Full text of Commercial and Financial Chronicle : May 11, 1944, Vol. 159, No. 4280, Section 1

The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.

2

"AY

Final

Edition

ESTABLISHED

OVER 100

In 2 Sect ions-Sect ion

YEARS

1

om
Land.
11te& matcull an

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A MPT
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PuDATVTTr't

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Reg. U S. Pat. Office

Volume 159

Number 4280

New York,

The Soul Of
Colleges have been ladders of
opportunity and the chief Civiliz¬
ing agencies in the American

melting pot of democracy, Dr. W.
H. Cowley,
President

o

f

Hamilton Col¬

lege,

declared

in opening his
address on

"The

Soul

of

America"
the

at

Assuming Slackening Warfare And A Conservative
Erroneously Been Construed As Failure Of Gold Stand¬ Election Outcome, Forecast Predicts (1) Speed-up Of
ard—Holds No Method Of Stabilization Yet Suggested
Inflation; (2) Shift Of Larger Incomes to Middle
Is So Sound Or Easily Operated As The International
Brackets; And (3) Broadening Of Trading Areas—In
Gold Standard With Free Coinage Of Gold, Free Markets
Retailing, Independent Stores Will Make Headway
And Private Ownership Of Gold And Currencies Freely
Against Chains, And Sales Volume Increase—Whole¬
Convertible Into Gold Both For Domestic Use And For
saling Will Also Advance, But Direct Manufacturer's
Shipment Abroad.
Sales Will Increase—Distribution Methods To Be Sub¬

Seminar

Economic

:•
on

sound

a

spon¬

New

Y

problem

k

mations given

ent

eco¬

war

the American college," he said, "by
foreign visitors and despite the
very great record it has

,

nomy

certainties

to

hv

"A

of

the

us

before

year

the

11

destroy,

and,
A

in

western

is

fact,

little, earlier

(Continued

President

on page

Mc-

1936)

ILLINOIS

and

Issue.

For Illinois

Wisconsin,

in

this

General Index

on

d

page

page

for acquisition probably will mo¬
tivate men and nations for some

held at the
Waldo.-f

As¬

toria-Hotel

in¬

"It is

would

former

have

us

dentofthe

dream," continued
Mr. Kemper, "to assume that we
can, have world peace, or for that
matter world prosperity, unless

Chamber

of

we

Commerce

of

surmountable
Gentes

isolationism,
with

ourselves

pur¬

policy
contending oursue

of

a

lower

a

standard

Presi-

1922;

world at large, that is not our way
of doing things and most of us

a

on

common

ground in be-

mittee

inevitably leads to domina¬
by a small group or by a
single individual,
"Stateism and dictatorship do
not make for peace* From the be¬
ginning of history rulers have pro¬

the

to

at

delivered

by Mr,

the Conference of the

realistic

Institute

of

America

at St.

Louis, Mo., on May 1, 1944.
(Continued on page 1932)

Buy War Bonds

Dealers

war-

of post¬
problems,

whieh

voked
James

would

"admit

S.

Kemper

that

selfishness

and

as

to

screen

a

deficiencies.

the sake
definite-

ness,

the fore¬

cast is focused
the antici-

on

pated

situa¬

in

The

forecast*
consid-

after

1947.

of

trends

basic
in

general

economic

con¬

ditions, takes
up separately
future

the

William H." Lough

outlook

for

retailing,

wholesaling and distribution
methods

and

William

costs.

R. H. Johnson & Co.

Exchanges

Established 1927

Rep.

INVESTMENT

25 Broad St., New York 4, N. Y.

64 Wall

SECURITIES

other

in

books

(Continued

the

field

on page

of

Street, New York 5
PHILADELPHIA

' Albany
Buffalo
Pittsburgh
Williamsport

Troy

Cleveland
.

says the dictator, "to plunge
(Continued on page 1931)

THE

CHASE.

Bond

Brokerage

OF THE CITY OF NEW YORK

Broaden your customer
:

service with Chase

correspondent
Prospectus

HUGH W.

en

LONG

Request

and

COMPANY

Syracuse
Dallas.

Hardy & Co.

facilities

Members New York Stock Exchange
Members New

York Curb Exchange

15 EXCHANGE PLACE

634 SO. SPRING ST.

30 Broad St.

JERSEY CITY

LOS ANGELES

Tel. DIgby 4-7800

New York 4
u

.

Tele. NY 1-733

Member Federal Deposit Insurance

Corporation

:

i—:
Actual Trading

Markets, always

ELECTRONICS

Puroiator Products, Inc.

New England

Federal Machine and

Public Service Co.

.Welder Co.

RAILS
INDUSTRIALS

International

ALL ISSUES

Detrola Corp.

Analysis upon Request

U. S. Truck Lines

BULL, HOLDEN & C°

Kobbe, Gearhart & Co.
INCORPORATED

MEMBERS NEW YORK STOCK EXCHANGE

Members

14 wall ST., new York 5.N.Y.
TELEPHONE-RECTOR 2-6300




eco-

1933)

cover

for Banks, Brokers

INCORPORATED

BOSTON

Teletype NY 1-310

BROKERS

H.

Lough, President of Tradeways,
Inc:, 285 Madison Avenue, New
York City, is also the author of
"High Level Consumption" and

and Dealers

Members New York Stock Exchange

BOND

of

"Better it

Service

Hirsch, Lilienthal & Co.

Chicago

war

own

'

Geneva

For

NATIONAL BANK
NEW YORK STOCKS, INC.

VICTORY

3-^600

their

is,"

greed and desire

for

HAnover

Beyond that Stateism

liberty.

tion

view

address

Distributors

-

rights of the

Stateism is the negation

trol

Council, urged

Controllers

London

does

of

1944.

Underwriters

other

State

with its automatic centralized con--

*An

and

to it that the

see

citizens.

Uni ted

the

an

not encroach on the

and
living and the relegation of the State s
a less important
Chairman
o f
position in the family of nations. the UnitedFortunately for ourselves and the States Com¬

Gentes

•

idle

and
A. N.

favor¬

post-war

condi tions.

eration

time to come."

on

May 4, James
S. Kemper,

able

tion

.-<§>•

♦

uction,

stand

see

1924.

page

r u

and

Commerce

of

Associations

American

the

United States to

WISCONSIN

featured

P

address before the Plenary Session of the Per¬

of

IN THIS ISSUE
dealer activities

the

problems

civilization

it.'

Some

sn.

In the opening
of

manent-Council

'

war,

destroying

situa

consider

for
example,
Walter
Lippmann
wrote:
'The
prevailing
educa¬
tion is-destined, if it continues,
to

in

interna-

t i onal

in'educational posts
fn large measure justified*

some

and by

practice

under

Kemper Opposes World Military Force And "Grandiose
Schemes" For International Monetary Stabilization.

the many un¬

made, the
college is today under great, and
serious attack, attack which seems

sales

Rights Of Individual Citizens

d i tions

brought about
by our pres¬

accla¬

No World Peace Without

and

ors

con

"But despite

the

W. H. Cowley

the

t ribution

s

system and in

new

many

fact

by

of

reason

C h apt e r,

Chartered Life
Underwriters.

d i

difficult

most

of

o r

stantially Unchanged

A report issued on May 9 forming part of "The Economic Future,"
trade of the United States
and permanent basis in the period following the war service conducted by Tradeways, Inc., discusses the probable developments in the
presents a—
—
------

The task of reconstructing the foreign

April 21

sorship

By A. N.'GENTES*

•

Vice-President, Guaranty Trust Company of New York

and

Social Trends,
under

Dr.

Copy

Banker Declares Break Down In Credit Structure Has

Current

held

a

An Analysis Of Post-War Trade
Financial Aspects Of
Future World Trade
And Business Prospects

America

on

60 Cents

Price

N. Y., Thursday, May 11, 1944

N.

Y.

Security Dealers Ass'n

45 Nassau Street
Tel. BEctor 2-3600

New York 5

Teletype N. Y, 1-676

Philadelphia Telephone:

Enterprise 6016

HART SMITH & CO.

REYNOLDS & CO.
Members New York Stock Exchange

120 Broadway, New York

5, N. Y.

Telephone: REctor 2-7400
Bell

Teletype NY 1-635

Members

New York Security Dealers Assn.
52 WILLIAM ST., N. Y. 5

HAnover 2-0980

Pell Teletype NY 1-395

New York

Montreal

Toronto

ira haupt & co.
Members of

Principal Exchanges

111 Broadway, N. Y. 6
REctor 2-3100

Teletype NY 1-1920

11, 1944

Thursday, May
THE

COMMERCIAL &

FINANCIAL CHRONICLE

1914

American

in:

;Trading Marketa

bulolo gold

National Airlines

Goodbody
Members N. Y.

Established 1920
Members

Dealers Ass'n

York Security

New

BROADWAY

115

HA 2-2772

PI., N.Y. 5

40 Exchange

Stock Exchange

& Co.

-

New

"B"

Axton-Fisher Tob.,

By

ROBERT D.

GRAY*

Henry

.

Colonial Ice, Common
Delaware Rayon,

of Industrial Relations,
California Institute of Technology ,

Director, Institute

Pfd.

Coal, Com. & Pfd.
Dodge, Des Moines & Sou.

Elk Horn
Ft

& Trecker

Kearney

Common

Mayflower Hotel,

Baltimore Stock Exchange
Broadway, N. Y. 5
WOrth 2-4230

Deductions

120

of the failure to

1956

which

rate,"
the

Whelan

^United Cigar

per

hour

♦Traded

on

or

other

unit

Preferred

of

time,

Curb Exchange

N. Y.

unit of
output.
At

or

Vanderhoef & Robinson
31

Exchange

York Curb

Members New

York 5

Nassau Street New
Telephone COrtlandt 7-4070
Teletype NY

System

Bell

per

may
used
to

what

to

refer

better

is

"e

& Power

Preferred

&

H. G.

BRUMS & CO.

20 Pine

Street, New

York 5

WHitehall 3-1223
1-1843

Teletype NY

i
Preferred

Preferreds

high

a

n e s s

and

Dye Works

Products

Preferred

ever, cause an

BreeneaniGomparu^
Security Dealers

Wall St., N. Y. 5

The

liquid a s s ets
could, how¬

Hanover

Teletypes—NY 1-1126 &

Assn.

2-4850
1127

n

f 1 ationary

if

future

the

.

1939

dollars.;. While

commodi¬
ties and services, in wages and
salaries, and the volume of retail
trade have made'necessary an ih-

the

pur¬

chasing power
Of

24 billion

the increase

con¬

fidence in

compared with

has been nominated
the unexpired term of

Co.,

&

serve

Dean

J. T.

Madden

in prices of

(Continued on page

CUr-

1-1140

Limbert.

A.
&

1921)

*

•

Ref. 5s, 1995

Baltimore & Ohio,

Ref. 5s, 1996

Baltimore & Ohio,

Ref. 5s, 2000

Ohio 4V2s, 1960

&

Baltimore

V;

•

BUCKLEY BROTHERS
Members New

'

York Stock Exchange

63 Wall Street, New

York 5, N. Y.

WHitehall 3-7253
to Philadelphia

Direct Wires

First Boston

MARKETS

TRADING

& Los Angeles

will be:
of the

Governors
Coggeshall, Jr.,

Continuing
James

•

Baltimore & Ohio,

to
Mr.

Corporation; Joseph

Iglehart of W. E.'Hutton
Co.; Frederic H. Brandi of Dil¬
W.

& Co.; Henry C. Brunie
Trust Company, and
Jerrold Bryce of Clark, Dodge

lon, Read
of
T.

Empire

& Co.

,

.

'

•

billion

4.9

to "over

price move¬
ment

York Trust
Company, Charles L. Morse, Jr.,
of Hemphill Noyes &
Co., and
Edward K. Van Home of Stone
& Webster and Blodget, Inc. W.
Fenton Johnston of Smith, Barney

obligations.

dollars in Aug.,

years,

of the New

M. Massie

Members
of
the nominating
dollars in Nov.-,
Laurence M.
1929.
Although the rate of committee were
chairman, W. Manning
increase in the volume of cur¬ Marks,
rency in circulation has tended to Barr, Harry W. Beebe, Mr. Bryce
decline, it may be expected that and H. H. Egly.
before hostilities are over cur¬
rency in circulation will amount

and

ployment,
the
Bulletin

i

billion

7.2

three

for

members of
to serve
include Adrian

for

of Governors,

the Board

of currency in cir¬
at present over 21

is
billion dollars, as

culation

activity
creating

states.

Preferred

Government

volume

The

e m

Bell

of

should be undermined.
liquid assets include cur¬
rency, bank deposits, and United

level of busi-

England Public Service

Members N. Y.

Raymond D. Stitzer
Equitable Securities Corpora¬

secretary and

The

States

NEW YORK 5
HAnover 2-9470

ST.

president, the post held

Riter during the past year,
Hunt of White, WOld
Co., has been nominated for

&

rency

maintain-

n

in g

WALL

Teletype NY

E. Janseh

v-—

be a

can

64

& Co.

York Curb Exchange ,

by Mr.

The Financial
Of The United States

structive force

37

Members New

Limbert of Blyth & Co.,
been,nominated for the office

vice

of

address

Frank C.Masterson

tion for treasurer.

individ-

and

the
held

Lee M.
has

of the United States will be marked by
great liquidity, according, to a bulletin entitled "Effect of. the War
on the Financial Structure of the United States" issued on May 1 by
Dean John T. Madden, Director of the Institute of International
Finance of New York University.
The huge volume of liquid assets in the hands of corporations
uals

McFadden Publications

Standard Coated

meeting to be

The

June 9.

on

2s, 1955

de La Chap-

elle, of Shields & Company.
election will take place at
Club's annual

A

New York A. C.

Riter, 3rd

succeed Richard

to

delivered by Dr.:
Gray at the Fifth Southern Cali¬
fornia
Management Conference,
Dr. Robert D. Gray
Los Angeles, on May 6, 1944.
(Continued on page 1928)
compensation re¬

great con¬

United Piece

Henry G.

■

post-war economy

The

Wells

Struthers

New

Class

11

*An

Structure

Common

Bell

sible

1955

Punta Alegre

Common

Armstrong Rubber

Effect Of War On

York A. C.

2-5s,

the employee

!

6V^s & 7s

Common,

Nominations

6s, 1952

Teletype NY 1-1919

Detroit Int'l Bridge

and other deductions
been made.
The final pos¬
use of the word "wages'.' has

have

Limestone

Indiana

Telephone:

the

is

which

and

Stock

Common

New

a s

ings,"

a r n

WHitehall 4-8120

65 Broadway
Bell System

taxes

"wages"

described

Amer. Gas

expenditure by

after

word

the

be

1-1548

for

times

other

period of time

the vol¬
for
such a period.
At the; present
time "wages" may also be used to(
mean
"take-home pay," or the
amount of compensation available

compen-

sation

Curb Exchange

Members New York

Bond-Purchase

week, month, or year, or
ume of production scheduled

to

refers only

York Stock Exchange

Members New

4*

v

determined in part
by the wage rate and in part
by the amount of employment
available, specifically the num¬
ber
of hours worked in the

"wage

is

Edward A. Pureed & Co.
I

is

which

implied in the
term "wages"

Plaza

3-6s,

Terminal
•

One

ceived over a

is

sometimes

Savoy

Laboratories

become confused in large part bzecause
distinguish among various definitions of wages.
<£>-

meaning

which

Radio

Emerson

Du Mont

Pfds.

7%

&

•Bayway

And Earnings

discussions of wages

Most

Y. 1-1227

Teletype N.

Bell

Release

6%

Plain

the ensuing year;

York for

New

England Pub. Serv.

New

3rd, of Ritter
nominated for
of • the Bond Club of

Workers From Industry; (2 Reduced
Working Hours; (3) Changes From More Highly To
Lower Paid Employment; and (4) Shifts To Lower; Job
Classifications—Feels Reduced Wages
Will Be Partly Offset By Lower Tax And

MitclielUCompamj
Members

Direct

G. Riter,
has been

president

Arising From (1)

Wage Changes

Sees Post-War

Co.,

La.-Birmingham, Ala.
wires to our branch offices

Of Temporary

Common

&

4's

&

NY 1-1557

2-0700

New Orleans,

YORK
2-7815

JTel, REctor

;

York 4, N. Y.

St., New

HAnover

Exchange
Exchange

Henry Riter Nominated
For Bond OM Head

Policies

Post-War Wage

York Curb

& Co.

Stock Exchange

Members.New York

25 Broad

BROADWAY, NEW

120

TELETYPE NY 1-423

BELL

Steiner, Rouse

Members

.

York Stock

New

,..

Quoted

—

«

,

(

~

Teletype NY 1-672

«...

.•

*

.

jv|cDONNELL&ro.

and Other Principal Exchanges
NEW YORK 6, N. Y. -

BArclay 7-0100

Telephone

"

Sold

—

Walworth Pfd.

,

A

.

Bought

request

on

Class "B" &"C"

Warren Bros.

noranda mines

king & KING

Analysis

Remington Arms

dredging

Industries

Maguire

Common

Botany Pfd. &

bralorne mines

Automatic

Johnson

Markets in U. S. FUNDS for

Maintain Active

We

Mid-Continent Air

& Co. Inc.

P. R. Mallory

Cyanamid Pfd.

Jos. Horchow
(Special to The

In

'

HODSON & COMPANY,
Inc.

Columbus

Financial Chronicle)

S. 1

165 Broadway,

New York

COLUMBUS, OHIO — Joseph
Horchow is engaging in a securi¬
ties business from offices at 50
West Broad St.'

Pittsburgh Rys. All Issues
American States
Preferred

&

Utilities

Common

Consolidated Electric &
"A"

6s,

Gas

1962

Canada Tunnel

Detroit &

Baltimore & Ohio
4Vis,

New Orleans

1960

Art Metal

FASHION PARK, Inc.
In the
in

the

authorities
the demand

opinion of

the
period will be

Bought—Sold

Write

for

circular

Troster,Currie & Summers
Members N.

Simons, Linbuin
Teletype NY 1-608

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



Members New

& Co.

74

New York 4, N. Y.
Tele. NY 1-210

Y. Security

Fashion Park, 5s,

MERICKA «S- Co.

Teletype
Private

-

2-2400

to Buffalo - Cleveland
Pittsburgh - St.1 Louis

Wires

Detroit

Members
Union

Exchange
Bldg., Cleveland 14
8500

Telephone MAin

•

Broadway, New

York 6

WHitehall 4-3640
Direct Private

Wire to

Cleveland

Trading Markets •
Information •

•

T. J.

FEIBLEMAN & CO.

Members
29

Naumburg

Memphis Str. Rys. Pfd

Cleveland Stock

Commerce

1963

Hotels Statler

Common

Jonas &

Dealers Ass'n

N. Y. 6 HA
NY 1-376-377

Trinity Place,

York Stock Exchange

HAnover 2-0600

1969

Pgh.Term.Whse.&Tnsfr. 5s

INCORPORATED

5s, 2032

25 Broad St.,

Henry Holt

WM. J.

unparalleled.

Great Northern

G.A.Saxton&Co.,Inc.

Deb. 5'.

Construction

industry,
clothing during

for men's

demobilization

Common

Conv.

HENRY HOLT

New

41 Broad

Orleans Stock

BOwling Green

Exchange

New York 4
9-4433 Tele. NY 1-493

Street

Volume

THE COMMERCIAL & FINANCIAL CHRONICLE

Number 4280

159

1915

The COMMERCIAL and

FINANCIAL
I

t

[

;

Reg/ U.

•.

.

CHRONICLE
'• i

Patent Office

S.

*

■■.

William B. Dana Company

Boston &

Buffalo &

..

Publishers

»

•

,

Susq

25 Spr.uce Street, New York 8

>;
|

Herbert D.

i

are

Seibert; ;

interested in

V
k

.<

\

William

William
■

i

Riggs,

Business

Manager

Thursday, May 11, 1944
if

'

'

'

-

Published twice
every

I (general

,}■,

and

-

Monday

every

records,

■:S

advertising issue)

J

(complete statistical issue—market
tation

corporation,

;

quo¬

I

Other

Offices:

Chicago 3, 111.
Western

dens,

135

S.

La

32

London,

E.

C.,

1

Drapers'.

England,

New

Harrison 2075
Teletype CO 129

Teletype NY 1-832. 834

Through

Post-War Foreign

Wire Service

In Radio* Interview

wards & Smith.
Copyright
«.

1944

Reentered

by
as

William

B.

We

Company

Dana

Y.,

Buy

Presidential

second-class matter Feb-

under

the

Act

of

March

issued by

| NOTE—On

account of the fluctuations
ot exchange, remittances for
foreign subscriptions and advertisements
rate

must be

made in New York

funds.

Chase National Bank

,

Presidential

,

aspirant, was
C

v.

New

York

•

t

u

the

u a

1

WHitehall 4-6330

Teletype

Mu-

Broad¬

-

Sys¬

casting

Bell

bus, ♦>

m

Stock Exchange

NY

tem

network.

The

1-2033

I

complete

lows:

dies

to

Stilling Small Business

throughout the nation to finance any new capital
Requirements and materially damage the market for exist¬
ing securities of such enterprises is contained in the follow¬
ing additional comments received on the subject from mem¬
business

bers of the NASD. These expressions (others were given in
jpfevious issues starting with April 13) were received inci¬
dent to the poll undertaken by the "Chronicle" to ascertain
whether, as often contended by officials of the Association,
the majority of its members were in favor of the so-called

and
the

(membership is against this latest attempt of the NASD Board
Of Governors to assume powers not granted it either in the
Association's by-laws or in the Maloney Act, under which it
conceived.

the additional comments herewith re¬

garding the effect of the rule on the market for the securi¬
ties of smaller enterprises, it should be noted thai the name
of the city or town preceding the dealer's comments was ob¬
tained from the post-mark appearing on the envelope in
which the questionnaire was returned.
In cases where pub¬
lication of the name of the community would tend to iden¬
tify the firm (as in places where only one firm exists), the
point of origin is indicated by using the phrase, "A Small
iVIaine Town," as an example, or its equivalent.
NEW YORK CITY

:

will undoubtedly cause a drying-up of activity. This, In turn,
ivill make for poorer markets.
So,, in the end, the rule will defeat
its

own

\

purpose.

v

John W. Bricker

of

NEW YORK CITY

We think that

the market'for the securities of

SOLD

QUOTED

-

Statistical

Information

smaller corpora¬

the

o u

t

-

v

which

series

a

identiah candidates, this
being the first

other

Members New York Security Dealers Assn.
„

HAnover 2-8970

& Television

The

subject of this first report
last evening is Governor
John W. Bricker, of Ohio, the only
Ohio Republican Governor in his¬
tory who has served three con¬
begun

Allen Du Mont

Laboratories

;*•

Loft Candy

Last

evening I tried to give you
general picture of his record
here in Ohio, what the people of
a

the

state

think

of

Circulars

•

J.F.Reilly&Co.

about him. Tonight I want to
into his views on foreign af¬
fairs,
and
he
has
been 1 kind
enough to cohie here to the stu¬

say

go

Members

New

Ill

dio, just a block away from the
State Capitol here in Columbus,
(Continued

on page

What

flation.

Peo¬

everybody spends it.

ple,

spite

stitutes excess is

non¬

logical matter, but when there is
a general excess, then each indi¬

to

the

contrary, sim¬
ply
do
not

vidual,

want too much
money.

ets

it

lost

pock¬
be

may

or

stolen.

In the bank it

draws

as

his

own

the

REctor 2-5288

SCREW WORKS

Common
Memorandum

there

and

is

no

mary

analysis is thus not, as so often
asserted, any fear or distrust of
money
but merely the thrifty
habit of not keeping money to ex¬

more

is

too

money,

than

he

accustomed

keep

on

Frank

Cist

cess.

in

-

hand, he spends it, and when a
community has too much money

Rights

on

Request

Hinia&&[d:m
YIP

Broadway

j

Bell System

COrtlandt 7-6190
Teletype NY 1-84

SUGAR

SECURITIES

money.
The pri¬
of inflation, on this

longer

unproductive.
has

&

excess,

interest and is

a

Teletype, N. Y. 1-2480

FEDERAL

con¬

So

when

Assn.

excess,

restored

been

small

Dealers

Broadway, New York, N. Y.

Bell System

partly psycho¬

simply
through his
purchases, to his neighbor so that
then his neighbor spends; and this
spending
continues
and /.forces
prices up until the normal balance
between money; and prices
has

If kept

in their

of

Security

he spends and thus gets

passes on

rid

a

York

1939)

underlying in¬

sense

Request

his Democratic opponents have to

tion, the Psychological Approach", which appeared in these columns
on March 23, the following
comment has been received from Frank
Cist, writing from Delray Beach, Fla., under date of March 26:
Dr. Melchior Palyi, in his article in the "Chronicle" of March 23
seems
exactly right in emphasizing the psychological foundations

in

on

him and what

In connection with the-article by Dr. Melchoir Palyi on "Infla-

v

Teletype NY 1-1203

Majestic Radio

both

and the Chicago convention.

now

By
Melchoir Palyi On Inflation

'

39 Broadway

New York 6, N. Y.

presidentialJ pos¬
parties between

leading

'

sibilities in

include

will

Co!

L J. GOLDWATER &

Comment On Recent Article

to

>•

the
one

standing pres-

much

JIt

of

of

of

man

[;

to
the other

story

of much

With respect to

gen¬

half

Continuing evidence that the NASD 5% mark-up rule,
will make it practically impossible for small

f'5% spread philosophy?' Actually, this independent
complete survey indicated that approximately 85% of

and

present

you

as" it stands,

was

-

:

secutive terms.-

tlemen, I want

Majority Of Current Comments Express Belief Measure
Debar Small Units From The Capital Markets
,

Complete

Tonight, la¬

More Dealers See NASD Mark-Up

,

1

o

over

Newburger, Loeb & Co.
St., N.Y. 5

State

Governor of Ohio and Republican
interviewed in a radio broadcast from

Ohio, by Ful¬
ton Lewis, Jr.,

Irving Trust Co.

Members

BOUGHT

On April 27, John W. Bricker,

;

City Bank Farmers Trust Co.;

40 Wall

"Super-National

Opposes

broadcast fol¬

Rule

Securities Dept.

STREET, NEW YORK

CERTIFICATES

Republican Party As Opposed to New Deal

Bank and Quotation Record—Mth. $20 yr.

ih the

strongbox. Phone and

both!

WALL

Policy

By Fulton Lewis, Jr., Republican

Aspirant

Liberalism Of

Central Hanover Bank & Trust Co.

•

JJonthly Earnings Record—Mth.. .$20 yr.

we

obsolete

TITLE COMPANY

national Trade And Unrestricted Immigration—Defends

Guaranty Trust Co.
Publications

Other

those

Telephone: WHitehall 4-6551

Allies, And Rejects Absolute Freedom Of, Inter¬

Our

PARTICIPATIONS

I; Subscriptions

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

99

when

too,

on

Dominating Our Destiny"—Fears No Conflicts With

MORTGAGE

ihrary 25, 1942, at the post office at New
York, N.
B, 1879.

bid

Obsolete

.

Teletype NY 1-5

Members New York Stock Exchange

-

orders

Governor Bricker Gives Views On

CHICAGO 4

DIgby 4-8640

Ed¬

Ass'n

Dealers

Board of Trade Bldg.

Gar¬

c/o

Security

York

Broadway

NEW YORK 4
St.,

State 0613),

(Telephone:

Representative;

Salle

mail

musical,

our

your

STRAUSS BROS.
Members

banking,

Clearings, state and city news, etc.)
.

25 Broad Street, New York

Thursday

and

news

bonds PR

Spencer Trask & Co.
Telephone1 HAnover 2-4300

feel

out

carry

Denver & Salt Lake

week

a

BELONGS TO YOU"
You'll

West Va.& Pitts.

i

.

"AVERY-THING I HAVE

Penn. & N. Y. Canal

President

Seibert,

Dana

D.

AND COMPANY

PREFERRED STOCKS

Editor and Publisher

llCHlfdSItll

"

-

Public Utility and Industrial

,

'

.

offerings of

High Grade

;

t*

Cleve Term. Val.

BEekman 3-3341

•
1

We

Albany

excess
cause

Only

as

the subsequent rise

DUNNE & CO.
Members New York Security Dealers Assn.

25

goods and corre¬
spondingly lower value of money
(Continued on page 1941)
prices

for

Broad St., New York 4,

N. Y.

Tel. WHitehall 3-0272

"

,

.

tions would suffer seriously by reason of the %% mark-up" rule.
|

Panama

NEW YORK CITY

*
No markets.

j

j

No incentive to sell these securities.
NEW YORK CITY

;

^

.

.

,

Go

.

Warrants

Public National Bank

opinion that unless the dealer is

*Circulars

& Trust Co.*

WRITTEN

*First quarter
available

Wyeth

&

Co.

HoiiRsseSTrsster
Established

NEW YORK

LOS ANGELES

v




on

Request

"

LOS ANGELES, CALIF.
We do not believe that the so-called "5% rule" will mean that
smaller corporations' shares will have a smaller market value, or that
there will be less trading.
As a matter of fact, we believe it will
(Continued on page 1936)

I

American Cable & Radio

Coca-Cola Bottling Co. of N. Y.*
Coca-Cola Bet. of Los Angeles

i/ic

permitted a sufficient
profit, he cannot afford to do the sales work necessary or to take the
positions necessary to provide a satisfactory market for the securities
pi the smaller corporations. We believe that this is a matter of real
public interest and it is to the. interest of the investor himself that
there be provided as good a market as possible for these securities.
It is our

Coca-Cola Bottling*

74

Members Los Angeles Stock Exchange

J.914

Members New York Security Dealers Assn.

Trinity Place, New York 6, N. Y.
Telephone:

''

?

BOwling Green 9-7400

on

analysis
request

C. E. Unterberg

& Co.

Members New York Security Dealers Assn.

61

Broadway, New York 6, N. Y.

Teletype:

Telephone BOwling Green 9-356B

NY 1-375

Teletype NY 1-1666

THE

1944

Thursday, May 11,

FINANCIAL CHRONICLE

COMMERCIAL &

1916

DALLAS

Ame ric an Dist illin g

Bought

Sold

—

'

Pepper

Southern Union Gas

Moxie Co.

'

Pub.*

BONDS, STOCKS,

BROKERS OF

Whelan
Southwest Pub. Serv.Vicana Sugar Com. & Bonds
Derby Gas & Electric
Consolidated Dearborn

TELETYPE

AT-188

Home Office

•

ATLANTA

We have an

COMMODITIES
• TELEPHONE LD-159

Department for
two qualified security sales¬
men.
'
'•
'J
" V-A
cooperation of our extensive Statistical and Trad¬

Co.

(Investment

creased earnings.

Transformer Co.

Liberal

Distilling*
Instrument*
More income from

Lumber*

Bell

t

Auto

or

Pfd.

Worsted "A" and
Brockway Motor*
Triumph Explosives
Title Guarantee & Trust
Botany

Circular on Request

securities

Members

Banks

Hughes & Treat

Repeating Razor

Security Adjustment Corp.
16 Court St.,

Carlson

5-5054

B'klyn 2, N. Y. TR.

Points To Financial
Handicaps To Small Business
By SEC Regulations

Enamel
Drill "A" & "B"
American Industries*
Berkshire Fine Spin.
Petroleum Heat & Power
Vertientes Camaguey Sugar

.

Great

Bird

{ ■

Son

&

Casualty

Maryland
Douglas

Co.
Shoe, Com.

Bendix Home

& Pfd.

Wrnts.

AIR LINES
Airlines*

Export

American

Airlines*

& Southern
Inland Airlines

Chicago

Mid-Continent

Airlines*

Airlines*
Northeast Airlines*

/

National

tee

and pre¬

been

ment

Gas &.E1. 6s, 1960
Div. Arr. and Com.

Gas

& Power

Water

Springbrook

period has

Harvard

Peace,' by Prof. Charles

enterprises.
"If

post

-

war

America fol¬
lows

Pfd.

anything

like

its

tern

AiiC

pat¬

of devel¬

pages

C. Abbott,

$100,000,

even

in

gent, "then the
vast
bulk of

amounts

1790
Missouri

CHICAGO
ISSUES
OR WIRE

AT OUR

*Circular

ORDERS

EXPENSE
on

1930,"
Sar¬

Sargent

em¬

Request

cerns,

do

to

help business con¬

small, in the
period, Mr. Sargent con¬

both large and

post-war

Security Dealers Assn.

BROADWAY, NEW YORK 5

REctor 2-8700
Direct

NY 1-12881

Wires

to

BOSTON—HARTFORD—PHTLA.




of

risk-taking

years

is, that 'money
go/ and in order

"The old saying
makes the mare

in

the

>

post-war

is the only practical way to
the starting and continu¬
of small business enterprise.

assure
ance

tinued:

120

size even more

this

come urgently in the post-war period
exist¬ than was the case previously. But
there has been no development in
ence, through the development of
new
enterprises based on new the financial mechanism during
war
that gives promise of
ideas of production and marketing the
and the willingness of people to making easier the sale of small
risk their money for the chance and medium-size security offer¬
ings.'
of making a fair profit."
"It seems obvious from the fore¬
After pointing out the primary
things the Government can and going analysis that am expansion
should

Members N. Y.

of

ployment will increasingly
from companies not now in

TRACTION

PHONE

Noel

to

Mr.

to $1,000,000,

Congress can
encourage

in a variety of ways

such

with

get

ments,

especially by small

busi¬

ST.

M. 0. Ehers Jr.

Joist Pledger
LOS
C.

Bell System

risk-taking

by

Teletype SL 80

SALT LAKE CITY

& Co.

ANGELES, CALIF.—Max

Jr. will' become associ¬
with Pledger & Company,

bond trading
man

Stock Exchange

Will

Specializing in

Ibers,

ated

Co

LOUIS 1, M0.

Members St. Louis

& Co.

1

department of Fair\ ' - ' v : ; V

AMALGAMATED SUGAR

UTAH-IDAHO SUGAR
.

.

.

Analyses Upon Request

,

EDWARD L. BURTON

Plan
Possibilities Of Interest

& COMPANY

N. E.-Power

The

proposed plan of

simplifi¬

New England Power
Holding
Company System will
have an important effect on the
securities of this system—particu¬
cation of the

larly to holders of issues of
chusetts
Power & Light

Massa¬

ESTABLISHED 1899

160

Main

Salt Lake
BELL

SYSTEM

N. Y.

Street

City 1,

Utah

TELETYPE SU 464

Analysts To Meet

luncheon meeting of the
York Society of Security An¬

At the

Asso¬ New
Massachusetts Utilities As¬ alysts, Inc. to be held on Friday,
sociates,
New
England Power May 12th, .there will be a round
Association, North Boston Light¬ table
discussion
of
"One-class
ing Properties, and Rhode Island Common Stock
Recapitalization
Public Service Company, accord¬ under the Holding Company Act"
ing to a description and analysis under the leadership of E. Ralph
of the plan prepared by the Sta¬ Sterling, Merrill Lynch, Pierce,
tistical Department of J. Arthur Fenner & Beane.
Warner & Co.
Copies of this an¬
On. May. 17, M. D. Miller of

ciates,

alysis are available on request
started in business or to individuals—for example, by as¬
keep a business going, money or suring that the monetary system from J. Arthur Warner & Co.,
is sound, that government does
120 Broadway, New York City—
capital is certainly a necessity.
not
expend more than it needs
"The need for capital require¬
ask for folder K.
(Continued on page 1938)

to

&

509 OLIVE STREET

the United States
Department for several
years. He is the author of a wide¬
ly read primer on police work,
"Police Methods for Today and
/Tomorrow."

and the
difficulty
was
especially acute
when an effort was made to sell
equity securities. Numerous busi¬
ness
firms may need capital in

said

Milw. & St. Paul Adj. 5s
Pac. 4s, 5^8, 5%s
Central R. R. of N. J. 4s, 5s
Chicago, N. 'W. 4%s

Chic.,

Stix

counsel for

Inc.,
639 South Spring Street,
the war, not to mention
members
of
the Los
Angeles
promotions, commonly expe¬
Stock Exchange, as of May 15th.
rienced particular
difficulty in Mr. Ibers was formerly in the
raising
capital , in amounts of

to

'

ST. LOUIS

new

up

C.

Accounts

before

$25,000

to N. Y.

COrtlandt 7-1202

Treasury

"'Established business concerns

from amounts

opment

l\ r% I !»*?

PH 30

Private Phone

Industry Foundation
served as senior information

officer

39-40):

post-war

D

and

('Business Finances During the
Transition from War to

business

St., Philadelphia 3

Pennypacker 8200

the Brewing

Administration.

encouraging
dium

public relations

was

Critical

o| Business

BOENNING & CO.
1606 Walnut

& Co; in the
120 Broadway.
Mr. Stephenson has a broad back¬
ground in the publishing field,

University Graduate

School

small and me¬

Light & Power Pfd.
American Utilities Service Pfd.
Cons. Elec. & Gas Pfd.
Iowa Southern Util. Com.
Nassau & Suffolk Ltg. Pfd.
Queensboro Gas & Elec. Pfd.
Puget Sound Pr. & Lt.
Int'l Hydro Elec. 6s, 1944
Mass. Power & Lt. $2 Pfd.*
United Lt. & Rys. W. I.

Peoples

Scranton

im¬

of
preserving and

Light & Power

Conn.

Stock

York office,

New

thus

portance

Warrants

5%% Notes

Common

&

1956

due

Division of Doremus

presented in a recent
setting study by the Research Division of

the

forth

Illinois Power

in the post-war

ness,

state¬

a

joined the General

has

Con-<e>—

of

sented

Amer.

-

former¬
ly assistant advertising manager
of the Connecticut Telephone &
Electric Division, Great American
Industries, Inc., Meriden, Conn.,

Tells Small Business Committee Of
Congress That Securities Acts Impose Proportionately
Higher Costs On Small-Size Security Flotations—Holds
Claim That 5% Rule Of NASD Is Driving Out'Small
Dealers; And Making It Difficult For Small Firms To
Obtain Capital Funds Merits Investigation
On April 28th, Noel Sargent, Secretary of the National Associa¬
tion of Manufacturers, appeared before the Small Business Commit¬
gress

Washington

REctor 2-8700

Richard L. Stephenson,

Secretary Of NAM

Appliances

Commercial Mackay, Bds. &
Tokheim Oil Tank & Pump

Foamite Corp.
Income Conv.

York 5

Stephenson Is
With Doremus & Co.;

Noel Sargent

United

American-La France-

Security Dealers Assn.

Y,

R. L.

Tel.*

Nu

Purolator

Co.

1926".

BOwling Green 9-4613

Radio
Lab. "A"*
International Detrola

Radio &
Magnavox Corp.*

appointment

York

Wall St., New

40

N.

Tel.

Mont

Majestic

Mitchell jor

Broadway, New

120

Emerson
Du

Mr.

Established

Corporation

Stromberg

Phila. RIT

Exchange

Philadelphia 2, Pa.
Teletype — PH 265
4488 '" N. Y. WH 3-7253

profit sharing ar¬

Ward &

Remington Arms

Magazine

Call

Over -6%

Legal for N. Y. Savings

Alegre Sugar

Eastern

Bell

'

York Stock

St.,

1529 Walnut

idle cash.

Buy Bonds—Yielding

Car

Punta

Philadelphia Stock Exchange

Members New

rangements...

Candy

Long

Members
t

materially'- in¬

tribute-- -to

BUCKLEY BROTHERS

.

departments should con¬

ing

American

Engineering)

request

on

-

•

.

■

BONDISTICS

Pennsylvania

in

Memo

opening in our

Investment

Merchants
Loft

.salesmen

,

Tax free

The

INDUSTRIALS
Farms

SECURITIES

INVESTMENT

Company

securities

DISTRIBUTORS OF

UNDERWRITERS AND

United Cigar

H. H. Robertson

EXCHANGES

OTHER LEADING

Public Util. 5V<js

General

San Antonio "

-

1-2480

EXCHANGE AND

YORK STOCK

MEMBERS NEW

"• k

Liberty Aircraft
Hearst Pfd.

Arden

BANKERS

INVESTMENT

Teletype. NY

System

Bell

CO.

PHILADELPHIA

REctor 2-5288.

Mallory*

Cent.

Securities

Dealers Attn.

New York, N. Y.

Ill Broadway,

Bonds

Axton-Fisher "B"

Polaroid

Houston

Afembera

York Security

New

Consolidated Textile &

P. R.

Southwestern

on

DALLAS, TEXAS

J. F.Reilly&Co.

& Pfd.
Pollak Manufacturing
Moxie Com.

Crowell Collier

us

6% 1951 *

Preferred Stocks

RAUSCHER, PIERCE &

Steel

Wickwire Spencer

Check

Common ;

& Terminal

Dallas Ry.

All Texas Utility

Pfd.

j

Com. & Pfd.

So'western Pub. Serv.

Botany Worsted

Serv. 6% & 7%

;

Republic Insurance

American La France

N. E. Pub.

j

,

Dr.

-

Quoted

-T-.

■

(Plain)

will speak on
Cargo."

American Air Lines
"Post-War Air

Meetings are held at
at 56 Broad

Street.

12:30 p.m.

Volume 159

1917

& FINANCIAL CHRONICLE

THE COMMERCIAL

Number 4280

CANADIAN

We take

jECURITIES^

pleasure in announcing that

EVERY DAY is

MR. A. MOORE MONTGOMERY

"D-DAY" with
of

our

■)

associated with

now

Clients' Investment

;):•'*

.

«'-v"

.

'■

•:

International

.-v., •

•

..

Manager

as

us

International Petroleum, Ltd.

:///:v"';

us

'

is

Gold Dredging

Bulolo

Utilities

Noranda Mines

Department.

«

,

/•'

•'*

«•

•'

'

in tills

;

.

/

■"'

)•.•'.'•

•

Steep Rock Iron Mines, Ltd.

however, "D" stands for Dealer. 'We

case,

Sun Life Assurance

cooperation with other dealers is mutually profit¬

realize that

HART SMITH & CO.

always conducted our business on this basis.

able and have

LAZARI) FRERES & CO.

44 WALL

STREET, NEW YORK 5, N. Y.

BOSTON

••

Teletype NY

Bell

* You
may,

sometime ip the near future, have an inquiry

in which you

could

use our

services—if

do,

you

HAnover 2-0980

St., N. Y, 5

WILLIAM

52

Members New York Slock Exchange

1-395

Toronto

Montreal

New York

will be

we

PHILADELPHIA

i

glad to demonstrate how high a value we place on such
May 9, 1944,

business.

Perhaps

business-getting statistics,
of
As An

Need It
.
Taxpayer you'll Value It
Investor you

As A

FOR

KNOW
know

at

the

you'll find that

.

.

to

glanco

a

instantly

RECORD

INVESTORS AND TRADERS

"Automatic"
exactly
each

when

Send

write

or

for

SI.00

what your holdings are and what they costitem becomes ♦'long term"—with the HANDY
and Traders.
It will save you work, time

for descriptive

literature.

POSTPAID

Petroleum Heat & Power

willing

are

Tokheim Oil Tank &

well

as

i

ourselves.

Pump Co.

Universal Match

dealers can
and

'

Frederic H. Hatch & Co.

job than one, why not 'phone or teletype us

better

a

we can

do for

you?

Incorporated
Wall Street

New York 5, N. Y.

Bell

63

what

see

1-897

.

_

Teletype NY

.

BROADWAY, NEW YORK 12, N. Y
(or at Leading
Stationers)

656

WE BUY

NEWARK 2

>;.;)■ Members New York

By PETER GUY EVANS, C.P.A.
York Bar; Lecturer on Taxation at Columbia and

PUBLIC

?

Rutgers Universities

^///)

only a few decisions involving the EPT (excess profits
tax) have been rendered.
That they are of great important cannot
be denied.
They are important to American investors holding
To date,

equities in corporations which may

.

f.

AND

Coupons Missing

.

INDUSTRIAL BONDS

Members New York Stock Exchange

r

1 Wall

I

STOCKif

INVESTMENT

Gude, Winmill & Co.

RAILROAD,

St., New York 5, N. Y
Teletype NY 1-955

DIgby 4-7060

get refunds as well as to man¬

agement and tax practitioners.
Early cases will give us first

■

UTILITY,

witii

Stock Exchange /.

MUNICIPAL,

GOVERNMENT,

BONDS

J

744 Broad Street

BOSTON 10

Early Decisions Often Establish Trends

~ j

STREET, NEW YORK 5

Devonshire Street

Tax Litigation Looms

H

Pressprich 8C Co.

68 WILLIAM

201

Member of New

problems and

^Next time you strike a situation where two
do

Excess-Profits

Much

[

your

"all out" to complete the deal and make it advan¬

go

R. W.

;

Lawyers Mortgage Corporation, Com.

any case,

HANDY RECORD BOOK CO.

on 0NLV

$1

understand

we

tageous to you as

determinations easier.
The HANDY RECORD
pocket or safe-deposit box, has a durable cloth-bound cover.
yours today and put yourself on a "Know-as-you-Go" basis,

fits coat

transaction—in

a

Long-&-Short Term Indicator)

and worry—make Income Tax
BOOK

closing

other form

some

Investors

for

BOOK

in

need

or you may

Cyanamid, Pfd.

Ohio Match

.

.

THE HANDY RECORD BOOK
(With

practical assistance

American

will need some pertinent, live,

you

indications of the Tax Court's

$>-

interpretation
of

EPT

the

approval; or
disapproval of

'decisions

handed

are

down,

certain

a

clean

which

can

of

merits

the

prove

their contentions will benefit.

Invested
On

%

March

Credit

27, 1944, in Journal

sioner,

T.C. No. 65)

(3

and

Harold H.

R. Cook Returns To

Desk

MIAMI, FLA.—Robert H. Cook,
of B. J. Van In-

Vice-President

a
pub¬ gen & Co., Inc., who was on spe¬
contracted in cial technical duty for the Navy
Peter
writing to pay a competitor over Department, is now back at his
Guy Evans
far,
strong
a
*! emphasis
period of years $520,000, of desk at the firm's Miami office,
has
•
/
been placed on the necessity of which $50,000 was for assets and First Trust Building.
strict compliance with the statu¬ the balance of $470,000 for the
promise, within certain
tory provisions and, particularly, seller's
Tribke In Seattle
on restrictions in matters involvlimits, not to publish or otherwise
(Special to The Financial Chronicle).
ing relief under the so-called re¬ compete.
SEATTLE,
WASIL —John
E.
lief sections.
For the year 1940, the taxpayer
Tribke is engaging in an invest¬
in figuring its EPT credit for its

influenced

ernment.

ac¬

lishing

So

cordingly.

'

The

taxpayer,

company

■

.

•

$3 Billion In Claims
v

provisions,

involving

Of this sum,

$3

EPT

first

Nearly 31,000 claims for refund
have been filed under the relief

corporations can net

the former competitor.

the

the

eliminated

missioner

fact

This is due to
that in most cases, the

income would be subject to

a

What

the

amount will be
tural.

final

on

in¬

The Com¬
from

taxpayer's credit and assessed

The Tax Court upheld

missioner's

contention

the Com¬
that such

and "guesstimating" on
these
claims,
fantastic refunds
may result.
It should be pointed out many
claims filed with the Commis-

liability is not "borrowed capital"
within the purview of the law.
The
contract
executed between

,sioner will be abandoned as they
are not based on good and valid

that the elements of a

,

'.grounds. On the other hand, many
will be amended as only the yearcurrently

outlawed




Tribke
formerly with the local office
Conrad, Bruce & Co. for maqy
Mr.

Building.

was

of

r' •■//

years.

lishing
with

Contract Not Note

liquidation

is purely conjec¬

However, due to "imagin-

is

business from offices in the

Insurance

or

otherwise competing
until Oct. 1, 1950.

taxpayer

It did not meet the test of a note,

eering"

1940

ment

same

deficiency of $2,750.

normal tax assessment.,/
<

based

billion. outstanding liability ($484,000) to

only $1.7' billion.
same

return,

capital, included as a part
thereof 50%* of its daily average

vested

by

parties was held not to be a
"note."
The Judge pointed out

the

note were

lacking.

Here,

the

taxoayer's

promise

to-pay

was

conditional

the seller's delivery of assets
and seller's refraining from pub-

upon

but

merely

was

bilateral

a

con¬

of the

The Annual Outing

will

1944, at the North Hills Golf
Douglaston, Long Island.
Club may be reached by

15,

as

to what constitutes

capital."

involve

a

"bor¬

One of these will

decision

on

tained from factors.

amounts ob¬

Broadway, New York 6, N. Y.

Ill

NY 1-1026

BArclay 7-0570

to

Parkawy

Central

Grand

Boulevard, / in

the

Douglaston, and then north to
Club.
Each

member

will

given

be

Favorable Current Elarnings

be used by either the mem¬
one of his partners. Guest

may

ber

SUGAR SECURITIES

a

This

dinner ticket without charge.

Prospect of Large Post-War

or

which

for

tickets,

a

Sugar Demand

of

charge

$4.00 each will be made, may be
obtained only through a member.

Quotations Upon Request
TEL. HANOVER 2-9612

tickets

guest

for

Application

should be made to Alfred E. Loyd,

Teletype N. Y. 1-2123

office at

the Executive Secretary,

FARR & CO.

Broadway, New York City, or

42

Golf
the

of. The Committee.
through

member

any

day;

Members New York Stock

be played all

can

a

Governor's

new

will be placed

cup

Exchange

York Coffee & Sugar

Exchange

New

Specialists in Sugar & Sugar

in competition this

120 wall

along with the President's
A number of other prizes
will be presented including sev¬
eral door prizes.
For the entertainment of those

Securities

st., new york 5

year,
cup.

do

who
come

out

not

play

golf

and

after the market

soft ball game at

6:00.

Members of the

John

J.

O'Kane

&

Jr.,

Co.,

A Pfd.)

close,

Eitingon-Schild Co. Inc.

Dinner
-

,•

•

British Type

committee are:

O'Kane,
Jr.

Covered Wagon Co.
($1.50 Cum. Conv. Class

who

things

there will be among other
will be served at 8:00.

arise

INC.

Long Island Railroad to Douglaston
(North Shore Division), or

this
litigation
in¬
volved
primarily the EPT, the
Tax Court applied its reasoning
and interpretation from an earlier
decision,
involving
a
contract
calling for deferred payments.
No doubt, further questions will
rowed

"A"

F.H. ROLLER & COMPANY

The

a

.

Bridge Works

New Bedford Rayon

Neyvj

Club,

tract.

Although

Fort Pitt
;

Security Dealers Association
be held on Thursday, June

York

Commonwealth

the Tax

Court ruled in favor of the Gov¬

Security Dealers
To Hold Annual Outing

by

Huston & Co.

judication this
be

business in Seattle

vestment

N. Y.

Chronicle)

'

Publishing Company v. Commis¬

will

.Special to The Financial

SEATTLE,

prior thereto was with

Case)/')

succeeding ad¬
ftrend

)v:

WASH. —John C.
up these claims.
After they are
Agnew has become affiliated with
examined, some claims will be
Blyth &/ Co./ Inc., 1411/Fourth
compromised and others will have Avenue
Building.
Mr. Agnew in
to
be
litigated. •; Corporations
the past conducted his own in¬

J
,'f

each

may

"

It will take many years to

j,trend may be %
discernible,
f
With

ones

new

'

|

As

ulations.

t

John C. Agaew

Joins
Blyth & Co. Staff
//O

claims

that

still be filed.

j
f
|

reg-

and

amendable,

>1
f

Commis-

the..

sioner's

means

for 1941 and subsequent years are

f
off-its.')!

/.extent

This

statute.

|

the

and

law

Franklin Shops

John

J.

Chairman:

Torrey; Wel¬
lington Hunter, -Hunter & Co.;
Hanns E. Kuehner, Joyce, Kueh-r

We
-

are

Investors, Inc. A

principals—Brokers may trade
for our account.. "

Irvin Hood, Cohu &

ner

& Co.; Stanley L. Roggenburg,

Roggenburg sf& Co.; John F. Sarn¬
ie

on,

ville

J. F. Sammon & Co.; Mel¬
& Co.

S. Wien, M.'S. Wien

S. R. Meiven & Co.
2 rector

New

street

York 6,

N. Y.

>

Telephone WHitehall 4-7544

1918

THE COMMERCIAL & FINANCIAL CHRONICLE

Thursday, May 11, 1944

Northern States Power

(Del.)

—

Sold

top capacity with maximum
employment.
It
seems
incon¬
ceivable that for

they

Secretary, California State Federation of Labor

els

activity and probably this
equally true in the field > of
transportation and in the field of
distribution.
For there is little

Strengthen Free Enterprise And Achieve Labor
Objectives Labor Leader Views It Necessary "To Get
Rid Of That Kind Of Exploitation Which Tends To

Paine, Webber, Jackson & Curtis
ESTABLISHED 1879

The

The Hands Of

In

Income

Concentrate
Prevents

Great

Of

Mass

A Few

,

doubt

f

Here And In Great Britain
/

v.

Having The Purchasing Power To Buy The Things

1

'

■

'

•'

V

Opportunities For All"

*

.

■

■

business-managed enterprise, reported that no less than 225 types of

Federa-.

ican
tion

has

business

a

were

These ranged from

enjoying Federal tax exemption.

banking to brooms, from the production - of fertilizer to the manu¬
facture of furniture, from laundering to lumbering.
In the past 11

due in$>part to 45%, of the cost of setting up
the
New publicly owned electric systems

years,
no

to

small

Deal's attitude
toward

in

all

communities

areas

or

de¬

pri-

siring them, with the: balance of
v a t ,e
enter- the cost on long-term loan at ex¬
prise, as well ceedingly low rates.: And many
as
to the im¬ towns jumped at this gift from

on

i

;

of

<

a

war

economy,

in

which they

the

graphic

position
national safety."

inter-

national

At

scene.

he Id

in

it

w a $

Santa

thority,

Bonneville
Coulee

(examples.

Dam

more

than 400

ing the

And,

past four-.years,

sion, this article will deal solfefy of abnormally ' 'high/ taxes ahd
.'[with the field of public utilities/- Operating costs, has driven owner¬
primarily^ those rendering electric ship of subsidiaries holding com¬
panies could not retain into the
jight and power service.
the

At
year

of

close

1932,

the

last

for which data was available

hands

Most

the

to

of

could evade

of

committee, there, were ap¬
proximately 1,900 communities or projects,
areas

in the United States served

publicly owned electric sys¬
tems, municipal and Federal, with'
Federal projects comprised large¬
ly of those established in connec¬
tion with irrigation and reclama¬
tion undertakings'.
These Bureau;
of Reclamation projects sold their
•surplus power largely to irrigators
by

communities,
which
high Federal taxation.
Federal

the

maintain

to

power

other

this

owned

power

into

There
for

this

are

three

major reasons

sharp increase in

ownership

of electric

public
in

systems

11 years.

First, the Public Works
Administration,
established
in
June,
1933, was authorized to
make grants of 30%, soon raised

embarked

the

on

of

capital

enterprise

cost

to

utilities,
turned

than

privately owned electric
since their capital
is

over

six

in

once

years,

(Continued

a

this

little

concern

on page

future.;

has

?

v

perialistic adventures and war. A
far-reaching decision

most

may

Mr.;

at the Conference on
Industrial Readjustments sponsored by the Southern California
Management Council and held at
• of
Southern Cal¬
on

May 6, ,1944.
on page

the other
ahead to
particularly if taxes
are

to be

materially

Therefore, despite lower

prices obtaining

stocks,

once
coin plete

ment" is

the. University

/ /(Continued

foreseeable

for com¬
readjust¬
investors
conclude that the new readjusted
levels of activity, profits and div¬
idends are going to be reasonably
sustained: Certainly we would not
proceed on the theory that any'
system
or"
scheme * presently
mon

Haggerty

:

able

levels of activity we may witness
better

ifornia

be

topmost

profits on
well forge

peaks,

by

will

today's
the

in

in the future

1942)
'

to

known

man

■

the
and

sustain

can

our

national income at current levels.

But;

Interpreting All The Talk

would

we

proceed

the

on

assumption that*■. even at lower
economic levels, corporate profits
may-be better, dividends more de¬
and perhaps substan¬
tially higher levels, may obtain for"
common stocks generally.—Ralph,;
V 4
E. Samuel & Co. ••//■v
;o
pendable,

f
.

