The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
BUS.
WAY 16 1947
ubrarv
Final Edition
^Volume 165
ESTABLISHED 1S39
Number
4594
New
in 2 Sections
York, N. Y., Thursday, May 15* 1947
Section J
-
Price 30 Cents
Copy
a
The Banker's View of Business
By DWIGHT W. MICHENER*
Associate Director of Research, The Chase National Bank
,
By EGON
Holding careful observation reveals present situation is a boom,
bank economist points to increasing inventories,
price and wage
advances, and low interest rates as expanding bank loans and
causing inflationary trend. Foresees heavy export demands declin¬
ing to normal proportions and price adjustments in offing. Cautions
bankers to be on alert and place greater emphasis
upon sound but
aggressive banking policy in regular business lending.
KASKELINE
With government controls abol- j
ished, food situation almost
nor-;
mal, industrial production high, j
employment full, and ordinary !
budget balanced, nation is a
During the past several months,
showing
European
bright spot
many
evidences of
peacetime boom.
against
infla¬
tion successful.
re¬
suggest that a
period of less
spedtacfulaf
depends
business is
on
these
labor shortage
and high price
freedom
en
from
1
government
D.
us.
are
am
glad
W. Michener
planning.
winning the battle of production.
According to all indications, this
writer found during his visit to
Belgium, this country is definitely
cor¬
back
the road toward internal
on
peace and prosperity. This will not
that
all
difficulties, left
mean
behind
have
five
by
and
war
of
years
; diets for
on page
36)
rate
a
of
ume
than
before
(Continued
on
address
tion
of
the
Association,
May 8, 1947.
by
production?; to 180. The stenographic testimony of Mr. Edie's
this factor follows:
<
: i
V
V V
V
*
M y
remarks
are directed to
the
general
look.
shall
I
attempt to.
not
,
translate- that
into
of
estimates
what
revenue
;be
tax
would
such
at
level of
er
busi¬
but rath¬
shall try to
confine
The
Lionel
D.
Edie
my¬
to
the
probable
de¬
self
velopments in
Conven¬
Tennessee
Bankers
Tenn.,
to make
it is
In
j
"
•«
'
'
-
_
^Prospectus
!
* 1
on request
'
ft. H. Johnson & Co.
Established
\
m
This
is
decade,
t
for
than
more
a
assumed great
Thos.
activity. Since
beginning
of March, for
the
J.Anderson, Jr.
physical
instance, Indiana has enacted a
comprehensive law dealing with
strikes
probably in the neighborhood of
188 to 190.
New
calendar year. 1946, this
170.
Since that time
arid
the
at
In
has
risen
substantially
present - moment.
other words,
is
18 to 20 points
higher than the calendar
erage 1946.
;
Now, the question1
as
today *as; to whether
going to be a business re¬
I
one
is
1 Arizona
to what
questions
There
(Continued
year av¬
next to , that production
index involves a great many fac¬
tors. As we know, there are many
ence
Jersey has amended its law
regulating strikes and lockouts in
*'
happens
there is
and
implemented,
constitutional
This,,
ban
summary
tutes is based
included
ol
the
merce
in
on page
of
on
by
the
State
24)
statute, a
closed1 shop.
regulatory
sta¬
texts of such laws
volume on State Laws
Law Service of the Com¬
upon
the
Labor
Clearing House, Inc.
wide differ¬
a
of opinion on that.
would
start that
like
we
to
don't
(Continued
observe at
assume
on page
the
that the
State and
31)
Municipal
MUNICIPAL
BONDS
INVESTMENT SECURITIES
Hirsch & Co.
64 Wall
Street, New York 5
)
Members New
York Stock
Exchange
and other Exchanges
BOSTON
25 Broad St., New York 4, N. Y.
Troy
HAnorer 2-0600
Baltimore
Chicago
Teletype NT 1-810
/
Cleveland
Geneva
London
Pittsburgh
Buffalo
Harrisburg
Sranton
Willkes-Barre
ol INDIA, LIMITED
OF NEW YORK
LAMBORN & CO.
.
99
'
I
Bond
*Air
NATIONAL BANE
New
52
-
.
..
Dept. Teletype: NY 1*708
„
York
WILLIAM ST., N. V.
Bell
Head
Office:
26,
NEW YORK 5, N. T.
/•
i
Bond
Common 4 Preferred
SUGAR
-
also
Exports—Imports—Futures
£2,300,000
Trusteeships and Executorships
undertaken.
Brokerage
THE
CITY OF NEW YORK
Portland Electric
Power
Company
Prior Preferred
120
DIgby 4-2727
-
-
request
Reynolds & Co.
Members New
of
on
York Stock Exchange
Broadway, New York 5, N. Y.
Telephone: REctor 2-8600
Bell
Analysis
and Dealers
$2.40 Conv. Preferred
'Prospectus
£4,000,000
Paid-Up Capital—.—-£2,000,000
conducts every description
banking and exchange business
OF
-t
Raytheon Manufacturing Co.
Subscribed Capital
Bank
Toronto
for Banks, Brokers
London, E. C.
The
NATIONAL BANK
Common
in India, Burma, Ceylon, Kenya
Colony and Aden and Zanzibar
Fund——
Montreal
Service
^Georgia Hardwood Lumber Co.
Bishopsgate,
Branches
Reserve
HAnorer 2-0980
Teletype NY 1-385
New York
Bankers
to the Government in
Kenya Colony and Uganda
THE CHASE
'<
Security Dealers Assn.
Products, Inc. Com. & "A"
*Emery Air Freight Corp.
WALL STREET
ft CO.
Members
Syracuse
Dallas
Williamsport Springfield Woonsocket
(Representative)
Bond Department
THE NATIONAL CITY BANK HART SMITH
PHILADELPHIA
Albany
Teletype: NY 1-635
ja
and
Bonds
1927
Ja
in public utilities; Idaho
Oregon have dealt with the
secondary boycott; Arizona,!
Texas, Georgia, - and - Iowa have
placed bans on the closed shop;
A
STATE
of do¬
.States
Aerovox Corp.
Havana Uiho. Co.*
in
process
lop, merit
among
the
;
was
index
cession.
every
been
testimony
index and is not affected
the
index
the
num¬
fairly familiar with the Federal
a.v
latory law has
by changes in prices.
necessary
of certain index
use
bers, and I think that
is
-
.
For this purpose
Michener
production.
volume
among
States,
Union regu¬
pre-
Reserve Board Index of industrial
a
ness,
pafe 32)
Knoxville,
out¬
business
is
Mr.
Edie:*
Mr.
the
Annual
the
ve
on
with you
war.
ment
eighteen months. For. the calendar year 1947 he foresees a
10'point drop in tfle Federal Reserve Board Index l of industriql
business.
*An
industrial States.
more
adopting comprehensive Federal regulation
of labor organizations is being debated by Congress it is well to take
next
is true of the production of
same
comprehensive legislation needed in
the problem of
Testifying before the Senate Finance Committee April 30, Lionel
Edie, Economic consultant and investment adviser of New York,
predicted *an orderly readjustment of the nation's economy over the
dis^
above
the
As
D.
coming out
the ground in far greater vol¬
before the 56th
Leland Electric
30%
prewar level. Coal
occupation,
completely
been
already
at
Asserts
been
~
factories in record peacetime
proportions. Steel is being pro¬
duced
'
employment, and prices from current peaks.
pouring out of
now
necessary accompaniment of Federal legislation to determine r
legal responsibilities of union management, adherence to agree-!
ments, financial responsibility, and reporting of financial operations, {
1947-1948 moderate readjustment of national income,
our
enemy
(Continued
are
[
j
is
Lionel D. JEdie, testifying before Senate Finance Committee,
,
the five years
preceding the war.
Products
•
University.
-
BRUSSELS, BELGIUM — Bel¬ the current situation and the out¬
gium is the only one among the look.
formerly occupied countries in
First, let us notice some of the
Europe w h i ch
has *' found * its evidences -of boom
-conditions at
political equilibrium, which has the present time: Industrial activ¬
successfully struggled against in¬ ity is now 80% above the level of
increasingly
York
Drastic Recession!
something. of
flation and which is
Economics, New
panion move¬
If
very
to
cuss
of
note of a com¬
r
rect, they are
0 f
maj or
importance to
bankers, - and
on
Professor
Prof. Anderson concludes from widespread survey that State action
Bank credit is widely
t
conclu¬
sions
problems. Pol¬
icies based
rr
ahead of
solution of
Associate
in<§>
developments
u
American business has
By DE. THOMAS J. ANDERSON, JR.
boom.
C
covery
Egon Kaskeline
a
involved
this
Postwar battle
Complete
By the States
i
Hardy & Co.
Members
New
York Stock
Members
New
York
30 Broad St.
Tel. DIgby 4-7800
Curb
Exchange
Exchange
New York 4
Tele. NY 1-733
upon
request
ira haupt&co.
Members Neu> York Stock Exchange
and other Principal Exchanges <
111
Broadway, N. Y» •
REctor 2-3100
Teletype NY 1-2708
Enterprise 1828
.Boston Telephone:
Thursday, May 15, 1947
FINANCIAL CHRONICLE
THE COMMERCIAL &
2
(2598),
:
The International Bade and World Trade
Tradingx Markets in:
Standard G & E, Com.
Rails
Old Reorg.
&
Commons
!.
(
"
< •
By CHARUES C. FINED*
■
"
Products
40
TELETYPE NY 1-423
speak to you today on what--the. International Bank can do for world
confine myself entirely to the International' Bank, and'to make no>
the functions of its companion; organization, the International Monetary Fund,
come
to
reference to
not
of!
*
.
into
t
enter
any
de¬
discus¬
tailed
sion1 of its- op*
and
erations
In
technique.
how¬
view,
n e c
C.
Charles
WOrth 2-4230
Bell Teletype
of • thb
con)
ever,
close
Stock Exchange
Broadway, N. Y. 5
Members Baltimore
120
I
that
should
Quoted
Bought, Sold,
t i
bodies
two
with
Members' New
—
—
—
25 Broad
New Orleans,
rapidly breaking down. One;
was
World Trade Before the War /
major causes of dislocation,
competitive depreciation of!
currencies and the operation ofj
Before considering, the present
multiple
I. would'
arid
tion which existed before
situa¬
the war,
that variety of* obstruction
free flow of
recurrence
are
largely to prevent: the
of such a situation that
the nations of; the world1 meh at
Bretton Woods and; provided for
the establishment of the Inter¬
trade, with which you
Morietary Fiind and the
• Bank
for
Recon¬
Second
struction and Development.
World Trade,
*
Mr. Pinfeo atthd
Institute
of
San Francisco, Cal.,
w
"
public utility executive, writes Congressman J.
Woods Institutions fail to remedy causes of present currency
William Chamberlain,
Class "A"
4s,
.
1975
H.6. BRUNS&CO.
Pine Street, New York 5
20
Telephone: WHitehall 3*1223;
Bell
I
Teletype NY 1-1843
Central States Elec.
inflation* and economic deteriora¬
tion in foreign countries.
Contends institutions will drain this country of its substance without possibil- ;
ity of return.
Holds both Fund! and Bank are integrated and threaten to take savings from Americans
to: bolster non-refundable capital assets in foreign lands.
Foresees threat to U. S. foreign trade; v
Bretton
■
.
Cost Americans
Billions
Z. Anderson of California; that
Says Fund and Bank Witt
Preferred
&
Indiana Limestone
Area*
Bay
May 9,/1947.
all know,, free and unr
Campbell Co.
*Arv address by
International
you
Corporation?
Common
by every country
1948
Common
A* S.
(Continued on page 30) /
"
As
1
Danville
4s,
Byrndun
all|
to the
all familiar. Every step taken
in this direction
&
1st
,
'
3/6s, 1956
branch'officer?
our
Atlantic
agreements,!
blocked currency accounts and
for it. was
national
trade
bilateral*
then;
rates;,
arrangements!
there .were
remind you* of. the
to
like
future,
the
for
outlook
exchange
clearing
and the
f
Savoy Plaza
NY <1-1557
-
La.-Birmingham, Ala
Direct wires? to
of the
,
York Stock Exchange
Si, New York 4, N. Y.
HAnover 2-0700
—
:
hindered trade between countries,
give you also, very
broad outline of. the
try to
position of world trade
I
trade,
world
of
subject
of
o ri
these
Pineo
NY 1-1227
the
Steiner, Rouse &Co.
.was a
appro-!
priate
(New $1.00 par)
-
— -
—-
shall
not
do
it
feel
aril
officei! briefly, a
Fund) part whicht the Fund' will play,
an
the
and
Tube Reducing Corp.
rea-3>
the
that I
son
,
I.
Bought'—Sold<—Quoted
I had intended to
trade,
for
'
Louisiana Securities
loans will benefit everyone
applications totaling $2,554 millions* Concludes although Bank?
faith in future, alone;,it cannot revive world*trade..
I have
Security Dealers Assn.
Securities Dealers, Inc.
Y. S HA 2-2772
Exchange PL, N.
BELL
world trade, points out objectives of Bretton
and will restore world
Established 1920
N. Y.
Ass'n of
Alabama &
,
to protect
were
has ldan
SECURITIES CORP.
Nat'l
'
,
interests of all? countries from currency evils and to give assistance to devastated
and underdeveloped! countries*
Contends experience after World War. I< demonstrated'pri/ate lending
could not accomplish these objectives.
Reveals Bank has present loanable capital of $725^ millions and
Woods
KING & KING
Members
official) after reviewing pre-war handicaps-tb
World" Bank
Doyle Mfg. Com.
Drug
■
..
.
for Reconstruction and< Development
Director, International Bank
Boan
Preferred*
(Va.)
Stock
Common
'
Detroit int'l Bridge
Eastern
Racing Ass'n 1
Preferred. & Common
William Chamberlain,
Vanderhoef & Robinson
Members
New
York
Curb Exchange
31 Nassau Street,
New York 5
7-4070
NY 1-1548
Telephone COrtlandt
Bell System Teletype
resides in Saratoga,
25 to Congressman
and the
& Steel
New Eng. Electric System WI
U. S; Finishing com. & pfd.
Gen'l Aniline & Film "A"
Taylor Wharton Iron
Northwest
Airlines
Northern New
pfd.
England
United Piece Dye Wks.
United Artists
Theatre
Boston & Maine R.R*
Aetna Standard Eng.
Firth
Sterling
Steel
Punta Alegre Sugar
Newmarket Mfg.
Moxie Common
by their managements.
It is to these announced deciisions that I wish particularly to
that I write
additional letters covering
phases of our fiscal policies
lain in
you
..previa
issues
"The
Chron-^
icle"
(April
25,
Oct.
such
of
accordingly writing
lished by BW
relating
currency
to
and
may
were
William Chamberlain
resentative Anderson follows:
79th
My Dear Congressman:
reply to
that further discussion at'this time
is futile. My answer
my
letters of a year
Pacts
were
New
England Gas
& Electric
Bought
Sold
—
—-
Hanover 2-48S0
1-1126 & 1127
New
York Stock
New
York
Tel.
Exchange
Curb Exchange
REctor 2-7615
Trading Markets in
Railroad
Public Utility
Industrial
STOCKS & BONDS
money
provided by Congress.
It is true that all
provisions
But
certain
recently.
these
of
have
were
nor
institutions
i
ST., N. Y. 5
WHitehall 4-4970
Teletype NY 1-609
an¬
could
not
and
known
probably
anticipated* by neither you
been
your
colleagues. They throw
Established
Members
1923
YOrkCUrb
ABITIBI
POWER & PAPER, Com.
BROWN COMPANY, Com.
HAnover 2-9470
Teletype NY 1-1140
the
an
an¬
Curb and Unlisted
Securities
by the Bank's offi¬
cials that the loanable funds of the
MICHAEL HEANEY, Mgr.
nouncement
Asst. Mgru
WALTER KANE,
Bank must come almost exclusive¬
ly from citizens and institutions
of the United States aided by such
Canada may contribute.
sums as
Joseph McManus & Co.
Members New York
The
I
do
Curb Exchange
Chicago Stock Exchange
I
I
to review or
not propose
analyze
For Banks,
principles involved and to
point out the manner in Much,
under the policy of artificial price
Brokers & Dealers
currencies
foreign
.
at
artificial
levels far above their open
market
quotation constitutes .nothing less
than a crudely concealed device
under which billions of American
Telecommunications
Analysis
request
on
1X5 BROADWAY
Telephone BArclay 7-0100
'
'
4
Members N. Y. Security
Dealers
Ass"n^
Place, N. Y. 6
HA 2-2400
Teletype NY 1-376-377
: . 1/
,
Private
Detroit
-
Wires to
Cleveland ; * I
- St. Louis;
Alloys, Inez,
Preferred
Conv.
Detroit Harvester
y.
Co, Com. /
Common
*Twin Coach Company
Conv.
QUOTED
,
•Prospectus on
J-G - White 6 Company
Members New
NEW YORK 5
STREET,
120
Tel. IIAnover 2-9300
Bell
Tele. NY 1-1815
J
..)
!.
i
-V-
i
5rfr *
*
rTTTTTTT
TTTTTjTvT
HA".i r
'
Exchange
York 5, N* Y»
REctor 2-8600
Teletype: NY 1-635
Telephone:
pJU
TT
f
request
York Stock
Broadway, New
ESTABLISHED 1890
NEW YORK 6, N. Y.
!
Reynolds & Co. |
INCORPORATED
37 WALL
Preferred
Preferred
Conv.
—
'p
Pittsburgh
Solar Aircraft Company
SOLD
!
74 Trinity
CORPORATION
—
J
Troster,Curries Summers
NATIONAL GAS
BOUGHT
Teletype NY 1-672
,
>
1
v'
PAPER
Exchange and Other Principal Exchanges
i
.
90c
Members N. Y. Stock
!
Finch
-
tangible wealth is proposed to be
(Continued on page 28)
BULOLO GOLD DREDGING
MINNESOTA & ONTARIO
j*
basic
&
ELECTRIC
1959
_
Teletype NY 1-1610
Digby 4-3122
the mechanisms of the
Fund or Bank, prefering to discuss
each from the standpoint of the
,
New York 6
39 Broadway
Stabilization Fund
& Pfd.
& Pfd., S'%
Exchange
NEW YORK 5
ST.
WALL
64
New
Acme Aluminum
S. FUNDS
Market
for
We
Maintain Active
Goodbody & Co.
70 PINE
be¬
Boards
Canadian Securities Dept.
G. A. Sax ton & Co., Inc.
con¬
were
measures
nounced decisions by the
BROADWAY, NEW YORK 5
as
perpetuate the very conditions it
is proclaimed: to cure. I also pro
pose to make it abundantly clear
that the pegging, of the prices of
addition to
fore the members of the 79th Con¬
Members
is adopted
The second is
which
the
is in
and
gress.
of ex¬
change" for the currency of the
member
nations^ These parities
are
stated in terms of the U. S.
pegging as now announced, each
must inevitably both promote and
tained in the
McDonnell
120
fixing: prices or "parities
loans in America.
The
thus secured is to be loaned
abroad
Quoted
Security Dealers Assn.
St., N. Y. 5
additional bil¬
many
appropriated for their operation.
are also in the making by
the Bank for the flotation of great
public
Common
Teletypes—NY
and
Frank C. Masterson & Co.
direct your attention. The first is
an
announcement by the Fund
79th
Plans
money
Bell
creatures of the
lions of American dollars must be
Argo Oil
37 Wall
Woods
Candy Corp.
,
is that while
.Congress, they are to operate un¬
der the 80th and subsequent Con¬
gresses,
Time, Inc.
Members N. Y.
that
it is true that the Bretton
April 25, 1947
Int'l Detrola
!Wene<md(iompaifti|
Agreement"/
sponsibility for their adoption, and
Chamberlain's letter to Rep¬
In
as:
dollar
suggest,
reasonably,
text of
The
Fund
estab¬
and not un¬
these measures
fully discussed before the
Congress which bears re¬
You
finance.
Mr.
Bank
and policy of the Institutions
now
interpreted? and' claimed
j
,
...
pose
standard.
matters
a r
International
and
discuss. I am
today re¬
you
Stabilization
the
specting
1946 and
17, 1946)
discussed simi 1
I felt disposed to
as
Foundation Co.
Albert Pick
major portion of which was ear¬
marked for Russia and its satel¬
lites, you suggested
Detroit Int'l Bridge
Warner & Swasey
great, illumination upon the
Mr. Chamber¬
ous
purl-
expressing, opposition to pro*
posed foreign loans and- advance¬
ments aggregating $20,000,000,000,
a
Bank
analyzed.
are
actual TTlafkeXit Ou
Chronicle" with a copy of a letter dated April
(R-CaL), in which the financial, economic and political
ago
Monetary
World
Loft
Cal., has furnished "The
J. Z. Anderson,
International
Fund
Light & Power Co., when now
the
Of
effects
former President of the United
>
i»",vT.
a.p
>■■■ t ? 8--L
i
Volume 165,
THE COMMERCIAL & FINANCIAL CHRONICLE
Number 4594
INDEX
Articles
and
The Banker's View of
Some Comments
__Cover
Business—Dwight W. Michener
Cover
Belgium's Remarkable Recovery—Egon Kaskeline—---Cover
No Drastic
Recession—Lionel D.
Edie_,
3
Future—Raymond Rodgers
4
4
\ —Rev. Bernard W. Dempsey
Attention, Mr. Daiton!—Herbert M. Bratter______—_- J— Ll_
5
-----
Anti-Labor Bill—Sen. Robert A. Taft
.6'
JOHN
:
8
_"__J
Richards—;——
on
the Question:
16
to Denmark
British Not Exceeding Expected Loan
Says
as
written
about
the
in¬
flationary
as¬
7
It
B
,
a
9
—
Confidence in Business Outlook Justified—Cloud Wampler.
Treasury's Debt Redemption Policy Weakens Business
10
Financial Position
11
Cutt Sees International Fund
12
Reconstruction Aid—
,
comes
-
great
Further Foreign Lending
from
1914
to
temporary drop at the
was
up
to the
facturing
activity* caused by the
European war, deposits taking a
great jump in the year 1941.
During this period from 1941
through 1945, the corresponding
as
who
John J. Row®
.
.
have not watched figures on total
deposits
in
this
increase
country
in
the
asset
account
banks, - to
counter-balance
(Continued on page 33)
decades, when they arev told
17
''
.
17
Egypt Refused Loan of American Gold.
World Bank Out of Gold.
!
17
1
—
1
Huge Expansion
Germany__'.___l_____l.._—....
18
20
—___
20
...
Holland Plans Sale of $20,000,000 Bonds in U. S._———Holds Production Index Portends Recession—.
Sterling Convertibility Problems,..-
--4-:
British Official Doubts Heavy Sale of Sterling Impends—
New
York
120
| Need for
)
urged.
i
constitute
:
48
Bank
and
Insurance
Stocks......
14
Business Man's Bookshelf
35
Coming Events in Investment Field
8
22
Canadian Securities
10
Recommendations
i
Our Reporter's Report
47
Prospective Security Offerings
45
Public Utility Securities..........
8
Railroad Securities
Real Estate
Dealer-Broker Investment
Einzlg—A. Second Loan to Britain
Unlikely
48
Mutual Funds
18
NSTA Notes
12
Observations—:A. Wilfred May
Our Reporter on Governments....
5
19
Securities
Securities Now
Tomorrow's
model
a
for
business
wanting.
~
a
brochure by Elizabeth
American Overseas Airlines
Republic Natural Gas
Haile Mines
U. S.
y
Reentered
25.
iry
York,
U. S. Patent Office
WILLIAM B. DANA COMPANY, Publishers
25 Park
on
as
N.
Y.,
generally examined and found
WILLIAM DANA SEIBERT, President
D.
RIGGS, Business Manager
Thursday, May 15, 1947
Dominion
Every
Thursday (general news and ad¬
and every Monday (com¬
market quotation
accords, corporation news, bank clearings,
and city news,
mtste
—
etc.).-
of
Bank
$25.00
and
per
Monthly
$25.00
year.
Note—On
S.
La
Salle
land, c/o Edwards & Smith.
-
.
of
exchange,
per
year;
per
of
in
year.
-
•
Record—Monthly,
postage
extra.)
the fluctuations in
remittances for for¬
eign subscriptions and advertisements must
Punta Alegre Sugar
*
MAINTAINED:
Bond & Mtge. Guar. Co.
General Aviation
,
of
one-sided paean of praise under the faithful
which—to mix metaphors-—the
a
Maloney Act
With roseate optimism,
WHitehall 4-5330
25 Broad St., New York 4, N. Y.
WHitehall 3-0272—Teletype NY 1-956
the author tells
on page
*Hungerford Plastics
*Metal
us:
"To
men
are
James H. Acker
!
*Dumont Electric
*
Broad Street
—-
Tel. HAhover 2-5872
Prospectus Available
FIRST COLONY
corporation
52 Wall St.
New York
Tel. HA 2-8080
5, N. Y;
Tele. NY 1-2425
38)
**Stern & Stern
interested in offerings of
Textile, Inc.
&
New ^York 4,
**Offering
*lst
request
Macfadden Publications
New
25 Broad
i
Tel.:
York
Stock
Exchange
Street, New York 4
Members
New
York Curb
135 S. La Salle
HAnover 2-4300
N. Y.
Teletype NY1-2785
on
quarter analysis on request
Spencer Trask & Co.
Co.
Circular
*Public National Bank
& Trust Co.
PREFERRED STOCKS
Corp.
Members N. Y. Security Dealers Assn.
25
Forming Corp.
^District Theatres
sheltered.
engaged in industry, management and public affairs, the
Members
"
the
High Grade Public Utility and Industrial
Inquiries Invited
Prudence Co.
St, N.T, 5
are
wings
and
According to the terms of this booklet, the amendment
to the Securities Act of 1934, the
Maloney Act, and its prod¬
uct, the National Association of Securities Dealers, together
constitute a model in local
self-government, fair practice,
member responsibility, salesman-customer
relationship, pric¬
ing policies, profits and commissions, and self-discipline.
Equipment
Roberts & Mander
fc Y. Title & Mtge. Co.
Ml Taletnw NY 1.2033
DUNNE&CO.
Members New York Security Dealers Assn.
'
honeyed panegyric,-Utterly partisan,
Globe Oil & Gas Corp.
Lawyers Title & Guar. Co.
15 Brnd
v
Sugar
the
In it, the principle of forthright reporting is recognized
complete failure of application. :
■
"
We
*
Bagdad Copper Corp.
Lawyers Mortgage Co.
«Mmbert New York Stock Exchange j
will.
(Continued
i
Newburger, Loeb & Co.
upon
U. S.
Susquehanna Mills
FIRM MARKETS
CERTIFICATES
;
a
be made in New York funds.
TITLE COMPANY
|
Members,
Record — Monthly,
(Foreign postage extra.)
account
*
.
National Association of Securities Dealers
U., S.
Earnings
per
the rate of
135
March
States,
$38.00
(Foreign
Broadway
Haytian Corporation
a public
place into acceptable, nay glori¬
relief, the Maloney Act and its baby, the National Asso¬
It is
New
per year.
Quotation
year.
St.,
Offices:
Canada,
Countries, $42.00
Chicago 3, 111.
(Telephone: State 0613);
A, Drapers' Gardens, London, E. C., Eng¬
Other
in, United
Other Publications
vertising issue)
issue
at
of
Act
Possessions,* Territories and
Pan-American Union, $35.00
Other
4't
plete statistical
jtha
Security, Dealers Assn.
Teletype N. Y. 1-714
Lea Fabrics
"
for its
Subscription Rates
HERBERT D. SEIBERT, Editor & Publisher
WILLIAM
office
post
under
Subscriptions
.
the
Y.
ciation of Securities Dealers.
•j
3, 1879.
Place, New York 8, N. Y.
It is
ous,
5
second-class matter Febru-
at
1942,
REctor 2-9570 to 9576
....
j
9.
page
ever
N.
:
relations effort intended to
(Walter
40
articles
Finishing Com. & Pfd.
Bell System
venture the observation that it is doubt¬
we
ful whether the author
Registration... 41
Washington and Youl............
*See
Member
Exchangt
ST., NEW YORK
20
Copyright 1947 by William B. Dana
Company
FINANCIAL CHRONICLE
Reg.
in
Markets
Exchange
Assoc.
Sugar
Established 1008
Age"
*
....
Corner
Whyte Says)
The COMMERCIAL and
'
Securities!....
Salesman's
Ss
REctor 2-4500—120
an unbiased appraisal of the. Maloney Act and the NASD
Author's claim that this legislation and this Association
reading of which
16
'
Published Twice Weekly
.
Page
r
.
CO.
Stock
Exch.
Coffee
WALL
Members
Latterly, the members of the National Association of
Securities Dealers have been
receiving, through the United
States mail, a brochure by Elizabeth Frazer
bearing the
title "The Securities Business Comes of
Regular Features
.
York
Curb
TEL. HANOVER 2-9612
*
Page
New
York
•
Frazer, reviewed.
Stamped as aj biased effort savoring of paid
advocacy in public relations, Circulation by NASD condemned as
self praise and unworthy indoctrination^Pricing policy decried.
39
48
—
FAME &
Members
New
of
;
«
"The Securities Business Comes of Age,"
22
48
----
Britishers Irked Over World Bank Policies
Quotations Upon Request
J.K.Rice,Jr.&Co.
•
on
Sugar Corp.
the
Self Praise
•
: Program
Szymczak Interviewed
Alegre
manu¬
13
—
Punta
about. 5% of
years, and was followed by
usual steady annual increase
in total deposits
sur¬
many
over
The
the
14
:
World Bank Grants First Loan to France.—
on
WHitehall 4-0551
1921,! after having
doubled
Martin, Export-Import Bank Head, Sees Danger in
Southern California Edison Embarks
WALL STREET, NEW YORK
Telephone:
.
people,
tyank
1920.
iOO
as
pos¬
prise to
11
Food Price Trends Lower—Paul S. Willis.—
Significance of French Loan
99
and.it marks almost the only sus¬
tained decline in total deposits for
ques¬
sible,
than
point by mid-year 1933, but there
had; been a terrific liquidation of
private debt during that period,
our
as
more
total, but by 1923 total de¬
posits had risen 15% from the low
point. A decline in total deposits
began in 1929, and reached a low
supply
jleveloped
inuch
7
$100 Million Advances to Mexico Approved.
They will
quick accurate appraisal.
you a
the
tion should be
U. S. Executive Director of World
as
_
So much has
ticular
Withdrawals,
Czechs See Loan From Export-Import Bank—
IBA Urges Both Debt and Tax Reduction.——
i.
temporarily in
that this par¬
J.—
The Hotel Business—C. Dewitt Coffman
give
of all Commercial Banks occurred
by Dr.
year-end of 1921
been !
pect; of
Snyder
Luthringer Favored
ably
so
ques¬
money,
___
Delay in World Bank Loan
;
v
"Is the Money Supply
Too Large?"
•
upon
tions today,
16
■;
—„——
Some Comments
hurry down to 99 Wall Street
ijvith that obsolete stuff.
total bank deposits practi¬
cally do nothing except increase,
except for occasional, minor, tem¬
porary drops. A drop in deposits
which has been
ion,, one of the
13
——
Truman in His Home Town—Roger W. Babson
Louis K. Comstock Chosen to Arbitrate Wage Dispute at
A. M. Kidder & Co.—Edmour Germain
—.and
that
Howard R. Bowen is, in my opin¬
major5
-
last words"
<♦>-
The question "Is the Money Sup¬
(commented
11
-
.
ply Too Large?"
High Costs—A Building Problem—Carroll M. Shanks.—9
Money Management and Bank Investments
Stock Market. Operating on Pendulum Psychology
/ —G. Y. Billard
ROWE
Trust Co., Cincinnati
;
;
9:.
—E. Sherman Adams.—
J.
(! President, Fifth Third Union
No Depression Unless Government Makes It!
The Present Housing Picture—Franklin D.
3n!
II i
"famous
subject and request that letters be addressed to Editor, "Commercial
and Financial Chronicle," 25 Park
Place, New York 8, N. Y.
____!' 7
—Robert R. Wason
AND COMPANY ———
7
—
<''—Frar}klin Escher
j.
—
on any related
phases of the subject.
Below we
produce some of the responses already in hand; others will appear in
subsequent issues.
We repeat our invitation for comments on the
A Few Facts About the Over-the-Counter Securities Market
\
mmmmmm—mmmmmm
Bowen's article and
'
Why the Scare Campaign?.—Robert W. Coyne.6
Taft-Hartley Bill Is Slave Labor Legislation—William Green
7
an
3
llCHTtnSTtlll
-
.
2
(Editorial)
Recession Now Under Way!—Marcus Nadler
Two Pressing Uncertainties—Labor Strife and Inflation " /
Not
—Additional Opinions Invited
In an address published in the "Chronicle" of May 1 (cover
page); Howard R. Bowen, Economist, Irving Trust Co., New York
City, expressed the opinion that the present money
supply (currency
in circulation and bank
deposits) is not too large and presented
various reasons in support of his thesis.
Because of the broad inter¬
est in the subject, the "Chronicle",has
requested comments on Dr.
2
—William Chamberlain
Self Praise
j
on
----.Cover
The International Bank and World Trade—Charles C. Pineo.
Fund and Bank Will Cost Americans Billions
A Look Into the
the
Question:
*Is the Money Supply Too Large?'
Page
News
Regulation of Labor Organizations by the States
-—Thomas J. Anderson, Jr
(2599)
Tel.: Andover 4690
Teletype—NY 1-5
Albany
Boston
*
-
Exchange
St., Chicago 3
Glens Falls
-
Schenectady
C. E.
Unterberg & Co.
Members
N<
Y. Security
Dealers Ass's
61 Broadway, New York 6,N;Y.
,
-
All Issues
Worcester
Telephone BOwling Green 9-3388
<
Teletype NY 1-1668 \
v
Thursday, May 15, 1947
FINANCIAL CHRONICLE
THE COMMERCIAL &
(2630)
4
ffflflRH
1ST. 1926
By RAYMOND
j
i
'
•
■
check
"will become
those" experts
explain
everything in
quantity the¬
ory of money,
Hoover Co.
took one look at our vast
promptly told us that we
have
wild inflation. And
Lanova*
Sulphur
Michigan Chemical
Minn. & Ontario Paper
real
Old .JPfd.
Moxie
(July)
stood
figure of
the
to
dangerously high
of $37 billion, of
total
didn't
hands
of
Not
which $21
goods in the
alone?r
manufacturers
Figures,
But Emotions
I think this situation is due to
the fact that most economists and
I
and many
mistake
business men make the
relying too much on
-
as
money
books of the banks.
us
>
I
do
can
-
sumption that homo economicus is
rational being. HoW anyone can
view the record of Hitler in Ger¬
is
in
paying too little
living humans whose
dead figures and
a
comfortable
very
outer
Stalin in Russia, and our
planners in Washington and
fail to realize that man is an emo¬
chicken coop
Bayonnei"
Recession Now Under Way!
By MARCUS NABLER*
.
i
~
.
Professor of Finance, New
a
many,
who were unortho¬
best
"The
of
.
long as we had so
and credit in the
dockets of our people and on the
much
Those of
Pointing out
economy will assume a more normal character
Buyers' market and keener competition, Dr. Nadler
our
with return to
!
own
,
.
York University
a
j
contends peak of commodity prices has been reached. Says, how(enough (from the viewpoint
quantity worshippers) to tional, almost hysterical, being far ; ever, there'll be no repetition of 1920 and no reduction in money
from
the- calculating,
emphasize our increased produc¬ removed
j wages, though profits will come down. Warns we are not yet
tive capacity in nearly all lines reasoning creature postulated b.y
| entirely "out of woods" and careful study should be made
of agriculture and industry were the economists is more than I can
present problems. 1;
\
?{
given short shrift by the true-be¬
, e
,!jy
,
lievers.'
The 'peacetim'e implica¬
The Washington planners' esti¬
p'O We are living in a confusing &ge.' Ab'but a year ago we were
tions of our wartime"'ability- to
mate thaL we would have, at the told that'Unless wages were raised we would be in for a very serious
carry a large part of the produc¬ end of
1945, 8 to 10 million unem¬
'
d ep ression.<^
ition burden of the entire world
ployed was just such a quantita¬
Well, we know indulge in any wishful thinking,
seemed to escape them.
The eco¬ tive mistake. In the same fashion
the pattern of the situation is as follows:
nomic implications of our enor¬
most economists have overempha¬
wages
that j The long expected and long ad¬
mous
increase of industrial pro¬
sized the importance of the pentTo be
took place last vertised recession is here.
ductive capacity during the war
up demand and the accumulated
year — every- sure, you don't know it, the fig¬
ures as yet do not indicate it, the
savings of the people. They seem
thing went
*An address by Dr. Rodgers be¬
uniformly to overlook the fact
along pretty national income of the country is
fore the 55th Annual Convention
that the American people have a
well, and now still running at $175 billion per
of the Georgia Bankers Associa¬
we
are
told annum, and employment is plenti¬
(Continued on page 26)
tion, Savannah, Ga., May 7, 1947.
that unless ful. ; The index of industrial ac¬
prices are re¬ tivity as prepared by the Board
dox
Polaroid
of
Purolator Prod.*
the
of
Stand. Ry. Equip-Com.
Taca
Taylor-Wharton*
,
mulate
when
thing!
stay high
Nicholson File
.
have over
at the astro¬ heed to the
16,600,000,000,- hopes and fears; are the ..basic
000,000,000,000 as compared with
prime movers" in economic af¬
100 on Aug. 26, 1939, but the ex¬ fairs. They interpret quantitative
perts did mean that prices would data on the basis of the old as¬
1946
nomical
Missouri Pac.
Pathe Industries
we
billion is in finished
Of course, they
didn't mean that we would have
as
much inflation as they have
had
in
Hungary,
for example,
where the cost of living index in
the
Majestic Radio & Tel.
Mexican Gulf
in prices;
do
$150 billions of liquid assets
current purchasing power in
increase we
they meant
the 50 to 75%
have
now
and
would
they
inflation
said
they
mean
Long Bell Lumber
likewise were
Now, however,; para¬
and
the
hands of people wanting goods,
total of and yet inventories of goods accu¬
Rodgers
Raymond
war-created purchasing power
&
Heinz
produetoin facilities
rapid rate after
more
Why
country?
the
of
terms
;
Hydraulic Press
c\
war,
who
Gt. Amer. Industries
our
f'What can-a mam believe?"'. :
i i Why hasn't ourt huge quantity
bf purchasing power cleared the
shelves of every merchant in the
end
the
the
of
General Machinery
Higgins Inc..
deposits.
At
.
doxically many of these self-same
prophets of inflationary doom are
forecasting deflationary disaster.
.1 v-In the words Bruce Barton used
in
another
connection,
I
say,
our
and
Pfd.
of
.even
overlooked.
total of money
Chicago R. I. & Pac.
Jack
eco¬
conse¬
such
greatly
expanded toas
an
-
legacies, ;**Some of
such as our publfc
the end of the war
quences,
1
Cinecolor
.
predictable in
at
nomic
BrockwayMotors
i
crease
-
continuation of that- in¬
the
and
in¬
more
direct and less
their
Bates Mlg.
Old
left us many
clear, direct and unmistakable,
ebt;: others
kre
i i
-"A
fashionable."
more
hese legacies are
.,
>
on
greatest war in history has
The
Airlines
Armstrong Rubber
Aspinook Corp.*
Barcalo Mfg.*
.
forecasts based on dead figures/ and ascribes
high prices to public's belief prices will come
down. Holds quantity theory of money and credit has been exaggerated and says/ despite ballyhoo, we shall not have long or
severe depression and no repetition of 1920.
Foresees, however,
heavy backlog of business failures and concludes price structure
is vulnerable but price declines will benefit country and cost cutting
American Hardware
Amer. Overseas
York University'
Dr. Rodgers criticizes
present
i Power
RODGERS*
Professor of Banking, New
.
BUSINESS BUZZ
the Future
A Look Into
•"
,
Textron
*
■
Wis. & Pfd.
■
Unson Corp.*
U. S. Air Conditioning
United Artists*
!
United Drill & Tool "B"
■
Vacuum Concrete*
<
Warner & Swasey
-
Crowell-Coilier
American Hardware
Amer. Gas & Power
Cent. States Elec. Com.
Derby Gas & Elec.
Federal Water & Gas
Art Metal Construction
Grinnell Corp.
Bowser Com. & Pfd.
Republic Natural Gas
Buda Company
Tennessee Gas & Trans.
-
Quoted
Members N. Y. Stock Exchange
115 Broadway,
New York
Telephone BArclay 7-0100
or
Circular
upon
again,
well,
are
in for
period
of
inflation.
In
other
don't
words,
nowadays you
what to be¬
the saying goes,
really
!
and Other Principal Exchanges
105 West Adams St., Chicago
Teletype NY 1-672
tProspectus Upon Request
*Bulletin
1
i
Goodbody &. Co.
Standard Gas Elec.
Tide Water Pwr. Com.
Sold
Nadler
wages
know
lieve.
Southwest Natural Gas
v
-
serve
a
as
Bought
Puget S'nd P. & L Com.
Of
raise
we
Or. Marcus
But the fact of
you
the matter is, if
look carefully, if we do
*An address by
fore the American
;
tion, New York
not
Dr. Nadler be¬
Spice Associa¬
Fashion Park, Inc.
twice earnings)
Soya Corp.
Tennessee Products
.Members NY; Security Dealers Assn.
of America
Consolidated Dearborn
Prospectus on request
120 BROADWAY, N.Y. 5
Buff. 6024
Bos. 2100
SIEGEL & CO.
Incorporated
ENTERPRISE PHONES
*
know very
jj
.
well, that building ae-,:
tivity, the construction of homes
and factories, plays a very impor¬
The
Seligman, Lubetkin & Co.
Ohlcasrn fir Tyx> *nireles "
Hartf'd 6111
Building Activity
reason
why
the construe-,
ihdustry is not going ahead,
as generally expected, is primarily
due to the fact that costs are too
tion
Direct Wires To
.
f
What is of greater importance
to business in general is the fact
that building activity is not ma¬
terializing.
In fact, building ac¬
tivity, instead of increasing at tjhe
present time, as it should, is ac¬
tually decreasing^ And as ybu
tant role in our economy.
i-x/5»b-i^87-1288;
Pnira
degree,
Analysis upon request
REctor 2-8700
N.
of the highest
at the same time, if you
talk to people who are, say, en¬
gaged in the production of ladies
apparel, or in cosmetics, or in
frozen foods, and tell them that
the country is very prosperous,
they will just ask, "where is this
prosperity?
I don't see it.
My
men
are
working two or three
days a week, and the demand fpr
my products is decreasing."
it
prosperity
reflect
i
ACTIVE MARKETS
(Stock selling about
System is 189 or 190.
these figures, therefore,
While
City, May 5, 1947.
request
I
Governors of the Federal Re¬
duced and we
Members
41
Broad
New
York Security
Street, New York 4
Dealert Association
89 Broadway,
N. Y, 0
•
Dlgby 4-2870
,
HAnover 2-2106
,
Teletype NY I-1942
,
Building materials are too
high, building labor is too high,
high.
'
j'
(Continued on page 27)
•
,1
.Volume 165
THE COMMERCIAL ft FINANCIAL' CHRONICLE
Number 4594
Delay i> World Balk
Loai to Deemark
on..
World
CORROSION OF THE INVESTOR
Security Provides Escape From the Squeeze of the ;
High Cost of Living, Monetary Policies .and Taxes
>
If
long shot takes your fancy,
announce
The recent advances in the London securities markets interest¬
ingly highlight the position of the would-be capital-conserver in this
worldwide era of socialization and inflation.
During the current
desk, around this month-end.
week
tee
has
minimized
the
1,
shaving from 20%
,
reduction
(2)
and
phasis will fall on double taxa-]
tion and the excise tax system.!
Britain's creditors about a
her wartime international
debts has caused; another sharp rise both
in
British equities and fixed-income securities.
Such upward trend in share prices in England
Up for scrutiny also will be iax->
has
ing of stock options.
to 15% the
rvote
these
House will
^
:
President
the;
changes,
accept. them.
can
if
~
he
next
watch
for
the
Senate
is
OK
situation
converse
Truman into
r.
a
might
ad1-
prevent
swallowing
to
*
*
-
'
"'
*
•
soft
drink
!
■
makers
haunted by that old witch
excise
Federal
There
ages.
A
certain.
more
ex¬
of tax
form
some
calculated
.
The
'
•
was
sidered
but
rejected
House
Ways and
vocated
tax
Means
—
the
May 19 will be largely limited
Means
Committee
to- business
The
to
relief
be stressed in the
commence
That
to:
is
1948 general
coming
(Continued
•,
discussions.
on page
40)
'
.'
\
World War 1.
-
.
v
.class conflict basis that
*r
•
we are
we-wfere
.tain
VBiihilarj^f in the United States
f allacious
on a
selves
uo
in
necessary
This
to need all of
there
real
Rev. B. W. Dempsey
because
finds, himself
-
circum¬
and inexcusable;
happens
to
a
probable
1947 and
*Ari
: The
.
-
-
r.'/s---' i
columns
some
Wash¬
ington for good. It is believed that
his
will ?be
successor
-
R.
Gordon
Abitibi Power & Paper^
.• <
'
*
Bell
AJgoniaStool
;
Telephone of Canada1"
Consolidated Mining & Smelting
Famous Players of Canada;
-*
.A
j•
«
"
*
r
i
<
Minnesota- & Ontario Paper !;
^
Noranda Mines*
Power!}
—Shawiniga»-Water'&
agdlhst * ah actualr dechtie :©f apputt 10% r in* the,, common stoeks jljie;would be^likeky tos havevheldi (jas. concluded from the, action of the;
Dow-Joiies. Average». Of industrial shares ). ~ The bondholder,. in ;addition to being hit toy the higher-living costSj -would have-suffered, a
16% decline in the yield of corporate bonds-he actually held (through
;
"
(Continued on page 40)
HART SMITH & 00.
5* WILLIAM
HAnover 2-89M
ST., N. Y. 5
Bell
Teletype NY
1-395
!
.
American Maize Products
Boss
Toronto
Montreal
New York
.
Seminole Oil & Gas
Manufacturing Co.
Corporation
Electric Bond & Share "Stubs"
Common
Stock 2 % -3
^
Warrants
-
%
Information oh request
Bought—-Sold—Quoted
FREDERIC H. HATCH & C0q
63 Wall
INC.
L H. Roller & Co., inc.
Members
1888
111
SECURITY DEALERS ASSOCIATION
Bell Teletype NY 1-897
Street, New York 5, N. Y.
Y.
N.
Security Dealers Ms'n
Broadway, New York 6, N. Y.
NY 1-1026
BArclay 7-0570
Corporation
Specialists in
Machinery Corporation
We wish to
of
Airlines, Inc.
announce
our
—
:
SOLD
\t i
—
<
on
May 14, 1947.
Y. City
Mexican
(.
Gulf Sulphur
/
;
£4.^
Number^ is BArclay 7-3550.
l^orporation
iNcoiforated:
BR0ADWAY;NEW YORK 5, N. Y.
;
,
Teletype: NY 1-583
Brokers
Wm. J. Mericka & Co.
'
v
,
offices from
QUOTED
>eatic
Telephone: .BArclay 7-5660
Domestic, Canadian and
Philippine Mining Issues
Our New Telephone
BOUGHT
the removal
29 BROADWAY TO 150 BROADWAY, N.
International Cellucotton Products Co.
in these
reported
time ago, this week leaves
address
America, Kansas City, Mo., May
8, 1947.
American Overseas
120
of the World Bank,
nation
Hoving Corporation
General
/
impending resignation was
,
by Father Demp¬
sey before members of the Mort¬
gage;
Bankers
Association
of
Metal & Thermit
for.
$30 million for 1948.
tive director
whose
Investor's Squeez&Between High Costs and Lowered Income!
MEMBERS N. Y.
•
the
Grigg Quits Bank
.,
-!
■■f
:
Established
t
get
million
soon
$20
Sir James Grigg, British execu^
Tide Water Power
adjustments to be made.
will
Denmark
see;
are some
Like all virtues and good quali¬
ties, capacity for adjustment can
.fop, overdone. Man can get Used
to situations and habits that he
fti
the Bank.
^^toe^vest^s^i^C'-effortS to-protect-his" capital arid
in
wartime. War imposes direct and
immediate adjustments on every¬
body, and most obviously on the
boy in uniform, but in one form
or other oii everybody. You find
yourself e a t i n g; oleomargarine.
Walking to work and wearing i a
(Continued on page 22)
,
we
it' but j he
in
would
prejudice Denmark's chances with
I-
situation her
stances he would haver called un¬
adjustment. is
a work of the
healthy or¬
ganism and
we
are
going
that
soon:
living' comfortably,
,
capacity for
have
a
something* about;
doesn't and he
by thewe
into:
knows is bad and:- he -intends^ to
do
the crisis*. This
It
net result
►
atei,« He
that they
to .the.JBank
intend to do nothing which
shouiid^not allow hi^elf to toler-,
~our~.
call
can
We'thus
adjustment* :his:reaIvdr«v^^acttroIVihcbmeJf
cer-^
resources
the other* hand have made
on
it known
^
.confronted: with gbnuine difficulties, which in prospect
s-omreti rn.es.;•
.astound
but
an
that, ip-his worldwide desire to -escape. the severe
ipoHticalmonetary obstaclesr; the investor has. turned to common
stockS;''.While!this cbrreetly describes his behavior, it leaves open the
question Of -the -success of-such ipolicy. • So -let- us take ..a. Jobk at the
;
prevent^ cooperation for'the coihmon good.
not: bear,> We: >;
been
unwilling to give such assurances
total
.
.
.
of New .York.shows that at the end of-1945. the spread: between tlf€
yields, on common stocks and cqijporate and ■ Gov^nment Bonds w^;
narrowesr' thalf^at
previous time the records" were^, available.,! i
■
could**
we
The • British. appear to have
.
Says hasic uncertainties of labor-
f; One of man's special blessings is his capacity for.
When
its claims of .£.35,000,000, against
Denmark,
claims
reoresenting
trade balances in Britain's favor.
upward trend in the relative
popularity ofr common stocks has increased considerably right
through, me- War years:. A study made;by~the~Federak Reserve Banjk
of rotation cloud outlook, and * warns
against owners, workers- and government proceeding
~
comparative price-
prices had f of :u long time been secularly- rising -in. relation to
industrial profits: r
*
«
; ;
Finance,-St.LouisUniversity j
"
roanagement relations and
delay has
recent
earnings ratios/ arid of income yields, shows that Europeans in the Munro, British Minister in Wash¬
Inter-War period were, far ahead of Americans in turning to common
ington.
The Bank thus loses a
stocks for capital investment.. Thus between .1919 and 1937 the ratio
colorful, personality, 1.
*
of common stock; dividend. yields to .government bond yields was
lower in France; Great Britain, Austria, Italy, and the Netherlands,
than in the United States; and this was similarly true of dividend and
corporate bond' yields since the' turn ot the century . And a study
made by the-London tfEconbmist^ in 1938 show.ed ihat conimon stock
Father Dempsey contends nation has .been- saved from. postwar
collapse similar tor that of. 1020 .because quoted prices, Wenot
risen as fast and people .spent their savings at afaster and steadier
fate than after
the
World Bank's- desire to
defense really
rentier became increasingly scorned.
study made by this columnist in Europe of
A
j
By REV. BERNARD W. DEMPSEY, S.J.*
-
of
have the assurances of the British
Government that it Wiir Dot press
or any
The status of the bondholding
a
.
of the cataclysmic German in¬
itor class, and a falling interest rate—in addition to "monetary
instability; the capitalist again sought refuge in common Stocks,
and
Two Pressing Uncertainties
Labor Strife and Inflation
-Regent, School of Commerce and
Cause
been the
loan;
other class of security, mainlj
because of the impact of a great variety.of state controls. But we
find that in the subsequent decade, in all European countries, due to
the persistent encroachment of a variety of political and economic
elements—including the undermining of the legal rights of the cred¬
con¬
estimated
Treasury has
course
flation of the T920's there-was no
several
Ways
In the
afforded to the holder of shares
and resisted—again
during
slated
May
a
—
during
one
Wilfred
A.
times since then. It will be ad-:
hearings
The Recurrent Recourse To Equities
are
their bever¬
on
World War I. It has been
elbow
veto message.;
is
.
vote
signal. Some Democrats will
back the bill. If they're important
in number, and influence, Presi¬
well-maintained; over the long-term,
Times" index of ordinary
"Financial
36% above, 1935 ;prices, 11 % above a
and 5^% over a month ago. American
common stocks, as reflected in the Dow-Jones
industrial average, in. the samd 12-year interval,;
/ have likewise advanced, but by only 22%.
V
This leads to curiosity about the stockholder's
ability to secure protection against the course of
inflation, and the relative welfare of stockholders
versus bondholders in various countries.
written into
revenue
bill. Alsb
•
a
dential
shares
the, Big Three from
the entire tobacco industry.
the long run, political mo¬
tives will dictate the President's
Watch
for
tobacco
some
the
to
on
year ago,
guesi
a
been
Thus
m^ajr be
year's
justment
In
default
simultaneously.
But
fpf
reported elsewhere in this
paper, the French loan was JAje
first to be concluded.
reasons
.
levies
cise
,
for
previous
but reduction of
The
wishes
-—sign this compromise without
losing face.-
decision.
too
It's
I
!
-
i*'*'-
*
$79,728 to $302,396. The Senate
will
warning
partial
taxable incomes of
on
Dalton's
tax revision law. Hearings em-i
veto!
the tax cut effective date from
January 1 to July
Chancellor
^
(1); advancing
potentiality , by
i
i
The Senate Finance Commit-
;
you can now
to Denmark woyld
Later! if expected 4o
the Danish and French
,
loaris
bet the President
won't veto the tax reduction bill.
The odds will narrow shortly,
may be close to even when the legislation drops on the President's
a
loan
be* its first.
No Class erf
—
originally intended
Bank
that its
THE WORLDWIDE
(Spe¬
The
.WASHINGTON, May 14
to
the
"Chronicle")
cial
By A. WILFRED MAY
Behind-the-Scene Interpretations
from the Nation's Capital
"In
&
Dealers
62 William St.
Now York
^
"Member" Cleveland Stock. Exchange.
WHitehall 4-2422
.
Branch Office
NEW
YORK
CLEVELAND
j
113 Hudson St., Jersey
1
5;N,|1L
Teletype
NY 1-26
Telephone
;
"!1* ?|
_
Investment*. Securities
-
City, N, 3
1
THE COMMERCIAL & FINANCIAL CHRONICLE
(2602)
6
LoMell i Co. Elects
|
Moffat VicWres.
j
jplace, New York City, dealers
XJnited
and
States
municipal
bonds,
elected
.toward
of
the
,
scaling down sterling debts.
ments, classifying them
disposition
doorstep.
may rest on our
BALTIMORE
for disposal
the
Preferred
Boston
Railroad
to
Coke
&
bal¬
ances,
some¬
times referred
Bayway Terminal
Coal
of
"blocked
sterling"
Manufacturing
Davis
Britain's
as
sterling war
debt.
Holding
;
i
hearty
endorsement
of
the former
Prime
STEIN BROS. & BOYCE;
Members New York & Baltimore Stock
\
Exchanges and other leading exchanges
.
ST., BALTIMORE 2
Minis¬
ter, Conservat i
Herbert M. Bratter
Bell Teletype BA 898
Leader
v e
.
"
*
.
-■
.
*
,
,
.'
f
*
mission^
'
t
*
the
.
».,V' X"
J
*
in London.
The
the
now
Indians
held
additional
and
chequer has taken
stance
new
a
BOSTON
PHILADELPHIA
H. H. Robertson
No
Lend-Lease
and
in
effect
an
Prior
use
ancient mariner who is therefore
'Memos
Traded in Round Lots
Members
Philadelphia
York,
New
and
Walter J.
Connolly & Co., Inc.
24 Federal
Street, Boston 10
Tel. Hubbard 3790
Walnut Street, Philadelphia 2
1420
New York
j
Tele. BS 128
.
Los Angeles
/
<
Pittsburgh, Pa.
Hagerstown, Md.
N. Y. Telephone—WHitehall 3-7253
Private
Wire System between ~
Agreement of December,
nancial
Botany
Empire
Continuing Interest in
3.30%
Preferred
Southern Gas
Stock
arguments.
into
Nazareth Cement
DES
Phone 4-7159
'
9,
IOWA
Bell Tele. DM 184
Stock Exchange Bldg. Phila. 2
RIttenhouse
two
Teletype
PH 73
6-3717
SPARTANBURG
Southern
American Air Filter
American Turf Ass'n
f
of
the
Indians
Textile Securities
India,
case
de¬
in
Conference
1944 the Indians wanted the
pro¬
Fund to gradually
India's sterling balandes
World
posed
other hard
into dollars
or
cies.
was
There
curren¬
in fact consider¬
in the
Government, until the
still
growing
sterling
balances
had become so large as to make
their inclusion in'the scope of the
Incorporated
(Established 1892)
L. D. 51
MONTGOMERY, ALA.
Teletype SPBG 17
billion;
currency; $25 bil-■ accounts,' $49 ' bilf
lion; savings- and loan, $8J/2 bil¬
lion; postal,, savings, $3-% billion.
This $192 billion, mind you, com?
pares with $56 Y2 billion as of Dec,'
31, 1939.
7
*':V
(3) Income- payments to indi¬
savings
viduals
current months
in
(Continued
:
on page
46)
.
{;
on
Sats. in Summer
,
CHICAGO, ILL.—Directors of
the Chicago Board of Trade have
voted
to
close
the
and
cotton
the
securities
trading
operations
On
$500,000,000 earmarked in the
bank
did
China."
for
what
Asked
have exceeded
now
original
ex¬
pectations
tc
any great ex¬
China,
tent.
is
"It
the
estimate
To
much
replied:
know
you
"
which the press
with.
The
negative.
not
is not acquainted
answer
.
Snyder stated
sioner
,
.
OUt^Joh" W Snyder
of line."
stated that
received
any
report on the progress of
lend-lease negotiations with RusSnyder
Treasury
not
had
sia."
:
Asked for plans as
to the lend¬
ing capacity of the Export-Import
Bank after June 30, the Secretary
not been dis¬
Saturdays, beginning May 31st and
by the National Advisory
Commission, adding: "There is no
continuing through September.
change
cussed
in the
policy of the Ex-
a
has
the fact that last
offering was $1,200
$1,100,000,000. Snyder
said that the maturity of some
certificates had been given some
Regarding
bill
instead
of
"We
consideration:
about
asked
When
weeks.
Treasury
has
estimates
that
June 30-a.
the
STATE AND
Municipal Bonds
or
of
Quotes call TWX Sp-43
Exchange, from
A.M.,
'
all issues
Std.
Pac.
10:45
Time:
on
to
Flocr
MUNICIPAL BONDS
CORPORATE
there
will
be
Britain's
his
and
the
LOCAL STOCKS
at
other hours.
Snyder
attitude
11:30
Sp-82
remarks
"war
thereon
British
tried
have
creditors
STANDARD SECURITIES
THORNTON, MOHR & CO.
Montgomery, Alabama
Telephone
3-6696
&
L. D. 53
Teletype
MG 84
Standard
of
Brokers
-
Peyton
Stock
-
Government,
to
state
in
as
very
I
dis¬
to consult with their
and
negotiate
settle¬
they, should-make them. That is
Exchange
a
Spokane
Dealers
its
ments. We have not indicated how
CORPORATION
Members
last
"The
observed:
bit. They have asked
one
tinct terms,
Inquiries Invited
on
United States has not changed
BONDS
\
surplus
surplus of $1,250,000,000.
Concerning
week,
"
rather sharply in
Snyder said the
not
changed
its
down
coming
recent
to
have
all those elements."
measure
debts"
of Orders
been
not
;
week's
ATLANTA; CA.
SECURITIES
the
Commis¬
new
Customs
of
selected.
in
was
.
during his press 'conference
Immediate Execution
!
an
first
/Secretary
let
;
over
going to be
tOO
merely
to
have
inquiry as to whether
the NAC is discussing any loans
a
year. ago.
is
Snyder
will
about that."
little larger
than
earmarked until that date for
"We
NORTHWEST MINING
For
,
happens after June 30 to the sum
But; it
SPOKANE. WASH.
ALABAMA
at
are
38)
on page
had
said the matter had
SPARTANBURG, S. C.
$42xk
.jion;
not think they
a
Close
1st Floor,
Bell Tele. LS 186
Snyder
American
Chicago Board of Trade to
A. M. LAW & COMPANY
as
securities^
port-Import Bank up to now. Nor
there been any discussion of
a y,
Secretary of the
Treasury J. W.
the
Properties
high of 192 billions Of dollars
follows:
Government
Britain's "War Debt" status.
able support for the idea
I
™I BANKERS BOND £2i
Long Distance 238-9
those
d
sini-
Murphy Chair Company
Kentucky Home Life Bldg.
; LOUISVILLE 2, KENTUCKY
j.
they
and come
WASHINGTON, May 14 (Special to the "Chronicle")—Asked about
British Loan withdrawals, now totaling $1,750 millions, at his press
conference to3>-
Egypt and
variety of
that equity
BW
(Continued
Co.
This reduction has been
Expected Loan
Withdrawals, Says Secretary Snyder
for substantial
AND
Varnish
ent time.
Treasury Secretary also discusses Lend-Lease and
These may be divided
parts: those arguable
the
Before
Girdler Corporation
Reliance
I have
r <Tart;bM: talk by Mr. Coyne
;.
patt
debt.
In either case, the
all along have disagreed.
convert
LOUISVILLE
Consider H. Willett
case
by
stated
ply
Byllesby & Company
Telephone
as
harbingers;, for
f"
-■
Scale Down
mands cancellation'of a large
H. M.
BUILDING
MOINES
For A
with statistics, and the more
PHILADELPHIA OFFICE
EQUITABLE
held
ances
Publishing Co.
Common
"far
a"- fine tooth comb
Indians launch
others is based upon a
Warner Company
Meredith
as
>
British Not Exceeding
scaling down of the sterling bal¬
Sterling Motor Truck
Stock
Case
The British
Steel Co.
Pittsburgh Rys. Co.
Iowa Power & Light Co.
economist
optimistic
i
The
INCORPORATED
Empire
from
the
peak
of
billion in February 1946 to
about $258 billion as of the pres¬
$279
Coyne
before *the- Life Underwriters As¬
the ques¬
tion is less appreciated in this
country than that of Britain, as
may become apparent when short¬
Board
Mills
these
The Indian viewpoint on
their shafts at Mr. Dalton/
WHEELOCK & CUMMINS
W.
,
ly at London the
Box
of
some
decreased
Robert
the evolution of
sociation of New York City, New
the Bretton Woods Agreement fdr
.York, May 6,1947.
,
>
an
International Monetary. Fund.'
with
and
,
Philadelphia, New York and Los Angeles,
DES MOINES
American
the
of major storm signals. They ig¬
nore or brush aside with disdaih
in these : columns-. ,q£
The story in fact is tied
in with the British-American Fir
1945,
York Curb Exchange
as
(1) The National Debt has been
May 8.
Los Angeles Stock Exchanges
Also Member of
New
ainty as
Which they'extrapolate ingenious¬
reported
as
BUCKLEY BROTHERS
list
would
factors:
un-
ly and .whip up to the proportions
John W. Snyder was .tasked
about this at his press ■conference,
Request
on
Prosperity Factors
I
witir specks of imperfection $63 xk billion; checking - accounts,
up
ury
Preferred
period ahead.
and with funereal intonations
the neck of the
his feet.
Boston & Maine RR.
look
looks to the ;been able to ascertain has been in the area -of bank
borrowings',
least moral able with
precision to ascertain considered the most inflationary
support in the scaling down of the causative factors of a depres¬
part of our debt..
rX\those
sterling
"debts"
on
the sion and isolate them from the ef¬
(2) Liquid, assets in the hands
grounds that they are comparablte fects. Yet with bland assurance of individuals are at an all 'time
prevented from "getting back oh
Secretary of the Treas¬
Company
"viewing
n
future holds.
.
the
to
disaster but have adequate reason
to see good times for a substantial
immedi.a te
down." Brit¬
too obvious and do not
are
themselves
seriously and be guided in our
attitude by some factors that in¬
dicate we are not on the brink of
to jn-
what
to
■
,
•
,
campaign without
scare
..
ain now, as all along,
United States for at
to
Eastern Corporation
t
a
column of newspaper space.
with alarm" type of thesis.
I think it timely that we
people a feel¬
ing- of
dis¬
c e r
an
albatross around
Southwestern Public Service Co.'
lend
mists,
and
of
on
factors
near
erica
m
trust
constituting
substantially scaled
the Ex¬
A
sums
Churchill, the
Gov¬
busi-1
on
.
still in the
by
ported to have described as "fan¬
commitments"
and
culated
by others Mr. Dalton is re¬
tastic
'
speech by
politicians o f
varying qual¬
ity
are
cal¬
I
held in London
'■'•■• '
,
speech after
than £3,000,000,000 of
more
balances
attitude
an
known factors.
paper read by
econo
ber, will undoubtedly voice
India's anger at the blunt remarks
Mr. Dalton
made in addressing
the Brazilian Chamber of Com¬
merce
on
".We are in the midst right now
precedent in my experience. Column
paper
after
real
'
bout,
7
.
<
returned
a
conditions based
11
Winston
Chancellor of
ernment's
Urges cessation of ghost chasing and calls for
ness
"unreal, unjust and unsupportable burden" which must be "very
Labor
New York Telephone BEctor 2-3327
Mr. Coyne deplores economists' scare campaign and cites facts i
and figures indicating a continuation of prosperous conditions. '
V
i
!'
'W:
Executive Director, American Theatres Association
later this month,
with the Indians who, under the
leadership of the Finance Mem¬
Now
with
Preferred
• S. CALVERT
^
to lay th*.<$>groundwork for
\
Artkraft
.
statistical and moral, and predicts final
as
weeks have elapsed since Sir Wilfred Eady
empty-handed from his visit to India and the Near East on
time.
j
...:
Predicts that India's negotia¬
Some
-
some
By ROBERT W. COYNE*
!
I
that Britain expects U. S. moral support
asserts
corporation. Mr. Moffat has been
with the firm for
'
tors, regarding Britain "disgustingly affluent,'' will quote Keyenes'
promises.
Mr. Bratter lists the prospective India-Britain \ argu-
announce
Vice-President
a
Correspondent
in)
Jr. has been
r
-
Government, state
that Daniel Moffat,
~\
By HERBERT fit BRATTER
■
Lobdell "& Co. Inc., 20 Exchange
Thursday, May 15, 1947
Underwriters
Established
Building, Spokane
Branches at
Kellogg, Idaho and Yakima, Wn.
RHODES-HAVERTY
BLDG.
Teletype AT 288
matter
the
1894
ATLANTA
Lone
1,
GEORGIA
Distance
108
two
ments
of
negotiation between
countries.
may
or
scaling down."
may
These
not
settle¬
involve
THE COMMERCIAL & FINANCIAL CHRONICLE
^Volume 165 ^Number ' 4594
Luthringer Favored
as
Counter Securities Market
Of World Fund
By WILLIAM GREEN*
Special to
labor law as promoting slavenation's industrial life. Says
purpqse of legislation is lo weaken and destroy labor unions
attacks proposed prohibitum of < closed shop and industry-wide
and
^bargaining, together with right given to
injunctions against them.
free trade
Tf
unionism
survive
shall
of
nation today is whether
effectively.
and function
lation becomes law and wages are
legisla¬
tion
be¬
now
Do you believed lat
forced down.
is-enacted into
of American work¬
ers, afflicted as they are today by
continuously rising prices, would
law, not 'Only
be
the
you
the great mass
ing considered
by
Congress
unions,
but
e v e
•
as
ry
a
Do
to sustain the blow?
able
think
American economy
our
whole would.be able to stand
Am erican
the shock of
citizen who
purchasing power? People would
just have to stop buying many of
the
things they need, business
would shrivel, production would
works
for
■
living
be
a
would
adverselyv
affected
drop,
by it.
lose
The first
sult
wage
cuts
down,
the
members
Green
William
be
This not
line,
because in
the
union
non-union
for
well
ers,
dangerous depression.
another
all
as
millions Of workers would
their jobs and our country
would find itself bogged down in
re¬
WOUld
drastic .cut an mass
a
as
exaggerated picture
presented. -It is the nat¬
ural and inevitable-consequence of
union work¬
the
modern industry
level sets the
tear
wage
standard for all other wages.
Suppose that happens.
an
have
I
,present drive in Congress to
down the unions and grind
down
the
workers
tive legislation.
Of course the
Suppose
the Taft-Hartley slave-labor legis-
through puni¬
of
sponsors
effect
the
Fund
held
this
legislation deny any such purpose.
by Mr. Green over They claim they have a mandate
nationwide NBC radio hookup, from the people to adopt legisla-
tive-director
be
14.
on
that -alternate
ommended
him,
the
United
States.
Dr.
White—reportedly with the
support of Mr. E. G. Collado, for¬
American
mer
director
executive
bf the World Bank—beiieves that
Mr.
Lutheringer has the best qual¬
ifications for the post. Luthringer
formerly
was
the staff of Mr.
on
Collado, when
the
latter
in
was
the Department of State.
The
suggestion that Mr. Luth¬
ringer is the only
equipped to
one
represent the United States on the
Fund is not accepted in all quar¬
that
son
could
the
Some
desired
rea¬
continuity
had by retaining Luth¬
be
ringer
as
rector
and
alternate executive di¬
appointing
a
new
a
May 11, 1947.
Not
(Continued
20)
on ;page
Special to
By HON. ROBERT A. TAFT*
!
U. S. Senator from Ohio
Sponsor of Senate Labor Bill denies proposed
measure
is in
oppo¬
bring lasting labor
to
The
the
and contends it
Senate
Senate
in
for purpose of aiding
is
Relations
Labor
Bill
will
be
substantially its present form.
which
been
a
vote of
7-6 in
national
is in danger.
a
an
can
be
de¬
efforts
; * The bill has
been violently
strike!
attacked
ings for
I
b y
been
Robert A. Taft
it
abolish
all
union shops,
collective
bar¬
gaining.
Nor did the amendment
which I offered propose to abol¬
ish
nation-wide
gaining.
the
to
important, is the Over-the-Counter Market?
gained from the fact that, during th©
.
<£-
,
the Na¬
year,
largest New York Stock Exchange
tional
Quota-,
commission house in the country,
tion
Bureau
Merrill
Lynch, has this to say on
one of its recent
publications ("Off-Board Secur¬
ities Market"): "One of the most
vital but least understood sections
of the investment business is the
service
used largely
that
(a
by investment
dealers)
quotes around
subject in
securi¬
ties, and that
frequently,, in
a
single day,
off-board market.
there
equals
25,000
p a
sues
-as
5,000
rate isEseher
Franklin
What
with
stocks
traded
listed
the
on
New
ment
as
the
New
but
which
knows exactly, but
anywhere from a
least equal to that of
run
counter
Stock
daily
the
to
trade
extent
(Continued
The
great.
as
York
hundred million dollars.
other market in the world to
twice
place, U. S. Govern¬
which are listed on
bonds,
estimates
volume
Over-the-Counter
the
Market?
to that, no one
at
of the securities
some
are
in
In the first
Well,
volume?
about
Exchange,
over-theseveral
of
Then, of
on page 37)
for -from
18
collective
bar¬
It has been attacked by
loan
Czechs last
year
to
36
on
duck."
be
behind
gotiations
as
sought
ters'
years.
They
remedies of their
screaming
(Continued
suggested
loudly
port
on page
.21)
pleased to
to,
ne¬
announce
Co. to conduct
Thomas
E.
Hicks b Price, and
partner of
a
the formation of Thomas E. King b
general investment and brokerage business.
a
King b Co. have taken the
merely because
but
space
formerly
occupied by Cayne, Robbins b Co., retaining all personnel in¬
The present wire
cluding Roy B. Sundell and Robert K. Belt.
and New York remains.
system to Cleveland
the
because
to be used for
was
Bank
field,
thomas e. king & co,
re¬
has
as
turned
now
A
corporal-ion
39 South La Salle Street
over
activity in that
CHICAGO 3,
witness the reference of
RANdolph 8924
Denmark to the World Bank when
ILLINOIS
Teletype: CG 616
-
it sought a reconstruction loan.
Czechoslovakia has
before
the
$350,000,000.
no
without
King, formerly
Ralph M. Bloom, formerly a partner of Cayne, Robbins b Co.,
construction, and the Export-Im¬
than
They are
own.
the
by
"a dead
result of develop¬
meeting,
$50,000,000
cover
relations
now
suspension of
a
Thomas E.
ments in the Paris foreign minis¬
they have opposed all attempts to
now
the
nnouncement
are
The larger
so.
is
This is not
a
reform labor relations for the last
ten
months.
the appli¬
of the irritations which seemed
tion
labor
Govern¬
Export-Im¬
a
applica¬
for
Bank
This is intended to
three-year program. Less
third of the amount is
pected to be
year,
an
World
needed
according
to
in
one
the
ex¬
FORMATION OF
ANNOUNCE THE
WE
first
observer
gersten & frenkel
interviewed by the writer.
MEMBERS
NATIONAL
\ £? An address by Senator Taft
nation-wide radio hook-up
over
a
over
NBC, May 11, 1947.
NEW
<
United
ASSOCIATION
YORK
SECURITIES
OF
SECURITY
BROKERS AND
Kingdom 4%, 1960-90
DEALERS, INCi
DEALERS ASSOCIATION
DEALERS
IN
Rkodesian Selection Trust
"
j,
(Inquiries invited
on
all
INVESTMENT SECURITIES
Telephone
District Bonds
NEW YORK
BROADWAY
150
Gaumont-British
Drainage
Rector
2-8171
Scophony, Ltd.
F. VZ.
V
-
iSecurities Dealers,.'Inc.
41 BROAD
Members
'
STREET, N; Y. C.
Tel. BOwling Green 9*7387
Tele. NY1-493
«3
N.
Y.
Stock
115 BROADWAY
Telephone BArclay 7-0100
N. Y. 1-1932
IRVING
GERSTEN
Securities Dept.
Goodbody & Co.
DIDRICHSEN
Member National Association of
\.
British
inquiries/to Chas. J. /Mullally
7, N. Y.
Teletype
LESTER FRENKEL
Defaulted or-Otherwise
Address
larger
Over-the-Counter Securities
This
.
How
a
is
exchanges
combined; in volume of trading it
or
exceeds all organized
exchanges."
York Stock Exchange.
any
it
stock
-
as
compares
1.348
S.
U.
all
In the number
traded
securities
than
are
quoted
many
of
$20,000,000 cotton
a
$50,000,000
of labor leaders, and
experts.
The
labor leaders simply opposed all
changes in the existing laws, as
of
nation-wide
and
six weeks,
employees,
b y
because
does not
applied
to the World Bank
and listened
to the evidence of employers, of
d ustrialists
n
wish to
men
Our committee conducted hear¬
leaders.
has
health,
election held to
mediation
made and
termine whether the
attacked
or
period of sixty days, until fur¬
ther
Commit¬
safety,
And then, only for
tee.
It
in¬
where
by
labor
Court
bill
jected
the
Federal
had
e-
ment
the
following will be
Mr.
Paul
Mr.
Exchange and Other Principal Exchanges
NEW YORK 6, N. Y.
Teletype NY 1-672
t
to that can be
as
fa
14—Last
Czechoslovak
cation is expected to be reached
junction in labor disputes, except
in a nation-wide industry strike
r
the
in another week or
passed this week by
The Senate has in¬
direct
restore
Com¬
mittee
April
credit
manufacturers because it does not
dments
the
j
regulated, contrary to popular
Chronicle'
peace.
important
in
Financial
The Bank's decision
serted three
amen
The
WASHINGTON, May
port Bank for
small
'business and individual worker against tyranny of labor 'leaders.
Says Wagner Labor Act is one-sided and unjustly administered.
Holds labor leaders have too much power and new bill will tend
unions
sition to
j
dealer.
or
Anti-Labor Bill Export-Import Bank
an
r
o
volume
Czechs Seek Loan from
Says services o(
Just how big, how
ex¬
ecutive director.
j
•,
dealer in off-board transactions should carry compensa-
Some idea
s e
ters without question.
S. stock exchanges
opinion.
course
'
or
tion and stresses "counter market" is
grounds that the Fund is such. a
complicated business that
con¬
tinuity is important in the repre¬
sentation-of
of all U.
specialized services from broker
broker
the
on
*An address
*
and
rec¬
execu¬
Luthringer
George
named to succeed
!
and in transactions than business
the
at
May
Dr. White is reported to have
the .anti-
labor
take
to
J
Pointing out over-the-counter market is larger in volume of issues
combined, Mr. Escher maintains that dealings "over-the-counter"
require not only the same breath-taking speed and care as transactions on organized exchanges, but also necessitate more confidence
the Fund was
meeting of the executive directors
1
The greatest domestic issue facing our
*
Executive Director of
scheduled
j
of Dresser & Escher, New York City
14—Now
His European trip, the resignation
of Dr. Harry D. White, American
unions and obtain court
sue
May
that Mr. Camille Gutt is back from
fLabor leader condemns proposed new
labor and causing complete chaos in
ireal
BY FRANKLIN ESCHER
The Financial Chronicle
; WASHINGTON,
7
A Few Facts About the Over-the-
U. S. Executive Director
President of American Federation of Labor
(2603)
MAY
14,
1947
KoVAC
Milton
-
associated with us
manager Sales Department
ke1zer
.
Trading Department
«
THE COMMERCIAL & FINANCIAL CHRONICLE
(2604)
.
IBA Head for Both Debt
COMING
EVENTS
In
Investment
and Tax Reduction
Field
Edward Hopkinson, Jr., also advocates shifting of short-term bankheld securities into long-term issues.
Michigan Gas & Electric Company
Michigan Gas & Electric Company serves electricity and gas to
areas in the lower and upper peninsulas of Michigan
five scattered
with
a
population of about 100,000.
total
The largest area served, in
Michigan,, includes Three Rivers, Dowagiac, Niles and a
number of other communities.
A little further north the city of
southwest
(without interconnection to
Holland and town of Zeeland are served
the
May 15, 1947 (Washington, D. C.)
Meeting of Association
Exchange Firms—to be
addressed by Edward Hopkins, Jr.,
Drexel
& Co., President of the
IBA, and Emil Schram, President
of the New York Stock Exchange.
Stock
larger area). In the upper»
peninsula the three areas served Otis & Co., and the common stock May 23, 1947
(Philadelphia, Pa.)
are
not connected, the principal was
placed by Otis & Co. and Ira
Bond Club of Philadelphia An¬
•cities being Munising, Marquette, Haupt & Co. at 173/4. Of the com¬
nual Field Day at the Philmont
Ishpeming, Negaunee, Houghton mon stock issue the proceeds of
Country Club, Philmont, Pa.
and Hancock.
40,000 shares went to the com¬
About 66% of revenues are de¬ pany for use in redeeming the May 29, 1947 (New York)
rived from sales of electricity and preferred
stock,
while
57,226
The "Topper's" Field Day and"
34% from manufactured gas sales. shares were sold by Middle West
outing at Westchester
Country
In
1946
the
company
produced Corp. and 22,774 shares by Halsey,
Club, Rye N. Y.
V
'
" j :
only about 18% of its electric en¬ Stuart & Co.
ergy requirements and manufac¬
The
prospectus
(pages
6-7) May 30, 1947 (Atlanta, Ga.)
-
t i
tured 66%
of its gas, the remain¬
non-affiliated
o m
contains
being purchased
case
earnings
1941-46
vendors.
forma
oro
summaries
both
on
basis.
The
Within the last few years natural
figures reduced to
,gas has been
for the
brought into Michi¬
gan but is not as
the company,
tiating
yet available to
which is
the
to
as
the
t i
served
is
and
copper
there
ber
associated
with
the
kwh
per
in
1946
costs of almost every
government
terials, has
certificates by
met.
residential
usage
1,200
was
ikwh, only slightly below the
na¬
tional figure. Of the elec'ric
erating revenues, about 37%
was
^residential
and
;$SS7,500
Serial
Bond
dividends
stock
omitted
due
during
to
the
dividend
the old prior lien or
It
was
stated
common
had
arrears
dend
rates
of
7%
and
shares
•bends
were
of
preferred
at
offered
Golf
Outing
Country Club.
June
nual
Yacht
changes
earnings,
in
cash
position, etc.). The stock has
been
selling Recently around 15J/4
to
Special
Co.,
The
to
Financial
.
12,
Huntington
Bank
man
previously
was
i
Twin
Picnic
by
Bache
13,
1947
& Co.
were
With Merrill Lynch Firm
(Special to The Financial Chronicle)
RALEIGH,
N.
C.—Graham
the staff of Merrill Lynch,
Fenner &
June
Liberty Aircraft Products
Rockwell
U.
Club's
Bond
13, 1947
«
S.
Established
1879
Central Arkansas & Eastern
Ry.
5s, 1940
June 14, 1947
(Chicago, HI.)
*
Bond
Traders Club
5s, 1940
clock,
BROADWAY, NlEW
June 16-17,1947
back
Direct
Wire to
Chicago
we
us
more,
pay
have been
raising
and
more money
their governments and
wages to their civil
decent
servants.
The hands of the
to.
No
"Substantial debt reduction has
already
principally
19)
place,
taken
(Continued
on page
Depression Unless
Government Makes It!
By ROBERT R. WASON*
NAM
(Cincinnati, Ohio)
Municipal Bond Dealers' Group
Spring Party.
picnic
ent
,
annual
Club
Hills
Country
1947
Municipal
14th
Sleepy
Bond
Hollow
Bond
Club
predicts
a
depression.
A slacking-off of
us present.
New
that
tration
will
state
case
for
.
the
in¬
of
and
dollars
available.
tinues
Country- ' Club,
Every mem¬
Which
Hudson, New
-
•
(Westfield, N. J.)
of
New
.
Jersey
.
Mill
!
Con¬
vention favors
lower
the
as
Robert R. Wason
prices
of
cost
bid
to
keep
itself
of
for
available
make more goods
The government con¬
to
cheap,
prices.
money
increases
l£ government spending could be
stopped, prices could be reduced.
the
of
Triple
Supply
that
and
goods
and
pression.
..
Club
in
men
Adminis¬
prevent de-
Day
The
the
and
Department of
Agriculture buys farm surpluses
at prices
above parity to keep
farm prices from falling as low
as parity.
•
The only ways to increase the
purchasing power of the dollar
are to quit increasing the number
il months.
commerce
of
Field
con¬
*
prices
Business
ber
on
-
still
has stood
for
<£—
market
stock
at
Annual
'
solvency, which is best
reducing prices.
President Truman
dustry
(New York)
-
-
the
Bond
Club, Waukesha County, Wis/
20,
of maintaining business
need
achieved by
needs
(Milwaukee, Wis.)
Merrill
at
spokesman attacks Truman policies and blames them for high
Denies industry alone causes depression and ascribes presdifficulties to high taxes, excessive wages, and attack on profits.
prices.
of Cincinnati
survival of every
The
President
demands
lower
prices from industry. Yet he re¬
fuses to reduce the price of gov¬
ernment by
a
dime. He demands
represented here. Only the right to spend $37.5 billion.
Federal politicians take and spend
Lake
Countiy Club, Westfield, low prices could have built the
acceptance
your
products
re¬ one dollar out of every five"dol-f
New Jersey.
ceived—the solvency of the in¬ lars earned by every American
worker, farmer, family, corpora¬
dustries you represent.
July 22, 1947 (Detroit, Mich.)
Spring
Field
Day
at
the
Echo
Security Traders Association of
Detroit &
Michigan Annual Sum¬
Golf
Party,
Club.
Orchard" Lake
Also
a
party and buffet dinner
21
at the
cocktail
on
July
Savoyard Club, Detroit.
ciation
annual
Nov. 30-Dec.
YORK 6, N. Y.
cost
doubt, will be turned
partway, but probably, in
Stresses
(Boston, Mass.)
National Security Traders Asso¬
Co.
to
prices
no
company
present high cost of living
by government inter¬
vention. It is still playing politics
with the economy. The govern¬
The
was
convention.
6, 1947
(Hollywood,
Fla.)
Investment. Bankers Association
Annual Convention.
wheat to feed the
against
American
for the same wheat.
buying
world,
bids
ment,
housewives
tion
on
tion
government's ac¬
bread
the
increases
supports
*Part of address
by Mr. Wason
Mill Supply
Atlantic City, N. J.,
May 12, 1947.
before
the
Triple
Convention,
.
