Full text of Commercial and Financial Chronicle : May 14, 1959, Vol. 189, No. 5846, Section 1

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

ESTABLISHED 1839

In 2 Sections

Section fl]

—

UN IV
ER SI TV
OF

MICHIGAN

Commercial W -

-

ub7A$strat'O>

Reg. U. S. Pat. Office

Volume

New York 7, N.

Number 5846

189

EDITORIAL

Tell the People About Theii

Current Stock Market and
Enforcement Activities
By EDWARD N. GADSBY*

We See
has for

a

good while

past been bedeviled by aggressive demands by
ambitious
occasion

and

unions

labor

on

than

more

Blunt talk

Striking back hard at the slow-inflation argument, New

threats of strikes, is hardly

by SEC head calls for reimposition of stringent
regulations by exchanges to curb floor traders' activities.

York banker explains

lifetime cuts money in

of such

or

that a 3% rate over a working
half, and that we cannot afford it
because of positive harm to the economy and to our
world position. Remindful of the fact that bankers are

things. Last year was, by and large, not

good year, and hence not a good one for de¬

a

conclusion that

as soon as

vigorous

istered

NASD Rules of Fair Practice, and recommends even this

Mr.

deterioration, transcends beyond bankers,

Champion importunes bankers and business in
levels of the community.

at all

with

on

free markets abroad in

under considerable
the

dollar.

the

due

treatment the

same

todians

the

the

of

out

warnings

of

cance—not

tied up

exist

only can tell, but it is clear that basically
the argument for higher wages that is most likely
to win favor with a great many of the rank and
file is the old, old New Deal notion that higher

We
George Champion

over

it

see

small

the

the inevitability

to

or

32

address

Association,

IN

THIS

Champion, before
Atlantic City, N. J., May 11,
by

Mr.

of

STATE

and

MUNICIPAL

AND

♦

of

An

Chicago,

the

State, Municipal

CHEMICAL

BONDS

Associate Member American

Y.

OF NEW YORK

Burnham and Company
MCMSCRC NEW YORK

15 SROAD STREET,

ANO AMERICAN

NEW YORK 5, N.Y.

•

Dl 4-1400

Net
To

T. L. Watson &Co.
ESTABLISHED

::yX;::v£

N

*/•,'

1832

-

'

/

4 ^

,

si

Members

New York

Markets

Active

Dealers,

Banks

Maintained
and Brokers

$200,000

GOVERNMENT OF CANADA

british columbia
oil lands

Exchange

Block

Inquiries

2% %
Due

Com./wts.

Canadian

Stock Exchange

CANADIAN

BROAD

STREET

NEW YORK
PIRST

4, N. Y.

<£}01lthU}€At COMPANY
DALLAS




DIRECT

-.

Bonds

.

-

-

•

J

September 1, 1974

For

Payable in United States funds

Invited

Commission Orders

''

25

BANK

Correspondent—Pershing & Co.

Price

New York Stock

American

Chase Manhattan

Securities

TELCTYRE NY 1-22M

CQIURNHAM

Dealer

....

Teletype: NY 1-708

THE

Riverside,

Ana, Santa Monica

California

Bond Dept.

Beach,

inquiries Invited on Southern

STOCK CXCHANOES

Distributor

•

.

San Diego, Santa

DEPARTMENT

BOND

del Mar,

Offices in Claremont, Corona

Pasadena, Pomona, Redlands,

CABLE:

Underwriter

Stock Exchange
Exchange

Encino, Glendale, Hollywood. Long

THE FIRST NATIONAL CITY BANK

!

Stock Exchange

Members Pacific Coast

BANK

Agency

Bonds and Notes

.

SECURITIES

M

Public Housing

Angeles 17,

623 So. Hope Street, Los

Members New York

CORN EXCHANGE

30 BROAD ST., N.

34

page

Gadsby before the Stock Brokers' Associates
Chicago, Illinois, May 5, 1959.

Lester, Ryons & Co.

INVESTMENT

\

on

address by Mr.

California

IIAnover 2-8700

BOND DEPARTMENT

traded

over-the-

Although Congress

Continued

26

DISTRIBUTORS
of

IKV

the

the duty of enforcing the rules
relating to margin requirements, it gave to the Board
of
Governors
of the Federal Reserve System the

of today's Issue.

UNDERWRITERS

Municipal

Securities
telephone:

of share prices

and

Housing,

State and

authority
price lev¬

securities

and

U. S. Government,
Public

no

delegated to the SEC

Bankers

the Mortgage
1959.

volume

exchanges

ASSOCIATION
Section Two

in

page

have

the fluctuation
the

counter markets.

rising

photos taken at the 23rd Annual Dinner of
OF NEW YORK, INC., appear in

ISSUE—Candid

SECURITY TRADERS

on

on

we

control general market

els,
Edward N. Gadsby

of inflation, and perhaps it is not sur-

Continued

in

not only to the Securities

administer,

we

to

I have heard taxicab drivers comment on

bond market.

♦An

PICTURES

in

rise

Exchange Commission but also
to responsible leaders of the finan¬
cial community. Under the statutes

all sides: in the boom¬

investor;

spectacular

and

ing stock market, now being fed by
the

higher wages (all paid out of profits, of
are perhaps the most effective assurance
good business to come and the high rate of

DEALERS

ous concern

values of real estate and the troubles in the government

and

page

come

in

side-effects which have been of seri¬

well.For

the outlook for the dollar.
on

course)

on

has

that

unparalleled

in the days of the

trading activity and in values has,
unfortunately, been accompanied by

only to bankers, but also

concern

even

This

twenties.

I don't need to repeat the wide¬

try.

levels

great bull market of the late nineteen -

with the whole future of the

spread

both the overexchange

on

national

and

to

history,

our

that have long symbolized our coun¬

future

Continued

peo¬

The dollar

as

securities

markets

wider signifi¬

a

many

the-counter

of the institutions and values

many

House. What the outcome of all this will be the

of

brought the prices of

dollaf is the continued existence of

White

the

everyone.

worth holds

to individuals and citizens

frame of mind favorable to them, and to take
steam

other

of

j

lately been experiencing a renewed surge of
interest and activity in the securities markets which has

and any deterioration;
product in their care can't

and its

getting. They hope in this way, and by in¬
sisting that higher wages can be paid without
increase in the prices of steel, to bring the public
a

trustees

help but affect

been

to

and

Executed On All
Exchanges

To

82

and

yield

interest

,

4.40%

•

PERTH AMBOY

WIRES TO MONTREAL AND

Domhuox Securities

MUNICIPAL BOND
DEPARTMENT

TORONTO

Goodbody & Co.
115 BROADWAY

NEW YORK

'

Municipals

Grporatioti
Associate Member of American

iSuttk of America

Stock Exch.

•EMBERS NEW YORK STOCK EXCHANGE

BRIDGEPORT

California

DEPARTMENT

Teletype NV 1-2270

1 NORTH LA SALLE ST
CHICAGO

40

-

We have

money,

the

of

are

have

other unions

the outlook for

matter which has special meaning
for bankers since they are the cus¬

_

that they

now

buying from artificial and unlawful activities.

a

ple's

Gadsby refers to studies made

-

measures

place of state planning.

discussion recently:

This is

specified by

particularly when small floating supply exists. He hopes
contemplated will distinguish better innocent

cope

I thought that I would discuss a subject that has been

higher wages. They were allegedly not
"inflationary," but the fact remains that they
were
cost-increasing in their net results—and,
after all, that is the crux of the matter.
crying

can

we

men as

showing floor traders tend to exaggerate market swings—

inflation, the banker is heartened by increasing reli¬

ance

sulted in

are

Confident

representatives be customers'

standard be raised. Mr.

gen¬

eral to enter into the debates and management of affairs

cam¬

paign to continue where they had left off when
the recession temporarily quieted them. A sort
of climax is now approaching or has approached
in the steel industry. All, or virtually all, the
labor settlements of the past months have re¬

The steel unions

also notes failure of brokers to insist that their reg¬

man

the effect of

business improved

the labor bosses would institute a

Expressing deep concern about stock price movements
arising from manipulation and fraud, the securities Chair¬

custodians and trustees of other people's money, and that

manding and getting higher wages. It was a fore¬
gone

|

and Exchange Commission

Chairman, Securities

President, The Chase Manhattan Bank, New York City

one

surprising to thoughtful students of the history

by strikes

Copy

a

By GEORGE CHAMPION*

vJ

As

Cents

50

Stake in Dollar's Integrity

-

The fact that this country

Price

Y., Thursday, May 14, 1959

NATIONAL

Exchange Place, New York 5, N. Y.

Tel. WHitehall 4-8161

Tele. NY 1-702-3

>

300

UWngs ASSOCIATION

Montgomery St.. San Francisco, Calif.

2

The Commercial and Financial Chronicle

(2190)

The

Brokers, Dealers only

For Banks,

participate and give their

When time is important io

large and experi¬
enced trading department
can
help
you
reach the
OTC markets you need —

you, our

reasons

they

ire

to

PETER

be regarded,

as an

of

contacts,

of

you

assure

getting the complete cover¬
age you need in your Over-

problems.

the-Counter

American Cement Co.

industries face

Few

so

clear-cut

favorable prospect for 1959 and
in future years as does the cement

tative

authori¬

McGraw-Hill's
con¬

struction pub¬

lication, the
"Engineering
ord,"

Corporation

first 4 months

Established 1920

of

Associate Member

York 5

•

PHILADELPHIA

•

10%

CHICAGO
SAN FRANCISCO

Wires to Principal Cities

Private

a

Members
Y.

Security

;

'

brokerage service

Unlisted

all

in

a

Securities

for Banks and Dealers

Exchange Place. New York 5
Phone: WHitehall 3-7830

Teletype No. NY 1-2762

Stock

Exchange,

35

than

less

—

the Ameri¬
is selling

ratio in the

B. B. Andrews

Peter

is

least

at

now

S.

add they give strong

of

a

record-breaking

the

of Labor,

Dept.

W.

F.

Dodge Corporation, the Architec¬
tural
Forum,
the
McGraw-Hill

Publications, and such outstand¬
ing trade publications as "Rock

12

points

intrin¬

of

On the

undervalued.

anticipated

basis

have

would

Life Insurance Co. of Va.

cement

from

financial

LYNCHBURG, VA.
LD 39

-5-2527—-

Private

Wire

to

New

industry

City

and

short-term

a

a

viewpoint. The enor¬
Highway Building
Program — already approved and
budgeted for by Congress—assures
heavy
demand
for
cement for
Federal

mous

many

ahead. This program

years

more years

following figures
cial

United

Budget)

TWX LY 77
York

will

to run, and the
(from the offi¬

States

show

Government

how

accelerate

UNILEVER

N1 V.

this
the

in

program

years

$1,600,000,000; in 1959
$2,600,000,000 (up a bil¬
lion dollars); in 1960 $3,100,000,000
(up another half billion dollars);
in 1961 $3,200,000,000 and in 1962
$3,600,000,000. These figures are
not guesswork;
they are estab¬
official

U.

Government

S.

Budget figures. In other words,
can
hardly be more certain

anything
scene

FA1REY AVIATION

of

1959

condition

is strong and
is s i m p 1 e, with
funded
debt,
473,000

shares

of

shares

class

of

class

A

B

and

stock

212,000

firm

try?

The

in

premise,

this

answer

is

the
most

booming indus¬
to

that)—as al¬

in prudent financial analysis
—is earning power in relation to
the selling price of the stock, and
North
a

B

stock

American

Cement

standout. The company's

share of class A and

per

combined

on

have

run

as

the present number of

outstanding:
1954
$2.52;
$3.75; 1956 $3 82; 1957 $3 93,

in

the

noteworthy

Private

Wire

System




to Canada

of

Income:

STOCKS
for current information

once every

Increased

years

vs.

recession

$3.52.

year

For

1958

the

a

a

year

1959_ net income is estimated
$4.45

at

share of combined class A

and B stock. The
companv has ex¬
cellent first quarter

results;

net

income equalled
$3.88 a share for
the 12 months ended March
31,

1959, compared with $3.48 for the
same

1958.

period

V-/' ■■■:■■( Call or write

in

the

A

stock,

which

is

lent

are

rent

$1

than 2V-i times cur¬

more

liabilities.

annual

The

cash

dividend

is

generous

stock

1955

1956

also

and

of New

dividends:

10%

5%

1957,

in

There

in

1952.
are

earnings

share of combined

was

a

Increased

likely

on

$4.45

of

class

and

A

tal

As

a

B

ended

"Engineering

March .31,

News-Record"

Brokers

111

the

mium

is

at

a

IN JAPAN

Capi¬
rate

are

Write

<

of

,

of

.

and

they

factors,

$27.4 million

is

of $154

assets

for

;

:

Monthly Stock
Digest, and our other reports
that give you a pretty clear*
picture of the Japanese I
our

economy as a

million
262%, above the 1946 levels.

225%,

Investment Bankers

t

whole.-

Assets:

and

above

income

&

Broadway,N.Y.6COrtlandi7-5680

Opportunities Unlimited

have not failed to gro\y each year
over
the
preceding year.
Pre¬

Nomura Securities Co., Ltd.
61 Broadway, New York 6,

BOwling

Telephone:
This

is

not

orders

for

an

offer

Green

or

N. Y.

9-0187

solicitation

for

particular securities

any

Total Equity or Est. Liquidating

Value*: At 12/31/58, $33.6

$16.82

or

share

per

vs.

million
$15.43 in

1957, and $4.57 in 1946. Gain over
1946 is 268%.

1958 Results: The

Earnings and
recession

affected

was

still

and

investment

good

a

■in

insurance

$73 million

sales
year.

..

vs.

Primary Market Maintained

1958,

Premium

income

force

vs.

but

and.,

rose

increased

GENERAL DEVICES INC.

by

$94 million in 1957.

earnings were $1.06 in
$1.17 in 1957.
Earnings

Reported
1958

1959.

growth

'-i

Tokyo, Japan

per

with

of

Yamaichi Securities Co., Ltd.

$17.1

are now

year.
Premium
Income

■

j,

increased

Have

$8.56 per share.

or

funds

11%

in

split in 1955 and

split

in

8%

and

1958.

dividends also

stock

paid in 1953,

were

and

estimated

that

but

million

,

York, Inc.

Affiliate

-

;>

Funds:

261% since 1946 and

a

with

4-for-3

a

2-for-l

basis,

on

supplemented

stock dividends

I.954,

is

stock

7..;:',/

Capital

/

■

Securities Company

In¬
of

return.

"\-W

Yamaichi

$4.5 mil¬
Commonwealth has
was

investment

serves.

outstand¬

Progress

Report

Available

adjusted* for gain in insurance in
|

force

WATSON B. DABNEY

Partner. J. J. B. Milliard & Son

in

Commonwealth

Life

Insurance

Company

This 54-year-old Louisville, Ky.,
has been a stellar per¬
former in the vigorous market for
life insurance stocks since the end
of World War
Common¬

the

i

n-

seeking
long-term
capital appre¬
ciation

in

$1.57 compared to $1.92

earnings

in

aside

set

MEADE & COMPANY

1958

additional $0.20

an

timated )

company

II.

after

are

Louisville, Ky.

were

1957..-> These

1

vestor

that

ways

1955

Teletype NY 1-4686

six

1958.

pected

(es¬

for

expected
liability. By compari¬
son,
adjusted earnings in
1958
were triple those of 1946.
Dividends: $0.20 per share have
been the last two years.
The div¬
idend has quadrupled since 1946.
Stock was split five-for-one plus

27

William Street, New York

income tax

in

ahead.

years

With

and

Liberty St., New York 5

JAPANESE

higher than industry average of
assets
invested
in
government

for

the

we are

shares

55

every
average

Investment

a

follows

Tel.: BE 3-8880

or¬

by 280%; or¬

294% since 1946 and

33

earnings

Members: New York Stock
Exchange

is

■

recommended

stock is

Alfred L. Vanden Broeck & Co.

increased

doubled

lion in

branch offices

our

about

Now

of which 65%

industry
eight years.

industry faces expanding sales in

there

Bought—Sold—Quoted

force has

wealth Life is

attractive

A.D.R.

we

the future economic

on

than

question is: Which stock

ELLIOTT

Force:

in

Sijice. 1946, insurance in

dinary.

that the cement

REG. LTD.

AUTOMATION LTD.

Direct wires to

earnings required to maintain re¬

was

lished

A.D.R.

j

Insurance

billion

Mobile, Ala.

invest¬

an

$6,000,000

it will be

Brokers and Dealers

as

NY 1-1557

follows:

as

vestment earnings are in excess

cash

im¬
mediately ahead, covering fiscal
years: 1958 Federal aid for high¬
ways

For Banks,

are

capitalization

able

long-term

has 10

STRADER and COMPANY, Inc.

HAnover 2-0700

New Orleans, La. - Birmingham, Ala

an

ing. Both the A and B stocks have
an ex¬
ceptionally big sales year for the voting power, but the B has the
building and cement industry. right to elect a majority ol direc¬
Each month this year has been tors. However, it is tightly held.
a
record sales month for cement. &nd better .marketability is avail¬

both

American Stock Exchange

a

sically

—

Commonwealth Natural Gas

Comrnonw.ea'Ith Life
ment

pected foi 1959 earnings, the stock

a g o.:

York Stock Exchange

New

19 Rector St., New York 6, N. Y.

Some factors which recommend

t

leading

not only
recommended for purchase. Cur¬
promise of capi¬
rent assets
at $7,257,967 — are a
tal gain in 1959, but
in future
strong 412 times current liabilities
years as well. This makes invest¬
of $1,579,746', and cash and equiva¬
ment in it strategically desirable

Bassett Furniture Industries

Steiner, Rouse & Co.

phasis on the more profitable or¬
dinary insurance.

con-j

where

14 to 20 times

actual

The

American Furniture

Partner,

Son, Louis¬

Members

times

10

holds forth great

Trading Interest In

&

Members

for the years

—

Products." that 1959 will be
40

Dabney,

Hilliard

earnings, it bonds but this
percentage has
appreciation po¬ been
declining steadily as new
tential this year of more than 25
year
for the
cement industry.
money
is, invested in corporate
There
is
unanimous
agreement points. A price-earnings ratio of bonds and mortgages affording
14 times estimated 1959 earnings
among all the top authorities: the
higher yields.
Another invest¬
Office of Construction Statistics of per share would mean a price of ment plus is the new Home Office
compared
with
the current building which is mostly rented
the U. S. Dept. of Commerce, the 62,
The company's and will in time produce the ex¬
Bureau of Labor Statistics of the price around 35.
U.

Lender

B.

Bought—Sold—-Quoted

dinary by 333 %; industrial by.
earnings per share.
This is the
139%; group by 2,069%.
Since
most
attractive
price-earnings the early 1940s insurance in force

of

indications

Dealers Ass'n

J.

has

construction

N.

build¬

road

State

York

significantly

around

*

forerunners to

GROSSMAN
& CO. INC.

Louisiana Securities

—

Life Insurance Co.

B.

the

a re

Co.

average.

stocks are* selling
earnings per share.
In other words, even without cons i d e r i n g the improvement ex¬

year

These

Cement

B.

ville, Ky. (Page 2)

major cement group,

tracts

S. WEINBERG,

J.

$1.2

arc:

ahead

the

New

national

The stock, listed on

than]

more

Teletype NY 1-40

BOSTON

The

the

of

ing budget is at a record high this
year.
An
unquestionably
fine
growth situation, with expanding
business evident for this year and

can

1959, heavy j

awards
120 Broadway, New
WOrth 4-2300

New

ahead.

construction

Exchange

American Stock

ahead

points,

out that in the

B.

building contracts running sharply

—

News-Rec¬

American

—Watson

by North
has total

(served
Cement)

Alabama &

Andrews, Consult¬
ing Economist, Fairiawn, N. J.
(Page 2)

to

Northeastern

—

Area

American

a

industry.

New York Hanseatic

York

New

•

Participants and

the Metropolitan' Commonwealth

that

out

Jersey
North

North

Peter

points

ANDREWS

B. B.

particular security.

a

intended

not

are

Thursday, May 14, 1959

.

.

Their Selections

be, nor
offer to sell the securities discussed.)

Consulting Economist, FuirJawn, N. J.

system, plus a wide range

for favoring

(The articles contained in this fornm

nationwide private wire

A

This Week's

Forum

A continuous forum in which, each week, a different group of experts
6a the investment and advisory field from all sections of the country

Try "HANSEATIC"

faster.

Security I Like Best

.

5, N. Y.

Dlgby 4-7930

HOV*

50% stock dividend in 1955, and

•

dj%' stock dividends were paid
1950 and
Market

1957.

Price

and

Price

Earn¬

ings:- 1958 range

(bid) was 30-16
1957,T9-15«;:Stock is cur¬

in

and

company with
excellent sales
and

the

/
<?> /

<2.

mi

Jay#

rently about 25, selling at 23 times
reported earnings and 16 times
fidiu^tecl
earnings.
Considering

a

growth

long-term potential of the life

prospects,
enjoys

insurance

business

excessive

ratios

high return

compared

with

which
a

on

invested

earnings

into

business

Watson

B. vauney

Capitalization
There-

the
and

production

of

profits. *

Commonwealth Life operates in
the Middle

not

are

industrial stocks.

capital and
plows
back
new

these

especially when
those of leading

South

plus West

Vir¬

ginia, Indiana and Ohio with

over

half its business in Kentucky.

In¬

standing,

and

2,000,000

are

healthy

a

Ownership:

shares

out¬

fraction

of

which is owned by managers and
directors. .Commonwealth Life In¬
surance

stock

is

traded

O-T-C

pected

to

average.

continue

The

to

company

be

above

writes

non-participating ordinary,

group

and industrial insurance with

em-

Quotation Services
for 46 Years

in

leading cities and marketability is
usually good.

dustrial and

population growth in
this
area,
including
the
Ohio
River Valley, has been and is ex¬

Over-the-Counter;

""Adjusted
earnings
include
reported
plus value assigned to the in¬
in insurance in force of $15 a $1,OOO for ordinary,. $5 a $1,000 for grouD,
and
1/2 the increase in annual premium

National Quotation Bureai

earnings

Incorporated

crease

for

value

industrial
includes

insurance

in

insurance.

capital

force

46 Front Street

New York 4,

Liquidating

funds

valued

Established 1913

at

plus
same

total
rates

CHICAGO

SAN

N.Y.

FRANOXSOO

Volume 169

Number 5846

.

.

The Commercial and Financial Chronicle

.

in be x

Ethical Ding Industry
—A 20-Year Forward Look
■>

By GEORGE

B. STONE*

•

}'r ^

.v

mmmm

I

The

Chairman Edward N.

Gadsby

unique attempt to provide

a

Cover

The Ethical Drug Industry: A 20-Year Forward Look

a

Mr. Stone explains how he arrives at $2 billion sales for 1960,

$2.8 billion by 1965, $3.8 billion by

writer

ethical

notes

will reflect "boundless

or

1970 and; assuming i

in

an

precedented health."
Medicine

is

the

of

era

economic

the United

States up to

the

vides

very

for its existence.

reason

ethical

drug

industry

is

one

I

one

thesis

this

submitted

School

can

of

last

o n

same

year.

far

so

as

economic

The

Stevenson

investors corp.

10

permachem
n

corp.
*

r"f?rJ<imes Jy Rober.tsoni_.~_v—4—
,

basic atomics

Need for Trade Liberalization Cited by U. S. Businessman
—H. J. Heinz II

14

Growing Role of Monetary Fund—Per Jacobsson

15

Missile Production

for.

19

western gold

Outlook—Roger W. Babson

equity oil

Free Gold Market Will Soon Be Here in the U. S.

Management

—Harry Sears

It is the first attempt,
I know, at a long-range

premise.

S.

Federal Reserve's Independence and Problems to Be Faced
v.

M.I.T.

the

to

industrial

9

Men, Not Crises,-Are Responsible for Type of Government
We Have—Sen. Barry Gold water

The basis of this discussion is a

of—that

reeves

______:

20

Several of the Forecasting Techniques in Use Today
—Richard Berger
!

ethical

soundcraft

drug industry.

aim

the

the

for

forecast

22

Five

t ical

maceu

solete

Projection

Points
Prominent Economists to Debate European Economic

Obtaining sufficient data for an"
;j Integration
indication of the growth trend is
paramount in long-range forecast- t "What Does He Really Mean? (Boxed) ——;
ing.
The absolute value of the
t il. L. Spencer, West Coast
data is less important, assuming
Reader, Asks "What Price
Arms Race?" (Letter to Editor)
that one or two true points exist
as a base for projecting the trend.
Great Wave of Prosperity Envisioned by Gerald G.
Five
major projections
have;"
Bernheimer (Letter to Editor)
been used for predicting the fu¬
ture growth of the industry.
'
;
Messrs. Funstoh and McCormick Take Issue With SEC

*

14

,

is to make ob-

„.

the

drugs

,

devices

and

;

his

:

rthrough

J .F. Reilly & Co., Inc.

18

—

research >'

own

cominoil

phar-

manufacturer

latest

;

american

glance; at

a

{

6

1975 pro¬

passing
pharmaceuticals.
>,
;

business—the

operates

only

Dept.

STREET, NEW YORK

Telephone: WHitehall 4-6551

Inflation—James B. Forgan

on

'—-Robert

un¬

forecast

Graw-Hill

99 WALL

Applying the Instalment Idea in .Financing Durables

:

only profession
that labors incessantly to destroy

5*

What Can Be Done About Inflation in Canada
—J. Douglas Gibson..,
:

>
-

prescription

medical advances

Obsolete Securities

Challenge of Soviet Economic Expansion
—Hon. C. Douglas Dillon_________

drugs now outsell :
over-the-counter propriety products' and that the former fate
of growth is such that.it may well account for 90% or more ^
of total 1975 drug sales.
His prediction, paradoxical as it
may seem, is that quadrupling of prescription industry sales
f

5

The

Comments

cash for obsoletes!

pay you

3

__

;

major medical breakthrough in cancer, heart and other diseases, $5.2 billion by 1975—compared to $1.5 billion in 1956.
The

we

—George B. Stone__

major drug categories and five major individual pro- >
jections of future sales value of the ethical drug industry. '!&■-

•

v

Bondholders for Whom the Roads Toll—Ira U.
Cobleigh

tions of

of

wmmmmmmmmmmM

TRIPLE-PAY
£

.__

AJ»D cqioany

__Cover

______:

Current Market and Enforcement Activities—

—SEC

long-range economic forecast ^
drag industry, the author depicts the industry's
prospects in terms of dollars and cents. This includes projec- .*

only

i',.

That's what it's like when

In

think

Page
\

^

'

•

Tell the People About Their Stake in Dollar's
Integrity

for the ethical

The

:}

....

—George Champion
•

llCHTEIWi

B.S.

Articles and News
.»•.•'

:

General Manager, J. B. Roerig and Company,.
Division of Chas. Pfizer: & Co., Inc., New York City

3

(2191)

18

.

This

efforts.

til

poses

George B. Stone

r e e

economic

"basic

is

First—What

*

questions:
the

economic; outlook

*

long-range
the

of

ethical

-'drug industry? Can sales go on
climbing for the next 20 years at
the rate they have in the past two
decades?

The

value

!.

Second

—

What

the

are

implement

can

factors

retard

or

this expansion? What forces seem

required to maintain
growth?

The

the industry in dan¬
destroying itself in the next
20 years?
j
These

questions

Yet

tal.

there

published

single

fundamen¬

are

has

not

study

been

a

the

of

Individual firms of

make long-range forecasts

course

as a

matter of intelligent manage¬

particularly

ment,
search

tions,
made
.,,

of

their

development

and

re¬

opera¬

but such studies are not
public for obvious reasons.

Brief,
limited
estimates
are
occasionally by some bro¬

made

kerage houses to encourage iiivesting in the industry. One note¬

worthy study, which assayed the
industry from 1939 to 1954, was
carried out by Arthur D. Little,
Inc.
The recently published Mc*From

a

talk

by

Mr. Stone at the
of the Pharma¬
Assn.,
Chicago.

Central -Region Meeting
ceutical
Manufacturers
The

author

absence
fred

P.

last

received

a

vpar's

leave

-f"

to participate in Al¬
Foundation's
Executive

Development Program, at the Massachu¬
Institute of Technology's School of

the

on

data

is

Regular Features
As

the

on

of

We

Bank

with

extension

an

consumption

personal

diture

and

Business

fourth

The

expen¬

Insurance

Man's

based,

is

on

Dollar

future

From

rate in terms of ethical drug sales.

The

fifth

final

and

reconstruction founded

on

Scare?"

Mutual

in¬

projections of the major
categories of ethical drugs here

now

and

major
cancer,

destined

problem
mental

to

in

drugs

Here I have

assumptions as to
development1 of
during the next 20

years.

The five projections

have been
averaged and compared, allowing
a margin of variation, to obtain a
final estimate of the growth of the

industry in the next two decades.
This estimate places the sales
value of this industry at $2.0 bil¬
lion in 1960... $2.8 million in 1965
.

.

.

$3.8 billion in

$5.2 billion in

1970

1975.

Continued

...

Stock

page

;

37

Teletype NY 1-1825 & 1-4844

46

Funds

Direct Wires to

Notes

;

Dallas

Los Angeles

Chicago

Cleveland

19

—

Wilfred

May

4

Our

Reporter

Governments

33

Our

Reporter's

Public

29

on

Railroad

47

Report

Securities-

Utility

Prospective

27

:

38

Registration._______

Offerings

Security

The Market

..

.

and You—By

The

Security I Like

The

State

Glens Falls
Worcester

",

25

___

__________——_____

Industryr____——

—

You.l

and

Twice

___

—

Weekly

FINANCIAL

CHRONICLE
Office

4
48

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Company
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of heart,
disease, arthritis

successful

new

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the

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made

the

come

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Boston

Nashville

8

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"What Measures Will U. S. A. Take About the New

:

Published

specialized in

.Cover

(Editorial)

Dealer-Broker Investment -Recommendations.

predictions of mortality rates and
the value of a unit of mortality

a

It

Coming Events in the Investment Field

of

drugs
and
sundries
combined with population growth.

is

See

for

setts

have

35

Air Products

six

from

based

is

number

third

.Industrial Management.

For many years we

Hycon

Activities of Floor Brokers

on

Perkin & Elmer
second

in

The

year

Sloan

based

price of the Rx, together
population growth.
' -

growth potential of this burgeon¬

ing industry.

Chairman Gadsby

-

prescrip¬
tions filled annually, the average

the

Third—Is

*

sources.

the present

ger of

ex¬

in sales
and projected

growth

combined

from

trend

which

the

of

—

economic—an

is

first

tension

25

•

New York tuna*.

Direct

Wire

to

PHILADELPHIA

,

„

Chronicle

The Commercial and Financial

.

.

.

Thursday, May 14, 1959

(2192)

4

sition

serious

is

becomes

a

when

bubble

on

enterprise
whirlpool

a

/T
Steel

speculation"? And again: "Dayto-day fluctuations in the profits
of existing investments, which are
obviously of an ephemeral and
insignificant character, tend to have
an altogether and even an absurd
of

Observations

.

.

.

By A. WILFRED MAY

influence

FOR TIMELY READING

has been lauded as the
of. Adam Smith, Ricardo,and

even

Darwin—and Sumner Slich-

ter. His defin-

work,

p

Interest, and
Money, which
was first pub¬
lished in 1936,

In conclu¬

employment.

sion, he chargess the British econ¬
omist with setting up a straw man

of

opposing

valid

the

twentieth

century

held

when

Keyis beng used to

today

And

doctrine

nesian

sanctify the planners on both sides
of the Atlantic, and by the Gal¬

loping Inflationist jockeys in their
castigation of the "phobia'' of any
citizen
presuming
to
advocate
budget balancing; an authoritative
examination of the l'ountainhead
the

of

philosophy

new

long

is

past due.
This need

is

filled through

now

of a thorough but
book, THE FAILURE

the appearance

lively
OF

new

ECONOMICS: An

NEW

THE

Analysis of the Keynesian Falla¬
cies,'by HENRY HAZLITT (480
pages, $7.50.Van NostrandPrince¬
ton, N. J.).*
Hazlitt's

Mr.

To

vital

480

chronic

with

(creeping and galloping),

comes

pages

a

author

The

holds

beauty contest technique.
involved and technical
As depicted by Keynes: "Pro¬
without precision; with being full
fessional investment may be lik¬
in

being

of

looseness

of

leading

terms.

those newspaper compe¬

to

ened

"Play-by-play" Mr. Hazlitt chal¬
lenges and refutes in detail every
Keynesian theorem, running the
gamut- from the fear of thrift
and
saving,
the
alleged
de¬
pendence of employment on "the
propensity to consume," and dis¬
paragement of the gold stand¬
ard; to the Britisher's contention
that unemployment is not caused
by wage-rates that are excessive
to prices or production.

that the

use

titions

which

in

.

icit

policy

Keynesian

mendations

recom¬

the virtues of def¬

as

financing,

of

paper

money

along with inflation (creeping or
galloping), of the "euthanasia of
the rentier," of government direc¬
tion of all investment, of perpetu¬

ally

low

interest

and

rates,

huge- public works spending.

the

substantial

of
.

What

Limits to

-

♦Pre-publication
book

icle"

Aug.

11,

of

following: "Speculators

excerpts
from
Mr.
in the "Chron¬

appeared

Sept.

28,

and

4,

harm

bubbles

as

may
a

on

do no

steady

Sept.

stream of enterprise. But

1958.

the

po-

and

their

we

'

W. C.
115

BROADWAY

*.

i

s*. *

V-t i

*' ii

,,

t

that

there

produce more, can we ob¬
goods and
services.

more

Dividing Up

FIRM

'

v {

is

pragmatic limits to the ex¬
tent that living standards can be
raised.
He reminds us that only

Most

r

workers

• (

Langley & Co.
NEW YORK 6, N. Y.

/.It

during the first quarter to a rate approaching the record pace of
1955 boom. Residential housing has been particularly strong

helped to produce substantial sales gains for furniture and
appliances.
;
;
;
Business expenditures for capital equipment, while still 15%

and has

most household

below the 1957

the

margins serve to dramatize the advantages of modernization and
thus give additional impetus to an upward revision in capital
spending plans.
The "Monthly Review" noted that the unemployment situation

may

has

the form

recently shown the first distinct improvement in a number
However, the rate of unemployment remains at a much

of months.

recoveries.

are

for consumer goods as well as




in business capital outlays.

Department reported on May 11 that

fell 735,000 in April to a postunemployed workers. Employment
increased 1,184,000 to a total of 65,012,000.
There were more
people at work in our country last month than in any other
the

number

April

of jobless

low

recession

of

persons

3,627,000

record.

on

Nationwide Bank Clearings Up 14.6% From
clearings

Bank
with

a

year ago.

this week will

1958 Week

show an increase compared

Preliminary figures compiled by the "Chronicle"

telegraphic advices from the chief cities of the country,
indicate that for the week ended Saturday, May 9, clearings for
all cities of the United States for which it is possible to obtain
based upon

the corresponding
at $24,739,750,483
against $21,581,524,881 for the same week in 1958. Our compara¬
tive summary for the principal centers follows:
Week Ended May 9—
1959
1958
%
New York
—' $12,675,484,655
$11,196,391,426
+ 13.2
Chicago ;
J 1,224,899,764
1,052,637,759 + 16.4
Philadelphia
1,121,000,000
1,005,000.000 +11.5
Boston
778,973,050
677,950,940
+14.9
weekly clearings will be 14.6% above those of
week last year.
Our preliminary totals stand

____________

Increased Department

Store Sales Forecast

Department store sales in 1959 "may well reach $12.8 billion"
and total retail sales "will better last year's figure by 5% to
reach the impressive total of $210 billion," an official of the
National Retail Merchants Association predicted.
Speaking

May

11

at

the

annual convention

Carolina Retail Merchants Association in

of-the North

Durham, N. C., J. Gordon

Dakins, Executive Vice-President of the NRMA, which represents
more than 11,500 department, specialty and chain stores through¬
out the country, said:
"Prices will remain relatively stable.
more

than

Prices won't rise much

lJ/2% between now and late 1959."
noted that "business will be good this

The NRMA executive

competition will be extremely keen."

year but

Steel Contract by

June 30 Deadline Seen Unlikely

President Eisenhower is in the steel labor crisis to the

bitter

end, but it's doubtful that even he can—or will—force a satis¬
factory settlement before the June 30 strike deadline, according
to "The Iron Age," national metalworking weekly.
until

in the picture
"Iron Age." But it added
indication there will be no new steel contract

final settlement

that there is every

is made, said

The

metalworking weekly had this to say about the President's

probable role in the negotiations:
"While

high

7

a

by the June 30 deadline.

improvements in non-wage beneMAY II, 1659

page

is'

Employment in April Set All-Time High
The Government Labor

in

on

decline in joblessness to markedly lower levels

dependent upon a continued further expansion in final demand.
The New York bank concluded that the setting may no .v indeed be
favorable for a substantial further strengthening in the demand

not also be received in the form of

Continued

A

corresponding stages of other recent

during

than

level

higher

The President's influence is expected to remain

distributed in
of higher wages, they can¬
gains

peak, advanced sharply in the first quarter of this

Further advances are foreshadowed by the marked rise in
machinery orders as well as by recent surveys of business capital
spending plans. Rising sales, diminishing margins of extra capacity
in some lines, and the rise in profits all make it quite possible
that actual capital outlays during 1959 will exceed the higher
volume projected in
the surveys. In particular, higher profit1
year.

the Pie

importantly, it is pointed

out, within the limits of increas¬
ing
productivity
gains, choices
must be made.
If in a particular
area

the New York bank, that the

likely, according to

seems

the

are

and Hazlitt).

BEEN ADMITTED TO GENERAL

:i

this volume that
union leaders

must be learned by

High level production is the in¬
dispensable prerequisite to high
level consumption (see above dis¬
cussion of Say's Law by Keynes

Mr. Henry G. Barnard, Jr.

*

out in

pointed

hedging against possi¬

steel and other strikes and thus merely "borrowing"
the future.
Furthermore, with businesses already accumu¬

primary spur to further advances in output will have to come
from consumer spending and also gradually rising business invest¬
ment. Consumer demand has staged a marked revival in recent
months as personal income has risen to new heights. Retail sales
have been at record levels with buoyancy especially notable for
durables and other postponable items.
Recent automobile sales
have been encouraging, while consumer credit growth accelerated

'

One of the fundamental lessons

tain

PARTNERSHIP IN OUR

Increases

Wage

And Benefits?

as

HAS

of

.

Furthermore, Mr. Hazlitt with Hazlitt over
generous,
particu¬
particular thoroughness and pene¬ larly in this period of our raging
tration
convincingly
demolishes bull market, in giving Keynes the
Keynes' fundamental attempt to benefit of direct quotations as the
Hazlitt's

cost

benefits and you have
a sizable degree of wage inflation,
Dr. Backman maintains.
non-wage

pick out the six prettiest
faces from a hundred photographs,
On "Creeping Inflation"
the prize being awarded to the
Adopting
the
premise
that
competitor
whose
choice most
nearly corresponds to the average "creeping" price inflation stems
preferences of the competitors as a from wage inflation, Dr. Backman
the
"creep-ists"
that
a
whole, so that each competitor warns
has to pack not those whose faces "mere" 2% or 3% annual rise in
which he himself finds prettiest, the price level is nothing to be
but those which he thinks like¬ complacent about.
It is a matter
liest to catch the fancy of the of simple arithmetic, he points out,
that such a rate of increase would
other competitors.
."]
Again in attacking Keynes' cri¬ double the price level and wipe
tique of stock exchange mores, out half the purchasing power of
Mr. Hazlitt defends them on the the dollar in a period of 24 to 36
conventional grounds of the spec¬ years. "A cut of 50% in the pur¬
ulator's constructive services to chasing power of the dollar in
the farmer, to the building-up of a generation is nothing to be com¬
the country and the standard of placent
about,"
he
warns
the
living via its facilitation of capi¬ Slichter-ites.
tal investment, etc. But is not Mr.

The author likewise demolishes
such

competitors

the

have to

the long-term gains in pro¬
ductivity. Add to these wage in¬
ing

creases

of recent weeks appears to have

lating inventories, less net stimulus to overall activity may come
over the rest of the year from a further speed-up in stock building.

the crucial managementlabor
wage
controversy in the
steel industry, with Presidential

flation
Bulls and Gulls

writing,

bad

J
The favorable economic news

from

citizenry sorely threat¬

the

ened by

(4)
the public's sup¬
clivities,
give Lord Keynes' tenets a com¬
planting emphasis on yield with of long-term contracts in key in¬
plete
brain-washing.
Mr. Hazcapital
gains
(via "passing on dustries, as steel and automobiles,
litt reports himself unable to find
shares to gulls at higher prices"); are
aggravating
this situation;
a
single
important
Keynesian and
finally Mr. Hazlitt objects to promoting an uninterrupted up¬
doctrine that is both true
and
ward march of wages and labor
Keynes' trenchant analogy of the
original.
He charges "the Mae¬ stock
marketeers'
behavior
to costs—at rates actually exceed¬
stro"

Index

Auto Production

ble mid-year

most timely volume—
DETERMINATION,
by
the most interesting JULES
DACKMAN, 310 pages,portion of Mr. Hazlitt's volume is
$0.75, Van Nostrand,
Princeton,
his treatment of Keynes' chapter
N. J.
This is not a theoretical
(XII) on the "State of Long Term
study.
Based on exhaustive in¬
Expectations." This follows Key¬
vestigations made for government
nes' consistently brilliant insight
agencies and industries, Dr. Backand-,.satire when discoursing on
man
makes a thorough analysis
aspects of speculation; with real¬ of the factors which practically,
istic debunking, painfully appli¬
in
the market place,
determine
cable .to
American stock
general changes in wages and in
markets—including the 1959 bull
non-wage benefits.
variety.
Wage inflation leads either to
It
is here,
if anywhere, that
Mr. Hazlitt's master refutation is price inflation or unemployment,
During both
vulnerable. He violently disagrees says Dr. Backman.
with the Britisher's
citation
of the war and postwar years be¬
tween 1939 and 1957, increases in
abuses stemming from:—(1)
the
separation of ownership from con¬ money wages and non-wage ben¬
efits have been exceeding gains in
trol (which follows the theses of
Berle & Means, and Burnham's output per manhour by some 2%
or
3% a year, thus creating an
"Managerial Revolution"); (2) the
irresistible
pressure
for higher
stock
market's
liquidity
fetish,
'-:
:
V-'}';•;
(3) the public's forecasting pro¬ prices.

M»y

Wilfred

A.

Fair,
post-Fair,

Dealers.

Food Price

much of the current expansion represents

Galloping Wages

Possibly

the New,
and

Creeping Inflation and

On

WAGE

the bible of

as

it.

On Bubbles,

—

serving

even

Business Failure#

forged ahead of their pre-recession peaks, there are
encouraging indications that the pace of the advance may continue.
Yet a number of uncertainties remain. A key question is how

I

«

*

:;s

classical
principle only in a sense in which
press conferences discussing the
no
import a n t economist ever intricacies of
productivity and in¬

in

the

book

full

for

influen¬

the

proiessional economist, or student.

fallacy,

Kcyesian

his contrary theory that
consumer purchasing power must
be maintained above production

of

tial

and Industry

the market,"

having

fundamental

namely

Employment,

been

Commodity Price Index

strengthened business and consumer confidence in the economic
outlook, according to the May "Monthly Review" of the Federal
Reserve Bank of New York. With total production and spending

a

General

most

State of Trade

(at least to this reviewer) refutes

peer

has

Trade

In
any
event,
Mr.
Hazlitt's
penetrating and scholarly analysis
of "The New Economics" hence¬
production of all commodities is forth must surely be an indispen¬
not possible, and that purchasing sable
accompaniment of Every¬
power grows directly from pro¬ one's reading of Keynes, be he
duction. Mr. Hazlitt convincingly government
official, lay voter,

Keynes

Theory

Output

CarIoadin?s
Retail

Say's Law. This famed
tenet holds that a general over¬

Maynard)

The late Lord (nee J.

The

Production

Electric

discredit

Apostle

Dressing-Down An

itive

on

W-M' The

a

he is not expected

to inject himself into

the fracas

which would replace collective bargaining, he or other
administration officials will bang away at this theme; no

way

Continued

on

page

35

>

Volume 189

Number 5846

.

.

.

The Commercial and Financial

week against $75,000 a

a

Bondholders for Whom

through

By DR. IRA U. COBLEIGH
Enterprise Economist and Author of "How to Get Rich Buying Stocks

A

look

the assorted tax-exempt

at

road

values provided by toll

bonds.

revenue

week

re¬

The Challenge of Soviet
Economic Expansion

quired for interest, operation and
maintenanc e.. From August

The Roads Toll

December
are

revenues

of bond interest.

covered but 45%

Things

net

looking

a

bit

better

By HON. C. DOUGLAS DILLON*

here now, especially with the es¬
tablishment of charge accounts for

Under

regular customers and a plan of¬
fering discount rates to trucking
companies.
; The number one headache

ing

World

over

War

II

in price

our

between

low of 96.

roads,
some¬
thing had to

a

be done about

a

high of 106 and

Present price is 10214

est

to

yield 3.10% to maturity. Inter¬
coverage
has been satisfac¬

gestion-

con-

and

speeding
inter

-

driving

•

u p

Ira

U.

Cobleigh

city
time

by -eliminating

crossings,

traffic

lights, and urban bottlenecks.

So

program: of*

was

:i

highway

;

exceeded estimates and West Vir¬

ginia 3%% bonds which were of¬

the

fered in April 1952 at 99 defaulted
on the June 1,
1958 coupon. This

policy,

realities

some

original bonded debt had been re¬
tired and interest charges last
year

is

an

were

earned 1.88 times. This

visit

of you

c a

will?
11 Chat

of

ture
o s e

p

have the

As long as dif-

and

political

sys¬

.

.

"struggle" are, of course, bent un¬
ceasingly to the overriding Com¬
objective of world domi¬
nation.; This afternoon, I want to
munist

j

I

explore briefly with you
i
nomic aspects:
*'
'

i c-'Yj

vast

struggle—apolitical
.

t,hYv|
re-;!
hie/J

a

struggle, an economic struggle, an
ideological struggle."
-;
.
All
these
elements ofC- the

C.

Douglas Dillon

That

play

I used the occasion of

its eco¬

Seven-Year Plan

The

oppor¬

tunities between this country and
the USSR.

not

were

we

exist, contradictions between
them are inevitable. Peaceful co¬

sup-7"

d 1 y

trade

us,

quiet life.
social

existence is

paintedYa:
glowing

tell

tems

Those ;]
w'h o

him

a

ferent

the'/.I

talked"wi

;

economics

an ever more

is

coming

to

prominent role

a
speech in New Orleans to ex- In the struggle was made crystal
plain why an expansion of trade clear in the recently announced
on
Soviet terms—meaning long-, goals
of Soviet Russia's Seven
term credits from us—would be Year Plan. We should not make

unacceptable to this country. Upon
his return to Moscow, Mr. Mikoyan informed the 21st Soviet Party
Congress that I was "fanning up
the cold war." Communist newspapers

have since echoed this line,

the mistake of giving the Plan less
than our most serious attention,
This is not just an economic document. It is a political and psychological document as well. The.fan-

fare with which the
Plan

-

The Western Targets

was

Party

Seven-Year-

at the 21st
and during last

acclaimed

Congress

week's May Day observance,
makes it clear that the Communist
leaders regard it as a major weapon of foreign policy.
According to the Soviet leaders,
the basic objective of the SevenYear Plan is, and I quote, "the
maximum gain in time in the
munist actions, on the other hand, peaceful competition between soare
almost invariably ballyhooed cialism and capitalism."
as furthering the Soviet objective
Y The Soviet Union has already
of "peaceful coexistence."
made substantial strides in this
Accusing selected personalities
target groups in the West of
"waging cold war" on the "peaceloving" Soviet Union is typical of
Communist tactics.
Whatever
conflicts with Communist designs
is smeared with the brush of the
Soviet-created "cold war." Comand

professional communicators
only too familiar with the
problem of semantics when it
comes to interpreting Communist
intentions and actions. Just how
As

you are

peaceful is

"peaceful coexis-

competition. This is borne out by
cold, hard facts. Our best estimate of Soviet domestic economic
expansion place the average annual rate of growth of the Soviet

address

by

Secretary

as a whole at between
7% over the past eight
Their industrial growth
Continued on page 24

economy
6

Dillon be¬
fore the Overseas Press Club, New York
City, May 7, 1959. . * » •
.
r .
.
*An

and

years.

financing, since the govern¬
sponsored roads would be
toll free. Finally, both investment
bankers and investors have be¬

road

ment

disenchanted

somewhat

come

as

particu¬

lend

would

(formerly of W. C. Pitfield & Co., Inc.)

now

associated with

vital element in

transportation system be

lied by
us

a

value?

lection

We have

an

prepared

investment report on

support

financial

its

rather than see
its

is

mean

Premier Mi-'

koyan.

,

.

-

'

I

this

to

,

>

word of a former; Soviet Foreign
Minister, who said, and I quote. >
"Peaceful coexistence does not

on

country of Soviet Deputy1

however, revenues average $48,000 regards toll bonds especially when
they've seen several issues drop
20
points and more below the
original offering price. There are,
however, some worthy issues to
choose from; the outstanding sup¬
We are pleased to announce that
ply is being reduced by annual
redemptions, and there is always
a
possibility that a given state
MR. JENS K. SCHANKE

excellent showing,

stepped

to

enough

—*

was

just after

*

Road. It opened for

apparently

I

Y Y

the a Formosa r Straits,

economic

sensitive

toes. That

'

May 22, 1958, and seemed
a "natural," offering a congestionfree speedway out of downtown
Chicago.
For its first 19 weeks,

Soviet

of

- •

.

^enc^^If-Berlin}Cl^ Middle East.

Com munist

.

use

in industrial production by 1970. Says

The last time I reported- to the;
American people in some detail on

•

full

*

;

us

international investment. Y/ Y

paid in October and there is
tory, and $12,311,000 in principal
amount of bonds was retired last hope that the coupon due Dec. 1,
1958 (which also defaulted) may
year.
Coverage on the 1952 In¬
Meanwhile, the
denture Project, secured
by the shortly be met.
W e s t - Virginia
State
Supreme
section from Valley Forge to the
Court ruled, in March, that the
Delaware River and the North¬
eastern Extension, has been less Turnpike Authority must pay in¬
terest on past-due interest instal¬
satisfactory, r. Earnings failed by

Indiana Toll

for Economic Affairs

offer best opportunity for eventual take-over. Secretary Dillon urges us to
continue vigorously our Development Loan-Fund; continue
military assistance and defense support; continue World Bank,
Fund, and Export-Import Bank; intensify programs of techni¬
cal cooperation; liberalize our tariff policies; and strengthen
government's collaboration with business to foster private

swiftly, launched;'

1/1/85, and the 3%s due 7/1/88.
By the end of 1958, $32,023,000 of

State

leaders calculate the underdeveloped nations

building*
ments.; It's all been very discour¬
and) the a considerable margin in 1958 to
cover
debt service on the 3.10% aging and the bonds descended to
easy and obvious way to finance
a low of 43)4 in 1957;
They sell at
same
was
by charging tolls suf¬ bonds due 6/1/93 and this issue
around 56 today, flatY^;
sells
at 78514 v to'
yield '3.80%.
ficient
to
build *; and
maintain
What keeps the West Virginia
the new high - speed - multi - lane There's a provision, however, that
picture from /being
after the 1948 series of bonds has Turnpike
arteries. :
;.; •' % ;Y:Y:.?/ vV;
,7:
hopeless, with 1958 traffic cover-;
The
Pennsylvania
Turnpike, been retired,; earnings from the
main (and first built) section of ing only half of the bond interest
nearly completed before the war,
requirements?
Three things: (1)
had been successful from the start. the road will carry over for debt
a rising trend in revenues, up 20%
service * and
retirement ' of
the
It set the pattern.'
The Merritt
for the first two months of this
3.10s. : • "
: -7'*"-"."
Parkway in Connecticut and the
; Ohio
Turnpike
has
recently year; (2) a legislative bill (which
New Jersey Turnpike were early
was not acted upon in the last ses¬
turned in quite satisfactory re¬
successes,, and ■ lent
encourage¬
sults. 7 In 1958 it gained 6.4% in sion) to have the State assume the
ment to the building of a whole
cost of policing the road, and re¬
series of super-highways in
19 operating revenues over 1957, and mit taxes on gasoline sold on the
covered interest requirements 1.52
states—all
based on the theory
thruway and (3) the more remote
times. • This
highway,
however,
that (1) construction costs could
possibility that the state might
be accurately estimated and
(2) got off to a poor start and had to
actually make up operating defi¬
toll revenues from a given thru- dip heavily into its Bond Reserve
cits
and
thus
insure
solvency.
to weather early deficits.
Ohio
way could be predicted with con¬
Here is the "iffiest" of all the toll
siderable accuracy and reliability. Turnpike Revenue 314s sell today
bonds, but an interesting specu¬
at around 87 to yield 3.85%
to
Some roads were built within the
lation at a whacking discount for
engineers' cost estimates and lived maturity.
the more intrepid variety of bond
Other
better
grade
turnpike
up to the original revenue pro-;
bonds would include New York buyer.
jections with reasonable fidelity.
We've gone far enough in this
Others not only missed by a mile, Thruway Authority 3.10% bonds thumbnail sketch of pike bonds to
due 7/1/94 now selling at 86)4;
but by millions.
Some allowance
see that a number have failed to
"lorida Turnpike 314s due 4/1/95
for reserves and interest charges
live up to their billings, and that
now selling at 86; Commonwealth
during construction was added to
there
were
some
pretty dismal
of
Kentucky 3.40%
bonds due
estimates, and included in the
calculations, in advances of costs
7/1/94 now selling around 93; and
total amount of bonds offered for
and potential revenues. There are
New Jersey Highway Authority
public subscription. Even with re¬
also some pretty good bonds to
serves
included, however, delays (Garden State Parkway) 4%s due choose from and some attractive
1988 priced around 10314.
and higher than expected build¬
tax exempt yields, especially for
The above represent a cross sec¬
ing costs exhausted, in certain in¬
those individuals in tax brackets
stances, the proceeds of bond sales tion of the 7 better grade bonds. 55% and higher.
and some highway authorities had There are others, however, that
We're unlikely to see substan¬
to sell more bonds to finish their have been having a much tougher tial
new
toll bond offering for
time making ends meet/ For ex¬ some time to come.
roads.
The net result has been
Most of the
a wide divergence
Calumet Skyway
(Chi¬ principal roads projected in the
in the market ample,
cago) 3%% bonds due 1/1/95 now post-war era have now been com¬
performance of, and investor con¬
fidence in, toll road bonds. -Y sell around 67 to yield 5.47% to pleted. Further, the Federal high¬
One of the best performers has' maturity—and this, mind you, on
way program whereby
the gov¬
been the New Jersey Turnpike. a tax exempt obligation. This issue ernment
puts up 90% and the
There were two series of revenue relates to a toll bridge highway state but 10% of construction costs
bonds issued here, the 314 s due* linking Chicago to the Northern
pulls the rug out from under toll
a

of

Russian

outstripping

was

highway

Secretary

Top U. S. economic official asserts unveiling of Soviet's SevenYear Plan, while short-changing the consumer, assure contin¬
uation of threat to U. S. Maintains no possibility of Soviet

nobody larly when full reserve funds have
among toll bonds has been West
paid
much
attention
to
super been scrupulously maintained at
highways. There were relatively all times. Today the 314% bonds Virginia Turnpike. This 87.6 mile
swath of Jaguar bait runs from
few cars on the road, none being due 1985 sell at 99 to yield 3.11%
Charleston, West Virginia to the
to maturity, (the longer term 3%s
built, and gas
Virginia line and was supposed to
sell at 9814).
rationing vir¬
,
offer a swift short cut for truck
Pennsylvania Turnpike 1948 In¬
tually
elimi¬
denture Project covers the origi¬ traffic, which plies in consider¬
nated
pleasable volume between Virginia and
nal mileage section from Valley
ure
driving.
the Ohio Valley. But whether toll
But
in
1946.
Forge to the Ohio State line. This
rates were set too high, or feeder
when millions
turnpike was financed by 314%
roads too steep/circuitous and in¬
bonds issued in September, 1949
Of
new
cars
and due 6/1/88.
These bonds in adequate, traffic was woefully be¬
and
trucks
the past five years have ranged low estimates. Maintenance costs
began swarm¬
During

5

(2193)

Chronicle

sul¬

bankruptcy. And the best
Your correspondent's se¬
based on a composite of

The Dominick Fund, Inc.
Copies

are

available

on

request

yield, and probability of sustained
interest payment would be Maine
Turnpike Authority 4s due 1/1/89
now

selling' around

4.85%

J. F. Reilly




& Co., Inc.

to maturity.

sense

a

labored

87,

yielding

This is in no

recommendation;
attempt

valuation,

and,

at

just

a

comparative

besides,

it's

pretty highway to travel on!

Dominick

&

Dominick

Members New York, American & Toronto
14 WALL STREET

Stock Exchanges
NEW YORK

a
-TJ

€

The Commercial and Financial Chronicle

(2194;

Inflation

on

tie likelihood that the present demands made on Federal and State

with the entire

governments will decline; instead,

invested

(1) examples of what inflation can
(2) evidences of,
uncertainty about the future of our dollar; (3) causes of
inflation, and (4) what individuals can do to avert this phenomenon.
Unbalanced government budgets and nature of gov¬
ernmental expenditures is, with labor's push on price, placed
high on the list of many factors creating inflationary conditions.
Mr. Forgan advises that if the public and Congress favor
inflationary fiscal practices then we should take the "painful

i

»

i

country and how it affects people;

step"
There has been

necessary

growing

to

aware¬

prices

year,

even

as individuals, what can
help in this endeavor? '
-

First,

do to

we

write to those who
in the Federal Gov-

we can

xopresent

us

rose

subsidies that have become

fa-

so

United States worker the same miliar
percentage of his salary as it does omy. For example, last ycai tne
in Brazil, .the price would: be about.
subsidies ran over $5 billion.
$4'-or. $5 per pound. He also stated The Congress may take some ac1 hat prices lor stapie commodities
nricps for stanle
tion regarding these subsidies, but
inat
commioqiues,
£ it+tr#-Yrtrior.™ thaf-Vh»v
such as rice and beans, have dou-/ :"\ere is little evidence that they
hied since last Aueust
or in less
will be substantially reduced. The

present

just

are

what

^

time?'

year's

a

These
of

°£°y£

|

than

international

the

last

age

problems, such as
difficulties in North
flationary trends in the United Africa. This is not a judgment of
States. It is encouraging to see that the financial course France fol¬
the people are
lowed in recent years but only a
becoming inreport about problems that led to
ereasin g 1 y
the French inflation. Because cor¬
a

of the seriousness of the In¬

ness

Brazil

that if steak would cost the aver-'

for them.

pay

the long-iange prospect is foi

.■■■•_

Thursday, May 14, 1959

.

greater expenditures on the part eminent—our representatives and
by over 20%. There have been of government.to provide benefits Senators—and insist through them
price rises almost as large in each, and services considered desirable that the Federal Budget should!!
of a number of years.
A recent by manjy persons.;,
% be balanced; If expenditures can-V
report from a United States.ConAlong with the predictable de- not be reduced, then taxes must,
sular official in Sao Paulo reveals ™ahds must,be put the enormous be increased to provide the
neces-1

Chicago banker reviews:

j

meal

one

In

Vice Chairman, The First National Bank of Chicago

a

just

amount.

By JAMES B. FORGAN*

do in

trust fund; when

he received it, he was able to buy

tively

Comments

..

present subsidies-and

few examples

a

inflation

do'; in' a,

can

I- Second, we should insist that if.
spending

mQre

planned

flre

ernment

lareer

or

the

same

of

should

income, or
be included

mciuaea

j

^"ll"uc. What an

further deficit in the Federal
budget leading .to greater infla-

country and how it affects; the
people. It is vitally important

eovernment^unending

sj"Vlf L°Pi™™Sn ^S^n"1dnr10mM
allowed to happen m our^own.

the idea that; government *should i. Third, we should encourage

well

mav

for

provisions foi

?
amount

revenues

gov-

provisions

o

..

benef;ts

f0r additional

services

to-Hi^cv^S
expenditure must aoStoa

parents

SuT

JJJ

funds for these expenditures.

sary

th^t-^^^ts^^^^^

tibiw
sav-

subject.
It is
particularly
appropriate

Saving results in each person
established in the minds of many making certain that he and! his
rective
actions
were
not
taken
Uncertainty About the Dollar / * people.. Unfortunately, in spite of family wiU have financial security
earlier, the French franc over the
;+
..
+„11rt :fL,f
the persistent, demand for more m the future. This is where a balyears fell from a value of 20 cents,"
iu
i otof
government expenditures from a need budget begins, with each
the
or five to one dollar, to nearly 500
jJnited states have ^eip^ned- manyi different .areas of the coun- family making certain that they
to one dollar.
As a consequence,
a II
are living within their own budget,
and are «ihefe:;appears to be an uriexpected by most authoii-.

that

few

concerned

this

about

important

the average

savers

possi¬
bility of infla¬
the

of the im¬

one

B.

James

Forgan

portant prob¬
lems facing us at this time. History
teaches

that in those instances

us

flation
save

made

francs.

ings at

minimum because they

a

to decline in its

in

For

out of
has re¬
in earlier

disaster

example,

American history,
ary

the Revolution¬
War inflation, and the Con¬

federate inflation caused

hardship
Germany in

and

suffering.
In
1920-23, prices increased a trillion
times.
More recently, Argentina

has had

increase in the cost of

an

living of 800% since 1948.
zil,

living

300%

costs

the

in

risen

have
ten

same

In Bra¬
over

years.

In

France, prices have increased an
average of almost 8%; a year since
1948; in Greece, also, nearly 8%>
a year; and in
Turkey prices are
103% higher than in 1948.

causing these price

During the past ten
France, for instance,

in

the government ran

budget

deficit

smaller.

As

franc

became
rose.

less

of

the

rather than

valuable

underlying

franc,

causes

spent their income

and

because

were

not

First

as soon as pos¬

sible, because the longer they kept
money in their pockets, the less
it
would buy.
They have had
first-hand knowledge of the con¬
sequences of inflation. The cost of
living in France has more than
doubled in the last ten years, and
is 25 times greater than in 1938.

back further, but still in
lifetime, the inflation has
been even worse. The pensions of
Going

our own

French
were

World

they have
value

of

War

I

veterans

quite substantial; now
declined to a present

once

less

than

dollar

one

even

to

per

about

ten

The equivalent of four dol¬
lars saved in 1914 now is enough
to

buy only

a newspaper.

has

France

begun

to

Recently

take

some

steps to meet its finan¬
cial problems.
courageous

Germany's
World

War

experience
I

most terrible

became

People

the

The German

valuable

had

after

perhaps

was

of all.

mark
paper.

to

only

carry

cur¬

in large sacks, boxes and
wheelbarrows; they lit ciga¬
rettes with it, and eventually had
to

sweep

address

Women's
National

by Mr. Forgan before the
Forum

sponsored

Bank of

May 5, 1959.

by The
Chicago, Chicago.
'

it

One

from

the

German

streets

during

as

this

period received an inheritance
equal to $65,000 that his grandsfather had placed in

a

conserva¬

re^onab y stdde in,

ln nerSl
causing some^oncernaboul

to

the

pav

taxes

tial,r theri must! we not take the: .,; Fourth and last; we can encour-'
Painful steps necessary to pay for age our friends, neighbors and asT;
investnuints and var^us tonns of'' thcm hy*ve are to avoid unbal- sociates to become better informed:!
savings. There are apparently a anced government budgets and the about the evils and causes of in-;
number- of persons who believe !ntlationaiy consequences. (A Jhi-. Ration, just as you have demon-.

the

lone

Ihnt

ttoarlv

n

value

the

table.

hut

of

in

decline

slow

inevi-

inflation

An

insurance

the

of

50%

mean

an

The idea of creeping in**

vears

flation is

tempting and has gained
acceptance by many. I do not ac-;
cept this belief. A slowly rising
level of prices erodes the value of
our savings, our investments, our
insurance, our pensions, our wages
and our salaries
* y %•>

'

M

,

.r

j

^ luany pei sons oeiieve. inai
recent behavior of

bond
the

markets

spread

cholocv
cnoio^y.

an

is

nidicatiop of

inflation

psy-

market;curi uukcl
cui

slock
siock

au

,

is

below the

now

rated

Few

tors

as

such
„

price supports,

as

,

,

subsidies,

...

.

iiivessuniq,,iiives

to
to

some

hedge.

...

important pdiht to rememthem result in

inflation'flrv

ect

increases

pr„i

hMfp,Pf

Fnnh

niwsnrps

lu
the

-

ol

size

the

md

Vnrini,q cities

Ac.

as yaiious cities and
obtain

Federal

aid

lt

that we

is

taxes,.are

tion

is

V

ends

The

have

ev

Z

net

re-

inflation

or

tnatwe nave lnnation, or

*

ii

riZ

increased

avoided

eneh

and

lnfla-

v

bills

of

created

tainty in the minds of
about the

uncer¬

some

people

stability of the purchas-

linnnnular

revenues

second factor

A

them

these

developments

for

roicn

to

necessary

some groups in
in

have'beeivsuccessihTrn

ob-

in

interest by a few .individUnited States in!ithe

the

V'-

are

many

infi atmn

'■

possible

anH

tion of each

We

one

the' list

on

factors

mav

F^an

causes

unvpmmpnt
government F»uri<*o+
budget

-

A

01 ,su^n a lV;c'

Inflation

An,lat11.?

destroys the possibility

or

hotter future

y

Garrett-Bromfield

:

^

.

of

Garrett-Bromfield

&

Co.,

650
of

which

consider

be nioparT
placed

can

the' many
to create

of

combine

7

(Special to The Financial Chronicle)

DENVER, Colo.—Arthur E. Athas ^joined
the staff of

kisson

La?t yearV a Jnvestment Service Co.," 916
f
recession
hourlv
Vose: e^nZ faster—three thnes^tol Broadway. He.was formerly with,
ne? Shivy' Financial Securities Co.. y y;
wa^es

in output per manhour,

,

To provide; a return for their
stockholders, as well as to get the

*

.

..

..

.

,

:

With Peters, Writer
DENVER, Colo.

conditions:1

evrpcl

5

_

Michael W.

increasing,number of American McGuire is now ...affiliated with
-.workers,> businesses have had ? to -Peters, Writer & Ghristensen, Inc!;

^ .prices.^ As the cost of labor - 724 Seventeenth Street.
,Ms,. ipcre3sM,,f3ster.th3n produc^ d

k

^

1

dn

^

v

7

tmty, businessmen have had to
-adJus-t Prices upward. .Even so,
ji ^ amoun '^n^f111,can carP°Jratinns ^ •

expenditures;- which

Federal

—

^

,

(Special to.The Financial Chronicle)

,^sne?ded to ; build new fac^ lt«and pro vide employment for

hp

pan

Joins Inv. Service

^

-

iim

sijhstantkilIv G

Geo. M. Baker Adds •;!
(Special to The Financial Chronicle)

CHICAGO,

111.'—

*

J.

Michael

n

nf

.

"

that total government spend¬

ance

Lynch, Pierce, Fenner




life

a

dropped more than 20% since 1947. ^ Hiordan is now connected with
vernment tnconfe
ave resuIteJ
In a period such as the present, it George M. Baker & Co., 208 South!
tho npprl for tbV povprnnilril'is important both for business and
111
tne
La Salle Street, members of the
need ior the government
lo.
r
stnrk F.vrhan??p
Hp
labor not to inwo„Q wages and
increase
Midwest Stock Exchange. He was
to borrow money to pay its
biljls.
costs more rapidly than overall formerly
with Merrill
Lynch,
Unfortunately, there is no assur¬

Marketing Department

&

Smith

'

ing

in

cline.
and
from

NEW YORK 5, N. Y.

Offices in 112 Cities

such

causes

inflationary
are

70 PINE STREET

and fosters the devel-

the Midwest Stock Exchange.

,

!

Z

Causes of Inflation(

There

•

INCORPORATED

of

suggest,

Government

Merrill

a

^

thef

nauon tnat provides tne

Seventeenth Street, members

people mav Vmvn .«nuahf +n toOoci-nmes out even wnen Dusi
may have sought;toJ;
ri
l,
.
y
d thi
b

high

•

new

DENVER, Colo. — Howard B.
Stack has been added to the staff

not1^^?^ aaithorouPlv^ariTifha?-ah

•

and

must leave

we

(Special to The Financial Chronicle)

da°tioA rftof S?8tatedyeS;been refIected •in W During

two

leisure time

nennlp

snmp
some

f

nos-

a
through*

eniovahle

nation'that* nrovides

a

With

contributing to

laboring costs. Since the end

hai labor haVft,hflon
ol World War

;

Call

more

onment

inflation is the substantial rise in
many

in- power of xneir money. It nas
power oi their monev
11
added to their fear of inflation.

As

to

It i«i

children to have

products. However,

Nohodv wants

so it is more difficult

nolitienllv

Darentc

oui paienis. n is pos-

our

m0re

nea"n>moie le.isure time, ana new

match the increased exnenditures.

rate, the combination of
has

communities^

higher taxes,

States

•

tax

otbpr

United

even moie enjoyaoie tnrougn
increased, travel, greater aids to

health

politically unpopular to raise

purchase of gold in Canada.-

block?

even

rnmmnnitv-5-

the

paying

the

our

i

-uT

Slble for

bfe

avoided, each community framework

up

in

us
•

the

uals

large

of

.

than that of

and

r'-

a

All

■
*

countries about the future strength
of the American dollar.

factors

public of

w? umie,a fiales
toda7 en3oy a^lifeMnuch better

nrni

V- i"
led-

ytner.communities. JNooody wants reduces

these

.

periods of high business activity
such as we presently are enjoying,

ber is that many^Of

this country last year was considered bv some nersons as evidence
Tu ? o
•
p
•
that theiC is concern ill foieign

At any

_

.

depressed areas and many other.^the: dangers of inflation. and of the
projects. '•* I am not judging the need to balance the budget during

for thoir nroiectsGovernment

Likewise lut uuiiiow of cold lrum.
jjiklwist, the outflow or goici from

a minor

sell

•

.

awareness, will have greater influence on these important matters. .1 might add that the newspapers and periodicals of the nation are making a splendid contri-

the
ald fur highways, airports, bution in informing the

develonment
P
' 8
acveippmciii,; pendituresrmci'ease.

intlationary

an

causes,

favor inflation, but
many persons favor legislative actions that result in higher prices,
people

" ,nany PVUC'VS communities
return on well-<

This
xms

stocks
siolks

common
coinmon

ui

.

but too often we favor its

reflect the present popularity, i

may

of

uonus
bonds

your pres-

by^stririgj) ^
ence beie
UA better inEveryone agrees that we should formed people, by the very nature
not haye inflation in our country, of their greater understanding and

uie , ni0rits of these ".various
programs,

rently is around an all-time high.
The rate of return on manv stocks
.

Picnkc "Pn/f° worth sof financial^problems by

Sroceries

tnejstpck -ahd; " but; the

the

of

The
me

monst has said that even in this strated your interest-and-desire
country inflation has gone so far for more information regarding

of

just 2% a
increase of
in the cost of living in only

would

year

21

future

run

cxcaa.cvcuuccn-.

to

to

support the high level of spend-

X^aL^There^as e^eS^^5^^^^

Like

mg.

A balanced budget should also
carry through into our local gov-.,
How^vdr,if the people add!ernments, our state governments;
the Congress consider them essen- and our Federal government.
willingness

remajn

the
Jw«#'
nvtr fhZ vinc

as

rency

trash.
7th

They

even

France, of course, has

had large expenses connected with
■^An

markets.

to

This led to many de¬

valuations

corrected.

year

tended

result, the French

a

prices

continuous

a

which

larger each

grow

the

our

country.

years

purchasing power

and

stores

cents.

increases must be avoided in
awn

the

month—some

Inflation in France
The factors

to

sav¬

believed the franc would continue

where inflation has gotten

economic

reluctant

them

They kept these

band,
sulted.

ties to

This is

Historically, the French people
have always been thrifty, but their
unfortunate experiences with in¬

ahead is

years

their

held

value.

The

in

his

French citizen held as
possible, and con¬
francs to gold or other
as

currencies which

hard

consider it.

tion

francs

verted

investors

and

pravide these benefits seehis to be

nation.

.

the

years

Military

there
many

is

ahead

needs

are

constant

different

will

was

*

"

Pierce, Fenner & Smith, Inc.

production.

de¬

What Individuals

great,
The

pressure

groupsfor

government benefits and projects

state
-

of many kinds, with no corressponding willingness to be taxed

s ou

for such benefits. There

nate

seems

lit-

Federal
and

,,

.

Government

local

and

governments

,

nf>CGSSarv

-

Joins

Can Do

ster)s to

take tne necessaiy steps to

balance their budgets and elimithe

threat

of

inflation.

But,

Kidder, Peabody

(Special to The Financial Chronicle)

t
\

•

CHICAGO, 111.—Frank A. Con¬
nolly, Jr. has become connected
with Kidder, Peabody & Co., 33
South

Clark

Street.

He

was

viously with Reynolds & Co.

pre,

Volume 189 -Number 5846

(2195)

The Commercial and Financial Chronicle

.

Continued from
page 4

Observations
fits. If the latter
must

of

be

in

the

gains
of

wage

benefits,
in

creases

We

wages

througi

the

non-

also

of

that

succeed
the

,

in¬

if
in

'

or¬

get-

.

modest

amounts made available

annually

productivity
gains,
it
largely at the expense

be

must

v

if

Ty'v.-- r. ■■■;■■ 7-a7'TT

than

more

or

form

reminded

ganized workers

in

cannot

the

leisure.

are

ting

taken

they

in

*'

the -expense

Moreover,

be

higher

obtained

desired, they /

at

to

are

form

be

are

part

increases.

wage

Issue

New

$15,000,000

of other members of
society, in¬
cluding other workers.
Dr.

Backman

ample,

that

shows,' for

same

of

period

hours

creased

turing

the average

worked

bv

1.1

and

fell

by

labor

MATURITIES AND

*

YIELDS OR

1.1

income

Municipal Airport Bonds, Election 1956, Series D

Dr.

un¬

total

crease

conditions

certainty

-

becoming

increasingly

: ;

•

•

major

•

-

.

620,000
620,000

fol¬

as

620,000

lows: wage comparisons,-'Cost, of
living, budgets, productivity, abil¬
ity to pay, and economic environ¬
ment.
Analyzing each of these
criteria,
Dr.
Backman
exhaus¬
tively covers the areas of escala¬

tor .clauses,
and

"

inflation, proper wage-pro¬
ductivity comparisons," and
the
purchasing power theory. He cites
a
host
of
practical experiences
from many industries, including
steel, automotive, electrical, print¬
ing, and retailing; along with an
authoritative... analysis
of
the
epochal GM-UAW wage formula.

sions
are

Corporate

precise
set

and

forth

invaluable

by

fight

In putting

largely

stockholder's

in

up

pora

evil

above

is

by

management

this

constructive

behavior

perhaps

:

described

listed

will '*be

and

.

offered when,

ore

and

received
below

by

well

as

shown

not

furnished

.

on

.

as

'7777 ,%.

as

whose

subject to approval of legality'by
O'Melveny & Myers, Attorneys,
Los Angeles, California,
y

Messrs.
/

Tax
bonds

These
/

their

T.TT
;

t

Bank of America N. T. & S. A. 7
The First National City
.! '■"*?
"T,-''JT7 •%' *
of New York
'

.

Bank

'"

Merrill

7

'T

%

'

-

be

■■■' *

Incorporated

Clar k, Dodge

& Co.'

Trust Company

*

(Special to The Financial Chronicle)

First Southwest Company

?SAN FRANCISCO, Calif .—John
is now with Stewart,

(Incorporated)

Shearson, HammilUCu,

New York Hanseatic Corporation
■

A. G. Edwards & Sons

_

Incorporated

7 Mercantile National Bank at Dallas

Industrial National Bank of Providence

Gregory & Sons

Taylor & Company Dallas Union Securities Company Dittmar & Company, In ;.

Incorporated

The Fort Worth National Bank

•

Memphis

Kalman & Company,

John Nuveen & Co

Dean Witter & Co.

C. F. Childs and Company

Wertheim & Co.

of Georgia

The First National Bank
of

R. H. Moulton & Company

The Northern Trust Company

I

.

First of Michigan Corporation

of Dallas

With Stewart, Eubanks

Smith, Barney & Co.

The First Boston Corporation

Blyth & Co., Inc.

Seattle-First National Bank

Lynch, Pierce, Fenner & Smith

\

initially

a

Los Angeles

San Francisco

Republic National Bank Roosevelt & Cross Stone & Youngberg

:

>

Amortization of Premium

Gain,

issued" by the above named political subdivision at not less than
taxable gain may accrue on bonds purchased at a discount. Investors are
required under existing regulations to amortize any premium paid thereon.
will

value, and

i California Bank

American Trust Company

Security-First National Bank
-

par

v

•

■

all'taxable personal property, except certain classes thereof, in
T;-,.TT
7 said City.
7...;-■ 7T,..,77';''"<7-

request,"

joined via the back door?

"

„T 77

amount, upon

or

the

First National Bank in Dallas

1

.

Gpvernment Code for various airport purposes, in the opinion of counsel con¬
legal and binding obligations of the City of Los Angeles and are payable,
principal and interest, from ad valorem taxes which may be levied without
limitation as to rate'or amount upon all of the taxable real property in said City
and which, under the laws, now in force, may be levied without limitation as to rate

justify¬

the stock
option
practice,
through which the interests of
management and stockholder are

.*

under provision of Article I, Chapter 4, Division 4, Title 4, Cali¬

These bonds, issued

ing

'<

Purpose and Security

■

fornia

underwriters

names

I

defense of the
interest, is

Burnham and Keynes (cf. above)?:

are

the amount of a bank's investment, and
for other funds which may be invested
legal investments for savings banks, and are eligible as security
for deposits of public moneys in California.
v

are

.

bonds

underwriters

v

material

Or

in

7 7"

Legal Opinion
The

'

te-cwnership-from-control
theses
of
Berle
&
Means,

bonds which

in

•

and' if ~issued

a

thp; non-stockholding officer inValidating the separation of cor¬

funds,

77;'

legal investments in New York for savings banks
Massachusetts for savings banks, and in California for savings
bonds

banks, subject to the legal limitations upon
are
likewise legal investments in California

3.95% -7
3.95% :
3.95%

1988*

as

7"

•

T%7:7T7,-7.7.''

v

both

7

the

77-

Legality for Investment T

/

stitute the

particularly at
this time. But perhaps he could
have gone a bit further afield.
For example, what are the impli¬
cations of the strong battle fought,
and the,us.o.b.-ishness" exhibited,
labor dispute?

1987*

1989*

herein.

—

by the management leaders in

trust

■7100

'Callable June 1, 1969,

conclu¬

Dr.^ Backman

and

7771986*

tYieId to moturity.

Implications

data

believe that these

3.90

other

The

We

100

620,000

'

r

100

3.90

bonds is exempt from
under existing

Federal and State of California personal income taxes
.statutes, regulations and court decisions.

3.80%'
3.85%

1985*

3.90

present

100

1984*

3.90

Exemption

opinion of counsel, interest payable by the City upon its

too

3,90

620,000

•.

'

620,000.

wage

Broader

all

'

3.90

,620,000

.7 - 7 ;

Redemption Provision

_

or

Tax

100

620,000

benefits,
along with

.

In the

620,000

non-wage

patterns,

wage

620,000

.7 T-

;,.7

.:

after June I, 1970, are callable as a whole or in part, in in¬
verse
order of maturity and number, on June I, 1969,. or on any interest payment
date thereafter at par and accrued interest plus a premium of 3% on or after June I,
1969, and prior to June 11 1971; 2'/2% on or after June I, 1971, and prior.to June I,
1973; 2% On or after June I-, 1973; and prior to June I, 1975; l'/2% on °r Qff0r
June I, 1975, and prior to June I, 1978; 1% on or after June I, 1978, and prior to
June I, 1981; '/2% on or after June I, 1981and prior to June I, 1984; and no
■v: ■; .TvT?,
premium thereafter.

3.70%

7. 1978*
33/4.:
1979*
,3%
t 1980*
33/4
,1981*
3%T
77-1982*
33/4
1983*
^ 33/4

'

Bonds maturing on

MMtoi

•

.620,000

•

■"
#•'

m

■

••

■

,■

'-'/T

interest.

7

T;

v

620,000

experi¬

importance

197.1*

.

7,
a:/"'.-',..';.

k

-

enced in the arguments, six wage
criteria are cited as having as¬
sumed

1970*,

;.r

-3y2,T 771972*
3.45%520,000 / v/i .7: 7::i;973*: :Tido.;»7:
: 3.55%
620,000
3'/2 s; 7-1974*.
1975*
.620,000
3.60% V.
7 1976*
620,00.0 -3%.
3.65%
7, 1977*
620,000 ; 33/4
3.70%

"X'.v

W

3.30% : •
3.30%%-

3'/2m

r

?

380,000

management

>

Principal and semi-annual interest- (June I and December I) payable, "at the option
the City of Los Angeles in Los Angeles,
or at pny fiscal agency of the City in New York, N. Y., or in Chicago, III.
Coupon bonds in denomination of $1,000 registrable only, as to both principal and

of the holder, at the office of the Treasurer of

California,

%3.25%? :

380,000

no

that

and

Payment and Registration

V 4iT;T : ,71969

380,000

when

right,"there ik

labor

*

•

*■

7, 1961-89, incl.

Due June

7, 7959

or

1968

4i/2l

380,000

.

With

Yield

.•

Pricef

41/2%

■

380,000

-

in¬

may

any"specific rise
in wage rates will be accompanied
by a comparable, or any rise in
total income."
Y V.
/
/ 7%
.

v'i

.

that

labor; income

are

'

Due

'•

rates and in

wage

d

19.61
2.40%
2.60%
4'/2,i. 7 1962
380,000 7: 41/T:. Til 963
•2.75%
1964
380,000 V4'/T:
2.90%'■
•380,000
3.00%? 7:
m-v '-.1965
-380,000
41/2"'' T 1966 7 3.10% '
T1967 7 3.20% •
380,000
41/2

declined

hourly earnings

:).

Rate

380,000

million;

concludes,

'/while rises in
average

■

Coupon

d..

$380,000

in

hourly earnings. In short,

Backman

be added)
Dated June

.".ii;
Amount

by $5.3 billion despite the rise in
average

41/2%, 31/2%, 3%% and 3.90%

de¬

hour

Angeles County, California

PRICES

(Accrued interest to

manufac¬

0.4

Total .civilian

employment
total

in

bv

Los

AMOUNTS, RATES,

number

week

per

hours

rose

construction.
and

*

ex-

between

May,-.1957,
and May,
1958, average hourly
earnings in manufacturing indus¬
tries rose by 6 cents an
hour, in
building construction bv 11 cents,
and in other industries by
varying
amounts.
However, during the

"> CAT¬

7v:v

Los

City

'

J. B. Hanauer & Co.

Ginther & Company

J. A. Hogle & Co.

,

' Kean, Taylor & Co.

Inc.

;

Irving Lundborg & Co.;

Thornton, Mohr and Parish

Stern, Lauer & Co.

Lyons & Shafto

-

Incorporated

P.' Bourne

Eubanks, Meyerson
Montgomery Street,
the

New

Stock

York

and

& Co., 216
members of
Pacific

Coast

Fahnestock & Co.

.

Henderson

staff of
Harbison & Henderson, 210 West
Seventh Street, members of the
Pacific Coast Stock Exchange.
joined

Fahey, Clark & Co.

Wm. J. Mericka & Co., Inc.

The Provident Bank

Fred D. Blake & Co.

the




.

Ryan, Sutherland & Co. > Shuman, Agnew

.1 LOS ANGELES, Calif.—Eugene
has

McMaster Hutchinson & Co.

McDonnell & Co.

City National Bank and Trust Company
of Chicago

Incorporated

(Special to The Financial Chronicle)

Koch

Robert Winthrop & Co.

i

,

,

Exchanges.

Joins Harbison,

R.

J. R. Williston & Beano

White, Hattier & Sanford

Stubbs, Watkins and Lombardo, Inc.

Mitchum, Jones & Templeton

these bonds may be obtained from any of the above
underwriters not shown whose names will be furnished

circular relating to
>

1959

Stern, Frank, Meyer & Fox

Lawson, Levy, Williams & Stern
A

May 13,

& Co.

,

Seasongood & Mayer

underwriters,
on request.

as

well

as

other

H. E. Work & Co.
Stein Bros. & Boyce

7

\

and Financial Chronicle

The Commercial

8

Blaw

Thursday, May 14, 1959

.

.

outing at
White
Bear Lake, Minn, (preceded by
a cocktail party June 17 at the
Nicollet Hotel, Minneapolis).
White Bear Yacht Club,

Ilydratane Gas, Inc.—Progress report—S.

Blossman

Dealer-Broker Investment

&

55

Atomic

No. 47

Letter

Burnham View

—

1959 (Bryn Mawr, Pa.)
Philadelphia Securities Associa¬
tion annual outing at the Over-

June 19,

Eitel-McCullough Inc., Great Lakes Paper

on

Glass Co.

of Lsland Creek Coal Company.

ship.
■
>"'7/
June 25-27, 1959 (Hyannia, Mass.)
Consumers Bankers Association
Atlantic States Sectional meet-

^

ing, Wianno Club.

.

—

First Boston

,

120 Broadway,

Municipal Bond Women's Club
annual outing at Seawane Har¬

Meeds,

New York 5, N. Y.

Fund

Dominick

14 Wall
— Burnham.and
5, N. Y. Also avail¬

Monthly Investment letter

'

—

Investment report

7 Investment Association of Phil¬
adelphia S p r i n g J Outing at
; -Whitforjd ^Country Club, Whitford, Pa.

Dominick & Dominiek,

dr-Co*—Memorandum—Woodcock,

-

Hess, Mover & Co., 123 South Broad Street, Philadelphia
9, Pa.':.' ' j ;
c•{-r
;777.7
Dynamics Corp. of America—Review—-Ira Haupt & Co., If 1;

Nova

Broadway, New York 6, N. Y.
Federal

Utilities—Analysis of opportunities in smaller compa¬
nies—E. F. .Hiitton & Company, 61 Broadway, New York 6,
New York. "
•
*' /. .v';v'
-7..\

Electric

.

,114 Old

Review — Samuel Montagu & Co. Ltd.,
Broad Street, London, E. C. 2, England.
—

of

$1

billion

:

,

Broad

<

Mesta

Study of changes in postwar years—
In current issue of "Nomura's Investors Beacon"—Nomura
—

New York.

"

son,

—

Bulletin

Wall Street, New York 5, N. Y.
Gas
Service—Analysis—Bateman,

over

National Quotation Bureau, Inc., 46

31

Utility

Saxton &

period—
;

Common

Stocks—Comparative

randa

,

A.

figures—G.

