—

the

well be the hope cherished in

may

it

issues, and the steel stocks
Profit taking

also well bought.

were

slight

public
understanding of current issues.
But today, unfortunately, the is¬
sues which confront us—both global
and domestic
have multiplied so
rapidly and have become so complex
that no man can possibly compre¬

some

doubtless

and countless other

like

of the European
satellites of the Kremlin, and in China. In many
these

management favored the utility
the hesitant markets of the first
quarter of the year.
Non-ferrous metals, particularly
Aluminium, Ltd., and Reynolds Metals; the radio and
company
rail issues during

television

own

small measure, to the unceasing

no

contribution

ject.

of

that, in the absence of public knowl¬
the consensus of ig¬

becomes merely

such

1

Investment

and

answer

an

Cites illustration

measure.

plan works as gain to
individual, the public and the Government.

anywhere in the world today. His answer to such
a
question would have been interesting, although
as

public criticism of

■

-

Analysis reveals funds' first quarter buying exceededj' i
sales by approximately 15%. Purchases predominated
in aluminum, television, electrical
equipment, and steel
issues.
Finds transactions in oils mixed, as buildings
and chemicals were sold. Liquid reserves were
increased; j
some
managements shifting from long-term Governments

that it

expense or

of amortization effects and how the

many words whether communism, pure
and undefiled with Russian
imperialism, existed

from able individuals better informed

public

-

,.

revenues.
Points out purpose of
expand production under private enterprise, and*
businessmen carry on an education campaign to

overcome

asked

so

possibly not

enriches business at

1

law is to

threat, the

was

or

!

By HENRY ANSBACHER LONG

diminishes Federal tax

all

us

As to whether Mos¬

little evasive.

a

dizes

the world"

over

the heart and brain of that
was

Defending the "rapid amortization" section of 1950 Rev¬
enue Act, nation's
leading industrialist denies it subsi¬

old, old question of communism

and not the Kremlin is the real threat to

Trusts' Purchases

Chairman of Board, United States Steel Corporation

Among the thousand and one issues raised
during the interrogation of General MacArthur

Head Office:

Bond

Dept. Teletype: NY 1-708

Bond Department

^Canadian Bank
°f@ommexce
IS etc York
Seattle

Toronto

Agency: 20 Exchange PL

Portland, Ore. San Franciaco

THE CHASE

NATIONAL BANK
OF

THE

CITY OF NEW YORK

Los Angeles

We maintain active markets in
Dominion of Canada

CANADIAN

Underwriters and
Distributors of

Municipal

and

Prospectus from authorized dealers

or

Corporate Securities

VANCE, SANDERS & CO.

OTIS & CO.

Ill Devonshire Street

(Incorporated)
Established

BOSTON

f

New York

Angeles




COMMON

Canadian Superior Oil
Company of California

Analysis

CANADIAN DEPARTMENT

Goodbody

&

Co.

ESTABLISHED 1891

1899

New York

Cincinnati

Chicago.
Columbus

Denver
Toledo

Electric Co.

Ltd.

Doxmion Securities
Gkporatkmt
40 Exchange

Dallas
Buffalo

115 BROADWAY
NEW YORK

CHICAGO

Place, New York 5, N.Y.

105 W.ADAMS ST.
*

WHitehall 4-8161

request

Members New York Stock Exchange
other Principal Exchanges

111 Broadway,
WOrth 4-6000

Teletype NY 1-702-3

upon

IRA HAUPT&CO.
and

MEMBERS NEW YORK STOCK EXCH,

CLEVELAND

Chicago
Los

Development

Great Plains Development,

Portland General

BONDS & STOCKS

Internal Bonds
Placer

Boston

;

;'|f 0- ^ v'.'^

N. Y. 6

Teletype NY 1-2708

Telephone: Enterprise 1820

'

"I Z

The Commercial and Financial Chronicle
2

.

Thursday, May 10, 1951

.

.

(1938)

The Security

MARKETS IN

TRADING

Ohio Edison
&

Common

Eights

participate and give their reasons

HERBERT

New York Hanseatic

Mutual

1920

York 5

Teletype NY 1-583

'

February,

I

a year ago,

was

vited to write for this Forum
"the

I

security

best"

like

in¬
and
was

expressed in terms of management
than

rather

individ¬

any

stated:

of

"This

Forum

being

of

benefit

The economic

ious

frfe PONNELL & CO.
'zz.

Members
York

New

New-York

.

ture

Stoclc Exchange
Curb Exchange

^

BROADWAY, NEW YORK 5

120

would not ven¬

Tel. REctor 2-7815

-best'

a

stotk
could

meet

E.

Harris

ment. There is

none."

The

"

NEUMARK

J.

past

has

year

not

-,

Bassett Furniture Industries

Camp Manufacturing
Commonwealth Natural Gas

Life Insurance Co. of Va.

My business is concerned with
conservative, frugal persons whose
main interest is the protection of

and; assurance of
satisfactory "income rather than
uncertain speculative; risks. For

investor—

excellent

that

of

type

average

\ 7,

Lynchburg, Va.

^

TWX LY 77

19

Producing Oil Wells in
Ector

County, Texas

LEAD-ZINC-GOLD-TUNGSTEN
Trading market maintained

Analysis available cn request

developments;

all,

an

,

.

similarity
with 1917 and 1941, which made
it necessary for many to re-orient
thrown back to a

were

their investment program,

John R. Lewis, Inc.
1006 SECOND

AVENUE

protection, War changes
complexions. Some indus¬
and particularly certain cor¬

nomic
many

tries

ELiot 3040

?

,

with

difficulties, sud¬
themselves headed

peace

economy

denly

105

for eco¬

porations which were faced

SEATTLE
Teletype SE

found

salvation

toward

and

"prosper¬

We

suggest for

the 5%

Appreciation

Convertible

Preferred Stock of the

Seminole Oil
& Gas Company

*

Additional information
on

low

more

this

Great North¬

capital

only

(the

because

company)

this

invest¬
characteristics, yet sells so
possesses

to

relation

in

many

present

past,

prospective earning power as

and

justifiably attract a good fol¬
lowing among those seeking a

to

good return on a quality security,
as well as a good opportunity for

appreciation.
price of the
in the 1946-1950 period is »
at current
it has
little to reflect the high level

substantial
The

stock
so

certainly had

favor

generally,

not been in

leveVs

earnings of the past 10 years
to discount the recofd earnings

advanced

40%.

Steels, mining, aviation, chemicals,
industrial machinery and petrole¬
um
increased 30% to 38%; mer¬

provides
gon.

to Portland, Ore-

access

Of major importance to the

Great

Northern

Northern

about

Com.

Com.

Com.

Twin
and Chicago, and traffic in¬

Cities

at other

terchange
an

important

Members

New

York

Stock

Exchange

120 Broadway, New York 5
Telephone

Teletype

BArclay 7-7340

NY 1-2733

.




enough under

"normal"
impossible

its

are

lines

in

Minnesota, which carry

one-third

of

iron

the

ore

the Great Lakes to navigation and
a

costly strike in its

with
success. (A representative invest¬
ment company's shares increased

cost

the

and

prevented

33%.)

improvement

now—if you

-

of

To

want to invest

discuss all of

successful

the handicaps

investing would

go

showing
otherwise
these

road

the

■

&

7

Rights

&

'

Rights

Com.

&

Rights

Gersten & Fkenkel

points, but is
of dividend

..

Tel.

$10

some

the

which

handicaps

yards,
million

carrier

degree

have

own

of

from

earnings
it
would

enjoyed.
profits

Despite
equalled

/ a

•

York 7

Tel. NY

DIgby 9-1550

1-1932

increase

share,
j

which dividend

nearl

t

$2

a

was

share on
while the

equity
on
Great
interest amounted to

undistributed
Northern's

Giant Portland Cement

S1Q 7fi nnH

ParnPH

G«reat NortherI/s *tock|
an

New

Broadway

Burlington earned $19.76 and naiH
paid
a

1

"

•

150

peri0(j ahead. Last year, the

-n the

p>llHintftnn

$7

Security Dealers Assn.

Y.

N.

Members

source

income which is likely to

1

Continental Sulphur & Phosphate

Houdry Process
Atlantic City

7

Electric Rights

f;

Pennsylvania Railroad

additional $3 a share. Burling¬

outstand¬

ton has been one of the

Central Electric & Gas

7

ing performers Over the years and
its

operating

the

in

results

first

Central Public Utility

5y%s r7

of this year showed about
fain of any of the
carriers. Volume of traffic

Class I
was

up

American Marietta

sharply and net earnings
to $5 a share on Bur¬

Henry B. Warner & Co., Inc.

amounted

Members

Phila.-Balto.

Stock

Exchange

123 South Broad St., Phila. 9,
KIngsley 5-2700

Pa.

Bell System Teletype
PH 771
'

Phila. Telephone
.

New.York City Tel.: EOwling Green 9-4818
Direct

wire

Ames

to

Chicago

Emerlch

BUY
U.

S.

SAVINGS

BONDS

the Mesabi Range to docks on
Lake Superior during the Great
Lakes

highly

navigation

season.

mechanized,

movement

^

conditions. It is next to

1' *

*

* -

ATLANTIC CITY ELECTRIC

the

between

connection,

should

This

low

cost

at

peak

stay

electrical
equipment, produced in the northwest from levels so long as the steel industry
and building
in¬ the Mesabi Range to the system's maintains its present high operdocks on Lake Superior.
,J,„ ati.ng rate* While much has been
creased 20% to 26%; food, utilities
A combination of unfavorable
said about the rapid depletion of
and tobacco increased 3% to 13%.
ore
deposits at current
This gives some idea of the futil¬ factors in the first half of last Mesabi
ity of trying to cope with current year including unusually severe high rate of output, proven re.
,
. \
,
and foreseeable conditions. It is weather, floods, late opening of
difficult

& HALL

*

Rights

FAIRCHILD CAMERA

N. Q. B.

automobiles

NIELSEN, 'GORDON

&

OHIO EDISON CO.

chandise,

request.

*

LONG ISLAND LGT.

Cnicago,

of

in any ap¬
praisal of Great Northern. Tne
Burlington not only provides a

mean

th"

done
of

capital

average

ownership with

Pacific

lington's common compared with
Contrarily, other industries
anticipated for this year.
and corporations which had not
$2.yl in the first quarter of 1950.
The
strongest
of the north¬ Indications are that Burlington
-fared well during
the war and
western
trunk
lines/ the Great will earn around
$25 a share this
were beginning to
see "the light
Northern operates over 5,300 miles
of day," were again stricken with
year and will probably declare a
of road, its main line running be¬
substantial
extra
which
would
difficulties.
77 ;
tween
St.
Paul, Minnesota and further
swell
Great
Northern's
Railroad
equipment,
for in¬
Seattle, Washington. Through joint
earnings.
stance, is an industry which was
ownership . with
the
Northern
facing difficulty when the war
Lumbering, agriculture, mining
Pacific of the Chicago, Burlington
broke; but by the end of the year,
and industry all make important
& Quincy, the Great Northern ob¬
stocks of railroad equipment man¬
contributions to Great Northern's
tains access to Chicago and has a
ufacturing
corporations
showed
major interest in a highly profit- traffic, but in relation to revenues,
the greatest aggregate market ad¬
able mid-western system. Similar- *ew bulk traffic, movements are as
vance—45% as compared with a
as Great Northern's
19% increase for the Dow-Jones ly, joint ownership and operation profitable
Industrial
average.
Railroads, of the Spokane, Portland & Seattle heavy iron ore movement from
which

Approximate Price 8Y4

earnings,

rail

Preferred

ment

9, Mass.

Teletype BS 259

:

Telephone WOrth 4-5000

Y.

N.

*

:

portant consideration

time. I have chosen

the stock

.

Earning

1951.

Burlington & Quincy is a major
vjhich must be given im¬

its 1949 low, and
of the wide cyclical fluc¬

Of

Tel. CA. 7-0425

asset

Arthur J. Neumark

caution must be exercised at

Stock

outlook

traffic

profits, in

Northern

Dow-Jones rail average now more

ern

over-all

The road's joint

still

in

early open¬

prospects for this year are be¬
tween $11 -and $12 per share.

than 100% above
because

the

record

affptds. How¬
ever, with the

or

ity?"

Income and

the

dends which
the group

148 State St., Boston

north¬

the

for

operations

territory served by this
road indicates that it may enjoy

prepared¬

and, tuations

ability to weigh all
factors impersonally and unemo¬
tionally.
y--. v
777.
Let us look at just one facet of
the investor's problem. The nation
was
on
its way toward a more
"normal" status in 1950 when the
Korean War broke. Oyer night we
above

Development,

economic and

political,

international

Limited

vig¬

supervision and acces¬
sible and dependable sources of in¬
formation, it requires reasonably
accurate interpretations of kalei¬
ilance and

doscopic

Placer

than

last year was
jn the first

the

m

investor, for all values in rela¬
that—the task of maintaining a. tion to earn¬
sound and successful" investment
ings and divi¬
is more difficult
before. Besides constant

to? $6/9,000

reduced

and

dur¬

and

the first quarter of

request

on

>

Lakes will result
in
a
marked increase in April
traffic as compared with last year;

for this

ness

Analysis

ing of the Great

average

any

ever

LD 39

of

approximate¬

western carriers. The

1949)

industry

quarter of this year

18%
over
the comparable
period of 1950 and the operating
deficit of $5 million incurred in

able

ing the period

savings

in

AEROVOX CORP.

Burlington & Quincy.

quarter
of this year.
This is
normally a period of non-profit-*

favorable out¬

program

STRADER,TAYLOR & CO., Inc.

a

because of the

or

Dan River Mills

(in

issue

this publica¬

look

branch offices

our

J

ly

for

tion

their

of the alore-

share. All

a

gross revenues were

which

changed;that opinion. In fact, it
considerably fortified.

American Furniture

$8.09

In the first

Railway

has been

Trading Interest In

Direct wires to

10 years

Dec.-31, 1949 amounted to

ended

in Chicago,

City

railroad

a

selected

I

•

NY M557

Birmingham, Ala.
Mobile, Ala.

figures are exclusive
of the road's undistributed equity

sister railroad of Northern

way a

Pacific

require¬

every

Northern

favoring
Herbert

the

earnings in

annual

Excha^ae

York 4, N. Y.

New Orleans, La. -

ings were the lowest realized by
the
carrier since 1940. Average

of the stocks I
best at this time, I am again

like

that

York Curb

HAnover 2-0700

-In choosing one

;

York Stock Exchange

New

mentioned

New York

Great

Members New

$9.11 a share, compared with $6.05
in the preceding year. 1949 earn¬

Partner, H. Hentz & Co.,

I

Steiner, Rouse & Co!
Members

security of your¬

ied investment

;

Co., N. Y. City (Page 2)

25 Broad St., New

your

ARTHUR

many.and var¬
objectives,

Neumark,

&

in¬

naturally have

Partner, H. Hentz

J.

it.

with

Bought—Sold—Quoted
Arthur

Railway

Northern

Great

dependents is ser¬
business.-Don't take chances

who

vestors

Since 1917

Dayton, Ohio (Page 2)

program.

your

Harris,

nor

discussed.)

a

self and

indirectly,
at
least,- for the

Rights & Scrip

Mutual Funds—Herbert E.

intended to be,

management—not merely secur¬
ities, as such. This does not mean
you should put all into investment
companies but that such invest¬
ments should be the foundation

I

stock.

ual

Specialists in

Louisiana Securities

clue to those who may not
be to aware of the threat to their
economic
welfare.
Buy
(good)
gives

Funds '

Selections

Their

beyond the limitation permissible
here.
But what I have written

HAEEIS

Dayton, Ohio

Corporation
BArclay 7-5660

E.

Alabama &

and

Participants

particular security.

a

they to be regarded, as an offer to sell the securities

are

120 Broadway, New

for favoring

(The articles contained in this forum are not

& Eights

Established

week, a different group of expertsand advisory field from all sections of the country

in the investment

Week's

This
Forum

A continuous forum in which, each

National City Bank
Stock

I like Best

AVER-THE-COUNTER

INDUSTRIAL STOCK INDEX
12-Year Performance* of

„

^

35 Industrial Stocks

seryes are equivalent to 15 years
Production and huge deposits of
lower
which

grade
new

taconite

enriching

being developed

ore,

processes are

sueeest that this

8 aevei°Pea> suggest tnat this
imP°rtant source of traffic for the
Continued

on page

I
BOOKLET

ON

REQUEST

37

f

■_

for

t

National Quotation Bureau
,

.

•

Incorporated

46 Front Street

~

.

New York 4fN.Y.

Volume 173

Number 5010

.

.

.

The Commercial and Financial Chronicle

(1939)

In Search of Freedom

INDEX

By ADMIRAL BEN MOREELL*

Article* and New*

Chairman and
Jones & Laughlin

President,

Steel Corporation

Tax Education of Mr.
In

and

state

local

governing
"free¬

lished

founding
form

a

ment

studies

my

in

arose

designed

powers

there
my

divided

What to

to

minority

The

one;

—

that

whether

there is

we

"might

person

formalized

zest

for

free¬

makes

Thus

we

lieve in liber¬

from

ation from

tb restrictions and

straints

as

desirable
of

Ben

I

.

our

evi¬

we

So,

it

will

not

vote against freedom and

we

to

of

for governmental restraints at al¬

one

most every

t;

of

have

choice.

.

accepted

Now,

-

before

conclusion

to

For

example; I want a
straint against the freedom of
person to do

re¬

any

bodily harm to

any

other person, or to cheat
him, or
to defame him, or to use force

against him in any manner. I want
adequate
laws
against
fraud,
coercion and

one's

actions.

own

monopoly. But I be¬

The

*

•

of

is

of

individual

of

that

it

that

does

is

restraint.
not

But

injure

it

is

one

person

any

Bank

in

much

about

American

These
of

what

opposes

of

government."

designed to protect all

equally against

us

external
powers

aggression.

were

Federal

in

we,

"the police and

as

powers

are

internal
Those

State

or

basic

provided for in

and

just about

—

the

street"

this

"we

as

the

our

Constitutions

as

many

groups.,

what

of

have

us

those

as

If you wish

ease

to

made

in

almost

as

up

among

us..<'•
*An address by Admiral Moreell before
the Third General Session of the 39th

Meeting

of

the

Commerce cf the United

Chamber

of

States, Washing¬

—;

Wilfred

"someone

answers

which

to

Public

Maty_______

Securities

we

Securities

Salesman's

Securities

Now

""Then

they

the weighty problems
face.
I do not have a
or

eternal truth,

Continued

on

page

29

in

Corner

28

Security I Like Best

______

Baker-Raulang

2

_______

Tomorrow's

Markets

Washington

and

-See

(Walter Whyte

HAnover 2-4300

Members New

on

I'm

Sure,"

cover page
on

page

"

Hubbard

Teletype—NY
-

Chicago

-




Glens Falls

2-8200

1-5
-

Schenectady

-

Worcester

Purchases," start¬
18; also "It's Mutual

and continuing on page
4.

Twice

Weekly

COMMERCIAL

B.

Park

Hoving Corp.

1

Drapers'

DANA

CHRONICLE

COMPANY,

2-9570

to

WILLIAM

DANA
D.

Gardens, London,
Edwards & Smith.

E.

C.,

Publishers

Reentered

second-class

Van

1879.

Works

Manager

Subscriptions in
United
States, U.
Possessions, Territories and Members

of

Pan-American

Union,

In

Dominion

Canada,

of

Countries,

Thursday, May 10, 1951

$45.00

per

$48.00

$52.00 per

year;

per

8.

state

the rate of exchange,

Other

Offices:

Chicago 3,

111.

135 South La Salle St.,
(Telephone: STate 2-0613);

—

Sold

—

Quoted

Other Publications

Quotation Record — Monthly,
$30.00 per year. (Foreign postage extra.)

etc.).

Bought

year.

year.

Every Thursday (general news and ad¬
vertising issue) and every Monday (com¬
plete statistical issue — market quotation
records, corporation news, bank clearings,
city news,

Whitin Machine

ary 25,
1942, at the post office at New
York, N. Y., under the Act of March 8,

Other

and

Camp Sea Food

matter Febru¬

Subscription Rates

President

Business

as

Stromberg-Carlson

Eng¬

Copyright 1951 by William B. Dana
Company

9576

SEIBERT,

RIGGS,

c/o

and

Place, New York 7, N. Y.

REctor

Street, Boston 8

Di-Noc

Trusts'

30

York Curb Exchange

50 Congress

Collins Radio

38
--48

"Rails and Utilities Feature

ing

WILLIAM

Exchange

Says)

You

HERBERT D. SEIBERT, Editor & Publisher

York Stock

5

"

preferred stocks

Albany

Air Products

42

1

State of Trade and Industry..

25

.

25

—___—

Registration..—

The

WILLIAM

New

Exchange PI., N. Y. £

27

The

offerings of

25 Broad Street, New York 4

40

45

1

Now—Guess Who?

and

The

Spencer Trask & Co.

Radioactive Products

Teletype NY 1-1825 & NY 1-1826

—i~:

—

Reg. U. S. Patent Office

•

28

i

Offerings_'__l___________

Securities..

"
«

Singer, Bean
;&MACKIE, Inc.

5
47

Governments

Security

FINANCIAL

■

26

Report_____.

on

Utility

Railroad

or¬

else."

pipeline to God,

-

Engineering

33

_

land,

„

40

HA-2-0270

Published

interested in

are

Members

and

*

-

Prospective

the

My second point is that I am
quite sure that I do not know the

D, C., May 2, 1951.

We

12

emerge from the Annual Conven¬

ulous

ton,

Thermal Research

with

any

ganization. of businessmen

Bargeron
'___

Observations—A.

'

of

Tire & Rubber

25

Activity--;.

;

enterprisers"
can
justify our tastes for social¬
ism, you have only to examine the
"resolutions"

Mfg. Co.

Cooper

33

NSTA Notes

other

see

Bates

~

8

News About Banks and Bankers.—-----

"free

we

Dev. Res. Corp.

i
-

Recommendations-_*______^

,

false premise. .1 believe

errors

Associated

24

47

;

Reporter's

that

Direct Wires

48

—

Reporter

same

6

1-3370

l_v_ 23

•

_________________

Funds

Our

a

Teletype NY

\

Stocks__________^__

Business

Our

on

BO 9-5133

common

government has grown

Annual

of

believe

I

Broadway, New York

Cover

Einzig—"Britain's Raw Materials Crisis"___

self-righteous position,

freedom.

Incorporated

61

36

Guess?

our

a

J. F. Reilly & Co.

33

Bookshelf__il____,:^________24____________

no

they had developed
tion!
law of Eng¬
Let us admit,
then, that it is we
land. But over the years a differ¬
who need to learn and not a neb¬
ent concept of the functions of
under

You

danger, to
is

Stock
23

From Washington Ahead of the News—Carlisle

knew >. as

subject

+.

Mises_______ 23

von

York

Regular Feature*'

traditional
—

businessmen," there would be

built

right-thinking

any

general, refer to
defense

the

New

9

Remington Arms

16

Price-Wage Controls

Dealer-Broker Investment
Did

that

I doubt that

,

others

of

/

r

22

___________

(Editorial

Insurance

Mutual

"man

them.

?

___:

.

'

-You

group.

'

Minute Maid

26

Coming Events in the Investment FieId_^:_:__,_______L_^___

than

That type of law is aimed
solely
at the person who wants to restrict

upon

and

other

only

*

Canadian Securities

4

probably have heard it said that

destroy the freedom of others
by imposing his will and his ideas

It

Indications

occupational

«■

'

^

not

who, desires to live in peace and
deal fairly with his fellow; men.

or

See

industrial workers,
doctors, teachers, ministers or any

if

-■

•

Municipal Borrowing_____________l_________ 35

on

Business Man's

.

have farmers,

true

is

*

Key to Foreign Bond Defaults—Study by Dr. Ilse Mintz 24

1

America have greater

freedom

'

■.Philadelphia and Los Angeles

you, my fellow businessmen.
For
I see little evidence that we busi¬

in

Haile Mines

16

_

FIC Banks Place Debentures__„___

;

< I am talking spe¬
cifically about myself—and about

nessmen

It

Economy—A. W. Zelomek 14

*

(Boxed)

Farm Leader Opposes

with us today.

faith

action.

Hope

* V

•

who

American

Industries

Government—Sen. Harry F, Byrd 14

Permissive Incorporation
Exchange Firms

The

.

else"

Great

Housing—Thomas- S. Holden__

'• ''.4

'■

Wants Curb

Now, before' we consider spe¬
cific examples of this rejection of
freedom, I would like to make two
points.
First, I am not talking

lieve that type of law is designed
and

for New

Case of Businessmen

about "someone

Giant Portland Cement

13

Closing Tax "Loopholes"—Views of Ludwig

wonder what the future holds

to protect the individual's freedom

choice

Us

As We
;

10

11

Discuss

unbridled

license, I want to say that I, too,
favor certain restrictions on free¬
dom.

for

the

-

Johnston-^

responsibility

jump

you

that I favor

1'

Macx^rtliur, Not Communism—Roger W. Babson
.

Let

We.

the

morality;

group

'

4

High-Grade Bonds and Preferreds

Inventory Picture and the Business Outlook

a
nation wherein the
people
lose their faith in individual free¬
dom and in personal

Logical Restraints

.

____9

'■/>''

Powell

Hump of Production in' Two Years!

4

for

opportunity!

*

■

■.

S.

WHitehall 4-6551

V

Bing__

A.

We Want

be

determining right and wrong by:
voting on it—and then accepting'
the majority decision. It makes

work!

i

bid for—and buy!

,

against the results of

us

appear

afraid

are.

•

If

.some

WALL STREET, NEW YORK

8

■

irresponsibility.'

freedom

own

theory

cannot trust freedom—because

for

The Outlook

drifting
responsibility

and

Bripbergi„>__

•

.

demand that government

now

"protect"

Moreell

dence that many of us believe that
we

freedom

L_

Inflation?—Leland Rex

The World Crisis and the American

-

way

life

found

We

a

to

appear

Herbert R,.

We Don't Have Economy in

that

legalizing of*
morally proper.

"

re¬

right";

mere

action makes it

an

really be¬

the

—Eric

majority decrees other-?

wise; that the

dom; whether
we

Over

are

we

scare

from

Obsolete Securities Dept.
09

thesis

inviolable right for any,
if
the
organized
and

have

our

we

dictatorial

things

don't

shrink

j

Inflation, Spending and Taxes—Sen. Paul H,
Douglas_______ 12

no

Am ertcans

lost

the

Outlook

Ralph A.

•j_„

But, to-<

to

of

v

day, there is evidence that

turning

and
■,.

the

protect

traders

they

Telephone:

Restraints Upon Credit—Oliver

.

but

the

6

Federal Debt—Vehicle

govern¬

merged

into

-"

-

Street

easily,

4

,

H. Slichter___

Robinson

governmental

doubts, which
fears. I began
to
wonder

Transportation—Ralph S. Damon___j__^

Expect From the Defense Economy

—Sumner

person — against the demands of!
the largest possible
majority—all!
other persons combined.

mind certain

*.4

___

"The Things"
Wall

of

estab-.

limited

smallest possible

with

3

former

fathers

of

from the power and control of
another."
In
the
course
of
or

Cover

Fringe Benefits Aid
Inflation—Harvey Dann

The

defines

Jones—Irving S. 01ds_^_"v

Sure—Ira U. Cobleigh

The Outlook for Air

powers.

"liberation from restraint

as

their

.—Cover

___

Freedom—Admiral, Ben Moreell______

Mutual I'm

The

dictionary

dom^

of

governments

Search of

It's

profits and other anti-freedom activities will not
stop inflation; and suggests: (1) Ending of our headlong
rush toward more collectivism; (2)
orderly demobilization of >
many existing powers of centralized government, and (3) res¬
to

AND COMPANY

—Henry Ansbacher Long

of prices and

toration

llCHTMl?

B. S.

Page

Rails and Utilities Feature Trusts'
Purchases

Maintaining businessmen seemingly have no more faith in
freedom than other community groups, Admiral Moreell attacks
both Socialist and Communist principles* Maintains control

My

J

Bank

and

Note—On

account

of

the

fluctuations

remittances for

in

for¬

eign subscriptions and advertisements must
be made in New York funds.

THEODORE YOUNG & CO.
40

Exchange Place, New York 5, N.Y.

WHitehall 4-2250

Teletype NY 1-3236

Financial Chronicle

The Commercial and
4

.

Thursday, May 10, 1951

.

.

(1940)

desirabil¬
stockholding in
supply, through
the years, the need for equity cap¬
ital, and (2) to prevent the arrival
recognize the basic

we

Sure

It's Mutual I'm
By IRA U.

COBLEIGH

Author

of

of

and Keep It"

Killing in Wall Street

"How to Make a

some

ment trust,

—freedom from dollar

scheme

it

while,

Principal value grew from

(a)

on

Air

$10,000 to $20,774;

the

in

place

real

a

beckon

By RALPH S. DAMON*

President, Trans-World Airlines

our

Commenting

persuasively to

Those disgruntled with the
of their own selections of
individual securities in the past;
(a)

have never had
in stock

(b) Those who

experience

purchase;
(b) Dividends paid out were
(c) Professional people;
$5,672;
(d)
Trustees
("prudent-man"
bottle of bour¬
(c) Profits from security sales
type);
bon.
But if, were
$3,156.
"
/:
(e) Pension, Welfare and Union
you had a dol¬
The second $10,000 was placed
Funds;
,
•
lar in 1941 and
in
Fund
Y, a "balanced" fund
(f) Systematic savers.
you still have |
(with securities spread among
Now it is true that mutual funds
it, today, it j
bonds, preferreds and commons).
isn't
a
dollar j
do not offer the speculative zing
This is regarded as a more con¬
—AVs 50 cents!
that the purchase of individual
servative fund but still produced
This homely
stocks can bring you. If rails are
the following results by.-Jan. 2,
com parison
roaring
on
the
Exchange and
it, it is still a

will

serve

describe

to'

1951:

value grew from

Principal

(a)

to

the

Over

been

lot

my

Usually

primar-t 4.3% on
interested Hardly enough. These figures are
in thq^glamor, pleasant reading, however, when
ad v enture,. compared with the combined def¬
glories and icit of $10 million in 1946, and
romance
of $26 million in 1947, or even the
flying, and a small profit of less than a million
"
—
*
not iceable in 1948.
ily

it closes
you
the rav¬
up two points,. If the oils are on
Ira U. Cobleigb
out were the wing and you own Amerada
ages
of the
up five on the day, you like that
epidemic economic disease of our $4,125;
(c) Capital gains paid out were too. Well, mutuals won't perform
time—dollar depreciation. And it
introduce

program

our

>■.

for $1,660.

Neither

that.

like

they

are

■

chill

the fading

so

favoring these mutual
figures simply il¬

a mutual fund anyway?
lustrate, not theoretically but in
primarily it's a cooperative actual practice, a principle which
society pooling the funds of many
I summarize thus: In an expand¬
and employing trained investment
ing economy you need securities
managers to select, to supervise
that can expand!
continuously, and to spread in¬
Bear in mind, the above results

of years ago.

score

a

These

funds.

What is

illustrate

that you

sure

forgot to mention a while back
their
variety. Attention was
called
to
the
diversified stock

any

miraculous, but it has not always
been uniform. Only the oiher day

neces¬

for me to

statistics

I

point.

am

interested in the figures on

is

balance sheets than in

latest

the

interest

with

read

I

monthly release from the Bureau

to

Economics ^nd Sta-,

of Transport

quite

tistics of the Interstate Commerce

gentlemen are more

I

beginnings, the air
growth indus-.

been a

The growth has been almost -

try.

be-

their

have

lines

fall back upon

Ralph S. Damon

•

about mutuals

Another feature

over

it

e v e r
c a m e

sary

From

when-

them

compare

advantage

buck.

de¬

has

scended

the above with likely to give the headaches some
today, which is to analyze briefly
investment, during the decade, in of
us
remember
when
radio
the
contribution
of the mutual
good bonds, say at 3%, you cannot dropped from the four hundreds,
fund toward the defense of in¬
fail to note a significant dollar
to the price of a heterodyne tube,
vestor purchasing power against
If you

net

represented a return of
net assets of $784 million.

income

been

Pacific,

you're riding Southern
you feel chipper when

gross,

This

million^

$33.8

of

had

almost $812
income
after

of

net

and

million
taxes

my

1950

in

revenues

have

listeners

airlines

international

a great
subjects related
to
aviation.

address

cn

.

,

has itics.

it

industry,

to

groups

many

taxes, show-cause orders and pol¬
The combined domestic and

of years spent

course

aviation

the

in

$10,000 to $13,649; <
(b) Dividends paid

will

will for first time

first class passenger traffic than railroads. Cites
problems of air transportation in postwar period, but contends
in past three years the Big Four lines in the industry have
become self-sufficient. Holds air transportation of long-haul
mail cheaper than by rail.

still have

you

growth of air transportation, aviation

recent

transport more

results

or

on

predicts in 1951 trunk airlines

executive

following:

training

Transportation

shores,

our

of things.

Mutuals

stocks
If you had a brick in 1941, and
and
today with assets of $100,you have it today, it's still a brick!
000,000), here's how you would
If you had a bottle of bourbon in
have wound up as of Jan. 2, 1951:
1941, and by the expedient of not
mean

found

has

depreciation.

posed primarily of common

drinking

Socialism

State

by a wider sharing in the owner¬
ship and profits of our enterprises,
then we must say the mutual fund

casual reflections on the "open-end" invest¬
and its position in defense of the "fifth" freedom

Containing

The Outlook for

ity of
broader
America, (l)1to

Commission

airline

—

a

publication

in¬

primarily for railroad peo¬
ple.
(I hope this does not come
of our advertising, and, therefore, to the attention of the "un-airlines
fund and the balanced fund but I shall make no apology for quot¬ activities" committee
of the
there
are
lots of others. Some
ing statistics freely.
House.)
This
publication
was
confine
portfolio
entirely
to
vestment risks (as well as oppor¬
Fortunately, the airline statis¬ largely devoted to a comparison
were merely historical—not guar¬
bonds;
some
preferred stocks; tics which I will discuss today are of first-class travel on railroads
tunities for gain) over a portfolio
anteed.
If mutual funds are ba¬
some confine'holdings to a single
consisting of anywhere from 30 to
a
good deal more cheerful than with that on the domestic trunk
sically aggregations of common
industry. There are special trusts
over 600 different issues.
In prac¬
airlines.
It pointed out that in
any I could have presented two
stock, then they will fluctuate up for bank
stock, oil, rail, chemical,
airlines
carried
only
tice, the great percentage of se¬ and down like a boat on the mar¬
or three years ago.
You will re¬ 1938 the
industrial, gas, electric utility, and
curities selected have been com¬
call that just after the war the 6.1% of the total "first class" pas¬
ket sea.
Thus, although mutual
television shares. There are trusts
mon stocks and the spreading of
airlines * were
in
the
financial senger miles, and that even as
funds provide for liquidation
of for
capital gain and trusts for in¬ doldrums—to put it mildly. Pub¬ late as 1945 they accounted for
the invested dollar over so broad
trust shares at net asset values,
come and some funds bearing the
a field seems to offer some mathe—
lic bodies were conducting inves¬ only 11.1% of the total. This lat¬
on any given day, you never know
names
of specific states. No one
matical insurance against destruc-'
tigations to determine the causes ter percentage, of course, would
whether that value will be lower
can say he hasn't a
tive loss of capital, or elimination
choice here! and prescribe the cures for this have been greater, except for the
or
higher,' on the morrow.
For
Some
question is occasionally
of. dividend income. To snatch a
of
airline
equipment
malady. As usual, the investiga¬ diversion
the
possible rewards of higher
raised over the fact that some¬
phrase from a renowned legal
tions were productive of little ac¬ and personnel to the military dur¬
yields and of capital gains (and
opinion by one Judge Putnam, the the risk of lower ones and loss) where between 6% and 9% is us¬ tion: but—again as usual—the pa¬ ing the war.
ually charged as a sales commis¬
purchaser who regards "the prob¬
From 1945 to 1950, the trend of
tient, chiefly through the vigor of
you must accept, if the market so
sion or "load" at the time an in¬
able income as well as the prob¬
his
constitution,
by ; strenuous first-class rail travel was gen¬
decrees, a lower valuation of your
vestor purchases his trust shares.
able safety of capital to be in- ;
exercise
and a
slendering diet, erally downward, and that of air¬
holdings. This inherent possibility
To those who quibble over this
vested" will find in the mutual
seems to have recovered.
lines upward, so that in 1950 the
of a decline in principal value is
fund
in
a
single security — a
ratio, I say first, that the mutual
At least three groups of people airlines accounted for 45.67% of
perhaps the most obvious reason
fund is a sound addition to our
unique device devoted to those
the
domestic
first-class
travel
will now feel that they bore the
why mutual fund shares should
set of financial tools. And it is a
ends.
not be construed as a substitute
brunt of the suffering. Each will market;
46% of the combined
part of our American tradition
; You have to get back to funda¬ for a savings bank account.
take full credit for the recovery total.

Well

tended

the glamor

—

Bonds

mentals.
common

have

Today the best bonds yield
about 2.85%, Common stocks carry
been.

no

that

than

safer

are

stocks. They always

warranty of paying you back a
today, tomor¬

stated principal sum

If

mental

your

however,

veer

our

characteristics, willing

toward those of a

citizens have always been

to

troducing

a

accord salesmen, in¬
new and desired prod¬

philosopher or an economist, it's
uct, a rewarding commission. This
possible to work up a real bub- has been true whether the product
b 1 i n g
enthusiasm for mutual
was
a
sewing machine, a motor
shares.
Their record is pretty
car,
a
vacuum-cleaner, a Fuller
good. They are no Johnny-comebrush or an insurance policy. And
lately; fact is some 14 mutual
it's easy to show that the commis¬
funds were started way back be¬
sion percentages of mutual funds
fore
the financial
pall of 1932
_

row

or

for

dividends equal to
the money you lay

pay

5y2 to 6%
out

but right now good

ever,

commons

on

Stocks

them.

essen¬

are

tially flexible; bonds, fixed or re¬ dimmed our financial ardor. These
stricted in their values.
But for 14 both survived and prospered.
some time stocks have been
ris¬
Perhaps the best logical argu¬
ing, and dividends, rising; while ment for mutuals is found in their
bond

yields have declined.

Today there are,
Just to explain let's set down all told, about 130 mutual funds
the investment results of a $10,000 with assets of around $2,700,000,investment in each of

recorded growth.

two repre¬

nearly a million share¬
sentative funds over a ten-year-* holders.
They're growing by na¬
period. If on Jan. 1, 1941, you had tion-wide sales to the tune of
lodged $10,000 in Fund X (com¬ about $400,000,000 a year. And if
000

and

of the

same

the above narked items.
Moreover, the mutuaF entry fee
of

any

is

A

NEW

ISSUE

for

a,

AUDIO

potential

in the

the

investor

earnings of

a

a

participation

well-managed

GROWTH COMPANY
manufacturing products in great demand
MAGNETIC

RECORDING

TAPE

Current Price $3
To he

Yield 6%

of the remarkable history of
its favorable balance sheet and earnings statement

sent you on

this company,

-

AUDIODISCS

AND

request—a copy

PETER MORGAN & CO.

wish to liquidate at a later
date there is usually no charge.
Inflation is no easy foe,
and
dozens
of
defense
mechanisms
have been offered to do it combat.




•

Tel.: DIgby 9-3430

•

Tele.: NY 1-2078

send

Airline Travel Grows

heavy bill for priority pay¬

These

ment.

three are: the gov¬

the investors, and the
I hope that each, in
making its demands, will bear in
mind the paramount importance
ernment,

employees.

of

of

preserving the financial health
the industry in
the interest

of all.

'

since

stocks

done a

And

amateurs

purchase

tection against dollar
then

expert

miles for the first quarter of
1951 were 56% in excess of the

ger

same

quarter in

1950, and April
in¬

is estimated at about the same

1950, 56%. I
overall figures
for the railroads, but I understand
that the trend continues generally
crease

Club

May 3,

the

for TWA
and I hope 1951
despite increased

static

and

address

Bond

City,

passen-'

example, TWA's domestic

over

April

by
of

Mr.
New

Damon be¬
York, New

I

downward.

or

do not

think it is

rash, there¬

fore, to predict that 1951 will be
the year

in which the trunk air¬

lines will for the first time trans-

Continued

1951.

on

page

INTERNATIONAL ARBITRAGE

selection

offered

has

better
an

airline travel
upward. For^

recent

in

have,

stock

hit-or-miss

York

the

1951,

markedly

pretty fair job in

random

if

*From

war,

Airlines

best year for

industry

the

will,be

fore

the

was

airline

in

far

continues

have not seen any

1950 Best Year for

1950

So

American selected

For the average

some

and

by
pro¬

Foreign Exchange

—

Foreign Securities

Foreign Coupons and

Scrip

depreciation,

selection

by

highly

Serving banks, brokers and security

dealers

trained investment fund managers
should

logically provide

a

superior

performance and a wider horizon.
So

if

anon,

by chance you are greeted

by

a

diversified trust rep¬

Albert de Jong &
37 WALL STREET

resentative, saying he's pleased to
meet

in

31 Nassau St., N. Y. 5

trip; if

round

coping with this ogre.

DEVICES, INC.

affords

a

you

years,

The Common Stock of

in

lower than on the

are

common

NOT

investment
number of dollars in

-r-and each will now want to

all

you,

you

are

conscience,

Mutual I'm sure!"

quite entitled,
to

reply,

"It's

Telephone HAnover 2-5590

NEW YORK

Co.

5, N. Y.

Teletype NY 1-1401

41

Volume 173

Number 5010

.

.

The Commercial and Financial Chronicle

.

£

(1941)

e

Cincinnati
Steel

The

Men Announce

Carloadings

State of Trade

Retail

Trade

Industry

Price

Auto

Ohio—The
an¬
spring party of the Municipal
Bond Dealers Group of Cincinnati
will be held May 24 and 25.
Regis¬

Production

Index

Business Failures

tration

fee for those
attending is
$25. Planned for the occasion are

cocktails

Country

continued to hold close to the highest level reached since the close

2:00

ended

April

14, new claims for unemployment
17%, while continued claims rose 5%
claims continuing well below the level of a year
ago.

with total

Steel production

almost

rose

mobile production dipped

9% higher than
the

daily

a

a

all-time

new

rose

to

a

steel will be left

dinner at

a.m.

7:00

censed"

to

daily

p.m.

of

the

after defense and

over

defense-support

require¬

production, leaving 55% for the civilian

on

account

emergency

expectations

Allot¬

economy.

upped somewhat for June

are

and

they will be further increased for succeeding
Consequently, authoritative answer as to civilian sup¬
plies after July 1 awaits government contractors' reports to steel
are

control authorities

Thornburgh, The W. C. Thornburgh Co.; Wesley C. Thornburgh,
The W. C. Thornburgh
Co.; and
Robert
L.
Wagner, The W. C.
Thornburgh Co.

detailing their requirements.

these data

stated

needs

allotments

made

with

will
an

be

Upon receipt of
against production and
impact on the civilian

balanced

their

to

eye

economy.

Expectations

porting

needs

despite curtailments in
of the recent

on

hard goods manufacture.

consumer

slackening in

stocks at the wholesale
steel

Richard O'Neil Rejoins
Fairman Trading Dept.

met

level

is believed

civilian account

is

Some

durables because of excessive

consumer

temporary and pressure

likely to continue unabated, this

meetings, as Lqews',;|
prolonged three
hours
by the';'
minority's protests; at RCA's, where one irate |
owner
termed the management's proposal "a f
form of bribery," and at U- S. Steel's turbulent
j
70-minutes of pro Lest
against its incentive j
proposal this week. Unfortunately managed
^
ment, "with the votes in its pocket," has nof
j

are

A.

Wilfred

that automobile production will

move up slightly
gradually gear their operations to high
outlined for this month, "Ward's Automotive Reports"
predicted.
Schedules for May call for approximately 530,000
passenger cars and 140,000 trucks to be assembled in United States

May

revenue factors—by such as Dean Griswold of the Har-iUniversity Law School (before the 1950 annual meeting of
the Tax
Section
of
the American
Bankers Association),
and
Charles S. Lawton in the "Columbia Law Review" of January,

1951.

'

An

A

,

chief

emotional

Unintended "Needle"

contributor

"needle"

competitive

success

interested

maining
well

genuine

agement

be

not

critical

Automatic

in

else

Richard

LOS

six months of 1950.

O'Neil

R.

-

ANGELES, Calif.—Richard

assemblers of hundreds of

It

is

and

consumer

steel

durable goods to 80% of their

New

NPA

The
•

Street,

summary of the steel trade. There probably won't
be any for two reasons: (1) The control
planners, including in¬
dustry advisors, have long felt that CMP would eventually be
needed. And present controls were
as

possible.

designed to make the transition

on

page

Bond

hold

Club

its

of

pleased to

announce

that

in

the

stock-option device,

(at its comparatively favorable

"Such

options
who

annual

Jersey
field
day

the Montclair Golf Club.

in

retain the services

to

leave,

Dudley
mutual

Cates,

a

of

of

executives

the

might

who

otherwise

of business, do not consider this practice a

pawns

y

.

^

^

Problems

Constructive Remedy for Basic Corporate

This writer has for

a

long time embraced the conclusion that

the distribution of stock to company directors and
stitutes

one

of

the best

remedies for overcoming

managers con¬

the basic evils

our corporate system resulting from the characteristic
separation of ownership from control; the problem of remunerat¬

pervading
ing

constructively;

directors

directors

own

stock

and the difficulty
semi-copfiscatory

under the

bracket.

of having

.

option provide an important attraction
hiring of able executives, and for their retention; but it

the

for

the

Continued

funds

on

page

York

City), is the proud father of
daughter, Valerie, Born May 8.
We

pleased to

are

that

announce

Mr. William G. Carlin

37

meets

the

requirements

has

become associated with

Manager of

our

us

as

Commodity Department

discriminating

MR. FRANK L. HALL
•

our

firm.

Spacious Rooms
Homelike

•

general partner

•

Delicious Food

•

in

a

Weslheimer

Central Location

•

as

Intimate Cocktail

Atmosphere

and

Company
Members

Lounge

Excellent Service

York Stock

Exchange

Cincinnati Stock

•

Exchange

New

GERSTEN & FRENKEL
Members

New

York

Commodity

Dealers Assn.
Theodore B.

May 1, 1951




-

.

New York Curb

-

NEW YORK 7
Telephone DIgby 9-1550

Archibald, Manager

PLaza 3-9100

Madison Ave. at 54th St.,New York 22

322-326

(Associate)

Chicago Board of Trade
Exchange, Inc.

For reservations

Security

150 BROADWAY

the

tax imposts in

Not only does the stock

department in the
uptown office of Kidder, Peabody
& Co. (10 East 45th Street, New
a

the

of

offered

to give their employees generally a more direct interest
success
of the corporation."
Evidently our lawmakers,

surely not the

Papa

manager

in

rate)

or

the upper

Dudli
ley Cates

of the

has been admitted

like

are
frequently used as incentive devices by
wish to attract new management, to convert
'partners' by .giving them a stake in the busi¬

fraud.

New

Hotel Weylin
are

interest

in

(2) The scope of the plan, will not

Continued

We

Co.

nv,

weekly, in its

smooth

will

not

expect any sudden change, for
better or worse, when the new Controlled Materials Plan
goes into
effect July
1, states "The Iron Age," national metalworking

as

Seventh

Jersey Bond Gluh
To Hold Outing

rdune

For Week
should

consumers

that each
merits.

its individual

discredit constructive reform
is
destructive
of the public

merely

ordinary income.
Congressional
endorsement

A

Steel Operations Scheduled to Show Modest Decline

but

vote,

by
on

important as

made by man¬

economic

capital gains

corporations

V ''

announced, that steel for passenger
automobiles and trucks during the
third quarter
(beginning
July 1) will be limited to the following percentages of base-period
usage: passenger cars, 70; light trucks, 70; medium trucks, 100, and
heavy trucks (16,001 gross vehicle weight and above), 120.

to CMP

West

been with Edgerton, Wykoff &
and Oscar F. Kraft & Co.

by manufacturers and

during the base period.

anticipated,

Metal

210

Exchange. Mr. O'Neil has recently
iron

attacked

objectively
still re¬

are

the usually higher-taxed

ness,

of

the

is

abuses

of

is strategically

weighed

fairly

as

Co.,

use

it

condemnation

our

members of the Los Angeles Stock

limits the

doubt

no

remuneration proposal

blasts

rise

current

R. O'Neil has rejoined Fairman &

use

protest

correction

system,

demagogically

situation be

and

the

of steel for

long-term

in our corporate

manufacture of passenger automobiles and station wagons for the
month of June from 80% to 75% of the usage rate during the first

rate of

stockholder

to

Stockholder

arising from subconscious envy of others'
in attaining a high level of remuneration.

ethical that every

as

policy

in

their officers into

M-47

the

on

Apparently indicating
legitimacy of this option technique is the explanation
by the Senate Finance Committee describing them thus:

Authority Order

{!

equitable

lieu of

The expected increase over the 508,252 cars and 134,763
trucks in April reflects the additional work
day available the
current month, the above trade authority noted.

use

r y

vard

ported

plants.

M-47, issued last Friday, the agency cut the

..

lofty academic circles are the
objections becoming voluminous—on grounds
of social policy as well as its allegedly in¬

life, springs from the tax law. A
new rule under the Revenue Act. of 1950 permits profits realized
from the resale of optioned stock to be reported as capital gains
rather than income. Subject to certain conditions the new statute
provides that no taxable income is realized at the time the option
is exercised; and after the option has been held for two years
from the issue date, profits realized from its resale may be re-"-

producers

amendment to the National Production

..J

t

in

Even

The

programs

an

opportunity for defense and full exof
the
important
advantages
at
well-publicized meetings of -the"- stock- '

holders.

so,-much

collections through voluntary drives throughout
industry.

as

its

welfare.

supply to support
capacity steelmaking indefinitely in the future.
The cumulative
season
total to date, states this trade
weekly, is 5,939,3^20 tons
compared with only 304,392 tons at this time last year. No short¬
age of ore now is anticipated.
Serious scarcity of steel-making
scrap threatens, however, and' efforts are being made to stimulate

week

the

efforts.

Concern is growing over the raw materials

Prospects

used

planation

Irresponsible

trade paper observes.

our

was

From the constructive viewpoint of those who

that leftover tonnage after defense and sup¬
will fall far short of civilian demands

are

are

"in¬

bitter at the "grabs by. company,,
"loading their way by big business";^

which

Entertainment

& Trust Company; Robert
Isphording, Doll & Isphording,
Inc.; Herbert F. Kreimer, Assel,
Kreimer & Co.; Harry Lameier,
Magnus & Company; Frank O.
Loveland, Jr., Harrison & Co.;
Carl R. Mittendorf, Weil, Roth &
Irving
Co.;
Gordon
Reis,
Jr.,
Seasongood & Mayer; Robert W.

in heat in the form of

press,

brass";

J. Allison Dryden,

are

on

signers of l£tters-to-the-editor of

and at recent stockholders'

Bank

months.

In

being carried

luncheon

11:30

B.

Estimates for May placed defense and
supporting needs around

this

technique requiring dispassionate and objective public appraisal.
Unfortunately most of the present discussion, in lieu of light, is

Oscar
W.
Hirschfeld,
Stranahan, Harris & Co.; Henry J.
Hoermann, Provident Savings

satisfied?

are

45% of

for

present flow of stock option incentive plans, which are
inciting a veritable flood of objection, constitute a major corporate

dinger;

Availability of steel for the general consuming market after
the Controlled Materials Plan becomes effective
July 1 presents
the burning question of the
moment, says "Steel," the weekly
magazine of metalworking, the current week.
How much "free"

ments

Option—Newest Stimulus of Controversy

The

Dryden
&
Company; John N.
Fuerbacher;
John
G.
Heimerdinger, Walter, Woody & Heimer-

mark.

ments

and

Committee

record

new

p.m.

Members

of

Auto¬

for the latest week, but was
For the second consecutive week,

of crude oil production

average

high.

where

The Stock

day.

about 1%

earlier.

year

point last week to 104%

one

Club,

By A. WILFRED MAY

Golf, baseball, cards and other
special events are planned for the

about

capacity and total output reached

Sheraton-Sinton

will be served from

of World War II.

dropped

the

on May
24, to be followed
by dinner. The day will be spent
on
May 25 at the Mak.etewah

past#week was mixed with gains in some manufacturing lines
offsetting declines in others; however, total industrial output

the week

at

Hotel

The trend of industrial production for the
country as a whole

the

In

..

nual

J

insurance

Observations.

CINCINNATI,

Commodity Price Index
Food

and

Municipal
Outing

Production

Electric Output

Walnut Street

Dayton, Ohio, Third National Bldg.
Hamilton, Ohio, First National Bank Bldg.

MAin 0560
ADams

3257

Dial 3-2686

41

Commercial and Financial

The

$

Chronicle

Thursday, May 10, 1951

. , .

(1942)

What to Expect From
The Defense Economy
By SUMNER H.

about

what

months

University

a

of

gain

2.5%.

"normal" is about
The

work

at

people

a

in

the

national

gross

product begins to outrun the in¬
crease
in
defense
expenditures,
the

,

in

of more

result

combined

in 1952, when the

Sometime early

increase

problem of limiting the rise
prices will become less diffi¬
but it will remain a tough

cult

longer work

of

all

throughout

problem

week, and more output jper hour
would be a gain in gross national

ago.

year

a

assumption that
can
be achieved—

optimistic

2%

a

drop in unemployment of
2 million below
the first

three

SLICHTER*

University Professor, Harvard

Lamont

output.

quarter of 1950 to 57.7% in the
first quarter of 1951.
There was
also

will retard the rise in
Let us make the some¬

ficiency

proportion of persons
working age (14 years of age
and over) from 57.1% in the first
the

raised

of

the

1952

year.

;

been
Why do I believe that the coun¬
labor product of about $25 billion a year try is not yet over the hump in
Dr. Slichter analyzes effect of defense program: (1) on living
in
non-agricultural employment in terms of present prices. In the dealing with the problem of 'in¬
as
a whole.1
The total physical course of the next six months, this flation?
There are several ' rea¬
standard in months ahead; (2) on price level; (3) on wages,
output
of private
industry in¬ would mean a rise of about $12 sons for this belief. One is that
and (4) on strength of future economy. Holds there'll be tern- '
billion in the annual rate of out¬ the lull in business is being made
crease by an annual rate of over
porary rise in standard of living, and that prices are not yet
$10 billion or nearly 4%, between put During this period, however, possible largely by sales from
over the hump.
Finds steps already taken to control prices
the second quarter and the fourth the annual rate of expenditures inventories,
and inventories are
still inadequate, and tays post-defense period will be one of
quarter of 1950. In the second on defense and foreign military not large, particularly in relation
aid will rise by $15 billion a year to sales and unfilled orders. Dur¬
place, the purchase of goods (ex¬
expansion, rather than contraction, of the economy. Concludes
or
more.
Business concerns are ing 1959, the physical volume of
clusive of the services of labor)
net cost of defense program may be fairly small, in view of
also planning to increase their ex¬ inventories
increased about 7%.
by the government has increased
technological advances stimulated by it and by national
only slowly. In the last quarter penditures on plant and equip¬ This was just about sufficient to
Consequently, the outlook offset the decline in physical vol¬
income growth.
of 1950, government purchases of ment.
♦
of
inventories during the
commodities (when adjusted for is for a somewhat smaller supply ume
year. In the present quarter, this
changes in the price level) were of consumer goods. The supplies preceding year. Consequently, the
proportion is around 10%; in the only at the annual, rate of $2.3 of non-durable goods will not be country started the year with
About a year from now the ex¬
second
quarter of 1952, it will billion above the second quarter. reduced (unless crops are bad)
physical inventories about the
penditures for defense and foreign
probably be about 16%.
Thus
nearly all of the rise in but the present rate of production same in size as two years ago.
military aid by the United States
Strangely enough, there has
no
change in the hours of

♦

I wish to dis¬ physical production was available of automobiles, washing machines,
refrigerators, and other durable
principal questions. In for private consumption.
consumer goods will have to drop.
the first place, I wish to analyze
This
assumes
After the first of the year the
Hence
a
small
decline in ,the
briefly the effect of the defense
that in the
output of war goods rapidly in¬
standard of living of the country
■program upon the standard of liv¬
meantime
creased, but, despite this fact, the
for the rest of the year seems in¬
ing in the months immediately
there is no
output of consumer goods has not
evitable.
ahead. In the second place, I wish
large expan¬
diminished.
Indeed, the produc¬
to examine the effect of the de¬
; Sometime early in 1952, the sit¬
sion of mili¬
tion
of most durable
consumer
fense program on the price level.
uation is likely to change.
The
tary
opera¬
goods has been running larger
In the third place, I wish to dis¬
increase in the annual rate of ex¬
tions.. The an¬
than last year.
During the first
cuss
some
longer-run aspects of
on defense and for¬
nual rate of
two months of 1951, the output of penditures
the defense program, particularly,
eign aid between the first quarter
expenditures
the
passenger
automobile was
the question of whether or not a
of
1952 and the second quarter
will be about
12.7% above 1951; of washing ma¬
drop
in
defense
expenditures, chines. 7.1%; of vacuum cleaners, will probably not be more than
$55 billion —
around $3 billion or $4 billion as
probably about 1953, will produce 11.1%.2
about $45 bilThe
number
of
new
a
an annual rate. The gross national
period of deflation. Finally, I
1 i o n for de¬
housing starts in the first three
wish to analyze briefly the longfense, $7.5 bil¬
months of this year was almost as product, however, will probably
run
nature of the defense
pro¬
be increasing at an annual rate
lion
for
for¬
Prof. S. H. Slichter
large as last year—260 thousand
of about $6 billion every quarter.
gram, the ability of the economy
eign military
in comparison with 279 thousand.
In other words, some time early
to
bear the burden of the pro¬
aid, and nearly S3 billion more
The rise in the standard of liv¬
in 1952 the increase in total out¬
for promotion of defense produc¬ gram, and the effects of defense
ing that has been going cn since
tion, civil defense, and miscel¬ expenditures upon the strength of last summer will soon come to an put will begin to outrun the in¬
crease
in
the
consumption
of
laneous defense items.
The in¬ the economy.
end and the rise will probably not
goods for defense
and foreign
crease
in
spending for defense
II
be
resumed
for nearly another
military aid. Hence the level of
and foreign military aid during
Up to the present the effect of year. There is still some slack in consumption, after not rising for
the. next 12 months will be some¬
the economy to be taken up. but
a
period of about
nine to 12
what more than during the last the defense expenditures upon the
not Much.
Some further drop in
monthsy \yill resume its rise. All
12.. Expenditures on defense and standard of living of the country
unemployment'1 is possible, but it of this assumes, of course, that
has been good. In the third quar¬
foreign aid have risen by about
wiil. be difficult to-reduce unem¬
ter of last year, the physical vol¬
the United States is not compelled
$15 billion as an annual rate dur¬
ume
of
consumption was 4.3% ployment to less than 1.5 million to enlarge or speed up its present
ing the last year. During the next
—a
drop of about 600,000. Some
above the second quarter, and in
plans for expenditures on defense
year these expenditures (depend¬
the fourth quarter it Was about further increase in the proportion and foreign military aid.
4 '
ing somewhat upon the movement
the same (after seasonal adjust¬ of population of working age in
of prices) will rise by around $22
iii
the labor force is possible.
Un¬
ment) as in the second "quarter.
billion.
The proportion
of the
How will the defense program
doubtedly, some increase in hours
gross national product devoted to During the first quarter of this
of work is also possible, in spite affect the price level?
What is
defense and foreign aid will also year, the physical /volume of re¬
of the fact that thus far working the danger of inflation?
Several
continue to rise for about another tail sales was about 6.2% above
hours have responded little to the weeks ago, one of the country's
the same period of last year.
growth in the demand for labor. ablest economists expressed the
*An address by Prof. Slichter
before
■will

running

be

their

close

fairly

to

In these remarks

cuss

peak.

four

Particularly important is the re¬

lationship between the volume of
unfilled
orders and inventories.

,

.

.

The rise in the standard of liv¬

Brewers Foundation,
1951.

States

United

the
St.

Mo., May 8,

Louis,

ing
two

has

possible

made

been

In

circumstances.

by

first

the

place, there was a certain amount
of slack in the economy and the
rise

SAMPLES
Will

you invest $1 to
inspect
development in successful

For this explan¬

stock timing?

quickly

caused

folder
plus free samples of complete
service, send $1 to cover han¬

allows

increase in the labor force—about

over

a

twice

the

an

abnormally

.This

rate."

"normal

a

ment

Reeves Soundcraft

Flying Tiger g

Lexington Ave.

for

rise

a

next

of

a

rapid

(a

year

million.

1.5

These

rise) ■judgment,
hump"

two

Bought

—

Sold

—

Quoted

Some

during

JAMES J. LEFF & CO.

Common Sense

the

next

year

now,

made possible

been

]

■

.

in business has

The current lull

partly by the

people have been buying

fact that

quantities of durable

large

last

without

year

an

consumer

e r m

This

con¬
(larger quantities
at
this time)
increase
in
short-

goods

sumer

than

t

much smaller

last year.

than

that,

means

of

standpoint

indebtedness.
from
the
a

as

consumers

whole, the current high output of
durable consumer goods has been
absorbed

a

on

pay-as-we-go

basis.

helped to limit the de¬
mand
for
non-durable
goods.
Within several months the supply
has

This

of

durable

goods will

consumer

Furthermore, as consum¬
ers
pay off the indebtedness in¬
curred last year and the year be¬
fore for the purchase of automo¬

drop.

biles,
ume

able

other

and

sets,

television

durable consumer

goods, the vol¬

personal incomes avail¬
for the purchase of non-dur¬
of

will rise.

able goods

Wage rates will continue to
and this rise will exceed the
in

output

labor

gain

Hence
will continue to rise.
manhour.

per

costs

This will

y ')
rise,

necessitate some offset¬

ting increase in prices.
Finally, there will be a

*•._/
consid-

MEMBERS
MIDWEST STOCK EXCHANGE

there has been

in the index
of
wholesale prices.
1 do not believe, however, that
the country is yet over the hump.
change

In fact, I

would occur only gradually.
gain in output per man-

believe that the problem

limiting the rise in prices will
be an acute one for at least a

Stix & Co.
.

-

STREET

509 OLIVE

of

may

bottlenecks .year, and a half and that it is
in" production and the necessi y likely to be particularly difficult
of 1951.
of using workers of inferior ef¬ in the closing months

be

fore, inventories are

"we
are
over
the
far as the problem of
is concerned.
For over

months

little

increasing the
Such a chahge, how¬

work week.
ever,

N. Y.

as

inflation
two

be obtained by

hour

New York 16,

than inventories.
In
relation to unfilled orders, there¬

greatly affected by the supply
agricultural products. Another
very able economist, in conversa¬
tion with me, stated that in his

little

changes would increase the hours
worked
by about 3%, Perhaps
another 3% in the hours worked
can

be

to

they were about

a year ago

less

26%

be

gradual drop of unemploy¬
to

appears

were

inven¬

than

larger

of

the labor force

million in

the

in

and

ANALYST INSTITUTE
126

Employment can
increased by nearly
during the next year.

be

million

2

inflation

passed, though he cautioned that
the movement of prices
during
the remainder of the year would

product.

probably
This

was

atory TIMING FACTOR

dling costs to Dept. B

further
tional

rent

must not expect a rapid
expansion of the gross na¬

one

up,

view that the "worst" of the cur¬

has already been taken

large

There
new

demand

in

much of this slack to be taken up,

Since much of the slack in the
economy

tories;

manu¬

orders

unfilled

31%

about

February,

of

end

the

At

facturers'

possible, although

St. Louis 1,Ho.

>'

Incorporated

Sound Principles
the

constitute

-

Otherwise
of

Theory.
of

instead

Dow,

after well over

used
-

keystone

long since
a
method

have

of

Dow's

the
precepts
being widely
50 years would

been

principles

of the

DOW THEORY COMMENT
Applies
Dow's
teachings
today's
market
action.
Current

quest,
all

will

be

sent

on

re¬

text

book

will

Colorado Springs, Colo.




worked in

non-

workers work¬

['

ing

-

Per cent of
^

Established

workers work¬

workers work¬

1856

ing 48 hours

over

and

40 hours

less

or

■
Per cent of

ing 21 hours

industries

time in various

*

"
Per cent of

over

26.5

7.6

35.5

February

41.2

8.0

35.7

26.6

H. Hentz & Co.

March

41.3

8.3

36.2

27.3

Members

June

41.8

6.3

36.0

28.3

41.5

7.2

38.6

28.8

November

41.1

37.0

27.3

,

8.0

December

MARKET

Minneapolis

41.2

8.3

38 2

28.5

,

7.9

38.0

28.8

8.3

38.5

28.9

8.0

38.7

1950

March

William A. Fuller & Co.
Stock Exchange

209 S. La Salle Street, Chicago 4
Tel. DEarborn 2-5600

Tele CG 146-7

41.3

\

*

'

'

41.3

,

,

41.3

___

.,

41.2

1951

February

Prospectus Available

-

October

January

Common

Members of Midwest

RHEA, GREINER & CO.

■

distribution of working

worked and

follows:

agricultural

January

without
obligation.
With
mailed
by
June
1,

a
111-page
included.

as

Average hours

Date-

requests,

1951,
be

letter

to

was

Teletype NY 1-3018

Gas

Averages.

hours

average

months

.

barometric Industrial

Railroad

1 The
recent

'

forgotten as
market

entirely
log¬
remain un¬
impaired as a means of predicting
future market probabilities by the

4

conceived,

these

and

SL, New York

Telephone BOwling Green 9-5920

TRADING

Soundly

action

Broad

Interpreting

of

trends.

ical,

50

-

■

!

'

cars

Washing machines
Vacuum

cleaners

•

2_

V

!

York

Curb

Exchange

Cotton

Exchange

York

New

29.3

Board

of

Cotton

Orleans

■
And

Inc.

Exchange,

Commodity

other

»

Trade

Exchange

'

Exchanges

Series P-57,

....

N. Y. Cotton

follows:

First 2 months of 1950

Passenger

Exchange

Chicago

;

.

of various items was as

Stock

New

Current Population Reports,

90-105.

York

New

U. S. Bureau of the Census,

2 The output

<

New

Nos.

Source:

*

-

873,185
618,600
512,665

Survey of Current Business, March 1951,

First 2 months of 1951

-

984,454
662,420

--569,482

and April, 1351, pp. S-40, 34.

Exchange Bldg.

NEW YORK 4,
CHICAGO

DETROIT

GENEVA,

N. Y.
PITTSBURGH

SWITZERLAND

« ;

Volume 173

Number 5010

.

.

The Commercial and Financial
Chronicle

.

(1943)
erable

expansion

comes.

rise

•

the

of

personal

in-

wage

in

personal

in-

about $11

and

salary

payments

raises

by
$12 billion a
a result of -year.-The rise in wage rates will
in employment and continue.
As the consumer price
me
length of the index remains well above the

The

increase
rlse

billion

or.

last

will

June.

decide

These

that

as

their

large

various

have

lagged behind -the
cost of living long enough, and
that they will no longer tolerate
wages

pre-

th^advsmce in wage-rates ^An

since

workers

partly

those obtained by the
during the last

as

unions

nine months.

(

.

Union workers will continue to
for generous wage advances

press

about to begin.

Negotiations have
started or will soon start in the
electrical goods industry, the rub-<
ber industry, the
women's garment

industry, the

paper

more having this lag in their wages —in spite of the fact that. such try, the copper industry,
and
to increase used as a way of holding down increases will add to the excess of others. Perhaps the unions will

and more imperative

pansion in employment of nearly
2
million and a rise of 3%
in
weekly hours of work would raise

the

wages of the tens-of millions

of

workers

who

have

had

prices.

no

on

These workers will

wage

increases that

are

insist

consumer

nearly

purchasing

sixth round

of

The

power.

be

willing to adopt

increases is

wage

'

Continued

a
on

New Issue

$65,000,000

State of
2V2% and

Michigan

V/z%Hospital Bonds

Dated June 1, 1951. Due
June 1, as shown below. Principal and semi-annual interest

Treasurer, Lansing, Michigan,
*

In the

Y.,

principal only.

Exempt from Federal Income Taxes
Tax

Eligible, in

(June 1 and December 1) payable at the office of the State

at the current fiscal agent of the State in Detroit, Michigan, and at
sub-agents in New York, N.
Illinois. Coupon Bonds in denomination of $1,000, registerable as to

and Chicago,

.

Interest

opinion,

under

.

,

Existing Statutes and Decisions

Exempt in the State of Michigan

Legal Investments for Savings Banks and Trust Funds in New York,
Michigan and certain other States and for Savings Banks in Massachusetts and Connecticut

:

our

as

opinion of counsel named below, these Hospital Bonds will constitute valid

full faith and credit of the State will be

and legally binding
obligations of the State of Michigan and the
pledged for the payment of principal and interest.
-

(Accrued interest

.

to be

.

Due

$3,000,000

1953

21/Z%

1.10%

3,050,000

1954

2i/2

1.15

Coupons

tq Yie|d

,A

Amounts

|

Due

Coupons

1959

11/2%

1960

11/2
IV2

3,400,000

1961

3,150,000

1956

21/2

1.25

3,450,000

1962

21/2

1.30

11/2

1.35

1.375%-

Due

Coupons

to Yield

11/2%-

1967

11/2

1.45

3,750,000

1968

11/2

1.60

100

1V2

1966

3,800,000

1969

11/2

1.60

3,500,000

1963

IV2

3,550,000

'

$3,650,000
3,700,000

1964

11/2

993/4

3,600,000

-

Prices

Amounts

1.40

1.20

1957

.

OR PRICES

'

Prices

3,350,000

2l/2

1958

or

•

■

.

Yields

$3,300,000

1955

3,200,000

-

■

V

3,100,000

3,250,000

•

added)

Prices
Amounts

-•

t

AMOUNTS, MATURITIES, COUPONS AND YIELDS

1965

V/2

991/2

100

-

"1.55%
1-55

,

3,850,000

1970

11/2

1.65

3,350,000

I

1971/55

11/2

1.65

<

'»'

-

•

The Bonds maturing in 1971 will be redeemable
by lot at the option of the State of Michigan
at par and accrued interest on
any interest payment date on and after June
1, 1955.

,

The above Bonds

-

are

delivery when,

offered, subject to prior sale before
as

Messrs.

•

and if issued and received by

us

after appearance of this

or

advertisement, for

►1

•.<

and subject to the approval of legality by

-

Miller, Canfield, Paddock and Stone, Attorneys, Detroit, Michigan.

'

v

//juv/;

•

The National City Bank of New York

_■:.VJ.

—

J. P. Morgan & Co.

•

v

V

'

c

'

C. J. Devine & Co.

Incorporated

Smith, Barney & Co.

The Northern Trust Company

.

.^

Lazard Freres & Co.

The Philadelphia National Bank
•'

c...

■

*

The First National Bank
of

.

j.

;

■

..

....

Braun, Bos worth & Co.
Incorporated

'

v

-

,

'.v...

-v

.

'

-

•'

R. W.
.*

■

Pressprich & Co.
^

-,

.

'

Mercantile Trust

Company

Estabrook & Co.

;

San Francisco

'

y

Portland, Oregon
-,yn-y,-

*

'

"

,

Merrill Lynch, Pierce, Fenner & Beane
■

«

,

:

-

.

,

'

■/
..

American Trust Company
,

Alex. Brown & Sons

,

,fl

Carl M. Loeb, Rhoades & Co.

"

;

"

;

1

Lee Higginson Corporation
v

<

R. H. Moulton & Company

of Baltimore

Branch Banking & Trust Co.

Trust Company of Georgia

'

i
,

Weeden & Co.

Roosevelt & Cross

Incorporated

F. S. Smithers & Co.

Incorporated

Shearson, Hammill & Co.

......

Robert Winthrop & Co.

v

-

Ira

Haupt & Co.

^

t

Emerson Cook Company, Inc.

The Boatmen's National Bank
.

«

of St. Louis

v

■

Watling, Lerchen & Co.

The National Bank of Commerce
of Seattle

G. C. Haas & Co.

J. Barth & Co.

A. M. Kidder & Co.

Bartow Leeds Co.

H. M.
•

'

Byllesby and Company

Pacific Northwest Company

Kaiser & Co.

'

„

.

Reinholdt & Gardner

First American National Bank
Nashville

•

%

Ball, Burge & Kraus

Barcus, Kindred & Co.

F. W. Craigie & Co.

(Incorporated)

.

Seasongood & Mayer

The Atlantic National Bank
of Jacksonville

"

Merrill, Turben & Co.

The Continental National Bank & Trust Co.
of Salt Lake

Third National Bank in Nashville

The Peoples National Bank

Iowa-Des Moines National Bank

Schapiro & Co., Inc.

,

Dolphin & Co.

Boland, Saffin & Co.

City

Moore, Leonard & Lynch

Charlottesville, Va.

M. A.

The Citizens & Southern National Bank

Edw. Lowber Stokes Co.

Atlanta

Courts & Co.

A. G. Edwards & Sons

Raffensperger, Hughes & Co.

•
-

May 9, 1951.




indus-

Korean ^veV it will become

ex-

,

7

Incorporated

Fauset, Steele & Co.
,

MacBride, Miller & Company
••

policy

of

page

32

8

Financial Chronicle

The Commercial and

-(1944)

ployee contribution was increased
to 1 Vz %. Finally Rhode Island was

Noyes & Company, 208 South La Salle Street, Chicago 4, 111.
Also available is a discussion of Electric Utility Common

Dealer-Broker Investment

permitted to withdraw $29 million

Co.

particular mention of Pacific Gas & Electric

Stocks with

Recommendations and Literature
ft is understood that the firms mentioned will be
send interested parties

to

pleased

the following literature:

New York

Anybody Can Make Money In a Bull Market—Study—Calvin
Bullock, 1 Wall Street, New York 5, N. Y.
Dow Theory
Comment—Applying Dow's teachings to today's
market

action—Current

all

requests
will be

mailed

letter

without

obligation

Casualty

charts complete with dividend records for the
1950, showing monthly highs, lows, earnings,
capitalizations, volume on virtually every active stock on the
New York Stock and Curb Exchanges—single copy $10.00;
yearly (6 revised issues) $50.00—special offer of three edi¬
tions of Graphic
Stocks, 1924 through 1935; 1936 through 1947

,

_

"Information Please!"—Brochure explaining about put-and-call

options—Thomas, Haab & Botts, 50 Broadway, New York 4,
New York.

Insurance

comparative

analysis of

the

Gas

Diego

36th Street, New York
16, N'. Y.—$1 per copy.
Over-the-Counter Index—Booklet showing an up-to-date comparison between the 30 listed industrial stocks used in the

practically

Averages, both

beats the
New

'

■

Industry's

Electronics Fund,

Inventory

South La Salle Street, Chicago

Inc;, 135

3, 111.
"The Inevitables"—Bulletin

on growth situations—Rotan, Mosle
Moreland, 806 Rusk Avenue, Houston, Tex.
Timing Factor — Explanatory folder pliis samples of complete
service—$1—Department B, Analyst Institute, 126 Lexington
Avenue, New York 16," N. Y.

and

Your

Financial

Future—Booklet

the

on

Fund's

new

plan for

"systematic investment
Wellington Fund,'Inc., 1420
Street, Philadelphia 2, Pa,
.

Walnut

—

-

♦

*

•

Boston 9, Massachusetts.

Industries,
68 William

brief data

&

Co.,

State Street,

148

*

Inc.—Bulletin—Gartlev

Street^ New York 5, N. Y.

Inc.,

Also available

are

American Metal Products Co., Drewrys Limited

on

U. S. A. Inc., and Robertshaw-Fulton Controls Co.

Ampco

Metal

209 South

Inc.—Memorandum—Sills, Fairman
Salle Street, Chicago 4, 111.

&

Harris,

La

Audio Devices, Jnc.—Analysis—Peter

Morgan & Co., 31 Nassau

Street, New York 5. N. Y.
Brothers of the

Christian Schools of Lafayette, La., Inc.—Cir¬

cular

describing $300,000 first mortgage 3Va% bonds—John
Dane, National Bank of Commerce Building, New Orleans
12, La.

*

Canadian

Pacific

Schwabacher &
Francisco

Railway

//

Company—Analytical

brochure—

Co., 600 Montgomery at Market Street, "San

Central Violeta

Sugar—Bulletin—Stanley Heller & Co., 30 Pine

contains innovations.
the employee pay¬

law,

For

example:

%

of

Va

of

there

be

can

contribution that
low

employer

1%.

To

en¬

the employer's contribu¬

courage

tions

and the

1%

contribution

decreased

a

can

go

down

l/10th of 1% for good

as

as

ex¬

penalty contribution
as high as % of
1 % -when bad experience prevails.
A majority of the covered em¬
perience.
that can

A

go

up

ployees in New Jersey
by

and

more

are

insured

private

plans under Group
policies that provide a substan¬
tially higher schedule of benefits

York

liberal terms than those

insured by the State Fund,

costs that normally are passed on

in price to the consumer. Then
Last July first New York's
if an employee is relieved of the Sickness Disability Law went into
cost.of providing insurance, hos- effect. This bill represented the
British State Socialism and Com- pitalization and other services for combined
thinking of managemunistic Imperialism. The avowed himself it is in fact an addition to ment, labor, the insurance induspurpose* of Moscow directed com- his spendable income • and hence, try and the State authorities. The
munism is the conquest of the inflationary. If we are to win a bill provides for a $26 maximum
economic
battle
we benefit with employee contribuworld by economic, revolutionary, worldwide
military means.

if necessary,

country

Russian

the
for

drive

We

tion.

is spearheading the

to

opposition

back

fighting

are

Com¬

domina-

world

not

the Far East in actual
military combat but all around the
world economically and politically.
There is no doubt of our ultimate
only

in

success

as

the combination of na-

tions allied with us is superior

ical

and

force

economic

economic

an

will

fronts
and

political

Certainly

collapse within Russia.

climax should .be reached by the

It

1953.

of

end

is

very

possible

inflation.- If

control

must

clear that the unions will

-

it

tions limited to

of 1% of wages
but not in excess of 30 cents a

is

bargain

week; the balance of the cost of
coverage to be paid by the em-

they did in World War II for

as

is

it

benefits"

"fringe

important

to know what to expect. The par- ployer. Employees may self-inticular "fringe benefit" that . I sure or secure coverage from prlshould like to discuss is Sickness vate insurance carriers
or

through the State Insurance Fund.

Disability Insurance.
Rho{Je Is,and
^

introduce

m

nearly every way to Russi .
Many well-informed men feel our
growing meLUVCiiess uu the pu I
growing effectiveness on uic politvery

a

4, Calif.

basic political

three

Fund.

State

of Modified Capitalism;,

form

can

munist

Associates.

&

are

employers have

Jersey was next—although

ing

President, Harvey Dann Company, New

meet

systems competing for supremacy
in the world today. The Ameri-

and

*

Corp.—Analysis—Raymond

Allen

*

There'

Our

Aerovox

*

Position—Study—Television-

year's

to

law,- patterned after the Cali¬

its.

fornia

By HARVEY DANN*

4, New York.
Television

a

privately insured plans as the cost

Fringe Benefits Aid Inflation

as to yield and market
performance over an 11-year period—
National Quotation Bureau, Inc., 46 Front Street, New York

used

be

most of the large

Dow-Jones Averages and the 35 over-the-counter industrial

'

the

1950,

1,

its current

all
will

revenues

'

stocks used in the National Quotation Bureau

Jan.

current expenditures. Incidentally,

F. Breen, 20 Pine Street, New
York-5, N. Y.
Also available are reports on U. S. Thermo
Control Co. and American Television & Radio.
Valley Mould & Iron—Circular—duPont, Homsey & Co., 31*
Milk Street, Boston 9, Mass.
Westgate Greenland Oil Co.—Memorandum—Aetna Securities
Corp., Ill Broadway, New York 6, N. Y.

leading insurance companies—Blyth & Co., Inc., 14
Wall Street, New York 5, N. Y.
Measurements of Railroad Bond Quality—Study—Savings and
Mortgage Division, American Bankers Association, 12 East

$25 a week is

In

hospitalization feature was added
providing $8 per day for 12 days
and, in the event of hospitaliza¬
tion, disability benefits start from
the first day. The California State
Fund is now at a point where

Electric Company—Analysis—Holton, Hull

&

and

weeks

26

Udylite Corp.—Report—George

coun¬

try's

•

pay-all

employee

wage

maximum.

