The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
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*
Simpson, Tfaacher & Barttett
—.
>»
7ie COMMERCIAL and FINANCIAL
Reg. U. S. Pat. Office
ESTABLISHED 1839
Volume
New York 7, N.
Number 5950
191
Y., Thursday, May 12, 1960
Price
Cents
50
In
Copy
a
2
Sections
—
Section
1
>vJ
AS WE SEE IT
jm,iai
How Long Can We Continue to
members of Congress who voted for the measure
diich in 1887 created the Interstate Commerce Comlission had been told what the history of this agency
,/ould be and what was to become of the railroads under
lits jurisdiction, they, we are certain, would have been
[f the
With Our Financial Fiction
the federal debt is $300
By Dr. Melchior Palyi, Chicago, Illinois
incredulous. If the framers of the Sherman Act
[three years later could have foreseen the proliferation
[of legislation to prevent monopoly and of the agencies
[created to administer these laws, they too, would not
[have taken the forecast at all seriously. No one, we are
trillion
[quite
certain, at the turn
Economist
of the century forsaw even in dim
a
include
an
a
$50
a
billion
national
for
though the debt is close to $300 billion.
legerdemain,
and
inconsistent
Is the national debt a
recently
ac¬
is
no
of the overextended
An
over-inflated and rapidly grow¬
Taken
burden
on
the Nation? It is
debt in the common mean¬
Federal Trade Commission, a
cians,
or
states
the
are
at least
now
have
same
In
all
and
of them
are
not. In addition,
the alleged
accept
the
pile
it not
(Continued on page 22)
one
learn
Mammoth
the
the
other"
sort.
"two pockets" principle asserts that,
in contrast to private debts, servicing the public
debt merely means a transfer of income from one
group to the other. Real resources are not affected.
"The fact that the government owes its citizens
the
certain
to
as
Debt
a
sums
is not really a burden on the
nation
whole," concluded The (London) Economist of
November
neces¬
tax
Dr. Melchior Palyi
sity of its further growth. Let
us
go on accumulating budget
deficits whenever "needed."
Consider the size of
public utility commissions to carry on
of supervision and regulation. Still
empowered to meddle in
should
we
with
the
1
type
further, regular departments of government now often
are
short,
live
to
of any
Yet,
a
tional debts all over the world.
certainly not independent of the politi¬
some
it
den
—
though they
Ideological Reminder
literally,
for claims of all kinds—and there is no debt bur¬
host of Managed
Creeping Inflation
advocates.
They point to the
skyrocketing, since 1914, of na¬
Federal Maritime Board, and a National Labor Relations
Board
all commonly called "independent agencies,"
national debt.
principle of "one pocket
applies to a communistic
society only. Where everything belongs to the
state, all liabilities are a matter of mere book¬
keeping. And vice versa: he who denies that the
Debt is more than a bookkeeping item, wittingly
or unwittingly negates the system of private prop¬
erty. Under that system, the "pockets" of credi¬
tors are distinctly separate from those of debtors.
A gain of the one is no compensation for a loss to
the other. Incidentally, if the two "pockets" are in
effect two sides of a ledger, then the same holds
ing of the term, goes back to
the famous, or infamous John
Law in the early 18thcentury.
If so, it need not be, virtually
never
has
been, repaid — ac¬
cording to
Money and
overcome
the phenomenon of an inflated
another chapter.)
that the public debt
in
The theory
monetization?
depressions
midst of booms), maintain full employ-1
ourselves into
ever-greater richness? He who believes in Infla¬
tion as a panacea for curing social ills, alleged or
real, is driven to justify the existence and growth
that it is being held domestically,
proclaimed President F. D. Roosevelt. "One pocket
owes
it tc the other." (Debt owed to foreigners
belongs
recurrent
how would we
the
(in
provided
not,
its
and
Debt
ment, whatever that is, and spend
resulting from our debt load; "faked
fiscal
the
Otherwise,
Palyi attacks "something-for-nothing illusion" of liquid¬
sheets";
$300
ingful sense, it might be considered as a wealth-:
creating asset. How, indeed, could one enjoy all
"blessings" of currency-diluting if it were not
owes
Commission, a Federal Communications
Civil Aeronautics Board, a Securities and
a
about
"hollered"
so
or
the
ing structure of non-federal debts.
Federal Power
Commission,
longer do
national debt holding up an
Interstate Commerce Commission,
Exchange Commission,
no
ahead of dubious GNP, and
public service by calling sharp attention to
one
highly important phase or aspect of this situation—
public regulation of utility enterprises. Utilities are de¬
fined, as they should be, to include electric, gas, tele¬
phone, telegraph and water companies as well as the
railroads, trolleys and buses, highway and water car¬
riers, and airlines. Agencies of Federal Government
now
bankers who
on
it to ourselves
counting practices. Author comments on our debt zooming
I performed a
alone
(b)
debt
balance
those living in this day and time who do not
fully realize the extent to which government of all types,
but particularly the Federal Government, has reached
[out to place its dead hand upon business in this country.
York Chamber of Commerce just
the nation as a whole, and
burden
a
economic consequences
are
The New
and
large
a
and, thus, is not
owe
we
ity and economic strength, and sees harmful far reaching
agencies designed to place business more and more
[under the thumb of government that would characterize
the first half of the century ahead. It may even be that
ent
[there
of
advocates
answers
(a)
Or.
[outline the growth of legislation and so-called independ¬
pointedly
rising federal debt who claim:
billion (nine zeros)
(twelve zeros). The clear implication was
national liability in a mean¬
that far from being a
21, 1959. That would be true if a 100%
on
income derived from federal
levied
securities. Of course, no one
long ago: it makes no difference whether
taken at the 24th Annual Dinner of the Security
in Section Two of today's issue.
PICTURES IN THIS ISSUE: Candid photos
would buy the bonds,
Federal Reserve that delivers to the
Treasury practically all earnings on its huge port¬
folio instead of putting
(Continued on page 26)
except the
irrelevant. As a Harvard professor put
as
so
were
State,
Traders Association of New York, Inc. appear
U. S.
Municipal
Government,
Public
State and
and Public
Housing,
UNDERWRITERS
Municipal
and
STATE and MUNICIPAL
•:
DISTRIBUTORS
CHEMICAL BANK
SECURITIES
Bond Department
THE
Riverside, San Diego, Santa Ana,
Burnham and
MEMBERS NEW
15 BROAD
CABLE:
YORK ANO
STREET, NEW
COBURNHAM
AMERICAN STOCK
Santa Monica, Whittier
OF NEW YORK
Company
Inquiries Invited
,
EXCHANGES
Bond Dept.
YORK 5, N.Y. • Dl 4-1400
TELETYPE NY 1-2262
Net
To
underwriter
Active
Teletype: NY 1-708
New
Maintained
and Brokers
Markets
Dealers, Banks
ESTABLISHED 1832
Correspondent
—
ROYAL
■■
Chase Manhattan
Southern
BANK
California Securities
THE
Pershing St Co.
HAnover 2-6000
BANK
OF CANADA
canadian
securities
T.L.WATSON&CO.
York
on
C
Notes
Oceanside, Pasadena, Pomona, Redlands,
THE FIRST NATIONAL CITY BANK
TRUST COMPANY
distributor
Claremont, Corona del Mar,
Encino, Glendale, Hollywood, Long Beach,
NEW YORK
New York 15
in
Agency
Bonds and
Exchange
Members Pacific Coast Exchange
Offices
Housing
Exchange
Associate Member American Stock
INVESTME NT
30 Broad Street
California
Members New York Stock
BONDS
of
telephone: HAnover 2-3700
Angeles 17,
623 So. Hope Street, Los
-•
Securities
BOND DEPARTMENT
Lester, Ryons & Co.
Rights
We
offer
to
buy
which expire
on
the above rights
June 27, 1960 at
the current market.
Members
New York Stock
FIRST
American
25 BROAD
N. Y.
DIRECT WIRES TO
t
DALIjA.3
•
PERTH AMBOY
Goodbody &
2 BROADWAY
-
NEW YORK
Toronto, Montreal, Winnipeg, Calgary,
Vancouver, Victoria and Halifax
dominion Securities
MONTREAL AND TORONTO
MEMBERS NEW YORK STOCK
BRIDGEPORT
Direct Private Wires to
On All
CANADIAN DEPARTMENT
Teletype NY 1-2270
STREET
NEW YORK 4,
Inquiries Invited
Commission Orders Executed
Canadian Exchanges
Stock Exchange
<§oui/uoe4t
COMPANY
Block
,
Exchange
Co.
EXCHANGE
1 NORTH LA SALLE ST.
CHICAGO
Corporation
Associate Member American Stock Exchange
40
Exchange Place, New York 5, N. Y.
Tel. WHitehall 4-8161
Tele. NY 1-702-3
MunicipalBonds
FOR COMMUNITY
PROTECTION
MUNICIPAL BOND DEPARTMENT
Bank
of
America
N.T. A S. A.
Stn Francisco
Los
Angeles
\
.
I Like Best...
The Security
Brokers, Dealers only
LYNN L.
Inc.—Lynn
Research Dept.,
Dallas Rupe & Son, Inc., Dal¬
reaches
Contacts
broad
a
through
Inc., Dallas, Texas
of
range
the
wide wire system.
To make
possible coverage,
HANSEATIC."
"Call
.
offering
body
New York Hanseatic
Established
Associate Member
American Stock Exchange
Broadway, New York 5
Teletype NY 1-40
WOrth 4-2300
BOSTON
PHILADELPHIA
Private
Wires
•
FRANCISCO
to Principal Cities
public with its
first opportu¬
Lynn L. McCormick
nity
to
par¬
ticipate in the growth of an oldline
established
company
in
a
rapidly expanding growth field.
GROSSMAN
Members
heretofore has been a
institution
family
Security Dealers Aifu
N. Y.
The
forms.
business
& CO. INC.
company
recently
anniversary.
on
its
(Active and Inactive Issues)
dollars
Exchange Place, New York 5
WHitehaU
3-7830
in
total
Bassett Furniture Industries
Life Insurance Co. of Va.
Commonwealth Natural Gas
STRADER and COMPANY, Inc.
LYNCHBURG, VA.
LD 39
-5-2527—
Private
Wire
to
New
TWX LY 77
York
City
in¬
an
company
of
it
$11.2
dividend
is
today
million
million.
The
every
com¬
business
Ennis
forms.
is
Forms
Business
rapidly expanding
of register forms,
now
field
the
snap-a-part
forms,
tabulating
machine cards, and tabulating and
CANADIAN INDUSTRYconsidering in¬
expanding econ¬
omy of Canada?
Many investors
have. Canada is the second larg¬
est country in the world, and its
riches and
industrial potential
•re just beginning to be tapped.
For 47 years, Neshitt, Thomson
has been pioneering the develop¬
ment and financing of new indus¬
try in Canada. Through a network
of investment offices extending
across Canada, into the U. S. and
Europe, the Company is in con¬
you
vestment
cial
If
been
in the
touch with
Canada's finan¬
for
and
the
for
sale
The
others.
to
to
.
company
produces
to
other
the
continuous
company's
these
items
forms.
total
In
1955,
volume for
amounted
to
only
$200,000 annually. Volume in this
line
is
the
at
now
rate
of
over
$4,000,000 annually.
corre¬
years
has
been
regarding
the
in
recent
tremendous
growth potential for the office
equipment
industry.
A
leading
advisory service has predicted a
expansion
>
the
and
into
new
large Cnicago business forms firm
cialized
in
Ennis,
home
and
Texas.
offices
Warehouses
another
located in every state. The dealers
two-fold increase in sales by 1970
include stationers, printers, busi¬
ness forms dealers,
paper whole¬
the same
source.
Forms, Inc., as a
supplier of expendable items for
Ennis
to
Business
in
are
interested
in
Acme
handled
salers,
by
Distribution
over
14,000
Net
Sales*
tion
investments,
Net
Earnings Before Taxes'?
Nesbitt, Thomson and Company
will be glad to assist you.
Net
Earnings*
Net
Earnings Per Share**,,
on
Canadian
1960
1
Dividends
NESBITT, THOMSON
AND
COMPANY, INC.
25 BROAD ST. 140 FEDERAL
ST.
NEW YORK 4
BOSTON 10
•OOO's
$9,126
$8,115
$7,713
1,281
816
868
813
Share**__
Ratio
Current
•♦Based
Per
$11,219
.
is
dealers
Companies
We
seek for retail off-street placeblocks
ment
or
City
your
397
426
405
337
0.72
0.77
0.74
0.60
0.50
0.16
0.15
0.14
0.13
3.19:1
2.19:1
2.64:1
2.61:1
2.70:1
1516
Phila.-Balto.
&
Boston
as
a
sold
at
$35
no
circumstances
to be construed
as an
offer
referred
to
to
sell,
or
herein.)
Exch.
Exchange
(Assoc.)
ST., PHILA. 2, PA.
IN
Bank &
Quotation
Record
(Only $45
tant to the
r
the
well
Over
suc¬
as
-
those
The
-
find
"hard to
Counter quota¬
Write
or
call:
that
WILLIAM B. DANA
in
of
tomobile
CO.
25 Park Place
the
past in the
shares
$4)
bound
tions.
big profits
made
year)
—
publication will
give you the monthly prices
on
all
listed
securities as
This
cessful speculator. I further
stated
per
(Single Copy
timing was
most impor¬
Horace
I.
Y.
New York 7, N.
Poole
REctor 2-9570
au¬
companies,
chemicals,
television and drugs were made
by
those who realized that the stocks
of
a
cprtain group had "caught on."
During the last several years,
Electric
has
done
intensive
and
components
transistorized
to
produce
Over-the-Counter
Quotation Services
for 47 Years
power control
panels, resulting in improved per¬
formance of power supplies which
used
business
any? security
Stock
Stock
QUOTATIONS?
a
to
energize
machines
and
computers,
for
National Quotation Bureau
other
Incorporated
of
Acme
engineering costs
during 1959 continued a
46 Front StrMt
OHIOAOO
•
-
"
"Continued
,
Established 19 IS
Research and
solicitation of an offer to buy,
Pitts.
LOCUST
applications.
(This is under
dividend-
Al BERT J. CAP LAN & CO.
Members:
share.
are
550,000 shares currently outstanding.
preferred
of
paying small-loan companies, sales
finance companies, or factors.
col¬
magnetic
621
inactive
stocks
YOU WILL FIND THEM
Corporation
682 ;
$6,894
1.13
of
common
NEED "HARD TO FIND
other semi-conductors, com¬
bining the unique advantages of
these components in circuits with
1956
omitted.
on
Finance
investment
engineering work with transistors
1957
1
a
f
"The Security I Like Best,"
Acme
1958
Bankers
N. Y. 6 COrtlandt 7-5680
Consumer
In this
I: article I point;
grocers,
and
suppliers. In the busi-
1959
Investment
week this stock
(Fiscal Year Ended Feb. 28)
of investment in Canada—
municipal or corporate bonds,
stocks—or if you want informa¬
type
Electric
umn,
wholesale
restaurant
&
111 Broadway,
exceptionally
My last contribution to
FINANCIAL SUMMARY
any
an
New York
Birmingham, Houston,
Louis.
Brokers
Members New York Stock Exchange
pulse.
you
risk"
with
field
a
in
interested
.
Eisele & King, Libaire, Stout & Co.
are
should
according
investors
HORACE I. POOLE
in
and
St.
■
Mgr., Corporate Finance Department,
plants in
Paso Robles, California and Chat¬
ham, Virginia in addition to its
plant
Tokyo, Japan
.
promising future.
The company now has
located
by
current
recently acquired, and spe¬
equipment
has
been ; ed out that a
installed
to
expand
production
sixth sense of
was
main
Affiliate of
<
tories, the company can be ex¬
pected to continue its growth. A
doubling of annual sales by 1965
followed
the
was Barnes Engineering Corpora¬
addition of
tion,
trading
Over-the-Counter
the gradual at
$0.50
per
trade terri¬
share.
Last
in the data processing segment of
the office machines industry. This
be
At
attractive opportunity
an
"businessman's
facilities.
said
dealers.
of
provide
for
Company
York/ Inc.
Yamaichi Securities Co., Ltd.
several of the nation's major
developing in the field of business
Through
of New
has
approximately $20 per
Ennis Business Forms is
selling at 17.6 times its earnings of
$1.13 reported for the year ended
Feb. 29,
1960. The $0.65 annual
dividend provides a 3.3% return.
Ennis Business Forms, Inc. will
.
Much
now
share,
of
products
Yamaichi
Securities
1,300 stockholders.
Active
markets are maintained
price
great promise is the printing and
new
write
,
securities
sponding IBM cards in all respects.
which holds
forms.
information
or
'
.
public
offering at
$16%
in
October of last year,
Ennis
Business
Forms, Inc. has
been actively traded in the "Over-
by
A recent development
production
$4,242,905.
the
Since
over
manufactures
tabulating cards under a license
arrangement
with
International
Business
Machines
Corporation.
similar
Call
trading
is produced.
are
current
allow¬
for depreciation of $1,700,705.
the-Counter" market and
company
cards
For
equipment
and
($2.50 Par Value) common stock,
$588,434 in Capital Surplus, and
$2,279,471 in Retained Earnings.
Total stockholder equity amounted
orders.
custom
branch offices
STOCKS
current
with
Other assets consisted of deferred
specialized forms
organization.
using magnetic ink. This allows
The
company
manufactures a the company to participate in the
widely diversified line of business trend
toward
office procedures
forms and other business
paper
automation. Other products manu¬
products. For many
years,
the * factured by Ennis Business Forms
company specialized in salesbooks,
include
stationary supplies, file
restaurants
checks,
specialized folders, and paper rolls for tele¬
tags, and carbon paper. With the type machines.
trend toward office records auto¬
With its widely diversified line
mation and electronic data proces¬
of
products and
long standing
sing, the company's management record of quality and integrity,
several years ago initiated a pro¬
Ennis Business Forms, Inc. is in
gram designed to capitalize on the
an enviable position to participate
new growth market for specialized
in the growth
v/hich is rapidly
into
HOW TO EXPAND WITH
ance
for standard
is manufactured for
company's own use and also
The
and
profit and paid
year since its
a
orders
The
the
with
into
operated or
Continuous
sizes
and
styles
our
amounted to $3,366,702 less
restaurant
and
establishments
is
Garner
son,
$5.5
has earned
pany
a
it
of
assets
sales
American Furniture
his
by
building
that
company
Trading Interest In
with
Dunkerley, who has been instru¬
mental
Teletype No. NY 1-2762
The
1909.
in
guided
now
Dunkerley
G.
of only a few thousand
vestment
Phone:
G.
inception.
founded the company
Odd Lots
strong,
Plant
1960,
29,
to
JAPANESE
$3,858,334 and current
liabilities of $1,208,759 as of Feb.
made in a wide variety
are
Mobile, Ala.
Direct wires
of
assets
typewriter carbon
paper, office machine ribbons, and
specialty inks. A wide variety of
shipping tags for airlines, rail¬
roads, manufacturing and retail
executives
have been with the company since
BONDS
Bids
of
also
Some of its present top
is
condition
Snap-a-part forms
NY 1-1557
New Orleans, La. - Birmingham. Ala
lishing dealer outlets.
Ennis Business Forms' financial
Carbon paper
closely held
and
50th
its
celebrated
and
salesbooks
of
field
the
in
a
forms are multi-copy inter¬ charges amounting to $2,333. Longleaved with carbon paper and are term debt in the amount of $75,000
in
5% "'Serial > Debentures
will
specially designed for use on high
mature in July, 1963. Stockholder
speed tabulating and form-writ¬
equity consisted of 550,000 shares
ing equipment.
checks
leader
long been recognized as a
is
copy
Salesbooks
Inc, has
Business Forms,
Ennis
S. WEINBERG,
over
forms
machines.
automatic
York
Stock
Exchange
American Stock
Exchange
19 Rector St., New York 6, N. Y.
,
gives it a competitive edge
those companies now estab¬
ship
concern.
manually
either
to
the
provided
CHICAGO
SAN
•
Members New
Members
:
trend toward dealer dis¬
tribution,
and
Ennis
Business
Forms' firmly established relation¬
with inter¬
leaved carbon paper. The copies
can then be separated for distri¬
bution. These forms are adaptable
It
nancing.
Steiner, Rouse & Co.
"
rising
The
also sells the register
which it purchases from
multicopy
are
a
there
industry,
forms
ness
carbon paper
permanent record
a
as
business
outside sources.
portion
represented
company
fi¬
but
the
machines
by
original
stockholders,
1920
serve
York
HAnover 2-0700
continuous
interleaved with¬
necessary
and
for
company
sold
shares
Corporation
T"
of
marily
the
tain
Co.,
pri¬
&
consisted
Dept., Eisele & King,
baire, Stout & Co.',* New
City. (Page 2)
1 v ,
—
They are used
register machines which con¬
in
Bought—Sold—■Quoted
Corporate Fi¬
Li-
Manager,
Poole,
nance
out carbon paper.
Pea-
Kidder,.
Securitiej
Horace I.
—
part
three
or
forms which are
The
by
last year.
the widest
two
of
October
in
you're getting
sure
of
also
repeat sales resulting from
the
expendable
nature
of its
products.
v
...■{■■■
Register forms are principally
"go public." The company had its
original public offering of stock
Electric Corp.
Acme
to the
Inc. is one
recent companies to
more
of its products but
consumers
Ennis Business Forms,
of
number
increased
the
from
Ennis Business Forms, Inc.
nation¬
our
office
Louisiana
McCormick,
las, Texas. (Page 2)
doubly
& Son,
Alabama &
Ennis Business Forms,
equipment, stands to benefit
from the expansion in
equipment sales, not only
such
McCORMICK
Dept., Dallas Rupe
Research
T rigger-quick service and
stant
Thursday, May 12, I960
Participants and
Their Selections
L.
department offers
Have
.
Week's
This
different group of experts
in the investment and advisory field from all sections of the country
participate and give their reasons for favoring a particular security.
Our experienced trading
40
.
Forum
in which, each week, a
A continuous forum
Call "HANSEATIC"
120
.
(2038)
For Banks,
-
Chronicle
Commercial and Financial
The
2
on
page
16
NewVofM.jO;
BAM
FRAMCI0OO
Number 5950
191
Volume
.
.
The Commercial and
.
Financial Chronicle
Fancy Regarding
Facts vs.
Industry's Economics
Drug
CONTENTS
jcHTtnsTfin
B.S.
COMPANY
AND
Jules Backman,* Research Professor of Economics, New
fly Dr.
York University, New York
City
Articles and News
economic brief on the drug industry deals with the profits posi¬
tion, effect upon over-all prices and per cent of all medical care
cfjts, differences in drug prices here and abroad, and growth per¬
formance to date. It makes clear, also, that the intensity of compe¬
tition is as great as that in any industry. Pointed out, further, are
errors and misuse of data by some members of the Kefauver Com¬
mittee and its Staff. Noting the start being made by the industry to
collect data on an annual basis, Dr. Backman suggests what more
can be done by the industry to make the data complete so that the
knowledge of the industry, now being unveiled by testimony, will be
made consistently and fully available on an annual basis in some
"OH, KAY!"
Page
An
We
the past few years,1 the
industry has been subjected
variety of public examina¬
During'
to
a
of
Fiction—Dr. Melchior Palyi
j.
study
antibiotics,
the
Fountain
The FTC
of
While
numbers
a
vac¬
characteristics
threat
of
Russia.
persons
are
playing
are
familiar illus¬
ly since the end of the war. The
rate of increase in employment in
And
trations.
the
Backman
Jules
reports from
W a s h i ngton
yet in
sight.
As
develop¬
accompanying
the
and
have
sometimes
to be a prof¬
you
been made to appear
The
statements—
often inaccurate and
misleading—
listic
industry.
made
by
his staff
Kefauver and
Senator
consider¬
received
have
able
publicity. The following ex¬
change dealing with profits is a
classic.
Dr. Blair:
nisolone
Schering buys pred¬
from
for $1.57
sells it to the retail druggist
Upjohn
$17.90—"it is 1118% mark-up,
roughly 11 times."
After
Dr.
that
pany's research costs
selling and
23%
of
the
the
of
com¬
8V2%
were
distribution
sales
was
for
the
industry
that selling and distribution was
23%. You add 23% to 8.5%
That
.
still is
long
a
"...
and
way
from 1118%.
assuming
23%
add
you
8%, that doesn't take much
from
1000%."
(Kefauver
Drug Hearings, Dec. 7, 1959).
appraisal
F!auCe
86.4
15,290
104.0
16,156
20.4
5.7
60,168
65,581
9.0
has, therefore, played an im¬
portant role in growth.
However, the dollar increase
sales by drug manufacturers in¬
creased from $890 million to $2,-
During
the same period total Gross Na¬
tional
Product
increased
from
million
or
by 203%.
Thus, in dollar terms,
the drug industry has been grow¬
ing almost twice as rapidly as the
by 105%.
economy
evaluated and harmful
actions
are
review
Consumer Credit
Free Market and
11
Free
MICRODOT INC.
Press—George Koether
14
Are We Over-Organized?—Roger W. Babson
f-'-'V'v"
7'..*'•••.
77;
■. ■
*•'".•••«».-/;;
❖
#
%
AMERICAN
INTL. BOWLING
17
-v*'.'.;ii£-\VV7.7"f V7*
$
*Prospectus
Study of Regulatory Agencies Urges Modifications in
the
However,
to
inscrease
dollar
de¬
true of the phar¬
gree
than was
wholesale
general
rose
price
by
Thus,
industry.
maceutical
23.3%
index
price
the
v
Joseph C. Potter Lauds Fund Survey (Letter to Editor)
17
Arthur
27
Roth Asserts Banking Bill Is Invalid
J.F.Reil!y&Co.,Inc.
39
some
1947 and
1959.
of
Let
me
-
Regular Features
As We See It
Bank
(Editorial).:..'.:-.'..-.....
Insurance
and
Basic Atomics
Cover
Stocks
Microdot, Inc.*
47
-
Jamesbury Corp.
48
Coming Events in the Investment FieldDealer-Broker Investment Recommendations
Crown Self-Service
8
(Units)
Einzig: "Principal Factors Involved in the Fall of U. K. Stocks"
15
From Washington Ahead of the News—Carlisle Bargeron
13
International Recreation
(Freedom Land)
*Prospectus
Indications of Current Business Activity
46
Mutual
24
31.4%
by
between
December 1959.
Drug sales rose by
Singer, Bean
with
Observations—A.
Wilfred
Founded 1868
Salesman's Corner..
Security
The Market
.
.
.
The Security I
Copymation
20
—
Douglas Microwave
16
and You—By Wallace Streete
2
Like Best
*Crompton & Knowles
-
4
Industry
The State of Trade and
♦
■.
.
.
•■J/:-.
:
'
7:7
77.
"
*Big Apple Supermarkets
6
Tax-Exempt Bond Market—Donald D. Mackey
*
.
.
•
48
Washington and You
Twice Weekly
*Current Report on
FINANCIAL CHRONICLE
Reg. U. S.
Patent Office
DANA COMPANY,
Request
4, N. Y.
Chicago
Schenectady
Glens
Falls
Worcester
Editor
SEIBERT, President
SEIBERT, Vice-President
May
12,
etc.)
South La Salle St.,
(Telephone STate 2-0613).
and city news,
■•■Mother .Office:
Chicago
3,
HI.
-135
second-class
matter
Febru¬
ary
25,
1942, at the post office at New
York, N. Y., under the Act of March 8,1879.
Subscription Rates
&
CO., INC.
Underwriters and Distributors
Subscriptions in United States, U.
Possessions,
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and
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per
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Complete Trading Facilities
of
in
year;
TRADING DEPT. PHONE:
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WHITEHALL 4-6627
1960
Thursday (general news and ad¬
vertising issue) and every Monday (com¬
plete statistical issue —market quotation
records, corporation news, bank clearings,
state
as
Publishers
to 9576
GEORGE J, MORRISSEY,
WILLIAM DANA
SIMMONS, RUBIN
Company
Reentered
Park Place, New York 7, N. Y.
Thursday,
TELETYPE NY 1-5
Copyright 1960 by William B. Dana
COMMERCIAL and
CLAUDE D.
ST., NEW YORK
43
Offerings
Security
Prospective
Stock Exchange
TELEPHONE HAnover 2-4300 '
Newark
34
Securities Now in Registration.
Every
Nashville
St. Louis
that the rapid
Continued on page 30
Spencer Trask & Co.
Boston
Los Angeles
17
Securities
Utility
REctor 2-9570
Albany
Cleveland
Dallas
Philadelphia
Chicago
San Francisco
Public
25
25 BROAD
1-4844
Direct Wires to
20
Our Reporter on Governments
WILLIAM B.
Members New York
Teletype NY 1-1825 &
5
May
inc.
40 Exchange Place, N. Y,
800% as
the
PREFERRED STOCKS
have specialized in
18
News About Banks and Bankers
The
many years we
MACKIE,
&
16
Notes
request
makes it clear
sig¬
the
NSTA
Funds
on
period,
compared
ures
Broadway, New York 5
DIgby 4-4970
AiV A
index
and the consumer
request
.
Product was due
higher prices to a greater
on
Eight Areas
13
"'r' ;.v'~
7.7
■" ■
V".
7 '■ ; \ •' .7
Past Month Reveals Slight Gain in Production and New Orders 15
h'
Published
For
Economic Stabilizer—E. F. Wonderlic
an
HA 2-9000
increase of
are to be 426% in Gross National Product.
A breakdown of the sales fig¬
legislative
to be avoided.
briefly
as
national economy.
the"
take
must
sensationalism if the con-:
national
MFG. CO.
4AM
and
same
tnbutions of the drug industry to
our
10
% Inc.
In the
wholesale drug
This was a fantastic misuse
of prices declined by 11.0% and re¬
drug
prices increased by
hgures since the correct profits tail
28.2%.
It is evident that the in¬
figure was 12.3%.
crease in manufacturer's sales in
In
light of such distortions,'
the drug industry was due largely
there is a real need for
proper
to greater volume.
I
perspective concerning the eco-.
A similar pattern developed in
nomics of the drug industry.
the 20-year period from 1939 to
Sober
away
FARRINGTON
Em¬
in Gross National
understand
1959
Clearly, the drug industry has
provided more than its propor¬
tionate share of job opportunities
dollar, Mr. Ke¬
fauver stated:
"I
Civilian
ployment——
700
BAIRD-ATOMIC, INC.
$234.3 billion to $479.5 billion or
President
Brown,
Schering, testified
and
Medicines
Manufacturing
Drugs &
All
ENTERPRISES, INC.*
9
(000 omitted)
Total
7
Investing—Philip Hampton
•
1947
conspiratorial, monopo¬
iteering,
4
,
industries
manufacturing
1947.
these
of
result
a
headlines
for
all
for
Cobleigh
—Hugh M. Ettinger
than three times as great as
since
ments
and
industry has been more than
the national average and
twice
more
correct, the end is not
are
U.
St. Lawrence Seaway and Canadian Mineral Industry
game
tetra¬
if
Telephone: WHitehall 4-6551
Terminological Appraisal of Life Insurance Stocks
The
cycline
Ira
—R. B. Elver
drug industry has been a
great growth industry particular¬
cine and
Dept.
there
rates,
-
cases
many
Securities
WALL STREET, NEW YORK
AMERICAN BOWLING
industry.
the
3
Current Policies of Pension Fund
with t growth
is agreement that
growth yields beneficial results.
and
trust
involv¬
hearings
ing Salk
meet
to
Kefauver
Commit tee
and
99
—Dr. Jules Backman
—Dr.
by many persons
that economic growth is a vital
national necessity.
Such growth
is required to meet our aspira¬
tions for higher living standards;
to provide job opportunities, and
groups, and
in the courts.
Fancy Regarding the Drug Industry's Economics
versus
Life Insurance, and American Heritage Life
told
are
.
Cover
Obsolete
Facts
A Major Growth Industry
We
legislative
-anti
economic
the drug
administrative agencies,
by
tions
nificant
pay!
How Long Can We Continue to Live With Our Financial
readily accessible form.
drug
3
(2039)
Other
Bank
$45.00
and
per
Note—On
the
Quotation Record — Monthly,
(Foreign Postage extra).
56
BEAVER
STREET, N. Y. 4
year.
account
of
the
fluctuations
rate
foreign
must
Publications
in
of
exchange,
remittances
for
subscriptions and advertisements
be made in New York funds.
..
Telephone: WHitehall 4-7650
Teletypes: NY 1-4581-2
4
to
Life Insurance, and
American Heritage
Life
By Dr. Ira U. Cobleigh, Enterprise Economist
notes
on
life
insurance
trends
and
thh"vfnost -im¬
is
insurance
1958.; and in the Group De¬
over
ad¬
vehicle for personal and
family thrift in the United States.
partment this
Today 115 million Americans own
life insurance policies. The growth
ly, the company's net worth at the
in this business has been remark¬
38%
portant
able.
In the 10 years
vance
1959
to $534
billions; and assets of life
companies, in the same period,
burgeoned from $59.6 billions to
Even
more
spec¬
tacular have been the market ad¬
in
life
insurance
Capital gains of
1,000%
stocks.
more
or
in these stocks in the past decade
by
are
no
certain
means
shares
and
uncommon;
have
-
year
increased
Techniques for Expansion
How
recorded
as¬
does
this
achieve
American
Heritage
unusual
expansion
and growth? Importantly by vir¬
tue of a young and energetic man¬
agement
team
headed
by
Mr.
Claude
Roy
Kirk,
Jr., President
Ashley Verlander (40). These gentlemen are
dynamos in ideas and in action.
They're progressive and imagin¬
ative, especially in their develop¬
(34)
William
and
exam¬
ment
of the sales
you might have purchased 100
shares
of
Connecticut
General
ment
ends of the business.
tronomical
advances.
For
ple,
Life
capital
stock, at the end of
By Feb. 1, 1960
investment
would
1940
for
this
original
have
attained
$2,925.
a
value
market
of
not counting cash divi¬
dends received in the meantime.
$142,400
Because of this amazing growth
selling, based primarily
people to save money.
often
ket
promote
of most "life"
shares, and the high rate of return
on
invested capital achieved in
their industry, hundreds of new
life insurance companies have en¬
the
tered
business
War
life
1,400
over
II.
since
There
the
are
insurance
end
now
com¬
panies in the United States.
all
But
these companies, do not,
of
course, grow
of
and prosper equally.
Some do much better than others;
and the superior performers are
usually distinguished by the evi¬
dence of three
qualities: better
management, more effective sales¬
manship and smarter investing. A
dynamic young company that as¬
says
is
high in these three qualities
American
Heritage Life Insur¬
Company, of Jacksonville,
ance
Florida.
Company
Heritage.
Starting out as a
brand new company in 1956, with
$500,000 in capital, this energetic
enterprise has scored some re¬
markable gains.
Most new life
companies take at least five years
to get into the profit column. Not
with American Heritage. In its
third
full
year
of
operations
so
(1959), this Company reported a
net income of $348,113.
Life in¬
surance
in force today is about
$154,000,000, with $44 million
in
ordinary life business and the bal¬
in group insurance.
ance
The
alone,
ance
Life
encourages
Manage¬
this to
thrift among employees,
and management helps sales along
by permitting individual payroll
deduction of insurance premiums.
Thus,
a
myriad of systematic thrift
plans for insurance protection are
begun with payments of as little
$5
as
month.,.
a
,
A second
imaginative approach
selling, advanced by American
Heritage, is the installation of
to
insurance
desks
in
supermarkets.
This is
obviously a wonderful way
to bring prospects to the Agent.
People
doing
their
household
shopping in a supermarket are in
a
buying mood; and many are
eager
to learn about insurance
and
coverage
the
price
indi¬
of
vidual policies.
Actual selling at
the booths is not the important
achievements
contacts
calls
that, when the Agent
so
the
at
home
later
of
las^
year
are dramatic. Gross insur¬
premiums in the Ordinary
Department increased .56%
and
he
on,
genuine interest in the
a
is
welcome,
a
sav¬
ing
and
insurance program
he
sells.
This shopping center sales
technique is well under way with
American
located
of
Heritage
in
the
selected
Winn-Dixie
booths
now
supermarkets
and
Safeway
chains.
for
third
sale
the
of
"center of influence"
insurance
stockholders
is
of
through
American
Heritage.
The company has 2,700,000 of its capital shares out¬
standing, owned among over 13,000 stockholders. Each stockholder
is, theoretically,
sale
of
a booster for the
American Heritage insur¬
and the management is
seeking to broaden
ance,
stantly
base
of
its
share
traditional
the success of this less
aggressive program, in¬
vestment income (including cap¬
and
more
ital gains) rose steeply from
$236,-
1958 to $644,000 for 1959.
000 in
Sustained
for
Progress
Progress at American Heritage
fair
bids
continue.
to
American
Reliable
fire
back
in
year
Company,
insurance
which began
pany
Last
Heritage Life acquired
Insurance
well-known
business
Reliable
1865.
a
com¬
way
earned
a
net
profit after taxes of $193,607
Its
policyholders and
agency system
will substantially
in
1959.
the
broaden
sales
horizon
for
American
Heritage and provide
entry
into
"one
agent — one
charge"
insurance
programs
where
tion
life
and
home
fire
offered within
are
con¬
the
ownership both
protec¬
cor¬
one
'
"
C
V/sy/-/y/-y/>,
UNDERWRITERS ' BROKERS *
DEALERSDISTRIBUTORS
has
the
possible
ings
States for
to
will
the
obtain
be
which
17.0%
above
in
almost
1959.
At
this center there is
centers
rising number of longunemployed, those idle for
for
the week ending
May
Philadelphia
1,178,000
1,121,000
develop¬
ing.
is licensed to do business
District
in the
of
Columbia, Alabama,
California, Florida, Georgia, Ken¬
tucky, Indiana, Louisiana, North
and South Carolina, Maryland and
Virginia.
Other states
consideration
and
under
are
the
1960
year
should
expand considerably
above licensed sales terrain.
American
sells
Heritage
Life
over-the-counter
$914
share.
a
but the
around
It pays no dividend
should
benefit
insurance
is
time.
over
growing
dy¬
namically and American Heritage
is growing faster than most com¬
in
the
business.
It
has
an
older
corporate greatness.
Walter Gutman to
Leave Shields Co.
Walter
from
K.
Shields
&
reported
that
he
join
may
has
Co.,
resigned
New York
C o.,
never
Many
have
long-term
also
are
been
work-
nological
other
developments.
counted
total
for
at
least
one-fifth
Some
other
of
149
of, course,
areas,
high
unem¬
1960, 33 out
major labor market
had
unemployment of
6%
of
the
While
a
civilan
of
"surplus"
close
to
force.
there
been 72 such areas, the
pockets
than
more
labor
earlier
year
areas
had
of
major labor market
.:"vY.
will
have
if
ployed
to
more
is
the
be
expanded
con¬
rapidly than here¬
number
to
be
changed to
of
unem¬
kept
"The
if
of
is
Wall
Iron
Dean Witter
scco.