Rates

—

booklet

Free

on

State Stock Original Issue and Transfer Tax

and Transfer Company, 50

and

123 South Main

•

0 '■

Singer &
Co., 74 Trinity Place, New York 6, N. Y.
American Cyanamid Company—Analysis—Shearson, Hammill
& Co., 14 Wall Street, New York 5, N. Y. Also available is

an

Analysis
Co., 1 Wall Street, New York 5, N. Y.

Winmill &

—

AssoConvention of

National Security Traders

-

Annual

ciation

v;

the Boca Raton Club.

,

Nov. 29-Dec.

Hogle & Co.,

4, 1959 (Bal Harbour,

Fla.)
Investment Bankers Association

Street, Salt Lake City 1, Utah.
Foundry—Analysis—Halle & Stieglitz, 52
available is an analysis

Convention

Annual

at

the

-

Americana Hotel.

■

"

April 6-7-8, 1960 (Dallas, Tex.)

Corp.—Analysis—Hill Richards & Co.,
Street, Los Angeles 14, Calif. Also avail- '
analysis of Giant Portland Cement Company.

«Texas
»

•

-

of

Group

Investment

Bankers Association of America
25th

meeting

annual

the
5'.

at

Sheraton Dallas.

June 5, 1959. (Chicago, 111.)

W. Pressprich

& Co., 48 Wall Street, New York 5, N. Y.
Automatic Canteen Company of America —

(Boca Raton, Fla.)

1959

Nov. 2-5

review of the market outlook.

Anderson Pricliard Oil Corp.—Memorandum—R.

'

Bankers

meeting.

South Spring

able is

(Cincinnati, Ohio)
Investment
Association annual fall

Ohio Group of
"

United States Servateria
621

the

convention at

annual

Oct. 22, 1959

r

;

.

Wall Street, New York 5, N. Y. Also
of Pacific Automation Products, Inc.

Air Express International Corp.—Brochure—Troster,

a

39th

Warwick Hotel.

United States Pipe &

Rates—Registrar

Church Street, New York 7, N. Y.
•

on

facturing Company.

Union Pacific Railroad Co.—Memorandum—J. A.

current Federal

,

Consumers Bankers Association
'

Milk

Also available are meinoEagle Picher Company and Thatcher Glass Manu¬

of

j ing at the Royal York Hotel. ;
Oct. 14-17, 1959 (Philadelpliia,'
Pa.)
7: :;-

.

72 Wall Street, New York 5, N. Y.

Front Street, New York

Co., Inc., 52 Wall Street, New York 5, N. Y.

Transfer Tax
.*

20-year

Spring Street, Los Angeles 13, Calif;.
: !
— Analysis — Dean Witter &
Co., 45

Street, Boston 9, Mass. Also in the same circular
are analyses of Olin Mathieson and Textron.
Union Oil Company of California—Review—H. Hentz & Co.,

:s;-; ;i

4, N. Y. ;
Public

a

•

7

Street, New York 5, N. Y.
Standard Packaging—Analysis—du Pont, Hornsey & Company,

industrial stocks
the -National Quotation Bureau Averages, both as to

(Toronto,

7..
Stock Exchange
First Board of Governors meetCanada)

•Association

Oil Corporation

52 Wall

parison between the listed industrial stocks used in the Dow-

performance

&

Women 37th annual-convention.

-■v,:

44
7•
Co.,

Montgomery Street, San Francisco C, Calif. Also available is
an analysis of Broadway-IIale Stores, Inc.
Security Life and Trust Company—Analysis—Alex. Brown &
Sons, 135 East Baltimore Street, Baltimore 2, Md.
Sperry Rand Corporation—Bulletin—Herbert E. Stern & Co.,

Jones Averages and the 35 over-the-counter

and /market

South

Richfield

..

used in

Eichler

Petrolane

Street, New York 5, N. Y.
[
^
England Business Conditions — Bulletin — First National
Bank of Boston, Boston, Mass.
New York City Bank Stocks — Comparison and analysis for
first quarter of 1959—Laird, Bissell & Meeds, 120 Broadway,
New York 5, N. Y. Also available is a study of the economy
at ;the first quarter's end.
Over-the-counter Index—Folder showing an up-to-date com-

yield

;

Sept. 28-29, 1959

Authority of the State of New York, Albany, N. Y.
j/!
Corp.—Memorandum—Shields & Company,

New:

-

7 day at Queen City Club; field
day, Friday, Kenwood Country
Club.
7
v;..;:' 77'
Sept. 23-25, 1959 (Milwaukee,
Wis.)
National Association of Bank

61 Brodaway, New York 6, N. Y. :
}
— Analysis r— Pacific
Northwest

Perkin-Elmer

4.33

Country
v,,

.

Co,—Memorandum—Green, Ellis & Ander¬

Company, Exchange Building, Seattle 4, Wash.1
Niagara St. Lawrence Power Projects—Progress report—Power

Bache & Co., 36 Wall

—

Waior.da

^

-Municipal Bond Dealers Group
i of Cincinnati annual outing —
cocktail and dinner party Thurs-

Morrison Knudscn Company

•

Airlines

V

Sept. 17-18,1959 (Cincinnati, Ohio)

Co., 42 Broadway, New York 4, N. Y>:"
Monsanto Chemical

Co., Ltd., 61 Broadway, New York 6, N. Y. Also
available is a review of the outlook for Plant and Equipment
Expenditures in Japan for 1959 and brief analyses of
; Mitsubishi Heavy
Industries, Nippon Flour Mills Co., Iwaki
Cement Co. and a survey of the Steel Industry.
Japanese Stocks—Current Information — Yamaichi Securities
Company of New York, Inc., Ill Broadway, New York 7,

at7the

A Club.

McDermott &

P.

•

Iowa Investment Bankers Field

"Day

•

Securities

Local Service

Company'—Analysis—Peter

(Des Moines,
' 7-'7,7:7;."'' 7

Iowa).
'

Street, New York 4, N. Y.

Machine

Club, St.

19-20, 1959

Aug.

Company, Incorporated, 135 South La Salle Street, Chicago "
3, in.. sWSzM1 ''Mir ^}i'y;7 7
Interprovincial Steel Corporation Ltd. — Analysis — Doherty
Roadhouse & Co., 335 Bay Street, Toronto, :Ont., Canada.
- v:
P. R. Mallory & Co., Inc.—Analysis—T. L. Watson & Co,, 25

stock splits; and investment decisions

Japanese Stock Market

Clair Inn and Country

Clair, Mich.

.

-

7 °

Aug. 14-15, 1959 (Detroit, Mich.)
Basis Club summer outing at St.

Northern Pacific Railway Company and Whirl-. *

on

Banking,

University of Virginia.

—

Helenc

change's—Exchange Magazine, 11 Wall Street, New York 5,
N. Y.—20 cejnfs per copy; $1.50 per year. Also in the same
issue are articles on evaluation of the role of the public
governor; dividends;
in a bull market.

Survey of the economy

—

Consumer

of

School

pool Corporation.
"
i
i
Curtis Industries, Inc.—Analysis—H. M. Byllesby and'

of listed companies with
more—May issue of "The Ex¬

or

data

are

Forty-Six vBillionaries—Discussion
revenues

j

'•

Exchange Bank, International Division, 165
Broadway, New York 15, N. Y.
General Devices Inc.—Progress report—Meade & Company, 27
William Street, New York 5, N. Y.
' *' '
V
Great Atlantic & Pacific Tea Co.—Survey—Abraham & Co.,
120 Broadway, New York 5, N. Y. Also in the same circular

Top

Foreign Exchanges

of Germany

Republic

*

•

Chemical Corp

Equities for Monthly Investment Plan—Report—
Thomson & McKinnon, 2 Broadway, New York 4, N. Y.
Also available is a report on Dow Chemical Company.

Fifty

Va.)

-

Scotia, Toronto, Canada.

(Charlottesville,

Aug. 9-21, 1959

.

Exchange Enigma—Review—Bank of

Canadian Dollar: Foreign

26, 1959 (Philadelphia, Pa.)

June

Street, New York 5, N. Y. /«,/*••

Pont de Memours

-E. I. Du

—

Club, Hewlett, N. Y.

bor

Merger—Discussion-—
Hickey, 27 Broadway, New York 4, N. Y,

Delaware, Lackawanna & Western-Erie
Vilas &

(New York, N. Y.)

26, 1959

June

Corporation, 15 Broad Street, New York 5, N. Y.
Curtiss Wright Corporation—Analysis—Laird, Bissell &

Club, Radnor Town¬

brook Golf

—

Chase Manhattan Bank —Card Memorandum

Market.

Company, 15 Broad Street, New York
able in current Foreign Letter.

Co.,

Dry Corporation — Analysis — Reynolds & Co., 120
Broadway, New York 5, N. Y. Also available is an analysis

(producing electreity directly by a uranium-cesium cell)—
Atomic Development Securities Co., Inc., 1033 30th Street,
N. W., Washington 7, D. C.
Banks and Trust Companies of the United States—Compara¬
tive figures for first quarter—New York Hanseatic Corpora¬
tion, -120 Broadway, New York o, N. Y. Also available is a
review of the Bond

&

Also in the same cir¬

Canada

i

•*

Vanden Broeck

Memorandum — William Blair & Co.,
"j 135 South La Salle Street, Chicago 3, 111.

Describing "plasma Tnermoeoupie"

—

L.

D. Fuller

;

Co., Ltd., Kaiser Industries and Libbey Owens Ford

mentioned will be pleased
send interested parties the following literature:

to

j

data

are

Charles Brunlng Co.

It is understood that the firms

I

Co.—Data—Alfred

Edison

Liberty Slreet, New York 5, N. Y.

cular

Recommendations & Literature

I

Co., 26 Broadway, New York 4, N. Y.

Boston

and

picnic

annual

Wall

Co.—Analysis—A. M. Kidder & Co., Inc., 1

Knox

Street, New York 5, N. Y.

.

.

(2196)

June
Investment

of

Chicago

annual

Joins Elastman Dillon

at the
Knollwood
Club, Lake Forest, Illinois.

field

EVENTS
In

Club

.Bond

COMING

Gude,

Field

day

(Special to The Financial Chronicle)

ANGELES,

LOS

5, 1959 (New York City)

Willoughby;t is

Calif. —John
affiliated

:r"For

Additional Brochures

—

May 14-15,1959, (Nashville,

financial institutions otily-^-

Bond Club of New York annual

Air

Now Available:

with

a

con-

-

-

annual

Banff

7

\
Security Traders Association of
Los Angeles summer party at
the Biltmore, Palm Springs.

throughout the world.

-

Calif.)

.

.

_

"

-

74

-

Trinity Place, New York 6, N. Y.

HAnover 2-2400




v

Firms Board of Governors meet-

ing at the Pfister Hotel.

members

Mr. O'Neil who

Stock Exchange.

j//

has

(Boston, Mass.)

ness

has

been in the investment busi¬
on

the Coast for^nany years

been with John

recently

Keenan &

Co. Incorporated.

J;

~

"

-Investment Traders Association

--

;

of

Philadelphia Summer outing
Country Club.

at the Overbrook

(Detroit, Mich.)
.
Basis Club golf outing at the June 18, 1959 (Minneapolis-St.
Paul, Minn.) .
Lakepoint
Country Club,
St.
Twin
Cities Bond
Club 38th
Clair Shores, Mich.

May 29, 1959

Teletype NY 376; 377; 378

-

O'Neil, Jr. has rejoined Fair& Co., 210 West Seventh St.,
of
the
Pacific Coast

man

(New York City)
Municipal. Bond Club: of New ; Two With Hill Richards
York Summer outing at Westr
(Special to The Financl\l Chronicle)
Chester Country Club, Rye, N. Y.
7..LOS"ANGELES, Cal.—Andrew
June 12, 1959 (Philadelphia, Pa.) Brichant and Lawrence L. White

:

May 25-26,1959 (Milwaukee, Wis.)
Association of Stock Exchange

....

/

R.

June 12, 1959

-

.

(Special to The Financial Chronicle)

r;

7 LOS ANGELES, Calif.—Hubert

convention at

Springs Hotel,

Co., 3115 Wilshire Blvd.
formerly with Morgan &

Rejoins Fairman

Rosa

Rosa,

Boston Securities Traders Asso¬
ciation summer outing at the
Salem Country Club.

.

May 19-20, 1959 (Omaha, Neb.)
Nebraska
Investment Bankers
Association annual field day.

:

Santa

-

June 11, 1959

"

Security Dealers Association

the Santa

of Canada annual

May 15-17, 1959 (Los Angeles,

network

.Troster, Singer & Co.

at

Motel,

now

Co.

•

Flamingo

,

Members New York

He was

.

-

1

rities &

Scarborough,

Traders As¬
Calif.
Spring
outing at Country Club of June 8-11, 1959 (Alberta, Canada)
Investment Dealers' Association
Maryland.
7. ."
24th

sociation

.

of 278 offices and agents

Club,

.

Association

Baltimore Security

Express International Corp.

solidator of international cargo

day at the Sleepy Hollow

N. Y.

Security Dealers of Nashville
Annual party at Hillwood Coun¬ June 5-7, 1959 (San Francisco,
Calif.)
try Club and Belle Mead Coun¬
San Francisco Security Traders
try Club.

i^The largest forwarder, clearance broker and
*

with Eastman Dillon, Union Secu¬

Country

Tenn.)

May 15, 1959 (Baltimore, Md.)

i

P.

field

.

are now

associated with Hill Rich¬

South Spring St.,
Pacific Coast
Stock
Exchange.
Mr.
Brichant
was formerly with Paine, Webber,
ards & Co., 621

of

members

TA/t1rnAV«

P.

Cl

•

T

the

rf 1

C

Number 5848

Volume 189

.

.

The Commercial and Financial Chronicle

.

(2197)

the

What Can Be Done
By J. DOUGLAS

Canadians

in

deficit—despite

a

/

move

the

this

on

This

impetus

comment

be

less strong than has
case for some years,

may

toward

been

may

the

economic

tion is
—of

the

period since the war.
In
last couple of years, for the

the

matter of major concern

a

more

than

at

widespread

any

concern

time in the

postwar

first

time since the end of the period.
Hardly
a
day
passes
there have been ample sup- without some serious pronounceand more
than
adequate ment on the subject. Inflation has
productive capacity of almost all replaced recession as the major
the major industrial raw materials topics of business concern on this
and foodstuffs.
While recently continent, or has
joined with rethere has been some firming in cession to produce a sort of twin
the world prices of a few basic horror that takes all the fun out

war,

plies

■

spending; and finds that current general
question of inflation is more dangerous
recessionary fears prevailed during pravious
inflationary periods.

anti-recessionary

fatalism concerning

commodities, of which
perhaps
the
leading
world

demands

modities

can

for

be

copper

is

example,

most

; com-

of

inflation

and

all

the

cost-re-

ducing corrective influence out of
recession.

Fear of inflation is evi-

aSut"?fc

about goods and plenty of capacity to Indeedrthe"New"York a nd London
but
inflation
already and certainly produce more.
indexes of the prices of sensitive the weakness of the bond market
there are very few bankers, leadNor do we appear to be ap- commodities are lower now than and in the strength of the stock
ing businessmen, economists and preaching a situation
were last November. It is market. Its influence on the bond
mere will oe too tew goods,
it is they that business has
true
picked up market and on interest rates is
p oliticians
Perhaps too much is said

111[Which

not

true that business has shown some

ln

their

improvement and the recovery is

recovery

give
public the

pJSfnt year°bothUhere andln the

have

who

it

felt

to

duty
the

United
united

of

benefit

.means

no

lu/nco.
the 1958

all

and

in¬

alike

J.

problem

Gibson

Douglas

what

and

it, quite apart from what

causes

Even the

should be done about it.

disagree
of the problem

professionals
extent

___

...

_

the

to

as

it is

and

said that five economists will give
vnu

you

rlif-forAnt

civ

vipwfi

six different views.

Serious

usually poorly in¬
with a single

are

rele

ap-

wn X
1 oso

w

.

i95
*of
distinctly en-

at

.appear-and, for the time being proached in the past. How far the
ieast, there remains a good deal fear
least'tnere remains a good deal fear

of inflation is reflected in
And in Eu- other business decisions is not

Of excess capacity.

the strong upward trend of clearly apparent

r0pe>

and

-------

some

slackening in business

probably

Businessmen

But its influence

./very

considerable.

likely to
activity has occurred.
rebuild or build up their stocks if
have
declined
only moderately.
Slowed Rate of Expansion
they think the general atmosphere
The maintenance of a relatively
is inflationary.
Fear of inflation,
There is a good deal to* suggest,
high level of capital expenditure,
indeed, that the rate of economic though often not the leading rea¬
combined with the rising trend of
son for a decision to invest or to
expansion may be somewhat less
consumer and government spend¬
rapid in the next several years purchase, may be enough to swing
ing, appear to assure an appreci¬
the balance when the pros and
than in the past decade.
The job
able rise in the national produc¬
cons
are
closely matched. There
of reconstruction has been done;
tion and income. But, recognizing
can be no doubt that widespread
world markets both for industrial
this, there is still little prospect materials and manufactures have expectations
of inflation keep
uiaitlJOia

formed or obsessed

the

that

SPVlOHS-

ly, however, it is scarcely surpris¬
ing that they disagree, because
the problem is complicated, there
are a variety of conflicting forces
at work, and there are many un¬
known
factors
in
the
picture.
Those who have simple clear-cut
solutions

of

major proportions,
comparisons of yields be-

and

fS^cent years has been checked is

good deal of
d i s agreement
about
what
is

are

is likely to continue this

obviously

are

more

boom levels of the last few years

a

the

,

the United States and that the

year" ^U' S" fcovei.y .has tween bonds and stocks suggest a
a c5mslde''?bl<? wtay„ t0 are bv,f°?e Preference for stocks and a lack
80 likely 0f interest in bonds seldom
widespread shortages

expenditures by business after the

is

there

deed

.

total,

by

are

rercntlv
recently

™,tinVC

rtoi

Unfortunately,
however/these
views

The
ine

States
states,

®

views.

their

as

to

1959

fully take up

or

would

recovery will

perhaps
require

national

even

an

go

al^

so

far

the slack in

this

year

,

„

competitive;

more
-

-

demands

and

Why in the light of the broad
economic picture which I sketched
in
earlier
should
the
business

community
other

and

citizens

be

indeed many
so
concerned

about

inflation?
Perhaps one of
the reasons is that prices and costs
did
not
decline—or were very
slow to

decline—during the

extent but prices of manufactures
fallen very little and con¬

have

prices went on increasing
recently when they have at

sumer

until
,

,

.

-

-.-

Jas shown Just a little weakness,
age rates> though n°t advancing
at the pace of 1955
shown

further

a

other

1957, have
increase,

-

or

promoting

costs,
including
and
services,
have

equipment
often

clined.

increased

are

■

*

no

costs and prices higher than they
...

,

.

-

..

,

-

cen-

otherwise would be.

they

longer

one

ways

to cope with the recession is

to

increase

wages so
be able to buy more.
nessmen

will price their goods out
market, particularly if it
or a highly
competitive one.
But there have

process

of
is

the

export market

an

been other businesses which have
been
.

less
.

inclined
.

.

to

.

.

,

simply passing
cost

increases

in

to

the

some

and

what

about

that

I

no

think

This

it.

is

can

an

of the biggest and strongest
in the United
States

during the recent recession have
to support the belief in

worked
the

inevitability of inflation.

this is taken by many to
demonstrate the tremendous pow¬
er
of the inflationary forces in
All

Such expec-

society and to conjure up
picture of rising prices checked
our

stopped.

an

as

ofer of securities for sale
j

or a

And there is
Continued

solicitation of an offer to buy securities.

Potomac Electric Power
Common Stock
Par Value $10 per

Y- ;

The Company

point that I should like
the present con¬
cern
about inflation arises more
from a fear of what may happen
than from the existing economic
environment. Indeed, the physical
The first

to

Company

self-respecting banker or

economist would fail to grasp.
<

is that

make

facts

of

the

scene

are

not in

present

the rate
as

more

Share

Common Stock transferable
these shares, at
forth below, all
Common Stock may be offered by the

has issued to holders of its outstanding

expiring May 27, 1959, evidencing rights to subscribe for
of one share for each five shares held and at the price set

warrants,

fully set forth in the prospectus.
underwriters

as

set

>

forth in the prospectus.

economic

themselves sug¬

gestive of inflation. Despite some
in business, there is still
considerable unemployment
and

Subscription Price to Warrant Holders

recovery

$25

per

Un¬
winter has re¬

.

share

substantial unused capacity.

employment this

mained close to last winter's high

A

rate.

number of major

tries are still working well
and

example,

for

capacity,

paper

Copies oj the prospectus map be obtained from such oj the undersigned
(who are among the underwriters named in the prospectus) as mag
legatlg offer these securities under applicable securities taws.

indus¬

below

the pulp
indus¬

and aluminum

tries, and in most lines there are
ample facilities available to in¬
crease production.
While the re¬
cession has not been a deep one
and while there has been some

'

Folger, Nolan, Fleming—W. B.

/

Auchindoss, Parker & Redpath

has
increased
notably.
We are not close to full
utilization of human and material

has

continued

ductive

We

are

'An

Eastman Dillon, Union Securities & Co.

goods.

We

have

plenty

Merrill Lynch, Pierce,Jenner & Smith
Incorporated

(

Ontario.




Ferris & Company

Jones, Kreeger & Co.

Mackall & Coe

Robinson and tokens

of

Mr. Gibson before the
Chartered Accountants of

address fay

of

Hibbs & Co., Inc.

quite definite¬

ly not in the position where there
are too many dollars chasing too

Institute

Alex. Brown & Sons

capacity

resources.

few

Johnston, Lemon & Co.

Dillon, Read & Co. Inc.
'

the working population
to grow and pro¬

recovery,

a

tain and increase prices and wages

opportunity

Doubts Inflation Now

a

and discourage resistance on the

industrial

done

be

consumer.

industries

1,207,338 Shares

many

so

and other

on wage

And it is hard to escape the con¬
clusion that the price policies of

problem are

and
influence
business
thinking to such an important ex¬
tent—what I think about inflation

,

tendehcy in costs and prices by

and I cannot resist the op¬
portunity of telling those — who
businessmen

and

of and capital equipment were scarce

when

This announcement is not

ways

resist
..

have indeed sustained the upward

of us,

advise

Many busi¬

have replied that such a

tations encourage efforts to main-

on

importance to all

is of major

people will

materials

North America

tered
were

badly misled and even dishonest.
But however involved, the prob¬
lem

".j than de¬

Labor unions have argued
of the
most
effective

that

a

methods to solve the

and

business

special inter¬
est. and those who offer painless

idea

reces¬

sion just passing. - Basic commod¬
ity prices have declined to some

iJlclvv.

OJliV4

much
V

Explains Fear of Future Inflation

little from time to time by moder¬
ate
recessions-but never really

in 1960. That

increase in the

production

become

~

higher costs,

more

with

met

part of business and consumers to

the

All this might suggest that inflation is not much of a threat at

the further

to

expansion

of

toward governmental budget balance by 1960-61,
monetary restraint and an appeal to the citizens. The author
is skeptical of appeals, however, to producers; notes legisla¬
tor's fear of losing votes and vigorousness of government's

when

leads

that

tive of inflation than during most

way

than

basic

urgently needed.

mean

world at large is not

at least

includes firm determination to

for

demand

and

point
picture in the the present time, or, in any case
strongly sug- less of a threat than during most
gestive of inflation, or, let me put of the years since the war.
And
it more accurately, is less sugges- yet it is
perfectly clear that inflathat

-

cure

world

the

This

GIBSON*

theirs in Mr.
Gibson's blunt prescription offered as a cure to Canada's dilemmatic problem of coping with tomorrow's inflation today. The
part

and
such

of

commodities.

Bank of Nova Scotia, Toronto, Canada

larger defense load—is relatively smaller than

recommended

12%

or

likelihood

sharp upsurge, at least until
there has been a notable revival

advised that U. S, A.'s cash

are

10%

little

is

a

Abont Inflation in Canada
General Manager, The

of

order

there

8

Rouse, Brewer, Becker & Bryant

Birely & Company

Rohrbaugh and Company

on

no

doubt

page

28

The Commercial and Financial Chronicle

*10

that—in fact,

chinery and, facilities sometimes
ment.
: ' ' '
VW'%
lack mobility, which makes reYoii have more than a passing possession costly and resale difinterest in business investment in ficult, and that the changing i'or-

From these

we

Applying the Instalment Idea
In Financing the Durables
I

Bankers

lending criteria

Drawing

goods financing.

upon

loans,

Indus t ry

gaps

still

cor-

station
I

like

would

to

or

discuss, objec¬

positively, about the
opportunities in financing the
tively

and

durables

producer durables

—

than

rather

du¬

consumer

not

Let's explore for

example, from

become

which

area

I think instal¬

ates.

credit

much

•-

so

part

a

the fabric

©f many

users'

meeds

and

lias

it

that

wants

gained

general

as

Robert

S.

Stevenson

ac¬

ceptance

a

part of our dyIt is one of the

necessary

very

mamic
most

with,

one

suspect that not too many
are
extremely familiar

economy.

needed

elements

important

machinery departments, as
well as the accounting department

mass production into —rto observe the operations.
consumption.
Instalment
After lunch, if the bankers had
credit has actually revolutionized time—and we urged them to take

living. It has made time—they were taken out to a
possible many of the technical job where this machinery was ac¬
developments through the creation tually in operation. We wanted
markets. It has fa¬

of broadened

cilitated

distribution

the

of con¬

goods and-. has certainly
improved the standard of living
of our people in the United States.
Instalment credit goes back a
sumer

long way. Those of us in the farm
machinery field can remember the
early days of farm equipment fi¬
nancing. After all, it is probably
the oldest
type of instalment
credit that we can point to. Later,
in the early days of the automo¬
bile, bankers soon realized that
there was money to be made in
that type of financing rather than
letting other lending agencies take
over
this field completely. Now
commercial

financing

banks

of

item

sumer

instalment

almost every con¬
imaginable, and the

loan

commercial

the

advertise

do

of

are

people in the in¬
stalment banking field loan money
you

automobiles,

on

or

other

consumer

items? I suspect that we could say
that they do it on: (1) ability to
pay; and (2) the equity of the
item being financed,
,_;V;
Let's look at ii this way. You
.

Uet

up

cat

in the morning, dress, and

breakfast

with

im¬

idea

to

was

become

get

the

familiar

as

bankers

to

possible

as

other items which

we

Ameri¬

as

consider essential to

our

way

of

living. You are familiar with
these items because you and your
family rub shoulders with them
daily. Therefore, it is

them

make

they

as

with

are

familiar with

the

it

and

ers

from

customers

the

bankers

our

have

financing of construction
chinery.

in

ma¬

'

An

criteria

address

National

easy for you

by which

consumer

you

Commission

bv •*»«»

Credit

Confer¬

inS4»«m«n»

Oo-Mt

American Bankers As¬

sociation, Chicago, III,




of

depreciation,

higher financing cost.
sec0nd

^

business

loan

reason

0f this nature should be attractive

js the large dollar amount

yOU

Four-Way Partnership

It is still

a

...

.

.

_

...

.

.,

,

.

instalment financ-

plant

and

the

range

'

%
••

Bankers'
T"

f

i

/..-.T.

profit. All three—

dealer, the manufacturer, and
the

user—need

sound
on

a

services

loaning institutions

of

to carry

their businesses.

of

"partnership"

which is
created by every business transac¬
tion.
We
could take
other
ex¬

amples

such

as

the

financing of

machine tools to increase
produc¬
tion, motors to improve convevor

goes in to the

expenditures
bles.

what

category of business
fQr producer- dura¬

Many of
is

our

customers

commonly referred to

are

as

.

business firms accrued ^
_|*nancia counsel and addepreciation to the - amount of Y?ce. They are aggressive but do
$18V2 billion. This was well ov©! ^ .^.criiice conservatism.
Frehalf of the total capital. expendi- gently it is their privilege to be
tureS for the year 1956.' It: indst honored^ by serving on the board
be pointed out that it is not at. all
or®
a business.
It is not only a responsibility to
unusual in either large or small
business customers to counsel and
industry.
■ :
'
advise them, but it is equally a
Shows the Difference v
duty to understand their business,

„

.

*

-

Instalment

This is just one example of the

type

tlia

note

by making available to thei

smaller

correspondent banks, th
knowledge and experience of thei
various

industry " specialists. '

small bank should look to its

cor

respondent for assistance, guid
and advice in meeting th

ance,

needs

its

of

local

business

tomers.
I

suggest

selves
do

two

ask them
"How wel

bankers
questions:

know the production

I

ment

needs

of

my

cus

.! ]

eqijup

business

qus

"What

tomers?"

positive actio
have I taken to assist them, i
meeting these>needs?"
The an
swer to those two questions coiil
have tremendous implications' t
,

the

business

and to th

customer

community relying

on

his payrdl

'

There are two examples of thi
point which come to mind—one
pleasant remembrance; the othe
not pleasant at all.
" • v
,

Recalls

,

Two Experiences

sumer

built
and

on

i.

financingofj

durables

has

been

the value of the

their

con¬

largely

security

the paying reputation of the

On "the other hand, in fi-

buyer.

.

pledge of
largely
relied upon rather than the value
of the fixed asset acquired and
the company's paving reputation.
industry,

nancing
current

The

assets

credit
to

be

the

has

been

attitude
that

sometimes

substation,
motor, machine tool, tractor? or
another piece of equipments does'
not
have
the
relative
security

seems

value

that

frigerator
worth of

an

has
a

a

automobile

and

business

that
is

or

re-

the

net
im-

more

payment bond. He was poorl
and
given no financi
support, with the result that t
contract
was
given r» to anoth
,,

manufacturer and the communi
lost

a

^9-month payroll for a si
We kno

able number of people.
as a

fact that had the bank in,th

small

its

consulted wi
bank in Mi
contract. could' ha

community

correspondent

waukee,

the

been saved.

.'

^

example,

dealer to sell the products we pro¬
duce. The contractor or user of the

to make,

,,

Of the business cornsingle source for American^buslr^^y: ;they are an authority on
ness
to finance expenditures.! or.f finance.
Therefore, one of their
plant and equipment. In 1956, for m^ort responsibilities is to give

This, after all, is a four-way part¬
nership. The dealer has to do a
selling and servicing job. We, as
the manufacturer, depend on the

him

6-month

advised

Unique Position

*uum?u£&°Sltl?1lt0- contri^e *°
Jhe stability of business. This is
,tr.Ufi?of. the small bank in a small

;

tion has been the most important

business.

equipment must be convinced that
this equipment is
necessary for

or;

and

.

Industry also needs j, the conidiercial .banks assistance in sellmS
equipment Bankers are in

of financing1 by?

banks.

..

,

T

our

90-day

for it because the company cannot

are

dealers' business and

business's financial structure thai"
a

truism

Much ot the equipment
extremely conscious of
.!, ^m community,;, as well as the large
importance of the banking referring to has a short deprecia-?Ranks.. in' major trade areas,
Generally, deprecia-v
profession to the success of our tion cycle.
We

means

,

j3e financec{

the

goods.

by Mr. Stevenson before

Instalment

sonnsnred

,

and

commercial

•

the

loan

within

J

methods

balance

equipment. Likewise, industry's cash flow out of
depreciation and its postwar profits have made it possible to shorten
the payout period of investment in
fixed assets and thereby bring it

received

the

duction

.

for

deal¬

themselves

instalment

that

The first is a case where a ma
afford to lose it. The strong desire
ufaeturer had the opportunity:
of retaining ownership more than?
offsets its disadvantage because of obtaining a sizable contract, $>:
having substantially increased its ;4ahj£ df mobility and its limited needed the support of his bank t
meet the requirements of a hi
influence on industry expenditures
*marfcet for resale
.v-/,. %

proved successful because of

the increased assistance

specific

a

We must not forget also
financing of pro
equipment many time
greater
stability in th

vantage.

by commercial banks is largely
postwar development.
It :has
resulted in the commercial- hank

rable goods business and products.
We know that this particular pro¬
gram

could place the community, as well
as the small businses, at a disad¬

a

du¬

consumer

support from the large and small
banks to purchase new equipment

ing

as

systems, and material handlingequipment which makes the han¬
parts
and
^Setting Up Nonconsumer Criteria dling of component
finished products more economical.
But is it just as easy for you to
set up criteria for nonconsumer
Substantially^ all of the ma¬
chinery our company produces
ence

term

with all the facets of this particu¬
lar business. In fact, to try to

the

finance these

.

^

the

up

the

used and what it meant to the par¬
ticular jobs being observed. The

family.

your

family have a car, a refriger¬
ator, deepfreeze, a television set,
a
washing machine, and all the

set

chance to dis¬

portance of the equipment being

You then leave for work. You and
your

cans

a

with the contractors

.

departments

banks

devising
more ways to finance these con¬
sumer products.
How

them also to have
cuss

entire

failure

business to get financial

small

of

instead of straight-line method of
the :f machinery
being
replaced,
does
in ' itself
make
possible a

A

of

way

Fartors

volume is an important reqlargely financial. Assuming /.that, ujstte to profitable operation of
this equipment provides a strong
instalment financing,
base lor 'financing—and I believe
■
much of it does—I am guessing:
-A third reason this should be
that the postponement' of the attractive instalment financing to
equipment purchase and the plac- commercial bankers is the mher-.
ing of the loan is often due to the
°e vf
if*•
single fact that the business man .^^hod of default resulting in re-.
just doesn't know that you're'-in- possession is not present to the
terested in this type of financing. f?me degree as in the instalment
f
financing of consumer durarbles.
Commercial banks have in some
The equipment is being used to
times
past viewed financing of
prod,uce income and is usually
fixed assets with short-term cred- vital
to the company's operation,
its to be unsound. Providing credit
Experience indicates that the comfor as long as five years through
pany gives preference to paying

used

mass

our

romnpnsatinir

nancing the purchase of

machinery; cer¬
tainly, not as familiar as they are
with automobiles, television sets,
and the like. Because of this, we
and modernization
in 1957.
By
embarked on a plan to have our 1961, industry intends to devote
construction machinery d ealers two-thirds of its capital appropriinvite the local bankers to spend ations to replacement and moda
day at their places of business. ernization.
The idea was to get the bankers
I dare say that there is not a
to come into the business and see business today, whether it be large
how it was run. In other words, to or small, that is not delaying the.
go into the parts department, the purchase of needed equipment arid
reasons
which are
service department, the new and facilities for

convert

to

small

our

the

,

bankers

Instalment
credit is

familiar

more

a

our company,

in which our company oper¬

I

that

is

Therefore,

may be
renewed or not at ' th
Industry is, of course,. fighting Apiece of equipment than if it were discretion of the banker.
j
rising costs. Since 1947, wages in borrowing o n an open line of
In a small community, the bank'
manufacturing industries have credit based, on its net worth,
financing limitations may not per
risen 68%y while productivity has : The economic evaluation of the
mit it to meet adequately all o
gone up only 32%. Manufacturing acquisition might be lower costs,
its business
customers' financia
technology has advanced so rap- increased sales, protecting the
needs.
It is here that the corre
idly that many plants 10 years old Market position, or a combination
spondent relationship betwee
are
obsolete from an efficiency of. these factors. Usually the adlarge and small banks should com
standpoint. I
Realization of this vantages make interest costs a
into Play- This is a two-way re
prompted industrial firms to spend somewhat secondary considcrasponsibility. The large city bank
48% of their total outlays for plant tion. The saving through the use
should encourage loans to busi
and
equipment on replacement 0f sum-of-the-digits or deeliningness

with construction

plan in

this field.

just

,

of production

Roadblock

Financial

moment
of
a plan which we instituted to get
bankers to understand better, and
an

rables— and

ment

with which you are

familiar?
familiar?

so
so

the part

can

is beginning to appear.

durable goods

That

remember.

to

business is the base for

tots^ompcnsating factors

equipment can be
direction highly profitable. A company can
afford, and usually is willing to
% v *
pay, a higher interest rate for fi-

is diminishing and a new

machine tool?

*

There is another important fact

economy.

v

facilities; but that trend

new

•:

to All

.

^

into

Gains

.

--ly think-these compensating factors can be summed up briefly in
equipment business. For the?'last this manner.
,*
several years, a majority of indusFirst, from an interest - rate
trial capital expenditures has gone standpoint,
instalment financing

respondent banks, and to learn something about productive
durable goods. Why, he asks, should there be a different credit
attitude toward an automobile or refrigerator than for a sub¬

j

,

s

plants and equipment have been
changing lately, and this change is
important to the banking business
as
well as to those of us in the

prev¬

of

'

you

^

%

,

Invaluable

considered the compensating
factors in financing equipment and
facilities used in industrial operaexpenditures for tions?f
*

but also frequently reprefinancing in the form of in-

stalment credit.

his firm's pioneering attempt

of handicapping-financing

and his knowledge

sents

consumer

alent, Mr. Stevenson also urges bankers to make use

can

we

do instalment financ¬

can

goods.

sumer

short-term

financing construction machinery

banks in

interest local

to

obtained in

now

assurance

same

bankers

sometimes represents inversely with the equipments
financing
or
t e r m ability to pay for itself. But have

supply

furnished to indicate how this can be

are

the

with

think

I

paper,

to the logical conclusion that

tunes of business make net worth
of
small
business
capital
an' important consideration. •; I ing
late been supplying a substantial would hazard the guess, however, equipment with the same assur¬
ance
that they can finance conpart of the capital. The capital you that the repossession risk varies

6-month note financing.

done

tnis

out

come

because, as
bankers, you have of

commercial

Company

goods in place of the uncertainty of 90-day
Moreover, suggested changes in

business durable
©r

why I say that!
figures and the rea¬
soning I have advanced through¬

type of business, in vest•

asked to extend instalment financing to small

are

maybe it should be

is

Here

more.

plant and equipment

President, Allis-Chalmers Manufacturing
West Allis, Wisconsin

i

have more than a casual inter-

est in this

By ROBERT S. STEVENSON *

*

to

Thursday, May 14, 1959

.

portant than its paying reputation.
It is true that production ma-

businesses. Consequently,

small

of

.

(2198)

plans,

and

their

needs.

A

T

The other

case

I

would like

mention is just the oppositeiof t
one I have just cited.
In thi^ pa
ticular case,, a local business, m

gravel-pit operator—wa# a
opportunity to bid
furnishing, gravel on a portion
—a

forded the

a superhighway which was go*
through the community. In ord

to

the

furnish

amount

of

grav

while this project w
progress, he realized it wou
be necessary for him to enlar

necessary
in

as

well

as

modernize, his oper

banker should be able to suggest tions with- new equipment. B
areas in which the bank can con- fore submitting his, bid, he co
tribute to their success. This is tacted the local banker, explai
particularly true in the case of ing his financial loan requir
The
local banker co
small businesses located in a small ments.
not furnish all of the money r
community.
^
quired. However, he immediat
got in touch with his large c
4,300,000 small'businesses in the respondent bank, explained t
United States. This represents one situation, and in short order t
small business for about every 40 correspondent bank financed
people. Businesses engaged in large percentage of the capi
manufacturing accounted for 8% needed. The gravel-pit opera
of this total. Commercial bank got the loan, submitted his-b
loans were outstanding to about purchased the machinery, and. w
Beca
half of the small business popula- awarded the contract.
It

is

that

in

tion.

I

interesting
1957

see

there

nothing

to

note

were

wrong

here

about

with

the

local

banker

used

his

cor

Number 5846

Volume 189

.

The Commercial and Financial Chronicle

.

.

'

•

'

■

spondent bank, this small commu¬
nity benefited. I might add that
this particular individual was an
i exceptionally good credit risk be¬
cause of his "good pay" reputa-

'l

*

.,

.

J: is

could

cited

be

be

here—be-

done

to

restore

stripped of modern trappings,
from which

ones

t •. is j

stood the test of

their

productive capacity. There
one who will not say that

no

of life.. Summing

men"

that if you have the facts and

say

be

•

itself. "Shows

analyzed

from

since
in

the

men

have

edge of

razor
affairs.

now

market

stock

1929—we

the

dif-

four

generation,

a

of

a

been

—

courage

collapse

crisis in human

industry

particular

It will build

economic

/jpeople/ and

keep; / the

y itai;.\-

pression and
economic
boom. They
from

to

the

outward

with

If

conditions

,

.,

J,believe thatin this pro-

ductivity lies the strength which
"has made the-country the indus-

history and the

course

real crisis of our times

of civiliza- /decay
Fathers in their

The Founding

.

GooFgovernmentaloneisa subp;wisdom

^ove

From

the

a

wide knowledge of

his¬

concentration
in

of

power

hands

the

of

one

—•

(a

few (an Oligarchy),
(the Populace)-^-hadi
poisoned government in all ages.
a

the many

and

men

closely

do not

centuries

deliverance of
the power of man. \

for

the

people should domi¬
government instead of

"Power

and

follows

This

cor¬

power, cor¬

from

the

over¬

whelming evidence of history that
the possession of unlimited power
corrodes the conscience, hardens
the

heart, and confounds the un¬

derstanding.

-

Power.

Essentially practical., /as
of the Federalist

reader

every

lathers

knows,

the

eternal

truths

of

Distributes

Constitution

The

took

these

consideration

into

framing the Constitution.

They adopted the Federal form
government to divide powers

between the Nation and the States.

They described the powers as
"delegated" rather than "inher¬
to

limitations

indicate

oil

retain the
ultimate control by the people.

powers

They

as

well

divided

as

to

the Federal

au¬

thority into three branches andi
the Legislative Branch into two
Chambers,
each
with
different
tenure

and

different

cies. And to make

sure

constituen¬
of constant

the

government dominating the change in the body with longest
people stems from antiquity. Solon tenure, the Senate has a turnover
was
renowned for the idea; the of one-third
every two years. The
Stoics championed it, but in our Whole arrangement of
powers was
epoch it was still a radical idea made subject to an intricate set
when

it

became

a

foundation

stone of the American system.

It

was

of checks and balances,
:

Always, the ultimate sovereign¬

embodied in the Consti¬

ty came to rest in the people, but
phrase of the Pre¬ even here power was checked. The
amble "We the people ;. .", in the people were not one organized,
limitations on the powers of gov¬ coordinated body capable of act¬
ernment which run through that, ing as. a unit; but people scattered
document, and in the iNinth and over many States with diverse in¬
Tenth
Amendments
recognizing terests.- They. could act only
the reserved powers of the people. through freely chosen representa¬
tution

Is

the true values of

ject of formidable dimensions. All '«Q0{i government into the fabric
I can promise here are some per/ ®fAmpripan cvstom

the

nate

as this is, it
struggle
and

that

absolute
rupts absolutely."

ent"

of

rule

the

rupts

Sec¬

good gov¬
associated

consent, they are
tyranny prevails.

free; and
Simple and obvious
took

from

In

governed.

.

/bdndcrafts- for the machine, gunatom bomb, or
; which tare - and
capacity to interpret these;'find theirpeans to probe the depths
*:bieinjg advertised by /sctfriek credit /epndition&v I sincerely ddybf ; if;: bf the sea and soar Into space,
^institutions today:T thiriteht is allr the sum total of'them 'isfwitfiin VfiAt bottom and with all the trap•*
^,fmporta'rlt'':-thaf '',:we^be concerned - the grasp of human understand -V pings of modern times stripped

lion.

and

law

liberty is the idea that gov¬

of the

'/ment -types7 of /loans

tivity.

immutable

in

are

ernment must be with the consent

crisis

f;,down-paymeht oh; iess-down-payf-• nology. It "is beyond/my ambition/'powder for the

to worry less about financing duvi-able, goods which lniild produc-

and

i'ellowmen

the elements of

in

ernment

of

■dufay^the

in¬

the problem

tory and politics, they knew that

thus

Consent of the Governed.

ond

\ of natural law and good govern4 ment altered merely because we
? Hon/b/ Goldwater // exchange, the horse for the tractor,

notwithstanding /the valiant

temporal

dignity^

individual conscience.

man:;'relations and the principles

_

is

his

were in Washman from
ington!s- times or Lincoln's times.
are the eternal truths of hu¬ /
That the

•

of

The

man

and

grounded

Nor.

tion of our
^It' must > be clearly understood world by sci^that I arh/hot describing/the no^eiice and tech-

ing,

God

ferent, than they

wars,

man's

of

man was

of power.

the

insepa¬
with his creation, as it has
through all time. His duties

slaughter

•

business police actions,

about the: type of credit being ex-

of

life have
radically changed
throughout the years, the/ basic
.problems of our times are no dif¬

;

.

„

eve

caprice
law.

not

interna-

tional

for

fin him./?"

*

higher

freedom

times?

our

/ While

have come

in

The particular >' and cold wars.
he*y S Y fr
that much harder, to make good come from the
because of the confidence placed
drastic alteraand

of

the

In

of

system, the "unalien¬
rights of man" were lifted

rable

called

foundation

and vested in the doctrine

; •

of what is

and nature.

men

the

of

and principle.

cause

Almighty

powers

formed in times of
crisis, preserved in times of crisis,
how must be radically altered be¬

de-

belief in

above

How, then, does it happen that

from

come

on

inspired

able

conse¬

the

eternal

American

'*■. our nation was

have

dangers

being fi-

business

community, provide jobs

sound

the

political-

was on

the

knew

Fathers

heart

the

Monarchy),

which

the affairs of
•

tions.

The

govern¬

God, whose divine precepts order

of revolutionary changes in agriculture, industry, and social rela-

living on

.

the

our

civil war—while it

ever

good

summarize

me

been
For

dustrial, the community, and the
^individual.
X
A sound loan will help build
j the
economy and productivity of
j.our nation. It will add to the in,/dustrial might of our country and
nanced.

how

of

describe The Good Gov¬

founded

was

a

;3ferent levels: the national, the in¬

fhe

'

,

our

the' heart of his theme, he says
thoughts and actions of

up

crisis

supports

sound investment,
♦you should not make the loan. 'J .
0/All of these loans-for capital
/goods and productive equipment
can

pretext to change

Founding

at

miraculously were
Oppression by a majority was at
given institutional form by the:: least as bad if not worse than
op¬
Founding Fathers.
pression by a minority. In Lord
Spiritual Values. This Nation Acton's maxim, none is excepted

quences"thereof;> and encouragingly points out that an in¬
formed, alerted public can swiftly restore our heritage if it

to protect the assets of his frank!/
.But there is also no one who will

.jjX looks like

Let

truth's

v;

times is in the

our

the

not

serve as a

that

or

different than the

economic system is being ruined and the "dismal

;

the banker's first responsibility is

and

any

The

humanity to

Summarizes Eternal Truths

-

subsequent turmoil ;and crises, the Senator

"the real crisis of

way

not

are

definition
can

in government.

power

the

constitutes

of

diffusion

the

heritage:

can

whether

heritage of eternal truths evolved and

our

denies that current problems

/is

for

men

-

;and to insure the survival and

the money they need—when they
need
it—to help them
improve

-

of

what

which is the heritage of
the American people.

form of government, charts what

our

thanv
anywhere else in the world. Our L
business men must be" able to get
no

•

in

ernment

(R.-Arizona)

of free government. Asserting that present day crises,

progress

the need for productive tools

gen er a! an d world w
different in this country

disregard

values

ment

forthright polemic;; pinpointing the dis-

turbing trends altering
should

Senator

States

Goldwater's

Senator

j There are many other examples
which

callous

No

relationship can
the local
bank, the correspondent bank, the
customer, and the community. /'//

cause

struction, it can come about only
througn the blind and sometimes

By HON. BARRY GOLD WATER*,
United

11

(2199)

•

good government.

be from the standpoint of

"

\

■

true

bank

spondent

;

'

Men,Not Crises, Are Responsible

tion and the fact that he was an
exceptionally astute business man.
Certainly these .two examples
point out how valuable a corre¬

j,

'

1

•

ciple

in

the

this, too, not an eternal prin¬
of good government, valid

tives and not

en masse

in the pub¬

lic square.

for all time?
But they were protected in their
/
'
giant it is today and has made sonal reflections on what .disturbs
•
,
'
.
unalienable rights by specific decDiffusion of Power. Turn now
people's standard of living me about trends in the national
Lincoln presetved them in
to the third of the great elements Carations, by what we know as a
possible.1
/:
': r - v-government.
' . / >'
v?nation s parKest nour.
:
Continued on page 32
of good government in the Ameri¬
*'/-TKm-Pfnrp
a-thoii<>Ht" !
: ~
:
;*-*«.*■*
this'heritage is fated for de1
Are the Old Rules Obsolete?- /
'
gest that you consider changing •
' r
your criteria on loans to industry
Profound changes-/;are taking
1
and business from the "net worth,
place in the form and practice/of
*
'Ihis ud^rttsemait is neither an offer to sell nor a solicitation of an offer to buy any of these securities.
balance
sheet"
method
to
the American government. Those who

atrial

-

,

5- our

-

.

,

.

are bringing^about these changes ■
arfe that the revolutionary de- > ;
Will take the time and invest the yelopments of our times, make the
effort to study the businesses and
ru
obsolete. f In . then- book,
:the business menVin -.your com- anyone Avho >builds .^e;:-.temple^of. ; r
;:munity-H=ive them the sound fi- bis thought,on. thp,|bunaations. of / <
fiiancial. advice and support which our country is a reactionary
people have a right to expect from
* tlunk thesejpeople. are taking .

lability to

know-how,' good
^management"- yardstick/ If you

'j'he

.

pay,

offering

is

made only by the

Offering Circular.
May 12, 1959

,'/ ; M AY ISSUE

200,000 Shares*

.

•

business

you—then
~4md

I

assure

brichly rewarded.
"vi-

•(?<v»«,

'

-

will

you—you

/

will be

/ : :

,

»•?

prosper

,

'••-.-/

,

hborties with history
thej(;,
conclude that the crises and revo!utl?».ary temper,- of rour times
justifies

,

the

demolition

of

our

,

Spector Freight System, Inc.

>•-i;•

Class A Common Stock

f^The fmancnig of equipment for

country's foundations. '
- ; •.
•
fthe growth and \ improved effiHave they forgotten that these :
^^f ^ P^tiye plairts is foundations were laid in revolu- /
lg
^nw
f*n^clal.in-tionary times? ."These/are " the
^ftrtutions. But Of aip positive . that times that try men's souls,"- wrote .{
~

application oLthe instalment idea
to

much; of the field

^or-z~°?
:

is

the new
^

opportunity in banking,

D

.

r..

i

•»'

a JJ

;; // oarret, ritch Adds
(special to the financial ciqiomcle)

'f

/KANSAS

.

City,

Mo.—Lloyd

;

.

M.

Mayer has been added to the staff
Barret, Fitch, North & Co.,
Incorporated, 1006 Baltimore Ave.,

.'of
i

members

of

the

New

York

Thomas

height. -Social relations every-./?

where

were

ing
as

(Special lo Thf Financial Chronicle)

Mr. Peticolas

wa?

laid

men

the

in Philadelphia /'
foundations for

In 1856, Lincoln said

anxiety

with

at Bloom-

expect

beclouds
some

each newspaper
•

the

new

Share

Copies of the Offering Circular may

be obtained in any slate from such of the scleral U infer wr iters,
lawfully offer the securities in such state.

.

we

alarms;
future; we
with

A. G. Becker & Co.
-

*

Incorporated

disaster

read.

.

.

The
nation
was
soon
to
go
through the greatest of all crises—

'An address by Senator Goldwater be-

Co.

Inc.



Price $11,125 per

111.:

for-

merly with Francis I. du Pont &C
and Wheelock-^: Cummins,

..

including the undersigned, as may

government.

"We live in the midst of

CHICAGO, 111.—James M. Peti-

'changes.

*Of winch 60,000 shares
are outstanding
/.

'

in upheaval.

the

upon

they

American

New York and Midwest Stock Ex-

:

Thus, turmoil, crisis, and revolution were the conditions press-

and

/Rodman & Renshaw, 209 South
;La Salle Street, members of the

,

in

the Old and the New World,, An./
industrial revolution was-at,its ;

-

holas has become associated

:

the.labors'of its birth/War rocked ;•

With Rodman & Renshaw ington,
*

/

Paine, when the Ameri-

can system of government was

/Mid-west Stock Exchanges,

i

(Pur Value $1)

'/;•••',.

,

ciety, Washington, D. C., April 30,

1959.

Kidder, Peabody&Co.

Stone & Webster Securities Corporation
White, Weld & Co.

The Commercial and Financial Chronicle

Federal Reserve's Independence
And Problems to Be Faced
Member of the Board

capitalistic
democracy—the
savings of the
public. He thinks the real danger
that
view

listic

consumers

recent AFL-CIO request that labor, as
and small business, be given a voice in the

well

as

Federal

tered

Washington is an exciting place
days to anyone concerned,

these

are,

us

Thursday, May 14, 1959

.

.

i ttee

m

hearings
almost

held
daily,

the

light

fact

issues

more

our

life.

but

economists

and
do

we

the

want

We

want

L.

James

Robertson

freedom

more

we

repre¬

rapid

do not

eco¬

technological growth
not want to postpone
desires for

consumption.

current

of

products

the satisfaction of our

eminent

with

inconsistent

are

work.

nomic

Along
with
the testimony

and

for

We

want

ourselves

but

always recognize that

private this may mean less freedom for
the other fellow.
We want more
groups, have been statements by
more
schools,
better
government officials setting forth defense,
.their views on crucial issues. In roads, cleaner rivers, more hos¬
addition, special investigations by pitals and more protection against
high level committees and com¬ the risks of unemployment in in¬
sentatives

missions
You

the

of

various

dustry and of weather and

being launched.

are

are

familiar with many

of

questions being raised: How
we
insure ourselves against

can

the losses and

deprivations of

employment?

How

faster?

Could

we

can

grow

un¬

grow

we

faster if

broke up big business and

big
.unions?
Are they the cause of
rising prices? Will acceptance of
creeping inflation solve or com¬
plicate our problems?
Is there
we

excessive

concern

of inflation?

about the threat

Must the

budget be
balanced? Would the operation of
the
economy
be
improved
if
monetary policy were more sub¬
ject to direction by the Executive
and

if

the Federal Reserve

were

made less independent? Would the

national interest be served better
if the law required labor, con¬

mar¬

in farming.
Unfortunately,
along with these things, which
are
usually provided by govern¬
ment, we want lower taxes and
balanced budgets. We also want
prices and living costs to hold
still while wages and profits rise.
And, of course, we want easy
access
to credit at low interest
rates, and, at the same time, high
returns on our savings, as well as
safeguards against depreciation in
their buying power.
kets

of these desires—and

All
more

—

not

are

only

many

proper

but

laudable; in fact, they are the
mainsprings of our type of econ¬
In a country as rich and
dynamic as ours, a surprisingly
large number of them can be real¬
omy.

ized

if

take them

step at a
sumer, and small business inter¬ time and with due recognition (1)
ests to
be specially represented that progress has never followed
a smooth upward path in our so¬
on
the Board of Governors?
I do not propose to answer all ciety or in any form of society,
and (2) that at each step we are
these questions, but each of us
confronted with the opportunity
must wonder at times what this
and necessity of making choices.
ferment of economic ideas is all
about.

Is it the usual

situation in

Washington at this season
this
something different?

or

is

It
is
hard to give a categorical answer.
As I view it, the discussion this

These

only
also

we

a

choices must be made

among
among

common

not

competing goals but
the

goals

means

can

by which

be reached.

is

situation.

obviously

Even
some

interest pleading and some

line-thinking," there

Unfortunately, or maybe for¬
tunately, the testimony of the ex¬
perts on the right choices to be
special
made often points in opposite di¬
''headrections. For example, one well-

though

seems

more

to be

provocative questioning of
generally accepted- doctrine, and

known

economist

asserts

levels

both

with

and

great

advising,
other agencies

ment.;.";
because

of

govern¬

created; the

it

had

System

learned

been

that

creeping inflation, while not de¬
sirable, is necessary, and a small
more intense and
imaginative ef¬
price to pay for rapid progress in
fort to extend the horizons of eco¬
an economy in which labor unions
nomic understanding. In
part this are able to
press their demands
ferment
may
reflect
a
wider
beyond the limits of productivity
recognition of the Russian chal¬
growth.
Other equally eminent
lenge to our economic way of life
economists beseech us not to ac¬

economic

In

by

Decision

judgment a society or¬
ganized, as ours is, on these prin¬
ciples will be able to sustain a
more
rapid rate of growth and
progress than a society in which
my

all economic decisions

subject

are

centralized direction and

con¬

trol, and in which the compulsive
the

of

power

state

rather

than

country
itself
and must be regulated in the pub¬
lic interest.
As an agent of the

the

that money will not manage

the prime source of economic dis¬

Congress, and with the members

that

hard

experience

the

of

Board

in

of

this

Governors

ap¬

operation of free markets is

cipline.
Some

experts

our

ter of

a

have

testified

problem is chiefly a mat¬
faster rate of productivity

They

growth.
grow

at an annual rate of 5%, or

some

other per

They
to demonstrate, viv¬
idly, that if we grew at the higher
rate, Utopia would be just around
the corner.
■
i,-:V■
•
Except as indicating a wide-;'
spread desire for rapid improve¬
ment in
industrial capacity and
levels of living standards, contro¬
versy
about
"target"
rates
of
growth
is ' not vCry v'helpful to
those charged with policy deter¬

and

are

in His."

I

As

We

,

the

regard

certain

the

economic

gospel,

agement mechanism that was de¬

highly desirable the

signed to safeguard and promote
the longer-run economic interests

is far

and

true

as

.

less

who

one

debates

inquiries going

on about eco¬
developments and policies,
growth and stability, levels of un¬
employment. and the role of mon¬
etary
policy.
The
conflicting
testimony of the experts, while at
times confusing, is also hearten¬

nomic

ing.
Differences
need
to
be
brought into the open and freely
discussed. It is really only in this

Federal

is

Reserve

the

man¬

of the nation. As such it has func¬

tioned

effectively, although by no
perfectly, over a very long
period. Far from being undemo¬
cratic, the Federal Reserve repre¬
sents a high degree of democratic
maturity. It reflects recognition

means

of the fact that

in

20th century

a

say

that the public will become
increasingly able to differentiate
for itself, the technical issues from
the personal judgments and biases
of individuals—whether they hail
way

from

Cleveland, New York City,
or — like me — from
our country's focal point, Broken
Bow, Neb.

Washington,

industrial

might wish at times that
the presentations of basic issues
were more qualified or less bla¬
tant, that more precise information could be obtained, and that
those wearing the mantle of ob¬
jectivity were always truly ob¬
jective. Also it might help if the
issues

were

But

drawn.

not

often

so

then

issues

over¬

do

have

to be stated

clearly, and stands do
have to be taken; when a firm
stand is taken there is always the

fear, I suppose, that qualifications
may lead to other qualifications
with the result that the issue will

become confused
It

is well

to

or

obscured.

bear in mind, too,

that it is not only possible, but
perhaps desirable, for "outside"
experts and others not charged
with
policy
responsibilities, to
stimulate
thinking
by
taking
stronger positions than they might
take if they were in the decision
seat.
The
consequences
would
likely be quite different if such
positions were taken—and acted
upon—by persons charged with
responsibility. In that case, the
results might not be stimulative

but

This

does

carrying

not

mean

that

those

responsibilities

should remain silent.

On the

con¬

trary, it is important that policy
officials speak up clearly and let
like

to

do

just

I
that with

respect to two points, but before
doing so let me say, needlessly I
sure, that we in the System
have no secret source of wisdom;
am

too, must
taking account
as
objectively
we,

weave

our

way,

and
of all
the facts and informed judgments
we

can

as

as

best we
we

can

can,

marshal.

town

I

Effective regulation of money

credit, as you know, is a com¬
plex and technical matter.
It re¬
quires both continuity and flex¬
ibility.
Often timing of actions is
of

the

frequently action

essence;

must be taken before fiscal meas¬
ures

of economic

other tools

and

policy can be brought to bear. In
taking action, the System must be
above suspicion of political influ¬
ence
or private
pressure, and at
the
same
time
knowledgeable
and

long-run

financial

develop¬

ments, here and abroad.

It needs

about both

economic

current

and

to be able to be heard above

clamor
It

the

of

day-to-day pressures.
not be heard unless the

will

country and the world have con¬
its

in

fidence

Defends

System's Independence

must

we

cent higher than

often

go

on

mination.
would

should
rate

From

to

be

that

' where
that

appear

grow

I

our

sit

it

goal

the fastest

at

be

sustained, with
recognition of our other goals,
including maximum freedom of
choice for individuals, reasonably
can

full

and

technical

com¬

and its economic states¬
manship.
Courage to face diffi¬
cult and
unpleasant issues and
willingness to act promptly and
petence

if such

free

markets for goods and serv¬

stability of prices, and na¬
security.
However, in a dynamic econ¬
omy, growth will not always be
at a uniform pace.
Sometimes it
will be slow, at other times very
rapid.
Variations in rates may
reflect changing rates of growth
in the population, or population of
working age, needs for the econ¬
omy to digest temporarily overexpanded plant or inventory, ad¬
justments to crop failures, the
tendency for innovations to come
in
bunches, adjustment to the
ices,

tional

changing
intensity
of
foreign
competition, and so on.
It will
be possible in a free society
to force and maintain a predeter¬

never

mined

rate

annual

economic

of

growth.
critics

Some

have

pointed to
rate
from

the

annual

confidence is to be earned.

1952

to

doubt
a
System
headed up by a Board composed
of
members
deliberately
ap¬

ening pace of growth. The selec¬
tion of this period gives a mis¬
leading idea of the postwar rate
of
growth because it takes us
from near the peak of a cycle to

decisively
I

are

important

seriously

pointed to represent special inter¬
ests—whether labor,, consumers,
small business or big business —
would

square

ments

of

an

with

require¬

the

acceptable

money-

Each

bank.

central

managing

Federal Reserve official must rep¬

the

whole

must

—there

policy

issues

at

effective government.

resent

disruptive.

best

meeting.
Appropriately
safe¬
guarded delegation is essential to

-

One

settled

be

cannot

all

democracy,

that

have been experiencing.

we

.

not

public interest
pulling and

be

hauling between special interests.
Benjamin Strong must have had
this in mind when, as President of
the Federal Reserve Bank of New
York,

himself

wrote

to

forget

he

that
.
System)

this

reminder:
"Never

Federal

Reserve

.

.

(the
was

created to serve the employer and
the

and
and

the
the

producer
the importer
the exporter, the creditor and
debtor; all in the interest of
country as a whole."
working
the

man,

the

consumer,

Now let

me

turn to

a

bird's-eye

appraisal of the growth perform¬
ance in this country, for a signifi¬
First, let me deal with the com¬ cant part of the ferment of the
plaint that the independent status day bubbles around this point. It
of the Federal Reserve enables it seems to, pie we hear a great deal
as
well as to our
leadership in cept this
prescription
because to follow policies that are con¬ about
growth
but
not
enough
other
fields.
In
this
sense
the
creeping inflation must result in trary to over-all government pol¬ about progress. After all, it is not
current probing and debate
may slower
economic
progress
over
just rising indexes of economic
reflect some
hopes, not fully ex¬ the long run, and because the in¬ icy and with the result that eco¬
nomic growth is being impeded.
activity
that
we
are
seeking.
pressed, that we may, by per¬
tangible cost of such inflation — A part of this complaint is that Progress is more than growth in
sistent searching, make the kind
its
inequitable consequences—is the System's independence is not total output; it relates to issues of
unbearably high.
?
An
of
truly democratic.
This reflects quality
living,
health,
and
£ddresiJ hy Gov- Robertson before
Ohio
Bankers
One
witness
contends
that some
misunderstanding
of
the equity. It must encompass free¬
Association,
Cleveland,
Ohio, April 28, 1959.
dom of inquiry, safeguarding of
creeping inflation cannot be the System's status.




of

Prefers Free Market

to

'

■ 7.

.

fre¬

consulting, work¬
and
cooperating

are

we

rates

govern¬

Representatives
of
the
Board
testify frequently before
Congressional committees, and at
quency

are

though

not readily encompassed

are

in percentage
growth.

ment.

all

too,

pointed for long and overlapping

would

is different and goes beyond
preoccupation with the immediate
there

for bad blood

reason

of

things,

inno¬

terms by the President with the
advice and consent of the Senate,

us.

people know where they stand.

Conflicting Advice

year

economic

no

branches

they

for

of progress even

measures

in¬

for

scope

and'

doing

between

We want more leisure and

also

we

of

"There is

them.
These wants
aspirations take, many forms,
some
material, some intangible,
some

These

increasing

de¬

It should

the Lord's work—you in your way

satisfying

fundamental
of

Baptist preacher, once said to my
own
Presbyterian
m i n i s t e r:

ferment of ideas and the

others.

economic

in their

certainty that their solution is
only correct one remind me of
What my late father-in-law,
a

the

I

and

vation.

Congress

of these experts

of rockets and atoms.

most

the

of

initiative

to rise most.

about

some

on

dividual

with

Some

and

of

include

made

are

of

rights,
freedom
occupation and of

of

cision to spend or save.

from time to
time.
Consequently, the System
is not independent of government,
but merely independent within
government. It does not function
in isolation from the legislative or
changes

ing,

tended

tions confronted by limited means

and

reason

contrib¬

forces

become commonplace in the fields

of

focusing

a r e

are the prime cause
But his opponents

individual

choice

changed by it at any time; indeed,

uting to inflationary pressures, in¬

More importantly and more

phies.
Con¬
gressional
Com

that "adminis¬

di¬
rectly, however, these testimonies
reflect the age-old conflict of un¬
limited human wants and aspira¬

with, economic
conditions and economic philoso¬
most of

as

field

economic

labor

System

the

of

cluding the strength of demand in
the areas in which prices have

progress in
which
has

breakthrough and

the

monopo¬

knows, the Federal
is the creature
Congress
and
can
be

Reserve

executive

other

numerous

speculation in stock market

of

the

organized

of

emphasize the importance of the

such

growth without inflation, and

prices"

inflation.

of

Robertson defends the System's indepen¬
a move might destroy the Fed's effec¬
tiveness. Noting the law requires fair representation be given to
financial, agricultural, industrial and commercial interest, as
well as geographic regional representation, Mr. Robertson
asserts representation of special interests (viz.—labor, con¬
sumers, big or small business) would interject political or private
pressures into dispassionate regulation of money and credit.
Besides discussing need to preserve confidence in Board's
technical competence and economic statesmanship, the Gov¬
ernor discusses serious
problems of unemployment and eco¬
nomic

unless

Another alleges

Reserve, Governor

dence and declares

this, further inflation

of

powers

controlled.

are

Answering

bur

inevitable

is

our

people are beginning
creeping inflation and,

expect

in

of Governors of the
Washington, D. C.

Federal Reserve System,

of

cornerstone

is

As everyone

our

to

to

ROBERTSON*

By J. L.

tends

it

problems because
undermine the very

to

answer

,

.

(2200)

32

a

1958

growth
to

indicate

recession low.

a

slack¬

To get a proper

perspective of "growth," one must
not
look
only at changes from
year

to

year

cyclical

or

peak

even

to

from

another,

rather at changes over

one

but

longer pe¬

riods.
In the six decades from the be¬

ginning of this century, a broad
sweep of 60 years encompassing
intervals of rapid growth and in¬
tervals of decline, real product in
this country has increased at an

annual rate of about 3%.
During the entire postwar period,
growth has been well above the

average

long-term average, amounting to
approximately 3 Vz c;c.
This
omy

performance of the econ¬

in

the

postwar period

not

only compares well with other
expansion periods in this country,
such
as
1900-1913 or
1922-1929,
but in fact has been amazingly
good.

We have had three reces¬

sions, but each has been moderate
and fairly short lived.
Recovery
from
the
1957-1958 decline has
been

rapid

and

has

already

brought total real product above
pre-recession levels and into new
high ground.
There are many
reasons
to expect
expansion in
activity and employment to con¬
tinue. Ours is still a growth econ¬
omy

and,

typically,

the high

of

Volume lo9

each
well

Number 5846

.

.

The Commercial ancl

.

succeeding cyclical
above

the

ceding cycle.

peak is
of the pre¬

peak

Furthermore, the

recovery

has

on

growth in

rapid

firmly

based

productivity.
productivity is, of course,
source of higher stand¬
living and a basis for hope

Rising
the

been

prime

ards of

that pressures on prices from
cost side can be avoided.

the

Problems That Remain
At the

close

time,

same

our

and

too

much -of

period.

considerable

a

Much of the recession in¬
in

crease

unemployment was cen¬
tered, as you inOhio know so
well,, in areas producing
hard
goods.
An increase in spending
for plant and equipment is now
under
tures

expendi¬

consumer

way,

expanding,
adding to

busi¬
nesses
are
inventory.
This must result not only in in¬
are

orders

creased

also in
these

and

_

and

output,

but

increased employment, in
areas
as
well
as
others.

Still the

problem may not be fully
solved and may call for further—
perhaps different—public action.

However, serious

ment is to the nation and to those

directly concerned, and it is a
gravely serious problem for them,
the longer-term problem of sus¬
tainable economic growth with.out inflation is also serious.

The

spreading inflationary psychology
the

and

consequent

speculative

climate—as
manifested, for ex¬
ample, in the stock market—are
potentially very real threats to
sustained growth in general eco¬
nomic activity as well as employ¬
ment.

Rapid short-run increases
are of little help if they are fol¬
lowed by substantial declines re¬
sulting from over-enthusiastic ap¬
praisals of market demands, or
too heavy reliance on population
growth not yet here, or on as¬
sumptions that prices can only
go up and never down. Moreover,
sustainable growth, with expand¬

ing employment, cannot be based
reliance

on

tion

that

government

ac¬

credit will validate
commitments or un¬
price or wage decisions.

or

William

easy

Chappell,

B.

Vice-

a

Har¬

succeed
old

will

June

5

Field

D

a

W.

B.

Raymond

D.

slate of officers also includes

Zeugner

Securities

of

Stone

&

Corporation,

for

Secretary,
and
Philip K. Bartow, Jr., of Drexel &
Co., for Treasurer.
new

members

the

governors,

inated

Robert

of the

club
B.

H.

board

has

nom¬

Baldwin, of

Morgan Stanley & Co., Robert C.

Johnson, of Kidder, Peabody &
Co., and David J. Lewis, of Paine,
Webber, Jackson & Curtis.

Hill, Darlington & Co., 40 Wall
Street, New York City, members
Exchange,
June 1 will admit Max Cone to

will

money,

disrupt,

artificially induced,
than

rather

facili¬

the efficient functioning of
the economy, just as disastrously
tate,
as

will too little money.

Economic

history,

a n

d

abroad, amply demonstrates that
the pace of growth is closely de¬
pendent on the amount of in¬
vestment the economy is willing
and able to support.
Savings are
the primary source of investment
funds.

is

It

essential

therefore,

Donald

Fenner

I.

Webb

will

&

Smith,

with headquarters

and
seek

of

accumu¬

growth
have
It

in this sense.
to have

one

is

on

this

become

a

Incorporated,
in the Toronto

Financial

premise

'

that the

present policy of the Federal Re¬
serve is based.'
That policy is to
so
formulate and administer our
decisions

as

vironment

to

help create

that

is

an en¬

conducive

to

stability of prices (and hence the




2,500 shares,
priced at $10

course,

as

that

before,
man

he

he

had

been

was

of vision.

now

Not

..

have,

in

had

1948

Dewey

and

not

so

Greece

mission.

a

that Greece

He

as

the

reported

going to the dogs,
He suggested a grant of $500,000,000 which was mighty big money
for Paul to be talking about.
It was annoying to Mr. Truman
just as he was headed on a vacation trip.
So making a bold decision, he said all right. Overnight the propagandists made his
action the Truman doctrine.
Up
was

time

until

that

been

considered

President.

the

But

fact

Mr.

just

now

that

he

Truman
an

few

months

had

ordinary

he awakened
was

later

a

world

V'-V
General

a
very
ordinary
sort of
speech. In the course of it he said

was

that

we

all wanted European re-

and would be inclined to
those nations which helped

covery

ordinary person would have

shares

are

for

skies"

"blue

year was not
of great vision or of

iOii

campaign that
a man

world

statesman.

It

was

Robert M. Gardiner

"

the

Huntington Bank Building,
of

the

Midwest

Robert

•G«i^inep,--*'*iteynolds

chairman of The Bond Club Stock

Franklin
a

great

Delano Roosevelt

man

was
because he carried us

to war, one that we will be paying
for the rest of our lives. Somehow
men of peace never attain greatTo

mind Grover Cleveland
great President, but does he

rank with Roosevelt and Truman,

No,

because

his

administrations,

With J. F.

Woodrow Wilson is looked upon
as

great President.

a

into

war,

ever

took

And

we

of

J. F.

He

led

us

the first excursion we
into European politics.

will

never

hear the last

it.

Reilly Co.

Reilly & Co., Inc., 39 Broad__

__

.

mnounce

way> New York City, ., announce
ow
that Jens K. Schanke^is no\v assoasso-

ciated with them,
was

two of them, were peaceful.

&

Mr.

Schanke

formerly with W. C. Pitfield

Co., Inc.

H. G. Barnard Jr. Is

W. G. Langley

truly great men of this country Keller &

This announcement is neither an offer to sell nor a solicitation, to buy any
The offering is made only by the Prospectus.

Partner

Co., 31 State Street.

of these securities.
May U, 1959

NEW ISSUE

Airtek Dynamics,

Inc.

Common Stock

Ex¬

(Without Par Value)

Price $8 per

(Special to The Financial Chronicle)

Share

TOLEDO, Ohio —Richard M.
Covington has become connected
with Stranahan, Harris & Com¬

Copies of the Prospectus may be obtained in any Stale only from such of the
derwriters, including the undersigned, as may lawfully offer these securities in

several un¬
such State.

Co., Inc.

S. D. Fuller & Co.

Now With Hay In v.
(Special to The Financial Chroniclf)

ZANESVILLE, Ohio—Keithi F.
is now with Hay Invest¬
ment
Company,
First
National
Bank Building.
He was formerly

I)enipsey-Tegeler & Co.

Butcher & Sherrerd

Laird, Bissell & Meeds

Knight

Draper, Sears & Co,

Janney, Dulles & Battles, Inc.

Jones, Kreeger & Co.

with W. E. Hutton & Co.

Peters, Writer & Christensen, Inc.

Moore, Leonard & Lynch

Sloan, Rodetsky Partner
JERSEY CITY,

N. J.—On May

7th, Irving B. Waldman will be¬
come
a
partner in Sloan, Rodet¬

Co.,

26

members of

the

sky

&

Exchange.

Journal

Square,

New York

Stock

;

Lincoln, of course, is the
W. C. Langley & Co., 115 Broad¬
because he was the
way, New York City, members of
President during the Civil War.
the New York Stock Exchange,
The lesson is plain.
If a man
elected to the presidency wants have announced that-Henry G
to go down in history the thing Barnard, Jr. has been admitted to
to do is to get us into war.
You general, partnership in the firm.,
never hear of old Calvin Coolidge,
Joins Keller & Co.
yet the country never lived so
(Special to The Financial Chronicle)
peacefully and so prosperously,
BOSTON, Mass. —Jerald L.
The greatest tragedy to my mind
of
is
Herbert Hoover,
one
of the Kafker has joined the staff

immortal

With Stranahan, Harris

&

is

Jens K. Schanke Now

my

was a

Co.,

&

Exchange committee.

ness,

change.

Owens-Illinois Building. He
formerly with Merrill, Turben

: ?
M.

Yet he won.

mem¬

Stock

the
the

June 5,

day of
touting.

150,000 Shares

COLUMBUS, Ohio—George M.
Montag has been added to the
staff of John B.
Joyce & Co.,

the

bers,

campaign of a ward healer, using
all the demagog'uery in his book.

Washington,

in

from

His

Bond
mem¬

(Cleared

•

cocksure.

that of

,

to

Club

would

been

offering
circular
distrib¬
uted

so

however, that it was not
generally expected that he would

be defeated

Ac¬

share.

a

cording to the

Chronicle)

We must

the other.

a

John Joyce Adds
(Special to The

savings through inflation
the widening temptation to
inflation protection through

speculative commitments in com¬
mon
stocks, real estate, and the
like, endanger the very founda¬
tions of growth.
There can be
no
conflict between stability and

man

a

in

conjunction with The Bond Club
of New York's annual Field Day,
is making its
1959
offering

office, 11 Adelaide Street, West.

was

erosion

the

year

a

partner in Merrill Lynch, Piercej

pany,

The

On

Exchange,

once

Merrill Lynch V.-P.

ducive to saving and wise invest¬
lated

law

back

head "of

An

TORONTO, Canada—On May 25

that the economic climate be con¬
ment.

planning

was

vacation.

themselves.

bers

here

truth

of his departure Paul Porter,
New
Dealer
and
now

help

D. I. Webb to Be

factors, but money alone cannot
accomplish the job. Indeed, too
much

The

called upon to make a speech
at one of the eastern colleges.
It

of the New York Stock

skillful

_

the time.

at

Caribbean

A

in real terms

ficiency. These depend mainly on
management, imaginative
leadership,, responsibility, hard
work, open-minded welcoming of
'innovation and change, ambition
combined with ample natural re¬
sources,
and constantly greater
utilization
of
machinery
and
equipment.
More money can be
helpful and at times necessary to
facilitate the functioning of these

this, his action didn't

say

bold

was

partnership.

increases in output ancl ef¬

said, Greece from

is

Marshall, then Secretary of State,

To Admit Max Gone

on

Economic growth

can

came

to

Hill, Darlington Co.

imprudent

means

Carlisle Bargeron

statesman.

wise

operates

much so,

«

practicing
is

Stitzer of White, Weld & Co. The

As

somewhere

which

began to get the credit for

hailed

e

saved, it

is

The end is not

President, of

as

ordinary
pictured

'."1

former

Chappell

a s

Vice-President

of

h

Makes Offering

this plan. And instead of the plain

Greece.

to

eve

Nominated

nominated

:

by

h

PVCn

IJvllll UIUII UiUvH kAVIla

of

Truman
soon

is that Mr. Truman

to succeed Mr.

K.

c

total

DAMfl ftlllh

yet.

Cited

plan

the

$50 billion.

near

hey;

make

we

think

I

after f„:
said, -■•••

his Tru-

h i

into
Europe and since that
have given away billions,

time

deci-;;

a

Orland

a

The Bond Club Stock

began pouring money

ill

place!

could

I

Y.

Webster

We

history,

look

try
Club,
Scarborough,

new

ex-presidents,
candlelight to

living
hold

doesn't

the Communists.

Sleepy

Chappell

two

the

he

the rest of

because

Hollow Coun-

N.

men

/

w

speaker
speaker

This

at

y

in

i

annual

of

shall Plan for Europe.

poured money

the

at

club's

e

take his

w

held

be

...H

•man

election

them hell

to have been very keen to read
any significance into the speech.
But much to the surprise of Marshall himself the
propagandists
began to play it up as the Mar¬

; 75th

birthday.:

were

Trask & Co.
The

makes

upon

sions.

Cook

H.

what

bold

Spencer

the

and more dif-

occasion

of : his

poration, has been nominated for
president of The Bond Club of
New York to
/i ; "

unemploy¬

as

,the

President of The First Boston Coi>

of

more

tell

Truman

.

have

of the News

We have been reading the
heaped upon Harry

concen¬

who

getting
to

Pres. of N.Y. Bond Club

the

at

encomiums

Chappell Named for

the country nipping
Republican Party, giving
as he expresses it.
But

going about

Hoover.

It's

ficult

come.

discredited Presi¬

A"

and

By CARLISLE BARGERON

great.

erations to

is

it

-

those

among

out of work

Ahead

people—including the gen¬

all its

nation

the

of

completely

Everybody likes Harry Truman
the good time he is having

W<ashington

and

must not

portant problems. Unemployment,
for example, although down more
than seasonally, is still with us,

been

From

are

course

welfare

a

dent.

genuine economic progress.
not disposed to chart our
with the shortsighted view
of
disarming
current
criticism
and possibly gaining a bit of pop¬
ularity. Popularity should never
be
a
goal of central bankers.'
Their only goal must be the en¬
hancement of the long-run, eco¬
We

economic recovery and expansion
to date have not solved some im¬

trated

but

growth

and

nomic

that

sustainable

maximize

to

fact

we

the

to

eyes

in order

soundness of the dollar),

13

(2201)

Financial Chronicle

Townsend, Dabney and Tyson
C. F. Cassell & Co., Inc.

Ernest M. Fuller Company

14

The Commercial and Financial Chronicle

(2202)

auspicious start, and I, for one,
hope that some kind of Free Trade
Area
negotiations (under what¬

Need for Trade Liberalization

name)

ever

Cited by a

U.S. Businessman

I

sentative

American

Asserts

(1) develop brand

we

new

more

come

ments

would

reactions

like

to

give

the

you

solution

in

Trade

the

this market may

Area.

Then,: I shall
briefly outline
what, as far
I

can

should
V.

S.

the

wish

we

achieve

rather than

tors

European
policies if

think

to

as exporters, we
expanding outlets for

of

American

capital

in

investment

the Common Market.

trade

liberalization
in

an

U.

Atlantic

be

the

H* J' H*inz'

the

ICC

As

glad to state in

am

presence

Eric Wyndham
White, that the U. S. Council and
sively

of

have

more

Common

become

is

Market

said,

there

"The

is

some

United

States will be in favor of the Com¬

countries."

"under-developed
the

the

remarked:

once

,

cations for the

I

and

when all

element of truth in what

an

wit

impli-

Cor GATT,

must be
future

progres¬

more apprecia¬
accomplished by
We highly value the

and

Market

mon

.

.

until

..

it

starts

functioning."

It is important lor
us—and for the other trading na¬
tions
the

the

of

"Six"

Common

world

too,

even

Market

for

that

the

not

themselves,

be¬

should

-

:.y

Economic

in

This is

Our vffm-U
.Olir Efforts.

Continue
Continue

now,

the

.

have done

wo

field

Of

the U. S. Council and certain other
business organizations in the U. S.
have made the cause of the Or¬

ganization for Trade Cooperation
their own.
Unfortunately, our
Congress has not yet seen fit to
give its blessing to that act of ap¬
preciation of the past and of faith
in the future performance.
Still
the

GATT

good

valiantly continues its
work and may it long be

doing just that!
The OEEC is

come

protectionist bloc.

a

tions might turn into
free of tariff barriers

port
the

quotas,
basic

directed

and

especially

concept

against

•

been

im¬

not

be

of

the

we

ac¬

rest

world.
Common

cepted, as I
political

for

seem

said

moment

a

adust

ago,

which to

reasons

overriding; also

could

we

Market

us

felt that

we

ourselves

it

to

without too much

child of the will

a

difficulty. Sim¬

ilarly

we

thought

we

©f Europeans to work out together
their economic salvation—and of

could adjust
ourselves to the conditions
brought
about by the creation of the Free

the Marshall Plan.

Trade

business

can

ganization

and

We in Ameri¬

fond

are

of

believe

that

that

or¬

it

is

indispensable to the welfare of
both Europe and the West—per¬
haps for the under - developed
countries

as

well.

U. S. Government and

©pinion.

our

public
Unlike the OEEC, how¬

ever, this approval, rests

on

essen¬

tially political, not economic foun¬
dations. Inducing Franco-German

and

would

basic

idea is excellent.
Many of the
renewals, especially the more re¬
cent ones, are less commendable.
The most recent of these, of June.
1958, allows the U. S. Government
to
negotiate, within the GATT
framework, tariff reductions up to

20%

McDonnell find

are

apprehensive of blocs of which

we

are

have,

not

as you

a

member.

know,

Also

we

an aversion to

discrimination, especially

when it

is directed against us!
But, having
endorsed "Little Europe" for

po¬

litical
men

*An

reasons, we, the business¬
of
this country, find conaddress

International

unfortunate

if

those

Washington, April

25,

of

1959.




before

the

Commerce,

who

whole thing a good deal nearer.
As

the

between

United
ment
an

unhappy,

ject

schedules

This

Kingdom

last fall,

and

shall

we

what

see

As

you

doubtless "

are

idle

been

to

"lobbies"

ther

in

the

U.

S.

all

the

brother,"

of

much

have

to
a

as

wished

have

adopted
friendly "big
some

for

of

us

you

to

lie

less aloof.

As of now the project
be, if not dead, at least
in a position of decent
obscurity.
Meanwhile, France is putting its
appears to

economic

household

in

tary reforms which, to

satisfaction,

seem

order
mone¬

sincere

to be off to

an

•

V

-

To initiate joint programs ;
within the Atlantic Community to ii

thereby

in-

trade

solidarity
membership

ol; the ^friends.

tior cS

the

GATT.

OTC-the

the

But

had

im-*

.

Whether these make it possible to' promote; all
should the more effectively true partner-

could—become full members ship for economic growth between
of the organization is a debatable the more advanced and the less
question
but needs
immediate advanced countries of the Free

thoughtful exploration.
What I
would emphasize emphatically is

World, thereby promoting human
welfare, individual dignity and

that there are ways, there must be international peace,
wa-Vs>

of

making

associate

our

memberships more effective ana

these

Taff

Pore
in

For

Underwriting Mgr.
Sprayregen Go. V

Conrad

26

Taff

has

become

asso¬

with

ciated

Sprayregen
& Co.,
Broadway, New York City;
xuiiv

ev-

cromo-

American

j^t as the common tariff of the derwntmg department,

press

this^
withering

(of 4he European impetus-towards
I wonder if I should go liberalizing international trade,
far as that—but I;should;-rather than its extension and con-

Tariff

sonally,
quite as

•"

Commission.

''

k

t

S.

Per-

%

4

Trade Parade"

Today

West

the

the

time

same

be

eco¬

own

sake.

must

nomically strong for its
it

must

effec¬

tively assist the further economic
development of vast

areas

solidation.-What'then should the U. S. do
-

about it?

I should suggest the

lowing elements of

fol-

of the

World, therefore, the freest
possible trade within the widest
possible part of the planet is esIn

accroach

is

my

opinion

through

the

the

ready referred.

P

^

tariff

Market must be

of
as

'

the

low

about

16 months

which to pre-

in

subsequently adopt
npw

||f0Q

OffICCFS

ST. LOUIS, Mo.—Fusz-Schmelzle,
&

Co.,
Inc.;
Boatmen's
Bank
Building, members of the NeW
Exchange, have elect¬
ed Richard A. Schrhelzle, William

York Stock

C.

Bastunas

ta'son

and

Charles

M. Pel-

Vice_Presidents

"the

.

<2) To revise the P°hcies pur-

o?
sued by the United
al- • f,
n/Fr

common

possible,

necessary

t

States within

make

°a.

nur

car-

our.pa

tlclPatl0n more effective in that
Organization and at the
to

CUrities,"

Inc.,

Building,
the securities

Boston

which is continuing

busfness o£ Shaiman & Co.

ipcriciatinn

£

best

Common
as

AIILab*••

|

■r.i:

give the Congress elected in 1960

But this calls for

certain crereauisites- the
outside

II ant a*

Join Preferred Sees.
(1) To create new Concepts for*
legislation to be approved in June:
(Special to The Financial-Chronicle) '-~v 5';
1962 upon the expiration of the
DENVER, Colo.—Irving J. Niepresent version of the Reciprocal muth and A. Keith Reed have
Trade Agreements Act. This would
joined the staff of Preferred Se-

Atlantic

rnmSfnrHfv to which I have
In £hti
Community

QaIiihaItIa

jTllSZ" vClllllGlZlC IvSRIOS

realistic and

a

Free

sential.