Street, New York 4, N. Y.

Slocks—Annual

State

taxable

Lerner &

t

edition, all for $25.00—F. W. Stephens,

William Street, New York 5, N. Y.

—

Los Angeles 14, Calif.
—
Card memorandum —
Scherck, Richter Co., Landreth Building, St. Louis 2, Mo.
Seminole Oil & Gas Company—Data—Nielsen, Gordon & Hall,
120 Broadway, New York 5, N. Y.
Snap-On Tools Corporation — Bulletin — Remer, Mitchell &
Reitzel, Inc., 208 South La Salle Street, Chicago 4, 111.
Soya Corp. of America—Review—Olds & Co., 35 Montgomery
Street, Jersey City, N. J.
Standard Gas & Electric Company—Analysis—W. E. Hutton
& Co., 14 Wall Street, New York 5, N. Y.
Standard Oil Company of New Jersey—Annual report—Stand¬
ard Oil Company (New Jersey), Room 1626, 30 Rockefeller
Plaza, New York 20, N. Y.
Transamerica Corp.—Memorandum—Hirsch & Co., 25 Broad

tions of 1,001
full year of

15

Card memorandum

& Co., 210 West Seventh Street,
Seismograph Service Corporation

Stocks—Comparison and analysis
of 1950 earnings of 50
stocks—Laird, Bissell & Meeds, 120
Broadway, New York 5, N. Y.
Graphic Stocks—January issue contains large, clear reproduc¬
Insurance

and up-to-date current

—

1, 1946. This law established
Fund financed by 1% of

Dec.
a

4, N. Y.

contribution. Benefits are paid for

San

Colorado.
&

in their dis¬

Falls Machine Co.

1951, a 111-page text book
included—Rhea, Greiner & Co., Colorado Springs,

Fire

use

ability benefits program. Despite
all this the Rhode Island plan is
still not out of the woods.
The California Disability Bene¬
fits * Law
became
effective
on

Co., 10 Post Office Square, Boston 9, Mass. Also available is
a memorandum on Gear Grinding Machine Co. and on Seneca

with

and

Federal Unemployment

—

Riverside Cement Company

1,

by June

Inc.

Fund for

Trust

Analysis—Gottron, Russell & Co.,
Union Commerce Building, Cleveland 14, Ohio.
Placer Development, Ltd.—Analysis—John R. Lewis, Inc., 1006
Second Avenue, Seattle 4, Wash.
Portland General Electric Co.—Analysis—Ira Haupt & Co.,
Ill Broadway, New York 6, N. Y.
Remington Arms Co.—Analysis—Batkin & Co., 30 Broad St.,
Industries,

the

from

and Southern Company.
Pathe

strengthen the Fund the em¬

To

Corporation—Analysis—David A.

National Distillers Products

Thursday, May 10, 1951

.

.

.

was

The State Funds of California and
State Insurance Fund, unlike
the

the first state

compulsory sickness

New

insurance. The mild re-

sjs^ance
tQ the

on

Jersey, is in effect
company

that

the part of employers

an

insur¬

by the State
coverage
at variable

ance

sells

run

bm> drafted with the help

™ T\um' ^diiea wuii uie neip premium rates just like any other
f Federal planners
disappeared Tnonranpp
Another Hif
prnnWorc
n^iired l.nsurance company. Another de¬
^ ?
»emPloye[s were assured ference between New York and
mmnonv

..

.

wpt-p

!!'!, m^Lanee ?hfto«ira The the other three States which have
™ ?
n? wWin^
adoPted cash sickness programs is,
0S wt that under the New York Law,
w«

Wislation

a

Street, New York 5, N. Y.
Copperweld Steel Co.—Brief analysis—Faroll & Company, 209
South La Salle Street, Chicago 4, 111.
Also available is a
short bulletin on the Studebaker Corporation.
Douglas & Lomason Company—Analysis—Cohu & Co., 1 Wall
Street, New York 5, N, Y.
Also available are analyses of
Newport Steel Corporation and Suburban Propane Gas Cor¬

poration.
Eastman

Kodak—Review—Ira

New York

Glass

Co.,

Broaiway,

Ill

.

Inc.—Memorandum—Gross,. Rogers

&

Co.,

.

Chemical—Analysis—Dreyfus

York

&

Co.,

50

Broadway,

4, N. Y.

there

not

things that

Co.—Analysis—May & Gannon, Inc.,
Street, Boston 10, Mass.
Long Island Lighting Company—Analysis—Filor Bullard &
Smyth, 39 Broadway, New York 6, N. Y.
Devonshire

to

are

+

U

+

to ;be true
bdt certain

clearly ahead eco-

we

shall be able

country can consume. In a period
of
great
industrial
expansion,

about
little

often played

are

though

all the
stopping

talk
very

being done as there are
too many loopholes along the line.
One of these very large loop¬
being made by Eric John¬
Economic Stabilizer,

our

Federal Screw Works

as

yielding to "Big Labor's de¬
that "fringe benefits" be
excluded from wage stabilization

pressure

Industry will be under
to increase pensions, dis¬

ability benefits, life insurance,

Troster, Singer & Co.
Members:

74

N.

Y.

Telephone:

HA

2-2400.

Teletype

Private

wires

NY

1-376;

377;

378

Cleveland—Denver—Detroit—Philadelphia—Pittsburgh—St.




"An

LouU

receiving salary continuance
caused a major drain on the

fell

Wisconsin,

increases

are

not

as

address

by Mr. Dann at Annual
Meeting of the Financial Group, The As¬
sociation
New

of

Cotton

Textile

into

Mas¬

sachusetts and

Hawaii will prob¬
ably adopt cash sickness legisla¬

Fund. Insolvency of the Fund was

tion this year.

avoided

only
because
of
the
accumulated previous to
the time benefit payments began.

This

winter

in

Albany the As-

money

Continued

on

page

COLUMBIA MACHINERY & ENGINEERING CORP.
COMMON STOCK

Company reports shipments from plan for months of:
March

1951

$175,000.00

April

1951

228,000.00

Backlog in excess of $3,000,000.00> including
Government contracts.

Current Market

ac¬

directly inflationary as wage in¬
creases
biit they are production

to

automatically

Pennsylvania,

soon

Merchants

York, N. Y. City, April 29, 19S1.

of

—

1%

-

l7/s

Inquiries cordially invited.

cident, hospitalization and medical
plans.
r
These

Security Dealers Association

Trinity Place, New York 6, N. Y.

or

he

tbe gtate puncj

he is

controls.

Primary Markets

plan

payments to employees collecting
under
Workmen's Compensation

down and

politicians
inflation

mands

Talon Inc.

s&as&B-LT.; unsrs^s:"
fits tor pregnancy cases and dua

is

holes is

Foote Bros. Gear & Machine

to

produce far more than our own

ston,

Giddings & Lewis

seems

nomically. Our country's production
facilities will be
enlarged

costs

Jones & Lamson Machine

161

4-u-

4U

Tt.ru

Whether this proves
or

greatly. By 1953

458

Spring Street, Los Angeles 13, Calif.

Harshaw
New

&

6, N. Y.

Fibers,

South

Haupt

sr"-—• --—•

Kobbe &

Company

INCORPORATED
Members

National

Association

55 Liberty Street,

Telephone BArclay 7-2663

of

Securities

Dealers, Inc.

New York 5, N. Y.

Teletype NY 1-277

41

-

Volume 173

Number 5010

The Commercial and Financial Chronicle

r

;<i945)

anti-inflationary

is

Vice-President

and

on

Mr.

Brinberg is Research

Associate of the Economists' National Committee

economy,

bond from the

a

through the hands

effective anti-inflation weapon.

tion of bank-held U. S. Government securities.
home

inflation

front

must

be

battle

selves

against

are

that

so

may

nomic firms.

However,
the
processes
of
monetizing
Federal
debt
also
create purchasing power and rep¬
resent
our

individuals,

banks

the

and

banks.

potential

demand.

Under

present system a limit to this

eight

ditional 75%

is made up of U. S.

government securities and
paper.

But this limit is

demic

than

real.

As

supply is1 expanded
reach
Leland Rex Robinsor Herbert

to produce
at the

Brinberg
while

time it safeguards the

same

living

R.

war

the tools of

standards

and

their

more

the

and

minimum

requirement

eligible
aca¬

money
reserves

levels,

the

be

may

re¬

duced without the fear of gold
withdrawals and insufficient gold
holdings. In fact, as these mini¬
mum levels were reached in
1945,

savings of
the
people.
Here,
our
greatest the ratio was reduced from 35%
internal foe is "inflation."
against the deposit liability and
Inflation, viewed as abnormally 40% against the note liability, to
rising prices and costs, may be 25% against both. •;
described

in terms of the

widen¬

ing gap between money demand
for, and
supply «of, goods and
services. This gap is due to in¬

In

ing

most

instances'4he purchas¬

arising from

power

govern¬

bank.

possible

stops

the economy and how
it might become the

eventually
vehicle of

hyper-inflation, speed¬

ing dizzily

on

bauchment

the route to the de-

of

tude

pro¬

growning magni¬

permitted

are

Federal

currency,
to

in

occur

financing.

Stop 1—After leaving the Treas¬
on its
hypothetical journey

the

bond

safe

deposit box of

or

makes

its

insurance

an

to

way

an

the

individual,

company

or

a

the purchase of
eral

goods, to the Fed¬

Government

ment, in turn,

.The

services.
effected

The

current

to

quantity

conditions

day,

ductive, then

of

vices

new

goods

commensurate

newly created

of business and

individuals
—the
the

(the

bond

Government

has

simply

between

two

purchaser

goods

very

to

be

pur¬

supplier,

via

omy

remain

purchasing
If

the

unchanged;

power

money

new

paid out for the

bond is taken from inactive funds

(such as currency kept, in
deposit m boxes, safes, etc.)

safe

and

transactions, then the flow

or

services

avail¬

of

active

have

money

is

undisturbed.

otherwise

would

been

increase

are

required

to

be

kept

loan,

collateral for

as

of

process

the

bank

ing

a

loan.5

granting

grants

the

deposit

a

new

purchas-

thus created. Of
good security could
been pledged and, where the
is

power

course

have

any

borrower

enjoys

rating,

security at all need be-

no

good

a

credit

hypothecated. The bond, it would
jq

qppm

the
be

convenience

mprp

o

transaction.

And

so

it

serves. The bond could h3V6 t3k6n

in

a

would

had adequate

wise

and

resources

short cut from its starting point,

£0UJj» directly into,, the banks
portfolio. The same results would
follow.
>

provided the borrower other-

good credit rating to make hinr
bankable risk. In many instances

Stop 5—The bank may decide
unload the government bond

prospective borrower can offer
neither good collateral nor a satisfactory credit rating. Govern-

to

ment
securities,
however, • are
backed by full faith and credit of

buys it, a
place
but

a

Federal

the

Government.

in order to make other loans or
investments. When another bank

With

simple transfer takes
there * is usually no

change in the outstanding volume
However, it is possible
new purchasers to be sub-

of money.
3 We

will, however,

the
for

same

assume

propensity to consume
is
all
individuals and that

penditures by different
different goods of their
distorting effects.
4 Of

course

of

throughout
the

•?£»/•»+

the

tO
ments.?

Intermedi-

6 In

a

presence

5 Non-marketable

savings
as

bonds

security

for

offer to sell

nor a

are,

bank

solicitation of

an

the

the

event

on

bank

offer to

buy these securities.

New Issuq

$50,000,000
*">

growing

volume

of

U.

>

•

"

"

•

'

<

Province of Ontario
(CANADA)

Twenty Year
Dated May 15, 1951

Debentures

V

row

Of course, many examples may
be presented of an excessive and
unwarranted

creation

from

of

to

meet

other

3

Due May 15,1971

S.

Price 98% and accrued interest

these

Fortunately,
never

money

sources—the

the Federal

demands

the

been

Reserve—
for

cash.

Treasury

forced

to

sion

by business concerns. Faced
with mounting costs and insuf¬
ficient
cut

income, these firms must

back

At the

or

same

1 Silver also

metal

is

as

to

some

loss

of

as

less

longer considered

a

valuable

monetary

and

is

metal

no

in

the dollar's present or future
pur¬
chasing
power.
One
of
the

2

Many students of business cycles be¬
be caused by alternately
expanding and contracting bank credit.
Cf., R. G. Hawtrey, L. von Mises, et. al.

lieve the cycle to




of the

debt

now

ex¬

cept in some Far Eastern countries.

erations

may

create

new

Ripley & Co.

Wood, Gundy & Co.
Incorporated

Incorporated

The First Boston Corporation

money,

it may turn the debt into

an

Smith, Barney & Co.

The Dominion Securities Corporation

A. E. Ames & Co.
Incorporated

McLeod, Young, Weir,

held by savers.

Thus, the government in its bor¬
rowing and debt management op¬
or,

Harriman

well

confidence

else go to the wall.
time, the banks them¬ Treasury's major jobs today is to
assure
confidence in the bonds,
has been used, though this
thereby preventing monetization

much

.

the

meet

fear of shortages in goods

Copies of the Prospectus are obtainable from only such of the undersigned and other
dealers as may lawfully offer these securities in the respective States,
*

has

of
a
real
selling
by the private sector, leading to contingency
wave. Only since the outbreak of
the
familiar trade cycle.2 This
war in Korea has the sale of bonds
expansion could not proceed in^
exceeded
the purchases to any
definitely, however. Uneconomic
borrowing leads to over-expan¬ degree, and this was owing to a

Incorporated

May 8,1951.

rpnnirp—

require

reserves

page

27

woujd

not

the individual could sell
cash, and if bought by
tbe banking system have similar effects
as
those described in steps 4 ff.
7 Such as a country bank—the buyer,
and a Reserve City bank—the seller.

loans.

an

ppcppvp

grant the loan,
his seCurity for

or

however, ineligible

lowpr

iOWer reserve
Then, required

Continued

securities market, although its
absence is immaterial to this,
exposition.
■>
ary

fn

3eCt

ex-

individuals for
desire have no

assume

we

for the

The offer is made only by the Prospectus.

...

against

tending power of the bank. In the
®vent the bank owns no excess re¬
^ must liquidate other
holdings or borrow from the Fedf^al. Reserve. Since the midthirties commercial banks have
been well supplied with excess
reserves and have been able to
Purchase government securitiesand create new money-r-to severa* *imeiL
value of these re-

the

in

This announcement is neither

government

banks and

Sector

the

.the

of

have forced the Treasury to bor¬

Contribution by the Private

with

will arise.®

money

take the bond to his bank and

pledge it

that

no

has arisen.

not

The

is

ser-

deposits arising from the
investment, and reduces the future

Treasury Department). The
spendable funds in the econ¬

net

would

repre¬

or

selling the
security the holder desiring cash

a

process

them

cause

new

born. If the loan does
prove pro-

income

^

Stop 3—Instead

these funds to

pays

transfer

a

flows

a

its suppliers who can then enter
the market and bid for goods and

savings bonds out¬
($49.7
billion
in No¬
chased. Under such circumstances standing
vember, 1950), redeemable on de¬
the price level keeps relatively
mand, has presented such a po¬
stable (not necessarily at a con¬
tential threat throughout the post¬
stant level),
with real incomes
war
period.
Liquidation might
tending to rise steadily.
the

is

Consequently,

money.

money8, Which might otherwise not
have seen' the light of

goal
withdraw

Treasury

security the bank will
quite .willing to advance

much

sents purchasing power originated

by

the

the

from

the

Some

of

Govern¬

used in

goods

it finds its way into idle balances
pieces of or
highly
liquid
investments
paper representing the gold. The
which are cashed in only when the
second essential virture of gold is
owner or holder desires goods in¬
the limitation it places on the ex¬
stead of money. The diversion of
pansion of currency and credit.
of these funds from the current
The banking system's ability to
income flow to savings is antigrant creidts "with a stroke of
inflationary. But savings in these
the pen" puts purchasing power
quasi-liquid forms could be
into the* hands of the depositor.
highly inflationary i® a wave of
Under usual conditions, the money
liquidation into immediate pur¬
supply thus created oscillates with
chasing power—a rush into goods.

needs

the

reason

as

be

now

prices may

on

that

to the borrower and

ury

to lose confidence in the

the

pressure

For

money

can

the

vided deficits of

ment deficits does not reflefct ad¬

as would business expendi¬
A gold-backed, redeemable cur¬
tures originating
from business
rency1 is represented by a sub¬ debt.
stance of value in which people
Purchasing
power,
though
have
confidence, and to which
brought into existence, is not al¬
they can turn when political and
ways utilized at once. Oftentimes,

economic

of

money).

stream, reducing the

ditional

commodity - chgsing able to consumers. The manufac¬
money
supplies, at faster rates ture of war goods financed in
part
than these commodities are
being by borrowing, and which serve no
produced.
useful consumption desires, is the
Traditionally, the money supply best example. Not all government
was created by the monetization
expenditure originated by borrow¬
of gold (or* silver) and the crea¬
ing is non-productive, however.
tion
of
bank
deposits through These
expenditures
would
be
loans by commercial banks or the matched
by goods and services
central

3

ensue

*

in

creases

possible

of

them

money
in the

money at work.

expansion also nominally exists corporation. In acquiring the se¬
owing to the 25% gold reserve curity the individual (or his cor¬
required against the liabilities of porate counterpart) pays out cash,
which he might otherwise use for
the
Reserve
System.
The
ad¬

reserve

rate

new

increase

make in its

can

upon

restrained from lending

by the imperative of minimum re¬
achieve ultimate victory serve requirements. These forces,
at work concurrently, serve to halt
against those abroad seeking to
destroy our way of life. Military the expansionary drive and weed
the
deadwood—the
uneco¬
strength rests on an economy able out
we

won

of

of issue

turnover

if

as

(an

2—Now, the original holder
Stop 4—If the individual holder
the security decides to
liqui- decides to sell the security and it
journey date in order to purchase, for cash, lands in a commercial bank's
portthrough our economy. Of course, some object of his desire. He offolio we now witness the first
it can take short
cuts, or it can fers the security for sale and ancharging of the engine of inflahold over at certain
stops, but as¬ other individual (or his corporate tion. In
paying for the security
suming it will move steadily from counterpart)
purchases it.4 The the bank establishes a
customer's
one resting place to
another, we new owner gives up purchasing deposit. On the other
hand, the
can see how it
may become pro¬ power, the seller gains purchasing
investment uses up excess regressively inflationary in its ef¬ power; the balance of moneyserves, since additional reserves
fects
are

the bond

how sales of government securities to

The

date

same

created

Stop

a

Show
banking system create
commodity-chasing money supplies, which, unless matched by
production, widen gap between money demand for, and supply
of, goods and services. Call for pay-as-we-go taxes, and reduc¬
an

was

The Bond's Journey

There

Government Bond through the
the authors show how it either creates new money

be turned into

or can

of

much the

debt

on

Monetary Policy.

movement

can

the

governmental

operations by tracing the journey
of

.

Tracing the

of

the
commercial
Federal Reserve

By LELAND REX ROBINSON and HERBERT R. BRINBERG
Robinson

We

impact.

the

; see

economy

Vehicle of Inflation?
Dr.

weapon.

best

The Federal Debt—

10

The Commercial and Financial Chronicle

(1946)
I

■

■

■

'

;

•

.

■■

•

credit.

Upon Credit

of the last ten years is the extent
to which personal and corporate

Member, Board of Governors,
Federal Reserve System

savings have been allowed to
main

Chairman of Voluntary Credit Restraint Committee,

after out¬
„

that difficult factors relating to the money supply which must
be dealt with are: (1) the large gold and bank reserves that

,

make possible increase in bank credit and bank

deposits; and
(2) increasing rate of turnover of bank deposits that makes
available more cash for transactions. Says there has been
considerable dis-saving" recently that has contributed to infla¬
tionary pressures. Explains purpose of Voluntary Credit
Restraint Committee.

idle

in

commercial

re¬

Reposing there, with no
checks drawn, the monetary work
done by those deposits is zero. If
suddenly people and firms decide
to spend those funds, the money
supply begins to work more ac¬
tively, exerting a pressure toward
higher prices/and mind you, with¬
out

any

increase

bank

of

credit.

in

amount

beginning, I want to take
back to
some
elementary
a

you

economics.

Since

we

the' mechanics

with

dealing

are

of

we

inflation,

should

call

re-

that

an

increase

in

prices

(1)

supply

money

increases

more

rapidly

than

the volume of

business;
(2)

with

or

when the

greatly
increased.
As
these bank deposits went to work
for the

purchase of civilian goods,
price advances occurred as soon

of

turn¬

controls

as

These

a

ment in the behavior of bank de¬

annual

cities. By

Oliver

monetary

work done

S. Powell

the

by

money

considered

lar

of

it

the nation's business.

some

dollar.

That

created

event

immediately
increase

for

normal

leading

1945 this turnover had

in

did

16

that

so

a

dol¬

the

There

1920's.

was

increase in deposit turnover

and
sharp increase since the Korean
the

during
a

de¬

times was

deposits was doing only
the monetary work that

of

half

37

to

been reduced to

supply is greater than needed for
This story really starts back in
1934 with the devaluation of the

31

from

demand

of

turnover

point
the

War to

post-war

rate above 23

turnover

a

years,

of the bank credit pyramid; In the
next few years after devaluation,

However, if the own¬
ers of bank deposits were
to. use
these deposits with the efficiency
shown in the 1920's, prices could

world events caused

increase

gold

an

which

reserves

inflow

,

enormous

of

gold

are

a

into

in

the base

tremendous

the

United

substantially, from pres¬
levels without any
further

ent

increase

gold-

ments

bank

in

invest¬

loans,

ties

has

centered

largely around
the management of these large
gold reserves in such a .way as to
prevent
undue
manufacture
of
credit

and

an

inflation

in

com¬

modity prices. This holds true to¬
day in spite of the gold exports
in the last year and a half.
V There

gold

was

a

reserve

respite from the
problem
during

] thankful to

we were

very

for these reserves made
possible for the banks of the
States to purchase Gov¬

reserves,

tt

United

ernment

tities

deposits.

or

securities in huge quan¬

-

i

*'

*An

Factors

have

we

in

Supply

Money

Thus,

*

difficult

two

supply to
deal with: first, large basic re¬
serves which make it possible to
in

factors

the

money

increase the amount of bank

However, at the close

address

by' Mr: Powell ' at the
Luncheon Session of the 39th Annual
Meeting of the Chamber of Commerce of
the
United States,
Washington, D. C.,
May 1, 1951.

dis-saving

bank

manufacture

at

reserves

the whim of the holders of Gov¬
ernment securities.

.

I

of

it

possible

became

for the Federal Reserve authorities
to

their

cease

in

operations

a

pegged bond market and to change
to

support of an orderly Govern¬

ment

security market. The recent
reduction in prices of long-term

do

sult

Government

for
refer

not

have

later

use.

been

I

to

loans

and

ministration

Gov¬

dump

as

securities

for

mort¬

Market

for

many

of the Federal

have

account

two aspects of

Open

overlooked

the money market:

for

long-term

so

many years

that they have

deposits, and second,

it and bank
a

of

rate

turnover

deposits

of

which,
in

as

former

Both

bank

credit

and

the turn¬

deposits increased
sharply in 1950 and in the early
over

bank

of

months

of

insurance

the

funds

and

market is

trust

tirely

,

of

case

the Government

savings

are

Dis-saving

*

have

already mentioned the
use of savings for current expen¬
diture. Savings are in many forms.
I shall mention only two and in¬
dicate the relation of "dis-saving"
in those fields to the turnover of

en¬

level

of

financing

market

money

plans

post¬

are

Voluntary Restraint Program

.

To
moves

the

there is

monetary

and

credit

field,

thg Voluntary Credit Re¬

deposits* i if the; Federal Open straint Program. This program .is
Market Cpmmittee buys them, yit in essence'nothing but enlistment
the
creates bank reserves. Thus, wh£n of
collective horsesense
of
•

*

restraint

on credit we
has consider¬
able
slack—a potential
increase
in the turnover of money, gold
as

a

that

the

rope

•-

that, permit further cred¬
a high level of
liquid savings just one .stage re¬
moved from cash.
; i:
reserves

it expansion, and

v

The

field

*

monetary authorities have

made

important moves
of. action

to

in

their

counteract the

iinflationary effects of these fac¬
tors.

August,

(1) Last

the

discount

tion

has

not

brought

about

reduction in the
credit

consumer

the

served

any

total of

it

outstanding,
purpose

of

pre¬

'
new

real

regulation

estate

credit

dealing
was

im¬

GEORGE

F.BREEN

20 Pine Street

New York 5, N. Y.




savings,

need

to

ing.

be

out of

come

a

financed

Furthermore,

the

of

sources

by borrow¬

regardless

funds,

doubtful

very

corpo¬

large part would

to

it

the

Of

seemed

Voluntary

Credit

Restraint, Committee that
expenditures of this magnitude,
aside

from those
directly related
defense,
could
be
carried
through without exerting unde¬
to

sirable

inflationary

pressures,

v

made in
to meas¬

the

developments in the credit
The largest banks in the

field.

down

of

a

their

detailed

loans

national Committee

periodically the
to

the

rising

break¬

that

so

the

ascertain

can

cross currents due

volume

of

defense

lending and the desired decrease
in other types of loans.
You

all wondering what
the Voluntary Credit Re¬
Program is achieving. I

are

operation very long and much of

the

Reserve

System and

of

managements

all

to

have

the

and

ceed

of

are

eager

voluntary plan

are

the

been

other

organizational

Furthermore, two
important restraining " in¬

sue-, fluences came to bear at the same

lending all possible,

assistance.

has

and educational.

-

-

,

time, The top-heavy retail inven¬
tory situation began to be ap-

As one banker who is taking a
parent with the drop-off in retail
leading part in the
Voluntary sales before Easter, and the March
Program expressed it, "This is the and April declines in the Govern¬
greatest adventure in American ment and corporate bond markets

finance."
a

At

the

same

time. it

is

prodigious

exerted

a

seasonal

weekly increase in

porting

member

with the

the fundamentals of the Program

request

to

point where they not only give
complete cooperation but so

Board

they do not unwittingly ex¬

Credit

undesirable

issued

a

that

credit

tend

of

an

character. It is only by this com¬

understanding, that

plete

overcome

Senator

what

called

one

we

can

United States

point of the lender, is nevertheless
needlessly inflationary under to¬
day's conditions.
This program has
rated under the

tion

708

tion Act.

of

been inaugu¬

provisions of Sec¬

the

Defense

Produc¬

The authority to

set up

influence

on

com¬

mercial and industrial loans at

these lenders must be educated in

tneir

chilling

of

the

important
restraint was

most

to

week

by
to

March

with

issued

in

the

Restraint

Committee's

ing

on

From

The

Reserve

Voluntary

Program
9.

first

The

inventory

of

the

deal¬

loans

-

was

-

vantage

my

was

national

bulletin

March 20.

Chairman

21.

Federal

lending institutions *'

cooperate
on

re¬

ceased

of March

the

all

banks

point

national

as

Com¬

mittee, I

can attest to the tremens
dous release of
energy in the field
credit restraint made
possible

of

by the Federal Reserve Board's
request. I can also bear witness to
the spirit of unified effort and the
desire to be
is

evident

the Program was

_"on the team" which
in

all

parts

of

the

.

pernicious
effects.
Holders
of
long-term bonds instead of treat¬
ing those securities as true invest¬

take

part in the Voluntary Pro¬
For this purpose a letter
sent to some 90,000 lenders,

gram.
was

them

the broadest list available to the

equal to cash in liquidity. In fact

Federal Reserve Banks. The next

ments

came

to

consider

*

credit expansion.
However, I deem
it something more than a coinci¬
dence that the
sharp and counter-

delegated to the -Country and
among all groups of
Federal
Reserve
Board,
which lenders.
tools of inflation
Perhaps it is significant
practically unusable, for several body consulted with the Federal of the growing effectiveness of
months. This was the employ-; Trade Commission and obtained the
Program
that
commercial
approval
of
the
Attorney loans at
ment of open market operations,- the
weekly reporting banks
General of the United States for
which were devoted almost solely
during each of the last two weeks
1 in April experienced the
to maintaining a pegged price for the Program on March 9, 1951.
largest
The first step was for the Fed¬ .decreases
long-term Government securities.
for
any.
week
since
The pegging of the Government eral Reserve Board to request all April 19 to
26, 1950.
More de¬
bond market had deep-seated and Tenders in the United States to tailed figures now
available re¬
One

•

,

its work

Federal

restraining effect of Regulation X
since builders are still working on

legal limits.

estimates,
business
planning to spend

were

money would
rate

"competitive

upper

credit

According to

affair. The Board of Governors of

which though

(4) In
January 1951
reserve
requirements of member banks
were raised to substantially their

problem.

witn

the

desirable from the earnings stand¬

of orders received be¬
Regulation X was announced.

one

dealt

about $24 billion on plant
expan¬
sion in 1951. While
part of this

straint

drive" for business,

posed. It is commonly understood
appraise the

the backlog

2

Government
firms

kinds of credit which should have

the

fore

•

priority under today's conditions must confess that the national
and in that way to avoid Govern¬ Committee and the
Federal*Re¬
mental
regimentation of
credit, serve Board share in this
curiosity.
which, at best, must be a clumsy The Program has ..not been in

undertaking. Recall
that there are 14,000 banks, more
terrh money rates were allowed
than 400 life insurance companies,
to rise.
about
3,000 investment bankers
(2) The consumer credit regu-.
and dealers and many thousands
lation
was
reestablished. While
of other types of lenders. All of
the reestablishment of this regula-:
raised somewhat and short-,

marked

No.

for plant expansion.

success,

Federal Reserve Banks

Moves to Counteract Inflation

its number

was

all kinds of lenders to sort out the

try to tighten the money sup¬

that it is too early to

?

this

Bulletin

"

(3) A

Latest Report's on Request

to

Restraint Program. The first bul¬
letin dealt with the
subject of in¬

Reserve Banks

of

toward inflation control in

bank

must buy the bonds.
buys them, it creates

the / picture

complete

someone

find

two

United States have
already begun
reporting weekly to the Federal

If

with

(American Television & Radio)

relation

issued

credit' problems in
the Voluntary Credit

on

ure

the

reasonably firm ground
higher level, it is natural that

a

ings,

tober.

A. T. R.

Committee has

bulletins

are

sold

venting any further expansion in
instalment credit since last Oc¬

U. S. Thermo Control Co.

tional

Progress has also been
collecting better statistics

many

redemption date to ob¬
for current spending
for other. employment of sav¬

has

UDYLITE CORP.

the

until

funds

a

from

rates. Whenever rates

poned.

before the

or

Considerable progress has been
made in other directions. The na¬

reaches

ligation and sells a new security
obtain the redemption funds.
If banks buy the new securities,
bank deposits are created. If other

tain

lending fields: commercial bank¬
ing, life insurance and investment
banking.

at

redeems the ob¬

securities

aside

rising,

bonds,

to

Government

important factor

an

money

rates of the Federal Reserve Banks

1951.

rection of movement in the money

savings

companies,

pension
companies.
;

were

I

bought

banks,
In

¬

regional committees to deal
problems
in
three
major

with

re¬

a

for- First, low rates had been in force

earmarked

refer

been reluctant to

supplies of funds

far-"

had

other
types of credit have been reduced.
Skeptics of this change in the ad¬

tax

to

has

bonds

the market and

on

gage

usually
current

more

and other short-term

that

by

The national Committee has set
up

•

Recently,

them

is

cred¬

to

taxes.

of

obligations,
used • for
temporary employment of funds

ply

Difficult

Two

provide for money for
war, over and above the amount
provided out of national savings
and

4

has been demonstrated
years, can grow sub¬
have such large gold
stantially above today's
levels.

'World War II. In fact

caused the Federal Reserve Banks

Government

of

ernment

we

1

From that time on,
■the problem of monetary authori¬

spending.

turns a year.

States, adding further to the basic
reserves.

This

level, the Committee decided that

kind

into

notes

Reserve

price.

same

inflation. Holders of those securi¬

cash, or
bank deposits,

into

the

at

ventory loans. In view of the rapid
increase in inventories, particu¬
larly at the retail and wholesale

conversion

bonds

Banks

a

fed¬

ties have

Another
the

Federal

of

by tne

eral Reserve Board.

that it could

sure

sell them to the

by individuals- been built into the financial struc¬
posits. This was the fact that the- as a means of employing their ture. Any change to a higher level
turnover
of
bank
deposits had- savings: e.g., savings bonds. I also of long-term money rates forces
declined steadily from the 1920's« refer
to
Government
securities far-reaching adjustment in finan¬
until
1945.
In
the
1920's
an
.bought with the savings of others- cial commitments. Second, the di¬
posits

where

;

-

advances
would
been much greater except
little-understood
develop¬

have
for

removed.

were

price

of money
increases to a

over

bank

investments and

bank

market could be

appointment

Committee

prices in the last ten

the rise of

the nation found itself

war

deposits

occurs

when the

rate

of the

fixed rate and the

a

the

was

reaching effects in the control of

chain

months.

As

the market at

step

national

large part in

This

events has played a

*

the

they were the equivalent of cash
so long as they could
be sold to

to

bank

accounts.

of recent inflationary trends, points out

causes

\

.

The simplest illustration is the
idle bank account. A phenomenon

By OLIVER S. POWELL*

lining basic

the volume of bank

and

money

Restraints

Thursday, May 10, 1951

.,v;

veal that defense loans are
rising,
and loans to
carry raw commodi¬
ties are falling.

However, loans to

retail
to climb.
carry

inventories

continue

.Volume 173

Number 5010

.

.

The Commercial and Financial Chronicle

.

(1947)
next

The Ontlook lor High-Giade
Bonds and Prefeneds
RALPH A. BING

By

Sutro and Co., San Francisco

year

the

moreover,

deserve

attention.

How¬

I find it hard to deny that,
in case there is no major
war, we
may be headed for a temporary
ever,

recession

two

Hence

or

three

prime bonds, high grade preferreds, and

com¬

L Pulliam Celebrates 1

The

capacity
basic, in¬

El Cinco de
LOS
rence

the

dubious

attempts

which

and/or

effect

of

President o*

def¬

above

taxes

Weeden &

such

lift

the

might

650

Such

a

birthday

possible

adjustment,

5 with

the

months,

two

past

dump their holdings
ket.

the unpegging of the Government
bond market, and the Treasury's

exchange

mar-

Although
mortgage
financing
of a new (non- will decline from last year's peak
transferable) level, the combined effect of •rec2%%
issue, ord investments in new plant and
1980, for the equipment by private industry,

offer

and

outstand-

two

have

suited

re-

in

a

general
ward
m

up-

adjust-

e

resumption

of

and

are

peak

ferred

are

d

o n

Ralph a. Bing

creased

the

monetary

auth-

same

in

are

a

position to

enforce a low "ceiling" on the
Price of credit, and they are likely

by
one-

be

depress bond prices to

the

illustrations

considered

given further below:
The

bulk

the

of

the structure of
est rates

to be

seems

April

on

undesirable

serve Board.

accomplished

for the time being. In view of the
fact that the new 2%s, 1980 (first

callable

an

extent

by

the

adjustment in Treasury and/or the Federal Re-

long-term inter-

1,

•

,

view, the steps taken by

my

our monetary authorities make it

to

de¬

Defense

shock-mitigating

old

does

and

not

carry

a

now

All

in

danger of focusing toe
clusively on the dangers of
flation.

of

counter-inflation-

new

ex¬
Lawrence

in¬

S." Pulliam

capacity expan¬
stimulated
by
generous

emergency

top of

authorizations,

industrial

as

or

lines;

industries,
much

comes

1940-50 expansion that

a

in

number

a

capacity
75%

in many

more

be

as

prewar

by

may

above

of

the end of next year.
: It is
true that, in the

To

not

tional

come

too

of

recession

unpredictable, and the

mist's

crystal

ball

enough to embark

is

few

tirely

17%

above

higher

1940,

may

(always

and

about

that living

remain materially
barring a major

and

full-fledged

that

the

war

investor,

sight of this
gency during the current
booming defense business
flation.

.

p

meeting of

the

following
John

Douglas

officers*

H:

T.

G.

Pell,

Johnson,

retary; and Howard F. Worthato,
Treasurer.

boom—

New York Stock Exch.

especially

lose

-

Vice-President; Jabez Wood, Sec¬

present defense boom merges
a

the

Chairman;

years—unless

of this

into

annual

elected:

were

prophecies. All I wish to
is that certain developments
point toward the possibility of a
a

the

America

fine

range

in

Los

Investment Counsel Association ojC

such longer-

on

the small investor, should not

average

are

econo¬

not

long-term uptrend in capacity was
greatly slowed down; it is also
true that by 1953 the population
country will

At

to

say

the

in

way

Association Elects

clear: This is

a

from now; politics

years

deflation

'30's, the

it quite

forecast

na¬

holiday-

*

make

Los
wero

Investment Counsel

securities, i.e., prime bonds

a

fire¬

in

Mexican

Thus,

and preferreds.

post-

of

is

not for Larry,
however, as
May 5 is a big

counter-inflation¬
commitments should not be

stable

the

Angeles

piay

be

mother

works

is distinct enough not to be over¬
looked by the investor who

adjustments achieved by war).. Yet, it seems to me that
direct cash redemption privilege the ^act that, at their new levels, the tremendous increase in pro¬
(although it can be pledged as marketable . long-term
"govern- ductive capacity, distorted by war
plus
the
current
collateral, or converted into, an ments" now held by investors can preparations,
marketable

elements

party.

always a guest.

existing in our economy. Yet, the
possibility of such a development

•

The

now.
wave

likely that they consider the opti- standards

is not mum-effect

1975)

for

supply more goods for
civilian economy than it is

aggregated 50%

to revert to similar policies if and„
when market forces threaten to

: from

ex¬

time

on

fifth to one-half of 1%, depending
on maturities and quality, as can
seen

of

additional

to

according

past that they

in-

about

t

unless

essential

non

orities have demonstrated in the

yields

have

1952

subjected

Second,

sion,

time.
However,

stock

markets.
B

ratio

restrictions.

the

in

record

a

into

penditures

end
Reserve
System,^ interest tjie
high ♦ grade rates could well continue to trend getting
Korean
bond and pre- up
over an extended period' of
yields

to

gross national product,
likely to continue at this

level

fense

of

without intervention by the Fed-

of

t

n

early

an

equal

his

His 79-year-

Federal deficit financing, is likely Mobilizer Charles E. Wilson and ary
celebrated in a big
qualified
observers,
this over-done, that is, they should not Angeles and Mexico.
to keep demand for long-term other
loanable funds above the level of country will, by 1953, be in a po¬ be carried to the point where the
non-bank supply. Thus, if left to sition to fight an all-out war from investor finds himself without a
the forces of supply and demand, current production, and at the reasonable
portion
of
(dollar)

ing2V2S, 196772,

of

year,

7.7%

the

on

t h.

May
huga

a

dinner

many

During

Co.,

u

o

celebrated

should
it
develop, wpuld have
First, private capital outlays for every chance to be much milder
new plants and
equipment are ex-, and shorter than the one in the
pected to reach $24 billion this early'30's, because of the

possibility of mild business recession and deflation ahead.
-

S

Spring Street,

breaking point.

point is in need of

Mayo

ANGELES, Calif. —Law¬
S. Pulliam, resident Vice-

expenditures, quite apart

brief elaboration.

stocks. Cites

common

current

icits

excess

in various

up

dustries.

cludes investor should maintain "reasonable" balance between

goods

compensate a
sharp decline in
capital outlays by stepping up its
from

building

con¬

consumers

the Government would hard¬
be in a position, by 1953, to

ly

penditures and of

Mr. Bing maintains bulk of adjustment in long-term interest
rates has been accomplished, but because of action
by mone-

for

war,

from now, as a result of a
sharp contraction in capital ex¬

years

tary authorities rather than natural market forces.

mand

inflationary implications parable to the one experienced at
policies, organized pro¬ the end of the last war will be
tectionism,
and
strong
labor building up.
Finally, unless at
unions

of welfare

business

Members, New York Stock Exchange

two;

or

secular

11

en¬

Weekly Firm Changes

contin¬
years

and in¬

'

has announced the

'

Exchange
following firm

changes:

ary rate

Arthur W. Sesselberg, member
of the
Exchange, retired from,
partnership in Auchincloss, Park¬
;

Charles L. Lehmann

.

Charles Lamson

Lehmann, part¬
er &
ner
in Lehmann &
Redpath, May 8th.
Verace, New
equivalent amount of marketable be currently cashed onfy at a loss, record level of capital Expendi¬ Ybrk
City, passed away at the age V The Charles Hayden Founda¬
tion retired April 30th as a limited
five-year 1 xk% Treasury notes), and that in their opinion a fur- tures, contain some potent ele¬ Of 58 after- a
long illness.
unrestricted
similar
maturities tke** material rise in long-term ments for a possible deflationary
partner in Hayden, Stone & Co.
should sell at a
Caroline C. Towner was admitted
slightly lower rates might demoralize the bond adjustment in about three years,

J.

V

unless
there
Stanley Davis
develops a
major
to limited partnership in the firm
approximately
2.70%, market and thereby accelerate inJ.
selling more or less in Nation rather than limit it. If the war. Such a possibility is height¬
Stanley
Davis, connected May 1st,
/,
•»
ened by the fact that, under the with Shields &
Caroline C. Towner retired from
Sine, according to maturities, etc. Treasury
and Federal Reserve
Co., New York
r*
>'
/Board think along these lines—as presently indicated pattern of our City, passed away in Bermuda limited partnership in Kalb, VoorTreasury Opposition to Further
I assume they do—they would ob- defense economy, no backlog de¬ where he had
his & Co. April 30th.
gone on vacation.
/
Rate Increase
viously arrest any substantial in-

yield

of

with others

-

.

.

It

■

unlikely

seems

that

Treasury would easily
•early

further

because

such

step

a

the

agree to an

increase

in

would

rates,
raise

crease

of long-term

the 2%%

above

rates

area.

The implication for the investor
is

that

he

should

be

soon

This advertisement is neither
is made

able

the cost of the prospective deficit

again to give prime consideration

financing,

to

and

moralize

the

bonds

a

to

might

de-

even

investors'

either

rowly

defined

long

as

side

of

a

rather

It

course:

be

other

investments, but

the

values'

.

,

investors

.

bond

,

bal-

v

.

a

100,000 Shares

interest

word about the

Tennessee Gas Transmission

seems in order,

porarily
to controls,

,

(Par Value $100

"/■

per

Share)

_

con~

•

camouflaged
by
price
remains strong for the

Price

$102

per

Share

Plus accrued dividends from April 1, 1951, to date of delivery

1

1

Company

5.10% Cumulative Preferred Stock

tinued inflation, partly and tem-

,

nervous

in

Ahead?;
the cJ?1nger

declines rendered

sufficiently

New Issue

prime

Temporary Business Recession

for

<

.

rise

of

dollar into "real

same

danger also could emerge if more
cxtensive

further

this connectioin

existed

profitably swapped

holdings

rates in the foreseeable future. In

nar-

„

could

between

stantial

»
>
i- fab
by the Federal Reserve above par,
t

reasonable

an offer to sell nor a solicitation
of an offer to buy any of these securities. The offering
only by the Prospectus. This is published on behalf of only such of the undersigned
as are
registered dealers in securities in the respective States.

bonds, high grade preferreds, and
common
stock
equities without
worrying too much about a sub-

"governments," pegged

as

a

ance

It

should not be forgotten that the
danger of an undesirable monetization of the public debt lures
on

maintaining

in

degree.

dangerous

faith

j

BOND YIELDS

Restricted U. S. Governments—
214s, June, 1959-62
2!/2S, December, 1967-72

3/2/51

^

5/1/51

2.17%

2.64

1.83%

2.14%

2.28

) Unrestricted U. S. Governments—
214s, September, 1956-59
214s, September, 1967-72
1 Corporate Bonds—

2.48%

2.44

2.47

Copies of the Prospectus may be obtained from any of the under¬
signed who are qualified to act as dealers in the respective States.

Stone Si Webster Securities

AAA Grade (Moody's)

2.69%

*2.89%

Baa Grade

3.18

White, Weld Si Co.

Corporation

*3.38

(Moody's).

*As of April 26, 195L

;

,

.

•

.

Blyth Si Co., Inc.

-

j A corresponding movement has taken place

,

ferred yields, as illustrated by these figures:
PREFERRED STOCK
•

•

•

*

•

$3.80 Westinghouse Electric
*To May

1, 1951.




Glore, Forgan Si Co.

Ripley 8i Co.
Si

Kidder, Peabody Si Co.

Incorporated

Lehman Brothers

•

Smith, Barney Si Co.

Union Securities Corporation

'*

High

$7 American Can
$6 American Tobacco
$6 Eastman Kodak
$3.75 May Department Stores

Harriman
Harriman

Goldman, Sachs 8i Co.

Approximate Yield
5/1/51
*1951 Range

»

The First Boston Corporation

in high grade pre¬

,

Low

4.05%

4.10%

3.78%

4.28

4.32

3.89
3.29

3.62

3.69

3.93

3.96

3.70

—3.82

3.86

3.65

W. C.

Langley Si Co.
-

+

May 9,1951.

Merrill Lynch, Pierce, Fenner Si Beane

Paine, Webber, Jackson 8i Curtis
•

;

The New York Stock

of

>

12

The Commercial and Financial Chronicle

(1948)

like

should

the

Inflation, Spending and Taxes

of

U. S. Senator from Illinois

a trained economist, declares that
inflationary control is to prevent
undue expansion of private loans to business and to avoid
governmental deficits. Though stating individual price controls
may be psychologically necessary, they are ineffective.
Re¬
views recent bank loan expansion and points out its inflation¬

Douglas, speaking

fundamental

problem

as

in

impact. Says it is essential that

balance and advocates cut in

fundamental

The

cause

increase in the general

of

an

price level

is, of course, an increase in the
quantity of money
and credit

pretty
largely upon the supply of gold,
was

basis for money,

the

fered for goods

money being redeemable upon demand, in gold, and in turn, money
furnished the basis for • the ex¬

relationship

pansion of credit. So thirty years

is

which

in

the

to

goods
of-

is

which

gold supply which fundamentally
changes in the price level.

for

fered

caused

If we

money.

have

at least, or forty years ago, it
could be said it was changes in the
ago,

quan¬

of

tity

of¬

But now,

million

a

fundamental element is the quan¬

a

tity of bank credit which is loaned

and

money

of course, the currency

has been cut loose from gold. The

of

dollars

units

is

ing

this

last

billion.
So those

the

^

virtually

of you who think that

is

government

to

private

of

tures.

this

expansion

great

loans.

It

turning

would

all

on

be

of

bank

precisely like

the faucets in the

kitchen, letting the sink overflow
with water, and then trying to
mop
the water up with a few

money

offered

and credit which is

small pocket handkerchiefs.

very

The

fundamental

problem,
therefore, is to prevent the undue

the

for

goods;

level will rise to $1.33.

question

the price

When it borrows money,

So it is

goes to the banks.

a

the relationship be¬
quantity of money and
credit on the one hand, and the
quantity of goods on the other.
of

tween the

about

deficits. .It

is
to

like

that

that

I

When I say this, I am speaking
of the general

of

individual

net

operations

have

been

force

stabilizing

a

the

of

government during this last

The

question

comes:

*An
nual

naturally

then

money

address

by

General

Meeting

and credit? In

Sen.

Session

Douglas
of

the

at

39th

the

the
An¬

Chamber of Com¬
merce
of the United States,
Washington,
D. C., May 1, 1951.
of

,

far

banks

move

panding

up

their

bank

is

All

together

loans, so
placed at

in

the

result

public deficit
in

the

is

we

quantity

that

the

get

of

an

a

year

force,

sector

of

our

place, let me bring

reassuring report

governmental finances
Last year

then

fiscal

at this time
a

10

This

down here,

I

and

came

looked at the last

port,

morn¬

Treasury

open

a

the last daily Treasury

of bank

demand

deposits

the member banks is

one-sixth.

economy

larger loans.
of the required

Increase

reserves

the

by

quantity

billion dol¬

a

in the field of private loans?

Between June and

was

demand

a

for

banks

was

loans

in

modities.
loans

to

of

approximately $8

it

was

made

policy

of
and

Federal

of

re¬

of

and

credit

of

circulation

possible

the

outside

in

Congress

.

and

which

increase

of

Congress believe
that
this
policy of the Federal
Reserve System was wrong, that
it

increasing bank
feeding the

was

and

hence

inflation.
banks

We

stop

fires
that

believed

should

reserves

of
the

purchasing

government bonds, or that Reserve
Banks
should
stop purchasing

government

bonds, in such un¬
quantities, and as a re¬
hammering to which

limited
sult

of

the

the Reserve Board has

been

sub¬

they finally sometime in
March stopped this policy of un¬
jected,

limited support

of the open mar¬

ket.

com¬

the Treasury.

Reserve

billion,

expansion

prices which occurred.
Some of us both in

people

supply of bank
largely because of the
the
Federal
Reserve

Board

Re¬

the

combined with the increase in the

The

But the

rose

this

velocity

bank

purchase

raised

try to dampen down
the lending capacity.
But even
with that, there was an increase

increased demand for

an

order

then

ratio to

serve

going to
rise, and they wanted to get in on
the ground floor, and
therefore,
there

increased. /The

were

Banks

serve

The

result

decline

in

bonds,

about

2y2

been

price

which

points,

a

of

slight

govern¬

has

but

Continued

until

Board,

has

the

ment

fallen

there

on

has

page

38

re¬

have

plus of approximately $4

The fundamental thesis which I

the

to
of

were

make

ratio

rough

loans

member

reserves

lars, and you expand the lending
February, bank capacity of the member banks by
and
demand
deposits in¬ $6 billion. That is precisely what
creased by approximately $8 bil¬ happened.
» ; •
lion,. a rise; in; demand deposits /The reserves:of the member
and

port, and that shows that for the

Thesis

to

reserves
or

The

more

re¬

current fiscal year we

Fundamental

deficit for

of about

year

so
are

ing, just before I

goods, and

able

The

What about the situation in the

banking

of course, because
believed that prices were

months, of $2 billion.

rise in prices.
A

as

the

increase

money

bank credit offered for

the first

the government had

a

then

hold down prices rather
force to expand prices.

a

loans,

Balanced,

somewhat

concerned.

ex¬

that no
a
disad¬

through

*

In

vantage compared with the others,
and

How do you alter the total

quantity of
Second

price level and not

.

the

draws.

the

wide open,

arms

banks.

with

banks,

to

than

There

Federal Budget Temporarily

it largely

The banks lend
a

one

prices.

about them?

money.

by giving to the Government a
checking account against which
Government

in

presented

expansion of private loans to busi¬
loans
ness and to prevent governmental,

should

industries and to Government.

being compelled to borrow

bond

every government

was

member

the

So

,

do

tity of

that

market. It held its

currently

speak briefly this from
$85 billion to $93 billion,,
of goods, the
morning.
I- \ '■' or an increase of about
Upon the ratio of the quantity of
10%.
"I
average
price
First, however, may I call again
private loans and public loans,
'.
Interestingly enough, the veloc¬
of
the
goods
and the quantity of
goods and to your attention what has been ity of bank credit also increased
will, of course,
services
offered,
depends
the happening in the ten months since by about
10%, so that the active
be one dollar.
Sen. Paul H. Douglas
the
Korean
Communists, insti¬
general price level.
supply of money rose by 20%.
If we increase
gated by the Russians, attacked us The fiscal
As you all know, banks, when
output rose by 10%.
the quantity of money and credit
last June. The level of wholesale
they make loans to businesses,
to two million dollars and keep
Interestingly enough, if you di¬
prices has risen by about 17%;
vide the 120, the relative
the quantity of goods constant at grant to businesses a checking acsupply
the cost of living has risen by
count against which business can
of active
a million,
the average price will,
money, by 110, the rela¬
about 7% in February, and I sup¬
tive quantity of
of course, increase to two dollars, draw, and if all the banks expand
physical goods,
pose the average of retail, whole¬
the banks
and we will have a doubling in their loans together,
you come to
a
theoretical price
sale prices, and the cost of serv¬
become
level of 110%, which is
the price level caused by a dou¬
manufacturing agencies
probably
ices, has gone up by about 10%. the
bling in the quantity of money and producing credit, increasing the
average of the general price
In these last two months, as you
level.
In other words, what has
credit without any commensurate quantity
of
checks
which are
are well aware, however, this in¬
increase in production.
drawn; but if this is not accom¬
happened since last spring has
crease has virtually stopped, and
roughly borne out the theoretical
You can work out all kinds of panied by an increase in the pro¬
we are for the moment on a sunny
duction of goods, the inevitable
analysis which I gave in the first
permutations and combinations of
plateau; but the question is, how part of my speech.
result is an increase in prices. This
that
relationship. For example,
long will; we be on this plateau,
is private inflation.
Hf
<
'
" '
'*
......
suppose you do increase produc¬
and what are the prospects for
Why Bank Loans Have Risen
tion by 50 per cent to a million
Public inflation is caused by the
the year ahead, and what can we
Why did bank loans run up?
and a half; you increase the quanGovernment operating at a deficit,
million

sometime in late February, bought

$3

about

by

year

.

/

the old days, this depended

Gold

this

•

Federal budget be kept in
expenditures, particularly outlays
for river and harbor improvements and hidden subsidies. Wants
economy in military outlays, and sees need for more taxes.
ary

from

draw

Thursday, May 10, 1951

.

.

op¬
credit or
governmental
deficits, increases erating in the red can take confi¬ and when the banks, insurance
faster
than
the
production
of dence from the fact that we are companies, and to some degree the
private holders of bonds, would
goods, the inevitable result will be for the moment in the black.
This good showing is partially offer bonds for sale, the Federal
a
rise in general prices, and that
it will be impossible to control caused by the increase in national Reserve Banks, under the direc¬
this increase in general prices by income, which gives a larger tax¬ tion of their Open Market Com¬
able base.
It is partially caused mittee, would buy at a fixed price,
individual price controls.
I am not denying the necessity by the reduction in civil expendi¬ something above par, and at an
interest
rate
on
tures which the Congress effected
the
long-term
for
individual
price controls. I
last year, and for which some of bonds of 2V2%. They bought dur¬
think they are probably necessary
us think we have not received as
ing this period well over $3 bil¬
to reduce speculative increases in
much credit as we should have lion in bonds.
commodities.
I
thinks they are
What happened? As they bought
received; and it is also caused by
probably psychologically neces¬
the
these bonds, they gave a credit
increased
taxes
which
we
sary, but I do most solemnly want
levied last fall,
on the
books of the Federal Re¬
and which has
to
warn
the public that merely
brought income up more rapidly serve Banks to the member banks.
providing individual price con¬
than the increase in war expendi¬ They
created
reserves
for
the
trols will be ineffective if we have

expansion

By HON. PAUL II. DOUGLAS*

Sen.

to

following: that if the quantity
loans, resulting either from the

.

From

a sur¬

Washington

billion.

We have cut the public debt dur¬

Ahead

of the News

By CARLISLE BARGERON

This advertisement appears

only

as a matter

of record.

Mr. Truman's

speech of Monday night, along with the testi¬
of General Marshall before the joint committee session to

mony

answer

MacArthur, presented

people.

50,000 Shares

It

fire

too many guns

one

will

that

seems

become

amazing picture to the American
misstep on our part—if we

in Korea—the Russians

annoyed

and ruin to this

an

the slightest

and

bring

destruction

country. Yet the very men who

counselling such a step-gingerly policy,
overnight took up war in Korea and are boldly
readying Western Europe for war. There are
are

Creole Petroleum Corporation

no

risks

tion

Capital Stock
Par Value $5 per share

Price $82,125 per

share

of

involved in this, but the contempla¬
doing anything to bring the Korean

fiasco

to an end is horrible.
We are, accord¬
ing to this presentation, buying time by kill-,
ing a lot of Chinese in Korea, but not a one
in Manchuria, and by daily telling the Rus¬
sians, you just wait until 1953 and we are
going to put you in your place.

Nothing wouid suit Stalin better, we
being told, than to get us involved in a

/

•••#;# /<

are
war

with China.

By some strange and utterly unexplainable reasoning we are not so involved

new.

Carlisle

feeling in the Pentagon is that the Chinese

their last

Bargeron

.

...

The

offensive, and

on

have made

the diplomatic side, there is

a

reason¬

able hope that a Korean settlement may not be

Blyth & Co., Inc.

get

some

General

light

on

Marshall's

what

this

long off. You can
settlement would likely be from

carefully worded statement

before

the

joint

committee session that this government's
1

-

May 10, 1951

turning Formosa

over

shoot her way- into the

to

China




of

United Nations.

policy, one will observe, but
i?*

or

voted in the United Nations.

we

can

'

policy is still one of not
permitting Red China to
This is

and
*

our

government's

probably will be out-'
,

..

,,

Volume 173

Number 5010

.

.

The Commercial and Financial Chronicle

.

13

(1949)
»

fear in

of

Over the Hump oi Production
In Two Years!

Nine

Washington. Mostly
citizen, sometimes as

about

people

people
sights, includ¬
ing the dog¬

to

come

the

see

our

of

basic

ernment

I

Economic Stabil¬

as

am

wood and the

But

inaptitude

of

central

gov¬

completely with
personal—and so in¬

so

of

you

Sure, we can throw up a dam
against inflation, and we're doing
it. But the solidity of that dam
depends
on
the
sandbags
that
private
citizens
pile
into
the

here to

see

confusion" in
full

bloom.

chinks through voluntary decision.
I
need
not
remind
you
that

weren't

every

A.

Johnston

But

your

ex¬

perience isn't too unusual. It hap¬
to your father when he

pened

to

came

to

grand¬

your

That's
lion

happened to

If

reminds

me

of

old

an

news¬

the

can't

It

other

1901,

a

title lines for editorials. And

he

liked

them

them

much

so

standing

in

up

afterwards.

ever

he

type

slugs

used

He

them

often, for he said they fitted al¬
every kind of purple prose
felt

like

putting

in

the

"Wanted

in

slug

Washington

—

a

Some

For

never

read

we

of

now

to

seem

and

we've

been

he

For

with

thusiasm

the

of

about

If

unrestrained

confusion

in

•Now—a

this

You

we

can

meeting in

ample

tion

en¬

and

a

defense

before

he

And—God

why there

emergency

lock

the

More

later—in
of

year

a

speaks—and

Washington
policy for any
exactly suited the

willing—we

loaded

than

never

millions

of

scoop

to

and

millions

of

case

the

Or you can

packages
to

buy

can

fear

packages,

give
You

get

short-

swivel-chair

sweats.

business

the

are

prize

prospects for the fear salesmen—
the

organized

the

fear

unorganized

salesmen

fear

and

salesmen.

They have staked out the business
community

not

well,

do

you

think

our

which they haven't

—

wish

perils

of

—

could

the

blithely

as

a

as

live by the

you

labor's got

So

they

secret gim¬

a

we

threw

up

a

dam of price and
wage controls.
And the rate of the rise in prices

checked. Panicky fear-buying

stopped.

leveled
But

off
as

that

middle—and

The

into

we

agency, we are

mick; big business is whetting the
axe for little
business; the farmer
is playing both ends against the

economy

better

look

has

balance.

ahead

in

But

pects

$ou
for

salesmen

are

not the

Only

pros¬

a
fleecing. The fear
play the labor market

so

far

flash-flood
mean

we

of

have

had

compared to what

only

a

And

inflation.

I

we

could

early winter without the
..gternest kind of steps to counter¬
act it. v,

;v*

a

new

and

cooking up
dastardly plot against it;

the farmer gets told

in

cahoots

the
adds

that labor is

with; business

squeeze
up

Rising

farmer

is told that business is

on

him,; and

to put
it all

to exaggerating separate

interests and ignoring common in¬

will

be

really rolling. It will be

tity—aifd in such quality—to meet
test of ouf security.
;.

any

Barring all-out, sudden war, we
high pitch of pro¬

will reach that

duction

in

plans

are

what I call

aiming dead ahead at
"S-Day" for "Security
-

multitudinous

to

real

they

I

in¬

be

can

we

not an

make

can

million

1953,

than in

at

the

a

address

by Mr. Johnston, at the
Meeting of the Chamber of

all

going

rec¬

rid

it

now—that

agency

my

shop—the

up

of controls.

I'll

more

re¬

everybody with
controls

off

a

proposal

the

books.

longer

am

we

000

and

soul

with

to

a

By 1953, we ex¬

year.

it

make

at

the

rate

am

here

come

1950.

in

Then there's electric power.

kilowatts.

the first quarter of this year. That

524,949 Shares

Within

three years, we

Continued

any

on

page

of such Shares.

r

,

Rights, evidenced by Subscription Warrants, to subscribe for these Shares at
$13 per Share have been issued by the Company to holders of its Common Stock
of record May 2,1951, which rights expire May 18, 1951, as more fully set forth
in the Prospectus.
.

During the subscription-period, the undersigned has agreed to use its best efforts
to form and
manage a group of securities dealers (Soliciting Dealers) to solicit
subscriptions and to effect the sale of shares of Common Stock, as more fully set
forth in the Prospectus.

The Prospectus may be obtained from the undersigned only
in States in which the undersigned may legally distribute it.

j

there

are

of alarm. and

today
to

sell

to

sell

Blyth & Co., Inc.

you

you

faiths-

too

many

peddlers

too

many

salesmen

May 8, 1951.

To¬

capacity is 67 Vz million

(Without Par Value)

here today to

of

1,300,000 tons a year. And that's
60% more than the output as of

Common Stock

the

Today,

make it at the rate of 800,-

tons

pect

aluminum.

here's

can

y

"

Long Island Lighting Company

necessary.

heart

108

than at the peak

more

the

can

of

of World War II.

toss out controls—

can

courage—and
for

! Commerce of the United States, -Washing¬




rate

year

117 million tons. That's 22

million tons

offering of these Sharesfor sale, or an offer to buy, or a solicitation of an offer to buy,
The offering is made only by the Prospectus.

y

steel

today. By
expect to make it at the

we

rate of

it

tons

SUBSCRIPTION OFFER

sell you fear.

life-giving

V

"""

:

capacity has already boomed. We

will have

we

before—many times

sooner

So, I didn't

all

I

ton, D. C., May 2,1951.,..,

,

magnitude of what we'll
have on "S-Day" leaves you sort

day, our

more

Our

years.

stabilization

The

the first quarter of next year, the
rate of national income will be

billion dollars

two

and

Day".

June

37Vz

about

mobilization

augmenting the national purchas¬
ing power on a lavish scale. By

Freedom First.

the

.

And

headwaters for a new
market, too. In inflation flood are churning to¬
these markets, business becomes ward us from
upstream. By Christ¬
the big, bad
bogey man. Labor mas time our defense production
and' the

in the latest models—in such quan¬

of gasping. Here's steel. Our

my

painfully conscious

have by

is you!

woe

tanks and planes, and
sewing kits and canteens,.
importantly, we are go¬
ing to fatten out the facilities to
make thpse things in a hurry apd
and

guns

But more

wave

waters rolling underneath.

are

down to

cost

higher and higher—from pinnacle
to pinnacle—to escape the dan¬

going to stockpile acres
military gear of every kind-

of

of

January,

are

fabulous proportions and augment
its potential output even more. •

•

in

dovetailing.

are

stock is flowing in.

raw

The
warming up. We are
going to augment the actual output of our national workshop by

and

over

When Korea touched off

So

two-year security plan.

,

briefly:

gerous

a

machines

ourselves

skip

inflation

it

downright stupendous.

blueprints

The

have. But I can't. Not and
live with the facts of it
every day.
Let me retrace the
story, very

was

risk.

The

they

was

you

to call it

a

We

I

simple—if

are launched on a
two-year
production expansion plan. I like

bust.

a

quite

Two-year Security Plan

they

now

producing

so

We

depression.

which they won't—and
foresee
us

\

really

second

thing of beauty. They said controls
would put the kibosh on
produc¬

the most profitable

calculated

It's

weren't

And—gentlemen—the inconsist¬

the most vulnerable

of

in the cards?

long-range

ency of these peddlers is almost

as

market, because

peddlers have got anything/ What's

so

government is trying to sell now?
is trying to sell the fear of a

and therefore

tell

that
a

fear-buying last summer, the
of living became a
regular
absolutely guaranteed fugitive from the flood, climbing
chronic ulcers.

you

in

Now let's examine the prospec¬
to see if these goose-pimple

tus

It

mild

a

buy fear in long-range

—

in

in

and

pad¬

of

add

Annual

left

primed

hasn't

salesmen

there's

theme of this 39th Annual Meeting
of the National Chamber." I Put

decisions—and

•An

may

day in this country.
of multiudinous

dividual

39th

You

range

gambling den of

that,-

repeat

write

are no

of
are

*

up

water

fear
The

that

And that's exactly what I'm going
to do the minute I feel controls

nation
—

premise that the

satisfied customer is the unhappy
customer.

well.

the fear salesmen

are

all.

joice. My burning ambition is to

emergency

.entrepreneurial decisions that

I

the

close

yet

concern

we

sooner

How could it? No small group of
^men in government can substitute

decisions

bite

production potential for civilian

And

millions of people.

a

then

ords.

every emergency—

a

every

too

have

What

I

These gloomy ravens operate on

arms

capacity so big that an ag¬
anywhere will count 10

and

are

short-range

But what

pump.

Ravens"

the

doing? They are off on another
tangent. They are wringing your
hands for you about deflation.

decided

much

tion

strengthen

produc¬

his tongue before he speaks at

Washington

century

that

made

"Gloomy

the upside down

This is

gressor

Washington in

<We

chasing

stockpile of

a

—but

the

can

chance

group-riding taxicab.

a

on

Years

merely suggesting that there
always appears to be confusion in

for

you
a

to

inflation,

do these things in the

I have said it

many

down

"Big Hump" in

We will have
so

am

that

or

nothing from

continue

against

further.

any

I

-60

saying

slow

money

goods that dwarfs

wrote

buy fear

can

must

enterprise.

have

the

buy

to
you

dam

any

new

i

of the dollar from

power

powder your face with sunshine.

'

of

mat.

tried to keep the

rehashing history
in the spirit of suggesting that
you simply grin and bear it—or

and

In

can

for the price of a

scare

the climb.

not

am

traffic

a

bath

to

rush of

you

of

war.

half

national

1951, I

something

as

way

tried

fear salesmen.

raft

out

1

the big hump—and without being
all out of breath and energy from

policy.

a

That's

next two years or so, we'll be over

a

and demanded to know

wasn't

another

Two

Galway Irishman.
thundering
voices
roared

And

is

have

whole

a

department

have it for

we

But

emergency.

non-skid

a

reading

swinging

was

choice.

stabilize.

job

my

Over the

right and left at all the trusts in
sight

and

slipping

growing? Still expanding?
Teddy Roosevelt was President
in 1901, and the country was in
uproar.

why,

Or it could

between the functions of

I

fear

tremendous in¬

ver¬

them for 50 years.
Isn't'it surprising that America
is still in one piece? And still

an

regard

them—every week right

—

to

out of

if, for all

fair

a

an

buying

editorial

heads like that—or amended
sions

had

to

cop

sales¬

short beer.

rules

decided

us.

like

after goods and

things

change.

It

the panic

Policy."

com¬

households,

and

that

read:

to

and stay

fine with

Which

other

mil¬

it gave us none. Its aggression has
left us no alternative except to

I

Washington."
And

had

way

people's

was

cared.

underneath

One slug read: "All Is Confusion

150

turkey

why we've got

them.

of

feather duster.

a

mobilize—and

most

he

that

live alone

kept

minds.

our

live in the world community in a

true.

two

no

people who know

communism

law-abiding

seems
that one
day in
famous editor dashed off

decision

talk

legend, which happens to be

paper

must—

we

Washington decision.

a

munism with

me.

fear

part-time

are

there's

amateur

barfly

forward

will. There is

we

American

we.

And I know it has

much

so

Stabilization

confusion about that in

That's not

es¬

millwheels of

production.

and mobilize

Washington, and it prob¬

ably happened
father, too.

It

for the

power

together. For mobilize

light.

seen

that

water

and mobilization must go

than

sound

you've

Eric

more

of

through the dam is

defense

probably
heard

trickle

capes

lost

there

Attack

And I expect
that
you

disap¬
pointed. By
now, you've

it;

of

dividual—as inflation.

are

gov¬

been' trying

daylights

straight into

that

"Washington

second

a

full-time

are

money—and

the

deal

to

anything

forgetting

never

expect
many

almost

a

controls.

That

they

the latest

cherry blos¬
soms.

is

It

increase is

That's the way it stands. That's
what's coming up. That's why we

They picture a
Trojan Paris in the guise of gov¬
ernment swooping down to steal
the lady of your heart—the Helen

who make lots of money out

men

economy.

job

my

I

as

have

the

sold

There

cherish.

izer,

bureaucrat,

But all the time

say.

handy spots to watch

salesmen who free lance for side-

force of

In

gov¬

ernment.

That's our
comes to Washington looking for kind of
democracy. That's the kind
like.
And
something. At this time of year, I
that's
the
kind
I
many

a

of free

itself.

be demand for nation's expanded output.

that nearly everybody

seems

merchants
scare

as

selling is the biggest business in
Washington—next to government

buying power
peddling," particularly fear that controls will "put kibosh on
production." Predicts there'll be no depression when "Security
Day" for America is reached and contends there will continue

It

member of

a

12%

flationary force..

.

For the last few weeks, the fear

private

a

short, they generate dis¬

unity.

the wheels go 'round.
I have come to believe that fear

Agency predicts, barring all-out war,
production peak in about two years, and
of dollar can then he stabilized. Condemns "fear

will reach

to

terest. In

in

a'government advisory board, and

I've been in

Stabilization

of

as

been

for the last few months

some

Administrator, Economic Stabilization Agency

Head

now,/I've

ernment officer—a

By ERIC A. JOHNSTON*

nation

Washington already.

years

28

14

The Commercial and Financial Chronicle

(1950)

We Don't Have

and

and

.

in government

cuts
When

the

President

submitted

his $71.6 billion expenditure budgct in

January he omitted detailed

discussion of

military and foreign
aid

major

has

It

spent

ever

for

money

pro-

before;

ever

It has spent more money for
foreign economic props, many of
them
inflationary
to
our
own
economy, than ever before;

political

It has failed to reduce the quar-

of

ter

trillion

a

dollar

Federal

to-

but also he will determine in what

debt, which is the heart of infla-

countries it is to be spent.);
That foreign assistance budget
estimates should first be submitted by the operating agencies to
the Secretary of State for clear-

tion;

lion.

It

was

shocking
enough

that

in his January
statement the
President

ance;

That

de-

scribed

how

he

prop

to

spend

$9.8

billion

for

time

all

But

b

u

,

the

now

d g e t

beginning to unfold on the
delayed items. Yesterday we got
the detail

on

the military expen-

budget.

originally
ditures

The.

estimated

for

the

President

that

expep-

military in fiscal

year 1952 would total $41 billion,
But recent testimony before the

Senate

Armed

Services

Commit-

tee

indicates that these expenditures will total $48 billion.
If

understanding is correct

my

the

real

the

shock

next

will

few

within

come

weeks

when:1 the

country begins to realize:
That
make

the

President

the

Economic

Administration

a

Cooperation

permanent

wants

to

scramble

all

of the

foreign economic and military assistance money into a lump
aum

that

so

Ivnm

those

so

economic

assistance

At

fixed incomes

on

to

the

question pending decision at what

are

can

V

between

EC A

spending,

and the organization for European

domestic-civilian

Cooperation

should be

The

Officer

points

out

State

is

of

that

responsible,

the

enterpdl^

under

;

tfte

tion; /

foreign policy and the

to

said he would

curb

more

housing and

in carrying out foreign policies and programs. Mr.
Foster was told that the ECA, like
other agencies engaged in admin-

istering

specific

How
we

for

of

it

dlstlngUIshed grams will need to advise and.
assistance money, consult
with
the

course

I

going

cisive.

Each

events

eral
aims

in

and

doubt

that

making the Secretary of State

a

The letter said any

"'andr policies, both®" -v? m0neJ' and the
nnbcie11 both military and beaW.f
and
economic.

The

cated in his
sage

$10 Vz
and

indi-

President

be resolved

January Budget Mes-

that he would request some
billion in foreign military

economic

assistance

to

at

least

I

coordination

assistance

authori-

expenditures

in

■

the

coming year would total approximately $71/2 billion.
These

of

because

as

we

fear«

invasion

,

have

aslumed
.

^

wars to date.

plans

were

revealed in

a

In

and

Secretary of State
In explicit detail.
tiot made
After

subjugation of

the

ECA

to

the

spelled out
This letter was
was

public but I have

a copy,

explaining that the order

necessary

to

assure

that

all

with

this

ance

before

another

such

an

examination

is

foreign

policy

sum

tures

I*13'!

would

assistance

funds

away,

■

appropriations.

could

be

made

expendi-

j

these

and

proposals

in

constitute another incident

of profligate folly
ministration.

and

iSL J?&

opinion

my

inept ad-

appropriated to the President

running behind

^herfule
_

'

<

decisions
funds

as

should

make

concerning
between

broad

the use of
(a)
military

end-item assistance and economic
•An address
eon

«df

Session
the

United

of

by Sen. Byrd at
the

Chamber

39th
of

a

Annual

Commerce

States, Washington,

D.

%, 1951.




Lunch¬

Fiscal Years—

1951_:
1952

of

2nd Quarter

$9.0 billion

ut

are

fiscal year

based

1952

on

3rd Quarter

4th Quarter

(actual)

(estimate)

17.4 billion

18.1 billion

the President's

the

basis

of

(estimate)
estimates.

$13.2 billion

have

On

been

a

(estimate)'

They will

$48 billion in military

be

higher

expenditures.)

moment.

anese,

These people are

inevitably in¬

volved, whether they want it
whether

want

we

it, in

accounting of economic and
power strength.
Let

point out to

me

or

final

any

man¬

that the

you

United States out-produces Russia
2 and 3 and 4 to 1 in all of the

making

war

here to
of

potentials.

I .refer

steel capacity, production

machinery,

oil resources, and
tangible
factors,
without
allowance whatsoever for the

other
any

lead

maintain in

we

technological

developments.
How

this

can

changed?. .*

,

,

situation

be

not

too

./

.

Logically,
there
alternatives.

are

many

(1)

A

certainly

in the

depression

great

United States, for

example, would

reduce,

economic

its

strength.
(2) A

rapid rate of indus¬

more

the

some

suffer

loss

no

war.

time to be

a

of

com¬

unbiased

look at world affairs.

we

long

a

of whieh

direct aftermath of the

try for

us

diminution of
American

our

way

is

nor

belief that

best

if

Each of these people

has his

viewpoints, rooted in his
is

not

with

his

necessary

these

necessary

to

grant

own

own

past

circumstances.

own

for

us

viewpoints;

to

It

agree

but

it

is

to understand them, and
their importance, if we

to be

realistic about

points.
•An

' for

of

It

is

address

delivery

Agents

western

in

the

our

them

May 10, 1951.

in

under

now

the

point out that

these
even

other

view¬

necessary

for

by Mr. Zelomek prepared
The
Purchasing

before

of

Los

Angeles,

a

great deal of the

tension and political maneuvering
in the next few years is going to
center

these

around

resources.

Every evidence I
cates that

can

Russia realizes

,

indi¬

see

the im¬

portance of these resources, even
if

do not.

we

I don't

sia

mean

risk

would

to

imply that Rus¬

an

immediate

war

with the United States in order to
seize them.

In fact,

I doubt very
much that Russia would take such
a

risk at the moment.

vinced

that

she has

a

these

Russia

I

am

still

con¬

believes

chance to get control of

resources

without

a

war.

I am convinced that Russia will
use

own

im¬

her control.

It is the most elementary exer¬
cise in common Sense therefore, to

every

ganda and
just

Association

—«

Europe, and oil resources
Near East—which
would

combined

mentioned

portance

there are resources
steel and machinery capacity

we

try momentarily to think like a
Russian, or a Chinese, or an In¬
dian, or a Britisher, or a German.

in

immediate basis,

more

a

only

however,

as

We will

patriotism

any

and

its position, but
long period of years.

and

developing for

more

Let

I
..

the

at

higher greatly add to Russia's war mak¬
contrary,
the ing potential, if Russia could get

higher

to

* 20.3 billion

(estimate)

on

States

situation.

$11.0 billion

(estimate)
(These figures

EXPENDITURES

$10.1 billion
(actual)

15.8 billion

the

May

ESTIMATED

Quarter

(actual)

Meeting
C.,

1st

AND

United

up

levels.

are

♦

ACTUAL

then, do the British, the
the Germans, the Jap¬
the Chinese come in?

(3) On

creating
a world crisis, merely in order to
get
government
spending
and

.

and

Committee,

the

not

the

e,°l°L „SX'
^n®
SJ'

Where

fears

French,

^

all, it is obvious that it

pletely objective and

To Set an idea of the acceleraallocated
to
the
operating
tion at which the Federal expendiagencies, the Secretary of State, Conquering Heel of Fiscal Chaos ture balloon is blowing up, here
•with appropriate advice from the
If the freedom and democracy *s
box score, by quarters, for
International Security Affairs of the United States go down in
'
Continued on page 29
are

is

.

s

United

now

alter

economy.

!' great upheavals of the last

Ba loon

the

that

enemy

States

a

are

TT

potential

in-

way

Made in Russia

i

™

new

foreign

.

of

in which

the

wasting

also

First of

a

With increased taxes already in
effect, receipts may be running a
little ahead of expenditures at the

objectives, it proceeded to direct
After

order

out

the

.

involve;*
practical

period of time and

military defeat by

a

appointed Cabinet Officer to make
expenditures

about

American

taxes

Blowing Up the Expenditure

vast

and

they
some

be

over

,

Congress is going to be requested to allow one politically

such
lump

that

United States is responding to cer¬
tain real situations, some of which

if the

programs be fully
co-.
This is only one area
ordinated with'each other to supreductions
in
Federal
primary

dollar

in

problems,

would

we

we

trial development in Russia v/ould

Why should Russia

and* certainly country 5,000 miles

appropriated,

problems.

the heel of

should be examined from top

bottom

attempt
solu¬

easy

We should be far more malleable to communist dictation in a
state
of
fiscal
and
economic
chaos, than we would be under

whole

of

overseas

the

cally?.

not

day

draw

to

think

the

militarily

knees

re-

foreign assistance and
especially foreign economic assist-

is

which the

judgment

my

matter

tor, in

Foster

Establishment

try

conclusions

psk trying to bring us to our

the

present

,sli|

and

f

which the world crisis will affect

,

between

State

to

and

But no Russians have been shot

111

of

tary end-item assistance."

to

port

_

.

mention

procedure

Secretary

Defense

letter dated April 5 to Mr, William C. Foster, ECA Administra-

was

no

we

will

suggest to you any

Rather;■ I will simply try to de¬

the role of half the world's keeper.,

by the President.

The letter made

the

here

hpransp

no

fluenced in what I say to you by
the way I see certain conditions.

can

when, by our
and he estimated that spect to military assistance, which own.- irresponsibility, jwe are aseconomic
and
military was referred to in terms of "mili- sumin£ that
attitude economi-

zations,
foreign

Mr.

ECA

disagreement

ASfC^afy .°f 'Stafa
Administrator would

™„Pu

have

I, myself, will be in¬

factors

state ™d h's

,

I

purposes.

many

.

way

past

these

,

in his

realistic, according
experiences, his gen¬
background, and his present

his

to

scribe

Secretary

.

or

is trying to be

aggression. And we must be pred to defend ourseives not s0

,

themselves

them

of

of

,

,

did anything but admit
that Russia is the only actual or

to

subject if I did

a

of Acheson or Taft,
to be completely de¬

st/tf to facilitate the
diS L. which fea,iy Se? of responsibility for overall foreign
i has the effect ? policy and program coordination.
directive

military
,

our

tendency to dictate the
that individual countries

a

tions

®nd

influ¬

hesitate

would

that

{he Russian miIitary mighti or
disregard threats of communist

•

may

deci¬

pf President Truman

not minimize

can

when

today

such

on

feel

But
we

over¬

Indeed

lives and the lives of

MacArthur^

be—or should the word be ir-

of

logic.

calm

make

our

policies

agriculture.

inept and inconsistent

and

be

follow. I doubt very much whether
the views

private

private credit

billion

man¬

these

time if

to let emotion

easy

we

have

new

$10

like

"

terms, therefore, let
try to examine the present sit¬

I

A. W. Zelomek

calmness

not

responsible?

pro-

overseas

than

all

to

Actually,

inflation,

and coordination among the exec-

im¬

hard to

is

are

$13.3 billion in

provide leadership

too

speak

but authorize
commitments
f0r Federal credit agencies, with

of foreign relations, and

factors

.