.
.
partnership.
people
could
money in bililons of dollare
American
save
if it paid
the President and every .
million dollars each
Senator
a
salary,
in
year
President
and
the
provided
Senate
spend your money for the
the
would
welfare
people instead of sec¬
appropriations to assure
table. The their re-election. $97,000,000 would
agricultural be chicken feed to the American
the price of
housewife's
the
President
and
The
made
Inevitably
&
indi¬
on
fidence and therefore of orders is visible to all of
Aug. 10-14, 1947
Gilbert J. Postley
business and
on
"
accustomed
Chicago
Field Day Party, Acacia
Country
29
continue
than the old
of
Country Club.
mer
Stephensvilie No. & So. Texas Ry.
serviced, and grad¬
Practically every¬
buy costs us more, and
we
will
Llan-
Club, Llanerch, Pa.
June 27, 1947
Paini, Webber, Jackson & Corns
burden
viduals, directly or indirectly, will
actually be increased as a result
to operate
annual
erch Country
York.
Request
on
which
few years ago. That
(Philadelphia, Pa.)
Potash
Prospectus
On the con¬
thing
.
Scarborough
i.
present
of the necessity of the states
(Cleveland, Ohio)
ation Annual Field Day at
York
Manufacturing Co.
inflationary.
for debt
any
communities
Philadelphia Securities Associ¬
June
Bausch & Lomb Optical Co.
that
ually reduced.
;
bury Street.
*Crowell-Collier
one
is
be used
and
Chairman of Board, National Association of Manufacturers
Pierce,
Beane, 302 South Salis¬
You and I
staggered the imagi¬
a
should
debt must be
Bear
Outing.
Cleveland
and
amount,
have
even
spring party and silver anniver¬
sary celebration.
annual
H.
Andrews, Jr., has been added to
Buckeye Steel Castings Co.
.
our
trary, I believe a substantial part
of the budgetary surplus should
be immediately used for Federal
tax reduction, else the total tax
national debt unheard
would
•
Trading Markets in. Common Stocks
Manufacturing Co.
bal¬
(Boston, Mass.)
Milwaukee
♦.
White
the
at
June 20, 1947
Bates
St.
den
utimately to bring
the world, added little to
nation
'
Harris
a
think
cannot, however, support
reduction
and
a
I
surplus
goods
produced,
necessary for our national
in
of
Municipal Bond Club of Boston
Annual
Mr. Kauf¬
.
(Minneapolis-
City Bond Club 26th An¬
June 13, 1947
Building,
with
1947
the
of
owe
now
Inverness
at
Club,
to
be
preceded
Wednesday night, June 11, with
a
cocktail party at the Nicollet
Hotel, Minneapolis.
Staff
Chronicle
Kaufman to their staff.
Hell & Co., the exchange of pre¬
ferred stocks was underwritten by
I
should be main¬
tained, certainly in periods of high
business
activity, to produce a
budgetary surplus. We now have
level, for the
national economy.
our
13th An¬
Paul)
(subiect
to
of Toledo
(wi h divi¬
6%)
national
the
defense
(Toledo, Ohio)
Club
nual
the
COLUMBUS, OHIO—Vercoe &
replaced by 120.000
$10 par value.
The
were
(New York)
in the pros¬
quarterly rate of 30c a share, in¬
dicating an annual rate of $1.20
'exchanged ior (or refunded bv)
400,000 4.40% preferred stock.
The 9,625 shares of old common
^teck
Outing at the Elk-
Club of New York
Bond
June
replaced
Debenture S^s.
Stocks
1947
June 6, 1947
period
dividends
Vercoe Adds
Notes
public and
and
revenues
Country Club, Scarborough, N. Y.
June 6,
1.20
op¬
The four issues :of old Prior Lien
<and Preferred
be absorbed by
investment institutions.
"At
budget,
Federal
1.41
resort
Bank
that
rities
believe, of course, in
anced
ma¬
1941
1.26
members of tfpe New York Stock
overhauling. $3,500,000 First 3%s
Exchange and other leading ex¬
were refunded by like amount of
2%% bonds due 1976, and $300,- changes, have added Ferdinand J.
Serial
Jr,
kind of
and must be
__1942
business,
rural, 20% commercial, 21%
Industrial, and 7% miscellaneous.
<O4>0
Hopkinson,
up
while
ridge Club.
over-counter, to yield nearly 8%.
On April 2, 1947 the company's
•capital structure had a general
"I
E.
matu-
longer
gone
Day outing at the Sleepy Hollow
initiate
Sffic, somewhat above the national
figure for the industry, and aver¬
age
issue of
new
a
local
and
by reason of the
scales and higher
government,
higher wage
the bank-held
would
1.35
pectus that the directors intend to
were
state
of
1.23
stocks.
The average residential electric
cost
reduction in the Federal tax bur¬
1932-46
farming, resort business, etc.
the
much
—
Common
automo¬
But
Field
been
tive industry), fruit and vegetable
revenues
re¬
peace to
num¬
a
participation
in world rehabilitation diminishes.
that.
on
(including
and the need for our
and
the doctrine that all the budgetary
J—
1943
diversified manufactur¬
are
ing activities
reduc-
o n s
demption of a
large part of
Bond Club of Baltimore Annual
1944
iron
and must, of course, come down as
we
return to a peacetime basis,
national
stated, "we have been passing
through a period of unprecedented
business activity.
Unfortunately,
the
mining, toge'her with lumbering,
pulp and paper, quarrying, dairy
^products, explosives, etc.
In the
southwestern Michigan
areas
the
urged
(Baltimore, Md.)
1940-41
Continuing, Mr. Hopkinson re¬
marked that "the wartime budget
of the Federal Government can
debt
Outing at Brookhaven Country Club, Atlanta, Ga.
Field Day and
$2.33
1945
^principal business activity in the
areas
the
,
past 6 or 7 years," Mr. Hopkinson
possible
peninsula
upper
to
Philadelphia,
and
Georgia Security Dealers Asso¬
1947
not
cases,
levels.
immediate tax
ciation Annual
June 6,
most
importance of
basis
about
were
1
1946
methods to purchase gas.
In
forma
pro
share
a
stock
for
and
follows:
as
nego¬
now
best
common
actual
an
a
of
Drexel & Co.,
stressed
,
der in each
and
o n
partner
,
Lr
5
In addressing the Buffalo Chamber of Commerce on
May 8,
Edward Hopkinson, Jr., President of the Investment Bankers Associa-
Dinner
of
Thursday, May IS, 1947
of
all
the
tional
people if thereby savings of $6,•000,000,000 could be achieved.
Any
-
average
American
(Continued on page 46)
can
... .
„
Volume 165
Number
THE COMMERCIAL & FINANCIAL
CHRONICLE
4594
The Present
G. L. Ohrstrom
Housing Picture
Assistant1
Commissioner, Federal Housing
Administration
G.
L.
with
expansion in the
from sharply
curtailed lev¬
els
caused
by
the
war.
In
1946,
was
production
draulic
growth
number
both
of
units
with
struction
and,
and
comple¬
The
rials
field
Franklin D. Richards
to¬
day, the need of the veteran still
It is*still the keynote of
remains.
efforts to produce more
our
hous¬
removal
of
produce
a
moderate
income.
objective
of
still
in
tion
without
limita¬
price fixing,
on
finished
and
a
bathrooms.
Association
Bankers
t
housing
problem
of local, state
Presi¬
Lift
lished in
1925,
the
Company,
and
service
Their
of
is
di¬
lifts
used
are
lifts
ferent story.
veterans.
garages.
Housing
for
Veterans
Rental
of
(Continued
on
page
36)
drop-off of business and
in
Since
the
war
sold
are
Interest Pay.
sibility
for hotels has risen from 60% to 85% of
<$>-
big city hotels have
of
off in
Hotel
that
has
passed
the
crest,
and
a
let-up
period
has
come.
tel
He
of sales mindC. Dewitt Coffman
edness.
should
be
p^y-
and
coupon
$1.46
for
$12.50 coupon.
Funds also
available for the partial
pay¬
on account of interest
repre¬
ment
sented
by the Nov. 15, 1942,
with
no
illustrations
entitled
'The
fiscal
agent upon surrender to it
"At the Cor¬
into
of
one
result
loss
to
the
hotel-men- ous in the hotel world to devote
never lose several pages of editorial space to
sales-mindedness
regardless
of it, then we of hoteldom had better
business conditions.
We pointed get sales-minded
again.
out to these young college men
"As you all know so well, we
that business economics changed
used to be able to make a profit
drastically: — recessions
follow in a hotel if we were
able to
to-be that they
young
aver¬
boom§
and
depressions
are
fol¬
age
60%
Today, the
break-even point is
occupancy.
lowed by Upswings.
Most business
figure on a
while they ride on the crest closer to 85% and we had
better
good business, forget what it get out after business to
help keep
men,
of
was
like
when
business
was
bad
that let-up period which is bound
to come.
"At that time, the spring of
1946,
"An
of
an
article from the "New
Magazine
entitled
items
varied
shows
60
to
that
conditions
are
off in the hotel in¬
dustry all dver the country.
have
&
Investment
leased
additional
Com¬
Bankers,
space
Street
products the
has increased
per man
to
to
or
as
well
the
as
of cost
of
tention than it is Receiving. That
is not to say that there is not a lot
of
talk
about
the
high
of
cost
building and general to-do about
it.
Nevertheless, much of
the
thought and discussion revolved
around
the
bearing
on
high
prices
them
and
of
inflation,
scarcity of ma¬
scarcity values,
terials and delays due to
flow
of
the
materials.
On
uneven
the
that
a very large proportion of
total population cannot afford
|
purchase
live
itrilL
with
U
unsubsidized
homes
in
unsubsidized; rental
They must live either
housing.
~
n:
i
^
o
•
i
.
,
faced
either
with
more
and
advancing subsidies or with the
necessity of somehow streamlining
production methods in the build¬
ing industry, thus
achieving lower
cost by mass production or other¬
wise. It is easier to state this
prob¬
lem than to name solutions—but
the
adaptation of production-line
methods
to
the
building industry
should not be beyond
The
alternative
our powers.
threatens
our
whole way of life.
other
hand, I
am talking about the in¬
creasing cost of housing for some
decades past in relation to the cost
other goods and services and
of
the
Compared to other items in
cost
of living,
and compared
to wage rates and real income and
REAL ESTATE
purchasing power, the
cost of building has risen in the
main
steadily for decades—and
the end is not in
solve
the
have
included
sight.
problem
all
SECURITIES
★
★
★
Efforts to
too
often
lengthening
the
SHASKAN & CO.
Members New York Stock Exchange
Building at 41 Broad
through
Schlang
Bros.,
agents.
*A
Members New York Curb Exchange
talk
by Mr. Shanks before
the Life Managers Association in
Los
40 EXCHANGE PL., N .Y.
Bell Teletype
Dlgby 4-4950
NY 1-953
Angeles, Cal., May 5, 1947.
300%
on
a
field
for
why the break-even point in
pancy
The years."
OFFERINGS WANTED
has
risen
so
over
Broadway Trinity Place 4l/2S 1963 WS
Film Center 4s 1949
Firm Trading Markets:
Hotel Lexington Units
Hotel Lexington Stock
Lincoln
Bldg. 5»/2s
Madison
3s
Wall & Beaver Sts. 4l/2s 1951 WS
Westinghouse Bldg. Part. Ctf CBI
2
1963 WS
1957
WS
Park Ave.
2nd
3s
261
Broadway Corp. Stock
5th Ave.
6s
1962 WS
Incorporated
Tel.
BArclay 7-4880
Real Estate Issues
1946
Amott,Baker & Co.
150 Broadway
California & New York
48th St. Realization 4s 1952 WS
61
Manqueen Corp. l-5s 1952 WS
occu¬
prewar
Pittsburgh Hotels 5s 1967
Greeley Square BIdg. 6s 1951 WS
The
New York Athletic Club 2s 1955
New York Athletic Club 2nd 1 Yzs 1955
Gov. Clinton 2s 1956 WS
New York 7, N. Y.
Teletype NY 1-588
,
benefit of subsidy or in old
structures in blighted areas.
We
are
question
serious
so
today
our
the
housing and houses, is one which
4e,serves much more serious at¬
on
eighth floor of the Public Na¬
tional Bank
of most
case
sufficiently
with
costs
'The
that time, because as we all know,
Inc.,
pany,
the
Lubetkin
analysis of operating costs
basic
have risen from
of materials.
Beef,
example, is up 152% over pre¬
war prices.
In contrast, the aver¬
Customer Is Always Wrong.' This
age
price
increases
since
the
article stressed heavily crowded
decontrol of transient room rates
conditions of hotels and the resul¬
throughout the hotel industry has
tant inconveniences that guests
been only 11%.
So it is easy to
suffered. Of course, at this time
see
that the volume of business
it is silly to make an analogy of
pressure
must
be
kept up, and
business conditions that existed at
read
Yorker"
Additional Space
Seligman,
the
production
the pressure up.
and cannot look ahead and foresee
we
Take
should
in
the borrower
errors
lender
The whole
consumer
these
of
these
borrower.
convince
School
ever
increasing use of ma¬
chinery. The result has been that
priced too
lending prac¬
failure, frustration and
hllfArnAcc
oil
Qrmi'nrl
TY-mlii/lim'f
bitterness
all
around, including
wages.
University
lfes
indus¬
our
and
con¬
of
Guest
Is Always
Wrong.'
If a of the May 15, 1942,
coupons and
Hotel discerning organization of con¬
presentation to it of the Nov. 15,
Administration a year ago," Mr. servative editorial
policy like the
Coffman stated, "we talked on the Curtis Publishing
Company thinks 1942, coupons.
same
subject in an endeavor to the situation is sufficiently seri¬
nell
trouble
development of
money and real wages and in the
main have succeeded
by the lavish
one
tices may well lead
cou¬
analogy be¬
tween 1946 and 1947, but yet in pons in the amount of
$18.32 for
the May 1947 issue of "Holiday each
$25 coupon and $9.16 for
Magazine," published by the Cur¬
each $12.50 coupon.
Distribution
tis Publishing Company, there is
will be made at the office of the
a
many-paged
story
complete
spirit
a
each
are
$25
Industrial Life
on
fundamental
are
on
each
financing
GI's through
merely
of prices.
trial life in this country. We
haye
driven
for
higher
and
higher
a
generally.
tens
is
poorly located, or
high. Over-liberal
'
gcpount of the interest
represented by the May 15, 1942,
coupons in the amount of $2.92 for
the weekends but drops of in mid¬
"There
to cul¬
men
on
ppfyed fynd? to make final
Effect
The
They
up
pay
the
higher
wages and still keep prices from
Act, through the provisions of going too high. In
building, how608 and Title II, and each of the
fever, wages have risen but the
institutions
this ""—*
represented
in
t-i--—"
( use of machinery has lagged, pro¬
room is doing likewise. The lender
duction per man has
lagged—and
should never, through its
lending the inevitable result is that the
practices, be a party to encourag¬ price of the product has
soared in
ing the GI or other borrower to relation to
nearly everything else.
buy a poorly built house, or one These results
35-year 5% external secured sink¬
ing fund gold bonds, series A, due
May 15, 1963, are being notified
that the fiscal
agent, The National
City Bank of New York, has re-
week."
Continuing, Mr. Coffman stated:
urged the ho¬
tivate
minor drop¬
is still extremely heavy over
ness
business of
hotels
a
Friday, Satur¬
on
day and Sunday nights, but the
heavy pressure continues on Mopday,
Tuesday
and
Wednesday
nights. In most resort hotels busi¬
gales Manage¬
ment Associa¬
tion, told his
hearers
business
answer.
and
rate
of loan do* not
ans
Holders of Republic of Panama
Vice-
give
help the bidding
in satisfactory
borrowers
to
Prudential
Interest
amount
is
have
longer terms. They
only not helpfpl
not
harmful.
the
larger
for
available
terms and
the
of
question
making
ventional loans, under the Veter¬
Fund Gold Bonds
oc¬
opening luncheon of the New Jersey Hotel Asso¬
ciation Convention at Atlantic City on May 5, C. Dewitt Coffman,
the
is
however,
lenders
of thousands of
and
Republic
5% Sinking
the
and
loans
been
in the
erty is well built,
ended,
"Rotary"
are
but
location and not overpriced.
I be¬
lieve we have a similar respon¬
the
company has increased its produc¬
tion on established
products and
developed several new lifting de¬
Of Panama
says
talk at the
President
contrary
problem,
vices to be marketed shortly. The
principal names under which its
the
max-
cupancy.
First
The
The
of Title VI of the National Hous-
under
have
lack of
no
America,
Rental
C. Dewitt Coffman calls attention to
a
is
Richards at
Mortgage
market
a
The Hotel Business
In
There
Institutional
"Oildraulic?'Js
v
M. Shanks
The
broadened
ahead in
lines
break-even point
Carroll
larger
longer and
of costs.
one
sections of the United States and
around
and
financing for homes for returned
today in all
the
was
revolved
There is very little private build¬
ers and lenders can do about that.
But permanent housing is a dif¬
used
crease
rower
interest. rate
national
case.
and
sums
to lend,
tendency to in¬
price which the bor¬
willing to pay for a
the
legislative attempts to assist Lave
gov ernment.
estab¬
small
had
a
and
hydraulic
truck
stations
Tempo¬
y.
rary
the pioneer in
was
manufacture
r
has
The usual
results follow
when the borrower has paid more;
than he should for his home. Most
coun-
Vice
high
home.
need
the
type.
move
those rules.
City, Mo., May 8, 1947.
Kansas
perative
of
im¬
an
formerly
and
accumulate
but
housing is the main job
housing program for 1947.
An important tool for the job is
the mortgage insurance provisions
the
can
of
man
obtain
To
of
is still
board.
Rotary
in
space
veterans is
f
Co., have been added to
automobile
a
and
materials
problem is
been a grievous levy on the
earnings of the thrifty people who
Proper
housing for
satisfactory
of the
has
high costs.
a
of
crux
term, and increasing the amount
of the mortgage
loan, and lowering the interest rate. This not only
for
g
very real responsibility to see that
where they finance GI's, the prop¬
providing
Clinic
the
&
n
in with the
rector, has been elected President,
and H. T. Cavanaugh and Merrill
Stubbs, partners of G. L. Ohr¬
strom
i
o u s
problem of
Allan,
-
The
veterans ties
s
o
scarcity
<$•
•
foreign countries. Starting in
1935, Rotary has also been man¬
ufacturing freight and passenger
elevators, lumber lifts and other
industrial lifting and labor saving
devices, all of the oil hydraulic
the
*An address by Mr.
h
board.
dent
the moderate price class. So there
in the
Mortgage
George L. Ohrstrom
has been retained
much
of
and
volume
Generally speaking, the industry
single family dwellings
be produced at a price
means
the
Hugh
The
problem of
has
Chairman
rentals.
low
at
of
restrictions
tion
the
also
maximum
has found it
within
costs.
L.
ge
director
of
supply of labor and mate¬
yet allow complete
tal housing, but we are also con¬
tinuing to encourage the construc¬
can
con¬
use
eo r
Ohrstrom
will not
ing. The main emphasis is on ren¬
that
i
been elected
has proved
point of
new
dwelling
minimum
means
limitation
of
the
providing low
rental units has been through the
construction of 2, 3, and 4-family
structures, and, thirdly, we have
the program to insure financing
on larger rental projects.
diffi¬
In the hous¬
the
material and
tions.
ing
G
the
from
creating
Another
problems, a
surprisingly
large volume
of
securities
It
program.
view
culties
in
units
of
phasis has been given to the
version
effective
in
the
High construction costs and
have made safe
lending difficult.
acquisi¬
and no public
distribution of
shortest possible time, a great em¬
con¬
all
The
contemplated.
imum
sidering
lifts
elevators.
tion was made
for investment
<$•
housing
con
and
Day there has been a very impressive
of basic building materials, starting
there
rapid
a
Life
insurance executive asserts high construction costs
are
im¬
peding housing program and creating problem for mortgage lenders
in financing GI
mortgages.
Warns against over-Lberal lending.
Tennessee, manufacturers of hy¬
private builders.
In the 18 months since V-J
President, Prudential Insurance Company
Co., of New
and
associates
have
ac¬
quired Rotary Lift Co.,
Memphis,
disproportionate building costs. Foresees consumer resistance
to current high prices and a return to normal competition in housing market.
Pledges Federal Housing Administration cooperation
^
By CARROLL M. SHANKS*
Ohrstrom &
and
;
High Costs—A Building Problem
York,
Asserting despite difficulties and problems, there has been a sur¬
prisingly large volume of house completions since V-J Day, Hous¬
ing Administration official points out central problem now is high
i
Acquires
Rotary Lift Go.
By FRANKLIN D. RICHARDS*
(2605)'
J. S. Strauss & Co,
155
Montgomery St., San
Tele. SP 61 & 62
Francisco^
EXbrook 8515
10
—
followed
has
Confidence in Business
major war.- This
will be termed a recession..
process
:
Outlook Justified
of this recession as
N. Y., warned
at a luncheon
meeting of the
of
Club
Bond
Chic ago
on
May
8.
Mr.
Wampler is a
ment
banker
This
ber and direc-
the
of
tor
club.
of
many
will
Such
have
us
tural
On
other
the
of * competition
should not make everyone hot and
bothered.
We have no right to
hand,
the
return
possession of
goods to mean a guaranteed sale.
Furthermore, the buying public
will take our products only if the
prices are right and real sales
efforts put forth."
'
,,
the
expect
mere
_
Pointing out that this statement
not
was
to
flecting
considered
be
as
re¬
lack of confidence in
outlook,
Wampler
a
business
the
decline
a
are
in
bei
even
a
r
investment
in
1941
banking busi¬
Executive
became
Cor¬
Carrier
of
taken
activities
in
part
business
immediate
his
last 3
has-been
years
National Vice-Presigent of the
National Association of Manufac¬
adjust¬
agricul¬
Since
turers.
to
cago
as
both
Chairman
and
President
Association
next six months
presently
a
Company of New York.
(Special
to
The
Financial
Chronicle);
sence
•
'
.
'
■
'
Manufacturing Corp.
Lima, Ohio
Manufacturer of Deep Freeze
and
Beverage
Food
Ad¬
Outdoor
and
Coolers,
vertising Signs of all types.
MARKET:
1%
1%
-
As
for
demand
V
■
information
to
available
dealers
on
request
it
and
looks
CHICAGO 4
is
true
Dearborn 1501
each
of
ahead
Wampler said:
"We
are
remarks
the
to
-
-
peace
close to
of
Corrugated
Paper Co.
Members
New
York
Stock
Salle
Street.
/
Mr.
King
for¬
was
merly manager of the trading de¬
he
Mr.
Miilwaukee
Natiohal
Avenue
Bank and Smith, Barney &
Co.
to
The
&
Broadway
120
Co.,
Y.
available
memoranda
are
Iron
INDIANAPOLIS,
under
Gas
Service
rick,
Waddell
&
—
Her¬
Inc.,
has
IND.
Co.,
opened
a
branch
office
in
Pacific
Gas
..
Electric
Portland
&
,
Co.—
Public
Utility—Recent
Co.—First quarter analysis—C. E.
W.
Fairman & Co.,
Chi¬
Street,
Salle
Bank
National
Trust
Broadway,
Co.,- 61
&
Unterberg
&
New York 6, N. Y.
is
available
Also
4, 111.
circular
offering
an
Stern & Stern Textiles,
on
Pacific
develop¬
railroad
current
lining
Memorandum
—
Service
Public
Southwestern
Co.
—
Buckley
1420
Walnut
Street,
Philadelphia 2, Pa.
Also available are memoranda
Brothers,
,
ments of the week.
H. H. Robertson Company and
on
Eastern Corporation.
3-4s of 1933
—Memorandum—L. H. Rothchild
Denver & Salt Lake
&
Co., 52 Wall Street, New
York
Electric
Corp.—Bulle¬
Corp., Ill
Securities
Terra-Life
Circular—Caswell
—
&
Co., 120 South La Salle Street,
Chicago 3, 111.
Utica
Inc.
Mohawk
&
Circular
—
—
Card
South
105
-
Electric
BOUGHT
*
—
a
descriptive
Anl*
—
C. H.
Dutton—Late
&
data—More-
Penobscot Building,
26, Mich.
Co.,
Park,
date
Products and
Chronicle)
Financial
staff
to the
Co.* Bank of
Building* members of
has
Whitney
of
been
Bowers
Boston
added
&
Stock
Exchange.
-L4-4-
With Atlas Securities*
Special to
Consoli¬
ChroniClIS
The Financial
BEVERLY
CALIF:—
"HILLS;.
Herman R. Griffin has been added
Telecommunications
to
—
Analysis—Troster, Currie & Sum¬
mers, 74 Trinity Place, New York
the
staff
of
Atlas
Securities,
Inc., 133 North Robertsoh Boule¬
vard.
'
1
v":
6. N. Y,
Insurance
comparison for
1946—Laird, Bissell & Meeds, 120
Broadway, New York 5, N. Y.
Fire
QUOTED
Stocks
A.C.ALLYN*™ COMPANY
Incorporated
Fort
Minneapolis
The
Inc.—Analysis—
Dearborn.
Finch
to
Commerce
available are analyses of
Tennessee
Available
Milwaukee
Building, San An¬
PORTLAND, MAINE—Percy F.
Service Company
SOLD
position
Co., Inc.,
With Bowers & Co.;.
(Special
Also
Light & Power Company
Prospectus
Boston
is
Dunningcolor
on
Seligman, Lubetkin & Co.. Inc., 41
Broad Street, New York 4, N. Y.
Company
on
outlook—Pitman &
tonio 5, Texas.
the
Missouri Utilities Company
Public Service Company of Indiana, Inc.
Sioux City Gas & Electric Company
Gas
Chi¬
Chemical
Carolina
Corp,—Memorandum
cago
Fashion
Water Company
Service
Street,
Salle
La
3, 111.
Also available
Cotton Mills,
Mohawk Val¬
Co., Inc., 238 Gen¬
Street, Utica 2, N. Y.
esee
Virginia
Corp.
Dunningcolor
—
ley Investing
Corrugating Co.
.'
Michigan Public Service Company
New York
Power
Barcalo
Concrete;
South- La
Detroit
Lake Superior District Power Company
Chicago
Co.—*
Haupt & Co., ill
Broadway, New York 6, N. Y. ■'
Vacuum
land
♦Michigan Gas & Electric Company
208 SOUTH LA SALLE ST.
Electric
and
Analysis—Ira
matic.
Company
West Virginia Water
York
N. Y.
Rights and common stock—Table
of related prices—The First Bos¬
ton
Corp., 100 Broadway,' New
York 5, N. Y.
,
f
Taylor
Purolator
Steel;
&
Broadway,
~ ''
120
Corp.;
and
Corp.
Lanova
Hanseatic
-
5. N. Y.
Chronicle)
Financial
wages
Public
♦Tucson
Electric
&
.......
.
$
5)s
Opens Indianapolis Branch
Central Illinois Electric & Gas Company
Request
^
-
.
Aspinook corporation—Circulai
Broadway, New York 6, N. Y.
Also available is a bulletin on
Texas Public Service Company
537
•
Dumont
Central Arizona Light & Power Company
Utility
Gas
New York 5,
-
tin—Aetna
♦Southwestern Public Service Company
Telephone Randolph 4068
England
Co., 15 Broad Street, New York 5,
Herrick, Waddell & Co.
♦Central Electric & Gas Company
5^'s of '52
\
*
Association—Analysis—New York
opments—Vilas & Hickey, 49 Wall
Street, New York 5, N. Y.
White, Weld & Co., 231 South La
Also available is a leaflet out¬
♦Black Hills Power & Light Company '
L
CHICAGO 4, ILLINOIS
New
Market—
Stock
George F. King
PUBLIC UTILITY COMMON STOCKS
Iowa
CG
the
of
Digest"—Loewi &
Analysis of averages since last
September—Newburger, Loeb &
circular
Central Public
System
225 East Mason Street, Mil¬
waukee 2, Wis.
5, N. Y.
"Business
issue of
current
Alamo National
SINCE 1908
Bell
Co.,
New York
the
Inc.
a transi¬
time and
but are
already
Indiana
Private Wire to New
Financial
York
high,
Co.—Analysis—
Tool
National
and
.
Chicago, Rock Island &
(Special
Gulf Public
Direct
Tax Position
vs.
sibilities—Bennett, Spanier & Co.,
Tel.: State 0400
on
Sales
levels Merchants Bank
Building.
Asso¬
that are out of line and working
ciated with the new branch will
philosophies that fall short of our
best effort.
It is a change that be Ross E. Coffin.
CHICAGO 4, ILLINOIS
Recent Review
Co., Incorporated, 67
Street, New York 5, N. Y. '»
—Geyer &
and
too
In¬
&
Co.—Descriptive brochure
memorandum on speculative pos¬
Exchange
FKEO. IV. FAIRMAN CO.
Bonding
Massachusetts
surance
the
208 SOUTH LA SALLE STREET
Tele. CG 730
South La Salle Street,
Chicago 4, 111.
• <:
)
isting
capital gains
tax
law—:
Reynolds & Co., 120 Broadway,
cago
Request
DAVID A. NOYES & COMPANY
& Co., 231
—Memorandum on current devel¬
is unlikely to be completed
without a 'washing out' of prices
are
4
'
.
.
In
as
way,
that
Common Stock
on
Security
208
.>
basic shift back toward
a
economic reality.
"This
change,
.
Co.—Analysis—Adams
R. Hoe &
■
in
economics
time
poration.
—Study of tax position under ex¬
review—Fred
•
as
future,
<
not merely
Co., Long
Manufac¬
turing Co., and Old Ben Coal Cor¬
Public
the
In his concluding
analyses of
are
Mfg.
Press
Bell Lumber Co., Miller
Wall
Central
and partment for Kebbon, McCormick
individual & Co. and, prior thereto, was with
tion period between war
Available
Street, New York
'Y.
4, N.
*4
shipments
our
available
Mfg.
month."
looked
Teletype CG 955
Ft. Wayne
60 Beaver
Co.,
tists;
•.
isfactory rate.
For many months
now - our
bookings > have
been
than
analysis — Comstock &
South La "Sklle StreetsChicago 4, 111.' " \
231
Co.,
Companies—
Accessory
Products; Upson Corp.; United Ar¬
though fiscal 1947 would be much
larger volume-wise than the -best
war year of the corporation.
' ,
"Furthermore,, orders are con¬
this
COMSTOCK & CO.
Detailed Analysis
Motor
Analysis of position-—H. Hentz &
best
goods than it delivered in its
larger
A
N. Y.
,
only.
231 So. La Salle St.
portfolio—G. H. Walker &
1 Wall Street, New York 5,
Wharton
tinuing to roll in at a highly sat¬
Full
Co.,
of issuej to
arranging his
which he had
goods
year
stock
Also
Carrier Corporation shipped more
prewar
investor in
the
on
example ~of the pent up
as
vestors—Special list
I
•
-
Corp.—
Coal
Detailed
Also
Common Stock Program for In¬
aid
Street, Chicago
County
Hydraulic
—Ward
previously mentioned, Mr. Wamp¬
ler said that "during the first five
months of its present fiscal year,
Common Stock
Units,
**
depression."
Lim¬
6, N. Y.
New York 5. N
by government is one of
the strongest points that can be
made against the probability of a
Artkraft
Forever
,
curred
r
Last
Not
comment—Hare's
19 Rector Street, New Yoik
ited,
CHICAGO, - ILL. — George I F
King has become associated with
the ab¬
of debt other than that in¬
that
Do
Bargains
—Market
N. Y.
the commercial banks.
me
4, 111.
Street, New York 5, N. Y.
View
George F. King With
White, Weld & Go.
little credit is tied up in
speculation. ' Stock market loans
are
negligible and although in¬
ventory loans have expanded con¬
siderably these are being watched
very closely, both by management
to
208 South La Salle
H.
market opin¬
Lewis
& Co.,
14
He
Syracuse.
Company of Syracuse
and of the Marine Midland Trust
Very
seems
general
-
Wall
is
Director of the Syra¬
of
Trust
cuse
ly free from debt. Farm and home
mortgages are not high in amount.
"It
brochure—David A. Noyes & Co.:,
BuEetib—Comment,
and
ion—John
Chi¬
from
moving
Syracuse, he has served
of the Board of the Manufacturers
so,
and
Aviation
news,
a
the economy as a whole has
a
good chance of holding at a
very satisfactory production rate.
"A third point is this.
Corpora¬
tions and individuals are relative¬
or
won't
,
and for the
prices and a decline in con¬
struction
costs.
If
worthwhile
corrections in these areas can be
made during the
the
outside
has a great capacity to
adjustments. Many
of these are already under way.
Two of the most necessary
will. If
we
* Cloud Wampler, after 25 years
always
economy
ments
continue.
not
as
to
situation cannot and
a
period and is world-wide
well as domestic. Secondly, our
the war
forgotten how
sell,"
Mr.
Wampler said.
"As you well know, the war years
were
not years of real competi¬
tion.
from
over
there
do,
that
poration, one of the leading com¬
panies
in
the
air-conditioning
field,
and
has
been
President
since 1942.; Over the years he has
effect orderly
"Too
Wampler
carried
is
need
evidence
Vice-President
accumulated needs
far from satisfied.
the
goods is
only get to work. Today there
ness,
for this belief:
"First,
for
mem¬
;
in
its present
high level. He cited the following
reasons
It is understood that the firms mentioned will be pleased
to send interested parties the following literature:
„
'/
Franklin
industrial ac¬
though
even
ness
Recommendations and Literature
step
that I think vis
be avoided if people
can
recession."
belief
that
even
setback
some
we
tivity may not hold at
invest¬
a
is
that 1947 and
will be years of good busi¬
1948
cago
was
will
sell their prod¬
Corporation, Syracuse,
his
stated
Chi¬
former
Cloud
"The
,
probable
President of Carrier
Cloud Wampler,
Dealer-Broker Investment
step
a
Reserve
down
will be a bit paihful.
But it Will
be exceedingly healthy.
Naturally,
back to work."
learn again how to
Federal
a
Board Index of 190 to around 145.
Wampler,* President of Carrier Corporation and former in¬
vestment banker, sees good business in next two yeats even though
industrial activity may decline.
Says there is evidence "people
ucts,
from
down
Cloud
American businessmen must
prolonged
every
boom and. every
I think
will get
Thursday, May 15,19451
THE COMMERCIAL & FINANCIAL CHRONICLE
(2606)'
Omaha
Co.
Corrugated Paper
Wayne
common
{
Bateman, Eichler Adds
Casualty
and
Special
earnings
stock
t::
—
Descriptive
i
LOS
M.
to
The Financial
Chronicle
ANGELES, CALIF.—James
Gray
Eichler
is
now
with
Bateman,
&
Co., 453 South Spring
Street, members of the Los An¬
geles Stock Exchange,
.
i-
4M-m,
I..*,
.
c i
r...
Volume
165 :
Number
THE COMMERCIAL & FINANCIAL
CHRONICLE
4594
(2607)
Food Prieo Trends
Money Management
Lower: Willis
And Bank Investments
By E.
Assistant
SHERMAN
Vice-President, Central
,
ADAMS*
Hanover Bank & Trust Co.
economy as a
financing has been low
iiry
.
eminent securities
..t-
matic
interest rates.
Holds shifting of gov-
from banks to individual investors is
and low interest rate
'
is not substitute for debt reducnot
1
auto-",
no
at
Buffalo
annual
trade
on
May 8 at
dinner
of
the
Food
-Industry Sales Executives.
; "Leading the downward move¬
whole and dominant factor in Treas-
remedy against inflation and
Says low interest rates have
lion.
the
financing policies rather than in accordance
ment
products,
canned
meats,
evaporated milk, jams and jellies,
for
reflected
is
money
monetary and;
mind
all
the
laws, rules, regula¬
also the operations of
credit policies
of the Federal
tions'and
Reserve
departments
and
agencies which affect money and
tem
governmental
Sys¬
and
of
the
Treasury
Department.
M
etary
o n
management
affects
ment
in
E.
Adams
two
It is the key factor affecting
the present status and future out¬
look for the bond
market; and
) (2) It also affects the circum¬
stances of every individual bank:
*
gans
this
had
money
form
one
country
or
the volume of its deposits, the size
its investment portfolio, and
finally, its earnings position—all
which
in
the formulation of
vital
are
the
of
laws, charter
rulings under
and
for
monetary
shall
in
the
with
Association, May 8, 1947.
before
that the Fed-
was
(Continued
on
35)
page
Company of Chicago
in it maintenance of high
sees
individual and corporate taxes.
Sees inflationary environment in
expansion of commercial bank credit.
fourth
Government
lishes
edition
on
Treasury's
debt redemption pol¬
According to the Northern
Trust
"In
Co.:
interest rate is
of policy
an
when
era
much
so
a
the
matter
'natural'
rather than the result of
forces, it is perhaps .ir¬
relevant
to
think
or
interest rate
Yet in. the minds of
■cycles.
of
economic
many
affairs
the
question 'Did the present low in¬
terest
rate
cycle
culminate
in
1946?' is
from
a
the
years'
pertinent one. In 1956,
vantage point ,of ten
perspective,
this
question
be definitely answered.
In
meantime, the observer may
appraise events of more certain
may
the
nature.
"Four outstanding developments
■
featured
the
money
market
in
>1946.'
The first, and perhaps the
fundamental, was the deci¬
sion- bf the Secretary of the Treas¬
mote
ury
not to reduce the rate on one-
certificates of indebtedness
below I' % %.
The
structure
of
market rates existing early in the
year
year, would have
permitted the
.refunding
of
certificates
at
a
lower rate—in fact, the possibility
that the certificate rate might be
lowered was
for
the
an
important
outstanding
reason
strength
the market at that time.
The
of
sec¬
ond outstanding development was
the initiation and continuation of
a
large scale, piece-meal debt re¬
tirement program,
cess
funds
first out of
ment
surplus.
was
ex¬
raised in the Victory
Loan, and now out
cash
a
booklet
of a Treasury
The third develop¬
commitment, indefi¬
"United
on
of
States
System to maintain - the estab¬
lished pattern of
rates, at least at
fourth
and
long
the
was
ends.
The
resumption
of
strong rise in commercial, real
tate and
consumer
"The
reasons
lower the
%% rate
knowledge.
decision
may
fact
ness
that
be giving it
is
not
the
not
not
are
The
to speak of the matter
sion
as
policies
that
deci¬
a
definite-
a
warranted
considered.
always
are
Be
that
in
it
as
ex¬
may,
in February
refunding
plans
of
a
being
announcements
March
to
pub¬
is
situation where alternatives to
isting
es¬
motivating
in
his
a
loans.
Secretary
lic
The
that
of
part
entire
economy
small
formula/! works
rate
of
and
for
maturing issues
future
behavior
which
the
the
.
.
and
.
Gov¬
pur¬
when
and prices
largest
sion,
the
problem
should
Europe;
the
isn't
it is whether
whether
not
or
we
honest enough with ourselves
to admit that our help is
forcing
up our food prices here at home.
"We at GMA consider the food
industry the Life Line of
The
life
line
is
Amer¬
made
up
the farmer who produces the
and packages them, the
jobber who distributes these prod¬
processes
in
wholesale
quantities, and
the retailer who makes the
goods
conveniently
available
to
the
homemaker.
"When
President
Truman
realized
that
this
was
it
stock
in
would
to
a
of
that
McClanahan
to
offered
rights
one
five
to
to
sub¬
share
new
held
now
holders
for
will
of
be
record
April 22.
*
*
*
Watling, Lerchen & Co. anct
Miller, Kenower & Co. were bid¬
ders recently for $107,000
City of
Charlevoix, Mich., electric light
iy2%
for
bond
power
specified
issue.
interest
an
and
The
bonds
maturing
through 1961.
:|c
C. Russell
:R
of
$676.24
of
Oct.
1,
1949
iR
Feldman, President
of International Detrola Corpo¬
ration announces that the com¬
the
boost
pany has issued and sold
$275,000,000.
000 of
$5,000,-
31/2% 15-year debentures
to the Equitable Life Assurance
expected
be
to
finance
the
Society of U.kS./Proceeds will
used to retire existing bank
com¬
loans and for additional
up
to the end of 1948. Chief object
the program is to eliminate
ing capital.
the service waiting list of
68,000
still without phones.
Application
of
families
s&
The
*
*
work¬
*
has
been
made by
Detroit-Michigan Stove Com¬
pany to list its 948,007 outstanding
the
Comptroller of the Cur¬ shares of $1 par value common
has approved an application stock on the "Big Board."
Cur¬
by the National Bank of Detroit rently, the shares are on the local
open
office
an
in
the
Buhl
mart and the "Curb."
Building, Griswold and Congress,
C. T. Fisher, Jr., bank
President,
announced.
bank's
This
31st
will
office
and
be
the
the
third
downtown.
:j:
First
of
Braun,
Michigan
Bosworth
*
What
*
the
Means
to
*
-
.
International
You
—
Booklet
what the bank is for,
Bank
telling
how it
was
organized, who its members
:J<
Corp.
&
and
Co.,
Inc.,
are,
what kind of loans and guarantees
it
make, how it will supple¬
can
ment
its
present
loanable
funds,
grocery industry in 1946 ran be¬
tween three and five cents
per
unit of sale.
etc.—International Bank, Office of
at least this much to
N.
ness,
paper—copies,
and
Industry must earn
stay in busi¬
supply jobs and to expand
build
"On
would
prices
for
the
of
these
that
seem
Relations, 1818 H. Street,
W.f
Washington,
6,
D.
C.—
on request.
facts, it
current
food
here to stay. But there
several
factors which offer
are
Public
the future.
basis
are
Charles A. Parcells & Co.
hope.
Spring is here and new
crops will soon be coming in to
swell our supplies.
The Depart¬
ment of Agriculture foresees an¬
task
Life Line of
year
of
big
harvests
if
growing conditions remain about
the
This
same.
should
farm prices should
mean
that
gradually sta¬
bilize downward. Another
hopeful
sign is that manufacturers are in¬
creasing the efficiencies of their
plants by scientific management
America, and
methods and by replacing old and
have intensified the purchase
by that no one segment acting alone
worn
machinery with new and
the
banks
of
could
higher
accomplish a substantial re¬
yielding
better models.
We can also look
Treasury issues from nonbank in¬ duction in the cost of food.
Established 1919
Members Detroit Stock
Exchange
Michigan Markets
639 Penobscot
Building
DETROIT 26, MICH.
Telephone
Teletype
Randolph 5625
DE 206
.
vestors
and
the
(i.e.
would
2 V2%
debt
thus
rate
to
monetization)
have
subjected
further
down¬
ward pressure as nonbank invest¬
ors
so
sought to
obtained.
reinvest
the
funds
forward
"Let's
which
examine
make
the
the
up
cost
factors
of
out
for
raw
materials
That the Federal Re¬
and
supplies, labor, local taxes, social
security, heat, light and power,
tained a market for certificates at
freight, warehousing, etc. — costs
the rate set by the
Treasury was which are inescapably established
taken for granted.
A Treasury
by other than the manufacturer.
willing to have done so could thus He can do little or
nothing about
have
The remaining
brought about conditions these charges.
whereby new issues of long-term 20% pays for such things as ad¬
bonds could have been floated at ministration, Federal taxes, mar¬
keting and profits. The record
serve
System Would
have
main¬
.
(Continued
on page
37)
shows
.
.
that the net profits
from
the
finished product. At least 80% of
the manufacturers' sales dollar is
paid
bid
coupon
premium
a
other
re¬
for a reduction in the cost of
food,
the grocery manufacturers whole¬
we
scribe
every
The
pany's construction program
of
raw
materials, the manufacturer who
ucts
stock.
assist
not
shares
T, N. Lacy, President, explained
that the new capital would be
*
are
ica.
history,
capital
decline.
should
or
construc¬
authorization
firm's
"For the purpose of this discus¬
we
Co.'s
an
grain, meat and dairy
immediately strengthen
advance
capital
*
.the
markets
and
when
Telephone
five-year
company's
to
that
Bell
finance
program prompted the di¬
rectors to authorize the issuance
of a $100,000,000 increase in the
in
steps in to make its
»
to
Exchange
President Chas. S. Hale
announced
and
#
tion
rency
trade
#
needed
Michigan
important degree on the manner
in which it will make these
pur¬
chases. It has been the
experience
the
Oil Co.
.
$220,000,000
Government will
of the
would
❖
will continue to depend to a
very
large degree On the quantities of
food
Stock
!:!
Township, Macomb
Mich., water and sewer
Capital
prices
heartedly endorsed his appeal. But
rate
*
Stock
has approved for listing 260,109
additional shares of $1 par value
Warren
|
when
of
York
ffi
extension and refunding
bearing interest at the rate
3V4%.
The bonds, which ma¬
ture May 1, 1952 to Nov.
1, 1976,
are
being
reoffered
to
yield
2.75% to 3.10%.
food prices can be kept within the
rgach of most people.
ered
certificate
*
Detroit
bonds
profit.
best
New
revenue
of
not paid off in cash, gave concrete
evidence of the decision to main¬
tain the %% rate.
To have low¬
the
*
The
V.
000
their
maturing issues, involving the ex¬ cently appealed for a reduction in
change of new %% certificates the cost of living, and specifically
for
Inc.
common
Manufac¬
when
This
a
time, by the Board of it weakens
short
that
arid
Governors of the Federal Reserve
the
market.
Government is out of the market
—
to
as
Henry VanderVoort, partner im
investment banking firm of
McFawn & Co., has beeife
elected a director of Fry Products*
Cray,
#
of
highly competitive
depends for suc¬
a
mass
over
ernment
Chicago pub¬
*—
nite
in terms of in¬
terest rate trends
.•students
its
the$-
market in the light of the
interest rate pattern and the
icy.
of
Obligations," the Northern Trust Co.
observations
some
money
low
annual
1.10% for maturities
1948-52.
the
Sattley & Co., Inc., and
associates, have purchased $420,-
population out of the market
chases
the
food
buy for relief purposes, and to
Business Financial Position
In
slo¬
the
which
a
know
"The
Treasury's Debt Redemption Policy Weakens
Northern Trust
than
more
H.
try is built around the1 simple
formula of big volume, high turn¬
establish¬
management
money
after 1914
and
S(€
the
on
County,
know
we
prices,"
Corp.
the grocery manufacturing indus¬
The vital difference between
the
*An address by Mr. Adams be¬
the Queens County Bankers
is
business.
ment of the Federal Reserve Sys¬
tem.
'
of
Application has been made to
list the capital stock of
Udylite
their goods. A penny here or
there at retail can make the dif¬
ference between greater or lesser
management as
of it. today was
think
1914
on
turers
the
born
fore
take
reduce
"This
which commercial banks operated
we
the invest-
will
to
business
throughout the 19th Century could
be classed as a form, a very loose
form, of monetary management.
But
considerations
it
realists
as
with
prices go too high they run the
risk .of pricing large
segments of
of
of
.-.
.
consistent
industry spokesman declared,
an¬
since
ever
manufacturers
1791.
All
1948
of
Michigan
the high bidders
*
the first Bank of the United States
chartered in Philadelphia in
provisions
,
.
in
have
offered at l^s at prices
ranging
from .80 to
Exchange.
a
strong selfish motive for
selling their products at the, lowest
that
in
*
.
Mr.
have
means new.
we
from
First
of
one
'
•
grocery
but
You could say, I sup¬
ceilings,"
cess
(1)
•
"The
!
costs
was
Ways:
government
Willis said.
Defined in these general terms,
monetary management is by no
other
Sherman
last
prices
that
of
$194,500 City of Dearborn
special assessment general obli¬
gation bonds.
The issue will be
the
for a $250,000 issue of
Louisville,
Ohio, School District Bonds.
products being offered for sale to¬
at retail prices, below their
possible
management
maturities
1952.
also
was
day
credit conditions and interest rates.
pose,-
the
problem of
bank invest¬
was
,
Just what do we mean by the
term monetary management?
In
general, of course, we have in
management;
namely,. the
the
through
For several years
■
£
was
offered as iy2s and
l3/4s at
prices ranging from 1.00 to 1.50%
to mention
time.
some
ije
Michigan Corp.
such items as
margarine, successful bidder for an issue of
shortening,
soaps,
some
soups, $70,000
Muskegon
Township
canned
beans,* spaghetti, juices, School District Bonds.
The issue
dairy
■*.
destroyed savings incentive
policy is likely to continue for
s{t
First of
are
a few. Such
reductions,
through the trade to
now there has been one factor that has over¬
point of sale, disprove a popular
shadowed all others in its
importance in connection with the prob¬ misconception that
all
grocery
lem Of bank
prices have been shooting skyward
investments.
ment
policy of the individual and are far above former OPA
"That one fac¬
bank.
ceilings. Actually there are many
tor
-
Service Caster and Tuck
Corp, of Albion has filed a registration
with the SEC
covering 32,000 shares of $1.40 convertible*
preferred stock, par $25, and
53,962 common shares, $1 par. The
preferred will be offered by an
underwriting group at $25 a share
and the common at
$10 a share.
Proceeds, together with a bank:
loan, will be used to pay indebted- <$-ness to the Domestic
Credit Corp.
have purchased
jointly an issue
statement
"The downward trend of food
prices has already begun," Paul S.
Willis, President of the Grocery
Manufacturers of America,
Inc.,
declared
Mr. Adams points out
monetary management since 1942 has been
controlled by Treasury
with needs of
U
to
higher
productivity
labor.
"All
that
of
we
tion of
these
may
facts
expect
give
a
hope
continua¬
in prices. In my opinion there will
be
more
will
be
months
industry
once
price
ahead.
is
again
in the bills."
Latest
Information
price declines than there
increases
Because
accustomed
forming miracles, I
lowering
C. H. DUTTON
orderly downward trend
an
ways
the
am
in
the
the
food
to
per¬
sure
that
will be found for
family's
Moreland & Co.
Member
Detroit
Stock
1051 Penobscot
Exchange
Building
DETROIT 26, MICH.
grocery
Bay CKy
—
Lansing
■—
Muskegon
On May 7, Putnam
of The Wiremold
& Co. offered 11,000 shares
value,
Company 5% Cumulative Preferred Stock, Series A, $25 par
at $26.30 to yield 4.75% based on the annual dividend rate of $1.25.
Located in Elmwood, West Hartford, the company was incor¬
porated in 1919 as the American Wiremold
adopted its present name.
The president,
held that office since 1919.
v—
Gull Sees InfB Fund
Toppers to Hold Annual
Connecticut Brevities
,
Thursday, May 15, 1947
THE COMMERCIAL & FINANCIAL CHRONICLE
026:8)
12
Company, and in 1926
Outing
"i
outing
Country
the
at
•
v
•
as
Reconstruction Aid
*
•
'•
•
••
of International Fund, returning from trip
through Western Europe, reports progress in restoring production,
and promises assistance in bringing about stable and orderly cur¬
The Toppers will hold their an¬
nual
'
Managing Director
May 29th
on
*
'
*•'
Westchester
rency
Club, Rye, N. Y.
on May
29th. Attendance is limited to 225
and exchange arrangements.
Chairman
members and almost all tickets
of the Executive Board of thev International Monetary Fund, issued
have been applied for. Those who
—~
<$>r—
the
following
of Connecticut Gas & Coke. The have not yet made reservations
statement
pected this year.
The degree of
«iThe company is engaged in
principal assets of the latter com¬ and still plan to attend the outing upon his re¬
the manufacture and sale of:
progress will depend mainly upon
are urged to send in their requests
pany consist of 273,911 shares of
the further rebuilding of trans¬
turn from an
(I) Wiremold raceways and
New Haven Gas Light and 20,999 at once. The Committee will make
portation
systems and upon in¬
European
in¬
fittings which provide a com¬
shares of Hartford Gas. Under the every effort to accommodate such
creased supplies of coal.
Despite
spection trip:
plete system from panel box to
requests.
'
1
>*
••
plan of dissolution scheduled for
the most stringent economy in do¬
"I have just
outlet for surface wiring with a
This year special prizes will be returned
July 1, the UGI would deliver to
mestic consumption, every country
special iyyc
or sieei conduits.
Connecticut
Gas
&
Coke 350 awarded, drawing for which will from a visit
in western Europe is desperately
.'(2) Wireduct and auto cable shares of New Haven Gas Light be started on May 23rd. Books on to seven coun¬
short of coal for industrial use.
housing
(loom) — non-metallic and 10,841 shares of Hartford Gas the purchase tickets for the spe¬
tries of westEvery effort must be made and is
flexible conduits made principally and
$30,000 for liquidating ex¬ cial prizes will close by 5 p.m. tern
being made to increase production
Europe
of cotton and paper treated with
of coal.
penses.
May 22, or sooner, depending upon that are mem¬
/
'
flame-retarding and moisture-re¬
the sale of the remaining tickets.
bers
of
the
,"The
Connecticut
Gas
&
Coke
expansion
of
industrial
sistant compounds. These conduits
Among the special prizes will be I n t ernational
would then distribute its port¬
production has been accompanied
are used to protect electric circuits
a
new
1947
Dodge
Four-Door Monetary
folio
assets
to
its preferred
by an even more marked expan¬
outbuildings, automobiles, trucks, stockholders on the basis of Custom Sedan.
Fund
Bel¬
sion of exports.
All things con¬
buses, etc.
Camille Gutt
Events
of
the
day
will
include
gium,
Den¬
1.375 shares of New Haven Gas
sidered, the countries of western
(3) Chernack Air Duct — the
mark,
Eng¬
in
charge
of
Ronald
Morton
golf,
Europe are doing reasonably well
Light and 4/25 shares of Hart¬
company's latest major develop¬
of
"The
Blue List";
tennis, in land, France, Luxemburg, Nether¬ in restoring their export trade.
ford Gas for each share of pre¬
ment.
This tube, designed for
The purpose They have a long way to go be¬
charge
of
Daniel
O'Day,
the lands and Norway.
ferred
held.
The
dissolution
heating,
ventilating, and airNorthern
Trust
Company; Lun¬ of my visit was to see the progress fore they will be able to export
plan has no provision for the
conditioning purposes, is made
that is being made toward Recon¬ enough to pay for the imports on
cheon and Horseshoes in charge
common stockholders.
of fabric formed into a tube by
of Richard Rand, Rand
& Co.; struction and to discuss with the which Europe is dependent.
means of a helical metal mem¬
authorities
of
these
softball, in charge of Gilbert V. D. monetary
"There is good reason to hope
ber, The fabric may be of cot¬
Acme Wire Co. reported net
White, R. D. White & Co., and countries the work of the Fund.
that the steady struggle to rebuild
ton, nylon, or glass, impregnated
income of $356,523 for the year
Robert
Doty of Tripp
& Co.;
"These
countries are working these countries will be successful.
with various compounds to meet
ended Dec. 31, 1946, compared
swimming, in charge of Andrew hard to repair the ravages of war It will require hard work and
customers' requirements for re¬
with $194,822 for 1945. On a per
J. Brodie, Estabrook & Co., din¬
and
to restore their economies.
help.
Labor is scarce for the
sistance to heat, moisture, or
share basis, earnings were $3.09
ner, and the awarding of prizes.
The problems they face are not many urgent things that must be
chemicals. This air duct is used
and
$1.68,
respectively.
Net
the
same
in
all
countries. done.
Only with increased pro¬
working capital at the end of
iffpr heating, ventilating and de¬
But they do have this in common duction
will
Europe's economic
frosting automobiles, trucks, and
1946 was $1,330,036 against $1,—the
solution of their postwar
problems be solved.
Credits for
buses; supplying fresh air to or
187,471 a year ago. Earned sur¬
economic problems depends pri¬ equipment
to
reconstruct
and
/exhausting foul air from holds
plus was $753,610 and $581,885,
marily on the progress they can modernize their industries will
of
ships,
tanks,
excavations,
respectively.
make in restoring agricultural and assist these countries in restoring
The
WASHINGTON—Camille Gutt, Managing Director and
D. Hayes Murphy, has
*
—
.
—
,
N. Y.
.
Municipal Bend
Club Gets Nominations
i
airplane en¬
gines and air-conditioning air¬
plane cabins before take-off;
ventilating
engine
compart¬
etc.;
nominating
pre-heating
*
*
*
the Municipal Bond
Farrell-Birmingham Co., Inc., of
sold their Atwood
formerly the Atwood
Machine
Co.
pf Stonington, to
In addition, the. company makes
Universal Winding Co. The latter
special
products - consisting
of company has arranged a 15-year
metal stampings and rolled shapes.
loan from New England Mutual
/Present capital consists of $500,- Life Insurance Co. in connection
000 first mortgage sinking fund with the purchase.
33/4.% bonds due June
1, 1961;
sjs
*
*
11,000 shares of 5% cumulative
The Aetna
(Fire) Insurance
,$25 paf preferred stock series A;
Co. has plans to raise some $10,128,021 shares of class A $10 par
000,000 additional capital by the
icommon stock, and 40,000 shares
sale of 250,000 new shares of
jof class B $10 par common stock.
capital stock, thus bringing out¬
I' I
Proceeds derived from the
standing capital stock to one
j sale of the 5% preferred will be
million shares.
•
,
ments of power
boats.
has
Ansonia,
division,
\
| used to pay off bank loans, for
j the purchase of new equipment,
J, to increase working capital, and"
} for general corporate purposes,
i
.
*
*
*
i 1 In
compliance with an order
dated May 7, 1942, United Gas Im¬
Empire' Co;
The' Hartford
re¬
ported net' income jof $197,935 or
420 a share for the first" quarter
of 1947.
613
or
Connecticut Gas & Coke Se¬
curities
UGI
Co.
approxi¬
owns
stock
mately 70% of the common
$7,777,341
against
similar
Members
New
"" '1!
York and Boston Stock
i'
*
*
Curb
Exchange
pet Co. reported net
on
Securities
Hartford 7-3191
sales
HF 365
for
shares
period
sponding
BOwling Green 9-2211
$159,405 or
deficit of 640 a share
309,609
New York:
System Teletype:
based
309,109 common shares, com¬
pared with a loss of
a
Bell
income of
$505,610 or $1.51 a share,
Hartford and
Don¬
Secretary; Frank
Lucke, Laidlaw & Co., Treas¬
L.
Leonard
and
urer;
Sullivan,
R.
of
board
member
governors
(1950).
:
annual
of
tion
meeting
will
officers
and
these
for
$13,188,734
and
in
based on
the
corre¬
Net
1946.
periods
were
$6,715,789,
June
Country
Dempsey is Chairman
ofsv the. nominating
also
which
Brewer
) committee
includes
S,
Orlando
Wm.
Mericka
J.
of
members
Exchange,
of
their
&
necessary
order
to
rebuild
consumption in
their countries.
production in western Europe this change arrangements are an im¬
year will be below the levels that portant
element in building a
hoped for.. Larger food functioning world economy. They
imports will, therefore, be neces- believe that the Fund is essential
_
"In
industry, progress in restor¬
This is most, encourag¬
creased.
ing;/! Further progress may
be ex¬
provide a basis for international
cooperation on currency problems.
I have assured them the Fund will
to
do
possible' to
everything
currency
strong
help
placing their international
them in
relations on a sound $nd
ba&s^t?
W
U:;
NSTA Notes
Inc.,
Co.,
the Cleveland Stock
the removal
City offices
announce
New
York
The
will
be
re¬
new
150 Broad¬
telephone number
The Securities
Horsfield,
President of the
Vice-
firm, is Resident
Manager in New York. J. V. Bond
is Assistant Manager.
Mr. Horsfield is Chairman of the
Committee
Publicity
of
the
Na¬
tional
Security Traders Associa¬
tion, and Secretary of the Secu¬
rity Traders Association of New
York.
A.
A.
Sikora,
formerly of the
with the firm.
U. S. Army, is also
Was
The
Financial
Chronicle
Mr. Singer
previously with Field & Co.,
Markets—Statistical Information
Benn With Hirsch
to
Chas. W. Scranton & Co,
Exchange
New York Canal 6-3662
Waterbury
Danbtiry
3-3166
5600
Financial
Chronicle
Benn
in
the
past
was
with
Pierce & Cas-
satt and Sutro Bros. & Co.
Traders Association of
Detroit and Michigan have
Golf Party from July 15
at the Orchard Lake Country
Club, Orchard Lake, Mich. On the evening before the party, July 21,
a Buffet Dinner and Cocktail Party for out-of-town guests and mem¬
bers will be held at the Savoyard Clubs, Detroit.
Harold R. Chapel, President, in his semi-annual report to mem¬
bers, announced that the membership of the Association is at an
all-time high.
During the last few months 25 new members have
been added, making a total active roll of 190.
President Chapel also
stated that Charles C. Bechtel of Watling, Lerchen & Co. has been
appointed to the Municipal Committee of the National Association,
to
July 22.
The party will be held
SECURITY TRADERS
ASSOCIATION OF LOS ANGELES
of Los Angeles eortiBowling League, a total of 84 games
were bowled.
Team honors were taken by Saul Miller, Edward J.
Bourbeau & Co.; Bill Johnson, Cruttenden & Co., and Bill Davies,
Butler-Huff & Co., with a team average of 454.
Saul Miller with
season average of 182 was high man in the final standing and
Scotty Stout, First California Co., with a 246 single game and a 683
On
May 1 the
pleted their
series took
i
Security Traders Association
second Handicap
the balance of
a dinner was
1010 Euclid Avenue.
Merrill Lynch, E. A.
ASSOCIATION OF DETROIT
of their annual Summer
changed the time
in proper
Mr.
"
The
CLEVELAND, OHIO—Ernest G.
Benn has become affiliated with
Hirsch & Co.,
Haven 6-0171
SECURITIES TRADERS
AND MICHIGAN
BArclay 7-3550.
Geoffrey
Inc.
even
had been
New Office in N. Y.
L. J. Werschkul & Sons, U. S. Na¬
194
They are denying themselves
job.
Witt. J. Mericka in
tional Bank Building.
Connecticut Securities
Teletype NH
un¬
and E. Norman Peterson.
PORTLAND, ORE.—Harold I.
Singer has become affiliated with
Fifty-sixth Year of Dealing in
?-4301
The
ing . production has been more
20th, at Sleepy
In every country. I vis¬
Club, Scarbor¬ marked.
ough, New York. +
ited, industrial production has in¬
Friday,
Hollow
to
New
Europe.
„
. .
Early Spring floods have They deserve help.
prevented new planting in many
"The
monetary authorities of
areas and have also caused large
the
countries I
visited are all
losses in livestock.
Agricultural aware that stable and orderly ex¬
on
spectively.
Members New York Stock
in
one
production.
Their
people are
working hard, very hard, to do the
ing.;
elec¬
held
be
Singer With Werschkul Co.
Primary
hard
a
precedented frost has done con¬
siderable damage to Winter plann¬
sary.
The
way.
Bigelow-Sanford Car¬
31, 1947,
Primary Markets in
Vice-President;
York,
ald C. Patterson,
T.
Members New York
A Connecticut
New
G.
from 29 Broadway to
'
;■
*
-
quarter ended March
For the
Exchanges
Associate
of $6,386,984
$5,532,835 at the
corresponding period in
compared with
1946.'' " ;
Brothers
year
Couffer, B. J. Van
Ingen & Co., President; Dana B.
Scudder, National City Bank of
Jame$
ago,
year
a
while earned surplus
end of the
Tifft
the
1947-48:
been
This compares with $458,-
980 a share for the
provement Co. has submitted to quarter last year. Working capital
.the SEC a plan of dissolution of on March
31, 1947 was $7,000,456
The
for
officers
of
slate
•ilLv Walter
•
committee of
industrial production.
Club of New
"The past Winter has
York has submitted the following
the honors.
held at the University
fashion.
Club to wind up the season
,
SECURITY DEALERS ASSOCIATION
Georgia Security Dealers Association will hold its annual
GEORGIA
The
outing
at-Brookhaven Country
Club, Atlanta, on May 30.
—
Volume 165
Number
4594
THE COMMERCIAL &
FINANCIAL CHRONICLE
Stock Market
Operating
On Pendulum Psychology
By
.
-
.
G.
Y.
Partner,
Nutrine Candy Co. on
May 8 filed a registration with the Securi¬
and Exchange Commission
for the issuance of 100000 shares
$1 par common stock to be offered
by seven stockholders.
Stifel,
Nicolaus & Co. heads the
ties
underwriting
#
Ligonier Co. will
clines, and points
common
on
oppor¬
Stock market
psychology operates
ending.
sequently
prices carry to
extremes
but
never
remain
situation,
resulting
iii down side
and
sion
the
return
of
about
5-6%
about
3-31/2%
stock
be
Gordon
Y.
Billard
of
general
more
level
market
the
of
either
substantial
purposes
a
would
price
proportions
first
in
of
last
frantic
markets
dealer
such
in¬
of
the
In
the
do
not
un¬
in
weak
speculators
when
as
last
result
a
indigestion
of
the
the
in
a
to
war);
be
hardly
manufactured
(Continued
issue"
32%
Western
in
(Mo.)
on
to
note
be
and
*
the
month
first
for
last
$31,691,000,
117,000 for the
for
of
this
quarter of this year
*
Net
operation,
a
year
accounts
*
31,
pro-
*
of
ago,
on
"
..
Foreign Lending
*
Missouri
first
ported
.
the
WASHINGTON, (Special
to the
"Chronicle")—Under questioning
House Banking and
Currency Com-
by Republican members of the
mittee
on.
May
C h
W
i
a
,
i
-
12,
r m
a
n
M
m.
Snyder,
c-
plain
Chesney Mar¬
port
Bank
testified
that
in
opinion
fur¬
ther foreign
distinct
year
as
in
in
the
United
Wm. McC. Martin, Jr.
lending,
of
the prospective
payments
of
the
States
and
the
practical
difficulties of foreign countries
making payment and of this coun¬
try receiving payment. Said Mr
Martin:
think
"In,
terms
we're
in
of
lending, 1
danger zone
the
'hoto."1
Banking
Jesse
and
tee stated
Wolcott
Currency
his
committer
intention
this
of
and
report,
marks
of
fett
can
he
that
the
make
make
Representatives
of
and
Nebraska
Secretary
of
the
Banking
an
the
advisory
Wolcott's
re¬
prompted by efforts
Ohio
ex¬
ume
some
dollar
are
and
and
the
Frederick
Dutch
bonds
000
i
t
v a
issue
in
of
the
filed
was
with
of
33/4%
$20,000,-
the
C.
Martin
has
SEC
testified
that
Mr.
Martin
also
his
and
$9,543
year
the
over
in¬
corre¬
^period last year.
ended March 31, 1947,
a gain of $37,-
$113,952,;
was
the
over
preceding
12-
month period.
;
;
^
*'
sjs
■
;
•
,,
satis¬
a
a
year
*
*
of
$3,967,605,
Monsanto
first
to
against $3,926,368
charges
as
with
dividends
amounted
nual
provisioh
year
the
series
A
the
end
effect
change
of
to
stock
the
outstanding at
period.
Giving
the three-for-one ex¬
of
stock
in
July,
1945,
Stern
Bros. & Co. in
charge of the trad¬
ing department.
;>
i
Theodore G. Honig With
Dempsey-TegeEer Co.Tneoqore C.
Honig has ber..
come
asso¬
ciated
.-t h
w
Dempsey-Te¬
geler & Co.,
407
North
Eight
Street,
members
o
f
the New York
and
St.
Louis
Stock
E
changes
other
x-
and
leading
e x-
changes.
Honig
formerly
charge
Mr.
.
was
i
Theodore C.
n
the
of
,
Wholesale and
for White
&
re.ail
Honig,
..
department
Co.
With Sla^ton & Co.
LOS
•A; ?
ANGELES, CALIF.—-Peter
R. R. Scarr is now with Slayton &
Co., Inc., 3277 Wilshire Boulevard.
Metropolitan St. Louis
to
$509,950
in
!
COMPANY
taxes
-
1946
718 Locust Street'7
Saint
Louis
1,
Central 8250
*
Lucky
*
Tiger-Combina¬
L.D.208
St. L. 499
-
tion. Gold Mining Co., in its an¬
After
on
stock,- net for- the
quarter was equivalent to $1.19
per share on the 3,961,693 shares
common
income
*
The
th£
the
POSITION
that
plied
membership
for
Finland
report
1946,
for
the
shows
assets at Dec. 31
against
of
total
current
$106,641.
after
The
income
after
charges
taxes.
current
$157,823,
ST. LOUIS
$86,-
was
and
Federal
Bullion
deducting
as
liabilities
consolidated
loss for the 12 months
094,
calendar
total
of
sales,
royalties
of
$10,056, amounted to $90,919.
and
tin
testified
Hearst Consolidated Publications "A"
Mid-Continent Airlines
in
the
Old Ben Coal Corp. Com.
British
business
interests
and
have
been
pressing the Ex-Imp to
tend
credit
to
to the United
finance
ex¬
shipment
Kingdom of capital
LANDRETH
BUILDING
ST. LOUIS 2, M0.
the
American
Peltason Jensnbaum Co.
Chicago & Southern Air Lines
ap¬
Bank.
that
MARKETS IN
Berkshire Fine Spinning Assoc. Com. & Pfd.
has
reply to a question from
Representative Buffett, jMr. Mar¬
L.D.240-
Teletype—SL 486
Southern Union Gas
Velvet Freeze
Collins Radio
National Oats
Delhi Oil
Steel Products Eng.
Taca
Universal Match
Airways
Rockwell Mfg.
Stix & Co.
INVESTMENT
SECURITIES
Cliffs Corp.
509
OLIVE
STREET
goods, the financing of which had
been
the
intended
American
the
UK.
been
sumers
to
be
covered
by
SCHERCK, HICHTER COMPANY
$3,750,000,000 loan
The
used
loan,
instead
I
however,
of
con¬
goods, Martin admitted.*
Bell Teletype
SL 456
Landreth Building
St.
r
was
1945.
1947
of
preference
{
Federal
were
Chemical Co. for
quarter
$4,944,502.
for
and
Texas City
net income of
the
i',o
r
St. Joseph Light & Power Co
reported for the year ended Dec
31, 1946 total operating revenues
compared with $345,840 for the
preceding ye^r.: As ofj the close
of- 1946,
currents, assets
totaled
$1,785^700, and current liabilities
$691,285, as against $1,385,152 and
$569,121, respectively, at Dec. 31.
were
P
e e.
thereto he
For
at
profits
Bank
informed
Committee
has
Treasury
of
in¬
amounted
no
Brazil.
to
the
1
Richard W. Satterlee
last
plans to open an office if
France
or
elsewhere
abroad
apart from its present small office
to
have
and
victims,
credii
10-year
re¬
April vol¬
employees who
of
amount
year
"although
After making a provision
ojf
$500,000 to provide relief for its
of
1 y -underwritten
e
that
*
secur¬
govern¬
dent of- Lueas,
Farrell & Sat-
week.
Howard Buf-
p r
102
the
and Federal
This was an
taxes.
come
this
for
net income of $33,352,
a
sponding
the
of
Co,
President,
-
a
large
preferred
has
had
other
31,
Ave¬
forme r\l y
V i c e-Presi¬
national
Drefs,
factory level—higher than
would
In
credit
Committee,
said.
were
Smith of
.
of
scope
Currency
latter still
un¬
the
Ex-Imp
applications
for
World Fund
session
agencies, not excluding the NAC.
If' foreign lending does not fall
the
was
Dutch
these
March
ago—stilly there i is some evidence
of hesitation in forward
buying.'!'
of
liquidate
Holland
A
the
Commit¬
credit, study of all Federal
under
from
in
''-^Chairman
NAC
ments, Martin said.
government
of
ex¬
the
The
steady
to
light
balance
to
Among
stocks.
both
private and
the
amount of common
remarks
take
time
Dutch-owned
ities.
would
that
steps
the
be very risky.
Mr.
Martin's
seemed
the
at
ago
take
from
gifts
to
now
of
at
years
for 1945; Net income after
Arthur " G.
tension of Ex-Imp credits to the
Netherlands Government about a
his
lending
NAC, John W.
relations
Ex-Imp.
derstood
outstanding
Co.,
timore
~
stated
Martin testified that it
Import
-
the;
summoned
the
with the
tin of the Ex¬
of
$1.02 per share on
shares • of
common
1946.
<$-
Chairman
343,047
stock
•
to
seven
*
Edison
charges
crease
het
*
quarter
after
stoc^k
$457,379, equivalent to $1.29
on each of the 355,787
shares outstanding March
31, 1947.
This
contrasts
with
$348,648,
equivalent
1940,
$4,513,609
ago.
March
common
and
year
31,
i
ended
share
per
$8,197,increase of $1,652,697 over
Jan.
over
'
amounted to
year
an
were
Chairman Martin of Export-Import Bank tells House Committee
prospective difficulties in effective international
payments, make
further loans in lieu of gifts
risky. Reveals pressure to finance
shipment of capital goods to United Kingdom.
i
the
previous
provision for preferred dividends
amounting to $17,867, the profits
the
for the fiscal year ended Jan
814,
compared to $369,898
quarter of 1946. After
-to
was
the
earnings of McQuayManufacturing Co. were
available
This
on the present $5
stock) was $2.35 per share.
The working capital at the close
an
*
quarter
reserve, as
in the first
record,
before
provision of $250,000 for possible
$475,245, after Fedeial and State
taxes, and a $200,000 contingency
Sees Danger in Further
profit of the Stix, Baer &
31, 1947 was an all-time
amounting to
$3,017,735
1947,
Norris
page 39)
❖
31, 1946 (based
were
compared with 1,556
the
*
' K.
&
Fuller Co. for the year ended Jan.
April 30 had
April 30, 1946.
For
to
par
over
wholesale
as
amounted
i t h
w
g e
nue.-; Mr. Satt e r 1 e e .; was
:
and Australian subsidiary
companies) at the end of the first
$70,132,483, as against current lia¬
bilities of $11,231,091.
asso¬
Inc., 1016 Bal¬
to
British
ure
corresponding
246 retail units in
1,749
amounted
increase of 47%
equivalent to $4.94
per share on the outstanding com¬
mon
stock ($5 par value)
after
deducting preferred dividend re¬
quirements.
The comparable fig¬
against $30,-
as
The company on
while
1947
an
e o r
Baum
ended
Current assets of this company
its
subsidiary
(excluding
cies.
period in 1946.
increase of ten
months
inventories, and other contingen¬
for
and
year,
months
year
31,
ciated *
G
sales
net
future decline in market value of
Co.
sales
has
1946
common
and
gen¬
Supply
total
four
three
to
April, 1947, of $9,674,099, com¬
pared with $7,906,000 for the
pre¬
goods
pro¬
used
*
Auto
reports
(this
higher than
con¬
shares
stock, the
.
down
90%
be
serial
60,000
are
*
prewar); machinery production is
expected
bank
$500,000
Co. of St. Louis.
May 1948) is expected to be down
20%
(this would be 52% above
would
common
Commis¬
of
4^2%
which
further
can
Exchange
Se¬
working purposes. The prin¬
cipal underwriters are Dempsey,
Tegeler & Co. and J. W. Brady &
ton sources, iron and steel
produc¬
tion at the bottom of the business
setback
(now placed at around
extensive
"new
retire
during the past week.
According to unofficial Washing¬
and
summer
decline
of
the
in
per
sales for the corresponding
period of 1946.
eral
investment
possible
par
appearance
a
existed
as
for
of $1
ceeds
same
tight position. In the
place, there are no heavy
inventories' of securities
second
All
Blueprint of the long-awaited
business relapse finally made its
probably
fall.
fashion
do
as
caught in
with
ago.
the
W.
Sat erlee
become
over
with
and
earnings
cents
Consolidated
March
*
issuance
bonds
74
$36,216,506,
*
mortgage
vertible
Blueprint
un¬
down-
debacle
place," investors
load
year
scope experienced
or 1929 or 1920.
1937
stock
buying by investors for
come
fall
of
the side of
on
dervaluation,
prevent
a
for
name
..
statement
for
first
yield
contrasted
as
any
pessimism, but
scale
is
logical conclusion would
be that the nature of the
to
extent
with acute
the
presently
available
the
and
prob¬
coincide
prices is
Cash
quarter
were
caster, Pa.,
Bonds still provide
about 2V2%.
Good
equities
first
share.
Bearings Co. of America, Lan¬
on May 8 filed a reg¬
curities
seem
163Dow-Jcnes
since
ultimate
equities.
or
the
Richard
<$
16
up the
two-for-one
a
change
*
istration
media
penetration of
ably
its
to
June
split
on
frigerator Co.
logic points to the superior posi¬
tion ox equities as against other
further weak¬
would
of
and
cash, bonds,
grade
In the pres¬
ness
short
to
stock
market.
In the third place, the
choice facing the investor is either
a
great
any
length of time.
ent
arrest
unproductive.
at such
points
for
to
Con¬
proposal
vote
K AN S A S
CITY, MO.—
group.
*
of the company to
Hussman Re¬
pendulum basis. A swing,
on a
started, is virtually* impossible
a
basis
tunity for long-range buying, but threat of still lower
prices is real.
once
*
The stockholders of Ilussman
Market analyst sees stock
prices on side of undervaluation with
no
price dsbacle likely. Co-relates stock market and business de¬
furnish
With Geo. EC. Bausn Go.
of
BILLARD
13
Richard SaUerEee Es J
Missouri Brevities
<
R. Williston & Co.
out further market weakness
may
(2609)
Louis
2.
Mo.
St.LouisI.Mo.
.
Garfield 0225
L. D. 123
f • «
,
Members
St.
Louts
.
Stock
!
!.
Exchange
14
-
•
(
t
,
net
total
Bank and Insurance Stocks
the
Dividends disbursed during
represented1:53% 'of
threeyears,
operating
profits,
;
•
.Under renewed stabilization agreement
.
only 42.5% of combined net oper¬
ating
and
security profits, i It
should
also
be
noted > that
the
DEUSEN
amount
of
•
$50
which were
earnings
This Week—Bank Stocks
distributed
amount
New York City
the
price they were
same
& Poor's
weekly index.
cisely the
19456
regard to individual bank stocks, some are
With
others
lower,
are
as
%
Central
355
Hanover
38
37
39
423/4
Corn Exchange
48%
553/4
—
Manufacturers Trust
_
National City
—
New York Trust
_
52%
36%
41%
93%
.92%
adjusted for stock dividends to represent
0.4
(
intervening three
Net
Mr. Rodrigo Go¬
representing the Banco de
Mexico,, today executed a new
Monteros, and
for
mez,
Miguel Aleman
$50 million
the two countries.
of this
ana Minister of rinanct
terion,
the Bank finds certain
Beteta, the United States Stabili¬
zation Fund undertakes for a pe¬ projects worthy of further detailed
consideration.
However, all of
riod of four, years
commencing
them involve factors which, in the
July 1,''1947, to purchase Mexican
present capital¬
Surplus &
Reserves
etc.
The
Financial
Chronicle,
j
.
to an amount
pesos
board's
equivalent to
tional"
CALIF.—Wil¬
ANGELES,
$50,000,000
formerly ■ Vice-PresH larges the Stabilization Agreement
& Co.. Prior of 1941 which was twice extended
he
was
First, Calif for^ two-year
with
1
Central
Hanover
♦Chemical Bk.
& Tr..
Corn
Exchange
First
National
36.88
1.03
32.98
1.18
42.44
.87
41.66
1.02
.99
-56.05
56.59
.98
1.23
1359.80
1358.18
1.17
291.42
.97
321.66
■
.74
58.27
.90
46.38
47.13
.88
104.78
105.33
.87
1.20
tNational City.
38.29
.95
New York
85.34
1.09
;
.80
.90
/
1.01
'
'
'
'i
-
.87
The Financial
to
DETROIT,
.88
>
•
■
Hammond
Building.
tr^e
to
Co.; Int.
* ' '• ■
;
ST.
The
LOUIS,
Waddell
Financial
of
SECURITIES
Chronicle)
staff
to the
Herrick, Waddell & Co., Inc.)
418 Locust Street.
With Crummer & Co.
129
Stock Exchange
I. S.
i
Teletype—NY
;
MArket
1-1248-49
Chronicle)
3-3430
N. Y. Phone—REctor
Go-
NEB.—Frances
'
(L. A. Glbbs, Manager Trading Dept.)
countries
two
—
the financing
poses
International Moneboth countries
will in fact
supplement the efforts of
of the
try Fund, of which
are. members,
and
Antonio Espinosa
'
Ambassador of Mexico,
Senor
Dr.
Don
de los Monteros,
to
Embassy of Mexico,
international organization to Washington, D. C.
The text of Ambassador Monte¬
- the
rates, of exchange
>
betweed all the member coun¬ ros' letter follows:
serve
2-4383
stabilize
tries.
-
The Hon. William
WHOLESALE MARKETS IN
f
WASHINGTON
of Di¬
May 2,
Dear Mr. Martin:
19471.
j:
I acknowledge receipt of your
Export-Import Bank
kind
note of April 30, 1947, in
of Washington, and His Excellency
which you inform me that the
Dr. Antonio Espinosa de los Mon¬
Export-Import Bank is prepared
teros, Ambassador of Mexico to
to approve credits up to $50,000+
the United States, today released
,
•'
'
the text of
their letters of
and May 2,
•-
.
.
.
GEIER 1 CO.
'
McC. Martin,
Jr;,: Chairman of the Board
Royal Bank of Scotland
BANK and INSURANCE STOCKS
EMBAJADA DE MEXICO
.
Export-Import Loan
April 30 000 to finance the dollar require¬
1947, regarding addi- ments in connection with various
ional credits to Mexico by the projects of interest to my Govern¬
ment.
- \ I
Inc., of Texas, Insurance Building;
Export-Import Bank.
I have transmitted the contents
The text of Mr.- Martin's letter
I' J
follows:
'
! of your letter to my Government;
so that we may proceed on further
EXPORT-IMPORT BANK
detailed study of those projects
OF WASHINGTON
which your Bank is prepared tp
Incorporated by Royal Charter 1727
April 30, 1947.1
consider at this time.
" *"-,l
My dear Mr. Ambassador:
;
HEAD OFFICE—Edinburgh
It has been a source of deep
The
Export-Import
Bank
has
Branches throughout Scotland
satisfaction for me to receive fur?,
been giving careful consideration
ther assurance of your desire to
o
your applications, dated Feb¬
LONDON OFFICES:
cooperate financially towards the
ruary 26, 1947, for a series of loans
attainment of well-balanced +99?
3 Bishopsgate, E. C. 2
intended to promote the economic riAmin voln + innp
nomic relations betweqif 6Ur tWo
8 West Smithfield, E. C. /
development of Mexico.
countries.
You
will appreciate that the
49 Charing Cross, S. W. 1
i
Cordially yours,
imited resources now at the dis¬
Burlington Gardens, W. /
(Signed)
v
posal of the Bank would alone
64 New Bond Street, IV. /
ANTONIO ESPINOSA . !
OMAHA,
chenouer is with Crummer & Co.,
1891
18 Clinton St., Newark 2, N. J.
Telephone: BArclay 7-3560
Bell
Rippel & Co.
Established
BROADWAY, NEW YORK 5, N. Y.
work with you on
rectors of the
(Special to The Financial
York
/
The
STOCKS
New
great satisfaction to
these proposals
because of the fact that we share
a common point of view, which is
based on "a desire to cooperate iri
tinue to be a
.
MO.—Edwin
Volz has been added
and
Members
•
the
•
NEW JERSEY
Laird, Bissell & Meeds
the
which have involved
MICH.—Kenneth J.
staff of H. V. Sattley &
(Special to
INSURANCE
j.
Chronicle
CALIF.—Rob¬
With Herrick,
BANK
.•++
know will con¬
■
.81
770.61
770.25
+Includes large transfer from reserves.
-
,
It has been and I
/
.
flndudes City Bank Farmers Trust.
♦Adjusted for stock dividends.'
in each case.-
operations promoting the soundest economic
relations between our countries
through carefully considered
ert Fullerton III has joined the of aggregate foreign trade exceed¬
measures for
the complementary
staff of Lester & Co., 621 South ing $700,000,000 in 1946, as well as
and balanced development oLthe
expenditures and
Spring Street, members of the Los large ,travel
resources of both.
other international - receipts
and
Angeles Stock Exchange.
Cordially,
payments.- T
y • -r .
.
/
The Secretary and the Finance (Signed)
WM. McC. MARTIN, JR.;
With H. V. Sattley & Co. Minister, pointed out that the
Chairman.
Stabilization Agreement is con¬
Special to The Financial Chronicle
sistent with the aims... and pur¬ His Excellency,
• *'
' !