H
his
ket
has
Members
New York Stock Exchange • Pacific Coast Stock
Midwest Stock Exchange • American Stock
will
new
decline
to
do
have
the
'pick
The
magazine,!
of
the
of
move
leading commodity exchanges
circuit to Honolulu
IOS
ANGELES
42 Offices
for some time.
busi¬
the
seri¬
steel
out¬
says
look is covered up
by the strength
of the sheet market. And recently
the
automakers
June
more
With
nage.
orders
for
holding
up
But
for
start
in
out
at
1960
•
NEW YORK
Serving Investors
•
CHICAGO
BERNARDSVILLE,
Gilbert, Inc. has
office
under
at
the
J. Peters.
19
N. J.—Fane &
a branch
Some
Brook
management
of
Road
65
LIBERTY
that
the
production
will
be
which
use
longer
the
in
Continued
on
Quoted
=■
American Stock Exchange
STREET,
•
NEW
YORK
1
Robert
6
Teletype NY 1-4686
Private Wire System to Canada
is
auto
com¬
average
an
w.',.
Tel.: BE 3-8880
will
Age" points out it
significant
MEMBERS
Exchange
opened
Mine
■
New York Stock
auto¬
close-out
the
models.
is
July; the rest will close
intervals into September.
"The Iron
pacts,
time,
same
eying
are
time
new
June, flat-rolled
surprisingly well.
the
at
makers
sheet ton¬
other
some
for
back
came
cold-rolled
Alfred L Vanden Broeck & Co.
=
Fane & Gilbert Branch
its
new
overall
Sold
Honolulu Stock Exchange ♦ Chicago Board of
Trade
and other
Private leased radiotelegraph
Walter K. Gutman
pro¬
up,
continue
to
rate
letters,
been
is
order
ness.
from
Bought
re¬
contradiction
Foreign Securities
mar¬
planning the
Exchange
Exchange
.
in
a
the
Age"
Banks, Brokers and Dealers
Street
ap¬
but
reverse
well
known
for
For
Gutman,
51
6.7
be
may
point,
current
orders
duction
still
the country's
areas.
tofore
would
Even
remaining
labor
one-fourth
7 2
+
+
low
as
42
to
48%
of
capacity of individual mills while
production is still well over that.
ousness
also have relatively
ployment. In March
siderably
of
as
of
unemployment.
orders
apparent
result
rates
ef¬
The
the
This
the
fects of these changes in economic
structure are particularly strong
in
some
localities.
In the
high
employment period of June 1956J u n e
1957,
unemployment
in
chronically depressed areas ac¬
778,973
ports.
tech¬
The
steel
production,
government defense programs,
and
+27 7
+
week-to-week downtrend in steel
occupations, the replacement
products
by new ones,
changing consumer tastes, shifts
automation
7
proaching the low
pickup
will
not
old
and
1959
Steel Output
New
and
of
1960
$16,180,943 $12,675,484
Prospects Dim for Larger
displaced by
of industries
declines
000 Omitted
—
7—r
York—
Boston—831,390
non-white
of
future may well
bring other
problems, the Review article
noted.
Employment opportunities
iffwWM
Stearns
name
who
res
represent
Gutman
May
22%.
members
or
follows:
as
Week Ended
of
minorities.
the
conducive to
seven
was
the long-term unem¬
ployed are workers 45 years and
impressive board of directors, and
operating management, mer¬
chandising skill, zeal and energy
below
Many
in
stock
"plough-back" of earnings
redound
substantially to
stockholder
Life
at
the
fallen
7
this
1953
but in the past
this proportion has
years
The Company has not been neg¬
lecting geography either.
It now
In
more.
a
gain for the week ending
Friday
of 27.7%.
Our comparative sum¬
mary
for
the
principal money
the
or
last
preliminary
totals
$28,947,901,338 against
$24,742,620,262 for the same week
at
1,224,809
who
■
those
corresponding 'week
stand
a
weeks
is
weekly clear¬
1,312,807
is
15
of
it
Our
year.
half years at levels in
excess of 4.7%.
A rather striking
development! in recent years has
been
clearings, for all cities
United
of
for
Preliminary figures
Saturday,
May 7,
Commerce
continued
will
with
upon tele¬
the
chief
cities of the country, indicate
that
for
the
week
ended
Analyzing the long-run unem¬
ployment
picture,
the
Reserve
Bank notes that unemployment as
a proportion of the civilian labor
two and
week
compared
compiled by us based
graphic advices from
Department.
force
ago.
year
this
increase
Chicago
Heritage
Stearns & Co.
•
the
and
clearings
an
Gutman,
WwM
SAN FRANCISCO
a
ployed,
Mr.
'
Bank
show
ment, taken at the "high point of
uncertainty" in March and early
April, showed even larger planned
outlays for 1960 than the survey
made only a few months ago by
the Securities
and Exchange
Commission
Clearings for May 7 Week
% Above Last Year
17
American
which
■''A-v
Bank
in
blustery
March,
probably was made up in part in
April, as winter turned abruptly
into spring. Finally, the McGrawHill survey of business plans for
spending on new plant and equip-
New
be
mm
for outdoor activities,
workers
postponed
group was 15% of the total unem¬
&
.
of
,
be the next step in the
comprehensive insurance program
appear to
Bear,
Com^ef^TfiUCStment Service^
to
Review.
term
City, and it is
r
appears to be pull¬ swelling.
Department of Labor
of its weather-influenced projections indicate that the
late - winter
doldrums, although 1960's will see 26 million
yoirng
the evidence continues mixed, the people enter the labor
force, 377
than
Federal
Reserve
Bank of New more
entered
during ' the
1950's.
None of the
York observes in its May Monthly
problems
Provision of auto¬
motive insurance coverage would
panies
The
"""
Commodity priCe inaex
In April consumer pur¬ be
faced,
however, should be
in particular, brought a viewed as a c a u s e for grave
breath of springtime to business¬ alarm.
They are, in fact,' the
men.
Automobile sales advanced problems of a society that
not
smartly, and department stores only is expanding in size but also
is
growing in technology, extend¬
purchase of convertibles, and it reported a record Easter season.
Industrial production in
April ing its life span, and developing
has done well in such "converts"
may
have
steadied
after
two increasing recognition of social
as American Machine & Foundry
and I Sperry Rand.
Illustrative of months of slight decline. Hiring responsibilities.
porate family.
assured in advance of
There's plenty of life in Ameri¬
*
factory.
a
thing; it's the making of effective
American Heritage Life Insurance
can
in
personnel
Index
Production
The economy
chasing,
Vista
on
TRADE and INDUSTRY
American! Heritage mort¬
gage investment is less than 10%
of
portfolio.
Management
has
stressed, in its bonds holdings, the
invest¬
asking
One of
these
"exposure" methods is to
secure
permission to solicit the
employees of a company, or the
ments
performance
the
and
For example, they have devel¬
oped
an
"exposure" system
of
factor, the stellar long-term mar¬
of World
by
1958.
over
period 1950-
1959, life insurance in force in the
vances
had
year-end
to
-
Most significant¬
Food Price
Auto
ing out
average
gages.
United States increased from $213
$113.6 billions.
year
28%.
was
Output
Retail Trade
The State of
corporate success,
of an aggressive investment pro¬
gram.
American Heritage defin¬
itely has such. Most life com¬
panies have about 40% of their
investment
portfolio
in
mort¬
above
Steel Production
,
i Electric
i
im¬
achievement of
the
in
■
.
¥
Results
the
earlier
mentioned
We
and
Program
Investment
the
on
portance
Life
,
sophisticated sales
these
selling.
specific comment
Thursday, May 12, 1960
.
Carloadings
techniques have been combined
with, and added to, the traditional
methods of successful insurance
rapid growth of American Heritage Life Insurance Company.
.
-
possible future expansion.
of
.
the sales message and
reservoir of capital for
spread
to assure a
All
Some
Financial Chronicle
The Commercial and
(2040)
page
of
12
Number 5950
191
Volume
.
.
,
The Commercial and Financial Chronicle
Mutual
OBSERVATIONS...
A.
BY
WILFRED
MAY
over
Equitable, through its President
James F. Oates, Jr., has announced
Leading the
laggards is, as
J3(JllU. vylUL) vyULHlid
embarka}ion
ofiov
Set for June 3
Deflation Items
category of price
we can appreciate,
actually
context of the long view, their rece^ Hse^With^ecoenibon m0ns before the initiation of this
and far more
significant than of thecommon' stock'sresoecta- P.r0^an}
19?9. « add«d $20 milay-to-day ."market views " are bmt
centered on the Variable I'on/W latter 1959, and $9 million
"till remaining huge potentials of Annlity to^ument the propor- £Un"g
flAst q^art?V.of 1?.60'
demand for common stocks. In tion 0j> ,j,e jn(justry's portfolio of Previously, ' the Equitable, like
tlie institutional area, the ".-huge total, of common stocks has rei
Metropolitan, had almost
jnvestible assets of the life insur- mained under 2% (aporoximatelv c,om.P
I-v eschew^d c 0 m m 0 n
ance companies, hitherto rdabve1-8% now). Last yea? only $354
nf
us less
cost
-a^A
rp^
the publishing industry. In fact,
on a $40 million
'Jggg,.riP?Z
nomi"g Pnly.?d7.milll0n of com-
gate stock holdings remaining far
below them, hoth hpfnr^
Pink
the longest-term it is highly
selective as well as spasmodic?
Worcester* 52%; NaAccident, 33%; OcLife, 34%, and Jefferson
Standard, 33%.
5
cidental
lts
STIRRING BULL
of
tional Life &
—
A
(2041)
j J vnS
this
vear
than
Fridav
on
"0W
a°rdi"g to
our
&
,
ac
by
Chappell
of
William
forefathers. A year's subscription
to the 18th Century Virginia.
Gazette was priced $3.15-now.
the rate is «3-00- Likewise, a lost
and found advertisement in the
same journal would have cost 78
cents—now 75 cents,
In the
3
June
an announcement
B.
First
The
Boston
Corporation,
President
of
the club. This
year
will
mark the 36th
outing for the
_
..
,
....r
.
.
,
acauired" through
.
appeared for greater engagement in the equity market by
the life companies, the. prospective
marriage
has rather remained in a state of mere
flirtation" ever since their boycott of
the common stock resulting from
tht Armstrong Committee investi-
form of common stocks. This compares with $277 million, or 1.4%
in 1958; $257_ million, or 1.5%, in
1957, and $56 million, or 0.6%,
back in 1947. During the first two
months of this year, only $49 milHon has been routed in common
stocks, against $50 million last
gation in 1905-1907. At that time
the objection to commons was not
based on the risk elements, but
rather on violation of corporate
ethics, as the too frequent emer*ence
of interlocking
relation-
year. (The break-down by industries of new acquisitions in 1959
shows, in railroads, practically
has
tion
Such sublimation
justified by the
market performance of stocks
and fixed interest
securities. Both before and after
the
1907
panic,
their
common
stocks related to hook value fared
much better than did their holdture
fully
was
relative
actual
28
in the case of
companies
And
of bonds,
ings
life
kaHing
a
bonds*
their
of
storv
imikr
^ted
havp
of
again
MuTtotentton
tteir
$1'65'
V-
,
place at
Sleepy
take
the
'
i
Club
which will
Hollow
Likewise, mail
postage,
one
of our present-day subsidy gluttons, shows a drastic deflation
.
over the centuries. In contrast to
;;
New Tax Law Stimulus
our present 4-cent letter rate, our
The recent gains in "respecta- forebears sending a letter of a
t;nue their complete forbearance
from the equity stock share (but
not from real estate equity).
Maitland
Country Club,
Scarborough,
Ijams
New
Maitland
T.
Ijams,
York.
of
W.
C.
Langley & Co. has been named
bility" by the share equity have single sheet, folded somewhat like ^ d.
7.
a.1l^1?an.
year,
been only partly motivated by the the modern air letter and mailed Assisting him will be four general
epochal reconstruction of the tax without an envelope, from Wil- ^.bair"cieJJ "Y* Frederick C. Braun,
jaw applicable to insurance com- liamsburg to Annapolis, paid 18 3r* 0
„ •
!VIoseley &
H*
J*®!1® against $5 million in $958;
$1^0 million in utilities, against panics, enacted in mid-1959. The cents.
$^2 million; industrials and mis- absence of more substantial redouble dealing.
$350 million against sponse to the tax incidence is
of the risk fea- $220 million in 1958).
^
largely due to its complexities,
as
broad
and
ships
rnnvpriinn
bond-holdings
j+s
Bond
from the Printing Office here in
Williamsburg for $13.10. Today s
Modern Library edition costs only
a
^
While these data show that
there has been some increase in
leaning toward the common stock,
the further potential is enormous,
And the increases during the
recent
which require study and more
study. But our sampling of some
of the companies' investment executives
furnish
substantial
grounds for the"conclusionthat; it
pas^and .mmediate uture
t
0f'values as measured bv
*
01, val"es» a? measured by
dividend and earnings yields, that
are only one-half of those at the
.
.,
the
In
of
case
one
of
Lawrence Parker of Morgan Stan^ey & Co., Alfred J. Ross of Dick
Inflation Leaders
& Merle-Smith, and Robert M.
[n an
countries
and
all Ga][di™:r of Reynolds & Co.
times food is in the forefront of
Reading the 13 committees apour
long-term
consumer
price P°.lnted }° suJ?erYj!fe spof.tsi <rnter"
rises
In
General
Washington's
and
L
^ir^\tSnda^-J^Se
1760-s
and
1770,
he
generally
ejSto paid about 65 cents for an eve"
thelargest
ning meal in a tavern' $L30 with
tne largest drinks inciuded. Today, an eve-
in tne case 01 one 01
companies, whereas under the old
statute the tax bite took 6% of the
"
.
,
,
Q
C
KS/ofSanS
uiZ Sitfes *cSTa,®
m.ents—Robert A. W. Brauns ' of
McDonnell & Co
Incorporated*
ivicuonneii & uo., lncorporaiea,
Journal—Howard B.
time of the turn-down of the pro- income from bonds and stocks, b a1
L ftn g
will set Dean
of Harris, Upham & Co.,
^
.
t
b
d inoome you back $5.00.
Bawl Street Journal Circulation—
while
the
step_up
in' actual is raised to 12%' with only 2%
Recreation items also show big William W Pevear of Irving Trust
Look-See
:: common stock
purchases
made assessed on dividends from stocks, price advances. A box seat to the Co.; Entertainment — Charles L.
nermh %rp*tpr
thus tar
fa? has
pre-empte^
company the net effect Williamsburg theatre in the 18th Bergmann^R. W. Presspnch &
permit
gieatei tnus
nas been
been pre
emptea bv
oy To another
.
change
in
thp
statute
is Centurv cost $1 90
now orchestra Co.; Food & Beverage—Dudley F.
greater emasculation followed
the
Srefer emasculation ioiiowea tne
post-1929 crash.
1941
The
Prono^k
Pioposals
to
to
companies in
aajor airing
before
in
New
a
legislative
in hearings
State
joint
1941
York
The
committee.
portant
proponents
curities
and
Pike
bonds
on
,
bY others
and
and
is
mort^a^es
preferred
stock income,
other
fr^^'L'empTbondf6
inC°me
exempt bonds.
tax
from
Mutual initiated equity
buying in 1958 to the tune of
$5,701,400, to which it added $6,421,446 in 1959.
Giant Lincoln,
whose previous common stock
Richmond are
C oriced
road comGates of Kidder Peabody & Co.;
$4 80 Golf — James F. Burns, III
of
Blyth & Co.. Inc.; Publicity-Wilmusicals.
bam
R0.ng;
Doremus &
texldlncoml sea"s ?n
fully
on
oanv
oerformsnces
^2^ 8°5n ™n%fn*om- W« 1?odu?ttS^ IS
mon
Stock Conscious Companies
Se-
Commis-
among
new
have also been made
for
im¬
included
Exchange
sioner Sumner
PortoWpr^Tthe8'
enlisted
commons
Penn
a
Washi"fn
*° attend E^change_j.
Hyie^
concert hereP?**1*0
1767. Reserved
in
Another large unit points out seats for the present-day concerts
the ancillary advantage of the new at the Governor s Palace are $1.80.
la^ .in Plakl5g
stm in the recreation area: a
versus
the
then
low-yielding
a^)1f» wnicn iacilitates tne taxing dozen packs of good Colonial
bonds.
Such suggested easing of holdings have been negligible, to- ®™ 1
PJaying cards cost $3.80—a dozen
the restrictions was opnosed bv taling less than 5% of the securi- a low coupon, in switcning to get packs
0f modern playing cards
some
of the industry's^ foremost ties portfolio, purchased $7,300,000 a better current rate of return*
are priced $12.00 at the Craft
leaders, including Lewis Douglas of common stocks last year,
Whatever the exact source of the House.
cf Mutual
Life, who was highly through a weekly dollar averag- fillip to the life companies swing
T
,,
skeptical about
their
notential
program. It acquired an ad- into
common stocks, there is On the Selective Inflation Ladder
market performance
ditional $1,400,000 of commons plenty of room for further addiIn 1764, Washington received
No relaxation^ of' the existing through the exchange of convert- tions below the legal limitation. $2io for 54 days of attendance as
regulation restricting the holdings ible
debentures and preferreds. And, incidentally, there is plenty a member of the House of Burof commas
to 3% of assets wf
John Hancock also stepped up its of leeway behind the British, gesses> plus $47 for travelling exmade at that time* not until 1^57 buying of equities last year.
:
whose life company portfolios are penses. Today members of the
officials
government
the
for
need
was
who
increased
the
permissible
raised to 5% of assets
of
the
surplus
Ulhl' oh
which
;
ever
i?ko
^
in
nas
any
not
•
•
to
t,•
*4.
lmit
or
one-half
policyholders,
"
~
t\.
,
existing holdings, in the caseJ of
_
1
_
companies
constituted
^eauiHes °f US ^ ^ ^ mc usl0n Virginia
State Legislature receive
$1,080 for a 60-day session and
ot eQulties.
ci oro fnr a fin-Hav session and
additional $720 for expenses.
increase in
aggre-
^
^
^
an
'
a
;
_
'
Thus, the largesse to our
BICENTENARY
goodly proportion of the 1958-1959
,
Disregarded
controlling,
• - '
several
event, the legal ceiling
been
Acquisition
of commons, to"
gether with appreciation of their
maximum
1
is less.
urged
income
icos may be seen as one
INFLATION
their assets. These in-
items
eluded Mutual of New York, 28%;
Note From
Massachusetts Mutual, 29%; State
part way up our
Inflation ladder.
"ISSltzfstoS
Howard Carlson of
£arj ^ Loeb, Rhoades & Co.;
<penrds—Harold H. Sherburne of
Bacon, Whipple & Co.; Trap
shooting — Charles L. Morse, Jr.
0f Hemphill, Noyes & Co.; Trophy
—Ralph Hornblower, Jr. of Hornbi0Wer & Weeks,
Named Director
nwimm
Tra
TiSlnsuS
or^w York
ance Company of New Yorx.
Addison Sees. Opens
F
WEST HEMPSTEAD, N. Y.—Ad-
polit- dison
Securities,
Inc.
has been
of many formed with offices at 578 Buxton
Selective Avenue to
business.
conduct a securities
Colonial Williamsburg
tion
public's subjec¬
in-flation and
American
The
to
successive
psychoses is assuredly
chronic.
Such de-fla¬
frame of mind is currently
de-flation
becoming
Like
to
tion
highlighted by the sudden aban¬
donment by investor psychology—
during the 80-point fall in the
Dow Jones Average—of the pre¬
sell
ceding
a
the concurrent fiction
large
continue
secular
.
Correspondents inprincipal cities
stantly.
So it
Call.
of the dollar"
each phase is
that it will
permanently and con¬
"collapse
Common to
credo.
the
gather
is timely, for light on
performance,
to
longest-term available data. This
we have done in a visit to Colonial
Williamsburg, the restored capital
of 18th century Virginia, collating
.
prices of today and
comparative
Marketing Department
the
throughout the UnitedStates and Canqda
UNDERWRITERS AND DISTRIBUTORS
OF INVESTMENT
176C-1770's.
(In our calcula¬
we base the late
18th cen¬
SECURITIES
tions
tury
Merrill Lynch, Pierce, Fenner & Smith
INCORPORATED*
70 PJNE
STREET
,
.i»*».
*
-
J
offices here and abroad
of the
dollar
which
8.33
was
grams
on the
sterling,
of
fine
Do not our
conclusion
a
secularly
Dominick
&
Dominick
Members New York, American & Toronto
gold.)
NEW YORK 5, N. Y.
130
value
gold content of. the pound
data substantiate the
that
while inflation
effective
is
force, even
"Haunt
Walter Van Blerkom,Mra
& Co*' New, York City has been
14 WALL STREET
Stock Exchanges
NEW YORK
Commercial and
The
6
Financial Chronicle
. .. .
Thursday, May 12, 1960
(2042)
State of Ten¬
recent issues such as
TAX-EXEMPT BOND MARKET
Cascade County, Mont.;
Florida Development Commission
(Orange County) and University
Mo. have all been marked
closed since "last week. Altogether
DONALD D. MACKEY
BY
City,
During the past few days the taxexempt bond market, as measured
by new issue bidding, has shown
abrupt improvement. Upon suecessful completion of the Treasury's $2,000,000,000 refunding and
extension
of
debt,
government
issues led the way to general bond
market improvement, The municipal bond market, in nice technical
balance, followed as new issues
were
successfully
underwritten
prove
economic mistake de-
an
been
has
it
busy week.
a
year,
Equity Investment Opens
,
however.
(Special to The Financial Chronicle)
has been spent
the administra¬ DENVER, Colo. —Equity Invest¬
Mr. Wild's career
almost entirely on
ment
financial side of the in¬
tive and
with
business.
vestment
Corporation has been formed
at 650 17th Street
to
offices
greatest satisfaction of a engage in a securities business
Officers
are
Robert
F.
"I would say it was
Barbey
our expansion during the Fifties.
President; Ora R. Leverett, ViceIn
1945,
when First California
President; and Robert L. Barbey
first opened its doors, we had 15
Secretary-Treasurer.
offices. We now have 31."
The
long career?
Ahead
Slow Week
Another
last
directors
of
board
nessee;
spite its political desirability. An
The new issue calendar for the
increase in the cost of money may coming week is of little conse¬
easily
evolve
in
the coming quence and includes no issues
months and again an upsetting larger than $10,000,000. On May
change in rates would be required, 17, Cincinnati, Ohio, will offer for
With the high success of the competitive
bidding,
$9,515,000
Public Housing Authority financ- various purpose improvement
ing. dealers and investors PrQ~ bonds maturing 1961-1995. Later In the following tabulations we list the bond issues of
ceeded to bid the longest bonds to the same day, Phoenix, Ariz., will
$1,000,000 or more for which specific sale dates have been set.
a substantial premium. The issues sell
$9,000,000 (1961-1988) water
seem well placed and the general revenue bonds. These two issues
Information, where available, includes name of borrower,
and apparently well placed with market
for New Housing bonds will compose the week's important amount of issue, maturity scale, and hour at which bids
investors.
Concurrently,
it
ap- seems
better
established than new underwritings.
secondary
market
taken to some dethe result that dealer
that
peared
offerings
were
with
gree
have
shelves
considerably
been
will be
ever.
.
...
..
,,
issues
have been quiet but firm during
Recent Financing
the last weekly period. The Smith,
The largest and most interesting
turnpike
The
revenue
Barney & Company Index was re¬
offering this week (May 10) in¬
volved $30,000,000 Jacksonville, ported at 3.99% on May 5. There
are
no
new
announcements con¬
$381,012,500 last
week.
Yester- Florida, electric revenue (1962day
(May
11)
the
total was 1980) bonds. The successful group cerning turnpike or similar rev¬
enue financings.
$344 384 754.
was headed by the First Boston
As measured
by the Commercial
Chronicle's
Financial
and
state
bond yield index,
the market is up only about onemunicipal
and
The
yield
average
week,
reduced
the
during
point
quarter
was
from 3.47% to 3.45%. The impetus
the
of
in
reflected
be
other
the
index
because
week
table
market will not
issue
new
for
an-
inevi-
the
of
secondary lag implicit in a
rising market.
state
and
New
Persists
Business
technical
The
of
Volume
Small
of
the
market
has
position
municipal
-
measurably during the
weeks. Thd new issue
calendar is relatively light, particularly for this time of year. The
improved
few
past
.
volume of
issues during 1960
well behind estimates
new
Corporation-Shields & Company-
Lehman Brothers and C. J. D
& Company. The interest cost bid
was
*a
^2%
^ 7ftof
X
T
•
.
-
™
«
t<r3.50%. The offering has ^otten
,a-.
!! ?
mfn on!?006
reported at about $14,000,000.
An offering of significance, particularly to New Yorkers, $5,500,-
fallen
offered
May 24. Although the
on
are
and
Institutional
:
mand
has
with
available
investor
than
more
kept
depace
offerings
even
though their interest has been reluctant
in
yields.
face
of
the diminished
Consequently,
secondary
Corporation
-
The
Northern Trust Company-Estabro°L & Company and others were
successful bidders and reoffered
tbe bonds to yield from 2.35% to
3 25%- This issue is reported less
tban half sold,
volume has not
built up for more
periods during the past
few months. At present it is no
problem and may not be for some
As we go to press (May 11) a
managed by Glore, Forgan
&
Company
has
submitted the
winning bid of 3.357%
interest
weeks, particularly should new is- cost
for $6,000,000
Colorado
sue
business not be generated in Springs, Colorada, utility revenue
large volume during late May and bonds.
This highly
rated
issue
June. The summer months can be
(1961-1975) is scaled from 2.50%
than brief
almost
in
counted
be
to
on
lacking
heavy underwriting.
T,
_
„
.
of
are
developing
to 3.35%. A good reception by investors is anticipated. This-offer-'
ing completes the important
.
Danger of Premature Easing
There
group
issues, scheduled for this
period
Credit
that view the
financial situation as
new
weekly
this
of
ment
not in
has
offering
often.
Mtatfe I™ S"°p«a«b
ssszAssn a sr bonds have been
SRtS
Official statements
creait
mecnanism
Most
-i.
bond
i
s
men
at
general
definitely
establish
market
this
at
this
time.
would go
time
along
premise.
a
bull
week's
To has
bond
might easily
been
recent
also
offering
sold
and
marked
New
closed
York
out.
since
this
last
aefcount
closed.
Sequoia
other
California
(State)-
SERIAL ISSUES
Rate
Maturity
Bid
Asked
3Vz%
1978-1980
4.00%
3.80%
LoWAngUfn^
Baltitnnrp
31/2%
33/4%
rfnr^wi
31/4%
1977-1980
1978"1980
1980
3!55%
3.90%
3.65%
3.75%
3.40%
3.25%
3.50%
Cincinnati, Ohio
31/2%
rhiLi ti?s'
31/4%
1979
3-80%
3-65%
31/4%
3%
1980
1977
3'85%
3/70 %
New York
effv N.
TNJ"v"
City,
Y._
1980
May 10, 1960 Index=3.45%
390%
3 8Q%
10:00 a.m.
No. 1,
1962-1985
10:00 a.m.
Wild Announces
and
distinguished
Street
gomery
Maine
tired
as
ident
Onondaga County, New York
County, Virginia
County, New York
46
career on
to
came
Detroit School
Mont¬
a
cept for
District, Mich
Middletown Sch.
Dist., New Jersey
Portland, Oregon
-
Three Rivers Local Sch. Dist., Ohio
Wisconsin
combat
Atlanta, Georgia
Denver,
2V2
of
Grants
No.
and
S.
Marine
Corps
during
World
War
career
I.
of
the
the
following year are
memories.
late
The big proxy
his
Transamerica
Corp.,
then
the
of
Bank
of
company
titanic
contest pitted
Giannini, Bank of
founder,
against
Wall
1961-1970
Noon
1964-1988
2:00 p.m.
1961-1980
3:30 p.m. j
School
2,000,000
June 1
•
(Wednesday)
Harlin'gen Consolidated Independent School District, Texas—
King County, Washington
Upper Arlington School Dist., Ohio
;
2,285,000
-
1962-1980
10,000,000
—
11:00 a.m.
Noon
2,000,000
June 7 (Tuesday)
Memphis, Tennessee
Memphis Bd. of Education, Tenn.__
June 8
Kern
15,000,000
2,700,000
1981-19901961-1990
2:30p.m.
1964-1970
11:00 a.m.
—
(Wednesday)
County
Joint Union
High
District, California
Los Angeles Dept. of Water &
Power System, California
School
5,870,000
15,000,000
—
proxy
P.
Elisha
Walker faction
work
P.
sent
for
Walker.
our
them,
soliciting
relinquish
and
Executive
his
seat
Calcasieu
No.
Parish
School
the
'
2,000,000
1961-1980
10:00 a.m.
June 14 (Tuesday)
Michigan
St.
,
,
Honolulu, Hawaii
_T
_
Paul, Minnesota
25,000,000
—
-
2,495,000
June 16 (Thursday)
2,000,000
:
June 21 (Tuesday)
,
Norfolk, Virginia
Viceon
District
30, Louisiana—
salesmen
California management persuaded
him to stay on. He did
of
June 9 (Thursday)
t
^
"The
fice, however, was all for A. P.
We were happy when he won."
Mr. Wild, who is now 66, had
hoped to retire a year ago but First
post
President
Parish
3, Louisiana
fight for control
America stirred up a hornet's nest
in
Bankamerica Co., he recalls.
tne
1,000,000
District
_____
among
strongest
to
Rouge
No.
20s
a
approached
climax. The nightmarish events of
Streeter
11:00 a.m.
11:00 a.m.
11,750,000
1962-1990
1962-1990
1963-1987
1,325,000
its predeces¬
joined National Bankitaly
in 1928, as the great bull market
America
Baton
District
He
out
School
Pierce, Florida
West
Richard W. Wild
National Bankitaly Company.
A.
10:00 a.m.
10:00 a.m.
7:30 p.m.
12:30 p.m.
10:00 a.m.
8:00 p.m.
11:00 a.m.
Noon
7:30 p.m.
spent with First Cali¬
was
late
•?-
May 31 (Tuesday)
firms, Bankamerica Company
and
the
Municipal
3, New Mexico
Fort
fornia Company and
sor
1
.1962-1995
1961-1985
1962-1965
1961-1980
1961-1980
3,750,000
1962-1982
2,000,000
1963-1982
1,700,000
1961-1980
1,400,000
1963-1997
May 26 (Thursday)
Most of his
of
Colorado
cupation
c
v
__
.
2,300,000
1,558,000
Bunkie, Louisiana
ex¬
a
3:00 p.m.
8:00 p.m.
May 25 (Wednesday)
on
for
tour
year
1960-1988
1962-1989
2,028,500
1,290,000
9,125,000
10,000,000
1,500,000
2,800,000
3,000,000
—
Gary School City, Indiana
Lynchburg, Virginia
Madison, Wisconsin
close
Wauwatosa,
years,
11:00 a.m.
10:00 a.m.
11:00 a.m.
Noon
11:00 a.m.
50,000,000
——
""Dick" Wild
been
"
—-
Detroit, Michigan—
Calif..—A long
a
Street
j.
Baltimore, Michigan.!
California
•
Company.
the
1961-2000
1964-1994
1961-1983
1962-1985
1961-1975
May 19 (Thursday)
Rennselaer
New
California
has
7,250,000
5,000,000
5,750,000
2,325,000
■;
L
;
'
2,500,000
Weston, Massachusetts
First
of
i
Princess Anne
Pres¬
-
——
Mississippi
May 1 when Richard W. Wild reVice
1,000,000
"
-
May 18 (Wednesday)
May 24 (Tuesday)
Retirement
SAN FRANCISCO,
■
—_
Louisiana
present calendar of sched¬
issues amounts to only
proxies. The sentiment in the of¬
3.40%
1961-1985
p.m.
Parish Con. Sch. Dist.
Terrebonne
is
The
S slot
« i:is% S55
Union High School Dist.,
———————1,500,000
new
parent
MARKET ON REPRESENTATIVE
2:00 p.m.
10:00 a.m.
10:00 a.m.
2:0
School
California
$350 million. This is less than half
was a few weeks back. It
The
City account is
Numerous
1961-1980
1961-1988
1962-1985
11:00 a.m.
2:00 p.m.
\A A' A;
Dist.,
Phoenix, Arizona—
Pittsburgh, Pennsylvania
duty with the
•
„
2,250,000
9,000,000
3,750,000
etc., Central
District, New York
than it
U.
.eih eas*nS of
It is interesting to note the good
6
1Sf
a5i S°me follow-thru sales in recent new
ffr. e a* sentiment, as well as po- issue accounts which have been
^,enng of reported since last week's article.
wLl rfrtw
^ould aPPear> After initial reoffering on Tues^ne;pe '
f important a day, a week ag0, there were
i
f13' fy §15,500,000 State of Minnesota
the nart nf thlU F^ans
fFn n °n bonds remaining in account. This
p.m.
1962-1981
Montgomery,
-'
The
uled
O
l°J
p.m.
8:00
1,188,000
—
New Jersey
upset the market.
highly rated obligation is now
class by itself and a heavy
manner
many
Older Issues Quickly Sold
8:00
1961-1978
1963-1990
Springs, Arkansas ____.
Lawrence Township School
Hot
^
First Boston
,2:00 p.m.
1,055,000
1,300,000
Bay, Wisconsin
Green
replete with offerings
of California bonds, the announce¬
sheets
ill appears that for the first
half the volume may be off as
year.
1961-1990
.
and
the
.
L
considerably less than the mar¬
writing.
,
ket might
absorb in the period
On Tuesday, Cambridge, Mass.,
ahead. Extravagant new issue bid¬
a city that rarely comes to market,
ding seems likely to continue.
much as 25%. This is a surprising accepted bids on $4,500,000 serial
development in view of the dy- (1961-1980) bonds at a new high
namic
estimates
made
early in level for this market move. The
has
Noon
Noon
1961-1980 j Noon
1,250,000
—
Noon
1961-1975
May 16 (Monday)
Ohio—
1,000,000
Cullman, Alabama
•
1961-1980
1961-1980
Chillicothe School District,
000 Suffolk County Water Author- This
ity, New York was also made on in a
May
10.
These revenue bonds
supply of California bonds seems
(1961-1998) were bought by the
not
directly related
marketwise
Harriman,
Ripley
& Companyto
other
high
grade
offerings
Goldman, Sachs & Company- which appear in the market less
was moderate. About $4,000,000 remains in account at this
,
,
King-Size California Issue ?
'2
May 17 (Tuesday)
;
,
.-vA,;.''
Later On
''f": Bonneville Co., class "A" School
:
The largest addition to the new
District No. 9, Idaho
1,400,000
f—
issue schedule is $50,000,000 State Bridgeport Comm. Sch. Dist., Mich.
2,200,000 1961-1989
of California serial bonds to be Cincinnati, Ohio——_:—
9,515,000 1961-1995
any
Glore, Forgan & Company-L. F.
Rothschild & Company groups,
Scaled to yield from 2/75% to
4-10% the initial investor recep-
opened.
A May 12 (Thursday)
Fairview City School Dist., Ohio__
1,100,000
Groton, Connecticut—1,000,000
Utica, New York——.
—
0 1,093,632 -
,
lightened. The Street Float, as indicated by the "Blue List," totaled
•
Scheduled For Sale
Larger Issues
'
9,000,000
July 14 (Thursday)
New
Orleans, Louisiana
6,200,000
.
—
10:00 a
191
Volume
Number 5956
,
.
.
The Commercial and Financial Chronicle
.
(2043)
ly will
continue to improve and
develop in the light of new ex¬
perience and changing times and
conditions.
'
Current Policies of
Pension Fund Investing
Philip Hampton,* Investment Manager, the State Teachers
liy
Retirement
:
System of Ohio
growth in knowledge and soundness by pension
fund managers, and traces historical broadening of the fund he man¬
ages—one of the nation's older. Lists fund characteristics, including
geometrical growth from cash in-flow and tax advantages. Envisages
complete elimination of government bonds, shunning of preferred
stocks, with concentration on taxable corporation bonds. Notes aver¬
sion to foreign issues. Comments favorably,on World Bank bonds //•/
The
call-protected bonds. Approves greater purchases of common
"dollar averaging" and "formula" techniques. ;
and on
for
who
12
'
there
thousand
Last
(2) There is practically no need
concern
over
liquidity, as we
the pension
fund will probably never be liqui¬
dated and the cash flow provides
new
all of the
retired list.
about
> were
retired
month.
statistics
These
are
cash
funds
have
characteristics
cited
not
actually had its inception in 1920, somewhat between funds due to
approximately 40 years ago.. As the nature of the business or pro¬
fession
involved.
On the other
was so often the case in those
days, the investment of its funds- hand, certain factors are common
to all of them and are important
was severely limited by law. / In
in forming investment policy.,
I
its case, investments were limited mention
'/ three
very
important
to United States Government Se-,
curities and to State, of Ohio genv, characteristics that are common
to all pension funds:
eral municipal obligations. -
tion
and
distribution
of
funds.
more
rudimentary
the
baked 1 clay,
have
effect,
given
further
/
in
im¬
ing
pension
meet the
As
adequate to
workers.
funds
of
needs
United
aged
consequence, older pension
funds have been re-examined in
a
issues
21/2.%
ing
States
which
of
most
petus to the necessity of develop¬
the
war
Treasury
were
that
sold
en*ire por^°^° wa°
and
needs
experience, and
funds
have
new pension
started
on
a
been
wide scale.
gained in this
relatively^ new_field
of pension fund management,
and,
was
at, that
ment
arVj ef|or^»
policies
pmproo
u
^k°se who
with the
and
pension funds
.
charged
are
of
some
breaking
the
*
of
"strait-
old
*u-
away
•
i
a
Ways of thinking.
...
tuaries are
es-
management
are
iarkptpri"
t
to
,
responsibility of the
tablishment
from
beginning
are
,
rru_
,
'
after
time,
Management of
pension funds is gradually chang-
any
NEW
ment
m
from
a
ment
of
vate,
quasi
rr,
•
Q
pension
funrk
funds—the
pri-
public
and
+u
Dencin
sion
x
j.
management
of
the next sev-
^
iunds
over
servative investments. '•
At
fund
many
facets and
have not been fully
question,
cfin
There
+^
are
™
swell ?
StlU t0 bG an~
No ?
attempt will be made
ca.
eiG
to
list
all
of
itself,
War II
the
/
-
that
at
/
time,- and—
the U. S.y Government was
ultimately be reduced to a
small percentage, and by ultimate
maturity
practically
to
until the return
be
can
found
elsewhere,
bonds
government
thing
same
can
better corporate bonds; municipal
bonds of any of the . states,.-includ—
ing revenue bonds (with certain
gages;
15%
invested
in
mort-
guaranteed
and
insured
of the^fund can be
stocks, and
v
The
of Federal Agency bonds.