Eiict

.

constructive program:

Support Vital for

"Free

At

an

been

the

of

this is

and

—or

not

tno

the

on

For,

not supposed to have a common
outside tariff,, their national tariffs members of the New York Stock
nefmanent could
be negotiated downward Exchange as manager of the un-

enneentrated

nQrhaDS

America's alone, but :

two "Associate Countries"

have they been entireYet it should be

forces

clusivelv

not

be

new ' equally that of our Atlantic friends '!
among (and, indeed, of our wm-Atlantic ■

desirable
whole

must

bringing

useful than they have been
in this
rec(pt years. I speak
of
the
noted
that "freer
trade"^ senti- ^n"ec^1?p ;Parjlc,f,a
y
too
ments have been
growing, too.4^
Also—and tnis point
They were particularly high in ueeds making
while the mem1952 and 1953; afterwards, liberal ,;hers of.the Free Trade Aiea weie

/

our

*

t%an the(3)
Treaties,

Rome

the United States).

ly unsuccessful.

U.

in

:

OEEC (whatever t'-e final name^portant point to make in closing,
may be). Here again the United the movement for freeing Atlantic
States and Canada (if I may add) trade—which I am strongly enhave an important role to play, dorsing here—is not any kind of
They are "Associate Countries" oi "ganging up" of the industrial
the OEEC—which is not the role countries of the West. Far from
of mere observers (as the Cana- it! The strengthening of economic
dians better realize than we do in ties among Atlantic nations will

aware

have

the

unfolded

givey the

Europe" will

only happen if the Rome accelerate economic development*\

being

and

*

protectionist

can

of

A Free Trade Area must come

out

comes

of thern.

V

the U. S. Govern¬

appeared

attitude

might

France-and

.

Treaty schedules are y negotiated of the less developed countries,
downward, and they can only b'.vy; You will see readily enough
so negotiated if the U. S. under-ythat the above is not a program of
takes the negotiating and has an specific action; it is an outline of
attractive quid pro quo to offer, fundamental vobjectives.
Action

four-year period, subt::e
limitations
of
the

to

acrimonious

through bold financial and
by Mr. Heinz
Chamber

these

the

Company.

lower in the longer run,

over a

attach
great importance to the welcome, and fight for, a policy
more
efficacious
than
the
concept, however vague, of an At¬ far
lantic Community, the proposal of latest version of the RTA.My
reasons
are
the following:
an F. T. A.
appears to bring the

Paris

peace.

be

policies had to be purely defen¬

Economically,

regional organ¬

recognize
discrimination

sive.-'Furthermore,- to

debate

any

also

1947, will review

.

The

witness

reconciliation is in the interest of
Western unity and of world

ization can, in
practice, become a
"bloc"—and like most people we

We

since

Proposed candidates for office in the Metropolitan Economic .;
Assn.'s forthcoming year are: President—Norris O. Johnson, Vice- y
President, First National City Bank of N. Y.; Vice-President—; (
Emanuel Steih; Professor and Head of New York University's * .•
Economics Department; Secretary—Bruno Stein, on the faculty J
of New York University; and Benjamin Klebaner, on the faculty
of City College of New York,
;yv.;'y:w.;' '
The outgoing officers are: President, Robert D. Letter, Pro„r])
fessor of City College of New, York and Secretary,and Treasurer *;:
Harold B, Ehrlich, staff member of the research department of ;

consistently active and :^lxAgain much maybe all
aggressive in this field of trade j 2®pei?f?f.+lipo?4.Sie TtV1-\ !3gcf.Sf
possibility of
against us by all the 17 countries liberalization, some have gone as the ability_of the United States to
of the OEEC.
Freet* Trade Parade. ,1
To this we would far as to advocate a policy of out->lead
have to adjust by
we
making some right free (not freer!) trade and ; greatly; fear that failing
even
basic policy changes of our
suggesting the abolishment >.s^a}}
the
away
own;
Area.

the

it

The European Economic Com¬
munity has received an early and
emphatic blessing from both the

University

York

American view of the\facts ancVissues.

and I

renewed

times.

many

years—nor

The

New

study "Trade and Payments in Western

keystone of our foreign trade
policy, since 1934, has been the
Reciprocal Trade Agreements Act
has

at

aid.

hope we shall continue it.
But
foreign aid alone is not sufficient.

because

would

the

area

of

(yy
and

position; and Dr.'William Diebold, Jr., Director of EcoI nomic Studies, Council on Foreign Relations, author of definitive ;
'

I real¬

vast

a

Service

Information

British

our

foreign

of vital importance

Economics

"peril point" provisions (prior to
the negotiations)
and subject to
ize that it is hot supposed to turn
the GATT.
the "escape clause" being invoked
.performance of the last ten years into one under the terms of the
thereafter. "Escape clause" action,
under his direction by the small Rome
Treaty; yet probably no
by
the
way,
has been unduly
Staff of that agency.
It is good businessman in this country has
broadened by the 1958 legislation.
that there should be a nearly uni¬ fead and studied in every detail
In my opinion, the U. SI'Governversal body where trade problems that voluminous Treaty, and we
all know that things which are not ment now has entirely insufficient
Sire frankly discussed, complaints
bargaining power in international
examined, an improved modus Vi¬ supposed to happen, often do hap¬
trade matters.
This is certainly
vendi sought. The annual reports pen nonetheless.
The establish¬
not in the interest of American
ment of a broad Free Trade Area
cn "International Trade" prepared
business. Some experts for whom
by GATT's secetariat are unique would be helpful in averting this
I have high regard question the
and they are indispensable for all danger.
of having
The concept of a Free Trade wisdom
a
new
(and
of
us
engaged in international
trade; and the so-called "Haberler Area did indeed fire our imagina¬ cumbersome) round of tariff negoReport" issued by GATT last fall tion over here. I need not tell you tiaiions under GATT when the
has been widely and justly read that the words "Free Trade" are U. S. has so little to offer—and on
uncertain,
and discussed. When the question almost
reversible,' terms,
"fightin' words" in the so
of making GATT permanent, un¬
United States.
Yet the idea ap¬ These negotiations have, however,
der the new set of initials: OTC, pealed to us that the OEEC na¬ been decided upon, or so I gather,
tive of the work

y;

v •

French

The

which

of

Director

Affairs

;

position will be Mr. Richard Miles,

Atlantic

Must
Must

Up till
best

Economists'' Background

..

constantly

of

does
largely
depend
U. S. actions and policies.

W»
We

i-

Presenting the British

operation
upon

■.

market, and the economic division in the NATO Atlantic Com¬

ourselves and I propose, for once,
not to fall into
that

amended

would

what

S.

Yet,

context, and

we

e

City..

three

munity caused by ECM, this meeting should prove to be of
interest to moist economists in industry, business and universities.

only too often accused of lec¬
turing our foreign friends and not

exports

S.

regional free
trade is likely to bring about. In
the second place, as foreign inves¬

the

and

U.

tal investment which

see,

be

absorb more, not

than did its
component countries, owing to the
rise of living standards and capi¬
less,

in

This is, admittedly,

are

American

an

ex¬

been

ly controversial subject-,But

lines of economic

two

and

but should not have to be, a high¬

busi¬ consideration: in the first place,
GATT, the we think of the vast market, free
OEEC, the Common Market, the from trade restrictions of all sorts,
and we feel that in the long haul
proposed Free
of

towards

nessman

as

is a goodly
fellow citizens and

recent years.

Act; (2) become more active in OEEC, and (3) initiate
joint programs within Atlantic Community to accelerate devel¬
opment of the less developed countries.

I

The

as

progressive
than it V has

pansionist

prospects

will

Remington Rand Auditorium, 315 Fourth Avenue,
v: '%■
'-V
oppositional^ economists will be brought together
by the Metropolitan Economic Association of New York for its
fourth and last meeting of the year.
Elections fori the coming
I95a-19b0 academic year will also be held. •
=••
•
V
"
In view of concern expressed about the U. S. A. gold-outflow,
the future acceptability of the American dollar, the pace of Ameri¬
can
investments behind the trade-protected walls of a common
New York

particular, of my fellow-busi¬
that the foreign economic
policy of this country must'be¬

legislation to follow expiration-of Reciprocal Trade Agree¬

European Economic Integration

consequences

15, 1959, at t

this

!

in

more

Thursday, May 14, 1959

be expertly scrutinized by an English,
French and American economist Friday Evening, 7:45 p.m., May
and

nessmen,

policy must become

persuasive and expansionist. Urges

in OEEC

convinced,

am

number of my

repre¬

analyzes U. S. and European policies needed for trade

liberalization.

may

operation innerert
past decade.

Chairman of II. J. Heinz Co.

.

.

NEVS YORK CITY—European economic, integration

be resumed later
this year.
We would hope for a
continuation of the spirit of co¬

By II. J. IIEINZ, II*

Industrialist, economist and governmental international

To Debate

.

same

With Waddell & Reed
(Special to The Financial Chronicle)

.

time dell & Reed, Inc., 1220 Southwest
Morrison Street. He was formerly

explore the implications of full

membership.

.

PORTLAND, Oreg. —Harry E.
Moore has joined the staff of Wad-

with Donald C. Sloan & Co.

•

Number 5846

olumc i09

(2203)

Chronicle

The Commercial and Financial

...

amount

Glowing Role oi Monetary Fund
Managing Director,

stability and convertibility of
Mexican peso. The resources
made»available by the Fund to-

gether with
lion

quota's

extends to

concern

taken by

measures

balance of

:

about international trade expansion

*

individual countries to correct

difficulties; finds various governments
prefer Fund's stabilization planning to that done by other .
countries' representatives or by private credit institutions; ;
comments on Fund's ability to prevent serious foreign exchange
disruption during Suez crisis; notes shift of Fund's activities ■•:>/
from Western Europe to other parts of the world; and is grati¬
fied monetary stability is becoming acceptable and inflation v
unacceptable as a basis for sustained growth.
payment

In the second section of Article I

of

the

ment

Fund's

of

Articles

it is said

Agree¬

be the purpose

to

of the Fund "to facilitate the

ex¬

of

world.

the

pansion
balan
te

and

levels

of ;e m p i o yment and real

income and to

develop¬
of the

ment

re¬

of

all

members

obtained

as

product of what
wildi

Lppfnsd1nrehidivi1dUua? ^untries
-

—

-

-

cannot be uninter-

that the Fund

•$ '*«—-i

the policies

ested in

pursued and
the steps taken to promote eco¬
nomic growth within each indi¬
vidual country.
The Fund must
also be concerned with methods of

financing

methods
the

in

inlead to
for

investment,

of

flationary
deficits

soon

balance

of

pay¬

ments, and thus to the need of
taking measures to correct mal¬
adjustments in the balance of pay¬
ments.
It is

opportune moment now
these
problems,
for

an

review

to

of- them

many

are

foremost

in

men's minds, and there is a great
and growing eagerness to find the

basis for growth combined
monetary stability.
In the
that has passed, the Fund

proper

with
year

has

continued

gaged

the

in

be

to

actively en¬
discussion both of

these

of

some

problems

general

and of the problems of

individual

As far

as

the year's transactions

interesting feature has been that many countries
haye been able to repay in a rela¬
concerned,

to

an

and

,

'*'V '/•/''

V''

12! months

the

During,

from

April 1, 1958, to the end of March,
1959,total
repayments
to
the
Fund
reached
$537.3
million,
while

drawings in the same pe¬
to $262.9 million. The
fact
that
repayments, exceeded
drawings is further evidence of
the
revolving character of the
Fund.
It
should,
however,
be

the'end

parts of the world, and including
countries in all stages of economic
•

V*

that

at

the

affected

Fund's financial

and

more

to

liq¬

Fund's

other

'

also in the subsequent recession— tion has been adopted in tha
the Fund continued to receive United Kingdom and nJ near adopis i
/~vr<4-r«
TVvV»
OCoiclnnnO
1*
•
Jt.
TT
»1
J*
■*
•»
\-v\ r» i-» y r

i

«

Social

Council

City,

portion

was

of

the

Unite

Naitons,

April 9, 1959.
The first
pu^'i^ed in the April 23rd

the

most important

of the

one

-

sort

one

in

a

another

or

of

part

large

involved some
the Fund's Tlle

is

,

.

the

in

due

.

.

. _

enable them to consent,
While the general increase in
Fund quotas was fixed at 50%,

members"rt

over
—+«
past/year to

years

to

1958

in

assistance
tral

and

bank

+oeVmipAl
technical

nm,rUo
provide

such fields

and

and

cen-

policy
budgetary

exchange

monetarv

statistics

as

and

the

financial

The

like

-

,

,

,

«

a

,

ountac

resources,

has

.

was

by
that the increase*

now 011

the way will not do much

more

than

so

restore

in

Continued

real
on

rangements which for years have
led to harmful distortions in its
In

ment

-■

December, 1958, the Govern¬
of Argentina presented to

the Fund

zation

a

comprehensive stabili¬
which included
credit
measures
to

program

fiscal

and

inflation

to

a

end.

quick

inreform of

The stabilization program also
eluded

a

far-reaching

system: /All

exchange

the
trols

on

■

con- _:

trade and payments were

single unified ex- /:

a

market

was

established

which, for the time being, would ,{permit the peso to fluctuate in /
response
to market forces.Iii: >
support of this program, Argen- . .;
stand-by arrange-

tina obtained

a

ment * from

the

for

Fund

amount

zation

of $75

credit

Treasury

million;

a

the

from

an

; •
"•

stabiliU.v

?

greater production—sound

S<

of $50 million; balance "■/•
loans of $103.5 mil- >

of payments

fr0I"lhe

r
'

Bank,
tlfe
Development
Loan
Fund, and United States banks;
and
development loans of $100
million from the U. S. ExportImport Bank.

Technical specialists

—

gently needed in today's world
thriving Puerto

af'challenge. In

Rico, thousands of young

/ people and adults are now being trained for
:
such tasks in well-equipped Vocational Schools
throughout the Commonwealth.

*

Subjects cover scores of demanding occupa-

tions, from sewing-machine

investments

The value of these

competent industrial

workers—efficient office personnel—all are ur¬

-

I

also

Chronicle.




with

the

want

to

a

to

special
transaction

make

recent

Government of Mexico.

clear in fast-rising

special schools is already

earning power, increased

productivity and more wide-spread prosperity
in Puerto Rico. Such educational progress con¬

tributes

greatly to the strength, stability and

diversification of Puerto Rico's economy, and
to

the soundness

tunities

operation to X-ray

Puerto

of the investment

oppor¬

offered in the tax-exempt bonds

of

Rico, its municipalities and its various

Authorities.

techniques.

Early in March, Mexico obtained
a

six-months

ment

from

stand-by
the

Fund

arrange¬

for

an

GOVERNMENT DEVELOPMENT
BANK
Fiscal Agent

FOR

of

50%,

bilaterial trade and payments ar¬

trade and production.

taken

at least

been

also

account

.
n.nid,igea
the fact that in the last decade the
-The U. S Government took the
initiative at the Annual Meeting volume of world trade has nearly
in New Delhi in 1958 to propose doubled. And since 1944, when the
an enlargement of the resources of Fund's quotas were first deters
the Fund and of the World Bank, in terms ofgeneral level of prices
mined, the dollars has risen

welcomed by the adopted instructing the Executive
facilities which Turkey has ob- Fund's members; in 1958 govern- Djrector_ t
work
t
detailed
tained from various sources will ment and central bank
officials Directors to work out a detanea
help it to proceed with a balanced from 41 countries participated in proposal for an increase 111 quotas,
development program in condi- the program.
*
if an enlargement of the resources
tions of internal price stability.
They should also enable Turkey
to dispense with the comnbcated

The

conclusion.

successful

ing

—

-

has shown.mo:re and more clearly currencies which have been drawn
the role that the Fund can play upon in by 75%. In will be mrenter for monetary coonera- creased recent years, considering
for monetary coopera the need for increasing the Fund's

the Fund «» «»ter
16 countries in the
•
F

^administration

rnntrnl

1962.

.

important constructive steps, $1.4 billion; in fact, the Fund's
experience 111 recent years holdings of gold, and of the six

These negotiations are now near- Fund's annual training program At this meeting a resolution was

reference

Mexico

be

T

given the opportunity to renegotiate with its OEEC and U. • S.
creditors the schedule of repay¬
ments of its short- and mediumterm
debts which were falling

parts

is the concluding portion, of Mr.
Jacobsson's address before the Economic

of

_

activities

*This

edition

J*

+i

mi

1

countries themselves, have proved

to

Moreover, the Eu¬
ropean countries cooperated to re¬
uidity position.
lease
Argentina
from
certain
commitments - under
the
Paris
Emphasis Shifted From Europe
Club
arrangements which were
The improvements in Western
not consistent with the establish¬
Europe have shifted the emphasis
ment of a free exchange market.

aitd

year—

with members to be found in all

the assistance of the OEEC, was. visited

of

March,
1959,
the
Fund's ..commitments
under
stand-by
arrangements
amounted to $1,157.3 million, and
these
.contingent- liabilities
of

,

place within 34

by way
of a drawing
and a which will be held in Washington
stand-by arrangement. In the fol- beginning Sept. 28. Two countries
lowing years, especially at the have already notified the Fund
height of the boom, when loan- that they have agreed to the inable funds became scarce — but crease in their quotas, and legisla-

-

came

more

Agree-

Fund

the

countries< during the past

;

change

for the

of

of $100 million, and U. S. agencies work. SHowever, at the specific
furnished _£
$234 million/Moreover,* request oi^uie X."C1
governU...i?quesi of the member i,®

removed and

'/

course

XIV

have taken

ment

the

earlier.

added

Article

the

drawing

a

tively short time amounts drawn

riod

Consultations under

its members.

OEEC countries agreed
grant credits for the equivalent

lion,

bring

countries.

are'

and

'

interest were
Argentina,
associated with

From

ures.

Per Jacobsson

objectives of economic
The expansion of inter¬
trade is, however, to auen
iiuwevcr, tu such

national

1956, been able to grant financial )3e reached by September 15, this
assistance to the United Kingdom year, i.e., before the next Annual
with for a total amount of $1.3 billion Meeting of the Fund and Bank,

the Fund

year

consultative

technical assistance relations

particular

of

cal/ credit

productive

primary
policy."

continued / its

17 countries requested special additional increases, to which the
Board of Governors has agreed;
and the .opportunity has been
The program which the Turkish: by
these
consultations to exThanks to the efforts made in given to countries with very small
Government
presented y at; the / change views on 'their policies the individual countries (helped quotas, many of whom are hero
same /time
to the Fund,-to the with the Fund.
•
in several cases by general mar- in Latin America, to accept appreOEEC, and to the U. S. Govern- ; v • ,y-V:
ket developments), and to timely ciable increases. If all the counment, included far-reaching fisFund's Technical Assistance .
assistance by the Fund,ithas tries consent^to the increases pro-

maintenance

sources

1959, the Governors had practically unanimously approved reslutions giving effect to the proposals of the Executive Directors.
It is now for each of the member
countries—normally after authorization by its parliament
to decide whether it will take up the
proposed increase in its Fund
quota./For the enlargement to
become effective, countries rep-

able about $4.2 billion, of which
approximately two - thirds has
since they were
links between the Fund and its been provided since the autumn
comprehensive stabilization pro- members,
The member govern- of 1956. Let me add that out of
grams, and supplemented by sub- ments
themselves have increas- 41 stand-by arrangements 29 haye
stantial
credits
obtained'.? from ingly
come
to
appreciate the been with countries in Latin
other sources.,;>(>value of
the opportunity-given America.
.
;

tions

contr i bute

the

should be

increased, and transmitted a detailed report to the Board of Governors on Dec. 23, 1958. By Feb 2»

.

During .the past

these with Turkey and

to

thereby to the
promotion and
of high

ommended that quotas

d

ational

r n

by them to be desir-

'

4

1 O

_

found

able. The Executive Directors rec-

and
c e

growth of in-

trade,

A.

~

also

.

period mentioned above the Fund
extended financial assistance, ineluding the renewal of stand-by
—

the "

were

announced in March, Aid, there was relatively little
$75 million already available as need for countries to turn to the
a
stabilization Credit from the Fund. But such a need suddenly
U. S; Treasury, and Mexico's own arose in connection with the Suez
foreign
exchange
reserves
in- crisis, which primarily affected
v;.;;creased the international financial sterling.
Nobody can tell what
resources
at the disposal of the the
consequences
might
have
Mexican authorities to $625 mil- beeh in this emergency, not only resenting at least
75% of total
:
lion and thus contributed to in- for sterling but for other cur- voting power (before the increase)creased confidence in the Mexirencies, had not the International must give their consent. It is ex"can
peso, v
Monetary Fund in December,:; pected that this percentage will

the 12'months'

In

credit of $100 milExport-Import

a

from

Bank,

advantages, and changed public attitude toward inflation. The
former Bank for International Settlement's economist stresses
that the Fund's

maintain

to

the

foreign exchange crises, new

in

success

and

decision

the

of
portion) deals with the evolving role of the

Chronicle for first
and

International Monetary Fund

In the first two years of the
Fund's existence, there were quite
a number of transactions mostly
with countries in Europe, but
then for a number of years, while
sterling area and Latin American
countries had quite substantial
cash balances accumulated during the year, and while a large
part of Europe received Marshall

the

At

budgetary and
reiterated their

the

field,

irrevocable

of Mr. Jabobsson's address (cf. April 23 issue

This portion

Fund

credit

Washington, D. C.

•,

million.

$90

in

measures

JACOBSSON*

By PER

of

time the authorities adopted

same

15

P.O. Box 4591, San

Juan, Puerto Rico

PUERTO RICO

for the Commonwealth of Puerto Rico

37 Wall Street, New

York 5, N. Y.

terma

page

1$

26

surprise to find one financhoosing ultra-

as a

THE MARKET... AND YOU

S
was attracted by a new rate increase

,

were

times than not

Al

.

Thursday, May 14f 1959

,

^

Growing Role of Monetary Fond
the

origjnal

endowment

o£

the

The real significance of the

jrund.

bid which came only a year increase is not so much in the inirregular more that half the proceeds ot any after an earijer increase had creased capacity of the Fund to
this week with sale be applied to reducing
miihnriypH
Tho re^ula- meet now foreseeable needs, but

.

0jL

attention

the

part

By WALLACE STREETE

.

Continued from page 15

cial service

Stocks

and Financial Chronicle

The Commercial

(2204)

attitude has been reflected in the
decision

to

increase

the

Fund's

resources.

*:

-

,

I?16 long-powerful electronics the

debt

the

but

Gratifying Change in Public
Attitude

^^%ities

rule

as
Although great progress has
had ruled the
finally bumping into some adopted merely sets forth that COmpanv was entitled to a ond-line reserves available to been made in recent years, many
persistent trouble. What de- the sale and purchase be made 5:14% return while the return countries which may find them- difficult monetary problems re¬
main to be solved. The most grati¬
mand was around was pin- the same day.
at the end of last year was gves^in Wary
fying aspect of present-day devel¬
pointed most on quality issues. oiIs and Aircrafts Indecisive only 4.8%, so there are high Si ^times of emergency which by opments is the public's dislike of
!'
"
Oik that had qhowpd siptis hopes the higher rates will be their very nature cannot be fore- inflation, and the more general
Du Pont, for one, was per„U11S tftT nad snowed signs
i
b
seen. The very possibility of ac- realization of the importance of

balaneeto

^

-

^

sistently bought and the issue
that last week erupted to its
npjik

all tim<*

finallv

after

bettering the 1955 high

was

?.f sonie demand for the first aut o
^ime
a long while settled

down to indecisive behavior.

the Fund's resources on
w°eLSnid «?w m^
quality fore should give members more

.

cess to

-

Like

other

some

uSai" this week, which was utilities, the return

on

Boston ^urLXthau'to "moveVster to"-

Pretty much the same pattern Edison, which def initely is an

Ward achieving the purposes of
hV
handful nf nninf<; Tf w-k followed by the steels as ne- investment grade situation, is the Fund than if they had to rely
ny a nanatui ol points 11 was
£
.
averse
And on their own resources alone. For
of important help to the in- feonauons 10 neaa on a mm
dn above-average */2/<>. ^na this reason the benefits which the
dustrial average which was Year strike got underway sen- with an increase in earnings pun(j can provide are by no means
hovering around its historic °usty-ReP°rts f-hat steel users 0f possibly 20% if the new limited to those countries which
able

to

breakout

expand its

a

peak despite the ragged spots
that showed up through the

weren't having much success rate schedule is approved the
]" ,bulld"?S IT
con*Pany 'f som®t. "1g
*
tones to tide them over in the candidate for

list.

a

higher divi-

SSlnVrSS

monetary stability as a basis for
sustained growth.
Who wills the
end must also will the means; and
after years of inflation, stability

generally
not
be
attained
a period of strain, or even
period of austerity. These diffi¬

can

without
a

culties

may be mitigated by for¬
eign assistance, but 'they cannot
be wholly
eliminated; however,

confidence has been restored,
is laid for more solid

once

the

basis

progress

the

to

advantage of all

tries are also bound to profijt, since

sectors in the population. In vary¬

tbere is a general interest in the

ing degrees all countries have to

event there is a strike were dend than the

$2.80 payout financial rehabilitation of coun- accept some inconveniences and
Limelight
shrugged off by the market, which has been in effect with- tries in difficulties, and in the es- sacrifices to gain the very real
advantage of a good currency, and
Chrysler was able to make Aircrafts which, like the oils, out change for a decade.
UoTim"iTter natioTiTf monetaiv in the midst of conflicting inter¬
showing on the list of 1959 had shown some selective faests it is often difficult to decide
„
system.
.

Motors Attain

a

highs, which was also better vor for the first time in a long
than anything seen last year, while, also settled back into
but still had a long way to go obscurity for the most, with
before tackling the 1955 high Martin Co. afflicted by a bit
when the issue sold above par.
•

Ford

•

demand and

best. The

*

sold

above

70

what

.

returning its payment to xne
*

at

issue also reached

ulternatl0nal monetary

"*

American Viscose is also a success in Stabilization Programs
candidate for a better diviThe Fund is not designed to take
dend, the hopes even higher over such tasks as are properly
of profit-taking after it had here since management has
l out by the
raced to a new peak for the indicated a good possibility of
the varZs Strtes;

also in occasional year.

was

*

#

The 1

*

o w

-

old, $2' rate in view 01 expec-

*

p r

i

c

eld

issues

tations of half year earnings
some
y®ar
This

briefly when the weren't providing m'any fea- at $1.40 or $1.50 and
shares were being distributed tures even though some of the estimates that the lull
publicly early in 1956, but it better-grade items in this sec- results might reach $5.
was
an
unofficial
counter- tion are still widely favored would
compare with

that

level

but to provide supplementary reserves in order to strengthen the

genera^
situations

certain

in

which

the

private credit institutions in various countries cannot be expected

$2.83 to do ^®.,work

are the proper lines of pol¬
icy. Very serious thought is being
given to these questions, and it is
impossible not to be impressed by
the knowledge and wisdom, the
courage and determination, with
which the central banks and other

monetary
the

their

Suez

crisis, when substantial sums

QP

A,

sD^TaTi
age

P

.

group

trom an Air

r orce

stemmed
announce-

comeback

good

a

as

particularly in steel, was of f-

housing continues to pick up. set mostly by doubts of how

g

Structure

thorities in

when a country js clearly in such

hqUld

of the blue chips that have have been far from being

mum

power.

ones lor

And

it

maxi-

chilled

0f the

merit

risks involved in granting it furlow-priced items with though they continue to offer ther credit facilities.
In such
show returns from a far higher yields than prime situations it is only if a compre-

Ss ES5T5

comfortable 314%, as i n industrials. S
l^nentm
hmrim tAmerican, to 5% in Foremost known
issue
Deen
given a good play

had
a

up

%wre,',
much

the

Sphere S^minp 1largely
aTo'piv
here
seeming
of

A Glamor-Less Value
were

find

,

still

v

borne otner yardsticks were
issues where value

apparent,

one

h

toa? adopted and

well
Santa Fe
a

as
be reduced; and private institureturn of 5% despite tions are not in a position to nego-

a

was

being the times-

.

•A

.

®, 9f

This, too, is a candi- stabilization programs with offi.
•
' rprlfI divi. dais of the Fund than with rep.
y
,
resentatives of other countries or

£nd if earnings; move above

,

t

£

growing. number of

a

(Special to The Financial Chronicle)

/ WORCESTER,

Mass. —Nathan
joined the staff
& Co., 340 Main

M. Rosenthal has
of

S.

Romanoff

Street.

Gilligan, Will Partners
H.

Coen

and

James

M.

Gathercole have become partners
in Gilligan, Will & Company, 123

Greenwich Street, members of the
American Stock Exchange.

With

Empire In v.

(Special to The Financial Chronicle)

Colo.—Sidney C.

LAKEWOOD,
Baker

staff

Jr.

has

added

been

of Empire

pany,

such programs. Experience

s0 far this year.the first Tuar" in the various countries are more
ter net nearly doubled over wimng to discuss and work out

Some other vafdsticks

steam.

u c

making impressive showings tiate

finally running out of also being unfolded to

case

one

Dairies, third largest operator offers

c c cnics them- in the dairy field

spwmcimtheldWs

^ore ^nedJ'b? deterged6 b^thS

to

tasks, and

Joins S. Romanoff
v

soared s0 far for s0 long> some pacesetters in the market al-

ultimate

'round

countries to pursue effective credit
and fiscal policies.

John

Moreover, where yields are they would fare if there is a an unbalanced position that radiiargeiy meaningless in some steel strike, and the shares cal measures are required to re-

^ttaate"milsCfnrVT,nvie

,

fee
i
e

show

.

all

themselves

by the
change in public opinion which
has made it possible for the au¬

market

Big Three of autodom could picture is encouraging. Amer- cents,
have to be provided promptly and
share the limelkht was defi- ican was hard hit by last
""
at a considerable risk.
In emernitely a new note,
year's recession, but is a leadThe continued pickup in gencies of this sort, the Fund's
onn.„ Aiy_ rmnnllonfJAnc
er in the field and should carloadings by the railroads, assistance may well be indispen-

devote

difficult

n£«®ded.

price and this week's for better action eventually, last year which prompted re- difflcult> not.tosay impossible, to
high was the best since it has particularly where, as in duction of the quarterly divi- cope with the strains of an acute
*
been listed. That two of the American Radiator, the basic dend to 25 cents from 50 emergency such as that of the

authorities

world

the

to

Investment Com¬

1480 Hoyt Street.

Jack Dusapin

Adds

'

(Special to The Financial Chronicle)

BOULDER, Colo. — Walter J.
Kohlberger has been added to the
staff of Jack

Dusapin, 506 Juniper

Avenue.

e^t institutions

Joins

Huey Staff

(Special to The Financial Chronicle)

erated

tive

by fears of

actions

by
4-u

new

restric-

10-times

earnings

was

one

Federal such where the glamor stocks

the
u

„i.

j

/in

i

„

rn

rules steel industry was able to hold

since March,

adopted them profits up well last year alpretty much as they had been though its backlog dwindled
proposed. Most market ob- as the steel industry cut capiservers
expected them to have ial spending during the receslittle

influence

ket's

trend/

on

the

This

v

mar-

sion.

i

pick

e w

New
up

orders

late last

s;:

,.

Reserve, but the board, after are at 40 and 50 or more times
weighing various technical earnings/This supplier to the

tightening-of-credit

uu^ xllv;AUU111S d
e
extra.

started

year,

to

*

also makes available
resources to strengthen the regrams, and

L.

A.

prompt- hem

Steel

at

recent

which permits a
to switch from one
to

f'^ed^vth thisworld
of
carrying out
task

any

trade.

In

other^nterZdonal organisations;

of the proceeds of the sale

expressed in this I am happy to be able to report
article do. not necessarily at any that the member countries con-

to

its return at recent prices has of the year.
applying been nearly 6%.
[The views
*

*

*

reducing his debt OrigiUtilitips wore ratW
Zxllv ffco fea UoJtT
ratner
naiiy me
naa proposed nant for the most so it




ctao-

stag-

came

E.

Joins Hornblower Staff
(Special to The Financial Chronicle)

«

CHICAGO,

timG coincide with those of the tinue to show great willingness
«Chronicle." They are presented to work with the Fund and to
as

those

of the author only.]

strengthen its effectiveness;

this

111.

Richard

—

H.

Tourville, Jr. is now with Hornblower & Weeks, 134 South La
Salle Street.

With Goodbody & Co.
(Special to The Financial Chronicle)

CHICAGO,
liams

year."

company

another without

Lumis

Huey Co., Equitable Build¬

has

111.—John

become

Mesta also earnings and new orders the Fund will have to maintain Goodbody &
shareholder meets the yield test, too, since doubled for the first quarter close contact with the authorities Salle Street.

isfactory

—

affiliated with

ing".

levels international cooperation which

stewed principally from not mg the company to predict offereddespite reporting both
a return of around
that the FRB did the flatly that 1959 will be a sat- 4 /a. /o
rule

Colo.

has become

^

fact

tighten the substitution

positions, the amounts thus

serve

*

;
*
obtained are often supplemented
Steels, too, were held down by resources from other agencies
by the strike threat and fears under what has been called "parthat new orders will drop and aHel arrangements."
give the companies a hard
Alongside the granting of finantime in the second half of the tisksalheaFundnhas0ttlfe dutv^to
year if a strike is averted,, consider general monetary develEven such a leader as Bethle- opments with a view to promoting

DENVER,
Beran

Co.,

T.
affiliated

1

Wil¬
with

North

La

With A. E. Weltner Co.
KANSAS CITYfc

Mo.—Elmer L.

Priest has become connected with
A.

E.

Weltner

&

West 10th Street.

Co.,

Inc.,

21

Volume 189

Number 5846

.

.

(2205)

The Commercial and Financial Chronicle

.

ADVERTISEMENT

ADVERTISEMENT

ADVERTISEMENT

PACIFIC RAILROAD COMPANY

UNION

SIXTY-SECOND ANNUAL REPORT —YEAR ENDED DECEMBER 31, 1958

OF

REPORT

BOARD

THE

OF
New

TO

STOCKHOLDERS

The Board

of

OF

UNION

submits

Directors

CONDENSED

Lines,* for the

STATEMENT
.|

•

COMPANY:

ended Dec. 31,1958.

year

Operating

expenses

Increase ( + )

Taxes

(including taxes

on

$517,060,102

"$382,354,717

69,803,903

73,689,677

—

20,692,259

22,197,684

—

Net income from

ations

$ 38,818,024

—

transportation

oper¬

—

Net income from oil and gas

(excluding income taxes)

24,566,034
14.765,358

All other income—

on

—
—

4,531,079
618,398

$ 82,792,476

—$

4,470,345
539,687

"$

4,520,711
530,406

—$
+

Total fixed and other charges

Net income from all sources

5,010,032

$

5,051,1) 7

—$

$ 78,247,776

^$

465,332

$ 77,782,444

stock

outstanding December 31, 1958, compared with $3.34 per share
outstanding at the close of 1957. The decrease of five cents per share, or 1.5
per cent, represents the combined effect of a decrease of six-tenths of one per
cent in income after preferred dividends and an increase of nine-tenths of one
per cent in number of outstanding common shares.
The annual rate of dividends declared on common stock

$1.60 per share,
or the same as in 1957, but the amount of such dividends (48.4 per cent of net
income after preferred dividends) was somewhat greater than in 1957, because
of the additional shares issued oil October 6, 1958.
" v
r r
was

Attention is directed to the fact that the Company's net income benefited, as
it has for

a

number

of years, from

the deferment of Federal income taxes

Ties

of a 6.6 per cent decrease in
carried, offset in part by an increase of 4.2 per cent in average
per ton-mile. The low point of the economic recession was apparently
in April, 1958, but the recovery was somewhat spotty and gathered

ton-miles

slower rate than had been hoped for. It was not until September

that the volume of Union Pacific freight traffic began to show an increase over

Ton-miles

of

revenue

freight carried

in the first eight months were

cent less than in the same perio
of 1957, but in the last four months
the volume of traffic exceeded that for the same period of 1957 by 3.3 per cent.
The increase in average revenue per ton-mile resulted principally from the
11.5 per

general freight rate increase effective August 26, 1957, and the selective rate
increases effective February 15, 1958, both mentioned in last year's report.
The commodities with the largest decreases in revenue were bituminous coal,
iron

and

150

hour.

per

(track miles)

*

28.14

46.20 ~

147.53

72,373

639,383
190,911

-

195

vs.

18.06

41.66

(track miles)

(track miles)..

(number)

Decrease

105.87

—

'

-

238,876

Notwithstanding increased wage rates, total equipment maintenance expenses
were substantially less than in 1957.
However, the percentage of unserviceable
freight cars on the Company's lines at the close of the year was lower than at
the close of

1957, and the Union Pacific showing in this respect was among
Class I railroads

the best for all

in 1958.

TAXES
The decrease in Federal income taxes was due to less taxable income than in

1957, notwithstanding diminished deductions from taxable income for amor¬
allowances on "emergency facilities" (as so certified by the Office

tization

of Defense Mobilization)

in

excess

in 1958

of depreciation at rates authorized by the

The approximate amount of such deductions

Interstate Commerce Commission.

compared with 1957 is shown in the tabulation below:
Decrease vs. 1957

1958

Amortization deductions

$26,013,369

—

$2,339,156

18,474,601

Betterment in net income per

1,418,640

$.43

depreciation._

2,728,154

9,606,793

Excess of amortization over

Reduction in income taxes

stock

:

$.07

share of com¬

outstanding December 31st__

Beginning in 1961, income taxes will tend to be greater than they would have

The decrease in Freight revenue was the result

1957.

was

Ballast (cubic yards)

mon

a

rails

Total rails

been taken.

reached

1957

over

Second-hand rails

The resulting benefit per share of common stock in 1958 was
43 cents or 13 per cent of net income (after preferred dividends) per share.
Such annual benefits are declining, and Federal income taxes accruing after
1960 will tend to be greater than if the amortization allowances had not

momentum at

increase

average

1958

certain property.

revenue

V

v

through allowances for amortization deductions in excess of depreciation on

OPERATING REVENUES

10

Way and structures were well maintained. Quantities of rails, ties, and ballast
used in main track renewals were as follows:

41,085

income, after dividends on preferred stock, amounted to $3.29 per share of

common

weighted

50,366
9,281

$

4£

Taking into consideration the number of months that each of these increases
was effective in
1958 and not effective in corresponding months of 1957, the

506,417

$

funded debt .-

$ 83,298,893

Miscellaneous rents and charges

Net

29,097,113
15,383,756

!

November 1st

70

30

-----

May 1st

New

Total income

Interest

+$ 4,643,060*

operations

1958

70

50

increases, effective November 1st
Cost-of-living increases, effective:

3,885,774
1,505,425

1957

.

Basic

income from

-

-

However, higher wage and

,—Per hour—,

—$11,096,772

oil and gas operations)
Equipment and joint facility rents—net

Charge

gas-turbine locomotives.

—$11,844,911

$43,461,084

„—

$505,215,191

$371,257,945

—

and

raised operating expenses by $14.8 million, and in

in expenses caused by

Decrease (—)

1957

1958

revenues

-

OF INCOME

-

Operating

; •

report for the Union Pacific

following

Railroad Company, including its Leased

York, N. Y., April 30, 1959.

RAILROAD

PACIFIC

the

salary rates
addition there were increases
greater charges for depreciation and retirements of trans¬
portation property and smaller receipts from sales of scrap material credited
to expenses. To compensate for these factors and achieve the over-all decrease
of $11 million in operating expenses, with a slightly lower operating ratio,
than in 1957, substantial economies were effected through intensive planning
and adoption of new operating methods. The principal increases in wage rates
reflected in 1958 expenses are tabulated below:
diesel

DIRECTORS

steel products, iron ore, and other ores and concentrates. Reduced
commodities resulted chiefly from the general decline in

been if the amortization deductions had not been taken.
Taxable income in 1958

was

also reduced by an estimated amount of

$4,575,000

$3,142,000 in 1957) through the use of accelerated
depreciation methods allowed for tax purposes on property acquired after 1953.
Under these methods, the depreciation allowable is much greater in the early
years of the use of property (and correspondingly less in later years)
than
under rates authorized by the Interstate Commerce Commission.
f
The decrease in Federal retirement taxes resulted chiefly from reduced pay¬
about

with

(compared

rolls because of the lesser volume of traffic handled.
Federal

unemployment insurance taxes rose because of a further increase of

cent in the tax rate. As the result of successive increases in the last
the tax rate for 1958 of IVz per cent on the first $350 of each
employe's monthly wages was five times the rate of JA per cent applicable
in 1955. Employes pay no part of this tax.
25

per

three years,

movement of those

The increase in State and county taxes was

activity, with curtailed operations of steel plants, but there were
also less shipments of coal ana iron ore for export, and coal production was
further reduced by increased use of natural gas for fuel. Other commodities

ad valorem and other

formulas for certain State income and

showing the largest decreases were automobiles and parts and machinery and

Total

taxes for

enues

and $1,670.75 per

industrial

parts,

reflecting sharp reductions in consumer
to labor difficulties.

demand and curtailment of

automobile production due
most

The

substantial revenue increases were in sorghum

grains, because of

in 1957; potatoes, reflecting
from Idaho because of reduced supplies available in other
producing States; plywood, as a result of its increased use for sheathing by the
building trades; canned and packaged food products, due chiefly to increased
shipments from; the Pacific Coast to Eastern States, stimulated by lighter
production of Florida fresh fruits and vegetables; corn, because of heavier
movement from Government storage to Missouri River terminals and to Gulf
ports for export; barley and rye, due to better crops; and less than carload
freight,-largely as the result of a strike by Western truck drivers with conse¬
quent diversion of a substantial volume of business from the highways to rail
carriers. The decrease in Passenger revenue resulted from fewer passengers
carried" and a slight decrease in average revenue per passenger mile, partly
counterbalanced by an increase in average length of journey. Although there
was a decline in number of passengers carried for the full year, in every one of

greater production of milo maize than the large crop

assessed

average

valuation)

than in the same month of

encouraging-development may be ascribed partly to improvement in
economic conditions generally, and partly to growing appreciation of innovations
in our passenger services, and to effective advertising. The decrease of 4/10 of 1
per cent in passenger revenue contrasts with an aggregate decline of about
6 per cent for all other Class I Western railroads.
This

1957.

The increase in Mail revenue was the result of a

IV2

per

cent increase in rate

for transporting mail (mentioned in last year's report) effective July 1,
1957, and some increase in volume of mail handled.

and

increased

to

and changed

rates

taxation

franchise taxes.

equivalent to 13.8 per cent of total operating rev¬
employe. They were also equivalent to $3.11 per share
of common stock outstanding at the close of the year, as shown in the five-year
tabulation below, which compares total taxes per share with Common Stock¬
holders' equity per share in net earnings.
1958

were

increased shipments

the last seven months we carried more passengers

due principally to higher rates for

property taxes (partially offset by a slight decrease in

PER SHARE OF COMMON'

STOCK
Percentage ratio

Total taxes

Year

I

94.5

$3.29

3.32

3.c»4

9».4

3.36

98.5

3.26

3.39

96.2

2.87

2.95 V

97.3

—

1956——

1955f

——

—

Based

on

tBased

on

'

3.31

—

1954f_.
*

in net earnings

$3.11

1958*
lbu

of taxes to equity

Equity in
Net earnings

22,429,235 shares, including 200,135 shares issued October 6,1 D58.
number of shares outstanding after stock split effective July 2, 1956.

OIL

AND

GAS OPERATIONS
Decrease

Per Cent

$42,274,553

$6,433,311

15.2

$6,915,134

42.3

1957

1953

Receipts from sale of oil, gas, and
Production
Taxes

Total
Net

than

drilling

income from

oil

2,780,381

$11,275,208

$13,177,440

$1,902,232

"14A

$24,566,034

receipts.

and gas operations

3,481,925

1,603,895

income

and

against

charges

2A

2,920,612

$164,433
561,313
1,176,486

$29,097,113

$4,531,079

15.6

$356,724

$1,120,390

$763,666

68.2

$6,750,701

(including depreciation)
taxes)'
development cosist."

expenses

(other

Intangible

$35,841,242

other products.......

.

16.1

of pay

in receipts from boarding out-,
smaller number of outfits operated.

The decrease in Other revenue was principally
fits for maintenance employes, because of a

Drilling and development costs
*

Federal

taxes

1957, are included

EXPENSES

in

*

principal reason for the decrease in Operating expenses was the
of freight traffic handled. A decrease of 5.8 per cent in

volume

Short Line Railroad Company, Oregon-Washington Railroad &
Angeles & Salt Lake Railroad Company, and The St. Joseph and
Figures in the Income Account and other tables are stated
consolidated basis, excluding offsetting accounts between companies.

Leased -Lines

are:

Oregon

Navigation Company, Los

Grand-Island Railway Company.
on

a




not charged against receipts......
from

oil and gas operations,

of approximately $7,327,100 in 1958 and $8,993,000 in

in "Taxes" under "Transportation Operations."
as labor, fuel, repairs and hauling in connection with
mattrials with no salvage value.

drilling, geological work, clearing

ground, building roads, and certain

The

decline
freight
gross ton-miles tended not only to lower transportation expenses, but to reduce
maintenance expenditures as well, because of the more limited use of rolling
stock and road property. There were also reductions in prices of fuel used in

The

income

costs such

1 Represents

OPERATING

on

decrease

in receipts reflects both an

over-all decline in production and

prices received for oil sold. Production decreased in Wilmington and
Rangely fields, offset in part by relatively small increases in other fields.
Reductions in oil prices applied particularly to Wilmington field. The small
lower

net decrease in

production expenses is attributable mainly to reductions in

taxes

were

decline

such

in Rangely and East Los Angeles fields. The principal decreases in
in Wilmington, Rangley, and East Los Angeles fields. The sharp
in intangible expenditures resulted chiefly from reduced drilling activity

expenses

in Pierce,

Wilmington. Table Rock, and East Los

Angeles fields.

18

The Commercial and Financial Chronicle

(2206)

mis¬

in

breakthroughs

scientific

TO THE EDITOR:

LETTER

edge

"What Price Arms Race?"
Showing

a

more

than casual familiarity with British-German

rivalry, tests of crises and summit meetings, and

armament

noting repetitious rut of past 59 years of -"continuing thread
of relationships as one
Mr.

in

Chronicle:

people will deny that the
world today is faced with a set of
pretty grim facts. For the govern¬
ments

the

of

Russia

United

States

and

in

all-out

Since

followed by the fifth

1945

seen

lived '-Cj.

or

them may have clearer vi¬
the rest

among

sion of these events than
of

One event of recent history

us.

has

somewhat of

been

to

enigma

an

That

Americans.

most

is

the

:

Mikoyan. In National Review (2-2859)
Whittaker
Chambers,
who
from his record, should be better
visit

this

to

Mr.

of

country

able than most of

to understand

us

,

point out the meaning of this

and

have

we

be¬

i

mission, said, "This is one reason ?

v

why certain business itten,' whO% ;
similar- crises in
the
sense
clearly enough the" ?grim *
Berlin blockade, 'the Korean war,
shape of things to come, appeared (;
the Suez fiasco, Sputnik and now
to listen
to what Anastas MiBerlin again.
koyan flew so far
to tell us,
namely: that Russia wants to;end
Continuing Thread
strangely

.

clear weapons
blow

The

Germany sent a

World War I.

break of

nu¬

to

annexed

them

with

associated

murder of Archduke Fer¬
dinand at Sarajevo and the out¬

of

enough

was

t

important to all the world.
Those who have in the past been

Agadir,

to

Sachs, limited partner of Goldman,

the often inscru¬

table intent of Soviet leaders

ostensibly to
protect its interest in Morocco. The

warship

Walter E.

States.

comes

crisis,

pos-

session

when

arose

Balkans

an

arms

for

race

third

United

the

? /

in¬

time when correct

a

terpretation. of

The second came
Austria

Grainger, President of the Chemical Corn Exchange

B.

Russia Want Peace?

Does

Herzegovina.

and

is,

possible that the -men
best qualified to help in finding
some way to control and live with
the horrible weapons they have
created will have to come from
the ranks of those technically

This is

fourth crisis that led to war in the

are

deeply in¬
volved

when

1908

Bosnia

Isaac

lem.

of action that might
be helpful in short-circuiting the next step of war. The Californian correspondent sees no security emanating from an
arms-race and hopes pending conference will find the Russians
genuinely desirous of ending the cold war as some inter¬
preters suggest is the case.

Few

V

;J

therefore,

courses

Editor, Commercial and Financial support France.

Thursday, May 14, 1959

equipped to understand the prob¬

situation leads inexorably to another,"

Spencer submits two possible

It

politicians.

and

.

Bank, has been elected to a second term as President of the Newmost V' York Chamber of Commerce, oldest Chamber of Commerce in

understanding of

and

statesmen

"

outpaced the knowl-

have entirely

.

New York Commerce Chamber Elects Officers

siles, space, under-water develop-;
ments
and
in
nuclear weapons

West Coast Reader Asks

.

each

...

other

the

off

map.

A

little

re-

search

In

into

will

show

there is avail¬
able

of

L. Spencer

and the
somewhat similar arms

preparations for

result of
race

H.

record

a

the

a

between the British and Ger¬

early in this
in naval arma¬

governments

man

century,

race

a

this whole series
which originated in
British-German naval rivalry, it
would seem there is a continuing
thread of relationship as one sit¬
uation
leads
inexorably to an¬
other.
Defeat of
Germany and
of

comparatively
recent history

ments.

reviewing

in

Austria
runaway

Hitler,

a

second

the

first

led

war

to

inflation in Germany,
series of crises and the

war.

Defeat

of

Axis

the

in that war led to Eura¬
sian ascendancy for Russia
and
the
present series of crises in
which we may now have reached

powers

The spark

which alerted the un¬

derstanding of those governments

competi¬
the fifth and final one.
the
was
During this period no nation
publication of Mahan's "The In¬
fluence Of Seapower Upon His¬ victorious militarily has as
yet
tory" in which he said, "The de¬ really won a victory politically.
termining factor in seapower is When war is considered as an ex¬
the possession of a strong battle tension of politics, it must be ad¬
that
results in this
last
fleet capable of overcoming the mitted
enemy and driving him from the half century have been unsatis¬

to the importance of this
tion in naval weapons

factory.

sea."

Appointment of Von Tirpitz
German

naval

chief

as

British

and

development of the dreadnaught
battleship design set the stage for
a costly construction race; Britain
intent upon maintaining her su¬
premacy at sea, Germany deter¬
mined to outbuild her.

This situation deteriorated up to
the outbreak of war in 1914. Since
both

nations

had

reached

then

a

point where financial exhaustion
loomed, war may have been re¬
garded as the only solution avail¬
able.

v'/.;

comes

certainties

aides

limit

to

made by both

growing

armaments.

and

tensions
first

The

and

second

Hague peace conferences
attempted to reach an understand¬
ing. There were "summit meet¬
ings" between King Edward and
the German Emperor—there were
meetings at the "Foreign Ministers
level" but the offers of each gov¬
ernment

were

considered

inade¬

quate by the other.
In the history of that period Sir
Edward Grey, appointed British
Foreign Minister in 1905, speaks
©f "the difficulties of satisfactory
dealings with the German govern¬
ment

.

.

.

Some Germans in high

saw that the growth of Ger¬
naval competition must pre¬

places
man

vent

rapprochement

and

even¬

tually impair good relations. For
that

world

war

present crises and
there will be three

about

it:

one

can

be settled
the combatants will mutually

no

and
per¬

ish.

foreign ministers' confer¬
ence, to be followed by another
summit
meeting
if
satisfactory
preliminary arrangements can be
made, appears to hold a modest
promise of arriving at some solu¬
tion of this last and most danger¬
crisis in Berlin. But it is ob¬

ous

that

no

available.

easy

For

answers

the

has

In

Times

that the excessive cost of the
race

has become
to

rassment

that he is

If

made

by

our

leaders in

book, "Twenty Five
Years," Lord Grey traces the vari¬
crises

time.

The

that

arose

first

was

during that
in

1906

at

the conference in Algeeiras where
the Germans were intent upon

testing

British

determination




to

economic
promises

for
goods and the high

Unless

wars

such

some

be

can

and

fallen in the

conciliation

and

mutual

Wandell

other
than

alternative
either

can

be

maintenance

finally

becomes
from

comes

calling which have
come

and

out

of both

and

name

consistently
foreign offices,
so

(2) appointment of

adjust

a

inevitable.
we

*

a

group of

the

Henry C.

Keith

S. McHugh,

of Commerce of New York State.

Mooney,

in

•

f

largest

.

,

1768, the New York Chamber of Commerce was

organization

of

businessmen in

the

United States.

of 2,000 includes representatives of many
business, industrial and financial organizations
■/ .' ^v\ V

nation.

of
in

Its
the
the

¬

What Does He

hearing completed this week into the news¬
paper and magazine industry in New York has revealed the alarming degree to which racketeers

find
the

saw

destruction.

In

have entrenched themselves in the economic struc¬

Have

Been

Prevented"

above-mentioned
true

ture of the nation's

'

Grey

may

of

war,

from

his

"In

book, Sir Ed¬
"More than one

says,

thing

causes

be said about the :;

our

but the statement

from

inevitable.
to

it

make

Armaments
produce

a

war

of

f

ceive

180 S.

Orange Grove Ave.

Pasadena, Calif.

,

April 5, 1959.

Trust Securities Corporation

an¬

the opening of a new of¬

fice

375

City.

Avenue,

New

j-f <...

Vicinus, Vice-Presi¬

Director of Trust Secu¬

rities

Corporation will be in
charge of the office and will con¬
tinue

to

represent

•

•

•

f

•

-

supply of
we

no

doing.

We

I

gov-

con-

find

-

news

find these

to the public and

;

nationally known

publications compelled to make
payments to assure the delivery
of their newspapers.

Sen.

J. L.

McClellan

"The revelations in this hear¬

ing clearly indicate that the time has come for
Congress to seriously consider the enactment of spe¬
cial antitrust legislation in the transportation field.
have

instructed

the

staff to

prepare

legislative

referred

Investment

to

the

Judiciary Committee for further
McClellan, Chair¬

consideration."—Senator John L.
man

of the Senate Rackets

But

.|

William W.
dent and

Park

find rack-;

recommendations in this field which would thdn be

nounces

at

we

racketeers able to shut off the

I

Opens New Office

York

liberties,

of

-

cornerstone of

'

y-

SPENCER

a

' ernment authority would

;

L.

is

able to do what

se-.

that is good."
H.

basic

eteers

in¬

were

sense

country where freedom

a

of the press

that comprises the most truth is<
that militarism and the armaments

all

largest city,

chapter headed, "Could War

a

ward

Really Mean

"The

Pos¬

can

who

man

leading scientists of all nations to Trust of Boston in New York.
foreign ministers in Pennsylvania, New Jersey, Vir¬
an advisory
capacity.
ginia, Maryland, Delaware and
There is little question but that
Washington. D. C.

meet with the

first

the

beginning of this half century of
savage

an

critical statements

were

membership

will

bury you" and "We won't
inch"—do little to make
negotiations easier. There are two
possible courses
of
action
that

M.

Founded

heavier each year, tensions
and terrors will increase until war

present fantastic status quo or the
horrors of atomic war.

give

Vice-Presidents

He succeeds

1961.

May,

comes

the

However, the belligerent state¬
ments issued by both sides—"We

until

Assistant Treasurer.

view, not nec¬
essarily appeasement, then, as the
cost of the competitive race be¬

found
of

of

Vice-President of the Chemical Corn
Exchange Bank, was re-elected Treasurer. James T. Moriarty,
Treasurer of B. F.
Drakenfeld and Company, was. re-elected

they failed to reduce curity in each nation—that was
to writing any firm guarantee of
the justification
put forwardJ in; v
access
to that great city it was
defense of them. What
they really "
left as a hostage island of freedom
did was to produce fear in
every¬
in a surrounding sea of commu¬
one.
Fear causes suspicion and
■
nism. That confused situation, al¬
hatred; it is hardly too much to
ready too long endured, clearly say
that, between nations, it stim¬
calls for negotiation.
And it is ulates all that is bad and
depresses -v
utter
no

meeting

ments of points of

When

defeatism to believe that

annual

191st

Liberty Street.

the post to become Commissioner

years.

50

happy outcome
by negotiation,

achieved

the

at

Elected to four-year terms as

which:

into

last

held

former President of the New York Telephone Company, who left

gentlemen are correct
interpretations, the next

races

has

was

Alexander, Board Chairman"of-Morgan Guaranty Trust Company
of New York; W. Altqri Jones, Board"Chairman of Cities Service

Vice-President

will ever hate to pull itself out of
the rut of continuing crises, arma¬
ment

election

Chamber at its headquarters, 65

v

-

few months may provide the best
chance
thi£
quarrelsome world

it

Company, was re-elected Chairman of the Chamber's
Both will serve until May, 1960.

Committee.

Company; and John D. Rockefeller, III. Edward V. Rickenbacker,
Board Chairman of Eastern Air Lines Inc., was chosen to serve as

these

their

tended

1945.

\

people

of electronic weaponry.

cost

in

an

the

Russian

more consumer

>

arms

Khruschchev—;

between
the

to

and

The

:

present embar¬

a

Mr.

caught in

dilemma
made

mistakes

owe

Sachs

by ;K Executive

suggested

Salisbury, former N. Y.
corerspondent in Moscow, i

inseparable

the

his

been

Harrison

reason

and military element."

'-■■■■ i'.-.yrV:

■

also

the courageous people of
West Berlin. That debt arises from

we

they deplored German might be helpful in smoothing the
naval policy and some of them path toward
practical and work¬
tried to arrest it; but they were able adjustments:
(1) a determi¬
always overborne by the' naval nation on both sides to moderate

ous

It

sibly the best advice

The

will
position of
the West is mortgaged by the debt

Compares Summit Meetings
were

third

a

win, nothing will

be

But efforts

If

from the

disturbances,

vious

V;1

the cold war."

events,

Investigating Committee.

why

"special antitrust legislation in the
transportation field" where, except for labor unions,
existing antitrust legislation (or close governmental
regulation and supervision) fully applies? And so
do many other laws which, however, are often not
enforced where

the

organized labor is concerned. Can
Seikator really mean application of antitrust

laws to the unions in this field?

'

Volume 139

Number 5346

.

.

The Commercial and Financial Chronicle

.

which she

Missile Production Outlook

News About

would perhaps destroy
largest cities. Even if 20-

10

our

million

By ROGER W. BABSON

American

killed within
of such

CONSOLIDATIONS

Fresh

NEW

BRANCHES

NEW

OFFICERS, ETC.

Bankers

and

REVISED

from

Cape Canaveral,

encouraging
ment

over

financial observer reports on
ability to produce accurate-hitting

prospective

intercontinental

CAPITALIZATIONS

our

missiles.

failure to

Mr;

Babson

In

...,

for check

rhhndlinjl 'in;the: ine\v downtowri

to

launched while I
tion

office

building at 2 Broadway. " ^Raymond
J.
Erfle,, -Hubeid'" J:^viiie*^;r o m
More than 1,000 employees, pre- Horan, III, John Namourian- and
here the tests
viously located among the bank's A. C. Mueller.
■
-./■
are ; being

of

offices in Greater New York,
have been transferred to the new-

quarters.
.:,;v
Upon ' announcing
the
nearcompletion of the move, Chair¬
man
Harold H. Helm explained
that -the: operation, at 2 Broadway
.

is

important step in Chemical's
Medal Program, ; the theme
which ' is
"Pledged to Serve

ti

of

Better."

consolidating
roof and
installing the latest electronic and
electro
mechanical
equipment,
Mr.
Helm \said,
Chemical
is
adopting the most advanced tech¬
niques in automation.
one

of *he

mnn
•

ten

men

vestment'THvision

-&1?e

Mav

l2

the-'Tn-

nf

elevated tn

was

Fldnn H

Presidm-it and

'wq'c

the.'an-

on

Whitheck

<4

of

Bank

nrmminced

nmntments'nf
Vnikei-t

The

Board

York

New

Pend

i

Rnhin

a

wal

Pantnn

made

A, Damon was-made
Assferant* Vice-President ,and
nooin

sion,

Arthur L. Armitage was appoint-

ed_anr:AssistantTreasurer.>
'■£*.
Sf
S!i
™r

... •

L.vJVLcElrojL and -Eben

O; McNair

-werevnamed Assistant

l rust uiti-

eers

-

and. WCkQ

-appointed _an
\ James .D.
were

J.

Mextoil

was

Assistant Secretary.

^Barnes, ^WesleyV.
and^ Jobn^ J.- Wortendyke

Taylor

made Managers.

The

Chappaqua National Bank,

Chappaqua,
N.-,: Y.,
title /to
Northern

changed

its
Westchester

-

Chappaqua, effec¬

National Bank,
tive May

l.;

shares

outstanding—6,000
value $100.)
/V

par

A

proposed

Delaware

and

Company

of

the

of

•

of 74.
Mr; Cartwright has been Presi¬
dent
for
10
years
and retired
age

months

ago.

/

'V;*

<■

'•

National

Belmar

The

Trust

Del.,

under

Lewes,

charter

of

the

announced

was

An

by

ot-the

made

into

Various mter.,,

•

jlp(!

,

u"

and

w

u

-World

to

the

there

"p r

was

ocean

able -Paul

more

»

Spaak,

<

important

The

the

on

Cape

the

off

saw

_r

._j..

v.,urn

*

of

the

also received the ap¬

of

the

State

and

other

before
;

Belmar, N. J., effective

On

April

tional

Com¬

Bank

supervisory

creased

Bank,

shareholders

10,

the

Southern

and

Bank,

Norman

and

Rea, formerly Assistant Vice-

have

been

elected

.

Fidelity

of

Trust

Atlanta,

began

his

career

in

with

Fidelity

1920.

He later became chief clerk

In

the

ment

trust

and

Assistant

a

as

was

messenger

accounting depart¬
next appointed an

Trust

bank's

in¬

capital

and

$45,000,000,

in

largest

the

Southeast.

San

Bank

of

increased

Officer

Texas,

capital stock from $700,$800,000 by a stock divi¬
dend, effective April 30. (Number
to

of

shares

shares,

and

the

Chrysfer

; was

much

impressed

with

"what I saw, including the launching

of

three

of

these

par

outstanding
value $10.)

Elwood

80,000

—

/

sion, he later was given trust ad¬
ministrative duties
and in
1953
1955,

he

was

trust

officer.

transferred

to

In

the

investment division and was made
an

investment officer prior to his

election
dent

in

as

Assistant

Vice-Presi¬

1956.
ft

£

ft

J.

Horan, Jr., President
Broad Street lYust Co.,

Hubert

of the



of

Assistant

of

America's

Bank

in

branch

Redwood City, has been named to
manager

fice

&

Co., Inc., 27 State
was formerly

Mr. Rinaldi

industrial

trader

with Lerner

Co.

GEORGETOWN, Texas —John
P. Hughes is engaging in a secu¬

of
n* annihilating enemy cities with¬
in 30 minutes after the first nu¬

clear

missile

the U.

X If

bomb

or

fired

rities business from offices at 1218
Church

should

decide

to

Street.

at

S.

Russia

Birr Co. Opens Branch

at-

SAN

tack

she would first attempt

us,

these

Inc.,

launching bases in

our

friendly

countries,

at

JOSE, Calif.—Birr & Co.,
has opened a branch office

246

South

First

Street

the management of R. W.

after

NATIONAL PROPANE
CORPORATION

HIGHLIGHTS

v

1

.

Ye/v; Ending November 30,

•

•

in

Mr.

Oakland,

Kern,
the

S.

Clark

since

'

Net

revenues

income

.....

1957

$13,699,518

$12,471,542

$10,638,618
$

624,283

1956

.

.

.

$

.

779,290

$

825,738

$

....

dividends—paid

264,178

$

267,400

S

244,304

$

1.03

$

1.17

$

.83

$

1,300,277

$

2.75

and

uceriied

Earnings

per

share of

common

Average outstanding common
shares

Beise,

.

.

500,071

*

generation

474,900

......

$ 1,685,757

$

1,637,120

458,000

.

.

.

.

.

.

.

.

.

3.33

$

'

$

1,436,145

$ 1,266,537

$22,674,400

common

.

Working capital

$ 2,380,148

$22,278,614

$21,384,816

300,070

of

Per share

veteran

291,625

281,558

212,940,725

190,296,725

183,270,820

710

653

649

$

3.43

Charles

succeeds

Total

MacArthur-39th
1937

Cash

"

29-year

a

bank,

Leone,

ager

i

1958

Operating

assets

-man¬

who retires May

Customers

.

'

'

/

31

after almost 40 years

in bank¬

Gas

sales—pounds

.....

ing.
Mr.
a~

Kern

began

messenger

his

career

the'South

at

as

First

Street branch in San Jose in

1930

until

his

and

there

remained

February,

appointment

1956

to the Assistant

July that year.

He

was

customer

—

pounds

stockholders'

Per share

of

.

.

.

.

equity

common

.

.

•s

2,961,984

S

2,403,253

s

5.86

$

5.03

as

lending officer at the CaliforniaBroadway office.

Average consumption per

Common

named

Manager's post in

NOTE:

The above figures do
or

/

Opens Inv. Office

.

the MacArthur-39th of-

President, announced.

J.

a

Knox

D.

Street.

.

Kern,

California-Broadway

with

Company in 1950 as h representa¬
tive in the estate planning divi¬

H.

Manager

Assistant
Vice-President in January 1956.
Mr. Rea joined Fidelity Trust

elected

H.

get with an accuracy of within
Pne mije. They will be shipped
to launching stations in Italy,
France; England, Norway, and
other nations, with the purpose

to destroy

missiles,

Preferred

1939.

in

.Officer and was elected

was

-i

BOSTON, Mass.—Joseph M. Ri¬
naldi has become associated with

its

National

Angelo

Angelo,

In 1946 he was named as a Trust

,

■

of
Na¬

Ga.,

Company, Pittsburgh, Pa., accord¬

ing to John Byerly, President of
the bank. They will continue their
association with the bank's trust

^ML^alpass

H. 0. Knox & Co.
(Special to The Financial Chronicle)

surplus to $40,000,000. This gives
the
bank
total
capital funds of

San

May 2.

perfected

,

becoming ef¬
'* ' • /:'

:

Citizens

The

000

Vice-President

are

Joseph Rinaldi Joins

o,-,u

common

H.

they

.

Cashiers

missioner

Relmar-Wall National Bank, West

Presidents,

be¬

&

Corporation
Farmers Bank. The present Di- which makes the "Jupiter." These
rectors of the Lewes Trust Com- companies compete for the best
pany will constitute tlie Advisory engineers, metallurgists, and other
Committee of the Farmers Bank ^scientists." Such'specialists are not
for Lewes with the same author^ under/4 h e bureaucratic restricity and power to make loans as in tions
of
government
workers,
the past.
■
hence can be paid higher salaries.
Special meetings 'of stockhold? The work is under the able direcers of both banks are being called
tion of General Donald N. Yates.
for June 25 to approve the merger
I

.

when

and in production.

an

Assistant

proval

Our De¬

tween

Belmar, N. J„ changed its title to

Robert. R. .Calpas

missiles

tween which are stationed U. S.
wnicli are stationed U. S.
ships. Thus, the missiles is constantly in sight, so that not only
can its speed be observed, but the
nose, tone can be located when it
comes to the end of its arc. Within
these cones are important data

Company

* 'w

War

country discovers
production a depend¬

some

in

sev¬

Atlantic,

before,—•

World

no

cities for firing such anti-missile

trip

covers

has

said

have

Department feels that our
engineers will be successful in
producing such and we are now
erecting stations around our large

of

my

I

fense

Farmers, and

and it must

Anti-Missile

the

able anti-missile missile.

was

Coast

on

last year. The course
eral islands in the

Missiles

how

(I

until

and

questions.)

West

Africa, which I

Corporations Producing

on

tracked.

of what

III

and Florence A.
come

About

that there will be

which makes
the
"Shark;" the Martin Company and the intricate machines which
which;; builds the "Titan" and process such data and log the renow Cashier of Lewes, .will be-, "Vanguard," -General Dynamics' suits. I am sure we will be able
0|

op¬

the

me

proving course was between
Canaveral
and
Ascension

Island

-

Assistant

our

to

United States, or certain
countries, will soon be in a
position to destroy, none of them
now have the
necessary means of
defense against an enemy missile.
Once in a while the engineers feel
they are on the right track; but
the targets which they use move
very slowly
compared with the
speed of an enemy missile.- My
days at Cape Canaveral convince

Secretary

officers

are

warned not to ask any

Roger W. Babson

grounds,"—-in"
Alabama, in Arizona, and
Pacific Coast.
Leading

H.

these missiles

of the Lewes Trust Company^ v ,Company^, w h i c h builds the
Joseph L. Marshall,;- president ;."Thor
the Northrop Aircraft

an

continuing

other

General of NATO, by some of the

are

i

pieces. But the
successfully launched
1,500 miles, striking
very close to its target.

While at Cape Canaveral, I was
briefed, together with the Honor¬

other

o v

sec¬

Tracking These Great Missiles

War

III, if it ever
will be
fought..,: I unders.tand
cpmes,

three

a

ignite, and

traveled

u

institutions

COipe

com¬

of

Missiles?

thousand

a

third

continental

agree¬

merger

What

only the first section went into
the air.. A second missile blew
up

institutions providing tor the ex-These missiles are contracted
providing for the excbmge of one share of the Farm- for. by the Department of Defense
ers Banl* of the State df Delaware ;WithV Various important corporafor eac^ share of the capital stock tions such as the Douglas Aircraft

over

■'*

'

.

transportation

of

much

former

Bank, Rahway, N. J., died May 6

three

of

has been signed
by the Boards of Directors of both

President of the Rahway National
the

the

i

State

Lewes

institutions.

two

fective.

at

the

-

Farmers Bank
the

of

of; the

and

name

shares,

merger

Farmers > Bank

authorities

Cartwright,

Russel

•

v

^.»

»

Bank,

Thviltnn' of the Lewes Trust Company, -Will
?Sr? Assistant vine' become a Vice-President C of the
Tn^hP PaniHnVvn^i" farmers Bank. Louis ;|V'Ingram,

nnmed

ip^Lidlnt

•

.

capital stock from $200,0C0
to $600,000 by a stock dividend,
effective
April 28. (Number of

ment

Albert C. Simmonds, Jr., Chair-

v-

xt

mon

By

'

such activity under

a

St. Marys, Pa., increased its com-

•

You

.

c

riic Saint Marys National

an

Gold

^^

*

-

system

and

erate.

or

there

was

failed

one

'

94

would still
with

we

■

^

Senior Vice-Presidents;cwere -fQf .fehkson-

.

were

hours

few

My
great
disappointment
at
They vary in length from 25 to
65 feet, each divided into three Cape Canaveral was to learn that
no anti-missile missiles have been
stages, and cost from $1 million to
F*orKla; some 150 miles south $1.5 .million each* Of the three perfected. Hence, though Russia,

elected President. Promoted'

was

underground

an

perfect anti-missile missiles and predicts

a
major move to expand Philadelphia,
Pa.,
was
elected
<improve service for custom-/.Chairman and Chief - Executive
ers,
Chemical Corn Exchange:j.'Officer, James D. Henderson, Jr.,
-'My last few days in Florida
Bank, New York, is installing the Vice-President was elected Vice-■ were spent at Cape, Canaveral,
nation's largest center of electro- Chairman and J. Harrison Jones which is located on the East Coast

and

attack,

munications

disappoint¬

expresses

an

citizens

first

the

have 150 million people left,

first country to gain advantage here would be in a
position to
start World War III. Until
then, he states, there will be no war.

-mechanical, equipment

19

(2207)

operating

data

of

not

the

include
Arrow

any

of the financial

Group

acquisition.

$ 1,842,752
$

3.89

under

Hughes.

The Commercial and Financial Chronicle

(2208)

20

Gold Act's Provisions

Review

Free Gold Market Will Soon

The

Be Here in the United States

government took title for
the
United
States, to the gold
coins
and
monetary gold
bars
which had been in the vaults of
had

many years or which
turned in at Treasury

presi¬

dential demands.

the

We need not here determine

declassed monetary gold
all gold—as a commod¬
ity—is private property and that it is beyond the power or
authority of the Treasury or Congress to prevent U. S. citizens
from buying, selling, or hoarding gold, in any amount or price.
Moreover, the gold mining head contends, the Treasury does
Claiming that the Gold Act of 1934

commodity gold, Mr. Sears

into

purchase gold in

the right to

not have

legality and morality of Congress
in

blindly following Presidential
and stripping the Ameri¬
can public of their gold, in
3933.

avers

orders

This

criminal penalties for possession of

no

are

already

gold.

to

stitutionality, so acting under the
assumption that possession de¬
noted authority, title to this gold
was declared by the Act, to pass
to the government. .<

The writer

is

it

But

important
provided
as to gold
owned by the govern¬
ment, we therefore quote from the

to having free gold ware¬
house receipts traded on the market, and sees a free gold
market soon with gold's price reaching $100 per ounce.
we

Congress

laws and not to hesitate be¬
cause
of doubts as to their Con¬

purchasing power or to control the commodity gold; 95% of
U, S. gold miners have been forced to close down their mines,
"brazenly robbed" by our gold price buying policy; and there

explains how close

ordered

pass

of declining

currency

in the period when the

was

President

are

that

extremely

know what was

we

Act:
old

as

describe

words

Three
tion

ple want gold.
They express
desire for

the

And by

condi¬

applying the same fac¬
sales of gold
by the Treasury we find that dur¬
human emotions, ing the past year between $2 and
$3 billion in gold has been sold to
Foreign Central Banks and their
government and private custom¬
ers, in addition to all the gold
which was supplied by the Treas¬
ury
for commercial use in this
country and abroad, at the same
a

civilization—Peo¬

as

power, wealth,

adornment, or
merely
per¬
sonal satisfac¬

tion, pi us some
of

sense

tual

reduced prices.

safety.
For 25 years

The proponents

people in
country

our

this

figures to the

have

denied

audacity
"value

the

"monetary
ex¬
constantly seeking to

are

this

of

Federal

gold, at the
favorite slogan
with,them is that any increase in
the price of gold would be infla¬
tionary.

$35

The

government asserts complete con¬
trol.
the

and

Reserve currency into

Harry Sears

have reached

stupidity have the
call such results the
gold," and groups of

conversion

have

manufactured

we

of

perts"

in the form of

But

to

economists

possession of
gold,
except

products.

fantastic

arid

been

of this suicidal

time

price

and

The root

a

of

cause

"No

shall
hereafter be
gold coin shall
hereafter be paid out or delivered
by the United States
gold

coined,

and

no

.

.

"All

gold

States

shall

circulation

other

coin

of

.

the

United

withdrawn

be

from

and

together with all
owned by the United

gold

States, shall be formed into bars
such
weight and degree of

of

the

fineness

as

Treasury

may

of the

Secretary of the
direct. No currency

United States shall be

deemable in

gold

which

the

$8.75 to $11.50 per
not the much touted
is publicly held forth
the rate the Treasury pays.

only

from

this

needs of the community but are
Contributed in fantastic amounts
as gifts all over the world.
Thus

and

ounce,

$35 which
as

vast amounts

.

re¬

."

.

of

only dealing in commodity
as any private citizen
would deal in it, he has no author-,

the fancy title of foreign trade
balances and the Treasury honors
these by selling them gold at $35

ity to control or enforce them beCongress had no power to

an ounce.

is

just

gold,

cause

Nevertheless
throughout
the
authority to control com- -years, government
officials, bankmodity gold. But in spite of this
crs> business advisers, economists,
he compels gold producers to seteachers arKj members
of Concure

license

a

from

him

before

skullduggery
violated

the

toward

which
rights

gold

basic property

of all citizens and

the inflation

of

has almost

en¬

government,

marketable form and he also

in

the. gold to him

aVn1^«
celled.
Of

at his price, to

been

license, can-

*

do not
serve

of

use

talk

about

dollars but

The Federal Re¬

them.

notes which

we

use

instead

merely carry the in¬
signia which has been familiar to
money

for years, but because of cont a n 11 y
shrinking purchasing

at

the

gold cannot be pro^
prices, except in lacious theories.
a
few special cases and as a by- V-.
product from other metals.
T
? f.
Sf-n .con"
"
ducting our lives under this lrreThere were about 4,000 operdeemable and constantly depreatmg gold mines in production dating
currency. In testifying bewhen
they
were
peremptorily f6re the Senate Finance Committhese

at

„

,

closed

sity,

as

a

i

asserted

an

After

1942.

war

neces-

cause

economic

had

and

3957, retiring Secretary of
Humphrey, who had
just admitted that the purchasing
ower of the doUar had
dropped
the Treasury

difficulties of

in-

lo 48c

depreciation
higher, gold price:

power, this paper currency is val¬
ued only in pennies and
when
translated

into

equivalent of
what a dollar should be in value,
for almost any transaction in our
daily lives, we are met with high

stant

loss

of

purchasing power,
into the number required to bring
their usefulnesss to the necessary
amount demanded for goods and
services in our daily transactions.
Offers Conversion Table

This

is

claimed

the

for

Gold

There is

one

outstanding

excep¬

price of gold, which
government
which
to

the

alter,

duced

decree

claimed

$35

the

originally

per

into

of

power

set

1934

by
and

Treasury has refused
has been steadily re^

since

translated

was

in

The

the

pro¬

ounce,
so
that
the
purchasing
paper

currency

which is paid for it by the Treas¬
ury,

per ounce,

11.55 per ounce,
8.75 per ounce,

the

tutional
and

power

regulate

to

the

"Coin
value

but

Congress has used no such
power
with regard to this Act,
and the Treasury has been clothed
with no authority.
That

was

details

some

time

National

by

Western

ago,

the

be

quite
in
our
memories, but again please note
the title, the Gold Reserve Act of
may

*

■

plied:

for

vide

...

purchases

and

and

commodity.
The fact that some of it is

in

Treasury

or

Federal

stored

for the

cally
term

When

any

proclamation

gold

No "gold

monetary

was

completely

dollar,"

"gold content of: the dollar,
No gold "monetary reserves.

gold in this country. The
has no monetary
It
merely
means

In

addition, there is

"metal in the mass" and the term

which declares that

has been in

of

for

cen¬

the

United

in

measured

turies.

what

I

treasury''^racticss cokTis
lieasary practices, teoid is
real

no

obligation

States

be

therefore

gold,

no

retary

realize

its

limitations

actual

powers

and

during this
quarter of a century we have been
taught fundamental
errors
and
have been herded into mistaken

understandings
taught

gold.
have

false

and
have
been
beliefs
regarding

Our

government officials
promoted
fictions
and

claimed powers which
the law and which

are

outside

they do

not

possess.

Our

claims and practices of the Treas¬

with

a

25c dollar

ury.

So

the

as

commodity gold produced
from the mines and is subject to
all safeguards for
property which
our

Constitution

and

laws

pro¬

vide.

Act

gave

no

Secretary of the Treasury to
set a price for gold and to main¬
tain

effect

describing unnon-existing facts
and

establish

m7mberedreHeelsaidh0Uld
memDciea.

In

pure

He

tokens to

of

could

serve

such

a
set price during the
of inflation when the pur¬

chasing

amount

as

course,

issue

a

mere

the

there

of these

tokens

were

daily cash needs of the

com¬

robbed

This

could

well

have

been

an

may

provisions

and

be
we

purposes

some

Reserve

on

that

now
it is only
the basis of from 25

review

cents to 33 cents on the face value
of the so-called dollar. This

of

that in

the

means

ducer,

buying gold from
the Treasury pays

a

pro¬

for

it

-

States citizens cannot possess gold,
they ^isrePresent gold to the
Pe°Ple in order to mislead the
pul?lic

In

Senate

Finance

hearings, before

advance

the

Committee

.

in

Treasury UndersecRandolph Burgess admit-

"We

have

standard

going

are

nailed
it

got

and

have

people

kind

a

the

to

to

description

of

of

gold
the

extent

confidence

keep

that

the

we

money

down to the value of gold,

is easier to sell

the

bonds."

The Treasury Can No Longer
Evade the Law
We

for

have

had

held

It
r,

gold

no

money

gold in this country

quarter of

a

by

century.

Gold

government is

our

mere-

\y metallic gold
•

\\ 1S,

.
.

th
.

a

as

a

commodity,
,

same, ?Ia!£ af.

.

f,

oandcWnf1Cpnld S? i LlnT
ff

^h-

s

L,

cta+pc:

Western

The

rights to produce this gold

and

munity."
managed
currency and the present Federal

so

to accept Federal ReCurrency in. exchange for
gold.
They .are
brazenly

their

total amount necessary for

power
of
irredeemable
Federal Reserve currency
dropped

accepted

forced

are

serve

money—tokens

permanently limited and confined
to the

knnW

quegtion that gold producers have!
a greater injury illegally forced
Upon them.
Their gold is taken
under coercion by a Treasury actbig without authority and they

110

^

said.

theory,

government

the

authority to

the

years

and

which would be accepted at their
face value if it were certain that

Questions Treasury's Authority
The

said,

steadily
that

lc dollar

Act.

of

became the custodian of the ware¬
houses. It is thus exactly the same

President

language

no

.

.

rights, but in view of what has
since happened, one announcement

and

the

could

it

government

1934, and the Sec¬
the Treasury merely

surplus

..

depositois 111 our banks
?re injured by saving our shrinkcurrency, there could be no

ted:

have

in

position

'

-

vetary

warehouses in

stored

ex-

tr?mely a J™P<>rtant to the Treasury as
screen to conceal their

Statute

a

interpretation has been
appalling. Few people have read

misleading

All

«

®£a* a
1Jghts of oui
citizens and gold owners as shown

1957, former

No

"bullion"

use

re-

monetary use in tne
the
monetary use
States there could be:,

United

significance.

common

of

,,

f

.

tfs'a

from
irom

moved

Gold Reserve Act specifi¬

terminated

of

use

the

Ac7c^bl1B,edialfaCt WMCh thC

Reserve

vaults, or Fort Knox, gives it no
monetary standing or character

in

authorized

This very title is
its

33c dollar




but

phrases

"r

.,

x

price specified.
As this was virtually a public trust it was his
duty to see that these purchases

guage and fancy
Act and in the

the confes-

was

regarding your bank balances
savings.

ury

sales

at varying prices, with no special

.

these words

jn

sjon 0f the Secretary of the Treas-

Sections 8 and. 9 pro-

his

/X'v.

"They atje? definitely forgotten
people, who liave been injured
They are severely injured."

-home

and abroad.

gold owned by the United
States thus became
merely a com¬

and

a

Denver, Colorado.

as money,

.

,

&■ To th^Secretary Humphrey re-

modity

1934.

48c dollar

Mr. Sears before the
Mining
Conference,

identity

I

,

|?.
as
mandatory.
A
few
mines
at-«as * s m^a^°n keeps up, the
tempted reopening but afterand Pensioners and people
heavy losses were forced to again,
i2,su-1^n?*+or
close down.
This is the condition #$0?.-ta;-30 y
*orE°tten
of more than
95%. of all
gold P?°P^e> arc they not.
.
a

matter

order in this donfusion
address

money

thereof,"

a

.35 per ounce, with a

lost its former

and

with
with

3.50 per ounce, with a 10c dollar

*An

authority

rights and
the
peoples'
rights are fully supported by law
and are directly
contrary to the

the price of gold becomes:

$16.80

as

Regulations

practices of the Treasury; and that
Congress acted under its Consti¬

and

tion to this perfect pattern.

im¬

an

portant anniversary. Twenty-five and became a simple commodity
ago the Gold Reserve Acti and Congress then had no greater
of 1934 was passed by Congress.
power over it than over any other

an

prices, but these are merely the
result
of
multiplying our cur¬
rency units, because of their con¬

of

asked:* ;

was

:.Tt„

currency

made

,

jn

[ee

years

the

Ration

,

aa/v

of idlegroat majority of these
could not attempt reopening bein

ness

years

us
s

date

brain-

lude themselves and others by repetition of untrue and wholly fal-

course

duced

.

are

effectively

so

Washed that they continue to de-

"

,

.

We

talk

and

can

it

'

We still

continue to think

gress

melt their gold and place "about
thcse
non-existent
gold
formulae' and our currency as
ctemands tnat they contract to sell thou eh
thov
werp
rpai
Thw
they

mines in the countrv.

program

a

private

grant

t
provision ..: ■
Frauds on the People
improper
Another provision of the Gold
interpretation of these words, or
through intentional disregard of Reserve Act of 1934 gave the Seci
their meaning, the Treasury and retary of the Treasury authority
o t h e r
government departments lo buy and sell gold,.. at
in

and

owners as well," which are given

This is the important
of,the Act and through

indulged

in the hands

accrue

"foreign .banks

The Secretary has a set of Regulations but owing to the fact that

^

have

per-

.

power> manently or temporarily, and they
that it pays are1 not'confined to the daily cash

having stems from the practices of the tirely destroyed the gold mines
and gold producing districts in 33
failed to provide us with sound Federal
Reserve
System,
their Western States.
and sales would be properly eonmoney and a sane and honest fis¬ multiplication of
printed currency
cal policy, find themselves deeply based on
They have confiscated the gold ducted and the laws respected,
debts, the removal of
"
which was taken from its owners, but this has never been done.
enmeshed in a rapidly growing
gold from all monetary use in the
The gold policy-of the Treasury
inflation, with the greatest in¬ United States and the unlawful in defiance of law, and they have
been parties to the imposition of was concisely stated by
debtedness in the history of the Treasury
former
practices
and
propa¬
frauds on our citizens generally, Undersecretary Randolph Burgess
world,
with
an
irredeemable ganda regarding gold.
through misrepresentation to in
paper
testimony
before
a
Senate
currency,
based only on
The inflation
has
been built
them that gold was the basis of CnmmittPP in 1Q54- Whim bo cniriCommittee in 1954, Avhen lie said..
debt, with no sound monetary
by the government because they a "reserve" to
reserves which can be used under
provide safety for
wanted to build it, but it is getting
i Jjuy and sell gold freely
users of the present irredeemable
their present system, and from all
with other countries-,..:. ; at the
beyond control and the people are
currency.
'
quarters come their confessions
price of $35 an ounce and we sell
searching for safety and a way
With
that they need some solution to
gold
clearly and com¬
to foreign banks and
out of the "confusion.
They are pletely removed from all mone¬ gold
their
problems,
but have
not
owners as well.
beginning to turn to gold.
found it.
tary use in the United States it
There was a lot of loose lanwhen

tokens is not limited, either

purchasing

reduced

so

Thursday, May 14, 1959

.

he

citizens in accordance with

Committee

Chairman, Western States Gold

been

Federal Reserve Banks by our

or

President, Calaveras Central Gold Mining Co., Ltd.
Angels Camp, Calif.

for

banks

By IIARRY SEARS*

with irredeemable paper currency

of

has been

...

sell it

are

on

an

inS with the rights of

equal footour

citizens

J° Purchase it and to hold it, or
*° se*l ^

they have
no ascertainable value
they fit the
description of a "mere token to
serve
as
money."
They are accepted far below face value for it

as they may choose.
Congress has no power to enact
laws or to authorize regulations
which
abridge' these
rights
of
possession and when the Secretary of the Treasury attempts to

is certain that the amount of these

enforce such

notes.