Strong in Manpower
On

children for many years to come.

*

must restrict

We

human

on

and it is

us

ence

programs;

discourage

factors — like
capacity and oil resources—

Russia Weak in Economic Factors,

ques¬

are

sions

expansion by taxes
the point oftonfisca-

virfu^^to

Cabin^r

.a

President's direction, for the for-,.
conduct

but

steel

power.

ride

em-

more

These

in their simplest form,

economic

and

'

it

' We must expand production for

defense,

letter

Secretary

spend

meas¬

strength.

uation and try to reach some prac¬
tical conclusions.

able;

are

involve

this subject,

on

must turn to basic

national

measures,

its

here

they important

practical

we

of

ures

States

of

important to

are

us

of

We must cut back non-military

but

1 feel

What

should

all

*

maximum

have

suggests that integration of economic work by NATO

promoted.

United

by

All

people who hold them; but in

To be

the

mean

us?

to

What

—

should

viewpoints

what respects are

the world cri¬

portant

con-

defense.
nonessential public

tractive to those who

and

Economic

scarce

for

-

con¬

of

concern

I

These

ployment to produce for defense,
but increase public assistance so
returning to work will be less at-

and

today

what

011

"importance."

grounds.

pay

'

must

we

the North Atlantic Treaty Organization

conserve

materials

agree

term

the

controversial

to be al-

works;

The letter goes into some detail
with respect to relationship and
coordination

must

continue

but

"higher adminis-

as

trative levels."

We

.

they

troversies

tions

struction

which

matters

on

the

tread

lowed;

utive agencies

agency;
That he

mouth.

higher prices which

supervise day to day
EC A operations they may suspend
are

mulation of

to

proposes

its

to

us

sharpest and most important

However, I
hope not to

time it is saying:

We must hold down prices, but
social security payments

That while ambassadors abroad

not

of

that

one

these

be?

increase

coordinated instructions; and

as

into a po-

us

sides

is

foreign policy

it is talking out of

both

like this

would allow almost anyone to say
almost
anything.
Some
of the

do?

Administra-

same

be sub-

coordinated, with the
Department and identified

State

pic-, was described

ture is

diture

should

where

action

programs

record.

Harry F. Byrd

pro-_sition

stantively

mestic-civilian

and

subject

inflationary fears.

■

,

inflationary;

Federal

tion has maneuvered

policy

overseas

the

Now

.

directives from EC A to its

gram

osed; missions

strictly do-

—an

general

of which is

dollar
.

A

sis
,

In the absensce of emergencies
it has operated on deficits, every

V

'

,

and revival of

of them highly in-

many

grams,

more

domestic-civilian

flationary, than

would be spent

money

has

than

^

During second half of this year economist expects change in
supply-and-demand conditions in definitely reduced availabiiity
of consumers' durable goods and ever-increasing demand. For
next year he forecasts increased production; deterioration of
Treasury's cash position; scarcity of manpower; higher costs

before;-

not

which the

taxes

taling $49 bil-

items

Economist, International Statistical Bureau, Inc.

World

Government

more

purely

(This means he would cononly the purposes for

areas.

trol

(b)

Federal

The

collected

spending.
and

since

years

Economy

By A. W. ZELOMEK*

War II:

.

support

five

In

chaos, and calls Federal budget estimates "an
- ----- - - y.
expenditure balloon" needing deflation. Lists his proposed
balloon
n

The American

administration;
not
military tactics and strategy

by the Russians.

Finance

heel of fiscal

£

eco¬

inept

super

S. Senator from Virginia

Attacking Administration's spending policies, particularly in
foreign aid, veteran economy-minded Senator says nation is in
danger of economic attrition, because "of our own profligate
folly and inept administration." Says we are under conquering

.

succumb to such

we

nomic attrition, it will be the re¬
sult of our own profligate folly

By HON. HARRY F. BYRD*

on

not

And if

In Government
U.

The World Crisis and

conquering

Economy

Member, Senate Committee

will be under the
heel of fiscal chaos;
military aggression.

Thursday, May 10, 1951

.

.

it

time,

our

.

mercial

ment

that

of

countries,
dissension

with
we

of

diplomacy,

intensive

propa¬

strengthened by

offers

ropean

much

artifice
with

United

will

find

com¬

western

to
and

Continued

so

disagree¬

States

it

Eu¬

cause

policies

increasingly
on

page

26

Volume 173

Number 5010

.

.

The Commercial and Financial Chronicle

.

(1951)

Highlights from the Annual Report of Standard Oil Company (New Jersey)
for

Standard Oil

Company (New Jersey) is

a...0record activity
year of 591

American corporation which

an

IN CANADA

has, in varying degrees, investments of capital and technical
knowledge
in

a

and

Produced

large number of operating oil companies, both in the United States
abroad. In 1950, these
companies:

Made

nearly 50%

new

oil and

more

oil than

a year ago

..»

discoveries in Ontario and

gas

Alberta

Operated nine refineries at 14% greater output than
IN THE U. S. A.

a

year ago...
Drilled

thousand

over a

new

wells, with

Opened

unusually

an

high proportion of producers...
Improved and expanded refineries in New Jersey,
Maryland, Louisiana, and Texas
-

IN SOUTH AMERICA

a new

,<

Added 370 miles to Texas crude oil
Started

doubling the capacity of
across
Pennsylvania ...

pipeline systems
products pipeline

a

Set

a new
production record in Venezuela, second
largest oil-producing country In the world
Operated the big Aruba refinery in the Netherlands

.

...

...

West Indies at

a
higher rate than ever before
sharply increased call for products throughout the
continent, to support the vigorous post-war
development.

Let contracts to increase

...

At government

...

Met

by 85% the capacity of a
pipeline from Baton Rouge to the Southeastern
request, re-activated two government-

owned

IN OCEAN TRANSPORT

Butyl rubber plants; also continued
operating two others which have been producing
constantly since 1943

Received the last 4 of 12

.

Invested
for

over

new

and

20 million dollars in

improved

laboratory research

processes and

Ordered 6

products.

t

a new

more new
*,

>

>

tankers

-

■

■'

-■

...
.

*b "

•

,

-

,

.

Operated an ocean-going tanker fleet of 117 vessels,
totaling over 2 million deadweight tons.
IN EMPLOYEE RELATIONS

Proposed a plan which ended gasoline rationing in
England .. .
Went ahead of schedule in construction of

super-tankers ordered two

years ago
,

IN WESTERN EUROPE

Continued the

refinery

have

at

Fawley, England, to be the largest in Europe ..
Expanded, improved or started construction of refineries
in

toward the major

J

continuous wax-making plant at
Bayonne, N. J....
'
1

states

Superior, to

carry crude oil
Canadian refineries and markets.

-

....

Completed

1,100-mile pipeline system from Alberta

a new

to Lake

Norway, Belgium, West Germany, France,
Italy ...

same

favorable labor

prevailed for

more

strikes in domestic

relationships that

than three decades, with

no

operations.;

-;

and

Opened many new service stations, which served not
only local motorists, but some 18,000 American
tourists...

Supplied 28%

'

-

more

fuel oil than

needs for industrial

The

'

*

-

year

world
a year ago,

to meet

expansion
Met the greatest demand for
asphalt for new road
building ever experienced in these,areas.

For

...

use

up

oil production substantially in Saudi
*

<l;

was

just

over

7 million in 1945, the peak war year.

significant to free people everywhere. Oil supplies in today's
are
closely linked to living standards and natiQnal strength.

It

Arabia...

..

comparison, it

world

EAST

Stepped

..the job goes on. In
1950, for the first time,
oil.outside the Iron Curtain passed 10 million barrels a
day.

This is

seems

it

IN THE MIDDLE

ended

of

free

clear that
and

More and
/

Opened the vitally important Trans-Arabian Pipeline
system from oil fields on the Persian Gulf to the

more

and

the

the world will look to oil to

progressive.

more

help keep

7

it becomes

clear, in meeting that need,
that

more

FINANCIAL

SUMMARY

American-devel¬

.

.

Mediterranean
31-inch

pipe

...

over

1,000 miles of 30- and

a

large-diameter pipeline *
extending 550 miles from Iraq to the Mediterranean.

IN THE FAR EAST




Expanded production of crude oil in Indonesia and.
explored for oil in Papua . ,..
Japan.

process

of

1

'

petition spurring corporate
ingenuity and responsibil¬
ity. .. is a strong and flex¬
ible
system for promoting
the welfare of
people.
*

We will be pleased to send d
copy

of the full report to
anyone

it. Write Room

wishing

1626, 30 Rockefeller

Plaza, New York 20, N. Y.

.

Total

income

Net income

Dividends

COMPANY

AFFILIATED

(NEW

COMPANIES

JERSEY)

services,

!

7...

..

.$408,223,000

$13.48 per share

i

.

$151,028,000

*

;

or

paid

$5.00 per share
$276,000,000

Taxes collected for
governments

$294,749,000

Wages and other employment
.

7

$548,205,000

new

facilities

OIL

......

or

costs

AND

from sales,

dividends and interest. .$3,198,266,000

Spent for

STANDARD

Company (New Jersey) and

Consolidated Affiliates

Taxes

*

output of refineries in Australia, Sumatra,

! V Standard Oil

com¬

...

Started construction of

Increased

oped business

risk and result... of

plants and

.......

.

$295,132,000

Number of stockholder-owners. .222,000

Number of

employees

116,000

'

15

16

The Commercial and Financial Chronicle

(1952)

brakes for this

The Ontlook for New

Honsing

By THOMAS S. HOLDEN*
President, F. W. Dodge Corporation

come

necessary

without Korean crisis.

even

Figures
the

the

on

released

census,

War

liberalizing
surance

1949

Praises change

Housing and
showed

Agency,
in April

that

711,000

'

■

.V

■

household

36,-

per

were

1940

3.0

to

persons

household in 1950.
in¬
prosperity and increased

creased

The vacancy

birth rate of the late 1940's appear

ratio of 6.8 per

to have reversed the trend toward

cent

small

families.

should

have

was

little

a

higher

than

that

shown

by the

1940

housing

in

Thomas S.

ing population

ably good condition, such
would have indicated
in

ratio

a

fair

a

units

JWhile shelter needs of

Holden

reason-

bal¬

between demand and supply
national housing market.

ance

the last

as

increase in average

dwelling units but toward
of larger average size.

round

-

an

decade

numerical

family size, there would be a
tendency
toward
fewer
new

■tj

all the vacant

population

decade and

m

my

If

units had been
year

same

increase in
;

census.

this

If

the

the

a grow¬
fundamental to

are

housing demand, monetary factors
are

important.

very

income

personal
at

earned

Disposable

is

being

now

higher over-all rate
However, the same census report than ever before in the country's
indicates that only 1.7 per cent history. After making allowance
tor price increases, the per capita
were available for year round use
of
income
and not in dilapidated condition. rate
production
is
This .net effective vacancy ratio higher than in any year except
indicates that there was actually 1944. In 1950 personal consump¬
a rather tight
supply-demand situ¬ tion expenditures were at an alltime high; and between 1940 and
ation a year ago.
Since
the /census
date
there 1950 living standards increased at
were
added 1,395,000 mew non- the highest rate in history.
farm

units in

mated

that

1950 and it

850,000 j units
1951.

is

esti¬

another*- 800,000

or

will, be* added -in

Consequently, by April 1952-

a

aggregate

securities. This total

probably include
larger

number

a

of

leaving net -liquid

round

occupancy

billions.

ca#e a

year

level the

there

housing market will

,

tions

balance, although
likely to be wide varia¬

are

between

as

another.

workers

to

locality and
migrations
of

one

Sizable

'

defense ...areas

assets of $272

It is readily seen that the basic
be. demand
factor
ofpopulation

nearly in

very

could

growth

strongly reinforced by
uptrend in living standards and
by widespread purchasing power.
is

an

There remains to be examined the

credit factor.

easily result in significant
local shortages. However, so long
as .housing
Production can be con¬

■

:

•

very

tinued

at

the

rdte

estimated

for

this year, no" housing shortage of
national

peet.,
.

,

proportions is in
■

*

_

pros*

• -

•

between 1940 and 1950 the
in

increase

550,000,

duelling units

which

8,-

was

the

was

net

largest

numerical increase in
any

The

decade.
figure includes both farm and

Credit
Credit
modern

as

as

Factor

a

know

we

world

is

»

■'

in ^the

it

tremendous

a

Like every other
kind of power, its maximum benefits depend upon efficient opera¬
economic

power.

tion of brakes that
at

be applied

appropriate times.

TJie

founders
Reserve System
,

can

of

Federal

fully

were

During the period,

housing

increased

study by

per

cent

per

cent

fnere

able

compared with a
14.5
increase in population,

was

thus
of

census

data

was

in

depends

future

in

the

on

space-

housing-

the

physical

housing show
a

great improve¬
qualitative standards.

Continuing
point

consider¬

very

American

fu^aiCi!er*s^cs
that there
ment

a

improvement

standards
other

22.9

demand

from

principally

trends

of

this
upon

population

growth,

family size, disposable
personal income, living standards,

higher qualified
commission. It was
a

mone¬

tary
nized that

recog¬

a

system for liberaliz¬

commercial credit must in¬
clude mechanisms for controlling

ing

credit.

This

basic

principle has
recognized in all
Reserve legislation
en¬

continued to be
Federal

acted

since

1912.

In the 1930's

we

set about trans¬

forming the home-mortgage

sys¬

tem from the old-fashioned pawn-

broking basis into a modern credit
system. The successive steps in
this

transformation

are

it

is

Future Demand

doubtful

whether

the

remem¬

System, the

°flu °wners Loan Corporation
and the Federal
Housing Adminis¬

increase in

housing units than the
actual 1940-1950 increase, which

home-mortgage credit

averaged

that

authority

a

year.




It

care-

U*+wuP^?Iec* ou* *n connection
home loan banks and the

new

defunct Home Owners' Loan

Corporation.

In

connection

5
a Instead
Tdiffer*nt
vailed.

for

ated

as

system

of

with

pre¬

providing

very

Oscar Kraft Celebrafes

and

the

are

in

cutbacks

vision

sets

mercial credit.

amounts

has reduced available mort¬

serve

credit by other

gage

Fol¬

means.

lowing the action of the Treasury
Department in refunding certain
government bond issues at 2% per

cent, the Federal Reserve stopped
supporting the government bond
market and let the

prices of

tain government issues drop

cer¬

below

Previous to that it had been

par.

profitable for
institutions

number of lending

a

to

bonds and

sell

With

mortgages.

quoted below

funds

A

governments

they could only
loss. Consequently an
par

of mortgage loan

cut off.

was

Change

of

of

'

de¬

and

still
all

these

West

best

years

previous

Springs.

these

May 5 celebrated

couple have three
("Tony"), Verand Carol Ann.

The

essential

materials will tend to limit hous¬

ing volume in
the

some

remainder

of

and

year

is generally be¬

part of next.; It
lieved that

Marpky With
Montgomery, Scott Go.
Klees t

degree during
this

by 1953 there will be

In the

Bennett

purposes.

Klees

meantime, there has been

direct ban

on

any

and

dissolution

Palmer,

&

Harold

Two * years
/ ago
acted

government

servative

It

authorities

as.
if
they
thought
unlimited;- inflation of
housing demand by way of easy
credit was an unmitigated bless¬
ing. We.seem to hold a more con¬

view

now.

is

to

partners, on and - after
will be connected with
Montgomery, Scott & Co.,
120
Broadway, New York City.

building and none is ex¬
this time. There is a
strong prospect of defense housing
demand arising in defense centers,
full recognition of the importance
of defense housing, and full recog¬
at

H. Goddard

Joins J.

(Special to The Financial

maintaining

Chronicle)

Mass/ — Robert A.
Warren, Jr., has become associated
The Housing and Home Finance
with J. H. Goddard & Co., Inc., 85
Agency has estimated this year's Devonshire Street, members , of
housing volume at 800,000 to 850,the Boston Stock Exchange.
Mr.
000 new non-farm dwelling units,
formerly with J.
which
would
approximate
the Warren.' was
year's basic needs. It is rather Arthur Warner & Co.; Inc.
strong civilian

BOSTON,

economy.

veloped* into
tem

an

whereby

appropriate

brakes

the

set whenever sound

tates

the

Unless
those

need

such

action.

by
Congress
of the Defense

provisions

Production

Act

which

real

and

consumer

estate

June

will

30.

;

*

•

be

judgment dic¬

for

extended

-

sys¬

can

authorize

expire this
', '

It would appear

credit

.

from the

census

previously
quoted
that
over-all
housing needs, of the
country during the current decade
not

likely to

vary very much
housing production of
1940-1950. Making reasonable al¬
lowance for replacements of hous¬
ing units abandoned, destroyed or

from actual

demolished,
quirements

over-all
would

annual

re¬

approximate

dwelling units, including

900,000

farm and non-farm

dwellings,

new

this

mand

if

estimate

is

the

of

housing de¬

reasonably correct,

current

defense

the

on

becoming

scale

present
an

and

program

all-out

war

program, housing supply should
involve no major problems.

handled

building industry that
nearly 1,400,000 housing

starts in 1950 is

certainly equipped

to handle 850,000 to

1,000,000 units

annually hereafter. Organizational
and

man-power

certainly
t

a

11 i

c

be

capacity

adequate.

construction

should

Non-mematerials

Hope!

fight

or

how

not, when or

might be moved to do so, and the direction of
the next phase of Soviet expansion are matters of
crucial importance to the free world.
"They were dealt with in some detail in General
of the Army Douglas MacArthur's testimony over

she

the last three

days.
i'fi

- ••

•

"They [the General's observations about Russia]
assumption made by

all worked in with the major

namely, that the Soviets were
that nothing that hap¬
pened in Korea would change their basic decision
on whether to go to war or remain at peace with

General MacArthur,;
after

so

much bigger game

the democracies.
*

..

"There

persistence
dreams of

"But

..

#

;

'*

something awe-inspiring about the
with which the Soviets follow the
their Czarist predecessors in imperialist

is

expansion.

buildings and conversions.
If

''Whether Russia will

coming

figures

are

Let Us

be

hoped that our present temporary
housing credi^ controls may be de¬

of

Walter A.
P. Murphy,

general
May 15

kind of resi¬

dential

pected

the

Following

ample supplies for all civilian and

military

*

Apparently, we have learned
something in the past two years.

their

anniversary at Palm

H. ("Mike")

ner

of

on

children, Oscar, Jr.

1950.

Availability

(Oscar F. Kraft & Co., 538
Street) and his wife

25th wedding

to

Kraft

Calif.—Oscar F.

Sixth

Esther

volumes that
quite favorably

compare

the

LOS ANGELES,

Kraft

permit

of

F.

Oscar

substantial

metals for

scarce

in

reason¬

products,

would

a

Folicy

equip¬

were

year,

save

volumes

civilian

with

goods

last

can

nition of the need for

Government

Mortgage

sizable

no

in

volume

fense /purposes

government

invest the proceeds

household

and

durable

consumer

responsibility of regulating com¬
stiffening the
terms of mortgage loans by means
of Regulation X, the Federal Re¬

housing,

ment. Since housing and all these
record

to

of

building, automobiles, radios, tele¬

able cutbacks

addition

following factors:

building, commercial

System, which since 1912 had the

In

fourth-quarter

volume

recreational

given to the Federal Reserve

was

estimating

metals

cre¬

credit

consumer

sup¬

military requirements for copper
at 20 per cent of the total.
Offsetting
heavy
defense
re¬
quirements
for
these
critical

part of defense emergency

credit

cent of the available

Silver Wedding

bilization Chief Charles E. Wilson

legislation. It was significant that
authority to regulate home mort¬
gage

For

ago.

per

was

home-

was

A home

were

40

1950

record

mortgage credit control

,

The requirements for control of

any

ply; but by April 1, Defense Mo¬

credit restrictions

with the

855,000 units

in

concealed by the circum¬

was

stance

continues

tration.

example,

gardless of the Korean crisis. This

without

population growth of the current
decade will require a greater net

two

would have become necessary re¬

eral Home Loan Bank

The

was

which

conditions,

all-time

boom,

bered by all: creation of the Fed¬

and credit conditions.

be

measurably better than it

aware

nonfarm units.

by

housing

controls
our

?Qi olatAThf- system was exhaustive
1912 after five years of created in

units

these

the

offset by

fIn bu-li?ns ofof consumer debt,
mortgage debt and
$20
billions

habitable units available for
year-

than was the
ago, At the national

Under

made

assets excluding corporate
was

by

volume

estimated

large percentage.

supply
to

brakes at all.

no

a

increased to 7.5 per cent at least,
which would

considerably

with

power

source

had - accumulated
of $326 billion of

vol¬

this year's

sumption of copper would exceed

important

liquid

the

appears

Through the • year 1950
credit was all motive

be sold at

this country

the gross vacancy ratio will have

that

result

today

stration.

mortgage

According to the Securities and

an

the

outlook

separate,
liberal system of G.I. home

Exchange Commission, individuals
in

in¬

however, any

that 1952 housing

will decline from

ume

January many people
believed
that fourth-quarter military con¬

fact

The increased marriage rate,

||g

occupied.

in

taken to

a

is not at this time,

production of all of them

months

enor¬

1-person

decline from 3.2 persons per

was a

dwelling units,

been

housing volumes
part of next year. There

indication

strong

loans under the Veterans Admini¬

the

was

in

However,

have

measures

crease

with

during

metals being

production

military

of

squeeze

may

heavy demand for military

very

and
2-person families. A result of this

total of
39,390,000 nonwhich

increase

mous

year a

of

in the last decade

were

these

make any specific esti¬
1952. Tight supplies of
metals during the peak

for

months

gress had set up a new,

is more likely that demands aris¬
by ing from population increase will
Finance be somewhat smaller. A big factor

there

Supplies

Con¬

meantime

the

early to
mate

were

measures

In

supply,

production.

of

late

In

ade¬

aluminum,
copper
and
promise to be in

short

in¬

mortgage

devised.

in

products

in such

early 1950 various new

adopted.

housing

of last

and

liberalizing

February

Home

FHA

were

Steel,
brass

reconversion
new ways

available

Thursday, May 10, 1951

.

.

critical

During

the

and

be

Materials

petitioned to
World

was

more.

II

also

quate amounts.

on

period that followed,

Sees ample building supplies by 1953.

1950

in

Congress

out,
.

from liberal Federal mortgage credit policies, but looks for
annual requirement of farm and non-farm new dwellings of
around 900,000.

relied

authorize

Leading construction analyst reviews progress in new housing
since World War II, and indicates that building of new homes
has, for time being reached peak. Sees credit restrictions as
deterrent factor, and states such restrictions would have be¬

should

form of credit,

new

supplying a
limited amount of gasoline. When¬
ever
FHA
mortgage
insurance
authorizations were about to give
Congress

.

this

•

'

,

-

•

tendency also carries its hope.
Czarist expansion was limited not only by external
force, but by the tendency of the Russian people
to revolt against the unendurable tension imposed
on them by the czars.
Time and again internal diffi¬
culties called a halt to Russian dreams of expansion.
If national characteristics are as persistent in this
very

respect as they are in the other, they may solve the
West's

problems jet."—James M. Minifie in the

New York "Herald Tribune."
We earnestly hope that the solution to the present
difficulties, as envisaged by Mr. Minifie, is not long
delayed.

Volume, 173; Number 5010 Vv

:

Tht Commercial, and Financial Chronicle

(1953)/

*

.V T '

•

}

A. kcyyuu

cam

heproud, to
carry
s you can tell

K
If

from the letters GM

General Motors

a

look closer

you

you

will also

Key to Greater Value." That
For

the road

on

today

stamped

upon

it, this is

car.

is

will

you

see

that it carries the inscription "Your

something

see many

for yourself.

you can prove

evidences of enduring value in

'

current

models of

GMC Truck—the

Chevrolet, Pontiac, Oldsmobile, Buick, Cadillac and
cars

These fine vehicles
and

and trucks built

incorporate

performance that

stem

by General Motors.

exclusive improvements in design
from years of development work
by GM
many

Research, by GM Engineering and by GM Production
better

transportation.

We ask

only that you

You'll find

good

and in time

compare

reason to

be proud

to come.




these staunch

I

you

produce

V

-

.

men to

cars

bought

;

,

.

and trucks with others.
a

GM

car,

both today

-

Keif io "on Unto" production

Ken to better engineering

CONSTRUCTION FOR WAR OR PEACE
how to get things done. Otit

depends

upon

knowing

of long experience General Motors
has developed a system of
pre-schednling manufacture of parts
that brings them to the

SUPERIORITY

IN

DESIGN

carefully

from infinite tests to
body styles. Here, an engineer

comes

check the staunchness of new

,

strength around the door opening. The
jack applies extreme pressure—and any minute deflections
are instantly recorded
by the closely spaced gauges. Test

assembly line on time. This typical
scheduling board shows monthly. requirements and daily
output in a plant making some 800 different
parts—ranging
from man-sized pieces to clips so tiny it takes 75 to make
a
handful. Advance planning enables GM to produce parts in
adequate supply for defense as well as America's finest cars.
GM

measures

after test like this insures the rugged sturdiness and greater
of Body by Fisher—exclusively on GM cars. Such

value

tests also insure greater
durability in military vehicles built
by GM to safeguard America.

Keg to better research
HIGHER
a

STANDARDS

OF

PERFORMANCE

product of painstaking research

—

are

well illus¬

trated

by this"gold standard" method of check¬
ing the smoothness of metal surfaces in moving

Gitm

parts. Some must be machined finer than others,
and GM Research employs 27
degrees of smooth¬
ness—or

standard
measured

ruled

to

roughness

I

call

it

millionths

give

of

an

you a

inch.

These

BETTER THINGS

CHEVROLET

.

PONTIAC

•

FOR

MORE

PEOPLE"

OLDSMOBILE

BODY BY FISIIER

golden

smoother-running

better value for your money.

"MORE AND

Motors

—as

manufacturing practice. These are
by gold-plated master blocks, diamond-

master gauges
—a

engineers

as

kai

car

Hear HENRY J. TA YLOR

on

the air every

•

.

BUICK

.

CADILLAC

GMC TRUCK & COACH

Monday evening

over

the ABC Network, coast to coast

It

Financial Chronicle

The Commercial and
18

Thursday, May 10, 1951

.;

.

(1954)

Continued from first page

-

,

,

.

Funds' Purchases

Rails and Utilities Feature
commercial

quality

NATIONAL
RESEARCH
120

This

paper.

more

est

BROADWAY, NEW YORK 5, N. Y.

for

remunerative level of inter¬

bonds. Over the
regard this devel¬

high-grade

longer term, we

opment as constructive."

L.

Walter

Similarly,

Morgan,

President of the Wellington

his

in

observes

review

Fund,
the

of

quarterly period: "In anticipation
of a possible change in govern¬
ment
bond policy, a substantial
amount of the longest-term gov¬

DIVIDEND

SHARES

ernment

issues

were

President,
-

reached
of

investment

dealer

or

;

BULLOCK

CALVIN

Established 1894

New

One Wall Street

York

sold before
Most of the

at

accelerated

an

ures

Conse¬

pace.

tnat

quently, it appears probable
a
basis is being laid- for a

.of

re¬

a.

corporate democracy in fact Jarly, worthy of note Is 'Douglas T:
as in legal theory. There¬ Johnston's quarterly report to the
fore, we repeat the words of John shareholders c < the Johnston Mu¬
H. G. Pell, President of this in¬ tual Fund, another company/with

given in his

report to stockholders on

Lehman

a

this sub¬

Corp,

vestors

dampening of inflationary psy¬

commitment in

important

Less Weil-Known

This

selec¬

Issues Acquired

vestors."

account for 50%

assets.

such
as
British Columbia Forest Products,

nine

2,000

International

the

and Trailmobile,

Co.;" F. E.

Myers

second

and

Co., by National Investors,
Series;
Allied
Labora¬

tories,

Minnesota

pur¬
and

Power

the

was

.

Fund and

Wellington

by

trusts > making'

six
\

next best liked
electric
company,
three
funds
making new commitments and
two
others /adding - to
portfolio
holdings; purchases totaled 41,400

Income

no

One block

shares.

sold.
In the pre¬
this stock had been
most popular in the

was

vious quarter

bought- by In vestors Mutual. group,
Other new acquisitions included chases.
Duplan, by Commonwealth In¬ Light
Bros.'

among

total of 52,000
of

the

was

the utility issues,
managements
acquiring a

favorite

Ltd., added by Lehman -Corp.;
Negociacion T e x t i 1 "La- Con¬
cordia,"
S.
A.,
purchased by

Utilities

South

Middle

"completestrangers,"

vestment

companies
presently
of Incorporated's
1

pulp

and

by investment compa¬
during the preceding three
months.
Some
of
these
were

and

of
Incorporated
In¬
Oils, rails and -paper

objectives

as

States

in

more

were

acquired

United

utilities, but it was
securities
keeping with the

prejudice to

felt that other classes of

ber of less well-Known issues were

Securities Corp.,

had

public

Approximately the same num¬

nies

to

which

quarterly report: "Holdings of
utilities were eliminated.
action
was
taken without

its

tive common stocks."

basic solution of
international .situation is in
think

commitments

distortions, dislocations and

extremely heavy
Incorporated In¬
this to say in

made

which

though they do

even

chology.
For these reasons, our
basic policy continues to favor an

balanced portfolio:
"We

the causes

not eliminate

do

inflation

-create

well

vestment company, as

tional, and Brown Co., V. T. C., by

assurance

employment,

.

.

ican
as

tne

of

rate

level
to be

„

.

proceeds were

Prospectus from your

yet

Cy¬

by
New
England
Fund; Daystrom, Inc., by Adams
Express and American Interna¬

mounting infla¬
Mixed Attitudes Toward Utilities
tionary pressures. Thus, the trus¬ purchasing power and spending
in the years immediately ahead,
tees of the Shareholders Trust of
Although the public utility
there is every reason for antici¬
Boston point out on April 24 in
group was the favorite during the
pating the return of inflationary
their quarterly report:
. . there
period,
quite naturally not all
is little likelihood of a general pressures- once the period of temcompanies showed the same de¬
porary
congestion
has
passed.
peace trend developing in tne near
gree of enthusiasm towards these
future and
the rearmament Price controls, allocations, priori¬ stocks. For example,, interest ran
ties and other restrictive meas¬
program will be carried forward
the gamut from Affiliated Fund,
resulting in ever

surgence
of inflationary forces,
placed in shorter- and that present large inventories
term
Treasury issues and some will not be sufficient to bridge the
equipment trust certificates for. 'inflationary gap' which will be¬
come evident in the latter part of
temporary investment."
the
year.
Despite
near - term
Before turning to comments of
maladjustments the Trustees and
a
representative number of trust
the Investment Adviser are of the
managements on
the economic
outlook and its effect on portfolio opinion that basic economic trends
continue to dictate the mainte¬
operation, attention should be di¬
nance
of
a
substantial equity
rected to a significant statement
with primary emphasis
in the quarterly report of the Wall position
on the stocks of those companies
Street Investing Corp. which is
controlling their own raw mate¬
important because of its attempt
rial resources.''
~ ~
V
to encourage interest of the in¬
vestor in the companies of which
Emphasis on an "equity posi¬
he is part owner.
To this writer tion" is particularly interesting
this seems a commendable step ifi because the above trust is a so"balanced fund/'.
Sipnithe direction of building an Amer¬ called

removal of support.

with

and

high

a

higher

much

spending

-military

Universal

Second;

Steel,

clops

states:

With

.

.

of

Massachusetts

by

Supply,

pital

by

Co.,

Massachusetts

and

Second; American Hos¬

Investors

unabated arms race

tension and an

lower prices

hence

and

rates

is

he

which

of

Boston

of

Fund

international

continued

in

Fund

Investors

the

liquid reserves of the majority
of
the
funds, the consensus of
management opinion shows a be¬
lief

Manufacturing

•

Bullock

ous

credit, but it does reflect our opin¬
ion that the trend is towards a

SECURITIES ft
CORPORATION

Emhart

concerning

is

picture. Carl A. R.

Berg, in his quarterly report to
stockholders of the Mutual

somewhat of a cautious
attitude is indicated by the gener¬
While

change does not indicate any lack
of
confidence
in
our
national

from
your investment dealer, or from

the investment

Inflation Expected

ing February and early March and
the
proceeds invested in
good
Prospectus upon request

War" and

Continued "Cold

Government Bonds were sold dur

thinking

agement

There was no liquidation!
Wisconsin Investment Co.; Con¬ shares.
therefore feel that tinental
Foundry and Machine Co. There were also five additions of
heavy expenditures for rearma¬
licly offered Mutual Funds,
t; ?' of
Public
Utilities
Corp.,
and National
Vulcanized Fibre General
the portfolio.
The annual reports ment will assure a high level of
Our service covers all types :
business activity hor some time to
Co.,r both by Wisconsin Invest¬ three of which represented initial
for 1950 have been received from
rof Investment Company
come.
Hence, we consider the ment Co.; Asbestos Corp., Ltd., purchases.
49,000 shares bought
/ shares to meet the special nearly all
of these companies.
retention of
a
substantial per¬
and
Canadian Western
Lumber were partially offset by elimi¬
needs or both institutional
Many of them contain data not centage in common stocks war¬
and private investors. Ad¬
Co.,
by
Bowling Green Fund; nation of 4,000 shares from two
only about their own operations, ranted, and would regard any
dress the Manager,- Mutual
but also about economic condi¬ temporary decline in market
Funds Department.
prices in general, or in well situ¬
tions in particular industries.
We
Write for

ject:

complete, impartial

information about any

pub- AT

the

present time, securities
38 corporations are included in

"At the

and

sight,

.

ated

KIDDER, PEABODY & CO.
Founded 1865

available to

Members New York Stock and

Exchanges

Uptown Office 10 E. 45th St.,

N.Y. 17

MUrray Hill 2-figo

to

make

all

them

but it would be

you,

if you will indicate on

However,
the

name

of any one

latest

of the companies

annual report will be

warded

to

you

as

for¬

promptly

securities,

an

as

to
purchase addi¬
tional common stocks with growth
features

as

stocks which

year."

the

restore

in

FOR EXPERIENCED MUTUAL FUNOS SALESMEN

common

■.

..

Ira

fund" voice

be

sufficient

similar

general

to

indicate

trust

Haupt & Co.'s Mutual Funds Department has

into

man¬

space

Our

eystone

EATON &• HOWARD

EATON & HOWARD

Custodian

offices—2,600 feet,

enlarged

salesman.

radio

promotional campaigns have also kept

and

advertising

booth at the Nassau

j

increasing amount of ad-

I

this past winter,

program

County Fair next September,

and

an

a

mention part of

vertising to create the necessary leads, just to
INVESTMENT FUNDS MAY
INVESTMENT DEALER OR

PROSPECTUSES OF THESE TWO
BE

OBTAINED

Funds

FROM

YOUR

EATON

our

found

one

of the most stimulating sales tools to be

frequent contests, with a monthly
'

\

Certificates of Participation in

BOSTON

'/'

!

efforts.

We have

& HOWARD

INCORPORATED

of the five top

j

There is desk

in fact.

and plenty of elbow room for every

pace—a

STOCK FUND

BALANCED FUND

new

i

experienced

We recently moved

substantial growth over the past two years.

summarizing the economic outlook,
should

.A

;'l

obtained earlier this

One other "balanced

how

possible."

thus

and

percentage

higher

the

portfolio,

the

in

included

r

the

enclosed return post card

'

individual

opportunity

impracticable to attempt to do so.

1

Curb

like

would

listing

on a

'

mahogany tablet f

;

•

j

salesmen.

INVESTMENT FUNDS
investing

tlieir capital

333

24 Federal Street

IN

Montgomery Street

Probably

SAN FRANCISCO

BOSTON

de

BONDS

.

greatest asset,

between the salesmen

'■

(Series B1-B2-B3-B4)

our

however, is the Department's esprit

'

•

"

and sales managers.
' .!

Experienced salesmen are invited to

PREFERRED STOCKS

unannounced.

Mutual Investment Funds

(Series K.1-K2)

Bacon

or

If

you

wish

an

look

■

.

Prospectus may be obtained from

C ompany

IRA

INVESTMENT DEALER
THE

or

\

AXE-HOUGHTON

ngress

INVESTORS

Street

FUNDS

'
f

AXE SECURITIES




730 Fifth

CORPORATION

Avenue, New York 19, N. Y.

HAUPT

in

or

telephone.

-

&

CO.
j

Members

*

New York

INC.

and

Massachusetts

announced

REPUBLIC

FUND,

oston

i
i

.

Mutual Funds Dept.

•

tone

■.

or

us over,

James Branigan, Managers, come

Prospectus on request.from your

S1-S2-S3-S4)

.

appointment with either Charles

COMMON STOCKS
(Series

salesmen, and

corps—the teamwork that exists among the

Stock Exchange, Curb Exchange
other leading Exchanges.
Main

111 Broadway, New

York 6

Office:

Telephone WOrth 4-6000

(1955)
portfolios.
west

Co.

Central

Corp.

South¬

and

Montana

and

trusts.

former

the

6,000

shares

26,300.

" In

two

were

ten

instance

each

There

and

three

which

of

commitments

Two

shares.

sales

Telegraph

d

e

Niagara

was

Four

totaled
was

Additions
were

to

made by

utility

funds

block

a

each

of

were

fplio

purchases

totaling

one

in

Penn
exer¬

The

1,000.

the two most

of

the

utility

previous
Pacific

cise of rights
entitling stockhold¬

Edison .of

latter issue

stock

.

also

added

to

New

there

fjmds

four* portfolios,

and

were

shares;

purchases..

no

each

disposed

Light; two

creases

Three

of

Public

the

of

represented

latter

de¬

complete

eliminations.

a

One small block

200

was

but

in.four port¬

total of .9,500

a

Service of Indiana and Iowa Power

period.

Electric

lightened

was

been

during Uhe

months'

and

of

folios for

heavily .sold

group'

three
Gas

had

were

Union

the

shares

of

Indiana

of

utility

the

Also

holdings

by

elimi¬

of two

3,300 shares of West¬

Telegraph "A."

which in the previous period had
ranked

third

investment

in

choice.

companies

Seven

added

*

total of

31,000 shares, two of theso
additions representing newcomer$
in
portfolios.
800 shares
lightened in the holdings of

trusts.

vied

Southern Pacific Popular

Southern

were

threat

Atchison
third place among fund

for

and

Continued

Southern Pacifip was
easily the
popular railroad, as it was
during the fourth quarter of 1950.

on

page

20

most

27,000

shares: .^The( Illinois^ Power

bqughj; Central

Consolidated

from

trqsts
ern

However, there
three offsetting initial
port-

rado

Boston

nated

the

of

each sold

were

managements.

eliminations.

Light, Florida Power and
Light, Rochester Gas and Eleptric

original

by the

aided

the

shares

an'd

better

West

in

two

former, were sold out of five port¬
folios, two representing complete

Associates.

were

issues

Electric Power

the two most

were

51,360

and

Illinois Light Co., Carolina Power

32,500 shares
portfolio liqui¬

no

Fuel

Power

sold by five
trusts; the
19,700 shares disposed of
contrasting (with _1,3QQ shares
bought.: Public Service of Colo¬

and

chip.

unpopular
group.

total

Three

this

1,700
Telephone

even

Mohawk

Illinois Power

was

of

York.

blue

Electric

u

Fund

cations

dation.

1

shares; State Street Investment
Corp.,
30,000,
and
the
Mutual

repre¬

in

and

New commitments

bought than the prime communi¬
purchases

n c

was

cise of rights.

totaling
d " 7,700

three funds totaling 131,000 shares.
Investors Mutual bought 100,000

totaled

International

and .there

i

the sole
offsetting addition.
Potomac Electric Power, Virginia
Electric and Power and Wisconsin

was

buying appeared in East¬

Gas

ern

that period.
In the current quar¬
ter 2,550 shares were added to four

issue.

shares

Good

period, three manage¬
selling on balance during

new

additions

portion of the total of 9,300 shares
acquired through the exer¬

each

Eastern Gas & Fuel Bought

there

previous

sented

Six

for

shares thus acquired.

company totaled
to
the latter,

offsetting sales.

portfolios,

held.

favorable

on

share

new

and

a

ments

one

31,900

switch in attitude toward
American
Telephone
from
the
was

acquire,

terms,

acquired by four
Additions to the portfolio

of

to

ers

Power

each

were

1£

.

Although the additions during the
previous quarter of 39,600
were
greater than the
shares purchased

shares
IMMMMM'

30,100

during the three

months

50%

currently

more

trusts

initial

WELLINGTON

,

under review,
increased their

holdings during the
Four

/

uumummur

wmSSmmm

1951

purchases

J* FUND

period.
in¬

were

cluded in the total of 15 commit¬
ments.

Three

added up to a

offsetting

sales

comparatively

ligible 2,100 shares.

neg¬

-rTcfsPr prospectus
your

Next carrier

from

- ■

investment dealer
or

in

popularity

Rock

was

Island

.

PHILADELPHIA 2, PA.

Balance Between Gash and Investment of 63 Investment
Companies
End of'Quarterly Periods
Deceriiber, 1950
and

Net Cash & Gov'ts

Thous. of Dollars

Axe-Houghton Fund

tAxe-Houghton
•

Boston

"B"

& Howard

Johnston Mutual

20.8

1,567 i

21.3

6.4

14.7

v

"

Dec.

52.9

49.5

6-4

72.8

72.3

"

8.4

~

16.7

20.2

9,039

9.5

68.6

14.1

-

32.9

71.4

4.017

25.2

10.1-

57.6

13.2

~

16 6

60.7

4,978

<6.7'

16.0

73.3

'7.4

-

70.8

2,371

34.0

41.5

•

■442

17.9

18.7

~

6,689 1

K6 2

2.6

-

222

'20.4'

22.3-

13.9

14,473
Fund

179

______

of Boston.

_i____

-

180

;■*

2,177

_

Wellington Fund —.1
Whitehall Fund-

I

%

-

28.2

205

Investment Co._—___—___l_

409

65.7

65.7!

62.8

33.3

62.6"

60.4

3.2

18.4

16.5

78.4.

31.4

52.3

24.8

61.7

13.6.

56.1

19,7

18.0

68.1

68.4

21.7

t

'

56:4

f

22.0

74.7

71.2

17.5 '

62.0

61.0

43-7

43.3

54.5

45.8

6.4

5.4

80.0

; 78.3

,122:

-

121.9:

T

3.5:

•

6.8.-

20.6:

188

583

-

21.8

*

-

21.5

1.8;

10.9

13.6.

•

"

17.4

16.3

i."..

Investment Company
MULTIPLE

Open-End Stock Funds:

.Affiliated Fmid-_____^_____
Bowling Green Fund__,
Broad

Street

:

3,984

Investing

Bullock Fund

General Capital

Corp.__

National
New

84.1

90.6

93.2

*

12.8

1.8

1.8

85.6

11.3

0.7

85.4

3.8

7.3

2.5

-96.1

1.2

-2.0

52.1

62.7

.46.7

35.3

0.5

14

,95.1

94.4

„

4.4

197

'

V

216

*

9,682

_____

96.5

.7.1"

53'

None

I l.S

2.8"

;______

105

,

35.0

32.6

33.9

92.9

North American Securities Co.

92.2

94.7

2500 Russ Bldg., San Francisco 4

82.9

V 0.2

97.9

97.0

"12.2

80.4

57-3

12.1

55.0

52.9

♦

1,097

58.0

55.1

None

None

97.4

97.2

1.8-

None

None

94.6

98.2

13.0

-

16.5

32.8

31.8

54.2

None

0.2

97.9

28.9

96.8

23-5

-

1,487

;

'

26

______

State

Street Investment CorpTechnical Fund-

2,045

'

'4

17,588

1.017

468

522

-

6.0

11.4

65.3
68.3

62.6

92.2

89.7

0.9

7.2

6.8

86.8

r.

SECURITIESJNC.

65.1

16.8

None

923

;

•

:

19.5

20.0

21,037

379

Investing Corp.—

,

5.8

None

20.6

7.8

'

-

10.3

12.2

•

'

__-_____l__

>

GROUP

51.7

13.0

/

897

11.0

2.8

^2.1

144
935

383

9.4

2 6

'

701

:

468

12.6

5.4

■* '■

:

22.9-

None

None

-80.0

10.5

77.1

20.1

None

None

.89.5

79.9

21.5

2.3

2-2

18,h

19.9

■t

77.8

Adams

Express

American

The

_____

3,264

—

International

76.3

<12.1

1,658
♦

406

6.3

7,353

24.2

:

4.4

1,429

1,167

12.3

.

14,329

14,060

12.7

.

1,520

1,430

13.4

1,952

Service

Corporation

*

National Shares Corp
**Selected Industries

-

—

Corp.

—--

§U. S. & Foreign Securities

—

**

3,060

6,866
2,889
5,60.7

U. S. & International Securities

1,957

5,411

—

1.8

1.8

91.2

91.3

Institutional Bond.......

8.4

8.3

79.5

80.3

General Bond.

'7.5

2.7

2.6

910

89.9

Fully Administered

1.9

None

"73.9

'76.1

.

22.5

-

6.9

23.9

838

-

10,406

1951

'

.

v

8.9

9.0

83.0

5.4

'74.1

None

None

.10

90.4

Automobile.

14

85.5

85.8

Aviation

11 >

8.4

78.9

793

Building.

12.2

12.3

11.9

84.2

83.1

Electrical

None

7.7

2.3
-

.

12.2

3.6

Industry Classes:

87.7

1.8
•

t

■

.13

78.2

-9.6

10

08

........

Low Priced Stock.......

82.1

3.4

11.9

V

3.5

12.6

164

Common Stock.

.07

5.0

4.2

5.9

None

10.7

10.7

843

0.3

.

Equipment

.10

21

1

958

0.4

.14 *

Chemical...............
94.1

89.0

88.9

,

Food............
Industrial Machinery

.06
14

Investing Company
•Investment
Ba for
for

preferreds.

date.

in

bonds

preferred

stocks:

tNo interim reports issued

JDecember figures revised.

subsidiary

Berg

and

Moody's

Aaa

through

Fund.

or

with

stockholders

on

this

§Portfolio exclusive of securities

associated companies.

**Merged

to

If Name changed from Russell

Tri-Continental

Corp,

effective

as

of

Change
Open-End

in

Cash Positions of

Companies:

Plus

61

Minus

Companies

Unchanged

Totals

5

2

20

Stock Funds

17

4

7

28

...

5.

4




Companies._

35

Railroad Bond

4

13

Railroad Equipment

10

Railroad Stock

10
12
^

b Tobacco

06

Utilities

13

WWW; •WMWn-<

13
.03

Steel

March 31, 1951.

Totals—All

09

Petroleum.

13

—

12

Mining

Investment

Balanced Funds

Closed-End Companies

13

Merchandising

SUMMARY

Bonds; Fitch's AAA thicugh BB and approximate equivalents

to

May 18, 1951.

11.4.

'.

7,630

—

Tri-Continental

payable May 31,

Funds:

7.0

1.240

-

7,275

General American Investors—.—

Lehman

3,340

1,257
1,350

—

Ridge Corp._______
Capital Administration
Public

following Second Quarter dividends

from net investment income have been
declared

shareholders of record

Blue

General

YEAR

OF CONSECUTIVE DIVIDENDS

Closed-End Companies:

American European Securities,_____—

-

,81.0

7.5

32.4

or

None
~..t

"0.3

-30.5"

investment dealers

None

None

17.1

i2.r

10,716
:
475

1,305

Republic Investors

Street

None

Prospectus and details from

94.6

None

,

C

78.5

94.1

"

'

3,550

England Fund—.

Wall

80.3

None

'

Fund

—

None

None

'

'4,607
t
t

2,800

1

Sovereign Investors

None

0.4"

7.8
"J

A Flexible Plan for

Systematic Investment

90.2

21.5"

19.0

2,257
«

:

*

5.9

■■*3.5;

,":j 122
*.

'4.2"

119.7;

7.140

PROGRAM

88.0

01

PURCHASE

SI

85.4

1.6

%

:

1,795

Investors

Selected American Shares

*

12.6

;

"

69

3,829

2,261

i

Massachusetts Investors Trust__
Mutual Investment Fund

-80.5

4.1

'

;

3,386

'

,,;

0.5

69

,

3.111
J;,, 77

_______^__

:Massachusetts Investors 2nd
<

85.0

_:o.7

.

2.7,

13.0

11,982

74

Loomis-Sayles Mutual Fund
Loomis-Sayles Second Fund.—

-

90.6

T5.4

2.5

v

3,544

2,733

Institutional Shs.—Stock & Bond
Group
Investment Co. of America

-

3.9

'

Investors Management Fund
Knickerbocker Fund
»

68.3

2.7

930

42

______________

*

•:

3,723

_____

Group Securities—Common Stock Fund
Incorporated Investors

'

96.6

.68.2

11.1

>18.8

1'

238

1,659

First Mutual Trust Fund___
Fundamental Investors

-

i

890

Fidelity Fund

96.4

6.7

'

1,710

11,256

Eaton & Howard Stock___
;

0.2

4.8

'

188

Shares

0.2
48

1

'2,127

1,748

±

,3.2
26.9

,

200

*

_______

Fund-

Dividend

*

1,136

'

Delaware

3.4,
27.0

"3,830

v;

196

_____

Street, Boston

51.2

22.9

50 State

803

33.9

.

~..

Putnam Fund Distributors, Inc.
•

17.4

35,625
/M.

26

76.9

59.6

-26.9-

'

31,745

——-

77.5

14.9

39.1 >

402-

-

4.4

; 31.7

'l/)o4ton

48.3

15.4

f.V*'

of

65.4

53.2

4.6

'

;

65.1

10.2

34.2

-

FUND
•

27.2

13.8

'<

121

*

,

-

12.8
■

-6.3

3.2

6,31,9

■

7,444

.

709

<

<

5,504

Shareholders Trust of Boston______

-10.5-

•;2,902

95

George Putnam Fund
JScudder-Stevens & Clark

-

109

>

•

694

__i

PUTNAM

March

7.8
/

406

Trust.

Securities—Income

Wisconsin

March

3.8

"

1,850

Balanced-

Nation Wide Securities.
Nesbett Fund

'

Dec.

42.7 '

2,640
4,198

Investors Mutual

National

~

End of

5,725

General Investors

,

March

ZJ/ie Seenne

.

Per Cent

-End of

43.3

-

Com. Stks. Plus Lower
Grade Bonds & Pfds.

.Per Cent *

„

—

Dec.

*

15,486
3,308

2,490

_____

Fund

^Mutual Fund

March^

2,885

Fully Administered Fund—Group Secur.
'

„

15,576

/Commonwealth Investment
Eaton

Per Cent
-End of

Dec.-

"A"

*

.Invest. Bonds &

"Preferred Stocks

•

End of-

Open-End Balanced Funds:
'American Business Shares

March, 1951

Net Cash & Gov'ts

13

.08

61

I

'

The Commercial and Financial Chronicle v.
20

.

Thursday, May 10, 1951

(1956)

Continued from page 19

Transactions in

Feature Trusts'

purchases

new

'

1'

—Bought—

No. of

No. of

NO; of

Shares

Trusts

Trusts

Shares

Trusts

Shares

Shares

Trusts

2(1)

6(3)

21.800

3(1)

700

3(3)

23,200

3(3)

3,500

3(2.) "

2,100

Hudson Bay Mining & Smelting

None*

None

Mclntyre Porcupine __________
Reynolds Metals Co._^___
_
Aluminum Co. of America

None

None

Agricultural Equipment:
4

Pacific

2,120.

1,000

1

200

Chrysler/_____________
Clark Equipment Co;

5,500

-

2

was

1(1)

' Libby-Owens-Ford Glass---—

7,000

7(3)

2(2)

4(3)

5(3)

1,900
1,800
17,700

1,500...
1,600

2(1)
2
2

W

Douglas Aircraft
United Aircrajf

4,300-

None

None*

Aircraft.

Lockheed

3,200,.

_

—

1,000

,

Canada

None

None

None

1

/ 90

5(1)

20,500

5

35,000
35,000

---------

*

1(1)

-

None

r__—^____

International Nickel
St. Joseph Lead

1(1)

*

3,000

*

17.450

.6(5);

•4(2).
Office Equipment:

5(2)

8,600

_______

3(1)

•

of

*

43,000

•

Aviation:,

Four managements also in¬
creased their- holdings of Union
Pacific. Purchases totaling 3,700
shares were unmatched
by any
2,000.

,

1,200

11,100

—-

3

3(1)

General Motors

18,200

3,600
37,700

;___

_

•.

Aluminium, Ltd.
Anaconda Copper
Climax Molybdenum-^
Consolidated Mining & Smelting

;

None

None

3(1)

3(1)

26,700 shares. There was one portfolio
elimination of a block of

Doehler-Jarvis Corp.

None.,

.None*

commitments totaling *

initial

two

Metals and Mining:

;

;

Auto and Auto Parts:.

5(3)

liked, two additions and

also well

-

L Case

J.

4,580

one

three portfolio
decreases totaling 10,900 shares in

Northern

.

No. of

Fe contrasted with

Southern;

-Sold.

No. of

off¬
setting, sale of 50 shares of Santa
However,

—Bought—

-Sold-

/

'

No.of

purchases, five trusts purchasing
29,100 shares of the former and a
Atchison.

or
*

-

No. of

like number acquiring 2,200 shares,
of

management groups. Issues which
Numerals in parentheses indicate number of managements making entirely
completely eliminating the stock from their portfolios.
sellers exceed buyers—by two or more

which buyers exceed sellers—or

No. of

•'

■

1951)

31,

managements sold than bought are in italics.

more

Purchases in 1st Quar.

1950-March

31,

(December

Rails and Utilities

4

Management Groups

Changes in Common Stock Holdings of 44 Investment

8(1)

■•

-

-

-

4,592Vz Inlernat'l Business Machines 9__

.

3

-4,932 V2

/,;

'

during the period. Louisville
Nashville was introduced into

sales
and

portfolios of three investment
companies for the first time this

the

Beverages:

2(1)

with

contrasted

3,200.
added.
Central

2

A like number of funds
12,000 shares of Illinois
with a minor offsetting;

voting trust cer¬
held in dis-'

None

5

4(2)

5(2)

1,300
1,400
8,300

2(1):
2(2)
3(2)

4(1) '

3,000

5,600

5

None

York

1,800

Z

Corp.

Cyanamid3
Chemical4
-.J-

Dow

1,900

Heyden Chemical

%

Anchor Hocking

2(1)

17,000
4,000

Corning Glass

6,000

Continental

\

emphasis

Rohm

500

2

and

None

American

None

McKesson

with
a

during

months'

this

the
period.

1

And

None

Six

3(2)

was

105,000

7(7)

64,100

15(7)

also!

3,180
2,300

9(6)

••

2(1)

59,490

,

5,000

while

there

was

of 90

decrease

shares.

It

interesting to note that

the

agement,

E.

W.

2(1)

Axe

added

were

to

the

remainder

the

portfolio
look

on

with

American

None

2

there

were

one

were

jdenum;

com¬

600

shares

found

Consolidated

3

3(3)

4(2)

3(2)

17.200

3(1)

5(3)

—

9

None

5(3)

None

4(3)

None

None

2(1)

41,400
26,300
11,000

4,490
:___•

None

None

«

3(1)

2(1)

* 12,000

None

None4

2

3,300

6(2)

4(1)
2(1)

9,300
7,500
5,500

6(2)

31,900

27.400

'<
Develop-'
None

i

__.

None

None

None

228 4/7

Commercial Credit
Irving Trust Co.__7__
Standard Accident Insurance---

5,000
None
None

1(1)
1(1)
None

None

Standard

North America

Brands

General

Foods

_i_

Biscuit /

Wilson

United

and

Fruit

Co._

Corp.-

*_

_

__

--..l.

___

2(1)

16,300

3

2,500

' 1,600

None

2(2)* ' ' 7,000 *
2(2);'
6

2(2)
1

$Continued

1(1)




10,600
2,100

3
:

iing of Canada, Hudson Bay Min-

21

'500.

3(3)

.

11,500
4,000
100

Allis Chalmers u
Fairbanks Morse

i'
.

Food Machinery &

None

10,700

4(1)

7,100

3(1)

8,800

4(1)

21,800

6(2)

8.200

5(1)

14,100

8(1)

None
1

100

1(1)
None

None

18,900

2

24,6'00

3(1)

39.760

5(1)

5(3)

3(1)
2(2)

5(4)

None
None
7,600
900

Chemical-^.- ;26,100-.

2

None.

None

400

1(1)
None

None

1

100

4,000

2(2)

None

None

2,000

1

None

2(1)

None

None

None

None

3(2)
5(2)

22,500

2(2)

None

Potomac Electric Power---

None

Public Sendee

200

Public Service

1

None

Virginia

None

Western Union Telegraph

None

Wisconsin

Electric

6,800

•

1

None

None

None

None

4,000

1

18,700

2(1)

19,700

5

3

3,300

2(2)

6,300

"A"

Power

4

4,800
2,500

of Indiana
Electric and Power

None

None

None

9,500

of Colorado

2

r

2

Radio and Amusement:

9,000

Paramount Pictures Corp

1

1,000

1,000

Loew's

1(1)

59,500

3(1)

3(2)

Railroads:

2,200

Atchison, Topeka & Santa Fe__
Atlantic

Coast

7(2)

Chicago,

Rock Island & Pacific

15,700

Erie

1

3(1)

12,000

Illinois

None

3(3)

21,000

Louisville

3,100

2(1)

New

800
None
100

Central
and

Nashville

3,200

York, Chicago & St. Louis

2(1)

11,300

Norfolk

4(2)

26,700

Northern Pacific

4(1)

2(2)

1,400

Reading

2(1)

2,000

St.

15(4)

30,100

and

Company

___

____________

Louis-San Francisco, v.t.c.__

Southern Pacific

None
None

Western

None

None

•

50
None

Line__

3,300
31,000

3(2)

1

7,000

51,360

______

None

4(2)

None

None

500

Niagara Mohawk Power Corp.--

2(1)

None

2

1,700
None

14,300

2(1)

None

Link Belt8
National Acme

None

None

27,000

:

None

2(1)

None

Foster Wheeler

None

11,400

1,300

None

200-

Emh'art Mfg. Co.

3(1)

12,600.

None

None

2

None

/'None
13,700
3,900
' * 2,500

None

Blaw-Knox Co.

—^

2

9,282

Mountain States Power Co._____
New England Electric System__
Northern Indiana Public Service
Pacific Gas and Electric 4
Rochester Gas & Electric
Texas Utilities
West Penn Electric 43
American Power & Light
Illinois Power Co
Iowa Power & Light

None

2(2)

Combustion Engineering-Super¬
heater

"

1

.

None

:Minnesota Power and Light
Montana Power Co.______

None

Insurance Co. of

Machinery and Industrial Equipment:

totaling 23,000 *

page

None

None

&
„

National

3,500

Oil and Gas

American Telephone & Teleg.__
Brooklyn Union Gas
Carolina Power & Light
Central & Southwest Corp
Central Illinois Light Co
Consolidated Edison of N. Y
Eastern Gas & Fuel Associates.
Florida Power and Light____—
General Public Utilities Corp.__
Internt'l Telephone & Telegraph
Middle South Utilities

32,500
52,000

5

increases in

on

Shamrock

10,600
7,400

_____

None

initial commit¬

no offsetting sales.
Mining and Smelt-

None

15,-300
131,000
39,700
49,000

10,000

1

new purchases, liker
made of Climax Molyb-

additions

None

21,500

Bank

None

None*

2,000

None
None /

8.600

Peoples Gas Light & Coke---

3(2)

Hanover

None

16,000

None

3(1)

Bank of America

v

-

12,400

None

2

2,000

None

tment. Three
wise

1,000

2(1)

KD

Investors.

But in this issue

also two

11,800

1

2,800

2(1)

ening in five portfolios of Alum¬

;holdings and

4

:8,6'00

panies, should be noted the light¬
inum of America.

26,800

Products--.

&

None/
None

3,700

Northern Natural Gas

5(2)

>

6,000

Research

■f

None
None

None

8,500

4(1)

Food Products:

hold¬

the bullish out¬

the above aluminum

3,700

None

placed in the

Republic

of

Contrasted

38,500

2

:

ings in Axe-Houghton Fund "A"
and

11,700

2(2)

purchased 2,500 shares of United1
States Foil, class B.
2,000 of these
shares

_____

None

4

None

Philco Corp.
Radio Corp. of America_!
' Westinghouse Electric -

None 7

None

4(2)

,

9,828 4/7 Central

4(1)

man-;

group,

Company

Panhandle Eastern Pipe Line___
Republic Natural Gas
Southern Natural Gas
United Gas Corp.
American Natural Gas
Mississippi River Fuel

None

Trust7

is also

one

20,400

3(1)

negligible

one

16,400

Robbins--—.

and

2(1)

-None;

El Paso Natural Gas

6,000

4(1)

5,500

ment

shares*

43,000

2(1)

3(2)

Master Electric Co._____.
Motorola

| others increasing present holdings.
totaled

Texas

9,900

None

Financial, Banking and Insurance:

making initial purchases and two

-Additions

2(4)

3(3)

well liked; three trusts*

very

Socony Vacuum
________
Standard Oil of Indiana

None

Johnson s

Admiral Corporation

21,000

3(2)

,

eliminated by another 4

Reynolds. Metals

company.

i

One block of 1,000

2

4(4)

brought a total of 21,800;
of Aluminium, Ltd., three r
of which made new commitments?
was

27,800
1,200

2,550
4,000

Electrical Equipment:

funds

in this issue.

4(3)

2

E. R.

None

KD

was

shares

'"shares

800

Imperial Oil Co., Ltd.--—_____
Louisiana Land & Explor.._.

None

Sharp and Dohme
Squibb and Sons

2,800

purchase trans¬

actions in the group of 25%.

None

None,

Home

"

1

600

11,700

Public Utilities:

Haas

Merck and Co.

500

pre¬

change, there also

decrease in total

4,000

4(3)

and

None
1

None

21.900

.___

Laboratories

None

parade

20,800

'

International

three

5(1)

{

Johnson

the

5(3)

800

Works_:

It

•

Nickel, Phelps Dodge, St. Joseph
.Lead and Kennecott which had
vious

5(2)

2(2)

None

Glass

Can

Drug Products:

the aluminum companies and away

led

2(1)

Containers and Glass:

3,867

as

2(1)

None

Union Carbide

700

3(1)

issues

800

None

1

•___

None

/

.

1,500.; ,v Ivy. /

None

7,600

Newport Industries

None

Natural Gas:

'5,6*00

Hercules

None

the equities of

from such

None

7,000

Powcler

None

None

Allied

to

2(1)

1

15,500
7.200

/://_/,

None

7,000

turned

2

None

_

Kodak

Eastman

40

2(2)

interest

5 360

6,500

Reduction___

Air

3(1)

None
/

Nopco Chemical

None

the non-ferrous metals as

among

,

Chemical

Monsanto

20,800
1,900

3(1)

in

;

18

2

4,200

_/.

___

4,777

1

*

portfolios of

shift

a

*

None

None-

,<.

Kerr-McGee Oil Industries____
Mission Development Co.11
Signal Oil and Gas "A"________
Sinclair Oil
Skelly Oil
Standard Oil of California 12—
Superior Oil Co.__
Warren Petroleum
Continental Oil (Del.)

,

10,600
204,775

1

American

12,744

,

was

.

.*/.

yv/v-

,

15,800

_________

7,000

Switch to Aluminums

.

There

; :

7

9.500

*

Corp... ______

3,600 V
6,480
* Atlantic Refining Co.

3,200

___!_

_

Gypsum

2

:

2(1)

38,350
10,300

2

Zellerbach

Amerada Petroleum
American Republics Corp.!.---./

1,100

?20,100

4(1)

Chemicals:

other companies.

:

1,800

"

600

-

St. Regis; Paper.^_i___-____1__
Uniorf Bag and Paper:_________
Time, Inc.

None'

2(1)

47,100
/■_

Weyerhaeuser Timber Co

shares of New York Central were

two

y

None

four
investment
against which there
were no offsetting increases.
Sea¬
board Air Line was unpopular with

the

'-*/

1

None

by

from

'100

Mfg.__—_____

j;:/'%•

'

;

mi

None

popular, five funds selling a
10(1)
total of 12,000 shares, two of these
2(1)
cleaning the issue out of their *
4
holdings.
One portfolio increase
2(1)
totaled 1,000 shares.
14,800 shares
of
Chesapeake and
Ohio were / None

eliminated

,

*

^

Petroleum:2

2(1):

None

too

while

-

Pennsylvania-Dixie Cement-—
Pittsburgh Plate Glass
United States Gypsum--—

None

"/

12,500"
4,400

Crown

4,200

7(6)
2(1)

National

1

Five other trusts,'

managements

3(2)

c

Noney

None

_L___—l___.
Cement._____

Products---

Steel

Johns-Manville

None

-1,500

1

V

Detroit

1,000

None

.

Radiator

American

.

3,500

5(1)

three

None

:..

2(1)
None

Plywood

States

Yale and Towne

None-

Pennsylvania also was not

liquidated
companies

United

1

however, thought enough of the'
issue to make additions of 13,600
shares.

»

"

2(1)

managements, five decreasing and*
two others eliminating a total of

18,500 shares.

6,000

Seating

General Portland

6,100

-

my.

the greatest number of

by

None

,2

.T-7T-*

American

10,153

None

tificates.

favor

20,300

9(2)
4(3)*

portfolios each were Atlantic*
Coast Line^ Erie, ;Nickel
Plate,7
Norfolk and Western, the Reading*

Great Northern was

None

None

_u___

Gooderham- &

*

National Distillers

5,800

5(2)

two

Co., and 'Frisco

None'-

None

Corp.-Seagrams

Walker,

Building Construction and Equipment:

4(3)

Also added to,

sale of 100 shares;

Hiram

3,500

of*

decrease

one

.15,100

Worts

Purchases of 21,000 shares

year.

Distillers

17,800

3(1)

,

Paper and Printing:.,

1(1)
None
3

None
1
1

*

None
None

2.000

1(1)

None

None

None-

None

2,100

3(1)

Volume 173

Number 5010

.

.

The Commercial and Financial Chronicle

.

'41

(1957)
—Bought—

•

.

No. of

No. of

Trusts

'

..

Shares

Railroads

5(2)

No. of

Southern

Union

None

5(2)

Railway

"Great

None

New

10,900

Pacific

Chesapeake

13,600

None

and

4(2)
7(2)

7,000

ing and Smelting, and Anaconda
were each
acquired by three man¬
agements. The only liquidation in

2(2)

these three issues

5(3)

by

14,800

Northern pfd
Central___

York

1,000

Pennsylvania

3,500

None

18.500

Ohio

1

Seaboard Air Line

12,000

■___

•

40,100

of

&

Steel

Allied

3,000

4(1)
2

Union'
Interstate Department

1,700

4

49,000

6

Marshall

None

None

None

4(1)

1(1)

J.

2,500

C.

None
None

None

portfolio
amount

1

tional

from

a

Steel

200 ~

Stores__

3,300
8,200

Ward

3(2)

11,800

6(1)

2,000

3(1)

10,700

Penney Co.j

Western Auto

3

3(3)

___

Supply

332,300

7(2)

25,700

3

Goodrich is

Goodyear

4,000

United

16,500
________

.

States Rubber

part

8(1)

15,700

Allegheny

Ludlum

Crucible Steel 16

2(1)

5,000

48,500

Jones

45,000

Granite City Steel"
and

6,850

Sharon

Steel

United

500

2,100

General

None

14,000

1(1)

5,000

States

2

1(1)

None

Laughlin"

33,700

1

2(1)

2,000

Republic Steel

2(1)

Corp

1

None

National Steel Corp

3

3,300

Refractories

None

2,600'

Steel

3(1)

2(2)

3,400

Burlington Mills
Cone

8,800

ment

and

5

600

9,350

Pacific

2(1)

8,000

Robbins

4

25,300

J. P.

3(1)

20,700

Mills

United

*

None

None
None

Merchants

100

and

Mfgrs.__

1

5,000

Offsetting

1

Philip Morris

20

4(3)

5,100

4(1)

commitments
decreases

Miscellaneous:
64,000

5(1)

Optical Co.___

None

10,000

Moore-McCormack Lines

Corporation

totaling
64,100
Liquidation in this stock

3

None

vision

None

and

these

both

in

of

Master

SUMMARY
Balance

Purchases and

Sales

Electric

Securities

Stock Funds

Closed-End

Sold

9

.

61

Totals—All

Matched

8

•

Totals

3

7
2

20

8

3

Companies-_

United

chases

each

bought 20,700

Merchants

while

two

made

were

Continued

on

of

8

25

17

:

28
13

19

61

875

shares received

10%

stock

25%

as

•

i-

authorized

dealers,

or

336

DENVER

—-

1st

2

National

Bank

Teletype—DN

Building

249

COLORADO

as

S3H

2*2

en¬

GROWTH

Cor¬

two

A Mutual Fund

INDUSTRY

of

were

Priced at

new

sales.

also

SHARES,

103% of net asset value.

inc.

bought
Prospectus from

Feature of the steels

eight trusts

as

was

added

Armco

total

a

amounted

to

700

shares.

dealer

your

or

HARLAND ALLEN ASSOCIATES

of

15,700 shares; two small decreases

28 EAST JACKSON
BOULEVARD—CHICAGO 4, ILLINOIS

Second

place in the fund popularity went
United

to

States

managements

Steel,

made

as

sssssa

seven

additions

3

Partly from

4

Major portion purchased

5

1,147

conversion

of

shares represent

additions

two

through

5%

exercise

of

Additions

9

2,337'/2

result

conversion

from

2-for-l

shares received

10

From

as

12

13

of

—in

portfolio decreases of 22,100 shares

2,600

the

That's what

industry's leader was the di¬
vided opinion on Bethlehem.. Six

shares.

rights.

basis,

one

for

split-up except

one

for each

two

Partially

*

a

"•

•

3,000 shares

received

From 2-for-l

split-up excluding 1,500 shares.

in

73,900 shares distributed

2-for-l

as

50%

dividend.

NQTE—This

survey

shares
covers

trusts'sponsored bythe several

.

over

during the

•

*

Shares.

$8,000

••

>

'

''JU

•

during February

Another
.

.

.

energetic salesman,
and several others drew

same

month*

net

investment

a

from
63

4-for-l

split-up,

-

treated

as

a

or

unit.'

Securities

in the, companion table)

are

we

of our selling team, you're free from all routine
handle them for you — and keep you supplied with
too.

If

you'd like to know details about opportunities in your territory,
phone or write King Merritt, President, at this office.

share,

income,

of

record

KING MERRITT 6-

Chester D.

sales
.

group-are

—

-

investment companies, but purchases

one .management

salesmen.

our

member

helpful selling ideas,

declared

,

For-

.




have

May 15, 1951.

exampie,

not .appear

Directors

shareholders

*

trusts, sponsored
by Calvin -Bullock are considered as
having the weight of one manager.
Individual portfolio changes of the two
Loomis-Sayles funds are not surveyed, but those of Overseas

dees

•

payable May 29, 1951, to

stock distribution.

123,600

a

details

Quarterly Divided

dividend of 15 cents

from

split-up.

<#

of

10th
The

■

17

5%

Fund
of

'

'

nationwide

As

split-up.

stock distribution.

18

Addition.«f

than $5,000

a

new
*

327,000 shares from 3-for-I

16

21

*

salesmen actually earned

our

Mutual

commissions

ration for

IH<-°
one

split-up..

20

of

organization operating in 25 states, we specialize
in promoting just one
type of security — Mutual lund Shares.
This concentration permits more effective selling, and more remune¬

owned.

held.

10

15

19

selling

more

5% stock dividend.

Basis,

Two-for-1

2%

one

As

shares.

split-up except one block of 7,200 shares.
7,700 shares acquired through exercise of
rights entitling holder-to
.share

as

,
.

seven.

1,400

month!

•

1951,

Represents 2-for-l

for each

one

earned

stock

$11,000 in Commissions

on

,

Mission Corp.

14

,

Over

Con¬

bullishness

20% stock dividend.

11

of

the

bonds.

12,890

Represents in part stock
distribution;

8

totalling

with

dividend.

stock

6

from

trasting

preferred issue.

7

shares

other investment companies.

stack dividend.

distribution plus

22

FOUNDERS MUTUAL DEPOSITOR CORPORATION

shares; 2,600 shares were
lightened in the holdings of three

FOOTNOTES
1

both

page

33,700

2

and
pur¬

Income Plan

Investment

13

Companies.—

Three trusts

of

Manufacturers

Steels Bought

Bought

Balanced Funds

shares.
shares

Prospectus may be obtained from

of

were no

was

increas¬

by two investment companies.

Portfolio

Companies
Open-End Companies:

was

Admiral

issues

trusts

shares.

Motorola;

commitments. There

of

-

Three managements

favorites

number

ing holdings of- Stevens by 25,$00

the

purchases in the tele¬

poration

Stevens

Accumulative Plan

issue.

trusts made initial 1951 pur¬

each made

None

Minnesota Mining and
Mfg. 2i__

6,000

Radio

P.

interest HU

Systematic Payment Plan

dwarfed by com¬
Enthusiasm
was
also

for

J.

FOUNDERS MUTUAL FUND

popu¬

this

like

a

slight

de¬

holdings

and

bullish

add¬
ing 9,350 shares of the former and

but

was

were

tirely absent.
American

127,200

2(1)

seven

in

in

Field

Mills
most

the textile group, four funds

pre¬

period,

Stores, which

managements adding a
105,000 shares, six making

chases

,

2(1)

extremely

Pacific
group

the favorite
merchandise issue

was

lar, nine
total of

4,490 shares

39,120
___,

was

months'

port¬

four

-

Textiles Bought

aroused

retail

the

amounting to 27,400 shares.

shown

American Tobacco

and

in both Sears Roebuck and Wool-

Stocks

the

Marshall

initial

for

two

were

in

each

worth.

in
greatest
demand,
six
trusts adding
47,300 shares. There
was one lone sale
of a block of
200 shares.
Allied

was

also

Three

Tobaccos:

None

stock

pre¬

total

a

stock

Philco

parison.

5,440

the

Five funds sold

three

margin.

section

represented

of

Re¬

sellers

purchases

of 11,900.
Three
lightened holdingsdo'f
Federated Department Stores, May
Department Stores, Penney and
Western Auto. Supply.
Transac¬
tion were negligible and divided

8,800 shares of National while
three decreased
holdings of 3,300
shares of the refractories
company.

portfolios, almost

eliminations

new

Stevens and Co

which

four

funds

only issues in

still overshadowed
sales by a

Equipment

added to 15

the

which

number

as
disposed of > this
during the final xjuarter of
1950.
-However, liquidation A bf
11;800 in this issue was offset by

of

from exchanges from the convert¬
ible 2.65% of 1973.
of

in

decreased one-third from the

pre¬

half

were

Six
Montgomery Ward, the
companies.

issue

by

Walker

each bought.'by

were

investment

same

City Steel

represented

shares;

liquidation. Bond,
Department Stores and

trusts sold

and

a portion of
Crucible resulted
dividend. National

Harbison

group

vious

creases

None

None

Mills

and

dominated.

ceding quarter. Westinghouse was
the leading issue, although some
of the portfolio increases resulted

were

single

in

stock

a

fractories
this

two

split-up and

increase

The Retail

two of
eliminations

television

placements

2

None

2-for-l
the

Purchases

sales,

notable since purchase transactions
almost doubled those of the

folio

19

Mills

4

None

three

Buying in the electrical equip¬

year.

112,800

9

was

currently

no

Grand Union

pur¬

Jones

Granite

partis

59,490 shares

Textiles:

15(2)

■

with

Electrical

1(1)

700

7(1)

.7

Interest

which
represented
from portfolios.

1

3,000

Armco Steel

3,618

5(3)

three purchases of 1,800

were

shares.

Buying of Televisions and

3,000

..

the

Interna¬

ing quarter, currently ranked sec¬
ond in
unpopularity, the decreases
in the holdings of five trusts to¬
taling 35,000 shares. Offsetting in

Steels:

3(1)

4

sold.

Nickel, also noted above as
top favorite during the preced¬

trasted

II

1,000

equalled

stock

light and
divided in Kennecott, while fouV
purchases of Phelps Dodge con¬

2

500

•

increases

to

was

Interstate

market, although these

Laughlin and
in

there

either

on

represented 'by three
as contrasted with
a

were

2

of

ii

popularity as five

in

managements adding 15,700

Allegheny Ludlum

Additions

2,200

Rubber and Tires:

19(1)

bulls in this issue might take con¬
from the fact that three

solation

side of the
were

None

—

Department

Montgomery

1,000

margin the lone decrease

chalked up 3,000
shades

Stores—

May Department Stores

11,900

1

None

However,

second

was

*.

the

of 5,000 shares.

;___

Field

Federated

of

sale.

holdings.

in the preceding quarter,

-

funds
purchased
32,100
shares,
45,000, tenfold three of which made new com¬
preceding quarter. mitments. Liquidation in one port¬
Three initial
purchases and two folio
amounted
to
1,800 .shares.
portfolio additions
outstripped by Gimbel was also well liked, four
a
wide
that

from

their

additions

40,700 shares. The total
number
shares of Republic
added dur¬
ing the period was

None

None"

^_____

Kroger Co. *4

47,300

None

__i_

was

seven

of

chases

3(2)

None

Brothers

Grand

totaled

part

of

1

'

1,800

Stores

Gimbel

4,100

2(1)

Stores

Bond

15,700

Porcupine

offsetting in

Selling in the nonferrous group
featured by St. Joseph Lead.
Six managements liquidated a to¬
tal of 17,450
shares, five of which
completely eliminated this stock

....

7,500

Retail Trade:

2

Mclntyre

1,200 shares.

National Malleable

32,100

represented

a

j

Castings

5(3)

was

portfolio elimination of 3,000
Anaconda. Two initial purchases

3

Railroad Equipment:
None

Rails and Utilities Feature
Trusts' Purchases

3(1)

None

1(1)

None

Continued from page 20

No. of

Trusts

(Continued):

3,700,

None

-r

Shares

29,100

4

-Sold

included.1

►

(which

'

■

22 East 40th

Tripp
.

President

■;

.■

135 S. LaSoUe Street, Chicago 3,Illinois

Murray Hill 9-1586

:
.

CO., INC.

St., New York 16, N. Y.

;

-

OFFICES FROM

COAST

TO

COAST

Financial Chronicle

The Commercial and

.

Thursday, May 10, 1951

.

.

(1958)

22

nonessential

sharp curtailment of

In

Oil

"A"

and

Opinion was divided on Gulf Oil
Phillips Petroleum.

Johns-lV^anville and Weyerhaeu¬
this group.
were (he ser Timber were least well liked
of the building stocks. Five com¬
rule in tne paper stocks, buying
predominated in few individual panies lightened holdings of both
American Radiator, Na¬
issues.
Two trusts made initial issues.
commitments in Union Bag and tional Gypsum, and United States
Paper and another added to port¬ Gypsum also wefre disposed of on
Favored
in the group
folio holdings.
There were also balance.
two purchases each of Crown Zel- were General Portland Cement,
Jerbach and St. Regis Paper offset American Seating and Yale and
Towne.
by no sailing. The liquor issues
were favored, but buying was not
Liquidation of Chemicals
heavy. Hiram Walker was added
Selling in the chemicals was
to
two
portfolios, and initially
featured
by Union Carbide and
placed in a third. Purchases to¬
taled 15,100 shares offset by no Hercules Powder, five funds
liquidation.
Two trusts bought liquidating 5,600 shares of Carbide
and the same number, disposing
17,800 shares of Distillers Corpo¬

concentrated selling in
Although purcnases

ber added 3,500

In

Distillers.

there also was

Also

shares of National
both these issues
an absence of sell¬

Kodak, Air Reduction and

banking,

in

Activity

New¬

Opinion was
slightly weighted with the bears

port Industries.

ing.
and insurance stocks

of the latter stock.
unpopular
were
Eastman

of 76,500 shares

ration-Seagrams and a nice num¬

financial

while

duPont

in

Dow, if lack of

consideration be given to the stock

was compa¬

acquired through rights, was given
a narrow edge by the bulls.
Mon¬

ratively light and as usual ranged
over a wide number of issues. Two
initial commitments were made in

santo, however, was the most pop¬
ular

the

in

with

group

interest
of

Irving Trust totaling 38,500 shares.
also
indicated
in
purchases
A like number of purchases were,
Heyden and Nopco Chemical.
made of Bank of America, but

equalled 20,400.
increased in

only

total

share

portfolios;

dividend.

stock

l-for-7

trust eliminated both the

holdings

previous

and

portfolio elimination. In contrast,
opinion was
divided on C.I.T.
Financial; three purchases offset¬

has

Motors,

Herbeft

in Gen-

S

Also

sold

balance

on

panies

by

Doehler-Jarvis

and

three.

light and divided
of the market in

was

either

side

aviation

the

manufacturers,

the

Among

issues.

transport

serving
econo.-

were

United

Harold

craft

totaling

8,600

Detroit

these

Director

Detroit

with

Transactions in the Oils

-

,

Selling in the petroleum group
about

35%, while pur¬

chases decreased a like

percentage
amount from that of the previous
Texas Company was the

quarter.
least

issue,

popular

disposing
Shares.

of

Half

purchases

as

of

funds

eight

14,100
trusts made

total

a

many

of

shares.