When

read the frcqUeht

we

leaders that

the United

.

^rediction op political and business

States ,is going to

enjoy

a

substantial post¬

boom, we often wonder whether the words "postwar boom" are
not being used in a rather loose and casual sense.; For a boom is a
sharp expansion of business activity, a period of abrupt economic
war

growth, and it seems to us quite unlikely that in postwar days our
industrial activity can be further^—
the
rubber
companies
making
expanded.
the pent-up
demand for
(As a matter of fact, viewed good
objectively it seems obvious that tires, for the radio manufacturers,
and

for the manufacturers of re¬

frigerators, carpets, household ne¬
cessities

the

and

like.

But

the

pteint that we want to make is
thaV while there may be a sub¬
stantial boom in

profits, depend¬

Russian-Czech Pact

;

Approved By British
The

British

nounced

j
an-1

Government

according toi
advices,
that it had approved a Russian!- i
Czech agreement for the admin1/
istration of liberated Czechoslo-1
on

May 2,

London Associated Press

vakian

territory and at the sarnie j

time disclosed that Britain and the j
United

had drafted pacts j
principle with the ex-;
iled governments of Norway, Bel-1
gium and the Netherlands. The
Associated Press added:
; t j
States

similar in

,

agreement:/

"The Russian-Czech

nreviously approved by the United j
States, provides for the civil ad¬
ministration of liberated
be

to

turned

thorities

over

territory

Czech

to

au¬

rapidly as consisterit
with military requirements.
The
brief British delay in approval
was
attributed
in'
responsible
as

quarters to the time taken in

con¬

sulting the United States Govern¬

•

Massachusetts Utilities Associates

ment.

•

New

with respect to Norway,

•

North Boston

•

Rhode Island Public Service

'

England Power Association

the

and

Lighting Properties

Netherlands

submitted
but

Company

as

a

{:

-

British-American

"The

to

plan

Belgium

has

been

Russia for approval,

reply has'not been received

yet.";

■

/•!

/',; '■/'.

1931)

Statistical. Department' has just completed a description
and analysis of the-proposed plan of simplification of the New
England Power Holding. Company System.

Fashion Park Attractive
A

,

This

plan if. approved will have an important effect on the

securities of
%

Inland Power &

Corporate

reduced.

delivered

the slower

/•/';■/■

new

address

we

our

,,

>

Our

Crescent Public Service 6s 1954

that

maintain

hand

Z *An

variety only

of the 1930s; it is almost in¬

tion, of sources of friction that can
increase suspicion and lead to im¬

theunanimous

opinion that
•"the
only

less

forgiveness

cor¬

levels of industrial production and

re¬

presents the largest single item of

of the boom

contrasted with

employment

consid¬

Light Associates

hire

to

of security and the elimina¬

local governments.

the

postwar boom and

with

be

pace

been and remains the whole ques¬
tion

,

-

Although

will

important

the irrigation

ing with privately

had

con-;

when

entire ^problem

taken

eration, but the main

-

particularly the earlier
ones, were created for the pro¬
claimed purpose of establishing
"yardsticks" to measure the "fair¬
we
are
having during this war
ness" of private utility rates, al¬
about " as great a boom as > our
though it long has been evident
We have,Jqll
that they were but part of a cam¬ facilities can stand.
an
unprecedente
paign to socialize, so to speak, the employment,
national income,
and a general
privately owned electric light and
acceleration of the economy prob¬
power industry.
An examination
well
up
to
all practical
of the terms and conditions under ably

companies.

a

we

realistic pin
used

conceivable

of

ing in part of course on the tax
or near
rates
that obtain, it seems un¬
'
which
funds
from
the
Federal limits.)
districts.
i
One hears talk for example, of likely that there can be any fur¬
;
By the close of 1943, however, Treasury were provided for their
For all of
the boom years that are ahead ther boom in activity.
;the aggregate of publicly owned creation will indicate that they
for the automobile business, for these industries, and many more,
-electric systems in the country— never were, nor were they intended
^Federal, State, District, Municipal to bej actual "yardsticks." For one
and Rural Electrification Admin¬ thing,, these projects were not re¬
istration cooperatives — was not quired
to pay interest
to the
less than
3,365, an increase of Treasury on the public funds in¬
to security holders of
77.1%
in
11
years.
Moreover, vested in them. And for another,
most of these systems, with the they
were
not required to pay
exception of the smaller munici¬ taxes to the Federal Government^
•
pal plants, were actively compet¬ and, often, not even to State and'
Massachusetts Power &

;and in communities within

that

any visionary, fur¬
expansion
of
an
already
fully-expanded economy. For we
may in the postwar years have a
level
of industrial activity that

its

notable

third,
dur¬
the Se¬
types of enterprise cannot ade¬ curities and Exchange Commis¬
quately be examined within the sion, through enforcement of the
confines »of so limited a discus¬ ■'death sentence" during a peridd
operate. Since

Abrams

Ernest R.

us

somewhat

ther

and

Dam
are

of

.

likewise

were

York

New

number

A

aspects

the

.by

Federation

City,

;

a

forum

recent

to

seems

be

nection

the United States "can no
rely on our favored geo¬

longer

; safety

Grand

capacity

a

.

primarily in connection with
porate profits rather than in

r

work,

-adopted

the

have the fields

car¬

.

Labor

"1 f f o. m.
Claus. Second, again start¬
war is the in¬
ing in 1933, the Federal Govern¬
ternational or¬
number
of ment began creating huge multi¬
government- ple-purpose public power projects, ganization o f
peace." The
owned
enter¬ Which sold their so-called ^'by¬
leaders of the
prises exempt product" electricity to commu¬
Ameri c a n
C. J.
Haggerty
from
Federal nities and eo-operatives at subsi¬
Federation of
taxation has dized rates, far below the com¬
Labor are convinced that* in> our
expanded plete cost of generation and trans¬
shrunken and interdependent;
Tennessee
Valley Au¬
sharply,
as mission.
pact of

are

passengers

,

understand that the term is

•»>-

i.
.

it

talking about

prefatory remarks regarding the perspective which the Amer¬

few

a

*

So

considering the post-war wage problem it is essential to make

In

•/

.r

special committee, appointed by the House of Repre¬

1933

much

better

And More Adequate Medical Care, Finer
Communities, And Richer Educational And Cultural

sentatives to investigate the extent of governmental competition with

In

and
up
to

dising difficulties, are reaching
peaks in their sales figures.

Clothing,

By ERNEST R. ABRAMS

•

freight

new

Taxation of Public Utilities—

•

railroads

our

levelapd our retail stores, de-.,
spite victory models ahd merchan¬

From

They Need For Daily Life"—Sees "No Valid Reason
For Not Using Our Prodigious Productive Powers In
Peacetime To Provide Better Homes, Better Food And

1

that

rying
pretty

And

Wage-Earners

decade at least

a

exceed their present lev¬

can

of

is

To

Qiioted

—

present time working

at

By C. J. HAGGERTY*

6% & 7% Preferreds
Bought

Wage Problem

the

at

are

The Post-Wai

Light 6s

tins-System/ /./

OUR

ANALYSIS

v;-/, }

IS AVAILABLE

ASK FOR FOLDER K

-

ON

%

,

'

REQUEST

NO OBLIGATION

'»

detailed

study

of

I

Fashion

Park, Inc., is contained in a spe¬
Simonfe,
Linburn & Co., 25 Broad Street,
cial circular prepared by

York.
Copies of this inter¬
esting study may be had from the
firm upon request.
1.

New

■

Midland Utilities 6s 1938

r

J. Arthur Warner & Co.
120

Gilbert J. Postley

&

Co.

BOSTON

29

BROADWAY, NEW YORK 6, N. Y.
Direct




Wire

to

Chicago

BROADWAY, NEW YORK 5

COrtlandt 7-9400

Springfield

/

,

;

.

TWX-NY 1-1950

1

Portland, Me.

PHILADELPHIA

Pittsfield

Wellesley

-

i.

Fed. Screw Interesting 4

.-Federal Screw Works commoifi|
rights offer interesting possi¬
bilities, according To a memoran¬
dum issued by Herzog & Co., 170
and

Broadway, New York City. Copies
of this memorandum may be
upon

had

request*from Herzog & Co.

Volume 159

THE COMMERCIAL & FINANCIAL CHRONICLE

Number 4280

President Coleman Of Canadian
is

Western Pacific

Pacific

Western

r.

•

..

1919

Chicago, Rock Island and Pacific

Pacific Points To

■

I't.

Railway's

■

•

Minneapolis, St. Paul & S. S. Marie

War

(When Issued)

When, as and if issued

Bought & Sold

In

Reporting To Shareholders The Company's Opera¬
tions And Post-War Prospects, He Tells Of Canadian
Government's Plan To Monopolize Air Lines—Con¬
Free

New

Members

Enterprise—Points To His

York

Stock

41/2s, 4%s, 5s

New York 6

:

4-4933

Telephone—DIgby

Bell Teletype—NY

1-310

Province of Alberta

Company's Part In Promoting Canadian Progress
In

Railways

/

Exchange

61 Broadway

,

Destruction Of

Canadian National

PFLUGFELDER, BAMPTON & RUST

demns The Pressure Groups Fostering State Monopoly
And

New Securities

;

'

G t

Railway Co.

Denver & Rio Grande Western

the shareholders at the annual meeting of the
'Canadian Pacific Railway Company on May 3; at Montreal, D. C.
addressing

Coleman, the
o m pany's

formance of the past

vc

-Chairman and
P

<

i d

r e s

pointed
the

year."

out

railroad's

has

There

/

■Speaking of immediate pros¬
pects,
Mr.- Coleman
remarked:
"While the industrial activity of
Canada has reached a very high
•

t,

e n

4s,4%s, 5s, 5%s
been

Western

Grande

feeling of hope that the Denver &

some

reorganization may be accelerated from

Rio

efforts,
■and expressed j
strong opposi-tion

is not

*3h.oting
i!D

flects

in pro-

ments

the

minio n's

o

improbable that in certain
classes of traffic decreases father

the

Cana dia

n

than

^Government's

e x c

increases

become gen¬

may

should

the

be

ward

later.

the

in

continue their up¬
trend, further improvement

the

results

net

cannot be

ex-

1

tal air services

•^Within its ter¬

pected, and the peak of net in¬
come
will
have
been
passed.

ritory.

Whether

'"'Your

'lit

C.

D.

directors

Coleman

have

regarded

privilege," continued Mr.
^Coleman, "that all the resources
as

a

ptof your company should be de} Woted

Now

tory.
•is

to the

back

'the

ultimate

victory

for

justifiably

may

satisfaction

continued

of

success

upon
;

your

share of
of main¬
taining vital links of transporta¬
-company in fulfilling its
the heavy responsibility

tion

will

the

we

I

case

can

say

without
with its

past achievements your company

of vic¬

with

the

hesitation that in keeping

achievement

that

assured,

"Jook

to be

not this should prove

or

spare

effort to render to

no

the

nation

services

essential

is

responsible.
"In each year since the com¬
mencement of the war, freight,
passenger and other railway traf¬
fic has continued to expand.
In
this / period
your
company
has
which

it

transported

,

$-5 million

thap.

more

communication S both

and

^within and without the boundaries
of the Dominion.
years

plished
have

During the war

the tasks efficiently accom¬
continued

number

Pacific

the Canadian

by
and

increase

to

importance,

in

culmin¬

ating in the record-breaking per-

stupendous accomplishment, made
possible by the free association of
three
important
groups,
each

making an

"First, there
trons

Will

reverse

at small discount

)* Chicago & Northwestern
;

Railway Company

essential contribution

to mutual Canadian interests.
are

many pa¬

Pacific

throughout Canada and numerous
other parts of the world, who con¬
tinually rely on the varied and
far-reaching services which your

Minneapolis, St. Paul &
Sault Ste. Marie

Rwy. Co.

ARBITRAGES

six weeks

In view of the large meas¬

during

of accord in. evidence

ure

the last stages, of

the proceedings
there is every
reason to expect that large major¬
ities of all classes voting will fa¬
the

before

vor

ICC,

the proposal.

Lake

Salt

the

of

holders

clude

3

.

'

plan is so. set up

&

Denver

bonds but

income

"The

second

the plan nears

dividends

the

that it may; be

consummated either with or with¬

the

road's

substantial

is

expected

that

the

presumably be used
liquidate some of the claims,

to

thus

providing even better treat¬
ment for. the Consolidated 4s.

rail

consider Denver

men

en¬

an

The other highly important con¬
is the vast expansion

sideration

("Old" issues),

r-'v'

Minneapolis & St. Louis 5s 1934
Minneapolis & St. Louis 4s 1949

the

on

Minneapolis
Central

5s

1938

Iowa

Central

4s

1951

Des Moines

standing.

SUTRO BROS. & CO.
Members New York Stock

120

Exchange

Broadway, New York

Telephone REctor 2-7340

the

"The

vv

.

third

group

to

which

I

have reference, is made up of the

numbering more than
200,000, who own the various se¬

investors,
curities

and

stock

of

your

com¬

securities, and allowing for
interest
payment
recently

authorized, these bonds, recently
selling at around 50, would have
an
indicated value of approxi¬
,

mately 64, or an arbitrage spread
of 28%. Considering the probable
this

element

pany.

time

ada,

unduly

They are citizens of Can¬
the United Kingdom, - the
(Continued on page 1940)

the

appears

as

j mill facilities in the
Provo, Utah, area, served by Den¬
ver.
It is generally conceded that
these plants will remain as a per¬
economy

Thus
the

in

factor

manent

1935

Incorporated

*

Street

63 Wall

/

; /

New York 5, N. Y.

Bell Teletype NY 1-897

P0LLAK MFG.
1943 per

Gross

share results

Income—______—$245.52

Net Earn'gs before taxes

25.20

Taxes

18.24

will

Denver

with

war

of

continental

to

from

of the charac¬

important

an

peace.

emerge

some

and

carrier

Net

Post-war
Net

trans¬

Earnings-----..-—/

road, with all of the
operating aspects of
such business. There is a growing

manently

higher

on

18.56

_-w

9.68

Recent

9.50

price

_

—

A
on

new

revised analysis based

I943 operations

available

on

request.

will

road

the

therefore henceforth be

—

Working Capital

industrial

that

4.24

of

some

favorable

confidence

6.96
2.72

reserves

Book Value

heavy duty

a

Earn'gs after taxes-

territory's

the

return

a

on

a

perr

bash

earnings

and that this factor should be re¬

flected in security prices.

148 State

St., Boston 9, Mass.

Tel. CAP. 0425

R. C.
Roscoe

elected

White

a

Ingalls
C.

Director

a

Ingalls

director

the

of

Engineering

:

:

Teletype BS 259

N. Y. Telephone HAnover

2-7914

been

has

Corp.,

jA

G.

J.

Dunn, President, announced.

Gano

Mr.

•

•

*

mian

Ingalls is a partner in the stock
brokerage firm of Ingalls & Sny¬

an

high spread, and merely
closing thereof, as the plan is

v

■

& Ft. Dodge 4s

Frederic H. Hatch & Co.

.

new

& St. Louis 5s 1962

Iowa

steel

in

the characteristics of

community have always been out¬

St., Chicago 4, III.

MINNEAPOLIS &

power

ing angle, then, the Denver bonds

employees of your company, are looked
upon as offering par¬
numbering
more
than
75,000, ticular speculative appeal at curwhose wages and working condi¬
rent levels
r
"* ' -v •{.V'v1, ■■.
/-t .
*•
tions have set a high standard for
The Consolidated 4s, 1936, are
Canadian labor. Their loyalty to
finding
particular favor.
They
the Canadian Pacific, their court¬
are scheduled to receive $318.92 in
esy to its patrons, and their wil¬
new
1st 3-4s, $217.08 in Income
lingness to accept the responsibil¬ 4V2S, $321.60 in 5% preferred, and
ities of public
office and give 4.824
shares
of
new
common
freely of their time in various ac¬ stock. On the basis of the cur¬
tivities for
the welfare of the rent when-issued
prices for the

LaSalle

ST. LOUIS RAILROAD

basis of. past
the new Denver
securities would probably not be
entitled to sell at any materially
higher prices than have obtained
in recent markets. However, many

Purely

teristics

to

So.

bal¬

cash

would

ance

.

it

Broadway, New York 5, N. Y.

231

accurately be appraised. If
by any chance the plan is upset

participation. They will tirely different road than it was a
later.
In
the few years ago, and with ample
meantime, the court has author¬ justification. For one thing, it has
ized interest payments on the old virtually been rebuilt, as has its
Denver
hbnds representing
the connection,; ^Western Pacific, so
interest earned for" one year on the that the roijW through the Dotbonds' they will/receive—the ef¬ sero Cut-off^an now compete for
fective date of the plan is' Jan. 1, the through transcontinental traf¬
11943. Payment of this interest is fic.
Even the Commission, dur¬
expected shortly after the neces¬ ing the reorganization proceed¬
sary-delay of 30 days allowed to ings, commented that the traffic
appeal the authorization.
It is potentialities of the Cut-off had
doubtful if any appeal will be not as yet been fully realized.
While

120

more

separately

made.

/ V,
MEMBERS
York Stock Exchange and other
leading Security and Commodity Exchs.
New

stocks may

new

out their
vote

;•

and prospects for

the

on

of

consummation

as

emerge
from the
courts this summer. From a tim¬

embraces

group

themselves

earning

voting does not in¬

The present

expected

and facilitiesv

the

.

month to

a

proceedings may now vbe expe¬
dited, there is little likelihood of
the delivery of the new securities
before mid-year 1945. This should
company has provided, and who,,
make it the next major reorgan¬
by their ready * understanding and
ization to be consummated after
acceptance of the difficulties of
North
Western, Soo Line, and
war-time transportation, have as¬
Western Pacific, all of which are
sisted in the maximum utilization
of its equipment

Western Pacific R.R. Co.

the

Canadian

the

of

before

or

on

June 10 and the results should be

1

transcontinen¬

*

returned

be

must

announced

case

The ballots

security holders.

eral.

isively

this

by

and if expenses

u-

If

ahead With the voting on the plan

op¬

•project to
erate

this

■

war

to

Quoted

—

level and while railway

c.omplish-

c

Sold

—

appeals of the company itself and of the subsidiary, Denver &
Salt Lake Western are still pending in the courts, but the general

The

feeling is' that these appeals have little, or no, chance of success and
traffic re¬ that they will.not be allowed to hold up settlement of the proceedings
activity, I would not for any particularly lengthy pe-*>
expect that gross earnings "for the
consummated, would afford an at¬
remainder of the year will con¬
It is considered more impor¬ tractive speculative opportunity.
tinue to show the same degree of tant that pending the adjudication This gives no consideration to the
improvement as in recent months; Of V; these' .' appeals the
Interstate probability of materially higher
for, the
new ; securities
Many factors are involved, and it Commerce Commission is going values

!a

Bought

here- on.

der,

100

New

Broadway,

■•■V';-.''

City.

5s, 1952

York

;;'

An

Mohawk & Malone
"

REORGANIZATION

POTENTIALITIES

We wish.to announce the
.our

for Selected Securities

Missouri Pacific System

52 Wall Street,
Our -telephone

removal of

Railway

%C

offices to

Vfo, 2002

New York 5

number has been changed to

HANOVER 2-9072
,

Copies available upon request

•

Mclaughlin, baird & reuss

1. h. rothchild &

co.

Adams & Peck

'

Members New York Stock Exchange

ONE
TEL.

WALL STREET
HANOVER

2-1355




NEW YORK 5
TELETYPE NY 1-1310

specialists in rails
Teletype:

NY 1-1293

63 Wall

Street, New York 5

BOwllng Green 9-8120
Boston

Philadelphia

Tele. NY 1-724
Hartford

1920

THE COMMERCIAL & FINANCIAL CHRONICLE

*

Thursday, May 11, 1944

Secretary of the Mayor's Commit¬
on Property Improvement was

tee

Orders executed

>

said

SPECIALISTS
in

■'<

Real Estate Securities

REAL ESTATE

Since

who

1929

The

co.

Seligman, Lubet kin & Co.

Exchange
York Curb Exchange

Incorporated
Members

Dlgby 4-4950

40 EXCHANGE PL., N .Y.

New

York

bonds.

So

HAnover 2-2100

Real Estate Securities

1

:

A N D

.

1

We hear

that

far

this

earnings for the fiscal

will be sufficient to

year

This should place these first mortgage bonds on
5% basis—yielding over 9% at current market prices.

CORP.

Y. Security Dealers

Members N.
ill

According to the New York
''Times," New York City hotel,
supper-room and dinner business
.

Ass'n

is off 21 to 47% as a result of the

BROADWAY

NEW YORK 6,

new

N. Y.

30%

serious

WOrlh 2-O5I0

cabaret

tax.

situation

this

Just how
will affect

New York hotel

We solicit your

offerings

bids

or

Savoy Plaza, Inc.
3%-6% Income Bonds

2d Mtge.

earnings and the
effect on hotel bonds is problem¬
atical. As an example, food and
beverage sales during the
last
fiscal year accounted for $982,497
out of a total income of $2,500,163
at the Governor Clinton Hotel and

or

York 7, N. Y.

Telephone BArclay 7-2360
Bell System

•

Teletype NY 1-588

,:-v•;m.-

*

■,

newspaper

of

With Lazard Freres

100% rented since last

and

applications

the

today

are

Street, overlooking
the East River, have been selling
at very nominal sums, some below
$1.00. That these units deserve
investigation is evidenced by the
experience of one of them called
the "12th Unit," representing the
equity of the Hotel Tudor at 302-4

New

more

units

these

bid

$2.00

only

were

of

taxes
per

of almost $4.00

$38,368

unit,

.bias tor units promptly

from $2.00 to $5.00.

rose

•

,

;

Again in the newspaper we see
front page article in the New
York "Evening Sun," telling of a
steep revision upwards of com¬
mercial rents in New Yprk,. The
a

Brownell
International Bimetallism

appointment

Advocates

Before

House

Affairs

Foreign
Will

Increase

World's Supply of "Hard Money"
hard money,
of

tors

a

the

Smelting

By restoring silver

and

Refining

Co.,

gressional

Members New York Stock Exchange"

wires

monetary stabilization
would

be

vastly

much

facil¬

itated

by

to

Francisco

San

Garages, selling at

on

CO. 7-4150

14 Wall St., N. Y. 5

Sacramento

Monterey

of

business be¬
of- rationing,
might
be

cause

should

This

into.

looked

lucrative
Low

garage

business

market

after

in

bids

be

the

Oakland

Fresno

a

war.

relationship

Tomorrow's Markets

security
stance,

surprising.
For in¬
850 car, seven story

is
the

Bowdoin

Square garage in Bos¬
ton first mortgage bonds are only
15% bid.
First mortgage bonds
outstanding are $700,000., so that
this bid only places a value of
$105,000 on the property. Moody's
latest
report
on
the
property
shows net annual income of $177,814 for the property and earn¬
ings on the bonds of over 11%.

Walter

Says

Store

attracting

market

The department store pays
rental based on a percentage of

their

business.

gross

With

the

upturn in department store busi¬
there

ness

should

be

good

earn¬

ings available for the real estate
securities. Other department store
bonds
worthy of attention are
Stern Brothers Department Store
De

and

reflects

Pinna

Fifth

:

Avenue

Building, both City Bank Farmers
Trust issues.
l l

alone

more

dence—S uggest
from present

confi¬

switches

stocks.

By WALTER WHYTE

With

atten¬

some

tion.
a

topic of

conversation—-London

Street

Russeks-Fifth Avenue

on

are

still main

Invasion

V
Bonds

Whyte

gently

market

the

able

to

the
price of gold at a time when she
possessed very much less finan¬
cial strength than either she or
the United States has today. As a
matter of fact, the United States
alone, ever since 1934, has main¬
was

peg

pegged minimum price
of both gold and silver. Since that

snoring

only thing that

the

makes for Wall Street conver¬
sation

these

days is the in¬

vasion. ' Customers

all know

"high in Wash¬
ington" or have friends who
know somebody who works
for somebody who "knows"
the answer to D-Day.
Even
newspaper shops are buzzing
somebody

about

the

mans are

half

the invasion

Street
a

communiques

If the Ger¬
jittery about

Day.

then

as

as

most of Wall

they must be in

fine/fix.

a

'date it has

bought more than the
total new mine production of both
metals for the same period and
has acquired also most of the pre¬
viously mined
floating supply.
But it has not attempted to main¬
tain a pegged constant price of
either metal,
since it will not
freely sell either at the buying
price, and in the case of silver,
has changed its buying price at

Another

t

i c currently
around cus¬
tomer's rooms is the coming
elections.
To all and sundry
Governor Dewey seems to be
o

p

.

kicked,

being

the white-haired lad who will

a

mone¬

lead the nation back to what¬
ever

to go

•

on

that

28

April

as

tary metal, and pegging its price

Con-

a

Committee

Montgomery as man¬
ager
of its Clients' Investment
Department.
Mr.
Montgomery

par—Hotel
Building
and
1

politicians say we have
back to. So far, all the \
as
England pegged the price of
viewing with alarm and ob¬
times." ;■'v "V/.
gold, monetary silver would, in
serving with satisfaction is in
Brownell warned that at the
effect, be added to the supply of i
the, preliminary stages. After,
physical gold so as to provide an end of the present war mankind
adequate supply of hard money i"faces the saddest and most dis¬ all, the election is still some
without impairing or diminishing astrous of its many bitter experi¬ seven
months
away
and
with
inconvertible
the full use of gold,
paper
and gold ences
neither Dewey or Roosevelt
would
continue
to
be
used
as

American

told

^

universal demand after the war for a return to
Francis H. Brownell, Chairman of the Board of Direc¬

Predicting

of A. Moore

Schwabacher & Co.

at

tailment

tained

Metal^—Holds International Bimetallism

Montgomery

called

Santa Barbara

month

Last

Street.

42nd

Committee The Restoration Of Silver As A Monetary

M.

Direct private wires

with the latest

Company

A.

three

year

Graybar

ain

Lazard Freres & Co., 44 Wall
Street, New York City, Members
New York Stock Exchange, an¬

nounced

F. French

as

have been

Montgomery Is |

Fred

the

stating that more than 600
tenants
of
the
2,800 apartment
occupants in Tudor City are pre¬
paring to renew their fall leases.
The Tudor City buildings, he adds,
Co.,

fall

A. M.

43rd

to

unit. Their statement for the
year ended Dec. 31, 1943, released
showed
earnings
after
income

President

Incorporated

41st

per

❖

article
quotes Charles N. Blakely, Vice-

Broadway, New

previous
representing
the equities of these various Tu¬
dor City properties, located in the
section in New York City from
any

Hotel.'
Another

150

at

Units of stock

time.

East

without Stock

AMOTT, BAKER & CO.

than

numerous

$1,366,638 out of a total income
of $3,259,916 at the Park Central
•*

With

real

,

to intrinsic value for this class of

<!>-

C. H. TIPTON

been

Securities

paid semi-annually.
a

P.M.

5:30

Eastern War Time

depressed prices now due to cur¬

about 2% additional current and accumlated interest on London
Terrace bonds June I in addition to the 1%% fixed interest regularly

TUDOR CITY UNITS

SECURITIES

10 A.M. to

Private

pay

■'

:■

building

■

Exchange

Open from

Park Avenue.

By JOHN WEST

■■

FRED F. FRENCH Slocks
"

Stock

space

York City Real Estate bond issues

In Buying

ALL

other

commercial

estate

Taft,

V

raised

is said, has been

find

to

have

We Are Interested

rent

Security Dealers Association

Broad Street, New York 4

41

for

:';vv.

NY 1-953

Bell Teletype

on

San Francisco

suit¬
able for his needs.—Looks bullish

Members New York Stock

i

his

had

tenant, it

unable

Members New

statements

from $6,000 to $15,000 per annum.
The tenant offered to pay a 25%
increase
but was turned
down.

SECURITIES

shas'kan '&

file

on

they Were hav¬
ing their rents increased from 50
to 100%. The article told of one
tenant

MARKETS IN

TRADING

J

*

■

...

have

to

from tenants that

under

as

For

standard.

the

the

gold
if the

single

example,

money" and predicted that the
physical shortage of gold, which
played a large part in the collapse
of
the
exclusive gold
standard

ternational bi¬

price of silver is pegged at $1 per
ounce, the 6,000,000,000 ounces of

metallism.

monetary

pronounced

same

war.

adoption of in¬

official candidates.

are

:;s

sis

Si:

V**

Meanwhile, the market is

during the thirties, will be more

,

has been 'in United States govern¬
ment service since
as

consultant

Coordinator
Affairs in

on

of

1941, originally
aviation

Inter

-

to

the

American

Washington, and

more

recently as a member of the Price
Adjustment Board of the Army
Forces

Air
to

in

New

York.

Prior

economist and
director
of
research for Smith,
Barney & Co.
1941,

he

was

Testifying
before

world

billion,

at $1.50 per ounce,

mittee

Com¬
in

fa¬

of

vor

Francis

the

H.

Brownell

/

Dewey monetary stabilization bill,
Mr.

Brownell held

that the pres¬

stock of gold
is insufficient to permit a lasting
return to the single gold standard,
which
broke
down
completely
ent world monetary

mainly be¬
of the physical scarcity of

ten

cause

years

ago,

with

Blyth & Co., Inc.

Blyth & Co., Inc., Old Na¬

tional Bank Building,




monetary

ism

is

the

gold
so

stocks

the increase in
would be 27%, and

proposal, the govern¬
ments would offer to buy all sil¬
ver
offered as well as gold, at
specified prices for each, and to
sell freely
at the same buying
prices, plus a very small '.'han¬
dling charge." This would elim¬
inate, he said, the operation of

cure,

for

the physical

scarcity of the yellow metal.

Law, since fluctuations
in the market prices of both met¬
als would become impossible and
the market price of neither one of
the two metals could

move

out of

line, either with its mintage
or

ratio

the ratio of each to the other.
"There

can

be

no

doubt that it

is just as feasible to neg

of silver

as

that of

the price

gold," Brownell

told the Committee.

than

after the
from
in the volume

ever

This will arise, he said,

the great expansion
of

domestic

trade that

Mr.

pre¬

pointed out that
that

showed

50 years preceding

War,

from

great conflicts.

Brownell

statistics

durinff

the

the First World

international

trade,

due

to

the increase in population and im¬

in
production
and
transoortation, increased approx¬
imately 3% per annum. Normally,
provements

increase

would

in

international

continue

creases

and

ease

tion by air, or

greater.

trade

Population in¬
of

communica¬

otherwise, becomes

Increased trade demands

increased

an

as

volume

which cannot be

of

money,

supplied by gold

alone.

Advocates

of

(Continued

"Great Brit¬

1

.'".W"

move.

Sjc

later will fol¬

level that

higher price

vails after all

keeping its collective mouth
shut, refusing to cue the next

international

and

sooner or

low the end of. the war, and

the

on.

Under his

Gresham's

gold.
Pointing

out that the world's
silver stock is about
(Special to The Financial Chronicle)
6,000,000,000
ounces
compared
SPOKANE, WASH. —Ross R. with world monetary gold stooV<$
of about 960,000,000 ounces worth,
Smith, for many years with Ar¬
at $35 per ounce, a
little over
thur E. Nelson & Co.
as
sales
$33 Vz billion, Brownell empha¬
manager, has become associated sized that international bimetall¬

With

monetary gold to $39Vz
or about 18%. With silver

HouseForeign
Affairs

over

Ross R. Smith Now"Is

the

silver would have the
effect as increasing present

international
on page

1940)

bi-

Here and there

frightened
line, or an
optimistic bull buys a couple
bear

of

covers a

hundred

sum

total

a

short

shares,

but

the

is

practically nil.
Tape chatters along for a few
seconds, then dies.
'

Sis

S|S

;

sis

Oddly enough, while our
market is having a quiet
attack of jitters, the London
market
is
acting as if it
hadn't a worry in the world.
True, London prices haven't
done anything to
speak of
since
last
February when
own

(Continued

on page

1941)

Volume 159

Number 4280

THE COMMERCIAL & FINANCIAL CHRONICLE
In

Effect Of War On The Financial

vate

Structure Of The United States
(Continued from page 1914)
in the amount of currency

crease

in

circulation, it is obvious that
considerable

a

of

amount

cur¬

has been hoarded. This is
evidenced by the fact that
the
rency

volume

of notes

denominations

of

$100 and more
$1,952,000,000 at
the end of 1940 to $4,099,000,000
increased

from

at the end of 1943.
The volume of demand
of

individuals has

deposits

increased

also

substantially, the bulletin con¬
tinues. Although the increase has
not been as great as that of de¬
of

posits

business

end

of

1941

addition

from the

lars

of

June 30,

to

14.3

the

to

demand

it

concerns,

amounted to about 25%

In

1943.

dol¬

billion

deposits individon June 30,
1943

ulas also owned

the bulk of the 31 billion dollars
of

time

in commercial
and savings banks and in the Pos¬
tal Savings System.
During the
war individual
bank deposits in
deposits

all likelihood Will continue to in¬
crease.,

,

,

,

y

,

The

redemption value of United
States Savings Bonds Series A to
F and the par value of Series G
outstanding on March 31, 1944,
was

billion

31.9

over

dollars

and

further increases in this total
be

to

ter

to

demand obligations

are

60

A

Series

expected.

bonds

are

E
af¬

days from issue date, and
into

verted

written
from

cash

notice

issue

From

of

the

edness

will

exceed¬

be

individuals

of

,

creased

materially, thus improv¬
ing the individual's credit stand¬
ing. and enabling him. to obtain
additional
The
sets

purchasing

power.

huge amount of liquid
be

can

constructive

a

as¬

or

a

destructive force. If, for some rea¬
son

or

another, the people should

lose confidence in the future pur¬

chasing
would

of the currency, it
flight from cur¬

power

lead

to

a

bank deposits, and other
monetary claims into real values.
In view of the very great amount
of purchasing power at the dis¬
posal of the people, ^such a devel¬
opment could set in motion a
sharp upward movement of prices
rency,

of

commodities,
equities,
and
other assets the people might re¬
gard as a hedge against inflation.
It

could

also

The
sets

in

huge volume of liquid as¬
the hands of the people
be a great constructive

also

can

force

and

contribute materi¬

can

ally to the maintenance of

high

a

level of business

activity and em¬
ployment. If the conversion from

to peace production is or¬
derly and is carried out with min¬

war

imum

delay, if after the

the

war

supply of consumers' good is rap¬
idly increased, and particularly if
the

finances

of

the

Government

handled along sound economic

are

lines,—it

may be safely assumed
people at large will use
their liquid assets carefully and
will spend them judiciously and
over a period of time.
This pur¬
chasing power will keep up the
demand for commodities, during
the period of reconversion, when
unemployment is bound to be
large.
Later on, when durable

the

that

consumers'

again become
available, it will enable consum¬
ers
to
buy large quantities of
these products.
:
If the

goods

the

of

considerable

cause

people retain confidence
and the supplies

to the Treasury.
large proportion of the Series
E, F, and G bonds were to be sur¬
rendered for cash, the Treasury
would have to rely primarily on

indicates the compelling

necessity
maintaining the confidence of

of

the people in the soundness of the

and of adopting all pos¬

currency

sible

to prevent a

sharp
increase in prices during and af¬
ter the war.
If prices remain at
approximately the present level,
the
purchasing
power
in
the
hands of the people would cause a
tremendous but orderly demand
for

measures

all

kinds

of

for

commodities

number, of years.

new

bank

further feeding
flation.

deposits, thus
the flames of in¬

Furthermore, a steep rise in
commodity prices would cause an
increased demand for bank credit.
A

material

of

in

banks

loans

as

of

governments
billion

30

between

dollars

a

and

25

require

year

much

larger national income
country was producing
in the past. A national income of
a

than

this

83 billion

dollars, the prewar peak
reached in 1929, when the country
as a whole was
prosperous, would
be

now

tantamount

depression

to

would

and
an

The money
is

determined

production

serious

a

place

the

embarrassing posi¬
income of a nation
by the volume of

and

services

the

and

price and wage levels. Obviously,
when prices and wages are high,
the

money

income

Will

also

be

high.

The newly created deposits
through the sale of a large portion

of Government bonds to the
mercial
power

from

banks

are

com¬

purchasing

which is bound to have

an

erate

as

well

the

a

substantial decline in savings de¬

posits could be expected.
such

Under

the banks
might not be able to absorb all
the securities offered by the
Treasury and .the latter might
even

circumstances,

be

orthodox

compelled

to

adopt

un¬

in

obtaining
funds for the redemption of the
three types of savings bonds. The
measures

surplus for retirement of
public debt. It is, therefore,

evident that it will be to the in¬
terest of the Government to

pre¬

vent

the

sharp decline not only in
volume of business activity
a

but also in prices of commodities.
What measures the Government
can

or

will take to influence busi¬

ness

activity and the movement
of commodity
prices is a problem
that ought to be
given greater

social and economic consequences

consideration

of

received.

commodity

price

inflation




bil¬

faster

because

of

few

during the
Interest .charges

years.

declined
1930

occurred

from
$4,918,000,000 in
$3,412,000,000 in 1942, a

to

than

it

has

so

far

time

a

It would

when

come

the

redemption
of United States Savings Bonds
might be taking place on a large
scale,
when
the
Government
might have to rely extensively on
the

banks

redeem
of

funds

for

the

needed

securities.

The

to

amount of

standing
the

installment credit out¬
from

end

of

1941

Jan. 31, 1944.
Bank
loans,

guaranteed
those

and

$5,921,000,000
to $1,755,000

at
on

aside

from

the

which

those

Government
made

were

pri¬

monetary gold at that time
merely reduce the abil¬

United

into

other

their

only

16,288 million

dollars,

of. which
1,914 million
constituted
war-produc¬
tion loans guaranteed
by War De¬
dollars

Reserve
Regulation V.

Banks

under

Although the decline in private
indebtedness was greatly over¬
shadowed by the
tremendous in¬
crease in the
Federal debt, it is
bound to have a favorable
effect
on

economic

An

prices

for

necessary,

the

market, if

utilization

of

of

purpose

financing modernization

of

plant,
inventions and

new

acquisition of plants constructed
financed by the Government

or

during the
is

tance
be

Of equal impor¬
the fact that there will
war.

wholesale

no

the

foreclosure

mortgages

after the last

case

of

as was

war.

True,

housing

war

built by the
financed
under

or

Title VI of the FHA may be aban¬
or have to be taken over
by

doned

the Government.

ing

well

may

r

But

be

war

hous¬

considered

part of the cost of the

war..

a

Farm

mortgages at the end of 1942

were

remain

commodity

approximately at
Under these

present level.
that

assume

the

foreign

demand

American

merchandise, par¬
capital goods, will be

ticularly
very great.
At the end of the
only the United States, the

war

British

Empire and, to a lesser
extent, Russia, will be in a posi¬
tion to produce capital goods on
a large scale.
The destruction in
England caused by air warfare
has been considerable and nobody
can tell what further damage may

the

open

if

and

circumstances, it is reasonable to
for

securities

the

entirely different situation
prevail, however, if there is

,

be

in

gold for utilization in

intention of further devaluing
dollar

no

activity in the post¬
In the first
place, it
will permit
industry to sell new
period.

war

increase

countries.

dollars, at the

they

should

might
prefer to convert their American

the

1943

Simi¬

foreigners

assets

loans of all member
banks amounted to
23,870 million
of

States

sharply,

end of 1930

end

country.

larly, if commodity prices in the

will

to

the

of

economy

marily for the purpose of financ¬
ing the war, have also shown a
sharp- decrease. Whereas at the

amounted

sustained

before

hostilities

The Soviet Union will be

cease.

confronted

western

for

of

task

a
long time with
reconstructing the

provinces,
during

devastated

almost totally
the war.
In

fact, for years to come the Soviet
Union will be h large importer of

Hence, the United
States will be the first country in
capital goods.

position to produce and export
considerable quantities of manu¬
a

factured

articles,

notably capital

gOOdS. '

■

v.

:;-;H

taken for granted
that in the initial period after the
war
the sale of durable goods,
:

It

be

may

particularly of capital goods,
be controlled
by rationing
and allocation.
Despite this fact,
and

will

there is

possibility that, in order

a

to hasten economic

reconstruction

estimated to be 2,958 million dol¬
lars smaller than at the end of

and to alleviate the acute shortage

1930, while short-term indebted¬

sities,

of the

ness

creased.

farmers

This

has also de¬

situation

will

en¬

able the farm population through¬
out the country not merely to ac¬

quire

machinery and other
goods .but also to make
improvements on the property.
new

durable

In

analyzing the implications of

of

food

and

other

foreign

vital

neces¬

governments may

utilize dollar assets for large pur¬
chases in

this country.

It is also

possible that in the post-war pe¬
riod
there
may
be a
further
of

gold to this country,
sales
of
earmarked
gold to the Treasury.
Such a
situation would not be desirable.
inflow

including

the short-term debtor position of
the
United
States
the
bulletin

While

remarks:

assets, it is not desirable for the
United States to become again a

At

foreigners

the

end

owning

of the

war,

American

as¬

utilize

foreigners will undoubtedly
a
portion of their liquid

sets will have two choices: either

large importer of gold or for the
their funds in the entire dollar assets of foreigners
gold or to utilize their to be used up during the imme¬
liquid assets over a period of time diate post-war period.
It would
for the purchase in this country
be to the interest of this country
of commodities and capital goods as well as the rest of the world,
to

withdraw

form

for

of

economic

Which of

reconstruction.

these

steps the foreign
owners will take will depend
pri¬
marily upon the movement of
commodity prices in the United

if ways and means

could be found
requirements
for capital goods through loans or
direct investments and to permit
to

finance

and

example,

to

particularly

foreign

upon

part

alleviate the debt
give the country a

thus

of

have

hope
of interest to our fellow Americans.
thirty-one of a series.

This is number

SCHENLEY DISTILLERS

either

a

favorable

CORP., NEW YORK

Friends in need...
I

rediscovering

am

friends. I have
nor

hair" of

number

of

or

a

some

lot of old

"neither hide

seen

of them for

a

They've been
calling me up lately. Some of them
have, apparently, just found out
that

I

years.

associated

am

with

the

Distilling Industry. There's more
humor in this than irony. I have
friends in-need, There appears to
be a whiskey shortage.
The approach, over

the telephone,
humorous sometimes.
Here's a sample. "Well, old boy,
how are you? Long time no see.
How ya been? How are the kids?
(Those kids are now grown up.)
By the way, how's about a case of
liquor? Can you tell me where I
can get it?"
is

really

very

Well that's

Answers

one

of the

what?

to

answers.

The whiskey

shortage. I don't mean their call¬
ing me up. I do mean that some of
these friends of mine, along with
other consumers, have never before
bought a case of whiskey, at one
time. Most of them have bought
an occasional bottle. They are nor¬
mal, average men, and not "hard
drinkers."
But now, when there is not

a drop
whiskey being made, and when
distillers are digging down into

of

their

stocks, which were
peacetime; now when dis¬

reserve

made in

tillers have converted all of their

distilling facilities to the making of
alcohol for the Government; now
when every distillery must, of ne¬
cessity, curtail the quantity of its
rapidly depleting stocks, to whole¬
salers

mand

...

now

seems

the

consumer

de¬

to,increase unabated.

And that does not seem to apply
entirely,to the Distilling Industry,
It

seems

that when

we

Americans

want

something, we are willing to
pay any price. This writer has had
three offers of $1,500. within fortyeight hours for a 1941 model sta¬
tion wagon, which delivered for
$1,112. more than two years ago.
Just let me park it some place, and
suddenly a man appears out of no¬
where, and says, "Mister, you
don't by any chance want to sell
that station wagon, do you? I'll
give you $1,500. for it—cash."
The inexorable law of supply and
demand!

No

station

wagons are

being made and there's

a

mand for them. Price is

no

big de¬
object.

friends that if each
of whiskey (twelve
bottles) and he needs only one,
So, I tell

demands

my

a case

each has increased the demand—
twelve times. And,

if each gets his
he's hoarding and has kept
getting a
single bottle. And my friends don't
seem to get mad when I tell them
that. They admit it. And they
admit, too, that an excessive de¬
mand in the face of a shortage of
any merchandise, plus the willing¬
ness
of the buyer to pay "any
price," helps to create a Black
case,

eleven other fellows from

Market.

(

So what? So this! Let's

buy and

hoard—War Bonds!
MARK MERIT

foreign

governments to retain
their short-term dollar
whether or not there is any agi¬ assets for the
purpose of strength¬
tation for further devaluation of
ening their currencies and meet¬
the dollar in case no international
ing temporary maladjustments in
currency agreement has been con¬ their balance of payments.
cluded.
The liquid American assets at
If for some reason, such as, for the
disposal of foreigners can
States,

will be

would not

very

by

NOTE— From time to time, in this
space,
there will appear an article which we

loss

ity of the Reserve Banks to ac¬
decrease of 30.6%.
Another fav¬ quire
new
Government obliga¬
orable development of the
past tions so as to provide the neces¬
decade, particularly of the war sary
reserve
balances
for, the
years is the fact that most mort¬
member
banks, but would also
gages on urban as well as on rural have a
definitely adverse psycho¬
real estate are
being amortized. logical effect.
Hence, any fur¬
Short-term indebtedness has also ther devaluation of the
dollar, or
shown a substantial
decline, as is even consideration of such a step,
evidenced by the reduction in the could have
adverse effects on the

Government

Federal, State and local

rising

increase

commercial

last

that

ditures of

prices
is effect on commodity prices.
It
marked by a high degree of busi¬
may, therefore, be expected that
ness activity.
Since, however, the commodity prices in the postwar
purchasing power of the funds ac¬ period will be higher than in the
cumulated by industry and trade thirties or even in
the twenties.
would be greatly reduced, addi¬ A
price level as high as that of
tional working capital would be the
thirties, unless accompanied
needed by business for financing by a
very large volume of busi¬
the production of the same vol¬ ness activity, greater than can be
ume
of commodities.
Moreover, foreseen at the moment, could not
since in a period of rapidly rising produce a national
income suf¬
prices it is preferable to be a ficient to meet Government ex¬
debtor rather than a creditor, a penditures and to
provide a mod¬
period

terest

some

Treasury in

create

17.4%
71

refunding at low rates of in¬

discussing the postwar
budget the bulletin states: Expen¬

tion.

the banks to obtain the necessary

dollars to

urban and farm

In

If

funds for this purpose. This would

decreased

The debt service has

Federal

embarrassment
a

at

currency

the
general public will be offered for
redemption before maturity. This

a

in

having

even

fraught with danger for

than

86 billion

lion dollars.

would be

the United States.

smaller

ADVERTISEMENT

conver

them into gold.
Such a situation
be highly undesirable and

would

15

partment, Navy Department, and
Maritime
Commission
through
commodities available for sale

in

of Government bonds held by

In addition, indebt¬
has
de¬

ingly large.

,

long-

tably bonds, in order to

about

was

from

the

small fraction of the total amount

can

dollars

decreased

ultimately undermine the
and
political founda¬
tions of the country/,
"

months

bond.

billion

might

month's

above, it

war

that

forces

6

readily
be seen that the liquid assets at
the disposal of individuals at the
end

far-reaching. They
motion

one

at

after

date of

the

in

begin to increase rapidly at the
end of hostilities, only a relatively

Series F and G bonds can be con¬

indebtedness

economic

circulation of

in

set

At the end of 1942 private

term

1930,

would thus be

would

appraising the effect of the
the financial status of pri¬
enterprise the bulletin states:

war on

1921

Of SCHENLEY DISTILLERS CORP.

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

Sugar Stock Attractive
Amalgamated

Compan;
possibilities ac
of the United States, depending cording to a detailed financial an
a
clamor for devaluation of the on the circumstances.
Their ef¬ alysis of the situation prepared b
Edward L. Burton & Company
dollar, the foreign owners of dol¬ fect will be determined primarily
lar balances would immediately by the movement of prices in this 160 South Main Street, Salt Lak
Copies of this intei
convert them into gold.
Some, if country and the confidence or City, Utah.
not all of them, might even be lack of confidence that the gold esting study may be had from Ec
tempted to liquidate their hold¬ content of the dollar will not be ward L. Burton & Company upo
burden

or

to

an

unfavorable

influence

competitive
advantage
in
the
world's markets, there should be

economic and financial

ings of American securities,

further reduced.

no¬

on

the

situation

offers

attractive

request.

Sugar

Recent

Analyses

Pickering'

Merchants Distilling Corp.

Standard Silica Corp.

William A. Fuller & Co.
Members of Chicago

Salle St.
CHICAGO 4
So. La

209 S. La Salle

1951

is

1938

of

dying
ment.

■

many

tinkered

have

MARKETS

agency

attempt made to stabilize

no

was

CORPORATION

the market by

open-market oper¬

ations.

Four

Stock

were

no

changes, there
reported of

the

Despite

to Dealers

instances

ob¬

price cutting on the Cudahy

brochure

page

it is generally
believed that the syndicate man¬
and

ligations,

ADAMS

CO.

6-

satisfied with the
Of course, the test
changed agreement

were

agers

South La Salle Street

experiment.

Chicago 4, Illinois

231

of

>

Phone State 0101

CG 361

Teletype

such

a

In

would be much stiffer

de¬

a

instead

market

clining

of a
at present.

sellers' market, as

Municipal Bond Club

of the

tors

Cudahy agreement, it was
"after the initial public

that

(John Nuveen & Co.), A. M.
man
(Morris
Mather &

& GO.
Members of

.

Cudahy offering, it is under¬
stood, was because the Depart¬
ment
of Justice
considered in¬
vestment bankers "on notice" of

Exchange (Associate)

Street

>,

Traders

La Salle Street have

on

been carefully

following the move¬

of'-Chicago;? North Shore
and Milwaukee Railroad bonds, as
ments

that a group of
investing heavily in

are

the securities.

the Street are that
of bus company execu-

Reports

Tele.

'

CG 1660

a

group

(Continued on page 1923)

Circulars

Recent

Poor &

On

was

test

Other

It

case

investment

Common

ernment

Diana Stores

im¬

made.

bankers

means

Some

agency.

length

of

shortened
in

all

the

syndicate

Common

Markets

was

unani¬
mous about what steps to take
to avoid trouble with the Gov¬

have been by no

Steel Products Engineering

Active

a

minent if no change were

Common

have

that

feared

held,

was

hearings, it
such
notice.

furnished

Request

Co. "A"

Detroit Harvester

We

agreements,

that

Chicago Traction Securities

a

shorter period

have
their

feeling

might be

Straus Securities Company

Tel. ANDover 5700

St., Chicago 3, 111.
.

Tele. CG 650-651

who

are

and
accepted

the American National Bank,

the

formally

Trustees

that offer,

it is reported.

V,-'*.

IMIMI

Paul H. Davis Co. to Admit
CHICAGO, ILL.—Paul H. Davis
Co., 10 South La Salle Street,

&

members

of

the

New

York~and

Chicago
Stock Exchanges,
will
admit
George S.
McEwan' and

provisions.

have

step will be to see
other firms will adopt
the drastic measures used in the
The

next

Buying Interest in

Resources Corp.

been

firm for
as

some

sales

ment

associated

with

the

■

time, Mr. McEwan

of the invest¬

manager

department.

V "

.

Oak Pk. Tr. & Savs, Bank
Sun Glow Industries

Shore Nat'l. Bank

Niles Center

A
«

Spl. Assmts.

Hearst Consol. Publ.

request.

Chicago Daily News

will

Enyart, Van Camp & Co., Inc.
100

West Monroe Street
CHICAGO

ANDover

2424

CASWELL

120 South La Salle Street

CHICAGO

3
CG 965




& CO.

Teletype CG 1122

upon

request.

;

\

Webber-Simpson

Company,

&

send

La Salle St., will

208 South

complete^ up-to-date information
Continental Commercial Corp.

on

Products

Metal

Rieke

and

Corp.

request.

upon

New

York Security Dealers

on

this subject, they

just issued a four-page arti¬
cle on Television, defining it, out¬

lining its development, its poten¬
tial^ market,
covering what is
known in connection with post¬

planning, and listing a num¬
of companies, giving market

war

ber

comparisons and
comparisons.
~
The first

-

sheets

balance

in circula¬
tion after deducting the moneys
held in the U. S. Treasury and
the

amount of

Federal Reserve Banks and
The figures this time are

those of March 31,

the money

that

American

r

-

.

course

of the Federal Reserve

ber banks

$21,115,488,125

was

as

1944, and $16,249,773,305 on March

31, 1943, and compares with $5,698,214,612

Oct. 31, 1920. Just

on

outbreak

before

the

World

War,

that is

of
on

the

first

30,

June

•1914, the total was $3,459,434,174.

Clark With Harris Hall
(Special

La France
■

of

1960

.

to The Financial Chronicle)

ILL.—Kenneth

CHICAGO,

D.

Clark has become associated with

Harris, Hall & Co., Inc., Ill West
Monroe

Street.

Mr.' Clark in the

past was a partner of Kenneth D<
&

Co.

of Los Angeles

Chicago. »'

j

'

'

and

'

-

Continental

.

Commercial Corp.

Pfd.

Rieke Metal Products

&

Com.

,

Corp.

.

Information on

Request.

Sincere and Company
Members
and

Stock Exchange,
Principal ^Exchanges.^.,

New. York

Other

231

CHICAGO
State

CHICAGO

South La Salle Street

Teletype CG 129
York Office

of

that held in bank vaults of mem¬

Iowa Electric Co. Pfd.

k

1944, and show

in circulation at

(including

date

that

5V&S of 1956 & Common
•

money

agents.

Complete

1

'

showing

statement

monthly

ary

Flour Mills of America

Ass'n

in

Department

Treasury

Washington has issued its custom¬

Clark

of the month, in con¬

Iowa Elec. Lt; & Power

Telephone: Harrison 2075

Wire to New

have

have

*

Board of Trade Bldg., Chicago. 4

Direct

Money In Circulation
The

To meet the demand for

information

.

STRAUSS BROS.

3, ILL.

Phone Central 5690

Copies of this analysis may be had

say

hostilities

when

play

MIDWEST

Members

McKinnon

&

plishments of radar and electronic
devicers has again directed atten¬
tion to Television and the role it

4's

on

La

South

231

Price,

&

St., have prepared an inter¬
esting analysis of
Consolidated
Gas Utilities Corporation common.

against $20,823,585,532 on Feb. 28,

analysis just issued on Tele¬
vision, the publicity being given
to the almost unbelievable accom¬

MEXICO

Information

Hicks

System)

an

for the

holding Company owning
timber
lands
in

Copies of

material may be
request from Straus Se¬

Thomson

As

in

-

,

MARKETS

extensive

Products Engineer¬

Steel

interesting

NEW YORK

International

Poor & Co., Detroit Har¬

on

curities Co.

■

Standard Club 5s 1949

Street, have recent cir¬

Salle

La

cdased?

McEwan And Trees

South

Straus Securities Co., 135

offer to buy in the equip¬

Harry A. Trees to partnership in
their firm effective May 11.- Both

how many

So.

Bond
Bonds,

by

firm upon request.

by the

had upon

The

ment from the Trustees,

distribution

copies of which will be sent

ica,

this

Others have dropped out penalty

satisfactory to the Government.

135 South La Salle

on

Salle

2§1 South La

ing, and Diana Stores.

Chicago-

North Shore Offer

an

Co.,

special circulars on American-La
France, Iowa,
Electric Light &
Power, and Flour Mills of Amer¬

vester,

made

and

Sincere

culars

Chicago, North Shore and
Milwaukee
Railroad - Company

but the oral

analyses may be had from
Faroll & Co. for the asking.

of these

on

Trustees Accept

position

Street,
have
prepared
recent
analyses of Merchants Distilling
Corp. common stock and Standard
Silica Corp. common stock. Copies

Salle Street, have for

Department made no effort to en¬
force its views earlier because it
was considered that underwriting
firms had not had suitable notice;

5775

survey

indicate

buyers

since the oral hear¬
ings on the matter, about 10 days
before the Cudahy flotation.
The

its

Chicago 4
Central

last

has

from the firm

may

the

Chicago Board of Trade

Tel.

Their

Review

South La Salle

Faroll & Co., 208

...

.

Mexico.

Copies may be had from the firm
upon request.