Special
LOS ANGELES,
,
McKinnon has been added
Ratio
Average
approval of thev Mexican Goverp-f
ment, • for periods . and 5' on, terms
appropriate; to; the circumstances
.
52.57
52.00.
43.91
758.75
National
.79
22.66
57.71
Manufacturers Trust..
Trust......
+ 356.98
22.53
41.75
Trust.....
,
.75
21.28
S.
.
41.40 ^
49.36
Irving Trust
♦Public
42.37
,
1246.60
♦Guaranty Trust
U.
thereto
approve^ credits- up /to
$50,000,000 to : finance the /dollar
requirements in connection - with
the projects referred: to above and
other selected projects having tjie
pared 4 to
dent of Livingstone
" $73,523,000 $28,742,000
68,366,000 * 84,609,000
22,800,'000
-69,826,000
64,859,000-. 17,373i000
judgment, require addi?
before
definitive
study
for / the purpose of
commitments - for -loans may4 fce
liam H. Bluhm has become assQ- stabilizing the United States' dol¬
Triade>* +'*.'?
' •< )
ciated with Dempsey-Tegeler
lar-Mexican
peso rate of exchange.
j&
Meanwhile, I am authorized h>
This agreement extends and eri^
Co., 210 West Seventh Street.' ,M,r.
inform you that dhe 'Bank is; pre-f
Bluhm- was
LOS
periods and r which
127,686,000
43,093,000
4,996,000
fornia Co. and Bankamerica Co.
expires on June 30, 1947. "
'
3,701,000
127,820,000
20,540,000
Secretary Snyder and Minister
Totals
$379,181,000 $94,968,000 $18,882,000 $201,122,000. $222,991,000 $68,915,000
Beteta i during
their discussions
With Garter H. Corbrey Go reviewed ' the. satisfactory foreign
The individual changes in book values of* each of the 15 stocks
exchange relatione- between Mex¬
Special to The Financial Chronicle
•over the period have been as follows:
'
'"1':
ico "and-the United States and; the
LOS ANGELES,
CALIF:-+Jo
Ratio of
Ratio of
stability,! which has characterized
Market
seph
A.
McGonigal
has
been
.added
Book
Market
the' peso-dollar exchange rate dur¬
as of
*
as of ■
Value
——Book Value
to the staff of Carter H. Corbrey
ing the. six years that the Stabili¬
5-7-47
3-31-47
12-31-46
1-26-44
12-31-43
& Co., 650 South Spring Street.
zation Agreement has been jin ef^
.85
.89/,
$31.73
Bank of Manhattan.-.
$31.55
$25.03
feet;They - also
viewed ^with
450.07
.79 "
/ 448,17
1.13
358.97;
Bank of New York...
satisfaction the complete freedom
49.24
.86
49.05
41.79
1.01
♦Bankers Trust.......
With
Lester
&
Co.
V
.84
j of- exchange operations between
118.69
: 118.19
99.15
,1.02
Chajse National
4
Agreement, which was the subject of
the recent visit to the United States of President
Under the terms
Dempsey-Tegeler Co. I
0
$62,930,000
$123,675,000 $31,335,000 $10,185,000
I944_„
John W. Snyder
Stabilization Agree¬
ment between
.
William H. Bluhm With
Und. Profits
,
,
Dividends
Recoveries
Profits
Operating
Year—
Don
W.
to
bassador
discussion during
———Disposition of Earnings
Net Security
John
Mr.
Axeman
+ 22.1;
/
States of America,
Snyder, the Am¬
Mexico, Senor Dr.
Antonio Espinosa de los
of the United
-
1.1
—
these 15 banks fared as follows:
years
Total Earnings
Net
rising
"
long.
ization.
Over the
been
have
consistently
and
Special to
*Prices
while
of the Treasury
The Secretary
15 stocks
1944,
is .88.
Agreement
Stabilization
The
;
12
years and the trend persists.
It
seems
unlikely that the market
can ignore this stubborn fact for
steadily
—1.1
97.1
values
the
26,
the current average
5.5
+ 5.0
+ 14.4.
423/4
Jan.
on
2.6
+
670
97.1
Standard & Poor's Index
'
50
1.01
Book
respective agree¬
ments follow:
but only two are
Chemical and First
The average ratio of
was
4.6
+
163%
6771/2
V. S. Trust
Details of the
market to book for
+ 13.0
—
15%
35
National
♦Public
:•
1.0
+ 9.6
282 ;
280%
Irving Trust
—
4
1460
1530
——1—
♦Guaranty Trust
viz.:
National.
1.2
+
—
♦Chemical Bank & Trust
First National
qf
three years ago,
—12.3
100
Chase National
,
and with
premium to book value
a
today,
v
42%
101
ing at
+ 22.0
27
42
Trust
Mexico have been consummated,
specification of their terms.
One
transaction
is with the
Treasury providing for stabiliz- n
ing the peso-dollar rate of ex-* *
change, and the other calls for a
loan by the Export-Import Bank.
a
"
.
totaled
which
31,
1943,
$1,643,828,000. •
Change
May 7, '47
405
Bank of New York
♦Bankers
Dec.
1
.
announced here today that two
pending agreements with
aggregate
the
of
13.5%
book value of ,the 15 banks, as
1
Eight of the 15 stocks were sell¬
221/s
Bank of, Manhattan
to
lent
higher while
Asked Prices
26, '44
dividends
as
projects.
WASHINGTON, May 13—It was
.
Furthermore, thi;S
of $222,991,000 is equiva¬
amount
shown in the following table:
Jan.
thk
10.9%.
by
j
January 26,. 1944.
as on
same
bought for around
selling in January 1944, based on Standard
This index was 97.1 on May 7, 1947, pre¬
bank stocks currently can be
ment
and
back into surplus
undivided profits exceeded
ploughed
will buy $50
U. S. Treasury
million worth of Mexican pesos over four-year period. Other
million to be extended by Export-lmporf Bank to finance develop¬
;
„
By E. A. VAN
Mexico Agreed on
$100 Million Advances to
.
but
194)1
Thursday, May 15,
FINANCIAL CHRONICLE
THE COMMERCIAL &
-(2610)
-
,
INCORPORATED
NEW YORK 5:
67
WHITEHALL 3-0782
Wall Street
financing the program
DE LOS MONTEROS,
The Bank has there¬
Ambassador.
fore
attempted to
select from
Honorable William McC. '
among the various projects now
Martin, Jr.,
before it those which would mal^e
President,
the greatest and earliest contribu¬
Export-Import Bank
;
tion to the' economy of Mexico arid
of Washington,
'
'. .•
to
the'
improvement
of
the
734 15th Street, N. W.,
balance-of-payments position of
Mexico.
On the basis of this cri¬ Washington 25, D. C.
preclude its
NY 1-2975
as
.
CHICAGO 4
BOSTON 9
eO Past
Office Square
BSr*n
PRIVATE
231
S. CaSatte Strut
LOS ANGELES 14
4t3
franklin 7898
mubbaro oeso
CC-/OJ
WIRE SYSTEM
CONNECTING:
Wist Sixth Street
michi«am 2897
LA-lo&b
SAN FRANCISCO 4
JLuss
TO:
NEW YORK, BOSTON. CHICAGO,
Hartford, Enterprise 6011
Providence, Enterprise 7008
£115,681,681
&r-S7j
CLEVELAND. PHILADELPHIA. LOS ANGELES, SAN FRANCISCO
TELEPHONES
TOTAL ASSETS
Building
•Vrrt« 8887
Portland, Enterprise 7008
Detroit, Enterprise 6066
Associated Banks:
Williams
Deacon's
Bank, Ltd.
Glyn Mills & Co.
a
whole.
-
,
,
<
t
Volume 165
Number* 4594
THE COMMERCIAL & FINANCIAL CHRONICLE
1ST
(2611)
• •
Some
highlights from
Annual
#/'
Report
«.
-
4
for
1946, which has
been issued
i
The conduct of business and the
welfare of people in general are closely related here in the United
States. That is why we publish the
following summary of this company's annual report to its
164,000 stockholders, Put
are
briefly
as
possible, here
as
the year's developments in
are
our
work which
of the broadest public interest.
widening ownership of new jersey is
showt
by the fact that the number of shareholder ac¬
counts has ; increased from
5,816 in 1912 tQ
164,000 as of December 31, 1946.
•
EUGENE HOLMAN
FRANK W. ABRAMS
PRESIDENT
CHAIRMAN OF THE BOARD
^
WAGES
AND
DIVIDENDS
1181115.000 Employees Shared
THE WORLD'S NEED FOR OIL in the
is
developing
even more
postwar period
rapidly than
only in the U. S. but world-wide, demand for oil
products in 1946 was the largest in
history, exceed¬
ing even the war years' period. The pressure of de-;
being felt in all lines
b
*
'
•
AFFILIATES
•
rising need for oil. With
there has been increased
in this country
of the business.
«'
■
OF
THE COMPANY
tries served
"
relaxation of
use
of oil
rationing,
products not only
but also in most of the foreign
coun¬
by Jersey affiliates.
'
are
now
19 OCEAN TANKERS
operating
164,000 Owners
were
purchased in 1946, in
practically at maximum capacity—a situation pre¬
vailing throughout the industry. Needed increases
placing tankers lost during the
in
been
output
Hit MM $391,000,000
MMMM
1945—producing 9% of total U. S.
petroleum products. Sales by affiliates also reflected
Not
mand is
oil than in
more
expected.
was
greater safety at
be achieved only by enlarging every
operation from well to market. In financing these
can
so
three of
sea,
ships have
our
equipped.
..
.
i
.
.;
»
.J
'
more are
%"
•*>
-
'
-
now
tftiftftttt
;vj[
iach figure
-
record
-»f.
figure of $279,000,000. The budget for 1947,
for further increases. Construction of
provides
needed
facilities is
new
one
of the
NET EARNINGS
'
age net
worth,
or
10.80%
miles
on aver¬
both
ings for 1946
stock,
a
came to
$6.50
consolidated
*
year
$104,770,000. Dividends of $3.00
per
a
total of
share
paid by the Company during 1946.
stoppage during the
,
Company and its affiliates, 64%
crude
oil,
nance,
other materials
and
by the
supplies, mainte¬
after these
expenses.
Of this
saved
was paid to 115,000
employees, 13%
dividends; to the Company's stockholders,
16% was held for use in the business, and 6% was
the
"
$17,615,000 in the Thrift Plan
science and
ward
amount
applicable to minority ownership of
subsidiary companies,;
:
..
\
\
,
i:
,
INCREASED PRODUCTION AND SALES
7/
- -
1945.
Working at
near
•,
to drive
must
be
these shareholders in dividends and that loft;
in the business to meet future
capital
ditures, etc.'
expea*
„
through
persistently to¬
for all people, vast
found," brought to the
refined, and distributed
v
abroad
as
well
as
in this
demonstrations of
ca¬
enterprise
can
pacity, refineries of Jersey affiliates processed 7%
where and
thereby
to all
parts of the
country. These
our
help meet the needs
serve
are
practical
confidence that American
the
cause
of people every¬
of
lasting
peace.
STANDARD OIL COMPANY
(NEW JERSEY)
ing to the interest of Jersey shareholders diB>
ing 1946, it shows also the proportion paid to
Company (New Jersey) is in¬
creasing substantially its activities and investments
reflected the
or
this shows the amount of net income
accr^
world-Standard Oil
growing need for oil and its products. World*
wide production of crude oil
by Jersey affiliates in^
over
are
bettep living standards
surface
v
world's
creased 9.6%
machines,
quantities of oil
j
,
7
last year, to
employers added $30,329,000.
LOOKING AHEAD, it is clear that if
men,
as
7Si.it'-
vet¬
re-*
mainder, 65%
\yept
armed services have returned
Company. In addition, 11,577
pated in the Group Insurance Program.
Employees
direct taxes, and similar necessary expenses.
REMAINED
work
newly employed by the Company. More
than 78% of
eligible domestic employees partici¬
which their
36%
or
88% of former employees
erans were
paid out for
was
.
domestic strike
no
year.
discharged from the.
to work for the
OF TOTAL MONEY TAKEN IN from all sources
:
LABOR-MANAGEMENT RELATIONS
during the
continued the Company's long record of indus¬
trial peace. There was
were
:
progress.
GOOD
total of $177,610,000. Net income for the
parent Company was $3.83 per share,
and coal into oil products has
gas
encouraging
earn¬
share of outstanding
per
received from Jersey in 1946; The sum of
$391,000,000 was paid to employees of the Com¬
pany and affiliates in wages, salaries and bene¬
fits. Dividends amounted to
$82,000,000.
gallon. Semi-commercial conversion of
natural
shown
Company and its affiliates. Such
represents 6,975 persons, and tfO
the amounts of income each
represent
group
engines—giving greater power and increased
per
total income of the
on
bars
of
■
mobile
11.12%
moved ahead, de¬
year
versatile processes and
was given to develop¬
high octane gasolines to anticipate the
requirements of coming higher compression auto¬
-
accruing to the interest of Jersey
shareholders represent a return of
more
products. Special attention
industry's major
ment
tasks for the immediate future.'
during the
veloping better and
$82,000,000
being
activities, capital expenditure in 1946 reached the
RESEARCH WORK
Shared
To promote
war.
equipped with radar and two
kmm
re¬
AND AFFILIATED COMPANIES
copies
of
request.
the
fuil
report
are
available
oi
Addyess Room 1626, 30 Rockefelb:
Plaza, New York 20, N. Y.
16
(2612)
THE COMMERCIAL & FINANCIAL CHRONICLE
Thursday, May 15, 1947
Tinman in His Home Town
Railroad Securities
and prospects of his reelection.
Says Kansas City and
Louis hold stock market is
discounting Truman's reelection,
town
Delaware & Hudson
stock
has
not
been
immune
the general
to
pessimism
that has enveloped the entire list of railroad equities in
months, but at least it has been receiving enough buying sup¬
port to avoid hitting consistent new lows such as the majority of
other rail stocks of similar caliber have been
doing.
Many rail an¬
alysts consider the stock to have interesting potentialities at current
that
recent
levels
the
and
turn afforded
dividend
10.8%
the present $4.00
is certainly attrac
on
rate
tive.
One of the most favorable
tors
pointed
& Hudson
stantial
made
in
in
to
the
recent
fac¬
sub¬
very
reduction
progress
The
years.
rail¬
road
subsidiary in 1943 was not
able to meet the maturity of its
1st
& Refunding 4s and sale of
refunding issue was not feas¬
ible. Holders were given 10% of
a.
their
principal
in
cash
balance extended at the
rate
terest
20
for
with
the
same
in¬
years.
Since
that time the issue, the largest by
far of the system, has been re¬
duced by more than a half. Leased
line
obligations have also been re¬
and
heavy inroads have
duced
been made in the debt of the coal
subsidiary, Hudson Coal.
company
Through the
process of debt re¬
tirement the fixed charges of the
railroad operating company and
its
leased
have
lines
been
cut
to
down
roundly $1,900,000 and
consolidated charges to approxi¬
1930s
In
$2,900,000.
mately
the
consolidated
the
late
fixed
re¬
Over ,the
been
the
ence
company's stock before Fed¬
gests,-they
both
picture.
losing
The
con¬
ground
his
competitive
known
is
distinct
a
be
there
that fur¬
possibility
ther inroads in the
cite coal will be witnessed in
ing
}f
distortions
war
Hudson
quarter and
Delaware
&
running between a
third of total freight
was
a
this
from
-evenues
com¬
Prior to the incidence
years.
commod¬
one
ity.
'
Delaware & Hudson in
spects
what
a
some¬
favorable position than
more
other
some re¬
be in
to
appears
anthracite
major
Substantial
markets
carriers.
for
its
coal
have been developed in New
Eng¬
ire
not
-
the
:o
vulnerable
so
climatic
oil
conditions
because
less
and
distribution
and
systems for
Resurgence of
gas.
mining in parts of New
ore
ron
others
as
competitive fuels
efficient
York
These markets
Canada.
and
State
location
and
of
new
industries along the line have de^
yeloped
traffic
new
sources
to
partially
Roger
as
an
ccessf ul
W.
Babson
interested
i
politics
in business.
n
than
In those days this re¬
quired faithfulness to the Pender-
Machine. Hence, his Inde¬
pendence friends were not sur¬
gast
prised when he was rewarded
pelty political jobs.
When,
with
however, he was made U. S. Sen¬
ator by the Pendergast gang, their
respect both for the U. S. Senate
and the Pendergast Machine fell
pretty far and low.
As
time
went
bunch
down
perhaps
when
a
on,
Washington
in
and
little better." However,
their
townsman
fellow
was
ident, they again were shocked
and again became skeptical of the
U.
Government.
S.
These
Independence
people
are
still
asking today: "Tell us—Mr. Bab¬
son—why did President Roosevelt
want him as a running mate?
He
self
line traffic to and from New Eng¬
his
must
that
known
have
would
live
not
he
him¬
finish
to
off
term."
Many analysts. are of the
opinion that the future prosperity
of the company
Arden Farms
Common
Preferred
&
lies largely in the
further development of this prof¬
itable interchange moyement.
The'
R. Hoe &
had
a
highly
1946, with earn¬
ings on the parent company stock
(the only stock outstanding) of
i>8.22 a share.
Of this, roughly
half
was
accounted for by net
company
orofitable year in
Co., Inc.
Old Class "A"
New Class "B"
income of the railroad
properties.
quarter of the cur¬
rent year income of the railroad
properties available for charges
rose
88% from a year earlier to
an
estimated level of $1,528,000.
Pacific Airmotive
Inquiries Invited
the
For
on:
first
On the basis of results
West Coast
1947
at
least
showing which
would provide more
than ade¬
quate protection for the present
earnings
match
Utility
Truman's
The
First
way
ments, his public statements and
his private acts appeared to
be
those of a small town politician
who simply did not know what
it was all about. His apparent de¬
sire to please everyone, brought
him
enemies both
amongst the
New
Dealers
thick
and
started
fast,
Announcement
formation
New York Stock Exchange and other
leading Security and Commodity Exchs.
with
120
New York
Broadway,New York5,N. Y.
and
Chicago 4,
of
is
made
Gersten
offices
at
&
150.
City, to act
Partners
3cott &
Guaranteed Stocks
Bonds
Special Securities
By
Jan. 31,
of
are
Frenkel,
brokers
Irving Gersten,
partner
a
in
oreviously
Treasurer
Co.
&
of
Frenkel,
Associated
hem will be Paul Kovac
ager
as
with
man¬
of the sales department and
Milton
Keizer
in
the
trading de¬
Formation of Gersten & Frenkel,
holds
membership
in
the
National Association of Securities
GUARANTEED RAILROAD STOCKS-BONDS
New York 4, N. Y.
At the union's
request, the Slate
Labor Board will conduct an elec¬
tion
men
honest and wise,
are
Truman will make
dent.
a
good
presi¬
Today his followers appear
be such.
to
Will
Truman
Re-Elected?
Be
of
employees
the
"among
Drysdale & Co. at the company's
premises,
next
Broadway,
71
Wednesday, May 21, at 3:30 p.m.
to determine collective bargaining
agency.
If the
been
a
have
the
Presidential election had
ago, Truman would
terribly defeated.
If
year
been
election
election.
with
good chance for
a
Probably the
how
he
answer
the
handles
re¬
lies
veto
during the next year—and
power
who
today, Truman
were
would have
is
office
to
of
his
be
to
Owing
running
mate.
recent deaths in
President Harding and
the
President
Roosevelt, voters are
to consider the Vice-
beginning
both
of
candidate
tickets.^ Hence, it is
especially im¬
portant
that President Truman
has a strong running mate.
This
brings me to the chief new item
of news which I got in Independ¬
Mo.
ence,
The
that
believe
of
Secretary
city
State
George C. Marshall will be the
running mate. "Didn't he promise
that he would not run for the
Presidency?"; I asked.
To this
question the reply was, "Yes, but
that applied only to the Presi¬
dency. Marshall never promised
he would
not
accept the Vicenomination."
These
and his backers
that Mr. Truman
so
believe.
to
build
pating
Hence, they are free
Mr. Marshall antici¬
nomination for Vice-
up
his
President.
:
Discounts
in
Kansas
market?"
stock
the
with
They replied: "The stock market
is
today
now
discounting
man's re-election in 1948!"
this
along
cation
only
as
your
bargaining
collective
as
for the employees of the
Public National Bank and its 25
branches
and
the
State
Labor
agent
Board
the
conduct
will
The
elevator
hearing in
a
11
at
tomorrow
case
a.m.
the
build¬
of
operators
Investing Company's
City
Street
Broad
25
at
strike
in
a
vator
Board
on
are
which
dispute
wage
State
before the JSTew York
goes
Mediation
tomorrow.
Ele¬
the
throughout
operators
city, including the operators at 25
Street, were granted $8.6(1
Broad
increases
recently
prevailing in
been above the scale
the
the
industry,
Investing
City
the
brought
merely
Company
of its operators at 25 Broad
wages
the
to
since the
but
scale at 25 Bread Street had
pay
new
The
prevailing scale.
dispute thus centers around $3.60
still
City and St.
Louis I asked friends: "What's the
matter
the Office
International
Union,
153, which seeks to organ¬
ize the employees
of the city's
major banks and looks.upon the
financial district as just another
part of the city, thus, in effect,
sharing jurisdiction of the area
with the UFE, has likewise asked
the State Labor Board for certifi¬
which
Market
Stock
When
Another AFL union,
Employees
Local
ing
Truman's
of
people
elevator
the
must
of
up
claim is
the
building
21-story
the
climb
men
Meanwhile,
them.
due
tenants
the stairs to their
offices.
Tru¬
With E. E. Henkle Co.
I pass
to
(Special
reporter
Chronicle)
Financial
The
.
LINCOLN, NEB.—John J. Brit-
without comment.
Dealers, Inc.,
and
the New York
Security Dealers Association,
was
previously reported in the "Finan¬
cial
Chronicle" of April
10.
emerges
EDMOUR GERMAIN
is
now
with E. E. Henkle In¬
Securities
Federal
Co.,
Building.
on
All contracts
strike
over
Robert B. Keeler Is Now
With Clair S. Hall & Co.
.
(Special to The Financial Chronicle)
important day for labor relations in
of United Financial Employees, AFL,
as
employers, including
Street
Shepard,
Co., and Lester Frenkel,
Kovac
which
1-1063
these friends
If these
being negotiated now with A. M.
Kidder & Co., terminate on that day. At union's request, State
Labor Board will conduct election among employees of Drysdale &
Co. next Wednesday to determine collective bargaining agent, j
Office Employees International Union, AFL, asks for election among
employees of Public National Bank. Elevator operators at 25 Broad
vith
the
Broadway,
as
1948
Wall Street.
partment.
Teletype NY
today,
to whom Truman turns for advice.
Louis K. Comstock Chosen to Arbitrate
111.
formerly
Telephone BOwling Green 9-6400
upon
meeting with him sometime
first
tan
dealers in investment securi¬
ties.
35 Broad Street
the country's future, for that
Wage Dispute at A. M. Kidder & Co.
MEMBERS
St.,
and
vestment
Gersten & Frenkel
LaSalle
All
future
1946
the
Announce Formation of
So.
that
agrees
Truman's
that
Industry
Association, as arbitrator of the
wages
question and representa¬
tives of both the union and the
firm are scheduled to hold their
dividend.
Securities.
831
he
friendly press.
a
here
out
tumbled
though
even
trusts.
he
means
Conserva¬
stock
out with
Everyone
should
the
and
Truman's
tives.
whom
those
this
people here believe that Mr. Mar¬
shall will stick to his trade and
Years
Two
President
Truman
acted in the early part of his term
confirmed the pessimistic fears of
his
townspeople.
His
appoint¬
far, the
so
from
Presidential
land.
He is modest
swers to all the
questions. He is
willing-and anxious to take advice
nominated and elected Vice-Pres¬
whole
right.
doesn't think he has the an¬
Presidential
the towns¬
people came to believe that "Tru¬
man is as good as the rest of that
offset the losses there
have been.
Finally, the manage¬
ment has
been particularly
ag¬
gressive in building up bridge
.
nent in the Commerce &
store keeper
who was more
of anthra¬
use
had
Harry
Truman
u n s u
will
pressure
matter of fact,
a
to do what is
and
matter, depends
towns -
the
& Co. are
between
Harry Truman is honest and wants
in¬
people
to
the domestic heating field. There
to be little prospect that
relieved. As
and
dependent.
Anthra¬
oil and gas in
as
are
demo¬
cratic
seems
bright there is
$39,218,600. Hudson Coal reduced
its publicly held debt by $1,485,-
been
other fuels such
eral income taxes. Moreover, with
earnings
prospects
continuing
strong likelihood
of further progress along this line
in 1947 and early future years.
Last year non-equipment debt of
the railroad operating system was
cut by more than $9,000,000 to
Hudson
the years has
over
sistently
.he
a
&
anthracite coal.
on
cite coal
of
ent
par¬
has
as
sug¬
difficulties
being gradually ironed out. Both
parties have agreed to the selec¬
tion of Louis K. Comstock, promi¬
and
name
1948.
•4>-
people
and,
ence
time
union and A. M. Kidder
Independ¬
the
major basic weakness in
one
Delaware
to about $4.00 a
the
in
That has been the strong depend¬
land
on
there
term
long
honest
such powers implied in the
cancellation clause any¬
between now and Jan. 31,
any
30-day
am
in¬
are
dustrious
000 last year to $18,178,000.
This
issue, maturing in 1962, has the
benefit of a sinking fund based on
tonnage of coal mined.
quirements were in excess of $5,000,000 a year. The reduction in
these charges has been equivalent
share
city.
They
Delaware
picture is the
debt
western
The union says it does not
antiRJPate necessity for the use of
The
writing this, is a typical small
Its life depends largely on the farmers living about.
re-^
income
St.
and
Secretary Marshall will be running mate.
Independence, Mo., where I
strike
recent
the
because the advantage
in such action lies entirely on its
President Truman in his home
on
during
was
side.
By ROGER W. BABSON
Mr. Babson discusses comments
Curb
threat
one
CINCINNATI, OHIO—Roberts.
Keeler has become associated with
Clair
Hall
S.
Building.
Co., Union Trust
&
Mr. Keller has, recently
Admin¬
been with the War Assets
with
he
was
Weeks
and
thereto
Prior
istration.
&
Hornblower
i
Otis & Co. in Cleveland.
wages.
31, 1948 emerges suddenly as an important one
for the Wall Street exchanges and brokerage houses to remember—
The date of Jan.
Joins E. G.
important, that is, from the point of view of their labor relations—
because that is the day 'when all contracts which the United Financial
Employees, AFL, has with employers will expire.
The revised contracts which the union has With the New York
Exchange
and
the New<$>
York Curb Exchange and the con¬ union's
tract
has
it
Cotton
with
the
New
York
Exchange all termina e
The contract which the
now negotiating with A.
that day.
rn.on
M.
is
Kidder
&
Co.
will
likewise
terminate then. A pat'ern for pos¬
sible
industry-wide bargaining,of
wages and other issues would thus
seem
to
be
evolving
out of
the
to organize the
industry on the basis
attempt
brokerage
that
CINCINNATI, OHIO—tRalph D.
the
securities
exchanges,
the
which all -else is to
upon
The union
(Special
to
The
AKRON,
claims now the only
elimination of the
30-day cancellation clauses from
the contracts with the NYSE and
it sought
affiliated
now
Taylor
&
Co.,
with
Ill East
With McDonald & Co.
be based.
reason
G.
Fourth Street.
NYSE, are the
particularly
points
is
McAfee
Edw.
Stock
Taylor Staff,.
{Special to The Financial Chronicle)
K.
to
Bromley,
the
Financial
OHIO
—
Chronicle)
Worthington
Jr., has been added
staff of
McDonald
& Co.,
First Central Tower Building.
Volume 165
Number
4594
THE COMMERCIAL & FINANCIAL
CHRONICLE
World Bank Grants First Loan to France
Credit of $250 million initiates institution's
operations.
-
Boylan Heads Board
Maturity
Of NY Stock
is 30 years, interest rate
•
3Vi% plus annual payment of 1% to
Repayment of principal begins after 5 years. Money
be used to import
specific goods for nation's rehabilitation.
will
At
fund.
reserve
Southern
Stock
of
the
Exchange
the
elected:
were
ernors:
National, a semi-public
corporation, and is guaranteed by the Republic of France.
The loan agreement was
signed for the Bank by John J. McCloy,
President, and on behalf of the Credit National by Wilfrid Baumgartner, President. The guarantee agreement was signed by Henri
Bonnet, Ambassador of France.
Governors, for three
French
William
terms:
year
K.
Beckers,
Spencer
Co.; Snyder P. Bradshaw,
Dodge & Co.; David S.
Trask &
Clark,
''
*
by the Bank.
type that the Bank is empowered to grant by its Articles of Agree¬
•'
The
the
Loan:
.
Conditions
loan
has
the
guarantee of the French Govern¬
The loan is for a period of
30 years. It is to
of
3J/4 %
to
be
with
the
Agreement of the Bank,
commission
of
charged
on
tion
the
of
special
1%
whatever
the
to
outstanding
loan
to
a
reserve.
The national
recovery program
calls for
heavy imports during the
next five years.
Therefore
no
re¬
payment of principal is scheduled
for this period.
Thereafter,
tization
and
begins at
amor¬
modest
a
rate
increases
the
loan
gradually so that
completely amortized
is
most
are
ad¬
of the steel industry.
Robert P. Boylan
example, the French are pur¬
chasing equipment for a modern
continuous strip mill. The trans¬ Foster, Pershing & Co.; Joseph
Klingenstein, Wertheim & Co.;
portation system is to be improved
Ronald H. Macdonald, Dominick &
by the purchase of locomotives
Dominick;
Sidney L. Schwartz,
and freight cars, cargo ships and
Sutro & Co. (San Francisco); and
canal
barges,
and
commercial
Jay N. Whipple, Bacon, Whipple
airplanes. Coal and oil, essential
& Co. (Chicago).
to industry and transport, figure
Two members of the Gratuity
largely
among
the
prospective
Fund for the term of three years:
purchases, as do industrial raw
Thatcher M. Brown, Brown Broth¬
materials, including semi-finished
ers Harriman & Co., and Laurence
steel
products
and non-ferrous
M. Marks, Laurence H. Marks &
metals. Under the loan agreement,
be
up
markets
For
por¬
build
by its due date.
the
Purpose of the Loan: The loan
is being made to assist France in
mation concerning the goods to be
the
wartorn
the loan and about their destina¬
the
tion and
reconstruction
and
economy
of
its
finance
to
Bank
im¬
sult
tain
Oct.
information
to
proceeds
be
purchased
of
the
loan
about
the
with
the
with
the
full
proceeds
of
application
by
France's
chagrin
Minister,of Finance, dated
8, 1946, for a loan of $500
million, to
be
granted
to
the
(Continued on page 34)
deficit in the 1947 balance of
ments
October.
loan
is
In
this
However,
The
respect the
will
be
France
also is disappointed at
delay which has occurred in
processing the
application, but
the
must realize that
thereof
than three
more
was
unavoidable,
being the hiatus between the
against devaluation of other
The
heavy cost of the loan to
4%%, including interest
commission, is also regretted
French
circles.
which
course,
loans out
borrow
...here,
when
its
will be floated
ceeds
the
purpose
present management
Bank to
of
Danish
ready
loan
not
was
the
quite
when Mr. Wilfred Baum-
gartner had to leave for France,
so
the French loan was announced
alone.
<
.
,
^
»
t
u.
.
.
T-
,
„
j
Lynch,
outstand¬
the
using
loan
in
the
any
as
curities Corporation in the
Liberty
Life
Building as of
Win. C. Mullendore
under¬
n
May
Mr.
800
sent the firm in Greensboro.
securities
dealers
are
Runnion
was
mortgage
due
at
1977.
bonds
The
bonds
27/8%
Amott, Baker & Co.
in New York
City.
Thomas A. Broocks will
repre¬
now
Wm.
C.
Gerrodette & Sans Co.
Mullendore, President
of Southern California Edison
Co.,
has
announced
that the largest
construction
program
in
SEATTLE, WASH.—H. E. Ger¬
rodette is
his¬
its
tory will be required to meet the
increased
service
demand
in
the
for
a
pro¬
form
•
financial activi¬
ties.
Whether
the
identical
lan¬
will
be
incorporated in
contracts of the Bank with other
borrowers is not known, but it is
apparent that the need for such a
clause varies
considerably as from
guage
>
..
w
,.
4* *i
(Continued
&
,
t
on page
'
1
34)
securities
name
fices at 1411 Fourth Avenue.
com¬
Y/i
were
to the investment bank¬
competitive bidding May 13
of
2.74%
to
the
Part
of the proceeds
be used to redeem $3,762,000
will
outstanding
bonds
at
105%.
first
mortgage
Balance
will
It won't be
be
The medicine
the
to
men
say
long now!
June 29th will
famous HIAWATHA
fleet.
see an
The
new
exciting addition
Coast trains will
greatly extend the service of Milwaukee Road Speedliners.
ferred
stock, 32,000 shares of $25
4% preferred, 61,932
shares of $25 par value common
stock, and the bonds now being
par
value
CHICAGO
•
YELLOWSTONE
Faster schedule
.
.
marketed.
.
.
.
no
extra
fare
SPEEDLINERS NOW ON THE TRAIL
New York Stock
changes:
TWIN CITIES
'
cmcISo
Milwaukee>
/
Delafield, lim¬
ited partner in Delafield
& Dela¬
TWO
ST PAUL
AND
Name of Mary L.
PACIFIC NORTHWEST
•
features
new
.
A
DAY
CHICAGO
.
EACH
•
WAY
MILWAUKEE
K
fyciFJC
LA CROSSE
j
ST. PAUL
•
now Mary L. Williams.
Richard R.
Thomas, member of
Exchange, retired from part¬
•
WINONA
MINNEAPOLIS
WORTH WOODS
the
nership
in
Blanchard,
Snow
and
a
in
age
Mr. Newman began his
New Orleans,
York
THE
FISHERMAN'S
SERVING
UPPER
THE
FRIEND
BEAUTIFUL
WISCONSIN VALLEY
MINOCQUA
partner in the firm of Ira
Haupt & Co., died at the
65.
J / MIDWEST i
ruaammi
&
•
WOODRUFF
F. N. Hicks,
of
THRU
THE
CHICAGO
•
CORN
DES MOINES
SIOUX CITY
BELT
CEDAR RAPIDS
•
•
OMAIIA
SIOUX FALLS
Passenger Traffic Manager
The Milwaukee Road
710 Union Station,
career
Chicago 6, III
coming to New
in
member
1912
of
where
Newman
he
was
Brothers
a
&
Worms, which merged with Ira
Haupt & Co. in 1942.
<i
i
the
of
Gerrodette and Sons Co. from of¬
electric
territory the
engaging in
business under the firm
bid of 102.08, and are being
reoffered at 102% and accruel in¬
yield
•
engaged in soliciting acceptances.
The offer will expire May 26.
a
terest,
to
purchaser.
15th.
formerly with
Pierce,
safeguarding of the Bank against Watts on May 6th.
France's diluting its
credit
by
borrowing elsewhere. As the mat¬
Clauds S. Newman Dead
ter finally was
arranged, France
Claude S.
Newman, member of
agrees to supply the Bank infor¬
the New York Stock
Exchange,
mation as to its
the Danish and
announce
first
ers
on
Protection Against Dilution
of
French loans simultaneously, but
the
of
of
serves
Another matter which came
up
in the negotiations dealt with
the
expenses.
originally the
j CHARLOTTE, N. C. — William
L. Runnion will become
manager
of the branch office of First.
Se¬
field, is
3% interest. In addition to
and the statutory 1% com¬
was
intention
other than dollars.
mission to build up a reserve, the
Bank is charging y^% to cover
It
Rannien Will Manage
First Sees, in Charlotte
one
The New York Stock
Exchange
has announced the
following firm
to pay
this,
of
model for future borrowers from
the Bank, since the French have
contract
expects to have
—
e rence
nominating
term
a
no
commencing
in
$250,000,000 issue
a
the
Exchange
Weekly Firm Changes
because the
Bank, of
finance
must
cur¬
applying to France, but inserted
of money it expects to
June
—
The
it
rencies which
may
be lent to
France. This clause is an example
of provisions in the contract not
France,
in
to
ever,
nouncement
of
Mr.
Eugene
Meyer's resignation and the as¬
sumption of the post by Mr. Mc¬
Cloy.
and
loans
a
The French loan contract, how¬
does
contain
a
"dollar
clause"
protecting
the
Bank
an¬
4.48%
f
W.
Merrill
awarded
reason
ob¬
Fenner & Beane.
series
effect is
subsequent
this
be
writing group of 188 firms headed
by The First Boston Corporation
and Harris, Hall & Co.
(Incor¬
has
underwritten
the
porated)
exchange offer and approximately
ply to France. Also the negotia¬ applied to capital additions.
The new bonds are
tions were extended by discussion
subject to
of still other provisions. For ex¬ redemption, apart from the sinking
ample, the Bank wanted in the fund, at 105% until May 1, 1948,
contract a gold clause, to protect and at prices declining thereafter
it against devaluation of the dol¬ to par. After this financing, capi¬
lar, the writer is told, but in the talization will consist of 32,000
shares of $25 par value 4%%
end this idea was dropped.
pre¬
October.
months
for
Leness,
Co.
over
contains clauses which do not ap¬
in
resumed
loan in
other countries. For this
an
understanding with the Bank that
negotiations looking toward an¬
loan
French
pattern
to
is
there
Pattern
for
can
Co., Inc., publicly of¬
May 14 a new issue of $5,100,000 Southern California Water
$540,000,000
A
money
favorable terms.
on
Blyth &
pay-f
disappointment
a
France.
other
less than half of the
anticipated by the French
the application was filed
when
last
of
care
tained
new
program
fered
WASHINGTON, D. C. (Special to the "Chronicle")—The World
Bank loan to France takes
that
so
Blyth & Co. Offers
loan's amount, effective interest charge
assuaged by prospects of another credit in
Some clauses serving as future pattern.
Correspondent
October.
—
So. Calif. Water Bonds
as
reports laxity in supervisory provisions, and existence of doubt
use of proceeds.
engaged in the
undertaken by a
McEvoy,' Winslow, Douglas & McEvoy; Benj. F.
McGuckin, Brinton & Co.; John
O. Middlebrook, Harris, Upham &
Co.; William D. Dana, Burton,
Cluett &
Dana; and George J.
re¬
over
delay reported
for
Harold
year:
the
Significance of French Loan
and
Five members of the
committee
of
utilization.
an
now
ever
Co.
infor¬
French
about
and
obtain
The Request: The loan is the
ment
necessary
to its economic
rehabilitation. The Bank will ob¬
full
will
purchased
port of specific goods and equip¬
goods
A
ernization
of
yearly
a
is
utilization.
ceeds will be devoted to the mod¬
charged
Articles
and
vantageous. A portion of the pro¬
from the date of disbursement. In
accordance
destination
is
construction
ferred stock
France will be free to purchase in
interest at
carry
rate
1
Co.
ture
of
4.32%
preferred and
ing.
their
ment.
the
'l
|
t
of<^
full
3,306,-
shares
new
now
and
The
858
a
to¬
of 6% and 1,399,602 shares
of 5%% pre¬
•
.
Terms
exchange of
combined
of
on
pany serves. The refunding oper¬
ation is part of a
program to re¬
vamp the company's capital struc¬
*
loan granted to France is the first to be made
It initiates its operational
phase.
The loan is one of a
ment.
Edison
stock
for 1,907,256 shares
Hk
The $250 million
•
California
It involves the
new
SUMMARY STATEMENT OF THE LOAN GRANTED TO FRANCE
Southern
largest preferred stock refunding
operation
public utility.
<£—
tal
-17
Large Expansion Program
The
p re
by the Bank summarizing the details of the
agreement, follows:
California Edison Co. Embarks
Exchange
election
Chairman of the Board of Gov¬
Robert P. Boylan.
Seven members of the Board of
The International Bank for Reconstruction and
Development an¬
on May 9 the
granting of its first loan, a $250 million credit
France.
The credit is issued to Credit
A statement issued
annual
York
following officers
nounced
to
the
New
(2613)
Milwaukee Road
Speedway of the Speedliners
18
certain
Thursday, May IS, 1947
FINANCIAL CHRONICLE
THE COMMERCIAL &
(2614)
notably; soft goods
lines,
luxury items, a business re¬
cession has already set in.
and
r
OMGUS Trade Chief, in interview,
Today
■
By HENRY
the First Quarter
statements of leading mutual funds
Portfolio Changes During
(
analysis of first quarter
An
interesting facts:
discloses the following
National
(1) Oil stocks, particularly Standard Oil (N. J.), Gulf,
Secony-Vacuum, Continental, and Standard (Indiana), were
Phillips,
heavily
(2) Rubbers, particularly Good¬
rich, Goodyear, U. S., and Fire¬
stone, were sold.
(3) Other leadiryg issues that
were
sold on balance included
Securities
.
BOND
SHARES
Corporation, comments
on what your dollar buys today in
relation to the amount your dol¬
of
much
for
dollar
her
when
stock holdings as
A
request
Group, Incorporated
,
New York 5, N. Y.
from
rose
8%
to
approximately
10%%.
1
'
No
Prospectus- upon request from
your investment dealer, or from
NATIONAL
'
follows:
;
to expect
a
cyclical-recession in 1947. On
the contrary, we look for stabil¬
ized wholesale prices, steady or
rising
employment, production,
and national income during 1947.
"(1) We see no reason
SECURITIES &
CORPORATION
120 broadway, new
& Co
of Mr.
D. NewBury, Vice-President of
the Westinghouse Electric Corpo¬
ration on the business outlook as
f,
m
york 5, n. y.
"(2) We expect
recent increase
The
rates
surance
in
New
Massachusetts,' which
<
of "Abstracts"
published jby Lord, Abbett
quotes from the comments
SECURITIES
RESEARCH
Until 1948?
Recession
The current issue
IATIONAL
I
'
-
,
manufacturing
in fire in¬
In
Ltd,
*
"
recent
a
.•*/"'///
pamphlet, Hare's
comments
oh .the fact that
fire insurance
stocks
have proven to be more profitable
holdings than industrial stoc'ks
over the past 30 years, during the
although
past five years, as,, a result ,of
climbing fire losses, they have
proven
With
time in future the necessary
Federal
for—perhaps 30 cents;
rate
should
discount
and
less than half as profitable.
of the strongest issues
some
buying in 1947 to be currently selling below, liquidat¬
different from 1946 in the relative ing value and yielding 4% or bet¬
positions of perishable and semi- ter, they would appear to offer at¬
durable goods industries, on 1;he traction as long term holdings.
and consumer
hand, and durable consumer
producer goods,- on the other.
compared with 1946, soft goods
will
decline,
but
the durable
and
Manhattan
*
,
with
this
need for Ger»
of
ation
such
Germany as
to
growth
is
government
or
para¬
"Therefore,
made
>
are
reform is
proposals so far
currency
The
the
best
and
most
achieving this.
"Yet, looked at from another
angle, the area of the legal wage
and price structure still predom¬
rounded plan for
the
in
inates
German
The bonds,
of 99.30.
will use the pro¬
sale, together
funds, to re¬
deem on Oct. 1. 1947, at 105% and
accrued interest, $24,767,600 prin¬
cipal amount of 4% first mort¬
gage bonds, due April 1, 1950.
The new bonds will be redeem¬
able at 103y4% on or before May
The company
this
from
ceeds
with other necessary
economy:
-
morerthan,
1949,
31,
prices down to
made after
and 'at
100% for redemptions
June
1, 1974,
Francisco
San
The
Terminal
become subject to
the lien of the first mortgage, con¬
properties,
business at'legal prices which are
sist
the^average,, say, 30% above
1939 prices.
However, given the
underlying financial situation, the
on~
to
principally of main line tracks,
yard switching tracks, industrial
sidings, warehouses, freight ter¬
power of the legal Reichsmark to
command goods and services is in
large part illusory.
minals, locomotive and car repair
shop's and various other buildings
and lands situated in the City of
San Francisco and in San Mateo
'
Unique Situation
County, California.
present-day German situ¬
It is possible to
continue to hold the present gen¬
eral level of wages and prices in
the face of the pressures, as it has
been held for the past 20 months.
"The
ation is Unique.'
is adequate currency re¬
If there
at
13 on a
"
transact all of their
at/1939 levels or not
sale May
competitive
bid
consumer
concerns
awarded to the syndicate
were
all income is earned at
wage rates almost identical with
1939. Rationed food and other ra¬
trial
3%% (at a price
accrued interest.
maturing June 1, 1975,
bonds, series A,
100.45% and
of
90%^ of
tioned
by
headed
Co. San Fran¬
first - mortgage
Pacific
Terminal
cisco
a
mount.
required.
group
Southern
The
"The restor¬
conducive
banking
A
said:
economic stability in
be
Of Southern Pacific
Governor
Szymczak
democratic
*
Kuhn, Loeb & Co. on May 14 of¬
fered a new issue of $22,500,000
reform.
will
"
.
Kuhn Loeb Offers Bds.
currency
man
S.
some
price
corre¬
spondent the
form, the. danger,
Notes:
changes.''
25 cent
for
dis¬
Board
cussed
(
one
wage
a
■SOB
goods are sold
at.legal prices. Most large man¬
will prob¬
ufacturing and most basic indusYork and
ably'be followed by similar action
in other states, has focused the at¬
tention of investors on fire insui;ince stocks.
Szymczak':' of
Reserve
M.
rate of somewhat
would be called
exchange
an
less than 40 cents
the.
she
in percent¬
chart shows that
Mil¬
Govern¬
ment,
Gov¬
ernor
Maitt S.
itary
buys her meat and groceries.
/ *
S.
U.
of
where
branch
olfic(<£>
the
ji
as
age of the amount a dollar bought
with aggregate mar
in 1939, the investor now obtains
ket value in excess of $10,000,000
28% more in dividends and 75%
each included: Montgomery Ward
more ih earnings than he did be¬
Standard Oil (N. J.), North Amer¬
fore the war..
On the other hand,
ican CO., Gulf Oil, Dupont, Para¬
he obtains far less of all leading
mount Pictures, Sears Roebuck
commodities,
Texas Co., and Middle West Corp
Cash and U. S. Governments
Time to Buy Fire Insurance
•
position during the first quarter
Stocks?
- - '
'
1
—
*
v
'
Investment dealer or
63 Wall Street,
temporarily as chief of the trade and commerce
served
than twice as much
they did before the war
—that she gets less than half a?
today
Gypsum,
(5) Common
from your
he
eggs cost more
of March 31,
Distributors
WASHINGTON, May 14—Upon his return from Germany,
bought in 1939. "Every house¬
wife knows that beef, butter, and
American Gas & 1935—in
fact, more than he could
Electric,
Minnesota
Mining & get in the last 20 years excepting
Mfg., Monsanto Chemical, Penn¬ at the bottom of the depression in
sylvania Power & Light, .Conti¬ the early 30's and at the 1942 mar¬
nental Can, and Aluminum Co, of
ket lows."
(
;
S.
U.
America.
on
fears price rises,
ment
Research
,
,
Group Securities, inc.
prospectus
rency
&
Yet
the average investor doesn't real¬
ize that, in terms of earnings and
Kennecott
Copper,
Paramount
dividends, he can obtain substan¬
Pictures, Montgomery Ward, Al¬
tially more for his dollar today
lied Stores, Sears' Roebuck, Penn¬
through the purchase of seasoned
sylvania RR., and Great Northern, common stocks than he could have
pfd.
i'. ■
'
" '
• ;
in 1939.
For that matter, he ob¬
(4) Individual issues that were tains more for his money today
purchased on balance included: than he did in 1938, 1937/ 1936,
INSTITUTIONAL
a
v
Ward
lar
/
(bought.
by Henry
written
of
Abbot
"National
issue of
current
The
Notes,"
HUNT
By Our Washington Correspondent
emphasizes the need of curreform for German economic stability. Asserts labor move¬
v
The Investor's Dollar Goes Further
of a crumbling
of controls into open, active
inflation
would be largely
re¬
moved.
Although
many
price
away
Charles A. Parcells Co.
Admits Chas. Exley
DETROIT,
Exley has
of
firm
MICH.—Charles E.
admitted to the
been
Chas". A.
& Co.,
Parcells
Building, membersof
the Detroit Stock Exchange. The
Penobscot
31, 1947, Eaton &
Howard Stock Fund showed net
new
partner, who was born in
will increase, and it is the assets of $1,479,000, diversified as
Trinidad, B. W. I. but has lived
problems' would remain, it would
durable goods industries that are follows: Cash and U, S. Govern¬
in the United States for 24 years,
be technically possible to solve
the bellwethers which lead major ments
6.2%;
preferred
stocks them and come out with a gen¬ is a Griswold Street veteran, hav¬
cyclical changes. ;
11.1%; common stocks 82.7%.
eral level of prices and wages ing been associated with Parcells
"(3) Sometime during 1947 we
for 17 years in the capacity of
Hugh W. Long has a new bulle¬ which represented no drastic re¬
trader and salesman.
expect that new orders for dur¬
of
the
value
of
tjie
tin on "Dollar Averaging" as ap¬ duction
able goods will decline below pro¬
The firm
is the oldest local
Reichsmark.
plied
to
Fundamental
Investors.
duction.
'
'
member of the Detroit Stock Ex¬
It shows that a quarterly invest¬
"The German labor movement
"(4) This natural and to-be-ex¬
ment of $300 during the past dec¬ is committed to their preference change.
pected development in the heavy
ade, or a total ipvestment of $12,- for wage stability if prices can be
goods industries will set the stage
for some mild recession in 1948, 000, was worth $16,633 at the be¬ held. This fear of inflation is one
ginning of 1947, while distribu¬ of the rhost dominant and most
possibly extending into 1949.
1
tions totaling approximately $4,500 vital expressions of public opin¬
"(5) But businessmen can look
would have been paid during the ion jn Germany today. It must be
;
for relative stability ov^r the next
taken into account in making pol¬
'
;*•
half-dozen years comparable jto, preceding ten years. •
CHICAGO, ILL.—U. G. Roman,
' ■
although less than, the stability of
Calvin Bullock has a new folder icy,
well known on La Salle Street
the years 1922-28.
"Adjustments within the struc¬ for moreu than fifteen years in¬
Fluctuations describing Bullock Fund, Ltd.
ture of internal prices are being
may be
larger than they were
cluding eight years as a floor
The Keystone Company of Bos¬
during that period, yet not as ton has a folder describing "5 In¬ made. Adjustments of individual trader on the Chicago Stock Ex¬
large as durihg 1920-22 "
j
to higher manufacturing change, has become associated
vestment Advantages of Mutual prices
It seems to the writer that in
and raw material costs are being with Adams & Co., 231 South La
Funds."
made.
Adjustments between in¬ Salle Street;- specialists iri overternal prices and world-market the-counter securities, it was an¬
prices can be made. None of these nounced by J. K. Hoshor, Presi¬
adjustments requires any consid¬ dent of the company.- Mr. Roman
erable departure from the overall was previously with Enyart, Vara
As
As of March
.
group
Bond Fund
INC.
U. G. Roman Joins
Prospectus from your Investment Dealer or
HUGHW. LONG & CO.
incorporated
48
{os
WALL
STREET, NEW YORK
5, N Y.
chicago
angu»s
e
s
Adams & Co. Staff
,
ENTSSffll
c ustodian
AMrRvr/uu
imI v Ji Mj All
of
aim
PUTNAM
x
maintaining the general
and prices at the
wartime and present-day
Camp & Co.
level of wages
prewar,
■
„
1—'
Hentz 25-Year Club
level.
"
FUND
"Accordingly,
there is nothing
current price and wage sit¬
uation
which requires an ex¬
in the
F unos
^Soi
rate substantially differ¬
the rate existing before
war.1 To the extent that other
change
ent from
the
Prospectus
from
your
The
may
Prospectus
be obtained
local investment dealer
may
or
Keystone Company
of Boston
be obtained
price
Prospectus upon
SELECTED INVESTMENTS COMPANY
13S South La Sails Street
Street, Boston 9, JMass.
CHICAGO 3, ILLINOIS
the
structures have
has been
German
risen and
relatively
appropriate Rechsmark
exchange rate would be higher
than the prewar rate of 40 cents.
stable, an
Putnam Fund
50
50 Congress
request
from authorized dealers, or
Distributors, Inc.
State St., Boston
individual up¬
ward adjustments are being and
will be made in German prices,
To the
extent that
The
H.
Twenty-five-Year Club of
Hentz
dinner
ern
& Co., held its annual
meeting at Chateau. Tav¬
May 12. Three new members
admitted, bringing the total
membership of the club to 26.
were
Joins L. A. Huey
(Special to
The
Financial
Staff
'
Chronicle)
OMAHA, NEB.—Jack V. Brothbecome connected witl
erton has
L. A. Huey Company,
tional Bank Building.
Omaha Ra¬
#
^Volume 165
Number 4594
THE COMMERCIAL &
FINANCIAL CHRONICLE
(2615)
unfavorable development to have
government security prices advance
slightly with adverse business conditions.
,
Our
.
.
i
Reporter
Governments
on
INVESTMENT DILEMMA
; '
^
insurance companies and
savings banks
real investment
problem, because of
The
By JOHN T. CHIPPENDALE, JR.
faced
are
with
the lack of
mortgages.
The
savings banks at their recent convention
in Boston,
Mass., brought
the unfavorable
mortgage situation 'to the forefront.
In the
interim, what will these institutions do with
their funds?
.
'
The
market
government
good tone, as prices
continues
to
be
fairly
active,
with
a
in a narrow range. . .
Although there
to be considerable difference of
opinion about future develop¬
ments, that could have a direct
bearing on prices of Treasury issues,
the market is not
very much disturbed yet by the lack of
agree¬
ment over what
might take place. ■*.
move
.
they
the
not
are
other
While investors
particualrly bearish, with
hand, they
are
a
conscious
very
cautious,
are
few
of
exceptions.
the changed
.
.
On
.
business
conditions, and this is responsible for the desire to purchase
only
most riskless
obligations,- when commitments are made. ;.
the
in moderate amounts.
.
.
Because earnings are still
banks have been and still
the
on
decline, some of the commercial
taking on selected government issues
are
-
movements
still
are
being watched
closely
very
that
.
.
by
.
been in the restricted
obligations, which
are
sjill the
'
best acting
...
.
i
greater
than
.
be
divergent
price movements between the eligibles and the
restricted obligations,
with the latter securities in the
favored spot.
...
dutgo.
This
redemption of $100,000,000 of Treasury
bills,
as against the previous
minor fillip (aided
debt
sur¬
reduction
it
debt
calls of
$200,000,000,
the market
gave
by short covering and no selling by
Federal),
.although there apparently is not too much significance
attached to
it yet.
It does, however, illustrate the
flexibility of a credit pro¬
gram carried out by the weekly
redemption of bills, as contrasted
has
that might have been
measures
be altered
easily
as
or as
quickly.
.
.
adopted, which could
not
.
the repayment of certificates is
important,
effective in limiting reserves of the banks
as
would
of
ment
bills.
The
.
.
latest
figures show that
the largest owners of the June
certificates.
were
Such
a
of
i
"An unnecessary
Federal taxes at
retention
substantially
time levels,
as
far
as
.
.
of
is
Congiress
into
put
is
promptly
of
our
.
member
weeks.
.
.
.
The
.
.
.
banks
appear
.
.to have passed the peak,
Business loans
reporting
recession
that
a
pro¬
transac¬
"
too
high,
defeat
their
own
High surtaxes, representing
of
income
represent
a
and
grown great by
ability to retain and
reinvest a substantial part of
prof¬
its. A long continued
policy, con¬
trary to this, is the sWest way. to
foster
of the
monopoly
and
small business from
:
keep the
growing.
"Generally
speaking, I am
separating the power of
spending from the responsibility
of raising the revenues.
It was a
against
so
Henry J. Vettel
in
Manhattan Savings Bank.
Mr.
Vettel has been with the bank for
24
years
and
is
in
charge of its
uptown offices.
Chicago Exchange Member
CHICAGO,
ILL. —Ralph
Davis, Chairman of
the Board
are
lower
has
and
Exchange,
sion to
This
announced the
of
Cruttenden
same
for
the
last
on
these,
i
York
Mortgage Bonds, Series A, 33/s%
Dated June 1, 1947
Due June
1, 1975
five
so
highly publicized is
here and many maladjustments have
developed, some of which
resulting in unemployment.
How far this business
decline
will go is problematic, although the
general feeling is that it will
not be too long or too severe and will not turn
into a depression.
The issue and sale of these
Bonds
are
subject to authorization
by the Interstate Commerce Commission.
...
.
OTHER
SIDE
OFFERING PRICE
Because of adverse economic conditions and
declining commodity
prices and loans, is there likely to be an immediate
defrosting of
short-term rates?
.Will the money managers be
inclined to adopt
measures now that would have an
unsettling effect upon prices of
Treasury issues?
Would action be taken that
might accelerate
deflationary forces and add to the maladjustments in the
economic
system?
Assuming that the adjustment period is
short, is it
likely that there will be changes in short rates as
long as similar
results can be obtained through use of
previously adopted con¬
.
.
.
trols?
V
.
AND ACCRUED INTEREST
3.35% TO MATURITY
.
.
.
.
Copies of the Offering Circular may be obtained in
any State only from such of the several Purchasers
the Offering Circular and
others as may
lawfully offer these securities in such State.
named in
Kuhn, Loeb & Co.
...
While there is
denying that the authorities can
change
short-term rates, whenever
they want to, and it is not possible
to predict how and when they will do
so, there is considerable
backing for the belief that not only will rates remain
'
100.45%
TO YIELD
no
unchanged,
but there is likely to be a discontinuance of
the weekly
redemp¬
tion of bills in the not distant future.
Blyth & Co., Inc.
Harriman
The First Boston Corporation
Ripley & Co.
Smith, Barney & Co,
Incorporated
Goldman, Sachs & Co.
Union Securities Corporation
...
'
It is being pointed out that as
commodity prices and loans con
tinue to decline and unemployment
spreads, there will be a turn
about in the credit policies of the
money managers.
If the redemption of
Treasury bills should be stopped
(as is
believed by many), the opinion is held that
the authorities can
still
...
Hemphill, Noyes & Co.
F. S.
Hornblower & Weeks
Moseley & Co.
Shields & Company
W. C.
Langley & Co.
Dean Witter & Co.
<
keep government bond prices within limits, by
supplying the mar¬
ket from time to time with issues
that-are not
readily available in
large amounts.
This could prevent key securities
Trom moving
away-from the rest of the market, -and would most
likely forestall
a general upsurge in prices.
; Some feel that it
might not be an
.
.
A. C. Allyn and
Pacific Northwest
.
.
.
Company
Incorporated
May 14, 1947
Equitable Securities Corporation
Company
Co*.
Tuerk, of
firm.
Southern Pacific Company
San Francisco Terminal
First
&
membership is being trans¬
ferred from Federick R.
the
admis¬
membership of Walter W.
Cruttenden
$22,500,000
.
are
declining, with New
figures
been
.
W„
of
Governors of The Chicago Stock.
NEW ISSUE
now
are
THE
recently
was
.
as
.
City
Vettel,
from
Assistant VicePresident to Vice President of Th©
This advertisement is
not, and is under no circumstances to be construed
as, an offer of
securities for sale or as a solicitation
of an offer to buy any of such securities.
The offer is made
only by the Offering Circular.
they
they were during the war,
orthodox policies will not be
followed now as in the past.
1 This should mean that credit
policies will be dependent largely upon business conditions.
the down grade.
in
be
.
to believe that
Commodity prices
com¬
active securities markets. I
no
doubt the present 25%
reason
tax laws
with,
taxation
rate, would not only
beginnings
war¬
reduction
proceeded
with
may
investment and production effort.
American
business
enterprise, whether corporate or
individual, has started from small
effect, not later
1, and that a
of
deal
Congress
Historically,
individuals
tax
a
J.
no
dependent upon them
reason
the
Now Vice-President
progressive penalty on individual
concerned,
in my
opinion,
would be destructive of our
.econ¬
omy.
I hope at* the present ses¬
sion
next
brackets,
extent.
doubt that the
monetary authorities have
adopted a bolder policy toward the money markets, because
no
to
relieve the local tax
promoted
virtual confiscation
the upper
...
as
to
dollars for the Treas¬
but would lead to freer and
ment.
Treasury, and it is enlightened
self-interest for every one of us
to cooperate to the fullest
possible
holders
.
not
tending further aid
munities
employ¬
individual
program is con¬
the
be the retire¬
non-bank
,
there is
the state
assuming and paying for
some
of the services now
per¬
formed at the local
level, or ex¬
purpose, destroy the incentives of
hew enterprise and hinder and
reduce production and
templated in the June and July
savings bond drive, announced by
than as of July
thorough revision
It seems as though there are some who believe that short
money
rates will be unpegged before, the month
is over, and it would not
be surprising to them if this action were
to take place any
day.
This is the reason for their bearish view of
the market, because
they are of the opinion that lower government
security prices will
result from the defrosting of the bill
and
then the certificate
rates.
are
govern¬
"Rates,
whether
applying
to
corporations or individuals, that
are
into
it will not be
DEFROSTING
While there is
by the Federal and state
ments, and the difficulty of col¬
lecting certain types of taxes at
the local level,
consideration may
well have to be
given, either to
j
insurance com¬
pany and savings fund
portfolios,
bill
...
While
as
War L
broader
collecting taxes, imposed
Henry
capital gains rate stifles
are
It is the opinion of many
well-informed government market
followers that the funds that are not
being used to pay off
weekly bills will be applied toward the
redemption of the June
certificates.
base for
collapse of it»
with The
more
tions.
longer
the hands
to
more
For
a
sound
there must be not only
reduction but a
shifting of
into
able
have
bank-
...
with other
longest
Nevertheless,
comprehensive way. I believe a
capital gains tax at, say, half the
ury
part of the debt out of short-term
bank-held securities into
and
the
duce
obligations.
maturities,
that
present
should, that
principally in short-term
-
.
The announcement of the
budgetary
taken place where
investors.
BILL REDEMPTIONS
the
plus because not all items in the
budget
represent
current
cash
economy
■
There is no doubt a large
potential demand for these
issues,
which could become
very important market-wise if economic con¬
ditions are to deteriorate, as is believed
by some in the financial
district.
This leads to the opinion that there will
sl
of the
some
the
burden."
cash expenditures which
excess is
held
■
-.
bought
unexpended balances raised
in the
Victory Loan, but in part
from cash
receipts in excess of
"
.
.
restricted bonds.
is
JLARGE DEMAND
.
.
...
out of
the
Reports indicate that the heaviest
selling by "Federal" has
securities.
.
(Continued from page 8)
be, because they continue to sell issues to those that
are
looking for securities, in order to keep the market within recent
trading areas.
.
before the
and
following World
IDA Head for Both Debt and Tax
Reduction
.
Price
time
some
It
building industry really gets under
because of the high costs.
Will the investable
resources of
savings banks and insurance
companies be kept in cash or
put into
short-term Treasuries or into
the longer restricted
issues?
Sav¬
ings banks appear to be
using a part of these funds for the
214s
of 1959/62,.
Insurance companies have
-
.
,
powers
be
may
...
inflation
currency
...
These purchases, along with the
absence of large offerings,
have kept the market for eligibles
pretty much on an even
keel.
There is also some
switching from the intermediates
into the longest bank
2^s. ...
,
.
way,'
i
.
.
...
.
seems
.
a
19
policy of that kind, carried to ex¬
tremes, which led to the German
20
FINANCIAL CHRONICLE
THE COMMERCIAL &
(2616)
Thursday, May IS, 1947
Taft-Hartley Bill Is Slave Labor Legislation
Securities Salesman's Corner
tion
curb
to
the
effectiveness
of
unions.
By JOHN
DUTTON
which seeks to impose the com¬ nizable/ Thus labor's Magna Carta
transformed
from* a
pulsory open shop upon American would be
voters in the last election were industry. Out of years of experi¬ guarantee of industrial freedom
disturbed by high prices, by post¬ ence in collective bargaining, we and democracy to an instrument
war
shortages, by the failure'of have now reached the point where of oppression against the members
government controls and by re¬ 40% of the union workers in the of labor unions. These provisions
curring labor-management strife. nation are covered by some type would pull labor and management
The people were sick of war on of union-shop contract with em¬ apart and place a huge new bu¬
the industrial front.
Those
They wanted ployers. These arrangements, vol¬ reaucracy between them.
untarily entered into by labor and who protested about wartime gov¬
peace and production.
management, have helped to make ernment controls will have reason
But
if
the
Taft-Hartley pro¬
America
the
greatest industrial to complain even louder if this
gram passes, the people will not
nation in the world. The highest legislation becomes law, because
get what they want. Instead, they
records for production during the it will create more Federal red
will get complete chaos in the na¬
war were attained by plants oper¬
tape than all the wartime regula¬
tion's industrial life.
By destroy¬
ating under union-shop contracts. tions put together.
ing the most effective methods of
Where such contracts are in force,
The American people will re¬
peaceful collective bargaining, by
the employer derives the advan¬
ject such totalitarian invasions of
attacking union security and by
tages of stability, efficiency and their freedom, their security and
giving hostile employers unfair
friendly relations with labor. The their hopes of prosperity.
The
advantages over labor, these bills
workers, in turn, gain high wage question then occurs: since these
would
promote the worst out¬
standards and good working con¬ bills are
obnoxious, can any con¬
break
of
industrial
strife
ever
ditions. The public at large ben¬ structive and
helpful legislation
seen in this country.
efits because high production, ef¬ be drafted?
Let
examine
us
"mandate."
the next! there are times to be up
also times when it is best to do nothing.
Knowing "when to do" and "when not to do" is as important as
knowing "what to do."
"Timing" is an essential element of success
day is not the same, as
One
doing, and there are
and
when it comes to selling
securities.
attitude when you go forth to sell another
an
idea.
Are you sold yourself—do you believe it is the time to
invest?
Do you have the right type of investment to offer-to your
customer?
Are you physically in the mood to sell effectively—are
Consider
you
your
own
mentally alert?
right—is it a dull, cloudy day-
Is the weather
pessimism thickening the air around you?
If so, there will be
when the sun will shine and optimism will be in the air.
Don't say "that's the bunk."
If you have been observant concerning
is
Other days
and the state of your mental
there have been days that
anything and there were also days when nothing
your own attitudes, changing moods,
and physical condition, you will find that
you
could do almost
"click."
Would
'
Your
.
customers
too.
They
may
at the
cOmes
cloudy,
to your
and prospects have their
consider what happens
Then
or
public in this connection.
good days and bad ones
be busy when you call or your telephone solicitation
time.
May be their day is also befuddled and
wrong
atten¬
problems preclude giving any
other more pressing
proposition.
tion to your
of
can
one
salesman
a
advance the state
in
know
his business will never press
who knows
environment for your
an
discussion save your "act"
time and another day.
for another
■«
*
is what selling means—you are an
For that
this
debate in
As the
claimed
Undoubtedly,
actor and the lines
play can be the best ever written, but if you can't put your
audience into a comfortable seat and dim the lights he may never
hear them.
That is why they give you soft music and the rest that
of your
for
stripped
tives
the
Congress
the hypocritical
this
legislation
are
gresses,
of his prospect's mind
for an
interview.
The only time to talk convincingly to your "public
is
when it is ready to listen.
This means a relaxed atmosphere, free
from pressure, and outside interruptions.
If you can't get this sort
No
but
By four direct attacks i its whole meaning. The Taft Bill
rewrites the
against union security.
Wagner Act to a
First of these is the provision point where it becomes unrecog¬
about?
(Continued from page 7)
pro¬
claims
being
and the real
being
exposed.
Hartley,
Congressman
instance,
the
of
Chairman
For
Labor
House
a
for some worthy
collection
Gold
i,; WASHINGTON, May 14
In
—
World
for the
Bank
loan of the
theT Egyptian Government gold, since the Baftk is authorized
through its ambassador approached to make loans for currency stabil¬
the State Department with a re¬ ization. Actually, it is mot' clear
whether the Egyptian pound needs
quest for a loan of $88,000,000 in
stabilization
through
gold
re¬
gold for the purpose of strength¬
ening the gold cover behind the serves, or whether the Egyptian
note issue.
The present cover is request stems merely from a de¬
only about 12y2% and the re¬ sire to achieve a psychological ef¬
.April
quested loan would approximately
double it.
Before World War I
the
cover
was
100%,
about
the
Embassy in Washington states.
Last week
told
that
in
the
United
States
Em¬
Cairo
Egypt's request and had never be¬
fore
made
such a loan.
Egypt
WASHINGTON, May 14 — The
Bank's balance sheet of
World
31,
1947,
shows
that
no
gold is held by the institution. It
is understood that towards the end
of 1946 the Bank sold what gold
apparently wanted the money for
15
or
20 years.
The American
it had received in
on
member
payment of calls
subscrip¬
countries'
that
after
Embassy is reported to have ex¬
plained that the wartime loan to
testing the market with an issue
China, about $200,000,000 of which
of about
was
sent in the form of
"over
the hump" was
gold flown
not
an an¬
expects to apply to
the
-
reported
$250,000,000,this summer,
World
Bank—according
to
present plans—does not expect to
make
alogous transaction.
Egypt
the
It
is
tions.
another
offering for about
six months.
killed
were
then
killing?
made
-
in
a
factories,
week and
it
on
possible that
passing
running his
Congress
The
the
is
Labor
not
proposal.
that
endorsed
Labor
afraid
the
of
facts.
that they can no But Congress spurned the recom¬
longer operate under such con¬ mendation and passed the Case
tracts which they consider desir¬ Bill, which the President vetoed.
able, just as labor does? Is Con¬
Again this year; the President
gress going to strike the first blow appealed to Congress to authorize
at the free enterprise system by a
fact-finding investigation. Again
dictating to management and la¬ Congress is ignoring his wise ad¬
bor? Is the freedom of contract, vice.
Instead it is rushing head¬
other employers
guaranteed
by
our
Constitution
same
Bill
as
40-hour
law.
The American Federation of
tion.
is
going to tell the Ford Mfg.
Company and many thousands of
now
a
compliance
cere
the
by
passed
Hartley
House
into
long
the
worst
legislative
blunder in the nation's history.
I
the people, to prevent
tragic mistake by making
urge
you,
this
voice heard in Washington.
your
Edward L.
English With
Gordon Graves & Co.
MIAMI, FLA.—Edward L. Eng¬
has
lish
become
associated
with
of
This prohibition
Representatives.
is intended to "break unions down
to
the
man
local
level,"
as
admitted.
Hartley
Congress¬
It would
help only the few chiseling em¬
ployers who want to
their
competitors
by
hearing to the thousands and thou¬
sands of fair employers who get
wages.
undercut
reducing
It would wreck the most
effective machinery in existence
along well with labor unions and today for labor-management peace
No wonder
oppose
the drastic provisions of in many industries.
his bill because they realize such the Senate rebuffed Senator Taft
legislation would hurt business al¬
most
he
much
labor?
Why did
fail to obtain their testimony?
as
as
and defeated it.,
The third,
(
deliberately punitive
provision authorizes damage suits
Edward L. English
in
the
Federal
Courts
against
with complaints the only ones to unions.
This pernicious plan is
the
Miami
office of Gordon Graves
be given a chance to testify?
Is intended to help a few vindictive
&
Co., Inc., Shoreland Arcade
that the way to obtain a factual employers
who might want to
Mr. English was for¬
basis for legislation?
harass and bankrupt a union by Building.
merly with Strauss Bros., Inc. and
For
every
employer who flooding it with lawsuits. But no
1'
sensible
employer
would even Corrigan & Co.
Why
the
were
few
employers
r
For 34 Years
I
can
produce
The
real
a
pro¬
hundred
on
purpose
Unions
behind
legislation is to weaken and de¬
stroy labor unions. That purpose
is reflected in every line, sentence
No pious denials by the
of the Taft-Hartley pro¬
gram can change this fact. If they
have their way, labor unions will
be reduced to an impotent status,
sponsors
BUREAU, Inc.
Street, New York 4, N. Y.
San Francisco
He would realize
standard of living.
would
this
The
be
R. E. Swart Dies
R.
Emerson
Swart, President
for damages.
since 1942 of Huyler's candy store
to inflict
direct punishment upon labor in chain, and Treasurer of the New
York County Republican Commit¬
this legislation is contained in the
sections which would restore the tee, died May 6 in Tucson, Ariz.,
where he had gone recently to
evils of government by injunction.
Enforcement of this would bring recuperate from a heart attack
suffered last January.
about
involuntary
servitude, a
Mr.
Swart joined the
invest¬
punishment which the Constitution
of the United States declares can¬ ment banking firm of P. W. Chap¬
The
fourth
attempt
not be imposed
powerless to defend their mem¬ vidual except as
bers and to protect the American crime.
How
the
lawyers and suing
this
and section of the Taft and Hart¬
Established 1913
consider it.
folly of trying to improve his re¬
lations with labor by calling in
them.
ley bills.
Is
he insisted
forbidden under the
"pressed" for the anti-labor
Over-the-Counter Quotation Services
,
years
why he listened to such employ¬
ers and why he refused to give a
Four Attacks
46 Front
The late Henry Ford
outstanding example. For
still
bank-deposit insurance?
who oppose
Ghiraffo,
an
and
—
reactionary crew
who opposed
social security, laws against child
posals,
NATIONAL QUOTATION
\tracts.
co
Congress
I would like to ask Senator Taft
Special to The Financial Chronicle
March
in
charged
ment controls
labor
World Bank Out of Gold
the "Chronicle" was
had advised the
Egyptian Government that the
United
States could
not
grant
bassy
fect at home.
Employers, in growing numbers,
recognize the value of union-shop
In my sincere opinion, no new
legislation is necessary. Labor re¬
lations, as many a wise employer
has discovered, are really a prob¬
lem in human relations. The prob¬
lem cannot be solved merely by
with and upheld by the Supreme Court
of the United States, going to be
having drafted the Hartley Bill?
The: same tight little group of destroyed by one, ill-considered
labor-hating employers who have legislative blow?
The second punitive feature of
for * generation. after
generation
fought so bitt^ly against every the pending legislation is the pro¬
decent' reform j and every bit,' ox posed ban on industry-wide bar¬
progress for, the^ood of' the com¬ gaining.'The Senate, just the other
mon.
man?' The same interests day, defeated Senator Taft's at¬
who
promised
the
American tempt to accomplish this.
How¬
housewife lower prices if govern¬ ever, industry-wide bargaining is
been
Special to The Financial Chronicle
lower
Good will and sin¬
with
existing
automobile plants on an open shop laws
calling for fair collective
tended "to break the unions down
basis.
But when the union won bargaining constitute the best ap¬
to the local level."
Let me ex¬
an election,
Mr. Ford voluntarily proach to industrial peace.
plain right here that means break¬
and
of
his
own
free
will
an¬
But
no
one
person
or
group
ing the unions entirely, because no
nounced
hq wanted to sign a knows all the facts and all the
local union can hope to bargain
union-shop contract. He did so be¬ answers. That is why President
effectively on even terms with a
cause he considered it good busi¬
Truman urged Congress in 1946 to
nation-wide industry.
ness.
And he kept the union shop create a fact-finding investigation
because he learned it was good into
An Employers' Bill?
labor-management disputes
business.
before attempting to pass legisla¬
A few days later, Senator Rob¬
.
Egypt Refused Loan of American
in
prices and better service.
was
Committee, admitted on the floor
of Congress that his bill is in¬
church—the movies—when they want to take up
charity—or pull a fireside chat that
goes into your home.
It is a lot easier to take money away from
anybody after they have had a good dinner—why beat around the
bush—it has happened to each and every one of us.
Securities do not sell themselves—until that happy day comes ert
Taft, Chairman of the Senate
those of us who make our living by going out and convincing others Labor Committee, told the Asso¬
that they should risk their savings in some other fellow's business ciation of American Newspaper
will have to remember that investors also act like human beings. Editors
that
his
bill
contained
They either like you or they do not—they trust or distrust you-+- two-thirds of the matters "strenu¬
they think you are wise or dumb—or they don't give a tinker's ously pressed upon us by employ¬
d
n about you.
Your job is very simple—all you have to do is: ers." We asked Senator Taft to
first, find people with money to invest; second, get them in the name
these
employers
but he
right mood to talk with you; third, convince them they should risk never did. Were they the same
their money in the security you are trying to sell them.; If you crowd of
high-priced lawyers and
can
do this often enough to make a good living year in and year
lobbyists for the National Associa¬
out, then, as Kipling said, "you'll be a man, my son," and no fooling'. tion of Manufacturers who have
with it in
goes
result
relations
ment
mo¬
away
are
ficiency and good labpr-manage-
Hartley
.
upon
a
any
indi¬
punishment for
as
&
its
Co., Inc. in 1923, serving
Vice-President from 1925
to 1931.
Bill virtually re¬
brought peals the Wagner
man
Act and distorts
Later he formed his
investment
firm
under
of R. E. Swart & Co.
-
the
own
nam<
-
Volume 165
Number
4554
Not
(Continued from
THE COMMERCIAL & FINANCIAL
CHRONICLE
7)
page
which, I think,
no
one
can
of
ques¬
discriminating between reason¬ tion, and which certainly is not
reforms, and proposals in¬ questioned in the pending Bill.
Unions
hearing the evidence, the
committee drew its
own
bill.
We
listened, not only to the employ¬
ers who wished
changes, we were
quite willing to listen to anyone
Laws
themselves, but, of mously
that
administrative
believe
I
feel
that
almost
the
does,
the
unani¬
solution
of
our
regulations, labor- problems must rest oh a
and
the
administrative
rulings, free economy, and on free col¬
and the decisions of the
Supreme lective bargaining.
The Bill is
Court
itself, holding in effect
certainly based upon that propo¬
tended to put unions out of busi¬
ness.
Assures Free Bargaining
Basically,
Committee
the
the
able
After
Bill
Anti-Labor Bill
an
Immune
is that they went at the situation
with a
meat axe.
They practi¬
tnat
there
any
court
was
no
could
perpetrated
in which
way
revise
by the
injustices
National
La¬
sition.
nize
the
That
the
that
means
freedom
to
we
strike
injustice,
tried to correct it.
net result
Wher¬
we
Of course, the
of
correcting a number
of injustices
is, incidentally, to de¬
crease
labor
that
me
of
some
union
the
of
power
leaders.
It
back
conditions,
to
side feels that it
sonable
with it.
it
make
can
demands
and
in
If neither side feels that
and
peace,
hope
that
is
the
and
labor
method
pursued by the bill which is
before the Senate.
Not Anti-Labor
It
is
is
not
to
not
Bill
a
wreak
inspired by
vengeance
because
of
done.
simply
It
Wagner
anti-labor
an
what
Bill.
he
Act
desire
a
on
The
It
have
proposes
to
enacted
was
Relations
for
a
proper
has been
deal
completely one-sided. It
simply for the one purpose of
equalizing, for permitting a large
number of employees to act;
a$
one; in effect, to compel them to
act as one, if the majority desired
with
the causes of labor trouble
and the injustices and
inequity of
the present law.
One-Sided
Labor
was
treme
of
But
unreasonable
power,
cannot
er,
be.
be
men
granted
without
ex¬
pow¬
to
any
whelming
opinion?
have
we
strikes
lic,
proportion
of
public
It is due to the fact that
a
large number of
inconveniencing the pub¬
even
threatening their
safety and welfare.
I think, even
more,
'
number
a
of
ticesywhich| have
it
is
many
de¬
injus¬
developed f in
labor
relations, injustices, which
perfectly clear Wall, the peo¬
ple who come in contact with
particular disputes which, in effeet, are without remedy in the
under
Small
present
Business
laws.
Victims
I, myself, feel that the larger
employers can well look after
themselves.
United
of
But,
throughout the
States, there
smaller
thousands
are
employers,
smaller
under
these
businessmen, who,
existing statutes, have come grad¬
ually to be at the mercy of labor
union leaders—either labor union
leaders
attempting
to
organize
employees, or labor union
interfering with the con¬
their
leaders
duct
of
reason
or
their
in
business,
undoubtedly had
,
«?
dealing
for
with
advantage
employees.
one
and he could
at
time.
a
In
negotiations of that character he
sqchi a superior advantage
Congress (came to feel that it
had
that
legislate
dbr to
defiance
of
the
correct
bring about
a
tices
rights
of
Polls
taken
tion
today
show
that
union members themselves resent
the power of labor union leaders.
Even
the
on
closed
shop,
leaders
question
which
most
are
of
the
the
union
vigorously
de¬
fending, the polls show that
more
than half of
actu¬
their
men
are
ally opposed to the position their
leaders are taking because, ap¬
parently, they feel today they
are
at
a
great disadvantage'; in
dealing with union leaders.
The powen given to the leaders
by existing legislation is so great
that
the
individual
exercise his
is
unable
to
be
can
be
have
considered
whether
this
not
in
involve the
ques¬
I
think
cases
it
which
arbitration,
r
his
from the AFL unions
specifically in
that
situation'
or-
and
balance.
Congress, therefore, passed the
Clayton Act and the Norris-LaGuardia Act,
in order to limit
legal
actions
against
unions.
Congress passed the Wagner Na¬
tional Labor Relations
der that the
Act, in or¬
employees of a sin¬
gle employer might act as one in
dealing with that one employer,
in order that they
might be on a
sound, and equal
basis,
a
principle
theymselves;
Padway,
from Mr. Green and Mr.
who
the
took
position,
I
correctly, that the Board regarded
themselves not as a judicial board
to
determine
rights under the
law
in
lawful
a
sale,
With
at which
60
Injustices
of
the
Bill
which is now before the Senate is
Relations
we
Dated
ments dealing with particular in¬
justices, which were called to
our
attention
and
which,
corrected by
in
the
an
can
Amendment
have
a
or
we
These
various
injustices
the
Hearings
been
no
of
Labor
er
and employee.
,
Mass
Picketing Is;vj-
Halted in Colorado
The
State
and
issued
under
State's
Labor
two
mass
demonstrations
vetoed
by
the
President.
The
interpretations,
not1 only
Telegraph Co.
day
Telephone &
The Commission's
order also forbade
strikers to ob¬
struct entrances to the
Mortgage Bonds, 27/s% Series due 1977
Due
May 1,1977
Copies of the Prospectus may be obtained from the undersigned only by persons to whom
undersigned may legally offer these securities under applicable securities laws.
Blyth & Co., Inc.
May 14,1947
a
the Mountain States
the
the Case Bill of
which was only a par¬
approach
to
the
problem,
was
provisions of the
Act,- and followed
building.
and is under no circumstances to be construed as, an offering of these Bonds fur
offer to buy, or as a solicitation of an offer to buy, any of such Bonds.
The offering is made only by the
Prospectus.
May 1, 1947
Commis¬
April 29 issued
earlier in front of headquarters of
have
year,
which
on
,
an order prohibiting mass picket¬
ing by striking telephone workers,
an Associated Press dispatch from
Denver reported.
The order was
But the
Senate, except
tial
Industrial
sion of Colorado
hensive consideration of the
prob¬
lem, and nothing for action by the
last
this Bill
attempt to
sonable
of
years, since
1939, there has
Bill, no compre¬
for
restore equality between
give the
to fix wages
must work for an¬
power
men
the Law.
been frozen into the Law.
fact is that for eight
nation¬
Objective
reasonable
Price 102.75% and interest
be
in¬
only
that in
say
testimony
believe
we
I
so
Southern California Water Company
First
a
then,
Labor Peace Is
And
$5,100,000
Act,
prac¬
days!
New Issue
which is re-written from the first
section to the last with Amend¬
labor
of
to
And
•
revision and Amendment of the
Labor
referred
strike.
is not,
or as an
but as
union in
greater' part
Wagner
unfair
employ¬
We have a rea¬
attempt to bring about
other year or two years to
And
come, equality in labor relations.
I do not see how in the end
if the Act is passed, I feel con¬
we
can escape a collective
economy. fident that it will tend to bring
If
we
give
the
government labor peace, that it. will
make
power to fix wages, I do not see both sides
reasonable/ and that it
how we can take from the
about a situation in
gov¬ will bring
ernment the power to fix
prices. which no longer we face the in¬
And
if
the
government
fixes justice, and the inequality, which
wages and prices, we soon reach
the present laws have, brought
the point where all
industry is about.
government
to put a CIO
plant in the United States!