9,900

the

Mead

the

Corp.

U.

ceeded

shares while there
ditions of 27,800.

portfolios.
balance

Louisiana

was

and

in

sold

was

were

four ad¬

Standard of In¬

the previous

lightened

in

five

Likewise liquidated
were

Land

Continental
and

on

Oil,

Exploration,

Imperial Oil Co., Ltd. Buying
Concentrated

in

Sinclair

Oil

Skelly, five additions of the

former totaling

15,800 shares and




He

was

Whitaker

also

was

Howard E.

elected

Exec¬

utive Vice-President and Director
of the
has

corporation.

been

Mr. Whitaker

Vice-President

a

and

replaces J. O. Mason, who retires

although remaining in an advisory
capacity. H. T. Mead and Herbert
Kidd

both

were

Mr.

Vice-

elected

Kidd

is

also

Vice-President and General Man¬

of Macon Kraft Co.,

sub¬
sidiary of The Mead Corp.' Mr.
Mead
was
formerly assistant to
ager

the

Chairman

of

a

the Board

offices in New York.

Dayton.

was

urer.

sumers

consumer

on

home

positive

income.

mortgage's

during

monthly

1950,

or

about 30%<

jfeove the monthly av¬
lf)4$ and 1949. Outstand¬

erage for

ing mortgage/debt at. the end of
1950 was 19$ above the level at
end

billion)

of

while disposable in¬
advanced only about

had

come

10%.

about

1949 "(totaling

the

$44

; ;

-■ ;

v

debt suggests a third

and mortgage

a

pending
cutbacks
in consumer
goods make any major redaction
in the general price level very

-

improbable. So, price expectations
of the major factors 'that

—one

likely

not

character—are

cumulative

its

recession

gives

to :

un¬

dergo any sharp change.
Finally, the demands of the re¬

credit

The increase in consumer

were

ago—controls and the

unexpected
abundance of xonsumer
goods have seen to that—
climbing military output and im¬

recorded at the rate of about $1.3
billion

they

than

now

few months

were

for the expan¬
nation's-productive

armament program

aspe.ct of the recession argument.
The danger of saturation in the

the

of

sion

.

March.

in

y

Archibald

appointed

D.

Fraser

Assistant

Treas¬

the

were

there

But

was

surface
were

symp¬

number

a

symptoms drew attention.
striking of these was un¬

rea

point,

the subject

but

promptly dropped when Ko¬
switched the concern of re¬

saturation
now

from

(and home builders)

tailers

be

It might

shortage.

to

the

that

argued

unex¬

avalanche of homes and
doubtedly the state of inventories. durable goods that has poured into
the market in the nine months
Going into March, total business
inventories (retail, wholesale and since June; on top of the accumu¬
manufacturing) were roughly-at lations from'1948 and 1949, have
$65 billion—25% -above a year in* fact produced a kind of satura¬
about

and

level

at

the

invasion.

that

20%

time

the

above

about

That

have

arrived

•

Price
A

;

,

at

vs.

par¬

recession

impressive;

about

29%

months of the

level and
their level in

above

21%

While by far the
greater part of the increases rep¬
resented higher prices,
this ob¬
servation provided small comfort

June,1950.

for the retailer who saw his dollar

sales" volume

the

shrinking." At

ers'

prices

sales,

the

although

retail volume since
Korea had tended to disguise this
condition.

-

:

"

•

Manufacturers' inventories were
in

somewhat

22%

from

from

sales

a

June,
was

ago,

and

the

ratio

better
year

1950,

still

far

shape.

a'go,

and

their
below

Up

18%

ratio
a

to

year

far below the level of
prior to the inventory

quarter

first

about

quarter of

than

been reversed

real disposable in¬

was

wide swings of

the
two

year, consum¬

condition may have

in March, but
come
for the
whole

faster

on

first

1%

below

as

a

the

1950.

Evidence of strong

resistance to

prices was present in virtually all
consumer markets
in March and

general business pic¬

who

it

however painful

turers

implica¬

have any broad

for retailers

be

may

(and those manufac¬

catering

have

the

to

not

yet

consumer

developed

a

military backlog). Something like
such

recession

a

in

was

fact

ex¬

perienced late last year, when the

of retail itrade seasonally
adjusted)-fell a dramatic 10% in
the three months
following the

pace

heavy buying of July and August.
The shrinkage could

sharper
But

weekly earnings in manufac¬
turing (and total personal income
remained constant).
Still tenta¬
tive estimates indicate that -this

fourth

inventories

to

believe

to

can

escape

be

as

now.

there

is

that

little

such

a

\

recession

The

through

structure.
Labor Force

The

slowup

civilian

goods

to

.

reason

in force from the retail

the business

out

sharp
.

still

market and work its way

age

had

level,

ture,

or

faster than aver¬

clearly moved ahead considerably

retail

the

new

rose

seem

tions for the

Wage Rise

in

side:

were

year-ago

replacement-

further consideration

inventories

their

markets may

a

plus-normal-growth basis.

liquida¬

sharp

tion of 1949.

ticularly

tion.

further¬

were,

these

is

their

above the peak

preceded the

Retail

pected

Korean

above

of

They

about 14%

more,

with

In his new

capacity he will make his office
in

the drain

Nonfarm

Again, while price

expectations on the part of con¬
and businessmen are; less

spent for nonessentials.

There have been other increases
in

•

was

1

o u s

underlying conditions to which

Most

suc¬

by Robert H. Lee, a part¬

of Drexel & Co.

ner

Presidents.

21,800

oL H.' Gates

Government.

S.

of

ago

Lloyd, of Drexel & Co., Phila¬
delphia, who' is: serving with ithe

A.

totaled

Sales

also

,

reelected

was.

exception

Vacuum.

quarter,

,

board of directors

present

Four
Companies decreased holdings and
two
others
eliminated
Socony

diana,

Motors

;

s.,

...

Elect Directors

disposed of 3,200 shares of Douglas.

increased

General

and

Corp.

of

and

Research.

of

had been with the National Bank

The

and

goods outlets,

i

se r

These

toms.

offsetting purchases equaled half
the above sold.
Four trusts also

stores

department

Inventory Picture

Previously, he had been associated
with
MA.
Manley & Co. of

Two

shares.

durable

X. Schreder

Air¬

in

of

of

Department.

as

some

aggregate per¬

in

decline

income.

sonal

of in¬

3%

than

more

saturation

Treasury

five

made

sales

scarce

the

in

where

area

capacity gives strong assurance
automobile, housing and appliance "that
spending in the critical capi¬
markets had been considered se¬
tal goods area will continue up¬
Easter sales of soft goods fell far riously in 1949.
Discussion con¬ ward even in the face of a sharp
below
expectations, and in the tinued in early 1950, while record and protracted dislocation of con¬
weeks following Easter wholesale gains were being rolled up in pre¬ sumer markets.
-4
;
markets that were
trade suffered
a! more-than- cisely those
The
recession possible
under
supposed to be approaching the
seasonal slackening.
such
limitations
does
not
now

1942,

of

in¬
many
of
enough to
Even

allocation
controls
as
price controls, actually

as

sagging

Earlier in his career, Mr. Schreder

Activity
•on

in

an

mist.

were

level.
commodities,
price

sales

Group
ities,

after

Libby-Owens-Ford by four com¬

wholesale

other

Inc.;

One small block of 200 shares was
sold.

by

e c u r

as

commodities seemed to fore¬
h^further decline in the

slightly in the first two
April.
And
buying
interest in the discretionary con¬
sumer
markets, judging irom

An¬

joined

additions totaled
18,200 shares. By contrast, buyers
predominated in Chrysler,
two
portfolio increases and three initial
commitments totaling 5,500 shares.

time,

that

At

weeks

Mr. Schreder

On the other side of

eliminations.

prices have moved

significant
declines in spot-market prices of
April.

much

come

drifting downward in early

were

well

derson, Presi¬

the market, three

Yet wholesale

sent

serious

It would of course repre¬

income.

declined

dent.

of 37,700 shares, three
which
represented
complete

disposing
of

con¬

upward

some

sideways since mid-February and

require

the

of

company,
it
was
an¬

managements

seven

could

and

require

which have been

di¬

of

nounced

oral

ceilings

ceivably

dustrial

the

to

board

Selling in the motor issues was
by transactions

City,

been

rectors

Non-Uniformity in the Motors

featured

York

an

Regulation W was tightened to
impose 15-mOnth repayment pe¬

shadow

Group Securities, Ine.,

New

into

moved

since the middle of October, wnen

Con¬

adjustments in the ceilings them¬

Schreder, Executive
and
Director 'of

Street,

consumers

up

,

basic

Wall

January,

to

stocked

liquidation may be necessary. The
housing and durable goods indus¬
tries, which played a critical role
riods in the automotive, appliance
in supporting both demand • and
and
homefurnishings
markets.
ahead if the planners of tne
output in 1949, have eaten further
mobilization evCn approach their Assuming ah average repayment
into the postwar market.
'
period of about 12 months for the
employment goals.
But some of the basic conditions
debt as a whole, consumers have
Even under optimistic assump¬
of recession are clearly missing.
incurred
a
monthly repayment
tions as to total output, these "con¬
Barring any change in the scope
obligation possibly $500 million
ditions
appear
to
spell
out
a
of the rearmament programs it is
greater than in February, 1950.
man-sized
inflationary gap that
hard to visualize unemployment
This $500 million
represents,
should keep prices pressed against
on
a scale that would
cause any
roughly, 3% of current disposable
their

Research of
63

a

June

that basic ma¬
in tight supply

continue

terials

income, now at
an annual rate of $216 billion, will
also certainly rise over the months

Vice-President

elected

like number of sales,

a

X.

Harold

its

portfolio. Commercial Credit wa%
purchased on balance by four in¬
vestment companies; there was one

ting

rate in the last half of 1950.

Group Sees. Director

Another
dividend

from

the

sumers' disposable

Harold Schreder Named

ad¬

of these

one

resulted in part from the

ditions

dergo

of 1948.

end

the

However, the fact

selves, the report observes.

Central Hanover was
two

on

price

this,

partly from fear of
in¬ shortages, but also to beat higher
Conference Board, an economic re¬ suggests that manufacturing
prices anticipated in the future.
search organization points out that ventories have departed radically
Inven¬ And now, as sales have begun to
business statistics
nave
recently from a normal balance.
those materials which signal a downturn in consumer
been tolling off a series of danger tories of
are' not\in* tight * supply
have prices, the consumer might sit
signals that, at least in ordinary
placidly by to await still lower
times, would call for a rather dim apparently increased at a much
prices. (Some durable goods man¬
view of the near term.
This' in faster rate than aggregate inven¬
ufacturers have already concluded
tories.
v
*—;
spite of the fact that the basic
that
intensified promotional ef¬
Consumer Debt
supply - demand relationships of
forts rather than price reductions
the economy retain clearly infla¬
Going into March, total con¬
are called for now.)
sumer
credit
'outstanding
tionary implications.
amounted to $19.5 billion, about
The Outlook
Defense expenditures, now run¬
20% above a year ago and more
ning at nearly $30 billion (annual
In some ways the outlook may
than 10% above "June, 1950.
And
rate), are expected to increase
be more ominous now than it was
the • increase in -the monthly re¬
perhaps 70% in the coming year.
in late 1948, when recession took
payment obligations of consumers
Business expenditures for plant
hold.
Consumer stocks and debt
and equipment in the last three may be considerably greater than
are
higher. Business investment
the increase in the debt itself.
A
quarters of 1951 are expected to
in inventories is higher.
Prices *
rise to an annual rate of close to major part of the debt now out¬
are
higher. Business loans have
standing has
been contracted
$25 billion, about 20% above the
lights,"

and

general

no

was

"Business High¬
National Industrial

report

at

liquidation

special release of its cur¬

a

rent

Petroleum.

Warren

and

Oil

Signal

Industries,

Gas

additions were repre¬
sented solely by the 50% stock
There

favored

Also

these

dividend.

equaling 10,600.
were
Kerr-McGee

At junctures like
expectations can un¬
very snarp change. From

interest.

ing

ships retain inflationary implications.

four of the latter

Mills. Fifteen
funds increased their holdings in
Burlington Mills, but at least half
Bobbins and Cone

assurance

situation, there is little
that price cuts alone

would, in ordinary times, produce
an
immediate resurgence of buy¬

supply-demand relation¬

despite these conditions,

but holds,

.

In such a

and business debts,

heavy inventories and rising consumer

to

purchases.

special report, points

National Industrial Conference Board, in

Rails and Utilities Feature
Trusts' Purchases

of

Outlook

Inventory Picture and the Business

Continued from page 21

demand • for
help to shake
the labor force and permit it

in

may

gravitate more rapidly into war

work than it would in the face of

booming civilian demand.
: :
In early April, cutbacks of em¬

ployment
dustry
metal

in

the

because

of

automotive- in¬
limitations on

consumption

were

appear¬

ing simultaneously with layoffs in
early April. Part of this resistance some appliance and soft-goods inmay stem from heavy consumer
? dustrles
because of falling - de¬
stocks' (of
storable nondurables mand.
The
television
industry,
and semidurable goods, as well as
which by March had subsituted its
durables).
The decline in real way out of many of its major sup¬

earnings, at
are

heavy,

a

time when stocks

might well lead

to a

ply problems, began to cut output
because of the pressure

of backed-

Volume 173

Number 5010

.

.

.

The Commercial and

Financial Chronicle

23

(1959)
up stocks at the distributor level.
If cutbacks in
this and other
consumer

Closing Tax "Loopholes"

industries should grow
ahead, the tightness

in the weeks

What is

ease

appreciably.

facilitate

That

further

rapid

a

would

rises

a.loophole?! If the lavTdoes

definite

in the skilled labor
market could

action

this is not

in

or

is British law.

ployment that normally
the

first months

not

materialize

of

this

unem-

year,

-

in

goods
Tne

manufacturing

spring revival

tail lull

the

thus be hard to

may

in

coming

consumer's

vives,

he

scarcity,

find

well

as

'

honorable

as

of

West

issue of 100,5.10% cumulative

share plus accrued

The

will

proceeds

from

the

apply

Mises before

bank

loans

mamber firms of Stock

the

authorized

in¬

corporations

expansion

of

day at Jan. 31,
MCF a day, at
of

natural

gas

estimated

benefit

of

for

the

a

Oct.

of

demption

105

prices

range

from

range
i

the

LOS

-

E.

ANGELES, Calif.—Arthur

Hcskin

is

now

affiliated

Walslcn,

Hoffman

550 South

with

Spring Street.

&

Goodwin,

(Special to The Financial Chronicle)

OAKLAND,

Calif.—Bernice M.

Anceregg has been added to the
staff; of
Bank

Frank

Knowlton

&

Co.,

of America Building.

.

SAN

FRANCISCO, Calif.—Wil¬

Amyas

Ames

"Should
York

Walter Maynard

~

members

of

the

New

Stock

Exchange be allowed
incorpora.e?" was the topic of

to

a

vote

among

bership

was

the general

mem¬

taken about twice

as

voted against as vo ed for.
He said that the corporate form

many

make

pensions

possible,
would allow the
building up of
reserves to meet
losses, and would
make the raising of capital easier.
The
tax
advantage would vary
from firm to firm, and has been

lessened

Mr.

by

profits

excess

Maynard,

taxes,

liam C. Cheesman has been added
to

that

the

ship

is

staff of Hannaford & Tal¬

bot, 519 California Street.




.'

a

partner

•

„

Current

'

.

r

,

Aetna

Insurance

Agricultural
Boston

Co._,

Insurance(Newark)

Fire

Continental
Federal

Dec.

Bid

t

1051

t

30,

Price Range

Change

High

L-4%

1050

!

Low

53

.;

57%

61%

52

71

:

Insurance

Insurance

Camden

Bid Price

Market

„

.■

08

-+3

75

68

22%

—1%
—
%

22%

19%

59%

54

21

•

58

.

20%

-f~ %

22%

207/s

68%

—

Insurance

5814

20%!

.

70%

—2

78

64%

75

+6

82

75

Insurance81

'

"

Fidelity-rPhenix

68 %

Philadelphia—

Fire Assoc. of

-_J__

56%

Fireman's Fund Insurance—

Great

American

Hartford
Home

Insurance

78

65

—1%
—3%

62%

55%

58%

47

—1%

22%

19%

53%

+2%

56%

52

34%

—

—

-j-3%

31 %

32%

32%

34%

—7

34%

30%

34

%

—

136

——35%

Co. of North Amer.

1%

22%

'

Fire. Insurance-—-.129

Insurance

—

58
57%

21
56%

Hanover Fire Insurance

He

69%

,

54

Fireman's Insurance (Newark)
Glens Falls Insurance—L__

31%

139%

%-l

122

34%

36

64

-j-8%

73%

62

55%

72 %

~f-2

62

55%

36%

33%

42

38

33% :

—

39

39%

—

75%

84

—8%

84%

74

—

29

30%

—1%

30%

28%

31%

28%

+3

33%

34%
45%

31%

+2%

34%

32

Springfield Fire & Marine Ins.

41%

46

41 %

Westchester Fire Insurance

21

22%

+4%
—1%

allow the

was

in

payment of

powerful

a

favor

incorpora¬

of

New

argu¬

permissive

in¬

order

to

nard
As

what

meet

temporary

be

may

advantage,

Mr.

far

unlimited
little

today

validity
had

the firm

sa\V no

to

incorporation,

"nature

superior.''

of

the

He

in

into the last

move

we

fire insurance stock group

!

In the first

all

argued

Exchange

said

that

it

28%

22%

seems

19%

that the

should do considerably better.

place, there is the likelihood that

.•

number of the

a

<

Invest¬

ments results this year have continued to show good gains over a
year

In

ago.

addition

higher

to

dividends

received

on

•

equity

investments, the firming of interest rates has meant that income
from this source is also

gaining. These considerations, along with

a

larger volume of invested funds, indicates that investment income
will be higher this year.
Inasmuch

.

investment income is

as

minants of dividend
reflected in

more

policies,

a

one

of the

primary deter¬

favorable showing is likely to be

liberal dividend

payments.

Another factor in the current outlook that could make for

improvement in market valuations would be
final

the

months

of 'the

year.

In

an

decline in losses for

a

other words, while losses are

currently running ahead of those of last

it is not likely that

year,

,

the catastrophes suffered in the windstorms of last November will
be

repeated. At the

same

time

a

larger volume of premiums should

enable most companies to offset some
penses.

Thus results for the

1950.

of

why

when

most

their

capital
He said he

year

increase in losses and

ex¬

should at least equal those of

'

•

the

NATIONAL BANK
of INDIA. LIMITED

right to

"

now

into

has

could

not

Kenya Colony and Uganda
Head

be

Office:

26,

London,

corporation-member

Bishopsgate,
E. C.

Branches in India, Burma,

by-laws.«'

Colony,

Kericho,
and

King Merritt Co.

Paid-up

Kenya,

Capital-,
Fund-

&

-£4,000,000
£2,000,000

conducts every

•

•

.

£2,500,000

Bank

"

OF

THE

1950

benking

description of
and exchange business

ANALYSIS

&

EARNINGS

OF

50 Fire & Casualty
Insurance Stocks
,

Will

be

sent

request

on

Laird, Bissell & Meeds
Members

New York Stock Exchange

Members

New

York

Curb

Exchange

120 BROADWAY, NEW YORK 5,

Bell

Teletype—NY

N. Y.

7-3500

1-1248-49

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

Co.,

,

Trusteeships and Executorships
also undertaken

Inc.

■—tv,

COMPARISON

OUR

Telephone: BArclay

NEOSHO, Mo.—Walter H. Ram¬
is with King Merritt

Ceylon, Kenya
and Aden

Zanzibar

Capital

'Reserve

(Special to The Financial Chronicle)

say

%

partnership had

anyway.-

reason

With

'

half of the year,

Bankers to the Government in

written

-\rl2k

companies will consider the payment of larger dividends.

discipline members that the Stock

op¬

partner¬

___

1

liability that theoreti¬
a

partners

As

a

as

Marine Insur.

Security Insurance Co

"

cally exists in

in

St. Paul Fire &

May-

said.

Hampshire Fire

Providence-Washington

It doesn't

a

Fire__

Phoenix Insurance

Similarly with taxes,
seem right to
change in organization in

said.

Union

The

Shearson, Hammill & Co., in
position

the

inde¬

acted

following tabulation, the current market prices cord-

„

he said.

Hannaford-Talbot

have

those at the end of last year are shown. The price
for the 26 stocks included irUke tabulation i§ also presented.

•Subscribed

With

these Stocks

'

57%

make

would

Frank Knowlton Adds

the

A$ this buying, may have been

particular issues,

.

accumulating capital
prior, to Oct. 1, 1956
discussion at a luncheon meeting is concerned, Mr. Maynard said
to 102 on and after Oct.
1, 1966. of the Investment Association of that he, as a capitalist, preferred
{ Owner of a pipeline for the:
New York on April 18. The prin¬ the partnership form, where he
transportation and sale of natural
could withdraw, with his capital,
gas at wholesale, Tennessee Gas cipal speakers were Amyas Ames,.,
whenever
it
suited
him.
The'
a
partner of Kidder, Peabody &
Transmission
Company began
profit-making ability of a firm
operation late in 1944 with an Co., and Walter Maynard, a part¬
attracts capital regardless of the
initial capacity of 200,000 MCF of ner of Shearson, Hammill &;~Co.
of
organization, he
said.
Both firms are members;, of the form
natural gas a day. Extending from
Anyway,
he
said,
corporations
the Rio Grande Valley in Texas New York Stock Exchange. ;
who wish to may set up partner¬
Mr. Ames, a
to existing termini near
governor
of the
Kenova,
affiliates who can become
Stock Exchange, spoke in favor ship
West Virginia, and Buffalo, N. Y.,
members of the New York Stock
of the proposition. He maintained
the' system has progressively in¬
' •
1
that allowing
New York Stock Exchange. •
creased its output to its present
Mr. Ames, in his original argu¬
firms
to
incorporate
capacity of over 1,000,000 MCF. Exchange
ment , favoring permissive incor¬
"would recognize the facts of life
Principal customers of the com¬
in the securities business.''
Re¬ poration, listed several arguments
pany include the systems of the
viewing the last attempt to allow against permissive incorporation
Columbia Gas System, Inc., and
member firms to incorporate, Mr. and then rebutted them. He said
Consolidated Natural Gas Co.
Ames said that about 70% of the" heTelt that some of the members,
governors of the New York Stock certainly not all, wanted to void
Joins Walston, Hoffman
Exchange favored permissive in¬ competing with incorporated se¬
'(Special to The Financial Chronicle)
He said that the
corporation in 1948, but that when curity firms.
if redeemed

in

permanent,

the,entire
re¬

ahead.

move

he

cost

issue, by. Oct. 1, 1981. General

account of pension funds.

In

corporation, but- that the present
discrimination
against
partner¬
ships in this respect may not be

sinking fund com¬
1, 1956, providing

retirement

to

35

ment

a

preferred stock will have the

mencing

issues have continued

insurance

individual

National

pensions

approximately $140,000,000. The

new

Of course, there are

pared with

formed.'

that -the fact that

tion would

1951, to 1,310,000
an

the

of

period of

a

the fact remains that the

year.

pendent of the general group.

at

were

Some

result in

may

National Fire Insurance——_

said

approximately

MCF

Exchange

been

one

concentrated

present can
enforce uponits partner-maembers
might be subject to litigation if

program, the delivery capacity of
the company's system will be in¬
creased
from

1,000.000

for the

discipline that the New York

Stock

curred for construction. Under
the

presently

on

May 2.

on

have

of the reasons for particular issues showing up better
than others is that there has been a considerable amount of
buying

Exchange to incorporate; 4
the

fi¬

previously

exceptions.

Mobilization, White Sulphur Springs, k
Virginia, April 7, 1951.

nancing to the payment of shortterm

Conference

a

stocks

pressures

reason

has done little this

Possibly

Investment Association of New York, at luncheon
meeting on
April 18, hear arguments in favor and against proposal to allow

dividends

current

Regardless of the

.

group

a

Discuss Permissive Incorporation of
New York Slock Exchange Firms

1951, to the delivery

company

von

is now about

underwriting.

American

Gas

curities Corp. and
White, Weld &
Co. The stock is
priced at $102
from April 1,
date.

Ludwig

insurance

of inflationary

.

Dr.

following.

market

stock market

index stood at 188.7

same

the

appearance

Economics of

;

The

unfavorable

according to its merits.- But do not confuse
by resorting, to the meaningless
slogan "elimination of loopholes."—A statement by

v

Transmission Co. was made on
May 9 by a banking group headed
jointly by Stone & Webster Se¬

per

us

the issue involved

new

preferred, stock of Tennessee

-

still such

instance

■,

Preferred Stock Offered
000; shares

be grateful for
things as those the
politicians call loopholes. Thanks to these
are

the general

at the year end while the insurance
group

under the
adverse influence of extensive losses suffered in the storms of last
fall. Another factor in the same connection is the fear that the

yet at¬

our laws are
perfect
require any amendment. Let us discuss
this problem in detail and let us examine
every

Ferni, Gas Transmission
a

not

188.0.

was

Unquestionably

and do not

.

of

Let

is

stocks

I do not want to assert that

re¬

labor

goods.

Offering

ideal

was

The

free country and
its workers are not
yet reduced to the status and
the distress of their Russian colleagues.
•-

;

When

that

their

loopholes this country is still

re¬

urge

that

the fact that there

materials
cut back the flow

shortages, have
of civilian

months.

buying

may

Mises

tained.

of

these industries is
already putting
heavy pressure on the labor mar¬
ket. Any losses of
employment in
consumer industries
during the re¬

place

von

within

fluctuated

have

"For example, the Dow-Jones Industrial
Average closed on
May 7, 1951, at 261.23. On Dec. 30, 1950, this average was 235.41.
advance during the four-month period was
approximately
11%., On-Dee. 27, 1950, Standard & Poor's index of fire insurance

over

or
twenty thousand dol¬
ought to be confiscated; and
therefore call a loophole the fact

Ludwig

1951

remains practically unchanged.

fifteen

industries—contract .construction,
agriculture,
lumber,
and
some

far in

so

particular

11% above where it

lars

by the seasonal

shares

range.

a

The result has been that

tions) implicitly start from the

labpr released during the

industries.

JOHNSON

E.

period when most stock groups have been moving upward,
insurance shares have lacked
any

(they do not

assumption that all income

insurance

very narrow

In

refer to the low-bracket
exemp¬

production in -trie durable
goods industries continued to ab¬
sorb the

nondurable

income tax

our

de¬

as

a

tax

'-loopholes. Politicians
complain about loopholes

in

fense

winter slowdown

income

did

year

H.

This Week—Insurance Stocks
Fire

not

who

occurs

the

our

are

Picture

The seasonal increase in

By

The income tax

exemptions. in
:

Seasonal

thing,

It is sijnply the law. Great
does not punish
gam¬
bling. This is not a loophole; it

third.quarters.
'

Bank and Insurance Stocks

punish

Britain

mands for labor are
expected to
increase sharply
during the second

/

not

definite

a

loophole.

a

employment at aircraft, munitions
machinery plants, wnose de¬

and

and

does not tax

'■w-'to-A-ssr,:.

«» S.St

MKWuTf

'

Specialists in Bank Stocks

a*-*—<w>mmiBwiW**'

The Commercial and Financial ChronUle
-24

The Key to

Wndell, Jr.

larrtH

Canadian Securities

Disl.

With Century

the under¬
writer of Century Shares Trust,
has announced the appointment of

Noting United States7 current embarkation

Jr.,
as
their
representative in the
Middle West^Mr.Wendell who
has been in the investment busi¬
ness in both Chicago and Boston,
will make his headquarters in
Wendell,

Barrett

wholesale

Chicago.

Earle Richards Is

the

the under¬
writing department of Dean Wit¬
ter &'Co., 632 South Spring Street,
Richards, Manager of

became

9

a

Kingdom as
the world's largest importer are
The key to the explanation of pay
their
creditors
their due,
best served by a higher rather many of the defaults on foreign while countries that were invaded
than a lower exchange level. Brit- bond issues in the '30s is that the and suffered grievously like Belcount can be ascribed to a com- ain
was forced to
devalue her quality of foreign government loans gium, France and Norway, kept
bination of factors, the principal currency in September, 1949, but declined materially in the Twenpaying all they owed,
of which are the following:
the estimated true value at that ties. Dr. Ilse Mintz reports in a
The
boom

persistent weakness since the
beginning of the year that carried
the rate from 4%% to 6%% dis-

The

pounds

born to

first

£"1® wjs about $3.20 and not
$2.80. Consequently British exports, in a sellers market, became

quarter

/ova

(2)
of

4.u

.

As

result of t

a

restrictions

unnecessarily cheap, and imports
c0rreSp0n<jingly dear. In the in-

„.i

~

e

rem

v

from

impoits

on

Canad

this country on Jan. 2,

bave

^rts^thisjear have been ab-

3

having been

ounces,

him and his wife Myrna.

.

...

.

,

or~

.

,

a

deteriorated,

Argentine meat

reflection

sore

of trade

terms

progressively

d^pl*rable

The

deal is

rearmament

(3) Canadian

British

tbe

terjm

a

proud father on May 2, normally large

Steven Richards, weighing

son,

terest of the United

*

imports during
of the year are
normally in excess of exports.

Papa!

that the economic in-

given rise to considerable bewil- pointed out

British

on

monetary policy and is an apt il-

ders placed in this country in_ac> iustration of the consequences of
cordancewith the „' J^*"" !. J™* failure to revalue at the approDefense Pooling Agreement have
_rinf-

.

similar U. S.

been far in excess of

period) of U. S. purchases of Canadian funds and internal securi-

anticipaCanadian

ties effected last year in

Government

tion

the

of

the

in

rise

dollar.

Provincial

the downward trend

Last week

abruptly reversed and funds

was

Municipal

development since at this

the guess that at $4 there would
still be a strong case for a further
upward movement.
\

period of the year the Canadian
dollar invariably stages a seasonal
which is usually mainthrough the summer

recovery,

CANADIAN STOCKS

tained

reaction

ward

form to the

incorporated,

1-1045

NY

was

before

it

responsible

was

dissipation of
bullish atmosphere.
the

the

through

movement

6%

was

-

level, and the There was only slight activity in
accompanied by the internals and prices moved

tions taken in

INVESTMENTS
IN CANADA

seasonal

usual

long experience with Cana¬
will be of benefit

dian industry

in selecting suitable in¬
vestments through which to par¬
to

you

ticipate in Canada's growth.
We

c

can

the

U.

Members:
The Toronto Stock

-

Exchange

The Investment Dealers' Association

Bay St. Toronto, Canada

Hamilton

Brantford

Windsor

Brampton

Sudbury

has

Canadian

of

been

most

Information

mone¬

and

within the
scope of the controlled free mar¬
ket it is logical to expect official
intervention to deter the reestab-

lishment

of

bull posi¬

important

o n •

a

11

Securities

is

particularly

time

to

necessary

at

repeti¬
tion of the speculative movement
that took

prevent

there

of

&

Morgan

Stock

Exchange

Curb

Market

266 Notre Dame St., W., Montreal
38 King Street
Toronto

W.

Recent in-

Edmonton.

sparked

developments
that
will broaden markets for prairie
pipeline

by

oil, and belated recognition of the
promising prospects of the natural
gas

fluence

of

movement

.the

industry.

although

Laurence B, Carroll

strong

possible

a

of

sterling.

even

With Burke, McDonald
(Special

to

The

KANSAS
B.

61

Queen St.
Ottawa




in the British

change

this

the absence of

Carroll

CITY, Mo.—Laurence
has

associated

become

'

years.

Last

fall

f

The study, "Deterioration in the
Quality of Foreign Bonds Issued
in the United States, 1920-1930,"
makes a unique contribution to

knowledge of how

our

a

the

cycle operates and

ness

field

for

teaches

quality of investMintz, the author,

economics

University,

and

member of

the

trian

up

of flue-

the

Dr.

ments.

busi-

opens

investigation

tuations in

at

Columbia

formerly
staff

was

the

of

a

Aus-

Institute for Business Cycle

Research.

at

the

highest

Treasury

role

the
the

as

a

United States

through

went

"default

one

decade

a

on

a

bV analysis of the origin of defaulted issues. Part of the banking
community resisted the tempting
Profits in the business and even
warned against the dangers mvolved.
But the individual investors not
only were unaware of the in-

creasing riskiness of new foreign
issues

but

grew

even

more

con-.

fident at the very time the quality
of new bonds was the lowest, Dr.

of forwhich

Mintz finds. In 1928 a crop
eign bonds, 65 percent of

.

could be
than a 2
. '

however

the

Roy

BOSTON.

Mass.

Robert

—

C.

^1£S°P; Jrlas b9fn a<*ded to the
Devonshire Street.

rS

'

With H. C.

Wainwright

(Special to THe Financial Chronicle)

BOSTON, Mass.—George L. Van
,,,

,

,

.

.

,

,u

c

.

.?frvcS

+

^

°c5* S*

University, who

Wamwright & Co., 60 State Street,

is the logical successor to the late

members of the. New York and

Lord Keynes, is

Boston Stock Exchanges.

Harrod of Oxford

strongly advocat-

re-examining

past

•„

experi-

and by

presenting what happened in new light, Dr. Mintz beence

t

oaa

■*

factors

the

defaults,

explaining

p

^

the loss of caution

the

eluded

^

By statistical analyzsis of about
bond issues of 43 borrowing

investors.

800

with

countries
of

little

total

a

par

to Move
General Business
Activity in the United States

Loan

value

between

over

issued in different

loans

She

finds, for example, that
only six percent of the issues of
went

1920

who

borrowers

to

de-

1930s—while

the

in

faulted

63

percent of the issues in 1928 sufthat
all

fate.

loans

issued in the five

1920-24,

only

18

in the 1930s,
ttol-1

rv

ratio

In

is

Art

as

Vk

percent
defaulted

while for 1920-29 the
h
PC ft
4*
as 50 percent.

1 rf

v-4 v*

r\

n

high

Causes

of

Default

The Economic

Are

Found

in

general business

was

with almost per-

synchronism. The sole exceptions were near the turning pointa
0f
business
activity. The loan
CUrve
lags one or two quarters
at
business
cycle troughs and
leads by one quarter at business
cycle peaks, except in 1929, when
!
J
turning points coincide.
Dr. Mintz finds that American

fect

•

•

«

inant

it

of

bond issues. She found
that loan cycles move counter to

business

foreign lending"

chapter

in the amount

foreign

1920's

Dr. Mintz concludes that

also devotes a

fluctuations

Climate in the

not "the nature of

to

Dr. Mintz

to

years.

Cycles Found

Counter

$7,000,000,000, the
author shows surprising contrasts
a

j__

_

_

^

conditions were the

factor

eign bond
Foreign

in determining

dom¬
for¬

flotations.
lending

was

much

greater during American depresShe
thinks
that
an
originally sions than during American Pr°ssound
development was turned perity, For all the loans studi
,
into a predominantly unsound one the average amount issued oaring

which

made

default

"inevitable,
?

the economic climate of the
'20s; that the boom in Amerifinancial activity was respon-

the ' three quarters centered
t
peaks of American business cyc"r®

$103,000,000. At troughs, t
$220,000,000.
quality of foreign loans.
For the eight countries whose
Transfer difficulties which have business fluctuations have
received so much attention in this described on a basis comparaoie
connection affected loans of 1920 with those of the United States
as
much as loans of 1928, she the contrast is even greater, sne
notes.
They cannot explain the reports. $32,000,000 was ^sued at
big variations
in loan quality. U. S. peaks and $111,000,000 at
Neither
can
they explain, Dr. U. S. troughs in business activity.
Mintz
observes,
why
countries Yet when their own business was
that were highly prosperous dur- at
peak levels, they issued an
ing World War II with booming average of $61,000,000 a quarter
dollar exports did not decide to in loans. When their own business

can

un¬

eminent

Professor

-

by investors inconsiderable profits
made by a great number of inlieves an important contribution vestors over a long period, the
can be made to the understanding
absence
of a severe depression
of current problems and to the which increased confidence in the
making of present policies.
future, and mistaken confidence
j
in the judgment of bankers whose
800 Issues of Foreign Bonds
cautionJ had been affected by the
Are Analyzed
\
same
influences as had affected
By

late

(Special to The Financial Chronicle)

kind, especially in
unanimity of opin¬

economist

widely discussed."

by

Vance, Sanders Adds

revaluation,

the subject.

Today
British

have

reference

Chronicle)

Financial

doubtedly militated against drastic
of

bonds

with

Late

logical than

more

The

on

new

of

went to borrowers who

upward

not given serious consideration by the British authori-

ion

foreign

analyzed

time

years

was

action

its

in

without
foreign bond
default,
type
of issue, affected the judgment both
borrower and form of lending, but of many of the investment bankthe time of lending, on which Dr. ing
houses
originating foreign
Mintz's
investigation
was
cenloans and of investors finding an
tered, has been virtually ignored, investment outlet in them
"Fluctuations in the quality
of
When cautious bankers refrained
new investments of any kind," she
from
expanding their foreign
says,
"have seldom been inves- loans, their place was taken by
tigated empirically."
less cautious ones, Dr Mintz shows
Defaulted

,

been

to

fered

revaluation

for sterling

case

creditor country the

Of

On that

were

sterling

ties.

request

Toronto Stock Exchange

Montreal

and

any

place last fall.
also

level

on

4

The

advanced

tions.

now,

MEMBERS

latter

leums, Calvan, Royalite, and Cal-

tractive without the additional in-

Montreal

The

losses.

strongly led by Federated Petro-

with Burke &,MacDonald, 17 East
that could not fail to encourage Tenth Street. Mr. Carroll was forthe purchase of Canadian dollars, merly
an
officer of Prescott,
At this level, as then, the CanaWright, Snider Co., with whom he
dian dollar appears
already * at- had been associated - for many

CANADA

Robertson

erate

the

of

Canadian

the

of

authorities

occasion

INVEST IN

Available

with the exception
registered mod-

oils

disap-

action

recent

the

the Canadian
mostly lower

gary

rumors

Canadian

were

terest in the oils has been

this
330

Stocks

of

changes

dollar.

point it is highly desirable. The
problem of the U. S. "hot money"
influx has always had the close

It

of Canada

abrupt

pointing, from the official stand-

tary

JMLilner, Ross &Co:

holders

S.

Exchange

erratically in sympathy with

viewpoint 0f Western

the

from

this

attention

assist you.

Cana¬

the

and all groups

Although
dollars

Our

of

rise

dian dollar.

of

During the week interest in the
section
of the "market

external

the

liquidation of new posi¬
anticipation of the

nervous

psychology in
coupled with

search.

that

f

for the was concentrated on the new *$50
renewed million Ontario issue which was
As a result fairly well received despite curCanadian dollar again declined rent
bond market uncertainties,

border

Bowlon O. Mao.

,

■entirely eliminated. Selling pressure emanating from north of the
rude

Fifty Consfrem Street

States,

fact

Canadian dollar. For this^reason present, the only country with the* Investors accepted an 8 pereent
capacity for large .scale foreign reduction in risk premium for-a
in order ta circumvent specula- investment with
private or public, much riskier investment' at the
tive activities-Lthe question of
funds, and the greater part of the very -time they accepted/-only a
early - reestablishmentr; with - the * world needs its economic aid. The10 percent reduction in yields-on
International Fund of a fixed •
resumption of foreign lending ere-- high-grade - investments of conparity o|
Canadian ; dollar *
ates a host, of problems, political - stant quality,
she finds.
hardly might well receive serious tonsid-> and
economic, which are being
Besides the complete absence of
almost eration.
;
;. '
.
-

was

established

New York 5, N. Y.

United

,

con-

growing list of projected .Canadian, borrowings
in
this country served to accentuate
the stronger trend.
However to
the discomfiture of most exchange
a

experts this recovery

Two Wall Street

WORTH 4-2400

to

this week by the

National Bureau of Economic Re-

customary pattern and

reports of

A.E. Ames&Co.

appeared

study released

The United States, she notes, "is were to prove failures,
In the event of sterling revalnow
entering its second major sold 1° yield n°t more
uation it would be / difficult to
period of foreign lending. It is, at percent risk premium.
prevent .v sympathetic rise of the

On this occasion the up-

months.

should be

permitted to rise by stages of 20
a* a,br^e ailcJ be ventured

This movement
normal

,

TT

°Pinl91} that the pound

sharply
to
5Vs %.'
was accepted as a

strengthened

Corporation

'

'

.

As Professor Harrod pertinently
states, revaluation of sterling is
becoming increasingly an economic necessity. While it is postponed an ever larger volume of
9xP°r*® wrtl be required to pay
for Britain's essential imports. In
a recent letter addressed to the
"^Panc*a* Times" of London the
British economist advances the

purchases in 'the Dominion.
(4) Liquidation (following the
expiration of* the six months tax

CANADIAN BONDS

ex¬

Dr. Use Mintz, in National Bureau of
Economic Research study, finds main cause of past large
defaults was progressive decline in loan quality during our
rising financial speculation of the 1920s. Reports close cor¬
relation between volume of flotations and business cycle.

higher level for the pound.
is no question as already

a

There

have

derment both here and in Canada,

Calif. —Earle

ANGELES,

ing

Canadian

months

recent

in

dollar

the

of

(1) Canadian

A Proud
LOS

vagaries

its second major

on

perience important,

By WILLIAM J. McKAY
The

Foreign Bond Defawils

period of foreign lending renders reexamination of past

Century Distributors,

a

Thursday,/May 10, 1951

.

(I960)'^

sible for the steep decline

in the

was

was

.Volume 173

Number 5010 ;;. The Commercial and Financial Chronicle

25

(1961)
was>- depressed/ the ' average' was
the
same,
$66,000,000 a

Britain's Raw Materials Crisis

almost

quarter.

Securities Salesman's Corner

By PAUL EINZIG

By comparing both foreign and
domestic bond issues to reference

cycle

patterns,

Mintz

finds

Dr. Einzig, maintaining

issues

were

cipal

Dr.

that

foreign

more

closely related to American

bond

new

inverse

relationship
stock

common

unemployment in Britain are prevalent and, should it
Mr. Bevan's popularity would grow and Britain may

come,

foreign bond flotations during the

then pursue

entire period.

strong enough to hamper invest¬

very

ment in

isters—two of whom

can common

Dr.

stock

Mintz's

under

field

a

issues, she

study

fellowship

says.

begun

was

of

the

Social Science Research Council.
It proved of such keen interest to
the staff of the National Bureau
of Economic Research that the re¬
search

for

agency

its

provided

extension

and

facilities

completion.

crisis

foundations.

members of the

were

LLfg. Stk. Offered
-Blyfh, Dealer-Mgr.

New finaneing to the extent of
approximately $6,800,000 is being

undertaken by Long Island
Light¬
ing Co. with an offering to its

stockholders of 524,949 additional
shares of

stock

common

Holders of record
subscribe

may

$13

per

for

on

the

shares

the basis of

share for each six

new
a

share

(no par).
May 2, 1951

on

at

one

held with

conditional

privilege* of over¬
subscription, subject to allotment.
Concurrent

with

the

stockholder

offering, the company is also of¬
fering to each: of its full-time
employees the' privilege of sub¬
scribing for not more- than 200
shares at

common

from

*

$13

per

share

sharer remaining
subscribed by j stockholders,
Blyth & Co., Inc. has been
any-

un¬

re¬

tained

by the company to act as
dealer-manager / of a group of

securities

licit

dealers

which

subscriptions

for

the sale of the shares of
stock.

;

The New

York

will

and

so¬

effect

common

the

Executive

the

of

Labour

and the Trades Unions Council

policy advocated
the last

word

the members

by the
with

rests

the

plates

The

that

utility will

rank

Ministers,
file

and

It is true, the

use

construction

pro¬

of

present

es¬

in demand for
approximately

$134,000,000 for additions to elec¬
tric,
gas
and other
properties.
During 1951, the amount of ex¬

penditures is estimated at $32,000,000, the greater part of which
will be applied to electric prop¬
erties.

William H. Fanning
With Perrin, West

tire

Anderton
with
cox

has

Pacific

Oreg.—David
become

connected

Northwest

with Coburn &,
17

R.

I.—Domenic

has. become

associated

Middlebrook, Inc.,

Exchange Street.-1

.




estate

in¬

receive from ad¬
But the law of averages

vertising.

you

will work if you give it a chance.
After you have eliminated the

you

the

on

idea

basis,

where

is

the

main

en¬

considera¬

impress

the
prospect
with
importance of the information
wish

to

discuss with him.

appointment

an

office

where

disturbed.

heard
who

have

story

or

he

not

probably

the

of

Obtain

home

will

you

You

the

his

at

the
you

salesman

will be

future

business

with

sales resistance

orig¬

working on a prospect
on a high plane that
and the matter involved a
sub¬
only profitable, but where stantial investment One day he

not

most

of the

eliminated.

was

made

call back to

a

without

see

his

man

economic, social and political stability.

dividuals in your market area.

politicians

ment program.
They fear that the gain to this country's military
strength would be more than offset by the weakening of her eco¬
nomic strength and by the resulting Communist infiltration.
In
their opinion the maintenance of the social services and of the

of

standard

The

living should be given priority

government's view

over

rearmament.

If

that neither

is

military nor civilian
requirements should' be given absolute priority, and that if there
not

are

enough

inevitable

materials both should take their share in the

raw

cuts.

This

view

is

endorsed

the

by

overwhelming
majority of the Labour Party, because the alternative would be
the defeat and resignation of Mr. Attlee's government.
But, in
private

conversations

from the press or

Parliament

and
ip the country, Mr.
stronger support than would .appear
from, public speeches.-

Bevan's views have

in

much

a

experience
business

has

also

executives

only
interested in

Mr. Bevan does not intend to

join forces with the opposition
in order to defeat the government.
He is prepared to wait until
the annual conference of the Labour Party in October, when he
will attempt to secure for his group a majority on the National
Executive, .At present, he only commands four votes out of 26.
But he hopes that by October his
eloquence, and even more the
eloquence of facts, will convert many millions of Socialists to his
way of thinking, so that he and his supporters will receive the

occa¬

tors, you will be at
there.

disadvantage

a

~

.

If

sell an investor on the
ideas you will find that

you

program

radiation from him
influence"

been

with the

He is convinced that during the next few
months the raw materials shortages will result in large-scale
unemployment, and this, together with the rising cost of living,

you

have, sold him, ask for others

will discredit the government before the country.
Once in control
of the National Executive, Mr. Bevan
hopes to be able to impose
his policy on the Labour Party and the country.

They
family
quaintances.

be idle to

his direction.
be

deny that things

The production of

a

to be moving in

appear

wide variety of goods had

to

cut

scarce

materials

could

produce an improvement entirely
out of proportion to the quantities involved.
It may be asserted without exaggeration that the prospects of

victory of the anti-American wing of the Labour Party depend
entirely on the extent of American raw material allocations to
a

Britain

in

accused

the

the

future.

near

United

In

States

of

his resignation

speech Mr. Bevan

unrestricted
civilian consumption over meeting the indispensable military and
civilian requirements of her ally.
However unfair this charge
may be, it is making a profound impression in the country. Should
there be large-scale unemployment, pressure in favour of pur¬
suing an "independent" foreign policy would increase, and with
giving

preference

to

Quarters
that

friendly

about

appears

the lack

to

the

to
of

prevail

in

United

States

are

perplexed

and

understanding of the British situation
Washington.
Even those who fully

stockpiling policy

that it has gone much

too far, and that it is liable to defeat its

are now

inclined to feel

worth
of

a

mopey.

plan.

may

his

or

Regarding
are

in

be

members

friends

and

often

inquiries
This is

advertising,

your

into sales letters here
is possible to obtain
specific securities that

it
on

all

that

ever

a

salesman

good

a

need.

I

contact.
heard

have

complain that their leads
good. Yet other men have
taken leads from the same mailing
and have
gone out and done a
wonderful job.
were no

What to DO With

you

J.

now

seems

door

should

lead orig¬

qualify
or

it

to

not it is in

and

Curiosity seeker.
Investor

(3)

Can

or

W. Denton,
with
the

associated

in

s

i t

municipal

securities

de-

par.lment.
Identified
with

the

in-

vestment
business

for

nearly

20

M

years,
Denton

r.

came

the

White

organization
from the New
York office of

Blair,

R.

Rollins

W.

Denton, Jr.

Inc.

Co.,

where

(1)
(2)

that Richard

now

government

&

following categories:

is

he

had

been

Assistant

an

Vice-President. Previously he had

trader.

been

associated

Boston

Corp.

and

you see on a
favorable basis.

with

The

First

Louis.

St.

offices

in

Denver

to be weakening it, by

that
a

the

certainty

great deal

more

It

of

a

Prompt Wire Service

political and public opinion ought to

of

Britain's

wholehearted

support

FOR BROKERS AND DEALERS

is

"neutralist"

government in Britain, with
a

Western Markets in

To

to the United States than the possession
LOS

few additional hundreds of thousands of tons of sulphur.

timely increase of

ments

the

White
&
Co., Inc., 37
Street, New York City, an¬

firm

ANGELES

SPOKANE

•

•

DENVER

of

such

raw

fatal blow to the united

increases

would

chances to achieve victory.

effectively

A few announce¬

deflate

Mr.

Mcmbets New
•

Bevan's

help him to popularize his arguments, in addition to handicapping

and

other

50 BROADWAY

Any delay in the allocations would

the progress of the rearmament drive.

LAKE CITY

J. A. HOGLE & CO.

It could be avoided at the cost

material allocations.

SALT

•

a

ESTABLISHED
a

as *

Instead of strengthening the security of the United States

The advent

of

it,

get that far your

you

G.

nounces

Jr.

to

Lead

a

No matter where your

the

Use

After

With J. G. White Co.

of

salesmen

inated

stock.

Wall

furnish the basis for

should

letter,

R. W. Denton, Jr., Is

ac¬

lists available of wealthy
in every community.

I cannot go

can

that

opener.

similar

a

individuals
but

or

If

wish to suggest who would

determine whether

endorsed the American

object.

most

be .interested

there

ad

an

him and tell him about

selling

a

also

to

answer

see

In

one

he may

to

real opportunity to do some sell¬
him
ing just begins.
More ~on that
every family
next week.
leader and it is usually

just

securities.

some

"center of

as a

go,

is less difficult than if

have

you

stock in

,

there is

would

The first step is to sell the ap¬
pointment, not the "program," ot
stocks
and
bonds, or anything
else. You sell that by giving your

sionally are
"pro¬
gramming." Professional men are
all good prospects but unless you prospect the assurance that you
know how to obtain interviews on will give him information that wfitl
a
favorable .basis with busy doc¬ be of benefit. If he asks about a

the

It

an

My him.
that

shown

„

strong anti-American bias, would deal

PROVIDENCE,
DiSandro

man

inally encountered is

The

front of freedom-loving nations.

Coburn & Middlebrook

this

going to work with

over-all

your

is

three Ministers, and
Dr. Paul Einzig
besides, feel that in
scarcity it is a mistake to proceed with the rearma¬

other

many

view of this

Co., Wil¬

Building.

certain
all

there is not enough raw material to satisfy all
requirements, those
of rearmament should be sacrificed in the interest of Britain's

materials.

raw

realize

K.

quiries that

a

in

appointment, He stuck*-,
his head
in the door and said,
Prospecting Comes First
"Good morning, Mr. Jones, 1 wm
There is only one type of indi¬ in the neighborhood, and 1 just
vidual that is interested in a pro¬ thought I'd drop in to see you."
gram. He is primarily the investor Mr. Jones looked up from a busy
type. The traders and speculators desk and said, "If what we have
rarely have the patience, or care been
discussing
isn't important
enough about long-term invest¬ enough for you to see me by ap¬
ment.
Therefore you must pros¬ pointment you can just drop out
pect among the older, retired in¬ again." And you couldn't blame

of

is felt that American official

(Special to The Financial-Chronicle)

your
are

an

him

But the

playing into the hands of anti-American elements in Britain.

PORTLAND,

sold

tion,

fundamental cause was the anticipation of a
major industrial crisis resulting from scarcity

against Russian aggression, it

Joins Pacific Northwest

other.

protection and building of his

resignation of Mr. Bevan, Minister of Labour;
Mr. Harold Wilson, President of the Board of
Trade, and Mr. John Freeman, Parliamentary

worried

sales manager for

any

you

in

After

account

an

than

on

with
Perrin, West & Winslow,
Inc., members of the Boston Stock
Exchange. Mr. Fanning was for¬
merly Pjrovidence manager
for
Coburn & Middlebrook, Inc. Prior
was

always be

deadheads

of

controlling

him

it would increase Mr. Bevan's popularity.

E. R. Davenport & Co.

will
of

security sales¬ curiosity seekers, either by a premanship. However, it is the gen¬ telephone conversation, or an in¬
eral opinion that it
to
set
presents more terview
up. a
selling
difficulties,
and
usually
takes appointment at a later date, we

that

PROVIDENCE, R. I.—William
H. Fanning has become associated

thereto he

method

imposition of minor charges

other

upon

itable

the National Health Service in the Budget
for 1951-52 was the immediate cause of the

expenditures

1951-1954 in¬

years

based

to

regarding the "program sale."
opinion, it is the most prof¬

way

its services, any require aggregate

clusive,

timates of growth

men

have

already, and more cuts are expected in the near future.
Fears of unemployment are likely to materialize in the near
future, unless the raw material position should improve.
Rela¬
tively moderate amounts of additional supplies of sulphur and

for the

gram

helpful

in my

to

of

throughout the country.

on

contem¬

company

its

Party

repudiated the

resigning

be

may

There
amount

greater skill and patience, than come to the point where
you are
opening accounts by other meth¬ going to attempt to do business.
ods.
One result of "program sell¬ But before we
get there it is im¬
ing" is that you can come closer portant
that you
are
able
to

though the Parliamentary Labour Party,

National

largest number of votes..

^

the
preceeds from the current
financing to reduce outstanding
temporary bank loans previously
incurred for expansion of current

facilities.

Cabinet—and split the

Labour Party.
The full political consequences
of the crisis cannot as yet be ascertained.
For
even

which

both new and old securities sales¬

raw

Secretary to the Ministry of Supply.

L.

ideas

materials brought about
in Britain that shook the government in its
It resulted in the resignation of three Min¬

a

Ministerial

During the next few weeks I am
going to try to present some

independent foreign policy.

LONDON, Eng.—The scarcity of

This held except for 1923, when
turmoil in Europe caused a shock

foreign bonds. The foreign series
lagged slightly at some turning
points, but otherwise it mirrors
closely the fluctuations in Ameri¬

The Program Sale

fears of

to

both domestic stocks and

By JOHN DUTTON

recently resigned from Labor Government, aiming to upset
policy of sacrificing living standards for rearmament. Says

of

issues

cause

who

business cycles than the domestic
bond
issues.
She
also
finds
a

striking

materials crisis in Britain is prin¬
of shift in Britain's Labor Party, sees Mr. Bevan,
raw

Tel.:

WHitehall 3-6700

1915

York Stock Exchange

Principal Exchanges

NEW

YORK 4, N. Y.
■

Teletype NY 1-1SS6

26

The Commercial and Financial Chronicle

(1962)

The

National

Bankers

and

revised

The

regular meeting on
appointed Charles A.
Nicodemus, Jr., Assistant Cashier
since 1934, a Vice-President, and
John P. White, Jr., Cashier since
1935, Vice-President and Cashier.
at

April

consolidations
new officers, etc.

of

of Baltic

Bank

its

more,

News About Banks
new branches

of directors

board

Western

18,

capitalizations

#

The

sH

of

the

Old

Phoenix National Bank of Medina,

will

stock

of

add

to

$40,000,000

the

capital stock
of $500,000 and the Seville State
Bank of Seville, Ohio, with com¬
a common

capital funds of the bank. The
capital stock will be increased
from $124,000,000 to $144,000,000
and the surplus from $136,000,000

fective at the close of business on

to

shares

the

at

all subscribed

not

are

for

stock of $25,000,

mon

became ef¬

the

by the underwriters for subscrip¬
tion by officers and employees at
$40 per share.
The number of

William D. Ryan

liam D. Ryan have been appointed
of United States

Vice-Presidents
Trust

Company of New York, it
announced

May 3, by
Benjamin Strong, President. Mr.
Puelle, who was appointed an
was

on

^Assistant Vice-President in 1943,
has been with the company since
1926. He is in charge of the com¬

pany's Trust Administration func¬
tions.
pany

Mr. Ryan joined the com¬
in 1926 and was appointed

Assistant

an

Vice-President

in

1948. He is Director of Personnel.

Mr.

Ryan

is

member

a

the

of

Board of Governors of the Ameri¬
Institute of Banking, and is a
member of the Personnel Commit¬
can

tee; Trust Division of the American
Bankers Association.

allotment

maximum

the

any

officer

employee will be

or

which will

200 shares in any case,

to

reduced

be

shares

100

the

that

event

.Company,

in

less

be

Trust Company of New York, ac¬

cording
N.

to

an

Baxter

the

; announcement

by

Jackson; Chairman of

Bank.

Mr.

Jackson

nounced that* Wil'mot F;

also

an¬

^Wheeler,

Chairman of the American Chain
& Cable
to

Co., Inc., has-been elected
Advisory Board of the

the

that the

earnings of the bank will
the

warrant

payment on the in¬
creased number of shares of the
same
dividend now being paid,

namely $2 per share per annum,
and they stated their intention, if
conditions permit, to continue divi¬
dends at that rate.

Warrants

cov¬

ering subscription rights will be
about May 14 to share¬
holders of record May 8, and the
rights will terminate if not exer¬
mailed

on

or

Company of New York, who

holders of the National City Bank
©f New
York, at their special

meeting May 2, approved the

re¬

in

1949, died on May 7 at
Joseph's Hospital, Paterson,
N. J. He was 70 years old and re¬
sided in Ridgewood, N. J.
Mr.
Whitney became associated with
the Bankers Trust Company in
1918 as Credit Manager, and in
St.

1919

was

elected Assistant Treas¬

and

transferred

was

Banking Department.

the

to

He became

and Vice-President in 1943.

As was indicated in our issue
May 3, page 1867, the share¬

Trust

Bankers

Assistant

of

Vice-President

in

1926
From

until his retirement he

1932

had

his office at 44th Street and Fifth

Mr. Whitney
Brooklyn, N. Y., and
Avenue.

was

born in

gradu¬
Polytechnic Insti¬
tute of that Borough. He was, for
many years, an active member of
ated

the

from

Associates

Morris

Robert

was

and

a

National Bank Credit Men's Asso¬

ciation.

'

pro¬

posal to increase the capital funds
of the bank by the sale of
1,000,000
additional shares.
Later advices

Mackenzie

incident to the action state that

Seattle; Wash., have

We Want

of

78.8%

of

a

the

6,200,000
shaires outstanding, were voted in
favor of the proposal with less
than Vz of 1% opposed. Wm. Gage
Brady, Jr., Chairman of the board,
presided at the meeting. The addi¬
tional shares will be offered at $40
per share to all shareholders on
a pro rata basis of one new share
for each 6.2 shares held. As here¬
tofore stated, the
proposed sale

The

election

of

Donald

Assistant

an

as

K.

Vice-

President of The Marine Midland

in

by James G.
Blaine, President. Mr. Mackenzie
was formerly
an Assistant VicePresident of Bank of America Na¬
tional Trust and

Savings Associa¬
tion, and Assistant to the Treas¬
urer

of Prudential Insurance Com¬

pany

of America.

War II he

was a

U. S. Navy

Mackenzie

versity
and

an

During World

Lieutenant in the

from 1942 to 1946. Mr.
received
from

Finance

of

and

a

B.

Wharton

S.

in

School

Commerce, Uni¬
in 1935

of Pennsylvania,

L.L.B. from Brooklyn Law

General Obligation Municipal Bonds

School in 1939. He is

Municipal Revenue Bonds

the New York

WATER

a

member of

Bar, and the New
Jersey Bond Club.

ELECTRIC
SEWER
TOLL BRIDGE

Municipal Department

qAllen & Company
Established

30 Broad

Smith J. Hermans, a trustee of
Rhinebeck Savings Bank of

the

HOUSING

1922

Street, New York 4




an¬

MacArlhu,
Not Communism

'

;

Rhinebeck, N. Y„ since 1927, has
been elected President of the in¬

stitution

to

succeed

Jacob

H,

Strong who has retired, according
to the "Savings Bank News" of
May 7. Mr. Strong, it is stated,
will continue to serve

popularity of Gen. MacArlhur,
a policy, and people are fed up
w.th the mumbo-jumbo out of Washington. Contends continned neglect of spiritual forces may lick America as leader
Bats on, commenting on

Mr.

says reason

;

.

*

a

of the

National

Old

Evansville, Tnd., having
stock of

common

is because he has

$1,000,000, and

the

000,

as a

ing.

Unless the leaders of our coun¬

try

he will

spiritual values which give mean¬

ing

purpose

common stock of $150,consolidation was cohr,-

leader

fore the horse.

as

the

free

the initiaf'^tJitaf 'of
$1,200,000, in
120,000
shares of common stock, par value

lions.'
letters

$10

days

is

each.

The

na-{

I get lots

initial surplus

is
$1,400,000, with initiaF undivided
profits and "reserves of not less

a n

a

$1,100,000.
*

are

*

*

I

that

advised

by

from

President

m

Gossett, President of the
Security National Bank of Sioux
City, Iowa, that the directors of

the bank at

on May 1 called a meeting
of the shareholders to act on the

question

increasing

of

ay?"

the

com¬

business
n

Roger W.

Baboon

labor

stock frqm $500,000 to

next.

unions.

One

doesn't

Another

like

me,

however,

any

society,

life.

This,

disillusionment

of

World

War

I.

This is what most Americans to¬

is as

day long for—a vital, creative,
forward-looking creed. We would
like more brave leaders to help

confused
the

as

for

-

believe, is what we have lacked
in the Western World since the

line

man

order

in

< -

scientist.

social

I

workers alike.
One

a

which give meaning to

agers

produc¬

tion

their monthly meet¬

ing

a

and

not

primitive^or!. highly; civilized, to
hang together, it must have a
courageous
but simple rational
creed, a set of spiritual values
with
strong
emotional
appeal

'"What can
man believe,

They come

R.

SpirRuar Rejuvenation.
am

Anthropologists tell

these

asking

yw

;

;

of

me;

than

probably reply, "Our vast
and
our
unparalleled

production system."
People who
think this way have the cart be-'

of

Evansville,

person

average

licked

under the charter and"

which

the

is

ica

title of the Old National Bank > jn,

summated

-

resources

to

the New
World, Amer¬

and

Ask

-

what has made America great and

the common

rejuvenate

can

Evansville,

,

doesn't

$600,- like
beliefs for us.
government
bureaucracy. implement bur
by the issuance of $100,000 in The next
doesn't
want
price- Many Americans do not like Macstock dividends, and to further in¬
Arthur's methods; but his forthfixing.
Still another doesn't
crease
the common stock from
want the United States fighting rightness appeals to everyone.
$600,000 to $800,000 by the sale wars in
Perhaps it is a defect that too
Korea.
But all
mon

000

have

a

of
additional
shares
(par $100
many of us voters are waiting for
good word to
say for General
each) at $120. In its statement of MacArthur.
someone else to come up with
a
condition April 8 the bank re¬
real creed.
This isn't the way our
MacArthur reports that Japa¬
ported a surplus of $600,000 and
forefathers operated! They thought
nese
intellectuals
have
been
undivided profits of $306,355. On
their policies out for themselves.
the same date the deposits were shocked by the inability of even I
think more of our political,
our
military officers to tell the labor and business leaders need to
shown as $30,609,558, while the
assets were reported as $32,015,912. Japanese what we believe in as a take time to
think, pray, meditate,
nation and what our long-term
*
*
.*
and see if they can't rediscover
objectives are.
We don't want
life's essentials.
> ;
William A. McDonnell, Presi¬ the
tyrannies of Hitler or Musso¬
dent of the First National Bank
lini or Stalin.
A Practical Suggestion
We don't want
,

:

in St. Louis and Chairman of the

British Socialism.

Board of Directors of the St. Louis

Communism; but, for the moment,

We don't want

Did you ever

stop to think what
if your neighbor¬
or forgot
up
with the political mumbo- the corner movie for a night a
jumbo out of Washington.
We weok and, instead, met one night
of the United States Chamber of are relieved anct'
encouraged to each week in some house to dis¬
Commerce
held
in Washington, find someone Who has a policy,
cuss
Ways to save our Union?
D. C., April 30 to May 2.
even if we don't agree with it.
The idea is explosive!
Think of
Chamber

of

headed
the St. Louis Chamber's delega¬
tion to the 39th annual meeting

*

announced

been

Economics
Dealers in

Bank

been

By ROGER W. BABSON

Commerce,

we

Trust Company of New York has

total

>

May 1, the consolidation

effected

We

Harvey Eames Whitney, former

urer

.■

,

,

*

the Franklin Bank & Trust Co. of

C.

tor of the American Mutual Lia¬

tr

<

*

of free nations.
As of

before June 4.

of

,

❖

was

Rockefeller Center office of Chem¬
ical. Mr. Wheeler is also a direc¬

bility Insurance Company, the
Bridgeport
(Conn.)
City Trust
Company, the Michigan Chemical
Company and several other cor¬
porations.

branch.

a

Bank

tired

&

*

"

the staff of People's National

of

$286,000. The quarters of the
Seville Bank will be operated as

than

recommending the capital in¬
crease to the shareholders, the di¬
rectors
stated
their expectation

Office

Chemical. Bank

*

Promotions for five members of

than

In

Vice-President

the

which to honor the

The initial surplus will

the

\

15,000.

has been elected to the Advisory
Board of the Rockefeller Center
of

on

available

number

shall

allotment

for

to

Towe, Vice-Presi¬
dent in Charge of Finance of the
Cyanamid

designated

been

throughout the
America organization as

*

initial

$100 each.

C.

American

has

Day

occasion

be $550,000 with initial undivided
profits and reserves of not less

cised

Kenneth

on

date

banker's memory.

Comptroller of

tne

ployees will be permitted to apply
be in proportion to salaries,

will
but

Frederick M. E. Puelle and Wil¬

San

at

1870, and since
June 3,
1949, the

capital of the consolidated bank
will be $550,000, in 5,500 shares
of common on stock, par value

Office of

the Currency states that the

shares for which officers and em¬
E. Puelle

born

was

Joshua

by

"Bulletin,"

In its April 30

by the shareholders, a total of up
to 25,000 shares will be reserved

M.

death

Bank of

under the charter and
title of the Old Phoenix National
Bank.

Green, Jr.,
Greenfield was
advanced from Assistant Cashier
to Assistant Vice-President of the
First Avenue Branch; Eldon C.
Schmad and Carroll H. Aitken,
both of First Avenue Branch, were
elected Assistant Cashiers; Albert
A. Green, Jr., was named Assist¬
ant Manager of the bank's West
Seattle
Branch and Alfred G.
Gunsten, Assistant Manager at the
Bremerton Branch. Both were for¬
merly
with the
First Avenue
Branch.
The
promotions were
voted at a meeting of the bank's
board of directors on April 24.

May 6,

on

Founder's

April 21,

Mr. Brady an¬
meeting that if

$156,000,000.

nounced

p.

his

an

Ohio, with

Giannini

Mr.

Thursday, May 10, 1951

.

President. Donald

Gordon Sproul, President of the
University of California, at Gian¬
nini Hall on the Berkeley campus.

Jose,

.

nounced

special invitational observ¬
conducted by Dr. Robert

a

ance was

birth

sit

consolidation

6,

.

The

oldest

*

want MacArthur!

.We

are

might

*

bank

in

the
What Americans Want

Southern

California, The Farmers and Mer¬
chants National Bank of Los An¬

I

think

most

Americans

happen

fed; hood turned off the TV

force

which such

grass-roots

thinking of this kind could exert
on

want

the

electorate—on- the

nation

substantial they -can and the world.
grab hold of—something to be¬
on May 4 that during
Joins First California
June, July lieve in, an ideology, a creed, a
and August it will be closed Sat¬
way
of life.
(Special to The Financial Chronicle)
Something with
urdays. Victor H. Rossetti, Presi¬ more substance than a 50-cent
LOS ANGELES, Calif.—Joseph
dent, stated that the action had' "dollar bill."
There was a time R.
Manwaring has joined the staff
been taken after consideration of when the
Church gave a meaning of First California
Company, 647
the following reasons: interest of of life to
people. Apparently this South Spring Street. He ■vyas for¬
the personnel, the national trend, isn't fashionable
any more.
Our merly with Revel Miller & Co.
and permissive legislation making
neglect of the spiritual has and Fairman & Co.
it possible. It is pointed out that
brought about a great cultural lag
at the present time approximately in Western civilization.
J. Barth Co. Adds
32 states have passed legislation
What was it that satisfied so
(Special to The Financial Chronicle)
permitting banks to remain closed
successfully
the wants of
our
on Saturdays.
SAN FRANCISCO, Calif.—LasThe banks of Cali¬ forefathers?
Certainly, it wasn't
sor H. Grosberg has been added to
fornia were granted this permis¬
fast automobiles, television, the
the staff of J. Barth & Co. 404
sion approximately 12 years ago
40-hour week or a soft life.
I
under the statutory provisions of
Montgomery Street, members of
believe the happiness and success
the New York and San Francisco
the Civil Code of California.
of our ancestors in this country
Stock Exchanges.
*
*
#
was
the result of their spiritual
A brief ceremony in all branches and
courageous approach to prob¬
Joins Paul Rudolph
of the Bank of America National lems.
The roots of our vitality

something

geles, founded in 1871, announced

*

Trust

&

Savings

San Francisco

Association

of

are

not economic,-

They go deep

(Special to The Financial Chronicle)

SAN

FRANCISCO, Calif. —C.
anniversary of the birth of the Today
the
trouble
is
that
a Kenneth DeWitt, Jr. has joined
late A. P. Giannini, founder of the startling lack of religion has crept the staff of Paul C. Rudolph &
trustee,. bank. On Sunday afternoon, May into our national economic think-. Company, 127 Montgomery Street.
the

on

May 5 honored

into the ethical and spiritual soil.

Volume 173

Number 5010

.

.

.

The Commercial and Financial Chronicle

27

(1963)

»i

Continued

from

chases could prove a

9

page

inflationary

measure.

Conclusions

The Fedeial Debt—

The most reassuring conclusion
following from our bond's journey

Vehicle of Inflation?

is that

inflation

is

Reserve's

lending

would

tem

of the banking

be

would

Stop

sys¬

enhanced.

6—Inflation

In

really

•

gets

portfolio.

be the

The

lable.

results

same.

paying for the

security the

Federal Reserve pays out a cash¬

rolling when the bank decides to

ier's

sell

notes to the individual. He in turn

tne

security

chased
Bank.

by

and

it

is

,

Federal

a

pur¬

Reserve

How does this work?
for

In paying
security the Federal Re¬

the

grants to the bank

serve

balance.

legal

the

On

20%

a

(and

$1,000 bond was in¬
transaction)
the
now
expand its loans

assuming
bank

a reserve

of

requirement

reserve

volved

basis

a

the

in

can

and investments five-fold. Thus
the

of

basis

of $5,000
course, the

power

created. Of
by the banks

be

may

debt of

government

$1,000, purchasing
loans

new

on

be

may

for

productive purposes, reducing
thereby the inflationary impact.

Nevertheless, this debt monetization energizes the engine of infla¬
which

tion

easily get out of

can

The
pay

Federal

Reserve

can

also

for the bond by printing Fed¬

eral

Reserve

can

cash

notes,

in

its

the

or

excess

bank

Reserve Act

amended, the Re¬
serve
Banks
can
print Federal
Reserve
notes
as
long as they

of

be

the

as

backed

by

25%

a

certificates

gold

and

bonds

government

reserve

and presents

75%

commercial paper. The bond

or

then

selling

the

up

made

the holder receives a de¬
posit of $1,000 and the bank a
reserve of $1,000. The bank must
then set aside $200 as required
But, it has $800 in ex¬

reserves.

which it can
the tune of $4,000. Again,

reserves

cess

only

short

power

$1,000

debt.

8—The most direct route
inflation* would
bypass
the

Stop
to

several
ated

stopping

amended

so—

"That

in

terest

individual, instead of detouring to
a

commercial

bank,

could

have

taken the shortcut to the Federal

-or

.

»

to

as

may

without

will

either

by
the
United
principal and in¬

be bought and sold
to

maturities

open

market' or

regard

in

the

also

directly from or to the United
States;
(but)
the
aggregate
amount of such obligations acquired directly from the United

tempt

not

exceed

$5,000,000,000."
[Section
14Federal Reserve Act as

3(b)

amended.]
Each time
to

its

expire

The

latest

/' ' '

this amendment

life

was

was

extended.

it in
effect to
July 1, 1952 with the
maximum
permissible
holdings
still $5 billion. An extended policy
of

the

now

limited

base

That

in

check

bonds

the

of

we

strated

out

of

country—and
this is demon¬

do

can

savers.

in

Graph 3, which shows
the growth in outstanding Federal
securities.
The
banking system
owned

almost

billion of the
Federal debt in 1950, or 32.6 per
cent of the outstanding amounts.
We should aim at getting as many
of

these

$84

the

into

bonds

of

hands

keeps

direct

pur¬

OWNERSHIP OF U.S.GOVERNMENT

Great

ferred

and

turned

active

stocks

common

and

strong

last

week

the

middle

was

announced that

of

pre¬

Great Western will remain at this

both

Western

recent

around
when

it

compromise

a

all

move

reestablishment of

the

towards

must

we

convertible

a

for
only under its discipline will the
banking system be prevented from
overexpanding
credit
and
the
government constrained from tak¬
ing the easy road to inflation via
standard,

gold

monetized

8

plan

the week

details

released late in

were

and the court set hear¬

ings for
tered

Actual

suit.

The suit

May 25.

the

around

of

By the

4

to

working in

reverse.

amounted to

sought

maximum

of this

in excess
the grounds

arrears
on

City Bank of New York and C. J.
cessful
State

bid

of

offered

submitted the

Co.

the

for

$65^,000,000

The syndicate
purchased the bonds as 2Vzs and
iy2s, and the terms of the bid-pro¬
vided for

a

May 8.

net interest cost to the

State of 1.5696%.

Two other bids
the

at

entered

sale,

an

of¬

Chase National-Bankers
Trust Co. account being based on
a

by

a

1.57319% net cost, while a syn¬

dicate managed

by Halsey, Stuart

National Bank
of New York, and First National
Bank of Chicago, offered to pur¬
Co.,

Inc., First

chase the bonds

The

a

on

successful

1.582% basis.

City-

C. J. Devine group
bonds

for

legal

are

is re-offering
public investment

banks

investment for
trust

and

savings
in

funds

New

York, Michigan and certain other

States,

savings banks in

and for

Connecticut

and

Massachusetts.

The bonds, in the opinion

of

coun¬

their claim to the back divi¬

up

above $7.50 a share.
This
important victory for the

dends

is

an

company
in
other

railroad

similar

little hope

had

cases

this point

on

expenses,

to be fixed later by the

This appears

price

to

as

Lynch,
Braun,

Pressprich
Pierce,

American
San

Trust

(925

(930

I.

Jun« 30

o.

Prior to 1932

b.

No

1935

(940

1945

&

Beane;

&

Co.

Company

Inc.;
of

Rhoades & Co.; Lee

1950

Higginson Corp.; Alex. Brown &

fifvrat
in* than

breakdown

Merrill

Francisco; Estabrook & Co.;

Carl M. Lqeb,
'920

City

& Co.;

Fenner

Bosworth

S I billion

Soureo:

U

S.Trootory, Fodoral Rotorvo

Sons; Mercantile

Trust Company

prior to 1937

PREPARED BY. ECONOMISTS' NATIONAL COMMITTEE

ON MONETARY POLICY

ONE MADISON AVENUE, REM YORK,




N.Y.

of

Baltimore

& Co.

and

R.

H.

somewhat higher than a year ago
far in 1951, presumably at-least

in

part in

have

penses
and

reflection of the Feb¬

railroad strikes.

common

the

first

Other

ex¬

continued high ;/,
share earnings for

also

quarter dipped

to $0.95,

earlier.
expected that this trend will

It is

a year

be reversed in future months and

it

is

that

estimated

now

for

the

full year 1951 share earnings will
at least match those of a year ago.

reason¬

a

Ronald A. Beaton With

dating

the

main

The

expenses.

of the settlement

setting up of

to

pay

a

Goodbody & Co.

feature

is, of course, the

formula for liqui¬

arrears

that

do

exist

the terms of the stock.

under
A

payment of $0.75
last

made

March,

a

share

was

the
The company
has agreed to make a further pay¬
ment against arrears of $3.00 a
share on or before July 16, 1951.
to

arrears

$6.37 Vz.

regular

Also,

reducing

quarterly

current

dividends will be maintained

Starting next year

year.

this

for¬

a

mula will be adopted for payment

$3,371/2 arrears, along with
continuing regular quarterly dis¬

of the

60%

bursements.

"Available

of

so

-

to this purpose.

dedicated

of

way

In

and

struc¬

of any

excess

Income."

Net

"Available
a

that

the

Moulton

Beaton

A.

has

become

full

the

Although
suit

Beach
for

Drive, North.

years
was associated
Merrill Lynch, Pierce, Fen¬

many

with

& Beane in Florida and Ohio.

ner

Under

stockholders

objected

to

the

in

man¬

agement spending large sums

on

property

asso¬

Co., 218
Mr. Beaton

ciated with Goodbody &

With Carr & Col

is quite likely
arrears
could
be

liquidated next year.

the

ald

formula it

such

their

PETERSBURG, Fla.—Ron¬

ST.

ar¬

tures will be limited to 19%. Also,
the

(Special to The Financial Chronicle)

be

income,

available

this

riving, at

Ronald A. Beaton

called

will

Income"

Net

(Special

to The Financial

Chronicle)

DETROIT, Mich.—Acar Z. Bill
has become associated with Carr
&

Co., Penobscot Building, mem¬

bers

Detroit

the

of

Stock

Ex¬

change.

dividends, there is

Shader-Winckler Adds

this

has attained 100% DiesTo reap the full bene¬
Bank and C. J. Devine & Co., the elization.
fits from this new power through
underwriting syndicate includes,
the
speedy operation of heavy
among
others, J. P. Morgan & tonnage trains it was obviously
Co., Inc.; The Northern Trust Co.; necessary to expand and modern¬
ize yard facilities and strengthen
Smith, Barney
& Co.;
Lazard
track structure.
This, just as ob¬
Freres & Co.; The Philadelphia
viously, costs money. As a matter
National
Bank;
The First Na¬ of fact, the track program has not
tional Bank of Portland, Oregon; even yet been completed.
W.

$5.59, before sinking
compared

and other reserve funds,

with $2.73 reported a year earlier.
The transportation ratio hag been

agreed to pay reasonable fees and

that

R.

maintenance

Nevertheless, com¬
earnings
last
year

although past experience compared with $1.24

rather than paying
no question but
policy has materially
has an assessed valuation of $11,913,750,000 and total bonded debt, improved the basic status of the
company and, therefore, the longincluding the present issue, of
term prospects for both the pre¬
$259,232,000.
ferred and common stocks.
The
sel, constitute general obligations
of the State of Michigan which

In addition to the National

share

ruary

amortization of
defense projects over normal de¬
at prices to yield from 1.10% to
preciation will be added back to
1.65%,
according
to
maturity.
reported net income to arrive at
the

growth.

As part of the settlement the
suing stockholders agreed to give

maintenance

National

I

suc¬

Michigan hospital bonds

on

Class

so

ant

syndicate comprising groups

&

paying

ings

forestall
lengthy litigation with its attend¬

formerly heade'd by the National
Devine

than

a

retarded the earn¬

course,

mon

dividends.

able

Offered to Investors
A

rather

provements

with

heavy

suit had

event. Also, as part of the
general
plan the company has

Michigan

Continued

has, of

court.