(First National Bank
of
Chicago), Paul L. Mullaney
(Mullaney, Ross & Co.), and A. G.
Pickard
(C. F. Childs and Co.,
Inc.).
1
Lewis Miller

tion measures were abandoned on

Chicago Stock Exchange

Salle

Co.),

in

lands

a

exten¬

owning

company

timber

sive

International,

Corp.

Resources

holding

Hoff¬

Settlement of the claims of ununderwriters
and
severally determine d e rl y i n g equipment certificate
the respective prices at which they holders in the near future is ex¬
may offer
their own bonds for pected to pave the way for re¬
sale."
organization of the road under the
The reason why price stabiliza-' Chandler Act.

JOHN J. O'BRIEN

So. La

weekly

heater.

a

Super¬

and

organization; Philco

on

formation available on request on

the

offering

dealers

231

issues in

quest.
esting

Savings Bank), Treasurer. Direc¬
tors chosen were F. B. Carpenter

reports
In the

said

New York Curb

earnings and leverage Trust
a general way, with spe-f
cific articles on United Cigar Re¬

pany

dividing them into three .cate¬
gories, those selling at 90 to 105,
Also available is an inter¬
70 to 90 and 50 to 70, respectively:
of Chicago
were elected at the
memorandum on current
Any of the literature described
recent
annual
meeting
of
the
developments
affecting Chicago
above is available, without charge.
group, i S.
E.' Johanigman (The Tractions.
Requests should be addressed to
made in
the Cudahy
contracts. Milwaukee Co.) was elected Pres¬
Thomson & McKinnon's Statisti¬
All
time
limitations
were
re¬ ident; Floyd W. Sanders (Smith,
Caswell & Cd., 120 South La cal
Library, 231 South La Salle
moved, and no penalty clauses Barney & Co.), Secretary, and Salle Street, have interesting in¬
Street, Chicago 4, 111.
werfc included.
In addition, there R. B. Swazey (Harris Trust and

BAYWAY TERMINAL

Common

candidates

of

slate

entire

earnings

ment

The

up-to-

and current com¬
Chicago North Shore and
Milwaukee Railroad.
Copies may
be, had from the firm upon re¬
date

:'V7';

*

analyses,

comprehensive

,.

*

for distribution

Salle Street, have

Fed¬ presented for officers and direc¬

filed its brief last
January, none went as far as the
Cudahy group did.
Two
principal
changes were
eral

CG 1200

Available

ly Stock Review covers Oil Com¬
Co., 208 South La

Brailsford &

firms are stu¬

many

*

under¬

their

with

writing agreements since the

3

Dearborn 9600

Adams & Co., 231

Thus far it is

-'

■

RANDOLPH 4696

Toronto

South La Salle nection with their Planned Port¬
folio Service, Thomson & McKin¬
Street, have prepared an interest¬
non- released pamphlet No.
2, "A
ing four-page brochure on BayWeekly Dividend Check" (No. l
way Terminal Corp. common stock,
was
entitled
"A
List
of Low
copies of which are available to
Price Equities.")
Their last week¬
dealers on request.

flotation

results of the bxperi:
7■ 7 •'7

the

bankers worried.
other syndicates

investment

Although

Salle Street

CHICAGO

that

known

Justice,'which have many lead¬

ing

Incorporated

of course/*
Cudahy offering.

change,

4

Chicago Recommendations

been discussing the recent

outgrowth of the recent anti¬
activities of the Department

an

trust

Doyle, O'Connor & Co.

ACTIVE TRADING

drastic

This

Midland Utilities

Street

Salle

m

Cudahy Packing Co. bonds by a syndicate headed
by Halsey, Stuart & Co., Inc., for it marked a milestone in the in¬
vestment banking business.
For the first time -in any sizeable
marketing all price maintenance measures were removed from the
underwriting agreements on the issue.
f,:/V7/'7777^

Pfd.

Quoted

—

CHICAGO

Indianapolis

York

New

CG 1309

1520

Andover

Sold

So. La

208

CHICAGO 4

$14,000,000

of

Old Dominion Power

135 S. La

Tele. CG 146

—

ZIPPEN & COMPANY

Exchange

exchanges

231 South LaSalle Street

3

CHICAGO

'

Stock

principal

York
all

and

Salle St.

South La

105

<

Chicago 4

Salle Street firms have

La

Oil

Deep Rock

Robbins & Myers

6s, of

•

Bought

request

Members

•

New

Chicago Brevities

in

Publications Pfd.

of

Street

Tel. Deurbom 9200

active interest

5s

Stock Exchange

on

SECURITIES

THOMSON & McKINNON

& Co.

l

FOREIGN

just

Tele. CG 156

1430

We have an

has

Ryan-Nichols

York Slock Exchange
and other Principal Exchanges

Hearst Cons.

Companies

Research Department
prepared a brief analysis
cy
the
petroleum
industry
which
discusses
the
present
international
situation and gives current statistics
on leading
companies.
Investment

Copy

New

Andover

Oil
Our

•

Common

FAR0LL& COMPANY

Phone

Earnings of the

Stock

Common

it

.

.

Stock

Common

208

\

.

COMPANY

Preferred

Member

■

APPLIANCE

Lumber Corp.

Stock

Common

-

.

PARKER

Request

on

Thursday, May 11, 1944

FINANCIAL CHRONICLE

THE COMMERCIAL &

1922

2400

-

4

208

CG 252

S. La Salle

St.

Tel. CGO 1268

Volume

THE COMMERCIAL & FINANCIAL CHRONICLE

Number 4280

159

1923

V

Municipal News& Notes
that., the

TRADING

HOTEL SHERMAN 5s/57

given .widespread publicity in
fornia Toll Bridge Authority- will other parts of the country because
consider
bids
May ; 22 for the of the pre-eminent position held
$56,000,000
San Francisco-Oak- by the city and in consequence of
Announcement

4

Cali¬

AMBASSADOR EAST HOTEL Ss/52

absorb

to

scheduled

approxi¬

mately $85,000,000 in issues dur¬
ing the next 30 days. ■■: ' ;
will

total

The

considerably

trict,
izes
■

offering

Neb.,

as

than

$100,-

the event that the
Public Power Dis¬

in

000,000

Consumers

■

more

to

swelled

be

material¬

'

expectations.

per

such

fact

civic

as

that

Even so,

the volume of business

at

exceeds the

market via liquidations, much of

(

,

face

latter

The

r under

operation will get
on June 12 and, if

way

precedent

past

prevails,
the
virtual stand-

prospect is for
■

a

still

new

in

other

borrowing

activity, both municipal and
corporate, while the drive is in

•

.

>■' .progress. For this reason, dealV; ers
probably view with con-

satisfaction

V

siderable

;

ceptionally
business

large

the

ex-

amount

in sight over

now

of
the

value.

It

little

is

the

that

Vice-President

;

;

In

to

addition

As

7.

June

Public

for

the

Consumers

District

Power

>

of

amount

same

San

Francisco-

Oakland Bay Bride revenue serial
'

and

4s

term

While

ing.

presently outstand¬
these bonds do not

callable until March 1,
and at a premium of 5%,
officials of the agency decided to
negotiate the refunding at this
time in order to take advantage
of the current exceptionally fa¬
vorable money and market con¬
become

next,

"

the

Chase

ditions.
double

this

While
interest

and

will

involve

payments

to

risks

in

the field

of

municipal government."
Speaking on "New York City
Bonds—A Tax-Exempt Invest¬

-

fact

next,

1,

that

the

the

very

amount

originally outstanding has been
•

;
'

to the

reduced

of

some

$15,000,000 since June, 1939, indicates a formidable degree of
earning

power

security.
sue

current

and

lower

4%

rate

than

figure, "the

the

spread

between gross and net revenues
should be greatly widened.

New York

City Bond

Prices Discussed




Established 1922

Tel. WAB. 8686 and Western Union Telephone

120 South La Salle Street

V*: :>

4

CHICAGO

Tele. CG 640, 641 & 642

r

Tel.

Chicago Brevities
(Continued from
tives have been

bonds

with

control

accumulating the

3
Tele. CG 878

Randolph 6960

view

a

eventual

to

interurban

of the electric

line

by

men

involved have admitted buy¬

the

bus

The

company.

ing the bonds, but say that their
interest is merely on an invest¬
ment basis.
Other

-\yCy' V,V

stories, that

surance

company

terested,

a

was

large in¬
also in-j

stimulated

have

(the

few years ago, are now

$3

a

approxi¬

$36, and first and re¬
funding bonds which were down
mately

to $1.50 are now close

American

The

to $30.

and Trust Co. of

interest.

of

in¬

settlement

the

MUNICIPAL BONDS

Court

is

Bought

necessary.

When

the

cleared, the

equipments

will be open for

way

into

receivership

in

1932.

Recent earnings of the road have
been very

Sold

—

Quoted

—

are

reorganization of the line, which

DANIEL F. RICE & CO.
Members

and

Stock Exchange

York

New

Chicago Board of Trade

141 W. Jackson Blvd., Chicago 4
Teletype

7

CG

1276

satisfactory, with heavy

Army and Navy business to sub¬
urban

military and naval estab¬

lishments.

Reports that the Gov¬

intends

ernment

Bank

National

approval

^

ligations. First mortgage bonds,
as

G,
settlements would

accrued

Wisconsin

series
F-2,
80%,
None

80%;

series

these

clude

went

market for the North Shore ob¬

which sold for as little

F-l,

nothing;
of

Illinois, Iowa and

1922)

page

series

maintain the

to

establishments at* Great Lakes and

for

the

May

em-

of

settlement

Investment Securities
Public

Utility

Industrial

flowing from the periodic

the

underlying

ment.

as

unfortunate

city of such
"threatened bankruptcy,
the

to

50%

have

certificates

The

default

Sheridan

Fort

Railroad

*

Municipal Issues

-

the

pos¬

suburban

car¬

increase

We Maintain Active

sibilities

that

the

in the

for

10

been

in

Incorporated

135

South

Hugo Moses With Enyart

La

Salle

CHICAGO
CG 530

to The Financial Chronicle)

(Special

Since 1935

years.

Trading Markets
Leading Over-Counter Securities

£. H. Rollins & Sons

war.

certificates
covering
of the road's equip¬

equipment
about

application
terms

Linen

conse¬

the
quences

Mr.

3,

Street,

3
Central 7540

Direct

CHICAGO, ILL.—Hugo Moses,
default, financial crisis, pending partial interest payments have
to 6%
disaster, a grave outlook". After been made on the
formerly with Webber-Simpson &
noting some of the "dire threats equipments.
Co., is now connected With Enyart,
and predictions" that have been
The offer of the. railroad trus¬
Van Camp & Co., Inc., 100 West
made regarding the* city's finan¬ tees-was on the following basis:
'^Series E certificates,
cial outlook duringHho past dec¬
100%r
Monrpe
'

Wires

To

Offices

Our

In

Principal

Cities Throughout
the Country

Specialist? in

V..

Jl

ade, Mr. Linen made the follow¬
ing comment:

,

"In spite of these dire

threats
and predictions, New York City
has gone on from year to year
paying for its relief costs out
of current income, balancing its
budget, avoiding refunding of
all serial maturities, maintain¬
sinking

ing full

fund

require¬

ments, reporting satisfactory tax
collections and

able

creditable

making
progress

reason¬

in the

retirement of debt."

ments

cial

were

crisis

worse

effected but

a

finan¬

impended likely to be
that leading to the

than

of

approximately $6,900,000, which was transferred to the
tax deficiency account as provided
by the (City) Charter."
revenues

"It is not, I believe, generally
that 32% of the total

realized

debt of New York

by its
the

Actually

city

retirement

the

jurisdiction

Comptroller,

The second factor believed

re¬

the

and

and

held

funds

sinking

$481,880,850

pension

the
City
$465,641,854.

of

Thus, the amount of New York
City bonds in the hands of the

$2,015,284,130.

was

PHILADELPHIA,
May

&

Gill

be

new

City bonds or rigidly limited in
purchased
or held because of doubts or prej¬
udices

engendered by bad pub¬
licity, the effect becomes the more
accentuated. Except for these rea¬
sons

there

planation

is

satisfactory

no

New

why

York

ex¬

City

bonds should sell at terms which
in many cases are

lower than ap¬
decidedly inferior credits
and risks in the field of municipal
ply to

investments.

&

Haven
Bodine

York

New

office

market has had

an

at

Bodine, Philip W. Townsend, Ex¬
change
member, s William
D.
Townsend, John Harrah Wood,

clients.

general

partners,

Gill and William J.
limited

partners.

>

and Logan B.
McCahan, 3rd,
,

;

as

follows:

responsible for the low prices pre¬
on New York City bonds

was

sued

in

connection

with

subway

quisition of the
ties.

,■

the

ac¬

proper¬

' '

"In view of the better place¬

ment which has occurred dur¬

ing the past 3 years, it is sur-;

prising to many of us that the ;
price

on

New

York

ligations is not in
able

relation

to

City

more

various

issues in the market."

ob¬

favor¬
other

r

::

New
new

York

membership in
Stock Exchange

Haven &

the

oldest

Townsend

investment

Philadelphia,

having

is

investment dealers
issues

Maintaining

no

for

their

retail de¬

of our own, we compete
way with dealers, but serve
exclusively. Correspondence
invited.
*
partment
in

no

FLOYD IK CIKF CO.
Exclusively

120

Wholesalers

and

Underwriters

South La Salle Street

Chicago 3

ships in the Philadelphia Stock
Exchange, and New York Curb
Exchange. .
v':
De

attractive

them

firm will have member¬

formed in 1874.

"The other factor mentioned as

;

In addition to its

half years

Mr. Linen stated

specialize exclusively in under¬

writing and distribution of securi¬
with

in

CG 95

SERVING INVESTMENT DEALERS

ties, providing

excellent op¬

preceding. Included in
this amount was approximately
$300,000,000 of corporate stock is¬

Broad

Crouter, member of the Exchange,
T. De Haven, Robert C.

the

4

9868

Walter

of bonds issued in the two and a

compared with comparable and
less favorable credits, con¬
the large amount of city
bonds outstanding. In this respect,

State

We

even

cerns

30

be h Gordon

will

Partners

as

on

the

Tel.

Street

Salle

The

Street.

portunity to absorb and quite
fully digest the excessive amount

obtained

greater yields
New York City bonds

for

Crouter

La

CHICAGO

firm will maintain its Phila¬

of

sponsible

S.

208

and

delphia office in the Packard
Building and will 'also have a

the

also, of course, that
during the years 1939 and 1940, an
extraordinary number
of New
York
City bonds were issued.
Since January, 1942, however, the

Haven &

formed.

be

-

"It is true

York

dissolved

Townsend,

will

request.

of

of Crouter,

De

and

will

"The law of supply

the amount that will be

New

the

Townsend

Bodine

&

find the doors closed to New York

1944,

22nd,

able on

PA. —As

Stock Exchange firms

De

arid demand
itself here, and where we

Comprehensive analyses,
up
to
date
earnings and current comment avail¬

Bodine En Plila.

Continuing, he said:
asserts

AND

Milwaukee Railroad

Townsend, Greater &

under

systems,

held

Chicago North Shore

To Form B® Haven &

City is held

sinking and pension
on June 30 last,

own

funds.

public

desire of
being critical of the sources of
such "bad publicity", Mr. Linen
analyzed some of the forecasts in
the light of actual developments.
Among these was the "prediction
of Jan. 30,1939, that the city faced
not
only an unbalanced budget
unless
economy
and
retrench¬
While disclaiming any

the large amount of debt out¬
other community
in the country has a larger quota standing. At the end of the last
of "forecasters" than the City of fiscal year, June 30, 1943, the city
New York. Practically every day, had a total funded debt aggre¬
or so it seems, the local press con¬
gating $2,962,806,834. This repre¬
tains reports to the effect that the sented over 16% of all State and
municipal government, is headed municipal debt estimated as out¬
full speed toward "bankruptcy" standing on the same date by the
or
is
already at the precipice. U. S. Treasury. The amount of
These dire predictions are usually such debt was $18,406,000,000.
;
no

JACKSON BLVD., CHICAGO

State of New York in New York

vailing
Probably

C. L. Schmidt & Co.

;

BUILDING

rier will continue to do well after

economic

As the refunding is¬
obviously bear a con¬

will

siderably
,

extent

TRADE

ment", before a meeting of the
Savings Bank Bond Men of the

low

debt

of

OP

Chicago, as suc¬
cessor equipment trustee, has in¬
dicated
acceptance of an offer
tendered by the railroad trustees

edge of bankruptcy in 1932 and
"'■■x
refunding interest rate, now defi¬ 1933."- ■
Actually, Mr. Linen observed,
nitely assured more than over¬
"it is a matter of record that dur¬
shadows the foregoing factor.
ing the critical year 1939-1940
As for the bridge itself, the
there was reported a surplus of
March

141 W>

Na7

City bonds quoted on more
generous
yields than those ob¬
tainable
on
"decidedly inferior

the

financing,
this will probably involve about
$42,000,000,
with
the
proceeds
being used in the redemption of
the outstanding indebtedness of
eight of the district's present 11
operating divisions.
1
Purpose of the $56,000,000 Cali¬
fornia Toll Bridge Authority of¬
fering is to provide for the re¬
demption of approximately the

.

of

York

on

$56,000,000
California bridge revenue refunding issue, set for May 22, the calendar
of
impending operations
includes the following: $3,180,000
Orleans Levee District, La., on
May 16; $4,000,000 Buffalo, N. Y.,
$11,000,000 Chicago, 111., school
board, and $6,400,000 Erie County]
N. Y., all'three on May 24, and
$2,040,000
Houston,
Texas,
oh

BOARD

i

issues

warranted publicity is responsible
for the paradox which finds New

credits

Preferred

&

conse¬

involved
bearing on the credit
structure of the city as such, par¬
ticularly with respect to its debtpaying ability and outlook. Inr
deed, oftentimes the nature of the
terminology
used; employed in

next three or four weeks,
y

Common

KNEELAND & CO.
V'

no

which was done with a view to tional Bank of New York, pointed
reinvesting the proceeds in thO out in a recent address, that much
Fifth War Loan offerings.
,
of this adverse and generally un¬

-

Central Elec. & Tel.

lends

definitely in. prospect greatly
comparable total for
any 30-day period during the past
several years.
It compares, for
example, with sales of about $16,500,000
throughout
the
entire these criticisms is- of such char¬
month of April.
This figure rep- acter as to imply a threatened
resents only the new issues sold
condition not even intended by
by States and taxing units in that their authors.
period and is exclusive of the old
This to the contrary, it seems
issues which reappeared on the
indisputable, as John S. Linen,

now
•

w.s.

BISMARCK HOTEL

^

that some parts of the
investing public, not being fully
acquainted with!the circumstances
which give rise to these "fore¬
casts", are inclined to accept them

have

Mfg. Co.

Common

EDGE WATER BEACH 6s/50

moreover,

quence

:

Common

Fuller

weight and cred¬
their contents. It is true,

to

ence

associations, etc., a

IN

Reliance Steel Corp'n

w.s.

MORRISON HOTEL 5>/2s/48

land Bay toll bridge revenue re¬ the wide distribution of its metro¬
funding bonds means that, at this politan dailies. They usually em¬
writing, the municipal market is anate from responsible sources,

,

INTEREST

w.s.

Attractive Situations

one

houses

been

Ward & Co., 120 Broadway,
York
lars

New

City, have prepared circu¬
several situations which

on

currently offer attractive possi¬
bilities, the firm believes. Copies
of these circulars, on the follow¬
Reports Available
Butler-Huff & Co. of California, ing issues, may be had from Ward
& Co. upon request.
210 West Seventh Street, Los An-.,
Du
Mont
Laboratories
"A";
geles, Calif., have interesting re¬
Distilling;
Crowellports on 137 insurance companies Merchants
and banks, copies of which are Collier Publishing; P. R. Mallory;
available without charge to in¬ General
Instrument; Long Bell
vestment dealers, banks,
insur¬ Lumber Co.; Great American In¬
ance companies and other finan¬
dustries; Mid-Continent Airlines;
cial institutions.
Copies may be Massachusetts Power & Light $2
had from the firm upon request. preferred; Majestic Radio; MagAlso available on request are cur¬ navox Corp.; Brockway Motors;
rent brief studies of the Hanover National
Airlines; Chicago and
Fire Insurance Company and the Southern Airlines; American Ex¬
Bank of the Manhattan

Company. port Airlines; Northeast Airlines.

THE COMMERCIAL & FINANCIAL

1924

CHRONICLE

$8,000 per year by the reduction.
Stockholders protests to the pres¬

CONTINUOUS INTEREST IN:
I

National Tool

Nat'l Bank of Tulsa

I Monarch

I

Water Power & Paper

Consol.

Fire Ins. Co.

I Koehring Co. V.T.C.

coldly ig¬
prediction made to
him has proved true and the mill
has been closed for weeks by a

I Nekoosa-Edwards Paper Com.

Northern Paper Mills

I Compo Shoe Mchy, Com. & Pfd.

Hamilton Mfg. Class

My

The

strike.

Central Elec. & Tel. Pfd.

asked

Com.

I

A & Com.

is

taken

from

in

increase

the

preferred share¬

hands

Teletype

State 0933

Chicago:

PHONES—Daly 5392

MI

488

they

know

When

(2), WIS.

which

which

MILWAUKEE

MASON ST.

EAST

225

dividend

it placed a weapon in

as

Of all lines of economic

war

times

their

unexpected but

was

how

to use.
have
passed

5%

changes in their plants, equipment and sources of revenue.
Though there may have been substantial alterations here and there

in the

character and extent of their service demands due to vastly

expanded
dustrial

stocks

some

stances,

high wages and

in either
willing to wager that

think it will be. near par
I

case.

Wisconsin Brevities
"

Steel Tubes Co.

Globe

for

of Milwaukee, reported net earnings

after

$488,200

setting

k

$175,000 for post-war re¬
fund
of Federal
excess
profits
taxes was added to income and
entered on the books as a special
basis

in

volume

Sales

asset.
both

1943

We

share

per

on

"Rock Island"

Missouri Pac.

the 282,084 shares of
outstanding

stock

common

GIVAN COMPANY

as

compared with $1.99.

UNDERLYING

Net current assets as

of Dec. 31,

1943, totaled $1,827,017 as com¬
pared with $1,921,715 Dec. 31,
1942. Cash and U. S. Government
notes on hand at the end of the

(in addition to sufficient tax
anticipation notes to cover the
entire
Federal
tax
liability)
year

amounted

$1,755,704 as com¬
$1,044,689 the pre¬
vious year.
Accounts and notes
receivable declined $181,048. In¬
ventories in anticipation of quick¬
to

deliveries

on raw

material and

supplies, were reduced from $2,556,150 to $1,666,137. Bank loans
"V"

under

Loan

Credit

Bank

this cut

and vital

rela¬

makes

best,

world's

blunders at times is beyond

comprehension.

What influence they

wield

common

rules

2, WISCONSIN

Tele. MI 592

Investor Griiicszes

for

these

Editor:

and

of the stock¬
unnoticed by

going

are

millions

of,

millions

other

workers,

stockholders

who

who

others

element / and

would

Spartanburg, S. C.

equiva¬

share is

represented

current assets.

by net

Dividends totaling

$282,084, or $1 per share were
paid during 1943 and a dividend
of 25 cents per share was paid
March 13, last.
Wisconsin Investment Co., Mil¬

waukee,

as

of March 31, 1944, re¬

ports net asset value of $3.19
share.

per

The latter compares with a

net asset' value of

$3.01 per share
reported on Dec. 31, 1943, and
represents an increase of 6%. The
asset Value per share is, as usual,
computed on the basis of current
prices for security holdings plus
brokerage on the same. Net profit
for the three months ended March

31, 1944, \yas $6,373, before giving
consideration to net profit on sales
of securities amounting to $62,362
and

credited

to earned
provision of $19,740 for estimated taxes applicable

surplus,,, less

thereto.. Cash
as

of

March

and

31,

Governments

1944,

totaled

$164,334.

for

Bankshares

Corp.,

Milwaukee, at Dec. 31, 1943, had
investments in the capital stocks
of

six

national banks
and one trust company.
In Feb¬
ruary, 1944, one bank was sold,
the proceeds exceeding the net
book value at Dec. 31, 1943. The
investment
in
operating banks
.and the trust company as of Dec.
31, 1943, is stated at $26,110,549.
The company reported a .net in¬
come
for 1943 of $875,276, after
State and Federal income taxes,
as against $620,766 for 1942. Div¬
idends of 25 cents per share were
paid in both years, entailing an
outlay of $486,147 and $488,816,
respectively. Cash and Govern¬
ments
year

operating

on

hand at the end of the

'totaled $1,583,838.




the

of

matter

certainly not changed for

*v>

have

who

on their pre¬
ferred stock cut the annual divi¬

paid 7%

to

5%. In the past those

in

touch with conditions in the tex¬
tile
a

industry know it has been of
prince or pauper class.
Many

times
ed

stockholders have wait¬

we

a

year
on

ferred

stock.

our

that

our

divi¬

cumulative

for

pre¬

more

or

dends

say

We

truthfully
with much

can

waited

we

patience.
legislation

stockholders
unwise

which

we

unfair

thought

and

proposed they rallied
to the support of management. In
was

other

words

stood

shoulder

for

we

shoulder

with

the management.

About Jan.
notices

or

take

on

1,

from

could sell

the

began to get

we

the

mills

stocks

our

must

we

risk

It

that

we

to the mills

in

our

returns

In other

preferred stock.

5% basis.

our

money

opinion
that the eastern selling agents for
the. mills

the

a

their

they did not
of the local

stock.

At

the

re¬

stockholders I
presidents

several

the

the

that
Textile

demands

wrote

was

number of mill

predicting
cause

that

feeling

of the

of

quest
wrote

cut.

large blocks of

own

belief

our

know

the

stock in the mills. It

common

holders

was our

behind

were

They usually

them

v

.

'

■

;

:

for

that

more

in

the

to

of

be

setbacks

severe

There

was

a

in

net

corre¬

New

in his

York,

Utilities

the

and

and

flow

of

not

lost

sight

of

securities. According to

the firm,

investors * in

of

the

Metropolitan areas of the East are
holders of New Haven securities
the

and

have
ent

no

majority of them
clear picture of the pres¬
vast

situation.,.

ened

call

on

the

mills

institutions

financial-

generally

and still are
holders of many millions of dol¬
lars of New Haven bonds; that

them,

of

many

the

higher wages has arrived.
One
mill fvith 4,000 shares of the new
5%

Preferred

stock

saved

only

of

interest there may be between the

public and the utilities, there is a
long-range fundamental identity
of

decline, par¬
traction com¬

severe

a

utility securities

000,000, of which

result

a

of

forced

banks

closed

liquidation of
and other financial

institutions and generally are pro¬
hibited

from

buying them under

existing laws and regulations and
that as a result, purchases of the
bonds

are

confined

now

to

the

to

the amount

to
to

understand

that

the

situation is

the
old

securities

still selling at or near

exceeded $300,-

period of from three
five years to restore the utilities
their growing popularity that
a

The pub¬
commissions through¬

started before the war.
service

out the country

gradually permit¬
ted higher utility rates to meet
the conditions of increasing costs
and

the

enlarged demands for
All this led to a

utility services.
facilities and
struct

so
are

bankruptcy

companies

in

a

Miles With Loewi & Co.
(Special to The Financial

MILWAUKEE,
Miles has become

Loewi

Street.

&

Chronicle)

WIS.—John

a

wild rush to con¬

projects and to organ¬
ize new utility
corporations.
It
was in this period that the public
service
holding
companies
at¬
tained their ascendancy in the in¬
new

dustry.
Small utility concerns,
of which had been financed

many

business

any

sion
the

or

The

war.

associated with

Co.;" 225

East

Mason

against

financial depres¬
may come about after

that

tabulations

of

the

"Commercial & Financial Chron¬

icle"

disclose

year

period,
than

three

dollars

of

more

lion

that during the 51939-1943 inclusive,
and

half

a

long-term

bil¬

bonds

issued and publicly offered
by utility companies solely for re¬
funding purposes. This sum con¬
were

stituted
of

than

more

three-fourths

total

public utilities offerings
during the period. All this means
a

substantial

interest

reduction

charges

in

well

fixed

less
burdensome mortgage restrictions
on
their new outstanding bond
as

issues.

as

-

Present low interest rates are
and
had been unable to expand be¬ likely to continue, particularly for
cause
their size did not permit concerns which, like the utilities,
them
to enter the metropolitan have stability of earnings and an
capital markets, were absorbed by expanding demand for their ser¬
various holding companies. Many vices.
Comparatively little spec¬

mainly

from

were

local

sources,

newly organized for

ulation

this particular purpose.

the

amiding

public

process

out of hand.

E.

financial

sound

condition,—well fortified

of these

general public. The number of in¬
vestors sufficiently well-informed
small

1922

000,000.
It required

have period of rapid expansion of plant

however,

been forced to sell their bonds as

Copies of the analysis may be
I had
upon request from A. W. Ben¬
end the
kert & Co., Inc.

for

that,

fact

conflicts

interest.
The
orderly, wellconsidered, and generally impar¬
ticularly those of
tial regulation of utilities under
panies, and in the face of increas¬ the commission is in
startling
ing demands for their services and agreeable contrast to the hap¬
and the pressing needs for plant
hazard, chaotic regulation by di¬
expansions, they were handi¬ rect legislation or by municipali¬
capped in bidding for funds in ties which
prevailed in the earlier
the capital market. Thus, in 1920,
days."

underwent

lic

v

pointed out that banks and

It is

rush

The long threat¬

the

whatevqj- temporary

The pyr¬
followed,—and

or

risk is

promotion

utility

less than in the

already.

of

capital into the utilities

industries.

cases

credit

.

pay.

more

the

is essential to their expansion and
to the public welfare. They have

with the unbridled competition to

much

book, "Public
People": "The

maintain

to

acquire and construct plants, the
momentum of the movement got

be

is

those companies. They have been
mind f u 1 of the fact the free

than

would

regulation

commissioners as a whole, while
faithfully guarding the public in¬
terest, have sought to promote the
efficiency of the utility companies

the small amount saved. My pre¬
dictions have come true in several

cost

Moreover, the

rate

offerings of long term public
Another financial advantage
were biit $218,which the utilities" will have in
a considerable
the post-war period to come is the
York, New Haven & Hartford portion were issues of the Amergenerally lower scale of fixed in¬
R.R. has been prepared by A. W. i c a n
Telephone
&
Telegraph
terest charges.
Not only are in¬
Benkert & Co., Inc., 70 Pine Street, Company and the large holding
terest rates on new capital lower,
New York' City, with particular companies with well established
but the large amount of refund¬
reference
to
the reorganization credit. In 1922, offerings exceeded
ing
of
outstanding
obligations
plan just approved by the U. S. $632,000,000. Though in 1920, the which has taken
place since 1933
District Court and the treatment new issues of public utility stocks
has placed many of the utility
to
but
$6,400,000; in
accorded to the holders of the old amounted
original analysis of the New-

An

'

would prices.

cut

Union

hostilities

ne\y

Study of N. Y., N. H. & H.

have been in the past

cut of 2%

a

words

also

Street,

OR3B

have

years

to

CRAIG LITTLE

S.

thousands

•

?

When

a

then social life!

and

business

April 27, 1944.

'

mills

cotton

years

dend

change, if not destroy, our way of

January nearly all of the

southern

on

Wisconsin

in

deal

better.

Last

directly

a

fair

a

the

stock; of the latter amount, $6.48
per

will

nition in/The hands-of the radical

tion has

which is

situation

this

offset

much less

sponding impairment of the credit
of many small utilities.
The se¬
curities of these small companies

392 E. Main

$4,868,282

to

revenues.

organized and unorganized?
Commercial & Financial Chronicle
Last summer there appeared in Do they not know that they are
the business press quite a number putting the best kind of ammu¬

value, or net worth
of the company as of Dec. 31,1943,
was

machinery

both

from

since

before.

for rate reductions.

will; be re¬
quired V of
them when the.

suffered

selves at the expense

By Gotten Mills

letters

decreasing

In addition, there
appears to be little or no demand

of

our

antagonize these people!
Does
management think the pension
schemes and etc. they vote them¬
holders

of

Not

started abroad in 1939 at the same
pace as

shareholders

which

under

laws

business, both large and small,
could operate. How foolish is man¬
agement to forget this fact and
,

Preferred Dividend Cut

en

lent to $17.26 per share of capital

been

pronounced in the com¬
ing post-war era than they ex¬
perienced in the last.
When World War I ended, the
public service corporations, as a
whole, were compelled to pay
substantially increased prices for
materials and wages, because of
the run-away inflationary policy
of the time. Their rates, in most
cases, were left unchanged during
the war, with the result that they

and fair system of

sense

and

conservative,

a

dividends,
treatment
at
stock¬
holder meetings and etc.
In our
section of the country this condi¬

book

ma¬

«•

thought they were not being giv¬

The

r e

very

the

condition.

practically
no
rate increases to compensate
for rising costs of labor and ma¬
terials, but residential rates have

placements
of; equipment

is

financial

fortified

only have there been

proper

make

from

reduced
$2,000,000 to $1,500,000.
Agreement v were

obtain

saved

business life!

with

pared

er

MILWAUKEE
Tel. Daly 3237

hampered by
i n a b i lity to

to

very,

could

SECURITIES

Nat'l Bank Building

First Wisconsin

kinds, with the exception of tran¬
sit companies will, almost without
exception, be in a sound and well

been

now
better
oiled
and
Forbes says
operates
there
are
more smoothly and with less de¬
15,000,000 .holders' of change o v e r
A. M. Sakoiski
common
and preferred stocks in to peace time
lay than in the earlier period. The
this country and other millions of conditions
comes
about.
More¬ state regulatory commissions have
holders
of
corporate,
national, over, unlike the period immedi¬ the advantages of more experi¬
state and city bonds to say nothing ately following the end of the last ence and better expert guidance
of
15,000,000 home owners and war, the utilities will not be con¬ than formerly,
;
\ ,
45,000,000 of savings bank deposi¬ fronted with the serious effects
As pointed out by William A.
tors.
What a power these people of inflationary
prices, and the
Prendergast, former chairman of
could be in support of our way of consequent need for higher rates
the Public Service Commission of

Chgo. Milw. & St. Paul

highest in the companys history
but, due primarily to higher wages
and the type of business booked,
earnings were approximately 13%
lower than in 1942, being $1.73

they

have

.

my

in

When

small but the terials, no rad¬
good will and support lost may ical changes in
loom large in future days.
Why methods or in
American
management
often operat ions
tively

such

interested in:

are

by

by Congress of the Pub¬
Utility Holding Company Act.
the
present war ends,
public utility companies ' of all
passage

lic

in¬

amount

the

and

forced

not

were

earnings

poor

called

and value- was the

tonnage

mills

The

..

in price

will drop

reach about a 7 % basis.

until they

aside- from earnings the sum of
$100 000'as a reserve for possible renegotiation of war contracts,
losses through contract termination^ aiid other contingencies and
after providing $352,525 for depreciation and amortization.
State
and Federal income and excess profits taxes payable are estimated
to
be
$2,025,000, and on that*
of

1943

am

of these

most

inac¬

tivity, and
though
in

will seek their level and I do not

these

activity, the Public Utility industries of

the country will be faced with fewer and less difficult problems of
reconversion after hostilities cease. The war has brought about only
minor

Naturally the union rejoiced at
the reduction in the 7%
rate

By A. M. SAKOLSKI

City College, New York

wages

times the amount

many

holders.

I

Weyenberg Shoe

I Old Line Life Insurance

Post-War Outlook For Utilities

ident of this mill were

nored;

Thursday, May 11, 1944

known,

was

the 1930-1933

financial

The result, as is well

the

culmination

in

period of a series of

reverses,

and

the final

most

cases

now

or

involved in

operation

projects,
case

of

certainly

of most other

Moreover they are in
free from the threats

of

direct competition or .serious
displacement by other services.
They may be expected therefore
to continue to be

in

favorably placed

bidding for capital funds. Dur-

Volume

THE COMMERCIAL & FINANCIAL CHRONICLE

Number 4280

159

ing the last quarter-century both
savings banks and insurance com¬
panies have increased substan¬
tially their investment holdings
of
public utility securities, and
there is

their

reason

no

to believe that

popularity

increasig

in¬

as

The

will not continue.

vestments

insurance
companies
alone in 1941 despite their heavy
life

large

lem of-Federal Versus
trol" is

not

However, the United States Su¬
Court in the case of East¬

preme

Ohio

ern

even

mitted

government

Life

.of

Insurance

Presidents, the public utility
holdings of life companies in the

Gas

Commission

Association

of

Co.

has

vs.

by

a

declared

constitute interstate

interstate

company

division

9.1% at the end of 1929.

up

commerce

on

the' selling
the ground that the

of the

inal ;

but

1931

if the current has been trans¬

by

service

fore "like the

with

in

Tax

utility to the public does not

investments

compared

Ohio

that the sales of electricity or gas

United States at the end of 1943
constituted 14.7%
of their total
,

con¬

Nor have
the full implications' of the Se¬
curities and Exchange Commis¬
sion's public utilities policies been,
as yet, disclosed.

obliga¬
tions, increased their public util¬
ity holding by approximately 14%.
According to the records of the
purchase

State

yet settled.

is

broken

into tiny streams and is there¬
breaking of an orig¬

package,

after

interstate
ties

commerce."

companies,

The

utili¬

that the services of

the other hand,
have been protected against state
on

pany can

lines.

of

restrictions, which might prevent
them from extending their ser¬
vices

into

other

states.

In

growth

and

between

authority
But

Electric

likely

to

Case

(273 U. S. 83) the
Court ruled that when
company transmits and sells

or gas to another
located in another state,
the transaction is one affecting in¬

and is there¬
subject to State interfer¬

growth

in

With

the

the

size

of

problems
ironed out in

be

to

40

representatives

Latin-American
were

the

Exchange

May 8, by

a

welcomed

group

from

countries,

are

20

who

by Emil Schram,

President, and escorted to the gal¬

lery overlooking the trading floor.
In

the

group

was

Pedro

Perez

tevideo Stock Exchange.

Attractive Situations
Panama Coca-Cola Bottling and

74

Trinity Place, New York City.

Coca-Cola

Bottling Co. of New
interesting. situations
according to circulars being dis¬
tributed by Hoit, Rose & Troster,

continuous

shipment'in1 plants, it is not to be

these

of

on

Marexiano, President of the Mon¬

commerce,

lines.

State

expected

visited

was

con¬

ties.

ence.
Thus, a state cannot control
company-to-company sales across

state

be

and

Exchange

The New York Stock

process

judicial decisions in
such a way as to benefit, in the
end, both the public and the utili¬

company

terstate

Visit N. Y. Stock

of

course

electric current

fore not

com¬

expansion,

Federal

may

arise.

Supreme

single

Accordingly, in the

flicts

the

a

be confined within state

well known Attleboro Steam and

one

1925

York

operating

expected

Copies of these circulars may be

offer

had from the firm on written

re¬

quest.

This per¬

centage increase is remarkable in
view „of the insurance companies'

abnormal; purchases of govern¬
ment obligations during the in¬
terval.

,

Perhaps the most serious im¬
pediment to utility expansion in
the post-war period, from the fi¬
nancial point of view, is the dif¬

ficulty

are
likely to en¬
engaging equity capital

they

counter in

through

public sale of common
Following World War I

shares.

it took several years for

fuel and
prices to return to pre¬
war levels, while labor costs never
declined.
It was only the lower¬
material

ing of Federal taxes that granted
the utilities any major reduction
in

In

deductions.

revenue

the

coming post-war period the same
pattern will probably be etched,
with
one
important
exception.
There is little likelihood that Fed¬
eral

of

When

taxes, which consumed 16.3%
utility operating rev¬

Country went to war it had
available for build¬
ing the weapons of war than all of the
enemy nations combined. r That's be¬
cause
its electric utility industry had
planned it that way, by increasing its
capacity to produce electric power long

electric

more

in

1943, will decline appre¬
ciably for five, and perhaps ten
enues

years. Accordingly, with net earn¬

available for

ings

dends

now

divi¬
despite an

common

at low level

expansion in gross oper¬
ating revenues, it appears unlikely
that investors will bid eagerly for
utility equities.
enormous

But
tor

before

important offsetting fac¬
high tax rates that may

an

to

the

assure

continued

the nature

tensification
the

of

means

lation

to

rather than
new
services.

use,

provision

This

:

in¬

an

as

of

more

business in

re¬

The
growing',use of mechanical de¬
vices in homes and workshops; as
well, as in factories, all require
and will

plant

use

upon us.

Right here on Long Island we had an
example of the results of such
planning. After war broke, almost over¬
night, there was a sudden cry for more
electric power — from the expanding
war
industries, by new factories that
were
being hurriedly built, and from
both the Army and Navy themselves.
Fortunately, all these demands were
met and there was still
adequate electric
power available for our regular house¬

homes, and other public conveni¬
and improvements material¬
ize, this alone will assure enor¬
mous expansions of their outputs.
Moreover, the new services will
in

descended

excellent

ences

more

yvar

of

success

public utility operations is the
ever increasing demands for their
services.
If all the predicted
post-war - construction
of
new

be

our

electric power

investment.

hold and commercial

the services from the

central stations afforded by exist-:

during the ten

ing ' public utility plants.
Thus,
although thfe electric energy pro¬

users.

All because

ductive capacity

duced

in

reached

1943

a

previously our pro¬
had been enlarged to
keep step with Long Island's phenom¬
enal growth.

of

total

220,776,000,000
kilowatt - hours,
representing an increase of 16.7%
over the
1942 record, the output

years

★

★

★

still represents not far above one-

Even now, we are looking ahead and
planning for the day when our plant
capacity and facilities must be increased

hhlf of the total rated capacity of

.

existing
plants.
Yet,
notwith¬
standing this reserve capacity, it
may be stated without much fear
of exaggeration that the new cap¬
ital requirements of utility com¬
panies operating in the United
States in the next decade will

quire

still further to meet the greater
peace¬
time needs for electric power which are

re¬

certain

investment of from five
to ten billions of new capital.
an

!

Much of this expansion in

capacity
addition

projects.
will

be

will
of

mean

new

But

a

plant
merely the

units to existing'
considerable part

demanded

for

the

con¬

struction of entirely new under¬
takings and the modernization of

existing ones. The public utility
industry, like other fields of hu¬
man

static.

cannot

endeavor,
It

must

advantage of

remain'

continuously take
inventions and

new

improvements, and in doing
this, the prime object under pri¬
vate enterprise is to give more
new

and better service to the

public at

lower costs. *
There

solved

are,

of course,

difficulties

and

some

un¬

"boulders'

ahead" for the utilities. The prob¬




to

come

when

the

war

ends;

getting ready for the time when
electricity will make even greater con¬
.

.

.

..

tributions
•

living.

to

the

comfort

of

our

daily

.y

Thursday, May 11, 1944

& FINANCIAL CHRONICLE

THE COMMERCIAL

1926

Boston Traders 25th

wmm

Spring Outing May 22

Affiliated
Fund, Inc.

•

7

ervations

TRUST '77

INVESTMENT CORPORATION

STATE STREET

be

addition

soft-ball

zA

prospectus

names

relating to any of these Funds

should

7 ;

golf, there will
other

order

entertain¬
and

door

have

to

in

appear

their

the

souvenir

those planning to attend

program,

be obtained frotn

may

with

dollars

souvenirs

In

prizes.

INCORPORATED

to

and

with

ment

JERSEY CITY * LOS ANGELES

five

are

golf; $3.50 without golf.

Lord, Abbett & Co.
CHICAGO ♦

Anniversary

Silver

Washington Street, Newton. Res-

In

.

its

Spring. Outing on Monday, May
22nd, at the Woodland Golf Club,:

.

MASSACHUSETTS INVESTORS

NEW YORK

Association

Traders

hold

will

SECOND FUND

MASSACHUSETTS INVESTORS
Prospectus upon request

ELORDABBETT GRO

MASS.—The Boston

BOSTON,
Securities

77:"

FUND

BOSTON

make

reservations

not

later than May 18th.

Funds

M

SANDERS & COMPANY

VANCE,

ill devonshire

investment companies as a group
results than the Dow-Jones Composite Stock
Average, a standard basis of measuring investment results.
Of the
63 leading funds with assets of over $1,000,000,000, 41 companies
showed better results last year than the Dow-Jones Composite Stock
Average.
(Of the 32 mutual funds included, 20 did better than the
average and eight others achieved £
For the fourth successive year,

of the Average.) rv
the companies which

Tucker &

stocks for the Average, whereas
the

investment

fairly

than 10%

ferreds.

close to it; only 16 more
under, whereas 10 funds
outdistanced the Average by bet¬
ter
than
50%.
These
figures,

25%

Thus, with

a more con¬

servative investment policy they

are

agement can outdo the average
of the detailed
performance of the market.
investment company
\
results prepared annually by Ar¬
Hugh W. Long & Co. devotes
thur Wiesenberger & Co., special¬
ists
in
these
securities,
also the current issue of the New
showed that for the five difficult York Letter to an analysis of the
portfolio changes in Manhattan.
war years—1939/1943, 38 of these
investment
companies
operated Bond Fund during the last five
which

successfully /than the Aver¬

more

Bond

Manhattan

ages/
This

superior performance is

especially
the

calendar years.

results

noteworthy
are

because
compared on a

its

to

issues

.7

,

In :

of

.*'■;■ :.

y 7:7

memorandum

a

fication will

ferred Stock.

the

concludes

sults/'

added results

Selective di¬

.

.

.

not

need

versification

.1/.;■://

many."

amazing testi¬
monial to experienced manage¬
ment.
From the dates they were

•

The result is an

RAILROAD
SHARES

;

memoran¬

dum. "With selection

solely

be

holdings

shown for each year.

High Quality Investments
issue of Abstracts
the form • of a letter to a
current

takes

produce average re¬

The

trustees

The letter simplifies

and makes understandable what

is

going on in some of the impor¬
tant court actions in the utility

field.
In the
obscurity of events

holding

company

past:the

very

in¬
handsome

in this field has caused many
vestors to overlook the

\ 7.7,7 7' 7;.;,/v profit possibilities existing there,
Any clarification of utility de¬

New

of

Pre¬

Union

distributing

dealer

England

velopments

should be appreciated

7 7 1
their 50th report to by investors generally.
jpurchased the average ; price of shareholders/show net assets of
Mutual Fund Literature
the
bonds added
has advanced the fund amounting to $2,878,131,
37%. On the same basis, the aver¬ equivalent to $12.37 per share for
Vance, Sanders & Co., formerly
age price of the issues eliminated the 232,624 shares outstanding on Massachusetts
Distributors — A
has advanced 11%
In every year, March
current issue of Brevits showing
31, 1944.
7
v,/7 '77;
from 1939 to 1943, the securities
j
'' $*•" ./• $ 1'
earnings retained by all corpora¬
added out-performed those elim¬
In a letter to affiliated dealers, tions during the last eight years.
inated by a substantial margin Distributors
Group
7 / Broad Street Sales Corp.—
reports
on
ranging from a net improvement first quarter sales of Group Se¬ A copy of Items covering Broad
of 13% in 1943 up to 38% in 1939.
curities, Inc., and shows compar¬ Street Investing Corp. and Na¬

in

Fund,

"Sun" And

&

Co.,

.

is

"Telegram"

New York low Sc.

in

/The

Mixter

,

^

Gets the Invest¬

Affiliated Fund 'Prospectus
A Low-Priced Participation

management staff, Commonwealth
Investment Company talks about
diversification. "Random diversi¬

a defensive measure, but may also
The performance rec-. be a means: of bringing to one
ords of both additions and elim-.
security the benefits accruing to

are

5.
6.

inated 30.
inations

7

the

should improve.

Over this period
Fund added 52
and elim¬

How $1,000

ing Potential of $1,800

7/

from

Dollar

with Leverage
4.

com¬

stocks of solvent railroads
undervalued."
7/ /7 ■ "7(7'■'

part

are

analysis

7

mon

expert man¬

demonstrated that

conviction that the

the

on

Averaging in, AffiliMcCormick,
/ ated Fund
:
■
chairman.
3.- An. Investment Company
2.

present investment in the railroad
industry is divided up 11.4% in
rail stocks and 13.3% in defaulted
rail bonds. "This action was based

companies usu¬

about

keep

Co.; Harry A. Gilman,.

Hammond, Paine, Webber, Jack¬
son & Curtis, are members of the
honorary
committee.
James
F.

fully invested basis of common

ally

E.
H.
Walter

Co.;

Estabrook & Co., and Edmond E.

of their
funds in cash, bonds and pre-

did not exceed the Average were

committee

Opper,
Inc.;

Co.; Francis P. Walsh, A. G. Walsh
& Son; Paul Scribner, Philip M.

ANGELES

West Seventh Street

210

Exchange Place

15

the

J.

Sons,

Philip
Kenney, Newton, Abbe & Co.r
Lloyd Waring, Kidder Peabody &
LOS

JERSEY CITY

CHICAGO

South LaSalle Street

xzo

&

Eagan, Hunnewell &

BOSTON

showed better operating

age points
Most of

street

of

Edward

are

Rollins

/;777:7-t;

Results Of Professional Management

performance within -five: percent¬

Members

7

;j|p.

Announcement

the

York

New

that

"on

costs

the

essary

made

was

"Sun"
of

account

'Sun'

by

May

on

9

increased

has found it

nec¬

to increase the price of the

five

to

cents

starting to¬
liaised from
3 cents a copy. The New York
"World Telegram" likewise made
known on May 9 that it had also
increased its price from 3 to 5
cents a copy. Both are afternoon
newspapers, and the 5 cent price
now
prevails
for
all
evening
papers: in
this
city,
both
the
paper

day". The price

"Post"

was

'"Journal-American"

and

having raised their price from 3
to

of

5 cents a year ago. The price
"PM"lhas always been 5 cents.

.

A Class of Group Securities,

Inc.

•

.

Prospectus

on

Request

DISTRIBUTORS

ative;

William A. Parker,

GROUP.

Incorporated

63 wall street—new

yore

Investors,

Incorporated

the

in

figures for the 68 open-end tional Investors Corp.

member funds of the National As¬

President of

Investment

of

sociation

of

Compa¬

.

.

.

Key¬

Current Data
folder for May on Keystone Cus¬
todian Funds.
Also a revision of

stone-

Corp.

—

A

Se¬
curities, Inc., in the first quarter the folder, "A Guide to: Common
fund increased from $47,157,479 at were $5,099,000 and net sales after Stock Investment."
Hugh W.
the beginning of 1944 to $49,600,- repurchases amounted to $3,889,- Long & Co.—A monthly portfolio
987 as of March 31.
folder on New York Stocks and
During this1 000. Gross sales represented 14.7%
period the net asset value per and net sales 21.1% of the total a new issue of the Railroad In¬
share
increased .from
Lord, Abbett
$19.75 to for the 68 open-end member funds vestor bulletin.
—A revised Composite Summary
$20.84.
during the period.
7 7 7;
7 7

Quarterly Report to Stockholders,
reveals that total net assets of the

nies.-

sales

Gross

Group

.

.

:

ments

Parker

letter Mr.

his

com¬

7-7.'1

the shift in the portfolio

on

' ; '

Incorporated Investors from
issue
about 8% invested in the railroad
basic
industry at the end of 1939 to al-*-

most 25% on March

DIVIDEND

Prospectus
from

dealers,

The

or

following

declared

The
ONE

NOTICE

ST., BOSTON

holders

on

of

record

business May. 5.

Management Associates, Boston, Mass,

the

of

as

of

close

'■:7

:

,

Agricultural Industry Series......,$
Alcohol

&

Industry Series
Industry Series.......
Aviation Industry Series...........

Bank Stock Series

7

Insurance

Securities Series

Stock

Metals Series

upon

National Securities &
Research Corporation
I'JO

BROADWAY,

NEW YORK,

ANGELES, 634 S. Spring St., (14)
BOSTON, 10 Post Office Square (9)

La Salle St.

.16

.20

—

,7

Utility Industry

Railroad

20
.19
,

Series

.

.

..

Railroad

.10
.15

Equip. Industry Series..,.
Industry Series.....-..:......

.15
.18

Tobacco Industry Series...........

.25

Steel

HUGH W. LONG & COMPANY
Incorporated

(4)




National Distributors
15

Exchange Place,

"class"

the

in

securities

listed

of

•

investing

of

logic

as

the

sponsored funds with figures as
of May 1. / 7 7 Selected Invest¬
ments Co.—A current issue of the

Seemed
Ltd.—A

folder,/ "These
Things
Important." ... Hare's

Keystone folder entitled "Earnings of In¬
method. * The relative risks of in¬
surance
Companies."
vesting in a class of securities as
against any individual security '■■-"/-•'7
Dividends
7-777
and the hit-and-miss aspect of in¬

sponsored

by

Bond Investment Trust

ica—A semi-dividend of $2.00 per
investor are emphasized. unit of beneficial
interest, payable
By following the Keystone method
June 1, 1944, to holders of record
and
investing
in the class • or
May 15.
':v
/ 7-77classes that most nearly fit his

needs, the investor gains the ad¬
vantage of ...the "indestructability
of the class."
The

7 _7J|.

Seml-Anhual

7 7

Report,

of

Jersey City 2, N. J.

Sharon

Railway

ures

With

on

completion of the refund¬

guaranteed stocks,

under¬

lying mortgage railroad b.opds,
$10,000,000 Affiliated
Fund
debentures, Lord, * Abbett reorganization -railroad .bonds,
has prepared and mailed- to -af¬ minority stocks, and guaranteed
ing., of

the

filiated

sales kit
kit

1.

dealers
on

contains

a

handsome

Affiliated Fund.
the

neW;
,

The-

following items:

Analysis of Affiliated Fund
Common Stocks

that

telegraph stocks, may be had upon
request from B. W. Pizzini

& Co.,

New

York

Inc.,, 55
ri+v

.

Broadway,

it

has

and

Exchange
April t

on

June

until

extended

the Public Utility Holding
Company Act of 1935. That rule,

der

says

the Commission, "'prescribes

uniform systems or classifications,

of accounts
which

for

utility companies

not otherwise required

are

Federal

under

conform to

State

or

law

classification of

a

In7 the

counts.

of

case

to,
ac¬

electric

utilities, the system prescribed is:
that

theretofore

adopted by the
Commission, and
in the case of gas utilities com¬
panies, that recommended by the
National Associatiop of Railroad
Federal

Power

and Utilities Commissioners." The
SEC further said:

;

"The Commission also promul¬

gated

certain

the: rule

instructions

designed

under

clarify the.
method of reporting such studies.
These

•

instructions

instructions

are

similar

to.

Power

Commission

of

date

the purpose

accounts,

to

previously issued by

Federal

under

The/current situations in Beech
Creek Railroad 4%. stock,

Securities

30, 1944, the date for completion
and
filing of the original cost
studies required by Rule U-27 un¬

the

Interesting Rails

V/2% stock, and Mont¬
veals! an increase in total net as¬ gomery-& Erie 3 ¥2% stock offer
sets from $506,147 to, $618,520 dur¬ interesting possibilities according
ing the six months ended March to brief discussions contained; in
31, 1944. As of April 22, the date the current issue of B. W. Pizzini
of the report, the combined asset & Co., Inc.'s "Quotations Railroad
value of the 10 Keystone funds Securities."
Copies of the "Quo¬
was approximately $78,500,000.
tations," which also contain fig¬
Keystone Custodian Fund S-l re¬

The

of Amer¬

average

Series...,v.l6

(5)

LOS

CHICAGO, 208 So.

Series............

Industry Series

Public

request

.00

Machinery Industry, Series.
Merchandising Series
Oil

Prospectuses

-

.10
.22
,11
.13
20

Series.........

Bonds

"7:-':,;7'

"

the Lord, Abbett-

'

.13

....V

Building Supply Industry Series,.
Business Equip. Industry Series...
Chemical Industry Series
Electrical Equip. Industry Series./.'■■
Food Industry Series.
Government

,

.14
.30
.12
.33

Dist.

Automobile

•

dividual security selection by the

distributions have been

the

Special Stock of the
Company, payable May 25,1944 to stock¬

PARKER CORPORATION
COURT

The

NEW YORK STOCKS, inc.

be obtained

may

authorized

31, 1944.