Deals
a
announcement
of
the part of unions.
does
not
restore
the
manner,
crusaders
every
This
think
pro¬
do
basic question of
if
list
wide
can
wages, prices, and working condi¬
tions. But, if we impose
compuL
sory
It
employer should
out unfair labor practices.
proposed Law provides a
I
that
right to strike
modified.
modified,
the
one-sided.
no
junctive process. It does not re¬
peal the Norris-LaGuardia Act,
in any case, except for one case
Modifying Strike Right
We
was
than
on
It
the people of the United States.
.
The
an"
his
thousands,
deal with them
must
carry
-
one
was ope man, the employees
might be
and
Act
vided
point
claims,
certain
privileges,
attempted to give the
the employers. The Wag¬
to
same
threat
right to, free speech,
right to work as he pleases,
and his general- right to live as
under government control and fi¬
he pleases! And I might, say that
such action.
'
7
nally there is a complete social¬
in this Bill, we do not abolish the
ization "of our economy.
Of course, that Act was one¬
union shop. \ We restrict it.
We
I feel very
sided, and the first, board that was
strongly/therefore,
provide that it cannot be obtained and this Bill
appointed,. I believe, established
provides, that so far
unless the majority- of the men
a .method of
as possible, we should avoid
procedure which was
any
vote that they really want to ob¬
system which attempts to give the
completely prejudiced and com¬
tain it.
—
•
government this power finally to
pletely
on.
the. side
of
labor
And we provide further, that fix the
unions. In 1939 I sat through the
wages of any man.
Can
Hearings fori .nearly six months even after it's obtained, the union we do jso constitutionally? Can
must
admit
to its
on
the operation of the National
membership we say to all the people of the
Labor Relations Board up to that all the people who want to enter United States: You must work at
time, and I do not think I've ever that union, and cannot shut them wages fixed by the government?
I do not think we can. I think
heard, certainly in America, such out from jobs by refusing to let
a
series of miscarriages of jus¬ them into the union, or by firing it is a long step from
freedom,
them from the union for some and a
tice as occurred under.the first
long step from a free econ¬
cause other than
National Labor Relations Board.
non-payment of omy to give the government such
I might add that the most violent dues.
a
right. And so what this Bill
testimony we had in that particu¬
lar hearing that I remember came
for another.
Originally, before the passage
of any of these laws, the
employ¬
er
to
the
direct
certain
make
obtain
have
ner
I
to
to
we
past, few dis¬
a
re¬
Wherever we had
a union to unr
given the right to
from the exercise of this
right to
strike.
But, in the
reached
the
and
purpose
store equality.
danger, to the people of the
United States which
may result,
being willing to exercise
accomplish ends which are
to
whole
pro¬
...
whole effort of this Law is to
the
was
Certain-,
reasonable
a
•
The
dertake
there
is
vision.
and
'
because
are
courts
that
-
had
and
manded
Courts, and requires
they must file financial re¬
ly,
the right, in spite of
inconvenience, and perhaps
finally
upon
Federal
recognize
where
impose
ports to their members.
of them
.
Why is a Labor Bill necessary?
Why is it demanded by an over¬
the
that
The
to
to
today, the law im¬
employers. It, there¬
makes
unions
suable
in
whole
them
neither
upon
putes
wish
which
which
could
it
purpose, but the result of the ac¬
tual administration of that Act
anyone,
may
Act
National
acts,
poses
fore,
do not believe that that
right will
be abused.
In the
not reasonable.
innocent.
intends
the
run,
free
a
unions the responsibility for their
below the proper
wage to be paid
for the work which is done.
We
long
in
out*
base
on
Making Unions Responsible
have acquired a power which
today
the
people
resent,
and
which, inevitably has been abused.
Many of our labor leaders are just
as judicial and as fair as
anyone
ers
leav¬
law, with the activities of many
other persons who were
entirely
now
particular, I believe, that in
dealing with small business, with
farmers, and even with workers
themselves, the labor union lead¬
prac¬
interfered, I believe, certain¬
unlawfully,
under
common
ly
In
group
simply eliminated all
boycotts!
It
there
for
secondary
tically without any control, even
by their members, to order strikes
there is reasonable
equality at the
more
of
remedy against any union,
ing the union leaders free,
get away with certain de¬
mands, I do not believe that these
demands will ever be made.
If
much
nature
The laws
can
is
the
eties.
away
bargaining table, I believe
which
boy¬
cotts, jurisdictional strikes, and
strikes of the racketeering vari¬
unrea¬
get
entirely
are
throughout
recognized as. com¬
pletely proper strikes; and strikes
that neither
so
which
proper,
and
this Bill are
to the point
where, when an
employer meets with his employ¬
ees, they have substantially
equal
bargaining power,
strikes for higher wages
hours
and
better
working
and
aim should be to
get
our
and strikes
for wholly illegal and improper
purposes. They do not. distinguish
purposes,
between
the
seems
justifiable
to
relations
shall have an advantage*
attempts to take away those
privileges given* by existing law
to
labor
unions
and
put
both
parties on an entire equality. J'J
It
.
Labor Leaders Too Powerful
We heard the evidence.
we
found an
ever
cally eliminated all legal remedy
bargaining
im¬
Relations Board, resulted in
provement of wages, hours, and
gradually building up the power,
working conditions, when a con¬
came forward with
substan¬ against
unions
for
any
action of the labor leaders so that
today, tract has expired, and neither side
tial proposals to meet the
In' effect, they in my opinion, the
present taken by them.
weight in col¬ is bound by a contract.
situation.
provide,
as
construed
by
the lective
bargaining
negotiations,
Since
we
do
not
limit
such
The National Manufacturers As¬ courts at
least, that any action instead of being on the side of the
strikes, it seems to me there is
sociation had
nothing to do with by a union taken in order to ad¬ employer, is all on the side of
no
justification for the charge
it, and the allegation of the vari¬ vance its own interests, is proper the labor
leaders, except perhaps that the passage of this Bill
ous
labor ads in this
will,
respect is and there is no legal recourse against
the
very
largest com¬ in any way, put the workers at
pure demagogy.
against the union.
panies in the United States.
such an unfair
disadvantage that
The laws referred to, do not
Equal Bargaining Power
they will have to accept wages
discriminate between strikes for
who
effect,' is
labor
party
recog¬
when
question involved is the
bor
in
future
It
.
The difficulty with the Clayton
Act and the Norris-LaGuardia Act
21
(2617)
THE
Thursday, May 15, 1947
COMMERCIAL & FINANCIAL CHRONICLE
(2618)
22
Holland Plans Sale of
$20,000,000 Bonds
'
The
the Nether¬
the Secur¬
Commission a
of
Kingdom
Two Pressing UncertaintiesLabor Strife and Inflation
lands filed May 9 with
WILLIAM J.
By
of
aviation, the Scottish Marquis of Sempill, Canada ^as destined to
the center of British air training. Thus in the early'stages
of the
the Allied cause was aided to an incalmlabl. degree cy
adoption of the British Commonwealth A r Training Fian.
Throughout Canada 154 flying centers were established, over 300,1)00
Long
become
covering
$20,000,000 of 10-year 3%% ex¬
A na¬
tionwide investment group
headed
by Kuhn, Loeb & Co. will
underj-
the
trained
were
pauis anci^aircraft
as
evolved by. "Canadair"
incorporates the Rollserected, and paved
Royce engine in a U. S. air-frame,
constructed equal¬ is possibly the most advanced
members,
ground-crew
buildings were
runways were
6,000
has
the public
formation
with the
air-routes
over
commercial air-transport at pres¬
ent in existence.
In addition to
the leading U. S. aircraft builders,
the foremost British companies in
the northern top
this
field, the Hawker-Siddely
become
world, that Canada is situ¬
center of the practical
air map. In the new age of strat¬
osphere flight Canada's climatic
conditions are an advantage rather
than
a
handicap, since in the
northerly latitudes the weatherfree stratosphere is reached at a
lower altitude than elsewhere.
<©£ the
ated at the
The
pertinent point, "however,
is Canada doing to profit
velopment the Dominion Govern¬
through Trans-Canada Air¬
ment
operates the only transcon¬
system in Canada and
the Dominion's international
,trans-oceanic services.' Al¬
ways
tinental.
also
and
though considerable criticism has
been: evoked by this virtual na¬
tionalization of air-transport,
the
experience
of1 other
countries
tends to lend support to the con¬
operation can
with the enormous ex¬
tention, that private
not
cope
meeting - competition
during this phase when techno¬
logical progress quickly renders
existing aircraft types obsolete.'
pense
of
,
the
of
for
used
be
the
purchase of products and services
for reconstruction of the Nether¬
or
in Europe
propulsion engihes,
be well in the
in this future phase of
Canada will
front
fore¬
avia¬
;
tion progress.
As
period
the
in
be
to
Canada will be
in the
with that monstrosity without re¬
sequence,
what can we
flecting on it at all.
This fact makes it necessary for
economic
terms
heretofore made
latter part
this, I do not really think that
you are going to forget 1941-45.
I mean that you do not realize
how'well you have adjusted your¬
selves to the abnormal.- You do
say
increasingly active
air-trans¬
market for
generally quiet with
war
being formed
Street,
Lee Rand & Co. is
ofices _at
Broad
30
City, to engage in the
New York
Partners
business.
Lee J. Rand, George
and John E. Bilane,
&
TAYLOR, DEALE
Co.
a
are
H. Brounoff,
Mr. Rand was
partner in L. H. Rand
Mr. Brounoff and Mr. .Bi¬
Theodore J. Knapp Dead
COMPANY
Theodore J.
Street, New York 5
.
..
value,
money
according f to
J?11*?*
■
f
Arid, when
Government made in
lands
1945^
In the face of these tremendous
only indebtedness of
the
before,
Netherlands
the
internal.
was
you^ remember
lA WPTP
in
we'
were in
abrupt shift in the relative
of different goods reflects
value
itself
was
carried
on
by the Nazi invasion.
000,000 bond issue in the United
States
himself
on
in
1924
through
May- 6th at the South
Sportman's
Club,
Oakdale,
L. I.
bonds
.
deemed
in
After
1932.
Netherlands
was
able
1926, the
to
resume
its
policy of resorting
primarily
to
internal
and .until
borrowing
recently practically all
its bonds
sold in the Netherlands'mar¬
1
ket.
Saad, Fund Official, to
Report
on
Geneva Parley
WASHINGTON, May
Ahmed
Brulin & Co. in IPLS.
SECURITIES
group
amounting to 300,000,000
guilders were sold, of which 125,000,00 guilders were purchased in
this country., This issue was re¬
Zaki
INDIANAPOLIS,
IND.—Brulin
air last
he
14 4-Mr.
Saad, executive di¬
rector of the World
CANADIAN
a
Fund, left by
week for Geneva, where
will remain
for some time as
observer
of' the' European
Government
Municipal
&
Provincial
Corporate
securities business from offices at
Economic Commission and the
2939
preparatory conference.
Company, Inc. is engaging in a
Columbia Avenue.
Fund
'
;
that1
rpmpmhpr
remember thai:
that
war
war,
a
a
Then'the day. comes wheil
demand for war goodsin.
an
•
the'
disappears
'instant •and7 demand
for
arises in the same
cedes a
instant.^ And there is even less
time for-adjustment, to the de¬
tably:; dislocates production but
furnishes the one set of circum¬ mand than there. was.:at the begin ^
stances1 in which: inflation can be ning of the: war, 4 It: takes the
made ip look respectable. And we enemy tifne to organize an attack
but consumers with dollars'; can
have had both irr large doses—dis¬
move
in
on
an
hour's notice.
location' and inflation.
(
>
;; The" first * trend
in American Therefore, we must not forget the
size of the war from which we
business that we should look for
have just emerged.
Three huge
is a price collapse just like we had
Knapp, partner in
Montgomery, Scott & Co., killed
Side
few
a
months, 12,000,000 men are wear¬
ing only khaki or black.
This
our
official estimate of the Nether¬
an
were
WHitehall 3-1874
within
and
colors
all
Do not be
headed by Kuhn, Loeb & Co., This
was
redeemed in 1929.
In; 1922,
lane were with Bonner & Gregory.
64 Wall
will pay anything for
One day men's ties are of
we
them.
,
amounted to $6,284,000,000 in
1938
occasioned
internal bonds.
Lee Rand & Go. to Be
formerly
&
have po
next
we
and the
v
Netherlands trade
unprecedented
an
with
NY-1-1045
day
day
torpedoes
of
expect? In
is a shift in
war
• i
in
productive capacity and we
twist our productive capacity all
registration statement pro¬
out of shape to meet the new de¬
vides an opportunity to obtain an
mand. This is costly in itself and
authoritative picture of the eco¬
the need for
not
realize
because
five
speed makes the
years have
nomic
progress
of a European
made
country following the effects of
you accustomed
to things process doubly costly. With the
five years of enemy occupation. that cannot endure. Never forget shift in productive capacity goes
the adjustments
Certain' statistics
for
the
war that
that- now the shift of man power. The popu¬
within
the
confront us are the product of lation *' movements
years are lacking, but those fur¬
United States during the war con-^
one of history's major upheavals.
nished for the period since liber¬
The
way
securities
RECTOR 2-7231
When I
ruptive war in history.
proximately $560,000,000.-
Formed in New York
N. Y.
that we have just
through a war—the most dis¬
been
The Netherlands floated a $40;-
NEW YORK 5,
ab¬
an
today
iness
1947 are estimated in
the registration statement at ap¬
port Canadian prominence in in¬
ternational Commerce should like¬
wise be welt maintained. In this
Canadian
TWO WALL STREET
should be,
Do not forget, in talking
surdity:
One
demand.
need
about the trend of American bus¬
figure.
with the Netherlands East Indies.
difficulties
and
tlfie
From the time of the separation
present lack of attraction of the
of the Netherlands from Belgium
European vacation centers should
divert a considerable number of more than 100 years ago, there
visitors this summer to Canada. has never been a default in in¬
The resultant effect on the Ca¬ terest, principal or sinking fund
nadian free dollar market should payments on any external or in¬
consequently provoke a larger ternal obligation of Holland, ex¬
volume of investment buying of cept for the temporary dislocation
INCORPORATED
statement that will
a
sound like, and
Transport
A. E. AMES & CO.
to make
me
of February
field of overseas
reach
CANADIAN STOCKS
<
.
are
good reasons why we do not get
a
simple repetition of the 192Q
During the 1930 decade, the coun¬
prices mostly unchanged, with the
try had a favorable balance of
exception of Albertas which were
payments totaling approximately
slightly weaker. Internal bonds on
417,000.00 guilders, primarily as a
the other hand were firmer with
result of income from investments
free funds steady in the neigh¬
abroad, from shipping and transit
borhood of 8% discount. As the
charges and miscellaneous sources.
tourist season is approached it is
During the .three-year period 1937
likely that the demand for free
1939, less than one-tenth of the
Canadian dollars this year will
CORPORATION
expected.
there
that
then
Granted
,
During the week the
MUNICIPAL
a
-
deceived into blaming stitute' a social earthquake if the
problems oh--the Jews, or the war had'had no other, effect. We
monopolies or some local circum- spend our resources to < meet the
tremendous stimulus will be given Netherlands economy.
i:
;
1 ■}>'■ stance when we have just moved war demand without ^regard for
out from under one of the blackest-1 present or future cost and finally
to
Canadian economic develop¬
Loss and damage to property of
clouds that ever settled on mari- get running a war economy- ^ £
ment.' As it is also probable that
the Netherlands as a result of the
externals was
PROVINCIAL
at
of adapting themselves than
killing each other off—and we
learn'to live in the same world
disaster.
GOVERNMENT
thus far
accumulated free sav¬
rate both faster and
spent their
way
Canada is likely to play a
losses, the general index of indus¬
In addition to Canada's geo¬ peace-time role as the economic trial production, exclusive: of coil-,
saviour of the British Common¬
struction and lumber industries,
graphic. advantage, - the Dominion
wealth just as during ' the r war
stood at 85 in December 1946, with
by virtue of its international rela¬
Canadian resources and the Brit¬
tions also benefits from the tech¬
1938 taken as 100.
ish Air Training" Scheme did so
nical experience of both Britain
At the outbreak of World War
much to stave off British military
and this country. As a result the
II and for more than ten years
CANADIAN BONDS
year's income.
steadier than was
expected that Can¬
ada's great wealth of air material
will make the Dominion the most
air-minded nation in the world.
With the establishment of domes¬ ation, compared with prewar sta¬
tic air-lines connecting the most tistics, indicate remarkable recov¬
remote
areas
to civilization,
a ery in some vital phases of the
more
adjust ourselves to the
fact
we
full good
a
have been saved
ings
and its economy
lands nationals in the
all,
to
involves. We
that nations have found no better
,
commercial jet
minding it American people came out of the
war with a-huge wad of dispos¬
you
ex¬
able savings, roughly equivalent
as
good thing, but
a
crude fact of war itself—the
prepayment of advances
under a line of
to, the
much
as
That's
tant things that war
be obtained from
will
bonds
lands
not
transfer it to the more impor¬
we
j
funds to
The
one-tenth
pected.
credit granted to the Netherlands
and Rolls-Royce are now
also established in Canada. It is by the Export-Import Bank for
such purposes.
consequently to be expected that
Readily marketable securities in
following the success achieved by
Rolls-Royce in the manufacture of the United States held by Nether¬
group
following
World War I, Canadian "bush;from this fortunate circumstance
of location.
In the first place at pilots" contributed so much to the
early exploitation of the Canada's
this crucial stage of air-line de¬
Northern Empire, it is now all the
is what
.
(Continued from page 5)
and
£hirt
green
We
from'a
collapse like
1920 by the fact
offering. The price to get just as accustomed to casualty
quoted prices had not risen as far
and other requisite in¬ lists, and war time morals as we
do to oleomargarine.
And worst as in the earlier period and people
will be furnished by
amendment.
which
evident
increasing importance of
since
the
write
ing in extent a 20 foot highway
of more than 2,500 miles.
!
It
statement
ternal sinking fund bonds.
war
men
Exchange
registration
vision of a pioneer
result of the
before the war as a
&
ities
McKAY
ITO
boom pre¬
bust... War not only inevi¬
is
war
a;
boom> and^ a
The
1920.
in
index
average
wholesale prices for 1920 was
for
1921,
'goods
peace
of
154,
accomplished be¬
tasks had to be
could handle the
of consumers: ,.(1) Demobili¬
industry
fore
97; hides, for example,
dropped from 267 in 1919 to 89 in
1921; Prices received by farmers
rush
and
military
zation,
industrial;
mechanical and
personal; (3) Elimination of conwent from 211 in 1920 to 125 in
1921 and the purchasing power of trols, priorities, rationing.
dollar
a
82
in
from 52 in 1920 to
All of the basic rea¬
rose
1921.
certainly
present' now in extreme degreb.
Yet economists did not expect it
sons
and
not?
for that collapse are
it
(2) Reconversion,
has
happened.
not
There seem to be two
Why
prin¬
in the last
war vyas brief and during it infla¬
tion was uncontrolled either at its
source
or
in its effects.
Inflatioriary pressure developed quickly
and strongly and showed itself in
the price level. What this would
have done in a long war is not
pleasant to think of. Our recent
war
was
long; inflation at the
source was even stronger, and less
cipal reasons;, Our part
II.
These
been
:
-
largely
conspicuous
things have now
done
with
one
of which you are all
What then are the factors
exception
aware.
which will govern
j
the future?
(a) La¬
management relations; (b)
They are basically two:
bor
-
Though
Inflation.
economic
in
•
expression" and effect both
are strongly conditioned by gov¬
ernment policy.
'
their
American pro¬
the marvel of the
America won two
wars
on two world fronts across
two oceans because her men were
constantly supplied with an end-»
courageously
and
intelligently
less
stream
of high grade ma¬
handled than in 1918.
But "nonterials^ The source of that ma¬
economic
means
were
used to
terial was not. merely our natural
During the war,
duction
world
was
and
the huge
inflationary resources; they are necessary a,nd
from finding its normal
important but passive. The source
expression in prices. Costs were
of
that power was
cooperation
permitted to rise," dollar incomes from the drawing board to deliv¬
were
inflated but the consumer
ery at the front. With a very few
paid in the form of quality last
very sordid exceptions, Americans
and in some curtailment of the
submerged their personal advan¬
range of choice. The result of this
tage for the sake of the eommon
is that unlike 1920 quoted prices
good. The result of that cooper-'
rose
less but the tensions within
ation was the greatest flood, of
the
price
structure - are much
output in economic history, even
greater than 1920.
By tensions though 12,000,000 of the most
within the price structure, I mean
capable
producers were
with¬
first, inconsistencies, i.e., one price
drawn from-production and were
prevent
pressure
while a related
down; and second,
from high
incomes causing the price struc¬
ture not to rise in quoted prices
but to bulge out sideways in boot¬
leg markets, or in hidden consid¬
erations
not shown
in dollars.
allowed
to
rise
price is held
inflationary
pressure
Furthermore,
pressure- was
the
so
in
direct military service.
.
ob¬
vious.
You
and
only when you get cooperation on
the job". This
department must
supply that department. From the
front office to the delivery plat¬
form there must be teamwork or
inflationary
there are no goods. And if any-
great that the
this is pretty
get goods when
The lesson of
^Volume 165
4594
THE COMMERCIAL & FINANCIAL CHRONICLE
body is dragging his feet, to just
lation
that extent you get less goods.
National
During the
\
„
Number
labor became
war,
accustomed to high money
wages.
Hourly
rates
but1 overtime
rose
■
rose even more.
,ln many
families,
usually at home went into
plants, and family income
persons
war
still
rose
The money wages
more.
however
ployee
The
determined
war
that level ;of income and
had -two
to
hold
we
have
of serious
waves
strikes
aimed at that goal. These strikes
have gravely Hampered
produc¬
tion and prevented the
production
for. which
the
consumer
was
clamoring and to that extent have
aided in keeping prices
up.
How
seriously . they have
hampered
production is hard to estimate sta¬
tistically but one does not need
to
be
statistician
a
to
basic industries and
know
that
services like
coal, steel, motors, railroads and
telephones cannot be interrupted
one after the other and
production
still be maintained.
change
western
jobs,
not
goods.
A
and the multiplication
that don't result in the
worn,
of
jobs
output of goods is not going to
give a pay-check that will buy
very much
matter how
no
figure written
big the
the check.
on
This is clearly a foolish
policy.
Why then is it followed?
It is
followed because American
labor,
whether
or
not Socialist
Com¬
or
munist, operates on Karl Marx's
theory of class conflict. Because
they accept this theory, they act
as though there were a
well de¬
fined capitalist class from
-is
possible
to
wring
whom
definite
permanent gains. This operates on
the theory, the more there is for
rne the less there is
for you; as
though the economic pie was of
definite and fixed size. Actually
the size of that pie varies enor¬
a
mously and usually the share of
labor and the other shares
go up
down
together.
But
labor
and
operates on the basis of being
able to get something from capi¬
tal regardless of what labor
pro¬
duces, and Karl Marx leads them
in-quest of money and jobs at
capital's
expense
and
deprives
them
of
goods
at
their
own
ex¬
And the result is les3 goods
coming off the end of the assem¬
bly line for labor to buy.
pense.
If this
error
obvious and
of Karl Marx is
so
how does
labor fall into it? They have had
plenty of bad example in high
places. That idea was not original
with Karl Marx; he got it admit¬
so
wrong,
tedly and explicitly from the early
Victorian economists of England
—Ricardo, Malthus, Mill. These
men
accepted the idea of class and
class conflict and made it
part of
their
system
from
them
and
and
Marx
used
it
took
to
it
the
practice was the same.
Labor and capital have been edu¬
cated to a fictitious opposition of
interest
and
that may
ours,
"Capital," whatever
mean
believed
in
a
that
society like
labor
had
to
foe kept in its place and that .the
more there was for labor the less
there
was
for
capital.-. Let it ;,be
said to the credit of the late
Henry
Ford that he was one of the first
Influential Americans to realize
the falsity of this division. These
ideas of Ricardo, Malthus and Mill
exactly what : many people
regard.as the "old fundamentals"
that we have to get back to. They
are just as false in their
respect¬
able classical form as they are in
their
aggressive Marxian form.
They are not fundamental to any¬
are
they
except
disorder
,
and
low
output.
wide
facts,
acceptance
built into
some
had
so.
sufficiently
that lit
of the labor
had
you
to
home-grown.
were
was
legis¬
extreme
and
loans
a
doctrines
described
are
ing Marx
render¬
as
He is not
unnecessary.
who thinks Americans have
man
ideas
good
traveled
that
or
long
a
have
we
on
the road
society
without
way
classless
a
liquidating the opposition.
These
things
the
but
that
the
expected in
of
is
imposition
be
not
may
you
trend
the
on
basic
on
business,
trend—the
American
our
of
sort
talk
a
American
econ¬
of a set of theories that are
false in themselves and peculiarly
omy
and
conspicuously false when
ap¬
plied to American conditions. Yet
these
theories
affect production,
and they are behind
the difficulties that confront Con¬
right
now,
gress
on
labor legislation
right
Congress is willing to pass
now.
fair and sensible labor bill if
labor will tell them how. If class-
a
conscious labor condemns any leg¬
islation whatever, labor will get
a
class-conscious, punitive law.
Now
this trend underlies much
American
business today.
Pro¬
restricted, not only by
monopolists but by unions. Union
policy is not concerned with pro¬
duction
ducing
raise
is
large volume of goods to
a
the
standard
of
living
but
they are concerned with Ihe mul¬
tiplication of jobs at high pay
regardless of output. That leads
to high hourly rates, low annual
incomes, high prices, poor buying
This is still the dominant trend.
The building trades
to have
seem
set their
in¬
no
dication that it will go lower.
know
you
mOney
Do
any. reason
is long and goods are
Money declines in value,
short?
wljiich is just
of'saying
a roundabout Way
that prices rise.
'
,
}f money makes prices rise, why
have not our prices risen further?
The rise has been substantial
indicate
quits
a
willingness
a
for
a
while.
while.
Owner
workers alike
to
But
call
only
it
for
managers and
still thinking in
-
are
terms of class conflict and squab¬
bling over the division of a dwin¬
dling product, when the most ele¬
mentary cooperation could give us
the greatest output ever known,
abudance for ourselves and plenty
for the victims of war abroad.
structure
but
The other big factor in present
trends
is
the
fact
of
inflation.
Th.s is not a possibility or a dan¬
ger; it is a
reality.
If there is
and
fotir
billion
dollars
of
legal
that
the
in
The price
given volume of
a
dollar
goes
hand.
When
business
dollar
moves
lar
normal
age
a
from
hand
is
to
brisk
a
rapidly. An aver¬
age velocity for an American dol¬
in
times
is
about
13.
That
is, on the average currency
changes hands in about 13 trans¬
actions
In
year.
a
that velocity has
low
9.
An
ther
increase
50%
a
were
from
Without
in
the
price
9
to
13
fur¬
any
volume
increase
offset by
not
years
of
could furnish the basis
money we
for
recent
been down be¬
increase
is almost 50%.
output of goods.
an
if
it
enormous
does
,
need
not
a
college
Germany's
d^y the
that
member
could
on
currency,
of
the
the
run
pay
family
fastest
met
wias
.waiting in order to spend the
money as quickly as possible be¬
fore
it declined further
in value.
It is Worth
noting that our in¬
problem is related to
flationary
•class
consciousness.
Lord
Keynes
ideas
1934
his ideas
may
a
ruled
1941.
to
mentioned
ago,
Washington
Keynes based
considerations which
on
have
I
moment
some
validity for Eng¬
land's peculiar and grave problems
but do not apply here. It is pe¬
culiar
that
Keynes' ideas were
adopted by self-styled liberals and
by labor unions when the crux of
the
system
was
to
lower
wages.
The first axiom of his system was
that when prices fall, the unions
will
not
accept
cuts in hourly
bring labor costs in
wage rates to
with
other
costs.
Since
you
can't cut wages directly, the only
way to reduce wages is by raising
prices and the
raise prices
way to
is by inflation.
The
since
the
twenties
to-require us
as 'miich
money as we used then.
What
has
happened to
,
money
•—The total
all
there
were
By
as
1933
for which Amer¬
write
it at
regarded
figure
sum
could
did
•
legal
has happened to deposits
checks
if
In
they
June 1929,
$55 billion in deposits,
a
dangerously high
once.
as
events
that
fell
showed
second
step in his system
the idea that invest¬
vyas based on
ment was slow
because
centration of wealth (in
gave
money
the
con¬
England)
big
investors
too
much
and enabled them perhaps
to
$43
plentiful that those who wished
wanted
plenty
and
to
there would still. be
circulate.
This
meant
that government had to take
the'function
they
of
maintaining
over
in¬
vestment. This meant government
spending, this meant government
borrowing, government borrow¬
ing as actually conducted meant
,
inflation.
This
when
combined
with the tax system was defended
improving the distribution • of
income.-And in the thirties, the
as
was? ideal of the system seemed,to be
billion. a better and better distribution of
it
ap¬
;
'
(3)
Special price situations.
(4)
Government policy
As
1
on
president.
Mr.
there is reason
that-the worst of the
adjustment is
p r e s
Automatic
over, that labor is
Products Cor¬
anxious to go back to Work. There
will
be
continued agitation
by.
Russian
controlled
-
unions,
unions with strong Russian
poration and
presently is a
or
director of
sym¬
American.
pathizers. Their policy will be to
damn all legislation concerning
anti-labor
as
much noise
as
and
Banker,
make
to
possible, cut pro¬
duction as much as possible and
maintain an atmosphere of uncer¬
tainty. Most American labor lead¬
ers realize that the public
sym¬
pathy labor enjoyed until recently
is largely exhausted and people
are beginning to get impatient for
that post-war
output that they
were led to expect.
As to the second factor, infla¬
tion, the volume of money is
there traveling at a low velocity.
The
inevitable
drop
associated
with war financing apparently has
taken place and ordinary
bank
lending to business has begun to
take up the slack. Therefore, there
is no monetary factor making for
an
abrupt price decline.
■
O t i o
formerly. waa
ident of
the first,
to
believe
labor
cement
b y Frederick
D. Gea rhart*
and 2.
to
York
City, accord¬
ing to an an¬
no u n
(2) Inflation.
,
Edward
V.
A
Otis
m
rican
e
Seal
as
The
Corporation,
-
Bond
Kap-
Buyer*
National Bank of Yar¬
an'd First
mouth of Yarmouth Port, Mass.
:
L 0. Garibaldi With
;
Interstate Securities
CHARLOTTE,
C.—Linn B.
Interstate
N.
Garibaldi has joined the
Securities
Corporation,
Commer¬
cial Bank Building, as Vice-Presi¬
dent and manager of stock trad¬
ing. Prior to forming this connec¬
tion,
Garibaldi
Mr.
Vice-
was
President of First Securities Cor¬
poration, and manager of their
Charlotte, N. C., office. He served
overseas
in World War II witfo
There are,
modities and
the
that
materials
uses
from
Orient
out
come
that
areas
long been shut off from
of
have
where
us
of
or
has
processing
Meeting of
Brooklyn Unit (NACA)
to Be Held on May 21
been
varnish
has
industry
W.
John
physically damaged, and the paint
and
and
group
been
selling at high prices an unsatis¬
factory
product
made
out
of
costly synthetics. As the natural
National
President of NACA to
of honor.
The
tity
meeting
indicated.
are
goods
Cotton
thing" which consumers
sought to buy with their war time
one
c6untantswill
1947
controls.
There
to
reason
the
after
release
of
be
no
to
seems
expect that these prices
be maintained at their present
levels. Building material has been
can
high
because
residential
thirties
of
and
there
distress market
tling
low
.
building
down
record
during
was
for
certain
persons
the
after
a
met, the
person
but has
has
now
the
who wants
some
decided
no
building
a
new
to
wait
can
it
out,
to suppose
be
main¬
hold
Hotel
annual
its
May
21*
Bossert
in.
Wednesday,
the
A dinner to be held at 6.30 p.m.,
the technical session
begin at 8.00 p. m.*
at which John W. Hooper, VicePresident in Charge of Finance of
the American Machine & Foundry
will precede
scheduled
to
and its affiliated com¬
will give a talk on the
subject of "The Responsibilities of
Leadership of the Executive Ac¬
Company
panies,
countant."
been
place to live
reason
costs
set¬
Once
war.
this imperative demand had
home
of
the
on
at
Cost Ac-
Brooklyn.
incomes with resulting high prices,
especially
Association of
the
of
Chapter
Brooklyn
National
were
Hooper will address
William J. Carter,
be guest
sources
of their supplies are re¬
habilitated, a substantial drop in
price as well as a rise in quan¬
and there is
so
to have about seven times
been
New
•
.
the actual physical source of sup¬
to hoard cash could hoard all
billion;
'
t
ply
figure
$7.5 billion; in 1944 it
billion.,, Today it is $28
Nothing. has happened
has
4
td the grocery store where mother
and tellers' windows. In 1933 that
was
these:
are
father at the factory gate and ran
This is the nickels, dimes, unconsciously to have too great an
quarters, the fives and, tens that effect on the economy. The rem¬
are cons .antly moving in and out
edy for: this Was to beat, down the
of pockets,
purses, cash ' registers rate' of interest by making money
$25
Otis
Annual
ot
money.>
was
V.
vice-president of Gearhart & Co., Inc., 45 Nassau Street,
in particular com¬ the rank of Lt. Colonel, Infantry*
industries, price sit¬ arid prior to the war was man¬
cdurse in economics to know that uations which are definitely outager of the Richmond, Virginia*
when prices are rising We try to of-line and subject to some ad¬ office of R. S. Dickson & Com¬
get rid of money. Goods are in¬ justment. Conspicuous .examples! of pany. Mr. Garibaldi is well known,
creasing in value and money is these are building materials, farm iri investment circles of the South
declining, so business men prefer and food produce, hides, leather Atlantic states.
goods to money. At such times and their products. Sojne of these
velocity increases. In extreme "in¬ are ? subject to special circumr
flation, this velocity becomes vis¬ stances growing out of the war.
ible. At the height of the collapse The paint industry, for example,
One
any
question of this in anyone's mind,
let us look at the figures. Back
in the '20s, the American
people
did business with between three
lies
answer
money
can
support depends on
the way the money is used, chiefly
the speed at which on the aver¬
line
III.
The
the money is used.
way
from
settlements
'Edward
pointed
(1) The policy of unions and
corporations.
why the
American people need three times
as: much money
to do business
with as they needed in 1929? Do
you
know what happens when
whose
recent
.
Of Gearhart & Go.
business then
face of terrific demand. There
signs that the
Otis Made Vice-Pres.
'
iv.
At the moment the figure stands
prices so high that build¬
ing is falling off sharply' in the
are
'
The elements that make up the
present basic trend of American
and unemployment.
power,
\
instead
of
government
have not taken up all of the slack.
money.
he is
abso¬
an
lutely nothing. '
by banks to in¬
country in the world;
or
product, till
reached the ideal of
lutely equal distribution of abso¬
move¬
it has -not been* nearly as great as
the increase in the volume
of
follower of the late Lord Keynes,
a
recent British economist whose
smaller and smaller
'
inflationary,
Russia is not the most democratic
icans
Nineteenth century British eco¬
nomics, wholly out of tune ,;with
American
you
so-called. Liberal
t
thing
not
or
LaFoJlette,
a
Whether
.
very
different purposes in his system.
The applications were different
but
a
today is a
follower of Marx, or a least a man
who is scared, to death to hint that
thousand dollar bill can't be eaten
or
them
admit
The
Norris.
or
liked
Because
and
commoner,
Borah,
any
dollars
had
.
to
in
have
we
the
type of sorcalled
leadeship. The old style
American
Liberal
was
a
midr
Why does labor adopt such a
policy of cutting its own throat?
interested
in
ten
liberal
a
is
because
years
become
the \ last
in
the
ment
at,about $167 billion with
*
has
error
important
a
we
was up to
57, in '39 to
in 41 to 78; in '42 to 110; in
'44 to 150; and in '45 to 175. The
end'of the war brought an end to
23
■
for. maintain¬
reason
radical
more
{
labor
no
In '37 it
M;
dustry-
plenty of very
respectable precedent for its error
ing it.
the
em¬
opposed.
were
income
of
and
employer
So labor has nad
for
\
of
interests
many people greatly increased
during the war. .Labor came out
real
their
of
some
provisions, were sources of trou¬
ble because they assumed that the
before
but
in
useful
but that is
war
Acc,
Labor/ Relations
bought less than they would have
the
'30s.. NRA and the
the
of
(2619)
Mr. Hooper is a
American
a
Controllers
the
certified publics
member of the
Institute of Accountants*
accountant,
Chair¬
Institute,
of the Committee on
man
Federal
tained at their present high levels.
At the beginning of this year,
Taxation and a Vice-President
there
the
'
was
general
agreement
economists that the peak
among
of the post war rise should occur
in the second quarter of 1947. But
the
general
movement
having
passed
would
be
peak, • there
downward
general break in
spec¬
tacular. exceptions.
are
second
a
Even though
reaching the end • of' the
quarter that still looks like
good.prediction but,I must re¬
no discussion
ignore output and no
predict prices or
peat that obviously
of
prices
can
economist
can
output as long as owners, workers,
and government proceed on a fal¬
lacious
class
conflict basis that
prevents people from getting to¬
gether and promoting the common
good by the production of goods
ntViinVi
civic
nocric
Mr. Hooper
is also active
industrial
and
organization work.
'
The guest
ner
of
Chamber of Com¬
philanthropic,
in
their
drop with no
prices but with erratic and
we
merce.
of- prices
general
a
Brooklyn
of honor at the din¬
meeting will be William
and
JV Carter, the National President
of
Association
National
the
Cost Accountants. Mr.
Past President of Atlanta
a
of
Carter is a
Chapter*
Certified Public Accountant, a
Past President of the Georgia So¬
ciety of Certified Public Account¬
ants and
a
partner in the firm of
Mount and Carter.
Many national officers arid di¬
rectors
as
well
as
civic dignitariea
will be included among the
n-P
VlAVkAl*
guesta
(1) The outstanding legal pro¬
of the States have
vision pertaining to the manner of
regulations intended to
authorizing a strike is a require¬
assure
honesty and fairness in
ment that a strike be authorized
union elections,
or to assure
a
membership) in a labor organiza¬
preponderance
of
sentiment by a majority of the workers to
tion.
be
affected by the strike-calf.
among the membership as a pre¬
Accountability of Unions for Acts requisite to certain types of union Alabama, Colorado, Florida, Kan¬
sas, and Wisconsin adopted such
Several
of
the
States
have action. Among the more common
legislation in
1943.6
Some of
adopted legal measures during the safeguards to assure integrity of
these statutory provisions declare
past few years which are intended elections are provisions to require
it to be an unfair labor practice
proper notice to members of an
to make labor organizations ac¬
for an employee or a group of em¬
countable for acts of their mem¬
approaching election, to assure a
ployees to cooperate in any overt
bers, officers, and agents.
Stat¬ vote to all members in good
concomitant of a strike unless the
utes bearing upon this aspect of standing, and to assure free ex¬
strike has been authorized by ma¬
union affairs were approved in pression of membership . opinion
Colo¬ jority vote under secret ballot.
Arkansas
in
1941, in Colorado, by requiring secret ballot.
Other statutes make it an unlaw¬
Florida, Kansas, and Minnesota in rado, for example, requires one
vote
for
all members in
good ful act for any person to partici¬
1943, and in Louisiana during
standing; requires specification in, pate in a strike unless authorized
1946.
by a majority vote of the workers.
The pertinent provisions of the the union charter^ of the date of
number
A
Regulation of Labor Organizations by the States
Several
States
have
enacted
(Continued from first page)
laws during the past two years to
public utilities; and Delaware has
adopted a general regulatory stat¬ prevent unions from discriminat¬
ing against workers on the basis of
ute applying to unions.
Laws of the States deal with race, creed, color, or some other
arbitrary consideration.
New
numerous aspects of the organiza¬
tion,
membership, management, York, New Jersey, and Massachu¬
and practices of unions.
Topics setts have led the way in enact¬
in
covered
ing laws which make it
include,
laws
these
a
others, membership dis¬
criminations, the closed shop, ini¬
tiation fees, work permits union
elections, union officers and busi¬
ness ♦ agents,
union liability for
damages,
political contributions
among
by
-
right
the
unions,
labor organization
bers
coercion,
Membership
which
threats
workers to organ¬
bargain collectively has
and
become
compulsory
union
membership by means of all-union
(closed shop) agreements.
Colorado, for example, declares
it to be an unfair labor practice
right.
When formally stated in
State laws, this right is expressed
to that of the
in language similar
for
Wagner Act.
on
induce
or
a
an
with
fere
operate only in the case of public
employees.
The
Legislature
of
Virginia, during 1946, adopted a
resolution, for instance, which de¬
clared
that
recognition of any
l»bor
union
as
a
bargaining
joining
requires all unions to incorporate
under terms of the general corpo¬
ration statutes of the State.
As
from
frain
for State employees was
to public policy; pro¬
hibited affiliation with such
unions by State employees; and
a&ency
under
Labor
authority
employing
the
with
re¬
(and only in case of disavowal
of
Kentucky
,ajny right to strike).
1&W forbids the conclusion of any
Collective agreement between the
sub¬
State or any of its political
public
and
divisions
employees.
Hie Legislature of New York, in
the session just closed, refused to
proposed - legislation pro¬
viding public employees with col¬
lective bargaining machinery.
adopt
This
policy of restricting col¬
lective bargaining rights of public
employees runs parallel to pro¬
hibition of the right to strike in
public employment.
*
'
i
"
Restraints
Unreasonable
on
unions
become
have
more
and
powerful, the re¬
membership
practices
numerous
strictive
employed by some have become a
hazard — especially
coupled with the closed-
Significant
When
shop principle—to the welfare of
certain classes of workers.
High
and discrimination
initiation fees
against workers
the
have
creed
or
race
on
the
basis of
been
among
important of the restric¬
more
practices of
tive membership
Unions.
Several
1943 to prevent the
charging of excessive, unauthor¬
ized, or discriminatory fees and
Colorado, for example, re-
dues.
Quires that all union fees and dues
be fixed in a union's by¬
must
laws, be reasonable and non-dis¬
criminatory;
subject
be
and
to
approval by the State Industrial
Commission.
Texas adopted reg¬
ulations in the
same
Kansas
dues.
to pre¬
year
adopted
and
fees
union
excessive
vent
labor
also
—
in
em¬
monopoly; precludes em¬
ship; and increases the danger to
employers and the general public
from
work stoppages and
boy¬
of
Policies
closed-shop
the
States
problem
on
In many States there are
on
the subject.
In a
number of States—including New
laws
York, California, Utah, Pennsyl¬
vania, Rhole Island, Michigan, and
Minnesota
the principle of the
Massachusetts,
for instance,
pro¬
the employment of strikes
picketing as means of forcing
an employer to agree to a closed
shop.
New Jersey allows closedshop
agreements
except
when
they operate in restraint of trade
or
tend to create a monopoly.3
and
states—including,
Other
for
ex¬
In
the
(1943), Ala¬
prohibited any
labor organization to collect any
bama
same
and
work permit,
condition for the privilege
fee or money
or as a
year
Texas
as
a
of work.2
2 This
collection
.
regulation
of
was
initiation
not
fees
to
for
membership.
.
prevent
union
kind
one
in¬
Regulations Affecting
Union Responsibility
number of the
adopting union regula¬
are intended to pro¬
increasing
which
tions
require the filing
Massachusetts,
Dakota,
and
require annual reports, ,of
Texas
Other
An
now
Idaho, Kansas,
Minnesota,
South
dividual members.
States are
of the
of
annual reports by labor organiza¬
tions. Alabama, Colorado, Florida,
against unions by
properties owned severally by
number
considerable
A
properties held by the
as
an
entity — excluding
union
State
hearing of the case by the
Industrial Commission.
another, to
or
fiied
be
such
organizations.
Some
require only financial re¬
States
others require more com¬
prehensive statements on union
affairs.
Some States only require
ports;
filing of reports with union mem¬
bers; others require filing with a
State official as well as with mem¬
Some
bers.
reports
on
State.
the
be
tals, public utilities, and other in¬
dustries affected with a public in¬
terest.
A notice of five days is
required in other types of em¬
ployment.
Georgia makes it un¬
lawful for any labor organization,
local, to participate in a
or
strike,
slow-down, or work stoppage un¬
notice—stating
action—
is given to the employer.
Such,
notice, however, is not required
til
after
in
a
30-day
for the intended
reasons
industries or in em¬
seasonal
ployment subject to Federal rail¬
way labor law.
Virginia in a stat¬
ute approved during January of
this
requires
year,
in
notice
of
case
five-week:
a
intended
an
designated
public utility industries, and re¬
of the States require
quires that the day and time of
forms • prescribed by the
beginning of the work stop¬
(or lockout) in
strike
page
standards of respon¬
sibility
in the management of
union affairs.
States are specify¬
mote higher
person
who
has not been a citizen and a
resi¬
of
to
license
a
dent of
least
10
the
any.
United
States for at
preceding the ap¬
years
plication for license, who has been
convicted
not
a
of
a
felony,
or
who is
of good moral char¬
Texas prohibits an alien,
person
acter.
convicted of a felony
ample, Wisconsin and Kahsas—
whose rights of citizenship have
permit
closed-shop
agreements not been
restored, from serving as
only when approved by a major¬ an
organizer or officer of a union.
ity or more of the workers to be
A number of the States have
affected thereby in a special ref¬
adopted regulations pertaining to
erendum taken by secret ballot.
the
selection
of union officers.
Numerous States have
the
closed
contract.
prohibit¬
shop and its
com¬
the yellow-dog
Prohibition
is
either
by statute or constitutional pro¬
vision.
Among the States which
prohibited
the
closed-shop
by statute are Alabama, Idaho,
Louisiana, Maryland, Nevada,
Tennessee, Indiana, and Virginia.
Arkansas, Florida, Nebraska, Ari¬
effect at the be¬
damage claims or judgments
brought against it.
Kansas and
Louisiana,
for
example,
limit
any
punishment for
period pending a
strike notice
30-day
a
given in cases of strikes
involving employment in hospi¬
must
shall be stated in the
notice.
(3) A survey of State laws per¬
taining to strikes indicates that
several of the States are begin¬
objectives for
employed.
Louisiana, for example, adopted a
statute in 1946 which declares it
to be
against the public policy
of the State for a strike to be
called in violation of the terms of
a collective bargaining agreement
ning
to
which
a
limit
the
strike may be
.
have
of fees in
placed
instance,
stay
additional
an
arbitration
of the States have
Filing
The
requirements of Kansas
concerning
union . reports will
illustrate
requirements
of
the
Wagner Act. is followed.
Under
ing, for example, legal require¬
more comprehensive type. Annual
this principle, any union which
ments for the qualifications and
qualifies as a collective bargaining selection of union officers and reports are to be filed with the
Secretary of State.
In these re¬
unit under labor relations statutes
agents, for the holding of union
ports the unions are required to
is permitted by law to enter into
elections, for the recording and
provide data concerning (1) the
a
closed-shop agreement with an
reporting
of
union
operations name of the union, (2) the loca¬
employer as a feature of a collec¬
(especially financial operations), tion of its principal office, (3)
tive agreement.
and for the disciplining of mem¬
the
names, addresses, and com¬
There is a strong trend among
bers.
pensations during the past year
t^.e States, however, to place defi¬
Florida and Kansas require that
of the president, secretary, treas¬
nite restrictions on the employ¬
business agents of labor organ¬
urer, and business agent of
the
ment of closed-shop agreements
izations receive licenses from the
union, (4) the date of the regular
or
to
prohibit them altogether.
State.
Florida prohibits the grant
union
cases
an
to
acts
riod
(2) Several of the States require
notice to be given for a
strike
specified period in advance of the
strike.
Under Michigan law, for
concerned
States
Some
show much
placed
ginning of 1940.
by
legal limits on the extent of the
financial liability of a union for
the
variety.
no
panion principle,
by-laws. In the same year, Florida
a legal maximum of $15 on
initiation fees,
except in
abide
to
award.
a
complaint by the member
during the 10-day pe¬
a
unless
work7
days
of
cotts.
of any union
dues or fees except those author¬
ized in a union's constitution or
charging
col¬
agreement—
ployment for all save those in the
union;
enhances greatly
the
judgment in suits
union's power over its member-^
to
the
ed
the
the incor¬
to participate in any
walkout, or cessation of
the same has been
authorized by a majority of the
employees to be governed thereby
in a vote by secret ballot.
strike,
any
10
of
of the
person
any
member of a union until
after written notice of
such punishment has been given
to the member and filed with a
of
other overt concomitant
any
employees affected thereby have
approved
the
strike by secret
ballot.
The Kansas law prohibits
the few
restrictions
of
unions with respect to their
punshment of members.
As just
noted, a vote of the membership
on
such punishment must be by
secret ballot. Also, the State stays
the effective date of punishment
violating the terms of a
ment
pulsory union membership creates
a
one
place
which
upon
bargaining
including, if present, any agree¬
ployer (or employers). Such com¬
1943—a provision of law prohibit¬
ing
the
violates
lective
hibits
adopted regula¬
States
tions during
and
is
Colorado
instance,
unfair labor
for
an
strike unless a majority
a
States
poration requirement. In addition,
a
union
is specially
prohibited
—
Union Membership
As
be
union
for
which
union
closed shop contract
the
between
on
or
policy.
mis¬
demeanor, with substantial fines
provided for the members of any designated State official.
field of work is covered by an
or
the calling of a strike,
punishment of members, and
decisions on questions of union
the
incorporate, also, is made a
compelled to
join a union as a prerequisite to
obtaining employment whenever
a
and be
disqualifies
it
from
any of the activities
such organizations
the
terms
of
the State
Relations Act.
Failure to
carrying
specified
from
all-union,
sue
union to in¬
a
corporate
izations.
permitted public
employees to
organize only for the purpose of
discussing employment conditions
of
Failure
sued.
contrary
may
a
cluding. the right to
joining, labor organ¬
Workers
of
attributes
customary
be
to
practice for an employee or a
group of employees acting in con¬
cert to cooperate in (or in the in¬
ducement of) picketing, a boycott,
salaries,
en¬
legal
corporation, in¬
the
with
dowed
join or refuse to join a union.
Michigan and Oregon have similar
bans against the use of coercion
and intimidation as a means of
or
the unions are
corporations,
it
declare
officers; and specifies that voting
shall be by secret ballot for elec¬
tion of officers, determination of
law,
Colorado
The
for election of
the annual meeting
attempts to establish a satisfactory
accountability on the part
of unions for their acts.
Colorado
union, or to coerce
employer to inter¬
Inducing workers to join,
represent
comprehensive
more
basis of
employee's right to
an
adopted
1943
of
law
the
of
one
employee or a group act¬
an
from
organize and bargain col¬
lectively, and
these limitations
to
ers
Colorado
ing in concert to coerce an em¬
ployee into joining or refraining
places only a few
the right of work¬
law
State
limitations
joining by means of
violence, and to restrict
or
prohibit
or
organized
generally
a
unwilling
workers into
The right of
ize
coercing
from
anions
Collectively
Bargain
adopted
legal
provisions
are
intended to restrain
have
Right to Organize and
The
substantial number of States
A
unions.
trade by
creed,
Coercive or Compulsory
the boycott,
and restraint of
methods of picketing,
union
the basis of race,
on
color, national origin, or ancestry.
strike,
to
illegal for
to deny mem¬
bership, expel from membership,
or
discriminate among its mem¬
Thursday, May 15, 1947
FINANCIAL1 CHRONICLE
iTHE COMMERCIAL &
(2620)
24
and
South Dakota have
adopted constitutional amend¬
prohibit agreements
zona,
ments which
requiring,
ployment,
a condition of em¬
membership (or non-
as
the courts have ruled that a
closed-shop agreement on an industry¬
wide basis does create a monopoly.
3 And
or
a
person
election of officers,
initiation
of
fees,
(5) the rates
dues, assess¬
other charges levied
against members, (6) a verified
ments,
or
of the union's income
expenditures for the past
statement
and
and (7) a statement
organization's assets and
year,
of the
liabili¬
ties.
Colorado—in
quiring annual
addition
to
re¬
reports—provides
unless such a strike has
been ap¬
proved in advance. Under the law
of Massachusetts the closed shop
prohibited, but a strike em¬
for the purpose of com¬
pelling or inducing an employer
to agree to a closed shop is illegal.
Florida
law
typifies
the pro¬
visions of several States barring
is not
ployed
the
use
of
a
strike
implementing
controversy.
A
a
as
a
means
of
jurisdictional
statute
of
1943
provides that it shall be unlawful
for any person to interfere with
work by reason of any jurisdic¬
tional dispute between labor or¬
examination, at least
the books and ganizations or within a given or¬
Kansas has a similar
financial records of labor organ¬ ganization.
Maine places a ban; on
izations subject to its jurisdiction, provision.
sympathetic strikes involving
Colorado requires that union offi¬
Limitations on the Right to Strike railroad transportation.
cers shall be chosen annually, by
(4) Some restrictions are found
Several types of limitations on
secret ballot, at a regular union
in
State law with reference to
meeting for which a 30-day notice the right to strike have been in¬
the type of strike which may bo
has been given to the member¬ corporated
in State labor laws
employed by unions. This restric¬
ship.
Minnesota requires elec¬ since the middle 1930's, and espe¬
tion is commonly limited, when
tion of officers, by secret ballot, cially
during, and since, 1943.
found at all, to a ban on the sitat least every four years.
Texas These laws touch upon the right
down strike. Colorado, for example,
requires annual election of union to strike in several ways—par¬
includes
the
sit-down strike
officers, organizers, and represen¬ ticularly as to (1) the manner of
among
a
comprehensive list of
tatives—except in the case of authorizing a strike, (2) the tim¬
specified unfair labor practices:
unions which, for four years or ing of a strike, (3) the purpose for
for
once
State
each year, of
which a strike may be employed,
more preceding enactment of the
regulation in 1943, had held elec¬ (4) the type of strike, and (5) the
tions less frequently than once a type of employment affected by a
year4 and had not charged more
than a $10 initiation fee.
4 But at
least
every
four years.
strike.
5 The
6 The
Alabama statute was declared
unconstitutional
the following year in
Alabama State Federation of Labor V.
McAdory, 8
7 The
State
corporate.
requires
unions
to
in¬
law
Labor Cases, 62, 191.
is not to be interpreted as
denying to an
to quit work.
incjivid^til
a
personal right
THE COMMERCIAL & FINANCIAL CHRONICLE
Number 4594
(Volume 165
policy is implemented
by a provision of a
1943 statute which declares it to
The
same
Florida
Jin
unlawful
foe
for
to
person
any
appoint
the Governor may
ciliator
in
either
to
the
dispute
his
on
or
initia¬
own
(if he finds that interruption
seize property unlawfully during
a labor dispute.
Bans on the sit-
of the service would inflict severe
down strike are found in the laws
hardship
of
substantial number of other
a
States, including Kansas,
Louisi¬
Michigan, Wisconsin, Penn¬
sylvania, and Washington.
(5) One of the most important
ana,
restrictions
strikes
on
found
in
State law is the placing of special
restrictions or outright prohibi¬
tion on the use of the strike in
certain
fields
of
employment.
employment in which
.strikes are placed under special
restrictions
or
prohibited
alto¬
gether are (a) public employment
and (b) employment in industries
Fields
of
instiutions
or
"affected
with
a
public interest."
(a)
Although
no
recognized
right to strike against govern¬
ment
exists,
some
States
are
adopting specific statutory bans
such strikes and incorporating
on
in these laws substantial
penalties
in cases of violations.
Virginia
adopted legal provisions during
1946 declaring it to be contrary to
public policy for there to be rec¬
ognition of any labor union as a
bargaining agency for State em¬
ployees and prohibiting strikes
among such
ginia
employees.8 The Vir¬
penalizes any public
law
workers
who
ber of
substantial
upon a
num¬
in the community
persons
affected). If the conciliator is un¬
a settlement within
able to effect
30
days, he reports the fact to the
Governor.
is
inter¬
will,
or
likely to, lead to such an
ruption of service as to cause
severe
hardship to a substantial
number of persons he is directed
to appoint a board of arbitration
of three persons from a panel of
30 arbitrators, who will hear and
decide the controversy.
The arbi¬
tration
board
is to
present its
findings and issue an award and
appropriate orders within 60 days,
unless its time is extended for an
additional 60 days.
order of
board of arbitration is
a
effective
A settlement
for
one
unless
year,
changed by mutual agreement be¬
tween the disputants.
Concerted
action
of
effect
to
workers
of others to partici¬
pate in such disruptions of opera¬
any
persons,
Penalties for violations
tions.
the
law
$2,500
fines
include
of
imprisonment
or
of
$500 to
to six
up
months.
participate
in
a
by terminating their em¬
ployment and placing them on a
status of ineligibility for re-em¬
ployment by the State or any of
Virginia, approved
Jan. $29, 1947, may be taken as an
example
of
a
law
authorizing
its subdivisions
sory
strike
agencies for
period of 12 months.
New York
or
State enacted
a
a
law,
also, during the recent legislative
session,9 which outlaws
strikes
among public employees and im¬
substantial
poses
penalties
upon
those workers who violate provi¬
sions of the statute.
.
The
State
law
of
seizure
of
instead
compul¬
terminal
step in the specified procedure. A
procedure
for
conferences
be¬
tween an employer and his em¬
ployees to settle any controversy
arbitration
between
first
is
them
the
as
outlined.
conference
fails,
If
another
shall be held within 10 days.
Governor of
the
is
State
a
The
(b) Several of the States have ized to attend, if he chooses, this
measures
which either second conference and to exert
restrict
prohibit
or
strikes
in
efforts
to
mediate
the
dispute.
affected
Kansas,
Upon adjournment of this second
conference, if either party to the
Dakota, New Jersey, Vir¬
ginia, and Indiana have adopted
during the period from 1935 to
1947—a series of quite compre¬
hensive
statutes
dealing
with
dispute feels that further negotia¬
iields
with
of
employment
public interest.
a
JNorth
lockouts,
strikes,
pages
or
in such fields
work stop¬
of employ¬
ment.
Fields of employment common¬
ly covered by these special regu¬
lations of work stoppages include
water
supply,
electric power,
light, heat,
gas,
transportation and
tion would be fruitless and is
un¬
willing to negotiate further, that
party shall so notify the other
party and the Governor.
There¬
upon, the Governor is directed to
request both parties to submit the
dispute to arbitration.
If either
and
arbitration
decides against
party
determines
lockout, as the
party shall fix
for such strike
upon
case
or
a
a
strike or
be, that
and time
may
day
lockout (not less
communication. Kansas, however,
than five weeks after notice of it
applies special regulations to work
is filed)
stoppages in
and the other
enterprises engaged
an
the manufacture of clothing;
the manufacture or preparation of
and notify the Governor
party to the dispute.
Upon receipt of a strike or lockout
notice, the Governor is directed to
production of investigate and determine whether
the contemplated action would re¬
fuel; the transportation of cloth¬
sult in such interruption of es¬
ing, food, or fuel; common car¬ sential
services as to constitute a
rier service; and the operation of
serious menace to public health,
public utilities.
safety, or welfare.
If he decides
The
laws
differ somewhat in
that such would be the case, he is
their approaches to the avoidance
directed to
proclaim that State
of work stoppages in the specified
seizure and operation will be un¬
fields of employment. Under some
dertaken at the time of such strike
statutes, a step-by-step procedure
or lockout.
State operation is to
for negotiation, conciliation, and
be continued, in such an instance,
arbitration is outlined—-with arbi¬
food; the mining
tration
as
the
or
ultimate
stage
in
the process.
According to other
statutes/a step-by-step procedure
for. negotiation and conciliation is
outlined—but
authorized
as
with
the
State
seizure
ultimate
pro¬
cedure for
avoiding a breakdown
of an industry's operations.
The law of Indiana, approved
JVIarch: 14, 1947, typifies the first
approach. Under terms of the
statute, panels of conciliators and
^arbitrators
to be appointed by
the Governor, from which panels
may
be1 drawn conciliators
or
arbitrators
are
to
controversy.
deal
In
with
a
given
dispute
impasse after attempts
of the employer and employees to
settle it by collective
bargaining,
reaches
case
a
an
8 Under
to
for
strike.
9 The
New
operations
be
can
Condon-Wadlin bill.
Times, March 19,
York
See
1947.
The
re¬
sumed.
quite
of
subject leads
sion
that
sult not
law
laws
to the
one
abuses
of
In
fact,
on
this
conclu¬
picketing re¬
inadequate
much from
so
from
as
under
common
State
failure
of
law-en¬
forcement officials to enforce the
regulations which exist.
The
provision of Wisconsin law
be taken as an example of
may
of
one
the
comprehensive
regulations of picketing. The Em¬
ployment Peace Act of 1939 de¬
clares
it
more
to
be
unfair
an
labor
practice for employees to hinder,
or
prevent, by mass picketing,
threats,
intimidation,
force,
or
coercion of any kind, the pursuit
of any lawful employment; to ob¬
struct
to
interfere with
or
entrance
agress from any
or
ployment;
or
with
fere
rupted
place of em¬
to obstruct or inter¬
the
free
of
uninter¬
and
public
highways
streets, railways, airports, or
other ways of travel and convey¬
use
and
utes
bearing upon this aspect of
regulation.
The Ohio law prohibits com¬
union
binations of capital or
acts of two
ciations,
or more
to
of
or
(1)
used
persons
trade
restrictions in
create
the
or
corporations,
firms,
associations
skill
persons, asso¬
or
have
in
laws—taken
in
interpreting the Wiscon¬
(1) mass picket¬
cases
sin
include
law
(2) unlawful conduct toward
a picketed employer,
ing,
customers of
(3) obstruction of highways, and
(4) threats of physical harm to
employees and members of their
families.
Regulations Pertaining to Boycotts
A number of States have
statutory
bans
certain
on
placed
boy¬
cotting activities of labor organ¬
izations.
California,- South Da¬
kota,
Oregon,
Idaho,
Colorado,
Kansas, Wisconsin, and Alabama
have
statutes
boycotts.
on
statutes—those
of
Idaho—have been
Two
and
approved since
Oregon
the middle of March of this year.
Some
to
of
these
of
boycotts
laws apply
the
only
to
movement
make
any contract, or to engage
in any combination or conspiracy,
nor
in restraint of
to be
trade,
or
(2) to join
combine with any employer or
or
non-labor group to
(a) fix prices,
(b) allocate customers, (c) restrict
production, (d) eliminate compe¬
tition, or (e) impose restrictions
or conditions upon the
purchase,
sale, or use of any materials, ma¬
chines, or equipment.
or sale
of farm products.
example,^ the South Dakota
law, enacted? in 1943, prohibited
boycotting
of
market
the
or
the
movement
sale
of
any
to
farm
product because such product may
have been produced by non-union
labor or in violation of the rules
orders
or
of
labor organiza¬
any
tion.18
more
statute
sas
prohibits
a
number of States
comprehensive.
of
any
A Kan¬
1943, for example,
to refuse to
person
handle, install, use,
particular materials,
work on
equipment,
or supplies because not
produced,
processed, or delivered by mem¬
bers of
labor organization. Wis¬
consin's labor relations law desig¬
nates
as
an
unfair
labor
practice
the participation, by employees, in
a secondary
boycott; also, the pre¬
vention
hindrance—by threats,
intimidation, force, coercion, or
sabotage — of the obtaining, use,
or
disposition of materials, equip¬
ment, or services; and the com¬
bining or conspiring of employees
or
to
hinder
or
prevent
whatever
means
the
by any
obtaining,
use,
or
disposition of materials,
equipment, or services.
Bans
on
Union Restraints of Trade
Several of the States have
rec¬
ognized in their laws the fact that
Labor
unneeded
A
labor,
declares
statute
ol
allowed to
quit their jobs for the time being,
and any attempted compromise of
the
dispute
must
proceed
by
of collective
bargaining be¬
disputants.
Any lock¬
out, strike or work stoppage re¬
sulting in an interruption to the
operation of a utility in violation
means
tween the
of the law
subjects the utility (in
lockout) or the labor or¬
ganization to a penalty not to ex¬
ceed $10,000 for each day of such
case
of
ice.
Also, fines
of
from
$1,000 and imprisonment
serv¬
$10
up
to
to 12
months may be imposed for viola¬
tions, by individuals, of the terms
of the law.
conditions.
Jersey, and New Mexico have
rec¬
ognized this effect of unionism by
placing
certain
restrictions
on
union
activities
strain
trade
which
lead
or
to
may
re¬
monopo¬
listic conditions.
New
allows
Jersey
the
law,
for instance,
shop
except
closed
when it has the effect of restrain¬
ing trade
monopoly.
tends
or
to
State court
create
a
decisions
have held that
a closed-shop con¬
covering all the firms of an
industry creates a monopoly and
is, therefore, invalid under the
tract
law.
Ohio
The
10 This
tional in
States,
and
statute
1944.
Louisiana
was
held
laws
unconstitu¬
Similar statutes
of
be
to
it
an
un¬
State
regulation.
12 She retained
union
such
in
tj*»
heavy penalties for
case.
a
No Loss to
Depositors
Chairman of Federal
M. T. Harl,
Corporation,
Insurance
marks the
announced that May 12
unfair
employer
necessary
or
work of the
the
for
employer."
"In
Conclusions
State regulations
of
labor
organizations indicates
that an important role in the de¬
velopment of legal standards for
more
responsible collective bar¬
gaining is being assumed by a
State^.
f
o| State action
The importance
companion
on
a
world emerging from
the-
economic strains occa¬
inevitable
This survey of
number of the
failed
of staggering pro¬
world
faced
with
urgent problems of economic re¬
sioned by a war
portions—a
construction and rehabilitation us
opportunities
development," said
Mr. Harl, "an indisputably sound
financial system in these United'
well
unlimited
as
economic
for
development ( to
States
is
was indicated
recently in Congress when Sena¬
tor Taft pointed out that Federal
action is not adequate—because of
shows
that
asj a
Federal
legislation
lack of jurisdiction—to deal with
abuses
in
the
building trades.
Some
of
the
principal abuses in
with
closed
the
shop,
excessive membership restrictions,
and
curred among
have
rules
make-work
oc¬
unions in the field
of construction.
State-'
is
action
quite -important,
mining. the
of
unions
problems
legal
' in
of
likely
also, in
to
be
deter¬
responsibilities
connection
with
management,
union
adherence of unions to
the terms
of collective
agreements, financial
responsibility for damages, and
an
accounting for and reporting
of their financial operations. Such
corporation manage¬
ment and responsibility, for in¬
stance, are largely determined by
State law, even though such or¬
ganizations are subject to Federal
anti-trust
and
security issuance
legislation.
aspects
now.
Union
regulatory laws of the
comprehensive type have
been adopted in Kansas, Colorado,
Texas, Alabama, Florida, Louisi¬
ana, Wisconsin, Massachusetts, and
more
It
is
interest
of
a
to
a
The record,
requisite.
we
have
that
system
func¬
Our task is to keep it
tioning soundly and
productively.*
ABA Has Course for
Bank Customer Relaf,
growing demand from
banks, the American
Bankers Association has just com¬
To meet
a
member
its
pleted a new staff training con¬
ference course and is making It
available
individual
to
banks or
of banks to help them
build better customer relations/it
to
groups
announced
was
William
Powers,
on
8, by
May
deputy manager
of the Association and director
its
Customer
and
Personnel
'of
Re¬
lations Department.
The
of
Delaware.11
which
Indiana,
1944.
ville,
May 12,
staff
central feature of the new
training
course,
which
re¬
quires six one-hour sessions to
complete, is a sound slide film In
color entitled,
"It's Up to Ug!"
which is made up of 66 cartoons
in full color.
To be used with the
film is a recorded narration which,
demonstrates the good and
relationships
customer
phasizes
the
individual
bad of
and
em*-
importance of each
staff
member
in
h
bank's, public
relations.
Accompanying the film
number of
is an.
easy-to-follow outline for use of
the training course leader in con¬
chusetts law resulted from initia¬ ducting the six conferences..
The
tive petition during 1946.
subject for the first session is
difference in the "Our Bank in the Community,"
and the entire slide film is shown
standards being applied to
unions by the States is indicated while members of the staff group
by the survey.
This is to be participate in a discussion of the
bank's relationships to the com¬
expected, and illustrates the ex¬
munity and to its customers.
In
perimental value to be derived
the following five sessions,
the
from action on the same problem
undertaken by the several States. parts of the slide film are shown
which focus attention on the sub¬
The States are showing a strong
ject for that day.
The other sub¬
tendency to emphasize, in their jects are:
(2)
"Our Bank—Its
(3)
"Out*
regulations, the major abuses of Services and Staff";
Bank
and
Its
Costumers";
(4)
unions
including abuses associ¬
"Our
Bank Meets the public";
ated with the closed shop, picket¬
(5) "Our Bank—Its Staff Team¬
ing, the secondary boycott, strikes, work"; and (6) "Our Bank—Its
membership policies, union man- Customer Relations."
The con¬
Considerable
legal
—
other
however, have not been held
constitutional.
adequate and general body^ of
law in the field of union
an
labor
great industrial States from this
list, and to note that the Massa¬
are
daily in some of our great indus¬
states—before there will be
trial
beginning of the fourth year dur¬
practice for an employee or ing which there has not been a
a
group acting in concert to de¬ single dollar lost by any depositor
mand employment of any "stand- of an insured bank in the United
in" employee or to require that States.
The last insured bank to
an employer hire or pay for any
be placed in receivership was the
employee "not required by the Brownsville State Bank, Browns¬
1943
notice the absence of
work for the State
adopted, on the other hand,
the States—and espe-
in many of
Deposit
ing trade
working conditions is main¬
tained, workers desiring not to
unnecessarily
detailed
or.
Much legislation will need
Of Insured Bank in U. S.
and
creating monopolistic
Louisiana, Ohio, New
.
severe.
regulating union practices intend¬
ed to require the employment of
labor organizations may be effec¬
tive instrumentalities for restrain¬
or
emphasizing major abuses of
vengeful
unions and to be neither
According to a recent survey of
State laws by the writer, Colorado
appeared to be the only State
or
a
whole—appears
a
as
Union Requirement of Excess
connection
The laws of
are
regulatory
union
adopted
to be
market
For
public utility anti-strike law.12
Action of those States * which
1946, makes it unlawful for a
labor organization or its members,
officers, or representatives (1) to
ance.
Types of picketing held illegal
agment, and the responsibilities of
unions as organizations.
It is likely that excesses in regulation will develop, at least tem¬
porarily, in some States.
New
Jersey, for instance, recently im¬
posed and then removed within a
few weeks a provision for heavy
penalties to be imposed upon all
individuals violating terms of her
(2) to prevent com¬
petition, or (3) to limit the pro¬
duction or price of a commodity.
The Louisiana statute, enacted
commerce,
During operation of the
utility by the State picketing is
illegal, the status quo as to wages
interruption to the utility's
the law, public
employees may
the purpose of discussing
conditions of employment with the em¬
ploying agency, but may not affiliate
with any labor union or claim the
right
organize
until the Governor is satisfied that
normal
perusal
author¬
adopted
is
the most comprehensive stat¬
are
picketing
of
terms of State labor law.
a
a
strike, slowdown, or work stop¬
page is a violation of the law—as
is a lockout or encouragement, by
regulation
methods
be¬
Governor
the
If
lieves the controversy
Some
a
petition from one of the parties to
tive
Regulation of Picketing
a con¬
response
2$
(2621)
11 The
April
5,
Delaware
1947.
law
was
approved
on
ference guide
of
consists of 67 pages
helpful information..
Thursday,- May
15, 1947
26..(2622)
>
by, commercial banks increased
Automatic nearly 60% to a record high of
:
vehding machines, already devel¬ $7 billion im 1946—a figure five
oped, will give change and, thus, times larger than the • total com¬
Farm Production Inelastic
mercial
bank
loans
on
real
estate
stand ready to challenge the indif¬
Now here is the main thing to ferent, high cost personal sales¬ in 1920, at the peak of the World1 ;
remember about farm production: manship carried over from the War I inflation.
it is, on the whole, rather in¬ war period.
This loan expansion took place
.
But whatever meth¬
elastic. That is a drop in demand ods
of
distribution
the future despite
the
credit
tightening ,
drives prices down far more than brings, the "forgotten man" of re¬ caused by the heavy retirement - ;
production. In fact, the paradox cent years, the customer, will once of government debt. Thus, begin,
of value is more likely to be en¬ more be "king." Businesses and ning
in^ March 1946, the govern¬
countered in the agricultural field, business men, who have neglected ment marketable debt was re;
than in any other field.
Also, a consumer goodwill and good cus¬ duced $23 bililon by the end of
drop in farm product prices af¬ todier relations, will have cause the year, and another $4 billion
fects the
entire economy, espe¬ to regret the error of their ways.
should be retired by June 30, this
•
cially the prices of farm land.
year. Moreover, the monetary au- • .
expand their activities.
A Look Into the Future
choice.
and
Their
their
that
standard
of
alternatives
they
don't
have
to
they think prices will
buy.
and
can,
If
they
go up,
rush to buy. By the same
if they think prices will go
they
such
are
usually
volume of unfilled demand
mous
living
token,
down,
do,
stop
buying.
the
in
particularly for
goods, and our
country,
durable
consumer
have
people
the
money or can
command the credit to make their
In this connec¬
demand effective.
tion,
desire to emphasize
I
fraction
small
that
credit volume is only a
consumer
it
what
of
be—the
eventually
will
surface has
scratched!
than
Attitudes Toward Shortages
been
Another powerful psychological
force affecting trade volume is
And,
wage
while payrolls will drop,
levels will not drop as in
the
1920.
Moreover, even with a re¬
public attitude toward short¬
The
managed
economy
ages.
little
more
the
cession later in the year,
na¬
that
the
United
tional
mined effort to protect themselves
pu?*chasing
scarce articles, even
though not immediately needed
and storing them against possible
in mind, may I re¬
future
needs.
amount
In
There
of "just
short,
was
vast
a
in case" buying
to
drug
want it; it became
the market.
on
a
government purchasing for for¬
eign relief and government sup¬
port
floors
under many farm
crops, especially the larger ones,
great support to prices,
will offer
The folk-ways and buy-ways of
our
And, finally,
folk habit developed— pre-war standard.
a
if an item was scarce, everybody
wanted it.
But, the moment it
became freely available, nobody
seemed
income
expenditures for plants and new
equipment this year than last
year—$13.9 billion compared with
$12 billion in 1946. Government
expenditures continue at unbe¬
lievably high levels, based on any
particularly agricultural prices.
people furnish the real driv-
force
for
business
activity
And, never forget that in all these
respects the American is a law
An£
Long
No
Severe Depression
or
the foregoing,
and
such factors, it is my
conclqsion that, despite the bally¬
people in other countries, nor can hoo, we shall not have a long or
he be fitted into a set historical a severe
depression. We shall not
pattern. This means that the man have to take to the lifeboats, al¬
unto himself.
Weighing
many more
He differs from the
in the street must be watched and
studied all the time, if any worth¬
while estimate of future business
conditions is to
be reached.
Well, what does the man in the
(and his wife in the kit¬
chen) think about the current
street
business situation?
The
answer
is
though we may have to man
the
pumps!
of fact,
even if business should decline 30
to
40% from today's levels we
should still be at a good level by
As
any
statistical matter
a
pre-war
standards.
wait
still
longer
and
prices
the
and so it goes. In
falling volume has al¬
past,
accompanied
ways
price
reduc¬
Of course, the drop in vol¬
tions
have been because the
reductions were "too little
ume
may
price
and too
late," but the fact remains
declining prices both directly
and psychologically exert a pow¬
erful influence in keeping people
from
buying.
Because of this
tendency to withdraw from the
market and wait, no one can say
how far liquidation and price de¬
clines, will go once they get under
that
purchasing power. The inventory
troubles, business failures,
and
consumer resistance, which came
to the surface in the last month
or
the result of prices out¬
so, are
running purchasing power during
the last twelve months.
If the
between prices and purchasing
power widens with further price
increases, the recession will be
just that much more serious; on
the other hand, if the gap nar¬
gap
recession will be less
serious. If any of you think this
is an argument for higher wages
for the £IO, let me remind you
way.
that all organized labor accounts
Fortunately for all of us, the re¬ for less than 25% of those gain¬
cent price declines, at least so far
fully employed. Furthermore,
have uncovered more than ade¬
wages of organized and unorgan¬
quate demand for quality goods ized labor, and salaries of execu¬
attractively priced. In fact, so far, tives account for only about 60%
good values practically walk out of all income payments to in¬
rows,
ness
men
are
deal
more
producer than that of any
there
before,
is
the
large
making this mistake
.
$200,000,000
;
of, Treasury bills each week. Asp
about 90% of these bills is owned
by the Federal Reserves banks, the
;
the recent
Treasury will redeem
other
crop.
got
war
fails.
ance
A Heavy
Backlog of Bussiness
Failures
Undoubtedly we have a heavy
backlog of such failures.
During
the war all kinds of wastes and
extravagances became common¬
very
Although we
quickly.
so
we
ness
a
sizable
shall
depression.
activity,
bitter-end
we
may
busi¬
was
up
have no
tion
of
recession in
Quantity Theory OverEmphasized
I
this
say
economic
quantity
■^should
they
of
not
also
because,
while
of
consequences
not
be
emphasized. There is still
was
up
53%. Cotton with a production
of
8,482,000
bales was
the
decline from the
the
and that was
under-
an enor-
2,235,000,000 pounds
the
which are
on
of
now
new
products,
beginning to
come
the market in volume, and the
only competition of old products, which
are being improved in most lines.
major field crop which showed a
money
and credit
be over-emphasized,
should
52%, and tobacco produc¬ competition
duction
so
1935-39 average
only 35% from pro¬
levels,
had
been
prices
were
which
high that cotton
chronically depressed.
The terrific
competition, which is
getting started, will have a great
effect on the distribution of goods.
.Supermarkets
fields
food.
and
sell
will
invade
new
other
than
lines
Chain stores will put in new
.
:
relatively well as current
are not too" far out of line
up
prices
with the prewar ones.
turpentine
rosin prices some four times
1939 level, would appear to
vulnerable.
Most competent
Naval
stores,
with
ing may appear gloomy. I do this
because I think the bankers of
America want, to be able to point
record than the
Frenchman
who,
when
asked
what part he played in the French
devolution, replied, /! survived."
to
r i
ciiluiiiuix
..—,
-
•
'1
Significant Financial
tn-
:
,
-
;
;
;
.
'
•
•'
market.
Now, I would like to summarexpressed.
1-
Factors
;
ize the views I have
Summary
.
(1) The quantity of money and
credit has to be considered in the
Price declines, under presabnormal conditions, will ac-
(2)
ent
tually have a beneficial effect on
the
economy
of
the
country
stimulation of demand;
further price increases
will make the coming re-adjust¬
ment in business just that much,
more serious.
•
'*■
*
-
-
v
.
•
.
through
whereas
;
■■
The outlook for business is
(3)
:
to any pre-war ;
The national income in 1947
compared
good
level.
in
de¬
clining prices and declining vol¬
be
should
twice
as
Nonetheless,
1929.
as
ume
the
great
we
recession
as
«•
face
develops.
Furthermore, building activity
•
not up to
,
is
expectations and that is
serious from an economic
very
-
standpoint.
better
a
;
prices of bank eligible gov¬
ernment obligations. On the whole,
however, no major changes in the i
government bond market are to
be
expected and any material
changes in prices of AAA obliga- '■
tions will depend to a large extent
on
a
revival
of the mortgage j
probably shall Have a decline in light of our enormous productive
all. three of the#!, the prices of capacity, our standard of living,
pulp and newsprint should hold and our folk psychology.
and
in
ing, too.
place
;
;
the
than the record crop of
last year.
Future prices as com¬
pared with cash wheat reflect this
improved crop outlook.
j'
els larger
much
cultural prices are higher com¬ petition will be keener than any¬
liquid purchasing power in the
In fact, some
pared. to pre-war levels than those one now realizes.
country that the problem is not
of any other large group. Due to a business men have forgotten what
ability to pay but inclination to
favorable
combination
of
high is meant by competition and how
pay.
If this psychological sales
To give you an
prices and record-breaking crops, brutal it can be.
resistance can
be
overcome
by
farmers received more than three idea of what lies ahead let me
new
models, higher quality, or
times as much cash in 1946 as in cite you just one statistic, which,
lower prices, the current recession
is symtomatic of many lines of
an average pre-war year. Over-all
in business will be neither long
farm production during the entire business: The number of iron and
nor serious.
If, however, adjust¬
war period
averaged nearly one- steel processing plants in the
ments which will convince the
third more than the five year, United States increased from 20,-°
consumer
that he is getting his
1935-39, period when measured in 400 in 1939 to 33,600 in 1946. ■ In
money's worth are not quickly
physical units. More specifically, addition to the competition of new
made, then we are in for an oldwith war
corn
production of 3,288,000,000 producers,, financed
fashioned business s'iakeout with
bushels was up 42%, wheat pro¬ profits or at current low interest
losses, failures, and unemploy¬
duction
of
1,156,000,000 bushels rates, business has to meet the
ment. But even though
have
embarked on
credit
That is the meaining
measures.
business—yes, in bank¬
the
Moreover, we have had
no
real
business cycle
test of be
operating efficiency or financial experts expect our general price
strength since 1933.
The savage level to eventually stabilize at 40
competition now starting and the to 50% above the level of the
(Of course, prices were
downward pressure of the busi¬ thirties.
during the thirties.)
ness
recession we are entering very low
of the stores. On the other hand,
Naval
stores
will have to drop
dividuals.
will weigh many a business on the
shoddy, wartime, "ersatz" prod¬
a
long
way
if their historic rela¬
No, this is merely a frank rec¬ scale of consumer preference and
ucts, and high priced and offtionship with other prices is to
ognition that our price structure find it wanting.
brand merchandise sleep peace¬
be restored.
is so high that it is very vulner¬
Business will not only be be¬
fully on the shelves. As I indi¬
Many of these things I am say¬
able all along the line. And, agri¬ deviled by high costs, but com¬
cated
now
restriction
of
announcement that the
drastic
more
into the habit
of passing their
costs on
to the government no
matter how high they might be.
Paper and pulp prices, while
Now they have the same idea that high, have not skyrocketed as in
they have to get more because some other lines. Demand in this
their costs are higher.
That is field is more closely related to the
economic wishful thinking. They business cycle than in most other
may have to get more if they are fields.
At the moment, demand
to stay in business, but they don't is far greater than production, but
have to stay in business!
And a decline in advertising, book
that, of course, is exactly what publishing, or volume of manu¬
happens under conditions of com¬ factured products to be packaged
petition—the high cost producer would rectify the present imbal¬
they
because
But, psy¬ during the
chologically, supjh a decline would
He thinks prices are too
be very serious: Will we have a
high and he expects them to come
drop of this magnitude in busi¬
dbwn.
He, therefore, decides to
ness? The answer to that depends
wait. Prices drop and he decides
on the future trends of prices and
to
thorities have
specifically with
two or three of the more impor¬
tant products of Georgia, the sta¬
tistical position of cotton is bet¬
ter from the standpoint of the
To
The worldwide de¬
times 1932, and that agricultural mand, as Europe and the Orient redemption will reduce reserve
production is inelastic! The con¬ begin to make progress in their balances much quicker than the
upward climb from the wreckage redemption of Certificates of Inclusions are obvious.
of war, is bound to be good. His¬ debtedness.
The member banks,
However,
in
all probability,
torically, cotton prices have fluc¬ in order to meet their reserve rethere will be no repetition of 1920.
tuated with the business cycle,
quirements, will be forced to sell
The demand from abroad is very
and even more sharply at times.
certificates, which probably will
great; the national income is at
Now, however, we have the gov¬ be
acquired by the Reserve banks.
much higher level; and, further¬
ernment parity floor and the loan
However, since the "banks, particmore, there are Federal floors un¬
floor, so that prices cannot plum¬
ularly the large ones, need a cer¬
der the important farm products.
met as in the past.
tain proportion of certificates for
I have stressed the business out¬
The prevailing liigh prices of
liquidity purposes, it is obvious
look because agricultural prices
cattle and hogs largely arise from
that their sales must be limited.
are
to a great extent dependent
the current highT'cost of grains.
on industrial payrolls.
Obviously, These high prices are not ex¬ Furthermore, it would not be surprising if the Treasury were alsa
the wage worker cannot pay 75
pected to continue.