State of

comparing

cumulative, whether or not earned,
to a maximum of 15% ($7.50 a
share on the $50 par value). The

up

in any

$65,000,000 Bonds of

and

As

transportation costs.

average of 36.9%.

the stock, dividends are

of

terms

cen¬

question

claims for back dividends.

ers

Stops

recent

of

recently as 1947 the road had a
transportation ratio of 44.-3%.
Last year it was down to 30.6%,
among the lowest in the country

the

would indicate that the stockhold¬

debt.

8

a

expenditures

have been reflected sharply

in lower

of

spending money on property im¬

Above*

heavy
years

stockholders'

striving

the

high level at least for the
of 1951.
Benefits of the

balance

had been reached in the preferred

prevent the further growth of
Federal debt.

to

while

savers

Maturing serially on June 1 from
1953 to 1971 inclusive, the bonds

SECURITIES, 1920-I9601

Chicago

that directors had been derelict in

individual

&

extension

the

take

to

credit

fer

the twelve Federal Re¬
shall

hold

to

get them into the vaults of

were

banks

tend

banks' portfolios8—contracting the

States which is held at any one

serve

Chicago Great Western

a

purchasing power and the result¬
ant pressure on prices.
Concur¬
rently we should make every at¬

time by

effected when

Stop 7—The bond holding of the

or

which
are
United
which
are
fully

obligations

guaranteed

pro¬
on

base, will not only militate
against further debt incursion, but

direct obligations of the

ex¬

repaid.

notes,

bonds,

any

other

impact is very temporary
since compensating reductions in
are

early

thirties the Reserve Act has been

ary

balances

*the

Since

tax
and

once

directly

Banks.

security

the loan from the Federal is

proceed

Reserve

ceeding fifteen days, the inflation¬

reserve

and

above

imposed at

enumer¬

Treasury to the Federal

back¬

not

places

from the

as

periods,

upon

in
potential purchasing
is conjured up out of a

$5,000

collat¬
eral. But since the loans may be
for

for the in¬
Assuming the

deposit.

bond,

loan from the Fed¬

eral, using the security

are

20% legal reserve and $1,000

same

the

a

system

these

of

backing

as

dividual's

Federal Reserve
Bank, the commercial bank could
have

payment,

banking

Part

reserves.

used

Congress and the President.
of

his

turns these in for

the

gives

new

States

to

in

it

for

Bank

Reserve notes,

printing- of money to four times
the gold
reserve; and the ratio
can
be lowered at the discretion
Instead

deposit

it

case

redemption. The Federal Reserve

'States

outright

uses

else, if payment is in Federal

ing arises automatically from the
above
transactions, limiting the

of the

or

which

in

uncontrol¬

not

pay-as-we-go

broad

the check to the Fed¬

Reserve

eral

acceptable

or

will

seller

Reserve

bank. The bank then turns around

reserve

arising from the bond sale and
get Federal Reserve notes in re¬
turn.
According to the Federal

can

consumption,

lend to

control.

Federal

or

deposits it in his bank
for

'

*

check

A

gram,
would be released and the overall
power

.

disastrously

company

property
rehabilitation
program,
Chicago
Great Western in recent years has
had one of the highest mainteReflecting

the

heavy

(Special to The Financial Chronicle)

DETROIT,
nelli
of

has

Mich.—John R. Pa-

been

added to the staff

Shader-Winckler

scot

Building,

Detroit

Co.,

Midwest

and

Penob¬
of

the

Stock

Ex¬

members

changes.

Specialists in

RAILROAD

SECURITIES
Selected Situations at all Times

nance-of-way ratios in the coun¬

try,

well

above

the

industry

Last year
this ratio
amounted to 22.8% compared with
average.

21.9% in 1949.

The industry

as a

had a maintenance-of-way ratio of only 13.6%.
It is expected that the ratio of
whole

last

year

JtJt&ivzlni
j

w

t

o

Co.

*/y(yi1 * ' « •

25 Broad Street

New York 4, N. Y.

Telephone BOwling Green 9-6400
Members Nat'l Assn. Securities Dealers, Inc.

28

The Commercial and Financial Chronicle

(1964)

.

Thursday, May 10, 1951

.

.

They look ahead not to Security

THEN and NOW...
Reporter

Governments

on

Now of course the fear salesman

market

is

again

could be

CjUBSS Who?

By JOHN T. CHIPPENDALE, JR.
government

If You Can't Turn to Page 33

tion

shot

spurt which carried it up from the lows. A combina¬
forces is working in the money markets now but the

of

of

absence

buyers

I

again the most important reason for the
declining trend. As has been the case, volume continues on the
light side, but enough sellers are around to keep the pressure on
quotations. This makes for a receding market with many issues
stand

cannot

its

on

keep

to

orderly-

matters

It

is

ican

growing and expanding and pros¬
pering.
/
Remember 1942? As far back as
that, our fear merchants were
hawking a postwar depression as
a
sure
inside tip. We hadn't hit

hadn't
in the Pacif¬
ic, but we were doused with the
drizzly prediction of 8 to 10 mil¬
lion jobless as soon as the shooting
Normandy Beach—and we
begun the island hop

have

best

For the first time since 1933, the Treasury

of

1951-53, which

announcement that the

an

at the earliest call

given

of 1951-53

2s

to

were

and in spite of our
greater
production,
Korea caught us with shortages of
everything—including manpower.
We were so short of steel that we

date, it is believed the market would have been

On the other hand, the passing over of the first call of

opment.

these 2s, in the

opinion of many followers of the money markets,
the market is in for another unsettled period, if
this should only be brought about from the psychological angle.

probably
;

prices, especially the longer-term
level, has been a very hard blow for the

to

absorb, especially from the standpoint of confidence.

Question as to whether another crack between the eyes so quickly
after the first one, will not have a rather adverse effect upon the

expect

government security market,
There

no

was

be possible to refund this obligation at

rate.

;

'

-

.

And

,

'

.

■

•

,

of

and

By

are

still

on

the sell

around, because the desire for liquidity is
•>

strong

as

of the

in

market,
sale

for

been

shaded

to

conform

been

taken

out

rapidly

enough

have

to

to

cautious

We

get

GRAND
J.

Korff

with

RAPIDS,
has

become

associated

Walter J. Wade, Inc.,

Mich¬

igan
Trust
Building.
He was
formerly with Paine, Webber,

H.

CITY,

Waddell

&

Inc.,

JOPL1N,
namer

is

Looper
Bank

&

V"

C"L c™ON,CLEI

Mo.-—J.

now

f--0>

Arthur

associated

went




■«

of

Mo

_

1012

Walter

with

now

.

400

with

Reinholdt

&

-

Doing

insanity

all know how Russia

we

There

fatten

to

the

was

larder

The Kremlin

ple

glimmer

Now
from

look

com¬

Lazarus

a

for

in

in

of

onset

the

and

five-year

new

Russian

The

48

workers

hours

have

anything.
have

she

struck

52

pumped

40

and

44

will
of

has

taken

challenge

erhouse. We haven't

the

and

Russia

the shoes off the feet
people and the clothes off

take,

its

our pow¬

even

scraped

jam from the breakfast toast.

This production capacity of ours

.

worth

The

own.

Russia

a

cold

turned

is

El

our

Dorado—and

it's

our

guardian angel. It's our security.
But what

are

the fear salesmen

1950,

purposes.

steel

The

steel

our

of

the

slant.

be

Most

oil? What are

uses.

all

figures
increase

capacity

by

about

three-

total

output

Russia's

at the end of its

Maybe
F
are

Gardner,

..

ty good for
we

take

our

side. But how

we

can—not

communism

around with

can

solid comfort in it?

any

I don't think
as

five-year plan.
think this looks pret¬

we

a

is

as

long

wandering

bayonet in its hand.

our

going to do with

we

railroad cars? And all

aluminum?

all

And

our

our

electric

power?
What

*

think

the

fear

are

mongers

misreading the American success
*

of

-

the

;

stories
ever
told, and it can't be told
twice the same way. The plot can't
one

be

outlined

keeping

in

greatest

There

advance.

is

with the speeding
of American destiny,

pen

I

don't

up

America

what

know

going to look like 10
but I'm

now,

theme

the

America
been

The

is

now

thing:

one

American

won't

story

cess

suc¬

change.

and

is

from

years

of

sure

the

of

For
has

always

tjje land of calculated risk.
United

States

was

born

as

a

political and social risk—with the
cards stacked

dynamo
Put

against it—arid the

our

thrive

We

I

of

Freedom

believe

economy

is

risk.

risk—because—we

on

First.

the

American

success

story is only in its opening chap¬
ters.

Clean,

ahead

of

bright

pages

Together,

us.

are

we

going to do with
plant capacity?

more

we

are
can

rewarding chapters, and to¬
we can
share in a new

gether

abundance

Dangerous
Goods

Avalanche

of

two-year

earth.

of

*' 1

the

fruits

of

the

Y

1

*

Ahead

They look ahead to the end of
our

in

ingenious
ravens
of

inscribe them with braver, bolder,

this genie of new
No

the

mistake

no

their backs to

pumped

to

hours.

in

rich

too

opulent

sense?

It's

rest, which could

too

land

story.

a

partner in

poor

a

■

this

calamity for the owls of common

week—plus

We

1950.

but

cry

peace.

I

mean

tons.

We

steel—its

will

battle

to

war

production is a fine

doctrine that

minds

never

we

us

as

Isn't

war.

tell

salesmen

well draw the fires when
mobilization is complete. I think
we have shaken off the fossilized
might

gave its peo¬

Russia

1950.

at

again.

over

and

of
up

says

tons

tons.

another

ing force. I think they are failing
things all

to allow for those same

talent

we

if

figures

Russia

military

They failed to allow for the new
appetites created in a vast work¬

moment to relax between the

a

the

prices for a long stretch

-The, fear

aggression.

so-called days of

steel went for civilian

fourths

Locust Street, members of
New York and Midwest Stock

Exchanges.

out¬

so

Kremlin

a

underneath the table, for the Rus¬
sian people had to live on crumbs

need

we

million

in

here's

for

our

alone

Mayer and Gilbert F. Tuffli

Ken-

J°Plhi National the

Building.

Loms

oil.

million

"S-Day"

ST

even

clamoring about?
while we produced about 97 mil¬
Why,
they
are
asking
what
lion tons.
we're going to do
with all our
Much of Russia's steel—and she steel
capacity after "S-Day"? What
keeps this figure a dark secret— are we going to do with all our

(Special to The Financial Chronicle)

Looper & Co. Adds

doubt

out 28 million tons of steel in

Baltimore Avenue.

A J J

that

modities.

It's

high. How

Russia

story of its
figures show that

With Reinholdt Gardner
JP

to

in Russia,

little

Jackson & Curtis.

I

her

I think

own.

556

1945.

in

wants

civilian

of years.

so-called voluntary hours on their
Is

million

tons

And

Mo. —Walter

Reed,

on

coal.

mined

298

Haglage has become connected

with

Russia's

than

Russian

286

Here's

(Special to The Financial Chronicle)

KANSAS

it

better

a

our

Here's
mined

With Waddell & Reed

Mich.—Jack

of

pro¬

value.

all-time

going

against

very

recently.

Walter J. Wade Adds

strip

secur¬

none—in
few production laps

a

ahead of Russia. We must

sweated

the

come

in

(Special to The Financial Chronicle)

face

Russia

stack

According to reports, the 2%s of 1955/60
a
couple of fairly sizable operations

way.

involved

are

know.

what's

higher prices.
Scale purchases are being made, but
no set pattern is being used. The 2s of June and December .1952/54
are also among the issues that commercial banks have been taking
a

keeping just

no

mind will understand the

taking

its

an

What

at

been

hitching post. There's
ity for us—absolutely

a

plan.

million

in

at

1950 hit

The longest bank bond, the V~k% due 9/15/67-72, it is indi¬
cated, is now being bought by certain deposit banks that were

have

ag¬

gain
goal for us—not

a

starvation diet of the last

We

on

in

believe

to

little influence upon quotations.

sellers

synthetic

high is up? That's what

the pattern

but it is reported that the bonds that have

have

believe

to

and good

be

ly handsome tableful of key

as ever.

to

failed

Any Communist production

in

partially-exempts, while not bucking the trend, have
nonetheless been moving into strong hands when they come into
Prices have

for

cars

coincidence, we
for this two-year

up

war

guessers. They
allow for the long-cor¬

bad

They
failed
to
allow for the
vitality of an economy that had
known
almost
full
employment

it. And the first thing Russia tells
us
is that its over-all production

The

the market.

oil,

the

of

salesmen

were

ralled

managed to produce this relative¬

safer

out

*

•

and

products.

arithmetic

no

bonds

steel

pletion of its latest five-year plan.
Do you know any better reason for
our expansion? I don't.

tendency noticeable yet among these insti¬
on
the way down.
There has been a
minor amount of liquidation on the decline, but this has come
mainly from the smaller holders of Treasury obligations.
While the near-term market has been quite steady, Treasury
bills have been appearing from time to time, because money is
tight, and this has taken some of the glamour away from the
shorts.
Nonetheless, there is still a good demand for shorts
let

to

and then.

fear

years

duction spin at the same moment

I

and savings banks

The

that Russia is crowing about com¬

being consummated, according to reports.
It
should be borne in mind, however, that the volume involved in
these exchanges * is small compared with what has gone on in

tutions

for

sheer

cranking

swops

side, but there is

coal,

ricultural

t

them in the past.
Insurance companies

for

rubber, for chemicals, and for

'\

Although there is a reluctance to register losses, as has to
be done dp making switches between the various issues these days,
especially in certain of the tap bonds, there is nonetheless a fair
amount

goes

what

market in it most of
a black market in it

gray

has got to

30%.

proportion for railroad

same

Market Movements
n

of

aluminum and power, goes in the

favorable

more

a

•

_•

a

the time and

potential of 89 ^ million

a

increase

—an

question about the callable bond

being taken
care of by another government obligation, but the Treasury evi¬
dently felt it could not replace the 2% issue without putting out
an obligation bearing a higher rate of interest.
Also, in the future,

-'

13

page

Over the Hump of Production
In Two Years!

This kind of treatment is not easily taken and there is considerable

it may

jrom

every now

The decline of government bond
market

had

Continued

means

issues well below the 100

force

ing

enormously

retired

be

fillip from such action which would be a favorable devel¬

a

Record incomes. We had ex¬

pansion, not depression.
And in spite of our huge work¬

at the first

not to be retired

are

history. - We had
Record busi¬

in

years

ness.

2s

depression. We didn't have
The farmer had his

record employment.

opportunity, can be called next Sept. 15, or each March and
Sept. 15, on four months' notice, prior to maturity. If there had
been

a

i

breadlines.

call date.

The

■'

happened? We didn't

what

But

the calling of an issue for redemption at the earliest

up

'

over.

was

ing of this obligation. The Treasury cleared up the mystery yes¬
terday by announcing that these bonds would not be retired on the
passed

frightened coyotes, the Amer¬
nation went on working and

like

tember, 1951-53 would be called on May 15, while in other places
the opinion was strong that the Treasury would pass up the retir-

first call date, Sept. 15.

of our emergencies
in calamity hqve

dealers

predicted collapse and ruination.
But while they bayed at the moon

points of concern in the government market
was the 2s of 9/15/51-53.
Feelings about what would be done with
this issue (to be retired or not to be retired) had been wavering
in both directions. In some quarters the guess was that the Sep¬

„

often

In every one

One of the real

#

past record. They have
been wrong than

own

more

these

that

Treasury Ignores Call Option

;

long-shot wa¬

no

right.

been in there lending
reported

making

I'm taking a side bet against
on the basis of

their
far

selective
purchases of the tap issues by the Central Banks have been the
way in which protective custody has been extended to the market.
The market is trying to establish a bottom, and this will be
done, with official help, but it is going to take time to accom¬
plish it. It does not take much now to shake confidence because
of the severe shock the market has already suffered.
Nonethe¬
less, there are levels beyond which quotations cannot be allowed
to go, and once these areas are established there will be an en¬
tirely different tone and psychology in the money markets.
support

else.

anyone

the fear salesmen

Because the so-called free market

feet, Federal has

own

on* a long-

win

to

chance

as
am

gers.

is

back to the lows of the year,

bet, and Gloomy Gus has as

much

shortlived

right. There's always that
They are making a long-

cnance.

shot

the defensive, after a

on

America.

for

f

Our

The

Day for America but to Bust Day

production

expan¬

sion plan and see a dangerous av¬

With W. R. Luttrell
(Special to The Financial Chronicle)

COLUMBUS,

Ga.-rWilliam

alanche-of goods to drug the mar¬

Luttrell,

ket and. founder

with W. R. Luttrellj

the economy;

Jr.

is

now

R.
associated

Swift Bldg.

.Volume 173

Number 5010

Continued

.

.

The Commercial and Financial Chronicle

.

in

from page 14

started

and

making

Federal

loans direct.

Veterans expenditures could be

We Don't Have

current year and the one be¬

ginning July 1:
How

long

here

what
•

I don't know.

at this rate?

crease

But

,

expenditures in¬

can

we

indicators

some

are

of

simply by eliminat¬
ing these "busy beaver" opera¬
tions, without impairing the bona
fide obligations of the government

Economy

Military expenditures last year
$12.3 billion.
It is esti¬

totaled

in

that

mated

the

current

year

saved

reducing

by

be

for

requests

Military

Since before Korea the

Establishment

than

the

In

coming year,

beginning July 1, military
ditures

will

total-

more

expen¬

than

$40

billion. Military Establishment of¬
ficials recently testified before the
Senate

Armed

Services

Commit¬

tee that after next year the mili¬

tary budgetswill -exceed $48 bil¬
lion, under conditions short of war.
/

General. Eisenhower

mated

before

be

may

on

esti¬

has

that

Congress

we

war-alert basis for

a

20 years or more.
\

could

dollars

civilian employment.

$20

:

doubt that at least

no

billion

half

ending June 30 military expendi¬
tures
will
be
something under

billion.

has

been

employ¬

ing civilians at the rate of more
1,000 a day.
In February

they have more than 35,000

people in the Pentagon, and they
have 500 military establshments
scattered around the country.

There

is the

of

case

easy

ex¬

the Public

is

of

qualified civilians to hire.
So they are trying to hire inexpe-'
rienced high school children, pay,
them $42 a week while they send"

pre¬

To

-

a

which

the

administration

has

re¬

quested, add approximately $5 bil¬
lion for veterans, and add $9-$10
billion which the President has

also it has been disclosed that the

Secretary of State is to have con¬
trol over the expenditures' to be

the

of

case

Post

in

these

times

of

domestic - civilian military and economic.
1
including socialized
This shift of control is the sequel

they

In

an

over

All this adds to
the

billion

$80

Federal budget

a

foreseeable

future

of

$75-

home,

nearly

we

a

working

are

third of the time for the

government.
Against the probability of Fed¬
eral
expenditures at an annual
rate of $75-$80 billion, the latest
estimates on Federal revenue, tak¬
ing into account the prospects for
still further inflated incomes, in¬
the

dicate
year

Federal

take

tax

next

will be between $55 and $60

The

ary

President

started

military aid would be
in such

manner

a

as

to

programs should be sep¬
and so-called economic aid

arated

abolished.

can't

We

asking for $16 billion in

new

income and corporate taxes. Then
he
revised
his
request
to
a

kind

of

administration

time.

a

fight

war

a

them at
them in eco¬

arm

all

at* the

same

affect our people at home is
by one serious ex¬

demonstrated

his January Budget
Message, the President said: "Our
In

ample.

chronic

shortage of doctors, den¬

tists and
as

nurses

of

more

the armed

faced

sincerely believe that reduc¬
tion of Federal expenditures by
$7-$9 billion
under
the "• Presi¬
dent's

that it could be done without im¬

How these
may

single in¬

foreign aid programs

luxuries
It is

any one

little too much to ask.

people,
and indulge

nomic

over

cident.

'request
for
the- coming
would be the most whole¬
some thing that
could happen to
this country at this time.
By my own analysis, I know

those

for

will be aggravated

them

called

are

services.

.

into

with added

year

pairment

of

a

single

essential

function, and I have submitted
suggestions to the President in
detail.

In

brief, I have suggested

reducing:

expenditures
$0.5 billion;

Military
least

by

Foreign economic .aid by

.

.

"Many communities that will be

in Janu¬

this

I

inseparable.

These

billion at current tax rates.
•••

accumulation of dissatisfaction

dignation

and

spending.
means

judg¬

nomic

make it

That

considered

own

than they were expressions of in¬

Add to that
state and
local
public expendi¬
tures and you have an annual tax
bill of nearly $100 billion, if we
are
to avoid inflationary deficit
year.

a

my

to the earlier indication that eco¬

scrambled

health

burdens

than

at

more

$3 billion;

Veterans

expenditures by up to
arising from defense needs do not $0.5 billion;
have adequately staffed local
Domestic-civilian expenditures
health departments.

by up to $5 billion.
If orderly reductions in these
conditions which
the President says exist through¬ proportions
were
made
in the
are bound to come unless we re¬
out the United States, I am in re¬ current
budget and administrators
sort to more deficit spending, or ceipt of confirmation by both the in the executive branch would ap¬
reduce expenditures.
ECA and the Public Health Serv¬
ply them with sympathetic effec¬
If the President's January tax ice that we are sending doctors,
tiveness, I sincerely believe we
request were granted, we would nurses and public health experts would achieve more efficient mil¬
be
raising
Federal taxes 60% to Indonesia, Indochina, Thailand itary preparedness
and foreign
within a year, counting the two and Burma.
assistance, render better service to
increases already imposed.
The purpose of these expedi¬ veterans who need it and accom¬
To grant such increases would tions, according to ECA Adminis¬
plish more in the essential civil¬
be to take terrible chances that trator William C. Foster, is "to ian
programs.
the free enterprise system would build strength, and vat the same
Oppressive tax increase would
not be
confiscated.
Under such time make a favorable political be avoided. Increased
production
conditions it is questionable that impact on the people."
would be served.
More effective
It would be a fine thing to wipe
preparedness production require¬
preparedness would result. Infla¬
"quickie" hike of $10 billion., No
matter how you slice it, new taxes

resort

to

indefinite

deficit

spending of
nitude
the

a $10-$20 billion mag¬
would be to throw away

inflation

brakes

and

invite

chaos.
The alternative is elimination of

nonessential Federal expenditures.
And therein lies
the

defense

our

and

freedom here and

only hope for

preservation

of

in the world.

Deflating the Expenditure
Balloon

There is only one

major area in
the Federal budget where immedi¬
ate, substantial and constrictive
reductions cannot be made. That
is interest

on

.

.

these

out all of the malaria and

ments could be met.
To

Despite

the Federal debt.

in

Asia

the

and

Near

that achievement would

poverty

East,
seem

but
to be

highly improbable while we are in
a shooting war, and attempting to
arm half the world against atomic
attack.

We must confine ourselves

to meeting the first
of

our

extend

own

security,

ourselves

requirements
or we shall

to failure

in

all

examples

of

respects.

Continuing
where

:

■

with

Federal

expenditures

may

be reduced, we come to the third
major category—veterans' costs. I
do not propose to eliminate one
dollar of pensions, medical costs
or
readjustment aid to men who

have

made

connected

permanent

sacrifices

in

servicethe

mili¬

Only this week are we begin¬ tary service of their country. But
ning to see- the full force of the the Veterans Administration Em¬
Administration's
real
spending pire Builders never sleep. For in¬
plans for the military establish¬ stance when banks as a group, in a
ment and foreign aid take form.
community of 40,000 to 50,000, re¬
There is.

nothing in the military cently responded to Federal edicts
budget as it has finally been pre¬ to restrict nonessential loans as a
sented to alter the reputation of means of curbing inflation, Veter¬
the military services as the most ans Administration agents moved




~

The 7c fare

the

tion- would be curbed.

Respect for

was

reduced

by Court Order to 5c for nearly half

but was restored in March, 1951, and the company is
seeking further readjustments.
(The first quarter loss ap¬

year,

now

proximated $2,100,000.)
/
.•
Public Service Electric & Gas has been earning a fairly high
of return from electric and gas operations—approximating
7% in 1950, it is estimated—and the company was recently or¬
dered by the New Jersey Public Utility Commission to reduce its
electric rates by $5 million.
After a brief demur the company
agreed to this, and the reduced rates will become effective with
bills rendered on or after June 1.
First quarter share earnings
were $1.12 compared with
74c a year ago, despite the impact of
higher Federal taxes. The loss of income due to the rate reduction,
if considered applicable for eight months of the year, would ap¬
proximate 37c a share (after tax savings) in the calendar year
1951—just about offsetting the gain in the first quarter.
The improvement in earnings for the first quarter was prob¬
.

are

his government.

requested; for

in

income from Public Service Co-ordinated Transport
(in 1949 it received 29c a share from the bus subsidiary). Opera¬
tions of the transit companies were unprofitable in 1950, the net
loss of $2,680,000 being due to higher labor costs and lower fares.

gency/

programs,

housing, agriculture and medicine.

of' dividend

emer¬

ment, the recent national demon¬
foreign aid programs— strations were more the result of

made in all

Public Service Electric & Gas Company earned $2.06 last year
compared with $2.25 in 1949, the decline being due largely to loss
/

the

Office Department, already oper¬
ating at a half billion dollar def¬

without

were

subsidiary companies, a huge bus system with annual revenues of
$46 million, whose operations are not consolidated with those of
the parent company.
Electric operations are well diversified,
being about 34% residential, 32% industrial, etc. The company
supplies virtually all of its own power requirements through
steam generation.
Principal industries served include chemicals,
apparel, oil refining, electrical and other machinery, foods, tex¬
tiles, transportation equipment, fabricated metal products, etc.

chairs;

There

&

Gas Company was recapitalized
exchanged for those of Public Serv¬
Corp. of New Jersey, in the dissolution of the latter holding
company.
It is one of the largest utilities, with annual revenues
of $186 million,
about three-quarters electric and one-quarter
gas; it -also controls Public Service Co-ordinated Transport'and

using commercial
telegrams to inquire how many
marriage licenses were issued in
Indiana county during the
ceding. month;

Electric

ice

Health Services

an

Service

in 1948 when its stocks

-

Altogther they are employng a mil¬ icit, considering the printing of
lion civilians; one for every three multicolored postage stamps.
These are only a few examples
men
in uniform.
In some areas,
such as Dayton, O., they have run of Federal spending we can do

out

Public

There is the case of $15,000 for
six civilians for each
Economic Stabilization Agency
drafted.. At this mo¬

they hired
eight men
ment

A few recent

day.

every

amples:

They are cited because
simple, uncomplicated
indicators not only of the kind of
military budget of $48-$50
billion or more/add some $6 bil¬ them to business school with
tui-, extravagance we see every day,
lion or more for interest on the tion paid under government con¬ but they represent the kind of
Federal debt which cannot be cut, tract.
inept administration that makes
add $7-$8 billion in foreign aid
It is significant that this week the man in the street lose faith in
.

SoKfor the foreseeable future:

Public Service Electric & Gas Company

In
the
category of domesticagencies on earth, both civilian
programs,
examples of
in manpower and money.
There nonessential
expenditures
are
has not yet been opportunity to
more obvious to all of us.
We see
analyze the estimates in detail. them
But there is

Utility Securities
By OWEN ELY

to its veterans.

wasteful

a

expect:

may

Public

reduced 10%

In Government
<he

29

(1965)

.

rate
*

v

v

ably due to economies obtained from the purchase of natural gas,
as

well

as

industrial

increased

use

of electricity and lower gen¬

erating costs. The company first began to receive small amounts
of gas from Texas on Dec. 22 (via the 1,840-mile Transcontinental
Gas Pipe

Line), with gradual increase toward the scheduled total
The heating quality of its gas is

of 70 million cubic feet per day.

being increased by enrichment with this natural gas from 525 to
650 BTU, in several stages.
This change is enabling the com¬
to increase the effective capacity of its distribution lines,
reducing the requirements for pipe and fittings. - Public Service
agreement to purchase 45 million cubic feet a

pany

has also signed an

day of gas from the "Big and Little Inch" pipe lines operated
Corp., subject to FPC approval.

by

Texas Eastern Transmission

Electric
Sewaren

efficient

operations are benefitting by operation of the huge

Generating Station. This station was reported the most
steam electric plant in the United States in 1949, as

compared with

242 other

plants, in a bulletin published by the
125,000 kw unit is proceeding

Construction of the fourth

FPC.

rapidly, for anticipated installation in the fall.
However, in addition to the rate cut and the possibility of a
further jump in income tax rates later this year, there is another
factor which may tend to offset the very favorable results being
obtained from operating economies.
On July 1 the conversion
terms for the

6,056,000 shares of $1.40 preference common stock are

changed from 1.1 shares of common to an even exchange- As the
two stocks have been selling close to an exchange parity recently
—in other words the

preference is selling at about 1.1 times the

common—there may be a

considerable amount of stock exchanged

by July 1. Such conversion would of course dilute the common
share earnings, since it would be equivalent to raising the divi¬
dend rate from $1.40 to $1.76 a share on the newly-issued common
stock.

foursomes

posing

At Bond Club Field

Day

"Bulls"

and

Street

Wall

be

will

Matches

Golfers to Compete

played

in

two op¬
member of

consisting of

teams.*, Each
will drive off from

the foursome

and

tee,

every

each

team

after

of two

the

drive

will select the

ball
to
be
played.
The second
will fight it out for the
shot will then be played by the
championship of the Street
team member whose drive has not
at this
year's Bond Club Field
been
used.
Thereafter alternate
Day on June 8.
The 27th annual
shots will be taken until the hole
contest
for bond men will be
ate objectives we must achieve.
is finished. On any penalty shot
played over the two courses- of
the
alternate player takes the
the Sleepy Hollow Country Club
next shot.
Joins R. F. Griggs
; at Scarborough, N. Y.
All matches will be at medal
With
several
hundred entries
WATERBURY, Conn. —Frank
N. Hess is now connected with in prospect, Gustave A. Alexisson, play using one-half of the com¬
The R. F. Griggs
Company, 35 Chairman of the Field Day golf bined handicaps, with one point
committee, announced yesterday being scored for the side of the
Leavenworth Street.
that the Bond Club would sponsor winning team, and one-half point
a
two-ball
foursome
selected scored for each side should a tie
With Waddell & Reed
drive medal play tournament, a net score result.

Federal

programs,

and

faith

in

be
restored at least in some degree.
These I submit are the immedi¬

Federal

administration would

(Special to The Financial

LINCOLN,
Kinder

Waddell

is

&

now

Reed,

Inc.,

W.

This

type of tournament was se¬

with

Wall

Chronicle)

be
.

.

Street's

organized

Street.

N.

to

Bond Club cups
be played lor,

.

best

into

golfers will

two

for

J. Lee.

'

the

Joins William Beeken

opposing

the
President
and the
by Vice-President James

contest,
"Bulls"
captained by
Clarence
W.
Bartow
sides

C.—Walter
G.,
Taylor
is
associated with
Bache & Co., 101V2 West Market "Bears"
GREENSBORO,

continue

lected to replace

number of entires.

Joins Bache Staff
(Special to The Financial

The traditional
will

individual medal Mr. Alexisson announced, and
Barkley play in order to speed up the twice the usual number of cash
completion of rounds by the large prizes will be awarded.

affiliated

Building.

golf

variation of the Scotch foursome.

Chronicle)

Neb.—Woodrow

"Bears"

with

WEST

Ernest

M.

PALM

BEACH,

affiliated with William S.
nn

Fla.—

Guillaume has become

Uarupv

Riiildinsf.1

Beeken

30

The Commercial and Financial Chronicle

(1966)

tention in any of these areas is bona fide
the peoples is, of course, a bedtime story.

Continued from first page

We See It

As
;

t
.

The Magnates

Its spread "all over the world" in any really
effective way would set mankind back thousands of years,
The magnificent results obtained by the free enterprise
system would be lost in large part, and progress toward
better things which has always been a characteristic of
that system would be destroyed. Despite a good deal of
flirting with such notions in recent years, the American
people, we feel confident, would never knowingly adopt
such systems of social and economic organization as com¬
munism or socialism—quite regardless of whether or not
they were an instrument of conquest by some alien people.
is

poison.

a

lonialism

of communism
that it must spread to embrace all mankind.
It was the
"workmen of the world," not merely those of Germany,
to whom Karl Marx appealed in his famous Manifesto.
Much has been said of late years about the possibility of
the co-existence of communism and private enterprise,
and of orthodox
Communist doctrine on the subject.
Whatever the

to this

answer

question

may

Co-existence to him is but

an

their type of social and economic organization.

The dif¬

validity of their posi¬
tions and in the aggressiveness and the techniques em¬
ployed in spreading their respective doctrines.
it

when

is

the

semi-religious and

proselyting

Russian

brand

retain

we

a

,

iffs and other restrictions against
the freedom

of honest

other

with

trade

terms

on

mutually

^

to

(

persons

t

persons

honest

acceptable.

China does not appear to

There may

the

degree of socialization or in the
mechanics of administration ad-

be as yet very much imbued with
Mostly, they appear to be in¬
terested chiefly in the restitution of old boundaries, the
taking back of territory which through the centuries has
been wrested from their peoples.
That their faces are
turned south and not north may well be an -adjustment
imperialistic

urge.

the realities of the

to

perialistic
Europe.

Continued

situation, and little else.

radiates from

urge

Moscow
.

Kremlinism

from

is

our

.

—

basic

r

:

by

,

Thus,

principle.
that

abroad

in

our

I

:

believe,

.

have clear proof at home and

we

does

of

democracy

,

itself

.

automatically guarantee
freedom; in fact, we have proof
that regimentation lurks insidiously behind democratic promises
of governmental-security.

.

number

enemy

does

be a difference in the

two major political
parties. But it is difficult to distinguish any major difference in

The im¬

it

as

vocated

one.

not

:
;
;
.

3

page

Lost Freedoms

will

I

In Search of Freedom

inter¬

ference between the two is in the

But

co¬

This idea

be, it is clear

mediate step between things as they are and things as
they ought to be. In this he is not unlike (although much
more
aggressive in his tactics) the prophets of democracy
who for the most part see the salvation of the world in
;

victim of

a

the

Here,

two-party system and the right to
vote, but most of the leaders of
both parties are pledged to the
same
general program
in such
matters as governmental housing,
social security, subsidies to farmers, loans to poor business risks,
rent - controls, price controls, tar¬

know full well

backwardness.

own

than

socialism.

of

accordingly, an essential political trick
for puppets. Of course, Russia
is one of the powers which has been active through the
centuries in exploiting Asia.
Of course, Russia has not
the slightest notion of ending this exploitation.
As for
the Chinese themselves, even the Communist
regime in

that the true Communist envisions conversion of all the

world to his notions.

socialism

with which to win support

of the major tenets

one

of its

as

more,

along the lines of British national

of "liberation" is,

A Tenet of Communism

Moreover it is

well

as

Thursday, May 10, 1951

.

.

here in the United States is

"liberation" of

of Moscow

The magnates of Moscow, however,
that most of Asia for centuries has been

.

of„ the

undertake

not

in

surrendered

to

freedoms

many

list

United

the

all

-

have

we

-•

States

v

the restraints against freedom ;
I speak goods and services which will be
of choice that we have voted :
student, not as a given in the future to the bene¬
against ourselves. But such a list teacher.
And, in all humility, I ficiaries of social security will
would include controls over farm- ■
come
here
to
present for your have to be provided from the then
ers, businessmen, industrial work¬
consideration
the results of my current production. They will be
ers, bankers, foreign traders and '
paid for by current taxes or by other
study of freedom.
groups.
It ^ would include inflation. In either case the net
price controls, wage controls, rent *
Social Security '
effect will be to take from pro¬
controls, raw materials controls,
Probably the most clear-cut ex¬ ducers to give to nonproducers.
controlled rates of interest,
in¬
ample of our lack of faith in in¬ When this effect becomes sub¬
flated
money,
artificially cheap dividual freedom is found in the stantial, the incentive to
produce credit, and controlled production.
compulsory social security pen¬ is impaired Or destroyed. And we Each of these measures has the
sion system administered by the must
remember
that
the
very effect of
preventing honest per- •
Federal
Government which
has safety of the nation depends
upon sons from doing what they want <
spread so rapidly over our coun¬ our ability and our willingness to
to do or of forcing honest persons ;
try. I would guess that few per¬ produce! Social Security taxes are, to do
something that they do not
sons here would abolish this sys¬
in effect, savings.
If they are to want to do. As such, each is a :
tem, even if they could. The rea¬ be productive they should be used clear-cut denial of freedom. Else *
son, I believe, is clear: few per¬ to increase our tools of produc¬ why has freedom been forsaken
—

any more than you have.
to

you

a

as

,

fanaticism of communism becomes wedded to the historic

imperialism of a great State such as Russia that it be¬
comes doubly and
trebly dangerous—indeed that it be¬
comes
dangerous at all in a military sense. It is then
that the remainder of the world is called upon to fight
two kinds of wars at once, or at the very least to fight
one kind of war and be
ready to fight another at hardly
more,,than, a moment's-notice. In this respect the world
is locked in a type of struggle which has no precedent
in history,-and one which in consequence requires—but
does not always obtain—the utmost in wisdom.
It has often been said, and is obvious

enough, that it

is not possible to fight ideas—sound or fallacious—with
arms.
All too often, however, we told ourselves that we
-

engaged in such a conflict in World War II. We won
in a military sense, only to find (as we should
have known from the beginning) that we were allied
with the Kremlin which, under its
present management,
embodies everything which we abhorred and were war¬
ring against in Germany, Italy and Japan. The weapons
which are effective against fallacious ideas are truth and
experience. If the Communist philosophy is fallacious—
as we, of
course, know full well it is—then it can make
headway in this or any other "free" country only in the
degree that the people can be cajoled or deceived or persuaded to adopt that which cannot meet the tests of
good hard sense. were

the

,

war

An

To be

sure

Appeal to Good Sense

that

nothing of the sort occurs, the thing
appeal to the good, hard sense of the rank
and file.. Such an
appeal is all too often difficult, and
the results,
whep arrayed against it are set all sorts of

to

do

wiles

held

to

and

bribery in the form of access to the public
discouragingly unsatisfactory, but despite all
we are
confident that the American people can be
back from
going all the way, or even very much

purse,

this

is

are

further in the direction of communism
any
mon

rate

our

sense

or

socialism.

At

salvation must be sought in appeals to com¬

here at home.

When notions

olutionaries"

who

are

coupled with the doctrines of "rev¬

would

force

their

systems upon ma¬
jorities by carefully and secretly planned violence, and
when operations are directed
by alien groups with over¬
weening imperialistic ambitions and no conscience at all,
the situation takes

on

added seriousness.

for General MacArthur to evade the
the center of all this

activity is. No

is in any doubt about it.
of the fact that all of

troubled waters for

Kremlin is not

No

one

It is very

question
one

to where

but the General

but the General is

ignorant
Asia, or virtually all of it, offers
the Kremlin to fish
in, and that the

neglecting such opportunity.




as

well

That its in¬

-

sons-believe that individual free¬

and

dom

for

offer

welfare

own

possible

greatest

responsibility

personal

one's

security

pears

that

believe

we

that

Americans
free

a

in

person

government!

of pur

a

To

present
the

of

proof

the

approach, let

nations

the

of

of

error

our

look

us

world

at

where

free country can or will volun¬ governments exercise the greatest
tarily provide for the welfare of degree of control over their peo¬
himself, his family and his handi¬ ple. There you will find the low¬
capped or temporarily unfortunate est standards of living. Let us ex¬
neighbor. In contradiction of our amine Russia and her satellites.

Declaration of Independence,

own

we

be rapidly becoming

appear to

The

siren

song

government-

ow

is

security has brought
privation to the citizens of

nation of dependents. That phi¬ mass
,' Historical Examples
;
losophy of despair is summed up those nations.
For example, when
the "new
in
the
Look at Britain and her promise deal" was tried in Old
question that is heard
Rome,- it
whenever the subject of security of security from the cradle to the was announced as a
program to
by dependence on government is grave!' The democratic vote of the control prices.
It .was persons,
discussed: "Would you let them British people has brought them
however, who were fed to the
starve?"
when
compulsory labor and a permit lions
they
were
caught
Let
us
consider
the
implied from government to purchase five charging more
than
the- legal
ounces
of meat per person per price.
meaning of that question. To me
But, as they always will,
it says, if people are free and re¬ week.
the people continued to trade on
.

their

for

own

ther

cannot

will

or

not

welfare,

for

care

*

\

;

;

J
:

4
;

,

.

,

sponsible

f

guaranteed

a

they will starve. It says that we
have rejected Christ's teachings
on love and charity.
It says that
we—through our churches and our
other voluntary organizations—ei¬

»

me,

controls

As

.•

areas

daily activities?

the sad part of these
that, even if we disregard the moral issues involved,
I believe they will not accomplish
what they are designed to do.
I
can
find no evidence in history
that they will work and I believe
the reason is clear. It is not, as is
claimed,1 an attempt to control
prices or materials; it is always
an attempt to control persons,

Slavery and Privation

an
ap¬

longer

no

of and forbidden in these vast

expenses

the

in
It

admittedly insecure world.

tion, not for current

terms

Now this fact of compulsory la¬

surprise

a

to

many

who

do

understand socialism. But here
the

words

of

the

the

not
are

Parliamentary

.

mutually acceptable to buyseller, even when facing

and

er

bor in Great Britain may come as

death

J
;
-

;

<
-

V

penalty.

During the French Revolution, I
government tried to stop the j
of prices by condemning the -

the

rise

Secretary of the Ministry of Labor
from his official report on this so-called black market merchants
subject for 1949: "374 directions to the guillotine. But, in spite of
were issued to men who were in
this, prices continued to rise in
the mining industry compelling proportion to the amount of infla- ;
paper
them to remain in that industry, tionary
money
that was 1
-

the unfortunate among us.

that

free

a

is

a

says

results in
progress and

economy

starvation instead of

prosperity.

It

It

that freedom

says

failure and that, for our salva¬

tion,

must turn to the authori¬

we

tarian

concept

of

government-

guaranteed security. I believe this
is " an outright rejection of the

..

printed and distributed by gov¬
were issued to
'
agriculture keeping them ernment.
in agriculture." Thus has slavery,
In Russia, the government tried
in the name of security, come to to stop inflation
by the direct pro- "
a
once free people by their own
cesses
of starvation, the concen- *

and

132 directions

men

in

original American belief in free¬ democratic vote!
dom of choice and personal re¬
It is important to recall that the
sponsibility for one's own deci- British
experiment in government
sioris and actions.
security has not only led to suc¬
I

believe

few would find

fault

with the announced goal of social

security, i.e., freedom from want
in

old

age.

But

if

even

we

are

willing to incur the dangers to all
our
freedoms which arise when
we

maximize

the

"freedom "from
must

answer

the

we

question:

by government?"
The receipts from

riod;

also

it

has

Britain be bailed

postwar

pe¬

required that
periodically

our

primarily by American aid, "with
secondary assists from Canada and
other

Commonwealth nations.

It

if

we

follow this road to bondage?

/

social

completely

controlled

the world has

ever

spite of its 34

years

economy

seen!

And, in
of rigid plan¬

ning, real prices in Russia today
are
among
the highest in
the
world.
•

The

Vital

Question

This brings us to the vital ques¬
tion: Will the price controls,
wage

of is proper, then, to raise this ques¬
still tion: Who will be there to do for controls, profit controls and
"Will us what we have done for others measures against freedom

secur¬

used to defray cur¬
rent costs of government. But the
are

in this

importance

want,"

it work as it is now administered

ity taxes

cessive crises

tration camp, and the firing squad.
It did not work, even in this most 1

End

of

the

Two-Party

System

-

guaranteed

now

being instituted by government
stop inflation and high prices in
our

country?

I believe the

answer

of is "no." I believe that fines against
security so-called black marketeers will

Our approach to the concept

government

other

k

Number 5010

Volume 173

.

.

The Commercial and Financial Chronicle

.

government
officials do wish, to stop inflation,
I

that

our

therefore; that they

suggest,

con-

defitrying to

sult the dictionary to find a
of what they

nition

as

funneled

it.

concede

I

goods and services are just leave them alone?" Besides,
into
rearmament, an he does not want to pass into hisequal amount of purchasing pow- tory as a "do nothing" leader who
er would be withdrawn, by~jends up as a footnote somewhere,
ation. Thus there wouM he^i^*^ he begins to pass laws that will
rious inflation and little or no force all other persons to conform
further general price rise in the to, his ideas of what is good for
overall economy.
them.
But if we continue in the direcThat is the danger point! The
tion we have been going in recent more restrictions and compulsions
years, with a steadily" increasing he imposes on other persons, the
stream of money accompanied by
greater the strain on his own
compulsions
against
individual morality. As his appetite for using
freedom, we have reason for con- force against people increases, he

inflation nor will prison basis,

not stop

terms stop

are

stop. They will find that inflation
is defined as "a disproportionate

quantity of money

increase in the

credit, or both, relative to the
amount
of
exchange
business."

or

That is, inflation is caused by a
disproportionate increase of
money
and ^credit
relative to

question then is:

for the future of our nation,

Cern

the

available goods and services,

por such

vyho or what is

course

a

will bring two

evils that must eventually destroy

fnr
increasing
the
for
increasing
and credit?
According to our Constitution,

vocnrmcihlp

responsible

us_as

money

vaded and conquered.

of

eatinn

Dowers

Federal

the

trol

Nation

A

con-

under

by our banks.
Device

Clever

for

prices that are upon us today. Yet,
this same government is leading
the

attempt to catch
While we are being
watch out for "specu-

posse in
culprits!

the

warned

to

an

black marketeers"

and

lators

the

culprit (our own government)
its
inflationary fiscal

real

continues

more

money

the

to

We

'

while

and

more

of

'

•

now

are

only

we

are

and

goods
'

of
controls.
will find

to create respect for all

way

law is to make sure that all laws

and credit in relation

production

services.

war

creating

of

policies

that no other
group of persons, is

that

themselves respectable.
cause

Laws

normallv honest peoole

to become technical criminals

'

fighting one costly
are preparing for a

not

respectable

laws.

But

are

these

laws aeainst individual freedom of

e^°ri of rearma-

ment, it comes at the time the
goods are being provided.
It is
not possible to have the products
now and to postpone the effort to
suit our convenience. And if the
government does not pay for the
effort
required to produce the

and

our

earnings

though they had
been taken from us by taxes.
It
appears that the sole effect of socalled
"deferred
payments,"
as
previously practiced, is to delude
us into believing that it is possible
to get something for nothing—insavings

as

of having to

stead

work and pay

for it.

It

proper, I believe, to raise
question at this point: How
can
we
discharge that obligation
to "securethe blessings of liberty"

is

this

■stitXonPYnjoin^

upon

and

lihPrHr

nf

•

th

thus

First let

have

We

fourth of

been

told

our

government

officials

tell

cause

standard

when

the

of

this

low

living.

line

of

I cannot fol-

reasoning.

For

is subtracted from four,
result is three.
And all the
one

controls

in

change that

the

consequences

result when
bids

world

answer or

cannot

the natural

that must inevitably
and

more

for- fewer

and

more

fewer

and services.

money

goods
•

I believe that if

government
adopted the forthright approach of
collecting in taxes the full amount
of its

our

expenditures,

we

would thus

eliminate any excuse for building
up

a

easy

jobs of ques-

there

be

of

area

levels.

collectivism,

no enlargement
socialism.
That

For

bureaucracy

on

a

in

of
is

the
the

verted to the seductive thesis that groups. This will be a very difelection to public office endows ficult step because every presthe official with both power and sure group in the nation will fight
wisdom. At this point, he begins bitterly to retain the laws that
to lose his ability to distinguish grant them monopoly privileges
between what is morally right and protection from competition,

But if freedom is to live, all spe--

ood what is politically expedient.

experiment in. freedom—the be with us forever were imposed
our original concept of govupon us as "temporarymeasures,"

ean

end of

ernmen+

thP^WnlP
the Pe°Ple,

not master of

eGrvant

a<,

not master of

'
.

,

Power

"absolutely

made

nVavYLen

too

ndr-J
S,cf

Corrupts

measures

great danger is to be

.

.

«nvprJrmmt

'

rpntrai;7p

a<!

nil?

fw°Lfrp.
manv

ac

w

1](5

cl¬

power

advanced

by

for
capital expenditures in connection

to

porary abje
safeguard their freedom
permanent by critical s(frutiny of the acts of
government to permit their government officials.

view

them

with

corn-

corrupts

„

0„

believe in it!
In this time of grave national

nrm

'absolutely."

between

part

its present capital construc¬

with

tion program and to repay
rary loans incurred
ital expenditures.

tempo¬
for such cap¬

The new debentures Will be di¬
rect

obligations

Ontario

of

debt

Province

the

of

which

had

funded

a

of Dec. 31,

1950, of $686,891,500. The Province has always
paid the full face amount of the
as

principal

of

interest

an

(a)

on

direct obligation issued by
it, and (b) every indirect obliga- !►
every
tion
to

which it has been

on

its

implement

of

area

in

provinces,

approximately

covers

all

largest

Canadian

the

required

guarantee,

promptly when due.
Ontario, the second

412,000

miles, of which about 88%
is land area.
Estimated popula¬
tion of the Province at June 1,

square

1950,

representing

4,512,000,

was

the

of

32.6%

total

population of

Canada.
Other members of the

Ames

&

Securities
Co.

&

offering

First Boston Corp.;

Barney

minion

Inc.,
Young, Weir, Inc.

Co.; The Do¬
Corp.;
A. E.

McLeod,

and

Texas 1BA

Group
Annual Meeting

harden into

controls by

Com¬

the

in

provide

nn<;<dhlp hv

rpflirri:ncf

bv

—

absolute

de¬

sale of the

be

be used by

to

Smith,

fnr

P

But
I
am
sure
that none of
me
^
piacency. we nave oeen toia oy these steps will be taken until we
government officials that the believe that freedom as a way pf
present emergency may last for a jife will work! Thus, the very
generation or even longer. Will fjrst step 0f an js for each of us
these controls and restrictions on to examine his own conscience, to
persons to do his bidding when freedom last that long, We should, find out why he has lost faith in
they do not believe it right to do f believe, base our appraisal of freedom in those vast areas that
so
it seems inevitable that a any measure on the moral pnn- have been delegated to governmoral weakness develops in the ciple
involved, and reject all ment; and how he can regain that
person who exercises that power,
justifications which are based on faith. It is my firm belief that
It may take time for this weakness political
or other expediency. such self-examination will re¬
to become visible. In fact, its full Such justifications are inevitable sud; jn a rebirth of confidence in
extent is- frequently left to the when people
grasp for power, freedom and in individual moral
historians to record, but we even- Moral principle is timeless. An act responsibility
in a nation now
tually learn of it. It was Lord tha* is wrong 10 years from now beset by fear and confusion. For
Acton, the British historian, who is Just as wrong today!
i am sure that when a person
said; "All power tends to cora Vital Struggle
understands freedom, he must

rupt;

to

group are The

sp c

+hPm trfctatp nnd innnl
reiurmn§ them to state and local
governments. For on the local
"temnorar^; level the people wiU be bett(?r

essential"

manv

c*a* Privileges must go! Would it
e a wonderful thing it each

mission

have seen too many t

,

Another

of the

are

to

moneys

,

A1*1

be purely patriotic and altruistic. these two phiTo"sophies "is imDeC"
Indeed, they may wish only "to minent, we apparently feel com- larat on of Independence,
do Sood for the people. But, ap- pelled to adopt their system in
"That all men are by nature
ParenHy» the only way they can order to prove that ours is best, equally free and independent, and
think °f to do this "good" is to We feel compelled to reject free- have certain inherent rights, of
impose more restrictive laws.
dom and embrace the Communist which, when they enter into a
*dea of a planned economy and a state of society, they cannot, by
."
controlled people. Thus we sur- any compact, deprive or divest
Now> obviously, there is no render in the most vital battle, their posterity; namely, the enP°int in passing a law which re- the battle of ideas even before joyment of life and liberty, with
<luires people to do something a shot is firedt what will it profit the means of acquiring and posthey would do anyhow; or which
to
defeat aggressive foreign sessing
property, and pursuing
prevents them from doing what nations who believe in a regi- and
obtaining happiness and
they are not going to do anyhow, fnented people and government safety,
Therefore, the possessor of the ownership of the means of pro^
political power could very well ducti0n if in this nrocess we
"That no free government, or
decide to leave every person free accept the validity of their doc- tbe blessing of liberty, can be preto do as he pleases so long as he trines for
here in the United served to any Pe°P.le but by a
does not infringe upon the same ctatGc? That would indeed he
rirm adherence to justice, modright of every other person to do as Pvrrhic victorv'
eration, temperahce,
frugality,
he pleases. However, that concept
and virtue, and by frequent reappears to be utterly without reaA Return to Freedom
currence to fundamental princinft

us

use

DALLAS, Tex.—The sixteenth
meeting
of
the
Texas

annual

Group of the Investment Banker;
of America will b

Association
in

held

Dallas,

25

and

24

May

Principal speakers will be Briga dier
General
Robert
J.
Smith
President of Pioneer Airlines, an
R.

R.

Gilbert,

of

President

the

Federal Reserve Bank of Dallas

v

Planned for entertainment arc

golf tournament at the Lakewo
Country Club; a Nieman-Marc \;,4t
style show; giant ranch party a
dancing a C

barbecue with square

other

entertainment; and

a

gran

ball.

of

Members

Committee

are

Conventic

the

John L.

Canavs

i
,

Pierce & Co., Genei •
and Chairman of ei
tertainment; Winton A. Jacksc1
First Southwest Company, Chair ¬
Rauscher,

Chairman,

for golf;

man

Clarence E. Samp c

George S. Rooker, Mercantii
National
Bank
of
Dallas,
co
and

Chairmen

for

publicity;

;
-

George

Hemmingson, Central Investment
Company

of

Texas,

program

Chairman; Carrol Bennett, Dalle

•

Rupe & Son, Chairman of tram

•

portation; and Judson S. Jamc
Judson & James & Co., Chairm: t
of the ladies committee.

Two With Scranton
NEW HAVEN,

Conn.—David

have

Huntington P. Wei
become
associated
wi

Chas.

W.

Clark

and

Church

York

New

Clark

Scranton

Street,

was

&

Co.,

members

Stock

2

of t.Y
K '
W. c

Exchange.

formerly

with

Langley & Co.

Marine Trust Company

a

the son to a person who wants to ex-

pay-as-you-go




Proceeds

bentures

of those over whom he special privilege is granted to a
rules is loaned for questionable person or group the freedom of
private endeavors or spent on others is correspondingly remoney

Where then does this search for pies."
ercise political power over his fel- freedom lead us? What should we
These, I believe, are
from finding their natural low man, for he asks himself: "How do? First, I want to say that I am by which we must live

huge

terest.

easiest step of all. We need
merely refrain from passing additional coercive laws! And let us
not ignore the fact that whenever

futile effort to prevent prices and
wages

more

direct tbe actions of others may when the crucial test

one-

that the Defense Program will
little or no decline in our

us

stop this headlong

.

production and services may eventually be absorbed
by the armament program. In the
face of that, some of our more optimistic

us

that

J nLpnilv

Four Minus One Is

Harriman

pro-

Three

mortgage 'the
'

NT

of

I

reason,

tesY befween ou/ lhiloiophy o'f
Please do not misunderstand iiving and that of a totalitarian cri.s*s 1 believf, we.jfn °!?tam
me- These persons who are cor- state. We have said again and guidance from the wisdom of our
rupted
the Process of ruling again that it is our free way of founding fathers. I, therefore,
over their fellow men are not ufe that gives us both soirtual commend for your consideration
innately evil. They begin as honest and
material
superiority
over these statements by George Mason
men. Their motives for wanting to RUSSia
and
communism.
Yet ,?"d
Tho^as x^.fl^son .in, the

u^ifwe

the will-o'-the-wisD of in-

pursue

flation

For that

himself with advisers who also Let there be no more speciai
the Province of Ontario to The
seem to derive a peculiar pleasure privileges
for
employers,
emHydro-Electric
Power
Commis¬
from forcing others to obey-their ployees, farmers, businessmen or
sion of Ontario as an advance of
decrees. He appoints friends and any other group or persons. Let

found in what happens to the ofby taxes now, then, jud^in? by ficials who are called upon to
past experience, the government administer these great governwill
pay
for those goods with mental powers. For when a person
printing-press
money,
or
its gains power over other persons—
equivalent, that will destroy by the political power to force other

goods of war with money gathered

inflation the value of

so.

pose

,

the cost in

ever

capable

Offered to Investors

or

Ripley & Co. Inc. and
that these decisions and the Wood, Gundy & Co. Inc. and asso¬
ciates
are
offering
$50,000,000
problems connected therewith be
Province
of
Ontario
(Canada)
returned to the people them3Y4% debentures maturing May
selves. This, I believe, could be
15, 1971, at 98% and accrued in¬
done in three steps:

doing

Such a program re- choice and action, laws that are
* I am aware that whenever conquires a tremendous amount of designed to abolish the natural trols. and restrictions are proposed,
goods and services. If these must operations of a free and competi- the argument is made that they
be produced now, instead of
10 tive market will offer criminals are temporary, "for the period of
years from now, then the efforts.- and gangsters an unexcelled op- the emergency only." But I am
of individual citizens must be diportunity to flourish. This could also aware that the HFC and simirected now to that purpose. Whateasdy mean the end of our Ameri- lar activities that now appear to

greater one.

Province of Ontario

be-

person,

it necessary for economic survival grandiose public projects at home stricted—that is coercion!
to return again to the under-the- and abroad. If there is opposition,
Second, let us undertake at
counter deals and black market an
emergency is declared or once an orderly demobilization of
operations that existed under pre- created to justify these actions.
many of the existing powers of
vious governmental attempts to
H the benevolent ruler stays in centralized government. This can
abolish the free market and the P°wer long enough, he eventually be done by the progressive repeal
right of persons to trade with concludes that power and wisdom of the various socialistic .aws that
each other on mutually acceptable are the same thing. And as he we already have. Let us remove
terms. Good laws will then suffer possesses
power, he must also the special privileges 'that we
along with bad laws. Because the possess wisdom. He becomes con- have
granted to persons and

government that is responsithe
inflation and high

ble

lieve

enough jobs to go around, he
creates new ones. In some instances, jobs are sold to the highsurvive est
bidder. The hard-earned

system

other

Normally honest persons

Thus it would appear to be our
own

and

i

duction and all the rest,

surround rush toward

to

$50,000,000 Issue of

personal
decisions
concerning
such things as wages, prices, pro-

tionable necessity. If there are not

Breakers

Law

permanent

a

price

wage,
A

of

Iaw breakers in order to

policy

credit

increasingly

determining for 150 million peopie their everyday economic and

In the first place, I believe economic necessity will eventually
induce us to become a nation of

and

practical

overall

the

of

Board

tends

supporters to

power

bv the Congress

Reserve

the Treasurv are in

followed

if we were in-

as

And by dele-

money."

to coin

..

the

shall have

"Congress

sureiy

31

(1967)

can

I 'do good' for the people if I

quite

sure

I

am

not

capable

of to be free!

the truths
if we are

Of Western New

Yorl

BUFFALO, N. Y.—The name ( *
the
Marine
Trust Company c 2

Buffalo, 235 Main Street, has beer,
changed to the Marine Trust Com¬
pany

of Western New

York.

32

The Commercial and Financial Chronicle

(1968)

.

V.Thursday,«May+10^195i;

.

£,
"

Continued

from

7

page

What to

-

Expect From

Business

concerns are planning
large amounts this yearon
plant and equipment.- Indeed,
non-agricultural enterprises plan

to spend

to

The Defense

about

spend,

Economy

planned

expenditures

ported,

plant

costs

the

equipment

absence

but this possibil-

of

public
opinion demanding that wages be
held
I

strong

a

down.

in

to

much

ad-

year

taxes sufficient
Federal budget in

new

the

keep

balance
how

know

not

do

Likewise,

'more

during the coming fiscal
be .counted upon to

cannot

the

1950

additions

of

in

Should

than

crease

of

staff

the

will

the

that

by the

Committee

Joint

on

the Economic
mates

in

■Z

Report which estiincrease of $23.5 billion

an

the

annual

rate

of

and

wages

salaries between the second quar1951 and the second quar-

ter of

ter of 1952.3

During the next nine

months, when the increase in the
consumption of goods for defense
will

the

outrun

growth

of

the

•

gross national

product, the rise in
the annual rate of payrolls will be
around
$16
billion, or roughly
$12 billion to $13 billion after
taxes at present tax rates.
>
/
Will not the period of strong
inflationary
pressures
end
in
about

to

year when

a

there is

expect that the

gross

reason

national

output-will be increasing faster
than
expenditures
on
defense
goods?
I wish that I could an-

the

to

be

1950

is

expenditures
be

dis¬

Undoubtedly

will

pressures

divert

is

the

of

most

inflationary
substantially
possible to

be

diminished when it

increase

in

production to civilian uses. Nevertheless, throughout 1952, the de-

goods will be large in
supplies. The resultof
rwnrl
ing sellers' market will produce a
continued rise in wage rates and
relation

to

n-rt'rt

lino

m ofir

thus

in

personal

increase

in

incomes.

The

incomes

nersonal

o

is

likely to outrun the increase in
the supply of consumer goods for
months after the total phys-

some

ical

ty-

in

increase

production; be-

comes larger than the rise in con.sumption for defense.
:
*
•>

IV

What

steps should be taken to
in prices?
Many

the rise

control

have

proposals
as

such

made,

been

strict control of credit for

defense

purposes,

sufficient
of

the

to

non-

tax
increases
the budget

balance

Federal

government,

re-

ductions in non-essential expend-

itures of the government, ceilings
on

and prices, restrictions
capital expend-

wages

on* non-defense

itures

business,

by

and

the

en-

couragement of personal savings,

few

these

of

merit.

them
Some

proposals are

of

are

'

of

them

fail

to

reach effectively the heart of the

the

scarcity

of

bank

ards

••my"

of
p.

an

77.

Inflationary

Defense

I-




Econ-

curtailing

expenditures

non-

on

given my reasons, however, for
not expecting much effective re- problem by bringing out the kinds

those kinds of goods that are the
least

profitable

consumers

to

produce.

If

of

securities

and

desires

stitutional

ing

that
of

savers

of

fit

the

needs

would-be non-in¬

effective

methods

and by develop¬
house - to - house

selling its

securities.

Business also has been at fault

cannot get what they

control of desire to convert them into goods
will not becomes more and more insistent,
prevent personal incomes from Hence, the effectiveness of price
outrunning the supply of con- ceilings in limiting personal exsumer
goods.
One cannot count penditures must be expected to
on the scarcity of bank credit to
diminish in the course of time,
bring about an offsetting increase Nevertheless, wisely administered
in personal savings—though un- price ceilings may be of some

w2"tuCcngre"! JointP ,£om,mutee
Print, "The Economic and Political Haz-

if

as

it

be

sufficient

about

mal

demand.

there* will be little
lation

of the

Likewise, there

year.

be

delay
ing arrangements for
personal savings, but
One
courages delayconclusion

the

in develop¬
encouraging
the lull en¬
is forced to

no

that

the

lull

in¬

of providing valuable time
improving the attack on infla¬
tion, is likely J to foster delays
stead

that
less

the

make

ultimate

attack

effective.

durable

in

peak

defense

be followed by

penditures

riod of deflation?

ing

a

words,
accumu¬

no

goods.

which will
as
large as

will

also

be

vent

an

1951,

for

;

•

•

be about
last year,

sufficient
in

increase

to

the

pre¬

backlog

of demand.

(3)

after

Demand

World War

the

Second

stimulated by the

was

drop in personal

indebted¬
during the war,

that occurred

ex¬

particularly

pe¬

term

One may post¬

nor¬

demand

two-thirds

ness

the

consumer

will

meet

ether
or

deferred

a

abnor¬

year

(2) The output of housing dur¬

large

V

Will

of

to

In

,

would not be effective before the

first

was

the

drop

indebtedness.

credit

outstanding

short-

in

Consumer

ulate,

dropped

from

as

defense

.

•

r

purposes.
Even strict
bank
credit, however,

doubtedly

It looks, however,

of

year

,

problem,
namely the tendency really wish for their money, the
for personal
incomes to outrun purchasing power of personal inthe supply of consumer goods.
comes is limited.
Price ceilings
Certainly
it
is
desirable
to may have the effect for some
keep the expansion of short-term months of encouraging personal
bank credit as small as possible, savings, as they did during the
and particularly to limit the in- Second World War- As these savcrease
of credit for non-defense ings
accumulate,
however,
the

b

first

last

output

^g p^™al p^urtive

use-

doubtful

July.

the

on

be

a rough time table, that
$8.8 billion at the end of 1941 to
expenditures will remain $4.6 billion at the end of 1943.
defense plant and equipment, par¬
at peak levels or very close to
By the end of 1945, it had in¬
incomes is also likely to be in¬ ticularly during the second half
peak
levels
throughout
1952. creased to $5.6 billion. The
rapid
flationary. Such an increase will of the year.
Early in 1953 a drop may occur. rise in short-term consumer in¬
cause some enterprises to pay off
The principal way of checking
Everyone should realize, however, debtedness between 1945 and the
bank loans more slowly and will the rise in
prices, however, is that
unexpected ; developments end
of
1948
(when
consumer
put pressure on other enterprises
through an increase in the rate of during the next year or so may
credit increased from $5.6 billion
to finance their expenditures on
A higher rate increase the levels of defense ex¬
personal savings.
to $14.5 billion) was made possible
plant and equipment by infla- of
personal saving strikes at the penditure and postpone the date
by the drop in consumer indebted¬
tionary methods,
such as
borvery heart of the problem of in¬ when the big levels are reached.
ness during the
rowing from
banks
or
selling flation because it diverts into the
war.
There will
There is a strong probability that
probably be some drop in con¬
government securities to banks, financing of defense
expenditures the military operations
of the sumer
indebtedness
Incidentally, it should be pointed and
during
the
expenditures
on
industrial United States in foreign coun¬
next
out that under the present erroneyear
and > a
half.
It
is
plant and equipment part of the tries
will
broaden.
Certainly
not
ous
methods of computing de- incomes that otherwise would bid
likely,
however,, to
leave
there
is no
present reason for
consumers with such a small ratio
preciation on original costs rather
up the prices of consumer goods.
being optimistic that they will of
indebtedness to income as ex¬
than replacement costs, the cor- The
great defect in all of the pro¬ contract.
isted at the end of the Second
porate income tax, until shifted
posed programs for curbing the
Let us
assume
that the size World War.
to buyers, is partly a levy on
rise in prices is their failure to
of the armed services will not de¬
capital.
»
.
(4) Since the beginning of the
spell
out
effective
ways
and
crease
in 1953—that the United Korean War there
has
been
a
The
kind
0f
taxes
that
are
means of encouraging
a substan¬
States
must
maintain
a
given rapid rise in short-term business
most
effective
in
reducing the tial rise in personal savings.
A state of
preparedness for an in¬ indebtedness
in contrast to the
gap between personal income and considerable rise in personal sav¬
definite
period.
If the
armed Second World War when this in¬
the
suppiy 0f consumer goods ings can be brought about by the
services remain at about 3.5 mil¬
debtedness increased only slowly.
are
taxes
on
personal incomes. reduction
of
dissaving.
The
lion, the drop in defense expend¬ The short-term business indebted¬
These taxes are politically unat-, amount**of
dissaving
(expend-" itures will be
simply a result of ness is large. When the
tractive and
it is unlikely that itures in excess of one's income)
govern¬
the fact that the enlarged armed
ment's defense expenditure drons,
Congress will raise the yield of has been running at an annual
services have been pretty com¬
the repayment of these debts can
the personal income tax by more rate of around
$15 billion a year,
pletely equipped and that new be a
than $3 billion or $4
powerful deflationary influ¬
billion a and a considerable amount of dis¬
equipment is needed only for re¬ ence.
•.
''
••.
' '• V >
year>
This amoUnt is far Jess saving occurs among people with
placements.
Prewar experience
The
defense
than the
program
is also
gap
between personal good or moderately good incomes.
suggests that the cost per manincomes and the supply of con- If new
building up conditions that will
borrowing is discouraged
year
may
run
around
$11,000.
sumer goods,
help sustain demand several years
among
persons
of moderate or This assumes
present prices, but hence. I believe that these influ¬
Cuts in government
expend- gcjod incomes, there will be a some increase in the
per
manences will be more powerful than
substantial
drop
in
dissaving.
itures are Particularly useful,
year cost over prewar.
The re¬ those
tending to produce defla¬
For some months the volume of
sulting total cost would be nearly tion.
They tend to limit the increase
One should bear in mind
saving will be increased by the
$39 billion a year.
Foreign aid that the ultimate
drop in Federal
rapacity repayment of debts incurred last
may drop to
around $4 billion.
Ty
.
^
£ year or the year before.
expenditures will be much less
This would indicate a decrease in
^0r hialung goods, thus he p g
than the drop that followed the
Steps need
to
be
taken
by total expenditures of little more
to keep UP the siipply of eonSecond World War. The decrease
Soods. The outlook tor both government and business, than $10 billion a year. The ac¬ after the Second World War was
limiting the rise in prices would however,
to
stimulate
saving tual
outlays
for
defense -will
tremendous—from $84.8 billion in
be much brighter if there were among individuals- The govern¬
probably
be
somewhat
higher 1945 to
$31.1 billion in 1949. The
ment up to now has done little than I have indicated because the
si^s °/ a strong ^ desire on the
drop in expenditures for defense
Part of the ^ Administration and to stimulate personal savings. The price level will be higher. The will be
quite small and gradual.
Congress to cooperate in cutting kind of securities that it offers drop in expenditures will extend As I have
already pointed out, it
government expenditures.
The non-institutional buyers are not over a year. It will be quite
will be retarded by the progress
PU°11C demand for such cuts does attractive to them. Ever since gradual. No one can predict how of the
technology of war which
n°t seem to be sufficiently Hjsist- the middle of last year redemp¬ gradual, it will be.
The more
will maintain a high replacement
ont to have much effect in Wash- tions of E bonds have consid¬ rapid is technological progress in rate for all
types
of
military
erably exceeded
sales.
In
the the^ art of warfare, the slower
mgton■
equipment. Here are some of the
Ceilings on wages and prices nine months ending in March the will be the drop in military ex¬
influences that will sustain .'the
excess
of redemptions over new
may have limited usefulness for
penditures because technological
demand
for
goods i, as
defense
at least a few months. I have sales were about $800 million. change will increase the amounts
spending drops:
The government must meet this that must be

do not raise private incomes. An
increase
in
taxes
on
corporate

straint on wage increases. Unless
ful, but some of them are much price ceilings are flexible, they
more
useful than others, and a are bound to produce shortages of
Most of

effective

should

•

for

mand

that

steps

—

fear

"No "

in

the

.

this question by "Yes," but
that the answer must be

swer

I

during

present year will be roughly twothirds as large as last year. Since

mally large, output this

will

forecast

goods

;

and

cars

in

raise

amount

rates

wage

but

durable

of

rise

a

reduce the gap between personal couraged for the purpose of re¬
incomes and the supply of con- tarding the rise in prices?
A
probably be around $10 billion a sumer goods. Some taxes are in- large part of the outlays on plant
year.
With the increase of $11 flationary, especially in a sell- and equipment are not required
billion or more resulting
from ers' market- Hence,, even a bal- by defense. Certainly non-essen¬
the rise in employment and from anced budget may be inflationary, tial
expenditures on plant and
longer working hours, the total For example, sales taxes, which equipment should be discouraged,
expansion of payrolls by the sec- may be deflationary in a buyers' particularly during the last half
ond quarter of 1952 will be $21 market, have mixed inflationary of
1951
and probably during a
billion 'or more as an annual rate and deflationary effects in a sell- good part of next
year.
To con¬
above the second quarter of 1951. ers' market. They produce higher siderable extent controls of scarce
This is a somewhat smaller in- prices—though the price increases materials will have the effect of
vances

payrolls,

other

output

promptly to limit the rise
prices.
Tax legislation ought

over

new

in

encouragement of

The

taken

should

not

lull

present

(1)

conse¬

are

•'

delay

and equipment

plant

the

business is the

following:

above

indicated.

on

of

quences

unfortunate

the

7%

physical vol¬
to
plant and

1951

the

of

peak in defense*expenditures

re¬

Hence

average.

One

en-

personal savings.

on

equipment

about

of about 22% in the
ume

were-

and

risen

had

in effectiveness until business

by drawing

on

plant and equipment during 1951
than
during
1950.
When
the

credit would be helpful in causity is remote. The Wage Stabil- ing (business enterprises to atization Board will be handicapped tempt to encourage personal sav¬
in
limiting
wage
increases
by ing.
restraint,

wage

29%

terprises learn-to finance a much Among the drendsrthafcv will limit
larger part of their Capital needs the * demandTfoiT goods after the

*

.

,

-n

...

Will,

°
be

most
1

keep

the

most modern weapons.
t

The

trary

Second

to

many persons,

rather

boom

One

World

War, con¬
expectations
of

the

should

was

followed by

than
not

a

(1) Wages will rise more rap¬
idly than prices during the next
years.
This, will necessitate

two
an

a

recession.

.

ultimate advance in prices.

(2)

•

j

The increase in the length

of the work week will build into

*

how¬ the economy a certain amount of
program postponed inflation— or at least

conclude,

in

failing to build up a demand ever,, that the defense
corporate
securities
among < will also be followed by a boom.
non-institutional
buyers.
The In a number of important respects
outlays of non-financial corpora¬ the transition from the defense
tions on plant and equipment last
program to a more normal econ¬

the need for

postponed

certain amount of

a

inflation. When work¬

ing hours

are

about

time

the

reduced to normal,
that

the

Govern¬

billion.
In addi¬ omy will be quite different from ment defense expenditures drop,
tion,
non-financial
corporations the transition that followed the wage earners will seek cofnpensatraised around $14 billion in 1950 Second
World
War.
I
believe, ing wage increases just as they
to
finance expansion
of inven¬ however, that the termination of did in 1946. These wage advances
year

were

$17

tories and the extension of credit

the

to

lowed

customers.

stock

issues

Nevertheless,
in

$1.6 billion and

1950
new

about

bond

issues

only about $2.5 billion:
these

new

stitutional

in

issues

were

buyers.

new

were

Some of

sold to in¬

The

net

in¬

personal saving in the
help in retarding the rise in prices
during
the
next
six
or
nine form of corporate securities dur¬
months when the shortages of ing 1950,-however, was less than
gOOuS

to

equipped with the

for

crease

Consumer

spent

armed services

defense program will

be fol¬

by expansion of the

econ¬

will create the need for

price in-

creases.

(3) The increase in the propor¬
rather than contraction.
Let us note briefly some of the tion of population of working age
in the labor force will create a
deflationary and inflationary in¬

omy
„

fluences that will follow the ter¬

demand for goods.

mination of the defense program.

number

This
the

will

enable

us

to

see

why

to

of

sustain

The rise in the

people at work tends
itself.

Expenditures

inflationary
influences are come out of incomes, and the
likely to be stronger than the de¬ more people at work and the
a
billion dollars. The control of flationary ones. Let us look first larger their
incomes, the greater
the rise ta prices will be lacking at
the ;; deflationary
influences. is the volume of spending. If the

s

yolume

173

Number 5010

.

.

The Commercial and Financial Chronicle

.

labor force is increased
by an
abnormal amount for two or three

a

in

years
of
the
defense period, a
good many demands for additional
productive capacity will be built

fields of technology.
the defense pro-,
gram will undoubtedly move for¬
ward by several years the use of
jet planes in commercial aviation.

up.

When

(4) The stockpiling of essential
materials will
probably be incom¬
plete when the enlarged armed
services have been
pretty com¬

of the ways in which the defense

pletely equipped

when

and

total

defense expenditures start to
drop.

Purchases

for

stockpiling,

there¬

Did You GUESS?

example,

takes

one

into accorunt

technology,

to

conclusion

cost

of the

1951

angel appearing

the

spending.
of

This

essential

spring, stockpiles

materials

28.

page

In

will

Some
be

ably true
of

the

the

of

Honor Pierce

American

tax,

tax.

Will be

tax

(or

at

and

possibly

in

the

least

testimonial

A

their

year will

present

held

was

much

as

taxes

will

v e r

Club.

in the broker-

as

vestment firm
of

non¬

&

Robert D. Diehl

(A)

heavy burden
there

be

program

for

the

will

must

allow

for

Webber,

D.

possi¬

bility that the present scope of
the program will
have to be sub¬

stantially: expanded, The United
States may soon become
involved
in

considerably

"

larger

military

operations in Asia.
Even if an
expansion of the
fighting in Asia
be

can

avoided, the defense

will

gram

have to

be

pro¬

broadened.

At

the

firm, acted

toastmaster.

as

Mr. Pierce started his
the

financial

business

later,

not be won

can

take

the

ards

of

by military meth¬
Part of the fight must
form of
raising stand¬

living

throughout

standards of

living throughout the

world

May 9,

was

named

managing partner and five

I!

If'

_

dinner held

a

at

r e s o r

ted

Price

Mr.

Allan

and

Kline

B.

Kline

are

diverting
which

the

of

he

with

and part¬
the New York office were

diamond-studded

presented

by

lapel

Henry

econ-

of the

public

debt,"

way

measures

are

American

our

consistent

system,

the

of life which has made pos-

sible

this

record

country's

unmatched

of

the

house

largest

commission

the New York Stock Ex¬

on

system of individual freedom and
incentives for a clumsy and inefficient government control
pro-

pins gram of a kind which has demonHolt, strated its relative inefficiency

organization of 700

other

some

worthy

of

viously

countries.

note

that

It

these

is
are

countries which pre-

held

awards

leadership

just such

a

trade

in

the

is

im-

plicit in the imposition of price
the fine per¬ and wage controls on our econ¬
organization that omy. In addition we must con¬

emphasize
of

controls
prices

which

were

the

suggested
that
going to "run away,"

rumors

an

piration date of June 30, warning

that

their

make
ever

it;
to

continuation
would
"exceedingly difficult

return

to

a

free

choice

He

added

"this

that

would

not

only threaten our liberty at home,
but also seriously impair our abilW to avoid the catastrophe of a
third World War and to defend

The Present international tens}on may last for years, the astional farm leader declared, and
our Policies must be of a kind

which

we can maintain indefinitely without crippling the economic

of

power

our

nation.

A

realistic appraisal of the situation
calls for measures which, rather
than

"Yet

to them and at the same time the

formance

change with

an

program,
oe raised

productivity.
There
would certainly be no wisdom in our way of life against any eventrading our peculiarly successful tuality."

world.

& Co.

ultimate

and

defense

system."

said.

"These

organization who have been with

Forty-six employees

government

pay-as-we-go taxation, vi_
effective credit controls and sound

these 91 in

the

the

enough to pay the bill, controversy
the need for wage and price

vj
orny,

persons," Holt said, "we do honor

of

magnitude

of

over

declared,

Under his guidance the firm be¬

hjs- ability

name

psy¬

irrespon¬
Washington

doubts that taxes would

ceilings,

wage

some—of the

was

the

on

cost

to.

lieve that it is fitting to rectfgnize
the length of service reached by

leadership, the

firm

years

inflation

'

WINN duction> stritt

the Hotel

special tribute to members

were

Korea have been
an

sible statements from

of

Biltmore, Thomson & McKinnon,
a
leading brokerage firm, paid management

ners of

by

chology resulting from

tion should be

changed to E. A. Pierce

and

to

the

for

their loans and

addition, he pointed out, ris¬

stimulated

other

in

tribute

a

possible

Rlcmnnon

Ouarter-Century
yuailCl wwlliMl J

and

In

June

on

and

senior partner, to all these asso¬
ciates and employees.
"We be¬

as

_

came

A program to raise

.

$4.5 billion be¬
and February

which preceded
must be adopted if inflation is to
actual imposition of controls.
be brought under control.
Mr. Kline called for an end to
■
A rea* inflation-control proClubgram must include increased Pr0- price controls on the present ex¬

a

the firm 25 years or longer.

full partner

a

in the firm. In 1921 he

the

.World-

on

it

ing prices since

to

and

«

inomson

in

career

should

allowed

attention from the policies

resigned a position so honored, climaxing a series of
a lumber office to dinners
throughout the country
become a broker's clerk for A. A.
inaugurating the Quarter-Century
Housman
&
Company, a Wall Club and honoring 91 of over 700
Street firm. His advancement with
employees.
Housman was steady and in 1915
Hamilton
gold
wrist watches

communism
ods alone.