'V'
,'
.
/
.
\
•
"
'
■
The Mortgage
.
..
.
'
.
1912
A.few words about mortgages—
our experience in very
recent
particular
that,at
years
times, due to the over-supply of
government insured and guaran¬
teed mortgages and their conse¬
un¬
bonds.
In
our
own
case,
purchases and we now have a total mort¬
will
be gage holding of about 50 million,
Although the present hold¬ or about 10% of the fund at the
ing-,
of
government
securities moment. The overhead cost to the
yields substantially less than 3%., fund of handling and servicing
ihe current dollar prices prevail¬ these mortgages is very low as
made.
,
ing for these old issues are so far
below
their
ultimate
maturity
value, that it .is , difficult indeed,
they
be
can
for
pension fund, to liqui¬
a
.;
acquired
denominations,
'
even
and
an
offer
to
sell
nor a
solicitation of
an
Continued
on
offer to buy
Series due 1970
Share commencing
described in the Prospectus.
initially into Common Stock at $22 per
January 1, 1%1, as more fully
Company is issuing to the holders of its outstanding Common Stock of record at the
I960, rights entitling the holder thereof to purchase Con¬
the principal amount thereof, at the rate of
Convertible Debentures for each share so held of record. The
subscription offer expires at 3:30 P.M. (New York Time) on May 27, I960.
Debentures,. 5*4% Series due 1970 at
$4 principal amount of
the
questions;
much less
answer them
Subscription Price 100%
During the subscription
period and after its expiration, the several Underwriters may offer
and pursuant to the terms and conditions set forth
Convertible Debentures at the prices
in the Prospectus.
:/
Copies of the Prospectus may be obtained from the undersigned only in states inhere the
undersigned may legally offer these securities in compliance with the securities laws ther eof.
it wise to
AHen 8C
entirely invested in government
1947,
had reached $150
after
the
Company
fund
million in total
assets, the policy was changed to
may be of
+
*
' permit the investment of funds in
cus^ m
in
interest to dis- -«legais" for New York Life Insursome depth
one
particu- ance Companies, but it was not
dr
pension fund and from that/until
1950 that the policy was
However
Bear, Stearns 8C Co.
Ladenburg, Thalmann & Co.
Jt
*
ussion
we
draw
may
some
s
As
pension funds
go, The
edchers
.
hl° is
*0
the
be said
fund s-
Retirement
not
State
System
of
th^t
-t
tnHav
•
hut
it
y'
15 Qne of
e
older
Legislation for its creation
purchase of
Similarly, it was
the Bell Telephone
stocks.
until 1958 that
one of the oldest funds
countrv
T
changed to permit the
common
guidance.
System Pension Fund was permitted to be invested in any com-
stocks. These instances arc
cited to point out that pension
fund investing has evolved over
a period of years in the light of
actual experience, and undoubted-
mon
E. F. Hutton &
Company
Auchincloss, Parker 8i Redpath
Janney, Dulles 8C
Battles, Inc.
in
the
of these securities. The offer is made only by the Prospectus./
do so. In 1946 20 years later, the
fund although "funded was still
In
FHA
likelihood that any new
of
government
bonds
experience had been gained dur-
bonds.
an
mortgage—known as the "Capeernment bonds exceeds the return hart" mortgage—has afforded the
on
other eligible and
otherwise fund an attractive investment op¬
sound investments, there is little portunity over the past few years,
gov¬
a
ing that time to make
.
.
.
it has been
of the ,l
For comparison, the General
Electric Company was one of the
pioneers
in
industrial pension
fun(js
That company started in
.
Situation
close of business on May 6,
vertible
The
all.
at
be said, of course,
can
Jersey Naturat Gas Company
Convertible
there
to be little reason why
pension fund need own any
appears
/V quent
lower
price
and
highet
yield, it has been to our advantage
pur¬ to buy such mortgages rather than
on
Convertible Debentures, 5 %%
preSent time the fund
be invested in "A" grade or
In
zero.
fact, unless government bonds af¬
ford a greater income return than
'-
of U. S. Treasuries and
less and
growth of the fund, the
of
government
bonds
several years since
the fund has made any new
chase
Could
»;
.
largest borrower.
It has been
the
to
holding
brought
The fact that during World
(2)
/
:
maturity and the fund in effect
be
"dollar
cost
averaged"
the years. Conceivably, due
any
The legal restriction of the
(1)
to
with
will
May 9, I960
New
the
?enS1°n which would indicate that enough
^cognized and probed.
many
;////
was-;,
pension funds) will be held
$3,830,000 /'
.chang^^to^iier^
.r
°f
fund,
mmifications,
This
most
prevails
mit a far wider latitude for con-
"pay-as-you-go," unfunded,
ei'9l years
will give rise to many
retirement program. It was not
Problems. The economic and so-' Aintil 1927 (15 years later) that us
eial
con?pn,,0n0n„
•
retirement plan /was "funded,
? 1T
us, with their
bonds.
situa¬
same
undoubtedly
*
public
-
so-
a
pointed out, at the end
about by two factors--
latter amount, 10% can be investguessing.,
game, to - a ecj jn common stocks. The fund
re certain
.business.
;also may invest in productive real
The evolvement and
develop- estate within the state,
ing
are
and
hazards,
take
(and the
tion
ISSUE
much study
Ac- restrictions);U. S. Government
developing experience
and "know how."
realThe law,
not until 1955 that a
istic approach was taken.
it seems, certain definite
manage-
cost
pension fund was approxi¬
70% invested in govern¬
This announcement is neither
ment during that period, you will
y,
new
changing
to
need
no
ment bonds
dur¬
(The govern-
Gradually, experience is being
light of
is
the
bonds available
bonds,
remember, was the big borrower
and practically the only borrower,
so the funds had to go into U. S.
Treasury securities.) Even as late
as the end of August 1955, the re-
the
"dollar
period of years.
business
holdings for reinvest¬
current high return
today. Especially
is this so if no protection against
an
early refunding of the new
bonds is provided. It would seem,
therefore, that over a period of
years these
holdings of govern¬
in
ment
various
the
were
years.
This
mately
form even came legal, for the fund to invest
tablets of in certain AAA and AA Corpora- g (3) If the fund is set up on an
Babylon.
/► /
• ' /
tion bonds, but since most of the actuarially sound basis, the flow
Undoubtedly, the recent growth, bonds that fall into these select of cash/into the fund will exr
both in number and in capital, categories
are so-called "money ceed the cash outgo by a substan¬
of pension funds reflects a .basic rate" bonds they often yield not v tial
margin and the fund will
social philosophy
which recog- too much more than U; S. Treas- continue to grow -in a more or
nizes the desirability — even ne- ury issues.
This widening of per-, less geometrical proportion,/ at
cessity—of providing for the needs missible investments did not pro¬ least until stabilization between
of aged workers to an increasing vide the fund with the increased
new
members and pensioners is
extent.
The advent of the Fed- earnings it needed.
Having been . reached../
eral Income Tax
just prior toJ so restricted in its investments
There are some other common
World War I and the Federal Es- from 1920 to 1949, the return on
characteristics
but
the
three
tate and Federal Gift Tax laws of the total investment portfolio of
above
are
certainly
basic
and
the early
30's .brought on the they fund was very low indeed. from them certain criteria can be
Federal
Social
Security law of Specifically, at the end of World formed to
govern investment pol¬
the middle 30's.
These laws, in War II the fund was 70% invested
in
in
a
fund.
catastrophes
to
other
was
ers'
income
,
many
effect
these
date
over
of World War II the Ohio Teach¬
industries/- We can.
■
*
1'* ... / . % (X) All are exempt from
of the modern prac-. - -- .
Relaxation m 1949 /;/■•/: and capital gains taxes. •'
tices of banking and insurance in
It was not until/1949 that any ;
(2) All are set up on a longthe
records of
the merchant- real attempt " was made to rel&x
bankers of the Renaissance, and these restrictions.
In 1949 it be-, range basis, as to the accumula¬
find
the
over a
subject
As
•.
the insurance
into
called defensive position.
.
.
,
flows
many
there
vary
may
/
(4) Since retirement funds
y,
specific
certain
that
as
liquidity needed.
permits in
averaging"
to point out the fact that all pen¬
was enacted in 1919 and the fund
term,
(3) Pension f u n d s should be
fully invested at all times as the
11
pensioners.
Mortality; among both active and
retired, is about
40 persons
a
v
of the
think
approximately
the
on
there
year
hundred
are
capital appreciation.
This is
major
consideration
over
eveything else.
80 thousand members
into
the
fund
each
pay
month;
sion
comparative
investment
business;
indeed, only since
World War II have they come into
their own on a large scale; so to
sneak
and have their special
problems
been recognized.
In
contrast, the commercial and savings banking-industry has ^evolved
over many, many years,-as have
funds are
newcomers
in1 ■ the
and
pension
time at the rate of about $60 mil¬
lion a year.
There are, roughly
speaking,
a
few of the
considerations:.
name
investment
(1) A pension fund is primarily
with
buying
income
the
stocks, under
Pension
Teachers',
will
I
concerned
fund has approximately $475 mil¬
lion in total assets at this aate,
and it is growing at the present
Hampton notes
Mr.
Ohio
icy.
major
7
Sutro Bros. & Co.
Chace, Whiteside & Winslow, Inc.
Woodcock, Moyer,
Fricke 8C French
Incorporated
large
monthly
page
33
8
(2044)
Company—Re¬
Lowell, Murphy & Co.,
Qlub Building, Denver 2,
American Gypsum
DEALER-BROKER
port
—
Denver
Colorado.
INVESTMENT LITERATURE
AND RECOMMENDATIONS
IT
IS
UNDERSTOOD
TO
THAT
THE
INTERESTED
SEND
MENTIONED
FIRMS
PARTIES
BE PLEASED
WILL
Corporation—
Analysis — Halle
Wall Street, New
& Stieglitz, 52
York 5, N. Y.
Insurance Company —
Analysis—Walter C. Gorey & Co.,
Russ Building, San Francisco 4,
Argonaut
Air
Trunk
Line
Prospects
Bul¬
—
letin— H
Hentz. & Co., 72 Wall
St., New York 5, N. Y. Also avail¬
able is a bulletin on Mississippi
River Fuel Corp., a review of tne
Motors
and
analyses of Waste
King: Corp. and Minneapolis & St.
Louis.
';'/
Stocks—Quarterly compari¬
leading banks and trust
companies of the United States —
New York Hanseatic Corporation,
120 Broadway, New York 5, N. Y.
of
Burnham
Gas
View—Monthly Invest¬
per
list
a
Mutual Life's
year-end portfolio; 51 listed com¬
panies with sales or revenues of
$1 billion or more in 1959; and
data
Supply company of New
and
Olin Mathie-
Loeb, Rhoades &
Co., 42 Wall St., New York 5, N.Y.
Tintic
Utah
reference
Co.
Mining
Co.
Sons,
A.
&
Casualty
—Robert H.
Standard
Edwards
G.
485 Lexington
17, N. Y.
York
Fire
Consolidated
Tintic
and
—
torial
&
Stocks—Bulletin
Bulletin
—
Co.,
—
Calif.
A. M.
Wall St.,
New York 5, N. Y. Also available
are
studies of Springfield Mon¬
arch
Inc.,
Insurance
1
Companies,
a
Protective
report
and
Brown Company.
on
Hawaiian
Association,
Securities
—
Bulletin
—
Index
Theory
fidence
the
on
Index."
Japanese
outlook
v
Imports
in
—
Con¬
:
Heavy
ment
Industry
Sales.
Also
on
and
Engineering
Steel
Power
New
are
Ltd.,
Common
Utility
Stocks—
Comparative figures — G. A. Sax& Co., Inc., 52 Wall St., New
5, N. Y.
ton
York
Selected Investments—List
of
se¬
curities which appear attractive—
Courts
&
Co., 11
Marietta St.,
N.
W., Atlanta 1, Ga.
Steels—Review—Schirmer, Atherton & Co., 50 Congress St., Bos¬
ton
3,
Craig
Also
Mass.
S.
on
available
D.
Systems,
is a
Co.,
Warren
Inc.,
Co.,
West
and
Put
Herbert
—
Point
Texaco,
Call
&
Filer
Op¬
Crown
—-
Gas
Breweries
and
are
McGregor-Doniger
Canadian
Gas
Mag-
and
Invest¬
Energy
&
Review:— Gairdner
Company Limited, 320 Bay St.,
ments, Ltd.
—
Bul¬
bulletin
a
Williams-
on
Industries.
Memoran¬
Street, Philadelphia 2, Pa.
Koppers Company
Analysis
—
Laird. Bissell & Meeds, 120
York
way, New
available is
an
analysis of Haveg
Steel
Memorandum
—
& Company,
Hartford
4,
Street,
available
Also
data
are
on
National Video Corporation.
Inc.—Analysis—
Chemicals
Cary
P. W. Brooks & Co. Incorporated,
120 Broadway, New York
Combustion Engineering
Bulletin
Street, New York 5, N. Y,
Broadway,
Crompton
Beaver
Analysis—Eppler, Guerin & Tur¬
ner,
Inc.,
Fidelity
Union
Life
Building, Dallas 1, Texas.
Machine—Bulletin—Bache
Co., 36 Wall St., New York 5,
N.
Y.
York 4,
Also available is a report
Denver &
N.
Also available
"Six
on
Oils for
National
dum
is
the
City Lines
—
4, 111.
Trust
Savings
&
Bank, Pepsi Cola Co. and
California
South¬
Edison.
of
Delaware
Cruttenden,
South
Industries—Memorandum
view
Ferro
Pet
Corporation
—
Analysis —
Dillon, Union Securities
Co., 15 Broad Street, New York
Copeland
on
a
memo¬
Refrigera¬
Memorandum
—
in
review
Light
on
New
available
is
York
a
—
Memo-
&
Co.,
4,
N.
2
Y.
memorandum
Ryder System, Inc.
For financial institutions only-
New
the
of
&
York
same
Co.,
65
N.
Y.
6,
circular
is
International Recreation
Farrington Mfg.
Milk—Memorandum—Julien
Baird-Atomic Inc.
Perkin-Elmer Corp.
Co.,
Fla!
Scale
Toledo
ysis
Corporation—Anal¬
McDonald & Company,
—
land 14,
Vitamin
S.
U,
Hydrometals Inc.
Walter
on
Bought
#
available
is
a
memorandum
Lane,
Space and Co.,
Inc., 101 East Bay Street, Savan¬
nah, Ga.
Casualty
and
Surety
Company—Analysis—Blair & Co.,
Incorporated,
20
Broad
5, N. Y.
Service
—
Electric
&
Thomson
White
Motor
Y.
N.
In
review
the
of
Company.
Winn
Dixie
a
Inc.—Memo¬
&
Co., - Inc., 74
New York 5, N. Y.
Street,
available
is
memorandum
a
Gypsum.
-
:
Copymation
Econ-O-Veyor*
National Beverage
Standard
Manufacturing
Hi-Press Air Conditioning *
*Prospectus
on
Request
PLYMOUTH SECURITIES
•
CORPORATION
4, N. Y.
92
Purex
Olgby 9-2910
Corp. Ltd.—.Memorandum
discussion
Beech
of
same
circular is
Cessna
Aircraft.
Aircraft
Aircraft
-
Engineering
Corp.—Review—John H. Lewis &
Co., 63 Wall Street, New York 5,
N. Y.
■
Hartford Electric
Light—Analysis
—Ernst
& Company, 120 Broad¬
New York 5, N. Y.
Harvey Boat Works, Inc.—Analy¬
Company,
sis—Walter R. Blaha &
Co.—Memorandum—
LIBERTY STREET
Richman
Brothers—Memorandum
—A.
Becker
G.
&
Co. Incorpo¬
rated, 120 South La Salle Street,
Chicago 3, 111.
,
This
to
»
N.Y. 6. N.Y.
•
Teletype N.Y. 1-4530
•
is
neither
these
made
only
securities.
by
the
an
offer
offer to
The
offer
prospectus.
New Issue
Singer Manufacturing Company—
Analysis—Green, Ellis & Ander¬
son, 61 Broadway, New York 6,
N.
is
announcement
sell nor a solicitation of an
buy any of
304,280 Shares
Charlotte Motor
Y.
Simrer
Manufacturing Company—
Bulletin—Hill, Darlington & Co.,
40 Wall St., New York
5, N. Y.
Speedway, Inc.
Common Stock
(SI.00 par)
Executive Sales Director
Sold
Fourteen
years
Security Dealers Association
sales
Trinity Place, New York 6, N. Y.
Teletype NY 1-376; 377; 378
—
experience
capable
of
force—advertising
salary, open
resume
421, Commercial
on
&
New York 7, New York.
supervising national
rejuvenating
and
sales
or
promotion
request—will
sales
formulating
Price $2 Per Share
force
Copies
tained
new
experience—
those
may
of
the
from
States
legally
compliance
relocate
if
necessary.
prospectus
may
be ob¬
undersigned only
the undersigns
the
in
which
offer
with
the
these
securities
securities
the
law* °>
respective States.
Financial Chronicle, 25 Park
Place,
MORRISON AND
806
COMPANY,INC.
Liberty Life Building
Charlotte
a
Company.
study of Mag-
Stores,
Bestwall
on
is
Kendall
navox
Also
circular
same
the
Also available is
Mc-
Chesley & Co., 105 South La Salle
Street, Chicago 3, 111.
Box
Company—Analysis
Auchincloss, Parker & Redpath, 2 Broadway, New York 4,
—
Gas—
&
Richardson
request
TROSTER, SINGER & CO.
74
Street,
New York
on
Co., 80 Pine Street, New York 5,
—ambitious
HAnover 2-2400
Corporation—Report
—Johnson,
..
Prospectus
Member New York
Pharmaceutical
Fales
Co., 71 Broadway, New York 6,
N. Y. Also available is a circular
'Microdot
*
&
&
G. D. Searle Co;
:• ■'
Building, Cleve¬
Ohio.
Harris Trust & Savings Bank.
Gillette Co.—Data—Sutro Bros. &
way,
Kakouris
&
—
Mines
Grumman
Corp.
Memorandum
a
Collins & Company, 105 South La
Salle Street, Chicago 3, 111. Also
Public
and
Trading Favorites—
Mc-
Ainsley Building. Miami 32,
Pittsburgh Plate Glass
Limited—Analysis— —A. C. Allyn & Co., 122 South La
Wills, Bickle & Company, Ltd., Salle Street, Chicago 3, 111. Also
44
King Street, West, Toronto,, available is an analysis on CulOnt., Canada.
ligan, Incorporated.
a
and
Co.
Texas International Sulphur Co.—
Coke—Re¬
&
Fahnestock
Geco
Co.
Chicago
Inc.,
—
American
Goodbody
same
Podesta & Co., 209
Street, Chicago
Gas
—
Also
Co.
New
the
on
Primary Markets In
Peoples
—Pershing & Co., 120 Broadway,
New York 5, N. Y.
in
Salle
La
Broadway,
,
Supply Co.
Co., 70
Pine Street, New York 5, N. Y.
Express
Industries,
Aerial
Street,
data
are "
Rio Grande Western—
Kinnon, 2 Broadway, New York
—
circular
Liberty
Y. Also
Wall
West—Report—William R. Staats
& Co., 640 South Spring Street,
Los Angeles 14, Calif.
&
5,
ysis—Cohen, Simonson & Co., 25
Broad St., New York 4, N. Y.
Memorandum
Stonehill
55
N.
Co.,
randum—Walston
Harris
randum
&
York
Parke Davis and Company—Anal¬
on
Inc., Kop¬
Telephone Service Co. of Ohio—
Data-^Alfred L. Vanden Broeck
Y.
Big
New
lic Aviation, Youngstown Sheet &
&
Memoran¬
—
Bruns, Nordemen & Co.,
Broadway. New York 6, N. Y.
115
M. F. Patterson Dental
Dresser
bulletin
a
Long Pull."
Bulletin—Paine, Webber, Jackson
& Curtis, 25 Broad Street, New
York 4, N. Y. Also available are
data on Gimbel Brothers, Repub¬
ern
—
Inc.
Rubin
St.,
Lines
Motor
Fast
&
—
Company !
Nlin-1
Company
Foote
Western;
Merchants
Mesta
Knowles—Report& Co., Inc., 56
&
Simmons,
N. Y.
5, N. Y.
Reynolds & Co., 120
New York 5,
N. Y.
—
Corp.,
pers.
on
Carolina Power & Light Company
Pearl
Worthington
Allied
Manpower
Products
eral Company, Sanborn
Jim
Co.—Analysis—L. F. Rothschild &
Co., 120 Broadway, New York 5,
100
Corn
Vendo,
General
Co., 44 Wall
Theodore Tsolainos &
Marquette Cement Manufacturing
Conn.
Corp.,
Also Corporation—Analysis
Hay,
Y.
N.
5,
—
Broad¬
Toronto, Ont., Canada.
—Analysis—Cooley
Chemical
on
Carbide,
Union Commerce
Industries, Inc.
Lukens
Union
—
First Financial Corporation of the
Cyanamid—Bulletin—
Broadway,
"
Co.
Resistance
Analysis—Steiner, Rouse & Com¬
pany, 19 Rector Street, New York
6, N. Y.
—
N. Y. Also in the
Current
memorandum
tion.
is
Also
Ltd.
\.
N. Y.
New York 5,
data
are
Cable,
Gravv Hill Publishing
International
Memoran¬
able
orandum
Sumitomo
Industry Co., Kawasaki
and Tokyo Electric
:
—
5, N. Y. Also available is
Federman,
reports
Corporation
struments.
nut
letin—Georgeson & Co., 52 Wall
St., New York 5, N. Y. Also avail¬
American
Corp.,
Co.
Bureau,
McWilliams
Equip¬
Shipbuilding
Co.,
— National
Quotation
Inc., 46
Front
Street,
York 4, N. Y.
period
year
Alabama
Automobile
available
Mitsubishi
Chemical
Electric
Bureau
y
navox.
&
Woodcoqk,
—
Fricke & French, Incor¬
porated, 123 South Broad Street,
Philadelphia 9, Pa. Also available
are
a
list of favorite stocks, and
a
memorandum on Beckman In¬
Moyer,
dum—Boenning & Co., 1529 Wal¬
N. Y.
Eastman
—
Duty
Quotation
*
and
issue of "In¬
Yamaichi Se¬
New York, Inc.,
Ill Broadway, New York 6, N. Y.
In the same issue are analyses of
the
in
used
Averages, both as to yield and
market performance over a 20-
/
Review
over-the-
35
stocks
Publishers, Dept. A-7, 419 Park
Avenue, South, New York
16,
N. Y.—$3.00
(ten day free ex¬
amination).
April
vestor's Digest"
curities Co. of
National
the
tions
"Bank
Barron's
vs.
the
and
industrial
Understanding
Dobie and Com¬
bulletin
Averages
counter
Dow-Jones
the
Corpora¬
Rectifier
Analysis
—
Pierce, Fenner
Incorporated,. 70 PinP
Revere Copper & Brass
Y.
New York 4, N.
International
—
dum—Francis I. du Pont & Co., 1
Tube,
Ltd., 25 Adelaide St., West,
Toronto, Ont., Canada. Also avail¬
a
in
Inc.
pany
is
compari¬
industrial
Manufacturing
Iron Ore, Copper and Gold Stocks
able
—Ira
on
York 4, N. Y.
Nickel Co. of Can¬
ada—Review—Droulia & Co., 25
tion
Lynch,
Smith
Reader"
Review
Interstate Bakeries
Haupt & Co., Ill Broadway,
Street,
the listed
•'/■v;-/?':-
Burroughs Corporation
available
Folder
Summer¬
and
time Favorites.
Also
—
Record
the
on
Industry
Wall
up-to-date
used
bulletin
Bishop Securities Ltd., King and
Bishop Sts., Honolulu 4, Hawaii.
—Data—Draper
an
Index
data
are
edi¬
an
in the same
Apple Supermarkets.
An¬
heuser-Busch, Inc., and Massachu¬
setts
stocks
Public
Huff & Co., 210 West
Equities
Kidder
&
bulletin
Keeping
"Telling
Store,"
guide for listed companies.
between
New
Ave.,
Seventh St., Los Angeles 14,
Gold
of
particular
with
Chief
to
Mining
District
Mining
Report
—
brochure
a
Corporate
son
East
is
Co. Also
Broadway, New
4, N. Y. Also
York
Canadian
showing
M.
"Investment
—
liston & Beane, 2
Dentists
York and Tractor Supply
Data in May
Letter"—J. R. Wil-
Company
Brown
New York 6,
Chemicals—Study with particular
Carl
Photocopy
American
on
Over-the-Counter
Chemical
Calif.
Equipment Co., Suburban Gas Co.,
reference to Union Carbide, Mon¬
—
Penn
in
available
scn
are
valuable
same
20
most
the
of
issue
the
In
year.
Your
santo
the
of
Magazine, 11 Wall St., New York
5, N. Y.—20 cents per copy, $1.50
15 Broad Street, New York
5, N. Y. Also available in current
Foreign Letter.
Discussion
industry — In the May issue of
Exchange" — The Exchange
ment Letter—Burnham and Com¬
pany,
—
"The
equities
Bank
son
Natural
N. Y.
International
Broad St.,
Register—Memorandum!
—Merrill
—
Honeycomb Products,
Broadway, New
Viscose
American
FOLLOWING LITERATURE:
THE
Calif.
San Francisco 20,
Standard
&
Inc.—Anal¬
Montgomery Street, ysis—Alessandrini & Co., Inc., 11
300
porated,
Incor¬
Company,
California
First
New York 4,
Analysis
—
Thursday, May 12, 1960
.
Memoran-* Street, New York 5, N. Y.
Also!
& Co., 30 Broad St., in
the
May
11th
"Investors1
Chocolate
Hershey
. *
North,
Bridge Plaza
City 1, N. Y.
29-09
Inc.,
Long Island
dum—Hardy
-
American Marietta
Chronicle
Commercial and Financial
The
"
2, N. C.
ED
3-9645
Volume
Number 5950
191
.
.
The Commercial and Financial Chronicle
.
there would be dislocations these
would be
minor relative to the
Seaway and
St. Lawrence
B. Elver,* Minerals Economic Section, Mineral Resources
Division, Dept. of Mines and Technical Surveys, Ottawa, Canada
Ify R.
evaluates the effect of the St. Lawrence Seaway on
the Canadian mineral industry and upon alternate transportation
routes. Mr. Elver expects the high grade relatively inexpensive ore
from Labrador-Quebec may lead to plants in jj. S. A., or Canada, or
both, to feed the local steel market and to take advantage of the
cheaper Seaway transportation to some market areas. He describes
the producers of iron ore and their plans, and devotes most of this
study to iron ore but does not neglect coal and coke, petroleum and
petroleum products, nonferrous and ferroalloys and steel. In recount¬
ing the events leading to the Seaway's construction, he refers to our
pressuring need for iron ore, and the mutual needs of defense, elec¬
tric power and industrialization of the Great Lakes and St. Lawrence
Canadian expert
Seaway, a deepwater canal system between Mont¬
real
and
Lake Ontario,
was
opened for navigation on April 25,
to
1959. Prior
the
Sea-
new
way,
small
boats
known
and
deep-sea
into
and barges
deepened
not until
that
construction
only
14-foot
linked Montreal with
Lakes and
ocean-going freighters
of the day;
Throughout the whole
the Great
of canal building on
the
world's
largest
work of inland waterways
St. Lawrence canal
oceans
net¬
and the
of international commerce.
During the 1920's and 1930's the
system.Thus it was necessary for
many tons of bulk Land
general capacity of the system to handle
even small boats and barges was
cargo to be
shipped all-rail to
reached.
and from Atlantic ports or to be
transshipped to and from canalers.
With the opening of
the new Sea¬
way, large Great Lakes bulk car¬
riers and a much larger percent¬
age of the world's shipping fleet
are now able to sail directly from
the
to the headt of industrial
sea
North America.
In
this
events
leading
Agitations for and against what
now the
St. Lawrence Seaway
the
continued intermittently since
physi¬
Lakes
transportation system are briefly
reviewed. Following this, an at¬
tempt is made to evaluate the ef¬
Seaway on Cana¬
da's mineral industry. Because
the
Seaway has been in operation for
only one season, this paper must
interim re¬
the importance
million
period of 50
This
Canada
as
coal,
petroleum, non-ferrous ores,
and steel will be mentioned.
iron
authorizing
concluded,
Sea¬
to
while
the
with
Much has been written
the
on
revised
government
States
the
Traffic
could
mpetus
for
more
than
avoid
the
the
canals '
8
feet of
rapids
on
construction
was
of
to
provide an
conomic trading link from what
"°w
thr
e
southern Ontario to Mont-
and
overseas markets. The
.°* economic absorption by
United States to the south also
n^C?uJaged
an
portation link.
„jj^h the
♦
east-west
trans¬
was
'
-
rapid increase in the
® of ships, the 1848 canal
m
kwh
per
mills
per
thermal
power
built
southern
in
tainly
sides
the
recently
plants
Ontario.
authorities
power
of
compared
kwh from
border
on
will
action,
At the time of
capacity' before
tional
thermal
units.
installing
"■!'
•
■
Although
addi¬
generating
power
a
large
to
36.5
favorable
factors,
such
as
paid
be
tolls within 50
of
for
general terms, the volume of indication that the tolls
was expected to rise from
changed at this time.
the 10-12-million-ton level carried
Effects
between 1953 and 1958 to 36.5 mil¬
lion tons in 1959, to
will
be
For companies
1968.
The
role
of
the
new
The
of
to
change greatly. All predictions in¬
dicated a continued, but greatly
Seaway
was
expanded,
specialization
such
commodities
ore
and
expected
not
coal.
The
as
in
Canadian Mineral
the
bulk
grain, iron
change
major
anticipated was an increase in the
success
the
St.
of the power phase
Lawrence
ficial abrasive industries.
wishing to locate
the St. Law¬
rence River valley area is equally
as attractive. Although transpor¬
in Canada, however,
Industry
in 1965 and level off at 50-60 tons
after
on
47 million tons
project
was
tation costs to Great Lake and in¬
land markets would be somewhat
assured from the start because of a
large increasing demand and rela¬
tively low total cost of production.
An increasing demand for hydro¬
electric
upper
power
existed
in
both
New York state and south¬
higher,
coast and
products
overseas
to
costs for
the east
markets would
be lower. In
additioivmore favor¬
able hydroelectric power costs are
available
several
in
locations.
Continued
Ontario. During the 1950's this
ern
transportation
marketable
on
the
This announcement is neither an
Debentures.
offer to sell nor a solicitation
The offer is made
of an offer to buy any of these
only by the Prospectus.
§20,000,000
al¬
Wisconsin Telephone Company
Thirty-Five Year 47A% Debentures
Dated May
to
area
meet
for
Due
1, 1960
Interest
May 1,1995
payable May 1 and November 1 in New York City
utmost impor¬
Price 101.265% and Accrued Interest
recognition of the
the
sys-
was
outmoded by the time it
c0mpleted
Within the next
years> this 9-foot system beW uthe
main bottleneck for
pnm
boats of the day wishing
to
reasons,
defense
Lake Superior
the
iron ore,
the
question of national
Copies of the Prospectus may be obtained in any State from only such of
undersigned as may legally offer these Debentures in compliance
with the securities laws of such State.
the
The demand
GOLDMAN, SACHS & CO.
BLYTH & CO., INC.
KIDDER, PEABODY&CO.
STONE & WEBSTER
MERRILL LYNCH, PIERCE, FENNER & SMITH
Incorporated
Besides
these
DOMINICK & DOMINICK
ROBERT W. BAIRD & CO.
Incorporated
factors, the pro¬
ponents of the Seaway
contended
further indus¬
trialization in the Great Lakes and
SU Lawrence River valley and
improve the general economy of
these regions with the advent of
lower cost
imports and exports
with overseas countries. Although
■
WHITE, WELD & CO.
SECURITIES CORPORATION
W.
HORNBLOWER & WEEKS
lem.
that
MORGAN STANLEY & CO.
entered the picture.
for electrical
power was
critical, not only in
New York state, but also in Can¬
ada's
main
industrial province,
Ontario. The development of the
joint Seaway and power project
would help to alleviate the prob¬
(2)
abun¬
years, as
decision the follow¬
(1) With the
both
operate
dant water supply, Seaway trans¬
In
which the iron
industry was prominent.
and steel
Cer¬
the St. Lawrence power project at
London, -^59,
iUf }' kdwrence River. The chief
mese
from
traffic
increasing de¬
the need for
importing ore into the United
States was a serious matter. The
rence
Seaway." (Methuen & Co. recent developments in the Lab¬
rador-Quebec fields provided the
only large, new source on the con¬
The initial
canal-building pe- tinent and the old, shallow canal
iod on the
St. Lawrence River system limited the tonnage of ore
dates back to the first half of the that
could be delivered cheaply to
nineteenth century. By 1848, a ship Lake Erie ports. Besides economic
water
downward
must
way
Canadian-United
trial groups among
mand
drawing not
mills
7.0
plant. Similarly, further indus¬
through
trial expansion can be expected,
required
especially for such mineral proc¬
States agreement was concluded by law, they argue that the 1959
essing plants as related to the
in
1954,
several agencies made toll rates are insufficient to gen¬
aluminum, ferroalloy and arti¬
estimates of future Seaway traffic. erate enough revenue. There is no
Seaway
Before
most complete account under one
cover is T. L. Hill's "The St. Law¬
157p'p3)6 ^SSGX
4.3
with
for many years.
and
Probably the
at
of Seaway portation, rail transportation and
location
relative
to
provision and mainte¬ operations
preliminary
figures favorable
nance through general taxation.
suggested a total traffic of 20 mil¬ many market areas.'
For
reasons
outlined
above,
Besides the development of the lion tons or 80% of the revised
estimate.
The
1959
traffic
did, Reynolds Metal Company recently
Seaway canals, considerable sums
completed an $88 million alumina
of
money
have
been spent on however, represent a 71% increase
reduction plant at Massena, New
over the 1958 traffic.
dredging
and
improving
other
With the decrease in expected York, and Chromium Mining and
connecting links
on
the
Great
Smelting
Corporation, > Limited,
Lakes
Waterway
beyond
Lake traffic during the first year of op¬
recently
closed
its
Sault Ste.,
Ontario.
eration, there has been increasing
Marie, Ontario, ferroalloy plant in
pressure by anti-Seaway interests
favor
of
its
Beauharnois, Quebec,
Previous Estimates of Future
for increased tolls. Since the Sea¬
nadian-United
though the Canadian government
had supported the Seaway project
limitations
project.
western
produce hydroelectric power
the Seaway has been estimated
waterway
agitated for the Seaway but im¬
portant
groups
in the United
States,
primarily
the railways,
had the effect of delaying United
historical events leading up to the
completion of the joint Seaway
power
4
five
larger numbers. The cost
on
the
through tolls.
:
long-standing Ca¬ 25.0 million tons.
States
For the first
policy
of
year
a
grain and coal producers and port
authorities
on
the Great Lakes
ing points were of
tance:.1
V
7 : -
Historical Background
to
leum products were not expected
rise
significantly,
especially
spent
the
on
.
mineral commodities such
Exports of coal to
years.
years
reverses
After World War
II, several factors appeared which
port. Because of
of the
Seaway to iron ore, this swung the balance of influence to
commodity will be dealt with in the pro-seaway interests, by now
detail, although the effect on other enlarged to include many indus¬
be considered
only an
between
within
in much
early 1920's, until 1954 when a
Canadian-United States agreement
to the construc¬
up
new
Swung the Balance
historical joint Seaway and power project.
Prior to World War II, midwest
tion of the Seaway and the
cal nature
of
the
Great
fects of the
is
was
-
the
paper,
Iron and Steel
to
tons
project not been under¬
taken, costlier steam-generating
plants would have been required
power
demand for
prospects for additional the power to be generated existed
United
States
share
was
$150 pipeline construction to refineries there was also a surplus available
million. The St. Lawrence Seaway and market areas. Significant in¬ which, due to its relative cheap¬
in
non-ferrous
ore
and ness, has attracted new industry to
Act passed in both countries states creases
that the $475 million for the Sea¬ metal traffic were not expected. the area. Besides relatively cheap
way
must be recovered over a During 1958, the 1959 estimate was power, there are several other
way's
could use
a
Canada.
$325
twinned but it
or
1903
of
about
the Welland Canal
feet and
between
R. B. Elver
the
through
old Canadian
thority
system
Thus
million
9
increasing
demand
became
so
critical that had the St. Lawrence
Seaway Development Europe were to account for the
Corporation of the United States major part of this increase. In¬
and the St. Lawrence Seaway Au¬ creases in petroleum and petro¬
Lakes, the St. Lawrence canal sys¬
tem has continued, until 1959, to
be the main bottleneck in the link
Ontario
Lake
20
era
journey past
Montreal
Lakes
Ocean.
general
Lawrence
As in 1848, the new system was
for most of the Great
to
able
$475-million Seaway was financed
by two federal agencies, the St.
outmoded
Nor¬
the only
ships
spectacularly
6
Lake Ontario.
World War II,
were
less
and
Montreal-Atlantic
portion had been dredged
Ocean
to
car¬
since
way
The
the system. The
canal system
riers, primar¬
ily from^
small boats
were
few
a
Great
the Atlantic
was
canalers
as
to
of
over one
Electric Power Commission.
deepened to 14 feet by 1887. Dur¬
ing the next decade the various
locks
and
connecting
channels
opening of
the
from the
go
Introduction
importance
cargo.
During the first five years of
operation, iron ore shipping was
billion dollars was spent to de¬ expected
to average 10 million
velop to Seaway and power proj¬ tons annually. By the end of the
first
ten
ects. The $600-million power
years, the average was
proj¬
ect with a generating
capacity of expected to rise to 20 million tons
and
constitute
about 50% of all
2.2
million
h.p.
was
financed
jointly by the New York Power Seaway traffic. Coal and coke
Authority and the Ontario Hydro- shipments were expected to rise
Between 1954 and 1959
valley.
The St. Lawrence
relative
overall benefits.
Canadian Mineral Industry
River
(2045)
LEE HIGGINSON
CORPORATION
E.
HUTTON &
CO.
PAINE, WEBBER, JACKSON & CURTIS
it would spur
R.
W. PRESSPRICH&
May 11, I960.
L. F. ROTHSCHILD & CO.
CO.