7

X

Keystone Corp., in the current
of Keynotes,
reviews the

of

folder covering

1

Commission announced

.

...

In

SEC Extends Date For

Filing Cost Studies

May 11, 1937, for
of its classification of

but

omits

the require¬

ments

for

certain

called

for

by the Federal Power

Commission

statistical

data

instruction."

N. Y. Stock

Exchange

Weekly Firm Changes
The New York Stock

has announced the

Exchange

following firm

changes:
•

of

Interest

the

late

James

Q.,

Newton in Boettcher & Co., Den¬
ver,,

Colo., ceased

1944...-.

as

of April 30,

;;

Richard H. Moeller retired from
Dartnership. in

-

Swinnerton

R.

Co.v/New York City, on
1944.

.

.

.

&

April 30,

THE COMMERCIAL & FINANCIAL CHRONICLE

Number 4280

Volume 159

rates

erators

(principally for battle¬
ships .and liberty boats) on a mass
production basis.
There has been

Electric Utilities
.'

By OWEN ELY

Y

and light business is one of the most "reg¬
dependable of all industries. Power generated has in¬
creased steadily for several decades, with the exception of depression
The electric power

ular"

and

'

years such as 1920, 1932-4 and 1938. Rates for residential electricity
:have declined with equal regularity except in the years 1918, 1925
"and 1932—the latter doubtless being, due to decreased use of current.

"Unfortunate-

Revenues

1947

nanced largely out of

increased

funds

'with

unfailing
regularity. —

net

and

plant

existing

depreciation

$1,130

$1,318

780

877

also'been

has

"stretched" by using excess capac¬

year

every

Residential and

earnings.' But the

ity not reflected in the* name-plate
ratings, by greater pooling of pri¬
shown an invate and public power resources,
crease, and
by "staggering" of factory loads,
etc. More remarkable, the indus¬
probably the
vrecord could
try has found itself able to get
be carried
alor\g with a smaller number of
-back to earemployees; many men who left to
•dier years.
join the services have not been
-And another
replaced. By adopting such econ¬
omies as bi-monthly billing, the
-regularly re¬
curring ' phepower companies have "tightened
,n o men o n
up" and in many cases operating
ft h r o ughout
expenses
have shown- compara¬
the past dec¬
tively
little
change
despite .a
ade has been
huge increase in power furnished.Owen Ely
/ the anti-utilA partial explanation, of course,
-ity campaign conducted in Wash¬ is that promotional and sales pro¬
ington, though this has taken new grams have been suspended for
forms from year t« year. YkY.-Y the
duration, and sale of house¬
>
Will this regularity continue in hold
equipment discontinued.
-the future as in the past?
The Much of the increased power had

Rural

,■■■..

______

Commercial-

__

Chairman
Federal

954

i6
12

Other

Y:

587

236

____

39

193

v

18

since 1926 has

1

.political pendulum is swinging to
the right, and regulatory pres¬
sure
against the utilities is per;haps beginning to ease slightly.

^-Post-war
! may lead to

power
readjustments
a temporary but mod¬
in revenues.
Such

decline

erate

iheavy tax burdens have been laid
-on the industry that some
relief
".in the post-war period i» antici-

been delivered in

In

were

sold

to

were

of

that

Olds'

about 227 billions

mean

idea

to by

the

that

was

of

its

taxes.

reduced
The

should
*

costs

-

and
of

confidence

lower

.

inves¬

industry

the

So

horse.

residential

rates

practically

every

far

There

of

has

deferred

course

been

Operating

but

work,
alarming extent.

Gas

Operations

.

Y

The worst danger which the in¬

fore

■power, or

and

tial

efficient small residen¬

commercial power

gen¬

rendering obsolete the
present facilities of transmitting
•electricity. The development of
small power units will probably
;not be feasible until our labora¬
tories solve the problem of atomic
disintegration. Many decades may
-be required to complete this re¬
search, just as it took centuries to
•develop our present system of
generating electric power.
erators,

the industry
has given a splendid account of
"itself, earning the praise of hardboiled government officials for its
ability to handle peak demands of
defense plants without rationing
regular consumers, and despite a
^shortage of hydro-electric power
During: the

-in

the

war

second

half of

1943.

Pre¬

discussion of the need for a

super-imposed
north

the

war

grid"

"power

in

east, and demands for

-huge new power projects such as
.St.
Lawrence,
Passamoquoddy,
iand the "seven little TVAs". have
faded out of the picture—as have
.

dire predictions of
shortage. Even the fore¬
cast of the Brookings Institution as
: to
the needs for greater plant ca¬
pacity have proven far wide of
Washington's

;a power

.

.the mark.

•/-

In 1934

production totalled only
.90 billion kwh; it is now around
.210 billion; an increase of 133%.

*•

Yet

during that time

the indus-

comparatively lit¬
capital—total value of

,.try has raised
tle

new

electric
carried at

utility

plants

was

$11,071,391,835 in 1941,

compared with $12,124,807,000 in
1932.
The war-time increase in

.generating capacity has been fi¬




Kellogg of the Edison
has pointed
out, each

~

the

was

since

1937 the

revenue

16c

to

tax

dollar

23c,

further gain

in

as

same

has

1937-8.

35,598,692
48,757,609
254,086 $183,236,912

™___.

40,445,548
691,826 $167,393,136

$ 77,581,302

__^„™

$ 66,091,728

15,038.850

i

™__

12,553,560

13,219,404

13,855,773 /

Depreciation and Retirement Expenses

$106,475,925
Federal

Excess

Profits

$ 91,864,692

14,818,222

$ 14,155,548

$

Income-Taxes—™-—L—

Federal

......

'1

Taxes__™_

Y—_——

•

■

______—

Total

■
.

Y/.Y/y;

Taxes

-Y--.

J.—

—;

$

—

19,195,826

•

.J

Income

Other

Deductions:

Revenue

——

V

>

"

.

'

<

.

.

,k

•

•

134,400,953

'

'

.

11,061

837

11,472

last year

was

Other

Total

the war—net income

on

stockholders

Total

4,762

"."•■;

262,103

compared with a deficit

$123,000,000 in 1938.; The 1942
earnings of $904,000,000 were
larger than in 1929, and probably
established an all-time high. In¬

58,905

$ 33,465,580

$ 33,051,088

Income—1™_—
.™_i

Income

Gross

:■;:

5,599

22,533

$

Deductions

Revenue

Other

$874,000,000

of

I

Deductions:

•'

Income

'

Deductions:

Interest

,

.

8.354,404

Long-Term Debt™
_______—
Discount and Miscellaneous Deductions.

on

;

Y'

Y

818 342

companies did not fare
well, but nevertheless did
considerably better than in the
so

from

tax

load.

•
•

years.

;;Dividends paid to the public:
i ,
Y
* Public Service Electric and Gas Company:
Tic Cumulative Preferred Stock
Common

in

$710,000,000
over

increase

1943.
has

The

alone exceeds the amount
common

which

commercial

gains

residential
can

decline in the industrial

offset.the
war load;

write-offs, increased depreciation
reserves,
profit-sharing plan s;
etc.; (4) the trend of operating
expenses, which may increase due
deferred

maintenance

of

$ 19,364,505

AND

of Public Service-Corporation

103,308

/ v Y.
Rents, Office Expenses, etc.———_____—_

Expenses of Public Service

Y

Salaries,

.s

56,391
$ 19,420,896

of New Jersey—

Corporation of New Jersey:

$

$

428,569

310,667
1,200

1,200
$

•

...

1

Federal

Income

Federal

•

Excess

Y.\Y-

311,867

1,029,840

$

1,066,023

$

1,308,541

—;

.

™„Y™™_———

Total Taxes

\

$

$

Taxes
Profits Taxes

429,769

"242,518

~134,20O
$

1,164,040

Total Expenses of Public Service Corporation of New

Y; YY\:

1,593,809

YV-YY

Other

{

Deductions

•sYY '"Y'Y

Income

from

Consolidated

Net

Income

of

,

Public

after

Service

deduction

Dividends

on

Stocks

Preferred

of

Public

Service

$ 17,800,488

1,250,588

1,253,009

Jersey—

Corporation _of
of

dividends

capital stocks of subsidiary company held by the

;

1,620,408

$ 17,158,428

;

on

$ 15,908,040

public-

Corporation

of

$

16,547,479

$

6,696,543

9,850,936

9,850,936
$

6,057,104

and the

re-employing men
now
in the service; (5) possible
further savings from refunding of
bonds and preferred stocks—a job
now only about two-thirds com¬
pleted; and (6) new engineering
economies
resulting from war¬
time experience in building gennecessity

1,501,128

15

$ 18,648,929

and

(3) the trend of rates, affected by
such regulatory factors as plant

to

Income

Miscellaneous

'

i

Regarding the post-war outlook,
the trend of net earnings will de¬
pend on the. following factors, in
the order of importance indicated:
(1) possible lifting, of excess prof¬
its taxes, and later a reduction in
the normal-and-surtax rate;
(2)
the trend of gross revenues, which
in turn is dependent on the ex¬
to

Service

.

$ 18,752,237

Y'/Y

'

tent

Public

paid in

dividends.

1,113
1,500,000

1,501.128

15

COMPANIES CONSOLIDATED—

SUBSIDIARY

to

$300,000,000—which amount

by

owned

CORPORATION OF NEW JERSEY

PUBLIC SERVICE

war¬

amounted

■

Corporation of New Jersey

000,000 in 1940 and an estimated
time

securities

to.

applicable

Balance

$308,000,000 in 1937 to $404,-

Stock

$

1,113

1,500,000

Stock™™,—;
(directors'.shares)——

Cumulative Preferred

$5.

increased

Taxes

$ 20,865,633.

$ 20,150,057

Obvi¬
ously, the utilities are bearing a
disproportionate part of the war¬
pre-war

i'

12,185,455.

"

-

immediate

'

3,100^000

13,315,523

4,100,000

Appropriations for Amortization of Capital—

'

8.267.113

$

861,119

Amortization of Debt

dustrial

time

32,992,183

64,504

$

284,636

.

"cash in"

quite

•

$

$ 33,203,477

$

and there will be a
this year as a result
excess profits tax

X

—__—_——

But
Operating

$ 42,536,261

43,557,510

150,033,435

Total Operating Revenue Deductions—

portion of the
jumped from

;

9,184,887**

8,696,028*
20,043,260

The railroads have been able to

for

$ 92,151,679
34,104,083

Deductions:

of .the increased
rate.

1942

1943

Yj- $ 98,626.525

..

Operating Expenses™

to net income be¬
(see table, page 1502,

taxes

"Chronicle"). The 40%
1942-3; slightly
lower
than in the preceding three years,

dustry might face in the future is

/some revolutionary discovery
'such as wireless transmission of

use

the general
activity.
As

(Continued on page 1929)

';V.Y

Transportation Operations™;

Operations

;Operating Revenue

in

decade-because of

Institute

concerned,
utility in the

stu

Street

13

in the past

do

President

are

/ -./

Operations-

Ferry

-

,

revenues

gross

ratio

regulatory reforms and the sharp¬
ly mounting tax burden.
/.
:,

business

of

level

as

with

Revenues:

Electric

.

April

unable to

closely

Subsidiary Companies

COMPANIES—

SUBSIDIARY

Despite the vast increase in out¬
put and revenues, net earnings
last year were lower than in the
years
1939-41 and only slightly

recovery;

ers—which it has been

Such

tion-wide industrial use.

varies

very

greatly stimulate na¬

For the Year Ended December 31,

some

maintenance

not to any

securities

particularly if the industry is able
to
pass
along some benefits of
continued growth to its stockhold¬

sharp cut

a

rates—already

industrial

low-^-would

readjusting rates downward.

before

cart

whether

much additional

further

a

in

factories

draw

may

section to another, but it

one

doubtful

Comparative Statement of Combined Results of Operations

for distributing facilities.

expense

and light

show

is

in the power industry
feel that Mr. Olds was putting the

a

and

Engineering progress has higher than in 1942. The reason,benefited by the war effort.
The of course, is taxes. The industry
•industry will continue to pass for the past 18 years has been
along to its customers the bene- able to carry down about 40% of

tors in power

dustry/ and
from

the power if it wanted

ipated.

r

as

Leaders

decrease of
why revenues
will decline only 4% is that the
power load used by war .'{Indus¬
tries is sold
at
extremely low

only 140 billions,
25%. The reason

Power

could sell

Carpenter
1947 sales will be

consumers.

estimates

the

of

Olds

gen¬

apartment houses, office build¬
ings, etc.; and (2) greater use of
electrical
gadgets of all kinds.

contrasted with the Carpenter es¬
timate of only 140 billions.
Mr.

of

billions

186

ultimate

would

4

,

221 billions
generated,

some

kilowatts
which

$2,975

$3,100

______

1943,

huge blocks and

has not required

Total

Leland

But in

Commission, at a Both of these increases have been
symposium checked by priorities, and it will
held by the American Institute' of take a year or so after the war
Electrical
Engineers,
suggested to restore the normal trend of in¬
that the industry should produce creasing usage.
200-220
billions
So far as industrial power is
gross
kwh in
the
first
post-war
year
(only concerned, the cost of electricity
slightly lower than last year). is not a very important factor ex¬
Moreover, he estimates that the cept in the production of alu¬
maximum output would reach 270 minum, chemicals, etc.
Over a
billions in the fifth post-war year. period of time, declining power
Converting this into net sales costs are doubtless helpful to in¬

Decrease

Industrial

the

sliding scale,

a

average kwh cost as

increased.

recent post-war power

Y

;

the drop in other

as

usage.

Increase

1943

in

well

as

is

eral, such increased usage de¬
pends on two developments, (1)
the
building
of
more
homes,

industrial

billions

52.5

load,

Percentage
Change

in Millions

•

ly, taxes have

of

Mr. W.

Carpenter,

•

also

lowering the
usage

Economist of the
Edison Electric Institute, has es¬
timated that utility revenues in
1947 will compare as follows with
1943 (1947 being selected as a pos¬
sible
post-war depression year,
following a temporary boom):

,

country provides

ipated

a

post-war trend of output.
M.

compared with residen¬
The 12.7 billion antic¬
gain in residential and
commercial
kilowatts
is
nearly
large enough to offset the decline
as

tial power.

great deaLof
recently
about
the

discussion

1927

yrY Dividends, on Common Stock of .Public Service Corporation of. New
'■"

Y

t

P.

Balance

transferred

to

$966,226; consisting of debt
-'

**Federal

$1,020,543,

Excess

Profits

consisting of

retirement credits of $637,600,
Taxes

debt

for

1942

amounted

retirement credits of

to

This amount*

and post-war refunds

$10,205,430.

$863,682,

This

5,228,033

5,503,193
S

Consolidated Surplus—

* ♦Federal Excess Profits Taxes for 1943 amounted to $9,662.2?4.

;

■'f

'

553,911

8

1.468.510

has' been reduced by credits amounting- to

of $328,626.

amount has been reduced by credits amounting, to

and post-war refunds

of $156,861.

THE COMMERCIAL & FINANCIAL CHRONICLE

1928

Canadian-American
Non-Callable Bonds
Province of

4%s, 1 May 1961

unit of

which this
to

say:
:
In response to a

tended

By BRUCE

WILLIAMS

■

continues to shift northwestward
as predicted many years ago.
There is of course a logical reason for
this apparent phenomenon. In the days of the early sailing ship the
comparatively small land-locked Mediterranean was the natural cen¬
ter.
With the development of the New World and the advent of the
steamship, the strategic position of the British Isles at the focal
point of the world's steamship®
*
:
■
routes assisted Britain to achieve
world commercial supremacy.

received

from

and

Vien

Messrs.

the

deep attachment to
of Canadianfriendship.

CANADIAN BONDS

country
the air

"I wish you

GOVERNMENT

:

-

Dominion in¬
its
borders
the

within

which

PROVINCIAL

wage

of the fact that during

Because

in

means

•

CORPORATION

have

quality all their
"I think
be

official British attitude to¬
wards
establishment
of branch

will

pay

not decline in

proportion to

ings. The reduction
sible

elimination

chases

and

the

taxes

come

after

the

and

of

earn¬

even

pos¬

bond

reduction

pur¬

in

in¬

which must be made
of

end

-

the

will

war

bring
the
take-home pay
and
earnings into closer relationship.

said

it

Americans

we

a

face

plants
in; Canada
changing. />■;,'

CANADIAN STOCKS

steadily

is

•;/. >;/'

.

previously the policy
was opposed to industrial compe¬
tition from the Dominions, a more
far-sighted
view
now
prevails
Whereas

many cases

especially

in the dominions
in Canada. Also
Dominions'

of

conference

effectively

more

in
v

•

the

.

V

.

;

prime

:

NEW YORK

of

British

N. Y.

5,

NY-M045

RECTOR 2-723T

.

esting to note that the City of
Edmonton, which will shortly
enter, this market with a $9,-

taken within the Dominion in co¬

operation with Canada are now
fully
justifying"; themselves- in

150,000

spite of hasty hind-sight criticisms
from many quarters.
The Canol

far exceeded origi¬
expectations. Under-Secretary

the North.

this

in announcing a
recently-concluded
new
agree¬
ment whereby this country will
purchase oil from this source at
cheaper rates, expressed his ap¬
preciation of "the spirit of co¬
operation shown by the Govern¬
ment of Canada and Imperial Oil,

city

site

of War Patterson,

for

the

ualize
the

a

frontier and the great Cana¬
dian
North
West
is
now
com¬
new

to

reveal its

enormous

riches.
In this connection it is inter-

metropolis

Empire,"

in
at

and

the

the
re¬

as

ultimately

leading city in Canada. Al¬
its

$10,000,000 airport

world

and

the

vast

communication
future

natural

berta

highest

unlocked

ter¬

finest

"the

possesses

Edmonton

ready

and

of

North

lands

Joint

Decline

Production

link

Effect

ization of this prediction.

the

of

Growing

the

past

Federal

Lintner

still

very

feature
dian

conditions were
and the notable

the strength of Cana¬
Nationals which confirmed
was

Ration,

Division

—

of

Research,

ago.

Firmness

&

Company

64 WALL STREET, NEW YORK 5

Latin

:

America

Credit,

—

also

in

the

but

activity
by lack of

stricted
ternal

Eco¬

issues

were

still

♦

Provincial




Municipal

♦

Corporate

many

which

will

still

in

the

internal

orders

appears

of

in¬

on

a

of

degree

commitments
that

markets

are

all

to

invest¬

now

strong technical position.

in

a

It

is

possible that the invasion influ¬
have

counted

now

and

decidedly

been fully

any

can

dis¬

favorable de¬

readily create

bullisji atmosphere.-

a

war

and

as

other

decline.

It is

expected, therefore, that
without any change in the rate
of pay in specific companies there
will be a decrease in the earnings
of many

of

ployers, enough has been said al¬
ready about the wage problem of
the individual employees to indi¬
cate

that

under

the

some

employers

will be
least

to

pressure

at

maintain wage rates if not

to in¬
such

crease

them

effects

as

not

multiplied. Possibly there

be

will

in

order

that

reduction in hours will
be

even

demands

for

creases* in rates to offset

the reduction

in

It should be

in¬
of

some

earnings caused

by shorter hours worked.
.

-V:^'j;

pointed out to

em¬

ployees as well as to employers,
however, that while earnings are
the result of rates per hour

mul¬

;U

tiplied

by
hours
worked,
for
example, it must not be assumed

V;

that

a'i

the

the

hours

hours

of

worked

would

be

-

its

on

merit, to

own

.;
•T

be

that

an

cause

a

'■
i

increase in rate will
decrease Jin employ¬
actual decrease in

sure

not

(

/"J'

generalization can
made, but each case should be

studied

■.

ji

No

constant.
be

and

ment

:A'f

an

earnings.';/"'''':-'.;'''

ings of employees.

Much of this
For
example the elimination of over¬
time payment
for workers will
is

determined by labor cost.

most

and

perhaps

the

operating to
individuals
may be described as the deflation
of the job classifications assigned
to many individuals.
It must be
admitted that, in the stress of ob¬
taining employees during the war
emergency, many employers have
assigned relatively high job clas¬
sifications to poorly trained em¬
painful

factor

reduce the earnings of

»

ployees.

For example, many

of training been
neyman
even

in¬

Whether

will

are

total

depend not only

duction

of labor

cost

or

not

the

on

but

a

few hours

='

of

costs

decreased

re¬

upon

a

careful

analysis of what happens
overhead
expense.
In many
companies and especially those

to

with
be

high overhead costs it

discovered

that

the

may

reduction

in

labor cost per unit arising out
of the elimination of penalty pay¬
ment for hours worked in

excess

of eight per day or forty per week
will be more than offset by in¬

cost^ of overhead result¬

ing from the smaller volume of
production
can

on

which

such

costs

be distributed.

The possibility of any employer
increasing or even maintaining
his

present

labor

titude

will
of

rate

of

depend
factors.

payment for
upon

Of

a

mul-

major

im-

portance will be the condition of
his

plant and equipment

as

a

re¬

sult of wartime
tent to which

operation, the ex¬
improved processes,

methods, and materials have de¬
classified as jour¬ veloped during the war period
electricians, machinists, and will affect his post-war oper¬
The employer must also
tool makers. In spite of ations.

dividuals have after

and

facture.

production

creased

individuals.

fourth

The
.

caution

munitions

These

be

to

bonds

that the

for

industries.

instruments of

to

Turning to possible future de¬
period

the increase in
has
been

shifts will have to be reversed

•

velopments, it

earnings

A

higher-paid

de¬

exchange

angle.

in earnings with¬

than 25%

any

re¬

such

improved

foreign

earnings

brought about by the shifting of
employment from lower-paid to

stumbling block

a

investment

velopment

Ka

of

V

factor

substantial part of

discount.-At present levels
this section of the market is still

ences

♦

earnings

In¬

supply.
in

readjustment

iorated and possibly facilitated by

that

of individuals will be the ensuing

short-term

was

"free"' market

lightening

CANADIAN SECURITIES

the

shift in industrial employment.

9%%

such

the

wartime

persisted

issues

the

change in the rate per
decrease the labor cost per unit
hour or per unit of output.
of output but it may or may not
The third major factor which
decrease the total cost of manu¬
will tend to reduce the earnings

nomic and Exchange Conditions-

ment

Government

out

Foreign Banking Department, The
Chicago-

which has been exercised

%'

'

more

:

vasion fears has resulted in the

/.

in

55 or more hours 'per
will receive a reduction of

week

First National Bank of

prolonged

WHitehall 3-1874

^reduction

paid; for

School of Business Ad¬

Paper—50 cents.

addition

Each employer must carefully 'V/f
expect that industry will in gen¬
eral return to a 40-hour week.: study the relationship which may
prevail in his company and in¬
Thus, employees accustomed to
dustry in the relation between
working 50 or more hours per
week
and
accustomed to being wage rate, employment, and earn¬

on

the

Taylor, Deale

.

reduce

early replacement of
July 5's of 1969 when mentioned
months

the

second

The

mand that the Canadian dollar in

several

a

ily income.

the wisdom of proceeding

with the
the called

the

individuals and may reduce fam¬

ministration, Harvard University,
Soldiers Field, Boston 63, Mass.—

to

/

eliminate

Aircraft

attractive, but

,

Ma¬

Taxes

In

individuals will be at least amel¬

employment
employed per family
over a period of time can be held
as older persons retire again, and
constant
while
rates
change.
housewives return to their homes,
Many times during peace the ex¬
and as many of the young persons
periment was made to increase
return to school.
These adjust-,
rates of pay with the expectation
ments
will
tend
to
reduce
or

to the market for

week,
quiet

In

in

change

of

number

paper.

With regard

this

expect

may

Enterprises

Lockheed

Graduate

is

*.

Reserve

activities.

other

to
to

may

identity of th^< wage-earners, wet

(Study No.
Corpora¬
tion)—J. Keith Butters and John

1:

Al¬
can

in

market

labor

of the indi¬
The—E. W. Axe & Co., Inc., 730
vidual and also of the family unit
Fifth Avenue, New York City—
is the reduced hours of employ¬
paper.
/••'/
!
ment,". '' It
seems
reasonable
to

development of

resources

the

is

hardly fail to prevent the real¬

The tremendous Shipshaw

Alaskan Highway has

the

quires little imagination to vis¬

a

hydro - electric
development
in
Quebec now supplies the power
for the largest aluminum plant in
the world.
Last but not least, the

is

present rate of expansion it

...V

of

issue,

f

fice, 3480 University St., Montreal,
Que., Canada (U. S. Distributor:
International Labour Office, 734
Jackson Place, Washington, D. C.)
—paper—$1.25.

It has been said that

a

British

The Steep Rock Iron enterprise
will commence
next
August to
ore

bond

minal of the Alaskan Highway
and is literally the gateway to

oil project has

iron

the

addition

chinery—International Labour Of¬

Meanwhile, many of the vast
projects which we have under¬

.

employed return and seek em¬
ployment, those who are normally

Man's Bookshelf

TWO WALL STREET

be

population and within each fam¬
ily with respect to wage-earners:
as those who should
normally be

•"../

The Business

■'

INCORPORATED

and

problem

with

withdraw

now

thought to the vital
Empire immigration.

share for the future."

A. E. AMES & CO.

taking place
in
London has devoted considerable
ministers

ahead

tasks

outside

and industries

British skills

operate

we

immense

normally

not

employed, including retired
persons, children, housewives and
physically handicapped persons.
In
addition,
many
individuals
have
been
employed on more
than one job.
As a result, we
must
expect after the war an
enormous
shift in the working
so

fairly

can

would

persons

many

wage-earners

who

own.

that

also

that

developed

it has been necessary for

war

■

as

greater confidence because of the
practical lessons of the past, the
strongly rooted cooperation of the
present and the concrete ideals

mencing

over-employment.

who would normally be savings during the war
period and
and because of the by unemployment insurance bene¬
required for fits.
V V;V-' _■
*/', ?vv.:;X'v
the war, industry has employed
As for the wage problem of em¬

a

the

deliver

ent situation of

This adjustment will be especially
difficult to make because it in¬

persons

much that Canadian-Amer¬

relations

ican

of

the

Ltd."

under-employment or even fullemployment in place of the pres¬

increased production

neighborliness has en¬
among Americans.
It

gendered

MUNICIPAL

the

Canadians

and

century and more

a

successful

suitable for mod¬

largest

Canada

for

tion

of undeveloped

variety

industry,

grade.

one

earner.

would tell them of
regard and affec¬

instinctive

the

the

addition to the
potential supply
of hydro-electric power. It is not
surprising, therefore, that recent
reports from London indicate that

nal

■

f

.

wage-earners

is Canada.'

world's

can

than

more

normal
includes

spoke to them at the chancery.

the

that

materials

that

little

a

great tradition

American

in

even

times the average family

their

of

that

recognized

Glen of the Canadian Parliament,

and

be

the armed forces to remove many

realized

greatest
raw

letter of March 23 of the visit you

in

not

their kind words of me, both when
I was in Ottawa apd when you

Furthermore

ern

the United States would
possible if most families
were
supported on the earnings
of one wage earner.
It must be
ing

change and it is gener¬

mental

cludes

August, the President wrote:
"My Dear Mr, Ambassador: I
am glad that you told me in your

some
appropriate
time,
would you please thank them for

nearest to the center of
map

and

Ambassador

:,■? "At

aviation
bring about another funda¬

ally

the

it is clear that

Now

will

to

.

average

quoting their references to Mr.
Roosevelt's visit to
Canada in

of world commerce

hub

The

by

leaders

'U

volves
psychological factors as
earnings of individuals well as economic ones.
although our society is still organ¬
To offset these factors operat¬
ized on a family basis.
Expen¬ ing ta decrease the
earnings of
ditures are largely controlled by
individuals, it should be pointed
family rather than individual de¬ out that there is
every reason to
cision.
The high standard of liv¬
expect that take-home

report from Mr.
courtesies ex¬
Canadian Parliament

Atherton describing

Canadian Securities

"•

is

the problem of
wages as it affects the individual,
it must be realized that practi¬
cally all available data are in¬
sufficient in that they refer to

20, in
reported, went on

was

output.
examining

In

countries."

two

our

ar¬

ideals

the

Advices from Ottawa April

New York 5

Toronto and Montreal

Direct Private Wires to

they do

as

link

which

Incorporated
14 Wall Street,

of President Roosevelt,

importance in the post¬

>

of
training have been improved and
in spite of the fact that some of :if
techniques

period.
This meaning of these employees have had these
wages is * best defined as "unit high job
classifications and the
labor cost" or the amount of ex¬ corresponding rates of pay, it must
penditure for wages and salaries be admitted that these individuals
required .for the production per will not be classified when there

April 20 by Speaker J. Allison
Glen, who declared that Canada

ances

...U

the

war

"affirms and endorses these utter¬

ticulating

period, but should and will

war

become of

on

Wood, Gundy & Co.

been

not

message

the House of Commons at Ottawa

yielding 3.12%

Wage Policies

(Continued from page 1914)
emphasized during the the fact that
>,

from
President
Roosevelt
stressing
CanadianAmerican friendship was read to

Quebec

Price 114.75 and interest,

Post-War

Friendship Praised
A

Thursday, May 11, 1944

>

A

Volume 159

has

established

now

dend

Wage and Hour,

.realize, that the
Act

THE COMMERCIAL & FINANCIAL CHRONICLE

Number 4280

imum of 40c per hour

min¬

a

1929

payments

dropped 8.4%

fully reached the Supreme Court
for
final
determination, most
holding companies have become

as

compared with the last quarter of
1942.

for all work

Common

dividends

for the

'

affecting ' vinter-state

year

commerce.
Consideration must also be given

!

Electric Utilities

to the question as to whether the

supervision1
(Continued from page 1927)
given plant has increased or
point
in
the Federal
Reserve velop a growth of combined resi¬
decreased during the war. Serious
Board index of
industrial pro¬ dential and commercial sales 50%
attention must be given to re¬
duction since 1935 has represented greater than during the last 4 pre¬
fresher courses at least if not com¬
about 500 million kwh of indus¬ war years, this annual gain would
plete
retraining
for
returning trial power.
represent but one-tenth of the
•veterans.' '•
-v
iV'j
Of the total 117 billion kwh in¬ electric energy which the cessa¬
Employees and employers must dustrial
power sold in 1943, only tion of hostilities would release.
also face the fact that it will not
about 39" billion was for civilian Even the most optimistic outlook
be
possible to
reduce salaries use—the
remaining two-thirds re¬ as to post-war residential and
in

a

•

•

ahead of

in

or

of reduction

excess

flected

activities.

"If," said
in wages. During .the war period
Mr. Kellogg, "we should be able
the
tendency has been for in¬
during the post-war period to dein

creases

increases

salaries

in

lag behind

to

Neither the

wages.

Propose Simplifying

repetition of

a

the pattern

developed during the
depression of the 30's when sal4
aries

Corporation Tax Laws

before

reduced

Following its procedure with
wages and to a greater extent,
respect to simplifying individual
i
All discussion of wages must income taxes, the House Wjays
were

also

take

cost

often

of

into

the

consideration

and

on

April 28 that it would try to
same with corporation' tax

do the

laws.

,,

.

"That'§ the next big thing

we

ought to get to." said the chair¬

purchasing

Representative
Doughton,
according to Associated Press ad¬

power on
Consideration should

other.

the

Means Committee announced

and

living or the purchasing
power of earnings.
One can only
guess as to the actual price level
prevailing after the war and its
effect on wage rates on the one
hand

commercial
make

a

what

we

thus

would

sales

relatively small

dent in

will have to sell."

There thus appears to be a

employees not the employers can,

therefore, expect

war

man,

wide
gulf between the post-war trend
as
foreseen
by leaders in the
power and light industry, and the
potential goal which the FPC says
they should aim at. In this con¬
nection, • it may be pointed out
that

Mr.

Olds'

earlier

statistical

accurate.
Several
ago he urged the need of a
proven

years

residential

demands.

bi-partisan incentive that brought
speedy action on the individual

lower

reconciled

that

year the
received

stockholder

about 14 cents out of each

dollar

revenue, whereas in 1943 he
received only 9% cents. Moreover,

the stockholder had to pay much

bigger
dends;
able

taxes

the

to

the

on

net

keep

was

divi¬

1943

he

amount

sale of

srh^ll and isolated proper¬
individuals, the writing off
plant values and the
simplifaction of capital structures
—all have proceeded during the
past year at a somewhat faster
tempo despite the war and the
manpower
shortage.
The
SEC
program may prove beneficial on
an
overall basis in the end; but
it is forcing such revolutionary
changes in accounting and finan¬
cial methods that there is danger
that-engineering progress will be
of

than indicated by the comparison.
J- It is easy for Washington of¬
ficials

to

tell

the

industry

What

it should do and to threaten that
the government will "take over"
if it doesn't make

good, but bet¬
results could be obtained by
exploring what is really happen¬
ing to the industry under present
conditions, and finding ways and
means to lighten the
crushing tax

ter

burden

and

modest
tive

restore

at

leasts

as

regulation,
refused

advantages

a

relief from

much

program should

company

government

"call

it

the

appears
can

courts

get
un¬

der present conditions, the whole

holding

the

to

Since

down.

unlikely that the industry

initiative.

In the field of

excess

slowed

a

working of the profit mo¬
a
stimulus to efficiency

sales

streamlining

ties to

was

smaller

even

the

to

provided by SEC orders
and
findings.
The
process
of
breaking Up big. systems into
smaller ones/wapping properties
between systems so as to improve
the geographical integration, the
process

has

much

be speeded up as

possible so that the in¬
dustry's best efforts can in future

truce"

be

as

devoted

to

engineering prog¬
development of new
markets, as its contribution to the
nation's post-war prosperity.
and the

ress

bedrooms and bathrooms. But this

returns.

In

addition, the pur¬
of
wages
will
public policy which will
probably approve in peace-time
not
only the maintenance of a
high standard of living but also
adjustments towards a still higher
one.
It must not be thought, how-i
ever, that high wages alone can
cause a high standard of living—j.
in the final analysis the standard
of living is determined by the
volume of goods and services pro¬
chasing

power k

affect

duced.

.!

.

Since
wages

a

was

;

policy

>V"

-

Experts estimate that this

■,

year

approximately

500,000
corpora¬
$15,000,000,000 in
income and" excess profits taxes.
The 50,000,000 individual income
will

tions

pay

will

taxpayers

contribute

about

$18,000,000,000, and other sources
are
expected to bring the total
1944

Federal

to

revenue

about

Knutson

Mr.

on

pointed

out that,

largely due to the intricacy of the
statutes/ many corporations em¬
ploy large staffs of experts to pre¬

slow to develop dur¬

those

wage and salary differen¬
tials which have developed since

be

desired

should
need

be

provisions

settlement of

for

speedy

that

controls

all

removed at

once.

understanding

of

be

an

Tax

Simplification
Up Rates: McLean

We

wage

.problems by both employers and
employees as well as by the pub¬
The bill designed to .simplify
lic and by the government. The
the individaul income tax laws is
goal for wage policy which should
be desired by organized and unor¬ regarded by Representative Mc¬
ganized employees as well as em¬ Lean (Rep., N. J.) as the vehicle
for a "very substantial" boost in
ployers,
government,
and
the
taxes.
Associated Press advices
public may be best described as
flexible enough to meet the cur¬ May 4 from Washington published
rent

situation

without

rigidities but with

in

excessive

some

the

une"

controls

say:

to avoid chaos.

New

While

In line with its program

such

a

Securities

Act of

under

registered

trant is

1933

a

description of the securities be¬

the

contained in

such description
furnished with the pros¬

prospectus,

must be

pectus."

•

-




potential
the present "cen¬

heating" system: (1) Once
installed, the householder wouldn't
have
fuel

to

about getting his
servicing the equip¬

worry

supply

or

ment—wouldn't have to carry out

ashes, check up on coal or fuel oil
deliveries, watch his water gauge,
clean
the
furnace
tubes, check
noisy radiators, etc. (2) Combined
individual

regulators for

automatic

each

room,

heat

differ¬

ent

parts* of the 'house could be
at: different
temperatures
without waste of heat or fuel. (3)

kept

Heat

could

faster

when

obtained

be

wanted

in

a

much

hurry,

since it won't be necessary to get

"steam up" in the furnace.
•;

By providing promotional rates
the
present
scale,
and

POWER

beloW

working with development build¬
ers
to install electric equipment
in

homes,

new

a

great additional

outlet for

with, though it could hardly be
attempted under the present rate
structure, whereby residential
electricity costs about 3 or 4 times
much

as

as

industrial power.

|

The Federal Power Commission
and

other

Government

agencies

should realize, however, that un¬
der the present severe regulation
and taxation of the utilities there
is little incentive for the latter to

seek business in
fields.

new

Obviously,

and.untried

they

will not
ignore the conventional methods
of
increasing
sales,
and their
salesrooms

lie

receive
new electric
refrigerators, wash¬
ing machines, toasters, radios, etc.,
ready

to

TO DESTROY THE AXIS
SMALL compared with the supreme and sea, the pro¬
the fighting fronts on land sacrifices of the
men

on

duction
ican

the

accomplishments of

men

industry have made their
production, and

never

gigantic massing of electric

and machines in Amer¬

successes

power—over

supplied by business managed electric
Possible

r

because of

work in the American
of

our

possible. Behind

too little or too late, is the

80

per

power

cent of it

companies,

long range planning and team¬
Way—teamwork that includes all

employees from those

to those with their hands

on

on

far-flung battle fronts

the switches that release

into

than the Axis Nations and all their satellites combined.

opment

will

from

result

its

'i
,

enact¬

an

over-all reduction of

Present

collections

Mr. McLean said that he would

the

support

bill

with

the

hope

that the Senate will improve it.

Representative Gearhart

(Rep.,

Calif.), another Ways and Means
joined
Representative

member,
Curtis

(Rep., Neb.)

in a conten¬
tion
that the legislation would
impair contributions to
educa-

i tional,

religious

and

charitable

institutions.
The

bill

as

soon

passed

by

the

are

available.

lines, such as the devel¬
of house heating, they

the power to war

industries. We will continue this sup¬

be

willing to spend money
for commercial research, and must
be

allowed

to

obtain

the

com¬

mensurate

profit which all busi¬
ness pioneers expect and deserve.
This is almost impracticable un¬
der the present sytsem.

Moreover, profits could uoubt-

AMERICAN GAS AND ELECTRIC SERVICE CORP.

Principal Affiliates
ATLANTIC CITY ELECTRIC COMPANY

ELECTRIC

less be increased substantially by

APPALACHIAN

installing more modern generat¬
ing equipment in many utility
plants, but this requires new cap¬
ital, and the industry can't obtain
this sort of money merely by is¬
suing
3%
bonds—a
reasonable
proportion must be received from

INDIANA

GENERAL

INDIANA

&

sale

of

stock, which is
present condi¬
dollar of increased

common

not feasible under

tions.
taxes

was

House unanimously on May 5.

these

as

new

must

'.vA

$60,000,000 in the tax take from

,

ing registered is not

it goes is bene¬

from personal incomes amount to
about $17,000,000,000 annually.

the regis¬

If

has many

over

port, for here in America we have more electric powef

result in

permitted to file its Secure

the various items of Form 18.

to

disputed estimates by Con¬
and Treasury experts
that the legislation actually would

the

plying information in response to

heat

tral

But if the utilities are to venture

individuals.

iti^s Act prospectus in lieu of sup¬

Trib¬
on

He

registrant are

currently

went

gressional

amendment, if se-.

this

of

as

ment."

The Commission says:

"Under

form of

taxes

of sim-

plifying filing requirements, the
Securities and Exchange Commis¬
announced on April 20 the
adoption of an amendment to
Form 18, the form for applica¬
tions for registration under the
Securities Exchange Act of 1934
of securities of foreign govern¬
ments and political subdivisions

curities

"as far

It* is
prohibitive at
present, and electric heaters are
used only for auxiliary heating in
heating.

are

ficial," the New Jersey Represen¬
tative, member of the Ways and
Means Committee,
declared "in
my opinion a very substantial in¬
crease
in
the
personal income

sion

thereof.

"Herald

this,

;V .>;V V1' v.1;conceding that simplifi¬

:

cation

Simplify Filing In Case Of
Foreign Govt. Securities

York

reporting

house

true that rates

electricity might be de-1
veloped. Certainly this possibility
would seem worth experimenting

contracts.

war

On the other hand it is not

1939.
to

should

However, there is one big field
which the electric power industry
has thus far practically ignored—

with

$43,000,000,000.

"A":-;

national

t:.

>■

ing the war period, which is the
optimistic point of view, or failed pare Federal tax statements.
to develop at all, which is the pes¬
He said he believed the corpor¬
simistic point of view, it is un¬ ation tax streamliner should em¬
likely that a defnite national pol¬ body provisions allowing com¬
icy on wages will be developed panies which converted to war
for
post-war readjustment.
If production to build up reserves
such a policy could be developed, for
reconversion
to
peacetime
it should not attempt to maintain
production. Also, he said, there

,

In

during
building program for new
the war, despite the pre-occupagenerating facilities. Fortunately,;
tion of executives with
operaing
this program was only partially
While court tests of
carried out, and a large amount problems.
Section 11 have not yet success¬
of money was saved for other war
purposes.
1

vast

be given to the fact, however, that vices from Washington April 28,
prices have tended to be higher which also stated:
after a war than during the wari
He was seconded immediately
Whatever the price level is, it will by Representative Knutson (Raffect the employees' demands for Minn), ranking Ways and Means
increases in wage rates and the Republican, thus giving corpora¬
ability of employers to meet these tion tax simplification the same

<

1937.

of

and

studies and forecasts have not al¬
ways

in

common

•quality of labor and

considerably

were

than

Every
means

a

dollar less for divi¬

dends; in the last quarter of 1943
taxes increased 17.7% and divi¬

KENTUCKY

WEST

KINGSPORT UTILITIES,

POWER

THE

OHIO

THE

SCRANTON

WHEELING

COMPANY

COMPANY

ELECTRIC

MICHIGAN
AND

POWER

SERVICE

VIRGINIA

COMPANY
POWER

COMPANY,

INCORPORATED

COMPANY

ELECTRIC

ELECTRIC

COMPANY

COMPANY

I"

..

INC.

Thursday, May 11, 1944

FINANCIAL CHRONICLE

THE COMMERCIAL &

1930

t*1

Ocean

PRIMARY MARKETS

New

STOCKS
IN^

FRanklin

Street

7535

CG-105

SAN

ANGELES,

LOS

LOUIS,

FRANCISCO

TELEPHONES

Enterprise

PROVIDENCE,

is

a

established iri 1942, but slightly above

previous record year of 1941. Not all lines declined in 1943, how¬
ever; in fact the somewhat substantial fluctuation in motor vehicle
and ocean marine writings in the ♦>
the

years have tended to
fact that fire writings

increased

steadily

year

the

of

a

stock

companies

and

sidered

their

marine

inland

in

total

1942

years

and

1943,

Teletype—NY

1-1248-49

WRITTEN

PREMIUMS

Incurred Loss Ratio

1943

1942

Continental

44.2

51.5

16,535

42.0

40.5

49.8

Fund

42.2

43.3

50.6

45.2

42.5

52.1

45.5

49.1

Hartford
Home
Jns.

St.

of No,

<Ss m;„L—

Paul F.

Totals

—,

Continental

Ins.

Ins.

St.

$217,487

$312,178

$289,726 Average 46.5

60.6

51.8

52.0

under

ditions

as

marine

47.9

45.0 4

Vol.

49.4

43.0

39.2

38.7

45.9

$155,985 Average 41.0

41.8

48.8

43.7

6,509

PREMIUMS

a

5 Year

1939

1942

1943

Average

$2,357

47.3

45.4

44.0

51.6

1,908

47.8

46.4

46.0

41.0

51.7

44.9

45.8

1,181

1,297

1,273

46.1

41.0

41.2

45.9

6,817

5,972

5,536

47.4

42.7

38.5

5,951

3,719

51.9

47.4

41.5

2,687

2,520

40.2

41.6

38.3

44.0

1,973

2,122

2,097

42.8

41.9

40.1

44.9

$48,673

$26,655

$23,129 Average 46.4

43.7

41.7

49.0

Motor
vehicle
for
writings were
the nine companies totaled $155,- moderately lower in 1943 than in
985,000 in 1943, an increase of 1942, and less than half of the
8.2%
over
1942
writings
and 1939 volume. The peak year since
32.5% higher than their 193^ vol¬ 1939,
however,
was
1941
(not
ume.
Each company in the group shown in the table), when writ¬
shows
this
trend.
Loss
ratios, ings were more than double the
however,
have
increased
each 1942 figure. The loss ratio on this
year, averaging 48.8%
for 1943, class of business, however, shows

compared

with

41.0%

1939

premiums

41.8%

in
1942,
five-year
average of 43.7%.
This upward
move
in the loss ratio parallels
the country-wide increase in fire
and

a

improvement
and
the

is

doubtless,

has

over

previous years,
better than

considerably

five-year

This,
be attributed to less
average.

can
the normal amount of driv¬

than

accompanied the
industrial tempo oc¬
casioned by the war effort. It is
reasonable to anticipate a reversal

ing coupled with the greater care

of

but

exercised

heightened

trend

in

the

by
motorists.
Home was the largest underwriter
in this class of business in 1939,

post-war

years.

today

dropped

to

second

place

in

1943.

.

1

MARINE:

NET

1942

1939

PREMIUMS
1943

Insurance

WRITTEN

course

net

because

5 Year

1942

1943

Average

This should
the

be no surprise, for
clearly stated, and
banker who handles invest¬

rates

every

is

now,

smaller

Home Insurance

1,487

8,757

4,918

24.7

107.4

47.9

70.2

$50,000

Ins. Co.

3,478

20,852

8,463

52.6

99.1

45.0

73.5

1,966

6,168

3,939

65.5

80.6

58.0

69.0

$14,352

$78,481

Ins.

St.

tors

727

1,219

1,513

38.5

43.5

50.0

48.0

582

995

1,231

38.9

38.1

58.2

2,080

2,841

3,740

49.3

43.7

61.5

717

808

48.7

42.2

44.3

of

52.4

486

42.8

Insurance

of

Totals

No.

__

Amer._

& M

45.6

61.3

63.7

51.3

-

funds

accountant

worry

tax

return, and in the
banks earning less than

a year,

not

4,108

5,166

47.1

57.3

67.3

57.2'

6.018

5,924

44.4

41.0

47.8

42.2

2,151

2,520

36.2

42.8

51.2

46.7

$28,902 Average 43.5

47.6

56.0

the

tax

bracket in

which the in¬

ommend that bankers who

1,911

$24,670

bearing

buying

57.5

1,796




some

bank's

vestor is now,
in the future.

3,560

$15,137

the

the

upon the advisability
municipal bonds as
compared to taxable securities is

51.1

5,134

convenience,

we

have

national bank;

,

Is

Tax Free

Municipal
Yield of

must

rate,

tax

Equal to

provide

Tax Free

Is

Bankers

49.9

to

Head

Taxable

Yield of

Yield of

Branches

limited;

the

Government

and

Colony

Kenya

In

Uganda

Office:

26, Bishopsgate,
London, E. C.

Equal

Municipal

.Taxable
Yield of

of india,

to

I

India, Burma, Ceylon, Kenya"
and Aden and Zanzibar

in

Colony

'<?

1.10

2.34

1.80

2.45

1.85

2.55

1.90

4.04

1.25

2.66

1.95

4.15

1.30

2.77

2.00

in¬

bank's funds study their tax posi¬
tion with a view of determining

0

4.47

2.96

2.10

1.45

3.09

2.15

4.57

1.50

3.19

2.20

4.68

'•

description
business

of

'

offers
(the issue
Pennsylvania), ac¬
cording to an interesting memo¬
randum
being
distributed
by
Buckley Brothers, 1529 Walnqt
St., Philadelphia, Pa., members of
the New York and Philadelphia
Stock Exchanges; i. Copies of this
memorandum- may be had upon
request from Buckley" Brothers*
attractive situation

is tax free

situations

in

Loft

Candy Corp., Majestic Radio and
Television, and Allen' du Mont
Laboratories offer

Executorships

Attractive Situation

Attractive Situation
current

exchange

and

H. H. Robertson Company

an

The

and

4.36

2.05

2.87

1.35
1.40

attractive pos¬

in

.

sibilities according to a memoran¬
dum issued by

J. F, Reilly & Co.,

Ill Broadway, New
York City.
Copies of these interesting memo¬
randa may be had from the firm
upon request.

Available On Request »i
Schenley, Distillers. Corporation

Ins. Stocks

Compared

have prepared an

Bissell & Meeds,
120
Broadway, New York City, mem¬
Laird,

the New York Stock

Ex¬

change, have prepared an inter¬
esting comparison and analysis of
insurance stocks. Copies of these
data may be had from the firm

are

;

£2,200,000
every

also undertaken

bers of

trusted with the investment of the

£4,000,000
£2,000,000

4.26

banking

Therefore

rec¬

conducts

Trusteeships

and is likely to be
we

Capital
Capital

Fund_»_

3.94

1.20

Bank

3.83

1.15

The

One of the most important fac¬

60.0

4,118

For your

computed the following informa¬
tion to show the yield which a
taxable investment, based upon a

to

the investment of¬
infrequently is unfa¬
as they ap¬
ply to his own institution.
ficer

WRITTEN

Fund

Co.

as

miliar with tax rates

American

Paul F.

informed

and is liely to be in the

invests

69.3

2,620

be

Yet too often the banker

45.7

Home

are

should

future.

about

1943

.,

in

the SUDAN

53%.

3.72

94,8

58.7

Towns

1.75

59.8

1942

all the

in

EGYPT and

2.23

4,322

__

the

on

subject to taxes, ranging
between
$25,000 and $50,000, in
which range the tax amounts to
come,

1.05

8,998

Insurance

less

.

Reserve

1,156

Hartford

on

lower,

William Street, E. C. '
^'

principal

Paid-Up

Hartford) Insurance

43.0

£3,000,000;

AGENCY

Subscribed

simply lets

1939

£3,000,000

.

,

Branches

3.62

1,845

.

are

rate

be

•

,

1.70

72.6

Incurred Loss Ratio

CAPITAL

and 7 King

6

in¬

that have

2.13

4,173

Great

banks

1.00

67.6

$2,866

Cairo

3.30%

34.4

70.8

for

3.51

124.8

$2,503

1

No.

Register

LONDON

3.40

77.3

Fireman's

-

1.65

who

$1,375

Office

FUND

1.55%

72.2

($000 omitted)

RESERVE

1.60

65.7

46.1

-

L91

34.1

1943

*

1.49

44.6

103.3

a

1.06%

97.0

PREMIUMS

;

.90

49.0

Fidelity-Phenix

S.

V

.50%

55.8

;

the U.

Cairo

.70

95.4

,

will

of income. But if you
earning $25,000 and less than
$50,000; subject to normal tax and
surtax, then for every $1.00 of
income you have over the $25,000
you are required to pay 53 cents
in
income
taxes—not
including
any other taxes.

106.8

Ins.

}

Banks
A.

of EGYPT
Head

are

50.8

Continental

the

the rates

124.2

$38,765 Average 52.3

corporation with

few<S>

Too

taxes.

income

63.6

1942

C.

NATIONAL BANK)

first $25,000

45.2

Insurance

or

over-all

Of
your

44.8

NET

throughout

equal various yields on tax-free
municipals:

3,091

Aetna

bank

000.)

3,149

1939

a

53%

$2,569

MARINE:

*

E.

Street,

arrangements with

Agency

complicated

5,620

IV—INLAND

these"

In

Berkeley Square, W. 1

v1'

$25,000 and $50,-

6,469

Totals

'

taxes is between

5,551

Amer._

Threadneedle
47

Corps."

$50,000, the amount of
such income over $25,000 is sub¬
ject to a normal tax of 31% and
to a surtax of 22%, a total tax
rate of 53%. (Moreover, if your
total net income is over $50,000
you
may
still be in the 53%
bracket if the portion of your in¬
come subject to normal
and sur¬

12,421

& M

interested

travellers

and

LONDON OFFICES:
29

panies can be developed from the
accompanying tables.

.<

over

909

No.

traders

com¬

mended

498

of

With over:'
Australia, in'l
Islands,
and\
complete and
to
investors, \

of

States

countries.

maximum
tax
bracket
in
fact. There the
abput it. which his bank is now and is
If your income subject to normal likely to be in the future.
This
and surtaxes is over $25,000 and procedure
is especially recom¬

nothing

2,713

Paul F.

all

Zealand,
the
Pacific
London, it offers the most
efficient
banking
service

Calcula¬

nine

in

New

bankers appreciate this

Fund

St.

1943.
the

Is the oldest'

largest bank In Australasia.
branches

800

-

SYDNEY';

George Street,

FULLY PAID

$5,941

63.5

''"y ■v;'
that

is

profits

American

Fireman's
Great

of

each

and

K.B.E.,

Manager

The Bank of New South Wales

Commercial

925

Fidelity-Phenix

for

Office:

Head

net income of

fact

$1,220

Ins.

10.0% in

1939 and
tions

in

were

DAVIDSON,

General

re¬

1943; automobile
22.4% in 1939 and
8.0% in 1943; ocean marine writ¬
ings were 6.6% in 1939, 26.5% in
1942 and 13.4%
in 1943; inland
marine
writings were 7.0%
in

the tax bracket in which his bank

Incurred Loss Ratio
1939

($000 omitted)
Continental

53.8%

ALFRED

SIR

companies

$25,000 and $50,000, subject to normal and surtaxes, is in
tax bracket—not 27%, not 40%, but 53%—not considering

ments
Ill—OCEAN

ocean

t

54.1

2,666

follows:

as

53%

not

48.9

21,696

insurance

and

nine

the

in

of

writings

£23,710,000

30th
_£187,413,762

Aggregate
, Assets
Sept., 1943

II, No. 3, J. Austin White, of J. A. White & Co., Cincinnati,

excess

is

54.5

43.7

Totals

54.1%

nearly
is fire experience,
such unusual con¬

fire writings constituted
total writings in 1939

viewed,

viewing the variations in
ratios and their rela¬

The

Incurred Loss Ratio

43.3

& M

6,150,000

.

between

WRITTEN

1943

54.4

Co. of No. Arner.,

Fund

Liability of Prop— 8,780,000,

as

obtained

the

For

loss

notes

1,933

£8,780,000

Reserve

Reserve

Writing under the above caption in the firm's Municipal Letter,

41.1

$2,494

important

"The 13% Tax Bracket For Banks And

42.4'"

NET

as

the fortunes of
the insurance industry and to the
individual insurance companies, a
sense of proportion must be main¬
tained.
For example fire insur¬
ance is still the major line of|these

44.6?

1942

1817)

Capital

Paid-Up

field in 1942.

45.3

6,139

(ESTABLISHED

companies, consequently, unfavor¬
able or. favorable experience in

except

35.9

40.0

__

to total net pre¬
nine com¬

now

bank" of
new south wales

the secondary lines is not

17,950

$144,195

__

Totals

36,699

2,471

insurance

Aetna

-

16,626

1,688

this

;

52.3

33,46$,

2,031

that

51.8

53.1

40.7

i

2,051

losses

54.1

50.3

38.8

2,148

in

52.6

68,7
57,0

40.6

2,987

Fire

57.3

47.0

28,186

2,649

Paul F.

50.7

43.2

25,720

Fund

Hartford Insurance
Home

61,549

41.1

American

Great

50.0

18,088

41.0

$6,233

—

49.8

19,017

11,036

($000 omitted)

Fireman's

55.4

12,078

10,299

5,162

Fidelity-Phenix

50,796

46.6

& M._——

9,856

$117,697

____

51.0

Paul F.

10,732

1939

Insurance

53.4

39,256

42.8

II--AUTOMOBILE:

Aetna

59.3

61,746

12,626

Amer._

45.6

49,989

26,765

Insurance

Co.

18,655

52,055

22,386

_

24,251

20,452

24,525

8,951

Insurance

Australia and New Zealand

28,827

Insurance

7,657

American

Great

50.9

37,375
57,648

43.7

43.3

15,151
11,361

._

52.4

53.9

49.8

43.8

12,415

12,936
9,429

Ins.
'

Fireman's

Ltd.