An-

manager of

as

Mr. Pierce became

world

Los

1901 when he

present
it runs
pretty nar¬
rowly in military terms. And yet
the fight to halt the
spread of

throughout the

of

York

Smith, managing partner of

Pierce

&

Association

Tr

70

,

Winthrop H.
A.

Paine,

Se^es»

At

Edward

Diehl,

Jackson

Traders

of

means

Curtis, 626
South Spring Street, Los Angeles
14, Calif.—President of Security

Street,

City.

seri¬

the

e

n

New

ously undermine the
economic
Strength of the United States? <
One

a

a

economy?

danger that it

e

made

1950

supply of money went up about
$8 billion in the last half of 1950."

Act

fighting infla¬

Robert

—

B

Pine

and

May

banks to increase

Produc¬

expire

Merrill

Lynch, Pierce,

VI

Is

in¬

govern¬

deposits, with the result that the

30

is

age and in-

Reductions in

defense

controls,

1950,

to

Mr. Pierce by
h i s
partners

and

provided

be

The

Fenner

Will the

of

1951. This increased bank reserves

tion

sity

dinner

government demand for
goods.
\

System

holdings

for in the De¬

an¬

tendered

yield.

help sustain the

that

its

fense

honoring

U ni

voted later this

two years.

Reserve

ment bonds about

view

as

Wednesday night at the

of

probably not last for

Federal

tween

niversary in the financial business

yielding around $6 billion

than

the

Federa-

price

E. A. Pierce upon his fiftieth

By 1953, existing taxes

Any tax increases

Bureau

1,

the

on

dinner

in¬

corporate

Farm

May

on

creased

wage

excess

part

York

tion, expressed

50 Years in Finance

increases

increase), the

increase

more

tax

This is prob¬
increase in the

income

the

profits
come

the

temporary.

personal

part

of

New

B.

Gove rnment

$3.2 billion out of requirements of
about $9.7 billion.

(5.)

Commodity insistence

that interest rates be
kept low to keep down the cost
Kline, President of the of carrying the government debt,

of

Allan

a
program of the present
probably less than 5% of
the gross national product.

Opposes Price-Wage Controls

talk before the

a

Club

net

is

about

were

.

as inflation curbs, increased production,
taxation, effective credit controls, and sound
.management of government finances.

fore,

may turn out to be an offset
to cuts in other forms of
defense

y,

pay-as-you-go

on

is forced

one

that

.

Allan B. Kline urges,

version

of

size

Here's the

Farm Leader

accelerates the develop¬

program
ment of

the

all

.

^

many

For

33

(1969)

putting

jacket,

merd;

tional

he

will

us

into

a

encourage

strait-

develop-

greater and greater

na-

strength.
Such measures,
said, must b£ firmly rooted in

70 offices and 2,500
the American system which has
employees. In 1940 through a con¬ has been active in serving the sider the fact that these direct
Sound service restrictions simply do not control been proved to work better than
solidation, E. A. Pierce and Co. public since 1885.
has never been more necessary inflation*'!
,^ any other in history.
long run joined with Merrill Lynch, which
by gifts—they can be raised only- was the beginning of the present than at present in view of the
Traditionally
Mr.
Kline
de-* ^' Nothing is more important ta
by higher production and higher firm, Merrill Lynch, Pierce, Fen¬ widespread interest in securities clared, governments have causedlhe future of the world than whal
on the
production must, be based upon ner & Beane.
part of the general public." inflation
by
unbalancing
their we do here in America," Mr. Kline
investment.
There is no reason
Thomson & McKinnon are mem¬ budgets and making up the deficit concluded. "Our demonstration
The name of Pierce was given
el
why investments abroad should
by
to another well-known organiza¬ bers of the New York Stock Ex¬
not be profitable and
"The
inflation we have what human freedom can accomwhy they tion in the late '30s when he was change, the New York Curb Ex¬ bonds.
should not yield a good return to
change and other principal secur¬ experienced since Korea has been Pksk heie will do more than anycalled
not be

burden

a

on

need

the American

economy.
Living standards
not be raised over the

can¬

.

seJiling

....

investors.

of

the

imposes
den

is the military

or may

part

therefore,

impose

that

a net

bur¬

the economy.

on

As
of

It

program,

matter of

a

the

defense

fact, the net cost
may

be

fairly small. It may be conserva¬
tively estimated that the strong
extra

demand

created

by the de¬

fense

program
this
year
has
raised employment
by two million
above
the
level
that
otherwise

would

have

prevailed.

As

a

re¬

sult, the gross national output is
probably about $10 billion more
than

it

been.

otherwise
The

increase

expenditures
level

is

in

in

defense

the pre-Korean
than
$10
billion.

the

following

year

Korea the net cost of the defense
program will

be nil.

In the year to come and the fol¬

lowing year, the results will
be

favorable.

so

Korea, expenditures
foreign military

about

$30

Korean

put

billion

rate.

not

In the year after

and

on

aid

above

The

attributable

defense

will
the

be

pre-

additional out¬
to

the

defense

program may continue to be close
to

$10 billion

make

the

a

net

This would

year.
cost

Pierce

around

almost

ity and commodity exchanges
throughout the country. The firm tion.

Stock

serves

Exchange. Mr. Pierce also
in the

Law and
the

drafting of the SEC

with the organization

Securities

and

of

Exchange

As

partner of

a

Pierce
the

continues

brokerage

business.

In

the

to

be

firm

active

fices in

addition

he

holds

Orchids From Bob Huff
634 South Spring Street, members
of
the
Los
Angeles Stock Ex¬

change, has been bringing beauti¬
ful orchids to the office for weeks

the

too!

corsages,
soms

Walter

flown

in

ier of the Merchants and Farmers
Bank

of

the

Macon,

Miss.;

American

of Kansas

Bank

City; Vice-President of
the

of

President

National

the Seventh National

Bank; Pres¬

Oriental
of

Bank,

The

Reserve Bank of New
Jones had entered

and

National

York.

Mr.

the investment

business in 1911 and when he
tired

was

senior

partner in

re¬

to

orchid lei.

to

partial

this

from

and

additional

the

stimulus

cost

to

will

provided by the defense
The

requirements

services

are

of

program.
the .armed

stimulating research




(Special to The Financial Chronicle)

come

technology

MIAMI
Dennis
nected

216

BEACH,

Crane
with

71st

A.

has

Fla.—LeRoy
become

con¬

M. Kidder & Co.,

Street.

TEAM

Won Lost

25
23

BEACH,
Fla.—Henry
Draper has been added to the

staff

of

Oakes

&

Company,

605

Road.

With

Goodbody & Co:

(Special to The Financial Chronicle)

ST.

PETERSBURG,

Emanuel M.
ated

with

Beach

Davis

is

Goodbody

Drive,

North.

;Fla.—

now

&

affili¬

Co.,

(Capt.), Weseman, Tisch, Strauss, Jacobs
(Capt.), Lax, Valentine, M. Meyer, H. Frankel__
Greenberg (Capt.), Sullivan, Stein, Wechsler, Siegel
Mewing (Capt.), Klein, Cohen, Manny, Chegan
Leone (Capt.), Krassowich, N'ieman, Pollack, Gavin
Serlen (Capt.), Gersten, Gold, Krumholz, Young__
Burian (Capt.), Manson, King, Voccoli, G. Montanyne—
Bean (Capt.), Kaiser, Growney, Gronick, Rappa__^—___
H. Meyer (Capt ), Smith, Farrell, A. Frankel, LaPato
Krisem (Capt.), Bradley, Montanyne, Weissman, Gannon
Goodman

MIAMI
D.

*38

games

i,-»rf

Tn

15*

22

17
16*

22

22
20
18
18

18
15
15

14

17
19
21
21
21
24
24
25

ployed.

Only three

218

14

Work-

meister
Kumm

Lincoln

Joins A. M. Kidder Staff

1, 1951.

Security Traders Association of New York (STANY) Bowling
League Standing as of May 4, 1951 are as follows:

Oakes & Co. Add

$20

important offset

June

SECURITY TRADERS ASSOCIATION OF NEW YORK

(Capt.), Lytle, Reid, Kruge, Swenson
Donadio
(Capt.), DcMaye, O'Connor, Whiting,

billion.
A

The

Cincinnati Stock & Bond Club will hold its annual spring
outing aboard the Delta Queen, largest inland waterway boat on

Hunter

(Special to The Financial Chronicle)

his very own garden. If he is not
ar¬

CINCINNATI STOCK & BOND CLUB

Mc-

Bee, Jones & Co.

from

busy., writing insurance
ticles, he may tell you how

Notes

passed
away April 25 at the age of 86.
He had been organizer and cash¬

raised by Bob in

are

too

an

NSTA

Jones

girls are sporting
These orchid blos¬

not

are

Hawaii, but

make

more

Richard W. Jones

ident

all

pri¬

connecting of¬
than 40 leading cities

ANGELES, Calif.—Robert Vice-President

H. Huff, partner in Morgan & Co.,

and

its

thing else to determine the future
Treasury's of freedom throughout the world."

monetary infla-

system

Richard

of

LOS

through

a

result of the

throughout the United States and

in

investment

and

is a member of eight stock
commodity exchanges.

and

investors

wire

a

Mr.

directorships in five corporations
and

vate

entirely

As

....

Canada.

Commission.

have

over

less

Hence,

would

the

Committee, which engineered the
reorganization of the New York
aided

program

head

to

upon

that

more

n/av

\\*c*

nights
if

so

keep the interest alive by attend-

fair

fnr

all

thp

POntenders.

.!

34

(1970)

Continued

from first

page

Tax Education of Mr. Jones
That is

why I want to talk to needs is a brand new gadget.
today about a law which Con¬ Moreover, I think I know just
gress
has recently
passed, and what that gadget *is and how to
which will exert a profound in¬ make
it.
Maybe
it's
a
better
fluence upon the entire national mousetrap. Maybe it's
something
defense program. It is the con¬ else. Let's just call it a "whatzit."
you

troversial

"rapid

section of the

Revenue

Act;

and of all the domestic issues that
are

under

now

1 know of

In any event,

amortization"

1950

popular discussion,

ufacture

I find that to

man¬

this

product, the first
thing I'll need is a machine that
costs $2,000. Then I'll need the raw

which has been

so

materials, and

thoroughly misrepresented and
completely misunderstood.

so

machine.

Even

none

the

among

members

Congress who enacted this
there

ure

that

it

is

an

grants

meas¬

belief

erroneous

tax

a

of

subsidy

to

business.

Certain Washington ob¬
have implied that there is

servers

undefined

some

and

hidden

scandal about the operation of this

statute,
there

tempt

in

and,

to

seems

to

be

studied

a

this

-use

quarters,

some

at¬

suggestion

of

scandal as a lever with which to
force public acceptance of a
pro¬
gram of government
and

construction

ownership of defense plants.

That such
confusion

in

Washington

misunderstanding and

exists

in

Washington

and elsewhere is not

man

to

run

the

and

around

go

Aunt

Mathilda,

to

good

my

who

old

generously

agrees to pawn

the family jewels
the $2,000. I buy
the machine, set it up in my base¬
ment, hire a man, get the raw

and

to lend

me

materials, and the Whatzit Manu¬
facturing Company, Inc. is open
for

business.

establish

a

Then I go out and
market for my product,

and

sure enough, it sells.
Everything is going fine, and at

the end of the first year I start to

figure out where I stand.
sold

exactly $10,000
worth of whatzits, so there are my
total

receipts—$10,000.

surprising, of
course; for it is almost impossible

Next I come to expenses. The
first thing I spent, of course, was

to discuss this complicated tax is¬

$2,000 for the machine,,

without getting lost in

sue

of technical
as

"amortization,"

and

maze

a

accounting terms such
"depreciation"

"write-offs,"

In
root

be found in the fact that the
word "profit" means one
very dis¬
tinct thing to the average
citizen,
and an entirely different
to

thing to

an

accountant

or

a

tax

collector.

To the citizen, a
profit means
exactly what the dictionary says
it does: the amount
by which re¬
ceipts exceed expenses in a busi¬

transaction. It is money and
it is spendable. The tax
collector,

ness

however,

deals

often in profits
wholly fictitious and
which exist only on
paper. Most
which

are

I put

that
my

down. Then I put down all
other expenses—let's call them

"running expenses"

my
raw

my
opinion, however, the
of most of this confusion is

so

—

labor,

materials,

light and power,
maintenance and repair of the ma¬
chine, and my selling expenses,
advertising, and so forth. And
these

running expenses come to
precisely $8,000. So I find that I
broke

exactly

even.

My tax return is very simple:
receipts, $10,000; expenses, $10,000; no profit; no tax.
I send the tax return to the col¬

lector; drop around and
$2,000 to

repay the

Aunt Mathilda, who
overjoyed; and I come home

is

my

feeling pretty good. I've worked
whole year, and while I haven't
made a dime, I haven't lost a dime

a

businessmen,

either.

come

so

a

taxes

on

profits

moreover, have be¬
accustomed
to
paying
these

that

fictitious

they

forgotten what

a

have
real

paper

virtually

cash profit

is.

Moreover, I've established
good business, and next year—

if all goes well—I should
make

a

profit for the first time.
So I come
whistling down the
street, turn in at the front gate,

see

to

get

offers

tion, depreciation, and write-offs

reward

—the hard way. And

he

recover—out

earnings—all the
into

it.

If

money

couldn't

your

put

you

do

that,
wouldn't go into business in
first place and neither would

you

the

you

anybody else. So
we

of

agree.

it. You're NOT entitled to get your

back all 'in

money

fell swoop'

one

Shakespeare used to

law

says

the

will

have to spread out

you

of that machine

cost

entire

useful

last

life.

five

each year,

ings.

If

years,

its

over

think

it

we

let

its

original

out of

your

you

earn¬

there

realized

that

in

the

being taxed in the
there

was

about

it.

same

nothing
So

he

other

every

country

was

and

way,

he

for

ahead

went

manufacturing

years,

his

gadgets,

do

could

and

and

by

a

we

mean

What you're saying is that
got to wait 20 years to get

rage.
I've

back the money

out,
one

that I had to

pay

cash-on-the-barrel-head,

in

year."

what

the

law

receipts

remained

depreciation
every

ment

the machine, and

on

he

year

paid

the

shop

and

"Sure,"
all. What

"Joe,

says,

need

we

Joe,

says

expansion program that they
many, many

years.

;

.

"What
happens," he asks, "if — after a.
couple of years—the Army doesn't
need any more of these gadgets?
How will I pay off my loan at
the bank?"

"Joe,"

!

the

says

"that's

Major,

tough

a

law

passed during the last

The.

one.

that

-

very

Congress
would

-

protected
you
especially
against that contingency; but the

-

war

have

law

new

doesn't. It's

just have to take, and
of other

risk you'll

a

tnat

one

businessmen

a ;

tak-

are

I do for you,

can

police

way

you

action

in

Korea

and

any

expands his production. And

here

I

rather

that

the

and

-

as

would. He borrows the money '

can

Major?"

figure

•

other good Ameri-

appeal

going

am

violent

the

to

make

assumptions:

government—in

two

first,.

an

ex-'

should have figured it.

present national emergency. We've cessively generous mood—permits
$10,000 and spent $8,- got to build up our defenses very him to write off the entire cost *
000 for what you call your 'run¬
quickly; and the Army needs a of his new machine in the five 1
ning expenses.' That leaves $2,000, whole lot of those whatzits that years; and second, that he buys '
You took in

which you

might call

ating

profit.'

$2,000

you

"Wait

of

I

that
cover

the machine.

on

minute,"

a

do

'oper¬

your

out

write off $100 to

depreciation
"How

Now,

'write

.

."

a

hundred

bucks?"

"You just take
put it in a bank,

says.

the hdtfdred and

and you do the same thing every

"You bet I

machine is all

out and

worn

the bank

useless, but over in
you've got the $2,000 you

paid for it; so everybody's happy."
Well, of course, I'm not happy
about it at all, and I ask him

just

I

see

I

says

don't

assumption, I can only
that perhaps he got it at'
wholesale, through a friend.
suggest

Joe. "Just
machine.

In
new

the

and

.

.

afraid

that's

to

up

our

businessman

enterprising ;

now

has

two,

bought and paid for both of them.

,

His certificate entitles

well, what do I do?"

.

"I'm

event,

any

machines in his basement. He has

to

buy another one, and
Aunt Mathilda died last year,

my

latter

the

your

yet have enough

get

old

same

price of $2,000. In justification of

hire

do it, Joe?"

will,"

how

me

money

for 20 years. At the end of

that 20 years, your

you

the machine itself at the

want you to

machine,
and double

man,

output. Will
tell

we

another

another

You

"Easy," he

year,

in

put

interrupt.

I

off'

.

you're making. So

«.

cover

you,

the

cost of the

him to
new

re-

one

in I

the Major replies. "You're
going to have to buy the machine

five years; but he still must spread
out the cost of the old one over

yourself and pay for it, just
you
did before. There's not

at

Joe,"

thing

I

can

Congress has

do

about

just

that;

passed

a

the

as
a

full
the

20-year
end

of

period.

another

And
year,

so,

and says:

warning that

had

any resem¬

"Look, Bud, it might sound that
way to an ordinary guy, but life
son, living
or
dead, is entirely
coincidental. But having cast this just isn't that simple—not when
you're dealing with the govern¬
anchor securely to
windward, I
ment, at least. You're a business¬
should
like, for the
next

minutes,
shoes, to

to

put

myself

in

few
his

through his eyes, and
to describe in his
words the prob¬
lems he meets as he
launches his
business

see

career.

So—as Joe—I look around
and
decide that
what
this




country

man

now, and you've got to start

thinking

like

accountant,
maybe
the

even

Board.

sents

a

certified public
tax collector, or
like a Chairman of
a

or a

That

machine

repre¬

capital expenditure and
you've got to amortize it or de¬
preciate it."

$1,900 left. That is

able

income.

half

of

that

leaves

Now

a

your

you

that, which is

owe

$950;

clear profit of

tax¬
me

preparing his tax return. 1
machine, he discovers, has
yielded an "operating profit" of ;
exactly $2,000. On the new machine, therefore, he takes the $400 1
depreciation which his certificate ;
Each

and

$950

for you. That's nice goin'."

"It's

nice

way

ought

you

to

say

I

have

good whatever. That is

a

for

Joe

enough

you

all

money

around here somewhere to pay my
tax
with. But
I
haven't got a

nickel. So what do I do about it?"

In the very same

risk

enacted

that Joe must take. Moreover, the
new law does not even
guarantee
a

market for his

necessity, the
Major also emphasizes, has nothing
whatever to do with the RFC.
does, not

entitle

Joe

to

obtain

It
a

are

law,

Congress that
some

of

the

declaring that
Joe is raiding the Federal Treasury and robbing his fellow tax-

as

The certificate of

the

members

product; but

long as the emergency con¬
"but there's just tinues, of course, he can be reason¬
that puzzles me. ably confident of selling his ex¬
panded output, so he should come
a $950 profit, the
did, I certainly out all right.

goin'

right," I agree,
one
little thing
If I really made

titled, the certificate will do him
no

.

find him

but
new

one

,

blance between Joe and
any per¬

»

we ;

question: "What happens if law that ought to help you swing
and there—sitting on the
It is this confusion of
doorstep 1 don't earn enough in future the deal."
terms
which is responsible for much of —is a gentleman from the Internal
years to cover that $100 deprecia¬
"What law is that?" asks Joe,
Revenue Bureau, who wants to
the present
tion? Suppose there isn't any 'op¬ pulling up a
controversy. To a high
packing case for the
ask
me
just one simple
little
degree, it is a matter of semantics.
erating profit,' as you call it?"
allows
Major to sit on.
him; and this leaves a
question: "Whaddaya mean,
For instance, it is said that the
no
law
"Brother," he "says, "take my
So the Major describes the new taxable income of $1,600—$800 tax
permits a manufacturer to write profit?"
advice and don't let that happen.
for
the
government
and
amortization
$800
provisions
of
the
Well, I take him in and show If
off his investment over a
it does then hire yourself a
certain
Revenue Act and tells Joe, frank¬ profit for himself. On the old manumber of years; when as a mat¬ him my books and they don't feaze
smart tax lawyer, because right
him at all. He just looks
ly and clearly, just what they will chine, however, he can take only
ter of actual fact the law
over at
there the law gets awfully com¬
sternly
the regular $100
and will NOT do for him. He ex¬
the corner and
depreciation; so
says, "How about
compels him to wait that number
plicated. But in any event, it's
he pays his usual tax of
$950 and
that machine? It's all
plains that Joe is entitled to apply
of years before he can
yours now,
recover
your worry, not mine." And with to
has a $950 profit left.
Washington for a certificate,
fully—out of his own business in¬ isn't it? You own it now, don't that he
gets out his pencil and
Ana now, for the first
time, he
showing that the new machine is
you?"
come—the money which
starts figuring my income tax.
he, him¬
can see
exactly what the new law
I say, "Of course I own
necessary to the defense program.
it. I
self, has spent for the plants and
Now, for the purposes of this When and if he
has meant to him in actual terms
bought it, and I paid for it. That
gets that certifi¬
facilities in question.
little illustration,
of dollars and cents. His certificate
let us assume cate of
was my
necessity—and after his
very first item of business
that the tax rate applicable to this
is "saving", him
Joe Jones Views the Law
new machine is installed—Joe will
$150 a year in
expense."
particular business is 50%. Ac¬ then be
allowed to "write off" a taxes on the new machine, but it
It seems to me that if we could
Well, he looks at me kind of tually, of course, on a small cor¬
is also "costing" him $150 a
year
large part of the cost of the ma¬
only view this law through the sadly and says, "Listen,
pal, this poration of this kind it would be
in
profits.
So
he
chine
in
five
figures he's
years
instead of
eyes—for example—of Citizen Joe may come as a great shock to
lower than that, and on a big cor¬
you,
being compelled to wait 20 years breaking even on the deal, and
Jones, and see for ourselves how it but that machine isn't an expense
poration it would be higher than to recover his
investment. That is sends a check for $1,750 to the tax
would affect him in his
business, —it's a profit. You can't spend it, that. But just to keep it simple,
what the law does, and that is all collector.
much
of
the
or eat
it, or wear it; but just the let's call it 50%.
misunderstanding
And this time, the collector has
the law does, the Major points out.which prevails so
generally today same, it's profit!"
no
So the Internal Revenue man
complaints about it, but apwould simply evaporate.
Let us
Well, of course, I can't see that gets through with his figuring and
Does Not Guarantee Profit
parentiy he is practically the only
say that our Mr. Jones came home
at all, and I tell him so. I
man
in Washington who hasn't.
paid says, "Congratulations, my friend.
He makes it clear that it does
from the last war, found a small
$2,000 for that machine, and until You made a very handsome little not
Joe wakes up, next
guarantee anybody any profit
morning, to
job which provided his support, but I
get that money back, I haven't profit this
find
that
instead
of
year. After paying all of any kind; and that unless the
nurtured a strong desire to start
being
a
made any profit at all. That's
all your running expenses, and after income from the new machine is patriotic American
a business of his own in
citizen, he has
the hope, there is to
it, and that's the way writing off that $100 to cover de¬ sufficient to cover the increased
some
suddenly become Public Enemy
day, of becoming his own it
really is! But he shakes his head preciation on your machine, you
boss. Perhaps I should
depreciation to which Joe is en¬ Number One.
add here
the usual

;

Well, ybung Joe responds to that

help."

let's

the

-

Joe has just one question.

in

we're

your

"anything at

explains. "You know all about the

income tax

of"

does

ing in this emergency. But, Joe—
Then, one day, an Army officer I'm asking you to take it. We need
from Washington walks into the those, whatzits
badly:".
-

it's going to be—or else! Now
your

law

$950 in taxes.

"Well, it's like this," the Major

way

defense

the

otherwise could not attempt, per-.

lot

govern¬

and that's the

says

vast

amortization

trouble and

"Put it that way if you want to,"
he
agrees
amiably, "but that's

inducement.

do,

slowly,

his

per

"You may call it amortization,"
tell him, "but I call it an out¬

business because—
patriotic Amer-t

no

What

country.

lustration,

for 20 years, so we exactly the same, each year, and
'depreciate' it at the so did his running expenses and
year. That's what his tax rate.
Every year he put
aside a hundred dollars to cover
by amortization."

of 5%

—

ican needs any special
when it comes to the

strange coincidence, which occurs
only for the purposes of this il¬

let you

rate

explains

haps, for

he

corporation

is good

will

It
or.

But

selling

and

to any

law.

new

incentive

industries to undertake, at once, a,

five

year,

Major concludes
the

Naturally, Joe felt that he had
if you look at it
through his eyes, he had been.
been gypped; and

of

it

of

financial

no

until the end of 20 years.

10

back each

Now

on.

nub

the

he points out, is to make it I
financially possible for many vital.

one-tenth

happens that the
particular machine you have over
so

And there—the

•

his

it will last

get

can

money

your

we

of

think

we

you

If

years,

one-fifth

recover

cost

The

say.

repay'

can

than It is to get one
can't repay for 20 years.",

that, also, is
how he began to pay a corporation
income tax on a paper profit that
he had never really received in

to that point
But here's the catch in cash and would not receive in full
up

loan that you

a

that you

how he found out about amortiza¬

to

help-

may

in five years

Aunt Mathilda!"

your

there

And

else; and yet it

because—he says—"it's a lot easier'

entitled

I

I

and

loan from the government or from
anyone

—is

That's

easy.

find

I

"Buddy," he says, in a kind of
friendly tone, "if you don't want
to
spend the next 10 years in
Alcatraz, you'd better run over

you have the first
"It's like this," he says. '"You chapter in the story of the Tax
paid for that machine, and you're •Education of Joe Jones. That's

—as

So, for the purposes of this il¬
lustration, I incorporate myself,

fairly

Misunderstanding

a

Well, I tell him that I'm cer¬
tainly not going to do anything
like that to a perfectly good ma¬
chine; and he can see I'm getting
pretty sore about it, so he ex¬
plains it to me very patiently.

payers.

They

now

say

that, at the end

,

V
;

*'
!

*

?..■
l

v

I
,

J

*

r
,

/
-

:
*
"
,

•

•;

;
-

'J

five
years, he will
own
his ;
machine, free and clear, and that ;
the government will have paid for ;
it through tax concessions. Many
of

,

of the most

distinguished Senators

-

and Representatives agree without

-

question that the Treasury is subsiaizing Joe; and a member of the

-

.Volume 173

Number 5010

.

.

The Commercial and Financial Chronicle

.

35

(1971)
President's Cabinet declares that
it might be
cheaper for the gov"

ernment

chine

-

to

in

have

the

bought the

first

place, and to
have gone directly into the busi¬

\

of

ness

making

whatzits,

its

on

own.

>

Patriotism and Profit
A

certain

labor

leader, who is
impugn the patriot-

slow to

never

/

ism of his fellow Americans, de¬
clares, in a speech, that Joe is so
.disloyal that he refused to lift
a
finger to fight Communism until

the

„

government

him

,

profit.

a

! Congress is

had

And

guaranteed
member

a

impressed

so

of

by the

speech

that he has it printed in
Congressional Record at the
taxpayers' expense.

.

tion still further should

Next,

Newspapers report that two
Congressional Investiga-

separate

.

tions

of

the

affair
are
being
columnist predicts
that these investigations will un-

-

started, and

;
-

'■*

earth

;

a

look

scandal

a

which

will

make

that mink coat in the White House
like a dyed muskrat in tne

bargain basement.

.

1

Joe

.

and

i

can

From his

ears.

eyes

actual op¬

own

every one of those
-

true

r

charges is
except, perhaps, that
getting
the
subsidy.

—

about

isn't

<

J

quite

digs out
starts

about

sure

that;

pencil and

a

to

tical
or

or

It

&naly-

trigonometry,

or

even

algebra. All it requires,
finds, is plain, old-fashioned,

Joe
*

school

grammar

arithmetic.

he discovers,
major possibilities: that the
are,

will

gency

last

less

three
emer¬

than

five

years; exactly five years; or more
than five years. If it lasts less

than five years, of
course, he will
be left saddled with a debt on his

machine,

as

the

Major

had

the Federal

should

at

critics

: gency

for the
■

emer-

lasts exactly five years, and

if then there is

further market

no

v

output of his

new

machine,

his situation will be this:

1-

velvet

to

for

be

Washington

about.

Yet

the trouble to make them—would
have put their minds

highly

at rest.

effects of

Since he will
of

first

five

his

further

the entire

recover

machine

new

he

years,

the

take

can

depreciation

in

no

So

in

the

on

of

$1,000

per

year

his

on

a

now

pay a tax
it. That is $50
than he is paying

year on

more

old

machine; and he will

have to pay this extra

from

year

this

on

now

Thus, 15

$50

every

on.

hence, when his

years

machine is

new

worn
out, he will
paid the government a tax

have

"bonus" of $750, which will exact¬

ly wipe

out

the

tax

"saving"

of
$750 which he enjoyed in the first
five years.
Over the entire 20

he finds, he will have paid
total tax of $19,000 on the out¬

years,

settled

his

loan

the

at

'

bank, in full. Over the whole fiveyear period, he
will have paid
I $750 less in taxes than he will pay
during the same interval on the
*

1

old machine; but he likewise will
have received $750 less in profits.

,

Clearly, therefore, the

*

ment
-

has made

tribution

:
*

*

*

have
cost

to

Joe's

con-

busi-

by no possible stretch
imagination could the so¬

the

-called
'■

financial

and

> ness,

of

no

whatever

govern-

tax

"concession"

paid

for

of

machine

a

$2,000. So Joe

can

$750
which

only

con-

elude that the official who
argued
that it would be cheaper for the

government
machine

to

in

have

bought
first place

the

the
was

either very weak on arithmetic

or

'

very

:

strong

ship.

;

..

i

on government owner-

Moreover, the machine itself is
worthless, so far as Joe is

now

concerned.

Mechanically,

it

will

; be good for another 15 years, but
productively, its useful life is
Under

over.

tion, of
have
■

cost

course,

of

him

tax

useful

"concession" whatever.
without that certificate, he

no

probably
his

new

could

not

have

bought

machine at all. So here is

what has
-

its

life; so the
certificate of necessity has
given
Yet

:

Joe would always

been entitled to recover the
of
that
machine
over
the

period
*

theory of taxa¬

any

happened:

put of

the

new

machine—$800

a

for the first five years, and
a
year
for the next 15.

year

$1,000

On his old

machine,

tax

$950

a

of

penny!

for

20

exactly

4

which

$19,000
It

years.

to

•

a
—

all

the

u

discovers

apparently

same

paid

even,

.

Joe

so,

have

precisely

year

out

comes

the

over

period, he will also
total

tificate,
the

the

defense

'needed

so

Army

has

materials

badly;

has been given a

cer¬

received
which

it

one more worker

job; the govern¬
$4,000 in taxes,

ment has collected

which it would not otherwise have

obtained; and Joe has received
$4,000 in profits as the fruit of his
enterprise. Moreover, he is now in
a
position to expand his produc¬




and
has not State
municipal
projects
inflationary deemed nonessential to the defense program or to the
rising wages, mounting
preserhigher prices.
It has vation of public health and safety:

simplified.
account of

and

.

In

have occurred. It will be noted too
that Joe's profit represented a tre¬
on

has

fact

a

not

yet

his cap¬

members

of

Congress.

And that fact is this:

whether the cost of the

chine

is

written

off

in

one

and

participating in
Voluntary Credit Restraint
Program should carefully screen
loans

large
be,

one

thing I

am con¬

vinced:
this

evil

law

is,

in

that

measure

reality,

its

critics

are

wrong,

prove

certainly,

the

as

them

to

businessman

how

widely

it

government

the

will

amount

same

become

an

object

of

penny—that

it

would

the

loss for him

nor

tax

rate

business

as

r e m a

i

n.s

to

as

his

unchanged.

he

will have lost money. He will
have paid the government a larger
tax than he would have paid had
he not used the rapid amortization
of

the

new

law

in

the

actual

In

tax

that

but not

Joe's

a

a

his

gamble—

very good

point

of

gamble from
view. He figures

that any man who sees how taxes
have

risen

in

the

and who will then

ble

tax

many

will

be

forward

started

a

20 years

past

20

willingly

decline

always the danger that
thus be concealed,

should

revenues,

be

for

consolation

as

to

"The Committee recognizes that
established
procedure
for

the

ori2ination and bidding

on

public

®"Sin8Uon and bidding on puhuc
,

£rom other tyPes of

di££er

.or this
.

j

n

ot^ypeah£

reason

Defense Mobilize

Wilson has requested

£i^anclfig

to
_c

A,

of

nnn

t

nnn

$1,000,000

or

to

thaco

these

committees for a ruling

conformance

to

,—

more

with the Pro-

sa!f or advertising for public sale,
"Financing institutions

are

quested to cooperate in this
ter by not participating in

re¬

the

the

on

shortly,

basis

of

more

4<T,

*

.

..

Irving Sumergrade

•

**-*S sometim?s differentiate
SS
V R
to

individual
essential

cases

from

nonessential

to

The

Financial

Chronicle)

ance
be

with the statement of printhe Program, and may

:y"

.

the

referred to

mittees
„

*

regional com-

the financing

if

institu-

rwirp

R*

ex-

penditures and to sort out those
which should be underCLEVELAND, Ohio —Irving taken
immediately
from
those
Sumergrade has become associated which it would be desirable to
(Special

All such transactions, regardless
of size, should be screened by the
financing institutions in accordciples of

borrowine

.

*

...

41

The regional corrirriittees available to consider these transac
are the investment banki g r -

gional committees as follows. ,
Co., National City postpone. Therefore, certain tests
"Eastern Committee: Percy M.
Mr. Sumer¬ are suggested to
financing institu- Stewart (Chairman), Kuhn, Loeb
grade, who has been in the invest¬ tions cooperating in the
Voluntary & Co., 52 William Street, New
ment business for many years, has
Credit Restraint Program to be York, New York.—Territory: The
recently
been with
Francis
I. used in arriving at financing deci- Atlantic Seaboard to and includwith Bache

&

East Sixth Building.

du Pont & Co.

sions in

pal

Joins King Merritt

discussions with munici-

authorities.

"Soldiers'

.

bonus

"
are

in-

fiationary under today's condiThey add to the spending
ST. CLOUD, Minn.—Sidney L.
power of the public through the
Huey has become associated with creation of credit. It would seem
(8pecial to The Financial Chronicle)

tions.

&

Co.,

Inc.,

1616 desirable to postpone such issues
until

a

time

purchasing

when

power

is

ing Ohio, West Virginia, Tennessee

issues

immediate

needed

to

unemployment
and
when it might be more beneficial

BRIDGEPORT, Conn.—Albert R. to
Pastircik

is

Bros. & Co.,

now

with

Hincks

Inc., 872 Main Street.

years

gam¬

Eddy Brottars Add

the

veteran.

"Among the types of state and
local government capital outlays
for

which, in the judgment of the
Committee, the financing should
be

postponed

and Alabama.

"Mid

-

Western

McCormick

Dean

McCormick & Co.,

Committee: D.
(Chairman),
231 S. LaSalle

St., Chicago 4, Illinois.—Territory:
Michigan, Indiana, Kentucky, Mississippi,
Missouri,
Kansas, Nebraska, the Dakotas, Minnesota,
Iowa

and

Colorado,

in

the

next

HARTFORD, Conn.

—

Rocco

J.

"Southwestern Committee: John

FV. Rauscher (Chairman), Railscher, Pierce & Co., Mercantile
Bldg., Dallas 1, Texas.—

Bank

Territory: Texas, Louisiana, Arkansas, Oklahoma and New Mex*
ico

are:

"(1) Replacemnet of any existis undoubtedly engaging
ing facilities that can continue
LaMonica has been added to the
in the most magnificent flight of
to perform their function during
staff of Eddy Brothers & Co., 33
the
emergency
period.
optimism that this country has
seen
since the Republican cam¬ Lewis
Street, members of the
"(2) Construction of facilities
Boston Stock Exchange.
paign of 1948.
of the types not recommended by
on

is

or not pending financing
is consistent with the principles
of the Voluntary Credit Restraint

some

to finance projects that
just being put under way or

carried

Joins Hincks Bros.

therefore,

represents

dis-

be

counteract

saving.

respect,

In

authorized

original

first place. Conversely, of
Merritt
course,, King
if his tax rate declines over the
St. Germain.
next 20 years, he will have
gained
an

should

public or private sale or purchase
Some projects which had
voter 9f suc^ s9cur^ies unless the lssue
approval before Korea are turning involved has been cleared by the
out to be under-financed at preproposed issuer, or as the result
sent prices and may require ad- of an application for a ruling by
ditional
financing
if they
are
the financing institution itselt.

however, Joe finds that

nrovision

financing.
were

programs

Should his tax rate go up over the
20 years,

final
funds

which

col¬

long

operation

governments,

gram before negatiation of private

between first

time ago

precise

applicable

local

whether

as

collected

concerned. It will produce neither

<

of

''Regional committees have been

the principal Purposes
majority of cases lOCai

intervene

are

any

anticipation

borrowing

\ZZJXnU?regional
and

in

and

established

j

essential features and avoid

So once again, the certificate of
necessity has proved meaningless
so far as Joe's fiscal operations are

gain

j-

may

depreciation.

or

r

vary

have

state

are

the

.cases

avoid

taxes or
other revenues
should
be held to the minimum amounts

Borrowing

plans.
Examination
of
these plans might eliminate non-

lected under any other system of
amortization

4.

Irving Sumergrade Is
With Bache in Cleve.

to

Advance Clearance of Large Issues

1°'

•

the like
In

thus

"Borrowing

Roads,
schools, water systems,
drainage and sewage projects and

the victim of suspicion!

and

borrowing.

Program.

«t»

and

scorn

end, the

the

—

eur-

Projects for expanding or modavails himself of this law in the
ernizing municipally owned facilservice of his
country has a right ities constitute the major demand
to expect j;hat he will
not thus f9?— Public
capital
borrowing.

year,

may

have

largely out of

Long-Term

who

local

budgets
deficit

Judged *>y the standards specified
above for
capital loans-

directly related to de¬
fense, public works should be de¬

then

Indebtedness

urged to encourage
governments
to
balance^
are

current

the facts

be,

"Lenders

"Temporary borrowing for cap¬
purposes, unless anticipating

it to be, then it should be
repealed without question; but if ferred.

clearly

capital.

deficits"may

ex-

purposes

lieve

equity

there

by new borrowing.
If not urgently needed for preservation of

be¬

its

,

.

ital

critically

the

critics

be

.

couraged if it exceeds reasonable
expectations of revenues,
since

rent revenue rather than financed

should

,

Short-Term

0f

govern-

should be met

well.

ma¬

how small the profit

or

or

local

defense program

as

Place

Such

weiredas ^Ddvate ^exoeSres

difference, either, how

from year to year. In the

and

opinion, have performed a major
not
only to American
industry, but to the entire national
service,

applicable to the income from
that machine remains the same. It
no

State

tation

rate

makes

to

,

and periods required for

institutions

mg

the

American people, we
shall, in my

always be exact¬
long as the tax

as

Financ-

or

needed

'w

,

law, and if there is any ments as well as loans to other
whereby the committees of borrowers.
Expansion programs
this chamber can
bring an under¬ that
under
normal
conditions
standing of those facts to the would be financed without hesi¬

—whatever its useful life may be
same

,

sites

immediately

^
privately°™eud
by municipalities,
w,hlch ln™lves borrowing to re-

debt

private, must reduce expend-

ltures wherever possible.

versial

years, five
years,
or
any
other number of years. At the end

the

,

local

way

of the useful life of that machine

ly

and

"To curb inflation in 1951
every
segment of the economy, public

basic lessons of this illustra¬
tion in any particular.
Here we have seen the true and
exact facts regarding this contro¬

three

—the result will

State

of

not

^

lion of public securities have been
sold to raise new money.

the

For of this

rights-of-way

outstanding has reached an alltime high approaching
$22 bil¬
lion. Since Korea nearly $2 bil-

penetrated the minds of many of
distinguished and well-

informed

1951

memorials.

war

«(3) Acquisition

It

the

the most

certificate

As the direct result of that

has

I

ignored the recent tax boosts that

If

cilities and

containing recommendations for
been postponement of various types of

one

sixth

formerly did

ence

have

Federal Reserve
Board, issued on
May 7 the following statement

it, there¬ ital
investment—more than three
year, he
times as high, in fact, as the aver¬
finds that his
"operating profit" of
$2,000 has become, automatically, age which prevailed throughout
industry last year. Yet, were all
his taxable
income; and instead of
of these factors to be taken
fully
paying the government a tax of
into account, they would not alter
$800, as he
after.

He will have recovered—out of No Loss of
Government Revenue
own
earnings—the $2,000 that
It makes not the slightest differ¬
he paid for the
machine, and he
will

presented

mendously high return

his
y

The

maximum

a

illustrations, the

just

taken

costs

show:

$1 million.

Treasury; and that it
industry—

minimum of time.

a

Like all
have

cost

lists types of state and
local government capital
outlays for which financing should
be postponed. Calls for advance clearance of all
issues over

ex¬

Voluntary Credit Restraint the Defense Production Adminprivate expense—to enlarge its Committee,
established
by
the istration—such as recreational fa-

degree in

simple

completely
Here is what Joe's figures

public

defense production to

his

most

are

few

a

him,

what

at

has enabled American

calculations—had the critics taken

And

Here he finds that if the

*

clear
seems

in

worried

the second possibility.

:

be

ex¬

plained, and no amount of figur¬
ing will help, so he passes on to

business

Municipal Borrowing

on

Voluntary Credit Restraint Committee

pense; that it will expand, rather
than diminish, the tax revenues of

years

a

There

'

and

figure it for himself.

geometry,

*

he

so

enriches

machine for the whole 20
years of
its
life.
Those
extra
15
that

Wants Curb

that the emergency

—

end in five years, and
that he is able to
go right on sell¬
ing the entire output of his new

and

our nowJones
has

Mr.

third demonstrated conclusively that the
new
law "neither subsidizes nor

the

does NOT

He

paper

doesn't require calculus,

r
4

unone

gentlemen,

so,

highly-educated

to

comes

machine, he must

hardly believe his

erating experience, he knows that

'

Joe

possibility

the

.

And

some new

emergency require it.

ma-

"Western
Walker
&

Committee:

Frank

F.

(Chairman), Dean Witter

Montgomery St., San
Calif.—Territory: The
West Coast States along with Arizona,
Utah, Wyoming, Montana,
Idaho and Nevada."
Co., 45
Francisco,

36

The Commercial and Financial Chronicle

(1972)

Continued

Europe will not be as great as is
anticipated by the Marshall Plan.

from page 14

will be reluctant to support such a

The American
later date to defend

these resources.

policy of the Administration
Europe" as well as in the Far East,

Economy

and

Asia, will probably fail before it
has been tested. Truman will
probably not shrink from giving
swayed by personal orders to strike against Chinese
Communist
bases
in
Northern
even prejudices.
MAi-thom

moment from my role as an

a

all of

are

us

feelings

admit to you that

and

economist

and

States, partly because we

people

who

much

live

are in a
and secure

here

fortunate

more

including Manchuria, if
air attacks
against

the China,

dislike

foreigners

Many
United

position than most of the people

scale

large

Nations

United

forces

Korea

in

made.

are

Such

extension of the

an

Korea still

who live in other countries

war

in

might not lead to direct

between the United States
Russia. MacArthur's view may
against some of the tactics pur- be justified in these respects. A
sued by foreign nationals such as war
between the United States
the British.
'
an<J Communist China, in fact, will
The British are
very
shrewd probably not be openly declared,
bargainers
They are trying des- But there is a good chance that
Many of us, at the same time, war
a
feeling
of
resentment and

have

perately to protect their interests
in

the

Common-

are

getting

countries

theVLll

materials

BHiSfh
British,

the

all

raw

in the

I feel

tteFrlnrlor
the
trench, or

nr

or

a

United

the

to

teterest

Anv

Steles

for

nrirp

hiph

wrv

The

East

Far

wealth

the

tnc

selfish interest.
They happen to be on the spot.
They possibly may help in pre/tnnonihr
r\f
venting the steel_capacitj of the

Germans, is

a

Near'East

lllYng

from

tends of the Russians,

®

,

-

.

-

western

it

it.

tnat

....

.

,

,

.

,

•quite obviously have been wasted,
It is
conceivable, on the ot er

have

that

if

and

be the

turns

then I think

case

received

out. to
will

we

a

'

The French

sphere in

will also be

danger.

Africa

New

up-

risings of native forces, which will
be actively supported by Commuunderground xiikj vcjjaciiWJu
unutigiuuiiu movements, will

nist
haol

undermine
Morocco.

French

control

belief

through corresponding suggestj0ns for continuous international negotiations.

?tage

During this

mili?aryg
will

areas

Western

be

defense system in
Middle East will,

in

areas

receive

even

greater support than they have re-

T,

T

m

ah

t

ri

l-

digestion

of

a

smaller.

liquida-

and

tion.

up

Let

me

invasion

of

Korea

supplemented

by

a

the

after
was

and defense programs will enter
will, on the other hand, be modi-

What

in

as

well.

ary

inventories

Business

ac-

not excessive in relation

are

reach

1952

they

to

peak before

a

time in

some

1953.

or

.

v

So the minimum expectation we

current volume of business,

certainly higher face is a period of high level busiyear ago. They ness activity and a revival of up"excessive" in ward price pressures, which will
chiefly because:
create a new crisis for OPS and

are

were a

regarded
some
quarters

are

as

Nearly everyone expected many new problems for businessparticularly of consu- m(;ngoods, to develop
Looking beyond that, there; are
in the first quarter; and
simply too many factors to guess
(b) Retailers are therefore sur- about. We dont have to look beprised by the rapid rate at which y°nd at the moment, but maybe,
a year from now, a major war will
shipments have come in.
have broken out. If it has not,
The feeling of uncertainty and
^en j hope I can come back here
caution is further strengthened by
agajn> at
time, to. sum up the
the fact that February, March and
0Uti00k as it will appear then.
April sales showed a decline from
, . .
an extremely high January total.
...
n
■.
■
«"'
,
*
(a)

mu

..

,

At the

is

,

t

,

,,

,

,

.

_

.

.

,

moment, therefore, there

JOIIIS

Il3fllII

ftfBVI.

doubt that the rate at which

no

supplies are being produced
has been moderately higher than
the

.

durable

rate

which

at

supplies

new

have been taken by consumers

off

the marketplace.
Correctives at Work
Some natural correctives

particular

scarce;

more

has noticed re-

everyone

although they

than

hind the I™11 Curtain,
applies

will become

power

of costs will go on up; and inflation-

fears will be revived. These
developments will be supported
cently is that supplies are large.
by further increases in spending
However,
even
this
present for new plant and equipment; and
"excess" of supply is somewhat none of these developments will
buying

consumer

fied by critical developments beThis

and

wave

new

But lt Is Not A11 Black

ceived up to now.

is one of the
the moment.
I

course,

,

vital
Th^ critical stage in, which
But* kriti-" American international policies

key

will

East

R

in

avoided.

forces

witnessed

have

we

period

mers'

a revision or reexamination of
military treaties with the United
States.

riirert Russian

intervention

months

of shortages,

propaganda, meanwhile, Africa. But if De Gaulle became
emphasize the possibility of the winner in new elections in
long-term peace in political cam- France, he would probably ask for

paigns in Europe, and will support

development will automake supply and de-

consumers and businessSome of this buying was

more relative.

Russjan

Middle

The War in Korea

of

not

in
reasonably good southeast Asia,
India, Iran and the

value.

This,

would

a

matically

mand conditions look stronger,
Consumers who buy cautiously

by

ing

men.

or less blocked by United Nations tually
to the
or United States embargoes.

practical extent of such measures to a great extent, rely on the new
and to pave the way for new peace air bases which France has grant¬
neg0tiations.
ed to the United States 4n North

a

hand, that this money, and proaably a lot more, may prevent
these
resources
from falling to
Russia;

western
WColCJ.Il

from the west, which will be

will

which

In

with such

Such

a

^

^ United States P°licies "penly
" The American
But intense
under such conditions. But intense Europe and the
efforts would be made to limit the

still lose out in that area,
case
the
money
will

we may

Great

far

and other
culti UtlxCJ.

countries

trade channels with India and
other countiies in southeast Asia,
or it will convert production
which was traded with the west
into pioduction which is supple-

under such conditions.

the Mar-

conceivable

is

how

and

would go along

openly defy United States policies

.

undei

Europe

whether

European

ee have spent a lot oi money m
shall Plan,

fuJ

about

or

Thursday, May 10, 1951]

Retailers inclined now to pass
shipments of standard quality
suggest that we keep in appliances or other durable goods
mind the fact that there really are will become anxious to get them
"isolationism."
again, as soon as they become
Britain's empire will suffer new two types of demand.
One type of demand represents hard to get.
heavy blows because Russia will
We can even look a little beseek to strengthen European iso- actual consumption. An ultimate
lationism
ictinnicm by sponsoring all-out measure of this might be taken as yond the end of the year with
n™ £.nnncnt.in« «n
attacks against British spheres in the rate at which automobiles, quite a bit of assurance. No matsoutheast Asia and also in the furniture, apparel and other pos- ter how quiet Russia may be in
sessions of the public are actually the
Middle East.
meantime,
present
defense
schedules have been set. And they
Hongkong will enter a critical worn out.
Another type of demand is what will be carried out.
stage, where its old position as the
Production will increase; spendprivilege trading center in the Far might be called market demand,
and is measured
by the rate at ing for military hardware Will inEast may be lost. Communist
which businessmen place orders,
crease; the cash position of the
China will try to open up its own
This was a decisive factor right Treasury will deteriorate; man-

become mentary to the Russian economy.
Hongkong will then depend largely on its ability to supply goods

will

States

Great Britain
Vjrlvdl Ui lldXIl

v

It is hard to put a figure on
_r

United

measures.

.

worth?

How much is that

the

more and more deeply involved in
China.
This would force the AdminisNation to apply new economic
sanctions, including a blockade of
Chinese coast. But it is doubtBritain

he

into

drastic revision of the poli-

a

ministration,
which sought
to cies in Europe may be necessary
avoid the risks of a bigger war in under the pressure of British

point, let me step aside

At this

for

year,

year

.

.

when supplies are obviously ampie become more anxious to buy
in speculative, and in the past few when
supplies
grow
visibly

A "reexamination of the

program.

a

this

of

after Korea was invaded.
Additional American contributions
The other phase was privately
will be demanded, but Congress financed. It involved heavy buyr

The Woild Crisis and
difficult at

half

last

.

ready at work.

"

are

al-

•

,r

.

WAclkAjiMAf

£

If ™5IIIcIm1C|

ISA

W WUa

CINCINNATI, Ohio—Westheim& Company, 326 Walnut Street,
investment securities dealers, announced that they have expanded
their Grain and Commodity Deer

partments. William G. Carlin ha3
become associated with the firm

Communist China, and especially
In most of the soft line markets, as Manager of the Commodity Dehot subjects of
Europe, especially in Great Brit- to southern China, where hun- particularly textiles and apparel, partment.
would like to go back at this point
ajn>
France,
Italy and
perhaps dreds of thousands of "unreliable" prices have recently shown some
Previous to his association with
to
the
question
of manpower, even in western Germany, may natives are in revolt. These mul- weakness.
Westheimer
&
Company,
Mr.
Present governments in western

.

Manpower

the

is

economic

only

have to call for

elections

new

We

-titudes will have to be liquidated

factor in which Russia and its po-

tential

do not expect immediate major or subdued by the present regime,
than the shifts of the political forces within if if is to secure its internal posipotential these countries. But the majority tion during a period of great eco-

allies is stronger

There

is

and

States

its

that
in

has

not

committed

yet

manpower

for

the

year,

can

retailers,

almost

a

come

_

^

I

present

first time
into
the
support of present governments in nomic difficulty.
textile-apparel markets and
think it is also important that these countries is so small that a
A drastic change of administra¬ make
"good buys," behind which
mention another fact: Russia minor shift will make it
impossi- tive
personnel
and
leadership, they can put promotional efforts,

United

aiftes.
te

of

measure

a

It also means, however,

surpluses.

on

its

single

any

own

ble for these governments

front, tinue.

Their

successors

to

con-

.will

be

now

taking place in eastern Euro-

countries, reveals the difficulty Russia encounters there. A
pean

stimulate unit volume

which will

in Gary, Ind., and

Carlin resided
was

with the U. S. Steel Corpora-

He

tion.

has been active in the
markets for over 20

commodity

He has been a member

years.

of

the Chicago Open Board of Trade,

and

has

search

considerable

done

work

in

re-

commodity

the

at retail. »'

price field. Mr. Carlin was eduin these cated at Northwestern University,
markets, it is likely that there will Chicago.
there are not fighting our real proposals, than is the case now.
trators,
less
capable
and
less be some curtailment of output in
Westheimer & Company, in adenemy — Russia
but
they
are
dition to its membership on the
Leading politicians in western skilled than their predecessors, is the next few months.
nevertheless tied down, and fully
These markets, in short are al- New York and Cincinnati Stock
Europe, with few exceptions
do taking over key positions merely

But

have, in

we

tial

in

way,

fairly substan-

a

Korea.

Our

troops

occupied.
There

tory.

But

who

a

have

for

been

vie-

maneu-

position where, at the

have

to weigh the
victory over the Chinese,

moment,

we

a

are

terms

substitute

no

we

vered into

cost of

no

of

great threat to us, in

position

our

as

against

the real enemy—Russia.
That

is

what

fireworks

all

_

j

..

mo¬

r

ine

of

.

.

communist

Korea

soon

influence

in the
that

sure

tend

to

,

our

generation of

in

truth

be

in

these anticipations, they certainly affect policies and they also

eastern

reflect

Russia.

which

are

pop-

These

Far East

was

therefore inter-

critical

developments in for a few hard lines, but in these
difficulties for markets the condition is much less

areas cause

they may force the general and the
regimes to gain military has been minor.
But

eastern

The removal of MacArthur from
the

victories abroad, so that they may
appear
"invincible." At such a

as a definite move of the Point, a general war might break
Administration toward peace ne- °ut overnight.

Supply

which

would

satisfy

We

approaching

are

a

stage

rn

cannot

mere

■

.

.

offensive

in

safely be regarded

local

end with

battle, wmch will
a

new

withdrawal

Chipese Communist forces.

British and probably also French where such possibilities will be
suggestions:
of

United

forces
tarv

An early withdrawal
Nations

from

aid

Korea,

to

Chiang

The

American
no

realization

Truman

cannot follow such a policy, and
probable that the present that his
practical policy will corcampaign was prepared for many
reSpond to most of the suggestions

But it

is

months

in

advance.

Communist

The

command

Chinese

made

probably in

a

ment

by. MacArthur, will result
cooling off of senti-

further
in

western

yet reached it at the moment,

and

conditions.^ A
sue:s

,

Z

.

(1)

They will be stronger.

(2)

They will again look even

stronger

than

they

actually

time

so

far

on

a

great

deal

of

the world crisis,

There is nothing that is

more

im-

portant at the moment. Neverthe-

less, it is highly important for all
of us to sum these things up in
terms of the domestic economy.

Europe, and in
All of you realize that the deGreat Britain for fense program of the garrison

&

Company,

successful offering of two te¬

made April 18 by M. G. Newcomb,
New
York fiscal agent for
the
banks.
The
financing,
totaling

consisted

of

$30,000,-

000 2.00% consolidated debentures

The

spent

Bros.

of debentures of the Federal
Intermediate Credit Banks was

be- $90,145,000,

come.

have

direct wire to Chicago

FIG Bailie PlaCC DebS,

demand

.„

a

Lamson

Prospects

change in two respects.

a

maintain
with

prices

on

the second half of the year will

show

The Domestic Economy

or-*

I

that

have not

we

mili-

Kai-shek

g

Formosa.

The military outcome of present
buttle* in Korea is still uncertain

or

and

extremely acute; but

effect

Half

Second

preted

deci- gotiations,

side,

supply

future
can

Whatever

attitudes

On (the

adminis-

young

because they are considered "re- ready following a normal course Exchanges and the New York
liable." As a result, these eastern of correction, which should be Curb Exchange, is a member of
in- countries are
now
experiencing reasonably well completed within the Chicago Board of Trade and
the greater
supply difficulties than another 30 to 60 days.
the
Commodity Exchange, Inc.,
lies the western countries.
Similar conditions have arisen and
has
made
arrangements to

near

war

westward

move

future.

near

new

/t,

Sl5?'
as a

^

ratber than the present

'
may

war

feel

avoided, that Russia does not

political
the

at

.,

,,

,

?Vf

ePp'ect

They

ular.

the

about

are

ment.

■debate,

paigns,"

not
is

subject to the "peace camwill be fed by Russian

more

first

point

deals with the due Aug. 1, 1951, and $60,145,000
available 2.15%
consolidated
debentures

actual volume of supply
for

mal

civilians, in relation to
demand

based

on

a nor-

current

due Feb.

dated

trends.
The

,

supply

will

be

definitely

smaller.
Most of the

declines

will

P

1, 1952. Both issues were

May
,

,,

1951,

1,

and

were

,

3 P3r'

,

flc-=

nnn

Of
Proceeds, $60,855,000 was
come-used., to retire a like; amount of

debentures maturing May 1, 1951,
supplies close ties with the United States,
These declines will develop as and $29,290,000 is "new- money.''
economy, or whatever you want to
from Russia. This
call it, has two phases. One will military
production increases—
As of the close of business; May
probably also includes the build- Repercussions Will Be Widespread be based on a major increase in whichTt will, Quite rapidly, in the
j 1951 the total amount of deben0f
'
^ bas^
Other specific developments;the actual production of defense second half of the year—and by /
Thus,
the
alternative
policy must be anticipated as follows:
items.
This phase actually will the\end of the year will be quite tures
outstanding amounted to
auggesfed by advisors of the AdThe Western defense effort in only get under way during the
ws>.:
jr.
sub^antial.
"1
.$682,735,000;
-

were

a

d

campaign

sure

unless

of suDstantial

they

particular

in

in consumers' durable goods.

support

.

_

..

,




-c

*

.Volume 173

Number 5010

.

.

.

The Commercial and Financial Chronicle

(1973)

Continued from page 5

'

$5,000, declined to 28 from
than

The State of Trade and
be

in

broad

as

the

beginning

Industry

it is designed to become

as

few

a

months later.

Many

consumers

will regard the shift to CMP

as

change in

a

name

only at first. Then they'll notice that production scheduling
is made easier—at least for those who are included under the plan.

Finally, they'll

(1) received,

are

the plan grow

see

additional requests for metals
(3) squeezed of excess and (4)

as

(2) scrutinized,

from the beginning.
In spite of this, National Production
Authority is trying hard to get the plan operating as fully as
possible during the third quarter.
As the scope

of CMP is broadened to include

more

consumers,

supply of free market metal will shrink accordingly.
"The Iron
Age" expects "free" steel to shrivel to about 25% of total output

by the fourth quarter.

NPA officials

admit

now

than half

more

of steel production will

NPA has

cutbacks

probably come under control.
gained industry support by the way it has handled

metal

on

use

far.

so

Both

and

consumers

producers

•

generally feel that if restrictions
continue

follow

to

the

on use

are necessary

they should

present. pattern—that

is, to control the
be used, but not the number of units
which may be made from it. In spite of the
advantages of this
method, there are still some in Washington who would like to
control unit production, this trade authority notes. ■ ; - < >
Auto producers are too busy
looking for alloy and carbon
bars and spring steels and testing
substitutes, *• including boronamount of metal which
may

'

,

:

treated

steels, to

much heed to the further reduction in
steel use
makers, who can now use 80% of the
steel they used during the first half of
1950, will be limited to
75%
•

pay too
for autos.
Auto

in June and

70%

during the third quarter. But these cuts
industry doesn't solve the prob¬

will prove academic if the auto
lems of bars and spring steels.

The
lower

"essential" industries

Small

almost certain

are

percentage of uncontrolled

into

to eat

this

even

It won't make much

tonnage.

difference how much other steel auto people

help to them if they can't break these bottlenecks.
Coldrolled sheets are now being traded two-for-one for
alloy bars,
concludes "The Iron Age."
American Iron

The

Steel

and

Institute

announced

this

operating rate of steel companies having 93% of the
steelmaking capacity for the entire industry will be 103.7% of
capacity for the week beginning May 7, 1951, based on the indus¬
try's increased capacity of Jan. 1, compared to a rate of 104.0% a
This week's
steel

ingots

2,079,000

castings
A

ago.

for

point.

u"

-

equivalent to

the

month

production yielded 2,045,000
of the old

a

operating rate is

and

week

a

of 0.3 of

tons.# A

tons

of

it stood at 100.1%

capacity and amounted to 1,908,200 tons.

Electric Output
The amount

Registers Sharper Decline in Latest Week
of

electrical

&

Bradstreet

wholesale

food

distributed by the electric
light and power industry for the week ended May 5, 1951, was
estimated at 6,559,700,000 kwh., according to the Edison Electric
energy

Institute.
The current total was 113,805,000 kwh. below that of the pre¬
vious week, 688,016,000 kwh., or 11.7% above the total output for
the week ended May 6, 1950, and 1,276,108,000 kwh. in excess of

the output reported for the corresponding

price

foods

in general

$7.16.
It
rise of 22.3%.

year ago, or a

total

sum

period two

years

ago.

Carloadings Advance With Increase in Ore Shipments

its

and

use

chief

a

narrow

week, the daily
wholesale commodity price
index, compiled by Dun & Bradstreet,
Inc., dropped quite sharply on the final day to close at 321.77 on
May 1.
This compared with 322.93 a week ago, and with 257.15
the

on

corresponding date last year.
Grain futures on the
Chicago Board of Trade continued to
move in a fairly narrow
range.
The undertone in wheat was firm
and final

prices

mill demand

Winter

slightly higher than a week ago. Domestic
relatively quiet, but sizable quantities of hard

were

was

wheat

sold for export account.
Reports from the
steady deterioration of the new Winter wheat
crop since it was seeded, while rain, snow and cold weather have
delayed seeding of Spring wheat in parts of the Northwest. Offer¬
ings of cash corn were limited; prices continued
firm, aided by
improved shipping demand and good support from commission
houses.
Oats prices were slightly
easier, largely influenced by
increased marketings.
Volume of trading in grain futures on the
Chicago Board of Trade declined last week. .Sales totaled
154,819,000 bushels, or a daily average of 26,000,000
bushels, the latter
comparing with 29,000,000 the previous Week, and 47,000,000
bushels in the corresponding week last year.
'
V
were

Southwest indicate

Business

in

a

the

domestic

flour

market

remained

quiet with

buyers generally holding to the sidelines.

Cocoa

and

coffee

prices

were

prices eased off toward the close in sympathy with weak¬
Steers, hogs and lambs on the Chi¬
cago livestock market were mostly
steady to slightly easier for
in crude vegetable oils.

the week.

Spot

cotton

prices

generally

at

ceiling

in

spot

declined

the

to

smallest

the ten

spot markets last week totaled 47,600 bales,
a week previous, and with
142,600
a year ago.
Prices for new crop futures
advanced moderately, aided by reports of
lateness of the crop in
certain

sections of the belt,

the

and

the possibility of some

increase

current

season

tions continued easy-

Trade Volume Holds

spending in the period ended
aggregate dollar volume spent

sumer

corresponding week

Wednesday of last week.
nearly unchanged from
year ago, Dun & Bradstreet,

on

a

shoppers

demand

for

were

wear

was

led by an

lines; especially

popu¬

Summer dresses, blouses and accessories.

sportswear continued

to

increase

noticeably in
There was a heavy demand for suits
topcoats in others. ' The purchasing of

proportion to formal items.
sections and for

some

year

various

total

output was 147,375 units
against last week's revised total of 153,586 units, and in the like
week of last year 139,492.
Canadian output in the week totaled
week ago and 6,845 units

in the comparable 1950 week.
Total

output for the current

week

was

made up

117,007

of

"

and 30,368

cars

6,705

cars

trucks built in the United States

and

a

apparel

were

fractionally

above

a

total

of

and 2,520 trucks built in Canada.

year

a

ago

by these

percentages:

for

added.

a

of

Regional estimates varied from

ago.

the agency

9,225 units, compared with 9,154 units

sales

Total retail dollar volume in the period ended on
Wednesday
week was estimated to be from 2% above to
2% below a

week
were
restricted principally to
operations1 in the Detroit area where output declined
approximately 2,000 cars and 1,000 trucks because of the Budd
strike, Ward's said. Chevrolet truck output also dropped to more
normal levels following unusually high volume the previous week,

alone,

dollar

of last

last

States

New

England, Midwest, and Pacific Coast +1 to —3; East and

South 0 to +4; Northwest 0 to —4; and Southwest
+3 to —1.

Wholesale ordering for the nation dipped very
the week and total order volume
the

similar

week

in

was

slightly during
appreciably above the level

1950.

The number of buyers
visiting
increased slightly last week, but was
somewhat below that of a year earlier.
Department store sales on a country-wide basis, as taken

from

wholesale

the

Federal

Reserve

Board's

index

for

the

week

ended

April 28, 1951, increased 3%

from the like period of last year.
This compared with an increase of 1% in the
previous week,
and an increase of 1% for the four weeks ended April
28, 1951.
For the year to

of

Business Failures Hold Steady
Commercial and industrial failures

were virtually unchanged
May 3, totaling 163 as against 162 in the pre¬
ceding week, Dun & Bradstreet, Inc., notes:" While casualties
were off moderately from the 199 and 193 which occurred
in the
comparable weeks in 1950 and 1949, they were down sharply,
42%, from the prewar total of 281 recorded in the similar week

in the week ended

1939.

-

Failures

date department store sales registered

an

advance

12%.

135

level

of

151.

Small

casualties,




those

having

liabilities

weather were cred¬
ited with the better showing of retail trade in New York the
past
week.
As a consequence, department store sales were estimated
at about

under

years.

property

the

pioneer in the
diesel

have

use

of

locomotives

west

of

been

The

years.

on

made

road

was

a

heavy freight
and

its

lines

Havre,

Montana, where
steep grades prevail, have been
completely dieselized. Despite the
non-recurring

difficulties

rain and rigorous weather condi¬
tions under which it
operates, the
ratio of expense to gross revenues
in 1950 was 71.3%, against

74.5%

as

a

whole.

-

Great Northern has good credit.
15

fixed

charges have
$19.3 million
$7.9 million, where they are
equal to only 3Vk% of gross reve¬

been

years,

reduced

from

Further

expected
of

store sales in New York

City for the weekly period of April 28,
1951, advanced 5% from the like period of last year.
In the
preceding week an increase of 1% (revised) was registered above
an

increase

for the year

of last year.

of

4%

to

reduction

is

indi¬

retire

$11.7 million
general mortgage 5V2s of 1952,
only near mortgage maturity,

out

of

liquid

terest

still

rate

and will

15%- of

another

ceived

way,
from

will

average

consume

only

pre-tax 'earnings

1950

on

in¬

obligations

on

outstanding

about 3%

The

resources.

paid

results.

the

Putting it

dividends

Burlington,

re¬

the

on

present rate of payment, amounts
to about 75% of total annual in¬

now on

and

Northern

this

sirous

is

$4 annual dividend basis

a

tected.

;

Preferred

rate

While

seems

well

directors

pro¬

de¬

are

of

avoiding wide fluctua¬
tions in the rate, continuation of
the present high level of
earnings
should ultimately mean a
larger
return

to

3,092,583

shareholders.

shares

With

outstanding, the
leverage

stock does not have the
of

some

of

the

more

speculative

rail

issues, but it possesses fea¬
tures of strength which few
equi¬
ties selling so low in relation to
earnings and dividends afford. At
the current price of around 51
the
return

on

the

investment

proximately 8%. The
selling at from 4% to

is

ap¬

stock

is

5 times
estimated 1951 earnings and about
6.2 times average
earnings of the

past decade.

J. H. Jackson With

was

For the four weeks ended April 28, 1951,
above that of a year ago, and

recorded

to date, volume advanced
•

Lehman in

Chicago

CHICAGO, ILL.—Lehman

Bro¬

thers, 231 South La Salle Street,
announce

the association

with®its

Chicago office's municipal bond
department of John H. Jackson,

formerly with Lee Higginson Cor¬
and Harriman Ripley &
Co. Incorporated.

poration

Joins Sutro Co. Staff

10% above the like period in 1950.

According to the Federal Reserve Board's index, department

the similar wedk of 1950.

•

of $5,000 or more increased to
from: 125 in the previous week; but did not reach last year's
involving liabilities

few

fine

a

centers

More vigorous promotions and favorable

of

improvements
over

Great

was

Inc., reports in its current summary of trade.
A moderate rise in last week's apparel
buying

Combined motor vehicle production in the United States and

Dodge

next

terest requirements.

Steady in Latest Week

The continued presence of seasonal weather
throughout large
areas of the
country was reflected in a slight rise in total con¬

Total

according to "Ward's Automotive Reports,"
totaled 156,600 units, compared with the previous week's total of
162,740 (revised) units and 146,337 units a year ago.

the

physically. Large expenditures

based

1950

same

year asp.

Canada the past week,

in

Great Northern is

through the latest period aggre¬
gated 3,360,000 bales, comparing with 4,179,000 bales in the similar
period a year ago.
Inquiries for cotton gray goods showed some
improvement, but the undertone of prices for certain construc¬

Exports of cotton for the

111,000 bales in the

shoes declined somewhat in scattered communities.

United

celerate

about

previous week and

39.218 cars, or

the

average growth in the past decade
this trend is expected to ac¬

and

week.

the

in

Output Declines Further the Past Week

into cultivation. Gross
have shown better than

revenues

its

The week's total represented an increase of 79,367 cars, or
10.6% above the corresponding week in 1950, and an increase of

5% above the comparable period of 1949.

cheap power in that
bring large new agricul¬

areas

export qupta,. ^Offerings were attributed mostly
to profit-taking attracted
by recent advances, reports of unex¬
pectedly large plantings and more favorable weather in some
areas
of the belt.
Exports of cotton continued small, totaling
58,000 bales for the latest week, as compared with 113,000 bales

The

For

tural

cated next year when the road is

ore
■v.*

the

and

nues.

week

same

lar with

losses

to

area

bales in the

increased interest in certain women's

Production

Columbia Basin irrigation
project
in the State, of
Washington will
add

to

above the

Auto

.
Horse
dams
in
western
Montana and the Chief Joseph and

comparing with 59,000 bales

the level of the

preceding week, due largely to increased shipments of
in connection with opening of navigation on the Great Lakes,

are

gry

levels

volume in almost two years.
Sales in

under
construction. The Tiber and Hun¬

In

markets, however,

territory,

hydro-electric

irrigation projects

for Class I railroads

remained

throughout the past week.
Activity

and

in its

other

last year and the mountanious ter¬

unchanged at previous levels.

Lard
ness

for

come.

located

are

many

many

increasing demand.

to

The
Great Northern
has
ex¬
cellent growth characteristics. The
Grand
Coulee
and
Bonneville
and

the

of

2

page

Great Northern will continue
many years

dams

most

range

Loadings of revenue freight for the week ended April 28,
1951, totaled 824,662 cars, according to the Association of Amer¬
ican Railroads, representing an increase of 15,142 cars, or 1.9%

-

com¬

the

of

from

The Secnrity I
Like Best

turned

Lower Level

Continuing in

The

;

index

week

in

2,073,000

industry, compared to
the rate was 102.3% and

year ago

Continued

group.

Wholesale Commodity Price Index Ends Week
at

in

entire
ago

numerous

price per pound
function is to show the
general trend of food prices at the wholesale level.
of 31

week

the

week ago, or a decrease

Dun

last

pared with $5.84 at this time a
The index represents the

find, it won't be of

much

that

considerably less

succumbed in this size

Raw sugar was firmer in response to

large producer of heavy forging alloy bars reports that
only 26% of its orders booked for August will be "free" tonnage.
They say spring steel will be only a little better. Requirements
of

'

were

concerns

following the preceding week's upturn which
interrupted a six-week downward movement.
The index for
May 1 dropped to $7.14 from the previous level of

One

•

37 and

when 48

year ago

Wholesale Food Price Index Turns Downward

programmed by certifying officials, the magazine adds.
The time and work required to properly process and
weigh all
these requests for metal will prevent CMP from operating at full
scope

a

37

12% from the like period

'

'

r

(Special to The Financial Chronicle)

SAN

FRANCISCO, Calif.—Her¬

bert M. Hauser has become asso¬
ciated with Sutro & Co., 407 Mont¬

gomery Street, members of the
New
York
and
San
Francisco
Stock Exchanges. He was
previ¬
ously with Hooker & Fay.

38

The Commercial and Financial Chronicle

(1974)

teresting

you're

you're obviously
bullish, and you interpret the
recent action accordingly. If

Markets

you're out of this market, or

Walter

Whyte

short of them,

Says—

It's six of one or a

tive.

cinch to

a

*

*

get u n d e r n e a t

To

write because the market has

half

another.

dozen of

*

should be

then your in¬

terpretation is equally subjec¬

==By WALTER WHYTE=

h the

hopes, wishes and fears that
performed almost according constantly ride this market,
to a blue print. I could devote
you have to take a long look
a couple of paragraphs to the
at individual stocks and what
taking of bows, and presto!
they're doing. If you can for¬
Ill be at the end of the cur¬

rent

position, you'll no¬
isolated moves I
pointed to during the past
I few weeks seemed to stand
get your

piece.

tice that the

*

*

*

But because it's so easy
haven't the faintest idea what out while the
to

For the past three

say.

either

ket

rest of the mar¬
went down, or

weeks this column has been worse, did nothing.
A few
on record to
the effect that weeks ago it was the oils, then
instead of more down than up, came the "romance
stocks..

the solid
people refer
than generally believed. Well, to with awe—the blue chipsyou've had the up—the indus¬ were lying on the side of the
trials have made new highs, road licking their paws.
the

signs pointed to more up
then

and

a

lot

more

the while

all

But

down citizens that most

and the down has also started.

the question to be an¬
swered is how far down will

#

Now

they, or can they go, before
turnabout.

any new

*

*

*

You

see

I

can

pose

But when it
I

answers

can

be

the ques¬

hard to

this point and
everything on Con¬

wander off at
blame
gress,

Truman,

the Reds, or any

tions.

1

*

wouldn't be too

It

Mac Arthur,
other single

collective group.

or

It would

as

the

went

average
Late (this

down.

It's

a

very

in-

Jjs

A
ered

Pacific Coast

Securities

*

#

long time ago I discov¬
that the only way to have

unbiased judgment is to
all positions, long or
short. If I sold everything
and still liked them, I would
an

be out of

a

Orders Executed

on

Schwabacher & Co.
Members

New
New

York

Stock

York

Curb

Exchange

San

Exchange

(Associate)

Francisco Stock Exchange

Chicago Board of Trade
14 Wall Street
COrtlandt 7-4J 50

New York 5, N. Y.
Teletype NY 1-928

Private Wire9 to Principal Offices

San

Francisco—Santa

Barbara

Monterey—Oakland—Sacramento
Fresno—Santa Rosa




Thursday, May 10, 1951

,

year.

)

In all

Inflation, Spending and Taxes

honesty, I think I should

point out that governmental em¬
ployees,
like other employees,
have suffered-from the increase
^

catastrophic decline money is borrowed from the
in the cost of living, for which
in price as the Secretary of the banks,
the
banks will
create
during this past year no provision
Treasury had
feared
and had monetary purchasing power in
has been made. It may well be
charged. The general result has the form of bark credit which
that as a result of the inflation
been relatively healthy, .and at will be made available to the gov¬
which we have already suffered,
least in the last two months there ernment, and the result will be an
most of the gains which we would
has been no inflation of private increase in the ratio of money to
have obtained by squeezing out
credit, and it is this lack of in¬ goods, and a rise in the price
been

such

no

flation
bined

of

private credit com¬
the stability of gov¬

with

which

finances

ernment

in

excess

level.

overstaffing

and

vacation will be absorbed

excess

by the

salary increase which in all fairn e s s
governmental
employees
mind ab¬ should receive.

Budget Should Be Balanced

my

has prevented prices
from rising during these last two
judgment

It is therefore

to my

solutely essential that we should
prevent this deficit from occur¬
ring.
One way to do it, and I
Year Ahead May Be Gloomy
should think the most popular
We are in the
sunshine for
way to do it among this group,
the moment, but the year ahead
and the most important way is to
may be very gloomy. The reason
cut expenditures, and I am all
months.

I do not wish to dwell too

.

about the

long

fact, but I believe that

appreciable savings cain be ob¬
reducing the number of

tained in

which

automobiles

governmental

particularly
in the
for this,
of course^ is the in¬ for that. Let us see what can be city of Washington, have at their
creased rate of military expendi¬
and in reducing the
done in this direction. Taking into disposal,
tures to which we are committed.
account that I am now speaking printing and publishing bills of
In 1949 and 1950 we spent for
of the non-military items which, the government.
military purposes $13 Vz billion.
excluding veterans' payments, do
"Cut Out the Pork Barrel"
As the previous speaker has said,
not
amount to
more
than $10
we are now spending at the rate
billion
and
What
I have
said has been
including veterans'
of about $25 billion a year. We
payments to about $15 billion. In popular up to date. What I shall
have about doubled our expendi¬
the first place, there is still a con¬ shortly say will not be so poputures. The budget for next year
siderable degree of overstaffing lar.
■
calls for military spending of at
of the governmental agencies, al¬
In nearly every year the Con¬
least $40 billion, and authoriza¬
though not as great an overgress is faced with a bill for rivers
tions of $20 billion more. The ex¬
staffing as there was last year and
harbors of approximately $750.
cess
of
authorizations over ap¬
before we made our cut of $750
million to $900 million a year. As
propriations is to permit the De¬
million., There is a general ten¬
fense Department to place con¬
you examine that bill you find
dency to overstaffing in all large that there is
tracts during the coming year for
something in it for
concerns. I think you gentlemen
which payments will not be made
virtually every state in the Union,
may find that some of your con¬
until later.
except the Mountain states which
employees,

,

.

cerns

Let

take

$40 billion as the
bedrock figure. To that should be
added the $7^ billion which is
contemplated for foreign aid—and
I may say that that is to be almost
us

re-equip a number of French di¬
visions—plus $2y2 billion for tomic energy, which is a defense pur¬
pose,

plus

a

billion and

a

half dol¬

lars for stockpiling, and we come
to. the total of $51x/2 billion for de¬

There

are

$20 billion more in

purposes; from
of this will go

$5% to $6 billion
for interest, and

veterans' payments

will run from

overstaffed

the

for

meeting the payroll. The, Civil

do

not

rivers

have

and

do

not

to

be

ap¬

But this tendency
have harbors. Along the Atlantic
tends to be particularly acute in
Coast and the
Gulf, there are
government because the people
generally provisions for harbor
who do the hiring do not have to
improvements which upon a na¬
bear the immediate responsibility
top.

tional

size

out

turn

propriations

to

enable

pleasure
yachts and motorboats dwell-toso arranged that men get promo¬
tions according to the number of do, members of the local Chambers
of Commerce to be taken care of*
people who serve under them.
And
these
appropriations
are
This is sometimes true in the
staffs i>f cailitary organizations as generally sufficient -to command
Service

rules in

some

cases

are

the

still

=

the estimated budget for all other

somewhat

are

at

fense./purposes, and this is prob¬ well.
ably, as I have said; a minimum.
I

that the

feel

should make

determined effort

a

to reduce the

Congress

enthusiastic

Senators

support of the
Congressmen from

and

these states. The

Republican Com-

find it very easy to adVocate harbors for pleasure yachts

overstaffing which pressmen

exists, and I would single out two?
because they feel in
branches of government as being

close-

very

rapport with the local Chambers

characterized by
$4 to $4^ billion. So these two overstaffing. The safe thing for a pf Commerce. The Democrats of
course never get
the support of
purposes will take about $10 bil¬
politician is to denounce overlion, leaving $10 billion for all staffing in general but not to the Chambers of Commerce, but
other purposes. This arithmetic
mention individual instances. I am they always live in hopes, so they
in

comes

handy

because

some¬

times

Pacific Coast Exchanges

,

tween $150 million to $200 million

12

to be comforting to find a whip¬
evasive ping boy to blame things on. entirely military aid, primarily to

comes

customer's Unfortunately, finding a
man.
afternoon, straw man isn't going to bmp
Tuesday, the industrials went you one dollar. In the final
down to 260 or so, where they analysis you will still have to
closedr after making a high of give instructions to the order
264, The rails, on the .other clerk, or whoever it is you do
hand, didn't go up but also business with.
as

Continued from page

then

long,

Tomorrow's

This

If

picture.