Since

regulations he is act-

Volume 139

Number 5846

.

.

ing illegally and without author-

ityi-J "
A

■•/*%' "//

current

Court

concerns

lion

in

case

bears

possession

by

a

J*

of gold bulthe* State of

in

man

this.

on

Washington, charging him with
criminal

act

arrested,

which

for

tried

he

have

and

because of its

a

To

been treated in this fashion

most cases they have not
contested, having been overawed
by the long standing propaganda
and claims that the government

^tect

"

p

appealed, and
by the Court
of Appeals, has been remanded to
the original Court for corrective
case

was

consideration

action

dismissal.

or:

charge

common use...'

which

the

exist.

longer

In

under

1933 they

were

force the people to turn
gold coins and bullion over
to the Treasury and later, title to
this gold was given to the United

used

to

their

States in the Gold Reserve Act of

all

It

1934.

commodity

became

gold and gold coinage
out.

wiped

was

fact,

even

the Treasury lias

recently lifted bans on the possession of gold coins and they are

permissible to be held by
public and are classed as col-

now

the

But the old

items.

lectors

to

as

still

held

crim-

gold bullion, is

the

over

heads

the

of

people by the Treasury. It is interesting to note the language of
the Court of

Appeals

the

,

considering

In

which must be obeyed,

in reversing

this case:

by

Price control of commodities and
/ private property is unconstitutional,.
Privateproperty and property
all United States
are
protected under

of

rights
citizens

Constitution and must be

our

respected,
Private
property of citizens is
protected from seizure or con¬
and

recognized

so

seems

vital

gency.""

;

,

as

matter

a

of

the Gold Reserve

Act of

1934 established the status of

gold

the United States as*
merely commodity gold, and abolished any former status it may
owned

by

have had

as

money,

or

monetary

gold, it had the effect of establishing all gold, in the United States
as commodity gold and as private

the

come

as

start

the

when

turn

we

past and

different future.

of

lawless

by our- government, we have well
settled rights which can be in-

voked. and

reverse

can

this

con-

dition for the future,
Gold

producers

have been an
industry
with
limited
public contacts in the past but the
•

First

Bank of New York,

Municipal

the

of

effects

inflation

jurcd

has

manufac-

gold

brought

|n^0 fresh- prominence and

as

the

doubts

the

and

is

about

Canada

ready to
trading

and

authority
to prevent United States citizens
from buying, selling, or holding
gold, or:

markets both there and here in

tary has any

To prevent

power

or

the mining

or proc-

ofgod
resmlnUnn*
intprfrrp
interfere

of

such

ownei^ of this

Sdth
with

thp
the

business

whih
nrnnpr
Pr°pci

by the

goW, or any ™in~

eral deposit containing same, or.

the United States. The gold will
remain in bank vaults in Canada
and

warehouse

traded

on

Even

in

the
its

receipts

will

be

they
ket

see

jn

preliminary

that here is a world marmakjng
gut we can

|0 go to Canada or to
there, for we now know
that morally and legally there is
a ciear right for us to have a free

sary

price which does not conform to
valid laws regarding private prop-

gold

erty, or:

market here in the United
states, and to start the building of
such a market, the growing fear

unrest in the minds of our
own people can be a factor of
great importance,
is a necessary part of mining to
Among other steps, there is a
change it from the form of a carefuly prepared case in progress
concentrate in which it is mingled in the Federal Courts to terminate
require gold miners and producers to have any form of license
in order to melt their gold, which
To




under
Paul

but

Einzig

than

a

possibility in case of a Democratic
victory at next year's Presidential
election. But the heavy gold losses
recent weeks induced a
quarters to revise their

during

good time to in¬
of the Presi¬

this

But

it

then,

of

side

At¬

the

lantic, the chances of the Repubr.
remain in

licans to

that :
more

in

result

election.
from

seems

present

there would be rather

.

the

dential

number of

opinion. It is felt in London that
even the United States, with their

were

office

are

in

negligible. So possibly
Republicans will adopt the
attitude that they might as well
go down fighting in defense of the
dollar. Nevertheless, the tempta¬
tion of taking the line of least
resistance by devaluing instead of
adopting unpopular disinflation¬
ary measures is admittedly very
case

any
the

issued from

an

approved by voters

pression

like it or not.

Bank
and

of

America

N.T.

&

underwriting accounts it
managed have bought more than
$629 million of California State
and and Municipal Bonds in the
past 12 months. The bank and its
syndicates,
through
successful
competitive financing, provide an
assured

source

of funds for

a

wide

of public projects and civic

range

improvements.
Other

:

bank

major

syndicate

Co.; John Nuyeen & Co., Inc.

cipal of the firm.

Reckless

Suggestions

Recklessly irresponsible sugges¬
about doubling the dollar

price of gold came to be repeated
quarters recently. Even
though nobody with any sense
of reality could seriously imagine
that a United States Government,
in various

PALO* ALTO,

Calif.

—

Schwa¬
branch
under

office at 350 Lytton Avenue

the

direction

of

Frank

B.

Nom-

balais.

Forms Lawrence In v.
BROOKLYN, N. Y.—Lawrence
Scharfman is engaging in a secu¬
rities business from offices at 3060
Ocean
name

the firm
of Lawrence Investment Co.
Avenue

under

Opened

Ky.—Walston &
has opened a branch of¬

LOUISVILLE,
Co.

Inc.

fice at 430 South Fifth Street un¬
der the direction of W. D.

Fleming.

Sidney Ungar Opens
Sidney J. Ungar is engaging in a
securities business from offices at
350

Broadway,

New

York

City.

more

drastic

which

those

measures

might

than

suffice

if

adopted in good time.
Scaling Down Foreign Aid

anything like 50%, the mere dis¬

mediately effective step would be
a drastic scaling down of foreign

cussion

of

the

possibility tended
by

to accentuate the scare caused
of the

gold outflow.
Even if and when there should be
the

increase

it

devaluation,

a

seems

utterly

unlikely
that
any
responsible
authority would think it neces¬
sary to devalue the dollar in any
circumstances to a larger extent
than is unavoidable in order to
make

American

industries

com¬

aid.

When

conditions

satis¬

are

factory the free world is entitled
to

expect the United States to be
in this regard. But when
dollar is the subject of a

generous

the

sweeping attack then it is not
very wise to waste the financial
ammunition which is needed for
its

defense.

It is to the interests

of the free world that the

States

should

nancial

power

husband

United
fi¬

their

at a time when a

dollar crisis is threatening,
to be in

so

as

position to resume for¬
eign aid on a large scale when
the danger is over.
An announcement of a tempo¬
a

rary reduction of foreign aid, to¬
decided eventually to,
gether with simultaneous disin¬
considerably larger
flationary
measures,
would be
extent than was necessary to re¬
able
to
restore confidence
and
store the equilibrium of sterling.
would bring the outflow of gold
The result was a rising trend in
to a halt.
Admittedly, it would
British prices which continued for
slow down, and possibly even halt,
10 years.
Excessive devaluation
progress towards recovery in the
opened the floodgates for infla¬ United States and in the free
tion. It seems probable that, with
world.
But this price would be
this lesson in mind, the United
well worth paying for the restora¬
States Government will have the

the last,
it to

a

tion

good sense to abstain from exces¬
sive
devaluation,
even
if
and
when devaluation should come

to

be considered inevitable.

that
be

we

are

a

long

way

from

likely that the present Adminis¬
tration
would
yield without a

effective

measures

a

dollar,

in

the

dollar.

to

safeguard

world

Democratic Administration

would take the line of least
ance

resist¬
for

and make the world safe

inflation

by devaluing to an un¬

necessarily high degree.

low the British example in

ing it by means of
the

Ernest F. Rice

rate the

United States is expected to

If

confidence

a

Should the outflow

at an alarming

measures.

even

opinion would
naturally take it for granted that

stage, if indeed it will ever
reached.
It seems most un¬

strong fight.

of

Republican Administra¬
tion should fail to take drastic and

If

the

American's Likely Course

continue

and

much

The most obvious and most im¬

But

Walston Office

vicious

whether Republican or Democrat,
would resort to a devaluation by

cut

bacher & Co. has opened a

the

accentuate

of

gold.
A progress of
spiral in which gold
losses generate distrust and this
distrust
accentuates gold
losses
would
necessitate
eventually
the

tions

to

New Schwabacher Office

would

outflow

S.A.

the

even

trade

occur

fluence

Administra¬

port.

steps

foresee that it will not be neces-

price limit on gold, or
to compel its owners or producers
to sell it in any manner, or at any
a

would

such

tion

in¬

in¬

follow

change

market.

the volume of demand for gold is
causing surprise in Canada and

become

measures

further

in order to check wage

no

the

to

a

whether any recovery that would
the
defensive
measures

that

would

there
be

cause

running short, and it is doubtful

as-

„

in

would

now

abroad was expensive, so this was
petitive at home and abroad. A
nevbr-a-* practical market for our H. W. Moore & Co. Formed devaluation by something - like
modest citizens.
10 to
15% would be ample for
ASBURY PARK, N. J. —H. W.
ftut there has been preparation
Moore & Co., Inc. has been formed that purpose.
if%/:
under Way for some months to with offices at 710 Mattison Ave¬
We all remember that in 1949
bring the' advantages of a free nue to
engage in a securities busi¬
Sir Stafford Cripps, having re¬
gold market to us close at home, ness. Herbert W. Moore is a
prin¬ sisted the devaluation of sterling
and on such a s.caleT,r.ap ^ couIo
This

might

it

resort

to

gold reserve still above $20 bil¬
lion, could not afford to continue strong. Unless such measures are
losing gold on such a scale for any adopted in the near future, delay
in the election of 1956.
Proceeds
adoption is likely to
length of time, and that, unless in their
of the sale will be used for vari¬
the
movement
is
checked,
the strengthen the impression abroad
ous
additions and improvements
the
government does not
American authorities might feel that
to the Los Angeles Municipal Air¬
intend to adopt them. This im¬
impelled to devalue, whether they
The bonds

authorization

&

classes.

bring the trade unions
senses

people

sumed

of

sales were large and the storage

popular market. With expenses
a minimum it can serve all

the
suf¬

Admittedly, it would not help
prospects of the Republican
Party if business conditions were
to deteriorate as a result of the
defense
of the dollar.
Time is

here

over

City

Bonds

not

the

the

of

dollar.

members of the
were:
SecurityFirst
National
Bank;/American
Trust Co., San Francisco; Califor¬
nia
Bank,/ Los Angeles; R. H.
Moulton & Co.; Smith, Barney &
Co.; Kuhn, Loeb & Co.; Merrill
Lynch, Pierce, Fenner & Smith,
Inc.; Seattle-First National Bank;
Northern Trust Co.; Dean Witter

Secre-

Neither Congress nor the

about

Until

Blyth & Co.,

Airport

that

devalua¬

tion

Inc., and The First Boston Corp.,
oh May 12 purchased the $15,000,000

has

flation.

which

National

their

inevitable

possibility
a

most

The

April and the

crease

A Bank of America N.T. & S.A.

included

of

end

London

a

Los Angeles Airport
Bonds Marketed

isolated

^rastic

the

in

been

unemployment

States

to

the

syndicate,

of

United

ficient to

of

underwriting

level

of

outflow

of
May
revived
speculation in

:V

,

the

beginning

far

a

in

The sud¬

wards

away

foresee
:

as

increase

making the world safe for inflation.

—

gold from the United States to¬

than

more

therefore view this

us

fresh

at

welcome

out and made
treatment

been singled

victims

a

would be on the open commodity

To set

Let

show

soon

bonds, or a net interest cost to the
city of 3.82%.
The bonds were
to
investors
to
yield
breath of hope for the future of reoffered
the gold mining industry to con- from 2.40% to 3.95%, according to
sider that although in the past we maturity June 1, 1961-1989.
should

function

Authority

would

den

value

cut to

Avers There's No Power or

conduct

That

years.

LONDON, England

hearing.

It

bea

property.

essing

25

died as bulk purchases since the

-

'

Since

past

devaluation

—viz.

the City of Los Angeles, Los An¬

fiscation,

growing resentnational
policy that emergency ment of the people can compel the
regulations and almost dictatorial government to establish and use
powers
granted or conceded in real reserves of gold, for there
the turmoil of war, cold war, eco- could
bb swift collapse of the
nomic revolution and the struggle multiplication of paper currency
to preserve a balanced democratic now 'being used./ ;
way of life, should be: discarded
upon return to normal conditions,>•1
efcple; Want Gold
lest we grow used to them as the
In recent-years there has been
fittings
of
ordinary
existence/ increased1 buying of gold in free
Executive regulations drafted and" countries abroad. Our substantial
confirmed -for
an
emergency citizens-have been adding to their
should
expire with the
emer- holdings, but these had to be lian"It

while step to restore dollar confidence would be construed

Private property cannot be taken geles County, Calif.
for
The bank syndicate paid a pre¬
public* use without just
compensation and this pannot mium of $15,469 for a combination
be
determined
without
a
of 41/2%, 3V2%, 3%% and 3.90%

cycle of inflation continues, the

^

,

recovery,

.

.

have

:

In

.

.

from

original
presidential
orders were issued, no

emergency

„

the
Secretary of the Treasury, we
fmd he is governed by the lollowinS well settled legal principles:

author¬

conditions

the

course

according to Dr. Einzig, delay in taking this worth¬
by
world opinion as evidence we would take line of least resistance

as it
demands

grow

can

$100 per ounce.

by Congress.

Of

America, according to Dr. Einzig is expected to check any dan¬
gerous gold outflow by disinflationary measures and cessation
of foreign aid. Even though this may affect U. S. A. and world

Throughout history, this has al¬
been the function of gold.
It has not been permitted to regis¬
ter its value in this country during
should

Appeals that there are no criminal
penalties provided in the Gold
Reserve Act for possession of gold
ized

value

newly mined
f>olcl from-properties m the United
States and summarizing the laws

of

statutes

whose

but

By PAUL EINZIG

\

bigger gamble

a

They want something tangible,
that could be safe and dependable

Sets Forth Operating Principles

Act of: 1934, but it was found by

no: criminal

even

than horse racing.

,

■,

upon
subsequent
Treasury
Regulations and the Gold Reserve

and

now

ways

The criminal

Court

r

.

this is

connected with the
present irredeemable currency in

for-;gold

States

or

■

Take About the New Dollar Scare?

shrinking dollars only to find that

anY manner

on

United

purchasing power of their de¬
posits and they have plunged into
the stock market to multiply their

attracts increased public
for its possession.

and

the

the

T?
the status of
gold owned by the United States
anc^ ^o s^a^e 01* imply that it is in

possession was
original emergency orders of the President early in 1933
based:

them

ect rnem' or\

„

What Measures Will the

Our citizens have watched their

bank accounts wither and facie in

■

Claims No Penalties Are Provided

This

control of newly mined gold,
through Treasury regulations.

manner which violates the
property rights of the owners, or
pnnirnrv- tn anv vilid liw rmdp tn

not
.

r

of

21

(2209)

all

any

u

in

after

possession, or:

appropriate or take posses¬
privately owned gold, in

sion

1
where others

had this power, or they could
afford the cost of an appeal.

owned

privately

gold or to assess any owner with,
a. penalty or a threat of penalty,

sentenced.

and

LbS
instances

manv

many

confiscate

To

was

4U

hern
been

with other metals, and to prepare
it-for sale,,or:
' ,"/'

Federal

the

directly

Chronicle

The Commercial and Financial

.

fol¬

check¬

disinflationary
present

high

.

Vice-President
of Loewi & Co. Incorporated, Mil¬
waukee, Wis., passed away April
Ernest F. Rice, a

24th.

The Commercial and Financial Chronicle

(2210)

22

if
opinions • have
changed.
the forecasts are limited in see
application
since they are not; However, - where no. other ap¬
usually set forth in enough detail' proach is feasible, this method
can be used provided you believe
for operation.
~;
y
^
•
you have a good sample.
>

Techniques in Use Today

"Grass-Roots" Approach

General Aniline

City

Film Corp., New York

&

methods of

to each

an

estimate based

set of assumptions which are

likely to

most

basic

Underlying

occur.

forecast must be. some

sales

any

-/

use.

and

these

fined

set¬

in

feel

a s s u

(7)

mptions

(8)

caster with

"out"'

wh

Now let
for

an

the

Richard Berger

better

the

assump¬

tions, the better the forecast.
The general aim of either sales
economic forecasting is simply

or

employing

provide the managements of
various companies with reliable
information

business

conditions.

analysis,

forecasts

future

on

In

by

the

final

whatever

obtained, must be modified

means

the

at

reasons

long-term fore¬

a

(2) Disposition or selling of a
plant or equipment.
(3) Long-term borrowing.
(4) When aging of a product is
of importance (such as liquor or;
tobacco).

to

advance

look

us

(1) Capital investment policies.

proved

that

and

'

staff

like

"extra¬

and

applied in terms of an expersonal judgment and
apecial knowledge of his own
ccutives

business.

Non-Numerical Methods

district

Some of the advantages

of this

that

it

been

has

methods may be used.
first

classified

be

can

why

executives

us look
methods,

Let

non-numerical

at

on

deter¬

forecast is, and

a

into

and

sales

forces

that

five

These

groups.
methods

of

non

-

#

The

method

determination

ments

if

even

should
and

allow

measure¬

inexactly, of such

relationships.

used

nature that

a

for

(4) Composite by Industry Ex¬
perts.

forecasting

they

be

can

purposes.

(4) The method must be based

Sampling

(5)

Group

of

the

results obtained.

First, the Consensus of Executive

control

no

over

(e.g., consumer in¬
competitive prices.)
The

internal forces are those wherein
the company sets its own
policies

an

research

staff

be

either

of

a

-

here is not to discuss the various
uses
made of such
forecasts, a
brief summary of such
uses

foe in order.

is

while

one

A

of

short-term

less

than

a

may
fore¬
year,

long-term forecast is gen¬
erally conceded to be one of long¬
er

a

than

course,

a

both

in

confirm

course,
if
available.

selling

company

a

periods.

Perhaps
only
other methods, or, of
no
other method:, is
should

be

year's

various

duration.

companies

*An address

Of
may

by Dr. Berger before the
American Institute of Chemical
Engineers.
Atlantic City, N. J.




care

.,/,

...

the

fourth

on

different

.

ages

to such

these

men

a

method

—

the

assumptions.

unaware
or

of

itader-

economic

trends.

And, although as was
before, since all forecasts
involve assumptions, these are not
stated

usually
sessions.

emphasized
If

in

executive

forecast is in error,
it is difficult to determine which
a

assumption went wrong. And, cer^
tainly, this process does not result
in too much

method, sampling surveys are con¬
among either consumers
or

are

lying national events

objectivity.

Further¬

the

as

per¬

centages.
forecast,

Thus to get a particular
we would mutiply
the
four factors together — the trend
factor multiplied by the three
other
percentage factors—the

cycle, the seasonal, and the ir¬
regular. In terms of symbols, it
would

be T

today's

C

S I.

that

the

For

be

seasonal

here.

purposes

only

meeting,

forecasts^ shall

yearly

discussed

factors

Thus,

so

will

only

be

the
com¬

Very often, the only method
used
by companies to make a
forecast

is

the

trend

alone.

This

is

&

customers.

For

Bradstreet,

example, Dun;
often
rims

Inc.

surveys

concerning

outlook.

For most

the business
companies, this
costly method
involving
sampling, follow-ups,
sub-sampling of non-respondents,
etc. Sampling can become an in¬
would

be

a

very

volved process which is better left
to

the

experts.

Often, the entire

survey would have to be re-run to

company

Research

*

regard

now.

which

■

has

cycles for a fefr/
Actually, it is notany perfect theory1
,

that

of

cycles has yet beenSince the subject has riot-

business

devised.

yet

been

very
fully developed,
companies are wary of us¬
cycles in < their forecasting.

-

many

ing
However, it is possible to try to
develop a cycle of your own
company
sales.
Usually, cycles
.

are

obtained by a process of elim¬

ination.. :First, the trend is developed. The original data is then:

through

these

by

trend-

estimates for each year.
What is
left in your data then is the cycle
and

irregular
factors.
By
a v.
smoothing-out process, usually by V
sight/ a cycle can: bedev^bped;?'
Having determined each of:t the
components of a time series/; alH
that is necessary in forecasting is'*
to forecast each component and;;
then combine them into projected data for the period under
review./
The

next

Correlation Method/ ;

correlation

The

to

one

the

word

business

method

to be

from/ using f
it has prpved

,

of the most

one

Often ;

itself/frightens many:

executives

methods

is/the

be considered.

this method, and yet

satisfactory

of

forecasting for many ;
companies. Actually, it is simply |
a
method of measuring the relation between two or more factors,; *
For

may be a di-Z
between the Federal'

example, there

rect relation

Reserve Board Index of Industrial ■?

Production and the unit sales qf4
a product or group
of products a

particular company sells. A very;
popular
index
for
comparison:
purposes
is Disposable or Na-D
lional Income, which may be used
primarily for comparing with re¬
tail
trade
items,
or
any
item i
which

flows

to

the

consumer.

National Product

Gross

popular

very

in

used

These

is also a>

is often

index that

this

of

type

indicators

useful

are

-

analysis!
especially

to

companies having a
stable * share of their in-'

fairly

dicators

used

are

this is not the
Now

t

However, the iriX
often even if,

dustry's sales.

case.

,

what is the ;
good of relating the sales of a
product to National Income, for
example? You would still have to/
you

may

say,

national

forecast

before Z

income

could decide what the sales
of the product would be, say for/
next year.
That is true. How¬
you

there are multitudes of ex¬
around who will forecast,

ever,

Types of Trends
•

this

believed

-•

sales

of Group Opinions method. In this

disadvant¬
ducted
method.
Perhaps
are

obtained

are

with

and

...

Finally, there is theSampling-

can

However, there

units

dealing

especially true when the
does not know, or is
unaware, of underlying economic
factors affecting a company's fu¬
vidual experts in Various fields.
Periodically, these experts .are ture. There can be many types of
asked to submit forecasts.
logarithmic,
or
Usu-r. trends/ 3 linear,
ally, one person in the .company curvilinear, although in practice
or > logarithmic
are
most
will take each ' of The; forecasts, linear
weight them - somehow, and come" often used. Semi-log paper comes
in
very>;> handy
in
extending
up with a combined figure. [ The
.advantage here is thatv we! are trends; for/if the trend appears
to1 be [a / straight;* line on such
dealing with specialists with sup¬
posedly good contacts in'.the vari¬ paper, ifc indicates that sales are
ous fields.
Obviously, a /company! increasing at a constant percent¬
selling' only one product[might age rate for that company. This is
not
use
this
system.' : Further'-1 commonly/the case. In determin¬
more, it is difficult to correlate ing trend lines, it is often neces¬
the several parts since ihey are sary to- eliminate certain time pe¬
In

and

also be made to take
of unforeseen events.
;

other factors

used

Composite by Industry Experts —
the company simply hires indi¬

allows each key man the oppor¬
tunity to make a direct qontribur
tion to the forecast.
Also these

forecasts

the

in
are

However, rarely- trend, cycle, and irregular
conditions be /the ponents will be dealt with.

•

can

Jong - term or short
term nature.
Although the primary purpose

cast

a

economic

men
really know the firm and
(e.g., inventory, type of product have been
responsible for its suc¬
carried, or the quality of the prod¬ cess (or
failure, if a forecast goes based
uct).
wrong).
A quick alteration in

Forecasts

we

ignored

to

are

economic

obtained

which

product.

this method

expressed concern¬
ing the data and the future out¬
look.
The Chairman arrives at a

ex¬

is.

of

will

a

and views

ternal forces
come or

used

in

National Bureau of

studying

decades

most

is

limitations, of course,
a discussion on how
to. obtain trends, cycles, or sea¬
sonals. Many volumes have been
written on < these subjects which
you can find in any business li¬
brary. Briefly, however, the trend

of

with

same

\(6) Finally, and most important,
the method should work
empiri¬
cally and give useful forecast.
consensus, and the group abides
Every sales forecast has two by the decision.
basic elements to it—the external
Such a method, of
course, is
®nd internal forces.
A company much less
costly than maintaining
or

In

permit

similar

Opinion. This is simply the gath¬
ering of the majority views of top
executives, who meet periodically
to review

use

has little

Economic
been

active

the

been

divided

first of

Obvious

do not

rience

Opin¬

company's prospects—
of available data.
e.g.,
the
President,
Executive
/
(5) The method should be inex¬
Vice-President,
Comptroller,
or
pensive in terms of time, man¬
others. As a first step, much ma¬
power, and the use of manpower
terial is prepared before actually
»ot too difficult to hire or train
coming to the meetings. The ma¬
—as related to the
accuracy and terial
is reviewed at the meeting
value of the

on

of the

has

of this system proves

use

method

this

is. starting a new busi¬
a new product.
Then it
would try to use the past expe¬

company
ness

ions.

(3) Analytical methods must be
of such

that the

have something better to do than
to play with figures.

The third approach of Historical
numerical
Criteria
are
appraisals
based Analogy has only a limited use¬
Certain criteria can be set up to
fulness.
Here, we look at sales
mostly on opinions and judgments.
Judge
the
various
forecasting What are
in terms of past performance.An
they?
methods:
attempt is made to select a period;*
(1)
Consensus
of
Executive
in
past history with conditions
(1) It should be based on scien¬ Opinion.
tific method, that is, on organized
similar to the period which you
(2) Sales Managers' Estimates.' are
knowledge used to explore cause
trying to forecast. This might
and effect relationships.
(3) Historical Analogy.
be a worthwhile procedure if a

(2)

discussion

a

profitable.

past experience and their own
psychology. In a period of declin¬
ing sales, they tend to become
or how it may be used, let us get
down" to actual cases on how to overly pessimistic, and vice versa.
make one.
Actually, either non- Furthermore, this requires an ex¬
numerical methods or numerical tensive expenditure of time
by
Now

mined what

which

Selection

the

In"
these

industries
chiefly for
method
are
as
follows:
Men long-range
forecasting
rather
closest to the market are giving than short-range, since results are
not usually
their opinions.
accurate enough for
Responsibility is:
placed in the hands of those who month-to-month planning. More¬
must produce.
The salds force is: over, the error involved in miss¬
given greater confidence in quotas ing peak sales by two or three
developed from forecasts. On the months in a period, say five years
other hand,
sales managers are from now, would not seriously
usually unaware of national de¬ affect the financing of new plant
velopments and trends, but, even and equipment for that period.
if they were, they are unable to But it could aflect seriously the
or
inventory pictures in
translate these conditions to sales. profit
Their forecasts are based mostly that particular ypar.
-

4

product managers.

or

planning,

cast—

e n

wrong). Nev¬
ertheless, it is
true

this

businessmen for many years.

.

their forecasts
have

Production

executive

sales

Employment policies.

several others.

fore¬

a

quo-

(6) Budgeting.

of
these

have provided
many

Purchasing of materials.

tas.

tual 1 y,
course,

about

mathematics will be discussed.

get more

(5) Determination of sales

ting up your
forecasts. (Ac¬

esti¬

future

methods, it is necessary to
order to k6ep in mind the fact that sales
realistic estimates. Re¬ for any company are largely the
sults
are
accumulated::;for each' result of four factors—long-term
branch, or district, and forwarded' growth trends, cyclical business
to the central office where a com-; fluctuations,*; seasonals, and irreg¬
posite forecast is derived.
Some ular variations. Unfortunately for
companies do not bother individ¬ this method, there are too few
ual salesmen but, rather, rely on* companies where the patterns of
the specialized knowledge of the^ these factors are so well defined

Pricing policies.

(4)

be clearly de¬

sales

classified

trends, and

record of past sales in

a

(3) Wage and salary policies.

should

questionnaire is

a

member of the

into those involving
cycles, and those in¬
volving correlations.
Of course,
there are also many mathematical
formulae
used
for
which
time
be

'

Inventory policies.

(2)

assump¬

tions,

a

this

curricular" activity). Usually, the
estimators will be supplied with

following purposes:

(1)

In

does not allow discussion today.
which case the form
must be very clear—or else esti-> [What follows has been prepared
on
the assumption that many of
mates are made by salesmen':'in;:
consultation with the branch or you will be familiar with most of
the ."mathematical
terms
menregional - manager.
(Of
course,*
Honed.
However, no involved
there are varying views on how'-

vary somewhat as to these definitions.
Short-term
forecasts
are

used for the

and has

in

mates,

salesmen
A forecast is
on a

theory

situation.

determine

to

force

Attention
will
now
be
relies ods.
esti¬ turned to the numerical methods.
that he is. Actually, these techniques might

a company

consumer

the

of

method, either
sent

opinioni sales manager's estimates, historical analogy, com¬
posite by industry experts and sampling of group opinions,
and, regarding the latter, the methods involving trends, cycles
and correlations. The author concludes by offering criteria to
judge which of the several methods to

the

to

"feel"

of executive

consensus

the

on

closer

Turning our attention to cycles,/
subject is found that has cap- £
tured the "interest of economists^

a

Especially

Sales Manager to get

the

mates

explains why or how it may be used and its construction.
discusses the pros and cons
of non-numerical and numerical methods. With regard to the

The chemical firm's statistician

former, he evaluates the

Here

approach.
on

analysts, Dr. Berger defines forecasting,

For businessmen and

Numerical Methods

Sales

y

y

j

and

[

on

But enough time has been de¬
Managers' Estimates,
often known as the "Grass-roots": voted to the non-numerical meth¬

the

Engineer

Research

Commercial

:';///

method is based

The second

By Dr. RICHARD BERGER*

Thursday, May 14, 1959

.

.

that from any other line you might.
draw through these points;1: t ■:
Vy";

more,

Several oi the Forecasting

.

perts

national

income

for.

Simply.,

us.

the New York "Times,"
"Journal
of
Commerce,"
the

pick

up

"Chronicle,"
or
other
business
publications, and read, * You will
find

of forecasts

dozens

ernment and

by gov-:
industry experts, all

surprisingly-

similar

Take

one

of

these

rule.

as -a

forecasts

that/

have faith in, or better yetji
make up one of your own if yoiii

you

the

have

"know-how"

basic

realize

what goes into
of national income.,

/

T h

e s e

correlations

r

and/

forecast

a

V

;

,

may

a

„

be

simple, or they \ may be rather'
complex.
For complex' ones, tit
course, it is best that you have
some basic knowledge' of correla- /
tion techniques. • But no one need ;
riods Hn
which random factors be an expert for simple , correla^
have occurred. These periods tend tions, and many times these serve/'
the purpose just as well and arq
to
distort
the
trend.
For
ex¬
understandable
by / to^
ample, war periods usually show- easily
higher than normal < sales.
In¬ management. Even complex cor¬
cidentally*
the: theory of - least relations may be done simply by:
squares
is used in determining graphic method, although the un?J
most
trend
lines,
although
if derstanding of the "why we dp>
you've had enough practice, ob¬ this" may not be so clear.

taining trends by sight is almost
as

In

useful and less time consuming.

this theory of least squares,

a

line is obtained which gives a socalled
sum

"best-fit"

of the

and

squared

where

the

deviations of

points around this line is less than

Besides
tional

lated

Product

Income, sales are
to

change
units
For

general factors, such a$ ■"

National

Gross

Na¬

specific factors, such as*
in prices, or numbers of /

per

household,

automobile

ample,

or

also re¬

new

sales,

car

or

others./1
for

ex¬

registration^

Volume 139

Number 5846

might be thought of

.

The Commercial and Financial Chronicle

.

.

of

(2211)

items that might be considered, or
even combinations of them. That

with more -understandrW*^ii£il£»#
Finally, let it be noted that; k"lfl3nlCyi
forecasters agree op ? the *
future
outlook. 1 In
fad* it ^ has

is

been

There

are

the

'■

job

caster—to
ticular

for

best

the work is not

review

must

indicator

can

fact¬

the

to

here,

,■■ ■

A constant

kept

because

the

country were laid end
they would point in all

end.

Hirpptinn«?

/-

■

xv

bibliography

an

d)

Ari«s.

R-

s.

W.

and

A.

nrrnnriTm
~

Sr

Bank and Insurance Stocks

~

DETROIT, Mich.
Henry G.
Iier't*'1S n*4.W as^)cia^e<^^with

Manley," Bennett &

By ARTHUR B. WALLACE

Company,

This Week

members of the Detroit Stock Ex-

change,
Copulsky,; thtive

suddenly become al¬

D

D6III1GII Uf (|Q«

Adds Three to Staff

said that if all the forecast-

in

ers

par¬

even

over.

be

DahmaII

all

not

fore¬

which

But

product.

them,

relatible > ing.

with

-

factor.

a

the

determine

work

ors

as

numerous

as

at

registered

a

a

the

downtown

office

MORGAN GUARANTY TRUST

in

.iy

Use of the

One

of

Scatter

the

basic

techniques in

this

procedure is the
scatter diagram, which
its

label

preparation.

does

"Sales"

you

Y

whatever

or

using.

are

simply

or

axis

indicator

Then

plot your
past data for each year, i.e., salei
for. 1946 against income for 1946.
This is one point on your graph.
Repeat for each year. After the
points are plotted, see if there is a
.

relationship and how close it is.
Try this with
get

you

than
also

the

best

series

one

be

series until

several

done

If

ones.

is

used,

more

it

graphically,

can

using

the system of residual variations,
which
will
not
be
delved
into

here, but which is extremely sim¬
ple, and again you do not need to
be expert.v';:

For

.

those

(3>

Barnes. Leo. "Handbook for
Forecasting,"
Prentice-Hal!,1'; Inc.,
New York, (1949). • •
•"

not

the X axis "National

and

Income,"

a

(4)

Croxton,

HaMPliiot,

f.

E.

&

d.

j.

Cowden,'.

able

not

to afford experts, or which cannot
take too much time in forecasting
activities, the graphical approach

ambng the New York banks—al¬

Ethe. Solomon. "Forecasting in
Industry," National Industrial Conference
Board, New York, (1956).*
: >
; (6)
Ferber, Robert, "Statistical Techniques in Market Research, McGraw-Hill
r

Bock

I

V__l,

TVJ

/

the association with

Company, Inc., New York,

Detroit

•nd

(1949).

Finney

Mr.

years.

for

the

is

sible

Group Sell
Specter Freight Slock

may seem
to
been
suggestions

have

our

gressmen, who apparently want to
tie such a provision to the bill

befbre

now

committee

a

to

re¬

An

by

underwriting group headed

A.y G.

May

shares

Becker

offered

12

class

of

&

Co.

Inc., on
200,000

publicly
A

certified

public

tion

considerable

in

System, Inc., at $11.12% per
the shares offered, 60,000

are

"v'-

<

ma*

.

vv.

Net

proceeds to &the company
from its sale of 140,000- shares ,$vill
be

applied

to

payment

of

bank

loans

and equipment obligations
subsidiaries, and the balance
will be added to working capital.
that should be pointed out, how-1
Spector Freight System; (.Inc.;
evfcr. Occasionally, good correla¬
headquartered in Chicago, Hll., is
tions are merely the result of co¬
a
common
carrier

Break

Outlays

AH

Records.
U.

Posts Record Earn¬

S. Rubber

ings.

-

.

Du Pont Net Rose in First Quarter.

Further, neither component
sought small consumer loan busi¬
ness, but confined its activities to

*

wholesaling

,,

credit.

With

a

very

small

Tri-Coftlinental

-

H.^ M. BSird Voorhis has been

,

Consumer

loans.

the application of mutual funds to
pension and profit sharing plans,

aare^^OOrHIS OfflCW Of

Of

After

R. II. Macy Sales Set New Records.

of

have

will devote their entire

men

..

Predicted

this
merger
would not
helped competition among
the banks,
for, as we have al¬
ready pointed out, the merger
puts the consolidated bank among
the largest and thus increases the
competition possibilities on large

and

experience
management and tax problems.

stock

common

accountants

time to the mutual fund field and

($1 par value) of Spector Freight

Profits

First Quarter Jump.

Con¬

has

Both

items:

be,
of Higher

quire notice of mergers before
they could be effected. Preven¬

had

recently
news

Banks.

this

as

partner of James C. Finney & Co.

A. G. Becker

See the

it

this sort from several of

past 12
former

a

find?

we

headlines taken off
in just a day or two's

ex-post

make

there

Call JohllSOll and JameS C. Fin-

Pifv

Now what do
newspaper

facto law that
March Inventories of Manufactur¬
possible for the
ers Rose $400 Million.
Justice
Department to force an
undoing of the merger.
Irhpos- Tight Money Returns to flaunt

ney, Jr.
Mr. Johnson has been in public
relations and sales in New York

nini "

1

of

would

Manley, Bennett & Company alannounces

unless Congress enacts some

sort

'Pren,ice- ^ Tm.utual fun? department of

New

(5)

RnrL

ways

York• Institute of Finance.
so

stockholders0"behalf o£ certain

companies

The Morgan Guaranty Trust Co.
to be an accomplished unit

New
attending the New

preceding the business set¬

back.

seems

Coamp'a„y?rum,f7l.aT957l D<,ve1,'>,ment the 'firm's.correspondent.in
ness

expert

an

You

ordinate

your

of

use

require the services of
for

i

Diagram

Bank Stocks
years

COMPANY

the Buhl

company, espe¬

v

—

represen-

Building. Following his
nomics, inc., New York (1950)..
;
tservice with the U. S. Army he
cially
if f economic
conditions
(2)
Copuisky, William, "Methods of entered the Manley-Bennett trainchange.>
v.>•—
Forecastin*
Chemical * Commodity
De- jng program spending a
year with
most useless for

23

appointed" assistant secretary of
Tri-Comtinental Corportaion, and
the Broad Street Group of Mutual

branch system,, Morgan
Guaranty will have a compara¬
tively low overhead, just as was
true when each was going its own

Records Broken by Mutual Funds.

First

Chrysler's

Quarter

Profit

Tops That for Any '58 Period.
Nation's

Output Hit Record High

in First Quarter.

"Wall

And

Street

Journal"

at

the end of April reported: "Profits
Zoom.

First Quarter Earnings Top

'58 by

53%. Year Expected to Set

Record."

There

been such

has

a

volume

of favorable news in the financial

way.

community lately that it can only
Let us look at the rates of earn¬
indicate that the economy ia
Funds — Broad Street Investing
ings on invested assets for the
headed toward a level of prosper¬
Corporation,
National Investors banks with
widespread branch
Corporation and Whitehall Fund, systems (with high overheads), ity. And what does this mean to
Obviously a higher
Inc.—it was announced today by versus the wholesalers with only the banks?
loan position, and higher earnings.
by motor ve- Francis F." Randolph, chairman, a few branches:
incidence
rather
than
logical'
The banks are in a so much better
hide, engaged primarily, in inter- and Fred E. Brown, President, of I
Ratio Earnings:
cause and effect, or
any direct re-'; state
Invested Assets
position to fend off the worst of
operations. It provides regu- this group of investment compalation between the two factors.
..„A ;
(Dec. 31,1958)
a
recession, for if loan volume
larly
scheduled
freight'..service nies. Mr. Voorhis will also serve
Of course,
these should not be over
declines pronouncedly, their fund9
approximately 11,500 miles as assistant secretary of Tri-ConLarge Branch Systems:
used.
Here is where good judg¬
of authorized routes in the East tinental
Financial
Corporation,
go into high grade investments,
Bankers Trust
ment comes in. After all, sales of
1.00%
those of the large central banks
and Middle West, extending from Broad
Street Sales Corporation
\ Chase
Manhattan..
0.90
refrigerators
wouldn't
be
re¬
New
being short terms where the "roll¬
York,
Boston
and
other and Union Service Corporation,
Chemical Corn
1.03
lated, say,
to
the
number
of;
over" is relatively rapid.
If the
points on the Atlantic seaboard .to
Mr. Voorhis has worked as a seFirst National City
0.96
stamps sold monthly in the At¬
various terminals as far west as curity
analyst on the research
economy prospers, their funds are
Manufacturers
lantic City post office.
0.79
taken up by the demand for loan
Wichita, Kansas.
Terminal facil- staff of the investment company
Incidentally, one of the most ities are maintained in 28 cities. -1 organization since 1956.
Wholesalers:
accommodation.

to; correlation is highly

recom¬

mended.

caution

There

is

one

of its

■

f

valuable correlations that can be
obtained is where the indicator

more

leads your sales by a few months

come

or

Gross

Thus, when an indicator
down, your sales can be ex¬

pected

decline

to

few

a

1958

per

Class B stock outstanding
this offering.

months

were

prior to

,

later, and vice versa.
Don't place all your reliance on
correlation, however, for although

Forms Carroll Co.

alert

CLIFTON,

to

factors

abrupt

cause

or

from the past.

relations

are

variations
vere

mer

may

deviations

of

Even the best cor¬
subject to chance

which

company

which

severe

could

cause

N.

J.—Raymond

Terrace under the firm

Carroll

&

Co..

Co.

Inc. and

Foster

&

ties

on several factors.

has

Adams.

with

their

business from

securi¬

a

Wall

offices at 3408

has

the

233

Boulevard

of Meyer Lightner & Co.

under

firm

Jamieson

in

the

the

under

Opens Branch

O'Lakes

Land

direction

of

Sirianni.

McDonald Branch

considered

the

derived from it.

combination of

Third

National

Open

Bank

Build-;

ing under the management of Eu¬
gene A. Bohlander.
r;
•
~.;v

sev¬

'

the

best

Industrial

port

on

results,

r

will

The

Conference

provide
National

Board

of

Re¬

by

the

numerous

it

is

achievements,

/

V*

'j*yi*r'

and

offices

at

BROOKLYN,

N. .Y.

—

Newr'
an

Eugene Manacher Opens
(Special to Tiie Financial Chronicle)

bank

The
from the recession found

earnings not severely
Certainly not to the de¬
that industrial and rail cor¬

in

rates

WHEATRIDGE,

rities business from offices at 7140




Wall Street, New
Partners will be Rich¬

the

and

reduced

loan

partner

in

Co. -which

Stern,

Mr.

Stern

is

higher

in

the

several

Frauenthal

BANK LIMITED

&

West 32nd Avenue.

no

time for bearishneos

Named Director
election

Schwartz,
a

of

A

Charles

Senior Partner of the

a

investment

of Bachc

firm

&

Co.,

member of the Board of Di¬

rectors

NATIONAL AND GRINDLAYS

of Desilu

Productions In¬

corporated to fill an existing va¬
cancy has been announced.

Amalgamating National Bank of India Ltd,

a

will be dissolved.

is

The

volume,

as

ard H. Stern, Arthur E. Hoffman,
member
of
the
Exchange, and
Dobuler.

for

the bank stocks.

This

just the reverse of what had sent
earnings

This
on

face of lower interest

14

Herbert

and,

billion.

earnings

and GrindlayS Bank Ltd.

Head Office:

-

'

U BISIIOPSGATE, LONDON, E.CJ

:

•.

Grant B.
Grant

B.

Schley

-

Gerald M. Goodman

*54 PARLlAftic.Nl
13 ST. JAMES'S
Trustee

Nairobi;

ltd.,
St.;

Depts.:

Travel

come

Tax

aiKiiET, S.W.I
SQUARE, S.W.I

13 St.

Christiana

Ins.

Dept.;

Depts.:

Securities Co,

James's Sq.; Govt,

Dept.: 54 Parliament
St. James's Sq.; In¬
54 Parliament St. A

James's

Sq.

Bankers to the Government In: aden, kenta,
VMNDA. ZANZIBAR * SOMALILAND PROTECTCWATi

Laird, Bissell & Meeds
Members New York Stock Exchange
Members

Gerald M. Goodman, partner in

Lord, Abbett & Co., passed away
May 4 at the age of 62.

Mr. Good¬
man was partner in charge of the
firm's Los Angeles office.

PREFERRED

COMMON

13

American Stock Exchange

Branches In:

NEW YORK 5, N ¥.

120 BROADWAY,

-

possible
lack

at

City.

move,

recovery

bank

porations felt the downturn.

Schley, partner in
office
at
920
Flatbush '. Avenue
•Moore & Schley, New York City,
with
Clarence
T.
Walker 1 and
passed away April 24.
George Bloch as co-managers.

faced

or

Offices
York

seasonal

a

continues to be at least good.

gree

Stern, Hoffman & Co., members
Exchange,
as of May 29 with

some

another, it has been of modest
proportion in a total loan volume
of, let us say, between $10 and $11

Bertha

Hoffman

time

back, and as a
the income from their
loan portfolios, with the substan¬
tial increase in their holdings of
were

strained.

Waldman,

did

they

consequence

only

Stocks"

Bank

outlook for

York City.
Morris
Goldman,
New

as

London Branches:

Colo.—Eugene
Manacher is engaging in a secu¬

problems

forecaster,

to view his

*

burger, Loeb & Co. has opened

•

the

are

Fund, Inc.

Opens Brooklyn Office

"Forecasting In Industry,"

In closing, it should be men¬
tioned, that forecasting is a dan¬
gerous
occupation,
and
all
too
often it is judged by those with
20-20 hindsight.
If one is aware

*
.

issued in 1956, describes how sev¬
eral specific companies make fore¬
casts.

Broadway,

with

never

low

-1

The

of the New York Stock

'

methods

Option

formed

To Form Stern,

A.

^

DAYTON, Ohio — McDonald &
Company has opened an office in

against the possible benefits to be

the

«

was

Hotel

Fred

-

as

less

will be formed

•

of

Street

been

Fund

Secretary-Treasurer.

bad forecast.

-(3) The cost of making the
forecast and the amount of work

eral

securities

RICE

fice

a

Broad¬

...

Officers

fairly accurate forecasts. Nothingdestroys confidence like consist¬
ently bad forecasts, or for that

'.Usually*

a

Co.

Kaye

Wall Street Option

LAKE, Wis.—Jamieson &
Company has opened a branch of¬

be

in

engage

President

con¬

is lessened.

should

&

North

222

banks

have

as

governments and other high-grade
investments during the downturn,
enabled them to maintain earnings
sonnel
and numerous other
at a favorable level.
Now, with
charges that they will find it hard
rates on the firming side, and the
to keep within bounds.
economy on the upgrade, this de¬
So it is that this new banking
partment visions new highs in
institution will not cater to the
operating
earnings.
True; loan
man-in-the-street, but rather to volume since Jan.
1, last, has con¬
the large corporations and insti¬
tracted
about
a
quarter billion
tutions.
with the large New York banl:3,
A
%
#
t\i
but for one thing this has been
On

,?(2) This factor may be obvious,
but the method should result in

.

to

at

Irving K.
have

Kaye

Babson

offices

such

will

re¬

"No Time for Bearishness

name

j(l) Operating executives should

involved

the

formed

—

conditions

wholesalers

under

recession

rates

interest

see

trouble meeting it than will those
banks that have huge branch per¬

Form Babson & Kaye
YONKERS, N. Y.
Babson
and
Philip

Meyer

—

Park

be able to understand the meth¬

one

cession

the

the

under

1.24

low overhead is that

(Special to The Financial Chronicle)

depends

matter

Williamette

fir™ name of J- H* Ayres & Co-

way,

ods that should be used, of course,

them

East

Lightner Co.

OAKLAND, Calif.'
Lightner is engaging in

fidence in

H. Ayres is conducting a
securities business from offices at

business.

Forms

otherwise

name

Carroll

Mr.

se¬

losses.

Selecting the Method

used,

James

C.

been associated with P. J. Gruber

Just which of the several meth¬

ods

i;;.

a

recent

The

1.14

____

_____

Another facet to this matter of

COLORADO SPRINGS, Colo.-

Carroll is engaging in a securities
business from offices at 4 Huem-

static, and the forecaster must

be

...

Guaranty

J. H. Ayres Co. Opens

920

past trends may be good indi¬
cators of future ones, business is
not

Morgan ui

$43,000,000 anci net in¬
$1,459,000, equivalent to $1.75
share of combined Class A and

so.

goes

in

revenues

than

MDIA, PAKISTAN, CEYLON, BURMA, KENYA,
TANGANYIKA, ZANZIBAR, UGANDA,
ADEN, SOMALILAND

PROTECTORATE,

NORTHERN AND SOUTHERN RHODESIA.

Telephone:

BArclay 7-3500
NY 1-1248-49

Bell Teletype

Specialists

Bank Stocks

Financial Chronicle

The Commercial and

24

offensive

nomic

Continued jrom page

5

"a

and I quote:
economic

is,

the

of

form

new

competition between the two sys¬

The Challenge of Soviet
Economic Expansion
between 8 and

rate has averaged,

during this time. Over the
same period, our own average an¬
nual increase, both in Gross Na¬
tional Product and in industrial
9%

production, has been about 3%. In
1957, we estimate the Soviet Gross
National Product to have been
$175 billion—roughly 40%
of our own. Soviet gross indus¬

changes which might be brought
about in the world if the Soviets
catching up signifi¬

succeeded

in

cantly

our

belief

a

lead and the mere
to become widespread

were

USSR

the

that

by

on

would

surpass us

certain future date.

trial
was

production in the same year
about $65 billion, also roughly

40% of ours.

employed by So¬
to raise their econ¬

The methods

viet

leaders

Answer

The answer is

simple and within

We must find ways of
substantially increasing our rate
of economic growth, while at the
same
time avoiding the perils of
our

power.

inflation.

squeezed an overwhelmingly
agrarian population to provide the
state with the resources for an un-

precedentedly high rate of invest¬
ment which was concentrated in
heavy industry.

The ruthlessness
accomplished

with which this was
was

made

only

possible

by

re¬

shaping Soviet society into a to¬
talitarian mold.
The state owns
all land and the means of produc¬
tion, and controls the labor force.
State
forces

planning supplants market
based on demands of the

military, political and eco¬
nomic,
but profoundly psycho¬
logical as well.
Let us briefly
examine some of its major inter¬
only

national

First,

implications:
and

obviously, the

most

planned

of

achievement

Soviet

goals would result in a further ex¬
pansion of the economic base of
Soviet

military

power.

Already,

despite the fact the Soviet output
is only 40% of our own, Soviet
military expenditures on an abso¬
lute basis would appear to be at

whose interests are least as large as ours. The Soviet
completely subjugated to the system's ability to ruthlessly mo¬
achievement of Communist goals. bilize available resources for na¬
The real power behind the state is tional
policy purposes ensures that
the militant, elite Communist as the Soviet productive base in¬
Party, which wields the levers of creases, so will the magnitude of
consumer,

power.

more

sue

The

of

unveiling

the

Soviet

Seven Year Plan has made it clear

that

the

future

economic devel¬

opment of the Soviet Union will
continue along the same lines. The
consumer

will

continue

be

to

threat—en¬

military

Soviet

the

abling communist leaders to pur¬

Short-Changing the Consumer

short-changed in favor of high in¬
vestment in heavy industry. The

aggressive foreign poli¬

cies.

Second,

Soviet

image of the Soviet sys¬
blueprint lor the
by
the
less-developed countries of
Asia, Africa, the Middle East and
an

tem

the magic

as

achievement of rapid progress

goals proclaimed by Soviet lead¬
ers
envisage the increase of in¬ Latin America.
We should not
dustrial output by 80% by 1965.
underestimate the appeal which
Annual steel production is to be
such an image may have on men
pushed close to 90 million tons by of influence in the underdevel¬
the end of the plan—an increase,
oped countries who are desper¬
if accomplished, of some 35 mil¬
ately seeking to lead their people
lion tons. Corresponding increases
into the Twentieth Century.
are planned for other selected in¬
Actually, the Soviet experience
dustries which spell national
is not a good example for the un¬
power.
While these goals repre¬
derdeveloped countries. Condi¬
sent a slight decrease from recent
tions in Soviet Russia forty years
annual growth rates, the pro¬
ago
were
quite different from
jected expansion nevertheless is
those in most of the underdevel¬
very impressive.
oped countries today. Pre-revoWhen they proclaimed their
lutionary Russia, although a back¬
newest plan, the Soviet leaders
ward country in many respects by
tied its goals to the slogan of
Western
standards, had already
"overtaking and surpassing" the achieved a rapid rate of economic
United States. This goal, which is
growth. It ranked fifth among the
old

the Soviet state, is

as

now

being dinned into the Soviet peo¬
ple day and night by every tech¬
nique known to mass indoctrina¬
tion.
The Future Economic

Race

It is not my purpose to indulge
in a numbers game here today. I
will simply state that there is no

possibility of the Soviet Union
outstripping the United States in
industrial production by 1970, and
as for outstripping us in per
capita
production by the same date, this
is nothing but a political smoke
screen designed to hide from the
Soviet consumer the way in which
he is being shortchanged. But it is
Undeniable that
omy

the Soviet

has been growing at

rate than

a

faster

in recent years.
doubt that if we

our own

There is also

project

econ¬

our

no

own

level of present

growth

at

the

performance, the

Soviets will continue to make sub¬
stantial gains in their self-pro¬

claimed economic
This

is

race

with

industrialized
world

and

countries

the

of

definitely passed

had

us.

sobering thought. To
begin to appreciate its implica¬
tions, one need only speculate on

economic offensive is

carrying

World.

Thursday, May 14, 1959

.

.

downfall

West.

Soviet

the

of

Western

that

eventual

for

opportunities
Soviet

drives

the

in

newly-emerging areas in 1954, as
part of a general campaign to
establish the Soviet

"presence" in

vulnerable

most

der Communism.

In

some

of these

countries, highly organized Com¬
munist Parties and their front

target coun¬

tries. Since

then, the Soviet Union
lias extended some $2*4 billion
in military and economic develop¬
ment credits
$1, billion during
last year alone. The number of
—

with

Soviet

doubled

has

them

beginning of the offen¬

sive.

Soviet

Techniques

The techniques

employed by the

Soviets include low interest rates,

repayment of loans in commodi¬

ties, construction of projects which
have a high visual and psycho¬
logical impact, speedy negotiation
of
agreements, long-term trade
commitments, and incessant
propaganda
in which domestic
Communists and "fronts" play a
crucial
role.
By these devices,
Moscow seeks to hammer home to

or¬

Soviet Union

not

only possesses
a
supposedly superior economic
system, but is the "selfless friend"
of newly-developing peoples and
stands ready to extend economic
and military assistance "without
strings."

for

country

a

upon

becomes

large share of its trade or
development program, the
"strings" become very apparent
and
are
manipulated to serve
a

Communist

Soviets

The

ends.

not hesitate

do

to employ

Finally, increased Soviet
capacity will enable

nomic

has

a.

Soviet

that

finds

soon

truculent bear

very

by

short-term

objectives in
the underdeveloped countries can
be summed
up
as
a
drive for
"identification"

with

economic weapons alone. But the
of

use

large

economic

is

scale

with

weapons

on

a

"indispensable

an

the

The

step closer and

writer

put

it,

the

current

eco¬

advancement.

Two-Stage Revolution

Identification is only the short-

underdeveloped

Soviet

which is deeply concerned

economic

achieved economic predominance.
One could bring this thought one

one

of

directed at em¬
phasizing Communist - inspired
domestic
programs
in
under¬
developed areas in an effort to
enhance the role and prestige of
Communist groups in these coun¬
tries. This strategy also involves
is

strategy

the

objective.
have

fact

made

that

identification
Communist

the
is

forces

Communist
no

secret

of

of
strengthen
operating

to

countries of the
dependent.

underdeveloped
World

are

so

attacks

nationalist

on

by

forces

Communists

local

purpose

purchases.
"

they

as

actually

Soviet leaders

the

Do

to finance the growth
of the industrial machine of a
hostile
Communist Party whose
leader
has threatened
to "bury
expect

us

us"?

now

Meeting the Challenge
Now,

meeting the Soviet chal¬

of

task

to the underdeveloped
complex

as

In considering the

areas:

these
countries,
we
lose sight of the fact
accomplishment of
Communist designs will
depend
much
less
upon
the volume of
in

lenge

should

never

that the

than

trade

and

aid

selves.

Soviet

These, then, are the main ele¬
ments
of
the
Soviet economic
offensive.
I
turn
now
to
the

the political

posture which the United States
should assume
in meeting this

is fundamental.

mounting challenge. WThat should
be the character of our own eco¬
nomic relations with this growing

Communist power will flow wher¬
ever
there
is real or apparent

power, whose leaders are holding
out such golden prospects of ex¬

Soviet challenge must

panded trade with us?
First, let me state unequivocally
that
the
United
States
would
welcome an expansion of peaceful,
two-way trade with the Soviet
Eisenhower

President

Union.

letter proposing
grandiose increase in trade be¬

well-publicized
a

tween

our

During

countries.

two

"Unofficial"

his

visit

to

this

s

country earlier this year, I gave
Mr. Mikoyan similar assurances—
did

every

official

American

peaceful
trade
been the

welcome

We

has

it

because

always

of your government to
promote
this
country's foreign
cerely

because

and

But

sin¬

we

believe
that
trade
is
beneficial.
we are not
sanguine as to

prospects for the expansion
satisfactory
and
continuing

the
of

relations.

trade

stacles

ob¬
inherent in

The

these

to

major

are

philosophy and organi¬

zation for trade.

Possibilities

Experience has taught

We have only to

Our

weakness.

This

that

us

the

to

answer

be to help

the

peoples of the newly-develop¬
nations
to
realize
their
potential for economic progress
ing

institutions.

free

under

in

steadfast

be

building

We must

will

vancement.

in

goal

ad¬

for
to

achieve

ways:

through

seek

We

their

find

opportunities

greatest

of

purpose

and expanding
economy
in which

countries

these

this

our

sound

a

World

Free

two

international economic and finan¬

and programs in

institutions

cial

which

all

World

Free

countries

collaborate, and through our own

principally

program,

those

con¬

Program and the Reciprocal Trade

Agreements Act.
In

to

pursuing these -twin
goal, we must:

Trade

recall the ex¬

paths

our

Continue, without any in¬
for lack of adequate
resources, the vigorous operations
(1)

terruption
of

own

our

Loan

Fund,

flexible
a

very

new

Development

which

provides

of financing

source

special

hope

to

a

and

the less

developed nations in building the
basic

productive
facilities
for economic growth.

and

needed

East-West

of

countries

and of the entire Free World.

purpose

commerce

upon

and economic health

of the newly-developing

ducted under the Mutual Security

with whom he spoke.

the tail.

eco¬

penetrate
the
areas
through
As

~

Communist

that

leaders

the Soviet

Soviet Union

leaders

aid.

pronouncements

public

Soviet

the

term

and

There is increasing evidence in

the

mutually

element of this concerted effort in

trade

strategy:

Leninist

of

blackmail
and pressure by deliberately turn¬
ing off their trade or cancelling
their development projects.
Any
nation which permits its economy
to become heavily dependent on
it

for

ripe

using nationalism to oust Western
influences
and
then eliminating

the Soviet Union

its

of

techniques also tend to
established trade chan¬
the movement of basic

barter

disrupt

once

be

to

as

Once

dependent

an area

work unceasingly to
this susceptibility. The
a major weap¬
in their propaganda arsenal.

to

—and

underlevelopecl,
made this clear in his reply to
cynical theme that the Soviet Premie r Khrushchev's

the

areas

as

Free

attempt to seize power for them¬

trade

tradi¬

exporters

Malaya, Indonesia, and
The monopoly's use of

Bolivia,
Canada.

nels

World

Free

deep-seated nationalist aspirations

the

since the

tional

already

such

to

commodities upon which friendly

tries has increased to 4,000.

ganizations

efforts

strong foothold has been secured

injurious

through agitation of anti-Westernism and hypocritical support of

Soviet technicians in these coun¬

prey upon

on

a

its V

launched

Union

trade

and

the

veloped countries—will undergo
a
"two-stage" revolution.
Once

the nationalists;

take-over.
The

de¬

nationalist groups in the less

aluminum, have

and

proved

example

underdeveloped nations offer the
best

Communist

tin

the

countries,

calculate

leaders

indus¬

more

movements"
term for the

liberation

"national

—the

countries. To
jargon, the

the

Blocked,

however, by the unity and the
continuing political, economic and

their

on

the

of

Communist

conditions are judged
Furthermore,
both
Premier
Mr,
Mikoyan
in a given country— Khrushchev and
the native Communists will in¬ have frankly said that an expan¬
augurate
the
second
stage
by sion of Soviet imports in the next
openly challenging the leadership several years is predicated upon
of
local
nationalist
forces
on the extent to which the West can
domestic issues. This is a classic be persuaded to finance Soviet

ultimate objective of

The

Soviet leaders continues to be the

Communists to expand and extend

speculate

against us

aspects to the
most vulnerable sector of the Free

the nature of-a world in which the
Soviet
Union
had
actually




of

means

a

struggle

the

economic

its

in

popular as¬
the "take-off" point to self-sus¬
pirations and the more militant
tained growth. It had a small, but
nationalist forces—so long as they
highly competent corps of admin¬ are not opposed to Soviet ob¬
istrators, scientists and techni¬ jectives. This drive is accompanied
cians.
The ratio of available
by opportunistic Communist agi¬
resources to population was rela¬
tation calculated to inflame local
tively high.
The Soviet Union passions, exploit latent tensions
never has faced the most pressing
between these countries and the
problem of many of the present more advanced nations of the
underdeveloped countries: the West, and to maintain a continu¬
crushing burden of an exploding
ing situation of crisis. Economic
population.
arms are only part of their arsenal
However, despite the inappli¬ which includes military, political,
cability of the Soviet experience diplomatic, cultural and propa¬
to their own problems, the less de¬
ganda weapons. Communist pene¬
veloped countries cannot help but tration of the Middle East, for
be profoundly affected by the ex¬
example—of which Iraq is the
ample of purposeful and dramatic most recent and most dramatic
increases in output achieved un¬
illustration—was not achieved by

Seven-Year Plan is

a

ing a
majority of the human
race." In other words, the Soviet

target

the

within

employ

the peoples of the

economic

suc¬
cess
is
of
vital
importance to
international Communism in pro¬

jecting

countries hav¬

in the territories of

aid

from the relative

which takes place

one

trialized

As experts in information tech¬
backward¬
ness of post-revolutionary days to
niques, you will readily appreci¬
ate that the impact of continuing
its present level were starkly and
terrifyingly simple; they brutally Soviet economic expansion is not
omy

but

tems,

social health

Simple

The

about

as

.

(2212)

(2) Continue our program of
military assistance and defense

perience of the Thirties: Once the support, to provide a shield of
security from outside aggression
purposes of the Soviet procure¬
ment
campaign were achieved, and internal subversion behind
which
the
governments of the
their
imports
from
the
West
dropped from
some
3.8 billion newly-developing countries can
work at the primary task of im¬
rubles
in
1931
to
841
million
rubles in 1935. Our own sales to proving the well-being of their
the Soviet Union plummeted from peoples.
around

$12

$100

million

in 1931 to
The Soviet

million
in 1932.

Union in its trade with the West
is

today

motivated

by the same

autarchic considerations
Thirties.

This

is

borne

in the

as

most

out

(3) Continue to work with the
Bank for
Recon¬

International

struction

Development

and

and

the International Monetary Fund,
which

are

resources.

now

expanding

their

These institutions have

key position in
forcefully by the fact that the
second ranking industrial power the structure of Free World eco¬
of the world exports to the West nomic cooperation by mobilizing
come

about

the

level

of

Denmark

—

the

to occupy a

resources

of

many

countries

of sound economic
that
these
exports
are
more development and protection
characteristic of those you would against serious temporary drains
expect from an underdeveloped on foreign exchange.
or
semi-developed country than
(4) Continue the active and
from an industrial giant.
time-tested lending operations of
-Soviet exports are, in the main, the Export-Import Bank.
.
bulk primary products and semi¬
(5) Intensify our participation
finished goods which permit the in programs of technical coopera¬
state trading monopoly to raise tion, to help provide the basic
the foreign exchange to pay for management and technical skills
imports with the least possible which are lacking in all of the
1
^dependence on the world market. underdeveloped countries.
The price-cutting tactics to which
(6) Take a leading part in re¬
the Soviet state trade monopoly ducing
barriers to world trade
has resorted, in order to fulfill through
our
own example and
its export plans in such cases as through such multilateral instruroughly

$1

billion

a

year

—

and

for the purpose

.

.

.

Volume 189

ments

Number 5846

General

the

as

.

.

.

The Commercial avd Financial Chronicle

25

(2213)

Agreement

Tariffs and Trade.

on

(7) Continue to extend sym¬
pathetic and open-minded consid¬
eration to the problems which the
less developed nations face as a
result of price fluctuations in their
raw material exports. Such price
fluctuations can, and have, wiped
out many of the benefits to the
less
developed
countries
from
Western

(8)

and

strengthen

and

private enterprise in order to
put the unmatched financial and
management resources of Ameri¬

private business to work on a
mutually profitable basis in the
newly-emerging nations.

can

Finally, I cannot emphasize too
strongly that our own economic
health and growth is the single
most
important element in our
posture vis-a-vis Communist eco¬
nomic expansion.
We

and must find ways to

can

increase

our

economic prog¬

own

The present

rate'of growth
in our economy is simply not good
enough. We must devote our very
best brains to finding ways of
stimulating growth while main¬
taining the basic stability and
value of our currency. Unless we
do

in

so

more

a

purposeful fash¬

shall weaken our capacity
to provide the leadership which
the Free World so urgently ex¬
ion,

we

pects of

us.

By accelerating our domestic
growth we shall make important
strides toward meeting the Soviet

challenge in the underdeveloped
and largely uncommitteed nations.
Because of our intimate links with
them, American economic growth
will inevitably react favorably on
their development.
benefits of

our

tional

Security Traders Association, Inc. has been announced by
Thorsen, President.
Co., New Orleans
La., past President of NSTA, was named Chairman of the com¬
mittee, and Parks B. Pedrick, Jr. of Howard,
Weil, Labouisse, Friedrichs & Co., New Or¬
leans, Vice-Chairman.
The
Municipal Committee is composed
of NSTA members throughout the country who
have the responsibility of watching national
and local legislation which may affect mu¬
nicipal securities traded on the Over-the-

Lester J.

William Perry Brown of Newman, Brown &

Counter

state

Market.

Over

local

and

billion worth of
securities are

$18

government

traded

annually in this market, to finance
schools, parks, roads, hospitals, slum clearance,
ports, buildings, bridges, tunnels, sewers, etc.
Legislation and activities affecting such mu¬
nicipal bonds are reported by the Municipal
Committee

to

the

NSTA

for

members

of

rate, there is one
good in such mar¬
kets. Don't encourage your good
retail clients to step in and put

are:

Haley, Harkness & Hill, Inc., Boston, Mass.; John M. Heimerdinger, Jr., Walter, Woody & Heimerdinger, Cincinnati, Ohio;
Taylor B. Almon, Rauscher, Pierce & Co., Inc., Dallas, Texas;
Frederick C. Beil, Jr., Beil & Hough, Inc., St. Petersburg, Fla.;
J. W. Means, First Southeastern Co., Atlanta, Ga.; Russell M.
Ergood, Jr., Stroud & Co., Inc., Philadelphia, Pa.; H. Frank Burkholder, Equitable Securities Corp., Nashville, Tenn.; Milton E.
Reiner, Blyth & Co., Inc., San Francisco, Calif.; Ed Vallely, John
Nuveen & Co., Chicago, 111.; James Musson, Phelps, Fenn & Co.,
New York, N. Y.; Alplionse J. Grun, First National Bank of Min¬
neapolis, Minneapolis, Minn.; and Earl W. Godbold, DempseyTegeler & Co., St. Louis, Mo.

channels to all nations which par¬

in the Free World
multilateral economic system.

ticipate with

us

A Powerful

Example

TO

that

A

vinced automated

It will serve to deflate the

abroad.

clients

importantly, it will demon¬
strate to the peoples of the newlyemerging nations that their aspir¬
ations can best be achieved in a
Most

free society.

What, after all, is our national

promoting

in

purpose

increased

trade, in expanding private Amer¬
ican investment abroad,
in ex¬

and financial
assistance through our Mutual Se¬
technical

tending

curity Program?
It is a broad purpose and is not

Chronicle:

During

since World
War
II
American
industry has
been in a hand-to-mouth psychol¬
ogy as far as plant-building and
the

modernization
The

years

are

concerned.

situation

has

recently
one of forward looking
planning. According to their

changed to
and

12th

annual

Spending

survey

Plans

as

of

Business

reported

by

solely confined to furthering eco¬
nomic development as such. For

McGraw-Hill almost 7 billion dol¬

productive capacity and techno¬
logical skills do not of themselves
bring about the full development
of a free civilization in which the

manufacturing companies planned

individual

can

realize his

poten¬

lars

of

the

to spend

making

10-12

billion

that

in 1959 will be used for

making their factories

effi¬

more

cient

by use of cost-cutting and
labor
saving
devices
including
-

of

on

the

take

situation

is

in

Our interest lies also in the de¬

gard for human decency. We seek
to accomplish this by helping the
new
nations to advance toward
and

economic

modern

political

while, at the same time,
maintaining their independence
and assuring the possibility of an
status

evolution

which

safeguards

the

liberty of the individual.

in

a

world

man can

ruled

by law where

live in peace with

justice.

Walter W, Blair
Walter

W.

Blair

passed

away

May 4 at.the age of 76 following a
long illness. Prior to his retire¬
ment he had been a Vice-Presi¬
dent of D.

H. Blair & Co., Inc.




duced which would create

a

much

larger demand for same and this

greatly
expanded
sales and scope of operations.
mean

ser¬

us say

the

shoe-repairing
business, TV or
service, sales of all kinds,

could

not

fill

to

off

slumped

bidding

From 60 to 65
was

advanced

in

the bidding has become
aggressive. However, in the
60 level the institutional

price
more

55

has

stock

this

markedly.

I believe the stock

marked up on

small volume.

As May 7 was the first market
session in months where a sizable

decline in stock prices took place
on
the exchanges the "Counter"
account¬ market
naturally reflected this
myriad of uneasiness.
This bank stock was
other lines.
offered at 66 in the morning and
Naturally those companies who
offerings became more general
concentrate on automatic machin¬
at the 63 level by late afternoon.
ery will benefit most in the end.
The stock that is in the hands of
Their workers will be better paid
professional traders and in posi¬
than those of competing compa¬
tion accounts
is no doubt now

medical, dental, legal
ing professions or a

nies in

the

same

or

business and

D.

F. Bernheimer &

42

in

Broadway

New York

Co., Inc.

4, N. Y.

Coast Exch. Member
The

election of Claude M. Mc¬

Donald

representing the firm of
McDonald, Evans & Co. to mem¬
bership in the Pacific Coast Stock
Exchange through the purchase of
a membership in the Los Angeles
Division

has

been

Thomas P. Phelan,

Aiding the Unemployed

I

of

radio

ably opposed

would

this way, we move

closer to
our national goal of living pros¬
perously among friendly nations
In

any new method of
doing a job in the tried and true
way for fear that machines would
displace personnel. To a certain
degree I think that fear was jus¬
tified. However, because of the
increased output due to mass pro¬
duction, the price of the item
made was generally able to be re¬

procedures

counts in the low and middle 40's.

they will be able to show
growth. We need automation.
This will have a great influence greater profits and dividends for
only recall that Soviet Russia,
their stockholders.
Communist China, and other bloc on labor and labor unions. During
GERALD G. BERNHEIMER
nations possess these material as¬ the past centuries the guilds and
Chief Investment Analyst
sets in varying degrees.
labor unions have almost invari¬
velopment of free political insti¬
tutions, of respect for law, of re¬

that

announced

by

Division Presi¬

looking for
have

a

some

place to go. If you
customers
that re¬

bid

will not
for you un¬
less you help them obtain good
performance from their selections
manship

in

the

world

keep your customers

and

their

also

heard

the

dent.

investment

timing.

argument that
should be

I

have
good
bought

a

the money. Up to
point this is so, but your cus¬
tomer won't appreciate your lack
of skill and market judgment if

Evans & Co., with
office
in
Kansas
City, Missouri, maintains branches
in Wichita and Pittsburg, Kansas,

when you have
a

and St.

you

whom

has

the

to take

pecially

for

most

presently

government will have
of until industry (es¬
new
industries now in

care

McDonald,

was

at

Joseph, Missouri. The firm
organized in 1935 and

first

been in continuous operation

the

same

address

City since that time.

in

I have the suspicion
paid
high flying stocks may
not be duplicated for some time
to come. Why not play it safe.
By protecting your customer'sinterest you
protect your own.
You may not be able to outguess
the market but you don't have tobe a "patsy" either.

recent days.

that

some

of the recent prices

for certain

13

Cooperatives Banks

To Sell Debentures
A

public

of $130 million;

issue

collateral trust debentures of tha
13 Banks for Cooperatives is being;

arranged for sale today (May 14>

according to John T. Knox, fiscaJ
agent of the Banks.
These
at

will

debentures

will

and

par

sold

be

six.

in

mature

The interest rate will be

months.

the offering date.
Proceeds from the sale of this issuer

announced

on

will be

used

minion

of

to redeem the

3%%

$97^

debentures

ma¬

turing June 1, and for lending
operations. The joint and several
obligations of the 13 banks, this*

Kansas

assistance

the

of

nationwide

a

of security dealers.

group

Rose Branch in Brunswick
BRUNSWICK,
Co.

Rose &

has

Ga.—R euben
opened a branch,

office at 502 Gloucester Street un¬
the

der

of

management

James

Wentz and Guida G. Odom.

Opens Boston Office
BOSTON,
Cohu

Mass.

—

Winslow,

Stetson Incorporated has

&

branch office at 79 Milk:
the management of
Richard B. Doyle.
opened
Street

a

under

Trachtman Statistical Mgr.
For Steiner, Rouse
Jack

Trachtman

Co.

has

been

ap¬

you

headquarters

future

try to buy that stock that got
from you during the past

away

few months just because it is now
a few points off from its high of

pointed manager of the statistical
63 in a situation
department of Steiner, Rouse &
similar to this, it would be my
Co., 19 Rector Street, New York
guess that you could do a better
City, members of the New York
job for them by waiting to see Stock
Exchange.
which way the wind is blowing,
rather than to step in here and
Western States Inv. Co.
guess
that you have a bargain.
The odds would be against it.
PASADENA, Calif.—Cooper P.
Matthews is engaging in a securi¬
Customer Expects Timing to
ties business from offices at 56
Be Favorable
South Lake Street under the firm
I believe that the best sales¬ name of Western States Invest¬
cently

employed workers in manufac¬
turing seems assured and raises in
basic pay would seem reasonable.
Exactly the opposite is the situ¬
ation for the unemployed person

The

and

the scarcity I of the
new issue
of debentures will ba
Substantial purchases,
offered through Mr. Knox, with
however, were made for some ac¬

addition

tial for spiritual

50's

the

because

vice industries will not be greatly
affected because automation can

hardly take hold in let

their

scale

can

offerings.

drawing

of the

sound

very closely.
I have had
institutional orders for this stock

up

that most

to

as

selling

the slack
unemployment.
One good feature of the entire
can

that

accounts

are

this

During the past four months the
stock of a very sound commercial
bank
in
a
growing area has
moved steadily upward from 39
to a recent high of 65. Traded in
the Over-the-Counter Market, I
have
followed
the
buying and

As

boards)

of

is taking
the play from investor and pro¬
fessional alike.
Here is just one
instance of what we have in mind.

companies will benefit most in the end, and

Editor, Commercial and Financial the

intention

uninformed buying

and

employees and investors will receive greater wages,
profits and dividends than non-automated competing companies.

resents the "wave of the future."

of Judgment

the

when certain stocks become toppy

their

Soviet line that Communism rep¬

not

give trading advice to
salesmen or investors, but it is
never-the-less
important
that
salesmen of securities guide their

Investment securities analyst explains why he believes a great
wave of prosperity is now
underway. Mr. Bernheimer is con¬

political and psychological effect

Matter

is

column to

THE EDITOR:

example of purposeful eco¬
nomic growth under free institu¬
tions will also have a far-reaching

else's

someone

particular security.

It

Great Wave of Prosperity
Seen Under Way by Analyst

The

under

overpriced
stocks
just because
they have declined a few points
from a recent high, and you hap¬
pen to have an indication from
your
customers that they have
had an interest at a lower level in

Perry Brown

George M. Wood, Jr., George M. Wood & Co., Montgomery, Ala.;
Elmer G. Longwell, Boettcher & Co., Denver, Colo.; David A.

LETTER

any

bucket

a

appropriate

committee

At

guess.

Wm,

the

months

rule that holds

recommendations and action.
Other

few

stocks
have purchases, but most investors arebeen
marked
up
vigorously in from one hundred to a few hun¬
price to levels that are beginning dred share buyers and the aver¬
to look suspiciously like someone age salesman does business pri¬
is going to latch onto them and marily with Middle Bracket Joe
wish
they hadnt'.
It could be not High Bracket Moe.
There is a true saying in the
something like the last man on
the totem pole for the fellow that market place that there is more
(10%
to
gets caught.
As this column is distribution going on
being prepared (Thursday May 20%) from a stock's high than
7) it may be that the long over¬ when it sold at the top of its price
due shakeout of certain high-fly¬ range.
At any rate, my point for
ing market favorities that are this week is simply this—it is
selling on a scarcity basis, and better to step aside and let prices
also a "fear of inflation psychol¬ settle, and the dust clear away,
ogy," is nearer than we might before you too eagerly jump in

Municipal Committee of the Na¬

Unlike the ef¬

expansion, the
growth and pros¬

are
transmitted through
trade and private capital

perity
normal

1959

During the past
certain
"glamour"

Soviet

of

fects

By JOHN DUTTON

Don't Be A Bailout

Appointment of the

collaboration between government

ress.

Notes

NSTA 1959 MUNICIPAL COMMITTEE

assistance.

economic

Promote

Securities Salesman's Corner

NSTA

put his funds into a stock 10
points or more above where he
could
eventually buy it a few
weeks or a month after you have
made the

purchase for him. There

ment Company.

;

_

-

Brandenburg to Admit
Brandenburg & Co., 100 Broad¬
way,

New York City, members of
Exchange, on

the New York Stock

admit Gerald M.
partnership. Mr.
Bregman will become a member
of the New York Stock Exchange.

May 7th will
Bregma n
to

Samuel Englander
Samuel Englander,

President at

Englander & Co., Inc., New

City, passed away on May 1.

York

26

The Commercial and Financial Chronicle

(2214)

increased 21 cents to $2.12

year

5.3% in the previous year, indicating the need for

pared with

increase in

further

By OWEN ELY

rates.

'

-

sells at nearly 19

Niagara Mohawk Power Corp.

price around

40,

the stock yields

times 1958 share earnings.

V,

r

States, its 1956 output almost equaling

It

revenues.

serves an area

Buffalo, including the large

industries

the

in

include

area

aluminum

textiles, food products, etc.

and paper,

There

and

other

Continued

from first

strong,-is now weakening.-*. r?.»'.
Then, too, I believe our people
confused by the fact that there
are
those among uS who argue

page

;

;

r?

.are

Tell the

People About Their
Stake in Dollai's Integrity

metal

also important

are

responsibility that has charac¬
our
society, and made it

terized

upstate cities with the exception of Rochester.

products, automobiles, cement, chemicals, electric equipment, pulp

<

degree of inflation: not

record of the past, but
fear that perhaps, indi-. .vidually and collectively, the sense

,

by

in New York State with a population

of 3,100,000 extending from Albany to

then,

reasons,

people have come to an¬
a

vague

a

of

Edison, the largest utility as measured

that of Consolidated

a

the

only

and

Niagara Mohawk Power is one of the largest distributors of

electricity in the United

the

are

,

our

ticipate

'

4(2%

These

that

a

-

.

current

the

At

What

great challenge this is to America.

only about 5.6% on average investment last
(including tax savings from accelerated depreciation), com-r

The company earned

Utility Securities

Thursday, May 14, 1959

.

.

Greece ceased to be free.

(which, however, would be reduced to

$1.96 if the convertible debenture 4%s should be fully converted).

Public

.

'A*:-*-fir 'iV':'H

:•

' vdi.

V.' 'V-S•••

""that

bit

little

a

of

inflation

may

good thing:

Just a
ago I was at the Reserve;
City Bankers' meeting at Boca
Raton, where we listened'to both
actually-be

a

month

ifrV?

prising that the most recent con¬ —they can't be fashioned out of Dr. Sumner Slichter and Dr. Wilmere pieces of paper..
helm Vocke, former head of the
sumer survey, by the Federal Re¬
German
Central Bark.
It was
serve, showed that more than 60%
Non-Defense Spending Rise %
of
our
people look for higher
quite a session! Dr. Slichter, of
Likewise
the
performance
of course, presented his well-known
prices in the coming year. That,
incidentally, compares with a fig¬ government in the past several argument in support of creeping
years has hardly encouraged those
ure of
15% in 1954.
inflation, while Dr. Vocke pic¬
What lies in back of this change wlio would seek fiscal stability. tured for us^ in detail, the terrible
in attitude?
What are the possible Here we are, in a year of mount-" consequences *of the German in¬
consequences
if nothing is done ing prosperity, running a deficit flation—the suffering, the inequi¬
And in the ties, and the moral blight it placed
about
it?
And
what
can
we of close to $12 billion.
do to help alter the picture? These coming year, despite the/valiant on Germany.
/ •'
are
all questions about which I efforts of the President, ;we are
should like to deal with in this in real danger of continuing to Hits Creeping Inflation Argument
operate in the red to some .extent v I must admit it is hard forme to
paper.
—in a period, incidentally,' when
appreciate Dr. Slichter's argument:
Deceptive Breathing Spellc
business volume is likely to reach" why
inflation at a rate of 3%:
I believe a number of develop-, an all-time peak.
each year apparently is all right,
.

Revenues are about 80%

farming and resort areas.

electric and

Industrial sales account for about 36 %> of electric rev¬

20% gas.

residential and rural 32%, commercial 18%, etc.

enues,

tial amount of power is sold to

A substan¬

other utilities and to municipalities;

nearly half of this power went to Consolidated Edison last year,
and New York State E. & G. also took

a

substantial amount.

Despite loss of industrial business in the last two years, the
company has continued its heavy expansion program, spending
over $100 million annually in 1957, 1958 and also in 1959.
This and
related information was set forth by President Earle J. Machoid in
the course of a recent address before a group in Syracuse, N. Y.
About 62% of the energy produced in the company's own
plants is from steam and the remainder from hydro. The company
recently added two 210,000 kw. steam units at its Huntley Station
at Buffalo, bringing the plant's total capacity to over one million
kilowatts, and is completing two more 210,000 kw. units at Dun¬

The two units at

kirk.

Huntley will use only 68/100 of a pound of
coal per kwh. compared with over a pound of coal required by
units built before World War II. This increase in efficiency was
needed to help offset the increased price of coal, which now aver¬
ages about $9.50 per ton compared with only $3.68 in 1940.
The company is also adding some hydro power
and will buy substantial amounts from the New York

of its own,
State Power
Authority. A 17,000 kw. plant is under construction near Utica—
the seventh hydro station built since the war.

Moreover, the

com¬

expects to buy all the power made available by the Power
authority of the State of New York from the St. Lawrence and
Niagara River projects. It has contracted for 115,000 kw. firm
power from the St. Lawrence project plus any extra power avail¬
able; this is distributed to some 400,000 rural and domestic electric
customers in the Central and Eastern divisions, any savings real¬
ized being passed on to customers through credits on their bills.
These credits, which are based on the saving in cost of power from
St. Lawrence as compared with company power, have averaged
1,2 mills per kwh. The difference in costs is due to the fact that

pany

the St. Lawrence project pays no taxes and was
free bonds at

a

financed with tax-

relatively low interest cost.

hawk
since

will

receive

"preference"

nicipalities,

substantial share

a

of

the

The

project's marketing

area.
summer

of

stroyed in a rockslide at Niagara Falls. The output of this plant
largely 25-cycle power used by industrial companies near
Niagara. With a big shortage of this kind of power, the company
to

buy 25-cycle electricity from the Hydro Electric
Ontario, and the cost of such power has probably
averaged much higher than anticipated, due to unfavorable hydro
conditions in Canada and other factors. In order to help the com¬
pany pay for these extra costs, the State Public Service Commis¬
sion granted the company a rate increase of about $6.7 million in
the latter part of 1957. In June,
1958, the company applied for a
further increase of about $10.5 million. There was some
opposition
by industrial customers to this latter increase and the Commission

Commission of

has not yet handed down its decision. Should the requested rate
increase be received in
full, it would be equivalent to about 40c a
share dn the common stock.
It is Understood that the industrial

60-cycle

care

power

of with power

companies will eventually
and that their requirements can then be
to be obtained from the Niagara River

Project of the State Authority.
The

adverse

power from
about

2.4

effect

Canada

is

billion kwh

earnings

on

obvious.

(about

14%

of

having to buy special
the company bought
of its total output) from the

Last

year

Hydro-Electric Power Commission at

a cost of about $9.2 million.
This power thus cost about 3.9 mills
per kwh compared with a cost
of less than a mill for the
company's own hydro power, and 4.8
mills on steam power. It is to be
hoped that the Public Service
Commission will recognize the

handicap thus imposed

and will

on

earnings

grant the requested rate increases.

The company's industrial sales declined from
10.6 billion kwh
in 1956 to 7.9 billion
last year, presumably due to two factors—
the recession in the
heavy industries last year, and some loss of
business

to

the State Authority, which has contracted to sell
blocks of power to aluminum producers and General

substantial
Motors.

Residential

and

commercial

tinued to gain

sales

have,

steadily. Gas sales have made
record, increasing about 58% since 1954.
In
and

1950

the

however,

especially good

an

common

stock

was

completed
distributed to the public. Share
was

following

but

the loss

of

and

war

today's

unavoidable.

was

But

it's the record of recent years that

has

the

hydro plant reduced

two

ensuing

years,

rate

increase

in 1958 equivalent to about 27 cents

earnings in

only $1.91 being reported in 1957.




a

With

the
the

share, earnings

has gone

increase

But

of

outlays

farm

for

that

assistance

we,

by $2.5 billion; aid
by $1
billion; and

can't

We

assistance for housing and public

tion

from 1955 to

welfare

first,

1957 and

even

in the

early stages of the past recession.
Recently we have had a breath¬
ing spell, but even here appear¬
ances can be somewhat deceptive.
overall

indexes

show

no

advance of about 2%.

an

But

the

every

bit

important

as

have

record

been

that have acted

sures

the

to produce

effective control.
more

condu¬

cive to inflation, in my judgment,
than
the persistent tendency of

to outrun gains in produc¬
Here I can do no better

wages

tivity.

than let the facts speak for them¬

selves.
rise

Over the past

in

generally by
billion.

$2

decade the

rates,

less than

no

serious problems today

dency for more and

the

only

farmer
the

are

sole

is the ten¬
of our

the

a

fiscal

our

problem

whole way of life.

do

to

our

domestic

econ¬

has argued that it
to1 have creeping in¬

possible

de¬

I find
There
may have been times in the past
when prices crept ahead without
any acceleration.
But those ^ere
days when people did not expect
inflation;
indeed,
their / actions
were
tempered with a realization
that
a
readjustment
in values
would inevitably occur if prices

to

is

involved here—tied in with it, too„
is

.

generating into a gallop.
this /very hard to accept.