Government to unpeg the bill rate.
cents a pound for meat if he does
and foreign buying of both meat
It " is, therefore,
not have full-time employment at
quite evident
and grains for overseas relief pur¬
good wages. By the same token, poses has driven these prices to that the Federal Reserve author¬
ities are endeavoring to tighten
demand for industrial production abnormal
levels.
Furthermore,
the credit base of the country in
is largely dependent on prosper¬
bumper crops are anticipated in
ity of our farmers.
corn, oats, and wheat;
As a straw order to make it more difficult for
the banks to expand their volume,
In trying to estimate the future in the wind, the Department of
of loans.
The redemption policy
price structure don't get the idea Agriculture estimates the current
that prices have to be high be¬ winter wheat crop at 973,047,000 now instituted by the Treasury
cause costs are high.
Many busi¬ bushels, which is 100,000,000 bush¬ will have a depressing effect on
simple:
drop further,
Statistical Position of Cotton
basic character of agri¬
With the
cultural prices
has been so high peat that farm production is now
States
could
have shortages
of during the first four months that running about 50% ahead of pre¬
food, clothing, shelter, and mod¬ it promises to exceed the 1946 to¬ war, that farm product prices are
tal of $165 billion, which is a lot 175.6% of the 1926 level; that the
ern mechanical
gadgets came as
of purchasing power if the people cash income of farmers in 1946
a profound shock to most Ameri¬
cans.
Their reaction was a deter¬ use it! Business is planning larger was three times pre-war and five
demonstation
,
f
Mail order houses will, also,
lines.
(Continued from page 4)
v.
Our price structure is vul- :
prices have out*
purchasing
power.
Farm 1
(4)
nerable because
run
prices, in particular, are very vul- ; .
nerable because they are so much 1
higher on an index basis than ;
take a quick look at other prices and, furthermore, a
the more significant fi¬ large part of their strengthen re¬
nancial factors.
The most amaz¬ cent months has been due to the' •
Let us now
some
^
of
development has been the purchasing and other activities of
rapid increase in loans.U. The in¬ the government.
crease of $5 billion in loans last
(5) Sellers' markets are chang¬
year was the most rapid increase ing to buyers' markets and ,the
since 1919-1920 and the grand to¬ most
savage competition Ameri-'
ing
tal
of
$32 billion was
$3 billion
greater than the World War I loan
peak. Loans to commercial and
industrial
businesses
increased
can
is
capitalism
has
ever
known
getting under way.
(6)
estate
Commercial loans and real
loans
exceed
the
peak
chiefly during the levels
following World War I, and
last six months of the year, to a
are
much greater than is gener¬
record total of $14 billion. And.
ally appreciated. Current inven¬
while commercial loans started to
tory accumulation;and abnormally
decrease a month ago, the total
is. still much larger than
most high prices of old houses indicate
the desirability of studying the J
people realize. Real estate loans
nearly
50%,
effects
have
will
recession
business
a
Recession Now Under Way!
such credit extension.
on
(7) The weekly retirement of
$200,000,000 in- Treasury bills is
business activity, a considerable
(Continued from page 4)
and the efficiency of labor in the increase in the total number Of
en active credit restriction meas¬
people seeking employment? Or
ure by the
monetary authorities, industry is, to §ay the least, very
lOW.
which will firm the rates on bank-
(
will
recession
this
<
spent
kinds of
want.
articles
these": circumstances,
Under
last
government ownership,
government management.
There
is a great struggle in the world
oetween the ideas emanating from
the United States, standing for a
towards
few months, and
a
more
And,
all, cost cutting will once
fashionable.
be
law of supply and
demand has
something to do with it. The man¬
ufacturer
and
distributor
will
is
the
that
learn
to
have
market
seller's
According
to
special
advices
May 6.from Prague, Czechoslova¬
that the days of
allotting merchandise one day in
a month,
playing gin rummy thb
rest of the month, is gone.
That
merchandise instead of selling it¬
kia, to the New York "Times," that
self
Payment By Czechs of
U. S. Prewar Claims
gone,
have
will
to be
sold.
That
competition will increase, will be¬
come keener, and that a 'number
American interests for compensa¬ of people who thought they were
tion for1 prewar
investments in very smart because they made a
Czechoslovakia. The advices to the great deal of money in a seller's
"Times" went on to say: "It has market will fall by the wayside.
Government
has
dollars
first
the
settled in
claim by
just
big
pay the Montan Com¬
incorporated in Switzer¬
land but with purely American
capital
its full $5,500,000 claim
agreed to
pany
A Return to Normal
—
in dollars.
""The
vanced
:
>
„
is
claim
in
for
ad¬
money
1936 to the
Czechoslo¬
Well, that is what we have
hoped for for a long time; After
all, this country is not one of
scarcity, where a buyer seeks-out
the
seller, hands him - a couple
hence
reduction
a
of wages
within the power of
ual manufacturer.
whether
ment.
will
we
tion in money wages.
The reduc¬
actually take place be¬
of increased productivity.
tion will
cause
There
mand
doubt very much
see any reduc¬
I
today.
case
was
the individ¬
This is not the
from
different
can
afford
to
chinery, and if he can't do it now,
position will he be when
competition really gets doing?
There is
products
could
There is
a
The test has
We wish to
maintain our system which has
made the United States what it is
today.
We
must work
for a
smoother operation of this system
of private enterprise.
We must
work for a system in which the
peaks and valleys of the business
cycle are eliminated.
We must
strive with all our might to pre¬
vent large-scale unemployment.
not
great demand for our
from
foreign
In
1920.
1920
we
the price of cotton drop
from
over 40 cents a pound to 12 cents
a pound.
And later on to five.
This is impossible so long as we
see
Recommendation
President
to
the Philippine-United
commission of a
financial
further
islands
$50,000,000
disclosed
was
according
-
on
to
a
Vice
d
v
ic
the
May
Associated
to
Washington
Quirino,
loan
8,
Press
Elpidio
e s.
President
of
Philippines, in this country
the
on an
credit would be the
mainder of
a
$75,000,000 loan
re¬
au¬
thorized by Congress through the
Reconstruction
Finance
Corpora¬
tion, and is needed to help balance
the
new
republic's 1948 budget.
sum
right
then:
now
in the midst, or at the be¬
are
we
up,
a
demand not
.
high wages, and at the same time
relatively high prices.
If
productivity does not in¬
the way it has in the past,
our
crease
we
cannot maintain the American
standard
of
living
in the future.
Wealth does not consist of money,
we
have
sists
of
plenty of it, Wealth con¬
goods which have to be
produced. Now we
real question:
official visit, is said to have stated
that the
Summary
To
American food, but
-
States
come.
ginning, rather, of a moderate re¬
merely for
cession.
That recession need not
primarily for
worry
you
at all.
It does not
American machinery and equip¬
mean that you have
got to seek
ment, and all kinds of manufac¬ shelter in
your storm cellars.
It
tured goods.
After all, you know
simply
means
that
you
have
have floors.
Floors are here for it as well as I do, that a great
to
be
a
little
more
care¬
the year 1947, 1948, and, further¬ portion
of the world was de¬
ful,
and
forget
what
hap¬
more, those of you with European stroyed.
Two of the greatest in¬
pened during the last four years,
and
foreign
connections know dustrial nations,
Germany and and remember what
happened
how great, the shortage of food Japan, for all practical purposes
before.
Once
this
recession is
and farm products is all over the do not exist any more.
Somebody
over, we will surely enter a pe¬
world.
has to furnish the rest of the
riod of good business. Then will
Three,
speculation with bor¬ world with the material for re¬ be the time to study carefully the
and
development,
rowed money has not gone far at construction
problems that
confront us, in
all atvthe. present time.
In fact, and the only country capable of order to demonstrate to the rest
it is insignificant.
In 1920 almost doing so is the United States. You of the world that our system is
in
was
.
Truman by
yet
as
countries.
of
tickets
to
the
theatre,
payment
maybe
a • cigar,- to; xobtairr
will be $1,500,000 and the rest will
some
merchandise.
This -always
be
paid in annual ' Installments was and will be a
country of
over ten years. The company will
^everybody engaged in the favorite will ask what will they use for
plenty,1 where the seller will, have
indoor-amateur sport of speculat¬ money?
Well, they have the
be required to forego only the in¬
to advertise, and where the "seller
terest that would have accrued on
money.
The United States Gov¬
will
have ^ to
seek
the
buyer. ing in securities, in commodities,
ernment
alone
has placed at the
with
-borrowed
the debt during the war.;
money.
These
•.
Therefore^ if / business activity in
disposal of foreign nations nearly
J "If this is an augury of the the immediate future is not- as conditions do not prevail at the
$10 billions. Ten billion dollars is a
treatment to be accorded Amer¬ gooch as it was before it will sim¬ present time.
Furthermore, we have a huge great sum any tinie under any
ican ■< investors
in -nationalized ply mean a return to normal. The
circumstances.
piants, it is a hopeful one.
Al¬ conversion of- the seller's market; supply of liquid assets in the
hands of the American
people.
Some
foreign countries, par¬
to
a
buyer's
market,
with
<:
com¬
though negotiation^ are far from
complete, it is understood that the petition keener than perhaps ever According to, the best official fig¬ ticularly those in Latin America,
ures available the liquid assets in
have a great many dollar balances
Government, as far as the coun¬ before.
the hands of American people, in¬ accumulated here during the war
try's present
exchange position
In spite of the talk of inflation,
dividuals alone, exclusive of busi¬ The International Bank for Recon¬
will permit, is prepared to com¬ which we1 hear almost every day,
and Development will
ness, amounts to over $150 bil¬ struction
pensate in dollars those who ori¬ I am of the opinion-that we have
lions.
1
begin to operate in the next few
the
ginally invested dollars.
Many seen
peak. .. of
commodity
weeks, and will sell its obligations
claims, however, have been filed prices, and that from now on a
Profits Will Come Down
to the American investing public.
by. former Czechoslovak citizens gradual reduction in prices will
Profits, too, will come down, All these sums, plus the newly
who are now naturalized Amer¬ take place. Why? What will bring
because the good old law of sup¬ mined gold that will be shipped
icans. Since their original invest¬
about the decline in prices?
ply and demand will bring it to the United States, will give
ments were in crowns, it is be¬
First, if weather conditions con¬
them dollar exchange which will
lieved Czechoslovakia will insist tinue to be favorable we wilphave about, and you know it better
than I do.
Competition will bring be spent in this country. , We
in repaying them in crowns."
one of the largest crops of-grains
a
decline in prices as well as a
reach,
therefore,
a
first con¬
in this country.
That experts ex¬ decline in
profits, and an increase clusion,.
that
while
the
im¬
farm prices to be lower in in
:
productivity.
mediate
outlook
for
business
Money in Circulation _ pect
the future than they are today can
is
for
a
moderate
decline,
ac¬
Ordinarily,
when
commodity
The' Treasury
Department in be seen from the very simple fact
Washington has issued its custom¬ that spot prices are somuch prices begin to decline business companied by softening of com¬
men in
general begin to pull in modity prices, with a moderate
ary
monthly statement showihg higher than prices for future de¬
their horns.
They have found out increase in unemployment, this
the amount of money in circula¬ livery.
from years of bitter experience recession is not likely to last long,
tion after
deducting the money
Manufactured
goods
will
go
that when commodity prices be¬ and will be rectified as soon as
held in the U. S. Treasury and by
down because production is great,
prices
have
come
gin to go down this is the begin¬ commodity
Federal Reserve banks and agents.
productivity of labor in most lines
ning of a decline in business ac¬ somewhat down, and particularly
The figures this time are those pf is
slowly but steadily increasing,
as
soon
as the
cost
of
construc¬
tivity. Some of you will remem¬
Mar. 31, 1947, and show that the and
competition will do the rest.
ber that in June, 1929, commodity tion has gone down.
And once
money in circulation at that date
prices began to weaken, the de¬ this period of readjustment is
Living Standard Based on
(including, of course, that held in
cline in commodity prices that over, then we will enter a period
Productivity
bank vaults of member banks of
followed was in turn accompa¬ of good business
activity.
But
the Federal Reserve system) was
Above all we have to relearn
nied by a sharp decline in busi¬ there it will be good in the sense
$28,229,810,765 as against $28,303- the old truth, and I. believe that
the way we had
ness activity.
it before the
507,022 on Feb. 28, 1947, and $27,- should be preached every day in
war.
The term "good" as it ex¬
Most of you will remember a
878,621,746 on March 31, 1946, and the week at every convention, and
isted during the war, when your
compares
with $5,698,214,612 on there are plenty of them, that a decline in prices in 1937, shortly
customers ran after you, begging
Oct. 31, 1920. Just before the out¬ high standard of living in
this after Labor Day, again followed
you for an ounce of this and a
break of the first World War, that country was not "God given;" The by a decline in business activity.
of
that, that is
This time, I believe, and in fact quarter-ounce
is, on June 30, 1914, the total was high standard of living of the peo¬
gone.
That was not good at all.
$3,459,434,174.
'
ple of the United States was based I am convinced, that a decline in
;
That was bad.
And I hope that
on high productivity of labor and
prices of commodities, instead of
never comes back again.
machinery, which made possible forecasting a prolonged period of
vak Bank.- The first cash
Philippine Loan Urged
men,
which
erties are destroyed.
in what
it
what
Because at present
Why?
the
stands for government ownership
and under which individual lib¬
a
great pent-up de¬
machinery and equip¬
manufacturer
no
possible free
other
system
made
and
operate with old and obsolete ma¬
Two, the farm situation today is
entirely
is
for
enterprise,
private
of
system
which
<
above
the world there is a tendency
over
Durable Goods Demand
moderate,
be
all
on
which the people
We have in this country a pentthen, after
up demand for housing, the like
therefore, one can see that the various maladjustments have
of
which probably never existed
boom of business which prevailed been corrected, will we enter a
their price or rate pattern. "
i
before.
Great
as
this pent-up
until about 6 to 8 weeks ago, is period of good business?
All in all, American business
In my humble opinion a repeti¬ demand is, it cannot be material¬
gradually
fading
out,
and
we
are
end the banks face some problems
ized so long as a bricklayer lays
in for a period of transition.
Or tion of the pattern of 1920 is en¬
which will require "a bit of do¬
325 bricks a day, and a thousand
to put it differently, we are in for tirely out of the question, for the
ing." I wish I could be as con¬
feet
of
lumber
costs
$135.
following reasons:
a period where our economy will
fident that business will solve the
One,
before
the
labor situ¬ But as soon as cost of construc¬
assume a more normal character.
price problem as I am that bank¬
is entirely
differ¬ tion comes down we will have in
By that I mean the manufacturer ation today
ers will solve tfieir problems. In
In this country a building boom, the
will learn that prices of commodi¬ ent from what it was in 1920.
eny event, the months ahead will
1920 labor was not organized the like of which we never had be¬
ties are not determined alone by
be interesting; there will be few
fore.
the cost of production, that the way it is at the present time and
eligible government securities, but
will cause
no
major change in
dull moments for any of us.
27
(2623)
FINANCIAL CHRONICLE
THE COMMERCIAL 8t
165"" Number-4594
lVolume
come
to the
which
this recession
in business,
already has
very
modity prices,
a
rectify
the
maladjustments
into
our
possible
good
decline
A
that have crept
and will make
business later on.
economy
in food
prices not ac¬
companied by decline in wages, as
it will not be accompanied, will
mean
higher
real
income.
The
people will be able to buy more of
other things. At present the aver¬
American family spends be¬
tween 30 and 40% of its income
set in, will it
pronounced?
Will it be
of long duration?
Will the pat¬
tern be the same as in 1920, when
we
had a sharp break in com¬
be
will
business,
age
Will 1920 Be Repeated?
Will
poor
sharp decline in
on
Add to it the cost
food alone.
of rents, taxes,
social security and
dues, and you will realize
how little is left for luxuries, or
It does not mean,
woods,
decline
mean
income,
an
and
even
after a period of re¬
period of good busi¬
activity, it does not mean
we are not confronted
with
reconversion
ness
that
serious problems. During
the war a great many maladjust¬
ments have crept into our econ¬
many
Second, and this is far more
im¬
portant than what I have said un¬
now, we in the United States
are
the last of the line of the
in
the
cost
of food
increase in the real
the
money
will
consuming public borrowed
of $1,224,530 in 1946
from member institutions of the
American Industrial Banker's As¬
average
been announced
Ind., by Myron R.
it has
sociation,
at Fort Wayne,
Bone, Executive
Vice-President of
the Association.
This figure, it is
indicated, emerged from the Jlth
annual statistical survey just com-*
by the Association. It is
$553,764 above that for 1945 and
$553,810 higher than the 11-year
average.
Last year was the first
pleted
in which the average volume
mark
since the AIBA's statistical studies
year
exceeded the million dollar
According to
begun in 1936.
were
the average loan made
individual borrower also
Mr. Bone,
the
to
stood at
high in 1946.
a new
This
is $439 as compared with :
$357 in 1945 and $256 for the 11-
figure
average, a gain of $82 per
the 1945 average and
year
loan
over
$183 over the average for the 11-
this gain in
Despite
span.
year
volume, however, net profits, it is
stated, while at a new high figure
since 1937, were not as great, per¬
centage-wise,
"The
they were in 1945.
as
further
AIBA
The
number
viced per
of
reports:
accounts ser¬
employee in ,1946 aver¬
aged 522, another new high, indi?
eating either a marked rise in
employee efficiency or the reflec¬
tion of the acute shortage of help!
in
volume
cept
operating income to
ratio of
The
for
1946
any
was
while
1944,
below that
preceding year ex¬
the
ratio
operating expense to volume
the dollar amount
off and
net
was
similar figures for
preceding year, the ratio
of
charged off loans to volume
identical
The
advertising
any
of loans charged
recoveries on charged off
loans exceeded
any
of
fol¬
pattern. Although
lowed the same
with
dollar
was
the
11-year
expense
higher
than
of
in
preceding year, but, because
of increased
of advertising
All was below
great nations where the system
be private enterprise survived.
V
The
an
average.
omy.
til
serpi-luxuries.
A
however, that
entirely out of the
adjustment has taken place. And
even
though we enter that post-
union
will
be
will
world.
Increase in Consumer
ratio
Not Out of Woods
we
really the best in the
volume, the ratio oi
expense
to
volume
the 11-year average."
.
23
of
Says Fund and Bank Will Cost Americans Billions
transferred
little
for
con¬
no
or
sideration to foreign ownership.
matter may be pre¬
without
confusion
of
the
sented
thought there follow certain es¬
tablished
principles
respecting
and its uses and function.
money
irredeemable
The
(1)
currencies
paper
their
supplied
now
most of the world's
governments are without intrinsic
value.
Such worth as they pos¬
by
people
is derived from and measured
sess
by that for which they can be
exchanged within the country of
their emission.
(2) The worth of the total sup¬
ply of irredeemable paper money
issued by any government, what¬
ever its purported face value, can
never be
greater than the worth
of
the
country's
purchasable
and services.
If at any
things
the
time
supply of such
currency
is substantially increased without
corresponding increase in the
country's purchasable wealth no
more
is accomplished than a di¬
.a
lution of the country's circulating
medium, and a consequent rise in
prices.
Expressed in terms of
the
this rise in prices
lessening of its value
since it brings less in exchange.
This lessening in value at home
is immediately reflected in the
currency
means
a
world's
markets
currency
foreigners
purchase
to
currency
tilings in
country's
a
in buying things
use
that
within
since
country.
Thus,
as
country rise in price
a
because of the inflation of its cir¬
culating medium, the value of its
in exchange for that of
currency
countries
other
fected
not
similarly af¬
must decline.
Such
cline in exchange value
a
decline
nature
,
with
value
in
de¬
a
expresses
permanent in
and must not be confused
those
in
fluctuations
ex¬
change values which normally
sult
from
the
natural
action
re¬
francs.
issuing irredeemable
paper
money
in settlement of
budgetary deficits, and that of
foreign
exchange restriction or
manipulation.
The latter is in
reality but an adjunct of the for¬
mer.
Both are essentially dishon¬
practice
(Continued from page 2)
That
est
of
the
both
without
cal
such
spiral
with
upon
at
sav¬
pensions,
ascending
an
scale
increasing private mis¬
ever
when
ment is
practices soon make appear¬
and
continue spiral upon
ance
re¬
price
and public discontent.
It is
at this point that the second of
the abuses is called into play. The
ery
rotting away of the internal pur¬
chasing power of the country's
circulating medium finds vivid
expression in its declining value
the
French
the
Goverm
supplied with U. S. dollars
arbitrary rate of
plus
119
francs,
it, or its citizens,
are
equipped to enter American mar¬
kets upon a basis set by a political
bureau. To the extent of the over¬
valuation of the franc Frenchmen
permitted to purchase Amer¬
are
ican goods at less than going mar¬
ket
the situation is
prices while
reversed for Americans wishing to
buy in France. In a word, Con¬
gressman,
under
these
pegged
rates of exchange, for an approx¬
imate
equivalent in value as es¬
tablished in the open market, a
Frenchman will pay 119 francs
plus to Americans and Americans
325 francs to Frenchmen. If there
is
I
to
need
urge
verify this conclusion
to consult with those
buyers
of
you
American
former
in terms of
foreign French
products recently returned
This decline is intensi¬
from
France
empty-handed
or
fied by the efforts of the people
with returned American soldiers
to exchange their decaying cur¬
who were deprived of the true
rency into things of value includ¬
value of their pay while in France
ing the money of foreign nations.
through false and arbitrary rates
Exchange restrictions are there¬
of exchange. Some of the former
upon instituted, not because it is
and hundreds of the latter are to
supposed they can add value to
be found among your constituents.
the country's depreciated circula¬
Consideration
of
these
an¬
tion but because by such restric¬
tions it is hoped to stay the rate nounced pegged rates of exchange
of decline or conceal it from pub¬ must serve to convince anyone of
the falsity of the claims of those
lic notice.
' " :
expressed
money.
„
and
.
Under free exchange mar¬
relative prices of the
paper currencies of
(6)
asserted
who
supply and
kets
the
irredeemable
establish
play of
reciprocal trade.
factors, chief among
which
are
the
domestic
price
levels and the supply of and de¬
mand for those commodities and
many
services..., exportable 0from
each
i
country. .The foreign demand if or
country's currency will fluctu¬
a
with
the
demand
its
for
portable things and services.
ex¬
The
offered supply will increase under
fiscal policies which destroy pub¬
(4)
Important among the
ereign
powers
to
power
coin
of
state
or
issue
sov¬
is
the
money.
This power is a prime attribute of
government and may be exercised
in any manner the government
fit.
'sees
Under it
adopt
may
government
type of money it
any
a
desires
and
the
It may pro¬
all paper money or an all
an
metallic
of
increase
monev
both.
It
or
make its
may
redeemable
money
combination
a
paper
irredeem¬
or
able.
It
money
outstanding and force the
holder
paper
to
of
use
lation
in
These
powers
ercised
any
and
surender of
hence
an
re
it chooses.
frequently
flagrant
would
ex¬
abuse
universal.
near
their
a
or
outstanding circu¬
are
surrender
constitute
or
the
sovereign right and
impairment
eignty
and
to
Bretton
the
States,
manner
become
abridgment
recently
as was
their
Nevertheless
metallic
irredeemable
the United
trict the
in
accept
in its stead
done in
has
call
may
no
of
country
sover¬
signatory
Woods
Pacts
has
made such surrender.
*
(5)
The two most flagrant and
harmful
power
abuses
to
of
issue
the
sovereign
money
are
the
balanced
a
But when arbi¬
trary rates of exchange are de¬
clared and enforced under which
one
currency
is over-valued in
that
Stabilizar
the
tion Fund would bring
re¬
i
*
«
»
i
first
subsidy from that of the
while
under-valued
of
country
required to give
hidden
these
in
currency
of its exports.
portion
that
the
under-valued
the
away
a
The fact
subsidies
and
hidden barriers at first escape the
eye
of the casual observer makes
them
the less real
none
as
may
be
for
from
francs
same
bid
to
the
French
sents
pre¬
the
light of which the Bretton Woods
Institutions must
be
now
judged.
basis for illustration I have
the
selected
French
franc.
This
of
these
Frenchmen,
an
open
Government,
tion,
and issuance of francs since they
be disposed of so
profitably to
foreigners.
It
would
than
be
superfluous to do
point out to you that
deficit financing
as
countries
chasing
con¬
and other Euro¬
internal
the
pur¬
of their irredeem¬
power
able paper currencies will decline
and
as
a
to
foreigners
without
additional paper money
and
consequence
arbi¬
the
trary pegged rates of exchange in
respect to the dollar will increas¬
the Pact
both external and internal restric¬
will
financial
and
decade
less
typical
of
so-called
the
market
open
manipulation
and
money
pegged rates of
upon
In terms of the tan¬
paper.
gible wealth of the nation the
325 to 350 francs per U.
sult
Notwithstanding this market price
the
"stabilized"
has been fixed at
119 plus
per
U.
S.
dollar.
Thus
per
U.
S.
dollar
is
which
price
pegged
or
the
transactions
francs
plus
119
rate
between
at
the
will
by fact and not by fiction.
the
over-valuation
and
of
of
the
dollar
cies constituting the
and
the
1%
at which Americans
rate
with
out,
tolerance
a
of
sets
desiring
were
to trade in France must purchase
ment
i
i
.
i
j
111
i
i
»1
>
1
->
i
half
none
a
will
be
in
the
the
past
of
the
of
Fund.
principal
These
contributed by our
under
direct
curren¬
paper
as¬
dollars
Govern¬
authorization
point out,
futile
is this
how
of safety.
measure
The non-working capital
the
of the
nations
only as
meet
interest and
requirements upon
of
member
be called up
may
to
Bank's
In
debentures.
other
words this
subscribed, but unpaid
is
neither
better
nor
than the bonds
worse
other ob¬
or
ligations of the member countries.
Those who would not invest their
funds in the bonds of these coun¬
have
for
warrant
slight
placing reliance either upon their
unpaid subscriptions or guaran¬
ties.
The loans to be made by
offered
stitution
this in¬
in the main, to be
granted to specific
are,
capital
analysis constitutes nothing less
a vain attempt to give value
to the rotting paper currencies of
the world through uncompensated
grants to foreign peoples of Amer¬
ican
wealth
and
production; a
"productive"
than
member
final
interpretation, all loans must be
struggle
sustain
to
on
a
loans
understood
tory laws value
also
world
the
be given to
may
in
that
knows to
which
be
all
valueless.
For these irredeemable paper cur¬
in price, Con¬
because they are weak
They are weak in fact
that
Canada.
that,
is
It
for
save
"ex¬
other than
currency
borrower.
They
are
guaranteed by the
country
within which
by some suitable agency
be
to
made
a
the
of
member
or
of such country.
are-weak
rencies
other than the
and
ceptional circurpstances," an un¬
defined term and capable of broad
payable in
sustained
within
projects
countries
States
United
world-wide basis the age old illu¬
sion that by the passage of declara¬
and
,
consists of the unpaid sub¬
required
Since T propose
from a
.
to discuss this
broad, rather
gressman,
Institution
in
than from a detailed plane, it
will
attempt
an
fact.
because
they
nominal
cost
as
print,* and
can
be
fast
analysis of its operational mech¬
anisms;
I, shall however advert
to
two
astonishing
principles
which are basic to its operation.
possess
that
the .extent
to
be produced at
can
as
presses
value only
will
persons
them
in
exchange
services within
accept
,
things
fpr
,
and
the
country of their emission, a' value
unnecessary
Both
found
are
to
its
among
an¬
weight of continuous issues. They
loaning conditions. One
is this; the Bank-must be "satis¬
fied that in the prevailing market
will remain weak in fact and grow
conditions
steadily weaker until the dishon¬
unable
est
loan
which
shrinks
rapidly under the
practices which are the cause
their weakness are discontinued
of
nounced
borrower .will
the
upon
terms
.
obtain
be
the
which in
the
to
otherwise
opinion^ of the. Bank,.,are i reason¬
and practices consistent with com¬ able for-the borrowed'';',The sec¬
mercial
honesty
substituted in ond : that, in the piaking of loans
their stead. For'of this everyone the Bank shall treat political con¬
ditions within the country.of the
may be certain: Either commerce
will be carried on upon the basis borrower as irrelevant and con¬
values
true
of
carried
will
it
or
not
be
One may
properly inquire
as
to
only economic conditions.
sider
all.
at
portfolio will
contain no
why effective provisions are not
contained in the Bretton Woods
ities which could
Pacts to
upon
ments to
kets
compel member govern¬
cease the practice of de¬
ficit financing through irredeem¬
able paper issues and to establish
maintain
and
monetary
systems
based upon true
instead
standards of value
false. One may with
of
equal propriety inquire as to why
by specific limitation; by reserva¬
tion and carefully drawn qualifi¬
cation
right
every
and
continue
to
is carefully
Is it not by these res¬
the
that
true
character
is
of the Pact
purpose
re¬
BANK
THE
the
In
ordinary
the
not
bank.
a
a
of
sense
the
It is, on the contrary,
loaning corporation, the primary
of
of which is the
capital
loans.
sets consist of a
proportion
siderable
making
Its loanable as¬
ratably negligible
gold, a very con¬
in
sum
in U. S.
currency
security mar¬
loan
the
time
the
By
vided
was
it is pro¬
must dis¬
the second
that the Board
made.
regard both the political character
and political policies of the coun¬
try of the borrower and, treating
them as irrelevant, view the loan
standpoint
loaning in¬
stitution,
Congressman,
frankly
intended and fully empowered by
Congress to absorb the savings, of
Americans to the extent of many
billions
of
dollars
which
is
from
"economic"
an
Here then is a
alone.
pledged to take only foreign loans
could find
character, purposes or1
litical
bility
of
the
which
the
loans
would
be
upon
takets else¬
no
and to disregard the po¬
where,
"International Bank" k
term
secur¬
have been sold
world's
the
at
which
vealed?
1
By the first of these principles
certain that the Bank's
it is made
any
grave
sta¬
! within
made. -t It
country
are
superfluous
thoughtful
to• 'urge
person
the
implications of these' pro1The
visions.
pledge
to
first
constituted' a
disregard
economic forces and
immutable
proceed 'upon
artificial
standards
expedient. The second
constitutes
most
the
conglomeration
carried
franc
rapid draining of dollars from that
Bank
be
the
currencies
European
of
terms
supposed
of the
I shall
in
purpose
One of the inevitable results of
French Government and the Fund
to
re¬
always be that dictated
and
are
of
hope of success than this so-
exchange fiction
price of the French franc had been
S. dollar.
follies
dol¬
called "Stabilization Fund" which
be substituted for fact only
may
long time the
a
soft
countries.
currency
For
all
By
that of
observant American
least
the
printed
fairly
be manifest to the
then
the
is
demonstrates
tries
tion and regimentation.
chases
United States.
as
capital,
point of arbitrary over-valuation
pur¬
past,
people will discover that far from
international
commerce
and
exchange the Stabilization
Fund is the very brood mother of
freeing
ervations
his
in
every
The experience
dollars.
recent
amortization
preserved.
situation
in
phase of American life and com¬
merce including imports, .exports
and
travel. Thus the American
It
of the
Canadian
or
of
private
dollar debentures will be payable
which
upon
sale
the
supposed measure of
safety for debenture holders, loans
made from the proceeds of these
scriptions
restriction
means
to
as a
to be rationed by the Fund which
desires to purchase abroad and re¬
foreigner
States
lars and
vide more dollars or suffer dollars
ward
French
United
goes
the
from
institutional investors
Bank
selection is made because from the
the
and
colleagues of the 80th and
subsequent Congresses must pro¬
such deficit financing
in
debentures
ratified either you or
as
ingly penalize the American who
the
It
Americans.
for
secured
these
saying
which
sales
made
sums
that dollars will
disappear from the Fund's assets
as
rapidly as the mechanisms of
the
Fund
permit. What then?
Simply this, under the terms of
iticians, to continue the printing
can
American goods
mean
services
pol¬
composed of elected French
pean
just concluded
certain principles in
they could
number
artificial rates constitute
tinues in France
The outline
a
the
for
as.long
As
secure
three times that which
attempting
II
by
contrary
cheaply "printed
in things
of value from Americans nearly
more
lands.
the
easily and
francs to
demonstrated by one
traveling or
purchases in foreign
im¬
enabling the French in exchange
secure
a
Oh
do' neither.
over-valued currency in effect re¬
ceives
of
decision
announced
portance demonstrates that it will
spect1 to another, a balanced reciprdca! trade is tendered impossible.
This is becausfe the country of the
'
f
manently
paper
decrease
or
supply at will.
vide
a
effect is
lic confidence.
for
basis
another is the result of the inter¬
goods
bargain
debentures,
management has stated must
almost exclusively in
be
your
economic.
or
But
attendant upon
ills
the
all
exchanges
production and
.the
import and export demand, and
all other pertinent factors politi¬
policies, rents, or receivables are
payable, or their savings accumu¬
lated
Such
the
one
levels of each of the countries,
being secretly despoiled through
dilution of the circulating media
their salaries,
instead.
flected
ings of that portion of the people
which
United States and Canada will be
inflation
quired to pay, it meets with lit¬
tle public disapproval.
Indeed it
may temporarily prove politically
helpful to those responsible for
its practice.But because of the
in
and
in francs
purchase
the
of
the United States and Canada. The
U. S. Dol¬
would
preferred to accept
sale
and services on
counter
for
for¬
eigners;
dollars as gifts,
and
this is the reality of the situa¬
American
francs
lar
exhaustion of the
and
from
the
cost
public
expenditure unaccompa¬
nied by
corresponding taxation.
Giving appearance for a time of
providing the people with some¬
thing for which they are not re¬
inevitable
Government
French
secured
Congress. Dollars on the bargain
counter
for
foreigners
mean
could have had whatever their 325
of immoderate
consists
by
requested
be
Bank's
the
government and goverened.
first
rate
a
If more dollars are
must be by Act of
Congress.
contributed it
wholly arbitrary. It bears no re¬
lation to reality. The open market
price, on the contrary, established
the simple fact that Frenchmen,
who on the date of the exchange
practices and bring ruin upon
The
is
It
about per¬
stabilized rates of ex¬
change and develop a balanced re¬
;
(3) The open market price of the various governments are estab¬
ciprocal trade between the peo¬
the irredeemable paper currency lished by the working of the law
of one country in terms of that of of supply and demand. They thus ples of the member nations, Its
reaction of the law of
•demand.
ate
Thursday, May 15, 1947
THE COMMERCIAL & FINANCIAL CHRONICLE
'(2624)
basis
of
considerable sums in the ir¬
redeemable paper currencies of bearing only such relation to real¬
member
states.
All additional ity as the sitting directors of the
Bank may at the moment deem
loanable sums, and it is estimated
plus
by
the
may-
management that
exceed
these
$6,000,000,000, must
a
-
pledge
to
-
disregard- the
Number
Volume 165
long-term
international
all
underlying
consideration
patent
THE COMMERCIAL & FINANCIAL CHRONICLE
4594
cred¬
its, the honor, and stability of the
government under the laws of
which the commitments and con¬
interpreted and en¬
forced. To assert that all the gov¬
tracts must be
the
of
ernments
world
alike
are
in' honor, probity and stability is
to utter that which all informed
ices
nations
creditor
the
to
the
arbitrarily created "parities of
exchange" now in effect under
orders of the "Stabilization Fund.
The
artificial
of
character
parities has already been demon¬
strated and, using France as illus¬
own
tration,
I have pointed out how
and inexcusable over¬
wndertaking to prevent the estab¬
lishment of certain existing types
the
of
relation to the U.
states.
tion
As
a
entrusted
funds
Is
within
foreign
corollary an institu¬
government
innocent
of
the
with
loanable
which
pledged to make long-term cap¬
ital
loans
in
borrowers
to
disregard
persons
political
the
of
total
char¬
acter and observable policy of the
government under the jurisdiction
of ,which both the borrower and
his
exist
must
property
and
by
the laws of which both borrower
and
has
abide
must
lender
pledged itself to a policy which
disregards truth, defies reason,
and makes mockery of human ex¬
perience. It is
policy leading to
a
disillusionment
disaster.
and
gross
valuation of
tion,
therefore admits of
tablished
the full equivalent of a
against the importation of
French
into
merchandise
the
United States and contrariwise of
a
subsidy in favor of imports from
the United States into that coun¬
This principle is equally ap¬
plicable to all other member coun¬
try.
tries whose
valued
in
currencies
are
over¬
in relation to our own
relation
member
that of
to
or
other
Great Britain is
country.
any
already struggling against the
handicap imposed upon her com¬
merce
by the over-valued
-soft
The British Govern¬
currencies."
ment
that, despite
But it is to less obvious, though conditions at
home, British mer¬
equally certain disasters in store chandise is in part being given
for this Institution, that I wish
away to these soft currency coun¬
to direct your particular atten¬ tries.
tion.
That
which I
propose
to
Observing that the things pur¬
make clear is that even indulging
chased for foreign use and trans¬
an
assumption of good faith on
ported from our shores are being
the part of both borrower and his
paid for with American dollars,
government
these
dollar
loans
unthinking American supporters
made from the funds of the Bank
be
will
impossible of
less
no
payment than
re¬
the vast defaulted
loans to for¬
eign
governments
and borrow¬
ers following the first World War.
public
this
For
private
and
the
is
old
same
world>.
is
now
aware
of this crude device for the sack¬
ing of their country, fail to note
that the dollars are coming not
from foreigners but from the sav¬
ings of Americans, no doubt in
part from their own. By monetary
and exchange manipulation, the
the same peoples, character of which they do not
though
of
greatly
diminished comprehend, their country's tan¬
wealth and ability
to pay; the gible wealth is being ruthlessly
same states and nations, the same
drained from it without possi¬
nationalisms, and the same hu¬ bility of an equivalent return. The
man nature.
We are, in short, to people complain of inflation; of
become victims of the same old scarifies, and of high prices.
De¬
wolf once legislated against by ceived and misled they unsus¬
Congressman;
Congress after its nature had been
revealed by the clearest of dem¬
onstrations.
It is true that for
its
improvement of
the
ance
appear¬
and that it may be less
read¬
ily recognized the wolf is dressed
new and more alluring clothing.
But behind the concealing facade
in
pectingly support men in high of¬
who, without cessation, pro¬
mote all three.
It has been urged
fice
that these over-valued currencies
but
are
passing phase of the
period; that once abun¬
a
recovery
dant sales to, Americans from the
countries of the
dollar
back
comes
to
over"XaAUu^jC^I
duction
in
It
dium.
circulating
our
is
act
an
which
the
the
of
by
some
11 is also mescapadecisions so made
Hnnli
controlled
byto interna¬
tional economic
forces
the
w
rnnef
clusion
thing
of domestic
duce the
the
factors cannot be changed
by gov¬
ernmental
edit.
Every office¬
holder and every citizen is sensi¬
tive
con¬
Industries capable of
financially and emotionally
adversely affects the
industry of his section.
By such
to whatever
which foreigners
new concept i£
already being
challenged and the hard fact will
fice, that whatever the anticipated
future, the present contemplates
the destruction of, or
injury to,,
in
or
drawn.
part must
with¬
be
The latter must submit to
foreign competition in order that
the former may
be paid.
Legislative action divorced from
and
political considerations exists only
of
in
are
of
When
men
found in public office capable
such
action they
face swift
removal
as
idealism.
by indignant constituents
every
congressman
minor
or
legislator knows.
Yet the possi¬
bility of payment of foreign cred¬
its
of the loans to be made by
or
amount
wealth
of
is
Those
store.
our
n
or
^und does require
political action divorced from do¬
1^ will require objective
^r?r}.'
political
forces
who
pay for cur¬
purchases are to be obtained
only through sale of goods or
rent
services
Americans.
to
unpalatable
And,
as
the
fact may be,
and though they refrain from ut¬
tering the word, those who speak
as
of exports are also speaking of
imports since commercially the
cannot
one
other.
exist
without
the
These
imports must
to the American
find
America, a process which, how¬
ever
desirable from
the stand¬
point
the
of
long view
will
be
exceedingly painful and distress¬
ing from that of the short.
ing
this
in
unwelcome
Fail¬
for
and
politically disastrous task,
present loans like those of
many,
our
the
past must go unpaid. To
ufacturer
or
ernment
man¬
producer A the gov¬
must
say
"however
con¬
nomenclature and rencies become re-established the their way
regrettable, you must henceforth
Tbe sumer- either as services or as
impressive mechanisms of bank¬ artificiality will disappear.
submit, tp foreign competition." In
consumable goods or fixed capital.
ing and commerce lies th£ ines¬ falsity iof, this contention becomes
answer,, to A's inquiry as to the
capable truth that American dol¬ apparent'.when one observes that Of necessity they must be'in large
lars loaned to foreigners, if repaid ^ales cannot, be .^re-established unr part sold in competition with and
sacrifice the answer must be "in
at all, must be repaid in dollars; der these arbitrary rates of ex¬ displacement of goods and services
of the sonorous
.
dollars which,
to have been
favorable
conditions
following
the
first
World War, are the more unob¬
tainable under conditions prevail¬
debtors under
the more
ing now.
reasons
requires that one bear
important
two
mind
the
of
in
considera¬
the
Institutions. Their mem¬
bership is alike; their directing
managements are in large part
grated
individuals;
purposes and aims identical.
are intended and designed
This
increase
seas
and
in unison.
dollars to be
taken from the savings of Ameri¬
cans and Canadians and loaned to
foreigners for capital investment
Second; That the
fixed
within the countries into
foreign
which
must
*
they
profit
goods
be
become
lands
go.
The dollars re¬
repayment of^the loan
obtained, if at all, as
realized from the sale of
or services for the most
part to the
citizens of the loaning
'Since the
discussing
be com¬
those
eagerness,
demand
Their
provide pump-priming
indigent nations in or¬
we
first
that
they may at once begin
the purchase of our output,
lo
them
this
the
seems
capital loans we are
can
through sales of
be
repaid
- v
only
goods and serv¬
order
make
provision.
American
or
which
displaces
displaces American
through com¬
petition forces down the price of
made
goods
labor.
That
which
American
goods will force down
the wage of American labor.
Yet
if
crease
exports
our
ports
our
must
in¬
to
are
be
corre¬
spondingly opened to imports.
need
tell
neither
you
nor
I
your
colleagues that this presents a po¬
litical problem
of near monu¬
mental
proportions. Individual
simplest of
score,
fall
the
by
and parties may and in all
likelihood will fall
versy rages over
as
the contro¬
this issue.
Of what classes of commodities
will
the
newly
admitted
items
consist and what factors must be
deemed
share
lection? It is clear enough that we
rosy
deemed by them
obtuse.
Since I
optimism
are
to. be singularly
am
one
of those
can
controlling
export
our
thusiasts
mand must
in
singularly lacking
substance, I propose
to point
out to you the reasons for my
belief.
(1)
dis¬
abroad
come
revenues
current
the
are
our
the
quoted
prices.
Foreign
de¬
therefore prove con¬
trolling in respect to
It is equally
our
clear that
exports.
we
must
ess
ered
prices; to security holders
observing the declining value of
their
securities; to communities
threatened
and
with
cline
in
women
the
will
vincing.
of
industry
assume
government
a
that
men
and
at
the
is
to
history of
Orators
and
circum¬
disregard
those
to
be
based upon reality. Measures des¬
ignated
as
quire
the
remaking
immediately
harmed, will remain unconvinced.
been
which
of
Americans they do immeasur¬
bility
of
ment
abroad.
possi¬
accomplish¬
permanent
To
describe
intervening
easy
truce
alter its true character
its
less difficult.
cure
its
ever
and
cause
world-wide
therefore less
by the
moneyism
are
cal.
The
if
before
cure,
its
full
income
of
the main
ties
will
our
exported commodi¬
differ
in
character
purely politi¬
is possible
any
back
an
been
politics. Ih every country in the
wOrld
distinguished
economists
and scholars
are
to be found
quite
able to point out to those in power
the measures essential to re-es¬
tablishment
of
sound
monetary
But in the entire world
systems.
not one economist
be
capable of pointing onit
those in power can deflate
how
an
scholar is to
or
found
inflated paper money circula¬
tion
before
and
at
this
it
the
themselves
has
in
its
run
time
same
office.
course
maintain
It
is
upon
political rock that efforts to
undo
paper
inflations
money
break.
Only the force of
people
fraud
enraged
alarmed
an
the
at
great
which, for themselves, they,
have discovered to have been per¬
petrated against them is sufficient
to
bring
flation
a
to
policy of monetary in¬
end.
an
Incapable
of
comprehending their true nature
the
the
or
become
when
of their peril
only
be¬
imposture
great
apparent through skyrock¬
comes
eting
the mass of the people
aware
the
inflationary
of
consequences
measure^,
abs'ract
of
process
of fully anticipating
domes ic
their
and catas¬
prices
trophic decline
currency
markets.
in
the
in
value
foreign
They
are
of
ex¬
then
of dis¬
cure
around
illusionment is manifesting itself.
It is this very cure now manifest¬
ex¬
fiscal policies of states
ing
tity
taking
has
run; is to be found in the field of
great industries and the long-time
consists of
than tak¬
people claim vested right.
its
nature
and
port a given commodity in quan¬
more
the
the
course
prepared to act. The
less clear that in
what¬
readily understood1
the origins of pa-*-
masses
per
change
no
For
malady remains unchanged.
Though economic in character and
it
It is
not
render
despite
re valence
living has been achieved and to
pay.
of
does
nor
of the
eigners at prices Americans will
standard
the
present
international
monetary
situation as a natural consequence
of two world wars with an un¬
annual tax
"high
re¬
able harm at home without
tectionism.
A
cure
not
of
prac¬
tices which have proven evil are
as fallacious as the evil
practices
themselves. From the standpoint
by Americans and for sale by for¬
has
barriers of pro¬
do
abandonment
send
we
world
the
the
for
measures
of world trade
through
be immedi¬
of
restoration of monetary standards
reasoning,
new
and 'of
values
exchange
world trade has been placed un¬
der dislocating
handicaps. These
handicaps can be removed only by
brave
ately benefited will be convinced
and
relative
mediums
commenta¬
world to emerge from a
Those to
of
democratic
tors may describe the
of the old.
hand
the
of
stable
con¬
bitter struggle to
under
outlined,
entire
action.
de¬
possessed of the vote will
sacrifices
stances
far from
prove
To
as
public revenue, this
submit without
the
loss
of population as well
ards
behind
sales potential since the proc¬
no
or
trade. Through de¬
long accepted stand¬
struction of
American
foreigners. They add nothing to kind from those imported. To
our
labor facing reduced
loss of employment; to
farmers and planters facing low¬
wages
restore world
built
taken from the
spendable
things
producer facing grave
to
losses,
But removal of tariffs if politi¬
cally possible would not of itself
The
dollars
from
they
the
se¬
or
against the American giant.
accept in exchange things desired
They follow:
If
only
in their
foreigner desires and will buy at
to whom the visions of these en¬
seem
facturer
forced
equations and those who fail to
their
that B may receive pay¬
principal and interest upon
his foreign loans and C for his
expanded exports."
To a manu¬
ment
ansvver
will
congressmen
is
Americans and given or loaned to
countries.
,
are to
both
that
.
quired in
returns
abroad.
der
capital
the
shall enjoy once proper attention
is given to the stimulation of sales
their
ihi
pro¬
to be sold over¬
is
from
dollars to
to operate
in
duction far, beyond that required
in satisfaction of our own needs.
composed of the same
They
increase
an
"Stabilization
adhering to this belief acknowl¬
the "Bank" are inte¬ edge no limit to the prosperity we
That
and
Fund"
envision
American
That
alluring picture is painted
by those who suppose it possbiie
to
assure
full
employment of
American
capital and .labor
through export trade. These per¬
capital and labor
pensated". In their
tions:
First:
Ill
An
sons
Understanding
for this
of
conclusively proven change.
unobtainable by the
be enlarged.
The infant in¬
dustries of foreign states will also
demand
and
receive
protection
may
the rarified atmosphere of un¬
informed
man's business that another's
one
a
This
from
en¬
tire
action predicated upon
beyond the control of the
cry out against either scar¬
city or high prices will cry in vain Legislature. In a word, Congress¬
if this practice continues since it man, it requires that, insofar as
is a practice which produces bom. is necessary to secure repayment
of our foreign loans and payment
Dollars required by foreigners
for our expanded exports we re¬
with
which
to
liquidate their
make
the industrial
pattern of
American debts or
deducted
and their leaders the
persons
things foreigners find it
diluted by the return of the newly mestic political considerations. It
printed dollar. This constitutes an will require political action ad¬
act of purest inflation since by it versely affecting certain classes
a
newly printed paper dollar or ot our industries in order that
manufactured
bank
deposit
is other classes may expand their
added to our circulation while an businesses and presumably their
equivalent
of
continue to be uppermost in the
minds of those selected for sacri¬
present generation
stock
political
factors exclusive
many
whole
and it
presently pro¬
duced
or
accumulated
tangible
wealth of this generation that is
diminished by the overseas ship¬
ments while it is the circulating
medium of this generation that is
is
production
Puf
to sell in our markets,
the s'le.
protection of tariffs either in
to its expenditure,
sponse
American
protection, important among
being those of soil, climate,
proximity to raw material,
to
markets, to transportation. These
nji
k.uy must be permitted to
expand; from those which pro¬
generation
produce or
sacrifice
the
that goes abroad in re¬
must
of
them
ex¬
breeds
production
be
must
by Congress itself or
bureau- acting on behalf
hL n?g+refu
while providing the for¬
eigner with the dollars required
to
purchase our salable things.
Superficially plausible this is a
vain unreality. The borrowed dol¬
upon
items
1
uni¬
are
tariff
payer,
Americans.
ization
respecting
admitted
made either
Sfni King
of
systems,
which
newly
(2) If the dollars we provide
procured by deficit financing,
is by borrowing, we create
the
illusion
of
taking nothing
from the present American tax¬
wealth
of
versally held, serve industry as
presently constituted.
The local¬
industry by types is the prod¬
that
draft
transportation
securities
of
me¬
constitutes
the
and
are
abroad
doubt that
no
Great
It
sense.
uct
siderations.
sent
little
is to be had upon
foreign loans and reciprocal
both scarcity and high prices.
lar
merchan¬
same
29
+om-mifrSe decisions
,with foreign states es¬
inflationary in character since by it
we have reduced our purchasable
wealth with no corresponding re¬
as
tariff
the
it
the
make
recovery
our
America but that which he pur¬
chases goes abroad. This is an act
dollar acts,
S.
Paul, the foreigner. But had
of
would
When Paul, the foreigner, spends
that over-valua¬
of
dise
if
French franc in
the
the extent
to
quantity
it to
Peter, the American, spent it both
the dollar and thing he acquired
would have remained in America.
these
persons
know to be untrue.
Our
government is at the moment
the spendable dollar from
Peter, the American, and sending
ing
one
exploring the possibility of their
repayment must examine the pos¬
sibility of such sales.
And this
examination will lead directly to
(2625)
equivalent
Cities
have
been
built
and their
itself
throughout
the
subdivisions have been predicated i which desoerate
men
upon the tax revenues
on page
they yield.
(Continued
world
abroad and
30)
30
THE COMMERCIAL & FINANCIAL CHRONICLE
(2626)
Says Monetary Fund
The International Bank and World Trade
And World Bank Will
Cost U. S. Billions
ments
(Continued, from page 2)
in its
was
belief that it
interests and for
the
in
taken
was
own
protection of its own trade,
and the combined effect of all
the
(Continued from page 29)
.
unwise
at home are attempt¬
men
ing to prevent. Through the oper¬
ation of the "Fund" and "Bank"
these steps was
promote a bal¬
by decreeing
reality
outlaw
and enthroning
unreality in its stead. Backed by
nothing more potent than their
own
fiat they demand that the
world
trade
of the
countries.
all
of
interests
situation,
On top of this
had
we
the world's most destructive war,
industry,
destroyed
which
war
a
moral
and
homes
manpower,
fibre. Hundreds of billions of dol¬
poured into the instru¬
ments of destruction. Trade itself
lars were
a
But this redemonstration of an
of
principle
demonstrated
often,
human behavior will, unhap¬
mass
cost,
oppression upon Americans, since,
despite
the
spiraling inflation
against which they now struggle,
billions of the tangible wealth of
their
from
turn.
in
will not
in
false
but
substance,
in time of peace, is
to sack by foreign
their country,
submitting
in
Americans
this
To
peoples.
office have consented in
lay it
the base¬
offer to the natural
of disintegration now ob¬
may
process
served in the world's paper cur¬
and hence in the world's
rencies
all
learned
help. We
in recent years
economic isolation is impos¬
that
sible;
a
Woods
It
was
be
that
situation
world
the
Bretton
Agreements were signed.
recognized that there would
two
to
problems
major
be
order
Firstly,
the
interests
of
those currency
hinder
and
the
of
protection
all
countries
from
evils which would
cjioke the free flow
of world trade, and
,.
,
to
help
all
Member
in
result
Secondly,
some
ance
to
of the
is the hard compulsion
the
truth,
slow-moving
often
cised
though
irresistible,
force,
exer¬
Fund
Development, the second.
but
one
There
step less ill-advised
tributed
quota.
a
in.
is
probably
no
more
until Congress ceases
of
the practice
pouring out the nation's wealth
in support of a
deception. It is
great world-wide
practice by which
a
change.
The 44 member countries
of
International
the
of
their
vary
agreed to fix the value
currencies, and not to
these
values without
monetary charlatanism is encour¬
sultation
aged. It impoverishes the best ele¬
four
ments of
clared their par rates of
riches
eign
people and
our own
no
one
save
politicians,
en¬
unworthy for¬
Monetary
Fund have
with
Members
the
Fund.
have
de¬
exchange;
already
only
10, countries have
done
so,
some
con¬
Thirty-
of them,
not
yet
under
a
speculators and
provision
in
the
Articles
of
those
elements
of international Agreement, allowing for a tem¬
society which by all rules of good porary postponement of the fixing
of
parities by countries which
conduct deserve support from no
have suffered enemy occupation.
one. And since price controls, ex¬
If, in the opinion of a Member
change restrictions, and commer¬
country, it should become neces¬
cial regimentation are an integral sary to
alter the value of its
and essential part of all monetary currency, this will be done only
debasement, being the cloak under
which
to
those
hide
the
responsible
evil
which
attempt
has been
done, they make certain a contin¬
uation
of
such
controls
and
not
their abandonment. American bil¬
lions
are
thus
being poured out
and the American people
impov¬
after consultation with the Fund.
addition, and most important,
all Members of the Fund have,
In
in
effect, agreed to certain basic
rules which establish what might
be called a code of behaviqr with
regard
to
exchange
practices.
During the post-war transitional
gold either 25% of its
10% of its net official
holdings of gold and U, S. dollars,
whichever
is
the
smaller, and
the
of
number of countries, but, as
erished in promotion of the very
a
thing
abnormalities caused by
we
condemn.
Very truly
WILLIAM
yours,
CHAMBERLAIN.
Saratoga, Calif.
April 25, 1947
will
also
eventually depend
or
The
is
Bank
reconstruction
destroyed
of
reconversion
economies
of
,
The International Bank for
The
and
Development
be unable to obtain the loan else¬
Monetary
where
Fund, then, is primarily intended
to function in relation to. current
and
trade
to
take
of tem-
care
situations. It is not in¬
tended to provide the1 long-term
capital needed by devastated and
undeveloped
countries so that
porary
may
to world trade. That
Let
that
reasonable
on
he
will
meet. Jiis
loan.
in
*
and
position to
under the
a
obligations
"
The
be
terms
•
aim
of
the
consider first the conn-
us
the-war. They
task; they
tries devastated by
International Bank is the revival
of world trade and
prosperity; all
its
means* .to that
end.
The
are
International
therefore, in
a
bank, because
special
you
is
Bank
sense, your
vitally in¬
are
terested in the achievement of its
purpose.
tremendous
a
operations
The
Bank
and
Its
Members
depleted
Simply stated, the Bank is a
manpower; they must teach the
cooperative institution, to which
youth the techniques of industry, 44
Member
countries
belong.
they must continue to restrict These countries have
paid certain
home consumption in order to in¬
must marshal their
crease
bat inflation and to
is
given.
countries need
money
urgently, the private
investor, mindful of experience
Although these
and over¬
of
the
needs
of
is hesitant to
Private lending did
countries,
it.
what
was
magni¬
individual
provide
not do
hoped of it in the inter-
and the-investor today
remembering that
defaults on
loans issued during that period.
His reaction is natural, although
we
must
not forget that there
were
defects
in the
inter-war
war
years,
cannot
help
there have been many
lending, which must be borne in
mind if we are to get a true pic¬
ture
of
what
happened. Let us
lending was
face the fact that our
done for
of
a
gain; it was not a part
coordinated
program;
proportionate
sums,
their
to
re¬
sources, into a fund which forms
the first working capital of the
Bank. They have also assumed the
liability for much larger sums in
might be in a
stronger position to raise further
order that the Bank
funds for its purposes.
The Bank
to
mutual
struction
their
assistance
Members for the recon¬
and
development
of
among its
territories.
Loans
will
be
made only under the responsibil¬
Member of the Institution,
and this should have an important
effect on~the relationship between
ity of
the
a
borrov^erand the lender. Both
have
a
in the
common
success
in the
interest not only
of the loan, but also
success
of the
Institution;
this
permits-'broader and closer
relations than is ordinarily the
between creditor and debtor.
ncouragemfent will be given to a
case
full exchange
of information with
regard to all matters of mutual
interest, and full opportunity to
consult
with
each
such matters, not
the loan is made,
other
on
all
only at the time
but throughout
its continued existence.
The Bank's Position as a Lender
pends in the first instance
.
subscribed
own
on
its
capital, of which
20%
will be paid up by the end
of the present month. The balance
of 80% is to remain subject to
call, only if it is required to meet
the obligations of the Bank. If
this is ever necessary it will then
be payable in gold, U. S. dollars,
or the
currency required to dis¬
charge
the
obligations
of
the
Bank. This uncalled 80% is, there¬
fore, in the nature of a guarantee
fund for the further security of
those who buy the Bank's deben¬
tures. The only working funds of
its pwn which the Bank possesses
consist of the 20% of called-up
capital.
in
But only 2% is payable
or
U. S. currency, the
gold
remaining 18%
being payable in
the currency of the Member coun¬
try;
this
latter
for
used
specific
der
portion
loans
It is
the
of
be
the
country
obvious that
conditions
present
can
with
only
consent
it
un¬
would
defeat the Bank's purpose to util¬
ize the currency of any country
which
and
is
itself
in need
of credit,
therefore, say that
20% immediate capital contribution of the U. S., plus the
2% payable in gold or dollars by
the other nations, makes up the
present loanable capital of the
Bank; this sum totals approximately $725,000,000.
we
may
.
the
For the supply of
the Bank must
to
borrow,
borrow
rely
,
.
,
further funds
its capacity
•
on
and .its
will
-
•
capacity to
entirely on
depend
.
the confidence which it is able to
inspire
in
.
the
investing public.
There is no danger, as has been
suggested, that the Bank may lend
»
too much money. Apart, from the
limitation imposed in its Articles
exceed
never
and
.
limitation, that it.
lend
if
has
it
borrow.
can
drawn
•
its capital, surplus
there is this prac-
reserves,
tical
on
what
I
can only
After it
;
,
have
called its present loanable
of $725,000,000, therefore,
just
capital
it will,
be
entirely dependent on the
judgment of the public regarding
its
.
portfolio," and
on the
confiwhich its policy will have
merited. Although,
,
dence
Bank
make loans which
private bankers
would be willing and able to un¬
dertake
on
and
.
reasonable
must not make bad
loans.
■
therefore, the ,
must
not,
International
or
terms, it
-imprudent.
It must act with prudence
.
wisdom
in
the
building up
portfolio; for it is on thatv
portfolio, and on the confidence
which it will inspire in the
public,,
that the capacity pf the Bank to
of
its
ally depend.
There afe some
special features
without sufficient understanding
in the Bank's position as a lender
of what was involved; loans were
which are—of great importance
sometimes
made for unproduc¬
for the proper fulfillment of its
tive
purposes;
insufficient care
ask:
'•
was often exercised to see that a
First: Its ^loans will be made
loan was used for the purpose for
with a view to their effect not
which it was granted; and high
only onjhe economy of the bor¬
interest rates, instead of being a
rowing [country,
but also, in¬
warning to investors, failed to do
directly, on the economy of other
anything but to encourage them
countries; thus a loan for the
to invest their money. The ques¬
tion now is: "Can we make a equipment of a certain industry
in one country, may also benefit
better job of lending this time?
neighboring country which is
Can we help the borrower to make
in need of the output of that in¬
a
better job of borrowing this
dustry;
time?"
Second:
It is
lending to its
The Bank's Charter
of misinformation. The Bank de¬
obtain further funds will eventu¬
en¬
couragement was sometimes given
to borrowers and lenders alike
the
of Agreement, that its loans must
is, therefore, designed
promote
about
word
a
Bank's resources, a subject which
has been surrounded by a haze
concerned.
fundamental
.
make their contribution
is tfiejob of
the International Bank.
they
satisfied that the borrower would
International
Reconstruction
for
Now
in
assist
to
disrupted
or
Funds Available to the Bank
follows:
as
se¬
a
curity which he could not obtain
from direct lending.
•
Use
of Available Funds
by the
Bank
,
Applications for loans totalling
$2,554,000,000
the
Bank
this does not
in the hands of
are
and
under
mean
study;
but
that the Bank«
is
contemplating or considering
lending that amount in the near
future.
Most
cover
reconstruction
of
the
applications
programs
extending over years—some as
long as five years. The Bank must
of necessity
gram
study the whole pro¬
in each case, but it is,not.
prepared to commit itself for the,
full period, or for the full
amount
applied for, no matter how worthy
with - whom it the program may appear.
If a
satisfactory re- loan is made,-it will be for the
first
and
most
ations than normally can be es¬
must approach its task of assisting
urgent part of the
the in the economic and financial re¬ tablished between a creditor and program,- which can be
com¬
the war
disappear, it is hoped that these
restrictions
on
by war,
productive
facilities to peacetime needs, and
the balance in its own currency. the development of the less de¬
In return, Members temporarily, velopment countries;
short of foreign exchange for the
Second: It must promote private
purpose of meeting current pay.-, investment
wheneverh possible,
ments abroad, may buy such for¬
and supplement it where neces¬
eign exchange from this pool, sub¬ sary;
ject to certain limitations both as
Third: It must seek to promote
to the total amount which they
the long-range balanced
growth
may
buy, and also as to the
of
international trade,
and the
amount which they may buy in
improvement of productivity, of
any one year. In this way Mem¬
the standard of living, and of con¬
ber countries are enabled to ob¬
ditions of labor throughout the
tain their reasonable temporary
world;
requirements for the balancing of
Fourth: It must deal with the
their
current
foreign exchange
more
useful and urgent projects
transactions, and so avoid restric¬
first;
tive or disruptive measures.
And finally, the Bank must be
certain restrictions have
necessity to be maintained by
period,
First:
the
tude
powerful element of instability
than those who gave first impetus
and uncertainty in trade than un¬
to the false beliefs. Their efforts predictable rates of exchange, and
will but prolong an agony which a necessary step for the resump¬
tion of free trading throughout
should be brought to an end. But
the world is, therefore, the estab¬
it will not be brought to an end
lishment of stable rates of ex¬
investors
summarized
has con¬
Each Member
whelmed perhaps by the
Monetary Fund
the
pool of exchange has been created
between the two wars,
The Part of the International
In
attempting to stem this force they
are
the
Inter¬
meet
national Bank for Reconstruction
by reality against unreality,
which they contend.
designed to
was
first of these problems; the
and
against
without
International Monetary
The
It
the giving of assist¬
countries which,
towards
whom it must
to which every Member
have
solved:
and
for the major portion of the funds
which it will lend. They may be
steps
some
transactions, carries, both towards its Members debentures, while enjoying
capital investment, to com¬
buy for them¬
selves abroad the bare necessities
miraculous cure. But the ill is one
it, could not take their proper
for revival. But whatever their
for which there is no cure save place in world trade, either be¬
own efforts, it is perfectly clear
in eradication of its causes. They cause they had suffered devasta¬
that these countries will not re¬
tion during the war, or because
wish for healing without discon¬
cover without external asistance.
their resources were not properly
This means that world trade will
tinuance
of
those
evil
habits
developed.
not revive unless that assistance
which have resulted in the illness.
will
commerce
.
within the fore¬
unless
taken to give them
are
have
hope that the temporary de¬
less
recover
future
world half sick and half
well will soon be wholly sick un¬
less some steps are taken to heal
country is to be drained
the sickness.
it without possibility of re¬
It was in anticipation of this
Under a method, impressive
form
In
that they
omies has been so great
seeable
with heavy
fall
will
which
cost
its
without
not be
pily,
tion and dislocation of their econ¬
current
countries to approach this goal, a
quota
commerce be
carried on
basis of exchange values became very largely a trade in
sustained by nothing more tang¬ these instruments. The economies
ible than the record of that which of many countries have been devonce was and their own
concept asted or disrupted. We now have
of what ought to be. In this effort the immense task of restarting the
the full measure of their attain¬ wheels of industry and peaceful
ment will be to again
demon¬ trade throughout the world; and
strate the impossibility of promot¬ one of the greatest problems is
ing commerce by substituting the the position of those countries
judgment of political bureaus for which felt the immediate impact
of war. In many cases the disrup¬
that of the free marketplace.
world's
upon
for
be made multilaterally.
may
pays
Effect of the War
The
to
propose
anced
vast pattern of
a
obstacles to the detriment
they are attempting to hold back
the
irresistible
forces of truth
They
Thursday, May 15, 1947
disappear.
The
lines
on
which
the Bank
own
Members,
should have more
.
of the world and the con¬
ditions which must govern its ac¬
covery
tions have been clearly laid down
debtor;
Third:
*
It
investor the
pleted in say,
can
offer the private
opportunity of shar¬
Agreement.
of the
The ultimate aim is the removal These conditions reflect the heavy ing in the work
of all restrictions so that pay¬ responsibilities which .the Bank through subscription to the
in
the
Articles
of
_
,
Bank,
Bank's
The
will
next
be
a year
stage of
considered
to 15 months.
the
program
when more^
money is heeded, and in the
of the borrower's
light
performance and
conditions
as
they may then exist.
'
THE COMMERCIAL & FINANCIAL CHRONICLE
4594
Number
165
Volume
ly related to the movement of
be such problems, that the restoration
goods and this is the function of
of faith in th^- future would • per¬
the
commercial banks
and
the
haps be the greatest contribution
a check will be provided on the
traders themselves.
use
of the loan, and funds will that could b# made to recovery.
I
believe
it
is
of
the
greatest
In the restoration of that faith the
not
be
made
available
more
this
In
rapidly than the supplies of goods
obtained
be
can
funds
are
the
which
for
$177 billion
desired.
In studying an application from
of its Members for a loan, the
Bank will have to consider many
one
questions, such as:
(a) The urgency and usefulness
of the project. (The aim of the
Bank's lending must always be to
get
greatest
the
possible
results
is
clear, for instance, that the break¬
ing of a bottleneck in a dev¬
astated country will usually pro¬
duce more rapid and beneficial
effects than a project for develop¬
ing a latent economic potential¬
for
amount
the
be
the
used
practical,
will
and
beneficial
be
both to the borrower and to world
Now, let me extend
endar year 1948.
The
(c) Whether there exists in the
country the willingness and the
ability to use its own. resources to
the fullest possible extent.
(d) Whether the loan is likely
to produce the effects which the
borrower anticipates.
Whether the borrower will
a position to
maintain the
(e)
in
service ofthe loan.
this to cal¬
most prob¬
that calendar year
175, which is about half way be¬
and
1946
tween
calendar
1947
first page)
)m
Senator
index will remain continuously at
this very high level of
is
"
be
(Continued fr
;
able figure for
*
trade.
of the Loan and the
The Making
Continuing
Responsibility
If the Bank decides that it can
and properly
make a
funds will be made
available to the borrower only to
usefully
loan,
the
meet the purchases for which the
loan has been granted. But the
responsibility for the loan
not cease with the granting
and the
Testifying
will
does
back on the
past, a defect in the machinery
of private lending has been that,
once the loan has been made, the
responsibility for maintaining its
service rested with the borrower,
and there was no arrangement for
cooperation, or even consultation
between the investor and the bor¬
rower.
It
is
ministration
of
the
aim
of
the
the
ad¬
Bank
to
remedy this defect by the, de¬
velopment of a relationship with
its borrowers, which will result
in
continuous
consultation and
the
information during
of
exchange
of
whole
the
that the
Bank will
interest not
time
talking
duction,
You
are
about physical pro¬
not?
now
are you
Mr. Edie:
Strictly physical.
no
proper
a
in the plan or projects for
which the loan was made, but in
only
the whole situation of the borrow¬
ing
it might
insofar as
country
affect the security of the
The
Bank's Loans
loan.
now
But if you take
figure that you gave of 175
you do not look for any major de¬
pression.
There might be some
slight depression or orderly ad¬
justment I take it.
Edie:
That
would
allow
Mr.
that
correct but
is
for
decline
a
temporarily of 20 to 25 points in
this
level
It
would
but
index
the
back by
allow
not
of business to
stay
that it will snap
assumes
the middle
or
late 1948.
My figure for fiscal '48 would
be 171, or
about the
cal¬
same as
the
as
I
-■
those are what I regard
the most probable figures, what
'Now,
products of industry and agricul¬
of
think
risk
calculated
the
as
We
eral
come
now
to
a
more
the farm.
world
the
Bank's
When
trade.
lot
a
and
devastated
loans
is repaired or a back¬
developed it is not only
the
country
concerned
which
benefits;
all
countries
benefit.
Markets
are
re-opened,
fresh
sources of supply are made avail¬
able. In trade, as in all human
activity, the interests of one are
the interests of all; the health of
one
member contributes to the
health of the whole body.
one
international Bank loans, there¬
fore, will benefit everyone. Not
only will these loans produce the
articles of trade, but they will
help 'restore that confidence on
which, in the last resort, trade de¬
pends. If we can help to put coun¬
tries oh their feet again, if we can
give, them the assistance which
they need during their convales¬
cence or the development of their
economic strength, we shall have
contributed a great deal to the
restoration
of
confidence,
and
business integrity and
may
*
again
receive
credit rating.
The world
'
has
wheat
of
-
•
to
over
that
include
would' not
Europe it
if it had
processed?
not been
Mr. Edie: That is
a
fiscal year—
Lucas^
Senator
May
what you base the
I
inquire
1948 estimate
upon?
experience
their proper
through
such suffering, and is faced with
been
;
"
Mr. Edie: If I may go on to the
question of the price level: most
analysts rest a great deal of their
conclusions
their
largely
violent
very
from the expectation of a
decline in commodity prices.
By "violent"
I
you
recession—and
think
I
work
that
,h
,
or
today as probable. So I have tried
to translate this into a set of fig¬
ures
based on a drastic reces¬
Now, let
Senator Lucas: Yes,
Mr.
cession
Well, it is based on
Edie:
analysis of the individual in¬
dustries that make up the index.
our
Say there
roughly, 30 separate
are
industries—steel, automobile, and
Our method of trying to
get the
is to analyze each
overall
index
of
those
industries
and
to
identify drastic re¬
will
that
terms
I
be,
think, readily understandable. Let
us
suppose that there
were six
million unemployed by the end of
this year or early next year, and
let
tural
of
15
prices,
that
would
there
that
assume
us
decline
v
soon.
me
in
107.
to
on
20%
were
a
in agricul¬
the average. What
price
Senator
during
the
the
came
As
than your
such
an
Necessarily
Lucas:
I
Dangerous
so.
presume
that
estimate is made, upon the
theory that there will be little or
recession during 1948.
no
Little
Edie:
Mr.
or
no
is per¬
haps belittling it too much.
I am
assuming in this case what I
would call an orderly adjustment
in industry
in
terms
and that would mean,
of
the
index
number,
that from a peak of, roughly, 180
it could drop down to 170 or 165—
in that range—and that would cor¬
respond with the calendar year
figures that I am using.,
;
Now, if
we
drastic
a
talking about
were
recession
we
would
have somewhat lower figures and
I will, in just a moment, if I
may,
give
you figures based on a dras¬
recession, which in my best
judgment
does
not
necessarily
tic
have
to
would
not
happen and probably
happen, but may hap¬
pen.
What
is
(Chairman):
estimate of unem¬
or
Lucas:
less
on
You
base
About 2Y4 million.
Is 2%
Senator Martin:
about normal for
Edie:
Mr.
what
our
Well
it
million
country?
is
rather
a
normal.
small
That
represents
might call shortage of
you
You
can
Mr. Edie:
That is
I
would
a
say
You know there
who
took
the
that
said
there
OPA
off
slight rise in prices,
immediately drop
would
to
where
they
were
under
have three to
that
as
there
realize
I
those who said
think they
were
that
sir, but I do
were taking into
account, into the reckoning, the
money supply factor.
They were
looking at it on a supply and de¬
mand basis, leaving the money
supply largely out of the account¬
ing and I think that was the
error.
,
Martin:
Senator
four mil¬
There
would
not be any danger to our economy
if we had as high as four million
unemployed?
Mr. Edie:
be
ning to get unemployment.
Payments
1946
ported
return
$165
billion.
were
At
to
is
cor¬
They
have
I
think
that
is
cor¬
where
went
to
normal
a
Why, normal is
were before
OPA
prices
off, and if prices have got
that
make
decline
they have
got to go from, say, 149
112
And
level.
normal?
what is
down to
something like that, which
is a very severe
decline, and I
do not think it is going to hap or
pen.
Milliken:
Senator
would
That
assume,
would it not, that the
OPA price levels were realistic?
That
Edie:
would
is
right.
That
they were realistic
assume
and in tune with this new money
ing this.
Well, being critical of the other
fellow's ideas of what is going to
happen to prices, I suppose that
it is appropriate for me to state
my own ideas about it.
I think
Milliken:
I
think, Mr.
arbitrary simply served to
mask the condition that has since
normal
new
Mr.
Yes,
Edie:
I
recall
the
Johnson:
time
that it
And I recall
said
was
went off.
OPA
the time
it is between 135 and
index.
Senator
fiscal
over
a
thinking
year.
What
Milliken:
Senator
Between 130 and
think
I
because
that
going to happen. I think you are
going to have some adjustment of
prices.
national
the
debt
If
it
the money supply to
Edie:
Mr.
That is
it will not be
bonds
one
will
You
tionship.
money
a
are
total
reduce
debt,
off
a
If you assume
third
then
or
40% of
every
time
billion of debt you
reducing the money supply by
You are not reducing it by
full
billion.
by
Corporate Prices to Decline
Slightly
^
"My estimate for earnings (be¬
taxes)
to the
said
Mr.
$22 V2
black market level which was the
dar
endar
the"1
course
sensible
the
third to four-tenths of that bil¬
supply-demand level, and that of
a
rela¬
one
for
all
net is $22. to $23 billion for
was
but
correct,
to
paid off are owned by the
you pay
a
reduce
that extent.
supply only insofar as the
that they own a
the
reduce
we
will
removed the OPA restrictions
go
the
supply is fixed up at this
high level. I do not see anything
that is going to bring that monejw*
supply down enough within any
one twelve months' period, calen¬
dar or fiscal, to permit prices to
drop as low as so many people
are talking.
I do not think it is
you
would
140,
money
fore
prices
was
estimate?
Mr. Edie:
and
for
that
That is regardless,
'48, '49. It is a plateau
period of years; I am
'47,
your
Is
Edie:
Mr.
for
Milliken:
calendar '48?
or
opponents of OPA that when
the
think
I
140 for this
the
that
of
such
comments at the time.
Senator
level
prices — I am talking wholesale
prices, not the cost of living—is
considerably above the level at
lion.
revealed itself?
at
the
that
re¬
The natural payments
calendar year
as
being
That would not
dangerous change and it
would comply with orderly ad¬
justment. When you get up to six
million or better you are begin¬
a
Mr. Edie:
Edie:
Mr.
the
No.
Johnson:
commercial banks.
-
.
still regard Edie, there were also those who
relatively normal.
■said that the price lines of OPA
Senator
that
Senator Johnson:
Edie:
lion unemployed and
for
right.
we
be
it
Mr.
labor,-or pretty full employment,
this
what you term an
orderly adjustment?
moment
back
supply dur¬
money
another 7
it is a
supply question primarily.
so
—
those
would
created
we
year—about
Senator Lucas:
not
ployment at the present time?
Mr. Edie:
as
more
last
were
Milliken
your
think
rect, but there seems to be a
concept now, widely accepted, al¬
though I do not, myself, think it is
right, that prices now have got to
OPA.
Predicts Moderate Drop in Income
Senator
more
Senator
the
matter of fact
little
but
Prospective Unemployment Not
1947?
Mr. Edie:
Senator
esti¬
low
course
regard
a
money
Your 1948
Senator
a
war.
Well, it would mean that the
quarter of this period ahead
would probably occur either the
fourth quarter of this year or the
first quarter of next.
speculative of
by
high enough to
put them in equilibrium with the
new money supply.
I think it was
a
matter
of
adjusting
to
the
money supply created during the
billion
Lucas:
was
We in¬
deposits of
currency
in
war.
to this 149 point which I
up
would
dexes.
more
you
little over 200%
during the war, and when the
OPA was lifted, the prices were
free to seek their own level, they
how much steel
Senator
the
demand
and
banks
circulation
ing
mate is
do
I attribute that main¬
created
a
will be, how many automobiles
will be turned out, and then com¬
What
Lucas:
creased
other
production there
■'
that to?
Mr. Edie:
physical
level
of
business—in
words, in terms of these in¬
149.
ly to the money supply that
make the best estimate we can of
one
February 1946 was
have cbme up fast and
we
since then to
attribute
in terms of the
mean
So
furious
must allow for
things that may possibly happen
although we do not regard them
sion.
Mr. Edie: What I base it on?
107.
ruary was
experience teaches
we
I
rect.
to a supply, which they were not.
peak of. 149.
I might just orient
Senator Milliken:
That raises
that index in this way: that 1926 the
whole
argument
as
to
equals a hundred.
August 1939, whether they were realistic. ,
when Hitler went into
Poland,
Mr. Edie:
That is- right.
My
equals 75.
So that at 149 you own
point in bringing this up is
practically double August 1939— that if you are
going to adopt aw^
all wholesale prices.
highly pessimistic view of busi¬
Now,
the extreme pessimists ness I think you have got to jus¬
about the business outlook are in¬
tify it and support it and argue
dicating a target for these whole¬ for it in terms of a
very sharp
sale
prices that is very much
decline in commodity prices, and
lower.
Down around 110 to 112
if you do not start from a very
in the index.
Obviously the drop
sharp decline in commodity prices
from 149 to 110 or 112 is pretty
you cannot get this very violent
serious.
business
recession
that
people
Senator Milliken:
That would are talking about.
1 ;
take us back to when—to what
That was my point in develop¬
must allow for the un¬
we
Edie:
Mr,
Mr.
this; that
mean
the all-commodity wholesale
index has recently been up
,
....
above the black market level.
go
about the business outlook derive
assume a drastic
in
this
kind
of
if
Now,
expected,
right.
Now, knowing that a tax bill re¬
lates to
that is right.
us
'
economy
ward
V^,v
Byrd: If we shipped a
Senator
gen¬
consideration of the relation
between
peak.
in making plans for the future.
Noy'sir. This includes
Senator Byrd; Then to translate
industrial production.
It includes
manufacturing and mining but not that into the present prosperity of
agricultural except insofar as it is today or industrial level of today,
reflected
in
food
manufacture, it would be about 10% less in
comparable period?
textile manufacture, shoe manu¬ 1948?
Mr. Edie:
To about February
facture, and so on, but does not
Mr. Edie:
No.
Well, it would
include
agricultural products at be about 10% less than the peak, and March of 1946. I think Feb¬
the total index.
World Trade
moderately
thinking these days on what is go¬
ing to happen to commodity prices
and the more pessimistic people
That is right.
the
ture?
bine those individual studies into
and
Edie
price levels
lower than
"violent" drop, and feels that
wholesale index will become
recent
endar '46.
Senator Byrd: That includes
f
Between
Lucas:
tion at the time and it has
proved
to be since then.
Prices did not
,
present levels, but mainly because
of monetary factors, he foresees
-
Senator Lucas:
there.
Bushfield:
Senator
loan is outstanding. The
maintain
he
31
4
prices, Mr.
on
(2627)
not gone above them.
told the Senators that
end of 1948?
Mr. Edie:
for
years.
Bank's
of that loan. Looking
year
Prices
Mr. Edie:
Bank's
$175 billion.
$172 billion
-,
;
,
trade
world
No Drastic Recession!
points lower, rbughly, than the
peak of the last month or two.
purposes
the most
year
is
figure
calendar
stabilized at about 10% below the
it
-
.
about
In
are
and 1948 fiscal year $170 billion.
the
proposed loans are to
are
constructive
and
.
1948
that those
study
us
calendar
1947
probable
need hardly remind you that closely the aims of the Bank and
the
Bank
alone
cannot
revive the policies it pursues to accom¬
world trade; what it can do is to plish those aims, so that their con¬
fidence in it may grow and so
help create conditions favorable
for that revival.
The revival it¬ that they may lend to its support
self will always be dependent on the whole force of their influence,
with advantage to everyone.
a free flow of private credit close-'
for
!
which
and
lent,
Whether the
(b)
in
...
188 to 190,
but allowing for various adjust¬
ments that are likely to take place
in the economy we think that the
most reasonable expectation for
1947
calendar
year
is 180 — 10
ity.)
importance for all of
interested
plby.
the
they
as an annual rate.
I
Loan Policy
,
International -Bank has an impor¬
tant part to
moment
present
advances * will
way ''
made to a borrower successively;
v.
,
observa¬
Edie.
year
corporations
"For
billion.
1947
For
1946,'V
calen¬
1948 cal¬
$20.8 billion. For the
1948 fiscal year
$20.3 billion."
32
THE
(2628)
Thursday, May 15, 194?
COMMERCIAL & FINANCIAL CHRONICLE
Price Advances
of Business
The Banker's View
(Continued from first page)
bricks,
cast-iron pipe,
plumbing
fixtures, cotton and
rayon goods, electric motors, and
so on. Automobiles are being as¬
sembled at a rate close to the
average for the boom year 1929.
lumber,
Agricultural crops and
agricul¬
tural income have been
the largest
The service
rapidly after
industries
in history.
revived
There are now some
the war.
700,000 more
this country
business concerns in
there
than
on
were
V-J Day.
and services have
finding ready markets. The
Both
been
goods
the part of
inclination to buy on
extraordinar¬
ily strong. Cash sales to consumers
bave broken all records and, in
addition, sales on credit are again
at peak levels. Exports of mer¬
the
public has been
foreign countries, a
part of which is on
credit, have risen to more than
to
chandise
substantial
the prewar level. Inven¬
tories of goods in the hands of
manufacturers
and
merchants
double
built up
been
bave
higher than
before.
ever
general price level has
the highest point in a
The
reached
Almost
quarter of
a
century.
without exception, those
a
billion dol¬
decline of some 16
lars in bank loans
to the govern¬
bank holdings of
is,
that
ment,
securities.
government
bank
loans
real
estate owners and consumers has
established a new record in the
history of American banking. Un¬
fortunately, most of this advance
does not represent business im¬
provement; rather it is directly
related
to
current inflationary
pressure. In the first place, the
2 billion dollar
rise in realty loans
during 1946 is a result of the real
estate boom. In the second place,
the increase
in consumer loans
of more than a billion
dollars for the year is a result of
from banks
the
great surge of buying on
the
part of consumers.
In the third
of more than
place, the increase
dollars in
4 billion
and industry"
loans to "commerce
1946 also shows the in¬
fluence of inflationary forces: (1)
Inventories have increased in size
and dollar value, bringing in¬
creased demand for bank loans.
during
(2) The rise in the price of ma¬
equipment and labor has
terials,
brought an increase in bank loans
for working capital requirements.
The
total.