.

people believe that the porTbuy them back. If not I would
either hug the sidelines or put defense, non-fixed portions of the

particularly

a
so

very

I

imprudent politician and

shall

mention

two

too

advocate

The

govern¬

these projects.

result

is

that

you

get

?

aii

ment departments which in my accumulation of a great many
Federal budget amount to the
judgment are grossly overstaffed: millions of dollars spent for these
major portion. As you will see The
Veterans'
Administration, harbors which if you analyze them
*
*
*
from
what
I
have
said, they which according to the Budget in closely
really have no national
amount to about $10 out of $17
interest.
I'm personally long of some billion—still a large sum, but a January had 188,000 employees,
and the Department of Agricul¬
But the big money goes for the
stocks and I'm also in the red. fraction of the total.
ture, which maintains a duplicate, lower Mississippi, for the
upper
We should add to these esti¬ not only a duplicate, but in many
But I think they'll go lower.
Missouri, and for the Arkansas
mated Federal expenditures some cases triplicate and quadruplicate
rivers.
That
is
where the big
So don't do as I do. Let your $22 or $24 billion to be spent by and quintuplicate county organi¬
money in the rivers and harbors
State
and
local
governments, zation
in
most
of
the
3,000
own bankroll be your guide.
appropriation goes. All I will ask
making a total of $95 billion in counties of the country.
is that you study very carefully
\The views expressed in this governmental expenditures at all
I think the squeeze could be the report of the Hoover Com¬
article do not necessarily at any levels, or 37% of the net national
applied with profit to those two mission and the report of the retime coincide with those of the income of $260 billion, which is
organizations, but I can picture cent Commission on Waterpower
Chronicle. They are presented as the best figure for the present
the, anguished howls which will Policy as regards the Missouri
those of the author only.]
time,

out

a

couple of short lines.

*

come

Let

me

take the Federal budg¬

when the

I have

made

axe

is swung.

myself extremely

et, because it is that with which

unpopular with governmental em¬
we are most
intimately concerned.
ployees, of whom there are 81,000
Estimated expenditures under the
in the State of Illinois, by saying
figures submitted by the Presi¬
that I thought the vacation al¬
dent are $71 billion. It had been
lowances
of
government
em¬
thought in January that the esti¬
ployees were excessive. They are
mated receipts would be around
26 .days a year for -vacation. I
$55 billion. The increase in pro¬
would not object to a month's
duction, the rise in prices, in my
judgment, will probably raise the vacation, and this seems to be a
month's vacation, 2$ days, but it
receipts at the present level of
is 26 working days, and the gov¬
taxes to about $60 billion, leav¬
ernment is on a five-day week, so
ing a deficit; of somewhere around
that
amounts to 5*A
weeks of
$12 billion. Unless we eliminate
this deficit for the coming year, vacation for each governmental
employee, which seems to me ex¬
we will have inflation in the year

ahead,

because the
compelled

government
to
borrow
money to meet the deficit and, as
I have explained, in borrowing
will

be

money
it
from the

will

largely

borrow

cessive.
A

cutting back of the vacation
to the average of
a

allowance

month

or

graduated

River

proposal, namely, a pro¬
posal to get a deep draught water,
to get the Missouri River so that
magnificent ships may*cruise up
from Kansas City to Sioux
City at
the border of Iowa and South

Dakota, and similarly a proposal
the, 500 miles of the

to open up

Arkansas
There

river

Rjver

just

traffic,

Arkansas

you

to

navigation*

not

be

to

and

justify these

twelve-foot

examine

enough

Missouri

on

rivers

eight, and
If

will

the

channels!

past

traffic

figures, there just is not going to
be enough traffic there io
justify
the
expenditure, which will run
into fantastic
figures, hundreds of
millions of

dollars.. If ultimately
carried out it will run to billions

perhaps better still a pf dollars.
There is
scale
according
to

something about the
banks. If it borrows
seniority, with a similar applica¬ prospective sound of a steamboat
whistle which destroys the senses
purely from individuals out of
tion to sick leave, which now
of otherwise level-headed
their savings it would not be in¬
men,
flationary. It would be a transfer amounts to 15 day$ or three and so I urge you, examine these
of
purchasing
power.
If
the weeks, would save somewhere be¬ projects with some care, and when

Volume 173

Number 5010

.

The Commercial and Financial Chronicle

.

(1975)
it

is

a

also

nice

,

proposed that

little

harbor

alone the rivers
to

arid

states

hv

Irrigation

inthpWinning

nolicv

bPPn
oeen

carried

we are

abi ut

I

our

think

extremely

h^s ^ow

which

t^

Doint
point

where
wnere

money to irrigate

lands

costs which

semi-

an

ine

spending

semi-arid

an

was

to
xo

tne

m

west

at

•jjUli trom case to $yuu
$oUU of one

and-.in the

acre,

project

which

passed

by

was

the

proposed

Senate,

and

$1200

an

3?r?^ xCaJlrh®ai* some°na whistling
at; that. Well
done.

land

some
in

gard

the

as

the

north

most

United

I

of

state, which

my

fondly

fertile

re-

land'in

sell-

was

It

acre.

that

mg

natl0nal

that

the

should

pay subsidies.
My friends, I refer to
that

lng

loudly

I .had

a

of

fact,

the
irrigation features of these
projects certainly do not pay out.
Yet, I hope my friends from the

semi-arid states will not take this
amiss when I say that

though they
population, they have

tremendous

power in the United
States Senate. The eight states of
the Mountain
Region, which have
ah

total population of less than five

million, have 16 Senators in
United States Senate
two

as

the

compared

Senators

from

my

state of Illinois, which has a
population of 8,600,000, and New York
State with a population of virtually 15 million and having only
two Senators

So New York State

00A:ew rorx axaxe,

I-

*

with

three times the population of

the

Mountain

States,

has

one-

eighth

the
We
representation.
don't complain about that because
the
only
way
we
could - get
this country created in 1787 was to

—

haxm

but

fVtn

do

we

heart

crnoii

power.

could

be

to

have

a

they push their

-

lishers

God

have paid

of

we

penalty of

the

the

industrial

in full.

The Post

lack

of

power,

I

let's

looked
a%

be

i

Office

take

Expense

the

Post

over

*

_

,

the
__

•

Office,

Treasury
*

£

its way, but nobody

pay

favor of

in

re-

seems

helping to

a

advocacy of

——j

is

which

caused

i--

by

private

users

of

the

Ranked

in

_

we

that way, but
still would have a subsidy to

the

private users of the mails of

save

'

,

\

free

mailing
maga-

subsidies

and

help us
than
any

the

single

we

be

enterprise
and

more

I

have

be-

$100

million

vour

let

monev

Halsev. Stuart Grouu

the

t>.,+

main-

taining a Marine was approximately $4,450, even with all overhead charged in. The
average cost
of

maintaining

$5,900.

was

Johnson

has

,•

„n

i

*

T

a

Lyndon

made

a
survey of 16 boot
the country; sometimes
they are called boot camps. Sometimes they are given the elaborate
title of indoctrination
center. He

in

camps

Parris

Island
and
San
*uan

•

Diego,

lAicgu,

n

are

cp!pgshfrom a
which has not

Denver and Rio Grande Western
RR- 3% equipment trust certifiwill be doing
very well if we cates, series Q, to mature semiget $2 billion of savings out of annually Dec. 1, 1951, to June 1,
these $40 billion of
expenditures. 1966> inclusive.
The certificates
Serv-

our

think

we

-

Faced With Deficit

of

$16 to $12

Billion

So

which

we

limit

group

the savings
make, the practical

can

faced

$10

with

billion

conclusion

to

$12

run

But

deficit

a

which

we

12

every

Burke

of

we

from

billion.

I

draw

deficit

a

is

The

is

that

with

its

except

in

being

men

newspaper

trained.

the

issue

at

tax

and

pay

taxes

more

of

and

war

Nobody likes to levy
But

I

see

answer

no

equipment estimated

uncon-

to

cost

not

r,

R-.w-Pressprich & Co.; The Illi^01s Co,; ™ls & Co<; Freeman &

G°mpany, McMaster Hutchinson &
and_ Peters, Writer & Christensen> Inc+

,

'

distributing this burden of
taxes, I would like to remind you
two

there

things.

The

still

are

first

is

that

is

$4,130,

Census;

it

But

area.

according

is

In New Ouarters
cmr apo
nffjPO

not

there

to

lots

are

nu-

«

™
i?;rcf at3*!!? larger quarters at the

+_

„

i

Street, Erwin A.
** partne_r» baf

ct„0L„0v,

•

,

--

,

T
^ S^aS ?
£> ?. Salte ^ee
offices

1K

-.oc

?

poor

^

a

q?,1^

the

of

tk
d

k

low-income

a

th

Gblcag0
Peabody & C<\>
bankers, have maY®d

f

lot of poor peo-

a

pie in this country.
I don't see
too many of them around Washington, unless you go hunt for
them. The avtAagc ioihaiji mtumc
-»■ "t
average family income
here

will be

less than $3,560,000: 5 Diesel-electric road switching locomotives
and 525 a11 steel h°PPer cars,
wS°^iated in the offering are

it.

of

awarded

dltlonally guaranteed, principal
ai?d dividends, by the Denver and
Rl.° Grande Western RR. Co. and
Wl11 be secured by the following
new standard gauge railroad

In

0

A.-.-

in this country, on the
farms and in the cities. A sales

,Kldder> ;Peabody,
also

pbdadelphia, is a member of the
New York Boston and Midwest

people

imposed on food and
the cheaper forms of clothing will
—

Army'friends

cbam
been precise|v overflowing in it* love and

to

period

a

taxes.

more

to

given to mortal

extremely unpopular

likes

one

that

not

was

It

man.

said

once

to please

for

was

1951>.The certificates

of

limit, at around $4 billion.

No

priced to yield from 2.20% to

3.05%, according to maturity. The

personally, I would fix the comPetitive sale yesterday (May9,

practicable

are

ace

tax which is

thp

creas€\ An P°stal rates, and the

is

petitive bidding into
ices. Being human, I

then it hurts.

*

Senator

just

soldier

a

f 1
honesty I must sin- there is one enlisted Marine for
?oin
f?ne 5
newsPa.Per every ten men who
being
+?r. *av°rab*? mention, trained; that in a large number of
which^nr Army and Air Force centers»
S j jf
theTe is one enli.sted man for
fl]

troduce

really trying to inthe principle of com-

getting
some consequences
of
inflation
we
figures together. They have not shall have to increase
taxes'
yet been successfully challenged.
That is not popular
Edmund
in 1948 the
average cost of

are
offering, subject to
authorization by the Interstate
Commerce Commission, $2,670,000

r am

been

the
on the part of the newspapers and has told me, and I believe his
maga.has ...been something statement- to be correct, that in
JessN than^ overpowering ,(laqgh^ the two Marine training depots,
ter).

vvnai

^

in

New

with

York,

offi

Boston

and

,,

1 11 cur ^ Py rrienas
much
could learn a great deal from wei§n mucn more henvilv on tv,ic Stock Exchanges and the New
m01£ neaviiy
this y
e
'
"If AN.™
friendship fwm!
toe nLt'
adopting the "standards ~bf toe group than ?n the upper group
Curb Ettcltage
The tan
the
newspapers^ owned bv the Marine Corps. and I submit that because a large percentage of Pag 1nalntiained a Chicago office
r ui,
'
this
Chicago "Tribune." Common hon^"th* comparative measuring stick their income will be spent on food since July, 1937.
esty

compels

to

me

single these

on

fmparativp. measuring
^t Witt profit be applied

grouos"out^as'^croun^ which their
gr°Vps °JU11 as 8r?ups wnicn

two
u

.e, adyocat®d

postal

rates.

au

increase

May their tribe

m
in-

I

crease.

if

the Post Office

analyze

you

expenditures and

?

expenditures.

to

to airlines for carrying the
mails,

railway

to

ships.
Though my
friends will take me to

and a"ff on the cheaper formS
So a sales tax which

falls

can go further and say that I

think the ratio that
have

100

in

men

have to

you

uniform

in

the

these

on

items

iture wiu not be
3%

sales

tionate

tax

proportionate;

will

ovicfc

Judgment if we
bi lion out of the

$2

wastes civilian manpower, that it
wastes military manpower, and
that

I

believe

the

same

charge

could certainly be applied

to the

Air Force, and that

within

division

3

there

is

even

too much

idle

is

iike

thing I should

civilian

sq

manv

has

none.

fire

mPn

ncincr

ponhnr

proportionately

than

When

we

doubtedly
being

to

come

budget,

this

there

incurred,

7

and

un-

savings

we co^ld

were,

I submit that

huge

are

enormous wastes which

they
backing to

had

000 fewer truck

and

if

in

the

fense,

our

interest

should

stock

and

of

of

not

money

jeep drivers.
Army friends,
national

think

and

savings

without

propose "the

losing

Democratic Administration. I have
heen

looking

great

difficulty

in

of
expenditure,
specific wastes.

sources

the

sup-

isolating
isolating

One member of
gressman

the corporation

over

I

of

"this

that

the

long

to

your

head that

ahd

get

ciency at

a

I

suppose

some
am

it

will

be

said

of my Army friends

by

that I

now

sabotaging national defense and reflecting unduly upon

Congress, ConEngle of Michigan, did the honor of

a

sister service. Iam

Elects New Officer^

about

Even after the
3

—

Get

Women's Bond Club

tell, they

can

rate

after the personal in-

even

At

it—get

to

the
we

community.

meeting

of

th*

of incw YorL
New lull
,

TreasurerVMntoFarnhim
meXrs Margaret Ken..

-dy" Cathe^e ££? &

Benham and Olga Fluck.

we

class

all.

at

annual

.

on

that

or

one

Not

intent

are

business
soak

^
out of

idea

the

Women's Bond Club
°
^

v.

idea out of your head
party which : represent

intend

choulfT^be °wUline' to economize
should be willing to^co^omke

bcdder> 257 West Short Street,
T*16 business and commitments of

second

the

of

has with drawn from the partnership of Russell, Long & Burk-

remind

penalizing

port of the country.

has

the first

Ky. — Effective
May 1, 1951, J. R. Burkholder III

the partnership will be continued
thing I would like thereafter under
the
name
o;'
you of is that on the Russell, Long & Co.
The firm i:
whole, American business isn't a member of the Midwest Stoc 1
doing so badly even under this Exchange,
>phe

de¬

manpower

is

to remind you

l

It has enormously more

power

all,

1

Miiu^rv

Rurfcrpf
The Military Budget

military

we

can save

DrODor_

Russell, Long & Co.

LEXINGTON,

0f

taxes,

^ ^ ^ ^

'T'bp

.

are

in

be

a

It will be regressive- and

been overhead. A Marine division is profits. As far as
r®aRy subsidies, in the case of 16% larger in size than an Army are
running at a
«hips and airlines, for national division, but It has 25% more men
$48 billion a year.
defense in the past. I do not-be- carrying M-l rifles. It has twice
nppocot+u

not

Now

expend-

Army in order to get 23 men inregressive taxation, after
side a division, a combat unit,
a'unfajr taxation. That

cessive amount. These have

tnp

of

of

With Slayton & Co.

the

We

do

(special to the financial chronicle)

SHREVEPORT, La.
Jule D
McDowell is now with Slayton &
—

believe that this society of
>

is

fraternity,

a

better

able

to

sbouid

bear

a

haye

nQ

we

f
that

and
bear

the

ours

those

Company

With J. Arthur Warner

larger share of it,

(Special to The Financial Chronicle)

desire to penalize

PORTLAND, Maine—Daniel F:

any one classask

I

problem

Doyle has become associated with

to

you

over:

'

think

the need for

the need for

taxes

•»

515 Market Street

burden

.

So

»

Inc

more

this
more

J.

Arthur

Warner

&

Co.,

Inc.,

Clapp Building,

economy,

...

$300 million, heroic service in this connection not doing that, but I would like But' even wltft the eco o y, t
Joins Goodbody Staff
The
interesting thing is that some years back, and the present to make this proposal: This is need for more taxes. And, if so,
(Special to The Financial Chronicle)
this subsidy does not fall on first- Commander-in-Chief,
when
he semi-facetious, and I know you where the chief source of these
BOSTON, Mass.—Paul Smith is
ciass mail.
The three-cent letter was head of the Senatorial In- should never make a semi-facetaxes should be because what we
assoaated with Goodbody &
pays
its way. The subsidy is on vestigating Committee, probably tious proposal when the gentleCo., 50 State Street.
countrv
from $200 million to

^pcond-class

.

billions of dollars for this men of the press are
present, be^country.
cause
they
immediately
seize
(
unsealed advertising matThen Congress is always put in upon it and send it out in headter used by the direct mail boys, the position that if it makes a cut lines; but with the
understanding
and
fourth-class matter,
parcel in the military appropriations, it that this is off the record and will
'
nost
of which the chief users are lays
itself open to the charge not be held against me—that is

i

for

unless

the maximum of efximinimum of cost, and
Every time Set a maximum of firepower out
lion is the deficit on services per- Congress looks with a critical
eye of the men who go into the servformed. It is very likely that the on the Military
Establishment, it lceefficiency of the Post Office could
be increased. "Perhaps we could

>'

and ask-

and

inail, $75 million, of find out what made if
which could be
Congress used only

-$1.1 million, I hasten to say; offices for recruiting agencies and
so on.
But from $300 to $400 mil■

be

and

budget
thing
Up to date
enthusiasm in this direction

*—

„

we

would

newspapers

balance

services

mails should not be asked to pay—
which

to
forward

I urged them to reform and

well
«-

deficit

the.

had

we

some

could

competition
tween the Services.

in which I said

year ago

eliminate

to

its

pay

which the Post Office performs to
other governmental agencies and
for

if

which

had

come forward. I said this request
on
their part would do more to

liPVP

_v_

place
the

savings

Military Establishment

task, I believe the contracts with
the
railways for
carrying
the
mails give them a somewhat ex-

which last year operated at a deficit of $550 million, and which as*
I

the

if

It is the* subsidies

should say.

"

few figures to indicate

you a

wool, and silver.* If other expenditures, you find overt combat division, plus its affiliated
price of power, subsidies tucked away, subsidies units, is excessive; that the
Army

Lord

Nov/

modesty.
to give

in the

Furthermare,

that-into ' the

want

time

on

other

I

pub-

balanced budget in
eliminating
the deficit but I
thought their best

zmes.

undue

But

newspaper

a

rates

by'

the

states

value

char-

interesting

that I appreciated the

.

extend

field of sugar,
.money

rPnr0e0nfoA

them

the way

in

political
I

ctotno

ask

gest that if you want to get real

in
the

on

very

land

the

cer-

fists

down

have never been

(Laughter.)
of

their

group'of

a

irrigating hitting the sawdust trail
intensive mg for an increase in

if you get an
cultivation. As a matter

We

made

this

with

^that

use

always be

fashion

acterized

,

you say.

voluntarily

even

floor.

say-

what you do speaks so
I cannot hear what

coming

a

can

shaking

approving

that

contribution

sums

Marines

not
.

the

certainly

on

We

,

governmental

government

the

uneconomic to spend
which we are spending

short

Department
us,

1 happen to have had the honor
of having been a member of a

budgets be balanced, and second,

is

are

against

£ut Iam laylng doT the facts- competitive military force, someet these groups m,the comnlun" Umes referred to as the "Police
lty fe l-/upp0Sf. t5°!e ?h°
Fprge, o£ thJ? Navy'" (Applause)
Post vociferous, first, in demand- the Marine Corps. I can see a few

just priced

take note. I found that it
an

Defense

rect mal1 advertisers. I am maklng no Person.al attack upon you,

Bloommgton, with
we

States., Iowa, please

ing at $450

direct mail advertisers, and the
mail order houses are the chief

going

the

in

which

but

your

now

am

sneaking

nolicV

good

for

39

associates

I

everv'nne

Offenrl

get

you

capers

mail, namely, news-

saved

and magazines; third-class

...

need 1

;

s

■

is

y

8

eoualitv

q

y

of sacrifice or a greater degree of
equality of sacrifice.

With Waddell & Reed

That is the

-

the great

country

that it is neglecting national deNewspapers, magazines, fense. At times our friends in the

mail order houses of the




a

good

way

to have it get around

(laughter)—I would like to

sug-

oniy

way

you

nart;rillflrlv

p
expert

in

which

we

fight

Can

aeainst

.

an
,

(Special to The Financial Chronicle)

a

war,

KANSAS

enemv

\

so
0

^

u

face.

.

CITY, Mo.—Gerald R.
'

Srre?fTi3 & i? nSWT
?

propaganda as the one Waddell
more

.....

.

y

i1?!?//?

Reed, Inc., 1012 BaltiAvenue.

40

The Commercial and Financial Chronicle

(1976)

The

Indications Of Current
Business
AMERICAN

AND

IRON

Equivalent to—
ingots and castings

gallons each)

2,045,000

100.1

1,908,200

Stock of aluminum

UNITED

Apr. 28

——

—

6,154,000
116,236,000
19,876,000

28

28
28
28

6,143,750

6,041,400

5,013,950

6,265,000

6,381,000

20,060,000

20,393.000

18,038,000

2,778,000
8,172,000

2,328,000

2,029,000
6,531,000

OF

9,365,000

8,601,000

9,147,000

7,272,000

credit

28
28

137,474,000

138,891,000

142,433,000

128,655,000

15,635,000

14,698,000

13,285,000

12,825,000

43,859,000

42,957,000

43.170,000

35,899,000

37,282,000

658,448

CONSTRUCTION

ENGINEERING NEWS-

—

construction -———
Public construction
State and municipal

Private

Federal

——

$270,573,000
166,513,000
104,060,000

$284,691,000

$311,168,000

$250,591,000

129,041,000

188,188,000

155,650,000

122,930,000

140,944,000
109,647,000

70.210.000
33,850,000

3
3
3
3

62,031,000

69,562,000

79,032,000

93,619,000

53,418,000

30,615,000

3

,__T„

1 0,420,000

*10,630.000

725;000

-

137,300

10,190.000
539,000
138,500

730,000

——.Apr. 28

(tons)——

Pennsylvania anthracite
Beehive coke (tons)-.—

Apr. 28
Apr. 28

*129,700

11,325,000
993,000

293

281

258

credit

J—

-

bales

report

INSTITUTE:
kwb.)—

V, *V

Electric output (in 000

—.———May .5 I

—

DEPARTMENT
SERVE

STORE

of

6,735,844

seasonal

seasonal

163

162

195

of

tin

1

4.131c

4.131c

4.131c

'

1

$52.69

$52,69

$52.69

$43.00

$43.00

$43,00

22,943,238

45,065,983

44,986,292

42,980,306

13,185,000

13,019,000

11,460,000
5,982,000
5,478,000

24.200C

24.425c

24.425c

24.425c

142.000c

142.000c

150.500C

2

17.000c

'17.0000

17.000C

11.000c

2

flfi.SOOc

"■■19.800c

16.800C

17.500c

17.500c

17.500C

11.250c

24.200c,

24.200c

19.200C

8

97,58

97.85

1

99,46

111.62

115.43

115.63

115.63

114.46

114.46

114.85

110.88

110.70

111.44

106.21

107.44

All

manufacturing

108.16

108.16

109.24

111.44

111.62

112.19

7,034,000

13,997,000
7,324,000
6,673,000

U.

S.

DEPT.

*$63.76

$56.53

*68.10

59.74

58.47

*58.32

53.04

OF

———

goods

——————

*

8

115.24

"115.24

115.24

120.02

May
May
May
May

8

2.66

2.64

2.53

8

3.08

3.08

3.05

2.85

8

2.88

2.87

2.87

8

2.93

2.93

2.91

2.68

8

3.12

3.13

3.09

2^87

May

8

3.39

3.38

3.31

3.24

May

8

3.27

3.27

3.21

3.10

May

8

3.09

3.08

3.05

2.80

May

•—

A

—

Group—
Industrials Group ———————1

Public Utilities

8

2.89

2.89

39.7

40.2

*40.0

39.2

$1,566

2.30

May

———

*40.9
*41.6

40.1

,

1

Nondurable goods

120.84

Hourly earnings—
All manufacturing

119.41

$1,424

1.646

*1.637

1.480

Nondurable goods

GAS

*$1,559

Durable goods

AVERAGES:
——.

41.1
41.8

,

117.00

—

——

—

AH manufacturing
Durable goods

111.25

8

■;—.

Railroad Group

...

goods

Nondurable

1.458/

*1.458

1.353

249,700

264,000

24.200c

24.200c

19.6090

24.425c

24.425c

19.8768

—17.000c

17.000c-

11.7210

16.800c

16.800cJ

11.5210

90.160c

90.160c

72.6140'

APPLIANCES

:

—j—.

MANUFACTURERS

CIATION—Month

Aa

8,732,000

68.80

,

-—!—

goods

ESTIMATE

Durable

108.70

8

—

15,766,000

7,093,000

$64.36

—

goods

LABORrr-Month of March:

115.63

106.04

8

——-——

.

Aaa

330.0

Earnings-^

116.02

111.62

8

——ii———*•—————————— ———

Average corporate

139.0

423.7

8,864,000

_

■

102.68

112.19

8

Public Utilities. Group

.

158.9

429.4

15,957,000

—

Hours—

8

MOODY'S BOND YIELD DAILY
U. S. Government Bonds-

160.9

indexes-

manufacturing

AVERAGE
t

8

—,

7,257,000

5,762,000

FACTORY EARNINGS AND HOURS—WEEKLY

AVERAGES:

—..—-

Industrials- Group

7,371,000

5,814,000

—~

—

turing industries-

10.800c

2

.May
.May

————--—- —■ -

corporate——————————

Railroad Group

workers)

—*

goods

All manufacturing

76.500c

Government Bonds——-—

—

SERIES—Month of

(production

All manufacturing
*—j.
Estimated number of employees in manufac¬

19.425c

2

.May

Aaa

Baa

customers—month of

PAYROLLS—U, S. DEPT.

manufacturing

:

U. S.

consumers-

omitted)

425,325,400

$31.08

.May. 2
.May 2

(New

Average

2o5

25,640,329

Nondurable

$46.38

1

.May

MOODY'S BOND PRICES DAILY

ultimate

(000's

ultimate

Nondurable

at-—

York) at—.
Lead (St. Louis) at—
—
Zinc (fast St. Louiti) at—

Lead

292

284

February:

3.837c

.May

at—:———.—
York)

290

287

458,072,100

199

.May

——

refinery at—
(New

306

„

Employment

Electrolytic copper—
Domestic

Average-—109)

26,689,735

5,871,684

.May

-

"

Export refinery

15,908,591

INSTITUTE:

sales to

Jan.

Durable

Straits

9,907,913

474,794.000

J. QUOTATIONS):

PRICES (E. & M.

METAL

'

Payroll indexes— '

—

Pig iron (per gross ton)
Scrap steel (per gross ton)—

1,045
1,005

Number of ultimate customers at Jan. 31—

235

PRICES:

Finished steel (per lb.)

3,211

1,082

—_

All

IRON AGE COMPOSITE

5,261

1,369

(FEDERAL RE¬

variation™.—

Durable goods

& BRAD—
—-May 3

—

6,461
4,010

final

adjustment

ELECTRIC

Month

All

FAILURES (COMMERCIAL AND INDUSTRIAL)—DUN
STREET INC. ————-————

4,743

April:

Kilowatt-hour

128,300

SALES

SYSTEM—(1935-39

Month

EDISON

linters)

of

;

OF LABOR—REVISED

6,673,505

6,559,700

2,979

5,551

(DEPT. OF COMMERCE):

(exclusive

—

EMPLOYMENT AND

EDISON ELECTRIC

3,355

3,534

1,084

credit

January

RESERVE SYS¬
—Apr. 28

6.334

3,990

1,373

„

Revenue from

DEPARTMENT STORE SALES INDEX—FEDERAL
TEM—1933-39 AVERAGE=100——-—

11,077

7,524

3,938

—

credit

Without

—

$16,338

13,075

3,437

!
—

—

Adjusted for

COAL OUTPUT (U. S. BUREAU OF MINES):
Bituminous coal and lignite (tons)———

$19,536

1

„

Running
——

$19,375
12,930

|

RE¬

short-term

credit
—

COTTON GINNING

,

——————May
——-———
—May
—:
.—-—
May
—————
Msv
————
—
——
May

S. construction

U.

9,130

3,942

FEDERAL

Charge accounts
Single payment loaps

record•

Total

6,590

March 31:

Other

Service

CIVIL ENGINEERING

11,623

7,379

THE

of

Automobile

745,295

703,303

58.747

14,445

BRADSTREET,

A

Estimated

as

credit

Noninstalment

755,435

698,070

62,740

5,601
6,395

OF
—

millions

consumer

Sale

39,260,000

809,520

Ago

IN THE

March.

SYSTEM

in

Instalment credit

36,686,000

36,080,COO

of

GOVERNORS

SERVE

Total

28

Year

Month

CONSUMER CREDIT OUTSTANDING—BOARD

8,747,000

28

Previous

7,649

STATES—DUN

INC.—Month

2,698,000
8,061,000

824,662
702,581

of that date:

70,022
12,048

(short tons) end of Mar.

5,314,000

28

Apr. 28
cars)—-Apr. 28

freight loaded (number of cars)-—,—.—
freight received from connections (number of

are as

(BUREAU OF MINES):

Production of primary aluminum in the U. S.
(in short tons) Month of March

ASSOCIATION OF AMERICAN RAILROADS:
Revenue

of quotations,

cases

Month

ALUMINUM

Loan

Revenue

in

or,

either for the

are

Latest

(bbls. of 42

average

daily average

—

102.3

2,079,000

that date,

BUSINESS INCORPORATIONS (NEW)

,

——

to stills

runs

Ago

2.073,000

—May 13

(bbls.)—
~
—-Apr.
Gasoline output (bbls.)———-———-——■.——-———
—Apr.
Kerosene output (bbls.)
—.—_———————-Apr,
Gas, oil, and distillate fuel oil output (bbls.)
Apr.
Residual fuel oil output (bbls.)—
Apr.
Stocks at refineries, at bulk terminals, in transit and in pipe lines—•
Finished and unfinished gasoline (bbls.) at
-—Apr.
Kerosene
(bbls.)
at_,
—-—-—Apr.
Gas, oil, and distillate fuel oil (bbls.) at
Apr.
Residual fuel oil (bbls;) at—
—
.—
Apr.
Crude

Week
104.0

on

Year

Ago

Previous

Month

103.7

capacity)——-—May 13

AMERICAN PETROLEUM INSTITUTE:
Crude oil and condensate output —daily

month ended

Week

(net tons)—!

Steel

or

production and other figures for the

cover

Dates shown in first column

month available.

or

Latest

INSTITUTE:

STEEL

steel operations (percent of

Indicated

week

Activity

<

following statistical tabulations

latest week

.Thursday; May 10, 1951;

'

2.89

METAL PRICES

2.61

ASSO¬

of March:

Domestic gas range shipments

.

—

(E. & M. J.

(units)

303,000

QUOTATIONS)—<

Average for month of April:
Copper (per pound)—
Electrolytic domestic refinery
Electrolytic export refinery——
Lead (per pound)—
Common, New York™.
Gommon, St. Louis™

2.65

Silver and Sterling Exchange—•

MOODY'S

COMMODITY INDEX-——

—May

8

510.2

515.4

.Apr. 28

202,342

521.3

Silyer, New York (per ounce)—'

377.2

257,563
236,532

•

200,061
208,056

Silver, London (pence per ounce)—78.500A
Sterling Exchsrge (Check)
$2.80000
(per pound)—-East St. Lotiis_.
17.500c
Tin (per pound)—

78:500d;:

63.409d

-

NATIONAL PAPERBOARD ASSOCIATION:
Orders received

(tons)

Production (tons)

——

.Apr. 28

248,326

225,583
256,538

—

.Apr. 28

105

107

98

——.—

.Apr. 28

646,878

694,218

704,936

343,709

—

Percentage of activity—
Unfilled orders (tons) at

—

—:

Zinc

92

—

—

New

OIL, PAINT AND DRUG
AVERAGE—100

REPORTER PRICE INDEX,

——

-1926-36

May

—

4

153.9

154.5

154.3*1

120.6

SSNew York, 99^ min._^
—,
Gold (per ounce U. 3. price).—
—.
Quicksilver (per flask of 76 pounds)
UAntimony (per pound) (E. & M. J.)__—
Antimony (per pound) bulk, Laredo*..
—

.

(per pound), in cases, Laredo.—.

Antimony
STOCK TRANSACTIONS FOR THE ODD-LOT ACCOUNT OF ODDLOT DEALERS AND
SPECIALISTS ON THE N. Y. STOCK
EXCHANGE—SECURITIES

.

EXCHANGE

Antimony (per pound), Chinese Spot:
—
Platinum, refined (per ounce)
(per pound)
...

•

COMMISSION:

(Cadmium
fCadmium

Odd-lot sales by dealers (customers'purchases)—

Number of orders———

.

Dollar value

—

Odd-lot purchases by dealers (customers' sales)—.
Number of orders—Customers' total sales
Customers'

short

sales

Customers'

other

sales

-

-1

Customers'

other

—

—

sales

21

-Apr. 21
—Apr. 21
Apr. 21

Dollar value

—.Apr!

—

Round-lot sales by dealers—
Number of shares—Total sales
Short

.—Apr. 21
...Apr. 21

Apr!

1—
»

sales——

21

Apr 21

———

sales

^

—

Other sales

-Apr!

21

-Apr. 21

Round-lot purchases by dealersNumber of shares—
^

—

WHOLESALE PRICES NEW SERIES

U.

30,496
911,732
$40,480,963

Apr. 21

—

27,239

128,718
398

317

28,320

20,420

44,098

806,061

564,133
12,087

1,307,897

279

749,387.
7,066
742,221
$31,433,463

792,092

552,046

$32,976,365

$23,049,104

223,650^

227,210

155,870

447,650

223~650

227~210-

155~870

Month

4~4~7~650

328,800

279,640

183.6

—-—■'

183.3

May

201.1

202.4

201.8

188.1

189.9

———.—ZZZ—IIII—

188.5

RYS.

269.9

273.8

269.0

205.8

products

188.0

materials—

Lumber
v

Chemicals and! allied products

'

*Revised. tNot available.




^Includes 466,000 barrels of

—

———May
—May
-May
-May
May

foreiga"crud«

186.1

274.4

146.9

l(

183.6

*183.9

184.5

135.7

1

138.3

138.3

139.0

131.8

l

189.6

189.6

189.8

169.1

195.9

l*
runs,

227.5

227.5

358.9

143.6

144.0

145.3

$2.15000

$2.10000/

$1.80000

Nominal
$66,000

19.000c

17.1920

24.500c::

20.500O

50.500c

40.0000

:i
116.6

18,708,000

15,201.000 /,
11,294,000"

14,669,000

22,129,000
76%

23,216,000
66%i

14,301,000

Commission)

—.

$113,297,938

for

fixed

charges——

,

;

—

income- taxes

—

59,483,307

97,327,503
4,505,435

deductions from income

deductions

Federal
,

$77,690,910
19,636,593

available

Net income

229.2

172.1

358.9

$2.80000-

17,692,000'

Depreciation (way it structures & equip,).—
Amortization of defense projects

158.7

276.8

227.5

$2 07500

23,143,000
—84%

income

Other

*171.7

358.9

$2.00000

$2.675001

$90,000

tf. S. CLASS I

Commerce

162.9

171.6

1

Nominal}

—

Income after fixed charges

1

—

and lighting materials
Metals and metal products.
Fuel

Building

(Interstate

154.7

2';9.1

Textile

—_________

railway operating income—

Other

172.5

May

All^ commodities other than farm and foods—

25.000O

(BUREAU OF MINES)—

Total income

188.6

27.780c*
24.5000

42^00c;

—Month of January:

329,450

183.4

—

*

45;280c "

42.000c>

$2.55000..

50.500c

Capacity used

Income
—

$35,000
$70,346

March:

(barrels)

Miscellaneous

Farm products

;

SELECTED INCOME ITEMS OF

S. DEPT. OF LABOR—

All commodities

45.298c-

42.000c
42.500c'

76.4950

$35,000-

$217,333;

Nominal

Shipment from mills (barrels)———
Stocks (at end of month—barrels)

1926=100:

^Livestock

of

Production

10,104

Net

362,890

144.808c-

$35,000.

$90,000.
$2.55000
$2.67500

—

PORTLAND CEMENT

1,297,793
$44,267,867

1

144.735c
$215,600

44,377

202

27,037

13,969

77.4950

(per pound)—
—$2.80000
Cobalt; 9759 —-r-——-—$2.10000
Aluminum,* 99% pjus, ingot (per pound)
19.000c
Magnesium, ingot (per pound).—
24.500c

38.747

1,232,325
$45,303,898

20,737

11.9730

145.808Cr

SCadmium

23,117
662,756

$27,596,790

;

••Nickel—.
—

—

Number of shares—Total sales

short

29,067
856,153

$38,528,573

——

—

—

Customers'

Apr. 21
-Apr. 21

——1—Apr. 21

——

—_—,

Number of shares—

,

(per pound)

$2.79750

17.500c

145.735c

Straits—i

York

$2.80000-:

92,822,068
57,960,725
3,035,152

167,298,324
131,341,786

54,925,573
36,441,925
1,898,759
57,151,311

$32,795,905

172,781,245

120,059,636

,

5,482,921

11,282,150

36,965,360
2„797;564 *

20,184!546
52,980451

3,684,067
49,296,584

15,732,326
3,230,886

12,501,440
34,790,293
1,383.490

104,418,311

16,754,467

10,055,982
6,764.695

22.556,246
7,434,837

5,504,169
4,046,433

2.66

4.65

1.47

Dividend appropriations:
stock

On

common

On

preferred stock

——

Ratio of income to fixed charges

—-

•Revised figure.
(Based on the producers' quotation. (Based on the average of
the producers' and platers' quotations. 5Based on platers' quotations.
(Domestic, fiva
tons or more but less than carload lot packed in cases, f.o.b. New York. **F.O.B. Port

.Volume 173

Number 5010

Continued

from

.

.

.

The Commercial and Financial Chronicle

allow

to

4

page

.■? V.

element

need

some

earn

mail,

Transportation
first-class

more

passenger

traffic than the railroads.

I

the

evidence

that in

not

too

is plain also

many

all long-haul

years

travel will

passenger

think

place

take

As

interesting sidelight, in
1950 there were only two rail¬
roads—the Pennsylvania and the
an

New

York

Central

passenger

the

which

—

had

exceeding

revenues

$88.2 million gross passenger
of TWA. >In fact, TWA's

revenues

domestic passenger revenues alone

almost

were

$61 million

com¬

as

begun to taper off just when the

the

New

which

Haven,

the

was

Reconversion Problems Over

But Jet

return briefly to the

us

financial

unnappy

period

cent airlines memory.

ended'in

had

for

As the

the airlines.

held

been

but

war,

re¬
war

1945, great expectations

held

were

of

back

the

during

the

everyone,

They

manage¬

pearing

volume,

in

of

some

even

financial

the

circles,

experts

expected

that traffic would boom.

ap¬

that

so

with

and

the

prices high,
employees as

new

yet untrained, the airlines

began
to
lose money, and lost it fast.
Meanwhile,
traffic
not
only

stopped growing, but in 1948 it de¬
clined
slightly.
Some predicted
that

plateau

permanent

a

had

been reached.

The airlines had begun to

their

become

trim

while

a

programs

economy

effective,

especially

1948.

fic

Meanwhile,

well in

strenuous

carriers

1949

ended

the black.
*

years

unfortunate

were

in

tim¬

because this was a period
when capital requirements were
difficult reconversion very heavy.. The industry was al¬
Half of their equip¬ most entirely financed by equitying,

-Airline managements faced un-

tUsually
problems.
had

ment

Pearl

been,

conscripted after

.Harbor.

larger and

for

efficient

more

had

ment

Orders

been

new,

equip¬

diverted

the

to

military, and the small nucleus of
highly
trained
employees
had
been scattered to battle fronts all
the

over

until

capital
War

II,

share

of

the

and
the

of

end

probably

their

exacting, jobs;

of

mands

labor

the

unions

de¬

must

be

settled; and new techniques to fit
the expanded scope and tempo of
traffic must be devised. Besides,
the

capital

finance

to

expansion

must be found. A tremendous log¬

jam

traffic

of

logged by the
to

be

which

was

screaming

war was

accommodated

back-

—

and

the

devil take the hindmost!

cles,

its

and
to

seemed

be

be

would

primary
that

concern

the

subjected

airlines

to

the

im¬

moral effects of undue prosperity.
Based on the erroneous assump¬
that

tion

unnatural wartime load

factors would be

a

permanent fix¬

multiplied

it

ture,

competition,

countenanced the establishment of

countless

so-called

"non-sched-

tiled" airlines, slashed mail rates,
and encouraged the reduction of

For

45

other Big Four carriers to

cents

was

ton-mile.

per

based

on a

circumstances

per¬

mitted.

per

some

and thus

year,

will recall that the un¬
could not dispose im¬
mediately of ail the securities
ican,

you

were

The

issued

result

1946.

in

the
equipment
was
available in quantity to the air¬
line industry as a whole, it had
time

postwar

be

to

of

that,;, by

was

financed
airlines

trunk

debt

the

1950,

30,

Sept.

through debt.
had

of

domestic
long-

total

a

million,

$138

As

Department tendered to TWA less
than half of this volume
were

$3 million

Board's

forecasts.

People just did not write
letters

as

of mail,

as many

the Board's staff had

ticipated—at

least

they

did

an¬

not

send them by air.
Neither the Board

line

managements

tremendous
and

the

foresaw

inflation

in

air¬
the

wages

prices, the strikes and dislo¬

and surplus
million:—over a one-third

against capital stock
of $245

quite

bad

as

This is not

total.

ratio of debt to

it0 might

as

because most of the

tel mortgages or

seem,

debt is chat¬

other obligations

ex¬

Chairman

I

do

this

offer

not

any

you

but leave
food for thought.

as

Second:
are

Now that

airlines

some

on

compensatory mail rates,
how long will first-class mail con¬

rail?

siasts

have
mail

class

would be

airline enthu¬

many

that

urged

first-

all

by air where time

go

gained.

The

of

purpose

the proposal was to encourage air

transportation.
railroads

have argued

mail

recent

over
rates

Moreover,

ments.

years,

divert

because it

fiscal

In

1950,

Office

Post

trucks,
cheaper.
the

cost

not concentrated on a small hierarchy
Perhaps the option price in the case
listed companies should be 100% of the stock's market price.
employees,

narrowed to

has

short-haul

,

among

economy-

General

to

was

72.6

was
on

of all

mail

including

Also, the option and liberal salary bonus arrangements
limited to an either-or basis, instead of maintaining both

to

incentive rewards to a single

the

for

a

of

Field

equivalent
Offices
But

the

—•

Railway

about

was

at

Offices

82.5

order

do this

to

successfully,

it will

be

necessary

be

sustained

inflation

as

again sets in will depend

once

upon

the

of the three groups

whom I

men¬

earlier.

and

of

the

decline

first-class
as

a

character

I would like to

major revolution in the
of

airline

rates

the

in the last three years. In

beginning,

all

the

airlines—

both domestic and international—

primarily carriers of mail.
Passenger^, express and freight
were
by-products.
As the com¬
mercial
share

of

revenues

the costs

increased,
which

had

the
to

Continued from page

Ac¬

for the

be furthered

could

device

8

mail

by

air

and

save

against rail transporta¬

add

parenthetically

der cutting the air mail rates some

which, jf sustained, would

actually

make

mail field
bution

and

rate

the

combined

air

post office distri¬

lower

than

the

rail

rate is.

think

which

that
of

air

is

the

a

striking illus¬
transformation

transportation has

dergone in the last few

un¬

years.

Charles Rekerdres Is With
Ira

sembly decided not to make any
substantial
changes in the dis¬

However, claim ex¬
should prove favorable
winter the unions will

ability law.

perience
next

and

bring pressure in an election year
to
increase
weekly
benefits,

length of disability benefits
The whole area of

between

ernment

the

will

change
structure
of

the
our

lished

Rhode

the

and

which

Law

controlled

spired.

munism

plans;

pension

Island

Disability

completely State
and
Communist
in¬
is

"
of

worldwide

of gov¬
private en¬

well-estab¬

such as the NewDisability Law—

ones

Sickness

York

plans:

of

types

company

socialistic

battleground

and

fits." However, the

all

are

private ones such as

Much

advocates

control

There

"fringe bene¬

terprise. While this country is at
war
it is easy to minimize the
effect of increases in disability in¬
surance
and other "fringe bene¬

from

benefit

the

a

Com¬
will be lost if, during this
victory

over

extension of
other
inspired laws we drift closer

emergency,

to

due

disability, social security and
State
to

such as Eng¬
unpleasantly experienc¬

state socialism

a

land is so

social planners ing. The trend toward "Stateism"
entire
social should be and can be successfully
country by a opposed by the various segments

of increased benefits and of the business world. Instead of
high taxes. The costs of increased
going on the defensive, a united
"fringe benefits" will not go back
after the emergency; the so-called effort should be made to acquaint

program

"social
and

Haupt in Dallas

DALLAS, Tex.—Ira Haupt &
Co., members of the New York
Stock
Exchange, announce that
Charles Rekerdres has joined their
organization and will be associated
with Ernest S. Harrington at their
Dallas
office,
Cotton
Exchange
Building.

and to

hospitalization coverage.

add

fits" will be a major

before yesterday's show-cause or¬

more,

Fringe Benefits Aid Inflation

own

economics

which has taken place almost un¬

noticed

corporate

excellent

this

cents.

vblume.

with

our

should

tration

Before closing,
mention

the lay
fruition

benefit of all concerned.

analysis, the
Post Office Department right to¬
day could send all the long-haul

I

perform invaluable constructive

promoting intelligent understanding between
management- Thus the fullest

in

service

Post

Big Four air mail

cording to

I

.where mutual fund managers can

the

that these figures were arrived at

refinancing

Fund Managers

such details, as well as intelligent
consideiation of the overall technique, constitutes another place
of

evaluation

"step" rates—they begin high,

money

Impending Refinancing
In

media ox

individual shareholder and

equipment, and is being
tion.
off rapidly through de¬
I predict that it will not be long
preciation charges. At the same
before/this actually happens. The
time, I think most carrier man¬
interesting thing is that it will
agements would prefer a lower
not be done to help the airlines
debt
ratio, and with continued
or
to
speed up the mails—but
improved earnings some refinanc¬
simply to save money for the tax¬
ing might well be expected.
against

might be

individual.

Another Opportunity for

fair

The

Air

and

distribution
Post

of

—

the

cost

average

Big Four airlines,

transportation

expenses

Mail

The

the

and

few officers.

a

simply

Department

cents.

of

one

submitting

Boards of Directors have been

many

This, of course, is not to imply that every company's in¬
centive technique is perfect, either in regard to the option feature
or
in the overall arrangement.
The privilege should be spread
u

to

he

nothing surreptitious about the plans; they are instituted
scrutiny, via the press as well as detailed proxy state¬

there is

still in¬

are

an

Postmaster

railroads

if

only

plans for the approval of their shareholders even though the laws
of their respective States make that unnecessary.
In any event,

declined

have

increased, and
creasing. Recently,

from

treatment

under full

have

begun

^

further safeguard,

a

gain.

too

sharply, while railway mail rates

minded

has

Minnesota

the law insures the employee special
remains in the employment of the
company for a substantial period after the time when he acquires
the stock and actually invests in the stock of the company for
a
considerable period.
The last excludes from the privilege
"controlling persons" owning 10% or more of the company's
voting stock at the time the option is granted; which prevents
the use of stock "options by employers seeking merely to convert
the earnings of a corporation from ordinary income into a capital

able short-haul.

airline

95-100%.
As

this

government

the

cost

for

tax

Cheaper Air Mail Rates
For years,

Committee.

Manifestations of Good Practice

to
with

it

Executive

the

1949, had a below-price stock option plan for
under which 2,728 employees have been partici¬

plans thus far submitted many facets of good practice,
either legislatively prescribed or voluntary, are uniformly fol¬
lowed. Thus, the total amount of stock to be set aside is specified
(1,300,000 shares, or 5%, in the case of Steel); the option is not
transferable; the running time is specified usually at 5-10 years;
and although the law prescribes the option price to be at least
85% of the fair market value of the stock, most of the plans call

answer

question,

of

November.

In the

operates without subsidy?

written

cations, which would take place be borne by the Post Office de¬
immediately after the war. Traf- creased, but it was still necessary




the

non-directors,
pating-

and sub¬

pay

the government be jus¬
subsidizing one airline to
with
another
which
compete

are

were

nor

by

will

as

tioned

the

mail

segregated, to what

which

Actually, in

than

Once

are

by rail, including both transpor¬
tation and distribution in transit,

moderation shown in the demands

less

also

ton-mile of first-class mail moved

$6,767,000 an¬
nually in domestic mail revenues.
1947 the Post Office

officers of Minnesota Mining and Manufacturing,
chip growth company, with regular ex-bonus remu¬
ranging from onlv $22,000 to a top of $40,000, own com¬
mon stock ranging up to 1,036,000 shares
(or 13% cf the outstand¬
ing stock) by the Chairman of the Board, and 432,668 (over 5%)

ques¬

derwriters

that airline earnings be sustained.

revenues

First:

sidy

the

bluest

since

Meanwhile,

The extent to which earnings can

would receive

the

new
development
gives rise to two important

of

between

neration

capital needed
and reconversion

This rate

miles of mail

Thus

that

future.

This

The

forecast that TWA

would carry about 16 million ton-

and

it

new

had

source

example, in 1945 the Board

the

coming to hand revealing the personal
directors, seem to indicate many instances of
substantial director ownership, low remu¬
neration, and all-around management excellency.

tion will be established within the
near

statements

correlation

separa¬

payer.

reduced TWA's mail rate and that
of

and
a

good

Proxy

and

established,

the

tieup of ownership as the surest guarantee
practice (as in arriving at decisions regarding dividend

stockholdings

pay

segregated

be

mail

likely that such

seems

would

fares.

passenger

of

discloses

policy).

much, and it would deprive the
for expansion
railroads of long-haul mail while
would have been raised from this leaving them with the less desir¬

term

Meanwhile, the regulatory au¬
thority put on its rosiest specta¬

subsidy

large

a

Meanwhile, the
The market for airline securi¬
development
of
modern,
four- ties was good in the winter of
motored land type airplanes, as 1945 and
early 1946. How much
opposed to the more cumbersome new equity
securities* it could
flying boats, had made over-ocean have absorbed is a matter for
air transportation on a large scale
speculation.
Unfortunately, most
possible for the first time. New of the larger carriers, with the
equipment
must
be
obtained exception of American, missed the
quickly; thousands of new em¬ market. Even in the case of Amer¬
to

and

separately

World

world.

ployees must be hired and trained

t

nature

class.

same

domestic

tinue to go by

*

*

postwar

particularly

that

sources

The losses of the airlines in the

immediate

Depart¬
service they

This development has given rise
a
demand from Congressional

tent

resumption of rising traf¬

and most

company's interest,' for they are given the status of serving their
own
property.
In many instances, in the
case of managerial
employees as well as outside directors, recognition of human

Post Office

tified in

selling efforts, promotional fares,
improved
service
brought
a

to

to

and

about

economically
They
are
being

will be in the

as

against
the
continued
rise
in
prices. Most of them had reached
break-even or better by the end
of

stimulates to the maximum possible extent their devotion to the

only for the
perform in transporting the mail.
Probably other domestic airlines
soon

5

page

air

become

the

from

Observations...

carry

domestic

tions:

ship in 1946, but it took
for

the

ment

load

With wage rates and

the Civil Aeronautics
Board, the public, the employees,
from

was

decline sharply.

began to

ments,

and

equipment

postwar

new

pared with almost $47 million for
third highest passenger carrier in
the United States, in the railroads.

Continued

return.

a

lines, which

of

have

paid by

rapidly during 1946,
its rate of growth had

but bj- 1947

80%

self-sufficient.

fic increased

factors

by air.

subsidy
of each

In;the past three years, the Big
Four domestic
almost

port

or

pay

mail

carrier for it to

The Outlook for

in- the

(1977) * 41

so

As
to

gains" will be ever present
will their added cost.

much
enterprise
and combat inflation at the

employers you can do

preserve

system
some

of

our

free

time by opposing

"fringe

expansion

benefits"
especially
by the State and

those controlled
over

The

which you have no
whole

fits" is

a

area

control.

of "fringe

bene¬

broad and confusing one.

the

public with the facts.

gram

of education and

ment concerning
creases

in

the fact that in¬

"fringe

benefits"

es¬

government mo¬
insistance, spearheads

under

pecially
nopoly

A pro¬

enlighten¬

or

the

drift

and

the

toward
lowering

day American

state

socialism,

of the present

standard of living.

42

The Commercial and Financial

(1978)

Chronicle

*

i:

Securities Now in
Air Lifts lnc.f Washington,

D. C.
30,000 "senior shares"
(par $1). Price — $10 per share. Underwriter — None.
Proceeds
For equipment and administrative costs to
manufacture aircraft. Office—1835 K St., N. W., Wash¬
ington 6, D. C.
April 23

(letter of notification)

Aihambra

Gold

Mines

Corp., Hollywood, Calif.
Nov. 1 filed 80,000 shares of common stock. Price—At
par ($1 per share). Underwriter—None. Proceeds—For
further development of mine and for working capital.
American

Dairy Products Corp., N. Y.
(5/14-19)

Feb. 16 filed 300,000 shares of preferred stock (par $4)
and 390,000 shares of common stock (par 10 cents) to be
offered in units of one share of preferred and 1.3 shares
of

stock.

Price—$5 per unit. Underwriters—
Emanuel, Deetjen & Co. and Barrett Herrick & Co., Inc.,
common

both of New York.

Proceeds—To acquire plant, to pay

indebtedness and for
•

working capital.

Animas

Minerals, Inc., Silverton, Colo.
April 26 (letter of notification) 5,000 shares of common
stock (no par). Price — $30 per share.
Underwriter—
None. Proceeds—For development of mining and milling
of tungsten, lead, zinc, etc.

*

Arizona Edison Co. (5/28-6/2)
April 24 filed 40,000 shares of common stock (par $5)«
Price—To be supplied by amendment.
UnderwritersWilliam R. Staats Co., Los Angeles, Calif.; A. C. Allyn
& Co., Inc., Chicago, 111.; and Refsnes, Ely, Beck & Co.,
Phoenix, Ariz. Proceeds—To repay bank loans and for
new

construction.

being offered to
on

basis of

common

one

Arwood

April

18

stockholders of record April

share for each four shares held, wjth

tal.

March 29 filed

Purpose—To

(80%)

13.

less than 429,600
stock. Statement ef¬

of notification)

4,000 shares of 5%%
preferred stock being of¬
fered to stockholders and public up to July 1, 1951.
Price—At par
($25 per share).
Underwriter—NoneProceeds—For working capital. Office—70 Washington
Street, Brooklyn 1, N. Y.
.

Athens, Ohio

April 24 (letter of notification) $175,000 of 4%% first
mtge. bonds, due April 15, 1962 (in denominations of $1,000 and $500 each). Underwriter—The Ohio Company,
Columbus, O. Proceeds—For working capital.
Atlantic City Electric Co.
April 15 filed 117,200 shares of common stock (par $10)
being offered to common stockholders of record May 8

•

—

Canada

Stores, Inc., Scranton, Pa.
notification) 9,877 shares of common
Price—$6 per share. Underwriter— *
York, -proceeds—To Dean H, Phipps, .
Chairman of the board, who is the selling stockholder. -

Proceeds—To take up option and develop prop¬

middle

the

at rate of

one

share for each

10

shares

held; rights to
expire May 28. Unsubscribed shares to be offered up to
May 25, 1951, to employees and to stockholders on an
oversubscription privilege. Price—$19 per share/ Un¬
derwriters—Union Securities Corp. and Smith, Barney
& Co.,«New York. Proceeds—For construction program.
Brown Co., Berlin, N. H.
Jan. 25 filed 144,151 shares of $5 cumulative convertible
preference stock (no par) and 144,151 shares Of $3 cumu¬
lative second preference stock (no
par), together with
voting trust certificates representing the same, offered
in exchange for 144,151 shares of $6 cumulative con5: vertible preferred stock on basis of one share of each
class of preference stock for each share of $6 preferred

stock; offer extended from April 30 to May 23. George*
son
& Co. soliciting exchanges.
Statement effective
Feb. 21.

-

Burlington Mills Corp.
*

of

Peabody

&

Co.,

New

York.

^Proceeds—For additions and improvements to plant

and

/equipment. Offering date postponed.
*

Canam Copper
Canada

Chicago Magazine Corp., Chicago, III.
April 30 (letter of notification) 2,850 shares of common
stock, of which 2,500 shares will be issued to Maurice
English in payment of ideas and property, and 350 shares

per

(6/1)
(
stock (par $1)..
Underwriter—
Paine, Webber, Jackson & Curtis. Proceeds — To retire .
$1,100,000 of 3%% serial notes issued April 1, 1949, and
•

j

April 20 filed 200,000 shares of capital stock. Price—At
par ($1 per share). Underwriter—Harry M. Forst. Pro-

;

ceeds—For exploration and development work.
Cane Creek Oil Co., Moab, Grand
County, Utah
April 23 (letter of notification) 150,000 shares of common
stock (par 10 cents), of which 100,000 shares are to be
publicly offered for account of the company at $1 per
share, and 50,000 shares are to be offered for account

Cigar Corp., New York '

ment.

Underwriter—Eastman, Dillon & Co., New York.
—

To prepay short-term

working capital.

bdnk loans and for
Offering date postponed;

Consolidated Natural Gas Co. (5/14)
April 4 filed $50,000,000 of sinking fund, debentures due
1976.

Underwriters

bidding.

—

To be determined by

Probable bidders

competitive

Halsey, Stuart & Co.; White,

Weld & Co. and Paine, Webber, Jackson & Curtis
(joint¬
ly); Dillon, Read & Co. Inc., Morgan Stanley & Co. and
First Boston Corp. (jointly). Proceeds—To purchase se¬
curities of operating companies, which will use the funds

for their construction program. Bids—To be received at
office of company, 30 Rockefeller
Plaza, New York 20,
N.

Y.,

up

to 11:30

a.m.

(EDST)

on

May 14.

Statement

Consolidated Textile Co., Inc., New York
220,000 shares of capital stock (par 10 cents),
offered in exchange for 200,000 shares of common stock
Dec. 27 filed

of

Bates

Manufacturing (Jo. (Consolidated now owns
51,400 shares, or approximately 13% of the 391,500 out¬
standing Bates shares) on basis of 11 shares of Consoli¬
dated for

10

shares of Bates stock.

expire June 29.
Continental
March 5

,

Boston

Philadelphia

Pittsburgh

San Francisco

Private Wires




to all

offices

Chicago

Cleveland

Exchange offer to
Statement effective March 2. -

Car-Nar-Var Corp., Brazil,

Ind.

(letter of notification) 150,000 shares of com¬
(voting) stock (par $1), Price—$2 per share. Under¬
writers—Sills, Fairman & Harris, Inc., Chicago, and
Gearhart, Kinnard & Otis, Inc., New York. Proceeds—
For working capital and general corporate
purposes.
Temporarily deferred.
mon

,

-

.

.

(City of), Province of Alberta,
(5/16K

Edmonton

Canada
<

April 27 filed $10,468,000 of debentures, of which $1,- ■'
001,000 are due on May 1, 1961; $3,218,000 on May 1, t
1971; $799,000 on May 1*, 1975; and $5,450,000 on May 1,
1981. Price—To be supplied by amendment. Underwriters
First"

—The

Boston

Corp.;

The

Dominion

;
-

Securities

& Co.; Harriman Ripley & Co.,'
Inc.; Wood, Gundy & Co. Inc.; A. E. Ames & Co., Inc.; *
and McLeod, Young, Weir Inc. Proceeds—For purchase
of buses for a transit system, to repay bank, loans/ and)
tfor new construction.
i c
Corp.; Smith, Barney

Edmonton District No. 7

of),

(The Board of J

Province of, Alberta, Canada £

(5/16)<

•

Consolidated

,

Duggan's Distillers Products Corp.
Oct. 27 (letter of notification) 340,000 shares of com-,
mon stock (par 10c).
Price—75 cents per share. Under- writer—Olds & Co., Jersey City, N. J. Proceeds—To pay ;
balance of purchase price for building ($20,000) and for f
working capital.
"
■

Trustees

effective April 30.

New York

Dewey & Almy Chemical Co.

for working capital.

•
Cincinnati (O.) Economy Drug Co.
April 27 (letter of notification) 10,000 shares of common
stock (par $10).
Price—$15 per share. Underwriter—
None. Proceeds—To reduce bank loans and for working
capital. Office—209 East Court St., Cincinnati 2, Ohio.

March 9 filed 50,000 shares of cumulative preferred stock,
series of 1951 (no par). Price—To be supplied by amend¬

Proceeds—To develop

Underwriter—None.

Office—Bus Terminal Bldg., Spokane, Wash.

May 8 filed 200,000 shares of common
Price—To be supplied by amendment.

1165, Yuma, Ariz.

Commercial Shearing & Stamping Co.
April 19 (letter of notification) 1,000 shares of common
stock (par $1).
Price—At the market (approximately
$24.50 per share). Underwriter—Beadling & Co., Youngstown, O. proceeds—To Ward Beecher, the selling stock¬

share.

mine.

Cienega Basin Oil & Gas Co.„ Yuma, Ariz.
May 4 (letter of notification) 1,200 shares of common
stock.
Price—At par ($100 per .share). Underwriter—

Cleveland Trencher Co., Euclid, Ohio (5/21)
May 1 filed 117,660 shares of common stock (par $5),
of which 99,100 shares are to be offered by certain stock¬
holders and 18,560 by company (11,560 of latter to be
underwritten and 7,000 shares are to be offered to em¬
ployees and officers). Price—To be supplied by amend¬
ment.
Underwriter—Hay den, Miller & Co., Cleveland,
Ohio. Proceeds—For working capital.
' ' *

.

(letter of notification) 400,000 shares of class A
stock and 100,000 shares of class B stock. Price—25 cents

•

Address—P. O. Box

& Recovery Co., Spokane,

.

May 1

a number of subscribers not exceeding 25.
Price—$2 per share. Underwriter—None. Proceeds—For
organizational expenses. Office-r-231 So. La Salle St.,
Chicago 4, 111.

None.

Mining

Wash.

will be sold to

Proceeds

Co., Ltd., Vancouver, B. C.,

,

I

Delemar

o

holder.

March 5 filed 300,000 shares of convertible preference
stock (par $100). Price—To be supplied by amendment.

Underwriter—Kidder,

Dean

Phipps
May 1 (letter of
stock
(par $1).
Cohu & Co., New

Underwriter—Willis E. Burnside & Co., Inc., New

York.

•

•

share.

before

Motor Express Corp.

.

March 14 filed 900,000 shares of common stock (par $1)
to be offered "as a speculation."
Price — 50 cents per

expected

,

(Md.)

Inc., Chicago, 111. Proceeds—To retire three-year 5% •
promissory note. Office—Springdale and Third St., Gum- >
berland, Md.
/
;

C.

Offering—Not

11.

Cumberland

April 26 (letter of notification) $150,000 of five-year 5%
notes and 50,000 shares of common stock (par $1) to be ;
offered in units of $1)500'of notes and 500 shares of stock,
price—$2,000 per unit. Underwriter—F. S. Yantis & Co.,

Chester, S. C.

•

,

Corp., Chicago, III.

fective April

(letter of notification) 360 shares of common
Price—$100 per share. Underwriter—None. Pro¬
For plant improvements.
Office —109 ' Wylie

erties.

sinking fund debentures due ;

(5/21)
stock (par $5),;
of which 4,818 shares are to be offered to stockholder!'
and 127,364 shares fo public. Price —To stockholders at
$5 and to public at about $6.77 per share.
Underwriter
.—Dealers may be underwriters.
Proceeds—For: invest¬
ments in railroad Rnd kindred securities. Statement ef¬

not

Chevron Petroleums, Ltd., Toronto,

^

1,

Culver

March 15

stock.

trust certificates

Oct. 23 filed 132,182 shares of common

This

fective March 12.

Chester Telephone Co.,

:

1966. Price — To be supplied by amendment.
Underwriter—Halsey, Stuart & Co. Inc. Proceeds—To »
reduce bank loans by $9,000,000, and the balance added '
to working capital.
Offering—Indefinitely deferred.

April

i5 and will not be extended.

common

•

Cudahy Packing Co.

of record March

acquire

Gulf

of

1,500,000 units of voting

one

March 23 filed $10,0u0,000

The remaining 35,497 com. shares are reserved for pos¬
sible future issuance and sale by the company to hold¬
ers- of
common
stock then outstanding.
Underwriter

shares

.

share of one and two cent par common stock in 24 companies.
Price—$2 per unit. Tn- :
derwriter—None. Proceeds—For drilling and explora- :
tion expenses and working capital.'
representing

stock (par $10)
and 21,480 shares of 4.5% preferred stock (par $100), of
which the preferred stock and 214,800 shares are being
offered in exchange for shares of common stock of Gulf
Public Service Co., Inc., on basis of 4/10ths of a share
of common and l/25th of a share of preferred for each

—None.

working capi¬
Offering—Expected sometime in May.

Cuban-Venezuelan Oil Voting Trust

June.

non-convertible

Athens Flooring Co.,

amount.

Proceeds—To retire indebtedness and for

Central Louisiana Electric Co., Inc.

offer will expire on June

$500 and $1,000 each). Priee—91% of principal
Underwriter—Boettcher & Co., Chicago, 111.

of $100,

Jan. 25 filed 250,297 shares of common

as

Ill-

(letter of notification) $300,000 of 6% sinking
fund debentures due Dec. 1, 1975 (to be issued in units

Biscuit Co.

share held

ISSUE

March 2

(par $1),
subscrip¬
tion by common stockholders of record May 3 at rate of one
share for each two shares held (with aright of oversubcription); rights will expire on May 17. The remaining 50,000
shares are offered to certain employees.
Price — $2.25
per sare to stockholders and $2.75 to employees. Under¬
writers—Lee Higginson Corp. and P. W. Brooks & Co.,
Inc-, New York. Proceeds—For general corporate pur¬
poses. Statement effective May 3.

Gulf common

ADDITIONS

PREVIOUS

Electric Co., Geneva,

Continental

approximately 75 cents per share
Proceeds—To operate and drill well.

at

Carr-Consolidated

Thursday, May 10, 1951

£lNCE

March 30 filed 434,604 shares of common stock
of which 384,604 shares are being offered for

(no par),

Precision Casting Corp.

(letter

cumulative

Rath

L.

Street, Chester, S.

oversubscription privileges; rights to expire on May 18.
Price—$10 per share. Underwriter—None. Proceeds—
For working capital. Statement effective April 18.
*

H.

ceeds

Artloom Carpet Co., Inc.
March 27 tiled 7»,oo6 snares ot common stock
25

of

..

INDICATES

Registration

through brokers.

.

April 27 filed $2,440,000 of debentures, of which $700,000;
will mature on May 1, 1971 and $1,740,000 on May 1, •
1981. Price—To be supplied by amendment. Underwriters;
—The First Boston
Corp.; The Dominion Securities'
Corp.; Smith, Barney & Co.; Harriman Ripley & Co. Inc.;'
Wood, Gundy & Co., Inc.; A. E. Ames & Co., Inc.; andj
McLeod, Young, Weir, Inc. Proceeds—For new school;
buildings.

•

-

-

Products Co.,

Ekco

Chicago, III.' (5/21-23)
May 2 filed 24,000 shares of common stock (par $2.50).:
Price—To be supplied by amendment. Underwriter— •
Merrill Lynch, Pierce, Fenrter & Beane, New York. Pro- *
ceeds—For working capital.
Elgin Sweeper Co., Elgin, III.
April 18 (letter of notification) 38,864 shares of common;
stock (no par), to be offered to common stockholders of)
record April 28 on basis of one share for each two •
shares held, with an - oversubscription privilege; rights:
to* expire about June 11.
Price—$5 per share. Under- *
writer—None.
Proceeds—For working capital.
Office*
5 Oak Street, Elgin, 111.
j
& Instrument Corp.; "
shares of common stock (par $1) :
being offered to common stockholders May 2 at rate of:
Fairchild Camera

April

one

13

filed 69,406

share

for

each

five

shares

held

with

an

oversub¬

scription privilege; rights.to expire May 17. Price—$27'
per share. Underwriter—^Glore, Forgan & Co., New York..
Proceeds—For expansion program. Statement effective
May 2.
•

Falls Creek

Mining Co., Seattle, Wash.

April 27 (letter of notification) 400,000 shares of common
stock (par 10 cents). Price—25 cents per share. Under-

Volume 173

Number 5010

..

The Commercial and Financial Chronicle

.

writer—None. Proceeds—To three selling stockholders.
'Office—418 Second &

Stuart & Co, Inc., which was returned unopened.
Offey- ■+
ing—Postponed indefinitely. Statement effective

Cherry Bldg., Seattle 4, Wash.

Foote

Mineral

NEW ISSUE CALENDAR

Co.

March 30 filed 23,206 shares of common stock (par $2.50)
being offered to stockholders of record April 27, 1951,

May 12, 1951

.'for subscription at rate of one share for each 10 shares

-held; rights expire May 10.

Price—$42

Utica Cutlery Co-,

share, Un¬
Proceeds—For
Statement effective April 30-

.

program.

Frontier Industries, Inc.
April 30 (letter of notification) 18,500 shares of
stock (par 50 cents).

Price—$16

Common

per

14.

Jersey Central Power & Light Co.
Feb, 21 filed 40,000 shares of cumulative preferred stock
(par $100). Proceeds—From sale of preferred, together
with proceeds to

derwriter—Estabrook & Co., New York.

.expansion

March

May 14, 1951

additional

American Dairy Products Corp
Consolidated Natural Gas Co.,
11:30

common

share. Underwriter
;•—Hamlin & Lunt, Buffalo, N. Y. Proceeds—To reduce
term bank loan. Office—315 Babcock St., Buffalo 10,

a.m.

„_Pfd. & Com.

(EDT)

Debentures

Gamble-Skogmo, Inc.
Common
Mid-Continent Airlines, Inc.__-,
-Debentures
Panhandle Producing & Refining Co
..Common
Utah Uranium Corp....
;
........Common

per

N. Y.

be received from the sale of 350,000
shares to General Public Utilities

common

Corp., the parent, will be used for new construction.
Bids—Only one bid, from Union Securities Corp. and
Salomon Bros. & Hutzler (jointly), was received March

27, which

was

returned unopened.

Offering—Postponed

indefinitely. Statement effective March 14. Amendment
—Filed April 24 seeks exemption from competitive bid¬
ding. Preferred may be privately placed.

Frontier

April

30

Refining Co., Cheyenne, Wyo. (5/21)
filed $1,000,000 5 ¥2% convertible debentures

May 15, 1951

.

"due

Chasapeake & Ohio Ry...
Hiller Helicopters, Inc.
Opelika Manufacturing Corp

May 1, 1961. Price — At par (in denominations of
$1,000 each). Underwriters—Peters, Writer & Chris-

tenseri, Inc., and Boettcher & Co., both of Denver, Colo.
Proceeds
*

.

N.

To drill eight wells in San Juan County,
M., and for working capital.

Equip. Trust Ctfs.
Debentures
Common

i.

May 16, 1951

(City of), Province of
Alberta, Canada
^
Edmonton District No. 7, Canada
Illinois Power Co

its subsidiaries.

Price—Fixed

Debentures
.....Common

May 17, 1951
Illinois Central RR., noon (CDT).__Equip. Tr. Ctfs.
Thorer & Hollender, Inc., U a.m. (EDT)..Common-

May 21, 1951
Cleveland

Trancher

Culver Corp.
Ekco Products

.

.

Co

Common

—————.......Common
Co.

—Common

Frontier Refining Co...
...........Debentures
North Penn Gas Co.—_____———Debentures

General Telephone Corp.

April 19 filed 150,000 shares of common stock (par $20)
being offered for sale to employees of the company and

Debentures

...

<

General Glaze Corp., Baltimore, Md.
May 1 (letter of notification) 22,500 shares of 5% noncumulative prior preferred stock (par $5) and 95,000
shares, of common stock (par 20 cents).
Price—Pre¬
ferred at $5.60 per share and common at par. Underwriter—None.
Proceeds—For; equipment and working
capital. Address—Box 7705, Baltimore 21, Md.

May 24, 1951

>

National Dairy Products Corp..

at

$3 below the average
price either for the month in which payments
completed or for the next succeeding month, which¬

...Debentures

market

per

July 3, 1951.

construction programs and for general corporate

Common

Arizona

.

Edison

Co,

pur¬

..Common

June

Georgia Power Co. 11

5,

1951
(EDT)

a.m.

JUne

6,

.Bonds

1951

June
Glenmore

Distilleries

12,

1951

Co.......

June 24,

....Preferred

1951

preferred share for each 24 common shares held,
with oversubscription privileges; rights expire May 16.
Tri-Continental Corp., owner of 53.4 of common stock,
has agreed to subscribe to its pro rata share and to
purchase any shares not subscribed for by other stock¬

one

holders. Price—$100 per share. Underwriter—None. Pro¬

ceeds—Together with other funds, to retire presently
outstanding preferred stocks. Statement effective May 1.
Golconda Mines Ltd., Montreal, Canada
April 9 filed 750,000 shares of common, stock.
Price—
At par ($1 per share).
Underwriter—George F. Breen,
New York.
Proceeds—For drilling expenses, repayment
of advances and working capital. Offering—Date not set.

Gray Manufacturing Co. (Conn.)
April 27 (letter of notification) 3,100 shares of capital
six employees at $7.50 per share. Latter

stock sold to

at

market

(about

$12

per

share). Underwriter—None. Proceeds—For working eapi-.
tal. Office—521 Fifth Ave., New York, N. Y.

Gyrodyne Co. of America, Inc.
notification) 34,320 shares of class A
common
stock (par $1). Price—$5 per share. Under¬
writers—Company itself in New York, and Jackson &
Co.,1 Boston, Mass. Proceeds —For partial financing of
anticipated military contracts and for acquisition of new
manufacturing facilities. Office—80 Wall Street, New
March 14 (letter of

York 5, N. Y;
•

Harrisonville Telephone Co., Waterloo, III.
April 27 (letter of notification) $50,000 of first mortgage
4%% bonds, series B, due May 1, 1971. Price—103.35%
and

accrued

interest.

Underwriter—McCourtney-BreckProceeds—To retire notes
accounts due. Offering—Made on May 4, was

enridge & Co., St. Louis, Mo.
and pay

immediately oversubscribed.

,

Hiller Helicopters, Inc.
(5/15)
April 25 filed $2,500,000 of 5% convertible income de¬
bentures

unit).

due

May

1,

1961.

Underwriters—Blyth

Price—At

&

Co.,

par

Inc.

X$1,000 per
Lehman

and

Brothers, New York. Proceeds—For plant expansion, to




July 17, 1951
Mississippi Power Co
—...Preferred

September 11,
Alabama

1951

Power Co.————i

up

Price

—

$13

to a maximum of

20(),

per

Lorain, Ohio

March 13 (letter of notification) 6,705 shares

of common

rights to expire on July 1. Price—$20 per share. Under¬
Proceeds—For working capital. Office—

Lorain, Ohio.

Loyalta Oils, Ltd., Edmonton, Canada
April 16 filed 750,000 shares of capital stock (par $1).
Price—50 cents per share. Underwriter—James T, Chiles
of Denver, Colo., who will conduct offering to public by
means of a mail campaign directed from Edmonton, Can¬

Proceeds—To

carry on

Ludman Corp.,

drilling program.

Opa-Locka, Fla.

April 16 filed 250,000 .shares of CQmrnon stock (par $1)»
of which 25,000 shares will be offered to employefes:*Any
unsubscribed shares, plus the remaining 225,000 shares,
are to be offered to public. Price—$3.50 per share (with
an underwriting commission of 35 cents) to employees;
$3.75 per share (with an underwriting commission of
60 cents) to public. Underwriter—Floyd D* Cerf, Jr. Co.,
Chicago, 111. Proceeds—To redeem 1,873 shares of 5%
preferred stock and $75,000 of 3% debentures and for
general corporate purposes.
•

...Bonds

Madison Co., Wilmar,

Ark.

(letter of notification) 1,500 shares of common
stock to be offered to stockholders of- Ozark Lumber Co.
and The Wilmar Co. Price—$100 per share. Underwriter
—None. Proceeds—To purchase logs and timber lands.
Address—c/o Ozark Badger Lumber Co., Wilmar, Ark.
May 1

to.

holders of record April 30 for subscription on basis of

shares

employees

share,
underwriter —
None. Blyth & Co., Inc., has been engaged as DealerManager
to
obtain
subscriptions.
Proceeds — For
additions and improvement to property. Statement ef¬
each.

shares

1:30 p.m.- ~<EDT) _^.. __ _. .Vu...._ .Common

*

Public Finance Service, Inc.......—..Debentures

March 30 filed 10,0U0 shares of $5 convertible second pre¬
ferred stock (par $15) being offered to common stock¬

these

offered to

be

ada.

Electro-Chemical Co., Inc.

Buffalo

28 filed 159,142 shares of class B common stock
(par $1). Price — To be filed by amendment. Under¬
writer—Glore, Forgan & Co., New York. Proceeds—
For working capital and general corporate purposes.
Offering—Expected to be withdrawn and new filing
expected to be made covering 30,000 shares of preferred
stock (par $100), with warrants attached.

re-offer

Unsubscribed shares first

rights to expire on May 18.
to

203 West Ninth St.,

...Common

Dec.

will

Long Island Lighting Co.
April 6 filed 574,949 shares of new common stock of
which 524,949 shares are being offered common stock¬
holders of record May 2 in the ratio of one share for
each six shares held, with an oversubscription privilege;

writer—None.

1, 1951

Dewey & Almy Cherpical Co......

Insurance

on

(no par), to be offered to common stockholders
at the rate of one share for each 10 shares held March 10;

......

June

Glenmore Distilleries Co.

Fire

record

stock

May 28, 1951

•
Georgia Power Co. (6/5)
May 4 filed $20,000,000 of new first mortgage bonds
due June 1, 1981. Underwriters—To be determined by
competitive bidding. Probable bidders: Halsey, Stuart
& Co. Inc.; Morgan Stanley & Co.; Lehman Bros.; Harriman Ripley & Co. Inc.; Shields &*Co.'and Salomon Brosl
& Hutzler (jointly); Blyth & Co., Inc. and Kidder, Peabody & Co. (jointly); The First Boston Corp.; Kuhn,
Loeb & Co.; Union Securities Corp. and Equitable Secu¬
rities Corp. (jointly). Proceeds—For construction pro¬
gram. Bids—To be opened at 11 a.m. (EDT) on June 5.

Globe & Rutgers

of

Lorain Telephone Co.,

Virginia Electric & Power Co...

Statement effective May 1.

poses.

March 31 on a 1-for-15 basis;
May 23. Price—$24 per share. Un¬
derwriter—None. Proceeds—For working capital. Office
—1342 M Street, Lincoln, Neb.
stockholders

rights will expire

fective May 2.

share. The initial, offering will close on
Proceeds—To. make additional investments

in common stock equities of subsidiaries and temporary
advances to the subsidiaries in connection with their

April 24 (letter of notification) 10,002 shares of common
stock (par $16.66% per share) being offered to common

May 25, 1951

is lower, but in no event more than $35 nor less

ever

Underwriter—None.

Lincoln Telephone & Telegraph Co.

Edmonton

•

.than $25

interests.

—

Gamble-Skogmo, Inc. (5/14)
April 24 filed 304,270 shares of common stock (par $5).
Price—To be supplied by amendment. UnderwritersGoldman, Sachs & Co.; Merrill Lyneh, Pierce, Fenner &
Beane, and Piper, Jaffray & Hopwood. Proceeds—To. a
selling stockholder.

are

•
K-W Oil Co., Phoenix, Ariz.
April 30 (letter of notification) 29,300 shares of common
stock (par $1) to be issued to persons at a par value
equal to amount paid by them for purchase of leasehold

purchase additional

equipment, to reduce outstanding

loans and for working

capital.

,

Hotels

Corp., Chicago, III.
March 30 filed 153,252 shares of common stock (par $5)
now offered to holders of common stock of Hotel Wal¬
dorf-Astoria Corp. in exchange for their holdings of
such stock on a share-for-share basis; offer expires on
May 28. Dealer-Manager—Carl M. Loeb, Rhoades & Co.,
Hilton

New York.

.

Illinois Power Co.

(5/16)

April 26 filed 203,594 shares of common stock (no par).

Price—Tp be related to the market at time of offer. Un¬
derwriter—Thq First Boston Corp. and Merrill Lynch,
Pierce, Fehner & Beane, New York. Proceeds—To repay
bank loans and for

new

construction.