The

small business generally.
than

y

Dr., Slichter
is

transportation, to housing, and to
More

the

flation without such inflation

veteran

subsidies

'

creeping infla¬
compelling reasons:
positive harm that it:

two

position.

spread to busi¬

even

Witness

ness.

the

or

nation, simply can¬

and secondly, the profound
impact it would have on our world-

more

offenders.

a

afford

omy;

truly

people to look to government for
subsidy and relief.
And it isn't
who

for

would

I am afraid that one of our

tendency has
as

pres¬

Two developments, in particu¬
lar, have burned themselves in¬
delibly into the public mind. One
has
been
the
image
of
labor,
strong in its organization and con¬
tinuously pushing wage costs
higher. And the second has been
the performance of government,
with budgets seemingly under no

Nothing has been

veterans

to

as

not afford.--

have increased

provided the most disturbing
evidence; the rise in living costs

We must

vigorously
oppose
the
present
trend of running to Washington
for aid through a new agency or:
.

moved

ahead

too fast.

Today, as

I indicated, the situation is dif¬
governmental bank whenever any
ferent.
Once people begin to ex¬
segment of our economy develops
pect inflation and to act on it,
a
disturbing syqiptom. ; What we
they create the very excesses we
need is more agencies and banks
seek to avoid.
Stock prices are
dedicated to individual initiative
bid up: government bonds get into
and backed by
commence sense.
trouble;'and people rush into real
'.estate.'.1 Even business begins to
Passion f6r Security
make investments too far ahead.
Today, it seems to me, there is Why wait to build a new plant
a growing
passion for security, for when it may cost up 50% more
the sure thing—even to the sacri¬ in a few
years? As a matter of

including
fice of individual freedom.
The
fact, inflation can be much "like
has
averaged
about 5% a year. Productivity, on farm program is a good example. -the use of drugs: it may give you
It started with simple price sup¬ '■a
the other hand, has increased no
great lift' temporarily, but the
ports. Then w<^ found ourselves end result is likely to be severe
more than 3%
a year —- and this
curtailing marketing and, finally, collapse—a prolonged period of
due
largely to the tremendous
Aficl the first thing unemployment while business and
investment
in
machinery
and production.
we
know, the individual hipiself the economy works off the exequipment, which, in the final an¬
has fallen-undfr insidious,, gov¬ cesses.
We can't afford that.
alysis, is chiefly responsible for
ernment control—chained by sub¬ V Nor can we bask in inflation
our greater output per man hour.

fringe

wage

benefits,

»

It's

little wonder then, that man¬

sidies

which

soTne

have

come

to

and still hope to hold our world
impelled to regard as essential to their,-live¬ position. This past year bas been
lihood.
resort to higher prices.
;■ a great one to throw light on some
,f.: 'Cf.
And no
I can't help but be reminded t)f ;- of our more vulnerable spots. For
less significant has been the set¬
ting, the environment in which the lessons-the historians have one thing, we ran a deficit in our
these
changes have occurred: a handed down
ancient balance of payments with other
Some
bargaining process in which one Greece, whose philosophers first countries: of $3.4 billion.
side has enjoyed special benefits set forth the Meal
of personal $2.3 biLlion of this took the form

agements

have been

,

Regarding

conferred by law

—

a

law which

protects and abets job featherbed-

ding,
deed

still

Niagara Mohawk system integration

new

con¬

earnings in that year were $1.96 but in the following year declined
to $1.81. Moderate increases occurred in each of
the four
years,

for non-defense—a total •would have robbed a.large section
$8.5 billion. * During -;of our; population. But even aside
of 20 years ago.
True, much of this time expenditures for foreign from'this, it is clear to me that
this deterioration was due to the aid have
actually been; reduced.; creeping inflation is something
that

it.

the

was

taken

show

dollar is worth lesss than half that-

products, industrial prices exhibit

substantially de¬

convert to

.

statistics

cold

remaining output,

company suffered a very severe loss in
1956 when its big Schoellkopf hydro plant was

forced

can

us

change in wholesale prices in the

The

was

of

past year, but if you take out farm

also expects to serve as a principal
deliver Niagara power to most of the

to

agency

to the dollar.

none

Mo¬

for publicly-owned systems such as mu¬
to one-half the total output of

power

course,

will

company

deficit

First, from which it stems;
I realize it tic -.tells us that 3%?; in 1940 would
be un¬ is fashionable to blame our budget have:: grown ; on a y compounded
aware of what has happened to problems bn the high^cosf of ae— basis to a rate in excess of 5% of
prices. We run into it every time fense and foreign aid.
Over a
But how •the' base • period today.
we
turn around —in the clothes
lifetime, the value of
many of us appreciate that 4n .the: working
we buy, the
cars we run, the re¬ past five years, almost 60%* of the money would be cut in half, and
pairs to the homes we own.
The rise in government expenditures:,inflation, - that
invisible
thief,
with regard

of

co-ops, etc. is limited

the project.
transmission

produce the changed attitudes

The

In addition to the firm power from Niagara River, which
amount to 445,000 kw., probably beginning in 1961, Niagara

Again it isn't only'- the5-fact of but a rate ol' 5% would be down¬
spending, bat. the ' roots' right dangerous. Simple arithme¬

in recent years have acted

ments

to

itself

uneconomic; and in¬
morally
indefensible, and

other

labor

practices

which

interfere with the process of pass¬

ing

on

Most

of

savings
us

to

would

the

consumer.

agree

to

the

desirability for higher wages over
a
period of time.
But improve¬
ments in living standards can only
come out of increased production

freedom

and

-aferel.ation:

in the fend,

state,

one

to ;tbe
historian

•

of

a

was

loss

of gold,

while the. rest

added to liquid balances

and

came short-term investment held in our
than 'they country by foreigners (which now

has said

recent!^:the Greeks

to

security,

want

more

wanted

freedorh, they wanted a
comfortable lifeMid they lost all:

comfcht

security,
When

the

not

to

the

state

give
to

freedom.

to3fhe state, but for
give to them, when

about

$16-billion).

-

More¬

not out Of the woods
this matter yet."
' •

on

*

,

Tough Foreign Competition
The reasons for this

problem in

they wanted most was our balance of payments are
from responsibility, then plex.
They are related in

the freedom
freedom

and

Greejks finally desired

total

over, we are

com¬

part

Number 5846

Volume 189

to the extent of our

mitmentS

.

.

political

The Commercial and Financial Chronicle

.

the American economy has been

of

held\ could ;be

com-

which require

abroad,

(2215)

must pay heed, once
old
economic
laws,

'

seriously i'under-

postwar

Germany.
We
too Shippen Davis of Blair S. Wil¬
again, to the liams & Co.; John M. Young of
proven
by Morgan Stanley & Co., for threedecades of hard experience — in year
terms; ; and William K.

mined. We could see pressure on
the dollar develop, and the necessity for counter-measures which our- relations with the farmer,
we
have experienced in" export none of us would relish—counter- with the worker, and in the man¬
markets.
In 1958 our exports fell measures* which
would pose a agement of government.
Often
by more than $3 billion.
before,
the
American
All of major headache for banks, among
you probably have run up against
othersrr-including loss of deposits, people have faced great chal¬
cases where we have priced purlenges.
Once
they have
been
a severe tightening of credit, and
selves
out
of
important world a
continuing
decline
in bond given all the facts, they have,
markets. Bethlehem Steel at Spar- prices—all pf this would have an never failed to respond to them.
rows Point used to ship a lo^nore
impact on .our world position, in¬ It is up to us, the business com¬
to Latin-America then tHey uo tb- eluding our; defense alliances.
munity, to get out and give our
large

for, military * bases

outlays

and foreign aid.
But tied in also,
has been the growing difficulty

day.

As

:

matter of

a

than half of the barbed Wire

now

being

used in our own country
from abroad. Or, take the
Roger Blough tells, pf the
industrious
Japanese < who
buy is where- the bankers come in.
scrap
metal here iiv the United The problem can't be licked unStates, haul it back to their miRsiess - our people fully understand
in the Orient, manufacture it into what'is at stake—what the
Edward C. Werle has been re¬
nature
finished products and ship it back 0f the
problem is—and then are elected to serve a second one-year
Comes

New York Stock Exch.

story

Elects Officers

the wide Pacific

across

sell

American

to under-

producers by such

wide margins as

$29 a ton on reinfqreing bars. We can hardly com-

This

/

in

problem

same

in our

us
(.

be found

can

machinery, textiles and

other lines.
in

at

comes

ducers

many

And the long

farm

our

decline
story
all this

is

markets

unto' itself.

a

Moreover,

the President

tirijie when foreign pro-

a

willing to act on it. The present
case 0f the budget is a good example. The budget can be balanced,
and
without
sacrificing
anything* vital in the process. But
the President, with the best intentions in the world, can't do the
full job himself.
He needs the
backing of:.the American people
—people, .who grasp the essentials
of the problem, and then let their
Congressmen know they support

term

one

Exchange.
Annual

tion

Western

well.

but

,

Russia

China

as

it's

And

happening also in
growing need on our
part for many imports: raw

the face of
own

a

materials like iron ore, copper and
even
oil.

I'm

-

not

sure

add, to business generally

a

and

the

know-how,

and

is

than

ment

more

no

It's

be.

to

out

The

their wage
third

ours:

a

of

American

lishing

companies

are

many
'estab-

facilities in the Com-

new

mon

Market

ones,
that

both to serve customers in
and

area

or

to

expanding

All

this

is

old

employ it

base for exports.

as

a

-V'":

bound

to

cut

"into

shipments from our own country.
And it's one more reason—and a
very

vital

form

one

—

or

any

why this nation

inflation

afford

cannot

degree.
"

'

in.

any

V

-

—

The General and the Dollar

:

alien
Th.is

task,

so

•

Wood,
began his ca¬

boy

a

—

a?

weak

cur-

currency- sug-

L.

Horn-

has

Higginson Correspondent

Lee

Edward

C.

Werle

1924

He

the

New

has

been

York

Broad

Street,

members

of the

New York Stock

111.

since 1950, a
1957.

Previously, he

Governor

of the

in

1956

was

of

the

has

C.

Stock

York

-

Exchanges.

He

Six

new

Governors

were

elected

Walter N.

Frank, a member of
Exchange since March 1937

which - they operate to remain
unehallehged and unchanged,
"BuSiriessiYieri) too, must enter m-

partner in Marcus & Com¬
(New York City).
Joseph A. Martin, Jr., a mem¬
ber of the Exchange since July

pany

1945

and

a

partner in Gaines &

leadership." in their communities, (St. Louis). He has been active
in the Stock
mia^ find these programs of since 1942. ' Exchange community
heJLp/fo one's own thinking, and. I
Frank L. Newburger, Jr., senior
urge .all. tb examine them. In our

.You

■

*

one

have

designated

of the. top officers

in our Per-

bank,

we

^oii^Lt^partment io be a coun^idr'QiiTcpmmunity activities. It
is /j^'-rapi^ibility to know a
,gre^t dedl abqut the practical side
of

partner
in
Newburger
&
Co.
(Philadelphia), and a Governor of
the Philadelphia-Baltimore Stock
Exchange.
He was President of
that Exchange from March 1954
to March 1957.
Robert L.

Stott, Exchange

mem¬

(New,York City).

Mr. Stott was
Chairman of the Exchange from
fluential. i All
this activity, „'of
May 1941 to May 1943 and an Ex¬
'cbth*^ is on a voluntary ibasis. change Governor for twelve years.
it is h6jihaHisan s0 far as politiFour Governors were re-elected
'cal "affiliation is concerned. And
to serve three-year terms:
we are finding a growing interest
can

be helpful and in¬

H. Hentz Adds
CHICAGO, 111.—Lee D. Schoenhas become affiliated with

brod

H. Hentz & Co., 141
Boulevard.

West Jackson

Missouri Pacific
Pacific pansion of the public utility in¬
expected to dustry in the territory would in¬
show improvement over those of dicate larger shipments of steam
1958 due to improved economic
coal.
The management also has
conditions in the service territory. been active in attracting new in-:
The grain crop this year is not dustries and plants on line. This
expected to be up to the large should add further to revenues.
1958 tonnage, but, in this respect The road is subject to heavy com¬
the road has a large amount of petition from trucks and
barge
grain in storage on line which lines, but some relief in this re¬
is expected to move to market. spect should come from legislative
Manufacturers and miscellaneous provisions which restrict exemp¬
freight is expected to rise well tions on certain agricultural prod¬
ucts and more regulation Pf trtickabove the depressed 1958 levels.
Earnings

Lines

of

this

Missouri

year

are

One of the advantages

will
are

the road
costs
under good control and while
this

have

expenses

increased

is

it

is that

probably will rise with
traffic, they should be

held in line.
costs

year

were

Maintenance of way

reduced last year, but

believed

that

actual deferred

there

is

maintenance

little
that

cannot be

picked up through cur¬
rent earnings.
Equipment main¬
tenance expenses will have to be
increased to meet a higher volume
traffic in view of the bad car

of

order ratio of 9.5% on March 1 of

this year.

jested a weak country, either in
rpsolutiorv or physical resources,
and .that such a country might be
-judged not fit to lead an alliance, in. it among. the people on
•iFurthermorei he pointedout that ■■staff.'4 ;.

who have not been under In¬

terstate

Commission

Commerce

regulation in the past.
Missouri Pacific has

property

on

sums

spent large
improvement

and rehabilitation. The

$13,500,000

Kansas

City Yard is scheduled fo
completion this year and this coul
save the system $2,000,000 annu¬
ally in operating expenses. Aban^
donment of unprofitable mileage
also is expected to continue. Fur-ther

of

curtailments

is

service

passenger

anticipated, and

this

would reduce the deficit from this

operation.

particular benefit to the "A"
shares this year will be a change
in

ers

.

Of

the calculation of the

onerous

capital fund under the terms of
reorganization plan. Capital

the

eojnmenity. leadership — what ber ? since December
1929,
and fund charges this year are ex¬
Grgu£j&tio'ng: are effective- what partner in Wagner, Stott & Co. pected to drop by about $3,500,000.
need'Sf.to^be done, and how the
These

individual

of

(Special to The Financial Chronicle)

Jackson & Curtis.

a

own

Kirk

staff

the

to

and

the

management of affairs at all lev-

111. —Carl L.

added

previously with Paine, Web¬

ber,

Stock

Dealers.

and

been

Cartwright, Valleau & Co.* Board
of Trade Building, members of
the Midwest Stock Exchange.

and

New

elected

American

changes. I

'

Cartwright, Valleau

of

and

environment

With

Inc.,

Exchange
Governor since 1953,

Vice-Chairman

and

member

a

in

the

Walston
&
Co.,
Reynolds & Co., Inc.

(Special to The Financial Chronicle)

Herbert

—

formerly
arid

was

with

for

years

many

Stock

Exchange in 1944, Vice-Chairman
two years later, and Chairman in
is 'a huge
and difficult 1947. Thus he is the only man to
muc'h so that it is beyond serve as Chairman of both Ex¬

expect

T. Mathews

on

Salle

the
Stock
Exchange
in
joined Johnson & Wood
and became a partner in

tives, it "requires thought and or- for three-year terms:
ganizatiotr. What is
needed in
Peter
Ball, senior partner of
effect is • a new attitude on the Ball, Burge & Kraus (Cleveland)
paid" of "business toward its role and a former Governor of the
in the affairs of the community, National Association of Securities

and

been

Street
Henry

Higginson

Corporation, 20
New York City,

Ex¬

York

1940.

state and local as well as national,
Businessmen, cannot stand aloof

Stock

He

in

any single group
of men: Like all important objec-

and Midwest

changes. Mi**
Mathews, who

with

1919.

the capability of

of

of

the New York

La

was

page

New

to

Watson

Midwest

of John¬

reer as

J.

members

,

investigating foreign
-aid, and the Committee had beeri
meeting
with the
Generals
at
NATO.
During this ;|qonferehce
one
of the Generals—a "foreigner
asked about the possibility of
-inflation in. America, about the
future of the dollar. Mr. MeCloy,
-of course, expressed surprise thai
-such a question shoiiid be asked
<:But tire General returned a very
'interesting answer. He said there
was a direct relationship betweeri
the physical defense of theUnited

James

Street,

members

Illinois Company,
Incorpo¬
rated, 231 South La Salle Street,

Co. (New York City) since August
els of ;th<e ' community.
A pumbprpi companies are bc- 1945. He is a Governor of the As¬
coinihg ^putely conscious of this sociation of Stock Exchange
!
'
ly-;brought, back from a trip to heedo j^me have adopted pro- Firms.
Clifford P. McKinhey, manag¬
Europe. He was over there as a grami? designed to encourage their
member of the President's Special
employees to assume greater ing partner in G. H. Walker & Co.

.Committee

and

CO.,
South La

Salle

blower & Weeks.

CHICAGO,

Along this same line, I was very
'interested in a report which our
Chairman. John J. McCloy, recent-

rency—that

208

Keller has become associated with

•

states andthe soundess of its

Johnson

(Special to The Financial Chronicle)

&

son

A.

David

CHICAGO,

a

with

Noyes &

The

Werle,

asso¬

ciated

Eustis of Spencer Trask &

Now With Illinois Co.

con¬

be¬

has

ews

come

Campbell; Brit-

Co.; Robert J. Jacobson of Ben¬
jamin Jacobson & Sons; Robert C.

adopted

firm

people to the challenge

,<-'f creasingly into the debates

-

tin C.

2 5 t h

s

formal

Mr.

take the initiative in alerting the

scale

surprise, then, that

no

Jr. of Marks and

e n

partner in the

new

technical

latest

(Special to The Financial Chronicle)

CHICAGO, 111.—Henry T.Math¬

the District of Columbia.

stitution.

corifronting the dollar, and indeed
American way of life. We
European- Common Market will - cannot, £it« at -4iome night after
have a population about as large night and leave unanswered the
as
our
own.
Companies in that efforts of those who would direct
area now have up-to-date equip°Hr economy on to a new and
turn

i t

n

year,

how tough our foreign competition
may

1817

i

""

realize ; American

yet

we

Spencer Trask & Co.

year.

Elected to the 1960 Nominating
Committee were: James Campbell,

when the Ex¬

Com- ■'.*^

the

and

held

change, t h

c<)ffcrs a Suggestion
;
Bankers! not only are bankers,
but are ieriders and responsible
citizens in communities as well,
It is up to them—and I would

Europe,

v e

since

cent.

in

of

one

Exchange, have announced that
Birely & Company has been ap¬
pointed their correspondents in

elec¬

ha

s

been

hundred per-

moving into a stronger
position — not only producers in
are

munists

Chairman of the Board of

as

Governors of the New York Stock

.

pete in Latin-America when for-

eign producers undersell
own
front yard.

Beckers
for

Henry T. Mathews With
David A. Noyes & Go.

of
Kidder, Peabody &
Co.; Hudson B. Lemkau of Mor¬
Surely nothing gan Stanley & Co.; Allan H. McI do not expect this to happen. people the facts.
I don't expect it to happen be- is more important, more vital to Alpin, Jr. of Wood, Walker & Co.;
our future, than this call to action.
Harold C. Mayer of Bear, Stearns
cause I, for one,
believe that we
&
can lick this problem of inflation,
Co.; Alexander R. Piper of
Paine, Webber, Jackson & Curtis;
creeping or otherwise.
But that

fact, more

27

amount to
2 ¥2% of gross revenues less de¬
preciation as compared with $11,000,000 less depreciation in the
period from 1955 to 1958. Retire¬
ment of outstanding bonds at a
charges will

now

rapid rate, particularly the 4 %%

Other income of this carrier last

declined to $7,722,000 from
$8,657,000 in 1957, reflecting for
the most part the smaller dividend
year

received

income
owned

Texas &

However,
in

taxes

filing of

from

the

80%

Pacific Railway.

some $200,000 savings
is possible through the
a

consolidated return.

Finances

of

Missouri

;

Pacific

continue comfortable despite pur¬
chase of its own obligations and

purchase of Texas & Pacific com¬
mon stock.
As of Feb. 28, cash

George F. Hackl, Jr. of Laird,
and cash equivalents amounted tp
our
collateral issue, would reduce
Bissell & Meeds; H. Van Brunt
'
sinking fund requirements sub¬ $48,995,000 and current liabilities
McKeever
of
Europe in
"
Goodbody & Co.;
were
$53,703,000.
Net working
stantially.
-the United-States is so great that. '
Hearkened by Events Abroad ' Walter Maynard of, Shearson,
capital was $32,517,000 against
Hammill & Co.; and Charles L.
There are a number of traffic
iany
suggestion that the dollar
j have no doubt about the abil$27,957,000 at the end of the like
Morse, Jr. of Hemphill, Noyes & factors which could play an im¬ 1958 period.
might be
slipping-.produced
a
ity of the United States to cope
sense of uneasiness and insecurity,
with inflation—and to handle it Co., all of New York City.
Last year the carrier, after all
portant part in Missouri Pacific's
which also wras damaging to the
Total membership of the Board
a manner in keeping with
our
revenues in coming months. While
charges and funds, had $2.79 a
alliance.
:
is
33,
including the Exchange
long tradition. It is interesting to
class "A" share available as com¬
Certainly we have had a small see how many countries today are President, G. Keith Funston, and grain traffic probably will not
taste this past year of what might turning away from planning by three Governors appointed speci¬ reach the totals of 1958, still it is pared with $4.44 in 1957. The road
•happen if people
abroad
ever
the state and relying more and fically to represent the public.
expected in the agricultural sec¬ has been paying 60 cents quar¬
•should lose confidence in the dol- more on the market place—ArThe following Trustees of the
tion
that
continued increase in terly, or at an annual rate rif $2.40
-lar; if they ever came to believe gentina, France, and
even
the Gratuity Fund, from which pay¬
a
share of the class "A" stock.
the movement of citrus fruits will
the

economic

stakeof

v

„

that

the

pable

United

States

was

of

inca-

managing its economic
'affairs. The high esteem in which




Scandinavian

countries

in

some

Lighting the path for all,
of course, is the inspiring example

degree.

ments

are

deceased

made to the families of

members

of

change, were re-elected:

the

Ex¬

William

be
are

recorded since maturing trees

coming into production.

Ex¬

This rate is
tainpd

expected to be main-

during

1959.

'

*

The Commercial and

28

Financial Chronicle

...

Thursday, May 14, 1959

.

(2216)

fv(vrn

.

..

ri

of a serious recession—a line (more emphasis on defending the
which was in no small value of money — on preventing
influenced by the great inflation.
In any case, we have
depression of the 'thirties. This now reached the position when it
questioning attitude about con- is becoming apparent that inflatinuing prosperity on the part of tion is a threat rather than an
the business community was on aid to employment.
The pursuit
the whole a healthy state of af- of inflationary policies could, as I
fairs. It worked to prevent things have
stressed earlier, lay the
govs

q

flp

Coniinuca pom puyo

^

-

of thought
measure

What Can Be Done
About Inflation in Canada
organized producer groups
have grown in strength and influence. a development which has
tended to produce an inflationary
bias in democratic societies.
that

Canadian Deficit Financing

the

however,

Undoubtedly

from getting out of hand — it groundwork for a serious receschecked speculative excesses. In sion. A.nd the prospect of increasthe last year or so, the atmosphere ing ups and downs in business
has changed and the emphasis is conditions to which the developon permanent inflation.
This is ing fear of inflation gives rise is
government deficit even at sharp- supposed to be the kind of en- anything but favorable from the
jy rising rates of interest.
And vironment in which we are living standpoint of employment.

willingness of Canadians like
Americans to invest in fixed interest-bearing securities in sufficient amount, and specifically
their unwillingness to take up the

unsophisticated, it
to suggest a steady
Cut Spending or Raise Taxes
but not violent rise in prices and
jn
circumstances, therefore,
a more or less continuous sue- ^ wou]d seem appropriate that a
cession of prosperous times. This serious effort should be made to

since the public were not inter- and,

the

to

#

ested in buying the government
about inflation is the development honds needed to meet the deficit,
of large government deficits, both the central bank expanded
the
budgetary and cash, in this coun- credit base so that the banking

may appear

will be not far off the mark and

want to beat inflation, we have to
take it seriously and realize that

it will involve some costs on our
part. If we insist that the other

fellow is entirely responsible and
should mend his ways we are not
likely to get very far.

>

,

Personal Appeals to 1 roducers
N0r are we likely to achieve
much if we call on the organized
producer groups to get together
anci soive the problem. Organized
producer groups represent prociucer interest. They can be reasonably responsible or irresponsi-

ble but it is almost flying in the

rective steps. But the point 1 want
to emphasize is that fear of inNation increases the risk oi a
subsequent and substantial reces?Pn or depression. Fear of inflation may promote maladjustments
tm. lhe economic machinery and

strongest reason for new concern

that

cash deficit of the order of

a

be realized.
From an economic point of view
the cash deficit, i.e., the amount
by which government payments
$1,500 millions

Ctnd

may

advances, whether of a

cur-

capital nature, exceed
government receipts is the important figure, and the $1,500
millions
approximation for this
fiscal year compares with a cash
deficit of only $300 millions in the
preceding year. What is most rernarkable is that the great bulk
of this cash deficit is deliberate—
the result of raising expenditures
for pensions, unemployment in—
purance, hospital insurance, payments to
the provinces, aid to
grain growers, pay to civil servants, Colombo Plan aid, of makIng loans for housing in particular, and of reducing taxes. Only
rent

or

because a

tional

USed.

nceded

be

to

a

fhe

take

pubUc

ourselves

mucb

money

And

goods

fact

in

may

we

economy,

with

too

few
this

chasing too
ihe
fear
ol-

I have emphasized, is

as

procegS

not

may

So when the
climate
again

up,

strong forward surge in

Canadian

find

may

finance future def-

economic

world
favors

the

to

which

icils

want

increases

additional

that

is

deal of the addiis not being very
But the concern

good

money

actively

leading to protective acwhich are inflationary in

already
tions

themselves.
.

_

Even such a brief analysis as I
have presented will make it all
too evident why there is so much

confusion about this question oi
inflation. There are, in fact, a
variety of conflicting influences,
factual and measurable, and

particularly outlays of a eontinu- producer groups is for the citizen
ing nature. The truth is that we in his role as consumer and reface a most unpleasant and diffi- sponsible member of society to
cult ch0ice at this time. If govern- support government policies and
ment expenditures cannot be sig- government attitudes designed to
nificantly reduced, then the only prevent inflation.
Government
other way to cut the deficit is to will reflect what the public want
brl"£ on a recession.
raise taxes> And if a sizable cut and it is up to those who are
Ovrrrominir Dilemma in
in expenditures is not made, then concerned about inflation to make
it would be better to raise taxes their views heard,
.
.
,
than to stand idly by in the face
ni«e5w«r
.?s m0re than apparent that of tbe inflationary threat. This ,
^
V?
the circumstances I have been en- would at least bring home the
In closing, let me fire a parting
deavoring to describe have pre- iact that government spending is shot at another form of fatalism
sented the fiscal and monetary not costiess. The fear of inflation concerning this question of inflaauthonties with a trying dilemma. js too wideSpread and too deep tion. That is the commonly exWhat is needed is a group of poll- get to be overcome by any token pressed view that it does not matcies tnat will ovcicome, oi. at qj, verbal assurances
need a ter very much
what we do in
least greatly lessen, the fear of real demonstration of the will to Canada about inflation—the quesinflation. And yet the kind of fight filiation even if it is a dis- tion will really be determined in
restrictive policies that would stinctlv unnleasant one
'
*
the United States. It is certainly
work
to
that
end — reduced '
'■
true that the Canadian economy
spending, higher taxes, tighter
Monetary Restraint
is greatly influenced by the United
T.

.

.

money

—

scarcely

seem

appropri-

.

,

!dve

ate when there is still a good deal

no1l. saia

,

,

mucn

about one-fifth of the increase in

some

the

jn°neJary pohcy because at this
time the size of the governments
cas^ deficit and the consequent
economic background is not par- not as insoluble as might appear
h^donTfn^be mnnpfirv
ticularly suggestive of inflation at first sight. It is neither neces- ™?at aan'Pf, ^
iny
ancl yet there ]S a growing fear ox Sary nor desirable to balance the
5So?"
mflation based to a large extent budget in the coming year—this J?antiaiiy
A®®* *
A?!
011
the increased influence oi would be drastic medicine indeed
^ p™apJy

deficit

cash

is

ihe decline in tax

result

the

revenues

of

asso-

elated with the recession.
It
run

certainly appropriate to

was

deficit

a

the

in

just closing and in

fiscal

year

opinion a
sizable one.
A year ago the economic portents were not favor■able and the promptness of the
my

others intangible and psychological but important nevertheless. As
I have emphasized, the general

economy.

is

one

of

Accompanying Dangers That
This is a definitely undesirable
situation. In the first place, there
is the obvious danger that the
value of money will decline fur-

payments

tuer—a danger which is increased

as those connected with
ihe Seaway and Northern Ontario

Pipe Line and, because of this and
probable improvement in reveHues, the cash deficit might be cut
io say a bit over $1,000 millions in
lhe coming year,
more
drastic
measures

still

a

to

breasts

unless, of course,
and

taken.

arouse

of

unpopular
But

is

this

large figure and suf-

very

licient

concern

that

many

it

the

in

will

be

before the national budget

years
tan

are

be balanced.

business

Meanwhile, with
recovering, it is feared

that the large deficit will act
engine

gerous

of

inflation

increases

money and

^

•

forcing

in the supply of

Monnv

s„„niv

++

.

jt the fear of
already forced a

increase

than

larger

the

in

supply
desirable in

money

probably

was

.

in-

,

.

the short-run by the belief of
moreand more people that money
will in fact lose value. There is
t"e related danger of getting mto
a mesh of controls m an effort to
prevent undue increases m prices
add to prevent the additional
in

money

needed to finance govern-

agent of inflation and might even
be in a position to run a cash

flationary fires.

And last but not

least, there is the danger that fear
°f inflation will set the ground-

work for a serious recession,
Sooner or later stock prices may
Set

so

high

in

relation

to

cor-

earnings and to bond prices

that

a

marked reaction

People

may

may

set

suddenly realize

and

that

we

Americans
j.da^on>
worse

j}Ut

jn combating in-

we

couid

^he.|/pfVhP

HnnS

rhHcV,

and business community
need tome convinced that, if con-

foremost he

ditions

ernment and central bank in fol-

public

do become strongly expansive, the fiscal and monetary
authorities will be willing and
able to combat the resultant in-

flationary

pressures,

be confessed that

no

and it must
such convic-

tion is evident at this time.

do

about

inflation?
can

First

and

support the gov-

lowing the sort of policies necessary to combat inflation
and, if
necessary, he should demand the
pursuit of such policies by the
responsible
authorities.
It
is
fashionable to assume that gov-

deficit is relatively smaller than

we must

act responsibly and pur-

well-conceived economic policies of our own. The fact that
such policies will be easier or
sue

difficult to carry out depending on how things go in the
United States does not alter the
fact that we in Canada should
endeavor to do our best,
more

ernments cannot pursue restrain-

Stress on High Employment

jng. and restrictive policies be- o \i/UL
Economic policy in most of the cause these will allegedly cost ^ Witn iVlClJOUgal, Condon
western countries has since the them the support of the voters.
(special to the financial chronicle)
'thirties put first emphasis on This is a sad commentary on the
CHICAGO, 111.—John G. Roche
maintaining a high level of em- intelligence of the average citizen, and Robert G. Walsh have beployment.
Where this objective and for those who do not wish to come associated with McDougal
has
appeared to conflict with accept such a cynical view the & Condon, Inc., 208 South La
prudent financial and fiscal poli- remedy is apparent — to make Salle Street. Mr. Walsh was precies, financial and fiscal policies their support of well-considered viously with the First of Michigan

that things are getting out of pro- have usually been adjusted. There and intelligent economic policies Corporation.
p°rH°np" thls,ls.al! ??e m?re,llke- is no doubt that a high level of perfectly clear and indeed to dely if fear of inflation leads to employment must be a prime ob- mand such policies. Another thing
Wifrk ni-anAi»
Cparc
ill-considered capital investment jective of economic policy. But the responsible citizen can do is
two Witn Uraper, oears
in some directions
sary

or

to unneces-

accumulation of inventories,

the experience of the postwar pesuggests that we have prob-

riod

to

take

a

longer view and to rec-

ognize that inflation is a serious

nti

couple of

indicates




the

un-

do

,r

(special to the financial chronicle)

BOSTON, Mass.

—

years

ago we were still

greatly concerned about the dan-

nomic

gests

system.

that

we

The

record

should

have

sug-

put

to

government, in price setting,
demands, and so on. If we

wage

Bertrand B.

Dionne and Byam Whitney, Jr.
are now connected with Draper,
Sears & Co., 50 Congress Street,
members of the New York and
Boston Stock Exchanges. Mr,
in Dionne was
previously w ith

The basic facts of economic life ably been too concerned about threat to our way of life and that
?ofii r!f
P 5lTl3eri ?58' ^ do not change beyond recognition the risk of depression and not there are no, or very few, winners
the nfr>n5rn;i!a
deposits in a decade, though fashions in sufficiently impressed with the if inflation takes over. Recognition
}cf rneyusu.pply.r ro.Sxe .by thinking may well do so. From
/
of these facts leads to a more
S i little. lhe extent has the early postwar period until a strens>th and vitality of oui eco- responsible attitude in approaches
S1I1Ci then
aeciinea
of
a

easily

ana doing worse would'not

~

i

increase

find

°»hy carry with it the obvious disadvantages and inequities of inflation but it would undoubtedly
^
slow our economic growth and
lead to a much less balanced kind
^mral
^
! nri of development. There are plenty
fa a a
J?,, ?
of examples of countries in-this
f
very position today. And let us
*?a not assume that we shall without
difficulty do as well as our. AmerS
TSt
Z1 ican neighbors. In the sphere of
fiscal policy they are doing more
than we are now and they are
P°ilcy oi monetary resiraini.wmcn carryjng a relatively larger defense load. ' Their present cash

52eiQK7CUmf SCe+* Fu°m1nhe end

axus

should

subsides. The British have done ours an(j they are seriously budeconomic conditions will not be this witn some success.
geting for something approaching
particularly expansive in 1960 or
And this leads to the question a balance in: 1959-60. In any case,
1961. But the point is that the of what can the responsible citizen if we value our national identity

surplus. Of course, it may be that

ment deficits from feeding the in-

in.

1S ,a
'
Xlalion has
n„r

.

dan-

credit.

Larger
t+

as an

.

i

.

it difficult to do much better than

However, the problem
degree and is perhaps

producer groups in our society, and would undoubtedly have seand on the prompt and vigorous riously unfavorable economic
by surprise.
However, the cash measures of expansion pursued consequences. What is necessary
deficit is a very large one and
by governments to combat reces- is to move part way toward a
the increased expenditures which sion. Confidence in the value of balance in the government's acticcount for
half of, it are
not money has reached a low ebb at tivities so that by 1960 or 1961,
readily conducive to substantial a time when there is still a good if the general economic environor early reduction.
Indeed, many deal of unemployment.
ment becomes more expansive,
of the increases appear to .be perthe government will not be an

.

States

of unemployment and slack in the

recovery took most of the experts

manent, such as those in pensions
ond pay, and some are rapidly
rising in character such as the
iiospital insurance payments. Less
funds will probably be required
for housing and for such capital

face of nature to ask them to light
inflation. The easiest and most
natural way for organized labor,
business and farmers to resolve

Graham & King, Inc.

Volume 189

Continued

Number 5846

from

page

.

.

.

The Commercial and Financial Chronicle

billion, expanding to $9.8 billion

3

in

1975.

,

were

year

;

The growth rate during the pe¬

The Ethical Drug industry
—A 20-Year Forward Look

projected to 1975 in five
intervals. The estimates rise

from

$11.21

riod 1953 to 1956 has fallen below

mated

the

in

1956

to

an

esti¬

$23.90 in 1975 in the high

lies

the

projection in this

fourth

study—an estimate of ethical sales
based
of

on

the

U.

projected mortality rate
S. population and the

projection, and to $14.90 for the

projected sales value

earlier years.
This would lead to
hesitation in forecasting the future

low

mortality rate.

growth of the industry at the rate

per

average

observed

now

lion in

trend

of. growth

in

past

observed in

At

years.

the

one.

When

the

projected values for
capita drug expenditure are
multiplied by the various
population projections, six esti¬

scriptions and average price of same
time, it lends weight to the
products in major categories
suggestion
that
projection
(2) mates are obtained for the total
when the industry almost tripled of the ethical industry. The sta¬ most
nearly
represents
future U. S. personal consumption for
its sales
rising from $512 mil¬ tistics were kindly provided by sales value and growth as
judged 1960, 1965, 1970, and 1975. Of the
lion in 1946 to $1.5 billion in 1956. this private research
agency in by economic
growth projection of six possible projections (e), (f) 1
the form of total number of pre¬
This is a conservative estimate. past performance.
And this is and
(g) represent the two ex¬
The ethical drug industry has scriptions nationally for the years real growth inasmuch as the drug tremes
and
an
upper average.
1953, 1954, 1955, 1956.
The value and
chalked
up U dramatic
growth
pharmaceutical
wholesale The high projection combines the
then was multiplied by the aver¬
curves
in the last 10 years, not
price index has gone up less than high value trend in 1940-1946 and
the
always steadily upward, but in age annual prescription price to 5% since 1946.
high population projection.
obtain the values plotted here.
spurts
as
new
research break¬
These
three
economic
growth Conversely, the low projection is
EXPORT
is
derived
directly
a
combination of low population
throughs have occurred.
At the
projections, based on a composite
same
time there have been sub¬ from the Statistical Abstract of index trend of six
primary data projection and the low value for
stantial price declines in certain the United States and represents sources from 1939 to
the
per
capita expenditure for
1956, puts
products, such as antibiotics, hor¬ the sales value of all product ex¬ annual sales of the ethical drug drugs observed in the 1946-1956
mones and many of the vitamins.
ports—Rx, proprietaries and fin¬
industry at $2.04 billion in 1960, period.
This decline had a restraining ef¬ ished bulk medicinals—over the
These projections put the total
$2.85 billion in 1965, $4.1 billion
fect on the growth curve, espe¬ past 20 years.
The values there¬ in
1970, and $5.63 billion in 1975. U. S. personal consumption ex¬
cially from 1951; to 1954.
Then fore are probably overstated in
penditure for drugs and sundries
Prescription Drug Projection
came
the
corticoid
hormones, terms of ethical drug products.
between $2.05 and $2.42 billion in
tranquilizers and the Salk and
The retail dollar value of the .1960, $2.37 and $3.29 billion in
Export sales is an important
Asian flu vaccines.
Once again factor in the overall projection. prescription
drug business in drug 3965, $2.71 and $4.29 billion in
the curve arched up.
From 1946 to 1956 these sales in¬ stores is another barometer of the
1970, and $3.08 and $5.46 billion
creased from $144 to $246 million. sales value of the industry.
As in 1975, as upper and lower limits.
Economic Growth Projection
However, their relation to the to¬ previously indicated, the Rx drug Theoretically these values should
The first projection is based, as tal annual ethical drug business value at the manufacturer's level
represent the upper limits for the
mentioned,on six primary fell from about 33% to 16%. Ac¬ is about one-half the retail sales ethical drug industry in the next
sources.
What I have done here tually these values are overstate¬ value.
At the same time, about 20
years.
is construct a composite of annual ments inasmuch as the exib'bVf sta¬ half the total ethical drug busi¬
The
retail
sales value
of
Rx
sales reports from the six differ¬ tistics,
as
previously
indicated, ness seems to be realized through
drugs
in
drug
stores
in
3939
ent sources.
(DTN, CW, CORP, contain medicinal products other the drug store on a prescription
amounted to about 27%
of the
GOVT, FDC, MED), giving equal than ethical drugs. If you assume basis. This is why a projection
personal
consumption
expendi¬
Weight to each series for the years that export sales will grow over of long-range trends in Rx sales
ture for drugs. By 1956 the per¬
in which figures were available. the next
20 years at the same through retail pharmacies serves
centage
had
tripled,
reaching
DTN, the retail value of the arithmetic rate as they did from as a measure of the total ethical almost 80%.
Thus, prescription
Rx drug market in- drug stores, 1952 to 1956, then the percentage drug industry in years to come.
drugs are now the predominant
based on annual prescription sur¬ value by 1975 will fall to around
The
three
population projec¬ factor in the personal
consumption
tions in the U. S. Census Report
veys conducted by "Drug Trade 10%.
expenditure for drugs and sun¬
News" and "Drug Topics," pro¬
The overseas market obviously of 1955 are based on three dis¬
dries,having" displaced in the past
vides a fairly accurate record of is a prime objective for the U. S. tinct assumptions in regard to fer¬
20
years
the proprietary drug
total
ethical
drug • sales at the ethical drug industry in the next tility or birth rate. The high pro¬
products. Before
1940, proprie¬
manufacturer's
level.
The
data 20 years. Hence one might antic¬ jection is based on an assumed
taries were the major factor in
here indicate that the Rx business ipate
a
steady increase in the fertility comparable to 1954-1955 this market. By 1975 Rx expendi¬
realized through drug stores rep¬ value of exports.
Offsetting this continuing until 1975. The inter¬ tures may well account for more
resents about one-half the total trend, on the other hand, is the mediate projection is based on the than
90% of the total, since the
annual sales value of the ethical fact that many of the larger phar¬ fertility observed during the pe¬
proprietary market is growing at
Since the retail maceutical
manufacturers
have riod 1951-1953 and continuing to a
drug industry.
very low rate.
value for ethical products is about constructed, or are building, pro¬ 1975. The low projection is based
In October 1958, four months
twice
the manufacturer's value, duction plants in foreign coun¬ on the fertility of the 1951-1953
after the M.I.T. thesis report was
the retail annual sales value for tries.
period declining gradually to the
'
completed, the U. S. Department
Rx items through drug stores ap¬
pre-World War II rate by 1975.
of Commerce revised its Personal
This probably will continue for
proximates very closely the total some time to come. So the, value
The per capita number of pre¬
Consumption Expenditure for
sales value at the manufacturer's
of exports of ethical drugs in the scriptions increased from 3.46 in Drugs and Sundries estimates to
level.
1956 to 5.62 in 1975. The average
conform almost exactly with the
next 20 years should become
a
CW is another time series, less smaller and smaller percentage of Rx retail price rose from $2.49 in Drug Trade News annual survey
1956 to $4.07 in 1975.
These in¬ reports. Originally the Commerce
complete than the DTN data. This the annual sales of the industry.
creases
are
consistent with the Department
refers to a report on the drug in¬
reported
sales
of
Since no one statistic for any
dustry
published
in
1954
in one year is a more accurate ap¬ thesis that medical attention in drugs and sundries rose from $509
the next 20 years will focus on million in 1936 to $1,885 million
"Chemical
Week."
There
is a
proximation of industry sales than
chronic
disease which
wide gap from 1939 to 1949 for
requires in
1956.
Later, these statistics
any other
statistic, a composite
which no figures were available.
long-term treatment.
Hence the were revised? as follows:
annual sales value can be calcu¬
increase in the per capita number
The
individual rvariance in
the
lated, to give equal weight to each
U. S. Expenditures for
of prescriptions written annual¬
series is, if anything, overstated
series for the years in which a
Drugs and Sundries
at least in the years 1949 to 1951.
ly. At the same time therapy will
statistic was available.
(Millions)
require new and more complex
CORP
is
a
corporate annual
Projection (1) is based on the drugs, and this is consistent with Year
Original
Revised
Difference
sales reconstruction of 26 leading
assumption that the ethical drug an increasing average price per
1948
ethical houses, covering the pe¬
$1,358
$1,466
$108
industry will continue to grow in Rx.
Estimated
Rx
retail
sales 3949
riod from 1946 to 1956.
An ad¬
1,350
1,555
205
the next
20 years at the same
will
amount
to $1.84 billion in
1,406
1,719
313
justment was made here for 1953 arithmetic annual rate observed
1960, $2.66 billion in 1965, $3.7
1,516 :
1,979
463
through 1956 for Squibb, Upjohn
during the past five years—that billion in 1970, and $5.05 billion
.1952
and Lederle, whose annual sales
1,569
2,058
489
is, at about S120 million per year. in 1975. • These are the median
were not available for those years.
1,615
'
2,137
522
Projection (2) is geometric and values of the three projections
No effort has been made to sepa¬
1,631
2,163
532
assumes the industry will double
and I think they aire quite real¬
1955— 1,747
rate out the non-Rx sales of each
2^473
726
in sales value every 10 years for istic.
1956— 1,885
2,869
984
corporation during any year, so
the next 20 years.
This rate of
these figures may include export,
Personal Expenditure for Drugs
For purposes of this study, the
growth is somewhat less than has
veterinary, proprietary, or bulk
Projection
original
Commerce
Department
been observed in the period 1946
pharmaceutical products.
totals were divided by the U. S.
A possible third approach to the
to 1956, when sales about tripled.
GOVT is plotted from a manu¬
population totals, yielding a per
Projection (3) portrays a more future growth of the industry may
facturing census report released
be seen in the total U. S. personal capita estimate of the expenditure
the U. S. Department rapid rate of geometric growth—a
rate

is

just

slightly

trend observed from

.

.

the

below

1946

to

1956

the

.

'

in

1954 by

of

Commerce.

Statistics

for

the

industry are hard to

ethical drug

doubling of the annual sales value
every seven years. This we have

consumption
expenditure
for
and sundries, as estimated

drugs

195304

for drugs.

from

government

sources.
reports before

the Census of

1947

and

Manufacturing from
For this reason

1954.

only the 1947 government figures
are suitable for this projection.
The weekly trade letter "F-D-C

estimates
reports the annual sales value

Reports"
and

occasionally

industry. Reports through
are
reckoned in the line

of the
1956

labeled FDC.

These statistics are

seen

in the last seven years.

each year

the

Department

If

billion

in

$2.67

1960,

billion

in

1965, $3.32 billion in 1970, and
$3.97 billion in 1975. If the indus¬
try exhibits a geometric growth
rate
been

somewhat
observed

slower
in

the

than

past

has

10

and undergoes a twofold in¬
crease every
10 years up to 1975,
then the sales value annually will
increase from an expected $2.04

years

packaged

(over-the-counter)

medications and other sundries as
well.

Each annual estimate is de¬

rived

from

a

rather

calculation by the

complicated

Commerce De¬

Even

in

and

growth.

somewhat
rose

from

20

years

the

impressive.

partment. The trend may be use¬
ful
in
prognosticating
sales
expenditures

past

While the death rate was falling

from

These

the

drop from 11.55 per 1,000 popula¬
tion in 1936 has been consistent

sales

11.55

to

more

ethical drug
15-fold,
from

9.36,

expanded

than $100 million

in 1936 to

$1.5 billion in 1956. The
continued
development of new

to
The population and life-saving drugs has acted as
$5.63 billion in $11.21 in 1956.
a
giant brake on the mortality
projections for the years 1960,
rate. These and other new drugs
If, however, the growth rate of 1965, 1970, and 1975 are the same
very likely will continue to be a
New York drug store prescription the past seven years is continued, as those in the Rx drug projec¬
factor
in further
reducing the
so
that the industry doubles its tion previously discussed.
survey sample, MED, is projectunadjusted
mortality
The annual per capita drug ex¬ domestic
able nationally. It supplies infor¬ volume every seven years, antici¬
rate. Such an assumption under¬
mation about the number of pre¬ pated sales in 1960 will be $2.63 penditures for 1936 to 1956 then
derived from studies of corporate

sales, but how "F-D-C Reports"
gets them, I do not know.
The
Med ime trie
Institute
of




billion in
1975.

1960

to

an

estimated

$3.97

in

1936

unit

of the

Mortality x-ate projections put
annual sales at $2.05 bil¬
1960, $2.84 billion in 1965,
$3.78 billion in 1970, and $4.84
billion in 1975.
The drug sales per unit mor¬
tality rate may also be considered
the

as

in

value

of

dollars

drug

industry sales required to reduce
the crude mortality rate one unit
per
thousand. Since the overall,
mortality
rate
is
approaching
value

some

asymptotically and can
the sales value of

be zero,

never

this statistic will continue
To

crease.

with

drug

never

sales

in

in¬

to

knowledge,

my

tality rates have

mor¬

been linked

the

manner

just described. Such a projection
should be quite useful in other
studies. Though not very sophis¬
ticated in itself, it was found use¬
ful for parts of the projection that
follows.

Major Drug Projections
All the

previous projections in^
herently contain the factor oif
innovation, the development of
new drug products which has been
the most significant feature of tho
ethical drug industry in the past
two

decades.

It

would

desirable to arrive at
of the

tion

■

seem

projection
industry in which innova¬

could

be

a

dealt

with

in¬

dependently of the existing, but
expanding sales value of the in¬
dustry.
The sales value of the industry
may be subdivided into classes of
drugs which maintain their own
growth rates and hence their own
characteristic
projections.
The
degree of maturation of any class
of

drugs

serves

as

of

means

a

forecasting its sales future. There
are, furthermore, major medical
problem areas in which we may
expect innovations and discoveries
in the next 20 years: cancer, heart

disease,

mental

disease,

arthritis

and rheumatism and the virus in¬
fections
mon

exemplified by the

com¬

cold and measles.

The fifth and final projection is

independent forecast of the
existing major drug classifications
five-year periods up to 1975.
Certain
assumptions have been
an

in

made about the time

tude

of

and

magni¬

research

medical

break¬

throughs in forecasting the sales
volume

of

these

individual

markets.

forecasts

The'

then

are

correlated to get the final projec¬
tion for ethical sales in five-year

periods from 1956 to 1975.
Aspirin Products

Aspirin products and the deriva¬
tives of acetylsalicylic acid, most
commonly known as analgesias,
are
by far the most important
items in the proprietary or overthe-counter

market.

But

a

sub¬

stantial

quantity of aspirin com¬
pounds are promoted and sold
ethically, inasmuch as aspirin is
often combined with ethical drugs

which require a prescription. My

projection

shows the Rx aspirin
$24 million in 1960, $30
million
in 1965, $37 million in
1970 and $43 million in 1975.

market at

Mortality Rate Projection

since 1929 by the U. S.
Since the turn of the century
of Commerce.
This
industry maintains the
There are a few
nation's mortality rate has
time series includes not only the this
same annual arithmetic growth it
1947, but the classifications don't
from 17.2 per 1,000
has over the past five years, the personal expenditure for Rx drugs plummeted
jibe with more recent reports in
in
retail
pharmacies, but OTC population in 1900 to 9.36 in 1956.
annual sales value will be $2.02
get

29

(2217)

Barbiturates
Introduced

to

medical

practice

shortly after 1903, the barbiturates
have

become

virtually
indis¬
pensable as sedatives and hyp¬
notics. For many years they have
been a significant factor in the
ethical drug business and today
they represent a major category
of
ethical
drugs.
Growth
has
occurred at

a

definite rate with

no

observable

leveling-out trend.

A

base value of $54 million has been
set for 1956 and a trend for pro¬

estimated at a value of
$2.5 million increase per year. If
anything these estimates are con¬
servative, but intentionally so,
because in the past few years a

jection

number of

non-barbiturate

Continued

on

seda-

page

30

The Commercial and Financial Chronicle

(2218)

30

Continued from page

the

and
generally smooth out
projection. All this assumed,
biologicals and vaccine cate¬
gory furnishes values in 1960 .of
$155 million, $350 million in 1965,
$380 million
in 1970 and $410

A

disease.

sulfa

market

the

puts the

the

at

The Ethical Drug

Industry

Corticoid

hypnotics

and

tives

have

been

ment

commercialization

and

Hormones

million for the first year and a
development of much reduced volume annually
the corticoid hormones for use in thereafter. It is furtner assumed

—A 20-Year Forward Look

Thursday. May 14, 1959

.

.

slack

projection of smaller, since it would probably
values be restricted to children under 12
$47 million for 1960, $53 million and women during the age of ac¬
for 1965, $62 million for 1970 and tive child bearing. Initial sales are
assumed
to
about
equal
initial
$72 million for 1975.
polio vaccine sales, or about $50
fectious

29

.

million in 1975.

V

"

•

y.

,

•

.

The commercial

of

arthritis, rheumatism and inflam¬

commercially antihistamines was founded on matory disorders, is one of the
available. Furthermore, the recent their applications in alleviating four major medical breakthroughs
cold and allergy symptoms. Ulti¬ of the
postwar period. In a few
development of the tranquilizing
drugs probably will see a some¬ mately, when such products found years the value of the market has
their proper place in the physi¬ climbed from zero to about $80
what diminishing use of barbitu¬
discovered and made

that

measles

the

Cardiovascular Drugs
Heart disease is the number

would

vaccine

become commercially available by

killer in

1968. While I do not

than

project a sudY
jump in sales as a result of

den

the measles

the

be

than: 825,000

vacciri<efuh^ou^

this is because I have assumed the

one

country today. More

in every two deaths can
attributed to it. In 1955 more
one

form

some

people died from
cardiac disorder. It

of

cian's armamentarium, their pro¬

million.
?
market would tend to fall back has. heed estimated, dfcat" soihethe
initial > immunization, where. between 9 and 10 million
estimate of duction and sale leveled off and
Future growth
is difficult to after
the category matured. Maturity of
with the cold vaccine being com- people suffer from a heart disease
future sales
of barbiturates for
predict. Arthritis and rheumatism
1960 amounts to $65 million, $77 the antihistamine group was rapid are one of the five major medical fcieted about 1966-f967. The rpea- and, including minor ailments, the
million in
1965, $90 million in and growth in the past few years problem areas now under study. sles vaccine would take up the figure may be nearer 14 million.
rates in future years.

basis

this

On

an

.

has been steady but

small.
The corticoid hormones, while im¬
the ouuook would portant, even life-saving, are only
appear to parallel population a
palliative in the treatment of
Vitamin
preparations
are
a growth, discounting new uses or arthritis and rheumatism.
product classification of major innovations which might swell the
More than $3 million in private
importance to the ethical drug annual sales value. Since the prod¬
and government funds is being ex¬
industry. While Rx sales slightly ucts are already on a non-pre¬
pended in arthritis and rheuma¬
outweigh proprietary sales, the scription basis, no change in sales
tism research. It is reasonable to
latter
are
slowly and
steadily channels can affect the future
1970, and $102

million in 1975.

Here

gaining in sales importance. How¬ course of limited growth.
ever,
the ethical industry pre¬
This forecast furnishes values of
dominates in both markets since the
future market for antihista¬
in most cases it supplies products
mine products at $53 million in
sold through proprietary as well
1960, $56 million in 1965, $59 mil¬
as ethical channels. Hence, for all
lion in 1970, and $62 million in
practical purposes and with few 1975, or a growth rate annually
minor exceptions, consideration of
of about $0.6 million.
the future sales of ethical vitamin

must take into ac¬
count
all
vitamin preparations
promoted to the medical profes¬
preparations

sion whether or not they are

sold

Antibiotics
The

TABLE

again,

Vitamins

rapid commercial develop¬
penicillin

ment of antibiotics from

assume

that

some

f.

growth.
But r daily
hundreds
vitamin supplementation has be¬

were

discovered

function

a

both

of

the isolated, only slightly
a

in

disease

1960, $220 million in 1965, $225
million in 1970 and $290 million in drug sales
1975.

tality

will

apply

the

rare

in

ethical

value for the unit mor¬

rate,

as

shown

in

accom¬

hormones

1965.

.23

ing

corticoid

or

new

derivatives therefore should

arise

1970.

1975.

20

•

for

there

for

almost

to 1975.

r

It

is

assumed

that

by

1962,

rw

successful

for

-

.

(millions of dollars)
Heart Disease '

Mortality

.
-

,

:

•

Year

1938—
1939—

s

:i>

t- Y

Y

1941—

.i4.4,5j)

1942—

4.58

1943—

1945—

•

4.70

-

1947—

r

1948—

OC
"*

1950—

-

v?

5

4.94

Y"'

4.98

—

.<

—

1954—

■

1955—

4.93

■v, 'r,

5.13

1957—

v.;

"Ill

I960—

Y

1962—

-

0

4.75

.56

1975—

important




Sulfa Drugs

$230 million with about $80 mil¬
As a class of anti-infectives, the lion
per year thereafter for the
sulfa drugs are small
potatoes— supplementary immunization and
in a sales
sense—compared with protection Of the new population.

available for the treatment Of in¬

For

this

value

of

projection,
$230

spread over

a

million

the
has

initial

three-year period.

Y
-•*'

:r.

100

'

147

•

-

450

:

\

37

.

V

'

06

.

•

977

786

600

.

443.

252

.

=

259

(800)
Statistics

'Vital

Printing Office!
•

*

See

of

United

the

1950.'

Stales.

.'Y'

■

■

.

Vol.

:

Government

Y;.'Y.VYY nY

TABLE III

J;

(Washington:

1.

' YYY

77

text.:YY YY- Y

Y^'vy' ^

:

Y

; Y Y;

Projection of Sales Value of Potential Market

;:Y Y^Yy Cancer Drugs
wv'...

:

rY.." ;YyYy YV YYYY

(millions of dollars)

t

Cancer
Ethical Drug

Mortality
Rate

1936——

1937-..—

0.54

Mortality Rate

1

_

1939—

1.13

.52

._

.-

1.14

.45

.

._

1940:.—

:>■

Y

"/

.41

+*■

■

•

.

19.60

22.40

1.25
.

►

17.20

• :

1.21

,

Y

16.50

•

1.23

.43
:

10.05
14.45

»-

1.21

.41

Projected *
Sales Val

11.75.

,1.18

-

.44

:

Y

—-

1942—

,

y;

1.16

.47

1938_—._

1941—

Cancer

Tuberculosis

•

-

Sales per Unit

Reduction

Mortality Rate
Year

25,30 Y

-

1.30

a

.35

1.31

Y.32

1.34

.29

1.36

1949—-

.26

1950-

.22

1.40

.20

1.40
1.43

1.45

'

;

• -.

-

109.00

1.46

-

Y

101.00

.12

'

,

4

j

105.00

.16

'

-

33.60

•

'

'

-

3Q.00

'

1948—

123.00

1946—.
1947—

—

—

19511952—
1953-

-

-

.

1954

-

"

.10

1955

i.39

43,50
51.40

•

55.40

;
•

f

-

Y

■■

1.48

159.20

225

1960

1965-

.

—'

"

'

'A'

'

r

.

.

4.

139.50

1.46

1.50

1956

^

85.00

.10

-

>

67.20

.09

-

•

1.55

'

1968..
1970_

o

400

*

.

^

'
0

325

.29

.•

1.26

-

116

1.07

1975— ;

.48

45Q

216

.39

•-

been

The potential market for mea¬
sles
vaccine
would
be
much

64

V

325

—

1.31

4.40

•

: Y ;

-

.....

■

*•

191

.21

1970—

'

-

.,5.10

•

—

K\-.

•

••

225

5.31

v

1965—

'

■

♦

v

5.25

<•

.

159.20

-

-

■

54-

139.50

Y;

■•"V.-

>

45

123.00

i

Y

-

-

*.

-

■

101.00

v

.

-

■.

32

>

109.00
;

c

25

85.00

;

4.85
•

•

Y
7'"

.

YY^Y

-

Y:Y':

105.00

-V;,

5.03

•

.

19

-•

67.20

w

-ft:4.93

•

1956—

I?-'.:

•

;

'

•

55.40

r'

-

'

-w-.'

•

51.40

r•

:

-

33J60

•:

-•

...

*

1949—

Y;

yj'

4.88 Y-Y.

V; 4.88
4.85'

-

15

Y/■~Y.:YY

43.50

-

y

':

~

;

30.00

:

:.'V'Yv

m

Y

OA

ZD#uU

"

-

'

Y

v

■

ii-

-

Y;
• Y
r."'

22.40

•Y

-i./,

.t■*.»-

-

19.60

j:t4<85 • .ittA&T'jj'* -

1946—

17.20

•

;

4.91

y:;,

1944—

-

>

1.35

amount to about

•

-

Y'Y

Value

;Y'Y YY"9

;Y"'

ifi.cn
J DiOU
'

4.54

Sales '

Addition
to Sales

14.45

:

4.3 i

1940—

;

Y

;

Ethical Drug

Heart Disease

.;^4.n

•

;

Mortality Kate Sales per Unit
' .Reduction't:Mortality Rate

-

Rate',

,

1953—

vaccine

,

Potential; Market for Heart Disease Products i

.38

less

:

(600)^

and

-

1945—-

no

Y

■

•

796

'

—

.40

but

Y

VYY-

1944—

of drugs are the anti¬
histamines. The postwar develop¬

..2: 512

i-'-'Y

1943

small

162

246

table ii

1952—

ture. The outlook for a dramatic available by 1962 at the latest.
place the new discovery that will add sub¬ Administration and dosage prob¬
value in 1956 at about $28 million. stantially to the present value of
ably will be similar to the Salk
Growth in the past four years the
market
seems
remote,
al¬ vaccine, that is, three injections
appears to have been limited. This though the industry continues to will be required initially with a
market has, for all foreseeable spend considerable amounts on re¬ "booster shot"
annually thereafter.
purposes, matured. Further mar¬ search in hopes of finding a new, Each injection should be worth
ket growth would seem to depend chemically different antibiotic.
about 50 cents to the manufac¬
mostly on population growth with
My projection estimates sales of turer. Four-fifths of the popula¬
little opportunity for product in¬ antibiotics at
$390 million in 1960, tion probably will wish to be im¬
novation.
$444 million in 1965, and $513 mil¬ munized.
The future growth of the sex lion in 1970.
This being true, the initial im¬
hormone
market
is
related
to
munization would

A

;

390
.444

Growth and Projection; of Sales Value
^
}Cardiovascular Drugs.^

1951

sources

category

350

>

iyY

.94

600

-

dustry, The best

But
the
antibiotics
have not eclipsed the sulfas. Quite
the contrary. Sulfas have retained
a definite
place in the medications

'

•

Immunological agents, better
known as biologicals and vaccines,
are a class of drugs in renaissance.
Antibiotics all but pushed the bio¬
logicals into limbo from 1945 to
1950. Then the profession and the
industry began facing the fact that
antibiotics don't perform miracles
against virus diseases — and that
polio, the common cold and m

sibility—a

antibiotics.

"

-

450

f

their sales value to the ethical in¬

Antihistamines

V >

0

40

:

Y;V:: 325^

-

.36

or

shortly thereafter, there will be
an
important medical break¬
through in the collagen disease
area.
This discovery will mush¬

It seems likely from the way immunization
have been widely
against measles.
An effective common cold vac¬
variety of purposes, these data are that the antibiotic
very few statistics on class of drugs is beginning to ma¬ cine should become commercially

population growth. This puts the
market for 1960 at $31 million,
$33 million for 1965, $35 million
for 1970, and $38 million for 1975.

160

,'.41

>

....

225

.

'.

-

'

a

are

18

.29

•

;V'-

years.

•

,

■

,..11

more

and

years

used

available

,

.16

slowly in the next few

much

Sex Hormones
panying Table I, with the reduc¬ measles were still out in force.
Growth up to 1954 was steady
synthetic manufacture, dis¬ tion in infectious disease mortality
tribution and sale of sex hormone which will take place in the five and continuous. The sharp rise in
products represents a small seg¬ year periods up to 1975. By multi¬ 1955 was due to the development
ment of the ethical drug industry. plying the reduction in mortality of Saik Vaccine for polio, which
Originally these products were —that is, the value that the mor¬ added some $46 million to the
isolated from natural sources and tality rate from infectious disease category. The jump in 1957 can be
purified for medicinal use. Since will be reduced—by the ethical credited to Asian flu vaccine.
the
late
1930s, however,
most drug sales value for unit mortality Look for substantial and rapid
male, female and progestational rate, the value of the additional growth with the development of
hormones
have
been
produced sales of ethical drugs in the fbrm commercially effective products in
commercially in pure form syn¬ of antibiotics can be estimated two areas. The first is just around
thetically, starting with a steroid over the base year of 1956. Ac¬ the corner—a vaccine for the com¬
material contained in a Mexican tually the same type of estimate mon cold. The second has been
yam. Although hormone products could be made for every year up announced—as a commercial
pos¬
been

\ o' v.:.'

,..52

The

have

.Sales Value

,.,.34

more

be

Projected

Sales Value

1960.

preparations will increase. computing the straight line trend. lion in 1975.
With this in mind, the forecast for This
gives
infectious
mortality
Biologicals and Vaccines
vitamin sales is based not only on rate values of 0.34 for I960, 0.23

this country.
Now
we'll

Additional

Rate

1956.

min

fectious

Mortality

future. The market for exist¬

dozen have reached commercial

dictions of the medical profession
that in 20 years, death from in¬

Mortality

Yy K*te

Rate;

will arise from this research in the

disposable income people want
six can be said to have real mar¬ novation
anticipated in the arthri¬
spend for drugs and sundries.
ket value.
tic-rheumatic disease area after
As the level of disposable income
The infectious disease mortality 1962. The prognosis is for $88 mil¬
increases in the next 20 years, it
is safe to predict that the pet rate from 1939 to 1956 has been lion in 1960, $170 million in 1965,
capita daily consumption of vita¬ projected to 1975 statistically by $260 million in 1970 and $270 mil¬

prediction. The
projection estimates the rate of
growth at about $5 million a year
and points to sales of $195 million

.Drug Sales
Unit

Mortality

to

most conservative

Disease

Year

and

population but also on the trend for 1965, 0.16 for 1970, and 0.11 for
in personal consumption expendi¬ 1975. These values are quite rea¬
ture for drugs and sundries.
A sonable. They jibe with many pre¬

Ethical

Infectious

form of chemo¬

The
projection utilizing these
than assumptions represents the future
sales value of the present corticoid
standard of living and the amount
development, of which only about hormone classification and the in¬
of

come

Reduction

Disease

to tetracycline is perhaps the most
room the arthritis and rheumatism
by prescription. This means the dramatic
story in the history of market just as the corticoid hor¬
major share of the combined Rx the
industry. The antibiotic cate¬ mones did between 1950 and 1956.
and proprietary vitamin market.
gory represents the most impor¬ The breakthrough in 1962 should
With no new developments ap¬
tant dollar segment of the indus¬
furnish, in the 10 years that fol¬
parently in the offing and with a
try, accounting for some 23% of low, a market twice as great as
mature growth picture, one might
total business. While millions of the
present corticoid market of
be
tempted to
forecast future
dollars have gone into the search
$80 million, or $160 million, with¬
growth almost along the lines of
for antibiotics, and while many out
affecting the existing market.

population

Projected

'

•

Projected

Infectious

therapy, not palliative treatment,
near

I

Projection of Antibiotic Sales Value
Y:
Through
Infectious Disease Mortality Rate

1.16

600

696

(600)
1

Vital

Statistics

Printing Office)
*

See

1950.

text.

of

the

United

States,

Vol.

1.

(Washington:

Government

Volume 18S

Number 5846

.

.

.

The Commercial and Financial Chronicle

Private and government funds for
research in this vital area total
than $30

more

You

figure, which appears too high, is
by this method found to be about

million annually.

cannot

plot

Following the curve, the forecast for 1968 is $116 million, $216

million and this figure

million for 1970 and $696 million

$800

from year 1975.
sound." -r/" ' ,Cancer

sales

primary data. This

may

odd, since this has been a major
classification for many years. AcT

in this

tually, it's

six

ceutical

semantics.

"Cardiac

drugs" cover a multitude of prodall
concerned
with
heart

disease, but with such

physiological

historical

that

have

sources

7.5%

of

average

years

that

car-

search.
.

averaged about

prescriptions,: The
prescription price for car-

during

salesf for

total

close

to the field

■possible'

that

say

it

major

a

breakthrough

willoccu'r by 1.965. When this haptbe

ens

fab

mortality

cancer

at

ratc

a

paraiieling the

the.,'■■<jecline''of'tuberculosis

years,

'fbiiowing

rate

from

1946

the discovery of

streptomtofh. and later/-isoniazid.

sales of the ethical drug

industry.appnmnnnvin«

tnhin

ttt

projections
Table

in

are

VI

shows,

economic

growth prothe highest

furnishes

for

except

tomorrow's

on

until tomorrow,

The
prospects for the pharmaceutical
industry have been
reviewed here in terms of dollars
and cents. But there is one final

point to make clear and it under-

and

propelled

the

by

will of scientific progress. We
financially

are

of the

five

projections,

only inso-

prosperous

it

is not much higher than the value

,

many>respects,

.

.

.

far as we are scientifically suecessful. So there is another way to
obtained by projecting the indi- interpret
these figures.
They
vidual drug categories and the signify a future of boundless
areas of innovation. The economic medical advance in an era of ungrowth projection inherently con- precedented health and
welltains the innovation factor and it being,
may well be that the forecasts of
innovation areas in the last proFHLB

values

tant chembtherapeutic drugs by
19?2-. However, even assuming
Ibis, it is difficult to forecast what
^ wil1 mean to the industry,
Mortality statistics would help
but mental disease is not an im- jections are too conservative,
P°rtant cause of death*
" The average of all five major
.

that's

front page

supported

the

jection

as have fading researchers, that
new discoveries will bring import

In

all

know

lies all the assumptions that have
been made. Ours is an industry

While

predict,

to

reasonable

seems

five

likely the outcome and the more
often
the
prediction
must
be
changed. Even the editor doesn't

companying

and the
drug leads all

chemotherapeutic

*

judging from thi!sy-to igse
have averaged about 5.7% of total,
past lew

now

reconstruction of the in-

a

The

million

$45

sun-

31

rather close agreement, as the ac-

disease. Tranquilizer drugs, one of
the
four major medical break-

It

People

1 9 5 7
was
about $1.35 at the manufacturer's
level. Cardiovascular

made

were

.

ig ,:qujte

total

diovasculars

un-

throughs of the postwar period,
search for a cancer
marked the beginning. Other disother fields of pharmaceutical re-£ cover ies are sure to follow. r

two

indicated

diovasculars have

than

more

be

.

However, for several

One important area remains to
complete the projections of major
450,000 'drug categories. This is mental!

are

some

1957. Research funds

in

no

pattern can
gleaned from the statistics..
;

and

diagnoses

cancer

new

multitude

a

actions

growth

treatment

der

(5)

by cancer.

700,000 people

and

dustry by major drug classification taking into account the factor
of innovation in the five major
medical problem areas.

£ Tranquilizers

out of— -.'Vy

one

caused

was

than

drugs

Mortality rates and the
value of the unit mortality rate in
terms of ethical drug sales, and

.

.

for

(4)

,

country. In 1955

deaths

More

ucts,
of

expenditure
dries.

has been arbitrarily assigned as a
reasonable estimate of the market
killer,in 1975'

Cancer is the number two

question of pharma-

a

was

^he growth of used as the sales value for the for 1975. A value of $600 million

cardiovascular "drug
any

(2219)

projections is shown in Table VI.

i- The

Places Notes

Public

offering of

Federal Home

Loan

$199,000,000
Banks 4%%

consolidated notes, dated

May 21,

disease

1959, and due Feb. 15, I960,

sumed

made

medical

Home Loan Board

through Ever¬

ett

agent

projection

be

can

valid

than

appear

to be

on

was

May 12 by the Federal

Smith,

fiscal

of

the

i??Pe ^0arl ®ar,ks, and a nationWlde Sroup of security

dealers.

Th£.notff a.re priaed at
«ona

lyt^

has

tne

mortality rate lor

the nast

in

in

heart

The

vears

tality will, fall
on™,*

nrn-

from
hv

1.55

fh,c

in

1965

for+he

care

Sto Sat

rinoimp

.

nroiertinr.?

th/Wfitad SuT'ls

te
..

.

patient Daral-

cancer

.

___

„

frnm

tho

avprage

or

^ minus

about plus
periods up to 1970 and
minus 20% for 1975. This

for the
...

cessful development of new

drugs Mortality

by 1962 the rate wiU begin to decline, reaching 2.51 by the year
2000.
Straight line interpolation
puts the rate at 4.75 per 1,000 in
nrmPpfpH
projected

from
sales Trom

for

1965 to 1975, an estimate of
the sales value of the market for
drugs

cancer

manner

same

for

is

obtained
the

as

antibiotics,

in

projections

sulfa

drugs,

and

will

inordinately nigh,

further

the previous

to be
observed m
calculations for anti-

j!.°.V,c.S a'ld
sons,

as

the

treatment

announced

be

by

projection

stiaignt

a

made

was

line

Andc

luither,

cancer

1965. It is
the

mortality

^caLdruin" 1965 will be at the

increfore,

of

assumed .that

cancer

fall

rate

in

after

same rate ob-

that

the

cancel

using._the mortality rate will continue to

calculated values for the previous
years as a base. The $977 million

climb until 196o at the
observed

table

in

basis

these

of

method, it is assumed that the

the last

rate

same

decade.

v

for

and

There

drugs

new

about the

same

0f $135

base

a

million in 1956, the sales
in

value

that calculated

as

Starting from

cancer.

is

196(b

which is

$185

slightly less

million,

than

ance

the

that

Summation of Projections of. Sales Value
"

-7.

' :

;

lf>5«'

Aspirin
Vitamins

Sex VHormones

__

/

28

•/

Antihistamines

' 30

37

77

90

220

255.

290

-

underestimated and mortality

350

,

;.;-42

' 515

Total Existing

_

__L

,^

but at all times represents an im-

444

512

600

62

72

" 720;'' 1,030

1,420

^ ri,098^fl,320 f : 1^633 t
!:

2,080
260
260

Vaccines

1.02 ;..'rl55

/

350

380

410

259

443

800

! !:;:87

Cancer

147

270

216

Tranqurlizers

185

,135.

__u_-

"316

600

416

J/

_.i

sales.

point

for

1956

was

major
categories
and
subtracting
the
-i
major category total of $1,120 million from the composite value of
$1,500 million for the whole industry to
give
an
"all other
of $380 million*
(See Table IV).

Biologicals and
Cardiovasculars

base

+

i

i-

1 on

cm

800

Innovation

404

v

575

::

*; 1,095

1,715

"All
Grand

Total

1,502

TABLE

.

Comparison

1,895

2,728

3,795

of Five Major Projections

Sales Value

Total

;

"All Other"

Ethical Sales

Year

*
•

Sales Value—Ethical Drug Industry

*

■J

No.
(!)

'

.

v

:

.

,

Average
(2)

Rx
•

'

'

•

(3)

Drug Expense

I

(4)

1

*

-

Average
Mortality

*

--

r

Average
(5)

Drug Category
Grand

Average

Median
Range

'
,

380

1960

720

1975

1965

„

3,320

3,970

1970

4,100

5;630 1975

H99

2,850

2,240
2,100
1,850
1,840
1,750
1,813
2,420
2,047
2,236
2,020
2,080 •?
2,050
1,875
2,015

515

2,040
2,850

2,670

2,020
2,040

.

"

'

Average

1,500

1970

1965

1960

-

Category '

1956

(millions of dollars)

Projection
Economic
v

3,700
3,073
2,700
2,660
2,610
2,657
3,286
2,366
2,826

6,000

9.800

4.473

6,467

3,800

5,220
5,050
4,700
4,990

3,700
3,560

3,687

1

see text.

It

assumed,
with
good
that this omnibus category

was

reason,

would, grow in future yesrs 3t the
same rate as the overall industry

itself.

■'

'

4,292
2,710
3.501

3,082

2,762
2,922

3,614

4'53q individual projections pf the fu-

2,842
2,728
2,825

3,784

4'339 drug industry.

3,795

5 507

3,848

5 215

2,020

2,728

3,795

5148

423

416

972

2196

' *10

*7

*12

.

3.955

5,461
4 271
=

14o

...

Comparing the Five Projections
We

ture

have
nave

sales

now

iiuw

value

five

seen

acta

of

*

Plus

or

minu>

"»c

the

ethical

(1) An economic projection for
the past 20 years, employing data
from six primary sources.
(2) The growth trend observed




7=20 in Rx sales since 1939.
(3)

The

'

Hnnop- InhannAe

personal

ex-

be watchecl

in terms

consumption

PPtKSWBr""*
L.

re-

Jenkins &

E.

Co., Inc.

Now With Atkinson Co.
(Special to The Financial Chronicle)

PORTLAND, Oreg. —Frederick

of

this study.

Most other innovations will

G.

White has become

associated

with Atkinson and Company, u. s.
National Bank Building. Mr. White

place existing drugs. Bear in mind,
bowever
that such replacement was formerly for many years with
usuany expands the market. The Blyth & Co., Inc.
siZable
funds for
supportive or
c.
no
l
defensive research — for the de- New Dinger, Deane Branch
velopment of improved products—
BEAVER FALLS, Pa. — Singer,
do

expand

the

are

market

to

some

resultant

prodmade commercially avail-

when

the

Deane

under

jng

has

opened

in the Sahli

the

a

Build-

management

of

Harry R. Evans.

time

is

undoubtedly

not

a

Joins Robert Levy
(Special to The Financial Chronicle)

CHICAGO, 111.—Karl P. Zerfoss,

£r*» has become connet^ed with

Robert J. Levy & Co., First National Bank Building.
With Keller Brothers
(Special to The Financial Chronicle)

BOSTON,

word
wora

of
oi

caution.
cauuori.

A

—

Albert

H.

Brothers

Securities

Co

•

ZerQ Court Street>

Jnc

"

Now With York Co.

longlung-

range forecast is not a blueprint.
is a guide. It is not a plan of

Mass.

1U(WiJi

become affiliated with

Cohen
xrpiip**

much attention.

^

Scribner

no one

pectancy. It seems obvious that
this will be the direction medicsl
and drug research will take, when
the
problem
of infectious and
chronic disease no longer needs
^
^

&

branch office

problem that will be solved com¬
pletely and absolutely, but study
of the problem may give us many
added years of active life ex-

major

'

Range %____

to

the predictions made in

with

1,030
1,420

5,630

research

will live
forever, cardiac and cerebral acci¬
dents will never be completely
eradicated. This argument remains
a powerful force on the side of a
more conservative prediction. The
aging of body organs and tissues

Proiccted

Sales Value

VI-jV-

Curtis

Building
s'

1WO vyiin ™use Chronicle)
•'Onannes
(Special to The Financial

undesirable turn of events

Assuming that

(millions of dollars)

5,507

Jackson

dayton, o.—Jesse B. Hearin,

able.

Other" Drugs

Projected

'-

force

u.cts

Projection of Sales Value

2,880

an

extent

TABLE IV

Total

TWrt With

woui(j appreciably slow down the
growth of the industry. This is a

calculated by adding all the
*

170
r V '170

and

portant segment of ethical

2,627

: 38

80

;

deletions,

product

The

Webber

Union Commerce

'wouhf
affect

undoubtedly

Such

62

;47

: 380

additions

own

38

,

"All

Corticoids
jrticoids

indications. It has its

35

i

paine

overestimated.

are

S sKSl'tt'anWS
annual

5$

39j0

Sulfas
Other"

projections

59

33

export-import

into the crystal

56

d; 31.

50^.^53 %

Antibiotics'

gaze

102

24
•=

175

________

1975

65

one can

43

_

54.

_____

1910

1905

,

195

-19

-

Barbiturates

I«>fi0

.

the

1962

ball of ethical sales without taking
into account the "all other
drugs

(millions-of ^dollars) didi v:>
'

Category '

in

increase to

"All Others"

No

With Paine, Webber

years,

(Special to The Financial Chronicle)

Changes

are

Major Drug Categories

experts have, for
been exceeded

company

past 20

in fact.

With the only
domestically,
but
m
the
the value major foreign markets, will ob$316 mil- viously affect domestic production.
"
"
^
—
*
lion in 196*5, $416' million in 1970
So will Census Bureau population
io-7«
and $800 million in 1975.
estimates, if fertility assumptions
in

breakthrough

would then

CLEVELAND, Ohio—Sanford J.

Sacks has been added to the staff
achieved years "ahead of time." of Merrill Lynch, Pierce, Fenner
The most optimistic forecasts of & Smith, Incorporated, 55 Public
future mortality rates by insurSquare.
Success usually is

the 1956-19o7 period.

in

Merrill Lynch Adds
(Special to The Financial Chronicle)

is also the matter of the
of
successful
research

breakthroughs.

developed for the treatment of
mental disease would be, by 1962,
for

consider data $871,950,000.
tne
„c„ ^

primary

each projection.

better

a

of

sources

and the different methods used for

compari-

and in the absence of

sons

tranquilizers

i

calculated for 1975 appears

the

value of the future market for timing

?aSe n?nr ioilf ai^i1
These projections assume that a
i>*259 m,ldl°n *or 1965' ma-1or discovery in the chemo$443 million for 1970. The value
therapeutic

various

WeU Be aB0Ut tn° Same'
On

or

Bank System to meet the rising
demand for home mortgage money.
.UR?n i^s"a"c.e .of the notesout-

migh? ment"" wto ^w^co^ef

"L, bolboifthe lame

the

heart disease
fteait disease.

tho
the

plus

r

the

years

1970 and 4.40 in 1975. See Table II.
Tj-,,1
The

projected

rate

...

ber institutions of the Home Loan

(Special to The Financial Chronicle)

SAN FRANCISCO, Cal.—George
.

_

_.

,

.

.

,

,

...

action, but a prospect to be used A. Godderis .snow associated with
for changing a plan of action. It York & Co., 235 Montgomery St.,
is a device, like navigation by members of the Pacific Coast
dead reckoning, to be altered and gtock Exchange. He was previchanged as soon as the situation
. .
. Mlltlial cprnritieq
warrants a change of course. The
Wlth First Mutual Securities
longer the prediction, the less Company.

Commercial and Financial Chronicle

The

.

Thursday, May 14, 1959

.

.

(2220)

32

But let

Continued from first page

growth

so manv

of the reformers are

constantly insisting

Inconsistent with the Facts
course,

this

want-of-purchasing-power theory of

and stagnation is inconsistent with the
obvious fact that the very production of goods and

business recessions
rather

purchasing power in the amount of the
goods—purchasing power in the form of

services creates

of

cost

wages,

such

interest, dividends and the like. Unfortunately,
truth somehow does not seem to register

however, this

fully with the rank and file—or even with a good
who should realize its validity. Fortunately, though,

many
actual

marshalled to show clearly and
convincingly that diversion of profits to wages would not
do any of the wondrous tricks that labor and many of the
"modern" analysts loudly proclaim. With a large number
of labor contracts carrying increased rates of pay, and
the prospect of others, it would appear appropriate at this
facts and

of this concrete evidence.

income
should
therefore be an excellent one for the purposes in hand.
Total corporate profits, according to the Department of
Commerce, came to just short of $45.5 billion. A hand¬
some figure—-but let's see what became
of these large
earnings. First of all. Uncle Sam and the various states
which have income tax systems

took about $22.4 billion.

$23.1 billion. Somewhat
more than half of this latter amount, $12 billion, was paid
out in dividends—going, by and large, to those consumers
whose purchasing power must sustain industry and trade,
and whose lack of purchasing power, according to the New
Deal ideas, is the chief cause, or at least one of the chief
causes, of recurrent and prolonged periods of depression.

That left the

corporations

How
Now what

some

corporations earned but did not pay out in dividends?
Unfortunately, figures are lacking for a determination of
the disposition made of this entire sum. The Department
of Commerce has. however, provided figures for all cor¬

porations.-except banks and insurance companies. Re¬
tained earnings are estimated at $10.2 billion for the year
1956*. Together with $17.7 billion in depreciation reserves
these corporations
had funds derived from "internal
sources" of some $27.9 billion. To these may be added
$16.3 billion obtained in the course of the year from the
sale of securities and from bank loans and other sources
of short-term funds. Add all this up and we have a total
of

$44.2 billion.
What did these

corporations do with all this money?

Well, first of all they did not hoard it. At the end of the
year they had only about a half billion more cash and
deposits than they started the year with. And to have this
much on hand at the end of the year they had to dispose
of some $4.8 billion of government securities. Nearly $30
billion of these funds at the disposal of these corporations
went for upkeep, improvements and additions to plant and
equipment. Of course, they could not add so substantially
to these physical assets without hiring and paying wages
to large numbers of workers in their own plants and else¬
where. No loss of consumer purchasing power here! In¬
ventories at book value were increased during the year by
some $8.4 billion. A feat not
attainable without paying
out

large amounts in wages to consumers!

suppose

full utilization of

that in 1956—a

resources

The road they travel is Socialism,

Continued

from

of virtually

page

with

government.

more

'

ingenious

more

required only that the people
safeguard and use the remarkable
tools given them if they valued
their
liberties and
were
deter¬

and

shows

which

returns

in

up

inefficiency,

travagance,

means

It

ex¬

waste,

We have that too.

corruption.

Already we have created a se¬
of "no man's lands" in vital

ries

of

areas

public

policy

This

ministration.

is

and

in

labor-management
relations,
in
safeguarding the Nation against
Communist
subversion,
and
in

government

of

institutions

that
are

elementary proposition

an

and man is re¬
what happens to

made by man,

for

when he

was

this

noted

Franklin

Benjamin

asked what the men

wrought.

He
was
said to have answered: "A
Republic, if you can keep it."
A half a century later, Lincoln
spoke in the same vein, when he
at Philadelphia had

destruction

"If

ourselves

be

lot,

our

we

its author and

be

As a nation of free men,

finisher.

must live through

we

all time or

die by suicide."
Men's Lyceum,

(Speech to Young
Springfield, Jan.
27, 1838, Works, I, p. 109.)
Today, men all over the nation
are gravely concerned about what
is
happening to this American
heritage cf good government.
For at least the first century of
our

commis¬

bureaus, and agencies has
up and endowed with a

sions,
been

Government

set

powerful combination of legisla¬
tive, executive, and judicial
powers in total disregard of the
principle of separation of powers
on

which freedom depends.

Struggle for Power Within the
Federal
Government.
With this
weakening of Constitutional prin¬
ciples and limitations, the way
opened for a struggle for
between
the
several

was

power

declared:

must

of

network

American Heritage?

is

national existence, a free peo¬

Every sizable voting group de¬
its
cut
in the form of

mands

subsidies.

Legislation is cut loose from
principles. In its place we have
expedient improvisation or sur¬
render to the blackmail of pres¬
sure

groups.

and

skyrocket

Taxes

mounts

debt

Public

the

would
details

system

of

altered.

the

take

book

a

of how

touch

me

cover

the American

government

Let

to

being

is
a

few

of

That,

of

too,

process.
As major

people.
the public faith in

the security of our

"Ultimately

government is destroyed, and in
chaos that follows, the peo¬

the

accept a dictator.
is their liberty.

willingly

ple

The price they pay

The hoi lowest phrase is

can't

"It

declares:

that

Federal Supremacy Reigns

here."
What Has Happened Here

around

look

But

distance

from

the

limits

set

in

the

Constitution. Today, it

empts

the

bodies

either pre¬
encroaches
of State and local

strongly

or

power

and

covers

interest formerly

almost

every

of private

con¬

cern.

The whole conception

of a divi¬
sion of powers between Federal,
State, and local governments is
corroded.