45.1

$16,356

Fidelity-Phenix

49.0

55.1

58.1

45.5

Co. of No. Amer._

Home

Ins.

Bank,

Glyn Mills & Co.

1943 Average

40.1

$15,144

$11,785

5 Year

1939

($000 omitted)
Insurance

63.2
67.7

tive importance to

Gibbs, Manager Trading Department)

L. A.

1942

1939

Aetna

47.9

12,723

When

Telephone: BArclay 7-3500

com¬

NET

21,599

15,798

these

pared with 1939.
I—FIRE:

27,075

22,757

Fund

Hartford Insurance

Exchange

NEW YORK 5, N. Y.

120 BROADWAY,

Bell

the

Stock

York

New

Members

under-

has been tabulated for

writings,

27,470

American

Great

Deacon's

51.4

19,047

„

itous marine losses of 1942.

Laird, Bissell & Meeds

marine,

ocean

and

Available on Request

con¬

experience

automobile,

fire,

are

1

*

Average

53.4

incurred los$
ratio is
1942, and fraction¬
ally below the five-year average,
despite the increase in fire losses.
The five-year ratio has been ab¬
normally increased by the calam¬

Comparison and Analysis

few of the major multi¬
line carriers. Nine of the largest
of

years

1943

58.5

46.6

Fireman's

St.

1942

45.1

lower than in

the trend

and

ASSETS

£115,681,681

5 Year

1939

average

perhaps of interest to look
in premium volume
loss ratios over the past five

TOTAL

Williams

Incurred Loss Ratio

1943

$28,457

panies, the trend of each company
is clearly shown in the final table.
It will be observed that the 1943

Stock

It is

at

Burlington Gardens, W. /
64 New Bond Street, IV. I

furthermore, shows a better than
loss experience.

$29,865

miums written by these

Insurance

by

Smithfield, E. C. /

Charing Cross, S. W. /

of North
leading writer and,

15,546

Ins.

Fidelity-Phenix

Turning

since 1938.

8 West

49

unfavorable.

$22,747

Insurance

Continental

volume in 1943 of all American stock firemarine insurance companies approximated $1,060,000,000, according
to estimates by Alfred M. Best Company. This volume is 7% below

year

OFFICES:

Bishopsgate, E. C. 2

average

($000 omitted)

By E. A. VAN DEUSEN

have

3

Company

America is the

1942

Stocks

Total net premium

the

been

throughout Scotland

LONDON

years

many

OFFICE—Edinburgh

HEAD

Branches

Associated Banks:
1939

few,

Incorporated by Royal Charter 1727

PREMIUMS WRITTEN

V—TOTAL NET

Aetna

past

Royal Bank of Scotland

loss experience
writing this class of

has

Insurance

Normally,

Bank and Insurance Stocks

hide

business

ocean marine
profitable line, and

103.3%.

for the industry

it

now on

over-all

that

business

the record

the

in

time

first

of companies

The worst year was 1942,
excessively severe shipping
losses occasioned by enemy sub¬
marines brought the average loss
ratio for the nine companies to

7008

This Week—Insurance

the

is

around

was

43.0%.

7008

Enterprise

ratio

when

SEATTLE

TO

PORTLAND,

6011

Enterprise

HARTFORD,

AND

loss

the

when

NEW YORK, BOSTON, CHICAGO,

CONNECTING:

SYSTEM

WIRE

ST.

3

Salle

La

S.

1-2875

NY
PRIVATE

135

0650

HUBbard

3-0782

Square

Office

Post

10

Street

Chicago

9

Boston

5

York

Wall

67

the outlook is that from

1943

half of that will continue to be so. Insurance
written in'1942, a
record year. Company of North America is one
This decline, however, still leaves of the leading underwriters of this
the 1943 volume at approximately class of business, and its 1943 loss
2.7 times the 1939 volume. Not only ratio was somewhat better than
is the volume of this business at the
average
of the nine com¬
a
most favorable level,
but the panies.
Inland
marine
loss experience in 1943 at 46.1%
premiums ad¬
was better than in
1939, and bet¬ vanced to a new high in 1943, and
ter than
the five-year
average. were nearly double the 1939 vol¬
The best year
in the five-year ume. The loss ratio in 1943, at
period under review was 1941 56.0%, was also at a high, and it

Huff, Geyer & Hecht
WHitehali

business in

marine

approximately

was

upon

request.

attractive book¬
the
first
arti¬
cles in the series they have been

let

containing

running in the "Financial Chron¬
icle." Copies of this booklet may
be had upon request by writing
to

Mark Merit, in care

ley
Fifth

of SchenCorporation, 350
Avenue, New York 1, N. Y.

Distillers

Volume 159

THE COMMERCIAL & FINANCIAL

Number 4280

CHRONICLE

1931

ings, including utilities, to income
taxation at public hearings, when

Taxation Of Public Utilities-

No Woild Peace Without

Income

the

discussion

Here And In Gieat Britain

Rights Of Individual Citizens

i;
the

risk

into

nation

the

to

than

war

run

with

that dissatisfaction

tyy rule might result in dispos¬
sessing me." There is nothing in
recent history that indicates the
slightest change in this modus
operandi.
:';V.
! i\"One of the truest lessons of
history that Shakespeare ever re¬
corded is found in his Henry IV.

There the old king on his death¬

bed calls his
and

Henry to his side
words admonishes

son

these

in

economic

tional

which could tell

us

organization
when

we

can

raise pigs, and
we
our

how many; whether
increase or decrease

should

cotton crop or

wheat crop, or
The United States
home-brew samples of
of economic tinkering.

anything else.
had

some

that

sort

Based

experience my
view is that any attempt to do
the same thing on an
interna¬
tional scale would bring confusion
upon

that

confounded.

worse

"The exchange stabilization pro¬
him not to overlook the extent to
grams which have been offered
war operates to take the
attention of the people from the constitute another case in point,
shortcomings
of
the
ruler.
I Instead of approaching the prob¬
lem
through known and tried
quote: ' ■ :i?.
methods, we are asked to endorse
"I
had a purpose now
»'
new and grandiose schemes pro¬
To lead out many to the Holy*

Which

.

,

...

■

Land,'h

•

Lest rest and

lying still might

make them look

Too

.

i

unto

near

Therefore,

'

Be it thy course
•'

state,

my

Harry,
to busy giddy

my

:

vV;-minds with
:

Foreign quarrels; that action,
hence borne out,

1

May waste the memory of the
former days."

day goes by that I do
mail some plan
which the author believes would
"Hardly

a

hot receive in my

permanent peace. So far I
seen
a single one that

assure

have
has

not

impressed me as sound. The
approach is that there should
formed a new league of na¬

usual

be

tions
sary

force

implemented with the neces¬
military equipment to en¬
its decisions.
No one has

suggested that- troops or battle¬
ships or airplane squadrons in
.sufficient quantity to be effective
will be for hire to such a world

[organization. Therefore if such an

[organization is to have military tain will wish to control
I equipment, with which to enforce
tihies of your countries.
that

decrees

fits

equipment will

jhave to be allocated by the coun¬
tries

interested in preserving

'peace.
i

:

the

a course were feasible I raise
[ the question as to how many-coun¬
tries would be willing to contrib¬

J such

a world organization a sub¬
stantial portion of their military
[forces?
I also ask how long a

ute to

f government in one of our Repub¬
lics could remain in office when,
<it

disclosed that such an in¬

was

ternational force had the

jity to invade
J

one

author-

of our countries*

against the will of that

country?

to me, is the crux
fof the whole proposition. Because
!if an international organization is
ito be supplied with the force ade¬
quate to carry out its decisions,
[That, it

"The big job that

resentatives

of

hemisphere

have

.

"Assuming for the. moment that

-

V

seems

to me,

seems

the des

wfe'as the

business

can

in

rep¬

the

before us, it
be summarized

thus:
"1. We wish to preserve

the in¬
and sovereignty of
our respective nations.
:; -1
"2. We wish to cooperate with
the governments of our countries
in raising the standards of living,
and in securing peace and pros¬

dependence

perity for

our

countrymen.

"3. We wish to make certain that

not

publicly owned electric systems had they been taxed at the same
rate as private power companies
the Pearl Harbor incident.
more than $41,385,000, in addition
..[v Since the close of 1941, how¬
to the sum that TVA and its dis¬
ever, this lack of need to support
were
exempted from
the war effort has given public tributors
paying, would have been added
power systems an enormous ad¬
to our Federal war chest. In all,
vantage in competition with fed¬
of
publicly
owned
erally-taxed private systems. So exemption
much so, in fact, that with Fed¬ electric systems from Federal tax¬
eral

ation reduced the

taxes

gross

an

of 5.6% in taxes and
equivalents to local govern¬

average

entire

community

is

* *

have

that

expedient

it

at the same rate

been

power,

to

claim

to

which

that

be

willing

such

to

to

sovereignty

program

a

relinquish
the extent
would re¬

Beyond that I believe that
our only hope for an approxima¬
tion of permanent peace will come
through religion raising the gen¬
eral level of moral virtue; and
^education raising the general level
-of intellectual virtue.
Only then
quire.

peoples of all countries
fully cognizant of their, stake
in a peaceful world. That is not
something that could be accom¬

'•will

the

5be

plished
closed

*

by

small

doors

commerce

"8.

of

how

Out

and out of

our

right and the intelligence to
appraise what is involved and can
make known their wishes through
the

representatives ".of
choosing in their

their
own

own
govern¬

ments.

"...
"Also it has been proposed

we

should

adhere to an

that
interna¬




our

experience

example, with full

shall

by precept and example—
by force if necessary—keep
the threat of war far away from
and

our

shores.

rying

on

takings.
British

The

have

Courts,

moreover,

taken the position

Again, human nature being what
cannot place

our

reliance

is

very

and

broad

and

all

facts

unless

the

of the

upon
precept
and ex¬
We must remain strong in
military sense. The democracies

must

not

again

make

the

fatal

In fact, the theory upon which
publicly owned utilities are sub¬
jected to the same taxation as
privately owned systems would
appear to
be a belief that the
national welfare takes precedence
over the local good.
Accordingly,
although
any
surplus
earnings
above a predetermined level re¬
sulting from
utility and other
undertakings must be paid into a
general fund for the support of
schools,
local
public
hospitals,
asylums and similar social insti¬

tutions—sort of

a

British version

of our

Washington Plan—the na¬
government first obtains,
through the income tax, a portion
of those earnings for support of
tional

the

Nation

British

as

a

whole.

As

the

it, the burden of
supporting the operations of the
national
effort must
be
borne,
through the medium of income
taxes, by customers of publicly
and
privately
owned
utilities
see

taxed

for

its

support, no matter

Columbia Gas & Electric
CORPORATION

Ins., Bank Stock Evaluator
Butler-Huff & Co. of

California,

geles, Calif., have prepared an in¬
teresting comparative analysis of
82
insurance
companies and 38
banks.

These

data

are

Principal Operating Companies

contained

the

in

ance

April issue of their Insur¬
and Bank Stock Evaluator,

copies of which may be had from
the firm upon request. Also avail¬
able is a summary of the situa¬

which appears attractive at
current levels, Butler-Huff & Co.
pany,

believes.

•

Over-Counter Review

Bristol

&

Willett,

115

Broad¬

the

may

Copies of this interesting Review
be had from the firm upon

request.

Bingramton Gas Works
The Cincinnati

Gas & Electric Company

The Dayton Power and
The Manufacturers Light

Light Company
and

Natural Gas Company of

way,-'New York City, have pre¬
pared the current issue of their
"Over - the - Counter Review."

stayed."

within

three

categories pre¬
viously described they have con¬
sistently
held
that
a
publicly
owned utility comes within the
meaning of the Act.
one

required of pri¬

mistake, when peace has come, of
turning swqrds into ploughshares
and
spears" into pruning-hooks.
Only so can we be assured that
hand of the aggressor can be

inclusive,s

fall

210 West Seventh Street, Los An¬

ample.
a

that the

language of the Income Tax Act

vate power

tion in Manufacturers Trust Com¬

"How shall peace be preserved?

partici¬ it is, we
pating might be.j Peace only can entirely
the people have

of

consideration of and protection of
all
individual
sovereignties, we

("competent the individuals
be assured when

sljall be removed.

That

behind

groups

regardless

That business relationships
traded amongst the hemi¬
spheric countries shall be encour¬
aged and th|t unjustifiable handi¬
caps to a proper flow of trade and

or

competitors of pri¬
or companies car¬
similar trading under¬

vate persons

"7.

and

in
not

potentially

■

would

it

exemp¬

actually

are

the Federal Government

companies, the Treas¬
government they wish.
:.
: ury would have been enriched by
"4. That private enterprise which more
than
$10,615,000
in
this
demonstrably has provided the twelve-months' period.
And had
TVA and its power distributors
greatest good to the greatest num¬
I necessarily to be effective it would ber shall be maintained and
pre¬
paid local taxes at the rates as¬
[have to be able to order the in¬ served.
sessed
/.
against privately owned
vasion of any country that in its
,( "'5. That the people and not the systems,
the
states,
counties,
opinion was a potential aggressor
state shall be and shall remain su¬ school districts and communities
1—even though that country might
in which they operate would have
preme.
/V; jhave been one of the contributors
"6. That peace and understand¬ had more than $1,600,000 added
of military force. \
.;
;
ing
and
friendly
relationships to their joint income.
\
"It is my personal opinion that
shall be maintained amongst the
To
fnotwithstanding any of the countries of the Western Hemi¬ the carry the point further, all
publicly owned electric sys¬
t dreamy-eyed proposals of someqf
sphere.
tems in the country — Federal,
our
star
gazers,
few countries
their

been

would

distributing its
compelled to pay

taxes

kind of

the

under
And

alike, as well as by customers of
other types of public" and private
whether or not individual citizens
ments, but nothing to the Federal
undertakings.
are
consumers;
and (3) a few
Government.
Likewise,
TVA's
As a result the
consumers
of
annuaL;report for the same fiscal highly venturesome undertakings,
utility services in Great Britain
the success of which will
con¬
year places gross operating rev¬
contribute equally to the costs of
tribute to the national welfare,
enues from electric operations at
and which have been specifically the national government, through
$31,674,210, of which it paid 6.2%
reflection
of
income: taxes
in
in taxes and tax: equivalents to exempted from taxation by an Act
of Parliament. All other under¬ their rates for service. This equit¬
States and their subdivisions, but
takings, including publicly owned able distribution of the tax bur¬
not one dime in Federal taxes.
den is in sharp contrast to con¬
During the same period, how¬ utilities, pay the same taxes as
in
the
United
States,
those
assessed
against
private ditions
ever,
the privately owned elec¬
where
consumers
of
privately
tric utilities of the country re¬ enterprises.
rendered utility services are com¬
The Royal Commission on the
ceived aggregate gross operating
pelled to pay not only their full
revenues
of some $2,713,000,000, Income Tax observed in its 1920
share of the costs of. the Federal
of which they paid an average report that none of the witnesses
Government but, in effect, a part
of 8.33% in taxes to local govern¬
representing districts or commu- of the share that rightfully should
ments and 16.0% in Federal taxes,
nities raised any objections to subj be borne by the customers of taxHad TVA, and the municipalities
jecting publicly owned undertak- ' free publicly owned utilities.
and cooperatives
tax

to the end that the

nation may determine the

where

*

may

bodies

to

until

was

tion from income tax for public

an

the rights of the individual citizen
shall be protected and preserved

people of each

be

the Federal Treas¬ State, District, Municipal and REA
insurmountable cooperatives — had an estimated
barrier alone to competing pri¬ aggregate gross operating revenue
vate systems, due to the greater in the twelve months ended with
operating efficiency of the latter. June, 1943, of $325,000,000, no
Nor was exemption from Federal part of which was paid to
the
taxation of tremendous advantage Federal Government in taxes. But
was

funds available
consuming 16.3% of
for the
purchase of tanks and
operating revenues, on the
average,
in-, 1943,
one
Middle jeeps, of planes and ships, of
and ammunition,
in one
Western privately owned electric guns
twelve-months' period by around
viding for another international
utility has stated it could give
organization to stabilize curren¬
$52,000,000. As a result, all pri¬
every household consumer in its
cies and foreign exchange. Most
service area the amount of elec¬ vate enterprise, the pountry over,
experienced
students
seem
to
had to dig a little deeper to pro¬
tricity now consumed absolutely
agree that the most constructive
free and be money ahead, pro¬ vide this sum.
contribution
this
country could
We in this country have yet to
vided it was relieved, as, publicly
make would be to set an example
owned systems are, of the need appraise publicly owned under¬
here of sound economy based on
of paying Federal taxes. This, of takings with the realism of the
a
sound Federal fiscal program
Under the British
In¬
course, could be done only by a British.
supported by a budget that gave
utility enjoying a heavy indus¬ come Tax Act, all gains and prof¬
proper regard to the relationship
its derived from trading activities,
trial and commercial demand.
of outgo to income. That in turn
The advantage given publicly whether conducted by publicly or
would enable us;to provide needed
owned
electric systems through privately owned enterprises, are,
credit to others on a proper basis.
with few exceptions, taxed alike.
"The net of all this is, as I view Federal tax exemption can read¬
These
exceptions
are,
simply
According
it, that the United States could ily be demonstrated.
stated, (1) undertakings like the
make its proper contribution to to TVA's monthly statistical re¬
British Broadcasting Corporation
all of these world problems under port for September, 1943, munic¬
and rural cooperatives which, although supported by a
its own power and initiative. This ipalities
tax on receiving sets and operated
without the necessity of setting buying power from it had aggre¬
at
a
profit,, is owned by the
up
complicated super-world or¬ gate gross operating revenues Of
Crown; (2) compulsory enterpri¬
ganizations which might or might $34,670,000 in the fiscal year ended
ses
like water supply
systems,
June 30, 1943, of which they paid
not do a

good job. Under such a
procedure my country could do its
full part to make the world a bet¬
ter place in which to live, and still
retain the right to control its own
destiny, just as you, too, I am cer

It

their minds

of interest by
ury

Act

Parliament.

added:

(Continued from page 1918)

(Continued from first page)

Tax

in

■.

Heat Company

West Virginia

The Ohio Fuel, Gas Company

The Union Light, Heat and

United Fuel Gas

Power Company

Company

THE COMMERCIAL

1932

Of
World Trade

Financial Aspects
Future

the reduction of unnecessary gov¬

is one of
the greatest contributions the gov¬
ernment can make to the export
expenditures,

ernment

peace-time production, as
the war is concluded, or
that time, if conditions per¬

time to

as

fraternity.
The matter..of

Thursday, May 11, 1944

CHRONICLE

experience in the future, but, un¬
questionably, a reduction of debt,
not
by the imposition of addi¬
tional burdensome taxes, but by

page)

(Continued from first
that lasting peace and
prosperity for ourselves and the
other nations of the world can be

lieving

& FINANCIAL

••

depend largely on the leadership
of the United States and Great
Britain, the two great trading na¬
tions of the world.
If we. are to
meet that trust and point the way

not

is

gold

enough

to liquidate

outstanding obligations.
Conditions
brought about
the

war

necessary

by

probably will rqake it
that price control and

governmental con¬
exercised for
a
period after the war; for ex¬
understanding
of
problems and a will to collaborate ample, certain types of raw ma¬
to the fullest extent in a construc¬ terial for industry may have to be
tive program for the rehabilita¬ placed on an allocation basis in
tion of the trade of all those na¬ order that all may obtain their
share, or certain types of
tions desiring to cooperate with fair
scarce material may be limited as
us.
to export.
Unfortunately, .forms
American manufacturers of cer¬
of control within a country have
tain types of consumer goods may
a
tendency to increase and per¬
find it more difficult in the post¬
petuate themselves, and event?
war years to market their
prod¬
ually they lead the way to con¬
ucts in countries which have de¬
trols in other countries, until in¬
veloped their own industries dur¬
ternational trade becomes bogged

to

the rest of the

have

must

tions

other forms of

world, both na¬

sympathetic
each
other's

a

trol

continue to be

in
the post-war period has been dis¬
accomplished cussed at great4 length on numer¬
brought about to a great extent
only
if
government withdraws ous occasions. It seems apparent
by an unhampered interchange of
from competition with private en¬
at this time that our industrial
goods and services among all na¬
terprise, releases its controls on capacity after the war will be
tions.
industry and by the formulation substantially larger than pre-war
The future of the export trade
of a sound and equitable tax pro¬
capacity, when plants have been
of the United States has been dis¬
gram, permits business to return retooled for peace-time produc¬
cussed at great length in various
again to a profit-incentive basis. tion. If that is the case, domestic
quarters and the general trend of The thought has been expressed
thought as to post-war volume is on a number of occasions by those competition will be keen and the
need of export markets will be ing the war era.
For example, down in a morass of govern-;
optimistic; perhaps too optimistic familiar with business operations
greater than ever before, in order Brazil and other Latin American mental regulations, bi-lateral arif we consider all the diverse fac¬
that a continuation or increase of
that surplus
production can be countries have forged ahead in
tors now
existing that must be
government competition with pri¬ absorbed. However, other coun¬ the textile industry to such an ex¬ rangements,'quota systems, clear¬
correlated and properly synchron¬
ing/arrangements, barter agree-vate industry can result only in
tries, as a 'result of conditions tent that they can supply dheir
ized in the post-war period. The
ments, onerous foreign exchange'
increased unemployment, a cha¬
brought about by the war, have own needs and the needs of out¬
volume of the export trade of the
otic
internal post-war economy industrialized and it seems likely side markets and so we may find restrictions, and other restrictive
United States in the period fol¬
measures of
discriminatory na¬
and a restricted export and im¬ that there will be a change in the future sales of textiles in that ter¬
lowing the war will depend on
ture,
While we appreciate that
port business.
confined
to
the better our full
type of American exports to some ritory
the play of a number of both
energiesV^ist be devoted
We
of
course
recognize that parts of the world. This change grades, special fabric designs, etc.
favorable and unfavorable fac¬
to the winning of /he war just a^
other means exist for the creation may be most noticeable in some of With the passage of time, we must
tors, some of which will be with¬
speedily as possible, most of us
dollar exchange, but in the the
Latin
American
countries expect to see many nations of the
in our own control here and some of
dislike governmental restrictions
of which will arise in the buying final analysis, if the export trade after the first buying wave has world become even more highly and
restraints, and their elimina¬
countries. For example, some of of the United States is to func¬ subsided. Then, too, some of the industrialized and more self-suf¬
tion, whether .they apply to our
the so-called occupied countries tion on a sound basis in the fu¬ countries of the world with large ficient for certain of their needs.
of available
dollar ex¬ However/ in the overall pattern personal affairs or . against the .
ture, it must be paid for almost blocks
may find it difficult, if not im¬
free operation of business, should
possible, to purchase abroad on a wholly by dollar exchange result¬ change may not be willing to dis¬ of international trade, this is not be given immediate consideration
to be feared, for greater industri¬
pre-war basis until quite some ing from the purchase abroad of sipate their foreign exchange re¬
after the war is won.
time after the adjustment of their goods or services. „In the 1920s sources in an orgy of buying and alization within a country leads
The world-wide scope of the
we
made available substantial may restrict their imports to es¬ to higher standards of living and
internal economies
through re¬
war has had the effect of intro¬
habilitation of industry and agri¬ amounts of dollar exchange by sential goods or goods which do a larger demand for imports from
ducing American products to the
culture. On the other hand, many extending loans (mostly of a non¬ not compete too much with their other countries.
far corners of the earth and it is
countries have accumulated sub¬ productive
nature)
to foreign own new industries. In various
Much thought has been given but reasonable to expect that a
stantial blocks of gold and foreign governments through
private quarters the belief is held that to the two important problems of demand has been created which
exchange during the war period, channels and the results to pri¬ the Latin American countries now stabilization of currencies and the will
carry on in some measure in
which should enable them to en¬ vate investors, in many cases were have at their disposal approxi¬ disposal of surplus material in the
the post-war years.
Conversely,
three billion dollars in immediate post-war period and we in the United States have
ter the market for volume pur¬ rather disastrous; in the 1930s we mately
private
loans but gold and foreign exchange, part while no solution has been ar¬
chases, just as soon as goods are discontinued
found new sources of raw ma¬
available to them.
Some of.the took gold from abroad for our ex¬ of whiali, however, is in blocked rived at up to this time, the de¬ terials which will be needed here
neutral
countries also have at ports, with the result that we hold sterling that probably will not be gree of consideration being given and these factors should result
gold available for the payment of these problems warrants the hope eventually in a two-way trade of
their disposal large blocks of gold a large proportion of the
A great deal that some satisfactory plan of
and foreign exchange, estimated stock of the world; in the 1940s American exports.
mutual and lasting benefit.
;
we inaugurated lend-lease. Unless
of fear has been expressed in ex¬
at several billions of dollars.
operation will be evolved in both
The many obstacles to a larger
we
are
willing in the post-war port circles in respect to post-war cases.
Wide publicity has been and more successful foreign trade
Conditions within our own
country exert a very direct influ¬ period to part with our resources competition from Great Britain. given to the American and Brit¬ in the post-war period are a chal¬
without compensation, it is a fore¬ As a result of conditions brought ish
ence on export volume and it is
plans for the stabilization of lenge to the ingenuity and re¬
about by the war, Great Britain's
currencies in the post-war period', sourcefulness of the American ex¬
interesting to note the close pro¬ gone conclusion that lend-lease
must be
abandoned as soon as economy has suffered drastic which is so'/essential if foreign
portionate volume relationship
porter, but we have overcome
that exists between our exports, possible after the war is won and changes/, In the; pre-war period, trade is to reach its greatest pos¬ obstacles in the past and we will
thus we will again be forced to about 60% of her imports of ap¬ sibilities.
Both plans are com¬ do so in the future. Only in that
Imports and 'domestic economy. In
return to an exchange of goods
proximately one billion pounds plicated in character and whether
the period of "Coolidge Prosper¬
way can we hope to maintain a
and services as a means of cre¬ sterling was paid for by merchan¬ or not either would operate effec¬
ity", roughly 1925 to 1929, total
full
measure
of employment, a
dise exports and the balance by
foreign trade, including both ex¬ ating dollar exchange to pay for
tively in practice is a matter of continuation, of our standards of
the bulk of our exports.
invisible exports, such as interest debate.
Seemingly, no method of living and internal economic sta¬
ports and imports, exceeded nine
investment abroad, payment stabilization yet suggested is so
It is quite generally conceded on
billion dollars each year, as fol¬
bility which are the foundation
for service, etc.
By reason of a sound or easily operated as the
that for a few years after the war
lows:
upon
which a ;v i g o r o u s and
Total
Total
Total
substantial liquidation of debt to international gold standard—with
a
substantial demand will exist,
healthy-foreign trade is built.
';>)
Exports
Imports
Foreign
both here and abroad, for various Great Britain by outside countries free coinage of gold, free markets
Trade
MlW—
-i
(approx.)
(approx,)
and the loss of shipping, her in¬ and
types of merchandise that have
private ownership of gold and
(In billions of dollars)
soon

before

This

mit.

competition

be

can

,

.

.

1912967834

.

t

,.

■

$4.2

$9.1

4.4

9.2

4.9

4.1".'

5.1

4.1

5.2

1929^

In the

unobtainable

been

4.8

4.4

$4.9

1925—

as

a

result of

succeeding year, or

exigencies

needs

dropped to approximately seven
billion dollars; in 1931 to four and
one-half billion dollars; in 1932
to two billion nine hundred mil¬

price probably will not be an im¬
portant factor to foreign buyers.
When, this first demand is satis¬

dollars, and thereafter and
including 1938, it average four
billion seven hundred million dol¬
lion

1934 the fig¬

1930 to

From

follows:

ures were as

Total

Foreign

(approx,)

(approx.)

Trade

$3.8

$3.1
2.1

4.5

1.6

1.3

2.9

1.7

1.4

2.1

1.6

from

in¬

figures is that a sound

ternal

domestic

United States,

economy

with

a

the

in

high rate of

employment and substantial pur¬
chasing power results in increased
purchases of capital and consumer
goods within our own country.
This in turn leads to increased
imports and the creation

of dol¬

exchange to the credit of the
countries
of the world,

various

thus enabling them to take more
of our goods. If we are to have a
sound
internal
economy,
many

changes in

our

procedure

present method of

will

instance,

be

necessary,

for

balance our
possible, but
-among other things, private in¬
dustry must be permitted to re¬

budget

habilitate

speedily

we

as

must

soon

itself
as

as

and

possible

convert

from




to

sales

again

a

what will be our

internal public debt

den

on

is

no

bur¬

the national economy as a

service of perhaps

eight billion dollars a year,
which is now conceivable,
plus
the additional taxes that will have

3.7

drawn

conclusion

The

these

and

competitive basis,
position in world
markets? The naive statement has
been made in some quarters that

revert

six to

3.1
.

period after the war,

to meet a debt

$6.9

2.4

1932—

the

whole, since it is a debt that we
owe
to ourselves.
Taxes levied

(In billions of dollars)

!931_

In

industries.

new

however,

fied,

Total

Imports

of

immediate

an

Total

Exports

2930

has decreased

thermore,

9.2

beginning of the depression
of the 1930s,, total foreign trade

lars.

from abroad

come

of war, and, fur-? materially. Thus, her need to in¬
machinery and goods crease actual exports in the post¬
destroyed by the ravages of war war period will be greater than
9.6
will be needed abroad for reha¬ ever. Our exporters must be pre¬
with bilitation
purposes and for
the pared for keen competition from
the

9.0

the

lar

'

.

as

war¬

to

be levied

is over,

after the emergency

for the high cost of gov¬
operations, amortization

that

but

source,

that

fact

the

overlook

must

we

we

not
have

competition from Great
Britain in the past.
It has been
clean competition, however, and
is vastly preferable to the un¬
scrupulous type of competition of
previous years that, barred many
American exporters out of good
markets and eventually left cer¬
tain of our Latin American neigh¬
bors
and other
countries with

had

blocks

large

worthless

of

aski

made

vast

has

Canada

marks.

strides in her numerous
as

a

industries

result of the necessity of sup¬

plying herself and allied nations
with material for the prosecution

and will undoubtedly
world markets to absorb sur¬

convertible into

currencies freely

gold, both for domestic use and
shipment abroad. The success
of this or any other program must

for

finally on the adoption
general pursuance of sound
internal economic
and political

depend
and

budgets,

policies—balanced
sonable tariffs and

rea¬
trade regula¬

'

*

■ —

■

k

SEC Rules On Periods

For Preserving Records

i

,

adoption of two rules, pur¬
suant to Section: 31(a) of the In-,'
.The

vestment

1940,

Company; Act of

»

prescribing the) beriod or periods ':
for

books, and
shall be: pre-

which: irecdrds,"

-

documents )

>

other

avoidance of central bank served by registered investment:
other
persons i
and Treasury operations that in¬ companies-:!: and
terfere with the price reactions enumerated in the rules, was an-/
essential to the operation of the pounced oh :Apriii7 by the Secur- ;
ities and Exchange Commission, ;
gold standard and, in general,

tions,

governmental

„

policies

that pro¬
instead

business confidence

mote

No country can
have its currency ac¬
ceptable at a stable value in world
markets
unless its fiscal affairs

of

destroying it.

expect

to

which said:

:

c.

"Rule Nc31 A-1' is

;

"

■

C

applicable to '

registered investment comand to • every underwriter/
broker,
dealer,
or
investment
adviser which is a majority-owned
every,
oany,

under control, its price level subsidiary of such registered in¬
reasonably stable and its internal vestment company. The rule pre¬

are

is functioning smoothly scribes the period pr periods for
productively. If sound gov¬ which such persons shall preserve '
policies directed to¬ records, books, and other docu- '

economy

and

of the war,

ernmental

seek

ward

this

end

are

followed,

the

ments

that constitute the records

India, the U. S. gold standard can work success¬ forming the basis for financial
of
debt, supplies for liberated R. R., and China also will be com-t fully in the future as it did in the statements required to be filed
countries, adjusted compensation, petitors for world trade, but not past. A large part of the confu¬ pursuant to Section 30 of the In¬
pensions, hospitalization, rehabil¬ until after a lapse of some years, sion that exists with regard to the vestment Company Act of 1940.
itation, etc., very definitely do as their own internal demands problem of exchange stabilization
"Rule N-31A-2 is applicable to
ernment

constitute

a

burden on productive

plus production.

be

must

satisfied

first.

While

enterprise. Burdensome taxes not
only result in a loss of business
incentive, but, of greater impor¬
tance from the viewpoint of ex¬

period
previous to war were important
competitors in world trade, the

they eventually find their
into production costs and the
price of merchandise.
Granted
that some types of our manufac¬
tures always will sell abroad on

and

port,
way

quality basis, will we be able
in general to compete on a price
basis with countries having a re¬
a

latively small debt service or low
labor costs, or both?
This query
can
be answered only by actual

Germany and Japan in the

dislocations of industrial capacity
other factors

their

limit

national

will

importance

trade

for

an

no

doubt

in inter¬
indefinite

period after the war. We in the
United States cannot expect to get
more than our fair share of export
trade, for we must recognize
fact

the

prosperity as a
depends on the prosperity

that world

whole

of individual nations.

The future

of world

trade will

and

trade

due

to

is

recovery

the

fact

that

probably

the

simple

fundamentals have been lost sight
of

in

and

the

maze

of

complications

artificialities that has grown

every
investment adviser not a
majority-owned
subsidiary
of,
and every depositor of any regis¬

tered

investment

company,

and ;

principal underwriter for
up around them. From numerous
any
registered investment com¬
sources we hear of the failure of
pany
other than .a closed-end
the gold standard, when the real
company. The rule prescribes the
failure has been that of the

credit

either because of un¬
governmental policies or

structure,
sound

because

credit has been over-ex¬

panded to a point where for some
reason,

political

structure

or

economic, the

breaks down and

there

every

period or periods for which such
shall preserve records, ■
books, and other documents as are
necessary and appropriate to re¬
cord
such person's
transactions
persons

with

such

company."

registered

investment

,Volume 159

Number 4280

THE COMMERCIAL 8c FINANCIAL CHRONICLE

structed.

An

Analysis Of Post-War Trade
;v|And Business Prospects
and

finance.

The

report

follows:
1

Z. Income

BASIC TRENDS AND

I.

FORECASTS
This

first

preview of factors
in

detail

more

sections.

is

section

It

in

deals

ing trends which
lines of trade.

in

part a
to be examined
the succeeding
with underly¬
will affect all

It lis useless to try to gauge

the
post-war prospects for retail and
business

first

without

defining the underlying condi¬
tions likely to prevail after war's
/end.
Our two main assumptions

.

.

close of

fore

1944; in the Far East, be¬

the

close

of

1945.

We

say

"die down" because of the strong

possibility

either or both
wars
may be
won in
substance
and demobilization begun while
the enemy still continues a rela¬
tively feeble resistance.
2.
Next
fall's
election
will
that

strengthen the dominance of mid¬

it

will

speed.

Distribution Will

under

groups

the

Shift

influence

three powerful forces:

joint

action

ings

of

of

legislation
and
unionization the earn¬

unskilled

workers

of

(1) by the

have

and

been

sluggish

lifted

much

rapidly than the earnings of
competent workers;
(2) salaries
more

and

entrepreneur,

been

profits'• • have
(3) taxation has

curtailed;

absorbed the greater part
incomes.

Stated in

preceding reports as rea¬
sonable expectations are: 1. Large-scale warfare in Eu¬
rope
will die down before the

Thereafter,
up

Disposable incomes (after taxes)
have been shifting in recent years
from high-income to low-income

ClO-type

Military-Political Background

wholesale

ball

rolling.
quickly pick

The usual inference
comes

will

nearer

to

tion

its

approach

situation after the

we

Other

in¬

and

nearer

equality; but

soundness.

of large

is that

likely to create

seem

factors

different

a

war.

In the first place, a conservative
Congress, recognizing growing un¬
popularity of CIO unionism, may
put a stop to the practice of forc¬

ing all workers to

dues into
so,
capable

pay

union treasuries;
if
workmen, receiving

wages

pro¬

and give them effective con¬
trol of government, even if Roose¬
velt remains President.-

mass

conservatives

Con¬

in

gress

If

these

out to be

.

two assumptions turn
false, the four forecasts

which follow will have

to be re-*

vised.

are

These

stated

rather
of

most

ously

forecasts

here

dogmatically
for
been previ¬

them

of incompetents.
In the second place,

the turmoil
technological and economic re¬
adjustments after the war will
bring large gains to some persons
of

and

have

losses to others.

severe

In

the

taxes

discussed.

■

on

third

excessive
are likely

place,
high incomes

to be somewhat eased,

1.

Inflation

Will

Quickly

Pick

Up Speed

which

Of

prime importance is the
gathering force of inflation. The
reasons
for anticipating a rapid
hnd sweeping rise in prices after
the war will bear repeating:
1.

Enormous

cashable assets

sums

These

of

cash

and

(currency, deposits
bonds) will be in

and government

v

three

changes,
all
of
fairly probable, (1)

look

will' enlarge the

number of fam¬

ilies with small
low

$2,500

incomes—say, be¬
(at 1942 fprices); (2)

will reduce the number with

in¬

termediate incomes—say, between
$2,500 and $4,000; and (3) will in¬
crease
the number in the highmiddle

income
brackets
above,
$4,000.
This particular shift, we grant,
persons who have been taught that
It
saving is a social crime and that is so far only an hypothesis.
government
will
take
care
of rests upon the belief that newthem whenever they need help. dealism has run its course and
These sums constitute not merely will give way, at least in the early
potential but actual and immedi¬ post-war years, to a revival of
individualism.
The ' > alternative
ate spending power.
,
would
be
an
even
more
rapid
2. These people strongly desire
drift toward equalization of in¬
many goods which will be scarce
the

hands

of

tens

of

millions

of

for a year or two. Inevitably the
prices of such goods will start to
move

up.

3. Price control cannot conceiv¬

;

the movement.- Once
wartime support by the public
weakens, price control will be as
futile as was prohibition—except

ably

stop

perhaps on a few standard or ac¬
curately specifiable commodities.
4. When prices start to move up,
unionized labor will demand, and

get, higher wages. Rising produc¬
tion costs will then force prices
still higher.
5. Any distinct rise will gener¬
ate a popular belief that prices
are
likely to continue going up;
for inflation has been widely

lic i

pub¬

particularly by labor
unions.
Thus, fear will add its
powerful impetus to the buying
z e

d,

say,

comes.

In

the

event,

post-war

i

All

these combustible

elements

together canot fail to ignite, in
judgment. There may be a
period of hesitancy at the begin¬

cur

ning, but it
A

can

scarcely last long.

few

economists, to be sure,
fake the position that uncertainty
and unemployment during the re¬
adjustment from war to peace
will damp down the urge to buy
and perhaps initiate a wave of
deflation.
merit

Their

view

has

the

of

calling attention to a
probable state of localized depres¬
sions in war production industries.
But the

great majority of con¬
goods industries will be

passen¬

be

result

trading

will

be

to

extend

served

by all
kinds of retailers and thereby to
strengthen the pre-war trend to¬
areas

ward fewer and

larger retail out¬

lets.

Competion Will Be Intensified
A fourth forecast open to little
is that post-war competi¬

doubt
tion

manufacturers

among

rise to

will

level of

production is freely resumed will

period of urgent demand Tor
goods, especially durables,

a

many

powerful influence

a

sumers'

choices

and

on con¬

on

retail

trade.

seem

little farther ahead.
Industrial

attained

and

man¬

active,

be well able to




the

anticipated

need,
great

as

early

in

the

war.

The

number of discontinuances

10%,

and

of

Com¬

less

was

these

of

than

discontinued

less than 4% were

liqui¬

dated; the others for the most part
simply changed ownership. More¬
two-thirds of the discontin¬

over,

of

were

with

ployees.

very

three

Even

in

or

small busi¬
fewer em¬

automotive

re¬

were less
than 17% of the number in
opera-■
tion in 1939.

These

but all the evidence indicates that

percentages, it is true, do
measure the
impact of war¬

time restrictions since

subsequent

put

few and that

of

excess

domestic

was
43%; and of
manufactures, 29%.

in

consumption
non-durable

These

casualties
no

big

June, 1942;
have

gaps

been

have yet

been created for
occupancy

by in¬

coming retailers.
So

per¬

when

additional

are

Nevertheless, they plainly
a
strenuous fight for
sufficient sales volume in domes¬
tic

but liable to become

ment.

foreshadow

markets

to

war-built

keep
plants in operation.
•

Normal

suddenly an¬
noying whenever prices slide and
inventory losses threaten.
After

competition
among
the war, as before, the numbers
manufacturers of foods, clothing,
will. be largest and the rates of
home furnishings, household ap¬
business births and deaths will be
pliances, automobiles, and so on
will be, of course, resumed; but highest in lines with little capital
that is not the whole story. Mak¬ requirements—family-run grocer¬
ies and cigar
stands, bars, oneers
of
airplanes
and
airplane
man
filling stations, lunch coun¬
parts, shipbuilders, and ordnance
manufacturers, among others, are ters, and the like.
Retail establishments that de¬
known to be planning for vigor¬
ous
invasion
substantial
of
fields
already mand
showrooms,
occupied by established producers. yards, warehouses and stocks of
New products and new designs for merchandise, such as those deal¬
old products will be announced ing in automobiles, farm imple¬
in rapid succession.
ments, jewelry, furniture, building
At
the
beginning competition materials, and good-quality cloth¬
will necessarily center largely on ing and shoes, are naturally less
troubled by the kind of competi¬
securing
adequate
distribution
tion
that
springs up suddenly
through retail outlets and sales¬
Here

men.

ducers

the

enjoy

a

established

great

pro¬

advantage.

Yet

in the flux and turmoil, of
post-war revival of dormant busi¬
nesses

and return of millions of

young veterans to civilian life it
will not be impossible for new¬
to

required

open

up

or

distribution

create the

system

for

whenever
turns

first

the

economic

weather

sunny—only to wither at the
frost.

However,

these

even

stronger
not be

types of retailers
entirely immune./

A

realistic

forecast

into

account

the

will

must

take

probable

large
expansion of consignment and re¬
lated

practices

which

will

make

it easy and
for radios,

advertising, promotion, publicity,
trained salesmanship, and all the

tempting to open shops
household appliances,
some
kinds of home furnishings,
musical instruments, men's cloth¬
ing, and similar goods. In all these
lines, therefore, we expect, an in¬
flux
of
specialty retailers who
will

preference of consumers and
to
displace directly competitive
goods. The struggle will utilize

The almost universal

use

pri¬

vate
automobiles,
as
everyone
recognizes, has favored the larger

retail

stores

has

and

worked

against small neighborhood stores.
Super-markets and one-stop fill¬
ing stations are outstanding ex¬
amples. Even under the pressure
early

wartime

restrictions

automobile

travel, the larger
in

stores

tained

most

lines

on

re¬

RETAILING

IN

1947

main¬

merchandising

dependent stores
(excluding
chains) in 1942 compared with

(Reported in Survey of Cur¬
March, 1944.)

rent Business for

of sta¬

year

Overcrowded Lines of Retailing

^Large

is not inconsistent with the state¬

Stores

ment

Dry gods and gen. mdse
Shoe stores

153

158

158

Hardware
and

125

;

bldg. material

161

140

144

135

145

*With annual sales of $100,000 and over.

After the

war

and the immedi¬

subsequent period

of

recon¬

for¬

will

be

eagerly

quickly
outlets,

as

seeking national
their
goods
as
possible. Most retail

will

of

be

preoccupied by
The total number of retailers in* their
competitors. Their natural
1947
will
doubtless
be
much recourse
will
be to
adopt the
larger than in pre-war days. This practice of setting up new outlets

All

123

fields

coverage. In this way the largercapital lines of retailing, as well
as
the
small-capital lines, are
likely to become more than com-

distribution

Stores
kinds of retail business

the

practices of retail
stores' in this country after they
have passed through the war and forably crowded within one to
through the period of transition three years after war's end.
to a
Our remark above that
peacetime economy?
This
consign¬
section attempts to answer that ment
selling is likely to be more
question in the light of the an¬ extensive in 1947 is not to be in¬
ticipated developments sketched terpreted as a recommendation, but
in Section I.
On the strength of
solely as a forecast—a reasonable
our assumption of
an end to the
deduction from the known fact
Japanese War in 1945, we will that some thousands of companies

better-than-average rate take 1947 as the first
of growth, as
indicated by the bilized operation.:
following indexes of sales of ina

on

merly left to stores with broader
II.

What will be the status and the

of

encroach

in

Section I that the

trend

is toward

larger and fewer stores.
only that the trend Will
be interrupted temporarily after
the war by the entry into retail¬
ing of some hundreds of thousands
It

on

attractive

terms

which

will

leave

financing and merchandis¬
ing control in their hands.

—

ample, of gasoline, men's cloth¬
ing, shoes, tires, candy, and a few
other products—go so far as to
The

of men,

few of whom will

possess

the combination of resources, store
location and personal ability re¬

the

stores.

a

and

manu¬

made

through
However, this
by
tire
com¬

(chiefly

panies) was offset in the main
by a sharp turnabout by oil com¬
panies

from

away

owned

company

-

and

operated filling sta¬
tions and toward
company-owned
stations

leased

operators.
was

but

to

independent

The last-named

•

partly the
legislation

chain

result
in

move

of

anti-

States,

some

also motivated

was

by a rec¬
ognition that retail establishments
are
generally better managed by
who

men

are

working for them¬
whole, we can find

selves. On the
no

to

reason

expect any marked

after

the

in

war

the

small

proportion of manufactur¬
ers' output (2.8% in
1939) sold
through their own stores.
On

the

guidance
and

become
in

other
of

hand,

retail

effective

merchandising

selling by manufacturers has
and

more

recent

more

and

years

common

will

almost

certainly spread in the post-war
period.

One potent cause will be
intensified
competition
re¬

the

ferred

to

tion.

in

the

preceding

sec¬

Nothing less than the

best

methods of local
retailing will be
good enough to assure a manufac¬
turer that he will
get his full
quota
And

of

the

product
be

available

best methods

line

or

defined and

those

most

for

of

business.

given
products can
any

installed only by
interested in

vitally

such products.

The

degree

tical for

of

guidance

manufacturer

a

prac¬

depends

principally, though not wholly,
his

percentage

tailer's

total

retailer

is

agent for

share

of

on
re¬

When

volume.

the

the

exclusively

sales

a

one

manufacturer, as is
generally
true
of
automobiles,
gasoline, oil burners, stokers, and
other sizable appliances, the man¬
ufacturer usually finds it both
necessary and profitable to fur¬
nish detailed plans for showroom
or
station
arrangement,
analy¬
of

ses

the

local

market,

display

and promotional

materials, an ac¬
system,
manuals
and

counting

conferences

sales

on

and

mer¬

chandising management, training
for

courses

retail

salesmen

and

servicemen, and frequent consul¬
tations with factory representa¬
tives.
All

these

miliar

activities

practice

manufacturers
mentioned
tion

for

as

progressive

the

need

lines
no

here

elabora¬

subscribers.

our

They
however,
forward to 1947, for

recounting,

look

we

three

in

the fa¬

are

of

and

worth

are

reasons:

*(1)

Numerous

new

products

will be offered by companies not

hitherto

engaged
in
marketing
goods.
Those
designed

similar
for

retail

excess

skilled

sale

at

prices in
will require
point-of-sale
promotion
of

$100

and selling, which can be
pro¬
vided,* as a rule, only by exclu¬

sive

sales

We

agents;

therefore,

sume,

must

as¬

considerable

a

expansion of the very close
facturer-retailer

manu¬

relationship

de¬

scribed above.

(2)

In view of the keen com¬

petition
be

Relationship

1929

proportion of
sales

their

growth

indicate

between

facturers'
own

retail outlets.

own

figures

census

1939 in

means

Closer Supplier-Retailer

lim¬

a

dency is toward acting as sales
agents for suppliers of well-known
products.
Some manufacturers
for ex¬

increase
stores

opened, we must expect consider¬
able overcrowding—not
especially
noticeable perhaps in 1947 when
rising prices will still be main¬
taining a mirage of easy profits,

centages might be reduced by a
vigorous policy of foreign invest¬

To

characterization

But a review of all
lines of retailing furnishes
ampleevidence that the stronger ten¬

slight- growth

estimates,

estimate, stated in the report
of January, 1944, of capacity out¬
manufactures

this

maintain their

Department

Our

durable

communities.

extent

correct.

cording to

not

of

ited

among retailers in the two years
ended in the middle of
1942, ac¬

a

version and readjustment, there
and their employees will will unquestionably
be further quired to run~ a successful retail
spend freely. That improvements in transportation. business. Their ventures will be
will be quite enough to start the
More
highways
will
be
con¬ stimulated by the efforts of com¬
sumer

of

productive capacity far
above any reasonable expectation
of post-war civilian consumption.

Broaden Trading Areas

ate

extent

tailing discontinuances

facilities

devoted to munitions have

power

3. Improved Transportation Will

Lumber

was

varied forms of sales aids.

viously, the prospective shift will

All

The

war.

nesses

the

1939.

actually
needed to replace pre-war retail¬
ers who
dropped out during the

uances

different from either the pre-war
or
the present distribtuion.
Ob¬

of

A few of them will be

which will be in short

supply., At
merchandising
may
to be an easy task. But look

increasingly filling the role of
independent "purchasing agents"

is

the

outset

as

average many years, most of them
will still be in existence in 1947.

concerns

a

possible. Though the

as

gans which represent retail stores

for their

The first few months after civilian

their goods. Then will follow still
more
intense competition to win

have

quickly

merce

a

into

life expectancy of these post-war
entrants -into retailing will not

intensity beyond
any previous experience. This may
not become immediately apparent.

be

breaking

are

fields to acquire distribution

new

as

4.

which

panies
as

1933

however, is not nearly

distribution of incomes among in¬
come
classes will
be
markedly

tail

movement.

the

comers

either

Railway

will

trucks

speedier,
cheaper and more comfortable.
Air
travel, in part by private
planes, will be popularized.
A

ques¬

portionate to their individual per¬
formance, will quickly establish
a
broad gap between their earn¬
ings and the earnings of the great

dle-class

service

ger

and

cars

will be operated.

natural

(Continued from first page)
homics

More

now

advisable

in

prospect,

for

it will

manufacturers

The anticipated growth of con¬
signment selling is one phase of
a
widespread trend toward more

of many products which form im¬

direct and closer

the

dealings between

manufacturers and their chief re¬
tail outlets. The trend is at times
denied

vigorously by

retail

or¬

portant

segments of their retail¬
ers' business to develop somewhat
same

insofar

as

concerned.

kind

their

of
own

They

(Continued

relationship
products

will

on page

have

1934)

are

ta

have

An

Analysis Oi Past-War Trade

to families in the upper

farm implements,

tion

such

in

lines,

complicated by

from

back

production

war

rural

to

popula¬

of

and

areas

to the centers of civilian produc¬

As

tion.

earlier
the

organized.
Increasing
diversification
and adaptability of manufacturing
companies will be one outcome of
their conversion to war and re-

be better

war

Pacific

(3)

pointed out in

was

an

report, the gains during
by the Southeast and the
Coast are likely to be

held

in

tion

cannot

part; but

a

like observa¬
with equal
industrial

be

made

of

confidence

the

to
peace.
In metal-working regions of the
Atlantic Coast and the North Cen¬
their production of
tral
States.
Each city has its
new
goods or their purchase of
distinct problems which requires
other companies will enlarge their
proportions of the business done special study; for its fortunes
after the war- will largely deter¬
by their retail outlets. The num¬
mine the
prosperity of its re¬
ber of companies in position to
create
closer relationships with tailers.
conversion

retailers

well in excess,

will be

Chain Stores Will Grow

corresponding

believe, of the
number before the
we

war.

houses,
25%

lationship is limited, it should be

department stores, each 50%;
and drug stores, each
25%.
Other
lines
in
which

separate small
items or to products that are sold
only occasionally by a typical re¬

in

bile

of

to

Infla?

tion will lift all of them to levels

much higher with¬
substantially
altering their

which may be

relative buying power.

The fore¬
cast does not imply, of course,
an
overnight change, but rather
a
gradual, almost imperceptible
shift.
Nevertheless, it can have
far-reaching effects on.retailing.
It will bring fresh customers to

the stores that cater to the $25 to

of

week class of trade and to

a

suppliers of necessities and
cheaper grades of house¬
equipment and semi-luxu¬

the

hold
ries.
to

It will raise

promotions

moderate-priced
that

cater

to

unseen

of

obstacles

good-quality,

goods by
low

materials yards which *
furniture and floor- *
coverings; and in hardware stores •
which are moving into household
equipment and supplies,
All these
additions to former
being studied by other retailers. lines have" been stimulated by
Super-markets, originally limited war-time shortages; but'it is far
strictly to groceries and meats, from certain that they will disr >
merchandise.
The
proportion is much larger
in many stores, particularly units
of progressive chains.
Now the
druggist's lesson is

widely different responses to the

stores

It

middle-class

is

store

people.
It will give strong sup¬
port to sales of jewelry, tailored
clothing, the better-grade cars,

evident
sales

that

have

though chain
consistently re-

ponded to gains in disposable in¬
come,

independent

store / sales

(see the report for
have placed such
income, after deducting savings
as well as taxes, at $82 billions in
1942 and at $95 billions, on the

1944)

January

here and there appear with the coming of peace.
paints,
hardware, Wherever stores become known to?
household supplies and whatever the public as purveyors of some in
else their customers might take new merchandise, they will pre¬
up
from $14 billions in 1942 to
War restrictions have sumably find it profitable to con¬
about $15.5 billions in 1947. How¬ with them.
interferred with carrying through tinue to push it; indeed, they may
ever, our tentative forecast of a
downward shift of many middle this line of experimentation to a be forced to do so as a defense:
definite conclusion, but most re¬ against the inroads of other mer-:
incomes, if realized, would mean
chants into
their former fields.^an
added gain by chain stores, ports on it are favorable. '
Filling stations, too, are being This is one phase of the general,!
possibly to a height of $16.5 bil¬
converted into general stores car¬ trend toward "mixing" lines. It is
lions, or 18% above 1942.
rying
such things
as
sporting also a phase of the trend toward;
Independent Stores Will Grow
goods,
raincoats,
toys,
work larger stores which can attract/
More
clothes,
paints,
household sup¬ more store traffic and step up the.

medicines,

.

plies, and so on.
This move, too,
experimental but looks promis¬
ing for stations that are well
located for such business.. It will

recent

in

sales

retail

Total

PERCNT

25
24

/

CENT

2 5-3

£3,4

22

22
2.4

27 4

PER

2Z.81
?

72

4

4l.5
33

Source:

35

Survey

3b

7

38

40

31

of Cur rent Business,

41

42

43

February 194L

out

by General Leonard P. Ayres,
60% of national
income.
Dr.
Paul H. Nystrom

up

applied the first-named per¬
centage to an assumed national
income of $135 billions after the
war
and thus arrives at a Tore-

stores,

1

obviously

methods

Both

are

will be

the accumulation

of

consumers

dis¬

than

produced in

was

1919-20."

"Convenience

New-Type

of

the

three

underlying
in

discussed

ments

break

to

up

the

develop¬
I,

Section

estab¬

long

between

boundaries

merely

'45
—•

Mail-Order House dales-

DISPOSABLE INCOME OF INDIVIDUALS

(BILLIONS OF DOLLARS)
70
fiO
40
Survey




of .Current Business,

100

II0

February 19^

110

30.

generation
too

living for
by filling

observed

drug

numerous

to

themselves'

for

trouble

additional/

store

the

giving

Furthermore,

revenue.

More Self-Service;

More

practicability

assortment

of

of

"con¬

carrying a wide
They will

Labeling;

More

Advertising

department stores, variety
stores, hardware stores, and even1
furniture
stores
the practice is>
In

growing of letting customers wait
themselves.
Super markets
and mail order catalogues, as twb

on

strated the preference
ers

for self-service whenever they

are

buying well-known or stand¬

ardized
The

or

clearly explained goods.

principle

much

more

can

be, and will be,;

widely put to use. Nor

is this merely a

by-product of the:

Writing in 1941, Prof. Jofyn,

war.