1939
is much less rapid
Export
-
than in recent
Demand
The filling of the gap
between
foreign demand for goods and our
usual rate of exports is a more
complicated problem. Total ex¬
ports have been at a rate more
than
twice
that
the
of
major
demand,
rise
current
months.
the
On
hand, the total of
to business, farmers,
other
the
A
prewar
Food, clothing, machines
and equipment have been among
the major items. Manufacturers of
products which did not sell easily
in
the
domestic
market could,
as
of course, the current
trend of prices. Consumers were
impatient for gods after the war
was over. Their purchasing power
was abundant, but there were not
enough goods to go around. The
OPA proved to be no match for
the
predominating economic
forces. Under these influences, the
mand,
is,
general price level has risen
highest point in 25 years.
to
while they are
focus
distance
ficult to recognize
with
dif¬
Our eyes seem to
us.
better after we get some
careful
But
them.
beyond
ob¬
servation reveals that the present
developed like a
situation
it looks like
like
boom;
Whether
so,
wanted
it
part
a
now
we
banking institutions have
in this boom. Banks
themselves more than
our
had
not
or
find
twice
large,
as
resources,
as
as
total
bank
expansion
measured by
in 1940. This
came
about
largely as a result of government
borrowing from the commercial
banking system. There is no mysstery
involved in the process,
the
When
Federal
from
borrows
Government
commercial
the
banking system, its bonds become
the assets of the banks, and new
with
few
markets
exceptions,
find ready
the
Since
abroad.
war,
exports of
cotton have averaged 100% more
than the typical prewar year 1939;
for
the
same
period,
tobacco
shows
a
gain of 67%; wheat,
200%; meat products, 470%; and
motor trucks and busses, 37%.
Now the question is, how long
will these exports continue? The
extent of needs abroad suggests
our
monthly
average
some
time.
suggests
a
much
shorter period. Imports into this
country are now paying for only
about one-half of our exports. The
other
hand,
advance
brings
gain
brings losses to others
but it also
example, for a landlord here
in Knoxville, Tenn., the monthly
rental income from a five-room
For
apartment in 1940 would have
bought 100 bushels of corn; today,
the
rental
from
this
property
would
corn.
a
on
buy
only
bushels
40
of
Or, again, the annual return
500-dollar Government bond
in 1940 would have
bought
today,
hog;
pound
a
160-
the yield
on
commercial
banks
in
was
the
Causes
of
Boom
of view of
American industry, the causes of
the current boom are quite ob¬
vious. At the close of the war, in¬
the
point
agriculture
were
fill three great
gaps left by the war, in addition
to
their usual
production. The
and
dustry
called
first
to
upon
was
the accumulation of un¬
wants; the second
was
the empty or partly-empty
pipe lies of trade; and the third
filled consumer
products from
abroad in excess of usual pre¬
war amounts of goods exported.
was
the demand for
of
task
The
normal
fill
tion
met
volume
increasing
the
of production to
these
gaps
was
in the rate of advance. It touched
peak of about 115 billions and is
*now
a
little less than 100 billions.
result of the ad¬
vance
in government borrowing
from the commercial banking sys¬
Largely
as
a
have had an extraordin¬
ary increase of liquid assets
in
the hands of the public. These
assets
include currency outside
tem,
we
deposits, both time
(less government and
inter-bank deposits) and redeem¬
able government securities in the
hands of the public. The total of
bank
banks,
and demand
these
assets in 1937 was about 65
billion dollars. This was approxi¬
mately equal to
time
time
the total at the
of the boom in 1929. At the
Harbor,
totalled
attack
the
of
on
Pearl
liquid
assets
something like 85 billion
these
dollars. Since then, the total has
expanded
to
about
225
billions.
Notice that the increase since 1937
has been about 300%.
Since
the
war,
there has been
reversal will be measured in
bankers must
turn
and
causes
rapid descent. Possible
turn in prices are now
of
a
be
ever
on
,
for
espe¬
why
the alert,
(1) As. was mentioned earlier,
recent loan demand was strongly
influenced
by
inflationary de¬
velopments, namely, the real es¬
tate boom, the rise in inventories,
the expansion in consumer bor¬
rowing and the rise in prices
necessitating
larger
working
capital. With a moderate decline
in
business
and
prices,
these
sources of loans will narrow—the
extent
typical of the previous postwar
period, in which a rapid price
ascent was followed by a sudden
years.
outlook
this
of
business, there are, three
cially
important
reasons
tions.
is
in
than
rather
view
weighing 30 pounds.
pattern of the rise in prices
less spec¬
activity
a
business
that
depending on local situa¬
(2) It must be remembered
loans made during a period
general decline in prices will
require greater skill. The men
who have become bank loan of¬
of
the past eight years
experience in making
ficers during
have had no
loans
during
period of general
a
price decline. (3) Present arti¬
ficially low interest rates have
left little margin for risk-taking;
nevertheless, it is the apparent in¬
tent of the credit authorities to
keep rates low.
In
many
respects, the boom in
and the rise in
activity
business
has been
is the record of retail sales.
price advances, this is still an allThe extraordinarily
time record.
high volume of purchases by con¬
the past many months
sumers over
certain
it
makes
supplies
are
that
consumer
replenished
being
ago.
Austria amount¬
ing to 630 millions, and the State
Department's request for 350 mil¬
lions
for
more
general relief.
Private loans are not yet of im¬
and
portant size. The monetary Fund
thus far has received no applica¬
tions for loans. The International
ernment are aware of the trouble
applications
straightening out of the situation.
The government has been bring¬
place
ing pressure to bear on industry
reduce prices, the implication
regular business lending. The time
for Germany and
received
has
Bank
eight countries totalling 2.3
from
billions. At the end of this month,
it will have 700 million dollars
of
capital which may be loaned. Ad¬
ditional funds will be dependent
which
not yet been estab¬
Department of Com¬
market
has
The
lished.
has
merce
loans
that
estimated
this year will total about
dollars, as
compared
with approximately 7 billions last
and gifts
billion
6
But this is only a "working
year.
estimate."
There is
that
dence
now
considerable evi¬
period
the
of easiest
foreign sales is over and that the
tendency
of American
exports
will
be
to
more
resume
normal
proportions. We know that vari¬
ous
countries are trying harder
than ever to conserve their dollar
exchange. For example, in
meet¬
ing her unfavorable balance of
trade, England has found it necessay
to draw on the 3.7 billion
dollar
credit
extended
by
the
United
Government
States
more
rapidly than originally planned.
Although she expected to spread
expected. The fact is that in re¬
weeks the volume of retail
sales has lost its lead over that
the
of last year.
The decline is most
in women's wear,
pronounced
jewelry, toilet goods,
bedspreads,
use
ending
to
use
of the loan
with
1.3
over
she
1951,
billion
a period
has had
dollars during
the first 10 months. In the mean¬
time, England is trying to check
dollar spending on
the part of her
upholstered
furniture,
curtains, small radios, and so on.
people. The recent rise in import
empty pipe lines of trade
ing the cost of cigarettes to the
for the most part, filled up.
present dollar total of inven¬
tories,
manufacturers',
whole¬
salers' and retailers', is estimated
English consumer the equivalent
towels,
The
are,
The
to be about 36 billion
about
100%
total. Even after
mid-1939
allowing for the
price advance, it is
inventories
dollars, or
above the
are
now
obvious that
well
above
duty on American tobacco, mak¬
of
about
move
a
package, was a
in this direction.
suggestion
the
680
House
British
was
Also, the
made last week in
of Commons
Government
that the
reduce
im¬
behind
As
also
manufacturers
Manufacturers
are
in
an
feel
it.
uneasy
position between rising costs and
the necessity for lower prices.
Those
at
the head of our gov¬
price field, but the position
taken is not conducive to an early
in the
to
being th£^ the cause of the
rise is in this area.
sale of debentures,
the
on
rapidly. Once this is accomplished
a
lower volume of sales may be
cent
those of a year
retailers reduce their
orders, wholesalers feel the shock,
including the President's proposal
Turkey amounting
to 400 millions, Hoover's proposal
40-50%
for Greece and
of consumer needs
neighborhood of 5 billion dollars.
In the process of financing gov¬ A new all-time peak was reached
ernment deficits during the dec¬ during the first quarter of this
Department
store dollar
ade of the Thirties, the total in¬ year.
during the quarter were
creased to something like 20 sales
the total for 1940.
billion dollars. Wartime expendi¬ 150% above
making
allowances
for
tures caused a great acceleration After
a
ness
this bond will buy only a runt pig,
The
mean
of
rate
time; but with these prompt
adjustments, the period of busi¬
a
In
to
income receivers, it is true,
Price
that they
will continue for a long
Capacity to pay, on the
prices will
for
prices during the war and post¬
to in¬ have been terminated. The Ex¬ lines mostly filled and with ex¬ war
period were favorable for the
important anti- port-Import Bank, having made port
opportunities
tending
to banking business. But circum¬
inflationary development in the or earmarked 2.7 billion dollars narrow, resistance to current high
stances may not be so kind to U3
bank loan situation since the end in
loans, had only 800 millions of prices on the part of both domestip
in the future. Marginal business¬
of the war has been the decline
additional funds to loan on March and foreign buyers is growing.
of about 3 billion dollars in loans
men will see profits fade as busi¬
31,1947. On the other hand, there Retailers' commitments for the
on
government securities.
are
various proposals for relief, fall are reported to be running ness declines from
the present
undertaken
with speed and enthusiasm by the
The government borrowed American economy. The rate of
heavily
from
the
commercial production speed attained has al¬
banking system during the period ready been pointed out. Perhaps
of the First World War. The total the best general measure of the
for Federal Reserve banks and speed with which the accumula¬
deposits of similar amount come
into being.
in
tacular
dustry. The only
From
Banks' Contribution to Boom
other agency, can best determine
when and how much. Adjustments
attractive
been
has
tions
boom; it behaves
a
boom; it is a boom.
a
price adjustments to
supply-demand conditions as
they develop is the best way out.
The free market, better than any
Prompt
new
period.
who de¬
question now is the extent to appearing. Prices are beginning
sire work have jobs. Wages are Also, cash balances have had to which remaining dollar balances to look "too high." Domestic con¬
highest on record. The boom in be replenished after being re¬ here will be utilized and the vol¬ sumers, for the most part, have
by unexpected
demands ume of additional loans and gifts so increased their holdings of
real estate values has been equal duced
to that of earlier periods in our caused by shortages of materials, which will come from this coun¬ most
"soft"
and
semi-durable
history. Bank loans to agriculture, transportation delays and strikes. try.
goods that delay in making fur¬
industry and trade are larger than (3)
With interest rates being
It is still too early to arrive at ther purchases is now optional
they were at the peak of war maintained at an artificially low an accurate estimate of loans and for
them.
With
accumulated
level,
the
use
of
bank
term-loans
activity. Thus continue the evi¬
consumer
purchases
gifts for this year. On the one deficits in
for
refunding industrial obliga¬
dences of boom conditions.
hand, the Lend-Lease provisions about made up, with trade pipe
Business booms are always
for 1947.
months
the
estimates
their
sharply .reduced
influence on foreign
well as domestic de¬
price
However, the real causes are
found
be
elsewhere.
to
In the first
the fundamental cause of
the
general inflation movement
in this country is, of course, the
government's program of wartime
credit expansion, which brought
a rise of 300% in liquid assets in
public since pre¬
while the production
goods rose only 80%.
the hands of the
of
In
years,
the second
normal times would be good may
not
be
place, it is agri¬
prices which have led
price advance (not industrial
prices), and the government is
still lending support to agricul¬
tural prices. In the third place,
the rise in industrial wages (al¬
cultural
ready about 74%^ since 1939) has
been a major force causing higher
industrial prices. The current rise
in certain industrial wages can,
no
sense,
be
in
interpreted as a
following
loans
a
short,
In
business.
the
banking skill good enough for
war
period is not going to be good
enough for the period of business
ahead of
One of
us.
our
when
passed
since
long
in
policy
banking
aggressive
has
greatest needs is to
greater emphasis upon an
only study loan ap¬
plications and say "Yes" or "No.'"
credit reflects "man's con¬
Bank
fidence in man." The banker must
know his
community and he must
discover
those
firms
having
confidence.
this
basis for this
of
assets
of
bank
are
particularly
importance,
great
when
the
from
good
and
individuals
the
Accomplishments
nature
the
in
good
down-turn
bankers need
place,
war
high level. Loans which in more
cycle
business
to
times
turns
times
less
prosperous.
Thomas E. King & Co.
Formed in Chicago
CHICAGO,
ILL.
—
;
Announce¬
ment is made of the formation oB
Thomas
E.
King
&
Co.,
to
con¬
adjustment measure. - High duct a general investment andli
wages are a stimulant to more
brokerage business by Thomas El.
buying on the part of the recip¬ King, formerly a partner of Hicks;
ient, but they make trouble for & Price, and Ralph M. Bloom,,
the
marginal producer as con¬ formerly a partner of Cayne, Robsumer resistance to higher prices
bins &
Co. The new firm has
price
develops.
taken the quarters formerly occu¬
High prices of building mater¬
ials and high wages, along with
pied by Cayne, Robbins & Co., at
scarcity and inefficiency of labor,
are having a very depressing ef¬
fect on building construction. In
most
sections
of the
country,
firm's personnel, including Roy B.
Sundell and Robert K. Belt, wilS
building costs are 100%
more
than they were in, 1939. Construc¬
tion to meet most urgent building
needs
has
already
been
under¬
taken, and a decline in new con¬
Govern¬
ports of cotton where payment in
ments .economists, *have
already
U. S. dollars is required, i
tracts is now under way.
39 South La Salle and all of
remain with the
The
firm
will
new
thai
firm.
maintain
wire
connections with C. E. de Willers
&
Co., in New York City ancS
Cayne, Robbins & Co., in Cleve¬
land,
Formation of the
new
firm was
previously reported in the "Chon*
icle" of May 8**.
..Volume
Number
16S
THE COMMERCIAL & FINANCIAL CHRONICLE
4594
There is
Some Comments
the
Question:
*Is the Money Supply Too Large?7
on
(Continued from
growth of deposits
on the liability
side, occurred in the ownership of
government
securities
by
the
Banks, and there appeared to be
a
general
assumption
for
reason
deposits
tion
of
It
is
this
that
sharp
in
due to the monetiza-
was
the government debt.
certainly true
that
with
conclusions
minimum
a
of
I believe that the present
reasons.
supply is excessive and that
one factor in causing
inflation.
I do not however be¬
money
the excess is
the
growth
3)
page
lieve that the money
supply is as
important as some authorities, the
late Professor Irving Fisher for
bank
it
have
There
other factors to be con¬
to be able to
increase,
interesting to look at the available
when I
deposits
but it is
ibalance
sheets
corporations
of
in
the
this
50
largest
country and
their total cash on de¬
posit at the year-end in 1936 with
compare
their cash
end
of
deposit at the
on
year-
1946.
Many
facts
contributed
the
to
necessity for corporations to have
larger cash balances, as that 10
period unfolded, than they
thought either prudent or neces¬
sary at the beginning of that dec¬
ide.
One
outstanding
example
was their very
heavy accrued tax
obligations at each year-end; an¬
in
cause
both
the great growth
total tonnage
of
was
their
production
and
the
dollar
value
of production.
cash
corporate balances in¬
flationary? How much of this
porate
cash
cor¬
increase
really rep¬
delay for merely
ordinary renewals and replace¬
ments of equipment, impossible to
procure during this decade?
resents enforced
How
much
of
balances
present
in Bank today by individuals and
corporations is expendable in the
usual
for
of
of the
sense
word, namely,
and how much
commodities,
held, pending investment
it is
decision?
Individuals have the
need
same
prudent desire to be ready for
quarterly income tax payments.
A meticulous
analysis of what
a
of
Banks
the
is
total
for
deposits
in
future
investment
contrasted with being the type
as
of money which is believed to be
burning
hole in people's pock¬
a
ets until
it
is
spent, is obviously
unobtainable.
Similarly, the co¬
lossal growth in
outstanding cir¬
culation cannot all be considered
immediately spendable.
as
are
accurate
no
figures
There
to the
as
amount of currency in safe
deposit
boxes, and the reasons for many
people's desire to own and possess
in their safe deposit boxes
ligation of the government,
able to
vious.
bearer,
To
are
that
pay¬
and ob¬
many
assume
ob¬
an
all
of
the
currency in circulation can be la¬
beled inflationary seems to be ab¬
surd.
Everyone knows in a general
that since 1900, the automo¬
way
bile),
the
radio,
most
electrical
households products, and
literally
thousandsiof articles today in al¬
most universal
into
being
century.
tionship
ume'of
have all
use
during
There
is
business
this
present
direct rela¬
a
between
come
increased
and
the
vol¬
simple
tool,i money,' needed to effectuate
the
manufacture
and
distribution
my mind, all of these subjectshave to be taken into con¬
sideration1.; before .reaching
hasty, conclusion that
supply is too large.
our
any
money
>
Hamilton,
to
your
when
conclusion
he
securities
at
—
good
of in¬
rates
The return on^a 3% laond
feet, give us a pat on the back
our
and say
bums.
Let
"Go ahead little stumbleYou
their
in the Savings
Higher interest
money lie
at 1 lfe %.
Banks
and lower income taxes
rates
needed to create interest in
long-
1947
"Chronicle"
his
March
statement
shown
the
Banks
on
the New York
to
State Chamber of Commerce
13th)
(see
and
in
in
the
April 24th 1946 has
reported
played
part
by
the
in
expanding the money
supply and the same thing can
happen in Canada. Now that the
Canada
nounced
any
ices
such
to
ing the
money supply pumped out
(of necessity) during the war, the
Banks
should
panding the
two
refrain
from
supply
money
governments
take
ex¬
the
as
steps
to
reduce
it.
The Banks should do
this Voluntarily or under pressure
of public opinion.
remark
on
Mr. Parkinson's
1413
page
"Chronicle" issued
1946
on
of
the
March
13th
the effect that the
to
expanding
of
the
Banks
appraise the effect on the
general public welfare of an addi¬
tion to the money supply deserves
attention.
has introduced
I
Mr.
"business is
says
believe
is
people" and he
factor here that
a
not
receiving
nearly
In 1919 aviation
was
new
expanding,
"brave
ideas
for
plentiful and
a
were
world 1919
new
style"
the
world
was
"safe
But Germany was
reparation had to be
paid and the outlook for German
and
bleak.
was
Depressed and
German
youth said
disgruntled
"what is the
for
in
it"
German
world
cannot have
we
and
turned to
leadership.
the
of this fine
use
civilization if
share
will
again
spare
the
problems of
fact
the
ever
men
What
youth
so
for
wrestling
are
problems
if
even
with
achieved unanimity is
and
nothing
adds
the
to
plus
be
to
these
sum
total
lost
Let
knowledge.
will
and
we
and
never
long
Let
reading the
clearly that we
"Chronicle" shows
lot
a
to
learn
before
Hitler
did
Chronicle" of May
new
to
h anged.
the
tripling
of
our
that
of
times
which
dex
of
our
of
40—had
former
68)
the
no
in
effect
same
the
is
to
which
on
prices,
sound
(at
latter
an
in¬
as
the
for
the
We
until
should
of
purpose
the
present
in
fabulous
expense
MONEY AND
0NS Of
Nations
and;
order
and
as
boom de¬
find
to
(j
to make change for their
daily needs. What must we do if
these average people
not
your
I
invitation
to
Dr.
Bowen's thesis
that the present money
supply is
not excessive. This invitation was
given in
issue of May 1st.
space I will present my
your
save
a
to
storm
warnings
condition.
Also
to
degree
a
not
generally recognized our ammu¬
nition
against inflation is used
up.
The Federal Government in
two years has converted a deficit
of - $53.9
billions into what Re¬
publicans estimate to be a surplus
of $4 billions.
Federal contribu¬
tion
to
employment,
in
other
words, has been reduced in two
years by $55 billions.
This
deflationary
pressure
these
Once
cumulative.
not
is
un¬
employed are reabsorbed—as most
of them have been—into private
industry, then budget cuts which
threw them out of work no long¬
exert
deflationary
any.
taxes—for debt re¬
new
or
Federal
the
With
rates
in¬
ammunition
our
arguments Dr. Bow¬
toward a false
these
On
article
tends
of security and a false sense
dangers
security has peculiar
present time.
of
com¬
raise
about spent.
seems
sense
But
Reserve
impotent to
paratively
terest
imposed.-
be
politically difficult
to do either is
en's
pres¬
and either new cuts must be
at the
different thing.
That
is
I
Basically,
HAHN
the
gold stand¬
controlling
both production of money and of
goods by "sound" demand.
Had
the gold standard not been overin,
come
NATIONAL
Dr
Money not spent
nor is it al¬
inflationary threat. What
inflationary
not
is
with
agre.e
Bowen's views.
where
should
L. ALBERT
.
ways an
makes it
its
so
is
combina¬
with
tion
an
money
policy
INCOME
(plus
debt
easy
policy).
If
people
would
see
fit
75
to
i
i
i
of spend¬
ing
and
in¬
vesting—with
other
words,
50
-1
125
indulge in an
orgy
f
|
150
125
i
real
under
i
i
100
tions
100
•
,
v
f
v
'
"
"
M
75
ATION AL
\i-
IT
50
./
7
T
25
"This
acceptable to us.
Dr. L. Albert
i
1 MCOM
/'
LMJIRI mm
a
pol¬
would be able to control inflation
at least to
50
IV
DEPOSIT s
interest
force
1
a
certain degree.
Such
policy would tend to diminish
the
spending
and
investment
a
spread.
AND
1
—
icy, of money
stringency
Hahn
75
*
CURRENCY
J--—•
1,
H. N. Rubtrn
Photo:
!
'
condi¬
boom
.
wish
permanently
With
rates
there
counteracting
to
spend
and
low-
would be
the
no
peoples
invest
their
money—and, incidentally—credits
that could be created through the
address reported
"Chronicle" of April 24th.
present
With
security
abroad, prudence demands we
get ourselves into sound financial
income,
excellent
Conference,
be
in lulling our¬
about
false
-■
What is this glittering civilization
worth if we cannot have our share
in it?" This brings us to Dr. Bos-
a
argu¬
*
is danger
into
inflation.
income,
banking system.
What
is
wrong
with
our
cur¬
system is not just the huge
amount of money in the hand of
rency
experts and planners sit down for
would
that
on
*
up
cyclically, but
quite a
vary
coppers
is
that
out
national
mere
can
national
while the average Americans and
Canadians still carry nickels and
There
selves
have
boom
175
gross
extravagance
day in Govern¬
Corporation spending,
❖
20©
the
of
justified
DOL LARS-
.
high
the
not
and
salaries, hundreds of mil¬
lions being
poured
into United
be
an
the
inadequate
accounts
could
ment.
easy
and
housing and $5,000 houses cost
$10,000 we see $10,000,000 air¬
planes, luxury liners and hotels,
sard's
much
present
our
subsides
not
ard
,
These figures, which
accepted along with his others
our
too
the
as
public refused to buy bonds with
it?.
Almost any "bond" inflation
sound norm, in other words,
5
of
Answer:
are
shows
monetary supply is excessive.
1880
years
index
an
the
year.
rule.
wait
The
between
were
safe
mand
1915—from
of
that
long
excess so
no
duction—must
only at the bottom of de¬
still insist that
Bowen
was
made
production falls off
Cist
there
ity
a
Frank
Dr.
would
and
to
a
yield bonds, but it scarcely
that they do actively want
of money. Sup¬
pose the money supply had been
multiplied by 50 instead of three,
the present excess
sure
rule
a
proves
er
pressions and too little money
only at the peak of booms is not
the
supply
money,
and
only at
depressions
1932
when the
money,
that the
lot more
proves
low
our
also
This
public does not want
our
A
eight
in
of
(in 1919 and 1929) when
national income, it had risen
money
supply
tends
to
triple
prices
he
rise
much
earlier.
banks.
Answer:
booms
re¬
money
shows
Dr.
speculation, either commod¬
(in 1919)
or
stock market
(1929), was rampant.
dis¬
that
continue
income);
That
we
had too little
only at the peaks of our
(2)
arguments are
three.
prove
too
and
money
not to
cent
would
monetary supply rose to 100% of
Co.,
To
so
national
for
His
(1)
money
Accordingly
bottom
(1921
Irving
us
much
too
over-
Dr. Bowen also insists that
from the
national in¬
our
ratio
this
had
we
on
a
startling article,
Money
Suppl y
Too
Large?," in which the author, Dr.
H. R. Bowen,
tells
of
(1). That, during the inflation¬
period between our two wars,
the
worry.
he
trend
ary
1 asks
comment
Trust
to
Bowen's charts show:
Delray Beach, Florida
The
concludes
a
proper
ratio between
and national income at the
money
start,
FRANK CIST
economist
of in¬
be 1%%
prices and wages rose as
money increased. For, as¬
as
u n c
"Is
by
rate
average
have
suming
we
achieve omniscience.
"The
of
80%
to
far
The
would have been
money
com¬
increasing
projecting this
as
fast
be humble because
us
more
more money
and
(3)
ad¬
or,
consideration
have
it
with $167 billions in
money
and $176 billions in in¬
come, exactly what we have.
Answer:
But then you could
that
deserve.
he
by
human values will be accorded the
they
1900
The
come
apply the lessons of
the past and to grasp and solve
the problems of the present and
future
by
icle" of May 13, 1943.)
posit instead of wiping it out by
purchase of
government
bonds
ar¬
only 20%
was
on
that we
next
as
its
article
my
the Gold Standard in the "Chron¬
is proved by the fact that depos¬
itors keep their money on de¬
income, it had risen
equal to 95%
to
immediate
of
(See
we
severe
so
present
reaches the conclusion that today
we
need
an
amount
of
money
collectively be endowed with
the
and
dollar
50%
crease
man's
hope that
us
becomes
more
currency)
1940.
not
which
of
he
civilization,
national
our
encouraging
will
prove
al¬
been
had
the need and want of the country
for the present quantity of money
income, and he produces
figures to show that although in
1870 our money supply (deposits
able
have
we
each
to
excess
depression.
a
it
normally,
have
to
the
the
at
1929, had
operate
never
33
such
as
not
national
How¬
many
such
or
in
to
would
have
is
chesterfields
ment
time.
our
that
such
plex, needs
the necessity
us
cannot
money
exists
and
vances
of
of really knuckling down to solve
Hitler
painfully recent history.
while
Canadians
and
Americans are sleeping on cots
the
Law
Probabilities gives us faith to be¬
lieve that an expanding economy
Today
and
the
argue,
we
In order
that
for
Democracy."
youth
(2)
we
gues
energy
to
diluted
lowed
would supply of
that at curtailed
sure,
am
time
of
excess
speed and stand on the threshold
of the power house of cosmic rays
atomic
I
time.
no
one
beaten
an
have
and
but they do
theory;
question of whether
problems
days. As
supersonic barrier
given
excess
in
was
much -spoken of and written about
because
and
the
restate¬
some
force prices up, and hence beg
an
stage-coach
the
cross
Parkinson
enough attention.
business
debts
that
completely
economy
the
dwarfed
not
special
velocity,
extent
an
demand
prove, nor,
Bowen try
Dr.
of the turnover of goods and serv¬
publicly an¬
policy of reducing the
a
of
not
have
debts and in this way reduc¬
war
ment
an
Governments of the United States
and
and
steam train increased the
wisdom
Mr. Parkinson in his address
March 6th
chance."
go
are
investments.
term
another
get
time
back to the days of the
stage-coach and the sailing ships.
The coming, of the steamboat and
us
after
deducting income tax is pet¬
ty and many people prefer to let
us on
strongly suggest that when our
economists, bankers, Government
Canada
permission
accept
comment-on
To
a
says "The people always are at
perfect liberty to buy government
in
BKONSON McNAIR
With
;
as
argument, suffice to disprove any
rigid
relationship
between
the
quantity of money and general
prices over any long period Of
which
ills, set
may cure our
cre¬
man
control
I
C.
like
his
situation
To
i
before
speak
not
say
©f merchandise.
j
to
Canadian
disagree with Dr. Bowen's
statement in the paragraph just
do
today for larger balances in Bank
•due not only to increased total
living expenses, but also due to
portion
I
"Chronicle" of
In 1936, the aggregate total cash
appearing in 45 of these 50 largest
corporations was $940 MILLION,
and by the end of 1946, that total
for ' the
same
companies
had
grown to $2,333 MILLION.
Are
these
sidered.
terest."
year
other
are
stated
be.
example,
assets had to increase for
again
force which
a
does
but
ates
(2629)
the
sociologist should
public, but the extreme elas¬
human
ticity of the supply of money in
values, without which the best of
plans may be upset. Mr. Parkin¬
general, if and when a strong de¬
son's reference to "public welfare"
is a signpost which should not be
investment
ignored.
introduce
mand of money
1800
*10
'20
'30
*40
*50
'60
*70
'80
'90
1900
'10
*20
'30
'40
*50
velop.
for spending and
purposes
should
de¬
.
j ]•■
(Continued from page 17)
•
Credit
National
faciliter la
pour
Reparation des Dommages causes
la Guerre, and to be guaran¬
pqr
The Borrower: The Credit Na¬
tional is a semi-public corpora¬
tion created in 1919, mainly to
assist in financing the reconstruc¬
tion
and
development
of
the
original capi¬
French economy. Its
tal
subscribed by banks and
was
The stock¬
industrial corporations.
Board of Direc¬
elect its
holders
(subject to veto by the Min¬
ister of Finance). The Board in¬
cludes leading industrialists and
bankers.
The
General Manager
tors
(v^ho is also the Chairman of the
Board),
well
as
are
managers,
of
cree
as two executive
appointed by de¬
France.
Credit National will draw
The
for the import
the loan to pay
on
of
President
the
specific materials and equip¬
ment, in accordance with the spe¬
of
delivered
authorization
cific
Control Of¬
the French Exchange
It
fice.
the counter-
receive
will
by
value in francs of such payments,
the recon¬
struction of the French economy.
and
finance
to
it
use
Justification for the Loan:
The
scrutiny of the ap¬
The Bank's
plication for this loan was guided
by its policies to give first con¬
sideration to the- most urgent re¬
whether
quirements.
struction
for
recon¬
development; to sup¬
or
ply funds for these purposes that
private capital is not now willing
or able to furnish; to insure that
its funds are used productively
and
the pros¬
pects
In this ap¬
proach, the Bank has been faced
satisfy itself
of repayment.
to
on
with two basic issues:
The need for the loan.
(a)
(b) The
prospects of
recovery
^France.
The
first
the
consideration
for the loan.
Loan:
The
the
need
was
This
examined
was
in the light of:
(a)
The
of France
need
financial assistance.
i
(b)
.
The
importance
of
Need
gold and foreign assets at its dis¬
to raise loans abroad.
The official gold and "hard" cur¬
rency holdings were reduced from
the equivalent of $2,614 million
liberation
the
to
about $1,000
million at the end of 1946. In 1946,
a
beginning was made with the
requisitioning
liquidation of
and
French-owned
foreign
balances
In
investments.
and
addition,
liberation, France has
borrowed abroad the equivalent
since
of
its
mainly in the
million,
$2,600
United States.
French
of foreign
exchange from experts; from the
liquidation of private balances and
According
the
estimates,
official
to
income
Ex¬
ments. By 1950, France expects to
equilibrium in the trans¬
actions of the franc area with the
rest of the world.
estimates
the
gap
tween the income and
serious one.,/
In other words,
If the country
is to have the opr
portunity this year to finance im¬
ports essential to the expansion
of domestic production and the
modernization of its industry and
of
Importance
The
Economic
Recovery in France: Because of its
and
productive
France is
capacity,
pivotal in western Eu¬
The economic rehabilitation
will speed the recov¬
equipment
sion in
economic
to
by
tive effect of the
seri¬
cumula¬
was
the
of 1914-18
wars
1939-45; by heavy expendi¬
ture for defense
between the two
Wars and by the low rate
penditure
of
ex¬
the replacement and
on
France
ery of surrounding countries and,
through an expansion in trade, be
world.
First, by reason of an expan¬
production, France w.ll be
able
economy
ously weakened
and of
of
supply part of the needs
countries and to
to
surrounding
of
a market for part of their
exporis. France could do much to
carry forward the process of in¬
dustrial
integration
in
Europe
provide
that is essential if maximum pro¬
duction
and
to
modernization of industrial equip¬
ards
ment in the 1930's.
Continent.,
the
At
time
of
the
country's
liberation, its productive capacity
was,
on
20%
and
its remaining equipment
an
average,
about
are
rising
be
living
achieved
stand¬
on
that
'
Secondly, in contributing to the
rehabilitation of surrounding
countries,
economic
recovery
in
smaller than before the war,
France will indirectly benefit the
much of
rest of the world. Before the war,
in need of
was
ther,
under
replacement. Fur¬
the
occupation,
the
country had been denuded of its
stocks of
raw
materials—its work¬
ing capital. Industrial production
was barely one-third of the pre¬
war
rate and exports—the maip
source of foreign exchange for the
purchase of imports—were virtu¬
i
ally suspended.
The
country
and,
from
in
its
order
thus
faced
produc¬
existing equipment
to
re-create
pros¬
perity, with the modernization of
its equipment and methods. This
involved heavy imports
of ma¬
terials and
ing
the
duction,
equipment and, pend¬
restoration
of
of
cereals
food
and
pro¬
of
nental European imports from all
while its exports totaled
15% of Continental European ex¬
all other countries.
At
present France and other coun¬
tries m Europe depend on Ameri¬
can and other foreign loans and
credits to finance a substantial
proportion of their imports. Equi¬
librium can only be restored by
an
expansion in European exports
on an in¬
and this is conditional
crease
in
The Recovery Prospects of
production
had
been
restored
The
Need
to
Expand
Produc¬
and the volume of exports to 75%.
arises from the fact that exports
This expansion in production and
and
achieved, apart from
efforts, only by heavy
was
program
of
vestment
envisages the in¬
loan
of
first
the
equivalent
While the need for the loan
other
of France
pay
for
means
are
at
the
disposal
s'.ill inadequate
necessary
Wxlling
to
con¬
additional
an
application
Any
new application will be considered
in the light of the funds which
the Bank will then have available
of
amortization
amount
would
the
France
later this year.
French
than
various
the
now
under
during
tol$196,000,000, but
15 years
$18,900
some
four
years
to
imports, its ulti¬
other
loan, projects
at' the
consideration
and
it
further pointed
out that France is already indebt¬
ed to
the outside world to the
equivalent
of
Bank;
This
almost
.
billions.
$3
includes $1.2 billions to
sum
the
is
Export-Import; . $720,000,000
Settlement, Sur¬
for
Lend-Lease
plus-Property^ and North African
accounts; $250,000,000 to the
World Bank; $400,000,000 to the
that the Bank f|nds itself able to UK; and $242,500,000 to Canada;
calcu¬ borrow at lower cost than now an imposing total for France to
lations, to about one-fifth of the expected, there jwould seem to be shoulder. Moreover, it is believed
porate enterprises. This is
alent, according to French
equiv¬
will continue to seek
available nothing to stop France from ask¬
(total do¬ ing for an adjustment of the
mestic production, plus imports, present contract 'as to interest. But
is no
agreement
on this
less exports and maintenance ex¬ there
penditure). It is clear, therefore, matter, and probably the question
is
academic
anyway.
that the successful achievement of
that France
this program will depend mainly
on
the efforts and self-discipline
about the conditions placed by the
estimated net
resources
of
the French people. Of
the re¬
the sale of
will be financed from
foreign assets and loans already
obtained, and one-quarter (4^%)
from new loans and credits.
About
be
used
for
capital
goods, most of which it is said the
delays in
that
likelihood
for
year
one-thi|;d of the present
will
loan
less
not
getting
dollars
billion
than
a
some
time to
a
come.
The investment market in buy¬
ing World Bank bonds will want
to, know
as
much
as
possible
.
Bank
loans
the
on
And
it
can
about
will
want
learn
by it.
all it
Bank's
insurance
Some
made
to
policies.
spokesmen
al¬
the
have asked the Bank this
embarrassing question:
Suppose
ready
interfere with the
deliveries will
that, having sold a large amount
exhaustion <pf this credit of long-term bonds of, say, 25
this year. In a single 12-month years maturity, the World Bank
While the policy of modernizing
period France has spent in the offers investors a 10-year bond?
the French economy adopted by U. S. A. more than $1,000,000,000. What does that do to the security
the Government is an indication
Since France is. not getting all of the earlier issues?
of the will of France to recover,
that it has statecH to the Bank is
What answer was given to this
the goals will not be easy to reach
essential to balance: its interna¬ question the writer has not yet •
and then only by vigorous effort
tional payments iirt9,47, it has the learned.
on the part of the whole nation.
alternative
of
cutting down
Talk
of
limiting
the
World
The proposal to set aside for in¬
planned imports^or using some of Bank's operations to the amount
vestment one-fifth of the coun¬
its
gold stock. ^Indications are of the American and Canadian
try's available resources demands
that it will do thejatter.
France's subscriptions has been discussed,
a degree of high austerity on the
gold stock approximates $1 billion. in these columns on earlier occa¬
part of the French people.
The
Those who have looked
In some quarters the failure of sions.*
program assumes a volume of im¬
port of coal and other materials the World Bank tf obtain France's upon such limitation as desirable
that may not be forthcoming in agreement to inclusion in the loan are now commencing to question
full. The steel production target contract of a strong clause gov¬ the value of including the Cana¬
for
1947
has
already been re¬ erning supervision! is regarded as dian liability, in view of the de-;
terioration of Canada's balancea defeat for one Important "safe¬
duced.
guard" of the Bank repeatedly of-payments position.
The
to
Need
Arrest
Inflation:
rapid
and reassuringly
^described to the
Government in i's Congress and the public at the
National Recovery
Plan, recog¬ time of the Bretfon Woods legis¬
Since
the—text
of the
nizes the need for the restoration lation.
of confidence in the country's fi¬ French loan contract has not been
nances.
It
also
recognizes
that made public, thi^commentator"
firmness is necessary to face the is under a handicap*. However* he
problem squarely, and that, psy¬ has been told that the "weak
chologically, the most important clause" in the French contract
point of attack is the national here under discussion merely calls
The
French
oh,information to
budget. Last year the current ex¬
penditure of the French Govern¬ the Bank—much as do similar
ment, estimated at 573,000 mil¬ clauses in Export-Import Bank
for
lion
francs
ceeded
($1,285 million). The ordi¬
francs
nary
der
($4,815 million), ex¬
by 153,000 million
revenue
budget for 1947 has been un¬
consideration
and
months
stated
for,
several
expects
to
of securing anything like
one-fifth of the national resources
way
of investment would
seriously increased.
Bank,
the
B
a
rfk
management
sought from the fFrench negotia¬
tors: access to Mjj, detailed in¬
formation whenever desired and
referring
,
French
The
only
to
uncertainties facing France,
of- improving the
coun-r
loan of the World
Bjank,.. like the jearlier \ ExportImport loan, is supposed to carry
out
five-yeejr reconstruction
the
development plan popularly
known as the "Monnet Plan." Not
and
everyone
the difficulties of expanding pro¬
duction,
files not permit
contracts—and
what
to go into France and "look at
balance the books."
|
!
realizes
Doubt Expressed Over Purposes
that, unless the budget is -bal¬
anced, the lack of confidence in
the country's finances would con-'
tinue and the difficulties in the
of the
submission
the Government has
that it
it. The Government fuljy
economic matters, is fully aware
tion:
internal
The
The
France
to about 90% of the level of 1938
exports
and
production targets.
be
By the end of 1946, the volume
be
.
Significance of French Loan
for purpose
production.
other
foods.
'?
exports of the rest of the world,
and supplied 26% of the imports.
At the same time, French imports
were equivalent to 17% of Conti¬
perts to
was
with the task of restoring
tion
ip 1938, Continental Europe im¬
ported approximately 32%. of the
sources,
it; will
sider
from
proposed in¬ French already hffit fpresightedly
France needs vestment it is contemplated* that ordered in advance of the loan's
of $250 million nearly
three-quarters
(11JA%) signing. There is. therefore little
beneficial to the, rest of the
essential
loan,
maining 16% of the
at its disposal for the pur¬
chase and import of materials and
French
been
prepared to make any commitments with regard to a further
for domestic utilization
of
be¬
expenditure
of
foreign
exchange
during
1947-49 are, of course, based on a
series of assumptions that may be
modified
by
actual experience.
But the
gap
exists and it is a
The
means
The
has
now
achieved. The plantfor the mod¬
for lending and of the progress
wealth, thus
ernization of th& country's indus¬ made in
carrying out the French
improving the standard of living
tries and agriculture is
further economic and recovery program.
and, by increasing exports, re¬
storing equilibrium to the French
balance of payments.
Although
the program
fixes
definite production targets for the
(Continued from
f' 5 (Continued
from page
page 17)
17)
major industries—the level of na¬
tional production is to be raised country to country. It" is, however, current imports.Both because of
France's
internal political situa¬
to the 1938 level this year and a matter which touches on prestige
one
therefore -delicate
to tion and on economic grounds the
30% above that level by 1950—it and
French loan is by that observer
^
may
be regarded
as
a
policy handle,
Under constant annuity, interest described as decidedly more risky
rather than as a rigid series of
invest¬
held foreign balances and
restore
{
duction of per capita
is expected to fall
rope.
rehabilitation.
evidence of the will of the French
million during the because of the five year period
1947-50. Of the total, of grace and the fact that the
below the expenditures
amortization
is i graduated,
on im¬ about $800 million is destined for
the
ports of essential goods and serv¬ investment in oversaas territories. burden on Frarfce will be only
ices by $540 million in 1947, $428 As much as 84% of this proposed $156,000,000.
Amortization pay¬
million in 1948 and $198 million investment
expenditure
is ex¬ ments start only) on Nov. 1, 1952.
The Bank's interest charges to
in 1949. Even these figures as¬
pected to come from domestic re¬
sume
the
liquidation
of
the sources—that is, from the savings borrowers depending on what the
greater part of declared privately of the French people and of cor¬ Bank itself must pay, assuming
size
Foreign
success J'
siderable
achieve
existing loans and from
ceeds of
other sources,
the
to
Its ultimate objective is to
an
increase in the pro¬
omy,
investments abroad; from the pro¬
change: France's need for the loan
arises directly from the still inad¬
equate recovery of its exports and
from the insufficiency r of other
4
was
posal and
at
the result of
the
Premier Plan cle Modernisation et Where France has had the oppor¬
Equipment adopted by the French tunity to speed recovery, in the
Government in January, 1947, is rehabilitation of transport' after
designed to rally all classes of the liberation in the expansion of the
French people in a common ef fort production
of I coal,
electricity,
to rehabilitate the French econ¬ textiles and otljer products, con¬
agriculture.
in France.
covery
France's
-
for
•
of Europe of economic re¬
rest
country
the
compelled to draw heavily on the
the proposed loan
for
Need
exchange
foreign
the
Hence,
ports,
are
developments in the past people to recover which, in the
thirty years and cannot be over¬ final analysis, is the jusuficat.on
the present Government's poltey
:
come
in a few years. Some of the for the loan.
, •
*•<"V
of economic rehabilitation^ The
The President of the Bank has
pre-requisite of recovery is ex¬ Factors impeding recovery, such
stated to the French authorities
as
the
lew
level
of
coal
imports,
pansion of production.
The
Rapport General sur le are beyond the 'control of France. that, although the Bank is not
purchase of necessary im¬
for the
be served only These difficulties
in carrying out
_
of essential materials and
equipment. Exports, though increasing, have fallen far snort of
imports
providing
by the Republic of France.
teed
-
mate purpose will
if France succeeds
World Bank Grants First Loan to France
j
Thursday, May 15, 1947
FINANCIAL CHRONICLE
THE COMMERCIAL &
34
face
scribes
it
"a
facade,"
meant
mainly for ■> American c consump¬
tion, and states that the World
Rank loan signed this month, and
the next' loan to . fiance perhaps
balanceordinary
Bank is to
this
in
role
its first
year! Nor was it expected
that its first loan would be made
only. 21 months after the end of
the war with Japan.
Some peo¬
saying it is a case of "too
late";' and that this
Administration is how
—as in Under Secretary of State
Dean
Acheson's Mississippi ad¬
dress
of
May
8 — laying
the
ple
are
little and too
is why the
for
groundwork
"Neo-Lend-
Lease," Lend-Lease in peacetime.
Tpey are saying, as the Congress
the
Greek-Turkish ( loan
passes
Doctrine*
that:
States faces a world;
and cements the Truman
into American official policy,
the
United
crisis more'
economic and political
critical than the situation on VE-
finance3it
Day, and will have to'
than
rather
alone,
World Bank.
here tikes that plan at
Orte observer de¬
as
all
case,
any
smaller
value.
finances and of balancing
later this year ar€ simply
the accounts with foreign coun¬
tries in the present circumstances. ol-payments financing of
try's
signs indicate
play a much
postwar re¬
covery period than the $3 to $5
billions which many at Brettori
Woods thought it would lend in
In
that the
•
"Chronicle"
*See
through
April
3,
the
•/>'
■
1947,
p.
5,
8, r. 9.
Also compare dis¬
in the May. 1947 letter of the
National City Bank of New York, p. 58,
and
May
cission
col.
:
l.
•
With
also
in
Letter
reference
irt
guards
on
to
incorporating
sate*
Bank's loans, see
City Bank
ppl 57-8 the discussion headed
the
the
"Protection
World
same
for
National
the Investor,"
Volume 165
Number
4594
THE COMMERCIAL & FINANCIAL CHRONICLE
portfolios
and Bank Investments
*"•
(Continued ^rom page 11)Reserve -'Act created for the
first time % Board which was en¬
trusted with
eral
discretionary
over
powers
credit and charged with
sponsibility
tionary
to
these
use
re¬
discre¬
powers for the broad wel¬
fare of the nation.
From that
time on,
money management had
flexibility.
It depended, not sim¬
ply upon the general framework
of
banking laws and regulations,
but upon the changing discretion¬
ary policies of the Federal Re¬
serve
System.
During the 23 peacetime
from
the
down
of
end
to
World
years
War
I
involvement
our
in
World
War II, the avowed over¬
objective of Federal Reserve
all
monetary policy
was
to the economic
well-being of the
United
The
States.
Board
serve
to contribute
Federal
at
was
all
Re¬
times
at¬
tempting, sometimes ineffectively,
be
to
but nevertheless
sure,
tempting to regulate the
of bank
bank
the
and
credit
needs
the
in
of
availability
accordance
the
of
with
economy
as
Reserve
Money
Since
Has Altered
Management
of money management has
been revolutionized;• . i J/ <
.
'
j First, the huge
expansion of the
that Treasury
financing policies now inevitably
:
means
major influence1 upon credit
conditions and interest rates. Moiietary. management is no -longer
the exclusive domain of the Fed-
eral Reserve
•
.
Board nor
for many years to-come.
be
can- it
{Secondly, the cost of the carry¬
ing charges on1 the public debt has
■
?
increased to
year.
-
roughly $5 billion
better
Whether-Tor
*
or
a
for
this fact is bound to have
worse,
from
Let
therefore,
that
bankers and
officials
Board
of
the
the
of
that': we'»are
Reserve.
Federal
the
at
moment,
private
a
are
we
assume
-
and
ficials
for
forget
billion
consists
which
demand.
on
also
Let
charges
billion
a
year.
about the proposi¬
should
First, what
is little
its
possibili¬
inflationary
reduced
any
For
thing,
one
potential did not
despite the fact
1946
in
know that
we
but
from
rates
indication
as
incentive
yet of
to
save.
of $50 billion of U. S. Sav¬
ings Bonds which are, for alfprac¬
holders
Bonds were permitted to decline
appreciably. We can be quite sure,
however, that the monetary au¬
thorities are not eager to find out
what would happen.
;
/.As
result of these three
a
revo¬
lutionary
changes, low
interest
rates for Treasury borrowing have
become the dominant factor
now
in monetary
management, replac¬
ing the former primary objective
economic
of
welfare.
From
the
standpoint of the Washington pol¬
icy makers today, the public debt
is the outstanding consideration in
the
determination
of
monetary
policy.
Chances of Change in
•*
But
this,
entire
of
picture.
chances that
a
course,
possibility
might possibly
that
be
this
trend
reversed
at
future date?
some
short, as officials of the
Treasury in 1947 or in 1950 or in
1955, whether
our
a year
a year,
must manage
we
than
and a
the
Federal
have
interest cost is
only
or
a
paltry
whether the debt
is $250 billion
or
may
toward
rates?
There ;are,
those who argue that
monetary policy should be di¬
rected toward reducing
the in¬
flated money supply. Such a pol¬
icy would mean abandonment, or
at least .modification, of the pres¬
ent low interest rate policy.
It is
also,,contended that
rates
may in
other serious
cifically
low
the long
interest
run
consequences,
have
spe¬
the
possible destruction
of the incentive to save.
Unquestionably
to
some
these
lem,
of
the
critics.
there
is
merit
points
made by
practical prob¬
from the stand¬
The
however,
point of bank investment policy,
is
whether
these
arguments
Washington
will
wish
they have moved in
onstration
rection
monetary authorities
of
the
of the
interes
in the volume of mopeyriias often «ates-and bond prices*Despite an
been largely a result, not a causae
'Unprecedented expansion of Treas
tive
know,that =_the/ehange-,
we
powers
over
factor.
cash.
v-
:...
....
.«'
r;
Bank's Investment
As officials of the Treasury De¬
In
addition,
Treasury officials
as
rupon-"
Policy
the assumption that interest
would not be inclmed to 'think' rates-are
we
1947
model
our
new
over
points
a
Old.
of
of a number of
within the short pe¬
and
long
over
a
the
likely to be substantially
so-called
terest rates and without affecting
the interest charges on the
public
t i
facts of life
as
total
can
liquid
be
of
assets
reduced.
the
we
public
Merely to shift
Government securities from banks
to non-bank
investors, thereby-reduping bank deposits, might have
comparatively little meaning with
respect to the potential threat of
inflation.
Now the only way whereby to¬
tal
liquid
tionary
assets,
the
potential,
can
infla¬
total
effec¬
be
tively reduced is by reducing the
public debt. As Treasury officials,
we
would
of
the
certainly urge reduction
debt, especially at
time
a
like the present when business
booming.
But
Washington, D. C.
of
that
debt will be
best.
at
would
we
is
of
would also
-
the reduction of the
a
very
In
conclude
bound
to
gradual
other
of
remain
that
the
proc¬
words,
the
public
and
Section,
Re¬
of
Department
and
Social
Institu-
Princeton
University,
Princeton, N. J.—Paper—75c.
o n
s,
•
.)
Depreciation
Policy
Postwar Price Level
and
the
Machinery
Institute, 120
South LaSalle Street, Chicago 3,
111.—Paper—25c
(lower rate on
quantity orders),
—
and Allied Products
Emil Schram
Urges
Participation in
N. Y. Fund Campaign
Speaking before
to rise could be
an
effective
means
of
preventing bond prices from
rising or of causing the market
reasons
as
days of
profits in the bond portfolio
gone. The days of the import¬
easy
of income from investments
erg,
here and will remain with
for
a
us
long time. The reduction of
income
resulting
from
taking
profits will be increasingly diffi¬
to
replace
in the
future.
Generally speaking, profit taking
cult
in
Governments
fined
to
issues
should
due
be
con¬
within
five
to believe that the author¬
To summarize
we
total
are
large for many
of New
leaders,
Eipil
President of the New
financial
Schram,
a group
.
York
Wall Street in supporting previous
campaigns
of
the
Greater
New
York
Fund," Mr. Schram said. "I
always felt well compen¬
sated for any help I have been
able to give in the Fund's cam¬
paigns.
It is a great satisfaction
to support an organization which
in turn benefits 423 agencies and
have
institutions
which
serve
our
en¬
of
the
tire community."
Speaking
Fund's
10th
which is
as
I
leader
Annual
Campaign
underway, Mr. War^
burg urged full support of the
Fund
by business organizations
and
briefly: We have
now
employee
T.
Jerrold
Clark,
Dodge
groups.
Bryce,
partner,
& Co., who heads
the most impor¬ the Greater New York Fund's
tant factor to consider in apprais¬
committee for the solicitation of
ing the outlook for interest rates
Manhattan exchanges was a guest
and the bond market.
Monetary at the luncheon. James F.
Burns,'
and fiscal policies also directly af¬
Jr., partner of Harris, Upham &
fect bank deposits, bank invest¬
Co., and President of the Asso-r
ments and bank earnings.
Mone¬
ciation of Stock Exchange firms
tary management as such is not also attended the luncheon. Mr.
seen
that
monetary management
has today become
but
new
the
character
of
tary management has been
years.
York
the
mone¬
Burns heads the Fund's Stock Ex¬
revo¬
change
Solicitation
Committee,
Alexander C. Nagle, President of
Thirdly, since income from in¬
years. The tremendous magnitude
vestments will remain important,
the First National Bank of the
of the public debt and of the in¬
many bankers should
today be
City of New York, is Chairman
terest charges on that debt are
for the entire field of finance and
giving careful thought not only to
bound to loom large in the think¬
insurance in Manhattan.
'
their present earnings position but
ing of the money managers for
also to what the future earnings
In its 1947 campaign, the Fund
years to come. These facts, there¬
seeks
at
least
position of their institutions will
$6,000,000 from New
be .several years from now. If in¬ fore, should loom large in our own York business concerns and em¬
lutionized during the past several
terest
rates
remain
at
present thinking in formulating the in¬ ployee groups, including organ-?
This amount is the
levels, income from securities for vestment policies of our institu¬ ized labor.
banks will tend
many
to
decline
business community's share of the
tions.
$32,300,000
their present holdings mature
and as reinvestment is made at
as
realize
ess
residents
as
Survivors,
Stock
Exchange, May 6
pointed out that "contributors tq
foregoing relate to the Greater New York Fund can
over-all,
long-range investment be assured that their
gifts will be
plans.
What about the nearer
equitably distributed among local,
term outlook for the Government
hospitals,
health
and
welfare
bond market?
We have all heard
agencies."
J /
considerable discussion about the
Mr. Schram was the principal
proposed "defrosting
of rates on
speaker at
a
luncheon at the
Treasury
bills, and certificates,
Bankers Club, 120 Broadway, atf
Many persons believe that the
tended by members of the Fund's
rate on Treasury bills may be un¬
committee
for
solicitation
of
pegged sometime in the near fu¬
member firms of the Stock Ex¬
ture but it is not generally ex¬
change. Maynard C. Ivison, part¬
pected that the unpegging of the
ner in Abbott,
Proctor & Paine,
bill rate alone would have any
Chairman of the Committee, pre¬
appreciable effect upon the mar¬
sided at the meeting.
Frederick
ket.
M.
Warburg, partner in Kuhnj
Unpegging the certificate rate Loeb & Company, who is Cam¬
would be something else again.
paign Chairman, also spoke.
'>
Permitting the rate on certificates
"I am proud of the record of
All
sale or redemption. The tot^l in¬
they exist today.
ities do not wish to see any sub¬
flationary
potential
should
be
Secondly, now that income from
stantial
decline
in the market.
thought of in terms of the public's securities comprises such an im¬
holdings of total liquid assets, in¬ portant part of the earnings of The chances are that if the certifi¬
cate rate is eventually permitted
cluding Government securities as the average bank, the banker
well as currency and bank de¬ must today, think of investments to rise, the monetary authorities
will proceed with great caution in
posits.
primarily in terms of income, not
in terms of market Quotations or order to avoid causing any major
unsettlement of the market.
Shifting of Liquid Assets •
price appreciation. The
problem, therefore,
and
List
Unemployment,
on
Insurance—Industrial
Economics
range
even
Age
Health
streamlined
Security—Selected
References
lations
money
manage¬
ment, we have seen that the Gov¬
ernment bond market can fluctu¬
ate
Social
of
un¬
inflationary-po¬ higher within the next few years.
tential
as
consisting simply" of Executive concentration of the in¬ to decline. The events of the past
bank deposits. We would be very vestment portfolio of the average month or so suggest that the mon¬
much aware that holdings of Gov¬ bank in short-term maturities is etary authorities do not wish to
see
the market run away on the
ernment
securities
are
readily unnecessary and is not warranted
by the economic and political up-side.
But there are also good
convertible into cash either
of
bankers
with
Union
,
Moreover,
.
that there have 'been- periodsjwhery. s W^JdTwMe phenomenon.
these. two. factors have moyed^m ^•Moreover, the past several years
opposite direcUons.H Even^y^en' "have1 provided a convincing dem¬
assets
to
even
occur.
in
Odell—Circu¬
13, Industrial Relations Sec¬
tion, California Institute of Tech¬
nology, Pasadena 4, Calif.—Paper
—Single
copies
complimentary,
quantity prices on request.
.
•-
will
but
should
.
,
liquid
economists,
stitutions in the event that the
Clauses
lar
investment
an
position which might conceivably
jeopardize the safety of their in¬
fluctuate
/,
to abandon a policy of low inter¬
,
someday
seem,: convincing
and
compelling, not just to certain
and
rates definitely
They cannot for
afford
Disciplinary
Contracts—Francis
.
the
Board
interest
moment
maturity can
fairly wide range
endangering the Treas¬
L-«It .would seem, then, that it is
Thighly*T probable that no adminis¬ ury's ability to borrow at low in¬
ance
attitude
different
a
money
Reserve
a
dangers of low interest medium
the
rates?
partment, would be whether. the
different Chairman of
ury
Bank¬
measly $200 billion, would riod of a few months time.
It is
rather strongly in¬ important to bear in mind that
clined to see the virtues rather prices of bank-eligible bonds of
is not the
are
number of years from now.
a
current income i. and tration-in
new
The
President,
assur¬
not,, be
we
are
What
with absolute
what interest rates will be a
ance
expected
In
would view it in the Treasury De¬
different
a
foresee
can
borrowing,. only to a
It is clear that every bank
small extent from sayings.,There est rates for many years to come. debt.
should
plan to hold
sufficient
wasno,,.mad, rush to exchange It, is significant that every major
short-term securities to provide
money for goods.
central J?ank in the world today is
;: T
for any demands for funds that
Secondly, we know*that?t&e. re¬ ^ilawlrtg-a low interest rate pol¬
may arise.
lationship
between - commodity icy. '*i»j^money is not simply a
prices and the volume of money4s X^ag^n&Jfcnpy 0f certain Washing¬
Near Term Outlook for
it is a universal
by no means automatic. Wetknow. ton^ officials;
Government Bonds
Policy
different Secretary of the Treas¬
level/.
that
money supply may not be as cru—
vFkrst, a bank's investment pol¬
cial as some contend? ,
icy today should not be based
the
present
near
obviously, cannot bet too heav¬
of
what
or
Finally, although interest rates
will probably remain low, no one
will remain low.
the
•
main at
ily
savings bonds would do if
prices
of
marketable
Treasury
knows
one
these
ficient medium and long-term se¬
curities
to protect
their future
ers,
partment, therefore, might ;we-h©£- 52iWhat do all of these considera¬
be tempted to believe that- the1 in¬ tions add up to in terms of bank
flationary dangers inherent in-the divestment policies?
tical purposes, demand Obligations
of the Treasury Department; "No
in¬
banks,
officials, we might be rather
impressed by this fact and per¬
haps not too much worried about
ury
!
owners
Other
destroy earnings position against the prob¬
Well, ability that interest rates will.re¬
may
We know, that
iU^^feorfowing, interest rates are
tionary developments in.thiseoun-? raeetttaliyv. lower today than before
try have usually been financed by* dkeiwar. There can be little doubt
new borrowing .on -the spobat-tte
tas^iadhe ability of the monetary
Thirdly', millions of individuals
time, - not;. by accumulated rridle; ^authorities fo keep rates low.
throughout the country are now
an enormous
influence'upon' the
formulation-- of ""monetary policy
now and in the future.
v '! :;:
investment
of
decline.
to
without
expenditures\ canie
private
chiefly, from
tendency
Don't you imagine that, as Treas¬
only
ties?
no
or
$4 billion
reduce
the
come
ings of the people have continued
to increase at a rapid rate. There
be forced
in order to
a
know that interest rates have
$5 billion
contract
the
low now for a considerable
number of years and yet the sav¬
tion that the money supply
to
be
permit
been
interest
this debt amount'to $5
on
interest
we
in mind
annual
to
people's incentive to save?
Bonds
practically
bear
us
the
that
will
Interest Rates
of Savings
redeemable
are
this
were
What about the possibility that
Depart¬
Treasury
we
are
relatively small.
Certain banks, of course, may ex¬
perience
sufficient
increase
in
their income from loans to offset
however, should plan to hold suf¬
ment. In other
words, let us.look
at this problem through the eyes
of those who are charged with re¬
sponsibility for managing a debt
of some $250 billion of which $50
that
if
even
rise in interest rates.
time .of¬
same
and
years
case
low
hs
ting it off. Prices rose,, to be sure
1942, however; the char¬
public debt
ap¬
we
that conditions were ideal for set¬
acter
are^a
Unless
problem
>
rhetoric.
explode
Federal
•
the
this inflationary
■
■
authorities, the men
controls.
this
standpoint, we are in danger of
being led astray by wishful think¬
ing or by flights of oratorical
a
whole.
t
.
the
proach
at¬
volume
credit, the level of inter¬
rates
est
)he monetary
at
35
(2631)
lower
reiving
This
yields than they are reon their present holdings.
consideration
applies
espe¬
With Richey and
SANTA
ford
O.
CRUZ,
the
ities
Pacific Avenue.
to
banks
whose
loan
Baikie
CALIF.—Clif¬
Kelly has been added to
cially to banks which are heavily
concentrated in short-term matur¬
and
needed
in
contribu¬
tions to meet the current operat¬
staff
of
Richey & Baike,
60
ing expenses of the 423 hospitals,
health and welfare agencies which
share in the Fund.
These agen¬
cies
annually
serve
000 New Yorkers
to
race
or
creed.
some
2,700,4
without regard
36
THE COMMERCIAL & FINANCIAL
(2632)
industrial
(Continued from first page)
with.
There
replace
tion was reduced to
i
still
arc
be
approximately
to
sit
and
down
problems
The
discuss
pending
inttead of
peacefully
plunging the country
into
a
pe¬
of its former
new
increase in circulation
probably
was
Gutt
more
rapid than Mr.
expected originally.
But, at
this
moment, it was impossible to
Today, the Belgian market is balance the budget without ask¬
abundantly
supplied
with
all ing credits, from the Bank of Bel¬
kinds of goods,* tne rood situation gium. The 1945 budget had a def¬
is almost back to normal and gov¬ icit of Bfrs. 34,719,000,000 and the
ernment rationing is increasingly debt of the Belgian State toward
abolished. Production in many in¬ the National Bank has now run
dustries exceeds the prewar level up to Bfrs. 48,000,000,000. The total
considerably,
especially
in
the public debt of the Belgian State
riod
social
of
iron
conflicts.
steel
and
industry,- in
the
textile industries and in the chem¬
ical
plants.
trical
Production
is
power
of
one-third
elec¬
higher
than prewar. On the other hand,
coal production is 10 to 15% be¬
hind prewar, the output in con¬
struction
materials
is
still
one
of
strict government con¬
level, to trols overproduction, foreign trade
be increased successively ana to and distribution of short supplies,
be stabilized at three-quarters of our aim had to be the liberation
one-fourth
shortages of all kmas in ^elgium,
is
the
dangerous upward
trend of prices, jeopardizing Bel¬ the October 1944 level. Since Jan¬
gian exports, there is the lowering uary 1946 Belgian banknote circu¬
has
fluctuated
around
of efficiency on part of the Bel¬ lation
However,
gian worker.- But there is also Bfrs. 71-72,000,000,000.
deep understanding of economic due to the extreme shortage of
problems on part of Belgian Gov¬ goods at the moment of the lib¬
ernment
officials, there is good eration, Belgian prices have not
will on part of the political parties reacted in the sense expected by
to collaborate for the good of the the financial experts. The Belgian
country, there is mucn common price level has remained high and
now
again more than three
sense
on
the part of employers is
and workers' unions, wno prefer times as high as before the war.
there
«
increased from 1938: Bfrs. 56,500,-
000,000 to Feb. 1947: Bfrs. 260,600,000,000.
debt
for
However, the per capita
Belgium is much lower
than that of the United States and
Britain.
Great
Budget
Ordinary
Balanced
.
<
.
.
.
.
1
.
*
standstill
,
and
goods
insuf¬
were
ex-
tremely short but banknote circu¬
lation, due to the
expenses of the
occupation power, had climbed uo
from
Bfrs.
22,000,000,000
1936-1933
average
000,000,000
at
October 1944.
three
times
the
to
in
Bfrs.
the
101,-
beginning
Prices
were
of
almost
high as before the
the wage index was
as
many
months
count
of
the
"free
now
and
is
20%
financial
on
rapidly dis¬
new
proof that
for
means
stroying the "black market"
sound
dis¬
the
approximately
market"
appearing. This is
the only efficient
policy
de¬
are
and
a
an
abundant supply of goods.
Belgium's
war, while
onl.y at 182 (1938 = 103),.
mestic
market.
We
succeeded
holding the line against
demands
in
new wage
by carrying out
a
successful
financial
the time of
the
Belgium,
liberation, was
but
Mr. Gutt's
it
has
even
'he
opponents
of
policy admit today that
been
an
almost
complete
The Present
over-
ican machines of all types.
Housing Picture
There
indication
is
to Bfrs.
-
that
these
9-10,000,000,000. The Min¬
ister of Finance and his collabora¬
believe
that
either
it
will
to
send
not
be
part
of
necessary
mestic goods."
The Belgian policy of relaxation
of government controls over the
the Belgian gold stock abroad nor
to ask for new foreign credits. To
the deficit, Belgium will use
cover
remainder
the
credit which
to
of
100,000,000
Canadian
dollars,
Canadian
will realize
and
tne
originally amounted
of the
some
Bel¬
gian assets abroad.
The Export Froblem
balance
the
cover
of
The
influences
deficit
payments
of
the
cannot
be
exports and imports. The problem
Belgian price level is of
importance for the eco¬
future
of
the
country.
extreme
nomic
Prices have gone
up
markedly in
recent months and the retail,
at
a
housing insurance applica¬
a
level
several
times
higher than the biggest previous
months in FHA history.
In the
last
quarter, FHA had its largest
of business in history—•
volume
and it
interesting to note that
was
whereas
rental
price
applica¬
housing
about 5%
run
of the total volume they
10%
constitute
about
of
third
a
the total.
">
I
•
Problems That Confront Us
In
speaking with
optim¬
some
outlook
immediate
the
about
for housing
construction, I am not
the
very
serious
problems that confront us.The central problem is the
high
Basically, this is
not a new problem; within our
memory; new housing has always
cost of housing.
too
cost
much
in
of
terms
pur¬
chasing power of a considerable
while wages have reached almost proportion
of
the
American
the same level.
This means that people.
index
is
now
333
(1938 = 100)
,
production costs for the Belgian
industry have been increasing sub¬
stantially,
ports at
world
-
•
a
bringing Belgian
disadvantage on
ex¬
the
markets.
The
Of
future
Belgium's
-
eco¬
will probably be de¬
termined by the outcome of this
internal
struggle
for
bringing
nomic policy
down
prices and wages. The coun¬
try's leading economists, govern¬
ment
officials
Today,
more
housing costs
out
and
industrialists
hope that this may be achieved by
are
even
stated
our
of
is good
think there
I
economy.
to
with
This is primarily the
the shortages and
of
a
reconversion
objectives.
outgrowth
reason
line
of
dislocations
expect that by the lat¬
ter part of this year,
many £,of
these abnormal pressures on costs
will
been washed
have
restoration
materials
of
and
The
out.
normal
a
flow
of normal
time in contrast to the
of
building
costly de¬
minimum of government lays experienced so widely in
controls and by appealing to the 1946 would in themselves have an
effect
in
lowering
natural
forces
of the
country's appreciable
economy.
Although a few of the building costs.
using
a
controls
government
on
basic
normal
fashion,
unrestricted
by
The government planning and super¬
vision.
basic problem of the Belgian coal
The Belgians,
situation is the shortage of labor
it is true, have
and the reduction in the individual also their 10-Year Plan, foresee¬
Coal min¬
increase in
to
minimizing
satisfactory, if not brilliant.
output of the worker.
tions
ing exports and toward balancing
goods will be maintained for some
the
Belgian
Government
critical fuel situation time,
wants the market to operate in a
the
entire
industrial
picture which, otherwise, would be
rental
ism
the
an
...
continued indefinitely. Belgian ef¬
forts are directed toward increas¬
of
allocation
There has been
.
now
However, the policy of disposing
of Belgian investments abroad in
to
the
made.
or
order
with
cordance
tions had heretofore
duction is only 90% of normal to¬
day.
ing
ing investments which amount to
Of
importance will be
to normal competition
housing market.
I think
it is a very healthy sign that there
is already evidence of increasing
the
in
equal
return
the
resistance
consumer
current
to
high prices, not only for existing
houses but also in scattered cases
for
housing. It is likewise a
healthy sign that many of
housing indus¬
new
very
the
leaders of the
373,000,000,000 during a tenperiod.
According to this try are well aware of the danger
of pricing themselves''out' Of the
blueprint, Bfrs. 140,000,000,000 will
be
invested
in
transportation market and of the importance of
equipment, Bfrs. 14,000,000,000 in establishing and maintaining ;the
lowest prices commensurate With
the electrical industry, Bfrs. 18,Bfrs.
year
000,000,000
in
coal
mining,
Bfrs.
9,500,000,000 in the heavy indus¬
Bfrs. 53,000,000,000 in other,
industries, Bfrs. 19,400,000,000 in
try,
sufficient
operations and reason¬
able
profits.
that
this
only
by
notable,
is
It
lenders
too,
not
shared
concern..is
operative
and
builders themselves*-biifo by,.'.sup¬
agricultural
development,
and
in the mines will soon be returned Bfrs.
88,000,000,000
in housing. pliers, realtors and leaders, of the
De-Control
labor that represents so large a
This plan, however, is more an in¬
to their homeland.
The methods of Belgium's eco¬
The Belgian industrial problem dication of future industrial trends part of housing production.'
nomic recovery have been partic¬
The Program Ahead
today is partly one of labor short¬ than a program for directing eco¬
'
I
]
1 t '
ularly well explained in a recent age and partly one of overaged nomic
activities.
The
Belgian
The primary job of providing
.address by Baron Snoy, Secretary
machinery. Some of the Belgian economic policy, this writer was
General of the Ministry of Eco¬
economic experts that this writer told many times, wants to remain housing for all our people belongs
,
'
success.
Mr.
and
price reduction by 10% of all do¬
.—
time,
their outworn
aged installations; They want,to
bring in large quantities of Amer¬
general tors
ing in Belgium is a particularly
policy has been complemented by
hard
and
unhealthy occupation
policy.replenishing the domestic
and miners are increasingly de¬
market
with
goods
either
by
a
country with extremely danger¬
serting the pits. The Belgian Gov¬
means of increased production or
ous potentialities.
ernment now has been importing
But Minister of Finance Gutt, in by means of stimulating imports.
with
unsatisfactory results —
Here again the Belgian economic
accordance with his
colleagues,had
Italian
workers
and
displaced
policy has been daring and suc¬
no hesitation to impose on a suf¬
nersons from
camps in Germany.
cessful at the same time and has
fering country the new hardship
The labor outlook in the mines
been well adapted to the psycho¬
of a deflationary policy. This was
is particularly difficult as 40,000
actually a surgical intervention, logical conditions of the postwar German war prisoners who worked
period.
daring and skillful at the same
at
Many Bel¬
(Continued from page 9) n
Act.
In the FHA we have
made adjustments in the insurance
critics have not remained without
of
the
country's economy from
multi-family rental
effect on Belgian Government cir¬ formula for
government
control and super¬
cles and that a change in the im¬ housing projects to increase the
vision at the earliest possible mo¬
protection to sponsors and lend¬
ment. Already on March 27, 1945 port policy of the country is forth¬
ers against the uncertainties pre¬
*
we
beghn carrying out a policy coming.
sented by long-term rental hous¬
of reducing the number of goods
Belgium has to export in order
ing investments during a period of
on
the government control list. to live and up to now postwar
high construction costs.
We have
Some of the abrogations of gov¬ exports have run up only to onehelped to achieve more moderate
ernment controls proved to have third of their prewar level.
In
rents by extending the maximum
been premature, but, on the whole, 1946,
goods worth Bfrs. 50,000,mortgage term under Section '608
this
policy
has
succeeded
in 000,000 were imported while goods to 32
years and seven months.
In
worth
only Bfrs.
29,000,000,000 combination with a satisfactory
bringing
about very rapidly
a
abroad.
The Belgian
market stabilization by the nor¬ were sent
rent formula for new housing, I
mal play
of offer and demand. foreign trade situation is expectea believe We have a
very attractive
Today, production and distribution to improve during the current
package for rental housing invest¬
of
only a few basic industrial year. The forecast for the year ments.
products, such as coal, iron and 1947, according to Minister Gaston
In accordance with that belief, a
steel, timber and soap are gov¬ Eyskens' speech in the Chamber
full billion dollars of the mori>
ernment controlled and only a few of Deputies sets the export pro¬
essential foodstuffs are rationed. gram at Bfrs. 51,000,000,000 and gage insurance authority has been
allocated for veterans housing un¬
We even dared to encourage the imports
at
Bfrs.
69,000,000,000.
der Title VI exclusively for the
import of goods from abroad and Although Belgium has additional
insurance of multi-family rental
from
its
assets
we
admit that a number of un¬ income
abroad,
housing projects.
At the present
necessary luxury goods have been from its transit trade and other
time it appears that this entire
imported. But these imports had sources, the deficit of the 194V
authorization will be used in ac¬
a
deflationary effect on the do¬ balance of payments will amount
"Moreover," Minister of Finance
important Belgian Gaston Eyskens, Mr. Gutt's succes¬
country's industry found its cli¬
glass industry is only slowly re¬
sor, told this correspondent, "the
max in the decree of April 4,
1947,
covering.
One
obstacle
to
the
Belgian
financial situation
has
rapid increase in industrial pro¬ basically so much improved that when more than 80 articles were
taken from the government con¬
duction is the shortage of man¬
the deficit of 1946 could be
al¬
trol list.
AH rationing or control
power.
Belgium today has vir¬
ready reduced to Bfrs. 10,637,000,tually no unemployment •— only 000 while, in 1947, the ordinary restrictions for these goods were
lifted. The new Minister of Com¬
40,000 unemployed are listed by
budget will be completely bal¬
the government services — but
merce, Mr. Jean Duvieusart, com¬
anced.
There will be an extraor¬
mented on these important meas¬
has an increasingly felt shortage
dinary budget of Bfrs. 3,500,000,000
ures by
of manpower, due to the lower
pointing out that he had
to Bfrs. 4,000,000,000 which is not
a two-fold object in mind: raising
efficiency
of
the
individual covered by regular receipts.
But
the
standard
of
worker.
living in
the
Belgium's industrial these amounts are almost exclu¬
country .while, at the same time,
equipment is partly overaged and
sively used for long-range invest¬
must be replaced and modernized
reducing
costs
of
living.
"Price
ment
purposes and it is, therefore, controls will be lifted wherever
to bring Belgian industrial pro¬
a
sound policy to finance the ex¬
duction up to the standard of its
possible
to
allow
the
natural
traordinary expenses by means of
Com¬
competitors on the world markets. domestic loans. We need no for¬ economic forces full play.
However, this visitor, who dis¬ eign loans presently nor will we petition will do what Orders of
Council
have
failed
to
accom¬
cussed the problems of Belgium's
ask new credits from the National
plish."
In Belgian Government
recovery with many Belgian po¬ Bank. On the
contrary, we intend
litical and economic leaders, has
circles, the control relaxations are
to
consolidate the floating debt
considered as a new experiment
no doubt that these remaining im¬ and
to
reduce
the total of the
which
may or may not succeed.
pediments to recovery will be
public debt from Bfrs. 260,000,There is possibility that some of
overcome
as
successfully as the 000,000
to
Bfrs.
220,000,000,000
the
control
restrictions may be
more
dangerous
financial
and
during the current year. We will,economic problems of the imme¬
reimposed, should the equilibri¬
at the same time,' reduce direct
um of the market fail to realize,
diate postwar period have already
taxation by almost Bfrs. 5,000,been
liquidated.
The
Belgians 000,000 and are carrying; out a may not succeed. There is possi¬
built their
recovery-on souhd0 fi¬ program of" budgetary economies,, bility that some of the control re¬
nancial nand monetary-' baseis vahd
strictions. ,t maybe .. reimposed,
aimed at reducing government .ex¬
theyd aren now
harvesting 'the penses by"l6'%. Twenty per cent should the equilibrium of the mar¬
ket fail to realize.
fruits of former Minister of Finof the public officials will be dis¬
ance Camille Gutt's daring antiCrucial Labor Shortage
missed in order to reduce high
inflation policy.
personnel expenditure."
Belgium's most urgent task is, of
The Attack on Inflation
course, to increase production in
Belgian Franc Stabilized
When the Belgian Government order to improve domestic supply
Mr.
Eyskens'
financial
policy
in-exile returned to their home¬
and to stimulate export. Much has
has been approved by Government
land from London in September
already been achieved but, espe¬
and Parliament and has greatly
1944, they found the country in a
cially in the coal industry, the
increased confidence in Belgium's
stage of advanced monetary infla¬
output situation is still greatly
economic
future.
The
Belgian
tion.
Production had come to a
unsatisfactory. Belgian coal pro¬
franc
has
been
stabilized
for
ficient and the
-
equipment.
gian plants are in urgent need to
Belgium's
dealt
Thursday, May 15, 1947
CHRONICLE
.
Gutt's
plan
consisted of
two stages: to immobilize
tempo¬
rarily the existing means of pay¬ nomic Affairs, to the Brussels So¬
ment and to release
progressively ciety of Political Economy:
changing circum¬
rather on lib¬
portions of the frozen accounts
"We understood from the begin¬ icy, which stimulated the import erating the natural forces of the
^parallel to the resumption of. the ning," Baron Snoy told his audi¬ of goods of consumption but ne¬ country's economy from artificial
country's economic recovery. With ence, "that,
although the immedi¬ glected the shipment of production restrictions than on government
^ this
operation, banknote circula- ate post-liberatjon period would goods such .as machinery and other control qnd planning.;
talked to during his
visit, are crit¬
ical of their country's import pol¬
adaptable
I-Vi:
\
t M
) V
;
!
ft
*'i
•
i
.»
'?
■
,i
.
0
•
Of
5LK2 V*
to
stances and to rely
"!
.I*!-
'
Vr
.
to
private
not
j.
»
enterprise,
i
We
-
are
presently able to accomplish
that
job
pay,
either
at
structures..
prices
for
they, all
new
or
can
existing
Any program of th§.
.Volume 165
THE COMMERCIAL & FINANCIAL
CHRONICLE
Number 4594
■*
'
\
industry or of the government
must recognize that fact,
But
position
a
Much
will
where
depend
agement, labor, finance and gov¬
ernment.
Where management is
inefficient it must make improve¬
ment; if it demands too much
profit,
that must
be
reduced.
Where labor efficiency is low, it
must be increased.
exist
Where
restrictive
essary
and
add
to
unnec¬
.requirements
cost, they must
be removed, no matter who has
imposed them.
We
in
Federal
Government have
sought to be
realistic in our approach to that
point, insofar as our own regula¬
tions
are
think
we
all
done
be done—and we're
There
are
a
don't
We
concerned.
have
that
can
still at work.
number of
hopeful
all municipal bonds, none
which, with the exception of
certain New York City issues, are
course,
of
listed.
stock,
ment calibre of
transaction
Next, the bonds of invest¬
practically all the
country's great railroads, utility
and- industrial
companies, many
of which are listed, but where the
broadest market,
on
which big
blocks are daily bought and sold,
is over-the-counter.
In
stocks, the shares of many^ of
country's most important in¬
dustrial and utility corporations,
the
of them while they
some
ing
"seasoned"
the
Board,
going
before
and
be¬
are
of
some
on
them
in
official
the
relationship with
your
broker
or
of
words, unless
in him—you
that
for
you
it—in
can
other
you have confidence
don't want to be do¬
business
in
the
over-themarket, or for that mat¬
ter, in any other market. The fact
official
(cereals), Long Bell Lumber Co.,
available
seems
Bausch
Anheuser Busch (beer), Crowell-Col¬
lier Publishing, Talon, Inc. (zip¬
pers), Time, Inc. (publications),
be
means
Stromberg-Carlson Co. (electron¬
ant over-the-counter securities
ics), Weyerhaeuser Timber Co.
quoted in such
rental
housing, have
of deter¬
strong
a
note
problems.
They
have revealed
a
stimulating degree of readiness to
cooperate in rental production and
&
in attack upon cost.
There
are
individual
concerns
to the task.
As
-
to
the
see
advances I expect
year
increasing
an
units in lower price
number
of
categories of
both sale and rental housing. The
who
persons
duce
say
cannot
we
pro¬
$6,000 small
houses in many areas in the next
few years are looking only at to¬
day.
I believe time will prove
$5,000
good
to
them wrong.
Every
of
effort
should
be
in
industry
the
of
direction
the
meeting the great housing demand
for moderate priced dwellings.
,
FHA
is
pledged to give you
every bit,of aid that is permissi¬
ble in the terms and spirit of the
,■
We
present law.
continuing
operations
and
are
decentralize
to
responsibility in field
are streamlining pro¬
cedures—and
aggressively elim¬
inating
requirements
wherever
place
more
offices—we
(Possible
that the service ren¬
,tso
dered may
struction
be (improved and con¬
of
housing
new
And
work
at
are
projects to sell at lower prices
-—applying their resourcefulness
on
■
Lomb
No
indication's that
many
expe¬
ful
efforts, in
attention
will
be
ence
on
section
one
others
the
to
that
so
there
an
exchange of experi¬
production by local lend¬
and builders of houses for sale
ers
for
cr
of
at lower prices.
rent
then, of
more
worked
than
12
i
n a n c
a
institutions
1
in
made
seen
ferent.
Some have excellent
kets
on
which thousands of shares
can
at
any
can
'■
1
•
.
those
mi
'
It
the
security
particular
tion.',,
idea
is
tion
listed
achieve
a
is
just
having
words
be
bought or
place.
For a
one
a
mar¬
over-
stock—a market
a
a
dozen
or
may
twenty dif¬
or
thousands
even
of
system
a
of private wires,
teletypes as to make
thing just one huge
whole
market.
•
Here, let
quote again from
Merrill Lynch's "Off-Board Secur¬
ity Market": "These transactions
us
through with breath-taking
speed, even for this modern day.
go
Financtal
Chronicle)
customer
the
gave
a
Co., 607
an
order
market.
to
and
of
Henry
has
to
C.
Alex¬
joined the
Robinson
Company, Inc., 9 Lewis Street.
was
traders
(via
teletype¬
Another
of
Missouri
office.
order
was
&
stock).
.
over-the-counter
the firm acts
case
customer's
basis
commission
so on a
(in which
(in
agent)
which
or
on
a
the
case
acting as principal, buys
or sells to, the customer at a
price agreed in advance).
Orders to sell
ranged
for
to
latter basis
a
usually
are
(particularly
firm has
selling its clients,
its stock from
must
act
net
the
on
so
where
position in the stock
a
—in which
a
either
on
buy
apt to be ar¬
basis but
are
is getting
wholesale
a
of
case
or
course
source
the firm
principal and sell at
as
price).
compensation received by the firm
covers
was
from
the
Before
San
Fran¬
buying
the
Total time:
10 minutes."
t h
Administration
not sure, at the
beginning of
1946, whether the national econ¬
e
s
preferential
have
tendency
second
intensified
reason
lowering of
ing effects
such
a
clearly unwise.
A
against a further
was
rates
the
was
the
on
damag¬
incomes of in¬
ance of the
special rate will not
involve any increase in the cost to
the Government of
carrying the
public debt.' At the time of writ¬
ing
cline that had
already occurred in
recent years.
Many corporate ob¬
the
companies,
colleges
and
other
eleemosynary institutions,
individuals, of the severe de¬
and
ligations
were
going
through
a
third
refunding, from 5's to 4's to
3V4's to 2%'s, or similar stepdowns.
The rate of interest thus
became not only a matter of
nomic policy but of social
eco¬
policy.
It is impossible to
say how strong¬
ly social considerations may have
weighed in the decision
terest
rates
that
in¬
low
were
enough.
Certainly the plight into which a
low
and
lower
has
interest
placed
such
serious.
rate
pol¬
investors
These
is
institutions
perform services of immeasurable
and inestimable value to the
try.
The
their
problems
belated
coun¬
recognition
as
of
determinate
a
of policy
is most encouraging, al¬
though the power of the authori¬
ties in these matters is disconcert¬
ingly great.
"The
importance of the decision
to continue the 7/s%-2V2% pattern
the
factor
market
March
in
the
that
must
be
as
of
these
initiation
program
debt
March
on
con¬
break
in
ings
debt
monetization
in
short-term
needed
the
not
or
the bank's distribu¬
on
holdings.