This

concentation

of

in the Federal Government
cancels out the great principle of

power

from

and

exceed*

the

them

people

complicated,

self-reliance

Their

authority

originally

power?

confused and discouraged
doing things for themselves

workers.

been

government

a central source, the
spirit, and character oi
the people are altered.
With government operating at a

The

has

today.

you

such out¬
rageous taxation, such a stagger¬
ing national debt, such waste of
public money, such a pyramid of
government subsidies, dangerous
inflation, so many lavish political
promises, such a gigantic Federal
bureaucracy,
so
much
govern¬

Have

ever

you

seen

did they

ties

.

.

.

.

.

did with their own abili¬
what they provided in

of schools and roads and
hospitals they did with their own
savings or taxes at the local level
what they had was character
all they did was work. . . .
the way

drawn to

In the last 30 years,

Federal

the one
happen

we

vitality,

grow

Centralization of Government in

be

paid off except by ruinous infla¬
tion or repudiation.
The Federal
debt is a time bomb hanging over

Government.

principles of good government \>
the corruption of the democrats

ingly

highlights.

astro¬

to

cannot

heights* and

nomical

ment favoritism to special groups,
have been wit¬ such moral laxity, and so little
nessing over the past 30 years. responsibility in public life?
And
in this
appraisal let us
The President has gained stronger
look at ourselves, the American
powers in relation to the Con¬
As politicians bent on
gress than the Constitution con¬ people.
templated giving him. The Ju¬ their own perpetuation promised
diciary — chiefly the Supreme more and more and gave more
Court—has seized upon legislative and more of what was taken from
the people
the people grew to
powers never vested in them in
expect and demand more from
the Constitution.
•
Corruption of the Democratic government.,
How much Federal aid did our
Process. Perhaps the most damag¬
forefathers receive
what they
ing effects of this corrosion in

branches

are

accelerated in the last 25 years.

'
destroy

incentive.

.

ple under God and free govern¬
ment
built
the
most
powerful,
most prosperous nation on earth.
But since then a process of cor¬
rosion has set in which has greatly
It

the

ing list of States are in deep fi¬
nancial difficulty.

ad¬

evident

protecting the citizens from double
jeopardy.
Concentration of Powers. Not
mined to keep them.
only has centralized government
Dilution of Our Heritage
grown,
but it has concentrated
What
Has
Happened to This powers in its structure. A whole
It

be¬

only

Not

bounds.

all

J';

'.

goes

Federal Government, but a grow¬

of
diffusing power has ever been
conceived by the mind of man. Its
wisdom is grounded on the eternal
truths distilled from thousands of
years of mankind's history.
No

is written in




perverters of democracy

democracies.

yond

national and State powers.

on

therebv.

more

the people are

more,

the 'infirmity that attends mature

11

Rights, and by limitation

of

upon

say

the

and

Men,Not Crises, Aie Responsible
For Type of Government We Have

than was actually the case had
been paid out as wages without increasing prices so that
profits were proportionately lower. Obviously either
dividends would have had to be smaller than they were or
else retained earnings would have been lower by an appro¬
priate amount. If dividends had been reduced, plainly one
set of consumers—wage earners—would have benefited
at the expense of another set of consumers—those who
provided the capital for business, assuming no reduction
in employment. And nothing else. Let no one suppose
that dividends these days go to a few excessively wealthy
individuals. If they did most of them would
go to Uncle
Sam, and hence to the general consuming public. As a
matter of fact, the income of the
very wealthy these days
and times comes from
tax, exempts very largely—and
wasteful state and local expenditures are encouraged
sum.

$5 billion

year

and

More

Government spending

extended and enlarged far beyond

and labor—some substantial

of

these trends are inevitable.

Evidently, the higher-wages-for-purchasing-power
theory does not stand up under factual analysis.

Washington.

Billions More for Wages?
us

Trends

consequences

respond

the

Now let

dismal

The

Current

of

Consequences

promised in the process.

them.

happened to that other $11 billion which

for

compelled to look to government
for solutions to their problems;,

sponsible

Money Was Spent

of favors

trade

a

votes.

goods would be correspondingly reduced. And equally
important, it is all but certain that capacity to produce
efficiently and abundantly in the future would be com¬

Bill

Corporate profits, taken either before or after
taxes, were at a record level in 1956. That year

than

more

figures can be

time to cite some

ground

compete

purchasing power for consumer

their

from the

move

sinkholes

in industries sup¬
plying materials and constructing such plant and equip¬
ment. But if the required funds were provided by inves¬
(consumers)

of

corruption

They

of principle to the
of
expediency.
They
in out-promising
each
other, and elections become little

high

resulting loss of wages by men working

tors

this

by

democracy.

and equipment would in
proportionately larger amounts have been financed by
funds raised from external sources—or else curtailed with

upon.

Of

fected

that dividend payments were not
earnings would be proportionately

suppose

outlays for plant

and

lower,

It

We See

As

us

reduced. Then retained

is

weakened

lazy become parasites on the

interest in
acquiring
the
knowledge
they
need to hold government account¬
able.
They give up the hope of
influencing government. Already,
less
than naif of our
potenial
voters trouble to go to the polls.
When
the
public is
in this
weakened. state, the self-interest
groups
move
in.
Even though
pressure
groups
represent only
minority interests, they can wield
considerable power because they
are
tightly organized, and the
public is not.
It is the same
They

lose

.

.

.

...

wanted was self re¬
but look at us today.
Security is above self respect, we
ask more money for less work,
we are weaklings who want gov¬
ernment to take care of us when

What

they

spect

.

.

.

should be taking care

we

selves,

subversives when we

them

ish

and

we

of our¬

criminals and

pamper

we

should pun¬

condemn those

among us With the traits of
forefathers as reactionaries.

their
.

.

.

people have so accepted
arguments
of
compromise
we are willing to send men

We

as

the
that

a

to run our governments who will
compromise away basic principles
men
who are even willing
.

.

.

to

appease

promise.
tool

.

in the name of com¬
.

is a

Compromise

.

lawmaker

the

of

but

to

principle for
ex¬
to destroy values
divided powers on which all his¬ situation in which a small inside pediency
for fear of disagreement ... is
minority controls a corporation
tory shows liberty depends.
It weakens the idea of govern¬ when the stockholders are many carrying the theory too far.
Here we are just a little over
ment by consent of the governed and scattered.
We have come pretty far along a year from a Presidential elec¬
by substituting centralized gov¬
tion and where are the words of
ernment for government
closest in bad government, when a bill
fritter

way

...

,

to

to the people.
Government

itself is weakened

end

labor

-

-

.

flagrant
corruption
has
to
have

unions

in

it

when it attempts to

"sweetener"

natural

palatable to labor leaders.
Our
public men are also

overreach its
The result
law of diminishing

jurisdiction.
a

to

make

in
a

it

strength
in

our

reliance

af¬

from

the - candidates?
highest office
speaking of self

Who in seeking the

even

land
.

..

is

harder work

self respect.

...

.

.

.

yes,

No, we are

Volume 139

Number 5846

.

.

The Commercial and Financial Chronicle

.

the

hearing the hackneyed shibboleths

strident, biased voices of the
special interests.

of giveaway
more for nothing
unbalanced budgets . .
give
in to the union bosses for they

and

have political power

the states

in

centralize

of

.

•

.

.

.

.

In

.

can't

do

it

.

anymore,

government.
ideas

..

These

aren't

new

.

These

in
and

trends

I

nations

to

to

and

respect and hard work made this

country, but these trends
today can destroy it.
Needed:

survival

I

do

1

democracy;
faith in it.

■f. When ; it
it

is

on

good

insure

the
free

of

progress

Christopher

of

B.

been

C.

added

the

to

Christopher &

staff

Co.,

118

West Fourteenth Street.

McQueeny-Hendon Adds
of

KANSAS
abeth

been

has

added

McQueeny-Hendon,

and
As Lincoln

.

(Special to The Financial Chronicle)

.

It

must

have

to
It
to

to educate, not
passion and conflict.

have

courageous

Special to The Financial Chronicle)

news¬

a

press

men

concentrate its force and to speak

for it.

CINCINNATI, Ohio—Donald S.
Bean has joined the staff of Mer¬
rill

Lyneh, Pierce, Fenner & Smith
Incorporated, Dixie Terminal
Building.
I

The Men We Need

brings

to

back

me

With

the

heart of my theme: Today's crisis

is in the thoughts and actions

of

men.

need

more

men

of

Special to The Financial Chronicle)

(

ST.

LOUIS, Mo. — Herbert E.
Dempsey-Tege¬
&
Co., 1000 Locust Street,

prin¬

ler

of conviction, men of members of the New York
courage.
It takes principle, con¬ Midwest Stock Exchanges.
viction, and courage to throw off
the blanket of conformity which
:
Suffocates public life.
more

men

like

(Special to The Financial Chronicle)

Bob

like Senator John

men

for years, and often

single-handed,

American Government.

significance of
to

free

a

L. A.
Senator

realizes the
balanced budget

Bridges who

Styles

a

and

country

hammers

DENVER,

Colo.

has

Reddick

like

men

John

Foster

BOSTON,

I would like

These

this.

the

public

are

men

courage

interest

to

say

popular with the people, but un¬
popular with the special interest
groups which seek
to dominate
the government.
Value

Citation.
a

hi$fjior.

othef3£- to
persist and fight harder in right¬

It

inspires

,

causes.

eous

them

and

It shows

them -they

Roche

lic.

It helps to

mind
It

distinguished

on

H.

clarify the public

wider

public

sup¬

port, and thus helps to neutralize




this

obtainable

them,

E.

Investment

park Building.

Co., Wal-

Vv

offered in the

obligation has

been

in

the

securities

that

available

to

with

high
profitable operation. If this were not
so, and the banks had surplus funds of their own, they would not
be selling any near- or long-term Government obligations since
the way in which earnings are obtained is by keeping funds to
work even at declining interest rates.

221-Day Issue Barely Oversubscribed

obligation, which was not eligible for payment in the tax and loan
account, also went above the average yield at which the Treasury
sold them to those that can use these bills for the payment of
taxes on Dec. 15. The demand for this security and the 340-day

4% certificate at

a

discount

yield 4.05% in place of the 1 V\% certificate which comes due
on May 15, was in line with what the financial district had been
looking for, even though some money market followers were of
the opinion that a somewhat higher yield would have made them
more attractive to those that were given the exchange offer.

the

fiscal year

out of the

1958/1959 major operations

the guesses as to what is likely to happen to the dis¬
rate.
The money restricting policy of the Federal Reserve

way, come

count

Board is not

going to make money any easier and, with the outhilt, there will not have to be
from the large money center

of-town banks loaned about up to the

L.

■-

15

S.

Four With Robbins

>'■

&

(Special to The Financial Chronicle)

WORCESTER,
Condos,
Emil
Eisenberg and

connected

Co.,

Bache Adds to Staff

(Special to The Financial Chronicle)

are now

GREENSBORO, N. C.—Earl R.
Mass.—Vasil V.
Eisenberg,
Gery Betts, Jr., has been added to the
staff of Bache & Co., 108 West
Margaret Tkacik

with H. L. Robbins & Co.,

Inc., 37 Mechanic Street.

Inc.,

MINNEAPOLIS, Minn.—Ronald
Bruch has joined the staff of
& Company, First Na¬
Alice M. tional Soo Line Building.

(Special to The Financial Chronicle)

L.

Jamieson

Minn.

—

Market Street.

With McDaniel Lewis

Joins Jamieson Staff

Street.

PAUL,

first
out¬

side of New York and Chicago.

State

,

become

Jensen has become affiliated with

Hue Investment

As a matter

connected

Co.,

Robbins

prime bank rate will be advanced.

Joins La Hue Inv. Co.

La

these funds

a

(Special to The Financial Chronicle)

ST.

made

be made by the banks.

can

To be sure, the money market must be on the tight side,
the demand for funds sizable and the rate of borrowings at a

(Special to The Financial Chronicle)

GREENSBORO, N. C —Willard
C. Robbins is now affiliated with
McDaniel Lewis & Co., Jefferson
Building.

With Merrill,

Co., Pioneer-

Straus, Blosser Adds

Endicott Arcade.

Turben

(Special to The Financial Chronicle)

CLEVELAND, Ohio — John F.
Mo.—Mary T. Turben is now with Merrill, Tur¬
Forrester has become associated ben & Co., Inc., Union Commerce
of the New
with Straus, Blosser & McDowell, Building, members
York
and
Midwest
Stock
Ex¬
21 West Tenth Street.
(Special to The Financial Chronicle)

Joins Einer Paulsen
(Special to The Financial Chronicle)

Cal.—Carl L. Chit¬
joined the staff of

SAN JOSE,
tenden

has

KANSAS

ties

Company,

1616

CITY,

changes.

Einer Paulsen Investment Securi¬

Joins W. D. Gradison

Washington

(Special to The Financial Chronicle)

support,

the real issues at stake.

encourages

&

■

has

Mechanic

37

and Avenue.
that they do not stand alone.
It
alerts the attention of the pub¬
have

were

opinion, not a tew money market experts believe that the
rise in the prime bank rate will come from commercial banks

(Special to The Financial Chronicle)

of the Good Government
In these circumstances

citation is more than an

States

Ohio—Robert

affiliated with Cen¬

The 340-day bill appears to have been

of

WORCESTER, Mass.—Russell J.
with

on

banks before the

Edward

—

become

!

they

for causes, not un¬

dare to speak

tral

now

slightly above the 4% level,
conditions, the sell¬
ing of this security by the deposit banks likewise contributes to
the uptrend in return.
The commercial institutions have the
(Government) deposit, which was created through the purchase
of the 340-day bill and can make use of these funds until they are
called upon by the Treasury for payment. Usually, these monies
remain with the deposit banks for a period of time, say 20 or 30
days, and because of this they can afford to sell out the issues that
created the deposit, at a loss, since earnings in excess of those

today being

because

—

MANSFIELD,

which reflects in part the tight money market

Street, members of the New York
and Boston Stock Exchanges.

because. they
to act in the

assailed

bitterly
have

Mass.

has

Estabrook

with

La

Others have and will extol their

but

the

to

Joins H. L. Robbins

tor John McClellan.

With Central States

too much more of a demand for loans

Rowland

Let us have more men like
those—Admiral Strauss and Sena¬

virtues,

added

(Special to The Financial Chronicle)

munists and expose them.
..

F.

Huey Co., Equitable

to stand up to the Com¬

courage

Robert

Higher Prime Bank Rate Expected

Estabrook Adds

Byrd
and Admiral
Jtickover. and Herbert Hoover.

who, more than any man
in
Government
today,
under¬
stands
the
true
nature
of the
Communist threat and has the

yield

With

Walter

—

been

staff of L. A.

Harry

And

—

(Special to The Financial Chronicle)

Braden is

combined refunding and new money
to have made the grade, although there

not too much to spare.

Huey Adds

for Government economy in
Building.
the Appropriation Committee and
on the Floor of the Senate; men

Dulles

its

the best received of the several issues which

(Special to The Financial Chronicle)

away

like

was

in

appears

Ohio

Co., Inc., The 1010 Euclid
Building.
&

to

ATLANTA, Ga. — Samuel N.
We need men like Joe McCar¬ Evins, Jr. is now affiliated with
thy who, despite his shortcomings, First Southeastern Company,
did so much to alert our people Trust Company of Georgia Bldg.
to Communist subversion of
like

CLEVELAND,

S. Jacob is now with Ross, Bor¬
ton

market for

The Treasury offer of a one-year

(Special to The Financial Chronicle)

nal Revenue Service.

men

.

With Ross, Borton

been made available.

With First Southeastern

corruption in the Inter¬

need

Treasury

Ex¬

were

(Special to The Financial Chronicle)

Special Factors Favored the 340-Day Bill Issue
The

Stock

formerly with
Livingston, Williams & Co.
•
,

a short while, the
question is raised as to how soon, or when, the discount rate and
the prime rate will be moved up.
All in all it looks as though
higher interest rates are in the making.

raising operation

Midwest

bill, in the opinion of not a few money market specialists, will
increase after the refunding and new money raising results have

Sutter Street.

J. Williams who fought doggedly
to expose

distant Governments.

and

changes. Both

anticipation bills which was offered
oversubscribed, with the
amount of the oversubscription being less than $200,000,000. This

FRANCISCO, Cal.—Eliza¬
Taft, whose
dedication to the
beth J. Sanderson has joined the
public
interest surpassed
even
staff of White, Weld & Co., Ill
his own life ambition.
We need

more

With the Treasury out of the

York

in the amount of $1,500,000,000 was just

SAN

We

James

The issue of 221-day tax

With White, Weld

need

ishness in the

and

men

We

of di¬
offered refunding and new money raising
issues. Even though all of the securities used in this combined
operation were short-term obligations, there has not been any
noticeable pick-up in the demand for intermediate- or long-term
Governments because the yield is better in both corporate and
tax-exempt bonds. Also, the Treasury whenever it is given the
opportunity will use middle- and long-term issues in order to
extend the debt maturity.
These forces do not make for bull¬

enough level to make this

Dempsey-Tegeler

Matthews is with

We

—

Robert T.

and

The fact that this long Treasury bill was eligible for
payment through the tax and loan account was the principal
reason for the good reception that it received.
Even though the

SALISBURY, N. C.

(

alerted.

ciple;

Ohio

Shuber
have become asssociated with Ball,
Burge & Kraus, Union Commerce
Building, members of the New
Bishop

May venture.

With Morrison & Co.

— Kenneth
public opinion, can change the L. Mattox is now affiliated with
government.
." (Speech at Re¬ Morrison and Company, Inc., 418
publican Banquet, Chicago, Dec. South Main Street.
10, 1856, Works II, p. 385.)
\ But to Be Effective, the Public
Joins Merrill Lynch
Must Be Informed.
It must be

This

S.

gesting the recently

CITY, Mo.—Mrs. Eliz¬

Smith

B.

to the staff of

"Our government rests in pub¬
lic opinion. Whoever can change

must

Governments

The market for Government securities is in the process

(Special to The Financial Chronicle)

and Inc., 440 E. Sixty-Fourth Terrace.

swiftly

act

can

has

son

have

informed

With powerful force.
said:

and

to

(Special to The Financial Chronicle)

this

despair

not

American

arouse

on

men

JOPLIN, Mo.—John H. Wilkin¬

An Informed Public

note.

paper

Reporter

CLEVELAND,

By JOHN T. CHIPPENDALE, JR.

preserve

Joins B. C.

see

we

>il would not want to end

alerted,

Our

*

government.

at

heigth of their development
industry, culture, prosperity,
military might. Years of self

strong

courage.

government,

described

have

nations—but

bleak

element

public life—the number of

principle and

Ball, Burge Adds
'Special to The Financial Chronicle)

increase

rare

strengthen that

government,

happened again and again
in history—not to poor, undevel¬
the

can

we

.

have

oped

way

This is the way to restore good

they have wrecked
government after government in
the history of man.
.

this

33

(2221)

CINCINNATI, Ohio

—

Michael

Joins Saunders,

Stiver

(Special to The Financial Chronicle)

Ohio — Gerald
Walter O. Eckert
with W. D. Gradison & Co., Dixie S. Powers is now connected with
Walter O. Eckert, partner in C. Terminal
Building, members of Saunders, Stiver & Co., Terminal
New
York
and
Cincinnati Tower Building, members of the
B. Richard & Co., New York City, the
Midwest Stock Exchange.
Stock Exchanges.
has passed away.
H.

Rohs

has

become

connected

Send your
in

care

gift to "CANCER"

of your local post

office

CLEVELAND,

AMERICAN CANCER SOCIETY

The Commercial and

Financial Chronicle

.

.

.

Thursday, May 14, 1959

(2222)

34

activities
of
various
classes
of
legerdemain, tive aspects of the proposed trans¬
persons such as floor traders and
a
very
sub¬ action, if there are any.
information
with
respect to,
stantial block of F. L. Jacobs stoc^
The Commission is not solely
among other things, margin trad¬
had
been
distributed through a concerned with fraudulent repre¬
ing,
short
selling and odd-lot
highly reputable broker on fore¬ sentations in the otfer and sale
transactions. All of this informa¬
closure of one of Guterma's loans.
of securities, such as those broad¬
tion is currently reviewed by our
boiler

The Current Market and

of his

600

rules for

duty of prescribing these

Another

customer

over¬

heard a couple of strangers dis¬
of preventing exces¬
the purchase cussing the issue in a board room,
and
at
once
placed his order.
or carrying of securities. However,
Mind you, the prospectus was not
the Acts contain specific prohibi¬
even in print, let alone filed, and
tions against certain types of ac¬

the purpose

sive use of credit in

tivities which might endanger

or

it

out

turns

the

company

with

venture

new

a

that

no

is

earnings

impair the free and open character
of our security markets. The Com¬ record and rather dubious pros¬
mission must try to enforce these pects. I have no doubt at all but
will

stock

the

that

be

oversub¬

provisions and must be very much
concerned
with
any
conditions scribed as soon as the prelimi¬
We
which might directly or indirectly nary prospectus is available.
have been completely unable to
have such an effect.
Except Tor these limitations on

credit, the Federal securities acts

provide any administrative
or procedures designed to
control or prevent speculation as

do not

power

such, and leave to the individual
free choice as to whether or not he

who

or

it.

started

ably be

a

It

will

prob¬

spectacularly successful

offering, but I would be fool¬
hardy to forecast what the end
result will be to the purchasers.
Developing

Per¬

into the market.

should go

discover where the rumor started,

This

Honest Market

an

psychology is no doubt a

haps I should also emphasize what
factor in the bullish action which
is doubtless quite clear that the
has dominated the market price
Commission does not have any
of many
issues during the past
power to pass on the quality or
merits

investment

investor

The

lew years.
Many of these situa¬
security.
tions and the enforcement prob¬
speculator

of

a

the

or

must make his own decisions. One

primary purposes of these
statutes and of the state Blue-Sky
laws is to make available to the
of the

involved

lems

continuing

of

Commission, which I rep¬

the

to

are

vital interest and importance

and

resent.

It should

be of equal im¬

portance to each and every broker
public generally reliable informa¬
and dealer that the integrity of
tion to assist in the making of
served.

Unjustified Fluctuations
We

recently
expressed
in
public
pro¬

bave

concern

some

nouncements and before the Con¬
gress

the

over

which
have

to

extent

the prices of some securities
fluctuated
without
visible

eco¬

marketsw be

securities

the

these decisions.

I

pre¬

convinced that

am

the

to

some

$7.

at about

customers

in the stock had
been suspended by the New York
Stock
Exchange, and since the
source
of the stock would seem
Since

broker.

it

sold

had

broker

The

Enforcement Activities

that

discovered

we

,

dazzling

Guterma's

Continued from first page

trading

suspicion

to have warranted grave
as

to the soundness of Mr. Guter¬

ma's empire, we asked the
world

persuaded him to get
It turned out

ever

situation.

into

this

that

one

office

his

of

into

gotten
an

had

help

with

conversation

a

attendant at

industrial

an

hibit of General

ex¬

Electric, and had
that
Symphonic

informed

been

broker,

curiosity, what in the

out of sheer

Electric, which was in process of
acquisition by Jacobs, had a fine
future.
Upon
the
assurance
of

through the

cast

rooms.

It

also

of

tapes

"market

sur¬

the

the

7

New

York

and

Exchanges. This
unit also observes transactions on
the other exchanges and checks

American

Stock

the. -• quotations - in the over-thecounter market as they are pub¬
lished.. in

apparently with¬

sometimes occur,

a

recorded transactions on the ticker

the

in

have

veillance unit" which watches

price of securities,
accompanied
by
unprecedented
activity in them. While we must
necessarily rely to a considerable
extent upon the cooperation'and
self-regulation of the exchanges,
we • find
that' these
gyrations
tion

We

staff.

deeply interested by the
sudden and unreasonable fluctua¬
is

daily i National

the

particular Quotation Sheets, for the same
•purpose of detecting any unusual
inquiries by the floor officials; of
activity or price movement in any
the exchanges.
•
security which might indicate the
presence
of manipulation.
This
Preventing Manipulation
surveillance covers some 20,000
The
out1

arousing

any

statutory

activities

of

powers

the

over

are

Whenever a question con¬

issues.

manipulative
extensive; Tt is un¬

Commission

cerning market activity and price
level
arises with respect
to a

to create
particular security/a preliminary
active trading
inquiry is commenced in which
security or so to act.to. raise
the
identities and
activities of
that the company
or
depress the price for the pur¬
purchasers
and sellers are as¬
year, without any up-to-date fi¬ pose of inducing the purchase or
certained and reviewed.
The
nancial data, without inquiry of sale of a security by others. It is
any
disinterested source, the
specifically illegal to wash sales regional offices also investigate
received
from
the
broker took delivery of the stock or to match orders for the;purpose complaints
and peddled it to its customers. of creating a false or misleading brokerage fraternity or the public
concerning suspected manipula¬
As you know, Jacobs is now in appearance of active
trading in
tive activity. The very existence
Chapter X, and the position of its any security. It is similarly; un¬
stockholders
is
something
less lawful to indulge in any deceptive of this surveillance has unques¬
tionably, like a cop- on the beat,
than enviable.
device, such as the dissemination
served as - a deterrent to illegal
of rumors by persons buying or
NASD Rules of Fair Practice <
tactics.7
r -?'v
selling securities to the effect .that
This situation, as well as the the
price of any security is likely ?
7 Floor Traders' Activities
i
'
incident I described, present one to fall or rise because of market:
aspect of a problem that must, it operations
conducted
for v that
I do" not .know whether floor
seems to me, give some pause to
purpose.
' •
r
trading' constitutes a' Tiroblem' in'
persons
such as you who have
In addition, it
may be
noted vthq^Midvi|bst: • ;Ex<&angje/;^
their eyes fixed on goals involving
that
the
Commission
is
given which we have madbTof^their ac¬
something more substantial than rule-making power in many im¬ tivities on other registered ex¬
Jacobs'

was

that

executives

pension

only

the

sus¬

flea bite and
expected a great
a

lawful

an

in

for

person

any

of

appearance

a

.

.

-

.

willingness of the American peo¬
ple to participate in private cor¬
porate
investment,
which
has the "fast buck." Just what is the portant areas in order that it may. changes have indicated that they
served in very large measure to duty of a broker? Is it to accept his
promote \ orderly
markets.* For 'tend- quite noticeably to exagger¬
make
possible
the
tremendous customer's order for what the bro¬ example, the Commission, after, ate "the swings of the market, par¬
capital expansion of the last few ker knows, or should know, is a studying the effects of short sell¬ ticularly where there is a rela¬
years,
is
based
in
substantial "dog," without protest and with ing
in
the
rapidly •declining tively • small floating supply of a
measure on the sense
of security the attitude of an indifferent seller market of 1937, adopted .a- rule
security. In* 1945, the staff of the
engendered by the public belief of merchandise? Or does he owe it covering' the prices at which short ^Commission proposed to outlaw all
that the present market is honest, to his customer to investigate care¬ sales
may be effected on an ex¬ such activity on the New York ex-;
•

nomic

apparently

reason,

the

as

result of baseless tips and rumors
and often with the apparent par¬

fully, and, even though his cus¬
ticipation of a considerable body just and fair. *
tomer does not ask for advice, to
An interesting collateral conjec¬
of public investors. These condi¬
tell him exactly what he is plan¬
tions by their very nature cause ture relates to the possible rela¬
us to be concerned whether what
tionship between the confidence ning to buy? I am willing to go
so far as to say that a substantial
in fact occurs is the manipulation reestablished
by
the
disclosure
contributing factor to the specu¬
of securities
prices by the un¬ provisions of the securities laws
lative hysteria which appears to
scrupulous, to the eventual detri¬ since the early 1930's when the
have attended the activity in some
ment of the naive and
Securities and Exchange Commis¬
unwary.

Our

is

concern

not

directly with

whether prices of securities go up
or

Wo down or go

rather whether

sidewise, but is

price movements

result from the judgment of buy¬

|and

ers

honest
from

sellers trading in fair,
and orderly markets free
manipulation
and
fraud,

based

upon

their

economic and

evaluation

of

established by Congress
and the increased investor gulli¬
sion

was

bility reflected in the resurgence
of the "boiler-room" technique, I

happy to be able to say that
of
the large boiler rooms

am

most

have been driven out of business
as

a

result

enforcement

Commission's

the

of

efforts.

There

has

has

issues

tomers'

men

that

term,
something
and that

fice

the

failure

:of

in

in

the

true

sense

of

is,

that

that they be
than salesmen,

more

they be willing to sacri¬
dollars

few

a

order

tomers.

other factors.

been

brokers to insist that their
registered representatives be cus¬
many

to

in commissions

protect

their

The NASD Rules

cus¬

of Fair

developed, however, a more elu¬
Practice go at least part way in
type of activity in which
Let me give you a concrete sive
small organizations open for busi¬ describing what I conceive as the
example of the peculiar psychol¬
an
issue or two and duty of a broker toward his cus¬
ogy which I am afraid may be an ness, sell
tomer when they say that:
aspect of the present bull market disappear, often to reappear again
"In
recommending to a cus¬
and which is responsible for much in another location and often un¬
of

our

Several

concern.

weeks

der

another

name.

Not

infre¬

tomer

the

purchase,

sale

or

ex¬

tele¬

change of any security, a member

a certain security
issue was phone salesmen work out of hotel
apartments and alleged
oversold, though the registration rooms,

shall have reasonable grounds for

ago,

had

we

an

tip

anonymous

quently,

the

long

distance

that

statement had not
as

even

been filed

yet. We investigated, and found

that there
of

truth

was

in

a

the

certain

element

accusation.

The

syndicate;, manager, a perfectly
reputable New York Stock Ex¬
change house, had actually re¬
ceived

so-called

interest"

for

be

to

were

"indications

more

offered

shares

by

tronics manufacturer.
and

tive

lifted
nor

found

we

elec¬

an

He

ample

of

than

insisted,

corrobora¬

evidence, that he had not
a
finger to sell the stock

breathed

a

word of the issue.

When we interviewed the brokers
who had communicated their in¬

terest,
had

.

we

done

found that most of them
so

because

of

orders

received from their customers.
we

interviewed

the

One of them had overheard

versation

at

So,

customers.
a con¬

filling
station,
pumping gas, told
his farther, who -told his uncle, who
put -in an order for five hundred
where

shares.

he

a

was

A second

the lunch

counter

had

out

run

where

he

of

business offices.
Our

main

effort,

that

recommenda¬

of

course,

is

the basis of the facts, if any,
disclosed by such customer as to

upon

mised

market, thus discouraging1, "bear
raiding." -As
recently
as -last
month, we filed an action to en¬
join violation of this rule: in; a
case

.' where

the

defendant

•

New York

had

in

stock. His

market

on

object

price

throwing
the

a

he

fact

was

down

owned

and

to

in

;

rules be placed
those exchanges,

floor trading
effect' upon

and, if floor trading constitutes a
problem on the Midwest

similar

Exchange, it is possible that your

buy

organization

own

might

find

it

expedient to suggest similar rules.

shares at the reduced market level
to

exchanges that more vigor¬

ous

no

suddenly

then

we are

to the

large number of shares

market

currently suggesting

event,

to drive the
by

rescinded/

may: be that they ought not to
been
so
dropped. In any

have

represented to his broker that he
was
"long"
several
thousand
shares
which
he
ordered
sold,
whereas

exchanges. In the early'

1950s, these rules were
It

his

previous sales. Since
;v- There are substantial grounds
selling short and since for
belief, indeed, that many of
his sales were not being made on
the current gyrations of market
the "up-tick" as provided by Rule
-prices may be linked up with a
X-10A-1, he ; became subjectV to thin
floating supply of stock. Out
civil and criminal sanctions.
of; the
$276.7
billion aggregate
Another example of our antivalue, of equity securities, listed
manipulative rules is the prohibi¬ as of Jan.
1, 1959 on the New
tion against payment by persons
York Stock Exchange, about $45
engaged in the' distribution of a billion were reported as held by
security to qthe& persons in con¬ institutional investors, the activ¬
sideration
of the solicitation of ities 6f
many of whom are, in the

he

cover
was

-

purchases of

securities of the-same

main, acquisitive and who sell
from
their
portfolios relatively
The -seldom. The average turnover of
his
financial
situation
and Commission has also adopted rules
salesmen in the injunctive actions to
the portfolios of open-end invest- j
v
; --V:/"V. governing
instituted to halt these operations, needs."
the ^stabilization
of m6nt companies in 1958 was re¬
prices to facilitate a distribution. ported at only-about 18%.'
but, as a practical matter, it is
The
Customer-Dealer Relationship
These requirements, like the gen¬
sometimes
difficult
to
obtain
investments in equities by these
The Commission has repeatedly eral anti-manipulative, standards
criminal convictions against sales¬
purchasers have grown tremen- *
men, and it is not too easy to and, to my view, very correctly of the statute, operate to prevent -dously in recent years,' and they
reach them even in civil actions. held that the relationship of a brokers engaged in distributing a are tending constantly to increase
The result is that these individ¬ securities dealer to his client is security from creating an illusion
as
more
institutions are turning
uals float from one boiler room not that of an ordinary merchant of active trading and from.raising from debt securities to equities in
the price artificially in order to
to another as we close down their to his customer and that, inherent
order to protect their market; po¬
the r* retailing -of * - the sition ;• It is only necessary to
places of business. In a way, this in the dealer-customer relation¬ facilitate
is rather helpful to us, since we ship is the implied representation stock. The/Rules of the Commis¬ point out as an example that there
establish
can
requirements
of is a noticeable tendency for pen¬
get some idea of the nature that the customer will be dealt sion
of the business of a new broker- with honestly and fairly and in disclosure Land
other
controls sion funds to turn;'to equity in¬
the established
which operate to prevent decepf vestments, and that it has been
dealer by looking at the list of its accordance with
standards of the profession. How¬
tive
or
unfair advantage being
salesmen.
estimated
that such funds may
taken of the buying public. - ^ '
ever, I would go further than this,
-total as much as $80 billion within
Beyond the Boiler Rooms
and suggest that these established
a
relatively few years.
I have
Enforcement and Detection
But not all the securities trans¬ standards
never
seen
any
statistics as to
might, perhaps, be re¬
We have ah active force assigned what percentage of equity secu¬
actions
which
result
in
serious
examined and extended, and that
to detect and prevent" manipula¬ rities is tied up due to the influ¬
losses to
investors
are
effected
the salesman be charged an af¬
tion
on
the exchanges.
through boiler rooms. We find the
As you ence of the capital gains tax and
most reputable
houses at times firmative duty to inquire, so far know, each registered exchange is the sometimes peculiar applica¬
to

stop the boiler room operators.
including numerous

We have been

his other

security holdings and
•

as

he

can

do

cashier with




the

tion is suitable for such customer

and, I think, in perfect innocence,
change left by mis¬ mixed up in the most peculiar
take by
a
customer.
The cus¬ transactions. Let me cite you an¬
tomer gratefully gave him a hot other example.
In the course of
tip, and the order went in to the our investigations into Alexander
was

believing

changes; This move was compro-f
by the adoption of certain ;
restrictive rules by both of the

change.
This
rule ^effectively
prevents short sales in a declining

the

financial

putative
out the

so

as

on

under :

specified^ conditions.

an

•

•

discreetly,
position

customer,

speculative

and
or

•

exchange. except

issues

as

of

to

other

to

his

point
nega¬

required'to furnish

large amount
Commission,
including the. volume and price of
transactions, and, in the case of
the
New
York
exchanges, the
a

of information to the

tion of the Internal Revenue Serv¬
ice

of

the tax

laws

to securities

transactions, but it is unquestion¬
a very sizable amount. Also,
there have always been other sub-

ably

Volume lob

Number 5846

.

The Commercial and Financial Chronicle

.

.

stantial blocks of stock which are

that

be

we

permitted

to

(2223)

assume...,

CU«lwi*

oft the market since they' are held/ that
the responsible element' of v.
for purposes.of control. When all the securities industry will conof
these
influences^-come--dip tinue, as is contemplated by the

Continued

liQIOllidC Elf* Gill C

',

an apparently insatiable
public interest, the result is, very
naturally, to create a far greater,

demand
the

than

little but remind

of this fact
and ask you soberly to review
your policies and your activities
"V? --::.t6;'makfe--rsitre' that they are consistent with the highest ethical

Keynes, to
see
that
prices would tend to
rise sharply in. such a situation. a

you

,

'

:

■

w

^

-

,

lecnniques;

_^y

If

the

present

market

standards: As

activity

appraisal

continues/ and
continue- to-

phenomena
am

prices generally
rise,- and if these
accompanied,

are

certain they will be im

issues,

by

market,;

erratic

moves

will

continue

we

fannH -with
faced with

as

affirm
the

I

capital'

"economic

situations in nrhini-. thein which

welfare

^
/

- — v

.

of that
market
national

our

problem will arise

•-

llaailc Aneufar

manipulative Activities - are pres-b " b Avlli; ll6(tuS iftll® II Ci
ent.:
However,-'since it is alwayshLa—aa•.'
,easier taj manipulate in .the gem
UdflSDV S Iflldl &6S
eral direction of the market, it is
-*■ ■*•■■■■
difficultvto distinguish innocent
Rebutting S— E. C. Chairman's
buying from artificial and unlaw¬
ful activities. In order to cope with
this situation now and in the fu¬

in

ture, the staff and the Commis¬
sion
are
considering new tech¬
niques to supplement those already in use in our market sur¬
veillance
and
anti-manipulation

'-programs.
only

few of the

a

which face

us

effect* and Mr. McCormick
E.

S.

tional: rules'that

-

C.

suggest.

;;

re¬

1959

643

discussed are
of problems

White House will

year."

an area

electric
popu¬

a

and

of adjoining coun¬
Maryland and Virginia.

Phila. Sees. Assn. Tour
PHILADELPHIA, Pa.
Cement

can

has

in-

vited members of the Philadelphia
Association
to
visit

personal knowledge of what prob¬

plant at Stockerton, Pa., on Tues¬

lems there

day, May. 26.

than
is

were
those

which

•

no
we

branch

no

a cen¬

I am very certain that'

tury ago.-

'they

quarter of

is

the. Broad
Union

organization
handling farImore

not

our

than it;was';even a :
agoALefc me give you a few ;
Statistics oh which you V: might

I the

a.m.

of

members at

a

,

the

G.

aggre-

Keith

luncheon meet¬
,

N. Gacteby,. Chairman of the SEC,
sP°ke Ipefpre the Stock Brokers

1958, there were 742 issues filed
'having a value of $13.7 billion.
I
might point/out that, for workload purposes, the important figure is the number of issues, which

Associates,, of (mrcago.

V While-we have not yet had aii
opportunity to see a text of Securitiekahd Exchange Commission
Chairman Gadsby's remarks, and
represents about a 25%; increase therefore'do not know the extent
.in one year. After detailed review, to
which vhe was directing his
in our office, we have referred 34
comments: about floor traders to
'.cases of various types in the nine the New York Stock Exchange,

so

SAN

■

'

FRANCISCO, Cal.—Fred¬
Moller, Jr. has become

A.

.

last

since

months

referred

we

during

have

we

no

the

I'Al) We have had floor trading

two-year period ending last July,

rules

continually since 1945. They

You

were

not rescinded.

know from

active

how

ence

personal experithe

has

market

been, and how many transactions
be watched
by our staff.
iThe number of disciplinary: pro-must

-ceedings

we

en^

-

And the pres¬

enforced

with

ex-

.

.

Coast

^aclllG Coast

of

the

Stock

New

York

and

Exchanges.

Joins rirst L^alliornia
(Special to The Financial Chronicle)

»

study! we

or

Nine out of 12 steelmaking districts

above the national ingot rate.

?.

/

for steelmaking is brightening.
that there's more to the steel industry's
revival than the artificial stimulus of strike hedge buying. Plates,
third

outlook

quarter

It's increasingly apparent

galvanized sheets, and tin mill products will be in strong
if

a

strike is averted.

demand

.

may set higher records this year
($52.3 billion in work put in place),
"Steel" reported. Reasons: (1) A lot of momentum was picked up
in building during the first four months of the year, (2) Contract
awards are maintaining the high level established late in 1958.

construction

industry

than the experts anticipated

see

MSnN FRANCISCO, Calif.-John

^ We believe that the floor

"He «

and confirmed

at

The

even

Firct Falifnrnia

*nc

idea that their sales would improve

rolled, and galvanized sheets. Shipments may be hindered also by
a shortage of trucks and freight cars, plus scattered wildcat strikes.
Steelmakers last week operated their furnaces at 94.5% of

The

I

-

no

American Motors Corp., after repeatedly boosting
production schedules, are in the market for extra tonnage. Chrysler
Corp. wants a 45 day inventory by the end of May and a 90 day
one on July 1.
Ford, with a 30 day inventory, has similar aims,
i
To compound the inventory crisis, steelmakers are behind
schedule on shipments of flat-rolled products and heavy plates.
Consumers face delays of three or four weeks on cold-rolled, hot-

were

LOUIS, Mo. — Joseph H.
Rohs is now with Dempsey-Tege¬
ler
&
Co., 1000 Locust Street,
Midwest

had

Many underestimated second quarter needs and have
purchased for stock into immediate use.
V
Automakers seem apprehensive about their inventories. Ford

rapidly.

2,676,000 net tons of steel.

ST.

members

July 1, more than a few
If the walkout lasts more

or

capacity, unchanged from the previous week's rate, and produced

Dempsey-Tegeler

(Special to The Financial Chronicle)

.

}

Self-Policing

are

tJLvth '

have required to iix-

Better

With

ceptional vigor. They are effective
jn providing a more liquid market
.for the'-public.
... ..
:..

L

Seeks

rules

p4ifir

&l0CK ^xenanges.

hesitation in making

the following three observations:

is exactly the

This

cinal action.
-number

July for crim-

the New York and

three

Motor Co. and

'••

•'•'""v (Special to The Financial CunoNicLE)

erick

on

seriously threatened.

had to divert steel

-A-

■

v

will be

working executives

of ar¬

Joins Dean Witter

'igate value of $14.5 billion. During
'ithe
same
period
ending/ April,

.

four weeks, some may have to close their doors.
Main reason for inventory deficiencies is the suddenness of
the business recovery, the metalworking weekly said.
MetaU

than

McCormick

T.

E.

Fumtoo

*,-A"

_

slowdowns.

Buildup Slower Than Expected

If the United Steclworkers strike
consumers

*

dion statements filed v}yith us, cov¬

mill

May 11.

of the Her¬

& Co. is in charge
rangements for the tour.

of

inventory buildup is not progressing as rapidly as
expected even though steel shipments will exceed consumption by
more than a million tons this month,
"Steel" magazine reported

James P.

prich

reports

The steel

Gordon L. Keen of R. W. Press-

chew/-During the fiscal year be-'

an

entrance

ing following the plant tour.

k

ering securities having

Steel Inventory

division

cules Cement division will address

.year

ginning July 1; 1958, up ;to. April
.23, 195.9, . the re were 953 registra-

Street

League at 9

Giles, Jr., President

^work today

-

Cement

Air-conditioned buses will leave

more
perplexing
face today.
There

of

Hercules

first

come

can't point to an organized' effort to
cut output. But at the same time they are Lot getting the produc¬
tion they had expected. Whether this has anything to do with the
contract talks is problematical.
But steel men are watching the
situation closely.
-"'k

Securities
their

Midwest

Mills reporting this say they

Amerj-

—

Corporation

wage

the

From

^

Acts. This legislation was 25 years
old last July, and while I have no

were a

Age"

any

.

portions

ties in

^

reiterated that steel companies are "dead set'!
cost increases: "Their chief negotiator, quiet-v'
speaking R. Conrad Cooper, executive Vice-President—personnel,
of U. S. Steel Corp., is the coldest pineapple Dave McDonald has
ever come up against."
/
For steel users, the gloomy outlook for labor peace is dis¬
couraging. Some of them don't know which way to turn as they
try to build inventories as a hedge against a strike.
Many metalworking companies are trying to make "conver- .
sion" deals, where possible. Under this arrangement, ingots or
semi-finished steel are bought from one mill and shipped to
another for rolling into finished shapes.
This runs up the cost
for the buyer.
The trouble is that few mills have excess steel
under present market conditions, so not too many deals have
materialized.
■; V".
"Iron Age" said that one mill is furnishing 10,000 tons of
ingots to another mill which will roll them into cold-rolled sheet
for an auto company.
The arrangement will probably cost the
auto builder $20 to $30 per ten over and above the normal market
price.

of approximately

miles, having

square

„

,

"Iron

against

ing the entire District of Columbia

President of the
New York^Stock Exchange, issued
the following statement on Tuesday, May 5, the day Mr. Edward

maze

to

(steel labor chief) get the best steel labor contract ih
It is in the realm of fantasy to believe that the same
give such a boost to Mr. McDonald again this

history.

lation of about 1,520,000, compris¬

Keith -Funston,

under the Securities

and

The company furnishes
power

may

.

McDonald

gate about $89,000,000.

addi¬

any

companies knew after the 1956 contract was signed
had to stop. They can be forgiven if
they feel disenchanted with the White House. It was side-door
pressure from the White House which in 1956 helped David J.

additions for the
1960 will aggre¬

property

years

still vigorously

are

plies ASE will adopt

•

The topics I have

i'

traders', rules

"But steel

company to pay $6,425,000 of bank
loan notes, to reimburse its treasury for a portion of construction
^expenditures heretofore made, and
to pay,
in part, for future con¬
struction.
-It
is /estimated
that
gross

room

cause a

that the wage-price spiral

common stock will be used by the

charges, Mr. Funston states floor
,

leaves little

Industry

steel price increase. That effectively
for steel firms to move around in.

steel contract that will

held of record May 12, 1959.
Proceeds from the sale of the

to

common,

less

no

which is essential to

be

re-

can

in

have

we

preservation
free and
honest

the

to

worlc:

we

dedication

mutual

the

many

in

result of this re-

a

perhaps

our

The State of Trade and

_

?n' **ead & Go. laG- allc*
Johnston, Lemon & Co. head an
underwriting group which is underwriting an offering by Poto™ac Electric Power Co. of 1,207,J J" shares of common stock to its
common stockholders.
The company is offering the common stock
through warrants expiring on May
27, at $25 per share, on the basis
one share for each five shares
7;

T

by.trate on the less reputable group,
It requires In these difficult days, I can do

supply at hand..
Ricardb or, even

no

1934,

to a large exitent to police itself
and thus free our staff to concen-

satisfied

be

can

Securities Exchange Act of

4

page

•

::;gkg£i' ■■ ■ •
|)VTGt* UndGrWNltGN

against

from

35

(3) Housing starts have shown only the slightest signs of declining.
(4) Industrial construction is beginning to accelerate from its re¬
cession low.

stable, less hectic
lead, zinc,
They predict: Fewer price changes, continuation
of sales at near present levels with perhaps slightly less hedge
buying, more market conservatism as contract negotiations draw
Metalmen agree

market

over

that there will be

a

more

the rest of the second quarter for copper,

and aluminum.

Steichen Adds
encounter delay or error in to preserve' this vital factor in the
your dealings with our organizamarketplace.'
tion. Perhaps they may also conASE Head Replies
vince you that the Securities and
Exchange Commission is far from— American Stock Exchange Presbeing a moribund bureaucracy, ident,, Edward T. McCormick, also
and that it must stay dynamic and
reacting to the speech by Securiyou

,

;
£

r

.

;

it
law." The securities industry
duties

the

be of very
endeavor.

.

ties a h-cf
by -Chairman

if it Is properly to carry

strong

tout

assigned

to

can

great help to us in this
The
stock
exchanges

Exchange Commission
Edward N. Gadsby,

Stated VThe. Securities and Exchange Commission has submitted
to the New York exchanges a pro-

I can. testify from personal posed rule, concerning the activiknowledge, eager to be of "help! ties of floor trading and has into us.
In fact, were it otherwise, vited our comments.
are, as

'

*

that our machinery
would ' break
down
completely.
So, also, the
member

I
r

*

am

very

firms
-

of

sure

the

exchanges

can

statistics

The

which

I

could

I

have

enlarge

quoted,
on

■

•

prac-

endlessly, furnish a very
for this appeal for
your cooperation. We have all too
few personnel to handle the routine work of our organization.
I
do not think it is asking too much
tically

-

be

equally helpful.

good

reason




"j have discussed the floor trad¬

ing situation with Securities and
Exchange Commission officials in
Washington and New York at least
three times recently.
"Our

Exchange

will,

(Special to The Financial Chronicle)
.

,

MINNEAPOLIS, Minn.

W.

Malluege has

,,

.

..

-

been

T

p

—

added
*r

near.

to

to

$33.67 a

rw«

Steel Output

pany, Baker
'

.

Building.
"

Joins State Bond & Mtg.
(Special to The Financial Chronicle)

NEW

— James
M.
joined the staff of
State Bond & Mortgage Company,

Beecher

.

,

.

steelmaking scrap is off 66 cents
gross ton, lowest since May, 1958.

"Steel's price composite on

Harry

ULM, Minn.
has

28 North Minnesota Street.

The

American

Iron

(Special to The Financial Chronicle)

111.—Warren T.
Meyer is now with Salomon Bros,
& Hutzler, 231 South La Salle St.
CHICAGO,

without

hesitation, adopt and administer
Westheimer Adds
any
additional rules which the
(Special to The Financial Chronicle)
Securities and Exchange CommisCHICAGO, 111.—Leroy C. Shusion and the securities industry
feel are necessary^to eliminate any ster has been added to the staff
actual or potential danger to the of Westheimer and Company, 134
investing public."/>
South La Salle Street.

and

on

94.1% of Capacity

Steel Institute announced that the

operating rate of the steel companies will average !!:165.9% of steel
capacity for the week beginning May 11, equivalent to 2,655,000
tons of ingot and steel castings (based on average weekly pro¬
duction for 1947-49) as compared with an actual rate of :;,162.1%
of

to

capacity and 2,604,000 tons a week ago.
Actual output for the week beginning May 4, 1959 was equal
92.0% of the utilization of the Jan. 1, 1959 annual capacity Of

147,633,670 net tons.

With Salomon Bros.

Based

Estimated percentage for this week's fore¬

cast is 94,1%
A month ago

the operating rate (based on 1947-1949

production) was *165.4% and production 2,657,000 tons.
ago the actual weekly production was placed at 1,412,000

weekly
A year
tons, or

*87.9%.
*Index of

production is based on average weekly

for 1947-1949.

March Steel

production

'

-

•

;

Shipments Near Ail-Time High

of finished steel mill products during March
8,117,688 net tons, second only to the monthly shipment

The shipments
totaled

Continued

on

pageJS6

36

The Commercial and Financial

(2224)

Continued from page

,

more

A

record

which

industry,
That total

was

and compares

reported.

1,761,521

totaled

net tons

automotive

during March

1959.

267,000 tons above the February automotive figure
with the former record of 1,679,200 net tons during

March 1955.

machinery and equipment also re¬
ceived record shipments during March 1959, a total of 250,394 net
tons, up 28% from the February figure and comparing with the
former monthly record of 247,600 tons set in June 1956.
Records were set in the shipments of three major categories
of sheet steel: hot rolled sheets—927,506 net tons; cold rolled
sheets -1,557,042 net tons; and galvanized sheets—311,961 net tons.

a

1959 high, Ward's Automotive Reports said.

new

The

weekly upsurge to 163,766 car and truck assemblies shot
13.5% over the previous week's inventory restricted total of 144.207,
eclipsing the earlier 1959 record of 162,374 set in week ended
April 18.
The

statistical service said

the record early-May output fol¬
April assembly—578,825 cars—since 1955 and pre¬
that May operations will again top the 500,000 mark—the

lowed the best
dicted

third month in
Ward's
at

10

Ford

row.

a

said

production

Motor

and

two

overtime
Corp.

GM

scheduled this week
plants, plus one Chrysler
was

Corp. passenger car plant, being strongest at Ford Division where
eight factories planned to work Saturday.
'
'

The

reporting service said soaring truck output is taking
the glamor off of car production, stating that 113,000-

of

some

unit May truck output now scheduled, following 115,197 in April,

gives such producers their best January-May program since 1953.
The five-month target is 536,000 completions.

Recapping this week's record

assembly, Ward's said the
so-called five low-price makes bit off a whopping 70%. of the
industry total. It said Ford operated at 95% of the Chevrolet
level, Chrysler Corp. chewed of 14.6% of industry volume.
Car makes scheduling overtime this week were Chevrolet,
Ford, Edsel, Chrysler Corp. in Los Angeles, and Rambler. GM
Corp., meanwhile, worked two Buick-Oldsmobile-Pontiac branch
plants

a

short week

Electric

as

car

dicl Imperial in Detroit.

power

rather light during the past week and
Wheat buyers were purchasing only
prices were down slightly from last
week.
Corn prices fell a little during the week even though
demand was good. Rye dropped several points but oats made a
modest gain from last week. Soybeans closed higher than a week

Output 11.9% Above 1958 Week

distributed by the electric light
industry for the week ended Saturday, May 9, was
kwh., according to the Edison Electric

Institute.

There

there

was

May 9, output increased by 113 million

domestically

foreign markets, but prices edged up for the fifth straight
was in only fair demand in the domestic market but
considerable export activity. Prices were unchanged.

Rice
was

moderate trading.
Trading in coffee was quite on the cash market and prices held
steady. Coffee futures dropped with cheaper offerings from Brazil
undermining prices for distant delivery.

Cocoa prices were un¬

changed in light trading.
Cattle

supplies
rest

the

receipts

were

about the same this week as last. Monday
but receipts dropped off for

were the largest in months
of the
week.
Prices of

choice

live

steers

dropped

but ended dull this
week, with a slight week to week increase in prices shown. Lamb
prices were unchanged over last week.

moderately.

Trading in hogs started brisk

Prices for spot cotton rose a

little

over

last week in narrow

trading. The United. States Department of Agriculture placed the
1958 domestic cotton crop at 11,512,000 bales, which was 69,000
bales less than the December 1 estimate.
United States cotton

exports for the week ended Tuesday were estimated at 46,000
bales, as compared to 45,000 bales last week and 117,000 bales in
same week last year.
For the season through May 5, exports

the

were

approximately 2,168,000 bales, compared
same period last year.

to 4,371,000 bales

for the

Wholesale Food Price Index

for

a

the

Again Declines

second

decline of 0.3%

It

.

was

down 6.7% from the $6.57 of the com¬

year ago.

a

represents the sum total of the price

foodstuffs and meats in general use.

raw

per

It is not

pound of
cost-of-

a

living index. Its chief function is to show the general trend of
prices at the wholesale level.

food

000,000 kwh.
Car

Loadings of revenue freight for the week ended May 2, totaled.
674,123 cars, the Association of American Railroads announced.
This

Retail Sales

Loadings 26.4% Above Corresponding 1958 Week

was

an

increase of

140,918 cars or 26.4% above the corre¬
sponding week in 1958, but a decrease of 44,863 cars, or 6.2%,
below the corresponding week in 1957.
Loadings in the week of May 2 were 26,841 cars, or 4.1%
above the

Unseasonably
apparel
over

of

areas

Co., Inc., which was acquired by

which maintains.'plants
and
Compton,
Calif.,
was
organized in | June,
1957 for the purpose of* acquiring
and
operating established';.: busi¬
Airtek,

this

week

new

passenger
total

helping

cars,

retail volume rise slightly
year ago. In addition, there were

over-all
a

according to scattered reports.

dollar volume

of

retail

trade in

the

week

acquired all
s t o c k f of
Paehmayr Corp. and in January,
1958 Paehmayr was liquidated and
merged into Airtek. The machin¬
ing of complex three-dimensional
and structural parts for aircraft
was
the major business of Pachmayrv arid ha§ to data constituted
the primary activity of Airtek.
In March, 1959 Airtek acquired
all outstanding common stock of
Research Welding- & Engineering
Co., Inc:„ primarily engaged in the
engineering, forming and preci¬
sion welding of tanks and fuselage
sections for missiles.
Integrated,
the companies are said to comple¬
fields. In July, 1957 it

outstandirig \

Compared with the previous week ended April 25, production
of reporting mills was 1.7%
above; shipments were 5.3%> above;

wear, with principal gains in lightweight suits, sports coats, and
slacks.
Interest in men's furnishings remained close to that of
the similar 1958 week.

above

production;

new

orders

new

were 7.8% above.
For the latest week, as against the
corresponding week in 1958, production of reporting mills was
14.7% above; shipments were 13.7%o above; and new orders were

10.9% above.

"

/

Business Failures Continue to Decrease
Commercial and industrial failures dipped to 265 in the week
ended May 7 from 275 in the
preceding week, reported Dun &
Bradstreet, Inc. Casualties were the lowest since the first week
of

this

year, but they
corresponding week a
with

the

prewar

only slightly below the 279 in the
year ago and the 267 in 1957.
Compared
level, business mortality was down 17% front
were

Attracted

Most of the week's downturn occurred in small
casualties,
those with liabilities under
$5,000, which declined to 28 from 36
in the previous week and 34 last
year. Failures involving liabilities
of $5,000 or more dipped to 237 from 239 a week
ago and compared
with 245 of this size last year.
Twenty-six of the failing concerns
bad liabilities in excess of
$100,000, two less than in the preced¬

ing week.
The toll among retailers fell to 126 from 139

during the week,
to 39 from 47, and
among service
Contrasting increases lifted manufactur¬
ing casualties to 53 from 41, and wholesaling to 28 from 25. More
among

cpiistruction contractors

businesses to 19 from 23.

construction failures occurred than

a year
ago,
and trade groups remained below 1958 levels.
Six of the nine major geographic,

week decreases.

but other industry

regions reported week-toCasualties in the Pacific States
dipped to 59 from




sales

promotions, shoppers stepped up their
purchases of upholstered chairs, outdoor metal furniture, and
bedding this week boosting over-all furniture volume slightly
over last year.
Despite moderate increases from the prior week
in air conditioners, radios, and television sets, appliance volume
was down slightly from a year ago.
The call for linens, draperies,
and floor coverings expanded noticeably during the week and
was up moderately from last year.
Total

by

food

sales

this week, with housewives
primarily interested in frozen foods, canned goods, and some
dairy products. Volume in fresh meat and poultry was steady.

the total of 321 in 1939.

Customers

Convair, Boeing,
McDonnell,
North
American,
Northrup and Sperry.
For
the
year
ended Dec. 31,
1958, the company reported net
sales of $3,486,792 and net income
of
$188,004, equal to $1.02 per
share then outstanding.

With Bell & Farrell
:\„7

(Special to.TiiE Financial Chronicle)

-;»

Wis. —Charles

MADISON,

M.

Cotter has become connected with

Bell

&

119 Monona

Farrell, Inc.,

Avenue, members of the Midwest

Three With Keller Bros.
(Special to The Financial Chronicle)

BOSTON, Mass.—David W. Delaney, William A. Kilcoyne and
Abraham
Kramer have become

with Keller, Brothers
Company,
Inc., Zero

associated

Court Streets ,-y

•

With H. Hentz & Co.
(Special to The Financial Chronicle)

BEVERLY HILLS,

were

steady

with

H. Hentz &

Co., 6680 Santa Mon¬
Boulevard.
Mr. Harris was

ica

previously with Sutro & Co.
1

-v--

Daniel Reeves Adds
(Special to The Financial Chronicle)

BEVERLY HILLS,
ton

Calif.—Mil¬

Koenigsberg has been added
staff

the

to

Daniel

of

members

of

Reeves

Beverly

South

393

Co.,

the

New

&

Drive,

York

and

Pacific Coast Stock Exchanges.

With Bateman, Eichler
(Special to The Financial Chronicle)

LOS ANGELES,

Millen

R.

staff

of

to the

Eichler & Co.,
Spring Street, members

the Pacific

of

Calif.—Thomas

has been added

Bateman,

453 South

Nationwide Department Stores Sales Up 8%
For May 2

Calif.—Mor¬

ton Harris is now connected

vailed; volume in fashion accessories, Summer coats, and suits
was up appreciably from both the prior week and last year. There
were moderate increases from a year ago in purchases of men's

2.5%

each other in both the mis¬

ment

was

reporting identical mills
orders were 3.8% above pro¬

duction.

common

sile and aircraft fields.

spot estimates

Women shoppers were most interested in Summer cotton
dresses and sportswear and considerable year-to-year gains pre¬

were

in the aircraft and missile

nesses

Securities
ended

rate,

and gross stocks were equivalent to 42
days' production.
For the year-to-date, shipments of

Angeles

Los

and extensive

unchanged to 4% higher than a year ago, according
collected by Dun & Bradstreet, Inc. Regional
estimates varied from the comparable 1958 levels by the following
percentages: West North Central and South Atlantic +2 to -f6;
East North Central, Mountain, and Pacific Coast +1 to -j-5; East
South Central and West South Central 0 to -f-4; New England —1
to -f-3; Middle Atlantic —6 to —2.
to

amounted to 45% of stocks. For reporting softwood
mills, unfilled
orders were equivalent to 21
days' production at the current

many

slight year-to-year gains in furniture, floor coverings and draperies
and noticeable increases from last year were maintained in sales

May 6

Lumber shipments of 467 mills reporting to the National Lum¬
ber Trade Barometer were 10.5% above
production for the week
ended May 2. In the same week new orders of these mills were
14.2%
above
production.
Unfilled orders
of
reporting mills

weather in

that of the similar week

The

Shipments 10.5% Above Production
For May 2 Week

Approximately $800,000 of the
proceeds of the stock sale will
be
applied to provide working
capital for Airtek to carry into ef¬
fect its growth program and to
provide working capital for Re¬
search- Welding
&
Engineering

net

Mother's Day sales promotions encouraged the buying of Summer

preceding week.

Luiniber

price of $8 per share.

a

Stock-Exchange.

Slightly Above Previous Week

warm

shares of common
Dynamics, Inc., at

150,000

14)

stock of Airtek

common

Higher in price this week were flour, corn, rye, oats, beef,
bellies, cottonseed oil, and hogs. Down in price were wheat, hams,
lard, miik, coffee, cocoa, peanuts and steers.
The index

associates
(May

offering publicly today

of Airtek include

consecutive week, the wholesale food price
index, compiled by Dun & Bradstreet, Inc., declined on May 6.
The index stood at $6.13, compared with $6.15 a week earlier,
For

Dynamics, Inc.

S. D. Fuller & Co. and

in

little interest in flour this week, both

Raw sugar prices rose slightly this week in

31

kwh. above that of the previous week and showed a
gain of 1,344or 11.9% above that of the comparable 1958 week.

was

with strength derived from light marketings.

ago,

estimated at 12,659,000,000
For the week ended

trading

prices generally declined.
for immediate needs and

parable date

The amount of electric energy
and

278.06

week.

industry put 20% of its car assembly plants on an
basis in the week ended May .9, sending U. S. pro¬

overtime

at

and for

Attains New 1959 High

The auto

duction to

Daily Wholesale Commodity Price Index, compiled by
Bradstreet, Inc. declined steadily during the week to
275.89 on May 11.
One week ago the index stood at
and one year ago the figure was 280.05.

&

close

Thursday, May 14, 19o9

.

.

Common Stock Offered
are

The
Dun

Grain

Manufacturers of electrical

Car Output

1958.

Commodity Price Index Declines Again

Wholesale

|

set in direct mill shipments to the

was

remained the same as in

one

.

Airtek

20 from 23,

lo

during March 1956, American

than 8.3 million set

Iron and Steel Institute

Industry

East North

the

in

Atlantic

The State of Trade and
record ol

Central to 42 from 48, and in the South
On the other hand, the Middle Atlantictoll held steady at 92, and increases prevailed in both the West
North arid West South Central States.
While five regions had
fewer casualties than last year, three suffered heavier tolls, and
62,

35

Chronicle

Coast

Stock Exch.

Joins E. F. Hutton Staff

Week

(Special to The Financial Chronicle)

Department store sales
the

Federal

on a

Reserve Board's

country-wide basis

Index

for

the

week

as

taken from

LOS

ended

May 2,
increased 8% above the like period last year.
In the preceding
week, for April 25, an increase of 4% was recorded. For the four
weeks ended May 2, a gain of 9% was registered.

Bazdarich has

to

the

According to the Federal Reserve System data on department

25 and
compared with like periods last year, are not available.
In the preceding week, April 18, an increase of 8% was reported;
April 11 an increase of 18% was reported over the 1958 week.
The Board likewise reported a lack of data for New York City
sales in the five weeks

ended

May 2 as compared with the like
M.

..

of

623

E.

F.

Hutton

Spring

South

&

St.

Kerr & Bell Add
(Special to The Financial Chronicle)

as

period in 1958.

staff

Company,

store sales in New York City for the week ended April

May 2

ANGELES, Calif.—Joseph
been added to

G.

LOS
rence

ANGELES, Calif. —Law¬

W. Kennedy has been

added

staff of Kerr

& Bell, 210

West Seventh Street,

members of
Exchange.

to

the

the Pacific Coast Stock

Volume 139

Number 5846

.

.

The Commercial and Financial Chronicle

.

The

Indications of Current

week
Latest

IRON

AND

INSTITUTE:

STEEL

Indicated Steel operations (per cent

Week

capacity).

-May 17

§94.1

May 17

$.

following statistical tabulations

latest week

Business Activity
AMERICAN

(2225)

§2,685,000

Previous

Ago

"92.0

and

(net tons)

condensate

Gasoline

output

—May
May

(bbls.)

average

7,112,625
'

Finished

unfinished

and

'

Kerosene

2.657,000

1.412,000

ALUMINUM

fuel oil

(in

gasoline (bbls.) at_

7,128,985

6,256,335

7,705,000

8,199,000

7,708,000

27,389,000
1,802,000

28,405,000

24,892,000

2,184,000

1,698,000

11,543,000

11,037,000

6,401,000

13,784,000
6,798,000

209,593,000
21,076,000

211,747,000

213,615.000

202,515,000

18,616,000

18,703,000

76,266,000

Total

58,050,000

Private

2,000
Stocks

CIVIL

55,490,000

674,123

647,282

590,133

533,205

State

588,544

574,828

561,207

491,352

$403,300,000

May
May

—

206,500,000

263,300,000

233,329,000

149,400,000

119,700,000
143,600,000

181,574,000

of

147,240,000

206,500,000

178,600,000

May

municipal

$469,800,000

177,900,0(10

—

$410,900,000
204,400,000

225,400,000

■<—,—

46,800,000

57,100,000

8,275,000

"8.095,000

$380,569,000

S.

Pennsylvania anthracite (tons)

•May

-

AVERAGE

SYSTEM—1947-19

ELECTRIC INSTITUTE:

=

$1,904,600

/

^

;

n

...

municipal—.

(BUREAU

Production

6.980,000

6.413,000

330,000

358,000

308,000

142

142

117

132

12.659',000

12,546,000

12,604,000

OF

.May

7

265

275

:iV 227

279

May
-May
.May
-May

5

6.196c

6.196c

5

.May

5

—

(per lb.)
(per gross ton).

.

*

GOVERNORS

of month

OF

THE

(net tons)

SYSTEM—REVISED

(E.

at

York)

tNew

Lead -(St.

$66.41

$66.41

$66.41

$33.83

$36.50

delivered)

at

Aluminum

$32.00

6

31.125c

31.625c

28.275c

28.650c

30.675c

11.500c

11.000c

12.000c

11.300c

11.300c

10.800c

11.500c

11.500c

11.800c

11.500c

11.000c

11.000c

10.000c

24.700c

24.700c

24.000c

102.500c

102.875c

103.000c

94.125c

-May 12

May 12
May 12

——

83.71
87.86

84.02

85.11

95.36

.' ■ '■? Aa.

Public Utilities

May

U. S. -Government Bonds
*•'

Aaa

88.54

90.20

83.28

84.55

87.32

88.40

87.32

89.51

97.62

89.92

91.34

99.20

4.10

4.07

3.95

4.57

4.54

4.43

4.35

J2

4.32

' ■

■

Group
Utilities Group
Industrials Group

v
-

—May

•

■—i

Percentage of activity
Unfilled orders (tons) -at end of

TRANSACTIONS

4.21

/

2.90

4.00

.

Total

:

•Customers' other sales

round-lot

22,179

$49,763

♦$49,503
"28,143

$52,445
25,542

311,340

357,953

304,464

295,358

286,835
246,385

94

93

89

498,653

365,1246

110.64

110.84

111.52

109.92

2,568,930

April 18

370,890

323,430

650,670

438,690

17,300

14,200

38,700

429,720

341,930

61,800
584,430

385,960

646,230 7

424,660

380,890

393,710

,

447,020

356,130

770,373

666,260

April 18

105,750
935,708

3,291,090
572,550

584,915

63,350

637,206

959,780

561,629

138,060

1,041,458

700,556

1,159,480

699,689

18

3,710,193

3,386,110

4,972,290

18

503,940

471,260

18

3,567,828

3,017,066

834,050
4,182,140

2,561,405
464,570

18

4,071.768

3.448.326

5.016,190

2,220,929
2.685,499

1,780.220

2,223,820

1,201,302

$123,185,441

$94,095,507

$108,293,867

$51,370,713

April 18
..April 18

1,851,193

1,666,252

2,029,208

992,714

4,413

6,270

6,166

18,837

1,846,780

1,659,982

2,023,042

973,877

—

$104,514,177

$85,350,334

$99,449,928

$42,521,298

April 18
April 18
April 18

522,970

461,530

567,350

267,160

522",970

461 530

i

567,350

1,

(millions

of

dollars):

....

..

.

-

28,544

METAL PRICES

(E. & M. J.

QUOTATIONS)—

April:
Domestic refinery
(per pound)
Exports refinery (per pound):
ffLondon, prompt (per long ton)
If Three months, Loudon (per long ton)

.•

_.

Common,

31.300c

31031c

24.253c

29.397c

30.271c

21.631c

£240,017

£248,513

£175.600

€240.324

.

New York

pound)...
Common, East St. Louis (per pound)ft
London, prompt (per long ton)
ttThrec months, London (per long ton)
Zinc (per pound)—East Gt. LouisHZinc, prime Western, delivered (per pound)
f t Zinc, London, prompt (per long ton).
tfZinc, London, three months (per long ton)
Silver and Sterling Exchange—
Silver, New York (per ounce)
Silver,
London (per ounce).
Sterling Exchange (check).
(per

.

Straits—

York

New

-

.........

668.420

574.590

758,190

492.670

(per ounce, U. S. price)
Quicksilver (per flask of 76 pounds)

£247.606

£176.925

11.189c

11.412c

/Cadmium

......

11.209c

11.800c

£69.513

£72.869

£70.418

£71.209

£73.010

11.000c

11.000c

11.500c

11.500c

10.500c

£72.688

£75.122

£62.375

£72.460

£73.931

£02.578

91.375c

10.000c

91.351c

88.625c

79.193d

79.281d

76.044c!

$2.81653

$2.81271

$2.81706

102.517c

103.119c

92.957c

$35,000

$35,000

$240,545

$224,636

$231,077

32.590c

32.590c

32.590c

pound)
grade (per pound)

29.000c

29.000c

29.500c

29.500c

29.500c

$77,000

$76,727

$72,000

$1.20000

$1.45000

$1.55000

Si.20000

pound)

(per

12.000c

10.983c

£69.048

$35,000
...

1!Antimony, New York, boxed
Antimony (per pound), bulk Laredo
Antimony (per pound), boxed Laredo—
Platinum, refined (per ounce)
tCadmium, refined (per pound)

267,160'

April 18

$1.45000

29.000c

,

$1.55000

YORK

$2.00000

$26,800

$26,800

$26,100

$24,700

$24,700

$24,000

35.250c

35.250c

35.250c

74.000c

74.000c

$2.25

Aluminum, 99'.< grade primary pig
Magnesium ingot (per ound)..:

NEW

S1.55000

$1.75000

$2.25

$2.25

$3,410,000

$3,452,000

$2,681,734
101,741

grade ingot weighted average

pound)

(per

SI.45000

74.000c

(per

-

$1.20000

(1.75C00

(per

Cobalt, 97i'r

Bismuth

pound)—

STOCK

EXCHANGE—As of Feb. 28

....

—

575,360

556,580

950,580

805,550

17,858,190

15,990,880

21,798,840

11,871,490

18.433.550

16,547.460

22,749,420

12,677,040

(000's omitted):

Member

Cash

May
May
May

119.6

119.8

-—
—

May

figure.

1959, as against Jan. 1, 1958 basis




on

Total

—

other than farm and foods

firms

carrying

margin

of

hand

and

customers'

in banks in
free

91.4

*92.1

90.9

97.7

107.5

107.9

107.1

112.0

102.8

100.4

128.0

128.2

125.4

listed

S

shares

of

listed

bonds

111.7

128.0

of

Market

119.3

U.

credit balances—i

Market value
119.7

accounts—

Total customers' net debit balances—.——
Credit
extended
to
customers

U. S. DEPT. OF

^Includes 807,000 barrels of foreign crude runs. §Based on new annual capacity of 147,633,670 tons
of 140,742,570 tons.
(Number of orders not reported since introduction of
Monthly Investment Plan. /Prime Western Zinc sold on delivered basis at centers where freight from East St. Louis exceeds
one-half cent a pound.
•Revised

February
...

Sales

Member
Member

value

borrowings on U. S.
borrowings on other

'Revised figure,

157,000

155,000

374,000

374,000

311,811

1,196,000
282,104,946

1,226,000
280,825,782
106,400,853

938,685
201,174,403

412,000

'468,000

111,805,160
261,069

2,066,000

2,105,000

1,795,648

107,215,337

issues
collateral—

Govt,

tAverage based on the producers' quotation. SBased on the average
producers' and platers' quotations. §Average of quotation on special shares to
platers, iDomestic five tons or more but less than carload lot boxed. §§Delivered where
freight fr&m East St. Louis exceeds 0.5c. '"•"F.o.b. Fort Colburne U. S. duty included,
ft Average of daily mean and bid and ask quotation at morning session of London
Metal Exchange,
Increase all stocks.

of

of Jan.

of

Aluminum 99'/

102.0

as

...

Gold

2,084,417

(SHARES):

foods

All commodities

....

.

67,500,000

Inventories—

Commodity Group—

products-

February:

MANUFACTURERS' INVENTORIES AND SALES
(•DEPT. OF COMMERCE) NEW SERIES—

Tin,

-April 18
April 18

April 18
April 18
-April 18

WHOLESALE PRICES, NEW SERIES
LABOR — (1947-49 = 100):

Processed

TO

LIFE

Lead—

1,030,530
199,700

EXCHANGE COMMISSION

sales

Farm

of

OF

....

April
.April
.April
.April

sales—

commodities

PAYMENTS

INSTITUTE

Total

2,396,420

STO^K SALES ON THE N. Y. STOCK

Total sales

All

—

INSURANCE—Month

1,561,150

dealers—Number of shares

OF MEMBERS

BENEFIT

81

455,533

2,637,930

——

SECURITIES

INSURANCE

POLICYHOLDERS

Policy ■ dividends

April 18
April 18

sales

Other

$30,266

"21,386

398.5

LIFE

§ Cadmium

sales

Short

"$28,117

390.5

3,210,480

Other sales

Total

$28,316
21,447

390.6

Disability payments
Annuity payments

2,037.930

•

—

$567,900,000

3.80

2,431,640

shares—Total sales

FOR ACCOUNT

$665,400,000

4.32

2,202,400

■

value

EXCHANGE

$595,300,000

4.42

Round-lot sales by dealers—

TOTAL ROUND-LOT

118,700,000
134,100,000

Matured endowments

COMMISSION

'
—

Round-lot purchases by

117.500,000
111,500,000

58,200,000
9,800,000
48,700,000
111,200,000
100,300,000

Death benefits |

3.90

(customers' purchases)—!

;

Customers' short sales

Short

$239,700,000

65,900,000
11,400,000

4.30

4.45

2,583,290

.

——

value

of

$267,800,000

54,900,000
9,800,000
54,700,000

4.62

4.53

for account of members-

purchases by dealers (customers' sales)—
of orders—Customers' total sales

Number

$246,900,000

100)

—

4.82

.April 18

Number

Dollar

65.0

April (1947-49

4.92

April 18

—

sales by dealers

Dollar

63.9

Railway Employment at middle of

4.61

April 18
April 18

•EXCHANGE—SECUURITIES EXCHANGE

Odd-lot

64.8

of

4.61

April 18
.April 18

—

•Number of shares

336,598

Index

Copper-

purchases

Odd-lot

195,970

216,127

3.57

STOCK TRANSACTIONS FOR ODD-LOT ACCOUNT OF ODD40T DEALERS AND SPECIALISTS ON N. Y. STOCK
n

294,367

260,490

3.77

1,537,800
287,810
1,273 340

.

Total

254,773

4.03

April 18

TotaL sales

56,208,491

(AMERI¬

COMMERCE COMMISSION—

4.29

initiated off the floor-

Total round-lot transactions

48,432,974

$824,465,000
55,217,659

CONSTRUC¬

(tonnage)—estimated.

INTERSTATE

Nondurables

.

Total purchases

STEEL

STEEL

50,337,407

$848,962,000

56,304,591

-

of

TION)—Month of March:
Contracts closed (tonnage)—estimated

Durables

—

—

transactions

OF

4.40

the floor-

purchases..

Other sales

Other

STRUCTURAL

INSTITUTE

4.41

507,369

April 18
April 18
---•-■

on

52,461,149

$885,725,000

FABRICATED

OF MEM¬
AND SPECIALISTS
which registered-

—

fnitiafed

omitted)-.-

(000's

Number of ultimate customers at Jan. 31

FOR ACCOUNT

:

Other transactions

January

4.52

April 18
.

123

customers—

from ultimate customers—month

Month

sales

Other sales

ultimate

to

320,662

Mil" 8

-purchases

■Short

sales

Surrender values

PRICE INDEX—

BERS, EXCEPT ODD-LOT DEALERS
Transactions of specialists in stocks in

...

January

CAN

130

:T25

TO©—

r

variation

INSTITUTE—

374,448

2

—May ——-May 2

—

period

AVERAGE™

Total

of

Month

Revenue

*139

129

2.584

RE¬

adjustment/..

ELECTRIC

Kilowatt-hour

4,004
2.753

7,949

■;

seasonal

seasonal

386.G

*jay 2

*

OIL,#AINT AND DRUG REPORTER

ROUND-LOT

of April:

4.42

ASSOCIATION:

(tons)

Production 4 tons)

4949

Month

Adjusted for
Without

4.65

May 12

May 12
—May 12

-—

NATIONAL PAPERBOARD

.,

SALES—FEDERAL

4.94

Mav l2

•'

COMMODITY INDEX

Orflers received

87.18

STORE

4.64

——,11...1--.

.

—

„

Railroad

Public

MOODY'S

4.42

4.56
gaa

95.62
\

credit

SYSTEM—1917-49 Avcragc

SERVE

91.62

89.92

j2

-

—

—-

99.68

86.78

—..May 12
May

corporate

Average

-

91.77

DAILY AVERAGES:

-MOODY'S BOND'YIELD

Service

DEPARTMENT

9,560

3,397
3,579

139

...

3,563

2,759

..

10,320

3,618

3,883

.

2,01.9

8,645

10,260

credit

2,116

8,720

loans

8,179

2,127-

loans..

8,767

Shipments

—

—

102.96

86.91

—May 12
-——MQy 12

Group

-Industrials Group

96.07

92.93

83.03

May 12

——

89.78

91.34
90.06

87.99

12.
12;-..— May 12

Railroad Group

88.27

90.91

89.92

—

—

Aaa

14,793

32,940

8,721

.

EDISON

———

—

goods.
modernization

Single payment loans.
Charge accounts

10.500c

11.000c
24.700c

$42,500

14,223

33,943
14,375

-

and

Personal

22.250c

11.500c

$44,071
33,751

4,341,955
4,301,831
40,124
3,478,465

90,197
3,709.108

term credit

consumer

Repairs

24.175c

AVERAGES:

DAILY

U. S. Government Bonds—

Average corporate

-

Other

$66.49

S33.83

'

May o
May 8
May 6
May 6
;—May b
May 6

Louis) at

BOND PRICES

5.967c

May 6

Zinc (East St.

MOODY'S

Automobile

31.125c

-May
—

at—

at
—
Louis) .at
(primary pig. 99.5<'o)
Straits tin (New York) at

tZinc

6.196c

5,526,814
5,436,617

SERIES—Esti¬

-

'

QUOTATIONS):

J.

M.

&

refinery

Export
Lead

30,017,000
1,571,000

FEDERAL RE¬

short and intermediate
in millions as of March 31:
Total consumer credit
Instalment credit

Noninstalinent

Electrolytic copper—
Domestic refinery at—

•

34,330,000

n,508,000

$44,203

tons)--

mated

DUN &

—

COMPOSITE PRICES:

PRICES

181,466

CONSUMER CREDIT OUTSTANDING—BOARD

11,315,000

Scrap steel (per gross ton)——

..

216,100

6,389,046
6,263,013
126,033
3,587.713

7

tons)

(net

...

METAL

769,968
588,502

347,000

tons)

(net

coke

SERVE

7

.May

Finished steel

.

590,800

MINES)—Month of Mar.

coke stock at end

Oven

357,000

2

OF

(net

coke

Beehive

.

(in 000 kwh.)——

(COMMERCIAL AND INDUSTRIAL)
BRADSTREET, INC————

Pig iron

813,337

806,900

716,200

777

$1,583,305

837,400

34,400,000
1,509,000

7_

-

$1,644,300

341,400
1 ,063,200

.77111
777777

April:

COKE

54,755,000

2

RESERVE
.May
May

100

FAILURES

IRON AGE

52,684

221,171

Month of

—

construction
and

74,296
206,083

CONSTRUCTION—EN¬

construction

construction

Oven
2

May

—

DEPARTMENT STORE SALES INDEX—FEDERAL

Electric output

U.

70,214

79,918

78,613

205,863

Bituminous coal and lignite (ret tons)Pennsylvania anthracite (net tons)

Oft. S. BUREAU OF MINES):

Bituminous coal and lignite (tons)

-

76,393

period

COAL OUTPUT (BUREAU OF MINES)—Month

construction

Private construction

EDISON

140,036
171,145

140,962
138,545

of

ENGINEERING

—

Public construction—_

/

(tons

April (000's omitted):

Public

MAYS-RECORD:

COAL OUTPUT

152,301
145,721

pounds)—.——
(tons)-

NEWS-RECORD

Federal

CONSTRUCTION

Ago

S

2,000

ENGINEERING

54,500.000

State and

U.

December

output all grades

of

GINEERING

—May

Total U. S.
■

at end

6,298,000

78,951,000
58,881,000

CIVIL-ENGINEERING

of

pouncts)

85,584,000

—

Year

Month

MINES):

primary aluminum in the

Shipments (tons of

freight loaded (number of cars)
May
freight received from connections (no. of cars)—May

Revenue

OF

tons)—Month

Slab zinc smelter

May

_

of that dates]

Previous

April:

7,702,000

20,639,000
81,487,000

(bbls.)

are as

either for |1m)

AMERICAN ZINC INSTITUTE, INC.—Month of

6,552,000

May

at
Residual fuel oil (bbls.) at—
ASSOCIATION OF AMERICAN RAILROADS:
Revenue

(BUREAU

short

1,743,000

(bbls.)

Distillate

.

52.3

12,375,000

fuel oil

(bbls.)
.
May
output (bbls.)
May
Resid«al fuel oil output (bbls.)
May
Stocks at refineries, bulk terminals, in transit, in pipe lines—

•

7,132,225

are

Mouth

Ago

27,141,000

May

output

Distillate

of quotations,

cases

Stocks of aluminum (short tons) end of
Dec.

—1

(bbls.)

Kerosene

-

*2,604,000

in

or,

(bbls. of

output—daily average

42 -gallons each)
Crude runs to stills—daily

...

Dates shown in first column

that date,

Latest

93.8

;

production and other figures for th*

cover

Year

INSTITUTE:

PETROLEUM

Crude oil

Month

on

Production of

ingots and castings

AMERICAN

month ended

Week

Equivalent to—
Steel

or

month available.

or

the

The Commercial and Financial Chronicle

(2226)

38

.,

Thursday, May 14. 1.959

.

★ INDICATES

Now in

Securities
•

Academy Life Insurance Co.

30
cents) to be offered for subscription by common stock¬
holders on the basis of 0.525 shares of additional stock
for each share held of record April 24, 1959 (for a 20day standby).
Price—To be supplied by amendment.
working

additional

Proceeds—For

Office—405

capital.

Exchange National Bank Bldg., Denver, Colo. Under¬
writers—Boettcher & Co., Inc. and Bosworth, Sullivan
& Co.,

Inc., both of Denver, Colo.

if Accurate Specialties, Inc., Queens, N. Y.
May 12 filed 95,000 shares of common stock. Price—$2.50
per share. Proceeds—For additional equipment, operat¬
ing expenses, working capital and payment of notes.
Underwriters—Milton D. Blauner & Co., Inc. and Stanley

Offering—Expected

Co., both of New York.
in four or five weeks.
Heller &

Advanced Research Associates, Inc.
Dec.

Price—$6 per share. Proceeds—For research and
development program; and for equipment and working
capital. Office — 4130 Howard Ave., Kensington, Md.
Underwriters — Wesley Zaugg & Co., Kensington, Md.,
and Williams, Widmayer Inc., Washington, D. C.
cents).

Insurance Co.
shares of capital stock (par $10),
being offered in exchange for stock of Anchor Casualty
Co at the rate of one Agricultural share for each Anchor
common share (par $10) and 1 1/10 Agricultural shares
for each share of Anchor $1.75 cumulative convertible

Agricultural

March 23 filed 132,000

preferred stock (par $10). The offer expires on May 28.
Office
215
Washington Street, Watertown, N. Y.
—

Underwriter—None.

29

filed

640,660

of

common

stock, of which 300,000 shares are to be offered cur¬
rently and the remaining 340,660 shares in the future.
Price—To be supplied by amendment.
Proceeds—To

selling stockholders. Office—6327 Santa Monica Boule¬
vard, Los Angeles, Calif. Underwriter—Lester, Ryons
& Co.,

No public offering expected.

Los Angeles, Calif.

Alaska Mines & Metals Inc.

1,431,200 shares of common stock (par $1),
be offered publicly and
431,200 shares are to be reserved for sale to the holders
of 6% debentures due 1962 issued by DeCoursey-Brewis
Minerals Ltd., the company's parent (payment for the
shares by such debenture holders may be made by
delivery of debentures at par plus interest with premium
for Canadian exchange rate)./ Purchasers will receive
common stock purchase warrants on all shares purchased
for cash or for the 6% debentures of the parent at the
rate of one for each five shares purchased. Price—$1.25

of which 1,000,000 shares are to

per share. Proceeds—For general corporate purposes and
working capital. Office_423 Fourth Ave., Anchorage,
Alaska. Underwriter—To be named by amendment

Alberta

Municipal Financing Corp. (Province of
Alberta, Canada)
(5/20-21)
April 29 filed $50,000,000 of 25-year sinking fund de¬
bentures due May 15, 1984 (guaranteed principal and
interest by the Province of Alberta)
Price—To be sup¬
plied by amendment.
Proceeds—To be used towards
the
purchase of securities of municipalities,
cities,
towns and villages within the Province.
Underwriters
The First Boston Corp. and Wood, Gundy & Co., Inc.,
1

both of New York.

if Allied Instruments, Inc.
May 4 (letter of notification) 100,000 shares of common
stock (par 10 cents).
Price—$3 per share.
Proceeds—
For advertising, inventory, equipment and working cap¬
ital. Office—8238 Travelair Street, International Airport,
Houston, Texas. Underwriter—None.
Film

Corp.
April 28 (letter of notification) 150,000 shares of com¬
mon stock.
Price—At par ($1 per share).
Proceeds—
Forworking capital. Office —2700 Wilshire Boulevard,
Los Angeles, Calif.
Underwriter—Alkow & Co., Inc.,
Beverly Hills, Calif.
Alscope Explorations Ltd.
March 26 filed
1,000,000 shares
which 700,000

shares

are

of

capital

stock, of
publicly in the

to be offered

purposes.