Wingate, of New York Uni-^
versity School of Retailing, pre¬
sented clearly his observations up

W.

that time:

to

/

•

-

j

"Probaly the outstanding trend

retailing is
of limited-ser¬
vice stores, departments, sections
the selling side of

on

the

development

and counters.

not

Limited service

em¬

cash-and-carry
systems, but also self-service and
braces

semi
.

.

-

self

great

-

only

service arrangements^

women's ready-to-wear

In

.

wares.

enjoy great advantages of largescale purchasing which will en¬
able them to advertise attractive

amply demonR
of custom-;

have

examples,

successes

ciple.

have

been

self-service

-the

about

built
prin¬

druggists,

that

people

for prescrip-.
usually gaze about
and
frequently buy something
else. Out of the observation grew
in the course of years the medley
of merchandise unrelated to med¬
icines
described as
"drug-store
items"—small
articles
of/ con¬
were

waiting

would,

venience

which

customers

are

glad to pi^k up, once they know
to fihd them.
Before the
war

the

bargains

; j

...

progress

be

"mixed"

average

sup¬

Nevertheless, substantial
will be made between
doubt

no

more

many

outlets than are

ing today.

labels

that

tell

the

customer

druggist

got

at

least everything the average sales¬

would know about the ar¬

person

ticles.

For example, one store

has
of every
operat¬ type of skate lined up and chained
to the fixture. A clear, detailed
informative label appears at the

In that year there

and 1947.

will

sometimes

is

than

slower

posed.
now

special

in

Some Parallel Changes

»

a

long fixture with

back

of

each

one

sample

.

;

.

When

the choice is made,
a clerk is
underlying develop¬
available to procure the desired
ments named above are bringing
size and
consummate the
sales
about
well-defined
changes in
transaction.
other retail establishments—some
"Informative labeling is an in¬
of them changes parallel to those
in groceries, drug stores and gaso¬ tegral part of the trend toward

The

same

...

.

prescriptions,

where

FIGURE 2

ultimate

venience stores"

lines

their owners

Some of the more acute

who

'42
hairi-Sfore and

became
a

tions

Source:

and

more

along

*

earlier

an

however,

Ratio S cole

dis-

surrounding

the

buy

"The most important develop¬
items.
Our
ment in the self-service direction
expectation, however, is that the
in department stores is the dis¬
New types and methods of re¬ process of building up depend¬
tailing are visibly taking form able trade in merchandise alien play of samples of every style in
stock accompanied by informative
under the combined influence of to
their regular lines will be

yield

feO

on

to

Groceries, drug stores and filling
stations are the chief points of

sipated in paying higher prices—
with no more actual benefit to

stores

KCLATI0N5HIP OF RETAIL SALES TO DISPOSABLE
INCOME OF INDIVIDUALS

well-stocked

most
branches are so situated that they
with furniture, dincan provide free parking for cus¬
nerware, clothing, sporting goods,
and other merchandise. Goodyear tomers, which is no longer prac¬
ticable in downtown stores, there-:
and Goodrich have similar plans.
by encouraging one-stop, cash-;
All these projects
are efforts
and-carry buying.
to cash in on
customer traffic.

rough, yet are helpful in
forming a preliminary view of re¬
tailers' prospects. In our opinion,
the lower estimate is better based
in that it makes allowances for

In

J1CL

siderable

sold

very

lished

Ind.epe'nde-nt-Sforc Sales

up

than one item
each visit, thereby saving con-*

rict

in which tires and other
rubber goods,
oil and gas and
automotive
accessories
will
be

$75 billions of retail sales.

cast of

in

tomers

in part of company - owned
stores
and in part of franchise

has

of retail trade.

AtL

of retail outlets, made

sive chain

between 56% and

be

FIGURE

setting

stores by

as

namely: redistribution of income;
improved transportation; intensL
fied competition. One conspicuous
effect of these developments will

21

21
1124

Another

decentralization

branches in suburbs or in outlying
74% in 1941. Applying probably be confined to the larger
the upper 15%, about parts of big cities. At first glance?
the last-named percentage to $95 stations,
do half the total this may appear to run counter to;
billions of disposable income in 36,000, which
the long-term trend toward fewer<
1947 gives a total of $71 billions business.
The
principal tire companies and larger stores; but it is in fact
of retail sales in that year.
Alternatively, up to the out¬ have gone past the experimental simply a special application of
break of war, retail sales held stage.Firestone in
particular the trend. The branches are large
with fair consistency, as pointed has announced plans for an exten¬ enough, as a rule, to enable cus-.

high

as

Stores"

2 4.4

s24.5

size of sales checks.
parallel change is the,
of
department

average

is

have varied from as low as
60%
of
disposable
income,
as
above defined, in 1936 and,, 1937 to
years

Rise
?b

~"\.as Percenfoaes of all Retail dales
25

2?

adding

are

introduced

have

price level, in 1947. If chain
sales respond as they have
the past,
they should move

I

24

general

store

'

JEIAJL

CHAIN STORE SALES

Zb

in building

latter

the great increase in tax burden, frequent contacts with both men
(see Figure 1).
which will certainly reduce the and women buyers, and the idea
Only in the depths of the 1933
of making it easy for them to
slump, when their ratio rose to spendable portion of national in¬
•'
purchase other items besidds'those
27%, did they vary much from come..
If we take $70 billions-as a they came for is plausible.
their fixed proportion.
As the
Two obstacles, however,
h&Ve
conservative guess and dedupt the
Commerce study explains:
to be overcome: (1) selection of
"Year-to-year comparisons re1 $16.5 billions suggested above for
chain stores, we have left $53.5 supplemental merchandise which
veal that a larger proportion of
sells itself on sight and is not too
the consumer's dollar is spent in billions for independents, a fig¬
ure
which is
22%
above their readily obtainable in other nearby
chain
stores
during periods of
curtailed income than in more total sales in 1942. A gain of this stores; (2) making the retail out¬
size is not an extravagant hope— let known to the public as the
prosperous years when, with more
indeed, is no greater percentage¬ right place to go for the added
money to spend, buying tends to
items in its stock. The second ob¬
shift more to merchandise in the wise than was actually obtained
in the advance from 1939 to 1941. stacle is greater than is commonly
higher price brackets and to lux¬
Even now, after dec¬
Bear
in
mind
that
we
are recognized.
uries
not
available
in
chain
ades of experience, few custom¬
stores."
"
'
speaking throughout in terms of
1942 dollars; also, that we give lit¬ ers have more than a hazy notion
The relationship of chain store
of the immense variety of mer¬
sales and
of independent store tle weight to the $100 billions,
chandise offerings of large drug
sales to disposable income of in¬ more or less, of accumulated sav¬
stores.
It will take a lot of edu¬
dividuals is chartered in Figure ings to be in the hands of individ¬
uals at war's end,
except as a cation to get people into the habit
2
(adapted from the Commerce
of going to the grocery for toilet
study above referred to).
In this potent stimulant, creating illu¬
sions of wealth and breeding in¬ goods or to the filling station for
diagram the years are arranged
neckties.
not
in
the chronological order flation and ultimate distress. To
We do not mean to question the
but in order of volume of income. repeat a previous statement, "most

please

dollars.

retail sales has been re¬

total

two-thirds

other

the

from his fountain and from sales

expect

to

elry stores which are reaching out
for a greater assortment of - gift"
items and even dress accessories;

markably steady

a

figures,

.These

period

year

1929-1943 the ratio of chain sales

portionate fall in the number of
families
in
the
$2,500 - $4,000
note, are in, 1942

*

15

the

Through

widening gap between family in¬
comes
below $2,500 and family
incomes abbve $4,000, with a pro¬

bracket.

home furnishings, and res¬

taurants.

Profits

presented a tentative
forecast
(dependent on a post¬
war
decline of newdealism and
individualism)

are

of Commerce, are automo¬
accessories,
lumber,
hard¬

ware,

Section I

the

a

ment

tailer.

$50

important, as recorded
recent study by the Depart¬

chains

applicable to

of

Their

sales.

of clothing

department or line of goods
handled by their retailers.
It is

revival

retail

and

tinct

out

all

of

proportion of the grocery trade
is 40%; of sales by shoe stores

noted, to the manufacturers who
have important segments of re¬
tailers' business or of some dis¬

Best Fields for Retail

including

sales,

sales by mail order
now
constitute
nearly

catalogue

expectation of a generally
closer manufacturer-retailer
re¬
The

not

store

Chain

reason

no

of

cases

many

medicines;
is

There

1942

is

movements

away

centers

nearly uni¬
and it will

1947 it will be more
versal

outlook

The

probable

branded
floorcoverings,
and so on. By

clothing,

strata of

the middle class.

policy of the leaders in

foods,

furnishings, and
the other goods which appear

houses and home
all

about one-third of his gross from

respon¬

Our estimates

(Continued from page 1933)
guide dealers in their
displays, local promotion and per¬
sonal selling of the products if
they are to hold their own in the
intense
struggle for consumers'
dollars.
This has long been the
and

more

even

sive.

larger total of disposable income
of individuals forecast for 1947.

And Business Prospects
aid

proved

Thursday, May 11, 1944

FINANCIAL CHRONICLE

THE COMMERCIAL &

1934

.

r

while other self-service. The label can tell all
counteracting.
The the typical salesperson knows
rest of this section will treat the about the goods and do it more
two kinds of changes separately. accurately and more convincingly,
An
obvious
parallel
is the because of the authority attached
broader
range
of
merchandise to the printed word. But even
taken on recently in such diverse where salespeople continue to be
line

tire stations,

or

changes

are

operations
stores

price lines

are

raising

instances

with

important factors in retail dis¬
tribution, the label still has its

_

hardware
household appliances; in jew¬

some

and

variety
their
and experimenting in
certain

as

which

place in acting as a prompter for
the clerk.

"The

reasons

for the growth of

i

Volume 159

THE COMMERCIAL & FINANCIAL CHRONICLE

Number 4280
The

| Self-service are not hard to seek.

) The
1

increases

method

reduces

and

both

expense.

sales

The

...

customer

is much

buy

than he intended if left

more

alone to choose from
sortment

,'.Mt
1

likely to

more

a

broad

as¬

temptingly displayed."'

seems

that

inference

safe

a

Wingate

does not have a high
! opinion of the quality of salesI manship .commonly found in re^ tail
stores.
We may add to his
comments that the situation has
been

not

clerks, which usually in¬
volves violent opposition to
all
attempts to provide training out¬
side store hours or to recognize
'

in any way to
suggest the slightest effort by the
salesperson to develop his or her
superior ability

or

| capacity and performance.
i

inevitable

response

tude

be

must

The
atti¬

this

to

reduced reliance

a

personal selling in those de¬
* in
which it is non¬

on

which

of

dollar

they hoped to salvage half, only
one has thus far gone out of busi¬

(a

plain, by more specific and fact¬
store advertising.
Otherwise,
customers who desire the partic¬

ual

ular

goods

and

sufficiently

are

interested in them to read the in¬
formative

will

labels

not

at¬

be

Similarly in most lines of

Moreover, the goods themselves
be publicized by national
advertising of a similar type.
Otherwise, customers will not ac¬
cept the goods with full confi¬
•

must

dence.

is

There

good

reason,

vice

women's

of

manufacturers'

of

•

Some

Changes:

Counteracting

More Specialty

Departments
and Stores; Higher-Grade
Salesmanship

The

preceding forecast of post¬
changes in retailing has- been
concerned solely with standard¬
ized and widely accepted goods
which have little need of pointwar

of-sale

explanation. For the most
part they are mass market items
produced in large volume and
sold to all classes of the popula¬
tion throughout the

country.

However,
if
our
hypothesis
holds true that there will be post¬
shifts

war

of

large fraction of

a

$4,000 income families,

$2,500 to

to lower brackets and some

some

follows that we
for another quite
different type of retail expansion.

to

prepare

alert

circumstances

these

Under

exceptional

retailers will find

op¬

portunities among the well-to-do
—not merely the few persons of
great wealth who may still be
loaded

down

crushing

with

indicate

that

handling

same

this

of

conclusion

information

industries

and

in

as

dealings
in¬

some

with government.
Still Dominated

Trades

By

Wholesalers,
It

not

must

the

overall

be

from

assumed

record

cited

above

that wholesalers in all lines have

on

been

losing ground. On the con¬
trary, in some lines of trade they
dominant

as

vey

1942

as

A

ever.

the

war,

In

short,

the

General

As is

well

as

of

Cent

rectly

and

sold

15

to

to

retailers

of

relatively

If the retailer

unreasonable

an

amount of time and expense,

both

other

than take

chance that

a

wholesaler
them

might
vigorously

as

not
as

a

promote

some

com¬

petitive product."

ored

c

biles,

1

o

t h i n g

than

Own

retail

Made

1929

to-

1939

21.7%

23.8%
19.9

32.8

__

1935

17.5%

21.1

L—

offices.!—

26.2

26.5

:

wholesale

__

;

—

—w——

stores-

68.3 %

—

70.2%

69.0%

■

27.5%

__

26.4%

2.4

__

.

2.3

1.8

__

—

retail

at

and

quality and
•

These

terest

some

are

to

Total

distinction.

direct

sold

abstracted from the

Census Bureau

on

Manufacturers'

articles of special in¬

wideawake

business

2.3

story.

■'

25.2%
2.8
1.8

for they mean large-unit sales at
a good profit.
Mass market items,
on
the other hand, will be sold
mostly in * small units' at sharply

The 6%

competitve prices
which leave
only a narrow margin. Some re¬
marks on this subject in an ad¬
dress last fall by J.
J. Thursh,
Controller of R. H. Macy & Co.,

tells

facts to

the

makes

plain that
during
proportions

wholesalers

food,

a

an

problem
how

high to yield

level sufficiently

.Mf past ex¬
criterion, the in¬

adequate profit.

perience is any
crease

offset

will

the

not

drop

..

be

in

sufficient
gross

to

margin

direct.

of total business lost by
was more than offset

The chief losses by
from

is

sold

increases

facing

primary

merchant

the
and

in manufacturers'
sales through their own branches
and to retailers without passing
through intermediaries.

by

1929

to

1939

wholesalers
occurred

in

paper,
chemicals,
and both ferrous and non-ferrous

apparel,

metal

products. Sizabl^ gains in
wholesalers' percentages of busi¬
ness
handled appear in products
of

29.8%

foregoing

are

the

key

keep in mind in apprais¬

the

post-war

outlook

for

wholesalers.

petroleum and coal and in
transportation equipment, except

Minor Losses During the War
In

wholesalers have
come
the trials of the
wartime economy with flying col¬
ors.
Food, drug and dry goods
firms

general,
through




riod

strengthened

reported
to
their finances

their

relations.

are

trade

Institute
comments

of
as

Food

be

carried

tions:
more

well

sales

prepared

the

might be

to

Should

costs.

as

enlarge
not

we

con¬

whole

a

to fall?

bound

are

No, the question before us is
for wholesaling too complex to be answered by
own
branches, citing isolated
cases, which may

plans
their

loss

a

of

25%

only that one company is
going to forge ahead of competi¬
mean

tors.

ol

of

the

convention

a

Grocery Manufacturers of

enterprises,

managed
the

account

tightening up of territories; min¬
imizing of price-cutting; an im¬

of

some

and

them
not

some

entire

range

of

so

con¬

sumers' desires and their responses
to
sales stimuli.
To
make
the

to 50%

it

question

explicit let us put
Will distribution in
representa¬ the
post-war
economy,
take
a
tives will no doubt be replaced,
larger or smaller proportion of
but it will take considerable time the total
energy devoted to pro¬
to find and train their successors.
ducing and selling goods?
In view of this state of unread¬ Distribution Costs Before the
War
1941.

of the staffs employed in

this

more

way:

Manufacturers'

,

iness

the part of

on

many manu¬
to ^assume the functions

facturers
of

their

wholesale

distributors,

coupled with the anticipated post¬
increase in numbers

war

retailers

expansion

of

new

the

and

probable rapid
sales
of
durable

of

doing

larger

a

to

sure

which

from

for

housed

To

illustrate

the

point, certain

have revealed extraordinary vari¬
ations in the actual wholesale costs

benefit

the

of

small

tend

not

and

more

more

wholesaling.

But

likely development

a

first

two

three

or

years

after war's end.

WILL

IV.

•

Trade Ways surveys for the con¬
fidential use of client companies

In other lines manufac¬

will

the

commodities—

the purpose of the in¬

many

to do their own

of

information

of

producers of
serving different types of re¬
be assembled and ware¬
tailers and in the actual selling

retailers.
turers

Com¬

far from sat¬

are

of

types

was

quiry.

to the few lines in which numer¬

items

sources

specific

there¬

ahead,

the

profit-andtheir files or

to the true costs of distributing

as

fore,
the
probability
is
that
wholesaling will gradually shrink
ous

These

isfactory

come.

farther

to

of

in

statements

Revenue.

in

operation.
In fact, they will be reinforced
by the great expansion and im¬
provement of air transportation
which is

available

consisted

facturers, wholesalers and retail¬
ers, supplemented by income re¬
ports to the Bureau of Internal

they can hold their
longer period is a dif¬
ferent question.
The same forces
decline

date

which

light on
Unfortunately, the

flickering

collected from cooperating manu¬

over a

their

Commission

of Distribution"

some

problem.

loss

Whether

caused

and Costs

throw

mission

than they did before the war.

gains

Federal Trade

given out in recent months
series of reports on "Methods

the

1947

in

business

t The

has
a

main

consumers' goods, our expectation
is that most wholesalers will be

COSTS

accounts

variations

such

to

ascertain

are

The only way

lumped and buried.

distribution

costs

of

products with any ap¬
proach to accuracy is through an
adaptation
of
the
established
methods
for
ascertaining
fac¬

DISTRIBUTION

LOWERED?

BE

a

♦SOME

costs, both at wholesale and at
retail, of stocking and handling
different types of goods. In ledger

specific

The

American

Demand for better quality;
economical
operation
by

into

it de¬
that sales forces in this
industry had been reduced to 40
veloped

Distribution

with planning,
post-war opera¬

take

entire range of busi¬

good; and it must also taken into

course

and

can,

must

answer

ably

fall

last

The

account the
ness

AVERAGE

COSTS

OF

tory costs—that is, by checking in
selected
sample operations
the

DISTRIBUTION

(Expressed in percentages of

OF MANUFACTURED

prices paid by ultimate

GOODS

purchasers)
Household

to food wholesalers:

into

of

some

clude, then, that distribution costs

Changes

Electric

Building

Cost

__.

com'l.

expense

*1

profit

Wholesaler's

.

expense

Wholesaler's

profit

Retailer's
Retailer's

tTires

59.1%
8.3

—

expense

_

profit

9-3
6.0
4.9
11.7
0.8
25.8
0.8

♦♦Miscellaneous

Ultimate

purchase

♦Abstracted
on

"Methods

otherwise
not

plements

2.1

2.9

§Farm Im¬

Appliances

49.9%

from

and

specified.

100.0%

prices
a

series

Costs

of

of

39.9%

52.0%

13.3

10.1

11.9

3.8

3.2

4.6

12.3

20.9

26.8

30.5

18.5

1.1

1.0

1.1

2.7

3.9

production
Transportation
Producer's

mobiles

40.7%

of

fProducer's

tAuto-

Lumber

,

"War has brought the following

changes that

are

their sales and cut their ratios of

question at the head of this
have section
is
constantly
discussed

transaction. We are, there¬ automobiles.
proved position for independent
The main reasons for loss were merchants
fore, left with the other primary
(only
a
relatively
plainly (1) improved transporta¬ small percentage have fallen by
means for raising volume—an in¬
tion and warehousing which fa¬
crease in the average sale, which,
the way)."
in my opinion, will be No. 1 in cilitated the functions of manu¬
Even
specialty
distributors,
(2) the whose lines were eliminated by
the post-war era. ... I visualize facturers' branches and
need, as previously explained, of conversion of factories to war
some radical changes in the mer¬
chant's thinking with respect to closer Contacts by manufacturers
production, have fared much bet¬
what belongs on the main floor of specialties and semi-specialties
ter than was expected. J. J. Nance,
and what belongs on the upper with retailers of their products.
Because of the war, correspond- vice president of Zenith Radio
floors—in terms of profit."
per

Post-War

estimated

this,is

variation

in

decade

sold

he will be
able to maintain sales volume at

i "The
the

little

wholesale

the

much to the point:

are

was

to

field."

have to
The

ing

there

31.0%

report of the^

•'
table

The

merchants;

31.7%

—

—_

Distribution of

Sales

of

given

opportunity

an

these

weaknesses that

profitably remedied.
Progressive managements in all
lines of business are right now
capitalizing the wartime disrup¬
tion of their sales organizations
by formulatng definite plans for
rebuilding on a sounder basis.
They will enter the post-war pe¬

1929-39 will be in full

-.—I-

users

Consumers

medium-priced

,

low-priced automo¬
other goods of real

company

war

and

common

review its distributive set-up and
to
prepare
for
keen
post-war

which

well-styled home furnishings, tail¬
father

the

that

Looking
Industrial

has

is

to

expense

analyze ter¬

small

methods:

of discussion of manpower

for the retailer and the producer.

rather

"the

GE

13

buy each item di¬
its manufacturer, it

require

the

official

sales

costs; over-solicita¬
or unpromising ac¬
counts; inadequate training and
supervision of sales forces; failure
to develop efficient sales tools and

attrib¬

remark

unnamed

an

America states that in the

hand, manufac¬
turers of specialties generally pre¬
fer
to
market
them
directly

jobbers

business

Total

Sales

items

from

would

Hence the

Distributed

Mfrs.

service

single store. 5

"On

Own wholesale branches qr
Retailers for resale
Wholesalers

stores--—.

of

attempted

ually losing the strategic place
they once held in the distributive
system. The accompanying table,
Per

a

interesting
to

disagreement
that many
have per¬

Neglect to

tunities

major

15

small Unit value must be offered

known, wholesalers

An
uted

of

follows:

in

of

report

30

i.„;

wear

number

distributors

at Issue

no

wasteful

up.

tion of

manufacturers' sales personnel. A

such staple lines as food,
drugs,
heating
and
plumbing
equipment and hardware, a large

1947

115

unim¬

an

ritories in relation to sales oppor¬

appliances will be affected.

has

"In

unit have been grad¬

a

—

stores

wholesaling
as

its

50

The survey summarizes the fac¬
tors which work for and against

Wholesaling From 1929 to 1939
taken

dealers

;

•;

clothing stores—-——

Women's

pile

as

35

1

Shoe stores

be brief.

can

bldg. materials dealers,-

vehicle

act

be

the

mitted

York,
Angeles.

will

Question

can

as

proposition
individual companies

such plans are being
considered, is the dearth of com¬
petent salesmen. Business Week

73

Men's

with

up

household

wherever

55

underlying trends and the
resultant changes in retailing dis¬
cussed in the two preceding sec¬
tions will be the governing fac¬
tors in the post-war development

section

of

through

Lumber

Family clothing stores
Motor

set

over
.

One retarding factor in manu¬

75

Furniture

of

to

Los

branches

new

85

Dry goods and general mdse. stores-

subject in this

There

New

in

and

Prospective

75

—

and

outlets

facturers'

80

;

Jewelry
Variety

The

the

General
recently

refrig¬
erators,
ranges,
water
heaters,
home laundry equipment, dish¬
washers, disposalls, and kitchen
cabinet equipment.
It was stated,
however, that the company does
not regard the move as a general
policy and does not believe many

90

Drugs

two

The

85

•

.

85

been

concerns.

hand,
has

decision

a

wholesalers

95

(with foodh

stores

goods —will elim¬

of

dealers

accessory

stores

appliances and supplies—
Heating and plumbing equipment—

full scope to superior
salesmanship in these fields.

treatment

The

other

Company

competition in the home appliance

Electrical

give

of wholesale

the

announced

95

Automobile

there is

HI. WHOLESALING IN

through
98%

inate, on the one hand, much of
the low-grade merchandising and
selling of pre-war days and, on
the other hand, will call" forth
and

bought

stores

Hardware

mass

distinctive

or

goods

Eating and drinking places

opposite
considering
marketing and to¬
ward individualized selling of new
have

we

of

Food

substitute for personal calls by
trained salesmen.

trends

by Dun & Bradstreet, Inc. in
among
2,600
independent

tages

appliances or
other home equipment are best
sold by inspecting the home and
making recommendations based
on
an
actual survey.
As to the
numerous new products to be in¬
after

On

Electric

sur¬

brought to light the follow¬
useful tabulation of percen¬

ing

electric

troduced

actually

are

Philadelphia,

stances

and pur¬

use

most

wholesale

with

rooms.

How this is to be accomplished is

usually slurred
portant detail.

factory distribution branches and

draw

to

the extent of wholesalers'

In somewhat

full

way

of

but

war,

of

making money."

whole¬

a

wholesalers.

the

indication

to

were

decorative schemes.

sur¬

taxes, but those who are comfort¬
ably able to gratify moderate in¬
dividual tastes.
They can afford
and will demand food delicacies,

up

stores

it

higher,

should

went

On its face-this might

absence

are

t—toward

brands;

sales

selling consumers' goods is 59%
highly doubtful figure) and

that it must and shall be reduced.

only show
weathering

in

well

advertising

the

gains
by 1947 in the amount and grade
of outside selling.
Home ensem¬
bles ' are best sold by going into
the home and advising on pleasing

no

with

every

retail

the

and the others not

ness

1939, whereas the dollar

,

We look also for decided

spread

to
expect
that
the
self-service will carry
it increased promotion and

higher

into

went

safe
the

manship.

therefore,

of

whole¬

56%

was

"ser¬

by

Zenith

with 76 distributors, of

larger pro¬
portion of manufacturers' sales to
retailers.
But it
would
not be

field for superior sales^

a

sales

"While

of

taken to

salers

re¬

and

wear

decoration

of

1942

only 38%.

emphasis x>n ensem¬
instance, on complete

for

in

in

volume

will be much

bles—for

volume

derived

and limited-function

salers"

be

estimates

census

than

trade, particularly women's
apparel and home furnishings, we
look for a large increase after the
war in the number of high-quality
specialty shops—stores in which
discriminating customers will find
both goods and sales service to
satisfy them. In these stores there

chase

tracted.

other

tail

This is

is

very slight
attention to facts. One hears again
and again that the over-all cost

war

essential.

adoption
of
self-service must be supported, it

with great fluency and

Corporation, is quoted to the following effect:

from sample returns show that the

promoting spe¬
cialty lines and departments as
complements to the mass market,
self-service; goods.
Specialty
goods are quite different, how¬
ever, in that they have distinctive
features which must be properly
presented; that is to say, they re¬
quire skilled and intelligent sales¬
manship.

outfits

have
However,

years

consist of

to

harmonious

extensive

ing figures for later
been
gathered.

not

partments
.More

1 prob¬

department stores, as in¬
in the quotation, would

dicated
seem

helped by unionization

of sales

to this No.

answer

lem for

1935

3.7

100.0%

100.0%

2.6

.

12.7

1.1

100.0%,

100.0%

reports by the Federal Trade Commission in 1943-44
The figures are for 1939 except where

Distribution."

These are very rough averages derived from financial statements

frqm cost records. tBased on a small sample of direct-to-dealer sales, apparently in
tour inferences from various unintegrated estimates of direct-to-dealer sales.

1937.

§In 1936 direct to dealer.
excise

and

sales

taxes

and

Source:

♦♦Includes
automobiles and

II In most cases includes administrative expense.

cooperative advertising

allowances

percentage unaccounted for *bs to tires.
Federal Trade Commission reports.

(Continued on page 1938)

as

to

I

1936

THE COMMERCIAL & FINANCIAL CHRONICLE

The Sou! Of America

More Dealers See NASD

(Continued from first page)

Conaughy of Wesleyan University
wrote: 'We are today witnessing
the twilight of the four year lib¬
eral arts college.' And now the
Army is in the process of produc¬
ing the twilight by closing the
doors of hundreds of colleges

ground

the

utility
and

Staff

have

belief

that

have

on

war,
General
declared their
the

of

even

colleges

arts

liberal

three

college which I should like
to explore today may be called,
the

fragmentation of the curric¬
ulum, intellectualism and social
irresponsibility.
By fragmenta¬
tion of the curriculum I mean its
the

breaking down into such minute
fragments that it has lost the core
of its meaningfulness to students
and to the American public.
'

"By intellectualism I mean the
a substantial major¬

NEW YORK CITY

have tried to abandon and get away

inventories, not only because of the hazard to themselves, but the
investors, through a very human desire to get rid of inven¬
in falling markets.
It is the unfortunate experience of investors that during the
1920s, when position trading and selling from inventory7 was the rule,
that the investor held the bag to as large an extent as it was possible
for the dealer to pass the bag to him. -A further bad effect was that
a
smart purchaser recognized weak issues, With the result that it
was the duimb investor or the trusting investor who was sold down
the river.
Of course, those in the business should be smart enough
to know that it will ultimately cost them a greater loss to pass inven¬
tory losses on to their clients than if they took them themselves,
entirely apart -from the ethical reasons.
There is a little matter of
tories without loss

human

nature, however,

which it is our belief will tend to cause
forced back into selling from inventories.

of American educators that
responsibility of education is
merely the intellectual training

Some years ago we were members of the "Investment Bankers
Association of America."
We resigned our membership because Mr.
Little of that organization summed up the basic function of members

of students rather than their edu¬
as a whole people, that, in
brief, the college is a mind fac¬
tory and nothing more. By social
irresponsibility I mean the irre¬
sponsibility of large numbers of
faculty
members
and
students
alike for the protection and de¬
velopment of our basic American

cation

institutions.
"The

fragmentation of the cur¬
riculum was probably unavoid¬
able

because

of

tremendous

the

expansion of knowledge that the
century has produced. Dis¬
astrous
results,
however,
have
followed.
Thus, for example, the
student going through college to¬
day is given a basketful of frag¬
ments, and the old synthesis and
over-all
understanding
of
the
appeared.

He

out of the

sense

merely takes

lives has

can't

dis¬

make

any

curriculum.

is that

We believe that this difference is basic and that

represent.

To illustrate my
point, and using figures which .are entirely
from memory, some time ago the SEC published figures to the effect
that the average profit from underwriting new issues of stocks had

been, for the preceding period, 13 and a fraction percent.
Those
companies who set out to find capital for worthy enterprise averaged
13 and a fraction per cent profit, whereas we who find worthy enter¬
prise for the capital we represent are limited to 5% and, even then,
if it is

the

opinion that

our

broad

he

is

but

we represent, we can then only take 3%.
As you can see from this memorandum, we are not

"5%

rule."

profit to enable

We
us

"This
of

degree.

a

kind

of

into

breaking down
smaller
and

poses, but it is ruinous for educa¬
tional purposes.
Nicholas Murray
Butler a few years ago, for ex¬

seller

of

securities

are

intensive

and

accurate

very

knowledge of a narrow field and
nothing more * can constitute a
liberally educated man is a gro¬
tesque absurdity.
Not narrow
men,
however keen, but broad
men sharpened to a
point are the
.

product of

school

and

.

.

sound

a

same

college education.'

effect. 'If

specialist,'

a

he

a

man

business

asserting

'it

observed,

vein

leaders

number of

a

have

also

themselves.

Six

Mr.

example,

been
years

A.

advantage
over
the
one
less
equipped.' Mr. M. S. Sloan, then
President of the Brooklyn Edison
Co., said on the same occasion,
'the utilities want technical grad¬
uates
who
aren't
all
technical;
they Want men with imagination
and the ability to learn and to
think.'
ten

thousand

between

turned from

1850

Americans

and

1914

it

skill
as
'specialists.
They
brought intellectualism, and they
saddled it upon the American col¬

lege.

German universities, after
crushing defeat' that Napolean

board

all

to

their

interest

(Continued

just "won't be

..J.NEW

in

fatherland
over¬

students

on page

1937)




any

market" for them.

YORK CITY

.

'

r

•'*

It is the retailer and dealer who in the final

analysis makes or
good/ lively secondary market, once the original under¬
writing and distribution job has been completed.
breaks

a

Most new issues of smaller corporations are brought out
orig¬
inally at price levels from $2 to $5 per share. A gross mark-up of 5%
in this price class would mean 10 cents to 25 cents.
Taking into

consideration

the cost of tax stamps ranging from 3.05 cents to 8
share, including N. Y. tax, not to mention clearance charges,
wire expense and general overhead, it can be clearly foreseen that a
retailer or dealer would have little, if any, interest to handle these
cents per

securities.

Nobody in the long run can afford to do business at no
for an inadequate return.
Leaving the dealer's interest entirely aside—how can the invest¬
ing public be served by a rule tending to ultimately dry up secondary
markets, thus impairing their ability to liquidate holdings purchased
through an original offering or, as the case may be, add on to them?
How can a security be seasoned enough in order to find its
way
eventually into the listed auction markets of the Exchanges without
profit

or

the existence of a free, orderly
and—last, but not least—profitable
secondary dealers'market.
NEW YORK CITY
I

disapprove of the rule because of the autocratic and undemo¬
manner

in which it

thermore, I do not

imposed upon the membership.
Fur¬
of the philosophy of minimum profits

was

approve

imposed by an association or by a Congressional commission. A 5%
profit would increase my earnings considerably, but for some it
would undoubtedly restrict their
the service

given to

many

earnings and lower the quantity of
investors in this country. It would restrict

the marketability of securities of small corporations.
I have never heard anybody ever say
anything good about the
NASD.
John L. Lewis could not have organized a better union to

large security
join to either do

business

"l

of

put

up

a

front.
NEW YORK CITY

Make it difficult and unprofitable to distribute over-the-counter
securities

through the small brokers and dealers.
NEW YORK CITY

The small investor will be

neglected also because it will prevent
following small accounts. It costs just as much to "clear"
$500 order as a $10,000 order.

a

Bad.

PITTSBURGH, PA.

Destroy

any market in

closely held

No opinion

thought out.

inactive securities.

or

Ultimately their absolute destruction.

Further limit the markets and interest in such issues.
I feel

NEW YORK CITY

low figure as there

can

be

no

after market

or

5% limit is liberal in most cases, but I think there are cases
newly formed companies or a speculative deal—5% would not
pay for the work in making a market for the securities.
such

A SMALL UPSTATE NEW YORK TOWN

It will stop

free economy competition should set the
tation can be handled by the
judicial system.
a

price.

PORTLAND, MAINE

policy rather than

the sale.

Misrepre-

(From firm favoring rule)
a

as

distribution.

NEW YORK CITY
In

rule, and we think the
adoption of this policy should be helpful.
We have been dealing
successfully in such securities for 16 years with a retail mark-up of
much less than
5%, and carrying an inventory risk at the same time.
a

ALBANY, N. Y.
It will

greatly decrease the marketability by very largely cur¬
tailing business and driving many dealers out of business—which,
very apparently, is the object of the NASD and SEC.
NASD dealers
is

a

misnomer

it is controlled

as

me

no

inducement

and

strangled by Stock Exchange

brokers—witness the officers—and the arbitrariness and uncalled for
abuse of small dealers.
The S. E. firms still
refusing to pay any
commission on business brought to them
(without expense) by O. C.
dealers—too greedy, too.

NEW YORK CITY

This rule affords

'

BUFFALO, N. Y.

The only effect this will have on the
security business as a whole
will be to eliminate the flotation of
companies which will have to be
a

f
:

NEW YORK CITY

NEW YORK CITY

priced at

«

(From firm favoring rule)

NEW YORK CITY

ALBANY, N. Y.
♦'

or

We

profit motive in such

distribution or offering; therefore, I will not interest
myself in any
offering regardless of the merit of the corporation.

believe it

corporations.

to

The

only market, excepting isolated instances, will be RFC or
some other Federal
Agency.
This would apply also to securities of
larger corporations if the Department of Justice, with SEC con¬
curring, rules against NASD syndicate price restrictions.
The only
other way out for large, and
perhaps some small corporations, would
be the organization by each
corporation of its own security market¬
ing department and sales force where the dealers and salesmen
might
get a job. This would, I believe, please the present administration.

will

retard

distribution of securities of smaller
Our business has always been getting out
among in¬
up gas, tires, etc., or wearing out shoe leather.
In
it was a mistake to ever admit Stock Exchange firms

vestors—using
our

NEW YORK CITY

opinion,
membership in the NASD.

solicit business
customers

are

NASDs, must

Stock Exchange firms do not have to
They post prices on a blackboard and the
continually buying and selling—speculation.
We,

as

a

rule.

carry our message to the
investor—many times at
actual loss—and sometimes at
very little profit.

am

NEW YORK CITY

(From firm favoring rule)
Should improve it.

NEW YORK CITY

as

LOS

Ruin them and take away any and all interest in them.

ent

administered

put into

was

re¬

brought back with them
something else besides preemin¬

early in the century, threw

in which the rule

NEW YORK CITY
If retained there

firms from

Europe with German

Ph.D's

the

manner

favor those in control and the selfish interests of the
firms.
Most firms are members because they had to

R.

with the broadest culture has the

"The

who

It will hurt the market of small corporation securities and make
harder for them to obtain financial
backing compared to large

is

Glancy, Vice-President of General
Motors, observed in a speech at
Lehigh University that 'the man

who

we

arbitrary

NEW YORK CITY

We consider this

same

for

ago,

are

is to be

civilized.'

"In this

profit than

greater

a

the

None.

most desirable that he should also

be

allowed

(From firm favoring rule)

system

Mr. Justice Holmes has written to
the

5%

NEW YORK CITY

ample, observed that 'the notion

of

that

feel

corporations.

compartments is emin¬
ently desirable for research pur¬

ideal

experience

represent the buyer of securities,

In

smaller

that

from

Our objection to the rule is largely two¬

One, we believe that it will force many firms to position
issues, with the resultant danger both to the dealer and his client.
Two, we are jealous of the fact that those persons who represent the

a

man.

subjects

know

to live.

worried by
is sufficient

fold.

He

century ago
pale imitation of an

a

educated

of

We

effect is the whole difficulty.

cratic

capital

the

College bookkeeping

sense

NEW YORK CITY

(From firm favoring rule)

New York listed stock is the best issue for

a

courses,

system he is given
the

a separa¬

tion should be made between those institutions finding capital for
worthy enterprise and those finding worthy enterprise for capital.

and when
he has accumulated enough course
credits in the

are

being "to find capital for worthy enterprises," whereas our belief
our function is to find worthy enterprise for the capital we

as

last

world in which he

I

effect, because no dealer can afford to spend money
on the promotion of
anything which lacks a broad market.
Nobody will be able to employ agents or salesmen in.cases where
5% will not cover all the expense involved. It should be at least
10% on all but the really "active" securities.

hazard to

trouble when, brokers

ity

A noxious

from the necessity of carrying

conviction of

the

Too low a limit would mean that some securities become
wholly
unmarketable; too high a limit would encourage chiselers to charge
more than they should
and, moreover, too look^ a limit would be
bound to result in bootlegging followed
by all the expensive and
ineffectual policing which always results in such a situation.

(Continued from page 1915)
probably stabilize values for more obscure stocks, in that it will
force the- brokers into position trading and so place their profit
mark-up on a basis of a "hazard transaction."
During the 1920s, one of the greatest hazards that the dealer had
Was position trading, in that he inevitably had high inventories dur¬
ing periods of market decline.
I believe that those in the business

no

peacetime value either
causes of decay of

no

"The

Rule

win the

helping

in

members

have

they

that

Mark-Up
Stifling Small Business

.

Thursday, May 11, 1944

Will affect it

NEW YORK CITY
In our

of trade.

opinion, this would merely

No individual and

no

prove

group have

PASADENA, CALIF.
another rule in restraint

enough wisdom to deter¬
profit. There is no magic in 5%.
Perhaps it should be 3%; perhaps it should be 10%.. Who knows?
And even if by accident the
proper percentage were determined,
then who is to say how
long that figure would remain the correct
figure?
Conditions change and with them the required
margin of
profit changes,
mine what per cent
represents a fair

ANGELES, CALIF.

adversely.

In

our

opinion, this rule will definitely affect the
marketability

of the securities of small corporations and could
very well eliminate
them from the picture entirely.
'
SAN

Not

so

FRANCISCO, CALIF.

good.
SAN FRANCISCO, CALIF.

There will be "no bid" and the "little fellow" will be

penalized.

THE COMMERCIAL & FINANCIAL CHRONICLE

Number 4280

Volume 159

DENVER, COLO.'

NEW YORK CITY

It will be ruinous in our opinion.

Have

,

be
.

.

no

opinion

.

this but don't think it will help.

on

adverse.

(Continued from page 1936)

CLEVELAND, OHIO

(From firm favoring rule)

A very serious

Speaking as one small dealer, I confidentially feel that a con¬
tinuation of the policy will not only have no unfavorable effect upon
our business but that the industry, as a whole, will profit thereby.

effect.
It will make it difficult for small com¬
panies to expand through financing.
It will also make their stocks
inactive

over

the market and thus reduce their popularity.

A SMALL COLORADO TOWN

considerably.

None—business will go into stronger hands and public benefited, I
believe.

opinion, the 5% mark-up rule will make the interest in
companies even more narrow than at present.
,

;

,

It will kill it.

':

v;v

Stockholders will be at the

mercy

counted.

spread of 5% if insufficient after the original offering.

to

ZANESVILLE, OHIO
necessary

blocks of local securities to have a

for individuals who

pick up
license to resell them locally at any
can

This is already being done around this section.
fearless fight for the small dealer. I would be
perfectly willing to contribute to any fund necessary to fight the
thing through.
I know other dealers would do the same.
price they choose.

We feel that it will seriously interfere with the market for the
securities of the small corporations and that it will
gradually put
them out of business.

Thanks for your

enjoy.

now

*

,

CINCINNATI, OHIO

Star-chamber proceedings to

eliminate the small dealer who is not dependent on

large firms.

The

effect

will

be

unless the profits are

very

big hands and then a big harvest for them resulting in little
distribution and a form of monopoly.
We should all resign from
NASD immediately.
A militant protest will do good—alone we can
do nothing but suffer.
I can take it.

as

dealers

no

will

be

interested

NEW YORK CITY

CINCINNATI, OHIO
r

The securities of small corporations can not be marketed
except
in exceptional extraneous cases on a 5% limit basis.
Therefore, the
small corporation would be overlooked and there would then be a
centralization of activities in large corporations.

,

shall

also

hardship is on the sale of stocks selling under $20.
This is economically disastrous when it is realized that stocks of
small growing companies and new venture capital companies are
Invariably in this price range.
;

CINCINNATI, OHIO

be

edu¬

wtih

other

young

Americans have risen'.with nobil¬

ity to meet the challenge of total¬
itarianism, one cannot today call
them socially irresponsible.
That
large numbers of them were just
that

before

the

however, is
"Both

war

common

because of

broke out,
knowledge.

the fragmen-

and

social

irresponsibility

of so many of
their college teachers and also be¬

Eventual chaos.

DAYTON, OHIO

of

cause

We believe it Will be quite a handicap,

of

the

spiritual shabbiness

self-centered

our

American

materialism,

NEW YORK CITY

vast
numbers
-of
them grew up with little interest

DAYTON, OHIO

'

obviously make for non-liquidity.

along

tatary-intellectualism

The greatest

It will

bad

large enough.

few

-

Of

socially, physically, morally,
spiritually.
They
require

dents

of small dealers out of town, putting business in a

up

forced

"Because American college stu¬

NEW YORK CITY

Closing

is

life

immediately.

upright, fine people and respon¬
sible, worthy citizens.

Think it should benefit it.

small dealers.

it

the

students

and

(From firm favoring rule)

PHILADELPHIA, PA.

of

them to be graduated not as auto¬
matic thinking machines but as

DES MOINES, IOWA

Bad.

doctrine

public supports col¬
leges and universities to give each
on-coming generation intellectual

cated

"

(From firm favoring rule)
None.

the

is

American

discard

course

that

CINCINNATI, OHIO

Why limit it to the smaller corporations?

on

acad¬

They considered

training, but parents, employers
and society at large require a very
great deal more. They require

CINCINNATI, OHIO
Destroy what little market they

NEW YORK CITY

Discrimination

the German

This

of

terms

Lawyers, real estate dealers and black market operators will
not

to

"Anyone who stops to think
seriously about intellectualism in

v

Will kill all local markets of small unlisted
companies.

create chaos.

it is

he

intellectualism.

CLEVELAND, OHIO

of

cliques of insiders of corporations who will make their own

believe

Where

cared.

or

In our opinion it will restrict the
financing of corporations, par¬
perior minds and they conducted
ticularly the smaller ones.
Competition will regulate the profit in
their universities as if nothing else
most cases, but in order to create a market for issues under
$1,000,000'
a

I

interest

no

EASTON, PA.
It will ruin the markets.

knew

their job to be the training of su¬

YOUNGSTOWN, OHIO

prices.

student did

a

lived, the condition of his health,
his social life, his physical and
spiritual growth—these were of
emic authorities.

CLEVELAND, OHIO

the market of small

It should be eliminated.

sities

(From firm favoring rule)

A SMALL OHIO TOWN

small

What

and the time he took his examin¬

NEW YORK CITY

CINCINNATI, OHIO

our

students.

ations, no one in German univer¬

It will curtail their market

In

and they consciously concentrated
all their energies upon the minds
between the time he matriculated

We shareholders will be at the mercy of the corporation.

Prohibitive.

*

individuals. They sought to raise
a
race
of intellectual
supermen,

of

CLEVELAND, OHIO
:

The Soul Of America

It should

-

HARTFORD, CONN.

.

1937,

In the interest of

pros¬

Will

affect

smaller

corporations

more

than larger corporations

in

anything

but

their

personal

pective security purchases this rule is hurting all present security

for the

holders.

and, consequently, fewer transactions.
It is harder to sell and re¬ small circle of family and friends.
quires more selling because fewer people are familiar with the Those with zeal for the public
smaller companies.
Those
with
a
In looking back over the 25 years which I weal were few.
personally have spent in this business, I do not thing the amount burning devotion to the improve¬
of spread either on new issues or issues traded in the market has ment of American life were rare.
The hunt for personal
been important to the purchasers;
security
;
pushed the responsibilities of cit¬
CINCINNATI, OHIO
izenship
into
the
background

It is the third attempt to

the first

the

was

force the small dealer out of business—
code, the second was the minimum capital

NRA

requirement.
NEW YORK CITY

.

(From firm favoring rule)
None.

that smaller corporations have less stock

reason

outstanding

fortunes and the comfort of their

„

CHICAGO, ILL.
A

shadows.

(From firm favoring rule)

irrespective of the merchandise he, is handling,
would be considered a poor businessman if he devoted his time in
selling, as well as his money in advertising an article on which he
did not receive a fair compensation in return.
Smaller corporations would be penalized to a great extent in this
merchant,

Not

•

serious,V they will still continue to find

dealers who will handle them dn

a

a

market

through

5% spread.

NEW YORK CITY

1

connection.

-'."v.'

■„

vA''

.CHICAGO,
^

The cost of distributing inactive issues of small corporations is
proportionately higher than that involved in large issues of nationally
known companies.
Sales resistance is consequently considerably
more
severe
and salesmen
must be
compensated accordingly in

making sales and obtaining capital to promote the growth of small
companies.
Therefore, an arbitrary limit of 5% mark-up may well
be

the

means

of

closing capital markets to many small growing
inadequate compensation to salesmen who
of procuring such needed capital in

corporations because of

an

have

means

always

been the

CHICAGO, ILL.

market for securities
also put out of business most of the
smaller dealers throughout the country.
Our rent was increased 10%
beginning May 1, postage is being increased, telephone calls and
stenographic help, stationery and, in fact, everything.
Our small
firm was incorporated in 1923, but I don't see how we can continue
been

the
for

necessary

for

the small buyer who will get

the run-around from the large dealer,
the preference going to the Ia/:ge customer.

corporations

5%

two

deal.

and

I believe this

arbitrary rule, like so many pieces of new legisla¬
tion, is stifling to a great many small dealers. The writer is not
personally affected by it, but he does not want to see the initiative
and enterprise of hard working, honest dealers
permitted to wither

One

member

is

in

the

Circumstances play an important part in all business deals which
rule-of-thumb code ignores. A dealer usually attracts business be¬
cause of the reputation he has gained
through satisfactory

armed

forces

and

has

fighting for our country and we two who are
left at home are fighting for our existence and right to do business.
I am not signing this letter for fear of reprisals if it should fall into

dealings

with

his

clients.

If

he

betrays confidence

or

grossly

charges,

over

he is doomed from the day he over steps the mark.
NEW YORK CITY
The

same

as

New Deal

regulations.

of business in favor of the large.

Drive the small

"

man

"

years

the hands of the

?

NEW YORK CITY
NASD

seems

out to kill the little

Can the NASD be forced to

put the thing to a vote of the mem¬
bership in accordance with the by-laws? It seems our only hope is a
Republican victory in November; then legislation to do away with
NASD and curb the powers of SEC.
You are to be commended for
your courageous

fight

on

behalf of dealers.

It

would

securities.
small

have

a

be ruinous.
marked

Salesmen

mark-up.
a

loss

cannot

afford

to

sell

low

priced

Ruinous.

on

After taxes and overhead the investment firm

after
i,

NEW YORK CITY

stocks

■

This will

a

may

do

un-

•

.

leaven.

(From firm favoring rule)
NEW YORK CITY

Will widen the spread between the bid and asked
almost eliminate small companies from the market.
NEW YORK CITY

Adverse.




prices and will

be

finer life remains to be

a

Of this

much

ade¬

seen.

I think, foe
certain;
the
American
college
must become equal to the new
day into which we are now en¬
tering.
"This

we

can,

that the
college
rejuvenated. To accom¬
plish such a rejuvenation requires
at

means

be

must

least

fundamental

three

continuance of the American way
of life.

"We

fighting a war to pro¬
civilization, a tradition of
equality, a heritage of freedom. In
winning the war we need large
tect

are

a

men

and

women

who

developed as specialists, but
victory comes we shall not

be able to maintain

institutions if

Securities of small companies cannot be underwritten on
While registered offerings will not be directly affected

basis.

a

5%

by this

rule, indirectly they will be affected adversely. Fixing the 5% figure
in the mfnd of the public will make it verv difficult to sell a security
whose prospectus shows a higher spread between cost and
selling

P^Ce.

will

when

NEW YORK CITY

I don't know.

it

that must be made into the bread

are

Decidedly detrimental.

NEW YORK CITY

Whether

quate to the huge lumps of dough

numbers of

NEW YORK CITY

Restrict market.'

world is not

our

tumbling down about our
war has produced a new

come

feet. The

changes in college practice: first
the substitution in place of intel¬
lectualism of emphasis upon edu¬
cation for broad, purposeful cit¬
out
izenship; second, the abandon¬
ment during the period of this
citizenship education of the frag¬
mentary curriculum, and third,
the convincing of the American
people that a rejuvenated college
is of primary importance for the

As it is, it has adversely affected retail
extent, particularly in the sale of low priced

paying commission to salesmen.
measurable harm to the low priced field.

NEW YORK CITY

:

Guy and I resent it.

NEW YORK CITY

business to

must shoulder if
to

of

NEW YORK CITY

a

We believe it will practically eliminate the

smaller

under

will not give the small corporations the necessary attention.
The real protection of the public is the small dealer.
The record
of the larger houses proves this.
The small dealer is

and die.

the past.

of

Will force the business into the hands of the large dealers who

"Unquestionably the impact of
war
upon our youth -has al¬
ready brought many of them to,
a
new. understanding
of the re¬
sponsibilities that we Americans
the

.

men

and

educated

we

women

in

their

standing of the

our

allow

American
our

be

young
under-

deep

under¬

to

sources of our
spirit and in their dedi¬
carry on the American
experiment in democratic living."

national

cation

to

'

Anyone who reads the foregoing
thoughtfully7 must be
Plainly these opposing tenden¬ extracts
cies for the most part counteract struck, we believe, by the stub¬
continuity of the factors
each other year after year. From born
of all kinds become stronger.

An

Analysis Post-War Trade And
Business Prospects

1909

(Continued from page 1935)
selling time, shelf space, promo¬
activities, and so on, de¬
voted to the products and allocat¬
ing
charges
accordingly.
The
usual effect is to open the eyes
of
wholesalers and retailers
to

possibilities
viously neglected.

to

costs

transportation
The

added.

whole¬
total net

making an appropriate
for
profit
or
loss";

allowance

1929

in

differences

38.1%

34%

of

and

Commerce, a discrep¬
ancy of about 4%, as shown in
Figure 3.
It may be noted that

imply criticism of the Federal
Trade Commission reports, which
to

by

prepared within another estimate for the same
strict budget limitations.
It is year by Twentieth Century Fund
yields 32%
without transporta¬
necessary, however, to warn our
subscribers that the percentages tion, which Commerce places at
picked uo from the reports and 4%, making the corresponding
The three estimates,
set
forth
in
the
preceding total £-3%.
doubt

no

are

relied in short, are fairly close.
What is more important, each of
upon. We present them only be¬
the two estimates for a period of
cause they are the best to be had
from published documents and years plotted in/ Figure 3 displays
give a general idea of relative a strong tendency toward uni¬
costs of production and distribu¬ formity
throughout the period.
table

tion

of prod¬

classes

selected

of

be

to

not

are

This

is

in

extensive

of

spite

ucts.

changes within each period in the

Only two of the five classes of
products represented in the table
show distribution
costs as high

kinds

of goods

distribution

59%, or slightly more, of ulti¬
purchase prices. Yet they
.are all exceptionally expensive to
'handle and sell.
When it comes to foods, the

purchased, in the
and in eco¬

system
the

1929

1909

Between

conditions.

nomic

went

as

and

mate

through a great war and subse¬
quent inflation,
depression and
"new era" of prosperity; further¬

country

*

the automobile was popu¬
ana living habits consid¬
erably altered. Between 1929 and
more,

Commission is able to draw upon

larized,

of its own Agricul¬
tural Income Inquiry, 1938, which
the

findings

the

supply

1939

enough

The three examples are
tions

depending on such
perishability,
bulk,

as

A

is

of

distribution

such

.

probably much longer.
for instance, a Joint

and

1921,

that

is

products

when large vol¬

ation for periods

classified under
producing the finished

umes

cost

shifting from

of consumers' purchases are

"

V

excessive.

%

,

In

(Expressed
t

,■

of

percentages

California

is the best balanced and
intelligent treatment of the
subject yet issued, in our opinion;
and it would need only slight re¬
vision to-make it applicable to
present and to the post-war
future. The following extracts in¬
dicate the Commission's thinking.
the

(The boldface is ours.)
"New
agencies, new methods
and new expenditures have been
added by individual manufactur¬
ers from time to time to maintain
a
continuous
flow
of
goods

have created

a

burden from which

manufacturers

that

agencies

distributive

other

of the

knowledge

consuming

grower

etc.-..

Packing, loading, storage,
Transportation
Wholesale
Chain

r

___

_

distributors'

retail

store

*36.7%
9.0
21.8

_____

_

2.6

"With the development of stren¬
competion, the manufactur¬

uous

developed special sales organ¬
retail dealers

izations to call upon

Florida
Cabbage

and

til.3%

ucts

15.0
27.4
6.1
40.2

3.7

'29,9

18.7

margin______

margin-

^

them

interest
to

or

in

new

prod¬

buy in

them' to

urge

larger volume products that they
then handling.

were

conditions

Under these
ceased

wholesaler

the

market creator and relied

to be
Ultimate
*At

purchase prices

receiving

doors

of

100.0%
100.0%
100.0%
tAt loading point not packed or loaded

tStanding in the field.