If the bank had
good distribution of short issued,
time
Over-the-Counter Market is "un¬
regulated," and that
a
dealer,
even
had, in the effort to mini¬
mize earnings, invested War Loan
deposits not only in short issues
but
in
intermediate obligations
to
drawals
ket
loose with investors, is
of
at variance with the
the-counter
firms
facts.,
under
Exchange
as over-
the
Se¬
in
of
1934
Securities and Exchange Commis¬
was
the
factor in the
a
early spring
continuing
debt
was
as
the
influence
retirement
program
tightening
Then, too, there is the National
pro¬
of the
market also accompanied each re¬
demption.
funds
to
The Treasury obtained
the
meet
debt
of
these
funds
payment
-
Most
returned
were
to
the banks
Association of Securities Dealers,
(though not exactly in
the
ratio
organized under the Maloney Act,
for the banks
which acts
ercises
auxiliary and
as an
close
supervision
membership
of
2,600
ex¬
its
over
investment
firms.
What sort of
gets
in
matter
a
which he is
matter
of
a
"break" the
the
final
of
the
dealing.
the
which he is
kind
cus¬
analysis
market
in
It's rather
of
firm
a
with
debt."
Not
returned,
all
of the
however,
debt
being
(Special
to
The
CHICAGO,
Financial
ILL.
Chronicle)
—
mercial
the
banks
Federal
substantial
ment
G.
Elder has become
affiliated with
Norris
209
Salle
York'
&
Kenly,
South
and
changes.
Chicago
-
.
^
,
Stock
Ex¬
•
-
the
a
were
Fed¬
part of
off.
and
This
purchase by
System of
Reserve
amounts
securities.
.
as
The
banking system
whole need
a
eral
sell, and the Fed¬
System need buy,
Reserve
U. S. Government securities in
amount
the
only
increase
tively
the
in
While
loans.
interest
the
to
with
as
keep tight control of
within
limits
the
the established pattern.
"That
of
the
the
Board
System
of
of
statement
Governors
quite
accompanying
as
of
forestall
could
effec¬
,
tendency
any
commercial
banks
to
of
sell
shosrt-term Government issues and
buy intermediate issues, ^nd could
effectively prevent a fall in
is
structure
not
of
all
at
interest
clear
that
the short-term rate
rates, it
rise
a
in
U. S. Gov¬
on
securities
ernment
would
be
ef¬
fective in
i
retarding business borto
a
significant degree.
owing
Expansion of commercial bank
through loans to business
credit
and individuals in
environment
inflationary
an
such
as
exists
now
halted
be
only by the cessa¬
tion, of further expansion of Re¬
can
tion
Bank
of
tional
provision
by the
System of addi¬
Reserve
to
reserves
the
member
The danger in such dras¬
banks.
tic
credit—that is, cessa¬
further
Federal
action
of substantially
rates
and
lower
interest
higher
U.
S.
Government bond prices is viewed
seriously as to ..rule
method of control.
"The
this
out
so
anti-inflationary
weapon
relied
upon as an alternative to
substantially higher interest rates
debt
is
retirement
out
of
cash
a
of Federal receipts over
expenditures. Retirement of Fed¬
eral debt held by the commercial
surplus
offset
could
banks
the
total
money
the
effect
supply
of
this
and
expansion,
on
loan
tral
the
an-
now
banking
seems
being
and
to be
used
the
authorities.
by
cen¬
This
method involves the maintenance
of
high individual and corporate
taxes
ing
.
willing
to maintain the established pat¬
tern
was
clearly indicated in a
was
amount
short-term Gov¬
on
securities
Administration
able
an
large
as
rise in the rate of
a
paid
ernment
fraction
a
the
market
Most
large
they can sell in taking on
higher yielding commercial and
other loans.
compared with
War Loan calls, this led to a con¬
siderable churning of the market
and the Federal Reserve System
the
other
banks—
Govern¬
of
Together
of
that
emphasizes the difficulty of credit
method
unevenness
and
commercial
T.e
La
Street, members of the New
for
paid
estate
the
distribution of
was
James
funds
necessitated, at the time of each
redemption, the sale by the com¬
maturing issues
With Norris & Kenly
withdrawals),
or
eral Reserve Banks held
the
doing business.
to
their deposit cus¬
tomers held most of the maturing
the
tomer
isn't
same
in¬
matter,
said
contemplation.'
real
of
serve
technical
from the commercial banks.
sion.
mar¬
and
gressed.
"A
Act
under the jurisdiction of the
come
obligations in order
banks in shape to
prospective War Loan with¬
these
put
if he wants to, can play fast-and-
completely
of such
meet
this
have
control politics at this time.
commercial
banks
have
the
many
banks
Sale
answering
to
to
under
are
mercial,
difficulty.
which
be
"The fourth important develop¬
ment in the money market in the
last year—the sharp rise in com¬
thus
evidently
not
Secretary of
'no changes in the interest rate
policy of the Government at this
a
But
in
relative
reported
increase
may
The
Treasury,
was
declining
an
rates
all.'
at
quiries
the
The pros¬
serious
and
long-term rates, then
that
to liqui¬
security hold¬
Loan withdrawals
made—was
Mr. Eccles added that 'in
is no resumption of
there
amounts of Government securities
necessity
War
as
permit
interest
in
Government
were
'it
powers
to
short-term
case
retirement
1.
other
in
pect that this program presented
to banks having large War Loan
date
banks.'
the
was
of
desirable
in
rates if necessary to prevent
long
rates from declining further as a
result of
debt
monetization
by
Not the
influences
the
of
a
occurred
viewed
light of other influences.
least
be
rise
some
loans
for the indefinite future,
tributing
absence
would
withdrawals could be met without
customer
rate
this commitment still holds,
though the Chairman of the Board
of
Governors, in testimony before
the House Banking and
Currency
Committee, recently stated that in
surance
filling the
the
rediscount
faced inflationary or defla¬ time
(April 24) the Board said:
tionary tendencies, it soon became The Board does not favor
a
evident that
inflationary tenden¬ higher level of interest rates on
cies were in the
U.
S. securities than the Gdvern-"
ascendancy.
A
chance in interest rate
policy that ment is now paying.
Discontinu¬
firm's
to
y2%
applying to loans collateraled by
U. S. Government
obligations ma¬
turing within one year.
At that
service rendered
formation
11)
page
omy
tion' of
for
Long Bell Lumber
from
long-term | nounccment of elimination of the
discussed in the market.
"Though
not only the physical proc¬
order, but the
by reason bf the
specialized knowledge of
markets and the security in ques¬
tion, and its ability to furnish in¬
2%
a
was
depending
of
ess
was
1xk%
accounts—the
Naturally, in either an agency
or
a
principal transaction, the
eight
shares, New York checked dealers
in Kansas City (Long Bell's home
town), Seattle (lumber country)
and
Chicago (active market in
Chfonicle)
—
Chicago
shares
cisco
Joins Henry C. Robinson
Gordon
order
York,
and the confirmation
minutes.
HARTFORD, _CQNN.
The
New
back in New Orleans within
Street.
The Financial
sell do
or
rate
icy
New Or¬
checked six active dealers in New
York
300
of
that
buy 50 shares of Time Inc. stock
with Francis V. Nixon &
staff
fact
other
stock—can
Carey, has become connected writers)
D.
j:
;
»
that-there
means
in
wired
ander
ques¬
"over-the-coun¬
market"—in
at
to
the
in
on
the
than
most
necessarily, a big "spread" in its it might be difficult for him other¬
quotation, is just completely wise to obtain.
wrong.
A stock having an "auc¬
Any idea, however, that the
With Francis V. Nixon
(Special
that
like any
depends
yA
traded
ter" in itself
the
>
Hill
all
m.-hj
stock
(Special'to
Sbuth
Over-the-
other ; market.
phones and
LOS ANGELES, CALIF.—David
A.
the
respects,
Counter market is much
Recently, for example,
The
is
purchases
usually a "work-out"
proposition.
Generally speaking,
by
<
'
market
sales
these
are
the New
papers as
to the execution of
as
in
the
it is
that, fully as good as that pre¬
vailing in the case of a large proportion of "listed" securities.
leans
*
buy
basis
at
in
more
fairly
import¬
Firms executing orders to either
bought and
sold at close quotations. In others,
the market is less active, though,
hundreds
increasingly as the effects of war
emergency recede behind us—my
•experience- with you leaves no
doubt in my mind that the job to
be done^, will be done by private
industry.
Finally,
orders
mar¬
be
poor,
and
market:
orders
and
long
Execution of Orders
In so huge a market there are
bound, of course, to be all kinds
securities, good, bad and indif¬
of
miles apart, are so inter-connected
is to me the highly encour¬
aging background for my firm be¬
we
normally
the
with
a
etc.
firm,
from,
others,
us, at least, to
the most impor¬
security transaction.
"Times," "Sun," "HeraldTribune," "Wall Street Journal,"
"net"
Again, in
definitely
isn't
or
to
complete lists of the
bulks large in the over-the-coun¬
time
of
is
record
Incidentally,
ferent places. All of which places,,
curities
by the way, though they may be
years
lief in the results
tant part
ter market.
be found in
with
have
I
by no
as
the-counter
private lenders in
FHA—locally and nationally. The
record of cooperation and prog¬
ress
the
on
"negotiated
ket"—in other words, for an
I have
years
listed
are
Big Board. Trading in the shares
of these greatest of American fi-
stock
perience has shown that this is a
profitable
field
for
building
operations.
For
all the bank
course,
an
York
Homogeniety
nental Insurance
sold
Ex¬
Co.
stocks, none of which, with the
exception of Corn Exchange Bank,
Fidelity Phenix Fire and Conti¬
Any
trying in FHA to an¬
alyze
operations
all
over
the
country, and to bring the success¬
are
Kellogg
(optical),
that
stocks and the insurance company
dited.
.We
K.
a
these
word
dealer
your
less
would
to
discuss
W.
just
name
class
such
is
his
take
counter
To
better
was
That, definitely, is a fact—and,
to us, it means just this:
Unless
ing
the
each
price at which the transaction
actually effected?
over-the-counter.
of
of
available, whereas,
an
unlisted stock,
of
the customer has to take the word
of his dealer or broker as to the
which for years have been,traded
few
records
are
case
signs.
Our industry meetings, re¬
cently held in hundreds of cities
revealed
'
is so, and these big markets overthe-counter do exist, is it not a
fact that, in the case of a listed
"unlisteds":
mination to conquer the besetting
•
(Continued
(Continued from page 7)
the
upon
Business Financial Position
Counter Securities Market
wisdom of the leadership of man¬
37
Treasury's Debt Redemption Policy Weakens
A Few Facts About the Over-the
private enterprise
can get
it can do
the great bulk of the job—and we
are now in the first stages of the
transition to that point.
into
(2633)
and
of
many
results
consequent
a
the
financial
weaken¬
position
of
individuals and businesses,
that
cyainst the
must
very
be
balanced
desirable reduc¬
tion in the Federal debt.
38
THE COMMERCIAL & FINANCIAL CHRONICLE
(2634)
Thursday, May 15,1947
This
interpretation, by placing upon the membership the
duty and obligation of making an explanation where more
than a 5% spread was taken, by putting the membership
Self Praise
(Continued from page 3)
Association offers
a
pattern for business-government cooper¬
ation, based solidly on the democratic
principle of selfspirit and genius
regulation which is in full accord with the
of private enterprise."
The whole effort smacks not of an
but of paid
impartial account
protaganism.
one-sided type of indoctrination has found sponsorship by
the child so favored, and that somewhere within the sancti¬
NASD, this paragon of "fair practice/'
Frazer's product to
members, and that many of the members have already
monious portals of the
machinery
the
was
*received the
set up for mailing Miss
same
for free.
through the murky stream of this book,
murky because one-sided, and attempt to appraise it for
what it says and what it fails to say.
The author tells us that the Maloney Act contains the
following provision:
Let
us
the
on.
the
wade
registered securities association may
provide that no member thereof shall deal with any
non-member, broker or dealer, except at the same price,
for the same commissions or fees, and on the same terms
and conditions
a
as
are
by such member accorded to the
general public."
I recently returned from a tour
a decision of the Securities and
Exchange Com¬
of seven cities. I found winaow.
negative that implication and to point out that
"Help Wanted" placards. in five
the mere size of a spread
standing alone is no evidence of cities. I waited for hotel rooms irt
fraud and, further, that where one is
charged with wrong¬ three cities; I found white shirts'
doing, the burden of proof, in effect, is with the prosecution. not available in 11 shops. 1 found"
We have always felt that the pricing policy of the NASD virtually no unemployment in the
ranks of the employables.
And
is wholly abortive? and we believe this
feeling to be repre¬ those symptoms are but a crude,
sentative, as evidenced~by the results of a poll which we composit of conditions; every¬
,
conducted.
-
•
>
Moreover, the governing body of the NASD must have
had considerable
misgivings on this subject because its "5%
spread philosophy and interpretation" was never submitted
to its membership for approval but was
methodically im¬
posed by an interpretative fiat. Those behind that fiat must
have felt that such approval would never have been forth¬
coming.
member of the Association."
that.
What
we
need is
which
upon
members who
are
in the NASD
our
reversion to the system of free enter¬
country was founded, a return to free,
a
liquid and unhampered markets.
open,
This becomes
particularly necessary and significant in
ness
on
the
on
one
On the
many
opposed to its principles and who believe
Maloney Act should be repealed?. Doesn't she know
that this membership is based upon the compelling necessity
to realize the commissions and trade discounts referred to by
are
a
sharp clash of ideology be¬
hand, and government in busi¬
the other.
whole, Miss Frazer's effort is
of how not to treat the
that the
striking example
a
Maloney Act and the NASD.
We hope that some day some one will write it up as it
deserves to be handled.
so
in
a
measure
as
part of
our
editorial policy.
The work
the
same
subsidized effort rather than im¬
NASD is
a
forced
the statute
so
intended it toibe?
given a true portrait? Why
painted for what it really is—a
monopolistic enactment contrary to good conscience which
gives to the NASD an unfair advantage as compared with
Other securities organizations which in the true sense are
voluntary and self-regulatory?
Why haven't
we
been
hasn't this provision been
In
opinion, this shocking monopolistic privilege is
violative of our principle of free enterprise.
Strip the Ma¬
loney Act of that provision and there would be no National
our
Since the above
was written, the
following letter was
Chicago dealer by the Editor of the "Chron¬
icle" reflecting righteous indignation at the one-sided char¬
received from
a
acter of Elizabeth Frazer's brochure.
"Yesterday
from the
Comes of
we
NASD)
received (free of charge, believe it or not
book entitled 'The Security Business
a
Age'..
grave mistake.
ecutive Director
quotes Wallace Fulton at length;
That is a
Doesn't she recognize that his job, as Ex¬
of the N^SD, is dependent upon NASD's
a
houses
If any
security dealer can
seated, he must be awfully dumb.
"The
needs. In other words my personal
requirements are such
ten
men
for
mdre
this
at
average
than
homely
of
as
to keep'
busy
wages
Multiply
illustration by the
one
year.
opportunity unfolds that'
should please every businessman's
heart.
1
Among the phenomena viewed
predict conditions are many"
things whose purport varies often >
With the economist at the steth¬
oscope.
There is, however, oneto
great ponderable that is seldom
charted. That ponderable is "pub¬
lic, confidence" and public confi¬
know without doubt lack of
we
con¬
fidence makes good times bad and
bad times
worse.
I do not
deny that prices are out
of line. 1 believe they will level,
off as they always have when the
laws of supply and demand, are
permitted to assert themselves.
I deplore the lack of statesman¬
am
confident that the public's interest
will be protected..
■
v r
?,
recognize the lack of.courage
capacity in some politicians '
and I lay that at your door and
mine to correct by, way .of better
and
selection.
sibility, stop chasing ghosts and
battling shadows and to see con¬
ditions as they are and move
ahead.
to this book should be that every
answer
his
form of regimentation on the
.
.
statute-books.
"The die-hards in the NASD want to perpetuate them¬
selves in office the same as the New Dealers.
Even Presi¬
no
mental
own
make
attitudes
plus mental attitude ah ingredient
of the equation..
You as a group .have demon¬
strated that you are "up" think¬
„
You
ers.
can
be
a
..
.
_
.
cell of infection
to' spread
the idea that a sound
positive attitude is not, necessarily
moronic and
tude based
that.a positive atti¬
on
known factors is a
bit more realistic than conjuring
with enemies by way of factors
we
carinot
and
see
only fear.'
can
We cannot say what might hap¬
in three
pen
dent Truman is very
,
Pollyanna philos¬
ophy. 1 do not advocate, however,
that we reject the thesis that we
live in a house of cards and by
our
propaganda, this is it.
read this without becoming nau¬
dealer
Senators and Congressman, and advise all his
Association of Securities Dealers.
While it is the bulwark
of the existence of that Association, it is also the battering clients and friends to do the .same thing—to repeal the
ram that is being used against the continuance of free, open
Maloney Act, which is one of the most vicious things in the
The author
automobile,
an
I advocate
"Of all the damnable New Deal
write
and liquid markets.
top coat, an overcoat,
a
(and almost all that goes with it)
to name only part of my personal
Discount * all of these factors,
however and, in spite of them, we
should be able to see our respon¬
that with many,
membership in the
object of bread and butter and that, clearly,
aware
shirts,
.
.
a
with it.
Isn't she
shbes,
12
.
three pairs
I
of
savors
membership these
only deal with NASD members partial disclosure.
NASD's stafture has been diminished by association
conditions and terms accorded to the general
the statute and that in the absence of such
on
of
ship in labor's leadership. I
We have tried to do
individuals and firms could
public?
for several years.
I need three suits,
dence, is ponderable in that
world wherein there exists
implies
that there
ideology.
of the victims.
in the author's armor is the sugges¬
Maloney Act and the*" NASD are worthy of
becoming a pattern for business generally. Save us from
a
Doesn't she know
some
tion that the.
tween freedom
purely voluntary organization, membership
a complete act of free will and nothing else?
only to examine our
personal inventories to fmd cerification of where business can gb
area
and "self
a
need
millions of Bob Coynes and a vast
face—can the author
use such terms as "self government"
regulation," giving the impression throughout that
.
We
who have refused to be indoctrinated with NASD
prise
In view of this provision and of the mandatory rule of
the NASD enforcing it, how—and apparently with a straight
where except in Widely scattered'
problem areas.
seems to be going from bad to worse.
questionnaires, we are informed that it is
now
abandoning them and is embarking upon a system of
personal visitation and inspection of books. This gives to it
the power of reprisal and of taking it out on those members
Not content witli
The weakest spot
provision is that every one
in the securities business, unless he does only a Stock
Exchange business, or engages exclusively in Govern¬
ment or Municipal securities, finds it profitable to be
in which
do not need to look to
we
It took
They may become
"The net result of this
the NASD is
And;
statistics alone for the s-gns if we
would find them.
implication of fraud.
Then she continues:
a
of
Signs of Good Business
defensive, carried with it
The Association
"The rules of
balanced budget as
a
mission to
t
will, therefore, not be surprised to learn that this
You
under such circumstances
nounced
June. 30 with $1 Vz billion surplus.
or
four years;
we
subtly trying to get the OPA back in a cannot hedge against everything;
but I think we „are not being
continuance?
Did she expect lack of bias from him?
Her. disguised form of price fixing."
"Pollyannas" if we say "At least
investigation should have been more in the field, where she
let's hot bury the bodiy now. Let's
Would have learned something of the militant opposition
think "up" not "down." Let's take
to thp prying activities of the NASD, of the burdens that
it from here!
have been settled upon its members by over-regulation, of
7-—r
(Continued from page 6)
the periodic and unnecessary annual inquisition conducted the rate of
Travers With Marache Sims
$177 billion—greater duced at the rate of 6.5 million a
(Special to The Financial Chhoniclp)
•
through the medium of questionnaires, and of the incon¬ than djuring the peak war years. year.
;
LOS ANGELES, CALIF.—Tad
(4) Our gross national product
(11) Insurance premiums for
sistent results based substantially
upon the same facts that is
at an all time peacetime rate 1946
up
15%.
I
include
this Travers has become associated
have been arrived at by the Business Conduct Committees
of $194 billion, within 5 billions item because of the wide spread in with Marache, Sims &
Speer, 458
Why the Scare Campaign?
'
nmm
i
..
.
in different districts.
of the
Miss Frazer speaks of
shows an ingenious lack of
of all
pricing policies and profits and
investigation and knowledge on
these subjects in so far as they affect the activities of the
NASD.
We prefer to adopt that view rather than believe
that there has been a willful
withholding of information.
The promulgation by the NASD of the
iniquitous "5%
spread philosophy and interpretation", completely ignored
the element of profit unless we adopt the
impossible view
that all security dealers operate with the same overhead.
war years high when 50%
product went to war.
(5) Farm debt is at an all time
$5 billions.
(6) Car loadings are at terrific
low of
.
levels.
insurance placement in
brackets. Particularly
in
all income South Spring Street, members of
significant the Los Angeles Stock EXchapge.
this category are the new pre¬ He was formerly with Crowell,
miums in the industrial insurance
field which, according to
prelim¬
for: 1946.
Unemployment except in
special problem areas is virtually
inary reports also are up
(12) Savings accounts are up.
(13)
Bond
redemptions
are
non-existent.
down.
(7)
(8) Retail sales
year ago.
are
above-one
:
(9) Steel is 96% of capacity,
10. Automobiles are being pro¬
Revel Miller & Co. Adds
The
President
has
an¬
,
Special to The Financial Chronicle
LOS
(14) Taxes, at reduced rates, are
$42.5 billion within $4 -billion of
the wartime" peak of $46.& billion,
(15)
Weedon & Co.
ANGELES, CALIF.—Rob¬
ert E. Da vies has become affiliated
with
Revel
Millar
&
Co.,
650
South .SpringStreet, members of
the Lbs Angeles Stock Exchange.
•
Volume
THE COMMERCIAL: & FINANCIAL' CHRONICLE
Number 4594
165
(2635):; 30
Holds Production Index Portends Recession
On Pendulum
ket is
11% (this is 42% higher than pfewar), and so forth. On an overall
affair
basis the FRB index bf industrial
measurement
production is Visualized
mand
ping to
a
to
be
drop¬
as
idea
the
the
tics
is
for
or
more
a
psychological
more
activity,
business
than
which
low of 150 a year from
compared with 189 for
.much
a
less realistic
de¬
and
supply
of
goods. However, some
be obtained by noting
may
an
economic
unbalance that
sooner
non-durable
based
goods
the
upon
Board
Index
duction.
1918,^>-
Reserve
Industrial
is
This
1947.
March
be
would
commensurate decline in the stock
market.
,
Unfortunately,
no
the
stereo¬
CORRELATION OF
Apr.
1902
1907
Nov.
1907
Nov.
1909
July
1910—
Nov.
1916-
;
Feb.
—27
—40
Dec.
1917——
1919——
119.6
19211
—47
Mar.
1923—"—
Oct.
1923—
I
105.4
—19
381.1
Sept. 1929
1932—_—
July
194.4
Mar.
1937
Mar.
1938—
May
Oct.
1903
1907
110.1
Nov.
Aug.
Dec.
July
100.5
-
—49
212.50
1948-——
1946-——
.
.
163.12.
.
—24
be noted from the fore¬
It will
going that the percentage decline
in the stock market has usually
somewhat
been
the
than
larger
corresponding percentage decline
in business activity. This is partic¬
1909
1911
May
1917
jor depressions, such as 1937, 1929
and
1919.
It is not true of the
depressions of 1907 and
when business activity de¬
earlier
1902,
percentagewise more than
the
market.
stock
for
true
periods
business
minor
1923-24,
as
37
_
—47
41
»—28
60
—26
57
81
Jan.
1918
Feb.
1920
Apr.
1921_
82
1923
July
1924
Aug.
1929—
-
.
—19
75
July
1932
1937
May
1938
Mar..
1947—-
when
business activity declined 19% and
the stock market decline equaled
was
down
ket
was
a
change
a
sensitive
more
refers
not
index
of
in
much
so
to
industrial
indicator
150
—20
production
indices
non-durable
pear
to have
for
more
selling opportunities.
prepared for such an even¬
tuality, retention of adequate cash
resources
would
sound
Riskless
appear
market
Profit
to repre¬
policy.
"In
to be faced is
whether or not to liquidate pres¬
ent holdings.
The risk of losing
an invested
position in sound se¬
curities is, of course, substantial
at" present levels since the stock
problem
not
be
denied
that the threat of
The
"It
is
Recent
the
Pattern
pattern
of
years, as shown on the
ap¬
prophetic sig¬
The chart shows the
of
the
Federal
ble
move¬
previous
chart, that
tion,
in
and
the
also
durable
goods
fields, the
representing their
non-durable
latter
indices
respective
weights in the total index.
Gen¬
covery
erally, the durable goods line has
the
been
moving below that of
goods,
PRODUCTION
but
find
we
that
Production Index.
Economic
familiar
PATTERN
a
rising trend
on
a
nar¬
course
forming
the
bottle-neck.
At the
end
SIGNALS
Unbalance
signals, when
indicate unbalance
the
economy that sooner
calls for correction.
In
later
or
such
other
words,
they indicate Im¬
pending cycle changes.
At pres¬
ent, the durable goods line con¬
tinues its uptrend, the non-dura¬
ble
line
ter
in
its downtrend, with the
counterbalancing the lat¬
the
dex.
To
overall
what
production in¬
extent
this
com¬
pensatory action will continue de¬
pends largely on the trend in the
non-durable
downtrend
goods
in
The
field.
non-durables
will
hardly continue to be offset by a
corresponding upward trend in
durable lines, considering the al¬
ready high level of activity in the
latter
tory
field
and
the
accumulation
large inven¬
has
that
Therefore,
dex
may
shortly
bring
about
production index.
subsequent
any
As
slant
of the durable goods line will tend
to intensify the
decline in the
total index.
••
•
>
"A
recessionary tendency in
business has long been forecast
and appears immediately in the
offing.
If anything, the pattern
forming on the chart seems
to furnish additional proof of this.
now
The
further
chart
development
formation
may
give
worthwhile
of
clues
to
as
severity arid length of the
sion
now
apparently
arid for this reason
month
impending,
deserves
tinued watching."
READJUSTMENT
the stock
peak of 212.50
a
Prepared by
(Dow-Jones industrials). The sub¬
IRA HAUPT & CO.
sequent low in this index was re¬
corded
last
October
at
163.12
with about 172 now).
index for May
1946
stood at 159 as compared with an
estimated 189 for March 1947 (as¬
sumed to be the peak). The maxi¬
mum decline to date in the stock
market as measured by the DowJones industrial index has been
about 24% —already more than
the extent of the decline in the
business
forecast
referred
• to
(compared
FRB
The
RELATION
OF DURABLE TO
COMPARED
NONDURA. ME
WITH FEDERAL
OF
above.
RESERVE
INDUSTRIAL
GOODS PRODUCTION
BOARD,
INDEX
PRODUCTION
This is not intended as a fore¬
cast that the lows of last
will
(163)
not
be
October
but
violated
that, based on
the
above
business forecast,1 it
would appear that further market
weakness which would accompany
downside penetration of the Oc¬
tober lows should be considered
as
offering longer range buying
rather
to
suggest
FEDERAL
RESERVE
BOARD INDEX
Black, Jones With Marxer
*.'•
j
Specl&l to This financial Chronicle
SAGINAW, MICH.—^William Ej
Black and Harry H. Jones have
<
becoibe associated with Marxer &
Cd.y Penobscot
Building, Detroit,
Stock Ex¬
members of the Detroit
Mr. Jones was formerly
change.
with
Hornblower
Merrill Lynch,
Beaiie.
'
&
Weeks,
NONDURABLE
GOODS
and
Pierce, Fenner &
•
D URIEL E
With Prugh, Combest, Land
(Special to
The Financial Chronicle)
KANSAS CITY, MO.—Frank B.
Jr., has been added to
Anderson,
the
staff
of Prough, Combest &
Land, Inc.,
1016 Baltimore Ave.
I9i9
1920
»92l
SOURCE: Pederal
1922
1923
reserve
1924
J925
board
1926
1927
1928
(929
1930
1931
1932
1933
1934
1935
»936
1937
1938
1939
1940
1941
1942
1943
1944
1943
the
reces¬
the present situa¬
might point out that a
year
ago
this
market reached
the
ultimately
down
we
'
a
corollary,
a
downward
Skipping to
tion,
oc-
further
any
downward movement in the total*"
non¬
line, and during
part of the year, both
parallel
row
the
goods
latter
showed
non¬
crossed
move
durable
output of durable goods
INDEX
line,
and reconversion
production trends
and
goods
mirroring strikes
handicaps in the
capital goods -industries, dipped
sharply.
Around the middle of
1946, however, the durable goods
line in the course of a sharp re¬
Reserve
On basis of
clear
downtrend in the non-durable in¬
appears of particular interest to¬
day, for something similar is pres¬
ently occurring. During the fore¬
part
of
1946,
the
non-durable
Board Index of Industrial Produc¬
^whenever
when business activity
28% and the stock mar¬
2%.
line
connection, the long goods line was strongly main¬
indices, shown tained and even rose, reflecting
here, points up an interesting pat¬ peak production, while the dura¬
durable
still lower prices is very real.
component consequently
this
ment
The
durable
tremendously
term chart of these
tern.
Investment
the FRB
curred.
Non-Durables
vs.
the
boosted
decline of war production, a
steep drop in the overall produc¬
tion index was inevitable.
.
Durables
materials
the
than
To be
sent
that
war
greatly, despite the
strong uptrend in the latter. With
durable
goods
the
rea¬
component
this
goods
the
and
exception
y
an
former
outdistanced the non-durable
clear
—33
189
to
was
naturally
broad
—53
non¬
period, for obvious
Production of
sons.
This
a
only
war
and
where
nificance.
rather
"The
latest
production,
of
and
narrowed
total production index.
indicator
the
durable
3, 4, 5 and 6—they were promptly
followed by a downtrend of the
goods
direction.
the
Such formations,
in the chart, occur at points
1, 2,
have
81
A similar situation prevailed
19%.
in 1909-11
been
of
given when the distance
components
its
this
a
production
"bottle-neck.'
Gen¬
trends
53
121
Assumed
occur.
prices
economy was heading.
Rather it
is the relative movements of the
114
May
they
be
within
was
the
in 1947,
continued
configura¬
signal of
impending period of readjust¬
ment, accompanied by a decline in
would
nal
a
the
stock
depression.
or
production
advance
92
May
hand,
which has not always been
—33
55
before
other
—
overall
line
experience,
tion
"Basically
they occur,
between
have been less precise a barome¬
ter in anticipating the end of a
erally,
51
27
well
recession
—45
20
_
Neither is it
of
relatively market may be at or near an im¬
recession
such portant turning point, yet it can¬
instance,
for
% Decline
Low
1908
Dec.
Jan.
ularly true in the more recent ma¬
clined
1903
June
—43
shows,"
the
early
downward course.
past
index, in other words, in general
industrial activity.
The same sig¬
durable
closely identical."
are
experience
On- the
of
High
—37
96.4
-
"Past
reversals
Production:
Dates
68.4
1903_,
Nov.
Jan.
Index
Industrial
they usually
*
production of non-dura¬
decline in
circular continues, "that the mar¬
ket has been anticipating business
BUSINESS DECLINES
AND
FRB
I
% Decline
Low
High
Dates
the
in
(Dow-Jones indus¬
market
trial average).
MARKET
STOCK
Industrials:
Dow-Jones
decline
correponding
stock
typed answer is readily available
for the reason that the stock mar¬
a
Exchange, has
bles, this proved to be a danger
signal which was followed by a
following comparative statis¬ tion between the trend of indus¬
showing the percent decline trial activity and the trend of
in
business
activity for each of stock prices.
equivalent of about a 20% declipe.
Though their re¬
The question naturally arises, as the so-called business depressions spective curves are seldom ex¬
to what might be considered, a since the turn of the century and actly alike, in their
major outlines
as
now
=
overtook
Pro¬
According to the firm's
explaining
the
chart
always a close correla¬
circular *
"there
since
Federal
of
and
goods
upward trend, while the-"
non-durable goods line assumed
later calls for correction
or
1946
durable
strong
indicating
as
showing the relation of durable to
doton
exoected
is
Haupt & Co. publishes chart which is interpreted
Ira. Haupt & Co., member of the New York Stock
issued a Production Index Chart
(Continued from page 13.)
duction
Ira
of
1946
1947
con¬
40
THE COMMERCIAL & FINANCIAL CHRONICLE
(2636)
Whyte
sJ
rally
where another
be in the making.
is
being
written
products today have
smaller and smaller.
*
Such
widely
solve
a
buy.
'
*
*
❖
In the event the stocks
bought
it
bered
be
must
the
that
are
remem¬
stops
were
basic condition.
retailer
down
cut
may
his
wholesaler
a
may
It is the
notch.
however,
in this
cycle.
Until he makes ad¬
justments
the only thing
local price cutting campaigns
can accomplish is to get news¬
i
p r
producer,
m e
who
the
is
main cog
paper space.
It
is
seemingly
apparent
given to be used. If any stock
that the market is concerned
gets under the critical level
with something.
It is logical
it should be sold.
to assume that a dwindling
The
of
action
market
the
buyer's bankroll is one of the
few days hasn't
"somethings" in the scheme
been anything to cheer about.
of things that goes into the
In fact, most of its action is
making of the stock market.
simply grist for the techni¬ When the stock market makes
cians' mill, rather than fodder
up its
mind what the ap¬
for the buyer or seller. One
proach will be it will act in
day they close pretty badly a
positive manner. Until then
looking like the following day it will
probably continue to
will see a collapse. The fol¬
back and fill.
lowing day they kind of perk
*
*
*
up and show almost a com¬
In
plete change of heart.
It is
rallying strongly the
apparent that such
action earlier part of last week, the
doesn't encourage either the market removed a short in¬
for the past
'
■
j
bull
or
The former,
the bear.
he's
if
long, is nervous and
probably sitting with a paper
loss. The latter is also
nervous
and watches newspaper
lines for clues.
*
There is
,
*
*
.
head¬
considerable vol¬
a
i
'
1
i
,
now
as
losing
well.
A few
more
to this
problem, it would
points
on
that
first
rally
I'm
brought about the
can reoccur.
that there's noth¬
aware
list
of
tremendous
with
sales but
to.
Many
potential
customers to sell
no
potential buyer
a
More next
[The
article
time
views
do
not
coincide
Chronicle.
recommended
Thursday.
Whyte
expressed
in
this
necessarily at any
those of the
are presented as
with
Pacific Coast
1859
Securities
H. Hentz & Co.
New
New
*
Schwabacher & Co.
New
York Stock
Commodity
Francisco
Exchange
Stock
Exchango
Curb
Exchange
Cotton
Exchange
Exchange,
Board
of
New Orleans Cotton
York Curb Exchange (Associate)
San
York
York
Chicago
Members
New
New
York
And other
Inc.
Trade
Exchange
Exchanges
Stock Exchange
New York 5, N. Y.
COrtlandt 7-4150
}
Teletype NY 1-928
Private Wires to Principal Offices
San
Francisco
—
Santa Barbara
'
Monterey
—
Oakland
—
securities
and
realized
be
Fresno
American
to
in
This goes
PITTSBURGH
GENEVA, SWITZERLAND
This
stocks.
common
without paying at least 25%
money
has
occurred
into the "house
alike for the rankest speculator and the most legiti¬
investor
mate
trust
of
funds.
The
last
been
has
between stocks and fixed interest securities.
Likewise
the taxation of
dividend income at the
secularly
higher rates is another important element corroding the protection
of the investor's capital.
In actual results it narrows, sometimes to
an
unrealizedly great degree, the apparent mathematical spread
between bond and stock yields. For example, the prospective pur¬
chaser of a common stock at the present average yield of 4.77%,
the
have
Government
approach
Bond
he
gaining
2.6%.
of
investment
a
Actually, if he is
0*
£5 thousand.
of
that
is
differential over
a $55,000
income man (with wife, and two children) in a 50% tax bracket,
he will be gaining only 1.3% as compensation for his risk-bearing;
only a $1,300 additional net increment from a $100,000 purchase of
stocks. In Britain such diminished rates of advantage of stocks over
government securities applies to the individual enjoying an income
might
.
(Continued from
would
$132,500,000 in annual
*
*
page
get
streamlined
far
❖
*
*
Investment bankers aren't to be
The
be
ses¬
this
year,
'•
•
mental
for food processors.
One reason is
shgrp curtailment of orders by
paint manufacturers.
The paint
lightning is to strike until
Department
weather
makers
ready to loose their
bolts. Secret testimony just made
public by the House Appropria¬
are
Committee
tions
General Clark
investment
because of (1) mounting
ingredient costs and (2) declining
complaining that
consumer
the
control
*
*
money
One
Clark
crowd
airways
recently talked the Agriculture
then
from Argentina
his
conceded
working
were
men
on
case
a
high
against the bankers.
*
*
volume
lusty
You
on
*
H<
*
of
moval
the
Insurance
soon.
Federal
Deposit
Corporation
assess¬
FDIC
Congress is to conduct thought
ing company legislation. But that's
about all. Last week House Bank¬
to
want
men
won't
tell
lative
them
proposals
from
to.
not
to
free
extraction
this
*
*
'
.
.
1
prices must
consumer
Wash¬
You've read in the papers
how
the
the
local
hike
its fares
PUC
authorized
just
transit
to>
company
20%. How come?"
*
*
*
A startled House of Representa-
tives last week heard—and didn't
deny—a
charge the International
degenerated
into
a
political
instrument.
The
com¬
plainant was Connecticut's Rep¬
Bank
has
resentative
former
Patterson,
Marine who fought in the Pacific:
and
European
his colleagues
theatres.
.
established
year.
Yet,
it
told,
He
"^he bank has;
.
.
been
for
has
almost
loaned
not
a>
a*
stabilized
or
currency
of
bank
hold¬
but
need
-
instead
ir*
of
terms
political opportunism.'*"
Next day the bank announced a*
France.
H:
Keep
an
Hf
*
eye
on
the War De¬
partment's
experiments
wUfc
pasties. Already the 4u«y hm
prpyed to its owq satisfaction
that plastic dishes in the ipu$
run
cost less than pottery table¬
should
That
ware.
Further,
the-
needle
Quarter¬
the
Corps hopes to develop*
materials
plastic
for
ii*
use
buttons, sunglass frames, water-
faucets,
bag
helmet
liners,,
tropical helmets and crash hel¬
mets.
"'.
.
*
i
Federation
❖
❖
for
Chairman
Railway
Robert
Prog¬
Young:
R.
plays to capacity audiences in his;
Washington tirades against Walt
Street domination of the carriersLast
week
tional
he
Press
the
to
drew
Na¬
Club
weekly lunch¬
eon
meeting an overflow mobDemand for his speech copies wast,
bill into the hopper.
When eyebrows raised in surprise,
so insistent that 150 extras wereWolcott
explained
"I
just ground out on a second run. Thewant rriy colleagues to be think¬ title
"Democracy in Degen¬
ing about this." He won't order eracy."
~
ing
to
be enacted this session.
*
Administration's
the
banks
dropped
Wolcott
Chairman
ing
Legis¬
aren't
Say
sion.
*
clinics this session on bank hold¬
continue the levy and Congress
.
•
Trumant
President
ington's Public Utility Commis¬
ress
Bankers shouldn't expect re¬
costs.
jJ;
#
be lowered. You appoint
of linseed oil
at outrageously
Now they'd like to
this deal but can't.
cost.
renege
«.'
.
Department into buying for them
a
undercover
*
Attention
master
makers
paint
opined that you
legislate but must educate
people into doing the right thing
can't
development
;•
.
potters.
*
of
•
Commerce: Department Secre¬
tary Harriman hopes that by late
1948 or early 1949 the aviation
industry can undertake a share of
demand.
combinations
banker
prodpetioq
lowering
are
sights
quotes Attorney
as
less
or
makers
\
•
Commerce Committee.
plentiful 1947 supply
a
*
rail carriers now
some
in the midst of reorganizing are
against the bill, will so advise the
loan to
❖
there'll be
8|S
*
At least
shortage is ended and
can
told whether—or where—govern¬
Justice
meet
to
will
terms
opin¬
advisory
ions.
revenue.
version
this
a penny's worth,
anywhere
in
theworld. The spirit of the bank is
being violated daily. The Ameri¬
can
members no longer think in
5)
Department for
net
the
to
bill, pocket*
year,
shouldered aside until next
dime
Washington and You
tax
a
the
Committee
Presidential objections. It won't
of
penny-a-bottle
in
before
Successor
Reed
-
vetoed
short-term
speculator-investor,
trying to realize capital gains, must take into account the unrelent¬
ing obligation to contribute this "cut" to the tax pool, irrespective of
how discouraging and unwelcome the recognition of this may be.
This handicap blocks the individual trying to "beat the market"
either by logarithmic chart-reading or other "technical" systems, as
well as the large institution (as Vassar and Yale) determining its
portfolio changes by the most scientific policies of long-term transfers
company
.
■
.
.
—
And
alphabetical jurisdic¬
tional
jealousy has the Justice
Department and Interstate Com¬
now
merce
Commission in court. Some
years
back,
early
.-r-,
the
decree,
van
to
counselors.
Department
now
clines
.
legislators
Justice
but
speaking for grains,
mergers
antitrust
House-approved
continuing
rents
Department is ruling
laws.
100
struction
would violate
Approximately
.
and
quietly on the Senate calen¬
dar,: then
be
shuttled into
conferencewithout Senate ap¬
tion
proposed
*
Wolcott bill,
and
scuttling
industrial con¬
restrictions, will vaca¬
commercial
pro¬
consolidations are
dangled each week before the
reluc¬
fats and oils.
*
that 10 to 20 of every
are
extend licensing power
can
be expected to do so
h<
*
coming
tant to
gressmen,
.
"I do not know how we will end
10
is
their better judgment.
Drumming for the fight against
extension
will be farm Con¬
Attorney General Clark de¬
to be a phophet, says
.
And
against
contempt, wants the
court to step on ICC. Of the out¬
come,
time
30.' Most
Justice
So
%
when
export
controls. Otherwise, there'll be
no such restrictions after June
claims
JD
❖
%
lawmakers must turn to
lines to violate
according
hearings.
Hi
H«
—_.
The
Department
Justice
■
^
charges of monopoly against Al¬
lied Vans were compromised in a
consent decree. Subsequently, ICC
jected
DETROIT
Sacramento
19.
Wheeler
kitty."
Cotton Exchange BIdg.
NEW YORK 4, N. Y.
hearing
Commerce
May
fully
through the exemption of profits from capital gains taxation ir>
England. The U. S. capital gains tax works a heavy penalty on in¬
vestors as well as speculators, and in ways that are often unrealized.
Its importance is often overlooked in stock-purchasing
which is
undertaken to gain advantage from, or hedging against, inflationary
cycles. For the cold fact is that market appreciation simply cannot
❖
CHICAGO
House
bankruptcies,
Congress
sion.
up."
N. Y.
on
day
one
and
through
•'
Chicago Board of Trade
14 Wall Street
2.19%
to
insolvencies
"starts
probably contributed to the popu¬
as related to British fixed-interest
equities, both
larity of British
authorized the
Members
Pacific Coast Exchanges
exempts
The Tax "Kitty"
They
those of the author only.]
Orders Executed on
tax
on
establishing
The incidence of taxation has
ment
—Walter
Established
2.66
Act
Reorganization
standards
methods for avoiding rail
1947,
and
stocks from 4.86 to 4.77%.
on common
Similarly we find that the Britisher has likewise been caught in
"wage-price" squeeze. Since 1935 his capital invested in common
stocks has advanced by 36%, while his cost of living, as reflected
in the British Cost of Living Index, has risen by 45%.
market."
The
goods has left some businesses
from
Bonds
taxables, and
"more
have it.
giving a better
clue to the fu¬ stocks, prices and stops are
ture of the market. Actually still as follows: Anaconda at
nobody really knows what 35, stop 34; Chrysler 85, stop
the industrial trend will be. 83; International Paper 39-40,
It is no secret that the high stop 38, and U. S. Steel 65-66,
prices of plenty of consumers' stop at 64..
go far toward
than average
Government
the downside and the condi¬
tion
of
refunding). From the corporate and government
obligations he might now wish or need to buy, he would suffer even
larger shrinkages, both absolutely and in contrast with the tre¬
mendous rise in his living costs.
Thus, the yield obtainable on
high-grade corporate bonds, as measured b,y the Standard and Poors
Index, has since 1937 declined from 3.3 to 2.5%, on long-term
in the proc¬
long interest
a
Railroad
5)
page
forced
and
-
of
ess
ing stable in such a perform¬
ume of talk about bow busi¬
ance.
I, however, interpret
ness will
pick up, or will eontinue to stay at present levels, (or, at least, try to interpret)
market performance as I see
for the next few months.
If
like to
there could be a reliable an¬ it, not as I would
swer
(Continued from
calls
With the current dull
terest.
decline it is
•
>
❖
a
#
*
publicized
plans like the Newbury port
and similar campaigns can
•
The
they'll be low enough to
will
levels.
come
over
hands
uncomfortable
reach
purchase at spe¬
cific levels seem to be getting prices,' the
fretty
close
to buying
points.is
erhaps
before
tlie week
inventories in
up
manufacturer's
recom¬
mended for
keeps
again
never
stocks
the
of
some
buying power to satisfy
As things stand, markets
1
foreseeable.
to
insuffi¬
demand but
become
Liquidation step-up may bol¬
ster technical position to
this
the
If this
===By WALTER WHYTE
As
see
ironical
It's
for many
Says—
may
market.
it.
Walter
point
the
cient
Markets
proval. Final disposition isn't yet
simply been priced out of
has
Tomorrow's
Thursday, May 15, 1947
now
comes
labor with a>
request that the Supreme Court:
decide
whether
between
a
argument
an
store proprietor
and!
a
union truck driver constitutes:
a
labor dispute. The proprietor
bawled
out
livering
at i the
bread
•
de¬
driver for
the
wrong
time. The union responded
with:
pickets
boy-;
cott.
and
A
labor
a
secondary
lower
said!
court
n<*
involved,,
therefore issued an injunctions
against the union. So the union's?
dispute
lawyers
are
was
drafting
Supreme?
a
Court appeal. Actually
troversy is
would
more
appear
the con¬
important than
—-
the
resultant
court opinion may narrow
tive
union
employers.
operations
puni¬
against
iVolume 165
•
Number 4594
.THE COMMERCIAL & FINANCIAL CHRONICLE
Securities
Acme Electric
filed
26
Corp., Cuba, N. Y.
132,740
Arkansas
shares
($1 par) common stock.
Underwriters—Herrick, Waddell & Co., Inc., and First
Colony Corp.
Offering—To be offered publicly at $5
a share.
Proceeds—Company will receive proceeds from
the sale of 68,880 shares and four
selling stockholders
the proceeds from the sale of 63,860 shares.
Company
also will receive proceeds from the sale of
20,000 war¬
rants for common stock to underwriters at an
aggregate
price of $200.
Of the net proceeds ($292,940) $50,000
will be used to pay current bank
loans; about $20,000
will be used for machinery and equipment, and the re¬
mainder for
working capital.
American
June
27
Broadcasting Co., Inc., N. Y.
filed
950,000 shares ($1 par) common stock.
Underwriter—Dillon, Read & Co. Inc., New York. Offer¬
ing—A maximum of 100,000 shares may be sold by com¬
pany to persons, firms, or corporations with whom the
corporation had network affiliation agreements
on
March
SI.
The remainder will be offered
publicly. Price by
amendment. Proceed®—To prepay notes payable to ac¬
quire radio station WXYZ, to construct broadcast transnaitter for station KGO at San Francisco and for
working
capital.
American
common.
Coach
&
Body Co.,
Cleveland,
Ohio
(letter of notification) 21,000 shares ($5 par)
Price—$12 a share. Offered for subscription to
shareholders of record May 1. Rights expire May 16. No
cmderwriting. To refund current bank indebtedness.
American
Cyanamid Co.,
New York
May 13 filed 391,076 shares ($100 par) cumulative pre¬
ferred, Series A. Underwriter—White, Weld & Co., New
York.
Offering—To be offered for subscription by comstockholders
smon
June
10.
the
on
preferred for each
seven
basis
of
shares of
one
share
common
of
held
new
of
as
Price
by amendment.
Proceeds—To redeem
outstanding 5% cumulative preference stock and to fi¬
nance
expansion
Business—Manufacture
program.
of
chemicals.
Hydraulics, Inc., Sheyboygan, Wis.
(5/16)
April 2 (letter of notification) 50,000 shares of
Offering—Offered
of
one
to
new
stockholders
for each
five
of
record
shares held,
common.
April 15
at $5.50
share. Rights expire May 15. Underwriter—Heronyxnus & Co.,
Sheboygan, Wis., and Lon L. Grier & Co.,
Milwaukee, Wis. For new machinery and for working
capital.
per
American
Machinery Corp., Orlando, Fla.
filed
5
Western
Gas
Co.
16,197 shares of
Berkey & Gay Furniture Co., Grand Rapids,
stock
common
Underwriters—Rauscher, Pierce
&
Co.
Underwriter—Townsend, Graff & Co.
Co., Inc. Price—$3.50
and
Gearhart
&
share. Proceeds—For general
corporate purposes including reduction of bank loans and
outstanding notes.' *
\
V,
'American
Inc., and E. H.
Rollins & Sons Inc.
Offering—Stock will be offered to
Price by amendment. Shares are
being sold
by six stockholders.
the public.
,
July 12 filed 350,000 shares (no par) cumulative first
preference stock, Series A; 300,000 shares of convertible
second preference stock, Series
A, and 1,355,240 shares
stock
(par $5).
Underwriting—Kuhn, Loeb &
Co., New York.
Offering—The 350,000 shares of first
preference stock will be offered in exchange to holders
common
of its 532,996 sharfes of $6 cumulative
convertible prior
preferred stock at the rate of 1.4 shares of first prefer¬
stock for each share of $6
ence
prior preferred.
Shares
preference not issued in exchange will be sold
300,000 shares of second preference
stock will be offered publicly.
The 1,355,240 shares of
of first
Motors,
Inc.,
New
York
March 30,
1946 filed 2,343,105 shs. of common (par
$5)
plus an additional number determinable only after the
results of competitive
bidding are known. Underwriters
—To be filed by amendment. Probable
bidders include
Dillon, Read & Co. Inc., White, Weld & Co., and Shields
(jointly),
and
W.
C.
will
common
stockholders
of
a
be
of
share
new
scribed
offered
for
subscription
to
common
the
company in the ratio of one-third
for each common share held.
Unsub¬
shares
of common will be purchased
by the
Price—Public offering prices by amend¬
Proceeds—Net proceeds will be used to retire all
ment.
unexchanged shares of $6 prior stock and
outstanding 7% preferred stock.
George Eastwood, President, in letter to
to redeem its
,
Dec.
stockholders,
22 said "we have come to the
conclusion it will
not be necessary to issue
any additional shares of com¬
mon stock" as part of
company's refinancing plan.
Atlantic
American Zinc, Lead A Smelting Co., St. Louis
Sept. 6 filed 336,550 shares common stock-(par $1).
Un¬
i
derwriting—No underwriting.
offered -for subscription to
of
(N. J.)
Electric Co.
is
to
enable
holders
to
effect
sales
•
by
k
Berkey & Gay said the shares had been sold in 194*
and 1945 to a group of about 50 persons who
represented
they were purchasing the shares for investment and not
for
distribution.
'
So
far, 231,204 shares have been sold in the open masv
ket and the Commission had raised the
question as !•
whether such sales had the effect of
making the enttoft
offering public. The Commission staff stated that regis¬
tration is required if any of the
remaining 733,575 sharm \
are to be sold.
Price—At market. Proceeds—Go to selling stockholders.
>
5
*
.
,
.
be
-
Blumenthal
determined
by
competitive
(Sidney)
being
bidding.
Probable
bidders include: The First Boston
Corp., and Drexel &
Co.
(jointly); Shields & Co., and White, Weld & Co.
(jointly); Dillon, Read & Co., Inc., and Smith, Barney
Co.
(jointly); Blyth & Co., Inc.; Union Securities
& Co.
1
Inc., New York
Aug. 30 filed 119,706 shares (no par) common and sub¬
scription warrants relating to 30,000 shares thereccL
Underwriting
—
None.
Proceeds
For reimbursement )
—
of
company's treasury for funds expended in
rf£*
demption of 3,907 shares of 7% cumulative preferred ca&
April 1, and for funds deposited in trust for redemption^
Oct. 1 of remaining preferred shares.
Although it wan
proposed to offer the stock for subscription to stock¬
holders at $10 per share, company on Sept. 20 decided
on
to withould action.
'
Bobbi
3
Motor
Car
Corp., Birmingham, Ala.
(letter of notification) 60,000
Price—$5 a share. Company
common.
Underwriters—
To
Corp. Price—To be determined by competitive bidding.
Proceeds—The offering is part of American's plan to
dispose of its holdings of 1,150,000 outstanding shares
of Atlantic
City. The shares remaining after the public
offering will be distributed as dividends on American's
stock. This dividend policy will become effec¬
15 and will continue to the end of
1948.
common
tive June
•
Bearings Co. of America, Lancaster, Pa.
May 8 filed $500,000 of first mortgage 4%% serial con¬
vertible bonds and 60,000
shares
($i par) common.
& Co. and J. W. Brady
Co., St. Louis, Mo. Price by amendment.
Proceeds—
repay bank loan and for general. working funds.
Business—Manufacture of ball bearings.
&
To
Beaunit
12,997 shares of
common
shares
($1
pay)
proposes to offer /
in exchange for its unsecured
promissory notes in the
amount of $64,985 held by dis¬
tributors of company's proposed products.
Underwriting,
the stock will be sold by officers and directors of ti*
company. For completion
under construction.
of
display automobiles
now
one
additional
common
share
for
stockholders
each
two
remaining 40,000 shares
Proceeds—Working capital.
Offering in¬
stock of
the
total common,
offered for sale for cash.
30,000
,
con>-
375,000 shares will be
shares
are reserved fear
issuance upon exercise of warrants attached to preferred
95,000 shares are reserved for issuance upon exer¬
cise of outstanding warrants.
Price — By amendment.
and
Proceeds—Net proceeds, together with other funds, wiB
be used to pay the company's 2% subordinated note tot
the principal amount of $5,268,750 and accrued interest.
Offering date indefinite.
Bowman
ceeds—To
be added to
working capital and used to fi¬
airplane production program.
Business—Manu¬
facture of
airplanes.
Benrus
Watch
Co.,
Inc.,
New
York
April 24 filed 150,000 shares ($1 par)
writer—Hayden, Stone & Co., New
$7,125
York.
Price
a
share;
?
shares
of
5%
Offering price
Underwriter—Estes, Snyder & Co., Topeka,
Kans. To pay outstanding indebtedness and
expenses and
to open five additional stores in Kansas
Pacific Coast Stock Exchanges
OPEN TO 6:30 P,M.
(E.D.S.T.)
Quotations and executions for brokers,
institutions
those
on
which
Pacific
also
Direct
The
FIRST
Coast
Private
BOSTpN
New York
will receive
Sept. 25 filed 12,500 shares ($25 par) 4V2% cumulative
preferred stock and 50,000 shares (200 par)
Underwriter
stock.
common
eastern
York.
share
a
Price—$25
for
Pittsburgh
STREET,
NEW
YORK
possible outstanding
FRANCISCO
*
LOS
ANGELES
$149,300 mortgage liabilities.
.
Brayton
March 24
Flying
Service,
cent cumulative, convertible
shares (10c par) common.
of
Inc.,
one
share of each.
Louis, Mo.
Robertson,
Mo*
(letter of notification) 50,000 shares ($1 par)
preferred and
Price—$5
per
50,009
unit, consisting
Underwriter—White and Co., St.
working capital.
(Continued
on
page
42)
Underwriters and Distributors
of
Corporate and Municipal
Co.
5,
N. Y.
*
HONOLULU
.
For expansion of operating facilities andfofv
Securities
a
^
Offering date indefinite.
including
Kidder,
Founded 1865
Members
New York
Telephone BArclay 7-4300
SAN
—
share for preferred and
a
common.
markets.
Exchange
San Francisco Stock Exchange
Honolulu Stock Exchange
* Los Angeles Stock Exchange
and other principal
Security and Commodity Exchanges
WALL
C. K. Pistell &
Co., Inc.,
$11
Proceeds—7,000 preferred shares
are being sold
by company, the remaining 5,500 pre¬
ferred shares and all of the common are being sold by
present stockholders.
Net proceeds to the company, es¬
timated at $147,500, will be used to prepay to the ex^»
New
Wires
MEMBERS
U
proceeds.
(Harry), Ir.e., Wilmington, Dal.
and
New York Stock
Chicago and other cities
dealers
securities,
have
Dean Witter
CORPORATION
rommon. Under¬
convertible
27^
of
notification) 41,000
cumulative convertible $6 par
preferred.
4$6
(5/19-23)
par*
by
Berbiglia, Inc., Kansas City, Mo.
(letter
per
Braunstein
tent
Under¬
common.
Proceeds—The shares are being sold by
five officers of the
company who will receive proceeds.
12
shades ($1
Alstyne, Noel & Co., New York. Price—
share. Proceeds—Stock is being sold by share¬
holders who
amendment.
Sept.
Philadelphia
writer—Van
are
Aircraft Corp.,
Wichita, Kan.
May 2 filed $2,000,000 of 4%'% convertible sinking fund
debentures
(subordinated), due 1957.
Underwriter—
Blair & Co., Inc., New York. Price
by amendment. Pro¬
nance
Gum,
Sept. 27 filed 268,875
ing postponed indefinitely.
Corporate and Public Financing
.....
purchase warrants for purchase of 30,000 shares of
mon
City, Mo. Offer¬
definitely postponed.
-
10 filed 30,000 shares ($50 par) 5% cumulative
preferred and 500,000 shares ($1 par) common.
Unde»writers—Paul H. Davis & Co. and Stroud & Co., Inc.
Offering — Preferred will have non-detachable stock
being sold by I. Rogosin,
President of Beaunit
Mills, Inc.
in
shares
Price—By
Boston
Boston Store of Chicago, Inc.
Sept.
Mills, Inc., New York
Sept. 27 filed 180,000 shares ($2.50 par) common. Under¬
writer—White, Weld & Co., New York.
Price —By
amendment.
Proceeds—Of the total, 140,000 shares 'are
being sold by St. Regis Paper Co., New York, and the
Offering—Stock will be
field. • Unsubscribed shares will be offered for
subscrip¬
tion to officers and directors of the
company.
-amendment.
statement
of the prospectus.
Mar.
City
March 19 filed 522,416 shares ($10
par) common,
offered by American Gas & Electric Co.
Langley
& Co. and The
^irst Boston Corp. (jointly).
Offerings-Price to public
tby amendment.
Bids—Expected about April 30.
the. ratio
tion
to underwriters. The
Beech
American Water Works
Co., Inc., N. Y.
Co.
Under^
writing—None. Offering—Company said all of the shares
issued and outstanding. The purpose of the registra¬
are
use
Armour and Co., Chicago
■working capital.
&
Feb. 3 filed 733,575 shares ($1 par) capital stock.
per
May 6 (letter of notification) 99,990 shares of 50 cent par
capital stock. Price—$3 a share. No underwriting. For
purchase of manufacturing plant and facilities and for
«
Mich.
(par $5).
Underwriters—Dempsey-Tegeler
Mar. 31 filed 133,000 shares (50c
par) common, of which
10,000 will be offered to officers and key employees.
^
June
&
American
fin ratio
41
Registration
underwriters.
^pril 21
«•
in
-
INDICATES ADDITIONS SINCE PREVIOUS ISSUE
I
June
Now
(2637)
of the New York and Boston Stock Exchanges
'
Boston
Philadelphia
Chicago
42
NEW ISSUE CALENDAR
ly to officers and employees of the company at $45 a
share.
Purchasers must agree not to transfer sthe shares
May 15, 1947
Gonsol. Gas El. Lt. & Pwr. Co. of Bait—Debentures
Grammes (L. F.) & Sons Inc
Preferred
Neptune Meter Co
.Common
for
tional equipment.
Carscor Porcupine Gold Mints,
Hydraulics Inc.,
Stares, Inc..„
—
National Plumbing Pottery Co—
-
Popular Home Products Corp
Common
Common
Preferred
Common
.Common
Continental-United Industries Co. Inc.—-Common
Curlee Clothing Co
Preferred
East Coast Electric * Co.
2 p.m.
.Bonds and Common
(EDT)
Preference and Common
Chemical Co..
Common
Koppers Co., Inc
.Common
Oswego Soy Products Corp,
Common
General Controls Co
Greil Drug &
South Carolina Power Co.
(EDT).
noon
Whites Auto
Bonds and Common
„
.Common
Stores, Inc...
*
May 20, 1947
California Oregon Power Co.
Pref. and Common
Equip. .Trust Ctfs.
Common
(EDT)__
a.m.
of
Georgia Ry—
Ohio-Apex Inc.
Pacific
Missouri
•
program.
400,000 shares of common stock. (Under- underwriters.
Offering—To the (public at
writer—No
$1 a«hare in Canadian funds.
Proceeds—For a variety 4
of purposes in connection with exploration, sinking of
RR.
Equip. Trust Ctfs.
Noon (EDT)__
Central
Mills, Inc., Dunbridge, O.
(letter of notification) $300,000 of first mort¬
gage bonds. Price—$500 per unit. No underwriting. For
retirement of preferred stock, for purchase of two alfalfa
dehydrating plants from Logan County Dehydrators,.Inc.
and for retirement of latter's preferred stock.
March 13
Central Soya Co., Inc., Fort Wayne, Ind.
Aug. 21 filed 90,000 shares (no par) common. Under- writer—None.
Offering—Common shares initially will
subscription to
stockholders at
rate of one share for each 7% shares held. [Unsubscribed
shares will be sold to underwriters. .'Price by amend¬
ment. Proceeds—Working capital, etc.-Offering indefin¬
be offered for
Preferred
Common
Bonds & Pref.
Upper Peninsula Power Co
Reno,
May 23, 1947
May 5 (letter of notification) 1,000,000 shares of (capital
Price—lc a share.
No underwriting. For work¬
Consolidated
Chitwood
Corp.,
Joplin,
Mo.
Webber Showcase & Fixture Co
.Common
—
•
i.'
1947
(letter of notification) 15,000 shares of common.
Price—$10 a share. No underwriting. For mine develop¬
May 5
Cincinnati
Bell Telephone Co.
Suburban
&
14 filed 100,738 shares ($50 par) capital stock.
Underwriting — None.
Offering — For subscription to
common stockholders in the ratio of one share for each
six shares held as of
Claude
Brooklyn
(N.
Y.)
Union Has
&
Brulin
Co.,
Inc., Indianapolis, :lnd.
May 5 (letter of notification) 3,021 shares Class A pre¬
ferred.
Price—$20 a share.
No 'underwriting.
For
working capital.
Burrillville Racing Association, Pawtucket,
Feb. 27 filed 38,500 shares (no par) class A stock.
R. I.
Un¬
derwriter—Barrett & Co., Providence, R. I.
The shares will be offered for subscription
stockholders
at
$20
a
for each share held.
share,
on
Offering—
to class A
the basis of one share
Unsubscribed shares will be offered
share. Proceeds
will be used to finance the cost of completing a race
track at Lincoln, R. I.
at $20
publicly
•
Calaveras
a
share.
Price—$20
a
(letter of notification) 46,585 shares of common.
Price—$1 a share.
No underwriting.
For development
of mining properties.
California
Electric Power
Co., Riverside, Calif.
shares ($50 par) preferred stock.
Underwriting—To be determined by competive bidding.
Probable bidders include Dean Witter & Co.; Blyth &
80,000
filed
Co., Inc.; Otis & Co. Proceeds—To finance
and improvement program.
and
Oregon Power Co.
(5/20)
408,000
be
shares
($20
determined
by
par)
common.
.Under¬
bidding.
and Blyth
Fenner&
Beane and Harriman,
Ripley
Co. (jointly). California
Oregon will sell all of the preferred and 18,000 shares
of the common, Standard Gas ^Electric Co. (parent,)
will sell the remaining 390,000 shares of common/Bids
Invited—Bids for the purchase of the securities will be
received by the company ,at office* of the . Chase National
11
stock it
Broad St.,
61%.
Cleveland
be sold through Bennett, Spanier & Co.,
agent. The shares are being sold on behalf
(O.) Electric Illuminating Co.
New York,
up
to 11
a.m.
(EDT),
Breweries
Ltd., Toronto, Canada
May 14 filed 200,000 shares (no par) common stock.
Underwriting, none. Offering—To be offered to common
stockholders
'
1,714,524 shares to
common
stockholders of North American of record
March 19 at $15 per share to the extent of one Cleve¬
land
for
every
five North
American shares held.
Rights expire May 27. The remaining 133,383 shares
are
to
be
sold, probably through competitive sale
Probable bidders include Dillon, Read & Co. Inc.; The
First Boston Corp.; White, Weld &
Co. and Shields
& Co. (jointly); Kuhn, Loeb & Co. and W. C. Langley
& Co. (jointly); Otis & Co.; Blyth & Co., Inc.; Smith,
Barney & Co..
Proceeds—For prepayment of bank
American
Co.,
notes
loan
which
is
offering
of North American.
Cohart Refractories
officers of the company.
Divco
of the company.
Gas
Baltimore
of
Electric
(5/JL5)
Light &
of
record
finance
June
Canadian subsidiaries
or
2.
Proceeds—For
general
and
to reimburse treasury /for ex¬
expansion
program
of
company
penditures already made.
W
Carnegie Mill-87th Street Corp., New York
May 7 (letter of notification) 10,000 shares ($1 par)
capital stock. Price—-$30 a share. 'Underwriter—Albert
B. Ashforth, Inc., New York.
For part payment -of
apartment house.
^
Detroit
Corp.,
Shares
are
being sold by
a
stockholder. Twin Coach Co.,
Kent, O., which will receive all
proceeds.
Douglas Oil Co. of California,
Clearwater, Calif.
(letter of notification) 11,500 shares ($25 par)
514% cumulative convertible first preferred. To be of¬
fered at a maximum of $26 a share. Underwriters —
Pacific Co. of California, Cruttenden & Co., Pacific
Capital Corp., all of Los Angeles; Brush Slocumb & Co.,
San Francisco; and Adele W. Parker, Clearwater. To
purchase 493 shares of capital stock of G. H. Cherry,
Inc. out of a total of 625 such shares presently outstand¬
ing.
Drackett Co.,
Cincinnati
being sold by Harry R. Drackett, President (6,929
M. Drackett, 7,371 shares). Price
and-Charles
Power Co.
-
debentures,
May 15, 1962. Underwriters—-Harriman Ripley &
Co., Inc., and Alex. Brown & Sons. Offering-—Deben¬
tures are offered at par to common stockholders of
record April 18* on the basis of $100 of debentures for
each,seven shares held.
Rights expire 5 p.m. May >14.
Unsubscribed shares will be offered publicly at $100
shares)
—
By
amendment.
lluraloy Co., Scottdale, Pa.
March 12
common
common
and
Mrs.
(letter of notification) 25,000. shares ($1 par)
behalf of the issuer, 12,500 shares ($1 par)
for the account of Thomas R. Heyward, Jr.;
on
12,500 shares ($1 par) common for the account of
Thomas R. Hayward, Jr.
Price—At market (ap¬
$3.25
proximately
per
share).
&ljohson, Pittsburgh,
Pa.,
Corp., Cleveland.
The
for -working capital.
company
'^ast
($5 par) common. -Under¬
Co., and Lazard Freres &
Co., both of New York. Price by amendment. Proceeds
—The shares are being sold by Corning Glass Works,
New York, and represent 88.8% of theftotal outstanding
Consolidated
"*
April 30 filed 34,963 shares ($1 par) common. Under¬
writers—Reynolds & Co. and Laurence M. Marks & Co.,
both of New York. Price—By amendment. Proceeds—
Co., Louisville, Ky.
Mar. 28 filed 182,520 shares
writers—Harriman Ripley &
common
Chicago,
of three
April ;28 filed 14,300 ($1 par) common shares. Under¬
writer—'Van Alstyne, Noel & Co. Proceeds—Stock is
21,
filed
1,847,908 shares (no par)
common.
Offering—All of the shares are owned by The North
Coast Electric
and
Underwriter—Johnson
The First Cleveland
will use its proceeds
(5/19)
Co.
filed $1,300,000 of first mortgage bonds, Series A,
due 1977, and 60,000 shares of $10 par common. Under¬
writers—To be determined by
competitive bidding.
Probable bidders include Halsey, Stuart & Co. Inc.
(boMs' only); Harris, Hall & Co. (Inc.); Otis & Co.;
Kidder, Peabody & Co.
Offering—To the public. The
Mar. ?8
registration showed that $800,000 of the bonds and all
the common stock are being offered by East Coast
Public Service Co., parent of the registrant. Proceeds—
East (*oast Electric will use proceeds from the sale df
of
•
$500,($00 of bonds (toward the payment of outstanding
iortgage notes and repayment of bank loans. Bids
-Bids for purchase of the bonds will be received
|2 p.m. (EDT), May 19, at Hotel Warwick, 17th
:ust Streets,
Philadelphia.
Edelbrew Brewery, Inc., Brooklyn, N. Y. 7,
unit through the underwriters. Proceeds—Proceeds, *
Dec. affiled 5,000 shares ($100 par) 5% non-cumulative
at $16,507,162, will be used to reimburse its
treasury for capital expenditures and for: general cor- t ; preferred. ^Underwriters—None, coffering—To be offered
at i par to customers, officers and employees of the conrporate purposes including extensions and improvements i
pany. -proceeds — For corporated purposes including
of Its properties and plants.
'
v
•
modernization and Improvement of the manufacturing
per
estimated
Continental-United
Industries
(5/19-23)
Canadian
to
owns
Feb.
May 20.
funds
of oil properties. Company also plans
to Summit Airways, Inc., of whose
funds
due
competitive
Probable bidders include: First Boston Corp.
& Co. Inc. (jointly); Merrill Lynch, Pierce
Bank,
advance
expansion
March 26 filed 60,000 shares ($100 par) cumulative pre¬
writers—-To
and development
to
April 3 filed $16,677,100 15-year 2%% conv.
California
ferred
($1 par) common. Under¬
Offering—Shares will be offered for
subscription to common stockholders on basis of one
share for each 10 shares held.
Price by amendment.
Proceeds—To finance airline operations and acquisition
Mining and Milling Co., San Francisco
May 8
May 5
New York
Inc.,
writing—None.
May 3 filed 70,000 shares of cumulative preferred stock
($100 par). Underwriters—To be filed by amendment.
Bids .Rejected—Company July 23 rejected two bids receivea tor the stock.
Blyth & Co,, Inc., and F. S. Mow
ley & Co. and associates submitted a bid of 100.06 fori a
4.30% dividend. Harriman Ripley & Co. and Mellon
Securities Corp. bid 100.779 form 4.40% dividend.
In¬
definitely postponed.
•
Neon,
March 28 filed 223,954 shares
Co.
working capital.
March 13
Preferred
(Continued from page 41)
For
May 8 (letter of notification) 15,000 shares Class B com¬
mon.
Price—At market.
All or part of the securities
Price at par. Pro¬
for construction
May 12, 1947.
expenditures and for additional improvements.
Libby, McNeill & Libby
will receive proceeds.
who
Disticraft, Inc., Chicago
ceeds—To reimburse company treasury
June 2,
Detroit, Mich.
Sept. 25 filed 70,920 shares ($1 par) common. Under¬
writer
C. G. McDonald & Co., Detroit. Price — $5IHI
a share. Proceeds — Stock is being sold by six share¬
as
April
.Pref. and Common
Bonds
1
-
Detroit Typesetting Co.,
ment.
May 26, 1947
Lay (H. W.) & Co., Inc
(Netherlands, Kingdom of—
porate purposes.
may
•
( 5/16)
shares of common(par* $1), Issuable upon exercise of 49,900 option war¬
rants.
Each warrant entitles holder to purchase 'lkshare of common at $6 per share beginning May 15,
1947, and terminating May 15, 1950. Proceeds for cor¬
Nev.
stock.
Equip. Trust Ctfs.
(MST)
Phipps Stores,4nc., Scranton, Pa.
May "9 (letter of notification), 24,950
Boston.
Recovery Corp.,
Denver & Rio Grande Western RR.
Noon
Dean
•
holders
;
Electric
Chemical
ing capital.
May 21, 1947
Lerner Stores Corp...,
Lithium Corp. of America..
(Cyprus :Mln«s, Ltd., Montreal, Canada
May 31 filed 500,000 shares of common stock (par $1).
Underwriters—Sabiston-Hughes, Ltd., Toronto.
Offer¬
ing—Shares will be offered to the public at 75 cents a
share.
Proceeds—Net proceeds, estimated at $300,(KH^
Will be used for mining operations.
common
itely postponed.
•
(5/19-23)
April 18 filed 22,500 shares of 4V2% ($100 par) cumu¬
lative preferred.
Underwriter—Stifel, Nicolaus & Co.,
Inc., St. Louis.
Offering—The preferred shares will be,
(offered for exchange, dollar for dollar, for the company's
outstanding Class A common, valued at $31.50 each.
Unexchanged shares of new preferred will be offered*
publicly at $100 each. Proceeds—Proceeds will be used
to redeem unexchanged shares of Class A common * at
$31.50 each and to carry out the company's expansion
June 24 filed
shafts, diamond drilling and working capital.
May 19, 1947
e..
-
Gum
Bowman
Central
Ltd., of Toronto,
Ontario
Dean Phipps
11
*
period of five years. Price—$45 a share. Proceeds
be added to general funds for purchase of addi¬
a
—To
May 16, 1947
American
;
($1 par) common.
Under¬
Offering—Shares will be offered direct¬
31 filed 10,000 shares
writing—None.
(Showing probable date of offering)
12
'Curlee ClothingXo., St. Louis
Omaha, Neb.
Carpenter Paper Co.,
Mar.
Thursday, "May 15, T947<
FINANCIAL "CHRONICLE
THE COMMERCIAL &
(2638)
plant 'and machinery and
Co., Inc.
t"
n
($1 par) common. Under¬
writers—Aronson, Hall & Co., and P. W. Brooks & Co.,
New York. ^Offering—Of the total .102,500 .shares are
Mar. 28 filed .152,500 shares
being offered by selling stockholders. 'Price'$8/75 per
share.
Proceeds—Company,
which
is selling 50,000
shares, will apply proceeds to general funds.
Crawford Clothes, Inc., L.
Aug.
9
filed 300,000 shares
common
stock.
Price by
amendment.
Proceeds—Go to Joseph Levy, President,
selling stockholders. Offering date indefinite.
Underwriters—First Boston
Corp.,NewYork.
March
•5 '
•
12
(letter
of notification)
Md.
$250,000 first mort¬
10-year 5% bonds, and 250,000 shares (10.cents par)
common.
Price—$550 per unit consisting of $500 bond,
and 500 shares of common.
No underwriting. For mine
gage
development.
Fairport
I. City, N. Y.
($5 par)
equipment.
■■
Elkhorn-Beaverhead Mines Co., Baltimore,
♦
.
Materials
Corp.,
New York
April ($9 (letter /of notification) 2,250 shares (no [par)
$5 cumulative preferred,and 22,500 shares (lc par) com-i
mon. iPrice—$100.50 per unit, consisting of one share of
preferred
and
10
shares of
common.
Underwriter—
Number
.yolume 165
4fcl1
i
11
4594
THE COMMERCIAL &
FINANCIAL CHRONICLE
'
II
"Eastman.- Dillon &
Co., New York.
To purchase machinery and equipment and for other working capital
and
,
Federal Electric Products Co.,
Feb.
*
26, filed 150,000 shares ($1 par)
Underwriter—E.
Gillespie
class A.
common
&
Gulf Status
a
Proceeds—Proceeds of approximately
•>
Newark, N. J.
Co;,, Inc., New York.
.Share.
The registration states principal stockholder has granted the underwriters an option
to purchase 45,000 shares of Class B ($1
par) common
at $7.25 a share, exercisable for a period of three
years.
Price—$7.25
»
F.
$870,000, together
.
with $755,000 of other bonds, will be used to
repay, the
balance of $34,000 of a property
mortgage, to pay off
loans in the amount of $1,295,000 to Bankers Commer¬
cial Corp., New York, and for additional
,
•
a
.
•
Films Inc., New York
,r June 25, filed 100,000 shares ($5 par) class A stock and
300,000 shares (10 cent par) common stock, of which
200,000 shares reserved for conversion of class A. Each
•
j
shares
of
class
shares of
A
stock
is
stock.
common
dell &
^
'
'
:
•
Franklin
May. 7
■
Mining Co., Denver
-
.
Hawaiian Electric Co.,
■
•
i
;«
....
j
Dry Foods, Inc., Columbia, 8.
K:
C.; y " - :
30 filed 450^000 shares (100
par) common. /Under¬
writer—Newkirk & Banks, Inc.
Offering—Of the total
pompany is selling 350,000 shares and two
stockholders,.
:
potatoes, plant expansion,
/additional storage facilities, research and
development
work and working
Capital.
GlatfeSter
(P.
H.)
Co.,
Spring Brook,
,
felter, trustees for Sundry Trusts, at $12.50
Business—Manufacture of wood pulp paper.
a
warrants.'
warrant.
.
cise
of
Glat-
-<
share."
•
postponed.
Grammes
(L.
F.)
•
(5/15-16)
;
May 5 (letter
•
stock
;
(no
&
Sons, Inc., Allentown, Pa.
of notification) 4,000 shares
$1.50 preferred
par).
Price—$25. Underwriter—Warren
York & Co., Inc. Working capital.
Greil
Drug & Chemical
(5/19-23)
"
Co.,
Pittsburgh
.
Griggs, Cooper & Co., St. Paul, Minn.
Bept. 3
common.
(letter
of notification)
12,000 shares ($1 par)
Underwriters—Kalman & Co., Inc., St Paul.
Price—$25 a share. Proceeds
modernization program.
Offering
For
—
•
Grolier
Society,
Inc.,
improvement and
indefinitely postponed.
New
York
April 2, 1947
'
-
(by amendment), 30,000 shares at
4%%
cumulative preferred stock
($50 par) and 170,000 shares
Of $1 par common stock.
Underwriters—Riter
&
,
Co.
be used to redeem
$21,000,000 of 4% first
mortgage bonds, due 1970, at $105.
Proceeds from the
sale of news preferred will be used to redeem un¬
exchanged shares of old preferred.
'
Hoppers Co. Inc., Pittsburgh
April 30 filed 200,000 shares of
Underwriter—The
First
,
cumulative
preferred
into
common
will
.Instruments
Corp. of America, Lansdale, Pa.
May 7 l(letter of notification) 9,000 shares ($30 par) 5%
cumulative preferred and 19,000 shares
($1 par) common.
Price—$30 a preferred share and $1 a common share.
No underwriting.
For payment of obligations and for
working capital.
International Dross Co., Inc., Now York
Aug. 28 filed 140;000 shares of common stock (par $1).
Underwriter—Otis & Co. Offering—Price $10
per share.
Proceeds—Selling stockholders will receive proceeds.
Offering date indefinite.
Interstate
Power
Co.,
Dubuque,
Lakefront
Realty
be
determined
by
competitive
bid¬
ding.
Probable bidders; The First Boston Corp.; Halsey,
Stuart & Co. Inc. (bonds
only), and Dillon, Read & Co.
Inc.
(stock only).
nance new
Proceeds—For
debt
retirement,
fi¬
construction and for working capital. Business
—Public utility.
■
■
1
■
:
'
_
•
•
•>
Corp.,
Chicago
bers of Lake Shore Club.
—To
Price—$10
purchase property presently
La
Plant-Choate
a share.
leased.
Proceeds
Manufacturing Co.,
Inc.,
cumulative con¬
Underwriter—Paul H. Davis & Co.;
Chicago. Price — By amendment. Proceeds—To be added
to working capital and will be used in part to reduce
vertible preferred.
,
current
Lay
bank
loans.
(H. W.)
Business
—
Manufacture
& Co., Inc., Atlanta
of
earth
(5/26)
16,000 shares ($50 par) 5% cumulative
convertible preferred and 15,000 shares ($1 par) com¬
mon.
Underwriter—Clement
A.
Evans
&
Co., Inc.,
Atlanta.
Offering—All but 3,000 shares of the common
will be sold publicly at $6.50 a share. The preferred will
be offered to the public at $50 a share.
The 3,000 shares
of common not sold publicly will be offered to
company
officers and employees at $5 each.
Proceeds—For con¬
18 filed
struction of
new
plants at Atlanta and Memphis, Tenn.
Lerner Stores Corp.,
Baltimore, Md.
(5/21)
May 2 filed 100,000 shares
($100 par) cumulative pre¬
ferred.
Underwriter—Merrill Lynch, Pierce, Fenner &
Beane, N. Y. Price by amendment. Proceeds—To retire
31,870 shares of 4V2% preferred at $105 a share and to
repay $4,500,000 bank loan.
Libby, McNeill & Libby
(6/2)
April 30 filed 100,000 shares (no par) preferred stock.
Underwriter
Glore, Forgan & Co. Offering — Stock¬
—
holders of record May 19 will be given the right to sub¬
scribe to the new stock at the rate of one share of
Iowa
May 13 filed $19,400,000 of first mortgage bonds, due
1977, and 3,000,000 shares ($3.50 par) capital stock.
Underwriters—To
Price—$10 a share.
For working
April 30 filed 60,000 shares ($25 par)
Decatur, III.
prior to the redemption
be added to
treasury funds.
Company has asked the SEC to defer action on its fi¬
nancing, program because of present market conditions.
•
par).
April 14 filed 100,000 shares ($10 par) common.
Under¬
writing—The underwriting will be handled by Lake
Shore Club of Chicago which organized the registrant to
carry out the proposed transactions.
Offering—To mem¬
April
balance
($10
capital.
pany's ireasury for construction expenditures.
The
Proceeds—The
construction of plants at
Underwriter—White, Noble & Co., Detroit.
moving equipment.
converted
(par $10).
Corp.
Kuhlman Electric Co., Bay
City, Mich.
April 28 (letter of notification) 30,000 shares of 5%%
Underwriters—By competitive bidding. Probable bid¬
ders include Blyth & Co., Inc.; The First Boston
Corp.;
W. E. Hutton & Co.
Proceeds—Net proceeds from the
sale of preferred will be used to reimburse the com¬
date.
Boston
Cedar Rapids, Iowa
June. 17; filed 200,000 shares
($50 par) cumulative pre¬
ferred stock and. 966,870 shares (no par) common stock.
not
(5/19-23)
common stock
will be used for the
Kobuta, Pa., at a cost of approximately $4,750,000, the
bonversion of a refinery at Oil
City, Pa., into a synthetic
organic chemical plant at a cost of about $1,250,000 and
for the completion of facilities at
Kearney, N. J., at a
cost of $1,000,000.
\
•
W.
May 5 (letter of notification) 150,000 shares of common
stock. Price—$1. Underwriter—Willis E.
Burnside & Co.,
Inc.; New York. Proceeds to buy all assets of Mid-State
Pharmacal Co., Inc. of Bedford,
Ind., which makes a
complete line of over 150 drug items, and for
additional
working capital. Expected to be blue-skied -in states of
New York, Perm., Ohio,
Indiana, Georgia and Alabama.
-
:
demption of 5% cumulative convertible preferred stock
Alstyne, Noel & Co.
Offering—The 300,000 shares are
Issued and outstanding and
being sold for the account
of certain stockholders.
Company has also issued 55,000
1 stock purchase warrants to the
selling stockholders at
10 cents a share entitling them to
purchase up to Aug. 1,
1949, common stock of the company at $11 a share.
Price
hi amendment. Offering temporarily
full registration will be filed later
a
~
Net pro¬
ceeds from the sale ^of common will be
applied for re¬
reserved for issuance
upon the exer¬
purchase warrants.
Underwriter — Van
are
stock
sold
through securities
S. Dickson & Co., Char¬
Price—$5.50 a preferred share and 2 cents a
Underwriter—Amos Treat & Co., New YOrk.
Illinois Power Co.,
Aug. 28 filed 355,000 shares ($1 par)
common, of which
55,000 shares
"
To be added to working capital.
It is expected that
with the SEC.
r'
Glensder Textile Corp., Now York
„
"
notification) 54,350 shares of cumulative
convertible preferred and 50,000 common stock
purchase
> common
H.
New York.