Office

basis

share

of

of

shares

of

—

303

Alexandra

Bldg., Edmonton, Canada. Underwriter—None in United
States; Forget & Forget in Montreal, Canada.
American Asiatic Oil Corp.

Underwriter—None.

United

States Telemail
Petroleum

Service, Inc. '

'

Bankers Preferred Life Insurance Co.

incidental to operation of an insurance comOffice—Suite 619, E. & C. Bldg., Denver, Colo.
Underwriter—Ringsby Underwriters, Inc., Denver 2,

expenses
pany.

Colo.
Basic
March

Price—30 cents per share.-

Proceeds—For explora¬
Office/ — 2100: Bcarth-

Armstrong Uranium Corp. F'F/r'Hv/ FFvFF'
16 (letter of notification) 3,000,000 shares of com¬

(par one cent). Price — 10 cents per share
Proceeds—For mining expenses. Office—c/o Hepburn T
Under¬

to be offered for public sale for the

supplied by amendment. Proceeds—To acquire
bowling centers and increase working capital (part
to be used in defraying cost of
acquisition of stock of
owner of a Brooklyn
(N.Y.) bowling center.
Office—
135 Front St., N. Y.
Underwriter — To be named by

>

new

par (56^4 cents per share).
Proceeds—To purchase
for improvements; to buy additional ranch in
Queensland, Australia; and for other corporate purposes.

cattle;

Underwriter—None.

April 17

American Buyers Credit Co. 1

stock, of which

4,545,455 shares of this stock

are to be offered for public
sale at $1.75 per share. [Shares have been issued or are
Issuable under agreements with various policy holders

in

American

Buyers Life Insurance

Life Assurance

Co.

Co.

(both of Phoenix)
at $1.25 per share.

and

American

permitting them
stock
Sales personnel
given the right to purchase stock at $1.25
per share up to the amount of commission they receive
to

purchase

have

been




Automatic Cafeterias for Industy, Inc.

(letter of notification) 100,000 shares of com¬
(par 10 cents). Price—$3 per share. Proceeds
—For expansion, equipment and
working capital. Office
—450 Westbury Ave., Carle
Place, L. I., N. Y. Under¬
writer—None.
Offering—Expected momentarily.
mon

neighborhood of $22 per unit. Proceeds—To be used in
acquisition of substantially all the assets of 39 corpo¬
:

Price—

Robert Kamon

Nov. 13 filed 5,000.000 shares of common

50,000 shares of common stock, not included in the units,
will be offered to its employees. Price—In the

which

rations

Grazing & Pastoral Co., Ltd.

At

•

stock

and a partnership engaged in-the operation of
gasoline stations in Mississippi, Texas, Louisiana,
.Alabama, Missouri, and Tennessee.
Underwriter—The
Johnson, Lane, Space Corp., Savannah, Ga.

: 195

if Blue Ridge Mutual Fund, Inc.
May 8 filed 510,000.000 of Blue Ridge Monthly Accumu¬
lation Programs for the accumulation of shares of Blue
Ridge Mutual Fund, Inc.
Proceeds—For im-estment.

Sponsor—Capital Program

common

maining 166,354 shares
stock

options.

tive March 31.

are

to be issued upon the exercise

Underwriter—None.

stock

mon

Em¬
com¬

which may be acquired pursuant thereto.

Bridgehampton Road Races Corp.

stock, of which,

the company proposes to issue 126,072 shares to A.M.I.
Inc. for the latter's property and
assets, and the re¬
of

Corp., New York.

if Bowser, Inc.
May 7 filed 750 participations in the company's
ployee Thrift Plan, together with 15,COO shares of

Automatic Canteen Co. of America
March 2 filed 292,426 shares of

April 30, 1959, on the basis
shares for each 10 shares then held. Price—

be offered in units of $10 of debentures and two
shares of stock which will not be transferable separately
until Nov. 14, 1959.
The company is also registering

—

Office—Magsaysay Building. San Luis. Ermita. Manila,
Republic of Philippines. Underwriter
Gaberman &
Hagedorn, Inc., Manila. Republic of Philippines.

new

to

provide equipment
propellant rockets.
Office—Alexandria, Va. Underwriter—Johnston, Lemon
& Co., Washington, D. C,

Office—1301 Avenue L, Cisco, Tex.
is President.

stockholders of record

Billups Western Petroleum Co. (5/18-22) ~
April 1 filed $5,000,000 of 6% participating debentures
due May *1; 1984 and 1,000,000 shares of common ^tock

reduce short-term bank loans and to
for development and production of

stock.

.

.

/

common

,

Franklin St., Santa Monica, Calif. '• Under¬
writers-Bear, Stearns & Co., New York.
F: v.

—

filed 4,000,000 shares of

.

Office—1860

Underwriter

Corp. (5/18-22)
110,000 shares of common stock, of which
are
to be offered publicly and 10,000
to employees under company's incentive
plan.
To be supplied by amendment. Proceeds
To

13

v V

Corp.
"/
May 4 filed" 89,620 shares of common slock, of which
76,620 shares are to be offered for subscription by com¬

corporate purposes, including research and development.

shares

Australian

Underwriter—None.

Benson-Leaner

for account of selling stockholders at $7 per share. Pro¬
ceeds—For additional working capital and other general

Atlantic Research

Jan.

,.

$6.75 per share. The remaining 13,000 shares will be sold

March 31 filed

100,000

ing, Oil City, Pa;
"•

mon

Associated Testing Laboratories* Inc.
(5/20) April 22 filed 166,666 shares of common stock (par 10
cents).
Price—$3 per share. Proceeds—For capital ex¬
penditures and general corporate purposes, including

—George, O'Neill & Co., Inc., New York.

.

Creek Oil Co., Inc.
--v...
April 27 (letter of notification} 1,000,000 shares of com¬
mon stock (oar 10 cents)/Price—30 cents
per share. Pro¬
ceed :-r-To pay bank -loans, notes and accounts payable
and for working capital. Office—National Transit Build¬

of three

Offerinsr—Exnected in two weeks.

Office—Caldwell, N. J.

corporate purposes./ Underwriter—Stone &
Corp,x New York. >
r,
• >,

★ Bear

of the company and the common shares will "
be offered for the account-of a selling stockholder. Price
—To be

principal amount Of deben¬

Webster Securities

account

wprking capital.

the basis of $100

tal and other

Associated Bowling Centers, Inc. F^ /
v
Nov. 24 filed 300,000 shares of 20-cent cumulative con¬
vertible preferred stock (par one cent) and
50,000 out¬
standing shares of common stock (par one cent). The

amendment.

on

tures for each 10 shares held on or about June
4/ 1959;
rights to expire oft or about June 17.i Price—To be sup¬
plied by amendment;. Proceeds^-To retire all outstand¬
ing bank loans maturing Dec. 31, 1959, for working capi¬

stock

are

-FF

•

Proceeds—For mining expenses. Office—c/o Harold A.
Roberts,/President, Arroyo Hondo, Santa Fte,- N; Mex.'
Underwriter.-FHyder, -Rosenthal '&i,Co;, / Albdquerque,

holders

Jan.

preferred shares

;v;% •/. -«■-

Basic Materials; Inc.
% F
April 9: (letter of notification) 1,200,000 shares of com¬
mon
stockj (par 10 cents), v Price—25 cents per share.
.

Bausch & Lomb Optical Co.
(6/2) f
May .8- filed * $8*750,000 oL cdft vertible deb^ntdres -^clue
1979, to jbe;; offered for subscription by common/steck-;

Street, Regina, Saskatchewan, Canada/- UnderwriterSecurities, Ltd., Regina, Canada.
v

Armstrong, Round Up Heights, Cheyenne, Wyo.
writer—Bruno-Lencher, Inc., Pittsburgh, Pa.

ProccedsFTb^ellii^/stecl^MeH;^
'FsF-'W

V;

Cumberland

mon

Inc. xF

Underwriter—N one.-: F

&

tion and development program.

Atomics
filed

tee^Counter/Market;

Natural Gas Corp. Ltd. - /
March 23 filed 745,000 shares of capital-stock (no par),
of which 500,000 shares are to be sold for the account
of the company, and 245,000 shares by jthe holders there¬
of.

5

444,246 shares of common stock (par 10
cents).; Price—At prevailing market price, in the Over-

Formerly
.

.

then

Jan. 30 (letter of notiifcalion) 100,000 shares of common
stock (par $1.60). Price—$3 per share.
Proceeds—For

Service, Inc. J
17, 1958, filed 375,000 shares of common stock (par
$1). Price—$4 per share. Proceeds—To purchase equip¬
ment and supplies and for working capital and other
corporate purposes. Office—Salt Lake City, Utah. Un¬
derwriter—Amos Treat & Co., Inc., New York, has with¬
—

.

held; rights to expire on May 25.
principal amount (flat). Proceeds—To be
used for general corporate purposes, including proposed
construction expenditures, and to repay
any outstand¬
ing temporary bank loans obtained for the* same pur¬
poses. Underwriter-FThe First Boston Corp,, -New York.

Feb.

Name

stock

common

Johnson & Higglas, San Francisco, Calif.

in

Baltimore1 Gas & Electric Co;

Price—100% of

• American M. A. R.
C., Inc. (5/15)
April 13 filed 400,000 shares of common stock (par 50
cents).
Price—To be supplied by amendment.
Pro¬
ceeds—For expansion and working capital. Underwriters
—Auchincloss, Parker & Redpath, New York; and Wil¬

Change

,

.

_

,

Louisiana.

underwriter.

•

••

principal, amount of debentures for each 35 shares of

—

as

fpr working capital and other /corporate

Offices—70 State St., Westbury, L. I.. N. Y., and
5877 Rodeo Road, Los Angeles, Calif. -Underwriters
Michael G. Kietz & Co;; Inc.* and Amos Treat r& Co.,
Inc.,

April 17 filed $19,925,500 of 4!i% convertible debentures
due July 1,1974 being offered for subscription by common"
stockholders of record May 7; 1959* on .the basis -of $100

Office—

Syndicate, Inc.
Feb. 24 (letter of notification) 100.000 shares of com¬
mon
stock (par 10 cents).
Price—50 cents per share.
Proceeds—For operation of an apartment hotel.
Office
513 International Trade Mart, New Orleans 12, La.
Underwriter—Assets Investment Co., Inc., New Orleans,

drawn

used-

be

—

Investors

Nov. 24 filed 100.000,000 shares of capital stock. Price—
Two cents per share. Proceeds—To selling stockholders.
—

Will

both of New York.

American

common.

be offered for the account of certain

are to

purposes.

-

nine

Massiilon

Ridge Avenue, Evanston, 111.

American

Price

Stock Exchange (31 cents per share on March 16). Pro¬
ceeds—For properties, drilling costs, working capital and

corporate

2020

the

one

,

Avnet Electronics

75,000 shares

American Hospital Supply Corp.
April 20 filed 20,610 shares of common stock (par $2) to
be offered in exchange for common stock of Massiilon
on

F

selling stockholders. Price—$5j75 per share; Proceeds—
To retire presently outstanding loans, and the balance

—

for

ISSUE

•

American Commercial Barge Line Co. (5/25-29)
April 30 filed 400,000 shares of common stock (par $3).
Price
To be supplied by amendment.
Proceeds — To:
selling stockholders.
Office—Jeffersonville, Ind.
Un¬
derwriter—F. Eberstadt & Co., New York.

Co.

REVISED

Corp. (5/25)
V
~
April 17 filed 175,000 shares of common stock, of which,
•

t°.

shares

United States, and 300,000 shares in Canada. Price—Re¬
lated to the then current market price on the Canadian

general

if American Can Co.
/
May 12 filed $4,000,000 of participations in the company's
1959 Stock Purchase Plan, together with 91,429 shares
ol' common stock which may be acquired pursuant there-

Amican

Feb. 25 filed

Allied Television

Un-

ierwriter—None.

common

PREVIOUS

ITEMS

Automation Instruments, lnc.
r
April 27 (letter of notification) 4,584 shares of common
stock., Price—$6 per share. Proceeds—To go to Lester,
Ryons & Co^ as securities fully and finally paid as an
obligation of the company.
Office—401 E. Green Street,
Pasadena, Calif. Underwriter—None. No public offer¬
ing planned.
F r
;

American Telemail

shares

outstanding

them.] Proceeds—For the operaoffices, both in Arizona and in other

Office—2001 East Roosevelt, Phoenix, Ariz.

dates.

son,

Alaska Juneau Gold Mining Co.
Dec.

Jon of other branch

Rubber

(par five

of common stock

filed 400,000 shares

1

stock sales made by

m

(5/18-22)

310,000 shares of common siock (par

March 31 filed

Registration

ADDITIONS

SINCE
t

Statement-effec¬

Oct. 23
stock

(letter of notification)

share
•will
or

15,000 shares of

common

(par $1) to be offered for subscription by stock¬

holders of record
for

be

each

offered

Nov.

four
to

1,

1958

shares

current

the basis of

on

held:

part of claims, at the rate of

one

unsubscribed

creditors
one

in

new

shares
of

all

share for each

$4

pavment

.

Number 5846

Volume 189

To

under

Price—$4 pfr share. Proceeds—
current creditors.
Address — P. O. Box-506,
offer.

after mailing of
pay

Underwriter

Bridgehampton, L. I., N. Y.
ing—Has been delayed.

—

—None.•

None. Offer¬

/

-

term bank

warrants, exercisable on or be¬
fore Dee. 31^-1960 at $5 per share. Office—r63Q Eighth
Avenue, S. W.„ Calgary, Canada. • •••

—

in the company's
Employees' Stock Purchase Plan, together with an un¬
specified number of shares of its common stock which
may be acquired pursuant thereto.

Securities

stock (par $5).
Proceeds — To
discharge current short-term bank borrowings and for
construction program. Office—Victorville, Calif. Under¬
writer—-William R. Staats & Co., Los Angeles, Calif.

April 30 filed 150,000 shares of common
Price
To be supplied by amendment.

& Co. ahdt Shields
be .received up to

Kidder,/Peabody & Co., White Weld
& Co.r,(jointly).
Bids—Expected to
II. a.m. (EDT) on June 23.

Development Corp.
Dec. 19 (letter of notification) $200,000 of 6% 15-yeax
convertible debentures. Price^—At par ($500 per unit)
Proceeds-r-For expansion and working capital, Office—
901 Seneca Ave., Brooklyn 27, N.
Underwriter —
Sano & Co.. 15 William St.. New York, N. Y. . ;
Brookridge

i

York
h ,h
of 5% convertible. preferred
stock,^series A; (par-$10),.and 164,299 shares .of common
stock "(par $1). All of the preferred shares and 99,299
shares of common stock will be issued in connection
with certain acquisitions of businesses and assets; the
Buckeye Corp., New

York.

(Thursday)

•

(Bids

$2,400,000

inv.ited)

be

to

Di-Noc

to

6947,200

Inc.,;

and Johnston, Lemon

shares

& Co,).1,182',077

*

May 15 (Friday)

tL

and "Wilson, Johnson «,
shares.

703,485 shares.

f

i

; May 18

(C.

^

-

shares

(Charles Plohn & Co.)

Petroleum Go.——
Debentures
Corp.) $5(000,0.00
,,,

Billups Western

Securitifes. Inc.)

(Summit

(Bids

\

(Hallewell,

■T

(Joseph

Cbrpv
V

i

'Magma Power
:■

(J. Barth & Co.)

V

'

(Offering

■

'(White,

,*.+■:* /;

■ ■
v

/.;;•% May 19 (Tuesday)
'

It ajn.

'Bids

'Bids

Gulf

•

11

a m.

to

be

invited) 250,000 shares

(Kidder, Peabody

May 20

-.

;

(The

JiCommon

& Co.)

$4,000,000

'

•

(George,

Interstate

Power
'Bids

(Kidder,

Co
11

a.m.

*-

—Bonds

Common
150,000 shares

May 21

to

Common

——

to

shares

Electrodynamics Corp
$7,616,500

Consolidated Natural Gas
(Offering to atockholders—no




Co.

(Wednesday)

June 3

(Bids

11:30

& Co.)

and

$5,100,000

Mohawk

Common

Rubber Co
Peabody

(Kidder,

(Offering

Bond*

Investors Funding

Debentures

Spiegel, Inc
stockholders—underwritten

to

(Friday)

Precon

Alstyne,

Electronics

Common
and J. C. Bradford & Co.)

(Shearson, Hammill & Co.

shares

8

June

(Monday)

Common

Engineering Co

Electronic

(Kidder, Peabody & Co., Inc.) 100,000 shares

Funds for

Class A

Business, Inc

Power

Blosser & McDowell) $1,500,000

and Straus,

(Tuesday)

June 9
Duke

& Co., Inc.)

Debentures

Corp

(Ira Haupt & Co.

Preferred

Co
(Bids

11

$25,000,000

EDT)

a.m.

(Tuesday)

Juna 16

United Gas Improvement

Bonds

Co

(Bids to be invited) $10,000,000

Bids

11

i

t

(Thursday)

18

Bonds

Worcester Gas Light Co
a.m.

EDT)

$5,000,000

(Friday)

19

Plastic Materials & Polymers, Inc
Common
(Filor, Bullard & Smyth) 143,750 shares

shares

Debens.

(Tuesday)

.Bonds

Brockton Edison Co
'

(Bids

11:30

a.m.

EDT)

$5,000,000

Northern Illinois Gas Co
(Bids to b« Invited) $20,000,000

June 25

Common
Roman & Johnson) $525,000

-

Bonds

Common

(Bid*

Noel & Co.)

Corp

(Charles Plohn & Co. and Netherlands
$875,000

$8,000,000

(Wednesday)

Common

(Offering to

September 10

Common
Securities Co., Inc.)

*

Power Co. (Minn.)
Common
stockholders—bids to be invited) 714,000 shares

Northern States

$750,000

200,000 shares

Beads

to Im Invited)

July 22

——Common

Corp
Plohn & Co.)

(Thursday)

Mississippi Power Co.

20,000 shares

Industries, Inc
(Van

& Co.)

underwritten) $500,000

Saltzman)

Electronics

Wertheim

Spartans Industries, Inc

June 23

Common

Corp

(Torpie &

Poly

Common

Corp. of New York

Narda Ultrasonics

by

$15,417,500

(Monday)

Miami Extruders, Inc
(Aetna Securities Corp. and

Blyth & Co., Inc.)

Common

1

(Offering not

p.

and

stockholders) $300,000

(Newhard, Cook & Co.) 132,500

(Charles

Debentures

(Friday)

Washington, D. C

June

Co.

EDT) $25,000,000

(P. N.) & Co

Nuclear

underwriting) 821,258 shares

Common

stockholders—underwritten by Drexel &
640,306 shares

to

underwriting) $9,288,277

(Thursday)

May 29

Hirsch

15,000 shares

Co.)

&

Philadelphia Electric Co

Common

120,000 shares

Generating Co.

Bank of Commerce,

..Bonds

Mansfield Tire & Rubber Co
Debentures
(Offering to stockholders—underwritten by A. G. Becker & Co.).

Knox

Common

stockholders—no

a.m.

L
$25,000,000

EDT)

a.m.

(Joseoh Mandell & Co., Inc. and Robert L. Fr.rman
$750,000

(Wednesday)

May 28

Common

*

EDT) 710,000 shares

a.m.

June

(Thursday)

stockholders- underwritten by

100,000 shares

Electronics Corp

(Offering to

EDT) $6,000,000

i.Blyth & Co., Inc.) 500,000

Consolidated

(Offering

Common

Inc

Peabody1 & Co.) 110,000 shares

Corp.

Common

Illuminating Co.—

United

Debentures

Florida Power & Light Co

Preferred

$9,988,500

Bonds

(White, Weld

O'Neill & Co., Inc.) $499,998

(Reynolds & Co., Inc.)

(Offering

'

,

(Bids 11

June

Plastics Corp—

•Telecomc.'ting

'

(Bids 11

———--—------—-—----Common

Levine's, Inc.
Pioneer

$50,000,000

<

Packard-Bell

30,000 shares

EDT) $50,000,000

a.m.

200,000

Loeb & Co.; Harriman Ripley & Co. Inc.;
The First Boston Corp.)
$30,000,000

(Wednesday)

Testing Laboratories,

(Bids 11

(Offering

Development Inc.——Bonds
Union Securities & Co.) $7,500,000

Southern Electric

Municipal Financing Corp.
Debens.
First Boston Corp. and Wood, Gundy & Co., Inc.)

Associated

Common

Steel Corp

Preferred

Co.—..—

Interstate Power

Alberta

'

■—Preferred

Utilities Co.—,

States

'Bids

-

EDT> $2,000,000

National
(Kuhn,

EDT) $3,1500,000

Co—w—-----—

Paso Electric

El

j--

152.500 shares

$14,000,000

Weld & Co.)

Dillon,

Webster

&

Morgan Stanley & Co.)

Fair Properties

(Eastman

Stone

Common

Virginia Eleotric & Power Co

$300,000

——

May 27
Food

Debentures
by

$8,750,000

Electric & Gas Co

EDT) $75,000,000

Co., Inc.

Fleming

& Kirkpatrick,

.$6,300,000

(Tuesday)

2

Optical Co

Common

oervice

shares

-Common
Johnson) $1,237,500

America

Corp.)

,,

$1,440,COO

Co.)

&

stockholders—underwritten

-

stockholders—underwritten by The First Boston

to

f,\.

Preferred &.Common

Co

-

Co.) 550,000 shares

EDT)

a.m.

Crucible Steel Co. of

-

W oodcock,

——-Common

Sons and-Clark, Landstreet
Ino.h. $1,400,000

&

Common

EDT) .$7.,8-20,000

—

Walker

/

Class A Stock
Co.) 900,000 shares

(Tuasday)
Edison Co. of New York, Inc.—Bond»
(Bids 11

Equip?„Tr. Ctfs.

Nashville/RR.-—

:^.(BIds- noon

.

Consolidated

vvr" J',

Sulzberger. Jenta,,. Kirklanu ^' Co^ and
Hess, Mover Sc CtT.T'Inc. I $125,000

Louisville &

Lytle

$33,577,000

Manufacturing Go

Krupp

•

Go.)

(Bache &

'-•*;.

•

^-Common

_/

Glickmaru Corp.

:•

J.

Public

May 26

'

Common

Inc

Plohn

(Charles

Bond»

noon

Common'
75,000 shares

Co.)

&

June 5

Electro-Mechanical Specialties Co., Inc.--Common
Myron A. Lomasney*& Co.) $300,000

40

$600,000

(Emch & Co. and The Marshall Co.)

West Penn Power Co

A-

$300,000

Inc.)

Co.,

-

(Dominick & Dominick and Schwabacher & Co.)

Corp.—

(Bache & Co. and Allen &

of-'American- ----—Common

'•'".iCentury Brick Corp.

Petroleum

Texfel

'VirzirJ&jp-i'Sht Johnson. Lane, Space

Blauner &

D.

Civic Finance Corp

Hampshire Ball Bearings, Inc
Common
(Kidder, Peabody & Co., Inc.) 126,000 shares
Electronics Corp
Common
(Kidder, Peabody & Co.) 100,000 shares
Reon Resistor Corp.—
—
Common

.

page

Common

Industries Corp

to

Polarad

.---Common

&,Co.). 110,000;

Lemon

' (Johnston,

; !

Corp.——

Research

Atlantic

on

Burndy Corp.

New

Life Insurance Co
°n
to."stockholders—underwritten by Boettcner. & co.rand Besworth, Sullivan.'& Co.;, Inc.).. 310,000 shares

(Offerine
Inc.

Continued

Common

Towbin & Co., Inc.) 150,000

E. Unterberg,

to press.

go

as we

(Offering

Multi-Amp Electronic Corp
1
Common
(G. Everett Parks & Co.,/Inc.) $298,500

^

Academy
•

•

—Expected

——Common

Investment Corp. of Florida
(Aetna Securities Corp and Roman &

Debentures

(Monday) J

'

$4,000,000

Co

Electronics

Hermes

Inc.) $300,000

$20,000,000

Inc.)

& Co.,

Blyth

Avenue, Westbury, N. Y. Underwriters—Bertner
Earl Edden Co., both of New York. Offering

and

June

—Common

Inc.)

Co.,

&

(Alkow

4

Co, of Texas

General American Oil

Inc.
(letter of notification) 150,000 shares of com¬
mon stock (par 20 cents). Price—$2 per share.
Proceeds
—For machinery and equipment, to retire loans and
notes; for research and development; and working cap¬
ital. Business—Manufactures components for U. S. Gov¬
ernment and the electronic industry.
Office—40 New

Bausch & Lomb

$12,000,000

Great American Realty Corp
(Louis L. Rogers Co. and Joseph Mandcll

Common

Glide Control Corp
—
;
- ;(Reilly,
Hoffman &-Co.,.
"

J
&

and Merrill

Co.

Coil Winders,

Common

(Haydbft, Stond & Co.)

.

Florida-Southern Land Corp

stockholders—underwritten by Kidder, Peabody
Lynch, Pierce, Fenner & Smith, Inc.)

to

(Offering
W

/

*

Florida Powerf Cbrf).-.-^ ------ - - - - - - ivv-~

!

r

•

Securities Corp.)

Corp._

Electronics -Capital

(par

April 7

•

Common

Crown Self-Service Stores, Inc
(Charles Plohn & Co.) $1,250,000

^

stock

common

$1.25). Price—To be supplied by amendment. Proceeds
—To selling stockholders.
Office—Atlanta, Ga. Under¬
writers—The Johnson, Lane, Space Corp. Savannah, Ga.;
and Walston & Co., Inc., New York.

Wellington Electronics,

$125,000

Securities, Inc.)

(Best

of

shares

74,728

(Drexel

Treat & Co., Inc.)

Co., Inc

Tobacco

Continental
-

Insurance Co.

Life

States

filed

Teleflex Ltd

150,000 shares

R. Staats & Co.)

(William

Common

America# M. A. R. C., Inc.
(Atichlndtoes, Parker & Redpath
Higgins). .400,000

31

Co.——Common

Telephone

Interstate

California

Electric Power' Co.----—Common
(Offering to stockholders—underwritten by Dillon, Read & .
-i.: Co. Inc.

Coastal
March

$1,006,250

Potomac
:

ic CCaussen Bakeries, Inc., Augusta, Ga.
May 6 (letter of notification) 29,000 shares of common
stock
(par $1) to be offered to employees under the
Employees' Stock Purchase Plan. Price—$5 per share.
Proceeds—For working capital. Underwriter—None.

(Milton

Common

Avnet Electronics Corp
(Michael G. Klctz & Co., Inc. and Amos

Debentures

stockholders—underwritten.by.; Blair & Co.,
,

z

.V

Chemical Arts, Inc

(Offering

Milwaukee, Wis. Underwriters—Emch & Co. and The
Marshall Co., both of Milwaukee, Wis.

Telectro

(Monday)

Commercial Barge Line Co.__.Common
(F. Eberstadt, & Co.) 400,000 shares

American

(6/2)

Finance Corp.

CALENDAR

ISSUE
May 25

Equip. Trust Ctfs.

Chesapeake & Ohio Ry

Civic

Bros,

Century

•

.

•

May 1 filed 30,000 shares of common stock (par $2). Price
—To be supplied by amendment. Proceeds—To provide
additional working capital. Office—633 North Water St.,

York

'

Brick Corp. of America (5/18-22)
v
April 6 (letter of notification) 150,000 shares of common
stock.
Price—$2 per share.
Proceeds—To be added to
•

NEW
May 14

4J/4% convertible debens. due

1974, being offered for subscription by common stock¬
holders of record May 12, 1959, on the basis of $100 of
debentures for each 22 shares then held; rights to expire
•on May 27.
Price—100% of principal amount. Proceeds
—For construction program, including the repayment of
short-term bank loans incurred for such purpose.
Un¬
derwriter—Eastman Dillon, Union Securities & Co., New

April 28 filed 192,039 shares
,

Illinois Light Co.

Central

•

April 23 filed $10,038,700 of

t

=

Development Corp.
Price—
$20 per share. Proceeds—For purchase and development
of industrial properties and for working capital. Office
—Chattanooga, Tenn. Underwriter—None.
Industrial

March 25 filed 37,500 shares of common stock.

—-

(jointly);

Struthers' & Co.

Wood

and

Hutzler

&

Bros.

(5/25-29)

Co.

Telephone

Interstate

California

bidding.

.competitive

•

Halsey, Stuart & Co. Inc.; Stone &
Corp.; Kuhn, Loeb & Co., Salomon

Probable;; bidders:
Webster

by

determined

Francisco, Calif.

it Burndy Corp.
May 7 filed $1,450,000 of participations

$l;665,100." of common stock of Monand for, construction purposes. Under¬

be

To

Dominick & Dominick, New

—

York; and Schwabacher & Co., San

benture bonds and
writer

mortgage obligations; short-

borrowings; and for various other corporate

Underwriters

purposes.

it Brockton Edison Co. (6/23)
May 7 filed $5,000,000 of first mortgage and collateral
trust bonds due April 1, 1989.
Proceeds—To prepay its
short-term bank loans, to purchase $2,014,100 of de¬
taup Electric Co.

—

Proceeds—For repayment of

upon exer¬

share purchase

of

125,000 share are to be offered for account of the
and 27,500 shares for the account of selling
Price
To be supplied by amendment.

stockholders.

general funds of the company. Office—1020 G. DanieT
Baldwin Building, 1005 State Street, Erie, Pa.
Under¬
writer—Summit Securities, Inc., New York, N. Y.
Chattanooga

(6/2)

company

Oil Co. of Texas

cise

■

Burndy Corp., Norwalk, Conn.

which

Ltd.
V
•vVjV,.;.. v
^
shares of capital stock of which

I,000,000 shares are owned by Wilshire
stockholders and 150,000 shares are issuable

:

.

May 5 filed 152,500 shares of common stock (par $1), of

v

Petroleums,

Britalta

March 30 filed 1,150,000

65,000 common shares are reserved for issuance
Employee Restricted Stock Options. Underwriter

other

about two weeks

discharged; rights to expire

of claims

39

(2227)

Financial Chronicle

The Commercial and

.

Georgia Power

Co

(Bids to b*

(Thursday)

invited) $18,000,000

,

The Commercial and Financial Chronicle

40

York,

White.

Co.. Los Angeles.

Calif.

Price—

March

and Dean Witter &

Thursday, May 14, 1959

.

of notification) $220,000 of 6% unsecured
April 1, 1964 and 1,100 shares of common
atock (par SI) to be offered in units of $200 of deben¬
tures and one share of stock.
Price —$205 per unit
Proceeds—For working capital. Office—Suite 421, 901
6hcrrnan Street, Denver, Colo. Underwriter—Associated
Securities 412 Main Street, Cedar Falls, Iowa.

privilege); rights to expire on May 22.
Trans Caribbean and

v

Commercial Investors Corp.

to

900,000 shares of com¬
Price—At par (10 cents per share). Pro¬
investment. Office—450 So. Main St., Salt

(letter of notification)

Nov.

28

stock.

ceeds—For

3600 M
•

Inc.

(letter of notification) 100.000 shares of com¬
Price—$3 per share. Proceeds
working capital. Office — 611 Broadway, NewN. Y. Underwriter—Adams & Peck, New York.
Offering—Postponed indefinitely.

•

class A stock (par $1).
amendment.
Proceeds — To

Proceeds

ment.

$1,000,000

filed

31

of

subordinated

convertible

1974. Price—To be supplied by amend¬
—

retire mortgage loans

To

and bank

provide additional working capital and for
general corporate purposes. Underwriter—H. M. Byllesby
& Co.. Inc., New York and Chicago.
Offering—Expected
notes and to

the cost of the company's construction

Underwriter—To be determined by competi¬
Probable bidders: Halsey, Stuart & Co.
Co.: The First Boston Corp. Bids
-—Expected to be received up to 11 a.m. (EDT) on
program.

this week.

Derson Mines Ltd.

Consolidated

filed

29

subordinated

convertible

of

1984, to be offered for subscrip¬

Consolidated

Natural

Gas

Co.

Development Corp. of America
April 30 filed 1,376,716 shares of common stock (par $1)
reserved for issuance upon conversion of shares of the

consummated

April 28 filed 821.256 shares of capital stock to be ofa

on

company's $1.25 cumulative convertible preferred stock
received by DCA common stockholders in connection
with the recently consummated merger of Real Estate
Equities. Inc., into DCA and the plan of reorganization

(5/21)
•

l-for-10 share basis to stockholders of record

connection

in

therewith.

Underwriter—

None.

vertible

• Di-Noc Chemical
Arts, Inc. (5/14)
April 8 filed $947,200 of 5V2% convertible subordinated
debentures, due May 15, 1971, to be offered for subscrip¬
tion by common stockholders in the ratio of $100 of de¬
bentures for each 30 common shares held on May 14,
1959; rights to expire on or about June 1. Price—To be
supplied by amendment. Proceeds—For plant expansion
and working capital.
Underwriter—Blair & Co. Inc.,

common

New York.

May 21, 1959; rights to expire on June 10. Price—To be
supplied by amendment. Proceeds—Additions to Treas¬
ury funds and to finance construction.
Underwriter-rNone.
Consolidated Petroleum Industries, inc.

,

April 30 (letter of notification) 80.000 shares of 6(i

con¬

preferred stock (par $3.50) and 80,000 shares of
stock (par .10 cents) to be offered in units of
one share of preferred and one share of common.
(Pre¬
ferred stock may be converted into two shares of com¬
mon stock at any time.)
Price—$3.75 per unit. Proceeds
•—For development of gas properties. Office—908 Alamo
National Bank Building, San Antonio, Texas.
Under¬
writer—Frank Lerner Co., New York, N. Y.
Continental Tobacco

Co., inc. (5 25)
(letter of notification) 100,000 shares of com¬
mon stock (par 10 cents).
Price—$1.25 per share. Pro¬
ceeds—For general corporate purposes. Office—607-12th
Avenue, Huntington. W. Va. Underwriter—Best Secu¬
rities, Inc., New York.
2

Cree Mining Corp. Ltd.
April 17 filed 260.000 shares of
80 cents per

Underwriter

—

common

stock.

Price—

share.

Proceeds—For exploration program.
Office—2100 Scarth St., Regina, Saskatchewan, .Canada.

Regina,

■

Cumberland

Securities

Ltd.,

also

of

.

Crowley's Milk Co., Inc.
26 filed 60,000 outstanding shares of common
stock (par $20). Price— To be supplied by amendment.
Proceeds—To selling stockholders.
Office—145 Conklin
Match

Ave., Binghamton, N. Y.

Underwriter—None.

• Crown Self-Service
Stores, inc. (5/25-29)
April 10 filed 250,000 units, each unit consisting of one
chare of common stock and two common stock purchase
warrants. Price—$3 per unit. Proceeds—For establish¬
ment oi proposed new stores, to pay accounts payable
(trade), to be applied to extinguish long- and shortterm loans, and the balance to increase working capital.
Office—368 E. 87th Street, Chicago, 111. Underwriter—
Charles Plohn & Co., New York.

Crucible

Steel

Co.

of

America

Broadway, Kansas City, Mo.
Under¬
writer—Midland Securities Co., Inc., Kansas City, Mo.
Diversified Inc., Amarillo, Texas
Jan. 6 filed 300,000 shares of common

it Down East Hotels, Inc., Ellsworth, Me.
May 11 (letter of notification) 500 shares of

shares
9.

Price—At

$100

For expansion program.

per share,
(flat).
Proceeds—
Underwriter—1The First Boston

Corpi, New York.

Cycon,

Inc.
(letter of notification) 300,000 shares of com¬
mon stock (par 10 cents).
Price—$1 per share. Proceeds
—For working capital. Office—Mearns
Bldg., 142-148 N.
Washington Ave., Scranton. Pa. Underwriter—Sano &
Co., New York, N. Y.
March 25

Oalton

[Finance, Unc.
March 9 filed $500,000 of 7% subordinated
debentures,
due Jan. 2, 1974, with attached warrants for the
pur¬
chase of 100,000 shares of class A common stock. Price
—At face amount

(in units of $500 each).

Proceeds—To

finance making of additional loans and to reduce short-




capital

stock. Price—At par ($100 per share). Proceeds—To
used to purchase hotel. Underwriter—None.
Duke

be

Power Co.

(6/9)
May 6 filed 250,000 shares of preferred stock (par $100).
Proceeds—To finance cost of construction program. Un¬
derwriter—To be determined by competitive bidding.
Probable bidders: Eastman, Dillon, Union Securities &
Co.; The First Boston Corp.; Morgan Stanley & Co.;
Stone & Webster Securities Corp.
Bids—Expected to be
received up to 11 a.m. (EDT) on June 9.

it Eastern States Oil Co.
April 29 (letter of notification)
ferred
stock

of preferred and five shares of
per

unit.

Shell

shares

2,960

of

pre¬

stock (par $100) and 14,800 shares of common
(par 10 cents) to be offered in units of one share

Proceeds

—

common.

Price—$100.50

For working capital.

Lane, Cushing, Okla.

Office
Underwriter—None.

—

901

Eckert Mineral

New

June

;

writer—Investment Service Co., Denver,, Colo.
•

Electro-Mechanical

Specialties Co., Inc.

(5/18-22)

April 27 (letter of notification) 100,000 shares of capital
stock (par 20 cents).
Price—$3 per share. Proceeds—
To pay in full a current debt of the
company to Joseph
Goodman

for additional working capital.
Office—
Street, Banning, Calif. Underwriter—Myron
A. Lomasney & Co., New York, N. Y.
'
and

743 W. 39th

•

Electro

Networks, Inc.
(letter of notification) 100,000 shares of com¬
mon stock (par 10 cents).
Price—$2.70 per share. Pro¬
ceeds
To purchase test equipment,. and for general
working capital. Office—1920 Park St., Syracuse, N. Y.
April 2

Charles

—

it Electronic

Plohn &

Engineering

Co., New York, N. Y.

Co.

of

California

(6/8-12)

May 13 filed 100,000 shares of common stock, of which
78,750 shares are to be offered for the account of the
company (including 10.000 shares initially to employees)
and 21,250 shares for account of eight selling stockhold¬
ers.

For

Price—To be supplied by amendment.
Proceeds—
capital expenditures and working capital. Under¬

writer—Kidder, Peabody & Co. Inc., New York,
• Electronics
Capital Corp. (5/25-29)
/'
April 27 filed 1,200,000 shares of common stock (par $1).
Price—$10 per share. Proceeds—For investment. Office—■
San Diego, Calif. Underwriter
Hayden, Stone & Co.,
—

New York.

Emerite Corp.

Jan. 19

(letter of notification) 250,000 shares of series 3
stock (no par) to be offered for
subscription
by stockholders on the basis of one share of series 3

common

stock for each
common

three

shares

of series

1

and/or series 2

stock

held; unsubscribed shares to other stock¬
Rights expire 30 days from offering date,
Price—$1 per share.
Proceeds—For working capital.

Office—333 S. Farish

Street, Jackson, Miss. Underwriter

—None.

Research, Inc.
(letter of notification) 150,000 shares of

com¬

stock (par 50 cents). Price—$2 per share. Proceeds
—For mining and selling of ore. Office—110 E. Main
St.,
mon

Florence, Colo..

Underwriter—Harris

Securities

Corp.,

York, N. Y.

El Paso Electric Co.

April
1989.

16

filed

$3,500,000

(5/19)
of

first

mortgage bonds due
Proceeds—To retire outstanding short-term notes,

Halsey, Stuart & Co.; Merrill Lynch, Pierce, Fenner &
Smith, Inc.; Stone & Webster Securities Corp.; Kidder,
Peabody & Co.; White, Weld & Co. and Shields & Co.
(jointly) Equitable Securities Corp. and R. "W. Pressprich & Co. (jointly). Bids—To be received up to 11
a.m.
(EDT) on May 19 at 90 Broad Street, New York.
N. Y.
El

Paso Electric Co.

(5/19)
20,000 shares of cumulative preferred
stock (no par). Proceeds—To retire
outstanding shortterm notes, and for 1959 construction
program. Under¬
16

filed

holders.

Underwriter—None.

Equity Annuity Life Insurance Co.
April 21 filed $1,000,000 of Variable Annuity Policies,
Price—No less than $120 a year for annual premium
contracts and no less than $1,500 for single premium
contracts. Proceeds—For investment, etc.
Office—2480
16th Street, N. W.,
Washington, D. C. Underwriter—
None.

it Fedders Corp., Long Island, N. Y.
May 12 filed $3,815,000 of sinking fund subordinated de¬
bentures, due May 31, 1959, with warrants to purchase
152,632

shares of

scription by

stock

common

to be

stockholders

in

offered

units

for

sub¬

of

$100 of
debentures with warrant for the purchase of four shares
of stock at

Price—$100

common

the rate of
per

unit for each 50 shares held.

one

unit. Proceeds—To be used for the most

part for the purchasing of products by company's dis¬
tributors and dealers; and the balance will be used for
general corporate purposes.
Underwriter—Allen & Co.,
New York.

Federated Corp. of Delaware
29 filed $918,000 of 6% convertible

Dec.

subordinated

debentures

due 1968.
The company proposes to offer
$210,000 of the debentures to purchase the capital stock
of Consumers Time Credit, Inc., a New York
company;
$442,000 of the debentures in exchange for Consumers
debentures; and $226,000 of the debentures in exchange
for the outstanding 12% debentures of three subsidiaries
of Federated.

N".

Y.

Nov.

Office—1 South Main

Street, Port Chester,

Underwriter—None.

Federated

and for 1959 construction program. Underwriters—To be
determined by competitive bidding.
Probable bidders:

April

Empire Millwork Corp., Corona, N. Y.
April 17 filed 95,000 outstanding shares of common stock.
Price
$10.25 per share. Proceeds — To selling stock¬
—

stock (par 50
cents). Price—$3 per share. Proceeds—For acquisition
of undeveloped real estate, for organization or acquisi¬
tion of consumer finance business, and balance to be
used for working capital.
Underwriter — Investment
Service Co., Denver, Colo., on a best efforts basis.

basis of
88

snares

Office—911

ers.

March 27

share of convertible preferred stock for each
of common stock held; rights to expire on

May 11,

holders.

DIT-MCO, Inc.
April 15 filed 30,000 outstanding shares of common stock.
Price—$10.50 per share. Proceeds—To selling stockhold¬

(5/26)
May 4 filed 99,885 shares of cumulative convertible pre¬
ferred stock (par $100) to be offered for subscription by
common
stockholders of record May 26, 1959, on the
one

(par $5)

record

held

then

Underwriter

•

rights to expire on June 8.
Price — To be supplied
by amendment. Proceeds—To pay bank loans.
Office
—Pasadena.
Calif.
Underwriter — Birth & Co., Inc.,
New York and San Francisco.

stock

share for each 25

Offering—Expected momentarily.

shares of common stock. Price—$J
share. Proceeds—For new equipment, repayment o1
loan, acquisition of properties under option, and other
corporate purposes. Office—Toronto, Canada, and Em
oorium, Pa. Underwriter—None.

tion by common stockholders in the ratio of $100 deben¬
tures for each 14 shares of common held as of May 20;

April

new

Xune 5 filed 350,000

(5 '21)

Electrodynamics Corp.

$7,616,500

debentures due June 1,

fered

stock

common

one

per

May 26,

April

the basis of

on

—

bidding.

Inc.: Morgan Stanley &

•

be supplied by

debentures due

April 24 filed $75,000,000 of first and refunding mort¬
gage bonds, series P, due June 1, 1989. Proceeds—To
retire short-term bank loans of $27,000,000, and also

tive

\

Electric City Supply Co.
April 6 (letter of notification) 300,000 shares of class A
common stock (par 25 cents).
Price—$1 per share. Pro¬
ceeds—For inventory, equipment, working
capital, etc.
Office—901 S. Lake Street, Farmington, N. Mex. Under¬

St., N. W., Washington, D. C. Underwriter—None.

DeJur-Amsco Corp.

March

fee used towaid

,

(with an oversubscription
privilege); rights to expire on May 26. Price—S28 per
share. Proceeds—To retire outstanding short-term
notes,
and for 1959 construction program.
Dealer-Manager—
Stone & Webster Securities
Corp., New York.

South, New York 19, N. Y., and

week.

(5 26)

Consolidated Edison Co. of New York

of

Proceeds—To selling stockholder. Of¬

selling stockholders. Underwriter—H. M. Byllesby & Co.,
Inc.. New York and Chicago.
Offering—Expected this

stock (par 10 cents).

York.

/:•/•-/

El Paso Electric Co.

1959,

DeJur-Amsco Corp.

Price—To

April 21
—For

Bids—To be received up to 11
May 19 at 90 Broad Street, New York,

on

April 16 filed 76.494 shares of common
being offered to common stockholders of

Employees of

March 31 filed 225,000 shares of

N. Y.

Eastman

'.J

•

its subsidiaries will have the right

fices—i6o Central Park

Utah. Underwriter—Earl J. Knudson & Co..
Salt Lake City, Utah.

mon

(EDT)

N. Y.

purchase up to 100,000 of the said 350,000 shares. Price

—$10 per share.

JLake City,

Computer Systems,

determined

Pierce, Fenner & Smith.
a.m.

cents)

Airways, Inc., which owns all of this stock,
outstanding class A stock, and hold¬
ers
of its outstanding 5¥>%
convertible subprdinated
debentures of record April 22, on the basis of one share
of class A stock lor each three shares of the class A
stock of Trans Caribbean which such holders either hold
as stockholders or to which they are entitled upon con¬
version of their debentures (with an oversubscription

debentures due

mon

20

bidders:

Caribbean

25 (letter

Feb

(par

stock

to the holders of its

Water & Power Co.

Colorado

350,000

filed

23

common

Offering—Expected late in June.

Inc. (Del. )
outstanding shares of class A
being offered by Trans

C. Transit System,

D.

Underwriters

investment.

market.
Proceeds—For
Weld & Co., New

At

•

.

by competitive bidding.
Dillon, Union Securities &
Co.;
Salomon
Bros.
&
Hutzler;
Kidder,
Peabody
& Co., and White. Weld & Co.
(jointly); Merrill Lynch,

Offering—Expected this week.

best efforts basis.

Inc., Boston, Mass.

1.100.000 shares of common stock.

be

To

—-

Probable

derwriter—Paul

Energy Shares,

Colonial

•

May 5 filed

writer

Office—3800-34th St., Mt. Rainier, Md. Un¬
C. Kimball & Co., Chicago, 111., on a

term debt.

Continued from page o(J

•

.

(2228)

17

Finance

Co.

(letter of notification)

$300,000 of 10-year 6%

«enior subordinated debentures.

Price—At par (in de¬
nominations of $1,000 each). Proceeds — For working
;apital, to make loans, etc. Office—2104 "O" St., Lin¬
coln, Neb. Underwriters — J. Cliff Rahel & Co. and

Eugene C. Dinsmore. Omaha. Neb

Fidelity Trend Fund, Inc., Boston, Mass.
May 1 filed 50,000 shares of capital stock. Price—At net
asset

value.

Proceeds

—

For

investment.

Investment-

Manager—Fidelity Management & Research Co., Boston,
Agent—Crosley Corp., Boston, Mass.
Offering—.
To be made within organization.

Mass.

Finance For Industry,

Dec.

Inc.

16 filed 200,000 shares of class A common stock.
Price—At par ($1.50 per share). Proceeds—For working

Number 5846

Volume 189

—

Under¬
Detroit,

Mich.

Distributor of food

Underwriter—White, Weld

products.

& Co., New York.

$2.50)

subscription by common stockholders
of record May 14, 1959, on the Basis of one new share
for each 12 shares of common stock then held (with an
oversubscription privilege); rights to expire on June 3,
1959. Price—To be.supplied by amendment. Proceeds
-t~To pay off $7,000,000 of temporary bank loans, which
were incurred/to meet construction expenditures, and
the balance will be applied to the 1959 construction
program. /' Underwriters — Kidder, Peabody & Co. and
Merrill Lynch, "Pierce, Fenner & Smith Inc., both of
offered for

New York.

★ Florida Power & Light Co.

bonds due 1989.
Proceeds—To be used to provide additional electric fa¬
cilities and for other corporate purposes, including re¬
payment of $7,000,000 of short-term bank loans made
in March, 1959, for similar purposes.
Underwriter—To
be determined by competitive bidding.
Probable bid¬
ders: Halsey, Stuart & Co. Inc.; Merrill Lynch, Pierce,
Fenner & Smith, Inc. and Kidder, Peabody & Co. (joint¬
ly); White,/Weld & Co.; The First Boston Corp. BidsExpected to be received up to 11:30 a.m. (EDT) on
June 3.

(5/25) 1

Florida-Southern Land Corp.

April 13 filed 2,000,000 shares of common stock. Price
$2 per share.
Proceeds — For construction of motel
units and other facilities.
Office — Tom's Harbor, Fla.
Underwriter—Alkow & Co., Inc., New York.

—

k Fluorspar Corp. of America
of notification—as amended) 300,000 shares
of common stock.
Price—At par ($1 per share). Pro¬

Feb. 5 (letter

mining

shares of class "A" common stock

Statement effective

Tenn.

April 24.

ment.

April 6 (letter of notification) 225,000 shares of com¬
capital stock (par 25 cents). Of the total, 195,000
shares are to be offered for the account of the company
and 30,000

share.

Development Inc. (5/27).
May 5 filed together with Food Fair Properties Inc. (1)
$7,500,000 of 25-year collateral trust bonds, due May 15,
1984 of Food Fair Properties Development, Inc. and (2)
7,500 warrants for the purchase of 750,000 shares of
common stock of Food Fair Properties.
It is proposed
to offer these securities in units each consisting of $1,000
principal amount: of the bonds and a warrant to pur¬
chase 100 common shares.
Price—$1,000 per unit. Pro¬
ceeds
To be used for loans to subsidiaries.
Office—•

Philadelphia, Pa.
Underwriter—Eastman Dillon,
Securities & Co., New York.
•

Union

Properties, Inc.
Fair Properties Development Inc., above.

Food Fair

Foundation Investment Corp., Atlanta, Ga. /H
Jan. 13 filed 231,988 shares of common stock to be of¬
fered for subscription by stockholders; unsold portion
1

publicly. Price—$12.50 per share. Proceeds
Office—515 Candler Bldg., Atlanta,
Ga. Underwriter—None. Statement effective April 2.

to be offered

—To repay notes.

★ Franklin Electric Co., Inc.
May 12 filed 40,000 shares of common stock, of which
20,000 shares are to be offered for the account of the
company, and 20,000 shares for the account of certain
selling stockholders. Price—To be supplied by amend¬
ment. Proceeds—To be advanced to a subsidiary for the

of constructing an addition to a building now
being leased from the subsidiary.
Office —400 East
Spring Street, Bluffton, Ind. Underwriter—Fulton Reld
& Co., Inc., Cleveland, Ohio.
purpose

if Funds For Business, Inc. (6/8-12)
May 8 filed 500,000 shares of class A

stock. Price—$1.50

shares for

a

selling stockholder. Price—$1 per

Proceeds—For furniture

(letter of notification) 285,000 shares of com¬
Price—At par ($1 per share). Proceeds—T©
pay existing liabilities; for additional equipment; and
for working capital.
Office—East Tenth Street, P. Q.
Box 68, Great Bend, Kan., Underwriter—Birkenmaya*
& Co., Denver, Colo. •: ' • / '
• * -• • •
/:; • > •
-■
, ■:

Corp.

k

voting preferred stock
(par $100) and 66,131 shares of 80-cent dividend voting
second preferred stock (convertible—par $1). The com¬
pany proposes to offer one share of the 80-cent dividend
second preferred stock for each share of New Rochelle

March 31 filed 16,131 shares of $5

and

one

share

preferred and one
for each

of its $5

share of the 80-cent dividend second preferred

(including accu¬
mulated unpaid dividends from November, 1950). The
offer is conditioned upon acceptance by holders of 80%
of New Rochelle stock. Office—3219 Philadelphia Pike,
share of New Rochelle $3.50

preferred

Claymont, Del.

Glide Control Corp.

(5/15)

April 10 (letter of notification) 300,000 shares of com¬
mon stock (par 10 cents). Price—$1 per share. Proceeds
—For manufacture, marketing and distributing of auto¬
matic throttle control devices for motor vehicles. Office
—1608 Centinela Blvd., Inglewood, Calif. Underwriter—
Reilly, Hoffman & Co., Inc., New York.
Government Employees Variable Annuity

Life

stock (par $4) of Government Employees
on the basis of one warrant per share of

164,733 common shares would be outstanding.
share. Proceeds—For capital and surplus.
Office—Government Employees Insurance Bldg., Wash¬
total of

per

ington, D. C. Underwriters — Johnston, Lemon & Co.,
Washington, D. C.; Eastman Dillon, Union Securities &
Co., New York; and Abacus Fund, Boston, Mass. Offer¬
ing—Indefinitely postponed.
Great American Realty Corp.

(5/25-29)

900,000 shares of class A stock (par 10
cents). Price—To be supplied by amendment. Proceeds
—For working capital. Office—15 William Street, New
York. Underwriter — Louis L. Rogers Co. and Joseph
March 30 filed

Mandell Co., Inc.,

both of New York.

Growth Fund of America, Inc.

250,000 shares of common stock (par 10
Price—At market. Proceeds—For investment.
Office —1825 Connecticut Avenue, Washington, D. C.
Investment
Advisor — Investment
Advisory
Service,
Feb.

4

filed

Washington,

D.

C. / Underwriter—Investment

Manage¬

Washington, D. C.

ment Associates, Inc.,

if Gem State Consolidated Mines, Inc.
May 1 (letter of notification) 100,461 shares of common
stock (par five cents). Price—50 cents per share. Pro¬
ceeds— For mining expenses.
Office — 3620 Sycamore

notes, and the balance to carry forward the company's
construction program and for other corporate purposes.
Underwriter—To be determined by competitive Bidding.

Drive, Boise, Idaho.
•

Underwriter—None.

General American Oil Co. of Texas

April 23

(5/15)

filed $20,000,000 of subordinated

debentures,

1984 (convertible). Price—To be supplied by
amendment. Proceeds—For general corporate purposes,
due May 1,

including repayment of some $2,500,000 of bank loans;
for additional working capital.
Office—Meadows

/and

?Bldg., Dallas, Tex. Underwriter—Blyth & Co.,
York.
.

.

-

''

Inc., New

•

Now York
filed 42A£88aharea of common A stock (n*
par) and 1,537,500 shares of common B stock (par $1)
Proceeds—To the Attorney General of the United States
Underwriter—To be determined by competitive bidding
Probable bidders: Blyth & Co., Inc., and The First Boaton
Corp. ./ (jointly);
Kuhn, Loeb & Co:; Lehman
Brothers, and Glore, Forgan & Co. (jointly). Bids—Had
been scheduled to be received up to 3:45 p.m. (EDT) on
May 13 at Room 654,101 Indiana Ave., N. W., Washing*
k General AnUin© A Film Corp.,

Jon. 14,1957

-«

-ton 25. D

...

C

but bidding has been postponed.

At General Dynamics Corp.
May 3 filed 400,445 shares of common stock, to be offered
under the company's Restricted Stock Option Plan to




Gulf States

(5/19)

Utilities Co.

April 17 filed 250,000 shares of common stock (no par).
Proceeds—To be used for the repayment of short-term

Probable

• -

Tlard, Cook & Co., St. Louis, Mo.l

of common stock (par $1),
to be publicly offered aim
10,000 shares to officers and employees. Price—$10 ptff
shares to public; $9 to employees. Proceeds—To selling
stockholder.
Underwriter — For public offering: Van

March 9 filed 260,000 shares
of which 250,000 shares are

Alstyne, Noel & Co., New York.
indefinitely.
//- Home-Stake Production Co.,

bidders:

Merrill

Lynch,

Pierce,

Offering—Postponed
v.

.

Tulsa, Okla.

Nov. 5 filed 116,667 shares of common stock (par $9).
Price—$6 per share. Proceeds—For working capital a*G
general corporate purposes. Office — 2202 Philtowwr
Bldg., Tulsa, Okla. Underwriter—None.

Imperial Growth Fund, Inc.
Proceeds —For investment.

stock. Price—A|
Office — 60 Mar*»

quette Ave., Minneapolis, Minn. Underwriter
neapolis. Associates, Inc., Minneapolis, Minn.
Industrial Minerals Corp.,

Fenner

&

—

Min¬

Washington, D. C.

July 24 filed 600,000 shares of common stock (par on©
cent). Price—$1 per share. Proceeds—To develop and
operate graphite and mica properties in Alabama. Un¬
derwriters—Dearborn & Co. and Carr-Rigdom & Co.*
both of Washington, D. C., on a

best efforts basis. State¬

ment effective Nov. 18.

Information

Systems,

Skokie, III.

Inc.,

April 21 filed 170,000 shares of common stock to
subscription by common stockholders of

fered for

be of¬
Panel-

lit, Inc., at rate of one new share for each three Panellit
shares held of record May 15, 1959, Price—$3.5®

common

per share. Proceeds—To pay notes, for research and de¬
velopment costs; and working; capital. Underwriter—

None.

/////'•

if Insurance Securities, Inc., Oakland, Calif.
May 5 filed (by amendment) an additional 27,380 units,$1,000 each, of Single Payment Plans, Series U, anct
18,850 units, $1,200 each, of Accumulative Plans, Series*
E. Proceeds—For investment.

C.
$500,000, twoyear, 3% per unit; series C, $1,000,000, four-year 4% peg
unit; and series D, $3,500,000, 6-year, 5% per unit). Prla©
—100% of principal amount.
Proceeds —For working
capital. Underwriter—Johnston, Lemon & Co., Wash¬
ington, D. C. Offering—Indefinitely postponed.
International Bank, Washington, D.
$5,000,000 of notes (series B,

Dec. 29 filed

International

■

cents).

share. Proceeds—For working capital. Office—120
East 41st Street, New York. Underwriters—Joseph Mandell & Co., Inc., New York; and Robert L. Ferman &
Co., Inc., Miami, Fla.
per

j

(P. N.) & Co., St. Louisa No. (6/1*5);
April 29 filed 132,500 outstanding shares of common
stock (par $1).
Price—To be supplied by amendment.
Proceeds—To selling stockholders.
Underwriter—NewHirsch

Insurance Co.,
stock held (1,-

334,570 shares are now outstanding); (2) to holders of
common
stock (par $1.50) of Government Employees
Life Insurance Co., on the basis of l1/* warrants per share
of stock held (216,429 shares are now outstanding); and
(3) to holders of common stock (par $5) of Government
Employees Corp., on the basis of Vz warrant per share of
stock held (as of Dec. 31, 1958 there were 143,703 shares
of stock outstanding and $589,640 of 5% convertible cap¬
ital debentures due 1967, convertible into shares of com¬
mon at $28.0374 per share.
If all these debentures were
converted into common stock prior to the record date,

•

Underwriter—None.

market.

Nov. 13 filed 2,500,000 shares of common stock (par $1)
to be offered by company viz: (1) to holders of common

a

of common
cents). Price—At prices generally prevail¬
ing on the American Stock Exchange.
Proceeds — T©
selling stockholders. Office — 250 Park Avenue, N. Y.

stock (par 25

March 2 filed 606,000 shares of common

Insurance Co.

Price—$3

Highway Trailer Industries, Inc.
Nov. 24 filed 473,000 outstanding shares

-Hoffman Motors Corp.

(5/18-22)
March 13 filed 3,357,700 shares of common stock. Price
—$10 per share. Proceeds — For properties, furniture,
fixture and leasehold improvements and other expenses.
Office—565 Fifth Ave., New York, N. Y. Underwriter
—Bache & Co., New York, N. Y.
Glickman Corp.

•

the pre¬

stock.

mon

Inc., Pine Bluff, Ark.

Co.

in part towards

March 11

St., Pine Bluff, Ark. Underwriter—Lovan Securities Co.,
Waterworks

be used

Hickerson Bros. Truck Co., Inc.

inventory and improved

merchandising methods, to finance the real estate depart¬
ment and insurance policy loans. Office—211-215 Pine

General

Proceeds—To

-

payment of notes and balance to be used for general j
corporate purposes. Office—Cambridge, Mass.
Under¬
writer—C. E. Unterberg, Towbin & Co., New York, will
underwrite the 150,000 shares of common.
V

General Underwriters Inc.

Securi¬

Food Fair Properties

See Food

'

(par one cent). Price—$10 per share. Proceeds—For/ '
working capital and general corporate purposes. Under¬
writer — Union
Securities Investment Co., Memphis,

Office—4334 S. E. 74th

expenses.

Ave., Portland 6, Ore. Underwriter—Evergreen
ties, Inc., 4314 N. E. 96th Ave., Portland, Ore.
•

18 filed 250,000

Feb.

Water

(6/3)

May 8 filed $25,000,000 of first mortgage

ceeds—For

''

mon

Florida Power Corp. (5/15)
April 16 filed 703,485 shares of common stock (par

<

/!/kk:

Merchandising Corp., Memphis, Tenn.

General

Fleming Co., Inc., Topeka, Kan. (5/26)
May 1 filed 100,000 shares of common stock (par $5),
of which 75,000 shares are to be offered for the account
of the company, and 25,000 shares for the account of
certain selling stockholders.
Price—To be supplied by
amendment. Proceeds—For working capital. Business—

to be

Z.Z

of holders of $5
such stock; 20,006
shares issuable upon the exercise of rights of holders of
5% 10-year sinking fund debentures due 1965 to con¬
vert such debentures, and 734,374 of presently outstanding shares which may be offered by holders thereof.
Name Change—This company was formally known as
Hycon Eastern, Inc. Price.—To be supplied by amend¬
issuable upon the exercise of rights
cumulative preferred stock to convert

employees of the company and its subsid¬

officers and
iaries.

41

(2229)

The Commercial and Financial Chronicle

.

.

Office—508 Ainsley Bldg., Miami, Fla.
R. F. Campeau Co., Penobscot Bldg.,

capital.
writer

.

Railroads Weighing Corp.

(letter of notification) 82,626 shares of com¬
mon stock
(par $1) to be offered for subscription by
common stockholders at rate of one new share for each
four shares held. Price—$3 per share. Proceeds — For
research and development costs and working capital.
Office—415 Spruce St., Hammond, Ind.
Underwriter—
April 16

None.

International Tuna Corp.

April 3

(letter of notification) 175,000 shares of class
(par 50 cents).
Price — $1 per share.
equipment and working capital. Offic©

A common stock

Proceeds—For

Underwriter—Gates, Carter & Co.,

Smith, Inc. and Lehman Brothers (jointly); Trie First
Boston Corp.; Carl M. Loeb, Rhoades & Co.; Stone &
Webster Securities Corp. Bids—Expected to be received

—Pascagoula, Miss.

May 19 at The Hanover Bank, 70
Broadway, New York 15, N. Y.
Heliogen Products, Inc.
Oct. 22 (letter of notification) 28,800 shares of commoa
stock (par $1).
Price—$5 per share. Proceeds—Fof
payment of past due accounts and loans and general
working capital. Office — 35-16 Astoria Blvd., L. I. C
3, N. Y. Underwriter—Albion Securities Co., Suite 1511,
11 Broadway, New York 4, N. Y.
Hemisphere Gas & Oil Corp.
April 27 (letter of notification) 300,000 shares of com¬
mon stock.
Price—At pur ($1 per share),
Proceeds—
For development oi oil and gas properties. Office—702
American Bank Building, Portland 5, Ore.. Underwriter
—D. Earle Hcnsley Co., Inc., 4444 California Avenue,

April 7 filed $6,000,000 of first mortgage bonds due 1989.
Proceeds — To repay bank loans and for construction

up

to noon (EDT) on

Seattle, Wash.
Hermes

April

29

•

Interstate

program.

Power Co.

Electronics Co.

statement also

(5/25-29)

of common stock.

The

includes 36,755 shares of common

stock

150,000

shares

the exercise of options; and 147,564 shares

(5/20)

Underwriter—To be determined by

competitive

bidding. Probable bidders: Halsey, Stuart & Co. Inc.j
Blyth & Co., Inc. and Salomon Bros. & Hutzler (jointly) j
Merrill Lynch, Pierce, Fenner & Smith, Inc.; Kidder,
Peabody & Co. and Lehman Brothers (jointly); White,
Weld & Co., Bids.— Expected to be received at Chase
Manhattan Bank, 43 Exchange Place, New York, N. Y.f
up

to 11 a.m." (EDT) on May 20.
Interstate Power Co.

- >

.

(5/19)

April 7 filed 80,000 shares of cumulative preferred
(par $50). Price—To be supplied by amendment
ceeds—For construction program.

stock
Pro¬

Underwriter—Kidder,

New York.
'
Florida (5/25-29)
April 13 filed 275,000 shares of common stock.

Peabody & Co.,
Investment

filed

issuable upon

Gulfport, Miss.

Corp. of

$4.50 per share. Proceeds—For

Price—
acquisition and develop-

Continued

on

page

4%

42

The Commercial and Financial Chronicle

(2230)

Continued from page
ment

land

of

in

•

41

Florida.

Office —1750

Boulevard, Fort Lauderdale, Fla.

East

Sunrise

Underwriters—Aetna
Johnson, Fort

Lauderdale, Fla.
Investors Commercial Corp.

April 6 filed 105,000 shares of common stock. Price—To
be supplied by amendment. Proceeds—To selling stock¬
holders.
Office — 180 W. Randolph St., Chicago, 111.
Underwriter—Paul C. Kimball & Co., Chicago, 111.

of New York (6/1)
$500,000 of 10% subordinated debenture!

Investors Funding Corp.
Feb.

17 filed

due July 31,

1964, to be offered in units of $1,000. Price
principal amount. Proceeds—For invest¬

—At 100% of

Office—511 Fifth Ave., New York, N. Y.
writer—Nonev
ment.

I rando Oil &

convertible preferred
(par $10) and 500,000 shares of common stock
(par 10 cents) to be offered in units consisting of one
preferred share and five common shares.
Price—$63
per unit.
Proceeds—For drilling and exploration pro¬
gram; and for working capital, and general corporate
purposes.
Office—Virginia & Truckee Bldg., Carson
City, Nev. Underwriter—J. Barth & Co., San Francisco,

Saltzman, New York.

April 3 filed 100,000 shares ol 6%

Securities Corp., New York; and Roman &

Under¬

stock

April 24 filed 225,000 shares of common stock. Price—90
cents per share. Proceeds—To defray the costs of explo¬
ration and development of properties and for the ac¬

quisition of other properties; also for other corporate
Office—1950 Broad St., Regina, Sask., Can.
Underwriter — Laird & Rumball, Regina, Sask., Can.

purposes.

it Kaiser Aluminum & Chemical Corp.
May 11 filed 64,028 shares of 4%% cumulative convert¬
ible (1959 series) preference stock (par $100) and 128,052 shares of common stock, issued in exchange for the
outstanding stock of Mexico Refractories Co. through
merger.
Price—To be supplied by amendment.
Pro¬
ceeds—To selling stockholders. Underwriter—None.
it Knox Corp., Thompson, Ga. (6 8-12)
May 8 filed $1,500,000 of 6%
subordinated sinking
fund debentures, with class A common stock purchase
warrants attached (for the purchase of 75,000 shares or

R.

new

4

National

Gypsum Co.

'''ZMyy/'-y/ 't

-.r.-

;

outstanding comnidn shares Of Huron Portland Cement

'

Co.

lli■■^th.e,-'raiib/^7^iO',^.sAVs>^iare:^f.'Natipih^■■stofek^fa^(w
Offer will expire on

each share of Huron stock.

Statement effective April 28.

"

May 19.
;

.

an

Brooks

&

National Life & Casualty insurance Co.
March 25 filed 250,000 shares of common capital
be

to

Co., Inc., New York.

offered

to

holders

insurance policies

it Mansfield Tire & Rubber Co.

(6/3)

of
on

stock .f

certain
o,r

of company's life
prior to Dec. 31, 1955, i

employees. Price—$4.44

share.

per

Pro¬

increase/capital and surplus. Office — 2300 '
Central" Av6., "Phoenix, Ariz. Underwriter—None. /

North

it National Malleable & Steel Castings Co. y
May 11 (letter of notification) 7,535 shares of common
stock (no par) to be offered to certain officers and other
key employees under stock option plan. Proceeds—For
working capital. *
-

Chicago, 111.

XC
.

.

Midland

National

of record May 12, 1959, on the basis of one new share for
each 20 shares then held, rights to expire on June 1.

share. Proceeds—To pay an

outstanding
bank loan due Sept. 30, 1962, and for general corporate
purposes. Underwriters — The First Boston Corp. and
per

Steel

(5/27)
May 5 filed $80,000,000 of first mortgage bonds due June
1, 1989. Price—To be supplied by amendment. Proceeds
—For expansion program.
Underwriters—Kuhn, Loeb
& Go. ; Harriman Ripley .& Co., Inc., and The First Boston Corp., all of New York,
"n ' ;v';

Corp.

April 17 filed 449,704 shares of common stock (par $5)
being offered for subscription by common stockholders

Price—$22

issued

ceeds—To

by common stockholders of record June 2, 1959; rights
to expire on June 18.
Price—To be supplied by amend¬
ment. Proceeds—To pay short-term bank loans, and to
augment working capital.
Office — 515 Newman St.,
Mansfield, Ohio. Underwriter — A. G. Becker & Co.,

Marine

certain

and to

May 7 filed $5,100,000 of convertible subordinated de¬
bentures, due June 1. 1974, to be offered for subscription

•

-4*

;•

April 6 filed 1,014,300 shares of common stock, to be offered in exchange for all but not less than 98% of the

on

W.

'///y' /-'••■■/,y
150,000 shares of com- -

dress—P.

April 28,
1959;
rights to expire on
May
oversubscription privilege). Price—$6 per
share. Proceeds—To increase capital and surplus. Office
—83 Exchange Street, Portland, Maine.
Underwriter—
P.

Exploration, Ltd.

(letter of notification)

stock.;. Price—At par ($2 per share).
Proceeds—
equipment, inventory and working capital. Ad- y
O. Box 1658, Lakeland, Fla.
Underwriter— /
F. Campeau Co., Inc., Detroit, Mich. •
,

For

-

Fidelity Life Insurance Co.
March 30 filed 100,000 shares of capital stock (par $1.50)
being offered for subscription by holders of outstanding
stock at the rate of one new share for each two shares
(with

— Torpie
&
///>'://•■//■■"'••/./'C '/y

.

National Citrus Corp.

April 20

Maine

19

Thursday. May 14. 1959

mon

Calif.

held

.

.

Westbury, Long Island, N. Y. Underwriter

(5/18-19)

Magma Power Co.

.

Corp.

,

■

;
>

Nationwide Small Business^ Capital Investing
Corp. ;
• /■
:yyy-/v
April 24'ifiled 500,000. shares of capital stock (par 50 ■
cents). Price ^r- $1 per share. Proceeds — For working
capital and investments.
Office—Hartsdale, N, Y.
Un- v
.

25

shares

for

each

$500 of debentures), together with
$100,000 shares of class A common stock (par $1). Price
—For debentures with warrants, at 100% of principal
amount; lor common stock, to be supplied by amend¬
ment.
Proceeds—To acquire in excess of 80%
of the
outstanding stock of American Houses, Inc.; for land
acquisition and development for home erection; to re¬
pay notes to banks and suppliers; and for working capi¬
tal. Underwriters
Ira Haupt & Co., New York; and
Straus, Blosser & McDowell, Chicago, 111.
—

•

Krupp Manufacturing Co. (5/18-22)
April 3 (letter of notification) 100,000 shares of common
stock (par 10 cents). Price—$1.25 per share. Proceeds—
To selling stockholders.
Office — 4th & Mill Streets,
Quakertown, Pa. Underwriters—Hallowell, Sulzberger,
Jenks, Kirkland & Co. and Woodcock, Hess, Moyer &
Co., Inc., both of Philadelphia, Pa.
Laure Exploration

Co., Inc., Arnett, Okla.

Dec. 23 filed 400,000 shares of common stock.

Price—$2
per share. Proceeds—For machinery and equipment and
exploration purposes. Underwriter—None.
Lefcourt Realty Corp.
Jan. 29 filed 3,492,000 shares of common stock, of which

2,622,000

shares

issued

in

exchange for all oi
Inc., and D. G
R., Inc.; 750,000 shares will be used for the exercise
of an option by the company to purchase from
Big
Mound Trail Corp. some 3,784.9 acres of land on ot
before June 15, 1959; and the remaining 120,000 shares
the common

were

stock of Desser & Garfield,

Sc

were sold for the account of a
selling stockholder during
April, 1959. Underwriter—None.

• Levine's, Inc.,
Dallas, Texas (5/20)
April 24 filed 110,000 shares of common stock (par $4),
of which 60,000 shares will be sold for the
company's
account and 50,000 shares for the account of certain sell¬
ing stockholders, Price—To be supplied by amendment.

Proceeds—To be added to the general »funds of the com¬
pany and will be spent for inventory, equipment, fixhires and other initial costs of three new
stores, and
the balance of the proceeds will be used to
acquire and
establish new stores. Underwriter—Kidder, Peabodv &

Co., New York.
Lorain Telephone Co.
Feb. 11 (letter of notification) 1,562 shares of common
stock (no par) to be offered for subscription by stock¬
holders at the rate of one new share for
•

approximately

each

75.1729 shares held at the close of business on
March 17, 1959; rights to expire on May
15, 1959. Price
—$32 per share. Proceeds—To reimburse the treasury.
Office—203 W. Ninth St., Lorain, Ohio. Underwriter—
None. -

LuHoc Mining Corp.
Sept. 29 filed 350,000 shares of common stock. Price—$]
per share.. Proceeds — For the acquisition of properties
under option and for various geological
expenses, test
drilling, purchase of equipment, and other similar pur¬
poses.

Offices—Wilmington, Del., and Emporium, Pa

Underwriter—None.
•

Lytle Corp. (5/18-19)
April 16 filed 100,000 shares of common stock. Price—
At a maximum price of $14 per share. Proceeds—To re¬
tire bank loans and for general
working capital. Under¬
writers—Joseph Walker & Sons, New York; and Clark,
Landstreet & Kirkpatrick, Inc.,
Nashville, Tenn.

it M. & S. Oils Ltd.
May 11 filed 390,000 shares of capital stock. Price—60
cents per share.
Proceeds —For exploration, develop¬
ment and acquisitions.

toon, Saskatchewan,
<

Office—5 Cobbold Block, Saska¬
Canada.
Underwriter — Cumber-

land Securities Ltd., Regina,
Saskatchewan, Canada.

it Magic Circle Theatre,

Inc.
May 7 (letter of notification) 6,000 shares of common
stock. Price—At par ($1 per share). Proceeds—To build
a theatre or auditorium.
Office—221 Broadway, Denver

3, Colo. Underwriter—None.




Eastman

Dillon, Union Securities & Co., both of New
York; Schoellkopf, Hutton & Pomeroy, Inc., Buffalo.
N. Y., and Granbery, Marache & Co., New York.

Mary Carter Paint Co.
30 (letter of notification) 37,500 shares of com¬
mon stock
(par $1) of which 25,000 shares are being
offered by the company, out of authorized but unissued
stock, and 12,500 shares are being offered by John F.
Crosby, Spring Lake, N. J. Price—$8 pep share. Proceeds
—For payment of outstanding loans and working capi¬
tal, and to selling stockholder. Office—Gunn Highway
at Henderson Rd., Tampa 7, Fla.
Underwriter—W. W.
Schroeder & Co., New York 5, N. Y.

derwriter—None,

March

•

,

of

bank

loans.

Office—7575

N.

W.

37th

Nedow Oil Tool.Co.

To be designated.

Avenue

•

(letter

6

of

which, 100,000 shares are to be offered for account of
and 2(),000 shares for certain selling stock- J,
holders; the remaining 6,000 shares are to be offered by *
the company to its employees. 'Price—To be supplied by
amendment. Proceeds—To pay off in full a 5% chattel '
mortgage term loan; to construct an addition to its main
plant;-and the balance, together with other corporate
funds will be'used to purchase machinery and equipment
for new plant additions, and for general corporate pur¬
poses. Offiee—Peterborough, N. H.
Underwriter—Kid¬
der, Peabody & Co. Inc., Boston, Mass.
company

.

fBNew York
March

Underwriter—None.

at the rate

shares'of

class

A

Corp.

vVP/fV

83;334 shares of common stock, to be
exchqhge for common stock of Biggins, Inc.,:
of ohe share of New York Shipbuilding com¬

for each: 24 'shares of

mon

7,000

Shipbuiidirig

29 filed

offered in

Inc.

notification)

~

New

of

an

Millsap Oil & Gas Co.
Dec, 23 filed 602,786 shares of common stock." Price—$1
per share. Proceeds — For additional working capital.

May

,;/yy>

Hampshire Ball Bearings, Inc. (5/25-29)
; :
April 27 filed 126,000 shares of common stock (par $2) *

undetermined num¬
ber of shares of common stock (par $10) to be offered
by the trustee under the Employee's Thrift Plan and
related trust agreement where the company contributes
one-half and the particular employee pays one-half of
the sums paid to trustee for investment. Price—At the
market on the New York Stock Exchange.
Proceeds—
For benefit of employees. Office—1700 Broadway, Den¬
ver
2, Colo. Underwriter—None.

it Minit Markets,

///v//'?/

/r

May 5 (letter of notification) 150,000 shares of common 1
stock (par do/cents). Price—$2 per share. Proceeds—To
acquire fishing/tools for leasing; and for working capital. /
Address—P. O. Box 672, Odessa, Texas. Underwriters—

York; and Roman & Johnson, Fort Lauderdale, Fla.

Office—Siloam Springs, Ark.

cumu¬

votiiig and non-assessable common stock. Price— '
($l"p.er share). Proceeds—For organizational ex- '

writer—Waldron & Co., San Francisco 4, Calif.

Underwriters—Aetna Securities Corp., New

it Midwest Oil Corp.
April 29 (letter of notification)

lative

penses and fif'st three months' operational expenses. Of- /
fice—1250 Wilshire Blvd., Los Angeles 17, Calif. Under- r

Extruders, Inc. (6/1-5)
April 17 filed 175,000 shares of common stock. Price—$3
per share.
Proceeds—To be used for the purchase of
equipment, for increased inventories, and for the retire¬
Miami, Fla.

*

At par

Miami

ment

?

v

Naylor Engineering & Research Corp.
Sept. 29 (ligttSr of "notification) 300,000 shares of

Statement

Higgins common,

'■'effective April 16/".

•

•

stock

(no par). Price—$10 per
share.-Proceeds—To'|North American Acceptance Corp
acquire leaseholds and for erection of store facilities. J
April 29 (Idtfcr dt noiMeation) $300,000 of 6% 10-year'
Business—To establish and operate a chain of drive-in, ,
subordinqted debentures "to' he offered for subscription :
bamtam supermarkets in the Northern New Jersey area.
^
mao.
f=nn
—^
Office—24 Salem St., Hackensack, N. J. Underwriter
None.

Missouri Utilities Co.

.•

—

April 14 (letter of notification) 10,154 shares .of common
stock (par $1) to be offered for subscription by stock-?'
holders

on

held

or

the

basis

of

one

share

for

each

31

Office—400 Broadway, Cape Girardeau, Mo. Un¬
derwriter—Edward D. Jones & Co., St. Louis, Mo.

/
Defense Minerals,

Inc.,

IV;

..

..

Keystone,

~
"
Dak

(letter of no.tif iqation) 300,000 shares 'of. common .J

(par lO cehts). Price—$1 per share. Proceeds—;
Fw exploring and recovering strategic metals and pro-|

|

•

Mohawk Rubber Co., Akron, Ohio (6/3)
j
May 4 filed 15,000 shares of common stock (par $1). Price
—To be supplied by amendment. Proceeds—For working '
0_

4*

stock

pany.

capital and purchase of equipment.
/Inr
DAnK^/1*,
P
der, Peabody & Co., New York.

S

-

May

UnderwriterUi
.

Np*e. /* : "
^ Northwest

shares f

about April 29. Price — To be supplied by
amendment. Proceeds—For general funds of the com¬
on

.795 Peach tree' Street, N.' E.;) Atlanta, Ga.

Underwriter—Kid-;

ducing

.

—

Caldwell

Co.,

99

Wall/

/'VV.]

■

Nuclear Electronics Corp. 1(6/1-5)
April 29 filed 200,000 shares of common stock (par one;
cent). Price—$3.75 per share. Proceeds—To be applied
''
*
"_i..
A

ai

to

^

Underwriter

same.

%eet, N^w York;N: Y.

U'

■

i

•

.1

#%

1X71

the

—

payment of an indebtedness owed to Wheatonfor payment of bank debt; for research, de-»
velopment, production and marketing; for sales pro-motion; and the balance for general working capital..
Office—2925' N. Broad Street, Philadelphia. Pa; Under- *
writer—Charles Plohn & Co., New York.

Mortgage Corp. of America
f
April 10 filed $1,000,000 of 4%% collateral trust notes,
due May 1, 1969-79.
Price—100% of principal amount./
Proceeds—For repayment of loan.
Office—100 St. Paul}
Street, Baltimore, Md. Underwriter—None.

Glass Co.;

Multi-Amp Electronic Corp. (5/25-29)
May 1 (letter of notification) 99,5Q0 shares of common }
stock (par 10 cents).
Price—$3 per share.
Proceeds— ;
To I purchase building; for research, development, equip¬

Oak Ridge, Inc. .
Sept. 4 (letter of notification) 100,000 shares of common
stock (par $1). Price -r $3 per share. Proceeds — For
working capital.
Office—11 Flamingo Plaza, Hialeah,
Fla.
Underwriter — Henry & Associates, Inc., 11 Fla¬
mingo Plaza. Hialeah, Fia-

ment

and

machinery,

etc.;

and

for

working

capital.

Business—Portable and laboratory instruments for test¬

ing etc.

Office—465 Lehigh Avenue, Union, N. J. Un¬
& Co., Inc., 52 Broadway,

derwriter—g; Everett Parks
New
•

York, N. Y.

Narda Utasonics

Office

Buildings of America,

Inc.

April 6 filed 91,809 shares of class A stock (par

$1) and

10,201 shares of class B common stock (par $1) to be
offered in units of nine class A shares and one class B

Corp. (6/1-5)
April 29 filed 20,000 shares of common stock (par 10
share. Price—$100 per unit.
Proceeds—To be available
cents). Price—To be supplied by amendment. Proceeds— ; for investmeiiit in real, estate syndicates and other real
To retire a $100,000 outstanding bankToan and the bal- F estate.
Officcf—9 Clinton St., Newark. N. J. Underwriter
ance will be used for
general corporate purposes. Office—
—None.

Number 5846

Volume 189

...

The Commercial ahd Financial Chronicle

A Philadelphia Electric Co.

Oil, Gas & Minerals, Inc.
April 2; filed 260,000, shares ;ot common stock, (par 35
cents. Price-—$2 pet share/: Proceeds—To; Retire bank
loans and for investment purposes. V OlficeiT-^Sia; ijiternatioiiaT Trade Mart, New Orleans,: La. (rttederwriter —
Assets Investment Co.; inb^'New Orleans;
O.

.

K.

Dec.

15

Rubber Welders,

shares^ of common stock (no par)
subscription by common stockholders
of record June 2, 1959, on the basis of one new share
for each 20 shares then
held; rights will expire on June
23.
Price—To be supplied by amendment.
Proceeds—

to be offered for

To

repay bank
loans and for construction program.
Underwriters—Drexel& Co. and Morgan Stanley &

Inc. >.

6*0,600 shares of common stock, $43,333.3}
3V4% debentures maturing on or before May-6, 1965

of

Co., both of New York.
'

Philippine Oil Development Co., Inc.
April 10 filed 221,883,614 shares of capital stock, to be
subscription by holders of outstanding stock

$692,000 of 6% debentures maturing on or ^before Dec
31, 1974r and $123,000.01 7% debentures due oh or before
May 6, 1965 The company proposes to make a public
offering of 25,000 shares; of common stock at $10 pei
share.
The remaining shares and the debentures art
subject to an exchange offer between this,«orporatiot

offered for

at the rate of one new share for each two

Price.—To

K. Rubber, Iiic.^ and OJ Ki Ko-op Rubber, Welding
System, on an alternative basis. Pjroceeds^Qf the public
offering^ will be used for additional '.forking capita)
and/or to service part of the company's debt. Office—
Ridk

None.

Grande; Ave.. Littleton. Colo.
effective

Statement

.

.

Ozark Air

fered in exchange for common stock of Kennedy's, Inc.,
in the ratio of \xk shares of Phillips-Van Heusen stock

for

..

Oppenheimer Fund, lnc.
Jbec. 5 filed 100,000 shares Of capitdl stock. * Price—A
market
(about $10 per share); Proceeds—For invest
ment< Office—25 Broad St., New York.
Underwriter—
Oppenheimer & Co.,. New York.
.•

Phillips-Van Heusen Corp.
April 21 filed 69,210 shares of common stock, to be of¬

Underwriter—

April 13.,

Lines,lnc.

share of general common stock for

one

each 20 shares of cl. A and cl. B common stock held.

Price

Roanoke

-—$4.25 per-share to stockholders: $4.75 to public. Proceeds

•

Newharcf;> Cook and Co.
-Yates; Heitnes^ <&• Woods,
both of St. Louis, Mo:, offered to purchase the unsub¬
Statement—Full registration

expected of 132,944 shares- of general common stock.
Packard-Bell Electronics Corp.*

cents)'

tfr£ account
of the company and 20,000 shares fofth Selling stock-:
holder.'Price—To be supplied by am^hihiietffc
Proceeds'
t-To construct and equip a new plant ih NeWbury Park,
Calif: to reduce short ^tetth bank indebtedness'; and for
working Capital. Underwriter—White, Weld' & 'Co., New
York.";.
.

Paddock of California

Marchv,3$ filed ; jfc f,84'*j hutstapdipg • shared of ^common
stock

(.par $1) being offered "only to stockholders and
directors of The Refinitfe COrp. and will pot be offered

public." Price-$3 pershare/Prpceeds—
To selling Stockholders, The Refinite Corp. Office—8400
Santa Monica Boulevard, Los AngeleS, Calif. Chderwrit¬
the general

er—None.

Pioneer Plastics

-

Polarad Electronics Corp.