-
■
page
At
28
The
10
Commercial and
Financial Chronicle
.
where managements strive for an
rather profitable busi¬
only gradual growth. Kansas City
ness but competition has increased
Life Insurance Company or Stand¬
strongly in recent years, and in¬
ard Life Insurance Company of
flation has boosted claim settle¬
ment costs. Companies tradition¬ Indiana would be examples of this
once was a
Of Life Insurance Stocks
Stocks
By Hugh M. Ettinger, Specialist in Bank and Insurance
Merrill Lynch, Pierce, Fenner
An
investment
appraisal of
& Smith Inc., New York City
requires a working
stocks
insurance
this is
knowledge of the industry's vocabulary. In explaining why
so,
kinds of insurance and the
Mr. Ettinger outlines the different
third of its volume is
and Republic Na¬
exceptions to this. Certain of the
tional Life Insurance Company of
accident and health companies do
Dallas.
Reinsurance volume has
quite well, concentrating on pre¬
shown
tremendous growth, par¬
their dif¬
lift
other aspects of the
ings and book value. He classifies insurance companies by
ferent types
and characteristics, and delves into the factors that
depress basic earning powej as well as
there are important
course,
(about
a
reinsurance)
carefully writing
ferred risks and
their
f
insurance
trial
of
ferent types
other
companies
these
token,
and
have
differen t
characteris¬
tics.
There¬
fore,
in this
article
we
be
can
practically profitless. By the same
depending on competitive
conditions,
reinsurance
can
be
profitable or not. Accident and
health business shows very widely
within the in¬
dustry,
it
circumstances,
will
many
try to explain a
industry..
;
tied-in with sale of life insurance Insurance
Company, Government
First, there are several different
and so forth.
kinds of insurance written by life
Employees Life Insurance Com¬
Industrial
insurance companies. Some com¬
insurance, both life pany,
United
Service Life In¬
Company,
Philadelphia
panies specialize in just one or and accident and health, usually surance
is
a
rather
Life
Insurance
two of these kinds of insurance,
profitable business.
Company,
Mid¬
some companies write many kinds
western
United
Life
Insurance
However, a lot depends on the
of insurance. The growth poten¬ volume per agent, and the level Company, American Heritage Life
,
whole
policies, the broad kinds of
seems
insurance
Whole
are:
life
ordinary
the
the
from
insurance
desirable
most
point
of
view
type
the
of
Ordinary:• This is stockholder. There are good profits
the type sold usually to individ¬ in
ordinary under current cir¬
uals which builds up cash values cumstances, and economic factors
in the years to maturity.
appear
to
favor
a
field
force
Life
Ordinary Term Insurance: Term
does not usually build
insurance
cash
the
for
values
geared to sell this type of insur¬
ance.
policy
Ordinary
insurance
is
both
"participating" and " nonthe basis of the mortality expect¬ participating."
This means that
the
ancy of the policy holder, depend¬
policy holder is entitled to
ing on his age. It is inexpensive participate in profits or not. Gen¬
covereage for young people, but erally speaking, unless the com¬
becomes more expensive as the pany does business in one or two
policy holder grows older.
states, including New York, "par¬
up
holder. The rate is set entirely on
Group Life Insurance: Straight
life insurance written
on
a
group
basis
is
essentially term insur¬
unless the contract calls for
build up in values for the policy
ance,
a
holders. Since buyers of group in¬
shop around for the
best price, rates often are lower
surance
than
can
individual
insurance
term
rates.
Credit
Insurance: This
Life
term insurance written
son's
life
for
the
on
a
duration
is
per¬
of
a
car
loan.
or
If
the
person
dies
before
paying up his installment con¬
tract, the life insurance company
pays the contract.
a
earnings growth in
the market
is
somewhat
skeptical about their
future growth potential. Mergers
most
are
wont
this
group,
to
Life,
It
not
is
difficult
to
the factors which affect
earning
of
power
business.
The
a
company
has,
attractive it is likely to
a
over-simplification,
which
have
business
actually, be¬
big companies
are
a
substantial
which
do
rather
it
is
well
However, group was
much more profitable than
There
now.
the
characteris¬
which
or
and
health
patterns
would
sive
and,
in
many
seeking to build up
ordinary insurance.
I
include
the
industrial
more
companies
Provident
surance
with- life
vestors- »have
to
are
heavy
which
are
in
group
in¬
attractive
be¬
Life
and
Interstate
surance
Life
and
Accident
Company,
tional Insurance
premium,
usually
week. Also called
once
a
"weekly debit"
cause
for
industrial
certain
of
insurance,
the
or
nation"
large
"combi¬
they are
companies, as
insurance, this type is usually sold called.
Industrial insurance has
in small amounts. The premium is been
slow to grow in recent years,
often as low as $0.50 per week per
because, as people's incomes have
policy.
risen they have
become buyers
Reinsurance: Certain life insur¬
companies do a substantial
business reinsuring the life insur¬
ance
risks
of
other
companies.
What' they do essentially is to
write a term policy
covering the
risk and charge a fraction of the
annual premium as
compensation.
of
ordinary insurance, dispensing
with the inconvenience of
weekly
payments. However, many of the
leading "combination" companies
are
aggressively striving to sell
ordinary
insurance,
not
only
through their existing field force
of
"debit
agents,"
but
in
many
through recently-organized
Ordinary
departments.
By' the
companies write insur¬ same
token, certain companies
ance of the Blue Cross
type and traditionally heavy in
accident
also
insurance-which pays the and health
lines, are moving into
policy-holder a salary, if he loses sale of
ordinary insurance. A & H
Accident
and
cases,-
Health:
Life
surance
in¬
in
Accident
they are building up volume
ordinary insurance. The same
collects
typical
company at least
first year's premium
put new business
the books
on
of the first year's premium in the
of commissions and allow¬
form
Then,
bookkeeping
there
ances.
and
which which
are
printing
other
costs
out of the first
come
year?s premium also. These first
year costs constitute a heavy part
of the costs of the policy for its
entire
tized
-life.
They
the
over
will
life
of
be
amor¬
the
policy.
Hence, earnings will build
the
life
is
it
policy. However,
that a policy loses
fact
a
in its
money
up over
the
of
early
the
business.
new
For
years.
the basic
other
the table below
shows what the profits on a whole
life
ordinary
insurance
policy
might look like based on indus¬
life
holder; (3) whether
Estimated Profits on
Ordinary
controlled.
be
There
is
tier of considerations
Profit
this
In¬
1
2
the
4
will
discuss
influences.
the
three
main
-
6
sets
mium
life
company
rate
on
a
the
in¬
pre¬
insurance
policy, it makes assumptions about
three things: (1) the level of in¬
return
income
available
investments
on
over
the
life
policy; (2) the life expect¬
ancy
of the policy holder; and
(3) expenses likely to be incurred
the
life
of the policy. Once
set, it stays fixed for
the life of
the policy
(we are
talking about an ordinary whole
life policy).
over
rate
is
Therefore, it is
in
a
period
___
8
9
___
10
to see that
of long-term decline
rates,
such as
the
easy
(heavy
A
veston,
&
U.
Company
H),
In¬
Beneficial
Company
American
Na¬
Company of Gal¬
S.
Life
Insurance
(heavy
group), Com¬
Life Insurance Com¬
Businessmen's
Assurance
monwealth
pany,
,
Company
As
(heavy
1947
in a period such as
1960, when interest rates
to
$6.10
12
6.30
13
6.50
2.20
14
6.30
2.15
15
6.40
5.20
16
7.00
5.30
17
7.50
5.60
18
8.00
5.80
19
8.60
5.90
20
8.80
be
can
seen
the
continuous
source.
As
although
for
many
industry
benefit
to
the
years,
has derived
from
that
inflation has
increase
in
source,
caused
a
operating
the
above
for this policy to break into
the
black.
Thus, if a company
writing a lot of these poli¬
cies, there would be quite a drain
on
earnings because of the first
were
losses.
year
,
^
-
Actually, the above table is not
realistic
lize
because
that
of
a,
should
we
given
rea¬
of
number
these policies written in any year
quite a few will lapse before the
twenty
years
receives
his
are
up.
agent
The
commission
the
as
premium is
paid. Therefore, if a
lapses in the second year
policy
of its
existence, the
company
can
lose money on it.
If we take all the business of
the above
type which a company
might
profit
and
write
and
apportion the
policies, in force
all
over
lapsed
then
over
have
we
on
do
much
accurate)
op
this,
of
It
a
is
Tables
different
ratio
of
picture
the business. Below
company
•
and
have
in Table II.
from
II
based
experi¬
roughly,
very
clear
I
period,
20 year
a
a
what might be typical
ence
*
third
from
that it would take until the fourth
been
favorable
In Force
2.40
we
so
Insurance
v.:
Year
2.45 V.
rise strongly, life insurance earn¬
ings benefit. Mortality trends have
and
per
$1,000
11
(and more
the profits
continual
group).
be seen, there
companies in the third
^Conversely,
/
d deficit
It
fixed-
of the
the
___
7
year
surance
terest
___
5
rate of lapse of policies, and capi¬
tal strength (as it can affect pershare earnings growth), but first
we
___
-
Profit
d$6.50
—
3
Assuming
-
,
In Force
—
Whole Life
a
Lapses
Insurance
Year
can
as
rough
a
per
$1,000
second
a
such
Policy
No
insurance
expenses
is
TABLE I
investments;
of the policy
span
This
averages.
calculation:
us
fixed-income
the
(2)
•
example,
.
traditionally
whv
The company pays the agent
any¬
where from 50% to 100% or more
discuss the basic
power of a life insurance
company. It is affected by three
main influences: (1) interest rates
available on bonds, mortgages and
let
First,
earning
Company
true
ance
entire
,
Company,
in
and
aggres¬
group. Examples are National Life
and Accident Insurance
is
Insurance: This
around
in¬
are
of
agent comes
Life
are
Some of these companies
is the type of insurance where the
(
insurance
the
life insurance
a
When management of a life
Standard Life Insurance
the
is the fact that it costs the
life
recognize
(heavy A & H in interest
and group) Life and
Casualty In¬ period from the 1920's to 1947,
surance
Company of Tennessee, life
insurance
companies,
earnings
suffer.
profitwise.
once
group
of
striving to break out of his¬
busi¬
less cases,
sales
be from
an
of
accident
or
the
profit point of view. This is
there
ance
torical
term and group
more
ness
examples
companies which
are
some
Monumental
heavily in other lines such as
insurance, credit life insur¬
are
....
expenses
then
strong year-to-year
jumps in life insurance earnings
especially in years when volume
rises strongly.
The difficulty most in¬
company.
"
both groups,
surance.
ordinary
Life Insurance Com¬
v
Then there
of
within
managements seek
profits by consolidat¬
type.
with
non-participating
place
of
Virginia,
Gulf Life are
pany
this
take
as
expenses.
group
-
to
beef-up
ing
but
cases,
participating
variety.
if
other
things
are
equal, I would prefer a company
non
However,
in¬
vigorously
the com¬
"cheap" on
worth-while
tics
stockholder
industrial
not
statistical basis. These have had
combine
the
to
in
(2)
expanding sales, are
panies which appear
as
surance
Industrial
and
as
cause
purchase contract on
appliance or on a cash
heavily
surance
profitable
an
installment
(1)
are
ticipating" ordinary is probably
the
if
see
earnings
details of different types of insur¬
ance
we
try
Life Insurance Company Earnings
stocks is understanding just what
prospects of a of operating expenses. Also, in¬ Insurance
Company,
Maryland
are
looking at when they
life insurance company relate to dustrial business has not been Life
Insurance
Company
are they
study any one particular-year's
the kinds of insurance which it growing very rapidly.
examples of this type.
earnings of a company.
writes. Without getting into the
Surveying the overall picture,
Conversely,
companies
which
and
tial
don't
and
controlled,
pany.
y
experience,
profit
on
been
It becomes clear, therefore, that
These companies can be
if a company is writing a
heavy
Therefore, the companies which expected to share fully the pros¬
volume of new business, then its
combine (1)
heavy emphasis on pects for their industry, although
normal
earnings
level
will
be
in volume, varies from
sale of ordinary insurance with growth
pulled down and distorted by the
(2)
aggressive management are company to company.
of the losses incurred on
It should be realized that the drain
the "glamour" companies in the
Industry
life insurance industry is domi¬
de¬ life
insurance
field.
Large
or
factors,
such
as small, they usually sell high in nated by mutual companies. The
Hugh M. Ettinger
six largest companies in the in¬
the type of business written, man¬ relation
toy earnings
and
book
bit about the: agement experience in the busi¬ value.
Franklin
Life
Insurance dustry and 16 of the 20 largest
ness, whether or not the policy is Company, Jefferson Standard Life companies, are mutual companies.
different
pending
favorable
have
.
ticularly for a relatively small
policies. Also, in the indus¬
company like Republic National.
field, growth can
However,
rate
competition
is
The life insurance industry is not time on the job because of health develop
through
acquisition of
heavy, and thus far profit margins
smaller companies, consolidating
too well understood by the aver¬ reasons.
have been on the thin side.
expenses and building profits by
age investor because of its unusual
Profitable Type for the Investor
Finally, of course, are the giant
widening
profit margins.
Also,
terminology
and
the fact that
life
insurance
companies which
It is not easy to say which type certain of
the giant companies
earnings
and
write
all types of insurance. These
of
insurance is most
profitable. will write group life insurance
book value reAetna
Life
Insurance
For example, individual term in¬ and accident and health insurance include
quire some
Company,
Travelers
Insurance
surance usually returns a respect¬
at very thin profit margins. How¬
adjustment to
Company,
Connecticut
General
able profk. However, term written
reflect
their
ever,
excluding these considera¬
Life Insurance Company, Lincoln
on a group basis can carry a very
correct values.
tions,
the
above
conclusions
National Life Insurance Company
thin margin. Under certain cir¬
Furthermore,
appear generally valid.
(also under reinsurance category),
cumstances, credit life insurance
there are dif¬
and Continental Assurance Com¬
Glamour Companies of the
can
have a fat profit but under
profitability of insurance.
^
been
ally in the field are in many cases type. Generally, these stocks are
The
answer
to
this
question
valued
by
the
seeking to diversify.
■■--;W conservatively
takes us into a discussion of
the
market.
It might be said, therefore, that
earnings statement of a life insur¬
Also, there are a few companies
life
insurance
companies write
ance company, and the
way sales
which specialize in reinsurance.
many kinds of insurance but that
expenses are allocated.
profit potential appears greatest Examples of better-known rein-;
An important influence
which
companies are Lincoln
in ordinary insurance under curr surance
National Life Insurance Company depresses life insurance earnings
rent conditions.
Of
adjustments that have to be made to reflect correct values of earn¬
and
Thursday, May 12, 1960
. .
(2046)
that
-comparing
lapse
the
important ef¬
on the
profitability of a life
insurance company. In fact, some
can
an
fect
the life insurance in¬
dustry has done very well in con¬
trolling
expenses
on a unit basis.
people contend that the rate of
companies
The
in the second
business
is
group belong in this
susceptible
to lapse, is as important as the trend
class also, such
mechanization
as
(in
the
Monumental
bookkeep¬ in interest rates in determining
Life or Gulf Life. The
number of ing and billing end) to a high de¬ life insurance profitability.
can
Perhaps,
some
companies
in
of
the
are many
expenses,
category.
the
third
group
partly reflects the fact that the
life insurance business in
certain
parts of the country grew
up on
industrial
insurance ' and '
the
gree
this
and
expenses
man
basis
down.
per
are
and
has helped control
policy. Also, sales¬
paid
this
on
a
commission
keeps
overhead
Adjustment to Earnings
A number of
were
talking
drain
on
heavy emphasis on ordinary is a ;
insurance
;The investor might logically ask
relatively recent development. at this point; if
the.trend.in in¬ ing heavy
Then,
there * are ^ companies terest .rates has been
Since this
favorable
heavily
in
ordinary
insurance and if the trend in
mortality has
,
the
paragraphs ago we
about the
earnings of
heavy
a
life
if it is writ-*
new ordinary business.
drain distorts and de-
company
(Continued
on page
22
Number 5950
191
Volume
.
.
The Commercial and Financial Chronicle
.
The
Consumer Credit as an
Economic Stabilizer
.
Wonderlic,* President, General Finance Corporation
E. F.
Uy
Evanston, Illinois
buying and, under certain conditions, is price
Sales finance companies are found unable to contribute
to price inflation or have an appreciable impact upon over-all eco¬
nomic stability. Concern is expressed about the quality of credit and
the repossession-rate of cars because of the competitive inroads of
factory financed credit subsidiaries. Neither of these credit problems
is believed conducive to government regulation on down payments
or maturities as they are said to have only a temporary effect and
deal with but a small per cent of the total. Aggregates analyzed show
that a small part of consumer credit is used for consumer services
stimulates consumer
on
contract
will
three-tenths
of
and
a
have
the
mileage of his
using
36
used
consumer
during the
time
he is paying for it.
At the
completion of his payment period,
he has built up an equity of seven
years and 70,000 miles of addi-
Where does consumer credit fit in
this inflationary spiral?
Le.t us examine automobile
credit in relation to the number3,
the form of the 58 million passenger cars in current
an
total financial savings.
average
operation with
debt of only $251 per
changing
versus
to
in
outstandings has been
steadily in the post-
attention has been given
fact that consumer credit
the
of
terms
increasing
and use only the single measuring
stick that consumer credit outstanding in dollars is rising! They
also ignore such factors as the
constantly rising population and
the the higher price levels which have
basis
for a
a f
persistent campaign
to raised the dollar figure for all
Ddblo ivi
0
"control" consumer credit because other economic factors such as
of the undocumented and appar- gross
national product, w a g e
ently
obvious
conclusion that levels, government spending,
consumer credit isTmajor factor taxes of all kinds
etc. There is
in causing "inflation/*
The con- no particular point in mentioning
sumer credit
industry has done these adjustment factors so long
a poor job of combatting this apas so many people
to be
proach We have apparently ac- memorized by; the rising
cepted the assumptions and have of consumer credit outstandings
offered a rather apologetic de- and so long as our industry acfense that consumer credit is a cepts this one measuring stick as
good thing because
"it makes a figure to be defended.
possible mass purchasing which
What do these figures on conties
in
with
mass
production sumer credit outstandings actually
mar
Deriod. This
single statistical
development has been used as
,.,
•
,
n.
j
t
.
continAe
Adjusts for Rising Non-Credit
crease
to lower prices, etc.,
etc."
advocates. The number of
nanced.
in¬
credit
bBe
of
ure
before^addin? Ixcis/ taxis
th
private
whfrh
* ^nstant'nercenta^ of
fact(frv wholesaPle DriCe This
price
ha/been increPsing
buying
,,
,
,
will
Finance
There
is
Competition
ing
dealer
all
too
chooses
often
,
This decision is influenced by the
not too
subtle relationship with
the
a
factory itself—such things
to the
are
dealer, and when the chips
down, the power of economic,
life
or
death
for
the
private passenger cars which are
not
bought for cash, plus the
franchise.. Finance
related
activity
in
the
$2,829
in
of
1952
total
this
figure
auto credit
by
the
of'
car
was
by providing better service and
by making concessions on border¬
market.
Back
dealer
cancellation
companies,
other credit sources
to offer in improv¬
ing relationships with the factory.
They must offset this disadvantage
finance
used
as
desirable flow of auto inventory
unilateral
to
the
factory finance subsidiary in pref¬
erence
to all other competitors,
some
used
Thig
to the industry.
concern
qual¬
ity which has been brought on by
competition.
A very significant
factor in this competition is the
factory-owned finance company;
Rates, terms, and other factors
being approximately equal, the
,
credit
auto¬
is the deterioration of credit
comparisons. This fig¬
represent the amount of
of
of
aspect
one
mobile credit which is of increas¬
the sale of the trade-ins and other
con-
by Factory-Owned
Company
credit needed to finance all of the
amount
sistently each year. Back in 1950
(the second highest sales year) the
aVerage wholesale price was $1,-
Caused
Harm
car fi¬
relate the
private pas-
we
teresting
automo-
both of
outstanding, and these
are the figures which the control
advocates insist on using.
per
,
ex¬
tended and
d ,.*? * e , totel
t of auto
extendedin¬
m
any ugiven
year,creditget
cfrs
prices is the average whole-
ma?k-nn
the total of automobile credit
we
new
,,
.
,
retail
a
extended
However, if
total number of
ex-
pc
p0inf 0f attack by the control
Buying.
automobile
reliable measurement
represent? Let's take automobile
credit which is the largest single
factor and is generally the favor-
Over-
Has Credit Stimulated
,
,
in
the
cash
of
prevailed in earlier
credit costs and
are
deflationary
factors, but they make up part of
credit buying, and the lack
credit
age
of
part
tended and outstanding is directly
related
to theProbably
higher/the
pricemost
of
Plitnmnbi
Prnhcihlv
+V>«
w>r»e+
automobiles.
level
which leads
substantial
levels which
years.
Higher
insurance rates
of complete statistics on the aver¬
Costs
A
trends
in¬
are
cluded in total credit figures, had
remained at the somewhat lower
of automobiles put into use and
the price level of these automobiles. We have seen that average
wholesale prices have increased
approximately 50% from $1,270
to $1,920. It is difficult to determine the average amount of financing per car because of the
car.
Much
the
before
long
possible effects of "inflationary"
credit. We are told by
the factory people that these
higher prices have been forced on
them by higher wage levels and
higher cost of materials, princi-
only
potential life
car
factory,
the
at
costs, both of which
ance
10 years is based on the cash price
in-
month
mileage will be used up by the
original purchaser or by a second
and third owner of the car. Hence,
the installment buying of an automobile is a savings process as well
as an act of purchasing and spending. The results of this savings
process are clearly measurable as
a
part of our national wealth in
inflationary.
and is much less than
buyer
car
credit
Pally steel which in turn was
tional usage.
It is immaterial higher priced because of higher
whether this additional life and wage levels in the steel industry,
provides detailed rebuttal of the claim that consumer credit
Study
new
stallment
11
(2047)
bank,
and
have nothing
line
ex-
credits.
This
noticeable effect
on
is
the
having a
frequency
270. In the record breaking year tended for every new private pas- of
repossessions and the average
of 1955, this wholesale price had senger car registered. This figure loss per repossession.
increased to $1,572. In the disap- dropped the/: following year to
In our own case, this average
pointing sales year of 1958, the $2,262 and further dropped to loss has increased all out of
pro¬
price had increased to $1,881. The $2,133 in 1954. There has since
portion to the rising price level of
increase continued in 1959 to a been a continuous yearly increase new and used automobiles.
In
level of $1,920. These are all up through 1958 which at $3,079 1950 our average loss per repos¬
domestic prices and not influenced was the first year, to exceed the session was
$121.
This
has
in¬
in* use as measured by the recent popularity of foreign 1952 figure of $2,829. 1959 showed creased to an average repossession
and
the
resulting
theory
that by registrations was at the war- economy cars' I960 will probably a tapering off to $3,003 reflecting loss of
$359 for the year 1959.
consumer credit
(and the impli- time low in 1944 when there were
.
•
nff
jn
average
the, 1^creased sale of both foreign
This deterioration of credit
cation is that this is "easy" credit)
25,466,000 passenger cars in use'. snow a taPe*inS 011.
ave s and domestic economy cars. This ;quality
is not something that can
has
stimulated
of gy 1950 this had increased to 40,- domestic wholesale prices because trend of fewer dollars of automoover-buying
be effectively controlled by gov¬
automobiles and other consumer 185 000. The latest accurate figures of the substantial sales of domestic bile credit extended in relation to
ernment regulations on down pay-;
durable goods and that this over- are' for
1958
when the total economy cars to meet the foreign new cars sold may well continue ments and maturities,
It is re¬
Let
examine the assumptions
us
passenger cars
projection of competition threat
'
into 1960> A2ain> there is very
and scrappage figures
.
.
.. .
taDerin£? off
0f little in these figures to support
etc., etc Translating this theory indicates that there are currently
the easy/assumption that conapparently means that too many m0re than 58 million passenger automobile prices nas oeen cue
j
^
*
.
people are buying too many cars cars on the road. This huge mass tated by consumer preference and sumer credit is tne villain
and that car production has been 0f mobile
transportation repre- not by factory desires or by either sible for all
going up by leaps and bounds year Sents a great economic and social th
avaiiability of credit or the ments.
after year in a huge inflationary asset. These cars
hlso represent
Actually the figures on auto
spiral which will obviously wreck a terrific asset in terms of national iaLK Ui ^CUiL- ■■■_,.
.
,
,;f
+bp na5;f fwo
buying has
stimulated
which
duction
over-pro-
to
leads
reached 56,645,000. A
inflation,
saies figures
^^
responinflationary develop-
the
whole
credit.
thing
recent
largest
figures
in
overstimulation
of
buying.
this
terrific
automobile
/.v
The figures of course, are
different. 1955 still stands
quite
as
the
accomplished by put-
w
Are
national welfare?
the
in
was
the second poorest year
10
years,
and we
cars
1952 to find
158,000).
six
only
have
to
a
4,650,000
back to
(4,-
go
lower
figure
1959
barely topped the
(6,027,000) and
danger at all that 1960
any new record. What has
million
there is
mark
no
Will set
happened
that
with
to the easy
consumer
^ many
assumptions
credit
causing
is
cars to be built and
has°becjmee"«g1t?r"SrtheCpas!
few
yearS w? illLw ththt
know that this
is
not
thQ
purchLppl^fWer-+^U?m^bli»
level
in
aown
payments
w% to
are
»
1958 Wafaitolt,a
and
1959. eAS1tSi
Actual
are
now
in
the
20% range and maturities
standard at 36 months with
occasional
months.
record
to
42
with
the
breakthrough
This
compares
breaking
950 when it
of 1955 and
years
was
an
still prevalent to
have one-third down
payment and
24
months with occasional stretch-
lng to 30 months and
The advocates
credit
^
as an
Jgnore all
36 months,
these
minor
details
habits,
ment
and
stability
of
residence,
This advertisement
credit? If we divide the
amount of auto credit out-
consumer
total
and
The
assistance, provided there is a
healthy
climate
of
competitive
conditions without the elements of
Continued
solicitation of an offer to buy these
offering is made only by
on
securities.
the Prospectus.
NEW ISSUE
$30,000,000
and represents possibly two weeks pay
for the families which own these
cars. This gives a somewhat different picture than talking ahon
15 billion of automobile credit
outstanding. It is the same techas reducing the national
jtebt to per capita figui
tively small amounts for each
of the value of each car
^^n'ewly
General American
Transportation
Corporation
4%% Equipment
due
born babies.
Trust Certificates
May 1, 1980
(Series 58)
lowes^gu reJnce
P«
1954- Back in 1953 the flgure w —
^213
car and the difference is
more than accounted for in the
increased cost of automobiles and
reduced
^be
There
.
'proach
is
another
usage
conservatively
day
DIVIDENDS
credit and
which is
fre-
•
It can be'
stated that present
overlooked.
quently
AND ACCRUED
realistic ap-
to automobile
automobile
OFFERING PRICE 100 Vz%
of the dollar.
value
Copies of the Prospectus may be obtained in any State
several underwriters named in the Prospectus
.
may
lawfully offer these securities in
only from such of the
and others as
such State.
automobiles have a potential
10 years and 100,000 miles
bfe 0f
0f
satisfactory service.
and years
above
(Industry
that both mileage
of use have been stead-
Kuhn, Loeb & Co,
show
figures
the
mileage
10
years
combination.)
presently
and 100,000
May 11, I960
other
these matters without government
or three years
is not an offer to sell or a
as pay¬
employ¬
personal characteristics not sus¬
ceptible to arbitrary control. Our
industry is well able to police
these
heavily "plastered" with debt
made
possible by
uncontrolled
of consumer Hy increasing and are
inflationary influence
of
ing
cars
largest automobile sales year with standing by the number of private
7,170,000 passenger cars.
The passenger cars in use, we get a
second biggest year was 1950 with figure of $251 per car at the end
6,326,000 cars. The recent year of of 1958. This is a small fraction^
1958
extended
paSt V™
would be somewhat
lower if credit charges and msur-
kept.ln mmd ^
that this constantly rising level
the most ting the 58 miHion owners heavily of automobile prices over the past
show
the in debt with reckless disregard of
consumer
Obviously then
years
would
Tt should also be
in defense.
villain
the
is
and
economy,
the
lated to credit factors such
page
32
12
'
Continued from page 4
less
pounds
medium-sized
It
is
also
steel
than
the
that
the
Last
orders
were
placed without lengthening the
delivery time on the new orders.
But
except
for
an
occasional
rush, there is no pressure for de¬
livery in less than four to six
weeks from the automakers*., i'
There
minimum
the
of
hope
for
inventory
further
duction
of
days
cutting
are
now
their
as
number
rates of pro¬
own
lag.
And
steelmakers
f for
orders
are
doing
to discourage rock-bottom
anxious
little
of
week, steelmaking opera¬
2.8 points to 74.8%
skidded
tions
capacity. Production was about
2,132,000 ingot tons. If operations
held at the current level through
June, first half output would
nearly
million
vs.
is
be
last year's (63
64.3 million), but the
high
as
decline
as
continue.
to
sure
The Texas market continues to
any
in
inventories.
companies which had cut
Some
to
little
is
buildup
early
big enough to permit liquida¬
tion at that rate for too long.
cars.
significant
automotive
new
not
♦
be
with foreign steel, the
overrun
magazine reported. While its ton¬
nage figures
are
not yet avail¬
for
able
April, the total may be
almost as high as that in March
when 83,000 tons were imported.
Much of the March-April tonnage
before settlement
was
ordered
last
year's steel
of
strike.
policies.
They
will
In the scrap market, substan¬
make prompt delivery for most
products and are competing for tial mill buying is lacking, with
sales on a delivery basis.
steelmaking
operations
falling.
"Steel's" composite on the bell¬
A
few
mills,
however,
are
wether
grade
of
steelmaking
cautioning against letting inven¬
tories
get too low on products scrap, prime heavy melting, fell
that have a long lead time. They 34 cents a ton to $33.33, the first
inventory
upturn
in
business
could result in shortages of these
warn
any
products.
"The
+
.
Age"
Iron
the
of
In
on
of
in
customer,
is
be
to
take
pessimistic. Executives
long-term view while
the
in
salesmen
direct
the customers
with
contact
extremely
pes¬
simistic about the outlook for
new
are
Products which had been
con¬
the strongest have shown
sudden signs of weakening.
vanized
has
Gal¬
in
weakened
while
Midwest
tories
tinplate
the
is
indication
little
of
a
in
already-depressed
while the indications
pickup
products,
sheets
that
will
inevitably
off.
Mills
ranging
far from
their
own
geographic area for
orders, absorbing freight to dis¬
tant places to get orders.
are
,
Odds Still Favor
a
Odds
still
favor
this
output
record
a
steel
"Steel"
the
weekly,
said
on
it's
record
not be
may
booming,
good enough to warrant
production of 118 million
ingot tons this
million
"Steel"
The record:
year.
in
tons
expects steelmakers to
million tons in the
produce
62
half
million
56
and
in
the
,
annual
leaders
meetings,
attributed
industry
the
sales
are
quarter levels.
sumer
inventory
first
the
boosted
million
of
the
their
tons
observers
to
policies.
On
73.8% of Capacity
American
The
Institute
Iron
that
announced
the
op¬
erating rate of the steel companies
will average *130.9% of steel ca¬
users
have
from
13.5
18
had
million.
counted
buildup to 22 million
million
Most
on
or
a
even
24
tons.
Though the ingot rate tumbled
20 points in the last ten
weeks, steel production is ahead
1959's
record
first
half
pace.
1947-49).
compare
*133%
week
ginning
May
to
of the
75%
Jan.
1,
the
1960 was equal
utilization of the
annual
of
capacity
net
tons. Estimated
for this week's fore¬
based
that
on
capacity
is
A month ago
(based
on
the operating rate
1947-49 weekly produc¬
*138.5% and production
was
2,225,000 tons. A
tual
at
2,631,000
the
year ago
weekly production
tons,
or
was
ac¬
placed
*163.8%.
♦Index of production is based
age
weekly
production
The auto
duce
about!
month
said
to
period
look
last
for
69%
of
capacity
in
June. :
The
lower,
it.
be
to
ingot
but
the
Reason:
about
rate
6.8
could
go
even
odds
May
are
against
shipments will
million
tons—equal
slightly less than consump¬
tion. A drop to an
average of 69%
in
June
would
put
or;
industry's plan to
613,000
revenue freight for
ended April 30, 1960,
This was a decrease of
in
1958.
and
from
the
prices,-"reflecting
the
week
(which
an
ended
April .23,
included
in
were
over-all
total).
1960
This
was
corresponding week of
and
5,793
cars
127.2%
or
loadings
for
the
first
estimated
for week ended
5%
cars,
totaled
of
There
1958.
for
165,943
48,940
highest volume
ended
at
was
a
1960
since
when
9
low
of
cars.
were
May 6
production
no
revisions
schedules
in
were
apparent, v
The
cars
52
or
of
135,515 units
in week ended April 30 was the
result
both
of
of
two
which
Two Falcon
separate
strikes,
have been
plants and
settled.
a
Comet
assembly line were back in full
production after being idled most
of
last
,week.
by, strike-caused
parts shortages. In Detroit, Cadil¬
the
from
the
to
a
finished
prices
week
Prices
earlier.
<
,
this
in
size
1959.
Liabilities
ex¬
ceeded $100,000 for 28 of the fail¬
ing concerns as against 38 in the
preceding week.*
Construction failures climbed to
from
69
46
toll
the
week
a
among
-
earlier, while
manufacturers
edged to 56 from 51.
In trade and
service groups, on the other hand
declines
prevailed
during
the
Retail casualties fell to 144
week.
from
159, wholesaling to 31 from
40, and commercial service to 27
from 29.
Despite these week-toweek dips, all lines suffered heav¬
ier mortality than a year ago. The
most noticeable
levels
upturns from the
occurred
in construc¬
tion and service businesses.
1959
Consumer Buying Slips From
Prior Week
<•
Despite
Mother's
and
tions,
and
Day
sales
buying
consumer
the
from
.
post-Easter
numerous
promo¬
slipped
prior week, due to cold
rainy weather in
some areas.
over-all
retail
moderately from
trade
However,
was
up
a
year
Best-sellers were apparel,
linens, furniture, and some ap¬
pliances. Scattered reports indi¬
ago.
of
cate
that
cars
were
sustained at high levels
and
were
up
sales
year ago.
The total
new
passenger
appreciably from
dollar volume
of
a
re¬
tail trade in the week ended May
4 was 4 to 8% higher than a year
according to spot estimates
by Dun & Bradstreet,
Regional
estimates
varied
from the comparable 1959 levels
Inc.
the
following
percentages:
-f-10 to +14; East
+6 to +10; Moun¬
tain +3 to +7; West North Cen¬
by
Middle Atlantic
North Central
tral and South Atlantic +2 to
+6;
England, East South Central,
New
South
Central,
and
Pacific
an
class I U.
S.
Wholesale
of
Price
Food
Index
Up
slight
a
this
rise
%
potatoes, and steers. On the down
side
of gross stocks.
wheat,
were
hams,
corn,
sugar, eggs and hogs.
The
Dun
&
Bradstreet,
Inc.,
ately
ago,
year
suits,
shirts.
dren's
ap¬
espe¬
and
slacks,
Purchases
chil¬
of
clothing were up moder¬
the similar 1959 week.
over
Over-all
sales
household
of
goods showed slight year-to-year
gains.
Furniture stores reported
wholesale
rep¬
food
price
index
production at the cur¬ resents the sum total of the price
rate, and gross stocks were per pound of 31 raw food stuffs
equivalent to 52 days' production. and meat in general use. It is not
For the
a
year-to-date, shipments
reporting identical mills were
production;
new
cost-of-living
function
is
to
index.
show
Its
the
chief
general
trend of food prices at the whole¬
sale level.
or¬
7.1% below production.
with
the
previous
ended April 23, 1960, pro¬
were
Compared
Business Failures Rise to 327 in
of
reporting mills was
0.6% below; shipments were 4.3%
orders
were
0.2%
Compared with the cor¬
responding week in 1959, produc¬
of
reporting mills was 2.1%
below; shipment were 8.7% be¬
low; and new orders were 16.7%
below.
Week Ended May 5
Commercial and industrial fail¬
;
ures
edged
ended
up
May
in Latest Week..
to 327 in the week
from 325 in the
preceding week, reported Dun &
Bradstreet, Inc.
Casualties were
considerably higher than
a
ago when 265
in 1958
yvhen there
Wholesale Commodity Price
Index Up Fractionally
5
more
occurred,
279.
were
businesses
failed
or
year
Also, 16%
than
the
prewar toll of 281 in the comparaable week of 1939.
-
Casualties
with
liabilities
dip
in
stepped up their
air
conditioners,
laundry
equipment,
and
lamps
during the week, and appreciable
increases
last year
over
Traditional
prevailed.
White Sales"
attracted considerable interest,
and
"May
volume
in
linens
up
was
sharply from a week earlier and
slightly higher than a year ago.
There
sales
slight dip in food
prior week, with
canned goods, frozen
was
from
declines
foods,
the
in
dairy products, and fresh
^
+" Volume
in
women's
Summer
high
apparel
was
level
wholesale this week; re¬
at
tailers
were
sustained
at
a
most interested in re¬
plenishing their stocks of sports¬
wear,
beachwear,
dresses.
There,
last-minute
was
fill-in
and cotton
a
rise in
orders
lor
merchandise suitable for Mother's
Day
gifts,
especially
jewelry,
housecoats, and lingerie. Orders
for men's Fall apparel at openings
in
the
mid-West
and
West
matched
those of a year ago and
initial orders for children's backto-school
clothing
were up
what from last year.
ance
and orders at
Price
Shoe
New York
ago
record
Show
of
the
some¬
attend¬
Both
Popular
America
in
City matched the year
levels. '
Nationwide Department Store
Sales Up 8% for
of
$5,000 or more rose to 294 from
286 in the previous week
and 237
last year.
Shoppers
purchases
of
meat.
days'
tion
Spring
dress
apparel rise
a
sets.
was
the wholesale food price
rent
new
over
There
year
below production. Un¬
orders of reporting mills
above;
cially
coats, and
helped
Promotions
in men's
week in
one
3.4%
week
beachwear,
lagged.
volume
ago
47
index, compiled by Dun & Bradstreet, Inc., but it was down mod¬
erately from a year ago. On May
From 1959 Week
3 it stood at $5.97, up 0.5% from
Lumber shipments of 457 mills the prior week's $5.94,. but 2.6%
reporting to the National Lumber below the $6.13 of the correspond¬
Trade Barometer were 2.1 % ing date a year ago.
above production during the week
Higher in wholesale price this
ended April 30, 1960. In the same week were flour, rye, oats, barley,
week new orders of these mills
lard, butter, cottonseed oil, cocoa,
ders
in
terest
suits
corresponding week
1958.
5.4% "below
accessories,
Spring
dresses, jewelry, and lingerie; in¬
moderate increases in lawn tables,
occasional
chairs, and bedroom
Lumber Shipments Down 8.7
of
in sales of women's sportswear,
up
fashion
preciably
,
the New York Cotton
on
41.8%
below.
low-level
""
,
Slightly From Preceding Week
with
and 40 in the
duction
of
As
plant
April
from
in
steers
prior week
fractionally
lower.