Costs

Over-All

of

Commission

reports.

sharp

contrast

the

1909 to

1939, inclusive, charted in Figure
3.
The percentages diagrammed
represent ratios of ultimate pur¬
chasers' prices required to cover
(a) transportation from point of
output to the initial distributors
Of
the commodities
(b) whole¬

times

the

that

fact

larger proportion of consumers'
expenditures are then devoted to
purchases of farm products, bak¬
ery
goods and clothing, all of
which
require
relatively
wide
margins. Note the slight rise in
the curve (Figure 3) in 1921-23
and the steeper rise in 1931-33.
In
good times, on the other
hand, a larger proportion of ex¬
penditures go to durables, most

is

slack

is

in

distributive costs

record over-all costs from

of distribution costs

average

in re

tions among commodities
spect to

high

varia¬

with

and

which

orders

secure

they would fill and distribute."
"To
attract
additional
trade,

Distribution

Have Been Fairly Uniform
In

manufacturers to create de¬

mand

•

Trade

Federal

Source:

a

upon

__________

packing house.

a

devised

retailers

services,

new

greater conveniences, and adopted
new selling methods.
All of these
activities
tended
to
create
a

new

new

but

standards,

expenses

business

of

volume

greater

established

and

merchandising

they

also

added

moderate cut's in long-

even

retail

and

wholesale

Efficiency in merchan¬

dising and selling, to be sure, may
raised
here
and there;
be
but
consumers' resistance, to altera¬

"Out of the

taxes

unnecessarily

not

are

onerous, and by repudiation of the
idea that it makes no difference

every.; business

needs — working
investment capital.

and

capital

I have talked to a number of peo¬

ple who had experience with the
Fed¬

small loans operations of the
eral

and

Banks

Reserve

experi¬

ser¬

vices will remain as strong as ever

pression from them that so far as

demands for sales

their

and

Manufacturers' Outgo Will Rise

of over-all costs in

The record

and the discussion im¬
preceding have been

Figure 3
mediately
restricted

costs

the

to

of

trans¬

porting, wholesaling and retailing
consumers' goods after they pass
out of producers' hands. Our con¬
clusion that such costs will remain
are
is quite consistent
judgment that manufac¬

they

as

with

a

it

find

will

turers

necessary

to

increase their ratios of selling ex¬
pense.

this

Unfortunately,

judgment

evi¬
comprehensive data
have never been gathered.
It is
wholly a deduction from the fol¬
lowing premises:
cannot

be

tested

factual

by

for

dence;

Productive

capacity

in

nearly

all industries has

begn so greatly
expanded that selling efforts will
have to be stepped up.
New products

in large numbers

ence

working capital is concerned, the
firm has no greater diffi¬

small

culty than

firm of any other
anything worth¬

a

size where it has
while

loan

to

"My
that

on.

banking

when

loan

"•

*

friends tell me
requests from"

small units are rejected, it is gen¬
erally owing to the fact that these

units have' already

over-extended

their-credit. The problem of such a
concern

is to get some kind

financial

budget which will
to be put in

small
of

a

its finances

permit

shape

good

and

to. keep

not

on

adding to its debts.
"So far

investment capital is

as

concerned, smaller companies do
have more
of a
problem than
companies.
In the first
place, already established larger
companies have an operating ex¬
perience upon which to seek to
float either bond issues or equity
security issues, and in the second
place, so far as new business en¬
terprises are concerned, the
smaller company usually involves
a larger amount of risk, and this
necessitates finding one or more
individuals
with ; capital
funds
who are willing to undertake the

larger

risk.

waiting to be introduced, al¬
ways an expensive process.

are

"As companies get a little big¬
ger, but still not into the very
implies large class, they may wish to issue
a
great growth of optional pur¬ securities, but experience under
chasing of goods which are far the present Securities Acts demonr
above the range of people's ele¬ strates that the cost of getting out
mental wants; their desires must a small-size security issue is much
be vigorously cultivated and stim¬
greater in proportion than the cost
ulated if total consumption is to of a larger security issue.
The
come anywhere near the national
question,-then, is as to how we can
capacity to produce consumers' make
it
more
possible for
a

Enlarged

consumption

commodities and services.

smaller

distributive
and
selling organizations will require

funds necessary for

Rebuilding

and

and development

selection

new

outlets and

new

Supplier-retailer
as

of

ers.

involving the added ex¬
of more contacts with deal¬
;

argument to the contrary
might be based upon the notable
An

spread between the

(most of which comes from manu¬
facturers) to keep pace with the

of

advertising

and

sales

retail

of

expansion.
Securities

the

•

revenue

for.

amendments to
will

Acts

prove;

from

1940

to

the.,establishment and expan¬
small

of.

sion

from

come

.

must

businesses

it

making

at-,

more

tractive for people with money
invest in such

This means,

in

the

to

operations to do so.

in

judgment, that

our

be substantial

there must

reform

present tax system.

"There

of national income

rapid growth

secure

establishment

helpful in this connection, but the
relationships, primary source of increased fund^

pointed out in Section II,- seem

pense

to

company

salesmen.,;

certain to be much closer—neces¬

sarily

size

"It may be that

both time and considerable money
for

failure

producer and the consumer com¬
pensation for all of these people
must be found, and this brings

(Continued from page 1916)
that the budget is balanced,

that

with ordinary banking oper¬
ations and I get the definite im¬

living and buying habits

tions in

in the operation of

business."

to,

show big the public debt gets.
so far as we
"There are two kinds of money
successfully en¬

could

margins.

securing bet¬

capacity of markets and adapting
their
distributive
policies
more

Says SEC Regulations

proposing,
or

established

to

It is the belief of the

must find relief by
ter

glad

be

would

manufacturers

and

of distribution

practices

petitive

ers

prices)

Eastern Shore

' New Potatoes
t53.9%
9.8
13.9

Oranges
to

Proceeds

FRUITS & VEGETABLES

purchase

ultimate

>

TU—"—T~

i"T7

—

COSTS OF SELECTED

PRODUCTION-AND DISTRIBUTION

is

force

report

line to another.
goods. Wholesale and retail mar¬ We must dig a little deeper.
.definitely ^to the needs of the con¬
gins. in; thenjselyes do npt look '■t One; factor which maintains a sumer." ' y •
.
K ■■
■* '. .
one

working in post-war years.
Our distribution system will re¬
main substantially the same.
No

most

Commission

customs.

trade

costs of distribution.
scarcely avoid the in¬
will go right on

Agricultural In¬ and will effectually block any
marked
alterations
in
present
quiry, made up of ten distin¬
guished members of the; House practices. The sensible conclusion,
we
submit, is that nothing more
and Senate, conducted a thorough
than isolated and very moderate
study of distribution costs cover¬
changes are to be anticipated.
ing not only farm products but
various other commodities. Their

be relieved.

bv

can

of

Commission

business

of

But this is not a sufficient explan¬

would be better
of

31-year

no

In

govern

ference that they

know,

discussion for at least three dec-

adel

that

And he

one

record just cited
perceptible encourage¬
ment to the idea that costs' of dis¬
tribution are likely to be lowered
after the war. After all, the idea
is not novel.
It has been under
The

lends

retail margins are

and

fixed

firmly

cost of

even course.

line

each

wholesale

A large portion of what

customarily treated as

purchases.

distribution

it all
fairly

explanation

partial

within

steadiness of market demand, and
the like.

worst

our

consumers'

of

through

costs held to a

farm products,

factors

After the War:
No Radical Changes

through the channels of distribu¬

Yet

ready-to-consume

among

however, are precisely equal;

tion, and their efforts have been
duplicated by the manufacturers
of competing goods.
These com¬

acter

varia¬

wide

the

demonstrate

discernible.
The per¬
for 1929 and for 1939,

eco¬

we

nomic

table below.

to

endured

centages

trend

distribution

of

catastrophe, which greatly
modified the amount and char¬

the

in

percentages

faintly

downward

a

costs

pro¬

Lough

by

is

then

are

cedure have resulted in estimates

meant

not

are

and

sales

for

remarks

retailers)

and

salers

in items pre¬

profit

(of

1929

to

over-all

in

expenses

operating

tional

These

Thursday, May 11, 1944

FINANCIAL CHRONICLE

THE COMMERCIAL &

1938

which

I

other points to

two

are

call

attention,

but as to

the end of 1942. But this Is ex¬ which I make no
specific sug¬
(c) retailers'
the American public face to face plainable in large, part by the di¬
margins.
They
refer
only
to of which also carry wide mar¬
gestions. First, is to the 5% profit
version of production to
muni¬
with the problem of devising a
consumption goods and they do gins for wholesalers and retailers;
limitation idea announced in Oc¬
tions
and
the
consequent
by
not cover producers' selling costs. but they represent at the top not less expensive and more efficient
dearth of new products and prod¬ tober, 1943, by the National Asso¬
The
percentages for
1909 to more than 12% of total expendi¬ system of distributing the abso¬
improvements.
Advertising ciation of Securities Dealers and
food, clothing, uct
Their effect is offset by lute essentials
1929, taken from Lough's "High- tures.
without news value may be effec¬
*
Level Consumption," are derived greater gains in such low-margin shelter, and fuel."
strongly criticised by the New
tive for convenience
items, but
from a study of standard mark¬ goods as printed materials, fuels,
"Legislative panaceas cannot be
does not work so well for higher- York Securities Dealers Associa¬
automobiles,
gasoline
and effective in improving a situation
ups
plus allowances for trans¬ and
priced goods.
In any case, the tion. It is maintained that this
In gen¬ brought about by the interplay of
portation.
The percentages from automotive accessories.
conditions which limited adver¬
profit limitation rule will drive
1929 to 1939, taken from a Depart¬ eral, sales are more easily made. so many varied and complex fac¬
tising in those years seem most
out of business the small dealers
ment of Commerce study, are de¬ At the same time, however, con¬ tors. The cost of distribution can
unlikely to prevail after the war.
rived "by computing the ratio of sumers' demands for sales-service be reduced by a better under¬
As to other classes of selling who market semi-speculative is¬
standing of the elements which
To
expense,
it appears self-evident sues, that is, the class of issue
r rawwrnrmCTtSimmnrimjiiimiiai

salers' margins and

—

,ri

48,

compose

COSTS IN CONSUMERS' PURChlASESH
L_flF

M

VI

h

fnMMftn T

fs

VV'",' 'IVW

,

I

.

1

-

40.'1

AO

_

a.
Id

3,5.1

ik. 55.5

—

4—j

3.

QL

31

1

44

L_

f

—

—

-

I
—

—

tc

!

Lu

1

M.

—

r

34#

30

30

14

1409

Sources}

21

19

25

25

27

192950 3152 33 34 35 36 37 38 39

For

1909-1929.

"Hiah-Level ConsumDtion" bv William H.

for

1929-1939>

"Distributive Costs of Consumption Commodities"

Loush:

by Bruce M. Fowler and. William H. Shaw in Survey of Current
Business,
rable

July 19^2.

and cannot

be




The two series

are

not

Ui

0

3$.

-37 5 i5/5 58.1

—

—

z

40

1

J 5£J

~3TP

%

345
"

hQ

Lb J

In
f-

42

0.4

r- 40.

A

38 .1

rM

JUL

—

j

115

38

LI
r

L

42

U

1 1 11 41

1111■

2
id

it."

that the

—

strictly comoa-

^

O.

the

makes it

the

3

since the date

an

"better

The net result is

over-all
FIGURE

years

important contributor
knowledge" called
for by the Commission; and chain
stores have provided to a great
extent
the
"less
expensive and
more efficient system of distribut¬
ing the absolute essentials,"
But
these
improvements have
been
counteracted by more and more
strenuous competition for public
to

favor.

linked.

23

of the report, marketing research
has
grown
to a stature which

costs

of

a

standoff

distribution

held in balance, as we have seen,
on about the
same level.

will

above

five factors listed

make

increases

manufacturers

of

by

most

consumption

goods vital to survival,
speak of growth.

not

to

which

dealers

Reorganizat'n Potentialities
McLaughlin, Baird & Reuss, 1
Wall St., New York City, members
of the New York Stock Exchange,
cular
tion

discussing

interesting cir¬
the "reorganiza¬

potentialities for selected se¬

curities

System.
may be

of

the

Missouri

Pacific

Copies of this circular
had upon request from

McLaughlin, Baird & Reuss.

the

knowledge

It is maintained that

ence,

have prepared an

to

of the

purchaser involves taking a risk.

are

forced

it ^ will be

if the small

out

of exist¬

difficult, if not

impossible, for smaller companies
obtain funds from security is¬

to

sues,

will

and that this, lack of funds
prevent many workers

having jobs.

which I feel competent
a

it

definite
as

one

from

This is not a field in
to express

opinion, but I suggest

which merits some in¬

vestigation by this

Committee."

Volume 159

THE COMMERCIAL & FINANCIAL CHRONICLE

Number 4280

ues

Govemoi Brickei Gives Views On

of various nations

stable
and

in

we

relation to

will have

an

reasonably
other,
opportunity

keeping world trade conditions
stable, too, if we do that. If we
can

inate

(Continued from page 1915)
for

firsthand report on

ject.

tional

.

As

•

I

said

last

I

night,

It

is

per¬

ask..

not favor at any
state.

-

As

for

Fulton, I do
time any world

the

necessary

co¬

■'

'

operative organization of the; sov¬
ereign states of the world, that
pose I read these questions, then; organization must admit every
one
at a time and you. answer nation that will comply with the
them in your own good way.
proper
conditions of admission,
First of all, however, I do think but no nation should be compelled
there is a foundation question, so by military force to join or to
to speak, which seems to be nec¬ take part in it. The *fact is that
essary.
That is, first of all, do any such organization Will be
you favor some post-war organi¬ founded for the purpose Of pre¬
sation of the nations designed to serving peace and riot for the pur¬
hiaintain the peace that comes out pose of exercising power,.■!';7 ;;
of this war that we are now fight¬
Mr. Lewis:. Very good,-sir.
ing?
7
'.,7
Question No. 3: "Do you believe
Mr.

Lewis:

wars

REPORTER'S

which

economic

International Monetary

System

Mr. Lewis: Question 4: "Do you
that a world monetary

believe

system should be established?"
There is

its

banking

dealer

had

an

of

clearing
from

away

practical.

dreams.

We

national state?

world super-

If so,

would it in¬

volve any < limitations upon the
sovereignty of the United States?"

'7

Governor Bricker:

fdo not.
tral
■our

I

certainly

There should be

world

authority

no

cen¬

dominating

destiny, and apparently

none

Of the other; nations want such a

thing either.
♦England - and

It is very certain
Russia and China

wouldn't agree to it.

Military Might Should Not Be
Subject TO World State Or

r

Organization
Mr. Lewis:

"(b) Would it mean
Army, Navy, and Air
.Force of the. United States and
their technical equipment for war
.are to be placed under the con¬
that

the

trol of the

world state

ization?"

organ¬

rather

sizeable

Bricker:

•never to submit

We

ought

the control of

.Army and Navy to

our

other na¬
tion or combination of nationst or
to any central world state.
The
•United States must keep her mili¬
tary force adequate to our own
security in the air, on the land,
and on the sea, and subject always
any

.

to

our

own

Let

interj ect

an

question here, if you will,
Governor Bricker. Is your last re-

;ply based perhaps on the thought
that it is

without

restrictions designed to pro¬
the

American

standard

of

ly, in your last reply.
Bricker:

Governor
swer
one

I

Will

an¬

it again.

job

maintain

Certainly not. Our
above all others is to

our

Mr. Lewis:
you

believe

you

please

standards of living.

Subquestion (b): "If

in restrictions, will
state what those re¬

We must be

to fix the value of money
to coin currency.
In other

power

and

Words, it is

has

task

been

favored

little by the return of rela¬

tive

stability

markets

the

seasoned

their

nervous

to

after

theoretically conceivable,

".however improbable it may seem
at the moment, that some day we

evolution

so

an

and

"

progress

rather

;than revolution and destruction.
Mr. Lewis:

That is

line, sir, by. the

a

very

it

does

mean

an

assurance

of

equality of opportunity to work

good and to

•

earn.

way.

7 Question

the buying is credited to the
belief that the rate of discount

say

against the Canadian dollar, in

terms

tions should be

so

The restric¬

designed

as

to

equalize the cost of the goods we
produce with the cost of compet¬
ing goods from other nations. In
other words, they should be de-

of

American

be

currency,

materially.

reduced

Others look upon it as recogni¬
tion of Canadian securities

as a

good "hedge" for the post-war
period.
«'
But among those who follow
operations in foreign securities
closely it was observed that such.
buying, if it is in progress must

be

"mere dribble" since it does

a

not show

substantially

the

on

sur-

£gce

Watchful Waiting
The

investment

market, or at
speculative end of it,
chiefly secondary railroad obliga¬
tions, appear to have shaken off

least

the

the

extreme

gripped it
Rail

nervousness

a week or 10

liens

have

which

days back.

scored

mod¬

erate recoveries and traders are

found leaning to the buying side

again, although with a greater
degree of selectivity, that is, ah
eye more to the future of the
roads involved.

While this

case Of "jitters" hadisturbing at the time,
appears in retrospect to
have had its good side.
For it
demonstrated
that
people
who
hold high-grade investment paper
are not going to be shaken loose
from
such
holdings
by
such
momentary lapses.

turally

it

was

now

.

Money Rates Still Key

Although

speculative issues
be severely disturbed from
time to time by recurrent discus¬

may

of this

sion

that

phase of the
of early peacesregarding Mr. Willkie's book,
likely that gilt"One World," so we will go on to International WPA after the war.
edge paper will be seriously af¬
question 8.
"Newspapers report What are your views on that, fected, judging by comments in
sir?
some Republicans as saying that
the market place.
the Republican Party must adopt
Governor
Bricker: Of
course,
The point is made that the
a
liberal platform if it wants to there is no hope for our leader¬
cost of money is still the ruling
win.
What do you consider
is ship in the world if we attempt
force in the investment type of
meant by a liberal platform?"
to purchase by gifts or otherwise
security, and unless there are
the good will of other1 nations or
Govenor Bricker: Fulton, in my
growing signs of really serious
of other peoples.
We can help
inflation which, of course, would
judgment the Republican Party
of

one

has been throughout its

whole life

what

is

sometimes

called

an

them raise their standards but we

the liberal

cannot help them do that by giv¬

ing

so

most

party in America.
It
today. The New Deal is the

reactionary

have

had

ica.

It

in

has

the

program
we
life of Amer¬

reached

back

for

substance
and
lowering our own standards. Let
us
deal honestly and fairly with
all people of the world without
trying constantly to change their
form of government and ways of
away

our

implements of
power, bureaucratic
and others,
to centralize Authority, to dom¬ living, helping them to help them¬
centuries

for the

inate .the lives of individuals and

Signed to make up for the differ¬ to take
away
their traditional
ence in standards .of living.
That
liberties.
Liberalism means more
fmight possibly need oiir indepen- has been done
by tariffs and by
of home rights, not less. Liber¬
-dent military force to protect our
other methods, even here at home*
./interests against nations "that to-; but it ohly • works effectively' as alism means more of oppor¬
Liberalism
".day* are our very friendly allies? long as the currencies of the world tunities; not less.
in the hi story of the world
Governor Bricker: No, Fulton, remain in the, same: relative posi¬
has meant that men of energy and
;I cannot conceive nf. such a situar tions with each other.. Therefore, meri of
ability and men who wlil
tion as that. Certainly our-, inter¬ my, thought is that We ought to
work—-and that. includes women
a
stable : standard • of
ests with our allies ought to con¬ establish
asv wellr-shall
have
a
reward
tinue on a friendly basis, and if values here at home at the earliest
commensurate, with their efforts,
we don't
preserve them on "that possible moment, and take aggres¬
basis we will miss our gr'eat op¬ sive, positive measures to per¬
We; believe in better welfare
portunity. In my judgment, there suade other nations to do Tike- conditions, but we do not believe
wise. Then through an. economic in perpetuating the causes of pov¬
is no possibility of conflict with
•England ever. • As for Russia, her conference-^and it ought to be a erty and of need, and that.is what
"interests lie in her internal de¬ continuing organization—it would boondoggling
and
bureaucracy
velopment,
promotion
of
her be possible to keep" currency val¬ and-government controls inevit-




fering figure.

may

impractical as to ably do.
Liberalism does not
impossibility. What mean a government guarantee of
heed, Fulton, is a program of equality in the world's goods, but

"amount to
we

This
no

is

strictions should be?"

Governor Bricker:
me

'extra
•

any
tect

States

control.

Mr. Lewis;

marketed at 103, appeared to set¬
tle about 1V2 points under the of¬

under¬

well, for* the two-party system of
government and of constitutional
representative government. I be¬
lieve in the party system as the
only means of perpetuating free
government
among
people.
I
believe the Republican Party will
adopt a sound, constructive, lib¬
eral,
forward-looking
platform
up
our
markets to such trade joy the benefits and the advan¬ Which I can support, and I shall
would be to promote lower stand¬
tages of the American way of life, give my support to the nominee
ards of living for our own people and that
Way of life must be con¬ of that party, whoever he may be,
here at home instead of lifting tinued.
If
we
allow it
to
be insisting that he adhere to his
our standards of living, which has
changed to what exists in other platform and carry out his prom¬
always been our purpose.
countries, we might just as well ises when elected.
Mr. Lewis: One final question,
migrating from here to
Mr. Lewis: Very well sir. Sub- begin
there.
Governor Bricker, on my own.
question (a) : " Will that mean that
Mr. Lewis: Now, Governor Various schools of thought pro¬
the goods and services of people
with low living standards are to Bricker, question 7 was a personal pose that we maintain a program
United

re¬

cur¬

clear road for next week When
several

of living; it would completely de¬
suppressed labor and im¬ stroy our philosophy Of existence
poverished living conditions.
and'change the United States of
Also, don't forget that the states America : into something entirely
having a totalitarian economy can different from what it is. We
lower the price of goods by tak¬ must admit only as
many as can
ing it out of the lives of their be assimilated into our way of
people and lowering their wages living; and - don't forget, Fulton,
and standards of living. To open those who come here come to en¬

the

96

issue,

And, it appeared, appreciable
being made in that
direction, thus assuring a fairly

progress was

upon

enter

around

rently.

conditions1 of trade based

living?" You answered that, real¬

>

Governor

.

or

tageous

subsequently

rule

loose ends left Power & Light Co.
3s, announced
operations. similar action and
that

-

a

to

must

concerned, violate the constitu¬
tional provision giving the Con¬
gress of the United States the

All right, sir, sup¬

member of

95 in the market

recent

some

.

a

marketed

opportunity this week to devote
Meanwhile the bankers spon¬
their time, pretty fully, to the task
soring the $17,000,000 of Louisiana

Will Support Any Candidate
.5: "Do you believe,
Mr. Lewis: Now for the last
sir, vin the free and unrestricted
movement of peoples? If so, how
question, sir: "If by any chance
do you propose to prevent the you are not the presidential nom¬
Governor Bricker:
in absolute freedom of interna¬ peoples of Asia and other war- inee of the
Yes, I do/
Republican Party this
We as a sovereign nation have got tional trade?"
^
torn countries from overrunning year, will you as a
good Repub¬
jto act in cooperation with other
.the,United States?"
lican actively support the nominee
Governor
Bricker:
I
do not;patioos in all practical matters to The standards of living in the
chosen by the Republican Con¬
GoVernor
Bricker:
I
do
not
preserve the peace of the world various countries
vention?"
of the world favor unrestricted
immigration of
and to build better international differ
greatly from a wage, of a peoples into this country.! If the
Governor Bricker: I most as¬
relationships..f;
:v' v:.., -7- ; few cents a day to a wage off bars Were down, there would be suredly will.
I believe that a
;
Mr. Lewis: Very well. Now, let's many dollars,a day. There must be
millions, even hundreds of mil¬ Republican victory this fall is es¬
take the first Of these other ques¬ an equalization so that the nations
lions; of peoplh pouring in on us sential to the preservation of the
tions.
It says, "Do you believes of the world may have competitive; frofti all over the world. That in¬ Republican Party, for the preser¬
.that the United -States should be- conditions; iof trdd^, not advan¬ flux would destroy our standards vation of the Democratic Party as
come

which

group

Buying Canadian Internals
takings are scheduled to reach
It may be that the current lull
build upon
the market.
what we have instead of cooking
provides the investment fraternity
Announcements of the dissolu¬ With a bit more time for gossiping
up schemes to change the Whole
tion
of
syndicates which had about. But reports in some quar¬
existing structure and machinery
of all the countries of the world. sponsored two of the more recent ters suggest that there is an in¬
Aside from the fact that it would new issues was conclusive evi¬ creasingly
steady dribble of
mean teaching the entire peoples dence that the job of disposing of American
capital into Canadian
of the world to use a new money unsold portions 6f such offerings internal obligations.
is moving right along.
system, it would, so far as we are
People who get these reports

"theoretical

•

■

The

Celanese Corporation of America's

fraternity covered

affiliates

no

possibility of a world currency or
a single world monetary establish¬
ment being brought about at this
time; That is
talking in empty

when

ago

stock which had sold off to around

dearth of new issues the

a

investment

over

Governor Bricker:

fortnight

a

350,000 shares of 4%% preferred
stock, brought out at 99, termin¬
ated its selling agreement. ' The

REPORT
and

Impractical

Governor Bricker:

fectly all right, Fulton. I want you
to ask anything that you see fit to

elim¬

With

don't

,

V Governor Bricker:

the

we can

of

the European invasion appeared

imminent.

inevitably sow the seeds of actual
military wars.

that sub¬

trade, the building of her interna¬
structure. She has plenty
of territory,
untold natural re¬
know any better way to handle sources, and. her paths of develop¬
this than to take a list of nine ment certainly do not cross ours.
China is traditionally our friend
questions which a group of Re¬
publican leaders in Missouri pre¬ and the Chinese are traditionally
sented to
Mr.
Wendell Willkie non-aggressive.
several months ago.
Mr. Willkie
Mr. Lewis: AH right, Governor
said at that time the questions
Bricker. Now for question No. 2.
were so ambiguous as to defy un¬
This one says:
"If you favor a
derstanding and they bore no re¬ World state, what would you do
lationship to reality. I can't say about nations that refused to come
.that I agree with him.
I think in—(a) force them by military
they are very blunt and pointed means; (b) treat them as out¬
questions, and I should like to put laws by not permitting them to
them to you, Governor Bricker, trade with members of the world
with the understanding, of course,
state; or (e) what other action
that you can plead- the same ex¬
you would favor?"
• *
cuse that Mr. Willkie pled on any
or on all of them.
Is that all right
Does Not Believe In Absolute
.with you, sir?
Freedom Of Trade
> ?
a

accomplish that,

spell

OUR

each

of

Post-War Foreign Policy

1939

.

selves.

This constant giving and spread¬

ing of our goods around the world
creates servility in others and ar¬

in ourselves. It leads to
discord, discredit and destruction,
rather than concord, confidence
rogance

and respect.
Mr. Lewis; Thank you,
Bricker.

naturally

money

rates,

For, it is observed, with the
huge war debt which this coun*
try must be prepared to sup¬
port and service, the Adminis¬
tration

chiefly
costs

must

with

concern

keeping

itself

interest.

low.

that would hold true, it
contended, even should there
change in administrations

And
was

be

a

next November when the incum¬

bent New Deal comes up

sideration

of

the

for con¬
people at the

polls.

Gover¬

listening, ladies
and. gentlemen, to an interview
with Governor John W. Bricker,
of Ohio, candidate for the Repub¬
lican nomination for the presi¬
dency, who has answered ques¬
tions about foreign policy, par¬
ticularly in the post-war world.

affect

that will continue to be the case.

Pollak Mfg. Interesting

nor

You have been

or

war, and rumors
it does not appear

A

revised
analysis
of
Manufacturing, based on
1943
operations, has been pre¬
pared by Raymond & Co., 148
State Street, Boston, Mass. Copies
of this interesting study may b$
had upon request from Raymond
new

Pollak

l&

Co.

Thursday, May 11; 1944

CHRONICLE I

THE COMMERCIAL & FINANCIAL

1940

Winning The Peace For American The Securities Salesman's Corner
Manpower
of Speech,

Freedom
Freedom

Want!

From

to

Freedom of Religion, Freedom From Fear,
Yes, ladies and gentlemen, freedom from

want, or winning the peace for all mankind!
The four great leaders of our time and the

people of the United
Nations have courageously grounded the history-making proclama¬
tions of the Atlantic Charter and the Moscow Pact on the Christian
Principles of World Brotherhood^
cooperation, with equal op¬
portunities and privileges for all
mankind.
We pray, and we have
faith to believe, that a common
and

ground may be reached for a sys¬
of world exchange and that
world rehabilitation shall be ap¬

tem

full

in

achieved

and

proached

spirit of fairness and cooperation.
Now let us approach the sub¬

of life

ject as it affects our way
America.

in

deny that we are

would

None

the time (and
God speed the day) when
terrible
catastrophe
shall
to an end.
That is our first

approaching

fast
may

this
come

victory,

final

after

But

desire.

that

to

of duty that
through the fullest

great sense

comes-only

of

value

of the

realization

and

laborer free

to his fellow man. A

from

with rights
representation.
Yet
all free from the re¬

racketeer boss,

a

collective

of

and

above

quirement of paying for the
lege of working.
May we have

privi¬

the

labor

its

in

which

job"?, "Will it have con¬
tinuity"?, "What will it pay"?

please,
who
can
see
the advantage
of
lower costs and greater efficiency,

a

therefore the one great question
is employment.
Well do we re¬
days of mass unem¬

member the

ployment. Unless American man¬
power is furnished employment,
our
whole economic and moral
What

which

for a fuller life as a na¬
after this war? There are

equip

us

tion

let

but

many

only

consider

us

two.

have the momentum.
labor, Government and
agriculture are keyed to the great¬
est degree of activity and unity
ever known in the history of our
First,

we

Business,

great country.
Second, we are better equipped.

T,he American workman is trained
and skilled far beyond our imagi¬
nation

And in
machinery
materials, thousands of

few years

a

ago.

science,

of

field

the
and

new

new

discoveries have been made.

What then do
the

Man¬

American

for

Peace

need to "Win

we

We need unity.
Unity
desire and purpose. Unity of

power"?
of

And

effort.
'the

unity

enable

of

;

will

bigger
catch the vision
become

to

and

who

Him

need

we

which

spirit

of

us

Americans

all

above

"It

said,

is

more

blessed to give than to receive." •
We need that spirit" which will
enable

emphasize

not to

us,

our

differences, but to see our com¬
mon
interests, as has been so
'nobly set forth in the Moscow
agreement among the four great
nations.
That spirit which will
enable
us
to
see
the
strength
which

add

will

we

to

our

own

stability by helping backward na¬
on an upward impetus, and
that will enable us to find joy
well

the

of our fellow

being

Americans.
Let

ments
tors

These

Government.

factors

of

course

which

ferences

actions

their

if

Man¬

and

four

great
have their dif¬
are
evident
in

not

in

their

ex¬

are

a

thousand

have a management
a greater production
imbued
with
philanthropic

May
and

desires.

we

to

Dedicated

not

alone

to

but to furnish jobs
:to
men.
Because
jobs to men
mean
food, clothing, education,
and happiness to their children.
And dedicated, too, to the pro¬
duction
of
better
and
cheaper
making

money

"'articles that their
*An

fellow Ameri-

oration1 written

livered last month.

and

de¬

Bob lives at

4155

Lymer Drive, San Diego 4,
^Calif.
His father is Harry Kuykendall
San

as manage¬

they ab¬
of their products. One

and labor prosper

sorb

more

who

can

realize that an economy

of ruin.
Government

of scarcity is an economy

that

have

we

will

a

private

encourage

en¬

terprise rather than regulate.
A
Government free from
directly
or

who

Diego

is

secretary

County

of

Mutual

Insurance Co.




the

Fire

only

distributed

properly

be

of rigid State
control, and that free enterprise,
as
we
have known it, should be
measures

,

systematically extinguished. Class,
occupational and sectional jeal¬
ousies are being fostered, and our
people encouraged to form
into organized pres¬

young

themselves

pocket
book taken from her citizenry. A
Government
which
can
realize
that no good is gained by taking
from

who

someone

guaranteed railroad securities before in their lives. The same sort of
analysis can be prepared on many other groups of securities—fire in¬
surance stocks make a particularly favorable showing on a long-term,
backward basis—also many second- and third-grade bond
will likewise make an outstanding 1938 to 1944 performance
record. Possibly the RECORD OF SEVERAL ACCOUNTS that have
groups

development and progress of pri¬
vate enterprise rather than tax¬
ing to destroy.
:
Early in this great catastrophe,
our
own
General MacArthur ut¬
tered
these
immortal
words:
are

not

we then
after
uphold the standards
nobly set by these men both
living and dead?
Shall we as
business, labor, agriculture and
Government ban together in this
same
spirit of unselfishness to
culminate the fruits of fearless

Shall

standards.

the conflict,
so

welding together the united
interests in the general welfare
of
mankind?
The
degree
to
which Americans reach such an
unselfish
devotion to humanity
will measure the success of the
material benefits to all mankind.
men,

conflict,

under the momentum
carrying on this great
accellerate
the
peace,
by

May

we

gained in

the

the
and

future

of

prospects

with

imbued

spirit of sacrifice and devo¬
tion, commingling our common
interests
to that successful cli¬

that

which shall result in perma¬

max

prosperity for all people

nent
an

"Peace on

everlasting

Goodwill

to

all

and

Earth,

Mankind."

threea

folder, and made

four-page record, bound in a serviceable

or

going lines, AND PROPERLY USED, can be of assistance in closing
business and, besides, this helpful selling tool can be used over
and over again.
'
' .

American

President Coleman Of Canadian Pacific Points
To

Com¬

tractive situation in the compara¬

tively new and dynamic field

of

electronics according to a study of
the

company,

manufacturing
tus since

which

has

electrical

been

appara¬

1901, prepared by Hughes

& Treat, 40

Wall Street, New York

City. Copies of this study discuss¬

ing

the

may

upon

situation in

some

detail

be had from Hughes & Treat

request.

':, r;

manifest,
corrected,

become

they

as

should be, and must be,
but

should

it

that

if

of

improved, or even main¬
at the present level, more

be

to

obvious
living is

fairly

be

standard

our

wealth

No

man

ulti¬

for

created

be

must

division.

mate

has been

able to show-^and few would sug¬

hard to

are

get at and hard to market, and to
very special degree this coun¬
try's development has been due to
daring,
initiative and
re¬
a

of

capital

now

initiating

throughout the world, all friendly
to Canada and the Canadian sys¬

ferry service.

tem of free

ment

fest

is mani¬
from the fact that they have
enterprise,

as

"We

nounced

encourage¬

no

would

policy

the

that

believe

an¬

mate¬

be

capital in the

rially modified, and we are mak¬

undertaking of the Canadian Pa¬

future plans in conformity
with it. A statement was made in

chosen to risk their

cific.

ing

our

"Since

Canada

annual

the

report was
Government
of
has announced its policy

the

circulated,

aviation.
Under that policy, international
services will be provided exclu¬
sively by a chosen instrument,

with respect to post-war

and

government-owned

a

com¬

is indicated as that instru¬
ment. Insofar as domestic services

pany

are

concerned,

tions

to

are

main line

by

by

owned

number of privatelyThe railway

a

companies.

companies

to be required to

are

of the

themselves

divest

owner¬

ship of air lines within one year
after the close of the war.
The
decision
to your

disappointing

most

was

directors,

as we

had cher¬

ished natural and legitimate hopes

would
be
given the opportunity to play its
full oart in the development of
that

company

your

be

no

ion

confiscation, and the opin¬

which may be

expected

to follow the conclusion

"Your

It

fully

was

case

strongly presented

had

"and

to the proper
nointed out

was

Pacific

Canadian

the

made

a

distinct

Air
con¬

coun¬

number of
struggling
and
scattered
com¬
panies and welding them into a
closely knit, efficient organization,
without encroaching on the field
reserved by. law for Trans-Can¬
ada Air Lines; that it had pro¬
ceeded
throughout
with
the
of

knowledge
and

in

over

the

a

Government,

compliance with Govern¬

ment

regulations; and that it had

been

of

substantial,

aid

to

United

United

the

and

Kingdom governments in

operations
Alaska

States

in

and

Northern
Labrador,

concerned.

We

can

as¬

therefore, that our invest¬
ment can be liquidated on terms
which will not be unjust to our

elements,

the

on

forces

which have made her great.
democratic

endured

have

peoples

patiently for some years,

restrictions

freedom

their

on

thought necessary for the success¬
prosecution of the war.
It is
difficult to believe that they will

ful

willingly bow their necks to the
yoke of bureaucracy when the
necessity for it has passed, or to
condemn
their
sons
returning
active

from

service, to live

in a
and
banished

world from which advantage

have

enterprise

been

forever."

'

Brownell

Again Galls '

shareholders.

For Bimetallism

Dividend Policy

possibility of a dividend
on
the ordinary stock,
payable
out of the current year's earnings,
will be considered by the direc¬

in

(Continued from page 1920)
Brownell stated, not

"The

in

tors

By that time we

August.

will be able to estimate the prob¬
able size of the

prairie grain crop,
issues having
our net earnings

Our

position, will be ever present in
our

oppose

the

use

of

but strongly
gold to its

full

of

physical extent, but instead
supplementing the metal with
form of bookkeeping, man¬

some

or
other paper
substitutes, would restore
silver to the position it once occu¬
money

the year,

termined.

advocate

aged

will have been de¬
paramount duty,
to bring the company out of the
war in a sound and safe financial
for

only do not

on

influence

an

metallism,

other

certain

and

currency

pied.
He
of

predicted that with adoption

international
would

world

of

minds."

supply

larger

a

bimetallism,

of

Referring to post-war condi¬
as affecting Canadian Paci¬

fic, Mr. Coleman stated: "The of¬
of the

gold

and

monetary
metal with the traditions of thou-

Conditions

tions

have con¬
tinued their intensive study, and
ficers

the

have the equivalent

the added benefits of

Post-War

company

a

vpqrg

which is
than

—

one

widely distributed

more

gold today, and favored in
Africa and Latin America,
contain the larger part of

Asia,

which

the population of the world.
Editor's Note—For a statement
will enable the
company to meet adequately the of Mr. Brownell's plan of inter¬
bimetallism,
and
the
problems which will arise in the national

are

engaged in framing plans and

policies

era

of

are

which

post-w^r readjustment. We
that

confident

Canada—pos¬

sibly not without some setbacks
and some painful experience —
will then enter on a period of ex¬

pansion
ment.

industrial

and

develoo-

comments of A. M. Sakolski, with
Mr.
sues

Brownell's
of "The

1943, page 1304; Oct. 28, page
1^86; Dec. 2. page 2207, and Dec.

23, page 2534.

pared to maintain its historic po¬
sition as a devoted and efficient
and

as

of

the

Canadian

ration,

the most important trans¬

portation link in the British Em¬
"In

reply, see the is¬
Chronicle," Sept. 30,

.

Your company will be pre¬

Canada,- pire.
and

would
system,

that

sume,

servant

Canadian,

that the sep¬

be made without loss

can

those

to

of peace.

aviation

expressed

was

aration

ap¬

a

government-owned company, and
feeder lines are to be operated in
zones

April

on

tion, to the effect that there would

opera¬

conducted

be

20 by the
minister in charge of civil avia¬
Parliament

Air Services

the

would

it

she

incredible

"The

given

were

to

sup¬

—

and

Britain

from

States—and

the

on

the first trans-Atlantic

United States and other countries

sons

turn her back on the

pear

(Continued from page 1919)

her

ported in their efforts by venture
United

Railway's War-Time Accomplishments

try by taking

Transformer

tion,

sourcefulness

tribution to aviation in this

offers an interesting and at¬

wealth.

the

Lines

pany

dividing

on

creating

on

Injustices in division or distribu¬

along the fore¬ phy, Canada's riches

part of every salesman's equipment, if prepared

that

Attractive Situation In

emphasis

than

rather

gest—that as much wealth can be
produced under state control of
production
and distribution
as
under a system of free enterprise.
By reason of climate and geogra¬

authorities.

Electronics Industry

teaching
the

all

The trouble with
is that they place

powers.

their

firm.
People like to see WHAT OTHERS ARE DOING. They also are
impressed by the SUCCESS OF OTHERS. This is especially true
when it comes to stock and bond investment.
A neatly prepared
your

are

deny that millions of Americans
are
demonstrating their right to
live based, on this highest of all

their

tained

_

fit to live who
afraid to die".
Who can

those

"Only

en¬

supervised and serviced by your organization, if properly set
up in a good presentational form, would make even better illus¬
trative material to use in demonstrating the possibilities that in¬
vestors may find for successful investment by doing business with
been

A

not.

sensibly
consideration for the

Government which taxes
with careful

AND

sale after

close

ing claims which they have

couraged, would be a task beyond

■

,

PAST PERFORMANCE, this salesman has been able
sale with new accounts that have never bought

this analysis of
to

>.

he has been able to do for . others in AN
FORCEFUL MANNER through the use of

showing what

UNMISTAKABLE

with her

satisfaction

complete

these securities.

investment in

By

her

and

ability

investment

man's

has and giv¬

ing to someone who has

sure

upon

citi¬

indirectly influencing her

zens' vote by a beneficent

times

greater.

inspired

that

see

can

you

But their common in¬

pressions.
terests

mo¬

agriculture

labor,

agement,

life:

American

our

few

a

the four major fac¬

upon

of

for

think

us

if

farmer,

inspired

tions

in

to

who

ment

May

collapse.
are
the
factors

giving life and sus¬
their fellow Ameri¬

is

A

cans.

one

see

can

that

tenance

will

fiber

our

looking

agriculture

an

food

I have

proposition. When it is possible, therefore, to show a
picture, make a calculation, use a pencil, or draw a simple verbal
analogy, the capable salesman uses such tools at every opportunity.
One method of bringing out the attractive points regarding a
certain class of securities is to prepare a performance analysis based

serv¬

ice rendered to his employer

the
American
Workman's first thought be "Will
might

ideas—is the difficulty of bringing clearly
the attention and understanding of others the outstanding high¬

lights of

fruits

the

that

groups to struggle with the
what such an investment has done for others over a period State and with each other for a
of years.
One salesman of our acquaintance has been selling guar- sharing of wealth—wealth which
anteed rail preferreds for the past several years almost entirely upon j they are not urged or encouraged
cans may enjoy a fuller life.
this basis.
He has a list of these stocks which was purchased by to create.
May
we
have
the
laborer,
"If those behind this movement
equipped as he has never been one of his clients in 1928—the analysis shows the payment of full
equipped before, inspired with; dividends all through the depression—the prices paid originally— were entrusted with executive
that sincere desire to do an hon¬ their value today—the high yield obtained, and there is even a power, they- would find that to
est day's work.
Not so much for letter from the client which is part of the exhibit. This letter, in satisfy the appetites they have in¬
the dollars he earns, but inspired itself, is a powerful testimonial to the client's faith in the sales¬ flamed, and to reconcile conflict¬

what then?

Well

obstacles to overcome in the presen¬

of the most difficult

One

the ranks of those who

through

tation of intangibles—or

KUYKENDALL (Age 16)*

By BOB

Visual Sales Presentations

A Method Of Using

activity in
maintain
of prosperity cart

considerable

is

there

country,

pounces

tional

that

space

its- facilities

-

this

In-Larger Quarters
Security Adjustment Corp.

as

in others, Brooklyn.
■

.

!

•

an*

rented addi¬
for the expansion of
it has

at

16

Court

Street*

[Volume 159

THE COMMERCIAL

Number 4280

President Asks Congress For $3,450,570,000
For Lend-Lease For Year Ending June, 1845
An

appropriation of $3,450,570,000 to carry forward the LendLease program for the fiscal year ending June 30, 1945, was asked
by President Roosevelt in a message to Congress on May 6.
The
President further requested that any unexpended balances of pre¬
vious Lend-Lease appropriations be made available/which would

& FINANCIAL CHRONICLE

Under the

ing

bill those

new

earn¬

1944 and re¬
ceiving not more than $100 from
sources not
subject to withhold¬
ing would be permitted to file a
copy of a withholding receipt, fur¬
nished by the employer, in place
of the regular tax return.
These

taxpayers would list their
ents

the

on

depend¬

side

reverse

of

this

make the

aggregate for the new year $7,188,893,000.
receipt, and
enter
amounts
of
appropriation,
said
thc^
—
"other income."
White
House, is for industrial policy now with respect to final
They would mail it to the local
products required for production Lend-Lease settlements.
tax collector who would calculate
of planes, tanks, guns and other
Senator Ellender asserted that the tax, then bill the taxpayer or
war supplies in Allied countries,
he wasn't opposing the continu¬ issue a refund check, depending
food and other agricultural prod¬
whether the taxpayer was over¬
ance
of 'Lend-Lease,
but that
ucts needed to maintain their sol¬
Y
"Congress, and the people are en¬ paid or underpaid.
diers and war workers, and re¬
Some 9,000,000 persons now pay¬
titled
to
more
facts than they
lated services.
From Associated
have been given about the extent ing Victory taxes but with earn¬
Press
advices
from
Washington
not large enough to come
and nature of reverse aid to us." ings
May 6 we also quote:
'
under the present income levies
;
The:

t

Another

authorize the

Would

in pro¬
curing
Lend-Lease products of
$88,299,000 received under LendLease from foreign governments.
in

sum

addition to

approximately
worth of supplies

$2,000,000,000
and

use,

said the

White House

The
was

forces

Lease.

in

U.

S.

Lend-

reverse

Y •'

'

-

to

furnished

services

armed

Senator

Mr. Ellender said he had turned

provision

proposed

Democrat,

Ellender,

mittee

for

mation"
effect

to

up

would

to the Senate's Truman Com¬

over

Investigation

he

had

that

received

Britain

had

lent

the

to

their

to

regular taxpayers,
equiva¬

rates .about

present Victory tax

burdens.

charged

bill

The

Lend-Lease the cost

reverse

become

remitting at

"Infor¬

mately

of

rehabilitating "a lot of old
castles"
occupied
by American
troops "over there to fight the

those

would

150,000

earning

add

approxi¬
taxpayers—
between $555 and
new

$624.

Comments On Palyi's
Article On Inflation

"If they want to charge us for
that sort of thing, it ought to be

put

.States determine upon a national

added.

straight rental basis," he

on a

Y

begin

Simplification Of

money

and

accelerate the

on

conference that the bill would be

and

on

reported out by his Committee
in practically the same form as

normal

passed by the House.
ton

the

to

account

"Times"

A Washing¬

reporting

York

New

said

this,

part:

'

in

Senate

week

next

because

con¬

sideration of the poll tax question

scheduled for precedence,
He did not expect that public

was
f

hearings to hear testimony from
others than experts
ury

of the Treas¬
and of the in¬

Department

ternal

Revenue Bureau would be

held by his Committee, but indi¬
cated a willingness to call such

hearings if members of the Com¬
mittee

desired.

so

and

surtaxes, which

computed

Normal—3%

10%

of

being

10%

in

of

income,

lieu

of

the

side.

the

exceed

Thus

demand

would

to be heard in

protest against the
deduction of 10% al¬

automatic

lowed
with

under
incomes

deduction

bill

the

under

is

for

those1

$5,000.

intended

to

The
cover

contributions to charities, payment
of

and

taxes

other

allowable

ex¬

Charitable

success

institutions, Senator
said, protested without
when the provision was

written

into

George

the

House

bill.

One provision of the new meas¬
ure which might develop discus¬

:

sion

in

which

the

Committee

reduced

the

from the current 6%

was

normal

that
tax

to 3%, Sen¬

ator

George stated.
Individuals
holding partly exempt Federal se¬
curities would be affected by this

change, he said, since the tax ex¬
emption of bonds extended only
to

the

not

normal tax levied

apply

number

of

upon

and

did

The
by the

surtaxes.

hit

taxpayers

reduction in the normal tax rate
was

ment

small.

He

surveys

quoted

Govern¬

to show they con¬

stituted only 5% of the holders of
all the

outstanding Federal bonds
which are partly tax exempt. The
remaining 95% were held by sav¬
ings banks, insurance companies,
etc., which were not affected by
the changes in the individual in¬
come

tax

law.

of the

number

of de¬

that the 30%

possibility
excise levy applied
was

a

to checks in

night clubs and caba¬
rets might be reduced in the bill
reported out by his Committee,




the

restate

$79.50.
YYY.. "Y
Surtaxes—Computed by

variables
tion

a

ar¬

other

taxes

and

the post-war

interest

at

1—to

volume to continue

correspondingly high rate.
reason to doubt, how¬
ever, that either an abnormal drop
a

in

velocity of circulation or an
abnormally high physical volume
of production will rescue us from
the general rule that a large in¬

deduct

currently the full tax liability of
persons earning up to $5,000, thus
removing the necessity for 30,000,000 persons to compute formal
returns, the Associated Press also

in

crease

the

volume

fect
the

changes in velocity

of

overrated.

10,000,000 (those earning less than
$5,000 but with income other than
wages and salaries)
could use a
simple table showing their entire

companied by

with

money

corresponding increase in
In particular does the ef¬

20,000,000
who
still
would be required to file returns,

tax.

of

prices.

causes a

said:
Of

either

to

as

There is

Noting
that
the
bill
would
change
the
withholding
levy
against wages and salaries—ef¬
Jan.

Prediction

necessarily hazardous.
Many people, pointing to our pres¬
ent huge plant capacity and our
vast war-time production, expect

paid.

next

the velocity of money
quantity of things pro¬

are

of goods is

deduction in lieu of contrib¬

utions,

equa¬

post-war velocity of money or as
to post-war volume of production

grad¬

making exemptions of
$500 for the taxpayer and $500 for
each dependent, and a 10% of in¬
come

things
The other

The

easily induce

a

normal

and

turns filed next March 15

income.

on

a

No basis

tion
in

re¬

1944

the

volume

avoiding

that

inflation

is

relevant

is

that

of

merchantable production. Govern¬
ment

>

sportsored production tends

Generally, the bill would levy
a
somewhat
larger tax against
single persons and couples with¬
out children, while the load would
be lightened for taxpayers with

inflationary.
Whether the
Government pays for the produc¬

large families.

corresponding

The

to

be

tion

of

public
works or for pure relief it creates
purchasing power without any

withholding system of de¬
from pay envelopes

*Y

You

❖

*

still

are

long of three

Electric

sumer

and

weapons

goods.

or

for

increase

in

None of those

con¬
are

merchantable

Auto-Lite

ings; just under 17 it meets
If the breakout oc¬

pointless. In its stead I sug¬
best, stock now cur¬
gest National Gypsum, now
41^.
Jones
&
about 9 3A.
Latter is
running
Laughlin is at 21V6 and Ser¬
vel at about 17VY
If the high and given some market
help can add a couple of
market were in an
up posi¬
points.
tion I would have no
hesita¬

tion in

of

advising the retention
three.
Unfortunately

all

this

is

stock

the

not

for

More

case.

Sale

to

seems

be

much

*

*

Strongly suspect that gen¬
eral market will break out of
its

trading rut within the next
Maybe the spark

two weeks.

will

from the
longinvasion, maybe from
sway me too
But what¬
the individual stock something else.
ever its
motivating power an
enough

if

showed

Even

gumption.

For it is the individual issue
that stands up in dull or de¬
takes the lead when the

mar-

come

awaited

to the "what" should

answer

come

soon.

,

'

than

more

doubled

since

»

Our

More next

deposits

are

What goods

cheaper
twice

122

over

make

can we

today

billions.
so

much

more

that

than

as

many can be sold as in
What major new inventions
there which will double the

' \ '•

#

Thursday.
*

sis

—Walter

1929,

Then deposits in all banks were 55
billions more or less:
today total

'

•#

*

[The
article

views
do

expressed

Whyte
in

this

not

necessarily at any
coincide with those
of the
Chronicle.
They are presented as
those of the author
only.]
time

,

1929?
are

old volume of production?
There is a large deferred

for

mand

true

many

enough.

tynes

Sales

of

of

de¬

goods,

automo¬

biles and houses, railroad supplies
and farm

machinery, clothing and

household appliances

keep

things

And there

are

LAMBORN & CO.
99

WALL

STREET

NEW YORK 5, N. Y.

bound to

are

moving

for

time.

a

also lively new in¬

dustries, airplane travel here and
abroad, television, air condition¬

other

hand,

by stimulating

demand

sumer

diately

without

SUGAR
Exports—Imports—Futures

creating
goods

sumer

any

must

tionary influence.

con¬

new

be

money

has

DIgby 4-2727

imme¬
con¬

infla¬

an

The old rule is
Established

well established that increases in

beyond the ordinary

money

mal fate

are

nor¬

matched by price in¬

Member*

During

a

omy must

nothing
tant

war,

take

can

in

avoiding

1856

H. Hentz & Co.

creases.

a

of

econ¬

back seat.

well be

post-war
as

New

course,

But

impor¬

more

policy

much inflation

than

as

pos¬

York

New

York

New

York

Stock

Commodity
Chicago
New

Orleans
And

Exchange

Curb

Exchange

Cotton

Exchange

Exchange,
Board

of

Cotton

other

Inc.
Trade

Exchange

Exchange*

sible. The best guarantee of future

financial integrity is the effort to
N. Y. Cotton

ship
water

which
on

attempts

Exchange Bldg.

NEW

leadership in the post-war world.

money.

/

*

Servel is at the crossroads.
From 18 to 19 it meets offer¬

at

first income bracket.

our

to

acts the

rently

keep down current costs.

in

*

acts

seems

support.

production nor is
salary checks was instituted last there yet sufficient reason to ex¬
year as part of the pay-as-you-go i pect that merchantable
production
tax legislation, it now taxes thej will be
enough greater in volume
approximate tax of persons in the I than in 1929 to match the increase
»

Latter

bought at 39, stop 37; Jones
curs
on
the
upside, stock
and Laughlin,
bought at 22
should go to a new high. But,
stop 191?, and Servel, bought
pending further clarification,
at 18 with a
stop at 163/4. Of
the three, Electric Auto-Lite tying up funds in stock seems

ing to help out with the balance.

severe shrinking
velocity or circu¬
lation seems yet to be established.
Turning to the subject of produc¬

sur¬

applicable for

velocity.

expecting

23.

But reconversion of plants, on the

high velocity ac¬
fall instead of a

for

simpler return than the

revised

about

now

seem

in the post-war

present long form.
The

a

of changes in

remaining 10,000,000,
over
$5,000, would

taxes would be

a

s!<

D-J), our market will run into
offerings. How these will be aggressively and
have more oomph.
taken will give the answer as

might

fear

rise in prices. This seems to create
doubt as to the casual influence

incomes

fill out

Sudden

think I would

Laughlin is

clining markets that usually
other

are

the monetary

in

the

and

duced.

taxable income

on

then

likely to remain equal?

pendents, would subtract $500 and
$350 from $3,500, and his normal
tax would
be 3%
of $2,650, or

ductions

Asked if there

than

more

How far

$3,500,

regardless

fective

penditures.

no

I

42

one of
and today is approxi¬
the steels that should act bet¬
mately 138. One strong day
ter than the
group, provided
or so
can
carry the London
the group does
anything. But
averages
through to
new
the
group doesn't seem
to
levels. It will take a lot more
for our market to follow suit. want to do anything.
So in¬
stead of being tied up I would
Beginning at 138.50 and run¬
ning up to 142 (measured by suggest a switch into Crane,
so,

to become fewer.

algebraic exactness.

$500.

making

of

Jones &

wouldn't

monetary formula MV
equals PT in terms of balance in¬

can¬

person

a

profit of about 2Y> points)
right in the middle of of¬
ferings.
Crossing 42 would
be good action but until it
does, it will have to remain
suspect.
If in the next few
days it begins to flounder

Mean¬ short

that

does

re¬

Electric

a

market made take
my profit.
its high last March at about
❖
*
140, then set back to 135 or

seem

stead of in terms of mathematical

not

figure.

coming out and the bidders

quantity of money, on similar
assumptions, will be matched by a
tripling of prices.
This analysis

rived at by

institutions

dou¬

est

uated table

itable

obviously

familiar

probable that some rep¬

was

rather

ligious, educational and charitable
causes, for other taxes and inter¬

resentatives of churches and char¬

It

So

this theory of balance a

unit.

a

our own

the

usual

paid. The latter deduction

about the 130

while,

require a doubling of prices to re¬
store the balance.
A tripling of

de¬

deduction for contributions to

then, if

bling of the quantity of money,
other things remaining equal, will

after
a

balance

a

is to be restored, we
double the weight on the

other

of

may

of' income

exemption of $500 and

one

of

must

follows, said the

as

side

one

the balance

Associated Press:

duction

.