(5/25-29)
May 1 filed 100,000 shares df common stock (par $1).
Price—To be supplied by amendment. Proceeds — For
working capital and other corporate purposes.,,pffice—
43-20 34th Street, Long Island City, N. Y. Underwriter—
Kidder, Peabody & Co.; New York.
Poly Industries, Inc. (6/1-5)
May 4 filed 200,000 shares of common stock (par $1),
of which 100,000 shares are to be offered for the account
of the company and; 100,000 shares for certain selling
stockholders.
Price—To be supplied by amendment.
Proceeds—For working capital and to reduce bank bor¬

Fund, Inc... - v.—
Jan. 2 filed. 300,000 shares of capital stock. Price—Mini*
mum purchase of shares is $2,500.
Proceeds—For invest¬
ment. Office—404 North Roxbury Drive;-Bdverly Hilli
Calif.
Underwriter—Paramount Mutual 'Fund Manage¬
ment Co. Statement effective April 14.

rowings.
Calif.

A Pearce-Uible Co.
May 11 filed 555,000 shares of common stock, of which
500,000 shares are to be offered publicly; ;and the re¬
maining 55,000 shares are subject to sale'/under Stock
Purchase Options granted to employees of (he company.
Price—$3.50 per share to public. Proceeds—For acquisi¬
tion and development of land and construction of houses
for sale.
Office—3850 Beach Boulevard, Jacksonville;
Business—Construction

Fla.

sale to home

son, Wulbern,
firms.
,

owners.

of single-family • dwellings
Underwriter—Pierce, Garri¬
,

Jacksonville, Fla.," and four other

Inc.,

.

«*.

_

Peckman Plan Fund, Inc., Pasadena,

May 19 filed 20,000 shares of common
Price—At

market.

Proceeds—For

:

*

Calif.

stock (par $1)

investment.

writer—Investors Investments Corp.,

Under¬

Pasadena, Calif.

Pennsylvania Power Co.
Aug. 1 filed $8,000,000 of first mortgage bonds due 1989.
Proceeds—To redeem a like amount of. 5 % ^ fijest mort¬

bonds due 1967.: Underwriter—To be determined
by competitive bidding. Probable bidders: Halsey, Stuart
& Co. Inc.; Kidder, Peabody & Co.; White Weld & Co.
Equitable Securities Corp., and Shields & Co. (jointly)
r Lehman
Brothers, Eastman Dillon, Unioi^ Securities d
gage

Co., Salomon Bros*. & Hutzler and Ladettburg, Thalmanr
& Co. (jointly); Merrill Lynch, Pierce; Fbnner' & Smitt
Co.

Dean Witter &

had been expected

..(jointly),-r~Bids.

—

to be received up to il

Tentatively

'km. (EDTV

Aug. 27 but company on Aug. 22 decided to def**
sale pending improvement in market conditions.
SEC
on Feb. 25, 1959 extended to June 16, 1959 period within

Office

which

company

may

consummate financing.

•

Potomac

.

Underwriter—None.

•

'•*

\*-f

'/

.'7

A'

Montague Street, Pacoima,
Alstyne, Noel & Co., New

Electric

Power Co.

each five shares held; subscription rights to expire on
May 27.
Unsubscribed shares will be offered first to
employees. Price — $25 per share. Proceeds — To pay
$6,425,000 of outstanding bank loan notes, representing
borrowing for working capital and other corporate pur¬
poses; to reimburse the company's treasury for a por¬
tion of the construction expenditures heretofore made,

provide for a portion of its construction program.
Underwriters—Dillon, Read & Co., Inc., New York; and
Johnston, Lemon & Co., Washington, D. C.
and to

Precon

Electronics Corp.

(6/1-5)

April 6 filed 175,000 shares of common stock (par 75
cents). Price — $5 per share. Proceeds — For working
capital; to reimburse the predecessor for certain devel¬
opment expenses; for inventories and work in process;
and other general corporate purposes.
Office—120 E.
41st St., New York, N. Y. Underwriters—Charles Plohn
& Co. and Netherlands Securities Co., Inc., both of New
York, N. y.
Pressed Metals of America,

Inc.

—

American

Stoek

Exchange. Proceeds—To selling stock¬

holders. Office—Port

Huron, Mich.

Underwriter—None.

Fire & Casualty Co., Mesa, Ariz.
filed 400,000 shares of common stock to

Producers

be
offered for subscription by holders of stock purchase
rights acquired in connection with life insurance policies
issued by Dependable Life Insurance Co. and to certain
agents and brokers of Producers Fire & Casualty Co.
Price—$5 per share.
Proceeds—For working capital.
31

Underwriter—None.

Prudential Enterprises, Inc.
Jan. 15 (letter

of notification) 200.000 shares of common

(par 10 cents) and 1,917 shares of class B common stock

(par one cent) of which 170,000 shares are to be
by the company and 30,000 shares by a selling
stockholder.
Price — $1.50 per share
Proceeds — Far

(par 10 cents). This coveys the transfer of certain shares
pursuant to option agreements. Price — At over-thecounter market prices. Underwriter—None. -

Office—1108
general expansion and working capital.
16th Street, N.W., Washington 6, D. C. UnderwriterJohn C. Kahn Co., Washington, D. C.

Permachem

Corp., New York

March 31 filed 2,041,331

shares of class A common stock




a

program.

portion of the
Underwriter—

To be determined by competitive bidding. Probable bid¬
ders: Halsey, Stuart & Co. Inc.; The First Boston Corp.;

,

Kuhn, Loeb & Co. and Lehman Brothers (jointly);
Morgan Stanley & Co. and Drexel & Co. (jointly). Bids
Tentatively expected to be received up to 11 a.m.
(EDT) on June 2, at 80 Park Place, Newark, N, J,
—

New York
shares of common stock (par five
Price—$3 per share. Proceeds—To repay loans
and for general corporate purposes.
Business—Manu-f
facturers and packager of proprietary drug items.
Un¬
derwriter
Richard Bruce & Co. Inc., 26 Broadway,
New York 4, N. Y. Offering—Expected end of May.
/
Purepac Corp.,

March 31 filed 260,000

cents).

—

Puritan Chemical Corp.

.

March 30 filed 500,000 shares of capital stock (par 10cents.
Price—$1.25 per share. Proceeds—For working

capital and general corporate purposes. Office—2 South
Broadway, Lawrence, Mass/ Underwriter—Dunne & Co.,New York.
Offering—Expected any day.
./ ... j
„

_

•

Pyrometer Co. of America, Inc.
April 27 filed 200,000 shares of common stock (par 50
cents). Price—$3 per share. Proceeds—For inventory,
expansion of present facilities; equipment, working cap¬
ital and other general corporate purposes. Office—-Pemu

del, Pa. Underwriter — Arnold Malkan & Co., Inc., 26
Broadway, New York. Offering—Expected in about three
weeks.

Raindor Gold Mines, Ltd.

(letter of notification) 290,000 shares of common *
(par $1). Price—$1 per share. Proceeds—To provo
and for road and camp construction. Office—At
Suite 322, 200 Bay St., Toronto, Ont., Canada, and c/o T.

stock
up

ore

Arnold, Wilson Circle, Rumson, N. J.
Co., New York, N. Y.

Underwater—.

Sano &

Rapid-American Corp., New York
April 13 filed $7,209,640 of convertible subordinated de¬
bentures due April 30, 1964, to be offered for subscrip¬
tion by common stockholders in the ratio of $100 of
debentures for each 10 common shares held. Price—To,
be

supplied by amendment.

Proceeds—To be applied in

part to the repurchase and retirement of the company's
5%% convertible subordinated debentures presently out¬

standing, in full, at par plus accrued interest to the
date of payment, and the balance for general corporate

Underwriter—None.

purposes.

Rassco Financial
June 26 filed

Corp.
$1,000,000 of 15-year 6% series A sinking
denomination!

fund debentures due 1973, to be offered in
of

$500 and $1,000.

Price—At

par.

Proceeds—For work¬

ing capital and general corporate purposes. Underwrite*
—Rassco Israel Corp., New York, on a "best effortif
basis.

Raytheon Manufacturing Co.
May 1 filed 350,602 shares of common stock (par $5) and
100,000 shares of 5^% series (cumulative), serial pre¬
ferred stock (par $50).
These shares were or may be
issued as a result of the merger, of Machlett Labora¬
tories, Inc., into Raytheon Co. (formerly Raytheon Man-f
ufacturing Co.).
;
Reeves Soundcraft Corp., Danbury, Conn.
April 30 filed 22,000 shares of common stock (par five
cents) to be sold to Lewis Cowan Merrill upon exercise
of option. Price—$3 per share. Proceeds—To Hazard E.
Reeves, the selling stockholder. Underwriter—None. No
public offering is planned.

Corp.
>7
of 6% convertible debentures
for subscription by .common
stockholders at the rate of $100 principal amount of
debentures for each 300 common shares held. PriceReiter-Foster Oil

March 30 filed $1,500,000
due

To

1969,

to

be

offered

supplied by amendment. .Proceeds—To pay debt
development of present properties and acquisi¬
additional oil and gas proper¬
Underwriter—Emanuel Deetjen & Co., New York.

be

and for

tion and development of

ties.
•

Reoti

Resistor Corp.

(5/25-29)

April 2 (letter of notification) 150,000 shares of common
stock (par one cent). Price—$2 per share. Proceeds—To
purchase new equipment; for payment of chattel mort¬
gage and1 loans and for general working capital. Office—
117 Stanley Ave., Yonkers, N. Y. Underwriter—Charles
Plohn &

Co., New York, N. Y.

j

Republic Foil Inc.
March

26

filed

70,196

4

4

shares of common stock, being
holders of outstanding shares

offered for subscription by

April 17 filed 90,000 outstanding shares of common stock.
Price
Related to the current market price on the

March

"/"'.Perfecting Service Co.4-fr
•
Feb. 26 (letter of notification)/28,250 shares of common
stock to be offered for subscription-by stockholders on
a pro rata basis.
Rights expire in 15 days. Price—At par
($10 per share). Proceeds—For accounts receivable*and
inventories.
Office—332 Atando Ave., Charlotte, N. C.

12177

April 23 filed 1,207,338 shares of common stock (par $10)
being offered for subscription by common stockholders
of record May 12, 1959, at the rate of one new share for

on

-

—

Underwriter—Van

York.

•

and

(5/20)

•

-

Paramount Mutual

for

Corp., Sanford, Me.

A Plastic Materials & Polymers, Inc. (6/19)
May 11 filed 143,750 shares of common stock. Price—To
be supplied by amendment. Proceeds—For construction
of a plant in Rhode Island and for general corporate
purposes.
Business — Primarily engaged in the com¬
pounding and coloring of thermoplastic raw materials,
and the sale of the resultant product. Office—Hicksville,
Long Island, N. Y. Underwriter—Filor, Bullard & Smyth,
New York City.
•

'

to

cost of its current construction

Underwriter—

New York.

(5/27) '

May 4: fHedl26y00d sh^i^sM'^pital^stock1of whichlOO.GOO shares are to'be Offered for

Minn.

April 15 filed 150,000 shares of Common stock (par $1)
(of which &,000 shares are to be offered to employees).
Price—To be supplied by amendment/ Proceeds — To
selling stockholders. Business — Producer of decorative
laminated plastics. Underwriter—Reynolds & Co., Inc.,

bert^^eldy;^Sti Louis 21:)i;Mq:&Underwri&rS^on^

;

Minneapolis,

porate purposes, including payments of

Jan. 28

purchase additional-flight .-and ground-equipment
and-for working capital. Address—P.O.Box/6007, Lam-

shares. To Amend

Building,

★ Public Service Electric & Gas Co. (6/2)
May 7 filed $50,000,000 of first and refunding mortgage
Proceeds — To be added to the
general funds of the company and used for general cor¬

bonds due June 1, 1989.

None.

—To

scribed

'

• Pik-Quik, Inc.
May 8 (letter of notification) 131,625 shares of common
stock (par $1).
Price—$1.25 per share. Proceeds—For
equipment, property and working capital.
Office—620

by holders of class A and class B common stock
B common stock evidenced by a voting
certificate,

share of Kennedy's stock.

Underwriter—None..

and/or class
trust

one

•k Piedmont Aviation, Inc.
May 6 (letter of notification) 72/700 shares of common
Stock (par $1) to be offered to stockholders at the rate
of 1/16 of a share for each share held as of May 4, 1959.
Price—$3.75 per share. Proceeds—For working capital.
Address—Smith Reynolds Airport, Winston-Salem, N. C.

.

March 2& (letter of notification) 59,825 sKafeS - of gen¬
eral common stock (par $1)to be offerdd 'fbi:?subscrip¬
tion

shares held.

be

supplied by amendment: Proceeds—For
working capital. Office—Soriano Building, Plaza Cer¬
vantes, Manila (P. I.). Underwriter—None.

O.

551

/

(6/3)

May- 7 'filed 640,806

filed

43

(2231)

stock
sold

the basis of one new share for each three shares
or about April 28, 1959; rights to expire on or
May 13. Price—$12.50 per share. Proceeds—For
property and equipment, to retire bank loans, and for
working capital.
Office — 55 Triangle St., Danbury,
Conn.
Underwriter—Laird & Co., Corp., Wilmington,

upon

held

on

about

Del.

,

,

America, Inc.
Feb. 24 filed 200,000 shares of capital stock. Price—At
market. Proceeds—For investment
Office—Englewood,
N. J. Underwriter—First Mutual Securities of America,
Research Investing Fund of

Inc.

.

Alberta, Canada
June 26 filed 1,998,716 shares of common stock (par $1).
Of this stock, 1,174,716 shares are to be sold on behalf ol
the company and 824,000 shares for the account of cer¬
tain selling stockholders. The company proposes to offet
the 1,174,716 shares for subscription by its shareholders
at the rate of one new share for each three shares held
Richwell

Petroleum

Ltd.,

Continued

on

page

44

Trie Commercial and Financial

Chronicle

Thursday, May 14, 1959

.

(2232)

44

Underwriter—To be determined by

43

'Continued from page

and the balance

Underwriter

—

to 11 a.m. (EOT) on May 28 at the
Services, Inc., 250 Park Avenue, New
up

if any will be added to workin,
P a c i f i c Securities Ltd., Van¬

Roanoke Gas Co.

shares of com¬
mon
subscription by
common stockholders on the basis of one share for each
seven shares held as of record April 6 (with an oversubrcrintion privilege); rights to expire on May 15, 1959.
Brice—$16.75 per share. Proceeds—To repay short-term
bank loan and for installation and construction of addi¬
tional mains for the purpose of extending distribution
facilities. Office — 123 Church Avenue, Roanoke, Va.
(letter of notification) 17,732
stock (par $5) being offered for
19

March

A Spiegel, Inc.

stockholders of record on or about June 3,
1959, on the basis of $100 principal amount of debentures
for each 12 shares held. Price—To be supplied by amend¬
ment. Proceeds—To be added to the general funds of the
by

in Partnership
Price—$10,000
Proceeds—For general corporate purposes.
East 42nd Street, New York.
Underwriter

unit.

per

Office—60

$5,580,000 of Participations

sale in units.

shares of common stock.

Arenas (Delaware) Inc.
$2,000,000 of 6% 10-year convertible de¬
bentures (subordinated), due Jan. 1, 1969. Price—To be
Supplied by amendment. Proceeds—$750,000 to pay AMF
Pinspotters, Inc. for bowling alley beds; $350,000 to pay
tor other installations, fixtures and equipment; $85,000
to
expand two present establishments by increasing
the number of alley beds by eight at Yorktown Heights
•nd by six at Wilton Manor Lanes, Fort Lauderdale;
1300,000 for deposits on leaseholds, telephones and util¬
ities; and $395,000 for working capital. UnderwriterSports

Price—$1

Nov.

share.
Proceeds — For investmemts and .working
capital. Business — Real estate investments.
Office —
Alexandria, Va. Underwriter—None.

Kensington, Conn.

April 17 (letter of notification) 11,538 shares of common
stock (par $12.50) being offered for subscription by

for each
1959; rights to ex¬

stockholders at rate of one new share

shares held of record April 24,

C3/t

pire on May 19. Price—$23.50 per share.
Working capital. Underwriters—Cooley

Co., both of Hartford, Conn, and
Britain, Conn.

&

Proceeds—Fdr

& Co., Putnam
Eddy & Co., New
-

Skyforest, Calif.
March 27 filed $800,000 of 6% convertible subordinated
Sinking fund debentures due 1974. Price—At 100% of
principal amount. Proceeds — For completion of East
Dundee Village (a new amusement park near Chicago);
i\nd for working capital and other corporate purposes;
Underwriter—None.
Life Insurance Co.

Schjeldahl (G. T.) Co.
filed

23

42,500

shares of common stock, which
present stockholders
share for each eight shares held

to be offered and sold first to

ct the rate of one new

April 1, 195,9. Price-—$10 per share. Proceeds—For
increased plant facilities, for purchase of equipment,
working capital and other corporate purposes. Office—
202 South Division St., Northfield, Minn. Underwriter
—Craig-Hallum, Inc., Minneapolis, Minn.
on

A Securities

Fund, Inc.
May 7 filed (by amendment) an additional 350,000
Chares of common capital stock. Price—At market. Pro¬
ceeds

—

known

For

investment.

Changed

Name

Templeton & Liddill Fund, Inc.

as

—•

Formerly

Office—En-

£lewood, N. J.
Servonics, Inc.
(letter of notification) 133,000 shares of com-tnon stock (par $1). Price—$1.50 per share. Proceeds—
For general corporate purposes.
Office—822 N. Henry
St., Alexandria, Va. Agent—Kidder, Peabody & Co., New
March 25

York.

Proceeds—For investment. Office

Fund

Corp.

Management
Ghares in America, Inc.
Sheridan-Belmont

Hotel

—

Price—At
1033-30th

Former

Name—

Co.

Aug. 19 (letter of notification) $250,000 of 6% convertible
debentures due Sept. 15, 1963 to be offered for subscrip¬
tion by common stockholders on a pro rata basis. Price—
At par. Proceeds—For working capital. Office — 3173
tNTorth Sheridan Rd., Chicago 14, 111. Underwriter—None.

"Ar Shoreham Motor Hotel, Inc., Hartford, Conn.
May 11 (letter of notification) 25,000 shares of common
stock (par $1). Price—$12 per share. Proceeds—For ex¬
of construction and operation of luxury motels.
Underwriter—Charles E. Thenebe & Associates, Hart¬

penses

ford, Conn.
Silver

None.
•

Standard Electric Co.,

Creek
filed

10

Central Ave. and Mechanic St.,
derwriter— Maltz, Greenwald &

Silver Creek, N. Y. Un¬
Co., New York.

Sip'n Snack Shoppes, Inc., Philadelphia, Pa.
200,000 shares of common stock. Price—
$2 per share. Proceeds—To pay loans and for new equip¬
ment. Underwriter—Sano &
Co., New York.
March 31 filed

Southern Electric Generating Co. (5/28)
April 17 filed $25,000,000 of first mortgage bonds due
1992.

Proceeds—To be used in connection with financ¬

ing the cost of constructing
station

cilities;

on

Inc.

(letter of notification) 10,000 shares of com¬
(par $25). Price—$27.50 per share. Proceeds
purchase equipment, erect and equip a semi-fire¬
proof building and for working capital.
Office —3016
Austin Highway, San Antonio, Texas.
Underwriter—■
Bache & Co., San Antonio, Texas.

March 31

stock

A Stanley Works
April 28 (letter of notification) an undetermined number
of shares of common stock (par $25) to be offered, to
employees of the company and subsidiaries other than
directors, through payroll deductions.
Price—At the
higher of average bid price during the month of April,
195.9 or the highest bid price April 24, 1959. Proceeds—
For working capital.
Office —195 Lake Street, New

Underwriter—None.

Britain, Conn.

Sterling Television Co., Inc.
March 31 (letter of notification) 200,000 shares of Class
A stock (par 25 cents). Price—$1 per share.
Proceeds—
For general corporate purposes, and to acquire television
film series for distribution. Office—6 East 39th St., New
York 16, N. Y. Underwriter—R.
New York 5, N. Y.

A. Holman & Co., Inc.,

Super-Sol Ltd.

shares of common stock. Price—
pounds—equivalent to $11 per
S..funds), payable up to 90% in State of
Israel Independence Issue and Development Issue Bonds,
and the balance in cash. Proceeds—For expansion pro¬
March 25 filed 250,000
At par (19,800 Israeli

•hare

in

U.

Office

—

79

Ben Yehuda St., Tel Aviv, Israel.

York, N. Y.

Telecomputing Corp.
(5/20)
April 29 filed 500,000 shares of common stock (par $1),
of which 250,000 shares are to be offered for the account
of the company and 250,000 shares for selling stockhold¬
ers.
Price—To be supplied by amendment.
Proceeds—
To be applied against the company's short-term bank
loans incurred to finance the performance of the com¬
pany's contracts. Office—915 North Citrus Avenue, Los
Angeles, Calif.
Underwriter—Blyth & Co., Inc., Los
Angeles, Calif.
.

.

A Telectro Industries Corp. (6/1-5)
May 6 filed 200,000 shares of common stock (par 10
cents). Price—$3 per share. Proceeds—For additional
machinery and equipment; to retire outstanding balances
of

a

V-loan to

a

bank and

to

a

a

steam-electric generating

the Coosa River in Alabama and related

and for the

repayment

of $4,000,000

fa¬

of shortterm bank loans incurred for such capital expenditures.

commercial credit

com¬

and the balance will be added to working capital
and used for general corporate purposes.
Office—35-16
37th St., Long Island City, N. Y.
Underwriter—Milton
D. Blauner & Co., Inc., New York.




A Teleflex Ltd. (6/1-5)
May 6 filed 75,000 shares

of common stock (no par),
of which 50,000 shares are to be sold for the account of
the company and 25,000 shares for Teleflex Products
Ltd. Price—To be supplied by amendment. Proceeds—For additional equipment and working capital. Office—
461 King St., W., Toronto, Canada. Underwriter—Drexel
& Co., New York.
Ten Keys, Inc., Providence, R. I.
April 28 filed 973,000 shares of capital stock. Price—
$5.40 per share. Proceeds—For investment. Office—512
Hospital Trust Bldg., Providence, R. I.
Distributor—•
E. R. Davenport & Co., Providence, R. I.
•

Texfel Petroleum Corp.

(5/25-29)

March 19 filed 550,000 shares of common
Price—To be supplied by amendment.

repayment of the company's 5% notes held by an Amer¬
ican bank, and the balance will be added to its general
funds ana will be used in connection with its various
operations, and for general corporate purposes, includ¬
ing payment of purchase obligations on certain prop¬
erties, and for the purchase of warehouse inventories.
Office—Republic National Bank Bldg., Dallas, Texas.
Underwriters—Bache & Co. and Allen & Co., both of
New

York.

Thermoplastics Corp.
March 26 filed 468,500 shares of common stock.

At par ($1 per share). Proceeds—For

stock (par $1).
Proceeds—For

Price—
purchase of neces¬

capital equipment and to increase working capital.
Office—1626 Hertford Rd., Charlotte, N. C. Underwriter
—Interstate Securities Corp., Charlotte, N. C.
sary

Transcon

Petroleum &

Development Corp.,

Mangum, Okla.
March 20 (letter of notification) 300,000 shares of com-'
mon
stock.
Price—At par ($1 per snare).
Proceeds—
For

development of oil properties.

Investment

Underwriter—First
Planning Co., Washington, D. C.

Trinity Small Business Investment Co.
April 17 filed 235,000 shares of capital stock (par $1).
Price
$10.75 per share.
Proceeds — For investment.
—

Main

Office—South

Street, Greenville,

S. C.

Under¬

writer—To be supplied by amendment.

A Tyce Engineering Corp.
May 6 (letter of notification) 100,000 shares of common
stock (no par).
Price — $3 per share. Proceeds —For
working capital.
Office — 809 G. Street, Chula Vista,'
Calif.
Underwriter—Pacific Coast Securities Co.," San

Francisco, Calif.
United Employees Insurance Co.
April 16 filed 2,000,000 shares of common stock (par $5)/
Price — $10 per share. Proceeds — For acquisition of
operating properties, real and/or personal,: including
office furniture, fixtures, equipment and office space, by
lease or purchase. Office — Wilmington* Del.
Under¬
writer—None.
Myrl L. McKee of Portland, - Ore.,1 li
President.
'/'//■

A United Gas Improvement Co. (6/16) V ;'1- .
May 12 filed $10,000,000- of first "mortgage bonds'due
1984.
Proceeds—To be used to reimburse, in part, the
treasury of the company for property additions and im¬

provements and to meet, in part, the cost of the con¬
tinuing construction program, including the retirement
of bank loans incurred in connection with such program.

competitive bidding.
& Co. Inc.; White, Weld

Underwriter—To be determined by
Probable bidders: Halsey, Stuart

Merrill Lynch, Pierce, Fenner & Smith and East¬
Dillon, Union Securities & Co. (jointly); The First
Corp.; Kuhn, Loeb & Co. and Blyth & Co., Inc.
(jointly); Kidder, Peabody & Co.; Drexel & Co. and
Eastman Dillon, Union Securities & Co. Bids—Expected
to be received on June 16.

& Co.;
man

Boston

A United Illuminating Co. of New Haven (5/27) v
May 7 filed 350,501 shares of common stock (no par) to
be offered for subscription by common stockholders on
the basis of one new share for each eight shares held
of

record

June 18.

pany;

Precision Corp.
1,550,000 shares of common stock (par
cents), of which 200,000 shares are to be offered for
the account of the company, and 1,350,000 shares for
account of selling stockholders.
Price—To be supplied
by amendment. Proceeds—For working capital. Office—

March 30

Inc.

Underwriter—American Israel Basic Economy Co., New

fcSt., N. W., Washington 7, D. C. Investment Advisor—In¬
vestment

(Delaware)

shares of common stock (par one
cent).. Price—At the market (but in no event less than
|6 per share). Proceeds—To selling stockholders. Office
—33 Great Neck Rd., Great Neck, N. Y. Underwriter—

gram.

Shares in American Industry, Inc.
Dec. 12 filed 50,000 shares of common stock.
iaiarket.

Arenas

Nov. 18 filed 461,950

—To

Gept. 26 (letter of notification) 3,567 shares of common
iltock (par $1). Price—$18.75 per share. Proceed*—Tc
go to a Selling stockholder. Office—400 W. Viekery Blvd.,
f?ort Worth, Tex. Underwriter—Kay St Co., Inc., Hous¬
ton, Tex.

ere

*/■;

Sports

mon

March

filed

18

None.
-

Santa's Village,

Service

its in¬
Underwriter—Wertheim &

be available principally to finance

Co., New York.

per

common

to

company

Routh Robbins Investment Corp.

Rowland Products, Inc.,

common

creasing accounts receivable.

—None.

Jan. 29 filed 475,000

(6/3)

May. 8 filed $15,417,500 of convertible subordinated de¬
bentures due June 1, 1984, to be offered for subscription

Roosevelt-Consolidated Building Associates
May 4 filed

stock (par $1).
Proceeds—For

general corporate purposes. Business—A major producer
and distributor of a diversified line of popular price,
basic style apparel for men, women and children. Office
—1 West 34th St., New York 1, N. Y.
Underwriters —
Shearson, Hammill & Co., New York; and J. C. Bradford
& Co., Nashville, Tenn.

^underwriter—None.

Interests, to be offered for

office of Southern
York 17, N. Y.

A Spartans Industries, Inc. (6/5)
May 12 filed 200,000 shares of common
Price—To be supplied by amendment.

Canada.

couver,

competitive bidding.

Stuart & Co. Inc.; Eastman
& Co.: Equitable Securities

Corp. and Drexel & Co. (jointly); Merrill Lynch, Pierce,
Fenner & Smith; Kidder, Peabody & Co. and White,
Weld 8c Co. (jointly).
Bids—Expected to be received

amendment

capital.

Halsey,

Securities

Union

Dillon,

(with an oversubscription privilege). The subscriptioi
period will be for 30 days following issuance of sub¬
scription rights. Price—To be supplied by
Proceeds—To pay off demand note, to pay other indebt¬

edness,

bidders:

Probable

in

May 26, 1959; rights to expire on or about
Price—$26.50 per share. Proceeds—To finance

1960-1961 construction program,
incurred
with this program. Underwriter—None.

part the company's

including the payment of current bank loans
in connection

United Improvement & Investment Corp. ; •
25 filed 1,238,994 shares of common stock

March

(par

$2.60), of which 809,195 shares are to be offered in
exchange for outstanding stock of Lawyers Mortgage &
Title Co. on the basis of one share of United for each
four shares of Lawyers before its recent one-for-ten
reserve

split,

or

212

shares of United for each share

of Lawyers after such split. Lawyers' stockholders may
out their allocation to the next full share by

round

purchasing not more than % of a share at $1.25 for each
share needed. In addition, a stockholder who accepts
United's offer will have privileges to subscribe to 242,299 additional shares at $5 per share, on a one-for-four
The company also proposes to offer 187,500 shares
exchange for all the outstanding common stocks of
Margate Homes, Inc., Broward Engineering Co., and
Margate Construction Co., certain outstanding debt ob¬
ligations of Margate Homes, Inc., and $62,500 in cash.
Proceeds—For working capital and general corporate

basis.
in

purposes.

Office—25 West 43rd St., New York, N. Y,
242,299 shares

Underwriter—Allen & Co., New York, for
of common stock.

& Chemical Corp.
708,750 outstanding shares of common stock.
Price—At market. Proceeds — To selling stockholder!.
United States Glass

Nov. 26 filed

Office—Tiffin, Ohio. Underwriter—None.

Inc.
4,500,000 shares of class A common stock
(par 50 cents).
Price—$2 per share. Proceeds—For
development and construction of a "Western Village"
and for construction of a Grand Estes Hotel and Con¬
United Tourist Enterprises,

Jan. 28 filed

the immediate vicinity
Larimer County, Colo.
Office
330 South 39th Street, Boulder, Colo. Under¬
writer—Mid-West Securities Corp., Littleton, Colo.
vention Hall, to be constructed in
of Estes Park Chalet, located in
—

Uranium Corp. of America,

Portland, Oro.

April 30,1957 filed 1,250,000 shares of common stock (par
16 cents).
Price—To be supplied by amendment (ex¬

pected to be $1 per share).
purposes.

Graham

Proceeds—For exploration

Underwriter—To be named by amendment.
Griswold of Portland, Ore., is Prei-

Albert

Went.

.

Utah Concrete Pipe Co.

April 27 (letter of notification) 41,300 shares of common
stock (par $1). Price—$7.25 per share. Proceeds—To be
used to reduce long-term debt; improvement and expan¬
sion of Ogden

plant and for addition to

working capital.

Volume 189

Number 5846

.

.

.

The Commercial and Financial Chronicle

Office—379-17th St.,
bacher & Co., San

Ogden, Utah. Underwriter—SchwaFrancisco, Calif.

Utah Minerals Co.

April 11

(letter of notification) 900,000 shares of com
Pfice—At par (10 cents per share). Proceed*
—For mining expenses. Office—305 Main
St., Park City

mon

stock.

Utah.

Underwriter—Walter

Sondrup

& Co.,

Salt Lak«

—$500 per unit.

Proceeds—For advances to Nautilus, a
subsidiary, for equipment and working capital; also for
working capital of parent and molds and dies for new
accessories. Business—To

design and sell marine prod¬
boating accessories. Office—441 Lexington Ave.,
New York, N. Y. Underwriter—B. Fennekohl &
Co., New
York, N. Y.
.
ucts and

City, Utah.
Inc.

May 6 (letter of notification) 300,000 shares of capital
stock. Price
At par ($1 per share). Proceeds — For
development of oil and gas lands. Office—574 Jefferson
Ave., Rochester 11, N. Y. Underwriter—Frank P. Hunt
& Co., Inc., Rochester, N. Y.
—

Utility Appliance Corp., Los Angeles, Calif.
April 9 (letter of notification) 50,000 shares of common
stock (par $1).
Price—$5.75 per share.
Proceeds—To
selling stockholders. Office—4351 South Alameda Street,
Los Angeles 58, Calif.
Underwriter — Dempsey-Tegeler
& Co., Los Angeles, Calif.
^'■.in¬
variable Annuity Life Insurance Co. of America
filed $4,000,000 of Variable Annuity Policies.
Price—No less than $120 a year for annual premium

April 21

and

Nov. 17 filed 1,449,307 shares of common stock. Of these
shares 1,199,307 are subject to partially completed sub¬

scriptions at $2, $3.33 and $4 per share; and the addi¬
tional 250,000 shares are to be offered initially to share¬
holders of record Nov. 1, 1958, in the ratio of one new
share for each 2.33 shares held

on that date.
Price—$4
share. Proceeds—-$300,000 will be used for payments
on contract to purchase shares of International
Fidelity
Insurance Co.; $325,000 for capitalization of a fire insur¬
ance company; $500,000 for capitalization of a title insur¬
ance company; $500,000 for additional capital contribu¬
tion to Great Plains Development Co.; and $300,000 as
an additional capital contribution to Great Plains Mort¬
gage Co. Office—319 E. "A" St., Casper, Wyo. Under¬

per

writer—None.

than

less

$1,500 for single premium
Proceeds—For investment, etc.
Office—1832
Street, N. W., Washington, D. C. Underwriter—None.
no

Virginia Electric & Power Co. (6/2)
April 28 filed 710,000 shares of common stock (par $8)
to be offered for subscription by common stocldiolders
the basis of

on

one

new

share for each 20 shares held of

record June

rights

2, 1950 (with an oversubscription privilege);
expire on or about June 18. Proceeds—For

to

construction

program.
Underwriter—To be determined
by
competitive
bidding.
Probable
bidders:
Merrill
Lynch, Pierce, Fenner & Smith, Inc.; Stone & Webster
Securities Corp. Bids—Expected to be received up to
11

a.m.

(FDT)

on

June

2

at

Room

238,

43

Exchange

Place, New York, N. Y.
it Vulcan Materials Co., Mountain Brook, Ala.
May 7 filed 252,526 Shares of common stock, of which
142,526 shares represent the balance of 250,000 shares
issuable upon the exercise of options granted kiey em¬
ployees under the company's Employees Stock Option
Plan. The remaining 110,000 shares are to be issued to
stockholders

of

Greystone

Granite

Quarries, Inc., and
Pioneer Quarries Co., both North Carolina corporations,
and to certain other parties in exchange for all the out¬
standing capital stock of Greystone and Pioneer and
certain real and personal properties operated under lease
by Pioneer.
Wade Drug

Corp., Shreveport, La.
April 28 filed 157,250 shares of class B common stock
to be sold privately to retail druggists through James D.

Wade, Jr., company's principal officer and stockholder,
who will receive a commission of $1.50 per share. Price
—$10 per share. Proceeds—To purchase additional ma¬
chinery and equipment; research and experimentation;

initial

for

panies.

contracts; and purchase of additional
Underwriter—None.
//v;v> ;:/v'-v;
■

com¬

^Wellington Electronics, Inc. (6/1-4)
May 6 filed 240,000 shares of common stock (par 75
cents.
Price—$6 per share.
Proceeds—For repayment
of a bank note; to complete the automation of the etched
foil production plant at Englewood, N. J.; for manu¬
facture ol' machines to be

leased to capacitor manufac¬

turers; and for working capital. Office — Englewood,
Underwriter—Charles Plohn & Co., New York.

N. J.

•West Penn Power Co. (5/25)
April 17 filed $14,000,000 of first mortgage bonds, series
R, due June 1, 1989. Proceeds—Together with other
funds, -will be applied to the company's construction pro¬
gram and repayment of bank loans incurred thereof.

Street, New York, N. Y.

Bank of

Commerce, Washington, D. C.

(5/29)
thebaic of
2,000 shares of capital stock (par $100) to holders of
record May 29, 1959, on the basis of one new share for
each three shares held; rights to expire on June 30.
Price—$150 per share.
Proceeds—To increase capital
and surplus.
Feb. 26 stockholders of the Bank approved

Bank of Montreal

May 1, it

announced Bank js ^offering,4o its stock¬
April 17, 1959 the right to subscribe
on or before July 10, 1959 for 675,000 additional shares
of capital stock on the basis of one new share for each,
eight shares held. Price—$32 per share, payable in 10
monthly installments from July 10, 1959 to April 8,
1960.
Subscription Agent—Royal Trust Co., Montreal,
holders

was

of

record

.

it Worcester Gas Light Co. (6/18)
May 8 filed $5,000,000 of first mortgage sinking fund
bonds, series C, due June 1, 1979. Proceeds—To be ap¬
plied to the cost of the company's construction program,
including $4,350,000 of advances for construction pur¬
poses by Worcester's parent, New England Gas & Elec¬
tric Association.
Underwriter—To
be
determined
by
competitive bidding. Probable bidders: Halsey, Stuart
& Co. Inc.; Blair & Co. Inc.; Kidder, Peabody & Co. and
White, Weld & Co. (jointly); Coffin & Burr, Inc. and
Estabrook & Co. (jointly).
Bids—To be received up to
11:30 a.m. (EDT) on June 18 at 10 Temple St., Cam¬
bridge, Mass.
it Worthington Products, Inc.
May 8 (letter of notification) $150,000 of 7% convertible
subordinated
shares of

debentures

common

stock

due May 15, 1964 and 15,000
(par 25 cents) to be offered in

units of $500 of debentures and 50 shares of stock. Price




Dec.

it

10

ta &

stock.

common

Co., Chicago, 111.

Underwriter—Cruttenden, PodesOffering—Expected towards the

announced that this company plans to
$5,000,000 of 30-year first mortgage bonds.

Proceeds—For

construction

Chesapeake & Ohio Ry. (5/14)
April 27 it was reported that the company plans to re¬
ceive bids on May 14 for the purchase from it of $2,400,000 of

equipment trust certificates due annually in 1-toyears. Probable bidders: Halsey, Stuart & Co. Inc.;

Bids—Expected to be

Dec. 1 it

Paso

March 4 it
vote

on

Natural Gas

Co.

announced stockholders will

was

increasing the

authorized

on

preferred

April 28
stock

to

1,000,000 shares from 472,229 shares, and the common
to 25,300,000 shares from 20,300,000 shares.
Pro¬
ceeds
For major expansion program. Underwriter —
White, Weld & Co., New York.
—>

it First National Life Insurance Co.
May 12 it was reported that the company plans early
registration of about 75,000 shares of common stock (par
$4). Proceeds—To increase capital and surplus. Under¬
writer—Blair & Co., Inc., New York.
Registration—
Expected in about two weeks.
San

Georgia Power Co.

(9/10)

announced that the company plans to issue

$18,000,000 of 30-year first mortgage bonds. Pro¬
construction program.
Underwriter—To be
by competitive bidding. Probable bidders
Halsey, Stuart & Co. Inc.; Blyth & Co., Inc., Kidder, Pea¬
body & Co. and Shields & Co. (jointly); Lehman Broth¬
ers; The First Boston Corp.; Morgan Stanley & Co.;
Equitable Securities Corp. and Eastman Dillon, Union
Securities & Co. (jointly); Harriman Ripley & Co. Inc.
Registration—Planned for Aug. 14. Bids—Expected to
be received on Sept. 10.

determined

/■/

May 4 it was reported that the company plans an offer¬
ing of additional common stock, part of which will be
sold for the account of selling stockholders and part for
the account of the company.

Proceeds — For working
Underwriters—Auchincloss, Parker & Redpath,
Washington, D. C.; and Kidder, Peabody & Co., New

capital.

'

Jersey Central Power & Light Co.
Feb.

10 it was announced that the

'

mortgage bonds. Proceeds — For capital expenditures.Underwriter—To be determined by competitive
bidding. •
Probable bidders:
Halsey, Stuart & Co.

Inc.; The First
Corp.; Glore, Forgan & Co.; Blyth & Co. Inc.
Bids—Tentatively planned to be received on June 23.
Registration—Expected at end of May.
-•

Boston

Northern
March 31 it

States

Power Co.

(Minn.)

reported that the company has revised

was

financing plans, and is considering the offering and:

$10,000,000 of

new preferred stock. Proceeds—To
to repay bank loans and for construction
pro-"
Underwriter—To be determined by competitive
bidding: Blyth & Co., Inc. and The First Boston Corp.

be

used

gram.

(jointly); Lehman Brothers and Riter & Co. (jointly)■,
Lynch, Pierce, Fenner & Smith, Inc.; Harriman.
Ripley & Co. Inc., and Eastman Dillon, Union Securities & Co. (jointly); Kuhn, Loeb &
Co.; Smith, Barney & Co./
Northern
March 31 it

States

Power

Co.

(Minn.)~ (7/22)

reported that the company also is con¬
offering about 714,000 additional shares, of

sidering

was

stock for

the basis of

Proceeds

subscription by

one

To

new

common

stockholdcrs-

share for each 20 shares held.

bank loans and for construction
program.
Underwriter—To be determined by competi¬
tive bidding.
Probable bidders: Lehman Brothers and
—

repay

Riter & Co.

(jointly); The First Boston Corp., Blyth &
Co., Inc. and Kuhn, Loeb & Co. (jointly); White, Weld
& Co. and Glore, Forgan & Co.
(jointly); Merrill Lynch,
Pierce, Fenner & Smith Inc. Bids—Expected to be re-'
cejved on July 22.
:
•

Pan American World Airways, Inc.
May 4 it was announced that the stockholders will vote
on May 26 to authorize the
company to offer up to $50,-'
000,000 of convertible debentures.
Stockholders would

pre-emptive rights to subscribe for these securi¬

ties.

Proceeds—For purchase

of equipment, etc. Under-.*
May be Lehman Brothers and Hornblower &
Weeks, both of New York.

writers

—

Pennsylvania Electric Co.
Feb. 10 it

announced that the company is planning
$15,000,000 of first mortgage bonds.
Un¬
To be determined by competitive bidding.*
Probable bidders: Halsey, Stuart & Co. Inc.; Equitable
Securities Corp.; Kidder, Peabody & Co.; Eastman Dillon,
Union Securities & Co., Merrill Lnych, Pierce, Fenner
& Smith Inc. and White, Weld & Co.
(jointly); The First
Boston Corp. and Harriman Ripley & Co. Inc.
(jointly).
Offering—Expected about mid-year.
the

sale

derwriter

was

of

—

Public Service Co. of New Hampshire
April 22 it was stated in the company's annual report
that it plans the raising of $13,250,000 from outside
sources. This new money will come partially from shortterm obligations but principally from permanent financ¬
ing, the amount and type of which has not as yet been

determined.

Proceeds—To

meet

construction

require-*
i

ments for 1959.
San

March

Diego Imperial Corp.
16 it was reported that

the company plans to
1,400,000 shares of common stock.
acquisitions.
Underwriters—White, Weld & Co., New York; and J. A. Hogle & Co.,
Salt Lake City and New York.

offer

an

Proceeds

additional
—

For

further

.

,

Thriftimart, Inc.
May 4 it was reported that the company plans to offer
$7,000,000 to $8,000,000 of convertible debentures.
Un¬
derwriters
Reynolds & Co., New York; and Lester,
Ryons & Co., Los Angeles, Calif. Offering—Expected in
the latter part of June.
—

is contem¬
plating the sale of $8,000,000 of first mortgage bonds.
Underwriters—To be determined by competitive bid¬
ding. Probable bidders: Halsey, Stuart & Co. Inc.; White,
Weld & Co.; Kidder, Peabody & Co.; Salomon Bros. &
Hutzler and Merrill Lynch, Pierce, Fenner & Smith Inc.
(jointly); Lehman Brothers and Blair & Co., Inc., (joint¬
ly). Offering'—Expected during August.
company

_

Kansas

(6/23)

f

Chandler, President, announced com¬
plans issue and sale of $20,000,000 25-year first

pany

•

Giant Foods Co. Inc.

York.

Equitable Life Assurance Co.

was

Northern Illinois Gas Co.

have

First National Trust &

was

re¬
'

March 25, Marvin

on

stock

Dec. 10 it

*

,

announced that the company plans an offering of 950,000 shares of capital stock. Price — $10 per
share. Proceeds—To increase capital and
surplus. Un¬
derwriter—John M. Tait & Associates,
Cincinnati, Ohio.

common

Salomon Bros. & Hutzler.
El

£

Underwriter—To
be determined by competitive
bidding. Probable bid¬
ders: Halsey, Stuart & Co.
Inc.; Eastman Dillon, Union
Securities & Co. and Equitable Securities
Corp. (joint¬
ly); Merrill Lynch, Pierce, Fenner & Smith; Kidder,
Peabody & Co. and White, Weld & Co. (jointly). Regis¬
program.

Merrill

end of June.

15

N.

was

Issue and sell

sale of

class A

•

Mississippi Power Co. (6/25)

Buckingham Transportation, Inc.
May 4 it was reported that the company is seeking
early ICC approval for the issuance of 250,000 shares of

and sell

Wilmington Country Club, Wilmington, Del.
Oct. 27 filed $500,000 of debentures due 1991 (non in¬
terest bearing) and 800 shares of common stock (par
$25) to be offered to members of this club and of
Concord Ltd. Price—$375 per common share and $1,000
per debenture.
Proceeds — To develop property and
build certain facilities. Underwriter—None.

15, 1960 to June 15,
Halsey, Stuart & Co., Inc.: Salo-

Bros. & Hutzler.

mon

its

ceeds—For

■

1974. Probable bidders:

Canada.

March 5 filed 100,000 shares of common stock

None.

★ Louisville & Nashville RR. (5/18)
Bids will be received by the company
up to noon (EDT)
on May 18 for the
purchase from it of $7,320,000 of 15- ■
year equipment trust certificates dated June
15, 1959,
and will mature annually from June

.

and

(par $10)
40,000 shares of preferred stock (par $25). Price —
At par.
Proceeds—For construction and equipment of
company's plant and for working capital. Office—300
Montgomery St.,: San Francisco, Calif. Underwriter—

Inc. (jointly); Equitable Securities Corp.; White,
(jointly); Kuhn, Loeb &
Co., Salomon Bros. & Hutzler mid Eastman, Dillon, Union
Securities & Co. (jointly); Lehman Brothers and Bear,
Stearns & Go. (jointly). Offering—Expected in May or
Weld & Co. and Shields & Co.

North American

—

Western Wood Fiber Co.

Co.,

ceived

Savings Bank of
Diego, Calif.
April 22 it was announced that Bank is offering its
Underwriter—To be determined by competitive bidding. 1 stockholders of record April 21, 1959 the right to sub¬
scribe on or before May 11, 1959 for 105,600 additional
Probable bidders: Halsey, Stuart & Co. Inc.; Lehman
shares of capital stock (par $5) on the basis of one new
Brothers and Eastman Dillon, Union Securities & Co.
share for each nine shares held. Price—$26 per share.
(jointly); The First Boston Corp. and Ha r rim an Ripley
Underwriters
Dean Witter & Co.; Blyth & Co., Inc.;
& Co. Inc. (jointly); Kidder, Peabody & Co. and White,
William R. Staats & Co.; Eastman Dillon, Union Securi¬
Weld & Co. (jointly).
Bids—Expected to be received
ties & Co.; and Dewar & Co.
up to noon (EDT) on May 25 at office of West Fonn
Electric Co., 50 Broad

mined by competitive bidding. Probable bidders: Halsey,.
Stuart & Co. Inc.; The First Boston Corp. and Blyth &

tration—Planned for May 29.
on June 25.

contracts.
M

45

June.

Wyoming Corp.

Utah Oil Co. of New York,

contracts

(2233)

City Power & Light Co.
Dec. 29 it was reported that the company plans to issue
and sell $20,000,000 of first mortgage bonds. Proceeds—
For construction program.
Underwriter—To be deter¬

Union Electric Co.

(Mo.)
1
McAfee, President, stated that the com¬
pany plans to sell about $30,000,000 of additional com¬
mon
stock later this year through rights to common
stockholders. Proceeds—For expansion program. Under¬
writer—May be determined" by competitive bidding.
Probable bidders: Lehman Brothers; White, Weld & Co.,
and Shields & Co. (jointly); Merrill Lynch, Pierce, Fen¬
ner & Smith, Inc. Offering—Expected toward the end
of the second or third quarter of 1959.

Feb. 23, J. W.

The Commercial and Financial Chronicle

.

.

Thursday, May 14. 1959

.

(2234)

46

Weld

Now With White,
111.

CHICAGO,

Mutual Funds

Michael P.

—

has
become
associated
with White, Weld & Co., 30 West
Monroe Street. He was formerly
with the Harris Trust & Savings
Cherry

On
/

By ROBERT R. RICH

Purchases of Mutual Funds Up

equity portion of

Chronicle)

(Special to The Financial
'

FRANCISCO, Cal.—Joseph

SAN

is

Yong

L.

now

Stone

with

Reference

Stock

Coast

Pacific

the

of

said

fund)

$333,713,000

for the same quarter of last year
quarter of 1958, the data showed.

Total shareholder accounts in

and $482,429,000.

Hits

■

both types of investment com¬

of

M.I.T.

of

assets

net

Association's

the

156

along with its "sister" Funda¬
mental Investors, as sellers was
erroneous. Actually these funds

member open-end

companies, were $14,132,828,000 at the end of the quarter with
NYSE listed equities held representing approximately 3.5%
of
the value of such equities listed on the NYSE.
This compared

ATOMIC

open-end com¬
March 31,

the close of 1958 when 151

with $13,242,388,000 at

Accumulation

by investors

plans started

monthly or quarterly acquisition

fund has more than 75 holdings of

March.

estimated

was

companies active in the atomic

field with the objective of

final

the

quarter of

Development Securities Co., Inc. Dept C
1033 THIRTIETH STREET, N. W.

WASHINGTON 7, D. C.

1S58, 70,319 accumulation

redemptions by investors — were
valued at $198,377,000 during the first quarter, the Association
reported, compared with $174,773,000 for the last quarter of
1958 and $91,795,000 for the initial quarter of last year.
of

—

portfolio

securities

by

the

156 mutual

funds

during the first quarter totaled $939,744,000. Sales of portfolio
securities came to $579,123,000 during the fourth quarter of 1958.

of last year purchases came to $525,857,000
$362,745,000.
•
:
;

first quarter

the

In

and sales

were

.

of investment income dividends to shareholders
totaled $91,705,000 during the quarter, compared with $104,351,000
for the last quarter of 1958 and $85,523,000 for the initial 1958
quarter.
Payment

Distributions

realized

net

oi

gains

capital

to

amounted

$55,502,000 during the first quarter of this year. For the-fourth
quarter of 1958—traditionally the time of heaviest capital gains
distributions—the figure was $187,027,000 and in the first three
months of 1958,

$40,437,000 was distributed from this source.

-

Closed-End Companies

Total
members

assets

net
of

the

the

of

24

Association

Holders of

common

dividends

stock of closed-end investment companies

investment

from

income

during

the

A mutual fund investing

in "growth"

for free booklet-pros¬

stocks. Send

During the fourth quarter of 1958 the figure
—reflecting, in part, year-end payments—was $15,722,000. A year
ago, on March 31, 1958, the quarterly figure totaled $7,365,000.

pectus by mailing this ad to

CALVIN

Capital

BULLOCK, LTD.

gains

distributions

for

the

quarter

amounted to
quarter of

$9,184,000, compared with $36,177,000 for the fourth
1958 and $5,014,000 for the first quarter of 1958.

the

fiscal

April 30,

on

end,"

year

reports

Henry J. Simonson, Jr., President

SecuritiesResearch

of National

Corporation which sponsors and1
manages the funds.;
"This represents a 51% increase
over' the April 30, 1958 figure of
$308,083,066," hie stated, "arid is
attributable.Td ibpth

market

ap-r

investors."
share

Per

each

Series funds

value

for
Securities

asset

net

National

the

of

The

ing

on

April 30, 3 959 and

TheTgW
STREET

Sales
1959

selected

March

open-end management investment

29

13

10.12

12

6.11

paid

gain

capital

for

distributions

1959.

in

enterprise with emphasis on long-term capital growth

trust

fund,

new

been

has

Income Fund
list

investing in

of securities for

a

;5For the second successive

distributor

|

investment dealer.

The Parker Corporation
200

■

or

and

send this coupon to

Berkeley Street

pc

|

an




■investors'

and,

!

me

a

prospectus and literature on

The One William Street

!
!
i

Fund, Inc.
i

j
!

Name.
Address

City

who

At

<'

Co. Ltd., and
of the shares
by Goldman,
York. Kleinbeing appointed

State..

are

advisers

to

the

Fund,
Ad¬

Investment

an

present, the Panel conof Brussels,

Kredietbank

of

&

Zoonen

Neuflize

de

of

Rotterdam

Schlumberger of

be managed

office

at

in Toronto from
National

The

distinctive

The

i/

[

.

enterprise is sponsored by

formed

Fund

Send

shares

of

Investors

April

gross

of

Broad

Corporation, Na¬
Corporation and

were

more

of

sales

March's

topped

$4,874,000

$4,586,000v

than 270%

Fox-Martin

and

larger than

290%

that

said

the first four

for

1959 stood at

total

months -of

$18,105,000, which is
the S6,293,000

greater than

for the like period of 1958.
For the four-month period,

of
shares
of
Investing, National

Street

Whitehall

and

tors

$3,502,000,

as

-

-

re¬

Broad
Inves¬

demptions

totaled

Fund

d

comp a r e

with

$2,229,000 in the first four months
of last year.

'

^

KOWC Fl'lCC 1(1.

to-;a;;

Trust

Company.
is

feature

of

this

that, with about half the

portfolio to be invested in Euro¬
pean
Common Market countries
and their affiliates and half in the

United

wealth,
to

Boston, Mass.

United

Paris. The affairs of the company

!

WILLIAM STREET SALES, INC.
One William Street, New York 4, N. Y.

A prospectus on each

your

investment dealer

month,

Whitehall Fund, Inc.

primarily with

privately,

Mees

will

I

fund is available from

the

Europe,

extent, with English and
investors. At , a later
market may be established
the shares with
a
view to

folio.

current

income.

in

visory Panel to assist them with
the European part of the port-

R.

1

on

sales of shares of the Broad Street

Mr.

a

sists

possibilities and current income.
For prospectus see your

90,588 to 106,400

By Broad St. Group

sales

A Closed-End Unit

investment

investing in the securities of American business and indus¬

A mutual fund

of

year

sales of April a year ago.

Fraii sail an tie F < I

worts,

company

capital and income.

Incorporated

a

Another Sales High

12

5.45

11.36*

''Adjusted

have

trial

quarter

31, 1959.

tional

f

5.17

Kleinwort, Sons &
private placing
is
being handled
Sachs & Co., New

a

I

from

creased

39

6.69

7.35

the

for
an

growth

higher than

Street Investing

6.69*

Bond

The

possible long-term growth of

a

ago—$8,761,046 as against $5,810,444. in 1958. Shareholders also in¬

40

widening the ownership.

FUND, inc.

investing in

51%

ran

first

the

for

a

share;
Fund of
a

57

European

Investors
A mutual fund

adding

limited

Incorporated

list of securities

cents ,a

cents

Axe-Templeton Growth
Canada, $20.82 to $31.12,
of 49%".
'

3.26

8.31

Stock

Ealanced

date,

1925

after add¬

13.6

after

25

$5.43

9.27*
..

Preferred

for

ESTABLISHED

45%
of

4.56*

Stock

Income.

Increase

1958

1969

Dividend

placed

WILLIAM

FREE ON REQUEST

of

growth

distribution

$8.50*

Stocks..

Growth

American

EITHER PROSPECTUS

of

share; Axe Science & Electronics

Kingdom and the Commonwealth
countries. Initially, over $5,000,000
of the Fund's shares-are being

ONE WILLIAM

growth of 38%

a

distributions

30,

ments

ONE

TIT

1958 are shown below Grqup of Mutual Funds set a recfor
capital
gain dis-\ord*. high, accordingto Milton
tributions where applicable:
Fox-Martin, President of Board
■;/ y::
Street Sales Corporation, national
April 30. April 30,
April

incorporated in Canada to provide
medium for diversified invest¬

Address,

share.

a

growth funds—Axe-Hough¬
Fund, from $3.45 to

Stock

ton

a

Name,

of

secu¬

adjusted

closed-end

st., new york 5

net

preciation and new' purchases by

Transatlantic Fund Ltd., a

Established 1894
oni] wall

were

of $465,610,064

quarter

totaling $6,344,000,

Series
of
at an all-time

high

Series

closed-end investment company
$1,683,780,000 up from the

were

$1,6*32,860,000 year-end 1958 figure and $1,281,372,000 at the close
of March, 1958.
received

mutual funds

shareholders

Corporation, from $9.45 to $33.44,

Securities

National

to

share from

a

rity profits; Axe-Houghton Fund
B, from $7.13 to $8.76, a growth of
127 % after adding a distribution of

the

of

assets

net

Axe-

—

;

EDITOR.

a

figure

"Combined

as

-

.

distributions

Past Fiscal Year
.

valtie

1958,

balanced funds

$4.63,

56,184.

Purchases

;

25.9 cents

Up $157 Million in

plans

assrit

Houghton Fund A, from $4.97 to
$6, a.igrowth of 26% after adding

for the regular

of mutual fund

quarter of last, year, the

first

and, in the

Repurchases oi' shares

possible

growth in principal and income.
Atomic

In

opened

were

stocks selected from among those
of

for

83,996

—

The

"National" Assets

shares—totaled
the quarter. A total of 935,172 such plans with an
value of $1,445,000,000 were in force at the end of

send you a free
prospectus describing Atomic
Development Mutual Fund, Inc. This

—

higher

aiso; showed

net

the first quarter of

over

29 cents

panies were Association members and $9,462,830,000 on
1958 when 144 companies were members.
We will be glad to

buyers.

were

vincrease, in

follows:

Fund

Investment

Diversified

Open-End Companies
Total

Securities

40%

Shares of the funds
an

Loomis-Sayles

(40,000),

Axe
was

,Total of $139,212,365 at
end of the same quarter in
,11958. All five funds participated in
The advance. " "
* V "
:'<■

three buying;
the
citation; of

nevertheless

by

the

with

C.I.T.,

>

Corporation. This

managements sold shares

seven

a

the

at

than The

Companies";

Finance'

the

$195,381,111

reported

was

rectly stated

and mutual funds) exceeded lour million
at the close of the quarter.
They were close to 3.9 million at
the close of 1958 and roughly 3.5 million on March 31, 1958.

Interested

;

of

end of the first quarter of 1959, it

31

page

on

Although,; asrtwas • cor¬
in the paragraph
bearing the sub-head "Selling

panies.

(closed-ends

panies

commentary

securities of the finance com¬

purchases of open-end investment company (mutual
shares for the quarter totaled $599,558,000 compared with

Investor

lor the final

Exchange.

data on the industry."

May 4 in releasing composite

on

the

high

new

made to

is

here

concerning the investment pol-.
icy followed by the funds in the
March quarter witlv respect" to

Association of Investment Companies

tive Director of the National

&

Youngberg, Russ Building, mem¬
bers

evidence
lor the
their financial plans," George A. Mooney, Execu¬

"Figures for the first quarter of 1959 provide further
acceptance of investment company shares

investor

of

sponsored mutual funds reached

the Funds" in our issue of May
7.

Assets, Sales

Total net assets of the five Axe-

article "Some Sail-Trimming by

First Quarter

Adds

appeared "in the

that

error

an

In

attention to

to call

Report

Sharp Increases

Quarterly Mutual "
Fund Survey
.y ;

wish

We

Bank.

Stone & Youngberg

Axe Fiinds

CORRECTION

Chronicle)

(Special to The Financial

Kingdom
it offers

and
an

Common¬

opportunity

combine investment in both of

}

these large and promising trading

i

areas

of the world.

Had 32% Share Rise
T.

Price

Rowe

Fund,

Inc.

March

31,

Growth

reported

that

Stock

of

as

total assets
increased to $19,391,500 from $10,731,650 the year previous.
Net
asset value per share increased to
$38.02 from $29.91 on March 31,
1958.
per

1959,

After

the

adjusting for the $1.55

share distribution in

Decem¬

ber from realized

gain on the sale
of securities,
this represented a
gain of 32.2% during the 12-month
During the first quarter of
share in¬

period.

1959 net asset value per

creased

from

$36.45

to

$38.02,

a

gain of 4.3%.
In his letter to

stockholders Mr.

Price noted that the increased

net

asset value of the Fund during

the

first

quarter had more than kept

pace

with leading stock averages
though a sizable reserve had

even

been maintained.
He

the

said, "We continue to be of

opinion

inevitability
tion,

that

Stocks
the
infla¬
bond yields so
common
stock
Growth

the best hedge against

afford

but

greatly

of

when
exceed

long-term

Number 5846

Volume 189

yields

.

.

believe that it is

we

prudent to continue to

The Commercial and Financial Chronicle

.

insurance
metals

sub¬

stantial

reserves
in bonds,1 par¬
ticularly short-term governments,
because of the much higher yield

afforded; and the greater protec¬
tion against an unpredictable de-:
in

cline

Growth

over-inflated

prices

Stocks.

for

pay

of
V;.

.

"There appears to be no
the prices investors are

more

even

are

The first of these, Southwestern

the

months

12

The

ended

in

investment

of

state of turmoil with

a

pected

remains

world

coupon rate.

fixed

was

at

DENVER, Colo.—Henry A. Nik¬
kei

offering

an

similar

inkling of when conditions will
begin levelling off on a sound new
base. Investors, and that naturally

Mr.; Popovic

stated that the
progressive character of our econ¬
js
omy is undeniable.
There is also
reassuring evidence that reces¬
Hugh W. Long and Company,
sions/ when; they periodically oc¬
Inc. today reported that the-totalcur as
necessary correctives in a
;'"t net assets of the mutual funds it
self
regulating
free
enterprise
sponsors reached $711,141,309 on
system, ' can be reversed beiore
April 30, making the Long Com¬
they assume serious proportions.
pany the nation's fourth largest
mutual fund sponsor.
Net assets Also, the proponents of spending

Assets $700 Million

J.

their

direction

from

I.

Case

-

in

downward

to

the

June

been
of

Company

declared

record

at

July

close

of

1, 1959,
business,

Dividend

on

individual

the

of

funds

were

creasingly

Fundamental

that

Growth Stock Fund, $49,209,364.

five

•v

doubled

than

more

years.

Shareholders

.

the,

of

T.

L,

Secretary.

NEWMAN,

on

in number from 334 in 1925
more
than 145,000 today,
or

where the offices of the funds are

.

side

.

in

State of the Union

every

-.-J and in 33 foreign countries.

rate

prices discounts the ac¬
of expansion for many

ahead. It is, obvious that
great patience will be necessary
to realize profits from securities
purchased at such high prices.
This is particularly true
in the
which

are

excessive

certain

and

stocks

currently receiving an
share of the attention

buying

Their

investors.

of

,

is

reaching proportions of a specula¬
tive fever which may end in dis¬

Keystone of

•

of: stock

industries

..located*- These shareholders re-

*

is character¬

aster

Neil A. MacDonald,

not

European Issues
of Canada is
of investment
opportunities
in
the
European
.Common Market, according to the
kannual report for the fiscal year
ending March'31. President S. L.
v Shelley
points * out; that 23.%.'; of
the Fund's.assets are invested in
securities of II companies dbriv-"
Keystone Fund
advantage

taking

of

informed

the

values

interested whether a
stock is going up.
Informed au¬
thorities
have
expressed
their
concern
at this development by
warnings to the public to be care¬
ful and not to act on the freelyoffered advice on how to

get ricli

„

-

,

.

from thfe

rectly

■

Com¬

European

the stocl^ market.
informed
expectation

quick
/

in

The

of

Siemens &
electric products
field, i Farbenfabriken Bayer
in
the

in

chemicals and Unilever in household

mism

can

disastrous.

be

products.

April Sales by IPC
Set New Record

.^countries

high of - close to $13,000,000 in
April, Walter Benedick, President
of the firm, announced.

}

value

asset

share

per

steadily throughout the
fiscal
year,
reaching a
record
high of $13.32 on March 25, more
than 50% higher than the reces¬
sion low in the Fall of 1957. Since

452

moved up

the end of the
/ set

value

another

share increased
high of $13.44.

Total

assets

net

climbed

to

a

are

sources

equally divided
cyclical natural: re¬

capital

goods

manu-

„facturing industries and the rela¬
tively
Over

of

service
the

industries.

assets

are

in

15.3 in utilities;
in oil and gas: 12.1 in banks,

eight
15.2

steady
75%

industries:




record

1959'
M. B.

Brooklyn,

CORPORATION

President

LOEB,

jsl. Y.

The

And to cap the climax the N. Y.

dend

the

State

per

bids

made

Authority, through
Comptroller
rejected

for

$50 million of

its

and

balance

the

in

a

of Directors' has

second-quarter divi*

of Seventy-five Cents (75$)

share

thus

bonds, comprising $12.5 million of.
serials

Board

declared

State Thruway

on

the capital stock of

Corporation, payable June

10, 1959 to stockholders of rec¬

term

ord May

bonds.

The

of

best

interest

net

4.3029%,

22,1959.

termed

The

ders,
the

rejection

reflection

no

ascribed to
market conditions

in

weeks back.

some

the

of

such

increased by 2,261,

total

on

plans

in

bringing

April 30 to 66,203 or

41.4% more than the 46,810 on the

All

told,

retail

the

big mutual

organization

70,000
books,

active
covering

now

fund

has over

accounts
shares of

on

Green Light for OnEd

of

cleared this v/eek

The way was

Consolidated

for

York's

New

Co.

Edison

than

those it sponsors.

share

Company, payable
to

an

stockholders

close

business

of

June 1,

on

record

of

May

on

at

(UNITED CARBON

18,

1959.

COMPANY

GEORGE SELLERS, Secretary

of

funding

large-scale

the Common Stock of

per

May 8, 1959

CHARLESTON,

operation when the Public Service
Commission
authorized
the
big

WEST VIRGINIA

utility to call for bids to be opened
May 26

or

27

on a new

bond issue.

it

registered

fortnight

ago

NORFOLK SOUTHERN

with the Securities and Exchange

actuality,
used

be

the
to

receipts

net

off

pay

incurred

bank
a

on

re¬

basis for temporarily fi¬
nancing such construction.

volving

The new week

promises

way

RAILWAY COMPANY

quarterly

a

payable

on

June

26,

1959,

to

business

contingent

on

June

C.H. McHENRY

approval of the In¬

on

payable

May 25, 1959.

1959,

15,

the Common Stock

Company,

of record at close of business
on

stockholders of record at the close
of

of .50

dividend

share has been de¬

June 10, 1959, to shareowners

2^2% Stock Dividend,

declared

on

this

of

of Nor¬

Railway Company

Southern

folk

per

clared

Stock Dividend

The Board of Directors

Secretary

,

for
additional shares
Norfolk Southern Railway

terstate

of
a com¬

PIVtDEND NOT!Cf
A

cents

the

paratively quiet period from the
standpoint of corporate new issues
on
tap.
Once the big Glickman
Corp. stock offering 3,357,700
shares of common is out of the

Commerce Commission

issuance of

Company's $1 par value Common
Stock for that purpose.
Henry

President

Oetjen,

Monday things will slow

on

down.

El Paso Electric
million bonds and $2
million of preferred stock up for
On

Tuesday,

^ALUS-CHALMERS

Co. has $3.5

bids, Gulf States Utilities is slated
to sell 250,000 shares of common,
and
Interstate Power Co.,
will
open

tenders for $4 million pre¬

Wednesday the Alberta

Munici¬

pal Financing Corp. has $50 mil¬
lion of debentures up for sale in
this and the Canadian
markets.
And,

Thursday, Interstate

on

$6

million

bonds, while Consolidated

Natural

is

back

Gas Co. has
mon

with

821,256 shares of com¬

being offered on

"rights."

-

COMMON

NATIONAL UNION

MFG. CO*
DIVIDEND

FIRE INSURANCE

No. 140

A

quarterly dividend of twenty-five
cents (25c) per share on the Common
Stock of this Company has been de¬
clared payable June 30, 1959 to
shareholders of record at the close of
business June 1, 1959.
4.08%
A

PREFERRED

DIVIDEND

NO. 20

regular quarterly dividend of

one

dollar and two cents (SI.02) per share

4.08% Cumulative Convertible
Preferred Stock of this Company lias
been declared, payable Juno 5, 1959
on

to

COMPANY
OF

shareholders of record at the close

May 22, 1959.

DIVIDEND

150th

DECLARATION

The Board of Directors of this com¬
pany

today declared a cash divi¬
Fifty Cents (504) o share

dend of

the

of business

PITTSBURGH, PA.

on

the

capital stock. This cash divi¬
25, 1959

dend will be paid June
to

stockholders of record

close of business June

at

2,1959.

the
-

Transfer books will not be closed.

5% Coupon Back

virtu¬

systematic payment plans other

regular quarterly dividend of 60c

a

the

its

ally all funds as well as a number

The Board of Directors has declared

1959

Power

date a year ago.

same

147th Common Dividend

the

since plans for the issue were an¬
nounced

May 7, 1959

DAYTON, OHIO

was

the bid¬

on

but rather was

change

Treasurer.

AND LIGHT COMPANY

ex¬

were

M. W. Urquiiart,

THE DAYTON POWER

the con¬

on

"costs

the

a

of

issuer

the

rejected

was

cessive."

to

cost

that

tention

bids, fixing

two

ferred.

said.

number

The

about

the
and

-

Benedick

i

between

I.P.C.

payment
contractual
plans sold in April constituted the
major factor in the new high, Mr.

force

high of $16,701,248, up 38%
from last year.
The portfolio has
60
issues in 20
different fields.

April of last year.

monthly

to

record

Assets

of

Face amounts of exclusive

fiscal year, net as-

per

new

PHELPS DODGE

paystockJune
^5,
J
to

!

Quiet Week Ahead

"

Net

'cord

of

holders

settled

bonds

way

been,g59

July

able

release from syndi¬

^

£?:6^eerd?d.«<i.

Stock has

with the

up

written' by

fund

to make their currencies
convertible will make it
possible for Canadian exporting 'f- It' totalled $12,983,277, nearly
F-companies to bring their earnings 10% higher than the March, 1959
back to Canada whenever and to
previous record of $11,815,382, and
what extent they wish.
almost 162%
above the $4,958,..

.^/'freely

./

upon

ap¬

117

DreWend No.

A

cc»«

now

Alabama and

cate this week.

% '

Business

as

Recent moves by Those

./—sources.

Li

road

indebtedness

mutual

':

Detroit

In

the 3,000
representatives of
production-in Western Europe expands
and
requires more and Investors Planning Corporation of
more
of 1 Canada's
naturalVre-* America hit an all-time monthly
benefit is expected

Indirect

y

tax exempt market.

would

Philips and

V.

N.

as

'•Halske

*

to have caught

pears

A

holdings

with 'such

Market

^NUf ACTU.mG No. 11' rnc.
co^NY.
Dividend

v.

of attrition

trend

growth of an industry or an in¬ Commission for the sale of $75
dividual
company
is the
only, million of 30-year, refunding
proper
basis for buying stocks. mortgage bonds. Proceeds would
ing most of their profits from out-" The ill-defined and, let us hope, be used to reimburse the treasury
side North America, f
ill-founded fear of inflation or l'or funds already expended for
The Fund hopes to benefit di-."starry-eyed but uninformed opti¬ expansion.
mon

*

least.

but

only

are

•ru V

*,

Secretary-Treasurer

May 4, 1959

support and slipped suffi¬
ciently to add as much as ten
basis
points
to original yields,
buyers have reluctant to say the
The

The

5%

coupon

rate

a

per

cate

fpr buyers of stocks who are

Kj

Canada Adds

-

cents

years

^=20% greater than the estimated
^population of Elizabeth, N. J.,
y

market

stock

5

on the
common stock, payable
May 28, 1959, to stockholders of
May 15, 1959.

offerings

recently

of

record

loose from syndi¬

cut

sharply

money.

press

tual

'grown

*

mi¬

by generous expectations as
to the future growth of industry

supervised
by
Investors
Management
Company
have

to

insubstantial

an

lis

will

ized

funds

!

bot¬

a

reassures

prosperity

profits. The record shows that the
assets
have "long-range rate of expansion is
in the past quite modest. The general level

total,

fund's

in¬

are

by prolonged living on print¬

The

»'

ganizations in the ! mutual -.fund
field, established in? 1924.'
'
The

become

rage

ing

This

present

our

not

Investments of these funds are

supervised by the Long Com¬
pany's affiliate, Investors Management Company,; Inc., one of
the oldest investment advisory or-

.

well.

tomless

Fund, $98,573,871; Diversified

*

force

the defensive since
rising realization that

on

a

Investment- goyernment credit is not

Diversifed

,358,074;

$563,-

Investors,

is

there

*

■_

constructive

a

as

as

follows:

where

been

Common Stock

dividend

semi-annual

persistent erosion of prices.
Even

Smith

The Board of Directors has declared

,,

have

Merrill

&

share

1959.

12,

with

Fenner

HOOD CHEMICAL CO., INC.

1959-

payable
the

Pierce,

DIVIDEND NOTICES

dividend of $1.75
per
share on the V/o
Preferred stock and 11.375 cents per share on
the 6^2c'o Second Preferred stock of this Com¬
pany has
to holders

is

Julkowski

Lynch,

Incorporated, Rand Tower.

but

slow

MINNEAPOLIS, Minn.—Gerald
T.

A

U. S. Treasury list where the trend

been

ex¬

(Incorporated)

ondary, have been fading steadily,

has

was

100.777

at

Racine, Wis., May 11,

The markets, new issue and sec¬

taking

made

be

(Special to The Financial Chronicle)

a

5% coupon.

a

Corporation,
Building.

With Merrill Lynch

$15

drew

with

Securities
Union

Farmers

DIVIDEND NOTICES

institutional

informed

the

means

31, 1959, the assets grew
$25,237,000 to $32,608,000.

to

of

bonds

associated

become

has

Financial

a

yield the buyer 4.95%.

real

no

people, remain highly nervous and
inclined to shy at shadows.

r

top bid

a

Reoffering this instance

March

,

here

top bid of 99.7799 for

from

Long Group's

5%%

a

Yesterday,
million

Expectations

In

With Fin. Securities

price of 101 to yield 5.06%.

D.

1959.

of

vv

30-year bonds drew

Reoffering

Popovic, President of
Blhe
Ridge Mutual Fund, Inc.,
stated that growth of the Fund
continued during the first quarter

price-earnings ratios and low divi¬
dend yields of many of our favor¬

so-called

Electric Power Co.'s $16 million of
new

Says Stock Levels

Milan

two

for

deals.

(Special to The Financial Chronicle)

of 100.051 for

Profit

Several

bidding

"Street-sized"

willing to

times in recent years we have di¬
rected your attention to excessive

ite; stocks; These
extreme today."

find

Reflect Generous

limit to

Stocks.

Growth

of

and

finance; 10.9 in
mining; 7.8 in iron,
steel; 5.7 in . lumber, pulp and
paper; ,6.5 in retail trade, and 5.4,
in.electrical products.

more

carry

47

(2235)

was

initely back in vogue in the

$ft

A. D. Dennis,

def¬

public

utility new issue field as a result

'

May G, 1959

Secretary

Treasurer

May 5, 1959

The Commercial and Financial Chronicle
48

.

Thursday, May 14, 1959

.

.

(2236;

j •

Washington
Behind-the-Scene Interpretation!
from the Nation's

C.

WASHINGTON, D

vestor-owned

—

and

down

Under

power

a

rates

its

with

the

Financial

liberals in
had a goal
Government to
dominate the power industry in
this country. It is pretty obvi¬
ous that
they still cherish that

Franchise

what the

In

Administrator

in the bill include:

loggerheads. Mr. Hamil even
testified that Mr. Benson had
never reversed him in a
single
at

est

House

was

989

than

more

electric

legisla¬

tion itself is of little importance,

Democrats failed

cumulative

government.)
The

23

years

$4,000,000,000.

ers

are

now

In

ers.

amounts," will have to compete
with the going interest
rate.

ritories

Presumably, they will not have
any more
effect on Treasury
Department operations than the

custom¬

other

operatives

are

words, the co¬
expanding in ter¬

where

investor

should

Utilities

issuance

owned

-

small

to

shed
area

eral years.

A few days ago. close on
of the
REA scrap,

the

heels

fiuthorizing the to finance ValAuthority Tennessee

new

facilities by issuing up to
$750,000,000 of revenue bonds.

power

Twice
the

final
was

the first

approved
now

the

by

was

time

that

measure

(the
245
it




TVA.
the

Testimony

demand

for

in

Woven

the

of

story

the

versus the pri¬
investor owned issue, is

power

a

or

tremendous story of the elec¬

growth in this country.
The ever-rising standard of liv¬

generation of electricity
At the
same time
profits of the com¬
panies
rose
last year,
while
profits of many other major

in 1958 increased by 2%.

industries slumped.

E.

will

States

United

the

Blerlin

have

on

had

been

As

of

rea-

What

Unions

Russian

of

Magazine

such an increase
$100,000,000,000 will

for

more

than

have

to

invested

be

in

Corette,

retiring

the

1959

in

is

alone

amount to

For the

to

$4,600,000,000.
past few years there

have

been

that

Russia

has

been

1958—J.

out-de¬

ciation

United States in
power field.
Mr. Corette
flatly this isn't true.
He

veloping
says

the

in

that

said

States per

electricity
hours

about

he

times

of

D.

Rus¬

In terms of generating

observations.

but is increasing its supe¬

[This column is intended to re¬
flect the "behind the scene" inter¬

pretation from the nation's Capital
and may or may not coincide with
the "Chronicle's" own vieivs.]

25% from 56,200,000 in

1958 to

70,000,000 in 1968, representing
a 135% over the 10-year period.
He

that

asserted

should

increase

000.000

to

by 1968.

revenues

from

DALLAS, Texas—Rotan, Mosle
& Co.,

members of the New York

Stock

Exchange,
office

at

have
2911

Center, under the management of
John L. Mosle, Jr. and

*
Power

a

Southland

$8,500,-

about $20,000,000,000

The. Federal

opened

Commis¬

Board, Washington,

Taft-Hartley Act—A

Year

Book

of

Ministry

Trade

of

Quebec,

merce,

for

Quebec,

Province

—

Com¬

and

Que.,

the

1958

Canada

(cloth).
of Social

Security in Retire¬

ment Planning

Opens Dallas Branch

branch

—

(paper).

Statistical

Use

Rotan, Mosle & Co.

cast that customers will increase

C.

Under the

riority over Russia.

Mr. Corette fore¬

Home
Financing
Federal Home

and
Bank

bibliography—Selected References, Industrial Relations Sec¬
tion, Princeton University,
Princeton. N. J. (paper), 30c.

President of the Edison Electric

Institute, in his recent farewell
address, made some pertinent

Railroads,

Secondary Boycotts and Picketing

ca¬

pacity, he says that the United
States is not only holding its
own,

American

Book

Chart
Loan

is

maintains
that

looking for

Monroe—Asso¬

Elmer

of

Savings

capita production of
was
4,166 kilowatt

which
four

be

soon

Transportation Building, Wash¬
ington 6, D. C. (paper).

United

the

1957

,

Review of Railway Operations in

circulated

reports

will

who

gener¬

expected

$1.40 per copy.

employment, with advice on
evaluating aptitudes and abil-«
ities, etc.—Enterprise Publica¬
tions, 11 North Wacker Drive,
Chicago 6, 111., 20d per copy
(minimum order 25 copies).

Power expansion

tion facilities.

issue on West
93
Breite

Germany,

Looking Toward That First JobBooklet
directed
to
students

ernment officials declare that to

provide

—

the

quar¬

Strausse, Neuss-Rhine, $4.80 per
year;

These gov¬

&

—

Kalb, Voorhis

Co., 25 Broad
4, N. Y.

Street, New

York

and

Wages

Related

Benefits,

19

Labor

Markets, 1957-58—U. S.
Department of Labor, Bureau
of Labor Statistics, 341 Ninth
Avenue, New York 1, N. Y., 50c*

H. Eiband

Wilshusen, resident partners.

TRADING MARKETS
American Cement

Botany Mills
Heywood-Wakefield
.

spread out far beyond the

.

.

Indian Head Mills
W. L. Maxson

river's

watershed, is held to
approximately 80,000 square
„

Morgan Engineering

*

miles.
The

National Co.
Tennessee

River

Knoxville to Paducah, Ky.,

its

confluence

River

is

about

with

135

feet

with.,

is

this

feet, of which

The

C.o. Inc.

Southeastern Pub. Serv.

United States Envelope
FOREIGN

SECURITIES SPECIALISTS

20 BROAD STREET

TEL: HANOVER 2-0050

•

NEW YORK 5, N. Y.

TELETYPE NY 1-971

LERNER & CO.
Investment

10 Post Office

area,-

Securities

Square, Boston 9, Mass.

Telephone

area.

TVA

&

concentrated

in Northwest Alabama's Muscle

Shoals

Carl Marks

the^, Ohio

fall of the river over

about

from

650 miles long.

route is about 500

179)

The

terly—Current

gen¬

available^

now

to be nearly tripled.

sia.

The

J.

in

power

enormous

capacity

erating

the

is increasing rapidly.

public

present

41,000-square mile
in Tennessee, North Caro¬

The

to

appears

similar

Labor

a

ap¬

vote

body.

has

but

legislation,

action

passage

lias^

Senate

the

similar

House

has

the

House for the first time passed
hnd sent to the Senate a bill

proved

that

power

1980, the

sion estimates that by

lina, Virginia, Alabama, Georgia,
Mississippi and Kentucky. Un¬
der the House bill TVA, which

The TVA Measure

ey

in

bonds

by any publicly owned
power system.
The Tennessee River water¬

spreading
are being
telephone com¬
panies and have been for sev¬

made

of

amounts

be

Substantial loans

out.

have

outstand¬

will be sold in "relatively small

REA custom¬

non-farm

cannot

sum

ing at any one time. The rev¬
bonds to be issued, which

It is being said

of every four new

that

enue

good authority that three out

on

TVA

that

;

to over

amounts

by

Industry's Bright Future

bonds

of

$750,000,000

-

than

more

by REA in its history of more
than

pay

means

loans

served
showed

ing calls for more electricity.

the House.

total

7

1,500,000 in the area

are

trical

by only four votes to get a two- *
thirds majority to override the
The

there

vate

to

hut the political aspects were
big. Although the Senate voted
to override President Eisenhow¬

Chief Executive in

300,000 electricity consumers in
the
basin
of
the
blue,
cool
waters of the Tennessee. Today

into the United States
Treasury
at
least $10,000,000
a year
until it has repaid $1,200,000,000
previously
appro¬
priated by Congress, and to pay
a
3% annual interest rate on
the
outstanding
debt
to the

Bepublicans charged that it was
a spite bill.

er's veto, the

sale; of

debt.

them

The facts are that the

com¬

ating, transmission and distribu¬

shine stills.

(The House directed that
TVA charge rates high enough

Republicans, are battling
and subsidized loans.

the

areas

some

standing be included as part of
the nation's already staggering

country know that they, and not
for

too

manywere
marked with some poor hillside
and mountain farms and moon¬

be

not

and that they would not
be
obligations of the United
States Government. Neither
would the amount of bonds out¬

the

over

ago

not

whereas

In 1933 there were fewer than

the

by

as

milk and honey and

of

years

provisions

power,

public

active

borrowers

solely

describe it

congressmen

land

roses,

would be se¬

the bonds

on

cured

Democratic

in the Senate and
anxious to let the

leadership

a

exempt from Federal income
taxes: the principal and inter¬

major loan.
the

area

,

would

bonds

The

past operations,

today is one of America's finest
recreational areas.
Some TVA

are

of the other

Some

David A. Hamil had never been

Nevertheless,

have marked its

he

provided in the bill
that went to the Senate.

controls

Inflation;

Containing

—

Federal Republic—Issued

suggested that Congress should;;
retain budgetary control over
the
TVA
financing program.
The Democratic
leadership in
the House insists that sufficient

obviously
was political legislation.
Secre¬
tary of Agriculture Ezra Taft
Benson and REA

1960 fiscal year message

his

How

on

Germany:

proposal. In

the TVA bond issue

thing

whole

the

does

who

guy
mercials!"

his

in

Congress the
recommended

three years

past

Spite Bill
This

T, V. westerns is that they never

man—the

right

the

y>;

;
1959

Trade?; Reflections on Foreign
Aid; Corruption of Union Lead¬
ership; etc.—The Foundation for
Economic
Education, Inc., Irvington-on-H u d s o n,
N.
Y.
(paper), 50e.

budget messages to

loans.
A

Eisenhower

President

so-called
anti-Benson measure.
This is
the bill that would have stripped
the Secretary of Agriculture of
his power over Rural Electrifi¬
cation
Administration
(REA)
all-out backing to the

"Trouble with these

shoot

stockholders.

to

return

sonable

Congress gave their

in

leaders

provide

tions and

Democratic-

the

of

some

Cause

meet its obliga¬
a fair and rea¬

has to charge to

clear-cut political maneu¬

a

ver,

articles

rates as compared with
private power industry

cheap

■/.;;

Publications,
Street, New York

May

Freeman,

any

Small Business

a

Pilot

i, N. Y., $2.

should not run into
difficulty with their cus¬
tomers, because all TVA would
have to do is to publish its own

goal.

—

West 33rd

42

the agency

have

country

the Federal

for

Company, 120
N.
J.,

Security and Independ¬

Through

ence

increased

ists and the extreme

this

&

Princeton,
(cloth), $7.75.

Alexander,

it is going to meet its
obligations. However,

if

costs,

Economics":

"New

the

—

that TVA is going to
crease

of

Nostrand

Van

private power

it

now,

New

Analysis of the Keynesian
Fallacies
Henry Hazlitt —D.

would appear
have to in¬
more
in line

higher

of

Avenue,

An

year

As

Prentice-Hall.

—

Fifth

70

to

Fred

—

11, N. Y. (cloth), $4.95.

Failure

for repayment of past
appropriations.

000

1000

Guide

A

Work:

Performance

Armond

Inc.,
York

$46,000,-

United States Treasury

The privately

companies are
going to have to be alert con¬
stantly in the years ahead to
keep public power from invad¬
ing their natural territories.
For years and years the Social¬
owned

De

House-

the

of

terms

America,

Avenue,
N.
W.,
(paper).

At

Successful

passed bill, TVA is authorized
to charge rates to pay off the
bonds as well as to repay the

floor of both the

the

on

House and Senate.

Executive

ing amendments.

the
political battles that have been
Waged
both
backstage and
thus

emerged

tacks on

Senate

has

clearly
far out of

thing

One

Eisenhower
unless the
some restrain¬

bill,

the

veto

will

Figures.

Transport

Washington 6, D. C.

President

dicting

coming

is

more

When the political smoke has
cleared,
both sides may have
won one contest and lost one.
up.

of

Connecticut

bill some Republicans were pre¬

and

Air

—

Association

controversial TVA

approved the

Facts

Edition

20th

House

days after the

few

A

Transport

Air

this year.

age

public power has been debated
thick and heavy
in Congress
recently,

Senate pass¬

sonably certain of

in¬

versus

power

And You

Capital

The

nation's

the

of

question

•

•

•

BUSINESS BUZZ

despite

some

of the socialistic tendencies that

HUbbard

2-1990

Teletype
BS 69