Lamb
prices
were
linchanged as trading remained close
systems originating this
type traffic in the current week
turnout
May 7 at 142,874
and
railroad
amounted to 35%
than last week and
more
production
the
slackened
weeks
16
Interest
week.
Exchange moved within a narrow
range and finished the week close
above
the
corresponding period to the prior period. Prices were
of 1959, and 92,992 cars or 127.5% sustained by price fixing and short
above the corresponding period in covering.
1960
increase
19
"Ward's
*
'
.
volving liabilities under $5,000, to
33 from 39 a week ago but
they
remained slightly above the 28
of
West
somewhat
down
were
that prior
increase of 2,414 cars or 30.4%
1959
filled
highest
weekly total in a month, "Ward's
Automotive Reports" said.
„
slight increase occurred in Coast 0 to +4.
There were 10,346 cars reported hog prices at the end of "the week,
Although Mother's Day shop¬
despite
little change in transac¬
loaded with one or more revenue
ping was slow in getting started,
tions;
hog
supplies
in
Chicago
year-to-year gains were chalked
highway trailers (piggyback) in
pas¬
second
Al¬
slight
a
,
•A
climbed
the
period.
preceding
*
collected
Sugar trading lagged during the
week and prices were unchanged
preceding week.
For reporting softwood mills, un¬
filled orders were equivalent to
to
i
ago,
markets were limited.
some
-
shipments lac Division of
General Motors
There was a fractional rise in
nearly 1 million tons below con¬
also went back into action after
the general
a
sumption, meaning that users will
commodity price level
the
latest
dip into inventories. Stocks are shortage of bodies resulting from in
week,
reflecting
a strike at the Fisher
Body Fleet¬ higher prices
on
some
grains,
Negotiations were pending
of rice to India
Venezuela.
Rice
stocks
in
for sizable sales
Loadings in the week of April
rise in volume.
30 were 17,897 cars or 2.9% above
pro¬
in
cars
the
week.
May got off to a
running start this week as output
steel-
operations
to
average
73.5%
of
capacity
this
and
aver¬
and prices
preceding
up
of
those
f
32,923 cars or 4.9% below the
though volume picked up at the
corresponding week in 1959 but
end of the week, coffee prices re¬
an
increase
of
110,066
cars
or
mained close to a week earlier.
20.6%
above
the
corresponding
There was a fractional increase in
were
near-record
a
senger
133,460
"Steel"
on
1947-49.
Expected in May
week
making
for
Near-Record Car Output
second
corresponding
4.9%
Loading of
week
ing of rice picked
matched
Below Same 1959 Week
compared
73.8%.
the
the
Ended Apr. 30 Decreased
of
for last week be¬
2,
1960
148,570,970
cast
in
2,137,000 tons
beginning May 2.
the
in
Freight Car Loadings for Week
with the actual levels of above the 1958 week. Cumulative
and
Output
year).
.
above the
weekly produc¬
These figures
on average
of
lion
through April: 44.6 mil¬
ingot tons (vs. 41.8 million
energy
slightly lower than a week earlier.
distributed by the electric light
Prices on
soybeans were steady
and power industry for the week
and transactions were close to the
ended Saturday, May 7, was es¬
preceding period.
t
timated at 13,139,000,000 kwh., ac¬
While domestic buying of flour
cording to the Edison Electric
was sluggish during the week, ex¬
Institute. Output was 161,000,000
port purchases moved up some¬
kwh. below that of the previous
what, with moderate sales made to
week's total of 13,300,000,000 kwh.
Indonesia,
Latin
America,
and
but showed a gain of 480,000,000
Japan; flour prices were up frac¬
kwh., or 3.8% above that of the
tionally from a week earlier.
comparable 1959 week.
Both domestic and export buy¬
(based
tion
almost
of
electric
of
amount
week's
con¬
year,
The
for the week, beginning
May 9,
equivalent to 2,102,000
tons of ingot and steel castings
pacity
Thursday, May 12, 1960
•
f
the
Steel
and
.
„
cocoa
Since
stocks
.
week
This Week's Steel Output Based
current
weakness in steel demand to
on
excellent growing conditions;
increased wheat stocks were ample for trad¬
19% to 2,585,138 units from 2,ing179,205 in the same period a year
A fractional rise in oats prices
ago.
occurred during the week as trad¬
!
ing expanded somewhat. Volume
Electric Output 3.8% Above
in corn slackened towards the end
:
1959 Week
of the week and prices finished
totaled 643,271 cars, the Associa¬
tion of American Railroads an¬
second.
At
production for the first
tive auto
four months of this year
the
metalworking
well to first
where
holding
the corresponding date a year
on
cutbacks, most plants operated on prices finished
slightly higherL
a five-day basis, and a few were Wheat prices remained close to a
down to three and four days.
'
week earlier^ reflecting sluggish
"Ward's
noted
that
cumula¬ trade which resulted from reports
an
closer split
a
previously
tion)
1955.
of Imperial at
Detroit, Chevrolet at Kansas City ago.
1
i
(still idled by a strike) and Ford
Despite limited activity in rye
at Norflok, Va., which were closed flour sales, over-all trading in rye
the
entire
week
by production moved up during the week and
between
optimisim and uncertainty about nounced.
the second quarter in this area
There is
percentage
Business
first
don't see much of
until later this year.
they
year,
metalworking
auto steers, and steel scrap. The Daily
plants planning to work Saturday, Wholesale Commodity Price
May 7, were Ford Motor Co.'s Index, compiled by Dun & BradFalcon
and
Comet
facilities, street, Inc., stood at 275.15 (1930Chevrolet
at
Flint, Mich., and 32 = 100) on May 9 compared with
American Motors at Kenosha, Wis. 274.82 a week earlier, and 275.89
The
nation.
the
Actual output
May 9.
117
but
upturn
Record Steel
Output This Year
but
of
pulse
ness
on
busi¬
the
check
to
are
There
fall
safari
plete halt to production last
"Ward's"
said
the
only
With the exception
.
.
»
■
plant forced an almost com¬ flour, lard, hogs, hides, and rub¬
woek. ber. These gains offset declines in
wood
other two are not too pessimistic,
inven¬
piling up at the mills
as releases are coming
in slower
than expected.
are
"Steel" editors last week
air
an
states
Lakes
Great
lower
as
eight out
executives
metalworking
ten
the
not
but
good
expected,"
we
than in the Eastern states checked
business.
sidered
as
told
market:
steel
reporting market informa¬
the closer the source is to
the more likely he
tion,
the
these
the state
makes
additional comments
is
"Business
high
weeks.
in five
decline
.
'
.
STATE OF TRADE AND INDUSTRY
800
Commercial and Financial Chronicle
The
(2048)
•
<
■
April 30 Week
Department
store
sales
on
a
However, there was a country-wide basis as taken from
small failures, those in¬ the Federal Reserve Board's in-"
Number 5950
Volume 191
.
.
The Commercial and Financial Chronicle
.
(2049)
u-'i'ixi •>* f -r
the week ended April 30,
I960,
increased 8%-above♦ the
like period last year.,In the preceding week, for April 23 an increase of 4% was reported. For
the four weeks ended April 30 a
12% increase was registered over
the same period in 1959 while the
dex for
"
fk'
department
System
for the
\T D
.
6%
a
increase
'
announced.He
in
the
<
of the
public rela¬
v.
Eight improvements in our regulatory practices are urged by N. Y.
Chamber of Commerce.
Stress is placed on better selection and
fixing of
responsibility of personnel instead of 'judicializing'
missions.
Recognition of competition's effectiveness, realistic costs
information
prompt
more
for
investors
reappraisal
basic
A
'
,
:
-
concepts
of
.
utilities, and of the organization and procedures of regulatory
cept.
agencies, was called
for in a
12,500-word report concluding a
two-year study by two committees of the New York Chamber
of
of
Because depreciation allow-
ances
computed
are
the basis
on
original
cost
dollars,
the
amounts being set aside will not
provide adequate capital to re-
with
Y
Hanseatic
tenant
U
He
was
Army
S
a
U.
S.
Har-
1st Lieu-
Signal Corns
in the Korean War and
tenant,
a
Marine
1st Lieu-
Corns
in
World War II
theft
D. G. Mandel With
on
tor's dollar," the committees said.
service and on industry,
trade, and transportation recom-
More aggressive action by
regulators "to correct such condi-
£1.
tions
^.^^ADl^PHIA, Pa. —H. A.
committees
Chamber's
the
public
far-reaching
mended
(5)
modifica-
eight areas of regulatory practice. They also expressed
regret over recent
apparent
lapses" in conduct by regulatory
officials, but suggested that "the
tions
in
for
cure
indiscretions"
such
better
drastic
legislation
which
between
the
.
would
the regulated."
Such
contact,
regulators
went
on,
derstanding by each of the problems of the other, to the avoidance
of unnecessary delays, and
thus to the public interest in wise
and effective regulation."
v
The
committees
concept
"The
stated:
of
' system
our
whereby public service industries
subject to regulatory control
are
is
of
a
sound
the
one.
Nevertheless, much
regulatory philosophy now
being applied evolved in
an
markedly different
from that which exists
today, or
can be
in the future.
jalled *or
ine
mittees include:
(1) Rate-making and other decisions based on
long-run considerations
noted
rather
than
"the
on
B
qu^lified
phan?es?"
s
l1?? sai?*
g^in'
,
thvrfamr
nonary
or
lndustr1ies
optional
1
on
°!. dlscre"
spending.
as
monopoly prod-
a
promote
Mr. Mandel, formerly associated
the Philadelphia office of
with
years,"
tained.
ence
UlXOn Uo. to Admit
own
is
thirsty
van
^fraff
Joins lviorgan oiarr
% (Special to the financial chronicle)
Miller
joined
has
the
staff
Street,
of
Co., 634 South Spring
members of the Pacific
They
"the
same
deplored
of
but
also
of
"the
concept' that
affirmative role in
an
performance
a
grade of business
that
r4)0CRtty'i
(4) Recognition
•+•
More care in the selection
(8)
This advertisement is neither
Not
,
7
a
more
staff people,
able
is
beneficial
t
*
to
f
of "the impact
changes in the price
regulated industries.
of
heading
some amorphous
Commission."
£ Fournier,
Dulles
group
If the Russians
it being
held and showed up but
theyhad
saidbrought
they had,
was not permitted to enter the
the
tale. Instead, the pilot
parachuted safely to the ground
still in possession of his equipLaxv..
ment
bad
been
his
istol
and
the
Russians
The
taken.
have
displaying those films
Tn_tpaH
nf
thp
Rll„ian<?
bavin?
^teaa on-ire nussians naving
heights ^ thev clahn ofSls
here beiieVe that it
was
a
case
ordinal
thAnilnt^bavins
of
eneine
.
United
States
He took the incident in
stride, however, explaining that
he felt he would be advised of
what went on in due time,
That the pilot made no effort
to destroy his film comes in for
considerable discussion, also the
fact that he made no attempt to
room.
^
^
his suicide kit. In the highly
spedalized business of spying,
some strange things happen. The
Pilot wae
civilian, presumably
working for the CIA. • 7-x >1
use
Jhe CIA is this c™ntry's firSj
attf^pt J? g?^ in fo.r organized
and woridw^e spying. It is a
Every military installation in the
United States is widely known,
There is no secret about it at all.
hush hush agency. Its ap-
propriation requests are not itemfze(f; It is just given a lump sum
its
and
mission
is
to
States. It's
our
operations
caught we
when
we
get
not throw up
hands in holy horror and exclaim it can't be true. The Rusare past masters in the art
our
sians
quite inex-
Branch
They had to mAC„TAT^rpr.t!'T
+
WASHINGTON, D. C.—Ihe first
^
live in the installation for three
days. The purpose was to see how
umrV
an
tnapfhm-
Republic Corporation has opened
a
branch office at 2941 Brandv-
offer to sell nor the solicitation of an offer to buy
offering is made only by the Prospectus.
any
of these securities.
New Issue
May 12, 1960
200,000 Shares
.- >
Premier Industrial
the
Corporation
Common Stock
($1 Par Value)
agencies
mittee
thing called the-
Share
.'Despite the overwhelming evi¬
economists,, that
it
is
Vice President 0
on
industry,
transportation,
of
trade
Lester A.
the
-
Buffalo
Brake
*
Co., Chairman.
A. G/ Becker & Co,
It will be sent to members of all
Federal
regulatory
members of Congress, and to state
prevailing prior to
regulatory bodies throughout the
nation.-"
i K
^
,
immediately
War■•:IIy"many
-regu-~
Incorporated
"
a
*
w
1
v t
-
'
,
•
agencies*
sunbstanHa\hfeturnrtoTriUb1evels
or
Copies of the Prospectus may be obtained in any state from such of the several Underwriters,
including the undersigned, as may lawfully offer the securities in such state.
and
Crone,
Smith, Barney & Co.
•
■
'
„
Incorporated
the
first time in such
and
should
Last week about 1500 government of spying and we are
employees went off to a cave in perienced at it so far.
the mountains about 100 miles
from Washington to go through a
First Republic
Civil Defense drill
roam
world, and conduct its operations
in the best interests of the United
the Panhandle Western Pipe Line
Co., Chairman, and by the corn-
President
World-
prominent
with <<one boss rather than with
Beam
after
Monday in Paris. /
Some
Senators in
down the way
committees held. They urged con- -
sideration
Summit
begin next
The
improvement of caliber of commission members would not only
bel
avert cases of misconduct,
but would also help attract and
of permanent
of
celebrated
.
0£ members of regulatory bodies.
level"
dence
the
Conference which is to
itee on public service Lesl
contributing to
on
before
the fact
organize and present a case
against a utility's request will also
Commission in its decision and assist in writing the
r
Profit plays
war
games
which
the
military has and they may be
right.
The feeling on Capitol Hill is
that we were perfectly justified
in sending the plane over Russia,
Some Senators and Congressmen
are
questioning the timing, just
staff group which
may
it
the
various
judgments," the committees
declared.
that
than
,
xx~
x
replied
ridiculous
more
went before
a
on
Capitol Hill, vited to the Herter-Dulles brief8
P
7
20
ing. Senator Capehart, of Indiana,
® group, was held to about
men>
^ was said t*13* a* that aired his displeasure on the Senme<rtinS Herter and Dulles ex- ate floor. He is a member of the
Pla*nec* that we were in a grim Senate Foreign Relations Cornga™e and that *his was not the mittee and Je.els that he should
tim? we
ad flown over kn.ow something about what is
Russia. There was some doubt as going on. Another member of the
to how the plane was brought committee, Senator Lausche, of
™
hlm to the wolves.
quarters at the firm's New York
office, 20 Broad Street.
I'M
ridiculous, the Civil
was
officials
are also incensed because they were not in-
Price $16.50 per
onfy
for
& Company of PhiladelSenator Styles Bridges, of New
phia, members of the New York Hampshire, says there is no doubt
Stock Exchange, will admit John that
the
Russians
have flown
G. Carhart, a member of the Ex- reconnaisance
flights
over
our
change, to partnership May 10th. country. It is hard to see why the
Mr. Carhart will make his head- Russians would go to that trouble,
we urgently neea regulatory ^
that
public
Government by admitting tnat ne
^as ? SPZ
to have thrown
Morgan &
reeulatorv
need
a
no
GovtrnmenfbV aSnTttafhl; blgbiy
\
fri AAmif
LOS ANGELES, Calif.—Doyle D.
nr?pntlv
be
Adminis-
got caught and
full admission
Dixon
main-
in decision-making.
«Wp
since 1946.
ness
Elimination of staff influ-
(7)
Allan
in the investment securities busi-
Cr*
committees
the
The
the
of
we
Reynolds & Co., has been active
>
"In some branches of regulated
industry literally thousands of investors throughout the country today are unable to appraise the
soundness of their investments,
because, due to excessive delays,
they don't even know how much
money their companies made or
lost during the past four or five
ke
iovi
Pacing of utility service
np{?«,rt'and/n0ir,? ™blect to.conihiii ? cantro1/ the committees
nriro n^ai+
S an
?' needs
price
control
i
A. JtvlGCKG UO.
'
to reach decisions with reasonable promptness.
opinion."
pi
is
in
there would not have been enough
of the plane or the pilot left to
their listed department.
(6) Increased effort by regula-
Too often, in their
judgment,
regulators tend to sacrifice long-
rpii.Lt e,cogni.tl0^ ?f the effect
to
«who
tors
advise the
ciimo
Ste
asked;
nppdpd
exigencies of the moment."
ch™fb?nefits Jor xthe sake, of the
advantage to the conotbi/c^ a i°.w?,r+;ate
or
take
of their
scope
the
th
t
better
.-i
—^
regulators
the
IgS»
eco-
nomic climate
which
often
and
"can contribute greatly to the un-
basic
<<Too
tionl are'beyond
it.
tell
refuge in the plea that such situa-
+
they
^
Riecke & Co., Inc., 1433 Walnut
Street, members of the New York
clear cut policies, administrative
Stock Exchange and other leaddifficulty in prompt processing of inS
exchanges,
announce
that
cases, and excessive zeal for pre- Daniel G. Mandel is now associcision of measurement,^™
ated with them as Manager of
unduly
judicialize
commissions
or preclude proper informal
contacts
outmoded
or
TY*
statutes, failure on the part of
legislative
bodies
to
establish
lies
of
selection
officials,
rather than in legislation.
Specifically,
the
committees
warned against "the enactment of
in
restrictive
as
.
that
should
selected
was
'
expropriation of
uous
N
Boston office of Brown Bros
riman & Co.
there
was
-
State H®rt®r and CIA Director committee positions
registered representative in the
a
has
excitement
details._ On Monday, Secretary of
Corp. of Boston and formerly
place property.
report, recently released,
of
Prior to that time, he was
associated
'
.
latory commissions have refused
to modify the original cost con-
underlying government regulation
In the
.
attitude
Richard W. Grimm
several
years,
'• 7-1
.
there
Boston for the
past
espionage
much
tration is
Funds, Inc. of
also
are
of
so
The
Keystone
Custod ian
com¬
recommended.
.
the portfolio
of
Defense
Washington as the shooting down
by the Russians of an American
plane, now admitted to have been
on a spy mission.
management
■
formance
been
has beenasso-
Urges Modifications in Eight Areas
Not since just after World War I
chamber
tions program.
Mr.
Grimm
Study of Regulatory Agencies
for
BARGERON
when
a
Major Yardley wrote a
magazine story and exposed that
we
had been operating a black
charge
need
BY CARLISLE
m
New
York office in
and
...Ahead of the News
will be located
•
A
FROM WASHINGTON
.
Dr-Pw'
1 ">
April 30 showed
store over 1959.
f -
^
^-P
ended April 30 increased VJllIIlIil V .JT
01
17% over the like period last year, p
i
tS
TY
1
In the preceding week ended VjOVt. Dev. lJciYlrL
April 23 sales increased 9% over
the like period last year. For the Richard W.. Grimm has been
four weeks ending April 30 a 16% named Vice-President of the Govincrease was renorted over the ernment Development Bank for
week
"S9 »"1M.
the Federal Re-
to
According
serve
sales in New York City
13
,
Paine, Webber, Jackson & Curtis
The
14
.only three
/
V '•
we forget how lately
our liberty was won, how brief a
time we have really possessed it,
and how rapidly it is being taken
Free Market and Free Press
ago!
Perhaps
days
Department,
By George Koethw,"1 Staff Writer, Public Relations
U. S. Steel Corp., New York City
from
and a free market,
jeopardization of these free institutions. Mr.
and decries the
growing
our
are
new
the
not
Free
name
is concerned with
Market and the Free
of
All
on
speak
free
press.
We
the
than
giant
them¬
presses
selves
the
or
buildings
house
which
the
than
women
who
gather,
lish
George Koether
all of the people and
required—a freedom of
people, and a
ownership and use
of
their
property.
Freedom of
action for reporters implies free¬
dom of information and freedom
those
for
freedom in the
Freedom in the
censorship.
from
use
of
for
men
Yet—as I hope
demonstrate
I
property means freedom
to accumulate capital and
invest it in printing
If the
plants.
is to remain free, these
property rights must be protected.
There can be no free press in a
—
convinced
am
"freedoms"
all
in
dition
the
are
history of
integral,
To
man.
no
free press with¬
free presses.
We can readily
be
can
these
of
rights-of private property
when
we
of
think
press.
.
Defines
-
I
we
am
not
in
them
the freedom
with
nection
importance
the
understand
Free
so
sure,
con¬
the
of
property rights in the free
market, or the importance of the
free
market
in relation
to
the
ket"
do
or
we
we
our
By
press.
not
mean
"mar¬
the stock
exchanges, nor do
the shopping
centers
commodity
mean
By
of retail and wholesale trade.
:
"market"
which
we
mean
millions
the process by
of American
50
telescoped
into
a
of only half a century, with
span
of
basis
this
On
cal¬
compressed
50
would
man
years
something
like
49
in nomadic wanderings, be¬
spent
years
fore he learned
to settle down
in
with
have
existed
months
months ago. The
rived two
ing
would
press
weeks old. And
week
a
three
Christianity would have
ago.
had
ago,
their
print¬
about
two
more
than
little
would
men
sliced
ears
have
off,
their
split, and their eviscerated
noses
entrails burned
eyes
a
be
ar¬
—
before their
very
prior, of course, to being
beheaded
-—
as
penalty
a
would
effect.
this principle,
into
put
Under
vital
information
,
pose
of government intervention
to
"help save free enterprise."
the
intervention
is
more
is
But
likely to stifle free enterprise.
food it
a
all vic¬
the politician are
sense
produces
a
In
permanent sur¬
plus and higher prices.
In
money
"management" usually produces
inflation.
In labor it condones
The effect upon govern¬
itself
is
the growth of
"executive secrecy" — and a
violence.
ment
.
- T o d a y
Americans en¬
bureaucracy.
swelling
there
more
are
gaged by government than there
are
growing the nation's food.
Since 1900, the number of workers
in
private
jobs has
increased
100%.
In the same period, the
The
in
workers
of
number
ment
govern¬
jobs has increased 650%.
Federal Government is op¬
erating
20,000 commercial
competition wtih
some
in
businesses
private enterprise/ ■
As long as the government is
it
if
surprised
be
his
Ministers.
tion
of
the
And
United
The
Constitu¬
States
offer to sell nor a solicitation of
offer to buy any of these securities. The offer is
made only by the
Offering Circular.
an
NEW ISSUE
75,000 Shares
WALTER PIDGEON STEEL
PRODUCTS INC.
Common
(Par Value lQif
Stock
per
would
an
in
citizens
free
a
society.
The
people assign to their
government the monopoly of co¬
ercion, so that their government
can
protect them against force
sovereign
This
power is
into
the
police
intervention
Today, however,
intervenes
not
an
market.
government
our
pervasively
into
the
private lives—the market rights—
of
the
people.
on the part
is only a result
secrecy
that
might be expected from the
growing power of government to
intervene into the private lives
of the people—into their right to
produce and consume, to earn and
to save, to invest and exchange—
into their marketplace.
into
the
market¬
place—as I define it—is infringe¬
ment
upon
the
freedom
of
consumers
with the
of pro¬
tecting the welfare of producers—
or vice versa—with results, in the
run,
oldest—and
was
both.
to
like
tyranny,
long, long history. Perhaps
a
the
excuse
harmful
best-known
—
still
of
one
the
interventionists
—
Joseph.
Mainland Securities
grow.
Franklin
,
freedom
than
Everyone
—
almost
say
have
Corp.
Street
Government
Hempstead, New York
the
managed
him
to
in
a
Intervention
in
Communism.
devastatingly
demon¬
It
over
in
the
the
to
his idea
Pharaoh
and
Today,
came
made
land
of
United
behind
hidden
lie
tionism
de¬
a
The
idea
basic
,
,
.
ventionism is to improve
the wel¬
fare of society by taxing the rich
and distributing the proceeds. But,
as our growing surpluses of farm
products indicate, intervention
into
are
years
37
admission, less than two
that it was suppressing
ago,
volumes
relations
with foreign
1$39.
It might ap¬
American people
Chinese
of
Confucius'
that
the
the
day,
dealing
since
"may
to
allowed
be
not
know."
Government
be¬
has
secrecy
widespreadr^at the state
and local, as well as the federal
level
that the
press,
as you
come
so
—
ning battle with bureaucratic sup¬
pression of news. "Right to know"
So
rise
defeats
increased.
high that there
rich men to foot the
and
new
problems
keep
have
passed
been
37
in
ijequiring state officials to
open books—or open meetboth.
or
are
is
at¬
the problems
cre¬
intervention
cure
laws
states,
needed.
taxes
new
more
tempted to
finds his taxes
With each intervention
into the market
created
its
so
everyone
ated by
ment's
and ends in costly failure.
costs
Then
trying to
Depart¬
know, has had to keep up a run¬
market
not enough
bill.
least,
at
own
the
purpose
The
past—or,
conceal it—was the State
like
inter¬
most
of
the
be¬ pear
of seemingly
nevolent social policy.
facade
ceptive
•From
the
talk
a
School
of
by
Mr. |
Koether before
of
University
Mich.
Journalism,
Michigan, Ann Arbor,
the previous intervention.
Thus the problems grow
complex
require
The
still more
costly, and seem to
and
even
process
intervention.
more
if continued long
—
enough—leads
inevitably
full
to
Rermeisen V.-P.
Of G. E. Parks
socialism.
elected
has
Vice-President
director
G.
T-win
This
who
government-
plan.
dream. He sold
"ruler
Egypt."
first
farm
Pharaoh,
him
the
They
see
everyone—can
been
years,
According to the Bible, Joseph
created
Communism.
is
perhaps I should
or,
of
dangers
creeping
interventionism,
a
period of
can
deceive many people
do
not
realize
they
are
headed
Telephone IVanhoe 5-2200
ment loses, the people must win."
The Court said: "It Printing began in China, and so,
is hardly lack of due process for
quite probably, did
censorship.
the government to regulate that
Confucius
could
if stretched
Market Place
North
farmer
dictate how much wheat a
strated. But the evils of interven¬
fraud.
or
Interventionism,
may
wins, the peo¬
the^government could ple must lose, and if the govern¬
it ruled rthat
Mollen-
Mr.
if the government
.
.
.
legal 18 years ago when
>
&hare)
be obtained only in
ivhere the securities
may be legally offered.
156
over
.
long
$4. Per Share
Copies of the Offering Circular
states
control
extend
documented,
an<3
,
frightening account of
define^ the "executive
Washington's
violation
of i the which is subsidizes." By the same
secrecy" of his day as follows:
people's right to know. No doubt logic, perhaps, "the government
"The people may be allowed to
they have also read the excellent feels entitled to censor that which
"act, but may not be allowed to
report of the, Sigma Delta -Chi it. regulates. And it continues to
know."
'
committee on Freedom of Infor¬ "regulate-' more and more of our
"Confucius' idea was taken up in
mation.
I only wish that every economy. earnest * by
the; Emperor
Shih
'American would read and study
-Today, so much of our economy
Huang Ti. He applied what may
both of these documents. In fac{, is regulated that some authorities
have
been
history's first brain
I do not know why more of our feel it is a delusion to say we are
washing. He tried to wipe out the
.newspapers do not publish both of living in a completely "free enter¬
past by burning all the records of
these reports as a service not only prise" system." As economist F. A,
his: predecessors. Next, he cen¬
to the freedom of the press but, Hayek says, "the world of today
sored the present by burying alive
is just interventionist chaos."
more importantly, to the freedom
400 scholars of history (the re¬
of the American people.
porters of their day) —and then
A Greater Insidious Enemy
All of' us recognize the -neces¬
announced himself as China's
In one sense, interventionism is
sity for government and the role
"first" Emperor.
a
far
more
insidious
enemy
of
of government power in behalf of
A modern version of wiping out
has
such
to
want
to
it all very
somewhat
Intervention
Price
national
well
hoff's
of the government
is neither
markets, it will also tend
in those
If the
journalism
read
have
Increasing
announcement
ad¬
any
;■
and Gold
Government
-
the
to
all
Undoubtedly,
for
printing words displeasing to His
of relatively-unfettered per¬
sonal liberty behind us, we
would
Majesty, the King of England and
almost
J his
piles up
point.
*
of
endar
have
200
men.
United
years
(500,000 B. C.) and the present.
the
In the
services of their fellow
States,
years
peo¬
ple freely exchange their products
and services for the products and
be
students
as
villages. He would have devel¬
oped writing about six months
His
Grecian
civilization
however, that ago.
of
of
It
100%
Quite often the announced pur¬
example
surpluses, raises
the price of food to the house¬
wife, increases the tax load upon
taxpayers, and wastes land re¬
sources. At least, that is the judg¬
ment of Professor William Peter¬
son, • whose
recent
book, The
Great Farm Problem, says: "The
farmer is no longer a free agent.
Neither is the consumer.
.
.
The
farmer and the consumer, and, in
we
appreciate how recently our free¬
dom
was
really won, consider
Market
all understand the importance
freedom
the
of government
intervention into the market proc¬
tive
civilization
representing
all
the
nation where only the government elapsed time between a point half¬
way
through
the
paleolithic
age
can
own
the printing machinery.
out
Castro regime is fast approaching
best-
for concern
son
security and the public safety.
press
There
price
our
government could call in that information—and that con¬
ministration could withhold from
the people's gold and replace it
that freedom, in fact, is indivisi¬
trol will increasingly be directed
the public essential facts on the
with paper money and then con¬
ble—and that a nation which loses
to covering up the government's
the
freedom
of its market will spending of billions of dollars for tinue
to
withhold that gold to
mistakes or hiding its reach for
such things as foreign aid. It may
soon lose the freedom of its press
which the people were entitled.—
more power,
hide imprudence, mismanagement
and, finally, the freedom of its
why, then, can it not also with¬
In the words
of the Chinese
or
fraud and in some cases ma¬
hold
information to which the
people.
essayist, Lin Yutang, "It is not
terial that has resulted in later
people are entitled?
always realized that there is al¬
indictments. At some time in the
Recalls Newness of Freedoms
What it all boils down to is this:
ways
a
conflict between public
We forget, all too easily, that future, it is possible that another "he who pays the piper calls the
opinion and authority, inevitable
administration
might
keep
secret
freedom
is
an
exceptional con¬
.tune." The Supreme.Court made in whatever country and age
that
addition to
action
in the February first issue
of Vital Speeches, Clark Mollenhoff,
distinguished
Washington
reporter, says that "Government
secrecy represents our major rea¬
farm
is
■
mean—in
property
:
the
Today's
program
it op¬
unless
market
willing to pay.
to
By free press
we
a
is
news.
our
Thursday, May 12, 1960
considers knee-deep in the people's freedom
privilege, has established a
of a
principle and. a precedent under itself competent to decide what is of markets, it will be knee-deep
pills and sell them at a price he which
a
broad
and dangerous too "sensitive" for the people to in the people's freedom of infor¬
is willing to accept and a buyer
mation. And as it extends control
v ■'
X7
black-but of all information could know?
and pub¬
edit
"market" cannot truly
a
called
corruption and the right
man
to package pickles or
men
and
press.
official
more
mean
not a free
were
Likewise,
be
We
them.
if it
today?
press
our
press
"press" worthy of the
a
support
*
mean
more
.
a
todayThe 1959 tims of intervention."
If the government claims. the
Sigma Delta Chi report on Free¬
when we
erates by the free choices of its dom
of Information - concurs in right to regulate the supply of
consumers and producers.
If it is that view by saying that "Federal cotton, corn and wheat, why
not free, it is no longer a market.
officials, from the- President on should we be surprised when it
It is a state-controlled system.
down
have
resorted
more
and claims the right to control the
Perhaps some may feel I have more .frequently
to the vague supply of information?
stretched this parallel too far. At claim of 'executive
If the government thinks itself
privilege' to
first, there may seem to be little withhold
information from
the competent to determine such a
logic in valuing equally the right
a
public, the press and the. Con¬ sensitive economic factor as
of a crusading editor to expose
gress." The exercise of this execu¬ minimum wage rate, why should
I be¬
agree,
can
us
what we mean
of the
•
lieve,
far
call
discussion
is
have
we
fulfillment.
ess.
and growing jeopardy^;/ />
In an article on freedom of
evils of
the dangers of Communism ... but the
interventionism lie behind a deceptive facade."
see
can
everyone
Press.
.
complex version of
known
free
How
the extension of gov¬
ernment secrecy over news and intervention in the market place, and
avers that this is a more insidious enemy than Communism as "almost
Our
.
much more communists, we merely reserve
Joseph's farm the right to intervene into any
business
up
to
i00%!"
Recent
plan, and many people think it,
news from Cuba indicates that the
too,
is a dream—impossible of
States,
According to some of our ablest
journalists
and
publishers the
freedom of the press is in great
freedoms and how rapidly they are
singles out as one of the responsible causes
He
*
Jeopardizing Factors
liberty was won,
being reduced.
reminder as to how lately our
Koether makes the
■
us.
depicts the interdependence of a free press
Writer
adopted
been
have
how
Chronicle
Commercial and Financial
(2050)
they
into
full
socialism
Then it's too late.
however,
heard
over
past the point of
are
turn.
out
a
from
Cuba
until
no
re¬
Recently,,
we
have
telescoped version of the
interventionist
process.
A
radio
report quoted Dr. Castro's finance
minister
as
saying:
"We
are
not
C.
of
R^uneisen
Everett
(Special to The Financial
CLEVELAND,
Rettew
is
and
&
Parks
Co., Inc., 52 Broadway, New
City.
Joins Livingston,
been
York
Williams
Chronicle)
Ohio — James E.
connected with
now
Livingston. Williams
Hanna Building.
& Co.,
Inc.,
Number 5950
191
Volume
.
.
The Commercial and Financial Chronicle
,
trade
Month Reveals Slight Gains
Past
Principal Factors Involved
in'
of good—but not booming—business is
Continuation
immediate months ahead in the latest survey of purchasing agents, "V.M
desire to rebuild inventories which were found to have bean
and the
rebuilt much
faster than anyone anticipated.
By Paul Einzig
>
London Slock
-
-'J;*'
; v
•
y
further
is generally good, but it is less good than the overly
optimistic estimates made at the first of the year.
Inventories
have been replenished, all items are available in plentiful supply
Business
;
fields, price competition has been much more intense
expected. - In short, business has not shown the buoy¬
and, in many
than was
I
that was expected, but it is continuing on a relatively
satisfactory plateau. :
^
' ■* .
In examining, the statistics, for this month, the Business Sur¬
ancy
a
>
'
.
competitive buying opportunities are available.-
Our members generally look for a
restricting their forward coverage to- the minimum
with assured deliveries.
consistent'
.
they are
there have been minor increases, and 4% slight
there has been no change in the prices
■
•
Two
things are most often mentioned in the survey reports
Purchasing Executives as the major reasons for keeping
inventory balances at a minimum at this time.; These are: (1)
availability of materials, and (2) strong competition.
They see
immediate
materials
.'-"V
hand
| recovery
records
down
their
all.- With
overload
in
'
'-v'-V
.
■
i
-
'£-V'V'
'
wise
Already, there
is
over-full -employment in most
industrial areas, and the scarcity
but
and
While
.
in
1957
the object of the official
to
threat
the
•confined
sterling and the resulting decline
to
countries
of
the
to
1
World.
the
There
this month.
bloc
ahead
there
more
are
are
26% report¬
are
inclined
Employment
"
:
The
Basic
Reason
of the
actual extent
.an
credit
unhampered expansion would
inflation
mean
which
would
,
Sterling Threat
rea-' ther
the only
why ' the Government feels
impelled to inflict disinflationary
son
measures
on
the
national
econ¬
-j expansion even if this places the
^ democracies at a grave disad¬
Exchange. Inves¬
that
measures
press
the Stock
tors and
to
tends
dealers have
no
de¬
vantage
illusions
about the probable attitude
of the
ence
in
competitive
with ...the
co-exist¬
Communist
'
\
In the period immediately preceding the steel strike in 4959,
employment had climbed to a new post-Korean War high. During
was
the expected drop in employment
In Decem¬
This is neither
and the low point was reached in October-November.
an
offer to sell
securities. The
nor a
solicitation of
an
offer .to buy
any
of these
offering is made only by the Prospectus.
ber, 1959, and January, 1960, employment gradually picked up as
everyone looked for the predicted boom.
employment has dropped at
seasonal
or
other
May 9,1960
NEW ISSUE
Again this month, there is an
factors.
normal
Since February, however,
faster rate than can be explained by
a
1 50,000 Shares
increase in the. number reporting fewer employees on their rolls,
26%,
as
ment
is somewhat higher this
month, as
with
compared
Reporting
change
no
are
22%
Also,
March.
in
13%
with
warrants
employ¬
say
against 14% last month.
American Bowling Enterprises Inc.
61%.
Buying Policy
Although
not
readily
when
apparent
looking
months statistics, the shortening in time-ahead
at
only
two
COMMON STOCK
for which buyers
(SI.00 Par Value)
are
willing to commit, continues. With very few exceptions, sup¬
pliers' inventories of buyers' requirements are more than adequate
to meet
their needs;
Together with
-Per Cent
Reporting-
Purchase
6 Mos.
Hand to
30 Days
Mouth
to 1 Yr.
90 Days
60 Days
Capital
March
Expenditures
V
40
14
22
8
6
13
21
.36
28
22
44
23
5
2
8
14
23
46
6
33
23 ;
46
10
>•
-
•
in
units
consisting
one
of
one
detachable .Class
A Common Stock Warrant.
.-.7
:
Stock
150,000 Class A Common
Warrants,
share of Common Stock and
April
Production Materials—_
r
1
50
Price:
$7.50 Per Unit
■&<;>
v
v
Production Materials—
MRO Supplies
Capital Expenditures.-
8
26
••
v
9
Specific Commodity Changes
Again, this month, there
lown,
on
some
nventories of
On
the
ools and
On
commodities,
some
up
side
are
are
affected
are:
Kraft
down
side
are:
paper
rical apparatus.
In short
supply are:
Steel
other
dealers
as
may
the undersigned and from
lawfully offer these securities in this state.
.by over-
Myron A. Lomasney & Co.
items, and temporary shortages in others.
and
multiwall bags,! hand
•
drills, burlap, calcium chloride and chlorine. *
the
Copies of the Prospectus may be obtained from
such
■
spotty movements, both up and
markets
as
6 '<
.<
scrap
»-
■
and many items of elec-
■'/(
Anhydrides.
;
"
'
"
re-
in itself have
act on the standard of living in
produce the
long
run.
So there seems
adverse
effect on equities wit¬ ! the
nessed during the last month or nothing for it but to check the
so.
It is the anticipation of fur¬
demands.
Not Due to
This is practically
.
'
,
4.
Explains
that
indications
employers
.
.
ing lower inventories, and 25% reporting higher inventories. This
49% indicating that their balances have remained un¬
changed from March.