Price—$3.50 a
proceeds will be used to pay
Dec. 3 (letter of
Pa.
Philadelphia.
Price—By amendment.
Proceeds—For plant
develop¬
ment program.
In addition, company said it also
pro¬
poses to sell at a later date $3,000,000 first
mortgage
3%% sinking fund bonds due 1967 to the New
York Life
Co. and 40,000 shares of ($10
par)
to Provident Trust Co. of
Philadelphia and P.
bonds will
pre-
Hy-Grade Supply Co., Oklahoma City
-
Co.,
Insurance
preferred
junior preferred.
Shares of newpreferred not issued in exchange will be sold at competi¬
tive bidding.
Price to be
determined by competi¬
tive bidding.
Proceeds—Proceeds from the sale of new
for each two shares of
money
'
\
•
outstanding ($100 par)
6% preferred and ($50 par) junior preferred.
The basis ;
exchange will be one share of new preferred for each
share of 6% preferred and one share of new
Honolulu
obligations, purchase helicopters and equipment and for
lotte, N. C.
May 14 filed 6,243 shares 5% ($100 par) cumulative
first
preferred.
Underwriter—Stroud &
-
(jointly). Offering—Bonds will
be offered publicly while
preferred stock initially will
be offered in exchange for its
Underwriters for
Group, Inc., Charlotte, N. C.
April 24 "(letter of notification) 8,000 shares ($25
par)
5Vz% cumulative, convertible preferred.
Price—$25 a
.
•
Ltd.,
share. ^Underwriting—To
be
dealers which may include R.
I
of
*
,
com¬
Co., Inc.; The First Boston Corp.; Halsey, Stuart & Co. '
(bonds); Union Securities Corp. and Merrill Lynch,
Pierce, Fenner & Beane (jointly) and Lehman Brothers
Bechtel,
Home Finance
General Controls Co.,
Glendale, Calif. (5/19-23)
April 24 filed 30,000 shares ($25 par) 6% cumulative
preferred and 10,000 shares ($5 par) common.
Undcrwriter—Wagenseller & Durst, Inc., and Lester & Co.,
both of Los Angeles.
Price—$25 a preferred share and
$33 a common share. Proceeds—To repay
$750,000 note
; and for working capital.
par
underwriting.
and Lazard Freres & Co.
working capital.
"
No
Inc.
capital.
Preceeds—Net
To
1977, and 130,000 shares ($100 par) cumulative pre¬
Underwriters—To be determined by competitive
bidding. Probable bidders for securities include Blyth &
Bros'lnc.,
share.
. ;
par)
due
HedwinCorp.,Baltimore, Mil.
^
(10c
underwriting.
ferred.
HeHcopter Afr Transport, Inc., Camden, N. J.
March 14 filed 270,000 shares of
capital stock. Under-
Roland E. Fulmer and Louis H.
Newkirk, Jr., are selling.
the remaining 100,000 shares.
Price—$6 a share. Pro¬
ceeds—For purchase of sweet
No
Kentucky Utilities Co., Lexington, Ky.
May 9 filed $24,000,000 of first mortgage bonds, Series A,
May-2 (letten-nftoiiutification) 5,000 shares ($10 par) <6%
preferred and>14*090 shares ($5 par) common. Price—
$15 per iiinR,. cohsisting of one share of each. No under-
wrift^i v#bivwdrking
20,000 shares
share.
a
^
•
com¬
promissory notes and to-reimburse its treasury for
vious constraetion ^expenditures.
e
Fresh
-
./
Supervisors, InCi, and two officers of the company. For
payment of. balance of property lease and mine
develop.......
share.
(letter of notification)
Price—10 cents
common ;
Denver, Colo.
mon.
To be sold at market price.
For general corporate purposes.
Mar. 31 -filed j$5,000,000 first mortgage
bonds, series F,
due 1977.
Underwriters—Dillon, Read & Co., Inc., New
York, and Dean Witter & /Co., San Francisco. Price by
amendment: Proceeds—To repay
$3,000,000 of short term
;
common;
iheat.
a
[
i
•
the offering were not named.
(letter of notification) 50,000 shares ($1 par)
of which 25,000 shares will be offered at
$L
/©nd25,000 shares at/$125. Underwriting — Investments
^
stockholders.- v Price—$18.75
City Mining Co.,
Jewel Tea Co., Inc.,
Barrington, III.
May 9 (letter of notification) $300,000 of no
100 shares ($2 par)
behalf of John S. Bechtel and Freda R.
Under-
Price—By
common.
Chicago.
develop mines.
Hastings Manufacturing, Hastings, Mich.
mon on
"
•
stock.
filed
May 9 (letter of notification)
Jefferson
May 5
120,000 shares ($1 par) common stock.
Underwriters—Van Alstyne, Noel &
Co., New York, and
Johnston, Jjfemon & Co., Washington, D. C.
Offering—
To be offered to the public at
$5 a share. ProceedsCompany is selling 50,000 shares and stockholders are
selling 75^000 shares. The company will use its proceeds
to pay the costs of opening additional
stores and to ex¬
pand merchandise in its existing stores.
Offering tem¬
porarily postponed.
•:
initially convertible into. 2
Underwriter—Herrick, Wad-
Co., Inc., New York.
Offering — To be offered
/.publicly at $8.10 a unit consisting of one share of class A
; stock and one share of common stock.
Proceeds—$201,000 for retirement of 2,010 shares
($100 par) preferred
; Stock at $100 a share; remaining proceeds, together .with
;1 other funds, will be used for production of educational
films."
•
H«rtfleld Stores, Inc., Los Angelas
27
,
Proceeds—The shares, which constitute
ap¬
proximately 48.5% of company's outstanding
stock, are being sold to stockholders.
(Harry), Inc., Detroit
writers—F. Eberstadt & Co., Inc., New
York, and Watling, Lerchen & Co., Detroit. Price by amendment. Proceeds—To equip and improve recently acquired Cleveland, O. plant. Offering postponed.
..
amendment.
Price—$11.50
Proceeds—Purpose of offering is to
carry out
provision of dissolution plan of Engineers
approved by
June
($1 par)
writer—Sills, Minton & Co., Inc.,
Utilities Co.,
share.
: :
43
Jahn & Oilier Engraving Co.
Feb. 26, filed 102,000 shares
the Commission.
,
Ferguson
Mar. 31 filed 100,000 shares ($50 par) 4%% cumulative
preferred and 250,000 shares ($1 par) common. Under¬
(2639)
Proceeds—Part of the proceeds will be used to
pay mort¬
gage debt of $10,578,000 and balance will be added to
general funds.
to
Baton Rouge, La.
Jan. 20 filed 1,009,968 shares
(no par) common. Underwriter—None.
Offering—The shares will be offered for
subscription to common stockholders of Gulf
States'
parent, Engineers Public Service Co., New York.
The
subscription basis will be one share of Gulf
States stock
for each share of Engineers common
held.
a
working capital.
Offering—tJnderwriters
purehase from the company 30,000 shares of
preferred
70;000 shares of common; and from Fred
P. Murphy
andJ. C. Graham, Jr.,
100,000 shares of issued and out¬
standing common.
Proceeds—To retire $6 cumulative
preferred, balance for reduction of bank loans.
-
Requirements.
.
Hemphill, Noyes & Co.
•:
Iowa-Illinois Gas & Electric Co.
Feb. 15 filed $22,000,000 of first mortgage bonds due 1977.
Underwriter—To be determined by competitive bidding.
Probable bidders include Halsey, Stuart & Co. Inc.; The
First Boston Corp.; Glore, Forgan & Co.; Blyth & Co.,
Inc.; Harriman Ripley & Co.; Harris, Hall & Co. (Inc.).
preferred for each 36 shares of common owned. Rights
expire June 2. Proceeds—The money will be used to
complete a plant at Sunnyvale, Calif., and for other cor¬
porate purposes.
Lithium Corp. of America,
Minneapolis
(5/21)
April 2 (letter of notification) 85,000 shares of common
and 42,500 common stock warrants not exercisable until
May 1, 1948. Price—$3 a common share and two cents
a warrant.
Underwriter—Hautz, Engel & Andrews, New
York.
For mine development and for working capital.
McCormack
&
Co.,
San
Francisco
April 14 (letter of notification) 25,000 shares
(Continued
on
page
44)
($1 par)
44
,
*,
(Continued from page 43)
,
■
,
/.
■
$225,000 of 6% certificates of indebtedness and
be issued on exercise
granted by the certificates of indebtedness.
The common will be offered at $1 a share and the cer¬
tificates at face amount.' Hannaford & Talbot will be
15,300 shares ($1 par) common to
agent for the sale.
Proceeds to be used to acquire
all the assets of McCormack & Co., a going business.
Under¬
Price—
•
Business—Mining.
opment of mining claims.
(J. W.) Inc., Brooklyn, N.
Mays
York.
ceeds for
V.
New Brunswick
Acceptance
California,
of
./•
Corp.
(letter of notification) $146,900 10-year deben¬
series.
To be sold at face amounts of $100,
$500
and
$1,000.
Underwriter—Guardian
Securities
Corp., San Francisco.
For payment of short term notes
tures, 4%
or
for other corporate
March 26 filed
erties of New Brunswick
purposes.
Proceeds—For
Gas & Oilfields, Ltd.
•
due 1969.
competitive bid¬
ding. Probable bidders—Dillon, Reed & Co., Inc.; Hal¬
sey, Stuart & Co. Inc.; The First Boston Corp.; Harris,
Hall & Co. (Inc.). Price—To be be determined by com¬
petitive
bidding.
Proceeds — Net
proceeds,
together
with funds
to
be
Common shares
determined
received
the
from
Underwriters
by
sale
of
struction
and
treasury
share.
....
•
Nutrine
Candy Co.,
May 2 filed $8,500,000 of first mortgage bonds, due 1977.
Underwriter—To be determined by competitive bidding.
•
-
Chicago
■.
.
i
being sold by L. F; Rodgers, " Dallas, Tex., /. and betterments/ Business—Manufacturer • of candy,
and principal stockholder,: who-will- receive
Ohio-Apex, Inc., Nftro, W. Va. (5/20)
proceeds."
„■■■•:'
*■
'Vis/
—Shares
of-Aipqric^ >fl^Y*-|§£
Motors Securities Co.,
Feb.
Old
>*
*\.
filed $250,000 collateral trust notes, series 118
inclusive, with 4% interest from maturity. Under¬
writing—No underwriting.
Proceeds—For purchase of
automobile time sales paper which is its principal busi¬
19
(G. C.)
Co., McKeesport, Pa.
Corp.,
Lafayette,
of
•
Drugs,
Inc.,
St.
Louis,
(N. Y.)
Soy Products Corp.
plant, additional working capital, etc.
Peninsular
Telephone
12 filed 16,079 shares
Co.,-Tampa,
(no par)
Co., N. Y.
Mo.
ceeds—For
■'#,
13
filed
Securities
300,000
Underwriter—Calvin
shares
(5/16)
Co.,
Inc.,
New York;
($1
par)
capital
stock.
Bullock, New York, "is the exclu¬
Pro¬
for
Business—Telephone serv¬
sot
Price—The stocks will/be sold at $105 per
unit consisting of one share of preferred and one share
of common.
Proceeds—To be used in organization of
company.
business.
•/;•
.
.....
,J
.
.
Is' Republic PicturesCorp^ New York u
Registration originaliy IQed/
llo covered 184J$t
cumidativevconYerttbte preferred ($10 par,>
Ga.
Retail Credit Co., Atlanta,
e
May 8 (letter of notification) 5,383 shares (no par) com-*
mon,
Price—$50 a share. No underwriting. For work¬
ing capital.
Salant &
28
Salant, Inc., New York
filed
by amendment.
Proceeds—Shares are being
stockholders who will receive proceeds.
Seaboard
•
Container Corp.,
stock*
Price
sold by 13
Philadelphia
($20 par) 5% cumulative con¬
vertible preferred and 75,000 shares ($1 par) common.
Underwriter—Herrick, Waddell & Co., Inc., New York*
price—$20 a preferred share and $9 a common share.
Proceeds—The company will receive proceeds from the
sale of all the preferred and 25,000 shares of the com¬
mon.
The remaining shares of common are being sold
by stockholders.
Company will use its proceeds to re¬
deem $250,000 of 5-year debentures and to repay a
$450,000 bank loan. The balance will be used to finance
construction of a new plant at Bristol, Pa.
BusinessManufacture of corrugated fibre shipping containers/"* y
'
.
Newark, O.
Co. and G. L. Ohrstrom & Co., New
York. Price—$20 a
and to replace
Working capital expended in purchase of building from
RFC and to complete construction of a building.
■hare. Proeeedsr—For payment of loans
Plg'irWhistle Corp., San Francisco
Truck Corp., Albiop, Mich.
Service Caster &
Sept. 27 filed 100,000 shares ($20 par) cumulative con¬
vertible preferred. Underwriter—Van Alstyne, Noel &
'
"
Dec. 26 filed 50,000 shares (par $7.50) cumulative con¬
vertible prior preferred $2 dividend stock.
Underwriter
sive distributor of the company's securities.
Price based
—G. Brashears. & Co., Los Angeles.
Price by
on market price.
Proceeds—For investment/
Business '
ment. Proceeds—23,481 shares are'being issued
-—Investment business. »
•
«•<
.>«.
offer¬
ice business.
(letter
Nation-Wide
May
Under¬
plant expansion and Improvements and
general corporate purposes.
of notification), 30,000 shares of 5V2%
cumulative preferred stock
(par $10).
Underwriting,
none.
To be offered at par./ To construct and equip.
a
plant for manufacture of plumbing pottery and other \
types of plumbing fixtures.
./•, ;
...
May 9
Fla.
common.
has not determined whether to make a public
ing of unsubscribed shares.
Price—$33 a share.
Pilaris Tire & Rubber Co.,
National Plumbing Pottery
par) common. Underwrite*'
Rolph, Vice-President; and director
Martin
240,000 shares-($2 par) capital
Underwriter—Eastman, Dillon & Co., New York.
(5/19)
pany
April 30 (letter of notification) 9,000 shares of 6% cumu¬
lative preferred
($10 par).
Price—$10 a share.
No
underwriting. For additional working capital.
•
Ky.
Inc., Louisville,
writing—None. Offering—The shares will be offered for
subscription to common stockholders on the basis of one
share for each ten shares held as of June 9.
The com¬
com¬
a
share.
No underwriting.
To
subsidiary engaged in mortgage loan business.
Package
;
filed
Oswego
May
Price—$12.50
National
ferred and 25,000 shares (no
—John
May 9 filed 75,000 shares
Ind.
May 5 (letter of notification) 8,000 shares ($1 par)
mon.
Poindexter Distillery,
May 12 (letter of notification) 144,000 common shares
(par $1). Price — $2 per share. Underwriters — Cohu &
Torrey and Herrick, Waddell & Co., Inc.
Completion
stock
•
Clcmes
Refrigerated Cargoes, Inc., New York . ,
.
filed 25,000 shares ($100 par} 6% cumulative pie-
—To be added to working capital.
postponed.
National
Pa'ys6n, Vice-President. Tucker, Anthony &
"
•
- *
t
Feb. 3
March
common
S.
Co., is broker for the sale.
Byllesby & Co., both of Chicago. Price—At par. Proceeds
(par $1).
Underwriter—Smith, Barney & Co.
Price by amend¬
ment.
Proceeds—Redemption of outstanding 4%% pre¬
ferred stock at $109 a share plus dividends. Indefinitely
finance
31
finance company.
Murphy
;
,
Worcester, Mass.
Reed-Prentice Corp.,
chares of $1
par) common shares into which the preferred is conver¬
tible.
Underwriters—F.
S. Yantis & Co., and H. M.
•
•
.
50,000 shares ($20 par) 5% convertible
cumulative preferred and an unspecified number of ($1
Mar.
Inc., Shreveport, La.
June 13 filed 250.000 shares of
Ohio
500 shares ($100 par)
No underwriting. For
-
to 120
ness as a
Cleveland,
Inc.,
,
.
-
»
Systems,
) and 277,231 shares (50c par) couMBOnrftoek, with, Sterling^
April. 22 filed 75,000 shares ($1 par) common.
Undfer-" >
Grace & Go/ as underwriters.
Company has decided ltd
'
writer—Doolittlfe, Schbeilkopf & Co:, Buffalo; N Y: PTrce
Issue 454*465 shares of common stock only, which will lw
by amendment:
Proceeds—Shares - are being' sold "by
/ offered for subecriptron to StoririmMwra of record Bept
six stockholders who will receive proceeds:, / Business—
5 to the extent of one share for eachrfiveheld. Issue will
Manufacture of plasticizers and chemicals.*
not; be' underwritten, f
•, :
$3,000,000 12-year debentures, due. 1959.
Underwriter—Eastman, Dillon & Co., New York. Prjee
by amendment. Proceeds—To retire outstanding bank
loans in amount of $4,080,000, with the. balance applied
to general corporate purposes.
*- filed
:
Charles
Treasurer
■
Radio
April 7 (letter of notification)'5,000shares ($2.50 par)
common.
Price—At market.. Being sold on behalf of
■
Mar. 31
explora-
.
,
y;> [ Mwrif Wan Corp.;
Montreal
shares (500 par) capital stock.
B. Soden, Montreal, director of
"
-
,
^
100,000
May 8 (letter of notification)
preferred.
Price—$100 a share.
working capital.
-
three stockholders who will receive proceeds.
Business
Halsey, Stuart & Co. Inc.; The
—Manufacture of candy.'/
/
"
First Boston Corp, and W. C. Langley & Co. (jointly);
White, Weld- & Co. and Shields & Go. (jointly). Proceeds u
*"
/
O'Briens of California, Inc./ San Jose/ Calif.- V.
^Approximately $6,000*000 will be added to caish furids
*■
and will be used in- part, to finance additional construc¬
April-id filed 20J)00 sharesr of $f.35 cumulative* preferred
1
tion.., The remaining $2*500,000 will be put in trusttinder *nstodkrv'(parv $25jr,*witH warrants "and 40,000 shares'
common stock
the terms of its mortgage and deed of trust.
(no par):
Warrants for common stock
;/-•,' /
may be exercised through April 1950 at $10 per share,
:*;■ Missouri Edison Co., Louisiana, Mo.:/
through April 1952 at $11 per share and through April
1953 at $12 per share.: Underwriter—Mitchum, Tully &
May 7 filed 80.000 shares ($5 par) common. Underwriter
Co.
Proceeds—To repay bank loans anchfOr additions
—Blair & Co., New York. Price—$10.50 a share. Proceeds
Probable bidders include
filed
Price—500 a share. Proceeds—For
tion and development of mining property. .
Harrison, N. J.
May 8 filed 100,000 shares ($1 par) common.
Underwriter—Stifel,
Nicolaus- &
Co.,-* • Chicago.' Price - by
amendment.
Proceeds—The offering is being made by
Mississippi Power & Light Co., Jackson, Miss.
13
Underwriter—Robert
Business—Manufacture of chemicals.
ing and an office building and for purchase of machin¬
ery and equipment.
\
;
; '
I
Quebec Gold Rocks Exploration Ltd.,
Nov.
25,000 shares
filed
Probable bidders include Halsey, Stuart &
The First Boston Corp.; Kidder, Peabody &
Proceeds—To finance in part a proposed $26,868,700
Inc.;
Co.
($100 par) cumulative pre¬
Underwriter—Paine, Webber, Jackson
& Curtis, New York.
Price by amendment. Proceeds—
To repay $1,500,000 bank loan and for working capital.
9
Hampshire
New
of
Co.
construction program.
ferred, series A.
($5 par) common. Under¬
Angeles. 1 Price—$11.50 a
Proceeds—For construction of new plant build¬
March 25 filed 58,000 shares
writer—Lester & Co., Los
Service
company.
Nopco Chemical Co.,
May
Los Angeles
Appliance Corp.,
Co.
*
•
Public
,
tive bidding.
with simplification plan.
reimburse
expenditures.
to
*
Mission
bid¬
To be determined by competitive
publicly held debt of three subsidiaries: New England
Power Association; North Boston Lighting Properties
and Massachusetts Utilities Associates in compliance
additional
Michigan's parent, American Light &
equipment program and
for previous construction
—
Probable bidders include Halsey, Stuart & Co.
Inc.; The First Boston Corp.; White, Weld & Co., and
Kidder, Peabody>& Co. (jointly). Purpose—Proceeds of
new
debentures
will be
used in part to discharge
ding.
Co., will be used to finance its property con¬
Traction
its
to
be
'
May 12 filed $4,500,000 of first mortgage bonds, Series
due 1977.
Underwriter—To be determined by competi¬
April 23 filed $75,000,000 of debentures, of.which $25,000,000 will mature in 1967 and $50,000,000 in 1977.
March 7 filed $6,000,000 first mortgage bonds,
Underwriting—To
April 30, 1959. Price—Par
repayment of $11,500,000 of bank loam
notes.
England Electric System
New
$11,077,800 15-year 2%% convertible de¬
— None.
Offering —For sub¬
from May 1, 1947 to
common
Brunswick Prop¬
'
Michigan Consolidated Gas Co., Detroit
/
scription by common stockholders in the ratio of $200
principal amount of debentures for each 20 shares of
common held.
The debentures will be convertible into
Elwell & Co., Inc.,
used towards the purchase of the New
to
for
Underwriters
bentures.
Ltd., Montreal. Price
—$5.75 a share. Proceeds—Proceeds, together with $300,000 bank loan and $300,000 from the Shell Co., will be
Mar. 26
York (5/16))
Public Service Co. of Indiana Inc.
Boston, and W. C. Pitfield & Co.,
•
capital.
subsidiary, 7 and used to eliminate factoring,
purchase packaging materials more advantageously,
working capital, etc.
capital stock.
par)
For general working
owned
-
■*
April
*
(letter of notification) 75,000 shares of common
stock (par 25c.) and 5,000 shares on behalf of Raymond
Spector, President. Price—$3.75 per share. Underwriter
—Eric & Drevers and Hill, Thompson & Co., Inc., New
York.
Proceeds will be advanced to Staze Inc., a wholly
Oilfields, Ltd., Fredericton, New
2 filed 150,000 shares (no
Underwriters—William D. Elwell,
'■
Louisville, Ky.
Inc.,
notification) 20,000 units consisting of
5% preferred and one share of common.
unit.
Underwriter—Stein Bros. & Boyce,
May 9
(5/26)
Brunswick, Canada
general corporate purposes.
Francisco
San
(Kingdom of)
Sale,
Popular Home Products Corp., New
•
Proceeds to selling stockholders.
& Co., New York.
Price by amendment. Proceeds—To
purchase products and services for reconstruction of
the Netherlands in Europe and its economy.
-
150,000 snares
Mercantile
Netherlands
a
Louisville.
May 9 filed $20,000,000 10-year 3%% external sinking
fund bonds of 1947, due 1957. Underwriter—Kuhn, Loeb
($1 par) common. Under¬
writer—Burr & Co.; Inc., New York; Price by amend¬
ment.
Proceeds—Of the total, 100,000 shares are being
sold by seven stockholders. The remaining 50,000 shares
are. being sold by the company, which will use its pro¬
Feb. 28 filed
Price at market.
of
share
Price—$10
(5/15)
shares
of common stock (resulting in an aggregate of not more
than $86,341).
To be sold through Drysdale & Co., New
Proceeds—For exploration and devel¬
share.
one
Neptune Meter Co., New York
of
Toint
and San
April 28 (letter of
May 8 (letter of notification), not more than 6,500
Ltd., Toronto, Can.
April 10 filed 300,000 shares ($1 par) common.
writer—Name to be supplied by amendment.
a
•
cocktail
purchase of four Chi :Chi „ restaurants and
lounges in Long Beach, Riverside, Palm Springs
Diego and for working capital..
:
Corp.*:Santa Monica, Calif.
5
working capital.
the
Explorations,
Electric
(letter of notification) 100,000 shares ($1 par)
common. Price—$1 a share. Underwriter—John Newby,
of Los Angeles, will be authorized to sell the shares. For
retirement of bank loans, purchase of inventory and for
May
of the option
Manontqueb
Nelson
•
r
common;
40 cents
Thursday, May 15, 1947,
THE COMMERCIAL & FINANCIAL CHRONICLE
(2640)
amend¬
by com¬
pany and'proceeds wilPbteufsed irr connection with recent
April 10 filed 32,000 shares ($25 par) $1.40 convertible
preferred and 53,962 shares ($1 par) common. Under¬
writer—Smith, Burris & Co., Chicago. Price—$25 a pre¬
ferred share and $10 a common share.: Proceeds—Pro¬
ceeds, together
with funds to be provided by a term bank
to discharge indebtedness to Domestic
loan, will be used
Credit Corp. /
.
^
-
•
/
"*'•
Soft-Lite Lens. Co., Inc., New York
: i
7 (letter of notification) 29,000 shares ($10 par)
Class B- common; Price—$10 a share.
No underwriting
•
Vi
May
For
eeneraLexpansioniprogram..
/
•■/./».
.
'
.Volume 165
Solar
March
Number
THE COMMERCIAL & FINANCIAL
CHRONICLE
4594
holders
19
(by amendment)
filed 110,000 shares of
75c"
Alstyne, Noel & Co. Price
are
sold
by
initially.
cumulative convertible preferred stock, series B (par $5)
Underwriters—Van
share
$12.50 Proceeds—Net proceeds will be applied to re¬
demption of bank loans and to cover part of cost of
expansion programs
■
per
company
will
be
applied
Offering date indefinite.
to
working
Vauze
South Carolina Power Co,
Textron
Feb.
filed
28
Probable
bidders
include
First
The
amendment.
Inc., Providence, R. I.
300,000 shares ($25 par)
•
5%
000,000
Boston
Standard
Factors
New
Corp.,
•
Stateside Corp.,
75c
S.
shares.
Tri-United
Tucker Corp.,
May 7 (letter of notification) 3,000 shares ($100 par)
preferred.
For offering to employees at $100 a share.
For acquisition of buildings and ma¬
chinery and other general corporate purposes.
'
...
»
.
Sterilseat
•
.
•.
•
Corp. of America, Philadelphia
-
May 8 (letter of notification) 17,000 shares of common
stock.
Price, $1.75 per share.
Underwriter, J. Arthur
Warner & Co., New York. .Proceeds,to selling stock¬
holders,
(This letter of notification cancels previous
filing of May 2 which Was intended to cover offering of
.stock not to exceed $100,000 in the aggregate.)
Strauss Fasteners Inc., New York
; March 25 filed 25,000 shares of 60 cents cumulative
con¬
vertible preferred.
Underwriter—Floyd D. Cerf Co. Inc./
Chicago.
Offering—The shares initially will be offered
for subscription to common stockholders of Segal Lock
Hardware Co. Inc., parent, at $9 a share in the ratio
ypf one sh£Y£' 6i preferred for each 30 shares of Segal
^dfhfhoh' peld. Unsubscribed -shares of preferred will .be
Offered' publicly at? $10
^Working capital.
* * ".
a
shared. Proceeds—For additional
^
'
^
.
*
y
County Distillery
Quarryville, N.J.
Co.,
U. S. Television
of
•
unit, consisting of
common.
de¬
ployees will be permitted to purchase preferred at $4.50
per share/ Of the common 30,000 shares are reserved for
the exercise of warrants up to Jan. 15,
1950, at $3.50 per
share and 200,000 are reserved for the conversion of the
preferred. Underwriters—Names by amendment. Price
$5 per share for preferred. Proceeds—For working cap¬
?
'
* "■
"
■*
■
par)
common.
Upper Peninsula Power
$500 bond and 150 shares
No underwriting.
For retirement of out¬
ding.
be
include
Proceeds—Company was organized Feb. 26, 1947 to ac¬
quire the capital stocks and assets of three Michigan
operating-utilities—Houghton County Electric Light Co.,
District
Power
Co.
securities expected
'.H
and
Iron
Range
Light
about May 21.
&
of
Utah Chemical & Carbon Co., Salt Lake
1962, and 225,000 shares
covers
conversion
& Co., Trenton, N. J.
City
of the
Co., Inc., Boston.
of
debentures.
*•<;
common.
The state¬
reserved for
Underwriter—Carver
will
be1
bank loans.
Western Air Lines,
27
filed
1,200,000
ment.
•
Proceeds
Inc.
shares
($1 par) capital stock.
Read & Co. Inc. Price by amend¬
Offering consists of an unspecified
shares being sold by the
company and' byWilliam A. Coulter, President and
Director/The amount!
being offered by each will be stated
definitely by amend¬
ment and the total
number, of shares presently stated
will be reduced if the
offering consists of a smaller num¬
ber of shares.
Company will use its proceeds estimated
at a minimum of
$6,500,000 together with a
—
number, of
$7,500,009
bank loan, toward
payment of its promissory notes and
to finance
company's equipment and facilities expansion
program now under way.
Western Electric
Co., New York
April 16 (letter of notification) 1,500,000 shares
(no par)
common.
To be offered for
subscription to stockholders
of record May 27 at
$40 a share. Rights expire June 27.
No
underwriting. To
treasury.
reduce indebtedness and to reim¬
burse its
White
Transportation Co., Inc., Asheville, N. C.
May 5 (letter of notification) 2,000 shares ($100 par) 5%
cumulative
preferred. Price—$102 a share. Underwriter
—Scott, Horner & Mason, Inc., Lynchburg, Va. To retire
present preferred bonds and for expansion
purposes.
Stores,
Inc.
Price—Debentures 98;
25, filed 50,000 shares ($1 par) common. Under¬
writers—First Colony Corp., New
York, and Childs,
Jeffries & Thorndike Inc., Boston.
Offering—Of the total
common 5,000 shares are
reserved for offering to store
and department heads, for a limited
time, at
$6.50 per share.
Proceeds—Stock is being sold by the
four officers and directors.
{$1,000,000 12-year deben¬
tures filed at same time
being withdrawn having been
replaced by private loan from three insurance com¬
managers
panies.]'
■'
■**
v
Wisconsin Power A Light Co.,
Madison, Wis.
May 21 filed 550,000 shfrr&s ($10>lpar)'Common'Stock to
be
sold
at
competitive
: bidding.
Underwriters—
Probable bidders include
Glore, Forgan &
amendment.
Co.,
and
Harriman Ripley & Co. (jointly); The Wis¬
Dillon, Read & Co., Inc.
Proceeds—Part
Co.;
the shares are to be sold
by Middle West Corp.,
top holding company of the System, and part by pref¬
erence stockholders of North West Utilities
Co., pares!
of Wisconsin, who elect to sell such shares of Wisconsin
which will be distributed to them
common
dissolution
upon
of
North
West
Utilities
tfcf
Co.
$3.75
•
Wooden
Shoe Brewing Corp.,
Minster, Ohio
May 6 (letter of notification) 30,000 shares of stock.
Price—$10 a share.
Underwriter—The First Cleveland
Corp., Cleveland, O. For working capital.
'
Security Offerings
REGISTRATION)
given herewith. Items previously noted
: r
United States
(.
'
.
i.,
"
ii:
Government,
State, Municipal
American
Corporate Securities
*•••"
-•
•
•-'
-
&
announced
Telegraph
that
it
1, 1987*.
Co.
YORK
Co.
was
Net proceeds from the sale would be used
•
..
BUFFALO
•
CHICAGO
•
Arkansas
•
PITTSBURGH
•
ST, LOUIS
•
SAN
Power &
Light Co., Little Rock, Ark.
CLEVELAND
May
PHILADELPHIA
FRANCISCO
Dillon, Read & Co., Inc.; Glore, Forgan & Co., and Harri¬
Ripley & Co. (jointly); The First Boston. Corp.;
Lehman Brothers and Stone & Webster Securities Corp.
(jointly).
man
•
Baltimore
&
Ohio
RR.
for
through competitive bidding. Probable bidders: Morgan
Stanley & Co.; Halsey Stuart & Co. Inc.
•
•1
are
repeated)
subsidiary and associated companies with
extensions, additions and improvements to
their plants; for extensions, additions and improvements
to its own plant; and for general corporate purposes.
Company contemplates offering the new issue for sale
funds
INC.
NEW
BOSTON
Telephone
company
not
preparing a
registration statement for filing with the SEC covering a
possible issue of $200,000,000 40-Year debentures due
June
and
13
are
to provide its
Blair
•
.
(5/19-21)
ilV
tSi'f
r
shares
INDICATES ADDITIONS SINCE PREVIOUS ISSUE
•
"
unsubscribed
&
equipment and for working capital.
May
„
The
through underwriters. Price by amend¬
Proceeds—To retire preferred stock and to reduce
common
common
Proceeds—For plant construction, purchase
share.
per
($1 par)
112,000 shares of
(Only "pr°sPectives" reported during the past week
k
■
ment,
consin
•
Dec. 20 filed $700,000 15-year convertible debentures due
(NOT YET IN
'I
rights.;
Feb.
determined
Probable bidders
Prospective
_
subscription
offered publicly
.
(5/21)
preferred stock.
by competitive bid¬
Halsey, Stuart & Co.
Inc. (bonds); Kidder, Peabody &
Co.; Merrill Lynch,
Pierce, Fenner & Beane and Paine, Webber,, Jackson &
Curtis (jointly); Blyth. & Co.,
Inc.; The First Boston
Corp. Price—To be determined by competitive bidding.
Underwriting—To
ment also
195,000 shares common stock (par $1).
'Underwriter—C. K. Pistell & Co., Inc.
Offerings-Com¬
pany is selling 45,000 shares, and eight selling stock¬
■
Co.
>
*
'
March 6 filed $3,500,000 first
mortgage bonds, due 1977
and 10,000 shares ($100 par) cumulative
Price
one
Aug. 28 filed
"•
Staats Co, OfferShares will be offered for
subscription to Weber's
stockholders. Certain shareholders have
waived
in£
common
Whites Auto
:
properties.
,
ital and expansion of business.
„■
Un¬
share.
of
standing loans and for additional working capital.
Swern
Manufacturing Corp., New York
Nov. 4 filed 200,000 shares (par $1) 25c cumulative con¬
vertible preferred and 230*000 shares of common (par
50c). Price to public for preferred $5 per share. Em¬
purchase
benture bonds and 54,000 shares ($2
per
Busi¬
Power Co. The proceeds will be used in connection with
this acquisition program.
Bids—Bids for
Inc.,
May 7 (letter of notification) $180,000 10-year 7%
,$800
manufacturing
expenses.
ness—Manufacture of automobiles.
Copper
#■" Sussex
*-
Chicago
share.
Proceeds—To lease and
equip
plant at Chicago, and for other operating
.
a
Weber Showcase & Fixture
Co., Inc. (5/26*29)
Mar, 31 filed 108,763 shares .($5 par) common." Under¬
writers—Blair & Co., Inc. and Wm. R.
Underwriter—Dillon,
.
No underwriting.
.
Acquiring and developing mining
Corp., Irvington, N. J.
May 6 filed 4,000,000 shares ($1 par) Class A common.
Underwriter—Floyd D. Cerf Co., Chicago. Price—$5 a
share. The underwriting discount will be 70 cents a
No
Stanley Home Products, Inc., Westfield, Mass.
y
Plastics
April 25 (letter of notification) 30,000 shares of common
stock (par 50c). Underwriting, none. Price, at market
(about 25c). Stock will be sold through Bruns, Nordeman & Co., New York. Proceeds to selling stockholders.
Government bonds
,
.
Proceeds—For developing
mining property. Business—
Edison Co.
Nov.
The stock represents pre-incorporaunderwriting. To provide working
capital and equipment for manufacture of electric dish¬
washing machines.
:
'
"
•
(O.)
dividends.
2,000 shares ($100 par)
preferred and 12,000 shares of (no par)
for U.
.
Halsey,
Co., Inc.; and *
Smith, Barney & Co. Price to be determined by competi¬
tive bidding. Proceeds—Net proceeds
together with $4,500,000 bank loan and if necessary, the $5,000,000 to be
contributed by its parent, Cities Service Co., will be used
to redeem outstanding debt and preferred
stock, involv¬
ing a payment of $56,906,590, exclusive of interest and
Batavia, III.
will be issued
common
i,,
.
competitive bidding.
at market value.
•
.
,
."♦'Victory Gold Mines Ltd., Montreal, Canada
Nov. .13 filed 400,000 shares
c$l oar) capital stock.
derwriter—Paul E.. Frechette. Priee—25
date
.
Probable bidders include The First Boston
Corp.;
Stuart & Co. Inc. (bonds only);
Blyth &
Price—$100 a preferred share and 50 cents a
share for 5,700 shares of common. The remaining shares
•
Offering
*
Oct. 25 filed $32,000,000 first
mortgage bonds, due 1977,
160,000 shares of ($100 par) cumulative
preferred.
Underwriters—To be determined by
common.-
tion
capital.
(letter of notification)
i^ jppmylative
of
working
and
exchange for
five shares of preferred and $25 in cash, and two shares
of Class A stock in exchange for one share of preferred.:.
No underwriting.
y
May 8
for
Exchange.'
cents
the basis of $100 of bonds in
on
and
"
Toledo
cumulative preferred.; To be offered to holders of deben¬
ture bonds and Class A common in exchange for their
securities
each,
,
York
May 7 (letter of notification) 4,500 shares (no par)
;
indefinite.
Venezuela
Syndicate, Inc., New York
May 8 (letter of notification) 35,000 shares of
common
on behalf of
Edgar W. Leonard/ a stockholder.
To be
sold vat market
.through brokers on New York Curb
convertible
Proceeds—For payment of
$3,950,000 off
bank loan notes; purchase of two notes
issued by a sub¬
sidiary, Textron Southern Inc. in the- amount of'$1-:
Corp.; Harriman Ripley & Co.; Morgan Stanley & Co.;
Halsey, Stuart & Co. Inc. (bonds); Kidder, Peabody &
Co.
and
Merrill
Lynch,
Pierce,
Fenner
& / Beane
< jointly); W. C. Langley & Co. and Carl M. Loeb,
Rhoades & Co. (jointly). Price to be determined by comjpetitive bidding. Proceeds—To; reimburse -its treasury,
funds expended for property improvements.
Bids In¬
vited—Bids for purchase of securities will be received
before 12 noorn (EDT), May 19, at office of Common¬
wealth & Southern Corp. (N. Y.), 20 Pine St., New York.*
•
Mines, Ltd., Toronto, Canada
506,000
Shares ($1 par) common,
Under¬
writer—Name to be filed
by amendment. Price—50 cents
share.
Proceeds—For general operating
expenses.
Underwriters—Blair & Co., Inc., New York
Maxwell, Marshall & Co., Los Angeles. Price by
and
(5/19).
200,000 shares (no par) common and
$4,000,000 first and refunding mortgage bonds, due
1977. Underwriters—To be determined by competitive
bidding.
45
a
filed
.31
Dufault
Mar. 31 filed
capital
preferred.
"March
(2641)
disposing of the remaining 150,000 shares.
Price—$10.50 a share:> Proceeds—From
45,000 shares-
Manufacturing Corp.
10
reported
company
considering
issuing
some
$11,000,000 first mortgage bonds to finance construction.
Probable
bidders
include
Halsey,
Stuart
&
Co.
Inc.;
The company
will issue invitations shortly for bids to be
received on $6,110,000 equipment trust certificates.
The
certificates will be designed to finance not more than
80% of the purchase of new equipment.
Probable bid¬
ders: Halsey, Stuart & Co. Inc.; Salomon Bros. & Hutzler;
Alex. Brown & Sons.
•
Carolina
Power &
; :
'
Light Co.
The SEC has approved the prooosal of Electric Bond &
Share Co. to sell under competitive
bidding conditions all
(Continued
on. page
46)
46
common
stock of Carolina Power
&
Light Co., consisting of 423,408 shares, representing.
46.56% of these outstanding.
The Electric Bond and
proposal to purchase on the New York Stock
Exchange, for the purpose of stabilizing the Carolina
common, up to 25,000 shares of such stock, also was
approved. These shares will be sold later to the success¬
ful bidders for the larger block.
Probable bidders in¬
clude Morgan Stanley & Co.; Dillon, Read. & Co. Inc.;
W. C. Langley & Co.,
and The First Boston Corp.
Share's
& Co,, Inc.,
(jointly); by Smith, Barney & Co., Blyth
Peabody & Co. (jointly).
& Co.
debentures due
at
of the
1956 and callable on 30- days' notice
101.5%, and in paying off the outstanding balance
short-term bank loans executed recently by the
•
expects to file a registration, statement with
the next few days covering the above
Probable bidders: Halsey, Stuart & Co, Inc.; Mor¬
SEC within
issue.
gan
Missouri
Denver
&
all
200
steel pulpwood
Ry.
under a conditional sales
cars,
agreement.
Western
Rie Grande
RR.r (5/23)
(MST) May 23 by the
Edison Co. of New
York, Inc.
petitioned the New York P. S. Com¬
issue $60,000,000 first & refund¬
May 13 company
mission for authority to
at
Bros. & Hutzler.
Terminal
Illinois
•
' "V*
'
*
:
(Inc.).
•
Pennsylvania
July 3 stockholders will vote
;
'
.
,
/
.
/.
.
Manufacturing Co.
Salt
creating
on
issue of
a new
150,000 shares of preferred stock (par $100) and increase
RR.
authorized
May 13 company applied to
the SEC for authority to',
common
to
from-
(par $10)
1,500,000 shares
Expected that 50,000 preferred shares
1,000,000 shares.
$1,030,000 equipment trust certificates, to be sold
competitive bidding. Probable bidders include Halsey,
issue
at
room
May 15, 1948-1957. Probable bidders: Halsey, Stuart &.
Co. Inc.; Salomon Bros; & Hutzler; Harris, Hall & Co.
at 201 Rio Grande Bldg., Denver 1, Colo., for
of $1,530,000 equipment?'trust^certificates,
Series K, to be dated July 1, 1947 and due in 30 equal
semi-annual instalments Jan. 1, 1948 to July 1, 1962.
Probable bidders include Halsey, Sttiart & Co; Inc.; Salo¬
•
Consolidated
•
(5/20)
EDT) by com¬
1622, 15 Broad St., New York,, for pur-;
chase of $8,700,000 equipment trust certificates series,
HH, to be dated May 15, 1947, and due $870,000 each
purchase
mon
Pacific RR.
Bids will be received until May 20 (noon
Stanley & Co.
pany
*
capitalization from
(par $100) and 560,000 shares,
(par $1) to 50,000 shares of 5% preferred (par
$12.50) and 800,000 shares.-common (par $1). • " /'
preferred
common
company
the
r
America, Chicago
Nut Corp. of
shares
2,500
The price of the bonds as well as the interest
rate is to be determined by competitive bidding.
The/
pany.
company
(5/20)
Bids will be received at company's office, Savannah, up
to noon (EST) May 20 for lowest interest rate at which
bidders will provide $625,600 to finance 80% of cost of
of Georgia
Central
•
Look
■
May 9 stockholders voted to increase
com¬
Hall
(Inc.)
v
Bids will be received up to noon
and Kidder,
Salomon Bros. & Hutzler; Harris
Stuart & Co. Inc.;
ing mortgage bonds, Series C, due June 1, 1072, pro¬
ceeds to be used, in refunding $35,000,000 20-year 3%%
(Continued from page 45)
of its holdings of
Thursday, May 15, 1947,
COMMERCIAL $ FINANCIAL CHRONICLE
THE
(2642)
will be publicly offered late in July.
by the Indians as obligations herein discussed, but 15-year backlog of unbought cop-.
repudiation, and one for as for the suggestion that the ster¬ sumer goods had pot been manu-%
prices
higher
which, incidentally, they
deny ling balances should be wiped factured, forced
there is any excuse on the grounds away as an India form^ of post¬ than they should be; higher than
war
retroactive
Lend-tease to they will be if and when the gov-? ■
of inability to pay.
,
will be resisted
a
Attention, Mr. Dalton!
(Continued from page 6)
politically unwise.
There¬
fore, when at BW the Indian Del¬
egation proposed that the
''blocked"
sterling
balances be
Fund
liquidated by the Fund in annual
instalments, both the British and
the Americans were among
those
However, before the
ended, Lord Keynes,
delegaton, indi¬
cated that the problem would be
answered in some other way satis¬
opposing.
Conference
the entry of Japan
and the advent of
Almost to India's borders
outmoded the November, 1939 Fi¬
nancial Agreement for the sharing
that
tention
the
into
costs,
since
thereafter
India's self-interest in the matter
war
greater,
and that
therefore. India should now agree
far
became
Britain,
U. S. Pressure Resented
war
hostilities
of
form of
a
settlement based
the conversion of the ster¬
ling balances or their payment .in
the form of goods and services
over a period of at most 20 years.
They will resent any effort by the
United States to bring pressure
upon
of
the joint war costs. The Indian
upon India to make any settle¬
reply to this will be that their ment India considers unfair, al¬
actual outlay for India's own de¬
factory to India, saying: "We are
though they have no objection to
fense after Pearl Harbor mounted
the United States paying off the
grateful to those Allies, particu¬
approximately tenfold under a blocked sterling balances for Brit¬
larly to our Indian friends, who
provision of the Financial Agree¬
ain, should the United States so
put their resources at our disposal
ment which gave to the
Com¬ desire. In fact, something on this
without stint and themselves suf¬
mander in Chief in India, a Briton,
order was implicit in the 'Indian
fered from privation as a result.
the power to revise India's defense
Our
efforts
would
have been
suggestions before and during the
requirements, and that as a result
gravely, perhaps critically embar¬
Brejton Woods Conference.
On
India already has <paid a much
the
theory that the U. S. A.'s
rassed, if they had held back from
larger share of the joint war costs wealth and capacity to pay is im*helping us so wholeheartedly and
that envisaged in the 1939 agree¬
on so great a scale."
mense, India has no objection to
As for the
ment.
our
assuming Britain's wartime
settlement of the obligations thus
chief
of the UK
"incurred by
ised:
and
the
we can
see
is
reached
way
into the
end
our
daylight we shall take it up with¬
out
delay,
to settle honorably
what was honorably and gener¬
ously given."
While Mr. Dalton
doubtless will contend that Britain
into the
Indians may be
to recall Keynes'
yet see its way
The
British
argument
that
Dalton-Churchill statements.
The British current argument
that equality of sacrifice dictates
cancellation of a large part of the
sterling balances is answered in
India by a reference to the capacity-to-pay principle, fortified with
a
few statistics about the per ca¬
pita income of India, Britain and
other countries.
to regard
affluent,
The Indians
seem
Britain* as disgustingly
measured
by
Indian
at
There
is
India's
favor,
had
not
India
charged Britain exhorbitant war¬
prices for the goods and
supplied during the war
—and
converted
into
sterling
time
services
No
the British
con¬
finds
reduces
its
the
to
costs
among
which
will
goods
and
-It
.
require much
capital
materials
raw
services from abroad.
and
To proceed
to
with
live
his
action
has
dent
the
price increases
organized. The Presi¬
criticized
labor's,
not
with its plans
India is all ready, increased wages that enter intoin hand, to write the neces¬ prices. On the contrary, he has
sary checks on the Old Lady of urged the increases.
The Presi-"
Threadneedle Street, when along dent
has
not
criticized
paritycomes
Hugh Dalton and "John prices for agriculture. On the con¬
Bull" Churchill grabbing for the
trary,
he
supports
them.
His
checkbook and threatening to tear criticism of prices is confined to
pen.
it
up.
Dalton.
siderable
"Mind
answer
head,
your
out a unilateral policy, two
carry
can
is a industry, whose price increases
Mr. have been least and whose con^
Your, country has con¬ tribution to a higher standard of
; '
■
interests in India. If you living has been greatest.
Indian
The
i
caution:
play at that game."
Government Makes It!
(Continued from page 8)
payments at the pegged pre-war
rate of exchange which did not
ernment
people; if and when government ,
restores equality to industry with •
labor before the law; if and when
has government gives industry equal¬
.
. ' .
national aspirations; and ity with agriculture.
them industrialization plans
Now the President is unwilling/
nation.
Depression Unless
Electric
granted
General
and
their
wage
should
accept
their
action
creates.
•
right to sell at a fair profit
is as fundamental to our economic
freedom as the right to a job at
they are the same thing.
cannot be made at a
Goods that
get made.
Goods that cannot be distributed
at a profit to the distributor just
don't get distributed. The attack
on profit is an attack on our free
competitive system. Profit is what
distinguishes it from socialism.
It is our task to tell America
that wages and profits are the
rewards
for which men
work;
just
that they are
don't
the same thing; and
that neither men nor money
will
without wages. You must
show that both wages and profits
work
said
today
the
'reql
'the basic manufacturers.'
"He reported that
•
carrying on 'a con-*
campaign' ,to 'put the
are
centrated
heat 6n
to
;
cabinet offi¬
at the direction of President.
cers
Truman
The
profit
/.
Di¬
Executive
Sullivan,
Committee,
the
responsibility for price increases
fair
"Gael
~
Press
Recently the Associated
reported the following:
are
Politicians
fair pay;
Wages are up, food prices are UP,
peace-time costs * of - government
are
multiplied.
in¬ culprits' in the highprice picture
creases.
that
been asked
rector of the Democratic National
Motors
General
industry has
Only
to reduce prices; not labor, not
agriculture; not government. Only
industry
has,
reduced
prices.
basic manufacturers*
the
cut prices.
"Sullivan
made
these ; state¬
a week¬
ments in the first issue of
ly
of
circular
the
Democratic
National Committee called 'Capi¬
tal Comment' to be distributed t<>
party leaders down to the level of,
county chairman. It is marked
'confidential,' but officials dis¬
tributed
it
to
newsmen."
Prices and profits can
•
'
be truly
regulated only by free competi¬
which is as impersonal as
gravitation. The President would
substitute his personal opinion,
with his knowledge of business.
It
is
competition itself
which
tion,
production of goods; makes and improves products, in¬
profit is the greatest cluding all of yours, and distrib¬
assurance
of
employment that utes them in increased volume,
your employees can have. If you reduces
costs, improves quality,
don't have a profit they can't makes more jobs, and benefits all
have jobs. It is your job to make the economy.
i* *'4 ■
clear by simple economies that
Since he came into office'the
no workman in your employ can President has
believed, alternately
come
that
from
your
put the gyp on you without put¬ in an impending boom or a bust.
ting it on himself.
He has even believed in both at
If the President is going to in¬ the same time. The President is
tervene in the economy, he should
again talking of depression. Ex¬
learn more about it.
Wage in¬ cept he quit monkeying with the
ciences
and,
savings
of
industry
during the war were in large
creases
and high taxes do not
economy, he can have this depres¬
achieved
in recent
years
have reduce the. cost of living.
measure
a British responsibility*
sion right in his lap.' '
'
siphoned off tp labor ip
since if the British had permitted been
Prices can come down rapidly
the
industrialization
of
India wagea by government's interven¬ if the government quits increasing
Causes of Depression
/
then, as the industrial capacity of tion. This has prevented the re¬ costs of the items that enter into
In
American
history,
depres¬
belligerents was expanded, duction in prices of your goods prices. Price reductions'cannot be sions have resulted from three
productive capacity would to consumers that otherwise could achieved in any industry when it
major causes:
have been greater and prices cor¬ have been provided.
is threatened with further wage
One: An adequate flow of pri¬
The question now is whether cost rises by government coercion.
respondingly lower.
vate capital into investments that
Efforts to force India to accept we shall be able to hold prices Government Cause of High Prices make
jobs. This is caused by gov¬
a
scaling down of the sterling down to their present levels, or
The combination of government ernmental restrictions of profits
balances—which incidentally they Whether they will have to rise
interventions, at a time when a be they high taxes, price conas
was
predicted- when
deny can be called war debts- again,
other
India's
.
also
India, looking
checkbook,
creditor
a
great
.
standards.
its national
itself
a
large fraction of the sterling bal¬
ances would not have accrued to
spend his money better than any
average politician
can
spend it
upon
for him. The right to spend more
words.
longer
reflect
actualities—will
of his own earned money for more
bring a heated reply when the
The British-Indian Argument
British and Indians sit down to¬ productive uses should be restored
Space here does not permit gether later this njonth in London, to every American citizen by re¬
examination of more than a few
Instead of accepting this reason¬ ducing taxes. The taxes people
aspects of this very tangled and ing, the Indians will doubtless pay are always in the prices of
troublesome question, which in contend
the goods that they buy. Prices
that, had the rate of ex¬
the end it is not entirely unlikely
can come down when taxes come
change not been artificially peg¬
one way or another to
wind up ged, it would have moved in down.
on
our
own
doorstep.
(See India's favor and so resulted in
Cheap money has increased in¬
"Chronicle" of May 8, p. 9.) One
the piling up
of even greater surance costs and thereby reduced
of the arguments between Britain
the power of all the people to
Indian balances in London.
and India is over the British con¬
The Indians will refer to the protect themselves from poverty
tention that the so-called Finan¬
findings of the Select Parliamen¬ and distress, in emergencies.
cial Settlement between the two
tary Committee on National Ex¬
reached in November, 1939 was
Wage Increases
:
;
penditure
(Session 1944-45)
as
overly - generous to India. This
revealing that Indian prices sel¬
The government
continues to
was the agreement which allocated
dom
were
higher, but usually demand wage increases for labor
between the two the war expendi¬
lower than British prices. More¬ at the
expense of every member
tures. The Indians strongly deny
over, the British Ministry of Food of these Associations. The manu¬
that this was a "hard bargain" on has stated
that it was able to facturer and distributor are at
India's part; that as the weaker of
make its purchases in India during the
mercy of wages when deter¬
the two parties India was in no
the war at reasonable prices, the mining
prices,
because
wages
,position to drive a hard bargain, Indians will remind Mr. Dalton, make
up from two-thirds to fourhad it been so inclined. But in any
And they may be expected to fifths of the ultimate price paid
case, the Indians will tell Dalton
argue
further, that many sales by the consumer, the difference
in London, India paid fully under
were made to the British author¬
in the fractions depending on the
the agreement for its own defense,
ities by the Indian Government product. OPA died by law but
and that in any case India's de¬
during the war at prices less than political exhortations and propa¬
fense was;, just as important to
those charged to Indian consumers ganda continue to inflate prices
Britain and the Allies as was their
and even to the Indian Govern¬ by demanding 15-cent increases
defense to India.
On the latter
ment itself.
of wages in automobile and steel
ground, the Indians may present
For whatever it is worth, the in 1947, before the 18V2-cent in¬
Britain with a bill of "counter¬
Indians will also contend at Lon¬ crease demanded in 1946 has been
claims," in the light of the recent
The
increased
effidon that the high prices in India absorbed.
the
daylight,
Counted
is,
answer
The British Argument
Britain, Keynes prom¬
"When
cannot
retroactively to a larger share
For the first time
The Indians at London will no
doubt demand
Indian
the
"Nuts!"
,
yolume 165;
trols
other limitations'on
or
capital.
ture
THE COMMERCIAL & FINANCIAL CHRONICLE
Number, ,4594
raise" the standard of
ven¬
:;'
Two:
Mismanagement by the
government of the- money and
credit systerri; including.the' pub¬
lic
debt."'The
more
money
the'
government - spends
beyond' its i
income,
the
less
valuable
the?
government's money and its bonds?
become. Money ceases- to be a
serviceable vehicle to move goods.;
The third cause of depression ins
America is the granting or per¬
petuation of special privileges.
These grants, whether to labor or;
to agriculture or to industry, dis¬
v
>
-
1
-
turb balance within the economy.'
ATI three-causes-for depression
have
in, America- in
existed
treme
form-for
•years. . .
.<
It is riot and it
-
the
the
■/.
past
•
{
exr
dozen
j
;
;
never was
within
of
ess i
industry to create
d e p r
o n. Depressions are
created, only by government mismanagement. The greatest con¬
tribution, that American industry
can
its
power
give to. the postwar period is
solvency—not its bankruptcy;
j Except' industry remain -solvent,
'employees will be fewer
The
of
burden
.'those of
all
who
us
will
or none.
be
upon
nation*
long
as?
mains.
Let
as
living in any
incentive* re¬
who
us
veloped in the
States Bower
_
4:%
■
•
-
' '
'
•
'
h^e; grown up by
public offering
;
than
more
to win the
cut, the
there;was an easy way
war:.#
the^
foreign? nations: accept
When?
•
1
first hires- money:
icompetitive enf^rprise they can
produce their dwfi goods, develop
'
has? savings to hire has the option
•of not risking therm
,
'<
Profit
•
the
wanting to establish,. enlarge;
just operate a business. Without profit, new capital! has no * in¬
centive to risk investment; old
or
•
capital" contracts to save the prin¬
cipal.
f
!
Price reductions at' the cost of
solvency create
unemployment,
.reduce purchasing power, lower
the standard of living for alt the
,
1
,
"
,
people.
...
Let the President demand lower
taxes
own
resources,, pay their moving' out in response to
bills, meet' their owm debts; vived demand:
and abandon Currency and quota I-,-"-/-.
'' •
U. Seeking Bit More Return
controls
because
such? defenses
pay.
J
'
make ready
Protect
solvency as you
life. Reduce all pos
sible prices. Pare down- your in¬
ventories. Reduce the age of your
receivables. Reduce your organi¬
zation if possible. Improve service
to your customers. Intensify all
shop and sales training courses.
Bring new and better men- into
■
your
would your
r
organizations., Lift: the level
your
of
objectives. Gall person¬
ally, hat in hand; on good cus¬
tomers you have lost.
,,
Solvency is the greatest con
tribution you -can make to the
of
the
nation.
It
is
i
•
prices when possible, by improv
ing : quality of service. An ob
solete business makes' no profit—
Another big
-
came into the field when
he Interstate Power Co., of
Iowa,
Consolidated Edison Co. of New
York,
turned
stretch
the
into
its
on
program
vast
when,
petitioned
■
offerings even in;
contracted, so that America can i face of the fact that once such?
be the example for all the worldrr1 f
issues are placed? the majority
a free competitive enterprise lift¬
f seem? tb work up to fairly subing the standard of living. for.: all
stontta! premiums.
the people who labor and work
L
Evidently
the
disposition
to
and have ambition.
;
seek' but
return
bit
a
plus
refinancing
Tuesday, it
on
the
registered with the SEC for
first mortgage issue qf
home¬
Public
Service
The
found
This issue will round out the
company's
refinancing
$269,000,000
As
Act
the
the trend in that direction
f
;i;;Southetn Pacific Railroad's of¬
fering
of,
$22,500,000 * of
San
^
I.
Francisco. Terminal
With
loose
sponsoring
of
some
turning
groups
mortgage
bonds brought out bids from only
tWo groups when the issue was
for sale * on Tuesday..
the* recent- issues
securities.
the
Securities
:
bonds
will
be
O'okiep Copper Company
sold; in
Limited
financing will
outstanding 3%%
debentures,
provides* neither goods
I
jobs.
We
are
toward!
a
" '
''
ture
African non-resident shareholders tax the net
distribution
IIIll-CIMIMEIIS
a
PREFERRED
A'
quarterly
■"
.
••
The differences of small fraef
under the
which
•
offering prices:
certain^ of those
settled
dertakings
:
The
|
company
of
Co.
New
paid the
the
issue
York
a,
paid
the
of 99.30
for
group
price
issue while the
runner-upt
j offered to pay 98;3599.
On
tcr
seemed"!
successful
j the
un¬
reoffering at a price of 100.r
a yield of 3.35% the
45, to afford
bonds
were
reported to have met
brisk demand, with a number of
insurance
companies
appearing
as
dividend? of eighty^one* and i
Tho^e
will
be
no
depression
in
1947 unless the government makes
it.. Give
and
industry freedom to risk
venture; give back the incem-
tive of
competition; restore equal¬
for
industry with labor be
fore the law; and industry will
create wealth thaf will constantly
ity
...j..
cents
!
Y.. May 9, 1947.
New York, N.
Cumulative Convertible Pre¬
ferred Stock,. $100 par value* oV this;
Company,; has< been* declared, payable-.
June 5,. 1947,,to stockholders of record:
at the close of business May 2T, 1947;.
Transfer books will Hot be closed. Checks
will be mailed..
PACIFIC GAS AND ELECTRIG CQ.
>
w:.e; hawkinson;,
DIVIDEND NOTICE
Secretary-Treasurer.
May 8,.1947:
{
Common Stock Dividend
A ca«h
12d
MFG. CO.
shareholders
business
NO: 92
UIVIDCNLI
American Tel.
& Tel. Co.
regular* quarterly dividend' of; forty
cents ($0.40) per share upon the issued
and outstanding Common* Stock;, without
fer Books will
value* of this company, has been? de¬
clared, payable June 30, 1947, to stock¬
San
Telegraph
13 that it
100.competitive
Co.
was
announced
preparing
a
same
situation
SITUATIONS
de-
Toronto
May 8, 19 ft.
WANTED?
1
I
Presently employed, desireschange; numerous dealer
1
;
con*-
Available
June
is hereby giVen that a dividend «f
per share In Canadian currency has
declared, and that? the same will be pay¬
or after the 2nd day of June,
1947, In
respect oft the? shares specified in any Bearer
Share Warrants
of the Company of the 1929
issue upon presentation and delivery of coupons
Columbia. Uni¬
master's degree in
versity graduate,
finance,
veteran,
age
32,
married,
varied business experience, desires to
engage in security analysis or finan¬
cial-economic research, locate NYC or
elsewhere.
Box B 515, The Commercial & Financial
Chronicle, 25 Park
Place, New York 8, N. Y.
L.
been
THE
BUCKEYE
PIPE
LINE
COMPANY
30 Broad Street
New
The
Board of
Directors
C.
of
O.
VC
51,
The
Financial
Chronicle, 25 Park
j
'
Place, New York 8, N. Y.
Experienced unlisted trader available
immediately;
W
55,
and
May 14, 1947,
(25c) per share was declared on the
Capital Stock of MAGMA COPPER COM¬
PANY, payable June 16, 1947, to stockholders
of record at the close of business May 29,1947.
H. E. DODGE, Treasurer.
Newmont Mining
GUS
Financial
MRKVICKA, Treasurer..
1 Chronicle; 25 Park Place, N. Y. 8, N. Y.
The
Writer—Executive
$.11
per
share
dividend
payable
on
the
Corporation's capital stock June 16,
1947, to holders of record at the
close of business
on
June 2,
1947,
is
able; energetic, conscientious and
His initiative and judgment in
handling a multi¬
tude of details have been valuable to
done."
inc.
Directors of Fundamental! In¬
vestors, Inc. have declared a
of
reliable.
me.
New
Commercial
York
income
tttCrifcKi rates
City only.
Married.
Box S 516,
Chronicle, 25 Park Place, New
I
")
the
Dominion
WALL STREET,
mmm wmm
NEW YORK
purpose
Registered Shareholders
will
receive with-dividend cheques a? Certificate of
Deduction; and Bearers of Share Warrants
inust' completer Ownership? Certificates (Form
No.
601) in duplicate and'the Bank cashing
the* ooupons1 will endorse" both copies with- a
Certificate relative to - the deduction and? pay¬
ment of the tax and return one Certificate to
the' Shareholder! .If forms No.
601 are not
available at local United States banks
they
can
be secured from the? Company's office* or
The Royal Bank of Canada, Toronto,
i subject: tb» Canadian regulations affecting
enemy
aliens,
non-residents of Canada may
convert? this
Canadian dollar dividend into
United States currency or such other foreign
currencies as
are
permitted by the general
regulations of the' Canadian Foreign Exchange
Control Board at the official Canadian Foreign
Exchange control rates prevailing on the date
of presentation: Such conversion can be effected
only- through an Authorized Dealer, i. e.,
a
Canadian branch of any Canadian
chartered
bank. The Agency of the Royal Bank of Canada,
68 William Street, New York City, is prepared
to accept dividend cheques or coupons for col¬
lection through an Authorized Dealer and con¬
Tax
permitted foreign currency.
Warrant of
Share
will on request and when
to the holder of any Bearer
the Company a copy of the
Company's annual report for the fiscal year.
i
5, N. Y.
of
which
By order of the Board,
Mm
48
i
of
tax
shown
on
their? United States
Federal
income^ Taxr return. In order to claim such
credit the United States tax authorities require
evidence
of
the deduction
of said' tax, for
General Secretary.
COLIN D. CRICHTON,
56
Church Street,
May 7,
It
Act'
resident in the? United States
advised' that a credit for the Canadian
withheld at? source • is allowable against the
Toronto
i;i
Tax
Shareholders
version into any
& Financial:
York 8, N. Y.
1947;
the 30th day of May,
The
Secretary
available forward
He gets things
Now employed as editor of high-grade financial
weekly.
at
provides that a? tax of 16% shall be
and deducted at the source on all
dividends
payable
by- Canadian* debtors
to
non-residents
of
Canada.
The
tax
will
be
deducted from all' dividend cheques mailed to
non-resident shareholders and the Company's
Bankers will deduct' the tax when paying cou¬
pons to or< for accounts ? of non-resident? share¬
holders. Ownership Certificates (Form No. 600)
must? accompany? all1 dividend coupons presented
for? payment by residents of Canada.
are
May 14j. 1947; a dmdend'of 50 cents per
was
declared on the Capital Stock of
Newmont Mining Corporation, payable Jitne
16, 1947; to stockholders of record at the close
of business May 29, 1947.
Ex-newspaper man with* over *25 years' experience writ¬
ing in various fields including securities, business articles,
publicity, correspondence; Has been executive assistant
to prominent men, including a President of the U.
S., who
"He
record
of
16th day of May,
imposed
tax
share
INVESTORS
him:
the
Canada
/
*L
of
on
The?
The
dividend of Twenty-five
a
Cents
FUND A M I N T A? L
said
Shareholders
to
business
1947,
and whose shares- ate represented by
Registered Certificates of the 1929 Issue, will be
made by cheque, mailed from the offices of the
Dividend No. 99
On
Can furnish references:
Commercial
Canada.
transfer books will be closed from the •it5
day cf May to the. 31st day of May, 1947,
inclusive, and? no Bearer Share Warrants will
be converted into other? denominations of Share
Warrants during that period.
Dividend No; 75
I
payment
close cf
the
1;
17th
On
j,A/: Unlisted Trader
Church Streets Branch
and
Toronto
Company on
Corporation
Commercial. &
/
THE ROYAL BANK OF CANADA
King
Secretary
BELL,
at:
67
No.
this
—-
Branch Office in all de¬
on
York, April 29, 1947
Company has
this day
declared a dividend of Twenty. (20)
Cents
per
share on the outstanding capital
stock, payable June 14, 1947 to shareholders
of record at the close of business May 16, 1947.
tacts; capable handling: Chi¬
tails. Salary and commission.
cents
25
able
WANTED
15*
,
NOTICE
May
regis¬
Analysis—Research
I
1, Ontario
TO' SHAREHOLDERS AND THE
OF SHARE WARRANTS
NOTICE
HOLDERS
Magma Copper Company
SITUATIONS
:
Imperial Oil Limited
HAWtCINSON,
i
the
Beckett, Treasurer'
Francisco;'California
6, 1947i Transfer books? will, not
closed. Checks will be mailed.
tracted.
Much
S
holders of record? attheclbseof. business f
be
!
for
close o£i
the
at
1947. The- trans¬
be closed.
June
.
2%%.,
not
E. J.
par
The American Telephone and
company
of i record?
May: 26,
on
A?
W. K
in
market
COMMON
_
declared by the
dividend
Board
of Directors on May 7, 1947, for the''
second quarter of the year 1947, equal to2%- of? its'par'value? will be paid upon?
the Common Capital. Stock of this Com¬
pany by
check on JUne 27, 1947, to
AlUS-CH AIMERS
tration statement for filing with
to
not? working, our way
depression.
We
are
labor's monopoly must be ended.
37
H? E. DODGE, Secretary.
NO. 3?
DIVIDEND
approximately
3*4,%
buyers.
the SEC covering a possible ispublic
of
$200*000,000
40-Year
offering at 101.05 the bulk of the j sue
Debentures due June 1, 1987.
issue- was sold quickly, but' the
Net
proceeds
from
the
sale
group reportedly still held bonds
when the
syndicated agreement would be used to provide its sub¬
was terminated,
It settled there^sidiary and associated companies
after to around 100% where good with* funds for extensions,, addi¬
tions
and improvements to their
institutional
inquiry
was,
at¬
Brought
Box
be
By order of the Board of Directors
Secretary.Treasurer.,
bidding.
cago
will
share.
MFG. CO.-
;
capital must be redqced and
1947, of "American Shares" issued: under
27,
-
ahead.
for
Company.
the terms of the Deposit Agreement dated
June 24, 1946. After deduction of the South
nor
^working our way out into,a fully
competitive market. If depression
is to, be avoided, taxes on ven¬
shares of the
was
at
Dividend No. 3
The Board of Directors today declared a divi¬
dend of two shillings per share on the Ordinary
The dividend is payable June 27, 1947 to the
record holders as at the close of business May
makes no friends. A busted busi¬
ness
'
pro¬
DIVIDEND NOTICES
"These" proved to be- rather*
lagged a bit the- market
reported cleaning up in good, iwide^apart in contrast with the
style this week, assuring! a deaiv recent close bidding that has
track for new issues which are : attended competitive offerings.,
that had
tions
reor¬
DIVIDEND NOTICES
vide for retirement of $35,000,000
of
plan of
outstanding securities.
one-quarter cents,($.81 lA,), per share on
Southern Pacific
-
.
new
by
The. current
sell
competitive
project
competitive bidding.
the:
t
in
required
in
its
under
to
proposes
issues
ganization to replace its currently
investment
recently.
s
Series
?
the :iriorifierit: Several houses have
rter
bonds
common
par.
company
these
which, involved the flotation of
explahatibrirfor the reported ten
dency toward, preferred stocks at
i
mortgage
1972.
$3.50
a new
$19,400;000
3,000,000 shares of
stock of
in the way of
is the
more
the
on
utility refinancing
project
Consolidated? Edison in Last Lap
bidding
the
tihguished from; his method; It is
the true assurance of jobs at high
wages.
It is. the assurance of
solvency to t your suppliers. It is
the assurance -of growth to! your
owners.
Every, member. of these
Associations^ knows- that solvency
i&w best,
achieved, by. reducing
Another Large Refinancing
offering, the new issue for sale
through competitive bidding.
C, due
.
welfare
contemplates
company
funding
your,
greatest support you can give the
President in his purposes, as dis
re¬
be needed* With freedom 4x 4[h casually active dealer circles
enterprise: they cam raise, the deports indicate that institutional
iron? curtain, the quota; curtains; buyers* are in a decidedly quiesthe bloc curtains and! other; re-, ;cenW-mood at the
moment and
strictions that keep, their people showing- little inclination to any¬
in subjugation.
thing more than stand aside.
.H
Only American? competitive *
These interests still are not.
freedom can lift the world' from i
especially well pleased with the ?
poverty to plenty.. Freedom in (.vindicated
return
offered
by
America should be expanded; pot
> most? recent
729
The easiest way to discount a
depression in your business is to
for it.
v-
I
•
ing.
The
.
won't
Bankers
Keep Solvent
purposes.
own
to
Edison
public to
plant; and! frir genera! corporate
due in 1956 and for the
liquida¬
tion of short-term bank loans in¬
curred to facilitate the refinanc¬
its
both
.
i
additions
Commission'for authority to issue
$60,000,000? of new first and re¬
fall. Let
; the yield! offered to make them;
the. government buy agricultural
attractive, to
institutional',
1 products at parity and not above
buyers.
parity so that food prices can
At any rate that appeared to be
t
drop. Let the government quit
the case in the instance of the
forcing wage increases that lift
marketed
Consolidated
i prices beyond the ability of the recently
•
was
t
provide sufficient difference in.
that prices may
so
for extensions,
improvements, to
without!
own
ofJ
^inducement
men
:
•
is
'
and
'said* the-balance of the issue*
fered to the investor by business-
-
loose
prop
their
The" job
'comes next. The salable products
for use come last. The man who
issue
syndicate
it tapered off!
toaround 100% bid 100 7/8 offered.
At' these levels, however, it was
i Enterprise cannot hire men unial>/it
-
'f.,
priced for
101*4. After
thatt it? is i a good start inquiry tapered off
not an easy way. But there is no ; somewhat.
easy way, to will the peace, any. j; The sponsoring group recently
^The President cannot expect pro¬
duction tq climb on red ink and
icontinued losses.'" ;
was
at
plants;
2%s,. due I and
Go.'s
competition^ recognize
solvent.
remain
of Northern
case
1977*; That issue*
47
i
-.T
-J
1, Ontario.
1947.
1
r
*
f
">
i
••
"s
i
i'"!
>*
48
Thursday, May 15, 1947,
FINANCIAL CHRONICLE
THE COMMERCIAL *
(2644)
British Official Doubts
EINZIG
By PAUL
seeking a
British workman to work
harder; (2) opposition to further restrictions; and (3) belief that
resistance to non-discrimination imposed by U. S. will stiffen in
Dr.
for British opposition to
Einzig gives as reasons
second U. S. loan: (1)
need for inducing
later the British
widely assumed that sooner or
Government will apply to Washington for a second
July 15. This is the question of; whether the loan agreement calls
for the convertibility of all current sterling or only of "net balances."
The question is
,
Socialist Members of Par¬
emphatically comes out
against a second loan.
This view
is shared by a large number of
other members, both Conservative
and Socialist.
The government
itself is believed to be divided on
the subject, but those in favor 6f
seeking salvation through auster¬
ity, headed by Sir Stafford Cripps,
appear to be gaining the upper
Land.
The idea is that, so long
as
it
appears
that the United
young
liament,
.
in the
near
future would have to
be envisaged.
of
Sale of Canol
The
of
Office
Britain
nation by gotiated basis.
the fuel crisis were not sufficient
Invitations to bid
to achieve this result.
If, how-
result of the exhaus¬
tion
of the dollar resources, it
should come to be realized that
the country simply must pay its
way,
then possibly the British
workman, thoroughly
pampered
and spoiled through the combined
effects of full employment and
the existence of a Labor Govern¬
ment in office, may put his back
into it as he did during the war.
on
erty were distributed
ary.
offers
The
this
prop¬
last Janu¬
publicly
were
Twenty-five
bidders submitted
to
However, Major Gen¬
Donald H. Connolly, Foreign
a
whole
or
Commissioner,
in
requiring
British interest as
sees
that the Bank swing
quickly into
whose re¬
action to aid countries
would assist Britains. "We
might then, incidentally, have an
of
some
the
salvaging
of
prospect
improved
the
derelict
capital we
world in
days when we were the
with
said
qualified bid for the project as
combination
lots
adequate and in the best
in¬
lender
—
big
frequently
greater benefit to the bor¬
rowers
But
In any case,
Areas, Room 2035, Temporary R
at least half of the Labor Party
Building, Fourth and Jefferson
would be opposed to any under¬
taking to stop nationalizations, so Driver s. W., Washington, D. C.
with Norway
main
because
the
requests from
British
Mexico and Chile involve
interests
of
past
their
treatment of British investments.
If the Bank is to make only
sound
loans to
convincing evidence of their
intention
attitude
to
to
revise
foreign
surely,
undertaking
achieve an equitable settlement
outstanding liabilities.
their
former
capital.
The
requirement,
minimum
to
con¬
and Sweden. V,
INDEX
For detailed index of
would have to be an
to
of
contents
see
3
page
Bank's
future
eourse
entirely satisfies. British
holders of Mexican and Chilean
bonds or other property remains
the
Whether
Eugene Black, Amer¬
to be seen.
Director
Executive
ican
recently
Bank,
of the
this
told
Old
Reorganization
Rails
corre¬
spondent as follows:
"It
burden \of
editorial is that loan
and
"The Financial Times"
interesting example of a British
than ourselves."
the
credit-worthy borrowers,
controls Congress,
large dollar loan is inconceivable physical properties of Canol 1 has countries like Mexico and Chile,
without
political conditions at¬ been estimated at $15,000,000.
on the basis of past performance,
tached to it.
It is expected that
Information on Canol 1 may be will have great difficulty in satis¬
the Republicans would insist at
obtained from Charles B. Jones, fying
the Bank,
the editorial
least on a halt being called to
Commissioner for states, adding: ^"They would cer¬
nationalization, but possibly also OFLC Field
on
a
Conservative-Socialist Co¬ Canada and the North Atlantic tainly be required to give clear
alition Government.
similar
a
near
clusion and talks are to open soon*
An editorial in
think.
foreigners
what
eral
no
with France is
American investors. American legis¬
attention has been paid in this country
(London) of May 2 provides an
investor viewpoint* The editorial'
international
Liquidation
one
while
and Italy,
erland
officials,
financial
lators—that relatively little
proposals.
for which the
,
Policies
Executive Director Black,
Bank cannot be
Mexico and Chile.
have scattered about the
opened April 28, last.
was
another
,
WASHINGTON, May 14 (Special to the "Chronicle")—So much
World Bank's fate depends upon what Americans think—
covery
consideration
government is gen¬ terests of the Government it was
uinely anxious to avoid a second decided to sell Canol 1 on a nego¬
American loan.
It is widely as- tiated basis.
sumed that, now that a Republican
The
procurement, cost of the
majority
a
is
J
despatch stated that: "It
acquired as a result of current was emphasized that only de¬
transactions, on a gross basis.
mands for sterling rising out of
Asked by the writer whether current trade must be: converted!
the
American
Foreign
the
vations inflicted on the
There
of all
convertibility
ate
tells "Chronicle" correspondent
collecting agency for old bondholders.
OFLC lo Negotiate
to
a
immedi¬ origin.
Sterling
The
ish loan had in mind the
other hand,
on
Liquidation Commissioner has re¬
needs jected all bids for . the Canol 1
some form of shock, in order that
project located in Canada and will
her people. should be galvanized
into exerting themselves to in¬ proceed to reoffer that war-time
crease production.
Even the pri¬ crude oil facility for sale on a ne¬
as
Note difficulties with
-
work harder.
over,
Press
United
a
,
Britishers Irked Over World Bank
would continue to cover
Britain's trade deficit as a matter
of course, nothing could possibly
doubt,
to
wait for a c^ffain period sterling, after July 16, the day on
converting their acquisi¬ Which sterling/ according to the
tions of new Sterling into other Anglo-American loan agreement
currencies,
If they do, Britain becomes 'freely convertible.'" /
He explained that "freely con¬
may expect complaints and those
complaints, seem likely to have vertible" does not mean that Brit¬
the support of the U. S. Govern¬ ish capita! then can be transferred!
ment, since it seems clear—at from country to country or that
least
to
this
writer—that the Britain must pay dollars fqr all
American negotiators of the Brit¬ imports, regardless of country of
.
States
-
According
jthe tr. S. Treasury interprets the on demand, while in the case of
convertibility clause as applying countries with which Britain has
on a net or gross basis, the Treas¬
reached
prior < financial
agree¬
ury through its spokesman, An^ ments, or expects to in the near
drew Overby, today replied: "We future, demands for dollars must
at the end of a day, a week, or a
very broad, interpretation of conb
be met only if needed by the
vertibility.
Should the British month? Does it mean the net bal¬ have no comment — no comment exporting nations to meet other
Treasury accept this interpreta¬
at this time."
:
commitments on current transac¬
ances of a single country, of the
tions-it seems certain that by-the
tions."
^
*
time the Conference on Trade and
Agreements - of this Character
Employment arrives at its critical
already have been concluded with
phase the possibility of an exhaus¬
tion of the British dollar reserve
Voicing agitation for salvaging their own previous commitments. / Belgium, Holland, Portugal, Switz¬
•
workman
lars for all imports.
of the
before
'
British
require Britain to pay in dol¬
not
have to
.
Beyond
"freely convertible." Says AngloAmerican loan agreement does
dispatch from London on May 9,
British. Treasury
ance" interpretation in any of the a
spokesman
as
"entirely unfounded-*
above forms, - it-may mean that stated
countries acquiring Sterling as a reports in the United States that
result of current transactions will "there will be heavy selling in
.
the
or
heavy selling of Sterling will
when this currency becomes
adopts the "net bal¬
If Britain
,
induce
-
entire non-dollar area?
'
,
unit,
a
spokesman de¬
come
of London's his¬
of importance from the standpoint
world financial^
Sterling area as
able to comply entrepot.
with any American demand to
able
to
con¬
For example, if India after July
that effect, the government would
tinue
to
fi¬
15 elects to convert into dollars
have to rely On Conservative sup¬
nance
the
immediately all Sterling* proceeds
-deficit in hard
port for its majority.
of its current transactions and to
currencies af¬
•; " There is a widespread suspicion reconvert dollars into Sterling for
ter
the
proamong Socialists that the reason any goods and services the UK
ceeds
of the
why the Washington Administra¬ may supply India, the latter, coun¬
tion is pressing relentlessly for the try in effect- will be keeping, its
Vfirst loan have
lieen used up:
fulfillment of the undertaking to trading
balances
i n
America
During the
make
sterling
convertible
on rather than London.
The status
.last few
July 15 is that it wishes to acr of 'Sterling will tend to be im¬
weeks,
how¬
celerate the pace at which the paired and the earnings of "The
ever,
strong
proceeds of the dollar loan are City" will tend to suffer.,
",
doubts
have
depleted.
The theory that this
But if Britain so interprets the
■arisen
aim is pursued in order to be able
Loan Agreement as to require the
whether • the
Dr. Paul Einzig
to force on Britain the mainte¬
convertibility of only the net bal¬
g 6 v e r nment
■
! nance of the capitalist system is ance "or" net "balances" on cur¬
would take that course. Indeed, considered by most people as too
rent account, it will be necessary
many quarters hold the view that
Machiavellian to be taken seri¬
for the trading nations—such as
sa second
loan would not be ac- ously.
On the other hand, many
cepted even if the initiative came quarters believe that in Washing¬ India—to keep substantial bal¬
from Washington and even if no ton the stiffening British resis¬ ances
in
London.
The
Loan
unpopular political or economic tance to non-discrimination is ex¬
Agreement does not mention net
conditions were attached to it.
?
pected to be overcome if Britain balances in this connection. Does
The pamphlet entitled, "Keep is once more in bad need of dol¬
Left," published by 15 active and lars.
Hence, the insistence on a the term mean the net balances
that, iri order to be
be
to
nies
toric position as a
dollar loan, in
order
British Treasury
WASHINGTON, May 14 (Special to the "Chronicle").—A prob¬
interpretation arises in connection with the implementation
of the convertibility-of-sterling provisions of the British Loan next
LONDON—Until recently it was
r I
Sterling Impends
lem of
exhausted.
Britain when her dollars are
Heavy Sale of
Interpretation of "net balance*' provision of Loan
Agreement vitally important to status of sterling
and to London's "City."
,
incorrect
is
state
to
that
and I are opposed to
Mr. McCloy
lending to Latin
America.
It is
Domestic & Foreign
Securities
perfectly safe to say, of course,
that if a country has defaulted,
Bank will have to be
the
careful
more
New Issues
bit
with a. non-
But the Bank has not
defaulter.
any
than
a
policy not to lend to past
The Bank cannot be
m.s.Wien&Co.
'
a
collecting agency for
holders.
mean
ested.
"However,
that doesn't
40
*
,
r
Y.
Security Dealers Ass'm
Exchange PL N. Y.5
HA. 2-8780!
Members N.
Teletype N. Y. 1-1397
M
disinter¬
must weigh any default
Perhaps a loan will
that the Bank is
It
situation.
improve the
so
old bond¬
1919
ESTABLISHED
defaulters.
help old
general economy and
bondholders."
'"Seaboard Fruit Co., Inc.
;V
;
i
•
X
'•
'•
•
'
'
r
v
■
General Products Corp.
HEYDEN
Series
CHEMICAL CORP.
A 3 Yz %
Teletype—NY 1-971
HAnover 2-0050
4Yz%
Kobbe
'
Members
National
55 Liberty
Association
of
Securities
Dealers, Ino,
.
r.ARL MABZS S,
-
\
FOREIGN
Teletype
NY 1-277
T-S-
P.O. 1KC.
SECURITIES
,
'
SPECIALISTS
Street, New York 5, N. Y.
T*"
^Prospectus on Request
All Issues
& Company
INCORPORATED y.»,
7-2663
Empire Steel Corp.
FOREIGN SECURITIES
Cumulative Preferred
Telephone
B A relay
Markets
STORES CORP.
BOUGHT—SOLD—QUOTED
7
Susquehanna Mills
Cumulative Preferred
Firm Trading
LERNER
j
50 Broad Street
AFFILIATES CARL
New York 4# N. Y.
MARKS & CO, Inc. CHICAGO
Hill, Thompson & Co.,
Markets and Situations
120
Broadway, New
Tel. REctor 2-2020
Inc.
for Dealers
York 6
Tele. NY
1-2600
@FedFRASER