He did not expect action by the

,

be

factor

a

How far, when money is ex¬
cessive, will it go in pushing up
prices?
If we double the weight

.

system

as

rise in prices.

in fear.

by a vote of 358 for, with no vote in opposition. As finally approved
by the House Ways and Means Committee on April 22, the bill was
formally presented to the House on April 24 by Representative Doughton, Chairman of the Committee, and reference thereto appeared in
our issue of May 4, page 1849.
<*>
—
Senator
George, Chairman of the Chairman said this is not un¬
the Senate
Finance
Committee, likely.
Y"
indicated on May 6, at a press
The bill repeals the Victory tax
new

lose

begin to enter

The flight from too much money
does not at the outset originate

May 5 the House unanimously passed the bill to provide for

a

will

.

power

the simplification of the individual income tax; the bill was adopted

provides

1920)

page

mately 130.
But, from that
high it sank only about two
points and is now back to

-

themselves on
the fear that
its purchasing

to impress
public does

the

Individual Income Tax
On

(Continued from

Jhey topped off at approxi¬

stocks:
:

as

is

*

(Continued from page 1915) J

House Passes Bill For

Savs

ket turns

Auto-Lite (in which you have

to how the market will act.

battle of Britain."

Louisiana, urged that the United

Tomorrow's Markets
Walter Whyte

to $5,000 in

up

1941

4, N. Y.

Leader¬

to

both shoulders

YORK

carry
on

this

matter of inflation will not be safe

CHICAGO

DETROIT

GENEVA,

PITTSBURGH

SWITZERLAND

Broker-Dealer Personnel Items
If

that; (,su,ch; an

terprise,

we

economy

must be able to-provide

mean ;

House Committee Approves

ample support for the health, edu¬

personnel

contemplate making additions to your

you

Thursday, May 11, 1944

& FINANCIAL CHRONICLE

THE COMMERCIAL

1942

Bill Increasing Debt
To $24E,008.000,000
•

Limit

cational, recreational, "ahd similar' ;
public services so essential to the
v
The Federal debt limit would be increased from $210,000,000,000
welfare of the masses of people in
to $240,000,000,000 under a. bill approved by the House Ways and
(Special to The Financial Chronicle)
our industrial society.
fSpecial to The Financial Chronicle)
Finally, the
Means Committee on May 8. The bill, as introduced in the House
HARTFORD, CONN.—John B. conception of a program of eco¬
AUGUSTA,
MAINE — Fred¬
on March 23 by Representative Doughton
(Dem.) of North Carolina,
erick
C.
Bagley, Sr. has been Crawford has joined the staff of nomic enterprise, based on free¬
Chairman of the House Ways and Means Committee, proposed to
added
to
the
staff
of
Chace, Kennedy-Peterson, Inc;, 75 Pearl dom, must not be repressive, but
fix the debt limit at $260,000,000,000 (as noted in our March 30 issue,
v.".;;-;,.,,Av- 'v>: support the free exercise of civil
Whiteside & Co., Inc., 24 Federal Street.
page 1340); opposition, however,<S>and political liberties.
^*/'.5■/■■■■
Street, Boston, Mass.
; ^
among
Republican members of tration, who contended "the new
(Special to The Financial Chronicle)
Great
concern
has
been
ex¬
the
House
subsequently devel¬ Congress coming in in January
(Special to The Financial Chronicle)
,
INDIANAPOLIS,
IND.—Harry pressed by many people over the
BOSTON, MASS.—W. Bradford F. Taylor is with Fisher & Co., tendency toward the greater oped, and on April 25 Representa¬ can have another look at the situ¬
tive Knutson, t Republican leader ation. ;
The whole war picture
Saunders
has
become
affiliated Inc., 8 East Market Street.
growth of governmental power, It
of the Ways and Means Commit¬ may have changed by then. Be¬
is
with Goldman, Sachs & Co., 75
fitting and appropriate that
such concern be entertained.
In tee, said " "We're going to insist sides, we don't want a huge ceil¬
Federal Street.
Mr. Saunders in
(Special to The Financial Chronicle)
that the new limit be set consid¬ ing
that known spenders
cah
the
estimation,
the
bulwark
past was with Jackson &
KANSAS CITY, MO. —Robert my
shoot at." ■.;///;/,/./ ■
A
Curtis.
against such overcentralization is erably lower than $260,000,000,M. Brown has become connected
000;
probably
$240,000,000,000
to promote the free and indepen¬
Mr. Bell .told the Committee a
with Barrett Herrick & Co., Inc.,
would be enough." He added:
(Special to The Financial Chronicle)
dent organizations of the people,
higher debt ceiling is, necessary
1012
Baltimore
Avenue.
/ Mr.
"No matter what limit we set—
before June or the Government
BOSTON,
MASS. — John
V. Brown was previously with Prugh, which will be an indispensable
even
at a thousand billion—this will run the risk of exceeding thq
Flanagan has become associated
way of checking the concentration

please send in particulars to the Editor of The Financial
Chronicle for publication in this column.
V

.

,

.

with

19 Con¬

F^Rutter, Inc.,

W.

Street. Mr. Flanagan was
previously with Elwell & Co. and
Trescott Griffin & Co.

Combest & Land and B. C. Chris¬

topher & Co.

BOSTON,- MASS.

C.

Frank

--

Wil¬
liamson have been added to the
staff
of Trust
Funds,
Inc.,
89
Broad Street.

Torrey, Alfred I. du Pont Building.
(Special to The Financial Chronicle)

MIAMI
U.

has

become

con¬

J.

&

is

Rice

Co.,

bury

MASS.—Bernard

now

Clar¬

—

with Golds-

807 Marquette Ave.

P.
(Special to The Financial Chronicle)

FLA. —Joshua II.
with Thomson &
McKinnon, 18 Wall Street.
ORLANDO,

Sorey

(Special to The Financial Chronicle)

A.

MICH. —James

is

now

Penobscot

Simons
previously with Chas. A. Par-

was

v';

cells & Co.

to The Financial Chronicle)

RALEIGH, N. C.—J. B. Vaden

Mr.

Building.

(Special

has

added

been

Kirchofer

the

to

staff

of

Arnold, Inc., Insur¬

&

Building.

ance

GRAND RAPIDS,
liam

Graham

M.

MICH.—Wil¬

joined the
staff of MacNaughton-Greenawalt
Co., Michigan Trust Building."

&

(Special to

Sachtleben is with Earl F. Townsend

&

Co., Dexter Horton Bldg.

tion of wealth and

advices stated:'

political power
in the hands of government offi¬
cials must be accomplished
through creating more adequate
provisions, by both industry arid
government, for the participation
of laborers, farmers, and conSum-;
ers
in the
formulation,; "admin¬
istration, and the evaluation of
over-all economic policies.
Contrary to a general impres¬
sion that seems to prevail, the
American Federation

of Labor is

reached

by the Executive Council

of the American Federation of La¬
bor

be summarized in its dec¬

can

laration

;

effect

the

to

"it

that

is

imperative that the United States
do its full part to help develop a
general system of mutual secur¬
ity."
This, one might say, will
determine the general approach
by the American Federation of
Labor and its principal subsidiary
bodies
to
the
various
specific
problems associated with our
post-war planning.
It

is

our

the Atlantic

Freedoms
ered

should

merely

not

as

be

consid¬

platitudes

to

the welfare of our country.
Any worthwhile and lasting peace
must rest on stable and just eco^
nomic

gram
*

foundations.

interna¬

The

political and military
should therefore be

ciated with

however, to get rid of
of exploitation which

necessary,

kind

that

tends to concentrate income in the
hands of the few and prevents

the

great mass of wage earners from

an

pro¬
asso-

economic program

having the

lessen barriers between nations so
that there may

be a larger inter¬
change of goods and services for
all.
There is

question but what
of full employment
interrelated.
domestic economy of
is
organically
con¬

no

the

problem

and

wOrld peace are

To

attain

a

abundance

the

with

nected

international

therefore, be
advances

achievement

security.
necessary

both

on

fronts

faith

our

at

one

When

and the same time.

affirm

of

It would,
to make
we re¬

free

enter¬

in

that the right to
start a business and the right to
choose a job form the basis of our
prise,

we

mean

Such

free life.

a

system can en¬

joy the confidence and support of
the working people of this coun¬
try only • insofar as it is able to
demonstrate its ability to serve
the well-being of the whole com¬
munity.
Such a regime of free enter¬

prise

and

economic

of

freedom

designed to provide equal bene¬
and advantages to all of the
people in our country, and to

must demonstrate that it can func¬

utilize the

our

fits

of

productive powers
and agriculture for

new

industry

>*ihe advancement of the standards
of living of all people.
We
in

have

free

unlimited

enterprise.

convinced than

terprise,

as

ever

We

confidence
are

more

that free

understood

in




en¬

this

"We

D

the

back next January for a .new

war

care

legislation Wednesday.
Senator
Doughton emphasized

of

approval

the

expenditures for
The

tion

the

war

the

to

an

that

propose

we

Office of War

Mobilization

taxpayers

about

as

limitation

The
debt

was

the national

on

June

raised

1940,
Feb. 19,

25,

ministration's original figure was

from 45 to 49 billions; on

led

Dewey

1941, to 65 billions; on March 28,

(R., 111.), Assistant Treasury Secretary in the Coolidge Adminis-

1942, to 125 billions, and on April

Representative

by

11,* 1943, to 210 billions.

Coleman Re-Elected Chairman Stock Exchange
At Annual

peace

Con¬
gress authorize the establishment

economy,

another

they should be."

fight, to cut back the Ad¬

development of
policies in- the transi¬

from

concerned

as

lower

purposes.",/

war

will' continue

war

Representative D i n g e 11 (R;,
said the army and navy
are
"piling up" too much unex¬
pended money and commented:
"I wonder if some men in the
War' and Navy Departments are

expenditures until early 1945.
House
will take up the

the

end

Mich.)

for

The

that

this new

year."

top if the war continues. He said
the
$30,000,000,000
additional
debt authorization would

not- need

this year," he said. / "The request
is based on an assumption that

committee the Government would
be

would

limitations if the war should

At

annual

the

Heeling

election

Other Elections

—

of the

New

York

Stock Exchange

on

May 8 John A. Coleman, of Adler, Coleman & Co., was re-elected
Chairman of the Board of Governors for a second term of one year.
A

total

446 in

of 842

It

1942.

votes

were

cast,

compared with 703 in 1943 and

as

observed in the New York "Herald Tribune" of

was

"appreciably greater participation at the polls was
general member-f
place of business
ship satisfaction with the manner principal
The
national
war
effort
has
the
Metropolitan
area
in which affairs have been run within
demonstrated
the
r e m a r kable
the
under the administration of Emil of
City
of
New
York,
productive powers of our coun¬
who is a general or limited part¬
Schram, President. Mr. Schram's
try. The production achievements
contract expires on June 30, but ner in a member firm engaged in
of
American
labor
have
been
he is expected to continue as head a business involving direct contact
nothing less than miraculous. This
of the Exchange under new terms, with the public: Ranald H. Macdemonstrated
productive poten¬
subject to approval of the Treas¬ donald (Dominick & Dominick).
tiality of our country calls for a
Two members or allied members
ury." A/,: ■
VADA'-: (
revision of all former estimates of
Other elections at the meeting pr non-members of the Exchange
what is possible and desirable. No
were reported
as follows by the residing and having their prin¬
valid reason can be advanced for
Exchange:
--//A A
\-r:
V, cipal places of business outside of
not using these prodigious pro¬
the Metropolitan area of the City
Seven Members of the Board
ductive powers in peacetime to
of New York, who are general or
of Governors
(each for the
provide better homes, better food
limited partners in member firms
and clothing, more adequate med¬ term of three years)—Four mem¬
engaged in a business involving
ical care, finer communities, and bers of the Exchange residing and
direct
contact with the
public;
richer
educational
and cultural having their principal places of
Charles
C.
Renshaw
(Mitchell,
business within the Metropolitan
opportunities for all. The policies
Hutchins & Co., Chicago) and Sid¬
of
management, labor, govern¬ area of the City of New York:
ney L. Schwartz
(Sutro & Co.,
ment and
agriculture should be Francis M. Bacon, 3rd (Bacon, San
Francisco).
&
Co.), William K.
directed to the realization of these Stevenson
Two Members of the Gratuity
Beckers (Spencer Trask & Co.),
high levels of production and em¬
Robert P. Boylan (at E. F. Hutton Fund
(each for the
term of
ployment.
The
Henry Upham
Harris three years)—Thatcher M. Brown
principal elements in a & ~ Co.),
(Brown
Brothers Harriman
&
(Harris, Upham & Co.).
program to care for the millions
One
allied
member
or
non- Co.)
and
Laurence
M.
Marks
who aTe to be demobilized from
<
the armed forces as well as the member residing and having his (Laurence M. Marks & Co.).
of

workers, employers

May

9

that

attributed

to

'

1

,

purchasing power to
buy the things they need for daily
life.
An expanding \yorld econ¬
firm conviction that omy
is
naturally
essential
to
Charter and the Four peace, and it will be necessary to

but
should constitute the moral prin¬
ciples of a democratic system of
collective security.
The transla¬
tion of these principles into pol¬
icies and concrete acts, both now
and in the future, can assure the
people of this country, as well as
the
people in the rest of the
world, of a lasting security. Just
as it is feared by many that noth¬
ing but disaster looms ahead if
each of the great powers should
pursue an independent course, so
similarly can it be said that only
through the cooperation of man-i
agement, labor, and the govern¬
ment will it be possible to deepen
the mutual relations so important

tional

against it. To strengthen free en¬
terprise and to achieve the objec¬
tives we have in mind, it will be

Pi:ess

Associated

However, Daniel W. Bell, Treas¬
ury
Under Secretary, told the

democratic

and farmers.

country, is a far superior form
of organization than any of the
other setups that have been posed

8

May

and
their
own interests without regard for
the
consequences
to the com¬
munity as a whole. To prevent
this, and to provide means for

sentatives

1918)

page

$210,000,000,000 maximum during
the coming loan drive.
He said
the public debt may reach $258,000,000,000 by July 1, 1945. v
-

figure will not restrain authorized

Adjustment with an economic
commission
composed of repre¬

Wags Problem

of

date

much opposed to the "nar¬
row
pressure
group
tactic." We
recognize in this procedure and
philosophy a very great danger if
the powerful organizations of fi¬

of

(Continued from

it."

May 8 to the lower figure. Under

and

The Posf-War

reach

private concentration of wealth
and monopoly and the centraliza¬

economic

The'Financial Chronicle)

SEATTLE, WASH.—William F.

has

would

Republican opposi¬

tion the Administration agreed on

the

(Special to The Financial Chronicle)

administration
In face of the

toward

trend

nance, business, agriculture
labor seek merely to advance

Simons has become affiliated with

Paine, Webber, Jackson & Curtis,

governmental
of curbing

means

very

connected with Trust

Funds, Inc., 89 Broad Street.

DETROIT,

MINN.

MINNEAPOLIS,
ence

BOSTON,

Lin¬

(Special to The Financial Chronicle)

II.

Elmer

with

(Special to The Financial Chronicle)

is

BEACH, FLA.—Robert

Alexander

H.

MASS. —Frank
now

&

coln Road.

Bright & Co., 84 State Street.

Burkard

Cohu

nected with Atwill & Co., 605

(Special to The Financial Chronicle)

% BOSTON,
Warner is

with

associated

now

II.

Arthur

and

McCollistcr

(Special to The Financial Chronicle)

MIAMI, FLA.—Elmer E. Adams

and

This

undemocratic

the

is

(Special to The Financial Chronicle)

economic

of

power.

gress

tion

so

as

to

and

husband

util¬

natural

raise

resources.

a

system

must

As

we

understand free

its goal of
to work.

jobs for all who want
*

v1-

During war period management
and labor have achieved and en¬

nored.

Other factors

any

,

have

should also

The working out of

be included.

wage
policy will
determined, however,

concrete
to be

the principles of collec¬
bargaining are recognized
and applied, the greatest problem
has been solved. The rest is just

necessity be opposed to all ten¬
dencies toward monopoly restric¬
tion.

the

of right of collective bargaining has

It must be

through its production to
progressively the national
Such

must include at least the part of management as well
as
labor.
Leadership
of
both
following points:
Plans
for
public
works and groups have acquired greater con¬
housing projects should be ready fidence in each other, and it has
to
provide
employment during also strengthened the leadership
respective camps 'them¬
this emergency. Adequate retrain¬ in the
ing and federal unemployment selves. ;
Wage policies in the post-war
insurance programs should be or¬
ganized to provide for those who period can' be determined equi¬
tably only by considering the par¬
may not ke able to find jobs im¬
mediately. The fiscal policies of ity between wages, prices, and
our
These 3
government should be de¬ productivity of labor.
signed to help the nation achieve essential factors cannot be ig¬

hostilities

by the particular industries, and
following the agreement on the

income and maintain full employ¬
ment.

industries with the ending of

joyed greater stabilization in their
relations than was ever experi¬
enced by either at any previous
time.
No one can deny that the
general recognition accorded the

ize, and not waste and dissipate
able

.

war

en¬

been
ment.

responsible for this attain¬
It has produced enlighten¬

ment

in labor relations

policy

on

a

matter

of

implementing these

principles.
It
is
important to
point out that in those industries
where unions have been stabilized
for many years

and have enjoyed

contractual relations with the emr

ployers, there has been greater
solidarity as far as the operation
of those businesses are concerned.

We think this is

very

a

important

factor to keep in mind.
With the cooperation

of man¬
free enter¬
prise can withstand any attack
made on it, no matter from what
source.
That is why it is so im¬
agement

and

labor,

portant and

so vital to keep in
mind the matter of implementing

cooperation if
preserving
Labor is more

and cementing this
we

are

interested

in

part of management and labor on
the objective criteria that have

free

enterprise.

been mentioned.•

than

willing and will go all the

Once

tive

;

■

way

such

in
a

contributing its

realization.

part to

We hope man¬

agement will do likewise.

Volume 159

THE COMMERCIAL & FINANCIAL CHRONICLE

Number 4280

Union

Address—500

Calendar Of New

Security Flotations
writers are Kuhn,

OFFERINGS

Indiana.

and Harri-

Loeb 8c Co.

Ripley &' Co., Inc. • Others will be
named by amendment.
Offering price to
the public will be supplied by amendment.

common
stock,
no
par
value.
Stock¬
holders of record May 2 are .given rights to

•subscribe

for

at

shares

share at
rate
of
one mew
share for each three
shares held.
Rights expire May . 12.
Net
proceeds will be used for erection of addi¬
tional
plant facilities or for retirement
and redemption of all or a part of $4.50
■cumulative preferred stock or 3%; deben¬

Filed April 28,1944. Details in "Chronicle,"
May 4.
•

per

Underwriters are Lehman Brothers,

tures.
A.

$15

C,

AUyn & Co., Inc., Bacon, Whipple &
Co., Bear, Stearns 8c Co., A. G. Becker &
Co., Inc., Alex. Brown '8c Bons, Dominick
&
Dominick,
Graham,
Parsons &
Co.,
Granbery, Marache & Lord, Hallgarten &
•Co., Hemphill, Noyes & Co., Hornblower &
Weeks, A. M. Kidder & Co., Ladenburg,
'.Thalmann & Co., Laurence M. Marks & Co.,
Merrill Lynch,
Pierce, Fenner & Beane,
•Paine, Webster, Jackson & Curtis, L. F.
(Rothschild & Co,, Bchoellkopf, Hutton &
Pomeroy, Inc., I. M. Simon 8c. Co., Stroud
&
Co.,
Inc.,
Swiss
American
Corp.,
Wertheim & Co., and White, Weld & Co.
Details in "Chronicle," April 27,

WEST

PENN

POWER

has

CO.

filed

a

registration statement for $12,500,000 first

mortgage bonds;

3%

series L,

1,

due May

transmission of power and for the handling
of materials.

1974.

Address—14 Wood Street,

Pittsburgh.

Business—Public

,

utility company.
Underwriting—To be filed by amendment;
Offering—Price to the public will be
filed by amendment.
The bonds are to
be issued and sold by the company pursu¬
ant
to
the competitive
bidding require¬
,

Underwriting—Central Republic Co., Inc.

Chicago,

the

heads

of underwriters,
with others to be named by amendment.
Offering—Price to the public will be sup¬
plied by amendment.
Proceeds—A portion of the proceeds will
be used to repay a bank loan of $375,000
incurred

list

with

connection

in

the

purchase

on April 21,
1944, of the entire outstand¬
ing capital stock of Etching Company of
America, now a wholly-owned subsidiary of

the company.

of

minimum

a

Of the balance of proceeds,
$500,000 will be used to

bank loans and remainder
be added to working capital.
Registration Statement No. 2-5367. Form
in part,

repay,

will

S-l.

(5-3-44).

Proceeds—Net

UNDETERMINED

be offered at

proceeds will be. ap«
jplied as follows:. To redemption of $243,600
■5% sinking fund notes, due May 1, 1952, at
100, $243,600; to renewal of equipment,
etc., $75,000; for working capital, $74,295,
land for post-war expansion, $80,000.
Il¬
linois Securities Co., Joliet, 111., underwrit¬
ers.
Filed March
24,
1944.
Details in
100 net,

We

below

present

"Chronicle," March 30, 1944.
Offered April 24, 1944 at 100 by Illinois

1

Securities

Co.

BEATRICE

days

offering
mined

offering

initially
tion

to

SOUTH

CORP.—$1,500,000

COAST

first

mortgage 5%. bonds due Dec. 31, 1955.
'Proceeds to redeem $970,248 general mort¬

income

gage

and

6s

Paul H. Davis & Co.

Filed

Jan.

for working capital.
principal underwriter.

24, 1944.

Offered May 8, 1944 by Paul H. Davis &

.

Co.

associates

and

and interest.

100

at

or

more

May. 19

CO.—12,850 shares of 5 % •
•preferred stock, cumulative (par $100>.
Underwriters are Courts & Co., Mulhouse
■Martin & McKnight, Inc., Ingalls 81 Sny¬
der;
Wyatt,
Neal &
Waggoner;
R. S.
•Dickson & Co., Inc.; Kirchofer & Arnold,
Inc.; Robinson-Humphrey & Co.; Brooke,
Tindall & Co.; J. H. Hilsman & Co., Inc.;
Clement. A.
Evans
& Co.,
Inc.;
A.
M.
Law & Co., and H. T. Mills.
Filed March
31,
1944.
Details in "Chronicle," April
TRION

THE

6,

will

be

four shares held

have

dates

or

not

unknown

are

at

100 per

named

above

by

underwriters,

to

us.

1,

HANNA CO.

has filed

registra¬
tion statement for 100,000 shares of $4.25
cumulative preferred stock (no par).
Address—1300
Leader
Building,
Cleve¬
M,

A.

land, O.

statement

for

of
being
through underwrit¬

of which

stock,

issued by

the company
180,850 shares

304,075
23,225

storage of iron
Underwriting

Kuhn,

shares

Offering

three

prior to
.effective

from and

years

after the

date of registration statement.
Proceeds for working capital.
Burr & Co.,
New

York

•April

principal underwriters. Filed
1944,
Details in "Chronicle,"
'
■■
-V-

24,
4. ■

are

has

CO.

HECHT

.statement

filed

a

registration

covering 191,515 shares of com¬

Shares are issued
and outstanding.
Goldman, Sachs & Co.
•arel principal underwriters.
Price to the
public to be filed by amendment.
Filed
;April 25, 1944.
Details in "Chronicle,":
stock

(par

$15).

named

be

MISSISSIPPI VALLEY PUBLIC SERVICE

registered 15,000 shares of 5%
preferred
stock ($100 par).
'Company is offering to holders of its out¬
standing Vo cumulative preferred stock,
series
A, and 6%
cumulative preferred
stock, series B, the privilege of exchanging
their old stock for new preferred on a
share for share basis, with a cash adjust-,
•merit amounting to $7.83y3 a share on the
7% stock and $2.66% a share-on" the 6%
has

cumulative

The exchange offer will expire
at noon, on May 20.
Underwriters are
Milwaukee
Co., 5,750 shares;- Wisconsin
■Co., 4,750; Morris F. Fox & Co.,. 1,500;
Loewi & Co., 1,500;. Bingham, Sheldon &
'Co.,
1,000 all of Milwaukee, 'and A. C.
Tarras & Co., Winona, Minn., 500. . Filed
April 25,
1944.
Details in "Chronicle,"
.preferred.

■May 4.

NORRIS MANUFACTURING
a registration statement for
50,000 shares of common stock (par $10),
The shares are issued and outstanding and
do not represent new financing.
Shields
.& Co. head the underwriting group.
Price
to public to be filed by amendment,
Filed
April 25," 1944.
Details in "Chronicle,"
May 4, • •
McQUAY

-

has filed

WEDNESDAY, MAY 17
INDUSTRIAL RAYDN CORP. has filed a

•registration

statement

for

100,000 shares

of $4.50

preferred stock, series A (no par).
proceeds will be applied together with
any necessary treasury funds, to the re¬
tirement of $10,000,000 promissory notes
to
banks, dated Jan. 3, 1944,- issued to
Net

•

■

retire
an

Co.

$2,400,000

expansion

and

to

program,

finance

in

Harriman Ripley
Others to

and

stock

common

$30

by

De-

March

9,

Shares

CO.—15,000

Price to

(par $1).

pub¬

share.
1,717 shares are being
currently offered to a group of officers and
employees at $21.50 per share under a
separate registration and prospectus.
Nel
proceeds ($446,000)
are
to be used for
per

working capital.

No underwriters named.
30, 1944. Details in "Chronicle,"

Filed Mar.

April 6, 1944.
KANSAS

offering to
128,531

is

company

/its

of

holders

exchange

outstanding

shares

such

shares

for

cumulative preferred stock to

the $4.25

of

the basis of

l-20th shares of $4.25 preferred for

and

share

of

$5

preferred.

Upon

,

'

.

" ' '

,

Registration Statement No. 2-5364. Form
A-2.

(4-29-44).

CO.,

has

SATURDAY, MAY 20
CITY

(Dominion

EDMONTON

OF

of

registration state¬
serial
debentures,
dated May 15, 1944, carrying interest rates
of 3%, 3»/4%, 3%% and 3%%.
Underwriting — Underwriters
are
First
Boston
Corporation, Harriman Ripley &
Co., Inc., Smith, Barney & Co., Dominion
Securities Corporation, A. E. Ames & Co.,
Inc., Wood, Gundy & Co., Inc. and McLeod,
Young,
Weir,
Inc.,
all
of
NewYork.
will

underwritten

Amounts

filed

be

by

derwriter.

Price

interest from
construction

icle,"

amendment.

1

Ai

Proceeds—Proceeds will
deem

on

Aug.

1,

be

used

to

re¬

1944, at the face amount

thereof, $8,718,653 consolidated debentures
dated Feb.
1
1937, and to provide for
of

costs

redeem

on

Aug.

1,

debentures

additional ' consolidated
funds

The city/ will1944, $4,919,702

financing.

from

presently held by the sinking fund
and other monies inade available

trustees

by the city., >:
Registration Statement No. 2-5365. Form
Schedule B.: (5-1-44).

KANSAS

for

has

1945

a

registration

statement

1/1944 due, each June 1 from
Interest rate will

to-1959, .inclusive.

filed by amendment.
Address

—

.

,

•

Building,

Dallas,

of

ment.

the

terest.

Registration Statement No, 2-5366. Form
(5-3-44),

DODGE
a

MANUFACTURING

CORP.

has

registration statement for $1,000,000
4c.'0 sinking fund debentures due

15-year

Principal under-

May 1,

accrued

1944.
Proceeds for
Details in "Chron¬

1959.

Preferred Stock Dividend

in,

"Chronicle," .March

THE regular quarterly dividend of One

0
•

I Dollar Eighteen and Three-quarter
Cents C$1.18M) per share.on the 4%%
cumulative Preferred capital stock of the
company
issued and outstanding in the
hands of the public has been declared out
of the surplus net earnings of the company
for the quarter ending June 30, 1944,
payable July 1, 1944, to holders or
such stock of record on the books of the
,

th? close of business June

at

company

2, 1944.

23,

*
ELECTRIC

amended
&

plan

Power

for
Co.

&

CO.—

POWER

I Forty Cents (40c) per share on the
Common capital stock or the company is¬
sued and outstanding in the hands of the
public has been declared out of the surplus
net earnings of the company for the quarter
ending June 30, 1944, payable June
15, 1944, to holders of such stock of
record on the books of the company at
the close of business May 16,1944.

filed with SEC

plan

April 17, 1944.
following changes

provides

$24,500,000 Of 3%% bonds; (2) $9,000,000
of 2 % % 10-year serial notes will be issued
instead of $5,000,000 214
5-year serial
notes; (3) each share of Vps preference
will
receive one share of new Vepco $5
dividend
preference stock plus, for the
7% Vps preference, $24.^0 in cash and for
6% Vps preference $19 in cash (plus ac¬
crued dividends
restrict

in both cases);

dividend

payments

on

THE regular quarterly dividend of

0

merger of Virginia
and Virginia Public

F. W. DRAGER, Assistant Secretary,

May 10,1944.

Vepco will
common

to

extent which will leave in surplus $11.-

an

020,000 over a period of 10 years as com¬
pared with original proposal of $6,000,000
over

period of five years.
Original plan
28, 1944, details of which were

a

filed Feb.
outlined

in

"Chronicle,"

NOW

MAKING

WAR

PRODUCTS

March 16, 1944.
will be received

Bids for purchase of bonds

by

at

company

Service

12

office of Engineers Public

DIVIDEND

Co., 90 Broad St., New York, before

noon

EWT on

ON

COMMON STOCK

May 22.

($5

par).

GAS

Holders

>

purchase

share

one

at $6.50 a share for each

Rights

the

at

public

of

will

be

26,

be

taken

will

$6.50

at

the

$7

share

a

of

to

com¬

1944.
Un •
up by the

and

share.

per

preferred

offered

Offering

public

the

is

Proceeds from sale of stock

share.

a

of

four shares

May

expire

shares

underwriters

used

to

defray

of

costs

con¬

struction

expenditures.

stock

First Trust Co. of Lincoln, Neb.;

are

Cruttenden
&

United

Trust

Frank
in

& Co.,

Underwriters

for

Chicago; Beecroft, Cole
& Co.,

Co., Topeka; Harold E. Wood
Paul; Rauscher, Pierce & Co.,

St.

VERTIENTES-CAMAGUEY

SUGAR

CO.

Dallas;

go. of Abilene, Kansas, and

8c Belden,

Inc., Minneapolis. Details

"Chronicle," April 27, 1944.

shares
of
common
S, currency, Of shrs.
registered,
443,850 are outstanding and
owned by the National City Bank, N. Y.
Several underwriters have agreed to pur¬
chase $1,663,500 of first mortgage
(col¬
CUBA.—696,702

lateral) 5%
due

Oct.

registration

a

first

sale

bonds

$100).
Proceeds from
and. stock, together with

(par

bonds

on

000 iVz7o
at

or

at

110.

dividend

and

($100 par) $0
Interest rate on

shares

33,060

preferred, stock
bonds

about July 1, 1944, $9,000.-

first mortgage bonds, due 1960,

and

105

rate

stock

on

will

be

filed by amendment.
The bonds and stock
are
to be offered for sale at competitive

■bidding.

Details in "Chronicle," April 27,

1944.
.

Bids

for the purchase

preferred

of the bonds and

will be received by, the
to 12 noon EWT May 15 at 61
Y. City, the purchasers to

stock

company up
the

N.

interest
rate

rate
on

has filed.

on

the

bonds

a

the preferred

registration statement for

of

preferred

an

by exchange
equal number of

Shares of its 7 7c, 6% and 5%% preferred
stock, the exchange to be on a share for
share basis plus a cash payment to be filed
by

amendment.

Stone

&

Webster

and

Blodget,1 Inc., and Harriman Ripley & Co.,
Inc., New York, are principal underwriters
Details

in "Chronicle" April 27, 1944.
Exemption from competitive bidding rule

by SEC

in

stockholders

to

the

payable

dose of business

May 20, 1944.
B. E. HUTCHINSON

Chairman, Finance

Committee

——■—★

Universal Pictures

Handy Record Book Co.
prepared the Handy Record

opinion

issued

DIVIDEND

for investors and traders with the

"automatic"

The Board of Directors has declared

long and short term

a

dividend of $1.00

per

share

on

the

indicator; showing at a glance ex¬
actly what securities holdings are,
what they cost, when each item
becomes "long term."
Designed
as
a
timeand work-saver, it

k—

helps make income tax determi¬
nations easier.
It has a durable

Spencer Hellogs& fto.ntf,. Site.

cloth-bound

cover

and fits

coat-

a

pocket or safe-deposit box. Copies
are $1 postpaid and may obtained
from the Handy Record Book Co.,

outstanding stock of the Company,

payable May 31,1944 to stockholders
of record
on

A

at

the close

of business

May 17, 1944.

★

——■—

Dividend of $0.46 per share has
on
the stock, payable June 10,.
of record as of the close
May 20, 1944,

Quarterly

been

declared

1944,

to Stockholders

of

business

JAMES 'L.

WICKSTEAD.

Treasurer

Broadway, New York City,

The New York Central Railroad Co.
York/ May 10, 1944.
Cents (50c) per share"
this company has been'

New

St. Paul Interesting

A
on

interesting
&
Hickey on the third supplemental
report of the ICC, certain amend¬
ed rulings greatly strengthen the
position of the income bonds and
the preferred stock. Copies of the
According

memorandum

to

an

issued

by Vilas

memorandum discussing the

situa¬

tion, may be;had upon
from Vilas
& Hickey,

bequest
49 Wall
Street, New York City, members

of the New York Stock Exchange.

dividend of Fifty
the capital stock of

declared payable July
the
Treasurer, 466

15, 1944t, at the Office of
Lexington

17, N. Y., to stockholders of
the close of business May 27, 1944.
GUSTAVE

H.

New
record at

Avenue,

York

HOWE,

Treasurer,

IB M A dividend of 10 cents a
IBB'

share

&<j)
JShsIm

on

the

Capital

Stock

has been declared, payable
June 30, 1944, to stockhold-

rrmfMlHnll

ers

of record May 31,

1944.

THE UNITED GAS IMPROVEMENT CO.
JOHNS HOPKINS, Treasurer

April 25,1944

Philadelphia, Pa,

stock.

to effect the retirement

redemption

1944,
at

the out¬

on

The

has

and

220,078 shares of 5% cumulative preferred
stock, par $100 per .share.
Company plans
stock

14,

record

share
stock,

common

Investors And Traders

Oil Co. Earnings

NORTHERN INDIANA PUBLIC SERVICE
CO.

dividend of seventyper

Handy Record Book For

for $9,000,due March 1,

additional funds from treasury will be used
to redeem

of

April 6, 1944.

statement

mortgage

stock

of

June

convertible bonds of company,

Chrysler Corporation

a

($.75)

standing

1951, owned by National City
Bank, N. Y. Underwriters propose to con¬
vert these bonds at or prior to closing and
the 252,852 shares of common stock which
are
received by the underwriters on such
conversion, together with the 443,850 shrs.
previously mentioned, will make up the
total stock to be offered. Harriman Ripley
& Co., Inc., N. Y., principal underwriter.
Filed Mar 29, 1944. Details in "Chronicle,"

and 30,000 shares of cumulative pre¬

ferred

flve cents

1,

NEW JERSEY POWER & LIGHT CO. has

1974,

have declared

stock ($6.50 par), U,

656
filed

The directors of

•

OF

Company, Inc.
NATURAL

stock of record May 12 are offered

right to

denied,

Offering—Price to the public will be
furnished by post-effective amendment.
Proceeds—Proceeds from the sale .of the
bonds, together with such additional cash
from its general funds as may be neces¬
sary, will be
used to redeem $3,567,700
principal amount of first mortgage gold
bonds, 6% series due 1951, at 102 and in¬

filed

stock

common

held.

or-

.

electric, street. rail¬
and motor coach service in Dallas and
vicinity.
.Underwriting—The bonds are to be of¬
fered .for sale by the company under the
competitive bidding requirements of the
Securities and Exchange Rule U-50. Names
of. underwriters will be supplied by amend¬
Business—Supplies

way

S-l,

1,

to issue the 220,078 shares of 5%

Interurban

■'■'./jf

Texas.

Details

—

—

cumulative

1944.

NEBRASKA

-

the dividend

$3,000,000; first ..mortgage serial bonds

dated. June,
be

filed

CORP.

preferred
stock (par $100).
Proceeds will be used
for the acquisition of a maximum of 8,649
shares of Western Grocer Co. 7% preferred
In exchange of shares and $575,000 will be
applied to retirement of 5,750 shares of 6%
cumulative preferred of Sprague at $100
per share.
Company also plans to issue
$3,250,000
face
amount
of
installment
promissory notes and use proceeds as ad¬
ditional working capital.
A. C. Allyn &
Co,, Inc., underwriter.
Filed March 16,

RAILWAY & TERMINAL COM¬

DALLAS
PANY

April

of

preferred stock (no par) and 58,638 shares'

name

' MONDAY, MAY 22

'

exclusive

107

purposes.

April 27,

Broadway,
,

state¬

CO., INC., has filed a registration, state-,
merit for 2,000 shares of $5 cumulative

000

Offering—Offering price to the public
plus'accrued interest from May 15, 1944,
to
date of delivery will be supplied by

registration

a

for

$105

Canada)
has filed a
ment
for
$9,150,000

filed

GAS

$1,500,000 first mortgage sinking
fund bonds 4% series C, due April 1, 1959.
Central Republic 'Co.,
Inc., Chicago, un¬

to

.

NATURAL

NEBRASKA

-

INC.,

ment

price

part




Names

public

1944.
1944.

"Chronicle,"

PAPER

CARPENTER
of

amendment.

by

Offering—The
the

also

CO.

—

8c

shares of $5 cumulative preferred stock the

certain

May 4.

CO,

Loeb

coal and coke, etc.
Principal
underwriters

ore,

amendment.

SUNDAY, MAY 14

to

29,

Co., Inc., both of New York.

&

are

by three present
price to public on
■'204.075 shares is $3.75 per share.
Aii ad¬
ditional 100,000 shares is reserved against
the exercise of warrants to purchase 100,000 shares of common, at $4.50 per share,
and

'stockholders.

>

bituminous

and

operating lake vessels and
docks for the transportation, handling arid
mines,

in

Details

subscribed

STERLING ENGINE CO. has filed a reg¬
istration
•common

mon

iron

managing

anthracite

and

6%

1944.

lic

mines

ore

coal

1943-.

Stock.

SATURDAY, MAY 13

•

a

mon

SEC.

Trust.

price

March

Co.,/are

common

less accelerated at the

and

per share.
Glore,
Jerred shares (for purpose of conversion).
principal underwriters,.
Proceeds to retire bank loans and working
Filed April 29, 1944. Details in "Chronicle,"
capital.
Pacific Co. of Calif, and Wyetlj
May 4.
\
; ■
■; .
& Co. named underwriters.
Filed Dec. 20,

&

underwriters shares of. the $4.25 cumulative

registration
course

Cushman

A.

Filed

iaiis, in /"Chronicle," April 6,

discretion of the

according to dates
statements will

grouped

ago,

which

L.

underwriters

amendments.

become effective, un¬

registration

whose

tissues

normal

May

of

trustees

of

preferred as may not be .issued pursuant
to the exchange offer.
Purpose—For refunding present preferred

days

ers

to

declar¬
ing the plan of exchange effective the
company will call for redemption any of
the shares of the $5 cumulative preferred
which are not deposited for exchange,
To
provide a portion of the funds to effect
such redemption the company may sell to

NEW FILINGS
of

■List

on

of

$105.50

each

statements were filed less than twenty

CO.—13,000 shr's.

1944. Proceeds;;
together tfith other treasury funds; "will V
BENrHUR PRODUCTS, INC. — $300,000
be used to redeem on Aug. 1, 1944,, com¬
5% convertible debentures, series of 1943,
pany's outstanding $4.25 cumulative pre¬
due Feb. 1,
1951 and 11,400 prior pre-;
ferred stock at

1

in

Holders

the extent of 95,238 shares on

share.

AMERICAN BAKERIES

a

privilege

given

to June

of

from original plan: (1) $23,000,000 of 3%
bonds of
Vepco will be sold instead of

of -class B stock (no par).
The stock of¬
shares
fered for sale is that of L. A. Cushnian
($25 par).
Company is
.and
Martha
Bryan
Allen
Cushman
as
the shares for subscript

subscribe for One additional share for each

right to

1944.
Offered

filed

//

——t

SPRAGUE-WARNER-KENNEY

15,000 shares

Amended

but whose
been deter¬

ago,

100,433

Business—Operating and
:

has

CO.

for

stockholders.

common

record

Forgan

'

CREAMERY

statement
stock

common

AMERICAN HAS

MO ELECTKKJ COMPANY

1944.

Service Co.

of lssuea

list

a

whose registration statements were filed

twenty

(4-28-44).

registration
of

March 16,

Electric

THURSDAY, MAY 18
KLINE BROTHERS CO.—$500,000 5%
'sinking fund notes, due March 1, 1954. To

competitive bid¬
Registration effective Jan. 10, 1944.
1943. Details in "Chronicle,"

ding.

An

1944.

I

will be offered for sale at
Filed Dec. 21,

VIRGINIA

OF OFFERING

DATES

Registration Statement No. 2-5362. Form
A-2.

DIVIDEND NOTICES

Common Stock Dividend

may

.

.

exchange of $6 preferred of
Light & Power Co,
(sub¬
share for share basis.
Bonds

1944.

be required,
be used for the redemption of the
outstanding $12,500,000 principal amount,
of first mortgage gold bonds, series E, 5%
on
Sept, 1, 1944, at 105 and accrued in-,
terest.
:
as

on

with

together

proceeds,
funds

to

are

for

is

sidiary)

1944.

•;

ments of the SEC's Rule U-50.

such additional

Stock

Southwestern

'

Business—Machinery for the mechanical

man

FLINTKOTE COMPANY has filed a reg¬
istration statement for 237,902, shares of

Mishawaka,

Street,

1943

May

5,

Investment

The

Research

De¬

partment of Thomson, McKinnon,
231 South La Salle St., Chicago,

IU., members of. the New York
Stock Exchange and othec Ex¬
changes, has just prepared a brief
analysis of the petroleum indus¬
try which discusses the present
international situation and gives
current statistics on leading com^

Copies may be had from
the firm on request.
panies.

Facts, Figures, Opinions
On Leading Rank Stocks
Mississippi
Louis,
Mom have prepared an interesting
brochure containing facts, figures
and opinions on the nation's lead¬
ing bank stocks, including the
post-war outlook. Copies of this
White

&

Company,

Valley Trust Building, St.

brochure and a convenient refer¬
ence

table of figures on

and bank stocks may be

insurance
had upon

request from White & Company.
PLOMB TOOL COv—$600,000 10-year 57
debentures due Jan. l, 1954.

-

Mallory Interesting

convertible

Proceeds will be used to redeem first mort¬

bonds,, reimbursement of company for
funds used to redeem preferred shares and
reduction in V-loan, * Price to public and
gage

names
of
underwriters
by
amendments.
Filed Mar. 29, 1944. Details in "Chronicle,"
'April 6, 1944.

PUBLIC SERVICE

500,000
(par

5%.

$100)

bonds,

CO. OF OKLA.—$1,preferred
stock
$6,600,000 first mortgage
A 3%%
due Feb. 1, 1971,

cumulative

and

series

P." ft. Mallory & Co., Inc.,

offers

———B—■——

Fuel Stock Interesting

Davis Coal & Coke Co. common
interesting situation, according
to an analysis prepared by Steiner, offers an attractive situation, ac¬
Rouse & Co., 25 Broad St., New cording to a memorandum just
York City, members of the New issued by Hill, Thompson & Co.,
York Stock Exchange. Copies of Inc., 120 Broadway, N. Y, City*v
this analysis may be had from Copies of this interesting memo¬
Steiner, Rouse & Co. upon re¬ randum may be had upon request
an

quest.

from Hill, Thompson

& Co.

THE COMMERCIAL &

1944

Thursday, May 11, 1944

FINANCIAL CHRONICLE

New

REMEMBER...

N. Y. 1-971

Teletype

HAnover 2-0050

England Pub. Serv.

Merrimack Mfg. Co.

Markets

Firm Trading

Metropolitan Jockey Club

WITH no retail sales department of our own,

FOREIGN SECURITIES

confining

but

business

our

entirely

to

American

trading markets.

actual

Distilling

Plain

AH Issues

f!ARL MARKS & CO-

WE are

INC.

competitors of, but collaborators

not

dealers, in

with, all retail distributing

M. S. WlEN & Co.

FOREIGN SECURITIES

SPECIALISTS

OVER

New York 4, N. Y.

50 Broad Street
=====

AFFILIATE: CARL MARKS & CO.

of three months.

course

'

'

York

New

NASSAU

Security

Dealers

STREET,

philadelphia

telephone

8IDS MADE ON BONDS WITH

telephone

YORK
Bell
new

COUPONS MISSING

5

OR

Teletype
york

1-578

MUTILATED
Inquiries invited

Majestic Radio & Television Corp.

...

And The Post-War World

?

Members

By HORACE MARION

#

Each

day sees

new

some

radio.

prospects for
Broadcasters,

Inc., made another noteworthy contribution with his prediction
sales of receiving sets may hit the 20,000,000 mark in the first

that
four

after the War.
In the light of such predictions^
ceiving sets per 8-hour day. Op¬
a recent analysis of Majestic Ra¬
dio & Television Corp. by a prom¬ erations at the plant consist pri¬
inent over-the-counter firm, seems marily of assembly of parts made
quite pertinent at this time.
A for Majestic by other concerns
years

of

review

this

analysis discloses

that the company, as

...

known from coast to

expected, for the market discerned in
be a good deal of advance prepara¬
tion.
Tenders for the weekly issues rose steeply, until they
regularly exceeded $2,000,000,000.
The apparent competition failed
to lower the rate, however, which held to the % % Federal Reserve
buying figure.
Indicative was the lack of any increase in the
fixed-price applications for small amounts. ...
bill

increase

months

.

what

was

.

.

question comes up of the further increase of

Now the

the

bill

an

advance

all-round

to

$2,000,000,000,

market factor of

primary importance.

.

so

.

Owing to the current policy of excluding the commercial banks
from war loan drive subscriptions, it may come as a shock to some
interim

that

sumed.

.

.

through
them;

.

.

from the banking system has been re¬
adding to their holdings in any event,

borrowing
But banks

market

are

the

during

both

purchases

drives

and

important factors would be a

productive capacity to
capitalize on its repu¬
during such a period of

.

.

.

.

Considerable further activities are

in

between

500,000.
Earnings for the fiscal year
ended May 21f 1943, amounted to

.

in spite of the
government orders yield
much smaller profits than normal
civilian

adding once
more—and substantially-—to the floating debt of the Treasury.
Ordinary maturities of the Treasury for the next 12 months now
are just short of
$44,000,000,000. . . . Current redemption value of
outstanding savings bonds, which are demand obligations, stood at
$32,497,000,000 on May 1.
The total of, roughly, $76,500,000,000
debt due and potentially payable within one year is 41.3% of the
interest-bearing debt of $184,967,000,000.
:
,
.

.

Treasury debt

contemplated borrowings

.

.

.

.

Gross

is

now

soon

a

will

little
press

.

over

$187,000,000,000 and

against the current author¬

ization for contracting up to $210,000,000,000 of indebtedness.
.
.
.
The Treasury request for a step-up to $260,000,000,000 is, however,
not to be granted in full. ... At hearings last Tuesday before the

House Ways and Means

production.
company's debentures

Since the

paid off on Aug. 1, 1943, the
capitalization is quite simple, con¬
sisting of only 39,084 shares of
no par value preferred stock and
993,06.9 shares of common stock of
10 par value. According to the
analysis,
a
recent offering
of
about
70,000 shares of common

were

which was heavily

oversubscribed,

-represent new financing.
In summary, the analysis pre¬
sents a picture of a company that
has passed through many vicissi¬
tudes and has finally emerged in
did

not

very

condition with

satisfactory

excellent future possibilities.

Form New

Partnership

As McDonald & Go.
CLEVELAND, OHIO—C. B. Mc¬

of McDonUnion Com¬

Donald and associates

ald-Coolidge & Co.,

Building,

merce

forming

are

a

Richard C. Lux.
McDonald-Coolidge offices

H. Warner and

The

in Cleveland, Akron, Canton, Co¬
remain minor, which is to be expected in
controls, the established money curve and the lumbus, Lima, Springfield and
Cincinnati will become McDonald
impending issuance of billions of new securities at par. ... Gains
& Co. offices as soon as legal re¬
or losses of a thirty-second or two usually are offset the following
quirements are complied with. ,
day.
.
.
.
Like others, bank officials are watching the horizon
carefully for signs of the coming invasions of Hitler's "Fortress
Europe," and are making only modest changes in portfolios. . . .
Spiegel With Sutro Bros.
Even the partially tax
exempt bonds are dull for the time
I. D. Spiegel, formerly co-man¬
being.
.
.
The tax simplification bil- has * progressed to a point ager of the Fifth Avenue office of
where it is evident that only individual and not corporate taxes will
Herzfeld
&
Stern,
has become
be affected by the normal tax exemption of these issues. . . . The
associated with Sutro Bros. & Co.,
individual holder will, unless the bill is changed radically hereafter,
members New York Stock Ex¬
find his exemption cut to 3% of the income on these bonds, against
change, 120 Broadway, New York
the former 6% and a further 3% of Victory tax. ... On the day
City.
this news came out of Washington the bonds were motionless, which,
reflects the lack of individual concern and the concentration of

Market fluctuations

discount bill increase has the further angle of

.

Teletype N. Y. 1-1779

is holding its own

•

The

Dealers Ass'n

fact that

.

MARKET ACTION
IMPACT ON TEMPORARY DEBT

Security

DIgby 4-4832

.

.

Y.

partnership to be known as Mc¬
2f7 cents per common share after Donald & Co., it is announced.
tation
final renegotiation and all other The new firm will carry on the
great demand. In this connection
general corporate and municipal
it is most interesting to note that charges. In the six months ended
security underwriting and distrib¬
the manufacturing plant at Chi¬ Nov. 30, 1943, earnings were some
11 cents per share, which would uting business with no change in
cago is said to have the amazing
policies, Mr. McDonald said.
output capacity of 3,000 radio re- seem to indicate that the company
Partners will be Mr. McDonald,
F. A. McDonald, Eldon H. Keller,
lican demands that the next limitation will be $240,000,000,000. . . .
Harris
B. McLaren,
Herman J.
This little dispute is, of course, purely political, for there is^ no
Sheedy, H. McDonald, Hans P.
actual debt limit but only a question of Congressional authoriza¬
Lauritzen, Charles E. Lovell, Alva
tions.
As funds are needed for the war they will" be voted. . . .

enable it to

that $26,If this is the
program, it is evident that the supply of new longer-term obli¬
gations will be modified correspondingly, which will prove a
mind

course,

sufficient

Issues, when all have been raised to the $1,200,000,000 figure. . . .
There were rumors around late last year that the Treasury had
000,000,000 eventually would be outstanding.

coast.

the hurly-burly also conducted in the field of ra¬
competition sure to be stimulated dar and electronics, particularly
in the production of Piezo quartz
by the type of demand indicated
by Mr. Damm, the company will crystals. The unfilled order back¬
require much more than a well- log, as of the date of the analysis,
amounted to in excess of $7,publicized trade name and one of
Of

it took to

.

.

In

Phone

.

The

recent

N.

Exchange PI., N. Y. 5, N. Y.'

40

addition to the already tremendous

publicity in connection with the post-war
Recently, Walter J. Damm, President of FM

amount of

s

S. H. JungerCo.

and only
59,000 square feet of
the successor working space are required for a
to the right, title and interest of production that would do credit
system.
Grigsby-Grunow
in the
trade to a plant several times the size.
But the discount bill mechanism will prove an easy means for
As to patents, the company has
mark "Majestic" has inherited a
facilitating whatever growth in the System holdings may be deemed
trade name on which it is esti¬ many of its own and, in addition,
necessary or advisable. ... And it is incontestable that, if there
holds licenses-from RCA and Hamated that upwards of $20,000,008
must be large additions, the shortest Treasury obligations are the
zeltine to make either radio, tele¬
was expended by the predecessors.
most suitable for the purpose, and the least dangerous.
.
.
.
The
Recent
surveys
by independent vision or both under their patents*
concentration of bills in the Open Market Portfolio is worth ponder¬
Currently the company is en¬
research
organizations
would
ing.
The holdings last week were $7,666,000,000, out of $13,gaged 100% in war work, manu¬
seem to confirm the values inher¬
128,000,000 outstanding. . . .
.
,
.;
ent in the name since they indi¬ facturing the well known "Walkie
cate that it is well and favorably Talkies" and the Marker Beacon.
BILL RATE UNCHANGED
.

1-1397

Association

NEW

Enterprise 6015

2-3600

RECTOB

...

.

HAnover 2-8780
Y.

N.

INCORPORATED

'

.

policy move of great

a

'

45

significance which plainly has
the approval of the Federal Reserve Open Market Committee. . ..
It is clear that the Open Market Portfolio will
become the
repository of most of the new bills, for the banks and dealers
who will buy them in the first place are fully invested, and will
turn over the excess acquisitions to the regional institutions. ...
In effect, therefore, virtually all the new money raised on bills
will be government borrowing from the central bank. ...
That the situation demands more borrowing of this nature,
with its attendant increase of the credit potential, was recognized
by the Federal Reserve Board in mid-March. . . . The program
then outlined was* an addition to the Open Market Portfolio of
up to $3,000,000,000 before the Fifth War Loan drive begins on
June 12.
The actual gain up to a week ago was $1,182,000,000, to a total of $13,292,000,000. . . . Only a month now remains
before the next drive opens, and it seems improbable that the
credit hypodermic will needle all of the $3,000,000,000 into the
This is

'

.

'i '

Members

financing program now
has been disclosed.
Borrowing from the banking system was
resumed this week, through an increase of the weekly discount bill
issues to $1,200,000,000 from the $1,000,000,000 level. ... The entire
cycle of 13 issues of 91-day paper will, of course, be raised to the new
level, and $2,600,000,000 borrowed from banks in this manner in the
.

Teletype

Kobbe, Gearhart & Company
'

in the Treasury war

Another vital step

Y. Security Dealers Ass'n

25 Broad St., N.Y.

Always)

Inc. CHICAG0=^

BRADBURY

By ELIIIU

Members N.

CCKJXTER SECURITIES

-

(Actual Trading Markets,

On Governments"

"Our Reporter

THE

-

Committee, the Treasury agreed to Repub-

view

of

the

rigid

.

exempts in bank and corporate hands. . . .
looking with a friendly eye, just now, at
the Z7/gS due March 15, 1960, callable March 15, 1955. . . . The
Page
relatively high coupon on these $2,611,000,000 bonds gives assur¬
Bank and Insurance Stocks......... 1930
ance that they will be considered by many, in a matter of months,
Broker-Dealer Personnel Items
1943
within the 10-year maturity to which commercial banks are
Calendar of New Security Flotations 1943
supposed to limit their holdings. . , . The premium of nearly 12
Canadian Securities
1928
points is a tax factor of importance for banks. . . ,
Municipal News and Notes
1923
Another interesting item is the investment practice of leading
Mutual Funds
1926
States and cities, some of which have large sums which are moving
Our Reporter on Governments...... 1944
into governments.,
.
New York State usually sets the pace for
Our Reporter's Report
.
1939
other State regimes, and currently has a surplus of some $140,000,000
Public Utility Securities
1918
Railroad Securities
......1919 which Governor Dewey has stated will ,be invested temporarily in
Real Estate Securities
1920 Treasury obligations. . . . Early this week, Comptroller Frank C.
Moore disclosed that New York State holdings of Federals had
Security Salesman's Corner
..1940
jumped in a year from $4,000,000 to $79,000,000, and that Series C
Tomorrow's Markets—Walter Whyte
savings notes are the instruments of this investment.
holdings of the partially

Tennessee Products
Eastern States Pfd.

Pressurelube

Stand. Coated Prod. Pfd.
Cent, of Ga. Mobile 5s, 1946

Market experts are

INDEX

.

W. T. BONN & CO.
120

Broadway
Telephone
Bell

New York 5

COrtlandt 7-0744

Teletype NY 1-886




Says

.........

....1923

The Davis Coal & Coke

Company
Common Stock
Memorandum

on

request

.

Hill, Thompson & Co., Inc.
Markets and

120

Situations for Dealers

Broadway, New York 5

Tel. REctor 2-2020

Tele. NY 1-2660