-
1959, there
It
countries
are in
a
posi¬
with their in¬
expansion 'unhampered,
go
dustrial
Free
while
Soviet
the
tion
of
that
means
to take the line of least resistance,' squeeze would not
and
give
way
to unwarranted been sufficient- to
wage
leaves
the last half of
the
the economy is likely
on
to tend to increase.
usual
short-sighted selfishness the trade
up
are
of
that
rise in prices in the absence the
last
two months.
This fact
disinflationary measures. That does not prevent the Government '.in the Free World trade union
fear, is not altogether unjustified.. from administering mild doses of greed and
selfishness makes it
There are indications that, as in disinflation, coupled with the
impossible for the authorities to
1957, the trade unions have lost warning that the dosage would
allow industries to expand to the
their
heads
and
are
ready - to be increased if necessary.
full extent of their capacity. Such
plunge into a wage spree. Like-.
once
inventories of purchased materials beyond
foreseeable needs1.
So, again, stocks of purchased
on
corresponding condemand the
a
consumer
,
from
>."■
means
of
.
-
build
This
absence
of
Inventories
to
low
the
as
offering real competitive buying opportunities.
need
new
has remained the Foreign Exchange market and
remarkably stable for nearly two has led to an improvement of
years.
They have been decided sterling. There has been quite an
upon for fear of a resumption of appreciable influx of gold during
'
is often the case, these over-all statistics
do not tell the entire story.
There are numerous reports of local
market conditions and specific product developments that are
no
dustry.
traction in
.
level which in fact
Over-all commodity prices are steady to a shade higher. This
is reflected by the fact that 70% of our members^report that in
paying; 26% say
decreases.
However,
dustrial
«
Commodity Prices
the past 30 days
'to
s
result, are following a cautious buying policy, whereby they
a
are
\
continuation of this good—
booming—business in the immediate months ahead; and,
but not
■
s
-
continuing to inch upward; but, they are spotty,
Prices are
and many
as
"
:
produce its full effect on in¬
expansion.
In the absense
of a last-minute scaling
But for the threat of infla¬ 'down of plans, 1960 will witness
the British boom could be a boom in the capital goods in¬
benefit
for
From time to time there-is
of
corresponding
policy is
preventing the de¬
5 earlier, this year, lies in the Gov- in the gold reserve was the im¬ velopment of . inflationary * symp¬
ernment's declared disinflationary mediate cause of the decision to toms. There is a danger that be¬
fore very long its object will have
policy.
Once more, as in 1957,. embark on a credit squeeze, in
to be to fight actual inflationary
the
British economy appears to 1960
sterling seems to be safe and
symptoms, which requires more
be overloaded, and once more the sound and the
gold reserve has
drastic measures.
Government is determined to pre¬ been
increasing.
The fact that
vent " inflation.
On
the. present for once a postwar Government
Disadvantage With U.S.S.R. ■{
occasion, however, the disinfla¬ is pursuing a disinflationary pol¬
This
state
of
affairs
is
not
tionary:'measures have not been icy without being compelled to do
special- to Britain.
Similar con¬
decided upon as a result of any
so'by an acute attack on sterling
ditions as this are in all industrial
actual rising trend in the price has created a
good impression on
,
.
series
- optimistic
atmosphere r> that
prevailed' throughout- 1959 • and
*
depleted inventories much faster than anyone
anticipated.-.As*a,result, most of our,members now-believe, their
present stocks are in balance and- there is no/further desire to
"
■
democracy at a disadvantage
and
changes in the capital investment
plans of industry the prosperity
of 1958-59 is only just beginning
with the Communist world. 'M;
*
) the
rebuild year-end
".
any
situation
ness
wage
-excessive
wage
demands, which
at any rate: the „boom * is over.
J titude they deprive the commu¬
The reason for this pessimism,. nity (including their own mem¬ J again will call for further disin¬
At present
which is in sharp : contrast** with bers), of the prospective benefits. flationary ..measures.
;
,
,
4,,
strength
.
'
upward
unabated
anticipated
it has no, real unions endeavour to secure the
does not last.
In-. entire benefit of the expanding .of labor is likely to increase fur¬
vestors seem to have: made up production
for
their ; members ther.- This will provide further
their mind that for the time being with the result that by their at¬ -temptation and opportunity for
a
month than last, 48% the same amount,
i
J
a dark cloud on the horizon; for, again
quite clear that Purchasing Executives- were able to
increase them,
the
pace, He also refers to the unfortunate need to act on inflation by
V
1960.
Employment looms as
this inonth, jhoH ;of .our. members; report, a< reduction in the size
of their work: force than those 'who tell of adding employees to
their payrolls. •
'
•
" ,
,
;
It is now
employment and
a
credit squeeze,
lag between changes in the busi¬
;
demand contributing to a state of
consumer
take
would
It
severe
.
Looking at the all-important new order position, 32%. have
v
continuing
.
...
:
*
and
checking expansion which places
i
.
LONDON, Eng. — Ever since the omy.
:ther-London Stock Ex:- tion
change has had a weak undertone. allowed to proceed unhampered.
would
be
Industrial equities lost their en- It
possible to
raise
"tire gains 'Since the beginning > of . productive-; capacity,
output and
the
standard
of
this, year sand their index shows
living for the
Committee of the National . Association of Purchasing Agents, -4
both production and new orders have improved slightly
in the last 30 days.
In telling of production, 26% of the members
say their company's output has increased, 56% report no change
and 18% state there has been a decrease. The NAPA Survey Com¬
mittee is headed by, Chester F., Ogden, Vice-President of the!
Detroit Edison Company, Detroit, Mich.
.
,;
find that
and 20% less.
v
?.
vey
booked more .business this
\r'r
-
discounting of
expected to be taken to check the inflation said to
measures
over-full
.
much to the
so
be incubating now. Dr. Einzig writes of the growing capital spending
boom
-
Exchange weakness is attributed not
recent mild U. K. disinflationary moves as it is to the
more
15
leading to an increase of unem¬
ployment, to bring them to their
senses.
So long as disinflation is
applied in moderation, wage de¬
mands are likely to continue un¬
abated, which
means
that
the
economy is doomed to put up with
further
disinflationary measures
of increasing gravity.
Owing to the inevitable time
is expressed about the employment hiring rate-,
Wariness, however,
unions.
much
In the Fall of U. K. Stocks
in the
seen
(2051)
39
Broadway, New York 6, N. Y.
BOwling Green 9-8120
■
world.
The Commercial and
16
(2C52)
THE MARKET
automobile
experience con¬
tinues to improve, it is not
hard to envisage earnings of
at
least $5 per share com¬
AND YOU
....
WALLACE STREETE
BY
pared with the current mar¬
market bulls on the savings and loan
during the past week turned companies of their chief over¬
into a nervous "plane" mar¬ hanging worry.
*
*
*
,'y'ket, which after the rally of
March 3 and 4 skidded to a
Against a background of
net loss of 1 % ($6 by the Dow ever-lessening investor inter¬
Jones Industrial Average). est in the rails (the life in¬
The
tightening of interna¬ surance companies turned a
tional tension with the heat- completely cold shoulder to
ing-up of the Cold War with carrier commons last year), a
its inflationary implications, few individual issues are
constitutes a typical news arousing some interest. One
item which might well have of
these
is
Denver & Rio
been construed as bullish in Grande, presided over by
An
a
already
nervous
confident market
more
at¬ Alfred
While
year-end
has
it
bro
and net
during the past dec¬
selectivity in
market fluctuations, the pres¬
income
ade fared
considerably better
than the rest of the industry;
indeed but also, coupled with a mod¬
For example, in est and declining debt struc¬
ent cross-currents
remarkable.
$68
share.
per
are
session, which ture, its working capital, at
was head-lined
by a leading $25 V2 million, stands at its
commentator as having
highest level since 1952. The
"crumbled" and after a four- common shares are earning
month 12% market decline, about $1.50, and
pay
a
$1
no less than 36 new highs for
dividend, which at its market
the year were registered— price of 15, offers a yield of
against 133 new lows. And in 6.6%.
the same "crumbling" market
An Area of Investment Value
session, of the 1,193 issues
Tuesday
nuclear
of
D.C.
..
*
*
turn
Minnesota
Mining,
"new
high"
week's
of
stocks,
one
demonstrated the still per¬
of interest to the insur¬
ance
stock
because
area.
of
recent
results
structive
Particularly
years' de¬
underwrit-
severing market effectiveness ing-wise, along with their
of the Split. This week's due market's
illiquidity in con¬
trast to the
pyrotechnical dis¬
previously an¬
nounced 3-for-l slicing, cou¬ plays put on by the electron¬
pled with the reporting of an ics and other Stock Exchange
earnings increase, stimulated favorites, they have lain quite
this glamor chip's further neglected. Now, in with the
climb to an all-time high of deflated market psychology,
196 (50 times the raised earn¬ the improved underwriting
results, and the market pricings).
*
..v *
*
:Xv
i n g reasonably
capitalizing
Another new-high stepper, the
companies' investment
Great Western Financial, has earnings, the fire and casu¬
benefited, along with other alty shares are gradually stir¬
savings and loan institutions, ring up long-pull buying in¬
date
for
:
the
■
long- terest.
and short-term variety.
Or¬
American Insurance Com¬
ganized in California in 1955
to take over the ownership of pany,
the outgrowth of a
the Great Western Savings three-way merger, at 26, can
and
Loan
Association, and be bought for but 13 times its
now
encompassing seven as¬ investment income of $2.03
sociations with combined per share.
Its underwriting
from
news
of both
total assets of
over
the
$660 mil¬ operations
were
in the black
lion, it has been enjoying full last year, with its total ad¬
participation in California's justed earnings at $2.14. With
renewed real estate boom, to¬ the
dividend
at
$1.30, the
gether with increased con¬ issue yields 5%. A further in¬
sumer
incomes
larger
market
savings.
fillip to the issue
sulted
at
least
resulting in
This week's
in
part
re¬
crease
in total
earnings, to $3,
is looked for in
In
from gory
the
in
1960.
high-quality cate¬
casualty field,
Douglas' vigor¬ Employers seems to offer ex¬
ous attack
on
the legislation
ceptional value. Its rate of
before the Congress to in¬
growth and underwriting
crease
Federal taxation
on
profit margin have always
savings and loan associations, been well above average. Yet
along with the mutual savings it is selling at approximately
banks. His bitter
onslaught on 10 times this year's estimated
the pending legislation as a investment
income of $3.75
"blatant example of
irrespon¬ per share contrasted with its
sible
pressure
politics," by current dividend of $1.40 per
Mr. Douglas, who as head of share.
Earnings last year were
subcommittee is in
a
Banking $4.20
key posi¬ stock
per
for
Operations
fiscal
the
year
pared with 590 per share for the
same period of 1958. The common
stock is selling at 16 and traded
the balance of
ending June 30,
1960, appear very favorable as
Over-the-Counter.
months
six
will
equal
be
to
with total earnings of
$6.01. The dividend is $2.10
prevalent
ing for a more thorough study of
this situation.
Apy to Be Officer
Of Amott Baker
1 ratios
quotations for the
stock of many electronic compa¬
per share with net worth $97 nies, it is most difficult for the
per
share. New Hampshire analyst to find the issue of a 43year-old company with established
has traditionally sought busi¬
earning power selling at eleven
ness in the rural areas and its
times earnings. Acme's earnings
year
In
these
company's
Annual Report as necessary read¬
or
exceed the first six months' results.
this
recommend
I
the
yield 4.2 %, it had investment
income of $4.48 per share last
days of 40 to
in
May 19th, Edward C. Apy will
Vice-Pres¬
On
be elected an Assistant
ident of
Amott, Baker & Co., In¬
corporated, 150 Broadway, New
York City, members of the New
York
Exchange.
Stock
alone this year
income
should be in the
of
$5.00
neighborhood
share so that the
selling at only 10
per
stock
is
times
this
estimated
invest¬
ment income alone.
share
so
that
NOTES
NSTA
[The views expressed in this article
do
necessarily at
not
with
cide
They
any time coin'
of the "Chronicle."
those
presented
only.}
are
author
those of the
as
BOND
CLUB OF DENVER
Bowling League reports the final stand¬
The Bond Ciub of Denver
The Security
I Like Best
ing for 1959-1960 season for the teams (three men each), 81 games
108 Peterson
points.
—TEAM STANDING
!
'
_
1.
j:
,
Founders Mutual Depositor
-
' '
—
>
r
Continued from page
Corp
Bosworth, Sullivan & Co.__
2
Garrett-Bromfield
stock.
mon
phasis
ment
Acme's
continued
Mavericks
erect
new
42 y2
44
44V2
■
Smith Inc. (#2)
49
—
58
57
50
51
52V2
:
'
em¬
Boettcher
product
building
new
a
(3 strays)
Currie Investment
65 Vz
64
63V2
59
Merrill Lynch, Pierce, Fenner &
develop¬
made it necessary for it to
on
a
Co._
&
Lost
Won
-
J. A. Hogle & Co
and
Company
(#2)
Merrill Lynch, Pierce, Fenner & Smith Inc. (#1)
Kirchner, Ormsbee & Weisner
Peters, Writer & Christensen, Inc. (#1)
Peters, Writer & Christensen, Inc.
adjoining
the company's main plant at Cuba,
N. Y., to be used for research and
HIGH TEAM
GAME—Mavericks
HIGH TEAM
SERIES—J. A. Hogle &
the
INDIVIDUAL
HIGH
GAME—Neiswanger, Mavericks (266)
wealth of experience accumulated
INDIVIDUAL
HIGH
SERIES—
engineering laboratory.
an
Acme's
the
engineering advance
natural
outgrowth
of
through
over forty years of man¬
ufacturing transformers and other
INDIVIDUAL
panel
controls,
transistors, provide
further control step in the reg¬
ulation
of
supplies
Acme
and
Electric
panels makes it possible to sense
extremely
small
variations
in
and regulate
power
output
control the
or
instantly,
with a
accuracy.
The
high
degree
of
basic principles of transistorizedmagnetic
panels
component
are
not
limited
finished products.
portant
feature
to
They
of
control
miniature
de¬
Magnistrol
Battery Chargers,
Speed Controls, DC Regu¬
a
in
program
a
Laboratory
engineering
the last several
over
contract
ceived from
has
been
re¬
Brookhaven National
amounting
to
several
hundred thousand dollars and call¬
ing for the development and
ufacture of
ulated D.C.
a
number of
power
man¬
large reg¬
supplies,
&
Smith Inc.;
1960-1961
Committee
Members
offer
new
rang¬
oppor¬
fields. This
equipment will be part of
the giant
atom
smasher, known
a
Gunderson,
new
as
an
Merrill
Hogle & Co.
their 1960
>
Outing are Robert Wetmore,
McJunkin, Paton & Co., and John C. Loos, Walston & Co., Inc.,
Chairmen; Samuel Teresi, Reed, Lear & Co., and Thomas J. Davies,
Jr., McKelvy & Company, Le Bocci; Robert Cunningham, Singer,
Deane & Scribner, and Robert G. Deakins, Reed, Lear & Co., golf;
and Frederick Leech, Moore,
Leonard & Lynch, and Malcolm
Lambin, Jr., Thomas & Company, prizes.
Members of Committees for
the
Dinner will be served at 7 o'clock.
The Association
anticipates
one
reservations should be made
NATIONAL
SECURITY
of the best outings it has
had
early.
TRADERS
ASSOCIATION
Alfred F. Tisch, Fitzgerald & Company, New York City, Chairman
of the National Advertising Committee of the National Security
Traders
Association, has announced that Russell Wardley, Fulton
Inc., Cleveland, is now Regional Advertising Chairman
Security Traders Association.
Reid & Co.,
for the Cleveland
INVESTMENT TRADERS
ASSOCIATION
OF
PHILADELPHIA
The Investment Traders Association of
38th Summer
Outing on
Township, Pa.
Philadelphia will hold their
June 10 at the Overbrook Country Club,
The STANY Glee Club will
and
Bill
PITTSBURGH SECURITIES TRADERS ASSOCIATION
being supplied are larger than
equipment produced in the past by
Electric,
are:
Lynch, Pierce, Fenner & Smith Inc.; Alex Forsyth, Calvin Bullock
Ltd.; Oscar Hasselgren, Walston & Co., Inc.; Cully Mayer, J. A.
Radnor
Acme
Jim Roberts, Bos¬
Oscar Hasselgren, Walston & Co., Inc.; and Cully
ing in capacity up to 600 kilowatts
output,
and
weighing
approxi¬
mately 16,000 lbs. each. The units
tunities in active
were
Mayer, J. A. Hogle & Co.
and
result of the company's ex¬
and research
years,
Members of the 1959-1960 Committee
worth, Sullivan & Co.; Don Langley, Merrill Lynch, Pierce, Fenner
Supplies, Automation
Control Circuits.
As
AVERAGE—
Spring Outing June 10 at the Shannopin Country Club.
impor¬
and
LEAGUE
The Pittsburgh Securities Traders Association will hold
tant features to such of its
products
lated Power
HIGH
of
torized control circuitry improves
the performance and adds
Motor
THIRD
Cowan, Bosworth, Sullivan & Co, (168)
im¬
size
are an
vices as well as equipment weigh¬
ing thousands of pounds. Transis¬
as
Neiswanger, Mavericks (179)
INDIVIDUAL
other
of these transistorized control
power
(615)
AVERAGE—
LEAGUE
INDIVIDUAL SECOND HIGH LEAGUE AVERAGE—
power
equipment,
within close limits not possible be¬
fore. The high amplification fac¬
tor
HIGH
(1,642)
Co.
Mayer, J. A. Hogle & Co. (181)
Printed-circuit
incorporating
a
(596)
Bromfield, Garrett-Bromfield & Co.
magnetic components.
55 Vk
56
49J/2
60
66
70
52
48V2
48
42
38
was
as
is selling at
only nine Alternating Gradient Synchrotron,
tion, is serving to relieve the times last
year's earnings. If being constructed at the Brook-
earnings were 770 per share com¬
Hampshire Insurance company's backlog of orders was
reported
at
approximately 500
is another example of an ex¬
higher than the backlog of a year
tremely cheap insurance ago. The company's sales forecast
stock. Selling around 50 to indicates shipments for the last
pended
the
Senator Paul
the relevant Senate
physics. In the past,
for similar applica¬
been provided by ro¬
tating electrical machinery.
rose,
❖
has
ended June 30,
1959, were $1.45 per share. For the
months ended Dec. 31, 1959,
six
power
tions
Understandable
in
the
against 626
program in effect for many years
declining and 229 closing un¬ present quieted investment and amounted to 7.2% of sales. It
atmosphere, are signs of a re¬ equalled $2.60 per share of com¬
changed.
traded, 338
for its fiscal year
to con¬
research in the field
haven National Laboratory
duct further
Thursday, May 12, 1960
.
his
rier's gross revenues
become
was
the
at
.
New
ment
midic to refer to
the
in
only have this efficient car¬
What "Market"?
Net worth
38.
.
underwriting is usually some¬
prewhat above average. Invest¬
Central career. Not
Perlman
New York
mosphere.
of
ket
Financial Chronicle
SECURITY TRADERS ASSOCIATION OF NEW YORK
at the Belmont Plaza
hold
its
Sixth Annual
Hotel, New York City
on
Dinner-Dance
May 21.
BOND CLUB OF LOUISVILLE
The Bond Club of Louisville will hold its Annual Summer
June 20 at the Standard
SECURITY
The
TRADERS
Outing
Country Club.
ASSOCIATION
OF
CHICAGO.
Security Traders Association of Chicago will hold their
Outir-. at the Nordic Hills Country Club
on
June 25.
Annual
Number 5950
191
Volume
.
.
The Commercial and Financial
Chronicle
.
(2053)
17 *
businessmen and women." At least
each year I like to
publicly
testify to their integrity, industry,
and
importance. They
are
the
hope of America.
""
once
SECURITIES
:
BY OWEN ELY
-
By Roger "W. Babson
.
The point is made that the tremendous
growth of associations still
leaves us, on the whole, a nation of free
individuals. Moreover,
the small businessman is
singled out
Utah Power & Light
& Light and its sub¬
Western Colorado Power
and Telluride Power, supply elec¬
tricity in sections of Utah and
smaller areas of Idaho, Wyoming
and Colorado. Population of the
territory
is about 750,000 and
large cities include Salt Lake City
Utah Power
sidiaries
Ogden.
and
the backbone of
economic activity in the
state
prior to World War II, but now
manufacturing activities, defense
plants, oil refineries and food
processing plants have consider¬
ably
diversified the industrial
status. Discovery of oil in the Four
farming, formed
with
region,
Corners
550
some
wells already devel¬
oped and substantial exploration
producing
continuing, has been an important
factor in the state's economy. The
company's electric revenues from
and
uranium
the
amount
dollars
wells
well
to
oil
areas
over
now
million
a
And as new oil
drilled, older wells go
year.
a
are
"on pumps" and increased use of
electricity results.
mining operations an indus¬
In
trial newcomer is elemental phos¬
About
phorus.
seven
the company began
santo's
last year.
lizer
serving Mon-
electric
two
ago
years
furnaces
and
Central Farmers Ferti¬
nace,
Company also set up a fur¬
so that Utah Power & Light
now
obtains
in
year
Substantial
source.
have
serves
other
million a
this
$4
some
from
revenues
phosphate
re¬
found in
been
now
and
since
sulphur
is also available nearby, a sul¬
phuric acid phosphate fertilizer
plant is to be constructed in the
areas
future by two chemical com¬
panies. Food Machinery Company
plans to construct a plant to man¬
near
ufacture
100,000 tons of coke per
annum, as coke is used
in
manufacture of phosphorus.
the
.
Since Utah is somewhat remote
from
the
West
Coast, it has de¬
important defense
veloped into
an
center.
Air
Hill
employs
the
Tooele
Dugway
3,300.
Force
13,000
some
Base
now
people, and
Ordnance
Depot and
Ground some
Proving
Sperry
Rand,
prime con¬
for the Sergeant missile,
occupies some 400,000 square feet
tractor
of floor space devoted to research
and
manufacture, of
electronic
equipment. Thiokol, which devel¬
ops solid rocket fuels and
recently
received contracts to make com¬
ponents for the Minute Man mis¬
sile,
has
extensive
an
building
Corporation
years has undergone rapid
expansion
and
today
employs
some 1,700
people to manufacture
ram-jet engines. Hercules Powder
program.
in four
Marquardt
Company has spent $8 million to
construct
and
facilities
for
research
development of the Minute-
Man missile and a solid fuel
propellant. Litton Industries manu¬
factures electronic tubes and
ex¬
pects to double its
operations this
year.
Boeing Aircraft has started
construction
ICBM
and
will
assembly plant
Force
Steel production
of
^
U.S.
and
ore
long-range
assured
seems
operations,
with
Steel's highly efficient plant
the ample reserves of iron
in
both
and central
ing
operate van
Hill Air
on
Base.
coal
southwestern
Utah
Wyoming, and of cok¬
in
Utah
and
western
Colorado.
Company
they
the
Federal
well
as
five times what
—some
laws
the
as
and
agencies
organizations
to
business
were
ten years ago.
In
the
past decade, the com¬
pany's revenues increased from
$20 million to almost $50 million,
assets
from
$107 to
$270 million
from $1.15
to $1.85. This growth is
expected
and share
to
Diversified mining activity, plus
and
be
earnings
maintained
rose
it
and
is
esti¬
use
associations.
would not
For
lots and
many
one-quarter
was
from
power
Idaho
Power
under
long-term contracts.
The next generating unit, with a
capacity of 150,000 kw, is sched¬
pany
uled
for
1963
(the
service
last
in
unit
the
fall
of
with
100,000
kw was installed in
1957).
New
capacity requirements up to 1963
will
be
obtained
by
buying firm
Power, which
its
second
large
from Idaho
power
is
completing
hydro plant of the Hell's Canyon
trio.
T
Utah Power & Light
began tak¬
ing 50,000 kw from Idaho Power
October,
which
will
be
stepped up to 100,000 kw late this
last
and
to
200,000 kw about a
year later; it will continue at that
level through 1964, when it will
drop to 150,000 and continue for
year
another three years. Utah P. & L.
plans
build
to
plants in the
is
estimated
will
v
reach 2
The
two 500,000 kw
later 1960s since it
that
the
I
total
load
million kw by
1975.
others
Believe
The
Com¬
story
zation,
Association;
in
were
in
With
small
and
people.
medium-sized
The
largest of
Business
Organiza¬
of
advancing
Trade
Association
of
point
Senate and House.
coopera¬
Repre¬
keeping them
in
It has
a
Vice-President
in
giving full time
matters of legislative activity.
to
in
the
Small
a
Business
Administration.
made
and
total
This
subsidiary,
Investment
latter
short-term
loans
has
of
as
local
80,000
unions.
the former R. F. C. Sixty per cent
of these loans were made in
par¬
There has been much fun poked
at the "Organization Man," mean¬
ticipation with banks. The
vinced
are members of organized
voluntary groups. In our free U. S.,
these members retain a very large
degree of independence; and, ex¬
have
that
the
financial
"little
people"
responsibility and
has
abundant
character.
supplies of a variety of reason¬
ably cheap fuels in the area—oil,
Are We Over-Organized
cept in cartels and some labor
high grade coal, petroleum pitch
unions, individuals are not coerced
Is
organization "cramping the
(by-product of an oil refinery), or
regimented or herded. On the style" of individuals and reducing
an interruptible supply of natural
whole, ours is a nation of free in¬ their initiative? Are too many of
gas, etc. Weighted average cost of
dividuals—though not as free as us becoming "leaners" instead of
all fuels last year was only 230
were our pioneer fathers.
"lifters"? I believe that as long
per million btu. \
as
organizations
are
voluntary,
Utah Power & Light's construc¬
Small Businessmen
they will wither away when they
tion expenditures averaged only
Freedom to organize is one of lose their usefulness. Individuals
$13 million per annum in 1958-9 our
basic
American
freedoms. can
make
their
influence
felt
but for future years are forecast
homogeneous
Special and new interests keep within
groups
of
approximately as follows: 1960,
arising in our world of rapid their choosing, dealing with prob¬
$17
million;
1961,
$19 million;
changes; one new bristling area lems about which they have direct
1962, $27 million; 1963, $28 mil¬ is that of Small
Business, which knowledge.
lion; and 1964, $20 million. As a since 1938 has been
For some years—with my asso¬
self-organized
result of the low construction pro¬
solely and specifically to protect ciate Ernest Gaunt of Orlando,
gram interest during construction
the legitimate interests of inde¬ Fla.—I have watched these "small
last year
amounted to only 10
per share, but this year the figure
will
be
somewhat
higher. The
company
does not use accelerated
depreciation.
company
The company's
was
This announcement is neither
an
securities. The
was
last rate increase
the rate of
H.
Gordon
McCollum
has
William
K.
Bosse
joined the
staff
tor
tional
the
sales.
Mr.
Chicago
analyst
in
came
1957,
as
underwriting de¬
partment.
Previously, he was a
senior analyst with Glore, Forgan
& Co., Chicago, and research de¬
partment
manager
for
Loewi
Fuel
Supply being allowed
a
New
6.3%
Share
Mr.
McCollum's
extensive
includes 20
years
Hutchinson
&
with McMaster
Co.,
Chicago.
about
a
The
stock
-
Chronicle:
1
In the issue of
May 5th, A. Wilfred
May did a splendid job in analyz¬
ing the activities of investment
companies. It was an outstanding
service, not merely to those folks
who are directly engaged in the
fund field, but to the entire in¬
vestment
community.
I
am
consulted the
accompanying tables
feel as I do.
I simply had to ex¬
press
my
appreciation.
JOSEPH. C. POTTER.
(Ed. Note: Mr. Potter writes the
Radio Show Business Final, broad¬
cast
daily
over
the
American
Broadcasting Co. network.)
any
of these
'\V; V;';//i;-.
Share
Copies of the Prospectus may be obtained from only such of the undersigned
are licensed or registered
brokers or dealers in securities in this State,
re¬
as
cently around 35 V2] with a current
rate of $1.32, it yields
dividend
3.7%. About one-fifth of the divi¬
dend
is
Laird &
tax-free.
Company, Corporation
The
company now serves some
200,000 acres of farm land, nearly
half
last
of
which
was
added
in
the
decade, irrigated with water
Pumped from
canals and under¬
ground sources; Salt Lake Valley
and
south-central Utah qontain
about 72,000 acres of land so ir¬
rigated. Revenues from this business,now
exceed $1 million
a year
Now Income Planning
TOWSON, Md. —The firm name
of Maryland
Diversified Invest¬
ment Co., Inc., formerly of Balti¬
more, has been changed to Income
Planning Corporation of Mary¬
land, and offices have been trans¬
ferred to 205 Medbury Road. -. •
N
4.1
Hopper, Soliday & Co.
Adams & Peck
>
Interstate Securities
Stein Bros. &
Corporation;
Boyce
J* R. Williston & Beane
'• Hill, Darlington & Co.
sure
that many who read the story and
($1 Par Value)
V
has been selling
.
Editor, Commercial and Financial
third of the steel compa¬
nies' requirements.)
•
Lauds Fund Study
Capital Stock, Class A
Price $8,875 per
ex¬
perience in the securities business
Jersey Aluminum Extrusion Co., Inc.
have increased
steadily since 1951 with the ex¬
ception of a decline of 70 in 1958.
In: 1959,
however,
kwh
sales
gained 16% over 1958 despite a
2% overall decline in Utah due to
the
copper
and
steel
strikes.
(Utah P. & L. does not serve the
copper company and supplies only
earnings
&
Co., Milwaukee.
'
110>000 Shares
return.
senior
the
May 11,1960
good precedent, Mountain
a
to
investment
decisions in two recent rate cases
afford
direc¬
of institu¬
about 6%. If inflation
continues the company may have
to ask for a rate increase.
The
office
as
Bosse
based
-
firm in October of
*
'
ced
that
offer to sell, nor a solicitation of offers to buy,
offering is made only by the Prospectus.
in 1952. Last year
return
also
a n n o u n
cumu¬
ing a lower-echelon executive in lative losses through 1959 from
big
business
corporations.
But SB A loans have been only 1.1%,
practically every man and many a remarkable showing. I am con¬
women
Podesta
head
established by Con¬
1953 the Small Business
was
$856,403,000 to upwards of 20,000
if
everyone
is a
"joiner," and individual independent small busi¬
many join several business groups. ness
firms; in addition it has ad¬
Yet even the above figures do not vanced
long-term equity capital
cover
the
many
purely social, of $3,785,000 during the past year.
church, labor, and farm fraternal It is now administering over
19,groups. As for employees' organi¬ 000 business and disaster
loans,
zations, there are 200 national and including loans transferred from
about
Ex¬
Mr. Robert
highly respected and
Administration
Commerce, and 30,000 business¬
Midwest
and
of
announced.
gress
are
affiliated 12,000 trade
associations, 5,000 local Chambers
of
the New York
sentatives—and
of the
outstanding in its
There
With
seems
Podesta
& Co., 209 South La Salle
Street,
tion with all Senators and
is
Washington
these
of
its
of
Cruttenden,
Small Business Com¬
competent
men's luncheon clubs. It
at
changes, Rob-ert A. Podesta,
Managing
Partner, has
the
cooperate.
shows that there
3,000 regional and 7,000 local
1
K. Bosse
director
Stock
presents
Directory,
associations of businessmen.
research
appointed
Federation
ness.
Commerce,
are
been
informed of grassroots opinion on
all legislation affecting small busi¬
prepared by the U. S. Department
of
has
members
It
civili¬
record
CHICAGO, 111.—William
Independent Business, with head¬
quarters
at
Burlingame, Calif.,
G. Wilson Harder, President. This
mittees
-
Cruttenden,
medium-sized
PodestaCo.
Small
view to
a
Cooperation
however, is a
willingness to
man's
The
he
years
tient enough to work them.
hydro. The com¬
purchases considerable
also
pany
or
join the National Auto¬
go
totaled 717,000 kw of which about
business
position
it alone, because they had
original ideas and were pa¬
some
year
pendent
foot."
on
for committees
to
last
praised
smglL and
Bosse, McCollum
tions is the National Federation of
across
of
capacity
country
are
"go alone
He had little
and
1959.
our
these
he
Generating
which
of
him
noted for it. He always wanted to
mobile Manufacturers
that
the hope
people belong.
The days of rugged individualism
have
passed.
Henry
Ford
was
by
1975
capacity
should be nearly three times that
mated
as
catering to
I. M. Simon & Co.
section of
Associa¬
tion. He had been President of
Boston Chapter, AIB, in 1912-14,
and became national president of
helle was
Chairman of its
Executive Council in 1915-16. He
Also
the
NEWS ABOUT
BANKS AND BANKERS
educational
New Branches • New
•
Offices, etc. • Revised
Capitalizations
the
The
Chase
New
York,
and the many
of
Vice-Presidents
Bank,
Manhattan
/ appointed
been
have
:
working bank to serve Freedomland's
exhibitors, its employees
George Champion, President,
nounced May 11. Both are in
New
England
district
of
United
States
department,
the
the
the
national territorial organi¬
zation.
will
who
an¬
in
thousands of visitors
attracted
to
the
York"
will show
in the 1850's,
the
city
the
■
it was
as
will
branch
Bank
new
designed to suit this era, and em¬
ployees therie will wear costumes
appointed to the official
Assistant Treasurer in
1953 and in 1956, the year after
the Chase National-Bank of Man¬
of this
He
was
hattan
the
joined
who
Gregory,
appointed an Assistant Cashier in
1937
and was
promoted to As¬
sistant Vice-President in 1944.
Also announced yesterday was
promotion of Byron S. Pardee
and Robert W. Yates to Assistant
Vice-Presidents in the public utili¬
the
died May 4 at Muhlenberg
Hospital, Plainfield, after a brief
illness. His age was 66.
of
last
absorbed
"
Director
a
was
of
the Lincoln Savings Bank of New
assistant, will succeed him
of the corporate trust
value
Both
division.
are
men
Aird
Mr.
Vice-
The
1930
in
Bank
The
Gollow
except
and
corporate trust officer in 1946, a
in 1952 and
pointed
been
ap¬
manager of Chemical
Trust Company,
a
of its China¬
New York in charge
it was announced by
Harold H. Helm.
Mr.
town Office,
Chairman
Chiang joined the Bank in 1952,
and
has
served
since
1957 as
China¬
town Office, at Canal & Mott Sts.
In 1933, Mr. Chiang started his
banking career with the Central
Manager of the
Assistant
Trust
in
China
of
has
also
Farmers Bank of
China, Rangoon,
&
Calcutta
&
Burma
He
with the
Shanghai.
been affiliated
Bombay,
Vice-President,
Correspondent
of
of
First
The
has
Bank
Department
City Bank
was
formerly
National
York.
New
He
Chemical
with
Assistant
joined
the
Bank
York
New
Trust Company, New York.
began
and
Tuckahoe,
announced
Y.
of
of
merger
was
ger
of the foreign department of
Security
and
Trust
Company, Washington, D. C.
#
The
Bank
City's
first
founded
branch
outdoor
in
in
*
of
New
1
.
-
the
Freedomland, the
entertainment
in
and
Trust
Company
of Hunting¬
stock
common
the
of
value
par
of $10 each.
*
■
as
Trust
*
*
Appointment of Ray F.
Jr., as Vice-President in
of
the
Myers,
charge
corporate trust division of
approval
its
given
May 5 to increase
stock from $2,640,000
was
on
capital
consisting of 132,000 shares of the
value of $20 each, to $2,673,000
par
consisting of 132,000 shares of the
par value of $20.25 each.
*
*
Com¬
was given ap¬
April 29 to increase its
capital stock from $1,000,000 con¬
sisting of 100,000 shares of the par
value of $10 each, to $1,200,000
consisting of 120,000 shares of the
value.
*
Windsor
The
Windsor,
N.
Y.
a
Bank,
plan
for
the
merger of The Windsor Na¬
tional Bank into Marine Midland
Southern New
York under the title "Marine Mid¬
Company of Southern
with
the
New
Banking Department. The
proposal of the merger was given
in
the
April
14
issue
of
the
Chronicle on Page 1634.
Robert
of
of
Bean, former Boston
died May 4 at the age
83.
Mr.
-.v,'"'-,v;
and
Savings
the
was
a
American
the
of
4
Harris
Bank
Trust
Chicago,
111.
proved by the stockholders of the
two banks in separate meetings
held May 4.. :
banks
based
The
is
of
binding
the two
figures
upon
merger
now
the
of
resources
February 29 totaled
the
and
two
banks
conclusive,
approval
Department of Financial
tions of the
of
as
$943,000,000.
of
necessary
the
Institu¬
State of Illinois hav¬
two banks will take place on Oct.
24, 1960, and the merged institu¬
tion
will
operate from
under the name and
that
president
Institute
its common
from
$6,000,000
of
sale
the
of
be
may
Eugene C.
from
the
on
Travis,
Harriman Ripley & Co.
A.
Noonan,
Jr.,
tinental Illinois National
in¬
Trust
capital stock
Field
is
Co.,
chairman
Con¬
Bank &
of
the
Day; John J. Lynch and
George R. Wahlquist, Weeden &
effective
stock
handicap
Ekchange
Stock
obtained
$7,000,000 by
to
new
IBA
trading
for
Shares
special
Co.,
chairmen,
vice
are
Fabian
(Number of shares out¬
standing—700,000, par value $10.)
April 25.
with G.
William Blair &
Brewer,
Company, Chairman ex-officio.
Members of the Committees for
Field Day
the
Morgan Stanley
Offers Wisconsin
000
4%%
101.265%
interest to
accrued
4.80% to maturity.
which are due
about
The
priced at
debentures,
and
at
group
of
which
100.479%
company,
Corporation,
Chairman; Robert M. Clark, Blunt
Ellis
&
Wallace
Simmons;
D.
the
named
Johnson, Farwell, Chapman & Co.;
and
William
S.
Morrison, Jr.,
wholly-owned Harris Trust & Savings Bank.
coupon.
The
Securities
Webster
com¬
petitive sale yesterday on its bid
4%%
Lawver,
Golf: Robert. 3L Meyers, Stone &
May 1, 1995, were awarded to the
Stanley
L.
Inc.
debentures,
Morgan
Wil¬
Goodbody & Corp.;
A. C. Allyn &
Co.; Orville H. Strong, First Na¬
tional; Bank;
Robert J. Taaffe,
McDougal & Congdon; Charles S.
Werner, Shearson, Hammill & Co.;
William1 F. White, Blyth & Co.,
John
May 11 a new issue of $20,000,Wisconsin Telephone Co. 35-
year
E.
Jr.,
Kares,
Stanley & Co. and asso¬
public sale
ciates have offered for
on
Robert
Jr.,
Goodbody
&
Co.,
Chairman; Samuel M. Duva, Rey¬
nolds & Co.; William D. Hilton,
First Boston Corporation; John F.
liams,
'
Telephone Debens.