Mays (J. W.), Inc., Brooklyn, N. Y.
April 27 filed 50,000 shares of common stock (par $1;;"
Price-To be supplied by amendment. UnderwriterLoeb, Rhoades & Co. and Lehman Brothers,
Proceeds—To Joe Weinstein, President of

Carl

M.

New

York.

the company, the
•

selling stockholder.

McCormick & Co., Baltimore,

Md.

May 3 (letter of notification) 7,795 shares of common
stock (no par).
Price—$25 per share. Underwriter—*
Aler. Brown & Sons, Baltimore, Md.
Proceeds—For
working capital.

Office—414 Light St., Baltimore 2, Md.
Inc. (5/14)

Mid-Continent Airlines,

April 24 filed $2,000,000 20-year 4%% convertible deben¬
1963. Price—To be supplied by amend¬
Underwriters—Lehman Brothers, New York, and
Kalman & Co., Inc., Minneapolis, Minn. Proceeds—For
purchase of six Convair aircraft and for construction of
tures due May 1,

•

Imperial Brands, Inc., Los Angeles, Calif.
May 2 (letter of notification) 40,000 shares of capital
stock. Price—At par ($1 per share). Underwriter—Floyd
A. Allen & Co., Inc., Los Angeles, Calif. Proceeds—To
purchase baking machinery and equipment. Office—3213
East Fowler St., Los Angeles, Calif.
International Life Insurance

Co., Austin, Tex.'

March 30 filed

$1,200,000 special stock debentures to be
sold in units of $500 each by regular licensed insurance
agents of the company. Price—At par. Proceeds—To in¬
crease capital and surplus.
•

Iowa

Pork Shops, Inc.,

Long Beachr Calif.

April 30 (letter of notification) 1,000 shares of preferred
stock. Price-r-At par ($100 per share).
Underwriter—
None. Proceeds—For working capital. Office—1140 Car¬
son Ave., Long Beach, Calif.

ment.

new

•

hangar.

National Dairy Products

Corp.

(5/24)

May 3 filed $30,000,000 of sinking fund debentures, due
June 1, 1976. Price—To be supplied by amendment.
Underwriter—Goldman, Sachs & Co. and Lehman Bro¬
thers, New York. Proceeds—For plant and equipment
improvements and for general corporate purposes.
National Research Corp., Cambridge, Mass.

April 16 (letter of notification) 2,000 shares of common
stock (par $1).
Price—$27 per share. Underwriter—
Paine, Webber, Jackson & Curtis, Boston, Mass. Proceeds
—To William A. Coolidge, the selling stockholder.

Corp^ ■:
(letter of notification) 15,000 shares of 60-cent
cumulative convertible preferred stock (par $5). Price
—$10 per share. Underwriter—Michael Investment Co.,
Inc., Providence, R. I. Proceeds—For working capitaL
Offering—Postponed temporarily.
North American Acceptance

March 20

Jerry Fairbanks, Inc., Hollywood, Calif.
Feb. 16 (letter of notification) 193,000 shares of common
stock (par $1). Price—$1.50 per share.
Underwriter—

D. Gleich Co., New York. Proceeds—For production of
motion pictures for theatrical and television purposes
and for working capital.

Jersey Central Power & Light Co.
Feb. 21 filed $1,500,000 first mortgage bonds due in 1981.
Proceeds—For expansion program.
was

Bids—Only one bid
from Halsey,

received by company on March 27,

North Penn Gas Co.

(5/21)

May 1 filed $2,700,000 of debentures due 1971. Under*
writer—To be determined by competitive bidding. Prob¬
able bidders:

Halsey, Stuart & Co. Inc.; A. C. Allyn &
Continued on baae 44

44

(1980)

The Commercial and Financial Chronicle

Continued

from

page

43

•

^

.

Co., Inc.; Drexel & Co.; The First Boston Corp.; Lehman
Brothers. Proceeds—To repay bank loans.
•

Norwich

Pharmacal Co.

(letter of notification) 2,100 shares of common
stock (par $2.50). Price—At market (approximately $19
per share).
Underwriter—Reynolds & Co., New York.

Ohio

share)

1,000 shares of common stock

(no par)
Schilling at $45 per share. Under¬
writer—None. Proceeds—To make loans, purchase dis¬
counts, etc. Office—515 East Market St., Alliance, O.
per

and

to be sold to John

May 2

Proceeds—To Warren E.

Schilling Loan Corp., Alliance, O.
April 27 (letter of notification) 2,500 shares of 4% cumu¬
lative preferred stock to be publicly offered at par ($100

Eaton, the selling stockholder.

Edison Co.

March 30 filed 436,224 shares of common stock

Container Corp.
(letter of notification) 12,000 shares of class A
common stock (par $1).
Price—$5.50 per share. Under¬
writer—Barrett Herrick & Co., New York. Proceeds—

May 4 filed 300,000 shares of capital stock.

share.

—Harriman

awarded

was

on

May 2 to

—To

Frederic

R.

is the

Mann, President, who

selling

stockholder.
Shareholders' Trust of Boston,

Boston,

Proceeds—

•

Edison

filed

Co.

150,000 shares of pfd. stock

(par $100).

Underwriters—To be determined by competitive bidding.
Probable

Morgan Stanley & Co.; Lehman Bro¬
Bear, Stearns & Co. (jointly); W. C. Langley
& Co.; Glore, Forgan & Co. and White, Weld & Co.
(jointly); The First Boston Corp. Proceeds — For con¬

struction program. Bids—Temporarily postponed. Were
to have been submitted
up to 11:30 a.m. (EDT) on May 2.

(par $1). Price—$12.33 per share. Underwriter—
None. Proceeds—For general corporate purposes, includ¬

Office—18511 Euclid Ave., Cleveland, O.

ing equipment.

Sylvania Electric Products, Inc.
April 26 filed 400,000 shares of common stock (no par).
Price—$29.25 per share.
Underwriter—Paine, Webber,
Jackson & Curtis.
Proceeds—To purchase equipment
for

working

Telegift,
March

writer—None.

Proceeds—To Forrest Parrott, who is the

selling stockholder.
City, Okla.

Office—Petroleum Bldg., Oklahoma
■/

'

-

.

Opelika Manufacturing Corp. (5/15)
April 25 filed 200,000 shares of common stock (par $5).
Price—To be supplied by amendment.
Underwriter—
Glore, Forgan & Co., New York. Proceeds—To certain
selling stockholders.
•

Pacific Paper Materials Co., Portland, Ore.

Proceeds—To

retire

past

and

current

due

accounts.

Office—1400 N. W. 15th Ave., Portland, Ore.
Pacific

March

30

Refiners, Ltd.,

filed

750,000

Honolulu, Hawaii

shares

of common stock being
•offered for subscription by common stockholders of rec¬

April 25 (letter of notification) 19,000 shares of common
stock (par $1), of which 12,599 shares are to be offered
first to stockholders.
Price —To stockholders, $14 per

stock.

Ball,

Price—At

Burge

par

($100

share).

per

Underwriter—

&

Kraus, Cleveland, O.
Proceeds—For
working capital.
Office—5 So. Jefferson St., Dayton 5,
Ohio. Offering—May be •withdrawn.
Smart &

Final Co.,

Ltd., Los Angeles, Calif.
March 22 (letter of notification) 12,561 shares of common
stock (no par).
Price—$7.25 per share. UnderwriterPacific Coast Securities

Co., San Francisco, Calif. Pro¬
selling stockholders. Office — 4510 Colorado
Blvd., Los Angeles 53, Calif.

ceeds— To

South

April

9

stock.

State

filed
Price

Uranium

by
—

Mines

amendment

At

($1

par

by-Wire" service to be known as the Telegift Service,
and for operating capital.
Office—40 East 49th Street,
York 17, N. Y.

New
•

Lightweight Aggregate Co., Dallas, Tex.

Texas

to public $15.50 per share.
Underwriter—Se¬
Management Corp., Kirby Bldg., Dallas, Tex.

share and

curities

purchase of equipment and machinery..

Proceeds—For

For

Southwestern

gram.

American Milling Co.,

200,000 shares of

be

offered

in Mexico and for general corporate
purposes.

Investment

Panhandle

Producing

&

Refining

Co.

(5/14).

April 24 filed 192.500 shares of

common stock
(par $1).
price "not less than the closing bid on the
first business day (except
Friday or Saturday) on which
shares close at $7.75 per share or better." Underwriter—

Price—At

stockholders.

stock (no par)

Price—$20

per

to
share.

—

Spiegel, Inc., Chicago,
May 2 filed 85,850 shares of

a

the

selling stockholder.

•

Parkmoni

Peabody Coal Co.
26

filed

160,000

shares

of

5%% prior preferred
stock (par $25).
Price—To be supplied by amendment.
Underwriter—A. C. Allyn & Co., Inc. Chicago, 111. Pro¬
ceeds—For construction program.

(par $2) to

on

or
on

before

May

31,

1953;

$15

per

share

before Nov. 30,

or

or

on

1954; and $16:50 per
before May 31, 1956. Proceeds

—For general corporate purposes,

/'

common

stock

approximately 13,750

(par $1).

Price—At the market

(approximately $7 per share). Underwriters—Lee Higginson Corp., Carreau & Co. and Reich & Co., New York
Proceeds—To four selling stockholders. No general pub¬
lic offering planned.

$5516
New

Emery Investment Co., the selling stockholder.
4445 Bellevue Ave., Detroit 7, Mich.

Office—

Public Finance

Service, Inc., Phiia., Pa. (6/24)
April 30 (letter of notification) $250,000 of 6% cumula¬
tive debentures,
1950 series 'to be offered to present
debenture holders. Price—At par
(in denominations of
$100 each).
Underwriter—None.
Proceeds—For addi¬

common

Price—

per
share.
Underwriter—None.
Proceeds—To
loans and for working capital. Office—Lake St.,

Britain, Conn.

.

'■

tional operating

capital.
Philadelphia 44, Pa.

Office—18

West Chelten

Ave.,

Underwriter—None.

Proceeds—To three selling

Office—443 West Congress
St., Detroit 26

Roto Flame

Corp., Bradenton, Fla.
May 3 (letter of notification) 2,000 shares of 6% cumula¬
.

par

stock and 2,000 shares of

($25

per

Proceeds—To promote

and

share).
operate

common

stock.

Underwriter—None.
business.

common

(about $2.25

—None, but Bache & Co. will act
To Addison F.

Stevens

stock

March 22 filed 200,000 shares of
Price—To be supplied by

common

amendment.

Hornblower & Weeks, New York.

10 cents J.

(par

share). Underwriter

per
as

broker.

Proceeds—

stock (par $1)

Underwriter—

Proceeds—To Charles
Hahn, Jr., President, who is the selling stockholder.
Offering—Indefinitely postponed.

P.)

•

employees of
high and low quotations

funds

for

Office—

Equipment Co., Inc., Baltimore,

Maryland
May 8 (letter of notification) 740 shares of common stock.
Price—At
par
($100 per share).
Underwriter—None.
Proceeds—For working capital. Office—1242 South Paca
t

•

Utah

•

Utica Cutlery

(par $15)

Employees"

company.

•

Sun Oil Co., Philadelphia, Pa.
May 3 filed 11,000 "memberships in the 1951 plan," effec¬
tive July 1,
1951, to be offered to employees upon their
becoming eligible for membership; a maximum of 111,000
shares of

common stock (no
par) which it is anticipated
be purchased by the trustees of the plan during the
period July 1, 1951, to June 30, 1952; and 193,262 shares

may

of common stock which "it is

anticipated may be offered
possible public sale by certain selling stockholders
during the same period." Underwriter—None.
Super Electric Products Corp.
April 2 (letter of notification) $250,000
convertible

Uranium Corp.

(5/14)
May 2 (letter of notification) 1,999,000 shares of com¬
mon
stock (par one cent).
Price—15 cents per share.
Underwriter—Tellier & Co., New York.
Proceeds—To
explore, develop and operate uranium and vanadium
mining properties. Office — 237 East 3rd South Street,
Salt Lake City, Utah.

May
stock

of

(letter

4

be

to

10-year

Co. (5/12)
notification)

offered

1,000

shares
of

stockholders

to

capital

of

record

May

1,

l-for-4 basis; rights to expire June 5. Price—
At par ($100 per share). Underwriter—None.
Proceeds
—To expand nlant facilities and for working capital.
Office—820 Noyes St., Utica, N. Y.
1951,

on a

Uranium Co.,

Van Lake

Van Dyke, Mich.
Price—

500,000 shares of common stock.

March 23 filed
At par

($1 per share). Underwriter—None, but company
has negotiated with Titus-Miller & Co., Detroit, Mich.,
which "is seeking other dealers to cooperate with it in
the deal." Proceeds—To develop uranium deposits in the
River

area

in Algoma,

withdrawn

statement

Ontario, Canada.
April

Reg¬
Offering,

30.

reduced to 100,000 shares, expected later

which may be

this month.
.

Video

•

Corp. of America

,

•

f

,

April 20 (letter of notification) 36,000 shares of common
stock (par 10 cents). Price—At market (about 34 cents

Underwriter—None.

share).

per

Proceeds—To

selling

privately.

All sold

Virginia Electric & Power Co. (5/25)
May 2 filed 449,674 shares of common stock (par $10)
to be offered to common stockholders of record May
25 on basis of one share for each ten shares held; rights
ment

11. Price—To be supplied by amend¬

maximum offering price is $25 per
Underwriter—Stone & Webster Securities Corp-,

(proposed

unit).

New York. Proceeds—For new construction.

Warren

Telephone Co.

(Ohio)

March 23

(letter of notification) 3,000 shares of $5 divi¬
preferred stock (no par) to be offered for subscrip¬
tion by present stockholders in ratio of 0.27695
of a
share for each share held. Price—$100 per share. Under¬
dend

writer—None.

Proceeds—To

reimburse

the

company's

construction costs.

Waverly Oil Works Co.

Price—At average of
on day preceding offering. Pro¬
ceeds—For general corporate purposes.

non-cumulative

United Truck &

of

(letter of notification) 20,000 shares of capital

April 26

& Co.,

Inc.
April 27 filed 100.000 shares of capital stock

6%

47

Vare, the selling stockholder.
(J.

for

Sattler's, Inc., Buffalo, N. Y.




shares of

to certain

Michigan.

tive preferred

16,000

to be offered under "Stock Purchase Plan for

Radioactive Products, Inc.,
Detroit, Mich.

April 30 (letter of notification)
10,800 shares of common
stock (par $1). Price—At the market
(about $1.87% per
stockholders.

Sterling Engine Co., Buffalo, N. Y.
April 27 (letter of notification) an aggregate of not to
Price—At market

provide

business of installment financing.
West Elm Street, Brockton, Mass.

conducting

to expire on June

nv

Shake, Inc., Bloomington, III.
April 4 (letter of notification) 18,180, isharesi of common
stock (par 50 cents). Price—$5.50 per share. Underwriter
—None. Proceeds—To three selling stockholders. Office
—1700 West Washington St.,
Bloomington, 111.

exceed

preferred stock.
Proceeds—To

stockholders.

Stanley Works, New Britain, Conn.
April 20 (letter of notification) 5,438 shares of
stock (par $25)
being offered to employees.
repay

lative

Underwriter—None.

istration

Corp.
(letter of notification)

12

shares of

May 2 (letter of notification)

Montreal

Standard-Thomson

Steak'n

•
Plywood, Inc., Detroit, Mich.
May 3 (letter of notification) 5,000 shares of common'
stock (par $1).
Price—$4.25 per share. Underwriter—
Baker, Simonds & Co., Detroit, Mich.
Proceeds—To

.Price—At

share

per

thereafter and

Offering—Indefinitely

postponed.

stock

stock for each share of preferred stock at $13.50

share thereafter and

March

Realty Corp., New York
May 4 (letter of notification) 2,500 shares of common
stock (no par).
Price—$100 per share. Underwriter—
Bisno & Bisno, Beverly Hills, Calif. Proceeds—To Alex¬
ander Bisno, President, the
selling stockholder. Office—
1200—5th Ave., New York, N. Y.

III.
common

be offered to holders of cumulative preferred stock upon
exercise of stock warrants on basis of one share of

White, Weld & Co., New York. Proceeds—To Atlas Corp.,

•

to

Co., Amarillo, Tex.

common

Schneider, Bernet & Hickman, Dallas,
Tex,; G. H. Walker & Co., St. Louis, Mo.; and Dewar,
Robertson & PancOast, San Antonio, Tex. Proceeds—For

common

share).

first

Mass.
1,000 shares of 6% cumu¬
Price—At par ($100 per share).

Corp., Brockton,

Finance

St., Baltimore 30, Md.

Investment

filed

Southwestern

stock. Price—At

($1 per share). Underwriter—None. Proceeds—To
•purchase machinery and equipment, to construct a mill

•

expenses,

Las Vegas, Nev.

common

Par

1

Proceeds—

working capital.

Pan

Jan. 24 filed

March

of capital
Underwriter-

Co., Amarillo, Tex.
15,000 shares of $1 cumulative sinking
fund preferred stock (no par) to be offered first to stock¬
holders.
Price—$20 per share. Underwriter—The First
Trust Co. of Lincoln, Neb.
Proceeds — For working
capital.
30

Underwriters

pro¬

shares

share).

commissions, exploration and development
working capital.

April

Time

•

(Canada)

Optionee—Robert Irwin Martin of Toronto.

sold at

promissory notes and for construction
Statement effective April 27.

Ltd.

384,000

per

April 30 filed 22,288 shares of

short-term

60,000 shares of com¬

(par $1). Price—$2 per share. Underwriter
Proceeds—To establish and operate a "Gifts-

Skyline Broadcasting Corp., Dayton, O.
April 13 (letter of notification) 250 shares of common

April 6, 1951, at rate of one share for each share
held; rights to expire on May 22, Price—At par ($1 per
share). Underwriter—None. Unsubscribed shares to be
Proceeds—To retire

New York

Inc.,

stock

mon

ord

public auction in Honolulu.

All

May 9.

—None.

and

April 25 (letter of notification) 200,000 shares of common
stock. Price—At par ($1 per share). Underwriter—None.

Offering—Made

(letter of notification)

20

.•

Oil Producers, Inc., Oklahoma City, Okla.
April 26 (letter of notification) 200,000 shares of common
stock (par 10 cents). Price—15 cents per share. Under¬

capital.

sold.

Signal Point Ski Resort, Inc.
April 27 (letter of notification) 2,500 shares of common
stock. Price—$10 per share.
Underwriter—None. Pro¬
ceeds—For improvement of ski area
and equipment.
Office—110 Locust Ave., Coeur d'Alene, Idaho.

bidders:

thers and

Cleveland, O.
10,000 shares of class A

(letter of notification)

1

May
stock

Underwriter

Ripley & Co., Inc., New York.

body & Co. (jointly). Proceeds—For construction-pro¬
gram. Statement effective April 18.

Mass.

For investment.

Ohio

Offering—Made on April 30.

Swartwout Co.,

and
•

Merrill Lynch, Pierce, Fenner & Beane and Kidder, Pea-

March 30

•

Thursday, May 10, 1951

March 1

(par $8)
being offered for subscription by common stockholders
of record May 2, 1951, on the basis of one share for
each
10 shares held,
with an oversubscription privi¬
lege; rights to expire on May 18. Price—$29.25 per
Underwriters—Issue

for

Newark, N. J.

P.

Seaboard

and

.

.

& Co., New York. Proceeds—To retire
working capital.
Office — 46 Oliver St.,

writer—Tyson
debt

.

unsecured

debentures.

Price—At par {in denominations of $100 each).

Under¬

stock
1951
15.

(par $1) offered to stockholders of record May 1,
on

a

one-for-four

Price—$10

—For

per

basis; rights to expire

on

June

share. Underwriter—None. Proceeds

general corporate purposes.

Office—4403

Centre

Ave., Pittsburgh 13, Pa.
West

Virginia Coal & Coke Corp.

April 16 (letter of notification) 3,700 shares of

common

stock (par $5).

Price—At the market (not less than $18
per share).
Underwriter—Tucker, Anthony & Co., New
York. Proceeds—To Charles Dorrance, President, who is
the selling stockholder.

Wheeling Steel

Corp.

April 11 filed $14,238,900 of
May 1, 1965 (convertible for

14-year debentures due
10-year period), being
offered to common stockholders of record April 26 on
basis of $100 of debentures for each 10 shares of common
stock held; rights expire May 10. Price—At par. Under¬
writer—Kuhn, Loeb &
improvement program.

a

Co., New York. Proceeds—For
Statement effective April 26.

^Volume 173

Number 5010

-

.

.

The Commercial and Financial Chronicle

.

thority to issue and sell $6,450,000 equipment trust cer¬
tificates to bo dated May 15, 1951, and to mature in 30

Prospective Offerings
Alabama Power Co.
Feb.

6, it

and

sale

equal semi-annual installments from. Nov. 1, 1951 to May
15, 1966, inclusive. Bids are expected to be opened in
Cleveland on Ma.y 15. Probable bidders:
Halsey, Stuart
& Co. Inc.; Salomon Bros. & Hutzler.

(9/11)

was stated that company contemplates
of $10,000,000 first mortgage bonds.

issuance
Under¬

writers—To be determined by competitive bidding. Prob¬
able bidders: Halsey, Stuart & Co. Inc.; Morgan Stanley
&

Chicago & Western Indiana RR.
April 16 reported company will probably issue in the

Co.; Blyth & Co., Inc.; Harriman Ripley & Co., Inc.;
& Co. and Salomon Bros. & Hutzler (jointly);

Corp.; Lehman Brothers. Proceeds—For
pansion program.
Bids—Tentatively expected to
opened on Sept. 11. Registration—About Aug. 10.
Alaska

April 25

Telephone Co.
was announced

it

convertible

bonds:

company

may

ex¬

be

file

soon

a

Price—At

par (in units of $100
each). Underwriter—Tellier & Co., New York, Proceeds

—For

Natural

basis

of

of

Cincinnati

April 7 it
this

Gas Co.

April 25. William GLWoolfolk, Chairman, announced

offering

•

equipment and for expansion.

new

American

during the

stockholders

common

share

one

for

ten

under

would

rights

probably

on

be

will

sale

of

preferred

Edison

stock-

Electro-Chemical

Co.

of the outstanding stock.

Columbia
Dec.

bidders:

Allen

Byers
25

pany

tive

(A. M.)

L.

(jointly). Probable bidders for common stocky in event
of competitive bidding: Morgan Stanley & Co.; Goldman,
Sachs & Co. and Union Securities Corp. (jointly); Mer¬
rill Lynch, Pierce, Fenner & Beane; Lehman Brothers:
Shields & Co. and R. W. Pressprich & Co, (jointly).
Proceeds will be used for expansion program.

&

Co.

are

Commonwealth
Jan.

redeemable

it

10

$181,000,000

exchange

securities.

dividends. Holders may be offered in
convertible preferred stock, plus com¬
Company being advised by Blyth & Co., Inc.,
new

stock.

mon

bonds

stated that company plans to raise more

was

Probable

bidders

for

Co.,Zinc-, The
Corp.- and
Salomon
Bros.
&
Hutzler
(jointly).
The previous stock offering was under¬
written by Blyth & Co., Inc. and The First Boston Corp.
Boston

Proceeds
bank

will

be

used

to

retire

$11,000,000 outstanding

loans.

fourth amended

a

Corp., Charlotte, N. C.
application was filed with the

SEC for authority to build a natural gas pipeline system
to serve certain areas in North and South Carolina. Esti¬
mated cost of the proposed facilities is $3,595,295, to be
financed by the sale of first mortgage bonds and the
issuance of junior securities.
R. S. Dickson &

Central

April 3

Underwriters may include

Co., Charlotte, N. C.

Maine

company

Power

estimated

Co.

that

outside

cash

require¬

ments for 1951 for construction and other purposes will
be about $10,000,000.
No definite plans for permanent

financing have yet been formulated, and in the interim
company plans to obtain necessary funds through shortterm bank borrowings.
Central

April 10 it

&

South West Corp.

$5)
be

(par

late in 1951
determined

ders:

or early in 1952.
Underwriters—May
by competitive bidding.
Probable bid¬

Blyth

Harriman

& Co., Inc.; Smith, Barney & Co. and
Ripley & Co., Inc. (jointly); Lehman Brothers

and Lazard

Freres &

Co.

(jointly); Kuhn, Loeb & Co.;
Co.; Ladenburg, Thalmann &
(jointly).
Proceeds—To be
subsidiaries to finance a part of their

Carl M. Loeb, Rhoades &
Co. and Wertheim & Co.
used

to

assist

construction

Stockholders will on May 15
vote to increase authorized common stock from
8,000,000
to
•

program.

10,000,000 shares.

Chesapeake & Ohio Ry.

May 5 it

and

was

announced




(5/15)
company has applied for

au¬

Halsey,

the time

Probable

Stuart

&

sale

the
of

the

writers for common stock.
Kidder, Peabody
Merrill Lynch, Pierce, Fenner & Beane.

bidders

Co.

Inc.;

for

The

Edison

Co.

of

New

York,

mortgage bonds, series H, due May 1,
(in addition to $40,000,000 series G bonds filed with
the SEC on March 30). Underwriters—To be determined
*

by competitive bidding. Probable bidders: Halsey, Stu¬
art & Co. Inc.; Morgan Stanley & Co.; The First Boston
Corp.; Merrill Lynch, Pierce, Fenner & Beane and White,
Weld
&
Co. (jointly).
Proceeds — To redeem a like
amount of Westchester

Lighting Co. 3¥2% general mort¬
Offering—Postponed.

Denver'

&

Rio

Grande Western

RR.

April 12, Wilson McCarthy, President, stated that due
to prevailing market conditions, the company has post¬
poned to an undetermined date the taking of bids for
the purchase of $40,000,000 first mortgage bonds to be
dated May 1, 1951, and to mature on May 1, 1981. Un¬
derwriters—To be determined by competitive bidding.
Probable bidders: Halsey, Stuart & Co. Inc.; Morgan
Stanley & Co.; Kuhn, Loeb & Co. and Bear, Stearns
& Co.
(jointly). Proceeds — Together with treasury
funds, to redeem on June 1, 1951, $35,062,200 oustanding
first mortgage 3%-4% bonds, series A, and $8,666,900 of
Denver & Salt Lake income mortgage 3%-4% bonds,
both due Jan. 1, 1993.
•

1

company expected to sell $8,000,to $10,000,000 of new bonds this summer.
Under¬
writers—To be determined by competitive
bidding. Prob¬
able bidders:
Halsey, Stuart & Co. Inc.; Kidder, Peabody
& Co., and Merrill
Lynch, Pierce, Fenner & Beane

000

(jointly); Smith, Barney & Co.; The First Boston Corp.;
Glore, Forgan & Co. (jointly).

W. C. Langley & Co. and
Proceeds—For expansion
in June

Offering—Expected

program.

July.

or

Gas

>■

Service Co.

April 20 it
of

was reported company plans to sell
$5,500,000
bonds late in June or early in July. Underwriters

new

—To

be

determined by competitive bidding. Probable
Halsey, Stuart & Co. Inc.; Blyth & Co., Inc. and
Kidder, Peabody & Co. (jointly); Lehman Brothers; The
First Boston Corp.; Merrill
Lynch, Pierce, Fenner &
Beane and White, Weld & Co.
(jointly); Union Securities
Corp. and Harriman Ripley & Co., Inc. (jointly). Pro¬

bidders:

ceeds—For
Glass

April

16

construction.

new

;

Fibres, Inc.
it

reported

was

that

company

do

may

some

stock financing later this year. Traditional un¬
derwriter—McCormick & Co., Chicago, 111.
common

Glenmore

April 23 it

Distilleries

Co.

(6/12)

announced company expects

was

shortly to
registration statement covering 30,000 shares of
$100 par preferred stock (with warrants attached), and

file

to

a

withdraw statement covering

159,142 shares of class
stock (par $1), Underwriter—Glore,
Forgan
Co., New York. Proceeds—For working capital and
general corporate purposes.
common

&

•

Green Mountain Power Corp.,
Montpelier, Vt.
May 4 SEC announced approval of a plan for reorganiza¬
tion, which, among other things, provides for sale of
104,094 shares of new common stock (par $10) through

underwriters, subject to the right of present preferred
stockholders to

subscribe for the new shares. Proceeds
will be used to repay bank loans and for new construc¬
tion.

Idaho Power Co.
Feb. 6, it was reported that this
company

will raise $18,500,000 through sale of securities this year. It is believed
that this financing will be through sale of
mortgage
bonds and preferred stock. Bond financing may be pri¬
vate, while preferred stock may be underwritten by
Wegener & Daly Corp., Boise, Idaho. Proceeds would go
toward expansion program, which,
cost nearly $23,000,000 for 1951.

Illinois Central
Bids

will

be

RR.

received

it is estimated, will

(5/17)

to noon (CDT) on May 17
purchase from the company of $3,900,000 equip¬
ment trust certificates,
series GG, to be d&ted May
1, 1951 and to mature in 30 equal semi-annual install¬
up

for the

ments.

Inc.

refunding

& Co. and

Florida Power Corp.
March 29 it was stated

of

new

1981

Probable

Iowa

Bros.

&

bidders:

Halsey,

Stuart

Co.

&

Inc;

Hutzler.

Public Service Co.

March 23 the company's report revealed it is anticipated
it will be necessary to provide
about $4,000,000 new
money

to finance its 1951 construction program.

I-T-E Circuit Breaker Co.
March 30 it

was announced stockholders on May 5 will
increasing the authorized indebtedness of the
company to $3,500,000 from $1,500,000, and the author¬
ized but unissued preferred stock from 15,000 shares to
30,000 shares, par $100.
"
r*

vote

on

•

,

Kansas City Power & Light Co.
Feb. 7, Harry B. Munsell, President, announced company
expects to raise $15,000,000 of new money through the
sale of new securities, including from $5,000,000 to $8,-

000,000
stock

preferred

and

bonds.

stock,

and

the

remainder

common

Probable bidders for

preferred stock:
Glore, Forgan & Co. and W. C. Langley & Co. (jointly);
Smith, Barney & Co.; The First Boston Corp.; White,
Weld & Co., 'Shields & Co.: and Central Republic Co.

(jointly); Harriman Ripley & Co., Inc.; Salomon Bros. &
and Merrill Lynch, Pierce, Fenner & Beane
(jointly); Union Securities Corp. and Stern Bros. & Co.
(jointly). Probable bidders for common stock: Lehman
Brothers; Glore, Forgan & Co.; Harriman Ripley & Co.,

Hutzler

Inc.

.

-

Kansas-Nebraska

Detroit Edison Co.
March

announced company plans to issue and

was

sell approximately 400,000 shares of common stock

through

nor

determined.

debentures:

gage bonds due

Carolina Natural Gas

Feb. 20

financing

March 23 company applied to New York P. S. Commis¬
sion for authority to issue and sell $25,000,000 of first

bonds:

(jointly); White, Weld & Co.;. Blyth &

been

Consolidated

Halsey,
Stuart & Co. Inc.; Smith,
Barney & Co. and Carl M. Loeb,
Rhoades & Co. (jointly); Shields & Co.; Merrill Lynch,
Pierce, Fenner & Beane and Kidder, Peabody & Co.
First

by competitive bidding. Probable bid¬
ders may include Kidder,
Peabody & Co. and Merrill
Lynch, Pierce, Fenner & Beane (jointly); Salomon Bros.
& Hutzler; Harriman
Ripley & Co., Inc.; Equitable Secur¬
ities Corp.; Union Securities Corp.
Probable under¬

Salomon

than $11,000,000 through the sale of $6,000,000 new first
mortgage bonds and 250,000 shares of common stock

about, mid-1951.

additional

contemplates

company

First Boston Corp.; Glore, Forgan & Co.; Morgan Stanley
& Co. Proceeds are to be used for construction program.

California Oregon Power Co.

April 20 it

or

the

Neither the nature

financing has

and Fahnestock & Co.

Edison Co.

announced

was

at 110 and accrued
a

in the Spring or early

Probable bidders for debentures: Halsey, Stuart

Inc.; Morgan, Stanley & Co.; Kuhn, Loeb & Co.;
Salomon Bros. & Hutzler; Lehman Brothers; Merrill
Lynch, Pierce, Fenner & Beane and White, Weld & Co.

Rains, President, revealed that the com¬
is considering a plan to refinance its 7% cumula¬
participating preferred stock (par $100), about
These shares

System, Inc.

& Co.

F.

50,000 shares outstanding.

Gas

reported that corporation may issue and

was

summer.

Co.; Smith, Barney & Co.; Merrill Lynch, Pierce, Fen¬
ner & Beane; A. G.
Becker & Co- Inc.
Jan.

it

sell $35,000,000 of new securities

a bid for the stock
is an amount aggregating $3,034,800. Accordingly the auction will be opened by the

Probable

7

from

to be determined

B

Power Co.

April 13 it was reported that the company may do some
debt financing to raise additional necessary funds for its
1951
construction program.
Will probably be placed
privately.

mit

bid.

Corp.; Glore, Forgan & Co. and W. C. Langley &
(jointly); Equitable Securities Corp.

Colorado Central

Inc.

pany), Schoellkopf, Hutton & Pomeroy, Inc. and Lehman
Brothers and including many of the stockholders and
employees of the company, has formerly agreed to sub¬

said

if

sale,

Boston

The sale does not represent new financing. A group rep¬
resented by Charles A. Buerk (President of the com¬

of

for construction program.

negotiated, may be handled by Dillon,
Probable bidders for any bond financ¬
ing are: Halsey, Stuart & Co. Inc.; Dillon, Read & Co.
Inc.; Blyth & Co., Inc.; White, Weld & Co.; The First

(6/6)
Bids will be received at the office of Alien Property, 120
Broadway, New York 5, N. Y., at 1:30 p.m. (EDT) on
June 6 for the purchase of 5,058 shares of common stock
(no par value), being 45.98%

Co.,

common stock (par $7.50) wa»
1,600,000 shares to 2,500,000 share®
preferred stock (par $100) from 120,000 to 250,000 shares.
Underwriters for preferred stock

increased

and the authorized

Read & Co., Inc.

30, J. V. Toner, President, announced that com
pany plans to issue $32,000,000 of securities to aid in
financing its construction program, which, it estimated,
will cost $65,300,000 through 1954.
He added that no
common stock financing is planned until 1955.

announcement

be used

stock

Co.*

Jan.

Buffalo

reported company expects to market late
early in 1952 between $25,000,000 apd
of new bonds.
Probable bidders:
Halsey,

Florida Power Corp.
March 29 the authorized

or

Electric Illuminating Co.
it was reported company may in the fourth
quarter of 1951 issue new preferred stock or first mort¬
gage bonds, or obtain short-term bank credit to finance
its construction and improvement program.
Preferred

'

Boston

Co.

April 4

Stanley & Co.

Bigelow-Sanford Carpet Co.
May 1 it was reported that company is considering is
and

Electric

Cleveland

.

suance

&

Inc.; Morgan Stanley & Co.; Kuhn, Loeb &
(jointly); Blyth & Co.,
Inc., and The First Boston Corp. (jointly); Union Se¬
curities Corp.; Glore, Forgan & Co. and White, Weld & '
Co. (jointly); Lehman Brothers; Harriman Ripley &
Co.,
Inc.; Merrill Lynch, Pierce, Fenner & Beane,
Proceeds

Atlas Powder Co.

•

Gas

Co. and Salomon Bros. & Hutzler

April 27, it was reported that capital expenditures for
the coming 12 months have been tentatively budgeted
at $4,500,000 and that some financing
may be necessary.
Probable underwriter—Morgan

the

Stuart & Co.

the

made

Proceeds to be used for new construction costs.
•

refund

to

was

year

$30,000,000

an

No underwriting likely to be involved.

year.

bonds

$49,988,000 4%
July
1, 1952. Refunding of the $14,662,000 first and refunding
mortgage 4J/4% bonds, series D, due Sept. 1, 1962, is
also said to be a possibility. Probable bidders:
Halsey,
Stuart & Co. Inc.; Morgan Stanley & Co.; Lee
Higginson
Corp.; Harris, Hall & Co. (Inc.); Drexel & Co.; Kuhn,
Loeb & Co. and Salomon Bros. & Hutzler
(jointly); Har¬
riman, Ripley & Co., Inc.; First Boston Corp.; Lehman
Brothers; Paine, Webber, Jackson & Curtis; Kidder,
Peabody & Co.

letter of notification with the SEC covering $300,000 of
6%

some

non-callable consolidated first mortgage bonds due

Drexel & Co.; Union Securities Corp. and Equitable Se¬
curities Corp. (jointly); Kidder, Peabody & Co.; The
First Boston

future

near

Shields

45

(1931)

19

it

this Fall.

$35,000,000

company

of first

mortgage

Underwriters—To be determined by

program.
Dow

Chemical

Co.

April 5, Leland I. Doan, President, stated that the com¬
pany plans to spend $65,000,000 on plant expansion in
the current fiscal year ending May 31, 1951, and expects
to spend somewhat more in the following fiscal year.
He added, however, that no decision has been reached
on any possible financing in this connections Traditional
underwriter:

Natural Gas Co., Inc.
15, it was announced that company plans to raise
$4,200,000 through the sale of debentures or first mort¬
gage bonds in the spring of 1951 (this is in addition to
recent sale of 10,950 shares of $5 cumulative preferred
stock (no par) at $105 per share plus accrued dividends
and 133,812 shares of common stock (par $5) at $15 per
share (the latter to common stockholders).
The bond
financing early last year was placed privately through
Central Republic Co. (Inc.), Chicago, 111. The proceeds
are to be used for the company's expansion program.
Feb.

announced

plans to sell ap¬
bonds early
competi¬
tive bidding.
Probable bidders: Halsey, Stuart & Co.
Inc.; Coffin & Burr, Inc., and Spencer Trask & Co.
(jointly); Morgan Stanley & Co.; The First Boston Corp.;
billon, Read & Co. Inc. Proceeds —For construction

proximately

was

Smith, Barney & Co., New York.

•

Kansas Power &

Light Co.

May 5 stockholders approved proposals to increase the
authorized
000

shares

preferred stock from 200,000 shares to 400,and

indebtedness

the

from

authorized

$9,000,000

to

amount

of

unsecured

$14,000,000.

Continued

on

Probable
page

46

46

The Commercial and Financial Chronicle

(1982)

.

.

.

Thursday, May 10, 1951
*'"

**

"r

Continued

from

page

lative preferred stock

Halsey, Stuart & Co. Inc.; Blyth &
Co., Inc.; White, Weld & Co.; The First Boston Corp.;
Glore, Forgan & Co.; Equitable Securities Corp.; Harriman Ripley & Co., Inc.
Laclede Gas

Panhandle

Jan.

30, R. W. Otto, President stated it appears likely
the company will sell additional mortgage bondis
some time this year to finance its 1951 construction re¬

Co.; White, Weld & Co.; Lehman Brothers and Merrill
Lynch, Pierce, Fenner & Beane (jointly).

Pipe Line Co., Cleveland, Ohio

pipeline facilities which will carry
natural gas into northeastern Ohio for the first time.
Financing plan
includes the issuance and sale of
$1,075,000 in bonds to Stranahan, Harris & Co., Inc.,
Toledo, O., $225,000 in preferred stock and $150,000 in

or

and

operate

stock.

common

Michigan Consolidated Gas Co.

this year $15,000,000 first mortgage bonds. Underwriters—
To be determined by competitive bidding. Probable bid¬
about

\JBlyth

and
& Co. and

Halsey, Stuart & Co. Inc.; Smith, Barney & Co

Co.

&

Inc.

(jointly);

White, Weld

(jointly); Harriman Ripley & Co. Inc.
and Union Securities Corp. (jointly); Glore, Forgan &
Co. and W. C. Langley & Co. (jointly). Proceeds—For
construction.
/
'
■; .*
Lehman Brothers

.

,

Milwaukee Gas

r

April 25 it was reported' company may issue some ad¬
ditional bonds this year, if conditions so warrant. Under¬
writers—To be determined by competitive bidding. Prob¬
able bidders:

1951

construction program.

Expected late

Summer

Halsey, Stuart & Co. Inc.; Glore, Forgan &

Co. and Lehman Brothers

(jointly); Kuhn, Loeb & Co.,
Smith, Barney & Co. and Blyth & Co. Inc. (jointly);
Kidder, Peabody & Co.; Harriman, Ripley & Co. Inc.

Proceeds—For construction.

Mississippi

like amount of 3% bonds due 1956.

(7/17)

Power Co.

Feb. 6, it was reported that this company contemplate!
the issuance and sale of $4,000,000 of preferred stock

Probable bid¬

Halsey, Stuart & Co. Inc.; Glore, Forgan & Co. and
White, Weld & Co. (jointly); The First Boston Corp.

Pitney-Bowes, Inc.
announced company

was

plans to sell addi¬

tional convertible preferred stock from time to time for
"new money."

Public

Service Co.

of

Colorado

Nov. 1, J. E. Loiseau, President, announced that "it will
be necessary

in

purposes

cumulative

approximately
retire

to

convertible

the
pre¬

working capital.

Transmission

was

of

uesd

Corp.

authorized to construct facilities

Incorporated
was

Thorer &

Hollender, Inc., New York City (5/17)

Bids

ders:

March 29 it

be

stated stockholders will on May 23 vote
increasing authorized common stock to 3,000,000 from'
2,000,000 shares. Traditional underwriter: Blair, Rollins
& Co., New York.

program.- If market conditions are favorable, it is also
planned to sell an additional $15,000,000 of bonds to re- /
a

Eastern

company

total

on

Peoples Gas Light & Coke Co.
April 6 it was reported that company may sell $20,000,000
of new bonds this Spring to provide funds for expansion

fund

27

Textron

early Fall.

.

Light Co.

Texas

Feb.

March 30 it

v

April 25 it was stated company may issue later

ders:

For

4x/4%

a

to

feet.
This project, it is estimated will cost $96,-:
305,118, and includes approximately 791 miles of pipeline:
extending from a connection with United Gas Corp.'s,
system near Kosciusko, Miss., through Alabama, Ten¬
nessee, Kentucky, and Ohio to a connection with Texas
Eastern's existing system near Connellsville, Pa.
The,
company's financing program includes the sale of $78,000,000 first mortgage bonds (to be placed privately), the
replacing of a $10,000,000 bank loan with a new bank:
loan of $20,000,000, and the sale of $45,000,000 of pre¬
ferred stock, $20,000,000 of which already has been sold.
Traditional underwriter for preferred stock: Dillon, Read
& Co. Inc., New York.

Ripley & Co., Inc. Probable bidders for preferred stock:
W. C. Langley & Co. and Glore, Forgan & Co. (jointly);
Kuhn, Loeb & Co.; Smith, Barney & Co.; Kidder, Pea¬
body & Co.; Harriman, Ripley & Co., Inc. Proceeds—

struct

outstanding

are

ferred stock and for additional

Lehman Brothers and Drexel & Co. (jointly); Harriman

authorized this company to acquire, con¬

FPC

raise

cubic

16 it was reported company plans to issue and sell
$3,000,000 of first mortgage bonds, $2,500,000 of preferred
stock and $2,500,000 of common stock (latter to General
Public Utilities Corp., parent). Underwriter—To be de¬
termined by competitive bidding. Probable bidders for
bonds: Halsey, Stuart & Co. Inc.; Kidder, Peabody & Co.;
Merrill Lynch, Pierce, Fenner & Beane; Union Securities
Corp. and White, Weld & Co. (jointly); Equitable Secur¬
ities Corp.; The First Boston Corp.; Kuhn, Loeb & Co.,

bonds due Feb. 1, 1965, and

present

to

proceeds

which will increase the daily capacity of its system by:
465,700.000
cubic
feet
to
approximately 1,206,500.000.

may

Pennsylvania Electric Co.

$6,500,000 ZVz% bonds due Dec. 1, 1965, through the is¬
suance of possibly
$28,000,000 of new bonds. Probable
bidders: Halsey, Stuart & Co. Inc.; Goldman, Sachs &

15

was

Feb.

31, 1950. It was also stated that the company is giving
serious consideration to early refinancing of its out¬
standing $19,000,000 3Vz%

Eastern Pipe Line Co.
reported that the company

issue andi
sell additional securities to provide funds for its expan¬
sion * program.
Traditional underwriter: Kidder, Pea¬
body & Co.
April 4 it

quirements. During the current fiscal year, he said,
about $10,000,000 may be spent for new construction, oi
which more than $4,000,000 had been spent up to Dec.

Lake Shore

The

Co.

that

Feb.

sufficient

$5,500,000.

(par $100) with an equal amount
lower dividend rate and may
issue additional common stock (par $10) provided mar¬
ket conditions warrant such action, to finance construc¬
tion program. Probable underwriters: Lehman Brother®;'
Smith, Barney & Co.; Harriman Ripley & Co. Inc.

for bonds:

bidders

debtedness

of preferred stock with a

45

to raise additional funds for construction
the second quarter of 1951.
The amount

needed is estimated at about

will be received at the Office of Alien Property,
Department of Justice, 120 Broadway, New York 5, N. Y.,;
on or before 11 a.m.
(EDT) on May 17 for the purchase;
of 6,445 shares of capital stock
(being 100% of the out-:
standing stock). The sale does not represent new financ-ing. Business—Imports and sells furs, mainly Persian1
Lamb, in the United States.
•

United Gas

May 9 it

Corp.

reported company will be in the market
for $50,000,000 to $60,000,000 of
long-term bonds, plus
a large
equity issue, within a few weeks, and later in.
the

plans

year

it

27

was

additional

announced

was

debt

financing.

On

Feb.

plans to issue

$145,000,-^
000 debt securities and will loan the
proceeds together *
with other funds, to its
subsidiary, United Gas Pipe^
company

Line Co. to be used for the latter's construction program.
bidders for bonds: Halsey, Stuart & Co. Inc.;

Probable

Dillon,

Read

& Co. Inc.; Equitable Securities Corp.;.
Ripley & Co., Inc. and Goldman, Sachs & Co..'
(jointly); The First Boston Corp,
'
.

$7,000,000." Probable bid¬
reported issue of $15,000,000 new bonds are; '
Halsey, Stuart & Co. Inc.; Blyth & Co., Inc. and Smith,
Barney & Co. (jointly); The First Boston Corp.; Lehman

Harriman

Brothers; Kidder, Peabody & Co.; Harris, Hall & Co.
(Inc.); Glore, Forgan & Co. and W. C. Langley & Co.
(jointly).

Feb. 27 FPC authorized company to carry out an expan-,
sion program, which will include construction of approx- *

ders

for

a

,,

..

United Gas Pipe Line Co., Shreveport, La.

•

*

imately 1,000 miles of pipeline, at a total estimated costof $111,861,749.
Company will finance construction by
^borrowing $150,000,000 from its parent, United Gas Corp.'
Glore, Forgan & Co. and Sterne, Agee & Leach (jointly);
March 21 company applied to the New York P. S. Com¬
(which see above).
:
Blyth & Co., Inc.; The First Boston Corp.; Kidder, Pea-- mission for authority to issue $5,000,000 of first
mortgage
United Stores Corp.
*
"
body & Co. and White, Weld & Co. (jointly); Lehman
bonds and 150,000 additional shares of common stock
April 24 stockholders voted to increase authorized $4.20:
Brothers; Union Securities Corp. and Equitable Securi¬
(the latter for subscription by common stockholders on a
non-cumulative preferred stock to 1,200,000 from 1,ties Corp. (jointly); Merrill Lynch, Pierce, Fenner &
basis of one new share for each seven shares held). Bonds
Beane.
Proceeds—For
construction program.
031,856 shares and the common stock to 1,808,144 from <
Bids—
may be placed privately, with the common stock issue
1,640,000 shares. Company has no immediate plans for '
Tentatively expected to be received on July 17. Regis¬
underwritten by The First Boston Corp. Proceeds—For
tration—Scheduled for June 15.
any financing.
new construction.

(par $100). Underwriters—To be determined by competi¬
bidding. Probable bidders: W. C. Langley & Co.,

tive

Rochester

Gas

&

Electric Co.

•

■

National

Utilities

Co.

of

Michigan,

Co Id water,

Michigan
March

6

sought FPC authority to construct
about 76.7 miles of pipeline, at an estimated cost of $1,500,000, to be financed by issuance and sale of first mort¬

gage

company

bonds.

•;

•
Sangamo Electric Co.
May 3, Donald S. Funk, President, announced company
plans a public offering of approximately 111,000 addi¬

tional

shares

common

effected.

as

soon

Underwriter—Paul

H.

as

registration

Davis

;

&

can

be

Co., Chicago,

Illinois.

.

United

between
or

shares to provide funds to invest in additional stock of

natural gas pipe line company operating in Massa¬
chusetts or to acquire a majority interest on
any Massa¬
chusetts gas or electric company. A year ago, the follow¬
ing served as managers of a group of participating *
dealers in obtaining subscriptions:
Townsend, Debney &
Tyson; A. C. Allyn & Co., Inc.; Draper, Sears & Co.; F. L.
Putnam & Co., Inc.; Smith,
Ramsay & Co., Inc.; Wagenseller & Durst, Inc.; and G. H. Walker & Co.

New
»

Jan. 24 it

England Power Co.
was

estimated that $32,000,000 of new
financing

will be required prior to Dec.
31,1952. Between 70,000 to

80,000 shares of preferred stock

be initially offered.
Probable bidders: Harriman
Ripley & Co. Inc.; Lehman
Brothers; Kidder, Peabody & Co.; First Boston Corp.;
Merrill Lynch, Pierce, Fenner & Beane: W. C.
Langley
& Co. Proceeds to be used to
repay bank loans and for
may

Sharon Steel Corp.

New

reported that company tentatively plans
to issue and sell $2,500,000 of
preferred stock to public
and $1,500,000 of common stock to General
Public Util¬
ities Corp., parent.
Underwriters—For preferred to be
determined by competitive
bidding. Probable bidders:
Drexel & Co.,

Kuhn, Loeb & Co., and Lehman Brothers
(jointly); W. C. Langley & Co.; Smith, Barney & Co.
Union Securities
Corp. (jointly); Kidder, Peabody
Hutzler.

Weld & Co. (jointly); Salomon

Proceeds

—

Bros.

For 1051

and

construction program.
early Fall.

New York State Electric & Gas
Co,
April 4 it was reported company is
considering issue
and sale of $10,000,000 to
$12,500,000 of first mortgage
bonds or a common stock issue.
If bonds, they
may
be placed privately.
Traditional underwriter: The First
Boston Corp., New York.
Proceeds would be used for
additions and improvements to

property.

Oklahoma Gas & Electric Co.
Dec. 20 D. S.

Kennedy, President, said company is con¬
sidering refunding outstanding $6,500,000 5y4% cumu¬




v

was

announced company

plans to issue and

sell 100,000 shares of new convertible second preferred 1
stock (par $50). Underwriter—F. Eberstadt &

Co.,-Inc.,'
Proceeds—Together with funds from private :
$4,000,000 of 20-year sinking fund notes, to be used toward expansion program,
New York.

sale

of

standing. The company's expansion plan, recently an-1/
nounced, will sharply increase ingot capacity, pig iron
•
Virginia Electric & Power Co.
r
and coke output and finishing facilities.
The additions
May 1 the company announced that it is contemplated
and improvements are to be
completed over the next
that there will be additional financing to an amount ap- •
five years.
proximating $20,000,000, after sale of the additional ;
Sharon Tube Co.
common
stock registered with SEC (see above), inci- ;
March 29 it was stated
company may issue $1,800,000
dent to the 1951 construction
program, and that further
additional capital stock (par $10) to finance its new
financing will be required in 1952.. Probable bidders
continuous buttweld mill expansion.
for bonds:
Halsey, Stuart & Co. Inc.; Salomon.-Bros. & .
•

Slick Airways, Inc.
May 3 it was reported company plans registration
200,000 shares of common stock.
Underwriter—F.

Moseley

&

Co-,

New

York.

Proceeds—For

of
S.

expansion

program.

24

plans
this

a

bond

Smith,
issue

of

President,
more

than

announced

company

Underwriters—May be determined by

com¬

petitive

bidding. Probable bidders: Halsey, Stuart &
Inc.; Lehman Brothers; Blyth & Co., Inc. Proceeds—
To refund the presently outstanding
$4,000,000 of 41/8%
first mortgage bonds and repay
outstanding short-term
bank notes which

are

due before the end of the
year.

April 4, the company indicated that it would soon be in
with $18,000,000 of senior securities. Prob¬
able bidders:
Halsey, Stuart & Co. Inc.; Blyth & Co.,
Inc.; White, Weld & Co.; Lehman Brothers; Merrill
Lynch, Pierce, Fenner & Beane and Harris, Hall & Co.
(Inc.) (jointly).
the market

Sutherland

May

4

near

future

Paper Co.,

company
on

Kalamazoo,

Mich.

announced

stockholders

will

vote

in

authorizing

convertible preferred

the issuance and sale of
stock to common stockhold¬

through rights. The company is currently negotiat¬
ing with Lehman Brothers and Harris, Hall & Co. (Inc.)
ers

for

the

19

stockholders

increased

authorized

sale

of

the

preferred stock and long-term in-

,

common

for

issuance

order to

"when,

make

as

available

-

additional

and if it should be con¬

sidered advisable."

Washington Gas Light Co.
March 8 it

was

announced

;

that company

m$!y issue

ap-

'

proximately $9,000,000 of bonds or obtain bank loans (or
some combination thereof)
during 1951 and apply the ;
proceeds toward its construction program. Probable bid¬
ders for bonds:

Southern California Gas Co.

new

March

stock

$8,000,000 by fall of

,

Wagner Electric Corp.

1,000,000 shares in

Jersey Gas Co.
Earl

Co.

•

Hutzler; Stone & Webster Securities Corp.; Union Securities Corp.; White, Weld & Co.

stock from 600,000 shares (499,016 shares outstanding) to

year.

and

f2 £°- *nd
&

At present, the company has 925,863 shares out-.

South

was

Expected late Summer

authorized capital stock to 2,500,000 from 1,000,000

crease

shares.

April

Jersey Power & Light Co.

Kidder, Peabody & Co. handled pri- *
issue of $2,500,000 debentures in*

an

March, 1950.
March 30 it

March 27 stockholders voted to increase the debt limit of
the company to $30,000,000 from $15,000,000 and to in¬

construction program.
Feb. 19 it

placement of

Victor Chemical Works

England Gas and Electric Association
May 1 stockholders consented to an amendment to the

any

said company plans issuance and sale of "
$2,000,000 and $3,000,000 additional debentures '
was

bonds this year.

vate

New

Association's declaration of trust to permit the trustees
issue presently
authorized but unissued common

Utilities, Inc.

April 11 it

Halsey, Stuart & Co. Inc.; Blyth & Co., **
Inc.; Smith, Barney & Co. and White, Weld & Co. (joint- •
ly); W. C. Langley & Co. and The First Boston Corp. •
(jontly); Equitable Securities Corp.; Alex. Brown & Sons. *
Western Maryland

Ry.

April 20, E. S. Williams, President, intimated that com¬
pany may decide at a later date to attempt to refinance
about $15,500,000 of first mortgage bonds due in
October,
1952, which remained outstanding after expiration of an
exchange offer in January, 1950.
Wilton Woolen Co.

April 6 it

was

SEC shortly a

reported company expects to file with the
registration statement covering an unde¬

termined amount of

Allyn & Co., Inc.

common

stock.

Underwriter—A. C.

Volume 173

Number 5010

.

.

The Commercial and Financial Chronicle

.

(1983)
but if the
it

Our

"Next

The

Reporter's
Report

Big

next

underwriting

writing is
when

Co.,

tangent

new

a

of

promise

some

moments to

The

the least.

say

with

view to

a

those that

weeding out

to feed inflation and

likely

as

advising that

such

projects

more

propitious times.

Well, it looks

until

deferred

be

slated

decisions

will

real

of

test

further

come

its

against

up

a

without

purposes

Deal

Natural

be

bidding
the

uled

on

to

bonus issue looms

initial

bone

meet

with

committee has suggested

dertaking

be

shelved.

for

50

60

to

June 15, 1951

Milwaukee

issuer

and later in the
debt

Governor of the State

given the

millions

of

week

and

it

next

be

Wednesday,

interesting: to see;

what the outcome will be. Several

to

seek

the

bonds, but these had

tentatively

to

forego

In

these

Now

the

Investment

business

that

if

of

naturally

they

they

do

not

take

may

a

fear

bids,

enter

issue

the

up

Dinner

Summer

Outing

the Manufacturer!

at

Golf and Country
Pa.

with

re¬

sultant possible loss to them.

June 18-23, 1951

Club, Oreland

of

to

see

months

them

back, would like
on new issues.

embargo

an

By creating a "scarcity," at least
a spell, such a development is

for

counted
covery

least

to

bring about re¬
in prices which would at
upon

soften

the

blow

holders have suffered.
But

there

things

will

is

no

the

opinion

that

these

out

that

interests

where

that

that
way.

are

of

State

at

the Country Club of Maryland.

and

mination is to go ahead with such

financing until stopped by politi¬
from

"higher-up."

Bond

Club

nual

May

the

business

Investment

POWER

Street,

was

of

of

declared

June

1,

close

of

on

1951, to
business

tend

that

still

is

new

the

people

in

and the latter
newed

issues. They

western

market

inclining to

are

heaviness.

They

point

to

LIGHT

&

New

York

decision

bonds

of

ness.

by

Its

the

new

position

higher

bill

The

eight billions of 2%
Sept. 15, was looked

explaining current heavi¬

upon as

emphasized

was

rate

fixed

COMPANY

6,

N.

its

issue.

noticeably heavy, back¬
a

2.05%

They had been pretty much

yield

as

basis.
on

the

the 2s of Sept. 15,




May

on

quarterly

a

cents

share

per

shares, of

stock of the

Company,

on

June 6, 1951 to hold¬

of record at the close of busi¬

May 11, 1951.

On

Jaeger, Treasurer

-

Y.

90th CONSECUTIVE

DIVIDEND

share

QUARTERLY DIVIDEND

&

The

of

Board

SERBORBD

of

Directors

B.

Babbitt, Inc. has declared

WV3ACK, Secretary and Treasurer

a

per

T.

finance

share

COMMON

Common Stock of the Com¬

the

Group

payable

2,

July

on

of business

1951

of

cents a share on
Common Stock payable July
10, 1951
stockholders of record June 21,1951.

to

Investment
out¬

May 7, 1951

Dividend No. 38
on

PREFERRED

Common Stock

dividenJ^oFMCfip

A regular quarterly

v-

per share has been declared, payable
June 21. 1951, to holders of record
at the close of business on May 25,

/

1951

- ■■■

^

Corporation.

preceded

cocktail

by

>:

I

>;

for

party

May 30, 1951
Dallas

Beaunit
-

June

Field

Club

Day

at

Lake Forest,

Annual
Delta

annual
Knollwood Club

Club

Stock

&

Bond

Club

Field

Day

New

at

holders of

are

pre¬

payable July 10,

Treasurer

mI

per

has

June
of

4,

record

1951.

H.

POLONSKY, Secretary

record at the close

Imperial Oil Limited

195th

Imperial Oil Building,

Consecutive Dividend

of business

June 8, 1951.

DIVIDEND

1, Ontario.

A dividend of

19

regular quarterly dividend of eighty-one
and one-quarter cents (,8VA4)
per share
on
the 3'/4% Cumulative Convertible Pre¬
ferred Stock, $100 par value, of this Com¬
pany has been declared,
payable June 5,
1951, to stockholders of record at the close
1951.
not

be closed.

Chesks will be mailed.

the Montclair

share

NOTICE

SHAREHOLDERS

TO

HOLDERS
A

dividend

OF

of

SHARE

30c

AND

WARRANTS

;

share, " payable in
Canadian funds, has been declared on the out¬
standing shares of the Company, payable June
1, 1951.- Registered shareholders of record May
16,
1951,
will
receive
dividends
by
cheque.
Dividends in respect of share warrants will bo
paid on or after June 1st, 1951, by The Royal
Bank
of
Canada
on
presentation
or
coupon
per

one

76.
Transfer books

to May 31,

will

inclusive,

non-residents

(New York, N. Y.)

may

currencies

May 3. 1951,

the

at

be

closed

from

May

17

dollar

($1.00)

on

stockholders of record
of

business

stock

on

transfer

at

the close

May 4, 1951. The
books

will

remain

open.

Robert Fisher

number

W. E. HAWKINSON,

.

the Capital Stock of
the Company has been declared this
day, payable on June 9, 1951, to
per

A

Transfer books will

Jersey An¬

NO.

Secretary and Treasurer,

June 8, 1951

Stock, Series B. All

THE TEXAS COMPANY

outstanding common stock, without
par value, of this Company has been de¬
clared, payable June 80. 1051, to stock¬

of business May 21,

(New Jersey)
of

N.

-

stockholders

to
21,

50c

Stock

payable

Toronto

Spring Outing aboard the

1, 1951

108

i

(Cincinnati, Ohio)

Queen.

June

NO.

of

Common

and

Chicago

111.

DIVIDEND

the

regular quarterly dividend of seventyfive cents (75tf)
per share on
the issued

PREFERRED

June 1, 1951

declared

Con¬

A

(Chicago, 111.)
of

COMMON

dividend

on

May

„

1951

quarterly

share
been
1951,

annua i

outing.

Club

1,

A

fJLM*UIS-CHALMERS
ACV

$1.35

33%
$1.35 Convertible

to

April 26,

Mills, inc.

t

dinner

MFG. CO.

Bond

on

on

Stock, and

stockholders of record June
21, 1951.
A. E. WEIDMAN

'v

(Dallas, Tex.)

Memorial Day

share

a

Preferred
1951

>A

guests, May 24).

cents

share

a

Preferred

ferred dividends

May 9, 1951.

and
out-of-towD

DIVIDENDS

$2.60 Convertible Preferred Stock,

33% centr

•

.

on

vertible

the Common Stock of Atlas

on

STOCK

The directors also declared
regular
quarterly dividends of 65 cents a share

Goll

Municipal Bond Dealers Group

be

DIVIDEND

Quarterly Payment

terly dividend of 45

W. GEISMAR, Treasurer

LEO

STOCK

Consecutive

The Board of Directors of Seaboard
Finance Co. declared a
regular quar¬

June 12, 1951.

on

company

regular

to stockholders of record at the close

Atlas Corporation

May 25, 1951 (Cincinnati, Ohio)

April 24, 1951

-

-

Treasurer

1951. Dividends payable to
bo converted
into foreign

rate

prevailing

on

flate

cf

presentation.

Club

Bond

of

New

York

27th

BY

Field

annual

Day at the Sleepy
Country
Club, Scarbo¬

Hollow

N.

rough,

Y.

COLIN D.

May

(San Francisco,

-fl-E

ORDER OF THE BOARD.

CRICHTON, General Secretary.

1951.

AMERICAN

Francisco Security Traders

Shreveport, La.,
May 1,1951

TILE

Association annual spring party at
Diablo Country Club, Diablo,

The Board of Directors of the
■■

ENCAUSTIC TILING

COMPANY, INC.

Company has declared regular

■■

quarterly dividends of 25 cents

New

York

Central

Railroad

tors

Company

Annual

The New

Meeting of the Stockholders of

York Central

Railroad

as

may

be lawfully brought before the

meeting, will be held in the Ball Room of the
Hotel Ten Eyck, 87 State Street, in the City of
Albany, N. Y., on Wednesday, May 23, 1951, at
12 o'clock Noon, Eastern Daylight Saving Time.
Stockholders of record at 3 o'clock P. M., on
1951, will be entitled to vote at the

April 20,
meeting.

.

JOSEPH M. O'MAHONEY, Secretary.

a

today

mon

,

Dividend

a

share

on

the Com¬

Stock, payable May

on

the

common

stock

$1,125 per share on the

convertible
of the

payable

on

preferred

company,

both

June 1, 1951, to

stockholders of record at the

Quarterly Dividend

The Board of Directors has declared

close of business May

1,1951.

a

regular quarterly dividend of 50c per
share

May 24, 1951.
G. W. THORP, JR.

share

stock

DAYTON, OHIO
20th Consecutive

31,*

1951, to stockholders of record
on

LIGHT COMPANY

■■

■■

and

4.5%

■■

de¬

quarterly dividend of

12*A cents

Company, for

the election of Directors and of three Inspectors
of Election and the transaction of such other

has

clared

Albany, N. Y„ April 13, 1951.
The

THE DAYTON POWER AND

The Board of Direc-

NOTICE

per

Common

.

The

DIVIDEND NOTICE

mm

■■

the

MEETING

COMMON AND PREFERRED
.

WALL &
FLOOR

Calif.)
San

3,

::::::::::::
Manufacturers of

June 8-9-10, 1951

business

ing down to about

same

for

five-year notes of 1954-55

have been

20

Atlanta, Georgia

Club—South¬

May 24-25, 1951 (Dallas, Tex.)

the

some
on

declared

outstanding

payable
ers

65th

Treasury not to exercise its right
to call

DIVIDEND NOTICES

on
the Capital
Light Company
May
8,
1951,
for
payment
stockholders of record at the
May 18, 1951.

per

Power

Calif.

week.

week's

the

on

Banking

33 Pine Street, New York 5, N.Y.

Bond

Spring
ing " at the Oklahoma City
and Country Club.

re¬

the meager demand which greeted
the State of Michigan loan this

This

1951,

3,

Coj

annual

Day outing.

pany,

City;

Association

<

Bankers

con¬

governments

on

meeting held

pany, at a

common

on

-

Oklahoma

to

municipal

hinged

Club

Bond

quarterly dividend of 15c

Di

.

be carried away by the potentials
of
a
shutting-off of a part of

prospective

Dallas

(Dallas, Tex.)

ness

STOCK

24c

American

Golf Club.

inclined

not

are

COMPANY

(INCORPORATED)

Of

22, .1951; (Oklahoma

nual

harder-headed

share

NOTICES

THE SOUTHERN

ronado Hotel.

Washington an¬
outing at the Manor Club,-

Bond

Treasurys the Key
The

of

net

Security Traders As

sociation Convention opens at Co

C.)"J

May 18, 1951 (Washington, D.

Cincinnati
au¬

thorized by the voters, the deter¬

pressure

National

DIVIDEND

Commerce, University

Rector

dividend

Stock

:;

or

municipal borrowing has been

cal

per

1949.

Sept. 30, 1951 (Coronado Beach,
Calif.)

umbus

CAPITAL
A

joeiation annual Spring outing

Bond

'

assurance

turn

"Off-the-Street"

in

a

$4.49

or

L. H.

(to

with

under

the

to

with

compares

$116,149,079,

DIVIDEND NOTICES

market
several

Hills

Pennsylvania.

Field

sizable inventories when the

caught

from

Chicago This

Nordic

Country Club.

(Philadelphia,

of Cincinnati annual spring party
at the Maketewah Country Club

slid

of

for

Creole

$166,930,337, equivalent to $6.45 per share.

Walter A. Peterson, Treasurer

Naturally people long of State
municipal issues, particularly
others

the

of

amounted

dividend of

American

Texas Group Investment Bank¬
ers Association Annual
Meeting.

and

and

Club

at

1950

year

financing.

new

income

Directors of The Southern Com¬

Pa.)

On the Fence

dealers

outing

Oct. 12, 1951

other aggregation of capital

some

(Philadelphia, Pa.,

Philadelphia

nance

May 18, 1951 (Baltimore, Md.)

Okla.)

in

are

quandary. With the State evident¬
ly determined to go through with
the

15, 1951

Two

....

,

groups

constitute

Club.

AMERICAN

'

'

deal.

Corp,
capital stock (par $5) at $82.12%
per share.
This offering does not

EVENTS

banking, groups had been formed
agreed

and

golf

Investment Traders Associattm

for this

due .to be opened

are

from

shares of Creole Petroleum

Investment Bankers Association

Baltimore Security Traders As*

will

lune

financing.

COMING

for its sale.

-Proposals

Lake

Traders

.

summer

Corp. Stock

back

issue and that bids will be called

one

Oconomowoc

at

Country

plans addi¬

year

Club

large

a

few weeks

a

Bond

Seminar at Wharton School of Fi¬

the

comes

mandate

38, 1951 (Chicago, 111.)

Bond

(Milwaukee, Wis.)

for

construc¬

plus

money,

summei

Net
June

gas

sched¬

are

the

equity issue, within

un¬

But

be

13.

the

of

United Gas Corp. will be in the

The

this

—

Michigan

prevailing

with the argument that the voters
have

outing at the Plum Hollow Coun¬
try Club.

and

long-term

Associatioi

to

Club

and

Wednesday evening,

today. The proceeds
by the company to

used

(Detroit, Mich.)

Traders

White

this

for

1951

Securities
of Detroit

Yacht

Petroleum

Blyth & Co., Inc., today (May 10)
is making an offering of 50,000

at the

Bear

Blyth Offers Creole

Fishbite") at Gull Lake.

June 26,

annual

get together

tion.

the

as

contention.

of

(St. Paul Minn.)

June

$67,000,000

soldier

tion

City> Bond Club

(Minneapolis,

Twin City Security Traders As
sociation Annual Outing ("Opera¬

picnic and Golf tournament

of

Virginia's

at

the usual pre-picnic

delay.

West

Convention

five

natural

finance projected plant

tional

14, 1951

Twin

party

final details
be

Dealers Associa¬

Canada

of

June

Gas

or

securities

of

expanding

Prospective bidders

will

22-24, 1951
Minn.)

preceded by

popularity

rapidly

June

Jasper Park Lodge.

bids

open

that four

are

will

market

though the

charged with making such

group

to

indicating

one

;

now as

tion

schedule for Monday

on

Consolidated

is

groups

a

considered

are

Corporate

(Jasper Park,

Canada)
Investment

business.

"com¬
police proposed new is¬

mittee" to
sues

which holds
uncomfortable

June 11-14, 1951

notes

debentures.

fraternity

industry has set up

called,

the

$50,000,000 of 25-year sinking fund

finds itself currently swinging off
on

that

big corporate under¬

Indications
The

not

were

selling too high.

were

"■'!

latter

reasoned

was

47

on

the

Common

Company, payable
■■

Treasurer

May 8, 1951.
■IIIIIIHHNUIIHIHIIHHHIII

to stockholders of

of business

on

on

Stock

Secretary

TEXAS EASTERN

May 16, 1951.

GEORGE SELLERS,

May 4, 1951

of the

June 1, 1951

record at the close

Secretary
)

TRANSMISSION CORPORATION

The Commercial and Financial Chronicle
43

Thursday, May 10, 1951,

.;

.

(1984)

>:

BUSINESS BUZZ
on...
Behind-the-Scene Interpretations
from the Nation's

And You

Capital

WASHINGTON, D. C.—Even if along this line was the slicing off
of about $90 million from the ap¬
much is being said about
propriation for additional trans¬
it in public, virtually every Fed¬
mission facilities for the "Voice of
eral agency having something to
America."
do with the overall economy has
Then here last week, on the In¬
called for a "stop, look, and listen"
check about the prospective trend terior Department bill, the House
for the next few months in busi¬ sliced a few millions here and a
ness volume, prices, and activity.
few millions there from some of
This does not mean that anyone the Fair Deal's pet public power
is alarmed that there

Still

exceptions, only
be carried forward vigorously in one person could be rehired for
the
immediate
three
or
four every four who separated from
ing if all official programs

should

on

accepted assump¬

the

Harper—The Foundation for
Economic Education, Inc., Irvington-on-Hudson, New York—Paper

t,

—Single copies on request—Quan¬

tity prices on request.

themselves.
officials do
not want to find themselves caught
in a situation where pressures will
reverse themselves, or where the
reversal might gain greater mo¬
the other hand,

On

ing
out

cluded—Rhea,
orado Springs,

than they have any rea¬

mentum
son

way

expect. "But let's be sure
going," is about the

to

where

we are

the thinking going.
*

*

*

effects
of clamping
down in structural steel for Sec.
608 - financed
luxury apartment
houses are likely to be more bear¬
ish on the volume of apartment
construction than the direct diver¬
Indirect

steel

of

sion

from

away

projects, some officials
Promoters

of

those

believe.

apartment
practical situa¬

large

projects face the

units

125,000
the

in

clearance act of

not afraid to work here alone
are

you,

Lord—Business Reports, Inc., 225

with me,

Great Idea, The—A Novel of the
—

—

the

If

dividend

sweeping

the

On

and
of

persons

other

have
the

hand,

of

Hoover

Committee

tions

have

as

millions

been

thousands

is

another

provision

some

to

new

purchase
at

a

agricultural

foreign

commodities
even

the savings and loan tures Committee is going to tes¬ the existing Act,'raise the possiassociations and "country" banks tify to the vitality of that strange
have not reached the point, and phenomenon, the Hoover Commis¬
are not likely to in the next few
sion
on
Reorganization
of the
months, where they are likely to Government.
reconsider the ratio to total assets
This
testimony will take the
form that the

committee, with

no

tomed to invest in mortgages. Fur¬

real

thermore, it is pointed out, these
habitual mortgage lenders are col¬

up

to

for

enactment

for

use

or

resale,

loss.

It is said that the

language, os¬

lecting substantial regular repay¬

the "Chronicle's" own

views.)

some

likely for
time to want to reinvest in
which they

are

mortgages.

thesis

The

port

was

specific
*

*

After getting a

*

somewhat desul¬

of

that

the

by

proposals

costs

a

could

Hoover

detailed

re¬

and

cut in govern¬
somehow

be

tory and spotty start, the economy brought about—by legislative en¬
drive in the House is beginning to actment.
show

real

The, first

of taking hold.
Those sophisticated in the ways
House action., of note of this sprawling, extravagant, and
signs




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FIRM TRADING MARKETS

portions" of the Hoover report.

ments

of

Avenue,

Y.

tensibly

willingness, is going to open

public hearings,

Lexington

126

in

law, unexplained, which
would authorize the Government

the

stitute,

New York 16, N.

There

recommenda¬
to

the

courts.

at times in history,

converted

to be settled later by

balance

become as con¬
validity
of
the

vinced

and

accus¬

1,

politically-managed government— bility that someone seems to be Future
Henry Hazlitt — Apple(R. Mich.)
and they are the majority in Con¬ trying to "pull some fast ones."
ton-Century-Crofts, Inc., 35 West
who helped get this amendment
gress—do not see how a law will
32nd Street, New York 1, N. Y.—
It is proposed that when the
through the Committee of the
provide efficient management or a Government wants to take real $3.50.
Whole, revealed that the Public
form of organization will provide estate for a defense
purpose, it
Housing Authority so far had ac¬
State
efficient management of a govern¬ can take
Insolvency and
Foreign
possession immediately
tually completed only 1,000 new
ment so gigantic it cannot be ade¬
Bondholders
In two volumes —
upon petitioning a court. The Gov¬
housing units in 14 projects under
quately supervised by either the ernment would not even have to
Edwin M. Borchard and William
the 1949 Act, although thousands
White House or the Congress, or
show that the owner had refused
of war housing units were passed
H. Wynne—Yale University Press,
how a form of organization can
any offer, whether reasonable or
over into public housing.
He said
replace incompetence in manage¬ otherwise.
In
the
present law, New Haven, Conn.—Cloth—$25.00,
that this being the case, 5,000 units
ment. Above all, they observe that
Congress provides that the Gov¬
ought to be enough for a while,
Timing Factor—Explanatory fol¬
the government already has spent ernment must
pay 75% of its offer
and the House agreed tentatively,
many
times the supposed "sav¬ to the owner of the property, if der and samples of complete serv¬
3 to 1.
'
ings" of the Hoover enactments. the amount is in dispute, with the ice—$1.00—Dept. B, Analyst In¬
Si!
#
*

,

are

York

New

Street,

Y.—Loosleaf binder.

N.

,

they

34th

West

Miss Smidgd?"

designed to permit the
payment of subsidies to high cost
producers of metals to encourage
production, is so broadly worded
that a subsidy could under its
language be paid to the producer
the
Commission's, lobby
effect upon total mortgage lend¬ "revenue" without actually boost¬ which
of any domestically-produced raw
said
v
■
represented the unenacted materials.
ing of the disposition of some ing tax rates.
institutions
to
shy away from
The amendment is drastic, it is portions of the Commission pro¬
While Senator Burnet R. MayAnd the Senate Expendi¬
mortgage loans because of the un¬ understood.
Any
corporation, gram.
bank (D., S. C.) assured the Sen¬
certainty about long-term bond whether a manufacturer, whole¬ tures Committee, testifying to the
ate that the President does not
public faith in the idea that the
interest rates.
saler, retailer, bank, savings and
intend to build defense plants ex¬
Hoover Commission had just the
It is said here that the coldness loan association, or mutual sav¬
correct answers, has indicated it cept those expressly "special pur¬
toward mortgage loans has oc¬ ings bank, must withhold and pay
will hold hearings on these bills pose," and 100% for government
curred
primarily
among
some to the Treasury 20% of any sum
use, the bill sets up no such lim¬
in the next few weeks.
large
insurance companies, and it pays as interest or as dividend,
itations.
>)!
Z
%
with respect to the VA loans, the whether that interest or dividend
(This column is intended to re¬
Observers who have carefully
lowest-yielding
of the govern¬ is 68 cents or $68.00, or any other
matched the text of the Presi¬ flect the "behind the scene" inter¬
ment-nursed loans. It is believed figure.
*
*•
%
dent's proposed new Defense Pro¬ pretation from the nation's Capital
that most mutual savings banks,
other than
in big metropolitan
Pretty soon the Senate Expendi¬ duction Act with the language of and may or may not coincide with

amounts

Russ

Calif.

Robinson,

Getting Military Work—Walter
"You're

And these
new
later, and leave someone holding take a lot of complaint to bring new religion.
the bag.
So sponsors of those this about. Last year the Senate communicants are supporting a
projects are expected to be hesi¬ knocked out a House provision full-blown lobby here to press for
tant about making commitments calling for dividend withholding enactment of all the Commission
that cannot be put well under to the tune of 10% of the divi¬ proposals.
construction for a few months.
dends paid.
After a lot of work, this lobby
The present mood of Congress- finally persuaded Senators to in¬
In another sector, housing fi¬
is to find any plausible stunt like troduce
"by request," officially
nance generally, the attitude here
to provide specified or otherwise, the 20 bills
is to rather minimize the probable this that will seem

the

429

San Francisco 4,

Building,

1949.

administrative interest withholding amendment
order today, X percentage of steel tentatively adopted by the House
is available for this purpose, the Ways and Means Committee as a
percentage very well might be part of the tax bill, is to be
lowered a few weeks or months knocked out in the Senate, it will

of

B.

Lester

Hep. Jesse P. Wolcott

tion that even if by

areas,

Swing

—

slum

and

housing

with¬

with all re¬
by June 1, 1951, a
book will be in¬
Greiner & Co., Col¬
Colo.
and

On request — or if you
wish
you
may
enclose $1 and
you will also receive next four
issues
of
The Signal
featuring
"The
Stock in
the Spotlight"—

provided

year

per

public

today's

to

Formula for Short-Term

Trading

by the
minimum of

the

and

obligation

quests mailed
111-page text

50,000 approved

the

committee

teachings

Dow's

market action—current letter

-

the service for any reason,

from

Theory Comment—Apply¬

Dow

that, with certain

,

begin to assert

Discrimination-

of

Blessings
F. A.

in the
tion that everything is making for Labor Department and the Fed¬
eral Security Agency. It is planned
all-out inflation.
There
is
little
disposition to to try to write a similar rehiring
ban
in all appropriations.
Last
question the fact that the long-run
trend
is genuinely inflationary, year an amendment limiting re¬
that by Fall or some time later hiring to one for every 10 separa¬
this year, war production will re¬ tions failed. The less drastic oneally begin to take hold. And when in-four ratio might possibly pre- :
war
production takes hold, the vail.
shortages of consumer goods will
A more spectacular action was
really appear. At the same time that
tentatively
taken
by
the
payrolls will rise and all the ele¬ House cutting down the public
ments making for inflation will housing
program
to 5,000 units

months

w

Street, New York 18, N.

providing

in

House

the

of

tion

Book
42nd

West
Y.

330

Inc.,

Company,

further sign was the ac¬

a

The—

Ordway Tead—McGraw-Hill

will be any projects.

significant set-back, but rather re¬
flects an alert attitude of wonder¬

Administration,

of

Art

not very

Products
Prospectus

on

request

CARLMARKS & C2: INC.
FOREIGN SECURITIES SPECIALISTS

50 BROAD STREET...NEW YORK 4, N. Y.
TEL. HANOVER 2-9050... TELETYPE: NY 1-971

Hill, Thompson & Co., Inc.
Trading Department

70 WALL

STREET, N. Y. S

Tel. WHltehal)

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