Morgan
are:
Arrangements:
a
subsidiary of American Telephone
and Telegraph Co., will apply the
proceeds from the sale toward re¬
payment of advances from the
parent company and used prin¬
cipally
for
construction.
These
G.
Charles
Baseball:
Wm. H.
Scheuer,
Tegtmeyer & Co., Chair¬
Hintz, A. G.
Incorporated;
Richard B. Walbert, Blyth & Co.,
Inc.;
Roland
C. White,' Harris
advances are expected to approxi¬ Trust & Savings Bank; Harry J.
mate $20,300,000 at the time the Wilson, Harry J. Wilson & Co.
The
to
from
106.765%
the
to
subject
A.
Co.,
Bacon, Whipple & Co.,
Chairman; Walter A. Hintz, A. G.
principal Becker & Co., Incorporated.
are
prices
at
&
Lunch-Dinner: Andrew D.
debentures
redemption
Walter
Becker
received.
are
new
man;
Buchan,
ranging
amount.
Trophies: Harry C. Hall, The
1959, Wisconsin Illinois Company, Chairman; Tad
Telephone had a funded debt of I. Haviland, Halsey Stuart & Co.,
$30,000,000. There were also out¬ Inc.; O. H. Heighway, Hornblower
■' ■
v.
standing on that date 10,750,000 & Weeks.
of
shares
Dec.
o£^
31,
of
stock
common
pat.
;
$20
■"V;V
*
Mr.
a
William
Senior
state charter
B.
Hall
was
Green
pany,
to
Bank
and
be effective
of
was
an¬
with adjacent areas.
31, last, the company had
1,096,764 telephones in service, of
which
the
The
Public
announced
*
Bank,
that
*
45%,
located
are
area
in
of Milwau¬
Detroit,
H.
f.
Mich,
Ver--
Chapman & Co.; and William
M.
Witter, Dean Witter & Co.
Investments: Eugene C. Travis,
Harriman Ripley & Co. Incorpo¬
rated, "Chairman;
Clayton
F.
Brown, Northern Trust Company;
James
DeCantillon,
Continental
Illinois
v. V'
National
&
Bank
Trust
Company; v Thomas
L.
Kevin,
Glore, Forgan & Co.; D. Throop
company in 1959 were $121,848,818
Vaughan, City National Bank ^
and
total income before income
Trust Company.
deductions was $20,226,322.
This
Dividends:
Jay
Simon,City
compared with $111,074,559 and National Bank
& Trust Company,
.
Total operating
of the
revenues
„
$17,719,453 in 1958.
Chairman; Matthew J. Hickey, III,
Hickey & Co.; James L. Jeffers,
Stifel, Nicholaus & Co. Incorpo¬
Detroit Bond Men
Detroit
have
been
Annual
The
Essex
announces
rated; and Roland C. White,
Trust &
that
plans
for
their
completed
Spring Golf Party.
event
Golf
will
and
be
held
County
June
•.
,■
William
about
metropolitan
kee.
Essex, Ontario, Can.,
3, 1960. Guests
Bank.
*
*
Bay
DETROIT, Mich.—The Bond Club
The
Com¬
Joseph M. Dodge,
the
and
elected
April 26,
May l,.it
nounced by Mr.
Chairman
on
Milwaukee
Madison, Racine and
of
Trust
Detroit, Mich.,
as
On Dec.
of
Detroit
of
area
To Hold Outing
*}
Vice-President
politan
such cities
date
of Harris Trust and Savings Bank.
.
past
Corporation.
and
:
Bean
Honolulu,
creased
greens
system will be used.
of
Hawaii,
Hawaii,
send
.
Entertainment: 'John
A. Orb,
; Merrill Lynch, Pierce^ Fenner &
the Chicago National Bank, v" The company's service territory Smith,
Incorporated, /Chairman;
C.
Chicago, III., was formally ap¬ in Wisconsin includes the metro¬ Francis
Farwell,
Farwell,
merger
*
H.
banker,
April 30.
York
State
*
who retired
The
National
will
(four
William
Bank
National
First
The
As
May 5.
ing been given earlier this week.
physical consolidation of the
*
filed
Chicago,
Myers succeeds Ronald M.
The
on
par
of
;■
Combined
Trust
Ithaca, N. Y.
pany,
proval
Company
announced
was
Kimball
*
County
Trust
Mr.
'
Company
of Southern New York
Inc.,
dollars) to Robert L.
Meyers, Stone & Webster Securi¬
K.B.E., M.C., has been appointed
k Director of the Bank of Montreal,
Montreal,
Canada,
it was
an¬
nounced May 10.
proceeds
with
V
Midland
Marine
new
center
and title of "Union National Bank
joined
-
*
York,
charter
111.,
*
Bank
which
was
1784,
will
open
a
the
under
assignment at the 42 Oak Avenue
banking office.
York,"
American
effec¬
consolidation
The
23.
and
Trust
was mana¬
and
tournament- should
fee
tiesr
consolidated
Continental Illinois National Bank
New
previously
$60,000
Mount
stock of
fice in 1956 and will continue his
Mr. Gabriel joined Bankers
Trust
of
Union,
common
in-charge of NBW's Tuckahoe of¬
land
1957. He
Mount
Union, Pa., with
the two banks in
appointed officer-
Trust Company of
in
of
N.
Company
Westchester
by the Bankers
Trust Company, New York. Both
formerly
were
Assistant VicePresidents. Assigned to the bank's
international banking department,
was
Bank
Vice-President
*
John Keat to Vice-Presidents
Trust
N.
Bank
Assistant
same
Promotion of Jean-Pierre Gabriel
and
stock
000, divided into 24,600 shares of
Bank
H
*
*
Hunt¬
common
1923 with the First Na¬
in
tional
Tompkins
Heilshorn,
W.
John
Huntingdon,
don," with capital stock of $246,-
career
He
Trust
and
his banking
Gollow
;
*
*
rA"'
Frank
Co.,
Blyth :&
bert,
Hume,
Nutcombe
Hubert
Sir
yield
*
Bank
with
effected
India.
*
yf
was
1954.
*
Pa.,
White Plains, N. Y. was announced
the
New York
Bank
Company
ingdon,
April
an
has
of
Bank
National
*
*
*
Chiang
*
National
tive
of
Vice-President in 1957.
from
increased
of $175,000; and The First National
Vice-President
a
of
was
Westchester,
Mr.
Second Vice-President
H.
Bank
by Ralph T. Tyner, Jr.. Chairman,
and Harold J. Marshall, President.
spent in the international depart¬
ment has served
exclusively in
the trust area. He was made a
Robert
as
stock
of
the
Burlington,
Bank
Jersey
the
stock,
new
$437,500 to $562,500 effective April
27. (Number of shares outstand¬
ing—22,500, par value $25.)
Carleton
«
of
appointment
National
the Bank in
for two years
Mr. Henning joined
1919
*
*
advanced
was
New
of
capital
Mechanics
•
Savings
Club.
Municipal teams. Richard B. Wal-
$25,000 was converted
into a state bank under the title
Minatare
State
Bank, Minatare,
of
stock
years.
'V-V
sale
the
common
Trustee.
a
as
President for
*
N. Y. elected
Assistant Trust Officer.
as an
to Assistant
Vice-President
in
1931
and
to
Vice-President in 1942.
He
*
Ridgewood
Harloff
S.
thirty
of
Westfield,
of
been
had
£
Union
Brooklyn,
the
joined
he
than
State
Bank and
Peoples
Company
/
*
Presidents of the Bank.
a
$20.)
head
as
the
which
By
as¬
National
when
■*
*
♦
Neb., with capital
tare, Minatare,
last
Vice-Presidency
the
Trust
more
York.
He
directors.
of
board
its
September
high-level changes in its trust
The common capital stock of the
department, effective June 1.
J.
Bryson
Aird will become Lafayette National Bank of Brook¬
head of the agency administration lyn in New York, New York was
from
$1,800,000
to
division, which encompasses stock increased
transfer, registration and corpo¬ $2,000,000 by the sale of new stock
rate agency administration. Arthur effective
April 27. (Number of
F.
Henning, who has been Mr. shares outstanding — 100,000, par
Aird's
New Jersey, and a member
beth,
sumed
McRae
Vice-President in
was
charge of the Westfield branch of
the National State Bank of Eliza¬
New
the Bank in
April 12.
Featured will be baseball game
between
the
Corporation
and
Knoll wood
years,
1930, became a Vice-President in
1942 and Executive Vice-President
Mr.
Bank,
announced two
has
McRae joined
Mr.
and a
banker
a
civic leader here for nearly forty
York, died May 6 at the age of 54.
Manhattan
York
New
C.
Vice-
Roderick McRae, Executive
President -of
the Bank
of
*
*
*
Chase
Albert
by
Rost,
L.
Mr. Rost
George E. Kruger
appointed mining geologist in
petroleum department.
The
value $20.)
par
Henry
ternational Department.
ties department.
the
50,000,
ap¬
Simmonds, Jr., Chairman. He will
be associated with the Bank's In¬
Chase National Bank in 1927, was
was
capital stock
from
$1,000,000
effective
April
25.
(Number of shares outstanding—
York, according to
New
announcement
an
been
has
National Bank of Mina-
The First
Brit-:, Harry H. Finlay. The bank has a
capital of $500,000 and a surplus
$900,000 to of $250,000.
Vice-President of The
a
of
Bank
Zevallos
R.
pointed
CHICAGO, 111.—The Bond Club of
Chicago will hold its 47th annual
field
day on June
3rd at the
its common
Conn., increased
ain,
period.
Victor
to
Vice-President.
Assistant
Mr.
promoted
was
merger,
promoted to Assistant Vicewas
W. Lee Harden,
former personnel officer.
President
Britain National Bank, New
an
as
Vice-President.
ant
.
be
joined the Bank of
the Manhattan Company in 1950.
Chicago Bond Club
Annual Field Day
promoted
Assistant Cashier to Assist-
Herbc-rt L*. Bobke was
,
Freedomland
of
promoted from Assistant
,
be
Since the "Little Old New
Mr. Andrews
staff
Thursday, May 12, 1960
captain the Corporates, and Walter
he became Vice-.
A.
Hintz, A. G. Becker & Go.
President and Treasurer. In 1915 Neb., effective March 19.
t h e
Municipals.
'* '
*
* ' ■
/''Y Incorporated,
he became Secretary and manag¬ '[ l
Harry J. Wilson, Harry J. Wilson
ing officer of the Casco Mercan¬ "The National Bank of St. Peters-*
and
Company,
and
Roland C.
tile
Trust
Company,
Portland, burg," • St. Petersburg, Pinellas
White, Harris Trust & Savings
Maine.
' .b:,''>■■;"b • -■
„! County, Fla. was issued a charter
Bank, will be umpires>
/
on
April 22. The President is
Those wishing to enter the golf
By a stock dividend The New Fred H. Green and the Cashier,
Mass., of which
historical display.
area
banking as a
Bean entered
1898. He served in
two banks before organizing the^
South
Trust
Company,
Boston,
The branch will be a
Bronx.
Executive
1916-19.
the
of
member
a
Council of the ABA in
Mr.
Bank's
. .
Vice-President to' Vice-President.
the Institute and
messenger
Andrews and Frank M.
Bankers
American
was
Contolidationt
Gregory
.
(2054)
Banking,
David V.
Chronicle
Commercial and Financial
The
18
on
are
at
the
Club in
Friday,
invited
and tickets may be obtained from
the
party
Chairman,
Thad
chowski,;of Goodbody & Co.
Obu•
.
Harris
Savings Bank.
Named Director
William
P.
Mackay
elected
to
of
High Point
The
the
board
has been
directors
of
Chemical Co.,
Port -Washington, Long Is¬
land, N. Y., manufacturers of ny¬
lon molding powder, it was an¬
nounced by Roy E.Berg, President.
;
Mr. Mackay heads the invest¬
Inc.,
ment firm, of
of
Mackay & Company,
*
*
1 '
'
Reading, Penna.
Number 5950
191
Volume
.The Commercial and Financial Chronicle
(2055)
19
ADVERTISEMENT
ADVERTISEMENT
UNION
ADVERTISEtoEN'
PACIFIC RAILROAD COMPANY
SIXTY-THIRD ANNUAL REPORT —YEAR ENDED
DECEMBER 31,
REPORT
OF
ON
THE
THE
BOARD
YEAR'S
OF DIRECTORS
•
equipment depreciation, due to acquisition of additional locomotives and
and higher depreciation rates effective in
1959; a rise in locomotive fuel
prices; and less proceeds from sales of scrap material, credited to
operating
cars
0-
'
.■'V.*',.."'':y
V'-V'*.
!;■•* '
.
.-V1*'1
' -.V't."-v.;-,
'.
'*'' '' ■'';
-re
/;"■* ;1
'
.
Board of Directors submits the following report for the Union PacificRailroad Company, including its Leased Lines,* for the
year ended Dec. 31,1959.
The
Operating revenues
(including taxes
Taxes
1958
/
-
lor
retirements
of
was
non-depreciable
fixed property and for fire insurance.
repairs and improvements to freight cars were
although the freight fleet was maintained in satisfactory con¬
dition; only 1.8 per cent of freight cars were unserviceable at the close of the
in
connection
with
also reduced,
Increase ( + )
Decrease (—)
•" '
$515,767,433
$505,215,191
+$10,552,242
$378,741,803
$371,257,945
+$ 7,483,858
76,806,304
69,803,903
income from
on
■'
partially counteracted by substantial
economies accomplished through acquisition of
improved facilities and inno¬
vations in operating and maintenance
methods, and by reductions in expenses
resulting from a decrease in passenger-train miles operated and lower charges
Expenses
CONDENSED STATEMENT OF INCOME
1959
'
expenses.
However, the effect of such increases
STOCKHOLDERS OF UNION PACIFIC RAILROAD COMPANY:
S:^V
•
for
BUSINESS
New York, N. Y., April
28, 1960.
TO
1959
year—about the
same as the corresponding
percentage for 1958.
Way and structures were adequately maintained,* and greater quantities of
rails, ties, and ballast were applied in main track renewals than in the pre¬
vious year, as shown in the tabulation below:
"
.
+
7,002,401
+
2,570,415
Increase ( + ) or
Decrease (—)
Equipment and joint facility rents—net
1959;
23,262,674
20,692,259
*,
Net income from transportation oper¬
ations
$ 36,956,652
Net income from oil and gas operations
$ 43,461,084
19,347,089
13,526,160
24,566,034
14,765,358
$ 69,829,901
$ 82,792,476
—$12,962,575
$
$
4,470,345
539,687
—$
57,047
+
35,556
5,010,032
—$
21,491
Miscellaneous
i
rents
and
Net income from all
$
sources
stock,
common
4,988,541
$
$ 64,841,360
5,218,945
1,239,198
—
—
-
$ 77,782,444
—$12,941,084
on
Notwithstanding this 17%
declared
were
on
per
common
standing share, including
cent decrease in earnings
stock
at
the
rate
same
Ties
increase
extra dividend of 40 cents at the end of the year.
Thus, 59 per cent of the Company's net income after preferred dividends was
declared in dividends to the holders .of, common
stock, compared with 48.4 per
cent in the previous year.
.;.++ +
v +;//+:,vV+V
was no curtailment of
expenditures for improvements to the Company's
transportation properties. In fact,* the aggregate expenditures of $70.1 million
for equipment and other improvements were
$15.8 million greater than in 1958.
Continued expenditures on such a
scale, as pointed out in previous reports, are
essential under present-day conditions to enable the Union Pacific to maintain
and improve its competitive position in the field of
transportation and continue
to provide efficient, up-to-date service.
in
for
OPERATING REVENUES
The increase in Freight revenue
compared with 1958 reflects the net effect of
a 15 per cent increase in
ton-miles of freight carried in the first half of 1959
due to a broad
recovery in general business
5.7
per cent
de¬
cline in the last half caused
chiefly by the 116-day steel strike which started
in July. For the full
year, ton-miles carried showed an increase of only 3.8
per cent with a decrease in average revenue per ton-mile of 1.8
per cent.
The largest revenue increases were in lumber
and plywood, as the result of
greater construction activity; automobiles and parts, reflecting increased pro¬
duction and
sales; chemicals and products, because of improved industrial
demand; vegetables, other than potatoes, principally from Northern-Central
production
substantially
was
greater
than
in
1958;
and
oranges, due chiefly to excellent crops of both Valencia and navel oranges in
California. There were also increases in revenue for a long list of manufactured
products, such as construction materials, petroleum derivatives, household
appliances, machinery,- paper products, etc., not large enough to justify indi¬
and
highways to rail carriers
drivers.
revenue
represents
ume
increased
of 8
per
the
the result of
,'.V;v ;•
Passenger
which
as
number
of
passengers
car
an
allowances
the
resulted
from
Interstate
on
the
cost
of
deductions
Excess of amortization
over
depreciation
Reduction in income taxes—
Betterment
common
As
a
property classified
in
net
stock
income
per
the
Travel in coaches,
Company's total passenger vol¬
cent over
travel.
carried
of
one
1958, but there was a decline
The net effect was a small increase in
mile but
a
in
are
_—
per
share
_____
Decrease
vs.
1958
$8,240,953
8,911,914
$.22
$.21
4,634,196
of
—
ances for tax purposes, there was an increased allowance
jnrl959 for acceler¬
ated depreciation (on property acquired after 1953) in excess of depreciation at
rates
authorized
by the Interstate Commerce Commission, chiefly because of
acquisitions of equipment and other depreciable property.
The
'reduction in income taxes resulting from such accelerated depreciation was
about $3.7 million in 1959 compared with $2.5 million in 1958.
additional
The
sharp
increases in
Federal unemployment
taxes
insurance
and
Federal
chiefly due to increases in the tax rates. The unemploy¬
ment tax rate rose automatically on January 1, 1959, from 2% per cent to the
maximum rate of 3 per cent under the existing law, because of depletion of
the trust fund established for payment of railroad unemployment benefits.
Thereafter, in disregard of unchallengeable evidence showing that the rail¬
roads were urgently in need of reductions in their inequitable tax burdens,
payroll taxes were further increased effective June 1, 1959. The unemployment
tax rate was raised from 3 per cent to 3% per cent, and the retirement tax rate
from 6% per cent to 6% per cent, with rates progressively increasing in future
years. On top of this, both of the increased tax rates were made to apply to
an increased base, that is, to the first $400
of each employe's monthly wages
instead of $350 as theretofore. While employes are taxed at the same rate as
the railroad for the railroad retirement fund, the employes pay no part of the
taxes for the
were
unemployment insurance fund.
The railroad's annual payroll tax
payments for every employe with a monthly wage of $400 or more, have risen
as shown below, due to the payroll tax increases effective in 1959:
Basis
effective in
1958
Effective June 1,
State and county taxes by
1959—..
._
$367.56
388.56
—
504.00
classes, compared with 1958
■
>
,
1, 1959
were as
1959
•
\
property taxes $17,993,741
franchise taxes
1,423,442
658,817
vs.
1958
$284,022
158,779
*
Sales, use, and compensating taxes__
follows:
Increase
Ad valorem and other
Income and
"
'
103,199
$20,076,000
Total
Total taxes
enues,
more
for 1959 were
equivalent to 14.9
per
$546,000
cent of total operating
rev¬
$1,893.41 per employe, and $3.42 per share of common stock or 71 cents
equity of $2.71 per share in net earnings.
than the Common Stockholders'
slight decrease in average
OIL
Commerce
Commission,
and
drastic curtailment
expenses.
.
expenses for the year by $8 million,
• •
The chief other reasons for the increase in
expenses were:
of freight traffic handled and faster
.
.
AND GAS
OPERATIONS
1959
by
the
;
The larger volume
freight train schedules;, expanded pro¬
repairing
Lines
as
details
$17,772,416
9,562,687
4,972,597
1958
$5,772,804
2,102,647
2,075,945
$6,750,701
2,920,612
1,603,895
Increase
Decrease
Per Cent
$6,542,757
18.3
$977,897
817,965
28.0
and
remodeling
diesel
locomotives;
increased
charges
Oregon Short Line Railroad Company, Oregon-Washington Railroad &
Navigation Company, Los Angeles & Salt Lake Railroad Campany, and The St.'Joseph and
Grand Island Railway
Company. Figures' in the Income Account and other tables are stated
on
a
consolidated basis, excluding offsetting accounts between companies.
are:
..
* Federal
.
are
taxes on
included in
income from oil and gas operations,
$9,951,396
$11,275,208
$1,323,812
11.7
$24,566,034
$5,218,945
21.2
$398,878
$356,724
$42,154
11.8
of approximately $5,863,100 in 1959 and $7,327,100 in 1958x
"Taxes" under "Transportation Operations."
labor, fuel, repairs and hauling in connection with drilling, geological
ground, building roads, and certain materials with no salvage value.
t Represents
costs such
as
The decrease in receipts resulted chiefly from
ton and
14.5
29.4
$472,050
$19,347,089
OPERATING EXPENSES
Leased
The
partial offset to the substantial reductions in amortization and other' allow¬
strike by Western truck
important of the factors responsible for the increase in Operating
expenses was the
higher level of wage rates. The wage increases granted in
May and November of 1958, mentioned in last year's report, and a "cost-ofliving" increase of 3 cents per hour effective November 1,. 1959 (making a
weighted average increase over 1958 of 8% cents per hour) inflated operating
*
taxable
in
compared with 1958
1959
Amortization
The most
for
increase
an
Western railroads July 1, 1959.
Agency of its operating
grams
62,681
^7+"77. /.v'
The increase in Express revenue
represents increased receipts from the Rail¬
way Express Agency, chiefly as the result of various rate increases authorized
by
+
decrease in book income), chiefly because of reduced
revenue was due to a greater volume of mail carried and
increase of 5.6 per cent in the rate of compensation for transporting mail,
on
+ 215,725
253,592
'
passenger-mile.
made effective
855,108
v
The increase in Mail
to
3.05
:+•+.>
three-fourths
sleeping
+
■
almost exactly the same as in 1958.
approximately 3
cent in
revenue per
was
about
a
a
taxes
Effective January
concentrates, as the result of strikes in steel and other metal
industries; sorghum grains, primarily because of less shipments by the Govern¬
ment to Pacific Coast points for
storage; potatoes from Idaho, due chiefly to
increased competition from other States; and less than carload
freight, chiefly
because a substantial volume of such traffic in the previous year was diverted
from the
income
shown below:
The commodities with the
largest decreases in revenue were iron ore and nonores
,150.58
connection with such amortization allowances in 1959
vidual comments, but representing in the aggregate a substantial amount.
ferrous
Federal
amortization
retirement taxes
where
1.43
"emergency facilities" by the Office of Defense Mobilization.
There
California
4.48
-
—
(track miles)
(number)
(cubic yards)
(notwithstanding
deduction
an
a
40.23
allowances for various items deductible for tax purposes which are not reflected
in the income statement.
The principal item in this category was the smaller
per
conditions, and
+
TAXES
The
share, dividends
in 1958—$1.60 per out¬
as
(track miles)
Ballast
income
preferred stock, amounted to only $2.71 per share of
58 cents less per share than in the previous year.
or
rails
vs. 1958
110.35
—$ 6,504,432
As the result of declines in all three of the
major categories of income—trans¬
portation, oil and gas operations, and investments and other sources—net earn¬
ings after dividends
(track miles)
Total rails
575,243
Total fixed and other charges
rails
Second-hand
4,413,298
charges.
New
work, clearing
declining production in Wilming¬
Rangely fields and a decrease of about 13 per cent in the average price
Most of the decrease in production
received for oil sold in Wilmington field.
expenses
occurred in Wilmington field. The decrease in taxes reflects lower
field and credit adjustments of taxes for prior
ad valorem taxes in Wilmington
years
in Rangely field.
The increase in intangible drilling and development
drilling activity in Wyoming areas, partially off¬
costs resulted from increased
set
by reduced drilling in Wilmington and Pierce fields.
20
•***
remarks
few
SECURITY SALESMAN'S
CORNER
knew
both
and
BY JOHN DUTTON
that
found
we
in
someone
him
he would
how
me
certain
that the stones he
worth
VV'<
(Hi.**
'
'«
You
heard
have
asked
so
the
that Hotwire Electronics common,
do you think
it's time to sell it?"
And
the
anxiously
answer
to
that
one
he
what
make
bought
paid.
His
BY JOHN
in
and
ciiiu
the
the
uic
dark
answerer
ctuawciei
as
eta
not
am
j-
sound
the
before
as
^
A
,
v«v
-
Are People
:
I
is
selling
35,"
at
says
broker who wants to appear
he
knows
least
little
a
about
„;evaluating
low
rate
research
and
trying
to
w
investment
will
earnings
this
cents
spending
search
only
be
at
about
dollar
a
they
share on
a
they
__
T
re-
days
ing." By this time the customer
already becoming impatient,
i
is
has
He
heard
all
that
before.
agreement
valuation
brains,
on
and
once
so
again, for the time being, everyone
is
happy even if no one
knows
what
they
it is all about.
mean
what
or
\
8
'
stock
all
been
lesser number
of
of
individuals
and
institutions actually invest for income
and longer term appreciation.
The
Federal
Government,
with its nonsensical high bracket
income
taxes,
and the
capital
gains tax, has taken all of the
common
for
per
income
of
the
for
income
$10,000
out
sense
investing
man
brackets.
taxable
stocks
So.
the
m
and up
year
are
frozen in at high levels, the floating
supply becomes smaller
the
price
which,.
levels
are
.
of
and
stocks
those
popular
are
con-
tmuously
Pushed
higher
higher. Cash flow becomes a
rationalization
for
income growth
but wished
lzed
had
;
4-
I
time
some
this—it
of people
lot
a
x
spent a few
Miami Beach.
on
Saturday
please
a
are
buying certain stocks not because
th
they are worth,
what
know
^ because this joy
T
—
.
J
ride they are
nf
'
n
in
The intermediate-term govern¬
syndicates in
being cleaned out by
ment bonds, according to advices,
have
been
moving into strong
with
many
stale
cases
this
decrease
the
in
stocks
retranslated
the
or
book.
It's Not So Difficult to
a
gift
the
order
to
two and much applause,
began to warm up
'
or
crowd
$» 875
oer
P
that the discount rate may
next to go
lower.
also
be
\
n
questions. Bidding
low • priced
items.
people
into
came
auctioneer
one
about
the
took
hour
an
They
up
when
got
introduction
More
room.
First
over.'
After
master
called
he
began
another,
about 9:30 the old
the
Doctor
with
room
He
talked
philosophy,
his
well
was
them
warmed
then
stepped
him
through
fined
he
up
what's
wrong
with the modern
he did when
generation, what
boy, and he asked,
a
"Do you like the auctioneer?" and
an
together
gut
it
than
wasn't
that
loud
such as storm windows, outdoor
furniture, truck bodies and trail-
Prim.e windows, house trailers, fencing grating, appliances,
mond
bonded,
eer?"
was
in
here
had
to
belonged
star
the
to
a
in
finer*
nn
it
now
is
it.
And
mood.
w
time
ladies
crowd
"You're
dead
Ann
the
this
By
the
vacation
a
.
.
tion of tbe current financing, outstanding capitalization of the
c°mPany will consist of $128,000
?L,6%,.1eenenntureS
Nov'.t1,'
"W09 shares of capital
\963,;
r
stock' class A> and 91,000 shares
of cap,ital stock, class B.
could
be the
The prime rate
vulnerable.
surplus
4
y?
:
;
m*,
to
if
men
llloLIIlCUl vyU.
T?nr>mnrl in T innnln
let
her
Assistant
Secre-
urer.
since
what he
wants
do you say
when the
s
stock
is
moving"
buying is stronger than
eKecUve/epePpeingr0Punganthe
stock
siolk
speculator^
speculators,
there
xnere
are
are
alai-
KPa°4PyToue are'seeing
diung.
so
inat s
wny
you
are
seeing
many new issues of Uttie three
dollar
stock
today quickly
over-
to
hear.
So
what
been
princi-
the
con-
R
I
am
under
$1,300
ete'^One
and
for
$2,250.
^ V 7^8
who
S
with h?=
his
another
ring.sold for
able
but
which
the
has
boom
such
man
!_•
size
demand
effect
marked
a
rates
Accordingly, with the inventory
been evidences of
dation—this
at my hotel. After
(Special to The FlMAHdAL Chroniciz)
Mr. Maver
a
ord
rec-
April
Presently offering the remaining
unsubscribed shares at $2 per
share.
The
company
was
incorporated
under
North
Carolina
law
need Aug. 19, 1959, to engage in
that the
on
the
business
of
operating
a
motor
carrying of these goods has been speedway and to conduct, or lease
less than was expected. This has its
premises to others for the purto
credit
take
of
care
the
in
for those who
making loans.<4;
It
is
rather
of
course
are
^
;
;,
evident
interested
^
^
^
that
the
pose
of
events,
U. S.
approximately
conducting other
The Speedway is located
Highway
No.
10
north
29,
on
of the City of
Charlotte. >On May 29,r 1960, the
miles
business is
going to be company proposes to stage it's
a
very powerful force in deter- first "World 600" stock car race,
mining the future trend of inter- which it proposes to make an anest rates and
is. uncertain
long
as
as
this trend
nual
event.
This
will
be
600
a
the
monetary au- mile race, which represents, so
thorities are quite likely to keep far as it is known to the officers
money conditions in such a state of the company, the longest disthat they will be helpful to the tance stock car race
staged on a
:
"wt~
n
closed
r
i
or
it
comes
sharply
funds,
let
who
has
hppn
^estS 'business "to?
was
Staats
formerlv with
&
Weedon & Co.
Co
and
in
is
not
the
even
distinguished from
^
likely
supply
though
'
to
of
it
mean
that
the
policy of
"easy" restriction is being super¬
seded by one which will
tend to
m°S A^GEhLES' Calif.-Ralph E.
WagILd/6 &mDurstC1 I^c Wfi26
R.
for each three shares held of
inventory liqui-
means
will
Wagenseller & Durst
years
Inc.
and
build-up not reaching the proportions which had been predicted—
and in some instances there have
loanable
Sto
Te the New York stock Exchange.
(who
T8* ^
young
M.vm,
-SoSg
betore
before the sale got under
way.)
The next
morning 1 met the
Speedway,
12, 1960; these rights
credit ap- expired on May 6.
66,134 shares
pears to have gone the way of have
been sold through May 6
all flesh for the time
being at according to Morrison & Co., Inc.,
least.
of
Charlotte, N. Car., who are
interest
on
aid in the
iha
bolstering of the
The
omy.
conditions,
tion
to
uptrend.
all
CrowelY
'
such
posi-
legitimate
Wh'Ch ShoUld be
...
many
William
econ-
banks, * under
should be in a
meet
w
wife and little girl
Motor
oval-shaped course, as
a road or airport
course,
anywhere ' in
the
A reduction in the discount rate world, i This
event
which
will
E- "layer Joins
$50,000
1 h3Ve tW0 bid® ^is
hands ete
V
Charlotte
much offered to the holders of its cornmore weight when it will come to
mon stock (par $1) the right to
making changes in the discount subscribe for 304,280 shares of
rate.
The
demand for loanable common stock at a price of $2 per
funds is expected to remain size- share, in the ratio of two shares
increase
folks, what do I hear?
Remember
riendf nr'^ert fnlv ^"innv dlvt"
a
have
carry
economy.
love
you
ditions is believed to
able
-
Tallman,
rate
of economic
been responsible in some measure
a bit more credit
being avail-
LINCOLN, Neb.—Tinstman & Co.,
Inc. has been formed with offices
in t e stuart Building to engage
*n a securities business. Officers
are Dale C' Tinstman> President
?nd Treasurer; Gene H. Tallman,
^ice-President an d Secretary;
A*
Bank
for
I OrmeQ 111 ljinCOlll
tnii
Central
when
When
funds
XvIgllLD Wllt/It/U.
the
1*711,
dends!
out-of-
t
Reserve Will Keep Brakes On
readily accepted
by many
people who have learned that sex
appeal in a stock in such times
smaller
.
uncertain trend
for
t
auction-
said
we
buying
a
square feet in Winton N. C.
^or the year 1959 the comPany
n
sa
0 $6,220,096 and net
*ncome
$91/66, equal to 50 cents
per capital share- Upon comple-
another
the
were
on
WPar
shown
were
"Yes"
we
and others. The
is completing a new
plant haviag approximately 24,000
.
Tin ct mart Pa
did
we
stin
you
time
for
iarge
estate
He
was
he had his guarantees.
a
«j)o
enough
long before two dia-
rjngs
from
"Yes"
boats
'
company
could do better
we
and
wasn't
answered
we
him. He knew
know
are
the
town banks the main buyers of
these issues.
It is reported that
the 43/4s, the 47/ss, the 5s and the
refunding 4%s have been the ones
in which these institutions with
The May 15
ot tn,e 11U>UUU snares ottered,
50'000 shares are bemg sold foJ
the account of the company and
A shill entered and he asked ers'
wife
Understand This
with
hands
-
movie
either
collateral
loaning rate. The better tone and
feeling in the money and capital
markets brings forth the opinions
Charlotte Motor
famous
and
/
■-
.
Current Buying Trends
.
,
new
overpricing,
as
ana
lasrs_ A' at a pnce 01 $
'
obligations, such
corporates and tax-exempt bonds,
were also helped by this develop-
ment,
shaies of New Jersey Aluminum
nrjre
The immediate
improved prices for all
was
Non-Federal
sociates onJVlay 10 offered 110,000
at
powers
government issues, the short, the
Extrusion Co., Inc. capitial stock,
A
market specialists that the
that be will still keep a
fairly tight rein on the money
market in spite of the beliefs that
there is a tendency to move in
the direction of a modest amount
of ease because of the questionable economic conditions,
money
intermediates and the long terms,
OOn
,
their customers for loans
by stock collateral, from
5 %'% to 5% had a favorable influence on both the money
and
charge
secured
effect
#
_
commercial
the
which
to them in one capital markets.
Allinilllllin
#
in the rate ment bonds in addition to making
banks loans. It is the opinion of most
Last week's reduction
refunding operation PaBy interested in.
was a successful one, with the atThe long-term end of the govmy
13-year old daughter I altrition
of
lowed her and her mother to in$646,000,000, or about ernment list continues to be on the
10%,
pretty much in line with thin side so that quotations of
Veigle me into spending several 60>°°? sha'®s for ^ accounts of
expectations. This probably means these issues are moved about very
hours sitting in an auction room certaln selling stockholders,
there should be no further trips readily
where three high pressure artists
by the so-called "proNet proceeds from the sale of
for the Treasury into the
0f the
open fessional" element in the market,
auctioneering trade held its 50,000 shares of stock will be
market
for
this
fiscal
year.
money
Nonetheless,
it is indicated that
sway. This was supposedly for my added
to the, company's general
Tk*
daughter's entertainment and ed- funds and will be available for
*1
i
the new m°ney bond, the 4%.%
Cut in Discount Rate likely
due
i98s> has als0 been going
ucation
as
well
as
my
wife's various corporate purposes, inThe discount rate of the Federal into investment
hands, with pripleasure. Funny how women can eluding working capital and the
Reserve Banks, in the opinion of vate pension funds and charitable
sit through these things and get a payment
of
outstanding
bank
not a few money market special- organizations
giving public penbig kick out of them even if they loans.
ists, is quite likely to be reduced sion
funds
competition
in
the
don't buy.
New Jersey Aluminum Extruin the not distant future.
It is purchase of this bond. Even with
As usual, I was much interested sion Co., Inc. is engaged exclubelieved
that
the ,^4%:^ Central the price at about the 100
level,
in the techniques used by these sively in the manufacture of aluBank rate, which is substantially this
has
brought
certain
new
skillful hucksters even though I minum extrusions.
Principal of- above the bill rate, and which has buyers into the issue.
have
watched this procedure fices of the company are located
not been a penalty rate here for
,
many
times.
They
started
at in New Brunswick, N.
J. The a long time, will be decreased to
jr
i
eight o'clock. They told stories, company produces'various aluThere were several children in minum extruded shapes, including
the audience and the kids were standard
and
custom-designed bridge. The
persistent spread be- SnPOfl WQT7"
T"HP
asked
to
come
up
and
recite, shapes, pipe and tubing, for its tween the bill rate and the dis- kJJJCt/U. W cXy 9 iUv.
After a pat on the head,
some customers
who fabricate extru- count rate is not the only reason
TJi/-j»"U4-q Off/3
very complimentary remarks, and sions into a number of products,
given for the expected decline in
and
Gne
think they no longer can read
someone
T
hotel in
a
crowd.
not yet material-
evaluate
to
j
and
hoped for is
capitalized years in advance; and
the people who are using the rule
book
at
With
kinds
fads—people buy stock to
a
profit (in the main). A
make
stocks?Y°Just
it
weekend
some
™
have
.•
me
4
bfhlan,.!LdHUTi Yle lU,£i
There
to do with
.
to
in
1932 it was the beer stocks—they
called
them
beverage stocks in
those
days—this made it sound
a
little more respectable. We've
ha<Ft!ie cheifiit&l stock craze, the
drug stock craze, and believe it
or not, when we were all not so
much younger, there was a time
that all you had to do to make
money was to buy the oils and
hold
them.
Depletion allowance
of
27}&%
(still
have
it)
free
storage of valuable property in
mother earth, inflation protection
(so help me) and until that fad
wore
out, and Africa and South
Today the popular craze is
buy space age stocks. Back
?, L
i
evening
finally end up
with
an
that you can't put a
They
,
Last
exspens-
are
or
diction to science stocks.
are
„u„ro
triple
during this
current phase of the public's ad-
30
year/but
which
double
the
"And
v
to
seems
on seems to appeal
way or another.
,
CHIPPENJR.
T.
wife.".
my
will in the long run pursue a Qf^Tr OffprPfl
much
safer course with
their QLUL/Iy VylldC/U.
capital even if they may not
the
as if
something
Hotwire,
for
bought them
#
stock
was,
What has all this got
M
People Do It Because They
■
both the
leave
to
seems
questioner
quesuuiiei
much
awaited
is always
the question
i
subscribed and they move almost
immediately to five or to ten
(or more). -Who wants to buy
stock in a buggy-whip company?
question
times, "How about
many
I
Why Do People Buy?
s
Thursday, May 12, 1960
vacation. What's the difference.
on
i
t
.
Our Reporter on
"I really don't care,
they looked alright to me, I am
reply
.
,
we
common
telling
were
W
.
friendly with him.
if he would mind
became
I
asked
I
:>
Chronicle
The Commercial and Financial
(2056)
.
.
bor-
much
they
in
will
the
be
event
in
racing.
American
car
Garat Witli Polom'tza
^arat Wltll roionitza
(Special to the financial chronicle)
LOS ANGELES, Calif.
—
Garat has become associated
,
-
,
Tony
with
"West Seventh Street, members of
•*.
■4.
Pacific Coast Stock Exchang
of funds that He was formerly an
buyers of govern- Arthur B. Hogan, Inc.
way
stock
-
on the Harry C. Polonitza & Co., 210
However, it is not expected that
institutions will have so
these
$100,000 purse is the largest amount of money for any one
carry a
officer
•
of
Volume
Number 5950
191
.
.
.
The Commercial and
Financial Chronicle
(2057)
21
>
,
TEXAS EASTERN
^^^^MPANSMISSI^vfcpRORATlON;
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MORE
ENERGY...
f>
IN
MORE
'
-
FORMS...
■:FOR AMERICA'S
^5SSJJ:
GROWING NEED
Cooking with natural
gas
piped via Texas Eastern is
already standard practice in millions of homes. And the
number
depend
keeps growing. As
on gas,
more
and
more
homes
the importance of Texas Eastern's pipe-
-tine system increases.!.. .».'
'
.:
is zoom-
ad
ing..i
role
as
•
mm
v
'*•
v
Pipeliner of Energy to the Nation.
*"
; r
as
it
Financial Chronicle
The Commercial and
22
.
.
.
AS WE SEE IT
or
business.
American
of
operations
to free
;
At What Cost?
What the
set our
we
thus
imposed upon private business, no one can say with preci¬
sion, but there can be not the slightest doubt that it is all
partial measure of the direct cost
is found in the non-military payrolls of government, say
in 1958 (the latest year data are at the moment available)
as
compared with 1929. In the earlier year, there were a
little over 34,000,000 men working for wages and salaries
in private business in this country. Government, includ¬
ing government enterprises but excluding the military
establishment, employed 3,287,000 men and women. By
1958 private business employed some 47,700,000 (a good
many of them engaged largely if not solely in preparing
reports and other documents for government) while gov¬
ernment (excluding military payrolls) employed 8,122,000.
Thus we see that in 1929 for every 100 drawing pay from
private business, something less than 10 worked for gov¬
ernment; in 1958 about 17 drew wages or salaries from
government for every 100 employed in private business.
The
essential fact is found when, not
same
the
num¬
profitable than ordinary. In
insurance can be
industrial
Continued
employed but the total compensation of employes is
analyzed. In 1929 private business paid out some $46 bil¬
lion in wages and salaries and the like. Government's bill
was $5.1 billion, or about 11% of that of private business.
1958, the^figures were $210.1 billion and $37.0 billion w
—the
figure being about 18% of that of
private business. The total for government at the later
date was roughly seven times that of the earlier year;
that of private business roughly four and a half times the
earlier figure. When the harassment, the delays, the ex¬
pense, and the frustrations suffered by business of vir¬
tually all types as a result of such government activities
are added to these costs—well,
every businessman knows
that the figure would be so high that the wonder is that
a
reasonable profit is ever earned—and no account has
government
been taken
data
of,.the cost of preparing all the records and
required by the Treasury Department at income tax
♦
i
and
in
taken
fact
fViiQ
p^rnin?^
like
this"
The
important
as
what has
as
place. The
younger generation whose life-span does
through the period since, say the turn of the
century, is in all too many instances not aware of what
has taken place in our
thinking concerning business and
national affairs., The original
regulatory agencies were :
designed, let it be recalled, merely to apply to situations
where, in the nature of the case, competition could not
function in an effective
way. The railroads were the first
to get public attention and
public action. Of course, there
was even then an element of
competition among the rail¬
roads of the country, but in
large sections of their lines
such roads enjoyed a virtual
monopoly. The same prin¬
ciple is apparent among a number of the utility enter¬
prises. It would, for example, be inordinately costly and
excessively clumsy to have tv/o telephone companies
operating in the same area. These earlier agencies were
set up to do what
competition would in ordinary circum¬
stances do in other
types of business.
1
.
.
much
in
increases
force
multiplies
analyst
a-year,
profit
this
Parrinlrc
8
_/
analyst assumes
the life of
over
will
policy
the
pohcy
if
Therefore,
ordinary
anallst
thousand by
SrS'i'+u
he
sand
in-
$15. The reason
is that $500
adjustment.
this
takes
earnings
as
in that
Keynes and
forth
their
garded
But
to
others of the
some
views—when
keeping business
ance
on
way
same
date—after
Mr/
turn of mind had set
competition
was
no
longer
that in
some
utmost the
areas
at least
away
began to take
ance
to
force
in
add
ings
be
can
mately wise to
create incentives
burdens
and
there
economy functioned
in
as
here, place discouraging
general try to
see
to
it
that the
the politicians think it should. It
to such notions, that the
great crop of
New Deal
agencies and laws came into being, and if there
is
response
clear realization in
influential circles
that
these
new
per
to
year
For
often
condition
decide
applies
per
-
^
$7
be
seen
It
can
that
the
future
In
a
from
"present
earnings
way,
Table
value"
of
the
of
III
the
insurance
insurance^ and
j
a
an
is
not
-
not
?yr.e
.uls*:? 1S
•
or
Estimated Profits
II
;
the
Table II)
Value at 6%
1
d$5.50
d$5.50
on
a
2
4
Ordinary Policy Assuming
Typical Lapse Experience '
Profit
Profit
per
$1,000
per
'
,
Insurance
.
j
Year
...
—..
Issued
Year
/
d$5.50
Issued
...
3
,4
5
...
...
6
7
8
9
10
11
...
9
12
■; 13
1.35
14
2.00
14
1.25
15
1.90
15
16
2.00
2.20
2.15
•
17
'
2.05
17
2.00
18
19
2.05
20
2.15
'
—
——
—
—
1.60
1.42
1.40
1.18
—
-v—
—
—
—
thinking
to
that
An Example: Since
weeks
in
the
dustrial
insurance
earning 10%
surance.
The
adjustment which
analysts apply to the book value
and earnings of an industrial life
If
the
company
1.02
0.98
2.00
0.88
1.90
0.79
2.00
0.79
based on
are
approach.
"valuation"
a
weeklv
"52
of
debit"
valid, the analyst will add one
full
year's
industrial
premium
volume (52 weeks worth) to book
value in arriving at
"adjusted"
book value. In adjusting earnings
book
industrial
a
year
business
the
worth"
of
on
same
the
worth at least
the "valuation"
books.
its
token
by the amount of
19
2.05
0.68
such increase is added to
20
2.15
0.67
earnings.
Total
$14.78
"net
increases
the increase in
0.76
premium
the
company
0.70
——
(over
volume).
company
is
value plus
the
By
earnings
to
in
theory here is partly based
belief that in liquidation,
the
the
of
add
prior year's
The
on
will
increase
2.05
—
to
be
2.00
—
times
assumed
is
the
2.10
is
This
is
the
type of thinking
involved in valuing industrial in¬
1.30
2.05
in¬
of premium volume
1.44
1.11
an
company
each year, after taxes, then a price
"52 times the debit" would repre¬
sent a price "ten times earnings."
entire
1.20
52
a
year's premium volume. If
analyst
2.10
are
price "52
times
the
weekly debit" would
be the same as paying one full
premium volume in
2.15
is
the instock on
there
year,
the
'
by
vestor when he values a
a "times earnings" basis.
1.60
.
involved
used
2.40
2.20
—
similar
the
2.30
—
profit
The
times the debit,
debit, depending
potential in the
1.76
—•
—
the
on
the
2.50
——
——
times
1.07
—
V/"
company
"values"
another it thinks in
0.93
—
expenses
v
value "times the debit."
1.25
—
—.
of
attractive
example, 40
debit.
...
of
a
1.35
—
16
18
.
—
10
11
2.05
2.30
d deficit
8
2.10
...-.
*
—-J
13
...
...
7
•12
2.40
-
$2.10
—-1
1.40
'
—
6
1.60
2.50
—
5
$1,000
,
Insurance
—
3
Whole Life
debit
60
or
■Try.
.
one
terms of
.
/
When
this
Year
...
debit
a
more
reducing - overhead
both.
or
insurance
Profit per
r
TABLE
course,
if
For
$1,000 Insurance Discounted
Issued (From
to Present
'
thou'
JiJELHi? -225L
Of
size becomes
any
worth
-jjj
coincidence
Hnio °tnFas
of
°
i
*
/
it is just
the
it can be integrated ' into the
acquiring company's debit to ad¬
adjust-, vantage either by building up the
size of the resulting average debit
$5 per
what different from ordinary life
insurance. Lapse experience in
industrial is considerably higher
than Tor ordinary under usual
con<ditions. Also, it tends to be
III
If
and
thousand is often used
per
insurance
anything.
T
Table
worth.
is
small
unprofitable,
acquiring company will pay
the
'
adjusted
in
it
what
is
profitable.
v
earnings
done
the
different.
of the insur-. by taking a percentage, 10% or
ance
policy. For. example, if we s0, of the increase in
unearned
look
at
the
type of. insurance Premium reserves and
adding it
which we discussed in Table II, to
earnings and of the total unwe
could
discount
each
year's earned
premium
reserves
and
profit to present value at, say 6%,
adding it to book value
and then add up all the
resulting
:
figures This would give us the Valuation of
Industrial Insurance
"present
value"
of
the
future
•
earnings on this type of business. "
insurance is soraeis
of
less than if the debit is large and
....
the future
"debit"
the
of
to be acquired and will
only
to
ordinary
insurance.
The figure for
term
and ' group
insurance
is
quite
group
-
one
happened), the
acquiring
will look at the size and
debit
0
to
are-thin,-some
analysts give group insurance only
$2 or $3 per thousand, and some
thousand to earnthe
course
of
its
$15
over
example, when
insurance company
sand
■
^
"adjustaont"
revolves
indus¬
buys out
the insurance of another (as has
trial
company
any
insurance
valuation of the debit.
a
earnings
and book value of $15 per thou-
at
important
its
company,
industrial
around
year
The question arises immediately:
The valuation of accident and
Where did this $15 figure come health
insurance depends a lot on
from? How
valid is it?
V
the profit of record of the busiThis $15 figure in essence repness.
Some of it has no "extra"
resents the "current value" of all value.
Some of it can be
1
the role of the ulti¬
$15
say,
the
so
profitability
the "valuation"
determining
company
for term
counted .on
existence.
2
on
in
given
0f
-
Now government
from
force
the
larger
dition of the debit is
.
a
with—in the fields
"present value"
earnings of the
of
,
agriculture, for example.
"debit" is, the
more
profitable it is, generally
speaking. Since the size and con¬
adjustment factor of
in
cities.
of the
areas
The
prop-
margins
re¬
was
trial"
concen¬
usually the "indus¬
trated in cities,
force,
-n force
customers tend to be
ance
is in effect adding an amount of -merit-of a' maximum-of
future profits to its income, state- 'thousand*, for
group : insurance,
ment. In other words, the insur--where
perform¬
competition
jn
serviced
population
why industrial insur¬
reason
one
to
0ur
is that by adding insurance
point of fact, it presently began
thing and should be done
of labor and
in
later
tending to stimulate to the
be said
was
a
the
^me
in force to its books the company
a sen¬
its toes, preventing exploitation and
of businessmen. In
wicked
came
theory here
should
best
high
density. The agent must be able to
Without going into details, sufThe theory behind doing it this ,fice it to
say that an "adjustment"
able to do what it had been supposed to do in
as
all in all
then
The
value
of
area
get around to visit all the people
his "debit" each week. This is
year.
thousand.
purpose.
adjustment
future
surance
figure and • adds
reported by the
per
sible
total
is
insurance
an
on
The adjustment to book vahie in_
.
$14.78
days, these agencies had in theory at least
in
repea^ fhe adjustment to
earnjngs
involves
applying the
ance
Profit
thousand"
is
SIS.
Henre, $500 thousand multiplied
by $15 or $7.5
million, is his
discussed in Table II is
earlier
<
million.
in
we
indifferent in their
or
trial
,
thousand to the increase in insur-
thousand
His
arfqno
$o00
"thousands
that
ensure
i
,
stockholders
multiplied by one thou-;i volves
applying this adjustment
$500 million There- ; factor to the £^1 amount of in-
which
of
,
(A debit of $250
met.
are
penses
to
equals
Act, the Clayton Act. Good, bad
enacted to
rest
needs
rp0
$500 thousand
uses
thousand
a
include
jnsurance
by, say $500 million in a
creases
$500
force
in
insurance
„,,
million.
ajj
company s
a
at
book
erly
stockholder $15 per thousand
insurance in force in profits after
the business system, laws were
competition actually continued to
exist—the Sherman Act, the Federal Trade Commission
the
to
<m 20
-s
This
As
0f
the
taxes.
^ore
analyst would multiply his
«adjustment„ by $8 million,
arrive
to
return
..
adjusting
to
ordinary
an
±r?«m;.
.When
the
^
.
Example: The
that
$300 is spoken of as the break¬
even point.) It is clear that indus¬
?£>
book value the analyst apphes his
$15 Jo all the
In other words, if a company has
say,, $8 billion msura ce■ m o c ,
reSUltin§ "gure tO
\
+ra^?£
roughly, where this adjustment
C0E®S
to
figure
rpsultina
the
adrk
per
agent (by the commissions he col¬
01lf
•
the
by
to
mean
lects),/and obviously the agent
a
certain number of cus¬
tomers before his operating ex¬
an
increase in insurance in force
the
weekly premium volume
we
vllu-
a
profits to the stockholder over its
life. Therefore, if the insurance
in
the
WOUld D6 IHOTG V31U
abie. However, our illustration is
/W
so
^omefc
f11
I^PSG T3tl0
206S
that
a
insurance
in
' of
return
will
force
underlying philosophy which accompanied
produced it all is
P?
"debit." By "debit"
a
assumes
amount
given
It
distortion
analyst
company
reach
not
an
the
An industrial life insur¬
ance
agent needs to build up a
certain sized "debit" before the
business breaks even. This is true
because the "debit" supports the
worth less. For^ example,^ it
SS lith
low
adjustment
make which is designed to correct
have
of
lot
a
agent.
much more than $15 and s me is
analysts
which they
However, life insurance
it to
Underlying Philosophy
The broad
of
fact
very
the size and condition of
do with
widely depending on any number
thp investor can-
help but be confused when he
looks at life insurance earnings,
not
He
payment times.'
from page 10
parnin„,
nraccpc
has
insurance
industrial
differ
worth of life insurance can
the
profitable for a company.
However,
the profitability
Terminological Appraisal
Of Life Insurance Stocks
r»nH
ber
and
policies, take these
factors into consideration, and the
insurance is not necessarily less
the
of
terms
salaries, and other normal expense, plus the burden
but astronomical. One
industrial,
for
charged
before further serious
thinking straight on the matter
damage is done.
own
and
of all this is in terms of wages
cost
if
in our generation
We should be wise
considerably more expensive to.
service, since the premium col¬
lections are made by the agent
on a door-to-door basis. The rate
devoted
evident.
ideas are not worthy of a free country
enterprise and individual initiative it is not
and strange
Continued from page 1
the
with
another
way
In
Thursday, May 12, 1960
(2058)
volume
in
a
year,
so
reported
Actually, some analysts will not
high as "52 times the debit
go as
191
Volume
Number 5950
.
.
.
The Commercial and Financial
Chronicle
I
oo
•
•
•
.
(ZU59)
.
2d
bank
valuing the typical industrial
loans, proceeds of which purchase, manufacture,
distribu-, cumulative preferred
Perhaps a lower valua¬
were used to finance in
stock, and
part the tion and sale of gas for
domestic, 907,729 shares of common stock. '
tion,
30 to 40 times the debit
company's construction program. commercial
and
industrial
con¬
would be more suitable. If a valu¬
Construction expenditures in the sumption in three
service divi¬
ation of 30 times the debit were
fiscal year ending Sept.
New Walston Wire
30, 1960, sions: (1) the Northern Division,
The company is
offering holders are estimated at
used, the analyst would add 30/52
approximately located in
Morris
Walston & Co., Inc. has installed
of its common stock
County;
(2)
rigtus to sub¬ $3,100,000.
of the company's industrial pre¬
the Central Division,
principally a new high speed teletypewriter
scribe for $3,830,000 of convertible
mium volume in a year to book
The debentures are convertible
located in Monmouth and Ocean system
linking
the
New
York
value. He would also add 30/52 debentures, 5 V4% series due 1970, into
common stock
starting Jan. 1, Counties, and (3), the Southern headquarters with its various re¬
at the subscription
price of $50
of the increase in premium vol¬
Division
which
1961, at an initial conversion price
embraces
Cape gional offices. The system steps
ume in a year
(over prior year's per $50 convertible debenture, on of
$22 per share, provided, how¬ May County. In all, the company up the firm's
the basis of $4
communications to
levels) to earnings.
principal amount ever that
not more than one-third
supplies
gas
to
104
municipalities; a 100-word-per-minute tempo and
In
summary,
any
"rule
of of debentures for eacn share of of
the entire issue may be con¬
which have an estimated
aggre¬ cuts by one-third the time pre¬
thumb" in valuing insurance will common stock held of record on verted
prior to Jan. 1; 1962, and gate population of 577,600.' :
viously needed to transmit buy
be only
an
approximation. The May 6, 1960. The subscription of¬ not more than
For the 12 months ended March and sell
two-thirds
of the
orders.
*
actual valuation will vary from fer will expire at 3:30 p;m., New issue
31,
may be so converted prior to
1960,
the
company had operat- y
company;>to company, depending York Time, on May 27, 1960.
i
Jan. 1, 1963. The debentures will
ing revenues of $17,025,689 and,
on
the type and-quality of the
Allen & Company is
I. M. Simon Branch
redeemable
manager be
at
\
optionali re¬ net income of $1,374,799.
Upon;
N.J. Natural Gas;
Debs. Offered
in
company.
.
,
.
>
written.
business
of
a
group
that
will
underwrite
demption prices ranging from /completion of the current
finane-, CARBONDALE, 111.—I. M. Simon
the' offering. ;
: ■
" A'AA/; -/A'/'-/'A / 105.25% to par, plus accrued in¬
& Co. has opened a branch
office
ing, outstanding capitalization of,
Net proceeds from the sale of terest.. V
;
at 213
West Main Street, under
the
the debentures will be
company on pro forma basis
New Jersey Natural Gas Com¬
the
applied by
management
of
Charles
J.
the company to the
partial pay¬ pany, with headquarters in As- will consist of $20,330,000 of sun¬ Lerner and Wallace F.
Springer,
ment
of outstanding
short term bury Park, N. J., is engaged in the
dry debt; 103,855 shares of 7%- Jr.
.
Amer.BowlingEnt.
Securities Offered
,
American Bowling Enterprises
Inc., a New York corporation, is
offering 150,000 shares of common
stock ($1.00 par value) and 150,A
class
000
stock
common
pur¬
chase warrants, through Myron A.
Lomesney &
Co., underwriter. The
offering is made in units consist¬
ing of one share of common stock
and one stock purchase warrant
and is
priced at $7.50 per unit.
will apply the net
The company
together
proceeds,
with
funds of the company,,
the
to
cost
of
other
principally
constructing
otherwise acquiring bowling
ters.
The
company,
sale and
has
its
on
lease-back
or
cen¬
present
arrangement,
three
bowling centers oper¬
ating in Massachusetts and is in¬
vestigating prospective sites for
bowling centers in New England
Virginia.
and
The
9
through wholly-
company,
owned
subsidiaries
to
be
formppl,
plans to continue to construct and
operate modern,
air-conditioned
bowling centers serviced by. cock¬
tail lounges, snack
bars,' restau¬
rants, meeting rooms, rental lock¬
ers, bowling equipment shop and
nurseries to take care of children
of housewives.
The nurseries for
the
of
care
the
stimulate
children
increased
to
are
day-time
bowling by mothers.
N. Y. Bond Club
Stock Issue
The
-
Bond Club Stock
which opens for
year
Exchange,
trading once a
at
the
Bond
Club
of
New
York's annual Field
Day, is mak¬
ing its annual
offering to mem¬
bers of 2,500 shares.
J.
Howard
Carlson, Carl M.
Loeb, Rhoades
the
Bond
&
Co., who heads-
Club
Stock
Committee
this
year,
trading
in
the
place in
a
tent
on
outing
shares
County
will
Subscription
May 25.
Drop
will
take
special Stock Exchange
grounds
Hollow
Exchange
said
that
be
Sleepy
where the
Club,
held
books
L'ne
a
of'The
June
on
will
close
3.
what's
on
to
Thomas JL Euoer
Past
to
the
hospital
for
minutes. Today's
the'
two months.- He -would be
to hear from
his many fr;ends
gtad
tnroughout the country.
time an hour is always 60
terms of
In
Thomas J. Euper of Revel Miller
Co., Inc., Los Angeles, has been
confined
hour worth?
an
more
than any
most of it
A Shane
the
Fuel energy,
in our history.
oil, makes
supplied by natural gas and
McOmber,
Revel
Miller
&
Co.,.
nc., 650 South
Spring Street, .Los
hour, however, is worth
difference.
the wheels and
By activating
Angeles
an
14, California, will take
messages and cards to him.
G. J. Mitchell
B^an^h
In New York
G. J.
a
Mitchell Jr. Co.
branch
office at
treet, New York
has
155
pistons of our
increases
industrial machine, energy
both production
and leisure
frees labor of
the flow
of goods and
nation will
..
people. Our growing
more
energy.
Tennessee Gas, active in
increasing share of the fuel and
every
City
opened
East
From natural gas and
44th
oil... heat, power,
petrochemicals that mean ever wider
City, under the
Joins Carolina Securities
,
TRANSMISSION/COMPANY
Securities
Corporation,
Building.
'
'
X
^
HOUSTON, TEXAS
N> C' — J- T- Clark>
Is joiP?d the staff of Caro-
surance
•
to The
Financial .Chronicle)
7rALlFIGH''
na
by-products
hour more.enjoyable.
management of VincentC.Mitchell.
(Special
y
and more low cost,
phase of gas and oil, will supply an
that make
.
demand
man-saving
every
drudgery... speeds and spurs
In¬
DIVISIONS- Tennessee
Gas Pipeline Company ■
Tennessee Gas and Oil Company • Tennessee Oil Relining Company
Transmission Company ■ East Tennessee Nalufal Gas Company
Life Insurance Company •AFFILIATEs Pelro-Tex Chemical Corporation
SUBSIDIARIES: Midwestern Gas
J
"
V
/
Tennessee
service to mar
Financial Chronicle
The Commercial and
24
end of the first
amounted to $11,793,818,
MUTUAL FUNDS
Sizable But Unfashionable
hardly be
secret, at this
a
late date,
that managers of investment portfolios have been taking
a dim view of the steels. Indeed,
their aversion to this
group of
the
at
BY ROBERT E. RICH
can
.
.
Thursday, May 12, 1960
net tories, Amerada Petroleum Corp.,
" United Associates Investment Co., CarScience Fund shares. A distribu- penter Steel Co.; Chrysler Corp.,
tion of 3 cents a share from securi- Denver
& Rio Grande Western
$23.82 a share. This compares with
$9,297,916 and $23.14 a share a ties profits was also declared. The*R. R. Co., Walt Disney Producand
distribution
are tions, Houston Lighting & Power
year
earlier. At Dec. 31, 1959, dividend
Co » Kennecott Copper Corp., Misassets were $11,460,390, or $24.42 payable May 31.
*
*
*
sion Corp., Charles Pfizer & Co.,
a share.
Shares outstanding rose
from 401,776 on March 31, 1959, Federated Investors, exclusive disanj' Reynolds
to 469,219 at the end of 1959 and tributor
of
Income
Foundation ^
Metals_ Co
M
to 495,093 at latest report.
Fund, has acquired substantially
n& ■
Tidewater Oil
net assets
quarter
equal to
Johnston Mutual Fund
It
.
(2060)
of 7 cents a share from
dend
investment" income
on
Metal?1 Co^s^'
Reynolds
that stock and the amount at
which the jbundle is valued. The
second place goes to Armco Steel,
which is followed by Republic,
:'\
assets
*
*
*
1.
all
■
Securities
reports
net
on
March
31
stood at
Peoples
•
,
^
fund.
'
cum- »la-
Re-
advisor
investment
Corp.,
the
to
Federated
of
shares
the
search
;
,
Managed Funds
John F. Donahue, President of
$5,019,568, or $16.38 on each of the
quarter
306,427 shares, against $2,423,132 Federated Investors, reported the
equities goes a long way to ex- behind them
and
the second- and
$15.45 on each of the 156,802 acquisition to shareholders in the
plain the sharp decline sustained quarter operations running around shares at the end of March, 1959.
v "
*
*
*
by
the
steel
issues this year, 75%, the steel business is still
pointed out that the acquisition
ranging upward from 25%.
highly profitable.
It may
get Stein Roe & Farnham Stock Fund makes Federated Investors a "true
Although the steels are cyclical worse, of course, before it gets
discloses net assets at March 31 distributor
management"
com- Shareholders of Managed Funds
by nature, it is nevertheless a better. But the seasoned men who were
$11,739,132, the equivalent pany in the mutual fund field. Incorporated of St. Louis have
fact that veteran Wall Streeters
manage investment portfolios are of
$27.25 a share, compared with Initial public offering of Feder- approved investment management
regard them as the bread-and- aware that the kingpins of this
$7,757,099, or $25.53 a share. Share ated Investors shares was made and distribution agreements with
butter stocks. It is not for nothing industry are well financed and,
total
rose
during the year to last August.
Channing Corporation of New
that United States Steel has been f0r the most part, keeping plant
The company, which specializes York at the shareholders meeting
430,778 from 303,810.
called
the
stock
market
bell- up to date. Generally, the steelin sale of contractual investment May 6.
wether.
makers are earning dividends with
Stein Roe & Farnham Balanced plans on Income Foundation Fund
Van Strum & Towne, Inc. was
And it is apparent that investplenty to spare,
Fund had net assets of $42,921,660, through its own sales force, re- approved
as investment advisor
ment leaders haven't abandoned
rpQ ke surej they are not withequal to $35.21 a share on 1,218,- ported 1959 plan sales in the face by 13,356,734 votes, or over 70%
them completely. Far from it. For, out
problems. Costs of labor and 893 shares at March 31. This com¬ amount of upwards of $28 million, of the total 18,822,877 shares outaccording to the National Associa- materials have been rising. Plantpares with $42,852,768 and $38.62
Total face amount of such plans s t a n d i n g. ; Only, 78,505
voted
tion
of
Investment
Companies,
replacement costs come high these on 1,109,555 shares outstanding at active at the
year-end amounted against approval or less than onemore
than $900 million of steel
dayS>
And
obtaining
offsetting the end of 1959.
^ ~ V
to almost $72 million, according to half of one percent.
.
.
securities — common stock,
prey ■
price increases will be difficult,
the report.
Hare's Ltd. was approved as
ferred stocks and bonds
are held
owing to Government pressure, T. Rowe Price Growth Stock Fund
The report estimated Federated national sales distributor by 13,by the investment company mem- competition from abroad and the
reports that at March 31 net assets Investors' share of commissions 304,005 votes, or over 70% of the
bers.
A survey based
y>n latest added competition at home from amounted to $29,782,457, or $13.19 still to be received on these
plans total outstanding.
Only 131,234
financial reports available shows substitute materials. But if the
on
each of the 2,258,808 shares
at more than $2 million. "Like an voted
against approval, or less
that securities of 70 companies in
steel stocks don't spell growth in
outstanding. Comparable figures
the steel industry are held by 154
iceberg," the report noted, "most than six-tenths of one percent of
jggp
investment leaders, they for a
year ago were $19,391,500
of the earnings from investment the outstanding shares,
of the 180 open-end and closeddo represent bread and butter,
and $12.67 on each of 1,530,108
end
members. Considering
plans sold are hidden from view
that
Leicester W. Fisher, President
shares. Net assets at Dec. 31, 1959,
because they are to be received 0f Managed
the mutual funds' assets only tote
Funds, said the vote
-j-i
~r\
l
"r*
were $28,542,829, or $3.70 on each
in the future." It was explained
approving the service agreements
of 2,083,224 shares outstanding.
that
the
company's
share
of
comwith
the
Channing
*
*
*
organization
missions earned on $1 million of
sizable even though unfashionable, de Vegh Investing Co., Inc. reports
represented the largest vote ever
Blue Ridge Mutual Fund reports
The N. A. I. C. figures that nearcontractual plans sales is approxi- received by any group in the ennet asset value per share declined
net
assets
at
March 31 totaled
ly 93% of the steel holdings is from $18.76 to $17.50 during the
mately $30,000 but that only one- tire history of Managed Funds,
$31,974,096,
equal
to
$11.01
a
represented by common stock (66 latest quarter. Assuming the reeighth of this sum comes down in The virtually unanimous approval
share, against $34,128,687 at the the
companies). This stock has a total investment of the capital-gains
year of sale.
:
especially gratifying in view
end of 1959.
value of nearly $850 million. The distribution of $1.14 a share on
of the recent close proxy contest
with
first
banner
a
.
Endorse Channing
■
-
.
.
Funds ^P01^
a-jffl-sasnffirs The
1
the
ter.
were
on
United
not
latch
onto
March
1953, when
the bargain coun-
crease
until
steels
they
did
funds
mutual
after
Steel
States
those
in
d!Lys «wa?. about
i
?
i
if
,a
nsen
*
tiie steels ranked
dustrial
15th
among in-
of
open-end
favorites
companies.
_
_
the shrewd portfolio
had
loaded
up
with
enough steel to put that industrial
By
1954
managers
grouping in sixth place. The steels
remained in sixth place in 1955,
but
moved
and
have
to fourth
up
clung
to
in
that
1956
position
*
*
share
on
income is presently dereported
rived from over 100 different sein
the
portfolio.
The
24
Growth
5ond issues accouilt for about 20%
t0tai
net
assetS)
stocks 40% and 39
41
down from
a
and $13.72
year earlier.
208,
stocks
or
share
a
Shares
had,
as
assets of $22,091,on
each of the
$18.97
The fiscal year just ended marked
with
the
mere^
close
•
of
operations,
dent
of
Inc.
told
tenth
the
James
H.
Colonial
year
of
presi-
Orr,
Energy
shareholders
/v'w.v: Fund's Annual
*
*
Industry
of March 31, net
preferred
common
March 31,
the $69,139,448
reports
0f
way.
Colonial Energy Shares net assets
amounted to $60,862,515 and $11.84
a
has carried it down quite
Other steels have staged
similarly sensational rises since
1953. In 1952 and again in 1953,
year
.Xh%\
de-
a
Keystone Income Fund Series K-l
Curities
a
represents
of 10.1%.
sixfold, although the decline susin the early months of this
tamed
this
25,
the Townsend interests a
six .weeks; ago.
John S. Kramer, attorney for
Shares,
Channing,
in
prospectus
the
Report for the
vear
ended March 31, 1960. Orr pointed
out that during the first decade
of the fund's existence net assets
for
40%
According
end>
made
the
com-
number
a
were
to
filed with the Securities and
Exchange Commission April 21
and clearance is expected later
was
in
of changes
specific corn-
the
*
*
1,108,149
tive
distributions
Net
and Philip Morris,
Barringer of Delaware
Management Co., Inc. reports in
share.
stock
common
Swift
positions
Co.
&
D. Moreau
01L1?.
a share. This
»
stock
in
new
Nia^ara
^
outstanding.
Delaware Fund has just completed
*
'
asse^. .J® '
e<lual to.J21.68
shares
gains of $5
panies represented."
....
grew
this month,
y
split in
asset
March
1955.
value
31.
1980
a
launched throughout the country,
2-for-l' He added that many former Man-
v
share
per
was
Adjusting for
0n
$11.84
the
per
46-cent
the
capital gains distribution declared
investment
totaled
ahead of the steels,
comprehensive
investment
made
issue
the
mg
was
v.
of
portfolios,
company
by A. Wilfred May in our
of May 5, showed that while
steels
favor
year
-
analysis
in
were
the
falling
first
into
the chemicals were attractbuyers. Not that the feeling
unanimous—far from it.
while
a
Du Pont
another half dozen
it
note
Thus,
buying
dozen funds were
that
the
is
were
interesting
best-liked
m
to
the
?astrPai? K°dak which,
chemi
erS lns
'
share and 435,966 shares outstand-
ing. This
and
with $7,564,670
share on each of
compares
$20.61
a
366,955
shares
April 30, 1959.
dis-
quarter of this
outstanding
:
'
on
-
'
/••
•
Net
.••.*•••#
asset
stock
Co.
of
at
*
*
March
.
,
y.';
*
of
the
31,
1960
or;$28.99
net assets of
common
was
4%
reports
a
March
31
net
lower security market levels pre¬
$28,362,070 and $12.51 a share on
2,266,470 shares a year earlier
group
or
$13.16
on
each
of
2,377,411
vailing at the later date." Largest
♦i™cC<uhding
thvi \atest tabula- Selected
tions, the most widely held
nounced
American
nntes
securities
nntes
Federal
34
Bank
of assets is its marketable
portfolio, consisting of
companies, with a market value
March 31, 1960, of $67,798,300.
These
securities, together with net
current
net
assets
Shares
at
March
an-
31
f it5®1 grouP were $95,991,194, or $9.35 a share
in" against $93,922,958 and $9.82 a
S 1 T»n!es having hold-4 share at March J31,1959, aftd com$213
mHlmn
Th
A* °l- °Ver pared with $104,849,064, or $10.28
comna^v Vc anoJ aUSi A
bl^est a share, at the end of 1959. Shares
Bui
th*
oli the top spot, outstanding amounted to 9,560.256
BethlL ew? largestentity, on March 31, 1959, rose to 10,194,in
in numbers
number* nf
s f0.urth-b?tb 423 at the end of 1959 and stood
of companies
cf
veiwnt ^ ates S.teel,» w!th
*
assets
total
assets.
curities
and
short-term
amounted
The
to
59%
remarkable
in¬
of
se¬
portfolio includes securi¬
ties
having a value of $48,583,400,
acquired since the commencement
of
the
investment
April, ^1954,
appreciation
and
on
March 31, was
crease
of 48%
*
program
the
in
unrealized
these securities at
$15,853,400,
over
>5!
an
in¬
cost.
at
10,925,635
at
latest
report.
United Funds, Inc. declared
Land
n
March
that
divi¬
c
aSed Funds salesmen had joined
his eompany and though others
would do s0 now that their cus:
tomers had expressed approval
Channing organization,
1; ; /
^
_
ArtolwcfQ
xYIIdlj utu
intermedia?n
a'\
Federil
w
vF^dfr !
Federal
Na-
Mnrt«»
5^ % Debentures^
tional
Mortgage1 Association 4%%
Debentures, Coastal States Gas
Producing
Co.
6%
Debentures,
Spiegel, Inc. Conv. Sub. 5% Debentures, and the common stocks
of
Alico
Land
American
Development
Co.,
Insurance
Co.,
Kern
Co., Union Texas
Corp. Class "A" and
County
Land
Natural
Gas
"B."
common
Election Meeting
nl._The,
h°ld their annual election meetinS on June 10th. A slate will be
presented by the newly appointed
nominating committee, comprising Clarence E. Torrey, Jr., A, G.
Becker &.CO., Incorporated, Chairman; Russell J. Eddy/ William C.
Norby, Richard H. Samuels, and
Neil E. Heikes.
_
,
To Form Bernstein Co.
SCARSDATF
N
Y
A*
of
May
chanSe. will be formed with offices in Scarsdale. Mail address
of the firm is R °- Box 657' Part"
ners win be Daniel J- Bernstein,
member of the New York Stock
Samuel W. Weiss
were:
stocks of Abbott Labora-
rafnnlHarry S
^0ral
verson' limited partner.
paanP,c
Mitchum, Jones Partners
LOS
5th,
ANGELES, Calif.—On May
William N. L. Hutchinson
and William W. Bliss will become
limited
partners
in Mitchum,
Jones
&' Templeton,..
650
,
South
New York and Pacific
of the
Coast Stock
Exchanges,.
^
Spring
eliminated
Investment
Chicago will
Analysts Society of
bers o£ the New York Stock Ex-
t
VVe=.,,r,, d7^
Debenhires
Securities
a
q
Rank
National
Class
*
nn
owning
ii
4?%
at
on
reported
share, reflecting "the generally
assets totaled $29,103,441, or $12.51
on each of 2,325,509
shares, against
The fund reported at the close of
last year net assets of $31,295 866
fund
outstanding reached new highs
during the quarter. Shares outstanding were 25,049,503 on March
31» I960, compared with 23,131,766
year-end of $159,158,800, or $30.31
at
$372,639,741
The
$152,-
New York Capital Fund of Canada
that
1959.
number of shareholders and shares
share,
a
31,
Share
lower than asset value at the 1959
vestments,
com-
*
.
value
Electric Bond and
224,900,
*
semi~ shares outstanding.
1S a
y
.
realized
from
share and
per
#
move
Funds
from approximately $6 million to over $60 million. Net asset
1,164,840 shares outstanding. The
corresponding figures for March
advisory firm's at the fiscal year-end, the per
latest semi-monthly directors' let¬ share net asset value was $12.30,
ter. Generally categorized as con¬ which compared with $13.72 a year
and insurance) and public utili- Wisconsin
Fund
net
assets
at sumer stocks, both, he writes, are
ties, including telephone issues.
March 31 amounted to $15,210,936, supposed to be relatively free of fund during the year
35
However,
the fifth-ranked or $6.04 on each of the 2,602,068 the severe cyclical swings experi¬ cents per share, the same as last
chemicals have been pressing in shares outstanding, against $14,- enced by capital-goods producers.
*
*
*
on the
steels and unless there is
854,563, $5.99 a share and 2,480,019 Though subject to fluctuation of
a
better feeling presently toward
shares a year earlier. ; ~
gross and net, he says "there is Fidelity Fund, one of the Fidelity
the
ferrous equities,
an
it may be
*
'
* " *
*
^
implication that a general re¬ Management
Group
of
mutual
that the chemicals, which occuGuardian
Mutual
Fund
reports treat of capital-goods activity will funds, reports total net assets of
pied the third slot before the that as of April 30 it had net not necessarily carry these com¬ $373,293,107
for
quarter
ended
Great Bull Market got
underway, assets of $8,218,284 or $18.85 a panies' business down in its train." March 31, 1960, compared with
The
new
a
Managed
King Merritt, President of the
international sales organization of
pany: 'The proportionate holding
Company, Inc.,
31, 1959, were $17,320,525, $18.29 value per share increased from King Merritt
among these general types of se_
$7.51
on
and 946,896 shares. At the close of
July 21,
1959, to the announced that immediately therecurities were approximately the
1959 net assets were $22,293,442,
equivalent of $16.84 on March 31, after a national sales campaign
same as at the
1959 fiscal yearManaged Funds would be
equal to $20.12 on each of the 1960, after adjusting for cumula- of
for
a
ever since. Ahead of them are the
comfront-running
oils, which
have Par®s with $61,930,191 and $22.90
been even more unfashionable of
a sbare a year earlier,
late, and
the financials (banks
♦
♦
♦
will
that
reported
Street,
members
;
@FedFRASER